1st Unofficial Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to the financing and operation of government 1.3 in this state; providing a sales tax rebate; providing 1.4 property tax reform; making changes to income, 1.5 franchise, sales and use, property, motor vehicle 1.6 sales, mortgage registry, deed, motor fuels, cigarette 1.7 and tobacco, liquor, insurance premiums, minerals, 1.8 estate, solid waste management, and special taxes; 1.9 changing and allowing tax credits, subtractions, and 1.10 exemptions; conforming with changes in federal income 1.11 tax provisions; providing a property tax homestead and 1.12 agricultural credit; changing property tax valuation, 1.13 class rate, assessment, levy, classification, 1.14 homestead, credit, aid, exemption, deferral, notice, 1.15 hearing, equalization, review, appeal, abatement, and 1.16 distribution provisions; changing certain tax court 1.17 jurisdiction; providing and modifying certain aids to 1.18 local units of government; providing for certain 1.19 payments in lieu of taxes; changing levy authority; 1.20 modifying eligibility for renewable energy project 1.21 funding; requiring biodiesel fuel contents and 1.22 providing for its taxation; indexing motor fuel tax 1.23 rates; providing for deposit of motor vehicle sales 1.24 tax proceeds; freezing the taconite production tax for 1.25 certain years; changing the taconite tax relief area 1.26 for certain purposes and providing for aids and 1.27 taconite production tax distribution; providing 1.28 priorities for disposition of production tax proceeds 1.29 by the iron range resources and rehabilitation board; 1.30 providing for state takeover of certain costs of 1.31 district court administration, out-of-home placement 1.32 and day services; providing for uniform sales and use 1.33 tax administration; providing for taxation and 1.34 incentive payments on forest lands; providing for 1.35 metropolitan area financing and governance; providing 1.36 for electronic filing and payment of taxes; changing 1.37 procedures for disposition of seized contraband; 1.38 changing tax increment financing provisions and 1.39 authorizing certain grants, establishment of 1.40 districts, duration extensions, and tax increment 1.41 expenditures; authorizing establishment of housing 1.42 replacement tax increment districts; depositing 1.43 certain rental motor vehicle taxes in a fund providing 1.44 revenues for airport impact mitigation; changing 1.45 property tax refunds and calculation of rent 1.46 constituting property taxes for purposes of property 2.1 tax refunds; changing and authorizing certain local 2.2 taxes; providing special authority to certain 2.3 political subdivisions; authorizing special taxing 2.4 districts; changing and clarifying tax administration, 2.5 collection, enforcement, interest, refund, and penalty 2.6 provisions; imposing a use tax on certain waste 2.7 generators and haulers; changing revenue recapture and 2.8 debt collection provisions; changing and imposing 2.9 fees; providing certain duties and powers to the 2.10 commissioner of revenue and to county assessors; 2.11 changing border city tax provisions; changing 2.12 provisions relating to tax-forfeited lands and 2.13 providing for tax-forfeited lands transfers; defining 2.14 terms; classifying data; authorizing bonding; 2.15 requiring studies and reports; imposing a criminal 2.16 penalty; appropriating money; amending Minnesota 2.17 Statutes 2000, sections 10A.01, subdivision 10; 2.18 10A.09, subdivision 6a; 10A.27, subdivision 1; 10A.31, 2.19 subdivision 3; 15.0597, subdivision 1; 16D.08, 2.20 subdivision 2; 84.922, by adding a subdivision; 88.49, 2.21 subdivisions 5, 9a; 88.491, subdivision 2; 97A.065, 2.22 subdivision 2; 103D.905, subdivision 3; 115B.24, 2.23 subdivision 2; 116C.779; 116J.424; 123A.45, 2.24 subdivisions 2, 6; 123B.75, by adding a subdivision; 2.25 126C.13, subdivision 1, by adding a subdivision; 2.26 126C.17, subdivision 2, by adding a subdivision; 2.27 126C.48, subdivision 8; 144.3831, subdivision 2; 2.28 161.20, subdivision 3; 179A.101, subdivision 1; 2.29 179A.102, subdivision 6; 179A.103, subdivision 1; 2.30 204B.06, subdivision 4; 204B.09, subdivisions 1, 1a; 2.31 204B.11; 204B.135, subdivision 2; 204B.32, subdivision 2.32 2; 204D.02, subdivision 1; 204D.08, subdivision 6; 2.33 204D.27, by adding a subdivision; 209.02, subdivision 2.34 1; 211A.01, subdivision 3; 211B.01, subdivision 3; 2.35 239.101, subdivision 3; 252.43; 256B.092, subdivision 2.36 5; 256B.19, subdivision 1c; 260.765, by adding a 2.37 subdivision; 260.771, by adding a subdivision; 270.06; 2.38 270.271, subdivisions 1, 3; 270.60, by adding a 2.39 subdivision; 270.70, subdivision 13; 270.73, 2.40 subdivision 1; 270.771; 270.78; 270A.03, subdivisions 2.41 5, 7; 270A.11; 270B.02, subdivisions 2, 3; 270B.03, 2.42 subdivision 6; 271.01, subdivision 5; 271.21, 2.43 subdivision 2; 272.02, subdivisions 7, 10, by adding 2.44 subdivisions; 273.061, subdivisions 1, 2, 8; 273.072, 2.45 subdivision 1; 273.11, subdivisions 1a, 14, by adding 2.46 a subdivision; 273.1104, subdivision 2; 273.111, 2.47 subdivision 4; 273.121; 273.124, subdivisions 1, 13, 2.48 14; 273.13, subdivisions 22, 23, 24, 25, 31; 273.134; 2.49 273.135, subdivisions 1, 2; 273.136, subdivision 2; 2.50 273.1391, subdivisions 2, 3; 273.1392; 273.1393; 2.51 273.1398, subdivisions 4, 4a, by adding subdivisions; 2.52 273.1399, subdivision 6, by adding a subdivision; 2.53 274.01, subdivision 1; 274.13, subdivision 1; 275.065, 2.54 subdivisions 3, 5a, 6; 275.066; 275.07, subdivision 1; 2.55 276A.01, subdivisions 2, 3; 281.17; 282.01, 2.56 subdivision 1; 282.04, subdivision 2; 282.241; 2.57 287.035; 287.04; 287.08; 287.12; 287.20, subdivisions 2.58 2, 9; 287.21, subdivision 1; 287.28; 289A.02, 2.59 subdivision 7, by adding a subdivision; 289A.08, 2.60 subdivision 11; 289A.12, subdivision 3; 289A.18, 2.61 subdivision 4; 289A.20, subdivisions 1, 2, 4; 289A.26, 2.62 subdivision 2a; 289A.31, subdivision 7; 289A.50, 2.63 subdivisions 2, 2a; 289A.55, subdivision 9; 289A.60, 2.64 subdivisions 1, 2, 7, 21, by adding a subdivision; 2.65 290.01, subdivisions 6b, 19, 19b, 19c, 19d, 31; 2.66 290.06, subdivision 23, by adding subdivisions; 2.67 290.067, subdivisions 2, 2b; 290.0671, subdivisions 1, 2.68 7; 290.0674, subdivision 1, by adding a subdivision; 2.69 290.0675, subdivision 3; 290.068, by adding 2.70 subdivisions; 290.0921, subdivision 3; 290.191, 2.71 subdivision 5; 290.35, subdivision 2; 290.92, 3.1 subdivision 23; 290.9725; 290A.03, subdivisions 11, 3.2 12, 13, 15; 290A.04, subdivisions 2, 4; 290A.15; 3.3 291.005, subdivision 1; 295.50, subdivisions 3, 4, 15; 3.4 295.52, subdivision 4; 295.53, subdivision 4a; 295.55, 3.5 subdivision 4; 295.57, subdivision 1; 296A.07, 3.6 subdivision 4, by adding a subdivision; 296A.08, 3.7 subdivisions 1, 3, by adding a subdivision; 296A.15, 3.8 subdivisions 1, 7; 296A.16, subdivision 2; 296A.21, 3.9 subdivisions 1, 4; 296A.24, subdivisions 1, 2; 3.10 297A.01, subdivisions 3, 5; 297A.07, subdivision 3; 3.11 297A.25, subdivisions 3, 11, 28; 297A.61, subdivisions 3.12 2, 3, 4, 6, 7, 9, 10, 12, 14, 16, 17, 19, 22, 23, by 3.13 adding subdivisions; 297A.64, subdivisions 3, 4, by 3.14 adding a subdivision; 297A.66, subdivisions 1, 3; 3.15 297A.67, subdivisions 2, 8, 23, 24, 25, by adding 3.16 subdivisions; 297A.68, subdivisions 2, 3, 5, 11, 13, 3.17 14, 18, 19, 25, by adding subdivisions; 297A.69, 3.18 subdivision 2; 297A.70, subdivisions 1, 2, 4, 7, 8, 3.19 10, 13, 14; 297A.71, subdivision 6, by adding 3.20 subdivisions; 297A.72, subdivision 1; 297A.75; 3.21 297A.77, subdivision 1; 297A.80; 297A.82, subdivisions 3.22 1, 3; 297A.86, subdivision 1; 297A.89, subdivision 1; 3.23 297A.90, subdivision 1; 297A.91; 297A.92, subdivision 3.24 2; 297A.94; 297A.99, subdivisions 7, 9; 297B.03; 3.25 297B.09, subdivision 1; 297E.02, subdivision 4; 3.26 297E.16, subdivisions 1, 2; 297F.09, subdivision 7; 3.27 297F.16, subdivision 4; 297F.20, subdivision 3; 3.28 297F.21, subdivisions 1, 2, 3; 297G.09, subdivision 6; 3.29 297G.15, subdivision 4; 297G.16, subdivisions 5, 7; 3.30 297G.20, subdivisions 3, 4; 297H.04, by adding a 3.31 subdivision; 297I.35, subdivision 2; 297I.40, 3.32 subdivisions 1, 2, 7; 297I.85, subdivision 7; 298.018, 3.33 subdivisions 1, 2; 298.17; 298.22, subdivision 2, by 3.34 adding a subdivision; 298.2211, subdivision 2; 3.35 298.2213, subdivision 3; 298.2214, subdivision 1; 3.36 298.223, subdivision 1; 298.225, subdivision 1; 3.37 298.24, subdivision 1; 298.27; 298.28, subdivisions 1, 3.38 3, 4, 6, 7, 9, 9a, 9b, 10, 11, 15; 298.282, 3.39 subdivision 1; 298.292, subdivision 2; 298.293; 3.40 298.296, subdivision 2; 298.2961; 298.298; 298.75, 3.41 subdivisions 1, 2, 7; 299D.03, subdivision 5; 353D.01, 3.42 subdivision 2; 357.021, subdivision 1a; 383B.79, by 3.43 adding a subdivision; 461.12, by adding a subdivision; 3.44 469.040, subdivision 5; 469.169, by adding a 3.45 subdivision; 469.174, subdivisions 10, 10a, 12; 3.46 469.175, subdivisions 1, 5, 6, 6b, by adding a 3.47 subdivision; 469.176, subdivisions 1b, 1e, 3, 4g, by 3.48 adding a subdivision; 469.1763, subdivisions 3, 6, by 3.49 adding subdivisions; 469.177, subdivision 1; 469.1771, 3.50 subdivisions 1, 2a; 469.178, by adding a subdivision; 3.51 469.1812, subdivision 2; 469.1813, subdivision 6; 3.52 469.202, subdivision 2; 471.58; 473.123, subdivisions 3.53 1, 4, 7; 473.146, subdivision 4; 473.39, by adding a 3.54 subdivision; 473.446, subdivision 1; 473.625; 473.843, 3.55 subdivision 3; 475.58, subdivision 1; 477A.011, 3.56 subdivisions 27, 34, 36, by adding subdivisions; 3.57 477A.013, subdivisions 8, 9; 477A.03, subdivision 2; 3.58 477A.11, subdivisions 3, 4; 477A.12; 477A.14; 3.59 477A.145; 480.181, subdivision 1; 487.33, subdivision 3.60 5; 488A.03, by adding a subdivision; 488A.20, by 3.61 adding a subdivision; 574.34, subdivision 1; 609.75, 3.62 subdivision 1; Laws 1986, chapter 396, section 5; Laws 3.63 1992, chapter 499, article 7, section 31, as amended; 3.64 Laws 1996, chapter 471, article 2, section 29; Laws 3.65 1999, chapter 243, article 4, section 19; Laws 2000, 3.66 chapter 490, article 1, section 2; Laws 2000, chapter 3.67 490, article 2, section 1; Laws 2000, chapter 490, 3.68 article 7, section 3; Laws 2000, chapter 490, article 3.69 8, section 17; Laws 2000, chapter 490, article 11, 3.70 section 26; proposing coding for new law in Minnesota 3.71 Statutes, chapters 103B; 204D; 239; 245; 273; 290; 4.1 290A; 295; 296A; 297A; 297F; 297H; 299G; 375; 383A; 4.2 469; 473; 480; 484; proposing coding for new law as 4.3 Minnesota Statutes, chapters 144F; 290C; repealing 4.4 Minnesota Statutes 2000, sections 126C.30; 126C.31; 4.5 126C.32; 126C.33; 126C.34; 126C.35; 126C.36; 256.9657, 4.6 subdivision 2; 256B.19, subdivision 1b; 270.31; 4.7 270.32; 270.33; 270.34; 270.35; 270.36; 270.37; 4.8 270.38; 270.39; 272.02, subdivision 22; 273.1382; 4.9 273.37, subdivision 3; 289A.60, subdivision 3; 290.06, 4.10 subdivisions 25, 26; 290.0673; 290.068, subdivision 3; 4.11 290.095, subdivision 7; 290.23; 290.25; 290.31, 4.12 subdivisions 2, 2a, 3, 4, 5, 19; 290.9726, subdivision 4.13 7; 290A.04, subdivision 2j; 296A.16, subdivision 6; 4.14 296A.24, subdivision 3; 297A.61, subdivision 16; 4.15 297A.68, subdivision 21; 297A.71, subdivision 21; 4.16 297B.032; 297E.16, subdivision 3; 297F.21, subdivision 4.17 4; 297G.20, subdivision 5; 373.40, subdivision 7; 4.18 469.177, subdivisions 1a, 11; 469.1771, subdivision 4.19 2b; 473.123, subdivisions 2a, 3, 3a, 3c; 477A.011, 4.20 subdivisions 35, 36, 37; 477A.03, subdivision 4; 4.21 Minnesota Rules, parts 8120.0200; 8120.0500; 4.22 8120.0700; 8120.0900; 8120.1300; 8120.1600; 8120.2000; 4.23 8120.2100; 8120.2200; 8120.2300; 8120.2500; 8120.2700; 4.24 8120.2800; 8120.3000; 8120.3200; 8120.4300; 8120.4400; 4.25 8120.4500; 8120.4600; 8120.4900; 8120.5000; 8120.5100; 4.26 8120.5300. 4.27 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 4.28 ARTICLE 1 4.29 REBATE 4.30 Section 1. Laws 2000, chapter 490, article 1, section 2, 4.31 is amended to read: 4.32 Sec. 2. [SALES TAX REBATE.] 4.33 (a) An individual who: 4.34 (1) was eligible for a credit under Laws 1998, chapter 389, 4.35 article 1, section 1, and who filed for or received that credit 4.36 on or before November 30, 2000; or 4.37 (2) was a resident of Minnesota for any part of 1998, and 4.38 filed a 1998 Minnesota income tax return on or before November 4.39 30, 2000, and had a tax liability before refundable credits on 4.40 that return of at least $1 but did not file the claim for credit 4.41 authorized under Laws 1998, chapter 389, article 1, section 1, 4.42 as amended, and who was not allowed to be claimed as a dependent 4.43 on a 1998 federal income tax return filed by another person; or 4.44 (3) had the property taxes payable on his or her homestead 4.45 abated to zero under Laws 1998, chapter 383, section 20, shall 4.46 receive a sales tax rebate. 4.47 (b) The sales tax rebate for taxpayers who qualify under 4.48 paragraph (a) as married filing joint or head of household must 5.1 be computed according to the following schedule: 5.2 Income Sales Tax Rebate 5.3 less than $2,500 $168 5.4 at least $2,500 but less than $5,000 $217 5.5 at least $5,000 but less than $10,000 $231 5.6 at least $10,000 but less than $15,000 $253 5.7 at least $15,000 but less than $20,000 $275 5.8 at least $20,000 but less than $25,000 $299 5.9 at least $25,000 but less than $30,000 $312 5.10 at least $30,000 but less than $35,000 $338 5.11 at least $35,000 but less than $40,000 $369 5.12 at least $40,000 but less than $45,000 $396 5.13 at least $45,000 but less than $50,000 $417 5.14 at least $50,000 but less than $60,000 $444 5.15 at least $60,000 but less than $70,000 $476 5.16 at least $70,000 but less than $80,000 $523 5.17 at least $80,000 but less than $90,000 $562 5.18 at least $90,000 but less than $100,000 $620 5.19 at least $100,000 but less than $120,000 $671 5.20 at least $120,000 but less than $140,000 $735 5.21 at least $140,000 but less than $160,000 $795 5.22 at least $160,000 but less than $180,000 $851 5.23 at least $180,000 but less than $200,000 $904 5.24 at least $200,000 but less than $400,000 $1,157 5.25 at least $400,000 but less than $600,000 $1,522 5.26 at least $600,000 but less than $800,000 $1,826 5.27 at least $800,000 but less than $1,000,000 $2,093 5.28 $1,000,000 and over $2,400 5.29 (c) The sales tax rebate for individuals who qualify under 5.30 paragraph (a) as single or married filing separately must be 5.31 computed according to the following schedule: 5.32 Income Sales Tax Rebate 5.33 less than $2,500 $95 5.34 at least $2,500 but less than $5,000 $116 5.35 at least $5,000 but less than $10,000 $137 5.36 at least $10,000 but less than $15,000 $184 6.1 at least $15,000 but less than $20,000 $210 6.2 at least $20,000 but less than $25,000 $228 6.3 at least $25,000 but less than $30,000 $238 6.4 at least $30,000 but less than $40,000 $259 6.5 at least $40,000 but less than $50,000 $290 6.6 at least $50,000 but less than $70,000 $342 6.7 at least $70,000 but less than $100,000 $435 6.8 at least $100,000 but less than $140,000 $524 6.9 at least $140,000 but less than $200,000 $632 6.10 at least $200,000 but less than $400,000 $857 6.11 at least $400,000 but less than $600,000 $1,128 6.12 $600,000 and over $1,200 6.13 (d) Individuals who were not residents of Minnesota for any 6.14 part of 1998 and who paid more than $10 in Minnesota sales tax 6.15 on nonbusiness consumer purchases in that year qualify for a 6.16 rebate under this paragraph only. Qualifying nonresidents must 6.17 file a claim for rebate on a form prescribed by the commissioner 6.18 by November 30, 2000. The claim must include receipts showing 6.19 the Minnesota sales tax paid and the date of the sale. Taxes 6.20 paid on purchases allowed in the computation of federal taxable 6.21 income or reimbursed by an employer are not eligible for the 6.22 rebate. The commissioner shall determine the qualifying taxes 6.23 paid and rebate the lesser of: 6.24 (1) 29.7 percent of that amount; or 6.25 (2) the maximum amount for which the claimant would have 6.26 been eligible as determined under paragraph (b) if the taxpayer 6.27 filed the 1998 federal income tax return as a married taxpayer 6.28 filing jointly or head of household, or as determined under 6.29 paragraph (c) for other taxpayers. 6.30 (e) "Income," for purposes of this section other than 6.31 paragraph (d), is taxable income as defined in section 63 of the 6.32 Internal Revenue Code of 1986, as amended through December 31, 6.33 1997, plus the sum of any additions to federal taxable income 6.34 for the taxpayer under Minnesota Statutes, section 290.01, 6.35 subdivision 19a, and reported on the original 1998 income tax 6.36 return, including subsequent adjustments to that return made 7.1 within the time limits specified in paragraph (l). For an 7.2 individual who was a resident of Minnesota for less than the 7.3 entire year, the sales tax rebate equals the sales tax rebate 7.4 calculated under paragraph (b) or (c) multiplied by the 7.5 percentage determined pursuant to Minnesota Statutes, section 7.6 290.06, subdivision 2c, paragraph (e), as calculated on the 7.7 original 1998 income tax return, including subsequent 7.8 adjustments to that return made within the time limits specified 7.9 in paragraph (l). For purposes of paragraph (d), "income" is 7.10 taxable income as defined in section 63 of the Internal Revenue 7.11 Code of 1986, as amended through December 31, 1997, and reported 7.12 on the taxpayer's original federal tax return for the first 7.13 taxable year beginning after December 31, 1997. 7.14 (f) Individuals who were residents of Minnesota for all of 7.15 1998, were not eligible for a rebate under paragraph (a), 7.16 attained the age of 18 on or before December 31, 1998, and 7.17 received in 1998 social security benefits as defined in section 7.18 86(d)(1) of the Internal Revenue Code of 1986, as amended 7.19 through December 31, 1999, are entitled to a rebate of $95. If 7.20 the Social Security Administration or Railroad Retirement Board 7.21 is paying benefits to a recipient by electronic funds transfers 7.22 in 2000, the rebate under this paragraph must be paid by the 7.23 commissioner through electronic funds transfer to the same 7.24 financial institution and into the same account into which the 7.25 Social Security Administration or Railroad Retirement Board 7.26 transfers social security benefits in calendar year 2000. 7.27 (g) An individual who: 7.28 (1) was allowed to be claimed as a dependent on a 1998 7.29 federal income tax return filed by another person; 7.30 (2) would have otherwise been eligible for a rebate under 7.31 clause (a)(2); and 7.32 (3) reported earned income as defined in section 7.33 32(c)(2)(A)(i) of the Internal Revenue Code, 7.34 is eligible for a rebate under this paragraph only. The rebate 7.35 under this paragraph equals 35 percent of the amount allowed 7.36 under the schedule in paragraph (c) based on the individual's 8.1 income. For an individual who was a resident of Minnesota for 8.2 less than the entire year, the sales tax rebate equals the 8.3 rebate calculated under this paragraph multiplied by the 8.4 percentage determined pursuant to Minnesota Statutes, section 8.5 290.06, subdivision 2c, paragraph (e), as calculated on the 8.6 original 1998 income tax return. 8.7 (h) An individual who 8.8 (1) was a resident of Minnesota for any part of 1998; 8.9 (2) was not eligible for a rebate under paragraph (a) or 8.10 (f); 8.11 (3) was not allowed to be claimed as a dependent on a 1998 8.12 federal income tax return by another person; and 8.13 (4) filed a 1998 Minnesota income tax return before 8.14 November 30, 2000, in order to 8.15 (i) claim a credit under section 290.067, 290.0671, or 8.16 290.0674; 8.17 (ii) claim a refund of withheld taxes; or 8.18 (iii) claim a refund of estimated taxes, 8.19 is eligible for a rebate under this paragraph only. For married 8.20 couples filing joint returns and heads of households, the rebate 8.21 equals the minimum amount in paragraph (b). For single filers 8.22 and married individuals filing separate returns, the rebate 8.23 equals the minimum amount in paragraph (c). For an individual 8.24 who was a resident of Minnesota for less than the entire year, 8.25 the sales tax rebate equals the rebate calculated under this 8.26 paragraph multiplied by the percentage determined pursuant to 8.27 Minnesota Statutes, section 290.06, subdivision 2c, paragraph 8.28 (e), as calculated on the original 1998 income tax return. 8.29 (i) For a fiscal year taxpayer, the dates in paragraphs (a) 8.30 through (d) are extended one month for each month in calendar 8.31 year 1998 that occurred prior to the start of the individual's 8.32 1998 fiscal tax year. 8.33 (j) Before payment, the commissioner of revenue shall 8.34 adjust the rebate as follows: the rebates calculated in 8.35 paragraphs (b), (c), (d), (f), (g), and (h) must be 8.36 proportionately reduced to account for (i) rebates under 9.1 paragraphs (g) and (h), and (ii) 1998 income tax returns that 9.2 are filed on or after January 1, 2000, but before June 1, 2000, 9.3 so that the estimated amount of sales tax rebates payable under 9.4 paragraphs (b), (c), (d), (f), (g), and (h) on the date the 9.5 rebate is processed does not exceed $635,600,000. The 9.6 adjustment under this paragraph is not a rule subject to 9.7 Minnesota Statutes, chapter 14. 9.8 (k) The commissioner of revenue may begin making sales tax 9.9 rebates by July 1, 2000. Sales tax rebates not paid by January 9.10 1, 2001, bear interest at the rate specified in Minnesota 9.11 Statutes, section 270.75. Sales tax rebates paid to individuals 9.12 qualifying under paragraph (x) bear interest at the rate 9.13 specified in Minnesota Statutes, section 270.75, beginning April 9.14 1, 2002. 9.15 (l) A sales tax rebate shall not be adjusted based on 9.16 changes to a 1998 income tax return that are made by order of 9.17 assessment after the date the rebate is processed, or made by 9.18 the taxpayer that are filed with the commissioner of revenue 9.19 after that date. 9.20 (m) Individuals who filed a joint income tax return for 9.21 1998 shall receive a joint sales tax rebate. After the sales 9.22 tax rebate has been issued, but before the check has been 9.23 cashed, either joint claimant may request a separate check for 9.24 one-half of the joint sales tax rebate. Notwithstanding 9.25 anything in this section to the contrary, if prior to payment, 9.26 the commissioner has been notified that persons who filed a 9.27 joint 1998 income tax return are living at separate addresses, 9.28 as indicated on their 1999 income tax return or otherwise, the 9.29 commissioner may issue separate checks to each person. The 9.30 amount payable to each person is one-half of the total joint 9.31 rebate. 9.32 (n) If a rebate is received by the estate of a deceased 9.33 individual after the probate estate has been closed, and if the 9.34 original rebate check is returned to the commissioner with a 9.35 copy of the decree of descent or final account of the estate, 9.36 social security numbers, and addresses of the beneficiaries, the 10.1 commissioner may issue separate checks in proportion to their 10.2 share in the residuary estate in the names of the residuary 10.3 beneficiaries of the estate. 10.4 (o) The sales tax rebate is a "Minnesota tax law" for 10.5 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 10.6 (p) The sales tax rebate is "an overpayment of any tax 10.7 collected by the commissioner" for purposes of Minnesota 10.8 Statutes, section 270.07, subdivision 5. For purposes of this 10.9 paragraph, a joint sales tax rebate is payable to each spouse 10.10 equally. 10.11 (q) If the commissioner of revenue cannot locate an 10.12 individual entitled to a sales tax rebate by July 1, 2002, or if 10.13 an individual to whom a sales tax rebate was issued has not 10.14 cashed the check by July 1, 2002, the right to the sales tax 10.15 rebate lapses and the check must be deposited in the general 10.16 fund. 10.17 (r) Individuals entitled to a sales tax rebate pursuant to 10.18 paragraph (a), (f), (g), or (h) but who did not receive one, and 10.19 individuals who receive a sales tax rebate that was not 10.20 correctly computed, must file a claim with the commissioner 10.21 before July 1, 2001, in a form prescribed by the commissioner. 10.22 These claims must be treated as if they are a claim for refund 10.23 under Minnesota Statutes, section 289A.50, subdivisions 4 and 7. 10.24 (s) The sales tax rebate is a refund subject to revenue 10.25 recapture under Minnesota Statutes, chapter 270A. The 10.26 commissioner of revenue shall remit the entire refund to the 10.27 claimant agency, which shall, upon the request of the spouse who 10.28 does not owe the debt, refund one-half of the joint sales tax 10.29 rebate to the spouse who does not owe the debt. 10.30 (t) The rebate is a reduction of fiscal year 2000 sales tax 10.31 revenues. The amount necessary to make the sales tax rebates 10.32 and interest provided in this section is appropriated from the 10.33 general fund to the commissioner of revenue in fiscal year 2000 10.34 and is available until June 30, 2002. 10.35 (u) If a sales tax rebate check is cashed by someone other 10.36 than the payee or payees of the check, and the commissioner of 11.1 revenue determines that the check has been forged or improperly 11.2 endorsed or the commissioner determines that a rebate was 11.3 overstated or erroneously issued, the commissioner may issue an 11.4 order of assessment for the amount of the check or the amount 11.5 the check is overstated against the person or persons cashing 11.6 it. The assessment must be made within two years after the 11.7 check is cashed, but if cashing the check constitutes theft 11.8 under Minnesota Statutes, section 609.52, or forgery under 11.9 Minnesota Statutes, section 609.631, the assessment can be made 11.10 at any time. The assessment may be appealed administratively 11.11 and judicially. The commissioner may take action to collect the 11.12 assessment in the same manner as provided by Minnesota Statutes, 11.13 chapter 289A, for any other order of the commissioner assessing 11.14 tax. 11.15 (v) Notwithstanding Minnesota Statutes, sections 9.031, 11.16 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 11.17 commissioner of revenue may take whatever actions the 11.18 commissioner deems necessary to pay the rebates required by this 11.19 section, and may, in consultation with the commissioner of 11.20 finance and the state treasurer, contract with a private vendor 11.21 or vendors to process, print, and mail the rebate checks or 11.22 warrants required under this section and receive and disburse 11.23 state funds to pay those checks or warrants. 11.24 (w) The commissioner may pay rebates required by this 11.25 section by electronic funds transfer to individuals who 11.26 requested that their 1999 individual income tax refund be paid 11.27 through electronic funds transfer. The commissioner may make 11.28 the electronic funds transfer payments to the same financial 11.29 institution and into the same account as the 1999 individual 11.30 income tax refund. 11.31 (x) An individual who: 11.32 (1) was a resident of Minnesota for any part of 1998; 11.33 (2) filed a 1998 federal income tax return on or before 11.34 November 30, 2000; 11.35 (3) had a federal tax liability before refundable credits 11.36 on that return of at least $1; and 12.1 (4) does not qualify for a rebate under paragraph (a), (f), 12.2 (g), or (h), 12.3 is eligible for a rebate under this paragraph only. 12.4 Qualifying individuals must file a claim for rebate on a form 12.5 prescribed by the commissioner by December 31, 2001. The claim 12.6 must include a copy of the individual's 1998 federal income tax 12.7 return and a copy of the individual's 1998 Minnesota income tax 12.8 return. An individual who was allowed to be claimed as a 12.9 dependent on a 1998 federal income tax return filed by another 12.10 person is eligible for a rebate under this paragraph only if the 12.11 individual had in 1998 earned income as defined in section 12.12 32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a 12.13 dependent eligible for a rebate under this paragraph equals 35 12.14 percent of the amount allowed under the schedule in paragraph 12.15 (c) based on the individual's income. For all other individuals 12.16 who qualify under this paragraph, the rebate equals the amount 12.17 allowed based on the individual's income under the schedule in 12.18 paragraph (b) for married couples filing joint returns and heads 12.19 of household and the amount allowed based on the individual's 12.20 income under the schedule in paragraph (c) for single filers and 12.21 heads of household, provided, however, that any rebate payable 12.22 under this paragraph to an individual who was a part-year 12.23 resident of Minnesota in 1998 must be prorated according to the 12.24 formula applicable to part-year residents in paragraph (e). 12.25 The limitation on the total amount of rebates in Laws 2000, 12.26 chapter 490, article 1, section 2, paragraph (j), does not apply 12.27 to rebates issued under this paragraph. To the extent 12.28 applicable, all other provisions of Laws 2000, chapter 490, 12.29 article 1, section 2, apply to the rebates paid under this 12.30 paragraph, including the adjustments made under section 2, 12.31 paragraph (j). 12.32[EFFECTIVE DATE.] This section is effective the day 12.33 following final enactment. 12.34 Sec. 2. [STATEMENT OF PURPOSE.] 12.35 (a) The state of Minnesota derives revenues from a variety 12.36 of taxes, fees, and other sources, including the state sales tax. 13.1 (b) It is fair and reasonable to refund the existing state 13.2 budget surplus in the form of a rebate of nonbusiness consumer 13.3 sales taxes paid by individuals in calendar year 1999. 13.4 (c) Information concerning the amount of sales tax paid at 13.5 various income levels is contained in the Minnesota tax 13.6 incidence report, which is written by the commissioner of 13.7 revenue and presented to the legislature according to Minnesota 13.8 Statutes, section 270.0682. 13.9 (d) It is fair and reasonable to use information contained 13.10 in the Minnesota tax incidence report to determine the 13.11 proportionate share of the sales tax rebate due each eligible 13.12 taxpayer since no effective or practical mechanism exists for 13.13 determining the amount of actual sales tax paid by each eligible 13.14 individual. 13.15 Sec. 3. [SALES TAX REBATE.] 13.16 Subdivision 1. [ELIGIBILITY; REBATE BASED ON INCOME.] An 13.17 individual who was a resident of Minnesota for any part of 1999, 13.18 and filed a 1999 Minnesota income tax return on or before 13.19 November 30, 2001, and had a tax liability before refundable 13.20 credits on that return of at least $1 and who was not allowed to 13.21 be claimed as a dependent on a 1999 federal income tax return 13.22 filed by another person is eligible for a sales tax rebate based 13.23 on income under either subdivision 2 or 3. 13.24 Subd. 2. [MARRIED JOINT AND HEAD OF HOUSEHOLD FILERS.] The 13.25 sales tax rebate for taxpayers who qualify under subdivision 1 13.26 and are married filing joint or head of household filers is 13.27 computed according to the following schedule: 13.28 Income Sales Tax Rebate 13.29 less than $2,500 $116 13.30 at least $2,500 but less than $5,000 $145 13.31 at least $5,000 but less than $10,000 $152 13.32 at least $10,000 but less than $15,000 $167 13.33 at least $15,000 but less than $20,000 $189 13.34 at least $20,000 but less than $25,000 $205 13.35 at least $25,000 but less than $30,000 $218 13.36 at least $30,000 but less than $35,000 $237 14.1 at least $35,000 but less than $40,000 $258 14.2 at least $40,000 but less than $45,000 $280 14.3 at least $45,000 but less than $50,000 $298 14.4 at least $50,000 but less than $60,000 $305 14.5 at least $60,000 but less than $70,000 $318 14.6 at least $70,000 but less than $80,000 $346 14.7 at least $80,000 but less than $90,000 $374 14.8 at least $90,000 but less than $100,000 $405 14.9 at least $100,000 but less than $120,000 $439 14.10 at least $120,000 but less than $140,000 $480 14.11 at least $140,000 but less than $160,000 $519 14.12 at least $160,000 but less than $180,000 $556 14.13 at least $180,000 but less than $200,000 $591 14.14 at least $200,000 but less than $400,000 $756 14.15 at least $400,000 but less than $600,000 $994 14.16 at least $600,000 but less than $800,000 $1,193 14.17 at least $800,000 but less than $1,000,000 $1,368 14.18 $1,000,000 and over $1,600 14.19 Subd. 3. [SINGLE AND MARRIED SEPARATE FILERS.] The sales 14.20 tax rebate for individuals who qualify under subdivision 1 as 14.21 single or married filing separately must be computed according 14.22 to the following schedule: 14.23 Income Sales Tax Rebate 14.24 less than $2,500 $59 14.25 at least $2,500 but less than $5,000 $62 14.26 at least $5,000 but less than $10,000 $82 14.27 at least $10,000 but less than $15,000 $98 14.28 at least $15,000 but less than $20,000 $113 14.29 at least $20,000 but less than $25,000 $127 14.30 at least $25,000 but less than $30,000 $152 14.31 at least $30,000 but less than $40,000 $165 14.32 at least $40,000 but less than $50,000 $182 14.33 at least $50,000 but less than $70,000 $233 14.34 at least $70,000 but less than $100,000 $322 14.35 at least $100,000 but less than $140,000 $388 14.36 at least $140,000 but less than $200,000 $469 15.1 at least $200,000 but less than $400,000 $636 15.2 $400,000 and over $800 15.3 Subd. 4. [NONRESIDENTS.] Individuals who were not 15.4 residents of Minnesota for any part of 1999 and who paid more 15.5 than $10 in Minnesota sales tax under Minnesota Statutes, 15.6 chapter 297A, on nonbusiness consumer purchases in that year 15.7 qualify for a rebate under this subdivision only. Qualifying 15.8 nonresidents must file a claim for rebate on a form prescribed 15.9 by the commissioner by November 30, 2001. The claim must 15.10 include receipts showing the Minnesota sales tax paid and the 15.11 date of the sale. Taxes paid on purchases allowed in the 15.12 computation of federal taxable income or reimbursed by an 15.13 employer are not eligible for the rebate. The commissioner 15.14 shall determine the qualifying taxes paid and rebate the lesser 15.15 of: 15.16 (1) 20.24 percent of that amount; or 15.17 (2) the maximum amount for which the claimant would have 15.18 been eligible as determined under subdivision 2 if the taxpayer 15.19 filed the 1999 federal income tax return as a married taxpayer 15.20 filing jointly or head of household, or as determined under 15.21 subdivision 3 for other taxpayers. 15.22 Subd. 5. [DEFINITION OF INCOME.] "Income," for purposes of 15.23 this section other than subdivision 4, is taxable income as 15.24 defined in section 63 of the Internal Revenue Code of 1986, as 15.25 amended through December 31, 1998, plus the sum of any additions 15.26 to federal taxable income for the taxpayer under Minnesota 15.27 Statutes, section 290.01, subdivision 19a, and reported on the 15.28 original 1999 income tax return, including subsequent 15.29 adjustments to that return made within the time limits specified 15.30 in subdivision 12. For an individual who was a resident of 15.31 Minnesota for less than the entire year, the sales tax rebate 15.32 equals the sales tax rebate calculated under subdivision 2 or 3 15.33 multiplied by the percentage determined pursuant to Minnesota 15.34 Statutes, section 290.06, subdivision 2c, paragraph (e), as 15.35 calculated on the original 1999 income tax return, including 15.36 subsequent adjustments to that return made within the time 16.1 limits specified in subdivision 12. For purposes of subdivision 16.2 4, "income" is taxable income as defined in section 63 of the 16.3 Internal Revenue Code of 1986, as amended through December 31, 16.4 1998, and reported on the taxpayer's original federal tax return 16.5 for the first taxable year beginning after December 31, 1998. 16.6 Subd. 6. [SOCIAL SECURITY AND PUBLIC PENSION 16.7 RECIPIENTS.] (a) An individual qualifies for a rebate of $59 16.8 under this subdivision if the individual: 16.9 (1) was a resident of Minnesota for all of calendar year 16.10 1999; 16.11 (2) is not eligible for a rebate under subdivision 7; 16.12 (3) attained the age of 18 on or before December 31, 1999; 16.13 and 16.14 (4)(i) received social security benefits as defined in 16.15 section 86(d)(1) of the Internal Revenue Code of 1986, as 16.16 amended through December 31, 2000, in calendar year 1999; or 16.17 (ii) received federal, state or local public pension or 16.18 disability benefits in calendar year 1999. 16.19 (b) An individual or married couple who qualifies for a 16.20 rebate under both this subdivision and subdivision 1 is eligible 16.21 for the rebate under whichever subdivision provides a larger 16.22 amount. 16.23 (c) If the Social Security Administration, Railroad 16.24 Retirement Board, or the administrator of a public pension is 16.25 paying benefits to a recipient by electronic funds transfers in 16.26 calendar year 2001, the commissioner may pay the rebate under 16.27 this subdivision through electronic funds transfer to the same 16.28 financial institution and into the same account into which those 16.29 benefits are transferred in calendar year 2001. 16.30 (d) For purposes of this subdivision, "public pension plan 16.31 administrator" means (1) a state and local public pension 16.32 administrator, (2) the federal Civil Service Retirement System, 16.33 (3) the United States Department of Defense for the military 16.34 retirement and survivors benefit programs, and (4) the Federal 16.35 Employees Retirement System. 16.36 (e) A state and local public pension administrator is an 17.1 entity paying benefits under a pension plan enumerated in 17.2 Minnesota Statutes, section 356.20, subdivision 2. Each state 17.3 and local pension administrator shall provide to the 17.4 commissioner of revenue, in a form the commissioner prescribes, 17.5 a list of individuals to whom it pays benefits that meet the 17.6 requirements of paragraph (a), clauses (1) and (3). 17.7 Subd. 7. [DEPENDENTS.] An individual who: 17.8 (1) was allowed to be claimed as a dependent on a 1999 17.9 federal income tax return filed by another person; 17.10 (2) would have otherwise been eligible for a rebate under 17.11 subdivision 1; and 17.12 (3) reported earned income as defined in section 17.13 32(c)(2)(A)(i) of the Internal Revenue Code, 17.14 is eligible for a rebate under this subdivision only. The 17.15 rebate under this subdivision equals 35 percent of the amount 17.16 allowed under the schedule in subdivision 3 based on the 17.17 individual's income. For an individual who was a resident of 17.18 Minnesota for less than the entire year, the sales tax rebate 17.19 equals the rebate calculated under this subdivision multiplied 17.20 by the percentage determined pursuant to Minnesota Statutes, 17.21 section 290.06, subdivision 2c, paragraph (e), as calculated on 17.22 the original 1999 income tax return. 17.23 Subd. 8. [CREDIT RECIPIENTS.] An individual who 17.24 (1) was a resident of Minnesota for any part of 1999; 17.25 (2) was not eligible for a rebate under subdivision 1, 6, 17.26 or 7; 17.27 (3) was not allowed to be claimed as a dependent on a 1999 17.28 federal income tax return by another person; and 17.29 (4)(i) claimed a refund under Minnesota Statutes, chapter 17.30 290A, for property taxes paid in 2000 or rent constituting 17.31 property taxes paid in 1999; or 17.32 (ii) filed a 1999 Minnesota income tax return before 17.33 November 30, 2001, in order to 17.34 (A) claim a credit under section 290.067, 290.0671, or 17.35 290.0674; 17.36 (B) claim a refund of withheld taxes; or 18.1 (C) claim a refund of estimated taxes, 18.2 is eligible for a rebate under this subdivision only. For 18.3 married couples filing joint returns and heads of households, 18.4 the rebate equals the minimum amount in subdivision 2. For 18.5 single filers and married individuals filing separate returns 18.6 and for rebates based on refunds under Minnesota Statutes, 18.7 chapter 290A, the rebate equals the minimum amount in 18.8 subdivision 3. For an individual who was a resident of 18.9 Minnesota for less than the entire year, the sales tax rebate 18.10 equals the rebate calculated under this subdivision multiplied 18.11 by the percentage determined under Minnesota Statutes, section 18.12 290.06, subdivision 2c, paragraph (e), as calculated on the 18.13 original 1999 income tax return. 18.14 Subd. 9. [CLAIMS BASED ON FEDERAL LIABILITIES.] An 18.15 individual who: 18.16 (1) was a resident of Minnesota for any part of 1999; 18.17 (2) filed a 1999 federal income tax return on or before 18.18 November 30, 2001; 18.19 (3) had a federal tax liability before refundable credits 18.20 on that return of at least $1; and 18.21 (4) does not qualify for a rebate under subdivision 1, 6, 18.22 7, or 8, 18.23 is eligible for a rebate under this paragraph only. 18.24 Qualifying individuals must file a claim for rebate on a form 18.25 prescribed by the commissioner by December 31, 2001. The claim 18.26 must include a copy of the individual's 1999 federal income tax 18.27 return and a copy of the individual's 1999 Minnesota income tax 18.28 return. An individual who was allowed to be claimed as a 18.29 dependent on a 1999 federal income tax return filed by another 18.30 person is eligible for a rebate under this paragraph only if the 18.31 individual had in 1999 earned income as defined in section 18.32 32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a 18.33 dependent eligible for a rebate under this paragraph equals 35 18.34 percent of the amount allowed under the schedule in subdivision 18.35 3 based on the individual's income. For all other individuals 18.36 who qualify under this paragraph, the rebate equals the amount 19.1 allowed based on the individual's income under the schedule in 19.2 subdivision 2 for married couples filing joint returns and heads 19.3 of household and the amount allowed based on the individual's 19.4 income under the schedule in subdivision 3 for single filers and 19.5 heads of household, provided, however, that any rebate payable 19.6 under this paragraph to an individual who was a part-year 19.7 resident of Minnesota in 1998 must be prorated according to the 19.8 formula applicable to part-year residents in subdivision 5. 19.9 Subd. 10. [FISCAL YEAR TAXPAYERS.] For a fiscal year 19.10 taxpayer, the dates in subdivisions 1 through 4 are extended one 19.11 month for each month in calendar year 1999 that occurred prior 19.12 to the start of the individual's 1999 fiscal tax year. 19.13 Subd. 11. [PAYMENT DATES; INTEREST.] The commissioner of 19.14 revenue may begin paying sales tax rebates by July 1, 2001. 19.15 Sales tax rebates not paid by January 1, 2002, bear interest at 19.16 the rate specified in Minnesota Statutes, section 270.75. 19.17 Subd. 12. [NO ADJUSTMENTS AFTER PROCESSING.] A sales tax 19.18 rebate may not be adjusted based on changes to a 1999 income tax 19.19 return that are made by order of assessment after the date the 19.20 rebate is processed, or made by the taxpayer that are filed with 19.21 the commissioner of revenue after that date. 19.22 Subd. 13. [JOINT REBATE RULES.] Individuals who filed a 19.23 joint income tax return for 1999 must receive a joint sales tax 19.24 rebate. After the sales tax rebate has been issued, but before 19.25 the check has been cashed, either joint claimant may request a 19.26 separate check for one-half of the joint sales tax rebate. 19.27 Notwithstanding anything in this section to the contrary, if 19.28 prior to payment, the commissioner has been notified that 19.29 persons who filed a joint 1999 income tax return are living at 19.30 separate addresses, as indicated on their 2000 income tax return 19.31 or otherwise, the commissioner may issue separate checks to each 19.32 person. The amount payable to each person is one-half of the 19.33 total joint rebate. 19.34 Subd. 14. [DECEASED INDIVIDUALS.] If a rebate is received 19.35 by the estate of a deceased individual after the probate estate 19.36 has been closed, and if the original rebate check is returned to 20.1 the commissioner with a copy of the decree of descent or final 20.2 account of the estate, social security numbers, and addresses of 20.3 the beneficiaries, the commissioner may issue separate checks in 20.4 proportion to their share in the residuary estate in the names 20.5 of the residuary beneficiaries of the estate. 20.6 Subd. 15. [APPLICATION OF OTHER LAW.] (a) The sales tax 20.7 rebate is a "Minnesota tax law" for purposes of Minnesota 20.8 Statutes, section 270B.01, subdivision 8. 20.9 (b) The sales tax rebate is "an overpayment of any tax 20.10 collected by the commissioner" for purposes of Minnesota 20.11 Statutes, section 270.07, subdivision 5. For purposes of this 20.12 subdivision, a joint sales tax rebate is payable to each spouse 20.13 equally. 20.14 (c) The sales tax rebate is a refund subject to revenue 20.15 recapture under Minnesota Statutes, chapter 270A. The 20.16 commissioner of revenue shall remit the entire refund to the 20.17 claimant agency, which shall, upon the request of the spouse who 20.18 does not owe the debt, refund one-half of the joint sales tax 20.19 rebate to the spouse who does not owe the debt. 20.20 Subd. 16. [LAPSE OF ENTITLEMENT.] If the commissioner of 20.21 revenue cannot locate an individual entitled to a sales tax 20.22 rebate by July 1, 2003, or if an individual to whom a sales tax 20.23 rebate was issued has not cashed the check by July 1, 2003, the 20.24 right to the sales tax rebate lapses and the check must be 20.25 deposited in the general fund. 20.26 Subd. 17. [CLAIMS FOR UNPAID REBATES.] Individuals 20.27 entitled to a sales tax rebate pursuant to subdivision 1, 6, 7, 20.28 8, or 9 but who did not receive one, and individuals who receive 20.29 a sales tax rebate that was not correctly computed, must file a 20.30 claim with the commissioner before July 1, 2002, in a form 20.31 prescribed by the commissioner. These claims must be treated as 20.32 if they are a claim for refund under Minnesota Statutes, section 20.33 289A.50, subdivisions 4 and 7. 20.34 Subd. 18. [APPROPRIATION.] The rebate is a reduction of 20.35 fiscal year 2001 sales tax revenues. The amount necessary to 20.36 make the sales tax rebates and interest provided in this section 21.1 is appropriated from the general fund to the commissioner of 21.2 revenue in fiscal year 2001 and is available until June 30, 2003. 21.3 Subd. 19. [ILLEGALLY CASHED CHECKS.] If a sales tax rebate 21.4 check is cashed by someone other than the payee or payees of the 21.5 check, and the commissioner of revenue determines that the check 21.6 has been forged or improperly endorsed or the commissioner 21.7 determines that a rebate was overstated or erroneously issued, 21.8 the commissioner may issue an order of assessment for the amount 21.9 of the check or the amount the check is overstated against the 21.10 person or persons cashing it. The assessment must be made 21.11 within two years after the check is cashed, but if cashing the 21.12 check constitutes theft under Minnesota Statutes, section 21.13 609.52, or forgery under Minnesota Statutes, section 609.631, 21.14 the assessment can be made at any time. The assessment may be 21.15 appealed administratively and judicially. The commissioner may 21.16 take action to collect the assessment in the same manner as 21.17 provided by Minnesota Statutes, chapter 289A, for any other 21.18 order of the commissioner assessing tax. 21.19 Subd. 20. [AUTHORITY TO CONTRACT WITH VENDOR.] 21.20 Notwithstanding Minnesota Statutes, sections 9.031, 16A.40, 21.21 16B.49, 16B.50, and any other law to the contrary, the 21.22 commissioner of revenue may take whatever actions the 21.23 commissioner deems necessary to pay the rebates required by this 21.24 section, and may, in consultation with the commissioner of 21.25 finance and the state treasurer, contract with a private vendor 21.26 or vendors to process, print, and mail the rebate checks or 21.27 warrants required under this section and receive and disburse 21.28 state funds to pay those checks or warrants. 21.29 Subd. 21. [ELECTRONIC PAYMENT.] The commissioner may pay 21.30 rebates required by this section by electronic funds transfer to 21.31 individuals who requested that their 2000 individual income tax 21.32 refund be paid through electronic funds transfer. The 21.33 commissioner may make the electronic funds transfer payments to 21.34 the same financial institution and into the same account as the 21.35 2000 individual income tax refund. 21.36 Subd. 22. [ADJUSTMENTS.] Before payment, the commissioner 22.1 of revenue shall adjust the rebate as follows: 22.2 the rebates calculated in subdivisions 2, 3, 4, 6, 7, and 8 22.3 must be proportionately reduced to account for (i) rebates under 22.4 subdivisions 7 and 8, and (ii) 1999 income tax returns that are 22.5 filed on or after January 1, 2001, but before April 1, 2001, so 22.6 that the estimated amount of sales tax rebates payable under 22.7 subdivisions 2, 3, 4, 6, 7, 8, and 9 on the date the rebate is 22.8 processed does not exceed $425,000,000. The adjustment under 22.9 this subdivision is not a rule subject to Minnesota Statutes, 22.10 chapter 14. 22.11 Sec. 4. [APPROPRIATIONS.] 22.12 (a) $500,000 in fiscal year 2001 and $1,231,600 in fiscal 22.13 year 2002 are appropriated from the general fund to the 22.14 commissioner of revenue to administer the sales tax rebates in 22.15 section 3. Any unencumbered balance remaining on June 30, 2001, 22.16 does not cancel but is available for expenditure by the 22.17 commissioner of revenue until June 30, 2002. Notwithstanding 22.18 Minnesota Statutes, section 16A.285, the commissioner of revenue 22.19 may not use this appropriation for any purpose other than 22.20 administering the sales tax rebates. This is a one-time 22.21 appropriation and may not be added to the agency's budget base. 22.22 (b) $410,000 is appropriated from the general fund to the 22.23 state treasurer to pay the cost of clearing sales tax rebate 22.24 checks through commercial banks. 22.25 (c) The amount necessary to pay the rebates under section 1 22.26 is appropriated from the general fund to the commissioner of 22.27 revenue for fiscal years 2001 and 2002. 22.28[EFFECTIVE DATE.] This section is effective the day 22.29 following final enactment. 22.30 ARTICLE 2 22.31 PROPERTY TAX REFORM 22.32 Section 1. Minnesota Statutes 2000, section 126C.13, 22.33 subdivision 1, is amended to read: 22.34 Subdivision 1. [GENERAL EDUCATION TAX RATE.] The 22.35 commissioner must establish the general education tax rate by 22.36 July 1 of each year for levies payable in the following year. 23.1 The general education tax capacity rate must be a rate, rounded 23.2 up to the nearest hundredth of a percent, that, when applied to 23.3 the adjusted net tax capacity for all districts, raises the 23.4 amount specified in this subdivision. The general education tax 23.5 rate must be the rate that raises$1,330,000,000$1,230,000,000 23.6 for fiscal year20012003, and later fiscal years. The general 23.7 education tax rate may not be changed due to changes or 23.8 corrections made to a district's adjusted net tax capacity after 23.9 the tax rate has been established. 23.10 Sec. 2. Minnesota Statutes 2000, section 126C.17, 23.11 subdivision 2, is amended to read: 23.12 Subd. 2. [REFERENDUM ALLOWANCE LIMIT.] Notwithstanding 23.13 subdivision 1, a district's referendum allowance must not exceed 23.14 the greater of: 23.15 (1) the district's referendum allowance for fiscal year 23.16 1994 times 1.056; 23.17 (2) 25 percent of the formula allowance; or 23.18 (3) for a newly reorganized district created after July 1, 23.19 1994, the sum of the referendum revenue authority for the 23.20 reorganizing districts for the fiscal year preceding the 23.21 reorganization, divided by the sum of the resident marginal cost 23.22 pupil units of the reorganizing districts for the fiscal year 23.23 preceding the reorganization. 23.24[EFFECTIVE DATE.] This section is effective for revenue for 23.25 fiscal year 2003. 23.26 Sec. 3. Minnesota Statutes 2000, section 126C.17, is 23.27 amended by adding a subdivision to read: 23.28 Subd. 7a. [REFERENDUM TAX BASE REPLACEMENT AID.] For 23.29 fiscal year 2003 and thereafter, each school district that has a 23.30 referendum allowance under subdivision 1 in excess of $150 is 23.31 eligible for referendum tax base replacement aid. The aid for 23.32 each eligible district is equal to the rate determined by 23.33 dividing the amount of the referendum levy which exceeds $150 23.34 times the district's resident marginal cost pupil units by the 23.35 district's referendum market value multiplied by the district's 23.36 market value of class 3 property. The referendum tax base 24.1 replacement aid for each eligible district must be used to 24.2 reduce the district's referendum levy and must be paid to the 24.3 district each year that the referendum authority remains in 24.4 effect. 24.5 The commissioner of revenue, in consultation with the 24.6 commissioner of children, families, and learning, shall certify 24.7 the tax rate determined under this subdivision to the county 24.8 auditor of each county in which a school district has a rate 24.9 determined to be greater than zero. 24.10 Sec. 4. Minnesota Statutes 2000, section 273.11, 24.11 subdivision 1a, is amended to read: 24.12 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 24.13 property classified as agricultural homestead or nonhomestead, 24.14 residential homestead or nonhomestead, or noncommercial seasonal 24.15 recreational residential, the assessor shall compare the value 24.16 withthatthe taxable portion of the value determined in the 24.17 preceding assessment.The amount of the increase entered in the24.18current assessment shall not exceed the greater of (1) 8.524.19percent of the value in the preceding assessment, or (2) 1524.20percent of the difference between the current assessment and the24.21preceding assessment.24.22 For assessment year 2002, the amount of the increase shall 24.23 not exceed the greater of (1) 12 percent of the value in the 24.24 preceding assessment, or (2) 20 percent of the difference 24.25 between the current assessment and the preceding assessment. 24.26 For assessment year 2003, the amount of the increase shall 24.27 not exceed the greater of (1) 12 percent of the value in the 24.28 preceding assessment, or (2) 25 percent of the difference 24.29 between the current assessment and the preceding assessment. 24.30 For assessment year 2004, the amount of the increase shall 24.31 not exceed the greater of (1) 12 percent of the value in the 24.32 preceding assessment, or (2) 33 percent of the difference 24.33 between the current assessment and the preceding assessment. 24.34 For assessment year 2005, the amount of the increase shall 24.35 not exceed the greater of (1) 12 percent of the value in the 24.36 preceding assessment, or (2) 50 percent of the difference 25.1 between the current assessment and the preceding assessment. 25.2 This limitation shall not apply to increases in value due 25.3 to improvements. For purposes of this subdivision, the term 25.4 "assessment" means the value prior to any exclusion under 25.5 subdivision 16. 25.6 The provisions of this subdivision shall be in effectonly25.7 through assessment year20012005 as provided in this 25.8 subdivision. 25.9 For purposes of the assessment/sales ratio study conducted 25.10 under section 127A.48, and the computation of state aids paid 25.11 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 25.12 477A, market values and net tax capacities determined under this 25.13 subdivision and subdivision 16, shall be used. 25.14[EFFECTIVE DATE.] This section is effective the day 25.15 following final enactment. 25.16 Sec. 5. Minnesota Statutes 2000, section 273.13, 25.17 subdivision 22, is amended to read: 25.18 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 25.19 23, real estate which is residential and used for homestead 25.20 purposes is class 1. The market value of class 1a property must 25.21 be determined based upon the value of the house, garage, and 25.22 land. 25.23 The first$76,000$200,000 of market value of class 1a 25.24 property has a net class rate of one percent of its market 25.25 value; and the market value of class 1a property that 25.26 exceeds$76,000$200,000 has a class rate of1.651.5 percent of 25.27 its market value. 25.28 (b) Class 1b property includes homestead real estate or 25.29 homestead manufactured homes used for the purposes of a 25.30 homestead by 25.31 (1) any blind person, or the blind person and the blind 25.32 person's spouse; or 25.33 (2) any person, hereinafter referred to as "veteran," who: 25.34 (i) served in the active military or naval service of the 25.35 United States; and 25.36 (ii) is entitled to compensation under the laws and 26.1 regulations of the United States for permanent and total 26.2 service-connected disability due to the loss, or loss of use, by 26.3 reason of amputation, ankylosis, progressive muscular 26.4 dystrophies, or paralysis, of both lower extremities, such as to 26.5 preclude motion without the aid of braces, crutches, canes, or a 26.6 wheelchair; and 26.7 (iii) has acquired a special housing unit with special 26.8 fixtures or movable facilities made necessary by the nature of 26.9 the veteran's disability, or the surviving spouse of the 26.10 deceased veteran for as long as the surviving spouse retains the 26.11 special housing unit as a homestead; or 26.12 (3) any person who: 26.13 (i) is permanently and totally disabled and 26.14 (ii) receives 90 percent or more of total household income, 26.15 as defined in section 290A.03, subdivision 5, from 26.16 (A) aid from any state as a result of that disability; or 26.17 (B) supplemental security income for the disabled; or 26.18 (C) workers' compensation based on a finding of total and 26.19 permanent disability; or 26.20 (D) social security disability, including the amount of a 26.21 disability insurance benefit which is converted to an old age 26.22 insurance benefit and any subsequent cost of living increases; 26.23 or 26.24 (E) aid under the federal Railroad Retirement Act of 1937, 26.25 United States Code Annotated, title 45, section 228b(a)5; or 26.26 (F) a pension from any local government retirement fund 26.27 located in the state of Minnesota as a result of that 26.28 disability; or 26.29 (G) pension, annuity, or other income paid as a result of 26.30 that disability from a private pension or disability plan, 26.31 including employer, employee, union, and insurance plans and 26.32 (iii) has household income as defined in section 290A.03, 26.33 subdivision 5, of $50,000 or less; or 26.34 (4) any person who is permanently and totally disabled and 26.35 whose household income as defined in section 290A.03, 26.36 subdivision 5, is 275 percent or less of the federal poverty 27.1 level. 27.2 Property is classified and assessed under clause (4) only 27.3 if the government agency or income-providing source certifies, 27.4 upon the request of the homestead occupant, that the homestead 27.5 occupant satisfies the disability requirements of this paragraph. 27.6 Property is classified and assessed pursuant to clause (1) 27.7 only if the commissioner of economic security certifies to the 27.8 assessor that the homestead occupant satisfies the requirements 27.9 of this paragraph. 27.10 Permanently and totally disabled for the purpose of this 27.11 subdivision means a condition which is permanent in nature and 27.12 totally incapacitates the person from working at an occupation 27.13 which brings the person an income. The first $32,000 market 27.14 value of class 1b property has a net class rate of .45 percent 27.15 of its market value. The remaining market value of class 1b 27.16 property has a net class rate using the rates for class 1 or 27.17 class 2a property, whichever is appropriate, of similar market 27.18 value. 27.19 (c) Class 1c property is commercial use real property that 27.20 abuts a lakeshore line and is devoted to temporary and seasonal 27.21 residential occupancy for recreational purposes but not devoted 27.22 to commercial purposes for more than 250 days in the year 27.23 preceding the year of assessment, and that includes a portion 27.24 used as a homestead by the owner, which includes a dwelling 27.25 occupied as a homestead by a shareholder of a corporation that 27.26 owns the resort or a partner in a partnership that owns the 27.27 resort, even if the title to the homestead is held by the 27.28 corporation or partnership. For purposes of this clause, 27.29 property is devoted to a commercial purpose on a specific day if 27.30 any portion of the property, excluding the portion used 27.31 exclusively as a homestead, is used for residential occupancy 27.32 and a fee is charged for residential occupancy. Class 1c 27.33 property has a class rate ofone0.8 percent of total market 27.34 value with the following limitation: the area of the property 27.35 must not exceed 100 feet of lakeshore footage for each cabin or 27.36 campsite located on the property up to a total of 800 feet and 28.1 500 feet in depth, measured away from the lakeshore. If any 28.2 portion of the class 1c resort property is classified as class 28.3 4c under subdivision 25, the entire property must meet the 28.4 requirements of subdivision 25, paragraph (d), clause (1), to 28.5 qualify for class 1c treatment under this paragraph. 28.6 (d) Class 1d property includes structures that meet all of 28.7 the following criteria: 28.8 (1) the structure is located on property that is classified 28.9 as agricultural property under section 273.13, subdivision 23; 28.10 (2) the structure is occupied exclusively by seasonal farm 28.11 workers during the time when they work on that farm, and the 28.12 occupants are not charged rent for the privilege of occupying 28.13 the property, provided that use of the structure for storage of 28.14 farm equipment and produce does not disqualify the property from 28.15 classification under this paragraph; 28.16 (3) the structure meets all applicable health and safety 28.17 requirements for the appropriate season; and 28.18 (4) the structure is not salable as residential property 28.19 because it does not comply with local ordinances relating to 28.20 location in relation to streets or roads. 28.21 The market value of class 1d property has the same class 28.22 rates as class 1a property under paragraph (a). 28.23[EFFECTIVE DATE.] This section is effective for taxes 28.24 payable in 2002 and thereafter. 28.25 Sec. 6. Minnesota Statutes 2000, section 273.13, 28.26 subdivision 23, is amended to read: 28.27 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 28.28 land including any improvements that is homesteaded. The market 28.29 value of the house and garage and immediately surrounding one 28.30 acre of land has the same class rates as class 1a property under 28.31 subdivision 22. The value of the remaining land including 28.32 improvements up to $115,000 has a net class rate of 0.35 percent 28.33 of market value. The value of class 2a property over $115,000 28.34 of market value up to and including $600,000 market value has a 28.35 net class rate of0.80.6 percent of market value. The 28.36 remaining property over $600,000 market value has a class rate 29.1 of1.20one percent of market value. 29.2 (b) Class 2b property is (1) real estate, rural in 29.3 character and used exclusively for growing trees for timber, 29.4 lumber, and wood and wood products; (2) real estate that is not 29.5 improved with a structure and is used exclusively for growing 29.6 trees for timber, lumber, and wood and wood products, if the 29.7 owner has participated or is participating in a cost-sharing 29.8 program for afforestation, reforestation, or timber stand 29.9 improvement on that particular property, administered or 29.10 coordinated by the commissioner of natural resources; (3) real 29.11 estate that is nonhomestead agricultural land; or (4) a landing 29.12 area or public access area of a privately owned public use 29.13 airport. Class 2b property has a net class rate of1.20one 29.14 percent of market value. 29.15 (c) Agricultural land as used in this section means 29.16 contiguous acreage of ten acres or more, used during the 29.17 preceding year for agricultural purposes. "Agricultural 29.18 purposes" as used in this section means the raising or 29.19 cultivation of agricultural products or enrollment in the 29.20 Reinvest in Minnesota program under sections 103F.501 to 29.21 103F.535 or the federal Conservation Reserve Program as 29.22 contained in Public Law Number 99-198. Contiguous acreage on 29.23 the same parcel, or contiguous acreage on an immediately 29.24 adjacent parcel under the same ownership, may also qualify as 29.25 agricultural land, but only if it is pasture, timber, waste, 29.26 unusable wild land, or land included in state or federal farm 29.27 programs. Agricultural classification for property shall be 29.28 determined excluding the house, garage, and immediately 29.29 surrounding one acre of land, and shall not be based upon the 29.30 market value of any residential structures on the parcel or 29.31 contiguous parcels under the same ownership. 29.32 (d) Real estate, excluding the house, garage, and 29.33 immediately surrounding one acre of land, of less than ten acres 29.34 which is exclusively and intensively used for raising or 29.35 cultivating agricultural products, shall be considered as 29.36 agricultural land. 30.1 Land shall be classified as agricultural even if all or a 30.2 portion of the agricultural use of that property is the leasing 30.3 to, or use by another person for agricultural purposes. 30.4 Classification under this subdivision is not determinative 30.5 for qualifying under section 273.111. 30.6 The property classification under this section supersedes, 30.7 for property tax purposes only, any locally administered 30.8 agricultural policies or land use restrictions that define 30.9 minimum or maximum farm acreage. 30.10 (e) The term "agricultural products" as used in this 30.11 subdivision includes production for sale of: 30.12 (1) livestock, dairy animals, dairy products, poultry and 30.13 poultry products, fur-bearing animals, horticultural and nursery 30.14 stock described in sections 18.44 to 18.61, fruit of all kinds, 30.15 vegetables, forage, grains, bees, and apiary products by the 30.16 owner; 30.17 (2) fish bred for sale and consumption if the fish breeding 30.18 occurs on land zoned for agricultural use; 30.19 (3) the commercial boarding of horses if the boarding is 30.20 done in conjunction with raising or cultivating agricultural 30.21 products as defined in clause (1); 30.22 (4) property which is owned and operated by nonprofit 30.23 organizations used for equestrian activities, excluding racing; 30.24 (5) game birds and waterfowl bred and raised for use on a 30.25 shooting preserve licensed under section 97A.115; 30.26 (6) insects primarily bred to be used as food for animals; 30.27 and 30.28 (7) trees, grown for sale as a crop, and not sold for 30.29 timber, lumber, wood, or wood products. 30.30 (f) If a parcel used for agricultural purposes is also used 30.31 for commercial or industrial purposes, including but not limited 30.32 to: 30.33 (1) wholesale and retail sales; 30.34 (2) processing of raw agricultural products or other goods; 30.35 (3) warehousing or storage of processed goods; and 30.36 (4) office facilities for the support of the activities 31.1 enumerated in clauses (1), (2), and (3), 31.2 the assessor shall classify the part of the parcel used for 31.3 agricultural purposes as class 1b, 2a, or 2b, whichever is 31.4 appropriate, and the remainder in the class appropriate to its 31.5 use. The grading, sorting, and packaging of raw agricultural 31.6 products for first sale is considered an agricultural purpose. 31.7 A greenhouse or other building where horticultural or nursery 31.8 products are grown that is also used for the conduct of retail 31.9 sales must be classified as agricultural if it is primarily used 31.10 for the growing of horticultural or nursery products from seed, 31.11 cuttings, or roots and occasionally as a showroom for the retail 31.12 sale of those products. Use of a greenhouse or building only 31.13 for the display of already grown horticultural or nursery 31.14 products does not qualify as an agricultural purpose. 31.15 The assessor shall determine and list separately on the 31.16 records the market value of the homestead dwelling and the one 31.17 acre of land on which that dwelling is located. If any farm 31.18 buildings or structures are located on this homesteaded acre of 31.19 land, their market value shall not be included in this separate 31.20 determination. 31.21 (g) To qualify for classification under paragraph (b), 31.22 clause (4), a privately owned public use airport must be 31.23 licensed as a public airport under section 360.018. For 31.24 purposes of paragraph (b), clause (4), "landing area" means that 31.25 part of a privately owned public use airport properly cleared, 31.26 regularly maintained, and made available to the public for use 31.27 by aircraft and includes runways, taxiways, aprons, and sites 31.28 upon which are situated landing or navigational aids. A landing 31.29 area also includes land underlying both the primary surface and 31.30 the approach surfaces that comply with all of the following: 31.31 (i) the land is properly cleared and regularly maintained 31.32 for the primary purposes of the landing, taking off, and taxiing 31.33 of aircraft; but that portion of the land that contains 31.34 facilities for servicing, repair, or maintenance of aircraft is 31.35 not included as a landing area; 31.36 (ii) the land is part of the airport property; and 32.1 (iii) the land is not used for commercial or residential 32.2 purposes. 32.3 The land contained in a landing area under paragraph (b), clause 32.4 (4), must be described and certified by the commissioner of 32.5 transportation. The certification is effective until it is 32.6 modified, or until the airport or landing area no longer meets 32.7 the requirements of paragraph (b), clause (4). For purposes of 32.8 paragraph (b), clause (4), "public access area" means property 32.9 used as an aircraft parking ramp, apron, or storage hangar, or 32.10 an arrival and departure building in connection with the airport. 32.11[EFFECTIVE DATE.] This section is effective for taxes 32.12 payable in 2002 and thereafter. 32.13 Sec. 7. Minnesota Statutes 2000, section 273.13, 32.14 subdivision 24, is amended to read: 32.15 Subd. 24. [CLASS 3.] (a) Commercial and industrial 32.16 property and utility real and personal property is class 3a. 32.17 (1) Except as otherwise provided, each parcel of 32.18 commercial, industrial, or utility real property has a class 32.19 rate of2.4two percent of the first tier of market value, and 32.203.4three percent of the remaining market value. In the case of 32.21 contiguous parcels of property owned by the same person or 32.22 entity, only the value equal to the first-tier value of the 32.23 contiguous parcels qualifies for the reduced class rate, except 32.24 that contiguous parcels owned by the same person or entity shall 32.25 be eligible for the first-tier value class rate on each separate 32.26 business operated by the owner of the property, provided the 32.27 business is housed in a separate structure. For the purposes of 32.28 this subdivision, the first tier means the 32.29 first$150,000$300,000 of market value. Real property owned in 32.30 fee by a utility for transmission line right-of-way shall be 32.31 classified at the class rate for the higher tier. 32.32 For purposes of this subdivision, parcels are considered to 32.33 be contiguous even if they are separated from each other by a 32.34 road, street, waterway, or other similar intervening type of 32.35 property. Connections between parcels that consist of power 32.36 lines or pipelines do not cause the parcels to be contiguous. 33.1 Property owners who have contiguous parcels of property that 33.2 constitute separate businesses that may qualify for the 33.3 first-tier class rate shall notify the assessor by July 1, for 33.4 treatment beginning in the following taxes payable year. 33.5 (2) Personal property that is: (i) part of an electric 33.6 generation, transmission, or distribution system; or (ii) part 33.7 of a pipeline system transporting or distributing water, gas, 33.8 crude oil, or petroleum products; and (iii) not described in 33.9 clause (3), has a class rate as provided under clause (1) for 33.10 the first tier of market value and the remaining market value. 33.11 In the case of multiple parcels in one county that are owned by 33.12 one person or entity, only one first tier amount is eligible for 33.13 the reduced rate. 33.14 (3) The entire market value of personal property that is: 33.15 (i) tools, implements, and machinery of an electric generation, 33.16 transmission, or distribution system; (ii) tools, implements, 33.17 and machinery of a pipeline system transporting or distributing 33.18 water, gas, crude oil, or petroleum products; or (iii) the mains 33.19 and pipes used in the distribution of steam or hot or chilled 33.20 water for heating or cooling buildings, has a class rate as 33.21 provided under clause (1) for the remaining market value in 33.22 excess of the first tier. 33.23 (b) Employment property defined in section 469.166, during 33.24 the period provided in section 469.170, shall constitute class 33.25 3b. The class rates for class 3b property are determined under 33.26 paragraph (a). 33.27 (c)(1) Subject to the limitations of clause (2), structures 33.28 which are (i) located on property classified as class 3a, (ii) 33.29 constructed under an initial building permit issued after 33.30 January 2, 1996, (iii) located in a transit zone as defined 33.31 under section 473.3915, subdivision 3, (iv) located within the 33.32 boundaries of a school district, and (v) not primarily used for 33.33 retail or transient lodging purposes, shall have a class rate 33.34 equal to the lesser of 2.975 percent or the class rate of the 33.35 second tier of the commercial property rate under paragraph (a) 33.36 on any portion of the market value that does not qualify for the 34.1 first tier class rate under paragraph (a). As used in item (v), 34.2 a structure is primarily used for retail or transient lodging 34.3 purposes if over 50 percent of its square footage is used for 34.4 those purposes. A class rate equal to the lesser of 2.975 34.5 percent or the class rate of the second tier of the commercial 34.6 property class rate under paragraph (a) shall also apply to 34.7 improvements to existing structures that meet the requirements 34.8 of items (i) to (v) if the improvements are constructed under an 34.9 initial building permit issued after January 2, 1996, even if 34.10 the remainder of the structure was constructed prior to January 34.11 2, 1996. For the purposes of this paragraph, a structure shall 34.12 be considered to be located in a transit zone if any portion of 34.13 the structure lies within the zone. If any property once 34.14 eligible for treatment under this paragraph ceases to remain 34.15 eligible due to revisions in transit zone boundaries, the 34.16 property shall continue to receive treatment under this 34.17 paragraph for a period of three years. 34.18 (2) This clause applies to any structure qualifying for the 34.19 transit zone reduced class rate under clause (1) on January 2, 34.20 1999, or any structure meeting any of the qualification criteria 34.21 in item (i) and otherwise qualifying for the transit zone 34.22 reduced class rate under clause (1). Such a structure continues 34.23 to receive the transit zone reduced class rate until the 34.24 occurrence of one of the events in item (ii). Property 34.25 qualifying under item (i)(D), that is located outside of a city 34.26 of the first class, qualifies for the transit zone reduced class 34.27 rate as provided in that item. Property qualifying under item 34.28 (i)(E) qualifies for the transit zone reduced class rate as 34.29 provided in that item. 34.30 (i) A structure qualifies for the rate in this clause if it 34.31 is: 34.32 (A) property for which a building permit was issued before 34.33 December 31, 1998; or 34.34 (B) property for which a building permit was issued before 34.35 June 30, 2001, if: 34.36 (I) at least 50 percent of the land on which the structure 35.1 is to be built has been acquired or is the subject of signed 35.2 purchase agreements or signed options as of March 15, 1998, by 35.3 the entity that proposes construction of the project or an 35.4 affiliate of the entity; 35.5 (II) signed agreements have been entered into with one 35.6 entity or with affiliated entities to lease for the account of 35.7 the entity or affiliated entities at least 50 percent of the 35.8 square footage of the structure or the owner of the structure 35.9 will occupy at least 50 percent of the square footage of the 35.10 structure; and 35.11 (III) one of the following requirements is met: 35.12 the project proposer has submitted the completed data 35.13 portions of an environmental assessment worksheet by December 35.14 31, 1998; or 35.15 a notice of determination of adequacy of an environmental 35.16 impact statement has been published by April 1, 1999; or 35.17 an alternative urban areawide review has been completed by 35.18 April 1, 1999; or 35.19 (C) property for which a building permit is issued before 35.20 July 30, 1999, if: 35.21 (I) at least 50 percent of the land on which the structure 35.22 is to be built has been acquired or is the subject of signed 35.23 purchase agreements as of March 31, 1998, by the entity that 35.24 proposes construction of the project or an affiliate of the 35.25 entity; 35.26 (II) a signed agreement has been entered into between the 35.27 building developer and a tenant to lease for its own account at 35.28 least 200,000 square feet of space in the building; 35.29 (III) a signed letter of intent is entered into by July 1, 35.30 1998, between the building developer and the tenant to lease the 35.31 space for its own account; and 35.32 (IV) the environmental review process required by state law 35.33 was commenced by December 31, 1998; 35.34 (D) property for which an irrevocable letter of credit with 35.35 a housing and redevelopment authority was signed before December 35.36 31, 1998. The structure shall receive the transit zone reduced 36.1 class rate during construction and for the duration of time that 36.2 the original tenants remain in the building. Any unoccupied net 36.3 leasable square footage that is not leased within 36 months 36.4 after the certificate of occupancy has been issued for the 36.5 building shall not be eligible to receive the reduced class 36.6 rate. This reduced class rate applies only if a qualifying 36.7 entity continues to own the property; 36.8 (E) property, located in a city of the first class, and for 36.9 which the building permits for the excavation, the parking ramp, 36.10 and the office tower were issued prior to April 1, 1999, shall 36.11 receive the reduced class rate during construction and for the 36.12 first five assessment years immediately following its initial 36.13 occupancy provided that, when completed, at least 25 percent of 36.14 the net leasable square footage must be occupied by a qualifying 36.15 entity each year during this time period. In order to receive 36.16 the reduced class rate on the structure in any subsequent 36.17 assessment years, at least 50 percent of the rentable square 36.18 footage must be occupied by a qualifying entity. This reduced 36.19 class rate applies only if a qualifying entity continues to own 36.20 the property. 36.21 (ii) A structure specified by this clause, other than a 36.22 structure qualifying under clause (i)(D) or (E), shall continue 36.23 to receive the transit zone reduced class rate until the 36.24 occurrence of one of the following events: 36.25 (A) if the structure upon initial occupancy will be owner 36.26 occupied by the entity initially constructing the structure or 36.27 an affiliated entity, the structure receives the reduced class 36.28 rate until the structure ceases to be at least 50 percent 36.29 occupied by the entity or an affiliated entity, provided, if the 36.30 portion of the structure occupied by that entity or an affiliate 36.31 of the entity is less than 85 percent, the transit zone class 36.32 rate reduction for the portion of structure not so occupied 36.33 terminates upon the leasing of such space to any nonaffiliated 36.34 entity; or 36.35 (B) if the structure is leased by a single entity or 36.36 affiliated entity at the time of initial occupancy, the 37.1 structure shall receive the reduced class rate until the 37.2 structure ceases to be at least 50 percent occupied by the 37.3 entity or an affiliated entity, provided, if the portion of the 37.4 structure occupied by that entity or an affiliate of the entity 37.5 is less than 85 percent, the transit zone class rate reduction 37.6 for the portion of structure not so occupied shall terminate 37.7 upon the leasing of such space to any nonaffiliated entity; or 37.8 (C) if the structure meets the criteria in item (i)(C), the 37.9 structure shall receive the reduced class rate until the 37.10 expiration of the initial lease term of the applicable tenants. 37.11 Percentages occupied or leased shall be determined based 37.12 upon net leasable square footage in the structure. The assessor 37.13 shall allocate the value of the structure in the same fashion as 37.14 provided in the general law for portions of any structure 37.15 receiving and not receiving the transit tax class reduction as a 37.16 result of this clause. 37.17 (3) For purposes of paragraph (c), "qualifying entity" 37.18 means the entity owning the property on September 1, 2000, or an 37.19 affiliate of an entity that owned the property on September 1, 37.20 2000. 37.21[EFFECTIVE DATE.] This section is effective for taxes 37.22 payable in 2002 and thereafter. 37.23 Sec. 8. Minnesota Statutes 2000, section 273.13, 37.24 subdivision 25, is amended to read: 37.25 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 37.26 estate containing four or more units and used or held for use by 37.27 the owner or by the tenants or lessees of the owner as a 37.28 residence for rental periods of 30 days or more. Class 4a also 37.29 includes hospitals licensed under sections 144.50 to 144.56, 37.30 other than hospitals exempt under section 272.02, and contiguous 37.31 property used for hospital purposes, without regard to whether 37.32 the property has been platted or subdivided.Class 4a property37.33in a city with a population of 5,000 or less, that is (1)37.34located outside of the metropolitan area, as defined in section37.35473.121, subdivision 2, or outside any county contiguous to the37.36metropolitan area, and (2) whose city boundary is at least 1538.1miles from the boundary of any city with a population greater38.2than 5,000 has a class rate of 2.15 percent of market value.38.3All otherClass 4a property has a class rate of 2.4 percent of 38.4 market value unless it is qualified class 4a property. 38.5 For purposes of this paragraph,population has the same38.6meaning given in section 477A.011, subdivision 3"qualified 38.7 class 4a property" means class 4a property that either: 38.8 (1) is initially occupied as rental residential property 38.9 after January 1, 2002; or 38.10 (2) is certified by a municipal authority as being in 38.11 compliance with all applicable rental licensing requirements and 38.12 housing codes. 38.13 Qualified class 4a property has a class rate of 1.8 percent. 38.14 Additionally, the market value of qualified class 4a property 38.15 has a class rate that is 0.3 percent less than the rate 38.16 otherwise applicable to qualified class 4a property for any 38.17 taxes payable year if the owner provides proof satisfactory to 38.18 the assessor, in a form required by the commissioner, that at 38.19 least 50 percent of the tax savings attributable to the 38.20 reduction in class rate from 1.8 to 1.5 percent, is used to 38.21 reduce the rent charged to tenants of the property. This 38.22 reduction is available to qualified class 4a property only 38.23 beginning with assessments of the property in the second or 38.24 subsequent year of its occupancy as rental residential property. 38.25 (b) Class 4b includes: 38.26 (1) residential real estate containing less than four units 38.27 that does not qualify as class 4bb, other than seasonal 38.28 residential, and recreational; 38.29 (2) manufactured homes not classified under any other 38.30 provision; 38.31 (3) a dwelling, garage, and surrounding one acre of 38.32 property on a nonhomestead farm classified under subdivision 23, 38.33 paragraph (b) containing two or three units; 38.34 (4) unimproved property that is classified residential as 38.35 determined under subdivision 33. 38.36 Class 4b property has a class rate of1.651.3 percent of 39.1 market value on the first $200,000 of market value and 1.5 39.2 percent on the remainder for taxes payable in 2002 only, and a 39.3 class rate of one percent on the first $200,000 of market value 39.4 and 1.5 percent on the remainder for taxes payable in 2003 and 39.5 thereafter. 39.6 (c) Class 4bb includes: 39.7 (1) nonhomestead residential real estate containing one 39.8 unit, other than seasonal residential, and recreational; and 39.9 (2) a single family dwelling, garage, and surrounding one 39.10 acre of property on a nonhomestead farm classified under 39.11 subdivision 23, paragraph (b). 39.12 Class 4bb has a class rate of1.2one percent on the first 39.13$76,000$200,000 of market value and a class rate of1.651.5 39.14 percent of its market value that exceeds$76,000$200,000. 39.15 Property that has been classified as seasonal recreational 39.16 residential property at any time during which it has been owned 39.17 by the current owner or spouse of the current owner does not 39.18 qualify for class 4bb. 39.19 (d) Class 4c property includes: 39.20 (1) except as provided in subdivision 22, paragraph (c), 39.21 real property devoted to temporary and seasonal residential 39.22 occupancy for recreation purposes, including real property 39.23 devoted to temporary and seasonal residential occupancy for 39.24 recreation purposes and not devoted to commercial purposes for 39.25 more than 250 days in the year preceding the year of 39.26 assessment. For purposes of this clause, property is devoted to 39.27 a commercial purpose on a specific day if any portion of the 39.28 property is used for residential occupancy, and a fee is charged 39.29 for residential occupancy. In order for a property to be 39.30 classified as class 4c, seasonal recreational residential for 39.31 commercial purposes, at least 40 percent of the annual gross 39.32 lodging receipts related to the property must be from business 39.33 conducted during 90 consecutive days and either (i) at least 60 39.34 percent of all paid bookings by lodging guests during the year 39.35 must be for periods of at least two consecutive nights; or (ii) 39.36 at least 20 percent of the annual gross receipts must be from 40.1 charges for rental of fish houses, boats and motors, 40.2 snowmobiles, downhill or cross-country ski equipment, or charges 40.3 for marina services, launch services, and guide services, or the 40.4 sale of bait and fishing tackle. For purposes of this 40.5 determination, a paid booking of five or more nights shall be 40.6 counted as two bookings. Class 4c also includes commercial use 40.7 real property used exclusively for recreational purposes in 40.8 conjunction with class 4c property devoted to temporary and 40.9 seasonal residential occupancy for recreational purposes, up to 40.10 a total of two acres, provided the property is not devoted to 40.11 commercial recreational use for more than 250 days in the year 40.12 preceding the year of assessment and is located within two miles 40.13 of the class 4c property with which it is used. Class 4c 40.14 property classified in this clause also includes the remainder 40.15 of class 1c resorts provided that the entire property including 40.16 that portion of the property classified as class 1c also meets 40.17 the requirements for class 4c under this clause; otherwise the 40.18 entire property is classified as class 3. Owners of real 40.19 property devoted to temporary and seasonal residential occupancy 40.20 for recreation purposes and all or a portion of which was 40.21 devoted to commercial purposes for not more than 250 days in the 40.22 year preceding the year of assessment desiring classification as 40.23 class 1c or 4c, must submit a declaration to the assessor 40.24 designating the cabins or units occupied for 250 days or less in 40.25 the year preceding the year of assessment by January 15 of the 40.26 assessment year. Those cabins or units and a proportionate 40.27 share of the land on which they are located will be designated 40.28 class 1c or 4c as otherwise provided. The remainder of the 40.29 cabins or units and a proportionate share of the land on which 40.30 they are located will be designated as class 3a. The owner of 40.31 property desiring designation as class 1c or 4c property must 40.32 provide guest registers or other records demonstrating that the 40.33 units for which class 1c or 4c designation is sought were not 40.34 occupied for more than 250 days in the year preceding the 40.35 assessment if so requested. The portion of a property operated 40.36 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 41.1 nonresidential facility operated on a commercial basis not 41.2 directly related to temporary and seasonal residential occupancy 41.3 for recreation purposes shall not qualify for class 1c or 4c; 41.4 (2) qualified property used as a golf course if: 41.5 (i) it is open to the public on a daily fee basis. It may 41.6 charge membership fees or dues, but a membership fee may not be 41.7 required in order to use the property for golfing, and its green 41.8 fees for golfing must be comparable to green fees typically 41.9 charged by municipal courses; and 41.10 (ii) it meets the requirements of section 273.112, 41.11 subdivision 3, paragraph (d). 41.12 A structure used as a clubhouse, restaurant, or place of 41.13 refreshment in conjunction with the golf course is classified as 41.14 class 3a property; 41.15 (3) real property up to a maximum of one acre of land owned 41.16 by a nonprofit community service oriented organization; provided 41.17 that the property is not used for a revenue-producing activity 41.18 for more than six days in the calendar year preceding the year 41.19 of assessment and the property is not used for residential 41.20 purposes on either a temporary or permanent basis. For purposes 41.21 of this clause, a "nonprofit community service oriented 41.22 organization" means any corporation, society, association, 41.23 foundation, or institution organized and operated exclusively 41.24 for charitable, religious, fraternal, civic, or educational 41.25 purposes, and which is exempt from federal income taxation 41.26 pursuant to section 501(c)(3), (10), or (19) of the Internal 41.27 Revenue Code of 1986, as amended through December 31, 1990. For 41.28 purposes of this clause, "revenue-producing activities" shall 41.29 include but not be limited to property or that portion of the 41.30 property that is used as an on-sale intoxicating liquor or 3.2 41.31 percent malt liquor establishment licensed under chapter 340A, a 41.32 restaurant open to the public, bowling alley, a retail store, 41.33 gambling conducted by organizations licensed under chapter 349, 41.34 an insurance business, or office or other space leased or rented 41.35 to a lessee who conducts a for-profit enterprise on the 41.36 premises. Any portion of the property which is used for 42.1 revenue-producing activities for more than six days in the 42.2 calendar year preceding the year of assessment shall be assessed 42.3 as class 3a. The use of the property for social events open 42.4 exclusively to members and their guests for periods of less than 42.5 24 hours, when an admission is not charged nor any revenues are 42.6 received by the organization shall not be considered a 42.7 revenue-producing activity; 42.8 (4) post-secondary student housing of not more than one 42.9 acre of land that is owned by a nonprofit corporation organized 42.10 under chapter 317A and is used exclusively by a student 42.11 cooperative, sorority, or fraternity for on-campus housing or 42.12 housing located within two miles of the border of a college 42.13 campus; 42.14 (5) manufactured home parks as defined in section 327.14, 42.15 subdivision 3; 42.16 (6) real property that is actively and exclusively devoted 42.17 to indoor fitness, health, social, recreational, and related 42.18 uses, is owned and operated by a not-for-profit corporation, and 42.19 is located within the metropolitan area as defined in section 42.20 473.121, subdivision 2; and 42.21 (7) a leased or privately owned noncommercial aircraft 42.22 storage hangar not exempt under section 272.01, subdivision 2, 42.23 and the land on which it is located, provided that: 42.24 (i) the land is on an airport owned or operated by a city, 42.25 town, county, metropolitan airports commission, or group 42.26 thereof; and 42.27 (ii) the land lease, or any ordinance or signed agreement 42.28 restricting the use of the leased premise, prohibits commercial 42.29 activity performed at the hangar. 42.30 If a hangar classified under this clause is sold after June 42.31 30, 2000, a bill of sale must be filed by the new owner with the 42.32 assessor of the county where the property is located within 60 42.33 days of the sale. 42.34 Class 4c property has a class rate of1.651.4 percent of 42.35 market value, except that: 42.36 (i) each parcel of seasonal residential recreational 43.1 property not used for commercial purposes hasthe same class43.2rates as class 4bb property,a class rate of one percent on the 43.3 first $100,000 of market value for taxes payable in 2002, on the 43.4 first $150,000 of market value for taxes payable in 2003, and on 43.5 the first $200,000 of market value for taxes payable in 2004 and 43.6 thereafter, and a class rate of 1.5 percent on the remaining 43.7 value for taxes payable in 2002 and thereafter; 43.8 (ii) manufactured home parks assessed under clause (5) have 43.9the samea class rateas class 4b property,of one percent; and 43.10 (iii) property described in paragraph (d), clause (4), has 43.11 the same class rate as the rate applicable to the first tier of 43.12 class 4bb nonhomestead residential real estate under paragraph 43.13 (c). 43.14 (e) Class 4d property is qualifying low-income rental 43.15 housing certified to the assessor by the housing finance agency 43.16 under sections 273.126 and 462A.071. Class 4d includes land in 43.17 proportion to the total market value of the building that is 43.18 qualifying low-income rental housing. For all properties 43.19 qualifying as class 4d, the market value determined by the 43.20 assessor must be based on the normal approach to value using 43.21 normal unrestricted rents. 43.22 Class 4d property has a class rateof one percent of market43.23valueequal to 42 percent of the class rate applicable to class 43.24 4a property. 43.25[EFFECTIVE DATE.] This section is effective for taxes 43.26 payable in 2002 and thereafter. 43.27 Sec. 9. Minnesota Statutes 2000, section 273.13, 43.28 subdivision 31, is amended to read: 43.29 Subd. 31. [CLASS 5.] Class 5 property includes: 43.30 (1) unmined iron ore and low-grade iron-bearing formations 43.31 as defined in section 273.14; and 43.32 (2) all other property not otherwise classified. 43.33 Class 5 property has a class rate of3.4three percent of 43.34 market value. 43.35[EFFECTIVE DATE.] This section is effective for taxes 43.36 payable in 2002 and thereafter. 44.1 Sec. 10. [273.1384] [HOMESTEAD AND AGRICULTURAL CREDITS.] 44.2 Subdivision 1. [HOMESTEAD CREDIT.] Each county auditor 44.3 shall determine a homestead credit amount for each property 44.4 classified as class 1 residential homestead or class 2a 44.5 agricultural homestead within the county equal to 0.5 percent of 44.6 market value, to a maximum of $620 per homestead. In the case 44.7 of an agricultural or resort homestead, only the net tax 44.8 capacity of the house, garage, and surrounding one acre of land 44.9 shall be used in determining the property's homestead credit 44.10 amount. The credit may not exceed the net tax on the property 44.11 after subtraction of all other credits under section 273.1393. 44.12 Subd. 2. [AGRICULTURAL CREDIT.] (a) Property classified as 44.13 class 2a agricultural homestead is eligible for an agricultural 44.14 credit equal to 0.15 percent of the market value of the 44.15 property, excluding the market value attributable to the house, 44.16 garage, and surrounding one acre of land. 44.17 (b) Property classified as class 2b is eligible for a 44.18 non-homestead agricultural and timberland credit equal to 0.28 44.19 percent of the market value of the property. 44.20 Subd. 3. [CREDIT APPLICATION.] The credits under this 44.21 section must be used to proportionately reduce the net tax 44.22 capacity-based property tax payable to all taxing jurisdictions, 44.23 after subtraction of all other credits under section 273.1393. 44.24 Subd. 4. [CREDIT REIMBURSEMENT.] The county auditor shall 44.25 certify the amount of tax reductions granted under this section 44.26 to the commissioner of revenue on the abstracts of tax lists 44.27 submitted under section 275.29. The commissioner of revenue 44.28 shall verify the credit amounts reported, and shall make 44.29 payments directly to the affected taxing jurisdictions other 44.30 than school districts in two equal installments on September 15 44.31 and December 26 each year. The commissioner of revenue shall 44.32 certify the total of the tax reductions granted under this 44.33 section for each school district to the commissioner of 44.34 children, families, and learning before September 1 of each 44.35 taxes payable year. The commissioner of children, families, and 44.36 learning shall reimburse each affected school district for the 45.1 amount of the property tax reductions allowed under this section 45.2 as provided in section 273.1392. 45.3 Subd. 5. [APPROPRIATION.] An amount sufficient to pay the 45.4 credit reimbursements provided under this section for school 45.5 districts, intermediate school districts, or any group of school 45.6 districts levying as a single taxing entity, is annually 45.7 appropriated from the general fund to the commissioner of 45.8 children, families, and learning. An amount sufficient to pay 45.9 the credit reimbursements provided under this section for 45.10 counties, cities, towns, and special taxing districts is 45.11 annually appropriated from the general fund to the commissioner 45.12 of revenue. A jurisdiction's aid amount may be increased or 45.13 decreased based on any prior year adjustments for homestead 45.14 credit or other property tax credit or aid programs. 45.15[EFFECTIVE DATE.] This section is effective for taxes 45.16 payable in 2002 and subsequent years. 45.17 Sec. 11. Minnesota Statutes 2000, section 273.1392, is 45.18 amended to read: 45.19 273.1392 [PAYMENT; SCHOOL DISTRICTS.] 45.20 The amounts of conservation tax credits under section 45.21 273.119; disaster or emergency reimbursement under section 45.22 273.123; attached machinery aid under section 273.138;homestead45.23credit under section 273.13homestead and agricultural credits 45.24 under section 273.1384; aids and credits under section 273.1398; 45.25 wetlands reimbursement under section 275.295; enterprise zone 45.26 property credit payments under section 469.171; and metropolitan 45.27 agricultural preserve reduction under section 473H.10 for school 45.28 districts, shall be certified to the department of children, 45.29 families, and learning by the department of revenue. The 45.30 amounts so certified shall be paid according to section 127A.45, 45.31 subdivisions 9 and 13. 45.32[EFFECTIVE DATE.] This section is effective for aids and 45.33 credits payable in 2002 and thereafter. 45.34 Sec. 12. Minnesota Statutes 2000, section 273.1393, is 45.35 amended to read: 45.36 273.1393 [COMPUTATION OF NET PROPERTY TAXES.] 46.1 Notwithstanding any other provisions to the contrary, "net" 46.2 property taxes are determined by subtracting the credits in the 46.3 order listed from the gross tax: 46.4 (1) disaster credit as provided in section 273.123; 46.5 (2) powerline credit as provided in section 273.42; 46.6 (3) agricultural preserves credit as provided in section 46.7 473H.10; 46.8 (4) enterprise zone credit as provided in section 469.171; 46.9 (5) disparity reduction credit; 46.10 (6) conservation tax credit as provided in section 273.119; 46.11 (7)educationhomesteadcreditand agricultural credits as 46.12 provided in section273.1382273.1384; 46.13 (8) taconite homestead credit as provided in section 46.14 273.135; and 46.15 (9) supplemental homestead credit as provided in section 46.16 273.1391. 46.17 The combination of all property tax credits must not exceed 46.18 the gross tax amount. 46.19[EFFECTIVE DATE.] This section is effective for taxes 46.20 payable in 2002 and subsequent years. 46.21 Sec. 13. Minnesota Statutes 2000, section 273.1398, 46.22 subdivision 4, is amended to read: 46.23 Subd. 4. [DISPARITY REDUCTION CREDIT.] (a)Beginning with46.24taxes payable in 1989,Class 4a, class 3a, and class 3b property 46.25 qualifies for a disparity reduction credit if: (1) the property 46.26 is located in a border city that has an enterprise zone 46.27 designated pursuant to section 469.168, subdivision 4; (2) the 46.28 property is located in a city with a population greater than 46.29 2,500 and less than 35,000 according to the 1980 decennial 46.30 census; (3) the city is adjacent to a city in another state or 46.31 immediately adjacent to a city adjacent to a city in another 46.32 state; and (4) the adjacent city in the other state has a 46.33 population of greater than 5,000 and less than 75,000. 46.34 (b) The credit is an amount sufficient to reduce (i) the 46.35 taxes levied on class 4a property to2.31.7 percent of the 46.36 property's market value and (ii) the tax on class 3a and class 47.1 3b property to2.31.9 percent of market value. 47.2 (c) The county auditor shall annually certify the costs of 47.3 the credits to the department of revenue. The department shall 47.4 reimburse local governments for the property taxes foregone as 47.5 the result of the credits in proportion to their total levies. 47.6 Sec. 14. Minnesota Statutes 2000, section 273.1398, is 47.7 amended by adding a subdivision to read: 47.8 Subd. 9. [CLASS 3 REFERENDUM RATE REDUCTION.] The county 47.9 auditor of each county containing a school district for which a 47.10 referendum tax base replacement aid rate is calculated under 47.11 section 126C.17, subdivision 7a, shall reduce the referendum tax 47.12 rate for each parcel of class 3 property in the school district 47.13 by the referendum tax base replacement aid rate for that school 47.14 district. 47.15 Sec. 15. [EDUCATION FACILITY ENERGY REIMBURSEMENT AND TAX 47.16 REBATE.] 47.17 For fiscal year 2003 only, $43,000,000 is appropriated to 47.18 the commissioner of children, families, and learning to be used 47.19 to pay to each school district an education facility energy 47.20 reimbursement and tax rebate equal to $50 times the adjusted 47.21 marginal cost pupil units for the school year. This revenue is 47.22 paid entirely in fiscal year 2003 based on estimated data. By 47.23 January 31, 2004, the department of children, families, and 47.24 learning shall recalculate the revenue for each district using 47.25 actual data and shall adjust the general education aid paid the 47.26 school districts for fiscal year 2004 by the amount of the 47.27 difference between the estimated revenue and the actual 47.28 revenue. If the appropriation is insufficient, the aid must be 47.29 prorated. 47.30 Sec. 16. [REPEALER.] 47.31 Minnesota Statutes 2000, section 273.1382, is repealed. 47.32[EFFECTIVE DATE.] This section is effective for taxes 47.33 payable in 2002 and thereafter. 47.34 ARTICLE 3 47.35 STATE TAKEOVER OF COUNTY COSTS 47.36 Section 1. Minnesota Statutes 2000, section 97A.065, 48.1 subdivision 2, is amended to read: 48.2 Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and 48.3 forfeited bail collected from prosecutions of violations of: 48.4 the game and fish laws; sections 84.091 to 84.15; sections 84.81 48.5 to 84.91; section 169A.20, when the violation involved an 48.6 off-road recreational vehicle as defined in section 169A.03, 48.7 subdivision 16; chapter 348; and any other law relating to wild 48.8 animals or aquatic vegetation, must be paid to the treasurer of 48.9 the county where the violation is prosecuted. The county 48.10 treasurer shall submit one-half of the receipts to the 48.11 commissioner and credit the balance to the county general 48.12 revenue fund except as provided in paragraphs (b), (c), and 48.13 (d). In a county in a judicial district under section 480.181, 48.14 subdivision 1, paragraph (b),as added in Laws 1999, chapter48.15216, article 7, section 26,the share that would otherwise go to 48.16 the county under this paragraph must be submitted to the state 48.17 treasurer for deposit in the state treasury and credited to the 48.18 general fund. 48.19 (b) The commissioner must reimburse a county, from the game 48.20 and fish fund, for the cost of keeping prisoners prosecuted for 48.21 violations under this section if the county board, by 48.22 resolution, directs: (1) the county treasurer to submit all 48.23 fines and forfeited bail to the commissioner; and (2) the county 48.24 auditor to certify and submit monthly itemized statements to the 48.25 commissioner. 48.26 (c) The county treasurer shall submit one-half of the 48.27 receipts collected under paragraph (a) from prosecutions of 48.28 violations of sections 84.81 to 84.91, and 169A.20, except 48.29 receipts that are surcharges imposed under section 357.021, 48.30 subdivision 6, to the commissioner and credit the balance to the 48.31 county general fund. The commissioner shall credit these 48.32 receipts to the snowmobile trails and enforcement account in the 48.33 natural resources fund. 48.34 (d) The county treasurer shall indicate the amount of the 48.35 receipts that are surcharges imposed under section 357.021, 48.36 subdivision 6, and shall submit all of those receipts to the 49.1 state treasurer. 49.2[EFFECTIVE DATE.] This section is effective July 1, 2003, 49.3 in the second and fourth districts; July 1, 2004, in the first 49.4 and third districts; and July 1, 2005, in the sixth and tenth 49.5 districts. 49.6 Sec. 2. Minnesota Statutes 2000, section 179A.101, 49.7 subdivision 1, is amended to read: 49.8 Subdivision 1. [COURT EMPLOYEE UNITS.] (a) The state court 49.9 administrator shall meet and negotiate with the exclusive 49.10 representative of each of the units specified in this section. 49.11 The units provided in this section are the only appropriate 49.12 units for court employees. Court employees, unless otherwise 49.13 excluded, are included within the units which include the 49.14 classifications to which they are assigned for purposes of 49.15 compensation. Initial assignment of classifications to 49.16 bargaining units shall be made by the state court administrator 49.17 by August 15, 1999of the year preceding the year in which the 49.18 state assumes the cost of court administration in the judicial 49.19 district in which the bargaining unit is located. An exclusive 49.20 representative may appeal the initial assignment decision of the 49.21 state court administrator by filing a petition with the 49.22 commissioner within 45 days of being certified as the exclusive 49.23 representative for a judicial district. The units in this 49.24 subdivision are the appropriate units of court employees. 49.25 (b) The judicial district unit consists of clerical, 49.26 administrative, and technical employees of a judicial district 49.27 under section 480.181, subdivision 1, paragraph (b), or of two 49.28 or more of these districts that are represented by the same 49.29 employee organization or one or more subordinate bodies of the 49.30 same employee organization. The judicial district unit includes 49.31 individuals, not otherwise excluded, whose work is typically 49.32 clerical or secretarial in nature, including nontechnical data 49.33 recording and retrieval and general office work, and 49.34 individuals, not otherwise excluded, whose work is not typically 49.35 manual and which requires specialized knowledge or skills 49.36 acquired through two-year academic programs or equivalent 50.1 experience or on-the-job training. 50.2 (c) The appellate courts unit consists of clerical, 50.3 administrative, and technical employees of the court of appeals 50.4 and clerical, administrative, and technical employees of the 50.5 supreme court. The appellate courts unit includes individuals, 50.6 not otherwise excluded, whose work is typically clerical or 50.7 secretarial in nature, including nontechnical data recording and 50.8 retrieval and general office work, and individuals, not 50.9 otherwise excluded, whose work is not typically manual and which 50.10 requires specialized knowledge or skills acquired through 50.11 two-year academic programs or equivalent experience or 50.12 on-the-job training. 50.13 (d) The court employees professional employee unit consists 50.14 of professional employees, not otherwise excluded, that are 50.15 employed by the supreme court, the court of appeals, or a 50.16 judicial district under section 480.181, subdivision 1, 50.17 paragraph (b). 50.18 (e) The court employees court reporter unit consists of 50.19 court reporters not otherwise excluded who are employed by a 50.20 judicial district under section 480.181, subdivision 1, 50.21 paragraph (a). 50.22 (f) Notwithstanding any provision of this chapter or any 50.23 other law to the contrary, judges may appoint and remove court 50.24 reporters at their pleasure. 50.25 (g) Copies of collective bargaining agreements entered into 50.26 under this section must be submitted to the legislative 50.27 coordinating commission for the commission's information. 50.28[EFFECTIVE DATE.] This section is effective July 1, 2003, 50.29 in the second and fourth districts; July 1, 2004, in the first 50.30 and third districts; and July 1, 2005, in the sixth and tenth 50.31 districts. 50.32 Sec. 3. Minnesota Statutes 2000, section 179A.102, 50.33 subdivision 6, is amended to read: 50.34 Subd. 6. [CONTRACT AND REPRESENTATION RESPONSIBILITIES.] 50.35 (a) Notwithstanding the provisions of section 179A.101, the 50.36 exclusive representatives of units of court employees certified 51.1 prior to the effective date of the judicial district coming 51.2 under section 480.181, subdivision 1, paragraph (b), remain 51.3 responsible for administration of their contracts and for other 51.4 contractual duties and have the right to dues and fair share fee 51.5 deduction and other contractual privileges and rights until a 51.6 contract is agreed upon with the state court administrator for a 51.7 new unit established under section 179A.101or until June 30,51.82001, whichever is earlier. Exclusive representatives of court 51.9 employees certified after the effective date of this section in 51.10 the judicial district are immediately upon certification 51.11 responsible for bargaining on behalf of employees within the 51.12 unit. They are also responsible for administering grievances 51.13 arising under previous contracts covering employees included 51.14 within the unit which remain unresolvedon June 30, 2001, or51.15 upon agreement with the state court administrator on a contract 51.16 for a new unit established under section 179A.101, whichever is51.17earlier. Where the employer does not object, these 51.18 responsibilities may be varied by agreement between the outgoing 51.19 and incoming exclusive representatives. All other rights and 51.20 duties of representation begin on July 1, 2001of the year in 51.21 which the state assumes the funding of court administration in 51.22 the judicial district, except that exclusive representatives 51.23 certified after the effective date of this section shall 51.24 immediately, upon certification, have the right to all employer 51.25 information and all forms of access to employees within the 51.26 bargaining unit which would be permitted to the current contract 51.27 holder, including the rights in section 179A.07, subdivision 6. 51.28 This section does not affect an existing collective bargaining 51.29 contract. Incoming exclusive representatives of court employees 51.30 from judicial districts that come under section 480.181, 51.31 subdivision 1, paragraph (b), are immediately, upon 51.32 certification, responsible for bargaining on behalf of all 51.33 previously unrepresented employees assigned to their units. All 51.34 other rights and duties of exclusive representatives begin on 51.35 July 1, 2001of the year in which the state assumes the funding 51.36 of court administration in the judicial district. 52.1 (b) Nothing in this act or Laws 1999, chapter 216, article 52.2 7, sections 3 to 15, prevents an exclusive representative 52.3 certified after the effectivedate of sections 3 to 15dates of 52.4 those provisions from assessing fair share or dues deductions 52.5 immediately upon certification for employees in a unit 52.6 established under section 179A.101 if the employees were 52.7 unrepresented for collective bargaining purposes before that 52.8 certification. 52.9[EFFECTIVE DATE.] This section is effective July 1, 2003, 52.10 in the second and fourth districts; July 1, 2004, in the first 52.11 and third districts; and July 1, 2005, in the sixth and tenth 52.12 districts. 52.13 Sec. 4. Minnesota Statutes 2000, section 179A.103, 52.14 subdivision 1, is amended to read: 52.15 Subdivision 1. [CONTRACTS.] Contracts for the period 52.16 commencing July 1, 2000,of the year in which the state assumes 52.17 the cost of court administration in the judicial district for 52.18 the judicial district court employeesof judicial districts that52.19are under section 480.181, subdivision 1, paragraph (b),must be 52.20 negotiated with the state court administrator. Negotiations for 52.21 those contracts may begin any time after July 1, 1999of the 52.22 year before the state assumes the cost, and may be initiated by 52.23 either party notifying the other of the desire to begin the 52.24 negotiating process. Negotiations are subject to this chapter. 52.25[EFFECTIVE DATE.] This section is effective July 1, 2003, 52.26 in the second and fourth districts; July 1, 2004, in the first 52.27 and third districts; and July 1, 2005, in the sixth and tenth 52.28 districts. 52.29 Sec. 5. [245.775] [REIMBURSEMENT OF COUNTY FOR CERTAIN 52.30 OUT-OF-HOME PLACEMENTS.] 52.31 (a) The commissioner of human services shall reimburse each 52.32 county for a portion of the nonfederal share of the cost of 52.33 out-of-home placement. The amount of the reimbursement is 30 52.34 percent of the county's average nonfederal share of the cost for 52.35 out-of-home placement for the most recent three years. For 52.36 purposes of this section, "out-of-home placement" means the 53.1 placement of a child in a child caring institution or shelter 53.2 licensed under Minnesota Rules, parts 9545.0905 to 9545.1125, in 53.3 a group home licensed under Minnesota Rules, parts 9545.1400 to 53.4 9545.1480, in family foster care or group family foster care 53.5 licensed under Minnesota Rules, parts 9545.0010 to 9545.0260, or 53.6 a correctional facility pursuant to a court order under which a 53.7 county social services agency has been assigned financial 53.8 responsibility for the placement. For purposes of this section, 53.9 "out-of-home placement" includes voluntary and tribal 53.10 court-ordered placement of an Indian child under sections 53.11 260.765 and 260.771. 53.12 (b) In July and December of 2002 and each subsequent year, 53.13 the commissioner will make a payment to each county equal to 53.14 one-half of the amount of the county's reimbursement determined 53.15 under paragraph (a) for that calendar year. 53.16 Sec. 6. [245.776] [ANNUAL APPROPRIATION.] 53.17 (a) A sum sufficient to discharge the duties imposed by 53.18 sections 245.775; 260.765, subdivision 2a; and 260.771, 53.19 subdivision 4a, is annually appropriated from the general fund 53.20 to the commissioner of human services. 53.21 (b) The payments under these sections in fiscal year 2004 53.22 and thereafter are limited to an amount equal to the maximum 53.23 allowed appropriation under this section in the previous 53.24 calendar year, multiplied by 106 percent. 53.25 Sec. 7. [245.7765] [INVESTMENT IN EARLY INTERVENTION 53.26 SERVICES.] 53.27 Subdivision 1. [EARLY INTERVENTION SERVICES.] For purposes 53.28 of this section, "early intervention services" means the 53.29 delivery of services to children under section 626.5551. 53.30 Subd. 2. [REQUIRED COUNTY INVESTMENT IN EARLY INTERVENTION 53.31 SERVICES.] Counties must spend 50 percent of the amount provided 53.32 under section 245.776, paragraph (b), on early intervention 53.33 services as defined in subdivision 1. Funds must be used to 53.34 expand existing services or create new services. The county 53.35 shall include in the plan filed under section 256E.09, a 53.36 detailed explanation of how the funds were used to expand or 54.1 create early intervention services. 54.2 Subd. 3. [REPORTING.] The commissioner of human services 54.3 shall develop reporting requirements related to expenditures 54.4 under subdivision 2, or use existing systems, in order to 54.5 determine county accountability and compliance. The 54.6 commissioner shall annually report county compliance data to the 54.7 chairs of the policy committees in the house and senate that 54.8 have jurisdiction over out-of-home placement issues. 54.9 Sec. 8. Minnesota Statutes 2000, section 252.43, is 54.10 amended to read: 54.11 252.43 [COMMISSIONER'S DUTIES.] 54.12 The commissioner shall supervise county boards' provision 54.13 of day training and habilitation services to adults with mental 54.14 retardation and related conditions. The commissioner shall: 54.15 (1) determine the need for day training and habilitation 54.16 services under section 252.28; 54.17 (2) approve payment rates established by a county under 54.18 section 252.46, subdivision 1; 54.19 (3) adopt rules for the administration and provision of day 54.20 training and habilitation services under sections 252.40 to 54.21 252.46 and sections 245A.01 to 245A.16 and 252.28, subdivision 54.22 2; 54.23 (4) enter into interagency agreements necessary to ensure 54.24 effective coordination and provision of day training and 54.25 habilitation services; 54.26 (5) monitor and evaluate the costs and effectiveness of day 54.27 training and habilitation services;and54.28 (6) provide information and technical help to county boards 54.29 and vendors in their administration and provision of day 54.30 training and habilitation services; and 54.31 (7) authorize payment with state funds and any available 54.32 federal Medicaid funds for services provided to individuals 54.33 eligible for home and community-based waiver services. This 54.34 clause shall take effect only upon approval of the federal 54.35 waiver to be requested under section 27. 54.36 Sec. 9. Minnesota Statutes 2000, section 256B.092, 55.1 subdivision 5, is amended to read: 55.2 Subd. 5. [FEDERAL WAIVERS.] (a) The commissioner shall 55.3 apply for any federal waivers necessary to secure, to the extent 55.4 allowed by law, federal financial participation under United 55.5 States Code, title 42, sections 1396 et seq., as amended, for 55.6 the provision of services to persons who, in the absence of the 55.7 services, would need the level of care provided in a regional 55.8 treatment center or a community intermediate care facility for 55.9 persons with mental retardation or related conditions. The 55.10 commissioner may seek amendments to the waivers or apply for 55.11 additional waivers under United States Code, title 42, sections 55.12 1396 et seq., as amended, to contain costs. The commissioner 55.13 shall ensure that payment for the cost of providing home and 55.14 community-based alternative services under the federal waiver 55.15 plan shall not exceed the cost of intermediate care services 55.16 including day training and habilitation services that would have 55.17 been provided without the waivered services. 55.18 (b) The commissioner, in administering home and 55.19 community-based waivers for persons with mental retardation and 55.20 related conditions, shall ensure that day services for eligible 55.21 persons are not provided by the person's residential service 55.22 provider, unless the person or the person's legal representative 55.23 is offered a choice of providers and agrees in writing to 55.24 provision of day services by the residential service provider. 55.25 The individual service plan for individuals who choose to have 55.26 their residential service provider provide their day services 55.27 must describe how health, safety, and protection needs will be 55.28 met by frequent and regular contact with persons other than the 55.29 residential service provider. 55.30 Sec. 10. Minnesota Statutes 2000, section 260.765, is 55.31 amended by adding a subdivision to read: 55.32 Subd. 2a. [REIMBURSEMENT FOR A PORTION OF COSTS.] When an 55.33 Indian child is voluntarily placed in out-of-home care as 55.34 defined in section 245.775 by a tribal social services agency, 55.35 the commissioner shall reimburse 30 percent of the nonfederal 55.36 share of the costs of the placement. The mechanism for 56.1 reimbursement must be the same used for county reimbursement of 56.2 out-of-home placement costs under section 245.775. 56.3[EFFECTIVE DATE.] This section is effective beginning with 56.4 out-of-home placement costs incurred on or after January 1, 2002. 56.5 Sec. 11. Minnesota Statutes 2000, section 260.771, is 56.6 amended by adding a subdivision to read: 56.7 Subd. 4a. [REIMBURSEMENT FOR A PORTION OF COSTS.] When an 56.8 Indian child is placed in out-of-home care as defined in section 56.9 245.775 by a tribal social services agency according to tribal 56.10 court order, the commissioner shall reimburse 30 percent of the 56.11 nonfederal share of the costs of the placement. The mechanism 56.12 for reimbursement must be the same used for county reimbursement 56.13 of out-of-home placement costs under section 245.775. 56.14[EFFECTIVE DATE.] This section is effective beginning with 56.15 out-of-home placement costs incurred on or after January 1, 2002. 56.16 Sec. 12. Minnesota Statutes 2000, section 273.1398, 56.17 subdivision 4a, is amended to read: 56.18 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15,56.191999of the year preceding the year in which the state assumes 56.20 the cost of court administration in the judicial district as 56.21 specified under section 480.183, the supreme court shall 56.22 determine and certify to the commissioner of revenue for each 56.23 county, other than counties located in the eighth judicial56.24district,the county's share of the costs assumed in the 56.25 judicial districts specified underLaws 1999, chapter 216,56.26article 7,section 480.183, subdivision 1, during the succeeding 56.27 fiscal yearbeginning July 1, 2000,. 56.28 (b) The amount certified in paragraph (a) shall be equal to 56.29 the following: 56.30 (i) 103 percent of the required court administration 56.31 expenditures as defined under section 480.183, subdivision 3, 56.32 for calendar year 2003, as determined under subdivision 4b, 56.33 paragraph (a); plus 56.34 (ii) an adjustment for any cumulative percentage increase 56.35 in salary expenditures as defined under section 480.183, 56.36 subdivision 2, in excess of six percent; less 57.1 (iii) an amount equal to the county's share of transferred 57.2 fines collected by the district courts in the county during the 57.3 calendar year1998preceding certification. 57.4 The court and the county may, if both parties agree, 57.5 negotiate and certify an amount higher than the amount 57.6 calculated under this paragraph. 57.7 (c) For purposes of this subdivision, the adjustment in 57.8 paragraph (b), clause (ii), shall be equal to: 57.9 (1) the sum of the court administration expenditures as 57.10 defined under section 480.183, subdivision 3, required under 57.11 subdivision 4b, paragraph (a), plus the temporary aid payment 57.12 under subdivision 4c; multiplied by 57.13 (2) the difference between (i) the cumulative percentage 57.14 increase in actual and anticipated salary settlements for court 57.15 employees from July 1, 2001, until the date of the court 57.16 transfer and (ii) the percentage specified in subdivision 4b, 57.17 paragraph (a). 57.18(b)(d) Payments to a county under subdivision 2 or section 57.19 273.166 for the calendar year2000in which the state assumes 57.20 the cost of court administration as defined under section 57.21 480.183, subdivision 3, in the judicial district must be 57.22 permanently reduced by an amount equal to 75 percent of the net 57.23 cost to the state for assumption of district court costs as 57.24 certified in paragraph (a). 57.25(c)(e) Payments to a county under subdivision 2 or section 57.26 273.166 for the calendar year2001after the calendar year in 57.27 which the state assumes the cost of court administration as 57.28 defined under section 480.183, subdivision 3, in the judicial 57.29 district must be permanently reduced by an amount equal to 25 57.30 percent of the net cost to the state for assumption of district 57.31 court costs as certified in paragraph (a). 57.32(d)(f) Payments to a county under subdivision 2 for 57.33 calendar year 2001 are permanently increased by an amount equal 57.34 to 7.5 percent of the county's share of transferred fines 57.35 collected by the district courts in the county during calendar 57.36 year 1998, as determined under paragraph (a). If the amount 58.1 determined in paragraph (a) exceeds the amount of aid a county 58.2 is scheduled to be paid under subdivision 2 in 2000, then the 58.3 county shall not receive an aid increase under this paragraph. 58.4 (g) Payments to a county under subdivision 2 or section 58.5 273.166, for mandated services as defined in section 480.183, 58.6 subdivision 4, in the judicial district must be permanently 58.7 reduced in 2002 by an amount equal to the cost to the state for 58.8 assumption of mandated court services as defined in section 58.9 480.183, subdivision 4. The supreme court shall determine the 58.10 amount for each county and certify it to the commissioner of 58.11 revenue by June 20, 2001. 58.12[EFFECTIVE DATE.] This section is effective the day 58.13 following final enactment. 58.14 Sec. 13. Minnesota Statutes 2000, section 273.1398, is 58.15 amended by adding a subdivision to read: 58.16 Subd. 4b. [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 58.17 Until the costs of court administration as defined under section 58.18 480.183, subdivision 3, in a county have been transferred to the 58.19 state, each county in a judicial district transferring court 58.20 administration costs to state funding after July 1, 2001, shall 58.21 budget for the funding of these costs an amount at least equal 58.22 to the certified budget amount for calendar year 2001 multiplied 58.23 by six percent for 2001 to 2003 and by eight percent from 2004 58.24 to the year of the transfer. The county shall budget, fund, and 58.25 authorize expenditures not less than the amount calculated under 58.26 this paragraph, including the temporary aid amount under 58.27 subdivision 4c for maintenance of effort of administrative costs. 58.28 (b) By July 1, 2001, the court shall certify to each county 58.29 in the judicial district its cost of court administration as 58.30 defined under section 480.183, subdivision 3, based on 2001 58.31 certified budgets. In making that determination, the court 58.32 shall exclude the budget costs of the county for the following 58.33 categories: 58.34 (1) rent; 58.35 (2) examiner of titles; 58.36 (3) civil court appointed attorneys for civil matters; and 59.1 (4) hospitalization costs. 59.2[EFFECTIVE DATE.] This section is effective the day 59.3 following final enactment. 59.4 Sec. 14. Minnesota Statutes 2000, section 273.1398, is 59.5 amended by adding a subdivision to read: 59.6 Subd. 4c. [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For 59.7 calendar years 2004 and 2005, each county in a judicial district 59.8 that has not been transferred to the state by January 1 of that 59.9 year shall receive additional homestead and agricultural credit 59.10 aid. This amount is in addition to the amount calculated under 59.11 subdivision 2 and must not be included in the definition of 59.12 homestead and agricultural credit base under subdivision 1, 59.13 paragraph (j). The amount of additional aid is equal to the 59.14 difference between (1) the amount budgeted for court 59.15 administration costs in 2001 as determined under subdivision 4b, 59.16 paragraph (b), multiplied by the maintenance of effort percent 59.17 for the calendar year as determined under subdivision 4b, 59.18 paragraph (a), and (2) the amount calculated under subdivision 59.19 4b, paragraph (a), for calendar year 2003. This additional aid 59.20 must be used only to fund court administration expenditures as 59.21 defined in section 480.183, subdivision 3. This amount must be 59.22 added to the state court's base budget in the year when the 59.23 court in that judicial district in which the county is located 59.24 is transferred to the state. 59.25[EFFECTIVE DATE.] This section is effective the day 59.26 following final enactment. 59.27 Sec. 15. Minnesota Statutes 2000, section 273.1398, is 59.28 amended by adding a subdivision to read: 59.29 Subd. 4f. [AID OFFSET FOR OUT-OF-HOME PLACEMENT 59.30 COSTS.] For aid payable in 2002, each county's aid under 59.31 subdivision 2 must be permanently reduced by an amount equal to 59.32 the county's 2002 reimbursement for nonfederal expenditures for 59.33 out-of-home placements, as provided in section 245.775. The 59.34 counties shall provide all information requested by the 59.35 commissioner of human services necessary to allow the 59.36 commissioner to certify the previous three years' average 60.1 nonfederal costs to the commissioner of revenue by July 15, 60.2 2001. The aid reduction under this subdivision must be made 60.3 prior to any aid reductions for the state takeover of courts 60.4 contained in this article. 60.5[EFFECTIVE DATE.] This section is effective the day after 60.6 final enactment, for aids payable beginning in 2002. 60.7 Sec. 16. Minnesota Statutes 2000, section 273.1398, is 60.8 amended by adding a subdivision to read: 60.9 Subd. 4g. [AID OFFSET FOR DAY SERVICES.] (a) On or before 60.10 the later of July 1, 2002, or July 1 following the date when the 60.11 federal Health Care Financing Administration grants the waiver 60.12 request under section 27, the commissioner of human services 60.13 shall certify each county's projected costs for the nonfederal 60.14 share of medical assistance payments for day services for 60.15 developmentally disabled persons under the waiver authorized by 60.16 section 27. Cost estimates shall be based on the information 60.17 available in the most recent calendar year. 60.18 (b) Payments to a county under subdivision 2 or sections 60.19 273.166 or 477A.0122 for the calendar year following the 60.20 certification in paragraph (a) must be permanently reduced by an 60.21 amount equal to 75 percent of the costs certified in paragraph 60.22 (a). 60.23 (c) Payments to a county under subdivision 2 or sections 60.24 273.166 or 477A.0122 for the second calendar year following the 60.25 certification in paragraph (a) must be permanently reduced by an 60.26 amount equal to 25 percent of the costs certified in paragraph 60.27 (a). 60.28 Sec. 17. Minnesota Statutes 2000, section 299D.03, 60.29 subdivision 5, is amended to read: 60.30 Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines 60.31 and forfeited bail money, from traffic and motor vehicle law 60.32 violations, collected from persons apprehended or arrested by 60.33 officers of the state patrol, shall be paid by the person or 60.34 officer collecting the fines, forfeited bail money or 60.35 installments thereof, on or before the tenth day after the last 60.36 day of the month in which these moneys were collected, to the 61.1 county treasurer of the county where the violation occurred. 61.2 Three-eighths of these receipts shall be credited to the general 61.3 revenue fund of the county, except that in a county in a 61.4 judicial district under section 480.181, subdivision 1, 61.5 paragraph (b),as added in Laws 1999, chapter 216, article 7,61.6section 26,this three-eighths share must be transmitted to the 61.7 state treasurer for deposit in the state treasury and credited 61.8 to the general fund. The other five-eighths of these receipts 61.9 shall be transmitted by that officer to the state treasurer 61.10 andshall be credited as follows:61.11(1) In the fiscal year ending June 30, 1991, the first61.12$275,000 in money received by the state treasurer after June 4,61.131991, must be credited to the transportation services fund, and61.14the remainder in the fiscal year credited to the trunk highway61.15fund.61.16(2) In fiscal year 1992, the first $215,000 in money61.17received by the state treasurer in the fiscal year must be61.18credited to the transportation services fund, and the remainder61.19credited to the trunk highway fund.61.20(3) In fiscal year 1993 and subsequent years, the entire61.21amount received by the state treasurermust be credited to the 61.22 trunk highway fund. If, however, the violation occurs within a 61.23 municipality and the city attorney prosecutes the offense, and a 61.24 plea of not guilty is entered, one-third of the receipts shall 61.25 be credited to the general revenue fund of the county, one-third 61.26 of the receipts shall be paid to the municipality prosecuting 61.27 the offense, and one-third shall be transmitted to the state 61.28 treasurer as provided in this subdivision. All costs of 61.29 participation in a nationwide police communication system 61.30 chargeable to the state of Minnesota shall be paid from 61.31 appropriations for that purpose. 61.32 (b) Notwithstanding any other provisions of law, all fines 61.33 and forfeited bail money from violations of statutes governing 61.34 the maximum weight of motor vehicles, collected from persons 61.35 apprehended or arrested by employees of the state of Minnesota, 61.36 by means of stationary or portable scales operated by these 62.1 employees, shall be paid by the person or officer collecting the 62.2 fines or forfeited bail money, on or before the tenth day after 62.3 the last day of the month in which the collections were made, to 62.4 the county treasurer of the county where the violation 62.5 occurred. Five-eighths of these receipts shall be transmitted 62.6 by that officer to the state treasurer and shall be credited to 62.7 the highway user tax distribution fund. Three-eighths of these 62.8 receipts shall be credited to the general revenue fund of the 62.9 county, except that in a county in a judicial district under 62.10 section 480.181, subdivision 1, paragraph (b),as added in Laws62.111999, chapter 216, article 7, section 26,this three-eighths 62.12 share must be transmitted to the state treasurer for deposit in 62.13 the state treasury and credited to the general fund. 62.14[EFFECTIVE DATE.] This section is effective July 1, 2003, 62.15 in the second and fourth districts; July 1, 2004, in the first 62.16 and third districts; and July 1, 2005, in the sixth and tenth 62.17 districts. 62.18 Sec. 18. Minnesota Statutes 2000, section 357.021, 62.19 subdivision 1a, is amended to read: 62.20 Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 62.21 Every person, including the state of Minnesota and all bodies 62.22 politic and corporate, who shall transact any business in the 62.23 district court, shall pay to the court administrator of said 62.24 court the sundry fees prescribed in subdivision 2. Except as 62.25 provided in paragraph (d), the court administrator shall 62.26 transmit the fees monthly to the state treasurer for deposit in 62.27 the state treasury and credit to the general fund. 62.28 (b) In a county which has a screener-collector position, 62.29 fees paid by a county pursuant to this subdivision shall be 62.30 transmitted monthly to the county treasurer, who shall apply the 62.31 fees first to reimburse the county for the amount of the salary 62.32 paid for the screener-collector position. The balance of the 62.33 fees collected shall then be forwarded to the state treasurer 62.34 for deposit in the state treasury and credited to the general 62.35 fund. In a county in a judicial district under section 480.181, 62.36 subdivision 1, paragraph (b),as added in Laws 1999, chapter63.1216, article 7, section 26,which has a screener-collector 63.2 position, the fees paid by a county shall be transmitted monthly 63.3 to the state treasurer for deposit in the state treasury and 63.4 credited to the general fund. A screener-collector position for 63.5 purposes of this paragraph is an employee whose function is to 63.6 increase the collection of fines and to review the incomes of 63.7 potential clients of the public defender, in order to verify 63.8 eligibility for that service. 63.9 (c) No fee is required under this section from the public 63.10 authority or the party the public authority represents in an 63.11 action for: 63.12 (1) child support enforcement or modification, medical 63.13 assistance enforcement, or establishment of parentage in the 63.14 district court, or in a proceeding under section 484.702; 63.15 (2) civil commitment under chapter 253B; 63.16 (3) the appointment of a public conservator or public 63.17 guardian or any other action under chapters 252A and 525; 63.18 (4) wrongfully obtaining public assistance under section 63.19 256.98 or 256D.07, or recovery of overpayments of public 63.20 assistance; 63.21 (5) court relief under chapter 260; 63.22 (6) forfeiture of property under sections 169A.63 and 63.23 609.531 to 609.5317; 63.24 (7) recovery of amounts issued by political subdivisions or 63.25 public institutions under sections 246.52, 252.27, 256.045, 63.26 256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, 260B.331, 63.27 and 260C.331, or other sections referring to other forms of 63.28 public assistance; 63.29 (8) restitution under section 611A.04; or 63.30 (9) actions seeking monetary relief in favor of the state 63.31 pursuant to section 16D.14, subdivision 5. 63.32 (d) The fees collected for child support modifications 63.33 under subdivision 2, clause (13), must be transmitted to the 63.34 county treasurer for deposit in the county general fund. The 63.35 fees must be used by the county to pay for child support 63.36 enforcement efforts by county attorneys. 64.1[EFFECTIVE DATE.] This section is effective July 1, 2003, 64.2 in the second and fourth districts; July 1, 2004, in the first 64.3 and third districts; and July 1, 2005, in the sixth and tenth 64.4 districts. 64.5 Sec. 19. Minnesota Statutes 2000, section 480.181, 64.6 subdivision 1, is amended to read: 64.7 Subdivision 1. [STATE EMPLOYEES; COMPENSATION.] (a) 64.8 District court referees, judicial officers, court reporters, law 64.9 clerks, district administration staff, other than district 64.10 administration staff in the second and fourth judicial 64.11 districts, guardian ad litem program coordinators and 64.12 staff, staff court interpreters in the second judicial district, 64.13 and other court employees under paragraph (b), are state 64.14 employees and are governed by the judicial branch personnel 64.15 rules adopted by the supreme court. The supreme court, in 64.16 consultation with the conference of chief judges, shall 64.17 establish the salary range of these employees under the judicial 64.18 branch personnel rules. In establishing the salary ranges, the 64.19 supreme court shall consider differences in the cost of living 64.20 in different areas of the state. 64.21 (b) The court administrator and employees of the court 64.22 administrator who are in the fifth, seventh, eighth, or ninth 64.23 judicial district are state employees. The court administrator 64.24 and employees of the court administrator in the remaining 64.25 judicial districts become state employees as follows: 64.26 (1) effective July 1, 2003, for the second and fourth 64.27 judicial districts; 64.28 (2) effective July 1, 2004, for the first and third 64.29 judicial districts; and 64.30 (3) effective July 1, 2005, for the sixth and tenth 64.31 judicial districts. 64.32[EFFECTIVE DATE.] The amendment to paragraph (a) is 64.33 effective July 1, 2001. 64.34 Sec. 20. [480.1811] [POSTRETIREMENT BENEFIT COSTS.] 64.35 Where court administration, guardian ad litem, or 64.36 interpreter employees elect to retain county insurance benefits 65.1 under section 480.181 after July 1, 2001, and the county 65.2 provides those employees postretirement insurance benefits prior 65.3 to July 1, 2001, the county shall pay the postretirement cost of 65.4 those benefits. 65.5[EFFECTIVE DATE.] This section is effective the day 65.6 following final enactment. 65.7 Sec. 21. [480.183] [JUDICIAL DISTRICTS; SCHEDULED DATES OF 65.8 STATE TRANSFER; DEFINITION OF SERVICES.] 65.9 Subdivision 1. [DATE OF STATE TRANSFER.] (a) Court 65.10 administration expenditures as defined in this section for the 65.11 remaining judicial districts shall be transferred to the state 65.12 according to the following schedule: 65.13 (1) effective July 1, 2003, the second and fourth judicial 65.14 districts; 65.15 (2) effective July 1, 2004, the first and third judicial 65.16 districts; and 65.17 (3) effective July 1, 2005, the sixth and tenth judicial 65.18 districts. 65.19 (b) Mandated court services as defined in this section for 65.20 the remaining judicial districts shall be transferred to the 65.21 state effective July 1, 2001. 65.22 Subd. 2. [DEFINITION; SALARY EXPENDITURES.] "Salary 65.23 expenditures" means the salary of court administration 65.24 employees, including salaries, related fringe benefits, and 65.25 insurance, granted to court and other county employees in 65.26 collective bargaining or county pay plans. 65.27 Subd. 3. [DEFINITION; COURT ADMINISTRATION 65.28 EXPENDITURES.] "Court administration expenditures" means the 65.29 total expenditures of (1) salary expenditures as defined under 65.30 subdivision 2 and (2) other related administrative operating 65.31 expenditures. 65.32 Subd. 4. [DEFINITION; MANDATED COURT SERVICES.] "Mandated 65.33 court services" means services for: 65.34 (1) guardian ad litem; 65.35 (2) interpreter; 65.36 (3) Minnesota Rules, parts 9525.0900 to 9525.1020 (rule 66.1 20); 66.2 (4) civil commitment examination, not including 66.3 hospitalization or treatment costs, for mental commitments and 66.4 related proceedings under chapter 253B; and 66.5 (5) in forma pauperis costs. 66.6[EFFECTIVE DATE.] This section is effective the day 66.7 following final enactment. 66.8 Sec. 22. [484.77] [FACILITIES.] 66.9 The county board in each county shall provide suitable 66.10 facilities for court purposes at the county seat, or at other 66.11 locations agreed upon by the district court and the county. The 66.12 county shall also be responsible for the costs of renting, 66.13 maintaining, operating, remodeling, insuring, and renovating 66.14 those facilities occupied by the court. 66.15[EFFECTIVE DATE.] This section is effective the day 66.16 following final enactment. 66.17 Sec. 23. Minnesota Statutes 2000, section 487.33, 66.18 subdivision 5, is amended to read: 66.19 Subd. 5. [ALLOCATION.] The court administrator shall 66.20 provide the county treasurer with the name of the municipality 66.21 or other subdivision of government where the offense was 66.22 committed which employed or provided by contract the arresting 66.23 or apprehending officer and the name of the municipality or 66.24 other subdivision of government which employed the prosecuting 66.25 attorney or otherwise provided for prosecution of the offense 66.26 for each fine or penalty and the total amount of fines or 66.27 penalties collected for each municipality or other subdivision 66.28 of government. On or before the last day of each month, the 66.29 county treasurer shall pay over to the treasurer of each 66.30 municipality or subdivision of government within the county all 66.31 fines or penalties for parking violations for which complaints 66.32 and warrants have not been issued and one-third of all fines or 66.33 penalties collected during the previous month for offenses 66.34 committed within the municipality or subdivision of government 66.35 from persons arrested or issued citations by officers employed 66.36 by the municipality or subdivision or provided by the 67.1 municipality or subdivision by contract. An additional 67.2 one-third of all fines or penalties shall be paid to the 67.3 municipality or subdivision of government providing prosecution 67.4 of offenses of the type for which the fine or penalty is 67.5 collected occurring within the municipality or subdivision, 67.6 imposed for violations of state statute or of an ordinance, 67.7 charter provision, rule or regulation of a city whether or not a 67.8 guilty plea is entered or bail is forfeited. Except as provided 67.9 in section 299D.03, subdivision 5, or as otherwise provided by 67.10 law, all other fines and forfeitures and all fees and statutory 67.11 court costs collected by the court administrator shall be paid 67.12 to the county treasurer of the county in which the funds were 67.13 collected who shall dispense them as provided by law. In a 67.14 county in a judicial district under section 480.181, subdivision 67.15 1, paragraph (b),as added in Laws 1999, chapter 216, article 7,67.16section 26,all other fines, forfeitures, fees, and statutory 67.17 court costs must be paid to the state treasurer for deposit in 67.18 the state treasury and credited to the general fund. 67.19[EFFECTIVE DATE.] This section is effective July 1, 2003, 67.20 in the second and fourth districts; July 1, 2004, in the first 67.21 and third districts; and July 1, 2005, in the sixth and tenth 67.22 districts. 67.23 Sec. 24. Minnesota Statutes 2000, section 488A.03, is 67.24 amended by adding a subdivision to read: 67.25 Subd. 14. [REVENUES TO GENERAL FUND.] In a judicial 67.26 district under section 480.181, subdivision 1, paragraph (b), 67.27 the county's share of all fines, forfeitures, fees, and 67.28 statutory court costs must be paid to the state treasurer for 67.29 deposit in the state treasury and credited to the general fund. 67.30 Sec. 25. Minnesota Statutes 2000, section 488A.20, is 67.31 amended by adding a subdivision to read: 67.32 Subd. 8. [REVENUES TO GENERAL FUND.] In a judicial 67.33 district under section 480.181, subdivision 1, paragraph (b), 67.34 the county's share of all fines, forfeitures, fees, and 67.35 statutory court costs must be paid to the state treasurer for 67.36 deposit in the state treasury and credited to the general fund. 68.1 Sec. 26. Minnesota Statutes 2000, section 574.34, 68.2 subdivision 1, is amended to read: 68.3 Subdivision 1. [GENERAL.] Fines and forfeitures not 68.4 specially granted or appropriated by law shall be paid into the 68.5 treasury of the county where they are incurred, except in a 68.6 county in a judicial district under section 480.181, subdivision 68.7 1, paragraph (b),as added in Laws 1999, chapter 216, article 7,68.8section 26,the fines and forfeitures must be deposited in the 68.9 state treasury and credited to the general fund. 68.10[EFFECTIVE DATE.] This section is effective July 1, 2003, 68.11 in the second and fourth districts; July 1, 2004, in the first 68.12 and third districts; and July 1, 2005, in the sixth and tenth 68.13 districts. 68.14 Sec. 27. [FUNDING FOR DAY SERVICES PROGRAMS.] 68.15 Subdivision 1. [FEDERAL WAIVER REQUESTS.] The commissioner 68.16 of human services shall submit to the federal Health Care 68.17 Financing Administration by September 1, 2001, a request for a 68.18 home and community-based services waiver for day services, 68.19 including: community inclusion, supported employment, and day 68.20 training and habilitation services defined in Minnesota 68.21 Statutes, section 252.41, subdivision 3, clause (1), for persons 68.22 eligible for the waiver under Minnesota Statutes, section 68.23 256B.092. 68.24 Subd. 2. [STATE FUNDING OF NONFEDERAL SHARE.] On the later 68.25 of July 1, 2003, or July 1 of the second calendar year after the 68.26 date when the federal Health Care Financing Administration 68.27 grants the waiver request under subdivision 1, the state must 68.28 assume the nonfederal share of medical assistance costs for day 68.29 training for persons receiving services under the day services 68.30 waiver under subdivision 1. The county shall be reimbursed 68.31 using the procedures set out in Minnesota Statutes, section 68.32 256.025, subdivision 3. 68.33 Subd. 3. [APPROPRIATION.] An amount sufficient to pay the 68.34 costs under this section is annually appropriated from the 68.35 general fund to the commissioner of human services. 68.36 Sec. 28. [TRANSITIONAL PROVISIONS.] 69.1 Subdivision 1. [TRANSFER OF PROPERTY.] The title to 69.2 personal property that is used by employees being transferred to 69.3 state employment under this article in the scope of their 69.4 employment is transferred to the state when they become state 69.5 employees. 69.6 Subd. 2. [RULES.] The supreme court, in consultation with 69.7 the conference of chief judges, may adopt rules to implement 69.8 this article. 69.9 Subd. 3. [BUDGETS.] Notwithstanding any law to the 69.10 contrary, the fiscal year budgets for the year in which the 69.11 state assumes the cost of court administration in the judicial 69.12 district for the court administrators' offices being transferred 69.13 to state employment under this article, including the number of 69.14 complement positions and salaries, must be submitted by the 69.15 court administrators to the supreme court. The budgets must 69.16 include the current levels of funding and positions at the time 69.17 of submission as well as any requests for increases in funding 69.18 and positions. 69.19[EFFECTIVE DATE.] This section is effective July 1, 2003, 69.20 in the second and fourth districts; July 1, 2004, in the first 69.21 and third districts; and July 1, 2005, in the sixth and tenth 69.22 districts. 