2nd 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; indexing motor fuel tax rates; providing for 1.22 deposit of motor vehicle sales tax proceeds; freezing 1.23 the taconite production tax for certain years; 1.24 changing the taconite tax relief area for certain 1.25 purposes and providing for aids and taconite 1.26 production tax distribution; providing priorities for 1.27 disposition of production tax proceeds by the iron 1.28 range resources and rehabilitation board; providing 1.29 for state takeover of certain costs of district court 1.30 administration, out-of-home placement and day 1.31 services; providing for uniform sales and use tax 1.32 administration; providing for taxation and incentive 1.33 payments on forest lands; providing for metropolitan 1.34 area financing and governance; providing for 1.35 electronic filing and payment of taxes; changing 1.36 procedures for disposition of seized contraband; 1.37 changing tax increment financing provisions and 1.38 authorizing certain grants, establishment of 1.39 districts, duration extensions, and tax increment 1.40 expenditures; authorizing establishment of housing 1.41 replacement tax increment districts; depositing 1.42 certain rental motor vehicle taxes in a fund providing 1.43 revenues for airport impact mitigation; changing 1.44 property tax refunds and calculation of rent 1.45 constituting property taxes for purposes of property 1.46 tax refunds; changing and authorizing certain local 2.1 taxes; providing special authority to certain 2.2 political subdivisions; authorizing special taxing 2.3 districts; changing and clarifying tax administration, 2.4 collection, enforcement, interest, refund, and penalty 2.5 provisions; imposing a use tax on certain waste 2.6 generators and haulers; changing revenue recapture and 2.7 debt collection provisions; changing and imposing 2.8 fees; providing certain duties and powers to the 2.9 commissioner of revenue and to county assessors; 2.10 changing border city tax provisions; changing 2.11 provisions relating to tax-forfeited lands and 2.12 providing for tax-forfeited lands transfers; defining 2.13 terms; classifying data; authorizing bonding; 2.14 requiring studies and reports; imposing a criminal 2.15 penalty; appropriating money; amending Minnesota 2.16 Statutes 2000, sections 10A.01, subdivision 10; 2.17 10A.09, subdivision 6a; 10A.27, subdivision 1; 10A.31, 2.18 subdivision 3; 15.0597, subdivision 1; 16D.08, 2.19 subdivision 2; 84.922, by adding a subdivision; 88.49, 2.20 subdivisions 5, 9a; 88.491, subdivision 2; 97A.065, 2.21 subdivision 2; 103D.905, subdivision 3; 115B.24, 2.22 subdivision 2; 116C.779; 116J.424; 123A.45, 2.23 subdivisions 2, 6; 123B.75, by adding a subdivision; 2.24 126C.13, by adding a subdivision; 126C.17, subdivision 2.25 2, by adding a subdivision; 126C.48, subdivision 8; 2.26 144.3831, subdivision 2; 179A.101, subdivision 1; 2.27 179A.102, subdivision 6; 179A.103, subdivision 1; 2.28 204B.06, subdivision 4; 204B.09, subdivisions 1, 1a; 2.29 204B.11; 204B.135, subdivision 2; 204B.32, subdivision 2.30 2; 204D.02, subdivision 1; 204D.08, subdivision 6; 2.31 204D.27, by adding a subdivision; 209.02, subdivision 2.32 1; 211A.01, subdivision 3; 211B.01, subdivision 3; 2.33 239.101, subdivision 3; 252.43; 256B.092, subdivision 2.34 5; 256B.19, subdivision 1c; 260.765, by adding a 2.35 subdivision; 260.771, by adding a subdivision; 270.06; 2.36 270.271, subdivisions 1, 3; 270.60, by adding a 2.37 subdivision; 270.70, subdivision 13; 270.73, 2.38 subdivision 1; 270.771; 270.78; 270A.03, subdivisions 2.39 5, 7; 270A.11; 270B.02, subdivisions 2, 3; 270B.03, 2.40 subdivision 6; 271.01, subdivision 5; 271.21, 2.41 subdivision 2; 272.02, subdivisions 7, 10, by adding 2.42 subdivisions; 273.061, subdivisions 1, 2, 8; 273.072, 2.43 subdivision 1; 273.11, subdivisions 1a, 14, by adding 2.44 a subdivision; 273.1104, subdivision 2; 273.111, 2.45 subdivision 4; 273.121; 273.124, subdivisions 1, 13, 2.46 14; 273.13, subdivisions 22, 23, 24, 25, 31; 273.134; 2.47 273.135, subdivisions 1, 2; 273.136, subdivision 2; 2.48 273.1391, subdivisions 2, 3; 273.1392; 273.1393; 2.49 273.1398, subdivisions 4, 4a, by adding subdivisions; 2.50 273.1399, subdivision 6, by adding a subdivision; 2.51 274.01, subdivision 1; 274.13, subdivision 1; 275.065, 2.52 subdivisions 3, 5a, 6; 275.066; 275.07, subdivision 1; 2.53 276A.01, subdivisions 2, 3; 281.17; 282.01, 2.54 subdivision 1; 282.04, subdivision 2; 282.241; 2.55 287.035; 287.04; 287.08; 287.12; 287.20, subdivisions 2.56 2, 9; 287.21, subdivision 1; 287.28; 289A.02, 2.57 subdivision 7, by adding a subdivision; 289A.08, 2.58 subdivision 11; 289A.12, subdivision 3; 289A.18, 2.59 subdivision 4; 289A.20, subdivisions 1, 2, 4; 289A.26, 2.60 subdivision 2a; 289A.31, subdivision 7; 289A.50, 2.61 subdivisions 2, 2a; 289A.55, subdivision 9; 289A.60, 2.62 subdivisions 1, 2, 7, 21, by adding a subdivision; 2.63 290.01, subdivisions 6b, 19, 19b, 19c, 19d, 31; 2.64 290.06, subdivision 23, by adding subdivisions; 2.65 290.067, subdivisions 2, 2b; 290.0671, subdivisions 1, 2.66 7; 290.0674, subdivision 1, by adding a subdivision; 2.67 290.0675, subdivision 3; 290.068, by adding 2.68 subdivisions; 290.0921, subdivision 3; 290.191, 2.69 subdivision 5; 290.35, subdivision 2; 290.92, 2.70 subdivision 23; 290.9725; 290A.03, subdivisions 11, 2.71 12, 13, 15; 290A.04, subdivisions 2, 4; 290A.15; 3.1 291.005, subdivision 1; 295.50, subdivisions 3, 4, 15; 3.2 295.52, subdivision 4; 295.53, subdivision 4a; 295.55, 3.3 subdivision 4; 295.57, subdivision 1; 296A.07, 3.4 subdivision 4, by adding a subdivision; 296A.08, 3.5 subdivision 3, by adding a subdivision; 296A.15, 3.6 subdivisions 1, 7; 296A.16, subdivision 2; 296A.21, 3.7 subdivisions 1, 4; 296A.24, subdivisions 1, 2; 3.8 297A.01, subdivisions 3, 5; 297A.07, subdivision 3; 3.9 297A.25, subdivisions 3, 11, 28; 297A.61, subdivisions 3.10 2, 3, 4, 6, 7, 9, 10, 12, 14, 16, 17, 19, 22, 23, by 3.11 adding subdivisions; 297A.64, subdivisions 3, 4, by 3.12 adding a subdivision; 297A.66, subdivisions 1, 3; 3.13 297A.67, subdivisions 2, 8, 23, 24, 25, by adding 3.14 subdivisions; 297A.68, subdivisions 2, 3, 5, 11, 13, 3.15 14, 18, 19, 25, by adding subdivisions; 297A.69, 3.16 subdivision 2; 297A.70, subdivisions 1, 2, 4, 7, 8, 3.17 10, 13, 14; 297A.71, subdivision 6, by adding 3.18 subdivisions; 297A.72, subdivision 1; 297A.75; 3.19 297A.77, subdivision 1; 297A.80; 297A.82, subdivisions 3.20 1, 3; 297A.86, subdivision 1; 297A.89, subdivision 1; 3.21 297A.90, subdivision 1; 297A.91; 297A.92, subdivision 3.22 2; 297A.94; 297A.99, subdivisions 7, 9; 297B.03; 3.23 297B.09, subdivision 1; 297E.02, subdivision 4; 3.24 297E.16, subdivisions 1, 2; 297F.09, subdivision 7; 3.25 297F.16, subdivision 4; 297F.20, subdivision 3; 3.26 297F.21, subdivisions 1, 2, 3; 297G.09, subdivision 6; 3.27 297G.15, subdivision 4; 297G.16, subdivisions 5, 7; 3.28 297G.20, subdivisions 3, 4; 297H.04, by adding a 3.29 subdivision; 297I.35, subdivision 2; 297I.40, 3.30 subdivisions 1, 2, 7; 297I.85, subdivision 7; 298.018, 3.31 subdivisions 1, 2; 298.17; 298.22, subdivision 2, by 3.32 adding a subdivision; 298.2211, subdivision 2; 3.33 298.2213, subdivision 3; 298.2214, subdivision 1; 3.34 298.223, subdivision 1; 298.225, subdivision 1; 3.35 298.24, subdivision 1; 298.27; 298.28, subdivisions 1, 3.36 3, 4, 6, 7, 9, 9a, 9b, 10, 11, 15; 298.282, 3.37 subdivision 1; 298.292, subdivision 2; 298.293; 3.38 298.296, subdivision 2; 298.2961; 298.298; 298.75, 3.39 subdivisions 1, 2, 7; 299D.03, subdivision 5; 353D.01, 3.40 subdivision 2; 357.021, subdivision 1a; 383B.79, by 3.41 adding a subdivision; 461.12, by adding a subdivision; 3.42 469.040, subdivision 5; 469.169, by adding a 3.43 subdivision; 469.174, subdivisions 10, 10a, 12; 3.44 469.175, subdivisions 1, 5, 6, 6b, by adding a 3.45 subdivision; 469.176, subdivisions 1b, 1e, 3, 4g, by 3.46 adding a subdivision; 469.1763, subdivisions 3, 6, by 3.47 adding subdivisions; 469.177, subdivision 1; 469.1771, 3.48 subdivisions 1, 2a; 469.178, by adding a subdivision; 3.49 469.1812, subdivision 2; 469.1813, subdivision 6; 3.50 469.202, subdivision 2; 471.58; 473.123, subdivisions 3.51 1, 4, 7; 473.146, subdivision 4; 473.39, by adding a 3.52 subdivision; 473.446, subdivision 1; 473.625; 473.843, 3.53 subdivision 3; 475.58, subdivision 1; 477A.011, 3.54 subdivisions 27, 34, 36, by adding subdivisions; 3.55 477A.013, subdivisions 8, 9; 477A.03, subdivision 2; 3.56 477A.11, subdivisions 3, 4; 477A.12; 477A.14; 3.57 477A.145; 480.181, subdivision 1; 487.33, subdivision 3.58 5; 488A.03, by adding a subdivision; 488A.20, by 3.59 adding a subdivision; 574.34, subdivision 1; 609.75, 3.60 subdivision 1; Laws 1986, chapter 396, section 5; Laws 3.61 1992, chapter 499, article 7, section 31, as amended; 3.62 Laws 1996, chapter 471, article 2, section 29; Laws 3.63 1999, chapter 243, article 4, section 19; Laws 2000, 3.64 chapter 490, article 1, section 2; Laws 2000, chapter 3.65 490, article 2, section 1; Laws 2000, chapter 490, 3.66 article 7, section 3; Laws 2000, chapter 490, article 3.67 8, section 17; Laws 2000, chapter 490, article 11, 3.68 section 26; proposing coding for new law in Minnesota 3.69 Statutes, chapters 103B; 204D; 245; 273; 290; 295; 3.70 296A; 297A; 297F; 297H; 299G; 375; 383A; 469; 473; 3.71 480; 484; proposing coding for new law as Minnesota 4.1 Statutes, chapters 144F; 290C; repealing Minnesota 4.2 Statutes 2000, sections 126C.30; 126C.31; 126C.32; 4.3 126C.33; 126C.34; 126C.35; 126C.36; 256.9657, 4.4 subdivision 2; 256B.19, subdivision 1b; 270.31; 4.5 270.32; 270.33; 270.34; 270.35; 270.36; 270.37; 4.6 270.38; 270.39; 272.02, subdivision 22; 273.1382; 4.7 273.37, subdivision 3; 289A.60, subdivision 3; 290.06, 4.8 subdivisions 25, 26; 290.0673; 290.068, subdivision 3; 4.9 290.095, subdivision 7; 290.23; 290.25; 290.31, 4.10 subdivisions 2, 2a, 3, 4, 5, 19; 290.9726, subdivision 4.11 7; 290A.04, subdivision 2j; 296A.16, subdivision 6; 4.12 296A.24, subdivision 3; 297A.61, subdivision 16; 4.13 297A.68, subdivision 21; 297A.71, subdivision 21; 4.14 297B.032; 297E.16, subdivision 3; 297F.21, subdivision 4.15 4; 297G.20, subdivision 5; 373.40, subdivision 7; 4.16 469.177, subdivisions 1a, 11; 469.1771, subdivision 4.17 2b; 473.123, subdivisions 2a, 3, 3a, 3c; 477A.011, 4.18 subdivisions 35, 36, 37; 477A.03, subdivision 4; 4.19 Minnesota Rules, parts 8120.0200; 8120.0500; 4.20 8120.0700; 8120.0900; 8120.1300; 8120.1600; 8120.2000; 4.21 8120.2100; 8120.2200; 8120.2300; 8120.2500; 8120.2700; 4.22 8120.2800; 8120.3000; 8120.3200; 8120.4300; 8120.4400; 4.23 8120.4500; 8120.4600; 8120.4900; 8120.5000; 8120.5100; 4.24 8120.5300. 4.25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 4.26 ARTICLE 1 4.27 REBATE 4.28 Section 1. Laws 2000, chapter 490, article 1, section 2, 4.29 is amended to read: 4.30 Sec. 2. [SALES TAX REBATE.] 4.31 (a) An individual who: 4.32 (1) was eligible for a credit under Laws 1998, chapter 389, 4.33 article 1, section 1, and who filed for or received that credit 4.34 on or before November 30, 2000; or 4.35 (2) was a resident of Minnesota for any part of 1998, and 4.36 filed a 1998 Minnesota income tax return on or before November 4.37 30, 2000, and had a tax liability before refundable credits on 4.38 that return of at least $1 but did not file the claim for credit 4.39 authorized under Laws 1998, chapter 389, article 1, section 1, 4.40 as amended, and who was not allowed to be claimed as a dependent 4.41 on a 1998 federal income tax return filed by another person; or 4.42 (3) had the property taxes payable on his or her homestead 4.43 abated to zero under Laws 1998, chapter 383, section 20, shall 4.44 receive a sales tax rebate. 4.45 (b) The sales tax rebate for taxpayers who qualify under 4.46 paragraph (a) as married filing joint or head of household must 4.47 be computed according to the following schedule: 5.1 Income Sales Tax Rebate 5.2 less than $2,500 $168 5.3 at least $2,500 but less than $5,000 $217 5.4 at least $5,000 but less than $10,000 $231 5.5 at least $10,000 but less than $15,000 $253 5.6 at least $15,000 but less than $20,000 $275 5.7 at least $20,000 but less than $25,000 $299 5.8 at least $25,000 but less than $30,000 $312 5.9 at least $30,000 but less than $35,000 $338 5.10 at least $35,000 but less than $40,000 $369 5.11 at least $40,000 but less than $45,000 $396 5.12 at least $45,000 but less than $50,000 $417 5.13 at least $50,000 but less than $60,000 $444 5.14 at least $60,000 but less than $70,000 $476 5.15 at least $70,000 but less than $80,000 $523 5.16 at least $80,000 but less than $90,000 $562 5.17 at least $90,000 but less than $100,000 $620 5.18 at least $100,000 but less than $120,000 $671 5.19 at least $120,000 but less than $140,000 $735 5.20 at least $140,000 but less than $160,000 $795 5.21 at least $160,000 but less than $180,000 $851 5.22 at least $180,000 but less than $200,000 $904 5.23 at least $200,000 but less than $400,000 $1,157 5.24 at least $400,000 but less than $600,000 $1,522 5.25 at least $600,000 but less than $800,000 $1,826 5.26 at least $800,000 but less than $1,000,000 $2,093 5.27 $1,000,000 and over $2,400 5.28 (c) The sales tax rebate for individuals who qualify under 5.29 paragraph (a) as single or married filing separately must be 5.30 computed according to the following schedule: 5.31 Income Sales Tax Rebate 5.32 less than $2,500 $95 5.33 at least $2,500 but less than $5,000 $116 5.34 at least $5,000 but less than $10,000 $137 5.35 at least $10,000 but less than $15,000 $184 5.36 at least $15,000 but less than $20,000 $210 6.1 at least $20,000 but less than $25,000 $228 6.2 at least $25,000 but less than $30,000 $238 6.3 at least $30,000 but less than $40,000 $259 6.4 at least $40,000 but less than $50,000 $290 6.5 at least $50,000 but less than $70,000 $342 6.6 at least $70,000 but less than $100,000 $435 6.7 at least $100,000 but less than $140,000 $524 6.8 at least $140,000 but less than $200,000 $632 6.9 at least $200,000 but less than $400,000 $857 6.10 at least $400,000 but less than $600,000 $1,128 6.11 $600,000 and over $1,200 6.12 (d) Individuals who were not residents of Minnesota for any 6.13 part of 1998 and who paid more than $10 in Minnesota sales tax 6.14 on nonbusiness consumer purchases in that year qualify for a 6.15 rebate under this paragraph only. Qualifying nonresidents must 6.16 file a claim for rebate on a form prescribed by the commissioner 6.17 by November 30, 2000. The claim must include receipts showing 6.18 the Minnesota sales tax paid and the date of the sale. Taxes 6.19 paid on purchases allowed in the computation of federal taxable 6.20 income or reimbursed by an employer are not eligible for the 6.21 rebate. The commissioner shall determine the qualifying taxes 6.22 paid and rebate the lesser of: 6.23 (1) 29.7 percent of that amount; or 6.24 (2) the maximum amount for which the claimant would have 6.25 been eligible as determined under paragraph (b) if the taxpayer 6.26 filed the 1998 federal income tax return as a married taxpayer 6.27 filing jointly or head of household, or as determined under 6.28 paragraph (c) for other taxpayers. 6.29 (e) "Income," for purposes of this section other than 6.30 paragraph (d), is taxable income as defined in section 63 of the 6.31 Internal Revenue Code of 1986, as amended through December 31, 6.32 1997, plus the sum of any additions to federal taxable income 6.33 for the taxpayer under Minnesota Statutes, section 290.01, 6.34 subdivision 19a, and reported on the original 1998 income tax 6.35 return, including subsequent adjustments to that return made 6.36 within the time limits specified in paragraph (l). For an 7.1 individual who was a resident of Minnesota for less than the 7.2 entire year, the sales tax rebate equals the sales tax rebate 7.3 calculated under paragraph (b) or (c) multiplied by the 7.4 percentage determined pursuant to Minnesota Statutes, section 7.5 290.06, subdivision 2c, paragraph (e), as calculated on the 7.6 original 1998 income tax return, including subsequent 7.7 adjustments to that return made within the time limits specified 7.8 in paragraph (l). For purposes of paragraph (d), "income" is 7.9 taxable income as defined in section 63 of the Internal Revenue 7.10 Code of 1986, as amended through December 31, 1997, and reported 7.11 on the taxpayer's original federal tax return for the first 7.12 taxable year beginning after December 31, 1997. 7.13 (f) Individuals who were residents of Minnesota for all of 7.14 1998, were not eligible for a rebate under paragraph (a), 7.15 attained the age of 18 on or before December 31, 1998, and 7.16 received in 1998 social security benefits as defined in section 7.17 86(d)(1) of the Internal Revenue Code of 1986, as amended 7.18 through December 31, 1999, are entitled to a rebate of $95. If 7.19 the Social Security Administration or Railroad Retirement Board 7.20 is paying benefits to a recipient by electronic funds transfers 7.21 in 2000, the rebate under this paragraph must be paid by the 7.22 commissioner through electronic funds transfer to the same 7.23 financial institution and into the same account into which the 7.24 Social Security Administration or Railroad Retirement Board 7.25 transfers social security benefits in calendar year 2000. 7.26 (g) An individual who: 7.27 (1) was allowed to be claimed as a dependent on a 1998 7.28 federal income tax return filed by another person; 7.29 (2) would have otherwise been eligible for a rebate under 7.30 clause (a)(2); and 7.31 (3) reported earned income as defined in section 7.32 32(c)(2)(A)(i) of the Internal Revenue Code, 7.33 is eligible for a rebate under this paragraph only. The rebate 7.34 under this paragraph equals 35 percent of the amount allowed 7.35 under the schedule in paragraph (c) based on the individual's 7.36 income. For an individual who was a resident of Minnesota for 8.1 less than the entire year, the sales tax rebate equals the 8.2 rebate calculated under this paragraph multiplied by the 8.3 percentage determined pursuant to Minnesota Statutes, section 8.4 290.06, subdivision 2c, paragraph (e), as calculated on the 8.5 original 1998 income tax return. 8.6 (h) An individual who 8.7 (1) was a resident of Minnesota for any part of 1998; 8.8 (2) was not eligible for a rebate under paragraph (a) or 8.9 (f); 8.10 (3) was not allowed to be claimed as a dependent on a 1998 8.11 federal income tax return by another person; and 8.12 (4) filed a 1998 Minnesota income tax return before 8.13 November 30, 2000, in order to 8.14 (i) claim a credit under section 290.067, 290.0671, or 8.15 290.0674; 8.16 (ii) claim a refund of withheld taxes; or 8.17 (iii) claim a refund of estimated taxes, 8.18 is eligible for a rebate under this paragraph only. For married 8.19 couples filing joint returns and heads of households, the rebate 8.20 equals the minimum amount in paragraph (b). For single filers 8.21 and married individuals filing separate returns, the rebate 8.22 equals the minimum amount in paragraph (c). For an individual 8.23 who was a resident of Minnesota for less than the entire year, 8.24 the sales tax rebate equals the rebate calculated under this 8.25 paragraph multiplied by the percentage determined pursuant to 8.26 Minnesota Statutes, section 290.06, subdivision 2c, paragraph 8.27 (e), as calculated on the original 1998 income tax return. 8.28 (i) For a fiscal year taxpayer, the dates in paragraphs (a) 8.29 through (d) are extended one month for each month in calendar 8.30 year 1998 that occurred prior to the start of the individual's 8.31 1998 fiscal tax year. 8.32 (j) Before payment, the commissioner of revenue shall 8.33 adjust the rebate as follows: the rebates calculated in 8.34 paragraphs (b), (c), (d), (f), (g), and (h) must be 8.35 proportionately reduced to account for (i) rebates under 8.36 paragraphs (g) and (h), and (ii) 1998 income tax returns that 9.1 are filed on or after January 1, 2000, but before June 1, 2000, 9.2 so that the estimated amount of sales tax rebates payable under 9.3 paragraphs (b), (c), (d), (f), (g), and (h) on the date the 9.4 rebate is processed does not exceed $635,600,000. The 9.5 adjustment under this paragraph is not a rule subject to 9.6 Minnesota Statutes, chapter 14. 9.7 (k) The commissioner of revenue may begin making sales tax 9.8 rebates by July 1, 2000. Sales tax rebates not paid by January 9.9 1, 2001, bear interest at the rate specified in Minnesota 9.10 Statutes, section 270.75. Sales tax rebates paid to individuals 9.11 qualifying under paragraph (x) bear interest at the rate 9.12 specified in Minnesota Statutes, section 270.75, beginning April 9.13 1, 2002. 9.14 (l) A sales tax rebate shall not be adjusted based on 9.15 changes to a 1998 income tax return that are made by order of 9.16 assessment after the date the rebate is processed, or made by 9.17 the taxpayer that are filed with the commissioner of revenue 9.18 after that date. 9.19 (m) Individuals who filed a joint income tax return for 9.20 1998 shall receive a joint sales tax rebate. After the sales 9.21 tax rebate has been issued, but before the check has been 9.22 cashed, either joint claimant may request a separate check for 9.23 one-half of the joint sales tax rebate. Notwithstanding 9.24 anything in this section to the contrary, if prior to payment, 9.25 the commissioner has been notified that persons who filed a 9.26 joint 1998 income tax return are living at separate addresses, 9.27 as indicated on their 1999 income tax return or otherwise, the 9.28 commissioner may issue separate checks to each person. The 9.29 amount payable to each person is one-half of the total joint 9.30 rebate. 9.31 (n) If a rebate is received by the estate of a deceased 9.32 individual after the probate estate has been closed, and if the 9.33 original rebate check is returned to the commissioner with a 9.34 copy of the decree of descent or final account of the estate, 9.35 social security numbers, and addresses of the beneficiaries, the 9.36 commissioner may issue separate checks in proportion to their 10.1 share in the residuary estate in the names of the residuary 10.2 beneficiaries of the estate. 10.3 (o) The sales tax rebate is a "Minnesota tax law" for 10.4 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 10.5 (p) The sales tax rebate is "an overpayment of any tax 10.6 collected by the commissioner" for purposes of Minnesota 10.7 Statutes, section 270.07, subdivision 5. For purposes of this 10.8 paragraph, a joint sales tax rebate is payable to each spouse 10.9 equally. 10.10 (q) If the commissioner of revenue cannot locate an 10.11 individual entitled to a sales tax rebate by July 1, 2002, or if 10.12 an individual to whom a sales tax rebate was issued has not 10.13 cashed the check by July 1, 2002, the right to the sales tax 10.14 rebate lapses and the check must be deposited in the general 10.15 fund. 10.16 (r) Individuals entitled to a sales tax rebate pursuant to 10.17 paragraph (a), (f), (g), or (h) but who did not receive one, and 10.18 individuals who receive a sales tax rebate that was not 10.19 correctly computed, must file a claim with the commissioner 10.20 before July 1, 2001, in a form prescribed by the commissioner. 10.21 These claims must be treated as if they are a claim for refund 10.22 under Minnesota Statutes, section 289A.50, subdivisions 4 and 7. 10.23 (s) The sales tax rebate is a refund subject to revenue 10.24 recapture under Minnesota Statutes, chapter 270A. The 10.25 commissioner of revenue shall remit the entire refund to the 10.26 claimant agency, which shall, upon the request of the spouse who 10.27 does not owe the debt, refund one-half of the joint sales tax 10.28 rebate to the spouse who does not owe the debt. 10.29 (t) The rebate is a reduction of fiscal year 2000 sales tax 10.30 revenues. The amount necessary to make the sales tax rebates 10.31 and interest provided in this section is appropriated from the 10.32 general fund to the commissioner of revenue in fiscal year 2000 10.33 and is available until June 30, 2002. 10.34 (u) If a sales tax rebate check is cashed by someone other 10.35 than the payee or payees of the check, and the commissioner of 10.36 revenue determines that the check has been forged or improperly 11.1 endorsed or the commissioner determines that a rebate was 11.2 overstated or erroneously issued, the commissioner may issue an 11.3 order of assessment for the amount of the check or the amount 11.4 the check is overstated against the person or persons cashing 11.5 it. The assessment must be made within two years after the 11.6 check is cashed, but if cashing the check constitutes theft 11.7 under Minnesota Statutes, section 609.52, or forgery under 11.8 Minnesota Statutes, section 609.631, the assessment can be made 11.9 at any time. The assessment may be appealed administratively 11.10 and judicially. The commissioner may take action to collect the 11.11 assessment in the same manner as provided by Minnesota Statutes, 11.12 chapter 289A, for any other order of the commissioner assessing 11.13 tax. 11.14 (v) Notwithstanding Minnesota Statutes, sections 9.031, 11.15 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 11.16 commissioner of revenue may take whatever actions the 11.17 commissioner deems necessary to pay the rebates required by this 11.18 section, and may, in consultation with the commissioner of 11.19 finance and the state treasurer, contract with a private vendor 11.20 or vendors to process, print, and mail the rebate checks or 11.21 warrants required under this section and receive and disburse 11.22 state funds to pay those checks or warrants. 11.23 (w) The commissioner may pay rebates required by this 11.24 section by electronic funds transfer to individuals who 11.25 requested that their 1999 individual income tax refund be paid 11.26 through electronic funds transfer. The commissioner may make 11.27 the electronic funds transfer payments to the same financial 11.28 institution and into the same account as the 1999 individual 11.29 income tax refund. 11.30 (x) An individual who: 11.31 (1) was a resident of Minnesota for any part of 1998; 11.32 (2) filed a 1998 federal income tax return on or before 11.33 November 30, 2000; 11.34 (3) had a federal tax liability before refundable credits 11.35 on that return of at least $1; and 11.36 (4) does not qualify for a rebate under paragraph (a), (f), 12.1 (g), or (h), 12.2 is eligible for a rebate under this paragraph only. 12.3 Qualifying individuals must file a claim for rebate on a form 12.4 prescribed by the commissioner by December 31, 2001. The claim 12.5 must include a copy of the individual's 1998 federal income tax 12.6 return and a copy of the individual's 1998 Minnesota income tax 12.7 return. An individual who was allowed to be claimed as a 12.8 dependent on a 1998 federal income tax return filed by another 12.9 person is eligible for a rebate under this paragraph only if the 12.10 individual had in 1998 earned income as defined in section 12.11 32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a 12.12 dependent eligible for a rebate under this paragraph equals 35 12.13 percent of the amount allowed under the schedule in paragraph 12.14 (c) based on the individual's income. For all other individuals 12.15 who qualify under this paragraph, the rebate equals the amount 12.16 allowed based on the individual's income under the schedule in 12.17 paragraph (b) for married couples filing joint returns and heads 12.18 of household and the amount allowed based on the individual's 12.19 income under the schedule in paragraph (c) for single filers and 12.20 heads of household, provided, however, that any rebate payable 12.21 under this paragraph to an individual who was a part-year 12.22 resident of Minnesota in 1998 must be prorated according to the 12.23 formula applicable to part-year residents in paragraph (e). 12.24 The limitation on the total amount of rebates in Laws 2000, 12.25 chapter 490, article 1, section 2, paragraph (j), does not apply 12.26 to rebates issued under this paragraph. To the extent 12.27 applicable, all other provisions of Laws 2000, chapter 490, 12.28 article 1, section 2, apply to the rebates paid under this 12.29 paragraph, including the adjustments made under section 2, 12.30 paragraph (j). 12.31[EFFECTIVE DATE.] This section is effective the day 12.32 following final enactment. 12.33 Sec. 2. [STATEMENT OF PURPOSE.] 12.34 (a) The state of Minnesota derives revenues from a variety 12.35 of taxes, fees, and other sources, including the state sales tax. 12.36 (b) It is fair and reasonable to refund the existing state 13.1 budget surplus in the form of a rebate of nonbusiness consumer 13.2 sales taxes paid by individuals in calendar year 1999. 13.3 (c) Information concerning the amount of sales tax paid at 13.4 various income levels is contained in the Minnesota tax 13.5 incidence report, which is written by the commissioner of 13.6 revenue and presented to the legislature according to Minnesota 13.7 Statutes, section 270.0682. 13.8 (d) It is fair and reasonable to use information contained 13.9 in the Minnesota tax incidence report to determine the 13.10 proportionate share of the sales tax rebate due each eligible 13.11 taxpayer since no effective or practical mechanism exists for 13.12 determining the amount of actual sales tax paid by each eligible 13.13 individual. 13.14 Sec. 3. [SALES TAX REBATE.] 13.15 Subdivision 1. [ELIGIBILITY; REBATE BASED ON INCOME.] An 13.16 individual who was a resident of Minnesota for any part of 1999, 13.17 and filed a 1999 Minnesota income tax return on or before 13.18 November 30, 2001, and had a tax liability before refundable 13.19 credits on that return of at least $1 and who was not allowed to 13.20 be claimed as a dependent on a 1999 federal income tax return 13.21 filed by another person is eligible for a sales tax rebate based 13.22 on income under either subdivision 2 or 3. 13.23 Subd. 2. [MARRIED JOINT AND HEAD OF HOUSEHOLD FILERS.] The 13.24 sales tax rebate for taxpayers who qualify under subdivision 1 13.25 and are married filing joint or head of household filers is 13.26 computed according to the following schedule: 13.27 Income Sales Tax Rebate 13.28 less than $2,500 $116 13.29 at least $2,500 but less than $5,000 $145 13.30 at least $5,000 but less than $10,000 $152 13.31 at least $10,000 but less than $15,000 $167 13.32 at least $15,000 but less than $20,000 $189 13.33 at least $20,000 but less than $25,000 $205 13.34 at least $25,000 but less than $30,000 $218 13.35 at least $30,000 but less than $35,000 $237 13.36 at least $35,000 but less than $40,000 $258 14.1 at least $40,000 but less than $45,000 $280 14.2 at least $45,000 but less than $50,000 $298 14.3 at least $50,000 but less than $60,000 $305 14.4 at least $60,000 but less than $70,000 $318 14.5 at least $70,000 but less than $80,000 $346 14.6 at least $80,000 but less than $90,000 $374 14.7 at least $90,000 but less than $100,000 $405 14.8 at least $100,000 but less than $120,000 $439 14.9 at least $120,000 but less than $140,000 $480 14.10 at least $140,000 but less than $160,000 $519 14.11 at least $160,000 but less than $180,000 $556 14.12 at least $180,000 but less than $200,000 $591 14.13 at least $200,000 but less than $400,000 $756 14.14 at least $400,000 but less than $600,000 $994 14.15 at least $600,000 but less than $800,000 $1,193 14.16 at least $800,000 but less than $1,000,000 $1,368 14.17 $1,000,000 and over $1,600 14.18 Subd. 3. [SINGLE AND MARRIED SEPARATE FILERS.] The sales 14.19 tax rebate for individuals who qualify under subdivision 1 as 14.20 single or married filing separately must be computed according 14.21 to the following schedule: 14.22 Income Sales Tax Rebate 14.23 less than $2,500 $59 14.24 at least $2,500 but less than $5,000 $62 14.25 at least $5,000 but less than $10,000 $82 14.26 at least $10,000 but less than $15,000 $98 14.27 at least $15,000 but less than $20,000 $113 14.28 at least $20,000 but less than $25,000 $127 14.29 at least $25,000 but less than $30,000 $152 14.30 at least $30,000 but less than $40,000 $165 14.31 at least $40,000 but less than $50,000 $182 14.32 at least $50,000 but less than $70,000 $233 14.33 at least $70,000 but less than $100,000 $322 14.34 at least $100,000 but less than $140,000 $388 14.35 at least $140,000 but less than $200,000 $469 14.36 at least $200,000 but less than $400,000 $636 15.1 $400,000 and over $800 15.2 Subd. 4. [NONRESIDENTS.] Individuals who were not 15.3 residents of Minnesota for any part of 1999 and who paid more 15.4 than $10 in Minnesota sales tax under Minnesota Statutes, 15.5 chapter 297A, on nonbusiness consumer purchases in that year 15.6 qualify for a rebate under this subdivision only. Qualifying 15.7 nonresidents must file a claim for rebate on a form prescribed 15.8 by the commissioner by November 30, 2001. The claim must 15.9 include receipts showing the Minnesota sales tax paid and the 15.10 date of the sale. Taxes paid on purchases allowed in the 15.11 computation of federal taxable income or reimbursed by an 15.12 employer are not eligible for the rebate. The commissioner 15.13 shall determine the qualifying taxes paid and rebate the lesser 15.14 of: 15.15 (1) 20.24 percent of that amount; or 15.16 (2) the maximum amount for which the claimant would have 15.17 been eligible as determined under subdivision 2 if the taxpayer 15.18 filed the 1999 federal income tax return as a married taxpayer 15.19 filing jointly or head of household, or as determined under 15.20 subdivision 3 for other taxpayers. 15.21 Subd. 5. [DEFINITION OF INCOME.] "Income," for purposes of 15.22 this section other than subdivision 4, is taxable income as 15.23 defined in section 63 of the Internal Revenue Code of 1986, as 15.24 amended through December 31, 1998, plus the sum of any additions 15.25 to federal taxable income for the taxpayer under Minnesota 15.26 Statutes, section 290.01, subdivision 19a, and reported on the 15.27 original 1999 income tax return, including subsequent 15.28 adjustments to that return made within the time limits specified 15.29 in subdivision 12. For an individual who was a resident of 15.30 Minnesota for less than the entire year, the sales tax rebate 15.31 equals the sales tax rebate calculated under subdivision 2 or 3 15.32 multiplied by the percentage determined pursuant to Minnesota 15.33 Statutes, section 290.06, subdivision 2c, paragraph (e), as 15.34 calculated on the original 1999 income tax return, including 15.35 subsequent adjustments to that return made within the time 15.36 limits specified in subdivision 12. For purposes of subdivision 16.1 4, "income" is taxable income as defined in section 63 of the 16.2 Internal Revenue Code of 1986, as amended through December 31, 16.3 1998, and reported on the taxpayer's original federal tax return 16.4 for the first taxable year beginning after December 31, 1998. 16.5 Subd. 6. [SOCIAL SECURITY AND PUBLIC PENSION 16.6 RECIPIENTS.] (a) An individual qualifies for a rebate of $59 16.7 under this subdivision if the individual: 16.8 (1) was a resident of Minnesota for all of calendar year 16.9 1999; 16.10 (2) is not eligible for a rebate under subdivision 7; 16.11 (3) attained the age of 18 on or before December 31, 1999; 16.12 and 16.13 (4)(i) received social security benefits as defined in 16.14 section 86(d)(1) of the Internal Revenue Code of 1986, as 16.15 amended through December 31, 2000, in calendar year 1999; or 16.16 (ii) received federal, state or local public pension or 16.17 disability benefits in calendar year 1999. 16.18 (b) An individual or married couple who qualifies for a 16.19 rebate under both this subdivision and subdivision 1 is eligible 16.20 for the rebate under whichever subdivision provides a larger 16.21 amount. 16.22 (c) If the Social Security Administration, Railroad 16.23 Retirement Board, or the administrator of a public pension is 16.24 paying benefits to a recipient by electronic funds transfers in 16.25 calendar year 2001, the commissioner may pay the rebate under 16.26 this subdivision through electronic funds transfer to the same 16.27 financial institution and into the same account into which those 16.28 benefits are transferred in calendar year 2001. 16.29 (d) For purposes of this subdivision, "public pension plan 16.30 administrator" means (1) a state and local public pension 16.31 administrator, (2) the federal Civil Service Retirement System, 16.32 (3) the United States Department of Defense for the military 16.33 retirement and survivors benefit programs, and (4) the Federal 16.34 Employees Retirement System. 16.35 (e) A state and local public pension administrator is an 16.36 entity paying benefits under a pension plan enumerated in 17.1 Minnesota Statutes, section 356.20, subdivision 2. Each state 17.2 and local pension administrator shall provide to the 17.3 commissioner of revenue, in a form the commissioner prescribes, 17.4 a list of individuals to whom it pays benefits that meet the 17.5 requirements of paragraph (a), clauses (1) and (3). 17.6 Subd. 7. [DEPENDENTS.] An individual who: 17.7 (1) was allowed to be claimed as a dependent on a 1999 17.8 federal income tax return filed by another person; 17.9 (2) would have otherwise been eligible for a rebate under 17.10 subdivision 1; and 17.11 (3) reported earned income as defined in section 17.12 32(c)(2)(A)(i) of the Internal Revenue Code, 17.13 is eligible for a rebate under this subdivision only. The 17.14 rebate under this subdivision equals 35 percent of the amount 17.15 allowed under the schedule in subdivision 3 based on the 17.16 individual's income. For an individual who was a resident of 17.17 Minnesota for less than the entire year, the sales tax rebate 17.18 equals the rebate calculated under this subdivision multiplied 17.19 by the percentage determined pursuant to Minnesota Statutes, 17.20 section 290.06, subdivision 2c, paragraph (e), as calculated on 17.21 the original 1999 income tax return. 17.22 Subd. 8. [CREDIT RECIPIENTS.] An individual who 17.23 (1) was a resident of Minnesota for any part of 1999; 17.24 (2) was not eligible for a rebate under subdivision 1, 6, 17.25 or 7; 17.26 (3) was not allowed to be claimed as a dependent on a 1999 17.27 federal income tax return by another person; and 17.28 (4)(i) claimed a refund under Minnesota Statutes, chapter 17.29 290A, for property taxes paid in 2000 or rent constituting 17.30 property taxes paid in 1999; or 17.31 (ii) filed a 1999 Minnesota income tax return before 17.32 November 30, 2001, in order to 17.33 (A) claim a credit under section 290.067, 290.0671, or 17.34 290.0674; 17.35 (B) claim a refund of withheld taxes; or 17.36 (C) claim a refund of estimated taxes, 18.1 is eligible for a rebate under this subdivision only. For 18.2 married couples filing joint returns and heads of households, 18.3 the rebate equals the minimum amount in subdivision 2. For 18.4 single filers and married individuals filing separate returns 18.5 and for rebates based on refunds under Minnesota Statutes, 18.6 chapter 290A, the rebate equals the minimum amount in 18.7 subdivision 3. For an individual who was a resident of 18.8 Minnesota for less than the entire year, the sales tax rebate 18.9 equals the rebate calculated under this subdivision multiplied 18.10 by the percentage determined under Minnesota Statutes, section 18.11 290.06, subdivision 2c, paragraph (e), as calculated on the 18.12 original 1999 income tax return. 18.13 Subd. 9. [CLAIMS BASED ON FEDERAL LIABILITIES.] An 18.14 individual who: 18.15 (1) was a resident of Minnesota for any part of 1999; 18.16 (2) filed a 1999 federal income tax return on or before 18.17 November 30, 2001; 18.18 (3) had a federal tax liability before refundable credits 18.19 on that return of at least $1; and 18.20 (4) does not qualify for a rebate under subdivision 1, 6, 18.21 7, or 8, 18.22 is eligible for a rebate under this paragraph only. 18.23 Qualifying individuals must file a claim for rebate on a form 18.24 prescribed by the commissioner by December 31, 2001. The claim 18.25 must include a copy of the individual's 1999 federal income tax 18.26 return and a copy of the individual's 1999 Minnesota income tax 18.27 return. An individual who was allowed to be claimed as a 18.28 dependent on a 1999 federal income tax return filed by another 18.29 person is eligible for a rebate under this paragraph only if the 18.30 individual had in 1999 earned income as defined in section 18.31 32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a 18.32 dependent eligible for a rebate under this paragraph equals 35 18.33 percent of the amount allowed under the schedule in subdivision 18.34 3 based on the individual's income. For all other individuals 18.35 who qualify under this paragraph, the rebate equals the amount 18.36 allowed based on the individual's income under the schedule in 19.1 subdivision 2 for married couples filing joint returns and heads 19.2 of household and the amount allowed based on the individual's 19.3 income under the schedule in subdivision 3 for single filers and 19.4 heads of household, provided, however, that any rebate payable 19.5 under this paragraph to an individual who was a part-year 19.6 resident of Minnesota in 1998 must be prorated according to the 19.7 formula applicable to part-year residents in subdivision 5. 19.8 Subd. 10. [FISCAL YEAR TAXPAYERS.] For a fiscal year 19.9 taxpayer, the dates in subdivisions 1 through 4 are extended one 19.10 month for each month in calendar year 1999 that occurred prior 19.11 to the start of the individual's 1999 fiscal tax year. 19.12 Subd. 11. [PAYMENT DATES; INTEREST.] The commissioner of 19.13 revenue may begin paying sales tax rebates by July 1, 2001. 19.14 Sales tax rebates not paid by January 1, 2002, bear interest at 19.15 the rate specified in Minnesota Statutes, section 270.75. 19.16 Subd. 12. [NO ADJUSTMENTS AFTER PROCESSING.] A sales tax 19.17 rebate may not be adjusted based on changes to a 1999 income tax 19.18 return that are made by order of assessment after the date the 19.19 rebate is processed, or made by the taxpayer that are filed with 19.20 the commissioner of revenue after that date. 19.21 Subd. 13. [JOINT REBATE RULES.] Individuals who filed a 19.22 joint income tax return for 1999 must receive a joint sales tax 19.23 rebate. After the sales tax rebate has been issued, but before 19.24 the check has been cashed, either joint claimant may request a 19.25 separate check for one-half of the joint sales tax rebate. 19.26 Notwithstanding anything in this section to the contrary, if 19.27 prior to payment, the commissioner has been notified that 19.28 persons who filed a joint 1999 income tax return are living at 19.29 separate addresses, as indicated on their 2000 income tax return 19.30 or otherwise, the commissioner may issue separate checks to each 19.31 person. The amount payable to each person is one-half of the 19.32 total joint rebate. 19.33 Subd. 14. [DECEASED INDIVIDUALS.] If a rebate is received 19.34 by the estate of a deceased individual after the probate estate 19.35 has been closed, and if the original rebate check is returned to 19.36 the commissioner with a copy of the decree of descent or final 20.1 account of the estate, social security numbers, and addresses of 20.2 the beneficiaries, the commissioner may issue separate checks in 20.3 proportion to their share in the residuary estate in the names 20.4 of the residuary beneficiaries of the estate. 20.5 Subd. 15. [APPLICATION OF OTHER LAW.] (a) The sales tax 20.6 rebate is a "Minnesota tax law" for purposes of Minnesota 20.7 Statutes, section 270B.01, subdivision 8. 20.8 (b) The sales tax rebate is "an overpayment of any tax 20.9 collected by the commissioner" for purposes of Minnesota 20.10 Statutes, section 270.07, subdivision 5. For purposes of this 20.11 subdivision, a joint sales tax rebate is payable to each spouse 20.12 equally. 20.13 (c) The sales tax rebate is a refund subject to revenue 20.14 recapture under Minnesota Statutes, chapter 270A. The 20.15 commissioner of revenue shall remit the entire refund to the 20.16 claimant agency, which shall, upon the request of the spouse who 20.17 does not owe the debt, refund one-half of the joint sales tax 20.18 rebate to the spouse who does not owe the debt. 20.19 Subd. 16. [LAPSE OF ENTITLEMENT.] If the commissioner of 20.20 revenue cannot locate an individual entitled to a sales tax 20.21 rebate by July 1, 2003, or if an individual to whom a sales tax 20.22 rebate was issued has not cashed the check by July 1, 2003, the 20.23 right to the sales tax rebate lapses and the check must be 20.24 deposited in the general fund. 20.25 Subd. 17. [CLAIMS FOR UNPAID REBATES.] Individuals 20.26 entitled to a sales tax rebate pursuant to subdivision 1, 6, 7, 20.27 8, or 9 but who did not receive one, and individuals who receive 20.28 a sales tax rebate that was not correctly computed, must file a 20.29 claim with the commissioner before July 1, 2002, in a form 20.30 prescribed by the commissioner. These claims must be treated as 20.31 if they are a claim for refund under Minnesota Statutes, section 20.32 289A.50, subdivisions 4 and 7. 20.33 Subd. 18. [APPROPRIATION.] The rebate is a reduction of 20.34 fiscal year 2001 sales tax revenues. The amount necessary to 20.35 make the sales tax rebates and interest provided in this section 20.36 is appropriated from the general fund to the commissioner of 21.1 revenue in fiscal year 2001 and is available until June 30, 2003. 21.2 Subd. 19. [ILLEGALLY CASHED CHECKS.] If a sales tax rebate 21.3 check is cashed by someone other than the payee or payees of the 21.4 check, and the commissioner of revenue determines that the check 21.5 has been forged or improperly endorsed or the commissioner 21.6 determines that a rebate was overstated or erroneously issued, 21.7 the commissioner may issue an order of assessment for the amount 21.8 of the check or the amount the check is overstated against the 21.9 person or persons cashing it. The assessment must be made 21.10 within two years after the check is cashed, but if cashing the 21.11 check constitutes theft under Minnesota Statutes, section 21.12 609.52, or forgery under Minnesota Statutes, section 609.631, 21.13 the assessment can be made at any time. The assessment may be 21.14 appealed administratively and judicially. The commissioner may 21.15 take action to collect the assessment in the same manner as 21.16 provided by Minnesota Statutes, chapter 289A, for any other 21.17 order of the commissioner assessing tax. 21.18 Subd. 20. [AUTHORITY TO CONTRACT WITH VENDOR.] 21.19 Notwithstanding Minnesota Statutes, sections 9.031, 16A.40, 21.20 16B.49, 16B.50, and any other law to the contrary, the 21.21 commissioner of revenue may take whatever actions the 21.22 commissioner deems necessary to pay the rebates required by this 21.23 section, and may, in consultation with the commissioner of 21.24 finance and the state treasurer, contract with a private vendor 21.25 or vendors to process, print, and mail the rebate checks or 21.26 warrants required under this section and receive and disburse 21.27 state funds to pay those checks or warrants. 21.28 Subd. 21. [ELECTRONIC PAYMENT.] The commissioner may pay 21.29 rebates required by this section by electronic funds transfer to 21.30 individuals who requested that their 2000 individual income tax 21.31 refund be paid through electronic funds transfer. The 21.32 commissioner may make the electronic funds transfer payments to 21.33 the same financial institution and into the same account as the 21.34 2000 individual income tax refund. 21.35 Subd. 22. [ADJUSTMENTS.] Before payment, the commissioner 21.36 of revenue shall adjust the rebate as follows: 22.1 the rebates calculated in subdivisions 2, 3, 4, 6, 7, and 8 22.2 must be proportionately reduced to account for (i) rebates under 22.3 subdivisions 7 and 8, and (ii) 1999 income tax returns that are 22.4 filed on or after January 1, 2001, but before April 1, 2001, so 22.5 that the estimated amount of sales tax rebates payable under 22.6 subdivisions 2, 3, 4, 6, 7, 8, and 9 on the date the rebate is 22.7 processed does not exceed $425,000,000. The adjustment under 22.8 this subdivision is not a rule subject to Minnesota Statutes, 22.9 chapter 14. 22.10 Sec. 4. [APPROPRIATIONS.] 22.11 (a) $500,000 in fiscal year 2001 and $1,231,600 in fiscal 22.12 year 2002 are appropriated from the general fund to the 22.13 commissioner of revenue to administer the sales tax rebates in 22.14 section 3. Any unencumbered balance remaining on June 30, 2001, 22.15 does not cancel but is available for expenditure by the 22.16 commissioner of revenue until June 30, 2002. Notwithstanding 22.17 Minnesota Statutes, section 16A.285, the commissioner of revenue 22.18 may not use this appropriation for any purpose other than 22.19 administering the sales tax rebates. This is a one-time 22.20 appropriation and may not be added to the agency's budget base. 22.21 (b) $410,000 is appropriated from the general fund to the 22.22 state treasurer to pay the cost of clearing sales tax rebate 22.23 checks through commercial banks. 22.24 (c) The amount necessary to pay the rebates under section 1 22.25 is appropriated from the general fund to the commissioner of 22.26 revenue for fiscal years 2001 and 2002. 22.27[EFFECTIVE DATE.] This section is effective the day 22.28 following final enactment. 22.29 ARTICLE 2 22.30 PROPERTY TAX REFORM 22.31 Section 1. Minnesota Statutes 2000, section 126C.17, 22.32 subdivision 2, is amended to read: 22.33 Subd. 2. [REFERENDUM ALLOWANCE LIMIT.] Notwithstanding 22.34 subdivision 1, a district's referendum allowance must not exceed 22.35 the greater of: 22.36 (1) the district's referendum allowance for fiscal year 23.1 1994 times 1.056; 23.2 (2) 25 percent of the formula allowance; or 23.3 (3) for a newly reorganized district created after July 1, 23.4 1994, the sum of the referendum revenue authority for the 23.5 reorganizing districts for the fiscal year preceding the 23.6 reorganization, divided by the sum of the resident marginal cost 23.7 pupil units of the reorganizing districts for the fiscal year 23.8 preceding the reorganization. 23.9[EFFECTIVE DATE.] This section is effective for revenue for 23.10 fiscal year 2003 and thereafter. 23.11 Sec. 2. Minnesota Statutes 2000, section 126C.17, is 23.12 amended by adding a subdivision to read: 23.13 Subd. 7a. [REFERENDUM TAX BASE REPLACEMENT AID.] For 23.14 fiscal year 2003 and thereafter, each school district that has a 23.15 referendum allowance under subdivision 1 in excess of $150 is 23.16 eligible for referendum tax base replacement aid. The aid for 23.17 each eligible district is equal to the rate determined by 23.18 dividing the amount of the referendum levy which exceeds $150 23.19 times the district's resident marginal cost pupil units by the 23.20 district's referendum market value multiplied by the district's 23.21 market value of class 3 property. The referendum tax base 23.22 replacement aid for each eligible district must be used to 23.23 reduce the district's referendum levy and must be paid to the 23.24 district each year that the referendum authority remains in 23.25 effect. 23.26 The commissioner of revenue, in consultation with the 23.27 commissioner of children, families, and learning, shall certify 23.28 the tax rate determined under this subdivision to the county 23.29 auditor of each county in which a school district has a rate 23.30 determined to be greater than zero. 23.31 Sec. 3. Minnesota Statutes 2000, section 273.11, 23.32 subdivision 1a, is amended to read: 23.33 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 23.34 property classified as agricultural homestead or nonhomestead, 23.35 residential homestead or nonhomestead, or noncommercial seasonal 23.36 recreational residential, the assessor shall compare the value 24.1 withthatthe taxable portion of the value determined in the 24.2 preceding assessment.The amount of the increase entered in the24.3current assessment shall not exceed the greater of (1) 8.524.4percent of the value in the preceding assessment, or (2) 1524.5percent of the difference between the current assessment and the24.6preceding assessment.24.7 For assessment year 2002, the amount of the increase shall 24.8 not exceed the greater of (1) 10 percent of the value in the 24.9 preceding assessment, or (2) 15 percent of the difference 24.10 between the current assessment and the preceding assessment. 24.11 For assessment year 2003, the amount of the increase shall 24.12 not exceed the greater of (1) 12 percent of the value in the 24.13 preceding assessment, or (2) 20 percent of the difference 24.14 between the current assessment and the preceding assessment. 24.15 For assessment year 2004, the amount of the increase shall 24.16 not exceed the greater of (1) 15 percent of the value in the 24.17 preceding assessment, or (2) 25 percent of the difference 24.18 between the current assessment and the preceding assessment. 24.19 For assessment year 2005, the amount of the increase shall 24.20 not exceed the greater of (1) 15 percent of the value in the 24.21 preceding assessment, or (2) 33 percent of the difference 24.22 between the current assessment and the preceding assessment. 24.23 For assessment year 2006, the amount of the increase shall 24.24 not exceed the greater of (1) 15 percent of the value in the 24.25 preceding assessment, or (2) 50 percent of the difference 24.26 between the current assessment and the preceding assessment. 24.27 This limitation shall not apply to increases in value due 24.28 to improvements. For purposes of this subdivision, the term 24.29 "assessment" means the value prior to any exclusion under 24.30 subdivision 16. 24.31 The provisions of this subdivision shall be in effectonly24.32 through assessment year20012005 as provided in this 24.33 subdivision. 24.34 For purposes of the assessment/sales ratio study conducted 24.35 under section 127A.48, and the computation of state aids paid 24.36 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 25.1 477A, market values and net tax capacities determined under this 25.2 subdivision and subdivision 16, shall be used. 25.3[EFFECTIVE DATE.] This section is effective the day 25.4 following final enactment. 25.5 Sec. 4. Minnesota Statutes 2000, section 273.13, 25.6 subdivision 22, is amended to read: 25.7 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 25.8 23, real estate which is residential and used for homestead 25.9 purposes is class 1. The market value of class 1a property must 25.10 be determined based upon the value of the house, garage, and 25.11 land. 25.12 The first$76,000$200,000 of market value of class 1a 25.13 property has a net class rate of one percent of its market 25.14 value; and the market value of class 1a property that 25.15 exceeds$76,000$200,000 has a class rate of1.651.5 percent of 25.16 its market value. 25.17 (b) Class 1b property includes homestead real estate or 25.18 homestead manufactured homes used for the purposes of a 25.19 homestead by 25.20 (1) any blind person, or the blind person and the blind 25.21 person's spouse; or 25.22 (2) any person, hereinafter referred to as "veteran," who: 25.23 (i) served in the active military or naval service of the 25.24 United States; and 25.25 (ii) is entitled to compensation under the laws and 25.26 regulations of the United States for permanent and total 25.27 service-connected disability due to the loss, or loss of use, by 25.28 reason of amputation, ankylosis, progressive muscular 25.29 dystrophies, or paralysis, of both lower extremities, such as to 25.30 preclude motion without the aid of braces, crutches, canes, or a 25.31 wheelchair; and 25.32 (iii) has acquired a special housing unit with special 25.33 fixtures or movable facilities made necessary by the nature of 25.34 the veteran's disability, or the surviving spouse of the 25.35 deceased veteran for as long as the surviving spouse retains the 25.36 special housing unit as a homestead; or 26.1 (3) any person who: 26.2 (i) is permanently and totally disabled and 26.3 (ii) receives 90 percent or more of total household income, 26.4 as defined in section 290A.03, subdivision 5, from 26.5 (A) aid from any state as a result of that disability; or 26.6 (B) supplemental security income for the disabled; or 26.7 (C) workers' compensation based on a finding of total and 26.8 permanent disability; or 26.9 (D) social security disability, including the amount of a 26.10 disability insurance benefit which is converted to an old age 26.11 insurance benefit and any subsequent cost of living increases; 26.12 or 26.13 (E) aid under the federal Railroad Retirement Act of 1937, 26.14 United States Code Annotated, title 45, section 228b(a)5; or 26.15 (F) a pension from any local government retirement fund 26.16 located in the state of Minnesota as a result of that 26.17 disability; or 26.18 (G) pension, annuity, or other income paid as a result of 26.19 that disability from a private pension or disability plan, 26.20 including employer, employee, union, and insurance plans and 26.21 (iii) has household income as defined in section 290A.03, 26.22 subdivision 5, of $50,000 or less; or 26.23 (4) any person who is permanently and totally disabled and 26.24 whose household income as defined in section 290A.03, 26.25 subdivision 5, is 275 percent or less of the federal poverty 26.26 level. 26.27 Property is classified and assessed under clause (4) only 26.28 if the government agency or income-providing source certifies, 26.29 upon the request of the homestead occupant, that the homestead 26.30 occupant satisfies the disability requirements of this paragraph. 26.31 Property is classified and assessed pursuant to clause (1) 26.32 only if the commissioner of economic security certifies to the 26.33 assessor that the homestead occupant satisfies the requirements 26.34 of this paragraph. 26.35 Permanently and totally disabled for the purpose of this 26.36 subdivision means a condition which is permanent in nature and 27.1 totally incapacitates the person from working at an occupation 27.2 which brings the person an income. The first $32,000 market 27.3 value of class 1b property has a net class rate of .45 percent 27.4 of its market value. The remaining market value of class 1b 27.5 property has a net class rate using the rates for class 1 or 27.6 class 2a property, whichever is appropriate, of similar market 27.7 value. 27.8 (c) Class 1c property is commercial use real property that 27.9 abuts a lakeshore line and is devoted to temporary and seasonal 27.10 residential occupancy for recreational purposes but not devoted 27.11 to commercial purposes for more than 250 days in the year 27.12 preceding the year of assessment, and that includes a portion 27.13 used as a homestead by the owner, which includes a dwelling 27.14 occupied as a homestead by a shareholder of a corporation that 27.15 owns the resort or a partner in a partnership that owns the 27.16 resort, even if the title to the homestead is held by the 27.17 corporation or partnership. For purposes of this clause, 27.18 property is devoted to a commercial purpose on a specific day if 27.19 any portion of the property, excluding the portion used 27.20 exclusively as a homestead, is used for residential occupancy 27.21 and a fee is charged for residential occupancy. Class 1c 27.22 property has a class rate ofone0.8 percent of total market 27.23 value with the following limitation: the area of the property 27.24 must not exceed 100 feet of lakeshore footage for each cabin or 27.25 campsite located on the property up to a total of 800 feet and 27.26 500 feet in depth, measured away from the lakeshore. If any 27.27 portion of the class 1c resort property is classified as class 27.28 4c under subdivision 25, the entire property must meet the 27.29 requirements of subdivision 25, paragraph (d), clause (1), to 27.30 qualify for class 1c treatment under this paragraph. 27.31 (d) Class 1d property includes structures that meet all of 27.32 the following criteria: 27.33 (1) the structure is located on property that is classified 27.34 as agricultural property under section 273.13, subdivision 23; 27.35 (2) the structure is occupied exclusively by seasonal farm 27.36 workers during the time when they work on that farm, and the 28.1 occupants are not charged rent for the privilege of occupying 28.2 the property, provided that use of the structure for storage of 28.3 farm equipment and produce does not disqualify the property from 28.4 classification under this paragraph; 28.5 (3) the structure meets all applicable health and safety 28.6 requirements for the appropriate season; and 28.7 (4) the structure is not salable as residential property 28.8 because it does not comply with local ordinances relating to 28.9 location in relation to streets or roads. 28.10 The market value of class 1d property has the same class 28.11 rates as class 1a property under paragraph (a). 28.12[EFFECTIVE DATE.] This section is effective for taxes 28.13 payable in 2002 and thereafter. 28.14 Sec. 5. Minnesota Statutes 2000, section 273.13, 28.15 subdivision 23, is amended to read: 28.16 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 28.17 land including any improvements that is homesteaded. The market 28.18 value of the house and garage and immediately surrounding one 28.19 acre of land has the same class rates as class 1a property under 28.20 subdivision 22. The value of the remaining land including 28.21 improvements up to $115,000 has a net class rate of 0.35 percent 28.22 of market value. The value of class 2a property over $115,000 28.23 of market value up to and including $600,000 market value has a 28.24 net class rate of0.80.6 percent of market value. The 28.25 remaining property over $600,000 market value has a class rate 28.26 of1.20one percent of market value. 28.27 (b) Class 2b property is (1) real estate, rural in 28.28 character and used exclusively for growing trees for timber, 28.29 lumber, and wood and wood products; (2) real estate that is not 28.30 improved with a structure and is used exclusively for growing 28.31 trees for timber, lumber, and wood and wood products, if the 28.32 owner has participated or is participating in a cost-sharing 28.33 program for afforestation, reforestation, or timber stand 28.34 improvement on that particular property, administered or 28.35 coordinated by the commissioner of natural resources; (3) real 28.36 estate that is nonhomestead agricultural land; or (4) a landing 29.1 area or public access area of a privately owned public use 29.2 airport. Class 2b property has a net class rate of1.20one 29.3 percent of market value. 29.4 (c) Agricultural land as used in this section means 29.5 contiguous acreage of ten acres or more, used during the 29.6 preceding year for agricultural purposes. "Agricultural 29.7 purposes" as used in this section means the raising or 29.8 cultivation of agricultural products or enrollment in the 29.9 Reinvest in Minnesota program under sections 103F.501 to 29.10 103F.535 or the federal Conservation Reserve Program as 29.11 contained in Public Law Number 99-198. Contiguous acreage on 29.12 the same parcel, or contiguous acreage on an immediately 29.13 adjacent parcel under the same ownership, may also qualify as 29.14 agricultural land, but only if it is pasture, timber, waste, 29.15 unusable wild land, or land included in state or federal farm 29.16 programs. Agricultural classification for property shall be 29.17 determined excluding the house, garage, and immediately 29.18 surrounding one acre of land, and shall not be based upon the 29.19 market value of any residential structures on the parcel or 29.20 contiguous parcels under the same ownership. 29.21 (d) Real estate, excluding the house, garage, and 29.22 immediately surrounding one acre of land, of less than ten acres 29.23 which is exclusively and intensively used for raising or 29.24 cultivating agricultural products, shall be considered as 29.25 agricultural land. 29.26 Land shall be classified as agricultural even if all or a 29.27 portion of the agricultural use of that property is the leasing 29.28 to, or use by another person for agricultural purposes. 29.29 Classification under this subdivision is not determinative 29.30 for qualifying under section 273.111. 29.31 The property classification under this section supersedes, 29.32 for property tax purposes only, any locally administered 29.33 agricultural policies or land use restrictions that define 29.34 minimum or maximum farm acreage. 29.35 (e) The term "agricultural products" as used in this 29.36 subdivision includes production for sale of: 30.1 (1) livestock, dairy animals, dairy products, poultry and 30.2 poultry products, fur-bearing animals, horticultural and nursery 30.3 stock described in sections 18.44 to 18.61, fruit of all kinds, 30.4 vegetables, forage, grains, bees, and apiary products by the 30.5 owner; 30.6 (2) fish bred for sale and consumption if the fish breeding 30.7 occurs on land zoned for agricultural use; 30.8 (3) the commercial boarding of horses if the boarding is 30.9 done in conjunction with raising or cultivating agricultural 30.10 products as defined in clause (1); 30.11 (4) property which is owned and operated by nonprofit 30.12 organizations used for equestrian activities, excluding racing; 30.13 (5) game birds and waterfowl bred and raised for use on a 30.14 shooting preserve licensed under section 97A.115; 30.15 (6) insects primarily bred to be used as food for animals; 30.16 and 30.17 (7) trees, grown for sale as a crop, and not sold for 30.18 timber, lumber, wood, or wood products. 30.19 (f) If a parcel used for agricultural purposes is also used 30.20 for commercial or industrial purposes, including but not limited 30.21 to: 30.22 (1) wholesale and retail sales; 30.23 (2) processing of raw agricultural products or other goods; 30.24 (3) warehousing or storage of processed goods; and 30.25 (4) office facilities for the support of the activities 30.26 enumerated in clauses (1), (2), and (3), 30.27 the assessor shall classify the part of the parcel used for 30.28 agricultural purposes as class 1b, 2a, or 2b, whichever is 30.29 appropriate, and the remainder in the class appropriate to its 30.30 use. The grading, sorting, and packaging of raw agricultural 30.31 products for first sale is considered an agricultural purpose. 30.32 A greenhouse or other building where horticultural or nursery 30.33 products are grown that is also used for the conduct of retail 30.34 sales must be classified as agricultural if it is primarily used 30.35 for the growing of horticultural or nursery products from seed, 30.36 cuttings, or roots and occasionally as a showroom for the retail 31.1 sale of those products. Use of a greenhouse or building only 31.2 for the display of already grown horticultural or nursery 31.3 products does not qualify as an agricultural purpose. 31.4 The assessor shall determine and list separately on the 31.5 records the market value of the homestead dwelling and the one 31.6 acre of land on which that dwelling is located. If any farm 31.7 buildings or structures are located on this homesteaded acre of 31.8 land, their market value shall not be included in this separate 31.9 determination. 31.10 (g) To qualify for classification under paragraph (b), 31.11 clause (4), a privately owned public use airport must be 31.12 licensed as a public airport under section 360.018. For 31.13 purposes of paragraph (b), clause (4), "landing area" means that 31.14 part of a privately owned public use airport properly cleared, 31.15 regularly maintained, and made available to the public for use 31.16 by aircraft and includes runways, taxiways, aprons, and sites 31.17 upon which are situated landing or navigational aids. A landing 31.18 area also includes land underlying both the primary surface and 31.19 the approach surfaces that comply with all of the following: 31.20 (i) the land is properly cleared and regularly maintained 31.21 for the primary purposes of the landing, taking off, and taxiing 31.22 of aircraft; but that portion of the land that contains 31.23 facilities for servicing, repair, or maintenance of aircraft is 31.24 not included as a landing area; 31.25 (ii) the land is part of the airport property; and 31.26 (iii) the land is not used for commercial or residential 31.27 purposes. 31.28 The land contained in a landing area under paragraph (b), clause 31.29 (4), must be described and certified by the commissioner of 31.30 transportation. The certification is effective until it is 31.31 modified, or until the airport or landing area no longer meets 31.32 the requirements of paragraph (b), clause (4). For purposes of 31.33 paragraph (b), clause (4), "public access area" means property 31.34 used as an aircraft parking ramp, apron, or storage hangar, or 31.35 an arrival and departure building in connection with the airport. 31.36[EFFECTIVE DATE.] This section is effective for taxes 32.1 payable in 2002 and thereafter. 32.2 Sec. 6. Minnesota Statutes 2000, section 273.13, 32.3 subdivision 24, is amended to read: 32.4 Subd. 24. [CLASS 3.] (a) Commercial and industrial 32.5 property and utility real and personal property is class 3a. 32.6 (1) Except as otherwise provided, each parcel of 32.7 commercial, industrial, or utility real property has a class 32.8 rate of2.4two percent of the first tier of market value, and 32.93.4three percent of the remaining market value. In the case of 32.10 contiguous parcels of property owned by the same person or 32.11 entity, only the value equal to the first-tier value of the 32.12 contiguous parcels qualifies for the reduced class rate, except 32.13 that contiguous parcels owned by the same person or entity shall 32.14 be eligible for the first-tier value class rate on each separate 32.15 business operated by the owner of the property, provided the 32.16 business is housed in a separate structure. For the purposes of 32.17 this subdivision, the first tier means the 32.18 first$150,000$300,000 of market value. Real property owned in 32.19 fee by a utility for transmission line right-of-way shall be 32.20 classified at the class rate for the higher tier. 32.21 For purposes of this subdivision, parcels are considered to 32.22 be contiguous even if they are separated from each other by a 32.23 road, street, waterway, or other similar intervening type of 32.24 property. Connections between parcels that consist of power 32.25 lines or pipelines do not cause the parcels to be contiguous. 32.26 Property owners who have contiguous parcels of property that 32.27 constitute separate businesses that may qualify for the 32.28 first-tier class rate shall notify the assessor by July 1, for 32.29 treatment beginning in the following taxes payable year. 32.30 (2) Personal property that is: (i) part of an electric 32.31 generation, transmission, or distribution system; or (ii) part 32.32 of a pipeline system transporting or distributing water, gas, 32.33 crude oil, or petroleum products; and (iii) not described in 32.34 clause (3), has a class rate as provided under clause (1) for 32.35 the first tier of market value and the remaining market value. 32.36 In the case of multiple parcels in one county that are owned by 33.1 one person or entity, only one first tier amount is eligible for 33.2 the reduced rate. 33.3 (3) The entire market value of personal property that is: 33.4 (i) tools, implements, and machinery of an electric generation, 33.5 transmission, or distribution system; (ii) tools, implements, 33.6 and machinery of a pipeline system transporting or distributing 33.7 water, gas, crude oil, or petroleum products; or (iii) the mains 33.8 and pipes used in the distribution of steam or hot or chilled 33.9 water for heating or cooling buildings, has a class rate as 33.10 provided under clause (1) for the remaining market value in 33.11 excess of the first tier. 33.12 (b) Employment property defined in section 469.166, during 33.13 the period provided in section 469.170, shall constitute class 33.14 3b. The class rates for class 3b property are determined under 33.15 paragraph (a). 33.16 (c)(1) Subject to the limitations of clause (2), structures 33.17 which are (i) located on property classified as class 3a, (ii) 33.18 constructed under an initial building permit issued after 33.19 January 2, 1996, (iii) located in a transit zone as defined 33.20 under section 473.3915, subdivision 3, (iv) located within the 33.21 boundaries of a school district, and (v) not primarily used for 33.22 retail or transient lodging purposes, shall have a class rate 33.23 equal to the lesser of 2.975 percent or the class rate of the 33.24 second tier of the commercial property rate under paragraph (a) 33.25 on any portion of the market value that does not qualify for the 33.26 first tier class rate under paragraph (a). As used in item (v), 33.27 a structure is primarily used for retail or transient lodging 33.28 purposes if over 50 percent of its square footage is used for 33.29 those purposes. A class rate equal to the lesser of 2.975 33.30 percent or the class rate of the second tier of the commercial 33.31 property class rate under paragraph (a) shall also apply to 33.32 improvements to existing structures that meet the requirements 33.33 of items (i) to (v) if the improvements are constructed under an 33.34 initial building permit issued after January 2, 1996, even if 33.35 the remainder of the structure was constructed prior to January 33.36 2, 1996. For the purposes of this paragraph, a structure shall 34.1 be considered to be located in a transit zone if any portion of 34.2 the structure lies within the zone. If any property once 34.3 eligible for treatment under this paragraph ceases to remain 34.4 eligible due to revisions in transit zone boundaries, the 34.5 property shall continue to receive treatment under this 34.6 paragraph for a period of three years. 34.7 (2) This clause applies to any structure qualifying for the 34.8 transit zone reduced class rate under clause (1) on January 2, 34.9 1999, or any structure meeting any of the qualification criteria 34.10 in item (i) and otherwise qualifying for the transit zone 34.11 reduced class rate under clause (1). Such a structure continues 34.12 to receive the transit zone reduced class rate until the 34.13 occurrence of one of the events in item (ii). Property 34.14 qualifying under item (i)(D), that is located outside of a city 34.15 of the first class, qualifies for the transit zone reduced class 34.16 rate as provided in that item. Property qualifying under item 34.17 (i)(E) qualifies for the transit zone reduced class rate as 34.18 provided in that item. 34.19 (i) A structure qualifies for the rate in this clause if it 34.20 is: 34.21 (A) property for which a building permit was issued before 34.22 December 31, 1998; or 34.23 (B) property for which a building permit was issued before 34.24 June 30, 2001, if: 34.25 (I) at least 50 percent of the land on which the structure 34.26 is to be built has been acquired or is the subject of signed 34.27 purchase agreements or signed options as of March 15, 1998, by 34.28 the entity that proposes construction of the project or an 34.29 affiliate of the entity; 34.30 (II) signed agreements have been entered into with one 34.31 entity or with affiliated entities to lease for the account of 34.32 the entity or affiliated entities at least 50 percent of the 34.33 square footage of the structure or the owner of the structure 34.34 will occupy at least 50 percent of the square footage of the 34.35 structure; and 34.36 (III) one of the following requirements is met: 35.1 the project proposer has submitted the completed data 35.2 portions of an environmental assessment worksheet by December 35.3 31, 1998; or 35.4 a notice of determination of adequacy of an environmental 35.5 impact statement has been published by April 1, 1999; or 35.6 an alternative urban areawide review has been completed by 35.7 April 1, 1999; or 35.8 (C) property for which a building permit is issued before 35.9 July 30, 1999, if: 35.10 (I) at least 50 percent of the land on which the structure 35.11 is to be built has been acquired or is the subject of signed 35.12 purchase agreements as of March 31, 1998, by the entity that 35.13 proposes construction of the project or an affiliate of the 35.14 entity; 35.15 (II) a signed agreement has been entered into between the 35.16 building developer and a tenant to lease for its own account at 35.17 least 200,000 square feet of space in the building; 35.18 (III) a signed letter of intent is entered into by July 1, 35.19 1998, between the building developer and the tenant to lease the 35.20 space for its own account; and 35.21 (IV) the environmental review process required by state law 35.22 was commenced by December 31, 1998; 35.23 (D) property for which an irrevocable letter of credit with 35.24 a housing and redevelopment authority was signed before December 35.25 31, 1998. The structure shall receive the transit zone reduced 35.26 class rate during construction and for the duration of time that 35.27 the original tenants remain in the building. Any unoccupied net 35.28 leasable square footage that is not leased within 36 months 35.29 after the certificate of occupancy has been issued for the 35.30 building shall not be eligible to receive the reduced class 35.31 rate. This reduced class rate applies only if a qualifying 35.32 entity continues to own the property; 35.33 (E) property, located in a city of the first class, and for 35.34 which the building permits for the excavation, the parking ramp, 35.35 and the office tower were issued prior to April 1, 1999, shall 35.36 receive the reduced class rate during construction and for the 36.1 first five assessment years immediately following its initial 36.2 occupancy provided that, when completed, at least 25 percent of 36.3 the net leasable square footage must be occupied by a qualifying 36.4 entity each year during this time period. In order to receive 36.5 the reduced class rate on the structure in any subsequent 36.6 assessment years, at least 50 percent of the rentable square 36.7 footage must be occupied by a qualifying entity. This reduced 36.8 class rate applies only if a qualifying entity continues to own 36.9 the property. 36.10 (ii) A structure specified by this clause, other than a 36.11 structure qualifying under clause (i)(D) or (E), shall continue 36.12 to receive the transit zone reduced class rate until the 36.13 occurrence of one of the following events: 36.14 (A) if the structure upon initial occupancy will be owner 36.15 occupied by the entity initially constructing the structure or 36.16 an affiliated entity, the structure receives the reduced class 36.17 rate until the structure ceases to be at least 50 percent 36.18 occupied by the entity or an affiliated entity, provided, if the 36.19 portion of the structure occupied by that entity or an affiliate 36.20 of the entity is less than 85 percent, the transit zone class 36.21 rate reduction for the portion of structure not so occupied 36.22 terminates upon the leasing of such space to any nonaffiliated 36.23 entity; or 36.24 (B) if the structure is leased by a single entity or 36.25 affiliated entity at the time of initial occupancy, the 36.26 structure shall receive the reduced class rate until the 36.27 structure ceases to be at least 50 percent occupied by the 36.28 entity or an affiliated entity, provided, if the portion of the 36.29 structure occupied by that entity or an affiliate of the entity 36.30 is less than 85 percent, the transit zone class rate reduction 36.31 for the portion of structure not so occupied shall terminate 36.32 upon the leasing of such space to any nonaffiliated entity; or 36.33 (C) if the structure meets the criteria in item (i)(C), the 36.34 structure shall receive the reduced class rate until the 36.35 expiration of the initial lease term of the applicable tenants. 36.36 Percentages occupied or leased shall be determined based 37.1 upon net leasable square footage in the structure. The assessor 37.2 shall allocate the value of the structure in the same fashion as 37.3 provided in the general law for portions of any structure 37.4 receiving and not receiving the transit tax class reduction as a 37.5 result of this clause. 37.6 (3) For purposes of paragraph (c), "qualifying entity" 37.7 means the entity owning the property on September 1, 2000, or an 37.8 affiliate of an entity that owned the property on September 1, 37.9 2000. 37.10[EFFECTIVE DATE.] This section is effective for taxes 37.11 payable in 2002 and thereafter. 37.12 Sec. 7. Minnesota Statutes 2000, section 273.13, 37.13 subdivision 25, is amended to read: 37.14 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 37.15 estate containing four or more units and used or held for use by 37.16 the owner or by the tenants or lessees of the owner as a 37.17 residence for rental periods of 30 days or more. Class 4a also 37.18 includes hospitals licensed under sections 144.50 to 144.56, 37.19 other than hospitals exempt under section 272.02, and contiguous 37.20 property used for hospital purposes, without regard to whether 37.21 the property has been platted or subdivided.Class 4a property37.22in a city with a population of 5,000 or less, that is (1)37.23located outside of the metropolitan area, as defined in section37.24473.121, subdivision 2, or outside any county contiguous to the37.25metropolitan area, and (2) whose city boundary is at least 1537.26miles from the boundary of any city with a population greater37.27than 5,000 has a class rate of 2.15 percent of market value.37.28All otherClass 4a property has a class rate of 2.4 percent of 37.29 market value unless it is qualified class 4a property. 37.30 For purposes of this paragraph,population has the same37.31meaning given in section 477A.011, subdivision 3"qualified 37.32 class 4a property" means class 4a property that either: 37.33 (1) is initially occupied as rental residential property 37.34 after January 1, 2002; or 37.35 (2) is certified by a municipal authority as being in 37.36 compliance with all applicable rental licensing requirements and 38.1 housing codes. 38.2 Qualified class 4a property has a class rate of 1.8 percent. 38.3 Additionally, the market value of qualified class 4a property 38.4 has a class rate that is 0.3 percent less than the rate 38.5 otherwise applicable to qualified class 4a property for any 38.6 taxes payable year if the owner provides proof satisfactory to 38.7 the assessor, in a form required by the commissioner, that at 38.8 least 50 percent of the tax savings attributable to the 38.9 reduction in class rate from 1.8 to 1.5 percent, is used to 38.10 reduce the rent charged to tenants of the property. This 38.11 reduction is available to qualified class 4a property only 38.12 beginning with assessments of the property in the second or 38.13 subsequent year of its occupancy as rental residential property. 38.14 (b) Class 4b includes: 38.15 (1) residential real estate containing less than four units 38.16 that does not qualify as class 4bb, other than seasonal 38.17 residential, and recreational; 38.18 (2) manufactured homes not classified under any other 38.19 provision; 38.20 (3) a dwelling, garage, and surrounding one acre of 38.21 property on a nonhomestead farm classified under subdivision 23, 38.22 paragraph (b) containing two or three units; 38.23 (4) unimproved property that is classified residential as 38.24 determined under subdivision 33. 38.25 Class 4b property has a class rate of1.651.3 percent of 38.26 market value on the first $200,000 of market value and 1.5 38.27 percent on the remainder for taxes payable in 2002 only, and a 38.28 class rate of one percent on the first $200,000 of market value 38.29 and 1.5 percent on the remainder for taxes payable in 2003 and 38.30 thereafter. 38.31 (c) Class 4bb includes: 38.32 (1) nonhomestead residential real estate containing one 38.33 unit, other than seasonal residential, and recreational; and 38.34 (2) a single family dwelling, garage, and surrounding one 38.35 acre of property on a nonhomestead farm classified under 38.36 subdivision 23, paragraph (b). 39.1 Class 4bb has a class rate of1.2one percent on the first 39.2$76,000$200,000 of market value and a class rate of1.651.5 39.3 percent of its market value that exceeds$76,000$200,000. 39.4 Property that has been classified as seasonal recreational 39.5 residential property at any time during which it has been owned 39.6 by the current owner or spouse of the current owner does not 39.7 qualify for class 4bb. 39.8 (d) Class 4c property includes: 39.9 (1) except as provided in subdivision 22, paragraph (c), 39.10 real property devoted to temporary and seasonal residential 39.11 occupancy for recreation purposes, including real property 39.12 devoted to temporary and seasonal residential occupancy for 39.13 recreation purposes and not devoted to commercial purposes for 39.14 more than 250 days in the year preceding the year of 39.15 assessment. For purposes of this clause, property is devoted to 39.16 a commercial purpose on a specific day if any portion of the 39.17 property is used for residential occupancy, and a fee is charged 39.18 for residential occupancy. In order for a property to be 39.19 classified as class 4c, seasonal recreational residential for 39.20 commercial purposes, at least 40 percent of the annual gross 39.21 lodging receipts related to the property must be from business 39.22 conducted during 90 consecutive days and either (i) at least 60 39.23 percent of all paid bookings by lodging guests during the year 39.24 must be for periods of at least two consecutive nights; or (ii) 39.25 at least 20 percent of the annual gross receipts must be from 39.26 charges for rental of fish houses, boats and motors, 39.27 snowmobiles, downhill or cross-country ski equipment, or charges 39.28 for marina services, launch services, and guide services, or the 39.29 sale of bait and fishing tackle. For purposes of this 39.30 determination, a paid booking of five or more nights shall be 39.31 counted as two bookings. Class 4c also includes commercial use 39.32 real property used exclusively for recreational purposes in 39.33 conjunction with class 4c property devoted to temporary and 39.34 seasonal residential occupancy for recreational purposes, up to 39.35 a total of two acres, provided the property is not devoted to 39.36 commercial recreational use for more than 250 days in the year 40.1 preceding the year of assessment and is located within two miles 40.2 of the class 4c property with which it is used. Class 4c 40.3 property classified in this clause also includes the remainder 40.4 of class 1c resorts provided that the entire property including 40.5 that portion of the property classified as class 1c also meets 40.6 the requirements for class 4c under this clause; otherwise the 40.7 entire property is classified as class 3. Owners of real 40.8 property devoted to temporary and seasonal residential occupancy 40.9 for recreation purposes and all or a portion of which was 40.10 devoted to commercial purposes for not more than 250 days in the 40.11 year preceding the year of assessment desiring classification as 40.12 class 1c or 4c, must submit a declaration to the assessor 40.13 designating the cabins or units occupied for 250 days or less in 40.14 the year preceding the year of assessment by January 15 of the 40.15 assessment year. Those cabins or units and a proportionate 40.16 share of the land on which they are located will be designated 40.17 class 1c or 4c as otherwise provided. The remainder of the 40.18 cabins or units and a proportionate share of the land on which 40.19 they are located will be designated as class 3a. The owner of 40.20 property desiring designation as class 1c or 4c property must 40.21 provide guest registers or other records demonstrating that the 40.22 units for which class 1c or 4c designation is sought were not 40.23 occupied for more than 250 days in the year preceding the 40.24 assessment if so requested. The portion of a property operated 40.25 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 40.26 nonresidential facility operated on a commercial basis not 40.27 directly related to temporary and seasonal residential occupancy 40.28 for recreation purposes shall not qualify for class 1c or 4c; 40.29 (2) qualified property used as a golf course if: 40.30 (i) it is open to the public on a daily fee basis. It may 40.31 charge membership fees or dues, but a membership fee may not be 40.32 required in order to use the property for golfing, and its green 40.33 fees for golfing must be comparable to green fees typically 40.34 charged by municipal courses; and 40.35 (ii) it meets the requirements of section 273.112, 40.36 subdivision 3, paragraph (d). 41.1 A structure used as a clubhouse, restaurant, or place of 41.2 refreshment in conjunction with the golf course is classified as 41.3 class 3a property; 41.4 (3) real property up to a maximum of one acre of land owned 41.5 by a nonprofit community service oriented organization; provided 41.6 that the property is not used for a revenue-producing activity 41.7 for more than six days in the calendar year preceding the year 41.8 of assessment and the property is not used for residential 41.9 purposes on either a temporary or permanent basis. For purposes 41.10 of this clause, a "nonprofit community service oriented 41.11 organization" means any corporation, society, association, 41.12 foundation, or institution organized and operated exclusively 41.13 for charitable, religious, fraternal, civic, or educational 41.14 purposes, and which is exempt from federal income taxation 41.15 pursuant to section 501(c)(3), (10), or (19) of the Internal 41.16 Revenue Code of 1986, as amended through December 31, 1990. For 41.17 purposes of this clause, "revenue-producing activities" shall 41.18 include but not be limited to property or that portion of the 41.19 property that is used as an on-sale intoxicating liquor or 3.2 41.20 percent malt liquor establishment licensed under chapter 340A, a 41.21 restaurant open to the public, bowling alley, a retail store, 41.22 gambling conducted by organizations licensed under chapter 349, 41.23 an insurance business, or office or other space leased or rented 41.24 to a lessee who conducts a for-profit enterprise on the 41.25 premises. Any portion of the property which is used for 41.26 revenue-producing activities for more than six days in the 41.27 calendar year preceding the year of assessment shall be assessed 41.28 as class 3a. The use of the property for social events open 41.29 exclusively to members and their guests for periods of less than 41.30 24 hours, when an admission is not charged nor any revenues are 41.31 received by the organization shall not be considered a 41.32 revenue-producing activity; 41.33 (4) post-secondary student housing of not more than one 41.34 acre of land that is owned by a nonprofit corporation organized 41.35 under chapter 317A and is used exclusively by a student 41.36 cooperative, sorority, or fraternity for on-campus housing or 42.1 housing located within two miles of the border of a college 42.2 campus; 42.3 (5) manufactured home parks as defined in section 327.14, 42.4 subdivision 3; 42.5 (6) real property that is actively and exclusively devoted 42.6 to indoor fitness, health, social, recreational, and related 42.7 uses, is owned and operated by a not-for-profit corporation, and 42.8 is located within the metropolitan area as defined in section 42.9 473.121, subdivision 2; and 42.10 (7) a leased or privately owned noncommercial aircraft 42.11 storage hangar not exempt under section 272.01, subdivision 2, 42.12 and the land on which it is located, provided that: 42.13 (i) the land is on an airport owned or operated by a city, 42.14 town, county, metropolitan airports commission, or group 42.15 thereof; and 42.16 (ii) the land lease, or any ordinance or signed agreement 42.17 restricting the use of the leased premise, prohibits commercial 42.18 activity performed at the hangar. 42.19 If a hangar classified under this clause is sold after June 42.20 30, 2000, a bill of sale must be filed by the new owner with the 42.21 assessor of the county where the property is located within 60 42.22 days of the sale. 42.23 Class 4c property has a class rate of1.651.3 percent of 42.24 market value, except that: 42.25 (i) each parcel of seasonal residential recreational 42.26 property not used for commercial purposes hasthe same class42.27rates as class 4bb property,a class rate of one percent on the 42.28 first $100,000 of market value for taxes payable in 2002, on the 42.29 first $150,000 of market value for taxes payable in 2003, and on 42.30 the first $200,000 of market value for taxes payable in 2004 and 42.31 thereafter, and a class rate of 1.5 percent on the remaining 42.32 value for taxes payable in 2002 and thereafter; 42.33 (ii) manufactured home parks assessed under clause (5) have 42.34the samea class rateas class 4b property,of one percent; and 42.35 (iii) property described in paragraph (d), clause (4), has 42.36 the same class rate as the rate applicable to the first tier of 43.1 class 4bb nonhomestead residential real estate under paragraph 43.2 (c). 43.3 (e) Class 4d property is qualifying low-income rental 43.4 housing certified to the assessor by the housing finance agency 43.5 under sections 273.126 and 462A.071. Class 4d includes land in 43.6 proportion to the total market value of the building that is 43.7 qualifying low-income rental housing. For all properties 43.8 qualifying as class 4d, the market value determined by the 43.9 assessor must be based on the normal approach to value using 43.10 normal unrestricted rents. 43.11 Class 4d property has a class rateof one percent of market43.12valueequal to 42 percent of the class rate applicable to 43.13 qualified class 4a property. 43.14[EFFECTIVE DATE.] This section is effective for taxes 43.15 payable in 2002 and thereafter. 43.16 Sec. 8. Minnesota Statutes 2000, section 273.13, 43.17 subdivision 31, is amended to read: 43.18 Subd. 31. [CLASS 5.] Class 5 property includes: 43.19 (1) unmined iron ore and low-grade iron-bearing formations 43.20 as defined in section 273.14; and 43.21 (2) all other property not otherwise classified. 43.22 Class 5 property has a class rate of3.4three percent of 43.23 market value. 43.24[EFFECTIVE DATE.] This section is effective for taxes 43.25 payable in 2002 and thereafter. 43.26 Sec. 9. [273.1384] [HOMESTEAD AND AGRICULTURAL CREDITS.] 43.27 Subdivision 1. [HOMESTEAD CREDIT.] Each county auditor 43.28 shall determine a homestead credit amount for each property 43.29 classified as class 1 residential homestead or class 2a 43.30 agricultural homestead within the county equal to 0.5 percent of 43.31 market value, to a maximum of $620 per homestead. In the case 43.32 of an agricultural or resort homestead, only the net tax 43.33 capacity of the house, garage, and surrounding one acre of land 43.34 shall be used in determining the property's homestead credit 43.35 amount. The credit may not exceed the net tax on the property 43.36 after subtraction of all other credits under section 273.1393. 44.1 Subd. 2. [AGRICULTURAL CREDIT.] (a) Property classified as 44.2 class 2a agricultural homestead is eligible for an agricultural 44.3 credit equal to 0.15 percent of the market value of the 44.4 property, excluding the market value attributable to the house, 44.5 garage, and surrounding one acre of land. 44.6 (b) Property classified as class 2b is eligible for a 44.7 non-homestead agricultural and timberland credit equal to 0.28 44.8 percent of the market value of the property. 44.9 Subd. 3. [CREDIT APPLICATION.] The credits under this 44.10 section must be used to proportionately reduce the net tax 44.11 capacity-based property tax payable to all taxing jurisdictions, 44.12 after subtraction of all other credits under section 273.1393. 44.13 Subd. 4. [CREDIT REIMBURSEMENT.] The county auditor shall 44.14 certify the amount of tax reductions granted under this section 44.15 to the commissioner of revenue on the abstracts of tax lists 44.16 submitted under section 275.29. The commissioner of revenue 44.17 shall verify the credit amounts reported, and shall make 44.18 payments directly to the affected taxing jurisdictions other 44.19 than school districts in two equal installments on September 15 44.20 and December 26 each year. The commissioner of revenue shall 44.21 certify the total of the tax reductions granted under this 44.22 section for each school district to the commissioner of 44.23 children, families, and learning before September 1 of each 44.24 taxes payable year. The commissioner of children, families, and 44.25 learning shall reimburse each affected school district for the 44.26 amount of the property tax reductions allowed under this section 44.27 as provided in section 273.1392. 44.28 Subd. 5. [APPROPRIATION.] An amount sufficient to pay the 44.29 credit reimbursements provided under this section for school 44.30 districts, intermediate school districts, or any group of school 44.31 districts levying as a single taxing entity, is annually 44.32 appropriated from the general fund to the commissioner of 44.33 children, families, and learning. An amount sufficient to pay 44.34 the credit reimbursements provided under this section for 44.35 counties, cities, towns, and special taxing districts is 44.36 annually appropriated from the general fund to the commissioner 45.1 of revenue. A jurisdiction's aid amount may be increased or 45.2 decreased based on any prior year adjustments for homestead 45.3 credit or other property tax credit or aid programs. 45.4[EFFECTIVE DATE.] This section is effective for taxes 45.5 payable in 2002 and subsequent years. 45.6 Sec. 10. Minnesota Statutes 2000, section 273.1392, is 45.7 amended to read: 45.8 273.1392 [PAYMENT; SCHOOL DISTRICTS.] 45.9 The amounts of conservation tax credits under section 45.10 273.119; disaster or emergency reimbursement under section 45.11 273.123; attached machinery aid under section 273.138;homestead45.12credit under section 273.13homestead and agricultural credits 45.13 under section 273.1384; aids and credits under section 273.1398; 45.14 wetlands reimbursement under section 275.295; enterprise zone 45.15 property credit payments under section 469.171; and metropolitan 45.16 agricultural preserve reduction under section 473H.10 for school 45.17 districts, shall be certified to the department of children, 45.18 families, and learning by the department of revenue. The 45.19 amounts so certified shall be paid according to section 127A.45, 45.20 subdivisions 9 and 13. 45.21[EFFECTIVE DATE.] This section is effective for aids and 45.22 credits payable in 2002 and thereafter. 45.23 Sec. 11. Minnesota Statutes 2000, section 273.1393, is 45.24 amended to read: 45.25 273.1393 [COMPUTATION OF NET PROPERTY TAXES.] 45.26 Notwithstanding any other provisions to the contrary, "net" 45.27 property taxes are determined by subtracting the credits in the 45.28 order listed from the gross tax: 45.29 (1) disaster credit as provided in section 273.123; 45.30 (2) powerline credit as provided in section 273.42; 45.31 (3) agricultural preserves credit as provided in section 45.32 473H.10; 45.33 (4) enterprise zone credit as provided in section 469.171; 45.34 (5) disparity reduction credit; 45.35 (6) conservation tax credit as provided in section 273.119; 45.36 (7)educationhomesteadcreditand agricultural credits as 46.1 provided in section273.1382273.1384; 46.2 (8) taconite homestead credit as provided in section 46.3 273.135; and 46.4 (9) supplemental homestead credit as provided in section 46.5 273.1391. 46.6 The combination of all property tax credits must not exceed 46.7 the gross tax amount. 46.8[EFFECTIVE DATE.] This section is effective for taxes 46.9 payable in 2002 and subsequent years. 46.10 Sec. 12. Minnesota Statutes 2000, section 273.1398, 46.11 subdivision 4, is amended to read: 46.12 Subd. 4. [DISPARITY REDUCTION CREDIT.] (a)Beginning with46.13taxes payable in 1989,Class 4a, class 3a, and class 3b property 46.14 qualifies for a disparity reduction credit if: (1) the property 46.15 is located in a border city that has an enterprise zone 46.16 designated pursuant to section 469.168, subdivision 4; (2) the 46.17 property is located in a city with a population greater than 46.18 2,500 and less than 35,000 according to the 1980 decennial 46.19 census; (3) the city is adjacent to a city in another state or 46.20 immediately adjacent to a city adjacent to a city in another 46.21 state; and (4) the adjacent city in the other state has a 46.22 population of greater than 5,000 and less than 75,000. 46.23 (b) The credit is an amount sufficient to reduce (i) the 46.24 taxes levied on class 4a property to2.31.7 percent of the 46.25 property's market value and (ii) the tax on class 3a and class 46.26 3b property to2.31.9 percent of market value. 46.27 (c) The county auditor shall annually certify the costs of 46.28 the credits to the department of revenue. The department shall 46.29 reimburse local governments for the property taxes foregone as 46.30 the result of the credits in proportion to their total levies. 46.31 Sec. 13. Minnesota Statutes 2000, section 273.1398, is 46.32 amended by adding a subdivision to read: 46.33 Subd. 9. [CLASS 3 REFERENDUM RATE REDUCTION.] The county 46.34 auditor of each county containing a school district for which a 46.35 referendum tax base replacement aid rate is calculated under 46.36 section 126C.17, subdivision 7a, shall reduce the referendum tax 47.1 rate for each parcel of class 3 property in the school district 47.2 by the referendum tax base replacement aid rate for that school 47.3 district. 47.4 Sec. 14. [GENERAL EDUCATION TAX RATE REDUCTION.] 47.5 The general education tax rate for fiscal year 2003 and 47.6 later fiscal years will be the rate that raises $100,000,000 47.7 less than the amount required to be raised under Minnesota 47.8 Statutes, section 126C.13, subdivision 1. 47.9 Sec. 15. [EDUCATION FACILITY ENERGY REIMBURSEMENT AND TAX 47.10 REBATE.] 47.11 For fiscal year 2003 only, $43,000,000 is appropriated to 47.12 the commissioner of children, families, and learning to be used 47.13 to pay to each school district an education facility energy 47.14 reimbursement and tax rebate equal to $50 times the adjusted 47.15 marginal cost pupil units for the school year. This revenue is 47.16 paid entirely in fiscal year 2003 based on estimated data. By 47.17 January 31, 2004, the department of children, families, and 47.18 learning shall recalculate the revenue for each district using 47.19 actual data and shall adjust the general education aid paid the 47.20 school districts for fiscal year 2004 by the amount of the 47.21 difference between the estimated revenue and the actual 47.22 revenue. If the appropriation is insufficient, the aid must be 47.23 prorated. 47.24 Sec. 16. [REPEALER.] 47.25 Minnesota Statutes 2000, section 273.1382, is repealed. 47.26[EFFECTIVE DATE.] This section is effective for taxes 47.27 payable in 2002 and thereafter. 47.28 ARTICLE 3 47.29 STATE TAKEOVER OF COUNTY COSTS 47.30 Section 1. Minnesota Statutes 2000, section 97A.065, 47.31 subdivision 2, is amended to read: 47.32 Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and 47.33 forfeited bail collected from prosecutions of violations of: 47.34 the game and fish laws; sections 84.091 to 84.15; sections 84.81 47.35 to 84.91; section 169A.20, when the violation involved an 47.36 off-road recreational vehicle as defined in section 169A.03, 48.1 subdivision 16; chapter 348; and any other law relating to wild 48.2 animals or aquatic vegetation, must be paid to the treasurer of 48.3 the county where the violation is prosecuted. The county 48.4 treasurer shall submit one-half of the receipts to the 48.5 commissioner and credit the balance to the county general 48.6 revenue fund except as provided in paragraphs (b), (c), and 48.7 (d). In a county in a judicial district under section 480.181, 48.8 subdivision 1, paragraph (b),as added in Laws 1999, chapter48.9216, article 7, section 26,the share that would otherwise go to 48.10 the county under this paragraph must be submitted to the state 48.11 treasurer for deposit in the state treasury and credited to the 48.12 general fund. 48.13 (b) The commissioner must reimburse a county, from the game 48.14 and fish fund, for the cost of keeping prisoners prosecuted for 48.15 violations under this section if the county board, by 48.16 resolution, directs: (1) the county treasurer to submit all 48.17 fines and forfeited bail to the commissioner; and (2) the county 48.18 auditor to certify and submit monthly itemized statements to the 48.19 commissioner. 48.20 (c) The county treasurer shall submit one-half of the 48.21 receipts collected under paragraph (a) from prosecutions of 48.22 violations of sections 84.81 to 84.91, and 169A.20, except 48.23 receipts that are surcharges imposed under section 357.021, 48.24 subdivision 6, to the commissioner and credit the balance to the 48.25 county general fund. The commissioner shall credit these 48.26 receipts to the snowmobile trails and enforcement account in the 48.27 natural resources fund. 48.28 (d) The county treasurer shall indicate the amount of the 48.29 receipts that are surcharges imposed under section 357.021, 48.30 subdivision 6, and shall submit all of those receipts to the 48.31 state treasurer. 48.32[EFFECTIVE DATE.] This section is effective July 1, 2003, 48.33 in the second and fourth districts; July 1, 2004, in the first 48.34 and third districts; and July 1, 2005, in the sixth and tenth 48.35 districts. 