69.23 Sec. 29. [APPROPRIATIONS FOR COURT COSTS.] 69.24 (a) The supreme court general fund appropriation base is 69.25 increased by $8,878,000 in fiscal year 2002 to be used to pay 69.26 the costs of mandated court services assumed by the state under 69.27 Minnesota Statutes, section 480.183, subdivision 1, paragraph 69.28 (b). 69.29 (b) For each of calendar years 2003 and 2004, $1,500,000 is 69.30 appropriated from the general fund to the supreme court to fund 69.31 court takeover equity adjustments. This amount must be added to 69.32 the court base budget in subsequent fiscal years. 69.33 ARTICLE 4 69.34 INDIVIDUAL INCOME TAX 69.35 Section 1. Minnesota Statutes 2000, section 10A.31, 69.36 subdivision 3, is amended to read: 70.1 Subd. 3. [FORM.] The commissioner of revenue must provide 70.2 on the first page of the income tax form and the renter and 70.3 homeowner property tax refund return a space for the individual 70.4 to indicate a wish to pay $5 ($10 if filing a joint return) from 70.5 the general fund of the state to finance election campaigns. 70.6 The front page of the form must also containlanguage prepared70.7by the commissioner that permitsall instructions and 70.8 information necessary to enable the individual to direct the 70.9 state to pay the $5 (or $10 if filing a joint return) to: (1) 70.10 one of the major political parties; (2) any minor political 70.11 party that qualifies under subdivision 3a; or (3) all qualifying 70.12 candidates as provided by subdivision 7. The renter and 70.13 homeowner property tax refund return must include instructions 70.14 that the individual filing the return may designate $5 on the 70.15 return only if the individual has not designated $5 on the 70.16 income tax return. The information required under this 70.17 subdivision must be printed in a type size no smaller than that 70.18 which is used for tax computation steps on the form. 70.19 Sec. 2. Minnesota Statutes 2000, section 289A.08, 70.20 subdivision 11, is amended to read: 70.21 Subd. 11. [INFORMATION INCLUDED IN INCOME TAX RETURN.] The 70.22 return must state the name of the taxpayer, or taxpayers, if the 70.23 return is a joint return, and the address of the taxpayer in the 70.24 same name or names and same address as the taxpayer has used in 70.25 making the taxpayer's income tax return to the United States, 70.26 and must state the social security number of the taxpayer, or 70.27 taxpayers, if a social security number has been issued by the 70.28 United States with respect to the taxpayers, and must state the 70.29 amount of the taxable income of the taxpayer as it appears on 70.30 the federal return for the taxable year to which the Minnesota 70.31 state return applies. The return must also include the address 70.32 of the principal residence of the taxpayer as of the last day of 70.33 the taxable year, which may be used by the commissioner of 70.34 revenue to provide aggregate data but not to provide information 70.35 that would identify an individual taxpayer. The taxpayer must 70.36 attach to the taxpayer's Minnesota state income tax return a 71.1 copy of the federal income tax return that the taxpayer has 71.2 filed or is about to file for the period, unless the taxpayer is 71.3 eligible to telefile the federal return and does file the 71.4 Minnesota return by telefiling. 71.5 Sec. 3. Minnesota Statutes 2000, section 290.01, 71.6 subdivision 19b, is amended to read: 71.7 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 71.8 individuals, estates, and trusts, there shall be subtracted from 71.9 federal taxable income: 71.10 (1) interest income on obligations of any authority, 71.11 commission, or instrumentality of the United States to the 71.12 extent includable in taxable income for federal income tax 71.13 purposes but exempt from state income tax under the laws of the 71.14 United States; 71.15 (2) if included in federal taxable income, the amount of 71.16 any overpayment of income tax to Minnesota or to any other 71.17 state, for any previous taxable year, whether the amount is 71.18 received as a refund or as a credit to another taxable year's 71.19 income tax liability; 71.20 (3) the amount paid to others, less the credit allowed 71.21 under section 290.0674, not to exceed $1,625 for each qualifying 71.22 child in a prekindergarten educational program or in grades 71.23 kindergarten to 6, and $2,500 for each qualifying child in 71.24 grades 7 to 12, for tuition, textbooks, and transportation of 71.25 each qualifying child in attending an elementary or secondary 71.26 school situated in Minnesota, North Dakota, South Dakota, Iowa, 71.27 or Wisconsin, wherein a resident of this state may legally 71.28 fulfill the state's compulsory attendance laws, which is not 71.29 operated for profit, and which adheres to the provisions of the 71.30 Civil Rights Act of 1964 and chapter 363, or for fees charged 71.31 for enrollment in a prekindergarten educational program for 71.32 which the taxpayer does not receive any other tax deduction or 71.33 credit or any reimbursement. For the purposes of this clause, 71.34 "tuition" includes fees or tuition as defined in section 71.35 290.0674, subdivision 1, clause (1). As used in this clause, 71.36 "prekindergarten educational program" means: 72.1 (i) prekindergarten programs established by a school 72.2 district under chapter 124D; 72.3 (ii) preschools, nursery schools, and early childhood 72.4 development programs licensed by the department of human 72.5 services and accredited by the National Association for the 72.6 Education of Young Children or National Early Childhood Program 72.7 Accreditation; 72.8 (iii) Montessori programs affiliated with or accredited by 72.9 the American Montessori Society or American Montessori 72.10 International; and 72.11 (iv) child care programs provided by family day care 72.12 providers holding a current early childhood development 72.13 credential approved by the commissioner of children, families, 72.14 and learning. As used in this clause, "textbooks" includes 72.15 books and other instructional materials and equipment used in 72.16 elementary and secondary schools in teaching only those subjects 72.17 legally and commonly taught in public elementary and secondary 72.18 schools in this state. Equipment expenses qualifying for 72.19 deduction includes expenses as defined and limited in section 72.20 290.0674, subdivision 1,clauseclauses (3) and (5). "Textbooks" 72.21 does not include instructional books and materials used in the 72.22 teaching of religious tenets, doctrines, or worship, the purpose 72.23 of which is to instill such tenets, doctrines, or worship, nor 72.24 does it include books or materials for, or transportation to, 72.25 extracurricular activities including sporting events, musical or 72.26 dramatic events, speech activities, driver's education, or 72.27 similar programs. For purposes of the subtraction provided by 72.28 this clause, "qualifying child" has the meaning given in section 72.29 32(c)(3) of the Internal Revenue Code; 72.30 (4) contributions made in taxable years beginning after 72.31 December 31, 1981, and before January 1, 1985, to a qualified 72.32 governmental pension plan, an individual retirement account, 72.33 simplified employee pension, or qualified plan covering a 72.34 self-employed person that were included in Minnesota gross 72.35 income in the taxable year for which the contributions were made 72.36 but were deducted or were not included in the computation of 73.1 federal adjusted gross income, less any amount allowed to be 73.2 subtracted as a distribution under this subdivision or a 73.3 predecessor provision in taxable years that began before January 73.4 1, 2000. This subtraction applies only for taxable years 73.5 beginning after December 31, 1999, and before January 1, 2001. 73.6 If an individual's subtraction under this clause exceeds the 73.7 individual's taxable income, the excess may be carried forward 73.8 to taxable years beginning after December 31, 2000, and before 73.9 January 1, 2002; 73.10 (5) income as provided under section 290.0802; 73.11 (6) the amount of unrecovered accelerated cost recovery 73.12 system deductions allowed under subdivision 19g; 73.13 (7) to the extent included in federal adjusted gross 73.14 income, income realized on disposition of property exempt from 73.15 tax under section 290.491; 73.16 (8) to the extent not deducted in determining federal 73.17 taxable income or used to claim the long-term care insurance 73.18 credit under section 290.0672, the amount paid for health 73.19 insurance of self-employed individuals as determined under 73.20 section 162(l) of the Internal Revenue Code, except that the 73.21 percent limit does not apply. If the individual deducted 73.22 insurance payments under section 213 of the Internal Revenue 73.23 Code of 1986, the subtraction under this clause must be reduced 73.24 by the lesser of: 73.25 (i) the total itemized deductions allowed under section 73.26 63(d) of the Internal Revenue Code, less state, local, and 73.27 foreign income taxes deductible under section 164 of the 73.28 Internal Revenue Code and the standard deduction under section 73.29 63(c) of the Internal Revenue Code; or 73.30 (ii) the lesser of (A) the amount of insurance qualifying 73.31 as "medical care" under section 213(d) of the Internal Revenue 73.32 Code to the extent not deducted under section 162(1) of the 73.33 Internal Revenue Code or excluded from income or (B) the total 73.34 amount deductible for medical care under section 213(a); 73.35 (9) the exemption amount allowed under Laws 1995, chapter 73.36 255, article 3, section 2, subdivision 3; 74.1 (10) to the extent included in federal taxable income, 74.2 postservice benefits for youth community service under section 74.3 124D.42 for volunteer service under United States Code, title 74.4 42, sections 12601 to 12604; 74.5 (11) to the extent not deducted in determining federal 74.6 taxable income by an individual who does not itemize deductions 74.7 for federal income tax purposes for the taxable year, an amount 74.8 equal to 50 percent of the excess of charitable contributions 74.9 allowable as a deduction for the taxable year under section 74.10 170(a) of the Internal Revenue Code over $500; 74.11 (12) to the extent included in federal taxable income, 74.12 holocaust victims' settlement payments for any injury incurred 74.13 as a result of the holocaust, if received by an individual who 74.14 was persecuted for racial or religious reasons by Nazi Germany 74.15 or any other Axis regime or an heir of such a person; and 74.16 (13) for taxable years beginning before January 1, 2008, 74.17 the amount of the federal small ethanol producer credit allowed 74.18 under section 40(a)(3) of the Internal Revenue Code which is 74.19 included in gross income under section 87 of the Internal 74.20 Revenue Code. 74.21[EFFECTIVE DATE.] This section is effective for taxable 74.22 years beginning after December 31, 2000. 74.23 Sec. 4. Minnesota Statutes 2000, section 290.06, is 74.24 amended by adding a subdivision to read: 74.25 Subd. 29. [CREDIT FOR ADOPTION EXPENSES.] (a) A taxpayer 74.26 may take a credit against the tax due under this chapter equal 74.27 to 80 percent of the amount of qualified adoption expenses paid 74.28 or incurred by the taxpayer as provided in this subdivision. 74.29 (b) "Qualified adoption expenses" means the following 74.30 expenses to the extent they are directly related to the process 74.31 of adopting a child who is, at the time of the adoption, under 74.32 the age of 18 or is physically or mentally incapable of 74.33 self-care and who is not the stepchild of the adoptive parent: 74.34 (1) fees for required services of the department of human 74.35 services or through a licensed adoption agency or fees imposed 74.36 by any other governmental agency in connection with the 75.1 adoption; 75.2 (2) travel-related expenses for the adoptive family and 75.3 child; and 75.4 (3) medical fees and expenses that are not reimbursed by 75.5 insurance, including medical expenses of the child and birth 75.6 mother during the pregnancy and birth. 75.7 (c) The credit must be taken in the taxable year during 75.8 which the adoption becomes final. 75.9 (d) The maximum amount of the credit that may be taken for 75.10 all taxable years for the adoption of one child is $5,000 or, in 75.11 the case of the adoption of a special needs child, $8,000. For 75.12 purposes of this subdivision, a "special needs child" is a child 75.13 who meets the requirements described in section 259.67, 75.14 subdivision 1 or 4. 75.15 (e) If the amount of the credit for which a taxpayer is 75.16 eligible under this subdivision exceeds the taxpayer's liability 75.17 for tax for the taxable year, the excess may be carried over to 75.18 each of the five taxable years succeeding the taxable year. The 75.19 entire amount of the excess unused credit for the taxable year 75.20 shall be carried first to the earliest of the taxable years to 75.21 which the credit may be carried and then to each successive year 75.22 to which the credit may be carried. The amount of the unused 75.23 credit which may be added under this paragraph must not exceed 75.24 the taxpayer's liability for tax less the credit for the taxable 75.25 year. 75.26 (f) No credit may be taken under this subdivision for any 75.27 expense for which a deduction or credit is allowed under any 75.28 other provision of this chapter or section 23 of the Internal 75.29 Revenue Code of 1986, as amended through December 31, 2000. No 75.30 credit may be taken under this subdivision for any expense to 75.31 the extent that funds for the expense are received under any 75.32 federal, state, or local government program or an employer 75.33 reimbursement program. 75.34[EFFECTIVE DATE.] This section is effective for taxable 75.35 years beginning after December 31, 2000. 75.36 Sec. 5. Minnesota Statutes 2000, section 290.06, is 76.1 amended by adding a subdivision to read: 76.2 Subd. 30. [CREDIT FOR CONVENIENCE STORE SECURITY 76.3 CAMERAS.] (a) A taxpayer may take a credit against the tax due 76.4 under this chapter in an amount equal to 25 percent of the cost 76.5 incurred by the taxpayer to purchase and install video security 76.6 equipment that meet or exceed the minimum requirements in 76.7 section 299G.19, subdivision 2, in a convenience store as 76.8 defined in section 299G.19, subdivision 1. The amount of the 76.9 credit may not exceed $5,000 per convenience store, and the 76.10 credit may be taken in only one taxable year by a taxpayer. 76.11 (b) If the credit provided under this subdivision exceeds 76.12 the tax liability of the taxpayer for the taxable year, the 76.13 excess amount of the credit may be carried over to each of the 76.14 five taxable years succeeding the taxable year. The entire 76.15 amount of the credit must be carried to the earliest taxable 76.16 year to which the amount may be carried. The unused portion of 76.17 the credit must be carried to the following taxable year. No 76.18 credit may be carried to a taxable year more than five years 76.19 after the taxable year in which the credit was earned. 76.20 (c) The credit provided in this subdivision is available 76.21 for taxable years beginning after December 31, 2000, and before 76.22 January 1, 2006. 76.23 Sec. 6. Minnesota Statutes 2000, section 290.0674, 76.24 subdivision 1, is amended to read: 76.25 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 76.26 a credit against the tax imposed by this chapter in an amount 76.27 equal to 80 percent of the amount paid for education-related 76.28 expenses for a qualifying child in a prekindergarten educational 76.29 program or in kindergarten through grade 12. For purposes of 76.30 this section, "education-related expenses" means: 76.31 (1) fees or tuition for instruction by an instructorunder76.32 who meets one of the requirements of section 120A.22, 76.33 subdivision 10, clause (1), (2), (3), (4), or (5), orbywho is 76.34 a member of the Minnesota music teachers association, and is not 76.35 a lineal ancestor or sibling of the dependent for instruction 76.36 outside the regular school day or school year, including 77.1 tutoring, driver's education offered as part of school 77.2 curriculum, regardless of whether it is taken from a public or 77.3 private entity or summer camps, in grade or age appropriate 77.4 curricula that supplement curricula and instruction available 77.5 during the regular school year, that assists a dependent to 77.6 improve knowledge of core curriculum areas or to expand 77.7 knowledge and skills under the graduation rule under section 77.8 120B.02 and that do not include the teaching of religious 77.9 tenets, doctrines, or worship, the purpose of which is to 77.10 instill such tenets, doctrines, or worship, and fees for 77.11 enrollment in a prekindergarten educational program as defined 77.12 in section 290.01, subdivision 19b; 77.13 (2) expenses for textbooks, including books and other 77.14 instructional materials and equipment used in elementary and 77.15 secondary schools in teaching only those subjects legally and 77.16 commonly taught in public elementary and secondary schools in 77.17 this state. "Textbooks" does not include instructional books 77.18 and materials used in the teaching of religious tenets, 77.19 doctrines, or worship, the purpose of which is to instill such 77.20 tenets, doctrines, or worship, nor does it include books or 77.21 materials for extracurricular activities including sporting 77.22 events, musical or dramatic events, speech activities, driver's 77.23 education, or similar programs; 77.24 (3) a maximum expense of $200 per family for personal 77.25 computer hardware, excluding single purpose processors, and 77.26 educational software that assists a dependent to improve 77.27 knowledge of core curriculum areas or to expand knowledge and 77.28 skills under the graduation rule under section 120B.02 purchased 77.29 for use in the taxpayer's home and not used in a trade or 77.30 business regardless of whether the computer is required by the 77.31 dependent's school;and77.32 (4) the amount paid to others for transportation of a 77.33 qualifying child attending an elementary or secondary school 77.34 situated in Minnesota, North Dakota, South Dakota, Iowa, or 77.35 Wisconsin, wherein a resident of this state may legally fulfill 77.36 the state's compulsory attendance laws, which is not operated 78.1 for profit, and which adheres to the provisions of the Civil 78.2 Rights Act of 1964 and chapter 363; and 78.3 (5) expenses for the purchase or lease of musical 78.4 instruments used in classes offered as part of the school 78.5 curriculum, provided that expenses for purchases qualify only if 78.6 purchased for a child in kindergarten through grade 8. 78.7 For purposes of this section, "qualifying child" has the 78.8 meaning given in section 32(c)(3) of the Internal Revenue Code. 78.9[EFFECTIVE DATE.] This section is effective for taxable 78.10 years beginning after December 31, 2000, except that the 78.11 reduction of the rate of the credit is effective for taxable 78.12 years beginning after December 31, 2001. 78.13 Sec. 7. Minnesota Statutes 2000, section 290.0674, is 78.14 amended by adding a subdivision to read: 78.15 Subd. 2a. [ASSIGNMENT OF CREDIT.] A taxpayer who receives 78.16 a credit under this section may assign all or a part of the 78.17 refundable portion of the credit to a state or federally 78.18 chartered bank, savings bank, savings association, or credit 78.19 union, if the taxpayer provides proof of an expenditure that 78.20 qualifies for the credit under this section from a vendor that 78.21 has been certified for this purpose by the commissioner of 78.22 children, families, and learning. 78.23[EFFECTIVE DATE.] This section is effective for taxable 78.24 years beginning after December 31, 2001, and before January 1, 78.25 2004. 78.26 Sec. 8. Minnesota Statutes 2000, section 290.0675, 78.27 subdivision 3, is amended to read: 78.28 Subd. 3. [CREDIT AMOUNT.] The credit amount isas shown in78.29the table in this subdivision, based on the couple's taxable78.30income for the tax year and on the earned income of the78.31lesser-earning spousethe difference between the tax on the 78.32 couple's joint Minnesota taxable income under the rates in 78.33 section 290.06, subdivision 2c, paragraph (a), and the sum of 78.34 the tax under the rates of section 290.06, subdivision 2c, 78.35 paragraph (b), on the earned income of the lesser-earning 78.36 spouse, and the tax under the rates of section 290.06, 79.1 subdivision 2c, paragraph (b), on the couple's joint Minnesota 79.2 taxable income, minus the earned income of the lesser-earning 79.3 spouse. 79.4Credit ForCredit For79.5Earned Income ofTaxable IncomeTaxable Income79.6Lesser Earning Spouse$25,680-$102,029$102,030-over79.7$14,250 - $15,249$7$079.8$15,250 - $16,249$24$079.9$16,250 - $17,249$41$079.10$17,250 - $18,249$58$079.11$18,250 - $19,249$75$079.12$19,250 - $20,249$92$079.13$20,250 - $21,249$109$079.14$21,250 - $22,249$126$079.15$22,250 - $23,249$143$079.16$23,250 - $24,249$160$079.17$24,250 - $25,249$161$079.18$25,250 - $26,249$161$079.19$26,250 - $27,249$161$079.20$27,250 - $28,249$161$079.21$28,250 - $29,249$161$079.22$29,250 - $30,249$161$079.23$30,250 - $31,249$161$079.24$31,250 - $32,249$161$679.25$32,250 - $33,249$161$1479.26$33,250 - $34,249$161$2279.27$34,250 - $35,249$161$3079.28$35,250 - $36,249$161$3879.29$36,250 - $37,249$161$4679.30$37,250 - $38,249$161$5479.31$38,250 - $39,249$161$6279.32$39,250 - $40,249$161$7079.33$40,250 - $41,249$161$7879.34$41,250 - $42,249$161$8679.35$42,250 - $43,249$161$9479.36$43,250 - $44,249$161$10280.1$44,250 - $45,249$161$11080.2$45,250 - $46,249$161$11880.3$46,250 - $47,249$161$12680.4$47,250 - $48,249$161$13480.5$48,250 - $49,249$161$14280.6$49,250 - $50,249$161$15080.7$50,250 - $51,249$161$15880.8$51,250 - $52,249$161$16680.9$52,250 - $53,249$161$17480.10$53,250 - $54,249$161$18280.11$54,250 - $55,249$161$19080.12$55,250 - $56,249$161$19880.13$56,250 - $57,249$161$20680.14$57,250 - $58,249$161$21480.15$58,250 - $59,249$161$22280.16$59,250 - $60,249$161$23080.17$60,250 - $61,249$161$23880.18$61,250 - $62,249$161$24680.19$62,250 - $63,249$161$25480.20$63,250 - $64,249$161$26280.21$64,250 and over$161$26880.22 For taxable years beginning after December 31, 2001, the 80.23 commissioner of revenue shall construct and make available to 80.24 taxpayers a comprehensive table showing the credit under this 80.25 section at brackets of earnings of the lesser-earning spouse and 80.26 joint taxable income. The brackets of earnings shall not be 80.27 more than $2,000. 80.28 For taxable years beginning after December 31,20002002, 80.29 the commissioner shall update the table as necessary to provide 80.30 a credit that reflects the relationship between the marginal tax 80.31 rates imposed under section 290.06, subdivision 2c. 80.32[EFFECTIVE DATE.] This section is effective for tax years 80.33 beginning after December 31, 2000. 80.34 Sec. 9. [290.0676] [CREDIT FOR LAND DONATED FOR 80.35 CONSERVATION PURPOSES.] 80.36 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 81.1 section, the following terms have the meaning given. 81.2 (b) "Interest in real property" means fee title or 81.3 qualified real property interest as defined in section 170(h) of 81.4 the Internal Revenue Code and the United States Treasury 81.5 Regulations promulgated thereunder. 81.6 (c) "Fair market value" of an interest in real property 81.7 means the value as determined by a "qualified appraisal" 81.8 prepared by a "qualified appraiser" as those terms are defined 81.9 in United States Treasury Regulations, section 1.170A-13, as 81.10 amended through December 31, 2000. If the taxpayer does not 81.11 obtain an appraisal, "fair market value" means the estimated 81.12 market value of the property as determined by the assessor for 81.13 property tax purposes. 81.14 (d) "Discount of the sale price" means the difference 81.15 between the fair market value of an interest in real property at 81.16 the time of sale and the sale price, if the price the property 81.17 is sold for is lower. 81.18 (e) "Conservation purposes" means the conservation purposes 81.19 as defined in section 170(h)(4)(A)(i), (ii), and (iii) of the 81.20 Internal Revenue Code. 81.21 Subd. 2. [CREDIT ALLOWED.] A taxpayer who donates an 81.22 interest in real property in this state for conservation 81.23 purposes to a qualified organization described in subdivision 3, 81.24 paragraph (a), may take a credit against the tax imposed by this 81.25 chapter in an amount equal to 50 percent of the fair market 81.26 value of the interest in real property. A taxpayer who sells an 81.27 interest in real property at a discount for conservation 81.28 purposes may take a credit against the tax imposed by this 81.29 chapter in an amount equal to 50 percent of the value of the 81.30 discount of the sale price in the interest in real property. 81.31 Subd. 3. [QUALIFICATION.] (a) To qualify for a credit 81.32 under this section, the taxpayer must convey the interest in 81.33 real property to (1) the state of Minnesota, a local government 81.34 conservation agency, or a special purpose unit of government, or 81.35 (2) a private organization as provided in section 501(c) of the 81.36 Internal Revenue Code that: 82.1 (i) meets the requirements of section 170(h)(3) of the 82.2 Internal Revenue Code; and 82.3 (ii) is organized and operated for one of the conservation 82.4 purposes specified in section 170(h)(4)(A)(i), (ii), and (iii) 82.5 of the Internal Revenue Code. 82.6 (b) A taxpayer claiming the credit under this section shall 82.7 attach the following to the tax returns on which the credit is 82.8 claimed: 82.9 (1) a certificate of acceptance from an organization 82.10 described in paragraph (a) verifying that the organization has 82.11 accepted the contribution; and 82.12 (2) a copy of a qualified appraisal by a qualified 82.13 appraiser as those terms are defined in United States Treasury 82.14 Regulations, section 1.170A-13, as amended through December 31, 82.15 2000, or a copy of the most recent notice of estimated market 82.16 value provided by the assessor. 82.17 (c) Conveyances of real property for open space for the 82.18 purpose of fulfilling density requirements or other requirements 82.19 to obtain subdivision or building permits shall not be eligible 82.20 for a credit under this section. 82.21 Subd. 4. [LIMITATION; CARRYOVER.] (a) The credit for the 82.22 taxable year shall not exceed the taxpayer's liability for tax 82.23 before the credit under this section or $100,000, whichever is 82.24 less. 82.25 (b) If the amount of the credit determined under this 82.26 section for any taxable year exceeds the limitation in paragraph 82.27 (a), the excess shall be a carryover to each of the five 82.28 succeeding taxable years. All of the excess unused credit for 82.29 the taxable year must be carried first to the earliest of the 82.30 taxable years to which the credit may be carried and then to 82.31 each successive year to which the credit may be carried. The 82.32 unused credit that may be added under this paragraph in any year 82.33 may not exceed the lesser of the taxpayer's liability for tax 82.34 less the land donation credit for the taxable year or $100,000. 82.35 Subd. 5. [TRANSFERABILITY OF CREDIT.] (a) A taxpayer may 82.36 transfer to another taxpayer all or part of the credit allowed 83.1 under this section. A taxpayer who receives a credit 83.2 transferred under this section may use the transferred credit 83.3 subject to the same limitations and conditions as if that 83.4 taxpayer had made the original qualified donation. 83.5 (b) A taxpayer may transfer only the portion of the unused 83.6 credit that the taxpayer has not applied against the tax imposed 83.7 by this chapter. For any taxable year in which a credit is 83.8 transferred under this section, the taxpayer transferring the 83.9 credit and the taxpayer receiving the credit shall both file 83.10 written statements with their income tax returns specifying the 83.11 amount of the credit that has been transferred. A taxpayer may 83.12 not claim a credit transferred under this section unless the 83.13 written statement of the taxpayer transferring the credit 83.14 verifies the amount of the tax credit claimed. 83.15[EFFECTIVE DATE.] This section is effective for taxable 83.16 years beginning after December 31, 2000. 83.17 Sec. 10. [290.0679] [CREDIT FOR HISTORIC STRUCTURE 83.18 REHABILITATION.] 83.19 Subdivision 1. [DEFINITIONS.] (a) As used in this section, 83.20 the terms defined in this subdivision have the meanings given. 83.21 (b) "Certified historic structure" means a property located 83.22 in Minnesota and listed individually on the National Register of 83.23 Historic Places or a historic property designated by either a 83.24 certified local government or a heritage preservation commission 83.25 created under the National Historic Preservation Act of 1966 and 83.26 whose designation is approved by the state historic preservation 83.27 officer. 83.28 (c) "Eligible property" means a certified historic 83.29 structure or a structure in a certified historic district that 83.30 is offered or used for residential or business purposes. 83.31 (d) "Structure in a certified historic district" means a 83.32 structure located in Minnesota which is certified by the state 83.33 historic preservation office as contributing to the historic 83.34 significance of a certified historic district listed on the 83.35 National Register of Historic Places or a local district that 83.36 has been certified by the United States Department of the 84.1 Interior. 84.2 Subd. 2. [CREDIT ALLOWED.] A taxpayer who incurs costs for 84.3 the rehabilitation of eligible property in a taxable year may 84.4 take a credit against the tax imposed under this chapter in an 84.5 amount equal to 25 percent of the total costs of 84.6 rehabilitation. Costs of rehabilitation include, but are not 84.7 limited to, qualified rehabilitation expenditures as defined 84.8 under section 47 of the Internal Revenue Code, provided that the 84.9 costs of rehabilitation must exceed 50 percent of the adjusted 84.10 basis of the building at the time the rehabilitation activity 84.11 begins, and the rehabilitation must meet standards consistent 84.12 with the standards of the Secretary of the Interior for 84.13 rehabilitation as determined by the state historic preservation 84.14 office of the Minnesota historical society. 84.15 Subd. 3. [CREDIT TO BE REFUNDABLE; APPROPRIATION.] If the 84.16 amount of the credit under subdivision 2 exceeds the tax 84.17 liability under chapter 290 for the year in which the cost is 84.18 incurred, the commissioner shall refund the excess to the 84.19 taxpayer. The amount necessary to pay the refunds is annually 84.20 appropriated from the general fund to the commissioner of 84.21 revenue. 84.22 Subd. 4. [PARTNERSHIPS; MULTIPLE OWNERS.] Credits granted 84.23 to a partnership, a limited liability company taxed as a 84.24 partnership, or multiple owners of property shall be passed 84.25 through to the partners, members, or owners, respectively, pro 84.26 rata or pursuant to an executed agreement among the partners, 84.27 members, or owners documenting an alternate distribution method. 84.28 Subd. 5. [PROCESS.] To claim the credit, the taxpayer must 84.29 apply to the state historic preservation office of the Minnesota 84.30 historical society for verification of eligibility before a 84.31 historic rehabilitation project begins. The state historic 84.32 preservation office shall determine the amount of eligible 84.33 rehabilitation costs and whether the rehabilitation meets the 84.34 standards of the United States Department of the Interior. The 84.35 state historic preservation office shall issue certificates 84.36 verifying eligibility for and the amount of credit. The 85.1 taxpayer shall attach the certificate to any income tax return 85.2 on which the credit is claimed. The state historic preservation 85.3 office of the Minnesota historical society may collect fees for 85.4 applications for the historic preservation tax credit. Fees 85.5 shall be set at an amount that does not exceed the costs of 85.6 administering the tax credit program. 85.7 Subd. 6. [DETERMINATION OF ECONOMIC IMPACT.] The Minnesota 85.8 historical society shall annually determine the economic impact 85.9 to the state from the rehabilitation of eligible property for 85.10 which credits are provided under this section and report on the 85.11 impact to the committees with jurisdiction over taxes of the 85.12 senate and house of representatives. 85.13[EFFECTIVE DATE.] This section is effective for taxable 85.14 years beginning after December 31, 2000, provided that a 85.15 historic preservation project that was approved for federal 85.16 historic preservation tax credits in 2000 is eligible for state 85.17 tax credits for work performed in 2001 or thereafter. For 85.18 qualified expenditures during calendar year 2001, the 85.19 requirement that eligibility must be verified by the Minnesota 85.20 historical society is considered to be met if the verification 85.21 is completed before the end of the year. 85.22 Sec. 11. [299G.19] [CONVENIENCE STORE SECURITY.] 85.23 Subdivision 1. [DEFINITION; CONVENIENCE STORE.] As used in 85.24 this section, "convenience store" means a place of business 85.25 primarily engaged in the retail sale of groceries, or both 85.26 groceries and gasoline. Convenience store does not include a 85.27 business that always has at least five employees on the premises 85.28 or has at least 10,000 square feet of retail floor space. 85.29 Subd. 2. [SECURITY CAMERA SYSTEM MINIMUM REQUIREMENTS.] (a) 85.30 A convenience store must install security cameras with auto-iris 85.31 lenses. Recording devices must be capable of retrieving an 85.32 image of sufficient quality to assist in offender 85.33 identification. Cameras must be placed to record the cash 85.34 register area and all entry and exit doors to the convenience 85.35 store that are not normally locked and connected to a working 85.36 alarm system. Cameras installed to observe the entrances and 86.1 exits must be placed and lenses fixed so that the entrances or 86.2 exits are completely visible in the field of view. Cameras 86.3 installed to observe the cash register area must be placed to 86.4 provide an optimum view of the customer, clerk, and transaction 86.5 area. Cameras and other video recording equipment must be in 86.6 good working order and any breakdowns of the equipment must be 86.7 repaired expeditiously. Cameras and other video security 86.8 devices such as sequencers and multiplexers must be compatible 86.9 with the recording device. 86.10 (b) If a convenience store uses a VHS recorder, then the 86.11 recorder must be a commercial grade VHS deck. Camera activity 86.12 must be recorded continuously. Recording times must not exceed 86.13 24 hours. The recorder must have a minimum of 240 lines of 86.14 resolution and four heads. All recordings must have time and 86.15 date stamp. The store must use a commercial grade VHS tape. An 86.16 individual tape must not be reused more than 20 times. The 86.17 recording device tapes or other recording media must be 86.18 maintained in a secure environment. Tapes or other recorded 86.19 media must be available to law enforcement for a minimum period 86.20 of seven days. 86.21 (c) The technical specifications provided in this 86.22 subdivision are minimum standards and do not preclude a 86.23 convenience store from installing equipment that exceeds the 86.24 standard. A convenience store must post a conspicuous sign 86.25 stating that the property is under camera surveillance. 86.26 Subd. 3. [OTHER MEASURES.] Every convenience store shall 86.27 be equipped with the following security devices and standards: 86.28 (1) height markers at the entrance of the store which 86.29 display height measures; and 86.30 (2) a silent alarm to law enforcement or a private security 86.31 agency. 86.32 Subd. 4. [TRAINING PROGRAMS.] The owner or principal 86.33 operator of a convenience store shall provide robbery deterrence 86.34 and safety training by an approved curriculum to its retail 86.35 employees within 60 days of employment. The commissioner of 86.36 public safety shall approve, after consultation with interested 87.1 parties, training curriculum for purposes of this subdivision. 87.2 Subd. 5. [PENALTIES.] Violations of this section are 87.3 subject to the penalties and remedies provided in section 8.31, 87.4 except subdivision 3a. 87.5[EFFECTIVE DATE.] This section is effective January 1, 87.6 2002, for all convenience stores constructed or placed into 87.7 service on or after that date, or convenience stores with no 87.8 current security camera surveillance. This section is effective 87.9 January 1, 2004, for all other convenience stores. 87.10 Sec. 12. [STUDY OF ENERGY EFFICIENCY TAX INCENTIVES.] 87.11 The department of revenue shall study the feasibility, 87.12 cost, and effectiveness of providing tax incentives to encourage 87.13 purchase and use of energy efficient systems and products, and 87.14 report the findings of the study by January 15, 2002, to the 87.15 legislative committees that have jurisdiction over tax issues. 87.16 Sec. 13. [APPROPRIATION.] 87.17 (a) $200,000 is appropriated from the general fund to the 87.18 commissioner of revenue to make grants to nonprofit 87.19 organizations, qualifying under section 501(c)(3) of the 87.20 Internal Revenue Code of 1986, to coordinate, facilitate, 87.21 encourage, and aid in the provision of taxpayer assistance 87.22 services. This appropriation is available for fiscal years 2002 87.23 and 2003 and does not become a part of the base. 87.24 (b) "Taxpayer assistance services" mean accounting and tax 87.25 preparation services provided by volunteers to low-income and 87.26 disadvantaged Minnesota residents to help them file federal and 87.27 state income tax returns and Minnesota property tax refund 87.28 claims. 87.29 Sec. 14. [REPEALER.] 87.30 Minnesota Statutes 2000, section 290.06, subdivision 25, is 87.31 repealed. 87.32 ARTICLE 5 87.33 FEDERAL UPDATE 87.34 Section 1. Minnesota Statutes 2000, section 289A.02, 87.35 subdivision 7, is amended to read: 87.36 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 88.1 defined otherwise, "Internal Revenue Code" means the Internal 88.2 Revenue Code of 1986, as amended through December 31,19992000. 88.3[EFFECTIVE DATE.] This section is effective the day 88.4 following final enactment. 88.5 Sec. 2. Minnesota Statutes 2000, section 290.01, 88.6 subdivision 6b, is amended to read: 88.7 Subd. 6b. [FOREIGN OPERATING CORPORATION.] The term 88.8 "foreign operating corporation," when applied to a corporation, 88.9 means a domestic corporation with the following characteristics: 88.10 (1) it is part of a unitary business at least one member of 88.11 which is taxable in this state; 88.12 (2) it is not a foreign sales corporation under section 922 88.13 of the Internal Revenue Code, as amended through December 31, 88.14 1999, for the taxable year; and 88.15 (3) either (i) the average of the percentages of its 88.16 property and payrolls assigned to locations inside the United 88.17 States and the District of Columbia, excluding the commonwealth 88.18 of Puerto Rico and possessions of the United States, as 88.19 determined under section 290.191 or 290.20, is 20 percent or 88.20 less; or (ii) it has in effect a valid election under section 88.21 936 of the Internal Revenue Code. 88.22[EFFECTIVE DATE.] This section is effective for taxable 88.23 years beginning after December 31, 2000. 88.24 Sec. 3. Minnesota Statutes 2000, section 290.01, 88.25 subdivision 19, is amended to read: 88.26 Subd. 19. [NET INCOME.] The term "net income" means the 88.27 federal taxable income, as defined in section 63 of the Internal 88.28 Revenue Code of 1986, as amended through the date named in this 88.29 subdivision, incorporating any elections made by the taxpayer in 88.30 accordance with the Internal Revenue Code in determining federal 88.31 taxable income for federal income tax purposes, and with the 88.32 modifications provided in subdivisions 19a to 19f. 88.33 In the case of a regulated investment company or a fund 88.34 thereof, as defined in section 851(a) or 851(g) of the Internal 88.35 Revenue Code, federal taxable income means investment company 88.36 taxable income as defined in section 852(b)(2) of the Internal 89.1 Revenue Code, except that: 89.2 (1) the exclusion of net capital gain provided in section 89.3 852(b)(2)(A) of the Internal Revenue Code does not apply; 89.4 (2) the deduction for dividends paid under section 89.5 852(b)(2)(D) of the Internal Revenue Code must be applied by 89.6 allowing a deduction for capital gain dividends and 89.7 exempt-interest dividends as defined in sections 852(b)(3)(C) 89.8 and 852(b)(5) of the Internal Revenue Code; and 89.9 (3) the deduction for dividends paid must also be applied 89.10 in the amount of any undistributed capital gains which the 89.11 regulated investment company elects to have treated as provided 89.12 in section 852(b)(3)(D) of the Internal Revenue Code. 89.13 The net income of a real estate investment trust as defined 89.14 and limited by section 856(a), (b), and (c) of the Internal 89.15 Revenue Code means the real estate investment trust taxable 89.16 income as defined in section 857(b)(2) of the Internal Revenue 89.17 Code. 89.18 The net income of a designated settlement fund as defined 89.19 in section 468B(d) of the Internal Revenue Code means the gross 89.20 income as defined in section 468B(b) of the Internal Revenue 89.21 Code. 89.22 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 89.23 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 89.24 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 89.25 Protection Act, Public Law Number 104-188, the provisions of 89.26 Public Law Number 104-117, the provisions of sections 313(a) and 89.27 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 89.28 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 89.29 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 89.30 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 89.31 Public Law Number 105-34, the provisions of section 6010 of the 89.32 Internal Revenue Service Restructuring and Reform Act of 1998, 89.33 Public Law Number 105-206,andthe provisions of section 4003 of 89.34 the Omnibus Consolidated and Emergency Supplemental 89.35 Appropriations Act, 1999, Public Law Number 105-277, and the 89.36 provisions of section 318 of the Consolidated Appropriation Act 90.1 of 2001, Public Law Number 106-554, shall become effective at 90.2 the time they become effective for federal purposes. 90.3 The Internal Revenue Code of 1986, as amended through 90.4 December 31, 1996, shall be in effect for taxable years 90.5 beginning after December 31, 1996. 90.6 The provisions of sections 202(a) and (b), 221(a), 225, 90.7 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 90.8 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 90.9 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 90.10 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 90.11 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 90.12 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 90.13 7002, and 7003 of the Internal Revenue Service Restructuring and 90.14 Reform Act of 1998, Public Law Number 105-206, the provisions of 90.15 section 3001 of the Omnibus Consolidated and Emergency 90.16 Supplemental Appropriations Act, 1999, Public Law Number 90.17 105-277,andthe provisions of section 3001 of the Miscellaneous 90.18 Trade and Technical Corrections Act of 1999, Public Law Number 90.19 106-36, and the provisions of section 316 of the Consolidated 90.20 Appropriation Act of 2001, Public Law Number 106-554, shall 90.21 become effective at the time they become effective for federal 90.22 purposes. 90.23 The Internal Revenue Code of 1986, as amended through 90.24 December 31, 1997, shall be in effect for taxable years 90.25 beginning after December 31, 1997. 90.26 The provisions of sections 5002, 6009, 6011, and 7001 of 90.27 the Internal Revenue Service Restructuring and Reform Act of 90.28 1998, Public Law Number 105-206, the provisions of section 9010 90.29 of the Transportation Equity Act for the 21st Century, Public 90.30 Law Number 105-178, the provisions of sections 1004, 4002, and 90.31 5301 of the Omnibus Consolidation and Emergency Supplemental 90.32 Appropriations Act, 1999, Public Law Number 105-277, the 90.33 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 90.34 Act of 1998, Public Law Number 105-369,andthe provisions of 90.35 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 90.36 Work Incentives Improvement Act of 1999, Public Law Number 91.1 106-170, the provisions of the Installment Tax Correction Act of 91.2 2000, Public Law Number 106-573, and the provisions of section 91.3 309 of the Consolidated Appropriation Act of 2001, Public Law 91.4 Number 106-554, shall become effective at the time they become 91.5 effective for federal purposes. 91.6 The Internal Revenue Code of 1986, as amended through 91.7 December 31, 1998, shall be in effect for taxable years 91.8 beginning after December 31, 1998. 91.9 The provisions of the FSC Repeal and Extraterritorial 91.10 Income Exclusion Act of 2000, Public Law Number 106-519, shall 91.11 become effective at the time it became effective for federal 91.12 purposes. 91.13 The Internal Revenue Code of 1986, as amended through 91.14 December 31, 1999, shall be in effect for taxable years 91.15 beginning after December 31, 1999. The provisions of sections 91.16 306 and 401 of the Consolidated Appropriation Act of 2001, 91.17 Public Law Number 106-554, shall become effective at the same 91.18 time it became effective for federal purposes. 91.19 The Internal Revenue Code of 1986, as amended through 91.20 December 31, 2000, shall be in effect for taxable years 91.21 beginning after December 31, 2000. 91.22 Except as otherwise provided, references to the Internal 91.23 Revenue Code in subdivisions 19a to 19g mean the code in effect 91.24 for purposes of determining net income for the applicable year. 91.25[EFFECTIVE DATE.] This section is effective the day 91.26 following final enactment. 91.27 Sec. 4. Minnesota Statutes 2000, section 290.01, 91.28 subdivision 19c, is amended to read: 91.29 Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 91.30 INCOME.] For corporations, there shall be added to federal 91.31 taxable income: 91.32 (1) the amount of any deduction taken for federal income 91.33 tax purposes for income, excise, or franchise taxes based on net 91.34 income or related minimum taxes, including but not limited to 91.35 the tax imposed under section 290.0922, paid by the corporation 91.36 to Minnesota, another state, a political subdivision of another 92.1 state, the District of Columbia, or any foreign country or 92.2 possession of the United States; 92.3 (2) interest not subject to federal tax upon obligations 92.4 of: the United States, its possessions, its agencies, or its 92.5 instrumentalities; the state of Minnesota or any other state, 92.6 any of its political or governmental subdivisions, any of its 92.7 municipalities, or any of its governmental agencies or 92.8 instrumentalities; the District of Columbia; or Indian tribal 92.9 governments; 92.10 (3) exempt-interest dividends received as defined in 92.11 section 852(b)(5) of the Internal Revenue Code; 92.12 (4) the amount of any net operating loss deduction taken 92.13 for federal income tax purposes under section 172 or 832(c)(10) 92.14 of the Internal Revenue Code or operations loss deduction under 92.15 section 810 of the Internal Revenue Code; 92.16 (5) the amount of any special deductions taken for federal 92.17 income tax purposes under sections 241 to 247 of the Internal 92.18 Revenue Code; 92.19 (6) losses from the business of mining, as defined in 92.20 section 290.05, subdivision 1, clause (a), that are not subject 92.21 to Minnesota income tax; 92.22 (7) the amount of any capital losses deducted for federal 92.23 income tax purposes under sections 1211 and 1212 of the Internal 92.24 Revenue Code; 92.25 (8) the amount of any charitable contributions deducted for 92.26 federal income tax purposes under section 170 of the Internal 92.27 Revenue Code; 92.28 (9) the exempt foreign trade income of a foreign sales 92.29 corporation under sections 921(a) and 291 of the Internal 92.30 Revenue Code; 92.31 (10) the amount of percentage depletion deducted under 92.32 sections 611 through 614 and 291 of the Internal Revenue Code; 92.33 (11) for certified pollution control facilities placed in 92.34 service in a taxable year beginning before December 31, 1986, 92.35 and for which amortization deductions were elected under section 92.36 169 of the Internal Revenue Code of 1954, as amended through 93.1 December 31, 1985, the amount of the amortization deduction 93.2 allowed in computing federal taxable income for those 93.3 facilities; 93.4 (12) the amount of any deemed dividend from a foreign 93.5 operating corporation determined pursuant to section 290.17, 93.6 subdivision 4, paragraph (g); 93.7 (13) the amount of any environmental tax paid under section 93.8 59(a) of the Internal Revenue Code;and93.9 (14) the amount of a partner's pro rata share of net income 93.10 which does not flow through to the partner because the 93.11 partnership elected to pay the tax on the income under section 93.12 6242(a)(2) of the Internal Revenue Code; and 93.13 (15) the amount of net income excluded under section 114 of 93.14 the Internal Revenue Code. 93.15[EFFECTIVE DATE.] This section is effective for taxable 93.16 years beginning after December 31, 2000. 93.17 Sec. 5. Minnesota Statutes 2000, section 290.01, 93.18 subdivision 19d, is amended to read: 93.19 Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 93.20 TAXABLE INCOME.] For corporations, there shall be subtracted 93.21 from federal taxable income after the increases provided in 93.22 subdivision 19c: 93.23 (1) the amount of foreign dividend gross-up added to gross 93.24 income for federal income tax purposes under section 78 of the 93.25 Internal Revenue Code; 93.26 (2) the amount of salary expense not allowed for federal 93.27 income tax purposes due to claiming the federal jobs credit 93.28 under section 51 of the Internal Revenue Code; 93.29 (3) any dividend (not including any distribution in 93.30 liquidation) paid within the taxable year by a national or state 93.31 bank to the United States, or to any instrumentality of the 93.32 United States exempt from federal income taxes, on the preferred 93.33 stock of the bank owned by the United States or the 93.34 instrumentality; 93.35 (4) amounts disallowed for intangible drilling costs due to 93.36 differences between this chapter and the Internal Revenue Code 94.1 in taxable years beginning before January 1, 1987, as follows: 94.2 (i) to the extent the disallowed costs are represented by 94.3 physical property, an amount equal to the allowance for 94.4 depreciation under Minnesota Statutes 1986, section 290.09, 94.5 subdivision 7, subject to the modifications contained in 94.6 subdivision 19e; and 94.7 (ii) to the extent the disallowed costs are not represented 94.8 by physical property, an amount equal to the allowance for cost 94.9 depletion under Minnesota Statutes 1986, section 290.09, 94.10 subdivision 8; 94.11 (5) the deduction for capital losses pursuant to sections 94.12 1211 and 1212 of the Internal Revenue Code, except that: 94.13 (i) for capital losses incurred in taxable years beginning 94.14 after December 31, 1986, capital loss carrybacks shall not be 94.15 allowed; 94.16 (ii) for capital losses incurred in taxable years beginning 94.17 after December 31, 1986, a capital loss carryover to each of the 94.18 15 taxable years succeeding the loss year shall be allowed; 94.19 (iii) for capital losses incurred in taxable years 94.20 beginning before January 1, 1987, a capital loss carryback to 94.21 each of the three taxable years preceding the loss year, subject 94.22 to the provisions of Minnesota Statutes 1986, section 290.16, 94.23 shall be allowed; and 94.24 (iv) for capital losses incurred in taxable years beginning 94.25 before January 1, 1987, a capital loss carryover to each of the 94.26 five taxable years succeeding the loss year to the extent such 94.27 loss was not used in a prior taxable year and subject to the 94.28 provisions of Minnesota Statutes 1986, section 290.16, shall be 94.29 allowed; 94.30 (6) an amount for interest and expenses relating to income 94.31 not taxable for federal income tax purposes, if (i) the income 94.32 is taxable under this chapter and (ii) the interest and expenses 94.33 were disallowed as deductions under the provisions of section 94.34 171(a)(2), 265 or 291 of the Internal Revenue Code in computing 94.35 federal taxable income; 94.36 (7) in the case of mines, oil and gas wells, other natural 95.1 deposits, and timber for which percentage depletion was 95.2 disallowed pursuant to subdivision 19c, clause (11), a 95.3 reasonable allowance for depletion based on actual cost. In the 95.4 case of leases the deduction must be apportioned between the 95.5 lessor and lessee in accordance with rules prescribed by the 95.6 commissioner. In the case of property held in trust, the 95.7 allowable deduction must be apportioned between the income 95.8 beneficiaries and the trustee in accordance with the pertinent 95.9 provisions of the trust, or if there is no provision in the 95.10 instrument, on the basis of the trust's income allocable to 95.11 each; 95.12 (8) for certified pollution control facilities placed in 95.13 service in a taxable year beginning before December 31, 1986, 95.14 and for which amortization deductions were elected under section 95.15 169 of the Internal Revenue Code of 1954, as amended through 95.16 December 31, 1985, an amount equal to the allowance for 95.17 depreciation under Minnesota Statutes 1986, section 290.09, 95.18 subdivision 7; 95.19 (9) the amount included in federal taxable income 95.20 attributable to the credits provided in Minnesota Statutes 1986, 95.21 section 273.1314, subdivision 9, or Minnesota Statutes, section 95.22 469.171, subdivision 6; 95.23 (10) amounts included in federal taxable income that are 95.24 due to refunds of income, excise, or franchise taxes based on 95.25 net income or related minimum taxes paid by the corporation to 95.26 Minnesota, another state, a political subdivision of another 95.27 state, the District of Columbia, or a foreign country or 95.28 possession of the United States to the extent that the taxes 95.29 were added to federal taxable income under section 290.01, 95.30 subdivision 19c, clause (1), in a prior taxable year; 95.31 (11) 80 percent of royalties, fees, or other like income 95.32 accrued or received from a foreign operating corporation or a 95.33 foreign corporation which is part of the same unitary business 95.34 as the receiving corporation; 95.35 (12) income or gains from the business of mining as defined 95.36 in section 290.05, subdivision 1, clause (a), that are not 96.1 subject to Minnesota franchise tax; 96.2 (13) the amount of handicap access expenditures in the 96.3 taxable year which are not allowed to be deducted or capitalized 96.4 under section 44(d)(7) of the Internal Revenue Code; 96.5 (14) the amount of qualified research expenses not allowed 96.6 for federal income tax purposes under section 280C(c) of the 96.7 Internal Revenue Code, but only to the extent that the amount 96.8 exceeds the amount of the credit allowed under section 290.068; 96.9 (15) the amount of salary expenses not allowed for federal 96.10 income tax purposes due to claiming the Indian employment credit 96.11 under section 45A(a) of the Internal Revenue Code; 96.12 (16) the amount of any refund of environmental taxes paid 96.13 under section 59A of the Internal Revenue Code;and96.14 (17) for taxable years beginning before January 1, 2008, 96.15 the amount of the federal small ethanol producer credit allowed 96.16 under section 40(a)(3) of the Internal Revenue Code which is 96.17 included in gross income under section 87 of the Internal 96.18 Revenue Code; and 96.19 (18) for a corporation whose foreign sales corporation, as 96.20 defined in section 922 of the Internal Revenue Code, constituted 96.21 a foreign operation company during the taxable years ending 96.22 during calendar year 2000, an amount equal to 1.23 multiplied by 96.23 the amount of income excluded under section 114 of the Internal 96.24 Revenue Code, provided the income is not income of a foreign 96.25 operating company. 96.26[EFFECTIVE DATE.] This section is effective for taxable 96.27 years beginning after December 31, 2000. 96.28 Sec. 6. Minnesota Statutes 2000, section 290.01, 96.29 subdivision 31, is amended to read: 96.30 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 96.31 defined otherwise, "Internal Revenue Code" means the Internal 96.32 Revenue Code of 1986, as amended through December 31,19992000. 96.33[EFFECTIVE DATE.] This section is effective at the same 96.34 time and in the same manner as the federal changes made by the 96.35 FSC Repeal and Extraterritorial Income Exclusion Act of 2000, 96.36 Public Law Number 106-519, and the Consolidated Appropriation 97.1 Act of 2001, Public Law Number 106-554, becomes effective. 97.2 Sec. 7. Minnesota Statutes 2000, section 290.191, 97.3 subdivision 5, is amended to read: 97.4 Subd. 5. [DETERMINATION OF SALES FACTOR.] For purposes of 97.5 this section, the following rules apply in determining the sales 97.6 factor. 97.7 (a) The sales factor includes all sales, gross earnings, or 97.8 receipts received in the ordinary course of the business, except 97.9 that the following types of income are not included in the sales 97.10 factor: 97.11 (1) interest; 97.12 (2) dividends; 97.13 (3) sales of capital assets as defined in section 1221 of 97.14 the Internal Revenue Code; 97.15 (4) sales of property used in the trade or business, except 97.16 sales of leased property of a type which is regularly sold as 97.17 well as leased; 97.18 (5) sales of debt instruments as defined in section 97.19 1275(a)(1) of the Internal Revenue Code or sales of stock; and 97.20 (6)royalties, fees, or other like income of a type which97.21qualify for a subtraction from federal taxable income under97.22section 290.01, subdivision 19(d)(11)all sales, gross earnings, 97.23 or receipts used to generate income excluded under section 114 97.24 of the Internal Revenue Code. 97.25 (b) Sales of tangible personal property are made within 97.26 this state if the property is received by a purchaser at a point 97.27 within this state, and the taxpayer is taxable in this state, 97.28 regardless of the f.o.b. point, other conditions of the sale, or 97.29 the ultimate destination of the property. 97.30 (c) Tangible personal property delivered to a common or 97.31 contract carrier or foreign vessel for delivery to a purchaser 97.32 in another state or nation is a sale in that state or nation, 97.33 regardless of f.o.b. point or other conditions of the sale. 97.34 (d) Notwithstanding paragraphs (b) and (c), when 97.35 intoxicating liquor, wine, fermented malt beverages, cigarettes, 97.36 or tobacco products are sold to a purchaser who is licensed by a 98.1 state or political subdivision to resell this property only 98.2 within the state of ultimate destination, the sale is made in 98.3 that state. 98.4 (e) Sales made by or through a corporation that is 98.5 qualified as a domestic international sales corporation under 98.6 section 992 of the Internal Revenue Code are not considered to 98.7 have been made within this state. 98.8 (f) Sales, rents, royalties, and other income in connection 98.9 with real property is attributed to the state in which the 98.10 property is located. 98.11 (g) Receipts from the lease or rental of tangible personal 98.12 property, including finance leases and true leases, must be 98.13 attributed to this state if the property is located in this 98.14 state and to other states if the property is not located in this 98.15 state. Receipts from the lease or rental of moving property 98.16 including, but not limited to, motor vehicles, rolling stock, 98.17 aircraft, vessels, or mobile equipment are included in the 98.18 numerator of the receipts factor to the extent that the property 98.19 is used in this state. The extent of the use of moving property 98.20 is determined as follows: 98.21 (1) A motor vehicle is used wholly in the state in which it 98.22 is registered. 98.23 (2) The extent that rolling stock is used in this state is 98.24 determined by multiplying the receipts from the lease or rental 98.25 of the rolling stock by a fraction, the numerator of which is 98.26 the miles traveled within this state by the leased or rented 98.27 rolling stock and the denominator of which is the total miles 98.28 traveled by the leased or rented rolling stock. 98.29 (3) The extent that an aircraft is used in this state is 98.30 determined by multiplying the receipts from the lease or rental 98.31 of the aircraft by a fraction, the numerator of which is the 98.32 number of landings of the aircraft in this state and the 98.33 denominator of which is the total number of landings of the 98.34 aircraft. 98.35 (4) The extent that a vessel, mobile equipment, or other 98.36 mobile property is used in the state is determined by 99.1 multiplying the receipts from the lease or rental of the 99.2 property by a fraction, the numerator of which is the number of 99.3 days during the taxable year the property was in this state and 99.4 the denominator of which is the total days in the taxable year. 99.5 (h) Royalties and other income not described in paragraph 99.6 (a), clause (6), received for the use of or for the privilege of 99.7 using intangible property, including patents, know-how, 99.8 formulas, designs, processes, patterns, copyrights, trade names, 99.9 service names, franchises, licenses, contracts, customer lists, 99.10 or similar items, must be attributed to the state in which the 99.11 property is used by the purchaser. If the property is used in 99.12 more than one state, the royalties or other income must be 99.13 apportioned to this state pro rata according to the portion of 99.14 use in this state. If the portion of use in this state cannot 99.15 be determined, the royalties or other income must be excluded 99.16 from both the numerator and the denominator. Intangible 99.17 property is used in this state if the purchaser uses the 99.18 intangible property or the rights therein in the regular course 99.19 of its business operations in this state, regardless of the 99.20 location of the purchaser's customers. 99.21 (i) Sales of intangible property are made within the state 99.22 in which the property is used by the purchaser. If the property 99.23 is used in more than one state, the sales must be apportioned to 99.24 this state pro rata according to the portion of use in this 99.25 state. If the portion of use in this state cannot be 99.26 determined, the sale must be excluded from both the numerator 99.27 and the denominator of the sales factor. Intangible property is 99.28 used in this state if the purchaser used the intangible property 99.29 in the regular course of its business operations in this state. 99.30 (j) Receipts from the performance of services must be 99.31 attributed to the state where the services are received. For 99.32 the purposes of this section, receipts from the performance of 99.33 services provided to a corporation, partnership, or trust may 99.34 only be attributed to a state where it has a fixed place of 99.35 doing business. If the state where the services are received is 99.36 not readily determinable or is a state where the corporation, 100.1 partnership, or trust receiving the service does not have a 100.2 fixed place of doing business, the services shall be deemed to 100.3 be received at the location of the office of the customer from 100.4 which the services were ordered in the regular course of the 100.5 customer's trade or business. If the ordering office cannot be 100.6 determined, the services shall be deemed to be received at the 100.7 office of the customer to which the services are billed. 100.8[EFFECTIVE DATE.] This section is effective for 100.9 transactions after September 30, 2000. 100.10 Sec. 8. Minnesota Statutes 2000, section 290A.03, 100.11 subdivision 15, is amended to read: 100.12 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 100.13 means the Internal Revenue Code of 1986, as amended through 100.14 December 31,19992000. 100.15[EFFECTIVE DATE.] This section is effective the day 100.16 following final enactment. 100.17 Sec. 9. Minnesota Statutes 2000, section 291.005, 100.18 subdivision 1, is amended to read: 100.19 Subdivision 1. Unless the context otherwise clearly 100.20 requires, the following terms used in this chapter shall have 100.21 the following meanings: 100.22 (1) "Federal gross estate" means the gross estate of a 100.23 decedent as valued and otherwise determined for federal estate 100.24 tax purposes by federal taxing authorities pursuant to the 100.25 provisions of the Internal Revenue Code. 100.26 (2) "Minnesota gross estate" means the federal gross estate 100.27 of a decedent after (a) excluding therefrom any property 100.28 included therein which has its situs outside Minnesota and (b) 100.29 including therein any property omitted from the federal gross 100.30 estate which is includable therein, has its situs in Minnesota, 100.31 and was not disclosed to federal taxing authorities. 100.32 (3) "Personal representative" means the executor, 100.33 administrator or other person appointed by the court to 100.34 administer and dispose of the property of the decedent. If 100.35 there is no executor, administrator or other person appointed, 100.36 qualified, and acting within this state, then any person in 101.1 actual or constructive possession of any property having a situs 101.2 in this state which is included in the federal gross estate of 101.3 the decedent shall be deemed to be a personal representative to 101.4 the extent of the property and the Minnesota estate tax due with 101.5 respect to the property. 101.6 (4) "Resident decedent" means an individual whose domicile 101.7 at the time of death was in Minnesota. 101.8 (5) "Nonresident decedent" means an individual whose 101.9 domicile at the time of death was not in Minnesota. 101.10 (6) "Situs of property" means, with respect to real 101.11 property, the state or country in which it is located; with 101.12 respect to tangible personal property, the state or country in 101.13 which it was normally kept or located at the time of the 101.14 decedent's death; and with respect to intangible personal 101.15 property, the state or country in which the decedent was 101.16 domiciled at death. 101.17 (7) "Commissioner" means the commissioner of revenue or any 101.18 person to whom the commissioner has delegated functions under 101.19 this chapter. 101.20 (8) "Internal Revenue Code" means the United States 101.21 Internal Revenue Code of 1986, as amended through December 31, 101.2219992000. 101.23[EFFECTIVE DATE.] This section is effective the day 101.24 following final enactment. 101.25 ARTICLE 6 101.26 CORPORATE TAXATION 101.27 Section 1. Minnesota Statutes 2000, section 290.068, is 101.28 amended by adding a subdivision to read: 101.29 Subd. 7. [CREDIT REFUNDABLE.] If the amount of credit that 101.30 a corporation is eligible to receive under this section exceeds 101.31 the corporation's tax liability under this chapter, the 101.32 commissioner shall refund the excess to the corporation. 101.33[EFFECTIVE DATE.] This section is effective for taxable 101.34 years beginning after December 31, 2000. 101.35 Sec. 2. Minnesota Statutes 2000, section 290.068, is 101.36 amended by adding a subdivision to read: 102.1 Subd. 8. [APPROPRIATION.] An amount sufficient to pay the 102.2 refunds required by this section is annually appropriated to the 102.3 commissioner of revenue from the general fund. 102.4[EFFECTIVE DATE.] This section is effective for taxable 102.5 years beginning after December 31, 2000. 102.6 Sec. 3. Minnesota Statutes 2000, section 290.9725, is 102.7 amended to read: 102.8 290.9725 [S CORPORATION.] 102.9 For purposes of this chapter, the term "S corporation" 102.10 means any corporation having a valid election in effect for the 102.11 taxable year under section 1362 of the Internal Revenue Code. 102.12 An S corporation shall not be subject to the taxes imposed by 102.13 this chapter, except:102.14(1)the taxes imposed under sections 290.0922, 290.92, 102.15 290.9727, 290.9728, and 290.9729; and102.16(2) the tax under sections 290.06, subdivision 1, and102.17290.0921 apply to a financial institution to which either102.18section 585 or 593 of the Internal Revenue Code applies or that102.19has a wholly owned subsidiary as described in section102.201361(b)(3)(B) of the Internal Revenue Code which is a financial102.21institution under section 585 or 593 of the Internal Revenue102.22Code. 102.23[EFFECTIVE DATE.] This section is effective for taxable 102.24 years beginning after December 31, 2000. 102.25 Sec. 4. [REPEALER.] 102.26 Minnesota Statutes 2000, sections 290.06, subdivision 26; 102.27 290.0673; 290.068, subdivision 3; and 290.9726, subdivision 7, 102.28 are repealed. 102.29[EFFECTIVE DATE.] This section is effective for taxable 102.30 years beginning after December 31, 2000. 102.31 ARTICLE 7 102.32 SALES AND USE TAXES 102.33 Section 1. Minnesota Statutes 2000, section 84.922, is 102.34 amended by adding a subdivision to read: 102.35 Subd. 11. [PROOF OF SALES TAX PAYMENT.] A person applying 102.36 for initial registration in Minnesota of an all-terrain vehicle 103.1 shall provide a purchaser's certificate showing a complete 103.2 description of the all-terrain vehicle, the seller's name and 103.3 address, the full purchase price of the all-terrain vehicle, and 103.4 the trade-in allowance, if any. The certificate also must 103.5 include information showing either that (1) the sales and use 103.6 tax under chapter 297A was paid, or (2) the purchase was exempt 103.7 from tax under chapter 297A. The certificate is not required if 103.8 the applicant provides a receipt, invoice, or other document 103.9 that shows the all-terrain vehicle was purchased from a retailer 103.10 maintaining a place of business in this state as defined in 103.11 section 297A.66, subdivision 1. 103.12[EFFECTIVE DATE.] This section is effective for 103.13 registrations occurring on or after July 1, 2001. 103.14 Sec. 2. Minnesota Statutes 2000, section 161.20, 103.15 subdivision 3, is amended to read: 103.16 Subd. 3. [TRUNK HIGHWAY FUND APPROPRIATIONS.] The 103.17 commissioner may expend trunk highway funds only for trunk 103.18 highway purposes. Payment of expenses related tosales tax,103.19 bureau of criminal apprehension laboratory, office of tourism 103.20 kiosks, Minnesota safety council, tort claims, driver education 103.21 programs, emergency medical services board, and Mississippi 103.22 River parkway commission do not further a highway purpose and do 103.23 not aid in the construction, improvement, or maintenance of the 103.24 highway system. 103.25 Sec. 3. Minnesota Statutes 2000, section 297A.25, 103.26 subdivision 28, is amended to read: 103.27 Subd. 28. [WASTE PROCESSING EQUIPMENT.] The gross receipts 103.28 from the sale of and storage, use, or consumption of equipment 103.29 used for processing solid or hazardous waste at a resource 103.30 recovery facility, as defined in section 115A.03, subdivision 103.31 28, are exempt, including pollution control equipment at a 103.32 resource recovery facility that burns refuse-derived fuel or 103.33 mixed municipal solid waste as its primary fuel. An electric 103.34 generation facility that processes and utilizes waste tires as 103.35 its primary fuel is a resource recovery facility for the 103.36 purposes of this section. 104.1[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 104.2 effective for purchases and sales made after the date of final 104.3 enactment. In the next edition of Minnesota Statutes, the 104.4 revisor of statutes shall codify the amendment to this section 104.5 in section 297A.68, subdivision 24. 104.6 Sec. 4. Minnesota Statutes 2000, section 297A.61, 104.7 subdivision 3, is amended to read: 104.8 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 104.9 include, but are not limited to, each of the transactions listed 104.10 in this subdivision. 104.11 (b) Sale and purchase include any transfer of title or 104.12 possession, or both, of tangible personal property, whether 104.13 absolutely or conditionally, and the leasing of or the granting 104.14 of a license to use or consume, for a consideration, tangible 104.15 personal property, other than a manufactured home used for 104.16 residential purposes for a continuous period of 30 days or more. 104.17 (c) Sale and purchase include the production, fabrication, 104.18 printing, or processing of tangible personal property for a 104.19 consideration for consumers who furnish either directly or 104.20 indirectly the materials used in the production, fabrication, 104.21 printing, or processing. 104.22 (d) Sale and purchase include the furnishing, preparing, or 104.23 serving for a consideration of food or drinks. Notwithstanding 104.24 section 297A.67, subdivision 2, taxable food or drinks include, 104.25 but are not limited to, the following: 104.26 (1) food or drinks sold by the retailer for immediate 104.27 consumption on the retailer's premises. Food and drinks sold 104.28 within a building or grounds that require an admission charge 104.29 for entrance are presumed to be sold for consumption on the 104.30 premises; 104.31 (2) food or drinks prepared by the retailer for immediate 104.32 consumption either on or off the retailer's premises. For 104.33 purposes of this subdivision, "food or drinks prepared for 104.34 immediate consumption" means any food product upon which an act 104.35 of preparation including, but not limited to, cooking, mixing, 104.36 sandwich making, blending, heating, or pouring has been 105.1 performed by the retailer so the food product may be immediately 105.2 consumed by the purchaser; 105.3 (3) ice cream, ice milk, frozen yogurt products, or frozen 105.4 novelties sold in single or individual servings including, but 105.5 not limited to, cones, sundaes, and snow cones; 105.6 (4) soft drinks and other beverages, including all 105.7 carbonated and noncarbonated beverages or drinks sold in liquid 105.8 form, but not including beverages or drinks which contain milk 105.9 or milk products, beverages or drinks containing 15 or more 105.10 percent fruit juice, and noncarbonated and noneffervescent 105.11 bottled water sold in individual containers of one-half gallon 105.12 or more in size; 105.13 (5) gum, candy, and candy products; 105.14 (6) ice; 105.15 (7) all food sold from vending machines; 105.16 (8) all food for immediate consumption sold from concession 105.17 stands and vehicles; 105.18 (9) party trays; 105.19 (10) all meals and single servings of packaged snack food 105.20 sold in restaurants and bars; and 105.21 (11) bakery products that are: 105.22 (i) prepared by the retailer for consumption on the 105.23 retailer's premises; 105.24 (ii) sold at a place that charges admission; 105.25 (iii) sold from vending machines; or 105.26 (iv) sold in single or individual servings from concession 105.27 stands, vehicles, bars, and restaurants. 105.28 For purposes of this paragraph, "single or individual 105.29 servings" does not include products when sold in bulk containers 105.30 or bulk packaging. 105.31 For purposes of this paragraph, "premises" means the total 105.32 space and facilities, including buildings, grounds, and parking 105.33 lots that are made available or that are available for use by 105.34 the retailer or customer for the purpose of sale or consumption 105.35 of prepared food and drinks. The premises of a caterer is the 105.36 place where the catered food or drinks are served. 106.1 (e) A sale and a purchase includes the furnishing for a 106.2 consideration of electricity, gas, water, or steam for use or 106.3 consumption within this stateor local exchange telephone106.4service, intrastate toll service, and interstate toll service,106.5if that service originates from and is charged to a telephone106.6located in this state. Telephone service includes (1) paging106.7services, and (2) private communication service, as defined in106.8United States Code, title 26, section 4252(d), except for106.9private communication service purchased by an agent acting on106.10behalf of the state lottery. Telephone service does not include106.11services purchased with a prepaid telephone calling card. The106.12furnishing for a consideration of access to telephone services106.13by a hotel to its guests is a sale. The furnishing for a106.14consideration of items listed in this paragraph by a municipal106.15corporation is a sale. 106.16 (f) A sale and a purchase includes the transfer for a 106.17 consideration of computer software. 106.18 (g) A sale and a purchase includes the furnishing for a 106.19 consideration of taxable services as defined in subdivision 16. 106.20 (h) A sale and a purchase includes the furnishing for a 106.21 consideration of tangible personal property or taxable services 106.22 by the United States or any of its agencies or 106.23 instrumentalities, or the state of Minnesota, its agencies, 106.24 instrumentalities, or political subdivisions. 106.25 (i) A sale and a purchase includes the furnishing for a 106.26 consideration of telecommunications services, including cable 106.27 television services and direct satellite services. 106.28 Telecommunications services are taxed to the extent allowed 106.29 under federal law if those services: 106.30 (1) either (i) originate and terminate in this state; or 106.31 (ii) originate in this state and terminate outside the state and 106.32 the service is charged to a telephone number customer located in 106.33 this state or to the account of any transmission instrument in 106.34 this state; or (iii) originate outside this state and terminate 106.35 in this state and the service is charged to a telephone number 106.36 customer located in this state or to the account of any 107.1 transmission instrument in this state; or 107.2 (2) are rendered by providing a private communications 107.3 service for which the customer has one or more locations within 107.4 Minnesota connected to the service and the service is charged to 107.5 a telephone number customer located in this state or to the 107.6 account of any transmission instrument in this state. 107.7 All charges for mobile telecommunications services, as 107.8 defined in United States Code, title 4, section 124, are deemed 107.9 to be provided by the customer's home service provider and 107.10 sourced to the customer's place of primary use and are subject 107.11 to tax based upon the customer's place of primary use in 107.12 accordance with the Mobile Telecommunications Sourcing Act, 107.13 United States Code, title 4, sections 116 to 126. 107.14[EFFECTIVE DATE.] This section is effective for sales and 107.15 purchases made after June 30, 2001. 107.16 Sec. 5. Minnesota Statutes 2000, section 297A.61, 107.17 subdivision 12, is amended to read: 107.18 Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new 107.19 or used machinery, equipment, implements, accessories, and 107.20 contrivances used directly and principally in the production for 107.21 sale, but not including the processing, of livestock, dairy 107.22 animals, dairy products, poultry and poultry products, fruits, 107.23 vegetables, trees and shrubs, plants, forage, grains, and bees 107.24 and apiary products. 107.25 (b) Farm machinery includes: 107.26 (1) machinery for the preparation, seeding, or cultivation 107.27 of soil for growing agricultural crops and sod, for the 107.28 harvesting and threshing of agricultural products, or for the 107.29 harvesting or mowing of sod; 107.30 (2) barn cleaners, milking systems, grain dryers,automatic107.31 feeding systems including stationary feed bunks, and similar 107.32 installations, whether or not the equipment is installed by the 107.33 seller and becomes part of the real property; 107.34 (3) irrigation equipment sold for exclusively agricultural 107.35 use, including pumps, pipe fittings, valves, sprinklers, and 107.36 other equipment necessary to the operation of an irrigation 108.1 system when sold as part of an irrigation system, whether or not 108.2 the equipment is installed by the seller and becomes part of the 108.3 real property; 108.4 (4) logging equipment, including chain saws used for 108.5 commercial logging; 108.6 (5) fencing used for the containment of farmed cervidae, as 108.7 defined in section 17.451, subdivision 2; 108.8 (6) primary and backup generator units used to generate 108.9 electricity for the purpose of operating farm machinery, as 108.10 defined in this subdivision, or providing light or space heating 108.11 necessary for the production of livestock, dairy animals, dairy 108.12 products, or poultry and poultry products; 108.13 (7) aquaculture production equipment as defined in 108.14 subdivision 13; and 108.15 (8) equipment used for maple syrup harvesting. 108.16 (c) Farm machinery does not include: 108.17 (1) repair or replacement parts; 108.18 (2) tools, shop equipment, grain bins,feed bunks,fencing 108.19 material except fencing material covered by paragraph (b), 108.20 clause (5), communication equipment, and other farm supplies; 108.21 (3) motor vehicles taxed under chapter 297B; 108.22 (4) snowmobiles or snow blowers; or 108.23 (5) lawn mowers except those used in the production of sod 108.24 for sale, or garden-type tractors or garden tillers. 108.25[EFFECTIVE DATE.] This section is effective for sales and 108.26 purchases made after June 30, 2001. 108.27 Sec. 6. Minnesota Statutes 2000, section 297A.61, 108.28 subdivision 16, is amended to read: 108.29 Subd. 16. [TAXABLE SERVICES.] (a) "Taxable services" means 108.30 the services listed in this subdivision and other services 108.31 listed in subdivision 3. 108.32 (b) Taxable services includes the granting of the privilege 108.33 of admission to places of amusement, recreational areas, or 108.34 athletic events, and the making available of amusement devices, 108.35 tanning facilities, reducing salons, steam baths, turkish baths, 108.36 health clubs, and spas or athletic facilities. 109.1 (c) Taxable services includes the furnishing of lodging and 109.2 related services by a hotel, rooming house, resort, campground, 109.3 motel, or trailer camp and the granting of any similar license 109.4 to use real property other than the renting or leasing thereof 109.5 for a continuous period of 30 days or more. 109.6 (d)Taxable services includes the furnishing of cable109.7television services or similar television services, including,109.8but not limited to, charges for basic, premium, pay-per-view,109.9and any other similar service.109.10(e)Taxable services includes the furnishing of parking 109.11 services, whether on a contractual, hourly, or other periodic 109.12 basis, except for parking at a meter. 109.13(f)(e) Taxable services includes the granting of 109.14 membership in a club, association, or other organization if: 109.15 (1) the club, association, or other organization makes 109.16 available for the use of its members sports and athletic 109.17 facilities, without regard to whether a separate charge is 109.18 assessed for use of the facilities; and 109.19 (2) use of the sports and athletic facility is not made 109.20 available to the general public on the same basis as it is made 109.21 available to members. 109.22 Granting of membership means both one-time initiation fees and 109.23 periodic membership dues. Sports and athletic facilities 109.24 include golf courses; tennis, racquetball, handball, and squash 109.25 courts; basketball and volleyball facilities; running tracks; 109.26 exercise equipment; swimming pools; and other similar athletic 109.27 or sports facilities. 109.28(g)(f) Taxable services includes the furnishing of the 109.29 following services as provided in this paragraph: 109.30 (1) laundry and dry cleaning services including cleaning, 109.31 pressing, repairing, altering, and storing clothes, linen 109.32 services and supply, cleaning and blocking hats, and carpet, 109.33 drapery, upholstery, and industrial cleaning. Laundry and dry 109.34 cleaning services do not include services provided by coin 109.35 operated facilities operated by the customer; 109.36 (2) motor vehicle washing, waxing, and cleaning services, 110.1 including services provided by coin operated facilities operated 110.2 by the customer, and rustproofing, undercoating, and towing of 110.3 motor vehicles; 110.4 (3) building and residential cleaning, maintenance, and 110.5 disinfecting and exterminating services; 110.6 (4) detective, security, burglar, fire alarm, and armored 110.7 car services; but not including services performed within the 110.8 jurisdiction they serve by off-duty licensed peace officers as 110.9 defined in section 626.84, subdivision 1, or services provided 110.10 by a nonprofit organization for monitoring and electronic 110.11 surveillance of persons placed on in-home detention pursuant to 110.12 court order or under the direction of the Minnesota department 110.13 of corrections; 110.14 (5) pet grooming services; 110.15 (6) lawn care, fertilizing, mowing, spraying and sprigging 110.16 services; garden planting and maintenance; tree, bush, and shrub 110.17 pruning, bracing, spraying, and surgery; indoor plant care; 110.18 tree, bush, shrub, and stump removal; and tree trimming for 110.19 public utility lines. Services performed under a construction 110.20 contract for the installation of shrubbery, plants, sod, trees, 110.21 bushes, and similar items are not taxable; 110.22 (7) massages, except when provided by a licensed health 110.23 care facility or professional or upon written referral from a 110.24 licensed health care facility or professional for treatment of 110.25 illness, injury, or disease; and 110.26 (8) the furnishing of lodging, board, and care services for 110.27 animals in kennels and other similar arrangements, but excluding 110.28 veterinary and horse boarding services. 110.29 The services listed in this paragraph are taxable under 110.30 section 297A.62 if the service is performed wholly within 110.31 Minnesota or if the service is performed partly within and 110.32 partly outside Minnesota and the greater proportion of the 110.33 service is performed in Minnesota, based on the cost of 110.34 performance. In applying the provisions of this chapter, the 110.35 terms "tangible personal property" and "sales at retail" include 110.36 taxable services and the provision of taxable services, unless 111.1 specifically provided otherwise. Services performed by an 111.2 employee for an employer are not taxable. Services performed by 111.3 a partnership or association for another partnership or 111.4 association are not taxable if one of the entities owns or 111.5 controls more than 80 percent of the voting power of the equity 111.6 interest in the other entity. Services performed between 111.7 members of an affiliated group of corporations are not taxable. 111.8 For purposes of this section, "affiliated group of corporations" 111.9 includes those entities that would be classified as members of 111.10 an affiliated group under United States Code, title 26, section 111.11 1504, and that are eligible to file a consolidated tax return 111.12 for federal income tax purposes. 111.13[EFFECTIVE DATE.] This section is effective for sales and 111.14 purchases made after June 30, 2001. 111.15 Sec. 7. Minnesota Statutes 2000, section 297A.61, is 111.16 amended by adding a subdivision to read: 111.17 Subd. 24. [TELECOMMUNICATIONS SERVICES.] (a) 111.18 "Telecommunications services" means the transmission, 111.19 conveyance, or routing of voice, data, audio, video, or any 111.20 other information or signals to a point, or between or among 111.21 points, by or through any electronic, satellite, optical, 111.22 microwave, or other medium or method now in existence or 111.23 hereafter devised, regardless of the protocol used for such 111.24 transmission, conveyance, or routing. 111.25 (b) Telecommunications services include the furnishing for 111.26 consideration of access to telephone services by a hotel to its 111.27 guests. 111.28 (c) Telecommunications services do not include: 111.29 (1) services purchased with a prepaid telephone calling 111.30 card; 111.31 (2) private communication service purchased by an agent 111.32 acting on behalf of the state lottery; 111.33 (3) information services; and 111.34 (4) purchases of telecommunications when the purchaser uses 111.35 the purchased services as a component part of or integrates such 111.36 service into another telecommunications service that is sold by 112.1 the purchaser in the normal course of business. 112.2 (d) For purposes of this subdivision, "information 112.3 services" means the offering of the capability for generating, 112.4 acquiring, storing, transforming, processing, retrieving, 112.5 utilizing, or making available information. 112.6[EFFECTIVE DATE.] This section is effective for sales and 112.7 purchases occurring after June 30, 2001. 112.8 Sec. 8. Minnesota Statutes 2000, section 297A.61, is 112.9 amended by adding a subdivision to read: 112.10 Subd. 25. [CABLE TELEVISION SERVICE.] "Cable television 112.11 service" means the transmission of video, audio, or other 112.12 programming service to purchasers, and the subscriber 112.13 interaction, if any, required for the selection or use of the 112.14 programming service, regardless of whether the programming is 112.15 transmitted over facilities owned or operated by the cable 112.16 service provider or over facilities owned or operated by one or 112.17 more dealers of communications services. The term includes 112.18 point-to-multipoint distribution services by which programming 112.19 is transmitted or broadcast by microwave or other equipment 112.20 directly to the subscriber's premises. The term includes basic, 112.21 extended, premium, pay-per-view, digital, and music services. 112.22[EFFECTIVE DATE.] This section is effective for sales and 112.23 purchases occurring after June 30, 2001. 112.24 Sec. 9. Minnesota Statutes 2000, section 297A.61, is 112.25 amended by adding a subdivision to read: 112.26 Subd. 26. [PRIVATE COMMUNICATION SERVICE.] "Private 112.27 communication service" means a communication service furnished 112.28 to a subscriber which entitles the subscriber to: 112.29 (1) exclusive or priority use of any communication channel 112.30 or group of channels; 112.31 (2) the use of an intercommunication system for the 112.32 subscriber's stations, or regardless of whether the channel, 112.33 group of channels, or intercommunication system may be connected 112.34 through switching; 112.35 (3) the switching capacity, extension lines and stations, 112.36 or other associated services that are provided in connection 113.1 with, and are necessary or unique to the use of, channels or 113.2 systems described in clause (1); or 113.3 (4) any combination of tunneling, encryption, 113.4 authentication, and access control technologies and services 113.5 used to carry traffic over the Internet, a managed Internet 113.6 provider network or provider's backbone. 113.7[EFFECTIVE DATE.] This section is effective for sales and 113.8 purchases occurring after June 30, 2001. 113.9 Sec. 10. Minnesota Statutes 2000, section 297A.61, is 113.10 amended by adding a subdivision to read: 113.11 Subd. 27. [DIRECT SATELLITE SERVICE.] "Direct satellite 113.12 service" means programming transmitted or broadcast by satellite 113.13 directly to the subscriber's premises without the use of ground 113.14 receiving or distribution equipment, except at the subscriber's 113.15 premises or in the uplink process to the satellite. 113.16[EFFECTIVE DATE.] This section is effective for sales and 113.17 purchases occurring after June 30, 2001. 113.18 Sec. 11. Minnesota Statutes 2000, section 297A.67, is 113.19 amended by adding a subdivision to read: 113.20 Subd. 13a. [INSTRUCTIONAL MATERIALS.] Instructional 113.21 materials, other than textbooks, that are prescribed for use in 113.22 conjunction with a course of study in a post-secondary school, 113.23 college, university, or private career school to students who 113.24 are regularly enrolled at such institutions are exempt. For 113.25 purposes of this subdivision, "instructional materials" means 113.26 materials required to be used directly in the completion of the 113.27 course of study, including, but not limited to, interactive CDs, 113.28 tapes, and computer software. 113.29 Instructional materials do not include general reference 113.30 works or other items incidental to the instructional process 113.31 such as pens, pencils, paper, folders, or computers. For 113.32 purposes of this subdivision, "school" and "private career 113.33 school" have the meanings given in subdivision 13. 113.34[EFFECTIVE DATE.] This section is effective for sales after 113.35 June 30, 2001. 113.36 Sec. 12. Minnesota Statutes 2000, section 297A.67, is 114.1 amended by adding a subdivision to read: 114.2 Subd. 26. [ENERGY EFFICIENT PRODUCTS.] (a) The following 114.3 products are exempt if they have an energy star label: 114.4 (1) any door or window that qualifies for the energy star 114.5 label for the northern climate; 114.6 (2) a residential lighting fixture or a compact fluorescent 114.7 bulb; 114.8 (3) insulation; and 114.9 (4) a ground source closed loop or air source heat pump. 114.10 (b) The following products are exempt if they have an 114.11 energyguide label that indicates that the product meets or 114.12 exceeds the standards listed below: 114.13 (1) an electric heat pump hot water heater with an energy 114.14 factor of at least 1.9; 114.15 (2) a natural gas water heater with an energy factor of at 114.16 least 0.62; 114.17 (3) a natural gas heat pump that has a coefficient of 114.18 performance of at least 1.25 for heating and at least 0.70 for 114.19 cooling; 114.20 (4) a refrigerator with a capacity of at least ten cubic 114.21 feet that uses less than 500 kilowatt-hours per year; 114.22 (5) a window air conditioner with an energy efficiency 114.23 rating greater than 11.0; 114.24 (6) a dishwasher that uses less than 425 kilowatt-hours per 114.25 year; 114.26 (7) a clothes washer that uses less than 250 kilowatt-hours 114.27 per year or any horizontal axis washer; 114.28 (8) a central air conditioner with a seasonal energy 114.29 efficiency rating greater than 14.0; 114.30 (9) a furnace with an annual fuel efficiency rating greater 114.31 than 93 percent; and 114.32 (10) a boiler with an annual fuel efficiency rating greater 114.33 than 88 percent. 114.34 (c) For purposes of this subdivision, "energy star label" 114.35 means the label granted to certain products that meet United 114.36 States Environmental Protection Agency and United States 115.1 Department of Energy criteria for energy efficiency. For 115.2 purposes of this subdivision, "energyguide label" means the 115.3 label that the United State Federal Trade Commissioner requires 115.4 manufacturers to apply to certain appliances under United States 115.5 Code, title 16, part 305. 115.6[EFFECTIVE DATE.] This section is effective for sales and 115.7 purchases made after June 30, 2001, and before January 1, 2007. 115.8 Sec. 13. Minnesota Statutes 2000, section 297A.67, is 115.9 amended by adding a subdivision to read: 115.10 Subd. 27. [PHOTOVOLTAIC EQUIPMENT.] A photovoltaic device 115.11 is exempt. For purposes of this section, "photovoltaic device" 115.12 means a solid-state electrical device, such as a solar module, 115.13 that converts light directly into direct current electricity of 115.14 voltage-current characteristics that are a function of the 115.15 characteristics of the light source and the materials in and 115.16 design of the device. A "solar module" is a photovoltaic device 115.17 that produces a specified power output under defined test 115.18 conditions, usually composed of groups of solar cells connected 115.19 in series, in parallel, or in series-parallel combinations. 115.20[EFFECTIVE DATE.] This section is effective for sales and 115.21 purchases made after June 30, 2001, and before January 1, 2007. 115.22 Sec. 14. Minnesota Statutes 2000, section 297A.68, 115.23 subdivision 3, is amended to read: 115.24 Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 115.25 SERVICES.] (a) Materials stored, used, or consumed in providing 115.26 a taxable service listed in section 297A.61, subdivision 16, 115.27 paragraph(g)(f), intended to be sold ultimately at retail are 115.28 exempt. 115.29 (b) This exemption includes, but is not limited to: 115.30 (1) chemicals, lubricants, packaging materials, seeds, 115.31 trees, fertilizers, and herbicides, if these items are used or 115.32 consumed in providing the taxable service; 115.33 (2) chemicals used to treat waste generated as a result of 115.34 providing the taxable service; 115.35 (3) accessory tools, equipment, and other items that are 115.36 separate detachable units used in providing the service and that 116.1 have an ordinary useful life of less than 12 months; and 116.2 (4) fuel, electricity, gas, and steam used or consumed in 116.3 the production process, except that electricity, gas, or steam 116.4 used for space heating or lighting is exempt only if it is 116.5 necessary to produce that particular taxable service. 116.6 (c) This exemption does not include machinery, equipment, 116.7 implements, tools, accessories, appliances, contrivances, 116.8 furniture, and fixtures used in providing the taxable service. 116.9[EFFECTIVE DATE.] This section is effective for sales and 116.10 purchases made after June 30, 2001. 116.11 Sec. 15. Minnesota Statutes 2000, section 297A.68, 116.12 subdivision 19, is amended to read: 116.13 Subd. 19. [PETROLEUM PRODUCTS.] The following petroleum 116.14 products are exempt: 116.15 (1) products upon which a tax has been imposed and paid 116.16 under chapter 296A, and for which no refund has been or will be 116.17 allowed because the buyer used the fuel for nonhighway use; 116.18 (2) products that are used in the improvement of 116.19 agricultural land by constructing, maintaining, and repairing 116.20 drainage ditches, tile drainage systems, grass waterways, water 116.21 impoundment, and other erosion control structures; 116.22 (3) products purchased by a transit system receiving 116.23 financial assistance under section 174.24, 256B.0625, 116.24 subdivision 17, or 473.384; 116.25 (4) products purchased by an ambulance service licensed 116.26 under chapter 144E; 116.27 (5) products used in a passenger snowmobile, as defined in 116.28 section 296A.01, subdivision 39, for off-highway business use as 116.29 part of the operations of a resort as provided under section 116.30 296A.16, subdivision 2, clause (2); or 116.31(5)(6) products purchased by a state or a political 116.32 subdivision of a state for use in motor vehicles exempt from 116.33 registration under section 168.012, subdivision 1, paragraph (b). 116.34 Sec. 16. Minnesota Statutes 2000, section 297A.68, is 116.35 amended by adding a subdivision to read: 116.36 Subd. 35. [GEOTHERMAL EQUIPMENT.] Equipment used in a 117.1 geothermal heating and cooling system, and materials used for 117.2 installation of the system, are exempt. 117.3[EFFECTIVE DATE.] This section is effective for sales after 117.4 June 30, 2001. 117.5 Sec. 17. Minnesota Statutes 2000, section 297A.68, is 117.6 amended by adding a subdivision to read: 117.7 Subd. 36. [TELECOMMUNICATIONS EQUIPMENT.] (a) 117.8 Telecommunications machinery and equipment purchased or leased 117.9 for use directly by a telecommunications service provider 117.10 primarily in the provision of telecommunications services that 117.11 are ultimately to be sold at retail are exempt, regardless of 117.12 whether purchased by the owner, a contractor, or a subcontractor. 117.13 (b) For purposes of this subdivision, "telecommunications 117.14 machinery and equipment" includes, but is not limited to: 117.15 (1) machinery, equipment, and fixtures utilized in 117.16 receiving, initiating, amplifying, processing, transmitting, 117.17 retransmitting, recording, switching, or monitoring 117.18 telecommunications services, such as computers, transformers, 117.19 amplifiers, routers, bridges, repeaters, multiplexers, and other 117.20 items performing comparable functions; 117.21 (2) machinery, equipment, and fixtures used in the 117.22 transportation of telecommunications services, radio 117.23 transmitters and receivers, satellite equipment, microwave 117.24 equipment, and other transporting media, but not wire, cable, 117.25 fiber, poles, or conduit; 117.26 (3) ancillary machinery, equipment, and fixtures that 117.27 regulate, control, protect, or enable the machinery in clauses 117.28 (1) and (2) to accomplish its intended function, such as 117.29 auxiliary power supply, test equipment, towers, heating, 117.30 ventilating and air conditioning equipment necessary to the 117.31 operation of the telecommunications equipment; and software 117.32 necessary to the operation of the telecommunications equipment; 117.33 and 117.34 (4) repair and replacement parts, including accessories, 117.35 whether purchased as spare parts, repair parts, or as upgrades 117.36 or modifications to qualified machinery or equipment. 118.1 (c) For purposes of this subdivision, "telecommunications 118.2 services" means telecommunications services as defined in 118.3 section 297A.61, subdivision 24, paragraph (a), only. 118.4[EFFECTIVE DATE.] This section is effective for purchases 118.5 and lease payments, including payments made on existing leases, 118.6 made after June 30, 2001. 118.7 Sec. 18. Minnesota Statutes 2000, section 297A.70, 118.8 subdivision 2, is amended to read: 118.9 Subd. 2. [SALES TO GOVERNMENT.] (a) All sales, except 118.10 those listed in paragraph (b), to the following governments and 118.11 political subdivisions, or to the listed agencies or 118.12 instrumentalities of governments and political subdivisions, are 118.13 exempt: 118.14 (1) the United States and its agencies and 118.15 instrumentalities; 118.16 (2) school districts, the University of Minnesota, state 118.17 universities, community colleges, technical colleges, state 118.18 academies, the Perpich Minnesota center for arts education, and 118.19 an instrumentality of a political subdivision that is accredited 118.20 as an optional/special function school by the North Central 118.21 Association of Colleges and Schools; 118.22 (3) hospitals and nursing homes owned and operated by 118.23 political subdivisions of the state; 118.24 (4) the state department of transportation; 118.25 (5) the metropolitan council, for its purchases of 118.26 materials, supplies, and equipment used or consumed for 118.27 operations under section 473.384; 118.28 (6) other states or political subdivisions of other states, 118.29 if the sale would be exempt from taxation if it occurred in that 118.30 state; and 118.31(5)(7) sales to public libraries, public library systems, 118.32 multicounty, multitype library systems as defined in section 118.33 134.001, county law libraries under chapter 134A, state agency 118.34 libraries, the state library under section 480.09, and the 118.35 legislative reference library. 118.36 (b) This exemption does not apply to the sales of the 119.1 following products and services: 119.2 (1) building, construction, or reconstruction materials 119.3 purchased by a contractor or a subcontractor as a part of a 119.4 lump-sum contract or similar type of contract with a guaranteed 119.5 maximum price covering both labor and materials for use in the 119.6 construction, alteration, or repair of a building or facility; 119.7 (2) construction materials purchased by tax exempt entities 119.8 or their contractors to be used in constructing buildings or 119.9 facilities which will not be used principally by the tax exempt 119.10 entities; 119.11 (3) the leasing of a motor vehicle as defined in section 119.12 297B.01, subdivision 5, except for leases entered into by the 119.13 United States or its agencies or instrumentalities; or 119.14 (4) meals and lodging as defined under section 297A.61, 119.15 subdivisions 3, paragraph (d), and 16, paragraph (c), except for 119.16 meals and lodging purchased directly by the United States or its 119.17 agencies or instrumentalities. 119.18 (c) As used in this subdivision, "school districts" means 119.19 public school entities and districts of every kind and nature 119.20 organized under the laws of the state of Minnesota, and any 119.21 instrumentality of a school district, as defined in section 119.22 471.59. 119.23 Sec. 19. Minnesota Statutes 2000, section 297A.70, 119.24 subdivision 4, is amended to read: 119.25 Subd. 4. [SALES TO NONPROFIT GROUPS.] (a) All sales, 119.26 except those listed in paragraph (b), to the following 119.27 "nonprofit organizations" are exempt: 119.28 (1) an entity organized and operated exclusively for 119.29 charitable, religious, or educational purposes if the item 119.30 purchased is used in the performance of charitable, religious, 119.31 or educational functions; 119.32 (2) any senior citizen group or association of groups that: 119.33 (i) in general limits membership to persons who are either 119.34 age 55 or older, or physically disabled; and 119.35 (ii) is organized and operated exclusively for pleasure, 119.36 recreation, and other nonprofit purposes, no part of the net 120.1 earnings of which inures to the benefit of any private 120.2 shareholders; and 120.3 (3) an entity organized and operated exclusively to 120.4 maintain a cemetery owned by a religious organization. 120.5 (b) This exemption does not apply to the following sales: 120.6 (1) building, construction, or reconstruction materials 120.7 purchased by a contractor or a subcontractor as a part of a 120.8 lump-sum contract or similar type of contract with a guaranteed 120.9 maximum price covering both labor and materials for use in the 120.10 construction, alteration, or repair of a building or facility; 120.11 (2) construction materials purchased by tax-exempt entities 120.12 or their contractors to be used in constructing buildings or 120.13 facilities that will not be used principally by the tax-exempt 120.14 entities; and 120.15 (3) meals and lodging as defined under section 297A.61, 120.16 subdivisions 3, paragraph (d), and 16, paragraph (c); and 120.17 (4) leasing of a motor vehicle as defined in section 120.18 297B.01, subdivision 5, except as provided in paragraph (c). 120.19 (c) This exemption applies to the leasing of a motor 120.20 vehicle as defined in section 297B.01, subdivision 5, only if 120.21 the vehicle is: 120.22 (1) a truck, as defined in section 168.011, a bus, as 120.23 defined in section 168.011, or a passenger automobile, as 120.24 defined in section 168.011, if the automobile is designed and 120.25 used for carrying more than nine persons including the driver; 120.26 and 120.27 (2) intended to be used primarily to transport tangible 120.28 personal property or individuals, other than employees, to whom 120.29 the organization provides service in performing its charitable, 120.30 religious, or educational purpose. 120.31 (d) A limited liability company also qualifies for 120.32 exemption under this subdivision if (1) it consists of a sole 120.33 member that would qualify for the exemption, and (2) the items 120.34 purchased qualify for the exemption. 120.35 Sec. 20. Minnesota Statutes 2000, section 297A.70, 120.36 subdivision 7, is amended to read: 121.1 Subd. 7. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 121.2 Sales, except for those listed in paragraph (c), to a hospital 121.3 are exempt, if the items purchased are used in providing 121.4 hospital services. For purposes of this subdivision, "hospital" 121.5 means a hospital organized and operated for charitable purposes 121.6 within the meaning of section 501(c)(3) of the Internal Revenue 121.7 Code, and licensed under chapter 144 or by any other 121.8 jurisdiction, and "hospital services" are services authorized or 121.9 required to be performed by a "hospital" under chapter 144. 121.10 (b) Sales, except for those listed in paragraph (c), to an 121.11 outpatient surgical center are exempt, if the items purchased 121.12 are used in providing outpatient surgical services. For 121.13 purposes of this subdivision, "outpatient surgical center" means 121.14 an outpatient surgical center organized and operated for 121.15 charitable purposes within the meaning of section 501(c)(3) of 121.16 the Internal Revenue Code, and licensed under chapter 144 or by 121.17 any other jurisdiction. For the purposes of this subdivision, 121.18 "outpatient surgical services" means: (1) services authorized 121.19 or required to be performed by an outpatient surgical center 121.20 under chapter 144 or under the applicable licensure law of any 121.21 other jurisdiction; and (2) urgent care. For purposes of this 121.22 subdivision, "urgent care" means health services furnished to a 121.23 person whose medical condition is sufficiently acute to require 121.24 treatment unavailable through, or inappropriate to be provided 121.25 by, a clinic or physician's office, but not so acute as to 121.26 require treatment in a hospital emergency room. 121.27 (c) This exemption does not apply to the following products 121.28 and services: 121.29 (1) purchases made by a clinic, physician's office, or any 121.30 other medical facility not operating as a hospital or outpatient 121.31 surgical center, even though the clinic, office, or facility may 121.32 be owned and operated by a hospital or outpatient surgical 121.33 center; 121.34 (2) sales under section 297A.61, subdivisions 3, paragraph 121.35 (d), and 16, paragraph (c); 121.36 (3) building and construction materials used in 122.1 constructing buildings or facilities that will not be used 122.2 principally by the hospital or outpatient surgical center; 122.3 (4) building, construction, or reconstruction materials 122.4 purchased by a contractor or a subcontractor as a part of a 122.5 lump-sum contract or similar type of contract with a guaranteed 122.6 maximum price covering both labor and materials for use in the 122.7 construction, alteration, or repair of a hospital or outpatient 122.8 surgical center; or 122.9 (5) the leasing of a motor vehicle as defined in section 122.10 297B.01, subdivision 5. 122.11 (d) A limited liability company also qualifies for 122.12 exemption under this subdivision if (1) it consists of a sole 122.13 member that would qualify for the exemption, and (2) the items 122.14 purchased qualify for the exemption. 122.15 Sec. 21. Minnesota Statutes 2000, section 297A.70, 122.16 subdivision 10, is amended to read: 122.17 Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] (a) Tickets 122.18 or admissions to the premises of or events sponsored by an 122.19 organization that provides an opportunity for citizens of the 122.20 state to participate in the creation, performance, or 122.21 appreciation of the arts are exempt if the organization is 122.22 either (1) a tax-exempt organization within the meaning of 122.23 Minnesota Statutes 1980, section 290.05, subdivision 1, clause 122.24 (i), or (2) a municipal board that promotes cultural and arts 122.25 activities. The exemption provided with respect to a municipal 122.26 board applies only to tickets and admissions to events sponsored 122.27 by the board. For purposes of this exemption, an event is 122.28 sponsored by an organization if (i) the organization actively 122.29 participates in planning and conducting the event, (ii) the 122.30 organization assumes the risk of any financial losses as a 122.31 result of the event, and (iii) the entire net proceeds from the 122.32 event go to the organization. 122.33 (b) Tickets or admissions to the premises of the Minnesota 122.34 zoological garden are exempt, provided that the exemption under 122.35 this paragraph does not apply to tickets or admissions to 122.36 performances or events held on the premises unless the 123.1 performance or event is sponsored and conducted exclusively by 123.2 the Minnesota zoological board or employees of the Minnesota 123.3 zoological garden. 123.4[EFFECTIVE DATE.] This section, paragraph (a), is effective 123.5 for sales and purchases occurring after December 31, 2001. This 123.6 section, paragraph (b), is effective for sales after June 30, 123.7 2001. 123.8 Sec. 22. Minnesota Statutes 2000, section 297A.70, 123.9 subdivision 13, is amended to read: 123.10 Subd. 13. [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 123.11 (a) The following sales by the specified organizations for 123.12 fundraising purposes are exempt, subject to the limitations 123.13 listed in paragraph (b): 123.14 (1) all sales made by an organization that exists solely 123.15 for the purpose of providing educational or social activities 123.16 for young people primarily age 18 and under; 123.17 (2) all sales made by an organization that is a senior 123.18 citizen group or association of groups if (i) in general it 123.19 limits membership to persons age 55 or older; (ii) it is 123.20 organized and operated exclusively for pleasure, recreation, and 123.21 other nonprofit purposes; and (iii) no part of its net earnings 123.22 inures to the benefit of any private shareholders; 123.23 (3) the sale or use of tickets or admissions to a golf 123.24 tournament held in Minnesota if the beneficiary of the 123.25 tournament's net proceeds qualifies as a tax-exempt organization 123.26 under section 501(c)(3) of the Internal Revenue Code; and 123.27 (4) sales of gum, candy, and candy products sold for 123.28 fundraising purposes by a nonprofit organization that provides 123.29 educational and social activities primarily for young people 18 123.30 years of age and under. 123.31 (b) The exemptions listed in paragraph (a) are limited in 123.32 the following manner: 123.33 (1) the exemption under paragraph (a), clauses (1) and (2), 123.34 applies only if the gross annual receipts of the organization 123.35 from fundraising do not exceed $10,000; and 123.36 (2) the exemption under paragraph (a), clause (1), does not 124.1 apply if the sales are derived from admission charges or from 124.2 activities for which the money must be deposited with the school 124.3 district treasurer under section 123B.49, subdivision 2, or be 124.4 recorded in the same manner as other revenues or expenditures of 124.5 the school district under section 123B.49, subdivision 4. 124.6 (c) Sales of tangible personal property are exempt if the 124.7 entire proceeds, less the necessary expenses for obtaining the 124.8 property, will be contributed to a registered combined 124.9 charitable organization described in section 309.501, to be used 124.10 exclusively for charitable, religious, or educational purposes, 124.11 and the registered combined charitable organization has given 124.12 its written permission for the sale. Sales that occur over a 124.13 period of more than 24 days per year are not exempt under this 124.14 paragraph. 124.15 (d) For purposes of this subdivision, a club, association, 124.16 or other organization of elementary or secondary school students 124.17 organized for the purpose of carrying on sports, educational, or 124.18 other extracurricular activities is a separate organization from 124.19 the school district or school for purposes of applying the 124.20 $10,000 limit. 124.21[EFFECTIVE DATE.] This section is effective for sales and 124.22 purchases made after June 30, 2001. 124.23 Sec. 23. Minnesota Statutes 2000, section 297A.71, 124.24 subdivision 6, is amended to read: 124.25 Subd. 6. [BUSINESS INCUBATOR AND INDUSTRIAL PARK.] 124.26 Building materials and supplies for construction of a facility 124.27 that includes a business incubator and industrial park are 124.28 exempt if the facility: 124.29 (1) is owned and operated by a nonprofit charitable 124.30 organization that qualifies for tax exemption under section 124.31 501(c)(3) of the Internal Revenue Code; 124.32 (2) is used for the development of nonretail businesses, 124.33 offering access to equipment, space, services, and advice to the 124.34 tenant businesses, for the purpose of encouraging economic 124.35 development and job creation in the area served by the 124.36 organization, and emphasizes development of businesses that 125.1 manufacture products from materials found in the waste stream, 125.2 or manufacture alternative energy and conservation systems, or 125.3 make use of emerging environmental technologies; 125.4 (3) includes in its structure systems of material and 125.5 energy exchanges that use waste products from one industrial 125.6 process as sources of energy and material for other processes; 125.7 and 125.8 (4) makes use of solar and wind energy technology and 125.9 incorporates salvaged materials in its construction. 125.10 A limited liability company also qualifies for exemption 125.11 under this subdivision if (i) it consists of a sole member that 125.12 would qualify for the exemption, and (ii) the items purchased 125.13 qualify for the exemption. 125.14 Sec. 24. Minnesota Statutes 2000, section 297A.71, is 125.15 amended by adding a subdivision to read: 125.16 Subd. 23. [CONSTRUCTION MATERIALS AND EQUIPMENT; WASTE 125.17 TIRES COGENERATION ELECTRIC GENERATING FACILITY.] Materials and 125.18 supplies used or consumed in, and equipment incorporated into, 125.19 the construction, improvement, or expansion of a facility using 125.20 waste tires to generate electricity are exempt if: 125.21 (1) the facility utilizes waste tires as a primary fuel in 125.22 generating electricity; 125.23 (2) the facility is a cogeneration facility; 125.24 (3) the installed capacity of the facility is one to 25 125.25 megawatts; and 125.26 (4) construction of the facility meets the requirements of 125.27 section 177.43. 125.28[EFFECTIVE DATE.] This section is effective for purchases 125.29 and sales made after the date of final enactment. 125.30 Sec. 25. Minnesota Statutes 2000, section 297A.71, is 125.31 amended by adding a subdivision to read: 125.32 Subd. 24. [POULTRY LITTER AND OTHER BIOMASS GENERATION 125.33 FACILITY CONSTRUCTION MATERIALS AND EQUIPMENT.] Materials and 125.34 supplies used or consumed in, and equipment incorporated into, 125.35 the construction, improvement, or expansion of a facility using 125.36 biomass to generate electricity are exempt if: 126.1 (1) the facility is designed to utilize poultry litter 126.2 biomass or other biomass as established in section 216B.2424, as 126.3 a primary fuel source; 126.4 (2) the facility generates power that will be sold under a 126.5 contract approved by the public utilities commission in 126.6 accordance with the biomass mandate imposed under section 126.7 216B.2424; and 126.8 (3) construction of the facility meets the requirements of 126.9 section 177.43. 126.10[EFFECTIVE DATE.] This section is effective for purchases 126.11 and sales after June 30, 2001, and before January 1, 2003. 126.12 Sec. 26. Minnesota Statutes 2000, section 297A.71, is 126.13 amended by adding a subdivision to read: 126.14 Subd. 25. [CONSTRUCTION MATERIALS FOR QUALIFIED LOW-INCOME 126.15 HOUSING PROJECTS.] (a) Purchases of materials and supplies used 126.16 or consumed in and equipment incorporated into the construction, 126.17 improvement, or expansion of qualified low-income housing 126.18 projects are exempt from the tax imposed under this chapter if 126.19 the owner of the qualified low-income housing project is: 126.20 (1) the public housing agency or housing and redevelopment 126.21 authority of a political subdivision; 126.22 (2) an entity exercising the powers of a housing and 126.23 redevelopment authority within a political subdivision; or 126.24 (3) a limited partnership in which the sole general partner 126.25 is an authority under clause (1) or an entity under clause (2). 126.26 This exemption applies regardless of whether the purchases 126.27 are made by the owner of the facility or a contractor. 126.28 (b) For purposes of this exemption, "qualified low-income 126.29 housing project" means: 126.30 (1) a housing or mixed use project in which at least 20 126.31 percent of the residential units are qualifying low-income 126.32 rental housing units as defined in section 273.126; 126.33 (2) a federally assisted low-income housing project 126.34 financed by a mortgage insured or held by the United States 126.35 Department of Housing and Urban Development under United States 126.36 Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 127.1 1715z-1; United States Code, title 42, section 1437f; the Native 127.2 American Housing Assistance and Self-Determination Act, United 127.3 States Code, title 25, section 4101 et seq.; or any similar 127.4 successor federal low-income housing program; 127.5 (3) a qualified low-income housing project as defined in 127.6 United States Code, title 26, section 42(g), meeting all of the 127.7 requirements for a low-income housing credit under section 42 of 127.8 the Internal Revenue Code regardless of whether the project 127.9 actually applies for or receives a low-income housing credit; or 127.10 (4) a project that will be operated in compliance with 127.11 Internal Revenue Service revenue procedure 96-32. 127.12[EFFECTIVE DATE.] This section is effective for sales and 127.13 purchases occurring after June 30, 2001. 127.14 Sec. 27. Minnesota Statutes 2000, section 297A.71, is 127.15 amended by adding a subdivision to read: 127.16 Subd. 26. [CONSTRUCTION MATERIALS AND EQUIPMENT; 127.17 AGRICULTURAL PROCESSING MATERIALS.] Materials and supplies used 127.18 or consumed in, and machinery and equipment incorporated into 127.19 the construction, improvement, or expansion of a soybean oilseed 127.20 processing facility are exempt if: 127.21 (1) the facility is owned and operated by a cooperative 127.22 organized under chapter 308A; and 127.23 (2) the facility is located in a county that has a 127.24 population of less than 21,000 according to the most recent 127.25 decennial census. 127.26 Sec. 28. Minnesota Statutes 2000, section 297A.80, is 127.27 amended to read: 127.28 297A.80 [TAXES IN OTHER STATES; OFFSET AGAINST USE TAX.] 127.29 If an article of tangible personal property or an item 127.30 listed in section 297A.63 has already been taxed by another 127.31 state and any subdivision thereof for its sale, storage, use, or 127.32 other consumption in an amount less than the tax imposed by this 127.33 chapter, then as to the person who paid the tax in the other 127.34 state or any subdivision thereof, section 297A.63 applies only 127.35 at a rate measured by the difference between the rate imposed 127.36 under section 297A.62 and the rate by which the previous tax was 128.1 computed. If the tax imposed in the other state or any 128.2 subdivision thereof is equal to or greater than the tax imposed 128.3 in this state, then no tax is due from that person under section 128.4 297A.63. The credit shall be applied first against the amount 128.5 of any use tax due the state, and any unused portion of the 128.6 credit shall then be applied against any use tax due a 128.7 subdivision. 128.8[EFFECTIVE DATE.] This section is effective for sales and 128.9 purchases occurring after December 31, 2001. 128.10 Sec. 29. Minnesota Statutes 2000, section 297A.82, 128.11 subdivision 1, is amended to read: 128.12 Subdivision 1. [REQUIREMENTS FOR REGISTRATION.] An 128.13 aircraft must not be registered or licensed in this state unless 128.14 the applicant presents proof that the sales or use tax imposed 128.15 by this chapter has been paid or that the transaction is exempt 128.16 from the sales and use tax. The exemption for an occasional 128.17 sale under section 297A.67, subdivision 23,or 297A.68,128.18subdivision 25,does not apply to the sale or purchase of an 128.19 aircraft. 128.20[EFFECTIVE DATE.] This section is effective for sales and 128.21 purchases occurring after December 31, 2001. 128.22 Sec. 30. Minnesota Statutes 2000, section 609.75, 128.23 subdivision 1, is amended to read: 128.24 Subdivision 1. [LOTTERY.] (a) A lottery is a plan which 128.25 provides for the distribution of money, property or other reward 128.26 or benefit to persons selected by chance from among participants 128.27 some or all of whom have given a consideration for the chance of 128.28 being selected. A participant's payment for use of a 900 128.29 telephone number or another means of communication that results 128.30 in payment to the sponsor of the plan constitutes consideration 128.31 under this paragraph. 128.32 (b) An in-package chance promotion is not a lottery if all 128.33 of the following are met: 128.34 (1) participation is available, free and without purchase 128.35 of the package, from the retailer or by mail or toll-free 128.36 telephone request to the sponsor for entry or for a game piece; 129.1 (2) the label of the promotional package and any related 129.2 advertising clearly states any method of participation and the 129.3 scheduled termination date of the promotion; 129.4 (3) the sponsor on request provides a retailer with a 129.5 supply of entry forms or game pieces adequate to permit free 129.6 participation in the promotion by the retailer's customers; 129.7 (4) the sponsor does not misrepresent a participant's 129.8 chances of winning any prize; 129.9 (5) the sponsor randomly distributes all game pieces and 129.10 maintains records of random distribution for at least one year 129.11 after the termination date of the promotion; 129.12 (6) all prizes are randomly awarded if game pieces are not 129.13 used in the promotion; and 129.14 (7) the sponsor provides on request of a state agency a 129.15 record of the names and addresses of all winners of prizes 129.16 valued at $100 or more, if the request is made within one year 129.17 after the termination date of the promotion. 129.18 (c) Except as provided by section 349.40, acts in this 129.19 state in furtherance of a lottery conducted outside of this 129.20 state are included notwithstanding its validity where conducted. 129.21 (d) The distribution of property, or other reward or 129.22 benefit by an employer to persons selected by chance from among 129.23 participants who have made a contribution through a payroll or 129.24 pension deduction campaign to a registered combined charitable 129.25 organization, within the meaning of section 309.501, as a 129.26 precondition to the chance of being selected, is not a lottery 129.27 if: 129.28 (1) all of the persons eligible to be selected are employed 129.29 by or retirees of the employer; and 129.30 (2) the cost of the property or other reward or benefit 129.31 distributed and all costs associated with the distribution are 129.32 borne by the employer; and129.33(3) the total amount actually expended by the employer to129.34obtain the property or other rewards or benefits distributed by129.35the employer during the calendar year does not exceed $500. 129.36 Sec. 31. Laws 1986, chapter 396, section 5, is amended to 130.1 read: 130.2 Sec. 5. [LIQUOR, LODGING, AND RESTAURANT TAXES.] 130.3 The city may, by resolution, levy in addition to taxes 130.4 authorized by other law: 130.5 (1) a sales tax of not more than three percent on the gross 130.6 receipts on retail on-sales of intoxicating liquor and fermented 130.7 malt beverages described in section 473.592 occurring in the 130.8 downtown taxing area, provided that this tax may not be imposed 130.9 if sales of intoxicating liquor and fermented malt beverages are 130.10 exempt from taxation under chapter 297A; 130.11 (2) a sales tax of not more than three percent on the gross 130.12 receipts from the furnishing for consideration of lodging 130.13 described in section 473.592 by a hotel or motel which has more 130.14 than 50 rooms available for lodging; the tax imposed under this 130.15 clause shall be at a rate that, when added to the sum of the 130.16 rate of the sales tax imposed under Minnesota Statutes, chapter 130.17 297A, the rate of the sales tax imposed under section 4, and the 130.18 rate of any other taxes on lodging in the city of Minneapolis, 130.19 equals1213 percent; and 130.20 (3) a sales tax of not more than three percent on the gross 130.21 receipts on all sales of food primarily for consumption on or 130.22 off the premises by restaurants and places of refreshment as 130.23 defined by resolution of the city that occur within the downtown 130.24 taxing area. 130.25 These taxes shall be applied solely to pay costs of collection 130.26 and to pay or secure the payment of any principal of, premium 130.27 and interest on any bonds or any costs referred to in section 4, 130.28 subdivision 3. The commissioner of revenue may enter into 130.29 appropriate agreements with the city to provide for the 130.30 collection of these taxes by the state on behalf of the city. 130.31 The commissioner may charge the city a reasonable fee for its 130.32 collection from the proceeds of any taxes. These taxes shall be 130.33 subject to the same interest penalties and enforcement 130.34 provisions as the taxes imposed under section 473.592. 130.35 Sec. 32. Laws 1996, chapter 471, article 2, section 29, is 130.36 amended to read: 131.1 Sec. 29. [CITY OF HERMANTOWN; SALES AND USE TAX.] 131.2 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] (a) 131.3 Notwithstanding Minnesota Statutes, section 477A.016, or any 131.4 other contrary provision of law, ordinance, or city charter, the 131.5 city of Hermantown may, by ordinance, impose an additional sales 131.6 and use tax of up to one percent on salestransactions, storage, 131.7 and use taxable pursuant to Minnesota Statutes, chapter 297A, 131.8 that occur within the city. 131.9 (b) The proceeds of the first one-half of one percent of 131.10 tax imposed under this section must be usedto meet the costs of131.11 by the city for the following projects: 131.12 (1) extending a sewer interceptor line; 131.13 (2) construction of a booster pump station, reservoirs, and 131.14 related improvements to the water system; and 131.15 (3) construction of a police and fire station. 131.16 (c) Revenues received from the remaining one-half of one 131.17 percent of the tax authorized under this section must be used by 131.18 the city to pay all or part of the capital and administrative 131.19 costs of developing, acquiring, constructing, and initially 131.20 furnishing and equipping for the following projects: 131.21 (1) construction of a community education and recreation 131.22 center that includes a senior citizens center, fitness center, 131.23 swimming pool, community meeting and education room, community 131.24 technology library, and indoor track; 131.25 (2) renovation or construction of an addition to the 131.26 school's existing ice facility; 131.27 (3) construction of a new city hall; 131.28 (4) construction of a new public works garage; 131.29 (5) construction of frontage roads and other traffic 131.30 control measures along Highway 53 within the city of Hermantown; 131.31 and 131.32 (6) construction of bleachers, and outdoor soccer, 131.33 football, and track facilities at the school. 131.34 (d) Authorized expenses include, but are not limited to, 131.35 acquiring property, paying construction, administrative, and 131.36 operating expenses related to the development of the projects 132.1 listed in paragraph (c), paying debt service on bonds or other 132.2 obligations, including lease obligations, issued to finance 132.3 construction, expansion, or improvement of the projects listed 132.4 in paragraph (c), and other compatible uses, including but not 132.5 limited to, parking, lighting, and landscaping. 132.6 Subd. 2. [REFERENDUM.] (a) If the Hermantown city council 132.7 proposes to impose the sales tax authorized by this section, it 132.8 shall conduct a referendum on the issue. 132.9 (b) If the Hermantown city council initially imposes the 132.10 tax at a rate less than one percent and proposes increasing it 132.11 at a later date up to the authorized rate in subdivision 1, it 132.12 shall conduct a referendum on the increase. 132.13 (c) The question of imposing or increasing the tax must be 132.14 submitted to the voters at a special or general election. The 132.15 tax may not be imposed unless a majority of votes cast on the 132.16 question of imposing the tax are in the affirmative. The 132.17 commissioner of revenue shall prepare a suggested form of 132.18 question to be presented at the election. This subdivision 132.19 applies notwithstanding any city charter provision to the 132.20 contrary. 132.21 Subd. 3. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 132.22 TAXES.] A sales tax imposed under this section must be reported 132.23 and paid to the commissioner of revenue with the state sales 132.24 taxes, and be subject to the same penalties, interest, and 132.25 enforcement provisions. The proceeds of the tax, less refunds 132.26 and a proportionate share of the cost of collection, shall be 132.27 remitted at least quarterly to the city. The commissioner shall 132.28 deduct from the proceeds remitted an amount that equals the 132.29 indirect statewide cost as well as the direct and indirect 132.30 department costs necessary to administer, audit, and collect the 132.31 tax. The amount deducted shall be deposited in the state 132.32 general fund. 132.33 Subd. 3a. [BONDING AUTHORITY.] (a) The city may issue 132.34 general obligation bonds under Minnesota Statutes, chapter 475, 132.35 to finance the costs in subdivision 1, paragraph (c). The total 132.36 amount of bonds issued for the projects under subdivision 1, 133.1 paragraph (c), may not exceed $12,900,000 in the aggregate. An 133.2 election to approve the bonds is not required. 133.3 (b) The bonds are not included in computing any debt 133.4 limitation applicable to the city and the levy of taxes under 133.5 Minnesota Statutes, section 475.61, to pay principal of and 133.6 interest on the bonds is not subject to any levy limitation. 133.7 (c) The taxes authorized under this section may be pledged 133.8 to and used for the payment of the bonds and any bonds issued to 133.9 refund them. 133.10 Subd. 4. [TERMINATION.] The portion of the tax authorized 133.11 under this section to finance the improvements described in 133.12 subdivision 1, paragraph (b), terminates at the later of (1) ten 133.13 years after the date of initial imposition of the tax, or (2) on 133.14 the first day of the second month next succeeding a 133.15 determination by the city council that sufficient funds have 133.16 been received from that portion of the tax dedicated to finance 133.17thethose improvementsdescribed in subdivision 1, clauses (1)133.18to (3),and to prepay or retire at maturity the principal, 133.19 interest, and premium due on any bonds issued for the 133.20 improvements. The portion of the tax authorized under this 133.21 section to finance the improvements described in subdivision 1, 133.22 paragraph (c), terminates when the revenues raised are 133.23 sufficient to finance those improvements, up to an amount equal 133.24 to $12,900,000 plus any interest, premium, and other costs 133.25 associated with the bonds issued under subdivision 3a. The city 133.26 council may terminate this portion of the tax earlier. Any 133.27 funds remaining after completion of the improvements and 133.28 retirement or redemption of the bonds may be placed in the 133.29 general fund of the city. 133.30 Subd. 5. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 133.31 effective the day after final enactment, upon compliance with 133.32 Minnesota Statutes, section 645.021, subdivision 3, by the city 133.33 of Hermantown. 133.34[EFFECTIVE DATE.] This section is effective the day after 133.35 final enactment, upon compliance with Minnesota Statutes, 133.36 section 645.021, subdivision 3, by the city of Hermantown. 134.1 Sec. 33. Laws 1999, chapter 243, article 4, section 19, is 134.2 amended to read: 134.3 Sec. 19. [EFFECTIVE DATES.] 134.4 Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 134.5 purchases made after June 30, 1999. 134.6 Section 3 is effective for amended returns and refund 134.7 claims filed on or after July 1, 1999. 134.8 Section 4 is effective the day following final enactment 134.9 and applies retroactively to all open tax years and to 134.10 assessments and appeals under Minnesota Statutes, sections 134.11 289A.38 and 289A.65, for which the time limits have not expired 134.12 on the date of final enactment of this act. The provisions of 134.13 Minnesota Statutes, section 289A.50, apply to refunds claimed 134.14 under section 4. Refunds claimed under section 4 must be filed 134.15 by the later of December 31, 1999, or the time limit under 134.16 Minnesota Statutes, section 289A.40, subdivision 1. 134.17 Section 6 is effective retroactively for sales and 134.18 purchases made after June 30, 1998. 134.19 Section 8 is effective for purchases and sales made after 134.20 the date of final enactment. 134.21 Section 10 is effective for purchases made after the date 134.22 of final enactment and before July 1,20012003. 134.23 Section 12 is effective the day after final enactment. 134.24 Section 12, paragraphs (a) to (c), apply to all local sales 134.25 taxes enacted after July 1, 1999. Section 12, paragraph (d), 134.26 applies to all local sales taxes in effect at the time of, or 134.27 imposed after the day of, the enactment of this section. 134.28 Section 13 is effective the day following final enactment. 134.29[EFFECTIVE DATE.] This section is effective the day after 134.30 final enactment. 134.31 Sec. 34. Laws 2000, chapter 490, article 2, section 1, is 134.32 amended to read: 134.33 Section 1. [PROHIBITION AGAINST APPROPRIATIONS FROM TRUNK 134.34 HIGHWAY FUND.] 134.35 To ensure compliance with the Minnesota Constitution, 134.36 article XIV, sections 2, 5, and 6, the commissioner of finance, 135.1 agency directors, and legislative commission personnel may not 135.2 include in the biennial budget for fiscal years 2002 and 2003, 135.3 or in any budget thereafter, expenditures from the trunk highway 135.4 fund for a nonhighway purpose as jointly determined by the 135.5 commissioner of finance and the attorney general. For purposes 135.6 of this section, an expenditure for a nonhighway purpose is any 135.7 expenditure not for construction, improvement, or maintenance of 135.8 highways, but does not include expenditures for payment of taxes 135.9 imposed under Minnesota Statutes, chapter 297A. At the time of 135.10 submission of the biennial budget proposal to the legislature, 135.11 the commissioner of finance and the attorney general shall 135.12 report to the senate and house of representatives transportation 135.13 committees concerning any expenditure that is proposed to be 135.14 appropriated from the trunk highway fund, if that expenditure is 135.15 similar to those reduced or eliminated in sections 5 to 20. The 135.16 report must explain the highway purpose of the proposed 135.17 expenditure. 135.18 Sec. 35. Laws 2000, chapter 490, article 8, section 17, 135.19 the effective date, is amended to read: 135.20EFFECTIVE DATE: This section is effective for sales and 135.21 purchases made after January 1, 2000, and before December 135.22 31,20002001. 135.23[EFFECTIVE DATE.] This section is effective the day 135.24 following final enactment and applies retroactively to sales and 135.25 purchases made on or after December 31, 2000. 135.26 Sec. 36. [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 135.27 Subdivision 1. [SALES AND USE TAXES.] Notwithstanding 135.28 Minnesota Statutes, section 477A.016, or any other provision of 135.29 law or ordinance, if approved by the voters of the city at the 135.30 next general election held after the date of final enactment of 135.31 this act, the city of Beaver Bay may impose by ordinance a sales 135.32 and use tax at a rate of up to one percent for the purposes 135.33 specified in subdivision 2. Minnesota Statutes, section 135.34 297A.99, governs the imposition, administration, collection, and 135.35 enforcement of the tax authorized under this subdivision. 135.36 Subd. 2. [USE OF REVENUES.] The revenues received from 136.1 taxes authorized by subdivision 1 must be used to pay the bonded 136.2 indebtedness on the city community building and to provide 136.3 funding for recreational facilities, the upgrading of the water 136.4 and sewer system, a fire hall and equipment, and improvement of 136.5 streets. 136.6 Subd. 3. [TERMINATION OF TAXES.] The authority granted 136.7 under subdivision 1 to the city of Beaver Bay to impose sales 136.8 and use taxes expires when the city council determines that 136.9 sufficient funds have been received to pay the costs of the 136.10 projects described in subdivision 2. 136.11[EFFECTIVE DATE.] This section is effective the day after 136.12 approval by the governing body of the city of Beaver Bay and 136.13 compliance with Minnesota Statutes, section 645.021, subdivision 136.14 3. 136.15 Sec. 37. [CITY OF CLOQUET; TAXES AUTHORIZED.] 136.16 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 136.17 Minnesota Statutes, section 477A.016, or any other provision of 136.18 law, ordinance, or city charter, the city of Cloquet may impose 136.19 by ordinance a sales and use tax of up to one-half of one 136.20 percent for the purpose specified in subdivision 3. Except as 136.21 otherwise specifically provided in this section, Minnesota 136.22 Statutes, section 297A.99, governs the imposition, 136.23 administration, collection, and enforcement of the tax 136.24 authorized under this subdivision. 136.25 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 136.26 Minnesota Statutes, section 477A.016, or any other provision of 136.27 law, ordinance, or city charter, the city of Cloquet may impose 136.28 by ordinance, for the purposes specified in subdivision 3, an 136.29 excise tax of up to $20 per motor vehicle, as defined by 136.30 ordinance, purchased or acquired from any person engaged within 136.31 the city in the business of selling motor vehicles at retail. 136.32 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 136.33 authorized by subdivisions 1 and 2 must be used by the city to 136.34 pay the cost of collecting the taxes and to pay for the 136.35 following projects: 136.36 (1) construction and equipment of a senior and community 137.1 center; 137.2 (2) construction and improvements to park land along the St. 137.3 Louis river; and 137.4 (3) extension of water and sewer lines and other 137.5 improvements to city infrastructure for expansion of a city 137.6 industrial park. 137.7 Authorized expenses include, but are not limited to, 137.8 acquiring property, paying construction, and operating expenses 137.9 related to the development of the facility, and paying debt 137.10 service on bonds or other obligations, including lease 137.11 obligations, issued to finance the construction, expansion, or 137.12 improvement of the facility. 137.13 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 137.14 under Minnesota Statutes, chapter 475, to finance the capital 137.15 expenditure and improvement projects described in subdivision 3. 137.16 An election to approve the bonds under Minnesota Statutes, 137.17 section 475.58, is not required. 137.18 (b) The issuance of bonds under this subdivision is not 137.19 subject to Minnesota Statutes, sections 275.60 and 275.61. 137.20 (c) The bonds are not included in computing any debt 137.21 limitation applicable to the city, and the levy of taxes under 137.22 Minnesota Statutes, section 475.61, to pay principal of and 137.23 interest on the bonds is not subject to any levy limitation. 137.24 (d) The sales and use and excise taxes authorized in this 137.25 section may be pledged to and used for the payment of the bonds 137.26 and any bonds issued to refund them only if the bonds and any 137.27 refunding bonds are general obligations of the city. 137.28 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 137.29 subdivisions 1 and 2 expire at the earlier of (1) 20 years, or 137.30 (2) when the city council determines that sufficient funds have 137.31 been received from the taxes to finance the capital and 137.32 administrative costs for the acquisition, construction, 137.33 expansion, and improvement of the facility described in 137.34 subdivision 3, plus the additional amount needed to pay the 137.35 costs related to issuance of bonds under subdivision 4, 137.36 including interest on the bonds. Any funds remaining after 138.1 completion of the project and retirement or redemption of the 138.2 bonds may be placed in the general fund of the city. The taxes 138.3 imposed under subdivisions 1 and 2 may expire at an earlier time 138.4 if the city so determines by ordinance. 138.5[EFFECTIVE DATE.] This section is effective the day after 138.6 compliance by the governing body of the city of Cloquet with 138.7 Minnesota Statutes, section 645.021, subdivision 3. 138.8 Sec. 38. [CITY OF FAIRMONT; TAXES AUTHORIZED.] 138.9 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 138.10 Minnesota Statutes, sections 297A.99, subdivision 3, 477A.016, 138.11 or any other provision of law, ordinance, or city charter, if 138.12 approved by the city voters at the next municipal general 138.13 election held after the date of final enactment of this act, the 138.14 city of Fairmont may impose by ordinance a sales and use tax of 138.15 up to one-half of one percent for the purposes specified in 138.16 subdivision 3. Minnesota Statutes, section 297A.99, governs the 138.17 imposition, administration, collection, and enforcement of the 138.18 tax authorized under this subdivision. 138.19 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 138.20 Minnesota Statutes, section 477A.016, or any other provision of 138.21 law, ordinance, or city charter, the city of Fairmont may impose 138.22 by ordinance, for the purposes specified in subdivision 3, an 138.23 excise tax of up to $20 per motor vehicle, as defined by 138.24 ordinance, purchased or acquired from any person engaged within 138.25 the city in the business of selling motor vehicles at retail. 138.26 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 138.27 authorized by subdivisions 1 and 2 must be used by the city to 138.28 pay the cost of collecting the taxes and to pay for construction 138.29 and improvement of streets, sewers, and water mains. 138.30 Subd. 4. [TERMINATION OF TAXES.] The authority to impose 138.31 the taxes under this section expires at the earlier of (1) ten 138.32 years after initial imposition of the taxes or (2) when the city 138.33 council determines that sufficient funds have been received from 138.34 the taxes to finance the cost of the projects described in 138.35 subdivision 3. 138.36[EFFECTIVE DATE.] This section is effective the day after 139.1 compliance by the governing body of the city of Fairmont with 139.2 Minnesota Statutes, section 645.021, subdivision 3. 139.3 Sec. 39. [ST. CLOUD AREA CITIES; TAXES AUTHORIZED.] 139.4 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 139.5 Minnesota Statutes, section 477A.016, or any other provision of 139.6 law, ordinance, or city charter, the following cities may, by 139.7 ordinance, impose a sales and use tax of one-half of one percent 139.8 for the purposes specified in subdivision 2: 139.9 (1) the city of St. Cloud, pursuant to the approval of the 139.10 city voters at the general election held on November 7, 2000; 139.11 (2) the city of Sartell, pursuant to the approval of the 139.12 city voters at an election held in November 1999; and 139.13 (3) each of the cities of Sauk Rapids, Waite Park, St. 139.14 Joseph, and St. Augusta, pursuant to the approval of the voters 139.15 of that city at the next general election following the date of 139.16 final enactment of this act, as provided for in subdivision 3. 139.17 Minnesota Statutes, section 297A.99, governs the 139.18 imposition, administration, collection, and enforcement of the 139.19 taxes authorized under this subdivision, except as specifically 139.20 provided otherwise in this section. 139.21 Subd. 2. [USE OF REVENUES.] (a) Revenues received from the 139.22 taxes authorized under subdivision 1, with the exception of 139.23 revenues collected from a tax imposed in the city of Waite Park, 139.24 must be used for the cost of collecting and administering the 139.25 taxes and to pay all or part of the capital or administrative 139.26 costs of the acquisition, construction, and improvement of (1) 139.27 the main runway improvements to the St. Cloud Regional Airport; 139.28 and (2) remodeling, expansion, or construction of the St. 139.29 Cloud/Great River Regional Library at its current location as 139.30 provided for in the city of St. Cloud capital improvement 139.31 program 2000 to 2005, adopted by the St. Cloud planning 139.32 commission on July 14, 1999. Revenues from a tax imposed by the 139.33 city of Waite Park must be used to pay the cost of collecting 139.34 and administering the tax and to fund the St. Cloud Regional 139.35 Airport and the Waite Park branch of the St. Cloud/Great River 139.36 Regional Library but not the main facility of the St. 140.1 Cloud/Great River Regional Library. Authorized expenses 140.2 include, but are not limited to, acquiring property, paying 140.3 construction expenses related to the development of these 140.4 facilities, and securing and paying debt service on bonds or 140.5 other obligations issued to finance construction or improvement 140.6 of the authorized facility. 140.7 (b) If revenues collected from the taxes imposed under 140.8 subdivision 1 are greater than the amount needed to meet 140.9 obligations under paragraph (a) in any year, the surplus may be 140.10 returned to the cities in a manner agreed upon by the 140.11 participating cities under this section, to be used by the 140.12 cities for projects of regional significance, limited to: the 140.13 acquisition and improvement of park land and open space; the 140.14 purchase, renovation, and construction of public buildings and 140.15 land primarily used for the arts, libraries, and community 140.16 centers; major roadway improvements; and for debt service on 140.17 bonds issued for these purposes. Authorized expenses include, 140.18 but are not limited to, acquiring property, paying construction 140.19 expenses related to the development of these facilities, and 140.20 securing and paying debt service on bonds or other obligations 140.21 issued to finance construction or improvement of the authorized 140.22 facility. The distribution of surplus revenues raised by the 140.23 tax shall be determined by an applicable joint powers agreement. 140.24 The revenues returned to each city may only be used to fund 140.25 projects that have been approved by voters at the referendum 140.26 authorizing the tax. 140.27 (c) Pursuant to the approval of the city of St. Cloud 140.28 voters at the general election held on November 7, 2000, the 140.29 surplus returned to the city of St. Cloud under paragraph (b) 140.30 shall be used for the following projects: 140.31 (1) intersection improvements to the 25th Avenue and trunk 140.32 highway No. 23, I-94 interchange at county road 75, 10th Street 140.33 South improvements, the West Metro corridor improvements, and 140.34 other regionally significant road projects; and 140.35 (2) park and nature land purchase, trail development, and 140.36 improvements and expansions of existing regional park 141.1 facilities, as provided for in the city of St. Cloud capital 141.2 improvement program 2000 to 2005, adopted by the St. Cloud 141.3 planning commission on July 14, 1999. Revenues from the tax 141.4 imposed in the city of Sartell must be used for the purposes 141.5 listed in this subdivision, notwithstanding other purposes 141.6 listed in the authorizing referendum, and are not subject to the 141.7 requirements of Minnesota Statutes, section 297A.99, subdivision 141.8 3. 141.9 (d) Pursuant to the approval of the city of Sartell voters 141.10 at the election held in November 1999, the surplus returned to 141.11 the city of Sartell under paragraph (b) shall be used to fund 141.12 construction, expansion, and improvements to a community center 141.13 and for park land acquisition and improvement. 141.14 Subd. 3. [SEPARATE REFERENDA REQUIRED.] Notwithstanding 141.15 Minnesota Statutes, section 297A.99, subdivision 3, each city 141.16 listed in subdivision 1, clause (3), must have a separate vote 141.17 on each project that it proposes to fund with the surplus tax 141.18 revenues it receives under subdivision 2, paragraph (b). For 141.19 these cities, the cost of each project to be funded by the taxes 141.20 authorized in subdivision 1 must be listed. The referendum must 141.21 state that approval of using the tax authorized in subdivision 1 141.22 for any project shall also indicate approval to share the 141.23 revenues collected from the tax with the other cities in the 141.24 area which have also passed a sales tax. The sharing shall be 141.25 done in a manner agreed upon by all affected cities under a 141.26 joint powers agreement. 141.27 Subd. 4. [BONDING AUTHORITY.] The cities named in 141.28 subdivision 1 may issue bonds under Minnesota Statutes, chapter 141.29 475, to finance the acquisition, construction, and improvements 141.30 of the projects authorized under subdivision 2. The election to 141.31 approve the bonds, as required under Minnesota Statutes, section 141.32 475.58, may be held in combination with the election to 141.33 authorize imposition of the tax under subdivision 1. Whether to 141.34 permit imposition of the tax and issuance of the bonds may be 141.35 posed to the voters as a single question. The question must 141.36 state that the sales tax revenues would be pledged to pay the 142.1 bonds and that the bonds are guaranteed by the city's property 142.2 taxes. 142.3 (b) The issuance of bonds under this subdivision is not 142.4 subject to Minnesota Statutes, section 275.60. 142.5 (c) The bonds shall not be included in computing any debt 142.6 limitation applicable to the city, and the levy of taxes under 142.7 Minnesota Statutes, section 475.61, to pay the principal of and 142.8 interest on the bonds is not subject to any levy limitation. 142.9 (d) The principal amount of bonds issued by the city of St. 142.10 Cloud for the projects authorized in subdivision 2, paragraph 142.11 (a), plus the tax used directly to pay eligible capital 142.12 expenditures and improvements for those projects may not exceed 142.13 $2,700,000 for the airport improvements and $20,000,000 for the 142.14 library improvements, plus an amount equal to the cost related 142.15 to the issuance of the bonds. The principal amount of bonds 142.16 issued by the city of St. Cloud for the projects listed in 142.17 subdivision 2, paragraph (c), plus the taxes used directly to 142.18 pay eligible capital expenditures and improvements for those 142.19 projects may not exceed $5,300,000 for the road improvements and 142.20 $12,000,000 for the park improvements, plus an amount equal to 142.21 the cost related to the issuance of the bonds. 142.22 (e) The principal amount of bonds issued by the other 142.23 cities named in subdivision 1 for the projects authorized in 142.24 subdivision 2, paragraph (b), plus the tax used directly to pay 142.25 eligible capital expenditures and improvements for those 142.26 projects may not exceed the amount approved by the voters at the 142.27 election required in subdivision 1, plus an amount equal to the 142.28 cost related to the issuance of the bonds. 142.29 (f) The taxes may be pledged to and used for the payment of 142.30 the bonds and any bonds issued to refund them only if the full 142.31 faith and credit of the city backs the bonds and any refunding 142.32 bonds. 142.33 Subd. 5. [TERMINATION OF TAX.] The tax imposed by each 142.34 city under subdivision 1 shall expire at the earlier of: 142.35 (1) ten years after the date that the tax is first imposed 142.36 in any of the cities listed in subdivision 1; or 143.1 (2) the date that the amount of revenues received by the 143.2 city of St. Cloud to pay for the projects under subdivision 2, 143.3 paragraphs (a) and (c), shall meet or exceed the sum of 143.4 $40,000,000 plus an amount equal to the costs related to the 143.5 issuance of bonds under subdivision 4, paragraphs (b) and (c). 143.6 Any funds remaining after completion of the projects and 143.7 retirement or redemption of the bonds may be placed in the 143.8 general funds of the cities imposing the taxes. If the cities 143.9 that pass a referendum required under subdivision 1 determine 143.10 that the revenues raised from the authorized taxes will not be 143.11 sufficient to fund the projects in subdivision 2, other local 143.12 revenues must be committed. 143.13[EFFECTIVE DATE.] This section is effective August 1, 2001, 143.14 with respect to any city listed in subdivision 1, upon 143.15 compliance of the governing body of that city with Minnesota 143.16 Statutes, section 645.021, subdivision 3. 143.17 Sec. 40. [CITY OF HOPKINS; FOOD AND BEVERAGE TAX.] 143.18 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 143.19 Minnesota Statutes, section 477A.016, or any ordinance, city 143.20 charter, or other provision of law, the city of Hopkins may, by 143.21 ordinance, impose a sales tax of up to one percent on the gross 143.22 receipts of all food and beverages, including on-sale 143.23 intoxicating beverages and fermented malt beverages, sold at 143.24 licensed on-sale liquor establishments, restaurants, or other 143.25 places of refreshment located within the geographic boundaries 143.26 of the city. The imposition of this tax is subject to the 143.27 reverse referendum requirement in subdivision 3. 143.28 Subd. 2. [USE OF PROCEEDS FROM FOOD AND BEVERAGE TAX.] The 143.29 proceeds of any tax imposed under subdivision 1 must be used by 143.30 the city to fund public arts purposes. Authorized expenses 143.31 include, but are not limited to, expenses related to public art 143.32 facilities, community or public arts projects, or purchase or 143.33 acquisition of art for public purposes. 143.34 Subd. 3. [REVERSE REFERENDUM.] If the Hopkins city council 143.35 intends to impose the tax authorized under this section, it must 143.36 first pass a resolution stating the intention to impose the 144.1 tax. The city must then publish the resolution together with a 144.2 notice of public hearing on the resolution for two successive 144.3 weeks in its official newspaper or, if none exists, in a 144.4 newspaper of general circulation in the city. The hearing must 144.5 be held two to four weeks after the first publication. After 144.6 the hearing, the city council may decide to take no action or 144.7 may adopt a resolution authorizing the imposition of the tax. A 144.8 resolution authorizing the tax must be published in the city's 144.9 official newspaper or, if none exists, in a newspaper of general 144.10 circulation in the city. The resolution is not effective if a 144.11 petition requesting a referendum on the resolution is filed with 144.12 the city clerk within 30 days of publication of the resolution. 144.13 The petition must be signed by voters equal to at least five 144.14 percent of the votes cast in the city in the last general 144.15 election. The resolution is effective if approved by a majority 144.16 of those voting on the question. The commissioner of revenue 144.17 shall prepare a suggested form of referendum question. The 144.18 referendum must be held at a special or general election. 144.19 Subd. 4. [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 144.20 THE TAX.] Unless the city of Hopkins and the commissioner of 144.21 revenue otherwise agree, the tax must be collected and 144.22 administered in the same manner as general local sales taxes 144.23 under Minnesota Statutes, section 297A.99, subdivision 9. 144.24[EFFECTIVE DATE.] This section is effective upon approval 144.25 by the Hopkins city council and compliance with Minnesota 144.26 Statutes, section 645.021, subdivision 3. 144.27 Sec. 41. [APPROPRIATION.] 144.28 $4,730,000 is appropriated in fiscal year 2002, and 144.29 $5,320,000 is appropriated in fiscal year 2003 from the highway 144.30 user trust distribution fund to the general fund. 144.31 ARTICLE 8 144.32 PROPERTY TAX POLICY 144.33 Section 1. [103B.253] [COUNTY LEVY AUTHORITY.] 144.34 Notwithstanding any other law to the contrary, a county 144.35 levying a tax under section 103B.241, 103B.245, or 103B.251 144.36 shall not include any taxes levied under those authorities in 145.1 the levy certified under section 275.07, subdivision 1, 145.2 paragraph (a). A county levying under section 103B.241, 145.3 103B.245, or 103B.251 shall separately certify that amount and 145.4 the auditor shall extend that levy as a special taxing district 145.5 levy under sections 275.066 and 275.07, subdivision 1, paragraph 145.6 (b). 145.7[EFFECTIVE DATE.] This section is effective for taxes 145.8 levied in 2001, payable in 2002, and thereafter. 145.9 Sec. 2. Minnesota Statutes 2000, section 103D.905, 145.10 subdivision 3, is amended to read: 145.11 Subd. 3. [ADMINISTRATIVEGENERAL FUND.]An administrative145.12 A general fund, consisting of an ad valorem tax levy, may not 145.13 exceed0.024180.048 percent of taxable market value, or 145.14$125,000$250,000, whichever is less. The money in the fund 145.15 shall be used for general administrative expenses and for the 145.16 construction or implementation and maintenance of projects of 145.17 common benefit to the watershed district. The managers may make 145.18 an annual levy for theadministrativegeneral fund as provided 145.19 in section 103D.911. In addition to the annualadministrative145.20 general levy, the managers may annually levy a tax not to exceed 145.21 0.00798 percent of taxable market value for a period not to 145.22 exceed 15 consecutive years to pay the cost attributable to the 145.23 basic water management features of projects initiated by 145.24 petition of amunicipality ofpolitical subdivision within the 145.25 watershed district or by petition of at least 50 resident owners 145.26 whose property is within the watershed district. 145.27[EFFECTIVE DATE.] This section is effective for taxes 145.28 levied in 2001, payable in 2002, and thereafter. 145.29 Sec. 3. Minnesota Statutes 2000, section 116C.779, is 145.30 amended to read: 145.31 116C.779 [FUNDING FOR RENEWABLE DEVELOPMENT.] 145.32 (a) The public utility that operates the Prairie Island 145.33 nuclear generating plant must transfer to a renewable 145.34 development account $500,000 each year for each dry cask 145.35 containing spent fuel that is located at the independent spent 145.36 fuel storage installation at Prairie Island after January 1, 146.1 1999. The fund transfer must be made if waste is stored in a 146.2 cask for any part of a year. Funds in the account may be 146.3 expended only for development of renewable energy sources. 146.4 Preference must be given to development of renewable energy 146.5 source projects located within the state. 146.6 (b) Expenditures from the account may only be made after 146.7 approval by order of the public utilities commission upon a 146.8 petition by the public utility. 146.9 (c) Proposed renewable energy projects, which would sell or 146.10 otherwise assign the electric output of an otherwise qualifying 146.11 hydroelectric project to a party other than the public utility 146.12 that operates the Prairie Island nuclear generating plant, shall 146.13 be eligible for funds under this section, and no such renewable 146.14 energy project shall be rejected for funding on the basis that 146.15 the public utility that operates the Prairie Island nuclear 146.16 generating plant would not be the purchaser of the electric 146.17 output. Any such sale or assignment of output shall not be 146.18 subject to any right of first refusal claimed by the utility 146.19 that operates Prairie Island nuclear generating plant, 146.20 notwithstanding any order of the public utilities commission. 146.21 Sec. 4. Minnesota Statutes 2000, section 123A.45, 146.22 subdivision 2, is amended to read: 146.23 Subd. 2. [PETITION.] The petition must contain: 146.24 (a) A correct description of the area proposed for 146.25 detachment and annexation, including supporting data regarding 146.26 location and title to land to establish that the land is 146.27 adjoining a district. 146.28 (b) The reasons for the proposed change with facts showing 146.29 that the granting of the petition will not reduce the size of 146.30 any district to less than four sections, unless the district is 146.31 not operating a school within the district. 146.32 (c) Consent to the petition, if, at the time of the filing 146.33 of the petition, any part of the area proposed for detachment is 146.34 part of a district which maintains and operates a secondary 146.35 school within the district. Before the hearing, the consent of 146.36 the board of the district in which the area proposed for 147.1 detachment lies must be endorsed on the petition. 147.2 (d) An identification of the district to which annexation 147.3 is sought. 147.4 (e) Other information the petitioners may desire to affix. 147.5 (f) An acknowledgment by the petitioner. 147.6 (g) A description of whether bonded indebtedness will be 147.7 allocated according to subdivision 6, paragraph (b) or (c). 147.8[EFFECTIVE DATE.] This section is effective the day 147.9 following final enactment for detachment and annexations 147.10 requests approved by a county board on or after that date. 147.11 Sec. 5. Minnesota Statutes 2000, section 123A.45, 147.12 subdivision 6, is amended to read: 147.13 Subd. 6. [TAXABLE PROPERTY.] (a) Upon the effective date 147.14 of the order, the detachment and annexation is effected. The 147.15 bonded indebtedness must be assigned to the detached and annexed 147.16 land under either paragraph (b) or (c). 147.17 (b) Unless specified separately under paragraph (c), all 147.18 taxable property in the area so detached and annexed remains 147.19 taxable for payment of any school purpose obligations already 147.20 authorized by or outstanding on the effective date of the order 147.21 against the district from which detached. The order does not 147.22 relieve such property from the obligation of any bonded debt 147.23 already incurred to which it was subject prior to the order. 147.24 All taxable property in the area so detached and annexed is 147.25 taxable for payment of any district obligations authorized on or 147.26 subsequent to the effective date of the order by the district to 147.27 which annexation is made. 147.28 (c) Alternatively, if the school board of the district in 147.29 which the area is proposed for detachment and the school board 147.30 of the district in which the area is proposed for annexation 147.31 agree, all taxable property in the area detached and annexed 147.32 shall be taxable by the school district to which the property is 147.33 annexed. Detached and annexed property is relieved from the 147.34 obligation of any bonded debt already incurred by the district 147.35 in which the area is detached and is obligated for any bonded 147.36 debt already incurred by the district to which the area is 148.1 annexed. 148.2[EFFECTIVE DATE.] This sections is effective the day 148.3 following final enactment for detachment and annexations 148.4 requests approved by a county board on or after that date. 148.5 Sec. 6. Minnesota Statutes 2000, section 126C.13, is 148.6 amended by adding a subdivision to read: 148.7 Subd. 1a. [TAX BASE CERTIFICATIONS.] (a) The tax rate 148.8 under subdivision 1 must be determined excluding the school 148.9 district tax base resulting from sections 46 and 49. 148.10 (b) The commissioner of revenue shall include the 148.11 additional tax base resulting from sections 46 and 49 in 148.12 certifying school district adjusted net tax capacities and 148.13 referendum market values to the commissioner of children, 148.14 families, and learning for determining levy amounts. 148.15[EFFECTIVE DATE.] This section is effective for taxes 148.16 payable in 2002 and thereafter. 148.17 Sec. 7. [144F.01] [EMERGENCY MEDICAL SERVICES SPECIAL 148.18 TAXING DISTRICTS.] 148.19 Subdivision 1. [POLITICAL SUBDIVISION DEFINED.] In this 148.20 section, "political subdivision" means a county, a statutory or 148.21 home rule charter city, or a township organized to provide town 148.22 government. 148.23 Subd. 2. [WHO MAY ESTABLISH.] Two or more political 148.24 subdivisions, or parts of them, may establish by resolution of 148.25 their governing bodies a special taxing district for emergency 148.26 medical services. The participating territory of a 148.27 participating political subdivision need not abut any other 148.28 participating territory to be in the special taxing district. 148.29 Subd. 3. [BOARD.] The special taxing district under this 148.30 section is governed by a board made up initially of 148.31 representatives of each participating political subdivision in 148.32 the proportions set out in the establishing resolution, subject 148.33 to change as provided in the district's charter, if any, or in 148.34 the district's bylaws. Each participant's representative serves 148.35 at the pleasure of that participant's governing body. 148.36 Subd. 4. [PROPERTY TAX LEVY AUTHORITY.] The district's 149.1 board may levy a tax on the taxable real and personal property 149.2 in the district. The ad valorem tax levy may not exceed 0.048 149.3 percent of the taxable market value of the district or $250,000, 149.4 whichever is less. The proceeds of the levy must be used as 149.5 provided in subdivision 5. The board shall certify the levy at 149.6 the times as provided under section 275.07. The board shall 149.7 provide the county with whatever information is necessary to 149.8 identify the property that is located within the district. If 149.9 the boundaries include a part of a parcel, the entire parcel 149.10 shall be included in the district. The county auditors must 149.11 spread, collect, and distribute the proceeds of the tax at the 149.12 same time and in the same manner as provided by law for all 149.13 other property taxes. 149.14 Subd. 5. [USE OF LEVY PROCEEDS.] The proceeds of property 149.15 taxes levied under this section must be used to support the 149.16 providing of out-of-hospital emergency medical services 149.17 including, but not limited to, first responder or rescue squads 149.18 recognized by the district, ambulance services licensed under 149.19 chapter 144E and recognized by the district, medical control 149.20 functions set out in chapter 144E, communications equipment and 149.21 systems, and programs of regional emergency medical services 149.22 authorized by regional boards described in section 144E.52. 149.23 Subd. 6. [ADVISORY COMMITTEE.] A special taxing district 149.24 board under this section must have an advisory committee to 149.25 advise the board on issues involving emergency medical services 149.26 and EMS communications. The committee's membership must be 149.27 comprised of representatives of first responders, ambulance 149.28 services, ambulance medical directors, and EMS communication 149.29 experts. The advisory committee members serve at the pleasure 149.30 of the appointing board. 149.31 Subd. 7. [POWERS.] (a) In addition to authority expressly 149.32 granted in this section, a special taxing district under this 149.33 section may exercise any power that may be exercised by any of 149.34 its participating political subdivisions, except that the board 149.35 may not incur debt. The special taxing district may only use 149.36 the power to do what is necessary or reasonable to support the 150.1 services set out in subdivision 5. 150.2 (b) Notwithstanding paragraph (a), the district may only 150.3 levy the taxes authorized in this section. 150.4 Subd. 8. [ADDITIONS AND WITHDRAWALS.] (a) Additional 150.5 eligible political subdivisions may be added to a special taxing 150.6 district under this section as provided by the board of the 150.7 district and agreed to in a resolution of the governing body of 150.8 the political subdivision proposed to be added. 150.9 (b) A political subdivision may withdraw from a special 150.10 taxing district under this section by resolution of its 150.11 governing body. The political subdivision must notify the board 150.12 of the special taxing district of the withdrawal by providing a 150.13 copy of the resolution at least one year in advance of the 150.14 proposed withdrawal. The taxable property of the withdrawing 150.15 member is subject to the property tax levy under subdivision 4 150.16 for the taxes payable year following the notice of the 150.17 withdrawal, unless the board and the withdrawing member agree 150.18 otherwise by action of their governing bodies. 150.19 (c) Notwithstanding subdivision 2, if the district is 150.20 comprised of only two political subdivisions and one of the 150.21 political subdivisions withdraws, the district can continue to 150.22 exist. 150.23 Subd. 9. [DISSOLUTION.] If the special taxing district is 150.24 dissolved, the assets and liabilities may be assigned to a 150.25 successor entity, if any, or otherwise disposed of for public 150.26 purposes as provided by law. 150.27[EFFECTIVE DATE.] This section is effective for taxes 150.28 levied in 2002, payable in 2003, through taxes levied in 2007, 150.29 payable in 2008. 150.30 Sec. 8. Minnesota Statutes 2000, section 271.01, 150.31 subdivision 5, is amended to read: 150.32 Subd. 5. [JURISDICTION.] The tax court shall have 150.33 statewide jurisdiction. Except for an appeal to the supreme 150.34 court or any other appeal allowed under this subdivision, the 150.35 tax court shall be the sole, exclusive, and final authority for 150.36 the hearing and determination of all questions of law and fact 151.1 arising under the tax laws of the state, as defined in this 151.2 subdivision, in those cases that have been appealed to the tax 151.3 court and in any case that has been transferred by the district 151.4 court to the tax court. The tax court shall have no 151.5 jurisdiction in any case that does not arise under the tax laws 151.6 of the state or in any criminal case or in any case determining 151.7 or granting title to real property or in any case that is under 151.8 the probate jurisdiction of the district court. The small 151.9 claims division of the tax court shall have no jurisdiction in 151.10 any case dealing with property valuation or assessment for 151.11 property tax purposes until the taxpayer has appealed the 151.12 valuation or assessment to the county board of equalization, and 151.13 in those towns and cities which have not transferred their 151.14 duties to the county, the town or city board of equalization, 151.15 except for: (i) those taxpayers whose original assessments are 151.16 determined by the commissioner of revenue;and(ii) those 151.17 taxpayers appealing a denial of a current year application for 151.18 the homestead classification for their property and the denial 151.19 was not reflected on a valuation notice issued in the year; and 151.20 (iii) any case dealing with property valuation, assessment, or 151.21 taxation for property tax purposes and meeting the 151.22 jurisdictional requirements of section 271.21, subdivision 2, 151.23 paragraph (c). The tax court shall have no jurisdiction in any 151.24 case involving an order of the state board of equalization 151.25 unless a taxpayer contests the valuation of property. Laws 151.26 governing taxes, aids, and related matters administered by the 151.27 commissioner of revenue, laws dealing with property valuation, 151.28 assessment or taxation of property for property tax purposes, 151.29 and any other laws that contain provisions authorizing review of 151.30 taxes, aids, and related matters by the tax court shall be 151.31 considered tax laws of this state subject to the jurisdiction of 151.32 the tax court. This subdivision shall not be construed to 151.33 prevent an appeal, as provided by law, to an administrative 151.34 agency, board of equalization, review under section 274.13, 151.35 subdivision 1c, or to the commissioner of revenue. Wherever 151.36 used in this chapter, the term commissioner shall mean the 152.1 commissioner of revenue, unless otherwise specified. 152.2 Sec. 9. Minnesota Statutes 2000, section 271.21, 152.3 subdivision 2, is amended to read: 152.4 Subd. 2. [JURISDICTION.] At the election of the taxpayer, 152.5 the small claims division shall have jurisdiction only in the 152.6 following matters: 152.7 (a) cases involving valuation, assessment, or taxation of 152.8 real or personal property, if the taxpayer has satisfied the 152.9 requirements of section 271.01, subdivision 5, and: (i) the 152.10 issue is a denial of a current year application for the 152.11 homestead classification for the taxpayer's property and the 152.12 denial was not reflected on a valuation notice issued in the 152.13 year; or (ii) in the case of nonhomestead property, the 152.14 assessor's estimated market value is less than $100,000;or152.15 (b) any other case concerning the tax laws as defined in 152.16 section 271.01, subdivision 5, in which the amount in 152.17 controversy does not exceed $5,000, including penalty and 152.18 interest; or 152.19 (c) cases involving valuation, assessment, or taxation of 152.20 real or personal property if: 152.21 (i) the issue is a denial of a current year application for 152.22 the homestead classification for the taxpayer's property; 152.23 (ii) only one parcel is included in the petition, the 152.24 entire parcel is classified as homestead 1a or 1b pursuant to 152.25 section 273.13, and the parcel contains no more than one 152.26 dwelling unit; or 152.27 (iii) the assessor's estimated market value of the property 152.28 included in the petition is less than $300,000. 152.29 Sec. 10. Minnesota Statutes 2000, section 272.02, 152.30 subdivision 7, is amended to read: 152.31 Subd. 7. [INSTITUTIONS OF PUBLIC CHARITY.] 152.32InstitutionsProperty of an institution of purely public charity 152.33are, or property that would be listed for taxation in the name 152.34 of an institution of purely public charity under section 272.01, 152.35 subdivision 2, or 273.19, and that is used for the charitable 152.36 purposes of such institution, is exemptexcept parcels of153.1property containing structures and the. However, land and 153.2 structuresdescribed in sectionthat qualify, or that could 153.3 qualify under sections 273.13, subdivision 25, paragraph 153.4 (e), and 462A.071, other than those that qualify for exemption 153.5 under subdivision 26, are not exempt. 153.6[EFFECTIVE DATE.] This section is effective for taxes 153.7 payable in 2002 and thereafter. 153.8 Sec. 11. Minnesota Statutes 2000, section 272.02, 153.9 subdivision 10, is amended to read: 153.10 Subd. 10. [PERSONAL PROPERTY USED FOR POLLUTION CONTROL.] 153.11 Personal property used primarily for the abatement and control 153.12 of air, water, or land pollution is exempt to the extent that it 153.13 is so used, and real property is exempt if it is used primarily 153.14 for abatement and control of air, water, or land pollution as 153.15 part of an agricultural operation, as a part of a centralized 153.16 treatment and recovery facility operating under a permit issued 153.17 by the Minnesota pollution control agency pursuant to chapters 153.18 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 153.19 and 7045.0020 to 7045.1260, as a wastewater treatment facility 153.20 and for the treatment, recovery, and stabilization of metals, 153.21 oils, chemicals, water, sludges, or inorganic materials from 153.22 hazardous industrial wastes, or as part of an electric 153.23 generation system. For purposes of this subdivision, personal 153.24 property includes ponderous machinery and equipment used in a 153.25 business or production activity that at common law is considered 153.26 real property. 153.27 Any taxpayer requesting exemption of all or a portion of 153.28 any real property or any equipment or device, or part thereof, 153.29 operated primarily for the control or abatement of airor, 153.30 water, or land pollution shall file an application with the 153.31 commissioner of revenue.The equipment or device shall meet153.32standards, rules, or criteria prescribed by the Minnesota153.33pollution control agency, and must be installed or operated in153.34accordance with a permit or order issued by that agency.The 153.35 Minnesota pollution control agency shall upon request of the 153.36 commissioner furnish informationorand advice to the 154.1 commissioner. 154.2 The information and advice furnished by the Minnesota 154.3 pollution control agency must include statements as to whether 154.4 the equipment, device, or real property meets a standard, rule, 154.5 criteria, guideline, policy, or order of the Minnesota pollution 154.6 control agency, and whether the equipment, device, or real 154.7 property is installed or operated in accordance with it. On 154.8 determining that property qualifies for exemption, the 154.9 commissioner shall issue an order exempting the property from 154.10 taxation. The equipmentor, device, or real property shall 154.11 continue to be exempt from taxation as long as thepermitorder 154.12 issued by theMinnesota pollution control agencycommissioner 154.13 remains in effect. 154.14[EFFECTIVE DATE.] This section is effective for exemption 154.15 applications received on or after July 1, 2001. 154.16 Sec. 12. Minnesota Statutes 2000, section 272.02, is 154.17 amended by adding a subdivision to read: 154.18 Subd. 45. [RESIDENTIAL BUILDINGS ON TEMPORARY SITES.] A 154.19 newly constructed building that is situated on real property is 154.20 exempt if it is: 154.21 (1) intended for future residential occupancy; 154.22 (2) on a temporary foundation and intended to be moved; 154.23 (3) not used as a model or for any other business purposes; 154.24 (4) not connected to any utilities; and 154.25 (5) located on land that will not be sold with the building. 154.26 The exemption under this subdivision is allowable for only 154.27 one assessment year after the date of the initial construction 154.28 of the building. 154.29[EFFECTIVE DATE.] This section is effective beginning with 154.30 the 2001 assessment and thereafter. 154.31 Sec. 13. Minnesota Statutes 2000, section 272.02, is 154.32 amended by adding a subdivision to read: 154.33 Subd. 46. [PUBLICLY OWNED PARKING FACILITIES.] Parking 154.34 lots, ramps, structures, garages, and other facilities for 154.35 vehicle parking owned by a municipality or authority established 154.36 under chapter 469 or any affiliate nonprofit corporate entity 155.1 organized by a municipality or authority are exempt, including 155.2 those parking lots, ramps, structures, garages, and other 155.3 facilities that are in whole or in part operated by, used by, 155.4 leased, or subleased to an individual or nonprofit or for-profit 155.5 entity, notwithstanding section 272.01, subdivision 2, or 273.19. 155.6[EFFECTIVE DATE.] This section is effective the day after 155.7 final enactment. 155.8 Sec. 14. Minnesota Statutes 2000, section 272.02, is 155.9 amended by adding a subdivision to read: 155.10 Subd. 47. [POULTRY LITTER BIOMASS GENERATION FACILITY 155.11 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 155.12 attached machinery and other personal property which is part of 155.13 an electrical generating facility that meets the requirements of 155.14 this subdivision is exempt. At the time of construction, the 155.15 facility must: 155.16 (1) be designed to utilize poultry litter as a primary fuel 155.17 source; 155.18 (2) be constructed for the purpose of generating power at 155.19 the facility that will be sold pursuant to a contract approved 155.20 by the public utilities commission in accordance with the 155.21 biomass mandate imposed under section 216B.2424; and 155.22 (3) comply with the requirements of section 177.43. 155.23 Construction of the facility must be commenced after 155.24 January 1, 2000, and before December 31, 2002. Property 155.25 eligible for this exemption does not include electric 155.26 transmission lines and interconnections or gas pipelines and 155.27 interconnections appurtenant to the property or the facility. 155.28[EFFECTIVE DATE.] This section is effective for taxes 155.29 levied in 2001, payable in 2002, and thereafter. 155.30 Sec. 15. Minnesota Statutes 2000, section 272.02, is 155.31 amended by adding a subdivision to read: 155.32 Subd. 48. [BIOMASS ELECTRICAL GENERATION FACILITY; 155.33 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 155.34 attached machinery and other personal property which is part of 155.35 an electrical generating facility that meets the requirements of 155.36 this subdivision is exempt. At the time of construction, the 156.1 facility must: 156.2 (1) be designed to utilize biomass as established in 156.3 section 216B.2424 as a primary fuel source; 156.4 (2) be constructed for the purpose of generating power at 156.5 the facility that will be sold pursuant to a contract approved 156.6 by the public utilities commission in accordance with the 156.7 biomass mandate imposed under section 216B.2424; and 156.8 (3) comply with the requirements of section 177.43. 156.9 Construction of the facility must be commenced after 156.10 January 1, 2000, and before December 31, 2002. Property 156.11 eligible for this exemption does not include electric 156.12 transmission lines and interconnections or gas pipelines and 156.13 interconnections appurtenant to the property or facility. 156.14[EFFECTIVE DATE.] This section is effective for taxes 156.15 levied in 2001, payable in 2002, and thereafter. 156.16 Sec. 16. Minnesota Statutes 2000, section 272.02, is 156.17 amended by adding a subdivision to read: 156.18 Subd. 49. [WASTE TIRE COGENERATION FACILITY; PERSONAL 156.19 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 156.20 machinery and other personal property which is part of an 156.21 electric generating facility that meets the requirements of this 156.22 subdivision is exempt. At the time of construction, the 156.23 facility must: 156.24 (1) be designed to utilize waste tires as a primary fuel 156.25 source; 156.26 (2) be a cogeneration electric generating facility of one 156.27 to 25 megawatts of installed capacity; and 156.28 (3) comply with the requirements of section 177.43. 156.29 Construction of the facility must be commenced after 156.30 January 1, 2000, and before January 1, 2004. Property eligible 156.31 for this exemption does not include electric transmission lines 156.32 and interconnections or gas pipelines and interconnections 156.33 appurtenant to the property or the facility. 156.34[EFFECTIVE DATE.] This section is effective for taxes 156.35 levied in 2001, payable in 2002, and thereafter. 156.36 Sec. 17. Minnesota Statutes 2000, section 272.02, is 157.1 amended by adding a subdivision to read: 157.2 Subd. 50. [EXEMPTION FOR PERSONAL PROPERTY USED TO 157.3 GENERATE ELECTRICITY.] For a generation facility using natural 157.4 gas or similar clean fuel or a natural gas peaking facility that 157.5 is constructed and placed into service after January 1, 2001, 157.6 and the construction of which complies with the requirements of 157.7 section 177.43, personal property used to generate electricity 157.8 or to store natural gas or similar fuel is exempt from property 157.9 taxation. This exemption does not apply to transformers, 157.10 transmission lines, distribution lines, or any other tools, 157.11 implements, and machinery that is part of an electric 157.12 substation, wherever located. 157.13 Sec. 18. Minnesota Statutes 2000, section 272.02, is 157.14 amended by adding a subdivision to read: 157.15 Subd. 51. [PROPERTY USED FOR AGRICULTURAL EDUCATION.] 157.16 Property owned and operated by a private, nonprofit charitable 157.17 corporation that qualifies for tax exemption under section 157.18 501(c)(3) of the Internal Revenue Code, is exempt from property 157.19 tax, if the property is primarily used for educational 157.20 interpretation of the past, present, and future of agriculture 157.21 in Minnesota, including, but not limited to, visitor and 157.22 conference centers, storage and demonstration structures, and 157.23 buildings for machinery, artifacts, crops, and livestock. 157.24[EFFECTIVE DATE.] This section is effective for the 2001 157.25 assessment, taxes payable in 2002, and thereafter. 157.26 Sec. 19. Minnesota Statutes 2000, section 273.061, 157.27 subdivision 1, is amended to read: 157.28 Subdivision 1. [OFFICE CREATED; APPOINTMENT, 157.29 QUALIFICATIONS.] Every county in this state shall have a county 157.30 assessor. The county assessor shall be appointed by the board 157.31 of county commissioners. The assessor shall be selected and 157.32 appointed because of knowledge and training in the field of 157.33 property taxation and appointment shall be approved by the 157.34 commissioner of revenue before the same shall become effective. 157.35 Upon receipt by the county commissioners of the commissioner of 157.36 revenue's refusal to approve an appointment, the term of the 158.1 appointee shall terminate at the end of that day. 158.2 The commissioner of revenue may grant approval on a 158.3 probationary basis for a period of two years. The commissioner 158.4 must base the decision to impose a probationary period on 158.5 objective and consistent criteria. At the end of the two-year 158.6 probationary period, the commissioner may either refuse to 158.7 approve the person's appointment for the remainder of the 158.8 person's four-year term, approve the person's appointment but 158.9 only for another two-year probationary period, or 158.10 unconditionally approve the person's appointment for the 158.11 remainder of the four-year term for which the person was 158.12 originally appointed by the county board. The criteria shall 158.13 not be considered rules and are not subject to the 158.14 Administrative Procedure Act. 158.15 Notwithstanding any law to the contrary, a county assessor 158.16 must have senior accreditation from the state board of assessors 158.17 by January 1, 1992, or within two years of the assessor's first 158.18 appointment under this section, whichever is later. 158.19[EFFECTIVE DATE.] This section is effective the day 158.20 following final enactment. 158.21 Sec. 20. Minnesota Statutes 2000, section 273.061, 158.22 subdivision 2, is amended to read: 158.23 Subd. 2. [TERM; VACANCY.] (a) The terms of county 158.24 assessors appointed under this section shall be four years. A 158.25 new term shall begin on January 1 of every fourth year after 158.26 1973. When any vacancy in the office occurs, the board of 158.27 county commissioners, within3090 days thereafter, shall fill 158.28 the same by appointment for the remainder of the term, following 158.29 the procedure prescribed in subdivision 1. The term of the 158.30 county assessor may be terminated by the board of county 158.31 commissioners at any time, on charges ofinefficiency or neglect158.32of dutymalfeasance, misfeasance, or nonfeasance by the 158.33 commissioner of revenue. If the board of county commissioners 158.34 does not intend to reappoint a county assessor who has been 158.35 certified by the state board of assessors, the board shall 158.36 present written notice to the county assessor not later than 90 159.1 days prior to the termination of the assessor's term, that it 159.2 does not intend to reappoint the assessor. If written notice is 159.3 not timely made, the county assessor will automatically be 159.4 reappointed by the board of county commissioners. 159.5 The commissioner of revenue may recommend to the state 159.6 board of assessors the nonrenewal, suspension, or revocation of 159.7 an assessor's license as provided in sections 270.41 to 270.53. 159.8 (b) In the event of a vacancy in the office of county 159.9 assessor, through death, resignation or other reasons, the 159.10 deputy (or chief deputy, if more than one) shall perform the 159.11 functions of the office. If there is no deputy, the county 159.12 auditor shall designate a person to perform the duties of the 159.13 office until an appointment is made as provided in clause (a). 159.14 Such person shall perform the duties of the office for a period 159.15 not exceeding3090 days during which the county board must 159.16 appoint a county assessor. Such30-day90-day period may, 159.17 however, be extended by written approval of the commissioner of 159.18 revenue. 159.19 (c) In the case of the first appointment under paragraph 159.20 (a) of a county assessor who is accredited but who does not have 159.21 senior accreditation, an approval of the appointment by the 159.22 commissioner shall be provisional, provided that a county 159.23 assessor appointed to a provisional term under this paragraph 159.24 must reapply to the commissioner at the end of the provisional 159.25 term. A provisional term may not exceed two years. The 159.26 commissioner shall not approve the appointment for the remainder 159.27 of the four-year term unless the assessor has obtained senior 159.28 accreditation. 159.29[EFFECTIVE DATE.] This section is effective the day 159.30 following final enactment. 159.31 Sec. 21. Minnesota Statutes 2000, section 273.061, 159.32 subdivision 8, is amended to read: 159.33 Subd. 8. [POWERS AND DUTIES.] The county assessor shall 159.34 have the following powers and duties: 159.35 (1) To call upon and confer with the township and city 159.36 assessors in the county, and advise and give them the necessary 160.1 instructions and directions as to their duties under the laws of 160.2 this state, to the end that a uniform assessment of all real 160.3 property in the county will be attained. 160.4 (2) To assist and instruct the local assessors in the 160.5 preparation and proper use of land maps and record cards, in the 160.6 property classification of real and personal property, and in 160.7 the determination of proper standards of value. 160.8 (3) To keep the local assessors in the county advised of 160.9 all changes in assessment laws and all instructions which the 160.10 assessor receives from the commissioner of revenue relating to 160.11 their duties. 160.12 (4) Tohave authority torequire the attendance of groups 160.13 of local assessors at sectional meetings called by the assessor 160.14 for the purpose of giving them further assistance and 160.15 instruction as to their duties. 160.16 (5) To require the attendance of all licensed assessors 160.17 working in that county at annual instructional meetings 160.18 presented in part by the department of revenue regional 160.19 representative to provide assistance and instruction as to their 160.20 duties under the law and the proper implementation of assessment 160.21 procedures. 160.22 (6) To immediately commence the preparation of a large 160.23 scale topographical land map of the county, in such form as may 160.24 be prescribed by the commissioner of revenue, showing thereon 160.25 the location of all railroads, highways and roads, bridges, 160.26 rivers and lakes, swamp areas, wooded tracts, stony ridges and 160.27 other features which might affect the value of the land. 160.28 Appropriate symbols shall be used to indicate the best, the 160.29 fair, and the poor land of the county. For use in connection 160.30 with the topographical land map, the assessor shall prepare and 160.31 keep available in the assessor's office tables showing fair 160.32 average minimum and maximum market values per acre of 160.33 cultivated, meadow, pasture, cutover, timber and waste lands of 160.34 each township. The assessor shall keep the map and tables 160.35 available in the office for the guidance of town assessors, 160.36 boards of review, and the county board of equalization. 161.1(6)(7) To also prepare and keep available in the office 161.2 for the guidance of town assessors, boards of review and the 161.3 county board of equalization, a land valuation map of the 161.4 county, in such form as may be prescribed by the commissioner of 161.5 revenue. This map, which shall include the bordering tier of 161.6 townships of each county adjoining, shall show the average 161.7 market value per acre, both with and without improvements, as 161.8 finally equalized in the last assessment of real estate, of all 161.9 land in each town or unorganized township which lies outside the 161.10 corporate limits of cities. 161.11(7)(8) To regularly examine all conveyances of land 161.12 outside the corporate limits of cities of the first and second 161.13 class, filed with the county recorder of the county, and keep a 161.14 file, by descriptions, of the considerations shown thereon. 161.15 From the information obtained by comparing the considerations 161.16 shown with the market values assessed, the assessor shall make 161.17 recommendations to the county board of equalization of necessary 161.18 changes in individual assessments or aggregate valuations. 161.19(8)(9) To become familiar with the values of the different 161.20 items of personal property so as to be in a position when called 161.21 upon to advise the boards of review and the county board of 161.22 equalization concerning property, market values thereof. 161.23(9)(10) While the county board of equalization is in 161.24 session, to give it every possible assistance to enable it to 161.25 perform its duties. The assessor shall furnish the board with 161.26 all necessary charts, tables, comparisons, and data which it 161.27 requires in its deliberations, and shall make whatever 161.28 investigations the board may desire. 161.29(10)(11) At the request of either the board of county 161.30 commissioners or the commissioner of revenue, to investigate 161.31 applications for reductions of valuation and abatements and 161.32 settlements of taxes, examine the real or personal property 161.33 involved, and submit written reports and recommendations with 161.34 respect to the applications, in such form as may be prescribed 161.35 by the board of county commissioners and commissioner of revenue. 161.36(11)(12) To make diligent search each year for real and 162.1 personal property which has been omitted from assessment in the 162.2 county, and report all such omissions to the county auditor. 162.3(12)(13) To regularly confer with county assessors in all 162.4 adjacent counties about the assessment of property in order to 162.5 uniformly assess and equalize the value of similar properties 162.6 and classes of property located in adjacent counties. The 162.7 conference shall emphasize the assessment of agricultural and 162.8 commercial and industrial property or other properties that may 162.9 have an inadequate number of sales in a single county. 162.10(13)(14) To render such other services pertaining to the 162.11 assessment of real and personal property in the county as are 162.12 not inconsistent with the duties set forth in this section, and 162.13 as may be required by the board of county commissioners or by 162.14 the commissioner of revenue. 162.15(14)(15) To maintain a record, in conjunction with other 162.16 county offices, of all transfers of property to assist in 162.17 determining the proper classification of property, including but 162.18 not limited to, transferring homestead property and name changes 162.19 on homestead property. 162.20(15)(16) To determine if a homestead application is 162.21 required due to the transfer of homestead property or an owner's 162.22 name change on homestead property. 162.23[EFFECTIVE DATE.] This section is effective July 1, 2001, 162.24 and thereafter. 162.25 Sec. 22. [273.0755] [TRAINING AND EDUCATION OF PROPERTY 162.26 TAX PERSONNEL.] 162.27 (a) Beginning with the four-year period starting on July 1, 162.28 2000, every person licensed by the state board of assessors at 162.29 the Accredited Minnesota Assessor level or higher, shall 162.30 successfully complete at least once in every four-year period a 162.31 week-long Minnesota laws course sponsored by the department of 162.32 revenue. An assessor need not attend the course if they 162.33 successfully pass the test for the course. 162.34 (b) The commissioner of revenue may require that each 162.35 county, and each city for which the city assessor performs the 162.36 duties of county assessor, have (i) a person on the assessor's 163.1 staff who is certified by the department of revenue in sales 163.2 ratio calculations, (ii) an officer or employee who is certified 163.3 by the department of revenue in tax calculations, and (iii) an 163.4 officer or employee who is certified by the department of 163.5 revenue in the proper preparation of abstracts of assessment. 163.6 The commissioner of revenue may require that each county have an 163.7 officer or employee who is certified by the department of 163.8 revenue in the proper preparation of abstracts of tax lists. 163.9[EFFECTIVE DATE.] This section is effective July 1, 2001, 163.10 and thereafter. 163.11 Sec. 23. Minnesota Statutes 2000, section 273.11, 163.12 subdivision 14, is amended to read: 163.13 Subd. 14. [VACANT LANDMETROPOLITAN AREA PLATTEDON OR163.14AFTER AUGUST 1, 1991VACANT LAND.] (a) All landplatted on or163.15after August 1, 1991, andlocated in the metropolitan area that 163.16 is not improved with a permanent structure, shall be assessed as 163.17 provided in this subdivision when platted. For purposes of this 163.18 subdivision, and subdivision 14a, the "metropolitan area" 163.19 includes the counties of Anoka, Carver, Chisago, Dakota, 163.20 Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and 163.21 Wright. The assessor shall determine the market value of each 163.22 individual lot based upon the highest and best use of the 163.23 property as unplatted land. In establishing the market value of 163.24 the property, the assessor shall consider the sale price of the 163.25 unplatted land or comparable sales of unplatted land of similar 163.26 use and similar availability of public utilities. 163.27 (b) The market value determined in paragraph (a) shall be 163.28 increased as follows for each of the three assessment years 163.29 immediately following the final approval of the plat: one-third 163.30 of the difference between the property's unplatted market value 163.31 as determined under paragraph (a) and the market value based 163.32 upon the highest and best use of the land as platted property 163.33 shall be added in each of the three subsequent assessment years. 163.34 (c) Any increase in market value after the first assessment 163.35 year following the plat's final approval shall be added to the 163.36 property's market value in the next assessment year. 164.1 Notwithstanding paragraph (b), if construction begins before the 164.2 expiration of the three years in paragraph (b), that lot shall 164.3 be eligible for revaluation in the next assessment year. The 164.4 market value of a platted lot determined under this subdivision 164.5 shall not exceed the value of that lot based upon the highest 164.6 and best use of the property as platted land. 164.7[EFFECTIVE DATE.] This section is effective for land 164.8 platted after July 31, 2001. 164.9 Sec. 24. Minnesota Statutes 2000, section 273.11, is 164.10 amended by adding a subdivision to read: 164.11 Subd. 14a. [VACANT NONMETROPOLITAN AREA PLATTED LAND.] (a) 164.12 All land that is located outside the metropolitan area defined 164.13 in subdivision 14, and not improved with a permanent structure, 164.14 shall be assessed as provided in this subdivision when platted. 164.15 The assessor shall determine the market value of each individual 164.16 lot based upon the highest and best use of the property as 164.17 unplatted land. In establishing the market value of the 164.18 property, the assessor shall consider the sale price of the 164.19 unplatted land or comparable sales of unplatted land of similar 164.20 use and similar availability of public utilities. 164.21 (b) The market value determined in paragraph (a) shall be 164.22 increased as follows for each of the ten assessment years 164.23 immediately following the final approval of the plat: one-tenth 164.24 of the difference between the property's unplatted market value 164.25 as determined under paragraph (a) and the market value based 164.26 upon the highest and best use of the land as platted property 164.27 shall be added in each of the ten subsequent assessment years. 164.28 (c) Any increase in market value after the first assessment 164.29 year following the plat's final approval shall be added to the 164.30 property's market value in the next assessment year. 164.31 Notwithstanding paragraph (b), if construction begins before the 164.32 expiration of the ten years in paragraph (b), that lot shall be 164.33 eligible for revaluation in the next assessment year. The 164.34 market value of a platted lot determined under this subdivision 164.35 shall not exceed the value of that lot based upon the highest 164.36 and best use of the property as platted land. 165.1[EFFECTIVE DATE.] This section is effective for land 165.2 platted after July 31, 2001. 165.3 Sec. 25. [273.1115] [HOMESTEAD RESORTS; VALUATION AND 165.4 DEFERMENT.] 165.5 Subdivision 1. [REQUIREMENTS.] Real property qualifying 165.6 for classification as class 1c under section 273.13, subdivision 165.7 22, paragraph (c), is entitled to valuation and tax deferment 165.8 under this section, provided that if part of a resort is not 165.9 classified as class 1c, only that portion of the value of the 165.10 property that is classified as class 1c property qualifies under 165.11 this section. 165.12 Subd. 2. [DETERMINATION OF VALUE.] Upon timely application 165.13 by the owner, as provided in subdivision 4, the value of real 165.14 property described in subdivision 1 must be determined by the 165.15 assessor solely with reference to its classification value as 165.16 class 1c property, notwithstanding sections 272.03, subdivision 165.17 8, and 273.11. The assessor shall not consider any added values 165.18 resulting from other factors. 165.19 Subd. 3. [SEPARATE DETERMINATION OF MARKET VALUE AND TAX.] 165.20 The assessor shall, however, make a separate determination of 165.21 the market value of the real estate. The assessor shall record 165.22 on the property assessment records the tax based upon the 165.23 appropriate local tax rate applicable to the property in the 165.24 taxing district. 165.25 Subd. 4. [APPLICATION.] Application for deferment of taxes 165.26 and assessment under this section must be filed by May 1 of the 165.27 year prior to the year in which the taxes are payable. The 165.28 application must be filed with the assessor of the taxing 165.29 district in which the real property is located on a form 165.30 prescribed by the commissioner of revenue. The assessor may 165.31 require proof by affidavit or otherwise that the property 165.32 qualifies under subdivision 1. An application approved by the 165.33 assessor continues in effect for subsequent years until the 165.34 property no longer qualifies under subdivision 1. 165.35 Subd. 5. [ADDITIONAL TAXES.] When real property valued and 165.36 assessed under this section no longer qualifies under 166.1 subdivision 1, the portion no longer qualifying is subject to 166.2 additional taxes, in the amount equal to the difference between 166.3 the taxes determined in accordance with subdivision 2, and the 166.4 amount determined under subdivision 3, provided, however, that 166.5 the amount determined under subdivision 3 must not be greater 166.6 than it would have been had the actual bona fide sale price of 166.7 the real property at an arms length transaction been used in 166.8 lieu of the market value determined under subdivision 3. The 166.9 additional taxes must be extended against the property on the 166.10 tax list for the current year, except that no interest or 166.11 penalties may be levied on the additional taxes if timely paid, 166.12 and except that the additional taxes must only be levied with 166.13 respect to the last three years that the property has been 166.14 valued and assessed under this section. 166.15 Subd. 6. [LIEN.] The tax imposed by this section is a lien 166.16 on the property assessed to the same extent and for the same 166.17 duration as other taxes imposed on property within this state. 166.18 The tax must be annually extended by the county auditor and when 166.19 payable must be collected and distributed in the manner provided 166.20 by law for the collection and distribution of other property 166.21 taxes. 166.22 Subd. 7. [SPECIAL LOCAL ASSESSMENTS.] The payment of 166.23 special local assessments levied after June 30, 2001, for 166.24 improvements made to any real property described in subdivision 166.25 2, together with the interest thereon must, on timely 166.26 application under subdivision 4, be deferred as long as the 166.27 property qualifies under subdivision 1. If special assessments 166.28 against the property have been deferred under this subdivision, 166.29 the governmental unit shall file with the county recorder in the 166.30 county in which the property is located a certificate containing 166.31 the legal description of the affected property and of the amount 166.32 deferred. When the property no longer qualifies under 166.33 subdivision 1, all deferred special assessments plus interest 166.34 are payable in equal installments spread over the time remaining 166.35 until the last maturity date of the bonds issued to finance the 166.36 improvement for which the assessments were levied. If the bonds 167.1 have matured, the deferred special assessments plus interest are 167.2 payable within 90 days. The provisions of section 429.061, 167.3 subdivision 2, apply to the collection of these installments. 167.4 Penalty must not be levied on the special assessments if timely 167.5 paid. 167.6 Subd. 8. [CONTINUATION OF TAX TREATMENT UPON SALE.] When 167.7 real property qualifying under subdivision 1 is sold, no 167.8 additional taxes or deferred special assessments plus interest 167.9 may be extended against the property if: 167.10 (1) the property continues to qualify pursuant to 167.11 subdivision 1; and 167.12 (2) the new owner files an application for continued 167.13 deferment within 30 days after the sale. 167.14 Subd. 9. [APPLICABILITY OF SPECIAL ASSESSMENT PROVISIONS.] 167.15 This section applies to special local assessments levied after 167.16 June 30, 2001, and payable in the years thereafter, but shall 167.17 not apply to any special assessments levied at any time by a 167.18 county or district court under the provisions of chapter 116A. 167.19[EFFECTIVE DATE.] This section is effective for taxes 167.20 levied in 2001, payable in 2002, and thereafter. For 167.21 applications for taxes payable in 2002 only, the application 167.22 deadline in subdivision 4 is extended to August 1, 2001. 167.23 Sec. 26. Minnesota Statutes 2000, section 273.121, is 167.24 amended to read: 167.25 273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 167.26 Any county assessor or city assessor having the powers of a 167.27 county assessor, valuing or classifying taxable real property 167.28 shall in each year notify those persons whose property is to be 167.29assessed or reclassifiedincluded on the assessment roll that 167.30 year if the person's address is known to the assessor, otherwise 167.31 the occupant of the property. The notice shall be in writing 167.32 and shall be sent by ordinary mail at least ten days before the 167.33 meeting of the local board of review or equalization under 167.34 section 274.01 or the review process established under section 167.35 274.13, subdivision 1c. It shall contain: (1) the market value 167.36 for the current and the prior assessment, (2) the limited market 168.1 value under section 273.11, subdivision 1a for the current and 168.2 the prior assessment, (3) the qualifying amount of any 168.3 improvements under section 273.11, subdivision 16 for the 168.4 current assessment, (4) the market value subject to taxation 168.5 after subtracting the amount of any qualifying improvements for 168.6 the current assessment, (5) thenewclassification of the 168.7 property for the current and prior assessment, (6) a note that 168.8 if the property is homestead and at least 35 years old, 168.9 improvements made to the property may be eligible for a 168.10 valuation exclusion under section 273.11, subdivision 16, (7) 168.11 the assessor's office address, and (8) the dates, places, and 168.12 times set for the meetings of the local board of review or 168.13 equalization, the review process established under section 168.14 274.13, subdivision 1c, and the county board of appeal and 168.15 equalization.If the assessment roll is not complete, the168.16notice shall be sent by ordinary mail at least ten days prior to168.17the date on which the board of review has adjournedThe 168.18 commissioner of revenue shall specify the form of the notice. 168.19 The assessor shall attach to the assessment roll a statement 168.20 that the notices required by this section have been mailed. Any 168.21 assessor who is not provided sufficient funds from the 168.22 assessor's governing body to provide such notices, may make 168.23 application to the commissioner of revenue to finance such 168.24 notices. The commissioner of revenue shall conduct an 168.25 investigation and, if satisfied that the assessor does not have 168.26 the necessary funds, issue a certification to the commissioner 168.27 of finance of the amount necessary to provide such notices. The 168.28 commissioner of finance shall issue a warrant for such amount 168.29 and shall deduct such amount from any state payment to such 168.30 county or municipality. The necessary funds to make such 168.31 payments are hereby appropriated. Failure to receive the notice 168.32 shall in no way affect the validity of the assessment, the 168.33 resulting tax, the procedures of any board of review or 168.34 equalization, or the enforcement of delinquent taxes by 168.35 statutory means. 168.36[EFFECTIVE DATE.] This section is effective for notices 169.1 required to be mailed in 2002 and thereafter. 169.2 Sec. 27. Minnesota Statutes 2000, section 273.124, 169.3 subdivision 1, is amended to read: 169.4 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 169.5 that is occupied and used for the purposes of a homestead by its 169.6 owner, who must be a Minnesota resident, is a residential 169.7 homestead. 169.8 Agricultural land, as defined in section 273.13, 169.9 subdivision 23, that is occupied and used as a homestead by its 169.10 owner, who must be a Minnesota resident, is an agricultural 169.11 homestead. 169.12 Dates for establishment of a homestead and homestead 169.13 treatment provided to particular types of property are as 169.14 provided in this section. 169.15 Property held by a trustee under a trust is eligible for 169.16 homestead classification if the requirements under this chapter 169.17 are satisfied. 169.18 The assessor shall require proof, as provided in 169.19 subdivision 13, of the facts upon which classification as a 169.20 homestead may be determined. Notwithstanding any other law, the 169.21 assessor may at any time require a homestead application to be 169.22 filed in order to verify that any property classified as a 169.23 homestead continues to be eligible for homestead status. 169.24 Notwithstanding any other law to the contrary, the department of 169.25 revenue may, upon request from an assessor, verify whether an 169.26 individual who is requesting or receiving homestead 169.27 classification has filed a Minnesota income tax return as a 169.28 resident for the most recent taxable year for which the 169.29 information is available. 169.30 When there is a name change or a transfer of homestead 169.31 property, the assessor may reclassify the property in the next 169.32 assessment unless a homestead application is filed to verify 169.33 that the property continues to qualify for homestead 169.34 classification. 169.35 (b) For purposes of this section, homestead property shall 169.36 include property which is used for purposes of the homestead but 170.1 is separated from the homestead by a road, street, lot, 170.2 waterway, or other similar intervening property. The term "used 170.3 for purposes of the homestead" shall include but not be limited 170.4 to uses for gardens, garages, or other outbuildings commonly 170.5 associated with a homestead, but shall not include vacant land 170.6 held primarily for future development. In order to receive 170.7 homestead treatment for the noncontiguous property, the owner 170.8 must use the property for the purposes of the homestead, and 170.9 must apply to the assessor, both by the deadlines given in 170.10 subdivision 9. After initial qualification for the homestead 170.11 treatment, additional applications for subsequent years are not 170.12 required. 170.13 (c) Residential real estate that is occupied and used for 170.14 purposes of a homestead by a relative of the owner is a 170.15 homestead but only to the extent of the homestead treatment that 170.16 would be provided if the related owner occupied the property. 170.17 For purposes of this paragraph and paragraph (g), "relative" 170.18 means a parent, stepparent, child, stepchild, grandparent, 170.19 grandchild, brother, sister, uncle, aunt, nephew, or niece. 170.20 This relationship may be by blood or marriage. Property that 170.21 has been classified as seasonal recreational residential 170.22 property at any time during which it has been owned by the 170.23 current owner or spouse of the current owner will not be 170.24 reclassified as a homestead unless it is occupied as a homestead 170.25 by the owner; this prohibition also applies to property that, in 170.26 the absence of this paragraph, would have been classified as 170.27 seasonal recreational residential property at the time when the 170.28 residence was constructed. Neither the related occupant nor the 170.29 owner of the property may claim a property tax refund under 170.30 chapter 290A for a homestead occupied by a relative. In the 170.31 case of a residence located on agricultural land, only the 170.32 house, garage, and immediately surrounding one acre of land 170.33 shall be classified as a homestead under this paragraph, except 170.34 as provided in paragraph (d). 170.35 (d) Agricultural property that is occupied and used for 170.36 purposes of a homestead by a relative of the owner, is a 171.1 homestead, only to the extent of the homestead treatment that 171.2 would be provided if the related owner occupied the property, 171.3 and only if all of the following criteria are met: 171.4 (1) the relative who is occupying the agricultural property 171.5 is a son, daughter, grandson, granddaughter, father, or mother 171.6 of the owner of the agricultural property or a son, daughter, 171.7 grandson, or granddaughter of the spouse of the owner of the 171.8 agricultural property; 171.9 (2) the owner of the agricultural property must be a 171.10 Minnesota resident; 171.11 (3) the owner of the agricultural property must not receive 171.12 homestead treatment on any other agricultural property in 171.13 Minnesota; and 171.14 (4) the owner of the agricultural property is limited to 171.15 only one agricultural homestead per family under this paragraph. 171.16 Neither the related occupant nor the owner of the property 171.17 may claim a property tax refund under chapter 290A for a 171.18 homestead occupied by a relative qualifying under this 171.19 paragraph. For purposes of this paragraph, "agricultural 171.20 property" means the house, garage, other farm buildings and 171.21 structures, and agricultural land. 171.22 Application must be made to the assessor by the owner of 171.23 the agricultural property to receive homestead benefits under 171.24 this paragraph. The assessor may require the necessary proof 171.25 that the requirements under this paragraph have been met. 171.26 (e) In the case of property owned by a property owner who 171.27 is married, the assessor must not deny homestead treatment in 171.28 whole or in part if only one of the spouses occupies the 171.29 property and the other spouse is absent due to: (1) marriage 171.30 dissolution proceedings, (2) legal separation, (3) employment or 171.31 self-employment in another location, or (4) other personal 171.32 circumstances causing the spouses to live separately, not 171.33 including an intent to obtain two homestead classifications for 171.34 property tax purposes. To qualify under clause (3), the 171.35 spouse's place of employment or self-employment must be at least 171.36 50 miles distant from the other spouse's place of employment, 172.1 and the homesteads must be at least 50 miles distant from each 172.2 other. Homestead treatment, in whole or in part, shall not be 172.3 denied to the owner's spouse who previously occupied the 172.4 residence with the owner if the absence of the owner is due to 172.5 one of the exceptions provided in this paragraph. 172.6 (f) The assessor must not deny homestead treatment in whole 172.7 or in part if: 172.8 (1) in the case of a property owner who is not married, the 172.9 owner is absent due to residence in a nursing homeor, boarding 172.10 care facility, or an elderly assisted living facility property 172.11 as defined in section 273.13, subdivision 25a, and the property 172.12 is not otherwise occupied; or 172.13 (2) in the case of a property owner who is married, the 172.14 owner or the owner's spouse or both are absent due to residence 172.15 in a nursing homeor, boarding care facility, or an elderly 172.16 assisted living facility property as defined in section 273.13, 172.17 subdivision 25a, and the property is not occupied or is occupied 172.18 only by the owner's spouse. 172.19 (g) If an individual is purchasing property with the intent 172.20 of claiming it as a homestead and is required by the terms of 172.21 the financing agreement to have a relative shown on the deed as 172.22 a coowner, the assessor shall allow a full homestead 172.23 classification. This provision only applies to first-time 172.24 purchasers, whether married or single, or to a person who had 172.25 previously been married and is purchasing as a single individual 172.26 for the first time. The application for homestead benefits must 172.27 be on a form prescribed by the commissioner and must contain the 172.28 data necessary for the assessor to determine if full homestead 172.29 benefits are warranted. 172.30 (h) If residential or agricultural real estate is occupied 172.31 and used for purposes of a homestead by a child of a deceased 172.32 owner and the property is subject to jurisdiction of probate 172.33 court, the child shall receive relative homestead classification 172.34 under paragraph (c) or (d) to the same extent they would be 172.35 entitled to it if the owner was still living, until the probate 172.36 is completed. For purposes of this paragraph, "child" includes 173.1 a relationship by blood or by marriage. 173.2[EFFECTIVE DATE.] This section is effective for taxes 173.3 levied in 2001, payable in 2002, and thereafter. 173.4 Sec. 28. Minnesota Statutes 2000, section 273.124, 173.5 subdivision 14, is amended to read: 173.6 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 173.7 (a) Real estate of less than ten acres that is the homestead of 173.8 its owner must be classified as class 2a under section 273.13, 173.9 subdivision 23, paragraph (a), if: 173.10 (1) the parcel on which the house is located is contiguous 173.11 on at least two sides to (i) agricultural land, (ii) land owned 173.12 or administered by the United States Fish and Wildlife Service, 173.13 or (iii) land administered by the department of natural 173.14 resources on which in lieu taxes are paid under sections 477A.11 173.15 to 477A.14; 173.16 (2) its owner also owns a noncontiguous parcel of 173.17 agricultural land that is at least 20 acres; 173.18 (3) the noncontiguous land is located not farther than four 173.19 townships or cities, or a combination of townships or cities 173.20 from the homestead; and 173.21 (4) the agricultural use value of the noncontiguous land 173.22 and farm buildings is equal to at least 50 percent of the market 173.23 value of the house, garage, and one acre of land. 173.24 Homesteads initially classified as class 2a under the 173.25 provisions of this paragraph shall remain classified as class 173.26 2a, irrespective of subsequent changes in the use of adjoining 173.27 properties, as long as the homestead remains under the same 173.28 ownership, the owner owns a noncontiguous parcel of agricultural 173.29 land that is at least 20 acres, and the agricultural use value 173.30 qualifies under clause (4). Homestead classification under this 173.31 paragraph is limited to property that qualified under this 173.32 paragraph for the 1998 assessment. 173.33 (b)(i) Agricultural property consisting of at least 40 173.34 acres shall be classified as the owner's homestead, to the same 173.35 extent as other agricultural homestead property, if all of the 173.36 following criteria are met: 174.1 (1) the owner, or the owner's son or daughter, is actively 174.2 farming the agricultural property; 174.3 (2) the owner of the agricultural property is a Minnesota 174.4 resident, and if the owner's son or daughter is actively farming 174.5 the agricultural property under clause (1), that person must 174.6 also be a Minnesota resident; 174.7 (3) neither the owner nor the spouse of the owner claims 174.8 another agricultural homestead in Minnesota; and 174.9 (4) neither the ownerdoes not livenor the person actively 174.10 farming the property lives farther than four townships or 174.11 cities, or a combination of four townships or cities, from the 174.12 agricultural property,andexcept that if theowner's son or174.13daughter is actively farming the agricultural property under174.14clause (1), that person must also live within theowner or the 174.15 owner's spouse is required to live in employer-provided housing, 174.16 the owner or owner's spouse, whichever is actively farming the 174.17 agricultural property, may live more than four townships or 174.18 cities, or combination of four townships or cities from the 174.19 agricultural property. 174.20 The relationship under this paragraph may be either by 174.21 blood or marriage. 174.22 (ii) Property containing the residence of an owner who owns 174.23 qualified property under clause (i) shall be classified as part 174.24 of the owner's agricultural homestead, if that property is also 174.25 used for noncommercial storage or drying of agricultural crops. 174.26 (c) Except as provided in paragraph (e), noncontiguous land 174.27 shall be included as part of a homestead under section 273.13, 174.28 subdivision 23, paragraph (a), only if the homestead is 174.29 classified as class 2a and the detached land is located in the 174.30 same township or city, or not farther than four townships or 174.31 cities or combination thereof from the homestead. Any taxpayer 174.32 of these noncontiguous lands must notify the county assessor 174.33 that the noncontiguous land is part of the taxpayer's homestead, 174.34 and, if the homestead is located in another county, the taxpayer 174.35 must also notify the assessor of the other county. 174.36 (d) Agricultural land used for purposes of a homestead and 175.1 actively farmed by a person holding a vested remainder interest 175.2 in it must be classified as a homestead under section 273.13, 175.3 subdivision 23, paragraph (a). If agricultural land is 175.4 classified class 2a, any other dwellings on the land used for 175.5 purposes of a homestead by persons holding vested remainder 175.6 interests who are actively engaged in farming the property, and 175.7 up to one acre of the land surrounding each homestead and 175.8 reasonably necessary for the use of the dwelling as a home, must 175.9 also be assessed class 2a. 175.10 (e) Agricultural land and buildings that were class 2a 175.11 homestead property under section 273.13, subdivision 23, 175.12 paragraph (a), for the 1997 assessment shall remain classified 175.13 as agricultural homesteads for subsequent assessments if: 175.14 (1) the property owner abandoned the homestead dwelling 175.15 located on the agricultural homestead as a result of the April 175.16 1997 floods; 175.17 (2) the property is located in the county of Polk, Clay, 175.18 Kittson, Marshall, Norman, or Wilkin; 175.19 (3) the agricultural land and buildings remain under the 175.20 same ownership for the current assessment year as existed for 175.21 the 1997 assessment year and continue to be used for 175.22 agricultural purposes; 175.23 (4) the dwelling occupied by the owner is located in 175.24 Minnesota and is within 30 miles of one of the parcels of 175.25 agricultural land that is owned by the taxpayer; and 175.26 (5) the owner notifies the county assessor that the 175.27 relocation was due to the 1997 floods, and the owner furnishes 175.28 the assessor any information deemed necessary by the assessor in 175.29 verifying the change in dwelling. Further notifications to the 175.30 assessor are not required if the property continues to meet all 175.31 the requirements in this paragraph and any dwellings on the 175.32 agricultural land remain uninhabited. 175.33 (f) Agricultural land and buildings that were class 2a 175.34 homestead property under section 273.13, subdivision 23, 175.35 paragraph (a), for the 1998 assessment shall remain classified 175.36 agricultural homesteads for subsequent assessments if: 176.1 (1) the property owner abandoned the homestead dwelling 176.2 located on the agricultural homestead as a result of damage 176.3 caused by a March 29, 1998, tornado; 176.4 (2) the property is located in the county of Blue Earth, 176.5 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 176.6 (3) the agricultural land and buildings remain under the 176.7 same ownership for the current assessment year as existed for 176.8 the 1998 assessment year; 176.9 (4) the dwelling occupied by the owner is located in this 176.10 state and is within 50 miles of one of the parcels of 176.11 agricultural land that is owned by the taxpayer; and 176.12 (5) the owner notifies the county assessor that the 176.13 relocation was due to a March 29, 1998, tornado, and the owner 176.14 furnishes the assessor any information deemed necessary by the 176.15 assessor in verifying the change in homestead dwelling. For 176.16 taxes payable in 1999, the owner must notify the assessor by 176.17 December 1, 1998. Further notifications to the assessor are not 176.18 required if the property continues to meet all the requirements 176.19 in this paragraph and any dwellings on the agricultural land 176.20 remain uninhabited. 176.21 (g) Agricultural property consisting of at least 40 acres 176.22 of a family farm corporation, joint farm venture, limited 176.23 liability company, or partnership as described under subdivision 176.24 8 shall be classified homestead, to the same extent as other 176.25 agricultural homestead property, if all of the following 176.26 criteria are met: 176.27 (1) the shareholder, member, or partner is actively farming 176.28 the agricultural property; 176.29 (2) the shareholder, member, or partner of the agricultural 176.30 property is a Minnesota resident; 176.31 (3) neither the shareholder, member, or partner, nor the 176.32 spouse of the shareholder, member, or partner claims another 176.33 agricultural homestead in Minnesota; and 176.34 (4) the shareholder, member, or partner does not live 176.35 farther than four townships or cities, or a combination of four 176.36 townships or cities, from the agricultural property. 177.1[EFFECTIVE DATE.] This section is effective for the 2001 177.2 assessment for taxes payable in 2002 and thereafter. 177.3 Sec. 29. Minnesota Statutes 2000, section 273.13, 177.4 subdivision 23, is amended to read: 177.5 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 177.6 land including any improvements that is homesteaded. The market 177.7 value of the house and garage and immediately surrounding one 177.8 acre of land has the same class rates as class 1a property under 177.9 subdivision 22. The value of the remaining land including 177.10 improvements up to $115,000 has a net class rate of 0.35 percent 177.11 of market value. The value of class 2a property over $115,000 177.12 of market value up to and including $600,000 market value has a 177.13 net class rate of 0.8 percent of market value. The remaining 177.14 property over $600,000 market value has a class rate of 1.20 177.15 percent of market value. 177.16 (b) Class 2b property is (1) real estate, rural in 177.17 character and used exclusively for growing trees for timber, 177.18 lumber, and wood and wood products; (2) real estate that is not 177.19 improved with a structure and is used exclusively for growing 177.20 trees for timber, lumber, and wood and wood products, if the 177.21 owner has participated or is participating in a cost-sharing 177.22 program for afforestation, reforestation, or timber stand 177.23 improvement on that particular property, administered or 177.24 coordinated by the commissioner of natural resources; (3) real 177.25 estate that is nonhomestead agricultural land; or (4) a landing 177.26 area or public access area of a privately owned public use 177.27 airport. Class 2b property has a net class rate of 1.20 percent 177.28 of market value. 177.29 (c) Agricultural land as used in this section means 177.30 contiguous acreage of ten acres or more, used during the 177.31 preceding year for agricultural purposes. "Agricultural 177.32 purposes" as used in this section means the raising or 177.33 cultivation of agricultural products or enrollment in the 177.34 Reinvest in Minnesota program under sections 103F.501 to 177.35 103F.535 or the federal Conservation Reserve Program as 177.36 contained in Public Law Number 99-198. Contiguous acreage on 178.1 the same parcel, or contiguous acreage on an immediately 178.2 adjacent parcel under the same ownership, may also qualify as 178.3 agricultural land, but only if it is pasture, timber, waste, 178.4 unusable wild land, or land included in state or federal farm 178.5 programs. Agricultural classification for property shall be 178.6 determined excluding the house, garage, and immediately 178.7 surrounding one acre of land, and shall not be based upon the 178.8 market value of any residential structures on the parcel or 178.9 contiguous parcels under the same ownership. 178.10 (d) Real estate, excluding the house, garage, and 178.11 immediately surrounding one acre of land, of less than ten acres 178.12 which is exclusively and intensively used for raising or 178.13 cultivating agricultural products, shall be considered as 178.14 agricultural land. 178.15 Land shall be classified as agricultural even if all or a 178.16 portion of the agricultural use of that property is the leasing 178.17 to, or use by another person for agricultural purposes. 178.18 Classification under this subdivision is not determinative 178.19 for qualifying under section 273.111. 178.20 The property classification under this section supersedes, 178.21 for property tax purposes only, any locally administered 178.22 agricultural policies or land use restrictions that define 178.23 minimum or maximum farm acreage. 178.24 (e) The term "agricultural products" as used in this 178.25 subdivision includes production for sale of: 178.26 (1) livestock, dairy animals, dairy products, poultry and 178.27 poultry products, fur-bearing animals, horticultural and nursery 178.28 stock described in sections 18.44 to 18.61, fruit of all kinds, 178.29 vegetables, forage, grains, bees, and apiary products by the 178.30 owner; 178.31 (2) fish bred for sale and consumption if the fish breeding 178.32 occurs on land zoned for agricultural use; 178.33 (3) the commercial boarding of horses if the boarding is 178.34 done in conjunction with raising or cultivating agricultural 178.35 products as defined in clause (1); 178.36 (4) property which is owned and operated by nonprofit 179.1 organizations used for equestrian activities, excluding racing; 179.2 (5) game birds and waterfowl bred and raised for use on a 179.3 shooting preserve licensed under section 97A.115; 179.4 (6) insects primarily bred to be used as food for 179.5 animals;and179.6 (7) trees, grown for sale as a crop, and not sold for 179.7 timber, lumber, wood, or wood products; and 179.8 (8) maple syrup taken from trees grown by a person licensed 179.9 by the Minnesota department of agriculture under chapter 28A as 179.10 a food processor. 179.11 (f) If a parcel used for agricultural purposes is also used 179.12 for commercial or industrial purposes, including but not limited 179.13 to: 179.14 (1) wholesale and retail sales; 179.15 (2) processing of raw agricultural products or other goods; 179.16 (3) warehousing or storage of processed goods; and 179.17 (4) office facilities for the support of the activities 179.18 enumerated in clauses (1), (2), and (3), 179.19 the assessor shall classify the part of the parcel used for 179.20 agricultural purposes as class 1b, 2a, or 2b, whichever is 179.21 appropriate, and the remainder in the class appropriate to its 179.22 use. The grading, sorting, and packaging of raw agricultural 179.23 products for first sale is considered an agricultural purpose. 179.24 A greenhouse or other building where horticultural or nursery 179.25 products are grown that is also used for the conduct of retail 179.26 sales must be classified as agricultural if it is primarily used 179.27 for the growing of horticultural or nursery products from seed, 179.28 cuttings, or roots and occasionally as a showroom for the retail 179.29 sale of those products. Use of a greenhouse or building only 179.30 for the display of already grown horticultural or nursery 179.31 products does not qualify as an agricultural purpose. 179.32 The assessor shall determine and list separately on the 179.33 records the market value of the homestead dwelling and the one 179.34 acre of land on which that dwelling is located. If any farm 179.35 buildings or structures are located on this homesteaded acre of 179.36 land, their market value shall not be included in this separate 180.1 determination. 180.2 (g) To qualify for classification under paragraph (b), 180.3 clause (4), a privately owned public use airport must be 180.4 licensed as a public airport under section 360.018. For 180.5 purposes of paragraph (b), clause (4), "landing area" means that 180.6 part of a privately owned public use airport properly cleared, 180.7 regularly maintained, and made available to the public for use 180.8 by aircraft and includes runways, taxiways, aprons, and sites 180.9 upon which are situated landing or navigational aids. A landing 180.10 area also includes land underlying both the primary surface and 180.11 the approach surfaces that comply with all of the following: 180.12 (i) the land is properly cleared and regularly maintained 180.13 for the primary purposes of the landing, taking off, and taxiing 180.14 of aircraft; but that portion of the land that contains 180.15 facilities for servicing, repair, or maintenance of aircraft is 180.16 not included as a landing area; 180.17 (ii) the land is part of the airport property; and 180.18 (iii) the land is not used for commercial or residential 180.19 purposes. 180.20 The land contained in a landing area under paragraph (b), clause 180.21 (4), must be described and certified by the commissioner of 180.22 transportation. The certification is effective until it is 180.23 modified, or until the airport or landing area no longer meets 180.24 the requirements of paragraph (b), clause (4). For purposes of 180.25 paragraph (b), clause (4), "public access area" means property 180.26 used as an aircraft parking ramp, apron, or storage hangar, or 180.27 an arrival and departure building in connection with the airport. 180.28[EFFECTIVE DATE.] This section is effective for taxes 180.29 levied in 2001, payable in 2002, and thereafter. 180.30 Sec. 30. Minnesota Statutes 2000, section 273.13, 180.31 subdivision 25, is amended to read: 180.32 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 180.33 estate containing four or more units and used or held for use by 180.34 the owner or by the tenants or lessees of the owner as a 180.35 residence for rental periods of 30 days or more. Class 4a also 180.36 includes hospitals licensed under sections 144.50 to 144.56, 181.1 other than hospitals exempt under section 272.02, and contiguous 181.2 property used for hospital purposes, without regard to whether 181.3 the property has been platted or subdivided. Class 4a property 181.4 in a city with a population of 5,000 or less, that is (1) 181.5 located outside of the metropolitan area, as defined in section 181.6 473.121, subdivision 2, or outside any county contiguous to the 181.7 metropolitan area, and (2) whose city boundary is at least 15 181.8 miles from the boundary of any city with a population greater 181.9 than 5,000 has a class rate of 2.15 percent of market value. 181.10 All other class 4a property has a class rate of 2.4 percent of 181.11 market value. For purposes of this paragraph, population has 181.12 the same meaning given in section 477A.011, subdivision 3. 181.13 (b) Class 4b includes: 181.14 (1) residential real estate containing less than four units 181.15 that does not qualify as class 4bb, other than seasonal 181.16 residential, and recreational; 181.17 (2) manufactured homes not classified under any other 181.18 provision; 181.19 (3) a dwelling, garage, and surrounding one acre of 181.20 property on a nonhomestead farm classified under subdivision 23, 181.21 paragraph (b) containing two or three units; 181.22 (4) unimproved property that is classified residential as 181.23 determined under subdivision 33. 181.24 Class 4b property has a class rate of 1.65 percent of 181.25 market value. 181.26 (c) Class 4bb includes: 181.27 (1) nonhomestead residential real estate containing one 181.28 unit, other than seasonal residential, and recreational; and 181.29 (2) a single family dwelling, garage, and surrounding one 181.30 acre of property on a nonhomestead farm classified under 181.31 subdivision 23, paragraph (b). 181.32 Class 4bb has a class rate of 1.2 percent on the first 181.33 $76,000 of market value and a class rate of 1.65 percent of its 181.34 market value that exceeds $76,000. 181.35 Property that has been classified as seasonal recreational 181.36 residential property at any time during which it has been owned 182.1 by the current owner or spouse of the current owner does not 182.2 qualify for class 4bb. 182.3 (d) Class 4c property includes: 182.4 (1) except as provided in subdivision 22, paragraph (c), 182.5 real property devoted to temporary and seasonal residential 182.6 occupancy for recreation purposes, including real property 182.7 devoted to temporary and seasonal residential occupancy for 182.8 recreation purposes and not devoted to commercial purposes for 182.9 more than 250 days in the year preceding the year of 182.10 assessment. For purposes of this clause, property is devoted to 182.11 a commercial purpose on a specific day if any portion of the 182.12 property is used for residential occupancy, and a fee is charged 182.13 for residential occupancy. In order for a property to be 182.14 classified as class 4c, seasonal recreational residential for 182.15 commercial purposes, at least 40 percent of the annual gross 182.16 lodging receipts related to the property must be from business 182.17 conducted during 90 consecutive days and either (i) at least 60 182.18 percent of all paid bookings by lodging guests during the year 182.19 must be for periods of at least two consecutive nights; or (ii) 182.20 at least 20 percent of the annual gross receipts must be from 182.21 charges for rental of fish houses, boats and motors, 182.22 snowmobiles, downhill or cross-country ski equipment, or charges 182.23 for marina services, launch services, and guide services, or the 182.24 sale of bait and fishing tackle. For purposes of this 182.25 determination, a paid booking of five or more nights shall be 182.26 counted as two bookings. Class 4c also includes commercial use 182.27 real property used exclusively for recreational purposes in 182.28 conjunction with class 4c property devoted to temporary and 182.29 seasonal residential occupancy for recreational purposes, up to 182.30 a total of two acres, provided the property is not devoted to 182.31 commercial recreational use for more than 250 days in the year 182.32 preceding the year of assessment and is located within two miles 182.33 of the class 4c property with which it is used. Class 4c 182.34 property classified in this clause also includes the remainder 182.35 of class 1c resorts provided that the entire property including 182.36 that portion of the property classified as class 1c also meets 183.1 the requirements for class 4c under this clause; otherwise the 183.2 entire property is classified as class 3. Owners of real 183.3 property devoted to temporary and seasonal residential occupancy 183.4 for recreation purposes and all or a portion of which was 183.5 devoted to commercial purposes for not more than 250 days in the 183.6 year preceding the year of assessment desiring classification as 183.7 class 1c or 4c, must submit a declaration to the assessor 183.8 designating the cabins or units occupied for 250 days or less in 183.9 the year preceding the year of assessment by January 15 of the 183.10 assessment year. Those cabins or units and a proportionate 183.11 share of the land on which they are located will be designated 183.12 class 1c or 4c as otherwise provided. The remainder of the 183.13 cabins or units and a proportionate share of the land on which 183.14 they are located will be designated as class 3a. The owner of 183.15 property desiring designation as class 1c or 4c property must 183.16 provide guest registers or other records demonstrating that the 183.17 units for which class 1c or 4c designation is sought were not 183.18 occupied for more than 250 days in the year preceding the 183.19 assessment if so requested. The portion of a property operated 183.20 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 183.21 nonresidential facility operated on a commercial basis not 183.22 directly related to temporary and seasonal residential occupancy 183.23 for recreation purposes shall not qualify for class 1c or 4c; 183.24 (2) qualified property used as a golf course if: 183.25 (i) it is open to the public on a daily fee basis. It may 183.26 charge membership fees or dues, but a membership fee may not be 183.27 required in order to use the property for golfing, and its green 183.28 fees for golfing must be comparable to green fees typically 183.29 charged by municipal courses; and 183.30 (ii) it meets the requirements of section 273.112, 183.31 subdivision 3, paragraph (d). 183.32 A structure used as a clubhouse, restaurant, or place of 183.33 refreshment in conjunction with the golf course is classified as 183.34 class 3a property; 183.35 (3) real property up to a maximum of one acre of land owned 183.36 by a nonprofit community service oriented organization; provided 184.1 that the property is not used for a revenue-producing activity 184.2 for more than six days in the calendar year preceding the year 184.3 of assessment and the property is not used for residential 184.4 purposes on either a temporary or permanent basis. For purposes 184.5 of this clause, a "nonprofit community service oriented 184.6 organization" means any corporation, society, association, 184.7 foundation, or institution organized and operated exclusively 184.8 for charitable, religious, fraternal, civic, or educational 184.9 purposes, and which is exempt from federal income taxation 184.10 pursuant to section 501(c)(3), (10), or (19) of the Internal 184.11 Revenue Code of 1986, as amended through December 31, 1990. For 184.12 purposes of this clause, "revenue-producing activities" shall 184.13 include but not be limited to property or that portion of the 184.14 property that is used as an on-sale intoxicating liquor or 3.2 184.15 percent malt liquor establishment licensed under chapter 340A, a 184.16 restaurant open to the public, bowling alley, a retail store, 184.17 gambling conducted by organizations licensed under chapter 349, 184.18 an insurance business, or office or other space leased or rented 184.19 to a lessee who conducts a for-profit enterprise on the 184.20 premises. Any portion of the property which is used for 184.21 revenue-producing activities for more than six days in the 184.22 calendar year preceding the year of assessment shall be assessed 184.23 as class 3a. The use of the property for social events open 184.24 exclusively to members and their guests for periods of less than 184.25 24 hours, when an admission is not charged nor any revenues are 184.26 received by the organization shall not be considered a 184.27 revenue-producing activity; 184.28 (4) post-secondary student housing of not more than one 184.29 acre of land that is owned by a nonprofit corporation organized 184.30 under chapter 317A and is used exclusively by a student 184.31 cooperative, sorority, or fraternity for on-campus housing or 184.32 housing located within two miles of the border of a college 184.33 campus; 184.34 (5) manufactured home parks as defined in section 327.14, 184.35 subdivision 3; 184.36 (6) real property that is actively and exclusively devoted 185.1 to indoor fitness, health, social, recreational, and related 185.2 uses, is owned and operated by a not-for-profit corporation, and 185.3 is located within the metropolitan area as defined in section 185.4 473.121, subdivision 2;and185.5 (7) a leased or privately owned noncommercial aircraft 185.6 storage hangar not exempt under section 272.01, subdivision 2, 185.7 and the land on which it is located, provided that: 185.8 (i) the land is on an airport owned or operated by a city, 185.9 town, county, metropolitan airports commission, or group 185.10 thereof; and 185.11 (ii) the land lease, or any ordinance or signed agreement 185.12 restricting the use of the leased premise, prohibits commercial 185.13 activity performed at the hangar. 185.14 If a hangar classified under this clause is sold after June 185.15 30, 2000, a bill of sale must be filed by the new owner with the 185.16 assessor of the county where the property is located within 60 185.17 days of the sale; and 185.18 (8) property or a portion of a property that is being used 185.19 exclusively as a licensed child care provider facility under 185.20 Minnesota Rules, parts 9503.0005 to 9503.0170 (Rule 3). 185.21 Class 4c property has a class rate of 1.65 percent of 185.22 market value, except that (i) each parcel of seasonal 185.23 residential recreational property not used for commercial 185.24 purposes has the same class rates as class 4bb property, (ii) 185.25 manufactured home parks assessed under clause (5) have the same 185.26 class rate as class 4b property, and (iii) property described in 185.27 paragraph (d), clause (4), has the same class rate as the rate 185.28 applicable to the first tier of class 4bb nonhomestead 185.29 residential real estate under paragraph (c). 185.30 (e) Class 4d property is qualifying low-income rental 185.31 housing certified to the assessor by the housing finance agency 185.32 under sections 273.126 and 462A.071. Class 4d includes land in 185.33 proportion to the total market value of the building that is 185.34 qualifying low-income rental housing. For all properties 185.35 qualifying as class 4d, the market value determined by the 185.36 assessor must be based on the normal approach to value using 186.1 normal unrestricted rents. 186.2 Class 4d property has a class rate of one percent of market 186.3 value. 186.4[EFFECTIVE DATE.] This section is effective for taxes 186.5 payable in 2002 and thereafter. 186.6 Sec. 31. [273.355] [WIND ENERGY CONVERSION SYSTEMS.] 186.7 Subdivision 1. [IN LIEU TAX.] A tax is imposed on 186.8 production of electricity from a wind energy conversion system 186.9 used as an electric power source that is installed after January 186.10 1, 1991. The tax is in lieu of ad valorem taxes on the wind 186.11 energy conversion system. The land on which the wind energy 186.12 conversion system is located remains taxable. 186.13 Subd. 2. [DEFINITIONS.] (a) For the purposes of this 186.14 section, the term: 186.15 (1) "wind energy conversion system" has the meaning given 186.16 that term in section 216C.06, subdivision 12; 186.17 (2) "large scale wind energy conversion system" means a 186.18 wind energy conversion system of more than 12 megawatts, as 186.19 measured by the nameplate capacity of the system or as combined 186.20 with other systems as provided in paragraph (b); 186.21 (3) "medium scale wind energy conversion system" means a 186.22 wind energy conversion system of between two and 12 megawatts, 186.23 as measured by the nameplate capacity of the system or as 186.24 combined with other systems as provided in paragraph (b); 186.25 (4) "small scale wind energy conversion system" means a 186.26 wind energy conversion system of two megawatts and under, as 186.27 measured by the nameplate capacity of the system or as combined 186.28 with other systems as provided in paragraph (b). 186.29 (b) The total size of a wind energy conversion system under 186.30 paragraph (a) shall be determined according to this paragraph. 186.31 Unless the systems are interconnected with different 186.32 distribution systems, the nameplate capacity of one wind energy 186.33 conversion system shall be combined with the nameplate capacity 186.34 of any other wind energy conversion system that is: (i) located 186.35 within five miles of the wind energy conversion system; (ii) 186.36 constructed within the same calendar year as the wind energy 187.1 conversion system; and (iii) under common ownership. In the 187.2 case of a dispute, the commissioner of commerce shall determine 187.3 the total size of the system, and shall draw all reasonable 187.4 inferences in favor of combining the systems. 187.5 (c) In making a determination under paragraph (b), clause 187.6 (iii), the commissioner of commerce may determine that two wind 187.7 energy conversion systems are under common ownership when the 187.8 underlying ownership structure contains similar persons or 187.9 entities, even if the ownership shares differ between the two 187.10 systems. Wind energy conversion systems are not under common 187.11 ownership solely because the same person or entity provided 187.12 equity financing for the systems. 187.13 Subd. 3. [RATE OF TAX.] The owner of a wind energy 187.14 conversion system shall pay: 187.15 (1) for a large scale wind energy conversion system, .22 187.16 cents per kilowatt-hour of electricity produced by the system; 187.17 and 187.18 (2) for a medium scale wind energy conversion system, .065 187.19 cents per kilowatt-hour of electricity produced by the system. 187.20 Small scale wind energy conversion systems are exempt from 187.21 taxation under this section. 187.22 Subd. 4. [REPORTS.] An owner of a wind energy conversion 187.23 system subject to tax under this section shall file a report 187.24 with the commissioner of revenue annually on or before March 1 187.25 detailing the amount of electricity in kilowatt-hours that was 187.26 produced by the wind energy conversion system. The commissioner 187.27 shall prescribe the form of the report. The report must contain 187.28 the information required by the commissioner to determine the 187.29 tax due to each county under this section for the current year. 187.30 If an owner of a wind energy conversion system subject to 187.31 taxation under this section fails to file the report by the due 187.32 date, the commissioner of revenue shall determine the tax based 187.33 upon the nameplate capacity of the system multiplied by a 187.34 capacity factor of 30 percent. On or before March 31, the 187.35 commissioner of revenue shall notify the owner of the wind 187.36 energy conversion systems of the tax due to each county for the 188.1 current year and shall certify to the county auditor of each 188.2 county in which the systems are located the tax due from each 188.3 owner for the current year. 188.4 Subd. 5. [PAYMENT OF TAX; COLLECTION.] The taxes as 188.5 determined by the commissioner of revenue must be contained on 188.6 the lists of taxes due delivered by the county auditor to the 188.7 county treasurer. The taxes must be paid to the county 188.8 treasurer at the time and in the manner provided for payment of 188.9 property taxes under section 277.01, subdivision 3, and, if 188.10 unpaid, are subject to the same enforcement, collection, and 188.11 interest and penalties as delinquent personal property taxes. 188.12 Except to the extent inconsistent with this section, the 188.13 provisions of sections 277.01 to 277.24 and 278.01 to 278.13 188.14 apply to the taxes imposed under this section, and for purposes 188.15 of those provisions the taxes imposed under this section are 188.16 considered personal property taxes. 188.17 Subd. 6. [DISTRIBUTION OF REVENUES.] Revenues from the 188.18 taxes imposed under this section must be part of the settlement 188.19 between the county treasurer and the county auditor under 188.20 section 276.09 and apportioned and distributed by the county 188.21 auditor and the county treasurer to the county, school district, 188.22 city or town, and special taxing districts in which the property 188.23 is located, in the same manner and in the same proportion as the 188.24 other property taxes are apportioned and distributed. 188.25[EFFECTIVE DATE.] This section is effective for energy 188.26 produced by wind energy conversion systems subject to taxation 188.27 under that section after January 1, 2002. 188.28 Sec. 32. Minnesota Statutes 2000, section 274.01, 188.29 subdivision 1, is amended to read: 188.30 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 188.31 GRIEVANCES.] (a) The town board of a town, or the council or 188.32 other governing body of a city, is the board ofreviewappeal 188.33 and equalization except (1) in cities whose charters provide for 188.34 a board of equalization or (2) in any city or town that has 188.35 transferred its local board of review power and duties to the 188.36 county board as provided in subdivision 3. The county assessor 189.1 shall fix a day and time when the board or the board of 189.2 equalization shall meet in the assessment districts of the 189.3 county. Notwithstanding any law or city charter to the 189.4 contrary, a city board of equalization shall be referred to as a 189.5 board of appeal and equalization. On or before February 15 of 189.6 each year the assessor shall give written notice of the time to 189.7 the city or town clerk. Notwithstanding the provisions of any 189.8 charter to the contrary, the meetings must be held between April 189.9 1 and May 31 each year. The clerk shall give published and 189.10 posted notice of the meeting at least ten days before the date 189.11 of the meeting. 189.12If in any county, at least 25 percent of the total net tax189.13capacity of a city or town is noncommercial seasonal residential189.14recreational property classified under section 273.13,189.15subdivision 25, the county must hold two countywide189.16informational meetings on Saturdays. The meetings will allow189.17noncommercial seasonal residential recreational taxpayers to189.18discuss their property valuation with the appropriate assessment189.19staff. These Saturday informational meetings must be scheduled189.20to allow the owner of the noncommercial seasonal residential189.21recreational property the opportunity to attend one of the189.22meetings prior to the scheduled board of review for their city189.23or town. The Saturday meeting dates must be contained on the189.24notice of valuation of real property under section 273.121.189.25 The board shall meet at the office of the clerk to review 189.26 the assessment and classification of property in the town or 189.27 city. No changes in valuation or classification which are 189.28 intended to correct errors in judgment by the county assessor 189.29 may be made by the county assessor after the boardof reviewhas 189.30 adjourned in those cities or towns that hold a local board of 189.31 review; however, corrections of errors that are merely clerical 189.32 in nature or changes that extend homestead treatment to property 189.33 are permitted after adjournment until the tax extension date for 189.34 that assessment year. The changes must be fully documented and 189.35 maintained in the assessor's office and must be available for 189.36 review by any person. A copy of the changes made during this 190.1 period in those cities or towns that hold a local board of 190.2 review must be sent to the county board no later than December 190.3 31 of the assessment year. 190.4 (b) The board shall determine whether the taxable property 190.5 in the town or city has been properly placed on the list and 190.6 properly valued by the assessor. If real or personal property 190.7 has been omitted, the board shall place it on the list with its 190.8 market value, and correct the assessment so that each tract or 190.9 lot of real property, and each article, parcel, or class of 190.10 personal property, is entered on the assessment list at its 190.11 market value. No assessment of the property of any person may 190.12 be raised unless the person has been duly notified of the intent 190.13 of the board to do so. On application of any person feeling 190.14 aggrieved, the board shall review the assessment or 190.15 classification, or both, and correct it as appears just. The 190.16 board may not make an individual market value adjustment or 190.17 classification change that would benefit the property in cases 190.18 where the owner or other person having control over the property 190.19 will not permit the assessor to inspect the property and the 190.20 interior of any buildings or structures. 190.21 (c) A local boardof reviewmay reduce assessments upon 190.22 petition of the taxpayer but the total reductions must not 190.23 reduce the aggregate assessment made by the county assessor by 190.24 more than one percent. If the total reductions would lower the 190.25 aggregate assessments made by the county assessor by more than 190.26 one percent, none of the adjustments may be made. The assessor 190.27 shall correct any clerical errors or double assessments 190.28 discovered by the boardof reviewwithout regard to the one 190.29 percent limitation. 190.30 (d) A majority of the members may act at the meeting, and 190.31 adjourn from day to day until they finish hearing the cases 190.32 presented. The assessor shall attend, with the assessment books 190.33 and papers, and take part in the proceedings, but must not 190.34 vote. The county assessor, or an assistant delegated by the 190.35 county assessor shall attend the meetings. The board shall list 190.36 separately, on a form appended to the assessment book, all 191.1 omitted property added to the list by the board and all items of 191.2 property increased or decreased, with the market value of each 191.3 item of property, added or changed by the board, placed opposite 191.4 the item. The county assessor shall enter all changes made by 191.5 the board in the assessment book. 191.6 (e) Except as provided in subdivision 3, if a person fails 191.7 to appear in person, by counsel, or by written communication 191.8 before the board after being duly notified of the board's intent 191.9 to raise the assessment of the property, or if a person feeling 191.10 aggrieved by an assessment or classification fails to apply for 191.11 a review of the assessment or classification, the person may not 191.12 appear before the county board of appeal and equalization for a 191.13 review of the assessment or classification. This paragraph does 191.14 not apply if an assessment was made after the local board 191.15 meeting, as provided in section 273.01, or if the person can 191.16 establish not having received notice of market value at least 191.17 five days before the local boardof reviewmeeting. 191.18 (f) The local boardof review or the board of equalization191.19 must complete its work and adjourn within 20 days from the time 191.20 of convening stated in the notice of the clerk, unless a longer 191.21 period is approved by the commissioner of revenue. No action 191.22 taken after that date is valid. All complaints about an 191.23 assessment or classification made after the meeting of the board 191.24 must be heard and determined by the county board of 191.25 equalization. A nonresident may, at any time, before the 191.26 meeting of the boardof reviewfile written objections to an 191.27 assessment or classification with the county assessor. The 191.28 objections must be presented to the boardof reviewat its 191.29 meeting by the county assessor for its consideration. 191.30[EFFECTIVE DATE.] This section is effective January 1, 191.31 2002, and thereafter. 191.32 Sec. 33. Minnesota Statutes 2000, section 274.13, 191.33 subdivision 1, is amended to read: 191.34 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 191.35 ASSESSMENTS.] The county commissioners, or a majority of them, 191.36 with the county auditor, or, if the auditor cannot be present, 192.1 the deputy county auditor, or, if there is no deputy, the court 192.2 administrator of the district court, shall form a board for the 192.3 equalization of the assessment of the property of the county, 192.4 including the property of all cities whose charters provide for 192.5 a board of equalization. This board shall be referred to as the 192.6 county board of appeal and equalization. The board shall meet 192.7 annually, on the date specified in section 274.14, at the office 192.8 of the auditor. Each member shall take an oath to fairly and 192.9 impartially perform duties as a member. The board shall examine 192.10 and compare the returns of the assessment of property of the 192.11 towns or districts, and equalize them so that each tract or lot 192.12 of real property and each article or class of personal property 192.13 is entered on the assessment list at its market value, subject 192.14 to the following rules: 192.15 (1) The board shall raise the valuation of each tract or 192.16 lot of real property which in its opinion is returned below its 192.17 market value to the sum believed to be its market value. The 192.18 board must first give notice of intention to raise the valuation 192.19 to the person in whose name it is assessed, if the person is a 192.20 resident of the county. The notice must fix a time and place 192.21 for a hearing. 192.22 (2) The board shall reduce the valuation of each tract or 192.23 lot which in its opinion is returned above its market value to 192.24 the sum believed to be its market value. 192.25 (3) The board shall raise the valuation of each class of 192.26 personal property which in its opinion is returned below its 192.27 market value to the sum believed to be its market value. It 192.28 shall raise the aggregate value of the personal property of 192.29 individuals, firms, or corporations, when it believes that the 192.30 aggregate valuation, as returned, is less than the market value 192.31 of the taxable personal property possessed by the individuals, 192.32 firms, or corporations, to the sum it believes to be the market 192.33 value. The board must first give notice to the persons of 192.34 intention to do so. The notice must set a time and place for a 192.35 hearing. 192.36 (4) The board shall reduce the valuation of each class of 193.1 personal property that is returned above its market value to the 193.2 sum it believes to be its market value. Upon complaint of a 193.3 party aggrieved, the board shall reduce the aggregate valuation 193.4 of the individual's personal property, or of any class of 193.5 personal property for which the individual is assessed, which in 193.6 its opinion has been assessed at too large a sum, to the sum it 193.7 believes was the market value of the individual's personal 193.8 property of that class. 193.9 (5) The board must not reduce the aggregate value of all 193.10 the property of its county, as submitted to the county board of 193.11 equalization, with the additions made by the auditor under this 193.12 chapter, by more than one percent of its whole valuation. The 193.13 board may raise the aggregate valuation of real property, and of 193.14 each class of personal property, of the county, or of any town 193.15 or district of the county, when it believes it is below the 193.16 market value of the property, or class of property, to the 193.17 aggregate amount it believes to be its market value. 193.18 (6) The board shall change the classification of any 193.19 property which in its opinion is not properly classified. 193.20[EFFECTIVE DATE.] This section is effective January 1, 193.21 2002, and thereafter. 193.22 Sec. 34. Minnesota Statutes 2000, section 275.065, 193.23 subdivision 3, is amended to read: 193.24 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 193.25 county auditor shall prepare and the county treasurer shall 193.26 deliver after November 10 and on or before November 24 each 193.27 year, by first class mail to each taxpayer at the address listed 193.28 on the county's current year's assessment roll, a notice of 193.29 proposed property taxes. 193.30 (b) The commissioner of revenue shall prescribe the form of 193.31 the notice. 193.32 (c) The notice must inform taxpayers that it contains the 193.33 amount of property taxes each taxing authority proposes to 193.34 collect for taxes payable the following year. In the case of a 193.35 town,or in the case of the state determined portion of the193.36school district levy,the final tax amount will be its proposed 194.1 tax. In the case of taxing authorities required to hold a 194.2 public meeting under subdivision 6, the notice must clearly 194.3 state that each taxing authority, including regional library 194.4 districts established under section 134.201, and including the 194.5 metropolitan taxing districts as defined in paragraph (i), but 194.6 excluding all other special taxing districts and towns, will 194.7 hold a public meeting to receive public testimony on the 194.8 proposed budget and proposed or final property tax levy, or, in 194.9 case of a school district, on the current budget and proposed 194.10 property tax levy. It must clearly state the time and place of 194.11 each taxing authority's meeting, a phone number for the taxing 194.12 jurisdiction where taxpayers may call if they have questions 194.13 related to the notice, and an address where comments will be 194.14 received by mail. 194.15 (d) The notice must state for each parcel: 194.16 (1) the market value of the property as determined under 194.17 section 273.11, and used for computing property taxes payable in 194.18 the following year and for taxes payable in the current year as 194.19 each appears in the records of the county assessor on November 1 194.20 of the current year; and, in the case of residential property, 194.21 whether the property is classified as homestead or 194.22 nonhomestead. The notice must clearly inform taxpayers of the 194.23 years to which the market values apply and that the values are 194.24 final values; 194.25 (2) the items listed below, shown separately by county, 194.26 city or town, statedetermined schooltaxnet of the education194.27homestead creditunder section273.1382275.02, voter approved 194.28 school levy, other local school levy, and the sum of the special 194.29 taxing districts, and as a total of all taxing authorities: 194.30 (i) the actual tax for taxes payable in the current 194.31 year; and 194.32 (ii)the tax change due to spending factors, defined as the194.33proposed tax minus the constant spending tax amount;194.34(iii) the tax change due to other factors, defined as the194.35constant spending tax amount minus the actual current year tax;194.36and195.1(iv)the proposed tax amount net of credits. 195.2 In the case of a town or the statedetermined schooltax, 195.3 the final tax shall also be its proposed tax unless the town 195.4 changes its levy at a special town meeting under section 195.5 365.52. If a school district has certified under section 195.6 126C.17, subdivision 9, that a referendum will be held in the 195.7 school district at the November general election, the county 195.8 auditor must note next to the school district's proposed amount 195.9 that a referendum is pending and that, if approved by the 195.10 voters, the tax amount may be higher than shown on the notice. 195.11 In the case of the city of Minneapolis, the levy for the 195.12 Minneapolis library board and the levy for Minneapolis park and 195.13 recreation shall be listed separately from the remaining amount 195.14 of the city's levy. In the case of a parcel where tax increment 195.15 or the fiscal disparities areawide tax under chapter 276A or 195.16 473F applies, the proposed tax levy on the captured value or the 195.17 proposed tax levy on the tax capacity subject to the areawide 195.18 tax must each be stated separately and not included in the sum 195.19 of the special taxing districts; and 195.20 (3) the increase or decrease between the total taxes 195.21 payable in the current year and the total proposed taxes, 195.22 expressed as a percentage. 195.23 For purposes of this section, the amount of the tax on 195.24 homesteads qualifying under the senior citizens' property tax 195.25 deferral program under chapter 290B is the total amount of 195.26 property tax before subtraction of the deferred property tax 195.27 amount. 195.28 (e) The notice must clearly state that the proposed or 195.29 final taxes do not include the following: 195.30 (1) special assessments; 195.31 (2) levies approved by the voters after the date the 195.32 proposed taxes are certified, including bond referenda, school 195.33 district levy referenda, and levy limit increase referenda; 195.34 (3) amounts necessary to pay cleanup or other costs due to 195.35 a natural disaster occurring after the date the proposed taxes 195.36 are certified; 196.1 (4) amounts necessary to pay tort judgments against the 196.2 taxing authority that become final after the date the proposed 196.3 taxes are certified; and 196.4 (5) the contamination tax imposed on properties which 196.5 received market value reductions for contamination. 196.6 (f) Except as provided in subdivision 7, failure of the 196.7 county auditor to prepare or the county treasurer to deliver the 196.8 notice as required in this section does not invalidate the 196.9 proposed or final tax levy or the taxes payable pursuant to the 196.10 tax levy. 196.11 (g) If the notice the taxpayer receives under this section 196.12 lists the property as nonhomestead, and satisfactory 196.13 documentation is provided to the county assessor by the 196.14 applicable deadline, and the property qualifies for the 196.15 homestead classification in that assessment year, the assessor 196.16 shall reclassify the property to homestead for taxes payable in 196.17 the following year. 196.18 (h) In the case of class 4 residential property used as a 196.19 residence for lease or rental periods of 30 days or more, the 196.20 taxpayer must either: 196.21 (1) mail or deliver a copy of the notice of proposed 196.22 property taxes to each tenant, renter, or lessee; or 196.23 (2) post a copy of the notice in a conspicuous place on the 196.24 premises of the property. 196.25 The notice must be mailed or posted by the taxpayer by 196.26 November 27 or within three days of receipt of the notice, 196.27 whichever is later. A taxpayer may notify the county treasurer 196.28 of the address of the taxpayer, agent, caretaker, or manager of 196.29 the premises to which the notice must be mailed in order to 196.30 fulfill the requirements of this paragraph. 196.31 (i) For purposes of this subdivision, subdivisions 5a and 196.32 6, "metropolitan special taxing districts" means the following 196.33 taxing districts in the seven-county metropolitan area that levy 196.34 a property tax for any of the specified purposes listed below: 196.35 (1) metropolitan council under section 473.132, 473.167, 196.36 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 197.1 (2) metropolitan airports commission under section 473.667, 197.2 473.671, or 473.672; and 197.3 (3) metropolitan mosquito control commission under section 197.4 473.711. 197.5 For purposes of this section, any levies made by the 197.6 regional rail authorities in the county of Anoka, Carver, 197.7 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 197.8 398A shall be included with the appropriate county's levy and 197.9 shall be discussed at that county's public hearing. 197.10 (j) If a statutory or home rule charter city or a town has 197.11 exercised the local levy option provided by section 473.388, 197.12 subdivision 7, it may include in the notice of its proposed 197.13 taxes the amount of its proposed taxes attributable to its 197.14 exercise of the option. In the first year of the city or town's 197.15 exercise of this option, the statement shall include an estimate 197.16 of the reduction of the metropolitan council's tax on the parcel 197.17 due to exercise of that option. The metropolitan council's levy 197.18 shall be adjusted accordingly. 197.19[EFFECTIVE DATE.] This section is effective for notices of 197.20 proposed property taxes required in 2001 for taxes payable in 197.21 2002, and thereafter. 197.22 Sec. 35. Minnesota Statutes 2000, section 275.065, 197.23 subdivision 5a, is amended to read: 197.24 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 197.25 population of more than 2,500, county, a metropolitan special 197.26 taxing district as defined in subdivision 3, paragraph (i), a 197.27 regional library district established under section 134.201, or 197.28 school district shall advertise in a newspaper a notice of its 197.29 intent to adopt a budget and property tax levy or, in the case 197.30 of a school district, to review its current budget and proposed 197.31 property taxes payable in the following year, at a public 197.32 hearing, if a public hearing is required under subdivision 6. 197.33 The notice must be published not less than two business days nor 197.34 more than six business days before the hearing. 197.35 The advertisement must be at least one-eighth page in size 197.36 of a standard-size or a tabloid-size newspaper. The 198.1 advertisement must not be placed in the part of the newspaper 198.2 where legal notices and classified advertisements appear. The 198.3 advertisement must be published in an official newspaper of 198.4 general circulation in the taxing authority. The newspaper 198.5 selected must be one of general interest and readership in the 198.6 community, and not one of limited subject matter. The 198.7 advertisement must appear in a newspaper that is published at 198.8 least once per week. 198.9 For purposes of this section, the metropolitan special 198.10 taxing district's advertisement must only be published in the 198.11 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 198.12 (b) The advertisement for school districts, metropolitan 198.13 special taxing districts, and regional library districts must be 198.14 in the following form, except that the notice for a school 198.15 district may include references to the current budget in regard 198.16 to proposed property taxes. 198.17 "NOTICE OF 198.18 PROPOSED PROPERTY TAXES 198.19 (School District/Metropolitan 198.20 Special Taxing District/Regional 198.21 Library District) of ......... 198.22 The governing body of ........ will soon hold budget hearings 198.23 and vote on the property taxes for (metropolitan special taxing 198.24 district/regional library district services that will be 198.25 provided in (year)/school district services that will be 198.26 provided in (year) and (year)). 198.27 NOTICE OF PUBLIC HEARING: 198.28 All concerned citizens are invited to attend a public hearing 198.29 and express their opinions on the proposed (school 198.30 district/metropolitan special taxing district/regional library 198.31 district) budget and property taxes, or in the case of a school 198.32 district, its current budget and proposed property taxes, 198.33 payable in the following year. The hearing will be held on 198.34 (Month/Day/Year) at (Time) at (Location, Address)." 198.35 (c) The advertisement for cities and counties must be in 198.36 the following form. 199.1 "NOTICE OF PROPOSED 199.2 TOTAL BUDGET AND PROPERTY TAXES 199.3 The (city/county) governing body or board of commissioners will 199.4 hold a public hearing to discuss the budget and to vote on the 199.5 amount of property taxes to collect for services the 199.6 (city/county) will provide in (year). 199.7 199.8 SPENDING: The total budget amounts below compare 199.9 (city's/county's) (year) total actual budget with the amount the 199.10 (city/county) proposes to spend in (year). 199.11 199.12 (Year) Total Proposed (Year) Change from 199.13 Actual Budget Budget (Year)-(Year) 199.14 199.15 $....... $....... ...% 199.16 199.17 TAXES: The property tax amounts below compare that portion of 199.18 the current budget levied in property taxes in (city/county) for 199.19 (year) with the property taxes the (city/county) proposes to 199.20 collect in (year). 199.21 199.22 (Year) Property Proposed (Year) Change from 199.23 Taxes Property Taxes (Year)-(Year) 199.24 199.25 $....... $....... ...% 199.26 199.27 ATTEND THE PUBLIC HEARING 199.28 All (city/county) residents are invited to attend the public 199.29 hearing of the (city/county) to express your opinions on the 199.30 budget and the proposed amount of (year) property taxes. The 199.31 hearing will be held on: 199.32 (Month/Day/Year/Time) 199.33 (Location/Address) 199.34 If the discussion of the budget cannot be completed, a time and 199.35 place for continuing the discussion will be announced at the 199.36 hearing. You are also invited to send your written comments to: 200.1 (City/County) 200.2 (Location/Address)" 200.3 (d) For purposes of this subdivision, the budget amounts 200.4 listed on the advertisement mean: 200.5 (1) for cities, the total government fund expenditures, as 200.6 defined by the state auditor under section 471.6965, less any 200.7 expenditures for improvements or services that are specially 200.8 assessed or charged under chapter 429, 430, 435, or the 200.9 provisions of any other law or charter; and 200.10 (2) for counties, the total government fund expenditures, 200.11 as defined by the state auditor under section 375.169, less any 200.12 expenditures for direct payments to recipients or providers for 200.13 the human service aids listed below: 200.14 (i) Minnesota family investment program under chapters 256J 200.15 and 256K; 200.16 (ii) medical assistance under sections 256B.041, 200.17 subdivision 5, and 256B.19, subdivision 1; 200.18 (iii) general assistance medical care under section 200.19 256D.03, subdivision 6; 200.20 (iv) general assistance under section 256D.03, subdivision 200.21 2; 200.22 (v) emergency assistance under section 256J.48; 200.23 (vi) Minnesota supplemental aid under section 256D.36, 200.24 subdivision 1; 200.25 (vii) preadmission screening under section 256B.0911, and 200.26 alternative care grants under section 256B.0913; 200.27 (viii) general assistance medical care claims processing, 200.28 medical transportation and related costs under section 256D.03, 200.29 subdivision 4; 200.30 (ix) medical transportation and related costs under section 200.31 256B.0625, subdivisions 17 to 18a; 200.32 (x) group residential housing under section 256I.05, 200.33 subdivision 8, transferred from programs in clauses (iv) and 200.34 (vi); or 200.35 (xi) any successor programs to those listed in clauses (i) 200.36 to (x). 201.1 (e) A city with a population of over 500 but not more than 201.2 2,500 that is required to hold a public hearing under 201.3 subdivision 6 must advertise by posted notice as defined in 201.4 section 645.12, subdivision 1. The advertisement must be posted 201.5 at the time provided in paragraph (a). It must be in the form 201.6 required in paragraph (b). 201.7 (f) For purposes of this subdivision, the population of a 201.8 city is the most recent population as determined by the state 201.9 demographer under section 4A.02. 201.10 (g) The commissioner of revenue, subject to the approval of 201.11 the chairs of the house and senate tax committees, shall 201.12 prescribe the form and format of theadvertisement201.13 advertisements required under this subdivision. 201.14[EFFECTIVE DATE.] This section is effective for public 201.15 advertisements required in 2001 for taxes payable in 2002, and 201.16 thereafter. 201.17 Sec. 36. Minnesota Statutes 2000, section 275.065, 201.18 subdivision 6, is amended to read: 201.19 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 201.20 (a) For purposes of this section, the following terms shall have 201.21 the meanings given: 201.22 (1) "Initial hearing" means the first and primary hearing 201.23 held to discuss the taxing authority's proposed budget and 201.24 proposed property tax levy for taxes payable in the following 201.25 year, or, for school districts, the current budget and the 201.26 proposed property tax levy for taxes payable in the following 201.27 year. 201.28 (2) "Continuation hearing" means a hearing held to complete 201.29 the initial hearing, if the initial hearing is not completed on 201.30 its scheduled date. 201.31 (3) "Subsequent hearing" means the hearing held to adopt 201.32 the taxing authority's final property tax levy, and, in the case 201.33 of taxing authorities other than school districts, the final 201.34 budget, for taxes payable in the following year. 201.35 (b) Between November 29 and December 20, the governing 201.36 bodies of a city that has a population over 500, county, 202.1 metropolitan special taxing districts as defined in subdivision 202.2 3, paragraph (i), and regional library districts shall each hold 202.3 an initial public hearing to discuss and seek public comment on 202.4 its final budget and property tax levy for taxes payable in the 202.5 following year, and the governing body of the school district 202.6 shall hold an initial public hearing to review its current 202.7 budget and proposed property tax levy for taxes payable in the 202.8 following year. The metropolitan special taxing districts shall 202.9 be required to hold only a single joint initial public hearing, 202.10 the location of which will be determined by the affected 202.11 metropolitan agencies. A city, county, metropolitan special 202.12 taxing district as defined in subdivision 3, paragraph (i), 202.13 regional library district established under section 134.201, or 202.14 school district is not required to hold a public hearing under 202.15 this subdivision unless its proposed property tax levy for taxes 202.16 payable in the following year, as certified under subdivision 1, 202.17 has increased over its final property tax levy for taxes payable 202.18 in the current year by a percentage that is greater than the 202.19 percentage increase in the implicit price deflator for 202.20 government consumption expenditures and gross investment for 202.21 state and local governments prepared by the Bureau of Economic 202.22 Analysts of the United States Department of Commerce for the 202.23 12-month period ending March 31 of the current year. 202.24 (c) The initial hearing must be held after 5:00 p.m. if 202.25 scheduled on a day other than Saturday. No initial hearing may 202.26 be held on a Sunday. 202.27 (d) At the initial hearing under this subdivision, the 202.28 percentage increase in property taxes proposed by the taxing 202.29 authority, if any, and the specific purposes for which property 202.30 tax revenues are being increased must be discussed. During the 202.31 discussion, the governing body shall hear comments regarding a 202.32 proposed increase and explain the reasons for the proposed 202.33 increase. The public shall be allowed to speak and to ask 202.34 questions. At the public hearing, the school district must also 202.35 provide and discuss information on the distribution of its 202.36 revenues by revenue source, and the distribution of its spending 203.1 by program area. 203.2 (e) If the initial hearing is not completed on its 203.3 scheduled date, the taxing authority must announce, prior to 203.4 adjournment of the hearing, the date, time, and place for the 203.5 continuation of the hearing. The continuation hearing must be 203.6 held at least five business days but no more than 14 business 203.7 days after the initial hearing. A continuation hearing may not 203.8 be held later than December 20 except as provided in paragraphs 203.9 (f) and (g). A continuation hearing must be held after 5:00 203.10 p.m. if scheduled on a day other than Saturday. No continuation 203.11 hearing may be held on a Sunday. 203.12 (f) The governing body of a county shall hold its initial 203.13 hearing on the first Thursday in December each year, and may 203.14 hold additional initial hearings on other dates before December 203.15 20 if necessary for the convenience of county residents. If the 203.16 county needs a continuation of its hearing, the continuation 203.17 hearing shall be held on the third Tuesday in December. If the 203.18 third Tuesday in December falls on December 21, the county's 203.19 continuation hearing shall be held on Monday, December 20. 203.20 (g) The metropolitan special taxing districts shall hold a 203.21 joint initial public hearing on the first Wednesday of 203.22 December. A continuation hearing, if necessary, shall be held 203.23 on the second Wednesday of December even if that second 203.24 Wednesday is after December 10. 203.25 (h) The county auditor shall provide for the coordination 203.26 of initial and continuation hearing dates for all school 203.27 districts and cities within the county to prevent conflicts 203.28 under clauses (i) and (j). 203.29 (i) By August 10, each school board and the board of the 203.30 regional library district shall certify to the county auditors 203.31 of the counties in which the school district or regional library 203.32 district is located the dates on which it elects to hold its 203.33 initial hearing and any continuation hearing. If a school board 203.34 or regional library district does not certify these dates by 203.35 August 10, the auditor will assign the initial and continuation 203.36 hearing dates. The dates elected or assigned must not conflict 204.1 with the initial and continuation hearing dates of the county or 204.2 the metropolitan special taxing districts. 204.3 (j) By August 20, the county auditor shall notify the 204.4 clerks of the cities within the county of the dates on which 204.5 school districts and regional library districts have elected to 204.6 hold their initial and continuation hearings. At the time a 204.7 city certifies its proposed levy under subdivision 1 it shall 204.8 certify the dates on which it elects to hold its initial hearing 204.9 and any continuation hearing. Until September 15, the first and 204.10 second Mondays of December are reserved for the use of the 204.11 cities. If a city does not certify its hearing dates by 204.12 September 15, the auditor shall assign the initial and 204.13 continuation hearing dates. The dates elected or assigned for 204.14 the initial hearing must not conflict with the initial hearing 204.15 dates of the county, metropolitan special taxing districts, 204.16 regional library districts, or school districts within which the 204.17 city is located. To the extent possible, the dates of the 204.18 city's continuation hearing should not conflict with the 204.19 continuation hearing dates of the county, metropolitan special 204.20 taxing districts, regional library districts, or school 204.21 districts within which the city is located. This paragraph does 204.22 not apply to cities of 500 population or less. 204.23 (k) The county initial hearing date and the city, 204.24 metropolitan special taxing district, regional library district, 204.25 and school district initial hearing dates must be designated on 204.26 the notices required under subdivision 3. The continuation 204.27 hearing dates need not be stated on the notices. 204.28 (l) At a subsequent hearing, each county, school district, 204.29 city over 500 population, and metropolitan special taxing 204.30 district may amend its proposed property tax levy and must adopt 204.31 a final property tax levy. Each county, city over 500 204.32 population, and metropolitan special taxing district may also 204.33 amend its proposed budget and must adopt a final budget at the 204.34 subsequent hearing. The final property tax levy must be adopted 204.35 prior to adopting the final budget. A school district is not 204.36 required to adopt its final budget at the subsequent hearing. 205.1 The subsequent hearing of a taxing authority must be held on a 205.2 date subsequent to the date of the taxing authority's initial 205.3 public hearing. If a continuation hearing is held, the 205.4 subsequent hearing must be held either immediately following the 205.5 continuation hearing or on a date subsequent to the continuation 205.6 hearing. The subsequent hearing may be held at a regularly 205.7 scheduled board or council meeting or at a special meeting 205.8 scheduled for the purposes of the subsequent hearing. The 205.9 subsequent hearing of a taxing authority does not have to be 205.10 coordinated by the county auditor to prevent a conflict with an 205.11 initial hearing, a continuation hearing, or a subsequent hearing 205.12 of any other taxing authority. All subsequent hearings must be 205.13 held prior to five working days after December 20 of the levy 205.14 year. The date, time, and place of the subsequent hearing must 205.15 be announced at the initial public hearing or at the 205.16 continuation hearing. 205.17 (m) The property tax levy certified under section 275.07 by 205.18 a city of any population, county, metropolitan special taxing 205.19 district, regional library district, or school district must not 205.20 exceed the proposed levy determined under subdivision 1, except 205.21 by an amount up to the sum of the following amounts: 205.22 (1) the amount of a school district levy whose voters 205.23 approved a referendum to increase taxes under section 123B.63, 205.24 subdivision 3, or 126C.17, subdivision 9, after the proposed 205.25 levy was certified; 205.26 (2) the amount of a city or county levy approved by the 205.27 voters after the proposed levy was certified; 205.28 (3) the amount of a levy to pay principal and interest on 205.29 bonds approved by the voters under section 475.58 after the 205.30 proposed levy was certified; 205.31 (4) the amount of a levy to pay costs due to a natural 205.32 disaster occurring after the proposed levy was certified, if 205.33 that amount is approved by the commissioner of revenue under 205.34 subdivision 6a; 205.35 (5) the amount of a levy to pay tort judgments against a 205.36 taxing authority that become final after the proposed levy was 206.1 certified, if the amount is approved by the commissioner of 206.2 revenue under subdivision 6a; 206.3 (6) the amount of an increase in levy limits certified to 206.4 the taxing authority by the commissioner of children, families, 206.5 and learning or the commissioner of revenue after the proposed 206.6 levy was certified; and 206.7 (7) the amount required under section 126C.55. 206.8 (n) This subdivision does not apply to towns and special 206.9 taxing districts other than regional library districts and 206.10 metropolitan special taxing districts. 206.11 (o) Notwithstanding the requirements of this section, the 206.12 employer is required to meet and negotiate over employee 206.13 compensation as provided for in chapter 179A. 206.14[EFFECTIVE DATE.] This section is effective for hearings 206.15 required in 2001 for taxes payable in 2002 and thereafter. 206.16 Sec. 37. Minnesota Statutes 2000, section 275.066, is 206.17 amended to read: 206.18 275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 206.19 For the purposes of property taxation and property tax 206.20 state aids, the term "special taxing districts" includes the 206.21 following entities: 206.22 (1) watershed districts under chapter 103D; 206.23 (2) sanitary districts under sections 115.18 to 115.37; 206.24 (3) regional sanitary sewer districts under sections 115.61 206.25 to 115.67; 206.26 (4) regional public library districts under section 206.27 134.201; 206.28 (5) park districts under chapter 398; 206.29 (6) regional railroad authorities under chapter 398A; 206.30 (7) hospital districts under sections 447.31 to 447.38; 206.31 (8) St. Cloud metropolitan transit commission under 206.32 sections 458A.01 to 458A.15; 206.33 (9) Duluth transit authority under sections 458A.21 to 206.34 458A.37; 206.35 (10) regional development commissions under sections 206.36 462.381 to 462.398; 207.1 (11) housing and redevelopment authorities under sections 207.2 469.001 to 469.047; 207.3 (12) port authorities under sections 469.048 to 469.068; 207.4 (13) economic development authorities under sections 207.5 469.090 to 469.1081; 207.6 (14) metropolitan council under sections 473.123 to 207.7 473.549; 207.8 (15) metropolitan airports commission under sections 207.9 473.601 to 473.680; 207.10 (16) metropolitan mosquito control commission under 207.11 sections 473.701 to 473.716; 207.12 (17) Morrison county rural development financing authority 207.13 under Laws 1982, chapter 437, section 1; 207.14 (18) Croft Historical Park District under Laws 1984, 207.15 chapter 502, article 13, section 6; 207.16 (19) East Lake county medical clinic district under Laws 207.17 1989, chapter 211, sections 1 to 6; 207.18 (20) Floodwood area ambulance district under Laws 1993, 207.19 chapter 375, article 5, section 39; 207.20 (21) Middle Mississippi river watershed management 207.21 organization under sections 103B.211 and 103B.241;and207.22 (22) a county levying under the authority of section 207.23 103B.241, 103B.245, or 103B.251; and 207.24 (23) any other political subdivision of the state of 207.25 Minnesota, excluding counties, school districts, cities, and 207.26 towns, that has the power to adopt and certify a property tax 207.27 levy to the county auditor, as determined by the commissioner of 207.28 revenue. 207.29[EFFECTIVE DATE.] This section is effective for taxes 207.30 levied in 2001, payable in 2002, and thereafter. 207.31 Sec. 38. Minnesota Statutes 2000, section 275.07, 207.32 subdivision 1, is amended to read: 207.33 Subdivision 1. [CERTIFICATION OF LEVY.] (a) Except as 207.34 provided under paragraph (b), the taxes voted by cities, 207.35 counties, school districts, and special districts shall be 207.36 certified by the proper authorities to the county auditor on or 208.1 before five working days after December 20 in each year. A town 208.2 must certify the levy adopted by the town board to the county 208.3 auditor by September 15 each year. If the town board modifies 208.4 the levy at a special town meeting after September 15, the town 208.5 board must recertify its levy to the county auditor on or before 208.6 five working days after December 20. The taxes certified shall 208.7 not be reduced by the county auditor by the aid received under 208.8 section 273.1398, subdivision 2, but shall be reduced by the 208.9 county auditor by the aid received under section 273.1398, 208.10 subdivision 3. If a city, town, county, school district, or 208.11 special district fails to certify its levy by that date, its 208.12 levy shall be the amount levied by it for the preceding year. 208.13 (b) The taxes voted by counties under section 103B.251 208.14 shall be separately certified by the county to the county 208.15 auditor on or before five working days after December 20 in each 208.16 year. The taxes certified shall not be reduced by the county 208.17 auditor by the aid received under section 273.1398, subdivision 208.18 2, but shall be reduced by the county auditor by the aid 208.19 received under section 273.1398, subdivision 3. If a county 208.20 fails to certify its levy by that date, its levy shall be the 208.21 amount levied by it for the preceding year. 208.22[EFFECTIVE DATE.] This section is effective for taxes 208.23 levied in 2001, payable in 2002, and thereafter. 208.24 Sec. 39. Minnesota Statutes 2000, section 281.17, is 208.25 amended to read: 208.26 281.17 [PERIOD FOR REDEMPTION.] 208.27 Except for properties for which the period of redemption 208.28 has been limited under sections 281.173 and 281.174, the 208.29 following periods for redemption apply. 208.30 The period of redemption for all lands sold to the state at 208.31 a tax judgment sale shall be three years from the date of sale 208.32 to the state of Minnesota if the land is within an incorporated 208.33 area unless it is: (a) nonagricultural homesteaded land as 208.34 defined in section 273.13, subdivision 22; (b) homesteaded 208.35 agricultural land as defined in section 273.13, subdivision 23, 208.36 paragraph (a); or (c) seasonal recreational land as defined in 209.1 section 273.13, subdivision 22, paragraph (c), or 25, paragraph 209.2(c)(d), clause(5)(1), for which the period of redemption is 209.3 five years from the date of sale to the state of Minnesota. 