48.36 Sec. 2. Minnesota Statutes 2000, section 179A.101, 49.1 subdivision 1, is amended to read: 49.2 Subdivision 1. [COURT EMPLOYEE UNITS.] (a) The state court 49.3 administrator shall meet and negotiate with the exclusive 49.4 representative of each of the units specified in this section. 49.5 The units provided in this section are the only appropriate 49.6 units for court employees. Court employees, unless otherwise 49.7 excluded, are included within the units which include the 49.8 classifications to which they are assigned for purposes of 49.9 compensation. Initial assignment of classifications to 49.10 bargaining units shall be made by the state court administrator 49.11 by August 15, 1999of the year preceding the year in which the 49.12 state assumes the cost of court administration in the judicial 49.13 district in which the bargaining unit is located. An exclusive 49.14 representative may appeal the initial assignment decision of the 49.15 state court administrator by filing a petition with the 49.16 commissioner within 45 days of being certified as the exclusive 49.17 representative for a judicial district. The units in this 49.18 subdivision are the appropriate units of court employees. 49.19 (b) The judicial district unit consists of clerical, 49.20 administrative, and technical employees of a judicial district 49.21 under section 480.181, subdivision 1, paragraph (b), or of two 49.22 or more of these districts that are represented by the same 49.23 employee organization or one or more subordinate bodies of the 49.24 same employee organization. The judicial district unit includes 49.25 individuals, not otherwise excluded, whose work is typically 49.26 clerical or secretarial in nature, including nontechnical data 49.27 recording and retrieval and general office work, and 49.28 individuals, not otherwise excluded, whose work is not typically 49.29 manual and which requires specialized knowledge or skills 49.30 acquired through two-year academic programs or equivalent 49.31 experience or on-the-job training. 49.32 (c) The appellate courts unit consists of clerical, 49.33 administrative, and technical employees of the court of appeals 49.34 and clerical, administrative, and technical employees of the 49.35 supreme court. The appellate courts unit includes individuals, 49.36 not otherwise excluded, whose work is typically clerical or 50.1 secretarial in nature, including nontechnical data recording and 50.2 retrieval and general office work, and individuals, not 50.3 otherwise excluded, whose work is not typically manual and which 50.4 requires specialized knowledge or skills acquired through 50.5 two-year academic programs or equivalent experience or 50.6 on-the-job training. 50.7 (d) The court employees professional employee unit consists 50.8 of professional employees, not otherwise excluded, that are 50.9 employed by the supreme court, the court of appeals, or a 50.10 judicial district under section 480.181, subdivision 1, 50.11 paragraph (b). 50.12 (e) The court employees court reporter unit consists of 50.13 court reporters not otherwise excluded who are employed by a 50.14 judicial district under section 480.181, subdivision 1, 50.15 paragraph (a). 50.16 (f) Notwithstanding any provision of this chapter or any 50.17 other law to the contrary, judges may appoint and remove court 50.18 reporters at their pleasure. 50.19 (g) Copies of collective bargaining agreements entered into 50.20 under this section must be submitted to the legislative 50.21 coordinating commission for the commission's information. 50.22[EFFECTIVE DATE.] This section is effective July 1, 2003, 50.23 in the second and fourth districts; July 1, 2004, in the first 50.24 and third districts; and July 1, 2005, in the sixth and tenth 50.25 districts. 50.26 Sec. 3. Minnesota Statutes 2000, section 179A.102, 50.27 subdivision 6, is amended to read: 50.28 Subd. 6. [CONTRACT AND REPRESENTATION RESPONSIBILITIES.] 50.29 (a) Notwithstanding the provisions of section 179A.101, the 50.30 exclusive representatives of units of court employees certified 50.31 prior to the effective date of the judicial district coming 50.32 under section 480.181, subdivision 1, paragraph (b), remain 50.33 responsible for administration of their contracts and for other 50.34 contractual duties and have the right to dues and fair share fee 50.35 deduction and other contractual privileges and rights until a 50.36 contract is agreed upon with the state court administrator for a 51.1 new unit established under section 179A.101or until June 30,51.22001, whichever is earlier. Exclusive representatives of court 51.3 employees certified after the effective date of this section in 51.4 the judicial district are immediately upon certification 51.5 responsible for bargaining on behalf of employees within the 51.6 unit. They are also responsible for administering grievances 51.7 arising under previous contracts covering employees included 51.8 within the unit which remain unresolvedon June 30, 2001, or51.9 upon agreement with the state court administrator on a contract 51.10 for a new unit established under section 179A.101, whichever is51.11earlier. Where the employer does not object, these 51.12 responsibilities may be varied by agreement between the outgoing 51.13 and incoming exclusive representatives. All other rights and 51.14 duties of representation begin on July 1, 2001of the year in 51.15 which the state assumes the funding of court administration in 51.16 the judicial district, except that exclusive representatives 51.17 certified after the effective date of this section shall 51.18 immediately, upon certification, have the right to all employer 51.19 information and all forms of access to employees within the 51.20 bargaining unit which would be permitted to the current contract 51.21 holder, including the rights in section 179A.07, subdivision 6. 51.22 This section does not affect an existing collective bargaining 51.23 contract. Incoming exclusive representatives of court employees 51.24 from judicial districts that come under section 480.181, 51.25 subdivision 1, paragraph (b), are immediately, upon 51.26 certification, responsible for bargaining on behalf of all 51.27 previously unrepresented employees assigned to their units. All 51.28 other rights and duties of exclusive representatives begin on 51.29 July 1, 2001of the year in which the state assumes the funding 51.30 of court administration in the judicial district. 51.31 (b) Nothing in this act or Laws 1999, chapter 216, article 51.32 7, sections 3 to 15, prevents an exclusive representative 51.33 certified after the effectivedate of sections 3 to 15dates of 51.34 those provisions from assessing fair share or dues deductions 51.35 immediately upon certification for employees in a unit 51.36 established under section 179A.101 if the employees were 52.1 unrepresented for collective bargaining purposes before that 52.2 certification. 52.3[EFFECTIVE DATE.] This section is effective July 1, 2003, 52.4 in the second and fourth districts; July 1, 2004, in the first 52.5 and third districts; and July 1, 2005, in the sixth and tenth 52.6 districts. 52.7 Sec. 4. Minnesota Statutes 2000, section 179A.103, 52.8 subdivision 1, is amended to read: 52.9 Subdivision 1. [CONTRACTS.] Contracts for the period 52.10 commencing July 1, 2000,of the year in which the state assumes 52.11 the cost of court administration in the judicial district for 52.12 the judicial district court employeesof judicial districts that52.13are under section 480.181, subdivision 1, paragraph (b),must be 52.14 negotiated with the state court administrator. Negotiations for 52.15 those contracts may begin any time after July 1, 1999of the 52.16 year before the state assumes the cost, and may be initiated by 52.17 either party notifying the other of the desire to begin the 52.18 negotiating process. Negotiations are subject to this chapter. 52.19[EFFECTIVE DATE.] This section is effective July 1, 2003, 52.20 in the second and fourth districts; July 1, 2004, in the first 52.21 and third districts; and July 1, 2005, in the sixth and tenth 52.22 districts. 52.23 Sec. 5. [245.775] [REIMBURSEMENT OF COUNTY FOR CERTAIN 52.24 OUT-OF-HOME PLACEMENTS.] 52.25 (a) The commissioner of human services shall reimburse each 52.26 county for a portion of the nonfederal share of the cost of 52.27 out-of-home placement. The amount of the reimbursement is 50 52.28 percent of the county's average nonfederal share of the cost for 52.29 out-of-home placement for the most recent three years. For 52.30 purposes of this section, "out-of-home placement" means the 52.31 placement of a child in a child caring institution or shelter 52.32 licensed under Minnesota Rules, parts 9545.0905 to 9545.1125, in 52.33 a group home licensed under Minnesota Rules, parts 9545.1400 to 52.34 9545.1480, in family foster care or group family foster care 52.35 licensed under Minnesota Rules, parts 9545.0010 to 9545.0260, or 52.36 a correctional facility pursuant to a court order under which a 53.1 county social services agency has been assigned financial 53.2 responsibility for the placement. For purposes of this section, 53.3 "out-of-home placement" includes voluntary and tribal 53.4 court-ordered placement of an Indian child under sections 53.5 260.765 and 260.771. 53.6 (b) In July and December of 2002 and each subsequent year, 53.7 the commissioner will make a payment to each county equal to 53.8 one-half of the amount of the county's reimbursement determined 53.9 under paragraph (a) for that calendar year. 53.10 Sec. 6. [245.776] [ANNUAL APPROPRIATION.] 53.11 (a) A sum sufficient to discharge the duties imposed by 53.12 sections 245.775; 260.765, subdivision 2a; and 260.771, 53.13 subdivision 4a, is annually appropriated from the general fund 53.14 to the commissioner of human services. 53.15 (b) The payments under these sections in fiscal year 2004 53.16 and thereafter are limited to an amount equal to the maximum 53.17 allowed appropriation under this section in the previous 53.18 calendar year, multiplied by 106 percent. 53.19 Sec. 7. [245.7765] [INVESTMENT IN EARLY INTERVENTION 53.20 SERVICES.] 53.21 Subdivision 1. [EARLY INTERVENTION SERVICES.] For purposes 53.22 of this section, "early intervention services" means the 53.23 delivery of services to children under section 626.5551. 53.24 Subd. 2. [REQUIRED COUNTY INVESTMENT IN EARLY INTERVENTION 53.25 SERVICES.] Counties must spend 50 percent of the amount provided 53.26 under section 245.776, paragraph (b), on early intervention 53.27 services as defined in subdivision 1. Funds must be used to 53.28 expand existing services or create new services. The county 53.29 shall include in the plan filed under section 256E.09, a 53.30 detailed explanation of how the funds were used to expand or 53.31 create early intervention services. 53.32 Subd. 3. [REPORTING.] The commissioner of human services 53.33 shall develop reporting requirements related to expenditures 53.34 under subdivision 2, or use existing systems, in order to 53.35 determine county accountability and compliance. The 53.36 commissioner shall annually report county compliance data to the 54.1 chairs of the policy committees in the house and senate that 54.2 have jurisdiction over out-of-home placement issues. 54.3 Sec. 8. Minnesota Statutes 2000, section 252.43, is 54.4 amended to read: 54.5 252.43 [COMMISSIONER'S DUTIES.] 54.6 The commissioner shall supervise county boards' provision 54.7 of day training and habilitation services to adults with mental 54.8 retardation and related conditions. The commissioner shall: 54.9 (1) determine the need for day training and habilitation 54.10 services under section 252.28; 54.11 (2) approve payment rates established by a county under 54.12 section 252.46, subdivision 1; 54.13 (3) adopt rules for the administration and provision of day 54.14 training and habilitation services under sections 252.40 to 54.15 252.46 and sections 245A.01 to 245A.16 and 252.28, subdivision 54.16 2; 54.17 (4) enter into interagency agreements necessary to ensure 54.18 effective coordination and provision of day training and 54.19 habilitation services; 54.20 (5) monitor and evaluate the costs and effectiveness of day 54.21 training and habilitation services;and54.22 (6) provide information and technical help to county boards 54.23 and vendors in their administration and provision of day 54.24 training and habilitation services; and 54.25 (7) authorize payment with state funds and any available 54.26 federal Medicaid funds for services provided to individuals 54.27 eligible for home and community-based waiver services. This 54.28 clause shall take effect only upon approval of the federal 54.29 waiver to be requested under section 27. 54.30 Sec. 9. Minnesota Statutes 2000, section 256B.092, 54.31 subdivision 5, is amended to read: 54.32 Subd. 5. [FEDERAL WAIVERS.] (a) The commissioner shall 54.33 apply for any federal waivers necessary to secure, to the extent 54.34 allowed by law, federal financial participation under United 54.35 States Code, title 42, sections 1396 et seq., as amended, for 54.36 the provision of services to persons who, in the absence of the 55.1 services, would need the level of care provided in a regional 55.2 treatment center or a community intermediate care facility for 55.3 persons with mental retardation or related conditions. The 55.4 commissioner may seek amendments to the waivers or apply for 55.5 additional waivers under United States Code, title 42, sections 55.6 1396 et seq., as amended, to contain costs. The commissioner 55.7 shall ensure that payment for the cost of providing home and 55.8 community-based alternative services under the federal waiver 55.9 plan shall not exceed the cost of intermediate care services 55.10 including day training and habilitation services that would have 55.11 been provided without the waivered services. 55.12 (b) The commissioner, in administering home and 55.13 community-based waivers for persons with mental retardation and 55.14 related conditions, shall ensure that day services for eligible 55.15 persons are not provided by the person's residential service 55.16 provider, unless the person or the person's legal representative 55.17 is offered a choice of providers and agrees in writing to 55.18 provision of day services by the residential service provider. 55.19 The individual service plan for individuals who choose to have 55.20 their residential service provider provide their day services 55.21 must describe how health, safety, and protection needs will be 55.22 met by frequent and regular contact with persons other than the 55.23 residential service provider. 55.24 Sec. 10. Minnesota Statutes 2000, section 260.765, is 55.25 amended by adding a subdivision to read: 55.26 Subd. 2a. [REIMBURSEMENT FOR A PORTION OF COSTS.] When an 55.27 Indian child is voluntarily placed in out-of-home care as 55.28 defined in section 245.775 by a tribal social services agency, 55.29 the commissioner shall reimburse 50 percent of the nonfederal 55.30 share of the costs of the placement. The mechanism for 55.31 reimbursement must be the same used for county reimbursement of 55.32 out-of-home placement costs under section 245.775. 55.33[EFFECTIVE DATE.] This section is effective beginning with 55.34 out-of-home placement costs incurred on or after January 1, 2002. 55.35 Sec. 11. Minnesota Statutes 2000, section 260.771, is 55.36 amended by adding a subdivision to read: 56.1 Subd. 4a. [REIMBURSEMENT FOR A PORTION OF COSTS.] When an 56.2 Indian child is placed in out-of-home care as defined in section 56.3 245.775 by a tribal social services agency according to tribal 56.4 court order, the commissioner shall reimburse 50 percent of the 56.5 nonfederal share of the costs of the placement. The mechanism 56.6 for reimbursement must be the same used for county reimbursement 56.7 of out-of-home placement costs under section 245.775. 56.8[EFFECTIVE DATE.] This section is effective beginning with 56.9 out-of-home placement costs incurred on or after January 1, 2002. 56.10 Sec. 12. Minnesota Statutes 2000, section 273.1398, 56.11 subdivision 4a, is amended to read: 56.12 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15,56.131999of the year preceding the year in which the state assumes 56.14 the cost of court administration in the judicial district as 56.15 specified under section 480.183, the supreme court shall 56.16 determine and certify to the commissioner of revenue for each 56.17 county, other than counties located in the eighth judicial56.18district,the county's share of the costs assumed in the 56.19 judicial districts specified underLaws 1999, chapter 216,56.20article 7,section 480.183, subdivision 1, during the succeeding 56.21 fiscal yearbeginning July 1, 2000,. 56.22 (b) The amount certified in paragraph (a) shall be equal to 56.23 the following: 56.24 (i) 103 percent of the required court administration 56.25 expenditures as defined under section 480.183, subdivision 3, 56.26 for calendar year 2003, as determined under subdivision 4b, 56.27 paragraph (a); plus 56.28 (ii) an adjustment for any cumulative percentage increase 56.29 in salary expenditures as defined under section 480.183, 56.30 subdivision 2, in excess of six percent; less 56.31 (iii) an amount equal to the county's share of transferred 56.32 fines collected by the district courts in the county during the 56.33 calendar year1998preceding certification. 56.34 The court and the county may, if both parties agree, 56.35 negotiate and certify an amount higher than the amount 56.36 calculated under this paragraph. 57.1 (c) For purposes of this subdivision, the adjustment in 57.2 paragraph (b), clause (ii), shall be equal to: 57.3 (1) the sum of the court administration expenditures as 57.4 defined under section 480.183, subdivision 3, required under 57.5 subdivision 4b, paragraph (a), plus the temporary aid payment 57.6 under subdivision 4c; multiplied by 57.7 (2) the difference between (i) the cumulative percentage 57.8 increase in actual and anticipated salary settlements for court 57.9 employees from July 1, 2001, until the date of the court 57.10 transfer and (ii) the percentage specified in subdivision 4b, 57.11 paragraph (a). 57.12(b)(d) Payments to a county under subdivision 2 or section 57.13 273.166 for the calendar year2000in which the state assumes 57.14 the cost of court administration as defined under section 57.15 480.183, subdivision 3, in the judicial district must be 57.16 permanently reduced by an amount equal to 75 percent of the net 57.17 cost to the state for assumption of district court costs as 57.18 certified in paragraph (a). 57.19(c)(e) Payments to a county under subdivision 2 or section 57.20 273.166 for the calendar year2001after the calendar year in 57.21 which the state assumes the cost of court administration as 57.22 defined under section 480.183, subdivision 3, in the judicial 57.23 district must be permanently reduced by an amount equal to 25 57.24 percent of the net cost to the state for assumption of district 57.25 court costs as certified in paragraph (a). 57.26(d)(f) Payments to a county under subdivision 2 for 57.27 calendar year 2001 are permanently increased by an amount equal 57.28 to 7.5 percent of the county's share of transferred fines 57.29 collected by the district courts in the county during calendar 57.30 year 1998, as determined under paragraph (a). If the amount 57.31 determined in paragraph (a) exceeds the amount of aid a county 57.32 is scheduled to be paid under subdivision 2 in 2000, then the 57.33 county shall not receive an aid increase under this paragraph. 57.34 (g) Payments to a county under subdivision 2 or section 57.35 273.166, for mandated services as defined in section 480.183, 57.36 subdivision 4, in the judicial district must be permanently 58.1 reduced in 2002 by an amount equal to the cost to the state for 58.2 assumption of mandated court services as defined in section 58.3 480.183, subdivision 4. The supreme court shall determine the 58.4 amount for each county and certify it to the commissioner of 58.5 revenue by June 20, 2002. 58.6[EFFECTIVE DATE.] This section is effective the day 58.7 following final enactment. 58.8 Sec. 13. Minnesota Statutes 2000, section 273.1398, is 58.9 amended by adding a subdivision to read: 58.10 Subd. 4b. [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 58.11 Until the costs of court administration as defined under section 58.12 480.183, subdivision 3, in a county have been transferred to the 58.13 state, each county in a judicial district transferring court 58.14 administration costs to state funding after July 1, 2001, shall 58.15 budget for the funding of these costs an amount at least equal 58.16 to the certified budget amount for calendar year 2001 multiplied 58.17 by six percent for 2001 to 2003 and by eight percent from 2004 58.18 to the year of the transfer. The county shall budget, fund, and 58.19 authorize expenditures not less than the amount calculated under 58.20 this paragraph, including the temporary aid amount under 58.21 subdivision 4c for maintenance of effort of administrative costs. 58.22 (b) By July 1, 2001, the court shall certify to each county 58.23 in the judicial district its cost of court administration as 58.24 defined under section 480.183, subdivision 3, based on 2001 58.25 certified budgets. In making that determination, the court 58.26 shall exclude the budget costs of the county for the following 58.27 categories: 58.28 (1) rent; 58.29 (2) examiner of titles; 58.30 (3) civil court appointed attorneys for civil matters; and 58.31 (4) hospitalization costs. 58.32[EFFECTIVE DATE.] This section is effective the day 58.33 following final enactment. 58.34 Sec. 14. Minnesota Statutes 2000, section 273.1398, is 58.35 amended by adding a subdivision to read: 58.36 Subd. 4c. [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For 59.1 calendar years 2004 and 2005, each county in a judicial district 59.2 that has not been transferred to the state by January 1 of that 59.3 year shall receive additional homestead and agricultural credit 59.4 aid. This amount is in addition to the amount calculated under 59.5 subdivision 2 and must not be included in the definition of 59.6 homestead and agricultural credit base under subdivision 1, 59.7 paragraph (j). The amount of additional aid is equal to the 59.8 difference between (1) the amount budgeted for court 59.9 administration costs in 2001 as determined under subdivision 4b, 59.10 paragraph (b), multiplied by the maintenance of effort percent 59.11 for the calendar year as determined under subdivision 4b, 59.12 paragraph (a), and (2) the amount calculated under subdivision 59.13 4b, paragraph (a), for calendar year 2003. This additional aid 59.14 must be used only to fund court administration expenditures as 59.15 defined in section 480.183, subdivision 3. This amount must be 59.16 added to the state court's base budget in the year when the 59.17 court in that judicial district in which the county is located 59.18 is transferred to the state. 59.19[EFFECTIVE DATE.] This section is effective the day 59.20 following final enactment. 59.21 Sec. 15. Minnesota Statutes 2000, section 273.1398, is 59.22 amended by adding a subdivision to read: 59.23 Subd. 4f. [AID OFFSET FOR OUT-OF-HOME PLACEMENT 59.24 COSTS.] For aid payable in 2002, each county's aid under 59.25 subdivision 2 must be permanently reduced by an amount equal to 59.26 the county's 2002 reimbursement for nonfederal expenditures for 59.27 out-of-home placements, as provided in section 245.775. The 59.28 counties shall provide all information requested by the 59.29 commissioner of human services necessary to allow the 59.30 commissioner to certify the previous three years' average 59.31 nonfederal costs to the commissioner of revenue by July 15, 59.32 2001. The aid reduction under this subdivision must be made 59.33 prior to any aid reductions for the state takeover of courts 59.34 contained in this article. 59.35[EFFECTIVE DATE.] This section is effective the day after 59.36 final enactment, for aids payable beginning in 2002. 60.1 Sec. 16. Minnesota Statutes 2000, section 273.1398, is 60.2 amended by adding a subdivision to read: 60.3 Subd. 4g. [AID OFFSET FOR DAY SERVICES.] (a) On or before 60.4 the later of July 1, 2002, or July 1 following the date when the 60.5 federal Health Care Financing Administration grants the waiver 60.6 request under section 27, the commissioner of human services 60.7 shall certify each county's projected costs for the nonfederal 60.8 share of medical assistance payments for day services for 60.9 developmentally disabled persons under the waiver authorized by 60.10 section 27. Cost estimates shall be based on the information 60.11 available in the most recent calendar year. 60.12 (b) Payments to a county under subdivision 2 or sections 60.13 273.166 or 477A.0122 for the calendar year following the 60.14 certification in paragraph (a) must be permanently reduced by an 60.15 amount equal to 75 percent of the costs certified in paragraph 60.16 (a). 60.17 (c) Payments to a county under subdivision 2 or sections 60.18 273.166 or 477A.0122 for the second calendar year following the 60.19 certification in paragraph (a) must be permanently reduced by an 60.20 amount equal to 25 percent of the costs certified in paragraph 60.21 (a). 60.22 (d) The aid reduction under this subdivision in 2003 must 60.23 be made prior to any aid reductions for the state takeover of 60.24 courts contained in this article. 60.25 Sec. 17. Minnesota Statutes 2000, section 299D.03, 60.26 subdivision 5, is amended to read: 60.27 Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines 60.28 and forfeited bail money, from traffic and motor vehicle law 60.29 violations, collected from persons apprehended or arrested by 60.30 officers of the state patrol, shall be paid by the person or 60.31 officer collecting the fines, forfeited bail money or 60.32 installments thereof, on or before the tenth day after the last 60.33 day of the month in which these moneys were collected, to the 60.34 county treasurer of the county where the violation occurred. 60.35 Three-eighths of these receipts shall be credited to the general 60.36 revenue fund of the county, except that in a county in a 61.1 judicial district under section 480.181, subdivision 1, 61.2 paragraph (b),as added in Laws 1999, chapter 216, article 7,61.3section 26,this three-eighths share must be transmitted to the 61.4 state treasurer for deposit in the state treasury and credited 61.5 to the general fund. The other five-eighths of these receipts 61.6 shall be transmitted by that officer to the state treasurer 61.7 andshall be credited as follows:61.8(1) In the fiscal year ending June 30, 1991, the first61.9$275,000 in money received by the state treasurer after June 4,61.101991, must be credited to the transportation services fund, and61.11the remainder in the fiscal year credited to the trunk highway61.12fund.61.13(2) In fiscal year 1992, the first $215,000 in money61.14received by the state treasurer in the fiscal year must be61.15credited to the transportation services fund, and the remainder61.16credited to the trunk highway fund.61.17(3) In fiscal year 1993 and subsequent years, the entire61.18amount received by the state treasurermust be credited to the 61.19 trunk highway fund. If, however, the violation occurs within a 61.20 municipality and the city attorney prosecutes the offense, and a 61.21 plea of not guilty is entered, one-third of the receipts shall 61.22 be credited to the general revenue fund of the county, one-third 61.23 of the receipts shall be paid to the municipality prosecuting 61.24 the offense, and one-third shall be transmitted to the state 61.25 treasurer as provided in this subdivision. All costs of 61.26 participation in a nationwide police communication system 61.27 chargeable to the state of Minnesota shall be paid from 61.28 appropriations for that purpose. 61.29 (b) Notwithstanding any other provisions of law, all fines 61.30 and forfeited bail money from violations of statutes governing 61.31 the maximum weight of motor vehicles, collected from persons 61.32 apprehended or arrested by employees of the state of Minnesota, 61.33 by means of stationary or portable scales operated by these 61.34 employees, shall be paid by the person or officer collecting the 61.35 fines or forfeited bail money, on or before the tenth day after 61.36 the last day of the month in which the collections were made, to 62.1 the county treasurer of the county where the violation 62.2 occurred. Five-eighths of these receipts shall be transmitted 62.3 by that officer to the state treasurer and shall be credited to 62.4 the highway user tax distribution fund. Three-eighths of these 62.5 receipts shall be credited to the general revenue fund of the 62.6 county, except that in a county in a judicial district under 62.7 section 480.181, subdivision 1, paragraph (b),as added in Laws62.81999, chapter 216, article 7, section 26,this three-eighths 62.9 share must be transmitted to the state treasurer for deposit in 62.10 the state treasury and credited to the general fund. 62.11[EFFECTIVE DATE.] This section is effective July 1, 2003, 62.12 in the second and fourth districts; July 1, 2004, in the first 62.13 and third districts; and July 1, 2005, in the sixth and tenth 62.14 districts. 62.15 Sec. 18. Minnesota Statutes 2000, section 357.021, 62.16 subdivision 1a, is amended to read: 62.17 Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 62.18 Every person, including the state of Minnesota and all bodies 62.19 politic and corporate, who shall transact any business in the 62.20 district court, shall pay to the court administrator of said 62.21 court the sundry fees prescribed in subdivision 2. Except as 62.22 provided in paragraph (d), the court administrator shall 62.23 transmit the fees monthly to the state treasurer for deposit in 62.24 the state treasury and credit to the general fund. 62.25 (b) In a county which has a screener-collector position, 62.26 fees paid by a county pursuant to this subdivision shall be 62.27 transmitted monthly to the county treasurer, who shall apply the 62.28 fees first to reimburse the county for the amount of the salary 62.29 paid for the screener-collector position. The balance of the 62.30 fees collected shall then be forwarded to the state treasurer 62.31 for deposit in the state treasury and credited to the general 62.32 fund. In a county in a judicial district under section 480.181, 62.33 subdivision 1, paragraph (b),as added in Laws 1999, chapter62.34216, article 7, section 26,which has a screener-collector 62.35 position, the fees paid by a county shall be transmitted monthly 62.36 to the state treasurer for deposit in the state treasury and 63.1 credited to the general fund. A screener-collector position for 63.2 purposes of this paragraph is an employee whose function is to 63.3 increase the collection of fines and to review the incomes of 63.4 potential clients of the public defender, in order to verify 63.5 eligibility for that service. 63.6 (c) No fee is required under this section from the public 63.7 authority or the party the public authority represents in an 63.8 action for: 63.9 (1) child support enforcement or modification, medical 63.10 assistance enforcement, or establishment of parentage in the 63.11 district court, or in a proceeding under section 484.702; 63.12 (2) civil commitment under chapter 253B; 63.13 (3) the appointment of a public conservator or public 63.14 guardian or any other action under chapters 252A and 525; 63.15 (4) wrongfully obtaining public assistance under section 63.16 256.98 or 256D.07, or recovery of overpayments of public 63.17 assistance; 63.18 (5) court relief under chapter 260; 63.19 (6) forfeiture of property under sections 169A.63 and 63.20 609.531 to 609.5317; 63.21 (7) recovery of amounts issued by political subdivisions or 63.22 public institutions under sections 246.52, 252.27, 256.045, 63.23 256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, 260B.331, 63.24 and 260C.331, or other sections referring to other forms of 63.25 public assistance; 63.26 (8) restitution under section 611A.04; or 63.27 (9) actions seeking monetary relief in favor of the state 63.28 pursuant to section 16D.14, subdivision 5. 63.29 (d) The fees collected for child support modifications 63.30 under subdivision 2, clause (13), must be transmitted to the 63.31 county treasurer for deposit in the county general fund. The 63.32 fees must be used by the county to pay for child support 63.33 enforcement efforts by county attorneys. 63.34[EFFECTIVE DATE.] This section is effective July 1, 2003, 63.35 in the second and fourth districts; July 1, 2004, in the first 63.36 and third districts; and July 1, 2005, in the sixth and tenth 64.1 districts. 64.2 Sec. 19. Minnesota Statutes 2000, section 480.181, 64.3 subdivision 1, is amended to read: 64.4 Subdivision 1. [STATE EMPLOYEES; COMPENSATION.] (a) 64.5 District court referees, judicial officers, court reporters, law 64.6 clerks, district administration staff, other than district 64.7 administration staff in the second and fourth judicial 64.8 districts, guardian ad litem program coordinators and 64.9 staff, staff court interpreters in the second judicial district, 64.10 and other court employees under paragraph (b), are state 64.11 employees and are governed by the judicial branch personnel 64.12 rules adopted by the supreme court. The supreme court, in 64.13 consultation with the conference of chief judges, shall 64.14 establish the salary range of these employees under the judicial 64.15 branch personnel rules. In establishing the salary ranges, the 64.16 supreme court shall consider differences in the cost of living 64.17 in different areas of the state. 64.18 (b) The court administrator and employees of the court 64.19 administrator who are in the fifth, seventh, eighth, or ninth 64.20 judicial district are state employees. The court administrator 64.21 and employees of the court administrator in the remaining 64.22 judicial districts become state employees as follows: 64.23 (1) effective July 1, 2003, for the second and fourth 64.24 judicial districts; 64.25 (2) effective July 1, 2004, for the first and third 64.26 judicial districts; and 64.27 (3) effective July 1, 2005, for the sixth and tenth 64.28 judicial districts. 64.29[EFFECTIVE DATE.] The amendment to paragraph (a) is 64.30 effective July 1, 2001. 64.31 Sec. 20. [480.1811] [POSTRETIREMENT BENEFIT COSTS.] 64.32 Where court administration, guardian ad litem, or 64.33 interpreter employees elect to retain county insurance benefits 64.34 under section 480.181 after July 1, 2001, and the county 64.35 provides those employees postretirement insurance benefits prior 64.36 to July 1, 2001, the county shall pay the postretirement cost of 65.1 those benefits. 65.2[EFFECTIVE DATE.] This section is effective the day 65.3 following final enactment. 65.4 Sec. 21. [480.183] [JUDICIAL DISTRICTS; SCHEDULED DATES OF 65.5 STATE TRANSFER; DEFINITION OF SERVICES.] 65.6 Subdivision 1. [DATE OF STATE TRANSFER.] (a) Court 65.7 administration expenditures as defined in this section for the 65.8 remaining judicial districts shall be transferred to the state 65.9 according to the following schedule: 65.10 (1) effective July 1, 2003, the second and fourth judicial 65.11 districts; 65.12 (2) effective July 1, 2004, the first and third judicial 65.13 districts; and 65.14 (3) effective July 1, 2005, the sixth and tenth judicial 65.15 districts. 65.16 (b) Mandated court services as defined in this section for 65.17 the remaining judicial districts shall be transferred to the 65.18 state effective July 1, 2001. 65.19 Subd. 2. [DEFINITION; SALARY EXPENDITURES.] "Salary 65.20 expenditures" means the salary of court administration 65.21 employees, including salaries, related fringe benefits, and 65.22 insurance, granted to court and other county employees in 65.23 collective bargaining or county pay plans. 65.24 Subd. 3. [DEFINITION; COURT ADMINISTRATION 65.25 EXPENDITURES.] "Court administration expenditures" means the 65.26 total expenditures of (1) salary expenditures as defined under 65.27 subdivision 2 and (2) other related administrative operating 65.28 expenditures. 65.29 Subd. 4. [DEFINITION; MANDATED COURT SERVICES.] "Mandated 65.30 court services" means services for: 65.31 (1) guardian ad litem; 65.32 (2) interpreter; 65.33 (3) Minnesota Rules, parts 9525.0900 to 9525.1020 (rule 65.34 20); 65.35 (4) civil commitment examination, not including 65.36 hospitalization or treatment costs, for mental commitments and 66.1 related proceedings under chapter 253B; and 66.2 (5) in forma pauperis costs. 66.3[EFFECTIVE DATE.] This section is effective the day 66.4 following final enactment. 66.5 Sec. 22. [484.77] [FACILITIES.] 66.6 The county board in each county shall provide suitable 66.7 facilities for court purposes at the county seat, or at other 66.8 locations agreed upon by the district court and the county. The 66.9 county shall also be responsible for the costs of renting, 66.10 maintaining, operating, remodeling, insuring, and renovating 66.11 those facilities occupied by the court. 66.12[EFFECTIVE DATE.] This section is effective the day 66.13 following final enactment. 66.14 Sec. 23. Minnesota Statutes 2000, section 487.33, 66.15 subdivision 5, is amended to read: 66.16 Subd. 5. [ALLOCATION.] The court administrator shall 66.17 provide the county treasurer with the name of the municipality 66.18 or other subdivision of government where the offense was 66.19 committed which employed or provided by contract the arresting 66.20 or apprehending officer and the name of the municipality or 66.21 other subdivision of government which employed the prosecuting 66.22 attorney or otherwise provided for prosecution of the offense 66.23 for each fine or penalty and the total amount of fines or 66.24 penalties collected for each municipality or other subdivision 66.25 of government. On or before the last day of each month, the 66.26 county treasurer shall pay over to the treasurer of each 66.27 municipality or subdivision of government within the county all 66.28 fines or penalties for parking violations for which complaints 66.29 and warrants have not been issued and one-third of all fines or 66.30 penalties collected during the previous month for offenses 66.31 committed within the municipality or subdivision of government 66.32 from persons arrested or issued citations by officers employed 66.33 by the municipality or subdivision or provided by the 66.34 municipality or subdivision by contract. An additional 66.35 one-third of all fines or penalties shall be paid to the 66.36 municipality or subdivision of government providing prosecution 67.1 of offenses of the type for which the fine or penalty is 67.2 collected occurring within the municipality or subdivision, 67.3 imposed for violations of state statute or of an ordinance, 67.4 charter provision, rule or regulation of a city whether or not a 67.5 guilty plea is entered or bail is forfeited. Except as provided 67.6 in section 299D.03, subdivision 5, or as otherwise provided by 67.7 law, all other fines and forfeitures and all fees and statutory 67.8 court costs collected by the court administrator shall be paid 67.9 to the county treasurer of the county in which the funds were 67.10 collected who shall dispense them as provided by law. In a 67.11 county in a judicial district under section 480.181, subdivision 67.12 1, paragraph (b),as added in Laws 1999, chapter 216, article 7,67.13section 26,all other fines, forfeitures, fees, and statutory 67.14 court costs must be paid to the state treasurer for deposit in 67.15 the state treasury and credited to the general fund. 67.16[EFFECTIVE DATE.] This section is effective July 1, 2003, 67.17 in the second and fourth districts; July 1, 2004, in the first 67.18 and third districts; and July 1, 2005, in the sixth and tenth 67.19 districts. 67.20 Sec. 24. Minnesota Statutes 2000, section 488A.03, is 67.21 amended by adding a subdivision to read: 67.22 Subd. 14. [REVENUES TO GENERAL FUND.] In a judicial 67.23 district under section 480.181, subdivision 1, paragraph (b), 67.24 the county's share of all fines, forfeitures, fees, and 67.25 statutory court costs must be paid to the state treasurer for 67.26 deposit in the state treasury and credited to the general fund. 67.27 Sec. 25. Minnesota Statutes 2000, section 488A.20, is 67.28 amended by adding a subdivision to read: 67.29 Subd. 8. [REVENUES TO GENERAL FUND.] In a judicial 67.30 district under section 480.181, subdivision 1, paragraph (b), 67.31 the county's share of all fines, forfeitures, fees, and 67.32 statutory court costs must be paid to the state treasurer for 67.33 deposit in the state treasury and credited to the general fund. 67.34 Sec. 26. Minnesota Statutes 2000, section 574.34, 67.35 subdivision 1, is amended to read: 67.36 Subdivision 1. [GENERAL.] Fines and forfeitures not 68.1 specially granted or appropriated by law shall be paid into the 68.2 treasury of the county where they are incurred, except in a 68.3 county in a judicial district under section 480.181, subdivision 68.4 1, paragraph (b),as added in Laws 1999, chapter 216, article 7,68.5section 26,the fines and forfeitures must be deposited in the 68.6 state treasury and credited to the general fund. 68.7[EFFECTIVE DATE.] This section is effective July 1, 2003, 68.8 in the second and fourth districts; July 1, 2004, in the first 68.9 and third districts; and July 1, 2005, in the sixth and tenth 68.10 districts. 68.11 Sec. 27. [FUNDING FOR DAY SERVICES PROGRAMS.] 68.12 Subdivision 1. [FEDERAL WAIVER REQUESTS.] The commissioner 68.13 of human services shall submit to the federal Health Care 68.14 Financing Administration by September 1, 2001, a request for a 68.15 home and community-based services waiver for day services, 68.16 including: community inclusion, supported employment, and day 68.17 training and habilitation services defined in Minnesota 68.18 Statutes, section 252.41, subdivision 3, clause (1), for persons 68.19 eligible for the waiver under Minnesota Statutes, section 68.20 256B.092. 68.21 Subd. 2. [STATE FUNDING OF NONFEDERAL SHARE.] On the later 68.22 of July 1, 2003, or July 1 of the second calendar year after the 68.23 date when the federal Health Care Financing Administration 68.24 grants the waiver request under subdivision 1, the state must 68.25 assume the nonfederal share of medical assistance costs for day 68.26 training for persons receiving services under the day services 68.27 waiver under subdivision 1. The county shall be reimbursed 68.28 using the procedures set out in Minnesota Statutes, section 68.29 256.025, subdivision 3. 68.30 Subd. 3. [APPROPRIATION.] An amount sufficient to pay the 68.31 costs under this section is annually appropriated from the 68.32 general fund to the commissioner of human services. 68.33 Sec. 28. [TRANSITIONAL PROVISIONS.] 68.34 Subdivision 1. [TRANSFER OF PROPERTY.] The title to 68.35 personal property that is used by employees being transferred to 68.36 state employment under this article in the scope of their 69.1 employment is transferred to the state when they become state 69.2 employees. 69.3 Subd. 2. [RULES.] The supreme court, in consultation with 69.4 the conference of chief judges, may adopt rules to implement 69.5 this article. 69.6 Subd. 3. [BUDGETS.] Notwithstanding any law to the 69.7 contrary, the fiscal year budgets for the year in which the 69.8 state assumes the cost of court administration in the judicial 69.9 district for the court administrators' offices being transferred 69.10 to state employment under this article, including the number of 69.11 complement positions and salaries, must be submitted by the 69.12 court administrators to the supreme court. The budgets must 69.13 include the current levels of funding and positions at the time 69.14 of submission as well as any requests for increases in funding 69.15 and positions. 69.16[EFFECTIVE DATE.] This section is effective July 1, 2003, 69.17 in the second and fourth districts; July 1, 2004, in the first 69.18 and third districts; and July 1, 2005, in the sixth and tenth 69.19 districts. 69.20 Sec. 29. [APPROPRIATIONS FOR COURT COSTS.] 69.21 (a) The supreme court general fund appropriation base is 69.22 increased by $8,878,000 in fiscal year 2002 to be used to pay 69.23 the costs of mandated court services assumed by the state under 69.24 Minnesota Statutes, section 480.183, subdivision 1, paragraph 69.25 (b). 69.26 (b) For each of calendar years 2003 and 2004, $1,700,000 is 69.27 appropriated from the general fund to the supreme court to fund 69.28 court takeover equity adjustments. This amount must be added to 69.29 the court base budget in subsequent fiscal years. 69.30 ARTICLE 4 69.31 INDIVIDUAL INCOME TAX 69.32 Section 1. Minnesota Statutes 2000, section 10A.31, 69.33 subdivision 3, is amended to read: 69.34 Subd. 3. [FORM.] The commissioner of revenue must provide 69.35 on the first page of the income tax form and the renter and 69.36 homeowner property tax refund return a space for the individual 70.1 to indicate a wish to pay $5 ($10 if filing a joint return) from 70.2 the general fund of the state to finance election campaigns. 70.3 The front page of the form must also containlanguage prepared70.4by the commissioner that permitsall instructions and 70.5 information necessary to enable the individual to direct the 70.6 state to pay the $5 (or $10 if filing a joint return) to: (1) 70.7 one of the major political parties; (2) any minor political 70.8 party that qualifies under subdivision 3a; or (3) all qualifying 70.9 candidates as provided by subdivision 7. The renter and 70.10 homeowner property tax refund return must include instructions 70.11 that the individual filing the return may designate $5 on the 70.12 return only if the individual has not designated $5 on the 70.13 income tax return. The information required under this 70.14 subdivision must be printed in a type size no smaller than that 70.15 which is used for tax computation steps on the form. 70.16 Sec. 2. Minnesota Statutes 2000, section 289A.08, 70.17 subdivision 11, is amended to read: 70.18 Subd. 11. [INFORMATION INCLUDED IN INCOME TAX RETURN.] The 70.19 return must state the name of the taxpayer, or taxpayers, if the 70.20 return is a joint return, and the address of the taxpayer in the 70.21 same name or names and same address as the taxpayer has used in 70.22 making the taxpayer's income tax return to the United States, 70.23 and must state the social security number of the taxpayer, or 70.24 taxpayers, if a social security number has been issued by the 70.25 United States with respect to the taxpayers, and must state the 70.26 amount of the taxable income of the taxpayer as it appears on 70.27 the federal return for the taxable year to which the Minnesota 70.28 state return applies. The return must also include the address 70.29 of the principal residence of the taxpayer as of the last day of 70.30 the taxable year, which may be used by the commissioner of 70.31 revenue to provide aggregate data but not to provide information 70.32 that would identify an individual taxpayer. The taxpayer must 70.33 attach to the taxpayer's Minnesota state income tax return a 70.34 copy of the federal income tax return that the taxpayer has 70.35 filed or is about to file for the period, unless the taxpayer is 70.36 eligible to telefile the federal return and does file the 71.1 Minnesota return by telefiling. 71.2 Sec. 3. Minnesota Statutes 2000, section 290.01, 71.3 subdivision 19b, is amended to read: 71.4 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 71.5 individuals, estates, and trusts, there shall be subtracted from 71.6 federal taxable income: 71.7 (1) interest income on obligations of any authority, 71.8 commission, or instrumentality of the United States to the 71.9 extent includable in taxable income for federal income tax 71.10 purposes but exempt from state income tax under the laws of the 71.11 United States; 71.12 (2) if included in federal taxable income, the amount of 71.13 any overpayment of income tax to Minnesota or to any other 71.14 state, for any previous taxable year, whether the amount is 71.15 received as a refund or as a credit to another taxable year's 71.16 income tax liability; 71.17 (3) the amount paid to others, less the credit allowed 71.18 under section 290.0674, not to exceed $1,625 for each qualifying 71.19 child in a prekindergarten educational program or in grades 71.20 kindergarten to 6, and $2,500 for each qualifying child in 71.21 grades 7 to 12, for tuition, textbooks, and transportation of 71.22 each qualifying child in attending an elementary or secondary 71.23 school situated in Minnesota, North Dakota, South Dakota, Iowa, 71.24 or Wisconsin, wherein a resident of this state may legally 71.25 fulfill the state's compulsory attendance laws, which is not 71.26 operated for profit, and which adheres to the provisions of the 71.27 Civil Rights Act of 1964 and chapter 363, or for fees charged 71.28 for enrollment in a prekindergarten educational program for 71.29 which the taxpayer does not receive any other tax deduction or 71.30 credit or any reimbursement. For the purposes of this clause, 71.31 "tuition" includes fees or tuition as defined in section 71.32 290.0674, subdivision 1, clause (1). As used in this clause, 71.33 "prekindergarten educational program" means: 71.34 (i) prekindergarten programs established by a school 71.35 district under chapter 124D; 71.36 (ii) preschools, nursery schools, and early childhood 72.1 development programs licensed by the department of human 72.2 services and accredited by the National Association for the 72.3 Education of Young Children or National Early Childhood Program 72.4 Accreditation; 72.5 (iii) Montessori programs affiliated with or accredited by 72.6 the American Montessori Society or American Montessori 72.7 International; and 72.8 (iv) child care programs provided by family day care 72.9 providers holding a current early childhood development 72.10 credential approved by the commissioner of children, families, 72.11 and learning. As used in this clause, "textbooks" includes 72.12 books and other instructional materials and equipment used in 72.13 elementary and secondary schools in teaching only those subjects 72.14 legally and commonly taught in public elementary and secondary 72.15 schools in this state. Equipment expenses qualifying for 72.16 deduction includes expenses as defined and limited in section 72.17 290.0674, subdivision 1,clauseclauses (3) and (5). "Textbooks" 72.18 does not include instructional books and materials used in the 72.19 teaching of religious tenets, doctrines, or worship, the purpose 72.20 of which is to instill such tenets, doctrines, or worship, nor 72.21 does it include books or materials for, or transportation to, 72.22 extracurricular activities including sporting events, musical or 72.23 dramatic events, speech activities, driver's education, or 72.24 similar programs. For purposes of the subtraction provided by 72.25 this clause, "qualifying child" has the meaning given in section 72.26 32(c)(3) of the Internal Revenue Code; 72.27 (4) contributions made in taxable years beginning after 72.28 December 31, 1981, and before January 1, 1985, to a qualified 72.29 governmental pension plan, an individual retirement account, 72.30 simplified employee pension, or qualified plan covering a 72.31 self-employed person that were included in Minnesota gross 72.32 income in the taxable year for which the contributions were made 72.33 but were deducted or were not included in the computation of 72.34 federal adjusted gross income, less any amount allowed to be 72.35 subtracted as a distribution under this subdivision or a 72.36 predecessor provision in taxable years that began before January 73.1 1, 2000. This subtraction applies only for taxable years 73.2 beginning after December 31, 1999, and before January 1, 2001. 73.3 If an individual's subtraction under this clause exceeds the 73.4 individual's taxable income, the excess may be carried forward 73.5 to taxable years beginning after December 31, 2000, and before 73.6 January 1, 2002; 73.7 (5) income as provided under section 290.0802; 73.8 (6) the amount of unrecovered accelerated cost recovery 73.9 system deductions allowed under subdivision 19g; 73.10 (7) to the extent included in federal adjusted gross 73.11 income, income realized on disposition of property exempt from 73.12 tax under section 290.491; 73.13 (8) to the extent not deducted in determining federal 73.14 taxable income or used to claim the long-term care insurance 73.15 credit under section 290.0672, the amount paid for health 73.16 insurance of self-employed individuals as determined under 73.17 section 162(l) of the Internal Revenue Code, except that the 73.18 percent limit does not apply. If the individual deducted 73.19 insurance payments under section 213 of the Internal Revenue 73.20 Code of 1986, the subtraction under this clause must be reduced 73.21 by the lesser of: 73.22 (i) the total itemized deductions allowed under section 73.23 63(d) of the Internal Revenue Code, less state, local, and 73.24 foreign income taxes deductible under section 164 of the 73.25 Internal Revenue Code and the standard deduction under section 73.26 63(c) of the Internal Revenue Code; or 73.27 (ii) the lesser of (A) the amount of insurance qualifying 73.28 as "medical care" under section 213(d) of the Internal Revenue 73.29 Code to the extent not deducted under section 162(1) of the 73.30 Internal Revenue Code or excluded from income or (B) the total 73.31 amount deductible for medical care under section 213(a); 73.32 (9) the exemption amount allowed under Laws 1995, chapter 73.33 255, article 3, section 2, subdivision 3; 73.34 (10) to the extent included in federal taxable income, 73.35 postservice benefits for youth community service under section 73.36 124D.42 for volunteer service under United States Code, title 74.1 42, sections 12601 to 12604; 74.2 (11) to the extent not deducted in determining federal 74.3 taxable income by an individual who does not itemize deductions 74.4 for federal income tax purposes for the taxable year, an amount 74.5 equal to 50 percent of the excess of charitable contributions 74.6 allowable as a deduction for the taxable year under section 74.7 170(a) of the Internal Revenue Code over $500; 74.8 (12) to the extent included in federal taxable income, 74.9 holocaust victims' settlement payments for any injury incurred 74.10 as a result of the holocaust, if received by an individual who 74.11 was persecuted for racial or religious reasons by Nazi Germany 74.12 or any other Axis regime or an heir of such a person;and74.13 (13) for taxable years beginning before January 1, 2008, 74.14 the amount of the federal small ethanol producer credit allowed 74.15 under section 40(a)(3) of the Internal Revenue Code which is 74.16 included in gross income under section 87 of the Internal 74.17 Revenue Code; and 74.18 (14) to the extent included in federal taxable income, the 74.19 first $1,500 of compensation for personal services in the 74.20 Minnesota national guard or armed forces reserves, or for active 74.21 duty in the armed forces of the United States or the United 74.22 Nations. 74.23[EFFECTIVE DATE.] This section is effective for taxable 74.24 years beginning after December 31, 2000. 74.25 Sec. 4. Minnesota Statutes 2000, section 290.06, is 74.26 amended by adding a subdivision to read: 74.27 Subd. 29. [CREDIT FOR ADOPTION EXPENSES.] (a) A taxpayer 74.28 may take a credit against the tax due under this chapter equal 74.29 to 80 percent of the amount of qualified adoption expenses paid 74.30 or incurred by the taxpayer as provided in this subdivision. 74.31 (b) "Qualified adoption expenses" means the following 74.32 expenses to the extent they are directly related to the process 74.33 of adopting a child who is, at the time of the adoption, under 74.34 the age of 18 or is physically or mentally incapable of 74.35 self-care and who is not the stepchild of the adoptive parent: 74.36 (1) fees for required services of the department of human 75.1 services or through a licensed adoption agency or fees imposed 75.2 by any other governmental agency in connection with the 75.3 adoption; 75.4 (2) travel-related expenses for the adoptive family and 75.5 child; and 75.6 (3) medical fees and expenses that are not reimbursed by 75.7 insurance, including medical expenses of the child and birth 75.8 mother during the pregnancy and birth. 75.9 (c) The credit must be taken in the taxable year during 75.10 which the adoption becomes final. 75.11 (d) The maximum amount of the credit that may be taken for 75.12 all taxable years for the adoption of one child is $5,000 or, in 75.13 the case of the adoption of a special needs child, $8,000. For 75.14 purposes of this subdivision, a "special needs child" is a child 75.15 who meets the requirements described in section 259.67, 75.16 subdivision 1 or 4. 75.17 (e) If the amount of the credit for which a taxpayer is 75.18 eligible under this subdivision exceeds the taxpayer's liability 75.19 for tax for the taxable year, the excess may be carried over to 75.20 each of the five taxable years succeeding the taxable year. The 75.21 entire amount of the excess unused credit for the taxable year 75.22 shall be carried first to the earliest of the taxable years to 75.23 which the credit may be carried and then to each successive year 75.24 to which the credit may be carried. The amount of the unused 75.25 credit which may be added under this paragraph must not exceed 75.26 the taxpayer's liability for tax less the credit for the taxable 75.27 year. 75.28 (f) No credit may be taken under this subdivision for any 75.29 expense for which a deduction or credit is allowed under any 75.30 other provision of this chapter or section 23 of the Internal 75.31 Revenue Code of 1986, as amended through December 31, 2000. No 75.32 credit may be taken under this subdivision for any expense to 75.33 the extent that funds for the expense are received under any 75.34 federal, state, or local government program or an employer 75.35 reimbursement program. 75.36[EFFECTIVE DATE.] This section is effective for taxable 76.1 years beginning after December 31, 2000. 76.2 Sec. 5. Minnesota Statutes 2000, section 290.06, is 76.3 amended by adding a subdivision to read: 76.4 Subd. 30. [CREDIT FOR CONVENIENCE STORE SECURITY 76.5 CAMERAS.] (a) A taxpayer may take a credit against the tax due 76.6 under this chapter in an amount equal to 25 percent of the cost 76.7 incurred by the taxpayer to purchase and install video security 76.8 equipment that meet or exceed the minimum requirements in 76.9 section 299G.19, subdivision 2, in a convenience store as 76.10 defined in section 299G.19, subdivision 1. The amount of the 76.11 credit may not exceed $5,000 per convenience store, and the 76.12 credit may be taken in only one taxable year by a taxpayer. 76.13 (b) If the credit provided under this subdivision exceeds 76.14 the tax liability of the taxpayer for the taxable year, the 76.15 excess amount of the credit may be carried over to each of the 76.16 five taxable years succeeding the taxable year. The entire 76.17 amount of the credit must be carried to the earliest taxable 76.18 year to which the amount may be carried. The unused portion of 76.19 the credit must be carried to the following taxable year. No 76.20 credit may be carried to a taxable year more than five years 76.21 after the taxable year in which the credit was earned. 76.22 (c) The credit provided in this subdivision is available 76.23 for taxable years beginning after December 31, 2000, and before 76.24 January 1, 2006. 76.25 Sec. 6. Minnesota Statutes 2000, section 290.0674, 76.26 subdivision 1, is amended to read: 76.27 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 76.28 a credit against the tax imposed by this chapter in an amount 76.29 equal to 80 percent of the amount paid for education-related 76.30 expenses for a qualifying child in a prekindergarten educational 76.31 program or in kindergarten through grade 12. For purposes of 76.32 this section, "education-related expenses" means: 76.33 (1) fees or tuition for instruction by an instructorunder76.34 who meets one of the requirements of section 120A.22, 76.35 subdivision 10, clause (1), (2), (3), (4), or (5), orbywho is 76.36 a member of the Minnesota music teachers association, and is not 77.1 a lineal ancestor or sibling of the dependent for instruction 77.2 outside the regular school day or school year, including 77.3 tutoring, driver's education offered as part of school 77.4 curriculum, regardless of whether it is taken from a public or 77.5 private entity or summer camps, in grade or age appropriate 77.6 curricula that supplement curricula and instruction available 77.7 during the regular school year, that assists a dependent to 77.8 improve knowledge of core curriculum areas or to expand 77.9 knowledge and skills under the graduation rule under section 77.10 120B.02 and that do not include the teaching of religious 77.11 tenets, doctrines, or worship, the purpose of which is to 77.12 instill such tenets, doctrines, or worship, and fees for 77.13 enrollment in a prekindergarten educational program as defined 77.14 in section 290.01, subdivision 19b; 77.15 (2) expenses for textbooks, including books and other 77.16 instructional materials and equipment used in elementary and 77.17 secondary schools in teaching only those subjects legally and 77.18 commonly taught in public elementary and secondary schools in 77.19 this state. "Textbooks" does not include instructional books 77.20 and materials used in the teaching of religious tenets, 77.21 doctrines, or worship, the purpose of which is to instill such 77.22 tenets, doctrines, or worship, nor does it include books or 77.23 materials for extracurricular activities including sporting 77.24 events, musical or dramatic events, speech activities, driver's 77.25 education, or similar programs; 77.26 (3) a maximum expense of $200 per family for personal 77.27 computer hardware, excluding single purpose processors, and 77.28 educational software that assists a dependent to improve 77.29 knowledge of core curriculum areas or to expand knowledge and 77.30 skills under the graduation rule under section 120B.02 purchased 77.31 for use in the taxpayer's home and not used in a trade or 77.32 business regardless of whether the computer is required by the 77.33 dependent's school;and77.34 (4) the amount paid to others for transportation of a 77.35 qualifying child attending an elementary or secondary school 77.36 situated in Minnesota, North Dakota, South Dakota, Iowa, or 78.1 Wisconsin, wherein a resident of this state may legally fulfill 78.2 the state's compulsory attendance laws, which is not operated 78.3 for profit, and which adheres to the provisions of the Civil 78.4 Rights Act of 1964 and chapter 363; and 78.5 (5) expenses for the purchase or lease of musical 78.6 instruments used in classes offered as part of the school 78.7 curriculum, provided that expenses for purchases qualify only if 78.8 purchased for a child in kindergarten through grade 8. 78.9 For purposes of this section, "qualifying child" has the 78.10 meaning given in section 32(c)(3) of the Internal Revenue Code. 78.11[EFFECTIVE DATE.] This section is effective for taxable 78.12 years beginning after December 31, 2000, except that the 78.13 reduction of the rate of the credit is effective for taxable 78.14 years beginning after December 31, 2001. 78.15 Sec. 7. Minnesota Statutes 2000, section 290.0674, is 78.16 amended by adding a subdivision to read: 78.17 Subd. 2a. [ASSIGNMENT OF CREDIT.] A taxpayer who receives 78.18 a credit under this section may assign all or a part of the 78.19 refundable portion of the credit to a state or federally 78.20 chartered bank, savings bank, savings association, or credit 78.21 union, if the taxpayer provides proof of an expenditure that 78.22 qualifies for the credit under this section from a vendor that 78.23 has been certified for this purpose by the commissioner of 78.24 children, families, and learning. 78.25[EFFECTIVE DATE.] This section is effective for taxable 78.26 years beginning after December 31, 2001, and before January 1, 78.27 2004. 78.28 Sec. 8. Minnesota Statutes 2000, section 290.0675, 78.29 subdivision 3, is amended to read: 78.30 Subd. 3. [CREDIT AMOUNT.] The credit amount isas shown in78.31the table in this subdivision, based on the couple's taxable78.32income for the tax year and on the earned income of the78.33lesser-earning spousethe difference between the tax on the 78.34 couple's joint Minnesota taxable income under the rates in 78.35 section 290.06, subdivision 2c, paragraph (a), and the sum of 78.36 the tax under the rates of section 290.06, subdivision 2c, 79.1 paragraph (b), on the earned income of the lesser-earning 79.2 spouse, and the tax under the rates of section 290.06, 79.3 subdivision 2c, paragraph (b), on the couple's joint Minnesota 79.4 taxable income, minus the earned income of the lesser-earning 79.5 spouse. 79.6Credit ForCredit For79.7Earned Income ofTaxable IncomeTaxable Income79.8Lesser Earning Spouse$25,680-$102,029$102,030-over79.9$14,250 - $15,249$7$079.10$15,250 - $16,249$24$079.11$16,250 - $17,249$41$079.12$17,250 - $18,249$58$079.13$18,250 - $19,249$75$079.14$19,250 - $20,249$92$079.15$20,250 - $21,249$109$079.16$21,250 - $22,249$126$079.17$22,250 - $23,249$143$079.18$23,250 - $24,249$160$079.19$24,250 - $25,249$161$079.20$25,250 - $26,249$161$079.21$26,250 - $27,249$161$079.22$27,250 - $28,249$161$079.23$28,250 - $29,249$161$079.24$29,250 - $30,249$161$079.25$30,250 - $31,249$161$079.26$31,250 - $32,249$161$679.27$32,250 - $33,249$161$1479.28$33,250 - $34,249$161$2279.29$34,250 - $35,249$161$3079.30$35,250 - $36,249$161$3879.31$36,250 - $37,249$161$4679.32$37,250 - $38,249$161$5479.33$38,250 - $39,249$161$6279.34$39,250 - $40,249$161$7079.35$40,250 - $41,249$161$7879.36$41,250 - $42,249$161$8680.1$42,250 - $43,249$161$9480.2$43,250 - $44,249$161$10280.3$44,250 - $45,249$161$11080.4$45,250 - $46,249$161$11880.5$46,250 - $47,249$161$12680.6$47,250 - $48,249$161$13480.7$48,250 - $49,249$161$14280.8$49,250 - $50,249$161$15080.9$50,250 - $51,249$161$15880.10$51,250 - $52,249$161$16680.11$52,250 - $53,249$161$17480.12$53,250 - $54,249$161$18280.13$54,250 - $55,249$161$19080.14$55,250 - $56,249$161$19880.15$56,250 - $57,249$161$20680.16$57,250 - $58,249$161$21480.17$58,250 - $59,249$161$22280.18$59,250 - $60,249$161$23080.19$60,250 - $61,249$161$23880.20$61,250 - $62,249$161$24680.21$62,250 - $63,249$161$25480.22$63,250 - $64,249$161$26280.23$64,250 and over$161$26880.24 For taxable years beginning after December 31, 2001, the 80.25 commissioner of revenue shall construct and make available to 80.26 taxpayers a comprehensive table showing the credit under this 80.27 section at brackets of earnings of the lesser-earning spouse and 80.28 joint taxable income. The brackets of earnings shall not be 80.29 more than $2,000. 80.30 For taxable years beginning after December 31,20002002, 80.31 the commissioner shall update the table as necessary to provide 80.32 a credit that reflects the relationship between the marginal tax 80.33 rates imposed under section 290.06, subdivision 2c. 80.34[EFFECTIVE DATE.] This section is effective for tax years 80.35 beginning after December 31, 2000. 80.36 Sec. 9. [290.0676] [CREDIT FOR LAND DONATED FOR 81.1 CONSERVATION PURPOSES.] 81.2 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 81.3 section, the following terms have the meaning given. 81.4 (b) "Interest in real property" means fee title or 81.5 qualified real property interest as defined in section 170(h) of 81.6 the Internal Revenue Code and the United States Treasury 81.7 Regulations promulgated thereunder. 81.8 (c) "Fair market value" of an interest in real property 81.9 means the value as determined by a "qualified appraisal" 81.10 prepared by a "qualified appraiser" as those terms are defined 81.11 in United States Treasury Regulations, section 1.170A-13, as 81.12 amended through December 31, 2000. If the taxpayer does not 81.13 obtain an appraisal, "fair market value" means the estimated 81.14 market value of the property as determined by the assessor for 81.15 property tax purposes. 81.16 (d) "Discount of the sale price" means the difference 81.17 between the fair market value of an interest in real property at 81.18 the time of sale and the sale price, if the price the property 81.19 is sold for is lower. 81.20 (e) "Conservation purposes" means the conservation purposes 81.21 as defined in section 170(h)(4)(A)(i), (ii), and (iii) of the 81.22 Internal Revenue Code. 81.23 Subd. 2. [CREDIT ALLOWED.] A taxpayer who donates an 81.24 interest in real property in this state for conservation 81.25 purposes to a qualified organization described in subdivision 3, 81.26 paragraph (a), may take a credit against the tax imposed by this 81.27 chapter in an amount equal to 50 percent of the fair market 81.28 value of the interest in real property. A taxpayer who sells an 81.29 interest in real property at a discount for conservation 81.30 purposes may take a credit against the tax imposed by this 81.31 chapter in an amount equal to 50 percent of the value of the 81.32 discount of the sale price in the interest in real property. 81.33 Subd. 3. [QUALIFICATION.] (a) To qualify for a credit 81.34 under this section, the taxpayer must convey the interest in 81.35 real property to (1) the state of Minnesota, a local government 81.36 conservation agency, or a special purpose unit of government, or 82.1 (2) a private organization as provided in section 501(c) of the 82.2 Internal Revenue Code that: 82.3 (i) meets the requirements of section 170(h)(3) of the 82.4 Internal Revenue Code; and 82.5 (ii) is organized and operated for one of the conservation 82.6 purposes specified in section 170(h)(4)(A)(i), (ii), and (iii) 82.7 of the Internal Revenue Code. 82.8 (b) A taxpayer claiming the credit under this section shall 82.9 attach the following to the tax returns on which the credit is 82.10 claimed: 82.11 (1) a certificate of acceptance from an organization 82.12 described in paragraph (a) verifying that the organization has 82.13 accepted the contribution; and 82.14 (2) a copy of a qualified appraisal by a qualified 82.15 appraiser as those terms are defined in United States Treasury 82.16 Regulations, section 1.170A-13, as amended through December 31, 82.17 2000, or a copy of the most recent notice of estimated market 82.18 value provided by the assessor. 82.19 (c) Conveyances of real property for open space for the 82.20 purpose of fulfilling density requirements or other requirements 82.21 to obtain subdivision or building permits shall not be eligible 82.22 for a credit under this section. 82.23 Subd. 4. [LIMITATION; CARRYOVER.] (a) The credit for the 82.24 taxable year shall not exceed the taxpayer's liability for tax 82.25 before the credit under this section or $100,000, whichever is 82.26 less. 82.27 (b) If the amount of the credit determined under this 82.28 section for any taxable year exceeds the limitation in paragraph 82.29 (a), the excess shall be a carryover to each of the five 82.30 succeeding taxable years. All of the excess unused credit for 82.31 the taxable year must be carried first to the earliest of the 82.32 taxable years to which the credit may be carried and then to 82.33 each successive year to which the credit may be carried. The 82.34 unused credit that may be added under this paragraph in any year 82.35 may not exceed the lesser of the taxpayer's liability for tax 82.36 less the land donation credit for the taxable year or $100,000. 83.1 Subd. 5. [TRANSFERABILITY OF CREDIT.] (a) A taxpayer may 83.2 transfer to another taxpayer all or part of the credit allowed 83.3 under this section. A taxpayer who receives a credit 83.4 transferred under this section may use the transferred credit 83.5 subject to the same limitations and conditions as if that 83.6 taxpayer had made the original qualified donation. 83.7 (b) A taxpayer may transfer only the portion of the unused 83.8 credit that the taxpayer has not applied against the tax imposed 83.9 by this chapter. For any taxable year in which a credit is 83.10 transferred under this section, the taxpayer transferring the 83.11 credit and the taxpayer receiving the credit shall both file 83.12 written statements with their income tax returns specifying the 83.13 amount of the credit that has been transferred. A taxpayer may 83.14 not claim a credit transferred under this section unless the 83.15 written statement of the taxpayer transferring the credit 83.16 verifies the amount of the tax credit claimed. 83.17[EFFECTIVE DATE.] This section is effective for taxable 83.18 years beginning after December 31, 2000. 83.19 Sec. 10. [290.0679] [CREDIT FOR HISTORIC STRUCTURE 83.20 REHABILITATION.] 83.21 Subdivision 1. [DEFINITIONS.] (a) As used in this section, 83.22 the terms defined in this subdivision have the meanings given. 83.23 (b) "Certified historic structure" means a property located 83.24 in Minnesota and listed individually on the National Register of 83.25 Historic Places or a historic property designated by either a 83.26 certified local government or a heritage preservation commission 83.27 created under the National Historic Preservation Act of 1966 and 83.28 whose designation is approved by the state historic preservation 83.29 officer. 83.30 (c) "Eligible property" means a certified historic 83.31 structure or a structure in a certified historic district that 83.32 is offered or used for residential or business purposes. 83.33 (d) "Structure in a certified historic district" means a 83.34 structure located in Minnesota which is certified by the state 83.35 historic preservation office as contributing to the historic 83.36 significance of a certified historic district listed on the 84.1 National Register of Historic Places or a local district that 84.2 has been certified by the United States Department of the 84.3 Interior. 84.4 Subd. 2. [CREDIT ALLOWED.] A taxpayer who incurs costs for 84.5 the rehabilitation of eligible property in a taxable year may 84.6 take a credit against the tax imposed under this chapter in an 84.7 amount equal to 25 percent of the total costs of 84.8 rehabilitation. Costs of rehabilitation include, but are not 84.9 limited to, qualified rehabilitation expenditures as defined 84.10 under section 47 of the Internal Revenue Code, provided that the 84.11 costs of rehabilitation must exceed 50 percent of the adjusted 84.12 basis of the building at the time the rehabilitation activity 84.13 begins, and the rehabilitation must meet standards consistent 84.14 with the standards of the Secretary of the Interior for 84.15 rehabilitation as determined by the state historic preservation 84.16 office of the Minnesota historical society. 84.17 Subd. 3. [CREDIT TO BE REFUNDABLE; APPROPRIATION.] If the 84.18 amount of the credit under subdivision 2 exceeds the tax 84.19 liability under chapter 290 for the year in which the cost is 84.20 incurred, the commissioner shall refund the excess to the 84.21 taxpayer. The amount necessary to pay the refunds is annually 84.22 appropriated from the general fund to the commissioner of 84.23 revenue. 84.24 Subd. 4. [PARTNERSHIPS; MULTIPLE OWNERS.] Credits granted 84.25 to a partnership, a limited liability company taxed as a 84.26 partnership, or multiple owners of property shall be passed 84.27 through to the partners, members, or owners, respectively, pro 84.28 rata or pursuant to an executed agreement among the partners, 84.29 members, or owners documenting an alternate distribution method. 84.30 Subd. 5. [PROCESS.] To claim the credit, the taxpayer must 84.31 apply to the state historic preservation office of the Minnesota 84.32 historical society for verification of eligibility before a 84.33 historic rehabilitation project begins. The state historic 84.34 preservation office shall determine the amount of eligible 84.35 rehabilitation costs and whether the rehabilitation meets the 84.36 standards of the United States Department of the Interior. The 85.1 state historic preservation office shall issue certificates 85.2 verifying eligibility for and the amount of credit. The 85.3 taxpayer shall attach the certificate to any income tax return 85.4 on which the credit is claimed. The state historic preservation 85.5 office of the Minnesota historical society may collect fees for 85.6 applications for the historic preservation tax credit. Fees 85.7 shall be set at an amount that does not exceed the costs of 85.8 administering the tax credit program. 85.9 Subd. 6. [DETERMINATION OF ECONOMIC IMPACT.] The Minnesota 85.10 historical society shall annually determine the economic impact 85.11 to the state from the rehabilitation of eligible property for 85.12 which credits are provided under this section and report on the 85.13 impact to the committees with jurisdiction over taxes of the 85.14 senate and house of representatives. 85.15[EFFECTIVE DATE.] This section is effective for taxable 85.16 years beginning after December 31, 2000, provided that a 85.17 historic preservation project that was approved for federal 85.18 historic preservation tax credits in 2000 is eligible for state 85.19 tax credits for work performed in 2001 or thereafter. For 85.20 qualified expenditures during calendar year 2001, the 85.21 requirement that eligibility must be verified by the Minnesota 85.22 historical society is considered to be met if the verification 85.23 is completed before the end of the year. 85.24 Sec. 11. [299G.19] [CONVENIENCE STORE SECURITY.] 85.25 Subdivision 1. [DEFINITION; CONVENIENCE STORE.] As used in 85.26 this section, "convenience store" means a place of business 85.27 primarily engaged in the retail sale of groceries, or both 85.28 groceries and gasoline. Convenience store does not include a 85.29 business that always has at least five employees on the premises 85.30 or has at least 10,000 square feet of retail floor space. 85.31 Subd. 2. [SECURITY CAMERA SYSTEM MINIMUM REQUIREMENTS.] (a) 85.32 A convenience store must install security cameras with auto-iris 85.33 lenses. Recording devices must be capable of retrieving an 85.34 image of sufficient quality to assist in offender 85.35 identification. Cameras must be placed to record the cash 85.36 register area and all entry and exit doors to the convenience 86.1 store that are not normally locked and connected to a working 86.2 alarm system. Cameras installed to observe the entrances and 86.3 exits must be placed and lenses fixed so that the entrances or 86.4 exits are completely visible in the field of view. Cameras 86.5 installed to observe the cash register area must be placed to 86.6 provide an optimum view of the customer, clerk, and transaction 86.7 area. Cameras and other video recording equipment must be in 86.8 good working order and any breakdowns of the equipment must be 86.9 repaired expeditiously. Cameras and other video security 86.10 devices such as sequencers and multiplexers must be compatible 86.11 with the recording device. 86.12 (b) If a convenience store uses a VHS recorder, then the 86.13 recorder must be a commercial grade VHS deck. Camera activity 86.14 must be recorded continuously. Recording times must not exceed 86.15 24 hours. The recorder must have a minimum of 240 lines of 86.16 resolution and four heads. All recordings must have time and 86.17 date stamp. The store must use a commercial grade VHS tape. An 86.18 individual tape must not be reused more than 20 times. The 86.19 recording device tapes or other recording media must be 86.20 maintained in a secure environment. Tapes or other recorded 86.21 media must be available to law enforcement for a minimum period 86.22 of seven days. 86.23 (c) The technical specifications provided in this 86.24 subdivision are minimum standards and do not preclude a 86.25 convenience store from installing equipment that exceeds the 86.26 standard. A convenience store must post a conspicuous sign 86.27 stating that the property is under camera surveillance. 86.28 Subd. 3. [OTHER MEASURES.] Every convenience store shall 86.29 be equipped with the following security devices and standards: 86.30 (1) height markers at the entrance of the store which 86.31 display height measures; and 86.32 (2) a silent alarm to law enforcement or a private security 86.33 agency. 86.34 Subd. 4. [TRAINING PROGRAMS.] The owner or principal 86.35 operator of a convenience store shall provide robbery deterrence 86.36 and safety training by an approved curriculum to its retail 87.1 employees within 60 days of employment. The commissioner of 87.2 public safety shall approve, after consultation with interested 87.3 parties, training curriculum for purposes of this subdivision. 87.4 Subd. 5. [PENALTIES.] Violations of this section are 87.5 subject to the penalties and remedies provided in section 8.31, 87.6 except subdivision 3a. 87.7[EFFECTIVE DATE.] This section is effective January 1, 87.8 2002, for all convenience stores constructed or placed into 87.9 service on or after that date, or convenience stores with no 87.10 current security camera surveillance. This section is effective 87.11 January 1, 2004, for all other convenience stores. 87.12 Sec. 12. [STUDY OF ENERGY EFFICIENCY TAX INCENTIVES.] 87.13 The department of revenue shall study the feasibility, 87.14 cost, and effectiveness of providing tax incentives to encourage 87.15 purchase and use of energy efficient systems and products, and 87.16 report the findings of the study by January 15, 2002, to the 87.17 legislative committees that have jurisdiction over tax issues. 87.18 Sec. 13. [APPROPRIATION.] 87.19 (a) $200,000 is appropriated from the general fund to the 87.20 commissioner of revenue to make grants to nonprofit 87.21 organizations, qualifying under section 501(c)(3) of the 87.22 Internal Revenue Code of 1986, to coordinate, facilitate, 87.23 encourage, and aid in the provision of taxpayer assistance 87.24 services. This appropriation is available for fiscal years 2002 87.25 and 2003 and does not become a part of the base. 87.26 (b) "Taxpayer assistance services" mean accounting and tax 87.27 preparation services provided by volunteers to low-income and 87.28 disadvantaged Minnesota residents to help them file federal and 87.29 state income tax returns and Minnesota property tax refund 87.30 claims. 87.31 Sec. 14. [REPEALER.] 87.32 Minnesota Statutes 2000, section 290.06, subdivision 25, is 87.33 repealed. 87.34 ARTICLE 5 87.35 FEDERAL UPDATE 87.36 Section 1. Minnesota Statutes 2000, section 289A.02, 88.1 subdivision 7, is amended to read: 88.2 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 88.3 defined otherwise, "Internal Revenue Code" means the Internal 88.4 Revenue Code of 1986, as amended through December 31,19992000. 88.5[EFFECTIVE DATE.] This section is effective the day 88.6 following final enactment. 88.7 Sec. 2. Minnesota Statutes 2000, section 290.01, 88.8 subdivision 6b, is amended to read: 88.9 Subd. 6b. [FOREIGN OPERATING CORPORATION.] The term 88.10 "foreign operating corporation," when applied to a corporation, 88.11 means a domestic corporation with the following characteristics: 88.12 (1) it is part of a unitary business at least one member of 88.13 which is taxable in this state; 88.14 (2) it is not a foreign sales corporation under section 922 88.15 of the Internal Revenue Code, as amended through December 31, 88.16 1999, for the taxable year; and 88.17 (3) either (i) the average of the percentages of its 88.18 property and payrolls assigned to locations inside the United 88.19 States and the District of Columbia, excluding the commonwealth 88.20 of Puerto Rico and possessions of the United States, as 88.21 determined under section 290.191 or 290.20, is 20 percent or 88.22 less; or (ii) it has in effect a valid election under section 88.23 936 of the Internal Revenue Code. 88.24[EFFECTIVE DATE.] This section is effective for taxable 88.25 years beginning after December 31, 2000. 88.26 Sec. 3. Minnesota Statutes 2000, section 290.01, 88.27 subdivision 19, is amended to read: 88.28 Subd. 19. [NET INCOME.] The term "net income" means the 88.29 federal taxable income, as defined in section 63 of the Internal 88.30 Revenue Code of 1986, as amended through the date named in this 88.31 subdivision, incorporating any elections made by the taxpayer in 88.32 accordance with the Internal Revenue Code in determining federal 88.33 taxable income for federal income tax purposes, and with the 88.34 modifications provided in subdivisions 19a to 19f. 88.35 In the case of a regulated investment company or a fund 88.36 thereof, as defined in section 851(a) or 851(g) of the Internal 89.1 Revenue Code, federal taxable income means investment company 89.2 taxable income as defined in section 852(b)(2) of the Internal 89.3 Revenue Code, except that: 89.4 (1) the exclusion of net capital gain provided in section 89.5 852(b)(2)(A) of the Internal Revenue Code does not apply; 89.6 (2) the deduction for dividends paid under section 89.7 852(b)(2)(D) of the Internal Revenue Code must be applied by 89.8 allowing a deduction for capital gain dividends and 89.9 exempt-interest dividends as defined in sections 852(b)(3)(C) 89.10 and 852(b)(5) of the Internal Revenue Code; and 89.11 (3) the deduction for dividends paid must also be applied 89.12 in the amount of any undistributed capital gains which the 89.13 regulated investment company elects to have treated as provided 89.14 in section 852(b)(3)(D) of the Internal Revenue Code. 89.15 The net income of a real estate investment trust as defined 89.16 and limited by section 856(a), (b), and (c) of the Internal 89.17 Revenue Code means the real estate investment trust taxable 89.18 income as defined in section 857(b)(2) of the Internal Revenue 89.19 Code. 89.20 The net income of a designated settlement fund as defined 89.21 in section 468B(d) of the Internal Revenue Code means the gross 89.22 income as defined in section 468B(b) of the Internal Revenue 89.23 Code. 89.24 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 89.25 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 89.26 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 89.27 Protection Act, Public Law Number 104-188, the provisions of 89.28 Public Law Number 104-117, the provisions of sections 313(a) and 89.29 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 89.30 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 89.31 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 89.32 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 89.33 Public Law Number 105-34, the provisions of section 6010 of the 89.34 Internal Revenue Service Restructuring and Reform Act of 1998, 89.35 Public Law Number 105-206,andthe provisions of section 4003 of 89.36 the Omnibus Consolidated and Emergency Supplemental 90.1 Appropriations Act, 1999, Public Law Number 105-277, and the 90.2 provisions of section 318 of the Consolidated Appropriation Act 90.3 of 2001, Public Law Number 106-554, shall become effective at 90.4 the time they become effective for federal purposes. 90.5 The Internal Revenue Code of 1986, as amended through 90.6 December 31, 1996, shall be in effect for taxable years 90.7 beginning after December 31, 1996. 90.8 The provisions of sections 202(a) and (b), 221(a), 225, 90.9 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 90.10 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 90.11 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 90.12 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 90.13 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 90.14 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 90.15 7002, and 7003 of the Internal Revenue Service Restructuring and 90.16 Reform Act of 1998, Public Law Number 105-206, the provisions of 90.17 section 3001 of the Omnibus Consolidated and Emergency 90.18 Supplemental Appropriations Act, 1999, Public Law Number 90.19 105-277,andthe provisions of section 3001 of the Miscellaneous 90.20 Trade and Technical Corrections Act of 1999, Public Law Number 90.21 106-36, and the provisions of section 316 of the Consolidated 90.22 Appropriation Act of 2001, Public Law Number 106-554, shall 90.23 become effective at the time they become effective for federal 90.24 purposes. 90.25 The Internal Revenue Code of 1986, as amended through 90.26 December 31, 1997, shall be in effect for taxable years 90.27 beginning after December 31, 1997. 90.28 The provisions of sections 5002, 6009, 6011, and 7001 of 90.29 the Internal Revenue Service Restructuring and Reform Act of 90.30 1998, Public Law Number 105-206, the provisions of section 9010 90.31 of the Transportation Equity Act for the 21st Century, Public 90.32 Law Number 105-178, the provisions of sections 1004, 4002, and 90.33 5301 of the Omnibus Consolidation and Emergency Supplemental 90.34 Appropriations Act, 1999, Public Law Number 105-277, the 90.35 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 90.36 Act of 1998, Public Law Number 105-369,andthe provisions of 91.1 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 91.2 Work Incentives Improvement Act of 1999, Public Law Number 91.3 106-170, the provisions of the Installment Tax Correction Act of 91.4 2000, Public Law Number 106-573, and the provisions of section 91.5 309 of the Consolidated Appropriation Act of 2001, Public Law 91.6 Number 106-554, shall become effective at the time they become 91.7 effective for federal purposes. 91.8 The Internal Revenue Code of 1986, as amended through 91.9 December 31, 1998, shall be in effect for taxable years 91.10 beginning after December 31, 1998. 91.11 The provisions of the FSC Repeal and Extraterritorial 91.12 Income Exclusion Act of 2000, Public Law Number 106-519, shall 91.13 become effective at the time it became effective for federal 91.14 purposes. 91.15 The Internal Revenue Code of 1986, as amended through 91.16 December 31, 1999, shall be in effect for taxable years 91.17 beginning after December 31, 1999. The provisions of sections 91.18 306 and 401 of the Consolidated Appropriation Act of 2001, 91.19 Public Law Number 106-554, shall become effective at the same 91.20 time it became effective for federal purposes. 91.21 The Internal Revenue Code of 1986, as amended through 91.22 December 31, 2000, shall be in effect for taxable years 91.23 beginning after December 31, 2000. 91.24 Except as otherwise provided, references to the Internal 91.25 Revenue Code in subdivisions 19a to 19g mean the code in effect 91.26 for purposes of determining net income for the applicable year. 91.27[EFFECTIVE DATE.] This section is effective the day 91.28 following final enactment. 91.29 Sec. 4. Minnesota Statutes 2000, section 290.01, 91.30 subdivision 19c, is amended to read: 91.31 Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 91.32 INCOME.] For corporations, there shall be added to federal 91.33 taxable income: 91.34 (1) the amount of any deduction taken for federal income 91.35 tax purposes for income, excise, or franchise taxes based on net 91.36 income or related minimum taxes, including but not limited to 92.1 the tax imposed under section 290.0922, paid by the corporation 92.2 to Minnesota, another state, a political subdivision of another 92.3 state, the District of Columbia, or any foreign country or 92.4 possession of the United States; 92.5 (2) interest not subject to federal tax upon obligations 92.6 of: the United States, its possessions, its agencies, or its 92.7 instrumentalities; the state of Minnesota or any other state, 92.8 any of its political or governmental subdivisions, any of its 92.9 municipalities, or any of its governmental agencies or 92.10 instrumentalities; the District of Columbia; or Indian tribal 92.11 governments; 92.12 (3) exempt-interest dividends received as defined in 92.13 section 852(b)(5) of the Internal Revenue Code; 92.14 (4) the amount of any net operating loss deduction taken 92.15 for federal income tax purposes under section 172 or 832(c)(10) 92.16 of the Internal Revenue Code or operations loss deduction under 92.17 section 810 of the Internal Revenue Code; 92.18 (5) the amount of any special deductions taken for federal 92.19 income tax purposes under sections 241 to 247 of the Internal 92.20 Revenue Code; 92.21 (6) losses from the business of mining, as defined in 92.22 section 290.05, subdivision 1, clause (a), that are not subject 92.23 to Minnesota income tax; 92.24 (7) the amount of any capital losses deducted for federal 92.25 income tax purposes under sections 1211 and 1212 of the Internal 92.26 Revenue Code; 92.27 (8) the amount of any charitable contributions deducted for 92.28 federal income tax purposes under section 170 of the Internal 92.29 Revenue Code; 92.30 (9) the exempt foreign trade income of a foreign sales 92.31 corporation under sections 921(a) and 291 of the Internal 92.32 Revenue Code; 92.33 (10) the amount of percentage depletion deducted under 92.34 sections 611 through 614 and 291 of the Internal Revenue Code; 92.35 (11) for certified pollution control facilities placed in 92.36 service in a taxable year beginning before December 31, 1986, 93.1 and for which amortization deductions were elected under section 93.2 169 of the Internal Revenue Code of 1954, as amended through 93.3 December 31, 1985, the amount of the amortization deduction 93.4 allowed in computing federal taxable income for those 93.5 facilities; 93.6 (12) the amount of any deemed dividend from a foreign 93.7 operating corporation determined pursuant to section 290.17, 93.8 subdivision 4, paragraph (g); 93.9 (13) the amount of any environmental tax paid under section 93.10 59(a) of the Internal Revenue Code;and93.11 (14) the amount of a partner's pro rata share of net income 93.12 which does not flow through to the partner because the 93.13 partnership elected to pay the tax on the income under section 93.14 6242(a)(2) of the Internal Revenue Code; and 93.15 (15) the amount of net income excluded under section 114 of 93.16 the Internal Revenue Code. 93.17[EFFECTIVE DATE.] This section is effective for taxable 93.18 years beginning after December 31, 2000. 93.19 Sec. 5. Minnesota Statutes 2000, section 290.01, 93.20 subdivision 19d, is amended to read: 93.21 Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 93.22 TAXABLE INCOME.] For corporations, there shall be subtracted 93.23 from federal taxable income after the increases provided in 93.24 subdivision 19c: 93.25 (1) the amount of foreign dividend gross-up added to gross 93.26 income for federal income tax purposes under section 78 of the 93.27 Internal Revenue Code; 93.28 (2) the amount of salary expense not allowed for federal 93.29 income tax purposes due to claiming the federal jobs credit 93.30 under section 51 of the Internal Revenue Code; 93.31 (3) any dividend (not including any distribution in 93.32 liquidation) paid within the taxable year by a national or state 93.33 bank to the United States, or to any instrumentality of the 93.34 United States exempt from federal income taxes, on the preferred 93.35 stock of the bank owned by the United States or the 93.36 instrumentality; 94.1 (4) amounts disallowed for intangible drilling costs due to 94.2 differences between this chapter and the Internal Revenue Code 94.3 in taxable years beginning before January 1, 1987, as follows: 94.4 (i) to the extent the disallowed costs are represented by 94.5 physical property, an amount equal to the allowance for 94.6 depreciation under Minnesota Statutes 1986, section 290.09, 94.7 subdivision 7, subject to the modifications contained in 94.8 subdivision 19e; and 94.9 (ii) to the extent the disallowed costs are not represented 94.10 by physical property, an amount equal to the allowance for cost 94.11 depletion under Minnesota Statutes 1986, section 290.09, 94.12 subdivision 8; 94.13 (5) the deduction for capital losses pursuant to sections 94.14 1211 and 1212 of the Internal Revenue Code, except that: 94.15 (i) for capital losses incurred in taxable years beginning 94.16 after December 31, 1986, capital loss carrybacks shall not be 94.17 allowed; 94.18 (ii) for capital losses incurred in taxable years beginning 94.19 after December 31, 1986, a capital loss carryover to each of the 94.20 15 taxable years succeeding the loss year shall be allowed; 94.21 (iii) for capital losses incurred in taxable years 94.22 beginning before January 1, 1987, a capital loss carryback to 94.23 each of the three taxable years preceding the loss year, subject 94.24 to the provisions of Minnesota Statutes 1986, section 290.16, 94.25 shall be allowed; and 94.26 (iv) for capital losses incurred in taxable years beginning 94.27 before January 1, 1987, a capital loss carryover to each of the 94.28 five taxable years succeeding the loss year to the extent such 94.29 loss was not used in a prior taxable year and subject to the 94.30 provisions of Minnesota Statutes 1986, section 290.16, shall be 94.31 allowed; 94.32 (6) an amount for interest and expenses relating to income 94.33 not taxable for federal income tax purposes, if (i) the income 94.34 is taxable under this chapter and (ii) the interest and expenses 94.35 were disallowed as deductions under the provisions of section 94.36 171(a)(2), 265 or 291 of the Internal Revenue Code in computing 95.1 federal taxable income; 95.2 (7) in the case of mines, oil and gas wells, other natural 95.3 deposits, and timber for which percentage depletion was 95.4 disallowed pursuant to subdivision 19c, clause (11), a 95.5 reasonable allowance for depletion based on actual cost. In the 95.6 case of leases the deduction must be apportioned between the 95.7 lessor and lessee in accordance with rules prescribed by the 95.8 commissioner. In the case of property held in trust, the 95.9 allowable deduction must be apportioned between the income 95.10 beneficiaries and the trustee in accordance with the pertinent 95.11 provisions of the trust, or if there is no provision in the 95.12 instrument, on the basis of the trust's income allocable to 95.13 each; 95.14 (8) for certified pollution control facilities placed in 95.15 service in a taxable year beginning before December 31, 1986, 95.16 and for which amortization deductions were elected under section 95.17 169 of the Internal Revenue Code of 1954, as amended through 95.18 December 31, 1985, an amount equal to the allowance for 95.19 depreciation under Minnesota Statutes 1986, section 290.09, 95.20 subdivision 7; 95.21 (9) the amount included in federal taxable income 95.22 attributable to the credits provided in Minnesota Statutes 1986, 95.23 section 273.1314, subdivision 9, or Minnesota Statutes, section 95.24 469.171, subdivision 6; 95.25 (10) amounts included in federal taxable income that are 95.26 due to refunds of income, excise, or franchise taxes based on 95.27 net income or related minimum taxes paid by the corporation to 95.28 Minnesota, another state, a political subdivision of another 95.29 state, the District of Columbia, or a foreign country or 95.30 possession of the United States to the extent that the taxes 95.31 were added to federal taxable income under section 290.01, 95.32 subdivision 19c, clause (1), in a prior taxable year; 95.33 (11) 80 percent of royalties, fees, or other like income 95.34 accrued or received from a foreign operating corporation or a 95.35 foreign corporation which is part of the same unitary business 95.36 as the receiving corporation; 96.1 (12) income or gains from the business of mining as defined 96.2 in section 290.05, subdivision 1, clause (a), that are not 96.3 subject to Minnesota franchise tax; 96.4 (13) the amount of handicap access expenditures in the 96.5 taxable year which are not allowed to be deducted or capitalized 96.6 under section 44(d)(7) of the Internal Revenue Code; 96.7 (14) the amount of qualified research expenses not allowed 96.8 for federal income tax purposes under section 280C(c) of the 96.9 Internal Revenue Code, but only to the extent that the amount 96.10 exceeds the amount of the credit allowed under section 290.068; 96.11 (15) the amount of salary expenses not allowed for federal 96.12 income tax purposes due to claiming the Indian employment credit 96.13 under section 45A(a) of the Internal Revenue Code; 96.14 (16) the amount of any refund of environmental taxes paid 96.15 under section 59A of the Internal Revenue Code;and96.16 (17) for taxable years beginning before January 1, 2008, 96.17 the amount of the federal small ethanol producer credit allowed 96.18 under section 40(a)(3) of the Internal Revenue Code which is 96.19 included in gross income under section 87 of the Internal 96.20 Revenue Code; and 96.21 (18) for a corporation whose foreign sales corporation, as 96.22 defined in section 922 of the Internal Revenue Code, constituted 96.23 a foreign operation company during the taxable years ending 96.24 during calendar year 2000, an amount equal to 1.23 multiplied by 96.25 the amount of income excluded under section 114 of the Internal 96.26 Revenue Code, provided the income is not income of a foreign 96.27 operating company. 96.28[EFFECTIVE DATE.] This section is effective for taxable 96.29 years beginning after December 31, 2000. 96.30 Sec. 6. Minnesota Statutes 2000, section 290.01, 96.31 subdivision 31, is amended to read: 96.32 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 96.33 defined otherwise, "Internal Revenue Code" means the Internal 96.34 Revenue Code of 1986, as amended through December 31,19992000. 96.35[EFFECTIVE DATE.] This section is effective at the same 96.36 time and in the same manner as the federal changes made by the 97.1 FSC Repeal and Extraterritorial Income Exclusion Act of 2000, 97.2 Public Law Number 106-519, and the Consolidated Appropriation 97.3 Act of 2001, Public Law Number 106-554, becomes effective. 97.4 Sec. 7. Minnesota Statutes 2000, section 290.191, 97.5 subdivision 5, is amended to read: 97.6 Subd. 5. [DETERMINATION OF SALES FACTOR.] For purposes of 97.7 this section, the following rules apply in determining the sales 97.8 factor. 97.9 (a) The sales factor includes all sales, gross earnings, or 97.10 receipts received in the ordinary course of the business, except 97.11 that the following types of income are not included in the sales 97.12 factor: 97.13 (1) interest; 97.14 (2) dividends; 97.15 (3) sales of capital assets as defined in section 1221 of 97.16 the Internal Revenue Code; 97.17 (4) sales of property used in the trade or business, except 97.18 sales of leased property of a type which is regularly sold as 97.19 well as leased; 97.20 (5) sales of debt instruments as defined in section 97.21 1275(a)(1) of the Internal Revenue Code or sales of stock; and 97.22 (6)royalties, fees, or other like income of a type which97.23qualify for a subtraction from federal taxable income under97.24section 290.01, subdivision 19(d)(11)all sales, gross earnings, 97.25 or receipts used to generate income excluded under section 114 97.26 of the Internal Revenue Code. 97.27 (b) Sales of tangible personal property are made within 97.28 this state if the property is received by a purchaser at a point 97.29 within this state, and the taxpayer is taxable in this state, 97.30 regardless of the f.o.b. point, other conditions of the sale, or 97.31 the ultimate destination of the property. 97.32 (c) Tangible personal property delivered to a common or 97.33 contract carrier or foreign vessel for delivery to a purchaser 97.34 in another state or nation is a sale in that state or nation, 97.35 regardless of f.o.b. point or other conditions of the sale. 97.36 (d) Notwithstanding paragraphs (b) and (c), when 98.1 intoxicating liquor, wine, fermented malt beverages, cigarettes, 98.2 or tobacco products are sold to a purchaser who is licensed by a 98.3 state or political subdivision to resell this property only 98.4 within the state of ultimate destination, the sale is made in 98.5 that state. 98.6 (e) Sales made by or through a corporation that is 98.7 qualified as a domestic international sales corporation under 98.8 section 992 of the Internal Revenue Code are not considered to 98.9 have been made within this state. 98.10 (f) Sales, rents, royalties, and other income in connection 98.11 with real property is attributed to the state in which the 98.12 property is located. 98.13 (g) Receipts from the lease or rental of tangible personal 98.14 property, including finance leases and true leases, must be 98.15 attributed to this state if the property is located in this 98.16 state and to other states if the property is not located in this 98.17 state. Receipts from the lease or rental of moving property 98.18 including, but not limited to, motor vehicles, rolling stock, 98.19 aircraft, vessels, or mobile equipment are included in the 98.20 numerator of the receipts factor to the extent that the property 98.21 is used in this state. The extent of the use of moving property 98.22 is determined as follows: 98.23 (1) A motor vehicle is used wholly in the state in which it 98.24 is registered. 98.25 (2) The extent that rolling stock is used in this state is 98.26 determined by multiplying the receipts from the lease or rental 98.27 of the rolling stock by a fraction, the numerator of which is 98.28 the miles traveled within this state by the leased or rented 98.29 rolling stock and the denominator of which is the total miles 98.30 traveled by the leased or rented rolling stock. 