209.4 The period of redemption for homesteaded lands as defined 209.5 in section 273.13, subdivision 22, located in a targeted 209.6 neighborhood as defined in Laws 1987, chapter 386, article 6, 209.7 section 4, and sold to the state at a tax judgment sale is three 209.8 years from the date of sale. The period of redemption for all 209.9 lands located in a targeted neighborhood as defined in Laws 209.10 1987, chapter 386, article 6, section 4, except (1) homesteaded 209.11 lands as defined in section 273.13, subdivision 22, and (2) for 209.12 periods of redemption beginning after June 30, 1991, but before 209.13 July 1, 1996, lands located in the Loring Park targeted 209.14 neighborhood on which a notice of lis pendens has been served, 209.15 and sold to the state at a tax judgment sale is one year from 209.16 the date of sale. 209.17 The period of redemption for all real property constituting 209.18 a mixed municipal solid waste disposal facility that is a 209.19 qualified facility under section 115B.39, subdivision 1, is one 209.20 year from the date of the sale to the state of Minnesota. 209.21 The period of redemption for all other lands sold to the 209.22 state at a tax judgment sale shall be five years from the date 209.23 of sale, except that the period of redemption for nonhomesteaded 209.24 agricultural land as defined in section 273.13, subdivision 23, 209.25 paragraph (b), shall be two years from the date of sale if at 209.26 that time that property is owned by a person who owns one or 209.27 more parcels of property on which taxes are delinquent, and the 209.28 delinquent taxes are more than 25 percent of the prior year's 209.29 school district levy. 209.30 Sec. 40. Minnesota Statutes 2000, section 282.01, 209.31 subdivision 1, is amended to read: 209.32 Subdivision 1. [CLASSIFICATION AS CONSERVATION OR 209.33 NONCONSERVATION.] It is the general policy of this state to 209.34 encourage the best use of tax-forfeited lands, recognizing that 209.35 some lands in public ownership should be retained and managed 209.36 for public benefits while other lands should be returned to 210.1 private ownership. Parcels of land becoming the property of the 210.2 state in trust under law declaring the forfeiture of lands to 210.3 the state for taxes must be classified by the county board of 210.4 the county in which the parcels lie as conservation or 210.5 nonconservation. In making the classification the board shall 210.6 consider the present use of adjacent lands, the productivity of 210.7 the soil, the character of forest or other growth, accessibility 210.8 of lands to established roads, schools, and other public 210.9 services, their peculiar suitability or desirability for 210.10 particular uses and the suitability of the forest resources on 210.11 the land for multiple use, sustained yield management. The 210.12 classification, furthermore, must encourage and foster a mode of 210.13 land utilization that will facilitate the economical and 210.14 adequate provision of transportation, roads, water supply, 210.15 drainage, sanitation, education, and recreation; facilitate 210.16 reduction of governmental expenditures; conserve and develop the 210.17 natural resources; and foster and develop agriculture and other 210.18 industries in the districts and places best suited to them. 210.19 In making the classification the county board may use 210.20 information made available by any office or department of the 210.21 federal, state, or local governments, or by any other person or 210.22 agency possessing pertinent information at the time the 210.23 classification is made. The lands may be reclassified from time 210.24 to time as the county board considers necessary or desirable, 210.25 except for conservation lands held by the state free from any 210.26 trust in favor of any taxing district. 210.27 If the lands are located within the boundaries of an 210.28 organized town, with taxable valuation in excess of $20,000, or 210.29 incorporated municipality, the classification or 210.30 reclassification and sale must first be approved by the town 210.31 board of the town or the governing body of the municipality in 210.32 which the lands are located. The town board of the town or the 210.33 governing body of the municipality is considered to have 210.34 approved the classification or reclassification and sale if the 210.35 county board is not notified of the disapproval of the 210.36 classification or reclassification and sale within 60 days of 211.1 the date the request for approval was transmitted to the town 211.2 board of the town or governing body of the municipality. If the 211.3 town board or governing body desires to acquire any parcel lying 211.4 in the town or municipality by procedures authorized in this 211.5 section, it must file a written application with the county 211.6 board to withhold the parcel from public sale. The application 211.7 must be filed within 60 days of the request for classification 211.8 or reclassification and sale. The county board shall then 211.9 withhold the parcel from public sale for six months. A 211.10 municipality or governmental subdivision shall pay maintenance 211.11 costs incurred by the county during the six-month period while 211.12 the property is withheld from public sale, provided the property 211.13 is not offered for public sale after the six-month period. A 211.14 clerical error made by county officials does not serve to 211.15 eliminate the request of the town board or governing body if the 211.16 board or governing body has forwarded the application to the 211.17 county auditor. If the town board or governing body of the 211.18 municipality fails to submit an application and a resolution of 211.19 the board or governing body to acquire the property within the 211.20 withholding period, the county may offer the property for sale 211.21 upon the expiration of the withholding period. 211.22 Sec. 41. Minnesota Statutes 2000, section 282.241, is 211.23 amended to read: 211.24 282.241 [REPURCHASE AFTER FORFEITURE.] 211.25 Subdivision 1. [REPURCHASE REQUIREMENTS.] The owner at the 211.26 time of forfeiture, or the owner's heirs, devisees, or 211.27 representatives, or any person to whom the right to pay taxes 211.28 was given by statute, mortgage, or other agreement, may 211.29 repurchase any parcel of land claimed by the state to be 211.30 forfeited to the state for taxes unless before the time 211.31 repurchase is made the parcel is sold under installment 211.32 payments, or otherwise, by the state as provided by law, or is 211.33 under mineral prospecting permit or lease, or proceedings have 211.34 been commenced by the state or any of its political subdivisions 211.35 or by the United States to condemn the parcel of land. The 211.36 parcel of land may be repurchased for the sum of all delinquent 212.1 taxes and assessments computed under section 282.251, together 212.2 with penalties, interest, and costs, that accrued or would have 212.3 accrued if the parcel of land had not forfeited to the state. 212.4 Except for property which was homesteaded on the date of 212.5 forfeiture, repurchase is permitted during one year only from 212.6 the date of forfeiture, and in any case only after the adoption 212.7 of a resolution by the board of county commissioners determining 212.8 that by repurchase undue hardship or injustice resulting from 212.9 the forfeiture will be corrected, or that permitting the 212.10 repurchase will promote the use of the lands that will best 212.11 serve the public interest. If the county board has good cause 212.12 to believe that a repurchase installment payment plan for a 212.13 particular parcel is unnecessary and not in the public interest, 212.14 the county board may require as a condition of repurchase that 212.15 the entire repurchase price be paid at the time of repurchase. 212.16 A repurchase is subject to any easement, lease, or other 212.17 encumbrance granted by the state before the repurchase, and if 212.18 the land is located within a restricted area established by any 212.19 county under Laws 1939, chapter 340, the repurchase must not be 212.20 permitted unless the resolution approving the repurchase is 212.21 adopted by the unanimous vote of the board of county 212.22 commissioners. 212.23 The person seeking to repurchase under this section shall 212.24 pay all maintenance costs incurred by the county auditor during 212.25 the time the property was tax-forfeited. 212.26 Subd. 2. [ALTERNATIVE COMPUTATION OF REPURCHASE AMOUNT.] A 212.27 county board may by resolution establish an alternative method 212.28 of computing the repurchase amount under this subdivision for 212.29 property homesteaded at the time of forfeiture that has been in 212.30 forfeited status for more than ten years. Equivalent taxes, 212.31 penalties, interest, and costs for each year the property was in 212.32 forfeiture status must be computed using the simple average of 212.33 the assessor's estimated market value at forfeiture and the 212.34 assessor's current estimated market value multiplied by the 212.35 class rates under current law and applying the current tax, 212.36 penalty, and interest rates. Those amounts, plus any unpaid 213.1 special assessments reinstated and included in the purchase 213.2 price under section 282.251, including the penalties and 213.3 interest that accrued or would have accrued on the special 213.4 assessments, computed under current rates, are the repurchase 213.5 price. The county assessor shall determine the current market 213.6 value and classification of the property. 213.7 Sec. 42. [383A.76] [TAX-FORFEITED LANDS.] 213.8 Subdivision 1. [SALE; VALUATION.] Notwithstanding any 213.9 other law to the contrary, the Ramsey county board may sell 213.10 tax-forfeited lands in the county to an organized or 213.11 incorporated governmental subdivision of the state for any 213.12 public purpose for which the subdivision is authorized to 213.13 acquire property. Tax-forfeited land in the county may be 213.14 released from the trust in favor of the taxing districts on 213.15 application of a state agency for an authorized use at a value, 213.16 which may be less than its appraised value, as determined by the 213.17 county board. Factors that may be considered by the county 213.18 board in determining value for lands to be held by a 213.19 municipality for a permitted public purpose or redeveloped by an 213.20 authority established under chapter 469 include the projected 213.21 gap financing and public subsidy needed for a redevelopment 213.22 project, expected increases in property taxes, before and after 213.23 redevelopment appraised values, the potential use of the 213.24 property for affordable housing, environmental contamination and 213.25 pollution, site preparation and infrastructure costs, and any 213.26 other relevant factors. The commissioner of revenue may convey 213.27 by deed in the name of the state a tract of tax-forfeited land 213.28 held in trust in favor of the taxing districts to a governmental 213.29 subdivision for an authorized public use, if an application is 213.30 submitted to the commissioner. The application must include a 213.31 statement of facts as to the use to be made of the tract, the 213.32 need for it, and the recommendation of the county board. 213.33 Subd. 2. [USE OF LAND.] For lands located within Ramsey 213.34 county, the deed of conveyance of tax-forfeited land to an 213.35 organized or incorporated governmental subdivision of the state 213.36 for an authorized use must be on a form approved by the attorney 214.1 general and must be conditioned on continued use for the purpose 214.2 stated in the application. If the governing body of the 214.3 governmental subdivision determines by resolution after public 214.4 hearing that some other public use should be made of the lands, 214.5 the changed use may be made upon filing with the county recorder 214.6 or registrar of titles a certified copy of the resolution and 214.7 without conveying the lands back to the state and securing a new 214.8 conveyance for the new public use. Permitted public uses under 214.9 this section for a municipality include street, storm water 214.10 ponding, drainage, parks, watershed, wetlands, library, fire and 214.11 police stations, utility easements, and public facilities. 214.12 Permitted public uses under this section for an authority 214.13 established under chapter 469 include commercial or housing 214.14 redevelopment. A municipality may, upon payment to the county 214.15 of the value of the lands as determined by the county board in 214.16 subdivision 1, convey lands directly to an authority for the use 214.17 of the lands as a commercial or housing redevelopment project. 214.18[EFFECTIVE DATE.] This section is effective only after its 214.19 approval by a majority of the governing body of Ramsey county 214.20 and upon compliance with the provisions of Minnesota Statutes, 214.21 section 645.021, subdivision 3. 214.22 Sec. 43. Minnesota Statutes 2000, section 383B.79, is 214.23 amended by adding a subdivision to read: 214.24 Subd. 5. [FINANCING.] Hennepin county may appropriate 214.25 funds for any of the activities described in subdivision 1, 214.26 whether or not state funds are appropriated for the activity. 214.27 Hennepin county may include any part of the costs of a project 214.28 described in section 469.002, subdivision 12, in a capital 214.29 improvement plan adopted under section 373.40, and may issue 214.30 bonds for such purposes pursuant to and subject to the 214.31 procedures and limitations set forth in section 373.40, whether 214.32 or not the capital improvement to be financed is to be owned by 214.33 the county or any other governmental entity. Such purposes are 214.34 in addition to the capital improvements described in section 214.35 373.40, but shall not include light rail transit, commuter rail, 214.36 or any activity related to either of those, or a sports facility 215.1 building designed or used primarily for professional sports. 215.2 Sec. 44. Minnesota Statutes 2000, section 469.040, 215.3 subdivision 5, is amended to read: 215.4 Subd. 5. [DESIGNATED HOUSING CORPORATION.] Property 215.5 located within the exterior boundaries ofthe White Earthan 215.6 Indian reservation in the state that is owned by the tribe's 215.7 designated housing entity as defined in United States Code, 215.8 title 25, section 4103(21), and that is a housing project or a 215.9 housing development project, as defined in section 469.002, 215.10 subdivisions 13 and 15, is exempt from all real and personal 215.11 property taxes of the city, the county, the state, or any 215.12 political subdivision thereof, but the property is subject to 215.13 subdivision 3. A copy of those portions of the annual reports 215.14 submitted on behalf of the housing entity to the Secretary of 215.15 the United States Department of Housing and Urban Development 215.16 for the project that contain information sufficient to determine 215.17 the amount due under subdivision 3 satisfies the reporting 215.18 requirements of subdivision 3 for the project. 215.19[EFFECTIVE DATE.] This section is effective for taxes 215.20 levied in 2001, payable in 2002, and thereafter. 215.21 Sec. 45. Minnesota Statutes 2000, section 469.202, 215.22 subdivision 2, is amended to read: 215.23 Subd. 2. [ELIGIBILITY REQUIREMENTS FOR TARGETED 215.24 NEIGHBORHOODS.] An area within a city is eligible for 215.25 designation as a targeted neighborhood if the area meets two of 215.26 the following three criteria: 215.27 (a) The area had an unemployment rate that was twice the 215.28 unemployment rate for the Minneapolis and Saint Paul standard 215.29 metropolitan statistical area as determined by the1980most 215.30 recent federal decennial census. 215.31 (b) The median household income in the area was no more 215.32 than half the median household income for the Minneapolis and 215.33 Saint Paul standard metropolitan statistical area as determined 215.34 by the1980most recent federal decennial census. 215.35 (c) The area is characterized by residential dwelling units 215.36 in need of substantial rehabilitation. An area qualifies under 216.1 this paragraph if 25 percent or more of the residential dwelling 216.2 units are in substandard condition as determined by the city, or 216.3 if 70 percent or more of the residential dwelling units in the 216.4 area were built before 1940 as determined by the1980most 216.5 recent federal decennial census. 216.6 Sec. 46. Minnesota Statutes 2000, section 473.625, is 216.7 amended to read: 216.8 473.625 [DETACHING MAJOR AIRPORT LAND FROM CITY, SCHOOL216.9DISTRICT.] 216.10 (a) Lands constituting any major airport or a part thereof 216.11 now and which may hereafter be operated by any public 216.12 corporation organized under sections 473.601 to 473.679, and 216.13 embraced within any cityor school districtorganized under the 216.14 laws of the state, are hereby detached from such cityor school216.15district. 216.16 (b)(i) Except as provided in clause (ii), real and personal 216.17 property, including real and personal property otherwise taxable 216.18 under section 272.01, constituting all or part of an 216.19 intermediate airport operated by a public corporation organized 216.20 under sections 473.601 to 473.679 and embraced within a home 216.21 rule charter or statutory city or school district is exempt from 216.22 taxation by the city or school district. 216.23 (ii) The county assessor of the county where the property 216.24 under this paragraph is located shall determine the total market 216.25 value for all property at that site for assessment year 2001, 216.26 compare it to the market value of the property existing on that 216.27 site for the 1996 assessment, and report those market values to 216.28 the commission. If the total market value has not increased by 216.29 at least 20 percent, the property tax exemption under clause (i) 216.30 shall expire and the property shall be taxable beginning in 216.31 assessment year 2001 and thereafter, for taxes payable in 2002 216.32 and thereafter. The provisions of section 473.629 apply to 216.33 lands exempted from property tax under this paragraph. 216.34 (c) For the purposes of this section, an intermediate 216.35 airport is an airport that as of March 14, 1996, is a primary 216.36 reliever airport, provides general aviation services, has a 217.1 primary runway between 5,001 and 8,000 feet in length, and has 217.2 precision instrument capability. 217.3[EFFECTIVE DATE.] This section is effective for taxes 217.4 payable in 2002 and subsequent years. 217.5 Sec. 47. Laws 1992, chapter 499, article 7, section 31, as 217.6 amended by Laws 1998, chapter 398, article 1, section 39, Laws 217.7 1999, chapter 241, article 1, section 54, and Laws 2000, chapter 217.8 489, article 2, section 28, is amended to read: 217.9 Sec. 31. [REPEALER.] 217.10Minnesota Statutes 1990, sections 124A.02, subdivision 24;217.11124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3;217.12124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota217.13Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and217.1423; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i;217.15124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9;217.16124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision217.171; and 124A.29, subdivision 1, are repealed effective June 30,217.182004;Laws 1991, chapter 265, article 7, section 35, is repealed. 217.19[EFFECTIVE DATE.] This section is effective July 1, 2001. 217.20 Sec. 48. [CITY OF AFTON; EARLY TERMINATION OF AGRICULTURAL 217.21 PRESERVE.] 217.22 Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota 217.23 Statutes, sections 473H.08 and 473H.09, providing for the 217.24 duration and early termination of a metropolitan agricultural 217.25 preserve, the city of Afton may initiate expiration of a parcel 217.26 of land from an agricultural preserve for which the landowner on 217.27 April 18, 2000, has initiated expiration under Minnesota 217.28 Statutes, section 473H.08, subdivision 2, located in the city of 217.29 Afton, Washington county, and described as: 217.30 the Northeast Quarter of the Northeast Quarter of Section 217.31 29, Township 28 North, Range 20 West of the Fourth Principal 217.32 Meridian. 217.33 The effective date of the expiration may be on any date 217.34 after the effective date of this section as determined by the 217.35 Afton city council, once the council has otherwise complied with 217.36 the procedural requirements of Minnesota Statutes, sections 218.1 473H.04 and 473H.08. All benefits accruing to the parcel as an 218.2 agricultural preserve, including benefits relating to the 218.3 valuation and assessment of the parcel for ad valorem property 218.4 taxes under Minnesota Statutes, chapter 273, and section 218.5 473H.10, shall cease on the date of expiration. 218.6 Subd. 2. [ZONING CLASSIFICATION.] If the Afton city 218.7 council elects to exercise the authority provided by subdivision 218.8 1, it must continue the agriculture zoning classification for 218.9 the parcel, adopted by the Afton city council on June 20, 2000, 218.10 until April 18, 2008. 218.11[EFFECTIVE DATE.] This section is effective without local 218.12 approval on the day following final enactment. 218.13 Sec. 49. [ATTACHMENT.] 218.14 The territory comprising the Minneapolis-St. Paul 218.15 International Airport is hereby attached to special school 218.16 district No. 1, Minneapolis. 218.17[EFFECTIVE DATE.] This section is effective for taxes 218.18 payable in 2002 and subsequent years. 218.19 Sec. 50. [AIRPORT IMPACT MITIGATION FUND; ANNUAL 218.20 APPROPRIATION.] 218.21 The commissioner of children, families and learning shall 218.22 annually certify the state revenue impact resulting from (i) the 218.23 application of the statewide general education tax rate to 218.24 airport property under Minnesota Statutes, section 126C.13, 218.25 subdivision 1a, and (ii) other reductions in state education 218.26 aids resulting from the inclusion of airport property in school 218.27 district tax bases under sections 46 and 49. The amount 218.28 certified by the commissioner of children, families and learning 218.29 is annually appropriated from the general fund to the airport 218.30 impact mitigation fund created in article 12, section 39, each 218.31 fiscal year until termination of the fund beginning with fiscal 218.32 year 2003. Each year's appropriation is available until spent. 218.33 Sec. 51. [CHISAGO LAKES JOINT SEWAGE TREATMENT COMMISSION 218.34 BONDING AUTHORITY.] 218.35 Notwithstanding Minnesota Statutes, section 471.59, 218.36 subdivision 11, the Chisago Lakes joint sewage treatment 219.1 commission, a joint powers board established by the county of 219.2 Chisago, and the cities of Lindstrom, Chisago City, and Center 219.3 City, to own and operate wastewater treatment facilities for the 219.4 member local governments, may issue and sell general obligation 219.5 bonds pursuant to Minnesota Statutes, sections 115.46, 444.075, 219.6 and chapter 475, to acquire land for, construct, expand, 219.7 furnish, equip, and modify its wastewater treatment facilities, 219.8 and pledge the full faith and credit and taxing power of the 219.9 governmental units that are members of the joint powers board. 219.10 The joint powers board is a municipality within the meaning of 219.11 Minnesota Statutes, chapter 475. Each government unit that is a 219.12 member of the joint powers board must adopt a resolution 219.13 authorizing the joint powers board to issue and sell the bonds 219.14 before a referendum election on the issue can be held. 219.15[EFFECTIVE DATE.] This section is effective the day after 219.16 final enactment. 219.17 Sec. 52. [LAKES REGION EMS SERVICE CHARGES.] 219.18 Subdivision 1. [AUTHORIZATION.] The Lakes Region emergency 219.19 medical services district may charge and collect through the 219.20 county with county property taxes, an annual service charge of 219.21 $7 per unit for properties in the primary service area within 219.22 Chisago county and $3.50 per unit for properties in the 219.23 secondary service area within Chisago county according to the 219.24 schedule in subdivision 2 for emergency medical services 219.25 authorized as provided in subdivision 3. 219.26 Subd. 2. [EMS FEE SCHEDULE.] 219.27 (a) RESIDENTIAL PROPERTIES UNIT VALUE 219.28 (1) Agricultural with Dwelling 1.0 219.29 (2) Seasonal/Recreational 1.0 219.30 (3) Residential Homestead 1.0 219.31 (4) Residential Non-Homestead 1.0 for up to three 219.32 living units 219.33 1.0 for each additional 219.34 living unit 219.35 thereafter 219.36 (5) Mobile Homes 1.0 220.1 (b) COMMERCIAL PROPERTIES 220.2 (1) Up to $100,000 valuation 1.0 220.3 (2) $100,001 to $150,000 2.0 220.4 (3) $150,001 to $200,000 3.0 220.5 (4) $200,001 to $250,000 4.0 220.6 (5) $250,001 to $300,000 5.0 220.7 (6) $300,001 to $350,000 6.0 220.8 (7) $350,001 to $400,000 7.0 220.9 (8) $400,001 to $450,000 8.0 220.10 (9) $450,001 to $500,000 9.0 220.11 (10) $500,001 to $550,000 10.0 220.12 (11) $550,001 to $600,000 11.0 220.13 (12) Over $600,000 12.0 220.14 Subd. 3. [USE OF FEE PROCEEDS.] The proceeds of fees 220.15 charged and collected under this section must be used to support 220.16 the providing of out-of-hospital emergency medical services 220.17 including, but not limited to, first responder or rescue squads 220.18 recognized by the Lakes Region emergency medical services 220.19 district, ambulance services licensed under Minnesota Statutes, 220.20 chapter 144E, and recognized by the district, medical control 220.21 functions set out in Minnesota Statutes, chapter 144E, and 220.22 communications equipment and systems. 220.23 Subd. 4. [BOARD.] (a) The district is governed by a board 220.24 made up of the members of the governing bodies including town 220.25 boards of local governmental units in Chisago county, as follows: 220.26 (1) three members chosen by all of the cities in a manner 220.27 convenient to them that reflects geographic balance; and 220.28 (2) three members chosen by all of the town boards in a 220.29 manner convenient to them that reflects geographic balance. 220.30 (b) If the members are not selected as provided in 220.31 paragraph (a), clause (1) or (2), by September 1, 2001, the 220.32 county board must make the appointments from the governing 220.33 bodies of cities under paragraph (a), clause (1), or from the 220.34 governing bodies of town boards under paragraph (a), clause (2), 220.35 respectively, and, in either case, reflecting geographic balance. 220.36 (c) A representative from the county board chosen by the 221.1 county board must serve as the chair of the district board. 221.2 (d) All members of the district board serve a three-year 221.3 term. 221.4 (e) A vacancy on the district board must be filled as 221.5 provided for the initial appointment. If the vacancy is not 221.6 filled within 30 days by the initial appointing authority under 221.7 paragraph (a), clause (1) or (2), the county board must make the 221.8 appointment as provided in paragraph (b). 221.9 Subd. 5. [PROCEDURE.] The Chisago county board must charge 221.10 and collect, and disburse the fees authorized in this section in 221.11 the same manner authorized by ordinance for the charging, 221.12 collection, and disbursing of solid waste management fees within 221.13 the county. The county may proceed to collect unpaid fees under 221.14 this section in the same manner and extent, including interest 221.15 charges, as provided by ordinance for collection of unpaid solid 221.16 waste management fees. 221.17 Subd. 6. [ADMINISTRATIVE SHARE.] The county may retain up 221.18 to one percent of the fees collected under this section each 221.19 year for administration of the fee collection and disbursal. 221.20 Subd. 7. [SUNSET.] The fee authorized under this section 221.21 may be imposed in 2001 through 2003 and collected with property 221.22 taxes payable in 2002 through 2004 only. 221.23 Sec. 53. [CONVEYANCE OF TAX-FORFEITED LAND; DAKOTA 221.24 COUNTY.] 221.25 (a) If special school district No. 6 conveys the land 221.26 described in paragraph (c) to the state according to Minnesota 221.27 Statutes, section 282.01, subdivision 1d, then, notwithstanding 221.28 any other provision of Minnesota Statutes, chapter 282, the 221.29 commissioner of revenue shall reconvey the land described in 221.30 paragraph (c) to special school district No. 6 for no 221.31 consideration. 221.32 (b) The conveyance must be in a form approved by the 221.33 attorney general. Notwithstanding Minnesota Statutes, chapter 221.34 282, special school district No. 6 may use or sell the land for 221.35 other than a public use. Notwithstanding Minnesota Statutes, 221.36 chapter 282, the state shall not retain a reversionary interest 222.1 and shall convey the land free of the trust in favor of the 222.2 taxing district. 222.3 (c) The land to be conveyed is in the city of South St. 222.4 Paul, Dakota county, and is described as: 222.5 (1) Lots 4, 5, 6, and 7, Block 1, Lookout Park Addition; 222.6 (2) Lots 25 and 26, Block 1, Lookout Park Addition; 222.7 (3) Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block 222.8 2, Lookout Park Addition; 222.9 (4) Lots 1, 2, 3, 4, and 5, Block 1, Bryants First Addition 222.10 to the city of South St. Paul; and 222.11 (5) Lot 21, Block 1, Bryants First Addition to the city of 222.12 South St. Paul, together with that part of the vacated alley and 222.13 vacated Stanley Place accruing thereto. 222.14[EFFECTIVE DATE.] This section is effective the day 222.15 following final enactment. 222.16 Sec. 54. [RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT IN 222.17 LIEU OF TAXES.] 222.18 (a) The Red River watershed management board may spend 222.19 money from its general fund to compensate counties and townships 222.20 for lost tax revenue from land that becomes tax exempt after it 222.21 is acquired by the board or a member watershed district for 222.22 flood damage reduction project. A member watershed district of 222.23 the Red River management board may spend money from its 222.24 construction fund for the purposes described in this section. 222.25 (b) For the purposes of this section, "Red River watershed 222.26 management board" refers to the board established by Laws 1976, 222.27 chapter 162, section 1, as amended by Laws 1982, chapter 474, 222.28 section 1, Laws 1983, chapter 338, section 1, Laws 1989 First 222.29 Special Session chapter 1, article 5, section 45, Laws 1991, 222.30 chapter 167, section 1, and Laws 1998, chapter 389, article 3, 222.31 section 29. 222.32 Sec. 55. [REPORT ON ASSESSMENT PRACTICES AND MARKET 222.33 VALUES.] 222.34 The department of revenue must report to the legislature 222.35 each year by March 1, the following information on values and 222.36 assessment practices. The information should be provided by 223.1 major types of property on a statewide basis and at the most 223.2 disaggregate jurisdictional level that is useful and 223.3 appropriate. The information must include: 223.4 (1) recent market value trends and, to the extent possible, 223.5 projections of market value trends for up to five years; 223.6 (2) analysis of the effects of the limited market value 223.7 law; 223.8 (3) tax shift implications of market value trends and 223.9 limited market value; 223.10 (4) assessment quality indicators such as sales ratios and 223.11 coefficients of dispersion; 223.12 (5) to the extent possible, consideration should be given 223.13 to quality factors such as: 223.14 (i) number of sales; 223.15 (ii) time period; 223.16 (iii) geographical area; and 223.17 (iv) other; 223.18 (6) summary of state board orders; and 223.19 (7) percentage of parcels that change in value per year. 223.20 Sec. 56. [STUDY OF RELATIONSHIP BETWEEN ELECTRIC UTILITY 223.21 PERSONAL PROPERTY TAX EXEMPTION AND ENVIRONMENTAL IMPROVEMENTS.] 223.22 The department of revenue and the public utilities 223.23 commission shall jointly study the relationship between the 223.24 granting of a property tax exemption to electric utility 223.25 generating personal property and electric utilities' ability to 223.26 use state-of-the-art equipment and practices that would enhance 223.27 air quality and implement a program of placing powerlines 223.28 located near major rivers underground in order to facilitate 223.29 redevelopment and accommodate changing land use patterns. In 223.30 conducting the study, the department and the commission must 223.31 seek input from local governments, environmental stakeholders, 223.32 and users of major rivers, including those who use the river for 223.33 recreational and agricultural purposes. The results of the 223.34 study must be presented by January 15, 2002, in a report to the 223.35 committees of the legislature that have jurisdiction over taxes 223.36 and utility issues. 224.1 Sec. 57. [WYOMING TOWNSHIP; CITY OF CHISAGO CITY; 224.2 MUNICIPAL REIMBURSEMENT.] 224.3 Notwithstanding the limitation on duration or equality of 224.4 payment imposed under Minnesota Statutes, section 414.036, the 224.5 city of Chisago City may provide reimbursement for orderly 224.6 annexed property to the town of Wyoming for a period and in such 224.7 amounts agreed to by the city and the town under a joint powers 224.8 agreement entered into for the purposes of establishing a joint 224.9 commercial and business park in the annexed area as described in 224.10 section 2. 224.11[EFFECTIVE DATE.] This section is effective July 1, 2002. 224.12 Sec. 58. [FORGIVENESS OF PENALTY AND INTEREST.] 224.13 If the owner of record of property located in St. Louis 224.14 county that has parcel number 060-0030-03840 enters into an 224.15 agreement with the county by May 31, 2001, to make installment 224.16 payments over a ten-year period of the amount of taxes and 224.17 special assessments due on the property for the 1997 payable 224.18 year and the owner makes the payments required under the 224.19 agreement when due, the amount of penalties, interest, and 224.20 related fees due as of May 31, 2001, with respect to the 224.21 delinquent taxes will not be required to be paid. 224.22 Sec. 59. [RENEWAL OF RULEMAKING AUTHORITY.] 224.23 Notwithstanding Minnesota Statutes, section 14.125, the 224.24 Minnesota housing finance agency may adopt administrative rules 224.25 under Minnesota Statutes, chapter 14, to carry out the 224.26 provisions of Minnesota Statutes, section 462A.071, and 224.27 determinations made under Minnesota Statutes, section 462A.071, 224.28 subdivision 11, paragraph (b), are valid until January 1, 2003. 224.29[EFFECTIVE DATE.] This section is effective the day 224.30 following final enactment. 224.31 Sec. 60. [REPEALER.] 224.32 (a) Minnesota Statutes 2000, sections 126C.30; 126C.31; 224.33 126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed. 224.34[EFFECTIVE DATE.] This paragraph is effective July 1, 2001. 224.35 (b) Minnesota Statutes 2000, sections 272.02, subdivision 224.36 22, and 273.37, subdivision 3, are repealed. 225.1[EFFECTIVE DATE.] This paragraph is effective for the 2001 225.2 assessment for taxes payable in 2002 and thereafter. 225.3 (c) Minnesota Statutes 2000, sections 270.31; 270.32; 225.4 270.33; 270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are 225.5 repealed. 225.6[EFFECTIVE DATE.] This paragraph is effective for taxes 225.7 levied in 2002, payable in 2003, and thereafter. 225.8 (d) Minnesota Statutes 2000, section 373.40, subdivision 7, 225.9 is repealed. 225.10 ARTICLE 9 225.11 PROPERTY TAX REFUND 225.12 Section 1. Minnesota Statutes 2000, section 290A.03, 225.13 subdivision 11, is amended to read: 225.14 Subd. 11. [RENT CONSTITUTING PROPERTY TAXES.] "Rent 225.15 constituting property taxes" means19the percent of the gross 225.16 rent, as provided under section 290A.046, actually paid in cash, 225.17 or its equivalent, or the portion of rent paid in lieu of 225.18 property taxes, in any calendar year by a claimant for the right 225.19 of occupancy of the claimant's Minnesota homestead in the 225.20 calendar year, and which rent constitutes the basis, in the 225.21 succeeding calendar year of a claim for relief under this 225.22 chapter by the claimant. 225.23 Sec. 2. Minnesota Statutes 2000, section 290A.03, 225.24 subdivision 13, is amended to read: 225.25 Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes 225.26 payable" means the property tax exclusive of special 225.27 assessments, penalties, and interest payable on a claimant's 225.28 homestead after deductions made under sections 273.135, 225.29 273.1382, 273.1391, 273.42, subdivision 2, and any other state 225.30 paid property tax credits in any calendar year. In the case of 225.31 a claimant who makes ground lease payments, "property taxes 225.32 payable" includes the amount of the payments directly 225.33 attributable to the property taxes assessed against the parcel 225.34 on which the house is located. No apportionment or reduction of 225.35 the "property taxes payable" shall be required for the use of a 225.36 portion of the claimant's homestead for a business purpose if 226.1 the claimant does not deduct any business depreciation expenses 226.2 for the use of a portion of the homestead in the determination 226.3 of federal adjusted gross income. For homesteads which are 226.4 manufactured homes as defined in section 273.125, subdivision 8, 226.5 and for homesteads which are park trailers taxed as manufactured 226.6 homes under section 168.012, subdivision 9, "property taxes 226.7 payable" shall also include19 percentthe percentage applicable 226.8 under subdivision 11 of the gross rent paid in the preceding 226.9 year for the site on which the homestead is located. When a 226.10 homestead is owned by two or more persons as joint tenants or 226.11 tenants in common, such tenants shall determine between them 226.12 which tenant may claim the property taxes payable on the 226.13 homestead. If they are unable to agree, the matter shall be 226.14 referred to the commissioner of revenue whose decision shall be 226.15 final. Property taxes are considered payable in the year 226.16 prescribed by law for payment of the taxes. 226.17 In the case of a claim relating to "property taxes 226.18 payable," the claimant must have owned and occupied the 226.19 homestead on January 2 of the year in which the tax is payable 226.20 and (i) the property must have been classified as homestead 226.21 property pursuant to section 273.124, on or before December 15 226.22 of the assessment year to which the "property taxes payable" 226.23 relate; or (ii) the claimant must provide documentation from the 226.24 local assessor that application for homestead classification has 226.25 been made on or before December 15 of the year in which the 226.26 "property taxes payable" were payable and that the assessor has 226.27 approved the application. 226.28[EFFECTIVE DATE.] This section is effective beginning with 226.29 refunds based on rent paid in calendar year 2001. 226.30 Sec. 3. Minnesota Statutes 2000, section 290A.04, 226.31 subdivision 2, is amended to read: 226.32 Subd. 2. [HOMEOWNERS.] A claimant whose property taxes 226.33 payable are in excess of the percentage of the household income 226.34 stated below shall pay an amount equal to the percent of income 226.35 shown for the appropriate household income level along with the 226.36 percent to be paid by the claimant of the remaining amount of 227.1 property taxes payable. The state refund equals the amount of 227.2 property taxes payable that remain, up to the state refund 227.3 amount shown below. 227.4 Percent Percent Maximum 227.5 Household Income of Income Paid by State 227.6 Claimant Refund 227.7 $0 to 1,029 1.2 percent 18 percent$440$800 227.8 1,030 to 2,059 1.3 percent 18 percent$440$800 227.9 2,060 to 3,099 1.4 percent 20 percent$440$800 227.10 3,100 to 4,129 1.6 percent 20 percent$440$800 227.11 4,130 to 5,159 1.7 percent 20 percent$440$800 227.12 5,160 to 7,229 1.9 percent 25 percent$440$800 227.13 7,230 to 8,259 2.1 percent 25 percent$440$800 227.14 8,260 to 9,289 2.2 percent 25 percent$440$800 227.15 9,290 to 10,319 2.3 percent 30 percent$440$800 227.16 10,320 to 11,349 2.4 percent 30 percent$440$800 227.17 11,350 to 12,389 2.5 percent 30 percent$440$800 227.18 12,390 to 14,449 2.6 percent 30 percent$440$800 227.19 14,450 to 15,479 2.8 percent 35 percent$440$800 227.20 15,480 to 16,509 3.0 percent 35 percent$440$800 227.21 16,510 to 17,549 3.2 percent 40 percent$440$800 227.22 17,550 to 21,669 3.3 percent 40 percent$440$800 227.23 21,670 to 24,769 3.4 percent 45 percent$440$800 227.24 24,770 to 30,959 3.5 percent 45 percent$440$720 227.25 30,960 to 36,119 3.5 percent 45 percent$440$640 227.26 36,120 to 41,279 3.7 percent 50 percent$440$553 227.27 41,280 to 58,829 4.0 percent 50 percent$440$480 227.28 58,830 to 59,859 4.0 percent 50 percent$310$400 227.29 59,860 to 60,889 4.0 percent 50 percent$210$240 227.30 60,890 to 61,929 4.0 percent 50 percent$100$80 227.31 The payment made to a claimant shall be the amount of the 227.32 state refund calculated under this subdivision. No payment is 227.33 allowed if the claimant's household income is $61,930 or more. 227.34[EFFECTIVE DATE.] This section is effective for claims 227.35 based on property taxes payable in 2002 and thereafter. 227.36 Sec. 4. [290A.046] [RENT CONSTITUTING PROPERTY TAXES.] 227.37 (a)(1) For claims based on rent paid in calendar years 2001 227.38 and 2002, the percentage of rent constituting property taxes is 227.39 20 percent. 227.40 (2) For claims based on rent paid in calendar year 2003 and 227.41 later calendar years, the percentage is the greater of (i) the 227.42 percentage determined under paragraph (c), rounded to the 227.43 nearest whole percent or (ii) 20 percent. 227.44 (b)(1) By September 30, 2002, the commissioner shall 227.45 estimate the average percentage that property taxes consist of 227.46 rent paid for occupancy of residential properties in Minnesota 227.47 for taxes and rents payable in the immediately preceding 227.48 calendar year and make the estimate available to the public. In 227.49 preparing the estimate, the commissioner shall separately 228.1 estimate the percentage for, at least, the metropolitan area, as 228.2 defined in section 473.121, and the rest of the state and 228.3 provide this information to the chairs of the committees of the 228.4 house and senate with jurisdiction over taxes and tax laws. This 228.5 percentage must be used in making the determination under 228.6 paragraph (c) for refunds based on rent paid in calendar years 228.7 2003 through 2008. 228.8 (2) Beginning in 2008 and each year after 2008 that is 228.9 evenly divisible by four, the commissioner shall estimate the 228.10 average percentage that property taxes consist of rent paid for 228.11 occupancy of residential properties in Minnesota for taxes and 228.12 rents payable in the immediately preceding calendar year. The 228.13 commissioner shall make the estimate available to the public by 228.14 September 30 of the year in which it was prepared. This 228.15 estimate must be used in making the determination under 228.16 paragraph (c) for refunds based on rent paid in the four 228.17 calendar years immediately following the year in which the 228.18 estimate is published. 228.19 (c) For claims based on rent paid in calendar year 2003 and 228.20 later years, the percentage of rent constituting property taxes 228.21 is the greater of: 228.22 (1) the percentage estimate determined under paragraph (b); 228.23 or 228.24 (2) the percentage used in the immediately previous year 228.25 minus the greater of (i) one-third of the difference between the 228.26 percentage determined under paragraph (b) and the percentage 228.27 used in the year the estimate was prepared or (ii) one 228.28 percentage point. 228.29 (d) In preparing the estimates under this section, the 228.30 commissioner may use surveys of landlords, information obtained 228.31 from assessors, or any other information that the commissioner 228.32 considers appropriate. The estimates are not subject to chapter 228.33 14. 228.34[EFFECTIVE DATE.] This section is effective beginning with 228.35 refunds based on rent paid in calendar year 2001. 228.36 Sec. 5. [REPEALER.] 229.1 Minnesota Statutes 2000, section 290A.04, subdivision 2j, 229.2 is repealed. 229.3 ARTICLE 10 229.4 LOCAL GOVERNMENT AID; PAYMENTS IN LIEU OF TAXES 229.5 Section 1. Minnesota Statutes 2000, section 273.1398, is 229.6 amended by adding a subdivision to read: 229.7 Subd. 4b. [AID ADJUSTMENT FOR 2002 CITY LOCAL GOVERNMENT 229.8 AID CHANGES.] Payments to a city under subdivision 2 or section 229.9 273.166 for calendar year 2002 are equal to (1) payments under 229.10 those sections in calendar year 2001 minus (2) the difference 229.11 between the amount the city is certified to receive in aid under 229.12 sections 477A.011 to 477A.014 in calendar year 2002 and what the 229.13 city would have received in calendar year 2002 under the formula 229.14 in Minnesota Statutes 2000, sections 477A.011 to 477A.014. The 229.15 amount of HACA remaining after the offset may not be less than 229.16 zero. 229.17[EFFECTIVE DATE.] This section is effective for aids 229.18 payable in calendar year 2002. 229.19 Sec. 2. Minnesota Statutes 2000, section 273.1398, is 229.20 amended by adding a subdivision to read: 229.21 Subd. 4c. [ADJUSTMENT FOR LOW-INCOME HOUSING 229.22 AID.] Payments to a city under subdivision 2 or section 273.166 229.23 for calendar year 2004 are permanently increased by the amount 229.24 certified to be paid to it in 2003 under section 477A.06. 229.25[EFFECTIVE DATE.] This section is effective for aids 229.26 payable in calendar year 2004. 229.27 Sec. 3. Minnesota Statutes 2000, section 273.1398, is 229.28 amended by adding a subdivision to read: 229.29 Subd. 4d. [ADJUSTMENT FOR SELECTED CITIES.] Payments to a 229.30 city under subdivision 2 or section 273.166 shall be decreased 229.31 by $450,000 in calendar year 2009 if the city had an increased 229.32 city aid base for local government aid purposes in 2001 under 229.33 section 477A.011, subdivision 36, paragraph (f). 229.34 Sec. 4. Minnesota Statutes 2000, section 477A.011, 229.35 subdivision 27, is amended to read: 229.36 Subd. 27. [REVENUE BASE.] "Revenue base" means the amount 230.1 levied for taxes payable in the previous year, including the 230.2 levy on the fiscal disparity distribution under section 276A.06, 230.3 subdivision 3, paragraph (a), or 473F.08, subdivision 3, 230.4 paragraph (a), and before reduction forthe homestead and230.5agricultural credit aid under section 273.1398, subdivision 2,230.6equalization aid under section 477A.013, subdivision 5, and230.7 disparity reduction aid under section 273.1398, subdivision 3; 230.8 plus the originally certified local government aid in the 230.9 previous year under sections 477A.011 and 477A.013; the 230.10 homestead and agricultural credit aid in the previous year under 230.11 section 273.1398, subdivision 2; and the taconite aids received 230.12 in the previous year under sections 298.28 and 298.282. 230.13[EFFECTIVE DATE.] This section is effective for aids 230.14 payable in calendar year 2002 and thereafter. 230.15 Sec. 5. Minnesota Statutes 2000, section 477A.011, is 230.16 amended by adding a subdivision to read: 230.17 Subd. 27a. [REVENUE BASE PER CAPITA.] "Revenue base per 230.18 capita" means a city's revenue base divided by the city's 230.19 population for two calendar years prior to the payable year of 230.20 the aids and levies used in calculating the revenue base. 230.21[EFFECTIVE DATE.] This section is effective for aids 230.22 payable in calendar year 2002 and thereafter. 230.23 Sec. 6. Minnesota Statutes 2000, section 477A.011, is 230.24 amending by adding a subdivision to read: 230.25 Subd. 27b. [AVERAGE SMALL CITY PER CAPITA REVENUE 230.26 BASE.] "Average small city per capita revenue base" means the 230.27 sum of the revenue base per capita for all cities with a 230.28 population of less than 2,500 divided by the number of cities 230.29 with a population less than 2,500. 230.30[EFFECTIVE DATE.] This section is effective for aids 230.31 payable in calendar year 2002 and thereafter. 230.32 Sec. 7. Minnesota Statutes 2000, section 477A.011, 230.33 subdivision 34, is amended to read: 230.34 Subd. 34. [PER CAPITA CITY REVENUE NEED.] (a) For a city 230.35 with a population equal to or greater than 2,500, "per capita 230.36 city revenue need" is the sum of (1)3.4623125.57535 times the 231.1 pre-1940 housing percentage; plus (2)2.0938262.72775 times the 231.2 commercial industrial percentage; plus (3)6.86255216.44686 231.3 times the population decline percentage; plus (4).00026 times231.4the city population; plus (5) 152.0141189.103. 231.5 (b) For a city with a population less than 2,500,"city231.6revenue need" is the sum of (1) 1.795919 times the pre-1940231.7housing percentage; plus (2) 1.562138 times the commercial231.8industrial percentage; plus (3) 4.177568 times the population231.9decline percentage; plus (4) 1.04013 times the transformed231.10population; minus (5) 107.475"per capita city revenue need" is 231.11 equal to the lesser of (1) the sum of the city's revenue base 231.12 per capita for the four most recently available calendar years 231.13 divided by four, or (2) the average small city per capita 231.14 revenue base plus two-thirds of the amount of that city's 231.15 average revenue base per capita for the last four years that 231.16 exceeds the average small city per capita revenue base. 231.17(c) The city revenue need cannot be less than zero.231.18(d) For calendar year 1998 and subsequent years, the city231.19revenue need for a city, as determined in paragraphs (a) to (c),231.20is multiplied by the ratio of the annual implicit price deflator231.21for government consumption expenditures and gross investment for231.22state and local governments as prepared by the United States231.23Department of Commerce, for the most recently available year to231.24the 1993 implicit price deflator for state and local government231.25purchases.231.26[EFFECTIVE DATE.] This section is effective for aids 231.27 payable in calendar year 2002 and thereafter. 231.28 Sec. 8. Minnesota Statutes 2000, section 477A.013, 231.29 subdivision 8, is amended to read: 231.30 Subd. 8. [CITY FORMULA AID.] In calendar year19942002 231.31 and subsequent years, the formula aid for a city is equal to the 231.32 need increase percentage multiplied by the difference between 231.33 (1) the per capita city's revenue need multiplied by its 231.34 population, and (2) 25 percent of the city's net tax capacity 231.35multiplied by the tax effort rate. No city may have a formula 231.36 aid amount less thanzero$25 per capita. The need increase 232.1 percentage must be the same for all cities. 232.2Notwithstanding the prior sentence, in 1995 only, the need232.3increase percentage for a city shall be twice the need increase232.4percentage applicable to other cities if:232.5(1) the city, in 1992 or 1993, transferred an amount from232.6governmental funds to their sewer and water fund, and232.7(2) the amount transferred exceeded their net levy for232.8taxes payable in the year in which the transfer occurred.232.9 The applicable need increase percentage or percentages must 232.10 be calculated by the department of revenue so that the total of 232.11 the aid under subdivision 9 equals the total amount available 232.12 for aid under section 477A.03. 232.13[EFFECTIVE DATE.] This section is effective for aids 232.14 payable in calendar year 2002 and thereafter. 232.15 Sec. 9. Minnesota Statutes 2000, section 477A.013, 232.16 subdivision 9, is amended to read: 232.17 Subd. 9. [CITY AID DISTRIBUTION.](a)In calendar year 232.181994 and thereafter, each city shall receive an aid distribution232.19equal to the sum of (1) the city formula aid under subdivision232.208, and (2) its city aid base2002 and thereafter, each city 232.21 shall receive an aid distribution equal to its formula aid under 232.22 subdivision 8. 232.23(b) The percentage increase for a first class city in232.24calendar year 1995 and thereafter shall not exceed the232.25percentage increase in the sum of the aid to all cities under232.26this section in the current calendar year compared to the sum of232.27the aid to all cities in the previous year.232.28(c) The total aid for any city, except a first class city,232.29shall not exceed the sum of (1) ten percent of the city's net232.30levy for the year prior to the aid distribution plus (2) its232.31total aid in the previous year before any increases or decreases232.32under sections 16A.711, subdivision 5, and 477A.0132.232.33(d) Notwithstanding paragraph (c), in 1995 only, for cities232.34which in 1992 or 1993 transferred an amount from governmental232.35funds to their sewer and water fund in an amount greater than232.36their net levy for taxes payable in the year in which the233.1transfer occurred, the total aid shall not exceed the sum of (1)233.220 percent of the city's net levy for the year prior to the aid233.3distribution plus (2) its total aid in the previous year before233.4any increases or decreases under sections 16A.711, subdivision233.55, and 477A.0132. 233.6[EFFECTIVE DATE.] This section is effective for aids 233.7 payable in calendar year 2002 and thereafter. 233.8 Sec. 10. Minnesota Statutes 2000, section 477A.03, 233.9 subdivision 2, is amended to read: 233.10 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 233.11 discharge the duties imposed by sections 477A.011 to 477A.014 is 233.12 annually appropriated from the general fund to the commissioner 233.13 of revenue. 233.14 (b) Aid payments to counties under section 477A.0121 are 233.15 limited to $20,265,000 in 1996. Aid payments to counties under 233.16 section 477A.0121 are limited to $27,571,625 in 1997. For aid 233.17 payable in 1998 and thereafter, the total aids paid under 233.18 section 477A.0121 are the amounts certified to be paid in the 233.19 previous year, adjusted for inflation as provided under 233.20 subdivision 3. 233.21 (c)(i) For aids payable in 1998 and thereafter, the total 233.22 aids paid to counties under section 477A.0122 are the amounts 233.23 certified to be paid in the previous year, adjusted for 233.24 inflation as provided under subdivision 3. 233.25 (ii) Aid payments to counties under section 477A.0122 in 233.26 2000 are further increased by an additional $20,000,000 in 2000. 233.27 (d) Aid payments to cities in 1999 under section 477A.013, 233.28 subdivision 9, are limited to $380,565,489. For aids payable in 233.29 2000, the total aids paid under section 477A.013, subdivision 9, 233.30 are the amounts certified to be paid in the previous year, 233.31 adjusted for inflation as provided in subdivision 3, and 233.32 increased by the amount necessary to effectuate Laws 1999, 233.33 chapter 243, article 5, section 48, paragraph (b). For aids 233.34 payable in 2001through 2003, the total aids paid under section 233.35 477A.013, subdivision 9, are the amounts certified to be paid in 233.36 the previous year, adjustedfor inflationas provided under 234.1 subdivision 3. For aids payable in20042002, the total aids 234.2 paid under section 477A.013, subdivision 9, arethe amounts234.3certified to be paid in the previous year, adjusted for234.4inflation as provided under subdivision 3, and increased by the234.5amount certified to be paid in 2003 under section234.6477A.06limited to $590,000,000. For aids payable in20052003 234.7 and thereafter, the total aids paid under section 477A.013, 234.8 subdivision 9, are the amounts certified to be paid in the 234.9 previous year, adjusted for inflation as provided under 234.10 subdivision 3 and by the household adjustment factor for all 234.11 cities in the state as defined in section 273.1398.The234.12additional amount authorized under subdivision 4 is not included234.13when calculating the appropriation limits under this paragraph.234.14[EFFECTIVE DATE.] This section is effective for aids 234.15 payable in calendar year 2002 and thereafter. 234.16 Sec. 11. Minnesota Statutes 2000, section 477A.11, 234.17 subdivision 3, is amended to read: 234.18 Subd. 3. [ACQUIRED NATURAL RESOURCES LAND.] "Acquired 234.19 natural resources land" means: 234.20 (1) any land presently administered by the commissioner in 234.21 which the state acquired by purchase, condemnation, or gift, a 234.22 fee title interest in lands which were previously privately 234.23 owned;and234.24 (2) lands acquired by the state under chapter 84A that are 234.25 designated as state parks, state recreation areas, scientific 234.26 and natural areas, or wildlife management areas; and 234.27 (3) land leased or acquired by the state from the United 234.28 States of America through the United States Secretary of 234.29 Agriculture pursuant to Title III of the Bankhead Jones Farm 234.30 Tenant Act, which land is commonly referred to as land 234.31 utilization project land that is administered by the 234.32 commissioner. 234.33[EFFECTIVE DATE.] This section is effective for payments 234.34 made in 2002 and thereafter. 234.35 Sec. 12. Minnesota Statutes 2000, section 477A.11, 234.36 subdivision 4, is amended to read: 235.1 Subd. 4. [OTHER NATURAL RESOURCES LAND.] "Other natural 235.2 resources land" means: (1)any other land presently owned in 235.3 fee title by the state and administered by the commissioner, or 235.4 any tax-forfeited land, other than platted lots within a city or 235.5 those lands described under subdivision 3, clause (2), which is 235.6 owned by the state and administered by the commissioner or by 235.7 the county in which it is located; and (2) land leased by the235.8state from the United States of America through the United235.9States Secretary of Agriculture pursuant to Title III of the235.10Bankhead Jones Farm Tenant Act, which land is commonly referred235.11to as land utilization project land that is administered by the235.12commissioner. 235.13[EFFECTIVE DATE.] This section is effective for payments 235.14 made in 2002 and thereafter. 235.15 Sec. 13. Minnesota Statutes 2000, section 477A.12, is 235.16 amended to read: 235.17 477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; 235.18 CERTIFICATION OF ACREAGE.] 235.19 Subdivision 1. [TYPES OF LAND; PAYMENTS.] (a) As an offset 235.20 for expenses incurred by counties and towns in support of 235.21 natural resources lands, the following amounts are annually 235.22 appropriated to the commissioner of natural resources from the 235.23 general fund for transfer to the commissioner of revenue. The 235.24 commissioner of revenue shall pay the transferred funds to 235.25 counties as required by sections 477A.11 to 477A.145. The 235.26 amounts are: 235.27 (1) for acquired natural resources land, $3, as adjusted 235.28 for inflation under section 477A.145, multiplied by the total 235.29 number of acres of acquired natural resources land or, at the 235.30 county's option three-fourths of one percent of the appraised 235.31 value of all acquired natural resources land in the county, 235.32 whichever is greater; 235.33 (2) 75 cents, as adjusted for inflation under section 235.34 477A.145, multiplied by the number of acres of 235.35 county-administered other natural resources land; and 235.36 (3) 37.5 cents, as adjusted for inflation under section 236.1 477A.145, multiplied by the number of acres of 236.2 commissioner-administered other natural resources land located 236.3 in each county as of July 1 of each year prior to the payment 236.4 year. 236.5 (b) The amount determined under paragraph (a), clause (1), 236.6 is payable for land that is acquired from a private owner by the 236.7 department of transportation for the purpose of replacing 236.8 wetland losses caused by transportation projects, but only if 236.9 the county contains more than 500 acres of such land at the time 236.10 the certification is made under subdivision 2. 236.11 Subd. 2. [PROCEDURE.] Lands for which payments in lieu are 236.12 made pursuant to section 97A.061, subdivision 3, and Laws 1973, 236.13 chapter 567, shall not be eligible for payments under this 236.14 section. Each county auditor shall certify to the department of 236.15 natural resources during July of each year prior to the payment 236.16 year the number of acres of county-administered other natural 236.17 resources land within the county. The department of natural 236.18 resources may, in addition to the certification of acreage, 236.19 require descriptive lists of land so certified. The 236.20 commissioner of natural resources shall determine and certify to 236.21 the commissioner of revenue by March 1 of the payment year: 236.22 (1) the number of acres and most recent appraised value of 236.23 acquired natural resources land within each county; 236.24 (2) the number of acres of commissioner-administered 236.25 natural resources land within each county; and 236.26 (3) the number of acres of county-administered other 236.27 natural resources land within each county, based on the reports 236.28 filed by each county auditor with the commissioner of natural 236.29 resources. 236.30 The commissioner of transportation shall determine and 236.31 certify to the commissioner of revenue by March 1 of the payment 236.32 year the number of acres of land described in subdivision 1, 236.33 paragraph (b), but only if it exceeds 500 acres. 236.34 The commissioner of revenue shall determine the 236.35 distributions provided for in this section using the number of 236.36 acres and appraised values certified by the commissioner of 237.1 natural resources and the commissioner of transportation by 237.2 March 1 of the payment year. 237.3(c)Subd 3. [DETERMINATION OF APPRAISED VALUE.] For the 237.4 purposes of this section, the appraised value of acquired 237.5 natural resources land is the purchase price for the first five 237.6 years after acquisition. The appraised value of acquired 237.7 natural resources land received as a donation is the value 237.8 determined for the commissioner of natural resources by a 237.9 licensed appraiser, or the county assessor's estimated market 237.10 value if no appraisal is done. The appraised value must be 237.11 determined by the county assessor every five years after the 237.12 land is acquired. 237.13[EFFECTIVE DATE.] This section is effective for payments in 237.14 2002 and thereafter. 237.15 Sec. 14. Minnesota Statutes 2000, section 477A.14, is 237.16 amended to read: 237.17 477A.14 [USE OF FUNDS.] 237.18 Subdivision 1. [GENERAL DISTRIBUTION.] Except as provided 237.19 in section 97A.061, subdivision 5, or in subdivision 2, 40 237.20 percent of the total payment to the county shall be deposited in 237.21 the county general revenue fund to be used to provide property 237.22 tax levy reduction. The remainder shall be distributed by the 237.23 county in the following priority: 237.24 (a) 37.5 cents, as adjusted for inflation under section 237.25 477A.145, for each acre of county-administered other natural 237.26 resources land shall be deposited in a resource development fund 237.27 to be created within the county treasury for use in resource 237.28 development, forest management, game and fish habitat 237.29 improvement, and recreational development and maintenance of 237.30 county-administered other natural resources land. Any county 237.31 receiving less than $5,000 annually for the resource development 237.32 fund may elect to deposit that amount in the county general 237.33 revenue fund; 237.34 (b) From the funds remaining, within 30 days of receipt of 237.35 the payment to the county, the county treasurer shall pay each 237.36 organized township 30 cents, as adjusted for inflation under 238.1 section 477A.145, for each acre of acquired natural resources 238.2 land and each acre of land described in section 477A.12, 238.3 subdivision 1, paragraph (b), and 7.5 cents, as adjusted for 238.4 inflation under section 477A.145, for each acre of other natural 238.5 resources land located within its boundaries. Payments for 238.6 natural resources lands not located in an organized township 238.7 shall be deposited in the county general revenue fund. Payments 238.8 to counties and townships pursuant to this paragraph shall be 238.9 used to provide property tax levy reduction, except that of the 238.10 payments for natural resources lands not located in an organized 238.11 township, the county may allocate the amount determined to be 238.12 necessary for maintenance of roads in unorganized townships. 238.13 Provided that, if the total payment to the county pursuant to 238.14 section 477A.12 is not sufficient to fully fund the distribution 238.15 provided for in this clause, the amount available shall be 238.16 distributed to each township and the county general revenue fund 238.17 on a pro rata basis; and 238.18 (c) Any remaining funds shall be deposited in the county 238.19 general revenue fund. Provided that, if the distribution to the 238.20 county general revenue fund exceeds $35,000, the excess shall be 238.21 used to provide property tax levy reduction. 238.22 Subd. 2. [DISTRIBUTION FOR CONSOLIDATED CONSERVATION 238.23 LANDS.] In the case of payments for consolidated conservation 238.24 land, 15 percent of the amount paid on account of that land 238.25 under section 477A.12, must be distributed to the county for use 238.26 as provided in section 84A.51, subdivision 4, clause (1). The 238.27 remainder of the payment under section 477A.12 will be 238.28 distributed in proportion to the distributions described in 238.29 subdivision 1. 238.30[EFFECTIVE DATE.] This section is effective for payments 238.31 made in 2002 and thereafter. 238.32 Sec. 15. Minnesota Statutes 2000, section 477A.145, is 238.33 amended to read: 238.34 477A.145 [INFLATION ADJUSTMENT.] 238.35 In20012002 and each year thereafter, the amounts required 238.36 to be adjusted for inflation in sections 477A.12 and 477A.14 239.1 shall be increased to an amount equal to: (1) the amount before 239.2 the inflation adjustment multiplied by (2) one plus the 239.3 percentage increase in the implicit price deflator for 239.4 government consumption expenditures and gross investment for 239.5 state and local governments prepared by the Bureau of Economic 239.6 Analysis of the United States Department of Commerce for the 239.7 periodindicated below: (i) the periodstarting with the first 239.8 quarter of19941980 and ending with the third quarter of the 239.9 calendar year prior to the year in which aid is paid, provided239.10that lands acquired by the state under chapter 84A that are239.11designated as state parks, state recreation areas, scientific239.12and natural areas, or wildlife management areas are included in239.13the definition of acquired natural resource land under section239.14477A.11 for calculating payments in calendar year 2001 and239.15thereafter; (ii) otherwise the period starting with the first239.16quarter of 1987 and ending with the third quarter of the239.17calendar year prior to the year in which the aid is paid. 239.18 These adjusted amounts must be rounded to the nearest one-tenth 239.19 of a cent. 239.20[EFFECTIVE DATE.] This section is effective for payments 239.21 made in 2002 and thereafter. 239.22 Sec. 16. [REPEALER.] 239.23 Minnesota Statutes 2000, sections 477A.011, subdivisions 239.24 35, 36, and 37; and 477A.03, subdivision 4, are repealed. 239.25[EFFECTIVE DATE.] This section is effective for aids 239.26 payable in calendar year 2002 and thereafter. 239.27 ARTICLE 11 239.28 SUSTAINABLE FOREST INCENTIVE ACT 239.29 Section 1. Minnesota Statutes 2000, section 88.49, 239.30 subdivision 5, is amended to read: 239.31 Subd. 5. [CANCELLATION.] Upon the failure of the owner 239.32 faithfully to fulfill and perform such contract or any provision 239.33 thereof, or any requirement of sections 88.47 to 88.53, or any 239.34 rule adopted by the commissioner thereunder, the commissioner 239.35 may cancel the contract in the manner herein provided. The 239.36 commissioner shall give to the owner, in the manner prescribed 240.1 in section 88.48, subdivision 4, 60 days' notice of a hearing 240.2 thereon at which the owner may appear and show cause, if any, 240.3 why the contract should not be canceled. The commissioner shall 240.4 thereupon determine whether the contract should be canceled and 240.5 make an order to that effect. Notice of the commissioner's 240.6 determination and the making of the order shall be given to the 240.7 owner in the manner provided in section 88.48, subdivision 4. 240.8 On determining that the contract should be canceled and no 240.9 appeal therefrom be taken, the commissioner shall send notice 240.10 thereof to the auditor of the county and to the town clerk of 240.11 the town affected and file with the recorder a certified copy of 240.12 the order, who shall forthwith note the cancellation upon the 240.13 record thereof, and thereupon the land therein described shall 240.14 cease to be an auxiliary forest and, together with the timber 240.15 thereon, become liable to all taxes and assessments that 240.16 otherwise would have been levied against it had it never been an 240.17 auxiliary forest from the time of the making of the contract, 240.18 any provisions of the statutes of limitation to the contrary 240.19 notwithstanding, less the amount of taxes paid under the 240.20 provisions of section 88.51, subdivision 1, together with 240.21 interest on such taxes and assessments at six percent per annum, 240.22 but without penalties. 240.23 The commissioner may in like manner and with like effect 240.24 cancel the contract upon written application of the owner. 240.25 The commissioner shall cancel any contract if the owner has 240.26 made successful application under sections270.31 to 270.39240.27inclusive290C.01 to 290C.11, theMinnesota Tree Growth Tax Law240.28 Sustainable Forest Incentive Act, and has paid to the county 240.29 treasurer the difference between the amount which would have 240.30 been paid had the land under contract been subject to the 240.31 Minnesota Tree Growth Tax Law and the Sustainable Forest 240.32 Incentive Act from the date of the filing of the contract and 240.33 the amount actually paid under section 88.51, subdivisions 1 and 240.34 2. This tax difference must be calculated based on the years 240.35 the lands would have been taxed under the Tree Growth Tax Law 240.36 and the Sustainable Forest Incentive Act. The sustainable 241.1 forest tax difference is net of the refund provision of section 241.2 290C.07. If the amount which would have been paid, had the land 241.3 under contract been under the Minnesota Tree Growth Tax Law and 241.4 the Sustainable Forest Incentive Act from the date of the filing 241.5 of the contract, is less than the amount actually paid under the 241.6 contract, the cancellation shall be made without further payment 241.7 by the owner. 241.8 When the execution of any contract creating an auxiliary 241.9 forest shall have been procured through fraud or deception 241.10 practiced upon the county board or the commissioner or any other 241.11 person or body representing the state, it may be canceled upon 241.12 suit brought by the attorney general at the direction of the 241.13 commissioner. This cancellation shall have the same effect as 241.14 the cancellation of a contract by the commissioner. 241.15 Sec. 2. Minnesota Statutes 2000, section 88.49, 241.16 subdivision 9a, is amended to read: 241.17 Subd. 9a. [LAND TRADES WITH GOVERNMENTAL UNITS.] 241.18 Notwithstanding subdivisions 6 and 9, or section 88.491, 241.19 subdivision 2, if an owner trades land under auxiliary forest 241.20 contract for land owned by a governmental unit and the owner 241.21 agrees to use the land received in trade from the governmental 241.22 unit for the production of forest products, upon resolution of 241.23 the county board, no taxes and assessments shall be levied 241.24 against the land traded, except that any current or delinquent 241.25 annual taxes or yield taxes due on that land while it was under 241.26 the auxiliary forest provision must be paid prior to the land 241.27 exchange. The land received from the governmental unit in the 241.28 land trade automatically qualifies for inclusion in theTree241.29Growth Tax LawSustainable Forest Incentive Act. 241.30 Sec. 3. Minnesota Statutes 2000, section 88.491, 241.31 subdivision 2, is amended to read: 241.32 Subd. 2. [EFFECT OF EXPIRED CONTRACT.] When auxiliary 241.33 forest contracts expire, or prior to expiration by mutual 241.34 agreement between the land owner and the appropriate county 241.35 office, the lands previously covered by an auxiliary forest 241.36 contract automatically qualify for inclusionin the Tree Growth242.1Tax Lawunder the provisions of the Sustainable Forest Incentive 242.2 Act; provided that when such lands are included in theTree242.3Growth Tax LawSustainable Forest Incentive Act prior to 242.4 expiration of the auxiliary forest contract they will be 242.5 transferred and a tax paid as provided inaccordance with the242.6provisions ofsection 88.49, subdivision 5, upon application and 242.7 inclusion in the sustainable forest incentive program. The land 242.8 owner shall pay taxes in an amount equal to the difference 242.9 between: 242.10 (1) the sum of: 242.11 (i) the amount which would have been paid from the date of 242.12 the filing of the contract had the land under contract been 242.13 subject to the Minnesota Tree Growth Tax Lawfrom the date of242.14the filing of the contract and; plus 242.15 (ii) beginning with taxes payable in 2003, the taxes that 242.16 would have been paid if the land had been enrolled in the 242.17 sustainable forest incentive program; and 242.18 (2) the amount actually paid under section 88.51, 242.19 subdivisions 1 and 2. 242.20 Sec. 4. Minnesota Statutes 2000, section 270A.03, 242.21 subdivision 7, is amended to read: 242.22 Subd. 7. [REFUND.] "Refund" means an individual income tax 242.23 refund or political contribution refund, pursuant to chapter 242.24 290, or a property tax credit or refund, pursuant to chapter 242.25 290A, or a sustainable forest tax payment to a claimant under 242.26 chapter 290C. 242.27 For purposes of this chapter, lottery prizes, as set forth 242.28 in section 349A.08, subdivision 8, and amounts granted to 242.29 persons by the legislature on the recommendation of the joint 242.30 senate-house of representatives subcommittee on claims shall be 242.31 treated as refunds. 242.32 In the case of a joint property tax refund payable to 242.33 spouses under chapter 290A, the refund shall be considered as 242.34 belonging to each spouse in the proportion of the total refund 242.35 that equals each spouse's proportion of the total income 242.36 determined under section 290A.03, subdivision 3. In the case of 243.1 a joint income tax refund under chapter 289A, the refund shall 243.2 be considered as belonging to each spouse in the proportion of 243.3 the total refund that equals each spouse's proportion of the 243.4 total taxable income determined under section 290.01, 243.5 subdivision 29. The commissioner shall remit the entire refund 243.6 to the claimant agency, which shall, upon the request of the 243.7 spouse who does not owe the debt, determine the amount of the 243.8 refund belonging to that spouse and refund the amount to that 243.9 spouse. For court fines, fees, and surcharges and court-ordered 243.10 restitution under section 611A.04, subdivision 2, the notice 243.11 provided by the commissioner of revenue under section 270A.07, 243.12 subdivision 2, paragraph (b), serves as the appropriate legal 243.13 notice to the spouse who does not owe the debt. 243.14[EFFECTIVE DATE.] This section is effective for refunds in 243.15 2003 and thereafter. 243.16 Sec. 5. [290C.01] [PURPOSE.] 243.17 It is the policy of this state to promote sustainable 243.18 forest resource management on the state's public and private 243.19 lands. Recognizing that private forests comprise approximately 243.20 one-half of the state forest land resources, that healthy and 243.21 robust forest land provides significant benefits to the state of 243.22 Minnesota, and that ad valorem property taxes represent a 243.23 significant annual cost that can discourage long-term forest 243.24 management investments, this chapter, hereafter referred to as 243.25 the "Sustainable Forest Incentive Act," is enacted to encourage 243.26 the state's private forest landowners to make a long-term 243.27 commitment to sustainable forest management. 243.28[EFFECTIVE DATE.] This section is effective for taxes 243.29 levied in 2002, payable in 2003, and thereafter. 243.30 Sec. 6. [290C.02] [DEFINITIONS.] 243.31 Subdivision 1. [APPLICATION.] When used in sections 243.32 290C.01 to 290C.11, the terms in this section have the meanings 243.33 given them. 243.34 Subd. 2. [APPROVED PLAN WRITERS.] "Approved plan writers" 243.35 are natural resource professionals who are self-employed, 243.36 employed by private companies or individuals, nonprofit 244.1 organizations, local units of government, or public agencies, 244.2 and who are approved by the commissioner of natural resources. 244.3 Persons determined to be certified foresters by the Society of 244.4 American Foresters shall be deemed to meet the standards 244.5 required under this subdivision. The commissioner of natural 244.6 resources shall issue a unique identification number to each 244.7 approved planner. 244.8 Subd. 3. [CLAIMANT.] "Claimant" means a person, as that 244.9 term is defined in section 290.01, subdivision 2, who owns 244.10 forest land in Minnesota and files an application authorized by 244.11 the Sustainable Forest Incentive Act. No more than one claimant 244.12 is entitled to a payment under this chapter with respect to any 244.13 tract, parcel, or piece of land enrolled under this chapter. 244.14 When enrolled forest land is owned by two or more persons, the 244.15 owners must determine between them which person may claim the 244.16 refunds provided under sections 290C.01 to 290C.11. 244.17 Subd. 4. [COMMISSIONER.] "Commissioner" means the 244.18 commissioner of revenue. 244.19 Subd. 5. [CURRENT USE VALUE.] "Current use value" means 244.20 the statewide average annual income per acre, multiplied by 90 244.21 percent and divided by the capitalization rate determined under 244.22 subdivision 9. The statewide net annual income shall be a 244.23 weighted average based on the most recent data as of July 1 of 244.24 the computation year on stumpage prices and annual tree growth 244.25 rates and acreage by cover type provided by the department of 244.26 natural resources and the United States Forest Service. 244.27 Subd. 6. [FOREST LAND.] "Forest land" means land 244.28 containing a minimum of 20 contiguous acres for which the owner 244.29 has implemented a forest management plan that was prepared or 244.30 updated within the past ten years by an approved plan writer. 244.31 At least 50 percent of the contiguous acreage must meet the 244.32 definition of forest land in section 88.01, subdivision 7. For 244.33 the purposes of sections 290C.01 to 209C.11, forest land does 244.34 not include (i) land used for residential or agricultural 244.35 purposes, (ii) land enrolled in the reinvest in Minnesota 244.36 program, a state or federal conservation reserve or easement 245.1 reserve program under sections 103F.501 to 103F.531, the 245.2 Minnesota agricultural property tax law under section 273.111, 245.3 or land subject to agricultural land preservation controls or 245.4 restrictions as defined in section 40A.02 or under the 245.5 Metropolitan Agricultural Preserves Act under chapter 473H, or 245.6 (iii) land improved with a structure, pavement, sewer, campsite, 245.7 or any road, other than a township road, used for purposes not 245.8 prescribed in the forest management plan. 245.9 Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management plan" 245.10 means a written document providing a framework for site-specific 245.11 healthy, productive, and sustainable forest resources. A forest 245.12 management plan must include at least the following: (i) 245.13 owner-specific forest management goals for the property 245.14 including, when available, goals for individual cover types; 245.15 (ii) a reliable field inventory of the individual forest cover 245.16 types, their age, and density; (iii) a description of the soil 245.17 type and quality; (iv) an aerial photo and/or map of the 245.18 vegetation and other natural features of the property clearly 245.19 indicating the boundaries of the property and of the forest 245.20 land; (v) the proposed future conditions of the property; (vi) 245.21 prescriptions to meet proposed future conditions of the 245.22 property; (vii) a recommended timetable for implementing the 245.23 prescribed activities; and (viii) a legal description of the 245.24 parcels encompassing the parcels included in the plan. All 245.25 management activities prescribed in a plan must be in accordance 245.26 with the recommended timber harvesting and forest management 245.27 guidelines developed under section 89A.05. The commissioner of 245.28 natural resources shall provide a framework for plan content and 245.29 updating and revising plans. 245.30 Subd. 8. [TIMBER HARVESTING AND FOREST MANAGEMENT 245.31 GUIDELINES.] "Timber harvesting and forest management guidelines" 245.32 means guidelines developed under section 89A.05 and adopted by 245.33 the Minnesota forest resources council in 1998. 245.34 Subd. 9. [CAPITALIZATION RATE.] By July 1 of each year, 245.35 the commissioner shall determine a statewide capitalization rate 245.36 for use under this chapter. The rate shall be the average 246.1 annual effective interest rate for St. Paul on new loans under 246.2 the Farm Credit Bank system calculated under section 246.3 2032A(e)(7)(A) of the Internal Revenue Code. 246.4[EFFECTIVE DATE.] This section is effective for taxes 246.5 levied in 2002, payable in 2003, and thereafter. 246.6 Sec. 7. [290C.03] [ELIGIBILITY REQUIREMENTS.] 246.7 (a) Property may be enrolled in the sustainable forest 246.8 incentive program under this chapter if all of the following 246.9 conditions are met: 246.10 (1) property consists of at least 20 contiguous acres and 246.11 at least 50 percent of the land must meet the definition of 246.12 forest land in section 88.01, subdivision 7, during the 246.13 enrollment; 246.14 (2) a forest management plan for the property must be 246.15 prepared by an approved plan writer and implemented during the 246.16 period in which the land is enrolled; 246.17 (3) timber harvesting and forest management guidelines must 246.18 be used in conjunction with any timber harvesting or forest 246.19 management activities conducted on the land during the period in 246.20 which the land is enrolled; 246.21 (4) the property must be enrolled for a minimum of eight 246.22 years; 246.23 (5) there are no delinquent property taxes on the property; 246.24 and 246.25 (6) claimants enrolling more than 2,500 acres in the 246.26 sustainable forest incentive program must allow year-round, 246.27 nonmotorized access to fish and wildlife resources on enrolled 246.28 land except within one-fourth mile of a permanent dwelling or 246.29 during periods of high fire hazard as determined by the 246.30 commissioner of natural resources. 246.31 (b) Claimants required to allow access under paragraph (a), 246.32 clause (6), do not by that action: 246.33 (1) extend any assurance that the land is safe for any 246.34 purpose; 246.35 (2) confer upon the person the legal status of an invitee 246.36 or licensee to whom a duty of care is owed; or 247.1 (3) assume responsibility for or incur liability for any 247.2 injury to the person or property caused by an act or omission of 247.3 the person. 247.4[EFFECTIVE DATE.] This section is effective for taxes 247.5 levied in 2002, payable in 2003, and thereafter. 247.6 Sec. 8. [290C.04] [APPLICATIONS.] 247.7 (a) A landowner may apply to enroll forest land for the 247.8 sustainable forest incentive program under this chapter. The 247.9 claimant must complete, sign, and submit an application to the 247.10 commissioner by September 30 in order for the land to become 247.11 eligible beginning in the next year. The application shall be 247.12 on a form prescribed by the commissioner and must include the 247.13 information the commissioner deems necessary. At a minimum, the 247.14 application must show the following information for the land and 247.15 the claimant: (i) the claimant's social security number or 247.16 state or federal business tax registration number and date of 247.17 birth, (ii) the claimant's address, (iii) the claimant's 247.18 signature, (iv) the county's parcel identification numbers for 247.19 the tax parcels that completely contain the claimant's forest 247.20 land that is sought to be enrolled, (v) the number of acres 247.21 eligible for enrollment in the program, (vi) the approved plan 247.22 writer's signature and identification number, and (vii) proof, 247.23 in a form specified by the commissioner, that the claimant has 247.24 executed and acknowledged in the manner required by law for a 247.25 deed, and recorded, a covenant that the land is not and shall 247.26 not be developed in a manner inconsistent with the requirements 247.27 and conditions of this chapter. The covenant shall state in 247.28 writing that the covenant is binding on the claimant and the 247.29 claimant's successor or assignee, and that it runs with the land 247.30 for a period of not less than eight years. The commissioner 247.31 shall specify the form of the covenant and provide copies upon 247.32 request. The covenant must include a legal description that 247.33 encompasses all the forest land that the claimant wishes to 247.34 enroll under this section or the certificate of title number for 247.35 that land if it is registered land. 247.36 (b) In all cases, the commissioner shall notify the 248.1 claimant within 90 days after receipt of a completed application 248.2 that either the land has or has not been approved for enrollment. 248.3 The claimant for which the application is denied may, within 60 248.4 days of receipt of a notice of denial, appeal the denial to the 248.5 commissioner. 248.6 (c) Within 45 days after the denial of an application, or 248.7 within 45 days after the denial of an appeal, the commissioner 248.8 shall execute and acknowledge a document releasing the land from 248.9 the covenant required under this chapter. The document must be 248.10 mailed to the claimant and is entitled to be recorded. 248.11 (d) The social security numbers collected from individuals 248.12 under this section are private data as provided in section 13.49. 248.13 The state or federal business tax registration number and date 248.14 of birth data collected under this section are also private data 248.15 but may be shared with county assessors for purposes of tax 248.16 administration and with county treasurers for purposes of the 248.17 revenue recapture under chapter 270A. 248.18[EFFECTIVE DATE.] This section is effective for taxes 248.19 levied in 2002, payable in 2003, and thereafter. 248.20 Sec. 9. [290C.05] [ANNUAL CERTIFICATION.] 248.21 On or before July 1 of each year, beginning with the year 248.22 after the claimant has received an approved application, the 248.23 commissioner shall send each claimant enrolled under the 248.24 sustainable forest incentive program a certification form. The 248.25 claimant must sign the certification, attesting that the 248.26 requirements and conditions for continued enrollment in the 248.27 program are currently being met, and must return the signed 248.28 certification form to the commissioner by August 15 of that same 248.29 year. Failure to return an annual certification form by the due 248.30 date shall result in removal of the lands from the provisions of 248.31 the sustainable forest incentive program, and the imposition of 248.32 any applicable removal penalty. The claimant may appeal the 248.33 removal and any associated penalty according to the procedures 248.34 and within the time allowed under this chapter. 248.35[EFFECTIVE DATE.] This section is effective for taxes 248.36 levied in 2002, payable in 2003, and thereafter. 249.1 Sec. 10. [290C.06] [CALCULATION OF AVERAGE ESTIMATED 249.2 MARKET VALUE; TIMBERLAND.] 249.3 The commissioner shall annually calculate a statewide 249.4 average estimated market value per acre for class 2b timberland 249.5 under section 273.13, subdivision 23, paragraph (b). 249.6[EFFECTIVE DATE.] This section is effective for taxes 249.7 levied in 2002, payable in 2003, and thereafter. 249.8 Sec. 11. [290C.07] [CALCULATION OF INCENTIVE PAYMENT.] 249.9 An approved claimant under the sustainable forest incentive 249.10 program is eligible to receive an annual payment. The payment 249.11 shall equal the greater of: 249.12 (1) the difference between the property tax that would be 249.13 paid on the property using the previous year's statewide average 249.14 total township tax rate and the class rate for class 2b 249.15 timberland under section 273.13, subdivision 23, paragraph (b), 249.16 if the property were valued at (i) the average statewide 249.17 timberland market value per acre calculated under section 249.18 290C.06, and (ii) the average statewide timberland current use 249.19 value per acre calculated under section 290C.02, subdivision 5; 249.20 (2) two-thirds of the property tax amount determined by 249.21 using the previous year's statewide average total township tax 249.22 rate, the estimated market value per acre as calculated in 249.23 section 290C.06, and the class rate for 2b timberland under 249.24 section 273.13, subdivision 23, paragraph (b); or 249.25 (3) $1.50 per acre for each acre enrolled in the 249.26 sustainable forest incentive program. 249.27[EFFECTIVE DATE.] This section is effective for taxes 249.28 levied in 2002, payable in 2003, and thereafter. 249.29 Sec. 12. [290C.08] [ANNUAL INCENTIVE PAYMENT; 249.30 APPROPRIATION.] 249.31 Subdivision 1. [ANNUAL PAYMENT.] An incentive payment on 249.32 enrolled land will be made annually to each claimant in the 249.33 amount determined under section 290C.07. The incentive payment 249.34 shall be paid on or before October 1 each year based on the 249.35 certifications due August 15 of that year. Interest at the 249.36 annual rate determined under section 270.75 shall be included 250.1 with any incentive payment not paid by the later of October 1 of 250.2 the year the certification was due, or 45 days after the 250.3 completed certification was returned or filed if the 250.4 commissioner accepts a certification filed after August 15 of 250.5 the taxes payable year as the resolution of an appeal. 250.6 Subd. 2. [APPROPRIATION.] The amount necessary to make the 250.7 payments under this section is annually appropriated to the 250.8 commissioner from the general fund. 250.9[EFFECTIVE DATE.] This section is effective for taxes 250.10 levied in 2002, payable in 2003, and thereafter. 250.11 Sec. 13. [290C.09] [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 250.12 The commissioner shall immediately remove any property 250.13 enrolled in the sustainable forest incentive program for which 250.14 taxes are determined to be delinquent as provided in chapter 279 250.15 and shall notify the claimant of such action. Lands terminated 250.16 from the sustainable forest incentive program under this section 250.17 are not entitled to any payments provided in this chapter and 250.18 are subject to removal penalties prescribed in section 290C.11. 250.19 The claimant has 90 days from the receipt of notice from the 250.20 commissioner under this section to pay the delinquent taxes. If 250.21 the delinquent taxes are paid within this 90-day period, the 250.22 lands shall be reinstated in the program as if they had not been 250.23 withdrawn and without the payment of a penalty. 250.24[EFFECTIVE DATE.] This section is effective for taxes 250.25 levied in 2002, payable in 2003, and thereafter. 250.26 Sec. 14. [290C.10] [WITHDRAWAL PROCEDURES.] 250.27 An approved claimant under the sustainable forest incentive 250.28 program for a minimum of four years may notify the commissioner 250.29 of the intent to terminate enrollment. Within 90 days of 250.30 receipt of notice to terminate enrollment, the commissioner 250.31 shall inform the claimant in writing, acknowledging receipt of 250.32 this notice and indicating the effective date of termination 250.33 from the sustainable forest incentive program. Termination of 250.34 enrollment in the sustainable forest incentive program occurs on 250.35 January 1 of the fifth calendar year that begins after receipt 250.36 by the commissioner of the termination notice. After the 251.1 commissioner issues an effective date of termination, a claimant 251.2 wishing to continue the property's enrollment in the sustainable 251.3 forest incentive program beyond the termination date must apply 251.4 for enrollment as prescribed in section 290C.04. A claimant who 251.5 withdraws a parcel of land from this program may not reenroll 251.6 the parcel for a period of three years. Within 45 days after 251.7 the termination date, the commissioner shall execute and 251.8 acknowledge a document releasing the land from the covenant 251.9 required under this chapter. The document must be mailed to the 251.10 claimant and is entitled to be recorded. The commissioner may 251.11 allow early withdrawal from the Sustainable Forest Incentive Act 251.12 without penalty in cases of condemnation for a public purpose 251.13 notwithstanding the provisions of this section. 251.14[EFFECTIVE DATE.] This section is effective for taxes 251.15 levied in 2002, payable in 2003, and thereafter. 251.16 Sec. 15. [290C.11] [PENALTIES FOR REMOVAL.] 251.17 (a) If the commissioner determines that property enrolled 251.18 in the sustainable forest incentive program is in violation of 251.19 the conditions for enrollment as specified in section 290C.03, 251.20 the commissioner shall notify the claimant of the intent to 251.21 remove all enrolled land from the sustainable forest incentive 251.22 program. The claimant has 90 days to appeal this determination. 251.23 The appeal must be made in writing to the commissioner, who 251.24 shall, within 60 days, notify the claimant as to the outcome of 251.25 the appeal. Within 60 days after the commissioner denies an 251.26 appeal, or within 120 days after the commissioner received a 251.27 written appeal if the commissioner has not made a determination 251.28 in that time, the owner may appeal to tax court under chapter 251.29 271 as if the appeal is from an order of the commissioner. 251.30 (b) If the commissioner determines the property is to be 251.31 removed from the sustainable forest incentive program, the 251.32 claimant is liable for payment to the commissioner in the amount 251.33 equal to the payments received under this chapter for the 251.34 previous four-year period, plus interest. The claimant has 90 251.35 days to satisfy the payment for removal of land from the 251.36 sustainable forest incentive program under this section. If the 252.1 penalty is not paid within the 90-day period under paragraph 252.2 (a), the commissioner shall certify the amount to the county 252.3 auditor for collection as a part of the general ad valorem real 252.4 property taxes on the land in the following taxes payable year. 252.5[EFFECTIVE DATE.] This section is effective for taxes 252.6 levied in 2002, payable in 2003, and thereafter. 252.7 Sec. 16. [REPEALER.] 252.8 Minnesota Statutes 2000, sections 270.31; 270.32; 270.33; 252.9 270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are repealed. 252.10[EFFECTIVE DATE.] This section is effective for taxes 252.11 levied in 2002, payable in 2003, and thereafter. 252.12 ARTICLE 12 252.13 LOCAL DEVELOPMENT 252.14 Section 1. Minnesota Statutes 2000, section 273.1399, 252.15 subdivision 6, is amended to read: 252.16 Subd. 6. [EXEMPT DISTRICTS.] (a) The provisions of this 252.17 section do not apply to exempt tax increment financing districts 252.18 as specified by this subdivision. 252.19 (b) A tax increment financing district for an ethanol 252.20 production facility that satisfies all of the following 252.21 requirements is exempt: 252.22 (1) The district is an economic development district, that 252.23 qualifies under section 469.176, subdivision 4c, paragraph (a), 252.24 clause (1). 252.25 (2) The facility is certified by the commissioner of 252.26 agriculture to qualify for state payments for ethanol 252.27 development under section 41A.09 to the extent funds are 252.28 available. 252.29 (3) Increments from the district are used only to finance 252.30 the qualifying ethanol development project located in the 252.31 district or to pay for administrative costs of the district. 252.32 (4) The district is located outside of the seven-county 252.33 metropolitan area, as defined in section 473.121. 252.34 (5) The tax increment financing plan was approved by a 252.35 resolution of the county board. 252.36 (6) The exemption provided by this paragraph applies until 253.1 the first year after the total amount of increment for the 253.2 district exceeds $1,500,000. The county auditor shall notify 253.3 the commissioner of revenue of the expiration of the exemption 253.4 by June 1 of the year in which the auditor projects the revenues 253.5 from increments will exceed $1,500,000. On or before the 253.6 expiration of the exemption, the municipality may elect to make 253.7 a qualifying local contribution under paragraph (d) in lieu of 253.8 the state aid reduction. 253.9 (c) A qualified housing district is exempt. 253.10 (d)(1) A district is exempt if the municipality elects at 253.11 the time of approving the tax increment financing plan for the 253.12 district to make a qualifying local contribution. To qualify 253.13 for the exemption in each year, the authority or the 253.14 municipality must make a qualifying local contribution equal to 253.15 the listed percentages of increment from the district or 253.16 subdistrict: 253.17 (A) for an economic development district or a renewal and 253.18 renovation district, ten percent; 253.19 (B) for a redevelopment district, a housing district,a253.20mined underground space district,a hazardous substance 253.21 subdistrict, or a soils condition district, five percent. 253.22 (2) If the municipality elects to make a qualifying 253.23 contribution and fails to make the required contribution for a 253.24 year, the state aid reduction applies for the year. The state 253.25 aid reduction equals the greater of (A) the required local 253.26 contribution or (B) the amount of the aid reduction that applies 253.27 under subdivision 3. For a district exempt under paragraph (b), 253.28 no qualifying local contribution is required for years in which 253.29 the district is exempt. 253.30 (3)(A) If the sum of required local contributions for all 253.31 districts in the municipality exceeds two percent of city net 253.32 tax capacity as defined in section 477A.011, subdivision 20, for 253.33 a year, the municipality's total required local contribution for 253.34 that year is limited to two percent of net tax capacity to 253.35 qualify for the exemption under this subdivision. The 253.36 municipality may allocate the contribution among the districts 254.1 on which it has made elections as it determines appropriate. 254.2 (B) If a municipality makes an election under this 254.3 subdivision for a district in a year in which item (A) applies, 254.4 a minimum annual qualifying contribution must be made for the 254.5 district equal to the lesser of 0.25 percent of city net tax 254.6 capacity or three percent of increment revenues. This minimum 254.7 contribution applies for the life of the district for each year 254.8 that the restriction in item (A) applies and is in addition to 254.9 the contribution required by item (A). 254.10 (4) The amount of the local contribution must be made out 254.11 of unrestricted money of the authority or municipality, such as 254.12 the general fund, a property tax levy, or a federal or a state 254.13 grant-in-aid which may be spent for general government 254.14 purposes. The local contribution may not be made, directly or 254.15 indirectly, with tax increments or developer payments as defined 254.16 under section 469.1766. The local contribution must be used to 254.17 pay project costs and cannot be used for general government 254.18 purposes or for improvements or costs that the authority or 254.19 municipality planned to incur absent the project. The authority 254.20 or municipality may request contributions from other local 254.21 government entities that will benefit from the district's 254.22 activities. These contributions reduce the local contribution 254.23 required of the municipality or authority by this paragraph. 254.24 Cities, counties, towns, and schools may contribute to paying 254.25 these costs, notwithstanding any other law to the contrary. 254.26 (5) The municipality may make a local contribution in 254.27 excess of the required contribution for a year. If it does so, 254.28 the municipality may credit the excess to a local contribution 254.29 account for the district. The balance in the account may be 254.30 used to meet the requirements for qualifying local contributions 254.31 for later years. No interest or investment earnings may be 254.32 credited or imputed to the account, except those (A) actually 254.33 paid by the municipality out of its unrestricted funds or by 254.34 another person or entity, other than a developer as used in 254.35 section 469.1766, and (B) used as required for a qualifying 254.36 local contribution. 255.1 (6) If the state contributes to the project costs through a 255.2 direct grant or similar incentive, the required local 255.3 contribution is reduced by one-half of the dollar amount of the 255.4 state grant or other similar incentive. 255.5[EFFECTIVE DATE.] This section is effective the day 255.6 following final enactment. 255.7 Sec. 2. Minnesota Statutes 2000, section 273.1399, is 255.8 amended by adding a subdivision to read: 255.9 Subd. 9. [CONTRIBUTIONS TO AFFORDABLE HOUSING FUNDS.] In 255.10 lieu of the state aid offset or local contribution under this 255.11 section, a city may elect, in the tax increment financing plan, 255.12 to make a contribution to an affordable housing fund. To 255.13 qualify under this paragraph, the city must: 255.14 (1) make a contribution to the affordable housing fund at 255.15 the times and in the amounts required for a local contribution 255.16 under the provisions of subdivision 6 for the district; 255.17 (2) make the contribution out of funds that would qualify 255.18 as a local contribution under subdivision 6; and 255.19 (3) spend the funds in the affordable housing account 255.20 within five years after the amounts are contributed on a project 255.21 that meets the requirements of a qualified housing district. 255.22 Failure to make a contribution to an affordable housing fund as 255.23 required by this paragraph has the same effect as the city 255.24 failing to make an elected local contribution under subdivision 255.25 6. 255.26[EFFECTIVE DATE.] This section is effective for tax 255.27 increment financing districts (1) for which the request for 255.28 certification is made after June 30, 2001, and (2) for which the 255.29 request for certification was made after June 30, 1994, if the 255.30 municipality elected to make a local contribution under 255.31 Minnesota Statutes, section 273.1399, subdivision 6. 255.32 Sec. 3. Minnesota Statutes 2000, section 276A.01, 255.33 subdivision 3, is amended to read: 255.34 Subd. 3. [COMMERCIAL-INDUSTRIAL PROPERTY.] 255.35 "Commercial-industrial property" means the following categories 255.36 of property, as defined in section 273.13, excluding that 256.1 portion of the property (i) that may, by law, constitute the tax 256.2 base for a tax increment pledged pursuant to section 469.042 or 256.3 469.162 or sections 469.174 to 469.178, certification of which 256.4 was requested prior to May 1, 1996, to the extent and while the 256.5 tax increment is so pledged; or (ii) that is exempt from 256.6 taxation under section 272.02: 256.7 (1) that portion of class 5 property consisting of unmined 256.8 iron ore and low-grade iron-bearing formations as defined in 256.9 section 273.14, tools, implements, and machinery, except the 256.10 portion of high voltage transmission lines, the value of which 256.11 is deducted from net tax capacity under section 273.425; and 256.12 (2) that portion of class 3 and class 5 property which is 256.13 either used or zoned for use for any commercial or industrial 256.14 purpose, except for such property which is, or, in the case of 256.15 property under construction, will when completed be used 256.16 exclusively for residential occupancy and the provision of 256.17 services to residential occupants thereof. Property must be 256.18 considered as used exclusively for residential occupancy only if 256.19 each of not less than 80 percent of its occupied residential 256.20 units is, or, in the case of property under construction, will 256.21 when completed be occupied under an oral or written agreement 256.22 for occupancy over a continuous period of not less than 30 days. 256.23 If the classification of property prescribed by section 256.24 273.13 is modified by legislative amendment, the references in 256.25 this subdivision are to the successor class or classes of 256.26 property, or portions thereof, that include the kinds of 256.27 property designated in this subdivision. 256.28[EFFECTIVE DATE.] This section is effective retroactive to 256.29 July 1, 1997, for taxes levied in 1997, payable in 1998, and 256.30 subsequent years. 256.31 Sec. 4. Minnesota Statutes 2000, section 297A.64, is 256.32 amended by adding a subdivision to read: 256.33 Subd. 2a. [ADDITIONAL FEE IMPOSED.] An additional fee 256.34 equal to three percent of the sales price is imposed on leases 256.35 or rentals of vehicles subject to the tax under subdivision 1. 256.36 Sec. 5. Minnesota Statutes 2000, section 297A.64, 257.1 subdivision 3, is amended to read: 257.2 Subd. 3. [ADMINISTRATION.] The retailer shall report and 257.3 pay the tax imposed in subdivision 1 and the additional fee 257.4 imposed under subdivision 2a to the commissioner of revenue with 257.5 the taxes imposed in this chapter. The tax imposed in 257.6 subdivision 1 and thefeefees imposed insubdivision 2257.7 subdivisions 2 and 2a are subject to the same interest, penalty, 257.8 and other provisions provided for sales and use taxes under 257.9 chapter 289A and this chapter. The commissioner has the same 257.10 powers to assess and collect the tax and fee that are given the 257.11 commissioner in chapters 270 and 289A and this chapter to assess 257.12 and collect sales and use tax. 257.13 Sec. 6. Minnesota Statutes 2000, section 297A.64, 257.14 subdivision 4, is amended to read: 257.15 Subd. 4. [EXEMPTIONS.] (a) The tax and thefeefees 257.16 imposed by this section do not apply to a lease or rental of (1) 257.17 a vehicle to be used by the lessee to provide a licensed taxi 257.18 service; (2) a hearse or limousine used in connection with a 257.19 burial or funeral service; or (3) a van designed or adapted 257.20 primarily for transporting property rather than passengers. 257.21 (b) The lessor may elect not to charge the fee imposed in 257.22 subdivision 2 if in the previous calendar year the lessor had no 257.23 more than 20 vehicles available for lease that would have been 257.24 subject to tax under this section, or no more than $50,000 in 257.25 gross receipts that would have been subject to tax under this 257.26 section. 257.27 Sec. 7. Minnesota Statutes 2000, section 297A.94, is 257.28 amended to read: 257.29 297A.94 [DEPOSIT OF REVENUES.] 257.30 (a) Except as provided in this section, the commissioner 257.31 shall deposit the revenues, including interest and penalties, 257.32 derived from the taxes imposed by this chapter in the state 257.33 treasury and credit them to the general fund. 257.34 (b) The commissioner shall deposit taxes in the Minnesota 257.35 agricultural and economic account in the special revenue fund if: 257.36 (1) the taxes are derived from sales and use of property 258.1 and services purchased for the construction and operation of an 258.2 agricultural resource project; and 258.3 (2) the purchase was made on or after the date on which a 258.4 conditional commitment was made for a loan guaranty for the 258.5 project under section 41A.04, subdivision 3. 258.6 The commissioner of finance shall certify to the commissioner 258.7 the date on which the project received the conditional 258.8 commitment. The amount deposited in the loan guaranty account 258.9 must be reduced by any refunds and by the costs incurred by the 258.10 department of revenue to administer and enforce the assessment 258.11 and collection of the taxes. 258.12 (c) The commissioner shall deposit the revenues, including 258.13 interest and penalties, derived from the taxes imposed on sales 258.14 and purchases included in section 297A.61, subdivision 16, 258.15 paragraphs (b) and (f), in the state treasury, and credit them 258.16 as follows: 258.17 (1) first to the general obligation special tax bond debt 258.18 service account in each fiscal year the amount required by 258.19 section 16A.661, subdivision 3, paragraph (b); and 258.20 (2) after the requirements of clause (1) have been met, the 258.21 balance to the general fund. 258.22 (d) The commissioner shall deposit the revenues, including 258.23 interest and penalties, collected under section 297A.64, 258.24 subdivision 5, in the state treasury and credit them to the 258.25 general fund. By July 15 of each year the commissioner shall 258.26 transfer to the highway user tax distribution fund an amount 258.27 equal to the excess fees collected under section 297A.64, 258.28 subdivision 5, for the previous calendar year. 258.29 (e) For fiscal year 2001, 97 percent, and for fiscal year 258.30 2002 and thereafter, 87 percent of the revenues, including 258.31 interest and penalties, transmitted to the commissioner under 258.32 section 297A.65, must be deposited by the commissioner in the 258.33 state treasury as follows: 258.34 (1) 50 percent of the receipts must be deposited in the 258.35 heritage enhancement account in the game and fish fund, and may 258.36 be spent only on activities that improve, enhance, or protect 259.1 fish and wildlife resources, including conservation, 259.2 restoration, and enhancement of land, water, and other natural 259.3 resources of the state; 259.4 (2) 22.5 percent of the receipts must be deposited in the 259.5 natural resources fund, and may be spent only for state parks 259.6 and trails; 259.7 (3) 22.5 percent of the receipts must be deposited in the 259.8 natural resources fund, and may be spent only on metropolitan 259.9 park and trail grants; 259.10 (4) three percent of the receipts must be deposited in the 259.11 natural resources fund, and may be spent only on local trail 259.12 grants; and 259.13 (5) two percent of the receipts must be deposited in the 259.14 natural resources fund, and may be spent only for the Minnesota 259.15 zoological garden, the Como park zoo and conservatory, and the 259.16 Duluth zoo. 259.17 (f) The revenue dedicated under paragraph (e) may not be 259.18 used as a substitute for traditional sources of funding for the 259.19 purposes specified, but the dedicated revenue shall supplement 259.20 traditional sources of funding for those purposes. Land 259.21 acquired with money deposited in the game and fish fund under 259.22 paragraph (e) must be open to public hunting and fishing during 259.23 the open season. At least 87 percent of the money deposited in 259.24 the game and fish fund for improvement, enhancement, or 259.25 protection of fish and wildlife resources under paragraph (e) 259.26 must be allocated for field operations. 259.27 (g) The commissioner shall deposit the revenues derived 259.28 from the fee imposed under section 297A.64, subdivision 2a, as 259.29 follows: 259.30 (1) the revenue from the tax imposed after June 30, 2001, 259.31 and before July 1, 2005, must be deposited in the general fund 259.32 for appropriation as provided in section 39; 259.33 (2) the revenue from the tax imposed after June 30, 2005, 259.34 and before July 1, 2026, must be deposited in the airport impact 259.35 mitigation fund created in section 39; and 259.36 (3) the revenue from the tax imposed after June 30, 2026, 260.1 must be deposited in the general fund. 260.2 Sec. 8. [469.1083] [TOWNSHIP ECONOMIC DEVELOPMENT 260.3 AUTHORITY; ESTABLISHMENT AND POWERS.] 260.4 Subdivision 1. [ESTABLISHMENT.] The board of township 260.5 supervisors of a township that is the only township in a county 260.6 may establish an economic development authority in the manner 260.7 provided in sections 469.090 to 469.1081, and may impose limits 260.8 on the authority provided in section 469.092. The economic 260.9 development authority has all of the powers and duties granted 260.10 to or imposed upon economic development authorities under 260.11 sections 469.090 to 469.1081. The township economic development 260.12 authority may create and define the boundaries of economic 260.13 development districts at any place or places within the 260.14 township, provided that a project as recommended by the township 260.15 authority that is to be located within the corporate limits of a 260.16 city may not be commenced without the approval of the governing 260.17 body of the city. Section 469.174, subdivision 10, and the 260.18 contiguity requirement specified under section 469.101, 260.19 subdivision 1, do not apply to limit the areas that may be 260.20 designated as township economic development districts. 260.21 Subd. 2. [POWERS.] If an economic development authority is 260.22 established as provided in subdivision 1, the township may 260.23 exercise all of the powers relating to an economic development 260.24 authority granted to a city under sections 469.090 to 469.1081, 260.25 or other law, including the power to levy a tax to support the 260.26 activities of the authority. 260.27 Sec. 9. Minnesota Statutes 2000, section 469.169, is 260.28 amended by adding a subdivision to read: 260.29 Subd. 15. [ADDITIONAL BORDER CITY ALLOCATIONS.] In 260.30 addition to tax reductions authorized in subdivisions 7 to 14, 260.31 the commissioner shall allocate $1,500,000 for tax reductions to 260.32 border city enterprise zones in cities located on the western 260.33 border of the state. The commissioner shall make allocations to 260.34 zones in cities on the western border on a per capita basis. 260.35 Allocations made under this subdivision may be used for tax 260.36 reductions as provided in section 469.171, or for other offsets 261.1 of taxes imposed on or remitted by businesses located in the 261.2 enterprise zone, but only if the municipality determines that 261.3 the granting of the tax reduction or offset is necessary in 261.4 order to retain a business within or attract a business to the 261.5 zone. Any portion of the allocation provided in this section 261.6 may alternatively be used for tax reductions under section 261.7 469.1732 or 469.1734. If, at the end of the biennium, the total 261.8 amount allowable under this section has not been expended, a 261.9 city that has expended its allocation may submit a request for 261.10 an additional allocation for qualifying reductions from the 261.11 amount remaining. If more than one city exceeds their 261.12 allocation and the additional qualifying amounts exceed the 261.13 balance remaining, the commissioner shall allocate the amount 261.14 remaining to each qualifying city in proportion to its request 261.15 for additional allocation. Limitations on allocations under 261.16 subdivision 7 do not apply to this allocation. 261.17[EFFECTIVE DATE.] This section is effective the day 261.18 following final enactment. 261.19 Sec. 10. Minnesota Statutes 2000, section 469.174, 261.20 subdivision 10, is amended to read: 261.21 Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 261.22 district" means a type of tax increment financing district 261.23 consisting of a project, or portions of a project, within which 261.24 the authority finds by resolution that one or more of the 261.25 following conditions, reasonably distributed throughout the 261.26 district, exists: 261.27 (1) parcels consisting of 70 percent of the area of the 261.28 district are occupied by buildings, streets, utilities, paved or 261.29 gravel parking lots, or otherimprovementssimilar structures 261.30 and more than 50 percent of the buildings, not including 261.31 outbuildings, are structurally substandard to a degree requiring 261.32 substantial renovation or clearance; or 261.33 (2) the property consists of vacant, unused, underused, 261.34 inappropriately used, or infrequently used railyards, rail 261.35 storage facilities, or excessive or vacated railroad 261.36 rights-of-way; or 262.1 (3) tank facilities, or property whose immediately previous 262.2 use was for tank facilities, as defined in section 115C.02, 262.3 subdivision 15, if the tank facilities: 262.4 (i) have or had a capacity of more than 1,000,000 gallons; 262.5 (ii) are located adjacent to rail facilities; and 262.6 (iii) have been removed or are unused, underused, 262.7 inappropriately used, or infrequently used. 262.8 (b) For purposes of this subdivision, "structurally 262.9 substandard" shall mean containing defects in structural 262.10 elements or a combination of deficiencies in essential utilities 262.11 and facilities, light and ventilation, fire protection including 262.12 adequate egress, layout and condition of interior partitions, or 262.13 similar factors, which defects or deficiencies are of sufficient 262.14 total significance to justify substantial renovation or 262.15 clearance. 262.16 (c) A building is not structurally substandard if it is in 262.17 compliance with the building code applicable to new buildings or 262.18 could be modified to satisfy the building code at a cost of less 262.19 than 15 percent of the cost of constructing a new structure of 262.20 the same square footage and type on the site. The municipality 262.21 may find that a building is not disqualified as structurally 262.22 substandard under the preceding sentence on the basis of 262.23 reasonably available evidence, such as the size, type, and age 262.24 of the building, the average cost of plumbing, electrical, or 262.25 structural repairs, or other similar reliable evidence. The 262.26 municipality may not make such a determination without an 262.27 interior inspection of the property, but need not have an 262.28 independent, expert appraisal prepared of the cost of repair and 262.29 rehabilitation of the building. An interior inspection of the 262.30 property is not required, if the municipality finds that (1) the 262.31 municipality or authority is unable to gain access to the 262.32 property after using its best efforts to obtain permission from 262.33 the party that owns or controls the property; and (2) the 262.34 evidence otherwise supports a reasonable conclusion that the 262.35 building is structurally substandard. Items of evidence that 262.36 support such a conclusion include recent fire or police 263.1 inspections, on-site property tax appraisals or housing 263.2 inspections, exterior evidence of deterioration, or other 263.3 similar reliable evidence. Written documentation of the 263.4 findings and reasons why an interior inspection was not 263.5 conducted must be made and retained under section 469.175, 263.6 subdivision 3, clause (1). 263.7 (d) A parcel is deemed to be occupied by a structurally 263.8 substandard building for purposes of the finding under paragraph 263.9 (a) if all of the following conditions are met: 263.10 (1) the parcel was occupied by a substandard building 263.11 within three years of the filing of the request for 263.12 certification of the parcel as part of the district with the 263.13 county auditor; 263.14 (2) the substandard building was demolished or removed by 263.15 the authority or the demolition or removal was financed by the 263.16 authority or was done by a developer under a development 263.17 agreement with the authority; 263.18 (3) the authority found by resolution before the demolition 263.19 or removal that the parcel was occupied by a structurally 263.20 substandard building and that after demolition and clearance the 263.21 authority intended to include the parcel within a district; and 263.22 (4) upon filing the request for certification of the tax 263.23 capacity of the parcel as part of a district, the authority 263.24 notifies the county auditor that the original tax capacity of 263.25 the parcel must be adjusted as provided by section 469.177, 263.26 subdivision 1, paragraph (h). 263.27 (e) For purposes of this subdivision, a parcel is not 263.28 occupied by buildings, streets, utilities, paved or gravel 263.29 parking lots, or otherimprovementssimilar structures unless 15 263.30 percent of the area of the parcel containsimprovements263.31 buildings, streets, utilities, paved or gravel parking lots, or 263.32 other similar structures. 263.33 (f) For districts consisting of two or more noncontiguous 263.34 areas, each area must qualify as a redevelopment district under 263.35 paragraph (a) to be included in the district, and the entire 263.36 area of the district must satisfy paragraph (a). 264.1[EFFECTIVE DATE.] This section is effective for districts 264.2 for which the request for certification is made after June 30, 264.3 2001. 264.4 Sec. 11. Minnesota Statutes 2000, section 469.174, 264.5 subdivision 10a, is amended to read: 264.6 Subd. 10a. [RENEWAL AND RENOVATION DISTRICT.] (a) "Renewal 264.7 and renovation district" means a type of tax increment financing 264.8 district consisting of a project, or portions of a project, 264.9 within which the authority finds by resolution that: 264.10 (1)(i) parcels consisting of 70 percent of the area of the 264.11 district are occupied by buildings, streets, utilities, paved or 264.12 gravel parking lots, or otherimprovementssimilar structures; 264.13 (ii) 20 percent of the buildings are structurally substandard; 264.14 and (iii) 30 percent of the other buildings require substantial 264.15 renovation or clearance to remove existing conditions such as: 264.16 inadequate street layout, incompatible uses or land use 264.17 relationships, overcrowding of buildings on the land, excessive 264.18 dwelling unit density, obsolete buildings not suitable for 264.19 improvement or conversion, or other identified hazards to the 264.20 health, safety, and general well-being of the community; and 264.21 (2) the conditions described in clause (1) are reasonably 264.22 distributed throughout the geographic area of the district. 264.23 (b) For purposes of determining whether a building is 264.24 structurally substandard, whether parcels are occupied by 264.25 buildings, streets, utilities, paved or gravel parking lots, or 264.26 otherimprovementssimilar structures, or whether noncontiguous 264.27 areas qualify, the provisions of subdivision 10, 264.28 paragraphs(b),(c), (e), and(d)(f) apply. 264.29[EFFECTIVE DATE.] This section is effective for districts 264.30 for which the requests for certification are made after June 30, 264.31 1997, except the provision requiring parcels to be occupied by 264.32 structures is effective for districts for which the request for 264.33 certification is made after June 30, 2001. 264.34 Sec. 12. Minnesota Statutes 2000, section 469.174, 264.35 subdivision 12, is amended to read: 264.36 Subd. 12. [ECONOMIC DEVELOPMENT DISTRICT.] "Economic 265.1 development district" means a type of tax increment financing 265.2 district which consists of any project, or portions of a 265.3 project,not meeting the requirements found in the definition of265.4redevelopment district, renewal and renovation district, soils265.5condition district, or housing district, butwhich the authority 265.6 finds to be in the public interest because: 265.7 (1) it will discourage commerce, industry, or manufacturing 265.8 from moving their operations to another state or municipality; 265.9 or 265.10 (2) it will result in increased employment in the state; or 265.11 (3) it will result in preservation and enhancement of the 265.12 tax base of the state. 265.13[EFFECTIVE DATE.] This section is effective for districts 265.14 for which the request for certification is made after June 30, 265.15 2001. 265.16 Sec. 13. Minnesota Statutes 2000, section 469.175, 265.17 subdivision 1, is amended to read: 265.18 Subdivision 1. [TAX INCREMENT FINANCING PLAN.](a)A tax 265.19 increment financing plan shall contain: 265.20 (1) a statement of objectives of an authority for the 265.21 improvement of a project; 265.22 (2) a statement as to the development program for the 265.23 project, including the property within the project, if any, that 265.24 the authority intends to acquire; 265.25 (3) a list of any development activities that the plan 265.26 proposes to take place within the project, for which contracts 265.27 have been entered into at the time of the preparation of the 265.28 plan, including the names of the parties to the contract, the 265.29 activity governed by the contract, the cost stated in the 265.30 contract, and the expected date of completion of that activity; 265.31 (4) identification or description of the type of any other 265.32 specific development reasonably expected to take place within 265.33 the project, and the date when the development is likely to 265.34 occur; 265.35 (5) estimates of the following: 265.36 (i) cost of the project, including administration expenses; 266.1 (ii) amount of bonded indebtedness to be incurred; 266.2 (iii) sources of revenue to finance or otherwise pay public 266.3 costs; 266.4 (iv) the most recent net tax capacity of taxable real 266.5 property within the tax increment financing district and within 266.6 any subdistrict; 266.7 (v) the estimated captured net tax capacity of the tax 266.8 increment financing district at completion; and 266.9 (vi) the duration of the tax increment financing district's 266.10 and any subdistrict's existence; 266.11 (6) statements of the authority's alternate estimates of 266.12 the impact of tax increment financing on the net tax capacities 266.13 of all taxing jurisdictions in which the tax increment financing 266.14 district is located in whole or in part. For purposes of one 266.15 statement, the authority shall assume that the estimated 266.16 captured net tax capacity would be available to the taxing 266.17 jurisdictions without creation of the district, and for purposes 266.18 of the second statement, the authority shall assume that none of 266.19 the estimated captured net tax capacity would be available to 266.20 the taxing jurisdictions without creation of the district or 266.21 subdistrict; 266.22 (7) identification and description of studies and analyses 266.23 used to make the determination set forth in subdivision 3, 266.24 clause (2); and 266.25 (8) identification of all parcels to be included in the 266.26 district or any subdistrict. 266.27(b) For a housing district, redevelopment district, or a266.28hazardous substance subdistrict, the authority may elect in the266.29tax increment financing plan to provide for the identification266.30of a minimum market value in the plan, development agreement, or266.31assessment agreement, and provide that increment is first266.32received by the authority when (1) the market value of the266.33improvements as determined by the assessor reaches or exceeds266.34the minimum market value, or (2) four years has elapsed from the266.35date of certification of the original net tax capacity of the266.36taxable real property in the district or subdistrict by the267.1county auditor, whichever is earlier.267.2[EFFECTIVE DATE.] This section is effective for requests 267.3 for certification of tax increment financing districts received 267.4 after June 30, 2001. 267.5 Sec. 14. Minnesota Statutes 2000, section 469.175, is 267.6 amended by adding a subdivision to read: 267.7 Subd. 4a. [FILING PLAN WITH STATE.] (a) The authority must 267.8 file a copy of the tax increment financing plan and amendments 267.9 to the plan with the commissioner of revenue. The authority 267.10 must also file a copy of the development plan or the project 267.11 plan for the project area with the commissioner of revenue. The 267.12 commissioner of revenue shall provide a copy of the plan to the 267.13 state auditor upon request. 267.14 (b) Filing under this subdivision must be made within 60 267.15 days after the latest of: 267.16 (1) the filing of the request for certification of the 267.17 district; 267.18 (2) approval of the plan by the municipality; or 267.19 (3) adoption of the plan by the authority. 267.20[EFFECTIVE DATE.] This section is effective for plans and 267.21 amendments approved after July 1, 2000. 267.22 Sec. 15. Minnesota Statutes 2000, section 469.175, 267.23 subdivision 5, is amended to read: 267.24 Subd. 5. [ANNUAL DISCLOSURE.] An annual statement showing 267.25 for each district the information required to be reported under 267.26 subdivision 6, paragraph (c), clauses (1), (2), (3), (11), (12), 267.27 (20), and (21); the amounts of tax increment received and 267.28 expended in the reporting period; and any additional information 267.29 the authority deems necessary must be published in a newspaper 267.30 of general circulation in the municipality that approved the tax 267.31 increment financing plan. The annual statement must inform 267.32 readers that additional information regarding each district may 267.33 be obtained from the authority, and must explain how the 267.34 additional information may be requested. The authority must 267.35 publish the annual statement for a year no later than August 15 267.36 of the next year. The authority must identify the newspaper of 268.1 general circulation in the municipality to which the annual 268.2 statement has been or will be submitted for publication and 268.3 provide a copy of the annual statement to the county board, the 268.4 county auditor, the school board, thestate auditorcommissioner 268.5 of revenue, and, if the authority is other than the 268.6 municipality, the governing body of the municipality on or 268.7 before August 1 of the year in which the statement must be 268.8 published. 268.9 The disclosure requirements imposed by this subdivision 268.10 apply to districts certified before, on, or after August 1, 1979. 268.11 Sec. 16. Minnesota Statutes 2000, section 469.175, 268.12 subdivision 6, is amended to read: 268.13 Subd. 6. [ANNUAL FINANCIAL REPORTING.] (a) The state 268.14 auditor shall develop a uniform system of accounting and 268.15 financial reporting for tax increment financing districts. The 268.16 system of accounting and financial reporting shall, as nearly as 268.17 possible: 268.18 (1) provide for full disclosure of the sources and uses of 268.19 public funds in the district; 268.20 (2) permit comparison and reconciliation with the affected 268.21 local government's accounts and financial reports; 268.22 (3) permit auditing of the funds expended on behalf of a 268.23 district, including a single district that is part of a 268.24 multidistrict project or that is funded in part or whole through 268.25 the use of a development account funded with tax increments from 268.26 other districts or with other public money; 268.27 (4) be consistent with generally accepted accounting 268.28 principles. 268.29 (b) The authority must annually submit to thestate auditor268.30 commissioner of revenue a financial report in compliance with 268.31 paragraph (a) that has been audited by an independent auditor. 268.32 Copies of the report must also be provided to the county auditor 268.33 and to the governing body of the municipality, if the authority 268.34 is not the municipality. To the extent necessary to permit 268.35 compliance with the requirement of financial reporting, the 268.36 county and any other appropriate local government unit or 269.1 private entity must provide the necessary records or information 269.2 to the authority or thestate auditorcommissioner of revenue as 269.3 provided by the system of accounting and financial reporting 269.4 developed pursuant to paragraph (a). The authority must submit 269.5 the annual report for a year on or before August 1 of the next 269.6 year. 269.7 (c) The annual financial report must also include the 269.8 following items: 269.9 (1) the original net tax capacity of the district and any 269.10 subdistrict under section 469.177, subdivision 1; 269.11 (2) the net tax capacity for the reporting period of the 269.12 district and any subdistrict; 269.13 (3) the captured net tax capacity of the district; 269.14 (4) any fiscal disparity deduction from the captured net 269.15 tax capacity under section 469.177, subdivision 3; 269.16 (5) the captured net tax capacity retained for tax 269.17 increment financing under section 469.177, subdivision 2, 269.18 paragraph (a), clause (1); 269.19 (6) any captured net tax capacity distributed among 269.20 affected taxing districts under section 469.177, subdivision 2, 269.21 paragraph (a), clause (2); 269.22 (7) the type of district; 269.23 (8) the date the municipality approved the tax increment 269.24 financing plan and the date of approval of any modification of 269.25 the tax increment financing plan, the approval of which requires 269.26 notice, discussion, a public hearing, and findings under 269.27 subdivision 4, paragraph (a); 269.28 (9) the date the authority first requested certification of 269.29 the original net tax capacity of the district and the date of 269.30 the request for certification regarding any parcel added to the 269.31 district; 269.32 (10) the date the county auditor first certified the 269.33 original net tax capacity of the district and the date of 269.34 certification of the original net tax capacity of any parcel 269.35 added to the district; 269.36 (11) the month and year in which the authority has received 270.1 or anticipates it will receive the first increment from the 270.2 district; 270.3 (12) the date the district must be decertified; 270.4 (13) for the reporting period and prior years of the 270.5 district, the actual amount received from, at least, the 270.6 following categories: 270.7 (i) tax increments paid by the captured net tax capacity 270.8 retained for tax increment financing under section 469.177, 270.9 subdivision 2, paragraph (a), clause (1), but excluding any 270.10 excess taxes; 270.11 (ii) tax increments that are interest or other investment 270.12 earnings on or from tax increments; 270.13 (iii) tax increments that are proceeds from the sale or 270.14 lease of property, tangible or intangible, purchased by the 270.15 authority with tax increments; 270.16 (iv) tax increments that are repayments of loans or other 270.17 advances made by the authority with tax increments; 270.18 (v) bond or loan proceeds; 270.19 (vi) special assessments; 270.20 (vii) grants; and 270.21 (viii) transfers from funds not exclusively associated with 270.22 the district; 270.23 (14) for the reporting period and for the prior years of 270.24 the district, the amount budgeted under the tax increment 270.25 financing plan, and the actual amount expended for, at least, 270.26 the following categories: 270.27 (i) acquisition of land and buildings through condemnation 270.28 or purchase; 270.29 (ii) site improvements or preparation costs; 270.30 (iii) installation of public utilities, parking facilities, 270.31 streets, roads, sidewalks, or other similar public improvements; 270.32 (iv) administrative costs, including the allocated cost of 270.33 the authority; 270.34 (v) public park facilities, facilities for social, 270.35 recreational, or conference purposes, or other similar public 270.36 improvements; and 271.1 (vi) transfers to funds not exclusively associated with the 271.2 district; 271.3 (15) for properties sold to developers, the total cost of 271.4 the property to the authority and the price paid by the 271.5 developer; 271.6 (16) the amount of any payments and the value of any 271.7 in-kind benefits, such as physical improvements and the use of 271.8 building space, that are paid or financed with tax increments 271.9 and are provided to another governmental unit other than the 271.10 municipality during the reporting period; 271.11 (17) the amount of any payments for activities and 271.12 improvements located outside of the district that are paid for 271.13 or financed with tax increments; 271.14 (18) the amount of payments of principal and interest that 271.15 are made during the reporting period on any nondefeased: 271.16 (i) general obligation tax increment financing bonds; 271.17 (ii) other tax increment financing bonds; and 271.18 (iii) notes and pay-as-you-go contracts; 271.19 (19) the principal amount, at the end of the reporting 271.20 period, of any nondefeased: 271.21 (i) general obligation tax increment financing bonds; 271.22 (ii) other tax increment financing bonds; and 271.23 (iii) notes and pay-as-you-go contracts; 271.24 (20) the amount of principal and interest payments that are 271.25 due for the current calendar year on any nondefeased: 271.26 (i) general obligation tax increment financing bonds; 271.27 (ii) other tax increment financing bonds; and 271.28 (iii) notes and pay-as-you-go contracts; 271.29 (21) if the fiscal disparities contribution under chapter 271.30 276A or 473F for the district is computed under section 469.177, 271.31 subdivision 3, paragraph (a), the amount of increased property 271.32 taxes imposed on other properties in the municipality that 271.33 approved the tax increment financing plan as a result of the 271.34 fiscal disparities contribution; and 271.35 (22) whether the tax increment financing plan or other 271.36 governing document permits increment revenues to be expended: 272.1 (i) to pay bonds, the proceeds of which were or may be 272.2 expended on activities outside of the district; 272.3 (ii) for deposit into a common bond fund from which money 272.4 may be expended on activities located outside of the district; 272.5 or 272.6 (iii) to otherwise finance activities located outside of 272.7 the tax increment financing district; and272.8(23) any additional information the state auditor may272.9require. 272.10 (d) The commissioner of revenue shall prescribe the method 272.11 of calculating the increased property taxes under paragraph (c), 272.12 clause (21), and the form of the statement disclosing this 272.13 information on the annual statement under subdivision 5. 272.14 (e) The reporting requirements imposed by this subdivision 272.15 apply to districts certified before, on, and after August 1, 272.16 1979. 272.17 Sec. 17. Minnesota Statutes 2000, section 469.175, 272.18 subdivision 6b, is amended to read: 272.19 Subd. 6b. [DURATION OF DISCLOSURE AND REPORTING 272.20 REQUIREMENTS.] The disclosure and reporting requirements imposed 272.21 by subdivisions 5,and 6, and 6aapply with respect to a tax 272.22 increment financing district beginning with the annual 272.23 disclosure and reports for the year in which the original net 272.24 tax capacity of the district was certified and ending with the 272.25 annual disclosure and reports for the year in which both of the 272.26 following events have occurred: 272.27 (1) decertification of the district; and 272.28 (2) expenditure or return to the county auditor of all 272.29 remaining revenues derived from tax increments paid by 272.30 properties in the district. 272.31 Sec. 18. [469.1751] [MITIGATION RELATED TO LARGE RAILROAD 272.32 PROJECTS.] 272.33 Subdivision 1. [AUTHORIZATION.] A city or county that 272.34 contains qualifying railroad property may establish a railroad 272.35 improvement tax increment financing district under this section 272.36 to pay for mitigation measures. 273.1 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 273.2 the following terms have the meanings given. 273.3 (b) "City" means a statutory or home rule charter city. 273.4 (c) "Qualifying railroad property" means the Minnesota 273.5 railroad operating property of a railroad company that 273.6 undertakes a series of improvements to its operating property if 273.7 the following requirements are met: 273.8 (1) the improvements consist of construction of new 273.9 railroad track or a substantial rebuilding of existing track; 273.10 (2) the improvements are approved by the federal Surface 273.11 Transportation Board; and 273.12 (3) the total expenditures on the improvements in Minnesota 273.13 are projected to exceed $250,000,000 over a five-year period, 273.14 based on the estimates submitted to the federal Surface 273.15 Transportation Board. 273.16 (d) "Railroad operating property" has the meaning given in 273.17 section 270.80, subdivision 3. 273.18 Subd. 3. [BEGINNING APPLICATION OF AUTHORITY.] The 273.19 authority to establish a tax increment financing district under 273.20 this section applies beginning for the first assessment year 273.21 after the commissioner of revenue determines that the railroad 273.22 company's tax capacity has increased by five percent over the 273.23 assessment year in which the federal Surface Transportation 273.24 Board approves the improvement. 273.25 Subd. 4. [AREA OF DISTRICT.] (a) If a city exercises its 273.26 authority to create a tax increment financing district under 273.27 this section, the district consists of all of the parcels 273.28 located in the city that constitute railroad operating property. 273.29 (b) If a county exercises its authority to create a tax 273.30 increment financing district under this section, the district 273.31 consists of all of the parcels located in the county, but 273.32 outside of the boundaries of a city, that constitute railroad 273.33 operating property. 273.34 Subd. 5. [ORIGINAL NET TAX CAPACITY.] The original net tax 273.35 capacity of a district established under this section is the net 273.36 tax capacity of the district for the assessment year in which 274.1 the federal Surface Transportation Board approves the 274.2 improvement, regardless of the year in which the request for 274.3 certification is made. 274.4 Subd. 6. [AUTHORITY AND PROJECT AREA.] (a) A city or 274.5 county that creates a district under this section is an 274.6 authority under section 469.174, subdivision 2, and may exercise 274.7 the powers of an authority under sections 469.174 to 469.1791 274.8 and any other related provision of law. 274.9 (b) For purposes of section 469.176, subdivision 4, or any 274.10 other provision of law, the project and project area for a 274.11 district established under this section respectively consist of 274.12 the planned railroad mitigation measures and the area in which 274.13 increments may be spent under subdivision 8. 274.14 Subd. 7. [DURATION LIMIT.] No tax increment may be paid to 274.15 the city or county after 15 years after receipt by the city or 274.16 county of the first increment for a district established under 274.17 this section. 274.18 Subd. 8. [PERMITTED USES OF INCREMENT.] (a) Increment from 274.19 a district established under this section may only be used to 274.20 pay for mitigation measures and administrative expenses. 274.21 (b) Mitigation measures include only: 274.22 (1) traffic crossing safety improvements; 274.23 (2) traffic and train vehicle conflict reduction measures 274.24 such as grade separations; 274.25 (3) improvements to connecting streets to redirect traffic 274.26 to other crossings; 274.27 (4) pedestrian safety measures; 274.28 (5) noise mitigation measures including only: 274.29 (i) sound walls; 274.30 (ii) construction of berms; 274.31 (iii) acquisition or relocation of the most severely 274.32 impacted properties; 274.33 (iv) whistle-free crossing improvements; 274.34 (v) directional horns for train crossings; and 274.35 (vi) other measures to reduce noise impacts on adjacent 274.36 properties. 275.1 (c) A city may spend increments from the district on 275.2 mitigation measures anywhere in the city that is located within 275.3 2,230 feet of the centerline of the main railroad line. A 275.4 county may spend increments from the district on mitigation 275.5 measures anywhere within the county that is located within 2,230 275.6 feet of the centerline of the main railroad line, but outside of 275.7 the boundaries of a city, or within the boundaries of a city, if 275.8 the governing body of the city approves the plan for the 275.9 spending in writing before it is undertaken. 275.10 Subd. 9. [EXEMPTIONS.] The following provisions of law 275.11 applicable to tax increment financing districts established 275.12 under sections 469.174 to 469.178 do not apply to districts 275.13 established under this section: 275.14 (1) increments from the district may be spent within or 275.15 outside the tax increment district or project area as provided 275.16 under subdivision 8, paragraph (c); 275.17 (2) section 273.1399 is satisfied if the municipality 275.18 spends an amount of its general or other unrestricted funds on 275.19 mitigation measures equal to five percent of the increment from 275.20 the district; 275.21 (3) the findings required under section 469.175, 275.22 subdivision 3, clauses (1) to (5), do not apply; 275.23 (4) the map required under section 469.175, subdivision 3, 275.24 need not be published; 275.25 (5) section 469.176, subdivision 1a, does not apply; 275.26 (6) section 469.176, subdivision 4g, does not apply; 275.27 (7) section 469.176, subdivision 6, does not apply; 275.28 (8) section 469.1763 does not apply; 275.29 (9) section 469.177, subdivision 1a, does not apply and 275.30 increment calculations must be made using the full tax rates for 275.31 the current year. 275.32[EFFECTIVE DATE.] This section is effective the day 275.33 following final enactment. 275.34 Sec. 19. Minnesota Statutes 2000, section 469.176, 275.35 subdivision 1b, is amended to read: 275.36 Subd. 1b. [DURATION LIMITS; TERMS.] (a) No tax increment 276.1 shall in any event be paid to the authority 276.2 (1) after 15 years after receipt by the authority of the 276.3 first increment for a renewal and renovation district, 276.4 (2) after 20 years after receipt by the authority of the 276.5 first increment for a soils condition district, 276.6 (3) after eight years after receipt by the authority of the 276.7 first increment for an economic development district, 276.8 (4) for a housing district or a redevelopment district, 276.9after 20 years from the date of receipt by the authority of the276.10first tax increment by the authority pursuant to section276.11469.175, subdivision 1, paragraph (b); or, if no provision is276.12made under section 469.175, subdivision 1, paragraph (b),after 276.13 25 years from the date of receipt by the authority of the first 276.14 increment. 276.15 (b) For purposes of determining a duration limit under this 276.16 subdivision or subdivision 1e that is based on the receipt of an 276.17 increment, any increments from taxes payable in the year in 276.18 which the district terminates shall be paid to the authority. 276.19 This paragraph does not affect a duration limit calculated from 276.20 the date of approval of the tax increment financing plan or 276.21 based on the recovery of costs or to a duration limit under 276.22 subdivision 1c. This paragraph does not supersede the 276.23 restrictions on payment of delinquent taxes in subdivision 1f. 276.24 (c)Except as authorized by section 469.175, subdivision 1,276.25paragraph (b),An action by the authority to waive or decline to 276.26 accept an increment has no effect for purposes of computing a 276.27 duration limit based on the receipt of increment under this 276.28 subdivision or any other provision of law. The authority is 276.29 deemed to have received an increment for any year in which it 276.30 waived or declined to accept an increment, regardless of whether 276.31 the increment was paid to the authority. 276.32 (d) Receipt by a hazardous substance subdistrict of an 276.33 increment as a result of a reduction in original net tax 276.34 capacity under section 469.174, subdivision 7, paragraph (b), 276.35 does not constitute receipt of increment by the overlying 276.36 district for purpose of calculating the duration limit under 277.1 this section. 277.2[EFFECTIVE DATE.] This section is effective for districts 277.3 for which the request for certification is made after June 30, 277.4 2001. 277.5 Sec. 20. Minnesota Statutes 2000, section 469.176, 277.6 subdivision 1e, is amended to read: 277.7 Subd. 1e. [DURATION LIMITS; HAZARDOUS SUBSTANCE 277.8 SUBDISTRICTS.] If a parcel of a district is part of a designated 277.9 hazardous substance site or a hazardous substance subdistrict, 277.10 tax increment may be paid to the authority from the parcel for 277.11 longer than the period otherwise provided by subdivisions 1 to 277.12 1f for the overlying district. The extended period for 277.13 collection of tax increment begins on the date of receipt of the 277.14 first tax increment from the parcel that is more than any tax 277.15 increment received from the parcel before the date of the 277.16 certification under section 469.174, subdivision 7, paragraph 277.17 (b), and received after the date of certification to the county 277.18 auditor described in section 469.174, subdivision 7, paragraph 277.19 (b). The extended period for collection of tax increment is the 277.20 lesser of: (1) 25 years from the date of commencement of the 277.21 extended periodor 20 years if the authority elects under277.22section 469.175, subdivision 1, paragraph (b), to defer receipt277.23of the first increment; or (2) the period necessary to recover 277.24 the costs of removal actions or remedial actions specified in a 277.25 development response action plan. 277.26[EFFECTIVE DATE.] This section is effective for requests 277.27 for certification of subdistricts made after June 30, 2001. 277.28 Sec. 21. Minnesota Statutes 2000, section 469.176, 277.29 subdivision 3, is amended to read: 277.30 Subd. 3. [LIMITATION ON ADMINISTRATIVE EXPENSES.] (a) For 277.31 districts for which certification was requested before August 1, 277.32 1979, or after June 30, 1982, no tax increment shall be used to 277.33 pay any administrative expenses for a project which exceed ten 277.34 percent of the total tax increment expenditures authorized by 277.35 the tax increment financing plan or the total tax increment 277.36 expenditures for the project, whichever is less. 278.1 (b) For districts for which certification was requested 278.2 after July 31, 1979, and before July 1, 1982, no tax increment 278.3 shall be used to pay administrative expenses, as defined in 278.4 Minnesota Statutes 1980, section 273.73, for aprojectdistrict 278.5 which exceeds five percent of the total tax increment 278.6 expenditures authorized by the tax increment financing plan or 278.7 the total tax increment expenditures for theprojectdistrict, 278.8 whichever is less. 278.9 (c) For districts for which certification was requested 278.10 after June 30, 2001, no tax increment may be used to pay any 278.11 administrative expenses for a project which exceed ten percent 278.12 of total tax increment expenditures authorized by the tax 278.13 increment financing plan or the total tax increments from the 278.14 district, whichever is less. 278.15[EFFECTIVE DATE.] This section is effective for districts 278.16 for which the request for certification is received after June 278.17 30, 2001. 