98.31 (3) The extent that an aircraft is used in this state is 98.32 determined by multiplying the receipts from the lease or rental 98.33 of the aircraft by a fraction, the numerator of which is the 98.34 number of landings of the aircraft in this state and the 98.35 denominator of which is the total number of landings of the 98.36 aircraft. 99.1 (4) The extent that a vessel, mobile equipment, or other 99.2 mobile property is used in the state is determined by 99.3 multiplying the receipts from the lease or rental of the 99.4 property by a fraction, the numerator of which is the number of 99.5 days during the taxable year the property was in this state and 99.6 the denominator of which is the total days in the taxable year. 99.7 (h) Royalties and other income not described in paragraph 99.8 (a), clause (6), received for the use of or for the privilege of 99.9 using intangible property, including patents, know-how, 99.10 formulas, designs, processes, patterns, copyrights, trade names, 99.11 service names, franchises, licenses, contracts, customer lists, 99.12 or similar items, must be attributed to the state in which the 99.13 property is used by the purchaser. If the property is used in 99.14 more than one state, the royalties or other income must be 99.15 apportioned to this state pro rata according to the portion of 99.16 use in this state. If the portion of use in this state cannot 99.17 be determined, the royalties or other income must be excluded 99.18 from both the numerator and the denominator. Intangible 99.19 property is used in this state if the purchaser uses the 99.20 intangible property or the rights therein in the regular course 99.21 of its business operations in this state, regardless of the 99.22 location of the purchaser's customers. 99.23 (i) Sales of intangible property are made within the state 99.24 in which the property is used by the purchaser. If the property 99.25 is used in more than one state, the sales must be apportioned to 99.26 this state pro rata according to the portion of use in this 99.27 state. If the portion of use in this state cannot be 99.28 determined, the sale must be excluded from both the numerator 99.29 and the denominator of the sales factor. Intangible property is 99.30 used in this state if the purchaser used the intangible property 99.31 in the regular course of its business operations in this state. 99.32 (j) Receipts from the performance of services must be 99.33 attributed to the state where the services are received. For 99.34 the purposes of this section, receipts from the performance of 99.35 services provided to a corporation, partnership, or trust may 99.36 only be attributed to a state where it has a fixed place of 100.1 doing business. If the state where the services are received is 100.2 not readily determinable or is a state where the corporation, 100.3 partnership, or trust receiving the service does not have a 100.4 fixed place of doing business, the services shall be deemed to 100.5 be received at the location of the office of the customer from 100.6 which the services were ordered in the regular course of the 100.7 customer's trade or business. If the ordering office cannot be 100.8 determined, the services shall be deemed to be received at the 100.9 office of the customer to which the services are billed. 100.10[EFFECTIVE DATE.] This section is effective for 100.11 transactions after September 30, 2000. 100.12 Sec. 8. Minnesota Statutes 2000, section 290A.03, 100.13 subdivision 15, is amended to read: 100.14 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 100.15 means the Internal Revenue Code of 1986, as amended through 100.16 December 31,19992000. 100.17[EFFECTIVE DATE.] This section is effective the day 100.18 following final enactment. 100.19 Sec. 9. Minnesota Statutes 2000, section 291.005, 100.20 subdivision 1, is amended to read: 100.21 Subdivision 1. Unless the context otherwise clearly 100.22 requires, the following terms used in this chapter shall have 100.23 the following meanings: 100.24 (1) "Federal gross estate" means the gross estate of a 100.25 decedent as valued and otherwise determined for federal estate 100.26 tax purposes by federal taxing authorities pursuant to the 100.27 provisions of the Internal Revenue Code. 100.28 (2) "Minnesota gross estate" means the federal gross estate 100.29 of a decedent after (a) excluding therefrom any property 100.30 included therein which has its situs outside Minnesota and (b) 100.31 including therein any property omitted from the federal gross 100.32 estate which is includable therein, has its situs in Minnesota, 100.33 and was not disclosed to federal taxing authorities. 100.34 (3) "Personal representative" means the executor, 100.35 administrator or other person appointed by the court to 100.36 administer and dispose of the property of the decedent. If 101.1 there is no executor, administrator or other person appointed, 101.2 qualified, and acting within this state, then any person in 101.3 actual or constructive possession of any property having a situs 101.4 in this state which is included in the federal gross estate of 101.5 the decedent shall be deemed to be a personal representative to 101.6 the extent of the property and the Minnesota estate tax due with 101.7 respect to the property. 101.8 (4) "Resident decedent" means an individual whose domicile 101.9 at the time of death was in Minnesota. 101.10 (5) "Nonresident decedent" means an individual whose 101.11 domicile at the time of death was not in Minnesota. 101.12 (6) "Situs of property" means, with respect to real 101.13 property, the state or country in which it is located; with 101.14 respect to tangible personal property, the state or country in 101.15 which it was normally kept or located at the time of the 101.16 decedent's death; and with respect to intangible personal 101.17 property, the state or country in which the decedent was 101.18 domiciled at death. 101.19 (7) "Commissioner" means the commissioner of revenue or any 101.20 person to whom the commissioner has delegated functions under 101.21 this chapter. 101.22 (8) "Internal Revenue Code" means the United States 101.23 Internal Revenue Code of 1986, as amended through December 31, 101.2419992000. 101.25[EFFECTIVE DATE.] This section is effective the day 101.26 following final enactment. 101.27 ARTICLE 6 101.28 CORPORATE TAXATION 101.29 Section 1. Minnesota Statutes 2000, section 290.068, is 101.30 amended by adding a subdivision to read: 101.31 Subd. 7. [CREDIT REFUNDABLE.] If the amount of credit that 101.32 a corporation is eligible to receive under this section exceeds 101.33 the corporation's tax liability under this chapter, the 101.34 commissioner shall refund the excess to the corporation. 101.35[EFFECTIVE DATE.] This section is effective for taxable 101.36 years beginning after December 31, 2000. 102.1 Sec. 2. Minnesota Statutes 2000, section 290.068, is 102.2 amended by adding a subdivision to read: 102.3 Subd. 8. [APPROPRIATION.] An amount sufficient to pay the 102.4 refunds required by this section is annually appropriated to the 102.5 commissioner of revenue from the general fund. 102.6[EFFECTIVE DATE.] This section is effective for taxable 102.7 years beginning after December 31, 2000. 102.8 Sec. 3. Minnesota Statutes 2000, section 290.9725, is 102.9 amended to read: 102.10 290.9725 [S CORPORATION.] 102.11 For purposes of this chapter, the term "S corporation" 102.12 means any corporation having a valid election in effect for the 102.13 taxable year under section 1362 of the Internal Revenue Code. 102.14 An S corporation shall not be subject to the taxes imposed by 102.15 this chapter, except:102.16(1)the taxes imposed under sections 290.0922, 290.92, 102.17 290.9727, 290.9728, and 290.9729; and102.18(2) the tax under sections 290.06, subdivision 1, and102.19290.0921 apply to a financial institution to which either102.20section 585 or 593 of the Internal Revenue Code applies or that102.21has a wholly owned subsidiary as described in section102.221361(b)(3)(B) of the Internal Revenue Code which is a financial102.23institution under section 585 or 593 of the Internal Revenue102.24Code. 102.25[EFFECTIVE DATE.] This section is effective for taxable 102.26 years beginning after December 31, 2000. 102.27 Sec. 4. [REPEALER.] 102.28 Minnesota Statutes 2000, sections 290.06, subdivision 26; 102.29 290.0673; 290.068, subdivision 3; and 290.9726, subdivision 7, 102.30 are repealed. 102.31[EFFECTIVE DATE.] This section is effective for taxable 102.32 years beginning after December 31, 2000. 102.33 ARTICLE 7 102.34 SALES AND USE TAXES 102.35 Section 1. Minnesota Statutes 2000, section 84.922, is 102.36 amended by adding a subdivision to read: 103.1 Subd. 11. [PROOF OF SALES TAX PAYMENT.] A person applying 103.2 for initial registration in Minnesota of an all-terrain vehicle 103.3 shall provide a purchaser's certificate showing a complete 103.4 description of the all-terrain vehicle, the seller's name and 103.5 address, the full purchase price of the all-terrain vehicle, and 103.6 the trade-in allowance, if any. The certificate also must 103.7 include information showing either that (1) the sales and use 103.8 tax under chapter 297A was paid, or (2) the purchase was exempt 103.9 from tax under chapter 297A. The certificate is not required if 103.10 the applicant provides a receipt, invoice, or other document 103.11 that shows the all-terrain vehicle was purchased from a retailer 103.12 maintaining a place of business in this state as defined in 103.13 section 297A.66, subdivision 1. 103.14[EFFECTIVE DATE.] This section is effective for 103.15 registrations occurring on or after July 1, 2001. 103.16 Sec. 2. Minnesota Statutes 2000, section 297A.25, 103.17 subdivision 28, is amended to read: 103.18 Subd. 28. [WASTE PROCESSING EQUIPMENT.] The gross receipts 103.19 from the sale of and storage, use, or consumption of equipment 103.20 used for processing solid or hazardous waste at a resource 103.21 recovery facility, as defined in section 115A.03, subdivision 103.22 28, are exempt, including pollution control equipment at a 103.23 resource recovery facility that burns refuse-derived fuel or 103.24 mixed municipal solid waste as its primary fuel. An electric 103.25 generation facility that processes and utilizes waste tires as 103.26 its primary fuel is a resource recovery facility for the 103.27 purposes of this section. 103.28[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 103.29 effective for purchases and sales made after the date of final 103.30 enactment. In the next edition of Minnesota Statutes, the 103.31 revisor of statutes shall codify the amendment to this section 103.32 in section 297A.68, subdivision 24. 103.33 Sec. 3. Minnesota Statutes 2000, section 297A.61, 103.34 subdivision 3, is amended to read: 103.35 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 103.36 include, but are not limited to, each of the transactions listed 104.1 in this subdivision. 104.2 (b) Sale and purchase include any transfer of title or 104.3 possession, or both, of tangible personal property, whether 104.4 absolutely or conditionally, and the leasing of or the granting 104.5 of a license to use or consume, for a consideration, tangible 104.6 personal property, other than a manufactured home used for 104.7 residential purposes for a continuous period of 30 days or more. 104.8 (c) Sale and purchase include the production, fabrication, 104.9 printing, or processing of tangible personal property for a 104.10 consideration for consumers who furnish either directly or 104.11 indirectly the materials used in the production, fabrication, 104.12 printing, or processing. 104.13 (d) Sale and purchase include the furnishing, preparing, or 104.14 serving for a consideration of food or drinks. Notwithstanding 104.15 section 297A.67, subdivision 2, taxable food or drinks include, 104.16 but are not limited to, the following: 104.17 (1) food or drinks sold by the retailer for immediate 104.18 consumption on the retailer's premises. Food and drinks sold 104.19 within a building or grounds that require an admission charge 104.20 for entrance are presumed to be sold for consumption on the 104.21 premises; 104.22 (2) food or drinks prepared by the retailer for immediate 104.23 consumption either on or off the retailer's premises. For 104.24 purposes of this subdivision, "food or drinks prepared for 104.25 immediate consumption" means any food product upon which an act 104.26 of preparation including, but not limited to, cooking, mixing, 104.27 sandwich making, blending, heating, or pouring has been 104.28 performed by the retailer so the food product may be immediately 104.29 consumed by the purchaser; 104.30 (3) ice cream, ice milk, frozen yogurt products, or frozen 104.31 novelties sold in single or individual servings including, but 104.32 not limited to, cones, sundaes, and snow cones; 104.33 (4) soft drinks and other beverages, including all 104.34 carbonated and noncarbonated beverages or drinks sold in liquid 104.35 form, but not including beverages or drinks which contain milk 104.36 or milk products, beverages or drinks containing 15 or more 105.1 percent fruit juice, and noncarbonated and noneffervescent 105.2 bottled water sold in individual containers of one-half gallon 105.3 or more in size; 105.4 (5) gum, candy, and candy products; 105.5 (6) ice; 105.6 (7) all food sold from vending machines; 105.7 (8) all food for immediate consumption sold from concession 105.8 stands and vehicles; 105.9 (9) party trays; 105.10 (10) all meals and single servings of packaged snack food 105.11 sold in restaurants and bars; and 105.12 (11) bakery products that are: 105.13 (i) prepared by the retailer for consumption on the 105.14 retailer's premises; 105.15 (ii) sold at a place that charges admission; 105.16 (iii) sold from vending machines; or 105.17 (iv) sold in single or individual servings from concession 105.18 stands, vehicles, bars, and restaurants. 105.19 For purposes of this paragraph, "single or individual 105.20 servings" does not include products when sold in bulk containers 105.21 or bulk packaging. 105.22 For purposes of this paragraph, "premises" means the total 105.23 space and facilities, including buildings, grounds, and parking 105.24 lots that are made available or that are available for use by 105.25 the retailer or customer for the purpose of sale or consumption 105.26 of prepared food and drinks. The premises of a caterer is the 105.27 place where the catered food or drinks are served. 105.28 (e) A sale and a purchase includes the furnishing for a 105.29 consideration of electricity, gas, water, or steam for use or 105.30 consumption within this stateor local exchange telephone105.31service, intrastate toll service, and interstate toll service,105.32if that service originates from and is charged to a telephone105.33located in this state. Telephone service includes (1) paging105.34services, and (2) private communication service, as defined in105.35United States Code, title 26, section 4252(d), except for105.36private communication service purchased by an agent acting on106.1behalf of the state lottery. Telephone service does not include106.2services purchased with a prepaid telephone calling card. The106.3furnishing for a consideration of access to telephone services106.4by a hotel to its guests is a sale. The furnishing for a106.5consideration of items listed in this paragraph by a municipal106.6corporation is a sale. 106.7 (f) A sale and a purchase includes the transfer for a 106.8 consideration of computer software. 106.9 (g) A sale and a purchase includes the furnishing for a 106.10 consideration of taxable services as defined in subdivision 16. 106.11 (h) A sale and a purchase includes the furnishing for a 106.12 consideration of tangible personal property or taxable services 106.13 by the United States or any of its agencies or 106.14 instrumentalities, or the state of Minnesota, its agencies, 106.15 instrumentalities, or political subdivisions. 106.16 (i) A sale and a purchase includes the furnishing for a 106.17 consideration of telecommunications services, including cable 106.18 television services and direct satellite services. 106.19 Telecommunications services are taxed to the extent allowed 106.20 under federal law if those services: 106.21 (1) either (i) originate and terminate in this state; or 106.22 (ii) originate in this state and terminate outside the state and 106.23 the service is charged to a telephone number customer located in 106.24 this state or to the account of any transmission instrument in 106.25 this state; or (iii) originate outside this state and terminate 106.26 in this state and the service is charged to a telephone number 106.27 customer located in this state or to the account of any 106.28 transmission instrument in this state; or 106.29 (2) are rendered by providing a private communications 106.30 service for which the customer has one or more locations within 106.31 Minnesota connected to the service and the service is charged to 106.32 a telephone number customer located in this state or to the 106.33 account of any transmission instrument in this state. 106.34 All charges for mobile telecommunications services, as 106.35 defined in United States Code, title 4, section 124, are deemed 106.36 to be provided by the customer's home service provider and 107.1 sourced to the customer's place of primary use and are subject 107.2 to tax based upon the customer's place of primary use in 107.3 accordance with the Mobile Telecommunications Sourcing Act, 107.4 United States Code, title 4, sections 116 to 126. 107.5[EFFECTIVE DATE.] This section is effective for sales and 107.6 purchases made after June 30, 2001. 107.7 Sec. 4. Minnesota Statutes 2000, section 297A.61, 107.8 subdivision 12, is amended to read: 107.9 Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new 107.10 or used machinery, equipment, implements, accessories, and 107.11 contrivances used directly and principally in the production for 107.12 sale, but not including the processing, of livestock, dairy 107.13 animals, dairy products, poultry and poultry products, fruits, 107.14 vegetables, trees and shrubs, plants, forage, grains, and bees 107.15 and apiary products. 107.16 (b) Farm machinery includes: 107.17 (1) machinery for the preparation, seeding, or cultivation 107.18 of soil for growing agricultural crops and sod, for the 107.19 harvesting and threshing of agricultural products, or for the 107.20 harvesting or mowing of sod; 107.21 (2) barn cleaners, milking systems, grain dryers,automatic107.22 feeding systems including stationary feed bunks, and similar 107.23 installations, whether or not the equipment is installed by the 107.24 seller and becomes part of the real property; 107.25 (3) irrigation equipment sold for exclusively agricultural 107.26 use, including pumps, pipe fittings, valves, sprinklers, and 107.27 other equipment necessary to the operation of an irrigation 107.28 system when sold as part of an irrigation system, whether or not 107.29 the equipment is installed by the seller and becomes part of the 107.30 real property; 107.31 (4) logging equipment, including chain saws used for 107.32 commercial logging; 107.33 (5) fencing used for the containment of farmed cervidae, as 107.34 defined in section 17.451, subdivision 2; 107.35 (6) primary and backup generator units used to generate 107.36 electricity for the purpose of operating farm machinery, as 108.1 defined in this subdivision, or providing light or space heating 108.2 necessary for the production of livestock, dairy animals, dairy 108.3 products, or poultry and poultry products; 108.4 (7) aquaculture production equipment as defined in 108.5 subdivision 13; and 108.6 (8) equipment used for maple syrup harvesting. 108.7 (c) Farm machinery does not include: 108.8 (1) repair or replacement parts; 108.9 (2) tools, shop equipment, grain bins,feed bunks,fencing 108.10 material except fencing material covered by paragraph (b), 108.11 clause (5), communication equipment, and other farm supplies; 108.12 (3) motor vehicles taxed under chapter 297B; 108.13 (4) snowmobiles or snow blowers; or 108.14 (5) lawn mowers except those used in the production of sod 108.15 for sale, or garden-type tractors or garden tillers. 108.16[EFFECTIVE DATE.] This section is effective for sales and 108.17 purchases made after June 30, 2001. 108.18 Sec. 5. Minnesota Statutes 2000, section 297A.61, 108.19 subdivision 16, is amended to read: 108.20 Subd. 16. [TAXABLE SERVICES.] (a) "Taxable services" means 108.21 the services listed in this subdivision and other services 108.22 listed in subdivision 3. 108.23 (b) Taxable services includes the granting of the privilege 108.24 of admission to places of amusement, recreational areas, or 108.25 athletic events, and the making available of amusement devices, 108.26 tanning facilities, reducing salons, steam baths, turkish baths, 108.27 health clubs, and spas or athletic facilities. 108.28 (c) Taxable services includes the furnishing of lodging and 108.29 related services by a hotel, rooming house, resort, campground, 108.30 motel, or trailer camp and the granting of any similar license 108.31 to use real property other than the renting or leasing thereof 108.32 for a continuous period of 30 days or more. 108.33 (d)Taxable services includes the furnishing of cable108.34television services or similar television services, including,108.35but not limited to, charges for basic, premium, pay-per-view,108.36and any other similar service.109.1(e)Taxable services includes the furnishing of parking 109.2 services, whether on a contractual, hourly, or other periodic 109.3 basis, except for parking at a meter. 109.4(f)(e) Taxable services includes the granting of 109.5 membership in a club, association, or other organization if: 109.6 (1) the club, association, or other organization makes 109.7 available for the use of its members sports and athletic 109.8 facilities, without regard to whether a separate charge is 109.9 assessed for use of the facilities; and 109.10 (2) use of the sports and athletic facility is not made 109.11 available to the general public on the same basis as it is made 109.12 available to members. 109.13 Granting of membership means both one-time initiation fees and 109.14 periodic membership dues. Sports and athletic facilities 109.15 include golf courses; tennis, racquetball, handball, and squash 109.16 courts; basketball and volleyball facilities; running tracks; 109.17 exercise equipment; swimming pools; and other similar athletic 109.18 or sports facilities. 109.19(g)(f) Taxable services includes the furnishing of the 109.20 following services as provided in this paragraph: 109.21 (1) laundry and dry cleaning services including cleaning, 109.22 pressing, repairing, altering, and storing clothes, linen 109.23 services and supply, cleaning and blocking hats, and carpet, 109.24 drapery, upholstery, and industrial cleaning. Laundry and dry 109.25 cleaning services do not include services provided by coin 109.26 operated facilities operated by the customer; 109.27 (2) motor vehicle washing, waxing, and cleaning services, 109.28 including services provided by coin operated facilities operated 109.29 by the customer, and rustproofing, undercoating, and towing of 109.30 motor vehicles; 109.31 (3) building and residential cleaning, maintenance, and 109.32 disinfecting and exterminating services; 109.33 (4) detective, security, burglar, fire alarm, and armored 109.34 car services; but not including services performed within the 109.35 jurisdiction they serve by off-duty licensed peace officers as 109.36 defined in section 626.84, subdivision 1, or services provided 110.1 by a nonprofit organization for monitoring and electronic 110.2 surveillance of persons placed on in-home detention pursuant to 110.3 court order or under the direction of the Minnesota department 110.4 of corrections; 110.5 (5) pet grooming services; 110.6 (6) lawn care, fertilizing, mowing, spraying and sprigging 110.7 services; garden planting and maintenance; tree, bush, and shrub 110.8 pruning, bracing, spraying, and surgery; indoor plant care; 110.9 tree, bush, shrub, and stump removal; and tree trimming for 110.10 public utility lines. Services performed under a construction 110.11 contract for the installation of shrubbery, plants, sod, trees, 110.12 bushes, and similar items are not taxable; 110.13 (7) massages, except when provided by a licensed health 110.14 care facility or professional or upon written referral from a 110.15 licensed health care facility or professional for treatment of 110.16 illness, injury, or disease; and 110.17 (8) the furnishing of lodging, board, and care services for 110.18 animals in kennels and other similar arrangements, but excluding 110.19 veterinary and horse boarding services. 110.20 The services listed in this paragraph are taxable under 110.21 section 297A.62 if the service is performed wholly within 110.22 Minnesota or if the service is performed partly within and 110.23 partly outside Minnesota and the greater proportion of the 110.24 service is performed in Minnesota, based on the cost of 110.25 performance. In applying the provisions of this chapter, the 110.26 terms "tangible personal property" and "sales at retail" include 110.27 taxable services and the provision of taxable services, unless 110.28 specifically provided otherwise. Services performed by an 110.29 employee for an employer are not taxable. Services performed by 110.30 a partnership or association for another partnership or 110.31 association are not taxable if one of the entities owns or 110.32 controls more than 80 percent of the voting power of the equity 110.33 interest in the other entity. Services performed between 110.34 members of an affiliated group of corporations are not taxable. 110.35 For purposes of this section, "affiliated group of corporations" 110.36 includes those entities that would be classified as members of 111.1 an affiliated group under United States Code, title 26, section 111.2 1504, and that are eligible to file a consolidated tax return 111.3 for federal income tax purposes. 111.4[EFFECTIVE DATE.] This section is effective for sales and 111.5 purchases made after June 30, 2001. 111.6 Sec. 6. Minnesota Statutes 2000, section 297A.61, is 111.7 amended by adding a subdivision to read: 111.8 Subd. 24. [TELECOMMUNICATIONS SERVICES.] (a) 111.9 "Telecommunications services" means the transmission, 111.10 conveyance, or routing of voice, data, audio, video, or any 111.11 other information or signals to a point, or between or among 111.12 points, by or through any electronic, satellite, optical, 111.13 microwave, or other medium or method now in existence or 111.14 hereafter devised, regardless of the protocol used for such 111.15 transmission, conveyance, or routing. 111.16 (b) Telecommunications services include the furnishing for 111.17 consideration of access to telephone services by a hotel to its 111.18 guests. 111.19 (c) Telecommunications services do not include: 111.20 (1) services purchased with a prepaid telephone calling 111.21 card; 111.22 (2) private communication service purchased by an agent 111.23 acting on behalf of the state lottery; 111.24 (3) information services; and 111.25 (4) purchases of telecommunications when the purchaser uses 111.26 the purchased services as a component part of or integrates such 111.27 service into another telecommunications service that is sold by 111.28 the purchaser in the normal course of business. 111.29 (d) For purposes of this subdivision, "information 111.30 services" means the offering of the capability for generating, 111.31 acquiring, storing, transforming, processing, retrieving, 111.32 utilizing, or making available information. 111.33[EFFECTIVE DATE.] This section is effective for sales and 111.34 purchases occurring after June 30, 2001. 111.35 Sec. 7. Minnesota Statutes 2000, section 297A.61, is 111.36 amended by adding a subdivision to read: 112.1 Subd. 25. [CABLE TELEVISION SERVICE.] "Cable television 112.2 service" means the transmission of video, audio, or other 112.3 programming service to purchasers, and the subscriber 112.4 interaction, if any, required for the selection or use of the 112.5 programming service, regardless of whether the programming is 112.6 transmitted over facilities owned or operated by the cable 112.7 service provider or over facilities owned or operated by one or 112.8 more dealers of communications services. The term includes 112.9 point-to-multipoint distribution services by which programming 112.10 is transmitted or broadcast by microwave or other equipment 112.11 directly to the subscriber's premises. The term includes basic, 112.12 extended, premium, pay-per-view, digital, and music services. 112.13[EFFECTIVE DATE.] This section is effective for sales and 112.14 purchases occurring after June 30, 2001. 112.15 Sec. 8. Minnesota Statutes 2000, section 297A.61, is 112.16 amended by adding a subdivision to read: 112.17 Subd. 26. [PRIVATE COMMUNICATION SERVICE.] "Private 112.18 communication service" means a communication service furnished 112.19 to a subscriber which entitles the subscriber to: 112.20 (1) exclusive or priority use of any communication channel 112.21 or group of channels; 112.22 (2) the use of an intercommunication system for the 112.23 subscriber's stations, or regardless of whether the channel, 112.24 group of channels, or intercommunication system may be connected 112.25 through switching; 112.26 (3) the switching capacity, extension lines and stations, 112.27 or other associated services that are provided in connection 112.28 with, and are necessary or unique to the use of, channels or 112.29 systems described in clause (1); or 112.30 (4) any combination of tunneling, encryption, 112.31 authentication, and access control technologies and services 112.32 used to carry traffic over the Internet, a managed Internet 112.33 provider network or provider's backbone. 112.34[EFFECTIVE DATE.] This section is effective for sales and 112.35 purchases occurring after June 30, 2001. 112.36 Sec. 9. Minnesota Statutes 2000, section 297A.61, is 113.1 amended by adding a subdivision to read: 113.2 Subd. 27. [DIRECT SATELLITE SERVICE.] "Direct satellite 113.3 service" means programming transmitted or broadcast by satellite 113.4 directly to the subscriber's premises without the use of ground 113.5 receiving or distribution equipment, except at the subscriber's 113.6 premises or in the uplink process to the satellite. 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.67, is 113.10 amended by adding a subdivision to read: 113.11 Subd. 13a. [INSTRUCTIONAL MATERIALS.] Instructional 113.12 materials, other than textbooks, that are prescribed for use in 113.13 conjunction with a course of study in a post-secondary school, 113.14 college, university, or private career school to students who 113.15 are regularly enrolled at such institutions are exempt. For 113.16 purposes of this subdivision, "instructional materials" means 113.17 materials required to be used directly in the completion of the 113.18 course of study, including, but not limited to, interactive CDs, 113.19 tapes, and computer software. 113.20 Instructional materials do not include general reference 113.21 works or other items incidental to the instructional process 113.22 such as pens, pencils, paper, folders, or computers. For 113.23 purposes of this subdivision, "school" and "private career 113.24 school" have the meanings given in subdivision 13. 113.25[EFFECTIVE DATE.] This section is effective for sales after 113.26 June 30, 2001. 113.27 Sec. 11. Minnesota Statutes 2000, section 297A.67, is 113.28 amended by adding a subdivision to read: 113.29 Subd. 26. [ENERGY EFFICIENT PRODUCTS.] (a) The following 113.30 products are exempt if they have an energy star label: 113.31 (1) any door or window that qualifies for the energy star 113.32 label for the northern climate; 113.33 (2) a residential lighting fixture or a compact fluorescent 113.34 bulb; 113.35 (3) insulation; and 113.36 (4) a ground source closed loop or air source heat pump. 114.1 (b) The following products are exempt if they have an 114.2 energyguide label that indicates that the product meets or 114.3 exceeds the standards listed below: 114.4 (1) an electric heat pump hot water heater with an energy 114.5 factor of at least 1.9; 114.6 (2) a natural gas water heater with an energy factor of at 114.7 least 0.62; 114.8 (3) a natural gas heat pump that has a coefficient of 114.9 performance of at least 1.25 for heating and at least 0.70 for 114.10 cooling; 114.11 (4) a refrigerator with a capacity of at least ten cubic 114.12 feet that uses less than 500 kilowatt-hours per year; 114.13 (5) a window air conditioner with an energy efficiency 114.14 rating greater than 11.0; 114.15 (6) a dishwasher that uses less than 425 kilowatt-hours per 114.16 year; 114.17 (7) a clothes washer that uses less than 250 kilowatt-hours 114.18 per year or any horizontal axis washer; 114.19 (8) a central air conditioner with a seasonal energy 114.20 efficiency rating greater than 14.0; 114.21 (9) a furnace with an annual fuel efficiency rating greater 114.22 than 93 percent; and 114.23 (10) a boiler with an annual fuel efficiency rating greater 114.24 than 88 percent. 114.25 (c) For purposes of this subdivision, "energy star label" 114.26 means the label granted to certain products that meet United 114.27 States Environmental Protection Agency and United States 114.28 Department of Energy criteria for energy efficiency. For 114.29 purposes of this subdivision, "energyguide label" means the 114.30 label that the United State Federal Trade Commissioner requires 114.31 manufacturers to apply to certain appliances under United States 114.32 Code, title 16, part 305. 114.33[EFFECTIVE DATE.] This section is effective for sales and 114.34 purchases made after June 30, 2001, and before January 1, 2007. 114.35 Sec. 12. Minnesota Statutes 2000, section 297A.67, is 114.36 amended by adding a subdivision to read: 115.1 Subd. 27. [PHOTOVOLTAIC EQUIPMENT.] A photovoltaic device 115.2 is exempt. For purposes of this section, "photovoltaic device" 115.3 means a solid-state electrical device, such as a solar module, 115.4 that converts light directly into direct current electricity of 115.5 voltage-current characteristics that are a function of the 115.6 characteristics of the light source and the materials in and 115.7 design of the device. A "solar module" is a photovoltaic device 115.8 that produces a specified power output under defined test 115.9 conditions, usually composed of groups of solar cells connected 115.10 in series, in parallel, or in series-parallel combinations. 115.11[EFFECTIVE DATE.] This section is effective for sales and 115.12 purchases made after June 30, 2001, and before January 1, 2007. 115.13 Sec. 13. Minnesota Statutes 2000, section 297A.68, 115.14 subdivision 3, is amended to read: 115.15 Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 115.16 SERVICES.] (a) Materials stored, used, or consumed in providing 115.17 a taxable service listed in section 297A.61, subdivision 16, 115.18 paragraph(g)(f), intended to be sold ultimately at retail are 115.19 exempt. 115.20 (b) This exemption includes, but is not limited to: 115.21 (1) chemicals, lubricants, packaging materials, seeds, 115.22 trees, fertilizers, and herbicides, if these items are used or 115.23 consumed in providing the taxable service; 115.24 (2) chemicals used to treat waste generated as a result of 115.25 providing the taxable service; 115.26 (3) accessory tools, equipment, and other items that are 115.27 separate detachable units used in providing the service and that 115.28 have an ordinary useful life of less than 12 months; and 115.29 (4) fuel, electricity, gas, and steam used or consumed in 115.30 the production process, except that electricity, gas, or steam 115.31 used for space heating or lighting is exempt only if it is 115.32 necessary to produce that particular taxable service. 115.33 (c) This exemption does not include machinery, equipment, 115.34 implements, tools, accessories, appliances, contrivances, 115.35 furniture, and fixtures used in providing the taxable service. 115.36[EFFECTIVE DATE.] This section is effective for sales and 116.1 purchases made after June 30, 2001. 116.2 Sec. 14. Minnesota Statutes 2000, section 297A.68, 116.3 subdivision 19, is amended to read: 116.4 Subd. 19. [PETROLEUM PRODUCTS.] The following petroleum 116.5 products are exempt: 116.6 (1) products upon which a tax has been imposed and paid 116.7 under chapter 296A, and for which no refund has been or will be 116.8 allowed because the buyer used the fuel for nonhighway use; 116.9 (2) products that are used in the improvement of 116.10 agricultural land by constructing, maintaining, and repairing 116.11 drainage ditches, tile drainage systems, grass waterways, water 116.12 impoundment, and other erosion control structures; 116.13 (3) products purchased by a transit system receiving 116.14 financial assistance under section 174.24, 256B.0625, 116.15 subdivision 17, or 473.384; 116.16 (4) products purchased by an ambulance service licensed 116.17 under chapter 144E; 116.18 (5) products used in a passenger snowmobile, as defined in 116.19 section 296A.01, subdivision 39, for off-highway business use as 116.20 part of the operations of a resort as provided under section 116.21 296A.16, subdivision 2, clause (2); or 116.22(5)(6) products purchased by a state or a political 116.23 subdivision of a state for use in motor vehicles exempt from 116.24 registration under section 168.012, subdivision 1, paragraph (b). 116.25 Sec. 15. Minnesota Statutes 2000, section 297A.68, is 116.26 amended by adding a subdivision to read: 116.27 Subd. 35. [GEOTHERMAL EQUIPMENT.] Equipment used in a 116.28 geothermal heating and cooling system, and materials used for 116.29 installation of the system, are exempt. 116.30[EFFECTIVE DATE.] This section is effective for sales after 116.31 June 30, 2001. 116.32 Sec. 16. Minnesota Statutes 2000, section 297A.68, is 116.33 amended by adding a subdivision to read: 116.34 Subd. 36. [TELECOMMUNICATIONS EQUIPMENT.] (a) 116.35 Telecommunications machinery and equipment purchased or leased 116.36 for use directly by a telecommunications service provider 117.1 primarily in the provision of telecommunications services that 117.2 are ultimately to be sold at retail are exempt, regardless of 117.3 whether purchased by the owner, a contractor, or a subcontractor. 117.4 (b) For purposes of this subdivision, "telecommunications 117.5 machinery and equipment" includes, but is not limited to: 117.6 (1) machinery, equipment, and fixtures utilized in 117.7 receiving, initiating, amplifying, processing, transmitting, 117.8 retransmitting, recording, switching, or monitoring 117.9 telecommunications services, such as computers, transformers, 117.10 amplifiers, routers, bridges, repeaters, multiplexers, and other 117.11 items performing comparable functions; 117.12 (2) machinery, equipment, and fixtures used in the 117.13 transportation of telecommunications services, radio 117.14 transmitters and receivers, satellite equipment, microwave 117.15 equipment, and other transporting media, but not wire, cable, 117.16 fiber, poles, or conduit; 117.17 (3) ancillary machinery, equipment, and fixtures that 117.18 regulate, control, protect, or enable the machinery in clauses 117.19 (1) and (2) to accomplish its intended function, such as 117.20 auxiliary power supply, test equipment, towers, heating, 117.21 ventilating and air conditioning equipment necessary to the 117.22 operation of the telecommunications equipment; and software 117.23 necessary to the operation of the telecommunications equipment; 117.24 and 117.25 (4) repair and replacement parts, including accessories, 117.26 whether purchased as spare parts, repair parts, or as upgrades 117.27 or modifications to qualified machinery or equipment. 117.28 (c) For purposes of this subdivision, "telecommunications 117.29 services" means telecommunications services as defined in 117.30 section 297A.61, subdivision 24, paragraph (a), only. 117.31[EFFECTIVE DATE.] This section is effective for purchases 117.32 and lease payments, including payments made on existing leases, 117.33 made after June 30, 2001. 117.34 Sec. 17. Minnesota Statutes 2000, section 297A.70, 117.35 subdivision 2, is amended to read: 117.36 Subd. 2. [SALES TO GOVERNMENT.] (a) All sales, except 118.1 those listed in paragraph (b), to the following governments and 118.2 political subdivisions, or to the listed agencies or 118.3 instrumentalities of governments and political subdivisions, are 118.4 exempt: 118.5 (1) the United States and its agencies and 118.6 instrumentalities; 118.7 (2) school districts, the University of Minnesota, state 118.8 universities, community colleges, technical colleges, state 118.9 academies, the Perpich Minnesota center for arts education, and 118.10 an instrumentality of a political subdivision that is accredited 118.11 as an optional/special function school by the North Central 118.12 Association of Colleges and Schools; 118.13 (3) hospitals and nursing homes owned and operated by 118.14 political subdivisions of the state; 118.15 (4) the metropolitan council, for its purchases of 118.16 materials, supplies, and equipment used or consumed for 118.17 operations under section 473.405; 118.18 (5) other states or political subdivisions of other states, 118.19 if the sale would be exempt from taxation if it occurred in that 118.20 state; and 118.21(5)(6) sales to public libraries, public library systems, 118.22 multicounty, multitype library systems as defined in section 118.23 134.001, county law libraries under chapter 134A, state agency 118.24 libraries, the state library under section 480.09, and the 118.25 legislative reference library. 118.26 (b) This exemption does not apply to the sales of the 118.27 following products and services: 118.28 (1) building, construction, or reconstruction materials 118.29 purchased by a contractor or a subcontractor as a part of a 118.30 lump-sum contract or similar type of contract with a guaranteed 118.31 maximum price covering both labor and materials for use in the 118.32 construction, alteration, or repair of a building or facility; 118.33 (2) construction materials purchased by tax exempt entities 118.34 or their contractors to be used in constructing buildings or 118.35 facilities which will not be used principally by the tax exempt 118.36 entities; 119.1 (3) the leasing of a motor vehicle as defined in section 119.2 297B.01, subdivision 5, except for leases entered into by the 119.3 United States or its agencies or instrumentalities; or 119.4 (4) meals and lodging as defined under section 297A.61, 119.5 subdivisions 3, paragraph (d), and 16, paragraph (c), except for 119.6 meals and lodging purchased directly by the United States or its 119.7 agencies or instrumentalities. 119.8 (c) As used in this subdivision, "school districts" means 119.9 public school entities and districts of every kind and nature 119.10 organized under the laws of the state of Minnesota, and any 119.11 instrumentality of a school district, as defined in section 119.12 471.59. 119.13 Sec. 18. Minnesota Statutes 2000, section 297A.70, 119.14 subdivision 4, is amended to read: 119.15 Subd. 4. [SALES TO NONPROFIT GROUPS.] (a) All sales, 119.16 except those listed in paragraph (b), to the following 119.17 "nonprofit organizations" are exempt: 119.18 (1) an entity organized and operated exclusively for 119.19 charitable, religious, or educational purposes if the item 119.20 purchased is used in the performance of charitable, religious, 119.21 or educational functions; 119.22 (2) any senior citizen group or association of groups that: 119.23 (i) in general limits membership to persons who are either 119.24 age 55 or older, or physically disabled; and 119.25 (ii) is organized and operated exclusively for pleasure, 119.26 recreation, and other nonprofit purposes, no part of the net 119.27 earnings of which inures to the benefit of any private 119.28 shareholders; and 119.29 (3) an entity organized and operated exclusively to 119.30 maintain a cemetery owned by a religious organization. 119.31 (b) This exemption does not apply to the following sales: 119.32 (1) building, construction, or reconstruction materials 119.33 purchased by a contractor or a subcontractor as a part of a 119.34 lump-sum contract or similar type of contract with a guaranteed 119.35 maximum price covering both labor and materials for use in the 119.36 construction, alteration, or repair of a building or facility; 120.1 (2) construction materials purchased by tax-exempt entities 120.2 or their contractors to be used in constructing buildings or 120.3 facilities that will not be used principally by the tax-exempt 120.4 entities; and 120.5 (3) meals and lodging as defined under section 297A.61, 120.6 subdivisions 3, paragraph (d), and 16, paragraph (c); and 120.7 (4) leasing of a motor vehicle as defined in section 120.8 297B.01, subdivision 5, except as provided in paragraph (c). 120.9 (c) This exemption applies to the leasing of a motor 120.10 vehicle as defined in section 297B.01, subdivision 5, only if 120.11 the vehicle is: 120.12 (1) a truck, as defined in section 168.011, a bus, as 120.13 defined in section 168.011, or a passenger automobile, as 120.14 defined in section 168.011, if the automobile is designed and 120.15 used for carrying more than nine persons including the driver; 120.16 and 120.17 (2) intended to be used primarily to transport tangible 120.18 personal property or individuals, other than employees, to whom 120.19 the organization provides service in performing its charitable, 120.20 religious, or educational purpose. 120.21 (d) A limited liability company also qualifies for 120.22 exemption under this subdivision if (1) it consists of a sole 120.23 member that would qualify for the exemption, and (2) the items 120.24 purchased qualify for the exemption. 120.25 Sec. 19. Minnesota Statutes 2000, section 297A.70, 120.26 subdivision 7, is amended to read: 120.27 Subd. 7. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 120.28 Sales, except for those listed in paragraph (c), to a hospital 120.29 are exempt, if the items purchased are used in providing 120.30 hospital services. For purposes of this subdivision, "hospital" 120.31 means a hospital organized and operated for charitable purposes 120.32 within the meaning of section 501(c)(3) of the Internal Revenue 120.33 Code, and licensed under chapter 144 or by any other 120.34 jurisdiction, and "hospital services" are services authorized or 120.35 required to be performed by a "hospital" under chapter 144. 120.36 (b) Sales, except for those listed in paragraph (c), to an 121.1 outpatient surgical center are exempt, if the items purchased 121.2 are used in providing outpatient surgical services. For 121.3 purposes of this subdivision, "outpatient surgical center" means 121.4 an outpatient surgical center organized and operated for 121.5 charitable purposes within the meaning of section 501(c)(3) of 121.6 the Internal Revenue Code, and licensed under chapter 144 or by 121.7 any other jurisdiction. For the purposes of this subdivision, 121.8 "outpatient surgical services" means: (1) services authorized 121.9 or required to be performed by an outpatient surgical center 121.10 under chapter 144 or under the applicable licensure law of any 121.11 other jurisdiction; and (2) urgent care. For purposes of this 121.12 subdivision, "urgent care" means health services furnished to a 121.13 person whose medical condition is sufficiently acute to require 121.14 treatment unavailable through, or inappropriate to be provided 121.15 by, a clinic or physician's office, but not so acute as to 121.16 require treatment in a hospital emergency room. 121.17 (c) This exemption does not apply to the following products 121.18 and services: 121.19 (1) purchases made by a clinic, physician's office, or any 121.20 other medical facility not operating as a hospital or outpatient 121.21 surgical center, even though the clinic, office, or facility may 121.22 be owned and operated by a hospital or outpatient surgical 121.23 center; 121.24 (2) sales under section 297A.61, subdivisions 3, paragraph 121.25 (d), and 16, paragraph (c); 121.26 (3) building and construction materials used in 121.27 constructing buildings or facilities that will not be used 121.28 principally by the hospital or outpatient surgical center; 121.29 (4) building, construction, or reconstruction materials 121.30 purchased by a contractor or a subcontractor as a part of a 121.31 lump-sum contract or similar type of contract with a guaranteed 121.32 maximum price covering both labor and materials for use in the 121.33 construction, alteration, or repair of a hospital or outpatient 121.34 surgical center; or 121.35 (5) the leasing of a motor vehicle as defined in section 121.36 297B.01, subdivision 5. 122.1 (d) A limited liability company also qualifies for 122.2 exemption under this subdivision if (1) it consists of a sole 122.3 member that would qualify for the exemption, and (2) the items 122.4 purchased qualify for the exemption. 122.5 Sec. 20. Minnesota Statutes 2000, section 297A.70, 122.6 subdivision 10, is amended to read: 122.7 Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] (a) Tickets 122.8 or admissions to the premises of or events sponsored by an 122.9 organization that provides an opportunity for citizens of the 122.10 state to participate in the creation, performance, or 122.11 appreciation of the arts are exempt if the organization is 122.12 either (1) a tax-exempt organization within the meaning of 122.13 Minnesota Statutes 1980, section 290.05, subdivision 1, clause 122.14 (i), or (2) a municipal board that promotes cultural and arts 122.15 activities. The exemption provided with respect to a municipal 122.16 board applies only to tickets and admissions to events sponsored 122.17 by the board. For purposes of this exemption, an event is 122.18 sponsored by an organization if (i) the organization actively 122.19 participates in planning and conducting the event, (ii) the 122.20 organization assumes the risk of any financial losses as a 122.21 result of the event, and (iii) the entire net proceeds from the 122.22 event go to the organization. 122.23 (b) Tickets or admissions to the premises of the Minnesota 122.24 zoological garden are exempt, provided that the exemption under 122.25 this paragraph does not apply to tickets or admissions to 122.26 performances or events held on the premises unless the 122.27 performance or event is sponsored and conducted exclusively by 122.28 the Minnesota zoological board or employees of the Minnesota 122.29 zoological garden. 122.30[EFFECTIVE DATE.] This section, paragraph (a), is effective 122.31 for sales and purchases occurring after December 31, 2001. This 122.32 section, paragraph (b), is effective for sales after June 30, 122.33 2001. 122.34 Sec. 21. Minnesota Statutes 2000, section 297A.70, 122.35 subdivision 13, is amended to read: 122.36 Subd. 13. [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 123.1 (a) The following sales by the specified organizations for 123.2 fundraising purposes are exempt, subject to the limitations 123.3 listed in paragraph (b): 123.4 (1) all sales made by an organization that exists solely 123.5 for the purpose of providing educational or social activities 123.6 for young people primarily age 18 and under; 123.7 (2) all sales made by an organization that is a senior 123.8 citizen group or association of groups if (i) in general it 123.9 limits membership to persons age 55 or older; (ii) it is 123.10 organized and operated exclusively for pleasure, recreation, and 123.11 other nonprofit purposes; and (iii) no part of its net earnings 123.12 inures to the benefit of any private shareholders; 123.13 (3) the sale or use of tickets or admissions to a golf 123.14 tournament held in Minnesota if the beneficiary of the 123.15 tournament's net proceeds qualifies as a tax-exempt organization 123.16 under section 501(c)(3) of the Internal Revenue Code; and 123.17 (4) sales of gum, candy, and candy products sold for 123.18 fundraising purposes by a nonprofit organization that provides 123.19 educational and social activities primarily for young people 18 123.20 years of age and under. 123.21 (b) The exemptions listed in paragraph (a) are limited in 123.22 the following manner: 123.23 (1) the exemption under paragraph (a), clauses (1) and (2), 123.24 applies only if the gross annual receipts of the organization 123.25 from fundraising do not exceed $10,000; and 123.26 (2) the exemption under paragraph (a), clause (1), does not 123.27 apply if the sales are derived from admission charges or from 123.28 activities for which the money must be deposited with the school 123.29 district treasurer under section 123B.49, subdivision 2, or be 123.30 recorded in the same manner as other revenues or expenditures of 123.31 the school district under section 123B.49, subdivision 4. 123.32 (c) Sales of tangible personal property are exempt if the 123.33 entire proceeds, less the necessary expenses for obtaining the 123.34 property, will be contributed to a registered combined 123.35 charitable organization described in section 309.501, to be used 123.36 exclusively for charitable, religious, or educational purposes, 124.1 and the registered combined charitable organization has given 124.2 its written permission for the sale. Sales that occur over a 124.3 period of more than 24 days per year are not exempt under this 124.4 paragraph. 124.5 (d) For purposes of this subdivision, a club, association, 124.6 or other organization of elementary or secondary school students 124.7 organized for the purpose of carrying on sports, educational, or 124.8 other extracurricular activities is a separate organization from 124.9 the school district or school for purposes of applying the 124.10 $10,000 limit. 124.11[EFFECTIVE DATE.] This section is effective for sales and 124.12 purchases made after June 30, 2001. 124.13 Sec. 22. Minnesota Statutes 2000, section 297A.71, 124.14 subdivision 6, is amended to read: 124.15 Subd. 6. [BUSINESS INCUBATOR AND INDUSTRIAL PARK.] 124.16 Building materials and supplies for construction of a facility 124.17 that includes a business incubator and industrial park are 124.18 exempt if the facility: 124.19 (1) is owned and operated by a nonprofit charitable 124.20 organization that qualifies for tax exemption under section 124.21 501(c)(3) of the Internal Revenue Code; 124.22 (2) is used for the development of nonretail businesses, 124.23 offering access to equipment, space, services, and advice to the 124.24 tenant businesses, for the purpose of encouraging economic 124.25 development and job creation in the area served by the 124.26 organization, and emphasizes development of businesses that 124.27 manufacture products from materials found in the waste stream, 124.28 or manufacture alternative energy and conservation systems, or 124.29 make use of emerging environmental technologies; 124.30 (3) includes in its structure systems of material and 124.31 energy exchanges that use waste products from one industrial 124.32 process as sources of energy and material for other processes; 124.33 and 124.34 (4) makes use of solar and wind energy technology and 124.35 incorporates salvaged materials in its construction. 124.36 A limited liability company also qualifies for exemption 125.1 under this subdivision if (i) it consists of a sole member that 125.2 would qualify for the exemption, and (ii) the items purchased 125.3 qualify for the exemption. 125.4 Sec. 23. Minnesota Statutes 2000, section 297A.71, is 125.5 amended by adding a subdivision to read: 125.6 Subd. 23. [CONSTRUCTION MATERIALS AND EQUIPMENT; WASTE 125.7 TIRES COGENERATION ELECTRIC GENERATING FACILITY.] Materials and 125.8 supplies used or consumed in, and equipment incorporated into, 125.9 the construction, improvement, or expansion of a facility using 125.10 waste tires to generate electricity are exempt if: 125.11 (1) the facility utilizes waste tires as a primary fuel in 125.12 generating electricity; 125.13 (2) the facility is a cogeneration facility; 125.14 (3) the installed capacity of the facility is one to 25 125.15 megawatts; and 125.16 (4) construction of the facility meets the requirements of 125.17 section 177.43. 125.18[EFFECTIVE DATE.] This section is effective for purchases 125.19 and sales made after the date of final enactment. 125.20 Sec. 24. Minnesota Statutes 2000, section 297A.71, is 125.21 amended by adding a subdivision to read: 125.22 Subd. 24. [POULTRY LITTER AND OTHER BIOMASS GENERATION 125.23 FACILITY CONSTRUCTION MATERIALS AND EQUIPMENT.] Materials and 125.24 supplies used or consumed in, and equipment incorporated into, 125.25 the construction, improvement, or expansion of a facility using 125.26 biomass to generate electricity are exempt if: 125.27 (1) the facility is designed to utilize poultry litter 125.28 biomass or other biomass as established in section 216B.2424, as 125.29 a primary fuel source; 125.30 (2) the facility generates power that will be sold under a 125.31 contract approved by the public utilities commission in 125.32 accordance with the biomass mandate imposed under section 125.33 216B.2424; and 125.34 (3) construction of the facility meets the requirements of 125.35 section 177.43. 125.36[EFFECTIVE DATE.] This section is effective for purchases 126.1 and sales after June 30, 2001, and before January 1, 2003. 126.2 Sec. 25. Minnesota Statutes 2000, section 297A.71, is 126.3 amended by adding a subdivision to read: 126.4 Subd. 25. [CONSTRUCTION MATERIALS FOR QUALIFIED LOW-INCOME 126.5 HOUSING PROJECTS.] (a) Purchases of materials and supplies used 126.6 or consumed in and equipment incorporated into the construction, 126.7 improvement, or expansion of qualified low-income housing 126.8 projects are exempt from the tax imposed under this chapter if 126.9 the owner of the qualified low-income housing project is: 126.10 (1) the public housing agency or housing and redevelopment 126.11 authority of a political subdivision; 126.12 (2) an entity exercising the powers of a housing and 126.13 redevelopment authority within a political subdivision; 126.14 (3) a limited partnership in which the sole general partner 126.15 is an authority under clause (1) or an entity under clause (2); 126.16 or 126.17 (4) a nonprofit corporation subject to the provisions of 126.18 chapter 317A, and qualifying under section 501(c)(3) or 126.19 501(c)(4) of the Internal Revenue Code of 1986, as amended. 126.20 This exemption applies regardless of whether the purchases 126.21 are made by the owner of the facility or a contractor. 126.22 (b) For purposes of this exemption, "qualified low-income 126.23 housing project" means: 126.24 (1) a housing or mixed use project in which at least 20 126.25 percent of the residential units are qualifying low-income 126.26 rental housing units as defined in section 273.126; 126.27 (2) a federally assisted low-income housing project 126.28 financed by a mortgage insured or held by the United States 126.29 Department of Housing and Urban Development under United States 126.30 Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 126.31 1715z-1; United States Code, title 42, section 1437f; the Native 126.32 American Housing Assistance and Self-Determination Act, United 126.33 States Code, title 25, section 4101 et seq.; or any similar 126.34 successor federal low-income housing program; 126.35 (3) a qualified low-income housing project as defined in 126.36 United States Code, title 26, section 42(g), meeting all of the 127.1 requirements for a low-income housing credit under section 42 of 127.2 the Internal Revenue Code regardless of whether the project 127.3 actually applies for or receives a low-income housing credit; or 127.4 (4) a project that will be operated in compliance with 127.5 Internal Revenue Service revenue procedure 96-32. 127.6[EFFECTIVE DATE.] This section is effective for sales and 127.7 purchases occurring after June 30, 2001. 127.8 Sec. 26. Minnesota Statutes 2000, section 297A.71, is 127.9 amended by adding a subdivision to read: 127.10 Subd. 26. [CONSTRUCTION MATERIALS AND EQUIPMENT; 127.11 AGRICULTURAL PROCESSING MATERIALS.] Materials and supplies used 127.12 or consumed in, and machinery and equipment incorporated into 127.13 the construction, improvement, or expansion of a soybean oilseed 127.14 processing facility are exempt if: 127.15 (1) the facility is owned and operated by a cooperative 127.16 organized under chapter 308A; and 127.17 (2) the facility is located in a county that has a 127.18 population of less than 21,000 according to the most recent 127.19 decennial census. 127.20 Sec. 27. Minnesota Statutes 2000, section 297A.80, is 127.21 amended to read: 127.22 297A.80 [TAXES IN OTHER STATES; OFFSET AGAINST USE TAX.] 127.23 If an article of tangible personal property or an item 127.24 listed in section 297A.63 has already been taxed by another 127.25 state and any subdivision thereof for its sale, storage, use, or 127.26 other consumption in an amount less than the tax imposed by this 127.27 chapter, then as to the person who paid the tax in the other 127.28 state or any subdivision thereof, section 297A.63 applies only 127.29 at a rate measured by the difference between the rate imposed 127.30 under section 297A.62 and the rate by which the previous tax was 127.31 computed. If the tax imposed in the other state or any 127.32 subdivision thereof is equal to or greater than the tax imposed 127.33 in this state, then no tax is due from that person under section 127.34 297A.63. The credit shall be applied first against the amount 127.35 of any use tax due the state, and any unused portion of the 127.36 credit shall then be applied against any use tax due a 128.1 subdivision. 128.2[EFFECTIVE DATE.] This section is effective for sales and 128.3 purchases occurring after December 31, 2001. 128.4 Sec. 28. Minnesota Statutes 2000, section 297A.82, 128.5 subdivision 1, is amended to read: 128.6 Subdivision 1. [REQUIREMENTS FOR REGISTRATION.] An 128.7 aircraft must not be registered or licensed in this state unless 128.8 the applicant presents proof that the sales or use tax imposed 128.9 by this chapter has been paid or that the transaction is exempt 128.10 from the sales and use tax. The exemption for an occasional 128.11 sale under section 297A.67, subdivision 23,or 297A.68,128.12subdivision 25,does not apply to the sale or purchase of an 128.13 aircraft. 128.14[EFFECTIVE DATE.] This section is effective for sales and 128.15 purchases occurring after December 31, 2001. 128.16 Sec. 29. Minnesota Statutes 2000, section 609.75, 128.17 subdivision 1, is amended to read: 128.18 Subdivision 1. [LOTTERY.] (a) A lottery is a plan which 128.19 provides for the distribution of money, property or other reward 128.20 or benefit to persons selected by chance from among participants 128.21 some or all of whom have given a consideration for the chance of 128.22 being selected. A participant's payment for use of a 900 128.23 telephone number or another means of communication that results 128.24 in payment to the sponsor of the plan constitutes consideration 128.25 under this paragraph. 128.26 (b) An in-package chance promotion is not a lottery if all 128.27 of the following are met: 128.28 (1) participation is available, free and without purchase 128.29 of the package, from the retailer or by mail or toll-free 128.30 telephone request to the sponsor for entry or for a game piece; 128.31 (2) the label of the promotional package and any related 128.32 advertising clearly states any method of participation and the 128.33 scheduled termination date of the promotion; 128.34 (3) the sponsor on request provides a retailer with a 128.35 supply of entry forms or game pieces adequate to permit free 128.36 participation in the promotion by the retailer's customers; 129.1 (4) the sponsor does not misrepresent a participant's 129.2 chances of winning any prize; 129.3 (5) the sponsor randomly distributes all game pieces and 129.4 maintains records of random distribution for at least one year 129.5 after the termination date of the promotion; 129.6 (6) all prizes are randomly awarded if game pieces are not 129.7 used in the promotion; and 129.8 (7) the sponsor provides on request of a state agency a 129.9 record of the names and addresses of all winners of prizes 129.10 valued at $100 or more, if the request is made within one year 129.11 after the termination date of the promotion. 129.12 (c) Except as provided by section 349.40, acts in this 129.13 state in furtherance of a lottery conducted outside of this 129.14 state are included notwithstanding its validity where conducted. 129.15 (d) The distribution of property, or other reward or 129.16 benefit by an employer to persons selected by chance from among 129.17 participants who have made a contribution through a payroll or 129.18 pension deduction campaign to a registered combined charitable 129.19 organization, within the meaning of section 309.501, as a 129.20 precondition to the chance of being selected, is not a lottery 129.21 if: 129.22 (1) all of the persons eligible to be selected are employed 129.23 by or retirees of the employer; and 129.24 (2) the cost of the property or other reward or benefit 129.25 distributed and all costs associated with the distribution are 129.26 borne by the employer; and129.27(3) the total amount actually expended by the employer to129.28obtain the property or other rewards or benefits distributed by129.29the employer during the calendar year does not exceed $500. 129.30 Sec. 30. Laws 1986, chapter 396, section 5, is amended to 129.31 read: 129.32 Sec. 5. [LIQUOR, LODGING, AND RESTAURANT TAXES.] 129.33 The city may, by resolution, levy in addition to taxes 129.34 authorized by other law: 129.35 (1) a sales tax of not more than three percent on the gross 129.36 receipts on retail on-sales of intoxicating liquor and fermented 130.1 malt beverages described in section 473.592 occurring in the 130.2 downtown taxing area, provided that this tax may not be imposed 130.3 if sales of intoxicating liquor and fermented malt beverages are 130.4 exempt from taxation under chapter 297A; 130.5 (2) a sales tax of not more than three percent on the gross 130.6 receipts from the furnishing for consideration of lodging 130.7 described in section 473.592 by a hotel or motel which has more 130.8 than 50 rooms available for lodging; the tax imposed under this 130.9 clause shall be at a rate that, when added to the sum of the 130.10 rate of the sales tax imposed under Minnesota Statutes, chapter 130.11 297A, the rate of the sales tax imposed under section 4, and the 130.12 rate of any other taxes on lodging in the city of Minneapolis, 130.13 equals1213 percent; and 130.14 (3) a sales tax of not more than three percent on the gross 130.15 receipts on all sales of food primarily for consumption on or 130.16 off the premises by restaurants and places of refreshment as 130.17 defined by resolution of the city that occur within the downtown 130.18 taxing area. 130.19 These taxes shall be applied solely to pay costs of collection 130.20 and to pay or secure the payment of any principal of, premium 130.21 and interest on any bonds or any costs referred to in section 4, 130.22 subdivision 3. The commissioner of revenue may enter into 130.23 appropriate agreements with the city to provide for the 130.24 collection of these taxes by the state on behalf of the city. 130.25 The commissioner may charge the city a reasonable fee for its 130.26 collection from the proceeds of any taxes. These taxes shall be 130.27 subject to the same interest penalties and enforcement 130.28 provisions as the taxes imposed under section 473.592. 130.29 Sec. 31. Laws 1996, chapter 471, article 2, section 29, is 130.30 amended to read: 130.31 Sec. 29. [CITY OF HERMANTOWN; SALES AND USE TAX.] 130.32 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] (a) 130.33 Notwithstanding Minnesota Statutes, section 477A.016, or any 130.34 other contrary provision of law, ordinance, or city charter, the 130.35 city of Hermantown may, by ordinance, impose an additional sales 130.36 and use tax of up to one percent on salestransactions, storage, 131.1 and use taxable pursuant to Minnesota Statutes, chapter 297A, 131.2 that occur within the city. 131.3 (b) The proceeds of the first one-half of one percent of 131.4 tax imposed under this section must be usedto meet the costs of131.5 by the city for the following projects: 131.6 (1) extending a sewer interceptor line; 131.7 (2) construction of a booster pump station, reservoirs, and 131.8 related improvements to the water system; and 131.9 (3) construction of a police and fire station. 131.10 (c) Revenues received from the remaining one-half of one 131.11 percent of the tax authorized under this section must be used by 131.12 the city to pay all or part of the capital and administrative 131.13 costs of developing, acquiring, constructing, and initially 131.14 furnishing and equipping for the following projects: 131.15 (1) construction of a community education and recreation 131.16 center that includes a senior citizens center, fitness center, 131.17 swimming pool, community meeting and education room, community 131.18 technology library, and indoor track; 131.19 (2) renovation or construction of an addition to the 131.20 school's existing ice facility; 131.21 (3) construction of a new city hall; 131.22 (4) construction of a new public works garage; 131.23 (5) construction of frontage roads and other traffic 131.24 control measures along Highway 53 within the city of Hermantown; 131.25 and 131.26 (6) construction of bleachers, and outdoor soccer, 131.27 football, and track facilities at the school. 131.28 (d) Authorized expenses include, but are not limited to, 131.29 acquiring property, paying construction, administrative, and 131.30 operating expenses related to the development of the projects 131.31 listed in paragraph (c), paying debt service on bonds or other 131.32 obligations, including lease obligations, issued to finance 131.33 construction, expansion, or improvement of the projects listed 131.34 in paragraph (c), and other compatible uses, including but not 131.35 limited to, parking, lighting, and landscaping. 131.36 Subd. 2. [REFERENDUM.] (a) If the Hermantown city council 132.1 proposes to impose the sales tax authorized by this section, it 132.2 shall conduct a referendum on the issue. 132.3 (b) If the Hermantown city council initially imposes the 132.4 tax at a rate less than one percent and proposes increasing it 132.5 at a later date up to the authorized rate in subdivision 1, it 132.6 shall conduct a referendum on the increase. 132.7 (c) The question of imposing or increasing the tax must be 132.8 submitted to the voters at a special or general election. The 132.9 tax may not be imposed unless a majority of votes cast on the 132.10 question of imposing the tax are in the affirmative. The 132.11 commissioner of revenue shall prepare a suggested form of 132.12 question to be presented at the election. This subdivision 132.13 applies notwithstanding any city charter provision to the 132.14 contrary. 132.15 Subd. 3. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 132.16 TAXES.] A sales tax imposed under this section must be reported 132.17 and paid to the commissioner of revenue with the state sales 132.18 taxes, and be subject to the same penalties, interest, and 132.19 enforcement provisions. The proceeds of the tax, less refunds 132.20 and a proportionate share of the cost of collection, shall be 132.21 remitted at least quarterly to the city. The commissioner shall 132.22 deduct from the proceeds remitted an amount that equals the 132.23 indirect statewide cost as well as the direct and indirect 132.24 department costs necessary to administer, audit, and collect the 132.25 tax. The amount deducted shall be deposited in the state 132.26 general fund. 132.27 Subd. 3a. [BONDING AUTHORITY.] (a) The city may issue 132.28 general obligation bonds under Minnesota Statutes, chapter 475, 132.29 to finance the costs in subdivision 1, paragraph (c). The total 132.30 amount of bonds issued for the projects under subdivision 1, 132.31 paragraph (c), may not exceed $12,900,000 in the aggregate. An 132.32 election to approve the bonds is not required. 132.33 (b) The bonds are not included in computing any debt 132.34 limitation applicable to the city and the levy of taxes under 132.35 Minnesota Statutes, section 475.61, to pay principal of and 132.36 interest on the bonds is not subject to any levy limitation. 133.1 (c) The taxes authorized under this section may be pledged 133.2 to and used for the payment of the bonds and any bonds issued to 133.3 refund them. 133.4 Subd. 4. [TERMINATION.] The portion of the tax authorized 133.5 under this section to finance the improvements described in 133.6 subdivision 1, paragraph (b), terminates at the later of (1) ten 133.7 years after the date of initial imposition of the tax, or (2) on 133.8 the first day of the second month next succeeding a 133.9 determination by the city council that sufficient funds have 133.10 been received from that portion of the tax dedicated to finance 133.11thethose improvementsdescribed in subdivision 1, clauses (1)133.12to (3),and to prepay or retire at maturity the principal, 133.13 interest, and premium due on any bonds issued for the 133.14 improvements. The portion of the tax authorized under this 133.15 section to finance the improvements described in subdivision 1, 133.16 paragraph (c), terminates when the revenues raised are 133.17 sufficient to finance those improvements, up to an amount equal 133.18 to $12,900,000 plus any interest, premium, and other costs 133.19 associated with the bonds issued under subdivision 3a. The city 133.20 council may terminate this portion of the tax earlier. Any 133.21 funds remaining after completion of the improvements and 133.22 retirement or redemption of the bonds may be placed in the 133.23 general fund of the city. 133.24 Subd. 5. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 133.25 effective the day after final enactment, upon compliance with 133.26 Minnesota Statutes, section 645.021, subdivision 3, by the city 133.27 of Hermantown. 133.28[EFFECTIVE DATE.] This section is effective the day after 133.29 final enactment, upon compliance with Minnesota Statutes, 133.30 section 645.021, subdivision 3, by the city of Hermantown. 133.31 Sec. 32. Laws 1999, chapter 243, article 4, section 19, is 133.32 amended to read: 133.33 Sec. 19. [EFFECTIVE DATES.] 133.34 Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 133.35 purchases made after June 30, 1999. 133.36 Section 3 is effective for amended returns and refund 134.1 claims filed on or after July 1, 1999. 134.2 Section 4 is effective the day following final enactment 134.3 and applies retroactively to all open tax years and to 134.4 assessments and appeals under Minnesota Statutes, sections 134.5 289A.38 and 289A.65, for which the time limits have not expired 134.6 on the date of final enactment of this act. The provisions of 134.7 Minnesota Statutes, section 289A.50, apply to refunds claimed 134.8 under section 4. Refunds claimed under section 4 must be filed 134.9 by the later of December 31, 1999, or the time limit under 134.10 Minnesota Statutes, section 289A.40, subdivision 1. 134.11 Section 6 is effective retroactively for sales and 134.12 purchases made after June 30, 1998. 134.13 Section 8 is effective for purchases and sales made after 134.14 the date of final enactment. 134.15 Section 10 is effective for purchases made after the date 134.16 of final enactment and before July 1,20012003. 134.17 Section 12 is effective the day after final enactment. 134.18 Section 12, paragraphs (a) to (c), apply to all local sales 134.19 taxes enacted after July 1, 1999. Section 12, paragraph (d), 134.20 applies to all local sales taxes in effect at the time of, or 134.21 imposed after the day of, the enactment of this section. 134.22 Section 13 is effective the day following final enactment. 134.23[EFFECTIVE DATE.] This section is effective the day after 134.24 final enactment. 134.25 Sec. 33. Laws 2000, chapter 490, article 2, section 1, is 134.26 amended to read: 134.27 Section 1. [PROHIBITION AGAINST APPROPRIATIONS FROM TRUNK 134.28 HIGHWAY FUND.] 134.29 To ensure compliance with the Minnesota Constitution, 134.30 article XIV, sections 2, 5, and 6, the commissioner of finance, 134.31 agency directors, and legislative commission personnel may not 134.32 include in the biennial budget for fiscal years 2002 and 2003, 134.33 or in any budget thereafter, expenditures from the trunk highway 134.34 fund for a nonhighway purpose as jointly determined by the 134.35 commissioner of finance and the attorney general. For purposes 134.36 of this section, an expenditure for a nonhighway purpose is any 135.1 expenditure not for construction, improvement, or maintenance of 135.2 highways, but does not include expenditures for payment of taxes 135.3 imposed under Minnesota Statutes, chapter 297A. At the time of 135.4 submission of the biennial budget proposal to the legislature, 135.5 the commissioner of finance and the attorney general shall 135.6 report to the senate and house of representatives transportation 135.7 committees concerning any expenditure that is proposed to be 135.8 appropriated from the trunk highway fund, if that expenditure is 135.9 similar to those reduced or eliminated in sections 5 to 20. The 135.10 report must explain the highway purpose of the proposed 135.11 expenditure. 135.12 Sec. 34. Laws 2000, chapter 490, article 8, section 17, 135.13 the effective date, is amended to read: 135.14EFFECTIVE DATE: This section is effective for sales and 135.15 purchases made after January 1, 2000, and before December 135.16 31,20002001. 135.17[EFFECTIVE DATE.] This section is effective the day 135.18 following final enactment and applies retroactively to sales and 135.19 purchases made on or after December 31, 2000. 135.20 Sec. 35. [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 135.21 Subdivision 1. [SALES AND USE TAXES.] Notwithstanding 135.22 Minnesota Statutes, section 477A.016, or any other provision of 135.23 law or ordinance, if approved by the voters of the city at the 135.24 next general election held after the date of final enactment of 135.25 this act, the city of Beaver Bay may impose by ordinance a sales 135.26 and use tax at a rate of up to one percent for the purposes 135.27 specified in subdivision 2. Minnesota Statutes, section 135.28 297A.99, governs the imposition, administration, collection, and 135.29 enforcement of the tax authorized under this subdivision. 135.30 Subd. 2. [USE OF REVENUES.] The revenues received from 135.31 taxes authorized by subdivision 1 must be used to pay the bonded 135.32 indebtedness on the city community building and to provide 135.33 funding for recreational facilities, the upgrading of the water 135.34 and sewer system, a fire hall and equipment, and improvement of 135.35 streets. 135.36 Subd. 3. [TERMINATION OF TAXES.] The authority granted 136.1 under subdivision 1 to the city of Beaver Bay to impose sales 136.2 and use taxes expires when the city council determines that 136.3 sufficient funds have been received to pay the costs of the 136.4 projects described in subdivision 2. 136.5[EFFECTIVE DATE.] This section is effective the day after 136.6 approval by the governing body of the city of Beaver Bay and 136.7 compliance with Minnesota Statutes, section 645.021, subdivision 136.8 3. 136.9 Sec. 36. [CITY OF CLOQUET; TAXES AUTHORIZED.] 136.10 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 136.11 Minnesota Statutes, section 477A.016, or any other provision of 136.12 law, ordinance, or city charter, the city of Cloquet may impose 136.13 by ordinance a sales and use tax of up to one-half of one 136.14 percent for the purpose specified in subdivision 3. Except as 136.15 otherwise specifically provided in this section, Minnesota 136.16 Statutes, section 297A.99, governs the imposition, 136.17 administration, collection, and enforcement of the tax 136.18 authorized under this subdivision. 136.19 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 136.20 Minnesota Statutes, section 477A.016, or any other provision of 136.21 law, ordinance, or city charter, the city of Cloquet may impose 136.22 by ordinance, for the purposes specified in subdivision 3, an 136.23 excise tax of up to $20 per motor vehicle, as defined by 136.24 ordinance, purchased or acquired from any person engaged within 136.25 the city in the business of selling motor vehicles at retail. 136.26 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 136.27 authorized by subdivisions 1 and 2 must be used by the city to 136.28 pay the cost of collecting the taxes and to pay for the 136.29 following projects: 136.30 (1) construction and equipment of a senior and community 136.31 center; 136.32 (2) construction and improvements to park land along the St. 136.33 Louis river; and 136.34 (3) extension of water and sewer lines and other 136.35 improvements to city infrastructure for expansion of a city 136.36 industrial park. 137.1 Authorized expenses include, but are not limited to, 137.2 acquiring property, paying construction, and operating expenses 137.3 related to the development of the facility, and paying debt 137.4 service on bonds or other obligations, including lease 137.5 obligations, issued to finance the construction, expansion, or 137.6 improvement of the facility. 137.7 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 137.8 under Minnesota Statutes, chapter 475, to finance the capital 137.9 expenditure and improvement projects described in subdivision 3. 137.10 An election to approve the bonds under Minnesota Statutes, 137.11 section 475.58, is not required. 137.12 (b) The issuance of bonds under this subdivision is not 137.13 subject to Minnesota Statutes, sections 275.60 and 275.61. 137.14 (c) The bonds are not included in computing any debt 137.15 limitation applicable to the city, and the levy of taxes under 137.16 Minnesota Statutes, section 475.61, to pay principal of and 137.17 interest on the bonds is not subject to any levy limitation. 137.18 (d) The sales and use and excise taxes authorized in this 137.19 section may be pledged to and used for the payment of the bonds 137.20 and any bonds issued to refund them only if the bonds and any 137.21 refunding bonds are general obligations of the city. 137.22 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 137.23 subdivisions 1 and 2 expire at the earlier of (1) 20 years, or 137.24 (2) when the city council determines that sufficient funds have 137.25 been received from the taxes to finance the capital and 137.26 administrative costs for the acquisition, construction, 137.27 expansion, and improvement of the facility described in 137.28 subdivision 3, plus the additional amount needed to pay the 137.29 costs related to issuance of bonds under subdivision 4, 137.30 including interest on the bonds. Any funds remaining after 137.31 completion of the project and retirement or redemption of the 137.32 bonds may be placed in the general fund of the city. The taxes 137.33 imposed under subdivisions 1 and 2 may expire at an earlier time 137.34 if the city so determines by ordinance. 137.35[EFFECTIVE DATE.] This section is effective the day after 137.36 compliance by the governing body of the city of Cloquet with 138.1 Minnesota Statutes, section 645.021, subdivision 3. 138.2 Sec. 37. [CITY OF FAIRMONT; TAXES AUTHORIZED.] 138.3 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 138.4 Minnesota Statutes, sections 297A.99, subdivision 3, 477A.016, 138.5 or any other provision of law, ordinance, or city charter, if 138.6 approved by the city voters at the next municipal general 138.7 election held after the date of final enactment of this act, the 138.8 city of Fairmont may impose by ordinance a sales and use tax of 138.9 up to one-half of one percent for the purposes specified in 138.10 subdivision 3. Minnesota Statutes, section 297A.99, governs the 138.11 imposition, administration, collection, and enforcement of the 138.12 tax authorized under this subdivision. 138.13 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 138.14 Minnesota Statutes, section 477A.016, or any other provision of 138.15 law, ordinance, or city charter, the city of Fairmont may impose 138.16 by ordinance, for the purposes specified in subdivision 3, an 138.17 excise tax of up to $20 per motor vehicle, as defined by 138.18 ordinance, purchased or acquired from any person engaged within 138.19 the city in the business of selling motor vehicles at retail. 138.20 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 138.21 authorized by subdivisions 1 and 2 must be used by the city to 138.22 pay the cost of collecting the taxes and to pay for construction 138.23 and improvement of streets, sewers, and water mains. 138.24 Subd. 4. [TERMINATION OF TAXES.] The authority to impose 138.25 the taxes under this section expires at the earlier of (1) ten 138.26 years after initial imposition of the taxes or (2) when the city 138.27 council determines that sufficient funds have been received from 138.28 the taxes to finance the cost of the projects described in 138.29 subdivision 3. 138.30[EFFECTIVE DATE.] This section is effective the day after 138.31 compliance by the governing body of the city of Fairmont with 138.32 Minnesota Statutes, section 645.021, subdivision 3. 138.33 Sec. 38. [ST. CLOUD AREA CITIES; TAXES AUTHORIZED.] 138.34 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 138.35 Minnesota Statutes, section 477A.016, or any other provision of 138.36 law, ordinance, or city charter, the following cities may, by 139.1 ordinance, impose a sales and use tax of one-half of one percent 139.2 for the purposes specified in subdivision 2: 139.3 (1) the city of St. Cloud, pursuant to the approval of the 139.4 city voters at the general election held on November 7, 2000; 139.5 (2) the city of Sartell, pursuant to the approval of the 139.6 city voters at an election held in November 1999; and 139.7 (3) each of the cities of Sauk Rapids, Waite Park, St. 139.8 Joseph, and St. Augusta, pursuant to the approval of the voters 139.9 of that city at the next general election following the date of 139.10 final enactment of this act, as provided for in subdivision 3. 139.11 Minnesota Statutes, section 297A.99, governs the 139.12 imposition, administration, collection, and enforcement of the 139.13 taxes authorized under this subdivision, except as specifically 139.14 provided otherwise in this section. 139.15 Subd. 2. [USE OF REVENUES.] (a) Revenues received from the 139.16 taxes authorized under subdivision 1, with the exception of 139.17 revenues collected from a tax imposed in the city of Waite Park, 139.18 must be used for the cost of collecting and administering the 139.19 taxes and to pay all or part of the capital or administrative 139.20 costs of the acquisition, construction, and improvement of (1) 139.21 the main runway improvements to the St. Cloud Regional Airport; 139.22 and (2) remodeling, expansion, or construction of the St. 139.23 Cloud/Great River Regional Library at its current location as 139.24 provided for in the city of St. Cloud capital improvement 139.25 program 2000 to 2005, adopted by the St. Cloud planning 139.26 commission on July 14, 1999. Revenues from a tax imposed by the 139.27 city of Waite Park must be used to pay the cost of collecting 139.28 and administering the tax and to fund the St. Cloud Regional 139.29 Airport and the Waite Park branch of the St. Cloud/Great River 139.30 Regional Library but not the main facility of the St. 139.31 Cloud/Great River Regional Library. Authorized expenses 139.32 include, but are not limited to, acquiring property, paying 139.33 construction expenses related to the development of these 139.34 facilities, and securing and paying debt service on bonds or 139.35 other obligations issued to finance construction or improvement 139.36 of the authorized facility. 140.1 (b) If revenues collected from the taxes imposed under 140.2 subdivision 1 are greater than the amount needed to meet 140.3 obligations under paragraph (a) in any year, the surplus may be 140.4 returned to the cities in a manner agreed upon by the 140.5 participating cities under this section, to be used by the 140.6 cities for projects of regional significance, limited to: the 140.7 acquisition and improvement of park land and open space; the 140.8 purchase, renovation, and construction of public buildings and 140.9 land primarily used for the arts, libraries, and community 140.10 centers; major roadway improvements; and for debt service on 140.11 bonds issued for these purposes. Authorized expenses include, 140.12 but are not limited to, acquiring property, paying construction 140.13 expenses related to the development of these facilities, and 140.14 securing and paying debt service on bonds or other obligations 140.15 issued to finance construction or improvement of the authorized 140.16 facility. The distribution of surplus revenues raised by the 140.17 tax shall be determined by an applicable joint powers agreement. 140.18 The revenues returned to each city may only be used to fund 140.19 projects that have been approved by voters at the referendum 140.20 authorizing the tax. 140.21 (c) Pursuant to the approval of the city of St. Cloud 140.22 voters at the general election held on November 7, 2000, the 140.23 surplus returned to the city of St. Cloud under paragraph (b) 140.24 shall be used for the following projects: 140.25 (1) intersection improvements to the 25th Avenue and trunk 140.26 highway No. 23, I-94 interchange at county road 75, 10th Street 140.27 South improvements, the West Metro corridor improvements, and 140.28 other regionally significant road projects; and 140.29 (2) park and nature land purchase, trail development, and 140.30 improvements and expansions of existing regional park 140.31 facilities, as provided for in the city of St. Cloud capital 140.32 improvement program 2000 to 2005, adopted by the St. Cloud 140.33 planning commission on July 14, 1999. Revenues from the tax 140.34 imposed in the city of Sartell must be used for the purposes 140.35 listed in this subdivision, notwithstanding other purposes 140.36 listed in the authorizing referendum, and are not subject to the 141.1 requirements of Minnesota Statutes, section 297A.99, subdivision 141.2 3. 141.3 (d) Pursuant to the approval of the city of Sartell voters 141.4 at the election held in November 1999, the surplus returned to 141.5 the city of Sartell under paragraph (b) shall be used to fund 141.6 construction, expansion, and improvements to a community center 141.7 and for park land acquisition and improvement. 141.8 Subd. 3. [SEPARATE REFERENDA REQUIRED.] Notwithstanding 141.9 Minnesota Statutes, section 297A.99, subdivision 3, each city 141.10 listed in subdivision 1, clause (3), must have a separate vote 141.11 on each project that it proposes to fund with the surplus tax 141.12 revenues it receives under subdivision 2, paragraph (b). For 141.13 these cities, the cost of each project to be funded by the taxes 141.14 authorized in subdivision 1 must be listed. The referendum must 141.15 state that approval of using the tax authorized in subdivision 1 141.16 for any project shall also indicate approval to share the 141.17 revenues collected from the tax with the other cities in the 141.18 area which have also passed a sales tax. The sharing shall be 141.19 done in a manner agreed upon by all affected cities under a 141.20 joint powers agreement. 141.21 Subd. 4. [BONDING AUTHORITY.] The cities named in 141.22 subdivision 1 may issue bonds under Minnesota Statutes, chapter 141.23 475, to finance the acquisition, construction, and improvements 141.24 of the projects authorized under subdivision 2. The election to 141.25 approve the bonds, as required under Minnesota Statutes, section 141.26 475.58, may be held in combination with the election to 141.27 authorize imposition of the tax under subdivision 1. Whether to 141.28 permit imposition of the tax and issuance of the bonds may be 141.29 posed to the voters as a single question. The question must 141.30 state that the sales tax revenues would be pledged to pay the 141.31 bonds and that the bonds are guaranteed by the city's property 141.32 taxes. 141.33 (b) The issuance of bonds under this subdivision is not 141.34 subject to Minnesota Statutes, section 275.60. 141.35 (c) The bonds shall not be included in computing any debt 141.36 limitation applicable to the city, and the levy of taxes under 142.1 Minnesota Statutes, section 475.61, to pay the principal of and 142.2 interest on the bonds is not subject to any levy limitation. 142.3 (d) The principal amount of bonds issued by the city of St. 142.4 Cloud for the projects authorized in subdivision 2, paragraph 142.5 (a), plus the tax used directly to pay eligible capital 142.6 expenditures and improvements for those projects may not exceed 142.7 $2,700,000 for the airport improvements and $20,000,000 for the 142.8 library improvements, plus an amount equal to the cost related 142.9 to the issuance of the bonds. The principal amount of bonds 142.10 issued by the city of St. Cloud for the projects listed in 142.11 subdivision 2, paragraph (c), plus the taxes used directly to 142.12 pay eligible capital expenditures and improvements for those 142.13 projects may not exceed $5,300,000 for the road improvements and 142.14 $12,000,000 for the park improvements, plus an amount equal to 142.15 the cost related to the issuance of the bonds. 142.16 (e) The principal amount of bonds issued by the other 142.17 cities named in subdivision 1 for the projects authorized in 142.18 subdivision 2, paragraph (b), plus the tax used directly to pay 142.19 eligible capital expenditures and improvements for those 142.20 projects may not exceed the amount approved by the voters at the 142.21 election required in subdivision 1, plus an amount equal to the 142.22 cost related to the issuance of the bonds. 142.23 (f) The taxes may be pledged to and used for the payment of 142.24 the bonds and any bonds issued to refund them only if the full 142.25 faith and credit of the city backs the bonds and any refunding 142.26 bonds. 142.27 Subd. 5. [TERMINATION OF TAX.] The tax imposed by each 142.28 city under subdivision 1 shall expire at the earlier of: 142.29 (1) ten years after the date that the tax is first imposed 142.30 in any of the cities listed in subdivision 1; or 142.31 (2) the date that the amount of revenues received by the 142.32 city of St. Cloud to pay for the projects under subdivision 2, 142.33 paragraphs (a) and (c), shall meet or exceed the sum of 142.34 $40,000,000 plus an amount equal to the costs related to the 142.35 issuance of bonds under subdivision 4, paragraphs (b) and (c). 142.36 Any funds remaining after completion of the projects and 143.1 retirement or redemption of the bonds may be placed in the 143.2 general funds of the cities imposing the taxes. If the cities 143.3 that pass a referendum required under subdivision 1 determine 143.4 that the revenues raised from the authorized taxes will not be 143.5 sufficient to fund the projects in subdivision 2, other local 143.6 revenues must be committed. 143.7[EFFECTIVE DATE.] This section is effective August 1, 2001, 143.8 with respect to any city listed in subdivision 1, upon 143.9 compliance of the governing body of that city with Minnesota 143.10 Statutes, section 645.021, subdivision 3. 143.11 Sec. 39. [CITY OF HOPKINS; FOOD AND BEVERAGE TAX.] 143.12 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 143.13 Minnesota Statutes, section 477A.016, or any ordinance, city 143.14 charter, or other provision of law, the city of Hopkins may, by 143.15 ordinance, impose a sales tax of up to one percent on the gross 143.16 receipts of all food and beverages, including on-sale 143.17 intoxicating beverages and fermented malt beverages, sold at 143.18 licensed on-sale liquor establishments, restaurants, or other 143.19 places of refreshment located within the geographic boundaries 143.20 of the city. The imposition of this tax is subject to the 143.21 reverse referendum requirement in subdivision 3. 143.22 Subd. 2. [USE OF PROCEEDS FROM FOOD AND BEVERAGE TAX.] The 143.23 proceeds of any tax imposed under subdivision 1 must be used by 143.24 the city to fund public arts purposes. Authorized expenses 143.25 include, but are not limited to, expenses related to public art 143.26 facilities, community or public arts projects, or purchase or 143.27 acquisition of art for public purposes. 143.28 Subd. 3. [REVERSE REFERENDUM.] If the Hopkins city council 143.29 intends to impose the tax authorized under this section, it must 143.30 first pass a resolution stating the intention to impose the 143.31 tax. The city must then publish the resolution together with a 143.32 notice of public hearing on the resolution for two successive 143.33 weeks in its official newspaper or, if none exists, in a 143.34 newspaper of general circulation in the city. The hearing must 143.35 be held two to four weeks after the first publication. After 143.36 the hearing, the city council may decide to take no action or 144.1 may adopt a resolution authorizing the imposition of the tax. A 144.2 resolution authorizing the tax must be published in the city's 144.3 official newspaper or, if none exists, in a newspaper of general 144.4 circulation in the city. The resolution is not effective if a 144.5 petition requesting a referendum on the resolution is filed with 144.6 the city clerk within 30 days of publication of the resolution. 144.7 The petition must be signed by voters equal to at least five 144.8 percent of the votes cast in the city in the last general 144.9 election. The resolution is effective if approved by a majority 144.10 of those voting on the question. The commissioner of revenue 144.11 shall prepare a suggested form of referendum question. The 144.12 referendum must be held at a special or general election. 144.13 Subd. 4. [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 144.14 THE TAX.] Unless the city of Hopkins and the commissioner of 144.15 revenue otherwise agree, the tax must be collected and 144.16 administered in the same manner as general local sales taxes 144.17 under Minnesota Statutes, section 297A.99, subdivision 9. 144.18[EFFECTIVE DATE.] This section is effective upon approval 144.19 by the Hopkins city council and compliance with Minnesota 144.20 Statutes, section 645.021, subdivision 3. 144.21 Sec. 40. [APPROPRIATION.] 144.22 $4,730,000 is appropriated in fiscal year 2002 only from 144.23 the general fund to the commissioner of transportation to be 144.24 used to pay taxes imposed under Minnesota Statutes, chapter 144.25 297A, on purchases by the department of transportation. 144.26 ARTICLE 8 144.27 PROPERTY TAX POLICY 144.28 Section 1. [103B.253] [COUNTY LEVY AUTHORITY.] 144.29 Notwithstanding any other law to the contrary, a county 144.30 levying a tax under section 103B.241, 103B.245, or 103B.251 144.31 shall not include any taxes levied under those authorities in 144.32 the levy certified under section 275.07, subdivision 1, 144.33 paragraph (a). A county levying under section 103B.241, 144.34 103B.245, or 103B.251 shall separately certify that amount and 144.35 the auditor shall extend that levy as a special taxing district 144.36 levy under sections 275.066 and 275.07, subdivision 1, paragraph 145.1 (b). 145.2[EFFECTIVE DATE.] This section is effective for taxes 145.3 levied in 2001, payable in 2002, and thereafter. 145.4 Sec. 2. Minnesota Statutes 2000, section 103D.905, 145.5 subdivision 3, is amended to read: 145.6 Subd. 3. [ADMINISTRATIVEGENERAL FUND.]An administrative145.7 A general fund, consisting of an ad valorem tax levy, may not 145.8 exceed0.024180.048 percent of taxable market value, or 145.9$125,000$250,000, whichever is less. The money in the fund 145.10 shall be used for general administrative expenses and for the 145.11 construction or implementation and maintenance of projects of 145.12 common benefit to the watershed district. The managers may make 145.13 an annual levy for theadministrativegeneral fund as provided 145.14 in section 103D.911. In addition to the annualadministrative145.15 general levy, the managers may annually levy a tax not to exceed 145.16 0.00798 percent of taxable market value for a period not to 145.17 exceed 15 consecutive years to pay the cost attributable to the 145.18 basic water management features of projects initiated by 145.19 petition of amunicipality ofpolitical subdivision within the 145.20 watershed district or by petition of at least 50 resident owners 145.21 whose property is within the watershed district. 145.22[EFFECTIVE DATE.] This section is effective for taxes 145.23 levied in 2001, payable in 2002, and thereafter. 145.24 Sec. 3. Minnesota Statutes 2000, section 116C.779, is 145.25 amended to read: 145.26 116C.779 [FUNDING FOR RENEWABLE DEVELOPMENT.] 145.27 (a) The public utility that operates the Prairie Island 145.28 nuclear generating plant must transfer to a renewable 145.29 development account $500,000 each year for each dry cask 145.30 containing spent fuel that is located at the independent spent 145.31 fuel storage installation at Prairie Island after January 1, 145.32 1999. The fund transfer must be made if waste is stored in a 145.33 cask for any part of a year. Funds in the account may be 145.34 expended only for development of renewable energy sources. 145.35 Preference must be given to development of renewable energy 145.36 source projects located within the state. 146.1 (b) Expenditures from the account may only be made after 146.2 approval by order of the public utilities commission upon a 146.3 petition by the public utility. 146.4 (c) Proposed renewable energy projects, which would sell or 146.5 otherwise assign the electric output of an otherwise qualifying 146.6 hydroelectric project to a party other than the public utility 146.7 that operates the Prairie Island nuclear generating plant, shall 146.8 be eligible for funds under this section, and no such renewable 146.9 energy project shall be rejected for funding on the basis that 146.10 the public utility that operates the Prairie Island nuclear 146.11 generating plant would not be the purchaser of the electric 146.12 output. Any such sale or assignment of output shall not be 146.13 subject to any right of first refusal claimed by the utility 146.14 that operates Prairie Island nuclear generating plant, 146.15 notwithstanding any order of the public utilities commission. 146.16 Sec. 4. Minnesota Statutes 2000, section 123A.45, 146.17 subdivision 2, is amended to read: 146.18 Subd. 2. [PETITION.] The petition must contain: 146.19 (a) A correct description of the area proposed for 146.20 detachment and annexation, including supporting data regarding 146.21 location and title to land to establish that the land is 146.22 adjoining a district. 146.23 (b) The reasons for the proposed change with facts showing 146.24 that the granting of the petition will not reduce the size of 146.25 any district to less than four sections, unless the district is 146.26 not operating a school within the district. 146.27 (c) Consent to the petition, if, at the time of the filing 146.28 of the petition, any part of the area proposed for detachment is 146.29 part of a district which maintains and operates a secondary 146.30 school within the district. Before the hearing, the consent of 146.31 the board of the district in which the area proposed for 146.32 detachment lies must be endorsed on the petition. 146.33 (d) An identification of the district to which annexation 146.34 is sought. 146.35 (e) Other information the petitioners may desire to affix. 146.36 (f) An acknowledgment by the petitioner. 147.1 (g) A description of whether bonded indebtedness will be 147.2 allocated according to subdivision 6, paragraph (b) or (c). 147.3[EFFECTIVE DATE.] This section is effective the day 147.4 following final enactment for detachment and annexations 147.5 requests approved by a county board on or after that date. 147.6 Sec. 5. Minnesota Statutes 2000, section 123A.45, 147.7 subdivision 6, is amended to read: 147.8 Subd. 6. [TAXABLE PROPERTY.] (a) Upon the effective date 147.9 of the order, the detachment and annexation is effected. The 147.10 bonded indebtedness must be assigned to the detached and annexed 147.11 land under either paragraph (b) or (c). 147.12 (b) Unless specified separately under paragraph (c), all 147.13 taxable property in the area so detached and annexed remains 147.14 taxable for payment of any school purpose obligations already 147.15 authorized by or outstanding on the effective date of the order 147.16 against the district from which detached. The order does not 147.17 relieve such property from the obligation of any bonded debt 147.18 already incurred to which it was subject prior to the order. 147.19 All taxable property in the area so detached and annexed is 147.20 taxable for payment of any district obligations authorized on or 147.21 subsequent to the effective date of the order by the district to 147.22 which annexation is made. 147.23 (c) Alternatively, if the school board of the district in 147.24 which the area is proposed for detachment and the school board 147.25 of the district in which the area is proposed for annexation 147.26 agree, all taxable property in the area detached and annexed 147.27 shall be taxable by the school district to which the property is 147.28 annexed. Detached and annexed property is relieved from the 147.29 obligation of any bonded debt already incurred by the district 147.30 in which the area is detached and is obligated for any bonded 147.31 debt already incurred by the district to which the area is 147.32 annexed. 147.33[EFFECTIVE DATE.] This sections is effective the day 147.34 following final enactment for detachment and annexations 147.35 requests approved by a county board on or after that date. 147.36 Sec. 6. Minnesota Statutes 2000, section 126C.13, is 148.1 amended by adding a subdivision to read: 148.2 Subd. 1a. [TAX BASE CERTIFICATIONS.] (a) The tax rate 148.3 under subdivision 1 must be determined excluding the school 148.4 district tax base resulting from sections 46 and 49. 148.5 (b) The commissioner of revenue shall include the 148.6 additional tax base resulting from sections 46 and 49 in 148.7 certifying school district adjusted net tax capacities and 148.8 referendum market values to the commissioner of children, 148.9 families, and learning for determining levy amounts. 148.10[EFFECTIVE DATE.] This section is effective for taxes 148.11 payable in 2002 and thereafter. 148.12 Sec. 7. [144F.01] [EMERGENCY MEDICAL SERVICES SPECIAL 148.13 TAXING DISTRICTS.] 148.14 Subdivision 1. [POLITICAL SUBDIVISION DEFINED.] In this 148.15 section, "political subdivision" means a county, a statutory or 148.16 home rule charter city, or a township organized to provide town 148.17 government. 148.18 Subd. 2. [WHO MAY ESTABLISH.] Two or more political 148.19 subdivisions, or parts of them, may establish by resolution of 148.20 their governing bodies a special taxing district for emergency 148.21 medical services. The participating territory of a 148.22 participating political subdivision need not abut any other 148.23 participating territory to be in the special taxing district. 148.24 Subd. 3. [BOARD.] The special taxing district under this 148.25 section is governed by a board made up initially of 148.26 representatives of each participating political subdivision in 148.27 the proportions set out in the establishing resolution, subject 148.28 to change as provided in the district's charter, if any, or in 148.29 the district's bylaws. Each participant's representative serves 148.30 at the pleasure of that participant's governing body. 148.31 Subd. 4. [PROPERTY TAX LEVY AUTHORITY.] The district's 148.32 board may levy a tax on the taxable real and personal property 148.33 in the district. The ad valorem tax levy may not exceed 0.048 148.34 percent of the taxable market value of the district or $250,000, 148.35 whichever is less. The proceeds of the levy must be used as 148.36 provided in subdivision 5. The board shall certify the levy at 149.1 the times as provided under section 275.07. The board shall 149.2 provide the county with whatever information is necessary to 149.3 identify the property that is located within the district. If 149.4 the boundaries include a part of a parcel, the entire parcel 149.5 shall be included in the district. The county auditors must 149.6 spread, collect, and distribute the proceeds of the tax at the 149.7 same time and in the same manner as provided by law for all 149.8 other property taxes. 149.9 Subd. 5. [USE OF LEVY PROCEEDS.] The proceeds of property 149.10 taxes levied under this section must be used to support the 149.11 providing of out-of-hospital emergency medical services 149.12 including, but not limited to, first responder or rescue squads 149.13 recognized by the district, ambulance services licensed under 149.14 chapter 144E and recognized by the district, medical control 149.15 functions set out in chapter 144E, communications equipment and 149.16 systems, and programs of regional emergency medical services 149.17 authorized by regional boards described in section 144E.52. 149.18 Subd. 6. [ADVISORY COMMITTEE.] A special taxing district 149.19 board under this section must have an advisory committee to 149.20 advise the board on issues involving emergency medical services 149.21 and EMS communications. The committee's membership must be 149.22 comprised of representatives of first responders, ambulance 149.23 services, ambulance medical directors, and EMS communication 149.24 experts. The advisory committee members serve at the pleasure 149.25 of the appointing board. 149.26 Subd. 7. [POWERS.] (a) In addition to authority expressly 149.27 granted in this section, a special taxing district under this 149.28 section may exercise any power that may be exercised by any of 149.29 its participating political subdivisions, except that the board 149.30 may not incur debt. The special taxing district may only use 149.31 the power to do what is necessary or reasonable to support the 149.32 services set out in subdivision 5. 149.33 (b) Notwithstanding paragraph (a), the district may only 149.34 levy the taxes authorized in this section. 149.35 Subd. 8. [ADDITIONS AND WITHDRAWALS.] (a) Additional 149.36 eligible political subdivisions may be added to a special taxing 150.1 district under this section as provided by the board of the 150.2 district and agreed to in a resolution of the governing body of 150.3 the political subdivision proposed to be added. 150.4 (b) A political subdivision may withdraw from a special 150.5 taxing district under this section by resolution of its 150.6 governing body. The political subdivision must notify the board 150.7 of the special taxing district of the withdrawal by providing a 150.8 copy of the resolution at least one year in advance of the 150.9 proposed withdrawal. The taxable property of the withdrawing 150.10 member is subject to the property tax levy under subdivision 4 150.11 for the taxes payable year following the notice of the 150.12 withdrawal, unless the board and the withdrawing member agree 150.13 otherwise by action of their governing bodies. 150.14 (c) Notwithstanding subdivision 2, if the district is 150.15 comprised of only two political subdivisions and one of the 150.16 political subdivisions withdraws, the district can continue to 150.17 exist. 150.18 Subd. 9. [DISSOLUTION.] If the special taxing district is 150.19 dissolved, the assets and liabilities may be assigned to a 150.20 successor entity, if any, or otherwise disposed of for public 150.21 purposes as provided by law. 150.22[EFFECTIVE DATE.] This section is effective for taxes 150.23 levied in 2002, payable in 2003, through taxes levied in 2007, 150.24 payable in 2008. 150.25 Sec. 8. Minnesota Statutes 2000, section 271.01, 150.26 subdivision 5, is amended to read: 150.27 Subd. 5. [JURISDICTION.] The tax court shall have 150.28 statewide jurisdiction. Except for an appeal to the supreme 150.29 court or any other appeal allowed under this subdivision, the 150.30 tax court shall be the sole, exclusive, and final authority for 150.31 the hearing and determination of all questions of law and fact 150.32 arising under the tax laws of the state, as defined in this 150.33 subdivision, in those cases that have been appealed to the tax 150.34 court and in any case that has been transferred by the district 150.35 court to the tax court. The tax court shall have no 150.36 jurisdiction in any case that does not arise under the tax laws 151.1 of the state or in any criminal case or in any case determining 151.2 or granting title to real property or in any case that is under 151.3 the probate jurisdiction of the district court. The small 151.4 claims division of the tax court shall have no jurisdiction in 151.5 any case dealing with property valuation or assessment for 151.6 property tax purposes until the taxpayer has appealed the 151.7 valuation or assessment to the county board of equalization, and 151.8 in those towns and cities which have not transferred their 151.9 duties to the county, the town or city board of equalization, 151.10 except for: (i) those taxpayers whose original assessments are 151.11 determined by the commissioner of revenue;and(ii) those 151.12 taxpayers appealing a denial of a current year application for 151.13 the homestead classification for their property and the denial 151.14 was not reflected on a valuation notice issued in the year; and 151.15 (iii) any case dealing with property valuation, assessment, or 151.16 taxation for property tax purposes and meeting the 151.17 jurisdictional requirements of section 271.21, subdivision 2, 151.18 paragraph (c). The tax court shall have no jurisdiction in any 151.19 case involving an order of the state board of equalization 151.20 unless a taxpayer contests the valuation of property. Laws 151.21 governing taxes, aids, and related matters administered by the 151.22 commissioner of revenue, laws dealing with property valuation, 151.23 assessment or taxation of property for property tax purposes, 151.24 and any other laws that contain provisions authorizing review of 151.25 taxes, aids, and related matters by the tax court shall be 151.26 considered tax laws of this state subject to the jurisdiction of 151.27 the tax court. This subdivision shall not be construed to 151.28 prevent an appeal, as provided by law, to an administrative 151.29 agency, board of equalization, review under section 274.13, 151.30 subdivision 1c, or to the commissioner of revenue. Wherever 151.31 used in this chapter, the term commissioner shall mean the 151.32 commissioner of revenue, unless otherwise specified. 151.33 Sec. 9. Minnesota Statutes 2000, section 271.21, 151.34 subdivision 2, is amended to read: 151.35 Subd. 2. [JURISDICTION.] At the election of the taxpayer, 151.36 the small claims division shall have jurisdiction only in the 152.1 following matters: 152.2 (a) cases involving valuation, assessment, or taxation of 152.3 real or personal property, if the taxpayer has satisfied the 152.4 requirements of section 271.01, subdivision 5, and: (i) the 152.5 issue is a denial of a current year application for the 152.6 homestead classification for the taxpayer's property and the 152.7 denial was not reflected on a valuation notice issued in the 152.8 year; or (ii) in the case of nonhomestead property, the 152.9 assessor's estimated market value is less than $100,000;or152.10 (b) any other case concerning the tax laws as defined in 152.11 section 271.01, subdivision 5, in which the amount in 152.12 controversy does not exceed $5,000, including penalty and 152.13 interest; or 152.14 (c) cases involving valuation, assessment, or taxation of 152.15 real or personal property if: 152.16 (i) the issue is a denial of a current year application for 152.17 the homestead classification for the taxpayer's property; 152.18 (ii) only one parcel is included in the petition, the 152.19 entire parcel is classified as homestead 1a or 1b pursuant to 152.20 section 273.13, and the parcel contains no more than one 152.21 dwelling unit; or 152.22 (iii) the assessor's estimated market value of the property 152.23 included in the petition is less than $300,000. 152.24 Sec. 10. Minnesota Statutes 2000, section 272.02, 152.25 subdivision 7, is amended to read: 152.26 Subd. 7. [INSTITUTIONS OF PUBLIC CHARITY.] 152.27InstitutionsProperty of an institution of purely public charity 152.28are, or property that would be listed for taxation in the name 152.29 of an institution of purely public charity under section 272.01, 152.30 subdivision 2, or 273.19, and that is used for the charitable 152.31 purposes of such institution, is exemptexcept parcels of152.32property containing structures and the. However, land and 152.33 structuresdescribed in sectionthat qualify, or that could 152.34 qualify under sections 273.13, subdivision 25, paragraph 152.35 (e), and 462A.071, other than those that qualify for exemption 152.36 under subdivision 26, are not exempt. 153.1[EFFECTIVE DATE.] This section is effective for taxes 153.2 payable in 2002 and thereafter. 153.3 Sec. 11. Minnesota Statutes 2000, section 272.02, 153.4 subdivision 10, is amended to read: 153.5 Subd. 10. [PERSONAL PROPERTY USED FOR POLLUTION CONTROL.] 153.6 Personal property used primarily for the abatement and control 153.7 of air, water, or land pollution is exempt to the extent that it 153.8 is so used, and real property is exempt if it is used primarily 153.9 for abatement and control of air, water, or land pollution as 153.10 part of an agricultural operation, as a part of a centralized 153.11 treatment and recovery facility operating under a permit issued 153.12 by the Minnesota pollution control agency pursuant to chapters 153.13 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 153.14 and 7045.0020 to 7045.1260, as a wastewater treatment facility 153.15 and for the treatment, recovery, and stabilization of metals, 153.16 oils, chemicals, water, sludges, or inorganic materials from 153.17 hazardous industrial wastes, or as part of an electric 153.18 generation system. For purposes of this subdivision, personal 153.19 property includes ponderous machinery and equipment used in a 153.20 business or production activity that at common law is considered 153.21 real property. 153.22 Any taxpayer requesting exemption of all or a portion of 153.23 any real property or any equipment or device, or part thereof, 153.24 operated primarily for the control or abatement of airor, 153.25 water, or land pollution shall file an application with the 153.26 commissioner of revenue.The equipment or device shall meet153.27standards, rules, or criteria prescribed by the Minnesota153.28pollution control agency, and must be installed or operated in153.29accordance with a permit or order issued by that agency.The 153.30 Minnesota pollution control agency shall upon request of the 153.31 commissioner furnish informationorand advice to the 153.32 commissioner. 153.33 The information and advice furnished by the Minnesota 153.34 pollution control agency must include statements as to whether 153.35 the equipment, device, or real property meets a standard, rule, 153.36 criteria, guideline, policy, or order of the Minnesota pollution 154.1 control agency, and whether the equipment, device, or real 154.2 property is installed or operated in accordance with it. On 154.3 determining that property qualifies for exemption, the 154.4 commissioner shall issue an order exempting the property from 154.5 taxation. The equipmentor, device, or real property shall 154.6 continue to be exempt from taxation as long as thepermitorder 154.7 issued by theMinnesota pollution control agencycommissioner 154.8 remains in effect. 154.9[EFFECTIVE DATE.] This section is effective for exemption 154.10 applications received on or after July 1, 2001. 154.11 Sec. 12. Minnesota Statutes 2000, section 272.02, is 154.12 amended by adding a subdivision to read: 154.13 Subd. 45. [RESIDENTIAL BUILDINGS ON TEMPORARY SITES.] A 154.14 newly constructed building that is situated on real property is 154.15 exempt if it is: 154.16 (1) intended for future residential occupancy; 154.17 (2) on a temporary foundation and intended to be moved; 154.18 (3) not used as a model or for any other business purposes; 154.19 (4) not connected to any utilities; and 154.20 (5) located on land that will not be sold with the building. 154.21 The exemption under this subdivision is allowable for only 154.22 one assessment year after the date of the initial construction 154.23 of the building. 154.24[EFFECTIVE DATE.] This section is effective beginning with 154.25 the 2001 assessment and thereafter. 154.26 Sec. 13. Minnesota Statutes 2000, section 272.02, is 154.27 amended by adding a subdivision to read: 154.28 Subd. 46. [PUBLICLY OWNED PARKING FACILITIES.] Parking 154.29 lots, ramps, structures, garages, and other facilities for 154.30 vehicle parking owned by a municipality or authority established 154.31 under chapter 469 or any affiliate nonprofit corporate entity 154.32 organized by a municipality or authority are exempt, including 154.33 those parking lots, ramps, structures, garages, and other 154.34 facilities that are in whole or in part operated by, used by, 154.35 leased, or subleased to an individual or nonprofit or for-profit 154.36 entity, notwithstanding section 272.01, subdivision 2, or 273.19. 155.1[EFFECTIVE DATE.] This section is effective the day after 155.2 final enactment. 155.3 Sec. 14. Minnesota Statutes 2000, section 272.02, is 155.4 amended by adding a subdivision to read: 155.5 Subd. 47. [POULTRY LITTER BIOMASS GENERATION FACILITY 155.6 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 155.7 attached machinery and other personal property which is part of 155.8 an electrical generating facility that meets the requirements of 155.9 this subdivision is exempt. At the time of construction, the 155.10 facility must: 155.11 (1) be designed to utilize poultry litter as a primary fuel 155.12 source; 155.13 (2) be constructed for the purpose of generating power at 155.14 the facility that will be sold pursuant to a contract approved 155.15 by the public utilities commission in accordance with the 155.16 biomass mandate imposed under section 216B.2424; and 155.17 (3) comply with the requirements of section 177.43. 155.18 Construction of the facility must be commenced after 155.19 January 1, 2000, and before December 31, 2002. Property 155.20 eligible for this exemption does not include electric 155.21 transmission lines and interconnections or gas pipelines and 155.22 interconnections appurtenant to the property or the facility. 155.23[EFFECTIVE DATE.] This section is effective for taxes 155.24 levied in 2001, payable in 2002, and thereafter. 155.25 Sec. 15. Minnesota Statutes 2000, section 272.02, is 155.26 amended by adding a subdivision to read: 155.27 Subd. 48. [BIOMASS ELECTRICAL GENERATION FACILITY; 155.28 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 155.29 attached machinery and other personal property which is part of 155.30 an electrical generating facility that meets the requirements of 155.31 this subdivision is exempt. At the time of construction, the 155.32 facility must: 155.33 (1) be designed to utilize biomass as established in 155.34 section 216B.2424 as a primary fuel source; 155.35 (2) be constructed for the purpose of generating power at 155.36 the facility that will be sold pursuant to a contract approved 156.1 by the public utilities commission in accordance with the 156.2 biomass mandate imposed under section 216B.2424; and 156.3 (3) comply with the requirements of section 177.43. 156.4 Construction of the facility must be commenced after 156.5 January 1, 2000, and before December 31, 2002. Property 156.6 eligible for this exemption does not include electric 156.7 transmission lines and interconnections or gas pipelines and 156.8 interconnections appurtenant to the property or facility. 156.9[EFFECTIVE DATE.] This section is effective for taxes 156.10 levied in 2001, payable in 2002, and thereafter. 156.11 Sec. 16. Minnesota Statutes 2000, section 272.02, is 156.12 amended by adding a subdivision to read: 156.13 Subd. 49. [WASTE TIRE COGENERATION FACILITY; PERSONAL 156.14 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 156.15 machinery and other personal property which is part of an 156.16 electric generating facility that meets the requirements of this 156.17 subdivision is exempt. At the time of construction, the 156.18 facility must: 156.19 (1) be designed to utilize waste tires as a primary fuel 156.20 source; 156.21 (2) be a cogeneration electric generating facility of one 156.22 to 25 megawatts of installed capacity; and 156.23 (3) comply with the requirements of section 177.43. 156.24 Construction of the facility must be commenced after 156.25 January 1, 2000, and before January 1, 2004. Property eligible 156.26 for this exemption does not include electric transmission lines 156.27 and interconnections or gas pipelines and interconnections 156.28 appurtenant to the property or the facility. 156.29[EFFECTIVE DATE.] This section is effective for taxes 156.30 levied in 2001, payable in 2002, and thereafter. 156.31 Sec. 17. Minnesota Statutes 2000, section 272.02, is 156.32 amended by adding a subdivision to read: 156.33 Subd. 50. [EXEMPTION FOR PERSONAL PROPERTY USED TO 156.34 GENERATE ELECTRICITY.] For a generation facility using natural 156.35 gas or similar clean fuel or a natural gas peaking facility that 156.36 is constructed and placed into service after January 1, 2001, 157.1 and the construction of which complies with the requirements of 157.2 section 177.43, personal property used to generate electricity 157.3 or to store natural gas or similar fuel is exempt from property 157.4 taxation. This exemption does not apply to transformers, 157.5 transmission lines, distribution lines, or any other tools, 157.6 implements, and machinery that is part of an electric 157.7 substation, wherever located. 157.8 Sec. 18. Minnesota Statutes 2000, section 272.02, is 157.9 amended by adding a subdivision to read: 157.10 Subd. 51. [PROPERTY USED FOR AGRICULTURAL EDUCATION.] 157.11 Property owned and operated by a private, nonprofit charitable 157.12 corporation that qualifies for tax exemption under section 157.13 501(c)(3) of the Internal Revenue Code, is exempt from property 157.14 tax, if the property is primarily used for educational 157.15 interpretation of the past, present, and future of agriculture 157.16 in Minnesota, including, but not limited to, visitor and 157.17 conference centers, storage and demonstration structures, and 157.18 buildings for machinery, artifacts, crops, and livestock. 157.19[EFFECTIVE DATE.] This section is effective for the 2001 157.20 assessment, taxes payable in 2002, and thereafter. 157.21 Sec. 19. Minnesota Statutes 2000, section 273.061, 157.22 subdivision 1, is amended to read: 157.23 Subdivision 1. [OFFICE CREATED; APPOINTMENT, 157.24 QUALIFICATIONS.] Every county in this state shall have a county 157.25 assessor. The county assessor shall be appointed by the board 157.26 of county commissioners. The assessor shall be selected and 157.27 appointed because of knowledge and training in the field of 157.28 property taxation and appointment shall be approved by the 157.29 commissioner of revenue before the same shall become effective. 157.30 Upon receipt by the county commissioners of the commissioner of 157.31 revenue's refusal to approve an appointment, the term of the 157.32 appointee shall terminate at the end of that day. 157.33 The commissioner of revenue may grant approval on a 157.34 probationary basis for a period of two years. The commissioner 157.35 must base the decision to impose a probationary period on 157.36 objective and consistent criteria. At the end of the two-year 158.1 probationary period, the commissioner may either refuse to 158.2 approve the person's appointment for the remainder of the 158.3 person's four-year term, approve the person's appointment but 158.4 only for another two-year probationary period, or 158.5 unconditionally approve the person's appointment for the 158.6 remainder of the four-year term for which the person was 158.7 originally appointed by the county board. The criteria shall 158.8 not be considered rules and are not subject to the 158.9 Administrative Procedure Act. 158.10 Notwithstanding any law to the contrary, a county assessor 158.11 must have senior accreditation from the state board of assessors 158.12 by January 1, 1992, or within two years of the assessor's first 158.13 appointment under this section, whichever is later. 158.14[EFFECTIVE DATE.] This section is effective the day 158.15 following final enactment. 158.16 Sec. 20. Minnesota Statutes 2000, section 273.061, 158.17 subdivision 2, is amended to read: 158.18 Subd. 2. [TERM; VACANCY.] (a) The terms of county 158.19 assessors appointed under this section shall be four years. A 158.20 new term shall begin on January 1 of every fourth year after 158.21 1973. When any vacancy in the office occurs, the board of 158.22 county commissioners, within3090 days thereafter, shall fill 158.23 the same by appointment for the remainder of the term, following 158.24 the procedure prescribed in subdivision 1. The term of the 158.25 county assessor may be terminated by the board of county 158.26 commissioners at any time, on charges ofinefficiency or neglect158.27of dutymalfeasance, misfeasance, or nonfeasance by the 158.28 commissioner of revenue. If the board of county commissioners 158.29 does not intend to reappoint a county assessor who has been 158.30 certified by the state board of assessors, the board shall 158.31 present written notice to the county assessor not later than 90 158.32 days prior to the termination of the assessor's term, that it 158.33 does not intend to reappoint the assessor. If written notice is 158.34 not timely made, the county assessor will automatically be 158.35 reappointed by the board of county commissioners. 158.36 The commissioner of revenue may recommend to the state 159.1 board of assessors the nonrenewal, suspension, or revocation of 159.2 an assessor's license as provided in sections 270.41 to 270.53. 159.3 (b) In the event of a vacancy in the office of county 159.4 assessor, through death, resignation or other reasons, the 159.5 deputy (or chief deputy, if more than one) shall perform the 159.6 functions of the office. If there is no deputy, the county 159.7 auditor shall designate a person to perform the duties of the 159.8 office until an appointment is made as provided in clause (a). 159.9 Such person shall perform the duties of the office for a period 159.10 not exceeding3090 days during which the county board must 159.11 appoint a county assessor. Such30-day90-day period may, 159.12 however, be extended by written approval of the commissioner of 159.13 revenue. 159.14 (c) In the case of the first appointment under paragraph 159.15 (a) of a county assessor who is accredited but who does not have 159.16 senior accreditation, an approval of the appointment by the 159.17 commissioner shall be provisional, provided that a county 159.18 assessor appointed to a provisional term under this paragraph 159.19 must reapply to the commissioner at the end of the provisional 159.20 term. A provisional term may not exceed two years. The 159.21 commissioner shall not approve the appointment for the remainder 159.22 of the four-year term unless the assessor has obtained senior 159.23 accreditation. 159.24[EFFECTIVE DATE.] This section is effective the day 159.25 following final enactment. 159.26 Sec. 21. Minnesota Statutes 2000, section 273.061, 159.27 subdivision 8, is amended to read: 159.28 Subd. 8. [POWERS AND DUTIES.] The county assessor shall 159.29 have the following powers and duties: 159.30 (1) To call upon and confer with the township and city 159.31 assessors in the county, and advise and give them the necessary 159.32 instructions and directions as to their duties under the laws of 159.33 this state, to the end that a uniform assessment of all real 159.34 property in the county will be attained. 159.35 (2) To assist and instruct the local assessors in the 159.36 preparation and proper use of land maps and record cards, in the 160.1 property classification of real and personal property, and in 160.2 the determination of proper standards of value. 160.3 (3) To keep the local assessors in the county advised of 160.4 all changes in assessment laws and all instructions which the 160.5 assessor receives from the commissioner of revenue relating to 160.6 their duties. 160.7 (4) Tohave authority torequire the attendance of groups 160.8 of local assessors at sectional meetings called by the assessor 160.9 for the purpose of giving them further assistance and 160.10 instruction as to their duties. 160.11 (5) To require the attendance of all licensed assessors 160.12 working in that county at annual instructional meetings 160.13 presented in part by the department of revenue regional 160.14 representative to provide assistance and instruction as to their 160.15 duties under the law and the proper implementation of assessment 160.16 procedures. 160.17 (6) To immediately commence the preparation of a large 160.18 scale topographical land map of the county, in such form as may 160.19 be prescribed by the commissioner of revenue, showing thereon 160.20 the location of all railroads, highways and roads, bridges, 160.21 rivers and lakes, swamp areas, wooded tracts, stony ridges and 160.22 other features which might affect the value of the land. 160.23 Appropriate symbols shall be used to indicate the best, the 160.24 fair, and the poor land of the county. For use in connection 160.25 with the topographical land map, the assessor shall prepare and 160.26 keep available in the assessor's office tables showing fair 160.27 average minimum and maximum market values per acre of 160.28 cultivated, meadow, pasture, cutover, timber and waste lands of 160.29 each township. The assessor shall keep the map and tables 160.30 available in the office for the guidance of town assessors, 160.31 boards of review, and the county board of equalization. 160.32(6)(7) To also prepare and keep available in the office 160.33 for the guidance of town assessors, boards of review and the 160.34 county board of equalization, a land valuation map of the 160.35 county, in such form as may be prescribed by the commissioner of 160.36 revenue. This map, which shall include the bordering tier of 161.1 townships of each county adjoining, shall show the average 161.2 market value per acre, both with and without improvements, as 161.3 finally equalized in the last assessment of real estate, of all 161.4 land in each town or unorganized township which lies outside the 161.5 corporate limits of cities. 161.6(7)(8) To regularly examine all conveyances of land 161.7 outside the corporate limits of cities of the first and second 161.8 class, filed with the county recorder of the county, and keep a 161.9 file, by descriptions, of the considerations shown thereon. 161.10 From the information obtained by comparing the considerations 161.11 shown with the market values assessed, the assessor shall make 161.12 recommendations to the county board of equalization of necessary 161.13 changes in individual assessments or aggregate valuations. 161.14(8)(9) To become familiar with the values of the different 161.15 items of personal property so as to be in a position when called 161.16 upon to advise the boards of review and the county board of 161.17 equalization concerning property, market values thereof. 161.18(9)(10) While the county board of equalization is in 161.19 session, to give it every possible assistance to enable it to 161.20 perform its duties. The assessor shall furnish the board with 161.21 all necessary charts, tables, comparisons, and data which it 161.22 requires in its deliberations, and shall make whatever 161.23 investigations the board may desire. 161.24(10)(11) At the request of either the board of county 161.25 commissioners or the commissioner of revenue, to investigate 161.26 applications for reductions of valuation and abatements and 161.27 settlements of taxes, examine the real or personal property 161.28 involved, and submit written reports and recommendations with 161.29 respect to the applications, in such form as may be prescribed 161.30 by the board of county commissioners and commissioner of revenue. 161.31(11)(12) To make diligent search each year for real and 161.32 personal property which has been omitted from assessment in the 161.33 county, and report all such omissions to the county auditor. 161.34(12)(13) To regularly confer with county assessors in all 161.35 adjacent counties about the assessment of property in order to 161.36 uniformly assess and equalize the value of similar properties 162.1 and classes of property located in adjacent counties. The 162.2 conference shall emphasize the assessment of agricultural and 162.3 commercial and industrial property or other properties that may 162.4 have an inadequate number of sales in a single county. 162.5(13)(14) To render such other services pertaining to the 162.6 assessment of real and personal property in the county as are 162.7 not inconsistent with the duties set forth in this section, and 162.8 as may be required by the board of county commissioners or by 162.9 the commissioner of revenue. 162.10(14)(15) To maintain a record, in conjunction with other 162.11 county offices, of all transfers of property to assist in 162.12 determining the proper classification of property, including but 162.13 not limited to, transferring homestead property and name changes 162.14 on homestead property. 162.15(15)(16) To determine if a homestead application is 162.16 required due to the transfer of homestead property or an owner's 162.17 name change on homestead property. 162.18[EFFECTIVE DATE.] This section is effective July 1, 2001, 162.19 and thereafter. 162.20 Sec. 22. [273.0755] [TRAINING AND EDUCATION OF PROPERTY 162.21 TAX PERSONNEL.] 162.22 (a) Beginning with the four-year period starting on July 1, 162.23 2000, every person licensed by the state board of assessors at 162.24 the Accredited Minnesota Assessor level or higher, shall 162.25 successfully complete at least once in every four-year period a 162.26 week-long Minnesota laws course sponsored by the department of 162.27 revenue. An assessor need not attend the course if they 162.28 successfully pass the test for the course. 162.29 (b) The commissioner of revenue may require that each 162.30 county, and each city for which the city assessor performs the 162.31 duties of county assessor, have (i) a person on the assessor's 162.32 staff who is certified by the department of revenue in sales 162.33 ratio calculations, (ii) an officer or employee who is certified 162.34 by the department of revenue in tax calculations, and (iii) an 162.35 officer or employee who is certified by the department of 162.36 revenue in the proper preparation of abstracts of assessment. 163.1 The commissioner of revenue may require that each county have an 163.2 officer or employee who is certified by the department of 163.3 revenue in the proper preparation of abstracts of tax lists. 163.4[EFFECTIVE DATE.] This section is effective July 1, 2001, 163.5 and thereafter. 163.6 Sec. 23. Minnesota Statutes 2000, section 273.11, 163.7 subdivision 14, is amended to read: 163.8 Subd. 14. [VACANT LANDMETROPOLITAN AREA PLATTEDON OR163.9AFTER AUGUST 1, 1991VACANT LAND.] (a) All landplatted on or163.10after August 1, 1991, andlocated in the metropolitan area that 163.11 is not improved with a permanent structure, shall be assessed as 163.12 provided in this subdivision when platted. For purposes of this 163.13 subdivision, and subdivision 14a, the "metropolitan area" 163.14 includes the counties of Anoka, Carver, Chisago, Dakota, 163.15 Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and 163.16 Wright. The assessor shall determine the market value of each 163.17 individual lot based upon the highest and best use of the 163.18 property as unplatted land. In establishing the market value of 163.19 the property, the assessor shall consider the sale price of the 163.20 unplatted land or comparable sales of unplatted land of similar 163.21 use and similar availability of public utilities. 163.22 (b) The market value determined in paragraph (a) shall be 163.23 increased as follows for each of the three assessment years 163.24 immediately following the final approval of the plat: one-third 163.25 of the difference between the property's unplatted market value 163.26 as determined under paragraph (a) and the market value based 163.27 upon the highest and best use of the land as platted property 163.28 shall be added in each of the three subsequent assessment years. 163.29 (c) Any increase in market value after the first assessment 163.30 year following the plat's final approval shall be added to the 163.31 property's market value in the next assessment year. 163.32 Notwithstanding paragraph (b), if construction begins before the 163.33 expiration of the three years in paragraph (b), that lot shall 163.34 be eligible for revaluation in the next assessment year. The 163.35 market value of a platted lot determined under this subdivision 163.36 shall not exceed the value of that lot based upon the highest 164.1 and best use of the property as platted land. 164.2[EFFECTIVE DATE.] This section is effective for land 164.3 platted after July 31, 2001. 164.4 Sec. 24. Minnesota Statutes 2000, section 273.11, is 164.5 amended by adding a subdivision to read: 164.6 Subd. 14a. [VACANT NONMETROPOLITAN AREA PLATTED LAND.] (a) 164.7 All land that is located outside the metropolitan area defined 164.8 in subdivision 14, and not improved with a permanent structure, 164.9 shall be assessed as provided in this subdivision when platted. 164.10 The assessor shall determine the market value of each individual 164.11 lot based upon the highest and best use of the property as 164.12 unplatted land. In establishing the market value of the 164.13 property, the assessor shall consider the sale price of the 164.14 unplatted land or comparable sales of unplatted land of similar 164.15 use and similar availability of public utilities. 164.16 (b) The market value determined in paragraph (a) shall be 164.17 increased as follows for each of the ten assessment years 164.18 immediately following the final approval of the plat: one-tenth 164.19 of the difference between the property's unplatted market value 164.20 as determined under paragraph (a) and the market value based 164.21 upon the highest and best use of the land as platted property 164.22 shall be added in each of the ten subsequent assessment years. 164.23 (c) Any increase in market value after the first assessment 164.24 year following the plat's final approval shall be added to the 164.25 property's market value in the next assessment year. 164.26 Notwithstanding paragraph (b), if construction begins before the 164.27 expiration of the ten years in paragraph (b), that lot shall be 164.28 eligible for revaluation in the next assessment year. The 164.29 market value of a platted lot determined under this subdivision 164.30 shall not exceed the value of that lot based upon the highest 164.31 and best use of the property as platted land. 164.32[EFFECTIVE DATE.] This section is effective for land 164.33 platted after July 31, 2001. 164.34 Sec. 25. [273.1115] [HOMESTEAD RESORTS; VALUATION AND 164.35 DEFERMENT.] 164.36 Subdivision 1. [REQUIREMENTS.] Real property qualifying 165.1 for classification as class 1c under section 273.13, subdivision 165.2 22, paragraph (c), is entitled to valuation and tax deferment 165.3 under this section, provided that if part of a resort is not 165.4 classified as class 1c, only that portion of the value of the 165.5 property that is classified as class 1c property qualifies under 165.6 this section. 165.7 Subd. 2. [DETERMINATION OF VALUE.] Upon timely application 165.8 by the owner, as provided in subdivision 4, the value of real 165.9 property described in subdivision 1 must be determined by the 165.10 assessor solely with reference to its classification value as 165.11 class 1c property, notwithstanding sections 272.03, subdivision 165.12 8, and 273.11. The assessor shall not consider any added values 165.13 resulting from other factors. 165.14 Subd. 3. [SEPARATE DETERMINATION OF MARKET VALUE AND TAX.] 165.15 The assessor shall, however, make a separate determination of 165.16 the market value of the real estate. The assessor shall record 165.17 on the property assessment records the tax based upon the 165.18 appropriate local tax rate applicable to the property in the 165.19 taxing district. 165.20 Subd. 4. [APPLICATION.] Application for deferment of taxes 165.21 and assessment under this section must be filed by May 1 of the 165.22 year prior to the year in which the taxes are payable. The 165.23 application must be filed with the assessor of the taxing 165.24 district in which the real property is located on a form 165.25 prescribed by the commissioner of revenue. The assessor may 165.26 require proof by affidavit or otherwise that the property 165.27 qualifies under subdivision 1. An application approved by the 165.28 assessor continues in effect for subsequent years until the 165.29 property no longer qualifies under subdivision 1. 165.30 Subd. 5. [ADDITIONAL TAXES.] When real property valued and 165.31 assessed under this section no longer qualifies under 165.32 subdivision 1, the portion no longer qualifying is subject to 165.33 additional taxes, in the amount equal to the difference between 165.34 the taxes determined in accordance with subdivision 2, and the 165.35 amount determined under subdivision 3, provided, however, that 165.36 the amount determined under subdivision 3 must not be greater 166.1 than it would have been had the actual bona fide sale price of 166.2 the real property at an arms length transaction been used in 166.3 lieu of the market value determined under subdivision 3. The 166.4 additional taxes must be extended against the property on the 166.5 tax list for the current year, except that no interest or 166.6 penalties may be levied on the additional taxes if timely paid, 166.7 and except that the additional taxes must only be levied with 166.8 respect to the last three years that the property has been 166.9 valued and assessed under this section. 166.10 Subd. 6. [LIEN.] The tax imposed by this section is a lien 166.11 on the property assessed to the same extent and for the same 166.12 duration as other taxes imposed on property within this state. 166.13 The tax must be annually extended by the county auditor and when 166.14 payable must be collected and distributed in the manner provided 166.15 by law for the collection and distribution of other property 166.16 taxes. 166.17 Subd. 7. [SPECIAL LOCAL ASSESSMENTS.] The payment of 166.18 special local assessments levied after June 30, 2001, for 166.19 improvements made to any real property described in subdivision 166.20 2, together with the interest thereon must, on timely 166.21 application under subdivision 4, be deferred as long as the 166.22 property qualifies under subdivision 1. If special assessments 166.23 against the property have been deferred under this subdivision, 166.24 the governmental unit shall file with the county recorder in the 166.25 county in which the property is located a certificate containing 166.26 the legal description of the affected property and of the amount 166.27 deferred. When the property no longer qualifies under 166.28 subdivision 1, all deferred special assessments plus interest 166.29 are payable in equal installments spread over the time remaining 166.30 until the last maturity date of the bonds issued to finance the 166.31 improvement for which the assessments were levied. If the bonds 166.32 have matured, the deferred special assessments plus interest are 166.33 payable within 90 days. The provisions of section 429.061, 166.34 subdivision 2, apply to the collection of these installments. 166.35 Penalty must not be levied on the special assessments if timely 166.36 paid. 167.1 Subd. 8. [CONTINUATION OF TAX TREATMENT UPON SALE.] When 167.2 real property qualifying under subdivision 1 is sold, no 167.3 additional taxes or deferred special assessments plus interest 167.4 may be extended against the property if: 167.5 (1) the property continues to qualify pursuant to 167.6 subdivision 1; and 167.7 (2) the new owner files an application for continued 167.8 deferment within 30 days after the sale. 167.9 Subd. 9. [APPLICABILITY OF SPECIAL ASSESSMENT PROVISIONS.] 167.10 This section applies to special local assessments levied after 167.11 June 30, 2001, and payable in the years thereafter, but shall 167.12 not apply to any special assessments levied at any time by a 167.13 county or district court under the provisions of chapter 116A. 167.14[EFFECTIVE DATE.] This section is effective for taxes 167.15 levied in 2001, payable in 2002, and thereafter. For 167.16 applications for taxes payable in 2002 only, the application 167.17 deadline in subdivision 4 is extended to August 1, 2001. 167.18 Sec. 26. Minnesota Statutes 2000, section 273.121, is 167.19 amended to read: 167.20 273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 167.21 Any county assessor or city assessor having the powers of a 167.22 county assessor, valuing or classifying taxable real property 167.23 shall in each year notify those persons whose property is to be 167.24assessed or reclassifiedincluded on the assessment roll that 167.25 year if the person's address is known to the assessor, otherwise 167.26 the occupant of the property. The notice shall be in writing 167.27 and shall be sent by ordinary mail at least ten days before the 167.28 meeting of the local board of review or equalization under 167.29 section 274.01 or the review process established under section 167.30 274.13, subdivision 1c. It shall contain: (1) the market value 167.31 for the current and the prior assessment, (2) the limited market 167.32 value under section 273.11, subdivision 1a for the current and 167.33 the prior assessment, (3) the qualifying amount of any 167.34 improvements under section 273.11, subdivision 16 for the 167.35 current assessment, (4) the market value subject to taxation 167.36 after subtracting the amount of any qualifying improvements for 168.1 the current assessment, (5) thenewclassification of the 168.2 property for the current and prior assessment, (6) a note that 168.3 if the property is homestead and at least 35 years old, 168.4 improvements made to the property may be eligible for a 168.5 valuation exclusion under section 273.11, subdivision 16, (7) 168.6 the assessor's office address, and (8) the dates, places, and 168.7 times set for the meetings of the local board of review or 168.8 equalization, the review process established under section 168.9 274.13, subdivision 1c, and the county board of appeal and 168.10 equalization.If the assessment roll is not complete, the168.11notice shall be sent by ordinary mail at least ten days prior to168.12the date on which the board of review has adjournedThe 168.13 commissioner of revenue shall specify the form of the notice. 168.14 The assessor shall attach to the assessment roll a statement 168.15 that the notices required by this section have been mailed. Any 168.16 assessor who is not provided sufficient funds from the 168.17 assessor's governing body to provide such notices, may make 168.18 application to the commissioner of revenue to finance such 168.19 notices. The commissioner of revenue shall conduct an 168.20 investigation and, if satisfied that the assessor does not have 168.21 the necessary funds, issue a certification to the commissioner 168.22 of finance of the amount necessary to provide such notices. The 168.23 commissioner of finance shall issue a warrant for such amount 168.24 and shall deduct such amount from any state payment to such 168.25 county or municipality. The necessary funds to make such 168.26 payments are hereby appropriated. Failure to receive the notice 168.27 shall in no way affect the validity of the assessment, the 168.28 resulting tax, the procedures of any board of review or 168.29 equalization, or the enforcement of delinquent taxes by 168.30 statutory means. 168.31[EFFECTIVE DATE.] This section is effective for notices 168.32 required to be mailed in 2002 and thereafter. 168.33 Sec. 27. Minnesota Statutes 2000, section 273.124, 168.34 subdivision 1, is amended to read: 168.35 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 168.36 that is occupied and used for the purposes of a homestead by its 169.1 owner, who must be a Minnesota resident, is a residential 169.2 homestead. 169.3 Agricultural land, as defined in section 273.13, 169.4 subdivision 23, that is occupied and used as a homestead by its 169.5 owner, who must be a Minnesota resident, is an agricultural 169.6 homestead. 169.7 Dates for establishment of a homestead and homestead 169.8 treatment provided to particular types of property are as 169.9 provided in this section. 169.10 Property held by a trustee under a trust is eligible for 169.11 homestead classification if the requirements under this chapter 169.12 are satisfied. 169.13 The assessor shall require proof, as provided in 169.14 subdivision 13, of the facts upon which classification as a 169.15 homestead may be determined. Notwithstanding any other law, the 169.16 assessor may at any time require a homestead application to be 169.17 filed in order to verify that any property classified as a 169.18 homestead continues to be eligible for homestead status. 169.19 Notwithstanding any other law to the contrary, the department of 169.20 revenue may, upon request from an assessor, verify whether an 169.21 individual who is requesting or receiving homestead 169.22 classification has filed a Minnesota income tax return as a 169.23 resident for the most recent taxable year for which the 169.24 information is available. 169.25 When there is a name change or a transfer of homestead 169.26 property, the assessor may reclassify the property in the next 169.27 assessment unless a homestead application is filed to verify 169.28 that the property continues to qualify for homestead 169.29 classification. 169.30 (b) For purposes of this section, homestead property shall 169.31 include property which is used for purposes of the homestead but 169.32 is separated from the homestead by a road, street, lot, 169.33 waterway, or other similar intervening property. The term "used 169.34 for purposes of the homestead" shall include but not be limited 169.35 to uses for gardens, garages, or other outbuildings commonly 169.36 associated with a homestead, but shall not include vacant land 170.1 held primarily for future development. In order to receive 170.2 homestead treatment for the noncontiguous property, the owner 170.3 must use the property for the purposes of the homestead, and 170.4 must apply to the assessor, both by the deadlines given in 170.5 subdivision 9. After initial qualification for the homestead 170.6 treatment, additional applications for subsequent years are not 170.7 required. 170.8 (c) Residential real estate that is occupied and used for 170.9 purposes of a homestead by a relative of the owner is a 170.10 homestead but only to the extent of the homestead treatment that 170.11 would be provided if the related owner occupied the property. 170.12 For purposes of this paragraph and paragraph (g), "relative" 170.13 means a parent, stepparent, child, stepchild, grandparent, 170.14 grandchild, brother, sister, uncle, aunt, nephew, or niece. 170.15 This relationship may be by blood or marriage. Property that 170.16 has been classified as seasonal recreational residential 170.17 property at any time during which it has been owned by the 170.18 current owner or spouse of the current owner will not be 170.19 reclassified as a homestead unless it is occupied as a homestead 170.20 by the owner; this prohibition also applies to property that, in 170.21 the absence of this paragraph, would have been classified as 170.22 seasonal recreational residential property at the time when the 170.23 residence was constructed. Neither the related occupant nor the 170.24 owner of the property may claim a property tax refund under 170.25 chapter 290A for a homestead occupied by a relative. In the 170.26 case of a residence located on agricultural land, only the 170.27 house, garage, and immediately surrounding one acre of land 170.28 shall be classified as a homestead under this paragraph, except 170.29 as provided in paragraph (d). 170.30 (d) Agricultural property that is occupied and used for 170.31 purposes of a homestead by a relative of the owner, is a 170.32 homestead, only to the extent of the homestead treatment that 170.33 would be provided if the related owner occupied the property, 170.34 and only if all of the following criteria are met: 170.35 (1) the relative who is occupying the agricultural property 170.36 is a son, daughter, grandson, granddaughter, father, or mother 171.1 of the owner of the agricultural property or a son, daughter, 171.2 grandson, or granddaughter of the spouse of the owner of the 171.3 agricultural property; 171.4 (2) the owner of the agricultural property must be a 171.5 Minnesota resident; 171.6 (3) the owner of the agricultural property must not receive 171.7 homestead treatment on any other agricultural property in 171.8 Minnesota; and 171.9 (4) the owner of the agricultural property is limited to 171.10 only one agricultural homestead per family under this paragraph. 171.11 Neither the related occupant nor the owner of the property 171.12 may claim a property tax refund under chapter 290A for a 171.13 homestead occupied by a relative qualifying under this 171.14 paragraph. For purposes of this paragraph, "agricultural 171.15 property" means the house, garage, other farm buildings and 171.16 structures, and agricultural land. 171.17 Application must be made to the assessor by the owner of 171.18 the agricultural property to receive homestead benefits under 171.19 this paragraph. The assessor may require the necessary proof 171.20 that the requirements under this paragraph have been met. 171.21 (e) In the case of property owned by a property owner who 171.22 is married, the assessor must not deny homestead treatment in 171.23 whole or in part if only one of the spouses occupies the 171.24 property and the other spouse is absent due to: (1) marriage 171.25 dissolution proceedings, (2) legal separation, (3) employment or 171.26 self-employment in another location, or (4) other personal 171.27 circumstances causing the spouses to live separately, not 171.28 including an intent to obtain two homestead classifications for 171.29 property tax purposes. To qualify under clause (3), the 171.30 spouse's place of employment or self-employment must be at least 171.31 50 miles distant from the other spouse's place of employment, 171.32 and the homesteads must be at least 50 miles distant from each 171.33 other. Homestead treatment, in whole or in part, shall not be 171.34 denied to the owner's spouse who previously occupied the 171.35 residence with the owner if the absence of the owner is due to 171.36 one of the exceptions provided in this paragraph. 172.1 (f) The assessor must not deny homestead treatment in whole 172.2 or in part if: 172.3 (1) in the case of a property owner who is not married, the 172.4 owner is absent due to residence in a nursing homeor, boarding 172.5 care facility, or an elderly assisted living facility property 172.6 as defined in section 273.13, subdivision 25a, and the property 172.7 is not otherwise occupied; or 172.8 (2) in the case of a property owner who is married, the 172.9 owner or the owner's spouse or both are absent due to residence 172.10 in a nursing homeor, boarding care facility, or an elderly 172.11 assisted living facility property as defined in section 273.13, 172.12 subdivision 25a, and the property is not occupied or is occupied 172.13 only by the owner's spouse. 172.14 (g) If an individual is purchasing property with the intent 172.15 of claiming it as a homestead and is required by the terms of 172.16 the financing agreement to have a relative shown on the deed as 172.17 a coowner, the assessor shall allow a full homestead 172.18 classification. This provision only applies to first-time 172.19 purchasers, whether married or single, or to a person who had 172.20 previously been married and is purchasing as a single individual 172.21 for the first time. The application for homestead benefits must 172.22 be on a form prescribed by the commissioner and must contain the 172.23 data necessary for the assessor to determine if full homestead 172.24 benefits are warranted. 172.25 (h) If residential or agricultural real estate is occupied 172.26 and used for purposes of a homestead by a child of a deceased 172.27 owner and the property is subject to jurisdiction of probate 172.28 court, the child shall receive relative homestead classification 172.29 under paragraph (c) or (d) to the same extent they would be 172.30 entitled to it if the owner was still living, until the probate 172.31 is completed. For purposes of this paragraph, "child" includes 172.32 a relationship by blood or by marriage. 172.33[EFFECTIVE DATE.] This section is effective for taxes 172.34 levied in 2001, payable in 2002, and thereafter. 172.35 Sec. 28. Minnesota Statutes 2000, section 273.124, 172.36 subdivision 14, is amended to read: 173.1 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 173.2 (a) Real estate of less than ten acres that is the homestead of 173.3 its owner must be classified as class 2a under section 273.13, 173.4 subdivision 23, paragraph (a), if: 173.5 (1) the parcel on which the house is located is contiguous 173.6 on at least two sides to (i) agricultural land, (ii) land owned 173.7 or administered by the United States Fish and Wildlife Service, 173.8 or (iii) land administered by the department of natural 173.9 resources on which in lieu taxes are paid under sections 477A.11 173.10 to 477A.14; 173.11 (2) its owner also owns a noncontiguous parcel of 173.12 agricultural land that is at least 20 acres; 173.13 (3) the noncontiguous land is located not farther than four 173.14 townships or cities, or a combination of townships or cities 173.15 from the homestead; and 173.16 (4) the agricultural use value of the noncontiguous land 173.17 and farm buildings is equal to at least 50 percent of the market 173.18 value of the house, garage, and one acre of land. 173.19 Homesteads initially classified as class 2a under the 173.20 provisions of this paragraph shall remain classified as class 173.21 2a, irrespective of subsequent changes in the use of adjoining 173.22 properties, as long as the homestead remains under the same 173.23 ownership, the owner owns a noncontiguous parcel of agricultural 173.24 land that is at least 20 acres, and the agricultural use value 173.25 qualifies under clause (4). Homestead classification under this 173.26 paragraph is limited to property that qualified under this 173.27 paragraph for the 1998 assessment. 173.28 (b)(i) Agricultural property consisting of at least 40 173.29 acres shall be classified as the owner's homestead, to the same 173.30 extent as other agricultural homestead property, if all of the 173.31 following criteria are met: 173.32 (1) the owner, or the owner's son or daughter, is actively 173.33 farming the agricultural property; 173.34 (2) the owner of the agricultural property is a Minnesota 173.35 resident, and if the owner's son or daughter is actively farming 173.36 the agricultural property under clause (1), that person must 174.1 also be a Minnesota resident; 174.2 (3) neither the owner nor the spouse of the owner claims 174.3 another agricultural homestead in Minnesota; and 174.4 (4) neither the ownerdoes not livenor the person actively 174.5 farming the property lives farther than four townships or 174.6 cities, or a combination of four townships or cities, from the 174.7 agricultural property,andexcept that if theowner's son or174.8daughter is actively farming the agricultural property under174.9clause (1), that person must also live within theowner or the 174.10 owner's spouse is required to live in employer-provided housing, 174.11 the owner or owner's spouse, whichever is actively farming the 174.12 agricultural property, may live more than four townships or 174.13 cities, or combination of four townships or cities from the 174.14 agricultural property. 174.15 The relationship under this paragraph may be either by 174.16 blood or marriage. 174.17 (ii) Property containing the residence of an owner who owns 174.18 qualified property under clause (i) shall be classified as part 174.19 of the owner's agricultural homestead, if that property is also 174.20 used for noncommercial storage or drying of agricultural crops. 174.21 (c) Except as provided in paragraph (e), noncontiguous land 174.22 shall be included as part of a homestead under section 273.13, 174.23 subdivision 23, paragraph (a), only if the homestead is 174.24 classified as class 2a and the detached land is located in the 174.25 same township or city, or not farther than four townships or 174.26 cities or combination thereof from the homestead. Any taxpayer 174.27 of these noncontiguous lands must notify the county assessor 174.28 that the noncontiguous land is part of the taxpayer's homestead, 174.29 and, if the homestead is located in another county, the taxpayer 174.30 must also notify the assessor of the other county. 174.31 (d) Agricultural land used for purposes of a homestead and 174.32 actively farmed by a person holding a vested remainder interest 174.33 in it must be classified as a homestead under section 273.13, 174.34 subdivision 23, paragraph (a). If agricultural land is 174.35 classified class 2a, any other dwellings on the land used for 174.36 purposes of a homestead by persons holding vested remainder 175.1 interests who are actively engaged in farming the property, and 175.2 up to one acre of the land surrounding each homestead and 175.3 reasonably necessary for the use of the dwelling as a home, must 175.4 also be assessed class 2a. 175.5 (e) Agricultural land and buildings that were class 2a 175.6 homestead property under section 273.13, subdivision 23, 175.7 paragraph (a), for the 1997 assessment shall remain classified 175.8 as agricultural homesteads for subsequent assessments if: 175.9 (1) the property owner abandoned the homestead dwelling 175.10 located on the agricultural homestead as a result of the April 175.11 1997 floods; 175.12 (2) the property is located in the county of Polk, Clay, 175.13 Kittson, Marshall, Norman, or Wilkin; 175.14 (3) the agricultural land and buildings remain under the 175.15 same ownership for the current assessment year as existed for 175.16 the 1997 assessment year and continue to be used for 175.17 agricultural purposes; 175.18 (4) the dwelling occupied by the owner is located in 175.19 Minnesota and is within 30 miles of one of the parcels of 175.20 agricultural land that is owned by the taxpayer; and 175.21 (5) the owner notifies the county assessor that the 175.22 relocation was due to the 1997 floods, and the owner furnishes 175.23 the assessor any information deemed necessary by the assessor in 175.24 verifying the change in dwelling. Further notifications to the 175.25 assessor are not required if the property continues to meet all 175.26 the requirements in this paragraph and any dwellings on the 175.27 agricultural land remain uninhabited. 175.28 (f) Agricultural land and buildings that were class 2a 175.29 homestead property under section 273.13, subdivision 23, 175.30 paragraph (a), for the 1998 assessment shall remain classified 175.31 agricultural homesteads for subsequent assessments if: 175.32 (1) the property owner abandoned the homestead dwelling 175.33 located on the agricultural homestead as a result of damage 175.34 caused by a March 29, 1998, tornado; 175.35 (2) the property is located in the county of Blue Earth, 175.36 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 176.1 (3) the agricultural land and buildings remain under the 176.2 same ownership for the current assessment year as existed for 176.3 the 1998 assessment year; 176.4 (4) the dwelling occupied by the owner is located in this 176.5 state and is within 50 miles of one of the parcels of 176.6 agricultural land that is owned by the taxpayer; and 176.7 (5) the owner notifies the county assessor that the 176.8 relocation was due to a March 29, 1998, tornado, and the owner 176.9 furnishes the assessor any information deemed necessary by the 176.10 assessor in verifying the change in homestead dwelling. For 176.11 taxes payable in 1999, the owner must notify the assessor by 176.12 December 1, 1998. Further notifications to the assessor are not 176.13 required if the property continues to meet all the requirements 176.14 in this paragraph and any dwellings on the agricultural land 176.15 remain uninhabited. 176.16 (g) Agricultural property consisting of at least 40 acres 176.17 of a family farm corporation, joint farm venture, limited 176.18 liability company, or partnership as described under subdivision 176.19 8 shall be classified homestead, to the same extent as other 176.20 agricultural homestead property, if all of the following 176.21 criteria are met: 176.22 (1) the shareholder, member, or partner is actively farming 176.23 the agricultural property; 176.24 (2) the shareholder, member, or partner of the agricultural 176.25 property is a Minnesota resident; 176.26 (3) neither the shareholder, member, or partner, nor the 176.27 spouse of the shareholder, member, or partner claims another 176.28 agricultural homestead in Minnesota; and 176.29 (4) the shareholder, member, or partner does not live 176.30 farther than four townships or cities, or a combination of four 176.31 townships or cities, from the agricultural property. 176.32[EFFECTIVE DATE.] This section is effective for the 2001 176.33 assessment for taxes payable in 2002 and thereafter. 176.34 Sec. 29. Minnesota Statutes 2000, section 273.13, 176.35 subdivision 23, is amended to read: 176.36 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 177.1 land including any improvements that is homesteaded. The market 177.2 value of the house and garage and immediately surrounding one 177.3 acre of land has the same class rates as class 1a property under 177.4 subdivision 22. The value of the remaining land including 177.5 improvements up to $115,000 has a net class rate of 0.35 percent 177.6 of market value. The value of class 2a property over $115,000 177.7 of market value up to and including $600,000 market value has a 177.8 net class rate of 0.8 percent of market value. The remaining 177.9 property over $600,000 market value has a class rate of 1.20 177.10 percent of market value. 177.11 (b) Class 2b property is (1) real estate, rural in 177.12 character and used exclusively for growing trees for timber, 177.13 lumber, and wood and wood products; (2) real estate that is not 177.14 improved with a structure and is used exclusively for growing 177.15 trees for timber, lumber, and wood and wood products, if the 177.16 owner has participated or is participating in a cost-sharing 177.17 program for afforestation, reforestation, or timber stand 177.18 improvement on that particular property, administered or 177.19 coordinated by the commissioner of natural resources; (3) real 177.20 estate that is nonhomestead agricultural land; or (4) a landing 177.21 area or public access area of a privately owned public use 177.22 airport. Class 2b property has a net class rate of 1.20 percent 177.23 of market value. 177.24 (c) Agricultural land as used in this section means 177.25 contiguous acreage of ten acres or more, used during the 177.26 preceding year for agricultural purposes. "Agricultural 177.27 purposes" as used in this section means the raising or 177.28 cultivation of agricultural products or enrollment in the 177.29 Reinvest in Minnesota program under sections 103F.501 to 177.30 103F.535 or the federal Conservation Reserve Program as 177.31 contained in Public Law Number 99-198. Contiguous acreage on 177.32 the same parcel, or contiguous acreage on an immediately 177.33 adjacent parcel under the same ownership, may also qualify as 177.34 agricultural land, but only if it is pasture, timber, waste, 177.35 unusable wild land, or land included in state or federal farm 177.36 programs. Agricultural classification for property shall be 178.1 determined excluding the house, garage, and immediately 178.2 surrounding one acre of land, and shall not be based upon the 178.3 market value of any residential structures on the parcel or 178.4 contiguous parcels under the same ownership. 178.5 (d) Real estate, excluding the house, garage, and 178.6 immediately surrounding one acre of land, of less than ten acres 178.7 which is exclusively and intensively used for raising or 178.8 cultivating agricultural products, shall be considered as 178.9 agricultural land. 178.10 Land shall be classified as agricultural even if all or a 178.11 portion of the agricultural use of that property is the leasing 178.12 to, or use by another person for agricultural purposes. 178.13 Classification under this subdivision is not determinative 178.14 for qualifying under section 273.111. 178.15 The property classification under this section supersedes, 178.16 for property tax purposes only, any locally administered 178.17 agricultural policies or land use restrictions that define 178.18 minimum or maximum farm acreage. 178.19 (e) The term "agricultural products" as used in this 178.20 subdivision includes production for sale of: 178.21 (1) livestock, dairy animals, dairy products, poultry and 178.22 poultry products, fur-bearing animals, horticultural and nursery 178.23 stock described in sections 18.44 to 18.61, fruit of all kinds, 178.24 vegetables, forage, grains, bees, and apiary products by the 178.25 owner; 178.26 (2) fish bred for sale and consumption if the fish breeding 178.27 occurs on land zoned for agricultural use; 178.28 (3) the commercial boarding of horses if the boarding is 178.29 done in conjunction with raising or cultivating agricultural 178.30 products as defined in clause (1); 178.31 (4) property which is owned and operated by nonprofit 178.32 organizations used for equestrian activities, excluding racing; 178.33 (5) game birds and waterfowl bred and raised for use on a 178.34 shooting preserve licensed under section 97A.115; 178.35 (6) insects primarily bred to be used as food for 178.36 animals;and179.1 (7) trees, grown for sale as a crop, and not sold for 179.2 timber, lumber, wood, or wood products; and 179.3 (8) maple syrup taken from trees grown by a person licensed 179.4 by the Minnesota department of agriculture under chapter 28A as 179.5 a food processor. 179.6 (f) If a parcel used for agricultural purposes is also used 179.7 for commercial or industrial purposes, including but not limited 179.8 to: 179.9 (1) wholesale and retail sales; 179.10 (2) processing of raw agricultural products or other goods; 179.11 (3) warehousing or storage of processed goods; and 179.12 (4) office facilities for the support of the activities 179.13 enumerated in clauses (1), (2), and (3), 179.14 the assessor shall classify the part of the parcel used for 179.15 agricultural purposes as class 1b, 2a, or 2b, whichever is 179.16 appropriate, and the remainder in the class appropriate to its 179.17 use. The grading, sorting, and packaging of raw agricultural 179.18 products for first sale is considered an agricultural purpose. 179.19 A greenhouse or other building where horticultural or nursery 179.20 products are grown that is also used for the conduct of retail 179.21 sales must be classified as agricultural if it is primarily used 179.22 for the growing of horticultural or nursery products from seed, 179.23 cuttings, or roots and occasionally as a showroom for the retail 179.24 sale of those products. Use of a greenhouse or building only 179.25 for the display of already grown horticultural or nursery 179.26 products does not qualify as an agricultural purpose. 179.27 The assessor shall determine and list separately on the 179.28 records the market value of the homestead dwelling and the one 179.29 acre of land on which that dwelling is located. If any farm 179.30 buildings or structures are located on this homesteaded acre of 179.31 land, their market value shall not be included in this separate 179.32 determination. 179.33 (g) To qualify for classification under paragraph (b), 179.34 clause (4), a privately owned public use airport must be 179.35 licensed as a public airport under section 360.018. For 179.36 purposes of paragraph (b), clause (4), "landing area" means that 180.1 part of a privately owned public use airport properly cleared, 180.2 regularly maintained, and made available to the public for use 180.3 by aircraft and includes runways, taxiways, aprons, and sites 180.4 upon which are situated landing or navigational aids. A landing 180.5 area also includes land underlying both the primary surface and 180.6 the approach surfaces that comply with all of the following: 180.7 (i) the land is properly cleared and regularly maintained 180.8 for the primary purposes of the landing, taking off, and taxiing 180.9 of aircraft; but that portion of the land that contains 180.10 facilities for servicing, repair, or maintenance of aircraft is 180.11 not included as a landing area; 180.12 (ii) the land is part of the airport property; and 180.13 (iii) the land is not used for commercial or residential 180.14 purposes. 180.15 The land contained in a landing area under paragraph (b), clause 180.16 (4), must be described and certified by the commissioner of 180.17 transportation. The certification is effective until it is 180.18 modified, or until the airport or landing area no longer meets 180.19 the requirements of paragraph (b), clause (4). For purposes of 180.20 paragraph (b), clause (4), "public access area" means property 180.21 used as an aircraft parking ramp, apron, or storage hangar, or 180.22 an arrival and departure building in connection with the airport. 180.23[EFFECTIVE DATE.] This section is effective for taxes 180.24 levied in 2001, payable in 2002, and thereafter. 180.25 Sec. 30. Minnesota Statutes 2000, section 273.13, 180.26 subdivision 25, is amended to read: 180.27 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 180.28 estate containing four or more units and used or held for use by 180.29 the owner or by the tenants or lessees of the owner as a 180.30 residence for rental periods of 30 days or more. Class 4a also 180.31 includes hospitals licensed under sections 144.50 to 144.56, 180.32 other than hospitals exempt under section 272.02, and contiguous 180.33 property used for hospital purposes, without regard to whether 180.34 the property has been platted or subdivided. Class 4a property 180.35 in a city with a population of 5,000 or less, that is (1) 180.36 located outside of the metropolitan area, as defined in section 181.1 473.121, subdivision 2, or outside any county contiguous to the 181.2 metropolitan area, and (2) whose city boundary is at least 15 181.3 miles from the boundary of any city with a population greater 181.4 than 5,000 has a class rate of 2.15 percent of market value. 181.5 All other class 4a property has a class rate of 2.4 percent of 181.6 market value. For purposes of this paragraph, population has 181.7 the same meaning given in section 477A.011, subdivision 3. 181.8 (b) Class 4b includes: 181.9 (1) residential real estate containing less than four units 181.10 that does not qualify as class 4bb, other than seasonal 181.11 residential, and recreational; 181.12 (2) manufactured homes not classified under any other 181.13 provision; 181.14 (3) a dwelling, garage, and surrounding one acre of 181.15 property on a nonhomestead farm classified under subdivision 23, 181.16 paragraph (b) containing two or three units; 181.17 (4) unimproved property that is classified residential as 181.18 determined under subdivision 33. 181.19 Class 4b property has a class rate of 1.65 percent of 181.20 market value. 181.21 (c) Class 4bb includes: 181.22 (1) nonhomestead residential real estate containing one 181.23 unit, other than seasonal residential, and recreational; and 181.24 (2) a single family dwelling, garage, and surrounding one 181.25 acre of property on a nonhomestead farm classified under 181.26 subdivision 23, paragraph (b). 181.27 Class 4bb has a class rate of 1.2 percent on the first 181.28 $76,000 of market value and a class rate of 1.65 percent of its 181.29 market value that exceeds $76,000. 181.30 Property that has been classified as seasonal recreational 181.31 residential property at any time during which it has been owned 181.32 by the current owner or spouse of the current owner does not 181.33 qualify for class 4bb. 181.34 (d) Class 4c property includes: 181.35 (1) except as provided in subdivision 22, paragraph (c), 181.36 real property devoted to temporary and seasonal residential 182.1 occupancy for recreation purposes, including real property 182.2 devoted to temporary and seasonal residential occupancy for 182.3 recreation purposes and not devoted to commercial purposes for 182.4 more than 250 days in the year preceding the year of 182.5 assessment. For purposes of this clause, property is devoted to 182.6 a commercial purpose on a specific day if any portion of the 182.7 property is used for residential occupancy, and a fee is charged 182.8 for residential occupancy. In order for a property to be 182.9 classified as class 4c, seasonal recreational residential for 182.10 commercial purposes, at least 40 percent of the annual gross 182.11 lodging receipts related to the property must be from business 182.12 conducted during 90 consecutive days and either (i) at least 60 182.13 percent of all paid bookings by lodging guests during the year 182.14 must be for periods of at least two consecutive nights; or (ii) 182.15 at least 20 percent of the annual gross receipts must be from 182.16 charges for rental of fish houses, boats and motors, 182.17 snowmobiles, downhill or cross-country ski equipment, or charges 182.18 for marina services, launch services, and guide services, or the 182.19 sale of bait and fishing tackle. For purposes of this 182.20 determination, a paid booking of five or more nights shall be 182.21 counted as two bookings. Class 4c also includes commercial use 182.22 real property used exclusively for recreational purposes in 182.23 conjunction with class 4c property devoted to temporary and 182.24 seasonal residential occupancy for recreational purposes, up to 182.25 a total of two acres, provided the property is not devoted to 182.26 commercial recreational use for more than 250 days in the year 182.27 preceding the year of assessment and is located within two miles 182.28 of the class 4c property with which it is used. Class 4c 182.29 property classified in this clause also includes the remainder 182.30 of class 1c resorts provided that the entire property including 182.31 that portion of the property classified as class 1c also meets 182.32 the requirements for class 4c under this clause; otherwise the 182.33 entire property is classified as class 3. Owners of real 182.34 property devoted to temporary and seasonal residential occupancy 182.35 for recreation purposes and all or a portion of which was 182.36 devoted to commercial purposes for not more than 250 days in the 183.1 year preceding the year of assessment desiring classification as 183.2 class 1c or 4c, must submit a declaration to the assessor 183.3 designating the cabins or units occupied for 250 days or less in 183.4 the year preceding the year of assessment by January 15 of the 183.5 assessment year. Those cabins or units and a proportionate 183.6 share of the land on which they are located will be designated 183.7 class 1c or 4c as otherwise provided. The remainder of the 183.8 cabins or units and a proportionate share of the land on which 183.9 they are located will be designated as class 3a. The owner of 183.10 property desiring designation as class 1c or 4c property must 183.11 provide guest registers or other records demonstrating that the 183.12 units for which class 1c or 4c designation is sought were not 183.13 occupied for more than 250 days in the year preceding the 183.14 assessment if so requested. The portion of a property operated 183.15 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 183.16 nonresidential facility operated on a commercial basis not 183.17 directly related to temporary and seasonal residential occupancy 183.18 for recreation purposes shall not qualify for class 1c or 4c; 183.19 (2) qualified property used as a golf course if: 183.20 (i) it is open to the public on a daily fee basis. It may 183.21 charge membership fees or dues, but a membership fee may not be 183.22 required in order to use the property for golfing, and its green 183.23 fees for golfing must be comparable to green fees typically 183.24 charged by municipal courses; and 183.25 (ii) it meets the requirements of section 273.112, 183.26 subdivision 3, paragraph (d). 183.27 A structure used as a clubhouse, restaurant, or place of 183.28 refreshment in conjunction with the golf course is classified as 183.29 class 3a property; 183.30 (3) real property up to a maximum of one acre of land owned 183.31 by a nonprofit community service oriented organization; provided 183.32 that the property is not used for a revenue-producing activity 183.33 for more than six days in the calendar year preceding the year 183.34 of assessment and the property is not used for residential 183.35 purposes on either a temporary or permanent basis. For purposes 183.36 of this clause, a "nonprofit community service oriented 184.1 organization" means any corporation, society, association, 184.2 foundation, or institution organized and operated exclusively 184.3 for charitable, religious, fraternal, civic, or educational 184.4 purposes, and which is exempt from federal income taxation 184.5 pursuant to section 501(c)(3), (10), or (19) of the Internal 184.6 Revenue Code of 1986, as amended through December 31, 1990. For 184.7 purposes of this clause, "revenue-producing activities" shall 184.8 include but not be limited to property or that portion of the 184.9 property that is used as an on-sale intoxicating liquor or 3.2 184.10 percent malt liquor establishment licensed under chapter 340A, a 184.11 restaurant open to the public, bowling alley, a retail store, 184.12 gambling conducted by organizations licensed under chapter 349, 184.13 an insurance business, or office or other space leased or rented 184.14 to a lessee who conducts a for-profit enterprise on the 184.15 premises. Any portion of the property which is used for 184.16 revenue-producing activities for more than six days in the 184.17 calendar year preceding the year of assessment shall be assessed 184.18 as class 3a. The use of the property for social events open 184.19 exclusively to members and their guests for periods of less than 184.20 24 hours, when an admission is not charged nor any revenues are 184.21 received by the organization shall not be considered a 184.22 revenue-producing activity; 184.23 (4) post-secondary student housing of not more than one 184.24 acre of land that is owned by a nonprofit corporation organized 184.25 under chapter 317A and is used exclusively by a student 184.26 cooperative, sorority, or fraternity for on-campus housing or 184.27 housing located within two miles of the border of a college 184.28 campus; 184.29 (5) manufactured home parks as defined in section 327.14, 184.30 subdivision 3; 184.31 (6) real property that is actively and exclusively devoted 184.32 to indoor fitness, health, social, recreational, and related 184.33 uses, is owned and operated by a not-for-profit corporation, and 184.34 is located within the metropolitan area as defined in section 184.35 473.121, subdivision 2;and184.36 (7) a leased or privately owned noncommercial aircraft 185.1 storage hangar not exempt under section 272.01, subdivision 2, 185.2 and the land on which it is located, provided that: 185.3 (i) the land is on an airport owned or operated by a city, 185.4 town, county, metropolitan airports commission, or group 185.5 thereof; and 185.6 (ii) the land lease, or any ordinance or signed agreement 185.7 restricting the use of the leased premise, prohibits commercial 185.8 activity performed at the hangar. 185.9 If a hangar classified under this clause is sold after June 185.10 30, 2000, a bill of sale must be filed by the new owner with the 185.11 assessor of the county where the property is located within 60 185.12 days of the sale; and 185.13 (8) property or a portion of a property that is being used 185.14 exclusively as a licensed child care provider facility under 185.15 Minnesota Rules, parts 9503.0005 to 9503.0170 (Rule 3). 185.16 Class 4c property has a class rate of 1.65 percent of 185.17 market value, except that (i) each parcel of seasonal 185.18 residential recreational property not used for commercial 185.19 purposes has the same class rates as class 4bb property, (ii) 185.20 manufactured home parks assessed under clause (5) have the same 185.21 class rate as class 4b property, and (iii) property described in 185.22 paragraph (d), clause (4), has the same class rate as the rate 185.23 applicable to the first tier of class 4bb nonhomestead 185.24 residential real estate under paragraph (c). 185.25 (e) Class 4d property is qualifying low-income rental 185.26 housing certified to the assessor by the housing finance agency 185.27 under sections 273.126 and 462A.071. Class 4d includes land in 185.28 proportion to the total market value of the building that is 185.29 qualifying low-income rental housing. For all properties 185.30 qualifying as class 4d, the market value determined by the 185.31 assessor must be based on the normal approach to value using 185.32 normal unrestricted rents. 185.33 Class 4d property has a class rate of one percent of market 185.34 value. 185.35[EFFECTIVE DATE.] This section is effective for taxes 185.36 payable in 2002 and thereafter. 186.1 Sec. 31. [273.355] [WIND ENERGY CONVERSION SYSTEMS.] 186.2 Subdivision 1. [IN LIEU TAX.] A tax is imposed on 186.3 production of electricity from a wind energy conversion system 186.4 used as an electric power source that is installed after January 186.5 1, 1991. The tax is in lieu of ad valorem taxes on the wind 186.6 energy conversion system. The land on which the wind energy 186.7 conversion system is located remains taxable. 186.8 Subd. 2. [DEFINITIONS.] (a) For the purposes of this 186.9 section, the term: 186.10 (1) "wind energy conversion system" has the meaning given 186.11 that term in section 216C.06, subdivision 12; 186.12 (2) "large scale wind energy conversion system" means a 186.13 wind energy conversion system of more than 12 megawatts, as 186.14 measured by the nameplate capacity of the system or as combined 186.15 with other systems as provided in paragraph (b); 186.16 (3) "medium scale wind energy conversion system" means a 186.17 wind energy conversion system of between two and 12 megawatts, 186.18 as measured by the nameplate capacity of the system or as 186.19 combined with other systems as provided in paragraph (b); 186.20 (4) "small scale wind energy conversion system" means a 186.21 wind energy conversion system of two megawatts and under, as 186.22 measured by the nameplate capacity of the system or as combined 186.23 with other systems as provided in paragraph (b). 186.24 (b) The total size of a wind energy conversion system under 186.25 paragraph (a) shall be determined according to this paragraph. 186.26 Unless the systems are interconnected with different 186.27 distribution systems, the nameplate capacity of one wind energy 186.28 conversion system shall be combined with the nameplate capacity 186.29 of any other wind energy conversion system that is: (i) located 186.30 within five miles of the wind energy conversion system; (ii) 186.31 constructed within the same calendar year as the wind energy 186.32 conversion system; and (iii) under common ownership. In the 186.33 case of a dispute, the commissioner of commerce shall determine 186.34 the total size of the system, and shall draw all reasonable 186.35 inferences in favor of combining the systems. 186.36 (c) In making a determination under paragraph (b), clause 187.1 (iii), the commissioner of commerce may determine that two wind 187.2 energy conversion systems are under common ownership when the 187.3 underlying ownership structure contains similar persons or 187.4 entities, even if the ownership shares differ between the two 187.5 systems. Wind energy conversion systems are not under common 187.6 ownership solely because the same person or entity provided 187.7 equity financing for the systems. 187.8 Subd. 3. [RATE OF TAX.] The owner of a wind energy 187.9 conversion system shall pay: 187.10 (1) for a large scale wind energy conversion system, .22 187.11 cents per kilowatt-hour of electricity produced by the system; 187.12 and 187.13 (2) for a medium scale wind energy conversion system, .065 187.14 cents per kilowatt-hour of electricity produced by the system. 187.15 Small scale wind energy conversion systems are exempt from 187.16 taxation under this section. 187.17 Subd. 4. [REPORTS.] An owner of a wind energy conversion 187.18 system subject to tax under this section shall file a report 187.19 with the commissioner of revenue annually on or before March 1 187.20 detailing the amount of electricity in kilowatt-hours that was 187.21 produced by the wind energy conversion system. The commissioner 187.22 shall prescribe the form of the report. The report must contain 187.23 the information required by the commissioner to determine the 187.24 tax due to each county under this section for the current year. 187.25 If an owner of a wind energy conversion system subject to 187.26 taxation under this section fails to file the report by the due 187.27 date, the commissioner of revenue shall determine the tax based 187.28 upon the nameplate capacity of the system multiplied by a 187.29 capacity factor of 30 percent. On or before March 31, the 187.30 commissioner of revenue shall notify the owner of the wind 187.31 energy conversion systems of the tax due to each county for the 187.32 current year and shall certify to the county auditor of each 187.33 county in which the systems are located the tax due from each 187.34 owner for the current year. 187.35 Subd. 5. [PAYMENT OF TAX; COLLECTION.] The taxes as 187.36 determined by the commissioner of revenue must be contained on 188.1 the lists of taxes due delivered by the county auditor to the 188.2 county treasurer. The taxes must be paid to the county 188.3 treasurer at the time and in the manner provided for payment of 188.4 property taxes under section 277.01, subdivision 3, and, if 188.5 unpaid, are subject to the same enforcement, collection, and 188.6 interest and penalties as delinquent personal property taxes. 188.7 Except to the extent inconsistent with this section, the 188.8 provisions of sections 277.01 to 277.24 and 278.01 to 278.13 188.9 apply to the taxes imposed under this section, and for purposes 188.10 of those provisions the taxes imposed under this section are 188.11 considered personal property taxes. 188.12 Subd. 6. [DISTRIBUTION OF REVENUES.] Revenues from the 188.13 taxes imposed under this section must be part of the settlement 188.14 between the county treasurer and the county auditor under 188.15 section 276.09 and apportioned and distributed by the county 188.16 auditor and the county treasurer to the county, school district, 188.17 city or town, and special taxing districts in which the property 188.18 is located, in the same manner and in the same proportion as the 188.19 other property taxes are apportioned and distributed. 188.20[EFFECTIVE DATE.] This section is effective for energy 188.21 produced by wind energy conversion systems subject to taxation 188.22 under that section after January 1, 2002. 188.23 Sec. 32. Minnesota Statutes 2000, section 274.01, 188.24 subdivision 1, is amended to read: 188.25 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 188.26 GRIEVANCES.] (a) The town board of a town, or the council or 188.27 other governing body of a city, is the board ofreviewappeal 188.28 and equalization except (1) in cities whose charters provide for 188.29 a board of equalization or (2) in any city or town that has 188.30 transferred its local board of review power and duties to the 188.31 county board as provided in subdivision 3. The county assessor 188.32 shall fix a day and time when the board or the board of 188.33 equalization shall meet in the assessment districts of the 188.34 county. Notwithstanding any law or city charter to the 188.35 contrary, a city board of equalization shall be referred to as a 188.36 board of appeal and equalization. On or before February 15 of 189.1 each year the assessor shall give written notice of the time to 189.2 the city or town clerk. Notwithstanding the provisions of any 189.3 charter to the contrary, the meetings must be held between April 189.4 1 and May 31 each year. The clerk shall give published and 189.5 posted notice of the meeting at least ten days before the date 189.6 of the meeting. 189.7If in any county, at least 25 percent of the total net tax189.8capacity of a city or town is noncommercial seasonal residential189.9recreational property classified under section 273.13,189.10subdivision 25, the county must hold two countywide189.11informational meetings on Saturdays. The meetings will allow189.12noncommercial seasonal residential recreational taxpayers to189.13discuss their property valuation with the appropriate assessment189.14staff. These Saturday informational meetings must be scheduled189.15to allow the owner of the noncommercial seasonal residential189.16recreational property the opportunity to attend one of the189.17meetings prior to the scheduled board of review for their city189.18or town. The Saturday meeting dates must be contained on the189.19notice of valuation of real property under section 273.121.189.20 The board shall meet at the office of the clerk to review 189.21 the assessment and classification of property in the town or 189.22 city. No changes in valuation or classification which are 189.23 intended to correct errors in judgment by the county assessor 189.24 may be made by the county assessor after the boardof reviewhas 189.25 adjourned in those cities or towns that hold a local board of 189.26 review; however, corrections of errors that are merely clerical 189.27 in nature or changes that extend homestead treatment to property 189.28 are permitted after adjournment until the tax extension date for 189.29 that assessment year. The changes must be fully documented and 189.30 maintained in the assessor's office and must be available for 189.31 review by any person. A copy of the changes made during this 189.32 period in those cities or towns that hold a local board of 189.33 review must be sent to the county board no later than December 189.34 31 of the assessment year. 189.35 (b) The board shall determine whether the taxable property 189.36 in the town or city has been properly placed on the list and 190.1 properly valued by the assessor. If real or personal property 190.2 has been omitted, the board shall place it on the list with its 190.3 market value, and correct the assessment so that each tract or 190.4 lot of real property, and each article, parcel, or class of 190.5 personal property, is entered on the assessment list at its 190.6 market value. No assessment of the property of any person may 190.7 be raised unless the person has been duly notified of the intent 190.8 of the board to do so. On application of any person feeling 190.9 aggrieved, the board shall review the assessment or 190.10 classification, or both, and correct it as appears just. The 190.11 board may not make an individual market value adjustment or 190.12 classification change that would benefit the property in cases 190.13 where the owner or other person having control over the property 190.14 will not permit the assessor to inspect the property and the 190.15 interior of any buildings or structures. 190.16 (c) A local boardof reviewmay reduce assessments upon 190.17 petition of the taxpayer but the total reductions must not 190.18 reduce the aggregate assessment made by the county assessor by 190.19 more than one percent. If the total reductions would lower the 190.20 aggregate assessments made by the county assessor by more than 190.21 one percent, none of the adjustments may be made. The assessor 190.22 shall correct any clerical errors or double assessments 190.23 discovered by the boardof reviewwithout regard to the one 190.24 percent limitation. 190.25 (d) A majority of the members may act at the meeting, and 190.26 adjourn from day to day until they finish hearing the cases 190.27 presented. The assessor shall attend, with the assessment books 190.28 and papers, and take part in the proceedings, but must not 190.29 vote. The county assessor, or an assistant delegated by the 190.30 county assessor shall attend the meetings. The board shall list 190.31 separately, on a form appended to the assessment book, all 190.32 omitted property added to the list by the board and all items of 190.33 property increased or decreased, with the market value of each 190.34 item of property, added or changed by the board, placed opposite 190.35 the item. The county assessor shall enter all changes made by 190.36 the board in the assessment book. 191.1 (e) Except as provided in subdivision 3, if a person fails 191.2 to appear in person, by counsel, or by written communication 191.3 before the board after being duly notified of the board's intent 191.4 to raise the assessment of the property, or if a person feeling 191.5 aggrieved by an assessment or classification fails to apply for 191.6 a review of the assessment or classification, the person may not 191.7 appear before the county board of appeal and equalization for a 191.8 review of the assessment or classification. This paragraph does 191.9 not apply if an assessment was made after the local board 191.10 meeting, as provided in section 273.01, or if the person can 191.11 establish not having received notice of market value at least 191.12 five days before the local boardof reviewmeeting. 191.13 (f) The local boardof review or the board of equalization191.14 must complete its work and adjourn within 20 days from the time 191.15 of convening stated in the notice of the clerk, unless a longer 191.16 period is approved by the commissioner of revenue. No action 191.17 taken after that date is valid. All complaints about an 191.18 assessment or classification made after the meeting of the board 191.19 must be heard and determined by the county board of 191.20 equalization. A nonresident may, at any time, before the 191.21 meeting of the boardof reviewfile written objections to an 191.22 assessment or classification with the county assessor. The 191.23 objections must be presented to the boardof reviewat its 191.24 meeting by the county assessor for its consideration. 191.25[EFFECTIVE DATE.] This section is effective January 1, 191.26 2002, and thereafter. 191.27 Sec. 33. Minnesota Statutes 2000, section 274.13, 191.28 subdivision 1, is amended to read: 191.29 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 191.30 ASSESSMENTS.] The county commissioners, or a majority of them, 191.31 with the county auditor, or, if the auditor cannot be present, 191.32 the deputy county auditor, or, if there is no deputy, the court 191.33 administrator of the district court, shall form a board for the 191.34 equalization of the assessment of the property of the county, 191.35 including the property of all cities whose charters provide for 191.36 a board of equalization. This board shall be referred to as the 192.1 county board of appeal and equalization. The board shall meet 192.2 annually, on the date specified in section 274.14, at the office 192.3 of the auditor. Each member shall take an oath to fairly and 192.4 impartially perform duties as a member. The board shall examine 192.5 and compare the returns of the assessment of property of the 192.6 towns or districts, and equalize them so that each tract or lot 192.7 of real property and each article or class of personal property 192.8 is entered on the assessment list at its market value, subject 192.9 to the following rules: 192.10 (1) The board shall raise the valuation of each tract or 192.11 lot of real property which in its opinion is returned below its 192.12 market value to the sum believed to be its market value. The 192.13 board must first give notice of intention to raise the valuation 192.14 to the person in whose name it is assessed, if the person is a 192.15 resident of the county. The notice must fix a time and place 192.16 for a hearing. 192.17 (2) The board shall reduce the valuation of each tract or 192.18 lot which in its opinion is returned above its market value to 192.19 the sum believed to be its market value. 192.20 (3) The board shall raise the valuation of each class of 192.21 personal property which in its opinion is returned below its 192.22 market value to the sum believed to be its market value. It 192.23 shall raise the aggregate value of the personal property of 192.24 individuals, firms, or corporations, when it believes that the 192.25 aggregate valuation, as returned, is less than the market value 192.26 of the taxable personal property possessed by the individuals, 192.27 firms, or corporations, to the sum it believes to be the market 192.28 value. The board must first give notice to the persons of 192.29 intention to do so. The notice must set a time and place for a 192.30 hearing. 192.31 (4) The board shall reduce the valuation of each class of 192.32 personal property that is returned above its market value to the 192.33 sum it believes to be its market value. Upon complaint of a 192.34 party aggrieved, the board shall reduce the aggregate valuation 192.35 of the individual's personal property, or of any class of 192.36 personal property for which the individual is assessed, which in 193.1 its opinion has been assessed at too large a sum, to the sum it 193.2 believes was the market value of the individual's personal 193.3 property of that class. 193.4 (5) The board must not reduce the aggregate value of all 193.5 the property of its county, as submitted to the county board of 193.6 equalization, with the additions made by the auditor under this 193.7 chapter, by more than one percent of its whole valuation. The 193.8 board may raise the aggregate valuation of real property, and of 193.9 each class of personal property, of the county, or of any town 193.10 or district of the county, when it believes it is below the 193.11 market value of the property, or class of property, to the 193.12 aggregate amount it believes to be its market value. 193.13 (6) The board shall change the classification of any 193.14 property which in its opinion is not properly classified. 193.15[EFFECTIVE DATE.] This section is effective January 1, 193.16 2002, and thereafter. 193.17 Sec. 34. Minnesota Statutes 2000, section 275.065, 193.18 subdivision 3, is amended to read: 193.19 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 193.20 county auditor shall prepare and the county treasurer shall 193.21 deliver after November 10 and on or before November 24 each 193.22 year, by first class mail to each taxpayer at the address listed 193.23 on the county's current year's assessment roll, a notice of 193.24 proposed property taxes. 193.25 (b) The commissioner of revenue shall prescribe the form of 193.26 the notice. 193.27 (c) The notice must inform taxpayers that it contains the 193.28 amount of property taxes each taxing authority proposes to 193.29 collect for taxes payable the following year. In the case of a 193.30 town,or in the case of the state determined portion of the193.31school district levy,the final tax amount will be its proposed 193.32 tax. In the case of taxing authorities required to hold a 193.33 public meeting under subdivision 6, the notice must clearly 193.34 state that each taxing authority, including regional library 193.35 districts established under section 134.201, and including the 193.36 metropolitan taxing districts as defined in paragraph (i), but 194.1 excluding all other special taxing districts and towns, will 194.2 hold a public meeting to receive public testimony on the 194.3 proposed budget and proposed or final property tax levy, or, in 194.4 case of a school district, on the current budget and proposed 194.5 property tax levy. It must clearly state the time and place of 194.6 each taxing authority's meeting, a phone number for the taxing 194.7 jurisdiction where taxpayers may call if they have questions 194.8 related to the notice, and an address where comments will be 194.9 received by mail. 194.10 (d) The notice must state for each parcel: 194.11 (1) the market value of the property as determined under 194.12 section 273.11, and used for computing property taxes payable in 194.13 the following year and for taxes payable in the current year as 194.14 each appears in the records of the county assessor on November 1 194.15 of the current year; and, in the case of residential property, 194.16 whether the property is classified as homestead or 194.17 nonhomestead. The notice must clearly inform taxpayers of the 194.18 years to which the market values apply and that the values are 194.19 final values; 194.20 (2) the items listed below, shown separately by county, 194.21 city or town, statedetermined schooltaxnet of the education194.22homestead creditunder section273.1382275.02, voter approved 194.23 school levy, other local school levy, and the sum of the special 194.24 taxing districts, and as a total of all taxing authorities: 194.25 (i) the actual tax for taxes payable in the current 194.26 year; and 194.27 (ii)the tax change due to spending factors, defined as the194.28proposed tax minus the constant spending tax amount;194.29(iii) the tax change due to other factors, defined as the194.30constant spending tax amount minus the actual current year tax;194.31and194.32(iv)the proposed tax amount net of credits. 194.33 In the case of a town or the statedetermined schooltax, 194.34 the final tax shall also be its proposed tax unless the town 194.35 changes its levy at a special town meeting under section 194.36 365.52. If a school district has certified under section 195.1 126C.17, subdivision 9, that a referendum will be held in the 195.2 school district at the November general election, the county 195.3 auditor must note next to the school district's proposed amount 195.4 that a referendum is pending and that, if approved by the 195.5 voters, the tax amount may be higher than shown on the notice. 