278.18 Sec. 22. Minnesota Statutes 2000, section 469.176, 278.19 subdivision 4g, is amended to read: 278.20 Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a)These278.21revenues shallTax increments may not be used to circumvent 278.22 existing levy limit law. 278.23 (b) Norevenues derived fromtax increment from any 278.24 district, whether certified before or after August 1, 1979,278.25shallmay be used for the acquisition, construction, renovation, 278.26 operation, or maintenance of a building to be used primarily and 278.27 regularly for conducting the business of a municipality, county, 278.28 school district, or any other local unit of government or the 278.29 state or federal governmentor for a commons area used as a278.30public park, or a facility used for social, recreational, or278.31conference purposes. This provisionshalldoes not prohibit the 278.32 use of revenues derived from tax increments for the construction 278.33 or renovation of a parking structureor of a privately owned278.34facility for conference purposes. 278.35(b) If any publicly owned facility used for social,278.36recreational, or conference purposes and financed in whole or in279.1part from revenues derived from a district is operated or279.2managed by an entity other than the authority, the operating and279.3management policies of the facility must be approved by the279.4governing body of the authority.279.5 (c)(1) Tax increments may not be used to pay for the cost 279.6 of public improvements, equipment, or other items, if: 279.7 (i) the improvements, equipment, or other items are located 279.8 outside of the area of the tax increment financing district from 279.9 which the increments were collected; and 279.10 (ii) the improvements, equipment, or items that (A) 279.11 primarily serve a decorative or aesthetic purpose, or (B) serve 279.12 a functional purpose, but their cost is increased by more than 279.13 100 percent as a result of the selection of materials, design, 279.14 or type as compared with more commonly used materials, designs, 279.15 or types for similar improvements, equipment, or items. 279.16 (2) The provisions of this paragraph do not apply to 279.17 expenditures related to the rehabilitation of historic 279.18 structures that are: 279.19 (i) individually listed on the National Register of 279.20 Historic Places; or 279.21 (ii) a contributing element to a historic district listed 279.22 on the National Register of Historic Places. 279.23[EFFECTIVE DATE.] This section is effective for 279.24 expenditures of increment made after June 30, 2001. 279.25 Sec. 23. Minnesota Statutes 2000, section 469.176, is 279.26 amended by adding a subdivision to read: 279.27 Subd. 41. [PROHIBITED FACILITIES.] (a) No tax increment 279.28 from any district may be used for: 279.29 (1) a commons area used as a public park; or 279.30 (2) a facility used for social, recreational, or conference 279.31 purposes. 279.32 (b) This subdivision does not apply to a privately owned 279.33 facility for conference purposes or a parking structure. 279.34[EFFECTIVE DATE.] This section is effective for 279.35 expenditures of increment made after June 30, 2001, but does not 279.36 apply to (1) expenditures made before January 1, 2000; (2) 280.1 expenditures made under a binding contract entered before 280.2 January 1, 2000; or (3) expenditures made under a binding 280.3 contract entered pursuant to a letter of intent with the 280.4 developer or contractor if the letter of intent was entered 280.5 before January 1, 2000. 280.6 Sec. 24. Minnesota Statutes 2000, section 469.1763, 280.7 subdivision 3, is amended to read: 280.8 Subd. 3. [FIVE-YEAR RULE.] (a) Except for districts 280.9 subject to subdivision 7, revenues derived from tax increments 280.10 are considered to have been expended on an activity within the 280.11 district under subdivision 2 only if one of the following occurs: 280.12 (1) before or within five years after certification of the 280.13 district, the revenues are actually paid to a third party with 280.14 respect to the activity; 280.15 (2) bonds, the proceeds of which must be used to finance 280.16 the activity, are issued and sold to a third party before or 280.17 within five years after certification, the revenues are spent to 280.18 repay the bonds, and the proceeds of the bonds either are, on 280.19 the date of issuance, reasonably expected to be spent before the 280.20 end of the later of (i) the five-year period, or (ii) a 280.21 reasonable temporary period within the meaning of the use of 280.22 that term under section 148(c)(1) of the Internal Revenue Code, 280.23 or are deposited in a reasonably required reserve or replacement 280.24 fund; 280.25 (3) binding contracts with a third party are entered into 280.26 for performance of the activity before or within five years 280.27 after certification of the district and the revenues are spent 280.28 under the contractual obligation; or 280.29 (4) costs with respect to the activity are paid before or 280.30 within five years after certification of the district and the 280.31 revenues are spent to reimburse a party for payment of the 280.32 costs, including interest on unreimbursed costs. 280.33 (b) For purposes of this subdivision, bonds include 280.34 subsequent refunding bonds if the original refunded bonds meet 280.35 the requirements of paragraph (a), clause (2). 280.36 Sec. 25. Minnesota Statutes 2000, section 469.1763, 281.1 subdivision 6, is amended to read: 281.2 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 281.3 subdivision applies only to districts for which the request for 281.4 certification was made before June 2, 1997. 281.5 (b) The municipality for the district may transfer 281.6 available increments from another tax increment financing 281.7 district located in the municipality, if the transfer is 281.8 necessary to eliminate a deficit in the district to which the 281.9 increments are transferred. A deficit in the district for 281.10 purposes of this subdivision meansthe lesser of the following281.11two amounts: 281.12(1)(i)the amount due during the calendar year to pay 281.13 preexisting obligations of the district; minus the sum of: 281.14(ii)(1) the total increments to be collected from 281.15 properties located within the district that are available for 281.16 the calendar year; plus 281.17(iii)(2) total increments from properties located in other 281.18 districts in the municipality that are available to be used to 281.19 meet the district's obligations under this section, excluding 281.20 this subdivision, or other provisions of law (but excluding a 281.21 special tax under section 469.1791 and the grant program under 281.22 Laws 1997, chapter 231, article 1, section 19); or281.23(2) the reduction in increments collected from properties281.24located in the district for the calendar year as a result of the281.25changes in class rates in Laws 1997, chapter 231, article 1;281.26Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243. 281.27 (c) A preexisting obligation means bonds issued and sold 281.28 before June 2, 1997, and bonds issued to refund such bonds or to 281.29 reimburse expenditures made in conjunction with a signed 281.30 contractual agreement entered into before June 2, 1997, to the 281.31 extent that the bonds are secured by a pledge of increments from 281.32 the tax increment financing district. Bonds are considered to 281.33 be preexisting obligations under this paragraph only if: 281.34 (1) the proceeds of the bonds were spent on or before 281.35 December 31, 2000, or were deposited into a reasonably required 281.36 reserve or replacement fund; or 282.1 (2) the deficit in the district for the purposes of 282.2 paragraph (b) is determined as the lesser of the amount 282.3 determined under paragraph (b), or the amount of the reduction 282.4 in increments collected from properties located in the district 282.5 for the calendar year as a result of the changes in class rates 282.6 in Laws 1997, chapter 231, article 1; Laws 1998, chapter 389, 282.7 article 2, and Laws 1999, chapter 243. For purposes of this 282.8 subdivision, bonds exclude an obligation to reimburse or pay a 282.9 developer or owner of property located in the district for 282.10 amounts incurred or paid by the developer or owner. 282.11 (d) The municipality may require a development authority, 282.12 other than a seaway port authority, to transfer available 282.13 increments for any of its tax increment financing districts in 282.14 the municipality to make up an insufficiency in another district 282.15 in the municipality, regardless of whether the district was 282.16 established by the development authority or another development 282.17 authority. This authority applies notwithstanding any law to 282.18 the contrary, but applies only to a development authority that: 282.19 (1) was established by the municipality; or 282.20 (2) the governing body of which is appointed, in whole or 282.21 part, by the municipality or an officer of the municipality or 282.22 which consists, in whole or part, of members of the governing 282.23 body of the municipality. 282.24 (e) The authority under this subdivision to spend tax 282.25 increments outside of the area of the district from which the 282.26 tax increments were collected: 282.27 (1) in the case of expenditures for districts for which 282.28 bonds are considered to be preexisting obligations under 282.29 paragraph (c), clause (2), may only be exercised after obtaining 282.30 approval of the use of the increments, in writing, by the 282.31 commissioner of revenue; 282.32 (2) is an exception to the restrictions under section 282.33 469.176, subdivision 4i, and the other provisions of this 282.34 section, and the percentage restrictions under subdivision 2 282.35 must be calculated after deducting increments spent under this 282.36 subdivision from the total increments for the district; and 283.1 (3) applies notwithstanding the provisions of the Tax 283.2 Increment Financing Act in effect for districts for which the 283.3 request for certification was made before June 30, 1982, or any 283.4 other law to the contrary. 283.5[EFFECTIVE DATE.] This section is effective for increments 283.6 collected in 2002 and thereafter. 283.7 Sec. 26. Minnesota Statutes 2000, section 469.1763, is 283.8 amended by adding a subdivision to read: 283.9 Subd. 7. [TEN-YEAR RULE.] (a) Revenue derived from tax 283.10 increments are considered to have been expended on an activity 283.11 within the district under subdivision 2 only if one of the 283.12 following occurs: 283.13 (1) before or within ten years after certification of the 283.14 district, the revenues are actually paid to a third party within 283.15 respect to the activity; 283.16 (2) bonds, the proceeds of which must be used to finance 283.17 the activity, are issued and sold to a third party before or 283.18 within ten years after certification, the revenues are spent to 283.19 repay the bonds, and the proceeds of the bonds either are, on 283.20 the date of issuance, reasonably expected to be spent before the 283.21 end of the later of (i) the ten-year period, or (ii) a 283.22 reasonable temporary period within the meaning of the use of 283.23 that term under section 148(c)(1) of the Internal Revenue Code, 283.24 or are deposited in a reasonably required reserve or replacement 283.25 fund; 283.26 (3) binding contracts with a third party are entered into 283.27 for performance of the activity before or within ten years after 283.28 certification of the district and the revenues are spent under 283.29 the contractual obligation; or 283.30 (4) costs with respect to the activity are paid before or 283.31 within ten years after certification of the district and the 283.32 revenues are spent to reimburse a party for payment of the 283.33 costs, including interest on unreimbursed costs. 283.34 (b) For purposes of this subdivision, bonds include 283.35 subsequent refunding bonds if the original refunded bonds meet 283.36 the requirements of paragraph (a), clause (2). 284.1 (c) This subdivision applies only to a soils condition 284.2 district or a redevelopment district, and only if the county 284.3 board approves, by resolution, a request by the authority within 284.4 five years from the date of request of certification for the 284.5 district. 284.6[EFFECTIVE DATE.] This section is effective for districts 284.7 for which certification is requested after April 30, 1996. 284.8 Sec. 27. Minnesota Statutes 2000, section 469.1763, is 284.9 amended by adding a subdivision to read: 284.10 Subd. 8. [USE OF REVENUES FOR DECERTIFICATION WITH 284.11 TEN-YEAR RULE.] (a) Beginning with the 11th year following 284.12 certification of the district, the applicable in-district 284.13 percent of the revenues derived from tax increments paid by 284.14 properties in the district that remain after the expenditures 284.15 permitted under subdivision 7 must be used only to pay: 284.16 (1) outstanding bonds, as defined in subdivision 7, 284.17 paragraphs (a), clause (2), and (b); 284.18 (2) contracts, as defined in subdivision 7, paragraph (a), 284.19 clauses (3) and (4); or 284.20 (3) credit enhanced bonds to which the revenues derived 284.21 from tax increments are pledged, but only to the extent that 284.22 revenues of the district for which the credit enhanced bonds 284.23 were issued are insufficient to pay the bonds and to the extent 284.24 that the increments from the applicable pooling percent share 284.25 for the district are insufficient. 284.26 (b) When the outstanding bonds have been defeased and when 284.27 sufficient money has been set aside to pay contractual 284.28 obligations as defined in subdivision 7, paragraph (a), clauses 284.29 (3) and (4), the district must be decertified and the pledge of 284.30 tax increment discharged. 284.31 (c) This subdivision only applies to a soils condition 284.32 district or a redevelopment district if the county board 284.33 approves, by resolution, a request by the authority within five 284.34 years from the date of request of certification for the district. 284.35[EFFECTIVE DATE.] This section is effective for districts 284.36 for which certification is requested after April 30, 1996. 285.1 Sec. 28. Minnesota Statutes 2000, section 469.177, 285.2 subdivision 1, is amended to read: 285.3 Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or 285.4 after adoption of a tax increment financing plan, the auditor of 285.5 any county in which the district is situated shall, upon request 285.6 of the authority, certify the original net tax capacity of the 285.7 tax increment financing district and that portion of the 285.8 district overlying any subdistrict as described in the tax 285.9 increment financing plan and shall certify in each year 285.10 thereafter the amount by which the original net tax capacity has 285.11 increased or decreased as a result of a change in tax exempt 285.12 status of property within the district and any subdistrict, 285.13 reduction or enlargement of the district or changes pursuant to 285.14 subdivision 4. 285.15 (b) For districts approved under section 469.175, 285.16 subdivision 3, or parcels added to existing districts after May 285.17 1, 1988, if the classification under section 273.13 of property 285.18 located in a district changes to a classification that has a 285.19 different assessment ratio, the original net tax capacity of 285.20 that property must be redetermined at the time when its use is 285.21 changed as if the property had originally been classified in the 285.22 same class in which it is classified after its use is changed. 285.23 (c) The amount to be added to the original net tax capacity 285.24 of the district as a result of previously tax exempt real 285.25 property within the district becoming taxable equals the net tax 285.26 capacity of the real property as most recently assessed pursuant 285.27 to section 273.18 or, if that assessment was made more than one 285.28 year prior to the date of title transfer rendering the property 285.29 taxable, the net tax capacity assessed by the assessor at the 285.30 time of the transfer. If improvements are made to tax exempt 285.31 property after certification of the district and before the 285.32 parcel becomes taxable, the assessor shall, at the request of 285.33 the authority, separately assess the estimated market value of 285.34 the improvements. If the property becomes taxable, the county 285.35 auditor shall add to original net tax capacity, the net tax 285.36 capacity of the parcel, excluding the separately assessed 286.1 improvements. If substantial taxable improvements were made to 286.2 a parcel after certification of the district and if the property 286.3 later becomes tax exempt, in whole or part, as a result of the 286.4 authority acquiring the property through foreclosure or exercise 286.5 of remedies under a lease or other revenue agreement or as a 286.6 result of tax forfeiture, the amount to be added to the original 286.7 net tax capacity of the district as a result of the property 286.8 again becoming taxable is the amount of the parcel's value that 286.9 was included in original net tax capacity when the parcel was 286.10 first certified. The amount to be added to the original net tax 286.11 capacity of the district as a result of enlargements equals the 286.12 net tax capacity of the added real property as most recently 286.13 certified by the commissioner of revenue as of the date of 286.14 modification of the tax increment financing plan pursuant to 286.15 section 469.175, subdivision 4. 286.16 (d) For districts approved under section 469.175, 286.17 subdivision 3, or parcels added to existing districts after May 286.18 1, 1988, if the net tax capacity of a property increases because 286.19 the property no longer qualifies under the Minnesota 286.20 Agricultural Property Tax Law, section 273.111; the Minnesota 286.21 Open Space Property Tax Law, section 273.112; or the 286.22 Metropolitan Agricultural Preserves Act, chapter 473H, or 286.23 because platted, unimproved property is improved or three years 286.24 pass after approval of the plat under section 273.11, 286.25 subdivision 1, the increase in net tax capacity must be added to 286.26 the original net tax capacity. 286.27 (e) The amount to be subtracted from the original net tax 286.28 capacity of the district as a result of previously taxable real 286.29 property within the district becoming tax exempt, or a reduction 286.30 in the geographic area of the district, shall be the amount of 286.31 original net tax capacity initially attributed to the property 286.32 becoming tax exempt or being removed from the district. If the 286.33 net tax capacity of property located within the tax increment 286.34 financing district is reduced by reason of a court-ordered 286.35 abatement, stipulation agreement, voluntary abatement made by 286.36 the assessor or auditor or by order of the commissioner of 287.1 revenue, the reduction shall be applied to the original net tax 287.2 capacity of the district when the property upon which the 287.3 abatement is made has not been improved since the date of 287.4 certification of the district and to the captured net tax 287.5 capacity of the district in each year thereafter when the 287.6 abatement relates to improvements made after the date of 287.7 certification. The county auditor may specify reasonable form 287.8 and content of the request for certification of the authority 287.9 and any modification thereof pursuant to section 469.175, 287.10 subdivision 4. 287.11 (f) If a parcel of property contained a substandard 287.12 building that was demolished or removed and if the authority 287.13 elects to treat the parcel as occupied by a substandard building 287.14 under section 469.174, subdivision 10, paragraph (b), the 287.15 auditor shall certify the original net tax capacity of the 287.16 parcel using the greater of (1) the current net tax capacity of 287.17 the parcel, or (2) the estimated market value of the parcel for 287.18 the year in which the building was demolished or removed, but 287.19 applying the class rates for the current year. 287.20[EFFECTIVE DATE.] This section is effective for parcels 287.21 that become taxable after June 30, 2001, and applies to tax 287.22 increment financing districts, regardless of when the request 287.23 for certification was made. 287.24 Sec. 29. Minnesota Statutes 2000, section 469.1771, 287.25 subdivision 1, is amended to read: 287.26 Subdivision 1. [ENFORCEMENT.] (a) The owner of taxable 287.27 property located in the city, town, school district, or county 287.28 in which the tax increment financing district is located may 287.29 bring suit for equitable relief or for damages, as provided in 287.30 subdivisions 2, 3, and 4, arising out of a failure of a 287.31 municipality or authority to comply with the provisions of 287.32 sections 469.174 to469.179469.1791, or related provisions of 287.33 this chapter. The prevailing party in a suit filed under the 287.34 preceding sentence is entitled to costs, including reasonable 287.35 attorney fees. 287.36 (b)The state auditor may examine and audit political288.1subdivisions' use of tax increment financing. Without previous288.2notice, the state auditor may examine or audit accounts and288.3records on a random basis as the auditor deems to be in the288.4public interest. If the state auditor finds evidence that an288.5authority or municipality has violated a provision of the law288.6for which a remedy is provided under this section, the state288.7auditor shall forward the relevant information to the county288.8attorney.The county attorney may bring an action to enforce 288.9 the provisions of sections 469.174 to469.179469.1791 or 288.10 related provisions of this chapter, for matters referred by the288.11state auditor oron behalf of the county.If the county288.12attorney determines not to bring an action or if the county288.13attorney has not brought an action within 12 months after288.14receipt of the initial notification by the state auditor of the288.15violation, the county attorney shall notify the state auditor in288.16writing.288.17(c) If the state auditor finds an authority is not in288.18compliance with sections 469.174 to 469.179 or related288.19provisions of law, the auditor shall notify the governing body288.20of the municipality that approved the tax increment financing288.21district of its findings. The governing body of the288.22municipality must respond in writing to the state auditor within288.2360 days after receiving the notification. Its written response288.24must state whether the municipality accepts, in whole or part,288.25the auditor's findings. If the municipality does not accept the288.26findings, the statement must indicate the basis for its288.27disagreement. The state auditor shall annually summarize the288.28responses it receives under this section and send the summary288.29and copies of the responses to the chairs of the committees of288.30the legislature with jurisdiction over tax increment financing.288.31(d) The state auditor shall notify the attorney general in288.32writing and provide supporting materials for a violation found288.33by the auditor, if the:288.34(1) auditor receives notification from the county attorney288.35under paragraph (b) or receives no notification for a 12-month288.36period after initially notifying the county attorney and the289.1state auditor confirms with the county attorney or the289.2municipality that no action has been brought regarding the289.3matter; and289.4(2) municipality or development authority have not289.5eliminated or resolved the violation to the satisfaction of the289.6state auditor.289.7The auditor shall provide the municipality and development289.8authority a copy of the notification sent to the attorney289.9general.289.10[EFFECTIVE DATE.] This section applies to violations 289.11 occurring after June 30, 2001. 289.12 Sec. 30. Minnesota Statutes 2000, section 469.1771, 289.13 subdivision 2a, is amended to read: 289.14 Subd. 2a. [SUSPENSION OF DISTRIBUTION OF TAX INCREMENT.] 289.15 (a) If an authority fails to make a disclosure or to submit a 289.16 report containing the information required by section 469.175, 289.17 subdivisions 5 and 6, regarding a tax increment financing 289.18 district within the time provided in section 469.175, 289.19 subdivisions 5 and 6, thestate auditorcommissioner of revenue 289.20 shall mail to the authority a written notice that it or the 289.21 municipality has failed to make the required disclosure or to 289.22 submit a required report with respect to a particular district. 289.23 Thestate auditorcommissioner of revenue shall mail the notice 289.24 on or before the third Tuesday of August of the year in which 289.25 the disclosure or report was required to be made or submitted. 289.26 The notice must describe the consequences of failing to disclose 289.27 or submit a report as provided in paragraph (b). If thestate289.28auditorcommissioner of revenue has not received a copy of a 289.29 disclosure or a report described in this paragraph on or before 289.30 the third Tuesday of November of the year in which the 289.31 disclosure or report was required to be made or submitted, the 289.32 state auditor shall mail a written notice to the county auditor 289.33 to hold the distribution of tax increment from a particular 289.34 district. 289.35 (b) Upon receiving written notice from thestate auditor289.36 commissioner of revenue to hold the distribution of tax 290.1 increment, the county auditor shall hold: 290.2 (1) 25 percent of the amount of tax increment that 290.3 otherwise would be distributed, if the distribution is made 290.4 after the third Friday in November but during the year in which 290.5 the disclosure or report was required to be made or submitted; 290.6 or 290.7 (2) 100 percent of the amount of tax increment that 290.8 otherwise would be distributed, if the distribution is made 290.9 after December 31 of the year in which the disclosure or report 290.10 was required to be made or submitted. 290.11 (c) Upon receiving the copy of the disclosure and all of 290.12 the reports described in paragraph (a) with respect to a 290.13 district regarding which thestate auditorcommissioner of 290.14 revenue has mailed to the county auditor a written notice to 290.15 hold distribution of tax increment, thestate auditor290.16 commissioner of revenue shall mail to the county auditor a 290.17 written notice lifting the hold and authorizing the county 290.18 auditor to distribute to the authority or municipality any tax 290.19 increment that the county auditor had held pursuant to paragraph 290.20 (b). Thestate auditorcommissioner of revenue shall mail the 290.21 written notice required by this paragraph within five working 290.22 days after receiving the last outstanding item. The county 290.23 auditor shall distribute the tax increment to the authority or 290.24 municipality within 15 working days after receiving the written 290.25 notice required by this paragraph. 290.26 (d) Notwithstanding any law to the contrary, any interest 290.27 that accrues on tax increment while it is being held by the 290.28 county auditor pursuant to paragraph (b) is not tax increment 290.29 and may be retained by the county. 290.30 (e) For purposes of sections 469.176, subdivisions 1a to 290.31 1g, and 469.177, subdivision 11, tax increment being held by the 290.32 county auditor pursuant to paragraph (b) is considered 290.33 distributed to or received by the authority or municipality as 290.34 of the time that it would have been distributed or received but 290.35 for paragraph (b). 290.36 Sec. 31. Minnesota Statutes 2000, section 469.178, is 291.1 amended by adding a subdivision to read: 291.2 Subd. 7. [INTERFUND LOANS.] The authority or municipality 291.3 may advance or loan money to finance expenditures under section 291.4 469.176, subdivision 4, from its general fund or any other fund 291.5 under which it has legal authority to do so. The loan or 291.6 advance must be approved, by resolution of the governing body, 291.7 before money is transferred, advanced, or spent. The terms and 291.8 conditions for repayment of the loan must be provided in writing 291.9 and include, at a minimum, the principal amount, the interest 291.10 rate, maturity, and repayment schedule. The maximum rate of 291.11 interest permitted to be charged is limited to the greater of 291.12 the rates specified under section 270.75 or 549.09. 291.13[EFFECTIVE DATE.] This section is effective for loans and 291.14 advances made after June 30, 2001. Interfund loans and advances 291.15 made before July 1, 2001, are ratified and approved, subject to 291.16 the requirement that interest accrued or paid after July 1, 291.17 2001, may not exceed the limit in this section. 291.18 Sec. 32. [469.1792] [HOUSING REPLACEMENT DISTRICTS.] 291.19 Subdivision 1. [DEFINITIONS.] As used in this section, the 291.20 terms defined in this subdivision have the meanings given. 291.21 (a) "Captured net tax capacity" means the amount by which 291.22 the current net tax capacity in a housing replacement district 291.23 exceeds the original net tax capacity, including the value of 291.24 property normally taxable as personal property by reason of its 291.25 location on or over property owned by a tax-exempt entity. 291.26 (b) "Original net tax capacity" means the net tax capacity 291.27 of all taxable real property within a housing replacement 291.28 district as certified by the commissioner of revenue for the 291.29 previous assessment year less the net tax capacity attributable 291.30 to existing improvements, provided that the request by the 291.31 authority for certification of a new housing replacement 291.32 district has been made to the county auditor by June 30. The 291.33 original net tax capacity of housing replacement districts for 291.34 which requests are filed after June 30 has an original net tax 291.35 capacity based on the current assessment year. In any case, the 291.36 original net tax capacity must be determined together with 292.1 subsequent adjustments as set forth in section 469.177, 292.2 subdivision 1, paragraph (c). In determining the original net 292.3 tax capacity, the net tax capacity of real property exempt from 292.4 taxation at the time of the request is zero, except for real 292.5 property which is tax exempt by reason of public ownership by 292.6 the requesting authority and which has been publicly owned for 292.7 less than one year prior to the date of the request for 292.8 certification, in which event the net tax capacity of the 292.9 property is the net tax capacity as most recently determined by 292.10 the commissioner of revenue. 292.11 (c) "Parcel" means a tract or plat of land established 292.12 prior to the certification of the housing replacement district 292.13 as a single unit for purposes of assessment. 292.14 (d) For housing replacement projects in the cities of 292.15 Crystal, Fridley, Minneapolis, and St. Paul "authority" means 292.16 the entity provided under Laws 1995, chapter 264, article 5, 292.17 section 44, subdivision 4, as amended by Laws 1996, chapter 471, 292.18 article 7, section 21; and Laws 1997, chapter 231, article 10, 292.19 section 12. For housing replacement projects in any other city, 292.20 "authority" means the authority as defined in section 469.174, 292.21 subdivision 2, that is designated by the governing body of the 292.22 municipality to be the authority for purposes of this section. 292.23 Subd. 2. [ESTABLISHMENT OF HOUSING REPLACEMENT DISTRICTS.] 292.24 (a) An authority may create a housing replacement project as 292.25 provided in this section. 292.26 (b) For cities of the first class, the authority may 292.27 designate up to 200 parcels in the city to be included in a 292.28 housing replacement district. For other cities, each authority 292.29 may designate up to 50 parcels in the city to be included in a 292.30 housing replacement district over the life of the district. The 292.31 only parcels that may be included in a district are (1) vacant 292.32 sites, (2) parcels containing vacant houses, or (3) parcels 292.33 containing houses that are structurally substandard, as defined 292.34 in section 469.174, subdivision 10. 292.35 (c) The city in which the authority is located must pay at 292.36 least 25 percent of the housing replacement project costs from 293.1 its general fund, a property tax levy, or other unrestricted 293.2 money, not including tax increments. 293.3 (d) The housing replacement district plan must have as its 293.4 sole object the acquisition of parcels for the purpose of 293.5 preparing the site to be sold for market rate housing. As used 293.6 in this section, "market rate housing" means housing that has a 293.7 market value that does not exceed 150 percent of the average 293.8 market value of single-family housing in that municipality. 293.9 Subd. 3. [HOUSING REPLACEMENT DISTRICT PLAN.] To establish 293.10 a housing replacement district under this section, an authority 293.11 shall adopt a housing replacement district plan that contains: 293.12 (1) a statement of the objectives and a description of the 293.13 housing replacement projects proposed by the authority for the 293.14 housing replacement district; 293.15 (2) a statement of the housing replacement district plan, 293.16 demonstrating the coordination of that plan with the city's 293.17 comprehensive plan; 293.18 (3) estimates of the following: 293.19 (i) cost of the program, including administrative expenses; 293.20 (ii) sources of revenue to finance or otherwise pay public 293.21 costs; 293.22 (iii) the most recent net tax capacity of taxable real 293.23 property within the housing replacement district; and 293.24 (iv) the estimated captured net tax capacity of the housing 293.25 replacement district at completion; 293.26 (4) statements of the authority's alternate estimates of 293.27 the impact of the housing replacement district on the net tax 293.28 capacities of all taxing jurisdictions in which the housing 293.29 replacement district is located in whole or in part. For 293.30 purposes of one statement, the municipality shall assume that 293.31 the estimated captured net tax capacity would be available to 293.32 the taxing jurisdictions without creation of the housing 293.33 replacement district, and for purposes of the second statement, 293.34 the county shall assume that none of the estimated captured net 293.35 tax capacity would be available to the taxing jurisdictions 293.36 without creation of the housing replacement district; and 294.1 (5) identification of all parcels to be included in the 294.2 district, to the extent known at the time the original housing 294.3 replacement district plan is prepared. At a minimum, the 294.4 parcels that will be included in the housing replacement 294.5 district during its first year must be identified in the 294.6 original housing replacement district plan. If parcels for 294.7 subsequent years are not specifically identified, the original 294.8 housing replacement district plan must include the criteria that 294.9 will be used by the authority to select parcels to be included 294.10 in the later years. 294.11 Subd. 4. [PROCEDURE.] The provisions of section 469.175, 294.12 subdivisions 3, 4, 5, and 6, apply to the establishment and 294.13 operation of the housing replacement districts created under 294.14 this section, except as follows: 294.15 (1) the determination specified in section 469.175, 294.16 subdivision 3, clause (1), is not required; and 294.17 (2) addition of parcels not identified in the original 294.18 housing replacement district plan is not treated as a 294.19 modification of that plan requiring an approval process provided 294.20 that the parcels added are consistent with the criteria 294.21 described in subdivision 3, clause (5). 294.22 Subd. 5. [DURATION LIMITS.] No tax increment may be paid 294.23 to the authority on each parcel in a housing replacement 294.24 district after 15 years from date of receipt by the county of 294.25 the first tax increment from that parcel. 294.26 Subd. 6. [LIMITATION ON USE OF TAX INCREMENTS.] All 294.27 revenues derived from tax increments must be used in accordance 294.28 with the housing replacement district plan. The revenues must 294.29 be used solely to pay the costs of site acquisition, relocation, 294.30 demolition of existing structures, site preparation, and 294.31 pollution abatement on parcels identified in the housing 294.32 replacement district plan, as well as public improvements and 294.33 administrative costs directly related to those parcels. 294.34 Subd. 7. [APPLICATION OF OTHER LAWS.] (a) The provisions 294.35 of section 469.177, subdivisions 1a, and 5 to 10, apply to the 294.36 computation of tax increment for the housing replacement 295.1 districts created under this section. The original local tax 295.2 rate is the rate for the year a parcel is certified for 295.3 inclusion in a housing replacement district. 295.4 (b) References in Minnesota Statutes to tax increment 295.5 financing districts created and tax increments generated under 295.6 sections 469.174 to 469.179, other than references in section 295.7 273.1399, include housing replacement districts and tax 295.8 increments subject to this section, provided that sections 295.9 469.174 to 469.179 apply only to the extent specified in this 295.10 section. 295.11 (c) Laws 1980, chapter 595, section 2, subdivision 2, does 295.12 not apply to a district created under this section. 295.13 Sec. 33. Minnesota Statutes 2000, section 469.1812, 295.14 subdivision 2, is amended to read: 295.15 Subd. 2. [GOVERNING BODY.] "Governing body" means, for a 295.16 city, the city council; for a school district, the school board; 295.17 for a county, the county board; and for a town, theannual295.18meeting of the townboard of supervisors. 295.19[EFFECTIVE DATE.] This section is effective retroactive to 295.20 May 26, 1999. 295.21 Sec. 34. Minnesota Statutes 2000, section 469.1813, 295.22 subdivision 6, is amended to read: 295.23 Subd. 6. [DURATION LIMIT.] (a) A political subdivision may 295.24 grant an abatement for a period no longer than ten years, except 295.25 as provided under paragraph (b). The subdivision may specify in 295.26 the abatement resolution a shorter duration. If the resolution 295.27 does not specify a period of time, the abatement is for eight 295.28 years. If an abatement has been granted to a parcel of property 295.29 and the period of the abatement has expired, the political 295.30 subdivision that granted the abatement may not grant another 295.31 abatement for eight years after the expiration of the first 295.32 abatement. This prohibition does not apply to improvements 295.33 added after and not subject to the first abatement. 295.34 (b) A political subdivision proposing to abate taxes for a 295.35 parcel may request, in writing, that the other political 295.36 subdivisions in which the parcel is located grant an abatement 296.1 for the property. If one of the other political subdivisions 296.2 declines, in writing, to grant an abatement or if 90 days pass 296.3 after receipt of the request to grant an abatement without a 296.4 written response from one of the political subdivisions, the 296.5 duration limit for an abatement for the parcel by the requesting 296.6 political subdivision and any other participating political 296.7 subdivision is increased to 15 years. If the political 296.8 subdivision which declined to grant an abatement later grants an 296.9 abatement for the parcel, the 15-year duration limit is reduced 296.10 by one year for each year that the declining political 296.11 subdivision grants an abatement for the parcel during the period 296.12 of the abatement granted by the requesting political 296.13 subdivision. The duration limit may not be reduced below the 296.14 limit under paragraph (a). 296.15[EFFECTIVE DATE.] This section is effective for abatements 296.16 approved after the day following final enactment. 296.17 Sec. 35. Minnesota Statutes 2000, section 475.58, 296.18 subdivision 1, is amended to read: 296.19 Subdivision 1. [APPROVAL BY ELECTORS; EXCEPTIONS.] 296.20 Obligations authorized by law or charter may be issued by any 296.21 municipality upon obtaining the approval of a majority of the 296.22 electors voting on the question of issuing the obligations, but 296.23 an election shall not be required to authorize obligations 296.24 issued: 296.25 (1) to pay any unpaid judgment against the municipality; 296.26 (2) for refunding obligations; 296.27 (3) for an improvement or improvement program, which 296.28 obligation is payable wholly or partly from the proceeds of 296.29 special assessments levied upon property specially benefited by 296.30 the improvement or by an improvement within the improvement 296.31 program, or of taxes levied upon the increased value of property 296.32 within a district for the development of which the improvement 296.33 is undertaken, including obligations which are the general 296.34 obligations of the municipality, if the municipality is entitled 296.35 to reimbursement in whole or in part from the proceeds of such 296.36 special assessments or taxes and not less than 20 percent of the 297.1 cost of the improvement or the improvement program is to be 297.2 assessed against benefited property or is to be paid from the 297.3 proceeds of federal grant funds or a combination thereof, or is 297.4 estimated to be received from such taxes within the district; 297.5 (4) payable wholly from the income of revenue producing 297.6 conveniences; 297.7 (5) under the provisions of a home rule charter which 297.8 permits the issuance of obligations of the municipality without 297.9 election; 297.10 (6) under the provisions of a law which permits the 297.11 issuance of obligations of a municipality without an election; 297.12 (7) to fund pension or retirement fund liabilities pursuant 297.13 to section 475.52, subdivision 6; 297.14 (8) under a capital improvement plan under section 373.40; 297.15 (9) to fund facilities as provided in subdivision 3; and 297.16 (10) under sections 469.1813 to 469.1815 (property tax 297.17 abatement authority bonds), if the proceeds of the bonds are not 297.18 used for a purpose prohibited under section 469.176, subdivision 297.19 4g, paragraph (b). 297.20[EFFECTIVE DATE.] This section is effective for bonds 297.21 issued or sold after the day following final enactment. 297.22 Sec. 36. Laws 2000, chapter 490, article 11, section 26, 297.23 the effective date, is amended to read: 297.24EFFECTIVE DATE: This section is effective for increments 297.25 spent after July 1, 2000, from districts for which certification 297.26 was requested afterMay 1, 1990June 30, 1982. 297.27[EFFECTIVE DATE.] This section is effective the day 297.28 following final enactment. 297.29 Sec. 37. [AIRPORT IMPACT MITIGATION; DEFINITIONS.] 297.30 Subdivision 1. [APPLICATION.] For the purposes of this 297.31 article, the terms defined in this section have the meanings 297.32 given them. 297.33 Subd. 2. [AIRPORT IMPACT ZONE.] "Airport impact zone" 297.34 means a contiguous or noncontiguous geographic area designated 297.35 by a city and approved by the commissioner as part of a 297.36 mitigation plan under section 38. 298.1 Subd. 3. [CITY.] "City" means the cities of Bloomington, 298.2 Burnsville, Eagan, Inver Grove Heights, Mendota Heights, 298.3 Minneapolis, Richfield, and St. Paul, or any of them. 298.4 Subd. 4. [COMMISSIONER.] "Commissioner" means the 298.5 commissioner of trade and economic development. 298.6 Subd. 5. [COUNCIL.] "Council" means the metropolitan 298.7 council. 298.8 Subd. 6. [DEPARTMENT.] "Department" means the department 298.9 of trade and economic development. 298.10 Subd. 7. [GOVERNING BODY.] "Governing body" means the city 298.11 council of a city. 298.12 Subd. 8. [HOUSING REPLACEMENT ACTIVITIES.] "Housing 298.13 replacement activities" means rehabilitation, acquisition, 298.14 relocation assistance, relocation of existing dwelling units, 298.15 and construction of new dwelling units, for the purpose of 298.16 replacing dwelling units eliminated by airport mitigation 298.17 activities. 298.18 Subd. 9. [IMPACT REPORT.] "Impact report" means a written 298.19 report identifying airport impacts adopted by a city under 298.20 section 38. 298.21 Subd. 10. [MITIGATION FUND.] "Mitigation fund" means the 298.22 airport impact mitigation fund established under section 39. 298.23 Subd. 11. [MITIGATION PLAN.] "Mitigation plan" means a 298.24 plan for airport impact mitigation developed by a city and 298.25 approved by the commissioner under section 38. 298.26 Subd. 12. [OBLIGATION.] "Obligation" has the meaning given 298.27 in Minnesota Statutes, section 475.51, subdivision 3. The term 298.28 includes obligations issued to refund prior obligations issued 298.29 under this article. 298.30 Subd. 13. [SCHOOL DISTRICT.] "School district" means a 298.31 school district whose jurisdiction includes all or any portion 298.32 of a city. 298.33 Sec. 38. [AIRPORT IMPACT MITIGATION PLANNING.] 298.34 Subdivision 1. [IMPACT REPORT.] A city may study and 298.35 identify airport impacts and the scope of those impacts on the 298.36 city. At the conclusion of an impact study, a city must adopt a 299.1 report of the impacts on the city. In studying airport impacts 299.2 and preparing a report, a city must take into account airport 299.3 noise impacts and additional environmental, transportation, and 299.4 economic impacts associated with expansion of the 299.5 Minneapolis-St. Paul International Airport. A city must also 299.6 consider and incorporate the overhead noise guidelines 299.7 established by the Federal Aviation Administration and 299.8 recommendations of the Low Frequency Noise Policy Committee 299.9 concerning noise impacts. 299.10 Subd. 2. [MITIGATION PLAN.] (a) After adopting an airport 299.11 impact report, a city must develop an airport mitigation plan 299.12 for an airport impact zone in the city. In developing the 299.13 mitigation plan, a city must seek to determine the most 299.14 effective measures for mitigating the impacts identified in the 299.15 impact report. A city may consider any measures for mitigating 299.16 airport impacts including, but not limited to, noise insulation 299.17 of residential and commercial buildings, land use conversion, 299.18 development of housing to replace units lost through mitigation 299.19 activities, and property value assurance programs. The 299.20 mitigation plan must include: 299.21 (1) designated boundaries of the airport impact zone; 299.22 (2) a description of recommended impact mitigation 299.23 measures; 299.24 (3) whether the plan provides for conversion of residential 299.25 land use or a description of proposed housing replacement 299.26 activities; 299.27 (4) estimates of costs of the recommended mitigation 299.28 measures and possible financing sources; 299.29 (5) an analysis of the feasibility of property tax 299.30 abatement under Minnesota Statutes, sections 469.1813 to 299.31 469.1815 as a financing source; and 299.32 (6) the estimated amount of obligations, if any, to be 299.33 issued under this article, including a description of the 299.34 proposed security for the obligations and whether the city 299.35 requests credit enhancement by the council as provided in 299.36 section 40, subdivision 2. 300.1 (b) Before initial approval of a mitigation plan, a city 300.2 must conduct a public hearing after publishing at least ten days 300.3 before the hearing a notice in a newspaper of general 300.4 circulation in the city. The hearing notice must state that the 300.5 mitigation plan and the mitigation report are available for 300.6 review in the administrative offices of the city. After initial 300.7 approval of the mitigation plan by the governing body, the city 300.8 must submit the mitigation plan and the mitigation report to the 300.9 commissioner for approval and must also submit copies to the 300.10 council and the metropolitan airports commission for review and 300.11 comment. Not more than 60 days after receipt of the city's 300.12 submission, the commissioner must approve, disapprove, or 300.13 otherwise comment on the mitigation plan. Failure by the 300.14 commissioner to approve or comment within 60 days is considered 300.15 approval of the mitigation plan. An action described in a 300.16 mitigation plan must not be financed by the mitigation fund or 300.17 an airport impact district until the mitigation plan has been 300.18 approved by the commissioner and then approved by the governing 300.19 body. 300.20 (c) Before approving any mitigation plan, the commissioner 300.21 must establish criteria for evaluating proposed airport impact 300.22 zones, airport impact districts, and mitigation measures. The 300.23 commissioner must consult with the cities, the council, and the 300.24 metropolitan airports commission in developing the criteria. 300.25 The commissioner must approve final criteria by December 31, 300.26 2001. Any mitigation plan approved under this article must be 300.27 consistent with the criteria established under this paragraph. 300.28 (d) If the mitigation plan, or any amendment under 300.29 paragraph (e), clause (3), includes credit enhancement by the 300.30 council as provided in section 40, subdivision 2, the mitigation 300.31 plan must also be approved by the council before issuance of 300.32 bonds secured under section 40, subdivision 2. 300.33 (e) A mitigation plan may be changed after the notice, 300.34 hearing, and approvals required of the original mitigation 300.35 plan. A change is permitted only to: 300.36 (1) increase the total estimated cost of mitigation 301.1 activities; 301.2 (2) increase the total estimated amount of obligations to 301.3 be issued; 301.4 (3) secure any obligations by the pledge described in 301.5 section 40, subdivision 2, if the pledge was not included in the 301.6 original plan; 301.7 (4) expand the boundaries of an airport impact zone; 301.8 (5) create or expand the boundaries of an airport impact 301.9 district; or 301.10 (6) add mitigation activities beyond the scope of 301.11 activities described in the original plan. 301.12 (f) Expenditures to implement a mitigation plan are not 301.13 considered a business subsidy under Minnesota Statutes, sections 301.14 116J.993 to 116J.995. 301.15 Sec. 39. [AIRPORT IMPACT MITIGATION FUND.] 301.16 Subdivision 1. [FUND CREATED; SOURCES.] The airport impact 301.17 mitigation fund is established in the state treasury. The 301.18 mitigation fund is administered by the commissioner for the 301.19 purposes described in this section. 301.20 Subd. 2. [RENTAL MOTOR VEHICLE TAX PROCEEDS.] The revenue 301.21 derived from the fee imposed under Minnesota Statutes, section 301.22 297A.64, subdivision 2a, is appropriated annually to the 301.23 mitigation fund beginning in the fiscal year ending in 2006 and 301.24 ending in the fiscal year ending in 2026. 301.25 Subd. 3. [USE OF REVENUES.] Amounts in the mitigation fund 301.26 may be spent only for the following purposes: 301.27 (1) to pay principal of, interest on, and redemption 301.28 premium, if any, on obligations issued by a city under this 301.29 article; 301.30 (2) to pay or reimburse a city for costs incurred to 301.31 implement a mitigation plan, including, without limit, costs of 301.32 preparing the impact report and mitigation plan; 301.33 (3) to pay a school district to mitigate decreases in 301.34 student population created by mitigation activities of a city 301.35 under the city's mitigation plan; and 301.36 (4) by the department to pay the costs of administering the 302.1 mitigation fund and related activities of the department under 302.2 this article. 302.3 Subd. 4. [PAYMENT PROVISIONS.] (a) Before disbursing any 302.4 amounts from the mitigation fund, the commissioner must 302.5 establish criteria for selecting activities identified in 302.6 subdivision 3 to be financed from the fund. The commissioner 302.7 must consult with the cities, the school districts, the council 302.8 and the metropolitan airports commission in developing the 302.9 criteria. The commissioner must approve final criteria by 302.10 December 31, 2001. The criteria must give priority to plans 302.11 which propose assisting the metropolitan airports commission in 302.12 meeting a goal of extending the soundproofing program from the 302.13 current 65 DNL to the 60 DNL by 2010 and shall take into account: 302.14 (1) the severity of airport impacts among the cities and 302.15 school districts; 302.16 (2) the type of mitigation measures required in order to 302.17 address the impacts; 302.18 (3) the cost of impact mitigation activities identified in 302.19 the mitigation plans; 302.20 (4) the amount of obligations to be issued under this act 302.21 as identified in the mitigation plans; and 302.22 (5) the amount of other revenues available to pay the costs 302.23 identified in subdivision 3. 302.24 (b) The commissioner may establish procedures for 302.25 administration of the mitigation fund as necessary, including 302.26 without limitation a process for applications, disbursement, and 302.27 reporting of expenditures. 302.28 Subd. 5. [TERMINATION OF MITIGATION FUND.] The mitigation 302.29 fund ends on the earlier of: 302.30 (1) the date by which all cities and school districts have 302.31 notified the commissioner that all costs payable from the 302.32 mitigation fund under this article have been paid; or 302.33 (2) the end of the fiscal year ending in 2030. 302.34 The balance of amounts in the mitigation fund on its termination 302.35 are credited to the state general fund. 302.36 Sec. 40. [AIRPORT IMPACT MITIGATION BONDS; SECURITY.] 303.1 Subdivision 1. [TERMS.] (a) A city may issue obligations 303.2 secured by: 303.3 (1) abatements; 303.4 (2) amounts disbursed from the airport mitigation fund; 303.5 (3) any other revenues available to the city under law; or 303.6 (4) any combination of revenue described in clauses (1) to 303.7 (3). 303.8 (b) The proceeds of obligations must be used to pay or 303.9 reimburse any costs to implement a mitigation plan, including, 303.10 without limit, costs of preparing the impact report and the 303.11 mitigation plan. The governing body may provide by resolution 303.12 that the obligations are additionally secured by the full faith 303.13 and credit of the city. Notwithstanding any other law or 303.14 charter provision, voter approval is not required and net debt 303.15 limits do not apply to obligations issued under this section. 303.16 Subd. 2. [METROPOLITAN AREA CREDIT ENHANCEMENT 303.17 PROGRAM.] (a) The council may establish an airport impact 303.18 mitigation bond credit enhancement program as provided in this 303.19 section. The council may pledge its full faith and credit and 303.20 taxing powers to obligations issued under this article if: 303.21 (1) the city so requests and the commissioner and the 303.22 council approves that pledge as part of the city's mitigation 303.23 plan; and 303.24 (2) the council finds that revenues pledged for payment of 303.25 the obligations will produce, as estimated at the time of the 303.26 pledge, at least 125 percent of the principal and interest due 303.27 on the obligations. 303.28 (b) The pledge must be made by resolution of the council. 303.29 Voter approval of obligations secured by the pledge described in 303.30 this subdivision is not required and net debt limits do not 303.31 apply. 303.32 (c) Before pledging its full faith and credit, the council 303.33 must establish criteria for approving requests for credit 303.34 enhancement under this section. The council must establish 303.35 criteria in consultation with the cities, the commissioner, and 303.36 the metropolitan airports commission. The criteria must set 304.1 forth priorities for credit enhancement that are consistent with 304.2 the priorities established by the commissioner for disbursement 304.3 from the mitigation fund under section 39 and may contain limits 304.4 on the total amount of obligations that may be credit enhanced 304.5 under this subdivision. 304.6 (d) If there is a deficiency in revenues pledged to 304.7 obligations credit enhanced under this subdivision, the council 304.8 must levy a tax against all taxable property in the metropolitan 304.9 area and advance the proceeds of the levy to the city for 304.10 deposit in the debt service fund for the obligations. The city 304.11 must reimburse the council for the advance to the extent the 304.12 deficient revenues are later collected. 304.13 (e) Taxes levied by the council because of credit 304.14 enhancement under this subdivision do not affect the amount or 304.15 rate of taxes that may be levied by the council for other 304.16 purposes and are not subject to limit as to rate or amount. 304.17 (f) The council and each city that participates in the 304.18 credit enhancement program may enter into agreements they 304.19 determine to be necessary to implement the credit enhancement 304.20 program. The agreements may extend over any period, 304.21 notwithstanding any law to the contrary. 304.22 Subd. 3. [APPLICABILITY.] This section applies in the 304.23 counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 304.24 Washington. 304.25 Sec. 41. [AURORA; TAX INCREMENT DISTRICT EXTENSION.] 304.26 Subdivision 1. [DISTRICT EXTENSION.] Notwithstanding the 304.27 provisions of Minnesota Statutes, section 469.176, subdivision 304.28 1c, upon approval of the governing body of the city of Aurora by 304.29 resolution, the housing and redevelopment authority in and for 304.30 the city of Aurora may extend to December 31, 2009, the duration 304.31 of its downtown tax increment financing district originally 304.32 certified in 1978. 304.33 Subd. 2. [SPECIAL RULES.] Increments permitted to be paid 304.34 to and retained by the authority by subdivision 1 may only be 304.35 used to: 304.36 (1) pay or defease bonds or other contractual obligations; 305.1 (2) fund public redevelopment costs within the 305.2 redevelopment project or costs provided for in the tax increment 305.3 financing plan; or 305.4 (3) pay or defease bonds issued to refund the bonds. 305.5[EFFECTIVE DATE.] This section is effective the day after 305.6 compliance with Minnesota Statutes, sections 469.1782, 305.7 subdivision 2, and 645.021, subdivision 2. 305.8 Sec. 42. [CITY OF BROOKLYN PARK REDEVELOPMENT; 305.9 DEFINITIONS.] 305.10 Subdivision 1. [AUTHORITY.] "Authority" means the Brooklyn 305.11 Park economic development authority. 305.12 Subd. 2. [CITY.] "City" means the city of Brooklyn Park, 305.13 Minnesota. 305.14 Subd. 3. [CITY COUNCIL.] "City council" means the 305.15 governing body of the city of Brooklyn Park. 305.16 Subd. 4. [ENHANCEMENT DISTRICT.] "Enhancement district" 305.17 means either of the authority tax increment districts numbered 305.18 15 and 18. 305.19 Subd. 5. [CREEK.] "Creek" means a stream that flows 305.20 through the boundaries of the city and, as of the effective date 305.21 of sections 42 and 43, is regulated by a joint powers 305.22 organization of cities, subject to the jurisdiction of the 305.23 department of natural resources, and contained on Federal 305.24 Emergency Management Association mapping. 305.25 Subd. 6. [CREEK IMPROVEMENT COSTS.] "Creek improvement 305.26 costs" means all costs related to the planning, financing, and 305.27 implementation of creek improvements as follows: 305.28 (1) water quality enhancement, including but not limited to 305.29 the construction of storm water runoff and retention facilities, 305.30 box culverts, nonpoint source water quality treatment ponds, and 305.31 aeration facilities; 305.32 (2) creek bank stabilization; 305.33 (3) wetland creation and restoration; 305.34 (4) aquatic habitat creation and restoration; 305.35 (5) creation and restoration of upland habitat for 305.36 terrestrial species, including but not limited to tree and other 306.1 plantings; 306.2 (6) the provision of side channel ponds, shallow well 306.3 structures, and drop structures; 306.4 (7) alteration and modification of channels and channel 306.5 beds; 306.6 (8) dam reconstruction; and 306.7 (9) low water crossings. 306.8 Costs described in clauses (1), (3), (4), (6), and (9) 306.9 constitute creek improvement costs only if the improvements are 306.10 contained within a qualified redevelopment district. Costs 306.11 described in clauses (2), (5), (7), and (8) constitute creek 306.12 improvement costs even if incurred outside a qualified 306.13 redevelopment district, if the costs are within the project area 306.14 and made with respect to improvements upstream from the 306.15 qualified redevelopment district. Creek improvement costs 306.16 include the cost of acquiring interests in real property 306.17 reasonably necessary to carry out the activities described in 306.18 this subdivision. 306.19 Subd. 7. [PROJECT AREA.] "Project area" means the 306.20 geographic area established pursuant to Minnesota Statutes, 306.21 section 469.028, to which the project plan applies and within 306.22 which the qualified redevelopment district is located. 306.23 Subd. 8. [PROJECT PLAN.] "Project plan" means the village 306.24 master plan/Shingle Creek corridor plan. 306.25 Subd. 9. [QUALIFIED COSTS.] "Qualified costs" means creek 306.26 improvement costs and other costs of a qualified redevelopment 306.27 district authorized by Minnesota Statutes, section 469.176, 306.28 subdivision 4. Notwithstanding the provisions of Minnesota 306.29 Statutes, section 469.176, subdivision 4g, qualified costs 306.30 include assistance for a recreation facility to be owned by a 306.31 private, nonprofit entity and located within the district. 306.32 Subd. 10. [QUALIFIED REDEVELOPMENT DISTRICT.] "Qualified 306.33 redevelopment district" means a tax increment financing 306.34 redevelopment district, as defined in Minnesota Statutes, 306.35 section 469.174, subdivision 10, paragraph (a), clause (1), the 306.36 boundaries of which are as established on May 22, 2000, and that 307.1 is located within a project area which, as of May 22, 2000, 307.2 contained the following: 307.3 (1) at least 100 acres; 307.4 (2) a creek; 307.5 (3) at least 100,000 square feet of unoccupied commercial 307.6 space; 307.7 (4) commercial property, at least 25 percent of which, by 307.8 acreage, is proposed by the project plan to be down-zoned 307.9 through conversion to housing, open space, and tax-exempt uses; 307.10 and 307.11 (5) at least 700 multifamily rental housing units, all of 307.12 which have rent structures that are affordable to persons and 307.13 families of annual income at or below 60 percent of the 307.14 Minneapolis-St. Paul median income, as determined by the United 307.15 States Department of Housing and Urban Development. 307.16[EFFECTIVE DATE.] This section is effective the day 307.17 following final enactment. 307.18 Sec. 43. [BROOKLYN PARK; REDEVELOPMENT DISTRICT.] 307.19 Subdivision 1. [AUTHORITY GRANTED.] Notwithstanding 307.20 anything to the contrary in Minnesota Statutes, sections 469.174 307.21 to 469.178, the authority may (1) expend tax increment derived 307.22 from a qualified redevelopment district for qualified costs, and 307.23 (2) pledge or expend tax increment derived from enhancement 307.24 districts, to the extent not otherwise obligated to the 307.25 enhancement districts, for the qualified costs of a qualified 307.26 redevelopment district. 307.27 Subd. 2. [LIMITATIONS.] (a) At least 30 percent of the tax 307.28 increment pledged or transferred to a qualified redevelopment 307.29 district from the enhancement districts must be utilized for 307.30 creek improvement costs. 307.31 (b) Except as otherwise described in section 42, 307.32 subdivision 6, tax increment derived from a qualified 307.33 redevelopment district, or derived from an enhancement district 307.34 and pledged or transferred to a qualified redevelopment 307.35 district, must not be expended outside of the qualified 307.36 redevelopment district boundaries. 308.1 (c) Tax increment derived from the enhancement districts 308.2 and pledged or transferred to a qualified redevelopment district 308.3 must be used exclusively for qualified costs of the qualified 308.4 redevelopment district or must be returned to the county auditor 308.5 for distribution to the municipality, county, and school 308.6 district in direct proportion to their respective local tax 308.7 rates. 308.8 (d) The boundaries of a qualified redevelopment district or 308.9 of the enhancement districts must not be modified following the 308.10 effective date of this section. 308.11 Subd. 3. [LOCAL CONTRIBUTION.] With respect to any 308.12 enhancement district to which Minnesota Statutes, section 308.13 273.1399, applies, and notwithstanding anything to the contrary 308.14 in Minnesota Statutes, section 273.1399, in determining a local 308.15 contribution for a qualified redevelopment district and the 308.16 enhancement district under Minnesota Statutes, section 273.1399, 308.17 subdivision 6, paragraph (d), tax increment derived from the 308.18 enhancement district that is pledged or transferred to a 308.19 qualified redevelopment district must be (1) subtracted from the 308.20 tax increment derived from the enhancement district, and deemed 308.21 as not derived therefrom, and added to the tax increment derived 308.22 from the qualified redevelopment district, and deemed as derived 308.23 therefrom, and (2) treated as tax increment derived from the 308.24 qualified redevelopment district for all purposes including the 308.25 listed percentage of qualifying local contribution. Any 308.26 qualifying local contributions related to a qualified 308.27 redevelopment district must be counted toward satisfaction of 308.28 the local contribution requirement for the qualified 308.29 redevelopment district, including tax increment deemed derived 308.30 from the qualified redevelopment district by operation of this 308.31 section. A local contribution is not required with respect to 308.32 the enhancement district tax increment returned to the county 308.33 auditor as provided in subdivision 2, paragraph (c). 308.34[EFFECTIVE DATE.] This section is effective the day 308.35 following final enactment. 308.36 Sec. 44. [CITY OF DULUTH; EXPENDITURE OF TAX INCREMENTS.] 309.1 Subdivision 1. [EXPENDITURES AUTHORIZED.] Notwithstanding 309.2 Minnesota Statutes, section 469.1764, the Duluth economic 309.3 development authority may expend up to $3,000,000 of tax 309.4 increments collected from development district No. 3 on 309.5 activities located outside the geographic boundaries of the 309.6 district, subject to the conditions in this section. 309.7 Subd. 2. [LOCATION OF EXPENDITURES.] Tax increments must 309.8 be spent within the area bounded by the following described 309.9 lines: 309.10 (1) to the north by a line described as follows: beginning 309.11 at the intersection of the center line of 29th Avenue West and 309.12 the southerly line of West Michigan Street, thence southwesterly 309.13 along the southerly line of West Michigan Street to the east 309.14 limit of the DM&IR railway right-of-way; thence northwesterly 309.15 along the easterly limit of the DM&IR railway right-of-way to 309.16 the centerline of West Superior Street to its intersection with 309.17 the centerline of Jenswold Street; thence southwesterly along 309.18 the centerline of Jenswold Street to its intersection with the 309.19 centerline of the Northern Pacific Railway Company's main line 309.20 to St. Paul; thence southwesterly along the centerline of the 309.21 Northern Pacific Railway Company's main line to St. Paul to its 309.22 intersection with the extended centerline of 37th Avenue West; 309.23 (2) to the west by a line described as follows: beginning 309.24 at the intersection of the centerline of the Northern Pacific 309.25 Railway Company's main line to St. Paul and the extended 309.26 centerline of 37th Avenue West; then southeasterly along said 309.27 extended centerline of 37th Avenue West to its intersection with 309.28 the centerline of Interstate highway 35; 309.29 (3) to the south by the centerline of Interstate highway 309.30 35; and 309.31 (4) to the east by the centerline of 29th Avenue West. 309.32 Subd. 3. [LIMITATIONS ON USE.] All expenditures of tax 309.33 increments permitted by this section must meet the requirements 309.34 of Minnesota Statutes, section 469.176, subdivision 4j. 309.35 Subd. 4. [LOCAL CONTRIBUTION.] The authority must by 309.36 resolution irrevocably elect to make local contributions with 310.1 respect to the district under Minnesota Statutes, section 310.2 273.1399, subdivision 6, paragraph (d), clause (1)(B), except 310.3 that the required percentage applies to the total annual 310.4 expenditures made by the authority in the area described in 310.5 subdivision 2. The authority must make the election under this 310.6 paragraph by August 1, 2001, and must notify the commissioner of 310.7 revenue of the election by September 1, 2001. If the authority 310.8 fails to make the required local contribution in any year, the 310.9 state aid reduction under Minnesota Statutes, section 273.1399, 310.10 applies to the district, except that the "qualifying net tax 310.11 capacity" is the net tax capacity attributable to the total 310.12 annual tax increment expenditures made by the authority in the 310.13 area described in subdivision 2. 310.14[EFFECTIVE DATE.] This section is effective June 1, 2001. 310.15 Sec. 45. [MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY.] 310.16 Subdivision 1. [TIME LIMIT FOR TAX INCREMENT EXPENDITURE 310.17 EXTENDED.] Notwithstanding Minnesota Statutes, section 469.176, 310.18 subdivision 1c, revenue derived from tax increments from tax 310.19 increment financing districts created prior to August 1, 1979, 310.20 may be expended for neighborhood revitalization purposes after 310.21 April 1, 2001, under the authority in Minnesota Statutes, 310.22 section 469.1831, and Laws 1990, chapter 604, article 7, section 310.23 29, as amended by Laws 1991, chapter 291, article 10, section 310.24 2. This section applies only to revenues derived from tax 310.25 increments received on or before April 1, 2001. 310.26[EFFECTIVE DATE.] This section is effective as of April 1, 310.27 2001, after compliance with Minnesota Statutes, section 645.021, 310.28 subdivision 3. 310.29 Sec. 46. [GAYLORD; TAX INCREMENT FINANCING DISTRICT 310.30 EXTENSION.] 310.31 Notwithstanding the provisions of Minnesota Statutes, 310.32 section 469.176, subdivision 1c, or any other law, the city of 310.33 Gaylord may, by resolution, extend the duration of a tax 310.34 increment financing district originally certified in 1978. If 310.35 the city extends the district, the district is deemed to 310.36 continue to be in effect, beginning for taxes payable in 2002, 311.1 and notwithstanding the decertification of the district for 311.2 taxes payable in 2001. The city may not extend the duration 311.3 beyond December 31, 2009. Notwithstanding the provisions of 311.4 Minnesota Statutes, section 469.176, subdivision 1c, the city 311.5 may spend increments from the district on project costs other 311.6 than bonds issued before April 1, 1990. 311.7[EFFECTIVE DATE.] This section is effective upon completion 311.8 with the requirements of Minnesota Statutes, sections 469.1782 311.9 and 645.021. 311.10 Sec. 47. [HOLMAN DECREE HOUSING.] 311.11 To implement a federal court order or decree relating to 311.12 the provision of low-rent public housing finance, in whole or in 311.13 part, with federal financial assistance under section 5 of the 311.14 United States Housing Act, or any successor legislation, the 311.15 Minneapolis public housing authority or the metropolitan 311.16 council, acting under the powers of Minnesota Statutes, sections 311.17 469.001 to 469.047, may enter a cooperation agreement with the 311.18 governing body of any municipality or county within the 311.19 metropolitan area, as defined in Minnesota Statutes, section 311.20 473.121, subdivision 2, to provide exemption from all real and 311.21 personal taxes levied or imposed by the state, city, county, or 311.22 other political subdivision, for which the Minneapolis public 311.23 housing authority or the metropolitan council shall make, or 311.24 cause to be made, payments in lieu of taxes as provided under 311.25 Minnesota Statutes, section 469.040. This exemption and 311.26 obligation to make payments in lieu of taxes continues until the 311.27 housing is no longer subject to the provisions of section 5 of 311.28 the United States Housing Act, or any successor legislation. 311.29[EFFECTIVE DATE.] This section is effective with respect to 311.30 any cooperation agreement entered into on or after November 1, 311.31 1997. Any owner of low-rent public housing acquired and 311.32 renovated or constructed under a cooperation agreement under 311.33 this section may apply for abatement of the real or personal 311.34 property taxes under Minnesota Statutes, section 375.192, 311.35 notwithstanding the time limitation for filing application under 311.36 section 375.192. This section applies in the counties of Anoka, 312.1 Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 312.2 Sec. 48. [CITY OF HIBBING; TAX INCREMENT FINANCING 312.3 DISTRICT.] 312.4 Subdivision 1. [AUTHORIZATION.] The governing body of the 312.5 city of Hibbing may create a soils condition tax increment 312.6 financing district as provided in this section. The city or its 312.7 economic development authority may be the "authority" for the 312.8 purposes of Minnesota Statutes, sections 469.174 to 469.179. 312.9 Subd. 2. [SPECIAL RULES.] (a) The district established 312.10 under subdivision 1 is subject to the provisions of Minnesota 312.11 Statutes, sections 469.174 to 469.179, except as provided in 312.12 this subdivision. 312.13 (b) The district may consist of all or any portion of the 312.14 area bounded on the north by Ironworld and the extension of 312.15 county truck highway No. 5; on the west by the eastern right-of- 312.16 way of state highway No. 169; on the south by Grace Road; and on 312.17 the east by a line 1,000 yards east of the eastern right-of-way 312.18 of state highway No. 169. 312.19 (c) Minnesota Statutes, sections 469.174, subdivision 19; 312.20 469.176, subdivision 4b; and 469.1782, subdivision 1; do not 312.21 apply to this district. 312.22 (d) Upon approval of the tax increment financing plan, the 312.23 governing body of the city of Hibbing must find that the present 312.24 value of the projected cost to level or remove mining overburden 312.25 on property within the district equals or exceeds the present 312.26 value of the projected tax increments for the maximum duration 312.27 of the district permitted by the plan. 312.28 (e) Notwithstanding the provisions of Minnesota Statutes, 312.29 section 469.1763, increments from the district established under 312.30 this section may only be expended to finance the cost of (1) 312.31 grading, excavation, and related site preparation activities 312.32 within the district and (2) administrative expenses. 312.33 (f) Notwithstanding the provisions of Minnesota Statutes, 312.34 section 469.176, subdivision 1b, no tax increment may be paid to 312.35 the authority after 25 years after receipt by the authority of 312.36 the first increment for the district. 313.1 (g) The improvements to be constructed in the district may 313.2 include a privately-owned racetrack, notwithstanding the 313.3 provisions of section 469.176, subdivision 4g, clause (a). 313.4[EFFECTIVE DATE.] This section is effective upon compliance 313.5 with Minnesota Statutes, sections 469.1782, subdivision 2, and 313.6 645.021, subdivision 3. 313.7 Sec. 49. [MUNICIPAL PLEDGES OF TAX AND TAX INCREMENT.] 313.8 Subdivision 1. [CITY OF HIBBING.] The city of Hibbing may 313.9 pledge proceeds of the tax received by the city under Minnesota 313.10 Statutes, section 298.28, subdivision 2, and any tax increments 313.11 received from the district created under section 48, to pay debt 313.12 service on any obligations issued by the city or by the 313.13 commissioner of iron range resources and rehabilitation. The 313.14 proceeds of bonds that are allocable to pledged tax proceeds 313.15 must be used to pay costs that are authorized expenditures of 313.16 tax proceeds under Minnesota Statutes, section 298.28, 313.17 subdivision 2, and the proceeds of bonds that are allocable to 313.18 tax increments from the district created under section 48 must 313.19 be used to pay costs that are authorized expenditures of tax 313.20 increment under section 48. Voter approval of obligations 313.21 secured by any pledge described in this section is not required 313.22 and net debt limits do not apply. This section supplements any 313.23 other authority of the city under law to expend or pledge the 313.24 tax and tax increments described in this section. 313.25 Subd. 2. [CITY OF CHISHOLM AND BALKAN TOWNSHIP.] The city 313.26 of Chisholm and the township of Balkan, county of St. Louis, may 313.27 each pledge proceeds of the tax received by the city or the 313.28 township under Minnesota Statutes, section 298.28, subdivision 313.29 2, to pay debt service on any obligations issued by the city of 313.30 Hibbing or by the commissioner of iron range resources and 313.31 rehabilitation, as described in subdivision 1. The proceeds of 313.32 bonds that are allocable to pledged tax proceeds of the city of 313.33 Chisholm or the township of Balkan must be used to pay costs 313.34 that are authorized expenditures of tax proceeds under Minnesota 313.35 Statutes, section 298.28, subdivision 2. Voter approval of the 313.36 pledge or of obligations secured by any pledge described in this 314.1 section is not required and net debt limits do not apply. This 314.2 section supplements any other authority of the city or the 314.3 township under law to expend or pledge the tax described in this 314.4 section. 314.5[EFFECTIVE DATE.] This section is effective for the city of 314.6 Chisholm and Balkan township upon compliance by each with 314.7 Minnesota Statutes, section 645.021, subdivision 3. 314.8 Sec. 50. [CITY OF INVER GROVE HEIGHTS; LOCAL CONTRIBUTION 314.9 ELECTION.] 314.10 Notwithstanding the provisions of Minnesota Statutes, 314.11 section 273.1399, or any other law, the city of Inver Grove 314.12 Heights, by resolution approved by its city council, may at any 314.13 time elect to make a qualifying local contribution in accordance 314.14 with Minnesota Statutes, section 273.1399, subdivision 6, 314.15 paragraph (d), with respect to designated parcels within tax 314.16 increment financing district No. 4-1 of the city. The election 314.17 must be filed in the offices of the county auditor and the 314.18 commissioner of revenue. If the city elects to make a 314.19 qualifying local contribution under this section, (i) the 314.20 required qualifying contribution under Minnesota Statutes, 314.21 section 273.1399, subdivision 6, paragraph (d), must be 314.22 determined by reference to the tax increment derived from the 314.23 designated parcels in the district from and after the date of 314.24 the election; and (ii) the qualifying captured net tax capacity 314.25 of the district for purposes of Minnesota Statutes, section 314.26 273.1399, must exclude the captured net tax capacity 314.27 attributable to the designated parcels. Once an election is 314.28 made under this section it must not be revoked. 314.29[EFFECTIVE DATE.] This section is effective the day after 314.30 approval by the governing body of the city of Inver Grove 314.31 Heights and compliance with Minnesota Statutes, section 645.021, 314.32 subdivision 3. 314.33 Sec. 51. [CITY OF MEDFORD; ECONOMIC DEVELOPMENT 314.34 DISTRICTS.] 314.35 For the purposes of Minnesota Statutes, section 469.174, 314.36 subdivision 27, the city of Medford is deemed to be a small city 315.1 notwithstanding its location within ten miles of a city with a 315.2 population of 10,000 or more. 315.3[EFFECTIVE DATE.] This section is effective upon approval 315.4 by the governing body of the city of Medford and compliance with 315.5 the requirements of Minnesota Statutes, section 645.021, 315.6 subdivision 3, and applies to requests for certification of tax 315.7 increment financing districts or additions of new area to tax 315.8 increment financing districts after the day of final enactment. 315.9 Sec. 52. [CITY OF NORTH ST. PAUL; TAX INCREMENT FINANCING 315.10 GRANT.] 315.11 Notwithstanding Laws 1997, chapter 231, article 1, sections 315.12 19 and 22, as amended by Laws 1997, First Special Session 315.13 chapter 5, section 36, Laws 1999, chapter 243, article 10, 315.14 sections 16, 17, 27, and 28, and Laws 2000, chapter 490, article 315.15 11, section 36, the commissioner of revenue shall pay to the 315.16 city of North St. Paul the amount of $12,800 as a tax increment 315.17 financing grant provided for under those laws. This amount 315.18 compensates the city for the aggregate amount of the calendar 315.19 year 1999 deficits in the tax increment financing districts 315.20 within the city, as determined under the laws cited in this 315.21 section using the accrual method of accounting. The amount 315.22 authorized to be paid under this section for the calendar year 315.23 1999 tax increment financing deficits may not also be paid under 315.24 any other provision of law. The commissioner shall pay the 315.25 amount authorized under this section to the city by warrant 315.26 issued on or before 60 days after the enactment of this 315.27 section. The warrant must be drawn on the state treasury from 315.28 the appropriations made in Laws 1997, chapter 231, article 1, 315.29 section 19, and Laws 1999, chapter 243, article 10, section 27. 315.30[EFFECTIVE DATE.] This section is effective the day 315.31 following final enactment without local approval. 315.32 Sec. 53. [CITY OF PARK RAPIDS; EXTENSION OF TIME FOR 315.33 ACTIVITY IN A TAX INCREMENT FINANCING DISTRICT.] 315.34 The requirement in Minnesota Statutes, section 469.1763, 315.35 subdivision 3, that activities must be undertaken within a 315.36 five-year period from the date of certification of a tax 316.1 increment financing district must be considered to be met in the 316.2 case of redevelopment district No. 4 in the city of Park Rapids 316.3 if the activities are undertaken within six years from the date 316.4 of certification of the district. 316.5[EFFECTIVE DATE.] This section is effective upon approval 316.6 by the governing body of the city of Park Rapids and compliance 316.7 with Minnesota Statutes, section 645.021, subdivision 3. 316.8 Sec. 54. [ST. LOUIS PARK; TAX INCREMENT FINANCING 316.9 DISTRICTS LOCAL CONTRIBUTIONS.] 316.10 Subdivision 1. [LOCAL CONTRIBUTIONS AUTHORIZED.] 316.11 Notwithstanding the provisions of Laws 1995, chapter 264, 316.12 article 5, section 36; Laws 1996, chapter 464, article 1, 316.13 section 11; and Minnesota Statutes, section 469.1782, 316.14 subdivision 1, the city of St. Louis Park may elect to make 316.15 local contributions with respect to the Excelsior Boulevard 316.16 redevelopment project and the Oak Park Village tax increment 316.17 financing districts under Minnesota Statutes, section 273.1399, 316.18 subdivision 6, paragraph (d), clause (1), item (B), in lieu of 316.19 the state aid reductions, if the following conditions are 316.20 satisfied: 316.21 (1) the city makes an irrevocable election to make local 316.22 contributions with respect to the identified districts by August 316.23 1, 2001; and 316.24 (2) the city notifies the commissioner of revenue of the 316.25 election by September 1, 2001. 316.26 Subd. 2. [QUALIFYING CONTRIBUTIONS.] If the city makes the 316.27 election described in subdivision 1, contributions made by the 316.28 city or its economic development authority at any time after 316.29 January 1, 2001, and that otherwise qualify as local 316.30 contributions under Minnesota Statutes, section 273.1399, 316.31 subdivision 6, paragraph (d), qualify as local contributions for 316.32 the purposes of this section. 316.33[EFFECTIVE DATE.] This section is effective upon local 316.34 approval in compliance with the requirements of Minnesota 316.35 Statutes, section 645.021. 316.36 Sec. 55. [CITY OF ST. PAUL; HOUSING TAX INCREMENT 317.1 FINANCING DISTRICT.] 317.2 The governing body of the housing and redevelopment 317.3 authority of the city of St. Paul may create a tax increment 317.4 financing district as provided in this section for a development 317.5 containing owner-occupied residential units. 317.6 Notwithstanding the income requirements in Minnesota 317.7 Statutes, section 469.1761, subdivision 2, a tax increment 317.8 financing district located at Osceola-St. Clair connector, 300 317.9 Osceola Avenue in the city of St. Paul, is considered a housing 317.10 district under Minnesota Statutes, sections 469.174 to 469.179, 317.11 if at least 20 percent of the residential units in the project 317.12 are initially purchased and occupied by persons at or below 80 317.13 percent of the area median gross income, and the remaining units 317.14 in the project are initially purchased and occupied by persons 317.15 at or below 125 percent of the area median gross income. 317.16[EFFECTIVE DATE.] This section is effective upon approval 317.17 by the governing body of the city of St. Paul, and compliance 317.18 with Minnesota Statutes, section 645.021, subdivision 3. 317.19 Sec. 56. [ST. PAUL; TAX INCREMENT FINANCING.] 317.20 Subdivision 1. [AUTHORIZATION.] The governing body of the 317.21 housing and redevelopment authority of the city of St. Paul may 317.22 create a housing district in the area of St. Paul known as 317.23 Capitol Heights, Lot V. 317.24 Subd. 2. [INCOME REQUIREMENTS.] (a) The district 317.25 established under this section is subject to all the 317.26 requirements under Minnesota Statutes, sections 469.174 through 317.27 469.179, except the authority may elect to apply the income 317.28 limits under paragraph (b) in lieu of the limits under Minnesota 317.29 Statutes, section 469.1761, subdivision 2. 317.30 (b) To the extent the project financed with increments from 317.31 the district consists of owner occupied residential property, 317.32 the following income limits apply: 317.33 (1) at least ten percent of the units must initially be 317.34 purchased and occupied by persons at or below 60 percent of the 317.35 area median gross income; 317.36 (2) an additional ten percent of the units must initially 318.1 be purchased and occupied by persons at or below 80 percent of 318.2 the area median gross income; and 318.3 (3) the rest of the units must initially be purchased and 318.4 occupied by persons at or below 115 percent of the area median 318.5 gross income. 318.6[EFFECTIVE DATE.] This section is effective upon local 318.7 approval by the governing body of the city of St. Paul and 318.8 compliance with Minnesota Statutes, section 645.021, subdivision 318.9 3. 318.10 Sec. 57. [SOUTH ST. PAUL; SINGLE-FAMILY HOUSING.] 318.11 Due to the shortage of single-family housing in the city of 318.12 South St. Paul, the legislature finds and declares that it is a 318.13 public purpose for the city to facilitate the construction of 318.14 single-family homes to the greatest extent possible. The city 318.15 of South St. Paul may convey to a private person, firm, 318.16 partnership, corporation, or other entity a parcel of real 318.17 estate acquired from the Minnesota department of transportation 318.18 by quit claim deed, that parcel described as: "That part of the 318.19 Southwest Quarter of the Northwest Quarter of Section 28, 318.20 Township 28 North, Range 22 West, Dakota County, Minnesota, 318.21 described as follows: 318.22 Beginning at the West Quarter corner of said Section 28; 318.23 thence East on the East and West Quarter line of said Section 28 318.24 a distance of 570 feet; thence run Northwesterly to a point on 318.25 the East line of the West 221.5 feet of said Southwest Quarter 318.26 of the Northwest Quarter, distant 280 feet North of its 318.27 intersection with the East and West Quarter line of said Section 318.28 28; thence run Northwesterly to a point on the West line of said 318.29 Section 28, distant 375 feet North of the West Quarter corner 318.30 thereof; thence run South on said West section line 375 feet to 318.31 the point of beginning." 318.32 The legislature declares that the conveyance to a private 318.33 person, firm, partnership, corporation, or other entity for the 318.34 construction of single-family residential dwellings is a public 318.35 purpose. 318.36[EFFECTIVE DATE.] This section is effective without local 319.1 approval on the day following final enactment. 319.2 Sec. 58. [WASECA ECONOMIC DEVELOPMENT AUTHORITY; 319.3 EXPENDITURE OF TAX INCREMENT REVENUE.] 319.4 Notwithstanding Minnesota Statutes, sections 469.176, 319.5 subdivision 4j; and 469.1763, subdivision 2, for tax increment 319.6 financing district No. 23, established by the economic 319.7 development authority of Waseca on November 6, 2000, the city 319.8 and the authority may expend revenue derived from tax increments 319.9 from the district to pay or reimburse the cost of planning, 319.10 engineering, construction, reconstruction, repair and 319.11 improvement of exterior walls, exterior windows and doors, and 319.12 roofs of existing structures that were built before 1950 or of 319.13 properties that are owned by the city or the authority within 319.14 the original central business district, blocks 4, 5, 6, 7, 8, 319.15 and 9, of the Original Plat of Waseca, and blocks 1 and 2 of 319.16 Barneys Addition to the city of Waseca. Those costs are deemed 319.17 to be public redevelopment costs and qualified costs for 319.18 purposes of Minnesota Statutes, section 469.176, subdivisions 4 319.19 and 4j. 319.20[EFFECTIVE DATE.] This section is effective the day after 319.21 approval by the governing body of the city of Waseca and 319.22 compliance with Minnesota Statutes, section 645.021, subdivision 319.23 3. 319.24 Sec. 59. [WAYZATA HOUSING AND REDEVELOPMENT AUTHORITY; USE 319.25 OF TAX INCREMENTS FOR CONSTRUCTION OF A PUBLIC LIBRARY.] 319.26 The contract dated December 7, 1999, entered into by the 319.27 city of Wayzata with respect to the construction of a public 319.28 library and any other contracts entered into by the city of 319.29 Wayzata for the acquisition and construction of a public 319.30 library, constitute binding contracts within the meaning of 319.31 clause (2) of the second paragraph of Laws 1999, chapter 243, 319.32 article 10, section 29. Notwithstanding any other law to the 319.33 contrary, the housing and redevelopment authority in and for the 319.34 city of Wayzata may use tax increments from redevelopment tax 319.35 increment financing district No. 2 established by the housing 319.36 and redevelopment authority in and for the city of Wayzata in 320.1 1986 for the acquisition and construction of a public library. 320.2[EFFECTIVE DATE.] This section is effective the day after 320.3 approval by the governing body of the city of Wayzata and 320.4 compliance with Minnesota Statutes, section 645.021, subdivision 320.5 3. 320.6 Sec. 60. [YELLOW MEDICINE COUNTY.] 320.7 The governing body of Yellow Medicine county may elect to 320.8 extend the duration of redevelopment tax increment financing 320.9 district No. 1-1 in development district 1 by up to ten 320.10 additional years. 320.11[EFFECTIVE DATE.] This section is effective upon compliance 320.12 with the requirements of Minnesota Statutes, sections 469.1782, 320.13 subdivision 2, and 645.021. 320.14 Sec. 61. [APPROPRIATIONS.] 320.15 (a) An amount equal to the proceeds of the fee imposed 320.16 under section 4 after June 30, 2001, and before July 1, 2005, is 320.17 appropriated from the general fund to the commissioner of trade 320.18 and economic development for a redevelopment grant or grants to 320.19 the city of Richfield under Minnesota Statutes, sections 320.20 116J.561 to 116J.566. 320.21 (b) Grants made under this authority may only be used for 320.22 acquisition and site preparation of residential property in the 320.23 city of Richfield, located within the 87 decibel low frequency 320.24 sound contour as established by the metropolitan airports 320.25 commission and the city of Richfield's noise policy committee. 320.26 A property qualifies as a residential property only if the land 320.27 is improved with a building and at least 75 percent of the 320.28 square footage of the building is for single family or multiunit 320.29 residential uses. 320.30 (c) For purposes of this grant, the local match requirement 320.31 under Minnesota Statutes, section 116J.566, and the requirements 320.32 to repay sales proceeds under section 116J.567, do not apply. 320.33 Sec. 62. [REPEALER.] 320.34 Minnesota Statutes 2000, sections 469.177, subdivisions 1a 320.35 and 11; and 469.1771, subdivision 2b, are repealed. 320.36 ARTICLE 13 321.1 MINERALS TAXATION 321.2 Section 1. Minnesota Statutes 2000, section 116J.424, is 321.3 amended to read: 321.4 116J.424 [IRRRB CONTRIBUTION.] 321.5 The commissioner of the iron range resources and 321.6 rehabilitation board with approval of the board shall provide an 321.7 equal match for any loan or equity investment made for a 321.8 facility located in the tax relief area defined in section 321.9 273.134, paragraph (b), by the Minnesota minerals 21st century 321.10 fund created by section 116J.423. The match may be in the form 321.11 of a loan or equity investment, notwithstanding whether the fund 321.12 makes a loan or equity investment. The state shall not acquire 321.13 an equity interest because of an equity investment or loan by 321.14 the board and the board at its sole discretion shall decide what 321.15 interest it acquires in a project. The commissioner of trade 321.16 and economic development may require a commitment from the board 321.17 to make the match prior to disbursing money from the fund. 321.18 Sec. 2. Minnesota Statutes 2000, section 123B.75, is 321.19 amended by adding a subdivision to read: 321.20 Subd. 6b. [TACONITE PRODUCTION TAX AID.] Taconite 321.21 production tax aid received under section 298.28 must be 321.22 recognized as revenue in the fiscal year preceding its 321.23 distribution. 321.24[EFFECTIVE DATE.] This section is effective for 321.25 distributions in 2002 and thereafter. 321.26 Sec. 3. Minnesota Statutes 2000, section 126C.48, 321.27 subdivision 8, is amended to read: 321.28 Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 321.29 Reductions in levies pursuant to sections 126C.48, subdivision 321.30 1, and 273.138, must be made prior to the reductions in clause 321.31 (2). 321.32 (2) Notwithstanding any other law to the contrary, 321.33 districts which received payments pursuant to sections 298.018; 321.34 298.24 to 298.28, except an amount distributed under section 321.35 298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 321.36 298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 322.1 upon severed mineral values, or recognized revenue pursuant to 322.2 section 477A.15 or section 44; must not include a portion of 322.3 these aids in their permissible levies pursuant to those 322.4 sections, but instead must reduce the permissible levies 322.5 authorized by this chapter and chapters 120B, 122A, 123A, 123B, 322.6 124A, 124D, 125A, and 127A by the greater of the following: 322.7 (a) an amount equal to 50 percent of the total dollar 322.8 amount of the payments received pursuant to those sections or 322.9 revenue recognized pursuant to section 477A.15 or section 44 in 322.10 the previous fiscal year; or 322.11 (b) an amount equal to the total dollar amount of the 322.12 payments received pursuant to those sections or revenue 322.13 recognized pursuant to section 477A.15 in the previous fiscal 322.14 year less the product of the same dollar amount of payments or 322.15 revenue times five percent. 322.16 (3) No reduction pursuant to this subdivision shall reduce 322.17 the levy made by the district pursuant to section 126C.13, to an 322.18 amount less than the amount raised by a levy of a net tax rate 322.19 of 6.82 percent times the adjusted net tax capacity for taxes 322.20 payable in 1990 and thereafter of that district for the 322.21 preceding year as determined by the commissioner. The amount of 322.22 any increased levy authorized by referendum pursuant to section 322.23 126C.17, subdivision 9, shall not be reduced pursuant to this 322.24 subdivision. The amount of any levy authorized by section 322.25 126C.43, to make payments for bonds issued and for interest 322.26 thereon, shall not be reduced pursuant to this subdivision. 322.27 (4) Before computing the reduction pursuant to this 322.28 subdivision of the health and safety levy authorized by sections 322.29 123B.57 and 126C.40, subdivision 5, the commissioner shall 322.30 ascertain from each affected school district the amount it 322.31 proposes to levy under each section or subdivision. The 322.32 reduction shall be computed on the basis of the amount so 322.33 ascertained. 322.34 (5) Notwithstanding any law to the contrary, any amounts 322.35 received by districts in any fiscal year pursuant to sections 322.36 298.018; 298.24 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 323.1 298.405; or any law imposing a tax on severed mineral values; 323.2 and not deducted from general education aid pursuant to section 323.3 126C.21, subdivision 4, clause (2), and not applied to reduce 323.4 levies pursuant to this subdivision shall be paid by the 323.5 district to the St. Louis county auditor in the following amount 323.6 by March 15 of each year, the amount required to be subtracted 323.7 from the previous fiscal year's general education aid pursuant 323.8 to section 126C.21, subdivision 4, which is in excess of the 323.9 general education aid earned for that fiscal year. The county 323.10 auditor shall deposit any amounts received pursuant to this 323.11 clause in the St. Louis county treasury for purposes of paying 323.12 the taconite homestead credit as provided in section 273.135. 323.13 Sec. 4. Minnesota Statutes 2000, section 273.134, is 323.14 amended to read: 323.15 273.134 [TACONITE AND IRON ORE AREAS; TAX RELIEF AREA; 323.16 DEFINITIONS.] 323.17 (a) For purposes of this section and section 273.135, 323.18 "municipality" means any city, however organized, or town, and 323.19 the applicable assessment date is the date as of which property 323.20 is listed and assessed for the tax in question. 323.21 For the purposes of section 273.135, "tax relief area" 323.22 means the geographic area contained,within the boundaries of a 323.23 school district on January 2, 2000, which contains a 323.24 municipality which meets the following qualifications: 323.25 (1) it is a municipality in which the assessed valuation of 323.26 unmined iron ore on May 1, 1941, was not less than 40 percent of 323.27 the assessed valuation of all real property; or 323.28 (2) it is a municipality in which, on January 1, 1977 or 323.29 the applicable assessment date, there is a taconite 323.30 concentrating plant or where taconite is mined or quarried or 323.31 where there is located an electric generating plant which 323.32 qualifies as a taconite facility. 323.33 For purposes of this paragraph, a "tax relief area" does 323.34 not include a school district whose boundaries are more than 20 323.35 miles from a taconite mine or plant or in which the assessed 323.36 valuation of unmined iron ore on May 1, 1941, was less than 40 324.1 percent of the assessed valuation of all real property. 324.2 (b) For purposes of section 273.1391, subdivision 2, 324.3 paragraph (c), and chapter 298, "tax relief area" means the 324.4 geographic area contained within the boundaries of a school 324.5 district which contains a municipality that meets the following 324.6 qualifications: 324.7 (1) it is a municipality in which the assessed valuation of 324.8 unmined iron ore on May 1, 1941, was not less than 40 percent of 324.9 the assessed valuation of all real property; or 324.10 (2) it is a municipality in which, on January 1, 1977, or 324.11 the applicable assessment date, there is a taconite 324.12 concentrating plant or where taconite is mined or quarried or 324.13 where there is located an electric generating plant which 324.14 qualifies as a taconite facility. 324.15[EFFECTIVE DATE.] This section is effective for taxes and 324.16 aids payable and expenditures authorized in 2002 and thereafter. 324.17 Sec. 5. Minnesota Statutes 2000, section 273.135, 324.18 subdivision 1, is amended to read: 324.19 Subdivision 1. The property tax to be paid in respect to 324.20 property taxable within a tax relief area as defined in section 324.21 273.134, paragraph (a), on homestead property, as otherwise 324.22 determined by law and regardless of the market value of the 324.23 property, for all purposes shall be reduced in the amount 324.24 prescribed by subdivision 2, subject to the limitations 324.25 contained therein. 324.26[EFFECTIVE DATE.] This section is effective for taxes 324.27 payable in 2002 and thereafter. 324.28 Sec. 6. Minnesota Statutes 2000, section 273.135, 324.29 subdivision 2, is amended to read: 324.30 Subd. 2. The amount of the reduction authorized by 324.31 subdivision 1 shall be: 324.32 (a) In the case of property located within a tax relief 324.33 area as defined under section 273.134, paragraph (a), that is 324.34 within the boundaries of a municipality which meets the 324.35 qualifications prescribed in section 273.134, paragraph (a), 66 324.36 percent of the tax, provided that the reduction shall not exceed 325.1 the maximum amounts specified inclauseparagraph (c). 325.2 (b) In the case of property located within the boundaries 325.3 of a school district which qualifies as a tax relief area under 325.4 section 273.134, paragraph (a), but which is outside the 325.5 boundaries of a municipality which meets the qualifications 325.6 prescribed in section 273.134, paragraph (a), 57 percent of the 325.7 tax, provided that the reduction shall not exceed the maximum 325.8 amounts specified inclauseparagraph (c). 325.9 (c) The maximum reduction of the tax is $315.10 on property 325.10 described inclauseparagraph (a) and $289.80 on property 325.11 described inclauseparagraph (b). 325.12[EFFECTIVE DATE.] This section is effective for taxes 325.13 payable in 2002 and thereafter. 325.14 Sec. 7. Minnesota Statutes 2000, section 273.136, 325.15 subdivision 2, is amended to read: 325.16 Subd. 2. The commissioner of revenue shall determine, not 325.17 later than April 1 of each year, the amount of reduction 325.18 resulting from section 273.135 in each county containing a tax 325.19 relief area as defined by section 273.134, paragraph (b), basing 325.20 determinations on a review of abstracts of tax lists submitted 325.21 by the county auditors pursuant to section 275.29. The 325.22 commissioner may make changes in the abstracts of tax lists as 325.23 deemed necessary. The commissioner of revenue, after such 325.24 review, shall submit to the St. Louis county auditor, on or 325.25 before April 15, the amount of the first half payment payable 325.26 hereunder and on or before September 15 the amount of the second 325.27 half payment. 325.28[EFFECTIVE DATE.] This section is effective for taxes 325.29 payable in 2002 and thereafter. 325.30 Sec. 8. Minnesota Statutes 2000, section 273.1391, 325.31 subdivision 2, is amended to read: 325.32 Subd. 2. The amount of the reduction authorized by 325.33 subdivision 1 shall be: 325.34 (a) In the case of property located within a school 325.35 district which does not meet the qualifications of section 325.36 273.134 as a tax relief area, but which is located in a county 326.1 with a population of less than 100,000 in which taconite is 326.2 mined or quarried and wherein a school district is located which 326.3 does meet the qualifications of a tax relief area, and provided 326.4 that at least 90 percent of the area of the school district 326.5 which does not meet the qualifications of section 273.134 lies 326.6 within such county, 57 percent of the tax on qualified property 326.7 located in the school district that does not meet the 326.8 qualifications of section 273.134, provided that the amount of 326.9 said reduction shall not exceed the maximum amounts specified in 326.10clause (c)paragraph (d). The reduction provided by this clause 326.11 shall only be applicable to property located within the 326.12 boundaries of the county described therein. 326.13 (b) In the case of property located within a school 326.14 district which does not meet the qualifications of section 326.15 273.134 as a tax relief area, but which is located in a school 326.16 district in a county containing a city of the first class and a 326.17 qualifying municipality, but not in a school district containing 326.18 a city of the first class or adjacent to a school district 326.19 containing a city of the first class unless the school district 326.20 so adjacent contains a qualifying municipality, 57 percent of 326.21 the tax, but not to exceed the maximums specified inclause326.22(c)paragraph (d). 326.23 (c) In the case of property located within the boundaries 326.24 of a municipality that meets the qualifications in section 326.25 273.134, paragraph (b), but not the qualifications in section 326.26 273.134, paragraph (a), 66 percent of the tax, provided that the 326.27 reduction shall not exceed $315.10. In the case of property 326.28 located within the boundaries of a school district which 326.29 qualifies as a tax relief area under section 273.134, paragraph 326.30 (b), but does not qualify as a tax relief area under section 326.31 273.134, paragraph (a), but which is outside the boundaries of a 326.32 municipality which meets the qualifications of the preceding 326.33 sentence, 57 percent of the tax, provided that the reduction 326.34 shall not exceed the maximum amounts specified in paragraph (d). 326.35 (d) Except as otherwise provided in this section, the 326.36 maximum reduction of the tax is $289.80. 327.1[EFFECTIVE DATE.] This section is effective for taxes 327.2 payable in 2002 and thereafter. 327.3 Sec. 9. Minnesota Statutes 2000, section 273.1391, 327.4 subdivision 3, is amended to read: 327.5 Subd. 3. Not later than December 1, each county auditor 327.6 having jurisdiction over one or more tax relief areas defined in 327.7 subdivision 2 shall certify to the commissioner of revenue an 327.8 estimate of the total amount of the reduction, determined under 327.9 subdivision 2, in taxes payable the next succeeding year with 327.10 respect to all tax relief areas in the auditor's county. The 327.11 commissioner shall make payments to the countyby May 15 and327.12October 15 annuallyat the times provided in section 477A.015. 327.13 The county treasurer shall distribute as part of the May and 327.14 October settlements the funds received from the commissioner. 327.15[EFFECTIVE DATE.] This section is effective for payments in 327.16 2002 and thereafter. 327.17 Sec. 10. Minnesota Statutes 2000, section 276A.01, 327.18 subdivision 2, is amended to read: 327.19 Subd. 2. [AREA.] "Area" means the territory included 327.20 within all tax relief areas defined in section 273.134, 327.21 paragraph (b). 327.22[EFFECTIVE DATE.] This section is effective for taxes 327.23 payable in 2002 and thereafter. 327.24 Sec. 11. Minnesota Statutes 2000, section 298.018, 327.25 subdivision 1, is amended to read: 327.26 Subdivision 1. [WITHIN TACONITE TAX RELIEF AREA.] The 327.27 proceeds of the tax paid under sections 298.015 to 298.017 on 327.28 minerals and energy resources mined or extracted within the 327.29 taconite tax relief area defined in section 273.134, paragraph 327.30 (b), shall be allocated as follows: 327.31 (1) five percent to the city or town within which the 327.32 minerals or energy resources are mined or extracted; 327.33 (2) ten percent to the taconite municipal aid account to be 327.34 distributed as provided in section 298.282; 327.35 (3) ten percent to the school district within which the 327.36 minerals or energy resources are mined or extracted; 328.1 (4) 20 percent to a group of school districts comprised of 328.2 those school districts wherein the mineral or energy resource 328.3 was mined or extracted or in which there is a qualifying 328.4 municipality as defined by section 273.134, paragraph (b), in 328.5 direct proportion to school district indexes as follows: for 328.6 each school district, its pupil units determined under section 328.7 126C.05 for the prior school year shall be multiplied by the 328.8 ratio of the average adjusted net tax capacity per pupil unit 328.9 for school districts receiving aid under this clause as 328.10 calculated pursuant to chapters 122A, 126C, and 127A for the 328.11 school year ending prior to distribution to the adjusted net tax 328.12 capacity per pupil unit of the district. Each district shall 328.13 receive that portion of the distribution which its index bears 328.14 to the sum of the indices for all school districts that receive 328.15 the distributions; 328.16 (5) 20 percent to the county within which the minerals or 328.17 energy resources are mined or extracted; 328.18 (6) 20 percent to St. Louis county acting as the counties' 328.19 fiscal agent to be distributed as provided in sections 273.134 328.20 to 273.136; 328.21 (7) five percent to the iron range resources and 328.22 rehabilitation board for the purposes of section 298.22; 328.23 (8) five percent to the northeast Minnesota economic 328.24 protection trust fund; and 328.25 (9) five percent to the taconite environmental protection 328.26 fund. 328.27 The proceeds of the tax shall be distributed on July 15 328.28 each year. 328.29 Sec. 12. Minnesota Statutes 2000, section 298.018, 328.30 subdivision 2, is amended to read: 328.31 Subd. 2. [OUTSIDE TACONITE TAX RELIEF AREA.] The proceeds 328.32 of the tax paid under sections 298.015 to 298.017 on minerals 328.33 and energy resources mined or extracted outside of the taconite 328.34 tax relief area defined in section 273.134, paragraph (b), shall 328.35 be deposited in the general fund. 328.36 Sec. 13. Minnesota Statutes 2000, section 298.17, is 329.1 amended to read: 329.2 298.17 [OCCUPATION TAXES TO BE APPORTIONED.] 329.3 All occupation taxes paid by persons, copartnerships, 329.4 companies, joint stock companies, corporations, and 329.5 associations, however or for whatever purpose organized, engaged 329.6 in the business of mining or producing iron ore or other ores, 329.7 when collected shall be apportioned and distributed in 329.8 accordance with the Constitution of the state of Minnesota, 329.9 article X, section 3, in the manner following: 90 percent shall 329.10 be deposited in the state treasury and credited to the general 329.11 fund of which four-ninths shall be used for the support of 329.12 elementary and secondary schools; and ten percent of the 329.13 proceeds of the tax imposed by this section shall be deposited 329.14 in the state treasury and credited to the general fund for the 329.15 general support of the university. Of the moneys apportioned to 329.16 the general fund by this section there is annually appropriated 329.17 and credited to the iron range resources and rehabilitation 329.18 board account in the special revenue fund an amount equal to 329.19 that which would have been generated by a 1.5 cent tax imposed 329.20 by section 298.24 on each taxable ton produced in the preceding 329.21 calendar year, to be expended for the purposes of section 329.22 298.22. The money appropriated pursuant to this section shall 329.23 be used (1) to provide environmental development grants to local 329.24 governments located within any county in region 3 as defined in 329.25 governor's executive order number 60, issued on June 12, 1970, 329.26 which does not contain a municipality qualifying pursuant to 329.27 section 273.134, paragraph (b), or (2) to provide economic 329.28 development loans or grants to businesses located within any 329.29 such county, provided that the county board or an advisory group 329.30 appointed by the county board to provide recommendations on 329.31 economic development shall make recommendations to the iron 329.32 range resources and rehabilitation board regarding the loans. 329.33 Payment to the iron range resources and rehabilitation board 329.34 account shall be made by May 15 annually. 329.35 Of the money allocated to Koochiching county, one-third 329.36 must be paid to the Koochiching county economic development 330.1 commission. 330.2 Sec. 14. Minnesota Statutes 2000, section 298.22, 330.3 subdivision 2, is amended to read: 330.4 Subd. 2. [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 330.5 There is hereby created the iron range resources and 330.6 rehabilitation board, consisting of 13 members, five of whom are 330.7 state senators appointed by the subcommittee on committees of 330.8 the rules committee of the senate, and five of whom are 330.9 representatives, appointed by the speaker of the house of 330.10 representatives. The remaining members shall be appointed one 330.11 each by the senate majority leader, the speaker of the house of 330.12 representatives, and the governor and must be nonlegislators who 330.13 reside in a tax relief area as defined in section 273.134, 330.14 paragraph (b). The members shall be appointed in January of 330.15 every odd-numbered year, except that the initial nonlegislator 330.16 members shall be appointed by July 1, 1999, and shall serve 330.17 until January of the next odd-numbered year. Vacancies on the 330.18 board shall be filled in the same manner as the original members 330.19 were chosen. At least a majority of the legislative members of 330.20 the board shall be elected from state senatorial or legislative 330.21 districts in which over 50 percent of the residents reside 330.22 within a tax relief area as defined in section 273.134, 330.23 paragraph (b). All expenditures and projects made by the 330.24 commissioner of iron range resources and rehabilitation shall be 330.25 consistent with the priorities established in subdivision 8 and 330.26 shall first be submitted to the iron range resources and 330.27 rehabilitation board for approval by a majority of the board of 330.28 expenditures and projects for rehabilitation purposes as 330.29 provided by this section, and the method, manner, and time of 330.30 payment of all funds proposed to be disbursed shall be first 330.31 approved or disapproved by the board. The board shall 330.32 biennially make its report to the governor and the legislature 330.33 on or before November 15 of each even-numbered year. The 330.34 expenses of the board shall be paid by the state from the funds 330.35 raised pursuant to this section. 330.36 Sec. 15. Minnesota Statutes 2000, section 298.22, is 331.1 amended by adding a subdivision to read: 331.2 Subd. 8. [SPENDING PRIORITY.] In making or approving any 331.3 expenditures on programs or projects, the commissioner and the 331.4 board shall give the highest priority to programs and projects 331.5 that target relief to those areas of the taconite tax relief 331.6 area as defined in section 273.134, paragraph (b), that have the 331.7 largest percentages of job losses and population losses directly 331.8 attributable to the economic downturn in the taconite industry 331.9 since the 1980's. The commissioner and the board shall compare 331.10 the 1980 population and employment figures with the 2000 331.11 population and employment figures, and shall specifically 331.12 consider the job losses in 2000 and 2001 resulting from the 331.13 closure of LTV Steel Mining Company, in making or approving 331.14 expenditures consistent with this subdivision, as well as the 331.15 areas of residence of persons who suffered job loss for which 331.16 relief is to be targeted under this subdivision. This 331.17 subdivision supersedes any other conflicting provisions of law, 331.18 and does not preclude the commissioner and the board from making 331.19 expenditures for programs and projects in other areas. 331.20 Sec. 16. Minnesota Statutes 2000, section 298.2211, 331.21 subdivision 2, is amended to read: 331.22 Subd. 2. [AREA OF OPERATION.] Projects undertaken, 331.23 developed, or financed pursuant to this section shall be located 331.24 within the tax relief area defined in section 273.134, paragraph 331.25 (b). 331.26 Sec. 17. Minnesota Statutes 2000, section 298.2213, 331.27 subdivision 3, is amended to read: 331.28 Subd. 3. [USE OF MONEY.] The money appropriated under this 331.29 section may be used to provide loans, loan guarantees, interest 331.30 buy-downs, and other forms of participation with private sources 331.31 of financing, provided that a loan to a private enterprise must 331.32 be for a principal amount not to exceed one-half of the cost of 331.33 the project for which financing is sought, and the rate of 331.34 interest on a loan must be no less than the lesser of eight 331.35 percent or the rate of interest that is three percentage points 331.36 less than a full faith and credit obligation of the United 332.1 States government of comparable maturity, at the time that the 332.2 loan is approved. 332.3 Money appropriated in this section must be expended only in 332.4 or for the benefit of the tax relief area defined in section 332.5 273.134, paragraph (b), and as otherwise provided in this 332.6 section. 332.7 Sec. 18. Minnesota Statutes 2000, section 298.2214, 332.8 subdivision 1, is amended to read: 332.9 Subdivision 1. [CREATION OF COMMITTEE; PURPOSE.] A 332.10 committee is created to advise the commissioner of iron range 332.11 resources and rehabilitation on providing higher education 332.12 programs in the taconite tax relief area defined in section 332.13 273.134, paragraph (b). The committee is subject to section 332.14 15.059. 332.15 Sec. 19. Minnesota Statutes 2000, section 298.223, 332.16 subdivision 1, is amended to read: 332.17 Subdivision 1. [CREATION; PURPOSES.] A fund called the 332.18 taconite environmental protection fund is created for the 332.19 purpose of reclaiming, restoring and enhancing those areas of 332.20 northeast Minnesota located within a tax relief area defined in 332.21 section 273.134, paragraph (b), that are adversely affected by 332.22 the environmentally damaging operations involved in mining 332.23 taconite and iron ore and producing iron ore concentrate and for 332.24 the purpose of promoting the economic development of northeast 332.25 Minnesota. The taconite environmental protection fund shall be 332.26 used for the following purposes: 332.27 (a) to initiate investigations into matters the iron range 332.28 resources and rehabilitation board determines are in need of 332.29 study and which will determine the environmental problems 332.30 requiring remedial action; 332.31 (b) reclamation, restoration, or reforestation of minelands 332.32 not otherwise provided for by state law; 332.33 (c) local economic development projects including 332.34 construction of sewer and water systems, and other public works 332.35 located within a tax relief area defined in section 273.134, 332.36 paragraph (b); 333.1 (d) monitoring of mineral industry related health problems 333.2 among mining employees. 333.3 Sec. 20. Minnesota Statutes 2000, section 298.225, 333.4 subdivision 1, is amended to read: 333.5 Subdivision 1. (a) The distribution of the taconite 333.6 production tax as provided in section 298.28, subdivisions23 333.7 to 5, 6, paragraph (b), 7, and 8, shall equal the lesser of the 333.8 following amounts: 333.9 (1) the amount distributed pursuant to this section and 333.10 section 298.28, with respect to 1983 production if the 333.11 production for the year prior to the distribution year is no 333.12 less than42,000,00035,000,000 taxable tons. If the production 333.13 is less than42,000,00035,000,000 taxable tons, the amount of 333.14 the distributions shall be reduced proportionately at the rate 333.15 oftwo2.4 percent for each 1,000,000 tons, or part of 1,000,000 333.16 tons by which the production is less than42,000,00035,000,000 333.17 tons; or 333.18 (2)(i) for the distributions made pursuant to section 333.19 298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 333.20 (c), 40.5 percent of the amount distributed pursuant to this 333.21 section and section 298.28, with respect to 1983 production; 333.22 (ii) for the distributions made pursuant to section 298.28, 333.23 subdivision 5, paragraphs (b) and (d), 75 percent of the amount 333.24 distributed pursuant to this section and section 298.28, with 333.25 respect to 1983 production. 333.26 (b) The distribution of the taconite production tax as 333.27 provided in section 298.28, subdivision 2, shall equal the 333.28 following amount: 333.29 (1) if the production for the year prior to the 333.30 distribution year is at least 35,000,000 taxable tons, the 333.31 amount distributed pursuant to this section and section 298.28, 333.32 with respect to 1999 production; or 333.33 (2) if the production for the year prior to the 333.34 distribution year is less than 35,000,000 taxable tons, the 333.35 amount distributed pursuant to this section and section 298.28 333.36 with respect to 1999 production, reduced proportionately at the 334.1 rate of 2.4 percent for each 1,000,000 tons or part of 1,000,000 334.2 tons by which the production is less than 35,000,000 tons. 334.3[EFFECTIVE DATE; RETROACTIVE APPLICATION.] This section is 334.4 effective for distributions in 2001 and thereafter. For the 334.5 distribution paid in February 2001 only, as soon as practicable 334.6 after the date of final enactment of this act, the commissioner 334.7 of iron range resources and rehabilitation shall pay two-thirds 334.8 of any additional amounts required under this section from the 334.9 taconite environmental protection fund and one-third of any 334.10 additional amounts required under this section from the 334.11 northeast Minnesota economic protection trust fund, as directed 334.12 by the commissioner of revenue. 334.13 Sec. 21. Minnesota Statutes 2000, section 298.24, 334.14 subdivision 1, is amended to read: 334.15 Subdivision 1. (a) For concentrate produced in19992001, 334.16 2002, and 2003, there is imposed upon taconite and iron 334.17 sulphides, and upon the mining and quarrying thereof, and upon 334.18 the production of iron ore concentrate therefrom, and upon the 334.19 concentrate so produced, a tax of$2.141$2.173 per gross ton of 334.20 merchantable iron ore concentrate produced therefrom. 334.21 (b) For concentrates produced in20002004 and subsequent 334.22 years, the tax rate shall be equal to the preceding year's tax 334.23 rate plus an amount equal to the preceding year's tax rate 334.24 multiplied by the percentage increase in the implicit price 334.25 deflator from the fourth quarter of the second preceding year to 334.26 the fourth quarter of the preceding year. "Implicit price 334.27 deflator" means the implicit price deflator for the gross 334.28 domestic product prepared by the bureau of economic analysis of 334.29 the United States Department of Commerce. 334.30 (c) On concentrates produced in 1997 and thereafter, an 334.31 additional tax is imposed equal to three cents per gross ton of 334.32 merchantable iron ore concentrate for each one percent that the 334.33 iron content of the product exceeds 72 percent, when dried at 334.34 212 degrees Fahrenheit. 334.35 (d) The tax shall be imposed on the average of the 334.36 production for the current year and the previous two years. The 335.1 rate of the tax imposed will be the current year's tax rate. 335.2 This clause shall not apply in the case of the closing of a 335.3 taconite facility if the property taxes on the facility would be 335.4 higher if this clause and section 298.25 were not applicable. 335.5 (e) If the tax or any part of the tax imposed by this 335.6 subdivision is held to be unconstitutional, a tax 335.7 of$2.141$2.173 per gross ton of merchantable iron ore 335.8 concentrate produced shall be imposed. 335.9 (f) Consistent with the intent of this subdivision to 335.10 impose a tax based upon the weight of merchantable iron ore 335.11 concentrate, the commissioner of revenue may indirectly 335.12 determine the weight of merchantable iron ore concentrate 335.13 included in fluxed pellets by subtracting the weight of the 335.14 limestone, dolomite, or olivine derivatives or other basic flux 335.15 additives included in the pellets from the weight of the 335.16 pellets. For purposes of this paragraph, "fluxed pellets" are 335.17 pellets produced in a process in which limestone, dolomite, 335.18 olivine, or other basic flux additives are combined with 335.19 merchantable iron ore concentrate. No subtraction from the 335.20 weight of the pellets shall be allowed for binders, mineral and 335.21 chemical additives other than basic flux additives, or moisture. 335.22 (g)(1) Notwithstanding any other provision of this 335.23 subdivision, for the first two years of a plant's production of 335.24 direct reduced ore, no tax is imposed under this section. As 335.25 used in this paragraph, "direct reduced ore" is ore that results 335.26 in a product that has an iron content of at least 75 percent. 335.27 For the third year of a plant's production of direct reduced 335.28 ore, the rate to be applied to direct reduced ore is 25 percent 335.29 of the rate otherwise determined under this subdivision. For 335.30 the fourth such production year, the rate is 50 percent of the 335.31 rate otherwise determined under this subdivision; for the fifth 335.32 such production year, the rate is 75 percent of the rate 335.33 otherwise determined under this subdivision; and for all 335.34 subsequent production years, the full rate is imposed. 335.35 (2) Subject to clause (1), production of direct reduced ore 335.36 in this state is subject to the tax imposed by this section, but 336.1 if that production is not produced by a producer of taconite or 336.2 iron sulfides, the production of taconite or iron sulfides 336.3 consumed in the production of direct reduced iron in this state 336.4 is not subject to the tax imposed by this section on taconite or 336.5 iron sulfides. 336.6 Sec. 22. Minnesota Statutes 2000, section 298.27, is 336.7 amended to read: 336.8 298.27 [COLLECTION AND PAYMENT OF TAX.] 336.9 The taxes provided by section 298.24 shall be paid directly 336.10 to each eligible county and the iron range resources and 336.11 rehabilitation board. The commissioner of revenue shall notify 336.12 each producer of the amount to be paid each recipient prior to 336.13 February 15. Every person subject to taxes imposed by section 336.14 298.24 shall file a correct report covering the preceding year. 336.15 The report must contain the information required by the 336.16 commissioner. The report shall be filed on or before February 336.17 1. A remittance equal to 100 percent of the total tax required 336.18 to be paid hereunder shall be paid on or before February 24. On 336.19 or before February 25, except as otherwise provided in section 336.20 298.28, the county auditor shall make distribution of the 336.21 payment received by the county in the manner provided by section 336.22 298.28. Reports shall be made and hearings held upon the 336.23 determination of the tax in accordance with procedures 336.24 established by the commissioner of revenue. The commissioner of 336.25 revenue shall have authority to make reasonable rules as to the 336.26 form and manner of filing reports necessary for the 336.27 determination of the tax hereunder, and by such rules may 336.28 require the production of such information as may be reasonably 336.29 necessary or convenient for the determination and apportionment 336.30 of the tax. All the provisions of the occupation tax law with 336.31 reference to the assessment and determination of the occupation 336.32 tax, including all provisions for appeals from or review of the 336.33 orders of the commissioner of revenue relative thereto, but not 336.34 including provisions for refunds, are applicable to the taxes 336.35 imposed by section 298.24 except in so far as inconsistent 336.36 herewith. If any person subject to section 298.24 shall fail to 337.1 make the report provided for in this section at the time and in 337.2 the manner herein provided, the commissioner of revenue shall in 337.3 such case, upon information possessed or obtained, ascertain the 337.4 kind and amount of ore mined or produced and thereon find and 337.5 determine the amount of the tax due from such person. There 337.6 shall be added to the amount of tax due a penalty for failure to 337.7 report on or before February 1, which penalty shall equal ten 337.8 percent of the tax imposed and be treated as a part thereof. 337.9 If any person responsible for making a tax payment at the 337.10 time and in the manner herein provided fails to do so, there 337.11 shall be imposed a penalty equal to ten percent of the amount so 337.12 due, which penalty shall be treated as part of the tax due. 337.13 In the case of any underpayment of the tax payment required 337.14 herein, there may be added and be treated as part of the tax due 337.15 a penalty equal to ten percent of the amount so underpaid. 337.16 A person having a liability of $120,000 or more during a 337.17 calendar year must remit all liabilities by means of a funds 337.18 transfer as defined in section 336.4A-104, paragraph (a). The 337.19 funds transfer payment date, as defined in section 336.4A-401, 337.20 must be on or before the date the tax is due. If the date the 337.21 tax is due is not a funds transfer business day, as defined in 337.22 section 336.4A-105, paragraph (a), clause (4), the payment date 337.23 must be on or before the funds transfer business day next 337.24 following the date the tax is due. 337.25 Sec. 23. Minnesota Statutes 2000, section 298.28, 337.26 subdivision 1, is amended to read: 337.27 Subdivision 1. [DISTRIBUTION.] The proceeds of the taxes 337.28 collected under section 298.24, except the tax collected under 337.29 section 298.24, subdivision 2, shall, upon certification of the 337.30 commissioner of revenue, be allocated under subdivisions 2 to 337.31 12, except as otherwise provided in subdivision 4, paragraph 337.32 (f), subdivision 6, paragraph (e), and subdivision 11, paragraph 337.33 (d). 337.34 Sec. 24. Minnesota Statutes 2000, section 298.28, 337.35 subdivision 3, is amended to read: 337.36 Subd. 3. [CITIES; TOWNS.] (a) 12.5 cents per taxable ton, 338.1 less any amount distributed under subdivision 8, and paragraph 338.2 (b), must be allocated to the taconite municipal aid account to 338.3 be distributed as provided in section 298.282. 338.4 (b) An amount must be allocated to towns or cities that is 338.5 annually certified by the county auditor of a county containing 338.6 a taconite tax relief area as defined in section 273.134, 338.7 paragraph (b), within which there is (1) an organized township 338.8 if, as of January 2, 1982, more than 75 percent of the assessed 338.9 valuation of the township consists of iron ore or (2) a city if, 338.10 as of January 2, 1980, more than 75 percent of the assessed 338.11 valuation of the city consists of iron ore. 338.12 (c) The amount allocated under paragraph (b) will be the 338.13 portion of a township's or city's certified levy equal to the 338.14 proportion of (1) the difference between 50 percent of January 338.15 2, 1982, assessed value in the case of a township and 50 percent 338.16 of the January 2, 1980, assessed value in the case of a city and 338.17 its current assessed value to (2) the sum of its current 338.18 assessed value plus the difference determined in (1), provided 338.19 that the amount distributed shall not exceed $55 per capita in 338.20 the case of a township or $75 per capita in the case of a city. 338.21 For purposes of this limitation, population will be determined 338.22 according to the 1980 decennial census conducted by the United 338.23 States Bureau of the Census. If the current assessed value of 338.24 the township exceeds 50 percent of the township's January 2, 338.25 1982, assessed value, or if the current assessed value of the 338.26 city exceeds 50 percent of the city's January 2, 1980, assessed 338.27 value, this paragraph shall not apply. For purposes of this 338.28 paragraph, "assessed value," when used in reference to years 338.29 other than 1980 or 1982, means the appropriate net tax 338.30 capacities multiplied by 10.2. 338.31 Sec. 25. Minnesota Statutes 2000, section 298.28, 338.32 subdivision 4, is amended to read: 338.33 Subd. 4. [SCHOOL DISTRICTS.] (a) 22.28 cents per taxable 338.34 ton plus the increase provided in paragraph (d) must be 338.35 allocated to qualifying school districts to be distributed, 338.36 based upon the certification of the commissioner of revenue, 339.1 under paragraphs (b) and (c), except as otherwise provided in 339.2 paragraph (f). 339.3 (b) 4.46 cents per taxable ton must be distributed to the 339.4 school districts in which the lands from which taconite was 339.5 mined or quarried were located or within which the concentrate 339.6 was produced. The distribution must be based on the 339.7 apportionment formula prescribed in subdivision 2. 339.8 (c)(i) 17.82 cents per taxable ton, less any amount 339.9 distributed under paragraph (e), shall be distributed to a group 339.10 of school districts comprised of those school districts in which 339.11 the taconite was mined or quarried or the concentrate produced 339.12 or in which there is a qualifying municipality as defined by 339.13 section 273.134, paragraph (b), in direct proportion to school 339.14 district indexes as follows: for each school district, its 339.15 pupil units determined under section 126C.05 for the prior 339.16 school year shall be multiplied by the ratio of the average 339.17 adjusted net tax capacity per pupil unit for school districts 339.18 receiving aid under this clause as calculated pursuant to 339.19 chapters 122A, 126C, and 127A for the school year ending prior 339.20 to distribution to the adjusted net tax capacity per pupil unit 339.21 of the district. Each district shall receive that portion of 339.22 the distribution which its index bears to the sum of the indices 339.23 for all school districts that receive the distributions. 339.24 (ii) Notwithstanding clause (i), each school district that 339.25 receives a distribution under sections 298.018; 298.23 to 339.26 298.28, exclusive of any amount received under this clause; 339.27 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 339.28 imposing a tax on severed mineral values that is less than the 339.29 amount of its levy reduction under section 126C.48, subdivision 339.30 8, for the second year prior to the year of the distribution 339.31 shall receive a distribution equal to the difference; the amount 339.32 necessary to make this payment shall be derived from 339.33 proportionate reductions in the initial distribution to other 339.34 school districts under clause (i). 339.35 (d) Any school district described in paragraph (c) where a 339.36 levy increase pursuant to section 126C.17, subdivision 9, is 340.1 authorized by referendum, shall receive a distribution from a 340.2 fund that receives a distribution in 1998 of 21.3 cents per 340.3 ton. On July 15 of 1999, and each year thereafter, the increase 340.4 over the amount established for the prior year shall be 340.5 determined according to the increase in the implicit price 340.6 deflator as provided in section 298.24, subdivision 1. Each 340.7 district shall receive the product of: 340.8 (i) $175 times the pupil units identified in section 340.9 126C.05, subdivision 1, enrolled in the second previous year or 340.10 the 1983-1984 school year, whichever is greater, less the 340.11 product of 1.8 percent times the district's taxable net tax 340.12 capacity in the second previous year; times 340.13 (ii) the lesser of: 340.14 (A) one, or 340.15 (B) the ratio of the sum of the amount certified pursuant 340.16 to section 126C.17, subdivision 6, in the previous year, plus 340.17 the amount certified pursuant to section 126C.17, subdivision 8, 340.18 in the previous year, plus the referendum aid according to 340.19 section 126C.17, subdivision 7, for the current year, plus an 340.20 amount equal to the reduction under section 126C.17, subdivision 340.21 12, to the product of 1.8 percent times the district's taxable 340.22 net tax capacity in the second previous year. 340.23 If the total amount provided by paragraph (d) is 340.24 insufficient to make the payments herein required then the 340.25 entitlement of $175 per pupil unit shall be reduced uniformly so 340.26 as not to exceed the funds available. Any amounts received by a 340.27 qualifying school district in any fiscal year pursuant to 340.28 paragraph (d) shall not be applied to reduce general education 340.29 aid which the district receives pursuant to section 126C.13 or 340.30 the permissible levies of the district. Any amount remaining 340.31 after the payments provided in this paragraph shall be paid to 340.32 the commissioner of iron range resources and rehabilitation who 340.33 shall deposit the same in the taconite environmental protection 340.34 fund and the northeast Minnesota economic protection trust fund 340.35 as provided in subdivision 11. 340.36 Each district receiving money according to this paragraph 341.1 shall reserve $25 times the number of pupil units in the 341.2 district. It may use the money for early childhood programs or 341.3 for outcome-based learning programs that enhance the academic 341.4 quality of the district's curriculum. The outcome-based 341.5 learning programs must be approved by the commissioner of 341.6 children, families, and learning. 341.7 (e) There shall be distributed to any school district the 341.8 amount which the school district was entitled to receive under 341.9 section 298.32 in 1975. 341.10 (f) Notwithstanding anything to the contrary in this 341.11 subdivision, beginning with the year 2002 distribution, the 341.12 amount necessary for distributions to school districts under 341.13 paragraphs (b), (c), and (e) and section 298.225 is annually 341.14 appropriated, upon certification by the commissioner of revenue, 341.15 to the commissioner of children, families, and learning from the 341.16 general fund. On July 1, the commissioner of children, 341.17 families, and learning shall distribute the appropriation in the 341.18 manner provided by section 298.27. 341.19 Sec. 26. Minnesota Statutes 2000, section 298.28, 341.20 subdivision 6, is amended to read: 341.21 Subd. 6. [PROPERTY TAX RELIEF.] (a) In1999, 38.812002, 341.22 35.9 cents per taxable ton, less any amount required to be 341.23 distributed under paragraphs (b) and (c), and less any amount 341.24 required to be deducted under paragraph (d), must be allocated 341.25 to St. Louis county acting as the counties' fiscal agent, to be 341.26 distributed as provided in sections 273.134 to 273.136. 341.27 (b) If an electric power plant owned by and providing the 341.28 primary source of power for a taxpayer mining and concentrating 341.29 taconite is located in a county other than the county in which 341.30 the mining and the concentrating processes are conducted, .1875 341.31 cent per taxable ton of the tax imposed and collected from such 341.32 taxpayer shall be paid to the county. 341.33 (c) If an electric power plant owned by and providing the 341.34 primary source of power for a taxpayer mining and concentrating 341.35 taconite is located in a school district other than a school 341.36 district in which the mining and concentrating processes are 342.1 conducted, .7282 cent per taxable ton of the tax imposed and 342.2 collected from the taxpayer shall be paid to the school district. 342.3 (d) Two cents per taxable ton must be deducted from the 342.4 amount allocated to the St. Louis county auditor under paragraph 342.5 (a). 342.6 (e) Notwithstanding anything to the contrary in this 342.7 subdivision, beginning with the year 2002 distribution, the 342.8 amount necessary for distributions to school districts under 342.9 paragraph (c) is annually appropriated, upon certification by 342.10 the commissioner of revenue, to the commissioner of children, 342.11 families, and learning from the general fund. On July 1, the 342.12 commissioner of children, families, and learning shall 342.13 distribute the appropriation in the manner provided by section 342.14 298.27. 342.15[EFFECTIVE DATE.] This section is effective for 342.16 distributions in 2002 and thereafter. 342.17 Sec. 27. Minnesota Statutes 2000, section 298.28, 342.18 subdivision 7, is amended to read: 342.19 Subd. 7. [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 342.20 For the 1998 distribution, 6.5 cents per taxable ton shall be 342.21 paid to the iron range resources and rehabilitation board for 342.22 the purposes of section 298.22. That amount shall be increased 342.23 in 1999 and subsequent years in the same proportion as the 342.24 increase in the implicit price deflator as provided in section 342.25 298.24, subdivision 1. The amount distributed pursuant to this 342.26 subdivision shall be expended within or for the benefit of a tax 342.27 relief area defined in section 273.134, paragraph (b). No part 342.28 of the fund provided in this subdivision may be used to provide 342.29 loans for the operation of private business unless the loan is 342.30 approved by the governor. 342.31 Sec. 28. Minnesota Statutes 2000, section 298.28, 342.32 subdivision 9, is amended to read: 342.33 Subd. 9. [MINNESOTA ECONOMIC PROTECTION TRUST FUND.] In 342.34 1999 and subsequent years, 3.35 cents per taxable ton shall be 342.35 paid to the northeast Minnesota economic protection trust fund. 342.36 Sec. 29. Minnesota Statutes 2000, section 298.28, 343.1 subdivision 9a, is amended to read: 343.2 Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 343.3 cents per ton for distributions in 1999, 2000, 2001, and 2002343.4 through 2004 must be paid to the taconite economic development 343.5 fund. No distribution shall be made under this paragraph in any 343.6 year in which total industry production falls below 30 million 343.7 tons. 343.8 (b) An amount equal to 50 percent of the tax under section 343.9 298.24 for concentrate sold in the form of pellet chips and 343.10 fines not exceeding 5/16 inch in size and not including crushed 343.11 pellets shall be paid to the taconite economic development 343.12 fund. The amount paid shall not exceed $700,000 annually for 343.13 all companies. If the initial amount to be paid to the fund 343.14 exceeds this amount, each company's payment shall be prorated so 343.15 the total does not exceed $700,000. 343.16 Sec. 30. Minnesota Statutes 2000, section 298.28, 343.17 subdivision 9b, is amended to read: 343.18 Subd. 9b. [TACONITE ENVIRONMENTAL FUND.]FiveFifteen 343.19 cents per ton for distributions in 1999, 2000, 2001, and 2002343.20 through 2004 must be paid to the taconite environmental fund for 343.21 use under section 298.2961. No distribution may be made under 343.22 this paragraph in any year in which total industry production 343.23 falls below 30,000,000 tons. 343.24 Sec. 31. Minnesota Statutes 2000, section 298.28, 343.25 subdivision 10, is amended to read: 343.26 Subd. 10. [INCREASE.] Beginning with distributions in 343.27 2000, theamountsamount determined undersubdivisions 6,343.28paragraph (a), andsubdivision 9 shall be increased in the same 343.29 proportion as the increase in the implicit price deflator as 343.30 provided in section 298.24, subdivision 1. Beginning with 343.31 distributions in 2003, the amount determined under subdivision 343.32 6, paragraph (a), shall be increased in the same proportion as 343.33 the increase in the implicit price deflator as provided in 343.34 section 298.24, subdivision 1. 343.35 The distributions per ton determined under subdivisions 5, 343.36 paragraphs (b) and (d), and 6, paragraph (b), for distribution 344.1 in 1988 and subsequent years shall be the distribution per ton 344.2 determined for distribution in 1987. The distribution per ton 344.3 under subdivision 6, paragraph (c), for distribution in 2000 and 344.4 subsequent years shall be 81 percent of the distribution per ton 344.5 determined for distribution in 1987. 344.6[EFFECTIVE DATE.] This section is effective for 344.7 distributions in 2002 and thereafter. 344.8 Sec. 32. Minnesota Statutes 2000, section 298.28, 344.9 subdivision 11, is amended to read: 344.10 Subd. 11. [REMAINDER.] (a) The proceeds of the tax imposed 344.11 by section 298.24 which remain after the distributions and 344.12 payments in subdivisions 2 to 10a, as certified by the 344.13 commissioner of revenue, and paragraphs (b), (c), and (d) have 344.14 been made, together with interest earned on all money 344.15 distributed under this section prior to distribution, shall be 344.16 divided between the taconite environmental protection fund 344.17 created in section 298.223 and the northeast Minnesota economic 344.18 protection trust fund created in section 298.292 as follows: 344.19 Two-thirds to the taconite environmental protection fund and 344.20 one-third to the northeast Minnesota economic protection trust 344.21 fund. The proceeds shall be placed in the respective special 344.22 accounts. In this paragraph, the terms "distributions and 344.23 payments" and "all money distributed under this section" do not 344.24 mean distributions from general fund appropriations. 344.25 (b) There shall be distributed to each city, town, and 344.26 county the amount that it received under section 294.26 in 344.27 calendar year 1977; provided, however, that the amount 344.28 distributed in 1981 to the unorganized territory number 2 of 344.29 Lake county and the town of Beaver Bay based on the 344.30 between-terminal trackage of Erie Mining Company will be 344.31 distributed in 1982 and subsequent years to the unorganized 344.32 territory number 2 of Lake county and the towns of Beaver Bay 344.33 and Stony River based on the miles of track of Erie Mining 344.34 Company in each taxing district. 344.35 (c) There shall be distributed to the iron range resources 344.36 and rehabilitation board the amounts it received in 1977 under 345.1 section 298.22. The amount distributed under this paragraph 345.2 shall be expended within or for the benefit of the tax relief 345.3 area defined in section 273.134, paragraph (b). 345.4 (d) There shall be distributed to each school district 81 345.5 percent of the amount that it received under section 294.26 in 345.6 calendar year 1977, except that, beginning with the year 2002 345.7 distribution, the amount necessary for distributions to school 345.8 districts is annually appropriated, upon certification by the 345.9 commissioner of revenue, to the commissioner of children, 345.10 families, and learning from the general fund. On July 1, the 345.11 commissioner of children, families, and learning shall 345.12 distribute the appropriation as provided in this paragraph. 345.13 Sec. 33. Minnesota Statutes 2000, section 298.28, 345.14 subdivision 15, is amended to read: 345.15 Subd. 15. [DISTRIBUTION OF DELAYED PAYMENTS.] 345.16 Notwithstanding any other provision of this section or any other 345.17 law, if payment of taxes collected under section 298.24 is 345.18 delayed past the due date because the taxpayer is a debtor in a 345.19 pending bankruptcy proceeding, the amount paid shall be 345.20 distributed as follows when received: 345.21 (1) 50 percent to St. Louis county acting as the counties' 345.22 fiscal agent, to be distributed as provided in sections 273.134 345.23 to 273.136; 345.24 (2) 25 percent to the northeast Minnesota economic 345.25 protection trust fund; and 345.26 (3) 25 percent to the taconite environmental protection 345.27 fund; 345.28 except that for payments of taxes relating to production year 345.29 2000 only, the amount paid shall be deposited in the general 345.30 fund. 345.31 Sec. 34. Minnesota Statutes 2000, section 298.282, 345.32 subdivision 1, is amended to read: 345.33 Subdivision 1. The amount deposited with the county as 345.34 provided in section 298.28, subdivision 3,shallmust be 345.35 distributed as provided by this section,among the 345.36 municipalities comprising a tax relief area under section 346.1 273.134, paragraph (b),as amended hereby,each beingherein346.2 referred to in this section as a qualifying municipality. 346.3 Sec. 35. Minnesota Statutes 2000, section 298.292, 346.4 subdivision 2, is amended to read: 346.5 Subd. 2. [USE OF MONEY.] Money in the northeast Minnesota 346.6 economic protection trust fund may be used for the following 346.7 purposes: 346.8 (1) to provide loans, loan guarantees, interest buy-downs 346.9 and other forms of participation with private sources of 346.10 financing, but a loan to a private enterprise shall be for a 346.11 principal amount not to exceed one-half of the cost of the 346.12 project for which financing is sought, and the rate of interest 346.13 on a loan shall be no less than the lesser of eight percent or 346.14 an interest rate three percentage points less than a full faith 346.15 and credit obligation of the United States government of 346.16 comparable maturity, at the time that the loan is approved; 346.17 (2) to fund reserve accounts established to secure the 346.18 payment when due of the principal of and interest on bonds 346.19 issued pursuant to section 298.2211; 346.20 (3) to pay in periodic payments or in a lump sum payment 346.21 any or all of the interest on bonds issued pursuant to chapter 346.22 474 for the purpose of constructing, converting, or retrofitting 346.23 heating facilities in connection with district heating systems 346.24 or systems utilizing alternative energy sources; and 346.25 (4) to invest in a venture capital fund or enterprise that 346.26 will provide capital to other entities that are engaging in, or 346.27 that will engage in, projects or programs that have the purposes 346.28 set forth in subdivision 1. No investments may be made in a 346.29 venture capital fund or enterprise unless at least two other 346.30 unrelated investors make investments of at least $500,000 in the 346.31 venture capital fund or enterprise, and the investment by the 346.32 northeast Minnesota economic protection trust fund may not 346.33 exceed the amount of the largest investment by an unrelated 346.34 investor in the venture capital fund or enterprise. For 346.35 purposes of this subdivision, an "unrelated investor" is a 346.36 person or entity that is not related to the entity in which the 347.1 investment is made or to any individual who owns more than 40 347.2 percent of the value of the entity, in any of the following 347.3 relationships: spouse, parent, child, sibling, employee, or 347.4 owner of an interest in the entity that exceeds ten percent of 347.5 the value of all interests in it. For purposes of determining 347.6 the limitations under this clause, the amount of investments 347.7 made by an investor other than the northeast Minnesota economic 347.8 protection trust fund is the sum of all investments made in the 347.9 venture capital fund or enterprise during the period beginning 347.10 one year before the date of the investment by the northeast 347.11 Minnesota economic protection trust fund. 347.12 Money from the trust fund shall be expended only in or for 347.13 the benefit of the tax relief area defined in section 273.134, 347.14 paragraph (b). 