195.6 In the case of the city of Minneapolis, the levy for the 195.7 Minneapolis library board and the levy for Minneapolis park and 195.8 recreation shall be listed separately from the remaining amount 195.9 of the city's levy. In the case of a parcel where tax increment 195.10 or the fiscal disparities areawide tax under chapter 276A or 195.11 473F applies, the proposed tax levy on the captured value or the 195.12 proposed tax levy on the tax capacity subject to the areawide 195.13 tax must each be stated separately and not included in the sum 195.14 of the special taxing districts; and 195.15 (3) the increase or decrease between the total taxes 195.16 payable in the current year and the total proposed taxes, 195.17 expressed as a percentage. 195.18 For purposes of this section, the amount of the tax on 195.19 homesteads qualifying under the senior citizens' property tax 195.20 deferral program under chapter 290B is the total amount of 195.21 property tax before subtraction of the deferred property tax 195.22 amount. 195.23 (e) The notice must clearly state that the proposed or 195.24 final taxes do not include the following: 195.25 (1) special assessments; 195.26 (2) levies approved by the voters after the date the 195.27 proposed taxes are certified, including bond referenda, school 195.28 district levy referenda, and levy limit increase referenda; 195.29 (3) amounts necessary to pay cleanup or other costs due to 195.30 a natural disaster occurring after the date the proposed taxes 195.31 are certified; 195.32 (4) amounts necessary to pay tort judgments against the 195.33 taxing authority that become final after the date the proposed 195.34 taxes are certified; and 195.35 (5) the contamination tax imposed on properties which 195.36 received market value reductions for contamination. 196.1 (f) Except as provided in subdivision 7, failure of the 196.2 county auditor to prepare or the county treasurer to deliver the 196.3 notice as required in this section does not invalidate the 196.4 proposed or final tax levy or the taxes payable pursuant to the 196.5 tax levy. 196.6 (g) If the notice the taxpayer receives under this section 196.7 lists the property as nonhomestead, and satisfactory 196.8 documentation is provided to the county assessor by the 196.9 applicable deadline, and the property qualifies for the 196.10 homestead classification in that assessment year, the assessor 196.11 shall reclassify the property to homestead for taxes payable in 196.12 the following year. 196.13 (h) In the case of class 4 residential property used as a 196.14 residence for lease or rental periods of 30 days or more, the 196.15 taxpayer must either: 196.16 (1) mail or deliver a copy of the notice of proposed 196.17 property taxes to each tenant, renter, or lessee; or 196.18 (2) post a copy of the notice in a conspicuous place on the 196.19 premises of the property. 196.20 The notice must be mailed or posted by the taxpayer by 196.21 November 27 or within three days of receipt of the notice, 196.22 whichever is later. A taxpayer may notify the county treasurer 196.23 of the address of the taxpayer, agent, caretaker, or manager of 196.24 the premises to which the notice must be mailed in order to 196.25 fulfill the requirements of this paragraph. 196.26 (i) For purposes of this subdivision, subdivisions 5a and 196.27 6, "metropolitan special taxing districts" means the following 196.28 taxing districts in the seven-county metropolitan area that levy 196.29 a property tax for any of the specified purposes listed below: 196.30 (1) metropolitan council under section 473.132, 473.167, 196.31 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 196.32 (2) metropolitan airports commission under section 473.667, 196.33 473.671, or 473.672; and 196.34 (3) metropolitan mosquito control commission under section 196.35 473.711. 196.36 For purposes of this section, any levies made by the 197.1 regional rail authorities in the county of Anoka, Carver, 197.2 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 197.3 398A shall be included with the appropriate county's levy and 197.4 shall be discussed at that county's public hearing. 197.5 (j) If a statutory or home rule charter city or a town has 197.6 exercised the local levy option provided by section 473.388, 197.7 subdivision 7, it may include in the notice of its proposed 197.8 taxes the amount of its proposed taxes attributable to its 197.9 exercise of the option. In the first year of the city or town's 197.10 exercise of this option, the statement shall include an estimate 197.11 of the reduction of the metropolitan council's tax on the parcel 197.12 due to exercise of that option. The metropolitan council's levy 197.13 shall be adjusted accordingly. 197.14[EFFECTIVE DATE.] This section is effective for notices of 197.15 proposed property taxes required in 2001 for taxes payable in 197.16 2002, and thereafter. 197.17 Sec. 35. Minnesota Statutes 2000, section 275.065, 197.18 subdivision 5a, is amended to read: 197.19 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 197.20 population of more than 2,500, county, a metropolitan special 197.21 taxing district as defined in subdivision 3, paragraph (i), a 197.22 regional library district established under section 134.201, or 197.23 school district shall advertise in a newspaper a notice of its 197.24 intent to adopt a budget and property tax levy or, in the case 197.25 of a school district, to review its current budget and proposed 197.26 property taxes payable in the following year, at a public 197.27 hearing, if a public hearing is required under subdivision 6. 197.28 The notice must be published not less than two business days nor 197.29 more than six business days before the hearing. 197.30 The advertisement must be at least one-eighth page in size 197.31 of a standard-size or a tabloid-size newspaper. The 197.32 advertisement must not be placed in the part of the newspaper 197.33 where legal notices and classified advertisements appear. The 197.34 advertisement must be published in an official newspaper of 197.35 general circulation in the taxing authority. The newspaper 197.36 selected must be one of general interest and readership in the 198.1 community, and not one of limited subject matter. The 198.2 advertisement must appear in a newspaper that is published at 198.3 least once per week. 198.4 For purposes of this section, the metropolitan special 198.5 taxing district's advertisement must only be published in the 198.6 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 198.7 (b) The advertisement for school districts, metropolitan 198.8 special taxing districts, and regional library districts must be 198.9 in the following form, except that the notice for a school 198.10 district may include references to the current budget in regard 198.11 to proposed property taxes. 198.12 "NOTICE OF 198.13 PROPOSED PROPERTY TAXES 198.14 (School District/Metropolitan 198.15 Special Taxing District/Regional 198.16 Library District) of ......... 198.17 The governing body of ........ will soon hold budget hearings 198.18 and vote on the property taxes for (metropolitan special taxing 198.19 district/regional library district services that will be 198.20 provided in (year)/school district services that will be 198.21 provided in (year) and (year)). 198.22 NOTICE OF PUBLIC HEARING: 198.23 All concerned citizens are invited to attend a public hearing 198.24 and express their opinions on the proposed (school 198.25 district/metropolitan special taxing district/regional library 198.26 district) budget and property taxes, or in the case of a school 198.27 district, its current budget and proposed property taxes, 198.28 payable in the following year. The hearing will be held on 198.29 (Month/Day/Year) at (Time) at (Location, Address)." 198.30 (c) The advertisement for cities and counties must be in 198.31 the following form. 198.32 "NOTICE OF PROPOSED 198.33 TOTAL BUDGET AND PROPERTY TAXES 198.34 The (city/county) governing body or board of commissioners will 198.35 hold a public hearing to discuss the budget and to vote on the 198.36 amount of property taxes to collect for services the 199.1 (city/county) will provide in (year). 199.2 199.3 SPENDING: The total budget amounts below compare 199.4 (city's/county's) (year) total actual budget with the amount the 199.5 (city/county) proposes to spend in (year). 199.6 199.7 (Year) Total Proposed (Year) Change from 199.8 Actual Budget Budget (Year)-(Year) 199.9 199.10 $....... $....... ...% 199.11 199.12 TAXES: The property tax amounts below compare that portion of 199.13 the current budget levied in property taxes in (city/county) for 199.14 (year) with the property taxes the (city/county) proposes to 199.15 collect in (year). 199.16 199.17 (Year) Property Proposed (Year) Change from 199.18 Taxes Property Taxes (Year)-(Year) 199.19 199.20 $....... $....... ...% 199.21 199.22 ATTEND THE PUBLIC HEARING 199.23 All (city/county) residents are invited to attend the public 199.24 hearing of the (city/county) to express your opinions on the 199.25 budget and the proposed amount of (year) property taxes. The 199.26 hearing will be held on: 199.27 (Month/Day/Year/Time) 199.28 (Location/Address) 199.29 If the discussion of the budget cannot be completed, a time and 199.30 place for continuing the discussion will be announced at the 199.31 hearing. You are also invited to send your written comments to: 199.32 (City/County) 199.33 (Location/Address)" 199.34 (d) For purposes of this subdivision, the budget amounts 199.35 listed on the advertisement mean: 199.36 (1) for cities, the total government fund expenditures, as 200.1 defined by the state auditor under section 471.6965, less any 200.2 expenditures for improvements or services that are specially 200.3 assessed or charged under chapter 429, 430, 435, or the 200.4 provisions of any other law or charter; and 200.5 (2) for counties, the total government fund expenditures, 200.6 as defined by the state auditor under section 375.169, less any 200.7 expenditures for direct payments to recipients or providers for 200.8 the human service aids listed below: 200.9 (i) Minnesota family investment program under chapters 256J 200.10 and 256K; 200.11 (ii) medical assistance under sections 256B.041, 200.12 subdivision 5, and 256B.19, subdivision 1; 200.13 (iii) general assistance medical care under section 200.14 256D.03, subdivision 6; 200.15 (iv) general assistance under section 256D.03, subdivision 200.16 2; 200.17 (v) emergency assistance under section 256J.48; 200.18 (vi) Minnesota supplemental aid under section 256D.36, 200.19 subdivision 1; 200.20 (vii) preadmission screening under section 256B.0911, and 200.21 alternative care grants under section 256B.0913; 200.22 (viii) general assistance medical care claims processing, 200.23 medical transportation and related costs under section 256D.03, 200.24 subdivision 4; 200.25 (ix) medical transportation and related costs under section 200.26 256B.0625, subdivisions 17 to 18a; 200.27 (x) group residential housing under section 256I.05, 200.28 subdivision 8, transferred from programs in clauses (iv) and 200.29 (vi); or 200.30 (xi) any successor programs to those listed in clauses (i) 200.31 to (x). 200.32 (e) A city with a population of over 500 but not more than 200.33 2,500 that is required to hold a public hearing under 200.34 subdivision 6 must advertise by posted notice as defined in 200.35 section 645.12, subdivision 1. The advertisement must be posted 200.36 at the time provided in paragraph (a). It must be in the form 201.1 required in paragraph (b). 201.2 (f) For purposes of this subdivision, the population of a 201.3 city is the most recent population as determined by the state 201.4 demographer under section 4A.02. 201.5 (g) The commissioner of revenue, subject to the approval of 201.6 the chairs of the house and senate tax committees, shall 201.7 prescribe the form and format of theadvertisement201.8 advertisements required under this subdivision. 201.9[EFFECTIVE DATE.] This section is effective for public 201.10 advertisements required in 2001 for taxes payable in 2002, and 201.11 thereafter. 201.12 Sec. 36. Minnesota Statutes 2000, section 275.065, 201.13 subdivision 6, is amended to read: 201.14 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 201.15 (a) For purposes of this section, the following terms shall have 201.16 the meanings given: 201.17 (1) "Initial hearing" means the first and primary hearing 201.18 held to discuss the taxing authority's proposed budget and 201.19 proposed property tax levy for taxes payable in the following 201.20 year, or, for school districts, the current budget and the 201.21 proposed property tax levy for taxes payable in the following 201.22 year. 201.23 (2) "Continuation hearing" means a hearing held to complete 201.24 the initial hearing, if the initial hearing is not completed on 201.25 its scheduled date. 201.26 (3) "Subsequent hearing" means the hearing held to adopt 201.27 the taxing authority's final property tax levy, and, in the case 201.28 of taxing authorities other than school districts, the final 201.29 budget, for taxes payable in the following year. 201.30 (b) Between November 29 and December 20, the governing 201.31 bodies of a city that has a population over 500, county, 201.32 metropolitan special taxing districts as defined in subdivision 201.33 3, paragraph (i), and regional library districts shall each hold 201.34 an initial public hearing to discuss and seek public comment on 201.35 its final budget and property tax levy for taxes payable in the 201.36 following year, and the governing body of the school district 202.1 shall hold an initial public hearing to review its current 202.2 budget and proposed property tax levy for taxes payable in the 202.3 following year. The metropolitan special taxing districts shall 202.4 be required to hold only a single joint initial public hearing, 202.5 the location of which will be determined by the affected 202.6 metropolitan agencies. A city, county, metropolitan special 202.7 taxing district as defined in subdivision 3, paragraph (i), 202.8 regional library district established under section 134.201, or 202.9 school district is not required to hold a public hearing under 202.10 this subdivision unless its proposed property tax levy for taxes 202.11 payable in the following year, as certified under subdivision 1, 202.12 has increased over its final property tax levy for taxes payable 202.13 in the current year by a percentage that is greater than the 202.14 percentage increase in the implicit price deflator for 202.15 government consumption expenditures and gross investment for 202.16 state and local governments prepared by the Bureau of Economic 202.17 Analysts of the United States Department of Commerce for the 202.18 12-month period ending March 31 of the current year. 202.19 (c) The initial hearing must be held after 5:00 p.m. if 202.20 scheduled on a day other than Saturday. No initial hearing may 202.21 be held on a Sunday. 202.22 (d) At the initial hearing under this subdivision, the 202.23 percentage increase in property taxes proposed by the taxing 202.24 authority, if any, and the specific purposes for which property 202.25 tax revenues are being increased must be discussed. During the 202.26 discussion, the governing body shall hear comments regarding a 202.27 proposed increase and explain the reasons for the proposed 202.28 increase. The public shall be allowed to speak and to ask 202.29 questions. At the public hearing, the school district must also 202.30 provide and discuss information on the distribution of its 202.31 revenues by revenue source, and the distribution of its spending 202.32 by program area. 202.33 (e) If the initial hearing is not completed on its 202.34 scheduled date, the taxing authority must announce, prior to 202.35 adjournment of the hearing, the date, time, and place for the 202.36 continuation of the hearing. The continuation hearing must be 203.1 held at least five business days but no more than 14 business 203.2 days after the initial hearing. A continuation hearing may not 203.3 be held later than December 20 except as provided in paragraphs 203.4 (f) and (g). A continuation hearing must be held after 5:00 203.5 p.m. if scheduled on a day other than Saturday. No continuation 203.6 hearing may be held on a Sunday. 203.7 (f) The governing body of a county shall hold its initial 203.8 hearing on the first Thursday in December each year, and may 203.9 hold additional initial hearings on other dates before December 203.10 20 if necessary for the convenience of county residents. If the 203.11 county needs a continuation of its hearing, the continuation 203.12 hearing shall be held on the third Tuesday in December. If the 203.13 third Tuesday in December falls on December 21, the county's 203.14 continuation hearing shall be held on Monday, December 20. 203.15 (g) The metropolitan special taxing districts shall hold a 203.16 joint initial public hearing on the first Wednesday of 203.17 December. A continuation hearing, if necessary, shall be held 203.18 on the second Wednesday of December even if that second 203.19 Wednesday is after December 10. 203.20 (h) The county auditor shall provide for the coordination 203.21 of initial and continuation hearing dates for all school 203.22 districts and cities within the county to prevent conflicts 203.23 under clauses (i) and (j). 203.24 (i) By August 10, each school board and the board of the 203.25 regional library district shall certify to the county auditors 203.26 of the counties in which the school district or regional library 203.27 district is located the dates on which it elects to hold its 203.28 initial hearing and any continuation hearing. If a school board 203.29 or regional library district does not certify these dates by 203.30 August 10, the auditor will assign the initial and continuation 203.31 hearing dates. The dates elected or assigned must not conflict 203.32 with the initial and continuation hearing dates of the county or 203.33 the metropolitan special taxing districts. 203.34 (j) By August 20, the county auditor shall notify the 203.35 clerks of the cities within the county of the dates on which 203.36 school districts and regional library districts have elected to 204.1 hold their initial and continuation hearings. At the time a 204.2 city certifies its proposed levy under subdivision 1 it shall 204.3 certify the dates on which it elects to hold its initial hearing 204.4 and any continuation hearing. Until September 15, the first and 204.5 second Mondays of December are reserved for the use of the 204.6 cities. If a city does not certify its hearing dates by 204.7 September 15, the auditor shall assign the initial and 204.8 continuation hearing dates. The dates elected or assigned for 204.9 the initial hearing must not conflict with the initial hearing 204.10 dates of the county, metropolitan special taxing districts, 204.11 regional library districts, or school districts within which the 204.12 city is located. To the extent possible, the dates of the 204.13 city's continuation hearing should not conflict with the 204.14 continuation hearing dates of the county, metropolitan special 204.15 taxing districts, regional library districts, or school 204.16 districts within which the city is located. This paragraph does 204.17 not apply to cities of 500 population or less. 204.18 (k) The county initial hearing date and the city, 204.19 metropolitan special taxing district, regional library district, 204.20 and school district initial hearing dates must be designated on 204.21 the notices required under subdivision 3. The continuation 204.22 hearing dates need not be stated on the notices. 204.23 (l) At a subsequent hearing, each county, school district, 204.24 city over 500 population, and metropolitan special taxing 204.25 district may amend its proposed property tax levy and must adopt 204.26 a final property tax levy. Each county, city over 500 204.27 population, and metropolitan special taxing district may also 204.28 amend its proposed budget and must adopt a final budget at the 204.29 subsequent hearing. The final property tax levy must be adopted 204.30 prior to adopting the final budget. A school district is not 204.31 required to adopt its final budget at the subsequent hearing. 204.32 The subsequent hearing of a taxing authority must be held on a 204.33 date subsequent to the date of the taxing authority's initial 204.34 public hearing. If a continuation hearing is held, the 204.35 subsequent hearing must be held either immediately following the 204.36 continuation hearing or on a date subsequent to the continuation 205.1 hearing. The subsequent hearing may be held at a regularly 205.2 scheduled board or council meeting or at a special meeting 205.3 scheduled for the purposes of the subsequent hearing. The 205.4 subsequent hearing of a taxing authority does not have to be 205.5 coordinated by the county auditor to prevent a conflict with an 205.6 initial hearing, a continuation hearing, or a subsequent hearing 205.7 of any other taxing authority. All subsequent hearings must be 205.8 held prior to five working days after December 20 of the levy 205.9 year. The date, time, and place of the subsequent hearing must 205.10 be announced at the initial public hearing or at the 205.11 continuation hearing. 205.12 (m) The property tax levy certified under section 275.07 by 205.13 a city of any population, county, metropolitan special taxing 205.14 district, regional library district, or school district must not 205.15 exceed the proposed levy determined under subdivision 1, except 205.16 by an amount up to the sum of the following amounts: 205.17 (1) the amount of a school district levy whose voters 205.18 approved a referendum to increase taxes under section 123B.63, 205.19 subdivision 3, or 126C.17, subdivision 9, after the proposed 205.20 levy was certified; 205.21 (2) the amount of a city or county levy approved by the 205.22 voters after the proposed levy was certified; 205.23 (3) the amount of a levy to pay principal and interest on 205.24 bonds approved by the voters under section 475.58 after the 205.25 proposed levy was certified; 205.26 (4) the amount of a levy to pay costs due to a natural 205.27 disaster occurring after the proposed levy was certified, if 205.28 that amount is approved by the commissioner of revenue under 205.29 subdivision 6a; 205.30 (5) the amount of a levy to pay tort judgments against a 205.31 taxing authority that become final after the proposed levy was 205.32 certified, if the amount is approved by the commissioner of 205.33 revenue under subdivision 6a; 205.34 (6) the amount of an increase in levy limits certified to 205.35 the taxing authority by the commissioner of children, families, 205.36 and learning or the commissioner of revenue after the proposed 206.1 levy was certified; and 206.2 (7) the amount required under section 126C.55. 206.3 (n) This subdivision does not apply to towns and special 206.4 taxing districts other than regional library districts and 206.5 metropolitan special taxing districts. 206.6 (o) Notwithstanding the requirements of this section, the 206.7 employer is required to meet and negotiate over employee 206.8 compensation as provided for in chapter 179A. 206.9[EFFECTIVE DATE.] This section is effective for hearings 206.10 required in 2001 for taxes payable in 2002 and thereafter. 206.11 Sec. 37. Minnesota Statutes 2000, section 275.066, is 206.12 amended to read: 206.13 275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 206.14 For the purposes of property taxation and property tax 206.15 state aids, the term "special taxing districts" includes the 206.16 following entities: 206.17 (1) watershed districts under chapter 103D; 206.18 (2) sanitary districts under sections 115.18 to 115.37; 206.19 (3) regional sanitary sewer districts under sections 115.61 206.20 to 115.67; 206.21 (4) regional public library districts under section 206.22 134.201; 206.23 (5) park districts under chapter 398; 206.24 (6) regional railroad authorities under chapter 398A; 206.25 (7) hospital districts under sections 447.31 to 447.38; 206.26 (8) St. Cloud metropolitan transit commission under 206.27 sections 458A.01 to 458A.15; 206.28 (9) Duluth transit authority under sections 458A.21 to 206.29 458A.37; 206.30 (10) regional development commissions under sections 206.31 462.381 to 462.398; 206.32 (11) housing and redevelopment authorities under sections 206.33 469.001 to 469.047; 206.34 (12) port authorities under sections 469.048 to 469.068; 206.35 (13) economic development authorities under sections 206.36 469.090 to 469.1081; 207.1 (14) metropolitan council under sections 473.123 to 207.2 473.549; 207.3 (15) metropolitan airports commission under sections 207.4 473.601 to 473.680; 207.5 (16) metropolitan mosquito control commission under 207.6 sections 473.701 to 473.716; 207.7 (17) Morrison county rural development financing authority 207.8 under Laws 1982, chapter 437, section 1; 207.9 (18) Croft Historical Park District under Laws 1984, 207.10 chapter 502, article 13, section 6; 207.11 (19) East Lake county medical clinic district under Laws 207.12 1989, chapter 211, sections 1 to 6; 207.13 (20) Floodwood area ambulance district under Laws 1993, 207.14 chapter 375, article 5, section 39; 207.15 (21) Middle Mississippi river watershed management 207.16 organization under sections 103B.211 and 103B.241;and207.17 (22) a county levying under the authority of section 207.18 103B.241, 103B.245, or 103B.251; 207.19 (23) emergency medical services special taxing districts 207.20 under section 144F.01; and 207.21 (24) any other political subdivision of the state of 207.22 Minnesota, excluding counties, school districts, cities, and 207.23 towns, that has the power to adopt and certify a property tax 207.24 levy to the county auditor, as determined by the commissioner of 207.25 revenue. 207.26[EFFECTIVE DATE.] This section is effective for taxes 207.27 levied in 2001, payable in 2002, and thereafter. 207.28 Sec. 38. Minnesota Statutes 2000, section 275.07, 207.29 subdivision 1, is amended to read: 207.30 Subdivision 1. [CERTIFICATION OF LEVY.] (a) Except as 207.31 provided under paragraph (b), the taxes voted by cities, 207.32 counties, school districts, and special districts shall be 207.33 certified by the proper authorities to the county auditor on or 207.34 before five working days after December 20 in each year. A town 207.35 must certify the levy adopted by the town board to the county 207.36 auditor by September 15 each year. If the town board modifies 208.1 the levy at a special town meeting after September 15, the town 208.2 board must recertify its levy to the county auditor on or before 208.3 five working days after December 20. The taxes certified shall 208.4 not be reduced by the county auditor by the aid received under 208.5 section 273.1398, subdivision 2, but shall be reduced by the 208.6 county auditor by the aid received under section 273.1398, 208.7 subdivision 3. If a city, town, county, school district, or 208.8 special district fails to certify its levy by that date, its 208.9 levy shall be the amount levied by it for the preceding year. 208.10 (b) The taxes voted by counties under section 103B.251 208.11 shall be separately certified by the county to the county 208.12 auditor on or before five working days after December 20 in each 208.13 year. The taxes certified shall not be reduced by the county 208.14 auditor by the aid received under section 273.1398, subdivision 208.15 2, but shall be reduced by the county auditor by the aid 208.16 received under section 273.1398, subdivision 3. If a county 208.17 fails to certify its levy by that date, its levy shall be the 208.18 amount levied by it for the preceding year. 208.19[EFFECTIVE DATE.] This section is effective for taxes 208.20 levied in 2001, payable in 2002, and thereafter. 208.21 Sec. 39. Minnesota Statutes 2000, section 281.17, is 208.22 amended to read: 208.23 281.17 [PERIOD FOR REDEMPTION.] 208.24 Except for properties for which the period of redemption 208.25 has been limited under sections 281.173 and 281.174, the 208.26 following periods for redemption apply. 208.27 The period of redemption for all lands sold to the state at 208.28 a tax judgment sale shall be three years from the date of sale 208.29 to the state of Minnesota if the land is within an incorporated 208.30 area unless it is: (a) nonagricultural homesteaded land as 208.31 defined in section 273.13, subdivision 22; (b) homesteaded 208.32 agricultural land as defined in section 273.13, subdivision 23, 208.33 paragraph (a); or (c) seasonal recreational land as defined in 208.34 section 273.13, subdivision 22, paragraph (c), or 25, paragraph 208.35(c)(d), clause(5)(1), for which the period of redemption is 208.36 five years from the date of sale to the state of Minnesota. 209.1 The period of redemption for homesteaded lands as defined 209.2 in section 273.13, subdivision 22, located in a targeted 209.3 neighborhood as defined in Laws 1987, chapter 386, article 6, 209.4 section 4, and sold to the state at a tax judgment sale is three 209.5 years from the date of sale. The period of redemption for all 209.6 lands located in a targeted neighborhood as defined in Laws 209.7 1987, chapter 386, article 6, section 4, except (1) homesteaded 209.8 lands as defined in section 273.13, subdivision 22, and (2) for 209.9 periods of redemption beginning after June 30, 1991, but before 209.10 July 1, 1996, lands located in the Loring Park targeted 209.11 neighborhood on which a notice of lis pendens has been served, 209.12 and sold to the state at a tax judgment sale is one year from 209.13 the date of sale. 209.14 The period of redemption for all real property constituting 209.15 a mixed municipal solid waste disposal facility that is a 209.16 qualified facility under section 115B.39, subdivision 1, is one 209.17 year from the date of the sale to the state of Minnesota. 209.18 The period of redemption for all other lands sold to the 209.19 state at a tax judgment sale shall be five years from the date 209.20 of sale, except that the period of redemption for nonhomesteaded 209.21 agricultural land as defined in section 273.13, subdivision 23, 209.22 paragraph (b), shall be two years from the date of sale if at 209.23 that time that property is owned by a person who owns one or 209.24 more parcels of property on which taxes are delinquent, and the 209.25 delinquent taxes are more than 25 percent of the prior year's 209.26 school district levy. 209.27 Sec. 40. Minnesota Statutes 2000, section 282.01, 209.28 subdivision 1, is amended to read: 209.29 Subdivision 1. [CLASSIFICATION AS CONSERVATION OR 209.30 NONCONSERVATION.] It is the general policy of this state to 209.31 encourage the best use of tax-forfeited lands, recognizing that 209.32 some lands in public ownership should be retained and managed 209.33 for public benefits while other lands should be returned to 209.34 private ownership. Parcels of land becoming the property of the 209.35 state in trust under law declaring the forfeiture of lands to 209.36 the state for taxes must be classified by the county board of 210.1 the county in which the parcels lie as conservation or 210.2 nonconservation. In making the classification the board shall 210.3 consider the present use of adjacent lands, the productivity of 210.4 the soil, the character of forest or other growth, accessibility 210.5 of lands to established roads, schools, and other public 210.6 services, their peculiar suitability or desirability for 210.7 particular uses and the suitability of the forest resources on 210.8 the land for multiple use, sustained yield management. The 210.9 classification, furthermore, must encourage and foster a mode of 210.10 land utilization that will facilitate the economical and 210.11 adequate provision of transportation, roads, water supply, 210.12 drainage, sanitation, education, and recreation; facilitate 210.13 reduction of governmental expenditures; conserve and develop the 210.14 natural resources; and foster and develop agriculture and other 210.15 industries in the districts and places best suited to them. 210.16 In making the classification the county board may use 210.17 information made available by any office or department of the 210.18 federal, state, or local governments, or by any other person or 210.19 agency possessing pertinent information at the time the 210.20 classification is made. The lands may be reclassified from time 210.21 to time as the county board considers necessary or desirable, 210.22 except for conservation lands held by the state free from any 210.23 trust in favor of any taxing district. 210.24 If the lands are located within the boundaries of an 210.25 organized town, with taxable valuation in excess of $20,000, or 210.26 incorporated municipality, the classification or 210.27 reclassification and sale must first be approved by the town 210.28 board of the town or the governing body of the municipality in 210.29 which the lands are located. The town board of the town or the 210.30 governing body of the municipality is considered to have 210.31 approved the classification or reclassification and sale if the 210.32 county board is not notified of the disapproval of the 210.33 classification or reclassification and sale within 60 days of 210.34 the date the request for approval was transmitted to the town 210.35 board of the town or governing body of the municipality. If the 210.36 town board or governing body desires to acquire any parcel lying 211.1 in the town or municipality by procedures authorized in this 211.2 section, it must file a written application with the county 211.3 board to withhold the parcel from public sale. The application 211.4 must be filed within 60 days of the request for classification 211.5 or reclassification and sale. The county board shall then 211.6 withhold the parcel from public sale for six months. A 211.7 municipality or governmental subdivision shall pay maintenance 211.8 costs incurred by the county during the six-month period while 211.9 the property is withheld from public sale, provided the property 211.10 is not offered for public sale after the six-month period. A 211.11 clerical error made by county officials does not serve to 211.12 eliminate the request of the town board or governing body if the 211.13 board or governing body has forwarded the application to the 211.14 county auditor. If the town board or governing body of the 211.15 municipality fails to submit an application and a resolution of 211.16 the board or governing body to acquire the property within the 211.17 withholding period, the county may offer the property for sale 211.18 upon the expiration of the withholding period. 211.19 Sec. 41. Minnesota Statutes 2000, section 282.241, is 211.20 amended to read: 211.21 282.241 [REPURCHASE AFTER FORFEITURE.] 211.22 Subdivision 1. [REPURCHASE REQUIREMENTS.] The owner at the 211.23 time of forfeiture, or the owner's heirs, devisees, or 211.24 representatives, or any person to whom the right to pay taxes 211.25 was given by statute, mortgage, or other agreement, may 211.26 repurchase any parcel of land claimed by the state to be 211.27 forfeited to the state for taxes unless before the time 211.28 repurchase is made the parcel is sold under installment 211.29 payments, or otherwise, by the state as provided by law, or is 211.30 under mineral prospecting permit or lease, or proceedings have 211.31 been commenced by the state or any of its political subdivisions 211.32 or by the United States to condemn the parcel of land. The 211.33 parcel of land may be repurchased for the sum of all delinquent 211.34 taxes and assessments computed under section 282.251, together 211.35 with penalties, interest, and costs, that accrued or would have 211.36 accrued if the parcel of land had not forfeited to the state. 212.1 Except for property which was homesteaded on the date of 212.2 forfeiture, repurchase is permitted during one year only from 212.3 the date of forfeiture, and in any case only after the adoption 212.4 of a resolution by the board of county commissioners determining 212.5 that by repurchase undue hardship or injustice resulting from 212.6 the forfeiture will be corrected, or that permitting the 212.7 repurchase will promote the use of the lands that will best 212.8 serve the public interest. If the county board has good cause 212.9 to believe that a repurchase installment payment plan for a 212.10 particular parcel is unnecessary and not in the public interest, 212.11 the county board may require as a condition of repurchase that 212.12 the entire repurchase price be paid at the time of repurchase. 212.13 A repurchase is subject to any easement, lease, or other 212.14 encumbrance granted by the state before the repurchase, and if 212.15 the land is located within a restricted area established by any 212.16 county under Laws 1939, chapter 340, the repurchase must not be 212.17 permitted unless the resolution approving the repurchase is 212.18 adopted by the unanimous vote of the board of county 212.19 commissioners. 212.20 The person seeking to repurchase under this section shall 212.21 pay all maintenance costs incurred by the county auditor during 212.22 the time the property was tax-forfeited. 212.23 Subd. 2. [ALTERNATIVE COMPUTATION OF REPURCHASE AMOUNT.] A 212.24 county board may by resolution establish an alternative method 212.25 of computing the repurchase amount under this subdivision for 212.26 property homesteaded at the time of forfeiture that has been in 212.27 forfeited status for more than ten years. Equivalent taxes, 212.28 penalties, interest, and costs for each year the property was in 212.29 forfeiture status must be computed using the simple average of 212.30 the assessor's estimated market value at forfeiture and the 212.31 assessor's current estimated market value multiplied by the 212.32 class rates under current law and applying the current tax, 212.33 penalty, and interest rates. Those amounts, plus any unpaid 212.34 special assessments reinstated and included in the purchase 212.35 price under section 282.251, including the penalties and 212.36 interest that accrued or would have accrued on the special 213.1 assessments, computed under current rates, are the repurchase 213.2 price. The county assessor shall determine the current market 213.3 value and classification of the property. 213.4 Sec. 42. [383A.76] [TAX-FORFEITED LANDS.] 213.5 Subdivision 1. [SALE; VALUATION.] Notwithstanding any 213.6 other law to the contrary, the Ramsey county board may sell 213.7 tax-forfeited lands in the county to an organized or 213.8 incorporated governmental subdivision of the state for any 213.9 public purpose for which the subdivision is authorized to 213.10 acquire property. Tax-forfeited land in the county may be 213.11 released from the trust in favor of the taxing districts on 213.12 application of a state agency for an authorized use at a value, 213.13 which may be less than its appraised value, as determined by the 213.14 county board. Factors that may be considered by the county 213.15 board in determining value for lands to be held by a 213.16 municipality for a permitted public purpose or redeveloped by an 213.17 authority established under chapter 469 include the projected 213.18 gap financing and public subsidy needed for a redevelopment 213.19 project, expected increases in property taxes, before and after 213.20 redevelopment appraised values, the potential use of the 213.21 property for affordable housing, environmental contamination and 213.22 pollution, site preparation and infrastructure costs, and any 213.23 other relevant factors. The commissioner of revenue may convey 213.24 by deed in the name of the state a tract of tax-forfeited land 213.25 held in trust in favor of the taxing districts to a governmental 213.26 subdivision for an authorized public use, if an application is 213.27 submitted to the commissioner. The application must include a 213.28 statement of facts as to the use to be made of the tract, the 213.29 need for it, and the recommendation of the county board. 213.30 Subd. 2. [USE OF LAND.] For lands located within Ramsey 213.31 county, the deed of conveyance of tax-forfeited land to an 213.32 organized or incorporated governmental subdivision of the state 213.33 for an authorized use must be on a form approved by the attorney 213.34 general and must be conditioned on continued use for the purpose 213.35 stated in the application. If the governing body of the 213.36 governmental subdivision determines by resolution after public 214.1 hearing that some other public use should be made of the lands, 214.2 the changed use may be made upon filing with the county recorder 214.3 or registrar of titles a certified copy of the resolution and 214.4 without conveying the lands back to the state and securing a new 214.5 conveyance for the new public use. Permitted public uses under 214.6 this section for a municipality include street, storm water 214.7 ponding, drainage, parks, watershed, wetlands, library, fire and 214.8 police stations, utility easements, and public facilities. 214.9 Permitted public uses under this section for an authority 214.10 established under chapter 469 include commercial or housing 214.11 redevelopment. A municipality may, upon payment to the county 214.12 of the value of the lands as determined by the county board in 214.13 subdivision 1, convey lands directly to an authority for the use 214.14 of the lands as a commercial or housing redevelopment project. 214.15[EFFECTIVE DATE.] This section is effective only after its 214.16 approval by a majority of the governing body of Ramsey county 214.17 and upon compliance with the provisions of Minnesota Statutes, 214.18 section 645.021, subdivision 3. 214.19 Sec. 43. Minnesota Statutes 2000, section 383B.79, is 214.20 amended by adding a subdivision to read: 214.21 Subd. 5. [FINANCING.] Hennepin county may appropriate 214.22 funds for any of the activities described in subdivision 1, 214.23 whether or not state funds are appropriated for the activity. 214.24 Hennepin county may include any part of the costs of a project 214.25 described in section 469.002, subdivision 12, in a capital 214.26 improvement plan adopted under section 373.40, and may issue 214.27 bonds for such purposes pursuant to and subject to the 214.28 procedures and limitations set forth in section 373.40, whether 214.29 or not the capital improvement to be financed is to be owned by 214.30 the county or any other governmental entity. Such purposes are 214.31 in addition to the capital improvements described in section 214.32 373.40, but shall not include light rail transit, commuter rail, 214.33 or any activity related to either of those, or a sports facility 214.34 building designed or used primarily for professional sports. 214.35 Sec. 44. Minnesota Statutes 2000, section 469.040, 214.36 subdivision 5, is amended to read: 215.1 Subd. 5. [DESIGNATED HOUSING CORPORATION.] Property 215.2 located within the exterior boundaries ofthe White Earthan 215.3 Indian reservation in the state that is owned by the tribe's 215.4 designated housing entity as defined in United States Code, 215.5 title 25, section 4103(21), and that is a housing project or a 215.6 housing development project, as defined in section 469.002, 215.7 subdivisions 13 and 15, is exempt from all real and personal 215.8 property taxes of the city, the county, the state, or any 215.9 political subdivision thereof, but the property is subject to 215.10 subdivision 3. A copy of those portions of the annual reports 215.11 submitted on behalf of the housing entity to the Secretary of 215.12 the United States Department of Housing and Urban Development 215.13 for the project that contain information sufficient to determine 215.14 the amount due under subdivision 3 satisfies the reporting 215.15 requirements of subdivision 3 for the project. 215.16[EFFECTIVE DATE.] This section is effective for taxes 215.17 levied in 2001, payable in 2002, and thereafter. 215.18 Sec. 45. Minnesota Statutes 2000, section 469.202, 215.19 subdivision 2, is amended to read: 215.20 Subd. 2. [ELIGIBILITY REQUIREMENTS FOR TARGETED 215.21 NEIGHBORHOODS.] An area within a city is eligible for 215.22 designation as a targeted neighborhood if the area meets two of 215.23 the following three criteria: 215.24 (a) The area had an unemployment rate that was twice the 215.25 unemployment rate for the Minneapolis and Saint Paul standard 215.26 metropolitan statistical area as determined by the1980most 215.27 recent federal decennial census. 215.28 (b) The median household income in the area was no more 215.29 than half the median household income for the Minneapolis and 215.30 Saint Paul standard metropolitan statistical area as determined 215.31 by the1980most recent federal decennial census. 215.32 (c) The area is characterized by residential dwelling units 215.33 in need of substantial rehabilitation. An area qualifies under 215.34 this paragraph if 25 percent or more of the residential dwelling 215.35 units are in substandard condition as determined by the city, or 215.36 if 70 percent or more of the residential dwelling units in the 216.1 area were built before 1940 as determined by the1980most 216.2 recent federal decennial census. 216.3 Sec. 46. Minnesota Statutes 2000, section 473.625, is 216.4 amended to read: 216.5 473.625 [DETACHING MAJOR AIRPORT LAND FROM CITY, SCHOOL216.6DISTRICT.] 216.7 (a) Lands constituting any major airport or a part thereof 216.8 now and which may hereafter be operated by any public 216.9 corporation organized under sections 473.601 to 473.679, and 216.10 embraced within any cityor school districtorganized under the 216.11 laws of the state, are hereby detached from such cityor school216.12district. 216.13 (b)(i) Except as provided in clause (ii), real and personal 216.14 property, including real and personal property otherwise taxable 216.15 under section 272.01, constituting all or part of an 216.16 intermediate airport operated by a public corporation organized 216.17 under sections 473.601 to 473.679 and embraced within a home 216.18 rule charter or statutory city or school district is exempt from 216.19 taxation by the city or school district. 216.20 (ii) The county assessor of the county where the property 216.21 under this paragraph is located shall determine the total market 216.22 value for all property at that site for assessment year 2001, 216.23 compare it to the market value of the property existing on that 216.24 site for the 1996 assessment, and report those market values to 216.25 the commission. If the total market value has not increased by 216.26 at least 20 percent, the property tax exemption under clause (i) 216.27 shall expire and the property shall be taxable beginning in 216.28 assessment year 2001 and thereafter, for taxes payable in 2002 216.29 and thereafter. The provisions of section 473.629 apply to 216.30 lands exempted from property tax under this paragraph. 216.31 (c) For the purposes of this section, an intermediate 216.32 airport is an airport that as of March 14, 1996, is a primary 216.33 reliever airport, provides general aviation services, has a 216.34 primary runway between 5,001 and 8,000 feet in length, and has 216.35 precision instrument capability. 216.36[EFFECTIVE DATE.] This section is effective for taxes 217.1 payable in 2002 and subsequent years. 217.2 Sec. 47. Laws 1992, chapter 499, article 7, section 31, as 217.3 amended by Laws 1998, chapter 398, article 1, section 39, Laws 217.4 1999, chapter 241, article 1, section 54, and Laws 2000, chapter 217.5 489, article 2, section 28, is amended to read: 217.6 Sec. 31. [REPEALER.] 217.7Minnesota Statutes 1990, sections 124A.02, subdivision 24;217.8124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3;217.9124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota217.10Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and217.1123; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i;217.12124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9;217.13124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision217.141; and 124A.29, subdivision 1, are repealed effective June 30,217.152004;Laws 1991, chapter 265, article 7, section 35, is repealed. 217.16[EFFECTIVE DATE.] This section is effective July 1, 2001. 217.17 Sec. 48. [CITY OF AFTON; EARLY TERMINATION OF AGRICULTURAL 217.18 PRESERVE.] 217.19 Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota 217.20 Statutes, sections 473H.08 and 473H.09, providing for the 217.21 duration and early termination of a metropolitan agricultural 217.22 preserve, the city of Afton may initiate expiration of a parcel 217.23 of land from an agricultural preserve for which the landowner on 217.24 April 18, 2000, has initiated expiration under Minnesota 217.25 Statutes, section 473H.08, subdivision 2, located in the city of 217.26 Afton, Washington county, and described as: 217.27 the Northeast Quarter of the Northeast Quarter of Section 217.28 29, Township 28 North, Range 20 West of the Fourth Principal 217.29 Meridian. 217.30 The effective date of the expiration may be on any date 217.31 after the effective date of this section as determined by the 217.32 Afton city council, once the council has otherwise complied with 217.33 the procedural requirements of Minnesota Statutes, sections 217.34 473H.04 and 473H.08. All benefits accruing to the parcel as an 217.35 agricultural preserve, including benefits relating to the 217.36 valuation and assessment of the parcel for ad valorem property 218.1 taxes under Minnesota Statutes, chapter 273, and section 218.2 473H.10, shall cease on the date of expiration. 218.3 Subd. 2. [ZONING CLASSIFICATION.] If the Afton city 218.4 council elects to exercise the authority provided by subdivision 218.5 1, it must continue the agriculture zoning classification for 218.6 the parcel, adopted by the Afton city council on June 20, 2000, 218.7 until April 18, 2008. 218.8[EFFECTIVE DATE.] This section is effective without local 218.9 approval on the day following final enactment. 218.10 Sec. 49. [ATTACHMENT.] 218.11 The territory comprising the Minneapolis-St. Paul 218.12 International Airport is hereby attached to special school 218.13 district No. 1, Minneapolis. 218.14[EFFECTIVE DATE.] This section is effective for taxes 218.15 payable in 2002 and subsequent years. 218.16 Sec. 50. [AIRPORT IMPACT MITIGATION FUND; ANNUAL 218.17 APPROPRIATION.] 218.18 The commissioner of children, families and learning shall 218.19 annually certify the state revenue impact resulting from (i) the 218.20 application of the statewide general education tax rate to 218.21 airport property under Minnesota Statutes, section 126C.13, 218.22 subdivision 1a, and (ii) other reductions in state education 218.23 aids resulting from the inclusion of airport property in school 218.24 district tax bases under sections 46 and 49. The amount 218.25 certified by the commissioner of children, families and learning 218.26 is annually appropriated from the general fund to the airport 218.27 impact mitigation fund created in article 12, section 39, each 218.28 fiscal year until termination of the fund beginning with fiscal 218.29 year 2003. Each year's appropriation is available until spent. 218.30 Sec. 51. [CHISAGO LAKES JOINT SEWAGE TREATMENT COMMISSION 218.31 BONDING AUTHORITY.] 218.32 Notwithstanding Minnesota Statutes, section 471.59, 218.33 subdivision 11, the Chisago Lakes joint sewage treatment 218.34 commission, a joint powers board established by the county of 218.35 Chisago, and the cities of Lindstrom, Chisago City, and Center 218.36 City, to own and operate wastewater treatment facilities for the 219.1 member local governments, may issue and sell general obligation 219.2 bonds pursuant to Minnesota Statutes, sections 115.46, 444.075, 219.3 and chapter 475, to acquire land for, construct, expand, 219.4 furnish, equip, and modify its wastewater treatment facilities, 219.5 and pledge the full faith and credit and taxing power of the 219.6 governmental units that are members of the joint powers board. 219.7 The joint powers board is a municipality within the meaning of 219.8 Minnesota Statutes, chapter 475. Each government unit that is a 219.9 member of the joint powers board must adopt a resolution 219.10 authorizing the joint powers board to issue and sell the bonds. 219.11[EFFECTIVE DATE.] This section is effective the day after 219.12 final enactment. 219.13 Sec. 52. [LAKES REGION EMS SERVICE CHARGES.] 219.14 Subdivision 1. [AUTHORIZATION.] The Lakes Region emergency 219.15 medical services district may charge and collect through the 219.16 county with county property taxes, an annual service charge of 219.17 $7 per unit for properties in the primary service area within 219.18 Chisago county and $3.50 per unit for properties in the 219.19 secondary service area within Chisago county according to the 219.20 schedule in subdivision 2 for emergency medical services 219.21 authorized as provided in subdivision 3. 219.22 Subd. 2. [EMS FEE SCHEDULE.] 219.23 (a) RESIDENTIAL PROPERTIES UNIT VALUE 219.24 (1) Agricultural with Dwelling 1.0 219.25 (2) Seasonal/Recreational 1.0 219.26 (3) Residential Homestead 1.0 219.27 (4) Residential Non-Homestead 1.0 for up to three 219.28 living units 219.29 1.0 for each additional 219.30 living unit 219.31 thereafter 219.32 (5) Mobile Homes 1.0 219.33 (b) COMMERCIAL PROPERTIES 219.34 (1) Up to $100,000 valuation 1.0 219.35 (2) $100,001 to $150,000 2.0 219.36 (3) $150,001 to $200,000 3.0 220.1 (4) $200,001 to $250,000 4.0 220.2 (5) $250,001 to $300,000 5.0 220.3 (6) $300,001 to $350,000 6.0 220.4 (7) $350,001 to $400,000 7.0 220.5 (8) $400,001 to $450,000 8.0 220.6 (9) $450,001 to $500,000 9.0 220.7 (10) $500,001 to $550,000 10.0 220.8 (11) $550,001 to $600,000 11.0 220.9 (12) Over $600,000 12.0 220.10 Subd. 3. [USE OF FEE PROCEEDS.] The proceeds of fees 220.11 charged and collected under this section must be used to support 220.12 the providing of out-of-hospital emergency medical services 220.13 including, but not limited to, first responder or rescue squads 220.14 recognized by the Lakes Region emergency medical services 220.15 district, ambulance services licensed under Minnesota Statutes, 220.16 chapter 144E, and recognized by the district, medical control 220.17 functions set out in Minnesota Statutes, chapter 144E, and 220.18 communications equipment and systems. 220.19 Subd. 4. [BOARD.] (a) The district is governed by a board 220.20 made up of the members of the governing bodies including town 220.21 boards of local governmental units in Chisago county, as follows: 220.22 (1) three members chosen by all of the cities in a manner 220.23 convenient to them that reflects geographic balance; and 220.24 (2) three members chosen by all of the town boards in a 220.25 manner convenient to them that reflects geographic balance. 220.26 (b) If the members are not selected as provided in 220.27 paragraph (a), clause (1) or (2), by September 1, 2001, the 220.28 county board must make the appointments from the governing 220.29 bodies of cities under paragraph (a), clause (1), or from the 220.30 governing bodies of town boards under paragraph (a), clause (2), 220.31 respectively, and, in either case, reflecting geographic balance. 220.32 (c) A representative from the county board chosen by the 220.33 county board must serve as the chair of the district board. 220.34 (d) All members of the district board serve a three-year 220.35 term. 220.36 (e) A vacancy on the district board must be filled as 221.1 provided for the initial appointment. If the vacancy is not 221.2 filled within 30 days by the initial appointing authority under 221.3 paragraph (a), clause (1) or (2), the county board must make the 221.4 appointment as provided in paragraph (b). 221.5 Subd. 5. [PROCEDURE.] The Chisago county board must charge 221.6 and collect, and disburse the fees authorized in this section in 221.7 the same manner authorized by ordinance for the charging, 221.8 collection, and disbursing of solid waste management fees within 221.9 the county. The county may proceed to collect unpaid fees under 221.10 this section in the same manner and extent, including interest 221.11 charges, as provided by ordinance for collection of unpaid solid 221.12 waste management fees. 221.13 Subd. 6. [ADMINISTRATIVE SHARE.] The county may retain up 221.14 to one percent of the fees collected under this section each 221.15 year for administration of the fee collection and disbursal. 221.16 Subd. 7. [SUNSET.] The fee authorized under this section 221.17 may be imposed in 2001 through 2003 and collected with property 221.18 taxes payable in 2002 through 2004 only. 221.19 Sec. 53. [CONVEYANCE OF TAX-FORFEITED LAND; DAKOTA 221.20 COUNTY.] 221.21 (a) If special school district No. 6 conveys the land 221.22 described in paragraph (c) to the state according to Minnesota 221.23 Statutes, section 282.01, subdivision 1d, then, notwithstanding 221.24 any other provision of Minnesota Statutes, chapter 282, the 221.25 commissioner of revenue shall reconvey the land described in 221.26 paragraph (c) to special school district No. 6 for no 221.27 consideration. 221.28 (b) The conveyance must be in a form approved by the 221.29 attorney general. Notwithstanding Minnesota Statutes, chapter 221.30 282, special school district No. 6 may use or sell the land for 221.31 other than a public use. Notwithstanding Minnesota Statutes, 221.32 chapter 282, the state shall not retain a reversionary interest 221.33 and shall convey the land free of the trust in favor of the 221.34 taxing district. 221.35 (c) The land to be conveyed is in the city of South St. 221.36 Paul, Dakota county, and is described as: 222.1 (1) Lots 4, 5, 6, and 7, Block 1, Lookout Park Addition; 222.2 (2) Lots 25 and 26, Block 1, Lookout Park Addition; 222.3 (3) Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block 222.4 2, Lookout Park Addition; 222.5 (4) Lots 1, 2, 3, 4, and 5, Block 1, Bryants First Addition 222.6 to the city of South St. Paul; and 222.7 (5) Lot 21, Block 1, Bryants First Addition to the city of 222.8 South St. Paul, together with that part of the vacated alley and 222.9 vacated Stanley Place accruing thereto. 222.10[EFFECTIVE DATE.] This section is effective the day 222.11 following final enactment. 222.12 Sec. 54. [RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT IN 222.13 LIEU OF TAXES.] 222.14 (a) The Red River watershed management board may spend 222.15 money from its general fund to compensate counties and townships 222.16 for lost tax revenue from land that becomes tax exempt after it 222.17 is acquired by the board or a member watershed district for 222.18 flood damage reduction project. A member watershed district of 222.19 the Red River management board may spend money from its 222.20 construction fund for the purposes described in this section. 222.21 (b) For the purposes of this section, "Red River watershed 222.22 management board" refers to the board established by Laws 1976, 222.23 chapter 162, section 1, as amended by Laws 1982, chapter 474, 222.24 section 1, Laws 1983, chapter 338, section 1, Laws 1989 First 222.25 Special Session chapter 1, article 5, section 45, Laws 1991, 222.26 chapter 167, section 1, and Laws 1998, chapter 389, article 3, 222.27 section 29. 222.28 Sec. 55. [REPORT ON ASSESSMENT PRACTICES AND MARKET 222.29 VALUES.] 222.30 The department of revenue must report to the legislature 222.31 each year by March 1, the following information on values and 222.32 assessment practices. The information should be provided by 222.33 major types of property on a statewide basis and at the most 222.34 disaggregate jurisdictional level that is useful and 222.35 appropriate. The information must include: 222.36 (1) recent market value trends and, to the extent possible, 223.1 projections of market value trends for up to five years; 223.2 (2) analysis of the effects of the limited market value 223.3 law; 223.4 (3) tax shift implications of market value trends and 223.5 limited market value; 223.6 (4) assessment quality indicators such as sales ratios and 223.7 coefficients of dispersion; 223.8 (5) to the extent possible, consideration should be given 223.9 to quality factors such as: 223.10 (i) number of sales; 223.11 (ii) time period; 223.12 (iii) geographical area; and 223.13 (iv) other; 223.14 (6) summary of state board orders; and 223.15 (7) percentage of parcels that change in value per year. 223.16 Sec. 56. [STUDY OF RELATIONSHIP BETWEEN ELECTRIC UTILITY 223.17 PERSONAL PROPERTY TAX EXEMPTION AND ENVIRONMENTAL IMPROVEMENTS.] 223.18 The department of revenue and the public utilities 223.19 commission shall jointly study the relationship between the 223.20 granting of a property tax exemption to electric utility 223.21 generating personal property and electric utilities' ability to 223.22 use state-of-the-art equipment and practices that would enhance 223.23 air quality and implement a program of placing powerlines 223.24 located near major rivers underground in order to facilitate 223.25 redevelopment and accommodate changing land use patterns. In 223.26 conducting the study, the department and the commission must 223.27 seek input from local governments, environmental stakeholders, 223.28 and users of major rivers, including those who use the river for 223.29 recreational and agricultural purposes. The results of the 223.30 study must be presented by January 15, 2002, in a report to the 223.31 committees of the legislature that have jurisdiction over taxes 223.32 and utility issues. 223.33 Sec. 57. [WYOMING TOWNSHIP; CITY OF CHISAGO CITY; 223.34 MUNICIPAL REIMBURSEMENT.] 223.35 Notwithstanding the limitation on duration or equality of 223.36 payment imposed under Minnesota Statutes, section 414.036, the 224.1 city of Chisago City may provide reimbursement for orderly 224.2 annexed property to the town of Wyoming for a period and in such 224.3 amounts agreed to by the city and the town under a joint powers 224.4 agreement entered into for the purposes of establishing a joint 224.5 commercial and business park in the annexed area as described in 224.6 section 2. 224.7[EFFECTIVE DATE.] This section is effective July 1, 2002. 224.8 Sec. 58. [FORGIVENESS OF PENALTY AND INTEREST.] 224.9 If the owner of record of property located in St. Louis 224.10 county that has parcel number 060-0030-03840 enters into an 224.11 agreement with the county by May 31, 2001, to make installment 224.12 payments over a ten-year period of the amount of taxes and 224.13 special assessments due on the property for the 1997 payable 224.14 year and the owner makes the payments required under the 224.15 agreement when due, the amount of penalties, interest, and 224.16 related fees due as of May 31, 2001, with respect to the 224.17 delinquent taxes will not be required to be paid. 224.18 Sec. 59. [RENEWAL OF RULEMAKING AUTHORITY.] 224.19 Notwithstanding Minnesota Statutes, section 14.125, the 224.20 Minnesota housing finance agency may adopt administrative rules 224.21 under Minnesota Statutes, chapter 14, to carry out the 224.22 provisions of Minnesota Statutes, section 462A.071, and 224.23 determinations made under Minnesota Statutes, section 462A.071, 224.24 subdivision 11, paragraph (b), are valid until January 1, 2003. 224.25[EFFECTIVE DATE.] This section is effective the day 224.26 following final enactment. 224.27 Sec. 60. [REPEALER.] 224.28 (a) Minnesota Statutes 2000, sections 126C.30; 126C.31; 224.29 126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed. 224.30[EFFECTIVE DATE.] This paragraph is effective July 1, 2001. 224.31 (b) Minnesota Statutes 2000, sections 272.02, subdivision 224.32 22, and 273.37, subdivision 3, are repealed. 224.33[EFFECTIVE DATE.] This paragraph is effective for the 2001 224.34 assessment for taxes payable in 2002 and thereafter. 224.35 (c) Minnesota Statutes 2000, sections 270.31; 270.32; 224.36 270.33; 270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are 225.1 repealed. 225.2[EFFECTIVE DATE.] This paragraph is effective for taxes 225.3 levied in 2002, payable in 2003, and thereafter. 225.4 (d) Minnesota Statutes 2000, section 373.40, subdivision 7, 225.5 is repealed. 225.6 ARTICLE 9 225.7 PROPERTY TAX REFUND 225.8 Section 1. Minnesota Statutes 2000, section 290A.03, 225.9 subdivision 11, is amended to read: 225.10 Subd. 11. [RENT CONSTITUTING PROPERTY TAXES.] "Rent 225.11 constituting property taxes" means1920 percent of the gross 225.12 rent actually paid in cash, or its equivalent, or the portion of 225.13 rent paid in lieu of property taxes, in any calendar year by a 225.14 claimant for the right of occupancy of the claimant's Minnesota 225.15 homestead in the calendar year, and which rent constitutes the 225.16 basis, in the succeeding calendar year of a claim for relief 225.17 under this chapter by the claimant. 225.18 Sec. 2. Minnesota Statutes 2000, section 290A.03, 225.19 subdivision 13, is amended to read: 225.20 Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes 225.21 payable" means the property tax exclusive of special 225.22 assessments, penalties, and interest payable on a claimant's 225.23 homestead after deductions made under sections 273.135, 225.24 273.1382, 273.1391, 273.42, subdivision 2, and any other state 225.25 paid property tax credits in any calendar year. In the case of 225.26 a claimant who makes ground lease payments, "property taxes 225.27 payable" includes the amount of the payments directly 225.28 attributable to the property taxes assessed against the parcel 225.29 on which the house is located. No apportionment or reduction of 225.30 the "property taxes payable" shall be required for the use of a 225.31 portion of the claimant's homestead for a business purpose if 225.32 the claimant does not deduct any business depreciation expenses 225.33 for the use of a portion of the homestead in the determination 225.34 of federal adjusted gross income. For homesteads which are 225.35 manufactured homes as defined in section 273.125, subdivision 8, 225.36 and for homesteads which are park trailers taxed as manufactured 226.1 homes under section 168.012, subdivision 9, "property taxes 226.2 payable" shall also include1920 percent of the gross rent paid 226.3 in the preceding year for the site on which the homestead is 226.4 located. When a homestead is owned by two or more persons as 226.5 joint tenants or tenants in common, such tenants shall determine 226.6 between them which tenant may claim the property taxes payable 226.7 on the homestead. If they are unable to agree, the matter shall 226.8 be referred to the commissioner of revenue whose decision shall 226.9 be final. Property taxes are considered payable in the year 226.10 prescribed by law for payment of the taxes. 226.11 In the case of a claim relating to "property taxes 226.12 payable," the claimant must have owned and occupied the 226.13 homestead on January 2 of the year in which the tax is payable 226.14 and (i) the property must have been classified as homestead 226.15 property pursuant to section 273.124, on or before December 15 226.16 of the assessment year to which the "property taxes payable" 226.17 relate; or (ii) the claimant must provide documentation from the 226.18 local assessor that application for homestead classification has 226.19 been made on or before December 15 of the year in which the 226.20 "property taxes payable" were payable and that the assessor has 226.21 approved the application. 226.22[EFFECTIVE DATE.] This section is effective beginning with 226.23 refunds based on rent paid in calendar year 2001. 226.24 Sec. 3. Minnesota Statutes 2000, section 290A.04, 226.25 subdivision 2, is amended to read: 226.26 Subd. 2. [HOMEOWNERS.] A claimant whose property taxes 226.27 payable are in excess of the percentage of the household income 226.28 stated below shall pay an amount equal to the percent of income 226.29 shown for the appropriate household income level along with the 226.30 percent to be paid by the claimant of the remaining amount of 226.31 property taxes payable. The state refund equals the amount of 226.32 property taxes payable that remain, up to the state refund 226.33 amount shown below. 226.34 Percent Percent Maximum 226.35 Household Income of Income Paid by State 226.36 Claimant Refund 226.37$0 to 1,029226.38 $0 to 1,189 1.2 percent 18 percent$440$1,190 227.11,030 to 2,059227.2 1,190 to 2,389 1.3 percent 18 percent$440$1,190 227.32,060 to 3,099227.4 2,390 to 3,589 1.4 percent 20 percent$440$1,190 227.53,100 to 4,129227.6 3,590 to 4,779 1.6 percent 20 percent$440$1,190 227.74,130 to 5,159227.8 4,780 to 5,969 1.7 percent 20 percent$440$1,190 227.95,160 to 7,229227.10 5,970 to 8,369 1.9 percent 25 percent$440$1,190 227.117,230 to 8,259227.12 8,370 to 9,559 2.1 percent 25 percent$440$1,190 227.138,260 to 9,289227.14 9,560 to 10,759 2.2 percent 25 percent$440$1,190 227.159,290 to 10,319227.16 10,760 to 11,949 2.3 percent 30 percent$440$1,190 227.1710,320 to 11,349227.18 11,950 to 13,139 2.4 percent 30 percent$440$1,190 227.1911,350 to 12,389227.20 13,140 to 14,349 2.5 percent 30 percent$440$1,190 227.2112,390 to 14,449227.22 14,350 to 16,729 2.6 percent 30 percent$440$1,190 227.2314,450 to 15,479227.24 16,730 to 17,919 2.8 percent 35 percent$440$1,190 227.2515,480 to 16,509227.26 17,920 to 19,119 3.0 percent 35 percent$440$1,190 227.2716,510 to 17,549227.28 19,120 to 20,319 3.2 percent 40 percent$440$1,190 227.2917,550 to 21,669227.30 20,320 to 25,089 3.3 percent 40 percent$440$1,190 227.3121,670 to 24,769227.32 25,090 to 28,679 3.4 percent 45 percent$440$1,190 227.3324,770 to 30,959227.34 28,680 to 41,819 3.5 percent 45 percent$440$1,190 227.3530,960 to 36,1193.5 percent45 percent$440227.3636,120 to 41,279227.37 41,820 to 47,789 3.7 percent 50 percent$440$1,190 227.3841,280 to 58,829227.39 47,790 to 63,329 4.0 percent 50 percent$440$1,190 227.40 63,330 to 64,519 4.0 percent 50 percent $1,080 227.41 64,520 to 65,719 4.0 percent 50 percent $ 960 227.42 65,720 to 66,909 4.0 percent 50 percent $ 830 227.43 66,910 to 68,109 4.0 percent 50 percent $ 720 227.4458,830 to 59,859227.45 68,110 to 69,309 4.0 percent 50 percent$310$600 227.4659,860 to 60,889227.47 69,310 to 70,499 4.0 percent 50 percent$210$360 227.4860,890 to 61,929227.49 70,500 to 71,699 4.0 percent 50 percent$100$120 227.50 The payment made to a claimant shall be the amount of the 227.51 state refund calculated under this subdivision. No payment is 227.52 allowed if the claimant's household income is$61,930$71,700 or 227.53 more. 227.54[EFFECTIVE DATE.] This section is effective beginning with 227.55 refunds based on property taxes payable in 2002. 227.56 Sec. 4. Minnesota Statutes 2000, section 290A.04, 227.57 subdivision 4, is amended to read: 227.58 Subd. 4. [INFLATION ADJUSTMENT.] Beginning for property 227.59 tax refunds payable in calendar year19962002, the commissioner 227.60 shall annually adjust the dollar amounts of the income 228.1 thresholds and the maximum refunds under subdivisions 2 and 2a 228.2 for inflation. The commissioner shall make the inflation 228.3 adjustments in accordance with section290.06, subdivision 2d1f 228.4 of the Internal Revenue Code, except that for purposes of this 228.5 subdivision the percentage increase shall be determined from the 228.6 year ending on June 30,19942000, to the year ending on June 30 228.7 of the year preceding that in which the refund is payable. The 228.8 commissioner shall use the appropriate percentage increase to 228.9 annually adjust the income thresholds and maximum refunds under 228.10 subdivisions 2 and 2a for inflation without regard to whether or 228.11 not the income tax brackets are adjusted for inflation in that 228.12 year. The commissioner shall round the thresholds and the 228.13 maximum amounts, as adjusted to the nearest $10 amount. If the 228.14 amount ends in $5, the commissioner shall round it up to the 228.15 next $10 amount. 228.16 The commissioner shall annually announce the adjusted 228.17 refund schedule at the same time provided under section 290.06. 228.18 The determination of the commissioner under this subdivision is 228.19 not a rule under the Administrative Procedure Act. 228.20[EFFECTIVE DATE.] This section is effective the day 228.21 following final enactment. 228.22 Sec. 5. [REPEALER.] 228.23 Minnesota Statutes 2000, section 290A.04, subdivision 2j, 228.24 is repealed. 228.25 ARTICLE 10 228.26 LOCAL GOVERNMENT AID; PAYMENTS IN LIEU OF TAXES 228.27 Section 1. Minnesota Statutes 2000, section 273.1398, is 228.28 amended by adding a subdivision to read: 228.29 Subd. 4b. [AID ADJUSTMENT FOR 2002 CITY LOCAL GOVERNMENT 228.30 AID CHANGES.] Payments to a city under subdivision 2 or section 228.31 273.166 for calendar year 2002 are equal to (1) payments under 228.32 those sections in calendar year 2001 minus (2) the difference 228.33 between the amount the city is certified to receive in aid under 228.34 sections 477A.011 to 477A.014 in calendar year 2002 and what the 228.35 city would have received in calendar year 2002 under the formula 228.36 in Minnesota Statutes 2000, sections 477A.011 to 477A.014. The 229.1 amount of HACA remaining after the offset may not be less than 229.2 zero. 229.3[EFFECTIVE DATE.] This section is effective for aids 229.4 payable in calendar year 2002. 229.5 Sec. 2. Minnesota Statutes 2000, section 273.1398, is 229.6 amended by adding a subdivision to read: 229.7 Subd. 4c. [ADJUSTMENT FOR LOW-INCOME HOUSING 229.8 AID.] Payments to a city under subdivision 2 or section 273.166 229.9 for calendar year 2004 are permanently increased by the amount 229.10 certified to be paid to it in 2003 under section 477A.06. 229.11[EFFECTIVE DATE.] This section is effective for aids 229.12 payable in calendar year 2004. 229.13 Sec. 3. Minnesota Statutes 2000, section 273.1398, is 229.14 amended by adding a subdivision to read: 229.15 Subd. 4d. [ADJUSTMENT FOR SELECTED CITIES.] Payments to a 229.16 city under subdivision 2 or section 273.166 shall be decreased 229.17 by $450,000 in calendar year 2009 if the city had an increased 229.18 city aid base for local government aid purposes in 2001 under 229.19 section 477A.011, subdivision 36, paragraph (f). 229.20 Sec. 4. Minnesota Statutes 2000, section 477A.011, 229.21 subdivision 27, is amended to read: 229.22 Subd. 27. [REVENUE BASE.] "Revenue base" means the amount 229.23 levied for taxes payable in the previous year, including the 229.24 levy on the fiscal disparity distribution under section 276A.06, 229.25 subdivision 3, paragraph (a), or 473F.08, subdivision 3, 229.26 paragraph (a), and before reduction forthe homestead and229.27agricultural credit aid under section 273.1398, subdivision 2,229.28equalization aid under section 477A.013, subdivision 5, and229.29 disparity reduction aid under section 273.1398, subdivision 3; 229.30 plus the originally certified local government aid in the 229.31 previous year under sections 477A.011 and 477A.013; the 229.32 homestead and agricultural credit aid in the previous year under 229.33 section 273.1398, subdivision 2; and the taconite aids received 229.34 in the previous year under sections 298.28 and 298.282. 229.35[EFFECTIVE DATE.] This section is effective for aids 229.36 payable in calendar year 2002 and thereafter. 230.1 Sec. 5. Minnesota Statutes 2000, section 477A.011, is 230.2 amended by adding a subdivision to read: 230.3 Subd. 27a. [REVENUE BASE PER CAPITA.] "Revenue base per 230.4 capita" means a city's revenue base divided by the city's 230.5 population for two calendar years prior to the payable year of 230.6 the aids and levies used in calculating the revenue base. 230.7[EFFECTIVE DATE.] This section is effective for aids 230.8 payable in calendar year 2002 and thereafter. 230.9 Sec. 6. Minnesota Statutes 2000, section 477A.011, is 230.10 amending by adding a subdivision to read: 230.11 Subd. 27b. [AVERAGE SMALL CITY PER CAPITA REVENUE 230.12 BASE.] "Average small city per capita revenue base" means the 230.13 sum of the revenue base per capita for all cities with a 230.14 population of less than 2,500 divided by the number of cities 230.15 with a population less than 2,500. 230.16[EFFECTIVE DATE.] This section is effective for aids 230.17 payable in calendar year 2002 and thereafter. 230.18 Sec. 7. Minnesota Statutes 2000, section 477A.011, 230.19 subdivision 34, is amended to read: 230.20 Subd. 34. [PER CAPITA CITY REVENUE NEED.] (a) For a city 230.21 with a population equal to or greater than 2,500, "per capita 230.22 city revenue need" is the sum of (1)3.4623125.57535 times the 230.23 pre-1940 housing percentage; plus (2)2.0938262.72775 times the 230.24 commercial industrial percentage; plus (3)6.86255216.44686 230.25 times the population decline percentage; plus (4).00026 times230.26the city population; plus (5) 152.0141189.103. 230.27 (b) For a city with a population less than 2,500,"city230.28revenue need" is the sum of (1) 1.795919 times the pre-1940230.29housing percentage; plus (2) 1.562138 times the commercial230.30industrial percentage; plus (3) 4.177568 times the population230.31decline percentage; plus (4) 1.04013 times the transformed230.32population; minus (5) 107.475"per capita city revenue need" is 230.33 equal to the lesser of (1) the sum of the city's revenue base 230.34 per capita for the four most recently available calendar years 230.35 divided by four, or (2) the average small city per capita 230.36 revenue base plus two-thirds of the amount of that city's 231.1 average revenue base per capita for the last four years that 231.2 exceeds the average small city per capita revenue base. 231.3(c) The city revenue need cannot be less than zero.231.4(d) For calendar year 1998 and subsequent years, the city231.5revenue need for a city, as determined in paragraphs (a) to (c),231.6is multiplied by the ratio of the annual implicit price deflator231.7for government consumption expenditures and gross investment for231.8state and local governments as prepared by the United States231.9Department of Commerce, for the most recently available year to231.10the 1993 implicit price deflator for state and local government231.11purchases.231.12[EFFECTIVE DATE.] This section is effective for aids 231.13 payable in calendar year 2002 and thereafter. 231.14 Sec. 8. Minnesota Statutes 2000, section 477A.013, 231.15 subdivision 8, is amended to read: 231.16 Subd. 8. [CITY FORMULA AID.] In calendar year19942002 231.17 and subsequent years, the formula aid for a city is equal to the 231.18 need increase percentage multiplied by the difference between 231.19 (1) the per capita city's revenue need multiplied by its 231.20 population, and (2) 25 percent of the city's net tax capacity 231.21multiplied by the tax effort rate. No city may have a formula 231.22 aid amount less thanzero$25 per capita. The need increase 231.23 percentage must be the same for all cities. 231.24Notwithstanding the prior sentence, in 1995 only, the need231.25increase percentage for a city shall be twice the need increase231.26percentage applicable to other cities if:231.27(1) the city, in 1992 or 1993, transferred an amount from231.28governmental funds to their sewer and water fund, and231.29(2) the amount transferred exceeded their net levy for231.30taxes payable in the year in which the transfer occurred.231.31 The applicable need increase percentage or percentages must 231.32 be calculated by the department of revenue so that the total of 231.33 the aid under subdivision 9 equals the total amount available 231.34 for aid under section 477A.03. 231.35[EFFECTIVE DATE.] This section is effective for aids 231.36 payable in calendar year 2002 and thereafter. 232.1 Sec. 9. Minnesota Statutes 2000, section 477A.013, 232.2 subdivision 9, is amended to read: 232.3 Subd. 9. [CITY AID DISTRIBUTION.](a)In calendar year 232.41994 and thereafter, each city shall receive an aid distribution232.5equal to the sum of (1) the city formula aid under subdivision232.68, and (2) its city aid base2002 and thereafter, each city 232.7 shall receive an aid distribution equal to its formula aid under 232.8 subdivision 8. 232.9(b) The percentage increase for a first class city in232.10calendar year 1995 and thereafter shall not exceed the232.11percentage increase in the sum of the aid to all cities under232.12this section in the current calendar year compared to the sum of232.13the aid to all cities in the previous year.232.14(c) The total aid for any city, except a first class city,232.15shall not exceed the sum of (1) ten percent of the city's net232.16levy for the year prior to the aid distribution plus (2) its232.17total aid in the previous year before any increases or decreases232.18under sections 16A.711, subdivision 5, and 477A.0132.232.19(d) Notwithstanding paragraph (c), in 1995 only, for cities232.20which in 1992 or 1993 transferred an amount from governmental232.21funds to their sewer and water fund in an amount greater than232.22their net levy for taxes payable in the year in which the232.23transfer occurred, the total aid shall not exceed the sum of (1)232.2420 percent of the city's net levy for the year prior to the aid232.25distribution plus (2) its total aid in the previous year before232.26any increases or decreases under sections 16A.711, subdivision232.275, and 477A.0132. 232.28[EFFECTIVE DATE.] This section is effective for aids 232.29 payable in calendar year 2002 and thereafter. 232.30 Sec. 10. Minnesota Statutes 2000, section 477A.03, 232.31 subdivision 2, is amended to read: 232.32 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 232.33 discharge the duties imposed by sections 477A.011 to 477A.014 is 232.34 annually appropriated from the general fund to the commissioner 232.35 of revenue. 232.36 (b) Aid payments to counties under section 477A.0121 are 233.1 limited to $20,265,000 in 1996. Aid payments to counties under 233.2 section 477A.0121 are limited to $27,571,625 in 1997. For aid 233.3 payable in 1998 and thereafter, the total aids paid under 233.4 section 477A.0121 are the amounts certified to be paid in the 233.5 previous year, adjusted for inflation as provided under 233.6 subdivision 3. 233.7 (c)(i) For aids payable in 1998 and thereafter, the total 233.8 aids paid to counties under section 477A.0122 are the amounts 233.9 certified to be paid in the previous year, adjusted for 233.10 inflation as provided under subdivision 3. 233.11 (ii) Aid payments to counties under section 477A.0122 in 233.12 2000 are further increased by an additional $20,000,000 in 2000. 233.13 (d) Aid payments to cities in 1999 under section 477A.013, 233.14 subdivision 9, are limited to $380,565,489. For aids payable in 233.15 2000, the total aids paid under section 477A.013, subdivision 9, 233.16 are the amounts certified to be paid in the previous year, 233.17 adjusted for inflation as provided in subdivision 3, and 233.18 increased by the amount necessary to effectuate Laws 1999, 233.19 chapter 243, article 5, section 48, paragraph (b). For aids 233.20 payable in 2001through 2003, the total aids paid under section 233.21 477A.013, subdivision 9, are the amounts certified to be paid in 233.22 the previous year, adjustedfor inflationas provided under 233.23 subdivision 3. For aids payable in20042002, the total aids 233.24 paid under section 477A.013, subdivision 9, arethe amounts233.25certified to be paid in the previous year, adjusted for233.26inflation as provided under subdivision 3, and increased by the233.27amount certified to be paid in 2003 under section233.28477A.06limited to $590,000,000. For aids payable in20052003 233.29 and thereafter, the total aids paid under section 477A.013, 233.30 subdivision 9, are the amounts certified to be paid in the 233.31 previous year, adjusted for inflation as provided under 233.32 subdivision 3 and by the household adjustment factor for all 233.33 cities in the state as defined in section 273.1398.The233.34additional amount authorized under subdivision 4 is not included233.35when calculating the appropriation limits under this paragraph.233.36[EFFECTIVE DATE.] This section is effective for aids 234.1 payable in calendar year 2002 and thereafter. 234.2 Sec. 11. Minnesota Statutes 2000, section 477A.11, 234.3 subdivision 3, is amended to read: 234.4 Subd. 3. [ACQUIRED NATURAL RESOURCES LAND.] "Acquired 234.5 natural resources land" means: 234.6 (1) any land presently administered by the commissioner in 234.7 which the state acquired by purchase, condemnation, or gift, a 234.8 fee title interest in lands which were previously privately 234.9 owned;and234.10 (2) lands acquired by the state under chapter 84A that are 234.11 designated as state parks, state recreation areas, scientific 234.12 and natural areas, or wildlife management areas; and 234.13 (3) land leased or acquired by the state from the United 234.14 States of America through the United States Secretary of 234.15 Agriculture pursuant to Title III of the Bankhead Jones Farm 234.16 Tenant Act, which land is commonly referred to as land 234.17 utilization project land that is administered by the 234.18 commissioner. 234.19[EFFECTIVE DATE.] This section is effective for payments 234.20 made in 2002 and thereafter. 234.21 Sec. 12. Minnesota Statutes 2000, section 477A.11, 234.22 subdivision 4, is amended to read: 234.23 Subd. 4. [OTHER NATURAL RESOURCES LAND.] "Other natural 234.24 resources land" means: (1)any other land presently owned in 234.25 fee title by the state and administered by the commissioner, or 234.26 any tax-forfeited land, other than platted lots within a city or 234.27 those lands described under subdivision 3, clause (2), which is 234.28 owned by the state and administered by the commissioner or by 234.29 the county in which it is located; and (2) land leased by the234.30state from the United States of America through the United234.31States Secretary of Agriculture pursuant to Title III of the234.32Bankhead Jones Farm Tenant Act, which land is commonly referred234.33to as land utilization project land that is administered by the234.34commissioner. 234.35[EFFECTIVE DATE.] This section is effective for payments 234.36 made in 2002 and thereafter. 235.1 Sec. 13. Minnesota Statutes 2000, section 477A.12, is 235.2 amended to read: 235.3 477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; 235.4 CERTIFICATION OF ACREAGE.] 235.5 Subdivision 1. [TYPES OF LAND; PAYMENTS.] (a) As an offset 235.6 for expenses incurred by counties and towns in support of 235.7 natural resources lands, the following amounts are annually 235.8 appropriated to the commissioner of natural resources from the 235.9 general fund for transfer to the commissioner of revenue. The 235.10 commissioner of revenue shall pay the transferred funds to 235.11 counties as required by sections 477A.11 to 477A.145. The 235.12 amounts are: 235.13 (1) for acquired natural resources land, $3, as adjusted 235.14 for inflation under section 477A.145, multiplied by the total 235.15 number of acres of acquired natural resources land or, at the 235.16 county's option three-fourths of one percent of the appraised 235.17 value of all acquired natural resources land in the county, 235.18 whichever is greater; 235.19 (2) 75 cents, as adjusted for inflation under section 235.20 477A.145, multiplied by the number of acres of 235.21 county-administered other natural resources land; and 235.22 (3) 37.5 cents, as adjusted for inflation under section 235.23 477A.145, multiplied by the number of acres of 235.24 commissioner-administered other natural resources land located 235.25 in each county as of July 1 of each year prior to the payment 235.26 year. 235.27 (b) The amount determined under paragraph (a), clause (1), 235.28 is payable for land that is acquired from a private owner by the 235.29 department of transportation for the purpose of replacing 235.30 wetland losses caused by transportation projects, but only if 235.31 the county contains more than 500 acres of such land at the time 235.32 the certification is made under subdivision 2. 235.33 Subd. 2. [PROCEDURE.] Lands for which payments in lieu are 235.34 made pursuant to section 97A.061, subdivision 3, and Laws 1973, 235.35 chapter 567, shall not be eligible for payments under this 235.36 section. Each county auditor shall certify to the department of 236.1 natural resources during July of each year prior to the payment 236.2 year the number of acres of county-administered other natural 236.3 resources land within the county. The department of natural 236.4 resources may, in addition to the certification of acreage, 236.5 require descriptive lists of land so certified. The 236.6 commissioner of natural resources shall determine and certify to 236.7 the commissioner of revenue by March 1 of the payment year: 236.8 (1) the number of acres and most recent appraised value of 236.9 acquired natural resources land within each county; 236.10 (2) the number of acres of commissioner-administered 236.11 natural resources land within each county; and 236.12 (3) the number of acres of county-administered other 236.13 natural resources land within each county, based on the reports 236.14 filed by each county auditor with the commissioner of natural 236.15 resources. 236.16 The commissioner of transportation shall determine and 236.17 certify to the commissioner of revenue by March 1 of the payment 236.18 year the number of acres of land described in subdivision 1, 236.19 paragraph (b), but only if it exceeds 500 acres. 236.20 The commissioner of revenue shall determine the 236.21 distributions provided for in this section using the number of 236.22 acres and appraised values certified by the commissioner of 236.23 natural resources and the commissioner of transportation by 236.24 March 1 of the payment year. 236.25(c)Subd 3. [DETERMINATION OF APPRAISED VALUE.] For the 236.26 purposes of this section, the appraised value of acquired 236.27 natural resources land is the purchase price for the first five 236.28 years after acquisition. The appraised value of acquired 236.29 natural resources land received as a donation is the value 236.30 determined for the commissioner of natural resources by a 236.31 licensed appraiser, or the county assessor's estimated market 236.32 value if no appraisal is done. The appraised value must be 236.33 determined by the county assessor every five years after the 236.34 land is acquired. 236.35[EFFECTIVE DATE.] This section is effective for payments in 236.36 2002 and thereafter. 237.1 Sec. 14. Minnesota Statutes 2000, section 477A.14, is 237.2 amended to read: 237.3 477A.14 [USE OF FUNDS.] 237.4 Subdivision 1. [GENERAL DISTRIBUTION.] Except as provided 237.5 in section 97A.061, subdivision 5, or in subdivision 2, 40 237.6 percent of the total payment to the county shall be deposited in 237.7 the county general revenue fund to be used to provide property 237.8 tax levy reduction. The remainder shall be distributed by the 237.9 county in the following priority: 237.10 (a) 37.5 cents, as adjusted for inflation under section 237.11 477A.145, for each acre of county-administered other natural 237.12 resources land shall be deposited in a resource development fund 237.13 to be created within the county treasury for use in resource 237.14 development, forest management, game and fish habitat 237.15 improvement, and recreational development and maintenance of 237.16 county-administered other natural resources land. Any county 237.17 receiving less than $5,000 annually for the resource development 237.18 fund may elect to deposit that amount in the county general 237.19 revenue fund; 237.20 (b) From the funds remaining, within 30 days of receipt of 237.21 the payment to the county, the county treasurer shall pay each 237.22 organized township 30 cents, as adjusted for inflation under 237.23 section 477A.145, for each acre of acquired natural resources 237.24 land and each acre of land described in section 477A.12, 237.25 subdivision 1, paragraph (b), and 7.5 cents, as adjusted for 237.26 inflation under section 477A.145, for each acre of other natural 237.27 resources land located within its boundaries. Payments for 237.28 natural resources lands not located in an organized township 237.29 shall be deposited in the county general revenue fund. Payments 237.30 to counties and townships pursuant to this paragraph shall be 237.31 used to provide property tax levy reduction, except that of the 237.32 payments for natural resources lands not located in an organized 237.33 township, the county may allocate the amount determined to be 237.34 necessary for maintenance of roads in unorganized townships. 237.35 Provided that, if the total payment to the county pursuant to 237.36 section 477A.12 is not sufficient to fully fund the distribution 238.1 provided for in this clause, the amount available shall be 238.2 distributed to each township and the county general revenue fund 238.3 on a pro rata basis; and 238.4 (c) Any remaining funds shall be deposited in the county 238.5 general revenue fund. Provided that, if the distribution to the 238.6 county general revenue fund exceeds $35,000, the excess shall be 238.7 used to provide property tax levy reduction. 238.8 Subd. 2. [DISTRIBUTION FOR CONSOLIDATED CONSERVATION 238.9 LANDS.] In the case of payments for consolidated conservation 238.10 land, 15 percent of the amount paid on account of that land 238.11 under section 477A.12, must be distributed to the county for use 238.12 as provided in section 84A.51, subdivision 4, clause (1). The 238.13 remainder of the payment under section 477A.12 will be 238.14 distributed in proportion to the distributions described in 238.15 subdivision 1. 238.16[EFFECTIVE DATE.] This section is effective for payments 238.17 made in 2002 and thereafter. 238.18 Sec. 15. Minnesota Statutes 2000, section 477A.145, is 238.19 amended to read: 238.20 477A.145 [INFLATION ADJUSTMENT.] 238.21 In20012002 and each year thereafter, the amounts required 238.22 to be adjusted for inflation in sections 477A.12 and 477A.14 238.23 shall be increased to an amount equal to: (1) the amount before 238.24 the inflation adjustment multiplied by (2) one plus the 238.25 percentage increase in the implicit price deflator for 238.26 government consumption expenditures and gross investment for 238.27 state and local governments prepared by the Bureau of Economic 238.28 Analysis of the United States Department of Commerce for the 238.29 periodindicated below: (i) the periodstarting with the first 238.30 quarter of19941980 and ending with the third quarter of the 238.31 calendar year prior to the year in which aid is paid, provided238.32that lands acquired by the state under chapter 84A that are238.33designated as state parks, state recreation areas, scientific238.34and natural areas, or wildlife management areas are included in238.35the definition of acquired natural resource land under section238.36477A.11 for calculating payments in calendar year 2001 and239.1thereafter; (ii) otherwise the period starting with the first239.2quarter of 1987 and ending with the third quarter of the239.3calendar year prior to the year in which the aid is paid. 239.4 These adjusted amounts must be rounded to the nearest one-tenth 239.5 of a cent. 239.6[EFFECTIVE DATE.] This section is effective for payments 239.7 made in 2002 and thereafter. 239.8 Sec. 16. [REPEALER.] 239.9 Minnesota Statutes 2000, sections 477A.011, subdivisions 239.10 35, 36, and 37; and 477A.03, subdivision 4, are repealed. 239.11[EFFECTIVE DATE.] This section is effective for aids 239.12 payable in calendar year 2002 and thereafter. 239.13 ARTICLE 11 239.14 SUSTAINABLE FOREST INCENTIVE ACT 239.15 Section 1. Minnesota Statutes 2000, section 88.49, 239.16 subdivision 5, is amended to read: 239.17 Subd. 5. [CANCELLATION.] Upon the failure of the owner 239.18 faithfully to fulfill and perform such contract or any provision 239.19 thereof, or any requirement of sections 88.47 to 88.53, or any 239.20 rule adopted by the commissioner thereunder, the commissioner 239.21 may cancel the contract in the manner herein provided. The 239.22 commissioner shall give to the owner, in the manner prescribed 239.23 in section 88.48, subdivision 4, 60 days' notice of a hearing 239.24 thereon at which the owner may appear and show cause, if any, 239.25 why the contract should not be canceled. The commissioner shall 239.26 thereupon determine whether the contract should be canceled and 239.27 make an order to that effect. Notice of the commissioner's 239.28 determination and the making of the order shall be given to the 239.29 owner in the manner provided in section 88.48, subdivision 4. 239.30 On determining that the contract should be canceled and no 239.31 appeal therefrom be taken, the commissioner shall send notice 239.32 thereof to the auditor of the county and to the town clerk of 239.33 the town affected and file with the recorder a certified copy of 239.34 the order, who shall forthwith note the cancellation upon the 239.35 record thereof, and thereupon the land therein described shall 239.36 cease to be an auxiliary forest and, together with the timber 240.1 thereon, become liable to all taxes and assessments that 240.2 otherwise would have been levied against it had it never been an 240.3 auxiliary forest from the time of the making of the contract, 240.4 any provisions of the statutes of limitation to the contrary 240.5 notwithstanding, less the amount of taxes paid under the 240.6 provisions of section 88.51, subdivision 1, together with 240.7 interest on such taxes and assessments at six percent per annum, 240.8 but without penalties. 240.9 The commissioner may in like manner and with like effect 240.10 cancel the contract upon written application of the owner. 240.11 The commissioner shall cancel any contract if the owner has 240.12 made successful application under sections270.31 to 270.39240.13inclusive290C.01 to 290C.11, theMinnesota Tree Growth Tax Law240.14 Sustainable Forest Incentive Act, and has paid to the county 240.15 treasurer the difference between the amount which would have 240.16 been paid had the land under contract been subject to the 240.17 Minnesota Tree Growth Tax Law and the Sustainable Forest 240.18 Incentive Act from the date of the filing of the contract and 240.19 the amount actually paid under section 88.51, subdivisions 1 and 240.20 2. This tax difference must be calculated based on the years 240.21 the lands would have been taxed under the Tree Growth Tax Law 240.22 and the Sustainable Forest Incentive Act. The sustainable 240.23 forest tax difference is net of the refund provision of section 240.24 290C.07. If the amount which would have been paid, had the land 240.25 under contract been under the Minnesota Tree Growth Tax Law and 240.26 the Sustainable Forest Incentive Act from the date of the filing 240.27 of the contract, is less than the amount actually paid under the 240.28 contract, the cancellation shall be made without further payment 240.29 by the owner. 240.30 When the execution of any contract creating an auxiliary 240.31 forest shall have been procured through fraud or deception 240.32 practiced upon the county board or the commissioner or any other 240.33 person or body representing the state, it may be canceled upon 240.34 suit brought by the attorney general at the direction of the 240.35 commissioner. This cancellation shall have the same effect as 240.36 the cancellation of a contract by the commissioner. 241.1 Sec. 2. Minnesota Statutes 2000, section 88.49, 241.2 subdivision 9a, is amended to read: 241.3 Subd. 9a. [LAND TRADES WITH GOVERNMENTAL UNITS.] 241.4 Notwithstanding subdivisions 6 and 9, or section 88.491, 241.5 subdivision 2, if an owner trades land under auxiliary forest 241.6 contract for land owned by a governmental unit and the owner 241.7 agrees to use the land received in trade from the governmental 241.8 unit for the production of forest products, upon resolution of 241.9 the county board, no taxes and assessments shall be levied 241.10 against the land traded, except that any current or delinquent 241.11 annual taxes or yield taxes due on that land while it was under 241.12 the auxiliary forest provision must be paid prior to the land 241.13 exchange. The land received from the governmental unit in the 241.14 land trade automatically qualifies for inclusion in theTree241.15Growth Tax LawSustainable Forest Incentive Act. 241.16 Sec. 3. Minnesota Statutes 2000, section 88.491, 241.17 subdivision 2, is amended to read: 241.18 Subd. 2. [EFFECT OF EXPIRED CONTRACT.] When auxiliary 241.19 forest contracts expire, or prior to expiration by mutual 241.20 agreement between the land owner and the appropriate county 241.21 office, the lands previously covered by an auxiliary forest 241.22 contract automatically qualify for inclusionin the Tree Growth241.23Tax Lawunder the provisions of the Sustainable Forest Incentive 241.24 Act; provided that when such lands are included in theTree241.25Growth Tax LawSustainable Forest Incentive Act prior to 241.26 expiration of the auxiliary forest contract they will be 241.27 transferred and a tax paid as provided inaccordance with the241.28provisions ofsection 88.49, subdivision 5, upon application and 241.29 inclusion in the sustainable forest incentive program. The land 241.30 owner shall pay taxes in an amount equal to the difference 241.31 between: 241.32 (1) the sum of: 241.33 (i) the amount which would have been paid from the date of 241.34 the filing of the contract had the land under contract been 241.35 subject to the Minnesota Tree Growth Tax Lawfrom the date of241.36the filing of the contract and; plus 242.1 (ii) beginning with taxes payable in 2003, the taxes that 242.2 would have been paid if the land had been enrolled in the 242.3 sustainable forest incentive program; and 242.4 (2) the amount actually paid under section 88.51, 242.5 subdivisions 1 and 2. 242.6 Sec. 4. Minnesota Statutes 2000, section 270A.03, 242.7 subdivision 7, is amended to read: 242.8 Subd. 7. [REFUND.] "Refund" means an individual income tax 242.9 refund or political contribution refund, pursuant to chapter 242.10 290, or a property tax credit or refund, pursuant to chapter 242.11 290A, or a sustainable forest tax payment to a claimant under 242.12 chapter 290C. 242.13 For purposes of this chapter, lottery prizes, as set forth 242.14 in section 349A.08, subdivision 8, and amounts granted to 242.15 persons by the legislature on the recommendation of the joint 242.16 senate-house of representatives subcommittee on claims shall be 242.17 treated as refunds. 242.18 In the case of a joint property tax refund payable to 242.19 spouses under chapter 290A, the refund shall be considered as 242.20 belonging to each spouse in the proportion of the total refund 242.21 that equals each spouse's proportion of the total income 242.22 determined under section 290A.03, subdivision 3. In the case of 242.23 a joint income tax refund under chapter 289A, the refund shall 242.24 be considered as belonging to each spouse in the proportion of 242.25 the total refund that equals each spouse's proportion of the 242.26 total taxable income determined under section 290.01, 242.27 subdivision 29. The commissioner shall remit the entire refund 242.28 to the claimant agency, which shall, upon the request of the 242.29 spouse who does not owe the debt, determine the amount of the 242.30 refund belonging to that spouse and refund the amount to that 242.31 spouse. For court fines, fees, and surcharges and court-ordered 242.32 restitution under section 611A.04, subdivision 2, the notice 242.33 provided by the commissioner of revenue under section 270A.07, 242.34 subdivision 2, paragraph (b), serves as the appropriate legal 242.35 notice to the spouse who does not owe the debt. 242.36[EFFECTIVE DATE.] This section is effective for refunds in 243.1 2003 and thereafter. 243.2 Sec. 5. [290C.01] [PURPOSE.] 243.3 It is the policy of this state to promote sustainable 243.4 forest resource management on the state's public and private 243.5 lands. Recognizing that private forests comprise approximately 243.6 one-half of the state forest land resources, that healthy and 243.7 robust forest land provides significant benefits to the state of 243.8 Minnesota, and that ad valorem property taxes represent a 243.9 significant annual cost that can discourage long-term forest 243.10 management investments, this chapter, hereafter referred to as 243.11 the "Sustainable Forest Incentive Act," is enacted to encourage 243.12 the state's private forest landowners to make a long-term 243.13 commitment to sustainable forest management. 243.14[EFFECTIVE DATE.] This section is effective for taxes 243.15 levied in 2002, payable in 2003, and thereafter. 243.16 Sec. 6. [290C.02] [DEFINITIONS.] 243.17 Subdivision 1. [APPLICATION.] When used in sections 243.18 290C.01 to 290C.11, the terms in this section have the meanings 243.19 given them. 243.20 Subd. 2. [APPROVED PLAN WRITERS.] "Approved plan writers" 243.21 are natural resource professionals who are self-employed, 243.22 employed by private companies or individuals, nonprofit 243.23 organizations, local units of government, or public agencies, 243.24 and who are approved by the commissioner of natural resources. 243.25 Persons determined to be certified foresters by the Society of 243.26 American Foresters shall be deemed to meet the standards 243.27 required under this subdivision. The commissioner of natural 243.28 resources shall issue a unique identification number to each 243.29 approved planner. 