347.15 Sec. 36. Minnesota Statutes 2000, section 298.293, is 347.16 amended to read: 347.17 298.293 [EXPENDING FUNDS.] 347.18 The funds provided by section 298.28, subdivision 11, 347.19 relating to the northeast Minnesota economic protection trust 347.20 fund, except money expended pursuant to Laws 1982, Second 347.21 Special Session, chapter 2, sections 8 to 14, shall be expended 347.22 only in an amount that does not exceed the sum of the net 347.23 interest, dividends, and earnings arising from the investment of 347.24 the trust for the preceding 12 calendar months from the date of 347.25 the authorization plus, for fiscal year 1983, $10,000,000 from 347.26 the corpus of the fund. The funds may be spent only in or for 347.27 the benefit of those areas that are tax relief areas as defined 347.28 in section 273.134, paragraph (b). If during any year the 347.29 taconite property tax account under sections 273.134 to 273.136 347.30 does not contain sufficient funds to pay the property tax relief 347.31 specified in Laws 1977, chapter 423, article X, section 4, there 347.32 is appropriated from this trust fund to the relief account 347.33 sufficient funds to pay the relief specified in Laws 1977, 347.34 chapter 423, article X, section 4. 347.35 Sec. 37. Minnesota Statutes 2000, section 298.296, 347.36 subdivision 2, is amended to read: 348.1 Subd. 2. [EXPENDITURE OF FUNDS.] Before January 1, 348.220022020, funds may be expended on projects and for 348.3 administration of the trust fund only from the net interest, 348.4 earnings, and dividends arising from the investment of the trust 348.5 at any time, including net interest, earnings, and dividends 348.6 that have arisen prior to July 13, 1982, plus $10,000,000 made 348.7 available for use in fiscal year 1983, except that any amount 348.8 required to be paid out of the trust fund to provide the 348.9 property tax relief specified in Laws 1977, chapter 423, article 348.10 X, section 4, and to make school bond payments and payments to 348.11 recipients of taconite production tax proceeds pursuant to 348.12 section 298.225, may be taken from the corpus of the trust. 348.13 Additionally, upon recommendation by the board, up to 348.14 $13,000,000 from the corpus of the trust may be made available 348.15 for use as provided in subdivision 4, and up to $10,000,000 from 348.16 the corpus of the trust may be made available for use as 348.17 provided in section 298.2961. On and after January 1,2002348.18 2020, funds may be expended on projects and for administration 348.19 from any assets of the trust. Annual administrative costs, not 348.20 including detailed engineering expenses for the projects, shall 348.21 not exceed five percent of the net interest, dividends, and 348.22 earnings arising from the trust in the preceding fiscal year. 348.23 Principal and interest received in repayment of loans made 348.24 pursuant to this section, and earnings on other investments made 348.25 under section 298.292, subdivision 2, clause (4), shall be 348.26 deposited in the state treasury and credited to the trust. 348.27 These receipts are appropriated to the board for the purposes of 348.28 sections 298.291 to 298.298. 348.29 Sec. 38. Minnesota Statutes 2000, section 298.2961, is 348.30 amended to read: 348.31 298.2961 [PRODUCER GRANTS.] 348.32 Subdivision 1. [APPROPRIATION.] (a) $10,000,000 is 348.33 appropriated from the northeast Minnesota economic protection 348.34 trust fund to a special account in the taconite area 348.35 environmental protection fund for grantsor loansto producers 348.36 on a project-by-project basis as provided in this section. 349.1 (b) The proceeds of the tax designated under section 349.2 298.28, subdivision 9b, are appropriated for grantsand loansto 349.3 producers on a project-by-project basis as provided in this 349.4 section. 349.5 Subd. 2. [PROJECTS; APPROVAL.] (a) Projects funded must be 349.6 for: 349.7 (1) environmentally unique reclamation projects; or 349.8 (2) pit or plant maintenance, repairs, expansions, or 349.9 modernizations other than for a value added iron products 349.10 plantthat extend the life of the plant. 349.11 (b) To be proposed by the board, a project must be approved 349.12 by at least eight iron range resources and rehabilitation board 349.13 members. The money for a project may be spent only upon 349.14 approval of the project by the governor. The board may submit 349.15 supplemental projects for approval at any time. 349.16 (c) The board may require that it receive an equity 349.17 percentage in any project to which it contributes under this 349.18 section. 349.19 Sec. 39. Minnesota Statutes 2000, section 298.298, is 349.20 amended to read: 349.21 298.298 [LONG-RANGE PLAN.] 349.22 Consistent with the policy established in sections 298.291 349.23 to 298.298, the iron range resources and rehabilitation board 349.24 shall prepare and present to the governor and the legislature by 349.25 January 1, 1984 a long-range plan for the use of the northeast 349.26 Minnesota economic protection trust fund for the economic 349.27 development and diversification of the tax relief area defined 349.28 in section 273.134, paragraph (b). The iron range resources and 349.29 rehabilitation board shall, before November 15 of each even 349.30 numbered year, prepare a report to the governor and legislature 349.31 updating and revising this long-range plan and reporting on the 349.32 iron range resources and rehabilitation board's progress on 349.33 those matters assigned to it by law. After January 1, 1984, no 349.34 project shall be approved by the iron range resources and 349.35 rehabilitation board which is not consistent with the goals and 349.36 objectives established in the long-range plan. 350.1 Sec. 40. Minnesota Statutes 2000, section 298.75, 350.2 subdivision 1, is amended to read: 350.3 Subdivision 1. [DEFINITIONS.] Except as may otherwise be 350.4 provided, the following words, when used in this section, shall 350.5 have the meanings herein ascribed to them. 350.6 (1) "Aggregate material" shall mean nonmetallic natural 350.7 mineral aggregate including, but not limited to sand, silica 350.8 sand, gravel,building stone,crushed rock, limestone,and350.9 granite, and borrow, but only if the borrow is transported on a 350.10 public road, street, or highway. Aggregate material shall not 350.11 include dimension stone and dimension granite. Aggregate 350.12 material must be measured or weighed after it has been extracted 350.13 from the pit, quarry, or deposit. 350.14 (2) "Person" shall mean any individual, firm, partnership, 350.15 corporation, organization, trustee, association, or other entity. 350.16 (3) "Operator" shall mean any person engaged in the 350.17 business of removing aggregate material from the surface or 350.18 subsurface of the soil, for the purpose of sale, either directly 350.19 or indirectly, through the use of the aggregate material in a 350.20 marketable product or service. 350.21 (4) "Extraction site" shall mean a pit, quarry, or deposit 350.22 containing aggregate material and any contiguous property to the 350.23 pit, quarry, or deposit which is used by the operator for 350.24 stockpiling the aggregate material. 350.25 (5) "Importer" shall mean any person who buys aggregate 350.26 material produced from a county not listed in paragraph (6) or 350.27 another state and causes the aggregate material to be imported 350.28 into a county in this state which imposes a tax on aggregate 350.29 material. 350.30 (6) "County" shall mean the counties of Pope, Stearns, 350.31 Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, 350.32 Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, 350.33 Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, 350.34 Sibley, Hennepin, Washington, Chisago, and Ramsey. County also 350.35 means any other county whose board has voted after public 350.36 hearing to impose the tax required under this section and has 351.1 registered with the commissioner to impose the tax. 351.2[EFFECTIVE DATE.] This section is effective the day 351.3 following final enactment. 351.4 Sec. 41. Minnesota Statutes 2000, section 298.75, 351.5 subdivision 2, is amended to read: 351.6 Subd. 2. A county shall impose upon every importer and 351.7 operator a production tax equal toten21 cents per cubic yard 351.8 orseven15 cents per ton of aggregate material removed except 351.9 that the county board may decide not to impose this tax if it 351.10 determines that in the previous year operators removed less than 351.11 20,000 tons or 14,000 cubic yards of aggregate material from 351.12 that county. The tax shall be imposed on aggregate material 351.13 produced in the county when the aggregate material is 351.14 transported from the extraction site or sold. When aggregate 351.15 material is stored in a stockpile within the state of Minnesota 351.16 and a public highway, road or street is not used for 351.17 transporting the aggregate material, the tax shall be imposed 351.18 either when the aggregate material is sold, or when it is 351.19 transported from the stockpile site, or when it is used from the 351.20 stockpile, whichever occurs first. The tax shall be imposed on 351.21 an importer when the aggregate material is imported into the 351.22 county that imposes the tax. 351.23 If the aggregate material is transported directly from the 351.24 extraction site to a waterway, railway, or another mode of 351.25 transportation other than a highway, road or street, the tax 351.26 imposed by this section shall be apportioned equally between the 351.27 county where the aggregate material is extracted and the county 351.28 to which the aggregate material is originally transported. If 351.29 that destination is not located in Minnesota, then the county 351.30 where the aggregate material was extracted shall receive all of 351.31 the proceeds of the tax. 351.32[EFFECTIVE DATE.] This section is effective for aggregate 351.33 material sold, imported, transported, or used from a stockpile 351.34 after June 30, 2002. 351.35 Sec. 42. Minnesota Statutes 2000, section 298.75, 351.36 subdivision 7, is amended to read: 352.1 Subd. 7. (a) All money collected as taxes under this 352.2 section shall be deposited in the county treasury and 352.3 creditedas follows, for expenditure by the county352.4board:according to this subdivision. 352.5 (b) The county auditor may retain an annual administrative 352.6 fee of up to five percent of the total taxes collected in any 352.7 year. 352.8 (c) The balance of the taxes, after any deduction under 352.9 paragraph (b), shall be credited as follows: 352.10(a) Sixty(1) 42.5 percent to the county road and bridge 352.11 fund for expenditure for the maintenance, construction and 352.12 reconstruction of roads, highways and bridges; 352.13(b) Thirty(2) 42.5 percent to theroad and bridge fund of352.14those towns as determined by the county board and to the general352.15fund or other designated fund of those cities as determined by352.16the county boardcity or town in which the mine is located, or 352.17 to the county if unorganized, to be expended for maintenance, 352.18 construction and reconstruction of roads, highways and bridges; 352.19 and 352.20(c) Ten(3) 15 percent to a special reserve fund which is 352.21 hereby established, for expenditure for the restoration of 352.22 abandoned pits, quarries, or deposits located upon public and 352.23 tax forfeited lands within the county. 352.24 If there are no abandoned pits, quarries, or deposits 352.25 located upon public or tax forfeited lands within the county, 352.26 this portion of the taxshallmay be deposited in the county 352.27 road and bridge fund for expenditure for the maintenance, 352.28 construction, and reconstruction of roads, highways, and bridges 352.29 or may be used for any other unmet reclamation need. 352.30 Reclamation shall be prioritized as follows: reclamation of 352.31 pits and quarries on public or tax-forfeited land, reclamation 352.32 of abandoned pits or quarries on private land, and reclamation 352.33 of active pits and quarries on private land. 352.34[EFFECTIVE DATE.] This section is effective July 1, 2002. 352.35 Sec. 43. Minnesota Statutes 2000, section 471.58, is 352.36 amended to read: 353.1 471.58 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS; 353.2 MEMBERSHIP.] 353.3 For the purpose of providing an areawide approach to 353.4 problems which demand coordinated and cooperative actions and 353.5 which are common to those areas of northeast Minnesota affected 353.6 by operations involved in mining iron ore and taconite and 353.7 producing concentrate therefrom, and for the purpose of 353.8 promoting the general welfare and economic development of the 353.9 cities, towns and school districts within the iron ranges area 353.10 of northeast Minnesota, any city, town or school district in 353.11 which the net tax capacity consists in part of iron ore, or 353.12 lands containing taconite or semitaconite or which is located in 353.13 whole or part in the tax relief area defined by section 273.134, 353.14 paragraph (b), may pay annual dues in the range association of 353.15 municipalities and schools. The association may sue, be sued, 353.16 intervene and act in a civil action in which the outcome of the 353.17 action will have an effect upon the interest of any of its 353.18 members. 353.19 Sec. 44. [STATE AID.] 353.20 Notwithstanding Minnesota Statutes, chapter 298, or any 353.21 other law to the contrary, a city, township, county, school 353.22 district, the taconite property tax relief fund, the iron range 353.23 resources and rehabilitation board, the range association of 353.24 municipalities and schools, the taconite environmental 353.25 protection fund, and the northeast Minnesota economic protection 353.26 trust receiving distributions under Minnesota Statutes, sections 353.27 298.225, 298.28, and 298.282, shall each receive aid in 2001 353.28 equal to the difference between the distributions it receives 353.29 under Minnesota Statutes, sections 298.225, 298.28, and 298.282, 353.30 and the distributions it would have received in 2001 under 353.31 Minnesota Statutes 2000, sections 298.225, 298.28, and 298.282, 353.32 if those distributions had been based on the average of the 353.33 production for 1998, 1999, and 2000 and disregarded the 353.34 bankruptcy of one of the taxpayers. A sum sufficient to make 353.35 distributions of aid under this section is appropriated from the 353.36 general fund to the commissioner of revenue, who must make the 354.1 distributions of this aid on or before July 1, 2001. 354.2 ARTICLE 14 354.3 METROPOLITAN AREA FINANCING AND GOVERNANCE 354.4 Section 1. Minnesota Statutes 2000, section 10A.01, 354.5 subdivision 10, is amended to read: 354.6 Subd. 10. [CANDIDATE.] "Candidate" means an individual who 354.7 seeks nomination or election as a state constitutional officer, 354.8 legislator, or judge. "Candidate" also means an individual who 354.9 seeks nomination or election to the metropolitan council. An 354.10 individual is deemed to seek nomination or election if the 354.11 individual has taken the action necessary under the law of this 354.12 state to qualify for nomination or election, has received 354.13 contributions or made expenditures in excess of $100, or has 354.14 given implicit or explicit consent for any other person to 354.15 receive contributions or make expenditures in excess of $100, 354.16 for the purpose of bringing about the individual's nomination or 354.17 election. A candidate remains a candidate until the candidate's 354.18 principal campaign committee is dissolved as provided in section 354.19 10A.24. 354.20 Sec. 2. Minnesota Statutes 2000, section 10A.09, 354.21 subdivision 6a, is amended to read: 354.22 Subd. 6a. [LOCAL OFFICIALS.] A local official required to 354.23 file a statement under this section must file it with the 354.24 governing body of the official's political subdivision, except 354.25 that a candidate for or member of the metropolitan council shall 354.26 file the statement with the board. The governing body must 354.27 maintain statements filed with it under this subdivision as 354.28 public data. 354.29 Sec. 3. Minnesota Statutes 2000, section 10A.27, 354.30 subdivision 1, is amended to read: 354.31 Subdivision 1. [CONTRIBUTION LIMITS.] (a) Except as 354.32 provided in subdivision 2, a candidate must not permit the 354.33 candidate's principal campaign committee to accept aggregate 354.34 contributions made or delivered by any individual, political 354.35 committee, or political fund in excess of the following: 354.36 (1) to candidates for governor and lieutenant governor 355.1 running together, $2,000 in an election year for the office 355.2 sought and $500 in other years; 355.3 (2) to a candidate for attorney general, $1,000 in an 355.4 election year for the office sought and $200 in other years; 355.5 (3) to a candidate for the office of secretary of state or 355.6 state auditor, $500 in an election year for the office sought 355.7 and $100 in other years; 355.8 (4) to a candidate for state senator, $500 in an election 355.9 year for the office sought and $100 in other years; and 355.10 (5) to a candidate for state representative or metropolitan 355.11 council member, $500 in an election year for the office sought 355.12 and $100 inthe othera nonelection year. 355.13 (b) The following deliveries are not subject to the 355.14 bundling limitation in this subdivision: 355.15 (1) delivery of contributions collected by a member of the 355.16 candidate's principal campaign committee, such as a block worker 355.17 or a volunteer who hosts a fund raising event, to the 355.18 committee's treasurer; and 355.19 (2) a delivery made by an individual on behalf of the 355.20 individual's spouse. 355.21 Sec. 4. Minnesota Statutes 2000, section 15.0597, 355.22 subdivision 1, is amended to read: 355.23 Subdivision 1. [DEFINITIONS.] As used in this section, the 355.24 following terms shall have the meanings given them. 355.25 (a) "Agency" means (1) a state board, commission, council, 355.26 committee, authority, task force, including an advisory task 355.27 force created under section 15.014 or 15.0593, a group created 355.28 by executive order of the governor, or other similar multimember 355.29 agency created by law and having statewide jurisdiction; and (2) 355.30the metropolitan council,a metropolitan agency, capitol area 355.31 architectural and planning board, and any agency with a regional 355.32 jurisdiction created in this state pursuant to an interstate 355.33 compact. 355.34 (b) "Vacancy" or "vacant agency position" means (1) a 355.35 vacancy in an existing agency, or (2) a new, unfilled agency 355.36 position. Vacancy includes a position that is to be filled 356.1 through appointment of a nonlegislator by a legislator or group 356.2 of legislators; vacancy does not mean (1) a vacant position on 356.3 an agency composed exclusively of persons employed by a 356.4 political subdivision or another agency, or (2) a vacancy to be 356.5 filled by a person required to have a specific title or position. 356.6 (c) "Secretary" means the secretary of state. 356.7 Sec. 5. Minnesota Statutes 2000, section 204B.06, 356.8 subdivision 4, is amended to read: 356.9 Subd. 4. [PARTICULAR OFFICES.] Candidates who seek 356.10 nomination for the following offices shall state the following 356.11 additional information on the affidavit: 356.12 (a) for United States senator, that the candidate will be 356.13 30 years of age or older and a citizen of the United States for 356.14 not less than nine years on the next January 3 or, in the case 356.15 of an election to fill a vacancy, within 21 days after the 356.16 special election; 356.17 (b) for United States representative, that the candidate 356.18 will be 25 years of age or older and a citizen of the United 356.19 States for not less than seven years on the next January 3 or, 356.20 in the case of an election to fill a vacancy, within 21 days 356.21 after the special election; 356.22 (c) for governor or lieutenant governor, that on the first 356.23 Monday of the next January the candidate will be 25 years of age 356.24 or older and, on the day of the state general election, a 356.25 resident of Minnesota for not less than one year; 356.26 (d) for supreme court justice, court of appeals judge, or 356.27 district court judge, that the candidate is learned in the law; 356.28 (e) for metropolitan council, county, municipal, school 356.29 district, or special district office, that the candidate meets 356.30 any other qualifications for that office prescribed by law; 356.31 (f) for senator or representative in the legislature, that 356.32 on the day of the general or special election to fill the office 356.33 the candidate will have resided not less than one year in the 356.34 state and not less than six months in the legislative district 356.35 from which the candidate seeks election. 356.36 Sec. 6. Minnesota Statutes 2000, section 204B.09, 357.1 subdivision 1, is amended to read: 357.2 Subdivision 1. [CANDIDATES IN STATE AND COUNTY GENERAL 357.3 ELECTIONS.] Except as otherwise provided by this subdivision, 357.4 affidavits of candidacy and nominating petitions for county, 357.5 metropolitan council, state and federal offices filled at the 357.6 state general election shall be filed not more than 70 days nor 357.7 less than 56 days before the state primary. The affidavit may 357.8 be prepared and signed at any time between 60 days before the 357.9 filing period opens and the last day of the filing period. 357.10 Notwithstanding other law to the contrary, the affidavit of 357.11 candidacy must be signed in the presence of a notarial officer. 357.12 Candidates for presidential electors may file petitions on or 357.13 before the state primary day. Nominating petitions to fill 357.14 vacancies in nominations shall be filed as provided in section 357.15 204B.13. No affidavit or petition shall be accepted later than 357.16 5:00 p.m. on the last day for filing. Affidavits and petitions 357.17 for offices to be voted on in only one county shall be filed 357.18 with the county auditor of that county. Affidavits and 357.19 petitions for offices to be voted on in more than one county 357.20 shall be filed with the secretary of state. 357.21 Sec. 7. Minnesota Statutes 2000, section 204B.09, 357.22 subdivision 1a, is amended to read: 357.23 Subd. 1a. [ABSENT CANDIDATES.] A candidate for special 357.24 district, county, metropolitan council, state, or federal office 357.25 who will be absent from the state during the filing period may 357.26 submit a properly executed affidavit of candidacy, the 357.27 appropriate filing fee, and any necessary petitions in person to 357.28 the filing officer. The candidate shall state in writing the 357.29 reason for being unable to submit the affidavit during the 357.30 filing period. The affidavit, filing fee, and petitions must be 357.31 submitted to the filing officer during the seven days 357.32 immediately preceding the candidate's absence from the state. 357.33 Nominating petitions may be signed during the 14 days 357.34 immediately preceding the date when the affidavit of candidacy 357.35 is filed. 357.36 Sec. 8. Minnesota Statutes 2000, section 204B.11, is 358.1 amended to read: 358.2 204B.11 [CANDIDATES; FILING FEES; PETITION IN PLACE OF 358.3 FILING FEE.] 358.4 Subdivision 1. [AMOUNT; DISHONORED CHECKS; CONSEQUENCES.] 358.5 Except as provided by subdivision 2, a filing fee shall be paid 358.6 by each candidate who files an affidavit of candidacy. The fee 358.7 shall be paid at the time the affidavit is filed. The amount of 358.8 the filing fee shall vary with the office sought as follows: 358.9 (a) for the office of governor, lieutenant governor, 358.10 attorney general, state auditor, state treasurer, secretary of 358.11 state, representative in Congress, judge of the supreme court, 358.12 judge of the court of appeals, or judge of the district court, 358.13 $300; 358.14 (b) for the office of senator in Congress, $400; 358.15 (c) for office of senator or representative in the 358.16 legislature, $100; 358.17 (d) for a metropolitan council or county office, $50; and 358.18 (e) for the office of soil and water conservation district 358.19 supervisor, $20. 358.20 For the office of presidential elector, and for those 358.21 offices for which no compensation is provided, no filing fee is 358.22 required. 358.23 The filing fees received by the county auditor shall 358.24 immediately be paid to the county treasurer. The filing fees 358.25 received by the secretary of state shall immediately be paid to 358.26 the state treasurer. 358.27 When an affidavit of candidacy has been filed with the 358.28 appropriate filing officer and the requisite filing fee has been 358.29 paid, the filing fee shall not be refunded. If a candidate's 358.30 filing fee is paid with a check, draft, or similar negotiable 358.31 instrument for which sufficient funds are not available or that 358.32 is dishonored, notice to the candidate of the worthless 358.33 instrument must be sent by the filing officer via registered 358.34 mail no later than immediately upon the closing of the filing 358.35 deadline with return receipt requested. The candidate will have 358.36 five days from the time the filing officer receives proof of 359.1 receipt to issue a check or other instrument for which 359.2 sufficient funds are available. The candidate issuing the 359.3 worthless instrument is liable for a service charge pursuant to 359.4 section 332.50. If adequate payment is not made, the name of 359.5 the candidate must not appear on any official ballot and the 359.6 candidate is liable for all costs incurred by election officials 359.7 in removing the name from the ballot. 359.8 Subd. 2. [PETITION IN PLACE OF FILING FEE.] At the time of 359.9 filing an affidavit of candidacy, a candidate may present a 359.10 petition in place of the filing fee. The petition may be signed 359.11 by any individual eligible to vote for the candidate. A 359.12 nominating petition filed pursuant to section 204B.07 or 359.13 204B.13, subdivision 4, is effective as a petition in place of a 359.14 filing fee if the nominating petition includes a prominent 359.15 statement informing the signers of the petition that it will be 359.16 used for that purpose. 359.17 The number of signatures on a petition in place of a filing 359.18 fee shall be as follows: 359.19 (a) for a state office voted on statewide, or for president 359.20 of the United States, or United States senator, 2,000; 359.21 (b) for a congressional office, 1,000; 359.22 (c) for a county, or metropolitan council, or legislative 359.23 office, or for the office of district judge, 500; and 359.24 (d) for any other office which requires a filing fee as 359.25 prescribed by law, municipal charter, or ordinance, the lesser 359.26 of 500 signatures or five percent of the total number of votes 359.27 cast in the municipality, ward, or other election district at 359.28 the preceding general election at which that office was on the 359.29 ballot. 359.30 An official with whom petitions are filed shall make sample 359.31 forms for petitions in place of filing fees available upon 359.32 request. 359.33 Sec. 9. Minnesota Statutes 2000, section 204B.135, 359.34 subdivision 2, is amended to read: 359.35 Subd. 2. [OTHER ELECTION DISTRICTS.] For purposes of this 359.36 subdivision, "local government election district" means a county 360.1 district, park and recreation district, school district, 360.2 metropolitan council district, or soil and water conservation 360.3 district. Local government election districts, other than city 360.4 wards covered by subdivision 1, may not be redistricted until 360.5 precinct boundaries are reestablished under section 204B.14, 360.6 subdivision 3, paragraph (c). Election districts covered by 360.7 this subdivision must be redistricted within 80 days of the time 360.8 when the legislature has been redistricted or at least 15 weeks 360.9 before the state primary election in the year ending in two, 360.10 whichever comes first. 360.11 Sec. 10. Minnesota Statutes 2000, section 204B.32, 360.12 subdivision 2, is amended to read: 360.13 Subd. 2. [ALLOCATION OF ELECTION EXPENSES.] The secretary 360.14 of state shall develop procedures for the allocation of election 360.15 expenses among counties, municipalities,andschool districts, 360.16 and the metropolitan council for elections that are held 360.17 concurrently. The following expenses must be included in the 360.18 procedures: salaries of election judges; postage for absentee 360.19 ballots and applications; preparation of polling places; 360.20 preparation and testing of electronic voting systems; ballot 360.21 preparation; publication of election notices and sample ballots; 360.22 transportation of ballots and election supplies; and 360.23 compensation for administrative expenses of the county auditor, 360.24 municipal clerk, or school district clerk. 360.25 Sec. 11. Minnesota Statutes 2000, section 204D.02, 360.26 subdivision 1, is amended to read: 360.27 Subdivision 1. [OFFICERS.] All elective state, 360.28 metropolitan council, and county officers, justices of the 360.29 supreme court, judges of the court of appeals and district 360.30 court, state senators and state representatives, and senators 360.31 and representatives in Congress shall be elected at the state 360.32 general election held in the year before their terms of office 360.33 expire. Presidential electors shall be chosen at the state 360.34 general election held in the year before the expiration of a 360.35 term of a president of the United States. 360.36 Sec. 12. Minnesota Statutes 2000, section 204D.08, 361.1 subdivision 6, is amended to read: 361.2 Subd. 6. [STATE AND COUNTY NONPARTISAN PRIMARY BALLOT.] 361.3 The state and county nonpartisan primary ballot shall be headed 361.4 "State and County Nonpartisan Primary Ballot." It shall be 361.5 printed on canary paper. The names of candidates for nomination 361.6 to the supreme court, court of appeals, district court, and 361.7 all metropolitan council and county offices shall be placed on 361.8 this ballot. 361.9 No candidate whose name is placed on the state and county 361.10 nonpartisan primary ballot shall be designated or identified as 361.11 the candidate of any political party or in any other manner 361.12 except as expressly provided by law. 361.13 Sec. 13. [204D.265] [VACANCY IN OFFICE OF METROPOLITAN 361.14 COUNCIL MEMBERS.] 361.15 Subdivision 1. [ELECTION IN 30 TO 60 DAYS.] Except as 361.16 provided in subdivision 3, a vacancy in the office of 361.17 metropolitan council member must be filled at a special election 361.18 scheduled by the metropolitan council on a date not less than 30 361.19 nor more than 60 days after the vacancy occurs. The special 361.20 primary or special election may be held on the same day as a 361.21 regular primary or regular election but the special election 361.22 must be held not less than 14 days after the special primary. 361.23 The person elected at the special election takes office 361.24 immediately after receiving the certificate of election and 361.25 taking the oath of office and serves the remainder of the 361.26 unexpired term. If the metropolitan council districts have been 361.27 redrawn since the commencement of the term of the vacant office, 361.28 the election must be based on the district as redrawn. 361.29 Subd. 2. [WHEN VICTOR SEATED IMMEDIATELY.] If a vacancy 361.30 for which a special election is required occurs less than 60 361.31 days before the general election preceding the end of the term, 361.32 the vacancy must be filled by the person elected at that 361.33 election for the ensuing term, who takes office immediately 361.34 after receiving the certificate of election and taking the oath 361.35 of office. 361.36 Subd. 3. [INABILITY OR REFUSAL TO SERVE.] In addition to 362.1 when the events specified in section 351.02 happen, a vacancy in 362.2 the office of metropolitan council member may be declared by the 362.3 metropolitan council when a member is unable to serve in the 362.4 office or attend council meetings for a 90-day period because of 362.5 illness or because of absence from, or refusal to, attend 362.6 council meetings for a 90-day period. If any of the conditions 362.7 described or referred to in this subdivision occur, the council 362.8 may, after the council by resolution has declared a vacancy to 362.9 exist, make an appointment to fill the vacancy at a regular or 362.10 special meeting for the remainder of the unexpired term or until 362.11 the ill or absent member is again able to resume duties and 362.12 attend council meetings, whichever is earlier. If the council 362.13 determines that the original member is again able to resume 362.14 duties and attend council meetings, the council must say so in a 362.15 resolution and remove the appointed officeholder and restore the 362.16 original member to office. 362.17 Sec. 14. Minnesota Statutes 2000, section 204D.27, is 362.18 amended by adding a subdivision to read: 362.19 Subd. 12. [SPECIAL METROPOLITAN COUNCIL ELECTION.] (a) 362.20 [STATE CANVASSING BOARD.] Except as provided in subdivision 4, 362.21 the state canvassing board shall complete its canvass of a 362.22 special election for metropolitan council member and declare the 362.23 results within four days, excluding Sundays and legal holidays, 362.24 after the returns of the county canvassing boards are certified 362.25 to the secretary of the state. 362.26 (b) [ELECTION CONTEST.] In case of a contest of a special 362.27 election for metropolitan council member, the notice of contest 362.28 must be filed within two days after the canvass is completed, 362.29 excluding Sundays and legal holidays. Otherwise the contest 362.30 must proceed in the manner provided by law for contesting 362.31 elections. 362.32 (c) [CERTIFICATE OF ELECTION.] A certificate of election in 362.33 a special election for metropolitan council member must be 362.34 issued by the county auditor or the secretary of state to the 362.35 individual declared elected by the county or state canvassing 362.36 board two days after the appropriate canvassing board finishes 363.1 canvassing the returns for the election, excluding Sundays and 363.2 legal holidays. In case of a contest, the certificate must not 363.3 be issued until the district court decides the contest. 363.4 Sec. 15. Minnesota Statutes 2000, section 209.02, 363.5 subdivision 1, is amended to read: 363.6 Subdivision 1. Any eligible voter, including a candidate, 363.7 may contest in the manner provided in this chapter: (1) the 363.8 nomination or election of any person for whom the voter had the 363.9 right to vote if that person is declared nominated or elected to 363.10 the senate or the house of representatives of the United States, 363.11 or to a statewide, metropolitan council, county, legislative, 363.12 municipal, school, or district court office; or (2) the declared 363.13 result of a constitutional amendment or other question voted 363.14 upon at an election. The contest may be brought over an 363.15 irregularity in the conduct of an election or canvass of votes, 363.16 over the question of who received the largest number of votes 363.17 legally cast, over the number of votes legally cast in favor of 363.18 or against a question, or on the grounds of deliberate, serious, 363.19 and material violations of the Minnesota Election Law. 363.20 Sec. 16. Minnesota Statutes 2000, section 211A.01, 363.21 subdivision 3, is amended to read: 363.22 Subd. 3. [CANDIDATE.] "Candidate" means an individual who 363.23 seeks nomination or election to a county, municipal, school 363.24 district, or other political subdivision office. This 363.25 definition does not include an individual seeking a judicial 363.26 office or a seat on the metropolitan council. For purposes of 363.27 sections 211A.01 to 211A.05 and 211A.07, "candidate" also 363.28 includes a candidate for the United States Senate or House of 363.29 Representatives. 363.30 Sec. 17. Minnesota Statutes 2000, section 211B.01, 363.31 subdivision 3, is amended to read: 363.32 Subd. 3. [CANDIDATE.] "Candidate" means an individual who 363.33 seeks nomination or election to a federal, 363.34 statewide, metropolitan council, legislative, judicial, or local 363.35 office including special districts, school districts, towns, 363.36 home rule charter and statutory cities, and counties, except 364.1 candidates for president and vice-president of the United States. 364.2 Sec. 18. Minnesota Statutes 2000, section 353D.01, 364.3 subdivision 2, is amended to read: 364.4 Subd. 2. [ELIGIBILITY.] (a) Eligibility to participate in 364.5 the defined contribution plan is available to: 364.6 (1) elected local government officials of a governmental 364.7 subdivision who elect to participate in the plan under section 364.8 353D.02, subdivision 1, and who, for the elected service 364.9 rendered to a governmental subdivision, are not members of the 364.10 public employees retirement association within the meaning of 364.11 section 353.01, subdivision 7; 364.12 (2) physicians who, if they did not elect to participate in 364.13 the plan under section 353D.02, subdivision 2, would meet the 364.14 definition of member under section 353.01, subdivision 7; 364.15 (3) basic and advanced life support emergency medical 364.16 service personnel employed by or providing services for any 364.17 public ambulance service or privately operated ambulance service 364.18 that receives an operating subsidy from a governmental entity 364.19 that elects to participate under section 353D.02, subdivision 3; 364.20 and 364.21 (4) members of a municipal rescue squad associated with 364.22 Litchfield in Meeker county, or of a county rescue squad 364.23 associated with Kandiyohi county, if an independent nonprofit 364.24 rescue squad corporation, incorporated under chapter 317A, 364.25 performing emergency management services, and if not affiliated 364.26 with a fire department or ambulance service and if its members 364.27 are not eligible for membership in that fire department's or 364.28 ambulance service's relief association or comparable pension 364.29 plan. 364.30 (b) For purposes of this chapter, an elected local 364.31 government official includes a person appointed to fill a 364.32 vacancy in an elective office and a member of the metropolitan 364.33 council. Service as an elected local government official only 364.34 includes service for the governmental subdivision for which the 364.35 official was elected by the public-at-large. Service as an 364.36 elected local government official ceases and eligibility to 365.1 participate terminates when the person ceases to be an elected 365.2 official. An elected local government official does not include 365.3 an elected county sheriff. 365.4 (c) Elected local government officials, physicians, first 365.5 response personnel and emergency medical service personnel, and 365.6 rescue squad personnel who are currently covered by a public or 365.7 private pension plan because of their employment or provision of 365.8 services are not eligible to participate in the public employees 365.9 defined contribution plan. 365.10 (d) A former participant is a person who has terminated 365.11 eligible employment or service and has not withdrawn the value 365.12 of the person's individual account. 365.13 Sec. 19. [375.027] [METROPOLITAN COUNTY COMMISSION 365.14 MEMBERS; REDISTRICTING.] 365.15 Notwithstanding section 375.01, 375.025, 375.056, or any 365.16 other law to the contrary, after 2000, metropolitan counties, as 365.17 defined in section 473.121, subdivision 4, have the number of 365.18 county commission members, and must be redistricted, as provided 365.19 in section 473.124. 365.20 Sec. 20. Minnesota Statutes 2000, section 473.123, 365.21 subdivision 1, is amended to read: 365.22 Subdivision 1. [CREATION.] A metropolitan council with 365.23 jurisdiction in the metropolitan area is established as a public 365.24 corporation and political subdivision of the state. It shall be 365.25 under the supervision and control of17members, all of whom365.26shall be residents of the metropolitan areaelected from 365.27 districts as provided in section 473.124. 365.28 Sec. 21. Minnesota Statutes 2000, section 473.123, 365.29 subdivision 4, is amended to read: 365.30 Subd. 4. [CHAIR; APPOINTMENT, OFFICERS, SELECTION; DUTIES 365.31 AND COMPENSATION.] (a) The chair of the metropolitan council 365.32shall be appointed by the governor as the 17th voting member365.33thereof by and with the advice and consent of the senate to365.34serve at the pleasure of the governor to represent the365.35metropolitan area at large. Senate confirmation shall be as365.36provided by section 15.066is elected by and from among the 366.1 members of the council to serve a one-year term. 366.2 The chair of the metropolitan council shall, if present, 366.3 preside at meetings of the council, have the primary 366.4 responsibility for meeting with local elected officials, serve 366.5 as the principal legislative liaison, present to the governor 366.6 and the legislature, after council approval, the council's plans 366.7 for regional governance and operations, serve as the principal 366.8 spokesperson of the council, and perform other duties assigned 366.9 by the council or by law. 366.10 (b) The metropolitan council shall elect other officers as 366.11 it deems necessary for the conduct of its affairs for a one-year 366.12 term. A secretary and treasurer need not be members of the 366.13 metropolitan council. Meeting times and places shall be fixed 366.14 by the metropolitan council and special meetings may be called 366.15 by a majority of the members of the metropolitan council or by 366.16 the chair. The chair and each metropolitan council member shall 366.17 be reimbursed for actual and necessary expenses. The annual 366.18 budget of the council shall provide as a separate account 366.19 anticipated expenditures for compensation, travel, and 366.20 associated expenses for the chair and members, and compensation 366.21 or reimbursement shall be made to the chair and members only 366.22 when budgeted. 366.23 (c) Each member of the council shall attend and participate 366.24 in council meetings and meet regularly with local elected 366.25 officials and legislative members from the council member's 366.26 district. Each council member shall serve on at least one 366.27 division committee for transportation, environment, or community 366.28 development. 366.29 (d) In the performance of its duties the metropolitan 366.30 council may adopt policies and procedures governing its 366.31 operation, establish committees, and, when specifically 366.32 authorized by law, make appointments to other governmental 366.33 agencies and districts. 366.34 Sec. 22. Minnesota Statutes 2000, section 473.123, 366.35 subdivision 7, is amended to read: 366.36 Subd. 7. [PERFORMANCE AND BUDGET ANALYST.] The council,367.1other than the chair,may hire a performance and budget analyst 367.2 to assist the16councilmemberswith policy and budget analysis 367.3 and evaluation of the council's performance. The analyst may 367.4 recommend and the council may hire up to two additional analysts 367.5 to assist the council with performance evaluation and budget 367.6 analysis. The analyst and any additional analysts hired shall 367.7 serve at the pleasure of the council members. The16 members of367.8thecouncil may prescribe all terms and conditions for the 367.9 employment of the analyst and any additional analysts hired, 367.10 including, but not limited to, the fixing of compensation, 367.11 benefits, and insurance. The analyst shall prepare the budget 367.12 for the provisions of thissectionsubdivision and submit the 367.13 budget for council approval and inclusion in the council's 367.14 overall budget. 367.15 Sec. 23. [473.124] [METROPOLITAN COUNCIL ELECTION; MEMBERS 367.16 ELECTED AS COUNTY COMMISSIONERS.] 367.17 Subdivision 1. [NUMBER OF MEMBERS.] The metropolitan 367.18 council consists of 25 members, except that the legislature may 367.19 by law increase or decrease the number of members by up to eight 367.20 in order to increase the number of county commissioners who are 367.21 elected from metropolitan council districts as provided in this 367.22 section. 367.23 Subd. 2. [DISTRICTS.] The legislature shall redraw the 367.24 boundaries of metropolitan council districts after each federal 367.25 decennial census. The districts must be bounded by town, 367.26 municipal, ward, or precinct lines. The districts must be 367.27 composed of compact, convenient, contiguous territory and must 367.28 be substantially equal in population. The population of the 367.29 largest district must not exceed the population of the smallest 367.30 district by more than ten percent, unless the result would force 367.31 a voting precinct to be split. A metropolitan council district 367.32 may not include territory in more than one county unless 367.33 necessary to meet equal population requirements. If all the 367.34 redrawn metropolitan council districts in a county lie wholly 367.35 within the county, the metropolitan council districts also serve 367.36 as county commissioner districts. If the number of metropolitan 368.1 council districts that also serve as county commissioner 368.2 districts in a county is less than the number of members of the 368.3 county board as provided under section 375.01, the remaining 368.4 members of the county board must be elected from the county at 368.5 large, except that, if a county has no redrawn metropolitan 368.6 council districts that lie wholly within it, the county must be 368.7 divided into as many county commissioner districts as there are 368.8 members of the county board. 368.9 Subd. 3. [ELECTION.] In a county whose metropolitan 368.10 council districts all lie wholly within the county, each 368.11 candidate for the metropolitan council is also a candidate for 368.12 the county board and, if elected, holds both offices at the same 368.13 time. In a county whose metropolitan council districts do not 368.14 all lie wholly within the county, a candidate may separately 368.15 file for, be elected to, and hold both the offices of 368.16 metropolitan council member and county commissioner at the same 368.17 time. 368.18 Subd. 4. [TERMS.] Metropolitan council members serve terms 368.19 as provided in section 375.03. 368.20 Sec. 24. Minnesota Statutes 2000, section 473.146, 368.21 subdivision 4, is amended to read: 368.22 Subd. 4. [TRANSPORTATION PLANNING.] The metropolitan 368.23 council is the designated planning agency for any long-range 368.24 comprehensive transportation planning required by section 134 of 368.25 the Federal Highway Act of 1962, Section 4 of Urban Mass 368.26 Transportation Act of 1964 and Section 112 of Federal Aid 368.27 Highway Act of 1973 and other federal transportation laws. The 368.28 council shall assure administration and coordination of 368.29 transportation planning with appropriate state, regional and 368.30 other agencies, counties, and municipalities, and shall 368.31 establishana transportation advisorybodyboard consisting of 368.32citizens, representatives of municipalities, counties, and state368.33agencies in fulfillment of the planning responsibilities of the368.34council36 members appointed as follows: 368.35 (1) 16 municipal elected officials, representing each of 368.36 the metropolitan council districts, nominated by the association 369.1 of metropolitan municipalities and appointed by the council; 369.2 (2) 12 elected officials, one member appointed by each of 369.3 the county boards of Carver, Scott, and Washington counties, two 369.4 members appointed by each of the county boards of Anoka, Dakota, 369.5 and Ramsey counties, and three members appointed by the Hennepin 369.6 county board; 369.7 (3) four modal representatives appointed by the council, of 369.8 which two must represent public transit, one must represent the 369.9 freight transportation industry, and one must represent 369.10 nonmotorized transportation; 369.11 (4) one member appointed by the commissioner of 369.12 transportation; 369.13 (5) one member appointed by the commissioner of the 369.14 pollution control agency; 369.15 (6) one member appointed by the metropolitan airports 369.16 commission; and 369.17 (7) one member appointed by the council who shall serve as 369.18 the chair of the advisory board. 369.19 The transportation board established under this section succeeds 369.20 any transportation advisory board appointed and functioning 369.21 before the effective date of this section. 369.22 Sec. 25. Minnesota Statutes 2000, section 473.39, is 369.23 amended by adding a subdivision to read: 369.24 Subd. 1h. [OBLIGATIONS.] After July 1, 2001, in addition 369.25 to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, and 1g, the 369.26 council may issue certificates of indebtedness, bonds, or other 369.27 obligations under this section for capital expenditures as 369.28 prescribed in the council's regional transit master plan and 369.29 transit capital improvement program and for related costs, 369.30 including the costs of issuance and sale of the obligations. 369.31 The amount of the obligations issued under this subdivision in 369.32 any year must not exceed an amount equal to the following 369.33 limitations, except as provided in this subdivision: 369.34 (1) for 2002, the limitation is $45,000,000; and 369.35 (2) for each subsequent year, the limitation is equal to 369.36 the last year's limitation calculated under this subdivision 370.1 adjusted for inflation using the United States Department of 370.2 Labor's Bureau of Labor Statistics Minneapolis-St. Paul Consumer 370.3 Price Index for All Urban Consumers (CPI-U) for the last 370.4 taxes-payable-year. For any year in which the council does not 370.5 issue obligations totaling the limitation calculated under this 370.6 subdivision, the remaining available limitation amount may be 370.7 carried forward to later years. The council may issue 370.8 obligations in a carry-forward year in an amount exceeding the 370.9 annual limitation amount carried forward, but the limitation 370.10 amount carried forward is not a permanent increase in the annual 370.11 limitation calculated under this subdivision. 370.12 Sec. 26. Minnesota Statutes 2000, section 473.446, 370.13 subdivision 1, is amended to read: 370.14 Subdivision 1. [WITHIN TRANSIT TAXING DISTRICT.] For the 370.15 purposes of sections 473.405 to 473.449 and the metropolitan 370.16 transit system, except as otherwise provided in this subdivision 370.17 and subdivision 1b, the council shall levy each year upon all 370.18 taxable property within the metropolitan transit taxing 370.19 district, defined in subdivision 2, a transit tax consisting of: 370.20 (a) an amount which shall be used for payment of the 370.21 expenses of operating transit and paratransit service and to 370.22 provide for payment of obligations issued by the council under 370.23 section 473.436, subdivision 6; 370.24 (b) an additional amount, if any, the council determines to 370.25 be necessary to provide for the full and timely payment of its 370.26 certificates of indebtedness and other obligations outstanding 370.27 on July 1, 1985, to which property taxes under this section have 370.28 been pledged; and 370.29 (c) an additional amount necessary to provide full and 370.30 timely payment of certificates of indebtedness, bonds, including 370.31 refunding bonds or other obligations issued or to be issued 370.32 under section 473.39 by the council for purposes of acquisition 370.33 and betterment of property and other improvements of a capital 370.34 nature and to which the council has specifically pledged tax 370.35 levies under this clause. 370.36 The property tax levied by the council for general purposes 371.1 under paragraph (a) must not exceed the following amount for the 371.2 years specified: 371.3 (1) for taxes payable in 1995, the council's property tax 371.4 levy limitation for general transit purposes is equal to the 371.5 former regional transit board's property tax levy limitation for 371.6 general transit purposes under this subdivision, for taxes 371.7 payable in 1994, multiplied by an index for market valuation 371.8 changes equal to the total market valuation of all taxable 371.9 property located within the metropolitan transit taxing district 371.10 for the current taxes payable year divided by the total market 371.11 valuation of all taxable property located within the 371.12 metropolitan transit taxing district for the previous taxes 371.13 payable year;and371.14 (2) for taxes payable in 1996and subsequent yearsthrough 371.15 2001, the product of (i) the council's property tax levy 371.16 limitation for general transit purposes for the previous year 371.17 determined under this subdivision before reduction by the amount 371.18 levied by any municipality in the previous year under section 371.19 473.388, subdivision 7, multiplied by (ii) an index for market 371.20 valuation changes equal to the total market valuation of all 371.21 taxable property located within the metropolitan transit taxing 371.22 district for the current taxes payable year divided by the total 371.23 market valuation of all taxable property located within the 371.24 metropolitan transit taxing district for the previous taxes 371.25 payable year, minus the amount levied by any municipality in the 371.26 current levy year under section 473.388, subdivision 7; 371.27 (3) for taxes payable in 2003, the council's property tax 371.28 levy limitation for general transit purposes is equal to (i) the 371.29 council's property tax levy limitation for general transit 371.30 purposes for the previous year, determined under this 371.31 subdivision before reduction by the amount levied by any 371.32 municipality for the previous year under section 473.388, 371.33 subdivision 7, multiplied by (ii) an index for market valuation 371.34 changes equal to the total market valuation of all taxable 371.35 property located within the metropolitan transit taxing district 371.36 for the current taxes payable year divided by the total market 372.1 valuation of all taxable property located within the 372.2 metropolitan transit taxing district for the previous taxes 372.3 payable year, minus (iii) the amount levied by a municipality 372.4 under section 473.388, subdivision 7, for the same taxes payable 372.5 year as the council's limitation, plus (iv) $17,400,000. The 372.6 council must distribute 13.8 percent of any amount levied 372.7 pursuant to item (iv) as additional financial assistance under 372.8 section 473.388; 372.9 (4) for taxes payable in 2004, the council's property tax 372.10 levy limitation for general transit purposes is equal to (i) the 372.11 council's property tax levy limitation for general transit 372.12 purposes for the previous year, determined under this 372.13 subdivision before reduction by the amount levied by any 372.14 municipality for the previous year under section 473.388, 372.15 subdivision 7, minus (ii) $17,400,000, multiplied by (iii) the 372.16 index for market valuation changes as described in clause (3), 372.17 minus (iv) the amount levied by a municipality under section 372.18 473.388, subdivision 7, for the same taxes payable year as the 372.19 council's limitation, plus (v) $11,500,000. The council must 372.20 distribute 13.8 percent of any amount levied pursuant to item 372.21 (iv) as additional financial assistance under section 473.388; 372.22 and 372.23 (5) for taxes payable in 2005 and thereafter, the council's 372.24 property tax levy limitation for general transit purposes is 372.25 equal to (i) the council's property tax levy limitation for 372.26 general transit purposes for the previous year, determined under 372.27 this subdivision before reduction by the amount levied by any 372.28 municipality for the previous year under section 473.388, 372.29 subdivision 7, but excluding the amount in clause (4), item 372.30 (iv), multiplied by (ii) the index for market valuation changes 372.31 as described in clause (3), minus (iii) the amount levied by a 372.32 municipality under section 473.388, subdivision 7, for the same 372.33 taxes payable year as the council's limitation, plus (iv) 372.34 $11,500,000 times an index for market valuation changes equal to 372.35 the total market valuation of all taxable property located 372.36 within the transit district for the current taxes payable year 373.1 divided by the total market valuation of all taxable property 373.2 located in the district for the taxes payable year 2003. In 373.3 2005, and each year thereafter, the council must distribute 13.8 373.4 percent of any amount levied pursuant to item (iv) as additional 373.5 financial assistance under section 473.388, subdivision 7. 373.6 The portion of the property tax levy for transit district 373.7 operating purposes attributable to a municipality that has 373.8 exercised a local levy option under section 473.388, subdivision 373.9 7, is the amount as determined under subdivision 1b. The 373.10 portion of the property tax levy for transit district operating 373.11 purposes attributable to the remaining municipalities within the 373.12 transit district is found by subtracting the portions 373.13 attributable to the municipalities that have exercised a local 373.14 levy option under section 473.388, subdivision 7. 373.15 For the taxes payable year 1995, the index for market 373.16 valuation changes shall be multiplied by an amount equal to the 373.17 sum of the regional transit board's property tax levy limitation 373.18 for the taxes payable year 1994 and $160,665. The $160,665 373.19 increase shall be a permanent adjustment to the levy limit base 373.20 used in determining the regional transit board's property tax 373.21 levy limitation for general purposes for subsequent taxes 373.22 payable years. 373.23 For the purpose of determining the council's property tax 373.24 levy limitation for general transit purposes under this 373.25 subdivision, "total market valuation" means the total market 373.26 valuation of all taxable property within the metropolitan 373.27 transit taxing district without valuation adjustments for fiscal 373.28 disparities (chapter 473F), tax increment financing (sections 373.29 469.174 to 469.179), and high voltage transmission lines 373.30 (section 273.425). 373.31 The county auditor shall reduce the tax levied pursuant to 373.32 this section and section 473.388 on all property within 373.33 statutory and home rule charter cities and towns that receive 373.34 full-peak service and limited off-peak service by an amount 373.35 equal to the tax levy that would be produced by applying a rate 373.36 of 0.510 percent of net tax capacity on the property. The 374.1 county auditor shall reduce the tax levied pursuant to this 374.2 section and section 473.388 on all property within statutory and 374.3 home rule charter cities and towns that receive limited peak 374.4 service by an amount equal to the tax levy that would be 374.5 produced by applying a rate of 0.765 percent of net tax capacity 374.6 on the property. The amounts so computed by the county auditor 374.7 shall be submitted to the commissioner of revenue as part of the 374.8 abstracts of tax lists required to be filed with the 374.9 commissioner under section 275.29. Any prior year adjustments 374.10 shall also be certified in the abstracts of tax lists. The 374.11 commissioner shall review the certifications to determine their 374.12 accuracy and may make changes in the certification as necessary 374.13 or return a certification to the county auditor for 374.14 corrections. The commissioner shall pay to the council and to 374.15 the municipalities levying under section 473.388, subdivision 7, 374.16 the amounts certified by the county auditors on the dates 374.17 provided in section 273.1398, apportioned between the council 374.18 and the municipality in the same proportion as the total transit 374.19 levy is apportioned within the municipality. There is annually 374.20 appropriated from the general fund in the state treasury to the 374.21 department of revenue the amounts necessary to make these 374.22 payments. 374.23 For the purposes of this subdivision, "full-peak and 374.24 limited off-peak service" means peak period regular route 374.25 service, plus weekday midday regular route service at intervals 374.26 longer than 60 minutes on the route with the greatest frequency; 374.27 and "limited peak period service" means peak period regular 374.28 route service only. 374.29 For the purposes of property taxes payable in the following 374.30 year, the council shall annually determine which cities and 374.31 towns qualify for the 0.510 percent or 0.765 percent tax 374.32 capacity rate reduction and shall certify this list to the 374.33 county auditor of the county wherein such cities and towns are 374.34 located on or before September 15. No changes may be made to 374.35 the annual list after September 15. 374.36[EFFECTIVE DATE.] This section is effective for taxes 375.1 payable in 2002 and thereafter. 375.2 Sec. 27. [STUDY; REPORT.] 375.3 The metropolitan council shall study the feasibility of 375.4 transferring functions or services from metropolitan counties to 375.5 the metropolitan council established in this act in order to 375.6 take advantage of economies of scale without sacrificing equity 375.7 or effectiveness. In addition to any other function or service, 375.8 the study must include an analysis of the feasibility and 375.9 benefits of transferring county correctional facilities and 375.10 county highways to the council. The council shall report to the 375.11 legislature the results of the study by January 15, 2003. 375.12 Sec. 28. [TRANSITION.] 375.13 The appointed chair and appointed metropolitan council 375.14 members holding office on the effective date of this section, 375.15 and any successor appointed to serve as the council chair or as 375.16 a member, shall continue in office until the first Monday in 375.17 January 2003. 375.18 Sec. 29. [APPLICATION.] 375.19 This article applies in the counties of Anoka, Carver, 375.20 Dakota, Hennepin, Ramsey, Scott, and Washington. 375.21 Sec. 30. [REPEALER.] 375.22 Minnesota Statutes 2000, section 473.123, subdivisions 2a, 375.23 3, 3a, and 3c, are repealed. 375.24 ARTICLE 15 375.25 STREAMLINED SALES TAX 375.26 Section 1. [295.60] [SPECIAL FUR CLOTHING TAX.] 375.27 Subdivision 1. [IMPOSITION.] If clothing made of fur is 375.28 not subject to the sales tax under chapter 297A, a tax is 375.29 imposed on each furrier equal to 6.5 percent of gross revenues 375.30 from the sale of clothing made from fur made in Minnesota during 375.31 the calendar year. 375.32 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 375.33 the following terms have the meanings given. 375.34 (b) "Commissioner" means the commissioner of revenue. 375.35 (c) "Furrier" means a retailer that sells clothing made of 375.36 fur. 376.1 (d) "Clothing made of fur" means articles of clothing made 376.2 of fur on the hide or pelt, and articles of clothing of which 376.3 such fur is the component material of chief value, but only if 376.4 such value is more than three times the value of the next most 376.5 valuable material. 376.6 Subd. 3. [PAYMENT.] (a) Each furrier shall make estimated 376.7 payments of the taxes for the calendar year in quarterly 376.8 installments to the commissioner by April 15, July 15, October 376.9 15, and January 15 of the following calendar year. 376.10 (b) Estimated tax payments are not required if: 376.11 (1) the tax for the current calendar year is less than 376.12 $500; or 376.13 (2) the tax for the previous calendar year is less than 376.14 $500, if the taxpayer had a tax liability and was doing business 376.15 the entire year. 376.16 (c) Underpayment of estimated installments bear interest at 376.17 the rate specified in section 270.75, from the due date of the 376.18 payment until paid or until the due date of the annual return, 376.19 whichever comes first. An underpayment of an estimated 376.20 installment is the difference between the amount paid and the 376.21 lesser of (1) 90 percent of one-quarter of the tax for the 376.22 calendar year or (2) one-quarter of the total tax for the 376.23 previous calendar year if the taxpayer had a tax liability and 376.24 was doing business the entire year. 376.25 Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer 376.26 with an aggregate tax liability of $120,000 or more during a 376.27 fiscal year ending June 30 must remit all liabilities by means 376.28 of a funds transfer as defined in section 336.4A-104, paragraph 376.29 (a), in the subsequent calendar year. The funds transfer 376.30 payment date, as defined in section 336.4A-401, is on or before 376.31 the date the tax is due. If the date the tax is due is not a 376.32 funds-transfer business day, as defined in section 336.4A-105, 376.33 paragraph (a), clause (4), the payment date is on or before the 376.34 first funds-transfer business day after the date the tax is due. 376.35 Subd. 5. [ANNUAL RETURN.] The taxpayer must file an annual 376.36 return reconciling the estimated payments by March 15 of the 377.1 following calendar year. 377.2 Subd. 6. [FORM OF RETURNS.] The estimated payments and 377.3 annual return must contain the information and be in the form 377.4 prescribed by the commissioner. 377.5 Subd. 7. [APPLICATION OF OTHER CHAPTERS.] Unless 377.6 specifically provided otherwise by this section, the 377.7 enforcement, interest, and penalty provisions under chapter 294, 377.8 appeal provisions in sections 289A.43 and 289A.65, criminal 377.9 penalties in section 289A.63, refunds provisions in section 377.10 289A.50, and collection and rulemaking provisions under chapter 377.11 270, apply to a liability for the taxes imposed under this 377.12 section. 377.13 Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid 377.14 on an overpayment refunded or credited to the taxpayer from the 377.15 date of payment of the tax until the date the refund is paid or 377.16 credited. For purposes of this subdivision, the date of payment 377.17 is the due date of the return or the date of actual payment of 377.18 the tax, whichever is later. 377.19 Subd. 9. [DEPOSIT OF REVENUES.] The commissioner shall 377.20 deposit all revenues, including penalties and interest, derived 377.21 from the tax imposed by this section in the general fund. 377.22[EFFECTIVE DATE.] This section is effective for sales made 377.23 after December 31, 2001. 377.24 Sec. 2. Minnesota Statutes 2000, section 297A.61, 377.25 subdivision 3, is amended to read: 377.26 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 377.27 include, but are not limited to, each of the transactions listed 377.28 in this subdivision. 377.29 (b) Sale and purchase include any transfer of title or 377.30 possession, or both, of tangible personal property, whether 377.31 absolutely or conditionally, and the leasing of or the granting 377.32 of a license to use or consume, for a consideration, tangible 377.33 personal property, other than a manufactured home used for 377.34 residential purposes for a continuous period of 30 days or more. 377.35 (c) Sale and purchase include the production, fabrication, 377.36 printing, or processing of tangible personal property for a 378.1 consideration for consumers who furnish either directly or 378.2 indirectly the materials used in the production, fabrication, 378.3 printing, or processing. 378.4 (d) Sale and purchase include thefurnishing,preparing, or378.5servingfor a consideration of foodor drinks. Notwithstanding 378.6 section 297A.67, subdivision 2, taxable foodor drinks378.7includeincludes, butareis not limited to, the following: 378.8 (1) prepared foodor drinkssold by the retailerfor378.9immediate consumption on the retailer's premises. Food and378.10drinks sold within a building or grounds that require an378.11admission charge for entrance are presumed to be sold for378.12consumption on the premises; 378.13(2) food or drinks prepared by the retailer for immediate378.14consumption either on or off the retailer's premises. For378.15purposes of this subdivision, "food or drinks prepared for378.16immediate consumption" means any food product upon which an act378.17of preparation including, but not limited to, cooking, mixing,378.18sandwich making, blending, heating, or pouring has been378.19performed by the retailer so the food product may be immediately378.20consumed by the purchaser;378.21(3) ice cream, ice milk, frozen yogurt products, or frozen378.22novelties sold in single or individual servings including, but378.23not limited to, cones, sundaes, and snow cones;378.24(4)(2) soft drinksand other beverages, including all378.25carbonated and noncarbonated beverages or drinks sold in liquid378.26form, but not including beverages or drinks which contain milk378.27or milk products, beverages or drinks containing 15 or more378.28percent fruit juice, and noncarbonated and noneffervescent378.29bottled water sold in individual containers of one-half gallon378.30or more in size; 378.31(5) gum,(3) candy, and candy products; and 378.32(6) ice;378.33(7)(4) all food soldfromthrough vending machines;. 378.34(8) all food for immediate consumption sold from concession378.35stands and vehicles;378.36(9) party trays;379.1(10) all meals and single servings of packaged snack food379.2sold in restaurants and bars; and379.3(11) bakery products that are:379.4(i) prepared by the retailer for consumption on the379.5retailer's premises;379.6(ii) sold at a place that charges admission;379.7(iii) sold from vending machines; or379.8(iv) sold in single or individual servings from concession379.9stands, vehicles, bars, and restaurants.379.10For purposes of this paragraph, "single or individual379.11servings" does not include products when sold in bulk containers379.12or bulk packaging.379.13For purposes of this paragraph, "premises" means the total379.14space and facilities, including buildings, grounds, and parking379.15lots that are made available or that are available for use by379.16the retailer or customer for the purpose of sale or consumption379.17of prepared food and drinks. The premises of a caterer is the379.18place where the catered food or drinks are served.379.19 (e) A sale and a purchase includes the furnishing for a 379.20 consideration of electricity, gas, water, or steam for use or 379.21 consumption within this state or local exchange telephone 379.22 service, intrastate toll service, and interstate toll service, 379.23 if that service originates from and is charged to a telephone 379.24 located in this state. Telephone service includes (1) paging 379.25 services, and (2) private communication service, as defined in 379.26 United States Code, title 26, section 4252(d), except for 379.27 private communication service purchased by an agent acting on 379.28 behalf of the state lottery. Telephone service does not include 379.29 services purchased with a prepaid telephone calling card. The 379.30 furnishing for a consideration of access to telephone services 379.31 by a hotel to its guests is a sale. The furnishing for a 379.32 consideration of items listed in this paragraph by a municipal 379.33 corporation is a sale. 379.34 (f) A sale and a purchase includes the transfer for a 379.35 consideration of computer software. 379.36 (g) A sale and a purchase includes the furnishing for a 380.1 consideration of taxable services as defined in subdivision 16. 380.2 (h) A sale and a purchase includes the furnishing for a 380.3 consideration of tangible personal property or taxable services 380.4 by the United States or any of its agencies or 380.5 instrumentalities, or the state of Minnesota, its agencies, 380.6 instrumentalities, or political subdivisions. 380.7[EFFECTIVE DATE.] This section is effective for sales and 380.8 purchases occurring after December 31, 2001. 380.9 Sec. 3. Minnesota Statutes 2000, section 297A.61, 380.10 subdivision 4, is amended to read: 380.11 Subd. 4. [RETAIL SALE.] (a) A "retail sale" meansaany 380.12 sale, lease, or rental for any purpose other than resalein the380.13regular course of business, sublease, or subrent. 380.14 (b) A sale of property used by the owner only by leasing it 380.15 to others or by holding it in an effort to lease it, and put to 380.16 no use by the owner other than resale after the lease or effort 380.17 to lease, is a sale of property for resale. 380.18 (c) A sale of master computer software that is purchased 380.19 and used to make copies for sale or lease is a sale of property 380.20 for resale. 380.21 (d) A sale of building materials, supplies, and equipment 380.22 to owners, contractors, subcontractors, or builders for the 380.23 erection of buildings or the alteration, repair, or improvement 380.24 of real property is a retail sale in whatever quantity sold, 380.25 whether the sale is for purposes of resale in the form of real 380.26 property or otherwise. 380.27 (e) A sale of carpeting, linoleum, or similar floor 380.28 covering to a person who provides for installation of the floor 380.29 covering is a retail sale and not a sale for resale since a sale 380.30 of floor covering which includes installation is a contract for 380.31 the improvement of real property. 380.32 (f) A sale of shrubbery, plants, sod, trees, and similar 380.33 items to a person who provides for installation of the items is 380.34 a retail sale and not a sale for resale since a sale of 380.35 shrubbery, plants, sod, trees, and similar items that includes 380.36 installation is a contract for the improvement of real property. 381.1 (g) A sale of tangible personal property that is awarded as 381.2 prizes is a retail sale and is not considered a sale of property 381.3 for resale. 381.4 (h) A sale of tangible personal property utilized or 381.5 employed in the furnishing or providing of services under 381.6 subdivision 16, paragraph (b), including, but not limited to, 381.7 property given as promotional items, is a retail sale and is not 381.8 considered a sale of property for resale. 381.9 (i) A sale of tangible personal property used in conducting 381.10 lawful gambling under chapter 349 or the state lottery under 381.11 chapter 349A, including, but not limited to, property given as 381.12 promotional items, is a retail sale and is not considered a sale 381.13 of property for resale. 381.14 (j) A sale of machines, equipment, or devices that are used 381.15 to furnish, provide, or dispense goods or services, including, 381.16 but not limited to, coin-operated devices, is a retail sale and 381.17 is not considered a sale of property for resale. 381.18 (k) In the case of a lease, a retail sale occurs when an 381.19 obligation to make a lease payment becomes due under the terms 381.20 of the agreement or the trade practices of the lessor. 381.21 (l) In the case of a conditional sales contract, a retail 381.22 sale occurs upon the transfer of title or possession of the 381.23 tangible personal property. 381.24[EFFECTIVE DATE.] This section is effective January 1, 2002. 381.25 Sec. 4. Minnesota Statutes 2000, section 297A.61, 381.26 subdivision 7, is amended to read: 381.27 Subd. 7. [SALES PRICE.] (a) "Sales price" meansthe total381.28consideration for a retail sale, valued in money, whether paid381.29in money or by barter or exchange.the measure subject to sales 381.30 tax, and means the total amount of consideration, including 381.31 cash, credit, property, and services, for which personal 381.32 property or services are sold, leased, or rented, valued in 381.33 money, whether received in money or otherwise, without any 381.34 deduction for the following: 381.35 (1) the seller's cost of the property sold; 381.36 (2) the cost of materials used, labor or service cost, 382.1 interest, losses, all costs of transportation to the seller, all 382.2 taxes imposed on the seller, and any other expenses of the 382.3 seller; 382.4 (3) charges by the seller for any services necessary to 382.5 complete the sale, other than delivery and installation charges; 382.6 (4) delivery charges; 382.7 (5) installation charges; and 382.8 (6) the value of exempt property given to the purchaser 382.9 when taxable and exempt personal property have been bundled 382.10 together and sold by the seller as a single product or piece of 382.11 merchandise. 382.12(b) Sales price includes:382.13(1) the cost of the property sold, cost of materials used,382.14labor or service cost, interest, or discount allowed after the382.15sale is consummated;382.16(2) the cost of transportation incurred prior to the time382.17of sale;382.18(3) any amount for which credit is given by the seller to382.19the purchaser;382.20(4) charges for services that are part of a sale; or382.21(5) any other expense whatsoever.382.22(c)(b) Sales price does not includethe following: 382.23 (1)an amount allowed as credit for tangible personal382.24property taken in trade for resalediscounts, including cash, 382.25 terms, or coupons that are not reimbursed by a third party and 382.26 that are allowed by the seller and taken by a purchaser on a 382.27 sale; 382.28 (2)charges of up to 15 percent in lieu of tips if the382.29charges are separately statedinterest, financing, and carrying 382.30 charges from credit extended on the sale of personal property or 382.31 services, if the amount is separately stated on the invoice, 382.32 bill of sale, or similar document given to the purchaser; and 382.33 (3)interest, financing, or carrying charges if the charges382.34are separately stated;any taxes legally imposed directly on the 382.35 consumer that are separately stated on the invoice, bill of 382.36 sale, or similar document given to the purchaser. 383.1(4) charges for labor or services used in installing or383.2applying the property sold if the charges are separately stated;383.3(5) transportation charges if the transportation occurs383.4after the retail sale of the property if the charges are383.5separately stated;383.6(6) cash discounts allowed and taken on sales or the amount383.7refunded either in cash or in credit for property returned by383.8purchasers;383.9(7) the rental motor vehicle tax imposed under section383.10297A.64; or383.11(8) the amount of any tax imposed by the United States on383.12communications services under United States Code, title 26,383.13section 4251(a).383.14(d) Notwithstanding paragraph (c), "sales price," for383.15purposes of sales of ready-mixed concrete sold from a383.16ready-mixed concrete truck, includes any transportation,383.17delivery, or other service charges, and no deduction is allowed383.18for those charges, whether or not the charges are separately383.19stated.383.20[EFFECTIVE DATE.] This section is effective January 1, 2002. 383.21 Sec. 5. Minnesota Statutes 2000, section 297A.61, 383.22 subdivision 9, is amended to read: 383.23 Subd. 9. [RETAILER AND SELLER.] "Retailer" and "seller" 383.24 meanseveryany personengaged inmakingretailsales, leases, 383.25 or rentals of personal property or services. 383.26[EFFECTIVE DATE.] This section is effective January 1, 2002. 383.27 Sec. 6. Minnesota Statutes 2000, section 297A.61, is 383.28 amended by adding a subdivision to read: 383.29 Subd. 24. [PURCHASE PRICE.] "Purchase price" means the 383.30 measure subject to the use tax and has the same meaning as 383.31 "sales price." 383.32[EFFECTIVE DATE.] This section is effective January 1, 2002. 383.33 Sec. 7. Minnesota Statutes 2000, section 297A.61, is 383.34 amended by adding a subdivision to read: 383.35 Subd. 25. [STATE.] Unless specifically provided otherwise, 383.36 "state" means any state of the United States and the District of 384.1 Columbia. 384.2[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.3 Sec. 8. Minnesota Statutes 2000, section 297A.61, is 384.4 amended by adding a subdivision to read: 384.5 Subd. 26. [DELIVERY CHARGES.] "Delivery charges" means 384.6 charges by the seller for preparation and delivery to a location 384.7 designated by the purchaser of personal property or services 384.8 including, but not limited to, transportation, shipping, 384.9 postage, handling, crating, and packing. 384.10[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.11 Sec. 9. Minnesota Statutes 2000, section 297A.61, is 384.12 amended by adding a subdivision to read: 384.13 Subd. 27. [PREPARED FOOD.] "Prepared food" means (i) food 384.14 sold in a heated state or heated by the seller; (ii) two or more 384.15 food ingredients mixed or combined by the seller for sale as a 384.16 single item; or (iii) food sold with eating utensils provided by 384.17 the seller, including plates, knives, forks, spoons, glasses, 384.18 cups, napkins, or straws. Prepared food does not include food 384.19 that is sliced, repackaged, or pasteurized by the seller. 384.20[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.21 Sec. 10. Minnesota Statutes 2000, section 297A.61, is 384.22 amended by adding a subdivision to read: 384.23 Subd. 28. [SOFT DRINKS.] "Soft drinks" means nonalcoholic 384.24 beverages that contain natural or artificial sweeteners. Soft 384.25 drinks do not include beverages that contain milk or milk 384.26 products; soy, rice, or similar milk substitutes; or greater 384.27 than 50 percent vegetable or fruit juice by volume. 384.28[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.29 Sec. 11. Minnesota Statutes 2000, section 297A.61, is 384.30 amended by adding a subdivision to read: 384.31 Subd. 29. [CANDY.] "Candy" means a preparation of sugar, 384.32 honey, or other natural or artificial sweeteners in combination 384.33 with chocolate, fruits, nuts, or other ingredients or flavorings 384.34 in the form of bars, drops, or pieces. Candy does not include 384.35 any preparation containing flour and must require no 384.36 refrigeration. 385.1[EFFECTIVE DATE.] This section is effective January 1, 2002. 385.2 Sec. 12. Minnesota Statutes 2000, section 297A.61, is 385.3 amended by adding a subdivision to read: 385.4 Subd. 30. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 385.5 through vending machines" means food dispensed from a machine or 385.6 other mechanical device that accepts payment. 385.7[EFFECTIVE DATE.] This section is effective January 1, 2002. 385.8 Sec. 13. [297A.668] [SOURCING OF SALE; SITUS IN THIS 385.9 STATE.] 385.10 Subdivision 1. [SOURCING RULES.] (a) The following 385.11 provisions apply regardless of the characterization of a product 385.12 as tangible personal property, a digital good, or a service; but 385.13 do not apply to telecommunications services, or the sales of 385.14 motor vehicles, watercraft, aircraft, modular homes, 385.15 manufactured homes, or mobile homes. These provisions only 385.16 apply to determine a seller's obligation to pay or collect and 385.17 remit a sales or use tax with respect to the seller's sale of a 385.18 product. These provisions do not affect the obligation of a 385.19 seller as purchaser to remit tax on the use of the product. 385.20 (b) When the product is received by the purchaser at a 385.21 business location of the seller, the sale is sourced to that 385.22 business location. 385.23 (c) When the product is not received by the purchaser at a 385.24 business location of the seller, the sale is sourced to the 385.25 location where receipt by the purchaser or the donee designated 385.26 by the purchaser occurs, including the location indicated by 385.27 instructions for delivery to the purchasers or the purchaser's 385.28 donee, known to the seller. 385.29 (d) When paragraphs (b) and (c) do not apply, the sale is 385.30 sourced to the location indicated by an address for the 385.31 purchaser that is available from the business records of the 385.32 seller that are maintained in the ordinary course of the 385.33 seller's business, when use of this address does not constitute 385.34 bad faith. 385.35 (e) When paragraphs (b), (c), and (d) do not apply, the 385.36 sale is sourced to the location indicated by an address for the 386.1 purchaser obtained during the consummation of the sale, 386.2 including the address of a purchaser's payment instrument if no 386.3 other address is available, when use of this address does not 386.4 constitute bad faith. 386.5 (f) When paragraphs (b), (c), (d), and (e) do not apply, 386.6 including the circumstance where the seller is without 386.7 sufficient information to apply the previous paragraphs, then 386.8 the location is determined by the address from which tangible 386.9 personal property was shipped, from which the digital good was 386.10 first available for transmission by the seller, or from which 386.11 the service was provided. 386.12 Subd. 2. [MULTIPLE POINTS OF USE.] (a) Notwithstanding the 386.13 provisions of subdivision 1, a business purchaser that is not a 386.14 holder of a direct pay permit that knows at the time of its 386.15 purchase of a digital good or service that the digital good or 386.16 service will be concurrently available for use in more than one 386.17 taxing jurisdiction shall deliver to the seller in conjunction 386.18 with its purchase a multiple points of use exemption certificate 386.19 disclosing this fact. 386.20 (b) Upon receipt of the multiple points of use exemption 386.21 certificate, the seller is relieved of the obligation to 386.22 collect, pay, or remit the applicable tax and the purchaser is 386.23 obligated to collect, pay, or remit the applicable tax on a 386.24 direct pay basis. 386.25 (c) A purchaser delivering the multiple points of use 386.26 exemption certificate may use any reasonable, but consistent and 386.27 uniform, method of apportionment that is supported by the 386.28 purchaser's business records as they exist at the time of the 386.29 consummation of the sale. 386.30 (d) The multiple points of use exemption certificate 386.31 remains in effect for all future sales by the seller to the 386.32 purchaser until it is revoked in writing. 386.33 (e) A holder of a direct pay permit is not required to 386.34 deliver a multiple points or use exemption certificate to the 386.35 seller. A direct pay permit holder shall follow the provisions 386.36 of paragraph (c) in apportioning the tax due on a digital good 387.1 or a service that will be concurrently available for use in more 387.2 than one taxing jurisdiction. 387.3 Subd. 3. [DEFINITION OF TERMS.] For purposes of this 387.4 section, the terms "receive" and "receipt" mean taking 387.5 possession of tangible personal property, making first use of 387.6 services, or taking possession of making first use of digital 387.7 goods, whichever occurs first. The terms receive and receipt do 387.8 not include possession by a carrier for hire on behalf of the 387.9 purchaser. 387.10[EFFECTIVE DATE.] This section is effective for sales and 387.11 purchases occurring after December 31, 2001. 387.12 Sec. 14. Minnesota Statutes 2000, section 297A.67, 387.13 subdivision 2, is amended to read: 387.14 Subd. 2. [FOODPRODUCTSAND FOOD INGREDIENTS.] 387.15 Foodproducts including, but not limited to, cereal and cereal387.16products, butter, cheese, milk and milk products, oleomargarine,387.17meat and meat products, fish and fish products, eggs and egg387.18products, vegetables and vegetable products, fruit and fruit387.19products, spices and salt, sugar and sugar products, coffee and387.20coffee substitutes, tea, and cocoa and cocoa productsand food 387.21 ingredients are exempt. For purposes of this subdivision, 387.22 "food" and "food ingredients" mean substances, whether in 387.23 liquid, concentrated, solid, frozen, dried, or dehydrated form, 387.24 that are sold for ingestion or chewing by humans and are 387.25 consumed for their taste or nutritional value. Food and food 387.26 ingredients do not include candy, soft drinks, food sold through 387.27 vending machines, and prepared foods. Food and food ingredients 387.28 do not include alcoholic beverages, dietary supplements, and 387.29 tobacco. For purposes of this subdivision, "alcoholic 387.30 beverages" means beverages that are suitable for human 387.31 consumption and contain one-half of one percent or more of 387.32 alcohol by volume. For purposes of this subdivision, "tobacco" 387.33 means cigarettes, cigars, chewing or pipe tobacco, or any other 387.34 item that contains tobacco. For purposes of this subdivision, 387.35 "dietary supplements" means any product, other than tobacco, 387.36 intended to supplement the diet that: 388.1 (1) contains one or more of the following dietary 388.2 ingredients: 388.3 (i) a vitamin; 388.4 (ii) a mineral; 388.5 (iii) an herb or other botanical; 388.6 (iv) an amino acid; 388.7 (v) a dietary substance for use by humans to supplement the 388.8 diet by increasing the total dietary intake; and 388.9 (vi) a concentrate, metabolite, constituent, extract, or 388.10 combination of any ingredient described in items (i) to (v); 388.11 (2) is intended for ingestion in tablet, capsule, powder, 388.12 softgel, gelcap, or liquid form, or if not intended for 388.13 ingestion in such form, is not represented as conventional food 388.14 and is not represented for use as a sole item of a meal or of 388.15 the diet; and 388.16 (3) is required to be labeled as a dietary supplement, 388.17 identifiable by the supplement facts box found on the label and 388.18 as required pursuant to Code of Federal Regulations, title 21, 388.19 section 101.36. 388.20[EFFECTIVE DATE.] This section is effective for sales and 388.21 purchases occurring after December 31, 2001. 388.22 Sec. 15. Minnesota Statutes 2000, section 297A.67, 388.23 subdivision 8, is amended to read: 388.24 Subd. 8. [CLOTHING.] (a) Clothingand wearing apparel,388.25including sewing materials to be directly incorporated into388.26wearing apparel, areis exempt. For purposes of this 388.27 subdivision,clothing and wearing apparel do not include the388.28following:388.29(1) articles designed primarily for use while engaging in a388.30specific sport or recreational activity that are not also worn388.31for general use;388.32(2) articles designed primarily to provide safety or388.33protection against injury while the user is engaged in388.34industrial or general job activities;388.35(3) all articles commonly or commercially known as jewelry388.36including, but not limited to, watches;389.1(4) nonprescription optical glasses of any sort;389.2(5) articles made entirely of fur on the hide or pelt, or389.3partially of such fur if the value of the fur is more than three389.4times the value of the next most valuable component material;389.5(6) perfume, lotions, creams, dyes, or other substances389.6that are applied to the skin or the hair; and389.7(7) luggage, bags, purses, wallets, or cases of any389.8sort."clothing" means all human wearing apparel suitable for 389.9 general use. 389.10 (b) Clothing includes, but is not limited to, aprons, 389.11 household and shop; athletic supporters; baby receiving 389.12 blankets; bathing suits and caps; beach capes and coats; belts 389.13 and suspenders; boots; coats and jackets; costumes; children and 389.14 adult diapers, including disposable; ear muffs; footlets; formal 389.15 wear; garters and garter belts; girdles; gloves and mittens for 389.16 general use; hats and caps; hosiery; insoles for shoes; lab 389.17 coats; neckties; overshoes; pantyhose; rainwear; rubber pants; 389.18 sandals; scarves; shoes and shoe laces; slippers; sneakers; 389.19 socks and stockings; steel-toed boots; underwear; uniforms, 389.20 athletic and nonathletic; and wedding apparel. 389.21 (c) Clothing does not include the following: 389.22 (1) belt buckles sold separately; 389.23 (2) costume masks sold separately; 389.24 (3) patches and emblems sold separately; 389.25 (4) sewing equipment and supplies, including but not 389.26 limited to, knitting needles, patterns, pins, scissors, sewing 389.27 machines, sewing needles, tape measures, and thimbles; 389.28 (5) sewing materials that become part of clothing, 389.29 including but not limited to, buttons, fabric, lace, thread, 389.30 yarn, and zippers; 389.31 (6) clothing accessories or equipment; 389.32 (7) sports or recreational equipment; and 389.33 (8) protective equipment. 389.34 For purposes of this subdivision, "clothing accessories or 389.35 equipment" means incidental items worn on the person or in 389.36 conjunction with clothing. Clothing accessories include, but 390.1 are not limited to, briefcases; cosmetics; hair notions, 390.2 including barrettes, hair bows, and hairnets; handbags; 390.3 handkerchiefs; jewelry; nonprescription sunglasses; umbrellas; 390.4 wallets; watches; and wigs and hairpieces. "Sports or 390.5 recreational equipment" means items designed for human use and 390.6 worn in conjunction with an athletic or recreational activity 390.7 that are not suitable for general use. Sports and recreational 390.8 equipment, includes but is not limited to, ballet and tap shoes; 390.9 cleated or spiked athletic shoes; baseball, bowling, boxing, 390.10 hockey, and golf gloves; goggles; hand and elbow guards; life 390.11 preservers and vests; mouth guards; roller and ice skates; shin 390.12 guards; shoulder pads; ski boots; waders; and wetsuits and 390.13 fins. "Protective equipment" means items for human wear and 390.14 designed as protection of the wearer against injury or disease 390.15 or as protection against damage or injury of other persons or 390.16 property but not suitable for general use. Protective 390.17 equipment, includes but is not limited to, breathing masks; 390.18 clean room apparel and equipment; ear and hearing protectors; 390.19 face shields; finger guards; hard hats; helmets; paint or dust 390.20 respirators; protective gloves; safety glasses and goggles; 390.21 safety belts; tool belts; and welders gloves and masks. 390.22[EFFECTIVE DATE.] This section is effective for sales and 390.23 purchases occurring after December 31, 2001. 390.24 Sec. 16. Minnesota Statutes 2000, section 297A.67, is 390.25 amended by adding a subdivision to read: 390.26 Subd. 26. [TRADE ALLOWANCE.] The amount allowed as a 390.27 credit against the sales price for tangible personal property 390.28 taken in trade for resale is exempt. 390.29[EFFECTIVE DATE.] This section is effective for sales and 390.30 purchases occurring after December 31, 2001. 390.31 Sec. 17. Minnesota Statutes 2000, section 297A.72, 390.32 subdivision 1, is amended to read: 390.33 Subdivision 1. [DUTY OF RETAILER.]AnA fully completed 390.34 exemption certificate conclusively relieves the retailer from 390.35 collecting and remitting the taxonlyif takenin good faith390.36 from the purchaser at the time of sale. 391.1[EFFECTIVE DATE.] This section is effective for sales and 391.2 purchases occurring after December 31, 2001. 391.3 Sec. 18. Minnesota Statutes 2000, section 297A.99, 391.4 subdivision 9, is amended to read: 391.5 Subd. 9. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] 391.6 (a) The commissioner of revenue shall collect the taxes subject 391.7 to this section. The commissioner may collect the tax with the 391.8 state sales and use tax. All taxes under this section are 391.9 subject to the same penalties, interest, and enforcement 391.10 provisions as apply to the state sales and use tax. 391.11 (b) A request for a refund of state sales tax paid in 391.12 excess of the amount of tax legally due includes a request for a 391.13 refund of the political subdivision taxes paid on the goods or 391.14 services. The commissioner shall refund to the taxpayer the 391.15 full amount of the political subdivision taxes paid on exempt 391.16 sales or use. 391.17(c) A political subdivision that is collecting and391.18administering its own sales and use tax before January 1, 1998,391.19may elect to be exempt from this subdivision and subdivision 11.391.20[EFFECTIVE DATE.] This section is effective January 1, 2002. 391.21 Sec. 19. [297A.995] [UNIFORM SALES AND USE TAX 391.22 ADMINISTRATION ACT.] 391.23 Subdivision 1. [TITLE.] This section may be cited as the 391.24 Uniform Sales and Use Tax Administration Act. 391.25 Subd. 2. [DEFINITIONS.] As used in this section: 391.26 (a) "Agreement" means the Streamlined Sales and Use Tax 391.27 Agreement. 391.28 (b) "Certified automated system" means software certified 391.29 jointly by the states that are signatories to the agreement to 391.30 calculate the tax imposed by each jurisdiction on a transaction, 391.31 determine the amount of tax to remit to the appropriate state, 391.32 and maintain a record of the transaction. 391.33 (c) "Certified service provider" means an agent certified 391.34 jointly by the states that are signatories to the agreement to 391.35 perform all of the seller's sales tax functions. 391.36 Subd. 3. [LEGISLATIVE FINDING.] The legislature finds that 392.1 this state should enter into an agreement with one or more 392.2 states to simplify and modernize sales and use tax 392.3 administration in order to substantially reduce the burden of 392.4 tax compliance for all sellers and for all types of commerce. 392.5 Subd. 4. [AUTHORITY TO ENTER AGREEMENT.] The commissioner 392.6 of revenue is authorized and directed to enter into the 392.7 agreement with one or more states to simplify and modernize 392.8 sales and use tax administration in order to substantially 392.9 reduce the burden of tax compliance for all sellers and for all 392.10 types of commerce. In furtherance of the agreement, the 392.11 commissioner is authorized to act jointly with other states that 392.12 are members of the agreement to establish standards for 392.13 certification of a certified service provider and certified 392.14 automated system and establish performance standards for 392.15 multistate sellers. 392.16 The commissioner is further authorized to take other 392.17 actions reasonably required to implement the provisions set 392.18 forth in this article. Other actions authorized by this section 392.19 include, but are not limited to, the adoption of rules and 392.20 regulations and the joint procurement, with other member states, 392.21 of goods and services in furtherance of the cooperative 392.22 agreement. 392.23 The commissioner or the commissioner's designee is 392.24 authorized to represent this state before the other states that 392.25 are signatories to the agreement. 392.26 Subd. 5. [RELATIONSHIP TO STATE LAW.] No provision of the 392.27 agreement authorized by this article in whole or part 392.28 invalidates or amends any provision of the law of this state. 392.29 Adoption of the agreement by this state does not amend or modify 392.30 any law of this state. Implementation of any condition of the 392.31 agreement in this state, whether adopted before, at, or after 392.32 membership of this state in the agreement, must be by the action 392.33 of this state. 392.34 Subd. 6. [AGREEMENT REQUIREMENTS.] The commissioner of 392.35 revenue shall not enter into the agreement unless the agreement 392.36 requires each state to abide by the following requirements: 393.1 (a) [UNIFORM STATE RATE.] The agreement must set 393.2 restrictions to achieve more uniform state rates through the 393.3 following: 393.4 (1) limiting the number of state rates; 393.5 (2) eliminating maximums on the amount of state tax that is 393.6 due on a transaction; and 393.7 (3) eliminating thresholds on the application of state tax. 393.8 (b) [UNIFORM STANDARDS.] The agreement must establish 393.9 uniform standards for the following: 393.10 (1) the sourcing of transactions to taxing jurisdictions; 393.11 (2) the administration of exempt sales; 393.12 (3) the allowances a seller can take for bad debts; and 393.13 (4) sales and use tax returns and remittances. 393.14 (c) [UNIFORM DEFINITIONS.] The agreement must require 393.15 states to develop and adopt uniform definitions of sales and use 393.16 tax terms. The definitions must enable a state to preserve its 393.17 ability to make policy choices not inconsistent with the uniform 393.18 definitions. 393.19 (d) [CENTRAL REGISTRATION.] The agreement must provide a 393.20 central, electronic registration system that allows a seller to 393.21 register to collect and remit sales and use taxes for all 393.22 signatory states. 393.23 (e) [NO NEXUS ATTRIBUTION.] The agreement must provide that 393.24 registration with the central registration system and the 393.25 collection of sales and use taxes in the signatory states will 393.26 not be used as a factor in determining whether the seller has 393.27 nexus with a state for any tax. 393.28 (f) [LOCAL SALES AND USE TAXES.] The agreement must provide 393.29 for reduction of the burdens of complying with local sales and 393.30 use taxes through the following: 393.31 (1) restricting and eliminating variances between the state 393.32 and local tax bases; 393.33 (2) requiring states to administer any sales and use taxes 393.34 levied by local jurisdictions within the state so that sellers 393.35 collecting and remitting these taxes will not have to register 393.36 or file returns with, remit funds to, or be subject to 394.1 independent audits from local taxing jurisdictions; 394.2 (3) restricting the frequency of changes in the local sales 394.3 and use tax rates and setting effective dates for the 394.4 application of local jurisdictional boundary changes to local 394.5 sales and use taxes; and 394.6 (4) providing notice of changes in local sales and use tax 394.7 rates and of changes in the boundaries of local taxing 394.8 jurisdictions. 394.9 (g) [MONETARY ALLOWANCES.] The agreement must outline any 394.10 monetary allowances that are to be provided by the states to 394.11 sellers or certified service providers. 394.12 (h) [STATE COMPLIANCE.] The agreement must require each 394.13 state to certify compliance with the terms of the agreement 394.14 prior to joining and to maintain compliance, under the laws of 394.15 the member state, with all provisions of the agreement while a 394.16 member. 394.17 (i) [CONSUMER PRIVACY.] The agreement must require each 394.18 state to adopt a uniform policy for certified service providers 394.19 that protects the privacy of consumers and maintains the 394.20 confidentiality of tax information. 394.21 (j) [ADVISORY COUNCILS.] The agreement must provide for the 394.22 appointment of an advisory council of private sector 394.23 representatives and an advisory council of nonmember state 394.24 representatives to consult with in the administration of the 394.25 agreement. 394.26 Subd. 7. [COOPERATING SOVEREIGNS.] The agreement 394.27 authorized by this article is an accord among individual 394.28 cooperating sovereigns in furtherance of their governmental 394.29 functions. The agreement provides a mechanism among the member 394.30 states to establish and maintain a cooperative, simplified 394.31 system for the application and administration of sales and use 394.32 taxes under the duly adopted law of each member state. 394.33 Subd. 8. [LIMITED BINDING AND BENEFICIAL EFFECT.] (a) The 394.34 agreement authorized by this article binds and inures only to 394.35 the benefit of this state and the other member states. No 394.36 person, other than a member state, is an intended beneficiary of 395.1 the agreement. Any benefit to a person other than a state is 395.2 established by the law of this state and the other member states 395.3 and not by the terms of the agreement. 395.4 (b) Consistent with paragraph (a), no person shall have any 395.5 cause of action or defense under the agreement or by virtue of 395.6 this state's approval of the agreement. No person may 395.7 challenge, in any action brought under any provision of law, any 395.8 action or inaction by any department, agency, or other 395.9 instrumentality of this state, or any political subdivision of 395.10 this state, on the ground that the action or inaction is 395.11 inconsistent with the agreement. 395.12 (c) No law of this state, or its application, may be 395.13 declared invalid as to any person or circumstance on the ground 395.14 that the provision or application is inconsistent with the 395.15 agreement. 395.16 Subd. 9. [SELLER AND THIRD PARTY LIABILITY.] (a) A 395.17 certified service provider is the agent of a seller, with whom 395.18 the certified service provider has contracted, for the 395.19 collection and remittance of sales and use taxes. As the 395.20 seller's agent, the certified service provider is liable for 395.21 sales and use tax due each member state on all sales 395.22 transactions it processes for the seller except as set out in 395.23 this section. 395.24 A seller that contracts with a certified service provider 395.25 is not liable to the state for sales or use tax due on 395.26 transactions processed by the certified service provider unless 395.27 the seller misrepresented the type of items it sells or 395.28 committed fraud. In the absence of probable cause to believe 395.29 that the seller has committed fraud or made a material 395.30 misrepresentation, the seller is not subject to audit on the 395.31 transactions processed by the certified service provider. A 395.32 seller is subject to audit for transactions not processed by the 395.33 certified service provider. The member states acting jointly 395.34 may perform a system check of the seller and review the seller's 395.35 procedures to determine if the certified service provider's 395.36 system is functioning properly and the extent to which the 396.1 seller's transactions are being processed by the certified 396.2 service provider. 396.3 (b) A person that provides a certified automated system is 396.4 responsible for the proper functioning of that system and is 396.5 liable to the state for underpayments of tax attributable to 396.6 errors in the functioning of the certified automated system. A 396.7 seller that uses a certified automated system remains 396.8 responsible and is liable to the state for reporting and 396.9 remitting tax. 396.10 (c) A seller that has a proprietary system for determining 396.11 the amount of tax due on transactions and has signed an 396.12 agreement establishing a performance standard for that system is 396.13 liable for the failure of the system to meet the performance 396.14 standard. 396.15[EFFECTIVE DATE.] This section is effective the day 396.16 following final enactment. 396.17 ARTICLE 16 396.18 SPECIAL TAXES 396.19 Section 1. Minnesota Statutes 2000, section 239.101, 396.20 subdivision 3, is amended to read: 396.21 Subd. 3. [PETROLEUM INSPECTION FEE.]A person who owns396.22petroleum products held in storage at a pipeline terminal, river396.23terminal, or refinery shall pay a petroleum inspection fee of 85396.24cents for every 1,000 gallons sold or withdrawn from the396.25terminal or refinery storageAn inspection fee is imposed on 396.26 petroleum products when received by the first licensed 396.27 distributor, and on petroleum products received and held for 396.28 sale or use by any person when the petroleum products have not 396.29 previously been received by a licensed distributor. The 396.30 petroleum inspection fee is 85 cents for every 1,000 gallons 396.31 received. The commissioner of revenue shall collect the fee. 396.32 The revenue from the fee must first be applied to cover the 396.33 amounts appropriated for petroleum product quality inspection 396.34 expenses, for the inspection and testing of petroleum product 396.35 measuring equipment, and for petroleum supply monitoring under 396.36 chapter 216C. 397.1 The commissioner of revenue shall credit a person for 397.2 inspection fees previously paid in error or for any material 397.3 exported or sold for export from the state upon filing of a 397.4 report as prescribed by the commissioner of revenue. The 397.5 commissioner of revenue may collect the inspection fee along 397.6 with any taxes due under chapter 296A. 397.7[EFFECTIVE DATE.] This section is effective for petroleum 397.8 products received on or after July 1, 2001. 397.9 Sec. 2. [239.77] [BIODIESEL CONTENT MANDATE.] 397.10 Subdivision 1. [BIODIESEL FUEL OIL DESCRIBED.] "Biodiesel 397.11 fuel oil" means a biodegradable, combustible liquid fuel derived 397.12 from vegetable oils that meets ASTM specification PS 121-99 and 397.13 is suitable for blending with diesel fuel oil for use in 397.14 internal combustion diesel engines. 397.15 Subd. 2. [CONTENT REQUIREMENTS.] (a) From July 1, 2002, 397.16 through June 30, 2006, all diesel fuel oil sold or offered for 397.17 sale in Minnesota for use in internal combustion engines must 397.18 contain at least 2.0 percent biodiesel fuel oil by volume. 397.19 (b) On and after July 1, 2006, all diesel fuel oil sold or 397.20 offered for sale in Minnesota for use in internal combustion 397.21 engines must contain at least 5.0 percent biodiesel fuel oil by 397.22 volume. 397.23 Subd. 3. [EXCEPTION; CERTAIN ELECTRIC GENERATING 397.24 PLANTS.] The provisions of this section shall not apply to any 397.25 diesel motor in the state of Minnesota located at an electric 397.26 generating plant regulated by the nuclear regulatory commission 397.27 until the use of biodiesel fuel has been approved by the nuclear 397.28 regulatory commission. 397.29 Sec. 3. Minnesota Statutes 2000, section 287.035, is 397.30 amended to read: 397.31 287.035 [IMPOSITION OF TAX.] 397.32 A taxof 23 centsis imposed uponeach $100, or fraction397.33thereof, ofthe debt or portion of a debt that is secured by any 397.34 recorded mortgage of real property located in this state at the 397.35 rate of .0023. The person liable for the tax is the mortgagee. 397.36 The tax is not imposed on the lawful interest amounts that may 398.1 accrue with respect to a debt. 398.2[EFFECTIVE DATE.] This section is effective for documents 398.3 executed, recorded, or registered after June 30, 2001. 398.4 Sec. 4. Minnesota Statutes 2000, section 287.04, is 398.5 amended to read: 398.6 287.04 [EXEMPTIONS.] 398.7 The tax imposed by section 287.035 does not apply to: 398.8 (a) A decree of marriage dissolution or an instrument made 398.9 pursuant to it. 398.10 (b) A mortgage given to correct a misdescription of the 398.11 mortgaged property. 398.12 (c) A mortgage or other instrument that adds additional 398.13 security for the same debt for which mortgage registry tax has 398.14 been paid. 398.15 (d) A contract for the conveyance of any interest in real 398.16 property, including a contract for deed. 398.17 (e) A mortgage secured by real property subject to the 398.18 minerals production tax of sections 298.24 to 298.28. 398.19 (f) The principal amount of bonds or other obligations 398.20 issued by the St. Paul port authority under its common revenue 398.21 bond fund if each of the following conditions are met. 398.22 (1) The bonds or other obligations are secured by a 398.23 mortgage on property, title to which is held by the political 398.24 subdivision. 398.25 (2) The mortgage is recorded after May 19, 1993. 398.26 (3) The bonds or other obligations are either (i) 398.27 outstanding on May 19, 1993, or (ii) issued in exchange for or 398.28 to otherwise refund bonds or other obligations the original 398.29 series of which were issued before May 19, 1993. 398.30 (g) Mortgages taken in good faith by persons or 398.31 corporations whose property is expressly exempted from taxation 398.32 by section 272.02, subdivisions 2 to 8, or mortgagees that are 398.33 fraternal benefit societies subject to section 64B.24. 398.34 (h) A mortgage amendment or extension, as defined in 398.35 section 287.01. 398.36 (i) An agricultural mortgage if the proceeds of the loan 399.1 secured by the mortgage are used (1) to acquire or improve real 399.2 property classified under section 273.13, subdivision 23, 399.3 paragraph (a) or (b), clause (1), (2), or (3); or (2) in the 399.4 production of agricultural products as defined in section 399.5 273.13, subdivision 23, paragraph (e), and the mortgagor signs a 399.6 statement provided by the county stating that the proceeds of 399.7 the loan secured by the mortgage will be used for the purposes 399.8 listed under this subdivision. 399.9[EFFECTIVE DATE.] This section is effective for documents 399.10 recorded on or after July 1, 2001. 399.11 Sec. 5. Minnesota Statutes 2000, section 287.20, 399.12 subdivision 2, is amended to read: 399.13 Subd. 2. [CONSIDERATION.] (a) "Consideration" means 399.14 generally the total monetary value that is given in return for a 399.15 conveyance of real property in this state and includes all 399.16 lump-sum payments, all prior or future installment payments that 399.17 are required under the agreement between the parties, and the 399.18 fair market value of any property taken, or to be taken, in 399.19 exchange. 399.20 (b) Consideration does not include the reasonable and 399.21 lawful amounts of interest paid for the privilege of paying the 399.22 purchase price in installments and the fair market value of any 399.23 items of intangible personal property that are conveyed by the 399.24 taxable instrument. 399.25 (c) Consideration does not include the amount paid for the 399.26 personal property located on the real property being conveyed 399.27 and transferred as a part of the total consideration, except 399.28 that the amount paid for the personal property located on the 399.29 real property being conveyed must be included if the real 399.30 property being conveyed is a one-, two-, or three-unit 399.31 residential structure. 399.32 (d) When a conveyance of real property is made pursuant to 399.33 a contract for deed, the consideration is the price for the real 399.34 property reflected in the contract; except that, subject to the 399.35 limitations under section 287.221,when the conveyance is made399.36by a person engaged in the business of land sales or400.1construction of buildings and other improvements, or by an400.2affiliated personif the contract for deed, or other agreement 400.3 entered into as a condition to the seller executing the 400.4 contract, requires the property to be improved during the term 400.5 of the contract and the price of the real property as reflected 400.6 in the contract does not include the consideration for the 400.7 required improvements, then the consideration is theamount paid400.8for the landprice for the real property as reflected in the 400.9 contract and the consideration for the required improvements 400.10 added during the term of the contract.By January 1, 2001, the400.11commissioner shall adopt rules that define the phrases "engaged400.12in the business of land sales or construction of buildings and400.13other improvements" and "affiliated person" as those phrases are400.14used in this paragraph.400.15 (e) "Total consideration" has the same meaning as 400.16 consideration. 400.17 (f) "Consideration, exclusive of the value of any lien or 400.18 encumbrance remaining at the time of sale" or "net 400.19 consideration" means the amount of consideration as reduced by 400.20 the amount outstanding under any lien that attached to the real 400.21 property prior to the time of sale and that is not released or 400.22 satisfied as a result of the sale. 400.23[EFFECTIVE DATE.] This section is effective for deeds 400.24 recorded on or after July 1, 2001. 400.25 Sec. 6. Minnesota Statutes 2000, section 287.21, 400.26 subdivision 1, is amended to read: 400.27 Subdivision 1. [DETERMINATION OF TAX.] (a) A tax is 400.28 imposed on each deed or instrument by which any real property in 400.29 this state is granted, assigned, transferred, or otherwise 400.30 conveyed. The tax applies against the net consideration. 400.31 (b) The tax is determined in the following manner: (1) 400.32 when transfers are made by instruments pursuant to mergers, 400.33 consolidations, sales, or transfers of substantially all of the 400.34 assets of the entities as defined in section 287.20, subdivision 400.35 9, pursuant to plans of reorganization, the tax is $1.65; (2) 400.36 when there is no consideration or when the consideration, 401.1 exclusive of the value of any lien or encumbrance remaining 401.2 thereon at the time of sale, is $500 or less, the tax is $1.65; 401.3 or (3) when the consideration, exclusive of the value of any 401.4 lien or encumbrance remaining at the time of sale, exceeds $500, 401.5 the tax is$1.65 plus $1.65 for each additional $500 or fraction401.6of that amount.0033 of the net consideration. 401.7 (c) The tax is due at the time a taxable deed or instrument 401.8 is presented for recording. 401.9[EFFECTIVE DATE.] This section is effective for documents 401.10 executed, recorded, or registered after June 30, 2001. 401.11 Sec. 7. Minnesota Statutes 2000, section 296A.07, 401.12 subdivision 4, is amended to read: 401.13 Subd. 4. [TRANSIT SYSTEM EXEMPTEXEMPTIONS.] The 401.14 provisions of subdivision 1 do not apply to gasoline purchased 401.15 by: 401.16 (1) a transit system or transit provider receiving 401.17 financial assistance or reimbursement under section 174.24, 401.18 256B.0625, subdivision 17, or 473.384; or 401.19 (2) an ambulance service licensed under chapter 144E. 401.20 Sec. 8. Minnesota Statutes 2000, section 296A.07, is 401.21 amended by adding a subdivision to read: 401.22 Subd. 5. [ANNUAL GASOLINE TAX RATE ADJUSTMENT.] (a) Before 401.23 April 1 of each year, the commissioner of revenue shall 401.24 recompute and publish the rate of the gasoline excise tax. The 401.25 new rate per gallon must be calculated by multiplying the rate 401.26 in effect at the time of the calculation by an amount obtained 401.27 under paragraph (b). The new rate must be rounded to the 401.28 nearest 0.1 cent and is effective on April 1 of each year. 401.29 (b) Divide the annual average United States Consumer Price 401.30 Index for all urban consumers, United States city average, as 401.31 determined by the United States Department of Labor for the 401.32 previous year by that annual average for the year before the 401.33 previous year. 401.34[EFFECTIVE DATE.] This section is effective January 1, 2003. 401.35 Sec. 9. Minnesota Statutes 2000, section 296A.08, 401.36 subdivision 1, is amended to read: 402.1 Subdivision 1. [TAX IMPOSED.] There is imposed an excise 402.2 tax on all special fuel at the rates specified in subdivision 402.3 2. For purposes of this section, "owner or operator" means the 402.4 operation of licensed motor vehicles, whether loaded or empty, 402.5 whether for compensation or not for compensation, and whether 402.6 owned by or leased to the motor carrier who operates them or 402.7 causes them to be operated. 402.8 (a) For undyed diesel fuel, biodiesel fuel oil, and undyed 402.9 kerosene, the tax is imposed on the first licensed distributor 402.10 who received the product in Minnesota. 402.11 (b) For dyed fuel being used illegally in a licensed motor 402.12 vehicle, the tax is imposed on the owner or operator of the 402.13 motor vehicle. 402.14 (c) For dyed fuel used in a motor vehicle but subject to a 402.15 federal exemption, although no federal tax may be imposed, the 402.16 owner or operator of the vehicle is liable for the state tax. 402.17 (d) For other fuels, including jet fuel, propane, and 402.18 compressed natural gas, the tax is imposed on the distributor, 402.19 special fuel dealer, or bulk purchaser. 402.20 (e) Any person delivering special fuel on which the excise 402.21 tax has not previously been paid, into the supply tank of an 402.22 aircraft or a licensed motor vehicle shall report such delivery 402.23 and shall pay, or collect and pay the excise tax on the special 402.24 fuel so delivered to the commissioner. 402.25 Sec. 10. Minnesota Statutes 2000, section 296A.08, 402.26 subdivision 3, is amended to read: 402.27 Subd. 3. [TRANSIT SYSTEM EXEMPTEXEMPTIONS.] The 402.28 provisions of subdivisions 1 and 2 do not apply to special fuel 402.29 or alternative fuels purchased by: 402.30 (1) a transit system or transit provider receiving 402.31 financial assistance or reimbursement under section 174.24, 402.32 256B.0625, subdivision 17, or 473.384; or 402.33 (2) an ambulance service licensed under chapter 144E. 402.34 Sec. 11. Minnesota Statutes 2000, section 296A.08, is 402.35 amended by adding a subdivision to read: 402.36 Subd. 7. [ANNUAL SPECIAL FUEL TAX RATE ADJUSTMENT.] (a) 403.1 Before April 1 of each year, the commissioner of revenue shall 403.2 recompute and publish the rate of the special fuel tax. The new 403.3 rate must be calculated by multiplying the rate in effect at the 403.4 time of the calculation by an amount obtained under paragraph 403.5 (b). The new rate must be rounded to the nearest 0.1 cent and 403.6 is effective on April 1 of each year. 403.7 (b) Divide the annual average United States Consumer Price 403.8 Index for all urban consumers, United States city average, as 403.9 determined by the United States Department of Labor for the 403.10 previous year by that annual average for the year before the 403.11 previous year. 403.12[EFFECTIVE DATE.] This section is effective January 1, 2003. 403.13 Sec. 12. Minnesota Statutes 2000, section 296A.15, 403.14 subdivision 1, is amended to read: 403.15 Subdivision 1. [MONTHLY GASOLINE REPORT; SHRINKAGE 403.16 ALLOWANCE.] (a) Except as provided in paragraph (e), on or 403.17 before the 23rd day of each month, every person who is required 403.18 to pay a gasoline tax shall file with the commissioner a report, 403.19 in the form and manner prescribed by the commissioner, showing 403.20 the number of gallons of petroleum products received by the 403.21 reporter during the preceding calendar month, and other 403.22 information the commissioner may require. A written report is 403.23 deemed to have been filed as required in this subdivision if 403.24 postmarked on or before the 23rd day of the month in which the 403.25 tax is payable. 403.26 (b) The number of gallons of gasoline must be reported in 403.27 United States standard liquid gallons, 231 cubic inches, except 403.28 that the commissioner may upon written application and for cause 403.29 shown permit the distributor to report the number of gallons of 403.30 gasoline as corrected to a temperature of 60-degrees 403.31 Fahrenheit. If the application is granted, all gasoline covered 403.32 in the application and allowed by the commissioner must continue 403.33 to be reported by the distributor on the adjusted basis for a 403.34 period of one year from the date of the granting of the 403.35 application. The number of gallons of petroleum products other 403.36 than gasoline must be reported as originally invoiced. Each 404.1 report must show separately the number of gallons of aviation 404.2 gasoline received by the reporter during each calendar month. 404.3 (c) Each report must also include the amount of gasoline 404.4 tax on gasoline received by the reporter during the preceding 404.5 month. In computing the tax a deduction ofthree2.5 percent of 404.6 the quantity of gasoline received by a distributor shall be made 404.7 for evaporation and loss. At the time of reporting, the 404.8 reporter shall submit satisfactory evidence that one-third of 404.9 thethree2.5 percent deduction has been credited or paid to 404.10 dealers on quantities sold to them. 404.11 (d) Each report shall contain a confession of judgment for 404.12 the amount of the tax shown due to the extent not timely paid. 404.13 (e) Under certain circumstances and with the approval of 404.14 the commissioner, taxpayers may be allowed to file reports 404.15 annually. 404.16[EFFECTIVE DATE.] This section is effective for reports due 404.17 on or after July 1, 2001. 404.18 Sec. 13. Minnesota Statutes 2000, section 297B.09, 404.19 subdivision 1, is amended to read: 404.20 Subdivision 1. [GENERAL FUND SHARE.]Money collected and404.21received under this chapter must be deposited as provided in404.22this subdivision.404.23 Thirty-two percent of the money collected and received 404.24 under this chapter after June 30, 2001, must be deposited in the 404.25 highway user tax distribution fund, and the remaining 68 percent 404.26 of the money must be deposited in the general fund. 404.27 Sec. 14. Minnesota Statutes 2000, section 297H.04, is 404.28 amended by adding a subdivision to read: 404.29 Subd. 4. [DISPOSAL WITH MIXED WASTE; RATE.] Nonmixed 404.30 municipal solid waste that is separately collected or processed, 404.31 but is disposed of within the permitted boundaries of a land 404.32 disposal facility that is also actively accepting and disposing 404.33 of mixed municipal solid waste, shall be taxed at the rate for 404.34 mixed municipal solid waste, unless the facility owner and 404.35 operator can demonstrate a physical separation between the mixed 404.36 municipal solid waste disposal area and nonmixed municipal solid 405.1 waste disposal area, such that any air or liquid emissions being 405.2 collected from the disposal areas are collected separately. 405.3[EFFECTIVE DATE.] This section is effective for waste 405.4 disposed of after June 30, 2001. 405.5 Sec. 15. [297H.14] [MIXED MUNICIPAL SOLID WASTE PROCESSING 405.6 TAX CREDIT.] 405.7 Subdivision 1. [DEFINITIONS.] (a) "Commissioner" means the 405.8 commissioner of revenue. 405.9 (b) "Processed" means mixed municipal solid waste that has 405.10 been: 405.11 (1) burned for energy recovery; or 405.12 (2) processed into usable compost or refuse derived fuel. 405.13 (c) "Resource recovery facility" has the meaning given it 405.14 in section 115A.03, subdivision 28. 405.15 Subd. 2. [TAX CREDIT.] (a) The commissioner shall pay 405.16 counties a processing tax credit for each ton of mixed municipal 405.17 solid waste that is generated in the county and processed at a 405.18 resource recovery facility located in Minnesota. The processing 405.19 tax credit shall be $10 for each ton of mixed municipal solid 405.20 waste processed. 405.21 (b) By the last day of October, January, April, and July, 405.22 each county claiming the credit shall file a claim for payment 405.23 with the commissioner for the three previous months certifying 405.24 the number of tons of mixed municipal solid waste that were 405.25 generated in the county and processed at a resource recovery 405.26 facility. The commissioner shall pay the processing tax credits 405.27 by November 15, February 15, May 15, and August 15 each year. 405.28 (c) If the total amount for which all counties are eligible 405.29 in a quarter exceeds the amount available for payment, the 405.30 commissioner shall make the payments on a pro rata basis. 405.31 (d) All of the credit received by a county must be used to 405.32 pay for resource recovery services. At least 50 percent of the 405.33 credit received by a county must be used to lower the tipping 405.34 fee for waste to be processed at a resource recovery facility. 405.35 Subd. 3. [EXPIRATION DATE.] The tax credit in this section 405.36 expires on July 1, 2005. For waste delivered to a resource 406.1 recovery facility from April 1, 2005, to June 30, 2005, a county 406.2 must submit payment claims by July 31, 2005. The commissioner 406.3 shall make the final mixed municipal solid waste processing tax 406.4 credit payments by August 15, 2005. 406.5 Subd. 4. [APPROPRIATION.] $12,000,000 in fiscal year 2002 406.6 and $12,000,000 in fiscal year 2003 are appropriated from the 406.7 environmental fund to the commissioner of revenue for mixed 406.8 municipal solid waste processing tax credits under this section. 406.9[EFFECTIVE DATE.] This section is effective on July 1, 406.10 2001, and applies to waste delivered to a resource recovery 406.11 facility beginning July 1, 2001. 406.12 Sec. 16. Minnesota Statutes 2000, section 297I.40, 406.13 subdivision 1, is amended to read: 406.14 Subdivision 1. [REQUIREMENT TO PAY.] On or beforeApril 1406.15 March 15, June115, September 15, and December1 of each year406.16 15 of the current year, every taxpayer subject to tax under 406.17 section 297I.05, subdivisions 1 to 6, and 12, paragraphs (a), 406.18 clauses (1) to (5), (b), and (e), must pay to the commissioner 406.19 an installment equal toone-thirdone-fourth of the insurer's 406.20 total estimated tax for the current year. 406.21[EFFECTIVE DATE.] This section is effective for payments 406.22 required to be made after December 31, 2001. 406.23 Sec. 17. Minnesota Statutes 2000, section 297I.40, 406.24 subdivision 2, is amended to read: 406.25 Subd. 2. [AMOUNT OF REQUIRED INSTALLMENT.] The amount of 406.26 any required installment isone-thirdone-fourth of the lesser 406.27 of 406.28 (1) 80 percent of the tax imposed for the current year, or 406.29 (2) 100 percent of the tax paid for the previous year. 406.30[EFFECTIVE DATE.] This section is effective for payments 406.31 required to be made after December 31, 2001. 406.32 Sec. 18. Minnesota Statutes 2000, section 297I.40, 406.33 subdivision 7, is amended to read: 406.34 Subd. 7. [APRILMARCH ESTIMATED PAYMENT.] A taxpayer who 406.35 claims a refund of an overpayment on an original return may 406.36 elect to have all or any portion of the overpayment applied as a 407.1 credit to theApril 1March 15 estimated tax payment for the 407.2 year following the year of the return. The credit is considered 407.3 applied onApril 1March 15. Notwithstanding section 297I.80, 407.4 the amount credited does not bear interest. 407.5[EFFECTIVE DATE.] This section is effective for payments 407.6 required to be made after December 31, 2001. 407.7 Sec. 19. Laws 2000, chapter 490, article 7, section 3, is 407.8 amended to read: 407.9 Sec. 3. [APPROPRIATION.] 407.10 For fiscal year 2001, $149,804,000 is appropriated from the 407.11 general fund to the highway user tax distribution fund.For407.12fiscal year 2002, $161,723,000 is appropriated from the general407.13fund to the highway user tax distribution fund.407.14 Sec. 20. [APPROPRIATION.] 407.15 A one-time appropriation of $140,000 is appropriated for 407.16 fiscal year 2002 from the highway user tax distribution fund to 407.17 the commissioner of revenue for systems modifications associated 407.18 with petroleum tax reform. 407.19 Sec. 21. [REPEALER.] 407.20 Minnesota Statutes 2000, section 296A.16, subdivision 6, is 407.21 repealed. 407.22[EFFECTIVE DATE.] This section is effective the day 407.23 following final enactment. 407.24 ARTICLE 17 407.25 ELECTRONIC FILING AND PAYING OF TAXES 407.26 Section 1. Minnesota Statutes 2000, section 115B.24, 407.27 subdivision 2, is amended to read: 407.28 Subd. 2. [DECLARATIONS OF ESTIMATED TAX.]For 1983, every407.29generator of hazardous waste required to pay a tax pursuant to407.30section 115B.22 shall make a declaration of estimated hazardous407.31waste generated for the last six months of calendar year 1983 if407.32the tax can reasonably be estimated to exceed $500. The407.33declaration of the estimated tax shall be filed by October 15,407.341983. The amount of estimated tax with respect to which a407.35declaration is required shall be paid in two equal installments407.36by October 15, 1983 and January 15, 1984.For 1984 and 408.1 subsequent years, every generator of hazardous waste required to 408.2 pay a tax pursuant to section 115B.22 shall make a declaration 408.3 of estimated hazardous waste generated for the calendar year if 408.4 the tax can reasonably be expected to be in excess of $1,000. 408.5 The declaration of estimated tax shall be filed by March 15. 408.6 The amount of estimated tax with respect to which a declaration 408.7 is required shall be paid in four equal installments on or 408.8 before the 15th day of March, June, September, and December. 408.9 An amendment of a declaration may be filed in any interval 408.10 between installment dates prescribed above but only one 408.11 amendment may be filed in each interval. If an amendment of a 408.12 declaration is filed, the amount of each remaining installment 408.13 shall be the amount which would have been payable if the new 408.14 estimate had been made when the first estimate for the calendar 408.15 year was made, increased or decreased, as the case may be, by 408.16 the amount computed by dividing 408.17 (1) the difference between (A) the amount of estimated tax 408.18 required to be paid before the date on which the amendment was 408.19 made, and (B) the amount of estimated tax which would have been 408.20 required to be paid before that date if the new estimate had 408.21 been made when the first estimate was made, by 408.22 (2) the number of installments remaining to be paid on or 408.23 after the date on which the amendment is made. 408.24 The commissioner of revenue may grant a reasonable 408.25 extension of time for filing any declaration but the extension 408.26 shall not be for more than six months. 408.27 If the aggregate amount of estimated tax payments made 408.28 duringathe fiscal year ending June 30, 2001, is equal to or 408.29 exceeds $80,000, or $40,000 for the fiscal year ending June 30, 408.30 2002, $20,000 for the fiscal year ending June 30, 2003, and 408.31 $10,000 for the fiscal year ending June 30, 2004, and each 408.32 fiscal year ending June 30 thereafter, all estimated tax 408.33 payments in the subsequent calendar year must be paid 408.34 by electronic meansof a funds transfer as defined in section408.35336.4A-104, paragraph (a). The funds transfer payment date, as408.36defined in section 336.4A-401, must be on or before the date the409.1estimated tax payment is due. If the date the estimated tax409.2payment is due is not a funds transfer business day, as defined409.3in section 336.4A-105, paragraph (a), clause (4), the payment409.4date must be on or before the funds transfer business day next409.5following the date the estimated tax payment is due. 409.6[EFFECTIVE DATE.] This section is effective for payments 409.7 due on or after July 1, 2001. 409.8 Sec. 2. Minnesota Statutes 2000, section 270.271, 409.9 subdivision 1, is amended to read: 409.10 Subdivision 1. [DATE OF DELIVERY.] When a document, 409.11 including a return, claim, or statement, is required to be 409.12 filed, or a payment is required to be made to the commissioner 409.13 within a prescribed period, or on or before a prescribed date, 409.14 and if the document or payment is delivered by electronic means 409.15 or by United States mail after the period or the date to the 409.16 place prescribed for filing or payment, then the date of 409.17 delivery or of payment is the date of the confirmation 409.18 time-and-date stamp of the transaction, if delivered by 409.19 electronic means, or the date of the United States postmark 409.20 stamped on the cover in which the document or payment is mailed, 409.21 if delivered by United States mailshall be considered the date409.22of delivery or of payment, as the case may be. 409.23[EFFECTIVE DATE.] This section is effective for returns and 409.24 payments due on or after July 1, 2001. 409.25 Sec. 3. Minnesota Statutes 2000, section 270.271, 409.26 subdivision 3, is amended to read: 409.27 Subd. 3. [CONFIRMATION OF ELECTRONIC FILING AND PAYMENT 409.28 AND UNITED STATES POSTAL SERVICE POSTMARK.] The confirmation 409.29 numbers and confirmation time-and-date stamps received by the 409.30 taxpayer following electronic payment or filing is proof of the 409.31 payment authorization and filing dates. Only the postmark of 409.32 the United States Postal Service, rather than those of private 409.33 postage meters, qualifies as proof of timely mailing under this 409.34 section. If the document or payment is sent by United States 409.35 registered mail, the date of registration shall be treated as 409.36 the postmark date. If the document or payment is sent by United 410.1 States certified mail and the sender's receipt is postmarked by 410.2 the postal employee to whom the envelope containing such 410.3 document or payment is presented, the date of the United States 410.4 postmark on the receipt shall be treated as the postmark date of 410.5 the document or payment. 410.6[EFFECTIVE DATE.] This section is effective for returns and 410.7 payments due on or after July 1, 2001. 410.8 Sec. 4. Minnesota Statutes 2000, section 270.771, is 410.9 amended to read: 410.10 270.771 [PAYMENTS REQUIRED TO BE MADEBY ELECTRONIC FUNDS410.11TRANSFERELECTRONICALLY.] 410.12 (a) If a taxpayer is required to make payment of a tax to 410.13 the commissioner by electronic meansof electronic funds410.14transfer as defined in section 336.4A-104, paragraph (a), the 410.15 taxpayer shall make all payments of all taxes and fees paid to 410.16 the commissioner by electronic meansof electronic funds410.17transfer. 410.18 (b) Paragraph (a) does not apply to payments required to be 410.19 made for individual income taxes under section 289A.20, 410.20 subdivision 1, paragraph (a), or 289A.25. 410.21[EFFECTIVE DATE.] This section is effective the day 410.22 following final enactment. 410.23 Sec. 5. Minnesota Statutes 2000, section 270.78, is 410.24 amended to read: 410.25 270.78 [PENALTY FOR FAILURE TOMAKE PAYMENT BY ELECTRONIC410.26FUNDS TRANSFERPAY ELECTRONICALLY.] 410.27 In addition to other applicable penalties imposed by law, 410.28 after notification from the commissioner of revenue to the 410.29 taxpayer that payments for a tax administered by the 410.30 commissioner are required to be made by electronic meansof410.31electronic funds transfer, and the payments are remitted by some 410.32 other means, there is a penalty in the amount of five percent of 410.33 each payment that should have been remitted 410.34 electronically. After the commissioner's initial notification 410.35 to the taxpayer that payments are required to be made by 410.36 electronic means, the commissioner is not required to notify the 411.1 taxpayer in subsequent periods if the initial notification 411.2 specified the amount of tax liability at which a taxpayer is 411.3 required to remit payments by electronic means. The penalty can 411.4 be abated under the abatement procedures prescribed in section 411.5 270.07, subdivision 6, if the failure to remit the payment 411.6 electronically is due to reasonable cause. The penalty bears 411.7 interest at the rate specified in section 270.75 from the due 411.8 date of the payment of the tax to the date of payment of the 411.9 penalty. 411.10[EFFECTIVE DATE.] This section is effective the day 411.11 following final enactment. 411.12 Sec. 6. Minnesota Statutes 2000, section 287.12, is 411.13 amended to read: 411.14 287.12 [TAXES, HOW APPORTIONED.] 411.15 (a) All taxes paid to the county treasurer under the 411.16 provisions of sections 287.01 to 287.12 must be apportioned, 97 411.17 percent to the general fund of the state, and three percent to 411.18 the county revenue fund. 411.19 (b) On or before the 20th day of each month the county 411.20 treasurer shall determine and pay to the commissioner of revenue 411.21 for deposit in the state treasury and credit to the general fund 411.22 the state's portion of the receipts from the mortgage registry 411.23 tax during the preceding month subject to the electronicfunds411.24transferpayment requirements of section 270.771. The county 411.25 treasurer shall provide any related reports requested by the 411.26 commissioner of revenue. 411.27[EFFECTIVE DATE.] This section is effective the day 411.28 following final enactment. 411.29 Sec. 7. Minnesota Statutes 2000, section 289A.02, is 411.30 amended by adding a subdivision to read: 411.31 Subd. 8. [ELECTRONIC MEANS.] "Electronic means" refers to 411.32 a method that is electronic, as defined in section 325L.02, 411.33 paragraph (e), and that is prescribed by the commissioner. 411.34[EFFECTIVE DATE.] This section is effective the day 411.35 following final enactment. 411.36 Sec. 8. Minnesota Statutes 2000, section 289A.18, 412.1 subdivision 4, is amended to read: 412.2 Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use 412.3 tax returns must be filed on or before the 20th day of the month 412.4 following the close of the preceding reporting period, except 412.5 that annual use tax returns provided for under section 289A.11, 412.6 subdivision 1, must be filed by April 15 following the close of 412.7 the calendar year, in the case of individuals. Annual use tax 412.8 returns of businesses, including sole proprietorships, and 412.9 annual sales tax returns must be filed by February 5 following 412.10 the close of the calendar year. 412.11 (b)Except for the return for the June reporting period,412.12which is due on the following August 25,Returns for the June 412.13 reporting period filed by retailers required to remit 412.14liabilities by means of funds transfertheir June liability 412.15 under section 289A.20, subdivision 4, paragraph(d)(b), are due 412.16 on or beforethe 25th day of the month following the close of412.17the preceding reporting periodAugust 20. 412.18 (c) If a retailer has an average sales and use tax 412.19 liability, including local sales and use taxes administered by 412.20 the commissioner, equal to or less than $500 per month in any 412.21 quarter of a calendar year, and has substantially complied with 412.22 the tax laws during the preceding four calendar quarters, the 412.23 retailer may request authorization to file and pay the taxes 412.24 quarterly in subsequent calendar quarters. The authorization 412.25 remains in effect during the period in which the retailer's 412.26 quarterly returns reflect sales and use tax liabilities of less 412.27 than $1,500 and there is continued compliance with state tax 412.28 laws. 412.29 (d) If a retailer has an average sales and use tax 412.30 liability, including local sales and use taxes administered by 412.31 the commissioner, equal to or less than $100 per month during a 412.32 calendar year, and has substantially complied with the tax laws 412.33 during that period, the retailer may request authorization to 412.34 file and pay the taxes annually in subsequent years. The 412.35 authorization remains in effect during the period in which the 412.36 retailer's annual returns reflect sales and use tax liabilities 413.1 of less than $1,200 and there is continued compliance with state 413.2 tax laws. 413.3 (e) The commissioner may also grant quarterly or annual 413.4 filing and payment authorizations to retailers if the 413.5 commissioner concludes that the retailers' future tax 413.6 liabilities will be less than the monthly totals identified in 413.7 paragraphs (c) and (d). An authorization granted under this 413.8 paragraph is subject to the same conditions as an authorization 413.9 granted under paragraphs (c) and (d). 413.10 (f) A taxpayer who is a materials supplier may report gross 413.11 receipts either on: 413.12 (1) the cash basis as the consideration is received; or 413.13 (2) the accrual basis as sales are made. 413.14 As used in this paragraph, "materials supplier" means a person 413.15 who provides materials for the improvement of real property; who 413.16 is primarily engaged in the sale of lumber and building 413.17 materials-related products to owners, contractors, 413.18 subcontractors, repairers, or consumers; who is authorized to 413.19 file a mechanics lien upon real property and improvements under 413.20 chapter 514; and who files with the commissioner an election to 413.21 file sales and use tax returns on the basis of this paragraph. 413.22[EFFECTIVE DATE.] This section is effective for returns due 413.23 on or after July 1, 2001. 413.24 Sec. 9. Minnesota Statutes 2000, section 289A.20, 413.25 subdivision 1, is amended to read: 413.26 Subdivision 1. [INDIVIDUAL INCOME, FIDUCIARY INCOME, 413.27 MINING COMPANY, CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] 413.28 (a) Individual income, fiduciary, mining company, and corporate 413.29 franchise taxes must be paid to the commissioner on or before 413.30 the date the return must be filed under section 289A.18, 413.31 subdivision 1, or the extended due date as provided in section 413.32 289A.19, unless an earlier date for payment is provided. 413.33 Notwithstanding any other law, a taxpayer whose unpaid 413.34 liability for income or corporate franchise taxes, as reflected 413.35 upon the return, is $1 or less need not pay the tax. 413.36 (b) Entertainment taxes must be paid on or before the date 414.1 the return must be filed under section 289A.18, subdivision 1. 414.2 (c) If a fiduciary administers 100 or more trusts, 414.3 fiduciary income taxes for all trusts administered by the 414.4 fiduciary must be paid byfunds transfer as defined in section414.5336.4A-104, paragraph (a). The funds transfer payment date, as414.6defined in section 336.4A-401, must be on or before the date the414.7tax payment is due. If the date the payment is due is not a414.8funds transfer business day, as defined in section 336.4A-105,414.9paragraph (a), clause (4), the payment date must be on or before414.10the funds transfer business day next following the date the414.11payment is dueelectronic means. 414.12[EFFECTIVE DATE.] This section is effective the day 414.13 following final enactment. 414.14 Sec. 10. Minnesota Statutes 2000, section 289A.20, 414.15 subdivision 2, is amended to read: 414.16 Subd. 2. [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 414.17 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 414.18 WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 414.19 (a) A tax required to be deducted and withheld during the 414.20 quarterly period must be paid on or before the last day of the 414.21 month following the close of the quarterly period, unless an 414.22 earlier time for payment is provided. A tax required to be 414.23 deducted and withheld from compensation of an entertainer and 414.24 from a payment to an out-of-state contractor must be paid on or 414.25 before the date the return for such tax must be filed under 414.26 section 289A.18, subdivision 2. Taxes required to be deducted 414.27 and withheld by partnerships and S corporations must be paid on 414.28 or before the date the return must be filed under section 414.29 289A.18, subdivision 2. 414.30 (b) An employer who, during the previous quarter, withheld 414.31 more than $1,500 of tax under section 290.92, subdivision 2a or 414.32 3, or 290.923, subdivision 2, must deposit tax withheld under 414.33 those sections with the commissioner within the time allowed to 414.34 deposit the employer's federal withheld employment taxes under 414.35 Treasury Regulation, section 31.6302-1, without regard to the 414.36 safe harbor or de minimis rules in subparagraph (f) or the 415.1 one-day rule in subsection (c), clause (3). Taxpayers must 415.2 submit a copy of their federal notice of deposit status to the 415.3 commissioner upon request by the commissioner. 415.4 (c) The commissioner may prescribe by rule other return 415.5 periods or deposit requirements. In prescribing the reporting 415.6 period, the commissioner may classify payors according to the 415.7 amount of their tax liability and may adopt an appropriate 415.8 reporting period for the class that the commissioner judges to 415.9 be consistent with efficient tax collection. In no event will 415.10 the duration of the reporting period be more than one year. 415.11 (d) If less than the correct amount of tax is paid to the 415.12 commissioner, proper adjustments with respect to both the tax 415.13 and the amount to be deducted must be made, without interest, in 415.14 the manner and at the times the commissioner prescribes. If the 415.15 underpayment cannot be adjusted, the amount of the underpayment 415.16 will be assessed and collected in the manner and at the times 415.17 the commissioner prescribes. 415.18 (e) If the aggregate amount of the tax withheld duringa415.19 the fiscal year ending June 30, 2001, under section 290.92, 415.20 subdivision 2a or 3, is equal to or exceedsthe amounts415.21established for remitting federal withheld taxes pursuant to the415.22regulations promulgated under section 6302(h) of the Internal415.23Revenue Code$25,000, or $10,000 for the fiscal year ending June 415.24 30, 2002, and each fiscal year ending June 30 thereafter, the 415.25 employer must remit each required deposit for wages paid in the 415.26 subsequent calendar year by electronic meansof a funds transfer415.27as defined in section 336.4A-104, paragraph (a). The funds415.28transfer payment date, as defined in section 336.4A-401, must be415.29on or before the date the deposit is due. If the date the415.30deposit is due is not a funds transfer business day, as defined415.31in section 336.4A-105, paragraph (a), clause (4), the payment415.32date must be on or before the funds transfer business day next415.33following the date the deposit is due. 415.34 (f) A third-party bulk filer as defined in section 290.92, 415.35 subdivision 30, paragraph (a), clause (2), who remits 415.36 withholding deposits must remit all deposits by electronic means 416.1of a funds transferas provided in paragraph (e), regardless of 416.2 the aggregate amount of tax withheld during a fiscal year for 416.3 all of the employers. 416.4[EFFECTIVE DATE.] This section is effective for payments 416.5 due on or after July 1, 2001. 416.6 Sec. 11. Minnesota Statutes 2000, section 289A.20, 416.7 subdivision 4, is amended to read: 416.8 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 416.9 chapter 297A are due and payable to the commissioner monthly on 416.10 or before the 20th day of the month following the month in which 416.11 the taxable event occurred, or following another reporting 416.12 period as the commissioner prescribes or as allowed under 416.13 section 289A.18, subdivision 4, paragraph (f), except that use 416.14 taxes due on an annual use tax return as provided under section 416.15 289A.11, subdivision 1, are payable by April 15 following the 416.16 close of the calendar year. 416.17 (b) A vendor having a liability of $120,000 or more during 416.18 a fiscal year ending June 30 must remit the June liability for 416.19 the next year in the following manner: 416.20 (1) Two business days before June 30 of the year, the 416.21 vendor must remit 62 percent of the estimated June liability to 416.22 the commissioner. 416.23 (2) On or before August1420 of the year, the vendor must 416.24 pay any additional amount of tax not remitted in June. 416.25 (c) A vendor having a liability of$120,000$80,000 or more 416.26 duringathe fiscal year ending June 30, 2001, or at least 416.27 $40,000 for the fiscal year ending June 30, 2002, $20,000 for 416.28 the fiscal year ending June 30, 2003, and $10,000 for the fiscal 416.29 year ending June 30, 2004, and each fiscal year ending June 30 416.30 thereafter, must remit all liabilities on returns due for 416.31 periods beginning in the subsequent calendar year by electronic 416.32 meansof a funds transfer as defined in section 336.4A-104,416.33paragraph (a). The funds transfer payment date, as defined in416.34section 336.4A-401, must beon or before the14th20th day of 416.35 the month following the month in which the taxable event 416.36 occurred, or on or before the14th20th day of the month 417.1 following the month in which the sale is reported under section 417.2 289A.18, subdivision 4, except for 62 percent of the estimated 417.3 June liability, which is due two business days before June 30. 