243.30 Subd. 3. [CLAIMANT.] "Claimant" means a person, as that 243.31 term is defined in section 290.01, subdivision 2, who owns 243.32 forest land in Minnesota and files an application authorized by 243.33 the Sustainable Forest Incentive Act. No more than one claimant 243.34 is entitled to a payment under this chapter with respect to any 243.35 tract, parcel, or piece of land enrolled under this chapter. 243.36 When enrolled forest land is owned by two or more persons, the 244.1 owners must determine between them which person may claim the 244.2 refunds provided under sections 290C.01 to 290C.11. 244.3 Subd. 4. [COMMISSIONER.] "Commissioner" means the 244.4 commissioner of revenue. 244.5 Subd. 5. [CURRENT USE VALUE.] "Current use value" means 244.6 the statewide average annual income per acre, multiplied by 90 244.7 percent and divided by the capitalization rate determined under 244.8 subdivision 9. The statewide net annual income shall be a 244.9 weighted average based on the most recent data as of July 1 of 244.10 the computation year on stumpage prices and annual tree growth 244.11 rates and acreage by cover type provided by the department of 244.12 natural resources and the United States Forest Service. 244.13 Subd. 6. [FOREST LAND.] "Forest land" means land 244.14 containing a minimum of 20 contiguous acres for which the owner 244.15 has implemented a forest management plan that was prepared or 244.16 updated within the past ten years by an approved plan writer. 244.17 At least 50 percent of the contiguous acreage must meet the 244.18 definition of forest land in section 88.01, subdivision 7. For 244.19 the purposes of sections 290C.01 to 209C.11, forest land does 244.20 not include (i) land used for residential or agricultural 244.21 purposes, (ii) land enrolled in the reinvest in Minnesota 244.22 program, a state or federal conservation reserve or easement 244.23 reserve program under sections 103F.501 to 103F.531, the 244.24 Minnesota agricultural property tax law under section 273.111, 244.25 or land subject to agricultural land preservation controls or 244.26 restrictions as defined in section 40A.02 or under the 244.27 Metropolitan Agricultural Preserves Act under chapter 473H, or 244.28 (iii) land improved with a structure, pavement, sewer, campsite, 244.29 or any road, other than a township road, used for purposes not 244.30 prescribed in the forest management plan. 244.31 Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management plan" 244.32 means a written document providing a framework for site-specific 244.33 healthy, productive, and sustainable forest resources. A forest 244.34 management plan must include at least the following: (i) 244.35 owner-specific forest management goals for the property 244.36 including, when available, goals for individual cover types; 245.1 (ii) a reliable field inventory of the individual forest cover 245.2 types, their age, and density; (iii) a description of the soil 245.3 type and quality; (iv) an aerial photo and/or map of the 245.4 vegetation and other natural features of the property clearly 245.5 indicating the boundaries of the property and of the forest 245.6 land; (v) the proposed future conditions of the property; (vi) 245.7 prescriptions to meet proposed future conditions of the 245.8 property; (vii) a recommended timetable for implementing the 245.9 prescribed activities; and (viii) a legal description of the 245.10 parcels encompassing the parcels included in the plan. All 245.11 management activities prescribed in a plan must be in accordance 245.12 with the recommended timber harvesting and forest management 245.13 guidelines developed under section 89A.05. The commissioner of 245.14 natural resources shall provide a framework for plan content and 245.15 updating and revising plans. 245.16 Subd. 8. [TIMBER HARVESTING AND FOREST MANAGEMENT 245.17 GUIDELINES.] "Timber harvesting and forest management guidelines" 245.18 means guidelines developed under section 89A.05 and adopted by 245.19 the Minnesota forest resources council in 1998. 245.20 Subd. 9. [CAPITALIZATION RATE.] By July 1 of each year, 245.21 the commissioner shall determine a statewide capitalization rate 245.22 for use under this chapter. The rate shall be the average 245.23 annual effective interest rate for St. Paul on new loans under 245.24 the Farm Credit Bank system calculated under section 245.25 2032A(e)(7)(A) of the Internal Revenue Code. 245.26[EFFECTIVE DATE.] This section is effective for taxes 245.27 levied in 2002, payable in 2003, and thereafter. 245.28 Sec. 7. [290C.03] [ELIGIBILITY REQUIREMENTS.] 245.29 (a) Property may be enrolled in the sustainable forest 245.30 incentive program under this chapter if all of the following 245.31 conditions are met: 245.32 (1) property consists of at least 20 contiguous acres and 245.33 at least 50 percent of the land must meet the definition of 245.34 forest land in section 88.01, subdivision 7, during the 245.35 enrollment; 245.36 (2) a forest management plan for the property must be 246.1 prepared by an approved plan writer and implemented during the 246.2 period in which the land is enrolled; 246.3 (3) timber harvesting and forest management guidelines must 246.4 be used in conjunction with any timber harvesting or forest 246.5 management activities conducted on the land during the period in 246.6 which the land is enrolled; 246.7 (4) the property must be enrolled for a minimum of eight 246.8 years; 246.9 (5) there are no delinquent property taxes on the property; 246.10 and 246.11 (6) claimants enrolling more than 2,500 acres in the 246.12 sustainable forest incentive program must allow year-round, 246.13 nonmotorized access to fish and wildlife resources on enrolled 246.14 land except within one-fourth mile of a permanent dwelling or 246.15 during periods of high fire hazard as determined by the 246.16 commissioner of natural resources. 246.17 (b) Claimants required to allow access under paragraph (a), 246.18 clause (6), do not by that action: 246.19 (1) extend any assurance that the land is safe for any 246.20 purpose; 246.21 (2) confer upon the person the legal status of an invitee 246.22 or licensee to whom a duty of care is owed; or 246.23 (3) assume responsibility for or incur liability for any 246.24 injury to the person or property caused by an act or omission of 246.25 the person. 246.26[EFFECTIVE DATE.] This section is effective for taxes 246.27 levied in 2002, payable in 2003, and thereafter. 246.28 Sec. 8. [290C.04] [APPLICATIONS.] 246.29 (a) A landowner may apply to enroll forest land for the 246.30 sustainable forest incentive program under this chapter. The 246.31 claimant must complete, sign, and submit an application to the 246.32 commissioner by September 30 in order for the land to become 246.33 eligible beginning in the next year. The application shall be 246.34 on a form prescribed by the commissioner and must include the 246.35 information the commissioner deems necessary. At a minimum, the 246.36 application must show the following information for the land and 247.1 the claimant: (i) the claimant's social security number or 247.2 state or federal business tax registration number and date of 247.3 birth, (ii) the claimant's address, (iii) the claimant's 247.4 signature, (iv) the county's parcel identification numbers for 247.5 the tax parcels that completely contain the claimant's forest 247.6 land that is sought to be enrolled, (v) the number of acres 247.7 eligible for enrollment in the program, (vi) the approved plan 247.8 writer's signature and identification number, and (vii) proof, 247.9 in a form specified by the commissioner, that the claimant has 247.10 executed and acknowledged in the manner required by law for a 247.11 deed, and recorded, a covenant that the land is not and shall 247.12 not be developed in a manner inconsistent with the requirements 247.13 and conditions of this chapter. The covenant shall state in 247.14 writing that the covenant is binding on the claimant and the 247.15 claimant's successor or assignee, and that it runs with the land 247.16 for a period of not less than eight years. The commissioner 247.17 shall specify the form of the covenant and provide copies upon 247.18 request. The covenant must include a legal description that 247.19 encompasses all the forest land that the claimant wishes to 247.20 enroll under this section or the certificate of title number for 247.21 that land if it is registered land. 247.22 (b) In all cases, the commissioner shall notify the 247.23 claimant within 90 days after receipt of a completed application 247.24 that either the land has or has not been approved for enrollment. 247.25 The claimant for which the application is denied may, within 60 247.26 days of receipt of a notice of denial, appeal the denial to the 247.27 commissioner. 247.28 (c) Within 45 days after the denial of an application, or 247.29 within 45 days after the denial of an appeal, the commissioner 247.30 shall execute and acknowledge a document releasing the land from 247.31 the covenant required under this chapter. The document must be 247.32 mailed to the claimant and is entitled to be recorded. 247.33 (d) The social security numbers collected from individuals 247.34 under this section are private data as provided in section 13.49. 247.35 The state or federal business tax registration number and date 247.36 of birth data collected under this section are also private data 248.1 but may be shared with county assessors for purposes of tax 248.2 administration and with county treasurers for purposes of the 248.3 revenue recapture under chapter 270A. 248.4[EFFECTIVE DATE.] This section is effective for taxes 248.5 levied in 2002, payable in 2003, and thereafter. 248.6 Sec. 9. [290C.05] [ANNUAL CERTIFICATION.] 248.7 On or before July 1 of each year, beginning with the year 248.8 after the claimant has received an approved application, the 248.9 commissioner shall send each claimant enrolled under the 248.10 sustainable forest incentive program a certification form. The 248.11 claimant must sign the certification, attesting that the 248.12 requirements and conditions for continued enrollment in the 248.13 program are currently being met, and must return the signed 248.14 certification form to the commissioner by August 15 of that same 248.15 year. Failure to return an annual certification form by the due 248.16 date shall result in removal of the lands from the provisions of 248.17 the sustainable forest incentive program, and the imposition of 248.18 any applicable removal penalty. The claimant may appeal the 248.19 removal and any associated penalty according to the procedures 248.20 and within the time allowed under this chapter. 248.21[EFFECTIVE DATE.] This section is effective for taxes 248.22 levied in 2002, payable in 2003, and thereafter. 248.23 Sec. 10. [290C.06] [CALCULATION OF AVERAGE ESTIMATED 248.24 MARKET VALUE; TIMBERLAND.] 248.25 The commissioner shall annually calculate a statewide 248.26 average estimated market value per acre for class 2b timberland 248.27 under section 273.13, subdivision 23, paragraph (b). 248.28[EFFECTIVE DATE.] This section is effective for taxes 248.29 levied in 2002, payable in 2003, and thereafter. 248.30 Sec. 11. [290C.07] [CALCULATION OF INCENTIVE PAYMENT.] 248.31 An approved claimant under the sustainable forest incentive 248.32 program is eligible to receive an annual payment. The payment 248.33 shall equal the greater of: 248.34 (1) the difference between the property tax that would be 248.35 paid on the property using the previous year's statewide average 248.36 total township tax rate and the class rate for class 2b 249.1 timberland under section 273.13, subdivision 23, paragraph (b), 249.2 if the property were valued at (i) the average statewide 249.3 timberland market value per acre calculated under section 249.4 290C.06, and (ii) the average statewide timberland current use 249.5 value per acre calculated under section 290C.02, subdivision 5; 249.6 (2) two-thirds of the property tax amount determined by 249.7 using the previous year's statewide average total township tax 249.8 rate, the estimated market value per acre as calculated in 249.9 section 290C.06, and the class rate for 2b timberland under 249.10 section 273.13, subdivision 23, paragraph (b); or 249.11 (3) $1.50 per acre for each acre enrolled in the 249.12 sustainable forest incentive program. 249.13[EFFECTIVE DATE.] This section is effective for taxes 249.14 levied in 2002, payable in 2003, and thereafter. 249.15 Sec. 12. [290C.08] [ANNUAL INCENTIVE PAYMENT; 249.16 APPROPRIATION.] 249.17 Subdivision 1. [ANNUAL PAYMENT.] An incentive payment on 249.18 enrolled land will be made annually to each claimant in the 249.19 amount determined under section 290C.07. The incentive payment 249.20 shall be paid on or before October 1 each year based on the 249.21 certifications due August 15 of that year. Interest at the 249.22 annual rate determined under section 270.75 shall be included 249.23 with any incentive payment not paid by the later of October 1 of 249.24 the year the certification was due, or 45 days after the 249.25 completed certification was returned or filed if the 249.26 commissioner accepts a certification filed after August 15 of 249.27 the taxes payable year as the resolution of an appeal. 249.28 Subd. 2. [APPROPRIATION.] The amount necessary to make the 249.29 payments under this section is annually appropriated to the 249.30 commissioner from the general fund. 249.31[EFFECTIVE DATE.] This section is effective for taxes 249.32 levied in 2002, payable in 2003, and thereafter. 249.33 Sec. 13. [290C.09] [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 249.34 The commissioner shall immediately remove any property 249.35 enrolled in the sustainable forest incentive program for which 249.36 taxes are determined to be delinquent as provided in chapter 279 250.1 and shall notify the claimant of such action. Lands terminated 250.2 from the sustainable forest incentive program under this section 250.3 are not entitled to any payments provided in this chapter and 250.4 are subject to removal penalties prescribed in section 290C.11. 250.5 The claimant has 90 days from the receipt of notice from the 250.6 commissioner under this section to pay the delinquent taxes. If 250.7 the delinquent taxes are paid within this 90-day period, the 250.8 lands shall be reinstated in the program as if they had not been 250.9 withdrawn and without the payment of a penalty. 250.10[EFFECTIVE DATE.] This section is effective for taxes 250.11 levied in 2002, payable in 2003, and thereafter. 250.12 Sec. 14. [290C.10] [WITHDRAWAL PROCEDURES.] 250.13 An approved claimant under the sustainable forest incentive 250.14 program for a minimum of four years may notify the commissioner 250.15 of the intent to terminate enrollment. Within 90 days of 250.16 receipt of notice to terminate enrollment, the commissioner 250.17 shall inform the claimant in writing, acknowledging receipt of 250.18 this notice and indicating the effective date of termination 250.19 from the sustainable forest incentive program. Termination of 250.20 enrollment in the sustainable forest incentive program occurs on 250.21 January 1 of the fifth calendar year that begins after receipt 250.22 by the commissioner of the termination notice. After the 250.23 commissioner issues an effective date of termination, a claimant 250.24 wishing to continue the property's enrollment in the sustainable 250.25 forest incentive program beyond the termination date must apply 250.26 for enrollment as prescribed in section 290C.04. A claimant who 250.27 withdraws a parcel of land from this program may not reenroll 250.28 the parcel for a period of three years. Within 45 days after 250.29 the termination date, the commissioner shall execute and 250.30 acknowledge a document releasing the land from the covenant 250.31 required under this chapter. The document must be mailed to the 250.32 claimant and is entitled to be recorded. The commissioner may 250.33 allow early withdrawal from the Sustainable Forest Incentive Act 250.34 without penalty in cases of condemnation for a public purpose 250.35 notwithstanding the provisions of this section. 250.36[EFFECTIVE DATE.] This section is effective for taxes 251.1 levied in 2002, payable in 2003, and thereafter. 251.2 Sec. 15. [290C.11] [PENALTIES FOR REMOVAL.] 251.3 (a) If the commissioner determines that property enrolled 251.4 in the sustainable forest incentive program is in violation of 251.5 the conditions for enrollment as specified in section 290C.03, 251.6 the commissioner shall notify the claimant of the intent to 251.7 remove all enrolled land from the sustainable forest incentive 251.8 program. The claimant has 90 days to appeal this determination. 251.9 The appeal must be made in writing to the commissioner, who 251.10 shall, within 60 days, notify the claimant as to the outcome of 251.11 the appeal. Within 60 days after the commissioner denies an 251.12 appeal, or within 120 days after the commissioner received a 251.13 written appeal if the commissioner has not made a determination 251.14 in that time, the owner may appeal to tax court under chapter 251.15 271 as if the appeal is from an order of the commissioner. 251.16 (b) If the commissioner determines the property is to be 251.17 removed from the sustainable forest incentive program, the 251.18 claimant is liable for payment to the commissioner in the amount 251.19 equal to the payments received under this chapter for the 251.20 previous four-year period, plus interest. The claimant has 90 251.21 days to satisfy the payment for removal of land from the 251.22 sustainable forest incentive program under this section. If the 251.23 penalty is not paid within the 90-day period under paragraph 251.24 (a), the commissioner shall certify the amount to the county 251.25 auditor for collection as a part of the general ad valorem real 251.26 property taxes on the land in the following taxes payable year. 251.27[EFFECTIVE DATE.] This section is effective for taxes 251.28 levied in 2002, payable in 2003, and thereafter. 251.29 Sec. 16. [REPEALER.] 251.30 Minnesota Statutes 2000, sections 270.31; 270.32; 270.33; 251.31 270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are repealed. 251.32[EFFECTIVE DATE.] This section is effective for taxes 251.33 levied in 2002, payable in 2003, and thereafter. 251.34 ARTICLE 12 251.35 LOCAL DEVELOPMENT 251.36 Section 1. Minnesota Statutes 2000, section 273.1399, 252.1 subdivision 6, is amended to read: 252.2 Subd. 6. [EXEMPT DISTRICTS.] (a) The provisions of this 252.3 section do not apply to exempt tax increment financing districts 252.4 as specified by this subdivision. 252.5 (b) A tax increment financing district for an ethanol 252.6 production facility that satisfies all of the following 252.7 requirements is exempt: 252.8 (1) The district is an economic development district, that 252.9 qualifies under section 469.176, subdivision 4c, paragraph (a), 252.10 clause (1). 252.11 (2) The facility is certified by the commissioner of 252.12 agriculture to qualify for state payments for ethanol 252.13 development under section 41A.09 to the extent funds are 252.14 available. 252.15 (3) Increments from the district are used only to finance 252.16 the qualifying ethanol development project located in the 252.17 district or to pay for administrative costs of the district. 252.18 (4) The district is located outside of the seven-county 252.19 metropolitan area, as defined in section 473.121. 252.20 (5) The tax increment financing plan was approved by a 252.21 resolution of the county board. 252.22 (6) The exemption provided by this paragraph applies until 252.23 the first year after the total amount of increment for the 252.24 district exceeds $1,500,000. The county auditor shall notify 252.25 the commissioner of revenue of the expiration of the exemption 252.26 by June 1 of the year in which the auditor projects the revenues 252.27 from increments will exceed $1,500,000. On or before the 252.28 expiration of the exemption, the municipality may elect to make 252.29 a qualifying local contribution under paragraph (d) in lieu of 252.30 the state aid reduction. 252.31 (c) A qualified housing district is exempt. 252.32 (d)(1) A district is exempt if the municipality elects at 252.33 the time of approving the tax increment financing plan for the 252.34 district to make a qualifying local contribution. To qualify 252.35 for the exemption in each year, the authority or the 252.36 municipality must make a qualifying local contribution equal to 253.1 the listed percentages of increment from the district or 253.2 subdistrict: 253.3 (A) for an economic development district or a renewal and 253.4 renovation district, ten percent; 253.5 (B) for a redevelopment district, a housing district,a253.6mined underground space district,a hazardous substance 253.7 subdistrict, or a soils condition district, five percent. 253.8 (2) If the municipality elects to make a qualifying 253.9 contribution and fails to make the required contribution for a 253.10 year, the state aid reduction applies for the year. The state 253.11 aid reduction equals the greater of (A) the required local 253.12 contribution or (B) the amount of the aid reduction that applies 253.13 under subdivision 3. For a district exempt under paragraph (b), 253.14 no qualifying local contribution is required for years in which 253.15 the district is exempt. 253.16 (3)(A) If the sum of required local contributions for all 253.17 districts in the municipality exceeds two percent of city net 253.18 tax capacity as defined in section 477A.011, subdivision 20, for 253.19 a year, the municipality's total required local contribution for 253.20 that year is limited to two percent of net tax capacity to 253.21 qualify for the exemption under this subdivision. The 253.22 municipality may allocate the contribution among the districts 253.23 on which it has made elections as it determines appropriate. 253.24 (B) If a municipality makes an election under this 253.25 subdivision for a district in a year in which item (A) applies, 253.26 a minimum annual qualifying contribution must be made for the 253.27 district equal to the lesser of 0.25 percent of city net tax 253.28 capacity or three percent of increment revenues. This minimum 253.29 contribution applies for the life of the district for each year 253.30 that the restriction in item (A) applies and is in addition to 253.31 the contribution required by item (A). 253.32 (4) The amount of the local contribution must be made out 253.33 of unrestricted money of the authority or municipality, such as 253.34 the general fund, a property tax levy, or a federal or a state 253.35 grant-in-aid which may be spent for general government 253.36 purposes. The local contribution may not be made, directly or 254.1 indirectly, with tax increments or developer payments as defined 254.2 under section 469.1766. The local contribution must be used to 254.3 pay project costs and cannot be used for general government 254.4 purposes or for improvements or costs that the authority or 254.5 municipality planned to incur absent the project. The authority 254.6 or municipality may request contributions from other local 254.7 government entities that will benefit from the district's 254.8 activities. These contributions reduce the local contribution 254.9 required of the municipality or authority by this paragraph. 254.10 Cities, counties, towns, and schools may contribute to paying 254.11 these costs, notwithstanding any other law to the contrary. 254.12 (5) The municipality may make a local contribution in 254.13 excess of the required contribution for a year. If it does so, 254.14 the municipality may credit the excess to a local contribution 254.15 account for the district. The balance in the account may be 254.16 used to meet the requirements for qualifying local contributions 254.17 for later years. No interest or investment earnings may be 254.18 credited or imputed to the account, except those (A) actually 254.19 paid by the municipality out of its unrestricted funds or by 254.20 another person or entity, other than a developer as used in 254.21 section 469.1766, and (B) used as required for a qualifying 254.22 local contribution. 254.23 (6) If the state contributes to the project costs through a 254.24 direct grant or similar incentive, the required local 254.25 contribution is reduced by one-half of the dollar amount of the 254.26 state grant or other similar incentive. 254.27[EFFECTIVE DATE.] This section is effective the day 254.28 following final enactment. 254.29 Sec. 2. Minnesota Statutes 2000, section 273.1399, is 254.30 amended by adding a subdivision to read: 254.31 Subd. 9. [CONTRIBUTIONS TO AFFORDABLE HOUSING FUNDS.] In 254.32 lieu of the state aid offset or local contribution under this 254.33 section, a city may elect, in the tax increment financing plan, 254.34 to make a contribution to an affordable housing fund. To 254.35 qualify under this paragraph, the city must: 254.36 (1) make a contribution to the affordable housing fund at 255.1 the times and in the amounts required for a local contribution 255.2 under the provisions of subdivision 6 for the district; 255.3 (2) make the contribution out of funds that would qualify 255.4 as a local contribution under subdivision 6; and 255.5 (3) spend the funds in the affordable housing account 255.6 within five years after the amounts are contributed on a project 255.7 that meets the requirements of a qualified housing district. 255.8 Failure to make a contribution to an affordable housing fund as 255.9 required by this paragraph has the same effect as the city 255.10 failing to make an elected local contribution under subdivision 255.11 6. 255.12[EFFECTIVE DATE.] This section is effective for tax 255.13 increment financing districts (1) for which the request for 255.14 certification is made after June 30, 2001, and (2) for which the 255.15 request for certification was made after June 30, 1994, if the 255.16 municipality elected to make a local contribution under 255.17 Minnesota Statutes, section 273.1399, subdivision 6. 255.18 Sec. 3. Minnesota Statutes 2000, section 276A.01, 255.19 subdivision 3, is amended to read: 255.20 Subd. 3. [COMMERCIAL-INDUSTRIAL PROPERTY.] 255.21 "Commercial-industrial property" means the following categories 255.22 of property, as defined in section 273.13, excluding that 255.23 portion of the property (i) that may, by law, constitute the tax 255.24 base for a tax increment pledged pursuant to section 469.042 or 255.25 469.162 or sections 469.174 to 469.178, certification of which 255.26 was requested prior to May 1, 1996, to the extent and while the 255.27 tax increment is so pledged; or (ii) that is exempt from 255.28 taxation under section 272.02: 255.29 (1) that portion of class 5 property consisting of unmined 255.30 iron ore and low-grade iron-bearing formations as defined in 255.31 section 273.14, tools, implements, and machinery, except the 255.32 portion of high voltage transmission lines, the value of which 255.33 is deducted from net tax capacity under section 273.425; and 255.34 (2) that portion of class 3 and class 5 property which is 255.35 either used or zoned for use for any commercial or industrial 255.36 purpose, except for such property which is, or, in the case of 256.1 property under construction, will when completed be used 256.2 exclusively for residential occupancy and the provision of 256.3 services to residential occupants thereof. Property must be 256.4 considered as used exclusively for residential occupancy only if 256.5 each of not less than 80 percent of its occupied residential 256.6 units is, or, in the case of property under construction, will 256.7 when completed be occupied under an oral or written agreement 256.8 for occupancy over a continuous period of not less than 30 days. 256.9 If the classification of property prescribed by section 256.10 273.13 is modified by legislative amendment, the references in 256.11 this subdivision are to the successor class or classes of 256.12 property, or portions thereof, that include the kinds of 256.13 property designated in this subdivision. 256.14[EFFECTIVE DATE.] This section is effective retroactive to 256.15 July 1, 1997, for taxes levied in 1997, payable in 1998, and 256.16 subsequent years. 256.17 Sec. 4. Minnesota Statutes 2000, section 297A.64, is 256.18 amended by adding a subdivision to read: 256.19 Subd. 2a. [ADDITIONAL FEE IMPOSED.] An additional fee 256.20 equal to three percent of the sales price is imposed on leases 256.21 or rentals of vehicles subject to the tax under subdivision 1. 256.22 Sec. 5. Minnesota Statutes 2000, section 297A.64, 256.23 subdivision 3, is amended to read: 256.24 Subd. 3. [ADMINISTRATION.] The retailer shall report and 256.25 pay the tax imposed in subdivision 1 and the additional fee 256.26 imposed under subdivision 2a to the commissioner of revenue with 256.27 the taxes imposed in this chapter. The tax imposed in 256.28 subdivision 1 and thefeefees imposed insubdivision 2256.29 subdivisions 2 and 2a are subject to the same interest, penalty, 256.30 and other provisions provided for sales and use taxes under 256.31 chapter 289A and this chapter. The commissioner has the same 256.32 powers to assess and collect the tax and fee that are given the 256.33 commissioner in chapters 270 and 289A and this chapter to assess 256.34 and collect sales and use tax. 256.35 Sec. 6. Minnesota Statutes 2000, section 297A.64, 256.36 subdivision 4, is amended to read: 257.1 Subd. 4. [EXEMPTIONS.] (a) The tax and thefeefees 257.2 imposed by this section do not apply to a lease or rental of (1) 257.3 a vehicle to be used by the lessee to provide a licensed taxi 257.4 service; (2) a hearse or limousine used in connection with a 257.5 burial or funeral service; or (3) a van designed or adapted 257.6 primarily for transporting property rather than passengers. 257.7 (b) The lessor may elect not to charge the fee imposed in 257.8 subdivision 2 if in the previous calendar year the lessor had no 257.9 more than 20 vehicles available for lease that would have been 257.10 subject to tax under this section, or no more than $50,000 in 257.11 gross receipts that would have been subject to tax under this 257.12 section. 257.13 Sec. 7. Minnesota Statutes 2000, section 297A.94, is 257.14 amended to read: 257.15 297A.94 [DEPOSIT OF REVENUES.] 257.16 (a) Except as provided in this section, the commissioner 257.17 shall deposit the revenues, including interest and penalties, 257.18 derived from the taxes imposed by this chapter in the state 257.19 treasury and credit them to the general fund. 257.20 (b) The commissioner shall deposit taxes in the Minnesota 257.21 agricultural and economic account in the special revenue fund if: 257.22 (1) the taxes are derived from sales and use of property 257.23 and services purchased for the construction and operation of an 257.24 agricultural resource project; and 257.25 (2) the purchase was made on or after the date on which a 257.26 conditional commitment was made for a loan guaranty for the 257.27 project under section 41A.04, subdivision 3. 257.28 The commissioner of finance shall certify to the commissioner 257.29 the date on which the project received the conditional 257.30 commitment. The amount deposited in the loan guaranty account 257.31 must be reduced by any refunds and by the costs incurred by the 257.32 department of revenue to administer and enforce the assessment 257.33 and collection of the taxes. 257.34 (c) The commissioner shall deposit the revenues, including 257.35 interest and penalties, derived from the taxes imposed on sales 257.36 and purchases included in section 297A.61, subdivision 16, 258.1 paragraphs (b) and (f), in the state treasury, and credit them 258.2 as follows: 258.3 (1) first to the general obligation special tax bond debt 258.4 service account in each fiscal year the amount required by 258.5 section 16A.661, subdivision 3, paragraph (b); and 258.6 (2) after the requirements of clause (1) have been met, the 258.7 balance to the general fund. 258.8 (d) The commissioner shall deposit the revenues, including 258.9 interest and penalties, collected under section 297A.64, 258.10 subdivision 5, in the state treasury and credit them to the 258.11 general fund. By July 15 of each year the commissioner shall 258.12 transfer to the highway user tax distribution fund an amount 258.13 equal to the excess fees collected under section 297A.64, 258.14 subdivision 5, for the previous calendar year. 258.15 (e) For fiscal year 2001, 97 percent, and for fiscal year 258.16 2002 and thereafter, 87 percent of the revenues, including 258.17 interest and penalties, transmitted to the commissioner under 258.18 section 297A.65, must be deposited by the commissioner in the 258.19 state treasury as follows: 258.20 (1) 50 percent of the receipts must be deposited in the 258.21 heritage enhancement account in the game and fish fund, and may 258.22 be spent only on activities that improve, enhance, or protect 258.23 fish and wildlife resources, including conservation, 258.24 restoration, and enhancement of land, water, and other natural 258.25 resources of the state; 258.26 (2) 22.5 percent of the receipts must be deposited in the 258.27 natural resources fund, and may be spent only for state parks 258.28 and trails; 258.29 (3) 22.5 percent of the receipts must be deposited in the 258.30 natural resources fund, and may be spent only on metropolitan 258.31 park and trail grants; 258.32 (4) three percent of the receipts must be deposited in the 258.33 natural resources fund, and may be spent only on local trail 258.34 grants; and 258.35 (5) two percent of the receipts must be deposited in the 258.36 natural resources fund, and may be spent only for the Minnesota 259.1 zoological garden, the Como park zoo and conservatory, and the 259.2 Duluth zoo. 259.3 (f) The revenue dedicated under paragraph (e) may not be 259.4 used as a substitute for traditional sources of funding for the 259.5 purposes specified, but the dedicated revenue shall supplement 259.6 traditional sources of funding for those purposes. Land 259.7 acquired with money deposited in the game and fish fund under 259.8 paragraph (e) must be open to public hunting and fishing during 259.9 the open season. At least 87 percent of the money deposited in 259.10 the game and fish fund for improvement, enhancement, or 259.11 protection of fish and wildlife resources under paragraph (e) 259.12 must be allocated for field operations. 259.13 (g) The commissioner shall deposit the revenues derived 259.14 from the fee imposed under section 297A.64, subdivision 2a, as 259.15 follows: 259.16 (1) the revenue from the tax imposed after June 30, 2001, 259.17 and before July 1, 2005, must be deposited in the general fund 259.18 for appropriation as provided in section 39; 259.19 (2) the revenue from the tax imposed after June 30, 2005, 259.20 and before July 1, 2026, must be deposited in the airport impact 259.21 mitigation fund created in section 39; and 259.22 (3) the revenue from the tax imposed after June 30, 2026, 259.23 must be deposited in the general fund. 259.24 Sec. 8. [469.1083] [TOWNSHIP ECONOMIC DEVELOPMENT 259.25 AUTHORITY; ESTABLISHMENT AND POWERS.] 259.26 Subdivision 1. [ESTABLISHMENT.] The board of township 259.27 supervisors of a township that is the only township in a county 259.28 may establish an economic development authority in the manner 259.29 provided in sections 469.090 to 469.1081, and may impose limits 259.30 on the authority provided in section 469.092. The economic 259.31 development authority has all of the powers and duties granted 259.32 to or imposed upon economic development authorities under 259.33 sections 469.090 to 469.1081. The township economic development 259.34 authority may create and define the boundaries of economic 259.35 development districts at any place or places within the 259.36 township, provided that a project as recommended by the township 260.1 authority that is to be located within the corporate limits of a 260.2 city may not be commenced without the approval of the governing 260.3 body of the city. Section 469.174, subdivision 10, and the 260.4 contiguity requirement specified under section 469.101, 260.5 subdivision 1, do not apply to limit the areas that may be 260.6 designated as township economic development districts. 260.7 Subd. 2. [POWERS.] If an economic development authority is 260.8 established as provided in subdivision 1, the township may 260.9 exercise all of the powers relating to an economic development 260.10 authority granted to a city under sections 469.090 to 469.1081, 260.11 or other law, including the power to levy a tax to support the 260.12 activities of the authority. 260.13 Sec. 9. Minnesota Statutes 2000, section 469.169, is 260.14 amended by adding a subdivision to read: 260.15 Subd. 15. [ADDITIONAL BORDER CITY ALLOCATIONS.] In 260.16 addition to tax reductions authorized in subdivisions 7 to 14, 260.17 the commissioner shall allocate $1,500,000 for tax reductions to 260.18 border city enterprise zones in cities located on the western 260.19 border of the state. The commissioner shall make allocations to 260.20 zones in cities on the western border on a per capita basis. 260.21 Allocations made under this subdivision may be used for tax 260.22 reductions as provided in section 469.171, or for other offsets 260.23 of taxes imposed on or remitted by businesses located in the 260.24 enterprise zone, but only if the municipality determines that 260.25 the granting of the tax reduction or offset is necessary in 260.26 order to retain a business within or attract a business to the 260.27 zone. Any portion of the allocation provided in this section 260.28 may alternatively be used for tax reductions under section 260.29 469.1732 or 469.1734. If, at the end of the biennium, the total 260.30 amount allowable under this section has not been expended, a 260.31 city that has expended its allocation may submit a request for 260.32 an additional allocation for qualifying reductions from the 260.33 amount remaining. If more than one city exceeds their 260.34 allocation and the additional qualifying amounts exceed the 260.35 balance remaining, the commissioner shall allocate the amount 260.36 remaining to each qualifying city in proportion to its request 261.1 for additional allocation. Limitations on allocations under 261.2 subdivision 7 do not apply to this allocation. 261.3[EFFECTIVE DATE.] This section is effective the day 261.4 following final enactment. 261.5 Sec. 10. Minnesota Statutes 2000, section 469.174, 261.6 subdivision 10, is amended to read: 261.7 Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 261.8 district" means a type of tax increment financing district 261.9 consisting of a project, or portions of a project, within which 261.10 the authority finds by resolution that one or more of the 261.11 following conditions, reasonably distributed throughout the 261.12 district, exists: 261.13 (1) parcels consisting of 70 percent of the area of the 261.14 district are occupied by buildings, streets, utilities, paved or 261.15 gravel parking lots, or otherimprovementssimilar structures 261.16 and more than 50 percent of the buildings, not including 261.17 outbuildings, are structurally substandard to a degree requiring 261.18 substantial renovation or clearance; or 261.19 (2) the property consists of vacant, unused, underused, 261.20 inappropriately used, or infrequently used railyards, rail 261.21 storage facilities, or excessive or vacated railroad 261.22 rights-of-way; or 261.23 (3) tank facilities, or property whose immediately previous 261.24 use was for tank facilities, as defined in section 115C.02, 261.25 subdivision 15, if the tank facilities: 261.26 (i) have or had a capacity of more than 1,000,000 gallons; 261.27 (ii) are located adjacent to rail facilities; and 261.28 (iii) have been removed or are unused, underused, 261.29 inappropriately used, or infrequently used. 261.30 (b) For purposes of this subdivision, "structurally 261.31 substandard" shall mean containing defects in structural 261.32 elements or a combination of deficiencies in essential utilities 261.33 and facilities, light and ventilation, fire protection including 261.34 adequate egress, layout and condition of interior partitions, or 261.35 similar factors, which defects or deficiencies are of sufficient 261.36 total significance to justify substantial renovation or 262.1 clearance. 262.2 (c) A building is not structurally substandard if it is in 262.3 compliance with the building code applicable to new buildings or 262.4 could be modified to satisfy the building code at a cost of less 262.5 than 15 percent of the cost of constructing a new structure of 262.6 the same square footage and type on the site. The municipality 262.7 may find that a building is not disqualified as structurally 262.8 substandard under the preceding sentence on the basis of 262.9 reasonably available evidence, such as the size, type, and age 262.10 of the building, the average cost of plumbing, electrical, or 262.11 structural repairs, or other similar reliable evidence. The 262.12 municipality may not make such a determination without an 262.13 interior inspection of the property, but need not have an 262.14 independent, expert appraisal prepared of the cost of repair and 262.15 rehabilitation of the building. An interior inspection of the 262.16 property is not required, if the municipality finds that (1) the 262.17 municipality or authority is unable to gain access to the 262.18 property after using its best efforts to obtain permission from 262.19 the party that owns or controls the property; and (2) the 262.20 evidence otherwise supports a reasonable conclusion that the 262.21 building is structurally substandard. Items of evidence that 262.22 support such a conclusion include recent fire or police 262.23 inspections, on-site property tax appraisals or housing 262.24 inspections, exterior evidence of deterioration, or other 262.25 similar reliable evidence. Written documentation of the 262.26 findings and reasons why an interior inspection was not 262.27 conducted must be made and retained under section 469.175, 262.28 subdivision 3, clause (1). 262.29 (d) A parcel is deemed to be occupied by a structurally 262.30 substandard building for purposes of the finding under paragraph 262.31 (a) if all of the following conditions are met: 262.32 (1) the parcel was occupied by a substandard building 262.33 within three years of the filing of the request for 262.34 certification of the parcel as part of the district with the 262.35 county auditor; 262.36 (2) the substandard building was demolished or removed by 263.1 the authority or the demolition or removal was financed by the 263.2 authority or was done by a developer under a development 263.3 agreement with the authority; 263.4 (3) the authority found by resolution before the demolition 263.5 or removal that the parcel was occupied by a structurally 263.6 substandard building and that after demolition and clearance the 263.7 authority intended to include the parcel within a district; and 263.8 (4) upon filing the request for certification of the tax 263.9 capacity of the parcel as part of a district, the authority 263.10 notifies the county auditor that the original tax capacity of 263.11 the parcel must be adjusted as provided by section 469.177, 263.12 subdivision 1, paragraph (h). 263.13 (e) For purposes of this subdivision, a parcel is not 263.14 occupied by buildings, streets, utilities, paved or gravel 263.15 parking lots, or otherimprovementssimilar structures unless 15 263.16 percent of the area of the parcel containsimprovements263.17 buildings, streets, utilities, paved or gravel parking lots, or 263.18 other similar structures. 263.19 (f) For districts consisting of two or more noncontiguous 263.20 areas, each area must qualify as a redevelopment district under 263.21 paragraph (a) to be included in the district, and the entire 263.22 area of the district must satisfy paragraph (a). 263.23[EFFECTIVE DATE.] This section is effective for districts 263.24 for which the request for certification is made after June 30, 263.25 2001. 263.26 Sec. 11. Minnesota Statutes 2000, section 469.174, 263.27 subdivision 10a, is amended to read: 263.28 Subd. 10a. [RENEWAL AND RENOVATION DISTRICT.] (a) "Renewal 263.29 and renovation district" means a type of tax increment financing 263.30 district consisting of a project, or portions of a project, 263.31 within which the authority finds by resolution that: 263.32 (1)(i) parcels consisting of 70 percent of the area of the 263.33 district are occupied by buildings, streets, utilities, paved or 263.34 gravel parking lots, or otherimprovementssimilar structures; 263.35 (ii) 20 percent of the buildings are structurally substandard; 263.36 and (iii) 30 percent of the other buildings require substantial 264.1 renovation or clearance to remove existing conditions such as: 264.2 inadequate street layout, incompatible uses or land use 264.3 relationships, overcrowding of buildings on the land, excessive 264.4 dwelling unit density, obsolete buildings not suitable for 264.5 improvement or conversion, or other identified hazards to the 264.6 health, safety, and general well-being of the community; and 264.7 (2) the conditions described in clause (1) are reasonably 264.8 distributed throughout the geographic area of the district. 264.9 (b) For purposes of determining whether a building is 264.10 structurally substandard, whether parcels are occupied by 264.11 buildings, streets, utilities, paved or gravel parking lots, or 264.12 otherimprovementssimilar structures, or whether noncontiguous 264.13 areas qualify, the provisions of subdivision 10, 264.14 paragraphs(b),(c), (e), and(d)(f) apply. 264.15[EFFECTIVE DATE.] This section is effective for districts 264.16 for which the requests for certification are made after June 30, 264.17 1997, except the provision requiring parcels to be occupied by 264.18 structures is effective for districts for which the request for 264.19 certification is made after June 30, 2001. 264.20 Sec. 12. Minnesota Statutes 2000, section 469.174, 264.21 subdivision 12, is amended to read: 264.22 Subd. 12. [ECONOMIC DEVELOPMENT DISTRICT.] "Economic 264.23 development district" means a type of tax increment financing 264.24 district which consists of any project, or portions of a 264.25 project,not meeting the requirements found in the definition of264.26redevelopment district, renewal and renovation district, soils264.27condition district, or housing district, butwhich the authority 264.28 finds to be in the public interest because: 264.29 (1) it will discourage commerce, industry, or manufacturing 264.30 from moving their operations to another state or municipality; 264.31 or 264.32 (2) it will result in increased employment in the state; or 264.33 (3) it will result in preservation and enhancement of the 264.34 tax base of the state. 264.35[EFFECTIVE DATE.] This section is effective for districts 264.36 for which the request for certification is made after June 30, 265.1 2001. 265.2 Sec. 13. Minnesota Statutes 2000, section 469.175, 265.3 subdivision 1, is amended to read: 265.4 Subdivision 1. [TAX INCREMENT FINANCING PLAN.](a)A tax 265.5 increment financing plan shall contain: 265.6 (1) a statement of objectives of an authority for the 265.7 improvement of a project; 265.8 (2) a statement as to the development program for the 265.9 project, including the property within the project, if any, that 265.10 the authority intends to acquire; 265.11 (3) a list of any development activities that the plan 265.12 proposes to take place within the project, for which contracts 265.13 have been entered into at the time of the preparation of the 265.14 plan, including the names of the parties to the contract, the 265.15 activity governed by the contract, the cost stated in the 265.16 contract, and the expected date of completion of that activity; 265.17 (4) identification or description of the type of any other 265.18 specific development reasonably expected to take place within 265.19 the project, and the date when the development is likely to 265.20 occur; 265.21 (5) estimates of the following: 265.22 (i) cost of the project, including administration expenses; 265.23 (ii) amount of bonded indebtedness to be incurred; 265.24 (iii) sources of revenue to finance or otherwise pay public 265.25 costs; 265.26 (iv) the most recent net tax capacity of taxable real 265.27 property within the tax increment financing district and within 265.28 any subdistrict; 265.29 (v) the estimated captured net tax capacity of the tax 265.30 increment financing district at completion; and 265.31 (vi) the duration of the tax increment financing district's 265.32 and any subdistrict's existence; 265.33 (6) statements of the authority's alternate estimates of 265.34 the impact of tax increment financing on the net tax capacities 265.35 of all taxing jurisdictions in which the tax increment financing 265.36 district is located in whole or in part. For purposes of one 266.1 statement, the authority shall assume that the estimated 266.2 captured net tax capacity would be available to the taxing 266.3 jurisdictions without creation of the district, and for purposes 266.4 of the second statement, the authority shall assume that none of 266.5 the estimated captured net tax capacity would be available to 266.6 the taxing jurisdictions without creation of the district or 266.7 subdistrict; 266.8 (7) identification and description of studies and analyses 266.9 used to make the determination set forth in subdivision 3, 266.10 clause (2); and 266.11 (8) identification of all parcels to be included in the 266.12 district or any subdistrict. 266.13(b) For a housing district, redevelopment district, or a266.14hazardous substance subdistrict, the authority may elect in the266.15tax increment financing plan to provide for the identification266.16of a minimum market value in the plan, development agreement, or266.17assessment agreement, and provide that increment is first266.18received by the authority when (1) the market value of the266.19improvements as determined by the assessor reaches or exceeds266.20the minimum market value, or (2) four years has elapsed from the266.21date of certification of the original net tax capacity of the266.22taxable real property in the district or subdistrict by the266.23county auditor, whichever is earlier.266.24[EFFECTIVE DATE.] This section is effective for requests 266.25 for certification of tax increment financing districts received 266.26 after June 30, 2001. 266.27 Sec. 14. Minnesota Statutes 2000, section 469.175, is 266.28 amended by adding a subdivision to read: 266.29 Subd. 4a. [FILING PLAN WITH STATE.] (a) The authority must 266.30 file a copy of the tax increment financing plan and amendments 266.31 to the plan with the commissioner of revenue. The authority 266.32 must also file a copy of the development plan or the project 266.33 plan for the project area with the commissioner of revenue. The 266.34 commissioner of revenue shall provide a copy of the plan to the 266.35 state auditor upon request. 266.36 (b) Filing under this subdivision must be made within 60 267.1 days after the latest of: 267.2 (1) the filing of the request for certification of the 267.3 district; 267.4 (2) approval of the plan by the municipality; or 267.5 (3) adoption of the plan by the authority. 267.6[EFFECTIVE DATE.] This section is effective for plans and 267.7 amendments approved after July 1, 2000. 267.8 Sec. 15. Minnesota Statutes 2000, section 469.175, 267.9 subdivision 5, is amended to read: 267.10 Subd. 5. [ANNUAL DISCLOSURE.] An annual statement showing 267.11 for each district the information required to be reported under 267.12 subdivision 6, paragraph (c), clauses (1), (2), (3), (11), (12), 267.13 (20), and (21); the amounts of tax increment received and 267.14 expended in the reporting period; and any additional information 267.15 the authority deems necessary must be published in a newspaper 267.16 of general circulation in the municipality that approved the tax 267.17 increment financing plan. The annual statement must inform 267.18 readers that additional information regarding each district may 267.19 be obtained from the authority, and must explain how the 267.20 additional information may be requested. The authority must 267.21 publish the annual statement for a year no later than August 15 267.22 of the next year. The authority must identify the newspaper of 267.23 general circulation in the municipality to which the annual 267.24 statement has been or will be submitted for publication and 267.25 provide a copy of the annual statement to the county board, the 267.26 county auditor, the school board, thestate auditorcommissioner 267.27 of revenue, and, if the authority is other than the 267.28 municipality, the governing body of the municipality on or 267.29 before August 1 of the year in which the statement must be 267.30 published. 267.31 The disclosure requirements imposed by this subdivision 267.32 apply to districts certified before, on, or after August 1, 1979. 267.33 Sec. 16. Minnesota Statutes 2000, section 469.175, 267.34 subdivision 6, is amended to read: 267.35 Subd. 6. [ANNUAL FINANCIAL REPORTING.] (a) The state 267.36 auditor shall develop a uniform system of accounting and 268.1 financial reporting for tax increment financing districts. The 268.2 system of accounting and financial reporting shall, as nearly as 268.3 possible: 268.4 (1) provide for full disclosure of the sources and uses of 268.5 public funds in the district; 268.6 (2) permit comparison and reconciliation with the affected 268.7 local government's accounts and financial reports; 268.8 (3) permit auditing of the funds expended on behalf of a 268.9 district, including a single district that is part of a 268.10 multidistrict project or that is funded in part or whole through 268.11 the use of a development account funded with tax increments from 268.12 other districts or with other public money; 268.13 (4) be consistent with generally accepted accounting 268.14 principles. 268.15 (b) The authority must annually submit to thestate auditor268.16 commissioner of revenue a financial report in compliance with 268.17 paragraph (a) that has been audited by an independent auditor. 268.18 Copies of the report must also be provided to the county auditor 268.19 and to the governing body of the municipality, if the authority 268.20 is not the municipality. To the extent necessary to permit 268.21 compliance with the requirement of financial reporting, the 268.22 county and any other appropriate local government unit or 268.23 private entity must provide the necessary records or information 268.24 to the authority or thestate auditorcommissioner of revenue as 268.25 provided by the system of accounting and financial reporting 268.26 developed pursuant to paragraph (a). The authority must submit 268.27 the annual report for a year on or before August 1 of the next 268.28 year. 268.29 (c) The annual financial report must also include the 268.30 following items: 268.31 (1) the original net tax capacity of the district and any 268.32 subdistrict under section 469.177, subdivision 1; 268.33 (2) the net tax capacity for the reporting period of the 268.34 district and any subdistrict; 268.35 (3) the captured net tax capacity of the district; 268.36 (4) any fiscal disparity deduction from the captured net 269.1 tax capacity under section 469.177, subdivision 3; 269.2 (5) the captured net tax capacity retained for tax 269.3 increment financing under section 469.177, subdivision 2, 269.4 paragraph (a), clause (1); 269.5 (6) any captured net tax capacity distributed among 269.6 affected taxing districts under section 469.177, subdivision 2, 269.7 paragraph (a), clause (2); 269.8 (7) the type of district; 269.9 (8) the date the municipality approved the tax increment 269.10 financing plan and the date of approval of any modification of 269.11 the tax increment financing plan, the approval of which requires 269.12 notice, discussion, a public hearing, and findings under 269.13 subdivision 4, paragraph (a); 269.14 (9) the date the authority first requested certification of 269.15 the original net tax capacity of the district and the date of 269.16 the request for certification regarding any parcel added to the 269.17 district; 269.18 (10) the date the county auditor first certified the 269.19 original net tax capacity of the district and the date of 269.20 certification of the original net tax capacity of any parcel 269.21 added to the district; 269.22 (11) the month and year in which the authority has received 269.23 or anticipates it will receive the first increment from the 269.24 district; 269.25 (12) the date the district must be decertified; 269.26 (13) for the reporting period and prior years of the 269.27 district, the actual amount received from, at least, the 269.28 following categories: 269.29 (i) tax increments paid by the captured net tax capacity 269.30 retained for tax increment financing under section 469.177, 269.31 subdivision 2, paragraph (a), clause (1), but excluding any 269.32 excess taxes; 269.33 (ii) tax increments that are interest or other investment 269.34 earnings on or from tax increments; 269.35 (iii) tax increments that are proceeds from the sale or 269.36 lease of property, tangible or intangible, purchased by the 270.1 authority with tax increments; 270.2 (iv) tax increments that are repayments of loans or other 270.3 advances made by the authority with tax increments; 270.4 (v) bond or loan proceeds; 270.5 (vi) special assessments; 270.6 (vii) grants; and 270.7 (viii) transfers from funds not exclusively associated with 270.8 the district; 270.9 (14) for the reporting period and for the prior years of 270.10 the district, the amount budgeted under the tax increment 270.11 financing plan, and the actual amount expended for, at least, 270.12 the following categories: 270.13 (i) acquisition of land and buildings through condemnation 270.14 or purchase; 270.15 (ii) site improvements or preparation costs; 270.16 (iii) installation of public utilities, parking facilities, 270.17 streets, roads, sidewalks, or other similar public improvements; 270.18 (iv) administrative costs, including the allocated cost of 270.19 the authority; 270.20 (v) public park facilities, facilities for social, 270.21 recreational, or conference purposes, or other similar public 270.22 improvements; and 270.23 (vi) transfers to funds not exclusively associated with the 270.24 district; 270.25 (15) for properties sold to developers, the total cost of 270.26 the property to the authority and the price paid by the 270.27 developer; 270.28 (16) the amount of any payments and the value of any 270.29 in-kind benefits, such as physical improvements and the use of 270.30 building space, that are paid or financed with tax increments 270.31 and are provided to another governmental unit other than the 270.32 municipality during the reporting period; 270.33 (17) the amount of any payments for activities and 270.34 improvements located outside of the district that are paid for 270.35 or financed with tax increments; 270.36 (18) the amount of payments of principal and interest that 271.1 are made during the reporting period on any nondefeased: 271.2 (i) general obligation tax increment financing bonds; 271.3 (ii) other tax increment financing bonds; and 271.4 (iii) notes and pay-as-you-go contracts; 271.5 (19) the principal amount, at the end of the reporting 271.6 period, of any nondefeased: 271.7 (i) general obligation tax increment financing bonds; 271.8 (ii) other tax increment financing bonds; and 271.9 (iii) notes and pay-as-you-go contracts; 271.10 (20) the amount of principal and interest payments that are 271.11 due for the current calendar year on any nondefeased: 271.12 (i) general obligation tax increment financing bonds; 271.13 (ii) other tax increment financing bonds; and 271.14 (iii) notes and pay-as-you-go contracts; 271.15 (21) if the fiscal disparities contribution under chapter 271.16 276A or 473F for the district is computed under section 469.177, 271.17 subdivision 3, paragraph (a), the amount of increased property 271.18 taxes imposed on other properties in the municipality that 271.19 approved the tax increment financing plan as a result of the 271.20 fiscal disparities contribution; and 271.21 (22) whether the tax increment financing plan or other 271.22 governing document permits increment revenues to be expended: 271.23 (i) to pay bonds, the proceeds of which were or may be 271.24 expended on activities outside of the district; 271.25 (ii) for deposit into a common bond fund from which money 271.26 may be expended on activities located outside of the district; 271.27 or 271.28 (iii) to otherwise finance activities located outside of 271.29 the tax increment financing district; and271.30(23) any additional information the state auditor may271.31require. 271.32 (d) The commissioner of revenue shall prescribe the method 271.33 of calculating the increased property taxes under paragraph (c), 271.34 clause (21), and the form of the statement disclosing this 271.35 information on the annual statement under subdivision 5. 271.36 (e) The reporting requirements imposed by this subdivision 272.1 apply to districts certified before, on, and after August 1, 272.2 1979. 272.3 Sec. 17. Minnesota Statutes 2000, section 469.175, 272.4 subdivision 6b, is amended to read: 272.5 Subd. 6b. [DURATION OF DISCLOSURE AND REPORTING 272.6 REQUIREMENTS.] The disclosure and reporting requirements imposed 272.7 by subdivisions 5,and 6, and 6aapply with respect to a tax 272.8 increment financing district beginning with the annual 272.9 disclosure and reports for the year in which the original net 272.10 tax capacity of the district was certified and ending with the 272.11 annual disclosure and reports for the year in which both of the 272.12 following events have occurred: 272.13 (1) decertification of the district; and 272.14 (2) expenditure or return to the county auditor of all 272.15 remaining revenues derived from tax increments paid by 272.16 properties in the district. 272.17 Sec. 18. [469.1751] [MITIGATION RELATED TO LARGE RAILROAD 272.18 PROJECTS.] 272.19 Subdivision 1. [AUTHORIZATION.] A city or county that 272.20 contains qualifying railroad property may establish a railroad 272.21 improvement tax increment financing district under this section 272.22 to pay for mitigation measures. 272.23 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 272.24 the following terms have the meanings given. 272.25 (b) "City" means a statutory or home rule charter city. 272.26 (c) "Qualifying railroad property" means the Minnesota 272.27 railroad operating property of a railroad company that 272.28 undertakes a series of improvements to its operating property if 272.29 the following requirements are met: 272.30 (1) the improvements consist of construction of new 272.31 railroad track or a substantial rebuilding of existing track; 272.32 (2) the improvements are approved by the federal Surface 272.33 Transportation Board; and 272.34 (3) the total expenditures on the improvements in Minnesota 272.35 are projected to exceed $250,000,000 over a five-year period, 272.36 based on the estimates submitted to the federal Surface 273.1 Transportation Board. 273.2 (d) "Railroad operating property" has the meaning given in 273.3 section 270.80, subdivision 3. 273.4 Subd. 3. [BEGINNING APPLICATION OF AUTHORITY.] The 273.5 authority to establish a tax increment financing district under 273.6 this section applies beginning for the first assessment year 273.7 after the commissioner of revenue determines that the railroad 273.8 company's tax capacity has increased by five percent over the 273.9 assessment year in which the federal Surface Transportation 273.10 Board approves the improvement. 273.11 Subd. 4. [AREA OF DISTRICT.] (a) If a city exercises its 273.12 authority to create a tax increment financing district under 273.13 this section, the district consists of all of the parcels 273.14 located in the city that constitute railroad operating property. 273.15 (b) If a county exercises its authority to create a tax 273.16 increment financing district under this section, the district 273.17 consists of all of the parcels located in the county, but 273.18 outside of the boundaries of a city, that constitute railroad 273.19 operating property. 273.20 Subd. 5. [ORIGINAL NET TAX CAPACITY.] The original net tax 273.21 capacity of a district established under this section is the net 273.22 tax capacity of the district for the assessment year in which 273.23 the federal Surface Transportation Board approves the 273.24 improvement, regardless of the year in which the request for 273.25 certification is made. 273.26 Subd. 6. [AUTHORITY AND PROJECT AREA.] (a) A city or 273.27 county that creates a district under this section is an 273.28 authority under section 469.174, subdivision 2, and may exercise 273.29 the powers of an authority under sections 469.174 to 469.1791 273.30 and any other related provision of law. 273.31 (b) For purposes of section 469.176, subdivision 4, or any 273.32 other provision of law, the project and project area for a 273.33 district established under this section respectively consist of 273.34 the planned railroad mitigation measures and the area in which 273.35 increments may be spent under subdivision 8. 273.36 Subd. 7. [DURATION LIMIT.] No tax increment may be paid to 274.1 the city or county after 15 years after receipt by the city or 274.2 county of the first increment for a district established under 274.3 this section. 274.4 Subd. 8. [PERMITTED USES OF INCREMENT.] (a) Increment from 274.5 a district established under this section may only be used to 274.6 pay for mitigation measures and administrative expenses. 274.7 (b) Mitigation measures include only: 274.8 (1) traffic crossing safety improvements; 274.9 (2) traffic and train vehicle conflict reduction measures 274.10 such as grade separations; 274.11 (3) improvements to connecting streets to redirect traffic 274.12 to other crossings; 274.13 (4) pedestrian safety measures; 274.14 (5) noise mitigation measures including only: 274.15 (i) sound walls; 274.16 (ii) construction of berms; 274.17 (iii) acquisition or relocation of the most severely 274.18 impacted properties; 274.19 (iv) whistle-free crossing improvements; 274.20 (v) directional horns for train crossings; and 274.21 (vi) other measures to reduce noise impacts on adjacent 274.22 properties. 274.23 (c) A city may spend increments from the district on 274.24 mitigation measures anywhere in the city that is located within 274.25 2,230 feet of the centerline of the main railroad line. A 274.26 county may spend increments from the district on mitigation 274.27 measures anywhere within the county that is located within 2,230 274.28 feet of the centerline of the main railroad line, but outside of 274.29 the boundaries of a city, or within the boundaries of a city, if 274.30 the governing body of the city approves the plan for the 274.31 spending in writing before it is undertaken. 274.32 Subd. 9. [EXEMPTIONS.] The following provisions of law 274.33 applicable to tax increment financing districts established 274.34 under sections 469.174 to 469.178 do not apply to districts 274.35 established under this section: 274.36 (1) increments from the district may be spent within or 275.1 outside the tax increment district or project area as provided 275.2 under subdivision 8, paragraph (c); 275.3 (2) section 273.1399 is satisfied if the municipality 275.4 spends an amount of its general or other unrestricted funds on 275.5 mitigation measures equal to five percent of the increment from 275.6 the district; 275.7 (3) the findings required under section 469.175, 275.8 subdivision 3, clauses (1) to (5), do not apply; 275.9 (4) the map required under section 469.175, subdivision 3, 275.10 need not be published; 275.11 (5) section 469.176, subdivision 1a, does not apply; 275.12 (6) section 469.176, subdivision 4g, does not apply; 275.13 (7) section 469.176, subdivision 6, does not apply; 275.14 (8) section 469.1763 does not apply; 275.15 (9) section 469.177, subdivision 1a, does not apply and 275.16 increment calculations must be made using the full tax rates for 275.17 the current year. 275.18[EFFECTIVE DATE.] This section is effective the day 275.19 following final enactment. 275.20 Sec. 19. Minnesota Statutes 2000, section 469.176, 275.21 subdivision 1b, is amended to read: 275.22 Subd. 1b. [DURATION LIMITS; TERMS.] (a) No tax increment 275.23 shall in any event be paid to the authority 275.24 (1) after 15 years after receipt by the authority of the 275.25 first increment for a renewal and renovation district, 275.26 (2) after 20 years after receipt by the authority of the 275.27 first increment for a soils condition district, 275.28 (3) after eight years after receipt by the authority of the 275.29 first increment for an economic development district, 275.30 (4) for a housing district or a redevelopment district, 275.31after 20 years from the date of receipt by the authority of the275.32first tax increment by the authority pursuant to section275.33469.175, subdivision 1, paragraph (b); or, if no provision is275.34made under section 469.175, subdivision 1, paragraph (b),after 275.35 25 years from the date of receipt by the authority of the first 275.36 increment. 276.1 (b) For purposes of determining a duration limit under this 276.2 subdivision or subdivision 1e that is based on the receipt of an 276.3 increment, any increments from taxes payable in the year in 276.4 which the district terminates shall be paid to the authority. 276.5 This paragraph does not affect a duration limit calculated from 276.6 the date of approval of the tax increment financing plan or 276.7 based on the recovery of costs or to a duration limit under 276.8 subdivision 1c. This paragraph does not supersede the 276.9 restrictions on payment of delinquent taxes in subdivision 1f. 276.10 (c)Except as authorized by section 469.175, subdivision 1,276.11paragraph (b),An action by the authority to waive or decline to 276.12 accept an increment has no effect for purposes of computing a 276.13 duration limit based on the receipt of increment under this 276.14 subdivision or any other provision of law. The authority is 276.15 deemed to have received an increment for any year in which it 276.16 waived or declined to accept an increment, regardless of whether 276.17 the increment was paid to the authority. 276.18 (d) Receipt by a hazardous substance subdistrict of an 276.19 increment as a result of a reduction in original net tax 276.20 capacity under section 469.174, subdivision 7, paragraph (b), 276.21 does not constitute receipt of increment by the overlying 276.22 district for purpose of calculating the duration limit under 276.23 this section. 276.24[EFFECTIVE DATE.] This section is effective for districts 276.25 for which the request for certification is made after June 30, 276.26 2001. 276.27 Sec. 20. Minnesota Statutes 2000, section 469.176, 276.28 subdivision 1e, is amended to read: 276.29 Subd. 1e. [DURATION LIMITS; HAZARDOUS SUBSTANCE 276.30 SUBDISTRICTS.] If a parcel of a district is part of a designated 276.31 hazardous substance site or a hazardous substance subdistrict, 276.32 tax increment may be paid to the authority from the parcel for 276.33 longer than the period otherwise provided by subdivisions 1 to 276.34 1f for the overlying district. The extended period for 276.35 collection of tax increment begins on the date of receipt of the 276.36 first tax increment from the parcel that is more than any tax 277.1 increment received from the parcel before the date of the 277.2 certification under section 469.174, subdivision 7, paragraph 277.3 (b), and received after the date of certification to the county 277.4 auditor described in section 469.174, subdivision 7, paragraph 277.5 (b). The extended period for collection of tax increment is the 277.6 lesser of: (1) 25 years from the date of commencement of the 277.7 extended periodor 20 years if the authority elects under277.8section 469.175, subdivision 1, paragraph (b), to defer receipt277.9of the first increment; or (2) the period necessary to recover 277.10 the costs of removal actions or remedial actions specified in a 277.11 development response action plan. 277.12[EFFECTIVE DATE.] This section is effective for requests 277.13 for certification of subdistricts made after June 30, 2001. 277.14 Sec. 21. Minnesota Statutes 2000, section 469.176, 277.15 subdivision 3, is amended to read: 277.16 Subd. 3. [LIMITATION ON ADMINISTRATIVE EXPENSES.] (a) For 277.17 districts for which certification was requested before August 1, 277.18 1979, or after June 30, 1982, no tax increment shall be used to 277.19 pay any administrative expenses for a project which exceed ten 277.20 percent of the total tax increment expenditures authorized by 277.21 the tax increment financing plan or the total tax increment 277.22 expenditures for the project, whichever is less. 277.23 (b) For districts for which certification was requested 277.24 after July 31, 1979, and before July 1, 1982, no tax increment 277.25 shall be used to pay administrative expenses, as defined in 277.26 Minnesota Statutes 1980, section 273.73, for aprojectdistrict 277.27 which exceeds five percent of the total tax increment 277.28 expenditures authorized by the tax increment financing plan or 277.29 the total tax increment expenditures for theprojectdistrict, 277.30 whichever is less. 277.31 (c) For districts for which certification was requested 277.32 after June 30, 2001, no tax increment may be used to pay any 277.33 administrative expenses for a project which exceed ten percent 277.34 of total tax increment expenditures authorized by the tax 277.35 increment financing plan or the total tax increments from the 277.36 district, whichever is less. 278.1[EFFECTIVE DATE.] This section is effective for districts 278.2 for which the request for certification is received after June 278.3 30, 2001. 278.4 Sec. 22. Minnesota Statutes 2000, section 469.176, 278.5 subdivision 4g, is amended to read: 278.6 Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a)These278.7revenues shallTax increments may not be used to circumvent 278.8 existing levy limit law. 278.9 (b) Norevenues derived fromtax increment from any 278.10 district, whether certified before or after August 1, 1979,278.11shallmay be used for the acquisition, construction, renovation, 278.12 operation, or maintenance of a building to be used primarily and 278.13 regularly for conducting the business of a municipality, county, 278.14 school district, or any other local unit of government or the 278.15 state or federal governmentor for a commons area used as a278.16public park, or a facility used for social, recreational, or278.17conference purposes. This provisionshalldoes not prohibit the 278.18 use of revenues derived from tax increments for the construction 278.19 or renovation of a parking structureor of a privately owned278.20facility for conference purposes. 278.21(b) If any publicly owned facility used for social,278.22recreational, or conference purposes and financed in whole or in278.23part from revenues derived from a district is operated or278.24managed by an entity other than the authority, the operating and278.25management policies of the facility must be approved by the278.26governing body of the authority.278.27 (c)(1) Tax increments may not be used to pay for the cost 278.28 of public improvements, equipment, or other items, if: 278.29 (i) the improvements, equipment, or other items are located 278.30 outside of the area of the tax increment financing district from 278.31 which the increments were collected; and 278.32 (ii) the improvements, equipment, or items that (A) 278.33 primarily serve a decorative or aesthetic purpose, or (B) serve 278.34 a functional purpose, but their cost is increased by more than 278.35 100 percent as a result of the selection of materials, design, 278.36 or type as compared with more commonly used materials, designs, 279.1 or types for similar improvements, equipment, or items. 279.2 (2) The provisions of this paragraph do not apply to 279.3 expenditures related to the rehabilitation of historic 279.4 structures that are: 279.5 (i) individually listed on the National Register of 279.6 Historic Places; or 279.7 (ii) a contributing element to a historic district listed 279.8 on the National Register of Historic Places. 279.9[EFFECTIVE DATE.] This section is effective for 279.10 expenditures of increment made after June 30, 2001. 279.11 Sec. 23. Minnesota Statutes 2000, section 469.176, is 279.12 amended by adding a subdivision to read: 279.13 Subd. 41. [PROHIBITED FACILITIES.] (a) No tax increment 279.14 from any district may be used for: 279.15 (1) a commons area used as a public park; or 279.16 (2) a facility used for social, recreational, or conference 279.17 purposes. 279.18 (b) This subdivision does not apply to a privately owned 279.19 facility for conference purposes or a parking structure. 279.20[EFFECTIVE DATE.] This section is effective for 279.21 expenditures of increment made after June 30, 2001, but does not 279.22 apply to (1) expenditures made before January 1, 2000; (2) 279.23 expenditures made under a binding contract entered before 279.24 January 1, 2000; or (3) expenditures made under a binding 279.25 contract entered pursuant to a letter of intent with the 279.26 developer or contractor if the letter of intent was entered 279.27 before January 1, 2000. 279.28 Sec. 24. Minnesota Statutes 2000, section 469.1763, 279.29 subdivision 3, is amended to read: 279.30 Subd. 3. [FIVE-YEAR RULE.] (a) Except for districts 279.31 subject to subdivision 7, revenues derived from tax increments 279.32 are considered to have been expended on an activity within the 279.33 district under subdivision 2 only if one of the following occurs: 279.34 (1) before or within five years after certification of the 279.35 district, the revenues are actually paid to a third party with 279.36 respect to the activity; 280.1 (2) bonds, the proceeds of which must be used to finance 280.2 the activity, are issued and sold to a third party before or 280.3 within five years after certification, the revenues are spent to 280.4 repay the bonds, and the proceeds of the bonds either are, on 280.5 the date of issuance, reasonably expected to be spent before the 280.6 end of the later of (i) the five-year period, or (ii) a 280.7 reasonable temporary period within the meaning of the use of 280.8 that term under section 148(c)(1) of the Internal Revenue Code, 280.9 or are deposited in a reasonably required reserve or replacement 280.10 fund; 280.11 (3) binding contracts with a third party are entered into 280.12 for performance of the activity before or within five years 280.13 after certification of the district and the revenues are spent 280.14 under the contractual obligation; or 280.15 (4) costs with respect to the activity are paid before or 280.16 within five years after certification of the district and the 280.17 revenues are spent to reimburse a party for payment of the 280.18 costs, including interest on unreimbursed costs. 280.19 (b) For purposes of this subdivision, bonds include 280.20 subsequent refunding bonds if the original refunded bonds meet 280.21 the requirements of paragraph (a), clause (2). 280.22 Sec. 25. Minnesota Statutes 2000, section 469.1763, 280.23 subdivision 6, is amended to read: 280.24 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 280.25 subdivision applies only to districts for which the request for 280.26 certification was made before June 2, 1997. 280.27 (b) The municipality for the district may transfer 280.28 available increments from another tax increment financing 280.29 district located in the municipality, if the transfer is 280.30 necessary to eliminate a deficit in the district to which the 280.31 increments are transferred. A deficit in the district for 280.32 purposes of this subdivision meansthe lesser of the following280.33two amounts: 280.34(1)(i)the amount due during the calendar year to pay 280.35 preexisting obligations of the district; minus the sum of: 280.36(ii)(1) the total increments to be collected from 281.1 properties located within the district that are available for 281.2 the calendar year; plus 281.3(iii)(2) total increments from properties located in other 281.4 districts in the municipality that are available to be used to 281.5 meet the district's obligations under this section, excluding 281.6 this subdivision, or other provisions of law (but excluding a 281.7 special tax under section 469.1791 and the grant program under 281.8 Laws 1997, chapter 231, article 1, section 19); or281.9(2) the reduction in increments collected from properties281.10located in the district for the calendar year as a result of the281.11changes in class rates in Laws 1997, chapter 231, article 1;281.12Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243. 281.13 (c) A preexisting obligation means bonds issued and sold 281.14 before June 2, 1997, and bonds issued to refund such bonds or to 281.15 reimburse expenditures made in conjunction with a signed 281.16 contractual agreement entered into before June 2, 1997, to the 281.17 extent that the bonds are secured by a pledge of increments from 281.18 the tax increment financing district. Bonds are considered to 281.19 be preexisting obligations under this paragraph only if: 281.20 (1) the proceeds of the bonds were spent on or before 281.21 December 31, 2000, or were deposited into a reasonably required 281.22 reserve or replacement fund; or 281.23 (2) the deficit in the district for the purposes of 281.24 paragraph (b) is determined as the lesser of the amount 281.25 determined under paragraph (b), or the amount of the reduction 281.26 in increments collected from properties located in the district 281.27 for the calendar year as a result of the changes in class rates 281.28 in Laws 1997, chapter 231, article 1; Laws 1998, chapter 389, 281.29 article 2, and Laws 1999, chapter 243. For purposes of this 281.30 subdivision, bonds exclude an obligation to reimburse or pay a 281.31 developer or owner of property located in the district for 281.32 amounts incurred or paid by the developer or owner. 281.33 (d) The municipality may require a development authority, 281.34 other than a seaway port authority, to transfer available 281.35 increments for any of its tax increment financing districts in 281.36 the municipality to make up an insufficiency in another district 282.1 in the municipality, regardless of whether the district was 282.2 established by the development authority or another development 282.3 authority. This authority applies notwithstanding any law to 282.4 the contrary, but applies only to a development authority that: 282.5 (1) was established by the municipality; or 282.6 (2) the governing body of which is appointed, in whole or 282.7 part, by the municipality or an officer of the municipality or 282.8 which consists, in whole or part, of members of the governing 282.9 body of the municipality. 282.10 (e) The authority under this subdivision to spend tax 282.11 increments outside of the area of the district from which the 282.12 tax increments were collected: 282.13 (1) in the case of expenditures for districts for which 282.14 bonds are considered to be preexisting obligations under 282.15 paragraph (c), clause (2), may only be exercised after obtaining 282.16 approval of the use of the increments, in writing, by the 282.17 commissioner of revenue; 282.18 (2) is an exception to the restrictions under section 282.19 469.176, subdivision 4i, and the other provisions of this 282.20 section, and the percentage restrictions under subdivision 2 282.21 must be calculated after deducting increments spent under this 282.22 subdivision from the total increments for the district; and 282.23 (3) applies notwithstanding the provisions of the Tax 282.24 Increment Financing Act in effect for districts for which the 282.25 request for certification was made before June 30, 1982, or any 282.26 other law to the contrary. 282.27[EFFECTIVE DATE.] This section is effective for increments 282.28 collected in 2002 and thereafter. 282.29 Sec. 26. Minnesota Statutes 2000, section 469.1763, is 282.30 amended by adding a subdivision to read: 282.31 Subd. 7. [TEN-YEAR RULE.] (a) Revenue derived from tax 282.32 increments are considered to have been expended on an activity 282.33 within the district under subdivision 2 only if one of the 282.34 following occurs: 282.35 (1) before or within ten years after certification of the 282.36 district, the revenues are actually paid to a third party within 283.1 respect to the activity; 283.2 (2) bonds, the proceeds of which must be used to finance 283.3 the activity, are issued and sold to a third party before or 283.4 within ten years after certification, the revenues are spent to 283.5 repay the bonds, and the proceeds of the bonds either are, on 283.6 the date of issuance, reasonably expected to be spent before the 283.7 end of the later of (i) the ten-year period, or (ii) a 283.8 reasonable temporary period within the meaning of the use of 283.9 that term under section 148(c)(1) of the Internal Revenue Code, 283.10 or are deposited in a reasonably required reserve or replacement 283.11 fund; 283.12 (3) binding contracts with a third party are entered into 283.13 for performance of the activity before or within ten years after 283.14 certification of the district and the revenues are spent under 283.15 the contractual obligation; or 283.16 (4) costs with respect to the activity are paid before or 283.17 within ten years after certification of the district and the 283.18 revenues are spent to reimburse a party for payment of the 283.19 costs, including interest on unreimbursed costs. 283.20 (b) For purposes of this subdivision, bonds include 283.21 subsequent refunding bonds if the original refunded bonds meet 283.22 the requirements of paragraph (a), clause (2). 283.23 (c) This subdivision applies only to a soils condition 283.24 district or a redevelopment district, and only if the county 283.25 board approves, by resolution, a request by the authority within 283.26 five years from the date of request of certification for the 283.27 district. 283.28[EFFECTIVE DATE.] This section is effective for districts 283.29 for which certification is requested after April 30, 1996. 283.30 Sec. 27. Minnesota Statutes 2000, section 469.1763, is 283.31 amended by adding a subdivision to read: 283.32 Subd. 8. [USE OF REVENUES FOR DECERTIFICATION WITH 283.33 TEN-YEAR RULE.] (a) Beginning with the 11th year following 283.34 certification of the district, the applicable in-district 283.35 percent of the revenues derived from tax increments paid by 283.36 properties in the district that remain after the expenditures 284.1 permitted under subdivision 7 must be used only to pay: 284.2 (1) outstanding bonds, as defined in subdivision 7, 284.3 paragraphs (a), clause (2), and (b); 284.4 (2) contracts, as defined in subdivision 7, paragraph (a), 284.5 clauses (3) and (4); or 284.6 (3) credit enhanced bonds to which the revenues derived 284.7 from tax increments are pledged, but only to the extent that 284.8 revenues of the district for which the credit enhanced bonds 284.9 were issued are insufficient to pay the bonds and to the extent 284.10 that the increments from the applicable pooling percent share 284.11 for the district are insufficient. 284.12 (b) When the outstanding bonds have been defeased and when 284.13 sufficient money has been set aside to pay contractual 284.14 obligations as defined in subdivision 7, paragraph (a), clauses 284.15 (3) and (4), the district must be decertified and the pledge of 284.16 tax increment discharged. 284.17 (c) This subdivision only applies to a soils condition 284.18 district or a redevelopment district if the county board 284.19 approves, by resolution, a request by the authority within five 284.20 years from the date of request of certification for the district. 284.21[EFFECTIVE DATE.] This section is effective for districts 284.22 for which certification is requested after April 30, 1996. 284.23 Sec. 28. Minnesota Statutes 2000, section 469.177, 284.24 subdivision 1, is amended to read: 284.25 Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or 284.26 after adoption of a tax increment financing plan, the auditor of 284.27 any county in which the district is situated shall, upon request 284.28 of the authority, certify the original net tax capacity of the 284.29 tax increment financing district and that portion of the 284.30 district overlying any subdistrict as described in the tax 284.31 increment financing plan and shall certify in each year 284.32 thereafter the amount by which the original net tax capacity has 284.33 increased or decreased as a result of a change in tax exempt 284.34 status of property within the district and any subdistrict, 284.35 reduction or enlargement of the district or changes pursuant to 284.36 subdivision 4. 285.1 (b) For districts approved under section 469.175, 285.2 subdivision 3, or parcels added to existing districts after May 285.3 1, 1988, if the classification under section 273.13 of property 285.4 located in a district changes to a classification that has a 285.5 different assessment ratio, the original net tax capacity of 285.6 that property must be redetermined at the time when its use is 285.7 changed as if the property had originally been classified in the 285.8 same class in which it is classified after its use is changed. 285.9 (c) The amount to be added to the original net tax capacity 285.10 of the district as a result of previously tax exempt real 285.11 property within the district becoming taxable equals the net tax 285.12 capacity of the real property as most recently assessed pursuant 285.13 to section 273.18 or, if that assessment was made more than one 285.14 year prior to the date of title transfer rendering the property 285.15 taxable, the net tax capacity assessed by the assessor at the 285.16 time of the transfer. If improvements are made to tax exempt 285.17 property after certification of the district and before the 285.18 parcel becomes taxable, the assessor shall, at the request of 285.19 the authority, separately assess the estimated market value of 285.20 the improvements. If the property becomes taxable, the county 285.21 auditor shall add to original net tax capacity, the net tax 285.22 capacity of the parcel, excluding the separately assessed 285.23 improvements. If substantial taxable improvements were made to 285.24 a parcel after certification of the district and if the property 285.25 later becomes tax exempt, in whole or part, as a result of the 285.26 authority acquiring the property through foreclosure or exercise 285.27 of remedies under a lease or other revenue agreement or as a 285.28 result of tax forfeiture, the amount to be added to the original 285.29 net tax capacity of the district as a result of the property 285.30 again becoming taxable is the amount of the parcel's value that 285.31 was included in original net tax capacity when the parcel was 285.32 first certified. The amount to be added to the original net tax 285.33 capacity of the district as a result of enlargements equals the 285.34 net tax capacity of the added real property as most recently 285.35 certified by the commissioner of revenue as of the date of 285.36 modification of the tax increment financing plan pursuant to 286.1 section 469.175, subdivision 4. 286.2 (d) For districts approved under section 469.175, 286.3 subdivision 3, or parcels added to existing districts after May 286.4 1, 1988, if the net tax capacity of a property increases because 286.5 the property no longer qualifies under the Minnesota 286.6 Agricultural Property Tax Law, section 273.111; the Minnesota 286.7 Open Space Property Tax Law, section 273.112; or the 286.8 Metropolitan Agricultural Preserves Act, chapter 473H, or 286.9 because platted, unimproved property is improved or three years 286.10 pass after approval of the plat under section 273.11, 286.11 subdivision 1, the increase in net tax capacity must be added to 286.12 the original net tax capacity. 286.13 (e) The amount to be subtracted from the original net tax 286.14 capacity of the district as a result of previously taxable real 286.15 property within the district becoming tax exempt, or a reduction 286.16 in the geographic area of the district, shall be the amount of 286.17 original net tax capacity initially attributed to the property 286.18 becoming tax exempt or being removed from the district. If the 286.19 net tax capacity of property located within the tax increment 286.20 financing district is reduced by reason of a court-ordered 286.21 abatement, stipulation agreement, voluntary abatement made by 286.22 the assessor or auditor or by order of the commissioner of 286.23 revenue, the reduction shall be applied to the original net tax 286.24 capacity of the district when the property upon which the 286.25 abatement is made has not been improved since the date of 286.26 certification of the district and to the captured net tax 286.27 capacity of the district in each year thereafter when the 286.28 abatement relates to improvements made after the date of 286.29 certification. The county auditor may specify reasonable form 286.30 and content of the request for certification of the authority 286.31 and any modification thereof pursuant to section 469.175, 286.32 subdivision 4. 286.33 (f) If a parcel of property contained a substandard 286.34 building that was demolished or removed and if the authority 286.35 elects to treat the parcel as occupied by a substandard building 286.36 under section 469.174, subdivision 10, paragraph (b), the 287.1 auditor shall certify the original net tax capacity of the 287.2 parcel using the greater of (1) the current net tax capacity of 287.3 the parcel, or (2) the estimated market value of the parcel for 287.4 the year in which the building was demolished or removed, but 287.5 applying the class rates for the current year. 287.6[EFFECTIVE DATE.] This section is effective for parcels 287.7 that become taxable after June 30, 2001, and applies to tax 287.8 increment financing districts, regardless of when the request 287.9 for certification was made. 287.10 Sec. 29. Minnesota Statutes 2000, section 469.1771, 287.11 subdivision 1, is amended to read: 287.12 Subdivision 1. [ENFORCEMENT.] (a) The owner of taxable 287.13 property located in the city, town, school district, or county 287.14 in which the tax increment financing district is located may 287.15 bring suit for equitable relief or for damages, as provided in 287.16 subdivisions 2, 3, and 4, arising out of a failure of a 287.17 municipality or authority to comply with the provisions of 287.18 sections 469.174 to469.179469.1791, or related provisions of 287.19 this chapter. The prevailing party in a suit filed under the 287.20 preceding sentence is entitled to costs, including reasonable 287.21 attorney fees. 287.22 (b)The state auditor may examine and audit political287.23subdivisions' use of tax increment financing. Without previous287.24notice, the state auditor may examine or audit accounts and287.25records on a random basis as the auditor deems to be in the287.26public interest. If the state auditor finds evidence that an287.27authority or municipality has violated a provision of the law287.28for which a remedy is provided under this section, the state287.29auditor shall forward the relevant information to the county287.30attorney.The county attorney may bring an action to enforce 287.31 the provisions of sections 469.174 to469.179469.1791 or 287.32 related provisions of this chapter, for matters referred by the287.33state auditor oron behalf of the county.If the county287.34attorney determines not to bring an action or if the county287.35attorney has not brought an action within 12 months after287.36receipt of the initial notification by the state auditor of the288.1violation, the county attorney shall notify the state auditor in288.2writing.288.3(c) If the state auditor finds an authority is not in288.4compliance with sections 469.174 to 469.179 or related288.5provisions of law, the auditor shall notify the governing body288.6of the municipality that approved the tax increment financing288.7district of its findings. The governing body of the288.8municipality must respond in writing to the state auditor within288.960 days after receiving the notification. Its written response288.10must state whether the municipality accepts, in whole or part,288.11the auditor's findings. If the municipality does not accept the288.12findings, the statement must indicate the basis for its288.13disagreement. The state auditor shall annually summarize the288.14responses it receives under this section and send the summary288.15and copies of the responses to the chairs of the committees of288.16the legislature with jurisdiction over tax increment financing.288.17(d) The state auditor shall notify the attorney general in288.18writing and provide supporting materials for a violation found288.19by the auditor, if the:288.20(1) auditor receives notification from the county attorney288.21under paragraph (b) or receives no notification for a 12-month288.22period after initially notifying the county attorney and the288.23state auditor confirms with the county attorney or the288.24municipality that no action has been brought regarding the288.25matter; and288.26(2) municipality or development authority have not288.27eliminated or resolved the violation to the satisfaction of the288.28state auditor.288.29The auditor shall provide the municipality and development288.30authority a copy of the notification sent to the attorney288.31general.288.32[EFFECTIVE DATE.] This section applies to violations 288.33 occurring after June 30, 2001. 288.34 Sec. 30. Minnesota Statutes 2000, section 469.1771, 288.35 subdivision 2a, is amended to read: 288.36 Subd. 2a. [SUSPENSION OF DISTRIBUTION OF TAX INCREMENT.] 289.1 (a) If an authority fails to make a disclosure or to submit a 289.2 report containing the information required by section 469.175, 289.3 subdivisions 5 and 6, regarding a tax increment financing 289.4 district within the time provided in section 469.175, 289.5 subdivisions 5 and 6, thestate auditorcommissioner of revenue 289.6 shall mail to the authority a written notice that it or the 289.7 municipality has failed to make the required disclosure or to 289.8 submit a required report with respect to a particular district. 289.9 Thestate auditorcommissioner of revenue shall mail the notice 289.10 on or before the third Tuesday of August of the year in which 289.11 the disclosure or report was required to be made or submitted. 289.12 The notice must describe the consequences of failing to disclose 289.13 or submit a report as provided in paragraph (b). If thestate289.14auditorcommissioner of revenue has not received a copy of a 289.15 disclosure or a report described in this paragraph on or before 289.16 the third Tuesday of November of the year in which the 289.17 disclosure or report was required to be made or submitted, the 289.18 state auditor shall mail a written notice to the county auditor 289.19 to hold the distribution of tax increment from a particular 289.20 district. 289.21 (b) Upon receiving written notice from thestate auditor289.22 commissioner of revenue to hold the distribution of tax 289.23 increment, the county auditor shall hold: 289.24 (1) 25 percent of the amount of tax increment that 289.25 otherwise would be distributed, if the distribution is made 289.26 after the third Friday in November but during the year in which 289.27 the disclosure or report was required to be made or submitted; 289.28 or 289.29 (2) 100 percent of the amount of tax increment that 289.30 otherwise would be distributed, if the distribution is made 289.31 after December 31 of the year in which the disclosure or report 289.32 was required to be made or submitted. 289.33 (c) Upon receiving the copy of the disclosure and all of 289.34 the reports described in paragraph (a) with respect to a 289.35 district regarding which thestate auditorcommissioner of 289.36 revenue has mailed to the county auditor a written notice to 290.1 hold distribution of tax increment, thestate auditor290.2 commissioner of revenue shall mail to the county auditor a 290.3 written notice lifting the hold and authorizing the county 290.4 auditor to distribute to the authority or municipality any tax 290.5 increment that the county auditor had held pursuant to paragraph 290.6 (b). Thestate auditorcommissioner of revenue shall mail the 290.7 written notice required by this paragraph within five working 290.8 days after receiving the last outstanding item. The county 290.9 auditor shall distribute the tax increment to the authority or 290.10 municipality within 15 working days after receiving the written 290.11 notice required by this paragraph. 290.12 (d) Notwithstanding any law to the contrary, any interest 290.13 that accrues on tax increment while it is being held by the 290.14 county auditor pursuant to paragraph (b) is not tax increment 290.15 and may be retained by the county. 290.16 (e) For purposes of sections 469.176, subdivisions 1a to 290.17 1g, and 469.177, subdivision 11, tax increment being held by the 290.18 county auditor pursuant to paragraph (b) is considered 290.19 distributed to or received by the authority or municipality as 290.20 of the time that it would have been distributed or received but 290.21 for paragraph (b). 290.22 Sec. 31. Minnesota Statutes 2000, section 469.178, is 290.23 amended by adding a subdivision to read: 290.24 Subd. 7. [INTERFUND LOANS.] The authority or municipality 290.25 may advance or loan money to finance expenditures under section 290.26 469.176, subdivision 4, from its general fund or any other fund 290.27 under which it has legal authority to do so. The loan or 290.28 advance must be approved, by resolution of the governing body, 290.29 before money is transferred, advanced, or spent. The terms and 290.30 conditions for repayment of the loan must be provided in writing 290.31 and include, at a minimum, the principal amount, the interest 290.32 rate, maturity, and repayment schedule. The maximum rate of 290.33 interest permitted to be charged is limited to the greater of 290.34 the rates specified under section 270.75 or 549.09. 290.35[EFFECTIVE DATE.] This section is effective for loans and 290.36 advances made after June 30, 2001. Interfund loans and advances 291.1 made before July 1, 2001, are ratified and approved, subject to 291.2 the requirement that interest accrued or paid after July 1, 291.3 2001, may not exceed the limit in this section. 291.4 Sec. 32. [469.1792] [HOUSING REPLACEMENT DISTRICTS.] 291.5 Subdivision 1. [DEFINITIONS.] As used in this section, the 291.6 terms defined in this subdivision have the meanings given. 291.7 (a) "Captured net tax capacity" means the amount by which 291.8 the current net tax capacity in a housing replacement district 291.9 exceeds the original net tax capacity, including the value of 291.10 property normally taxable as personal property by reason of its 291.11 location on or over property owned by a tax-exempt entity. 291.12 (b) "Original net tax capacity" means the net tax capacity 291.13 of all taxable real property within a housing replacement 291.14 district as certified by the commissioner of revenue for the 291.15 previous assessment year less the net tax capacity attributable 291.16 to existing improvements, provided that the request by the 291.17 authority for certification of a new housing replacement 291.18 district has been made to the county auditor by June 30. The 291.19 original net tax capacity of housing replacement districts for 291.20 which requests are filed after June 30 has an original net tax 291.21 capacity based on the current assessment year. In any case, the 291.22 original net tax capacity must be determined together with 291.23 subsequent adjustments as set forth in section 469.177, 291.24 subdivision 1, paragraph (c). In determining the original net 291.25 tax capacity, the net tax capacity of real property exempt from 291.26 taxation at the time of the request is zero, except for real 291.27 property which is tax exempt by reason of public ownership by 291.28 the requesting authority and which has been publicly owned for 291.29 less than one year prior to the date of the request for 291.30 certification, in which event the net tax capacity of the 291.31 property is the net tax capacity as most recently determined by 291.32 the commissioner of revenue. 291.33 (c) "Parcel" means a tract or plat of land established 291.34 prior to the certification of the housing replacement district 291.35 as a single unit for purposes of assessment. 291.36 (d) For housing replacement projects in the cities of 292.1 Crystal, Fridley, Minneapolis, and St. Paul "authority" means 292.2 the entity provided under Laws 1995, chapter 264, article 5, 292.3 section 44, subdivision 4, as amended by Laws 1996, chapter 471, 292.4 article 7, section 21; and Laws 1997, chapter 231, article 10, 292.5 section 12. For housing replacement projects in any other city, 292.6 "authority" means the authority as defined in section 469.174, 292.7 subdivision 2, that is designated by the governing body of the 292.8 municipality to be the authority for purposes of this section. 292.9 Subd. 2. [ESTABLISHMENT OF HOUSING REPLACEMENT DISTRICTS.] 292.10 (a) An authority may create a housing replacement project as 292.11 provided in this section. 292.12 (b) For cities of the first class, the authority may 292.13 designate up to 200 parcels in the city to be included in a 292.14 housing replacement district. For other cities, each authority 292.15 may designate up to 50 parcels in the city to be included in a 292.16 housing replacement district over the life of the district. The 292.17 only parcels that may be included in a district are (1) vacant 292.18 sites, (2) parcels containing vacant houses, or (3) parcels 292.19 containing houses that are structurally substandard, as defined 292.20 in section 469.174, subdivision 10. 292.21 (c) The city in which the authority is located must pay at 292.22 least 25 percent of the housing replacement project costs from 292.23 its general fund, a property tax levy, or other unrestricted 292.24 money, not including tax increments. 292.25 (d) The housing replacement district plan must have as its 292.26 sole object the acquisition of parcels for the purpose of 292.27 preparing the site to be sold for market rate housing. As used 292.28 in this section, "market rate housing" means housing that has a 292.29 market value that does not exceed 150 percent of the average 292.30 market value of single-family housing in that municipality. 292.31 Subd. 3. [HOUSING REPLACEMENT DISTRICT PLAN.] To establish 292.32 a housing replacement district under this section, an authority 292.33 shall adopt a housing replacement district plan that contains: 292.34 (1) a statement of the objectives and a description of the 292.35 housing replacement projects proposed by the authority for the 292.36 housing replacement district; 293.1 (2) a statement of the housing replacement district plan, 293.2 demonstrating the coordination of that plan with the city's 293.3 comprehensive plan; 293.4 (3) estimates of the following: 293.5 (i) cost of the program, including administrative expenses; 293.6 (ii) sources of revenue to finance or otherwise pay public 293.7 costs; 293.8 (iii) the most recent net tax capacity of taxable real 293.9 property within the housing replacement district; and 293.10 (iv) the estimated captured net tax capacity of the housing 293.11 replacement district at completion; 293.12 (4) statements of the authority's alternate estimates of 293.13 the impact of the housing replacement district on the net tax 293.14 capacities of all taxing jurisdictions in which the housing 293.15 replacement district is located in whole or in part. For 293.16 purposes of one statement, the municipality shall assume that 293.17 the estimated captured net tax capacity would be available to 293.18 the taxing jurisdictions without creation of the housing 293.19 replacement district, and for purposes of the second statement, 293.20 the county shall assume that none of the estimated captured net 293.21 tax capacity would be available to the taxing jurisdictions 293.22 without creation of the housing replacement district; and 293.23 (5) identification of all parcels to be included in the 293.24 district, to the extent known at the time the original housing 293.25 replacement district plan is prepared. At a minimum, the 293.26 parcels that will be included in the housing replacement 293.27 district during its first year must be identified in the 293.28 original housing replacement district plan. If parcels for 293.29 subsequent years are not specifically identified, the original 293.30 housing replacement district plan must include the criteria that 293.31 will be used by the authority to select parcels to be included 293.32 in the later years. 293.33 Subd. 4. [PROCEDURE.] The provisions of section 469.175, 293.34 subdivisions 3, 4, 5, and 6, apply to the establishment and 293.35 operation of the housing replacement districts created under 293.36 this section, except as follows: 294.1 (1) the determination specified in section 469.175, 294.2 subdivision 3, clause (1), is not required; and 294.3 (2) addition of parcels not identified in the original 294.4 housing replacement district plan is not treated as a 294.5 modification of that plan requiring an approval process provided 294.6 that the parcels added are consistent with the criteria 294.7 described in subdivision 3, clause (5). 294.8 Subd. 5. [DURATION LIMITS.] No tax increment may be paid 294.9 to the authority on each parcel in a housing replacement 294.10 district after 15 years from date of receipt by the county of 294.11 the first tax increment from that parcel. 294.12 Subd. 6. [LIMITATION ON USE OF TAX INCREMENTS.] All 294.13 revenues derived from tax increments must be used in accordance 294.14 with the housing replacement district plan. The revenues must 294.15 be used solely to pay the costs of site acquisition, relocation, 294.16 demolition of existing structures, site preparation, and 294.17 pollution abatement on parcels identified in the housing 294.18 replacement district plan, as well as public improvements and 294.19 administrative costs directly related to those parcels. 294.20 Subd. 7. [APPLICATION OF OTHER LAWS.] (a) The provisions 294.21 of section 469.177, subdivisions 1a, and 5 to 10, apply to the 294.22 computation of tax increment for the housing replacement 294.23 districts created under this section. The original local tax 294.24 rate is the rate for the year a parcel is certified for 294.25 inclusion in a housing replacement district. 294.26 (b) References in Minnesota Statutes to tax increment 294.27 financing districts created and tax increments generated under 294.28 sections 469.174 to 469.179, other than references in section 294.29 273.1399, include housing replacement districts and tax 294.30 increments subject to this section, provided that sections 294.31 469.174 to 469.179 apply only to the extent specified in this 294.32 section. 294.33 (c) Laws 1980, chapter 595, section 2, subdivision 2, does 294.34 not apply to a district created under this section. 294.35 Sec. 33. Minnesota Statutes 2000, section 469.1812, 294.36 subdivision 2, is amended to read: 295.1 Subd. 2. [GOVERNING BODY.] "Governing body" means, for a 295.2 city, the city council; for a school district, the school board; 295.3 for a county, the county board; and for a town, theannual295.4meeting of the townboard of supervisors. 295.5[EFFECTIVE DATE.] This section is effective retroactive to 295.6 May 26, 1999. 295.7 Sec. 34. Minnesota Statutes 2000, section 469.1813, 295.8 subdivision 6, is amended to read: 295.9 Subd. 6. [DURATION LIMIT.] (a) A political subdivision may 295.10 grant an abatement for a period no longer than ten years, except 295.11 as provided under paragraph (b). The subdivision may specify in 295.12 the abatement resolution a shorter duration. If the resolution 295.13 does not specify a period of time, the abatement is for eight 295.14 years. If an abatement has been granted to a parcel of property 295.15 and the period of the abatement has expired, the political 295.16 subdivision that granted the abatement may not grant another 295.17 abatement for eight years after the expiration of the first 295.18 abatement. This prohibition does not apply to improvements 295.19 added after and not subject to the first abatement. 295.20 (b) A political subdivision proposing to abate taxes for a 295.21 parcel may request, in writing, that the other political 295.22 subdivisions in which the parcel is located grant an abatement 295.23 for the property. If one of the other political subdivisions 295.24 declines, in writing, to grant an abatement or if 90 days pass 295.25 after receipt of the request to grant an abatement without a 295.26 written response from one of the political subdivisions, the 295.27 duration limit for an abatement for the parcel by the requesting 295.28 political subdivision and any other participating political 295.29 subdivision is increased to 15 years. If the political 295.30 subdivision which declined to grant an abatement later grants an 295.31 abatement for the parcel, the 15-year duration limit is reduced 295.32 by one year for each year that the declining political 295.33 subdivision grants an abatement for the parcel during the period 295.34 of the abatement granted by the requesting political 295.35 subdivision. The duration limit may not be reduced below the 295.36 limit under paragraph (a). 296.1[EFFECTIVE DATE.] This section is effective for abatements 296.2 approved after the day following final enactment. 296.3 Sec. 35. Minnesota Statutes 2000, section 475.58, 296.4 subdivision 1, is amended to read: 296.5 Subdivision 1. [APPROVAL BY ELECTORS; EXCEPTIONS.] 296.6 Obligations authorized by law or charter may be issued by any 296.7 municipality upon obtaining the approval of a majority of the 296.8 electors voting on the question of issuing the obligations, but 296.9 an election shall not be required to authorize obligations 296.10 issued: 296.11 (1) to pay any unpaid judgment against the municipality; 296.12 (2) for refunding obligations; 296.13 (3) for an improvement or improvement program, which 296.14 obligation is payable wholly or partly from the proceeds of 296.15 special assessments levied upon property specially benefited by 296.16 the improvement or by an improvement within the improvement 296.17 program, or of taxes levied upon the increased value of property 296.18 within a district for the development of which the improvement 296.19 is undertaken, including obligations which are the general 296.20 obligations of the municipality, if the municipality is entitled 296.21 to reimbursement in whole or in part from the proceeds of such 296.22 special assessments or taxes and not less than 20 percent of the 296.23 cost of the improvement or the improvement program is to be 296.24 assessed against benefited property or is to be paid from the 296.25 proceeds of federal grant funds or a combination thereof, or is 296.26 estimated to be received from such taxes within the district; 296.27 (4) payable wholly from the income of revenue producing 296.28 conveniences; 296.29 (5) under the provisions of a home rule charter which 296.30 permits the issuance of obligations of the municipality without 296.31 election; 296.32 (6) under the provisions of a law which permits the 296.33 issuance of obligations of a municipality without an election; 296.34 (7) to fund pension or retirement fund liabilities pursuant 296.35 to section 475.52, subdivision 6; 296.36 (8) under a capital improvement plan under section 373.40; 297.1 (9) to fund facilities as provided in subdivision 3; and 297.2 (10) under sections 469.1813 to 469.1815 (property tax 297.3 abatement authority bonds), if the proceeds of the bonds are not 297.4 used for a purpose prohibited under section 469.176, subdivision 297.5 4g, paragraph (b). 297.6[EFFECTIVE DATE.] This section is effective for bonds 297.7 issued or sold after the day following final enactment. 297.8 Sec. 36. Laws 2000, chapter 490, article 11, section 26, 297.9 the effective date, is amended to read: 297.10EFFECTIVE DATE: This section is effective for increments 297.11 spent after July 1, 2000, from districts for which certification 297.12 was requested afterMay 1, 1990June 30, 1982. 297.13[EFFECTIVE DATE.] This section is effective the day 297.14 following final enactment. 297.15 Sec. 37. [AIRPORT IMPACT MITIGATION; DEFINITIONS.] 297.16 Subdivision 1. [APPLICATION.] For the purposes of this 297.17 article, the terms defined in this section have the meanings 297.18 given them. 297.19 Subd. 2. [AIRPORT IMPACT ZONE.] "Airport impact zone" 297.20 means a contiguous or noncontiguous geographic area designated 297.21 by a city and approved by the commissioner as part of a 297.22 mitigation plan under section 38. 297.23 Subd. 3. [CITY.] "City" means the cities of Bloomington, 297.24 Burnsville, Eagan, Inver Grove Heights, Mendota Heights, 297.25 Minneapolis, Richfield, and St. Paul, or any of them. 297.26 Subd. 4. [COMMISSIONER.] "Commissioner" means the 297.27 commissioner of trade and economic development. 297.28 Subd. 5. [COUNCIL.] "Council" means the metropolitan 297.29 council. 297.30 Subd. 6. [DEPARTMENT.] "Department" means the department 297.31 of trade and economic development. 297.32 Subd. 7. [GOVERNING BODY.] "Governing body" means the city 297.33 council of a city. 297.34 Subd. 8. [HOUSING REPLACEMENT ACTIVITIES.] "Housing 297.35 replacement activities" means rehabilitation, acquisition, 297.36 relocation assistance, relocation of existing dwelling units, 298.1 and construction of new dwelling units, for the purpose of 298.2 replacing dwelling units eliminated by airport mitigation 298.3 activities. 298.4 Subd. 9. [IMPACT REPORT.] "Impact report" means a written 298.5 report identifying airport impacts adopted by a city under 298.6 section 38. 298.7 Subd. 10. [MITIGATION FUND.] "Mitigation fund" means the 298.8 airport impact mitigation fund established under section 39. 298.9 Subd. 11. [MITIGATION PLAN.] "Mitigation plan" means a 298.10 plan for airport impact mitigation developed by a city and 298.11 approved by the commissioner under section 38. 298.12 Subd. 12. [OBLIGATION.] "Obligation" has the meaning given 298.13 in Minnesota Statutes, section 475.51, subdivision 3. The term 298.14 includes obligations issued to refund prior obligations issued 298.15 under this article. 298.16 Subd. 13. [SCHOOL DISTRICT.] "School district" means a 298.17 school district whose jurisdiction includes all or any portion 298.18 of a city. 298.19 Sec. 38. [AIRPORT IMPACT MITIGATION PLANNING.] 298.20 Subdivision 1. [IMPACT REPORT.] A city may study and 298.21 identify airport impacts and the scope of those impacts on the 298.22 city. At the conclusion of an impact study, a city must adopt a 298.23 report of the impacts on the city. In studying airport impacts 298.24 and preparing a report, a city must take into account airport 298.25 noise impacts and additional environmental, transportation, and 298.26 economic impacts associated with expansion of the 298.27 Minneapolis-St. Paul International Airport. A city must also 298.28 consider and incorporate the overhead noise guidelines 298.29 established by the Federal Aviation Administration and 298.30 recommendations of the Low Frequency Noise Policy Committee 298.31 concerning noise impacts. 298.32 Subd. 2. [MITIGATION PLAN.] (a) After adopting an airport 298.33 impact report, a city must develop an airport mitigation plan 298.34 for an airport impact zone in the city. In developing the 298.35 mitigation plan, a city must seek to determine the most 298.36 effective measures for mitigating the impacts identified in the 299.1 impact report. A city may consider any measures for mitigating 299.2 airport impacts including, but not limited to, noise insulation 299.3 of residential and commercial buildings, land use conversion, 299.4 development of housing to replace units lost through mitigation 299.5 activities, and property value assurance programs. The 299.6 mitigation plan must include: 299.7 (1) designated boundaries of the airport impact zone; 299.8 (2) a description of recommended impact mitigation 299.9 measures; 299.10 (3) whether the plan provides for conversion of residential 299.11 land use or a description of proposed housing replacement 299.12 activities; 299.13 (4) estimates of costs of the recommended mitigation 299.14 measures and possible financing sources; 299.15 (5) an analysis of the feasibility of property tax 299.16 abatement under Minnesota Statutes, sections 469.1813 to 299.17 469.1815 as a financing source; and 299.18 (6) the estimated amount of obligations, if any, to be 299.19 issued under this article, including a description of the 299.20 proposed security for the obligations and whether the city 299.21 requests credit enhancement by the council as provided in 299.22 section 40, subdivision 2. 299.23 (b) Before initial approval of a mitigation plan, a city 299.24 must conduct a public hearing after publishing at least ten days 299.25 before the hearing a notice in a newspaper of general 299.26 circulation in the city. The hearing notice must state that the 299.27 mitigation plan and the mitigation report are available for 299.28 review in the administrative offices of the city. After initial 299.29 approval of the mitigation plan by the governing body, the city 299.30 must submit the mitigation plan and the mitigation report to the 299.31 commissioner for approval and must also submit copies to the 299.32 council and the metropolitan airports commission for review and 299.33 comment. Not more than 60 days after receipt of the city's 299.34 submission, the commissioner must approve, disapprove, or 299.35 otherwise comment on the mitigation plan. Failure by the 299.36 commissioner to approve or comment within 60 days is considered 300.1 approval of the mitigation plan. An action described in a 300.2 mitigation plan must not be financed by the mitigation fund or 300.3 an airport impact district until the mitigation plan has been 300.4 approved by the commissioner and then approved by the governing 300.5 body. 300.6 (c) Before approving any mitigation plan, the commissioner 300.7 must establish criteria for evaluating proposed airport impact 300.8 zones, airport impact districts, and mitigation measures. The 300.9 commissioner must consult with the cities, the council, and the 300.10 metropolitan airports commission in developing the criteria. 300.11 The commissioner must approve final criteria by December 31, 300.12 2001. Any mitigation plan approved under this article must be 300.13 consistent with the criteria established under this paragraph. 300.14 (d) If the mitigation plan, or any amendment under 300.15 paragraph (e), clause (3), includes credit enhancement by the 300.16 council as provided in section 40, subdivision 2, the mitigation 300.17 plan must also be approved by the council before issuance of 300.18 bonds secured under section 40, subdivision 2. 300.19 (e) A mitigation plan may be changed after the notice, 300.20 hearing, and approvals required of the original mitigation 300.21 plan. A change is permitted only to: 300.22 (1) increase the total estimated cost of mitigation 300.23 activities; 300.24 (2) increase the total estimated amount of obligations to 300.25 be issued; 300.26 (3) secure any obligations by the pledge described in 300.27 section 40, subdivision 2, if the pledge was not included in the 300.28 original plan; 300.29 (4) expand the boundaries of an airport impact zone; 300.30 (5) create or expand the boundaries of an airport impact 300.31 district; or 300.32 (6) add mitigation activities beyond the scope of 300.33 activities described in the original plan. 300.34 (f) Expenditures to implement a mitigation plan are not 300.35 considered a business subsidy under Minnesota Statutes, sections 300.36 116J.993 to 116J.995. 301.1 Sec. 39. [AIRPORT IMPACT MITIGATION FUND.] 301.2 Subdivision 1. [FUND CREATED; SOURCES.] The airport impact 301.3 mitigation fund is established in the state treasury. The 301.4 mitigation fund is administered by the commissioner for the 301.5 purposes described in this section. 301.6 Subd. 2. [RENTAL MOTOR VEHICLE TAX PROCEEDS.] The revenue 301.7 derived from the fee imposed under Minnesota Statutes, section 301.8 297A.64, subdivision 2a, is appropriated annually to the 301.9 mitigation fund beginning in the fiscal year ending in 2006 and 301.10 ending in the fiscal year ending in 2026. 301.11 Subd. 3. [USE OF REVENUES.] Amounts in the mitigation fund 301.12 may be spent only for the following purposes: 301.13 (1) to pay principal of, interest on, and redemption 301.14 premium, if any, on obligations issued by a city under this 301.15 article; 301.16 (2) to pay or reimburse a city for costs incurred to 301.17 implement a mitigation plan, including, without limit, costs of 301.18 preparing the impact report and mitigation plan; 301.19 (3) to pay a school district to mitigate decreases in 301.20 student population created by mitigation activities of a city 301.21 under the city's mitigation plan; and 301.22 (4) by the department to pay the costs of administering the 301.23 mitigation fund and related activities of the department under 301.24 this article. 301.25 Subd. 4. [PAYMENT PROVISIONS.] (a) Before disbursing any 301.26 amounts from the mitigation fund, the commissioner must 301.27 establish criteria for selecting activities identified in 301.28 subdivision 3 to be financed from the fund. The commissioner 301.29 must consult with the cities, the school districts, the council 301.30 and the metropolitan airports commission in developing the 301.31 criteria. The commissioner must approve final criteria by 301.32 December 31, 2001. The criteria must give priority to plans 301.33 which propose assisting the metropolitan airports commission in 301.34 meeting a goal of extending the soundproofing program from the 301.35 current 65 DNL to the 60 DNL by 2010 and shall take into account: 301.36 (1) the severity of airport impacts among the cities and 302.1 school districts; 302.2 (2) the type of mitigation measures required in order to 302.3 address the impacts; 302.4 (3) the cost of impact mitigation activities identified in 302.5 the mitigation plans; 302.6 (4) the amount of obligations to be issued under this act 302.7 as identified in the mitigation plans; and 302.8 (5) the amount of other revenues available to pay the costs 302.9 identified in subdivision 3. 302.10 (b) The commissioner may establish procedures for 302.11 administration of the mitigation fund as necessary, including 302.12 without limitation a process for applications, disbursement, and 302.13 reporting of expenditures. 302.14 Subd. 5. [TERMINATION OF MITIGATION FUND.] The mitigation 302.15 fund ends on the earlier of: 302.16 (1) the date by which all cities and school districts have 302.17 notified the commissioner that all costs payable from the 302.18 mitigation fund under this article have been paid; or 302.19 (2) the end of the fiscal year ending in 2030. 302.20 The balance of amounts in the mitigation fund on its termination 302.21 are credited to the state general fund. 302.22 Sec. 40. [AIRPORT IMPACT MITIGATION BONDS; SECURITY.] 302.23 Subdivision 1. [TERMS.] (a) A city may issue obligations 302.24 secured by: 302.25 (1) abatements; 302.26 (2) amounts disbursed from the airport mitigation fund; 302.27 (3) any other revenues available to the city under law; or 302.28 (4) any combination of revenue described in clauses (1) to 302.29 (3). 302.30 (b) The proceeds of obligations must be used to pay or 302.31 reimburse any costs to implement a mitigation plan, including, 302.32 without limit, costs of preparing the impact report and the 302.33 mitigation plan. The governing body may provide by resolution 302.34 that the obligations are additionally secured by the full faith 302.35 and credit of the city. Notwithstanding any other law or 302.36 charter provision, voter approval is not required and net debt 303.1 limits do not apply to obligations issued under this section. 303.2 Subd. 2. [METROPOLITAN AREA CREDIT ENHANCEMENT 303.3 PROGRAM.] (a) The council may establish an airport impact 303.4 mitigation bond credit enhancement program as provided in this 303.5 section. The council may pledge its full faith and credit and 303.6 taxing powers to obligations issued under this article if: 303.7 (1) the city so requests and the commissioner and the 303.8 council approves that pledge as part of the city's mitigation 303.9 plan; and 303.10 (2) the council finds that revenues pledged for payment of 303.11 the obligations will produce, as estimated at the time of the 303.12 pledge, at least 125 percent of the principal and interest due 303.13 on the obligations. 303.14 (b) The pledge must be made by resolution of the council. 303.15 Voter approval of obligations secured by the pledge described in 303.16 this subdivision is not required and net debt limits do not 303.17 apply. 303.18 (c) Before pledging its full faith and credit, the council 303.19 must establish criteria for approving requests for credit 303.20 enhancement under this section. The council must establish 303.21 criteria in consultation with the cities, the commissioner, and 303.22 the metropolitan airports commission. The criteria must set 303.23 forth priorities for credit enhancement that are consistent with 303.24 the priorities established by the commissioner for disbursement 303.25 from the mitigation fund under section 39 and may contain limits 303.26 on the total amount of obligations that may be credit enhanced 303.27 under this subdivision. 303.28 (d) If there is a deficiency in revenues pledged to 303.29 obligations credit enhanced under this subdivision, the council 303.30 must levy a tax against all taxable property in the metropolitan 303.31 area and advance the proceeds of the levy to the city for 303.32 deposit in the debt service fund for the obligations. The city 303.33 must reimburse the council for the advance to the extent the 303.34 deficient revenues are later collected. 303.35 (e) Taxes levied by the council because of credit 303.36 enhancement under this subdivision do not affect the amount or 304.1 rate of taxes that may be levied by the council for other 304.2 purposes and are not subject to limit as to rate or amount. 304.3 (f) The council and each city that participates in the 304.4 credit enhancement program may enter into agreements they 304.5 determine to be necessary to implement the credit enhancement 304.6 program. The agreements may extend over any period, 304.7 notwithstanding any law to the contrary. 304.8 Subd. 3. [APPLICABILITY.] This section applies in the 304.9 counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 304.10 Washington. 304.11 Sec. 41. [AURORA; TAX INCREMENT DISTRICT EXTENSION.] 304.12 Subdivision 1. [DISTRICT EXTENSION.] Notwithstanding the 304.13 provisions of Minnesota Statutes, section 469.176, subdivision 304.14 1c, upon approval of the governing body of the city of Aurora by 304.15 resolution, the housing and redevelopment authority in and for 304.16 the city of Aurora may extend to December 31, 2009, the duration 304.17 of its downtown tax increment financing district originally 304.18 certified in 1978. 304.19 Subd. 2. [SPECIAL RULES.] Increments permitted to be paid 304.20 to and retained by the authority by subdivision 1 may only be 304.21 used to: 304.22 (1) pay or defease bonds or other contractual obligations; 304.23 (2) fund public redevelopment costs within the 304.24 redevelopment project or costs provided for in the tax increment 304.25 financing plan; or 304.26 (3) pay or defease bonds issued to refund the bonds. 304.27[EFFECTIVE DATE.] This section is effective the day after 304.28 compliance with Minnesota Statutes, sections 469.1782, 304.29 subdivision 2, and 645.021, subdivision 2. 304.30 Sec. 42. [CITY OF BROOKLYN PARK REDEVELOPMENT; 304.31 DEFINITIONS.] 304.32 Subdivision 1. [AUTHORITY.] "Authority" means the Brooklyn 304.33 Park economic development authority. 304.34 Subd. 2. [CITY.] "City" means the city of Brooklyn Park, 304.35 Minnesota. 304.36 Subd. 3. [CITY COUNCIL.] "City council" means the 305.1 governing body of the city of Brooklyn Park. 305.2 Subd. 4. [ENHANCEMENT DISTRICT.] "Enhancement district" 305.3 means either of the authority tax increment districts numbered 305.4 15 and 18. 305.5 Subd. 5. [CREEK.] "Creek" means a stream that flows 305.6 through the boundaries of the city and, as of the effective date 305.7 of sections 42 and 43, is regulated by a joint powers 305.8 organization of cities, subject to the jurisdiction of the 305.9 department of natural resources, and contained on Federal 305.10 Emergency Management Association mapping. 305.11 Subd. 6. [CREEK IMPROVEMENT COSTS.] "Creek improvement 305.12 costs" means all costs related to the planning, financing, and 305.13 implementation of creek improvements as follows: 305.14 (1) water quality enhancement, including but not limited to 305.15 the construction of storm water runoff and retention facilities, 305.16 box culverts, nonpoint source water quality treatment ponds, and 305.17 aeration facilities; 305.18 (2) creek bank stabilization; 305.19 (3) wetland creation and restoration; 305.20 (4) aquatic habitat creation and restoration; 305.21 (5) creation and restoration of upland habitat for 305.22 terrestrial species, including but not limited to tree and other 305.23 plantings; 305.24 (6) the provision of side channel ponds, shallow well 305.25 structures, and drop structures; 305.26 (7) alteration and modification of channels and channel 305.27 beds; 305.28 (8) dam reconstruction; and 305.29 (9) low water crossings. 305.30 Costs described in clauses (1), (3), (4), (6), and (9) 305.31 constitute creek improvement costs only if the improvements are 305.32 contained within a qualified redevelopment district. Costs 305.33 described in clauses (2), (5), (7), and (8) constitute creek 305.34 improvement costs even if incurred outside a qualified 305.35 redevelopment district, if the costs are within the project area 305.36 and made with respect to improvements upstream from the 306.1 qualified redevelopment district. Creek improvement costs 306.2 include the cost of acquiring interests in real property 306.3 reasonably necessary to carry out the activities described in 306.4 this subdivision. 306.5 Subd. 7. [PROJECT AREA.] "Project area" means the 306.6 geographic area established pursuant to Minnesota Statutes, 306.7 section 469.028, to which the project plan applies and within 306.8 which the qualified redevelopment district is located. 306.9 Subd. 8. [PROJECT PLAN.] "Project plan" means the village 306.10 master plan/Shingle Creek corridor plan. 306.11 Subd. 9. [QUALIFIED COSTS.] "Qualified costs" means creek 306.12 improvement costs and other costs of a qualified redevelopment 306.13 district authorized by Minnesota Statutes, section 469.176, 306.14 subdivision 4. Notwithstanding the provisions of Minnesota 306.15 Statutes, section 469.176, subdivision 4g, qualified costs 306.16 include assistance for a recreation facility to be owned by a 306.17 private, nonprofit entity and located within the district. 306.18 Subd. 10. [QUALIFIED REDEVELOPMENT DISTRICT.] "Qualified 306.19 redevelopment district" means a tax increment financing 306.20 redevelopment district, as defined in Minnesota Statutes, 306.21 section 469.174, subdivision 10, paragraph (a), clause (1), the 306.22 boundaries of which are as established on May 22, 2000, and that 306.23 is located within a project area which, as of May 22, 2000, 306.24 contained the following: 306.25 (1) at least 100 acres; 306.26 (2) a creek; 306.27 (3) at least 100,000 square feet of unoccupied commercial 306.28 space; 306.29 (4) commercial property, at least 25 percent of which, by 306.30 acreage, is proposed by the project plan to be down-zoned 306.31 through conversion to housing, open space, and tax-exempt uses; 306.32 and 306.33 (5) at least 700 multifamily rental housing units, all of 306.34 which have rent structures that are affordable to persons and 306.35 families of annual income at or below 60 percent of the 306.36 Minneapolis-St. Paul median income, as determined by the United 307.1 States Department of Housing and Urban Development. 307.2[EFFECTIVE DATE.] This section is effective the day 307.3 following final enactment. 307.4 Sec. 43. [BROOKLYN PARK; REDEVELOPMENT DISTRICT.] 307.5 Subdivision 1. [AUTHORITY GRANTED.] Notwithstanding 307.6 anything to the contrary in Minnesota Statutes, sections 469.174 307.7 to 469.178, the authority may (1) expend tax increment derived 307.8 from a qualified redevelopment district for qualified costs, and 307.9 (2) pledge or expend tax increment derived from enhancement 307.10 districts, to the extent not otherwise obligated to the 307.11 enhancement districts, for the qualified costs of a qualified 307.12 redevelopment district. 307.13 Subd. 2. [LIMITATIONS.] (a) At least 30 percent of the tax 307.14 increment pledged or transferred to a qualified redevelopment 307.15 district from the enhancement districts must be utilized for 307.16 creek improvement costs. 307.17 (b) Except as otherwise described in section 42, 307.18 subdivision 6, tax increment derived from a qualified 307.19 redevelopment district, or derived from an enhancement district 307.20 and pledged or transferred to a qualified redevelopment 307.21 district, must not be expended outside of the qualified 307.22 redevelopment district boundaries. 307.23 (c) Tax increment derived from the enhancement districts 307.24 and pledged or transferred to a qualified redevelopment district 307.25 must be used exclusively for qualified costs of the qualified 307.26 redevelopment district or must be returned to the county auditor 307.27 for distribution to the municipality, county, and school 307.28 district in direct proportion to their respective local tax 307.29 rates. 307.30 (d) The boundaries of a qualified redevelopment district or 307.31 of the enhancement districts must not be modified following the 307.32 effective date of this section. 307.33 Subd. 3. [LOCAL CONTRIBUTION.] With respect to any 307.34 enhancement district to which Minnesota Statutes, section 307.35 273.1399, applies, and notwithstanding anything to the contrary 307.36 in Minnesota Statutes, section 273.1399, in determining a local 308.1 contribution for a qualified redevelopment district and the 308.2 enhancement district under Minnesota Statutes, section 273.1399, 308.3 subdivision 6, paragraph (d), tax increment derived from the 308.4 enhancement district that is pledged or transferred to a 308.5 qualified redevelopment district must be (1) subtracted from the 308.6 tax increment derived from the enhancement district, and deemed 308.7 as not derived therefrom, and added to the tax increment derived 308.8 from the qualified redevelopment district, and deemed as derived 308.9 therefrom, and (2) treated as tax increment derived from the 308.10 qualified redevelopment district for all purposes including the 308.11 listed percentage of qualifying local contribution. Any 308.12 qualifying local contributions related to a qualified 308.13 redevelopment district must be counted toward satisfaction of 308.14 the local contribution requirement for the qualified 308.15 redevelopment district, including tax increment deemed derived 308.16 from the qualified redevelopment district by operation of this 308.17 section. A local contribution is not required with respect to 308.18 the enhancement district tax increment returned to the county 308.19 auditor as provided in subdivision 2, paragraph (c). 308.20[EFFECTIVE DATE.] This section is effective the day 308.21 following final enactment. 308.22 Sec. 44. [CITY OF DULUTH; EXPENDITURE OF TAX INCREMENTS.] 308.23 Subdivision 1. [EXPENDITURES AUTHORIZED.] Notwithstanding 308.24 Minnesota Statutes, section 469.1764, the Duluth economic 308.25 development authority may expend up to $3,000,000 of tax 308.26 increments collected from development district No. 3 on 308.27 activities located outside the geographic boundaries of the 308.28 district, subject to the conditions in this section. 308.29 Subd. 2. [LOCATION OF EXPENDITURES.] Tax increments must 308.30 be spent within the area bounded by the following described 308.31 lines: 308.32 (1) to the north by a line described as follows: beginning 308.33 at the intersection of the center line of 29th Avenue West and 308.34 the southerly line of West Michigan Street, thence southwesterly 308.35 along the southerly line of West Michigan Street to the east 308.36 limit of the DM&IR railway right-of-way; thence northwesterly 309.1 along the easterly limit of the DM&IR railway right-of-way to 309.2 the centerline of West Superior Street to its intersection with 309.3 the centerline of Jenswold Street; thence southwesterly along 309.4 the centerline of Jenswold Street to its intersection with the 309.5 centerline of the Northern Pacific Railway Company's main line 309.6 to St. Paul; thence southwesterly along the centerline of the 309.7 Northern Pacific Railway Company's main line to St. Paul to its 309.8 intersection with the extended centerline of 37th Avenue West; 309.9 (2) to the west by a line described as follows: beginning 309.10 at the intersection of the centerline of the Northern Pacific 309.11 Railway Company's main line to St. Paul and the extended 309.12 centerline of 37th Avenue West; then southeasterly along said 309.13 extended centerline of 37th Avenue West to its intersection with 309.14 the centerline of Interstate highway 35; 309.15 (3) to the south by the centerline of Interstate highway 309.16 35; and 309.17 (4) to the east by the centerline of 29th Avenue West. 309.18 Subd. 3. [LIMITATIONS ON USE.] All expenditures of tax 309.19 increments permitted by this section must meet the requirements 309.20 of Minnesota Statutes, section 469.176, subdivision 4j. 309.21 Subd. 4. [LOCAL CONTRIBUTION.] The authority must by 309.22 resolution irrevocably elect to make local contributions with 309.23 respect to the district under Minnesota Statutes, section 309.24 273.1399, subdivision 6, paragraph (d), clause (1)(B), except 309.25 that the required percentage applies to the total annual 309.26 expenditures made by the authority in the area described in 309.27 subdivision 2. The authority must make the election under this 309.28 paragraph by August 1, 2001, and must notify the commissioner of 309.29 revenue of the election by September 1, 2001. If the authority 309.30 fails to make the required local contribution in any year, the 309.31 state aid reduction under Minnesota Statutes, section 273.1399, 309.32 applies to the district, except that the "qualifying net tax 309.33 capacity" is the net tax capacity attributable to the total 309.34 annual tax increment expenditures made by the authority in the 309.35 area described in subdivision 2. 309.36[EFFECTIVE DATE.] This section is effective June 1, 2001. 310.1 Sec. 45. [CITY OF LUVERNE.] 310.2 Subdivision 1. [AUTHORIZATION.] The governing body of the 310.3 city of Luverne may designate between one and three areas of the 310.4 city as border city development zones. The total area of the 310.5 zones may not exceed 100 acres. 310.6 Subd. 2. [APPLICATION OF GENERAL LAW.] (a) The provisions 310.7 of Minnesota Statutes, sections 469.1731 to 469.1735, apply to 310.8 the border city development zones designated under this section. 310.9 The governing body of the city may exercise the powers granted 310.10 under Minnesota Statutes, sections 469.1731 to 469.1735, 310.11 including powers that apply outside of the zones. 310.12 (b) The allocation under subdivision 3 for purposes of 310.13 Minnesota Statutes, section 469.1735, subdivision 2, and the 310.14 necessary amount of the allocation is appropriated to the 310.15 commissioner of revenue. 310.16 Subd. 3. [ALLOCATION OF STATE TAX REDUCTIONS.] (a) The 310.17 cumulative total amount of tax reductions for all years of the 310.18 program under Minnesota Statutes, sections 469.1731 to 469.1735, 310.19 is limited to $175,000. 310.20 (b) This allocation may be used for tax reductions provided 310.21 in Minnesota Statutes, section 469.1732 or 469.1734, or for 310.22 reimbursements under Minnesota Statutes, section 469.1735, 310.23 subdivision 3, but only if the governing body of the city of 310.24 Luverne determines that the tax reduction or offset is necessary 310.25 to enable a business to expand within a city or to attract a 310.26 business to the city. 310.27 (c) The commissioner of revenue may waive the limit under 310.28 this subdivision using the same rules and standards provided in 310.29 Minnesota Statutes, section 469.169, subdivision 12, paragraph 310.30 (b). 310.31 Subd. 4. [EFFECTIVE DATE.] This section is effective upon 310.32 compliance by the governing body of the city of Luverne with the 310.33 requirements of Minnesota Statutes, section 645.021. 310.34 Sec. 46. [MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY.] 310.35 Subdivision 1. [TIME LIMIT FOR TAX INCREMENT EXPENDITURE 310.36 EXTENDED.] Notwithstanding Minnesota Statutes, section 469.176, 311.1 subdivision 1c, revenue derived from tax increments from tax 311.2 increment financing districts created prior to August 1, 1979, 311.3 may be expended for neighborhood revitalization purposes after 311.4 April 1, 2001, under the authority in Minnesota Statutes, 311.5 section 469.1831, and Laws 1990, chapter 604, article 7, section 311.6 29, as amended by Laws 1991, chapter 291, article 10, section 311.7 2. This section applies only to revenues derived from tax 311.8 increments received on or before April 1, 2001. 311.9[EFFECTIVE DATE.] This section is effective as of April 1, 311.10 2001, after compliance with Minnesota Statutes, section 645.021, 311.11 subdivision 3. 311.12 Sec. 47. [GAYLORD; TAX INCREMENT FINANCING DISTRICT 311.13 EXTENSION.] 311.14 Notwithstanding the provisions of Minnesota Statutes, 311.15 section 469.176, subdivision 1c, or any other law, the city of 311.16 Gaylord may, by resolution, extend the duration of a tax 311.17 increment financing district originally certified in 1978. If 311.18 the city extends the district, the district is deemed to 311.19 continue to be in effect, beginning for taxes payable in 2002, 311.20 and notwithstanding the decertification of the district for 311.21 taxes payable in 2001. The city may not extend the duration 311.22 beyond December 31, 2009. Notwithstanding the provisions of 311.23 Minnesota Statutes, section 469.176, subdivision 1c, the city 311.24 may spend increments from the district on project costs other 311.25 than bonds issued before April 1, 1990. 311.26[EFFECTIVE DATE.] This section is effective upon completion 311.27 with the requirements of Minnesota Statutes, sections 469.1782 311.28 and 645.021. 311.29 Sec. 48. [HOLMAN DECREE HOUSING.] 311.30 To implement a federal court order or decree relating to 311.31 the provision of low-rent public housing finance, in whole or in 311.32 part, with federal financial assistance under section 5 of the 311.33 United States Housing Act, or any successor legislation, the 311.34 Minneapolis public housing authority or the metropolitan 311.35 council, acting under the powers of Minnesota Statutes, sections 311.36 469.001 to 469.047, may enter a cooperation agreement with the 312.1 governing body of any municipality or county within the 312.2 metropolitan area, as defined in Minnesota Statutes, section 312.3 473.121, subdivision 2, to provide exemption from all real and 312.4 personal taxes levied or imposed by the state, city, county, or 312.5 other political subdivision, for which the Minneapolis public 312.6 housing authority or the metropolitan council shall make, or 312.7 cause to be made, payments in lieu of taxes as provided under 312.8 Minnesota Statutes, section 469.040. This exemption and 312.9 obligation to make payments in lieu of taxes continues until the 312.10 housing is no longer subject to the provisions of section 5 of 312.11 the United States Housing Act, or any successor legislation. 312.12[EFFECTIVE DATE.] This section is effective with respect to 312.13 any cooperation agreement entered into on or after November 1, 312.14 1997. Any owner of low-rent public housing acquired and 312.15 renovated or constructed under a cooperation agreement under 312.16 this section may apply for abatement of the real or personal 312.17 property taxes under Minnesota Statutes, section 375.192, 312.18 notwithstanding the time limitation for filing application under 312.19 section 375.192. This section applies in the counties of Anoka, 312.20 Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 312.21 Sec. 49. [CITY OF HIBBING; TAX INCREMENT FINANCING 312.22 DISTRICT.] 312.23 Subdivision 1. [AUTHORIZATION.] The governing body of the 312.24 city of Hibbing may create a soils condition tax increment 312.25 financing district as provided in this section. The city or its 312.26 economic development authority may be the "authority" for the 312.27 purposes of Minnesota Statutes, sections 469.174 to 469.179. 312.28 Subd. 2. [SPECIAL RULES.] (a) The district established 312.29 under subdivision 1 is subject to the provisions of Minnesota 312.30 Statutes, sections 469.174 to 469.179, except as provided in 312.31 this subdivision. 312.32 (b) The district may consist of all or any portion of the 312.33 area bounded on the north by Ironworld and the extension of 312.34 county truck highway No. 5; on the west by the eastern right-of- 312.35 way of state highway No. 169; on the south by Grace Road; and on 312.36 the east by a line 1,000 yards east of the eastern right-of-way 313.1 of state highway No. 169. 313.2 (c) Minnesota Statutes, sections 469.174, subdivision 19; 313.3 469.176, subdivision 4b; and 469.1782, subdivision 1; do not 313.4 apply to this district. 313.5 (d) Upon approval of the tax increment financing plan, the 313.6 governing body of the city of Hibbing must find that the present 313.7 value of the projected cost to level or remove mining overburden 313.8 on property within the district equals or exceeds the present 313.9 value of the projected tax increments for the maximum duration 313.10 of the district permitted by the plan. 313.11 (e) Notwithstanding the provisions of Minnesota Statutes, 313.12 section 469.1763, increments from the district established under 313.13 this section may only be expended to finance the cost of (1) 313.14 grading, excavation, and related site preparation activities 313.15 within the district and (2) administrative expenses. 313.16 (f) Notwithstanding the provisions of Minnesota Statutes, 313.17 section 469.176, subdivision 1b, no tax increment may be paid to 313.18 the authority after 25 years after receipt by the authority of 313.19 the first increment for the district. 313.20 (g) The improvements to be constructed in the district may 313.21 include a privately-owned racetrack, notwithstanding the 313.22 provisions of section 469.176, subdivision 4g, clause (a). 313.23[EFFECTIVE DATE.] This section is effective upon compliance 313.24 with Minnesota Statutes, sections 469.1782, subdivision 2, and 313.25 645.021, subdivision 3. 313.26 Sec. 50. [MUNICIPAL PLEDGES OF TAX AND TAX INCREMENT.] 313.27 Subdivision 1. [CITY OF HIBBING.] The city of Hibbing may 313.28 pledge proceeds of the tax received by the city under Minnesota 313.29 Statutes, section 298.28, subdivision 2, and any tax increments 313.30 received from the district created under section 49, to pay debt 313.31 service on any obligations issued by the city or by the 313.32 commissioner of iron range resources and rehabilitation. The 313.33 proceeds of bonds that are allocable to pledged tax proceeds 313.34 must be used to pay costs that are authorized expenditures of 313.35 tax proceeds under Minnesota Statutes, section 298.28, 313.36 subdivision 2, and the proceeds of bonds that are allocable to 314.1 tax increments from the district created under section 49 must 314.2 be used to pay costs that are authorized expenditures of tax 314.3 increment under section 49. Voter approval of obligations 314.4 secured by any pledge described in this section is not required 314.5 and net debt limits do not apply. This section supplements any 314.6 other authority of the city under law to expend or pledge the 314.7 tax and tax increments described in this section. 314.8 Subd. 2. [CITY OF CHISHOLM AND BALKAN TOWNSHIP.] The city 314.9 of Chisholm and the township of Balkan, county of St. Louis, may 314.10 each pledge proceeds of the tax received by the city or the 314.11 township under Minnesota Statutes, section 298.28, subdivision 314.12 2, to pay debt service on any obligations issued by the city of 314.13 Hibbing or by the commissioner of iron range resources and 314.14 rehabilitation, as described in subdivision 1. The proceeds of 314.15 bonds that are allocable to pledged tax proceeds of the city of 314.16 Chisholm or the township of Balkan must be used to pay costs 314.17 that are authorized expenditures of tax proceeds under Minnesota 314.18 Statutes, section 298.28, subdivision 2. Voter approval of the 314.19 pledge or of obligations secured by any pledge described in this 314.20 section is not required and net debt limits do not apply. This 314.21 section supplements any other authority of the city or the 314.22 township under law to expend or pledge the tax described in this 314.23 section. 314.24[EFFECTIVE DATE.] This section is effective for the city of 314.25 Chisholm and Balkan township upon compliance by each with 314.26 Minnesota Statutes, section 645.021, subdivision 3. 314.27 Sec. 51. [CITY OF INVER GROVE HEIGHTS; LOCAL CONTRIBUTION 314.28 ELECTION.] 314.29 Notwithstanding the provisions of Minnesota Statutes, 314.30 section 273.1399, or any other law, the city of Inver Grove 314.31 Heights, by resolution approved by its city council, may at any 314.32 time elect to make a qualifying local contribution in accordance 314.33 with Minnesota Statutes, section 273.1399, subdivision 6, 314.34 paragraph (d), with respect to designated parcels within tax 314.35 increment financing district No. 4-1 of the city. The election 314.36 must be filed in the offices of the county auditor and the 315.1 commissioner of revenue. If the city elects to make a 315.2 qualifying local contribution under this section, (i) the 315.3 required qualifying contribution under Minnesota Statutes, 315.4 section 273.1399, subdivision 6, paragraph (d), must be 315.5 determined by reference to the tax increment derived from the 315.6 designated parcels in the district from and after the date of 315.7 the election; and (ii) the qualifying captured net tax capacity 315.8 of the district for purposes of Minnesota Statutes, section 315.9 273.1399, must exclude the captured net tax capacity 315.10 attributable to the designated parcels. Once an election is 315.11 made under this section it must not be revoked. 315.12[EFFECTIVE DATE.] This section is effective the day after 315.13 approval by the governing body of the city of Inver Grove 315.14 Heights and compliance with Minnesota Statutes, section 645.021, 315.15 subdivision 3. 315.16 Sec. 52. [CITY OF MEDFORD; ECONOMIC DEVELOPMENT 315.17 DISTRICTS.] 315.18 For the purposes of Minnesota Statutes, section 469.174, 315.19 subdivision 27, the city of Medford is deemed to be a small city 315.20 notwithstanding its location within ten miles of a city with a 315.21 population of 10,000 or more. 315.22[EFFECTIVE DATE.] This section is effective upon approval 315.23 by the governing body of the city of Medford and compliance with 315.24 the requirements of Minnesota Statutes, section 645.021, 315.25 subdivision 3, and applies to requests for certification of tax 315.26 increment financing districts or additions of new area to tax 315.27 increment financing districts after the day of final enactment. 315.28 Sec. 53. [CITY OF NORTH ST. PAUL; TAX INCREMENT FINANCING 315.29 GRANT.] 315.30 Notwithstanding Laws 1997, chapter 231, article 1, sections 315.31 19 and 22, as amended by Laws 1997, First Special Session 315.32 chapter 5, section 36, Laws 1999, chapter 243, article 10, 315.33 sections 16, 17, 27, and 28, and Laws 2000, chapter 490, article 315.34 11, section 36, the commissioner of revenue shall pay to the 315.35 city of North St. Paul the amount of $12,800 as a tax increment 315.36 financing grant provided for under those laws. This amount 316.1 compensates the city for the aggregate amount of the calendar 316.2 year 1999 deficits in the tax increment financing districts 316.3 within the city, as determined under the laws cited in this 316.4 section using the accrual method of accounting. The amount 316.5 authorized to be paid under this section for the calendar year 316.6 1999 tax increment financing deficits may not also be paid under 316.7 any other provision of law. The commissioner shall pay the 316.8 amount authorized under this section to the city by warrant 316.9 issued on or before 60 days after the enactment of this 316.10 section. The warrant must be drawn on the state treasury from 316.11 the appropriations made in Laws 1997, chapter 231, article 1, 316.12 section 19, and Laws 1999, chapter 243, article 10, section 27. 316.13[EFFECTIVE DATE.] This section is effective the day 316.14 following final enactment without local approval. 316.15 Sec. 54. [CITY OF PARK RAPIDS; EXTENSION OF TIME FOR 316.16 ACTIVITY IN A TAX INCREMENT FINANCING DISTRICT.] 316.17 The requirement in Minnesota Statutes, section 469.1763, 316.18 subdivision 3, that activities must be undertaken within a 316.19 five-year period from the date of certification of a tax 316.20 increment financing district must be considered to be met in the 316.21 case of redevelopment district No. 4 in the city of Park Rapids 316.22 if the activities are undertaken within six years from the date 316.23 of certification of the district. 316.24[EFFECTIVE DATE.] This section is effective upon approval 316.25 by the governing body of the city of Park Rapids and compliance 316.26 with Minnesota Statutes, section 645.021, subdivision 3. 316.27 Sec. 55. [ST. LOUIS PARK; TAX INCREMENT FINANCING 316.28 DISTRICTS LOCAL CONTRIBUTIONS.] 316.29 Subdivision 1. [LOCAL CONTRIBUTIONS AUTHORIZED.] 316.30 Notwithstanding the provisions of Laws 1995, chapter 264, 316.31 article 5, section 36; Laws 1996, chapter 464, article 1, 316.32 section 11; and Minnesota Statutes, section 469.1782, 316.33 subdivision 1, the city of St. Louis Park may elect to make 316.34 local contributions with respect to the Excelsior Boulevard 316.35 redevelopment project and the Oak Park Village tax increment 316.36 financing districts under Minnesota Statutes, section 273.1399, 317.1 subdivision 6, paragraph (d), clause (1), item (B), in lieu of 317.2 the state aid reductions, if the following conditions are 317.3 satisfied: 317.4 (1) the city makes an irrevocable election to make local 317.5 contributions with respect to the identified districts by August 317.6 1, 2001; and 317.7 (2) the city notifies the commissioner of revenue of the 317.8 election by September 1, 2001. 317.9 Subd. 2. [QUALIFYING CONTRIBUTIONS.] If the city makes the 317.10 election described in subdivision 1, contributions made by the 317.11 city or its economic development authority at any time after 317.12 January 1, 2001, and that otherwise qualify as local 317.13 contributions under Minnesota Statutes, section 273.1399, 317.14 subdivision 6, paragraph (d), qualify as local contributions for 317.15 the purposes of this section. 317.16[EFFECTIVE DATE.] This section is effective upon local 317.17 approval in compliance with the requirements of Minnesota 317.18 Statutes, section 645.021. 317.19 Sec. 56. [CITY OF ST. PAUL; HOUSING TAX INCREMENT 317.20 FINANCING DISTRICT.] 317.21 The governing body of the housing and redevelopment 317.22 authority of the city of St. Paul may create a tax increment 317.23 financing district as provided in this section for a development 317.24 containing owner-occupied residential units. 317.25 Notwithstanding the income requirements in Minnesota 317.26 Statutes, section 469.1761, subdivision 2, a tax increment 317.27 financing district located at Osceola-St. Clair connector, 300 317.28 Osceola Avenue in the city of St. Paul, is considered a housing 317.29 district under Minnesota Statutes, sections 469.174 to 469.179, 317.30 if at least 20 percent of the residential units in the project 317.31 are initially purchased and occupied by persons at or below 80 317.32 percent of the area median gross income, and the remaining units 317.33 in the project are initially purchased and occupied by persons 317.34 at or below 125 percent of the area median gross income. 317.35[EFFECTIVE DATE.] This section is effective upon approval 317.36 by the governing body of the city of St. Paul, and compliance 318.1 with Minnesota Statutes, section 645.021, subdivision 3. 318.2 Sec. 57. [ST. PAUL; TAX INCREMENT FINANCING.] 318.3 Subdivision 1. [AUTHORIZATION.] The governing body of the 318.4 housing and redevelopment authority of the city of St. Paul may 318.5 create a housing district in the area of St. Paul known as 318.6 Capitol Heights, Lot V. 318.7 Subd. 2. [INCOME REQUIREMENTS.] (a) The district 318.8 established under this section is subject to all the 318.9 requirements under Minnesota Statutes, sections 469.174 through 318.10 469.179, except the authority may elect to apply the income 318.11 limits under paragraph (b) in lieu of the limits under Minnesota 318.12 Statutes, section 469.1761, subdivision 2. 318.13 (b) To the extent the project financed with increments from 318.14 the district consists of owner occupied residential property, 318.15 the following income limits apply: 318.16 (1) at least ten percent of the units must initially be 318.17 purchased and occupied by persons at or below 60 percent of the 318.18 area median gross income; 318.19 (2) an additional ten percent of the units must initially 318.20 be purchased and occupied by persons at or below 80 percent of 318.21 the area median gross income; and 318.22 (3) the rest of the units must initially be purchased and 318.23 occupied by persons at or below 115 percent of the area median 318.24 gross income. 318.25[EFFECTIVE DATE.] This section is effective upon local 318.26 approval by the governing body of the city of St. Paul and 318.27 compliance with Minnesota Statutes, section 645.021, subdivision 318.28 3. 318.29 Sec. 58. [SOUTH ST. PAUL; SINGLE-FAMILY HOUSING.] 318.30 Due to the shortage of single-family housing in the city of 318.31 South St. Paul, the legislature finds and declares that it is a 318.32 public purpose for the city to facilitate the construction of 318.33 single-family homes to the greatest extent possible. The city 318.34 of South St. Paul may convey to a private person, firm, 318.35 partnership, corporation, or other entity a parcel of real 318.36 estate acquired from the Minnesota department of transportation 319.1 by quit claim deed, that parcel described as: "That part of the 319.2 Southwest Quarter of the Northwest Quarter of Section 28, 319.3 Township 28 North, Range 22 West, Dakota County, Minnesota, 319.4 described as follows: 319.5 Beginning at the West Quarter corner of said Section 28; 319.6 thence East on the East and West Quarter line of said Section 28 319.7 a distance of 570 feet; thence run Northwesterly to a point on 319.8 the East line of the West 221.5 feet of said Southwest Quarter 319.9 of the Northwest Quarter, distant 280 feet North of its 319.10 intersection with the East and West Quarter line of said Section 319.11 28; thence run Northwesterly to a point on the West line of said 319.12 Section 28, distant 375 feet North of the West Quarter corner 319.13 thereof; thence run South on said West section line 375 feet to 319.14 the point of beginning." 319.15 The legislature declares that the conveyance to a private 319.16 person, firm, partnership, corporation, or other entity for the 319.17 construction of single-family residential dwellings is a public 319.18 purpose. 319.19[EFFECTIVE DATE.] This section is effective without local 319.20 approval on the day following final enactment. 319.21 Sec. 59. [WASECA ECONOMIC DEVELOPMENT AUTHORITY; 319.22 EXPENDITURE OF TAX INCREMENT REVENUE.] 319.23 Notwithstanding Minnesota Statutes, sections 469.176, 319.24 subdivision 4j; and 469.1763, subdivision 2, for tax increment 319.25 financing district No. 23, established by the economic 319.26 development authority of Waseca on November 6, 2000, the city 319.27 and the authority may expend revenue derived from tax increments 319.28 from the district to pay or reimburse the cost of planning, 319.29 engineering, construction, reconstruction, repair and 319.30 improvement of exterior walls, exterior windows and doors, and 319.31 roofs of existing structures that were built before 1950 or of 319.32 properties that are owned by the city or the authority within 319.33 the original central business district, blocks 4, 5, 6, 7, 8, 319.34 and 9, of the Original Plat of Waseca, and blocks 1 and 2 of 319.35 Barneys Addition to the city of Waseca. Those costs are deemed 319.36 to be public redevelopment costs and qualified costs for 320.1 purposes of Minnesota Statutes, section 469.176, subdivisions 4 320.2 and 4j. 320.3[EFFECTIVE DATE.] This section is effective the day after 320.4 approval by the governing body of the city of Waseca and 320.5 compliance with Minnesota Statutes, section 645.021, subdivision 320.6 3. 320.7 Sec. 60. [WAYZATA HOUSING AND REDEVELOPMENT AUTHORITY; USE 320.8 OF TAX INCREMENTS FOR CONSTRUCTION OF A PUBLIC LIBRARY.] 320.9 The contract dated December 7, 1999, entered into by the 320.10 city of Wayzata with respect to the construction of a public 320.11 library and any other contracts entered into by the city of 320.12 Wayzata for the acquisition and construction of a public 320.13 library, constitute binding contracts within the meaning of 320.14 clause (2) of the second paragraph of Laws 1999, chapter 243, 320.15 article 10, section 29. Notwithstanding any other law to the 320.16 contrary, the housing and redevelopment authority in and for the 320.17 city of Wayzata may use tax increments from redevelopment tax 320.18 increment financing district No. 2 established by the housing 320.19 and redevelopment authority in and for the city of Wayzata in 320.20 1986 for the acquisition and construction of a public library. 320.21[EFFECTIVE DATE.] This section is effective the day after 320.22 approval by the governing body of the city of Wayzata and 320.23 compliance with Minnesota Statutes, section 645.021, subdivision 320.24 3. 320.25 Sec. 61. [YELLOW MEDICINE COUNTY.] 320.26 The governing body of Yellow Medicine county may elect to 320.27 extend the duration of redevelopment tax increment financing 320.28 district No. 1-1 in development district 1 by up to ten 320.29 additional years. 320.30[EFFECTIVE DATE.] This section is effective upon compliance 320.31 with the requirements of Minnesota Statutes, sections 469.1782, 320.32 subdivision 2, and 645.021. 320.33 Sec. 62. [APPROPRIATIONS.] 320.34 (a) An amount equal to the proceeds of the fee imposed 320.35 under section 4 after June 30, 2001, and before July 1, 2005, is 320.36 appropriated from the general fund to the commissioner of trade 321.1 and economic development for a redevelopment grant or grants to 321.2 the city of Richfield under Minnesota Statutes, sections 321.3 116J.561 to 116J.566. 321.4 (b) Grants made under this authority may only be used for 321.5 acquisition and site preparation of residential property in the 321.6 city of Richfield, located within the 87 decibel low frequency 321.7 sound contour as established by the metropolitan airports 321.8 commission and the city of Richfield's noise policy committee. 321.9 A property qualifies as a residential property only if the land 321.10 is improved with a building and at least 75 percent of the 321.11 square footage of the building is for single family or multiunit 321.12 residential uses. 321.13 (c) For purposes of this grant, the local match requirement 321.14 under Minnesota Statutes, section 116J.566, and the requirements 321.15 to repay sales proceeds under section 116J.567, do not apply. 321.16 Sec. 63. [REPEALER.] 321.17 Minnesota Statutes 2000, sections 469.177, subdivisions 1a 321.18 and 11; and 469.1771, subdivision 2b, are repealed. 321.19 ARTICLE 13 321.20 MINERALS TAXATION 321.21 Section 1. Minnesota Statutes 2000, section 116J.424, is 321.22 amended to read: 321.23 116J.424 [IRRRB CONTRIBUTION.] 321.24 The commissioner of the iron range resources and 321.25 rehabilitation board with approval of the board shall provide an 321.26 equal match for any loan or equity investment made for a 321.27 facility located in the tax relief area defined in section 321.28 273.134, paragraph (b), by the Minnesota minerals 21st century 321.29 fund created by section 116J.423. The match may be in the form 321.30 of a loan or equity investment, notwithstanding whether the fund 321.31 makes a loan or equity investment. The state shall not acquire 321.32 an equity interest because of an equity investment or loan by 321.33 the board and the board at its sole discretion shall decide what 321.34 interest it acquires in a project. The commissioner of trade 321.35 and economic development may require a commitment from the board 321.36 to make the match prior to disbursing money from the fund. 322.1 Sec. 2. Minnesota Statutes 2000, section 123B.75, is 322.2 amended by adding a subdivision to read: 322.3 Subd. 6b. [TACONITE PRODUCTION TAX AID.] Taconite 322.4 production tax aid received under section 298.28 must be 322.5 recognized as revenue in the fiscal year preceding its 322.6 distribution. 322.7[EFFECTIVE DATE.] This section is effective for 322.8 distributions in 2002 and thereafter. 322.9 Sec. 3. Minnesota Statutes 2000, section 126C.48, 322.10 subdivision 8, is amended to read: 322.11 Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 322.12 Reductions in levies pursuant to sections 126C.48, subdivision 322.13 1, and 273.138, must be made prior to the reductions in clause 322.14 (2). 322.15 (2) Notwithstanding any other law to the contrary, 322.16 districts which received payments pursuant to sections 298.018; 322.17 298.24 to 298.28, except an amount distributed under section 322.18 298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 322.19 298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 322.20 upon severed mineral values, or recognized revenue pursuant to 322.21 section 477A.15 or section 44; must not include a portion of 322.22 these aids in their permissible levies pursuant to those 322.23 sections, but instead must reduce the permissible levies 322.24 authorized by this chapter and chapters 120B, 122A, 123A, 123B, 322.25 124A, 124D, 125A, and 127A by the greater of the following: 322.26 (a) an amount equal to 50 percent of the total dollar 322.27 amount of the payments received pursuant to those sections or 322.28 revenue recognized pursuant to section 477A.15 or section 44 in 322.29 the previous fiscal year; or 322.30 (b) an amount equal to the total dollar amount of the 322.31 payments received pursuant to those sections or revenue 322.32 recognized pursuant to section 477A.15 in the previous fiscal 322.33 year less the product of the same dollar amount of payments or 322.34 revenue times five percent. 322.35 (3) No reduction pursuant to this subdivision shall reduce 322.36 the levy made by the district pursuant to section 126C.13, to an 323.1 amount less than the amount raised by a levy of a net tax rate 323.2 of 6.82 percent times the adjusted net tax capacity for taxes 323.3 payable in 1990 and thereafter of that district for the 323.4 preceding year as determined by the commissioner. The amount of 323.5 any increased levy authorized by referendum pursuant to section 323.6 126C.17, subdivision 9, shall not be reduced pursuant to this 323.7 subdivision. The amount of any levy authorized by section 323.8 126C.43, to make payments for bonds issued and for interest 323.9 thereon, shall not be reduced pursuant to this subdivision. 323.10 (4) Before computing the reduction pursuant to this 323.11 subdivision of the health and safety levy authorized by sections 323.12 123B.57 and 126C.40, subdivision 5, the commissioner shall 323.13 ascertain from each affected school district the amount it 323.14 proposes to levy under each section or subdivision. The 323.15 reduction shall be computed on the basis of the amount so 323.16 ascertained. 323.17 (5) Notwithstanding any law to the contrary, any amounts 323.18 received by districts in any fiscal year pursuant to sections 323.19 298.018; 298.24 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 323.20 298.405; or any law imposing a tax on severed mineral values; 323.21 and not deducted from general education aid pursuant to section 323.22 126C.21, subdivision 4, clause (2), and not applied to reduce 323.23 levies pursuant to this subdivision shall be paid by the 323.24 district to the St. Louis county auditor in the following amount 323.25 by March 15 of each year, the amount required to be subtracted 323.26 from the previous fiscal year's general education aid pursuant 323.27 to section 126C.21, subdivision 4, which is in excess of the 323.28 general education aid earned for that fiscal year. The county 323.29 auditor shall deposit any amounts received pursuant to this 323.30 clause in the St. Louis county treasury for purposes of paying 323.31 the taconite homestead credit as provided in section 273.135. 323.32 Sec. 4. Minnesota Statutes 2000, section 273.134, is 323.33 amended to read: 323.34 273.134 [TACONITE AND IRON ORE AREAS; TAX RELIEF AREA; 323.35 DEFINITIONS.] 323.36 (a) For purposes of this section and section 273.135, 324.1 "municipality" means any city, however organized, or town, and 324.2 the applicable assessment date is the date as of which property 324.3 is listed and assessed for the tax in question. 324.4 For the purposes of section 273.135, "tax relief area" 324.5 means the geographic area contained,within the boundaries of a 324.6 school district on January 2, 2000, which contains a 324.7 municipality which meets the following qualifications: 324.8 (1) it is a municipality in which the assessed valuation of 324.9 unmined iron ore on May 1, 1941, was not less than 40 percent of 324.10 the assessed valuation of all real property; or 324.11 (2) it is a municipality in which, on January 1, 1977 or 324.12 the applicable assessment date, there is a taconite 324.13 concentrating plant or where taconite is mined or quarried or 324.14 where there is located an electric generating plant which 324.15 qualifies as a taconite facility. 324.16 For purposes of this paragraph, a "tax relief area" does 324.17 not include a school district whose boundaries are more than 20 324.18 miles from a taconite mine or plant or in which the assessed 324.19 valuation of unmined iron ore on May 1, 1941, was less than 40 324.20 percent of the assessed valuation of all real property. 324.21 (b) For purposes of section 273.1391, subdivision 2, 324.22 paragraph (c), and chapter 298, "tax relief area" means the 324.23 geographic area contained within the boundaries of a school 324.24 district which contains a municipality that meets the following 324.25 qualifications: 324.26 (1) it is a municipality in which the assessed valuation of 324.27 unmined iron ore on May 1, 1941, was not less than 40 percent of 324.28 the assessed valuation of all real property; or 324.29 (2) it is a municipality in which, on January 1, 1977, or 324.30 the applicable assessment date, there is a taconite 324.31 concentrating plant or where taconite is mined or quarried or 324.32 where there is located an electric generating plant which 324.33 qualifies as a taconite facility. 324.34[EFFECTIVE DATE.] This section is effective for taxes and 324.35 aids payable and expenditures authorized in 2002 and thereafter. 324.36 Sec. 5. Minnesota Statutes 2000, section 273.135, 325.1 subdivision 1, is amended to read: 325.2 Subdivision 1. The property tax to be paid in respect to 325.3 property taxable within a tax relief area as defined in section 325.4 273.134, paragraph (a), on homestead property, as otherwise 325.5 determined by law and regardless of the market value of the 325.6 property, for all purposes shall be reduced in the amount 325.7 prescribed by subdivision 2, subject to the limitations 325.8 contained therein. 325.9[EFFECTIVE DATE.] This section is effective for taxes 325.10 payable in 2002 and thereafter. 325.11 Sec. 6. Minnesota Statutes 2000, section 273.135, 325.12 subdivision 2, is amended to read: 325.13 Subd. 2. The amount of the reduction authorized by 325.14 subdivision 1 shall be: 325.15 (a) In the case of property located within a tax relief 325.16 area as defined under section 273.134, paragraph (a), that is 325.17 within the boundaries of a municipality which meets the 325.18 qualifications prescribed in section 273.134, paragraph (a), 66 325.19 percent of the tax, provided that the reduction shall not exceed 325.20 the maximum amounts specified inclauseparagraph (c). 325.21 (b) In the case of property located within the boundaries 325.22 of a school district which qualifies as a tax relief area under 325.23 section 273.134, paragraph (a), but which is outside the 325.24 boundaries of a municipality which meets the qualifications 325.25 prescribed in section 273.134, paragraph (a), 57 percent of the 325.26 tax, provided that the reduction shall not exceed the maximum 325.27 amounts specified inclauseparagraph (c). 325.28 (c) The maximum reduction of the tax is $315.10 on property 325.29 described inclauseparagraph (a) and $289.80 on property 325.30 described inclauseparagraph (b). 325.31[EFFECTIVE DATE.] This section is effective for taxes 325.32 payable in 2002 and thereafter. 325.33 Sec. 7. Minnesota Statutes 2000, section 273.136, 325.34 subdivision 2, is amended to read: 325.35 Subd. 2. The commissioner of revenue shall determine, not 325.36 later than April 1 of each year, the amount of reduction 326.1 resulting from section 273.135 in each county containing a tax 326.2 relief area as defined by section 273.134, paragraph (b), basing 326.3 determinations on a review of abstracts of tax lists submitted 326.4 by the county auditors pursuant to section 275.29. The 326.5 commissioner may make changes in the abstracts of tax lists as 326.6 deemed necessary. The commissioner of revenue, after such 326.7 review, shall submit to the St. Louis county auditor, on or 326.8 before April 15, the amount of the first half payment payable 326.9 hereunder and on or before September 15 the amount of the second 326.10 half payment. 326.11[EFFECTIVE DATE.] This section is effective for taxes 326.12 payable in 2002 and thereafter. 326.13 Sec. 8. Minnesota Statutes 2000, section 273.1391, 326.14 subdivision 2, is amended to read: 326.15 Subd. 2. The amount of the reduction authorized by 326.16 subdivision 1 shall be: 326.17 (a) In the case of property located within a school 326.18 district which does not meet the qualifications of section 326.19 273.134 as a tax relief area, but which is located in a county 326.20 with a population of less than 100,000 in which taconite is 326.21 mined or quarried and wherein a school district is located which 326.22 does meet the qualifications of a tax relief area, and provided 326.23 that at least 90 percent of the area of the school district 326.24 which does not meet the qualifications of section 273.134 lies 326.25 within such county, 57 percent of the tax on qualified property 326.26 located in the school district that does not meet the 326.27 qualifications of section 273.134, provided that the amount of 326.28 said reduction shall not exceed the maximum amounts specified in 326.29clause (c)paragraph (d). The reduction provided by this clause 326.30 shall only be applicable to property located within the 326.31 boundaries of the county described therein. 326.32 (b) In the case of property located within a school 326.33 district which does not meet the qualifications of section 326.34 273.134 as a tax relief area, but which is located in a school 326.35 district in a county containing a city of the first class and a 326.36 qualifying municipality, but not in a school district containing 327.1 a city of the first class or adjacent to a school district 327.2 containing a city of the first class unless the school district 327.3 so adjacent contains a qualifying municipality, 57 percent of 327.4 the tax, but not to exceed the maximums specified inclause327.5(c)paragraph (d). 327.6 (c) In the case of property located within the boundaries 327.7 of a municipality that meets the qualifications in section 327.8 273.134, paragraph (b), but not the qualifications in section 327.9 273.134, paragraph (a), 66 percent of the tax, provided that the 327.10 reduction shall not exceed $315.10. In the case of property 327.11 located within the boundaries of a school district which 327.12 qualifies as a tax relief area under section 273.134, paragraph 327.13 (b), but does not qualify as a tax relief area under section 327.14 273.134, paragraph (a), but which is outside the boundaries of a 327.15 municipality which meets the qualifications of the preceding 327.16 sentence, 57 percent of the tax, provided that the reduction 327.17 shall not exceed the maximum amounts specified in paragraph (d). 327.18 (d) Except as otherwise provided in this section, the 327.19 maximum reduction of the tax is $289.80. 327.20[EFFECTIVE DATE.] This section is effective for taxes 327.21 payable in 2002 and thereafter. 327.22 Sec. 9. Minnesota Statutes 2000, section 273.1391, 327.23 subdivision 3, is amended to read: 327.24 Subd. 3. Not later than December 1, each county auditor 327.25 having jurisdiction over one or more tax relief areas defined in 327.26 subdivision 2 shall certify to the commissioner of revenue an 327.27 estimate of the total amount of the reduction, determined under 327.28 subdivision 2, in taxes payable the next succeeding year with 327.29 respect to all tax relief areas in the auditor's county. The 327.30 commissioner shall make payments to the countyby May 15 and327.31October 15 annuallyat the times provided in section 477A.015. 327.32 The county treasurer shall distribute as part of the May and 327.33 October settlements the funds received from the commissioner. 327.34[EFFECTIVE DATE.] This section is effective for payments in 327.35 2002 and thereafter. 327.36 Sec. 10. Minnesota Statutes 2000, section 276A.01, 328.1 subdivision 2, is amended to read: 328.2 Subd. 2. [AREA.] "Area" means the territory included 328.3 within all tax relief areas defined in section 273.134, 328.4 paragraph (b). 328.5[EFFECTIVE DATE.] This section is effective for taxes 328.6 payable in 2002 and thereafter. 328.7 Sec. 11. Minnesota Statutes 2000, section 298.018, 328.8 subdivision 1, is amended to read: 328.9 Subdivision 1. [WITHIN TACONITE TAX RELIEF AREA.] The 328.10 proceeds of the tax paid under sections 298.015 to 298.017 on 328.11 minerals and energy resources mined or extracted within the 328.12 taconite tax relief area defined in section 273.134, paragraph 328.13 (b), shall be allocated as follows: 328.14 (1) five percent to the city or town within which the 328.15 minerals or energy resources are mined or extracted; 328.16 (2) ten percent to the taconite municipal aid account to be 328.17 distributed as provided in section 298.282; 328.18 (3) ten percent to the school district within which the 328.19 minerals or energy resources are mined or extracted; 328.20 (4) 20 percent to a group of school districts comprised of 328.21 those school districts wherein the mineral or energy resource 328.22 was mined or extracted or in which there is a qualifying 328.23 municipality as defined by section 273.134, paragraph (b), in 328.24 direct proportion to school district indexes as follows: for 328.25 each school district, its pupil units determined under section 328.26 126C.05 for the prior school year shall be multiplied by the 328.27 ratio of the average adjusted net tax capacity per pupil unit 328.28 for school districts receiving aid under this clause as 328.29 calculated pursuant to chapters 122A, 126C, and 127A for the 328.30 school year ending prior to distribution to the adjusted net tax 328.31 capacity per pupil unit of the district. Each district shall 328.32 receive that portion of the distribution which its index bears 328.33 to the sum of the indices for all school districts that receive 328.34 the distributions; 328.35 (5) 20 percent to the county within which the minerals or 328.36 energy resources are mined or extracted; 329.1 (6) 20 percent to St. Louis county acting as the counties' 329.2 fiscal agent to be distributed as provided in sections 273.134 329.3 to 273.136; 329.4 (7) five percent to the iron range resources and 329.5 rehabilitation board for the purposes of section 298.22; 329.6 (8) five percent to the northeast Minnesota economic 329.7 protection trust fund; and 329.8 (9) five percent to the taconite environmental protection 329.9 fund. 329.10 The proceeds of the tax shall be distributed on July 15 329.11 each year. 329.12 Sec. 12. Minnesota Statutes 2000, section 298.018, 329.13 subdivision 2, is amended to read: 329.14 Subd. 2. [OUTSIDE TACONITE TAX RELIEF AREA.] The proceeds 329.15 of the tax paid under sections 298.015 to 298.017 on minerals 329.16 and energy resources mined or extracted outside of the taconite 329.17 tax relief area defined in section 273.134, paragraph (b), shall 329.18 be deposited in the general fund. 329.19 Sec. 13. Minnesota Statutes 2000, section 298.17, is 329.20 amended to read: 329.21 298.17 [OCCUPATION TAXES TO BE APPORTIONED.] 329.22 All occupation taxes paid by persons, copartnerships, 329.23 companies, joint stock companies, corporations, and 329.24 associations, however or for whatever purpose organized, engaged 329.25 in the business of mining or producing iron ore or other ores, 329.26 when collected shall be apportioned and distributed in 329.27 accordance with the Constitution of the state of Minnesota, 329.28 article X, section 3, in the manner following: 90 percent shall 329.29 be deposited in the state treasury and credited to the general 329.30 fund of which four-ninths shall be used for the support of 329.31 elementary and secondary schools; and ten percent of the 329.32 proceeds of the tax imposed by this section shall be deposited 329.33 in the state treasury and credited to the general fund for the 329.34 general support of the university. Of the moneys apportioned to 329.35 the general fund by this section there is annually appropriated 329.36 and credited to the iron range resources and rehabilitation 330.1 board account in the special revenue fund an amount equal to 330.2 that which would have been generated by a 1.5 cent tax imposed 330.3 by section 298.24 on each taxable ton produced in the preceding 330.4 calendar year, to be expended for the purposes of section 330.5 298.22. The money appropriated pursuant to this section shall 330.6 be used (1) to provide environmental development grants to local 330.7 governments located within any county in region 3 as defined in 330.8 governor's executive order number 60, issued on June 12, 1970, 330.9 which does not contain a municipality qualifying pursuant to 330.10 section 273.134, paragraph (b), or (2) to provide economic 330.11 development loans or grants to businesses located within any 330.12 such county, provided that the county board or an advisory group 330.13 appointed by the county board to provide recommendations on 330.14 economic development shall make recommendations to the iron 330.15 range resources and rehabilitation board regarding the loans. 330.16 Payment to the iron range resources and rehabilitation board 330.17 account shall be made by May 15 annually. 330.18 Of the money allocated to Koochiching county, one-third 330.19 must be paid to the Koochiching county economic development 330.20 commission. 330.21 Sec. 14. Minnesota Statutes 2000, section 298.22, 330.22 subdivision 2, is amended to read: 330.23 Subd. 2. [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 330.24 There is hereby created the iron range resources and 330.25 rehabilitation board, consisting of 13 members, five of whom are 330.26 state senators appointed by the subcommittee on committees of 330.27 the rules committee of the senate, and five of whom are 330.28 representatives, appointed by the speaker of the house of 330.29 representatives. The remaining members shall be appointed one 330.30 each by the senate majority leader, the speaker of the house of 330.31 representatives, and the governor and must be nonlegislators who 330.32 reside in a tax relief area as defined in section 273.134, 330.33 paragraph (b). The members shall be appointed in January of 330.34 every odd-numbered year, except that the initial nonlegislator 330.35 members shall be appointed by July 1, 1999, and shall serve 330.36 until January of the next odd-numbered year. Vacancies on the 331.1 board shall be filled in the same manner as the original members 331.2 were chosen. At least a majority of the legislative members of 331.3 the board shall be elected from state senatorial or legislative 331.4 districts in which over 50 percent of the residents reside 331.5 within a tax relief area as defined in section 273.134, 331.6 paragraph (b). All expenditures and projects made by the 331.7 commissioner of iron range resources and rehabilitation shall be 331.8 consistent with the priorities established in subdivision 8 and 331.9 shall first be submitted to the iron range resources and 331.10 rehabilitation board for approval by a majority of the board of 331.11 expenditures and projects for rehabilitation purposes as 331.12 provided by this section, and the method, manner, and time of 331.13 payment of all funds proposed to be disbursed shall be first 331.14 approved or disapproved by the board. The board shall 331.15 biennially make its report to the governor and the legislature 331.16 on or before November 15 of each even-numbered year. The 331.17 expenses of the board shall be paid by the state from the funds 331.18 raised pursuant to this section. 331.19 Sec. 15. Minnesota Statutes 2000, section 298.22, is 331.20 amended by adding a subdivision to read: 331.21 Subd. 8. [SPENDING PRIORITY.] In making or approving any 331.22 expenditures on programs or projects, the commissioner and the 331.23 board shall give the highest priority to programs and projects 331.24 that target relief to those areas of the taconite tax relief 331.25 area as defined in section 273.134, paragraph (b), that have the 331.26 largest percentages of job losses and population losses directly 331.27 attributable to the economic downturn in the taconite industry 331.28 since the 1980's. The commissioner and the board shall compare 331.29 the 1980 population and employment figures with the 2000 331.30 population and employment figures, and shall specifically 331.31 consider the job losses in 2000 and 2001 resulting from the 331.32 closure of LTV Steel Mining Company, in making or approving 331.33 expenditures consistent with this subdivision, as well as the 331.34 areas of residence of persons who suffered job loss for which 331.35 relief is to be targeted under this subdivision. This 331.36 subdivision supersedes any other conflicting provisions of law, 332.1 and does not preclude the commissioner and the board from making 332.2 expenditures for programs and projects in other areas. 332.3 Sec. 16. Minnesota Statutes 2000, section 298.2211, 332.4 subdivision 2, is amended to read: 332.5 Subd. 2. [AREA OF OPERATION.] Projects undertaken, 332.6 developed, or financed pursuant to this section shall be located 332.7 within the tax relief area defined in section 273.134, paragraph 332.8 (b). 332.9 Sec. 17. Minnesota Statutes 2000, section 298.2213, 332.10 subdivision 3, is amended to read: 332.11 Subd. 3. [USE OF MONEY.] The money appropriated under this 332.12 section may be used to provide loans, loan guarantees, interest 332.13 buy-downs, and other forms of participation with private sources 332.14 of financing, provided that a loan to a private enterprise must 332.15 be for a principal amount not to exceed one-half of the cost of 332.16 the project for which financing is sought, and the rate of 332.17 interest on a loan must be no less than the lesser of eight 332.18 percent or the rate of interest that is three percentage points 332.19 less than a full faith and credit obligation of the United 332.20 States government of comparable maturity, at the time that the 332.21 loan is approved. 332.22 Money appropriated in this section must be expended only in 332.23 or for the benefit of the tax relief area defined in section 332.24 273.134, paragraph (b), and as otherwise provided in this 332.25 section. 332.26 Sec. 18. Minnesota Statutes 2000, section 298.2214, 332.27 subdivision 1, is amended to read: 332.28 Subdivision 1. [CREATION OF COMMITTEE; PURPOSE.] A 332.29 committee is created to advise the commissioner of iron range 332.30 resources and rehabilitation on providing higher education 332.31 programs in the taconite tax relief area defined in section 332.32 273.134, paragraph (b). The committee is subject to section 332.33 15.059. 332.34 Sec. 19. Minnesota Statutes 2000, section 298.223, 332.35 subdivision 1, is amended to read: 332.36 Subdivision 1. [CREATION; PURPOSES.] A fund called the 333.1 taconite environmental protection fund is created for the 333.2 purpose of reclaiming, restoring and enhancing those areas of 333.3 northeast Minnesota located within a tax relief area defined in 333.4 section 273.134, paragraph (b), that are adversely affected by 333.5 the environmentally damaging operations involved in mining 333.6 taconite and iron ore and producing iron ore concentrate and for 333.7 the purpose of promoting the economic development of northeast 333.8 Minnesota. The taconite environmental protection fund shall be 333.9 used for the following purposes: 333.10 (a) to initiate investigations into matters the iron range 333.11 resources and rehabilitation board determines are in need of 333.12 study and which will determine the environmental problems 333.13 requiring remedial action; 333.14 (b) reclamation, restoration, or reforestation of minelands 333.15 not otherwise provided for by state law; 333.16 (c) local economic development projects including 333.17 construction of sewer and water systems, and other public works 333.18 located within a tax relief area defined in section 273.134, 333.19 paragraph (b); 333.20 (d) monitoring of mineral industry related health problems 333.21 among mining employees. 333.22 Sec. 20. Minnesota Statutes 2000, section 298.225, 333.23 subdivision 1, is amended to read: 333.24 Subdivision 1. (a) The distribution of the taconite 333.25 production tax as provided in section 298.28, subdivisions23 333.26 to 5, 6, paragraph (b), 7, and 8, shall equal the lesser of the 333.27 following amounts: 333.28 (1) the amount distributed pursuant to this section and 333.29 section 298.28, with respect to 1983 production if the 333.30 production for the year prior to the distribution year is no 333.31 less than42,000,00035,000,000 taxable tons. If the production 333.32 is less than42,000,00035,000,000 taxable tons, the amount of 333.33 the distributions shall be reduced proportionately at the rate 333.34 oftwo2.4 percent for each 1,000,000 tons, or part of 1,000,000 333.35 tons by which the production is less than42,000,00035,000,000 333.36 tons; or 334.1 (2)(i) for the distributions made pursuant to section 334.2 298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 334.3 (c), 40.5 percent of the amount distributed pursuant to this 334.4 section and section 298.28, with respect to 1983 production; 334.5 (ii) for the distributions made pursuant to section 298.28, 334.6 subdivision 5, paragraphs (b) and (d), 75 percent of the amount 334.7 distributed pursuant to this section and section 298.28, with 334.8 respect to 1983 production. 334.9 (b) The distribution of the taconite production tax as 334.10 provided in section 298.28, subdivision 2, shall equal the 334.11 following amount: 334.12 (1) if the production for the year prior to the 334.13 distribution year is at least 35,000,000 taxable tons, the 334.14 amount distributed pursuant to this section and section 298.28, 334.15 with respect to 1999 production; or 334.16 (2) if the production for the year prior to the 334.17 distribution year is less than 35,000,000 taxable tons, the 334.18 amount distributed pursuant to this section and section 298.28 334.19 with respect to 1999 production, reduced proportionately at the 334.20 rate of 2.4 percent for each 1,000,000 tons or part of 1,000,000 334.21 tons by which the production is less than 35,000,000 tons. 334.22[EFFECTIVE DATE; RETROACTIVE APPLICATION.] This section is 334.23 effective for distributions in 2001 and thereafter. For the 334.24 distribution paid in February 2001 only, as soon as practicable 334.25 after the date of final enactment of this act, the commissioner 334.26 of iron range resources and rehabilitation shall pay two-thirds 334.27 of any additional amounts required under this section from the 334.28 taconite environmental protection fund and one-third of any 334.29 additional amounts required under this section from the 334.30 northeast Minnesota economic protection trust fund, as directed 334.31 by the commissioner of revenue. 334.32 Sec. 21. Minnesota Statutes 2000, section 298.24, 334.33 subdivision 1, is amended to read: 334.34 Subdivision 1. (a) For concentrate produced in19992001, 334.35 2002, and 2003, there is imposed upon taconite and iron 334.36 sulphides, and upon the mining and quarrying thereof, and upon 335.1 the production of iron ore concentrate therefrom, and upon the 335.2 concentrate so produced, a tax of$2.141$2.173 per gross ton of 335.3 merchantable iron ore concentrate produced therefrom. 335.4 (b) For concentrates produced in20002004 and subsequent 335.5 years, the tax rate shall be equal to the preceding year's tax 335.6 rate plus an amount equal to the preceding year's tax rate 335.7 multiplied by the percentage increase in the implicit price 335.8 deflator from the fourth quarter of the second preceding year to 335.9 the fourth quarter of the preceding year. "Implicit price 335.10 deflator" means the implicit price deflator for the gross 335.11 domestic product prepared by the bureau of economic analysis of 335.12 the United States Department of Commerce. 335.13 (c) On concentrates produced in 1997 and thereafter, an 335.14 additional tax is imposed equal to three cents per gross ton of 335.15 merchantable iron ore concentrate for each one percent that the 335.16 iron content of the product exceeds 72 percent, when dried at 335.17 212 degrees Fahrenheit. 335.18 (d) The tax shall be imposed on the average of the 335.19 production for the current year and the previous two years. The 335.20 rate of the tax imposed will be the current year's tax rate. 335.21 This clause shall not apply in the case of the closing of a 335.22 taconite facility if the property taxes on the facility would be 335.23 higher if this clause and section 298.25 were not applicable. 335.24 (e) If the tax or any part of the tax imposed by this 335.25 subdivision is held to be unconstitutional, a tax 335.26 of$2.141$2.173 per gross ton of merchantable iron ore 335.27 concentrate produced shall be imposed. 335.28 (f) Consistent with the intent of this subdivision to 335.29 impose a tax based upon the weight of merchantable iron ore 335.30 concentrate, the commissioner of revenue may indirectly 335.31 determine the weight of merchantable iron ore concentrate 335.32 included in fluxed pellets by subtracting the weight of the 335.33 limestone, dolomite, or olivine derivatives or other basic flux 335.34 additives included in the pellets from the weight of the 335.35 pellets. For purposes of this paragraph, "fluxed pellets" are 335.36 pellets produced in a process in which limestone, dolomite, 336.1 olivine, or other basic flux additives are combined with 336.2 merchantable iron ore concentrate. No subtraction from the 336.3 weight of the pellets shall be allowed for binders, mineral and 336.4 chemical additives other than basic flux additives, or moisture. 336.5 (g)(1) Notwithstanding any other provision of this 336.6 subdivision, for the first two years of a plant's production of 336.7 direct reduced ore, no tax is imposed under this section. As 336.8 used in this paragraph, "direct reduced ore" is ore that results 336.9 in a product that has an iron content of at least 75 percent. 336.10 For the third year of a plant's production of direct reduced 336.11 ore, the rate to be applied to direct reduced ore is 25 percent 336.12 of the rate otherwise determined under this subdivision. For 336.13 the fourth such production year, the rate is 50 percent of the 336.14 rate otherwise determined under this subdivision; for the fifth 336.15 such production year, the rate is 75 percent of the rate 336.16 otherwise determined under this subdivision; and for all 336.17 subsequent production years, the full rate is imposed. 336.18 (2) Subject to clause (1), production of direct reduced ore 336.19 in this state is subject to the tax imposed by this section, but 336.20 if that production is not produced by a producer of taconite or 336.21 iron sulfides, the production of taconite or iron sulfides 336.22 consumed in the production of direct reduced iron in this state 336.23 is not subject to the tax imposed by this section on taconite or 336.24 iron sulfides. 336.25 Sec. 22. Minnesota Statutes 2000, section 298.27, is 336.26 amended to read: 336.27 298.27 [COLLECTION AND PAYMENT OF TAX.] 336.28 The taxes provided by section 298.24 shall be paid directly 336.29 to each eligible county and the iron range resources and 336.30 rehabilitation board. The commissioner of revenue shall notify 336.31 each producer of the amount to be paid each recipient prior to 336.32 February 15. Every person subject to taxes imposed by section 336.33 298.24 shall file a correct report covering the preceding year. 336.34 The report must contain the information required by the 336.35 commissioner. The report shall be filed on or before February 336.36 1. A remittance equal to 100 percent of the total tax required 337.1 to be paid hereunder shall be paid on or before February 24. On 337.2 or before February 25, except as otherwise provided in section 337.3 298.28, the county auditor shall make distribution of the 337.4 payment received by the county in the manner provided by section 337.5 298.28. Reports shall be made and hearings held upon the 337.6 determination of the tax in accordance with procedures 337.7 established by the commissioner of revenue. The commissioner of 337.8 revenue shall have authority to make reasonable rules as to the 337.9 form and manner of filing reports necessary for the 337.10 determination of the tax hereunder, and by such rules may 337.11 require the production of such information as may be reasonably 337.12 necessary or convenient for the determination and apportionment 337.13 of the tax. All the provisions of the occupation tax law with 337.14 reference to the assessment and determination of the occupation 337.15 tax, including all provisions for appeals from or review of the 337.16 orders of the commissioner of revenue relative thereto, but not 337.17 including provisions for refunds, are applicable to the taxes 337.18 imposed by section 298.24 except in so far as inconsistent 337.19 herewith. If any person subject to section 298.24 shall fail to 337.20 make the report provided for in this section at the time and in 337.21 the manner herein provided, the commissioner of revenue shall in 337.22 such case, upon information possessed or obtained, ascertain the 337.23 kind and amount of ore mined or produced and thereon find and 337.24 determine the amount of the tax due from such person. There 337.25 shall be added to the amount of tax due a penalty for failure to 337.26 report on or before February 1, which penalty shall equal ten 337.27 percent of the tax imposed and be treated as a part thereof. 337.28 If any person responsible for making a tax payment at the 337.29 time and in the manner herein provided fails to do so, there 337.30 shall be imposed a penalty equal to ten percent of the amount so 337.31 due, which penalty shall be treated as part of the tax due. 337.32 In the case of any underpayment of the tax payment required 337.33 herein, there may be added and be treated as part of the tax due 337.34 a penalty equal to ten percent of the amount so underpaid. 337.35 A person having a liability of $120,000 or more during a 337.36 calendar year must remit all liabilities by means of a funds 338.1 transfer as defined in section 336.4A-104, paragraph (a). The 338.2 funds transfer payment date, as defined in section 336.4A-401, 338.3 must be on or before the date the tax is due. If the date the 338.4 tax is due is not a funds transfer business day, as defined in 338.5 section 336.4A-105, paragraph (a), clause (4), the payment date 338.6 must be on or before the funds transfer business day next 338.7 following the date the tax is due. 338.8 Sec. 23. Minnesota Statutes 2000, section 298.28, 338.9 subdivision 1, is amended to read: 338.10 Subdivision 1. [DISTRIBUTION.] The proceeds of the taxes 338.11 collected under section 298.24, except the tax collected under 338.12 section 298.24, subdivision 2, shall, upon certification of the 338.13 commissioner of revenue, be allocated under subdivisions 2 to 338.14 12, except as otherwise provided in subdivision 4, paragraph 338.15 (f), subdivision 6, paragraph (e), and subdivision 11, paragraph 338.16 (d). 338.17 Sec. 24. Minnesota Statutes 2000, section 298.28, 338.18 subdivision 3, is amended to read: 338.19 Subd. 3. [CITIES; TOWNS.] (a) 12.5 cents per taxable ton, 338.20 less any amount distributed under subdivision 8, and paragraph 338.21 (b), must be allocated to the taconite municipal aid account to 338.22 be distributed as provided in section 298.282. 338.23 (b) An amount must be allocated to towns or cities that is 338.24 annually certified by the county auditor of a county containing 338.25 a taconite tax relief area as defined in section 273.134, 338.26 paragraph (b), within which there is (1) an organized township 338.27 if, as of January 2, 1982, more than 75 percent of the assessed 338.28 valuation of the township consists of iron ore or (2) a city if, 338.29 as of January 2, 1980, more than 75 percent of the assessed 338.30 valuation of the city consists of iron ore. 338.31 (c) The amount allocated under paragraph (b) will be the 338.32 portion of a township's or city's certified levy equal to the 338.33 proportion of (1) the difference between 50 percent of January 338.34 2, 1982, assessed value in the case of a township and 50 percent 338.35 of the January 2, 1980, assessed value in the case of a city and 338.36 its current assessed value to (2) the sum of its current 339.1 assessed value plus the difference determined in (1), provided 339.2 that the amount distributed shall not exceed $55 per capita in 339.3 the case of a township or $75 per capita in the case of a city. 339.4 For purposes of this limitation, population will be determined 339.5 according to the 1980 decennial census conducted by the United 339.6 States Bureau of the Census. If the current assessed value of 339.7 the township exceeds 50 percent of the township's January 2, 339.8 1982, assessed value, or if the current assessed value of the 339.9 city exceeds 50 percent of the city's January 2, 1980, assessed 339.10 value, this paragraph shall not apply. For purposes of this 339.11 paragraph, "assessed value," when used in reference to years 339.12 other than 1980 or 1982, means the appropriate net tax 339.13 capacities multiplied by 10.2. 339.14 Sec. 25. Minnesota Statutes 2000, section 298.28, 339.15 subdivision 4, is amended to read: 339.16 Subd. 4. [SCHOOL DISTRICTS.] (a) 22.28 cents per taxable 339.17 ton plus the increase provided in paragraph (d) must be 339.18 allocated to qualifying school districts to be distributed, 339.19 based upon the certification of the commissioner of revenue, 339.20 under paragraphs (b) and (c), except as otherwise provided in 339.21 paragraph (f). 339.22 (b) 4.46 cents per taxable ton must be distributed to the 339.23 school districts in which the lands from which taconite was 339.24 mined or quarried were located or within which the concentrate 339.25 was produced. The distribution must be based on the 339.26 apportionment formula prescribed in subdivision 2. 339.27 (c)(i) 17.82 cents per taxable ton, less any amount 339.28 distributed under paragraph (e), shall be distributed to a group 339.29 of school districts comprised of those school districts in which 339.30 the taconite was mined or quarried or the concentrate produced 339.31 or in which there is a qualifying municipality as defined by 339.32 section 273.134, paragraph (b), in direct proportion to school 339.33 district indexes as follows: for each school district, its 339.34 pupil units determined under section 126C.05 for the prior 339.35 school year shall be multiplied by the ratio of the average 339.36 adjusted net tax capacity per pupil unit for school districts 340.1 receiving aid under this clause as calculated pursuant to 340.2 chapters 122A, 126C, and 127A for the school year ending prior 340.3 to distribution to the adjusted net tax capacity per pupil unit 340.4 of the district. Each district shall receive that portion of 340.5 the distribution which its index bears to the sum of the indices 340.6 for all school districts that receive the distributions. 340.7 (ii) Notwithstanding clause (i), each school district that 340.8 receives a distribution under sections 298.018; 298.23 to 340.9 298.28, exclusive of any amount received under this clause; 340.10 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 340.11 imposing a tax on severed mineral values that is less than the 340.12 amount of its levy reduction under section 126C.48, subdivision 340.13 8, for the second year prior to the year of the distribution 340.14 shall receive a distribution equal to the difference; the amount 340.15 necessary to make this payment shall be derived from 340.16 proportionate reductions in the initial distribution to other 340.17 school districts under clause (i). 