417.4 The remaining amount of the June liability is due on August14417.5 20.If the date the tax is due is not a funds transfer business417.6day, as defined in section 336.4A-105, paragraph (a), clause417.7(4), the payment date must be on or before the funds transfer417.8business day next following the date the tax is due.417.9(d) If the vendor required to remit by electronic funds417.10transfer as provided in paragraph (c) is unable due to417.11reasonable cause to determine the actual sales and use tax due417.12on or before the due date for payment, the vendor may remit an417.13estimate of the tax owed using one of the following options:417.14(1) 100 percent of the tax reported on the previous month's417.15sales and use tax return;417.16(2) 100 percent of the tax reported on the sales and use417.17tax return for the same month in the previous calendar year; or417.18(3) 95 percent of the actual tax due.417.19Any additional amount of tax that is not remitted on or417.20before the due date for payment, must be remitted with the417.21return. If a vendor fails to remit the actual liability or does417.22not remit using one of the estimate options by the due date for417.23payment, the vendor must remit actual liability as provided in417.24paragraph (c) in all subsequent periods. This paragraph does417.25not apply to the June sales and use tax liability.417.26[EFFECTIVE DATE.] This section is effective for payments 417.27 due on or after July 1, 2001. 417.28 Sec. 12. Minnesota Statutes 2000, section 289A.26, 417.29 subdivision 2a, is amended to read: 417.30 Subd. 2a. [ELECTRONICFUNDS TRANSFERPAYMENTS.] If the 417.31 aggregate amount of estimated tax payments made during a 417.32 calendar year is equal to or exceeds $20,000, or $10,000 for the 417.33 calendar year 2004, and each calendar year thereafter, all 417.34 estimated tax payments in the subsequent calendar year must be 417.35 paid by electronic meansof a funds transfer as defined in417.36section 336.4A-104, paragraph (a). The funds transfer payment418.1date, as defined in section 336.4A-401, must be on or before the418.2date the estimated tax payment is due. If the date the418.3estimated tax payment is due is not a funds transfer business418.4day, as defined in section 336.4A-105, paragraph (a), clause418.5(4), the payment date must be on or before the funds transfer418.6business day next following the date the estimated tax payment418.7is due. 418.8[EFFECTIVE DATE.] This section is effective for payments 418.9 due on or after July 1, 2001. 418.10 Sec. 13. Minnesota Statutes 2000, section 289A.60, 418.11 subdivision 21, is amended to read: 418.12 Subd. 21. [PENALTY FOR FAILURE TO MAKE PAYMENT BY 418.13 ELECTRONICFUNDS TRANSFERMEANS.] In addition to other 418.14 applicable penalties imposed by this section, after notification 418.15 from the commissioner to the taxpayer that payments are required 418.16 to be made by electronic meansof electronic funds transfer418.17 under section 289A.20, subdivision 2, paragraph (e), or 4, 418.18 paragraph(d)(c), or 289A.26, subdivision 2a, and the payments 418.19 are remitted by some other means, there is a penalty in the 418.20 amount of five percent of each payment that should have been 418.21 remitted electronically. After the commissioner's initial 418.22 notification to the taxpayer that payments are required to be 418.23 made by electronic means, the commissioner is not required to 418.24 notify the taxpayer in subsequent periods if the initial 418.25 notification specified the amount of tax liability at which a 418.26 taxpayer is required to remit payments by electronic means. The 418.27 penalty can be abated under the abatement procedures prescribed 418.28 in section 270.07, subdivision 6, if the failure to remit the 418.29 payment electronically is due to reasonable cause. 418.30[EFFECTIVE DATE.] This section is effective the day 418.31 following final enactment. 418.32 Sec. 14. Minnesota Statutes 2000, section 295.55, 418.33 subdivision 4, is amended to read: 418.34 Subd. 4. [ELECTRONICFUNDS TRANSFERPAYMENTS.] A taxpayer 418.35 with an aggregate tax liability of$120,000$80,000 or more 418.36 duringathe fiscal year ending June 30, 2001, or at least 419.1 $40,000 for the fiscal year ending June 30, 2002, $20,000 for 419.2 the fiscal year ending June 30, 2003, and $10,000 for the fiscal 419.3 year ending June 30, 2004, and each fiscal year ending June 30 419.4 thereafter, must remit all liabilities by electronic meansof a419.5funds transfer as defined in section 336.4A-104, paragraph (a),419.6 in the subsequent calendar year.The funds transfer payment419.7date, as defined in section 336.4A-401, is on or before the date419.8the tax is due. If the date the tax is due is not a419.9funds-transfer business day, as defined in section 336.4A-105,419.10paragraph (a), clause (4), the payment date is on or before the419.11first funds-transfer business day after the date the tax is due.419.12[EFFECTIVE DATE.] This section is effective for payments 419.13 due on or after July 1, 2001. 419.14 Sec. 15. Minnesota Statutes 2000, section 296A.15, 419.15 subdivision 7, is amended to read: 419.16 Subd. 7. [ELECTRONICFUNDS TRANSFERPAYMENT REQUIRED.] All 419.17 remittances must be made by electronic meansof electronic funds419.18transfer as defined in section 336.4A-104, paragraph (a). The419.19funds transfer payment date, as defined in section 336.4A-401,419.20must be on or before the date the remittance is due. If the419.21date the remittance is due is not a funds transfer business day,419.22as defined in section 336.4A-105, paragraph (a), clause (4), the419.23payment date must be on or before the funds transfer business419.24day next following the date the remittance is due. 419.25[EFFECTIVE DATE.] This section is effective the day 419.26 following final enactment. 419.27 Sec. 16. Minnesota Statutes 2000, section 297E.02, 419.28 subdivision 4, is amended to read: 419.29 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 419.30 on the sale of each deal of pull-tabs and tipboards sold by a 419.31 distributor. The rate of the tax is 1.7 percent of the ideal 419.32 gross of the pull-tab or tipboard deal. The sales tax imposed 419.33 by chapter 297A on the sale of the pull-tabs and tipboards by 419.34 the distributor is imposed on the retail sales price less the 419.35 tax imposed by this subdivision. The retail sale of pull-tabs 419.36 or tipboards by the organization is exempt from taxes imposed by 420.1 chapter 297A and is exempt from all local taxes and license fees 420.2 except a fee authorized under section 349.16, subdivision 8. 420.3 (b) The liability for the tax imposed by this section is 420.4 incurred when the pull-tabs and tipboards are delivered by the 420.5 distributor to the customer or to a common or contract carrier 420.6 for delivery to the customer, or when received by the customer's 420.7 authorized representative at the distributor's place of 420.8 business, regardless of the distributor's method of accounting 420.9 or the terms of the sale. 420.10 The tax imposed by this subdivision is imposed on all sales 420.11 of pull-tabs and tipboards, except the following: 420.12 (1) sales to the governing body of an Indian tribal 420.13 organization for use on an Indian reservation; 420.14 (2) sales to distributors licensed under the laws of 420.15 another state or of a province of Canada, as long as all 420.16 statutory and regulatory requirements are met in the other state 420.17 or province; 420.18 (3) sales of promotional tickets as defined in section 420.19 349.12; and 420.20 (4) pull-tabs and tipboards sold to an organization that 420.21 sells pull-tabs and tipboards under the exemption from licensing 420.22 in section 349.166, subdivision 2. A distributor shall require 420.23 an organization conducting exempt gambling to show proof of its 420.24 exempt status before making a tax-exempt sale of pull-tabs or 420.25 tipboards to the organization. A distributor shall identify, on 420.26 all reports submitted to the commissioner, all sales of 420.27 pull-tabs and tipboards that are exempt from tax under this 420.28 subdivision. 420.29 (c) A distributor having a liability of$120,000$80,000 or 420.30 more duringathe fiscal year ending June 30, 2001, or at least 420.31 $40,000 for the fiscal year ending June 30, 2002, $20,000 for 420.32 the fiscal year ending June 30, 2003, and $10,000 for the fiscal 420.33 year ending June 30, 2004, and each fiscal year ending June 30 420.34 thereafter, must remit all liabilities in the subsequent 420.35 calendar year bya funds transfer as defined in section420.36336.4A-104, paragraph (a). The funds transfer payment date, as421.1defined in section 336.4A-401, must be on or before the date the421.2tax is due. If the date the tax is due is not a funds transfer421.3business day, as defined in section 336.4A-105, paragraph (a),421.4clause (4), the payment date must be on or before the funds421.5transfer business day next following the date the tax is421.6dueelectronic means. 421.7 (d) Any customer who purchases deals of pull-tabs or 421.8 tipboards from a distributor may file an annual claim for a 421.9 refund or credit of taxes paid pursuant to this subdivision for 421.10 unsold pull-tab and tipboard tickets. The claim must be filed 421.11 with the commissioner on a form prescribed by the commissioner 421.12 by March 20 of the year following the calendar year for which 421.13 the refund is claimed. The refund must be filed as part of the 421.14 customer's February monthly return. The refund or credit is 421.15 equal to 1.7 percent of the face value of the unsold pull-tab or 421.16 tipboard tickets, provided that the refund or credit will be 421.17 1.75 percent of the face value of the unsold pull-tab or 421.18 tipboard tickets for claims for a refund or credit of taxes 421.19 filed on the February 2001 monthly return. The refund claimed 421.20 will be applied as a credit against tax owing under this chapter 421.21 on the February monthly return. If the refund claimed exceeds 421.22 the tax owing on the February monthly return, that amount will 421.23 be refunded. The amount refunded will bear interest pursuant to 421.24 section 270.76 from 90 days after the claim is filed. 421.25[EFFECTIVE DATE.] This section is effective for payments 421.26 due on or after July 1, 2001. 421.27 Sec. 17. Minnesota Statutes 2000, section 297F.09, 421.28 subdivision 7, is amended to read: 421.29 Subd. 7. [ELECTRONICFUNDS TRANSFERPAYMENT.] A cigarette 421.30 or tobacco products distributor having a liability 421.31 of$120,000$80,000 or more duringathe fiscal year ending June 421.32 30, 2001, or at least $40,000 for the fiscal year ending June 421.33 30, 2002, $20,000 for the fiscal year ending June 30, 2003, and 421.34 $10,000 for the fiscal year ending June 30, 2004, and each 421.35 fiscal year ending June 30 thereafter, must remit all 421.36 liabilities in the subsequent calendar year by electronic means 422.1of a fund transfer as defined in section 336.4A-104, paragraph422.2(a). The funds transfer payment date, as defined in section422.3336.4A-401, must be on or before the date the tax is due. If422.4the date the tax is due is not a funds transfer business day, as422.5defined in section 336.4A-105, paragraph (a), clause (4), the422.6payment date must be on or before the funds transfer day422.7immediately following the date the tax is due. 422.8[EFFECTIVE DATE.] This section is effective for payments 422.9 due on or after July 1, 2001. 422.10 Sec. 18. Minnesota Statutes 2000, section 297G.09, 422.11 subdivision 6, is amended to read: 422.12 Subd. 6. [ELECTRONICFUNDS TRANSFERPAYMENTS.] A licensed 422.13 brewer, importer, or wholesaler having an excise tax liability 422.14 of$120,000$80,000 or more duringathe fiscal year ending June 422.15 30, 2001, or at least $40,000 for the fiscal year ending June 422.16 30, 2002, $20,000 for the fiscal year ending June 30, 2003, and 422.17 $10,000 for the fiscal year ending June 30, 2004, and each 422.18 fiscal year ending June 30 thereafter, must remit all excise tax 422.19 liabilities in the subsequent calendar year by electronic means 422.20of a funds transfer as defined in section 336.4A-104, paragraph422.21(a). The funds transfer payment date, as defined in section422.22336.4A-401, must be on or before the date the excise tax is422.23due. If the date the excise tax is due is not a funds transfer422.24business day, as defined in section 336.4A-105, paragraph (a),422.25clause (4), the payment date must be on or before the funds422.26transfer business day next following the date the excise tax is422.27due. 422.28[EFFECTIVE DATE.] This section is effective for payments 422.29 due on or after July 1, 2001. 422.30 Sec. 19. Minnesota Statutes 2000, section 297I.35, 422.31 subdivision 2, is amended to read: 422.32 Subd. 2. [ELECTRONICFUNDS TRANSFERPAYMENTS.] If the 422.33 aggregate amount of tax and surcharges due under this chapter 422.34 duringathe calendar year ending December 31, 2001, is equal to 422.35 or exceeds$120,000$80,000, or $40,000 for the calendar year 422.36 ending December 31, 2002, $20,000 for the calendar year ending 423.1 December 31, 2003, and $10,000 for the calendar year ending 423.2 December 31, 2004, and each calendar year thereafter, or if the 423.3 taxpayer is required to make payment of any other tax to the 423.4 commissioner by electronic meansof electronic funds transfer as423.5defined in section 336.4A-104, paragraph (a), then all tax and 423.6 surcharge payments in the subsequent calendar year must be paid 423.7 by electronic meansof a funds transfer as defined in section423.8336.4A-104, paragraph (a). The funds transfer payment date, as423.9defined in section 336.4A-104, must be on or before the date the423.10payment is due. If the date the payment is due is not a funds423.11transfer business day, as defined in section 336.4A-105,423.12paragraph (a), clause (4), the payment date must be on or before423.13the funds transfer business day next following the date the423.14payment is due. 423.15[EFFECTIVE DATE.] This section is effective for payments 423.16 due on or after January 1, 2002. 423.17 Sec. 20. Minnesota Statutes 2000, section 297I.85, 423.18 subdivision 7, is amended to read: 423.19 Subd. 7. [PENALTY FOR FAILURE TOMAKE PAYMENT BY423.20ELECTRONIC FUNDS TRANSFERPAY ELECTRONICALLY.] In addition to 423.21 other applicable penalties imposed by this section, if the 423.22 commissioner notifies the taxpayer that payments are required to 423.23 be made by electronic meansof electronic funds transfer, and 423.24 the payments are made by some other means, a penalty is 423.25 imposed. The amount of the penalty is equal to five percent of 423.26 each payment that should have been paid electronically. The 423.27 penalty may be abated under the abatement procedures prescribed 423.28 in section 270.07, subdivision 6, if the failure to pay 423.29 electronically is due to reasonable cause. 423.30[EFFECTIVE DATE.] This section is effective the day 423.31 following final enactment. 423.32 Sec. 21. Minnesota Statutes 2000, section 473.843, 423.33 subdivision 3, is amended to read: 423.34 Subd. 3. [PAYMENT OF FEE.] On or before the 20th day of 423.35 each month each operator shall pay the fee due under this 423.36 section for the previous month, using a form provided by the 424.1 commissioner of revenue. 424.2 An operator having a fee of$120,000$80,000 or more during 424.3athe fiscal year ending June 30, 2001, or at least $40,000 for 424.4 the fiscal year ending June 30, 2002, $20,000 for the fiscal 424.5 year ending June 30, 2003, and $10,000 for the fiscal year 424.6 ending June 30, 2004, and each fiscal year ending June 30 424.7 thereafter, must pay all fees in the subsequent calendar year by 424.8 electronic meansof a funds transfer as defined in section424.9336.4A-104, paragraph (a). The funds transfer payment date, as424.10defined in section 336.4A-401, must be on or before the date the424.11fee is due. If the date the fee is due is not a funds transfer424.12business day, as defined in section 336.4A-105, paragraph (a),424.13clause (4), the payment date must be on or before the funds424.14transfer business day next following the date the fee is due. 424.15[EFFECTIVE DATE.] This section is effective for payments 424.16 due on or after July 1, 2001. 424.17 ARTICLE 18 424.18 SALES TAX RECODIFICATION CORRECTIONS 424.19 Section 1. Minnesota Statutes 2000, section 289A.31, 424.20 subdivision 7, is amended to read: 424.21 Subd. 7. [SALES AND USE TAX.] (a) The sales and use tax 424.22 required to be collected by the retailer under chapter 297A 424.23 constitutes a debt owed by the retailer to Minnesota, and the 424.24 sums collected must be held as a special fund in trust for the 424.25 state of Minnesota. 424.26 A retailer who does not maintain a place of business within 424.27 this state as defined by section 297A.21, subdivision 1, shall 424.28 not be indebted to Minnesota for amounts of tax that it was 424.29 required to collect but did not collect unless the retailer knew 424.30 or had been advised by the commissioner of its obligation to 424.31 collect the tax. 424.32 (b) The use tax required to be paid by a purchaser is a 424.33 debt owed by the purchaser to Minnesota. 424.34 (c) The tax imposed by chapter 297A, and interest and 424.35 penalties, is a personal debt of the individual required to file 424.36 a return from the time the liability arises, irrespective of 425.1 when the time for payment of that liability occurs. The debt 425.2 is, in the case of the executor or administrator of the estate 425.3 of a decedent and in the case of a fiduciary, that of the 425.4 individual in an official or fiduciary capacity unless the 425.5 individual has voluntarily distributed the assets held in that 425.6 capacity without reserving sufficient assets to pay the tax, 425.7 interest, and penalties, in which case the individual is 425.8 personally liable for the deficiency. 425.9 (d) Liability for payment of sales and use taxes includes 425.10 any responsible person or entity described in the personal 425.11 liability provisions of section 270.101. 425.12 (e) Any amounts collected, even if erroneously or illegally 425.13 collected, from a purchaser under a representation that they are 425.14 taxes imposed under chapter 297A are state funds from the time 425.15 of collection and must be reported on a return filed with the 425.16 commissioner.The amounts collected are not subject to refund425.17unless the seller submits written evidence to the commissioner425.18that the tax and any interest earned on the tax has been or will425.19be refunded or credited to the purchaser by the seller.425.20 (f) The tax imposed under chapter 297A on sales of tickets 425.21 to the premises of or events sponsored by the state agricultural 425.22 society and conducted on the state fairgrounds during the period 425.23 of the annual state fair may be retained by the state 425.24 agricultural society if the funds are used and matched as 425.25 required under section 37.13, subdivision 2. 425.26 Sec. 2. Minnesota Statutes 2000, section 289A.50, 425.27 subdivision 2, is amended to read: 425.28 Subd. 2. [REFUND OF SALES TAX TO VENDORS; LIMITATION.] If 425.29 a vendor has collected from a purchaser and remitted to the 425.30 state a tax on a transaction that is not subject to the tax 425.31 imposed by chapter 297A, the tax is refundable to the vendor 425.32 only if and to the extent thatitthe tax and any interest 425.33 earned on the tax is credited to amounts due to the vendor by 425.34 the purchaser or returned to the purchaser by the vendor. In 425.35 addition to the requirements of subdivision 1, a claim for 425.36 refund under this subdivision must state in writing that the tax 426.1 and interest earned on the tax has been or will be refunded or 426.2 credited to the purchaser by the vendor. 426.3 Sec. 3. Minnesota Statutes 2000, section 297A.61, 426.4 subdivision 2, is amended to read: 426.5 Subd. 2. [PERSON.] (a) "Person" includes any individual,426.6and anyor grouporand any combination of individuals, 426.7 groups, or individuals and groups acting as a unit, and the426.8plural as well as the singular number. 426.9 (b) Person includes a firm, partnership, joint venture, 426.10 limited liability company, association, cooperative, social 426.11 club, fraternal organization, municipal or private corporation 426.12 whether or not organized for profit,estates, trusts, business426.13trustsestate, trust, business trust, receiver, trustee, 426.14 syndicate, the United States, and a state and its political 426.15 subdivisions. 426.16 (c) Person includes, but is not limited to, directors and 426.17 officers of corporations, governors and managers of a limited 426.18 liability company, or members of partnerships who, either 426.19 individually or jointly with others, have the control, 426.20 supervision, or responsibility of filing returns and making 426.21 payment of the amount of tax imposed by this chapter. 426.22 (d) Personalsoincludes any agent or consignee of any 426.23 individual or organizationenumeratedlisted in this subdivision. 426.24 Sec. 4. Minnesota Statutes 2000, section 297A.61, 426.25 subdivision 3, is amended to read: 426.26 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 426.27 include, but are not limited to, each of the transactions listed 426.28 in this subdivision. 426.29 (b) Sale and purchase include: 426.30 (1) any transfer of title or possession, or both, of 426.31 tangible personal property, whether absolutely or conditionally, 426.32 for a consideration in money or by exchange or barter; and 426.33 (2) the leasing of or the granting of a license to use or 426.34 consume, for a consideration in money or by exchange or barter, 426.35 tangible personal property, other than a manufactured home used 426.36 for residential purposes for a continuous period of 30 days or 427.1 more. 427.2 (c) Sale and purchase include the production, fabrication, 427.3 printing, or processing of tangible personal property for a 427.4 consideration for consumers who furnish either directly or 427.5 indirectly the materials used in the production, fabrication, 427.6 printing, or processing. 427.7 (d) Sale and purchase include the furnishing, preparing, or 427.8 serving for a consideration of food or drinks. Notwithstanding 427.9 section 297A.67, subdivision 2, taxable food or drinks include, 427.10 but are not limited to, the following: 427.11 (1) food or drinks sold by the retailer for immediate 427.12 consumption on the retailer's premises. Food and drinks sold 427.13 within a building or grounds that require an admission charge 427.14 for entrance are presumed to be sold for consumption on the 427.15 premises; 427.16 (2) food or drinks prepared by the retailer for immediate 427.17 consumption either on or off the retailer's premises. For 427.18 purposes of this subdivision, "food or drinks prepared for 427.19 immediate consumption" means any food product upon which an act 427.20 of preparation including, but not limited to, cooking, mixing, 427.21 sandwich making, blending, heating, or pouring has been 427.22 performed by the retailer so the food product may be immediately 427.23 consumed by the purchaser; 427.24 (3) ice cream, ice milk, frozen yogurt products, or frozen 427.25 novelties sold in single or individual servings including, but 427.26 not limited to, cones, sundaes, and snow cones; 427.27 (4) soft drinks and other beverages, including all 427.28 carbonated and noncarbonated beverages or drinks sold in liquid 427.29 form, but not including beverages or drinks which contain milk 427.30 or milk products, beverages or drinks containing 15 or more 427.31 percent fruit juice, and noncarbonated and noneffervescent 427.32 bottled water sold in individual containers of one-half gallon 427.33 or more in size; 427.34 (5) gum, candy, and candy products; 427.35 (6) ice; 427.36 (7) all food sold from vending machines; 428.1 (8) all food for immediate consumption sold from concession 428.2 stands and vehicles; 428.3 (9) party trays; 428.4 (10) all meals and single servings of packaged snack food 428.5 sold in restaurants and bars; and 428.6 (11) bakery products that are: 428.7 (i) prepared by the retailer for consumption on the 428.8 retailer's premises; 428.9 (ii) sold at a place that charges admission; 428.10 (iii) sold from vending machines; or 428.11 (iv) sold in single or individual servings from concession 428.12 stands, vehicles, bars, and restaurants. 428.13 For purposes of this paragraph, "single or individual 428.14 servings" does not include products when sold in bulk containers 428.15 or bulk packaging. 428.16 For purposes of this paragraph, "premises" means the total 428.17 space and facilities, including buildings, grounds, and parking 428.18 lots that are made available or that are available for use by 428.19 the retailer or customer for the purpose of sale or consumption 428.20 of prepared food and drinks. The premises of a caterer is the 428.21 place where the catered food or drinks are served. 428.22 (e) A sale and a purchase includes the furnishing for a 428.23 consideration of electricity, gas, water, or steam for use or 428.24 consumption within this state or local exchange telephone 428.25 service, intrastate toll service, and interstate toll service, 428.26 if that service originates from and is charged to a telephone 428.27 located in this state. Telephone service includes (1) paging 428.28 services, and (2) private communication service, as defined in 428.29 United States Code, title 26, section 4252(d), except for 428.30 private communication service purchased by an agent acting on 428.31 behalf of the state lottery. Telephone service does not include 428.32 services purchased with a prepaid telephone calling card. The 428.33 furnishing for a consideration of access to telephone services 428.34 by a hotel to its guests is a sale. The furnishing for a 428.35 consideration of items listed in this paragraph by a municipal 428.36 corporation is a sale. 429.1 (f) A sale and a purchase includes the transfer for a 429.2 consideration of computer software. 429.3 (g) A sale and a purchase includes the furnishing for a 429.4 consideration oftaxable services as defined in subdivision429.516.the following services: 429.6 (1) the privilege of admission to places of amusement, 429.7 recreational areas, or athletic events, and the making available 429.8 of amusement devices, tanning facilities, reducing salons, steam 429.9 baths, turkish baths, health clubs, and spas or athletic 429.10 facilities; 429.11 (2) lodging and related services by a hotel, rooming house, 429.12 resort, campground, motel, or trailer camp and the granting of 429.13 any similar license to use real property other than the renting 429.14 or leasing of it for a continuous period of 30 days or more; 429.15 (3) cable television services or similar television 429.16 services, including, but not limited to, charges for basic, 429.17 premium, pay-per-view, and any other similar service; 429.18 (4) parking services, whether on a contractual, hourly, or 429.19 other periodic basis, except for parking at a meter; 429.20 (5) the granting of membership in a club, association, or 429.21 other organization if: 429.22 (i) the club, association, or other organization makes 429.23 available for the use of its members sports and athletic 429.24 facilities, without regard to whether a separate charge is 429.25 assessed for use of the facilities; and 429.26 (ii) use of the sports and athletic facility is not made 429.27 available to the general public on the same basis as it is made 429.28 available to members. 429.29 Granting of membership means both one-time initiation fees and 429.30 periodic membership dues. Sports and athletic facilities 429.31 include golf courses; tennis, racquetball, handball, and squash 429.32 courts; basketball and volleyball facilities; running tracks; 429.33 exercise equipment; swimming pools; and other similar athletic 429.34 or sports facilities; and 429.35 (6) services as provided in this clause: 429.36 (i) laundry and dry cleaning services including cleaning, 430.1 pressing, repairing, altering, and storing clothes, linen 430.2 services and supply, cleaning and blocking hats, and carpet, 430.3 drapery, upholstery, and industrial cleaning. Laundry and dry 430.4 cleaning services do not include services provided by coin 430.5 operated facilities operated by the customer; 430.6 (ii) motor vehicle washing, waxing, and cleaning services, 430.7 including services provided by coin operated facilities operated 430.8 by the customer, and rustproofing, undercoating, and towing of 430.9 motor vehicles; 430.10 (iii) building and residential cleaning, maintenance, and 430.11 disinfecting and exterminating services; 430.12 (iv) detective, security, burglar, fire alarm, and armored 430.13 car services; but not including services performed within the 430.14 jurisdiction they serve by off-duty licensed peace officers as 430.15 defined in section 626.84, subdivision 1, or services provided 430.16 by a nonprofit organization for monitoring and electronic 430.17 surveillance of persons placed on in-home detention pursuant to 430.18 court order or under the direction of the Minnesota department 430.19 of corrections; 430.20 (v) pet grooming services; 430.21 (vi) lawn care, fertilizing, mowing, spraying and sprigging 430.22 services; garden planting and maintenance; tree, bush, and shrub 430.23 pruning, bracing, spraying, and surgery; indoor plant care; 430.24 tree, bush, shrub, and stump removal; and tree trimming for 430.25 public utility lines. Services performed under a construction 430.26 contract for the installation of shrubbery, plants, sod, trees, 430.27 bushes, and similar items are not taxable; 430.28 (vii) massages, except when provided by a licensed health 430.29 care facility or professional or upon written referral from a 430.30 licensed health care facility or professional for treatment of 430.31 illness, injury, or disease; and 430.32 (viii) the furnishing of lodging, board, and care services 430.33 for animals in kennels and other similar arrangements, but 430.34 excluding veterinary and horse boarding services. 430.35 The services listed in this clause (6) are taxable under 430.36 section 297A.62 if the service is performed wholly within 431.1 Minnesota or if the service is performed partly within and 431.2 partly outside Minnesota and the greater proportion of the 431.3 service is performed in Minnesota, based on the cost of 431.4 performance. In applying the provisions of this chapter, the 431.5 terms "tangible personal property" and "sales at retail" include 431.6 taxable services and the provision of taxable services, unless 431.7 specifically provided otherwise. Services performed by an 431.8 employee for an employer are not taxable. Services performed by 431.9 a partnership or association for another partnership or 431.10 association are not taxable if one of the entities owns or 431.11 controls more than 80 percent of the voting power of the equity 431.12 interest in the other entity. Services performed between 431.13 members of an affiliated group of corporations are not taxable. 431.14 For purposes of this section, "affiliated group of corporations" 431.15 includes those entities that would be classified as members of 431.16 an affiliated group under United States Code, title 26, section 431.17 1504, and that are eligible to file a consolidated tax return 431.18 for federal income tax purposes. 431.19 (h) A sale and a purchase includes the furnishing for a 431.20 consideration of tangible personal property or taxable services 431.21 by the United States or any of its agencies or 431.22 instrumentalities, or the state of Minnesota, its agencies, 431.23 instrumentalities, or political subdivisions. 431.24 Sec. 5. Minnesota Statutes 2000, section 297A.61, 431.25 subdivision 4, is amended to read: 431.26 Subd. 4. [RETAIL SALE.] (a) A "retail sale" means a sale 431.27 for any purpose other than resale in the regular course of 431.28 business. 431.29 (b) A sale of property used by the owner only by leasing it 431.30 to others or by holding it in an effort to lease it, and put to 431.31 no use by the owner other than resale after the lease or effort 431.32 to lease, is a sale of property for resale. 431.33 (c) A sale of master computer software that is purchased 431.34 and used to make copies for sale or lease is a sale of property 431.35 for resale. 431.36 (d) A sale of building materials, supplies, and equipment 432.1 to owners, contractors, subcontractors, or builders for the 432.2 erection of buildings or the alteration, repair, or improvement 432.3 of real property is a retail sale in whatever quantity sold, 432.4 whether the sale is for purposes of resale in the form of real 432.5 property or otherwise. 432.6 (e) A sale of carpeting, linoleum, or similar floor 432.7 covering to a person who provides for installation of the floor 432.8 covering is a retail sale and not a sale for resale since a sale 432.9 of floor covering which includes installation is a contract for 432.10 the improvement of real property. 432.11 (f) A sale of shrubbery, plants, sod, trees, and similar 432.12 items to a person who provides for installation of the items is 432.13 a retail sale and not a sale for resale since a sale of 432.14 shrubbery, plants, sod, trees, and similar items that includes 432.15 installation is a contract for the improvement of real property. 432.16 (g) A sale of tangible personal property that is awarded as 432.17 prizes is a retail sale and is not considered a sale of property 432.18 for resale. 432.19 (h) A sale of tangible personal property utilized or 432.20 employed in the furnishing or providing of services under 432.21 subdivision163, paragraph(b)(g), clause (1), including, but 432.22 not limited to, property given as promotional items, is a retail 432.23 sale and is not considered a sale of property for resale. 432.24 (i) A sale of tangible personal property used in conducting 432.25 lawful gambling under chapter 349 or the state lottery under 432.26 chapter 349A, including, but not limited to, property given as 432.27 promotional items, is a retail sale and is not considered a sale 432.28 of property for resale. 432.29 (j) A sale of machines, equipment, or devices that are used 432.30 to furnish, provide, or dispense goods or services, including, 432.31 but not limited to, coin-operated devices, is a retail sale and 432.32 is not considered a sale of property for resale. 432.33 (k) In the case of a lease, a retail sale occurs when an 432.34 obligation to make a lease payment becomes due under the terms 432.35 of the agreement or the trade practices of the lessor. 432.36 (l) In the case of a conditional sales contract, a retail 433.1 sale occurs upon the transfer of title or possession of the 433.2 tangible personal property. 433.3 Sec. 6. Minnesota Statutes 2000, section 297A.61, 433.4 subdivision 6, is amended to read: 433.5 Subd. 6. [USE.] (a) "Use" includes the exercise of a right 433.6 or power incident to the ownership of any interest in tangible 433.7 personal property, ortaxableservices, purchased from a 433.8 retailer, other than the sale of that property in the regular 433.9 course of business. 433.10 (b) Use includes the consumption of printed materials in 433.11 the creation of nontaxable advertising that is distributed, 433.12 either directly or indirectly, within Minnesota. 433.13 Sec. 7. Minnesota Statutes 2000, section 297A.61, 433.14 subdivision 10, is amended to read: 433.15 Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible 433.16 personal property" means corporeal personal property of any 433.17 kind, including property that is to become real property as a 433.18 result of incorporation, attachment, or installation following 433.19 its acquisition. 433.20 (b) Tangible personal property includes, but is not limited 433.21 to: 433.22 (1) computer software, whether contained on tape, discs, 433.23 cards, or other devices; and 433.24 (2) prepaid telephone calling cards. 433.25 (c) Tangible personal property does not include: 433.26 (1) large ponderous machinery and equipment used in a 433.27 business or production activity which at common law would be 433.28 considered to be real property; 433.29 (2) property which is subject to an ad valorem property 433.30 tax; 433.31 (3) property described in section 272.02, subdivision 9, 433.32 clauses (a) to (d); and 433.33 (4) property described in section 272.03, subdivision 2, 433.34 clauses (3) and (5). 433.35 Sec. 8. Minnesota Statutes 2000, section 297A.61, 433.36 subdivision 14, is amended to read: 434.1 Subd. 14. [LEASING; LEASE.] "Leasing" includes all 434.2 transfers of possession or the use of tangible personal property 434.3 by the lessee for a consideration, if title remains with the 434.4 lessor at the end of the lease.For purposes of this chapter,A 434.5 lease of tangible personal property is a series of sales 434.6 transactions that impose upon the lessee multiple payment 434.7 obligations. "Leasing" does not include a transaction defined 434.8 under subdivision 15. 434.9 Sec. 9. Minnesota Statutes 2000, section 297A.61, 434.10 subdivision 17, is amended to read: 434.11 Subd. 17. [COMPUTER SOFTWARE.] "Computer software" means a 434.12 computer program, either in the form of written procedures orin434.13the form of storage media on which, or in which, the program is434.14recordedcontained on tapes, discs, cards, or another device, or 434.15 any required documentation or manuals designed to facilitate the 434.16 use of the computer program. For purposes of this subdivision: 434.17 (1)"Storage media" includes punched cards, tapes, discs,434.18diskettes, or drums on which computer programs may be embodied434.19or stored;434.20(2)"Computer" does not include tape-controlled automatic 434.21 drilling, milling, or other manufacturing machinery or 434.22 equipment; and 434.23(3)(2) "Computer program" means information and directions 434.24 that dictate the function performed by data processing 434.25 equipment. It includes the complete plan for the solution of a 434.26 problem, such as the complete sequence of automatic data 434.27 processing equipment instructions necessary to solve a problem 434.28 and includes both systems and application programs and 434.29 subdivisions, such as assemblers, compilers, routines, 434.30 generators, and utility programs. Computer program includes a 434.31 "canned" or prewritten computer program that is held or existing 434.32 for general or repeated sale or lease, even if the prewritten or 434.33 "canned" program was initially developed on a custom basis or 434.34 for in-house use. 434.35 Sec. 10. Minnesota Statutes 2000, section 297A.61, 434.36 subdivision 19, is amended to read: 435.1 Subd. 19. [COMMONFOR-HIRE CARRIER.] "CommonFor-hire 435.2 carrier" means a person engaged in transportation for hire of 435.3 tangible personal propertyby motor vehicle, if the person:. 435.4(1) has a certificate or permit or has completed a435.5registration process that authorizes for-hire transportation of435.6property from the United States Department of Transportation,435.7the transportation regulation board, or the department of435.8transportation;435.9(2) is transporting commodities defined as "exempt" in435.10for-hire transportation; or435.11(3) transports tangible personal property pursuant to a435.12contract with a person described in clause (1) or (2).435.13 Sec. 11. Minnesota Statutes 2000, section 297A.61, 435.14 subdivision 22, is amended to read: 435.15 Subd. 22. [INTERNAL REVENUE CODE.] Unless specifically 435.16 provided otherwise, "Internal Revenue Code" means the Internal 435.17 Revenue Code of 1986, as amended through December 31,19992000. 435.18 Sec. 12. Minnesota Statutes 2000, section 297A.61, 435.19 subdivision 23, is amended to read: 435.20 Subd. 23. [UNITED STATES CODE.] Unless specifically 435.21 provided otherwise, "United States Code" means the United States 435.22 Code as amended through December 31,19992000. 435.23 Sec. 13. Minnesota Statutes 2000, section 297A.66, 435.24 subdivision 1, is amended to read: 435.25 Subdivision 1. [DEFINITIONS.] (a) "Retailer maintaining a 435.26 place of business in this state," or a similar term, means a 435.27 retailer: 435.28 (1) having or maintaining within this state, directly or by 435.29 a subsidiary, an office, place of distribution, sales or sample 435.30 room or place, warehouse, or other place of business; or 435.31 (2) having a representative, agent, salesperson, canvasser, 435.32 or solicitor operating in this state under the authority of the 435.33 retailer or its subsidiary, for any purpose, including the 435.34 repairing, selling, delivering, installing, or soliciting of 435.35 orders for the retailer's goods or services, or the leasing of 435.36 tangible personal property located in this state, whether the 436.1 place of business or agent, representative, salesperson, 436.2 canvasser, or solicitor is located in the state permanently or 436.3 temporarily, or whether or not the retailer or subsidiary is 436.4 authorized to do business in this state. 436.5 (b) "Destination of a sale" means the location to which the 436.6 retailer makes delivery of the property sold, or causes the 436.7 property to be delivered, to the purchaser of the property, or 436.8 to the agent or designee of the purchaser. The delivery may be 436.9 made by any means, including the United States Postal Service, a436.10common carrier,or acontractfor-hire carrier. 436.11 Sec. 14. Minnesota Statutes 2000, section 297A.66, 436.12 subdivision 3, is amended to read: 436.13 Subd. 3. [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN 436.14 THIS STATE.] (a) To the extent allowed by the United States 436.15 Constitution and the laws of the United States, a retailer 436.16 making retail sales from outside this state to a destination 436.17 within this state and not maintaining a place of business in 436.18 this state shall collect sales and use taxes and remit them to 436.19 the commissioner under section 297A.77, if the retailer engages 436.20 in the regular or systematic soliciting of sales from potential 436.21 customers in this state by: 436.22 (1) distribution, by mail or otherwise, of catalogs, 436.23 periodicals, advertising flyers, or other written solicitations 436.24 of business to customers in this state; 436.25 (2) display of advertisements on billboards or other 436.26 outdoor advertising in this state; 436.27 (3) advertisements in newspapers published in this state; 436.28 (4) advertisements in trade journals or other periodicals 436.29 the circulation of which is primarily within this state; 436.30 (5) advertisements in a Minnesota edition of a national or 436.31 regional publication or a limited regional edition in which this 436.32 state is included as part of a broader regional or national 436.33 publication which are not placed in other geographically defined 436.34 editions of the same issue of the same publication; 436.35 (6) advertisements in regional or national publications in 436.36 an edition which is not by its contents geographically targeted 437.1 to Minnesota but which is sold over the counter in Minnesota or 437.2 by subscription to Minnesota residents; 437.3 (7) advertisements broadcast on a radio or television 437.4 station located in Minnesota; or 437.5 (8) any other solicitation by telegraphy, telephone, 437.6 computer database, cable, optic, microwave, or other 437.7 communication system. 437.8 This paragraph (a) must be construed without regard to the 437.9 state from which distribution of the materials originated or in 437.10 which they were prepared. 437.11 (b) The location within or without this state of 437.12 independent vendorsindependent of the retailerthat provide 437.13 products or services to the retailer in connection with its 437.14 solicitation of customers within this state, including such 437.15 products and services as creation of copy, printing, 437.16 distribution, and recording, is not considered in determining 437.17 whether the retailer is required to collect tax. 437.18 (c) A retailer not maintaining a place of business in this 437.19 state is presumed, subject to rebuttal, to be engaged in regular 437.20 solicitation within this state if it engages in any of the 437.21 activities in paragraph (a) and: 437.22 (1) makes 100 or more retail sales from outside this state 437.23 to destinations in this state during a period of 12 consecutive 437.24 months; or 437.25 (2) makes ten or more retail sales totaling more than 437.26 $100,000 from outside this state to destinations in this state 437.27 during a period of 12 consecutive months. 437.28 Sec. 15. Minnesota Statutes 2000, section 297A.67, 437.29 subdivision 8, is amended to read: 437.30 Subd. 8. [CLOTHING.] Clothing and wearing apparel, 437.31 including sewing materials to be directly incorporated into 437.32 wearing apparel, are exempt. For purposes of this subdivision, 437.33 clothing and wearing apparel do not include the following: 437.34 (1) articles designed primarily for use while engaging in a 437.35 specific sport or recreational activity that are not also worn 437.36 for general use; 438.1 (2) articles designed primarily to provide safety or 438.2 protection against injury while the user is engaged in 438.3 industrial or general job activities; 438.4 (3) all articles commonly or commercially known as jewelry 438.5 including, but not limited to, watches; 438.6 (4) nonprescription optical glasses of any sort; 438.7 (5) articles made entirely of fur on the hide or pelt, or 438.8 partially of such fur if the value of the fur is more than three 438.9 times the value of the next most valuable component material; 438.10 (6) perfume, lotions, creams, dyes, or other substances 438.11 that are applied to the skin, nails, orthehair; and 438.12 (7) luggage, bags, purses, wallets, or cases of any sort. 438.13 Sec. 16. Minnesota Statutes 2000, section 297A.67, 438.14 subdivision 23, is amended to read: 438.15 Subd. 23. [OCCASIONAL SALES.] Isolated and occasional 438.16 sales in Minnesota not made in the normal course of business,438.17andof selling that kind of property or service are exempt. The 438.18 storage, use, or consumption of property or servicesresulting438.19from such sales, areacquired as a result of such a sale is 438.20 exempt. This exemption does not apply to sales of tangible 438.21 personal property primarily used in a trade or business. 438.22 Sec. 17. Minnesota Statutes 2000, section 297A.67, 438.23 subdivision 24, is amended to read: 438.24 Subd. 24. [CONSTITUTIONAL PROHIBITIONS.]The gross438.25receipts fromThe sale of and the storage, use, orother438.26 consumption in Minnesota of tangible personal property,tickets,438.27or admissions, electricity, gas, or local exchange telephone438.28serviceor services, that the state of Minnesota is prohibited 438.29 from taxing under the Constitution or laws of the United States 438.30 or under the Constitution of Minnesota, are exempt. 438.31 Sec. 18. Minnesota Statutes 2000, section 297A.67, 438.32 subdivision 25, is amended to read: 438.33 Subd. 25. [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and 438.34 related services used in the maintenance of cemetery grounds are 438.35 exempt. For purposes of this subdivision, "lawn care and 438.36 related services" means the services listed in section 297A.61, 439.1 subdivision163, paragraph (g), clause (6), item (vi), and 439.2 "cemetery" means a cemetery for human burial. 439.3 Sec. 19. Minnesota Statutes 2000, section 297A.68, 439.4 subdivision 2, is amended to read: 439.5 Subd. 2. [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.] 439.6 (a) Materials stored, used, or consumed in industrial production 439.7 of personal property intended to be sold ultimately at retail 439.8 are exempt, whether or not the item so used becomes an 439.9 ingredient or constituent part of the property produced. 439.10 Materials that qualify for this exemption include, but are not 439.11 limited to, the following: 439.12 (1) chemicals, including chemicals used for cleaning food 439.13 processing machinery and equipment; 439.14 (2) materials, including chemicals, fuels, and electricity 439.15 purchased by persons engaged in industrial production to treat 439.16 waste generated as a result of the production process; 439.17 (3) fuels, electricity, gas, and steam used or consumed in 439.18 the production process, except that electricity, gas, or steam 439.19 used for space heating, cooling, or lighting is exemptonlyif 439.20 (i) it is in excess of the average climate control or lighting 439.21 for the production area, and (ii) it is necessary to produce 439.22 that particularindustrialproduct; 439.23 (4) petroleum products and lubricants; 439.24 (5) packaging materials, including returnable containers 439.25 used in packaging food and beverage products; 439.26 (6) accessory tools, equipment, and other items that are 439.27 separate detachable units with an ordinary useful life of less 439.28 than 12 months used in producing a direct effect upon the 439.29 product; and 439.30 (7) the following materials, tools, and equipment used in 439.31 metalcasting: crucibles, thermocouple protection sheaths and 439.32 tubes, stalk tubes, refractory materials, molten metal filters 439.33 and filter boxes, degassing lances, and base blocks. 439.34 (b) This exemption does not include: 439.35 (1) machinery, equipment, implements, tools, accessories, 439.36 appliances, contrivances and furniture and fixtures, except 440.1 those listed in paragraph (a), clause (6); and 440.2 (2) petroleum and special fuels used in producing or 440.3 generating power for propelling ready-mixed concrete trucks on 440.4 the public highways of this state. 440.5 (c) Industrial production includes, but is not limited to, 440.6 research, development, design or production of any tangible 440.7 personal property, manufacturing, processing (other than by 440.8 restaurants and consumers) of agricultural products (whether 440.9 vegetable or animal), commercial fishing, refining, smelting, 440.10 reducing, brewing, distilling, printing, mining, quarrying, 440.11 lumbering, generating electricity and the production of road 440.12 building materials. Industrial production does not include 440.13 painting, cleaning, repairing or similar processing of property 440.14 except as part of the original manufacturing process. 440.15 Sec. 20. Minnesota Statutes 2000, section 297A.68, 440.16 subdivision 3, is amended to read: 440.17 Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 440.18 SERVICES.] (a) Materials stored, used, or consumed in providing 440.19 a taxable service listed in section 297A.61, subdivision163, 440.20 paragraph (g), clause (6), intended to be sold ultimately at 440.21 retail are exempt. 440.22 (b) This exemption includes, but is not limited to: 440.23 (1) chemicals, lubricants, packaging materials, seeds, 440.24 trees, fertilizers, and herbicides, if these items are used or 440.25 consumed in providing the taxable service; 440.26 (2) chemicals used to treat waste generated as a result of 440.27 providing the taxable service; 440.28 (3) accessory tools, equipment, and other items that are 440.29 separate detachable units used in providing the service and that 440.30 have an ordinary useful life of less than 12 months; and 440.31 (4) fuel, electricity, gas, and steam used or consumed in 440.32 the production process, except that electricity, gas, or steam 440.33 used for space heating, cooling, or lighting is exemptonlyif 440.34 (i) it is in excess of average climate control or lighting, and 440.35 (ii) it is necessary to produce that particulartaxableservice. 440.36 (c) This exemption does not include machinery, equipment, 441.1 implements, tools, accessories, appliances, contrivances, 441.2 furniture, and fixtures used in providing the taxable service. 441.3 Sec. 21. Minnesota Statutes 2000, section 297A.68, 441.4 subdivision 5, is amended to read: 441.5 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 441.6 exempt. The tax must be imposed and collected as if the rate 441.7 under section 297A.62, subdivision 1, applied, and then refunded 441.8 in the manner provided in section 297A.75. 441.9 "Capital equipment" means machinery and equipment purchased 441.10 or leased, and used in this state by the purchaser or lessee 441.11 primarily for manufacturing, fabricating, mining, or refining 441.12 tangible personal property to be sold ultimately at retail.441.13Capital equipment meansif the machinery and equipment is 441.14 essential to the integrated production process of manufacturing, 441.15 fabricating, mining, or refining. Capital equipment also 441.16 includes machinery and equipment used to electronically transmit 441.17 results retrieved by a customer of an online computerized data 441.18 retrieval system. 441.19 (b) Capital equipment includes, but is not limited to: 441.20 (1) machinery and equipment used to operate, control, or 441.21 regulate the production equipment; 441.22 (2) machinery and equipment used for research and 441.23 development, design, quality control, and testing activities; 441.24 (3) environmental control devices that are used to maintain 441.25 conditions such as temperature, humidity, light, or air pressure 441.26 when those conditions are essential to and are part of the 441.27 production process; 441.28 (4) materials and supplies used to construct and install 441.29 machinery or equipment; 441.30 (5) repair and replacement parts, including accessories, 441.31 whether purchased as spare parts, repair parts, or as upgrades 441.32 or modifications to machinery or equipment; 441.33 (6) materials used for foundations that support machinery 441.34 or equipment; 441.35 (7) materials used to construct and install special purpose 441.36 buildings used in the production process; and 442.1 (8) ready-mixed concrete trucks in which the ready-mixed 442.2 concrete is mixed as part of the delivery process. 442.3 (c) Capital equipment does not include the following: 442.4 (1) motor vehicles taxed under chapter 297B; 442.5 (2) machinery or equipment used to receive or store raw 442.6 materials; 442.7 (3) building materials, except for materials included in 442.8 paragraph (b), clauses (6) and (7); 442.9 (4) machinery or equipment used for nonproduction purposes, 442.10 including, but not limited to, the following: plant security, 442.11 fire prevention, first aid, and hospital stations; support 442.12 operations or administration; pollution control; and plant 442.13 cleaning, disposal of scrap and waste, plant communications, 442.14 space heating, cooling, lighting, or safety; 442.15 (5) farm machinery and aquaculture production equipment as 442.16 defined by section 297A.61, subdivisions 12 and 13; 442.17 (6) machinery or equipment purchased and installed by a 442.18 contractor as part of an improvement to real property; or 442.19 (7) any other item that is not essential to the integrated 442.20 process of manufacturing, fabricating, mining, or refining. 442.21 (d) For purposes of this subdivision: 442.22 (1) "Machinery" means mechanical, electronic, or electrical 442.23 devices, including computers and computer software, that are 442.24 purchased or constructed to be used for the activities set forth 442.25 in paragraph (a), beginning with the removal of raw materials 442.26 from inventory through completion of the product, including 442.27 packaging of the product. 442.28 (2) "Equipment" means independent devices or tools separate 442.29 from machinery but essential to an integrated production 442.30 process, including computers and computer software, used in 442.31 operating, controlling, or regulating machinery and equipment; 442.32 and any subunit or assembly comprising a component of any 442.33 machinery or accessory or attachment parts of machinery, such as 442.34 tools, dies, jigs, patterns, and molds. 442.35 (3) "Primarily" means machinery and equipment used 50 442.36 percent or more of the time in an activity described in 443.1 paragraph (a). 443.2 (4) "Manufacturing" means an operation or series of 443.3 operations where raw materials are changed in form, composition, 443.4 or condition by machinery and equipment and which results in the 443.5 production of a new article of tangible personal property. For 443.6 purposes of this subdivision, "manufacturing" includes the 443.7 generation of electricity or steam to be sold at retail. 443.8 (5) "Fabricating" means to make, build, create, produce, or 443.9 assemble components or property to work in a new or different 443.10 manner. 443.11 (6) "Mining" means the extraction of minerals, ores, stone, 443.12 or peat. 443.13 (7) "Refining" means the process of converting a natural 443.14 resource to a product, including the treatment of water to be 443.15 sold at retail. 443.16 (8)"Integrated production process" means a process443.17beginning with the removal of raw materials from inventory443.18through the completion of the product, including packaging of443.19the product.443.20(9)"Online data retrieval system" means a system whose 443.21 cumulation of information is equally available and accessible to 443.22 all its customers. 443.23(10)(9) "Machinery and equipment used for pollution 443.24 control" means machinery and equipment used solely to eliminate, 443.25 prevent, or reduce pollution resulting from an activity 443.26 described in paragraph (a). 443.27 Sec. 22. Minnesota Statutes 2000, section 297A.68, 443.28 subdivision 11, is amended to read: 443.29 Subd. 11. [ADVERTISING MATERIALS.]MaterialMaterials 443.30 designed to advertise and promote the sale of merchandise or 443.31 servicesisare exempt ifthe material is purchased and stored443.32for the purpose of subsequently shipping or otherwise443.33transferring outside the state by the purchaser for laterthese 443.34 materials are mailed or transferred to a person outside the 443.35 state for use solely outside the stateof Minnesota. Mailing 443.36 and reply envelopes and cards used exclusively in connection 444.1 with these advertising and promotional materials are included in 444.2 this exemption. The exemption applies regardless of where the 444.3 mailing occurs. The storage of these materials in the state for 444.4 the purpose of subsequently shipping or otherwise transferring 444.5 the material out of state is also exempt if the other conditions 444.6 in this subdivision are met. 444.7 Sec. 23. Minnesota Statutes 2000, section 297A.68, 444.8 subdivision 13, is amended to read: 444.9 Subd. 13. [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible 444.10 personal property is exempt ifthe property, without444.11intermediate use, isall of the following conditions are met: 444.12 (1) the property, without intermediate use, is shipped or 444.13 transported outside Minnesota by the purchaser or is stored, 444.14 processed, fabricated or manufactured into, attached to or 444.15 incorporated into other tangible personal property that is 444.16 transported or shipped outside Minnesota; and 444.17 (2) the property is used in a trade or business outside 444.18 Minnesota after being shipped or transported outside of 444.19 Minnesota, and is not returned to Minnesota, except in the 444.20 course of interstate commerce; and 444.21 (3) the property is either (i) not subject to tax in the 444.22 state or country to which it is transported for storage or use, 444.23 or (ii) to be used in other states or countries as part of a 444.24 maintenance contract. 444.25 (b) For purposes of this subdivision, storage or 444.26 processing, fabricating, manufacturing, attaching to, or 444.27 incorporating into other property is not intermediate use. 444.28 Sec. 24. Minnesota Statutes 2000, section 297A.68, 444.29 subdivision 14, is amended to read: 444.30 Subd. 14. [TEMPORARY STORAGEPROPERTY IN TRANSIT.] 444.31 Tangible personal property is exempt if all of the following 444.32 conditions are met: 444.33 (1) it is shipped or brought into Minnesota by acommon444.34 for-hire carrier; 444.35 (2) withoutintermediateuse, it is kept in a public 444.36 warehouse; 445.1 (3) it is kept for the purpose of being later transported 445.2 outside Minnesota; and 445.3 (4) after storage, it is used solely outside Minnesota, 445.4 except in the course of interstate commerce. 445.5 Sec. 25. Minnesota Statutes 2000, section 297A.68, 445.6 subdivision 18, is amended to read: 445.7 Subd. 18. [CUSTOM COMPUTER SOFTWARE.] The design, 445.8 development, writing, translation, fabrication, lease, or 445.9 transfer for a consideration of title or possession of a custom 445.10 computer program is exempt. "Custom computer program" means a 445.11 computer program prepared to the special order of the customer, 445.12 either in the form of written procedures orin the form of445.13storage media on which, or in which, the program is445.14recordedcontained on tapes, discs, cards, or another device, or 445.15 any required documentation or manuals designed to facilitate the 445.16 use of the custom computer program transferred. It includes 445.17 those services represented by separately stated charges for 445.18 modifications to an existing prewritten program that are 445.19 prepared to the special order of the customer. It does not 445.20 include a "canned" or prewritten computer program that is held 445.21 or existing for general or repeated sale or lease, even if the 445.22 prewritten or "canned" program was initially developed on a 445.23 custom basis or for in-house use. Modification to an existing 445.24 prewritten program to meet the customer's needs is custom 445.25 computer programming only to the extent of the modification. 445.26 Sec. 26. Minnesota Statutes 2000, section 297A.68, 445.27 subdivision 25, is amended to read: 445.28 Subd. 25. [OCCASIONAL SALESSALE OF PROPERTY USED IN A 445.29 TRADE OR BUSINESS.] (a)Isolated or occasional sales ofThe sale 445.30 of tangible personal propertyin Minnesotaprimarily used in a 445.31 trade or business is exempt if the sale is not made in the 445.32 normal course of business of selling that kind of propertyare445.33exempt. The storage, use, or consumption of property acquired445.34as a result of such a sale is exempt.445.35(b) This exemption applies to a sale of tangible personal445.36property primarily used in a trade or business onlyand if one 446.1 of the following conditions is satisfied: 446.2 (1) the sale occurs in a transaction subject to or 446.3 described in section 118, 331, 332, 336, 337, 338, 351, 355, 446.4 368, 721, 731, 1031, or 1033 of the Internal Revenue Code; 446.5 (2) the sale is between members of a controlled group as 446.6 defined in section 1563(a) of the Internal Revenue Code; 446.7 (3) the sale is a sale of farm machinery; 446.8 (4) the sale is a farm auction sale; 446.9 (5) the sale is a sale of substantially all of the assets 446.10 of a trade or business; or 446.11 (6) the total amount of gross receipts from the sale of 446.12 trade or business property made during the calendar month of the 446.13 sale and the preceding 11 calendar months does not exceed $1,000. 446.14 The use, storage, distribution, or consumption of tangible 446.15 personal property acquired as a result of a sale exempt under 446.16 this subdivision is also exempt. 446.17(c)(b) For purposes of this subdivision, the following 446.18 terms have the meanings given. 446.19 (1) A "farm auction" is a public auction conducted by a 446.20 licensed auctioneer if substantially all of the property sold 446.21 consists of property used in the trade or business of farming 446.22 and property not used primarily in a trade or business. 446.23 (2) "Trade or business" includes the assets of a separate 446.24 division, branch, or identifiable segment of a trade or business 446.25 if, before the sale, the income and expenses attributable to the 446.26 separate division, branch, or identifiable segment could be 446.27 separately ascertained from the books of account or record (the 446.28 lease or rental of an identifiable segment does not qualify for 446.29 the exemption). 446.30 (3) A "sale of substantially all of the assets of a trade 446.31 or business" must occur as a single transaction or a series of 446.32 related transactions within the 12-month period beginning on the 446.33 date of the first sale of assets intended to qualify for the 446.34 exemption provided in paragraph(b)(a), clause (5). 446.35 Sec. 27. Minnesota Statutes 2000, section 297A.69, 446.36 subdivision 2, is amended to read: 447.1 Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 447.2 (a) Materials stored, used, or consumed in agricultural 447.3 production of personal property intended to be sold ultimately 447.4 at retail are exempt, whether or not the item becomes an 447.5 ingredient or constituent part of the property produced. 447.6 Materials that qualify for this exemption include, but are not 447.7 limited to, the following: 447.8 (1) feeds, seeds, trees, fertilizers, and herbicides, 447.9 including when purchased for use by farmers in a federal or 447.10 state farm or conservation program; 447.11 (2) materials sold to a veterinarian to be used or consumed 447.12 in the care, medication, and treatment of agricultural 447.13 production animals and horses; 447.14 (3) chemicals, including chemicals used for cleaning food 447.15 processing machinery and equipment; 447.16 (4) materials, including chemicals, fuels, and electricity 447.17 purchased by persons engaged in agricultural production to treat 447.18 waste generated as a result of the production process; 447.19 (5) fuels, electricity, gas, and steam used or consumed in 447.20 the production process, except that electricity, gas, or steam 447.21 used for space heating, cooling, or lighting is exemptonlyif 447.22 (i) it is in excess of the average climate control or lighting 447.23 for the production area, and (ii) it is necessary to produce 447.24 that particularagriculturalproduct; 447.25 (6) petroleum products and lubricants; 447.26 (7) packaging materials, including returnable containers 447.27 used in packaging food and beverage products; and 447.28 (8) accessory tools and equipment that are separate 447.29 detachable units with an ordinary useful life of less than 12 447.30 months used in producing a direct effect upon the product. 447.31 Machinery, equipment, implements, tools, accessories, 447.32 appliances, contrivances, and furniture and fixtures, except 447.33 those listed in this clause are not included within this 447.34 exemption. 447.35 (b) For purposes of this subdivision, "agricultural 447.36 production" includes, but is not limited to, horticulture, 448.1 floriculture, maple syrup harvesting, and the raising of pets, 448.2 fur-bearing animals, research animals, horses, farmed cervidae 448.3 as defined in section 17.451, subdivision 2, llamas as defined 448.4 in section 17.455, subdivision 2, and ratitae as defined in 448.5 section 17.453, subdivision 3. 448.6 Sec. 28. Minnesota Statutes 2000, section 297A.70, 448.7 subdivision 1, is amended to read: 448.8 Subdivision 1. [SCOPE.] (a) To the extent provided in this 448.9 section, the gross receipts from sales of items to or by, and 448.10 storage, distribution, use, or consumption of items by the 448.11 organizations listed in this section are specifically exempted 448.12 from the taxes imposed by this chapter. 448.13 (b) Notwithstanding any law to the contrary enacted before 448.14 1992, only sales to governments and political subdivisions 448.15 listed in this section are exempt from the taxes imposed by this 448.16 chapter. 448.17 (c) "Sales" includes purchases under an installment 448.18 contract or lease purchase agreement under section 465.71. 448.19 Sec. 29. Minnesota Statutes 2000, section 297A.70, 448.20 subdivision 2, is amended to read: 448.21 Subd. 2. [SALES TO GOVERNMENT.] (a) All sales, except 448.22 those listed in paragraph (b), to the following governments and 448.23 political subdivisions, or to the listed agencies or 448.24 instrumentalities of governments and political subdivisions, are 448.25 exempt: 448.26 (1) the United States and its agencies and 448.27 instrumentalities; 448.28 (2) school districts, the University of Minnesota, state 448.29 universities, community colleges, technical colleges, state 448.30 academies, the Perpich Minnesota center for arts education, and 448.31 an instrumentality of a political subdivision that is accredited 448.32 as an optional/special function school by the North Central 448.33 Association of Colleges and Schools; 448.34 (3) hospitals and nursing homes owned and operated by 448.35 political subdivisions of the state; 448.36 (4) other states or political subdivisions of other states, 449.1 if the sale would be exempt from taxation if it occurred in that 449.2 state; and 449.3 (5) sales to public libraries, public library systems, 449.4 multicounty, multitype library systems as defined in section 449.5 134.001, county law libraries under chapter 134A, state agency 449.6 libraries, the state library under section 480.09, and the 449.7 legislative reference library. 449.8 (b) This exemption does not apply to the sales of the 449.9 following products and services: 449.10 (1) building, construction, or reconstruction materials 449.11 purchased by a contractor or a subcontractor as a part of a 449.12 lump-sum contract or similar type of contract with a guaranteed 449.13 maximum price covering both labor and materials for use in the 449.14 construction, alteration, or repair of a building or facility; 449.15 (2) construction materials purchased by tax exempt entities 449.16 or their contractors to be used in constructing buildings or 449.17 facilities which will not be used principally by the tax exempt 449.18 entities; 449.19 (3) the leasing of a motor vehicle as defined in section 449.20 297B.01, subdivision 5, except for leases entered into by the 449.21 United States or its agencies or instrumentalities; or 449.22 (4) meals and lodging as defined under section 297A.61, 449.23subdivisionssubdivision 3,paragraphparagraphs (d),and16449.24 (g),paragraph (c)clause (2), except for meals and lodging 449.25 purchased directly by the United States or its agencies or 449.26 instrumentalities. 449.27 (c) As used in this subdivision, "school districts" means 449.28 public school entities and districts of every kind and nature 449.29 organized under the laws of the state of Minnesota, and any 449.30 instrumentality of a school district, as defined in section 449.31 471.59. 449.32 Sec. 30. Minnesota Statutes 2000, section 297A.70, 449.33 subdivision 4, is amended to read: 449.34 Subd. 4. [SALES TO NONPROFIT GROUPS.] (a) All sales, 449.35 except those listed in paragraph (b), to the following 449.36 "nonprofit organizations" are exempt: 450.1 (1)an entitya corporation, society, association, 450.2 foundation, or institution organized and operated exclusively 450.3 for charitable, religious, or educational purposes if the item 450.4 purchased is used in the performance of charitable, religious, 450.5 or educational functions; and 450.6 (2) any senior citizen group or association of groups that: 450.7 (i) in general limits membership to persons who are either 450.8 age 55 or older, or physically disabled; and 450.9 (ii) is organized and operated exclusively for pleasure, 450.10 recreation, and other nonprofit purposes, no part of the net 450.11 earnings of which inures to the benefit of any private 450.12 shareholders; and. 450.13(3) an entity organized and operated exclusively to450.14maintain450.15 For purposes of this subdivision, charitable purpose includes 450.16 the maintenance of a cemetery owned by a religious organization. 450.17 (b) This exemption does not apply to the following sales: 450.18 (1) building, construction, or reconstruction materials 450.19 purchased by a contractor or a subcontractor as a part of a 450.20 lump-sum contract or similar type of contract with a guaranteed 450.21 maximum price covering both labor and materials for use in the 450.22 construction, alteration, or repair of a building or facility; 450.23 (2) construction materials purchased by tax-exempt entities 450.24 or their contractors to be used in constructing buildings or 450.25 facilities that will not be used principally by the tax-exempt 450.26 entities; and 450.27 (3) meals and lodging as defined under section 297A.61, 450.28subdivisionssubdivision 3,paragraphparagraphs (d),and 450.2916(g),paragraph (c)clause (2); and 450.30 (4) leasing of a motor vehicle as defined in section 450.31 297B.01, subdivision 5, except as provided in paragraph (c). 450.32 (c) This exemption applies to the leasing of a motor 450.33 vehicle as defined in section 297B.01, subdivision 5, only if 450.34 the vehicle is: 450.35 (1) a truck, as defined in section 168.011, a bus, as 450.36 defined in section 168.011, or a passenger automobile, as 451.1 defined in section 168.011, if the automobile is designed and 451.2 used for carrying more than nine persons including the driver; 451.3 and 451.4 (2) intended to be used primarily to transport tangible 451.5 personal property or individuals, other than employees, to whom 451.6 the organization provides service in performing its charitable, 451.7 religious, or educational purpose. 451.8 Sec. 31. Minnesota Statutes 2000, section 297A.70, 451.9 subdivision 7, is amended to read: 451.10 Subd. 7. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 451.11 Sales, except for those listed in paragraph (c), to a hospital 451.12 are exempt, if the items purchased are used in providing 451.13 hospital services. For purposes of this subdivision, "hospital" 451.14 means a hospital organized and operated for charitable purposes 451.15 within the meaning of section 501(c)(3) of the Internal Revenue 451.16 Code, and licensed under chapter 144 or by any other 451.17 jurisdiction, and "hospital services" are services authorized or 451.18 required to be performed by a "hospital" under chapter 144. 451.19 (b) Sales, except for those listed in paragraph (c), to an 451.20 outpatient surgical center are exempt, if the items purchased 451.21 are used in providing outpatient surgical services. For 451.22 purposes of this subdivision, "outpatient surgical center" means 451.23 an outpatient surgical center organized and operated for 451.24 charitable purposes within the meaning of section 501(c)(3) of 451.25 the Internal Revenue Code, and licensed under chapter 144 or by 451.26 any other jurisdiction. For the purposes of this subdivision, 451.27 "outpatient surgical services" means: (1) services authorized 451.28 or required to be performed by an outpatient surgical center 451.29 under chapter 144or under the applicable licensure law of any451.30other jurisdiction; and (2) urgent care. For purposes of this 451.31 subdivision, "urgent care" means health services furnished to a 451.32 person whose medical condition is sufficiently acute to require 451.33 treatment unavailable through, or inappropriate to be provided 451.34 by, a clinic or physician's office, but not so acute as to 451.35 require treatment in a hospital emergency room. 451.36 (c) This exemption does not apply to the following products 452.1 and services: 452.2 (1) purchases made by a clinic, physician's office, or any 452.3 other medical facility not operating as a hospital or outpatient 452.4 surgical center, even though the clinic, office, or facility may 452.5 be owned and operated by a hospital or outpatient surgical 452.6 center; 452.7 (2) sales under section 297A.61, subdivisions 3, paragraph 452.8 (d), and 16, paragraph (c); 452.9 (3) building and construction materials used in 452.10 constructing buildings or facilities that will not be used 452.11 principally by the hospital or outpatient surgical center; 452.12 (4) building, construction, or reconstruction materials 452.13 purchased by a contractor or a subcontractor as a part of a 452.14 lump-sum contract or similar type of contract with a guaranteed 452.15 maximum price covering both labor and materials for use in the 452.16 construction, alteration, or repair of a hospital or outpatient 452.17 surgical center; or 452.18 (5) the leasing of a motor vehicle as defined in section 452.19 297B.01, subdivision 5. 452.20 Sec. 32. Minnesota Statutes 2000, section 297A.70, 452.21 subdivision 8, is amended to read: 452.22 Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 452.23 SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 452.24 but not limited to, end user equipment used for construction, 452.25 ownership, operation, maintenance, and enhancement of the 452.26 backbone system of the regionwide public safety radio 452.27 communication system established under sections 473.891 to 452.28 473.905, are exempt. For purposes of this subdivision, backbone 452.29 system is defined in section 473.891, subdivision 9. This 452.30 subdivision is effective for purchases, sales, storage, use, or 452.31 consumption occurring before August 1, 2003, in the counties of 452.32 Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 452.33 Sec. 33. Minnesota Statutes 2000, section 297A.70, 452.34 subdivision 10, is amended to read: 452.35 Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] Tickets or 452.36 admissions to the premises of or events sponsored by an 453.1 organization that provides an opportunity for citizens of the 453.2 state to participate in the creation, performance, or 453.3 appreciation of the arts are exempt if the organization is 453.4 either: 453.5 (1)a tax-exempt organization within the meaning of453.6Minnesota Statutes 1980, section 290.05, subdivision 1, clause453.7(i),a corporation, fund, foundation, trust, or association if 453.8 (i) it is organized for exclusively scientific, literary, 453.9 religious, charitable, educational, or artistic purposes, or for 453.10 the purpose of making contributions to or for the use of the 453.11 United States of America, the state of Minnesota or any of its 453.12 political subdivisions for exclusively public purposes, or for 453.13 any combination of the purposes listed in this clause, and (ii) 453.14 no part of the net income of the corporation, fund, foundation, 453.15 trust, or association inures to the benefit of any private 453.16 member, stockholder, or individual; or 453.17 (2) a municipal board that promotes cultural and arts 453.18 activities. 453.19 The exemption providedwith respectto a municipal board applies 453.20 only to tickets and admissions to events sponsored by the board. 453.21 Sec. 34. Minnesota Statutes 2000, section 297A.70, 453.22 subdivision 13, is amended to read: 453.23 Subd. 13. [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 453.24 (a) The following sales by the specified organizations for 453.25 fundraising purposes are exempt, subject to the limitations 453.26 listed in paragraph (b): 453.27 (1) all sales made by an organization that exists solely 453.28 for the purpose of providing educational or social activities 453.29 for young people primarily age 18 and under; 453.30 (2) all sales made by an organization that is a senior 453.31 citizen group or association of groups if (i) in general it 453.32 limits membership to persons age 55 or older; (ii) it is 453.33 organized and operated exclusively for pleasure, recreation, and 453.34 other nonprofit purposes; and (iii) no part of its net earnings 453.35 inures to the benefit of any private shareholders; 453.36 (3) the sale or use of tickets or admissions to a golf 454.1 tournament held in Minnesota if the beneficiary of the 454.2 tournament's net proceeds qualifies as a tax-exempt organization 454.3 under section 501(c)(3) of the Internal Revenue Code; and 454.4 (4) sales of gum, candy, and candy products sold for 454.5 fundraising purposes by a nonprofit organization that provides 454.6 educational and social activities primarily for young people age 454.7 18years of ageand under. 454.8 (b) The exemptions listed in paragraph (a) are limited in 454.9 the following manner: 454.10 (1) the exemption under paragraph (a), clauses (1) and (2), 454.11 applies only if the gross annual receipts of the organization 454.12 from fundraising do not exceed $10,000; and 454.13 (2) the exemption under paragraph (a), clause (1), does not 454.14 apply if the sales are derived from admission charges or from 454.15 activities for which the money must be deposited with the school 454.16 district treasurer under section 123B.49, subdivision 2, or be 454.17 recorded in the same manner as other revenues or expenditures of 454.18 the school district under section 123B.49, subdivision 4. 454.19 (c) For purposes of this subdivision, a club, association, 454.20 or other organization of elementary or secondary school students 454.21 organized for the purpose of carrying on sports, educational, or 454.22 other extracurricular activities is a separate organization from 454.23 the school district or school for purposes of applying the 454.24 $10,000 limit. 454.25 Sec. 35. Minnesota Statutes 2000, section 297A.70, 454.26 subdivision 14, is amended to read: 454.27 Subd. 14. [FUNDRAISING EVENTS SPONSORED BY NONPROFIT 454.28 GROUPS.] (a) Sales of tangible personal property at, and 454.29 admission charges for fundraising events sponsored by, a 454.30 nonprofit organization are exempt if the entire proceeds, less 454.31 the necessary expenses for the event, will be used solely and 454.32 exclusively for charitable, religious, or educational purposes. 454.33 Exempt sales include the sale of food, meals, and drinks, and454.34taxable servicesat the fundraising event. 454.35 (b) This exemption is limited in the following manner: 454.36 (1) it does not apply to admission charges for events 455.1 involving bingo or other gambling activities or to charges for 455.2 use of amusement devices involving bingo or other gambling 455.3 activities; 455.4 (2) all gross receipts are taxable if the profits are not 455.5 used solely and exclusively for charitable, religious, or 455.6 educational purposes; 455.7 (3) it does not apply unless the organization keeps a 455.8 separate accounting record, including receipts and disbursements 455.9 from each fundraising event that documents all deductions from 455.10 gross receipts with receipts and other records; 455.11 (4) it does not apply to any sale made by or in the name of 455.12 a nonprofit corporation as the active or passive agent of a 455.13 person that is not a nonprofit corporation; 455.14 (5) all gross receipts are taxable if fundraising events 455.15 exceed 24 days per year; and 455.16 (6) it does not apply to fundraising events conducted on 455.17 premises leased for more than five days but less than 30 days. 455.18 (c) For purposes of this subdivision, a "nonprofit 455.19 organization" means any unit of government, corporation, 455.20 society, association, foundation, or institution organized and 455.21 operated for charitable, religious, educational, civic, 455.22 fraternal, and senior citizens' or veterans' purposes, no part 455.23 of the net earnings of which inures to the benefit of a private 455.24 individual. 455.25 Sec. 36. Minnesota Statutes 2000, section 297A.75, is 455.26 amended to read: 455.27 297A.75 [REFUND; APPROPRIATION.] 455.28 Subdivision 1. [TAX COLLECTED.] The tax on the gross 455.29 receipts from the sale of the following exempt items must be 455.30 imposed and collected as if the sale were taxable and the rate 455.31 under section 297A.62, subdivision 1, applied. The exempt items 455.32 include: 455.33 (1) capital equipment exempt under section 297A.68, 455.34 subdivision 5; 455.35 (2) building materials for an agricultural processing 455.36 facility exempt under section 297A.71, subdivision 13; 456.1 (3) building materials for mineral production facilities 456.2 exempt under section 297A.71, subdivision 14; 456.3 (4) building materials for correctional facilities under 456.4 section 297A.71, subdivision 3; 456.5 (5) building materials used in a residence for disabled 456.6 veterans exempt under section 297A.71, subdivision 11;and456.7 (6) chair lifts, ramps, elevators, and associated building 456.8 materials exempt under section 297A.71, subdivision 12; and 456.9 (7) building materials for the Long Lake Conservation 456.10 Center exempt under section 297A.71, subdivision 17. 456.11 Subd. 2. [REFUND; ELIGIBLE PERSONS.] Upon application on 456.12 forms prescribed by the commissioner, a refund equal to the tax 456.13 paid on the gross receipts of the exempt items must be paid to 456.14 the applicant. Only the following persons may apply for the 456.15 refund: 456.16 (1) for subdivision 1, clauses (1) to (3), the applicant 456.17 must be the purchaser; 456.18 (2) for subdivision 1,clauseclauses (4) and (7), the 456.19 applicant must be the governmental subdivision; 456.20 (3) for subdivision 1, clause (5), the applicant must be 456.21 the recipient of the benefits provided in United States Code, 456.22 title 38, chapter 21; and 456.23 (4) for subdivision 1, clause (6), the applicant must be 456.24 the owner of the homestead property. 456.25 Subd. 3. [APPLICATION.] (a) The application must include 456.26 sufficient information to permit the commissioner to verify the 456.27 tax paid. If the tax was paid by a contractor, subcontractor, 456.28 or builder, under subdivision 1, clause (4), (5),or(6), or 456.29 (7), the contractor, subcontractor, or builder must furnish to 456.30 the refund applicant a statement including the cost of the 456.31 exempt items and the taxes paid on the items unless otherwise 456.32 specifically provided by this subdivision. The provisions of 456.33 sections 289A.40 and 289A.50 apply to refunds under this section. 456.34 (b) An applicant may not file more than two applications 456.35 per calendar year for refunds for taxes paid on capital 456.36 equipment exempt under section 297A.68, subdivision 5. 457.1 Subd. 4. [INTEREST.] Interest must be paid on the refund 457.2 at the rate in section 270.76 from the date the refund claim is 457.3 filed for taxes paid under subdivision 1, clauses (1) to (3), 457.4 and (5), and from 60 days after the date the refund claim is 457.5 filed with the commissioner for claims filed under subdivision 457.6 1, clauses (4)and, (6), and (7). 457.7 Subd. 5. [APPROPRIATION.] The amount required to make the 457.8 refunds is annually appropriated to the commissioner. 457.9 Sec. 37. Minnesota Statutes 2000, section 297A.77, 457.10 subdivision 1, is amended to read: 457.11 Subdivision 1. [COLLECTION OF TAX AT TIME OF SALE.] The 457.12 tax must be stated and charged separately from the sales 457.13 priceor charge for serviceinsofar as practicable and must be 457.14 collected by the seller from the purchaser. 457.15 Sec. 38. Minnesota Statutes 2000, section 297A.80, is 457.16 amended to read: 457.17 297A.80 [TAXES IN OTHER STATES;OFFSET AGAINSTUSE 457.18 TAX CREDIT.] 457.19 Subdivision 1. [MULTISTATE TAX COMPACT STATES.] If an 457.20 article of tangible personal property or an item listed in 457.21 section 297A.63 has already been taxed for its sale, 457.22 distribution, storage, use, or other consumption by another 457.23 state, or a subdivision of another state, that is a member of 457.24 the multistate tax compact, a tax credit is allowed to the 457.25 person who paid the tax in the other state or subdivision of the 457.26 other state under the provisions of section 290.171, article V. 457.27 Subd. 2. [OTHER STATES; GENERALLY.] If an article of 457.28 tangible personal property or an item listed in section 297A.63 457.29 has already been taxedby another statefor its sale, 457.30 distribution, storage, use, or other consumptionin an amount457.31less than the tax imposed by this chapter, then as to the person457.32who paid the tax in the other state, section 297A.63 applies457.33only at a rate measured by the difference between the rate457.34imposed under section 297A.62 and the rate by which the previous457.35tax was computedby another state not included in subdivision 1, 457.36 a tax credit is allowed against the tax imposed in section 458.1 297A.63 to the person who paid the tax in the amount of tax paid 458.2 to the other state.If the tax imposed in the other state is458.3equal to or greater thanThe credit cannot exceed the tax 458.4 imposed in this state, then no tax is due from that personunder 458.5 section 297A.63. 458.6 Sec. 39. Minnesota Statutes 2000, section 297A.82, 458.7 subdivision 3, is amended to read: 458.8 Subd. 3. [PAYMENT OF TAX TO COMMISSIONER.] Ifthean 458.9 aircraft is purchased from a person who is not the holder of a 458.10 valid sales and use tax permit under this chapter, the purchaser 458.11 shall pay the tax to the commissioner of revenue prior to 458.12 registering or licensing the aircraft in this state. The 458.13 commissioner of revenue shall issue a certificate stating that 458.14 the sales and use tax in respect to the transaction has been 458.15 paid. 458.16 Sec. 40. Minnesota Statutes 2000, section 297A.89, 458.17 subdivision 1, is amended to read: 458.18 Subdivision 1. [COMMISSIONER MAY PERMIT.] The commissioner 458.19 may permit purchasers to pay taxes imposed by this chapter 458.20 directly to the commissioner. Any taxes paid by purchasers 458.21 under this section are considered use taxes, except for local458.22sales taxes when no corresponding local use tax is imposed. 458.23 Sec. 41. Minnesota Statutes 2000, section 297A.90, 458.24 subdivision 1, is amended to read: 458.25 Subdivision 1. [REGISTRATION; RECORDS.] (a) A person who 458.26 is engaged in interstate for-hire transportation of tangible 458.27 personal property or passengers by motor vehicle may, under 458.28 rules prescribed by the commissioner, register as a retailer and 458.29 pay the taxes imposed by this chapter in accordance with this 458.30 section. Any taxes paid under this section are use taxes,458.31except local sales taxes when no corresponding local use tax is458.32imposed. 458.33 (b) As used in this section, "person" means: 458.34 (1) one who possesses a certificate or permit or has 458.35 completed a registration process that authorizes for-hire 458.36 transportation of property or passengers from the United States 459.1 Department of Transportation, the transportation regulation 459.2 board, or the department of transportation; 459.3 (2) one who transports commodities defined as "exempt" in 459.4 for-hire transportation in interstate commerce; or 459.5 (3) one who transports tangible personal property in 459.6 interstate commerce, pursuant to contracts with persons 459.7 described in clause (1) or (2). 459.8 Persons qualifying under clause (2) or (3) must maintain on a 459.9 current basis the same type of mileage records that are required 459.10 by persons specified in clause (1) by the United States 459.11 Department of Transportation. 459.12 (c) Persons who in the course of their business are 459.13 transporting solely their own goods in interstate commerce may 459.14 also register as retailers under rules prescribed by the 459.15 commissioner and pay the taxes imposed by this chapter in 459.16 accordance with this section. 459.17 Sec. 42. Minnesota Statutes 2000, section 297A.91, 459.18 subdivision 1, is amended to read: 459.19 Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL 459.20 TRANSPORT.] (a) If the retailer does not have a sales or use tax 459.21 permit and has been engaging in transporting personal property 459.22 into the state without payment of the tax, the commissioner of 459.23 revenue or the commissioner's agents may seize in the name of 459.24 the state any truck, automobile, or means of transportation not 459.25 owned or operated by acommonfor-hire carrier, used in the 459.26 illegal importation and transportation of any tangible personal 459.27 property by a retailer or the retailer's agent or employee. The 459.28 commissioner may demand the forfeiture and sale of the truck, 459.29 automobile, or other means of transportation together with the 459.30 property being transported illegally, unless the owner 459.31 establishes to the satisfaction of the commissioner or the court 459.32 that the owner had no notice or knowledge or reason to believe 459.33 that the vehicle was used or intended to be used in any such 459.34 violation. 459.35 (b) Within two days after the seizure, the person making 459.36 the seizure shall deliver an inventory of the vehicle and 460.1 property seized to the person from whom the seizure was made, if 460.2 known, and to any person known or believed to have any right, 460.3 title, interest, or lien on the vehicle or property. The person 460.4 making the seizure shall also file a copy of the inventory with 460.5 the commissioner. 460.6 Sec. 43. Minnesota Statutes 2000, section 297A.92, 460.7 subdivision 2, is amended to read: 460.8 Subd. 2. [AUCTIONS OF SECURITY.] The commissioner may sell 460.9 property deposited as security at public auction if necessary to 460.10 recover the amount required to be collected, including any 460.11 interest and penalties. Notice of the sale must be served upon 460.12 the person who deposited the security. It must be served 460.13 personally, or by mail as prescribed forthe service of a notice460.14of a deficiencyan order of assessment under section 289A.37, 460.15 subdivision 5. After a sale any surplus above the amount due 460.16 not required as security under this section must be returned to 460.17 the person who deposited the security. 460.18 Sec. 44. Minnesota Statutes 2000, section 297A.94, is 460.19 amended to read: 460.20 297A.94 [DEPOSIT OF REVENUES.] 460.21 (a) Except as provided in this section, the commissioner 460.22 shall deposit the revenues, including interest and penalties, 460.23 derived from the taxes imposed by this chapter in the state 460.24 treasury and credit them to the general fund. 460.25 (b) The commissioner shall deposit taxes in the Minnesota 460.26 agricultural and economic account in the special revenue fund if: 460.27 (1) the taxes are derived from sales and use of property 460.28 and services purchased for the construction and operation of an 460.29 agricultural resource project; and 460.30 (2) the purchase was made on or after the date on which a 460.31 conditional commitment was made for a loan guaranty for the 460.32 project under section 41A.04, subdivision 3. 460.33 The commissioner of finance shall certify to the commissioner 460.34 the date on which the project received the conditional 460.35 commitment. The amount deposited in the loan guaranty account 460.36 must be reduced by any refunds and by the costs incurred by the 461.1 department of revenue to administer and enforce the assessment 461.2 and collection of the taxes. 461.3 (c) The commissioner shall deposit the revenues, including 461.4 interest and penalties, derived from the taxes imposed on sales 461.5 and purchases included in section 297A.61, subdivision16,461.6paragraphs (b) and (f)3, paragraph (g), clauses (1) and (5), in 461.7 the state treasury, and credit them as follows: 461.8 (1) first to the general obligation special tax bond debt 461.9 service account in each fiscal year the amount required by 461.10 section 16A.661, subdivision 3, paragraph (b); and 461.11 (2) after the requirements of clause (1) have been met, the 461.12 balance to the general fund. 461.13 (d) The commissioner shall deposit the revenues, including 461.14 interest and penalties, collected under section 297A.64, 461.15 subdivision 5, in the state treasury and credit them to the 461.16 general fund. By July 15 of each year the commissioner shall 461.17 transfer to the highway user tax distribution fund an amount 461.18 equal to the excess fees collected under section 297A.64, 461.19 subdivision 5, for the previous calendar year. 461.20 (e) For fiscal year 2001, 97 percent, and for fiscal year 461.21 2002 and thereafter, 87 percent of the revenues, including 461.22 interest and penalties, transmitted to the commissioner under 461.23 section 297A.65, must be deposited by the commissioner in the 461.24 state treasury as follows: 461.25 (1) 50 percent of the receipts must be deposited in the 461.26 heritage enhancement account in the game and fish fund, and may 461.27 be spent only on activities that improve, enhance, or protect 461.28 fish and wildlife resources, including conservation, 461.29 restoration, and enhancement of land, water, and other natural 461.30 resources of the state; 461.31 (2) 22.5 percent of the receipts must be deposited in the 461.32 natural resources fund, and may be spent only for state parks 461.33 and trails; 461.34 (3) 22.5 percent of the receipts must be deposited in the 461.35 natural resources fund, and may be spent only on metropolitan 461.36 park and trail grants; 462.1 (4) three percent of the receipts must be deposited in the 462.2 natural resources fund, and may be spent only on local trail 462.3 grants; and 462.4 (5) two percent of the receipts must be deposited in the 462.5 natural resources fund, and may be spent only for the Minnesota 462.6 zoological garden, the Como park zoo and conservatory, and the 462.7 Duluth zoo. 462.8 (f) The revenue dedicated under paragraph (e) may not be 462.9 used as a substitute for traditional sources of funding for the 462.10 purposes specified, but the dedicated revenue shall supplement 462.11 traditional sources of funding for those purposes. Land 462.12 acquired with money deposited in the game and fish fund under 462.13 paragraph (e) must be open to public hunting and fishing during 462.14 the open season. At least 87 percent of the money deposited in 462.15 the game and fish fund for improvement, enhancement, or 462.16 protection of fish and wildlife resources under paragraph (e) 462.17 must be allocated for field operations. 462.18 Sec. 45. Minnesota Statutes 2000, section 297A.99, 462.19 subdivision 7, is amended to read: 462.20 Subd. 7. [EXEMPTIONS.] (a) All goods or services that are 462.21 otherwise exempt from taxation under this chapter are exempt 462.22 from a political subdivision's tax. 462.23 (b) The gross receipts from the sale of tangible personal 462.24 property that meets the requirement of section 297A.68, 462.25 subdivision13 or 1415, are exempt, except the qualification 462.26 test applies based on the boundaries of the political 462.27 subdivision instead of the state of Minnesota. 462.28 (c) All mobile transportation equipment, and parts and 462.29 accessories attached to or to be attached to the equipment are 462.30 exempt, if purchased by a holder of a motor carrier direct pay 462.31 permit under section 297A.90. 462.32 Sec. 46. [INSTRUCTIONS TO REVISOR.] 462.33 (a) In the next edition of Minnesota Statutes, the revisor 462.34 of statutes shall put the definitions in section 297A.68, 462.35 subdivision 5, paragraph (d), in alphabetical order and correct 462.36 any references to the reordered definitions. 463.1 (b) In the next edition of Minnesota Statutes, the revisor 463.2 of statutes shall renumber section 297A.68, subdivision 27, as 463.3 297A.67, subdivision 26, and correct any references to the 463.4 renumbered section. 463.5 Sec. 47. [REPEALER.] 463.6 Minnesota Statutes 2000, sections 297A.61, subdivision 16; 463.7 297A.68, subdivision 21; and 297A.71, subdivision 21, are 463.8 repealed. 463.9 Sec. 48. [EFFECTIVE DATE.] 463.10 Each section of this act takes effect at the time the 463.11 section it amends is effective under Laws 2000, chapter 418, 463.12 article 1, section 46. 463.13 ARTICLE 19 463.14 HEALTH CARE TAXES 463.15 Section 1. Minnesota Statutes 2000, section 256B.19, 463.16 subdivision 1c, is amended to read: 463.17 Subd. 1c. [ADDITIONAL PORTION OF NONFEDERAL SHARE.]In463.18addition to any payment required under subdivision 1b,(a) 463.19 Hennepin county shall be responsible for a monthly transfer 463.20 payment of $1,500,000, due before noon on the 15th of each month 463.21 and the University of Minnesota shall be responsible for a 463.22 monthly transfer payment of $500,000 due before noon on the 15th 463.23 of each month, beginning July 15, 1995. These sums shall be 463.24 part of the designated governmental unit's portion of the 463.25 nonfederal share of medical assistance costs, but shall not be 463.26 subject to payback provisions of section 256.025. 463.27 (b) For the period from July 1, 2001, to June 30, 2003, the 463.28 payment under paragraph (a) shall be $1,783,333 each month. 463.29 Sec. 2. Minnesota Statutes 2000, section 295.53, 463.30 subdivision 4a, is amended to read: 463.31 Subd. 4a. [CREDIT FOR RESEARCH.] (a) In addition to the 463.32 exemptions allowed under subdivision 1, a hospital or health 463.33 care provider may claim an annual credit against the total 463.34 amount of tax, if any, the hospital or health care provider owes 463.35 for that calendar year under sections 295.50 to 295.57. The 463.36 credit shall equal2.5 percent of revenues for patient services464.1used to funda percentage of expenditures for qualifying 464.2 research conducted by an allowable research program as 464.3 determined under paragraph (e). The amount of the credit shall 464.4 not exceed the tax liability of the hospital or health care 464.5 provider under sections 295.50 to 295.57. 464.6 (b) For purposes of this subdivision, the following 464.7 requirements apply: 464.8 (1) expenditures must be for program costs of qualifying 464.9 research conducted by an allowable research program; 464.10 (2) an allowable research program must be a formal program 464.11 of medical and health care research conducted by an entity which 464.12 is exempt under section 501(c)(3) of the Internal Revenue Code 464.13 of 1986 or is owned and operated under authority of a 464.14 governmental unit; 464.15 (3) qualifying research must: 464.16 (A) be approved in writing by the governing body of the 464.17 hospital or health care provider which is taking thededuction464.18 credit under this subdivision; 464.19 (B) have as its purpose the development of new knowledge in 464.20 basic or applied science relating to the diagnosis and treatment 464.21 of conditions affecting the human body; 464.22 (C) be subject to review by individuals with expertise in 464.23 the subject matter of the proposed study but who have no 464.24 financial interest in the proposed study and are not involved in 464.25 the conduct of the proposed study; and 464.26 (D) be subject to review and supervision by an 464.27 institutional review board operating in conformity with federal 464.28 regulations if the research involves human subjects or an 464.29 institutional animal care and use committee operating in 464.30 conformity with federal regulations if the research involves 464.31 animal subjects. Research expensesare not exemptdo not 464.32 qualify for the credit if the study is a routine evaluation of 464.33 health care methods or products used in a particular setting 464.34 conducted for the purpose of making a management decision. 464.35 Costs of clinical research activities paid directly for the 464.36 benefit of an individual patient are excluded from 465.1 thisexemptioncredit. Basic research in fields including 465.2 biochemistry, molecular biology, and physiology are also 465.3 included if such programs are subject to a peer review process. 465.4 (c) No credit shall be allowed under this subdivision for 465.5 any revenue received by the hospital or health care provider in 465.6 the form of a grant, gift, or otherwise,whether from a465.7government or nongovernment source, on which the tax liability465.8under section 295.52 is not imposedto conduct research. 465.9 (d) The taxpayer shall apply for the credit under this 465.10 section on the annual return under section 295.55, subdivision 5. 465.11 (e) For research expenses paid in 2001, the credit is equal 465.12 to 5.5 percent of the taxpayer's total expenditures for 465.13 qualifying research. Beginning September 1, 2001, if the actual 465.14 or estimated amount paid under this section for the calendar 465.15 year exceeds$2,500,000$8,500,000, the commissioner of finance 465.16 shall determine the rate of the research credit for the 465.17 following calendar year to the nearest one-half percent so that 465.18 refunds paid under this section will most closely equal 465.19$2,500,000$8,500,000. The commissioner of finance shall 465.20 publish in the State Register by October 1 of each year the rate 465.21 of the credit for the following calendar year. A determination 465.22 under this section is not subject to the rulemaking provisions 465.23 of chapter 14. 465.24[EFFECTIVE DATE.] This section is effective for research 465.25 expenses paid in 2001 and thereafter. 465.26 Sec. 3. [REPEALER.] 465.27 Minnesota Statutes 2000, section 256.9657, subdivision 2, 465.28 is repealed effective July 1, 2002, and Minnesota Statutes 2000, 465.29 section 256B.19, subdivision 1b, is repealed effective July 1, 465.30 2001. 465.31 ARTICLE 20 465.32 DEPARTMENT INCOME AND FRANCHISE TAXES 465.33 Section 1. Minnesota Statutes 2000, section 270A.03, 465.34 subdivision 5, is amended to read: 465.35 Subd. 5. [DEBT.] "Debt" means a legal obligation of a 465.36 natural person to pay a fixed and certain amount of money, which 466.1 equals or exceeds $25 and which is due and payable to a claimant 466.2 agency. The term includes criminal fines imposed under section 466.3 609.10 or 609.125 and restitution. A debt may arise under a 466.4 contractual or statutory obligation, a court order, or other 466.5 legal obligation, but need not have been reduced to judgment. 466.6 A debt includes any legal obligation of a current recipient 466.7 of assistance which is based on overpayment of an assistance 466.8 grant where that payment is based on a client waiver or an 466.9 administrative or judicial finding of an intentional program 466.10 violation; or where the debt is owed to a program wherein the 466.11 debtor is not a client at the time notification is provided to 466.12 initiate recovery under this chapter and the debtor is not a 466.13 current recipient of food stamps, transitional child care, or 466.14 transitional medical assistance. 466.15 A debt does not include any legal obligation to pay a 466.16 claimant agency for medical care, including hospitalization if 466.17 the income of the debtor at the time when the medical care was 466.18 rendered does not exceed the following amount: 466.19 (1) for an unmarried debtor, an income of$6,400$8,800 or 466.20 less; 466.21 (2) for a debtor with one dependent, an income 466.22 of$8,200$11,270 or less; 466.23 (3) for a debtor with two dependents, an income 466.24 of$9,700$13,330 or less; 466.25 (4) for a debtor with three dependents, an income of 466.26$11,000$15,120 or less; 466.27 (5) for a debtor with four dependents, an income 466.28 of$11,600$15,950 or less; and 466.29 (6) for a debtor with five or more dependents, an income of 466.30$12,100$16,630 or less. 466.31 The income amounts in this subdivision shall be adjusted 466.32 for inflation for debts incurred in calendar years19912001 and 466.33 thereafter. The dollar amount of each income level that applied 466.34 to debts incurred in the prior year shall be increased in the 466.35 same manner as provided in section290.06, subdivision 2d, for466.36the expansion of the tax rate brackets1f of the Internal 467.1 Revenue Code of 1986, as amended through December 31, 2000, 467.2 except that for the purposes of this subdivision the percentage 467.3 increase shall be determined from the year starting September 1, 467.4 1999, and ending August 31, 2000, as the base year for adjusting 467.5 for inflation for debts incurred after December 31, 2000. 467.6 Debt also includes an agreement to pay a MinnesotaCare 467.7 premium, regardless of the dollar amount of the premium 467.8 authorized under section 256L.15, subdivision 1a. 467.9[EFFECTIVE DATE.] This section is effective for debts 467.10 incurred after December 31, 2000. 467.11 Sec. 2. Minnesota Statutes 2000, section 289A.12, 467.12 subdivision 3, is amended to read: 467.13 Subd. 3. [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 467.14 AND S CORPORATIONS.] (a) Partnerships must file a return with 467.15 the commissioner for each taxable year. The return must conform 467.16 to the requirements of section290.31290.311, and must include 467.17 the names and addresses of the partners entitled to a 467.18 distributive share in their taxable net income, gain, loss, or 467.19 credit, and the amount of the distributive share to which each 467.20 is entitled. A partnership required to file a return for a 467.21 partnership taxable year must furnish a copy of the information 467.22 required to be shown on the return to a person who is a partner 467.23 at any time during the taxable year, on or before the day on 467.24 which the return for the taxable year was filed. 467.25 (b) The fiduciary of an estate or trust making the return 467.26 required to be filed under section 289A.08, subdivision 2, for a 467.27 taxable year must give a beneficiary who receives a distribution 467.28 from the estate or trust with respect to the taxable year or to 467.29 whom any item with respect to the taxable year is allocated, a 467.30 statement containing the information required to be shown on the 467.31 return, on or before the date on which the return was filed. 467.32 (c) An S corporation must file a return with the 467.33 commissioner for a taxable year during which an election under 467.34 section 290.9725 is in effect, stating specifically the names 467.35 and addresses of the persons owning stock in the corporation at 467.36 any time during the taxable year, the number of shares of stock 468.1 owned by a shareholder at all times during the taxable year, the 468.2 shareholder's pro rata share of each item of the corporation for 468.3 the taxable year, and other information the commissioner 468.4 requires. An S corporation required to file a return under this 468.5 paragraph for any taxable year must furnish a copy of the 468.6 information shown on the return to the person who is a 468.7 shareholder at any time during the taxable year, on or before 468.8 the day on which the return for the taxable year was filed. 468.9 (d) The partnership or S corporation return must be signed 468.10 by someone designated by the partnership or S corporation. 468.11[EFFECTIVE DATE.] This section is effective for tax years 468.12 beginning after December 31, 2000. 468.13 Sec. 3. Minnesota Statutes 2000, section 290.06, 468.14 subdivision 23, is amended to read: 468.15 Subd. 23. [REFUND OF CONTRIBUTIONS TO POLITICAL PARTIES 468.16 AND CANDIDATES.] (a) A taxpayer may claim a refund equal to the 468.17 amount of the taxpayer's contributions made in the calendar year 468.18 to candidates and to a political party. The maximum refund for 468.19 an individual must not exceed $50 and for a married couple, 468.20 filing jointly, must not exceed $100. A refund of a 468.21 contribution is allowed only if the taxpayer files a form 468.22 required by the commissioner and attaches to the form a copy of 468.23 an official refund receipt form issued by the candidate or party 468.24 and signed by the candidate, the treasurer of the candidate's 468.25 principal campaign committee, or the chair or treasurer of the 468.26 party unit, after the contribution was received. The receipt 468.27 forms must be numbered, and the data on the receipt that are not 468.28 public must be made available to the campaign finance and public 468.29 disclosure board upon its request. A claim must be filed with 468.30 the commissioner no sooner than January 1 of the calendar year 468.31 in which the contribution was made and no later than April 15 of 468.32 the calendar year following the calendar year in which the 468.33 contribution was made. A taxpayer may file only one claim per 468.34 calendar year. Amounts paid by the commissioner after June 15 468.35 of the calendar year following the calendar year in which the 468.36 contribution was made must include interest at the rate 469.1 specified in section 270.76. 469.2 (b) No refund is allowed under this subdivision for a 469.3 contribution to a candidate unless the candidate: 469.4 (1) has signed an agreement to limit campaign expenditures 469.5 as provided in section 10A.322; 469.6 (2) is seeking an office for which voluntary spending 469.7 limits are specified in section 10A.25; and 469.8 (3) has designated a principal campaign committee. 469.9 This subdivision does not limit the campaign expenditures 469.10 of a candidate who does not sign an agreement but accepts a 469.11 contribution for which the contributor improperly claims a 469.12 refund. 469.13 (c) For purposes of this subdivision, "political party" 469.14 means a major political party as defined in section 200.02, 469.15 subdivision 7, or a minor political party qualifying for 469.16 inclusion on the income tax or property tax refund form under 469.17 section 10A.31, subdivision 3a. 469.18 A "major party" or "minor party" includes the aggregate of 469.19 that party's organization within each house of the legislature, 469.20 the state party organization, and the party organization within 469.21 congressional districts, counties, legislative districts, 469.22 municipalities, and precincts. 469.23 "Candidate" means a candidate as defined in section 10A.01, 469.24 subdivision 10, except a candidate for judicial office. 469.25 "Contribution" means a gift of money. 469.26 (d) The commissioner shall make copies of the form 469.27 available to the public and candidates upon request. 469.28 (e) The following data collected or maintained by the 469.29 commissioner under this subdivision are private: the identities 469.30 of individuals claiming a refund, the identities of candidates 469.31 to whom those individuals have made contributions, and the 469.32 amount of each contribution. 469.33 (f) The commissioner shall report to the campaign finance 469.34 and public disclosure board by each August 1 a summary showing 469.35 the total number and aggregate amount of political contribution 469.36 refunds made on behalf of each candidate and each political 470.1 party. These data are public. 470.2 (g) The amount necessary to pay claims for the refund 470.3 provided in this section is appropriated from the general fund 470.4 to the commissioner of revenue. 470.5 (h) For a taxpayer who files a claim for refund via the 470.6 Internet or other electronic means, the commissioner may accept 470.7 the number on the official receipt as documentation that a 470.8 contribution was made rather than the actual receipt as required 470.9 by paragraph (a). 470.10[EFFECTIVE DATE.] This section is effective for refund 470.11 claims based on contributions made after December 31, 2001. 470.12 Sec. 4. Minnesota Statutes 2000, section 290.067, 470.13 subdivision 2, is amended to read: 470.14 Subd. 2. [LIMITATIONS.] The credit for expenses incurred 470.15 for the care of each dependent shall not exceed $720 in any 470.16 taxable year, and the total credit for all dependents of a 470.17 claimant shall not exceed $1,440 in a taxable year. The maximum 470.18 total credit shall be reduced according to the amount of the 470.19 income of the claimant and a spouse, if any, as follows: 470.20 income up to$13,350$18,040, $720 maximum for one 470.21 dependent, $1,440 for all dependents; 470.22 income over$13,350$18,040, the maximum credit for one 470.23 dependent shall be reduced by $18 for every $350 of additional 470.24 income, $36 for all dependents. 470.25 The commissioner shall construct and make available to 470.26 taxpayers tables showing the amount of the credit at various 470.27 levels of income and expenses. The tables shall follow the 470.28 schedule contained in this subdivision, except that the 470.29 commissioner may graduate the transitions between expenses and 470.30 income brackets. 470.31[EFFECTIVE DATE.] This section is effective for tax years 470.32 beginning after December 31, 1999. 470.33 Sec. 5. Minnesota Statutes 2000, section 290.067, 470.34 subdivision 2b, is amended to read: 470.35 Subd. 2b. [INFLATION ADJUSTMENT.] The dollar amount of the 470.36 income threshold at which the maximum credit begins to be 471.1 reduced under subdivision 2 must be adjusted for inflation. The 471.2 commissioner shalladjust the threshold amount by the percentage471.3determined under section 290.06, subdivision 2d, for the taxable471.4year.make the inflation adjustments in accordance with section 471.5 1f of the Internal Revenue Code except that for the purposes of 471.6 this subdivision the percentage increase must be determined from 471.7 the year starting September 1, 1999, and ending August 31, 2000, 471.8 as the base year for adjusting for inflation for the tax year 471.9 beginning after December 31, 2000. The determination of the 471.10 commissioner under this subdivision is not a rule under the 471.11 Administrative Procedures Act. 471.12[EFFECTIVE DATE.] This section is effective for tax years 471.13 beginning after December 31, 2000. 471.14 Sec. 6. Minnesota Statutes 2000, section 290.0671, 471.15 subdivision 1, is amended to read: 471.16 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 471.17 allowed a credit against the tax imposed by this chapter equal 471.18 to a percentage of earned income. To receive a credit, a 471.19 taxpayer must be eligible for a credit under section 32 of the 471.20 Internal Revenue Code. 471.21 (b) For individuals with no qualifying children, the credit 471.22 equals 1.9125 percent of the first$4,460$4,620 of earned 471.23 income. The credit is reduced by 1.9125 percent of earned 471.24 income or modified adjusted gross income, whichever is greater, 471.25 in excess of$5,570$5,770, but in no case is the credit less 471.26 than zero. 471.27 (c) For individuals with one qualifying child, the credit 471.28 equals 8.5 percent of the first$6,680$6,920 of earned income 471.29 and 8.5 percent of earned income over$11,650$12,080 but less 471.30 than$12,990$13,450. The credit is reduced by 5.73 percent of 471.31 earned income or modified adjusted gross income, whichever is 471.32 greater, in excess of$14,560$15,080, but in no case is the 471.33 credit less than zero. 471.34 (d) For individuals with two or more qualifying children, 471.35 the credit equals ten percent of the first$9,390$9,720 of 471.36 earned income and 20 percent of earned income 472.1 over$14,350$14,860 but less than$16,230$16,800. The credit 472.2 is reduced by 10.3 percent of earned income or modified adjusted 472.3 gross income, whichever is greater, in excess 472.4 of$17,280$17,890, but in no case is the credit less than zero. 472.5 (e) For a nonresident or part-year resident, the credit 472.6 must be allocated based on the percentage calculated under 472.7 section 290.06, subdivision 2c, paragraph (e). 472.8 (f) For a person who was a resident for the entire tax year 472.9 and has earned income not subject to tax under this chapter, the 472.10 credit must be allocated based on the ratio of federal adjusted 472.11 gross income reduced by the earned income not subject to tax 472.12 under this chapter over federal adjusted gross income. 472.13 (g) The commissioner shall construct tables showing the 472.14 amount of the credit at various income levels and make them 472.15 available to taxpayers. The tables shall follow the schedule 472.16 contained in this subdivision, except that the commissioner may 472.17 graduate the transition between income brackets. 472.18[EFFECTIVE DATE.] This section is effective for taxable 472.19 years beginning after December 31, 1999. 472.20 Sec. 7. Minnesota Statutes 2000, section 290.0671, 472.21 subdivision 7, is amended to read: 472.22 Subd. 7. [INFLATION ADJUSTMENT.] The earned income amounts 472.23 used to calculate the credit and the income thresholds at which 472.24 the maximum credit begins to be reduced in subdivision 1 must be 472.25 adjusted for inflation. The commissioner shalladjust the472.26earned income and threshold amounts by the percentage determined472.27under section 290.06, subdivision 2d, for the taxable year.make 472.28 the inflation adjustments in accordance with section 1f of the 472.29 Internal Revenue Code except that for the purposes of this 472.30 subdivision the percentage increase shall be determined from the 472.31 year starting September 1, 1999, and ending August 31, 2000, as 472.32 the base year for adjusting for inflation for the tax year 472.33 beginning after December 31, 2000. The determination of the 472.34 commissioner under this subdivision is not a rule under the 472.35 Administrative Procedures Act. 472.36[EFFECTIVE DATE.] This section is effective for tax years 473.1 beginning after December 31, 2000. 473.2 Sec. 8. Minnesota Statutes 2000, section 290.0921, 473.3 subdivision 3, is amended to read: 473.4 Subd. 3. [ALTERNATIVE MINIMUM TAXABLE INCOME.] 473.5 "Alternative minimum taxable income" is Minnesota net income as 473.6 defined in section 290.01, subdivision 19, and includes the 473.7 adjustments and tax preference items in sections 56, 57, 58, and 473.8 59(d), (e), (f), and (h) of the Internal Revenue Code. If a 473.9 corporation files a separate company Minnesota tax return, the 473.10 minimum tax must be computed on a separate company basis. If a 473.11 corporation is part of a tax group filing a unitary return, the 473.12 minimum tax must be computed on a unitary basis. The following 473.13 adjustments must be made. 473.14 (1) For purposes of the depreciation adjustments under 473.15 section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 473.16 the basis for depreciable property placed in service in a 473.17 taxable year beginning before January 1, 1990, is the adjusted 473.18 basis for federal income tax purposes, including any 473.19 modification made in a taxable year under section 290.01, 473.20 subdivision 19e, or Minnesota Statutes 1986, section 290.09, 473.21 subdivision 7, paragraph (c). 473.22 (2) For taxable years beginning after December 31, 2000, 473.23 the amount of any remaining modification made under section 473.24 290.01, subdivision 19e, or Minnesota Statutes 1986, section 473.25 290.09, subdivision 7, paragraph (c), not previously deducted is 473.26 a depreciation allowance in the first taxable year after 473.27 December 31, 2000. 473.28 (3) The alternative tax net operating loss deduction under 473.29 sections 56(a)(4) and 56(d) of the Internal Revenue Code does 473.30 not apply. 473.31(3)(4) The special rule for certain dividends under 473.32 section 56(g)(4)(C)(ii) of the Internal Revenue Code does not 473.33 apply. 473.34(4)(5) The special rule for dividends from section 936 473.35 companies under section 56(g)(4)(C)(iii) does not apply. 473.36(5)(6) The tax preference for depletion under section 474.1 57(a)(1) of the Internal Revenue Code does not apply. 474.2(6)(7) The tax preference for intangible drilling costs 474.3 under section 57(a)(2) of the Internal Revenue Code must be 474.4 calculated without regard to subparagraph (E) and the 474.5 subtraction under section 290.01, subdivision 19d, clause (4). 474.6(7)(8) The tax preference for tax exempt interest under 474.7 section 57(a)(5) of the Internal Revenue Code does not apply. 474.8(8)(9) The tax preference for charitable contributions of 474.9 appreciated property under section 57(a)(6) of the Internal 474.10 Revenue Code does not apply. 474.11(9)(10) For purposes of calculating the tax preference for 474.12 accelerated depreciation or amortization on certain property 474.13 placed in service before January 1, 1987, under section 57(a)(7) 474.14 of the Internal Revenue Code, the deduction allowable for the 474.15 taxable year is the deduction allowed under section 290.01, 474.16 subdivision 19e. 474.17 (11) For taxable years beginning after December 31, 2000, 474.18 the amount of any remaining modification made under section 474.19 290.01, subdivision 19e, not previously deducted is a 474.20 depreciation or amortization allowance in the first taxable year 474.21 after December 31, 2000. 474.22(10)(12) For purposes of calculating the adjustment for 474.23 adjusted current earnings in section 56(g) of the Internal 474.24 Revenue Code, the term "alternative minimum taxable income" as 474.25 it is used in section 56(g) of the Internal Revenue Code, means 474.26 alternative minimum taxable income as defined in this 474.27 subdivision, determined without regard to the adjustment for 474.28 adjusted current earnings in section 56(g) of the Internal 474.29 Revenue Code. 474.30(11)(13) For purposes of determining the amount of 474.31 adjusted current earnings under section 56(g)(3) of the Internal 474.32 Revenue Code, no adjustment shall be made under section 56(g)(4) 474.33 of the Internal Revenue Code with respect to (i) the amount of 474.34 foreign dividend gross-up subtracted as provided in section 474.35 290.01, subdivision 19d, clause (1), (ii) the amount of refunds 474.36 of income, excise, or franchise taxes subtracted as provided in 475.1 section 290.01, subdivision 19d, clause (10), or (iii) the 475.2 amount of royalties, fees or other like income subtracted as 475.3 provided in section 290.01, subdivision 19d, clause (11). 475.4 Items of tax preference must not be reduced below zero as a 475.5 result of the modifications in this subdivision. 475.6[EFFECTIVE DATE.] This section is effective the day 475.7 following final enactment. 475.8 Sec. 9. Minnesota Statutes 2000, section 290.35, 475.9 subdivision 2, is amended to read: 475.10 Subd. 2. [APPORTIONMENT OF TAXABLE NET INCOME.] The 475.11commissionerinsurance company shall computetherefrom theits 475.12 taxable net incomeof such companiesby assigning to this state 475.13 that proportionthereofof net income which the gross premiums 475.14 collected by them during the taxable year from old and new 475.15 business within this state bears to the total gross premiums 475.16 collected by them during that year from their entire old and new 475.17 business, including reinsurance premiums; provided, the 475.18commissionerinsurance company shall add to the taxable net 475.19 incomesoapportioned to this state the amount of any taxes on 475.20 premiums paid by the company by virtue of any law of this state 475.21 (other than the surcharge on premiums imposed by section 297I.10 475.22 and the surcharge imposed by section 168A.40, subdivision 3) 475.23 which shall have been deducted from gross income by the company 475.24 in arriving at its total net income. 475.25 (a) For purposes of determining the Minnesota apportionment 475.26 percentage, premiums from reinsurance contracts in connection 475.27 with property in or liability arising out of activity in, or in 475.28 connection with the lives or health of Minnesota residents shall 475.29 be assigned to Minnesota and premiums from reinsurance contracts 475.30 in connection with property in or liability arising out of 475.31 activity in, or in connection with the lives or health of 475.32 non-Minnesota residents shall be assigned outside of Minnesota. 475.33 Reinsurance premiums are presumed to be received for a Minnesota 475.34 risk and are assigned to Minnesota, if: 475.35 (1) the reinsurance contract is assumed for a company 475.36 domiciled in Minnesota; and 476.1 (2) the taxpayer, upon request of the commissioner, fails 476.2 to provide reliable records indicating the reinsured contract 476.3 covered non-Minnesota risks. 476.4 For purposes of this paragraph, "Minnesota risk" means coverage 476.5 in connection with property in or liability arising out of 476.6 activity in Minnesota, or in connection with the lives or health 476.7 of Minnesota residents. 476.8 (b) The apportionment method prescribed by paragraph (a) 476.9 shall be presumed to fairly and correctly determine the 476.10 taxpayer's taxable net income. If the method prescribed in 476.11 paragraph (a) does not fairly reflect all or any part of taxable 476.12 net income, the taxpayer may petition for or the commissioner 476.13 may require the determination of taxable net income by use of 476.14 another method if that method fairly reflects taxable net 476.15 income. A petition within the meaning of this section must be 476.16 filed by the taxpayer on such form as the commissioner shall 476.17 require. 476.18[EFFECTIVE DATE.] This section is effective the day 476.19 following final enactment. 476.20 Sec. 10. Minnesota Statutes 2000, section 290.92, 476.21 subdivision 23, is amended to read: 476.22 Subd. 23. [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 476.23 (1) The commissioner may, within five years after the date of 476.24 assessment of the tax, or if a lien has been filed under section 476.25 270.69, within the statutory period for enforcement of the lien, 476.26 give notice to any employer deriving income which has a taxable 476.27 situs in this state regardless of whether the income is exempt 476.28 from taxation, that an employee of that employer is delinquent 476.29 in a certain amount with respect to any state taxes, including 476.30 penalties, interest, and costs. The commissioner can proceed 476.31 under this subdivision only if the tax is uncontested or if the 476.32 time for appeal of the tax has expired. The commissioner shall 476.33 not proceed under this subdivision until the expiration of 30 476.34 days after mailing to the taxpayer, at the taxpayer's last known 476.35 address, a written notice of (a) the amount of taxes, interest, 476.36 and penalties due from the taxpayer and demand for their 477.1 payment, and (b) the commissioner's intention to require 477.2 additional withholding by the taxpayer's employer pursuant to 477.3 this subdivision. The effect of the notice shall expire180477.4daysone year after it has been mailed to the taxpayer provided 477.5 that the notice may be renewed by mailing a new notice which is 477.6 in accordance with this subdivision. The renewed notice shall 477.7 have the effect of reinstating the priority of the original 477.8 claim. The notice to the taxpayer shall be in substantially the 477.9 same form as that provided in section 571.72. The notice shall 477.10 further inform the taxpayer of the wage exemptions contained in 477.11 section 550.37, subdivision 14. If no statement of exemption is 477.12 received by the commissioner within 30 days from the mailing of 477.13 the notice, the commissioner may proceed under this 477.14 subdivision. The notice to the taxpayer's employer may be 477.15 served by mail or by delivery by an employee of the department 477.16 of revenue and shall be in substantially the same form as 477.17 provided in section 571.75. Upon receipt of notice, the 477.18 employer shall withhold from compensation due or to become due 477.19 to the employee, the total amount shown by the notice, subject 477.20 to the provisions of section 571.922. The employer shall 477.21 continue to withhold each pay period until the notice is 477.22 released by the commissioner under section 270.709. Upon 477.23 receipt of notice by the employer, the claim of the state of 477.24 Minnesota shall have priority over any subsequent garnishments 477.25 or wage assignments. The commissioner may arrange between the 477.26 employer and the employee for withholding a portion of the total 477.27 amount due the employee each pay period, until the total amount 477.28 shown by the notice plus accrued interest has been withheld. 477.29 The "compensation due" any employee is defined in 477.30 accordance with the provisions of section 571.921. The maximum 477.31 withholding allowed under this subdivision for any one pay 477.32 period shall be decreased by any amounts payable pursuant to a 477.33 garnishment action with respect to which the employer was served 477.34 prior to being served with the notice of delinquency and any 477.35 amounts covered by any irrevocable and previously effective 477.36 assignment of wages; the employer shall give notice to the 478.1 department of the amounts and the facts relating to such 478.2 assignments within ten days after the service of the notice of 478.3 delinquency on the form provided by the department of revenue as 478.4 noted in this subdivision. 478.5 (2) If the employee ceases to be employed by the employer 478.6 before the full amount set forth in a notice of delinquency plus 478.7 accrued interest has been withheld, the employer shall 478.8 immediately notify the commissioner in writing of the 478.9 termination date of the employee and the total amount withheld. 478.10 No employer may discharge any employee by reason of the fact 478.11 that the commissioner has proceeded under this subdivision. If 478.12 an employer discharges an employee in violation of this 478.13 provision, the employee shall have the same remedy as provided 478.14 in section 571.927, subdivision 2. 478.15 (3) Within ten days after the expiration of such pay 478.16 period, the employer shall remit to the commissioner, on a form 478.17 and in the manner prescribed by the commissioner, the amount 478.18 withheld during each pay period under this subdivision. 478.19 (4) Clauses (1), (2), and (3), except provisions imposing a 478.20 liability on the employer for failure to withhold or remit, 478.21 shall apply to cases in which the employer is the United States 478.22 or any instrumentality thereof or this state or any municipality 478.23 or other subordinate unit thereof. 478.24 (5) The commissioner shall refund to the employee excess 478.25 amounts withheld from the employee under this subdivision. If 478.26 any excess results from payments by the employer because of 478.27 willful failure to withhold or remit as prescribed in clause 478.28 (3), the excess attributable to the employer's payment shall be 478.29 refunded to the employer. 478.30 (6) Employers required to withhold delinquent taxes, 478.31 penalties, interest, and costs under this subdivision shall not 478.32 be required to compute any additional interest, costs or other 478.33 charges to be withheld. 478.34 (7) The collection remedy provided to the commissioner by 478.35 this subdivision shall have the same legal effect as if it were 478.36 a levy made pursuant to section 270.70. 479.1[EFFECTIVE DATE.] This section is effective for notices of 479.2 intent mailed on or after the day following final enactment. 479.3 Sec. 11. Minnesota Statutes 2000, section 290A.04, 479.4 subdivision 4, is amended to read: 479.5 Subd. 4. [INFLATION ADJUSTMENT.] Beginning for property 479.6 tax refunds payable in calendar year 1996, the commissioner 479.7 shall annually adjust the dollar amounts of the income 479.8 thresholds and the maximum refunds under subdivisions 2 and 2a 479.9 for inflation. The commissioner shall make the inflation 479.10 adjustments in accordance with section290.06, subdivision 2d1f 479.11 of the Internal Revenue Code, except that for purposes of this 479.12 subdivision the percentage increase shall be determined from the 479.13 year ending on June 30, 1994, to the year ending on June 30 of 479.14 the year preceding that in which the refund is payable. The 479.15 commissioner shall use the appropriate percentage increase to 479.16 annually adjust the income thresholds and maximum refunds under 479.17 subdivisions 2 and 2a for inflation without regard to whether or 479.18 not the income tax brackets are adjusted for inflation in that 479.19 year. The commissioner shall round the thresholds and the 479.20 maximum amounts, as adjusted to the nearest $10 amount. If the 479.21 amount ends in $5, the commissioner shall round it up to the 479.22 next $10 amount. 479.23 The commissioner shall annually announce the adjusted 479.24 refund schedule at the same time provided under section 290.06. 479.25 The determination of the commissioner under this subdivision is 479.26 not a rule under the Administrative Procedure Act. 479.27 Sec. 12. [REPEALER.] 479.28 Minnesota Statutes 2000, sections 290.095, subdivision 7; 479.29 290.23; 290.25; and 290.31, subdivisions 2, 2a, 3, 4, 5, and 19, 479.30 are repealed. 479.31[EFFECTIVE DATE.] This section is effective for tax years 479.32 beginning after December 31, 2000. 479.33 ARTICLE 21 479.34 DEPARTMENT PROPERTY TAXES 479.35 Section 1. Minnesota Statutes 2000, section 273.072, 479.36 subdivision 1, is amended to read: 480.1 Subdivision 1. Any county and any city or town lying 480.2 wholly or partially within the county and constituting a 480.3 separate assessment district may, by agreement entered into 480.4 under section 471.59and approved by the commissioner of480.5revenue, provide for the assessment of property in the 480.6 municipality or town by the county assessor. Any two or more 480.7 cities or towns constituting separate assessment districts,480.8whether their assessors are elective or appointive,may enter 480.9 into an agreement under section 471.59 for the assessment of 480.10 property in the contracting units by the assessor of one of the 480.11 units or by an assessor who is jointly employed. 480.12[EFFECTIVE DATE.] This section is effective the day 480.13 following final enactment. 480.14 Sec. 2. Minnesota Statutes 2000, section 273.1104, 480.15 subdivision 2, is amended to read: 480.16 Subd. 2. [NOTICE OF MARKET VALUE.] On or before May 1 in 480.17 each year, the commissioner shall send to each person subject to 480.18 the tax on unmined iron ores and to each taxing district 480.19 affected, a notice of the market value of the unmined ores as 480.20 determined by the commissionerprior to adjustment under480.21subdivision 1. Said notice shall be sent by mail directed to 480.22 such person at the address given in the report filed and the 480.23 assessor of such taxing district, but the validity of the tax 480.24 shall not be affected by the failure of the commissioner of 480.25 revenue to mail such notice or the failure of the person subject 480.26 to the tax to receive it. 480.27 On the first secular day following May 20, the commissioner 480.28 of revenue shall hold a hearing which may be adjourned from day 480.29 to day. All relevant and material evidence having probative 480.30 value with respect to the issues shall be submitted at the 480.31 hearing and such hearing shall not be a "contested case" within 480.32 the meaning of section 14.02, subdivision 3. Every person 480.33 subject to such tax may at such hearing present evidence and 480.34 argument on any matter bearing upon the validity or correctness 480.35 of the tax determined to be due, and the commissioner of revenue 480.36 shall review the determination of such tax. 481.1[EFFECTIVE DATE.] This section is effective the day 481.2 following final enactment. 481.3 Sec. 3. Minnesota Statutes 2000, section 273.111, 481.4 subdivision 4, is amended to read: 481.5 Subd. 4. [DETERMINATION OF VALUE.] The value of any real 481.6 estate described in subdivision 3 shall upon timely application 481.7 by the owner, in the manner provided in subdivision 8, be 481.8 determined solely with reference to its appropriate agricultural 481.9 classification and value notwithstanding sections 272.03, 481.10 subdivision 8, and 273.11. In determining the value for ad 481.11 valorem tax purposes, the assessor shall use sales dataobtained481.12fromfor agricultural lands located outside the seven 481.13 metropolitan countiesbut within the region used for computing481.14the range of values under section 273.11, subdivision 10. The481.15sales shall havehaving similar soil types, number of degree 481.16 days, and other similar agricultural characteristicsas481.17contained in section 273.11, subdivision 10. Furthermore, the 481.18 assessor shall not consider any added values resulting from 481.19 nonagricultural factors. 481.20[EFFECTIVE DATE.] This section is effective the day 481.21 following final enactment. 481.22 Sec. 4. Minnesota Statutes 2000, section 273.124, 481.23 subdivision 13, is amended to read: 481.24 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 481.25 the homestead requirements under subdivision 1 must file a 481.26 homestead application with the county assessor to initially 481.27 obtain homestead classification. 481.28 (b) On or before January 2, 1993, each county assessor 481.29 shall mail a homestead application to the owner of each parcel 481.30 of property within the county which was classified as homestead 481.31 for the 1992 assessment year. The format and contents of a 481.32 uniform homestead application shall be prescribed by the 481.33 commissioner of revenue. The commissioner shall consult with 481.34 the chairs of the house and senate tax committees on the 481.35 contents of the homestead application form. The application 481.36 must clearly inform the taxpayer that this application must be 482.1 signed by all owners who occupy the property or by the 482.2 qualifying relative and returned to the county assessor in order 482.3 for the property to continue receiving homestead treatment. The 482.4 envelope containing the homestead application shall clearly 482.5 identify its contents and alert the taxpayer of its necessary 482.6 immediate response. 482.7 (c) Every property owner applying for homestead 482.8 classification must furnish to the county assessor the social 482.9 security number of each occupant who is listed as an owner of 482.10 the property on the deed of record, the name and address of each 482.11 owner who does not occupy the property, and the name and social 482.12 security number of each owner's spouse who occupies the 482.13 property. The application must be signed by each owner who 482.14 occupies the property and by each owner's spouse who occupies 482.15 the property, or, in the case of property that qualifies as a 482.16 homestead under subdivision 1, paragraph (c), by the qualifying 482.17 relative. 482.18 If a property owner occupies a homestead, the property 482.19 owner's spouse may not claim another property as a homestead 482.20 unless the property owner and the property owner's spouse file 482.21 with the assessor an affidavit or other proof required by the 482.22 assessor stating that the property qualifies as a homestead 482.23 under subdivision 1, paragraph (e). 482.24 Owners or spouses occupying residences owned by their 482.25 spouses and previously occupied with the other spouse, either of 482.26 whom fail to include the other spouse's name and social security 482.27 number on the homestead application or provide the affidavits or 482.28 other proof requested, will be deemed to have elected to receive 482.29 only partial homestead treatment of their residence. The 482.30 remainder of the residence will be classified as nonhomestead 482.31 residential. When an owner or spouse's name and social security 482.32 number appear on homestead applications for two separate 482.33 residences and only one application is signed, the owner or 482.34 spouse will be deemed to have elected to homestead the residence 482.35 for which the application was signed. 482.36 The social security numbers or affidavits or other proofs 483.1 of the property owners and spouses are private data on 483.2 individuals as defined by section 13.02, subdivision 12, but, 483.3 notwithstanding that section, the private data may be disclosed 483.4 to the commissioner of revenue, or, for purposes of proceeding 483.5 under the Revenue Recapture Act to recover personal property 483.6 taxes owing, to the county treasurer. 483.7 (d) If residential real estate is occupied and used for 483.8 purposes of a homestead by a relative of the owner and qualifies 483.9 for a homestead under subdivision 1, paragraph (c), in order for 483.10 the property to receive homestead status, a homestead 483.11 application must be filed with the assessor. The social 483.12 security number of each relative occupying the property and the 483.13 social security number of each owner who is related to an 483.14 occupant of the property shall be required on the homestead 483.15 application filed under this subdivision. If a different 483.16 relative of the owner subsequently occupies the property, the 483.17 owner of the property must notify the assessor within 30 days of 483.18 the change in occupancy. The social security number of a 483.19 relative occupying the property is private data on individuals 483.20 as defined by section 13.02, subdivision 12, but may be 483.21 disclosed to the commissioner of revenue. 483.22 (e) The homestead application shall also notify the 483.23 property owners that the application filed under this section 483.24 will not be mailed annually and that if the property is granted 483.25 homestead status for the 1993 assessment, or any assessment year 483.26 thereafter, that same property shall remain classified as 483.27 homestead until the property is sold or transferred to another 483.28 person, or the owners, the spouse of the owner, or the relatives 483.29 no longer use the property as their homestead. Upon the sale or 483.30 transfer of the homestead property, a certificate of value must 483.31 be timely filed with the county auditor as provided under 483.32 section 272.115. Failure to notify the assessor within 30 days 483.33 that the property has been sold, transferred, or that the owner, 483.34 the spouse of the owner, or the relative is no longer occupying 483.35 the property as a homestead, shall result in the penalty 483.36 provided under this subdivision and the property will lose its 484.1 current homestead status. 484.2 (f) If the homestead application is not returned within 30 484.3 days, the county will send a second application to the present 484.4 owners of record. The notice of proposed property taxes 484.5 prepared under section 275.065, subdivision 3, shall reflect the 484.6 property's classification. Beginning with assessment year 1993 484.7 for all properties, if a homestead application has not been 484.8 filed with the county by December 15, the assessor shall 484.9 classify the property as nonhomestead for the current assessment 484.10 year for taxes payable in the following year, provided that the 484.11 owner may be entitled to receive the homestead classification by 484.12 proper application under section 375.192. 484.13 (g) At the request of the commissioner, each county must 484.14 give the commissioner a list that includes the name and social 484.15 security number of each property owner and the property owner's 484.16 spouse occupying the property, or relative of a property owner, 484.17 applying for homestead classification under this subdivision. 484.18 The commissioner shall use the information provided on the lists 484.19 as appropriate under the law, including for the detection of 484.20 improper claims by owners, or relatives of owners, under chapter 484.21 290A. 484.22 (h) If the commissioner finds that a property owner may be 484.23 claiming a fraudulent homestead, the commissioner shall notify 484.24 the appropriate counties. Within 90 days of the notification, 484.25 the county assessor shall investigate to determine if the 484.26 homestead classification was properly claimed. If the property 484.27 owner does not qualify, the county assessor shall notify the 484.28 county auditor who will determine the amount of homestead 484.29 benefits that had been improperly allowed. For the purpose of 484.30 this section, "homestead benefits" means the tax reduction 484.31 resulting from the classification as a homestead under section 484.32 273.13, the taconite homestead credit under section 273.135, the 484.33 education homestead and agricultural credits under section 484.34 273.1382, and the supplemental homestead credit under section 484.35 273.1391. 484.36 The county auditor shall send a notice to the person who 485.1 owned the affected property at the time the homestead 485.2 application related to the improper homestead was filed, 485.3 demanding reimbursement of the homestead benefits plus a penalty 485.4 equal to 100 percent of the homestead benefits. The person 485.5 notified may appeal the county's determination by serving copies 485.6 of a petition for review with county officials as provided in 485.7 section 278.01 and filing proof of service as provided in 485.8 section 278.01 with the Minnesota tax court within 60 days of 485.9 the date of the notice from the county. Procedurally, the 485.10 appeal is governed by the provisions in chapter 271 which apply 485.11 to the appeal of a property tax assessment or levy, but without 485.12 requiring any prepayment of the amount in controversy. If the 485.13 amount of homestead benefits and penalty is not paid within 60 485.14 days, and if no appeal has been filed, the county auditor shall 485.15 certify the amount of taxes and penalty to the county 485.16 treasurer. The county treasurer will add interest to the unpaid 485.17 homestead benefits and penalty amounts at the rate provided in 485.18 section 279.03 for real property taxes becoming delinquent in 485.19 the calendar year during which the amount remains unpaid. 485.20 Interest may be assessed for the period beginning 60 days after 485.21 demand for payment was made. 485.22 If the person notified is the current owner of the 485.23 property, the treasurer may add the total amount of homestead 485.24 benefits, penalty, interest, and costs to the ad valorem taxes 485.25 otherwise payable on the property by including the amounts on 485.26 the property tax statements under section 276.04, subdivision 485.27 3. The amounts added under this paragraph to the ad valorem 485.28 taxes shall include interest accrued through December 31 of the 485.29 year preceding the taxes payable year for which the amounts are 485.30 first added. These amounts, when added to the property tax 485.31 statement, become subject to all the laws for the enforcement of 485.32 real or personal property taxes for that year, and for any 485.33 subsequent year. 485.34 If the person notified is not the current owner of the 485.35 property, the treasurer may collect the amounts due under the 485.36 Revenue Recapture Act in chapter 270A, or use any of the powers 486.1 granted in sections 277.20 and 277.21 without exclusion, to 486.2 enforce payment of the homestead benefits, penalty, interest, 486.3 and costs, as if those amounts were delinquent tax obligations 486.4 of the person who owned the property at the time the application 486.5 related to the improperly allowed homestead was filed. The 486.6 treasurer may relieve a prior owner of personal liability for 486.7 the homestead benefits, penalty, interest, and costs, and 486.8 instead extend those amounts on the tax lists against the 486.9 property as provided in this paragraph to the extent that the 486.10 current owner agrees in writing. On all demands, billings, 486.11 property tax statements, and related correspondence, the county 486.12 must list and state separately the amounts of homestead 486.13 benefits, penalty, interest and costs being demanded, billed or 486.14 assessed. 486.15 (i) Any amount of homestead benefits recovered by the 486.16 county from the property owner shall be distributed to the 486.17 county, city or town, and school district where the property is 486.18 located in the same proportion that each taxing district's levy 486.19 was to the total of the three taxing districts' levy for the 486.20 current year. Any amount recovered attributable to taconite 486.21 homestead credit shall be transmitted to the St. Louis county 486.22 auditor to be deposited in the taconite property tax relief 486.23 account. Any amount recovered that is attributable to 486.24 supplemental homestead credit is to be transmitted to the 486.25 commissioner of revenue for deposit in the general fund of the 486.26 state treasury. The total amount of penalty collected must be 486.27 deposited in the county general fund. 486.28 (j) If a property owner has applied for more than one 486.29 homestead and the county assessors cannot determine which 486.30 property should be classified as homestead, the county assessors 486.31 will refer the information to the commissioner. The 486.32 commissioner shall make the determination and notify the 486.33 counties within 60 days. 486.34 (k) In addition to lists of homestead properties, the 486.35 commissioner may ask the counties to furnish lists of all 486.36 properties and the record owners. The social security numbers 487.1 and federal identification numbers that are maintained by a 487.2 county or city assessor for property tax administration 487.3 purposes, and that may appear on the lists retain their 487.4 classification as private or nonpublic data; but may be viewed, 487.5 accessed, and used by the county auditor or treasurer of the 487.6 same county for the limited purpose of assisting the 487.7 commissioner in the preparation of microdata samples under 487.8 section 270.0681. 487.9[EFFECTIVE DATE.] This section is effective for homestead 487.10 applications submitted on or after the day following final 487.11 enactment. 487.12 Sec. 5. Minnesota Statutes 2000, section 282.04, 487.13 subdivision 2, is amended to read: 487.14 Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 487.15 DEMOLITION.] Before the sale of a parcel of forfeited land the 487.16 county auditor may, with the approval of the county board of 487.17 commissioners, provide for the repair and improvement of any 487.18 building or structure located upon the parcel, and may provide 487.19 for maintenance of tax-forfeited lands, if it is determined by 487.20 the county board that such repairs, improvements, or maintenance 487.21 are necessary for the operation, use, preservation and safety of 487.22 the building or structure. If so authorized by the county 487.23 board, the county auditor may insure the building or structure 487.24 against loss or damage resulting from fire or windstorm, may 487.25 purchase workers' compensation insurance to insure the county 487.26 against claims for injury to the persons employed in the 487.27 building or structure by the county, and may insure the county, 487.28 its officers and employees against claims for injuries to 487.29 persons or property because of the management, use or operation 487.30 of the building or structure. The county auditor may, with the 487.31 approval of the county board, provide for the demolition of the 487.32 building or structure, which has been determined by the county 487.33 board to be within the purview of section 299F.10, and for the 487.34 sale of salvaged materials from the building or structure. The 487.35 county auditor, with the approval of the county board, may 487.36 provide for the sale of abandoned personal propertyunder either488.1chapter 345 or 566, as appropriate. The sale may be made by the 488.2 sheriff using the procedures for the sale of abandoned property 488.3 in section 345.15 or by the county auditor using the procedures 488.4 for the sale of abandoned property in section 504B.271. The net 488.5 proceeds from any sale of the personal property, salvaged 488.6 materials, timber or other products, or leases made under this 488.7 law must be deposited in the forfeited tax sale fund and must be 488.8 distributed in the same manner as if the parcel had been sold. 488.9 The county auditor, with the approval of the county board, 488.10 may provide for the demolition of any structure on tax-forfeited 488.11 lands, if in the opinion of the county board, the county 488.12 auditor, and the land commissioner, if there is one, the sale of 488.13 the land with the structure on it, or the continued existence of 488.14 the structure by reason of age, dilapidated condition or 488.15 excessive size as compared with nearby structures, will result 488.16 in a material lessening of net tax capacities of real estate in 488.17 the vicinity of the tax-forfeited lands, or if the demolition of 488.18 the structure or structures will aid in disposing of the 488.19 tax-forfeited property. 488.20 Before the sale of a parcel of forfeited land located in an 488.21 urban area, the county auditor may with the approval of the 488.22 county board provide for the grading of the land by filling or 488.23 the removal of any surplus material from it. If the physical 488.24 condition of forfeited lands is such that a reasonable grading 488.25 of the lands is necessary for the protection and preservation of 488.26 the property of any adjoining owner, the adjoining property 488.27 owner or owners may apply to the county board to have the 488.28 grading done. If, after considering the application, the county 488.29 board believes that the grading will enhance the value of the 488.30 forfeited lands commensurate with the cost involved, it may 488.31 approve it, and the work must be performed under the supervision 488.32 of the county or city engineer, as the case may be, and the 488.33 expense paid from the forfeited tax sale fund. 488.34 Sec. 6. Minnesota Statutes 2000, section 290A.03, 488.35 subdivision 12, is amended to read: 488.36 Subd. 12. [GROSS RENT.] (a) "Gross rent" means rental paid 489.1 for the right of occupancy, at arms-length, of a homestead, 489.2 exclusive of charges for any medical services furnished by the 489.3 landlord as a part of the rental agreement, whether expressly 489.4 set out in the rental agreement or not. 489.5 (b) The gross rent of a resident of a nursing home or 489.6 intermediate care facility is $350 per month. The gross rent of 489.7 a resident of an adult foster care home is $550 per month. 489.8 Beginning for rent paid in 2002, the commissioner shall annually 489.9 adjust for inflation the gross rent amounts stated in this 489.10 paragraph. The adjustment must be made in accordance with 489.11 section 1f of the Internal Revenue Code, except that for 489.12 purposes of this paragraph the percentage increase shall be 489.13 determined from the year ending on June 30, 2001, to the year 489.14 ending on June 30 of the year in which the rent is paid. The 489.15 commissioner shall round the gross rents to the nearest $10 489.16 amount. If the amount ends in $5, the commissioner shall round 489.17 it up to the next $10 amount. The determination of the 489.18 commissioner under this paragraph is not a rule under the 489.19 Administrative Procedure Act. 489.20 (c) If the landlord and tenant have not dealt with each 489.21 other at arms-length and the commissioner determines that the 489.22 gross rent charged was excessive, the commissioner may adjust 489.23 the gross rent to a reasonable amount for purposes of this 489.24 chapter. 489.25 (d) Any amount paid by a claimant residing in property 489.26 assessed pursuant to section 273.124, subdivision 3, 4, 5, or 6 489.27 for occupancy in that property shall be excluded from gross rent 489.28 for purposes of this chapter. However, property taxes imputed 489.29 to the homestead of the claimant or the dwelling unit occupied 489.30 by the claimant that qualifies for homestead treatment pursuant 489.31 to section 273.124, subdivision 3, 4, 5, or 6 shall be included 489.32 within the term "property taxes payable" as defined in 489.33 subdivision 13, notwithstanding the fact that ownership is not 489.34 in the name of the claimant. 489.35[EFFECTIVE DATE.] This section is effective for refunds 489.36 based on rent paid after December 31, 2000. 490.1 Sec. 7. Minnesota Statutes 2000, section 290A.15, is 490.2 amended to read: 490.3 290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.] 490.4 The amount of any claim otherwise payable under this 490.5 chapter may be applied by the commissioner against any 490.6 delinquent tax liability ofthe claimant or spouse of the490.7claimant payable to the department of revenueany member of the 490.8 household. If there are two members of the household, the 490.9 commissioner may apply only one-half of a refund to the separate 490.10 liability of either member of the household. 490.11[EFFECTIVE DATE.] This section is effective beginning with 490.12 refunds paid on or after July 1, 2001. 490.13 Sec. 8. Minnesota Statutes 2000, section 477A.011, 490.14 subdivision 36, is amended to read: 490.15 Subd. 36. [CITY AID BASE.] (a) Except as provided in 490.16 paragraphs (b) to (n), "city aid base" means, for each city, the 490.17 sum of the local government aid and equalization aid it was 490.18 originally certified to receive in calendar year 1993 under 490.19 Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5, 490.20 and the amount of disparity reduction aid it received in 490.21 calendar year 1993 under Minnesota Statutes 1992, section 490.22 273.1398, subdivision 3. 490.23 (b) For aids payable in 1996 and thereafter, a city that in 490.24 1992 or 1993 transferred an amount from governmental funds to 490.25 its sewer and water fund, which amount exceeded its net levy for 490.26 taxes payable in the year in which the transfer occurred, has a 490.27 "city aid base" equal to the sum of (i) its city aid base, as 490.28 calculated under paragraph (a), and (ii) one-half of the 490.29 difference between its city aid distribution under section 490.30 477A.013, subdivision 9, for aids payable in 1995 and its city 490.31 aid base for aids payable in 1995. 490.32 (c) The city aid base for any city with a population less 490.33 than 500 is increased by $40,000 for aids payable in calendar 490.34 year 1995 and thereafter, and the maximum amount of total aid it 490.35 may receive under section 477A.013, subdivision 9, paragraph 490.36 (c), is also increased by $40,000 for aids payable in calendar 491.1 year 1995 only, provided that: 491.2 (i) the average total tax capacity rate for taxes payable 491.3 in 1995 exceeds 200 percent; 491.4 (ii) the city portion of the tax capacity rate exceeds 100 491.5 percent; and 491.6 (iii) its city aid base is less than $60 per capita. 491.7 (d) The city aid base for a city is increased by $20,000 in 491.8 1998 and thereafter and the maximum amount of total aid it may 491.9 receive under section 477A.013, subdivision 9, paragraph (c), is 491.10 also increased by $20,000 in calendar year 1998 only, provided 491.11 that: 491.12 (i) the city has a population in 1994 of 2,500 or more; 491.13 (ii) the city is located in a county, outside of the 491.14 metropolitan area, which contains a city of the first class; 491.15 (iii) the city's net tax capacity used in calculating its 491.16 1996 aid under section 477A.013 is less than $400 per capita; 491.17 and 491.18 (iv) at least four percent of the total net tax capacity, 491.19 for taxes payable in 1996, of property located in the city is 491.20 classified as railroad property. 491.21 (e) The city aid base for a city is increased by $200,000 491.22 in 1999 and thereafter and the maximum amount of total aid it 491.23 may receive under section 477A.013, subdivision 9, paragraph 491.24 (c), is also increased by $200,000 in calendar year 1999 only, 491.25 provided that: 491.26 (i) the city was incorporated as a statutory city after 491.27 December 1, 1993; 491.28 (ii) its city aid base does not exceed $5,600; and 491.29 (iii) the city had a population in 1996 of 5,000 or more. 491.30 (f) The city aid base for a city is increased by $450,000 491.31 in 1999 to 2008 and the maximum amount of total aid it may 491.32 receive under section 477A.013, subdivision 9, paragraph (c), is 491.33 also increased by $450,000 in calendar year 1999 only, provided 491.34 that: 491.35 (i) the city had a population in 1996 of at least 50,000; 491.36 (ii) its population had increased by at least 40 percent in 492.1 the ten-year period ending in 1996; and 492.2 (iii) its city's net tax capacity for aids payable in 1998 492.3 is less than $700 per capita. 492.4 (g) Beginning in20022004, the city aid base for a city is 492.5 equal to the sum of its city aid base in20012003 and the 492.6 amount of additional aid it was certified to receive under 492.7 section 477A.06 in20012003. For20022004 only, the maximum 492.8 amount of total aid a city may receive under section 477A.013, 492.9 subdivision 9, paragraph (c), is also increased by the amount it 492.10 was certified to receive under section 477A.06 in20012003. 492.11 (h) The city aid base for a city is increased by $150,000 492.12 for aids payable in 2000 and thereafter, and the maximum amount 492.13 of total aid it may receive under section 477A.013, subdivision 492.14 9, paragraph (c), is also increased by $150,000 in calendar year 492.15 2000 only, provided that: 492.16 (1) the city has a population that is greater than 1,000 492.17 and less than 2,500; 492.18 (2) its commercial and industrial percentage for aids 492.19 payable in 1999 is greater than 45 percent; and 492.20 (3) the total market value of all commercial and industrial 492.21 property in the city for assessment year 1999 is at least 15 492.22 percent less than the total market value of all commercial and 492.23 industrial property in the city for assessment year 1998. 492.24 (i) The city aid base for a city is increased by $200,000 492.25 in 2000 and thereafter, and the maximum amount of total aid it 492.26 may receive under section 477A.013, subdivision 9, paragraph 492.27 (c), is also increased by $200,000 in calendar year 2000 only, 492.28 provided that: 492.29 (1) the city had a population in 1997 of 2,500 or more; 492.30 (2) the net tax capacity of the city used in calculating 492.31 its 1999 aid under section 477A.013 is less than $650 per 492.32 capita; 492.33 (3) the pre-1940 housing percentage of the city used in 492.34 calculating 1999 aid under section 477A.013 is greater than 12 492.35 percent; 492.36 (4) the 1999 local government aid of the city under section 493.1 477A.013 is less than 20 percent of the amount that the formula 493.2 aid of the city would have been if the need increase percentage 493.3 was 100 percent; and 493.4 (5) the city aid base of the city used in calculating aid 493.5 under section 477A.013 is less than $7 per capita. 493.6 (j) The city aid base for a city is increased by $225,000 493.7 in calendar years 2000 to 2002 and the maximum amount of total 493.8 aid it may receive under section 477A.013, subdivision 9, 493.9 paragraph (c), is also increased by $225,000 in calendar year 493.10 2000 only, provided that: 493.11 (1) the city had a population of at least 5,000; 493.12 (2) its population had increased by at least 50 percent in 493.13 the ten-year period ending in 1997; 493.14 (3) the city is located outside of the Minneapolis-St. Paul 493.15 metropolitan statistical area as defined by the United States 493.16 Bureau of the Census; and 493.17 (4) the city received less than $30 per capita in aid under 493.18 section 477A.013, subdivision 9, for aids payable in 1999. 493.19 (k) The city aid base for a city is increased by $102,000 493.20 in 2000 and thereafter, and the maximum amount of total aid it 493.21 may receive under section 477A.013, subdivision 9, paragraph 493.22 (c), is also increased by $102,000 in calendar year 2000 only, 493.23 provided that: 493.24 (1) the city has a population in 1997 of 2,000 or more; 493.25 (2) the net tax capacity of the city used in calculating 493.26 its 1999 aid under section 477A.013 is less than $455 per 493.27 capita; 493.28 (3) the net levy of the city used in calculating 1999 aid 493.29 under section 477A.013 is greater than $195 per capita; and 493.30 (4) the 1999 local government aid of the city under section 493.31 477A.013 is less than 38 percent of the amount that the formula 493.32 aid of the city would have been if the need increase percentage 493.33 was 100 percent. 493.34 (l) The city aid base for a city is increased by $32,000 in 493.35 2001 and thereafter, and the maximum amount of total aid it may 493.36 receive under section 477A.013, subdivision 9, paragraph (c), is 494.1 also increased by $32,000 in calendar year 2001 only, provided 494.2 that: 494.3 (1) the city has a population in 1998 that is greater than 494.4 200 but less than 500; 494.5 (2) the city's revenue need used in calculating aids 494.6 payable in 2000 was greater than $200 per capita; 494.7 (3) the city net tax capacity for the city used in 494.8 calculating aids available in 2000 was equal to or less than 494.9 $200 per capita; 494.10 (4) the city aid base of the city used in calculating aid 494.11 under section 477A.013 is less than $65 per capita; and 494.12 (5) the city's formula aid for aids payable in 2000 was 494.13 greater than zero. 494.14 (m) The city aid base for a city is increased by $7,200 in 494.15 2001 and thereafter, and the maximum amount of total aid it may 494.16 receive under section 477A.013, subdivision 9, paragraph (c), is 494.17 also increased by $7,200 in calendar year 2001 only, provided 494.18 that: 494.19 (1) the city had a population in 1998 that is greater than 494.20 200 but less than 500; 494.21 (2) the city's commercial industrial percentage used in 494.22 calculating aids payable in 2000 was less than ten percent; 494.23 (3) more than 25 percent of the city's population was 60 494.24 years old or older according to the 1990 census; 494.25 (4) the city aid base of the city used in calculating aid 494.26 under section 477A.013 is less than $15 per capita; and 494.27 (5) the city's formula aid for aids payable in 2000 was 494.28 greater than zero. 494.29 (n) The city aid base for a city is increased by $45,000 in 494.30 2001 and thereafter, and the maximum amount of total aid it may 494.31 receive under section 477A.013, subdivision 9, paragraph (c), is 494.32 also increased by $45,000 in calendar year 2001 only, provided 494.33 that: 494.34 (1) the net tax capacity of the city used in calculating 494.35 its 2000 aid under section 477A.013 is less than $810 per 494.36 capita; 495.1 (2) the population of the city declined more than two 495.2 percent between 1988 and 1998; 495.3 (3) the net levy of the city used in calculating 2000 aid 495.4 under section 477A.013 is greater than $240 per capita; and 495.5 (4) the city received less than $36 per capita in aid under 495.6 section 477A.013, subdivision 9, for aids payable in 2000. 495.7 ARTICLE 22 495.8 DEPARTMENT SALES AND USE TAXES 495.9 Section 1. Minnesota Statutes 2000, section 289A.50, 495.10 subdivision 2a, is amended to read: 495.11 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 495.12 has collected from a purchaser a tax on a transaction that is 495.13 not subject to the tax imposed by chapter 297A, the purchaser 495.14 may apply directly to the commissioner for a refund under this 495.15 section if: 495.16 (a) the purchaser is currently registered to collect and 495.17 remit the salesandtax or to remit the use tax; and 495.18 (b) the amount of the refund applied for exceeds $500. 495.19 The purchaser may not file more than two applications for 495.20 refund under this subdivision in a calendar year. 495.21[EFFECTIVE DATE.] This section is effective the day 495.22 following final enactment. 495.23 Sec. 2. Minnesota Statutes 2000, section 297A.01, 495.24 subdivision 3, is amended to read: 495.25 Subd. 3. A "sale" and a "purchase" includes, but is not 495.26 limited to, each of the following transactions: 495.27 (a) Any transfer of title or possession, or both, of 495.28 tangible personal property, whether absolutely or conditionally, 495.29 and the leasing of or the granting of a license to use or 495.30 consume tangible personal property other than manufactured homes 495.31 used for residential purposes for a continuous period of 30 days 495.32 or more, for a consideration in money or by exchange or barter; 495.33 (b) The production, fabrication, printing, or processing of 495.34 tangible personal property for a consideration for consumers who 495.35 furnish either directly or indirectly the materials used in the 495.36 production, fabrication, printing, or processing; 496.1 (c) The furnishing, preparing, or serving for a 496.2 consideration of food, meals, or drinks. "Sale" or "purchase" 496.3 does not include: 496.4 (1) meals or drinks served to patients, inmates, or persons 496.5 residing at hospitals, sanitariums, nursing homes, senior 496.6 citizens homes, and correctional, detention, and detoxification 496.7 facilities; 496.8 (2) meals or drinks purchased for and served exclusively to 496.9 individuals who are 60 years of age or over and their spouses or 496.10 to the handicapped and their spouses by governmental agencies, 496.11 nonprofit organizations, agencies, or churches or pursuant to 496.12 any program funded in whole or part through 42 USCA sections 496.13 3001 through 3045, wherever delivered, prepared or served; or 496.14 (3) meals and lunches served at public and private schools, 496.15 universities, or colleges. 496.16 Notwithstanding section 297A.25, subdivision 2, taxable food or 496.17 meals include, but are not limited to, the following: 496.18 (i) food or drinks sold by the retailer for immediate 496.19 consumption on the retailer's premises. Food and drinks sold 496.20 within a building or grounds which require an admission charge 496.21 for entrance are presumed to be sold for consumption on the 496.22 premises; 496.23 (ii) food or drinks prepared by the retailer for immediate 496.24 consumption either on or off the retailer's premises. For 496.25 purposes of this subdivision, "food or drinks prepared for 496.26 immediate consumption" includes any food product upon which an 496.27 act of preparation including, but not limited to, cooking, 496.28 mixing, sandwich making, blending, heating, or pouring has been 496.29 performed by the retailer so the food product may be immediately 496.30 consumed by the purchaser; 496.31 (iii) ice cream, ice milk, frozen yogurt products, or 496.32 frozen novelties sold in single or individual servings including 496.33 cones, sundaes, and snow cones. For purposes of this 496.34 subdivision, "single or individual servings" does not include 496.35 products when sold in bulk containers or bulk packaging; 496.36 (iv) soft drinks and other beverages including all 497.1 carbonated and noncarbonated beverages or drinks sold in liquid 497.2 form except nonalcoholic beverages or drinks which contain milk 497.3 or milk products, nonalcoholic beverages or drinks containing 15 497.4 or more percent fruit juice, and noncarbonated and 497.5 noneffervescent bottled water sold in individual containers of 497.6 one-half gallon or more in size; 497.7 (v) gum, candy, and candy products, except when sold for 497.8 fundraising purposes by a nonprofit organization that provides 497.9 educational and social activities primarily for young people 18 497.10 years of age and under; 497.11 (vi) ice; 497.12 (vii) all food sold from vending machines; 497.13 (viii) all food for immediate consumption sold from 497.14 concession stands and vehicles; 497.15 (ix) party trays; 497.16 (x) all meals and single servings of packaged snack food 497.17 sold in restaurants and bars; and 497.18 (xi) bakery products: 497.19 (A) prepared by the retailer for consumption on the 497.20 retailer's premises; 497.21 (B) sold at a place that charges admission; 497.22 (C) sold from vending machines; or 497.23 (D) sold in single or individual servings from concession 497.24 stands, vehicles, bars, and restaurants. For purposes of this 497.25 subdivision, "single or individual servings" does not include 497.26 products when sold in bulk containers or bulk packaging. 497.27 For purposes of this subdivision, "premises" means the 497.28 total space and facilities, including buildings, grounds, and 497.29 parking lots that are made available or that are available for 497.30 use by the retailer or customer for the purpose of sale or 497.31 consumption of prepared food and drinks. The premises of a 497.32 caterer is the place where the catered food or drinks are 497.33 served; 497.34 (d) The granting of the privilege of admission to places of 497.35 amusement, recreational areas, or athletic events, except a 497.36 world championship football game sponsored by the national 498.1 football league, and the privilege of having access to and the 498.2 use of amusement devices, tanning facilities, reducing salons, 498.3 steam baths, turkish baths, health clubs, and spas or athletic 498.4 facilities; 498.5 (e) The furnishing for a consideration of lodging and 498.6 related services by a hotel, rooming house, tourist court, motel 498.7 or trailer camp and of the granting of any similar license to 498.8 use real property other than the renting or leasing thereof for 498.9 a continuous period of 30 days or more; 498.10 (f) The furnishing for a consideration of electricity, gas, 498.11 water, or steam for use or consumption within this state, or 498.12 local exchange telephone service, intrastate toll service, and 498.13 interstate toll service, if that service originates from and is 498.14 charged to a telephone located in this state. Telephone service 498.15 does not include services purchased with prepaid telephone 498.16 calling cards. Telephone service includes paging services and 498.17 private communication service, as defined in United States Code, 498.18 title 26, section 4252(d), as amended through December 31, 1991, 498.19 except for private communication service purchased by an agent 498.20 acting on behalf of the state lottery. The furnishing for a 498.21 consideration of access to telephone services by a hotel to its 498.22 guests is a sale under this clause. Sales by municipal 498.23 corporations in a proprietary capacity are included in the 498.24 provisions of this clause. The furnishing of water and sewer 498.25 services for residential use shall not be considered a sale. 498.26 The sale of natural gas to be used as a fuel in vehicles 498.27 propelled by natural gas shall not be considered a sale for the 498.28 purposes of this section; 498.29 (g) The furnishing for a consideration of cable television 498.30 services, including charges for basic service, charges for 498.31 premium service, and any other charges for any other 498.32 pay-per-view, monthly, or similar television services; 498.33 (h) The furnishing for a consideration of parking services, 498.34 whether on a contractual, hourly, or other periodic basis, 498.35 except for parking at a meter; 498.36 (i) The furnishing for a consideration of services listed 499.1 in this paragraph: 499.2 (i) laundry and dry cleaning services including cleaning, 499.3 pressing, repairing, altering, and storing clothes, linen 499.4 services and supply, cleaning and blocking hats, and carpet, 499.5 drapery, upholstery, and industrial cleaning. Laundry and dry 499.6 cleaning services do not include services provided by coin 499.7 operated facilities operated by the customer; 499.8 (ii) motor vehicle washing, waxing, and cleaning services, 499.9 including services provided by coin-operated facilities operated 499.10 by the customer, and rustproofing, undercoating, and towing of 499.11 motor vehicles; 499.12 (iii) building and residential cleaning, maintenance, and 499.13 disinfecting and exterminating services; 499.14 (iv) detective services, security services, burglar, fire 499.15 alarm, and armored car services; but not including services 499.16 performed within the jurisdiction they serve by off-duty 499.17 licensed peace officers as defined in section 626.84, 499.18 subdivision 1, or services provided by a nonprofit organization 499.19 for monitoring and electronic surveillance of persons placed on 499.20 in-home detention pursuant to court order or under the direction 499.21 of the Minnesota department of corrections; 499.22 (v) pet grooming services; 499.23 (vi) lawn care, fertilizing, mowing, spraying and sprigging 499.24 services; garden planting and maintenance; tree, bush, and shrub 499.25 pruning, bracing, spraying, and surgery; indoor plant care; 499.26 tree, bush, shrub and stump removal; and tree trimming for 499.27 public utility lines. Services performed under a construction 499.28 contract for the installation of shrubbery, plants, sod, trees, 499.29 bushes, and similar items are not taxable; 499.30 (vii) massages, except when provided by a licensed health 499.31 care facility or professional or upon written referral from a 499.32 licensed health care facility or professional for treatment of 499.33 illness, injury, or disease; and 499.34 (viii) the furnishing for consideration of lodging, board 499.35 and care services for animals in kennels and other similar 499.36 arrangements, but excluding veterinary and horse boarding 500.1 services. 500.2 The services listed in this paragraph are taxable under section 500.3 297A.02 if the service is performed wholly within Minnesota or 500.4 if the service is performed partly within and partly without 500.5 Minnesota and the greater proportion of the service is performed 500.6 in Minnesota, based on the cost of performance. In applying the 500.7 provisions of this chapter, the terms "tangible personal 500.8 property" and "sales at retail" include taxable services and the 500.9 provision of taxable services, unless specifically provided 500.10 otherwise. Services performed by an employee for an employer 500.11 are not taxable under this paragraph. Services performed by a 500.12 partnership or association for another partnership or 500.13 association are not taxable under this paragraph if one of the 500.14 entities owns or controls more than 80 percent of the voting 500.15 power of the equity interest in the other entity. Services 500.16 performed between members of an affiliated group of corporations 500.17 are not taxable. For purposes of this section, "affiliated 500.18 group of corporations" includes those entities that would be 500.19 classified as a member of an affiliated group under United 500.20 States Code, title 26, section 1504, as amended through December 500.21 31, 1987, and who are eligible to file a consolidated tax return 500.22 for federal income tax purposes; 500.23 (j) A "sale" and a "purchase" includes the transfer of 500.24 computer software, meaning information and directions that 500.25 dictate the function performed by data processing equipment. A 500.26 "sale" and a "purchase" does not include the design, 500.27 development, writing, translation, fabrication, lease, or 500.28 transfer for a consideration of title or possession of a custom 500.29 computer program; and 500.30 (k) The granting of membership in a club, association, or 500.31 other organization if: 500.32 (1) the club, association, or other organization makes 500.33 available for the use of its members sports and athletic 500.34 facilities (without regard to whether a separate charge is 500.35 assessed for use of the facilities); and 500.36 (2) use of the sports and athletic facilities is not made 501.1 available to the general public on the same basis as it is made 501.2 available to members. 501.3 Granting of membership includes both one-time initiation fees 501.4 and periodic membership dues. Sports and athletic facilities 501.5 include golf courses, tennis, racquetball, handball and squash 501.6 courts, basketball and volleyball facilities, running tracks, 501.7 exercise equipment, swimming pools, and other similar athletic 501.8 or sports facilities. The provisions of this paragraph do not 501.9 apply to camps or other recreation facilities owned and operated 501.10 by an exempt organization under section 501(c)(3) of the 501.11 Internal Revenue Code of 1986, as amended through December 31, 501.12 1992, for educational and social activities for young people 501.13 primarily age 18 and under. 501.14[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 501.15 effective the day following final enactment. In the next 501.16 edition of Minnesota Statutes, the revisor of statutes shall 501.17 codify the amendment in this section in Minnesota Statutes, 501.18 section 297A.61, subdivision 3. 501.19 Sec. 3. Minnesota Statutes 2000, section 297A.01, 501.20 subdivision 5, is amended to read: 501.21 Subd. 5. "Storage" includes any keeping or retention in 501.22 Minnesota for any purpose except sale in the regular course of 501.23 businessor subsequent use solely outside Minnesota of tangible501.24personal property. 501.25[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section 501.26 is effective for purchases, sales, storage, use, or consumption 501.27 occurring after June 30, 1997. 501.28 (b) In the next edition of Minnesota Statutes, the revisor 501.29 shall codify the amendment to this section in Minnesota 501.30 Statutes, section 297A.61, subdivision 5. 501.31 Sec. 4. Minnesota Statutes 2000, section 297A.07, 501.32 subdivision 3, is amended to read: 501.33 Subd. 3. [NEW PERMITS AFTER REVOCATION.] The commissioner 501.34 shall not issue a new permit or reinstate a revoked permit after 501.35 revocation unless the taxpayer applies for a permit and provides 501.36 reasonable evidence of intention to comply with the sales and 502.1 use tax laws and rules. The commissioner may require the 502.2 applicant to supply security, in addition to that authorized by 502.3 section 297A.28, as is reasonably necessary to insure compliance 502.4 with the sales and use tax laws and rules. If the commissioner 502.5 issues or reinstates a permit not in conformance with the 502.6 requirements of this subdivision or applicable rules, the 502.7 commissioner may cancel the permit upon notice to the permit 502.8 holder. The notice must be served by first class and certified 502.9 mail at the permit holder's last known address. The 502.10 cancellation shall be effective immediately, subject to the 502.11 right of the permit holder to show that the permit was issued in 502.12 conformance with the requirements of this subdivision and 502.13 applicable rules. Upon such showing, the permit must be 502.14 reissued. 502.15 If a taxpayer has had a permit or permits revoked three 502.16 times in a five-year period, the commissioner shall not issue a 502.17 new permit or reinstate the revoked permit until 24 months have 502.18 elapsed after revocation and the taxpayer has satisfied the 502.19 conditions for reinstatement of a revoked permit or issuance of 502.20 a new permit imposed by this section and rules adopted hereunder. 502.21 For purposes of this subdivision, the term "taxpayer" means 502.22 an individual, if a revoked permit was issued to or in the name 502.23 of an individual, or a corporation or partnership, if a revoked 502.24 permit was issued to or in the name of a corporation or 502.25 partnership. Taxpayer also means an officer of a corporation, a 502.26 member of a partnership, or an individual who is liable for 502.27 delinquent sales taxes, either for the entity for which the new 502.28 or reinstated permit is at issue, or for another entity for 502.29 which a permit was previously revoked, or personally as a permit 502.30 holder. 502.31[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section 502.32 is effective the day following final enactment. 502.33 (b) In the next edition of Minnesota Statutes, the revisor 502.34 shall codify the amendments to this section in Minnesota 502.35 Statutes, section 297A.86, subdivision 2. 502.36 Sec. 5. Minnesota Statutes 2000, section 297A.25, 503.1 subdivision 3, is amended to read: 503.2 Subd. 3. [MEDICINES; MEDICAL DEVICES.] The gross receipts 503.3 from the sale of and storage, use, or consumption of prescribed 503.4 drugs, prescribed medicine and insulin, intended for use, 503.5 internal or external, in the cure, mitigation, treatment or 503.6 prevention of illness or disease in human beings are exempt, 503.7 together with prescription glasses, fever thermometers, 503.8 therapeutic, and prosthetic devices. "Prescribed drugs" or 503.9 "prescribed medicine" includes over-the-counter drugs or 503.10 medicine prescribed by a licensedphysicianhealth care 503.11 professional. "Therapeutic devices" includes reusable finger 503.12 pricking devices for the extraction of blood, blood glucose 503.13 monitoring machines, and other diagnostic agents used in 503.14 diagnosing, monitoring, or treating diabetes. Nonprescription 503.15 analgesics consisting principally (determined by the weight of 503.16 all ingredients) of acetaminophen, acetylsalicylic acid, 503.17 ibuprofen, ketoprofen, naproxen, and other nonprescription 503.18 analgesics that are approved by the United States Food and Drug 503.19 Administration for internal use by human beings, or a 503.20 combination thereof, are exempt. 503.21 Medical supplies purchased by a licensed health care 503.22 facility or licensed health care professional to provide medical 503.23 treatment to residents or patients are exempt. The exemption 503.24 does not apply to medical equipment or components of medical 503.25 equipment, laboratory supplies, radiological supplies, and other 503.26 items used in providing medical services. For purposes of this 503.27 subdivision, "medical supplies" means adhesive and nonadhesive 503.28 bandages, gauze pads and strips, cotton applicators, 503.29 antiseptics, nonprescription drugs, eye solution, and other 503.30 similar supplies used directly on the resident or patient in 503.31 providing medical services. 503.32[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 503.33 effective the day following final enactment. In the next 503.34 edition of Minnesota Statutes, the revisor of statutes shall 503.35 codify the amendment in this section in Minnesota Statutes, 503.36 section 297A.67, subdivision 7. 504.1 Sec. 6. Minnesota Statutes 2000, section 297A.25, 504.2 subdivision 11, is amended to read: 504.3 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 504.4 all sales, including sales in which title is retained by a 504.5 seller or a vendor or is assigned to a third party under an 504.6 installment sale or lease purchase agreement under section 504.7 465.71, of tangible personal property to, and all storage, use 504.8 or consumption of such property by, the United States and its 504.9 agencies and instrumentalities, the University of Minnesota, 504.10 state universities, community colleges, technical colleges, 504.11 state academies, the Perpich center for arts education, an 504.12 instrumentality of a political subdivision that is accredited as 504.13 an optional/special function school by the North Central 504.14 Association of Colleges and Schools, school districts, public 504.15 libraries, public library systems, multicounty, multitype 504.16 library systems as defined in section 134.001, county law 504.17 libraries under chapter 134A, state agency libraries, the state 504.18 library under section 480.09, and the legislative reference 504.19 library are exempt. 504.20 As used in this subdivision, "school districts" means 504.21 public school entities and districts of every kind and nature 504.22 organized under the laws of the state of Minnesota, including, 504.23 without limitation, school districts, intermediate school 504.24 districts, education districts, service cooperatives, secondary 504.25 vocational cooperative centers, special education cooperatives, 504.26 joint purchasing cooperatives, telecommunication cooperatives, 504.27 regional management information centers, and any instrumentality 504.28 of a school district, as defined in section 471.59. 504.29 Sales exempted by this subdivision include sales under 504.30 section 297A.01, subdivision 3, paragraph (f). 504.31 Sales to hospitals and nursing homes owned and operated by 504.32 political subdivisions of the state of tangible personal 504.33 property and taxable services used at or by the hospitals and 504.34 nursing homes are exempt under this subdivision. 504.35 Sales of supplies and equipment used in the operation of an 504.36 ambulance service owned and operated by a political subdivision 505.1 of the state are exempt under this subdivision provided that the 505.2 supplies and equipment are used in the course of providing 505.3 medical care. Sales to a political subdivision of repair and 505.4 replacement parts for emergency rescue vehicles and fire trucks 505.5 and apparatus are exempt under this subdivision. 505.6 Sales to a political subdivision of machinery and 505.7 equipment, except for motor vehicles, used directly for mixed 505.8 municipal solid waste management services at a solid waste 505.9 disposal facility as defined in section 115A.03, subdivision 10, 505.10 are exempt under this subdivision. 505.11 Sales to political subdivisions of chore and homemaking 505.12 services to be provided to elderly or disabled individuals are 505.13 exempt. 505.14 Sales to a town of gravel and of machinery, equipment, and 505.15 accessories, except motor vehicles, used exclusively for road 505.16 and bridge maintenance, and leases of motor vehicles exempt from 505.17 tax under section 297B.03, clause (10), are exempt. 505.18 Sales of telephone services to the department of 505.19 administration that are used to provide telecommunications 505.20 services through the intertechnologies revolving fund are exempt 505.21 under this subdivision. 505.22 This exemption shall not apply to building, construction or 505.23 reconstruction materials purchased by a contractor or a 505.24 subcontractor as a part of a lump-sum contract or similar type 505.25 of contract with a guaranteed maximum price covering both labor 505.26 and materials for use in the construction, alteration, or repair 505.27 of a building or facility. This exemption does not apply to 505.28 construction materials purchased by tax exempt entities or their 505.29 contractors to be used in constructing buildings or facilities 505.30 which will not be used principally by the tax exempt entities. 505.31 This exemption does not apply to the leasing of a motor 505.32 vehicle as defined in section 297B.01, subdivision 5, except for 505.33 leases entered into by the United States or its agencies or 505.34 instrumentalities. 505.35 The tax imposed on sales to political subdivisions of the 505.36 state under this section applies to all political subdivisions 506.1 other than those explicitly exempted under this subdivision, 506.2 notwithstanding section 115A.69, subdivision 6, 116A.25, 506.3 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 506.4 469.127, 473.448, 473.545, or 473.608 or any other law to the 506.5 contrary enacted before 1992. 506.6 Sales exempted by this subdivision include sales made to 506.7 other states or political subdivisions of other states, if the 506.8 sale would be exempt from taxation if it occurred in that state, 506.9 but do not include sales under section 297A.01, subdivision 3, 506.10 paragraphs (c) and (e). 506.11[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 506.12 effective the day following final enactment. In the next 506.13 edition of Minnesota Statutes, the revisor of statutes shall 506.14 codify the amendment in this section in Minnesota Statutes, 506.15 section 297A.70, subdivision 2. 506.16 Sec. 7. Minnesota Statutes 2000, section 297A.86, 506.17 subdivision 1, is amended to read: 506.18 Subdivision 1. [NOTICE OF REVOCATION; HEARINGS.] (a) If a 506.19 person fails to comply with this chapter or the sales and use 506.20 tax provisions of chapter 289A or the rulesadopted under either506.21chapterrelated to sales and use tax, or if any person fails to 506.22 comply with chapter 297F or the rules related to cigarette and 506.23 tobacco products, without reasonable cause, the commissioner may 506.24 give the person 30 days' notice in writing, specifying the 506.25 violations, and stating that based on the violations the 506.26 commissioner intends to revoke the person's permit. The notice 506.27 must also advise the person of the right to contest the 506.28 revocation under this subdivision. It must also explain the 506.29 general procedures for a contested case hearing under chapter 506.30 14. The notice may be served personally or by mail in the 506.31 manner prescribed for service of an order of assessment. 506.32 (b) If the person does not request a hearing within 30 days 506.33 after the date of the notice of intent, the commissioner may 506.34 serve a notice of revocation of permit upon the person, and the 506.35 permit is revoked. If a hearing is timely requested, and held, 506.36 the permit is revoked after the commissioner serves an order of 507.1 revocation of permit under section 14.62, subdivision 1. 507.2[EFFECTIVE DATE.] This section is effective for violations 507.3 occurring on or after July 1, 2001. 507.4 Sec. 8. Minnesota Statutes 2000, section 297B.03, is 507.5 amended to read: 507.6 297B.03 [EXEMPTIONS.] 507.7 There is specifically exempted from the provisions of this 507.8 chapter and from computation of the amount of tax imposed by it 507.9 the following: 507.10 (1) purchase or use, including use under a lease purchase 507.11 agreement or installment sales contract made pursuant to section 507.12 465.71, of any motor vehicle by the United States and its 507.13 agencies and instrumentalities and by any person described in 507.14 and subject to the conditions provided in section 297A.25, 507.15 subdivision 18; 507.16 (2) purchase or use of any motor vehicle by any person who 507.17 was a resident of another state or country at the time of the 507.18 purchase and who subsequently becomes a resident of Minnesota, 507.19 provided the purchase occurred more than 60 days prior to the 507.20 date such person began residing in the state of Minnesota and 507.21 the motor vehicle was registered in the person's name in the 507.22 other state or country; 507.23 (3) purchase or use of any motor vehicle by any person 507.24 making a valid election to be taxed under the provisions of 507.25 section 297A.211; 507.26 (4) purchase or use of any motor vehicle previously 507.27 registered in the state of Minnesota when such transfer 507.28 constitutes a transfer within the meaning of section 118, 331, 507.29 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 507.30 1563(a) of the Internal Revenue Code of 1986, as amended through 507.31 December 31, 1999; 507.32 (5) purchase or use of any vehicle owned by a resident of 507.33 another state and leased to a Minnesota based private or for 507.34 hire carrier for regular use in the transportation of persons or 507.35 property in interstate commerce provided the vehicle is titled 507.36 in the state of the owner or secured party, and that state does 508.1 not impose a sales tax or sales tax on motor vehicles used in 508.2 interstate commerce; 508.3 (6) purchase or use of a motor vehicle by a private 508.4 nonprofit or public educational institution for use as an 508.5 instructional aid in automotive training programs operated by 508.6 the institution. "Automotive training programs" includes motor 508.7 vehicle body and mechanical repair courses but does not include 508.8 driver education programs; 508.9 (7) purchase of a motor vehicle for use as an ambulance by 508.10 an ambulance service licensed under section 144E.10; 508.11 (8) purchase of a motor vehicle by or for a public library, 508.12 as defined in section 134.001, subdivision 2, as a bookmobile or 508.13 library delivery vehicle; 508.14 (9) purchase of a ready-mixed concrete truck; 508.15 (10) purchase or use of a motor vehicle by a town for use 508.16 exclusively for road maintenance, including snowplows and dump 508.17 trucks, but not including automobiles, vans, or pickup trucks; 508.18 (11) purchase or use of a motor vehicle by a corporation, 508.19 society, association, foundation, or institution organized and 508.20 operated exclusively for charitable, religious, or educational 508.21 purposes, except a public school, university, or library, but 508.22 only if the vehicle is: 508.23 (i) a truck, as defined in section 168.011, a bus, as 508.24 defined in section 168.011, or a passenger automobile, as 508.25 defined in section 168.011, if the automobile is designed and 508.26 used for carrying more than nine persons including the driver; 508.27 and 508.28 (ii) intended to be used primarily to transport tangible 508.29 personal property or individuals, other than employees, to whom 508.30 the organization provides service in performing its charitable, 508.31 religious, or educational purpose. 508.32[EFFECTIVE DATE.] This section is effective the day 508.33 following final enactment, except that the change to paragraph 508.34 (11) is effective for sales and purchases occurring after June 508.35 30, 2000. 508.36 Sec. 9. [297F.185] [REVOCATION OF SALES AND USE TAX 509.1 PERMITS.] 509.2 If a person fails to comply with this chapter, or the rules 509.3 related to cigarette and tobacco products, the commissioner may 509.4 revoke the person's sales and use tax permit as provided in 509.5 section 297A.86. 509.6[EFFECTIVE DATE.] This section is effective for violations 509.7 occurring on or after July 1, 2001. 509.8 Sec. 10. [REPEALER.] 509.9 Minnesota Statutes 2000, section 297B.032, is repealed. 509.10[EFFECTIVE DATE.] This section is effective the day 509.11 following final enactment. 509.12 ARTICLE 23 509.13 DEPARTMENT SPECIAL TAXES 509.14 Section 1. Minnesota Statutes 2000, section 287.08, is 509.15 amended to read: 509.16 287.08 [TAX, HOW PAYABLE; RECEIPTS.] 509.17 (a) The tax imposed by sections 287.01 to 287.12 must be 509.18 paid to the treasurer of any county in this state in which the 509.19 real property or some part is located at or before the time of 509.20 filing the mortgage for record. The treasurer shall endorse 509.21 receipt on the mortgage and the receipt is conclusive proof that 509.22 the tax has been paid in the amount stated and authorizes any 509.23 county recorder or registrar of titles to record the mortgage. 509.24 Its form, in substance, shall be "registration tax hereon of 509.25 ..................... dollars paid." If the mortgage is exempt 509.26 from taxation the endorsement shall, in substance, be "exempt 509.27 from registration tax." In either case the receipt must be 509.28 signed by the treasurer. In case the treasurer is unable to 509.29 determine whether a claim of exemption should be allowed, the 509.30 tax must be paid as in the case of a taxable mortgage. 509.31 (b)Upon written application of the taxpayer,The county 509.32 treasurer may refund in whole or in part any mortgage registry 509.33 taxthat has been erroneously paid, or a person having paid a509.34mortgage registry tax amount may seek a refund of the tax, or509.35other appropriate relief,overpayment if a written application 509.36 by the taxpayer is submitted to the county treasurer within 510.1 three and one-half years from the date of the overpayment. If 510.2 the county has not issued a denial of the application, the 510.3 taxpayer may bring an action in tax court in the county in which 510.4 the tax was paid at any time after the expiration of six months 510.5 from the time that the application was submitted. A denial of 510.6 refund may be appealed within 60 days from the date of the 510.7 denial by bringing an action in tax court in the county in which 510.8 the tax was paid, within 60 days of the payment. The action is 510.9 commenced by the serving of a petition for relief on the county 510.10 treasurer, and by filing a copy with the court. The county 510.11 attorney shall defend the action. The county treasurer shall 510.12 notify the treasurer of each county that has or would receive a 510.13 portion of the tax as paid. 510.14 (c) If the county treasurer determines a refund should be 510.15 paid, or if a refund is ordered by the court, the county 510.16 treasurer of each county that actually received a portion of the 510.17 tax shall immediately pay a proportionate share of three percent 510.18 of the refund using any available county funds. The county 510.19 treasurer of each county that received, or would have received, 510.20 a portion of the tax shall also pay their county's proportionate 510.21 share of the remaining 97 percent of the court-ordered refund on 510.22 or before the 20th day of the following month using solely the 510.23 mortgage registry tax funds that would be paid to the 510.24 commissioner of revenue on that date under section 287.12. If 510.25 the funds on hand under this procedure are insufficient to fully 510.26 fund 97 percent of the court-ordered refund, the county 510.27 treasurer of the county in which the action was brought shall 510.28 file a claim with the commissioner of revenue under section 510.29 16A.48 for the remaining portion of 97 percent of the refund, 510.30 and shall pay over the remaining portion upon receipt of a 510.31 warrant from the state issued pursuant to the claim. 510.32 (d) When any mortgage covers real property located in more 510.33 than one county in this state the total tax must be paid to the 510.34 treasurer of the county where the mortgage is first presented 510.35 for recording, and the payment must be receipted as provided in 510.36 paragraph (a). If the principal debt or obligation secured by 511.1 such a multiple county mortgage exceeds $1,000,000, the nonstate 511.2 portion of the tax must be divided and paid over by the county 511.3 treasurer receiving it, on or before the 20th day of each month 511.4 after receipt, to the county or counties entitled in the ratio 511.5 that the market value of the real property covered by the 511.6 mortgage in each county bears to the market value of all the 511.7 real property in this state described in the mortgage. In 511.8 making the division and payment the county treasurer shall send 511.9 a statement giving the description of the real property 511.10 described in the mortgage and the market value of the part 511.11 located in each county. For this purpose, the treasurer of any 511.12 county may require the treasurer of any other county to certify 511.13 to the former the market valuation of any tract of real property 511.14 in any mortgage. 511.15[EFFECTIVE DATE.] This section is effective for 511.16 overpayments made on or after July 1, 2001. 511.17 Sec. 2. Minnesota Statutes 2000, section 287.20, 511.18 subdivision 9, is amended to read: 511.19 Subd. 9. [REORGANIZATION.] "Reorganization" means the 511.20 transfer of substantially all of the assets of a corporation, a 511.21 limited liability company, or a partnership not in the usual or 511.22 regular course of business if at the time of the transfer the 511.23 transfer qualifies as: (i) a corporate reorganization under 511.24 section 368(a) of the Internal Revenue Code of 1986, as amended 511.25 through December 31, 2000; or (ii) a transfer pursuant to the 511.26 continuation of an existing partnership under section 708 of the 511.27 Internal Revenue Code of 1986, as amended through December 31, 511.28 2000. 511.29[EFFECTIVE DATE.] This section is effective for taxable 511.30 deeds recorded or registered on or after July 1, 2001. 511.31 Sec. 3. Minnesota Statutes 2000, section 287.28, is 511.32 amended to read: 511.33 287.28 [REFUNDS OR REDEMPTION.] 511.34 (a) The county treasurer mayrefund in whole or in part any511.35tax which has been erroneously paid and may allow for orredeem 511.36such of thestamps,issued under the authority of sections 512.1 287.20 to 287.31as maythat have been spoiled, destroyed, or 512.2 rendered useless or unfit for the purpose intended or for which 512.3 the owner may have no use or which through mistake may have been 512.4 improperly or unnecessarily used.Such orderRedemption shall 512.5 be made only upon written application of the taxpayer. 512.6 (b)A person having paid a deed tax amount may seek a512.7refund of the tax, or other appropriate relief,The county 512.8 treasurer may refund any deed tax overpayment if a written 512.9 application by the taxpayer is submitted to the county treasurer 512.10 within three and one-half years from the date of the 512.11 overpayment. If the county has not issued a denial of the 512.12 application, the taxpayer may bring an action in tax court in 512.13 the county in which the tax was paid at any time after the 512.14 expiration of six months from the time that the application was 512.15 submitted. A denial of refund may be appealed within 60 days 512.16 from the date of the denial by commencing an action in tax court 512.17 in the county where the tax was paid, within 60 days of the512.18payment. The action is commenced by serving a petition for 512.19 relief on the county treasurer, and filing a copy with the 512.20 court. The county attorney shall defend the action. The county 512.21 treasurer shall notify the treasurer of each county that has, or 512.22 would receive a portion of the tax as paid. Any refund of deed 512.23 tax which the county treasurer determines should be made, and 512.24 any court ordered refund of deed tax, shall be accomplished 512.25 using the refund procedures in section 287.08. 512.26[EFFECTIVE DATE.] This section is effective for 512.27 overpayments made on or after July 1, 2001. 512.28 Sec. 4. Minnesota Statutes 2000, section 295.50, 512.29 subdivision 3, is amended to read: 512.30 Subd. 3. [GROSS REVENUES.] "Gross revenues" are total 512.31 amounts received in money or otherwise by: 512.32 (1) a hospital for patient services; 512.33 (2) a surgical center for patient services; 512.34 (3) a health care provider, other than a staff model health 512.35 carrier, for patient services; 512.36 (4) a wholesale drug distributor for sale or distribution 513.1 of legend drugs that are delivered in Minnesota by the wholesale 513.2 drug distributor, by common carrier, or by mail, unless the 513.3 legend drugs are delivered to another wholesale drug distributor 513.4 who sells legend drugs exclusively at wholesale. Legend drugs 513.5 do not include nutritional products as defined in Minnesota 513.6 Rules, part 9505.0325; and 513.7 (5) a staff model health plan company as gross premiums for 513.8 enrollees, copayments, deductibles, coinsurance, and fees for 513.9 patient servicescovered under its contracts with groups and513.10enrollees. 513.11[EFFECTIVE DATE.] This section is effective the day 513.12 following final enactment. 513.13 Sec. 5. Minnesota Statutes 2000, section 295.50, 513.14 subdivision 4, is amended to read: 513.15 Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care 513.16 provider" means: 513.17 (1) a person whose health care occupation is regulated or 513.18 required to be regulated by the state of Minnesota furnishing 513.19 any or all of the following goods or services directly to a 513.20 patient or consumer: medical, surgical, optical, visual, 513.21 dental, hearing, nursing services, drugs, laboratory, diagnostic 513.22 or therapeutic services; 513.23 (2) a person who provides goods and services not listed in 513.24 clause (1) that qualify for reimbursement under the medical 513.25 assistance program provided under chapter 256B; 513.26 (3) a staff model health plan company; 513.27 (4) an ambulance service required to be licensed; or 513.28 (5) a person who sells or repairs hearing aids and related 513.29 equipment or prescription eyewear. 513.30 (b) Health care provider does not include: 513.31 (1) hospitals; medical supplies distributors, except as 513.32 specified under paragraph (a), clause (5); nursing homes 513.33 licensed under chapter 144A or licensed in any other 513.34 jurisdiction; pharmacies; surgical centers; bus and taxicab 513.35 transportation, or any other providers of transportation 513.36 services other than ambulance services required to be licensed; 514.1 supervised living facilities for persons with mental retardation 514.2 or related conditions, licensed under Minnesota Rules, parts 514.3 4665.0100 to 4665.9900; residential care homes licensed under 514.4 chapter 144B; board and lodging establishments providing only 514.5 custodial services that are licensed under chapter 157 and 514.6 registered under section 157.17 to provide supportive services 514.7 or health supervision services; adult foster homes as defined in 514.8 Minnesota Rules, part 9555.5105; day training and habilitation 514.9 services for adults with mental retardation and related 514.10 conditions as defined in section 252.41, subdivision 3;and514.11 boarding care homes, as defined in Minnesota Rules, part 514.12 4655.0100; and adult day care centers as defined in Minnesota 514.13 Rules, part 9555.9600; 514.14 (2) home health agencies as defined in Minnesota Rules, 514.15 part 9505.0175, subpart 15; a person providing personal care 514.16 services and supervision of personal care services as defined in 514.17 Minnesota Rules, part 9505.0335; a person providing private duty 514.18 nursing services as defined in Minnesota Rules, part 9505.0360; 514.19 and home care providers required to be licensed under chapter 514.20 144A; 514.21 (3) a person who employs health care providers solely for 514.22 the purpose of providing patient services to its employees; and 514.23 (4) an educational institution that employs health care 514.24 providers solely for the purpose of providing patient services 514.25 to its students if the institution does not receive fee for 514.26 service payments or payments for extended coverage. 514.27[EFFECTIVE DATE.] This section is effective for gross 514.28 revenues received on or after January 1, 2002. 514.29 Sec. 6. Minnesota Statutes 2000, section 295.50, 514.30 subdivision 15, is amended to read: 514.31 Subd. 15. [LEGEND DRUG.] "Legend drug" means alegenddrug 514.32as defined in section 151.01, subdivision 17that is required by 514.33 federal law to bear one of the following statements: "Caution: 514.34 Federal law prohibits dispensing without prescription" or "Rx 514.35 only". 514.36[EFFECTIVE DATE.] This section is effective the day 515.1 following final enactment. 515.2 Sec. 7. Minnesota Statutes 2000, section 295.52, 515.3 subdivision 4, is amended to read: 515.4 Subd. 4. [USE TAX; PRESCRIPTION DRUGS.] (a) A person that 515.5 receives prescription drugs for resale or use in Minnesota, 515.6 other than from a wholesale drug distributor thatpaid theis 515.7 subject to tax under subdivision 3, is subject to a tax equal to 515.8 the price paid to the wholesale drug distributor multiplied by 515.9 the tax percentage specified in this section. Liability for the 515.10 tax is incurred when prescription drugs are received or 515.11 delivered in Minnesota by the person. 515.12 (b) A person that receives prescription drugs for use in 515.13 Minnesota from a nonresident pharmacy required to be registered 515.14 under section 151.19 is subject to a tax equal to the price paid 515.15 by the nonresident pharmacy to the wholesale drug distributor or 515.16 the price received by the nonresident pharmacy, whichever is 515.17 lower, multiplied by the tax percentage specified in this 515.18 section. Liability for the tax is incurred when prescription 515.19 drugs are received in Minnesota by the person. 515.20[EFFECTIVE DATE.] This section is effective the day 515.21 following final enactment. 515.22 Sec. 8. Minnesota Statutes 2000, section 295.57, 515.23 subdivision 1, is amended to read: 515.24 Subdivision 1. [APPLICATION OF OTHER CHAPTERS.] Unless 515.25 specifically provided otherwise by sections 295.50 to 295.59, 515.26 the enforcement, interest,and penalty provisions under chapter515.27294,appealprovisions in sections 289A.43 and 289A.65, criminal 515.28 penaltiesin section 289A.63, and refunds provisions insection515.29289A.50chapter 289A, civil penalty provisions applicable to 515.30 withholding and sales taxes under section 289A.60, and 515.31 collection and rulemaking provisions under chapter 270, apply to 515.32a liability for thetaxes imposed under sections 295.50 to 515.33 295.59. 515.34[EFFECTIVE DATE.] This section is effective the day 515.35 following final enactment. 515.36 Sec. 9. Minnesota Statutes 2000, section 296A.16, 516.1 subdivision 2, is amended to read: 516.2 Subd. 2. [FUEL USED IN OTHER VEHICLE; CLAIM FOR REFUND.] 516.3 Any person whoshall buybuys anduseuses gasoline for a 516.4 qualifying purpose other than use in motor vehicles, snowmobiles 516.5 except as provided in clause (2), or motorboats, or special fuel 516.6 for a qualifying purpose other than use in licensed motor 516.7 vehicles, and whoshall havepaid the tax directly or indirectly 516.8 through the amount of the tax being included in the price of the 516.9 gasoline or special fuel, or otherwise, shall be reimbursed and 516.10 repaid the amount of the tax paid upon filing with the 516.11 commissioner a claim for refund in the form and manner 516.12 prescribed by the commissioner, and containing the information 516.13 the commissioner shall require. By signing any such claim which 516.14 is false or fraudulent, the applicant shall be subject to the 516.15 penalties provided in this chapter for knowingly making a false 516.16 claim. The claim shall set forth the total amount of the 516.17 gasoline so purchased and used by the applicant other than in 516.18 motor vehicles, or special fuel purchased and used by the 516.19 applicant other than in licensed motor vehicles, and shall state 516.20 when and for what purpose it was used. When a claim contains an 516.21 error in computation or preparation, the commissioner is 516.22 authorized to adjust the claim in accordance with the evidence 516.23 shown on the claim or other information available to the 516.24 commissioner. The commissioner, on being satisfied that the 516.25 claimant is entitled to the payments, shall approve the claim 516.26 and transmit it to the commissioner of finance. The words 516.27 "gasoline" or "special fuel" as used in this subdivision do not 516.28 include aviation gasoline or special fuel for aircraft. 516.29 Gasoline or special fuel bought and used for a "qualifying 516.30 purpose" means: 516.31 (1) Gasoline or special fuel used in carrying on a trade or 516.32 business, used on a farm situated in Minnesota, and used for a 516.33 farming purpose. "Farm" and "farming purpose" have the meanings 516.34 given them in section 6420(c)(2), (3), and (4) of the Internal 516.35 Revenue Code of 1986, as amended through December 31, 1997. 516.36 (2) Gasoline or special fuel used for off-highway business 517.1 use. "Off-highway business use" means any use off the public 517.2 highway by a person in that person's trade, business, or 517.3 activity for the production of income. Off-highway business use 517.4 includes: 517.5 (i) use of a passenger snowmobile off the public highways 517.6 as part of the operations of a resort as defined in section 517.7 157.15, subdivision 11; and 517.8 (ii) use of gasoline or special fuel to operate a power 517.9 takeoff unit on a vehicle, but not including fuel consumed 517.10 during idling time. 517.11 Off-highway business use does not include: 517.12 (i) use as a fuel in a motor vehicle which, at the time of 517.13 use, is registered or is required to be registered for highway 517.14 use under the laws of any state or foreign country; or 517.15 (ii) use of a licensed motor vehicle fuel tank in lieu of a 517.16 separate storage tank for storing fuel to be used for a 517.17 qualifying purpose, as defined in this section. Fuel purchased 517.18 to be used for a qualifying purpose cannot be placed in the fuel 517.19 tank of a licensed motor vehicle and must be stored in a 517.20 separate supply tank. 517.21 (3) Gasoline or special fuel placed in the fuel tanks of 517.22 new motor vehicles, manufactured in Minnesota, and shipped by 517.23 interstate carrier to destinations in other states or foreign 517.24 countries. 517.25By July 1, 1998, the commissioner shall adopt rules that517.26determine the rates and percentages necessary to develop517.27formulas for calculating the refund under clause (2), item (ii).517.28[EFFECTIVE DATE.] This section is effective the day 517.29 following final enactment. 517.30 Sec. 10. [296A.201] [ASSESSMENTS.] 517.31 Subdivision 1. [GENERAL RULE.] The commissioner may make 517.32 determinations, corrections, and assessments with respect to any 517.33 tax or fee under this chapter, including interest, additions to 517.34 taxes and fees, and assessable penalties. 517.35 Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails 517.36 to file a required return, the commissioner, from information in 518.1 the commissioner's possession or obtainable by the commissioner, 518.2 may make a return for the taxpayer. The return is prima facie 518.3 correct and valid. The commissioner may use statistical or 518.4 other sampling techniques consistent with generally accepted 518.5 auditing standards in examining returns or records and making 518.6 assessments. 518.7 Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 518.8 TAXPAYER.] (a) If a return has been filed and the commissioner 518.9 determines that the tax or fee disclosed by the return is 518.10 different than the tax or fee determined by the examination, the 518.11 commissioner shall send an order of assessment to the taxpayer. 518.12 If no return has been filed, the commissioner may make a return 518.13 for the taxpayer under subdivision 2 or may send an order of 518.14 assessment under this subdivision. The order must explain the 518.15 basis for the assessment and must explain the taxpayer's appeal 518.16 rights. An order of assessment is final when made but may be 518.17 reconsidered by the commissioner under section 296A.25. 518.18 (b) Penalties under this chapter are not imposed and no 518.19 collection action can be taken, including the filing of liens 518.20 under section 270.69, if the amount shown on the order is paid 518.21 to the commissioner: 518.22 (1) within 60 days after notice of the amount and demand 518.23 for its payment have been mailed to the taxpayer by the 518.24 commissioner; or 518.25 (2) if an administrative appeal is filed under this 518.26 chapter, or a tax court appeal is filed under chapter 271, 518.27 within 60 days following final determination of the appeal if 518.28 the appeal is based upon a constitutional challenge to the tax 518.29 or fee, and if not, when the decision of the tax court is made. 518.30 Subd. 4. [ERRONEOUS REFUNDS.] An erroneous refund is 518.31 considered an underpayment of tax or fee on the date made. An 518.32 assessment of a deficiency arising out of an erroneous refund 518.33 may be made at any time within two years from the making of the 518.34 refund. If part of the refund was induced by fraud or 518.35 misrepresentation of a material fact, the assessment may be made 518.36 at any time. 519.1 Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or 519.2 assessment of tax or fee made by the commissioner is prima facie 519.3 correct and valid. The taxpayer has the burden of establishing 519.4 its incorrectness or invalidity in any related action or 519.5 proceeding. 519.6 Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The 519.7 commissioner, on examining returns of a taxpayer for more than 519.8 one year or period, may issue one order covering the period 519.9 under examination that reflects the aggregate refund or 519.10 additional tax or fee due. 519.11 Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment, 519.12 sent postage prepaid by United States mail to the taxpayer at 519.13 the taxpayer's last known address, is sufficient even if the 519.14 taxpayer is deceased or is under a legal disability, or, in the 519.15 case of a corporation, even if the corporation has terminated 519.16 its existence, unless the department has been provided with a 519.17 new address by a party authorized to receive notices of 519.18 assessment. 519.19[EFFECTIVE DATE.] This section is effective the day 519.20 following final enactment. 519.21 Sec. 11. Minnesota Statutes 2000, section 296A.21, 519.22 subdivision 1, is amended to read: 519.23 Subdivision 1. [GENERALRULERULES.] (a) The commissioner 519.24 shall make determinations, corrections,andassessments, and 519.25 refunds with respect to taxes and fees under this chapter, 519.26 including interest, additions to taxes, and assessable 519.27 penalties. Except as otherwise provided in this section, the 519.28 amount of taxes assessable must be assessed within 3-1/2 years 519.29 after the date the return is filed. 519.30 (b) A claim for a refund of an overpayment of state tax or 519.31 fees must be filed within 3-1/2 years from the date prescribed 519.32 for filing the return, plus any extension of time granted for 519.33 filing the return, but only if filed within the extended time; 519.34 or the claim must be filed within one year from the date of an 519.35 order assessing tax or fees, or from the date of a return filed 519.36 by the commissioner, upon payment in full of the tax, fees, 520.1 penalties, and interest shown on the order or return, whichever 520.2 period expires later. 520.3[EFFECTIVE DATE.] This section is effective the day 520.4 following final enactment. 520.5 Sec. 12. Minnesota Statutes 2000, section 296A.21, 520.6 subdivision 4, is amended to read: 520.7 Subd. 4. [TIME LIMIT FORREPAYMENTCERTAIN REFUNDS.]No520.8repaymentNotwithstanding subdivision 1, paragraph (b), no 520.9 refund under section 296A.16, subdivision 2, shall be made 520.10 unless the claim for refund and invoiceshall beare filed with 520.11 the commissioner within one year from the date of purchase.The520.12postmark on the envelope in which a written claim is mailed520.13shall determine its date of filing.520.14[EFFECTIVE DATE.] This section is effective the day 520.15 following final enactment. 520.16 Sec. 13. Minnesota Statutes 2000, section 297F.16, 520.17 subdivision 4, is amended to read: 520.18 Subd. 4. [ERRONEOUS REFUNDSOR CREDITS.] An erroneous 520.19 refundor creditis considered an underpayment of tax on the 520.20 date made. An assessment of a deficiency arising out of an 520.21 erroneous refundor creditmust be made within3-1/2 years from520.22the date prescribed for filing the return, plus any extension of520.23time granted for filing the return, but only if filed within the520.24extended time, or two years from the time the tax is paid in520.25full, whichever period expires latertwo years from the making 520.26 of the refund. If part of the refund was induced by fraud or 520.27 misrepresentation of a material fact, the assessment may be made 520.28 at any time. 520.29[EFFECTIVE DATE.] This section is effective the day 520.30 following final enactment. 520.31 Sec. 14. Minnesota Statutes 2000, section 297G.15, 520.32 subdivision 4, is amended to read: 520.33 Subd. 4. [ERRONEOUS REFUNDSOR CREDITS.] An erroneous 520.34 refundor creditis considered an underpayment of tax on the 520.35 date made. An assessment of a deficiency arising out of an 520.36 erroneous refundor creditmust be made within3-1/2 years from521.1the date prescribed for filing the return, plus any extension of521.2time granted for filing the return, but only if filed within the521.3extended time, or two years from the time the tax is paid in521.4full, whichever period expires latertwo years from the making 521.5 of the refund. If part of the refund was induced by fraud or 521.6 misrepresentation of a material fact, the assessment may be made 521.7 at any time. 521.8[EFFECTIVE DATE.] This section is effective the day 521.9 following final enactment. 521.10 Sec. 15. Minnesota Statutes 2000, section 297G.16, 521.11 subdivision 5, is amended to read: 521.12 Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise 521.13 provided in this chapter, a claim for a refund of an overpayment 521.14 of tax must be filed within 3-1/2 years from the date prescribed 521.15 for filing the return, plus any extension of time granted for 521.16 filing the return, but only if filed within the extended time, 521.17or two years from the time the tax is paid in full, whichever521.18period expires later. Claimants under this section are subject521.19to the notice requirements of section 289A.38, subdivision 7or 521.20 within one year from the date of an order assessing tax or from 521.21 the date of a return filed by the commissioner, upon payment in 521.22 full of the tax, penalties, and interest shown on the order or 521.23 return made by the commissioner, whichever period expires later. 521.24[EFFECTIVE DATE.] This section is effective for returns 521.25 becoming due or orders assessing tax issued on or after the day 521.26 following final enactment. 521.27 Sec. 16. Minnesota Statutes 2000, section 297G.16, 521.28 subdivision 7, is amended to read: 521.29 Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 521.30 refund must be filed with the commissioner within one year of 521.31 the filing of the taxpayer's income tax return containing the 521.32 bad debt deduction that is being claimed. Claimants under this 521.33 subdivision are subject to the notice requirements of section 521.34 289A.38, subdivision 7. 521.35[EFFECTIVE DATE.] This section is effective the day 521.36 following final enactment. 522.1 Sec. 17. [297H.115] [USE TAX.] 522.2 Subdivision 1. [IMPOSITION; LIABILITY OF GENERATORS AND 522.3 SELF-HAULERS.] (a) A use tax is imposed on the sales price of 522.4 mixed municipal solid waste management services received by a 522.5 residential generator at the rate imposed under section 297H.02, 522.6 unless the tax imposed under section 297H.02 was paid. The 522.7 residential generator is liable. 522.8 (b) A use tax is imposed on the sales price of mixed 522.9 municipal solid waste management services received by a 522.10 commercial generator at the rate imposed under section 297H.03, 522.11 unless the tax imposed under section 297H.03 was paid. The 522.12 commercial generator is liable. 522.13 (c) A use tax is imposed on the volume of nonmixed 522.14 municipal solid waste that is managed at the rate imposed under 522.15 section 297H.04, unless the tax imposed under section 297H.04 522.16 was paid. The generator is liable. 522.17 (d) A use tax is imposed on the sales price of mixed 522.18 municipal solid waste management services received by a 522.19 self-hauler at the rate imposed under section 297H.05, paragraph 522.20 (a), unless the tax imposed under section 297H.05, paragraph 522.21 (a), was paid. The self-hauler is liable. 522.22 (e) A use tax is imposed on the volume of nonmixed 522.23 municipal solid waste managed at the rate imposed under section 522.24 297H.05, paragraph (b), unless the tax imposed under section 522.25 297H.05, paragraph (b), was paid. The self-hauler is liable. 522.26 Subd. 2. [PAYMENT; REPORTING.] A generator or self-hauler 522.27 that is liable under subdivision 1 shall report the use tax on a 522.28 return prescribed by the commissioner of revenue, and shall 522.29 remit the tax with the return. The return and the tax must be 522.30 filed using the filing cycle and due dates provided for taxes 522.31 imposed under chapter 297A. 522.32 Subd. 3. [COMMISSIONER ASSESSMENT.] (a) The commissioner 522.33 of revenue may not assess the generator or self-hauler a use tax 522.34 on a transaction for which the waste management service provider 522.35 has paid the solid waste management tax, except as provided in 522.36 paragraph (b). 523.1 (b) If the waste management service provider who is an 523.2 accrual basis taxpayer remits a payment and thereafter offsets 523.3 the amount as a bad debt under section 297H.09, the commissioner 523.4 of revenue may assess the generator or self-hauler a use tax for 523.5 the offset amount. 523.6[EFFECTIVE DATE.] This section is effective for services 523.7 received on or after July 1, 2001. 523.8 Sec. 18. Minnesota Statutes 2000, section 461.12, is 523.9 amended by adding a subdivision to read: 523.10 Subd. 8. [NOTICE TO COMMISSIONER.] The licensing authority 523.11 under this section shall, within 30 days of the issuance of a 523.12 license, inform the commissioner of revenue of the licensee's 523.13 name, address, trade name, and the effective and expiration 523.14 dates of the license. The commissioner of revenue must also be 523.15 informed of a license renewal, transfer, cancellation, 523.16 suspension, or revocation during the license period. 523.17[EFFECTIVE DATE.] This section is effective for licenses 523.18 issued, renewed, transferred, canceled, suspended, or revoked on 523.19 or after January 1, 2002. 523.20 Sec. 19. [REPEALER.] 523.21 Minnesota Statutes 2000, section 296A.16, subdivision 6, is 523.22 repealed. 523.23[EFFECTIVE DATE.] This section is effective the day 523.24 following final enactment. 523.25 ARTICLE 24 523.26 CIVIL AND CRIMINAL PENALTIES 523.27 Section 1. Minnesota Statutes 2000, section 289A.55, 523.28 subdivision 9, is amended to read: 523.29 Subd. 9. [INTEREST ON PENALTIES.] (a) A penalty imposed 523.30 under section 289A.60, subdivision 1, 2,3,2a, 4, 5, 6, or 21 523.31 bears interest from the date the return or payment was required 523.32 to be filed or paid, including any extensions, to the date of 523.33 payment of the penalty. 523.34 (b) A penalty not included in paragraph (a) bears interest 523.35 only if it is not paid within 60 days from the date of notice. 523.36 In that case interest is imposed from the date of notice to the 524.1 date of payment. 524.2[EFFECTIVE DATE.] This section is effective for tax years 524.3 beginning after December 31, 2000, and for estate tax returns 524.4 due after January 1, 2002. 524.5 Sec. 2. Minnesota Statutes 2000, section 289A.60, 524.6 subdivision 1, is amended to read: 524.7 Subdivision 1. [PENALTY FOR FAILURE TO PAY TAX.] (a)If a524.8tax other than a withholding or sales or use tax is not paid524.9within the time specified for payment, a penalty must be added524.10to the amount required to be shown as tax. The penalty is three524.11percent of the tax not paid on or before the date specified for524.12payment of the tax if the failure is for not more than 30 days,524.13with an additional penalty of three percent of the amount of tax524.14remaining unpaid during each additional 30 days or fraction of524.1530 days during which the failure continues, not exceeding 24524.16percent in the aggregate.If a corporate franchise, fiduciary 524.17 income, mining company, estate, partnership, S corporation, or 524.18 nonresident entertainer tax is not paid within the time 524.19 specified for payment, a penalty of six percent is added to the 524.20 unpaid tax, except that if a corporation or mining company meets 524.21 the requirements of section 289A.19, subdivision 2, the penalty 524.22 is not imposed. 524.23 (b) For the taxes listed in paragraph (a), in addition to 524.24 the penalty in that paragraph, whether imposed or not, if a 524.25 return or amended return is filed after the due date, without 524.26 regard to extensions, and any tax reported as remaining due is 524.27 not remitted with the return or amended return, a penalty of 524.28 five percent of the tax not paid is added to the tax. If the 524.29 commissioner issues an order assessing additional tax for a tax 524.30 listed in paragraph (a), and the tax is not paid within 60 days 524.31 after the mailing of the order or, if appealed, within 60 days 524.32 after final resolution of the appeal, a penalty of five percent 524.33 of the tax is added to the tax. 524.34 (c)If an individual files a state individual income tax524.35return and pays all of the state individual income tax with the524.36filing of a return within six months of the date the return is525.1due and the amount paid by the due date of the return is at525.2least 90 percent of the amount of tax due, as shown on the525.3return, the individual is presumed to have reasonable cause for525.4the late payment.If an individual income tax is not paid 525.5 within the time specified for payment, a penalty of four percent 525.6 is added to the unpaid tax. There is a presumption of 525.7 reasonable cause for the late payment if the individual: (i) 525.8 pays by the due date of the return at least 90 percent of the 525.9 amount of tax, after credits other than withholding and 525.10 estimated payments, shown owing on the return; (ii) files the 525.11 return within six months after the due date; and (iii) pays the 525.12 remaining balance of the reported tax when the return is filed. 525.13 (d) If the commissioner issues an order assessing 525.14 additional individual income tax, and the tax is not paid within 525.15 60 days after the mailing of the order or, if appealed, within 525.16 60 days after final resolution of the appeal, a penalty of four 525.17 percent of the unpaid tax is added to the tax. 525.18(b)(e) If a withholding or sales or use tax is not paid 525.19 within the time specified for payment, a penalty must be added 525.20 to the amount required to be shown as tax. The penalty is five 525.21 percent of the tax not paid on or before the date specified for 525.22 payment of the tax if the failure is for not more than 30 days, 525.23 with an additional penalty of five percent of the amount of tax 525.24 remaining unpaid during each additional 30 days or fraction of 525.25 30 days during which the failure continues, not exceeding 15 525.26 percent in the aggregate. 525.27[EFFECTIVE DATE.] This section is effective for tax years 525.28 beginning after December 31, 2000, and for estate tax returns 525.29 due after January 1, 2002. 525.30 Sec. 3. Minnesota Statutes 2000, section 289A.60, 525.31 subdivision 2, is amended to read: 525.32 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 525.33 a taxpayer fails to make and file areturn other than an income525.34tax return of an individual, a withholding return, or sales or525.35use tax return, within the time prescribed or an extension, a525.36penalty is added to the tax. The penalty is three percent of526.1the amount of tax not paid on or before the date prescribed for526.2payment of the tax including any extensions if the failure is526.3for not more than 30 days, with an additional five percent of526.4the amount of tax remaining unpaid during each additional 30526.5days or fraction of 30 days, during which the failure continues,526.6not exceeding 23 percent in the aggregate.526.7If a taxpayer fails to file an individual income tax return526.8within six months after the date prescribed for filing of the526.9return, a penalty of ten percent of the amount of tax not paid526.10by the end of that six-month period is added to the tax.526.11If a taxpayer fails to file a withholding or sales or use526.12 tax return within the time prescribed, including an extension, a 526.13 penalty of five percent of the amount of tax nottimelypaid by 526.14 the end of that period is added to the tax. 526.15[EFFECTIVE DATE.] This section is effective for tax years 526.16 beginning after December 31, 2000, and for estate tax returns 526.17 due after January 1, 2002. 526.18 Sec. 4. Minnesota Statutes 2000, section 289A.60, is 526.19 amended by adding a subdivision to read: 526.20 Subd. 2a. [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an 526.21 individual income tax is not paid within 180 days after the date 526.22 of filing of a return or, in the case of taxes assessed by the 526.23 commissioner, within 180 days after the assessment date or, if 526.24 appealed, within 180 days after final resolution of the appeal, 526.25 an extended delinquency penalty of five percent of the tax 526.26 remaining unpaid is added to the amount due. 526.27 (b) If a corporate franchise, fiduciary income, mining 526.28 company, estate, partnership, S corporation, or nonresident 526.29 entertainer tax return is not filed within 30 days after written 526.30 demand for the filing of a delinquent return, an extended 526.31 delinquency penalty of five percent of the tax not paid prior to 526.32 the demand is added to the tax, or in the case of an individual 526.33 income tax return, a minimum penalty of $100 or the five percent 526.34 penalty is imposed, whichever amount is greater. 526.35[EFFECTIVE DATE.] This section is effective for tax years 526.36 beginning after December 31, 2000, and for estate tax returns 527.1 due after January 1, 2002. 527.2 Sec. 5. Minnesota Statutes 2000, section 289A.60, 527.3 subdivision 7, is amended to read: 527.4 Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] Ifan individual527.5 a taxpayer files what purports to be a tax returnrequired by527.6chapter 290or a claim for refund but which does not contain 527.7 information on which the substantial correctness of 527.8 theassessmentpurported return or claim for refund may be 527.9 judged or contains information that on its face shows that the 527.10assessmentpurported return or claim for refund is substantially 527.11 incorrect and the conduct is due to a position that is frivolous 527.12 or a desire that appears on the purported return or claim for 527.13 refund to delay or impede the administration of Minnesota tax 527.14 laws, then the individual shall pay a penalty of $500. In a 527.15 proceeding involving the issue of whether or not a person is 527.16 liable for this penalty, the burden of proof is on the 527.17 commissioner. 527.18[EFFECTIVE DATE.] This section is effective for returns or 527.19 claims for refunds filed on or after the day following final 527.20 enactment. 527.21 Sec. 6. Minnesota Statutes 2000, section 297F.20, 527.22 subdivision 3, is amended to read: 527.23 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 527.24 person who files with the commissioner a return, report, or 527.25 other document, or who maintains or provides invoices subject to 527.26 review by the commissioner under this chapter, known by the 527.27 person to be fraudulent or false concerning a material matter, 527.28 is guilty of a felony. 527.29 (b) A person who knowingly aids or assists in, or advises 527.30 in the preparation or presentation of a return, report, invoice, 527.31 or other document that is fraudulent or false concerning a 527.32 material matter, whether or not the falsity or fraud is 527.33 committed with the knowledge or consent of the person authorized 527.34 or required to present the return, report, invoice, or other 527.35 document, is guilty of a felony. 527.36[EFFECTIVE DATE.] This section is effective for crimes 528.1 occurring on or after July 1, 2001. 528.2 Sec. 7. [APPROPRIATION.] 528.3 $545,000 in fiscal year 2002 and $25,000 in fiscal year 528.4 2003 is appropriated from the general fund to the commissioner 528.5 of revenue to implement sections 2 to 4. $520,000 of the 528.6 appropriation in fiscal year 2002 is for a one-time expenditure 528.7 related to system programming costs. This appropriation is 528.8 available for expenditure until June 30, 2003. 528.9[EFFECTIVE DATE.] This section is effective July 1, 2001. 528.10 Sec. 8. [REPEALER.] 528.11 Minnesota Statutes 2000, section 289A.60, subdivision 3, is 528.12 repealed. 528.13[EFFECTIVE DATE.] This section is effective for tax years 528.14 beginning after December 31, 2000, and for estate tax returns 528.15 due after January 1, 2002. 528.16 ARTICLE 25 528.17 SEIZURES OF CONTRABAND 528.18 Section 1. Minnesota Statutes 2000, section 296A.24, 528.19 subdivision 1, is amended to read: 528.20 Subdivision 1. [SEIZURE.] The commissioner or authorized 528.21 agents may seize gasoline or special fuel being transported for 528.22 delivery in violation of section 296A.03, subdivision 1, and any 528.23 vehicle or other method of conveyance used for transporting the 528.24 gasoline or special fuel. Any untaxed motor vehicle fuel that 528.25 is received by a person other than a licensee is subject to 528.26 seizure along with the vehicle or other means of transportation 528.27 used to transport the motor vehicle fuel. Any motor vehicle 528.28 fuel, along with the transporting vehicle, brought into the 528.29 state of Minnesota by a transporter for use, distribution, 528.30 storage, or sale that is not supported by a manifest, bill of 528.31 lading, or invoice, reflecting the licensed distributor 528.32 responsible for the tax and/or fees is subject to seizure by the 528.33 Minnesota department of revenue. Property seized under this 528.34 subdivision is subject to forfeiture as provided insubdivisions528.35 subdivision 2and 3. 528.36[EFFECTIVE DATE.] This section is effective for seizures 529.1 made on or after July 1, 2001. 529.2 Sec. 2. Minnesota Statutes 2000, section 296A.24, 529.3 subdivision 2, is amended to read: 529.4 Subd. 2. [DISPOSITION OF SEIZED PROPERTY.] (a) Within ten 529.5 days after the seizureof gasoline or special fuel, the person 529.6 making the seizure shalldeliverserve by certified mail an 529.7 inventory of the vehicle or property seizedtoon the person 529.8 from whom the seizure was made, if known, and on any person 529.9 known or believed to have any right, title, interest, or lien on 529.10 the vehicle or property, at the last known address, and file a 529.11 copy withthe office ofthe commissioner. The notice must 529.12 include an explanation of the right to demand a judicial 529.13 forfeiture determination. 529.14 (b) Withinten60 days after the date of service of the 529.15 inventory, which is the date of mailing, the person from whom 529.16 the vehicle or property was seized or any person claiming an 529.17 interest inthe propertyit may filewith the commissionera 529.18 demand for a judicial determination of whether the vehicle or 529.19 property was lawfully subject to seizure and forfeiture.The529.20commissioner, within 60 days of demand for a judicial529.21determination, shall begin an action in the district court of529.22the county where the seizure was made to determine the issue of529.23forfeiture.529.24(b) The action must be brought in the name of the state and529.25prosecuted by the county attorney or by the attorney529.26general.The demand must be in the form of a civil complaint 529.27 and must be filed with the court administrator in the county in 529.28 which the seizure occurred, together with proof of service of a 529.29 copy of the complaint on the commissioner of revenue, and the 529.30 standard filing fee for civil actions unless the petitioner has 529.31 the right to sue in forma pauperis under section 563.01. If the 529.32 value of the seized property or vehicle is $7,500 or less, the 529.33 claimant may file an action in conciliation court for its 529.34 recovery. If the value of the seized property or vehicle is 529.35 less than $500, the claimant does not have to pay the 529.36 conciliation court filing fee. 530.1 (c) The complaint must be captioned in the name of the 530.2 claimant as plaintiff and the seized property or vehicle as 530.3 defendant, and must state with specificity the grounds on which 530.4 the claimant alleges the property or vehicle was improperly 530.5 seized and the plaintiff's interest in the property or vehicle 530.6 seized. No responsive pleading is required of the commissioner 530.7 and no court fees may be charged for the commissioner's 530.8 appearance in the matter. The proceedings are governed by the 530.9 Rules of Civil Procedure. Notwithstanding any law to the 530.10 contrary, an action for the return of property or a vehicle 530.11 seized under this section may not be maintained by or on behalf 530.12 of any person who has been served with an inventory unless the 530.13 person has complied with this subdivision. The court shall hear 530.14 the action without a jury and shall try and determine the issues 530.15 of fact and law involved. 530.16(c)(d) When a judgment of forfeiture is entered, the 530.17 commissioner may, unless the judgment is stayed pending an 530.18 appeal, either: 530.19 (1) cause the forfeitedpropertygasoline or special fuel 530.20 to be destroyed; or 530.21 (2) causeitthe forfeited property in clause (1) or 530.22 vehicle to be sold at public auction as provided by 530.23 law.Proceeds of a sale, after deducting the expense of keeping530.24the gasoline or special fuel and costs of the sale, must be paid530.25into the state treasury. The commissioner shall reimburse530.26designees for costs incurred.After deducting the expense of 530.27 keeping the property and vehicle and the costs of the sale, the 530.28 commissioner shall pay from the funds collected all liens 530.29 according to their priority, which are established as being bona 530.30 fide and as existing without the lienor having any notice or 530.31 knowledge that the property or vehicle was being used or was 530.32 intended to be used for or in connection with any violation, and 530.33 shall pay the balance of the proceeds into the general fund. 530.34(d) If a demand for judicial determination is made and no530.35action is commenced as provided in this subdivision, the530.36property must be released by the commissioner and redelivered to531.1the person entitled to it.(e) If no demand for judicial 531.2 determination is made, the property or vehicle seized must be 531.3 considered forfeited to the state by operation of law and may be 531.4 disposed of by the commissioner as provided where there has been 531.5 a judgment of forfeiture.When the commissioner is satisfied531.6that a person from whom property is seized under this chapter531.7was acting in good faith and without intent to evade the tax,531.8the commissioner shall release the property seized, without531.9further legal proceedings.531.10[EFFECTIVE DATE.] This section is effective for seizures 531.11 made on or after July 1, 2001. 531.12 Sec. 3. Minnesota Statutes 2000, section 297A.91, is 531.13 amended to read: 531.14 297A.91 [SEIZURE; COURT REVIEW.] 531.15 Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL 531.16 TRANSPORT.] (a) If the retailer does not have a sales or use tax 531.17 permit and has been engaging in transporting personal property 531.18 into the state without payment of the tax, the commissioner of 531.19 revenue or the commissioner's agents may seize in the name of 531.20 the state any truck, automobile, or means of transportation not 531.21 owned or operated by a common carrier, used in the illegal 531.22 importation and transportation of any tangible personal property 531.23 by a retailer or the retailer's agent or employee. The 531.24 commissioner may demand the forfeiture and sale of the truck, 531.25 automobile, or other means of transportation together with the 531.26 property being transported illegally, unless the owner 531.27 establishes to the satisfaction of the commissioner or the court 531.28 that the owner had no notice or knowledge or reason to believe 531.29 that the vehicle was used or intended to be used in any such 531.30 violation. 531.31 (b) Withintwoten days after the seizure, the person 531.32 making the seizure shalldeliverserve by certified mail an 531.33 inventory of the vehicle and property seizedtoon the person 531.34 from whom the seizure was made, if known, andtoon any person 531.35 known or believed to have any right, title, interest, or lien on 531.36 the vehicle or property, at the last known address. The person 532.1 making the seizure shall also file a copy of the inventory with 532.2 the commissioner. The notice must include an explanation of the 532.3 right to demand a judicial forfeiture determination. 532.4 Subd. 2. [COURT REVIEW OF FORFEITURE.] (a) Withinten60 532.5 days after the date of service of the inventory, which is the 532.6 date of mailing, the person from whom the vehicle and property 532.7 were seized or any person claiming an interest in the vehicle or 532.8 property may filewith the commissionera demand for a judicial 532.9 determination of the question of whether the vehicle or property 532.10 was lawfully subject to seizure and forfeiture.The532.11commissioner, within 30 days, shall institute an action in the532.12district court of the county where the seizure was made to532.13determine the issue of forfeiture.532.14 (b)The action must be brought in the name of the state and532.15prosecuted by the county attorney or the attorney general.The 532.16 demand must be in the form of a civil complaint and must be 532.17 filed with the court administrator in the county in which the 532.18 seizure occurred, together with proof of service or a copy of 532.19 the complaint on the commissioner of revenue, and the standard 532.20 filing fee for civil actions unless the petitioner has the right 532.21 to sue in forma pauperis under section 563.01. If the value of 532.22 the seized property or vehicle is $7,500 or less, the claimant 532.23 may file an action in conciliation court for its recovery. If 532.24 the value of the seized property or vehicle is less than $500, 532.25 the claimant does not have to pay the conciliation court filing 532.26 fee. 532.27 (c) The complaint must be captioned in the name of the 532.28 claimant as plaintiff and the seized property or vehicle as 532.29 defendant, and must state with specificity the grounds on which 532.30 the claimant alleges the property or vehicle was improperly 532.31 seized and the plaintiff's interest in the property or vehicle 532.32 seized. No responsive pleading is required of the commissioner, 532.33 and no court fees may be charged for the commissioner's 532.34 appearance in the matter. The proceedings are governed by the 532.35 Rules of Civil Procedure. Notwithstanding any law to the 532.36 contrary, an action for the return of property or a vehicle 533.1 seized under this subdivision may not be maintained by or on 533.2 behalf of any person who has been served with an inventory 533.3 unless the person has complied with this subdivision. The court 533.4 shall hear the action without a jury and shall determine the 533.5 issues of fact and law involved. If a judgment of forfeiture is 533.6 entered and is not stayed pending an appeal, the commissioner 533.7 may have the forfeited vehicle and property sold at public 533.8 auction as provided by law. 533.9 Subd. 3. [TREATMENT OF SEIZED PROPERTY.]If a demand for533.10judicial determination is made and no action is commenced as533.11provided in this subdivision, the vehicle and property must be533.12released by the commissioner and redelivered to the person533.13entitled to it.If no demand for judicial determination is 533.14 made, the vehicle and property seized are considered forfeited 533.15 to the state by operation of law and may be disposed of by the 533.16 commissioner as if there were a judgment of forfeiture. The 533.17 forfeiture and sale of the automobile, truck, or other means of 533.18 transportation, and of the property being transported illegally 533.19 in it, are a penalty for the violation of this chapter. After 533.20 deducting the expense of keeping the vehicle and property, the 533.21 fee for seizure, and the costs of the sale, the commissioner 533.22 shall pay liens from the funds collected. The commissioner 533.23 shall pay all liens, according to their priority, that are 533.24 establishedat the hearingas being bona fide and as existing 533.25 without the lienor having any notice or knowledge that the 533.26 vehicle or property was being used or was intended to be used 533.27 for or in connection with any such violationas specified in the533.28order of the court. The commissioner shall pay the balance of 533.29 the proceeds into the state treasury to be credited to the 533.30 general fund. The state is not liable for any liens in excess 533.31 of the proceeds from the sale after allowable deductions. A 533.32 sale under this section frees the vehicle and property sold from 533.33 all liens.The order of the district court may be appealed as533.34in other civil cases.533.35[EFFECTIVE DATE.] This section is effective for seizures 533.36 made on or after July 1, 2001. 534.1 Sec. 4. Minnesota Statutes 2000, section 297E.16, 534.2 subdivision 1, is amended to read: 534.3 Subdivision 1. [SEIZURE.] Contraband may be seized by the 534.4 commissioner or by any sheriff or other police officer, 534.5 hereinafter referred to as the "seizing authority," with or 534.6 without process, and is subject to forfeiture as provided in 534.7subdivisionssubdivision 2and 3. 534.8[EFFECTIVE DATE.] This section is effective for seizures 534.9 made on or after July 1, 2001. 534.10 Sec. 5. Minnesota Statutes 2000, section 297E.16, 534.11 subdivision 2, is amended to read: 534.12 Subd. 2. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 534.13 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 534.14 seizure of alleged contraband described in section 349.2125, 534.15 subdivision 1, the person making the seizure shallmake534.16availableserve by certified mail an inventory of the property 534.17 seizedtoon the person from whom the property was seized, if 534.18 known, and on any person known or believed to have any right, 534.19 title, interest, or lien in the property, at the last known 534.20 address, and file a copy with the commissioner or the director 534.21 of alcohol and gambling enforcement. The notice must include an 534.22 explanation of the right to demand a judicial forfeiture 534.23 determination. 534.24 (b) Withinten60 days after the date of service of the 534.25 inventory, which is the date of mailing, the person from whom 534.26 the property was seized or any person claiming an interest in 534.27 the property may filewith the seizing authoritya demand for 534.28 judicial determination of whether the property was lawfully 534.29 subject to seizure and forfeiture.Within 60 days after the534.30date of filing of the demand, the seizing authority must bring534.31an action in the district court of the county where seizure was534.32made to determine the issue of forfeiture. The action must be534.33brought in the name of the state and be prosecuted by the county534.34attorney or by the attorney general.The demand must be in the 534.35 form of a civil complaint and must be filed with the court 534.36 administrator in the county in which the seizure occurred, 535.1 together with proof of service of a copy of the complaint on the 535.2 commissioner of revenue or the director of alcohol and gambling 535.3 enforcement, and the standard filing fee for civil actions 535.4 unless the petitioner has the right to sue in forma pauperis 535.5 under section 563.01. If the value of the seized property is 535.6 $7,500 or less, the claimant may file an action in conciliation 535.7 court for recovery of the property. If the value of the seized 535.8 property is less than $500, the claimant does not have to pay 535.9 the conciliation court filing fee. 535.10 (c) The complaint must be captioned in the name of the 535.11 claimant as plaintiff and the seized property as defendant, and 535.12 must state with specificity the grounds on which the claimant 535.13 alleges the property was improperly seized and the plaintiff's 535.14 interest in the property seized. No responsive pleading is 535.15 required of the commissioner or director, and no court fees may 535.16 be charged for the commissioner's or director's appearance in 535.17 the matter. The proceedings are governed by the Rules of Civil 535.18 Procedure. Notwithstanding any law to the contrary, an action 535.19 for the return of property seized under this section may not be 535.20 maintained by or on behalf of any person who has been served 535.21 with an inventory unless the person has complied with this 535.22 subdivision. The court shall hear the action without a jury and 535.23 determine the issues of fact and law involved. 535.24 (d) If a judgment of forfeiture is entered, the seizing 535.25 authority may, unless the judgment is stayed pending an appeal, 535.26 either (1) cause the forfeited property, other than a vehicle, 535.27 to be destroyed; or (2) cause it to be sold at a public auction 535.28 as provided by law. The person making a sale, after deducting 535.29 the expense of keeping the property, the fee for seizure, and 535.30 the costs of the sale, shall pay all liens according to their 535.31 priority, which are established as being bona fide and as 535.32 existing without the lienor having any notice or knowledge that 535.33 the property was being used or was intended to be used for or in 535.34 connection with the violation. The balance of the proceeds must 535.35 be paid 70 percent to the seizing authority for deposit as a 535.36 supplement to its operating fund or similar fund for official 536.1 use, and 20 percent to the county attorney or other prosecuting 536.2 agency that handled the court proceeding, if there is one, for 536.3 deposit as a supplement to its operating fund or similar fund 536.4 for prosecutorial purposes. The remaining ten percent of the 536.5 proceeds must be forwarded within 60 days after resolution of 536.6 the forfeiture to the department of human services to fund 536.7 programs for the treatment of compulsive gamblers. If there is 536.8 no prosecuting authority involved in the forfeiture, the 20 536.9 percent of the proceeds otherwise designated for the prosecuting 536.10 authority must be deposited into the general fund. 536.11If demand for judicial determination is made and no action536.12is commenced by the seizing authority as provided in this536.13subdivision, the property must be released by the seizing536.14authority and delivered to the person entitled to it.(e) If no 536.15 demand for judicial determination is made, the property seized 536.16 is considered forfeited to the seizing authority by operation of 536.17 law and may be disposed of by the seizing authority as provided 536.18 where there has been a judgment of forfeiture.When the seizing536.19authority is satisfied that a person from whom property is536.20seized was acting in good faith and without intent to evade the536.21tax imposed by section 297E.02, the seizing authority shall536.22release the property seized without further legal proceedings. 536.23[EFFECTIVE DATE.] This section is effective for seizures 536.24 made on or after July 1, 2001. 536.25 Sec. 6. Minnesota Statutes 2000, section 297F.21, 536.26 subdivision 1, is amended to read: 536.27 Subdivision 1. [CONTRABAND DEFINED.] The following are 536.28 declared to be contraband and therefore subject to civil and 536.29 criminal penalties under this chapter: 536.30 (a) Cigarette packages which do not have stamps affixed to 536.31 them as provided in this chapter, including but not limited to 536.32 (i) packages with illegible stamps and packages with stamps that 536.33 are not complete or whole even if the stamps are legible, and 536.34 (ii) all devices for the vending of cigarettes in which packages 536.35 as defined in item (i) are found, including all contents 536.36 contained within the devices. 537.1 (b) A device for the vending of cigarettes and all packages 537.2 of cigarettes, where the device does not afford at least partial 537.3 visibility of contents. Where any package exposed to view does 537.4 not carry the stamp required by this chapter, it shall be 537.5 presumed that all packages contained in the device are unstamped 537.6 and contraband. 537.7 (c) A device for the vending of cigarettes to which the 537.8 commissioner or authorized agents have been denied access for 537.9 the inspection of contents. In lieu of seizure, the 537.10 commissioner or an agent may seal the device to prevent its use 537.11 until inspection of contents is permitted. 537.12 (d) A device for the vending of cigarettes which does not 537.13 carry the name and address of the owner, plainly marked and 537.14 visible from the front of the machine. 537.15 (e) A device including, but not limited to, motor vehicles, 537.16 trailers, snowmobiles, airplanes, and boats used with the 537.17 knowledge of the owner or of a person operating with the consent 537.18 of the owner for the storage or transportation of more than 537.19 5,000 cigarettes which are contraband under this subdivision. 537.20 When cigarettes are being transported in the course of 537.21 interstate commerce, or are in movement from either a public 537.22 warehouse to a distributor upon orders from a manufacturer or 537.23 distributor, or from one distributor to another, the cigarettes 537.24 are not contraband, notwithstanding the provisions of clause (a). 537.25 (f) A device including, but not limited to, motor vehicles, 537.26 trailers, snowmobiles, airplanes, and boats used with the 537.27 knowledge of the owner, or of a person operating with the 537.28 consent of the owner, for the storage or transportation of 537.29 untaxed tobacco products intended for sale in Minnesota other 537.30 than those in the possession of a licensed distributor on or 537.31 before the due date for payment of the tax under section 537.32 297F.09, subdivision 2. 537.33 (g) Cigarette packages or tobacco products obtained from an 537.34 unlicensed seller. 537.35(g)(h) Cigarette packages offered for sale or held as 537.36 inventory in violation of section 297F.20, subdivision 7. 538.1(h)(i) Tobacco products on which the tax has not been paid 538.2 by a licensed distributor. 538.3(i)(j) Any cigarette packages or tobacco products offered 538.4 for sale or held as inventory for which there is not an invoice 538.5 from a licensed seller as required under section 297F.13, 538.6 subdivision 4. 538.7(j)(k) Cigarette packages which have been imported into 538.8 the United States in violation of United States Code, title 26, 538.9 section 5754. All cigarettes held in violation of that section 538.10 shall be presumed to have entered the United States after 538.11 December 31, 1999, in the absence of proof to the contrary. 538.12[EFFECTIVE DATE.] This section is effective for seizures 538.13 made on or after July 1, 2001. 538.14 Sec. 7. Minnesota Statutes 2000, section 297F.21, 538.15 subdivision 2, is amended to read: 538.16 Subd. 2. [SEIZURE.] Cigarettes, tobacco products, or other 538.17 property made contraband by subdivision 1 may be seized by the 538.18 commissioner or authorized agents or by any sheriff or other 538.19 police officer, with or without process, and are subject to 538.20 forfeiture as provided insubdivisionssubdivision 3and 4. 538.21[EFFECTIVE DATE.] This section is effective for seizures 538.22 made on or after July 1, 2001. 538.23 Sec. 8. Minnesota Statutes 2000, section 297F.21, 538.24 subdivision 3, is amended to read: 538.25 Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 538.26 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 538.27 seizure of any alleged contraband, the person making the seizure 538.28 shallmake availableserve by certified mail an inventory of the 538.29 property seizedtoon the person from whom the seizure was made, 538.30 if known, and on any person known or believed to have any right, 538.31 title, interest, or lien in the property, at the last known 538.32 address, and file a copy with the commissioner. The notice must 538.33 include an explanation of the right to demand a judicial 538.34 forfeiture determination. 538.35 (b) Withinten60 days after the date of service of the 538.36 inventory, which is the date of mailing, the person from whom 539.1 the property was seized or any person claiming an interest in 539.2 the property may filewith the commissionera demand for a 539.3 judicial determination of the question as to whether the 539.4 property was lawfully subject to seizure and forfeiture.The539.5commissioner, within 60 days, shall institute an action in the539.6district court of the county where the seizure was made to539.7determine the issue of forfeiture.The demand must be in the 539.8 form of a civil complaint and must be filed with the court 539.9 administrator in the county in which the seizure occurred, 539.10 together with proof of service of a copy of the complaint on the 539.11 commissioner of revenue, and the standard filing fee for civil 539.12 actions unless the petitioner has the right to sue in forma 539.13 pauperis under section 563.01. If the value of the seized 539.14 property is $7,500 or less, the claimant may file an action in 539.15 conciliation court for recovery of the property. If the value 539.16 of the seized property is less than $500, the claimant does not 539.17 have to pay the conciliation court filing fee. 539.18 (c) The complaint must be captioned in the name of the 539.19 claimant as plaintiff and the seized property as defendant, and 539.20 must state with specificity the grounds on which the claimant 539.21 alleges the property was improperly seized and the plaintiff's 539.22 interest in the property seized. No responsive pleading is 539.23 required of the commissioner, and no court fees may be charged 539.24 for the commissioner's appearance in the matter. The 539.25 proceedings are governed by the Rules of Civil Procedure. 539.26 Notwithstanding any law to the contrary, an action for the 539.27 return of property seized under this section may not be 539.28 maintained by or on behalf of any person who has been served 539.29 with an inventory unless the person has complied with this 539.30 subdivision. The court shall decide whether the alleged 539.31 contraband is contraband, as defined in subdivision 1. 539.32(b) The action must be brought in the name of the state and539.33must be prosecuted by the county attorney or by the attorney539.34general.The court shall hear the action without a jury and 539.35 shall try and determine the issues of fact and law involved. 539.36(c)(d) When a judgment of forfeiture is entered, the 540.1 commissioner may, unless the judgment is stayed pending an 540.2 appeal, either: 540.3 (1) deliver the forfeitedpropertycigarette packages or 540.4 tobacco products to the commissioner of human services for use 540.5 by patients in state institutions; 540.6 (2) causeitthe property in clause (1) to be destroyed; or 540.7 (3) causeitthe forfeited property to be sold at public 540.8 auction as provided by law. 540.9 The person making a sale, after deducting the expense of keeping 540.10 the property, the fee for seizure, and the costs of the sale, 540.11 shall pay all liens according to their priority, which are 540.12 established as being bona fide and as existing without the 540.13 lienor having any notice or knowledge that the property was 540.14 being used or was intended to be used for or in connection with 540.15 the violation. The balance of the proceeds must be paid 75 540.16 percent to the department of revenue for deposit as a supplement 540.17 to its operating fund or similar fund for official use, and 25 540.18 percent to the county attorney or other prosecuting agency that 540.19 handled the court proceeding, if there is one, for deposit as a 540.20 supplement to its operating fund or similar fund for 540.21 prosecutorial purposes. If there is no prosecuting authority 540.22 involved in the forfeiture, the 25 percent of the proceeds 540.23 otherwise designated for the prosecuting authority must be 540.24 deposited into the general fund. 540.25(d) If a demand for judicial determination is made and no540.26action commenced as provided in this subdivision, the property540.27must be released by the commissioner and returned to the person540.28entitled to it.(e) If no demand for judicial determination is 540.29 made, the property seized is considered forfeited to the state 540.30 by operation of law and may be disposed of by the commissioner 540.31 as provided in the case of a judgment of forfeiture. 540.32[EFFECTIVE DATE.] This section is effective for seizures 540.33 made on or after July 1, 2001. 540.34 Sec. 9. Minnesota Statutes 2000, section 297G.20, 540.35 subdivision 3, is amended to read: 540.36 Subd. 3. [SEIZURE.] Distilled spirits, wine, fermented 541.1 malt beverages, or other property made contraband by subdivision 541.2 1 may be seized by the commissioner of revenue or public safety 541.3 and their authorized agents or by any sheriff or other police 541.4 officer, with or without process, and are subject to forfeiture 541.5 as provided insubdivisionssubdivision 4and 5. 541.6[EFFECTIVE DATE.] This section is effective for seizures 541.7 made on or after July 1, 2001. 541.8 Sec. 10. Minnesota Statutes 2000, section 297G.20, 541.9 subdivision 4, is amended to read: 541.10 Subd. 4. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 541.11 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 541.12 seizure of alleged contraband, the person making the seizure 541.13 shallmake availableserve by certified mail an inventory of the 541.14 property seizedtoon the person from whom the property was 541.15 seized, if known, and on any person known or believed to have 541.16 any right, title, interest, or lien in the property, at the last 541.17 known address, and file a copy with both the commissioners of 541.18 revenue and public safety. The notice must include an 541.19 explanation of the right to demand a judicial forfeiture 541.20 determination. 541.21 (b) Withinten60 days after the date of service of the 541.22 inventory, which is the date of mailing, the person from whom 541.23 the property was seized or any person claiming an interest in 541.24 the property may filewith the seizing authoritya demand for 541.25 judicial determination of whether the property was lawfully 541.26 subject to seizure and forfeiture.Within 60 days after the541.27date of the filing of the demand, the seizing authority must541.28bring an action in the district court of the county where541.29seizure was made to determine the issue of forfeiture.The 541.30 demand must be in the form of a civil complaint and must be 541.31 filed with the court administrator in the county in which the 541.32 seizure occurred, together with proof of service of a copy of 541.33 the complaint on the commissioner of revenue or public safety, 541.34 and the standard filing fee for civil actions unless the 541.35 petitioner has the right to sue in forma pauperis under section 541.36 563.01. If the value of the seized property or vehicle is 542.1 $7,500 or less, the claimant may file an action in conciliation 542.2 court for recovery of the property. If the value of the seized 542.3 property is less than $500, the claimant does not have to pay 542.4 the conciliation court filing fee. 542.5 (c) The complaint must be captioned in the name of the 542.6 claimant as plaintiff and the seized property as defendant, and 542.7 must state with specificity the grounds on which the claimant 542.8 alleges the property was improperly seized and the plaintiff's 542.9 interest in the property seized. No responsive pleading is 542.10 required of the commissioner of revenue or public safety and no 542.11 court fees may be charged for either commissioner's appearance 542.12 in the matter. The proceedings are governed by the Rules of 542.13 Civil Procedure. Notwithstanding any law to the contrary, an 542.14 action for the return of property seized under this section may 542.15 not be maintained by or on behalf of any person who has been 542.16 served with an inventory unless the person has complied with 542.17 this subdivision. 542.18(b) The action must be brought in the name of the state and542.19must be prosecuted by the county attorney or by the attorney542.20general.The court shall hear the action without a jury and 542.21 determine the issues of fact and law involved. 542.22(c)(d) If a judgment of forfeiture is entered, the seizing 542.23 authority may, unless the judgment is stayed pending an appeal, 542.24 either: 542.25 (1) cause the forfeited property, other than a vehicle, to 542.26 be destroyed; or 542.27 (2) cause it to be sold at a public auction as provided by 542.28 law. 542.29 The person making a sale, after deducting the expense of 542.30 keeping the property, the fee for seizure, and the costs of the 542.31 sale, shall pay all liens according to their priority, which are 542.32 established as being bona fide and as existing without the 542.33 lienor having any notice or knowledge that the property was 542.34 being used or was intended to be used for or in connection with 542.35 the violation. The balance of the proceeds must be paid 75 542.36 percent to the seizing authority for deposit as a supplement to 543.1 its operating fund or similar fund for official use, and 25 543.2 percent to the county attorney or other prosecuting agency that 543.3 handled the court proceeding, if there is one, for deposit as a 543.4 supplement to its operating fund or similar fund for 543.5 prosecutorial purposes. If there is no prosecuting authority 543.6 involved in the forfeiture, the 25 percent of the proceeds 543.7 otherwise designated for the prosecuting authority must be 543.8 deposited into the general fund. 543.9(d) If demand for judicial determination is made and no543.10action is commenced by the seizing authority as provided in this543.11subdivision, the property must be released by the seizing543.12authority and delivered to the person entitled to it.(e) If no 543.13 demand is made, the property seized is considered forfeited to 543.14 the seizing authority by operation of law and may be disposed of 543.15 by the seizing authority as provided for a judgment of 543.16 forfeiture.When the seizing authority is satisfied that a543.17person from whom property is seized was acting in good faith and543.18without intent to evade the tax imposed by this chapter, the543.19seizing authority shall release the property seized without543.20further legal proceedings.543.21[EFFECTIVE DATE.] This section is effective for seizures 543.22 made on or after July 1, 2001. 543.23 Sec. 11. [REPEALER.] 543.24 Minnesota Statutes 2000, sections 296A.24, subdivision 3; 543.25 297E.16, subdivision 3; 297F.21, subdivision 4; and 297G.20, 543.26 subdivision 5, are repealed. 543.27[EFFECTIVE DATE.] This section is effective for seizures 543.28 made on or after July 1, 2001. 543.29 ARTICLE 26 543.30 REVENUE DATA 543.31 Section 1. Minnesota Statutes 2000, section 270A.11, is 543.32 amended to read: 543.33 270A.11 [DATA PRIVACY.] 543.34 Private and confidential data on individuals may be 543.35 exchanged among the department, the taxpayer's rights advocate, 543.36 the attorney general, the claimant agency, and the debtor as 544.1 necessary to accomplish and effectuate the intent of sections 544.2 270A.01 to 270A.12, as provided by section 13.05, subdivision 4, 544.3 clause (b). The department may disclose to the claimant agency 544.4 only the debtor's name, address, social security number and the 544.5 amount of the refund, and in the case of a joint return, the 544.6 name of the debtor's spouse. Any person employed by, or 544.7 formerly employed by, a claimant agency who discloses any such 544.8 information for any other purpose, shall be subject to the civil 544.9 and criminal penalties of section 270B.18. Data collected by 544.10 the department from claimant agencies relating to claims filed 544.11 under this chapter are private data on individuals. 544.12[EFFECTIVE DATE.] This section is effective the day 544.13 following final enactment. 544.14 Sec. 2. Minnesota Statutes 2000, section 270B.02, 544.15 subdivision 2, is amended to read: 544.16 Subd. 2. [PROTECTED NONPUBLIC DATA.] The following are 544.17 protected nonpublic data as defined in section 13.02, 544.18 subdivision 13: 544.19 (1) criteria for determining which computer processed 544.20 returns are selected for audit; 544.21 (2) criteria for determining which returns are selected for 544.22 an in-depth audit;and544.23 (3) criteria for determining which accounts receivable 544.24 balances below a stated amount are written off or canceled; and 544.25 (4) criteria or information used in determining which 544.26 alleged criminal violations of any law administered by the 544.27 commissioner are selected for criminal investigation. 544.28[EFFECTIVE DATE.] This section is effective the day 544.29 following final enactment. 544.30 Sec. 3. Minnesota Statutes 2000, section 270B.02, 544.31 subdivision 3, is amended to read: 544.32 Subd. 3. [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 544.33 NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 544.34 name or existence of an informer, informer letters, and other 544.35unsoliciteddata, in whatever form, given to the department of 544.36 revenue by a person, other than the data subject, who informs 545.1 that a specific taxpayer is not or may not be in compliance with 545.2 tax laws, or nontax laws administered by the department of 545.3 revenue, including laws not listed in section 270B.01, 545.4 subdivision 8, are confidential data on individuals or protected 545.5 nonpublic data as defined in section 13.02, subdivisions 3 and 545.6 13. 545.7 (b) Data under paragraph (a) may be disclosed with the 545.8 consent of the informer or upon a written finding by a court 545.9 that the information provided by the informer was false and that 545.10 there is evidence that the information was provided in bad 545.11 faith. This subdivision does not alter disclosure 545.12 responsibilities or obligations under the rules of criminal 545.13 procedure. 545.14[EFFECTIVE DATE.] This section is effective the day 545.15 following final enactment. 545.16 Sec. 4. Minnesota Statutes 2000, section 270B.03, 545.17 subdivision 6, is amended to read: 545.18 Subd. 6. [INVESTIGATIVE DATA.] For purposes of any law 545.19 administered by the department of revenue, including laws not 545.20 listed in section 270B.01, subdivision 8, investigative data 545.21 collected or created by the department of revenue in order to 545.22 prepare a case against a person, whether known or unknown, for 545.23 the commission of a crime is confidential or protected nonpublic 545.24 during an investigation. When the investigation becomes 545.25 inactive, as defined in section 13.82, subdivision 5, the 545.26classifications otherwise applicable under any other laws become545.27effectivedata is private or nonpublic. 545.28[EFFECTIVE DATE.] This section is effective the day 545.29 following final enactment. 545.30 ARTICLE 27 545.31 MISCELLANEOUS 545.32 Section 1. Minnesota Statutes 2000, section 16D.08, 545.33 subdivision 2, is amended to read: 545.34 Subd. 2. [POWERS.] (a) In addition to the collection 545.35 remedies available to private collection agencies in this state, 545.36 the commissioner, with legal assistance from the attorney 546.1 general, may utilize any statutory authority granted to a 546.2 referring agency for purposes of collecting debt owed to that 546.3 referring agency. The commissioner may also delegate to the 546.4 enterprise the tax collection remedies in sections 270.06, 546.5 clauses (7) and (17), excluding the power to subpoena witnesses; 546.6 270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 546.7 excluding subdivision 14; 270.7001 to 270.72; and 290.92, 546.8 subdivision 23, except that a continuous wage levy under section 546.9 290.92, subdivision 23, is only effective for 70 days, unless no 546.10 competing wage garnishments, executions, or levies are served 546.11 within the 70-day period, in which case a wage levy is 546.12 continuous until a competing garnishment, execution, or levy is 546.13 served in the second or a succeeding 70-day period, in which 546.14 case a continuous wage levy is effective for the remainder of 546.15 that period. A debtor who qualifies for cancellation of 546.16 collection costs under section 16D.11, subdivision 3, clause 546.17 (1), can apply to the commissioner for reduction or release of a 546.18 continuous wage levy, if the debtor establishes that the debtor 546.19 needs all or a portion of the wages being levied upon to pay for 546.20 essential living expenses, such as food, clothing, shelter, 546.21 medical care, or expenses necessary for maintaining employment. 546.22 The commissioner's determination not to reduce or release a 546.23 continuous wage levy is appealable to district court. The word 546.24 "tax" or "taxes" when used in the tax collection statutes listed 546.25 in this subdivision also means debts referred under this chapter. 546.26 (b) For debts other than state taxesor, child support, or 546.27 student loans, before any of the tax collection remedies listed 546.28 in this subdivision can be used, except for the remedies in 546.29 section 270.06, clauses (7) and (17), if the referring agency 546.30 has not already obtained a judgment or filed a lien, the 546.31 commissioner must first obtain a judgment against the debtor. 546.32 For student loans when the referring agency has not obtained a 546.33 judgment or filed a lien, before using the tax collection 546.34 remedies listed in this subdivision, except for the remedies in 546.35 section 270.06, clauses (7) and (17), the commissioner shall 546.36 give the debtor 30 days' notice in writing, which may be served 547.1 in any manner permitted in section 270.68 for service of a 547.2 summons and complaint. The notice must advise the debtor of the 547.3 debtor's right to request that the commissioner commence a court 547.4 action, and that if no such request is made within 30 days after 547.5 service of the notice, the commissioner may use these tax 547.6 collection remedies. If a timely request is made, the 547.7 commissioner shall obtain a judgment before using these tax 547.8 collection remedies. 547.9[EFFECTIVE DATE.] This section is effective for student 547.10 loans referred to the commissioner for collection on or after 547.11 July 1, 2001. 547.12 Sec. 2. Minnesota Statutes 2000, section 144.3831, 547.13 subdivision 2, is amended to read: 547.14 Subd. 2. [COLLECTION AND PAYMENT OF FEE.] The public water 547.15 supply described in subdivision 1 shall: 547.16 (1) collect the fees assessed on its service connections; 547.17 (2) pay the department ofrevenuehealth an amount 547.18 equivalent to the fees based on the total number of service 547.19 connections. The service connections for each public water 547.20 supply described in subdivision 1 shall be verified every four 547.21 years by the department of health; and 547.22 (3) pay one-fourth of the total yearly fee to the 547.23 department ofrevenuehealth each calendar quarter. The first 547.24 quarterly payment is due on or before September 30, 1992. In 547.25 lieu of quarterly payments, a public water supply described in 547.26 subdivision 1 with fewer than 50 service connections may make a 547.27 single annual payment by June 30 each year, starting in 1993. 547.28 The fees payable to the department ofrevenuehealth shall be 547.29 deposited in the state treasury as nondedicated state government 547.30 special revenue fund revenues. 547.31[EFFECTIVE DATE.] This section is effective the day 547.32 following final enactment. 547.33 Sec. 3. Minnesota Statutes 2000, section 270.06, is 547.34 amended to read: 547.35 270.06 [POWERS AND DUTIES.] 547.36 The commissioner of revenue shall: 548.1 (1) have and exercise general supervision over the 548.2 administration of the assessment and taxation laws of the state, 548.3 over assessors, town, county, and city boards of review and 548.4 equalization, and all other assessing officers in the 548.5 performance of their duties, to the end that all assessments of 548.6 property be made relatively just and equal in compliance with 548.7 the laws of the state; 548.8 (2) confer with, advise, and give the necessary 548.9 instructions and directions to local assessors and local boards 548.10 of review throughout the state as to their duties under the laws 548.11 of the state; 548.12 (3) direct proceedings, actions, and prosecutions to be 548.13 instituted to enforce the laws relating to the liability and 548.14 punishment of public officers and officers and agents of 548.15 corporations for failure or negligence to comply with the 548.16 provisions of the laws of this state governing returns of 548.17 assessment and taxation of property, and cause complaints to be 548.18 made against local assessors, members of boards of equalization, 548.19 members of boards of review, or any other assessing or taxing 548.20 officer, to the proper authority, for their removal from office 548.21 for misconduct or negligence of duty; 548.22 (4) require county attorneys to assist in the commencement 548.23 of prosecutions in actions or proceedings for removal, 548.24 forfeiture and punishment for violation of the laws of this 548.25 state in respect to the assessment and taxation of property in 548.26 their respective districts or counties; 548.27 (5) require town, city, county, and other public officers 548.28 to report information as to the assessment of property, 548.29 collection of taxes received from licenses and other sources, 548.30 and such other information as may be needful in the work of the 548.31 department of revenue, in such form and upon such blanks as the 548.32 commissioner may prescribe; 548.33 (6) require individuals, copartnerships, companies, 548.34 associations, and corporations to furnish information concerning 548.35 their capital, funded or other debt, current assets and 548.36 liabilities, earnings, operating expenses, taxes, as well as all 549.1 other statements now required by law for taxation purposes; 549.2 (7) subpoena witnesses, at a time and place reasonable 549.3 under the circumstances, to appear and give testimony, and to 549.4 produce books, records, papers and documents for inspection and 549.5 copying relating to any matter which the commissioner may have 549.6 authority to investigate or determine; 549.7 (8) issue a subpoena which does not identify the person or 549.8 persons with respect to whose liability the subpoena is issued, 549.9 but only if (a) the subpoena relates to the investigation of a 549.10 particular person or ascertainable group or class of persons, 549.11 (b) there is a reasonable basis for believing that such person 549.12 or group or class of persons may fail or may have failed to 549.13 comply with any law administered by the commissioner, (c) the 549.14 information sought to be obtained from the examination of the 549.15 records (and the identity of the person or persons with respect 549.16 to whose liability the subpoena is issued) is not readily 549.17 available from other sources, (d) the subpoena is clear and 549.18 specific as to the information sought to be obtained, and (e) 549.19 the information sought to be obtained is limited solely to the 549.20 scope of the investigation. Provided further that the party 549.21 served with a subpoena which does not identify the person or 549.22 persons with respect to whose tax liability the subpoena is 549.23 issued shall have the right, within 20 days after service of the 549.24 subpoena, to petition the district court for the judicial 549.25 district in which lies the county in which that party is located 549.26 for a determination as to whether the commissioner of revenue 549.27 has complied with all the requirements in (a) to (e), and thus, 549.28 whether the subpoena is enforceable. If no such petition is 549.29 made by the party served within the time prescribed, the 549.30 subpoena shall have the force and effect of a court order; 549.31 (9) cause the deposition of witnesses residing within or 549.32 without the state, or absent therefrom, to be taken, upon notice 549.33 to the interested party, if any, in like manner that depositions 549.34 of witnesses are taken in civil actions in the district court, 549.35 in any matter which the commissioner may have authority to 549.36 investigate or determine; 550.1 (10) investigate the tax laws of other states and countries 550.2 and to formulate and submit to the legislature such legislation 550.3 as the commissioner may deem expedient to prevent evasions of 550.4 assessment and taxing laws, and secure just and equal taxation 550.5 and improvement in the system of assessment and taxation in this 550.6 state; 550.7 (11) consult and confer with the governor upon the subject 550.8 of taxation, the administration of the laws in regard thereto, 550.9 and the progress of the work of the department of revenue, and 550.10 furnish the governor, from time to time, such assistance and 550.11 information as the governor may require relating to tax matters; 550.12 (12) transmit to the governor, on or before the third 550.13 Monday in December of each even-numbered year, and to each 550.14 member of the legislature, on or before November 15 of each 550.15 even-numbered year, the report of the department of revenue for 550.16 the preceding years, showing all the taxable property in the 550.17 state and the value of the same, in tabulated form; 550.18 (13) inquire into the methods of assessment and taxation 550.19 and ascertain whether the assessors faithfully discharge their 550.20 duties, particularly as to their compliance with the laws 550.21 requiring the assessment of all property not exempt from 550.22 taxation; 550.23 (14) administer and enforce the assessment and collection 550.24 of state taxes and fees, including the use of any remedy 550.25 available to nongovernmental creditors, and, from time to time, 550.26 make, publish, and distribute rules for the administration and 550.27 enforcement of assessments and fees administered by the 550.28 commissioner and state tax laws. The rules have the force of 550.29 law; 550.30 (15) prepare blank forms for the returns required by state 550.31 tax law and distribute them throughout the state, furnishing 550.32 them subject to charge on application; 550.33 (16) prescribe rules governing the qualification and 550.34 practice of agents, attorneys, or other persons representing 550.35 taxpayers before the commissioner. The rules may require that 550.36 those persons, agents, and attorneys show that they are of good 551.1 character and in good repute, have the necessary qualifications 551.2 to give taxpayers valuable services, and are otherwise competent 551.3 to advise and assist taxpayers in the presentation of their case 551.4 before being recognized as representatives of taxpayers. After 551.5 due notice and opportunity for hearing, the commissioner may 551.6 suspend anddisbarbar from further practice before the 551.7 commissioner any person, agent, or attorney who is shown to be 551.8 incompetent or disreputable, who refuses to comply with the 551.9 rules, or who with intent to defraud, willfully or knowingly 551.10 deceives, misleads, or threatens a taxpayer or prospective 551.11 taxpayer, by words, circular, letter, or by advertisement. This 551.12 clause does not curtail the rights of individuals to appear in 551.13 their own behalf or partners or corporations' officers to appear 551.14 in behalf of their respective partnerships or corporations; 551.15 (17) appoint agents as the commissioner considers necessary 551.16 to make examinations and determinations. The agents have the 551.17 rights and powers conferred on the commissioner to subpoena, 551.18 examine, and copy books, records, papers, or memoranda, subpoena 551.19 witnesses, administer oaths and affirmations, and take 551.20 testimony. In addition to administrative subpoenas of the 551.21 commissioner and the agents, upon demand of the commissioner or 551.22 an agent, the court administrator of any district court shall 551.23 issue a subpoena for the attendance of a witness or the 551.24 production of books, papers, records, or memoranda before the 551.25 agent for inspection and copying. Disobedience of a court 551.26 administrator's subpoena shall be punished by the district court 551.27 of the district in which the subpoena is issued, or in the case 551.28 of a subpoena issued by the commissioner or an agent, by the 551.29 district court of the district in which the party served with 551.30 the subpoena is located, in the same manner as contempt of the 551.31 district court; 551.32 (18) appoint and employ additional help, purchase supplies 551.33 or materials, or incur other expenditures in the enforcement of 551.34 state tax laws as considered necessary. The salaries of all 551.35 agents and employees provided for in this chapter shall be fixed 551.36 by the appointing authority, subject to the approval of the 552.1 commissioner of administration; 552.2 (19) execute and administer any agreement with the 552.3 secretary of the treasury of the United States or a 552.4 representative of another state regarding the exchange of 552.5 information and administration of the tax laws; 552.6 (20) administer and enforce the provisions of sections 552.7 325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act; 552.8 (21) authorize the use of unmarked motor vehicles to 552.9 conduct seizures or criminal investigations pursuant to the 552.10 commissioner's authority; and 552.11 (22) exercise other powers and perform other duties 552.12 required of or imposed upon the commissioner of revenue by law. 552.13[EFFECTIVE DATE.] This section is effective the day 552.14 following final enactment. 552.15 Sec. 4. Minnesota Statutes 2000, section 270.60, is 552.16 amended by adding a subdivision to read: 552.17 Subd. 5. [FEES; APPROPRIATION.] (a) The commissioner may 552.18 enter into an agreement with the governing body of any federally 552.19 recognized Indian reservation in Minnesota concerning fees 552.20 administered by the commissioner that are paid by the tribe, 552.21 members of the tribe, or persons who conduct business with the 552.22 tribe, or otherwise imposed on on-reservation activities. The 552.23 agreement may provide for the refund or sharing of the fee. The 552.24 commissioner may make any payments required by the agreement 552.25 from the fees collected. 552.26 (b) Each head of an agency, board, or other governmental 552.27 entity that administers a program that is funded by fees 552.28 administered by the commissioner may sign an agreement entered 552.29 into by the commissioner under this subdivision. An agreement 552.30 is not valid until signed by the head of each agency, board, or 552.31 other governmental entity that administers a program funded by 552.32 the particular fee covered in an agreement and by the 552.33 commissioner of revenue. 552.34 (c) There is annually appropriated to the commissioner of 552.35 revenue from the funds for which the fees are collected the 552.36 amounts necessary to make payments as provided in this 553.1 subdivision. 553.2[EFFECTIVE DATE.] This section is effective the day 553.3 following final enactment and applies to all fees administered 553.4 by the commissioner of revenue for which timely claims for 553.5 refund have been, or can be, filed. 553.6 Sec. 5. Minnesota Statutes 2000, section 270.70, 553.7 subdivision 13, is amended to read: 553.8 Subd. 13. [LEVY AND SALE BY SHERIFF.] If any tax payable 553.9 to the commissioner of revenue or to the department of revenue 553.10 is not paid as provided in subdivision 2, the commissioner may,553.11within five years after the date of assessment of the553.12tax, within the time periods provided in subdivision 1 for 553.13 collection of taxes, delegate the authority granted by 553.14 subdivision 1, by means of issuing a warrant to the sheriff of 553.15 any county of the state commanding the sheriff, as agent for the 553.16 commissioner, to levy upon and sell the real and personal 553.17 property of the person liable for the payment or collection of 553.18 the tax and to levy upon the rights to property of that person 553.19 within the county, or to levy upon and seize any property within 553.20 the county on which there is a lien provided in section 270.69, 553.21 and to return the warrant to the commissioner and pay to the 553.22 commissioner the money collected by virtue thereof by a time to 553.23 be therein specified not less than 60 days from the date of the 553.24 warrant. The sheriff shall proceed thereunder to levy upon and 553.25 seize any property of the person and to levy upon the rights to 553.26 property of the person within the county (except the person's 553.27 homestead or that property which is exempt from execution 553.28 pursuant to section 550.37), or to levy upon and seize any 553.29 property within the county on which there is a lien provided in 553.30 section 270.69. For purposes of the preceding sentence, the 553.31 term "tax" shall include any penalty, interest and costs 553.32 properly payable. The sheriff shall then sell so much of the 553.33 property levied upon as is required to satisfy the taxes, 553.34 interest, and penalties, together with the sheriff's costs; but 553.35 the sales, and the time and manner of redemption therefrom, 553.36 shall, to the extent not provided in sections 270.701 to 554.1 270.709, be governed by chapter 550. The proceeds of the sales, 554.2 less the sheriff's costs, shall be turned over to the 554.3 commissioner, who shall then apply the proceeds as provided in 554.4 section 270.708. 554.5[EFFECTIVE DATE.] This section is effective the day 554.6 following final enactment for all taxes for which issuance of a 554.7 warrant under this subdivision has not been barred as of that 554.8 date. 554.9 Sec. 6. Minnesota Statutes 2000, section 270.73, 554.10 subdivision 1, is amended to read: 554.11 Subdivision 1. [POSTING, NOTICE.] Pursuant to the 554.12 authority to disclose under section 270B.12, subdivision 4, the 554.13 commissioner shall, by the 15th of each month, submit to the 554.14 commissioner of public safety a list of all taxpayers who are 554.15 required to pay, withhold, or collect the tax imposed by section 554.16 290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or 554.17 297A.02, or local sales and use tax payable to the commissioner 554.18 of revenue, or a local option tax administered and collected by 554.19 the commissioner of revenue, and who are ten days or more 554.20 delinquent in either filing a tax return or paying the tax. 554.21 The commissioner of revenue is under no obligation to list 554.22 a taxpayer whose business is inactive. At least ten days before 554.23 notifying the commissioner of public safety, the commissioner of 554.24 revenue shall notify the taxpayer of the intended action. 554.25 The commissioner of public safety shall post the list in 554.26 the same manner as provided in section 340A.318, subdivision 3. 554.27 The list will prominently show the date of posting. If a 554.28 taxpayer previously listed files all returns and pays all taxes 554.29 then due, the commissioner shall notify the commissioner of 554.30 public safety within two business days. 554.31[EFFECTIVE DATE.] This section is effective for lists 554.32 submitted to the commissioner of public safety on or after the 554.33 day following final enactment. 554.34 Sec. 7. [APPROPRIATION.] 554.35 The following amounts are appropriated to the commissioner 554.36 of revenue from the general fund to administer this act: 555.1 (1) $....... in fiscal year 2002; and 555.2 (2) $....... in fiscal year 2003. 555.3 These are one-time appropriations and are not added to the 555.4 base, except $....... for each year for assessment training and 555.5 education (regional representatives) is added to the budget base. 555.6 Sec. 8. [REPEALER.] 555.7 Minnesota Rules, parts 8120.0200; 8120.0500; 8120.0700; 555.8 8120.0900; 8120.1300; 8120.1600; 8120.2000; 8120.2100; 555.9 8120.2200; 8120.2300; 8120.2500; 8120.2700; 8120.2800; 555.10 8120.3000; 8120.3200; 8120.4300; 8120.4400; 8120.4500; 555.11 8120.4600; 8120.4900; 8120.5000; 8120.5100; and 8120.5300, are 555.12 repealed. 555.13[EFFECTIVE DATE.] This section is effective the day 555.14 following final enactment.