340.18 (d) Any school district described in paragraph (c) where a 340.19 levy increase pursuant to section 126C.17, subdivision 9, is 340.20 authorized by referendum, shall receive a distribution from a 340.21 fund that receives a distribution in 1998 of 21.3 cents per 340.22 ton. On July 15 of 1999, and each year thereafter, the increase 340.23 over the amount established for the prior year shall be 340.24 determined according to the increase in the implicit price 340.25 deflator as provided in section 298.24, subdivision 1. Each 340.26 district shall receive the product of: 340.27 (i) $175 times the pupil units identified in section 340.28 126C.05, subdivision 1, enrolled in the second previous year or 340.29 the 1983-1984 school year, whichever is greater, less the 340.30 product of 1.8 percent times the district's taxable net tax 340.31 capacity in the second previous year; times 340.32 (ii) the lesser of: 340.33 (A) one, or 340.34 (B) the ratio of the sum of the amount certified pursuant 340.35 to section 126C.17, subdivision 6, in the previous year, plus 340.36 the amount certified pursuant to section 126C.17, subdivision 8, 341.1 in the previous year, plus the referendum aid according to 341.2 section 126C.17, subdivision 7, for the current year, plus an 341.3 amount equal to the reduction under section 126C.17, subdivision 341.4 12, to the product of 1.8 percent times the district's taxable 341.5 net tax capacity in the second previous year. 341.6 If the total amount provided by paragraph (d) is 341.7 insufficient to make the payments herein required then the 341.8 entitlement of $175 per pupil unit shall be reduced uniformly so 341.9 as not to exceed the funds available. Any amounts received by a 341.10 qualifying school district in any fiscal year pursuant to 341.11 paragraph (d) shall not be applied to reduce general education 341.12 aid which the district receives pursuant to section 126C.13 or 341.13 the permissible levies of the district. Any amount remaining 341.14 after the payments provided in this paragraph shall be paid to 341.15 the commissioner of iron range resources and rehabilitation who 341.16 shall deposit the same in the taconite environmental protection 341.17 fund and the northeast Minnesota economic protection trust fund 341.18 as provided in subdivision 11. 341.19 Each district receiving money according to this paragraph 341.20 shall reserve $25 times the number of pupil units in the 341.21 district. It may use the money for early childhood programs or 341.22 for outcome-based learning programs that enhance the academic 341.23 quality of the district's curriculum. The outcome-based 341.24 learning programs must be approved by the commissioner of 341.25 children, families, and learning. 341.26 (e) There shall be distributed to any school district the 341.27 amount which the school district was entitled to receive under 341.28 section 298.32 in 1975. 341.29 (f) Notwithstanding anything to the contrary in this 341.30 subdivision, beginning with the year 2002 distribution, the 341.31 amount necessary for distributions to school districts under 341.32 paragraphs (b), (c), and (e) and section 298.225 is annually 341.33 appropriated, upon certification by the commissioner of revenue, 341.34 to the commissioner of children, families, and learning from the 341.35 general fund. On July 1, the commissioner of children, 341.36 families, and learning shall distribute the appropriation in the 342.1 manner provided by section 298.27. 342.2 Sec. 26. Minnesota Statutes 2000, section 298.28, 342.3 subdivision 6, is amended to read: 342.4 Subd. 6. [PROPERTY TAX RELIEF.] (a) In1999, 38.812002, 342.5 35.9 cents per taxable ton, less any amount required to be 342.6 distributed under paragraphs (b) and (c), and less any amount 342.7 required to be deducted under paragraph (d), must be allocated 342.8 to St. Louis county acting as the counties' fiscal agent, to be 342.9 distributed as provided in sections 273.134 to 273.136. 342.10 (b) If an electric power plant owned by and providing the 342.11 primary source of power for a taxpayer mining and concentrating 342.12 taconite is located in a county other than the county in which 342.13 the mining and the concentrating processes are conducted, .1875 342.14 cent per taxable ton of the tax imposed and collected from such 342.15 taxpayer shall be paid to the county. 342.16 (c) If an electric power plant owned by and providing the 342.17 primary source of power for a taxpayer mining and concentrating 342.18 taconite is located in a school district other than a school 342.19 district in which the mining and concentrating processes are 342.20 conducted, .7282 cent per taxable ton of the tax imposed and 342.21 collected from the taxpayer shall be paid to the school district. 342.22 (d) Two cents per taxable ton must be deducted from the 342.23 amount allocated to the St. Louis county auditor under paragraph 342.24 (a). 342.25 (e) Notwithstanding anything to the contrary in this 342.26 subdivision, beginning with the year 2002 distribution, the 342.27 amount necessary for distributions to school districts under 342.28 paragraph (c) is annually appropriated, upon certification by 342.29 the commissioner of revenue, to the commissioner of children, 342.30 families, and learning from the general fund. On July 1, the 342.31 commissioner of children, families, and learning shall 342.32 distribute the appropriation in the manner provided by section 342.33 298.27. 342.34[EFFECTIVE DATE.] This section is effective for 342.35 distributions in 2002 and thereafter. 342.36 Sec. 27. Minnesota Statutes 2000, section 298.28, 343.1 subdivision 7, is amended to read: 343.2 Subd. 7. [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 343.3 For the 1998 distribution, 6.5 cents per taxable ton shall be 343.4 paid to the iron range resources and rehabilitation board for 343.5 the purposes of section 298.22. That amount shall be increased 343.6 in 1999 and subsequent years in the same proportion as the 343.7 increase in the implicit price deflator as provided in section 343.8 298.24, subdivision 1. The amount distributed pursuant to this 343.9 subdivision shall be expended within or for the benefit of a tax 343.10 relief area defined in section 273.134, paragraph (b). No part 343.11 of the fund provided in this subdivision may be used to provide 343.12 loans for the operation of private business unless the loan is 343.13 approved by the governor. 343.14 Sec. 28. Minnesota Statutes 2000, section 298.28, 343.15 subdivision 9, is amended to read: 343.16 Subd. 9. [MINNESOTA ECONOMIC PROTECTION TRUST FUND.] In 343.17 1999 and subsequent years, 3.35 cents per taxable ton shall be 343.18 paid to the northeast Minnesota economic protection trust fund. 343.19 Sec. 29. Minnesota Statutes 2000, section 298.28, 343.20 subdivision 9a, is amended to read: 343.21 Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 343.22 cents per ton for distributions in 1999, 2000, 2001, and 2002343.23 through 2004 must be paid to the taconite economic development 343.24 fund. No distribution shall be made under this paragraph in any 343.25 year in which total industry production falls below 30 million 343.26 tons. 343.27 (b) An amount equal to 50 percent of the tax under section 343.28 298.24 for concentrate sold in the form of pellet chips and 343.29 fines not exceeding 5/16 inch in size and not including crushed 343.30 pellets shall be paid to the taconite economic development 343.31 fund. The amount paid shall not exceed $700,000 annually for 343.32 all companies. If the initial amount to be paid to the fund 343.33 exceeds this amount, each company's payment shall be prorated so 343.34 the total does not exceed $700,000. 343.35 Sec. 30. Minnesota Statutes 2000, section 298.28, 343.36 subdivision 9b, is amended to read: 344.1 Subd. 9b. [TACONITE ENVIRONMENTAL FUND.]FiveFifteen 344.2 cents per ton for distributions in 1999, 2000, 2001, and 2002344.3 through 2004 must be paid to the taconite environmental fund for 344.4 use under section 298.2961. No distribution may be made under 344.5 this paragraph in any year in which total industry production 344.6 falls below 30,000,000 tons. 344.7 Sec. 31. Minnesota Statutes 2000, section 298.28, 344.8 subdivision 10, is amended to read: 344.9 Subd. 10. [INCREASE.] Beginning with distributions in 344.10 2000, theamountsamount determined undersubdivisions 6,344.11paragraph (a), andsubdivision 9 shall be increased in the same 344.12 proportion as the increase in the implicit price deflator as 344.13 provided in section 298.24, subdivision 1. Beginning with 344.14 distributions in 2003, the amount determined under subdivision 344.15 6, paragraph (a), shall be increased in the same proportion as 344.16 the increase in the implicit price deflator as provided in 344.17 section 298.24, subdivision 1. 344.18 The distributions per ton determined under subdivisions 5, 344.19 paragraphs (b) and (d), and 6, paragraph (b), for distribution 344.20 in 1988 and subsequent years shall be the distribution per ton 344.21 determined for distribution in 1987. The distribution per ton 344.22 under subdivision 6, paragraph (c), for distribution in 2000 and 344.23 subsequent years shall be 81 percent of the distribution per ton 344.24 determined for distribution in 1987. 344.25[EFFECTIVE DATE.] This section is effective for 344.26 distributions in 2002 and thereafter. 344.27 Sec. 32. Minnesota Statutes 2000, section 298.28, 344.28 subdivision 11, is amended to read: 344.29 Subd. 11. [REMAINDER.] (a) The proceeds of the tax imposed 344.30 by section 298.24 which remain after the distributions and 344.31 payments in subdivisions 2 to 10a, as certified by the 344.32 commissioner of revenue, and paragraphs (b), (c), and (d) have 344.33 been made, together with interest earned on all money 344.34 distributed under this section prior to distribution, shall be 344.35 divided between the taconite environmental protection fund 344.36 created in section 298.223 and the northeast Minnesota economic 345.1 protection trust fund created in section 298.292 as follows: 345.2 Two-thirds to the taconite environmental protection fund and 345.3 one-third to the northeast Minnesota economic protection trust 345.4 fund. The proceeds shall be placed in the respective special 345.5 accounts. In this paragraph, the terms "distributions and 345.6 payments" and "all money distributed under this section" do not 345.7 mean distributions from general fund appropriations. 345.8 (b) There shall be distributed to each city, town, and 345.9 county the amount that it received under section 294.26 in 345.10 calendar year 1977; provided, however, that the amount 345.11 distributed in 1981 to the unorganized territory number 2 of 345.12 Lake county and the town of Beaver Bay based on the 345.13 between-terminal trackage of Erie Mining Company will be 345.14 distributed in 1982 and subsequent years to the unorganized 345.15 territory number 2 of Lake county and the towns of Beaver Bay 345.16 and Stony River based on the miles of track of Erie Mining 345.17 Company in each taxing district. 345.18 (c) There shall be distributed to the iron range resources 345.19 and rehabilitation board the amounts it received in 1977 under 345.20 section 298.22. The amount distributed under this paragraph 345.21 shall be expended within or for the benefit of the tax relief 345.22 area defined in section 273.134, paragraph (b). 345.23 (d) There shall be distributed to each school district 81 345.24 percent of the amount that it received under section 294.26 in 345.25 calendar year 1977, except that, beginning with the year 2002 345.26 distribution, the amount necessary for distributions to school 345.27 districts is annually appropriated, upon certification by the 345.28 commissioner of revenue, to the commissioner of children, 345.29 families, and learning from the general fund. On July 1, the 345.30 commissioner of children, families, and learning shall 345.31 distribute the appropriation as provided in this paragraph. 345.32 Sec. 33. Minnesota Statutes 2000, section 298.28, 345.33 subdivision 15, is amended to read: 345.34 Subd. 15. [DISTRIBUTION OF DELAYED PAYMENTS.] 345.35 Notwithstanding any other provision of this section or any other 345.36 law, if payment of taxes collected under section 298.24 is 346.1 delayed past the due date because the taxpayer is a debtor in a 346.2 pending bankruptcy proceeding, the amount paid shall be 346.3 distributed as follows when received: 346.4 (1) 50 percent to St. Louis county acting as the counties' 346.5 fiscal agent, to be distributed as provided in sections 273.134 346.6 to 273.136; 346.7 (2) 25 percent to the northeast Minnesota economic 346.8 protection trust fund; and 346.9 (3) 25 percent to the taconite environmental protection 346.10 fund; 346.11 except that for payments of taxes relating to production year 346.12 2000 only, the amount paid shall be deposited in the general 346.13 fund. 346.14 Sec. 34. Minnesota Statutes 2000, section 298.282, 346.15 subdivision 1, is amended to read: 346.16 Subdivision 1. The amount deposited with the county as 346.17 provided in section 298.28, subdivision 3,shallmust be 346.18 distributed as provided by this section,among the 346.19 municipalities comprising a tax relief area under section 346.20 273.134, paragraph (b),as amended hereby,each beingherein346.21 referred to in this section as a qualifying municipality. 346.22 Sec. 35. Minnesota Statutes 2000, section 298.292, 346.23 subdivision 2, is amended to read: 346.24 Subd. 2. [USE OF MONEY.] Money in the northeast Minnesota 346.25 economic protection trust fund may be used for the following 346.26 purposes: 346.27 (1) to provide loans, loan guarantees, interest buy-downs 346.28 and other forms of participation with private sources of 346.29 financing, but a loan to a private enterprise shall be for a 346.30 principal amount not to exceed one-half of the cost of the 346.31 project for which financing is sought, and the rate of interest 346.32 on a loan shall be no less than the lesser of eight percent or 346.33 an interest rate three percentage points less than a full faith 346.34 and credit obligation of the United States government of 346.35 comparable maturity, at the time that the loan is approved; 346.36 (2) to fund reserve accounts established to secure the 347.1 payment when due of the principal of and interest on bonds 347.2 issued pursuant to section 298.2211; 347.3 (3) to pay in periodic payments or in a lump sum payment 347.4 any or all of the interest on bonds issued pursuant to chapter 347.5 474 for the purpose of constructing, converting, or retrofitting 347.6 heating facilities in connection with district heating systems 347.7 or systems utilizing alternative energy sources; and 347.8 (4) to invest in a venture capital fund or enterprise that 347.9 will provide capital to other entities that are engaging in, or 347.10 that will engage in, projects or programs that have the purposes 347.11 set forth in subdivision 1. No investments may be made in a 347.12 venture capital fund or enterprise unless at least two other 347.13 unrelated investors make investments of at least $500,000 in the 347.14 venture capital fund or enterprise, and the investment by the 347.15 northeast Minnesota economic protection trust fund may not 347.16 exceed the amount of the largest investment by an unrelated 347.17 investor in the venture capital fund or enterprise. For 347.18 purposes of this subdivision, an "unrelated investor" is a 347.19 person or entity that is not related to the entity in which the 347.20 investment is made or to any individual who owns more than 40 347.21 percent of the value of the entity, in any of the following 347.22 relationships: spouse, parent, child, sibling, employee, or 347.23 owner of an interest in the entity that exceeds ten percent of 347.24 the value of all interests in it. For purposes of determining 347.25 the limitations under this clause, the amount of investments 347.26 made by an investor other than the northeast Minnesota economic 347.27 protection trust fund is the sum of all investments made in the 347.28 venture capital fund or enterprise during the period beginning 347.29 one year before the date of the investment by the northeast 347.30 Minnesota economic protection trust fund. 347.31 Money from the trust fund shall be expended only in or for 347.32 the benefit of the tax relief area defined in section 273.134, 347.33 paragraph (b). 347.34 Sec. 36. Minnesota Statutes 2000, section 298.293, is 347.35 amended to read: 347.36 298.293 [EXPENDING FUNDS.] 348.1 The funds provided by section 298.28, subdivision 11, 348.2 relating to the northeast Minnesota economic protection trust 348.3 fund, except money expended pursuant to Laws 1982, Second 348.4 Special Session, chapter 2, sections 8 to 14, shall be expended 348.5 only in an amount that does not exceed the sum of the net 348.6 interest, dividends, and earnings arising from the investment of 348.7 the trust for the preceding 12 calendar months from the date of 348.8 the authorization plus, for fiscal year 1983, $10,000,000 from 348.9 the corpus of the fund. The funds may be spent only in or for 348.10 the benefit of those areas that are tax relief areas as defined 348.11 in section 273.134, paragraph (b). If during any year the 348.12 taconite property tax account under sections 273.134 to 273.136 348.13 does not contain sufficient funds to pay the property tax relief 348.14 specified in Laws 1977, chapter 423, article X, section 4, there 348.15 is appropriated from this trust fund to the relief account 348.16 sufficient funds to pay the relief specified in Laws 1977, 348.17 chapter 423, article X, section 4. 348.18 Sec. 37. Minnesota Statutes 2000, section 298.296, 348.19 subdivision 2, is amended to read: 348.20 Subd. 2. [EXPENDITURE OF FUNDS.] Before January 1, 348.2120022020, funds may be expended on projects and for 348.22 administration of the trust fund only from the net interest, 348.23 earnings, and dividends arising from the investment of the trust 348.24 at any time, including net interest, earnings, and dividends 348.25 that have arisen prior to July 13, 1982, plus $10,000,000 made 348.26 available for use in fiscal year 1983, except that any amount 348.27 required to be paid out of the trust fund to provide the 348.28 property tax relief specified in Laws 1977, chapter 423, article 348.29 X, section 4, and to make school bond payments and payments to 348.30 recipients of taconite production tax proceeds pursuant to 348.31 section 298.225, may be taken from the corpus of the trust. 348.32 Additionally, upon recommendation by the board, up to 348.33 $13,000,000 from the corpus of the trust may be made available 348.34 for use as provided in subdivision 4, and up to $10,000,000 from 348.35 the corpus of the trust may be made available for use as 348.36 provided in section 298.2961. On and after January 1,2002349.1 2020, funds may be expended on projects and for administration 349.2 from any assets of the trust. Annual administrative costs, not 349.3 including detailed engineering expenses for the projects, shall 349.4 not exceed five percent of the net interest, dividends, and 349.5 earnings arising from the trust in the preceding fiscal year. 349.6 Principal and interest received in repayment of loans made 349.7 pursuant to this section, and earnings on other investments made 349.8 under section 298.292, subdivision 2, clause (4), shall be 349.9 deposited in the state treasury and credited to the trust. 349.10 These receipts are appropriated to the board for the purposes of 349.11 sections 298.291 to 298.298. 349.12 Sec. 38. Minnesota Statutes 2000, section 298.2961, is 349.13 amended to read: 349.14 298.2961 [PRODUCER GRANTS.] 349.15 Subdivision 1. [APPROPRIATION.] (a) $10,000,000 is 349.16 appropriated from the northeast Minnesota economic protection 349.17 trust fund to a special account in the taconite area 349.18 environmental protection fund for grantsor loansto producers 349.19 on a project-by-project basis as provided in this section. 349.20 (b) The proceeds of the tax designated under section 349.21 298.28, subdivision 9b, are appropriated for grantsand loansto 349.22 producers on a project-by-project basis as provided in this 349.23 section. 349.24 Subd. 2. [PROJECTS; APPROVAL.] (a) Projects funded must be 349.25 for: 349.26 (1) environmentally unique reclamation projects; or 349.27 (2) pit or plant maintenance, repairs, expansions, or 349.28 modernizations other than for a value added iron products 349.29 plantthat extend the life of the plant. 349.30 (b) To be proposed by the board, a project must be approved 349.31 by at least eight iron range resources and rehabilitation board 349.32 members. The money for a project may be spent only upon 349.33 approval of the project by the governor. The board may submit 349.34 supplemental projects for approval at any time. 349.35 (c) The board may require that it receive an equity 349.36 percentage in any project to which it contributes under this 350.1 section. 350.2 Sec. 39. Minnesota Statutes 2000, section 298.298, is 350.3 amended to read: 350.4 298.298 [LONG-RANGE PLAN.] 350.5 Consistent with the policy established in sections 298.291 350.6 to 298.298, the iron range resources and rehabilitation board 350.7 shall prepare and present to the governor and the legislature by 350.8 January 1, 1984 a long-range plan for the use of the northeast 350.9 Minnesota economic protection trust fund for the economic 350.10 development and diversification of the tax relief area defined 350.11 in section 273.134, paragraph (b). The iron range resources and 350.12 rehabilitation board shall, before November 15 of each even 350.13 numbered year, prepare a report to the governor and legislature 350.14 updating and revising this long-range plan and reporting on the 350.15 iron range resources and rehabilitation board's progress on 350.16 those matters assigned to it by law. After January 1, 1984, no 350.17 project shall be approved by the iron range resources and 350.18 rehabilitation board which is not consistent with the goals and 350.19 objectives established in the long-range plan. 350.20 Sec. 40. Minnesota Statutes 2000, section 298.75, 350.21 subdivision 1, is amended to read: 350.22 Subdivision 1. [DEFINITIONS.] Except as may otherwise be 350.23 provided, the following words, when used in this section, shall 350.24 have the meanings herein ascribed to them. 350.25 (1) "Aggregate material" shall mean nonmetallic natural 350.26 mineral aggregate including, but not limited to sand, silica 350.27 sand, gravel,building stone,crushed rock, limestone,and350.28 granite, and borrow, but only if the borrow is transported on a 350.29 public road, street, or highway. Aggregate material shall not 350.30 include dimension stone and dimension granite. Aggregate 350.31 material must be measured or weighed after it has been extracted 350.32 from the pit, quarry, or deposit. 350.33 (2) "Person" shall mean any individual, firm, partnership, 350.34 corporation, organization, trustee, association, or other entity. 350.35 (3) "Operator" shall mean any person engaged in the 350.36 business of removing aggregate material from the surface or 351.1 subsurface of the soil, for the purpose of sale, either directly 351.2 or indirectly, through the use of the aggregate material in a 351.3 marketable product or service. 351.4 (4) "Extraction site" shall mean a pit, quarry, or deposit 351.5 containing aggregate material and any contiguous property to the 351.6 pit, quarry, or deposit which is used by the operator for 351.7 stockpiling the aggregate material. 351.8 (5) "Importer" shall mean any person who buys aggregate 351.9 material produced from a county not listed in paragraph (6) or 351.10 another state and causes the aggregate material to be imported 351.11 into a county in this state which imposes a tax on aggregate 351.12 material. 351.13 (6) "County" shall mean the counties of Pope, Stearns, 351.14 Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, 351.15 Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, 351.16 Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, 351.17 Sibley, Hennepin, Washington, Chisago, and Ramsey. County also 351.18 means any other county whose board has voted after public 351.19 hearing to impose the tax required under this section and has 351.20 registered with the commissioner to impose the tax. 351.21[EFFECTIVE DATE.] This section is effective the day 351.22 following final enactment. 351.23 Sec. 41. Minnesota Statutes 2000, section 298.75, 351.24 subdivision 2, is amended to read: 351.25 Subd. 2. A county shall impose upon every importer and 351.26 operator a production tax equal toten21 cents per cubic yard 351.27 orseven15 cents per ton of aggregate material removed except 351.28 that the county board may decide not to impose this tax if it 351.29 determines that in the previous year operators removed less than 351.30 20,000 tons or 14,000 cubic yards of aggregate material from 351.31 that county. The tax shall be imposed on aggregate material 351.32 produced in the county when the aggregate material is 351.33 transported from the extraction site or sold. When aggregate 351.34 material is stored in a stockpile within the state of Minnesota 351.35 and a public highway, road or street is not used for 351.36 transporting the aggregate material, the tax shall be imposed 352.1 either when the aggregate material is sold, or when it is 352.2 transported from the stockpile site, or when it is used from the 352.3 stockpile, whichever occurs first. The tax shall be imposed on 352.4 an importer when the aggregate material is imported into the 352.5 county that imposes the tax. 352.6 If the aggregate material is transported directly from the 352.7 extraction site to a waterway, railway, or another mode of 352.8 transportation other than a highway, road or street, the tax 352.9 imposed by this section shall be apportioned equally between the 352.10 county where the aggregate material is extracted and the county 352.11 to which the aggregate material is originally transported. If 352.12 that destination is not located in Minnesota, then the county 352.13 where the aggregate material was extracted shall receive all of 352.14 the proceeds of the tax. 352.15[EFFECTIVE DATE.] This section is effective for aggregate 352.16 material sold, imported, transported, or used from a stockpile 352.17 after June 30, 2002. 352.18 Sec. 42. Minnesota Statutes 2000, section 298.75, 352.19 subdivision 7, is amended to read: 352.20 Subd. 7. (a) All money collected as taxes under this 352.21 section shall be deposited in the county treasury and 352.22 creditedas follows, for expenditure by the county352.23board:according to this subdivision. 352.24 (b) The county auditor may retain an annual administrative 352.25 fee of up to five percent of the total taxes collected in any 352.26 year. 352.27 (c) The balance of the taxes, after any deduction under 352.28 paragraph (b), shall be credited as follows: 352.29(a) Sixty(1) 57.5 percent to the county road and bridge 352.30 fund for expenditure for the maintenance, construction and 352.31 reconstruction of roads, highways and bridges; 352.32(b) Thirty(2) 27.5 percent to theroad and bridge fund of352.33those towns as determined by the county board and to the general352.34fund or other designated fund of those cities as determined by352.35the county boardcity or town in which the mine is located, or 352.36 to the county if unorganized, to be expended for maintenance, 353.1 construction and reconstruction of roads, highways and bridges; 353.2 and 353.3(c) Ten(3) 15 percent to a special reserve fund which is 353.4 hereby established, for expenditure for therestoration353.5 reclamation of abandoned pits, quarries, or deposits located 353.6 upon public and tax forfeited lands within the county. 353.7 If there are no abandoned pits, quarries, or deposits 353.8 located upon public or tax forfeited lands within the county, 353.9 this portion of the taxshallmay be deposited in the county 353.10 road and bridge fund for expenditure for the maintenance, 353.11 construction, and reconstruction of roads, highways, and bridges 353.12 or may be used for any other unmet reclamation need. 353.13 Reclamation shall be prioritized as follows: reclamation of 353.14 pits and quarries on public or tax-forfeited land, reclamation 353.15 of abandoned pits or quarries on private land, and reclamation 353.16 of active pits and quarries on private land. 353.17[EFFECTIVE DATE.] This section is effective July 1, 2002. 353.18 Sec. 43. Minnesota Statutes 2000, section 471.58, is 353.19 amended to read: 353.20 471.58 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS; 353.21 MEMBERSHIP.] 353.22 For the purpose of providing an areawide approach to 353.23 problems which demand coordinated and cooperative actions and 353.24 which are common to those areas of northeast Minnesota affected 353.25 by operations involved in mining iron ore and taconite and 353.26 producing concentrate therefrom, and for the purpose of 353.27 promoting the general welfare and economic development of the 353.28 cities, towns and school districts within the iron ranges area 353.29 of northeast Minnesota, any city, town or school district in 353.30 which the net tax capacity consists in part of iron ore, or 353.31 lands containing taconite or semitaconite or which is located in 353.32 whole or part in the tax relief area defined by section 273.134, 353.33 paragraph (b), may pay annual dues in the range association of 353.34 municipalities and schools. The association may sue, be sued, 353.35 intervene and act in a civil action in which the outcome of the 353.36 action will have an effect upon the interest of any of its 354.1 members. 354.2 Sec. 44. [STATE AID.] 354.3 Notwithstanding Minnesota Statutes, chapter 298, or any 354.4 other law to the contrary, a city, township, county, school 354.5 district, the taconite property tax relief fund, the iron range 354.6 resources and rehabilitation board, the range association of 354.7 municipalities and schools, the taconite environmental 354.8 protection fund, and the northeast Minnesota economic protection 354.9 trust receiving distributions under Minnesota Statutes, sections 354.10 298.225, 298.28, and 298.282, shall each receive aid in 2001 354.11 equal to the difference between the distributions it receives 354.12 under Minnesota Statutes, sections 298.225, 298.28, and 298.282, 354.13 and the distributions it would have received in 2001 under 354.14 Minnesota Statutes 2000, sections 298.225, 298.28, and 298.282, 354.15 if those distributions had been based on the average of the 354.16 production for 1998, 1999, and 2000 and disregarded the 354.17 bankruptcy of one of the taxpayers. A sum sufficient to make 354.18 distributions of aid under this section is appropriated from the 354.19 general fund to the commissioner of revenue, who must make the 354.20 distributions of this aid on or before July 1, 2001. 354.21 ARTICLE 14 354.22 METROPOLITAN AREA FINANCING AND GOVERNANCE 354.23 Section 1. Minnesota Statutes 2000, section 10A.01, 354.24 subdivision 10, is amended to read: 354.25 Subd. 10. [CANDIDATE.] "Candidate" means an individual who 354.26 seeks nomination or election as a state constitutional officer, 354.27 legislator, or judge. "Candidate" also means an individual who 354.28 seeks nomination or election to the metropolitan council. An 354.29 individual is deemed to seek nomination or election if the 354.30 individual has taken the action necessary under the law of this 354.31 state to qualify for nomination or election, has received 354.32 contributions or made expenditures in excess of $100, or has 354.33 given implicit or explicit consent for any other person to 354.34 receive contributions or make expenditures in excess of $100, 354.35 for the purpose of bringing about the individual's nomination or 354.36 election. A candidate remains a candidate until the candidate's 355.1 principal campaign committee is dissolved as provided in section 355.2 10A.24. 355.3 Sec. 2. Minnesota Statutes 2000, section 10A.09, 355.4 subdivision 6a, is amended to read: 355.5 Subd. 6a. [LOCAL OFFICIALS.] A local official required to 355.6 file a statement under this section must file it with the 355.7 governing body of the official's political subdivision, except 355.8 that a candidate for or member of the metropolitan council shall 355.9 file the statement with the board. The governing body must 355.10 maintain statements filed with it under this subdivision as 355.11 public data. 355.12 Sec. 3. Minnesota Statutes 2000, section 10A.27, 355.13 subdivision 1, is amended to read: 355.14 Subdivision 1. [CONTRIBUTION LIMITS.] (a) Except as 355.15 provided in subdivision 2, a candidate must not permit the 355.16 candidate's principal campaign committee to accept aggregate 355.17 contributions made or delivered by any individual, political 355.18 committee, or political fund in excess of the following: 355.19 (1) to candidates for governor and lieutenant governor 355.20 running together, $2,000 in an election year for the office 355.21 sought and $500 in other years; 355.22 (2) to a candidate for attorney general, $1,000 in an 355.23 election year for the office sought and $200 in other years; 355.24 (3) to a candidate for the office of secretary of state or 355.25 state auditor, $500 in an election year for the office sought 355.26 and $100 in other years; 355.27 (4) to a candidate for state senator, $500 in an election 355.28 year for the office sought and $100 in other years; and 355.29 (5) to a candidate for state representative or metropolitan 355.30 council member, $500 in an election year for the office sought 355.31 and $100 inthe othera nonelection year. 355.32 (b) The following deliveries are not subject to the 355.33 bundling limitation in this subdivision: 355.34 (1) delivery of contributions collected by a member of the 355.35 candidate's principal campaign committee, such as a block worker 355.36 or a volunteer who hosts a fund raising event, to the 356.1 committee's treasurer; and 356.2 (2) a delivery made by an individual on behalf of the 356.3 individual's spouse. 356.4 Sec. 4. Minnesota Statutes 2000, section 15.0597, 356.5 subdivision 1, is amended to read: 356.6 Subdivision 1. [DEFINITIONS.] As used in this section, the 356.7 following terms shall have the meanings given them. 356.8 (a) "Agency" means (1) a state board, commission, council, 356.9 committee, authority, task force, including an advisory task 356.10 force created under section 15.014 or 15.0593, a group created 356.11 by executive order of the governor, or other similar multimember 356.12 agency created by law and having statewide jurisdiction; and (2) 356.13the metropolitan council,a metropolitan agency, capitol area 356.14 architectural and planning board, and any agency with a regional 356.15 jurisdiction created in this state pursuant to an interstate 356.16 compact. 356.17 (b) "Vacancy" or "vacant agency position" means (1) a 356.18 vacancy in an existing agency, or (2) a new, unfilled agency 356.19 position. Vacancy includes a position that is to be filled 356.20 through appointment of a nonlegislator by a legislator or group 356.21 of legislators; vacancy does not mean (1) a vacant position on 356.22 an agency composed exclusively of persons employed by a 356.23 political subdivision or another agency, or (2) a vacancy to be 356.24 filled by a person required to have a specific title or position. 356.25 (c) "Secretary" means the secretary of state. 356.26 Sec. 5. Minnesota Statutes 2000, section 204B.06, 356.27 subdivision 4, is amended to read: 356.28 Subd. 4. [PARTICULAR OFFICES.] Candidates who seek 356.29 nomination for the following offices shall state the following 356.30 additional information on the affidavit: 356.31 (a) for United States senator, that the candidate will be 356.32 30 years of age or older and a citizen of the United States for 356.33 not less than nine years on the next January 3 or, in the case 356.34 of an election to fill a vacancy, within 21 days after the 356.35 special election; 356.36 (b) for United States representative, that the candidate 357.1 will be 25 years of age or older and a citizen of the United 357.2 States for not less than seven years on the next January 3 or, 357.3 in the case of an election to fill a vacancy, within 21 days 357.4 after the special election; 357.5 (c) for governor or lieutenant governor, that on the first 357.6 Monday of the next January the candidate will be 25 years of age 357.7 or older and, on the day of the state general election, a 357.8 resident of Minnesota for not less than one year; 357.9 (d) for supreme court justice, court of appeals judge, or 357.10 district court judge, that the candidate is learned in the law; 357.11 (e) for metropolitan council, county, municipal, school 357.12 district, or special district office, that the candidate meets 357.13 any other qualifications for that office prescribed by law; 357.14 (f) for senator or representative in the legislature, that 357.15 on the day of the general or special election to fill the office 357.16 the candidate will have resided not less than one year in the 357.17 state and not less than six months in the legislative district 357.18 from which the candidate seeks election. 357.19 Sec. 6. Minnesota Statutes 2000, section 204B.09, 357.20 subdivision 1, is amended to read: 357.21 Subdivision 1. [CANDIDATES IN STATE AND COUNTY GENERAL 357.22 ELECTIONS.] Except as otherwise provided by this subdivision, 357.23 affidavits of candidacy and nominating petitions for county, 357.24 metropolitan council, state and federal offices filled at the 357.25 state general election shall be filed not more than 70 days nor 357.26 less than 56 days before the state primary. The affidavit may 357.27 be prepared and signed at any time between 60 days before the 357.28 filing period opens and the last day of the filing period. 357.29 Notwithstanding other law to the contrary, the affidavit of 357.30 candidacy must be signed in the presence of a notarial officer. 357.31 Candidates for presidential electors may file petitions on or 357.32 before the state primary day. Nominating petitions to fill 357.33 vacancies in nominations shall be filed as provided in section 357.34 204B.13. No affidavit or petition shall be accepted later than 357.35 5:00 p.m. on the last day for filing. Affidavits and petitions 357.36 for offices to be voted on in only one county shall be filed 358.1 with the county auditor of that county. Affidavits and 358.2 petitions for offices to be voted on in more than one county 358.3 shall be filed with the secretary of state. 358.4 Sec. 7. Minnesota Statutes 2000, section 204B.09, 358.5 subdivision 1a, is amended to read: 358.6 Subd. 1a. [ABSENT CANDIDATES.] A candidate for special 358.7 district, county, metropolitan council, state, or federal office 358.8 who will be absent from the state during the filing period may 358.9 submit a properly executed affidavit of candidacy, the 358.10 appropriate filing fee, and any necessary petitions in person to 358.11 the filing officer. The candidate shall state in writing the 358.12 reason for being unable to submit the affidavit during the 358.13 filing period. The affidavit, filing fee, and petitions must be 358.14 submitted to the filing officer during the seven days 358.15 immediately preceding the candidate's absence from the state. 358.16 Nominating petitions may be signed during the 14 days 358.17 immediately preceding the date when the affidavit of candidacy 358.18 is filed. 358.19 Sec. 8. Minnesota Statutes 2000, section 204B.11, is 358.20 amended to read: 358.21 204B.11 [CANDIDATES; FILING FEES; PETITION IN PLACE OF 358.22 FILING FEE.] 358.23 Subdivision 1. [AMOUNT; DISHONORED CHECKS; CONSEQUENCES.] 358.24 Except as provided by subdivision 2, a filing fee shall be paid 358.25 by each candidate who files an affidavit of candidacy. The fee 358.26 shall be paid at the time the affidavit is filed. The amount of 358.27 the filing fee shall vary with the office sought as follows: 358.28 (a) for the office of governor, lieutenant governor, 358.29 attorney general, state auditor, state treasurer, secretary of 358.30 state, representative in Congress, judge of the supreme court, 358.31 judge of the court of appeals, or judge of the district court, 358.32 $300; 358.33 (b) for the office of senator in Congress, $400; 358.34 (c) for office of senator or representative in the 358.35 legislature, $100; 358.36 (d) for a metropolitan council or county office, $50; and 359.1 (e) for the office of soil and water conservation district 359.2 supervisor, $20. 359.3 For the office of presidential elector, and for those 359.4 offices for which no compensation is provided, no filing fee is 359.5 required. 359.6 The filing fees received by the county auditor shall 359.7 immediately be paid to the county treasurer. The filing fees 359.8 received by the secretary of state shall immediately be paid to 359.9 the state treasurer. 359.10 When an affidavit of candidacy has been filed with the 359.11 appropriate filing officer and the requisite filing fee has been 359.12 paid, the filing fee shall not be refunded. If a candidate's 359.13 filing fee is paid with a check, draft, or similar negotiable 359.14 instrument for which sufficient funds are not available or that 359.15 is dishonored, notice to the candidate of the worthless 359.16 instrument must be sent by the filing officer via registered 359.17 mail no later than immediately upon the closing of the filing 359.18 deadline with return receipt requested. The candidate will have 359.19 five days from the time the filing officer receives proof of 359.20 receipt to issue a check or other instrument for which 359.21 sufficient funds are available. The candidate issuing the 359.22 worthless instrument is liable for a service charge pursuant to 359.23 section 332.50. If adequate payment is not made, the name of 359.24 the candidate must not appear on any official ballot and the 359.25 candidate is liable for all costs incurred by election officials 359.26 in removing the name from the ballot. 359.27 Subd. 2. [PETITION IN PLACE OF FILING FEE.] At the time of 359.28 filing an affidavit of candidacy, a candidate may present a 359.29 petition in place of the filing fee. The petition may be signed 359.30 by any individual eligible to vote for the candidate. A 359.31 nominating petition filed pursuant to section 204B.07 or 359.32 204B.13, subdivision 4, is effective as a petition in place of a 359.33 filing fee if the nominating petition includes a prominent 359.34 statement informing the signers of the petition that it will be 359.35 used for that purpose. 359.36 The number of signatures on a petition in place of a filing 360.1 fee shall be as follows: 360.2 (a) for a state office voted on statewide, or for president 360.3 of the United States, or United States senator, 2,000; 360.4 (b) for a congressional office, 1,000; 360.5 (c) for a county, or metropolitan council, or legislative 360.6 office, or for the office of district judge, 500; and 360.7 (d) for any other office which requires a filing fee as 360.8 prescribed by law, municipal charter, or ordinance, the lesser 360.9 of 500 signatures or five percent of the total number of votes 360.10 cast in the municipality, ward, or other election district at 360.11 the preceding general election at which that office was on the 360.12 ballot. 360.13 An official with whom petitions are filed shall make sample 360.14 forms for petitions in place of filing fees available upon 360.15 request. 360.16 Sec. 9. Minnesota Statutes 2000, section 204B.135, 360.17 subdivision 2, is amended to read: 360.18 Subd. 2. [OTHER ELECTION DISTRICTS.] For purposes of this 360.19 subdivision, "local government election district" means a county 360.20 district, park and recreation district, school district, 360.21 metropolitan council district, or soil and water conservation 360.22 district. Local government election districts, other than city 360.23 wards covered by subdivision 1, may not be redistricted until 360.24 precinct boundaries are reestablished under section 204B.14, 360.25 subdivision 3, paragraph (c). Election districts covered by 360.26 this subdivision must be redistricted within 80 days of the time 360.27 when the legislature has been redistricted or at least 15 weeks 360.28 before the state primary election in the year ending in two, 360.29 whichever comes first. 360.30 Sec. 10. Minnesota Statutes 2000, section 204B.32, 360.31 subdivision 2, is amended to read: 360.32 Subd. 2. [ALLOCATION OF ELECTION EXPENSES.] The secretary 360.33 of state shall develop procedures for the allocation of election 360.34 expenses among counties, municipalities,andschool districts, 360.35 and the metropolitan council for elections that are held 360.36 concurrently. The following expenses must be included in the 361.1 procedures: salaries of election judges; postage for absentee 361.2 ballots and applications; preparation of polling places; 361.3 preparation and testing of electronic voting systems; ballot 361.4 preparation; publication of election notices and sample ballots; 361.5 transportation of ballots and election supplies; and 361.6 compensation for administrative expenses of the county auditor, 361.7 municipal clerk, or school district clerk. 361.8 Sec. 11. Minnesota Statutes 2000, section 204D.02, 361.9 subdivision 1, is amended to read: 361.10 Subdivision 1. [OFFICERS.] All elective state, 361.11 metropolitan council, and county officers, justices of the 361.12 supreme court, judges of the court of appeals and district 361.13 court, state senators and state representatives, and senators 361.14 and representatives in Congress shall be elected at the state 361.15 general election held in the year before their terms of office 361.16 expire. Presidential electors shall be chosen at the state 361.17 general election held in the year before the expiration of a 361.18 term of a president of the United States. 361.19 Sec. 12. Minnesota Statutes 2000, section 204D.08, 361.20 subdivision 6, is amended to read: 361.21 Subd. 6. [STATE AND COUNTY NONPARTISAN PRIMARY BALLOT.] 361.22 The state and county nonpartisan primary ballot shall be headed 361.23 "State and County Nonpartisan Primary Ballot." It shall be 361.24 printed on canary paper. The names of candidates for nomination 361.25 to the supreme court, court of appeals, district court, and 361.26 all metropolitan council and county offices shall be placed on 361.27 this ballot. 361.28 No candidate whose name is placed on the state and county 361.29 nonpartisan primary ballot shall be designated or identified as 361.30 the candidate of any political party or in any other manner 361.31 except as expressly provided by law. 361.32 Sec. 13. [204D.265] [VACANCY IN OFFICE OF METROPOLITAN 361.33 COUNCIL MEMBERS.] 361.34 Subdivision 1. [ELECTION IN 30 TO 60 DAYS.] Except as 361.35 provided in subdivision 3, a vacancy in the office of 361.36 metropolitan council member must be filled at a special election 362.1 scheduled by the metropolitan council on a date not less than 30 362.2 nor more than 60 days after the vacancy occurs. The special 362.3 primary or special election may be held on the same day as a 362.4 regular primary or regular election but the special election 362.5 must be held not less than 14 days after the special primary. 362.6 The person elected at the special election takes office 362.7 immediately after receiving the certificate of election and 362.8 taking the oath of office and serves the remainder of the 362.9 unexpired term. If the metropolitan council districts have been 362.10 redrawn since the commencement of the term of the vacant office, 362.11 the election must be based on the district as redrawn. 362.12 Subd. 2. [WHEN VICTOR SEATED IMMEDIATELY.] If a vacancy 362.13 for which a special election is required occurs less than 60 362.14 days before the general election preceding the end of the term, 362.15 the vacancy must be filled by the person elected at that 362.16 election for the ensuing term, who takes office immediately 362.17 after receiving the certificate of election and taking the oath 362.18 of office. 362.19 Subd. 3. [INABILITY OR REFUSAL TO SERVE.] In addition to 362.20 when the events specified in section 351.02 happen, a vacancy in 362.21 the office of metropolitan council member may be declared by the 362.22 metropolitan council when a member is unable to serve in the 362.23 office or attend council meetings for a 90-day period because of 362.24 illness or because of absence from, or refusal to, attend 362.25 council meetings for a 90-day period. If any of the conditions 362.26 described or referred to in this subdivision occur, the council 362.27 may, after the council by resolution has declared a vacancy to 362.28 exist, make an appointment to fill the vacancy at a regular or 362.29 special meeting for the remainder of the unexpired term or until 362.30 the ill or absent member is again able to resume duties and 362.31 attend council meetings, whichever is earlier. If the council 362.32 determines that the original member is again able to resume 362.33 duties and attend council meetings, the council must say so in a 362.34 resolution and remove the appointed officeholder and restore the 362.35 original member to office. 362.36 Sec. 14. Minnesota Statutes 2000, section 204D.27, is 363.1 amended by adding a subdivision to read: 363.2 Subd. 12. [SPECIAL METROPOLITAN COUNCIL ELECTION.] (a) 363.3 [STATE CANVASSING BOARD.] Except as provided in subdivision 4, 363.4 the state canvassing board shall complete its canvass of a 363.5 special election for metropolitan council member and declare the 363.6 results within four days, excluding Sundays and legal holidays, 363.7 after the returns of the county canvassing boards are certified 363.8 to the secretary of the state. 363.9 (b) [ELECTION CONTEST.] In case of a contest of a special 363.10 election for metropolitan council member, the notice of contest 363.11 must be filed within two days after the canvass is completed, 363.12 excluding Sundays and legal holidays. Otherwise the contest 363.13 must proceed in the manner provided by law for contesting 363.14 elections. 363.15 (c) [CERTIFICATE OF ELECTION.] A certificate of election in 363.16 a special election for metropolitan council member must be 363.17 issued by the county auditor or the secretary of state to the 363.18 individual declared elected by the county or state canvassing 363.19 board two days after the appropriate canvassing board finishes 363.20 canvassing the returns for the election, excluding Sundays and 363.21 legal holidays. In case of a contest, the certificate must not 363.22 be issued until the district court decides the contest. 363.23 Sec. 15. Minnesota Statutes 2000, section 209.02, 363.24 subdivision 1, is amended to read: 363.25 Subdivision 1. Any eligible voter, including a candidate, 363.26 may contest in the manner provided in this chapter: (1) the 363.27 nomination or election of any person for whom the voter had the 363.28 right to vote if that person is declared nominated or elected to 363.29 the senate or the house of representatives of the United States, 363.30 or to a statewide, metropolitan council, county, legislative, 363.31 municipal, school, or district court office; or (2) the declared 363.32 result of a constitutional amendment or other question voted 363.33 upon at an election. The contest may be brought over an 363.34 irregularity in the conduct of an election or canvass of votes, 363.35 over the question of who received the largest number of votes 363.36 legally cast, over the number of votes legally cast in favor of 364.1 or against a question, or on the grounds of deliberate, serious, 364.2 and material violations of the Minnesota Election Law. 364.3 Sec. 16. Minnesota Statutes 2000, section 211A.01, 364.4 subdivision 3, is amended to read: 364.5 Subd. 3. [CANDIDATE.] "Candidate" means an individual who 364.6 seeks nomination or election to a county, municipal, school 364.7 district, or other political subdivision office. This 364.8 definition does not include an individual seeking a judicial 364.9 office or a seat on the metropolitan council. For purposes of 364.10 sections 211A.01 to 211A.05 and 211A.07, "candidate" also 364.11 includes a candidate for the United States Senate or House of 364.12 Representatives. 364.13 Sec. 17. Minnesota Statutes 2000, section 211B.01, 364.14 subdivision 3, is amended to read: 364.15 Subd. 3. [CANDIDATE.] "Candidate" means an individual who 364.16 seeks nomination or election to a federal, 364.17 statewide, metropolitan council, legislative, judicial, or local 364.18 office including special districts, school districts, towns, 364.19 home rule charter and statutory cities, and counties, except 364.20 candidates for president and vice-president of the United States. 364.21 Sec. 18. Minnesota Statutes 2000, section 353D.01, 364.22 subdivision 2, is amended to read: 364.23 Subd. 2. [ELIGIBILITY.] (a) Eligibility to participate in 364.24 the defined contribution plan is available to: 364.25 (1) elected local government officials of a governmental 364.26 subdivision who elect to participate in the plan under section 364.27 353D.02, subdivision 1, and who, for the elected service 364.28 rendered to a governmental subdivision, are not members of the 364.29 public employees retirement association within the meaning of 364.30 section 353.01, subdivision 7; 364.31 (2) physicians who, if they did not elect to participate in 364.32 the plan under section 353D.02, subdivision 2, would meet the 364.33 definition of member under section 353.01, subdivision 7; 364.34 (3) basic and advanced life support emergency medical 364.35 service personnel employed by or providing services for any 364.36 public ambulance service or privately operated ambulance service 365.1 that receives an operating subsidy from a governmental entity 365.2 that elects to participate under section 353D.02, subdivision 3; 365.3 and 365.4 (4) members of a municipal rescue squad associated with 365.5 Litchfield in Meeker county, or of a county rescue squad 365.6 associated with Kandiyohi county, if an independent nonprofit 365.7 rescue squad corporation, incorporated under chapter 317A, 365.8 performing emergency management services, and if not affiliated 365.9 with a fire department or ambulance service and if its members 365.10 are not eligible for membership in that fire department's or 365.11 ambulance service's relief association or comparable pension 365.12 plan. 365.13 (b) For purposes of this chapter, an elected local 365.14 government official includes a person appointed to fill a 365.15 vacancy in an elective office and a member of the metropolitan 365.16 council. Service as an elected local government official only 365.17 includes service for the governmental subdivision for which the 365.18 official was elected by the public-at-large. Service as an 365.19 elected local government official ceases and eligibility to 365.20 participate terminates when the person ceases to be an elected 365.21 official. An elected local government official does not include 365.22 an elected county sheriff. 365.23 (c) Elected local government officials, physicians, first 365.24 response personnel and emergency medical service personnel, and 365.25 rescue squad personnel who are currently covered by a public or 365.26 private pension plan because of their employment or provision of 365.27 services are not eligible to participate in the public employees 365.28 defined contribution plan. 365.29 (d) A former participant is a person who has terminated 365.30 eligible employment or service and has not withdrawn the value 365.31 of the person's individual account. 365.32 Sec. 19. [375.027] [METROPOLITAN COUNTY COMMISSION 365.33 MEMBERS; REDISTRICTING.] 365.34 Notwithstanding section 375.01, 375.025, 375.056, or any 365.35 other law to the contrary, after 2000, metropolitan counties, as 365.36 defined in section 473.121, subdivision 4, have the number of 366.1 county commission members, and must be redistricted, as provided 366.2 in section 473.124. 366.3 Sec. 20. Minnesota Statutes 2000, section 473.123, 366.4 subdivision 1, is amended to read: 366.5 Subdivision 1. [CREATION.] A metropolitan council with 366.6 jurisdiction in the metropolitan area is established as a public 366.7 corporation and political subdivision of the state. It shall be 366.8 under the supervision and control of17members, all of whom366.9shall be residents of the metropolitan areaelected from 366.10 districts as provided in section 473.124. 366.11 Sec. 21. Minnesota Statutes 2000, section 473.123, 366.12 subdivision 4, is amended to read: 366.13 Subd. 4. [CHAIR; APPOINTMENT, OFFICERS, SELECTION; DUTIES 366.14 AND COMPENSATION.] (a) The chair of the metropolitan council 366.15shall be appointed by the governor as the 17th voting member366.16thereof by and with the advice and consent of the senate to366.17serve at the pleasure of the governor to represent the366.18metropolitan area at large. Senate confirmation shall be as366.19provided by section 15.066is elected by and from among the 366.20 members of the council to serve a one-year term. 366.21 The chair of the metropolitan council shall, if present, 366.22 preside at meetings of the council, have the primary 366.23 responsibility for meeting with local elected officials, serve 366.24 as the principal legislative liaison, present to the governor 366.25 and the legislature, after council approval, the council's plans 366.26 for regional governance and operations, serve as the principal 366.27 spokesperson of the council, and perform other duties assigned 366.28 by the council or by law. 366.29 (b) The metropolitan council shall elect other officers as 366.30 it deems necessary for the conduct of its affairs for a one-year 366.31 term. A secretary and treasurer need not be members of the 366.32 metropolitan council. Meeting times and places shall be fixed 366.33 by the metropolitan council and special meetings may be called 366.34 by a majority of the members of the metropolitan council or by 366.35 the chair. The chair and each metropolitan council member shall 366.36 be reimbursed for actual and necessary expenses. The annual 367.1 budget of the council shall provide as a separate account 367.2 anticipated expenditures for compensation, travel, and 367.3 associated expenses for the chair and members, and compensation 367.4 or reimbursement shall be made to the chair and members only 367.5 when budgeted. 367.6 (c) Each member of the council shall attend and participate 367.7 in council meetings and meet regularly with local elected 367.8 officials and legislative members from the council member's 367.9 district. Each council member shall serve on at least one 367.10 division committee for transportation, environment, or community 367.11 development. 367.12 (d) In the performance of its duties the metropolitan 367.13 council may adopt policies and procedures governing its 367.14 operation, establish committees, and, when specifically 367.15 authorized by law, make appointments to other governmental 367.16 agencies and districts. 367.17 Sec. 22. Minnesota Statutes 2000, section 473.123, 367.18 subdivision 7, is amended to read: 367.19 Subd. 7. [PERFORMANCE AND BUDGET ANALYST.] The council,367.20other than the chair,may hire a performance and budget analyst 367.21 to assist the16councilmemberswith policy and budget analysis 367.22 and evaluation of the council's performance. The analyst may 367.23 recommend and the council may hire up to two additional analysts 367.24 to assist the council with performance evaluation and budget 367.25 analysis. The analyst and any additional analysts hired shall 367.26 serve at the pleasure of the council members. The16 members of367.27thecouncil may prescribe all terms and conditions for the 367.28 employment of the analyst and any additional analysts hired, 367.29 including, but not limited to, the fixing of compensation, 367.30 benefits, and insurance. The analyst shall prepare the budget 367.31 for the provisions of thissectionsubdivision and submit the 367.32 budget for council approval and inclusion in the council's 367.33 overall budget. 367.34 Sec. 23. [473.124] [METROPOLITAN COUNCIL ELECTION; MEMBERS 367.35 ELECTED AS COUNTY COMMISSIONERS.] 367.36 Subdivision 1. [NUMBER OF MEMBERS.] The metropolitan 368.1 council consists of 25 members, except that the legislature may 368.2 by law increase or decrease the number of members by up to eight 368.3 in order to increase the number of county commissioners who are 368.4 elected from metropolitan council districts as provided in this 368.5 section. 368.6 Subd. 2. [DISTRICTS.] The legislature shall redraw the 368.7 boundaries of metropolitan council districts after each federal 368.8 decennial census. The districts must be bounded by town, 368.9 municipal, ward, or precinct lines. The districts must be 368.10 composed of compact, convenient, contiguous territory and must 368.11 be substantially equal in population. The population of the 368.12 largest district must not exceed the population of the smallest 368.13 district by more than ten percent, unless the result would force 368.14 a voting precinct to be split. A metropolitan council district 368.15 may not include territory in more than one county unless 368.16 necessary to meet equal population requirements. If all the 368.17 redrawn metropolitan council districts in a county lie wholly 368.18 within the county, the metropolitan council districts also serve 368.19 as county commissioner districts. If the number of metropolitan 368.20 council districts that also serve as county commissioner 368.21 districts in a county is less than the number of members of the 368.22 county board as provided under section 375.01, the remaining 368.23 members of the county board must be elected from the county at 368.24 large, except that, if a county has no redrawn metropolitan 368.25 council districts that lie wholly within it, the county must be 368.26 divided into as many county commissioner districts as there are 368.27 members of the county board. 368.28 Subd. 3. [ELECTION.] In a county whose metropolitan 368.29 council districts all lie wholly within the county, each 368.30 candidate for the metropolitan council is also a candidate for 368.31 the county board and, if elected, holds both offices at the same 368.32 time. In a county whose metropolitan council districts do not 368.33 all lie wholly within the county, a candidate may separately 368.34 file for, be elected to, and hold both the offices of 368.35 metropolitan council member and county commissioner at the same 368.36 time. 369.1 Subd. 4. [TERMS.] Metropolitan council members serve terms 369.2 as provided in section 375.03. 369.3 Sec. 24. Minnesota Statutes 2000, section 473.146, 369.4 subdivision 4, is amended to read: 369.5 Subd. 4. [TRANSPORTATION PLANNING.] The metropolitan 369.6 council is the designated planning agency for any long-range 369.7 comprehensive transportation planning required by section 134 of 369.8 the Federal Highway Act of 1962, Section 4 of Urban Mass 369.9 Transportation Act of 1964 and Section 112 of Federal Aid 369.10 Highway Act of 1973 and other federal transportation laws. The 369.11 council shall assure administration and coordination of 369.12 transportation planning with appropriate state, regional and 369.13 other agencies, counties, and municipalities, and shall 369.14 establishana transportation advisorybodyboard consisting of 369.15citizens, representatives of municipalities, counties, and state369.16agencies in fulfillment of the planning responsibilities of the369.17council36 members appointed as follows: 369.18 (1) 16 municipal elected officials, representing each of 369.19 the metropolitan council districts, nominated by the association 369.20 of metropolitan municipalities and appointed by the council; 369.21 (2) 12 elected officials, one member appointed by each of 369.22 the county boards of Carver, Scott, and Washington counties, two 369.23 members appointed by each of the county boards of Anoka, Dakota, 369.24 and Ramsey counties, and three members appointed by the Hennepin 369.25 county board; 369.26 (3) four modal representatives appointed by the council, of 369.27 which two must represent public transit, one must represent the 369.28 freight transportation industry, and one must represent 369.29 nonmotorized transportation; 369.30 (4) one member appointed by the commissioner of 369.31 transportation; 369.32 (5) one member appointed by the commissioner of the 369.33 pollution control agency; 369.34 (6) one member appointed by the metropolitan airports 369.35 commission; and 369.36 (7) one member appointed by the council who shall serve as 370.1 the chair of the advisory board. 370.2 The transportation board established under this section succeeds 370.3 any transportation advisory board appointed and functioning 370.4 before the effective date of this section. 370.5 Sec. 25. Minnesota Statutes 2000, section 473.39, is 370.6 amended by adding a subdivision to read: 370.7 Subd. 1h. [OBLIGATIONS.] After July 1, 2001, in addition 370.8 to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, and 1g, the 370.9 council may issue certificates of indebtedness, bonds, or other 370.10 obligations under this section for capital expenditures as 370.11 prescribed in the council's regional transit master plan and 370.12 transit capital improvement program and for related costs, 370.13 including the costs of issuance and sale of the obligations. 370.14 The amount of the obligations issued under this subdivision in 370.15 any year must not exceed an amount equal to the following 370.16 limitations, except as provided in this subdivision: 370.17 (1) for 2002, the limitation is $45,000,000; and 370.18 (2) for each subsequent year, the limitation is equal to 370.19 the last year's limitation calculated under this subdivision 370.20 adjusted for inflation using the United States Department of 370.21 Labor's Bureau of Labor Statistics Minneapolis-St. Paul Consumer 370.22 Price Index for All Urban Consumers (CPI-U) for the last 370.23 taxes-payable-year. For any year in which the council does not 370.24 issue obligations totaling the limitation calculated under this 370.25 subdivision, the remaining available limitation amount may be 370.26 carried forward to later years. The council may issue 370.27 obligations in a carry-forward year in an amount exceeding the 370.28 annual limitation amount carried forward, but the limitation 370.29 amount carried forward is not a permanent increase in the annual 370.30 limitation calculated under this subdivision. 370.31 Sec. 26. Minnesota Statutes 2000, section 473.446, 370.32 subdivision 1, is amended to read: 370.33 Subdivision 1. [WITHIN TRANSIT TAXING DISTRICT.] For the 370.34 purposes of sections 473.405 to 473.449 and the metropolitan 370.35 transit system, except as otherwise provided in this subdivision 370.36 and subdivision 1b, the council shall levy each year upon all 371.1 taxable property within the metropolitan transit taxing 371.2 district, defined in subdivision 2, a transit tax consisting of: 371.3 (a) an amount which shall be used for payment of the 371.4 expenses of operating transit and paratransit service and to 371.5 provide for payment of obligations issued by the council under 371.6 section 473.436, subdivision 6; 371.7 (b) an additional amount, if any, the council determines to 371.8 be necessary to provide for the full and timely payment of its 371.9 certificates of indebtedness and other obligations outstanding 371.10 on July 1, 1985, to which property taxes under this section have 371.11 been pledged; and 371.12 (c) an additional amount necessary to provide full and 371.13 timely payment of certificates of indebtedness, bonds, including 371.14 refunding bonds or other obligations issued or to be issued 371.15 under section 473.39 by the council for purposes of acquisition 371.16 and betterment of property and other improvements of a capital 371.17 nature and to which the council has specifically pledged tax 371.18 levies under this clause. 371.19 The property tax levied by the council for general purposes 371.20 under paragraph (a) must not exceed the following amount for the 371.21 years specified: 371.22 (1) for taxes payable in 1995, the council's property tax 371.23 levy limitation for general transit purposes is equal to the 371.24 former regional transit board's property tax levy limitation for 371.25 general transit purposes under this subdivision, for taxes 371.26 payable in 1994, multiplied by an index for market valuation 371.27 changes equal to the total market valuation of all taxable 371.28 property located within the metropolitan transit taxing district 371.29 for the current taxes payable year divided by the total market 371.30 valuation of all taxable property located within the 371.31 metropolitan transit taxing district for the previous taxes 371.32 payable year;and371.33 (2) for taxes payable in 1996and subsequent yearsthrough 371.34 2002, the product of (i) the council's property tax levy 371.35 limitation for general transit purposes for the previous year 371.36 determined under this subdivision before reduction by the amount 372.1 levied by any municipality in the previous year under section 372.2 473.388, subdivision 7, multiplied by (ii) an index for market 372.3 valuation changes equal to the total market valuation of all 372.4 taxable property located within the metropolitan transit taxing 372.5 district for the current taxes payable year divided by the total 372.6 market valuation of all taxable property located within the 372.7 metropolitan transit taxing district for the previous taxes 372.8 payable year, minus the amount levied by any municipality in the 372.9 current levy year under section 473.388, subdivision 7; 372.10 (3) for taxes payable in 2003, the council's property tax 372.11 levy limitation for general transit purposes is equal to (i) the 372.12 council's property tax levy limitation for general transit 372.13 purposes for the previous year, determined under this 372.14 subdivision before reduction by the amount levied by any 372.15 municipality for the previous year under section 473.388, 372.16 subdivision 7, multiplied by (ii) an index for market valuation 372.17 changes equal to the total market valuation of all taxable 372.18 property located within the metropolitan transit taxing district 372.19 for the current taxes payable year divided by the total market 372.20 valuation of all taxable property located within the 372.21 metropolitan transit taxing district for the previous taxes 372.22 payable year, minus (iii) the amount levied by a municipality 372.23 under section 473.388, subdivision 7, for the same taxes payable 372.24 year as the council's limitation, plus (iv) $17,400,000. The 372.25 council must distribute 13.8 percent of any amount levied 372.26 pursuant to item (iv) as additional financial assistance under 372.27 section 473.388; 372.28 (4) for taxes payable in 2004, the council's property tax 372.29 levy limitation for general transit purposes is equal to (i) the 372.30 council's property tax levy limitation for general transit 372.31 purposes for the previous year, determined under this 372.32 subdivision before reduction by the amount levied by any 372.33 municipality for the previous year under section 473.388, 372.34 subdivision 7, minus (ii) $17,400,000, multiplied by (iii) the 372.35 index for market valuation changes as described in clause (3), 372.36 minus (iv) the amount levied by a municipality under section 373.1 473.388, subdivision 7, for the same taxes payable year as the 373.2 council's limitation, plus (v) $11,500,000. The council must 373.3 distribute 13.8 percent of any amount levied pursuant to item 373.4 (iv) as additional financial assistance under section 473.388; 373.5 and 373.6 (5) for taxes payable in 2005 and thereafter, the council's 373.7 property tax levy limitation for general transit purposes is 373.8 equal to (i) the council's property tax levy limitation for 373.9 general transit purposes for the previous year, determined under 373.10 this subdivision before reduction by the amount levied by any 373.11 municipality for the previous year under section 473.388, 373.12 subdivision 7, but excluding the amount in clause (4), item 373.13 (iv), multiplied by (ii) the index for market valuation changes 373.14 as described in clause (3), minus (iii) the amount levied by a 373.15 municipality under section 473.388, subdivision 7, for the same 373.16 taxes payable year as the council's limitation, plus (iv) 373.17 $11,500,000 times an index for market valuation changes equal to 373.18 the total market valuation of all taxable property located 373.19 within the transit district for the current taxes payable year 373.20 divided by the total market valuation of all taxable property 373.21 located in the district for the taxes payable year 2003. In 373.22 2005, and each year thereafter, the council must distribute 13.8 373.23 percent of any amount levied pursuant to item (iv) as additional 373.24 financial assistance under section 473.388, subdivision 7. 373.25 The portion of the property tax levy for transit district 373.26 operating purposes attributable to a municipality that has 373.27 exercised a local levy option under section 473.388, subdivision 373.28 7, is the amount as determined under subdivision 1b. The 373.29 portion of the property tax levy for transit district operating 373.30 purposes attributable to the remaining municipalities within the 373.31 transit district is found by subtracting the portions 373.32 attributable to the municipalities that have exercised a local 373.33 levy option under section 473.388, subdivision 7. 373.34 For the taxes payable year 1995, the index for market 373.35 valuation changes shall be multiplied by an amount equal to the 373.36 sum of the regional transit board's property tax levy limitation 374.1 for the taxes payable year 1994 and $160,665. The $160,665 374.2 increase shall be a permanent adjustment to the levy limit base 374.3 used in determining the regional transit board's property tax 374.4 levy limitation for general purposes for subsequent taxes 374.5 payable years. 374.6 For the purpose of determining the council's property tax 374.7 levy limitation for general transit purposes under this 374.8 subdivision, "total market valuation" means the total market 374.9 valuation of all taxable property within the metropolitan 374.10 transit taxing district without valuation adjustments for fiscal 374.11 disparities (chapter 473F), tax increment financing (sections 374.12 469.174 to 469.179), and high voltage transmission lines 374.13 (section 273.425). 374.14 The county auditor shall reduce the tax levied pursuant to 374.15 this section and section 473.388 on all property within 374.16 statutory and home rule charter cities and towns that receive 374.17 full-peak service and limited off-peak service by an amount 374.18 equal to the tax levy that would be produced by applying a rate 374.19 of 0.510 percent of net tax capacity on the property. The 374.20 county auditor shall reduce the tax levied pursuant to this 374.21 section and section 473.388 on all property within statutory and 374.22 home rule charter cities and towns that receive limited peak 374.23 service by an amount equal to the tax levy that would be 374.24 produced by applying a rate of 0.765 percent of net tax capacity 374.25 on the property. The amounts so computed by the county auditor 374.26 shall be submitted to the commissioner of revenue as part of the 374.27 abstracts of tax lists required to be filed with the 374.28 commissioner under section 275.29. Any prior year adjustments 374.29 shall also be certified in the abstracts of tax lists. The 374.30 commissioner shall review the certifications to determine their 374.31 accuracy and may make changes in the certification as necessary 374.32 or return a certification to the county auditor for 374.33 corrections. The commissioner shall pay to the council and to 374.34 the municipalities levying under section 473.388, subdivision 7, 374.35 the amounts certified by the county auditors on the dates 374.36 provided in section 273.1398, apportioned between the council 375.1 and the municipality in the same proportion as the total transit 375.2 levy is apportioned within the municipality. There is annually 375.3 appropriated from the general fund in the state treasury to the 375.4 department of revenue the amounts necessary to make these 375.5 payments. 375.6 For the purposes of this subdivision, "full-peak and 375.7 limited off-peak service" means peak period regular route 375.8 service, plus weekday midday regular route service at intervals 375.9 longer than 60 minutes on the route with the greatest frequency; 375.10 and "limited peak period service" means peak period regular 375.11 route service only. 375.12 For the purposes of property taxes payable in the following 375.13 year, the council shall annually determine which cities and 375.14 towns qualify for the 0.510 percent or 0.765 percent tax 375.15 capacity rate reduction and shall certify this list to the 375.16 county auditor of the county wherein such cities and towns are 375.17 located on or before September 15. No changes may be made to 375.18 the annual list after September 15. 375.19[EFFECTIVE DATE.] This section is effective for taxes 375.20 payable in 2002 and thereafter. 375.21 Sec. 27. [STUDY; REPORT.] 375.22 The metropolitan council shall study the feasibility of 375.23 transferring functions or services from metropolitan counties to 375.24 the metropolitan council established in this act in order to 375.25 take advantage of economies of scale without sacrificing equity 375.26 or effectiveness. In addition to any other function or service, 375.27 the study must include an analysis of the feasibility and 375.28 benefits of transferring county correctional facilities and 375.29 county highways to the council. The council shall report to the 375.30 legislature the results of the study by January 15, 2003. 375.31 Sec. 28. [TRANSITION.] 375.32 The appointed chair and appointed metropolitan council 375.33 members holding office on the effective date of this section, 375.34 and any successor appointed to serve as the council chair or as 375.35 a member, shall continue in office until the first Monday in 375.36 January 2003. 376.1 Sec. 29. [APPLICATION.] 376.2 This article applies in the counties of Anoka, Carver, 376.3 Dakota, Hennepin, Ramsey, Scott, and Washington. 376.4 Sec. 30. [REPEALER.] 376.5 Minnesota Statutes 2000, section 473.123, subdivisions 2a, 376.6 3, 3a, and 3c, are repealed. 376.7 ARTICLE 15 376.8 STREAMLINED SALES TAX 376.9 Section 1. [295.60] [SPECIAL FUR CLOTHING TAX.] 376.10 Subdivision 1. [IMPOSITION.] If clothing made of fur is 376.11 not subject to the sales tax under chapter 297A, a tax is 376.12 imposed on each furrier equal to 6.5 percent of gross revenues 376.13 from the sale of clothing made from fur made in Minnesota during 376.14 the calendar year. 376.15 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 376.16 the following terms have the meanings given. 376.17 (b) "Commissioner" means the commissioner of revenue. 376.18 (c) "Furrier" means a retailer that sells clothing made of 376.19 fur. 376.20 (d) "Clothing made of fur" means articles of clothing made 376.21 of fur on the hide or pelt, and articles of clothing of which 376.22 such fur is the component material of chief value, but only if 376.23 such value is more than three times the value of the next most 376.24 valuable material. 376.25 Subd. 3. [PAYMENT.] (a) Each furrier shall make estimated 376.26 payments of the taxes for the calendar year in quarterly 376.27 installments to the commissioner by April 15, July 15, October 376.28 15, and January 15 of the following calendar year. 376.29 (b) Estimated tax payments are not required if: 376.30 (1) the tax for the current calendar year is less than 376.31 $500; or 376.32 (2) the tax for the previous calendar year is less than 376.33 $500, if the taxpayer had a tax liability and was doing business 376.34 the entire year. 376.35 (c) Underpayment of estimated installments bear interest at 376.36 the rate specified in section 270.75, from the due date of the 377.1 payment until paid or until the due date of the annual return, 377.2 whichever comes first. An underpayment of an estimated 377.3 installment is the difference between the amount paid and the 377.4 lesser of (1) 90 percent of one-quarter of the tax for the 377.5 calendar year or (2) one-quarter of the total tax for the 377.6 previous calendar year if the taxpayer had a tax liability and 377.7 was doing business the entire year. 377.8 Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer 377.9 with an aggregate tax liability of $120,000 or more during a 377.10 fiscal year ending June 30 must remit all liabilities by means 377.11 of a funds transfer as defined in section 336.4A-104, paragraph 377.12 (a), in the subsequent calendar year. The funds transfer 377.13 payment date, as defined in section 336.4A-401, is on or before 377.14 the date the tax is due. If the date the tax is due is not a 377.15 funds-transfer business day, as defined in section 336.4A-105, 377.16 paragraph (a), clause (4), the payment date is on or before the 377.17 first funds-transfer business day after the date the tax is due. 377.18 Subd. 5. [ANNUAL RETURN.] The taxpayer must file an annual 377.19 return reconciling the estimated payments by March 15 of the 377.20 following calendar year. 377.21 Subd. 6. [FORM OF RETURNS.] The estimated payments and 377.22 annual return must contain the information and be in the form 377.23 prescribed by the commissioner. 377.24 Subd. 7. [APPLICATION OF OTHER CHAPTERS.] Unless 377.25 specifically provided otherwise by this section, the 377.26 enforcement, interest, and penalty provisions under chapter 294, 377.27 appeal provisions in sections 289A.43 and 289A.65, criminal 377.28 penalties in section 289A.63, refunds provisions in section 377.29 289A.50, and collection and rulemaking provisions under chapter 377.30 270, apply to a liability for the taxes imposed under this 377.31 section. 377.32 Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid 377.33 on an overpayment refunded or credited to the taxpayer from the 377.34 date of payment of the tax until the date the refund is paid or 377.35 credited. For purposes of this subdivision, the date of payment 377.36 is the due date of the return or the date of actual payment of 378.1 the tax, whichever is later. 378.2 Subd. 9. [DEPOSIT OF REVENUES.] The commissioner shall 378.3 deposit all revenues, including penalties and interest, derived 378.4 from the tax imposed by this section in the general fund. 378.5[EFFECTIVE DATE.] This section is effective for sales made 378.6 after December 31, 2001. 378.7 Sec. 2. Minnesota Statutes 2000, section 297A.61, 378.8 subdivision 3, is amended to read: 378.9 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 378.10 include, but are not limited to, each of the transactions listed 378.11 in this subdivision. 378.12 (b) Sale and purchase include any transfer of title or 378.13 possession, or both, of tangible personal property, whether 378.14 absolutely or conditionally, and the leasing of or the granting 378.15 of a license to use or consume, for a consideration, tangible 378.16 personal property, other than a manufactured home used for 378.17 residential purposes for a continuous period of 30 days or more. 378.18 (c) Sale and purchase include the production, fabrication, 378.19 printing, or processing of tangible personal property for a 378.20 consideration for consumers who furnish either directly or 378.21 indirectly the materials used in the production, fabrication, 378.22 printing, or processing. 378.23 (d) Sale and purchase include thefurnishing,preparing, or378.24servingfor a consideration of foodor drinks. Notwithstanding 378.25 section 297A.67, subdivision 2, taxable foodor drinks378.26includeincludes, butareis not limited to, the following: 378.27 (1) prepared foodor drinkssold by the retailerfor378.28immediate consumption on the retailer's premises. Food and378.29drinks sold within a building or grounds that require an378.30admission charge for entrance are presumed to be sold for378.31consumption on the premises; 378.32(2) food or drinks prepared by the retailer for immediate378.33consumption either on or off the retailer's premises. For378.34purposes of this subdivision, "food or drinks prepared for378.35immediate consumption" means any food product upon which an act378.36of preparation including, but not limited to, cooking, mixing,379.1sandwich making, blending, heating, or pouring has been379.2performed by the retailer so the food product may be immediately379.3consumed by the purchaser;379.4(3) ice cream, ice milk, frozen yogurt products, or frozen379.5novelties sold in single or individual servings including, but379.6not limited to, cones, sundaes, and snow cones;379.7(4)(2) soft drinksand other beverages, including all379.8carbonated and noncarbonated beverages or drinks sold in liquid379.9form, but not including beverages or drinks which contain milk379.10or milk products, beverages or drinks containing 15 or more379.11percent fruit juice, and noncarbonated and noneffervescent379.12bottled water sold in individual containers of one-half gallon379.13or more in size; 379.14(5) gum,(3) candy, and candy products; and 379.15(6) ice;379.16(7)(4) all food soldfromthrough vending machines;. 379.17(8) all food for immediate consumption sold from concession379.18stands and vehicles;379.19(9) party trays;379.20(10) all meals and single servings of packaged snack food379.21sold in restaurants and bars; and379.22(11) bakery products that are:379.23(i) prepared by the retailer for consumption on the379.24retailer's premises;379.25(ii) sold at a place that charges admission;379.26(iii) sold from vending machines; or379.27(iv) sold in single or individual servings from concession379.28stands, vehicles, bars, and restaurants.379.29For purposes of this paragraph, "single or individual379.30servings" does not include products when sold in bulk containers379.31or bulk packaging.379.32For purposes of this paragraph, "premises" means the total379.33space and facilities, including buildings, grounds, and parking379.34lots that are made available or that are available for use by379.35the retailer or customer for the purpose of sale or consumption379.36of prepared food and drinks. The premises of a caterer is the380.1place where the catered food or drinks are served.380.2 (e) A sale and a purchase includes the furnishing for a 380.3 consideration of electricity, gas, water, or steam for use or 380.4 consumption within this state or local exchange telephone 380.5 service, intrastate toll service, and interstate toll service, 380.6 if that service originates from and is charged to a telephone 380.7 located in this state. Telephone service includes (1) paging 380.8 services, and (2) private communication service, as defined in 380.9 United States Code, title 26, section 4252(d), except for 380.10 private communication service purchased by an agent acting on 380.11 behalf of the state lottery. Telephone service does not include 380.12 services purchased with a prepaid telephone calling card. The 380.13 furnishing for a consideration of access to telephone services 380.14 by a hotel to its guests is a sale. The furnishing for a 380.15 consideration of items listed in this paragraph by a municipal 380.16 corporation is a sale. 380.17 (f) A sale and a purchase includes the transfer for a 380.18 consideration of computer software. 380.19 (g) A sale and a purchase includes the furnishing for a 380.20 consideration of taxable services as defined in subdivision 16. 380.21 (h) A sale and a purchase includes the furnishing for a 380.22 consideration of tangible personal property or taxable services 380.23 by the United States or any of its agencies or 380.24 instrumentalities, or the state of Minnesota, its agencies, 380.25 instrumentalities, or political subdivisions. 380.26[EFFECTIVE DATE.] This section is effective for sales and 380.27 purchases occurring after December 31, 2001. 380.28 Sec. 3. Minnesota Statutes 2000, section 297A.61, 380.29 subdivision 4, is amended to read: 380.30 Subd. 4. [RETAIL SALE.] (a) A "retail sale" meansaany 380.31 sale, lease, or rental for any purpose other than resalein the380.32regular course of business, sublease, or subrent. 380.33 (b) A sale of property used by the owner only by leasing it 380.34 to others or by holding it in an effort to lease it, and put to 380.35 no use by the owner other than resale after the lease or effort 380.36 to lease, is a sale of property for resale. 381.1 (c) A sale of master computer software that is purchased 381.2 and used to make copies for sale or lease is a sale of property 381.3 for resale. 381.4 (d) A sale of building materials, supplies, and equipment 381.5 to owners, contractors, subcontractors, or builders for the 381.6 erection of buildings or the alteration, repair, or improvement 381.7 of real property is a retail sale in whatever quantity sold, 381.8 whether the sale is for purposes of resale in the form of real 381.9 property or otherwise. 381.10 (e) A sale of carpeting, linoleum, or similar floor 381.11 covering to a person who provides for installation of the floor 381.12 covering is a retail sale and not a sale for resale since a sale 381.13 of floor covering which includes installation is a contract for 381.14 the improvement of real property. 381.15 (f) A sale of shrubbery, plants, sod, trees, and similar 381.16 items to a person who provides for installation of the items is 381.17 a retail sale and not a sale for resale since a sale of 381.18 shrubbery, plants, sod, trees, and similar items that includes 381.19 installation is a contract for the improvement of real property. 381.20 (g) A sale of tangible personal property that is awarded as 381.21 prizes is a retail sale and is not considered a sale of property 381.22 for resale. 381.23 (h) A sale of tangible personal property utilized or 381.24 employed in the furnishing or providing of services under 381.25 subdivision 16, paragraph (b), including, but not limited to, 381.26 property given as promotional items, is a retail sale and is not 381.27 considered a sale of property for resale. 381.28 (i) A sale of tangible personal property used in conducting 381.29 lawful gambling under chapter 349 or the state lottery under 381.30 chapter 349A, including, but not limited to, property given as 381.31 promotional items, is a retail sale and is not considered a sale 381.32 of property for resale. 381.33 (j) A sale of machines, equipment, or devices that are used 381.34 to furnish, provide, or dispense goods or services, including, 381.35 but not limited to, coin-operated devices, is a retail sale and 381.36 is not considered a sale of property for resale. 382.1 (k) In the case of a lease, a retail sale occurs when an 382.2 obligation to make a lease payment becomes due under the terms 382.3 of the agreement or the trade practices of the lessor. 382.4 (l) In the case of a conditional sales contract, a retail 382.5 sale occurs upon the transfer of title or possession of the 382.6 tangible personal property. 382.7[EFFECTIVE DATE.] This section is effective January 1, 2002. 382.8 Sec. 4. Minnesota Statutes 2000, section 297A.61, 382.9 subdivision 7, is amended to read: 382.10 Subd. 7. [SALES PRICE.] (a) "Sales price" meansthe total382.11consideration for a retail sale, valued in money, whether paid382.12in money or by barter or exchange.the measure subject to sales 382.13 tax, and means the total amount of consideration, including 382.14 cash, credit, property, and services, for which personal 382.15 property or services are sold, leased, or rented, valued in 382.16 money, whether received in money or otherwise, without any 382.17 deduction for the following: 382.18 (1) the seller's cost of the property sold; 382.19 (2) the cost of materials used, labor or service cost, 382.20 interest, losses, all costs of transportation to the seller, all 382.21 taxes imposed on the seller, and any other expenses of the 382.22 seller; 382.23 (3) charges by the seller for any services necessary to 382.24 complete the sale, other than delivery and installation charges; 382.25 (4) delivery charges; 382.26 (5) installation charges; and 382.27 (6) the value of exempt property given to the purchaser 382.28 when taxable and exempt personal property have been bundled 382.29 together and sold by the seller as a single product or piece of 382.30 merchandise. 382.31(b) Sales price includes:382.32(1) the cost of the property sold, cost of materials used,382.33labor or service cost, interest, or discount allowed after the382.34sale is consummated;382.35(2) the cost of transportation incurred prior to the time382.36of sale;383.1(3) any amount for which credit is given by the seller to383.2the purchaser;383.3(4) charges for services that are part of a sale; or383.4(5) any other expense whatsoever.383.5(c)(b) Sales price does not includethe following: 383.6 (1)an amount allowed as credit for tangible personal383.7property taken in trade for resalediscounts, including cash, 383.8 terms, or coupons that are not reimbursed by a third party and 383.9 that are allowed by the seller and taken by a purchaser on a 383.10 sale; 383.11 (2)charges of up to 15 percent in lieu of tips if the383.12charges are separately statedinterest, financing, and carrying 383.13 charges from credit extended on the sale of personal property or 383.14 services, if the amount is separately stated on the invoice, 383.15 bill of sale, or similar document given to the purchaser; and 383.16 (3)interest, financing, or carrying charges if the charges383.17are separately stated;any taxes legally imposed directly on the 383.18 consumer that are separately stated on the invoice, bill of 383.19 sale, or similar document given to the purchaser. 383.20(4) charges for labor or services used in installing or383.21applying the property sold if the charges are separately stated;383.22(5) transportation charges if the transportation occurs383.23after the retail sale of the property if the charges are383.24separately stated;383.25(6) cash discounts allowed and taken on sales or the amount383.26refunded either in cash or in credit for property returned by383.27purchasers;383.28(7) the rental motor vehicle tax imposed under section383.29297A.64; or383.30(8) the amount of any tax imposed by the United States on383.31communications services under United States Code, title 26,383.32section 4251(a).383.33(d) Notwithstanding paragraph (c), "sales price," for383.34purposes of sales of ready-mixed concrete sold from a383.35ready-mixed concrete truck, includes any transportation,383.36delivery, or other service charges, and no deduction is allowed384.1for those charges, whether or not the charges are separately384.2stated.384.3[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.4 Sec. 5. Minnesota Statutes 2000, section 297A.61, 384.5 subdivision 9, is amended to read: 384.6 Subd. 9. [RETAILER AND SELLER.] "Retailer" and "seller" 384.7 meanseveryany personengaged inmakingretailsales, leases, 384.8 or rentals of personal property or services. 384.9[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.10 Sec. 6. Minnesota Statutes 2000, section 297A.61, is 384.11 amended by adding a subdivision to read: 384.12 Subd. 24. [PURCHASE PRICE.] "Purchase price" means the 384.13 measure subject to the use tax and has the same meaning as 384.14 "sales price." 384.15[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.16 Sec. 7. Minnesota Statutes 2000, section 297A.61, is 384.17 amended by adding a subdivision to read: 384.18 Subd. 25. [STATE.] Unless specifically provided otherwise, 384.19 "state" means any state of the United States and the District of 384.20 Columbia. 384.21[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.22 Sec. 8. Minnesota Statutes 2000, section 297A.61, is 384.23 amended by adding a subdivision to read: 384.24 Subd. 26. [DELIVERY CHARGES.] "Delivery charges" means 384.25 charges by the seller for preparation and delivery to a location 384.26 designated by the purchaser of personal property or services 384.27 including, but not limited to, transportation, shipping, 384.28 postage, handling, crating, and packing. 384.29[EFFECTIVE DATE.] This section is effective January 1, 2002. 384.30 Sec. 9. Minnesota Statutes 2000, section 297A.61, is 384.31 amended by adding a subdivision to read: 384.32 Subd. 27. [PREPARED FOOD.] "Prepared food" means (i) food 384.33 sold in a heated state or heated by the seller; (ii) two or more 384.34 food ingredients mixed or combined by the seller for sale as a 384.35 single item; or (iii) food sold with eating utensils provided by 384.36 the seller, including plates, knives, forks, spoons, glasses, 385.1 cups, napkins, or straws. Prepared food does not include food 385.2 that is sliced, repackaged, or pasteurized by the seller. 385.3[EFFECTIVE DATE.] This section is effective January 1, 2002. 385.4 Sec. 10. Minnesota Statutes 2000, section 297A.61, is 385.5 amended by adding a subdivision to read: 385.6 Subd. 28. [SOFT DRINKS.] "Soft drinks" means nonalcoholic 385.7 beverages that contain natural or artificial sweeteners. Soft 385.8 drinks do not include beverages that contain milk or milk 385.9 products; soy, rice, or similar milk substitutes; or greater 385.10 than 50 percent vegetable or fruit juice by volume. 385.11[EFFECTIVE DATE.] This section is effective January 1, 2002. 385.12 Sec. 11. Minnesota Statutes 2000, section 297A.61, is 385.13 amended by adding a subdivision to read: 385.14 Subd. 29. [CANDY.] "Candy" means a preparation of sugar, 385.15 honey, or other natural or artificial sweeteners in combination 385.16 with chocolate, fruits, nuts, or other ingredients or flavorings 385.17 in the form of bars, drops, or pieces. Candy does not include 385.18 any preparation containing flour and must require no 385.19 refrigeration. 385.20[EFFECTIVE DATE.] This section is effective January 1, 2002. 385.21 Sec. 12. Minnesota Statutes 2000, section 297A.61, is 385.22 amended by adding a subdivision to read: 385.23 Subd. 30. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 385.24 through vending machines" means food dispensed from a machine or 385.25 other mechanical device that accepts payment. 385.26[EFFECTIVE DATE.] This section is effective January 1, 2002. 385.27 Sec. 13. [297A.668] [SOURCING OF SALE; SITUS IN THIS 385.28 STATE.] 385.29 Subdivision 1. [SOURCING RULES.] (a) The following 385.30 provisions apply regardless of the characterization of a product 385.31 as tangible personal property, a digital good, or a service; but 385.32 do not apply to telecommunications services, or the sales of 385.33 motor vehicles, watercraft, aircraft, modular homes, 385.34 manufactured homes, or mobile homes. These provisions only 385.35 apply to determine a seller's obligation to pay or collect and 385.36 remit a sales or use tax with respect to the seller's sale of a 386.1 product. These provisions do not affect the obligation of a 386.2 seller as purchaser to remit tax on the use of the product. 386.3 (b) When the product is received by the purchaser at a 386.4 business location of the seller, the sale is sourced to that 386.5 business location. 386.6 (c) When the product is not received by the purchaser at a 386.7 business location of the seller, the sale is sourced to the 386.8 location where receipt by the purchaser or the donee designated 386.9 by the purchaser occurs, including the location indicated by 386.10 instructions for delivery to the purchasers or the purchaser's 386.11 donee, known to the seller. 386.12 (d) When paragraphs (b) and (c) do not apply, the sale is 386.13 sourced to the location indicated by an address for the 386.14 purchaser that is available from the business records of the 386.15 seller that are maintained in the ordinary course of the 386.16 seller's business, when use of this address does not constitute 386.17 bad faith. 386.18 (e) When paragraphs (b), (c), and (d) do not apply, the 386.19 sale is sourced to the location indicated by an address for the 386.20 purchaser obtained during the consummation of the sale, 386.21 including the address of a purchaser's payment instrument if no 386.22 other address is available, when use of this address does not 386.23 constitute bad faith. 386.24 (f) When paragraphs (b), (c), (d), and (e) do not apply, 386.25 including the circumstance where the seller is without 386.26 sufficient information to apply the previous paragraphs, then 386.27 the location is determined by the address from which tangible 386.28 personal property was shipped, from which the digital good was 386.29 first available for transmission by the seller, or from which 386.30 the service was provided. 386.31 Subd. 2. [MULTIPLE POINTS OF USE.] (a) Notwithstanding the 386.32 provisions of subdivision 1, a business purchaser that is not a 386.33 holder of a direct pay permit that knows at the time of its 386.34 purchase of a digital good or service that the digital good or 386.35 service will be concurrently available for use in more than one 386.36 taxing jurisdiction shall deliver to the seller in conjunction 387.1 with its purchase a multiple points of use exemption certificate 387.2 disclosing this fact. 387.3 (b) Upon receipt of the multiple points of use exemption 387.4 certificate, the seller is relieved of the obligation to 387.5 collect, pay, or remit the applicable tax and the purchaser is 387.6 obligated to collect, pay, or remit the applicable tax on a 387.7 direct pay basis. 387.8 (c) A purchaser delivering the multiple points of use 387.9 exemption certificate may use any reasonable, but consistent and 387.10 uniform, method of apportionment that is supported by the 387.11 purchaser's business records as they exist at the time of the 387.12 consummation of the sale. 387.13 (d) The multiple points of use exemption certificate 387.14 remains in effect for all future sales by the seller to the 387.15 purchaser until it is revoked in writing. 387.16 (e) A holder of a direct pay permit is not required to 387.17 deliver a multiple points or use exemption certificate to the 387.18 seller. A direct pay permit holder shall follow the provisions 387.19 of paragraph (c) in apportioning the tax due on a digital good 387.20 or a service that will be concurrently available for use in more 387.21 than one taxing jurisdiction. 387.22 Subd. 3. [DEFINITION OF TERMS.] For purposes of this 387.23 section, the terms "receive" and "receipt" mean taking 387.24 possession of tangible personal property, making first use of 387.25 services, or taking possession of making first use of digital 387.26 goods, whichever occurs first. The terms receive and receipt do 387.27 not include possession by a carrier for hire on behalf of the 387.28 purchaser. 387.29[EFFECTIVE DATE.] This section is effective for sales and 387.30 purchases occurring after December 31, 2001. 387.31 Sec. 14. Minnesota Statutes 2000, section 297A.67, 387.32 subdivision 2, is amended to read: 387.33 Subd. 2. [FOODPRODUCTSAND FOOD INGREDIENTS.] 387.34 Foodproducts including, but not limited to, cereal and cereal387.35products, butter, cheese, milk and milk products, oleomargarine,387.36meat and meat products, fish and fish products, eggs and egg388.1products, vegetables and vegetable products, fruit and fruit388.2products, spices and salt, sugar and sugar products, coffee and388.3coffee substitutes, tea, and cocoa and cocoa productsand food 388.4 ingredients are exempt. For purposes of this subdivision, 388.5 "food" and "food ingredients" mean substances, whether in 388.6 liquid, concentrated, solid, frozen, dried, or dehydrated form, 388.7 that are sold for ingestion or chewing by humans and are 388.8 consumed for their taste or nutritional value. Food and food 388.9 ingredients do not include candy, soft drinks, food sold through 388.10 vending machines, and prepared foods. Food and food ingredients 388.11 do not include alcoholic beverages, dietary supplements, and 388.12 tobacco. For purposes of this subdivision, "alcoholic 388.13 beverages" means beverages that are suitable for human 388.14 consumption and contain one-half of one percent or more of 388.15 alcohol by volume. For purposes of this subdivision, "tobacco" 388.16 means cigarettes, cigars, chewing or pipe tobacco, or any other 388.17 item that contains tobacco. For purposes of this subdivision, 388.18 "dietary supplements" means any product, other than tobacco, 388.19 intended to supplement the diet that: 388.20 (1) contains one or more of the following dietary 388.21 ingredients: 388.22 (i) a vitamin; 388.23 (ii) a mineral; 388.24 (iii) an herb or other botanical; 388.25 (iv) an amino acid; 388.26 (v) a dietary substance for use by humans to supplement the 388.27 diet by increasing the total dietary intake; and 388.28 (vi) a concentrate, metabolite, constituent, extract, or 388.29 combination of any ingredient described in items (i) to (v); 388.30 (2) is intended for ingestion in tablet, capsule, powder, 388.31 softgel, gelcap, or liquid form, or if not intended for 388.32 ingestion in such form, is not represented as conventional food 388.33 and is not represented for use as a sole item of a meal or of 388.34 the diet; and 388.35 (3) is required to be labeled as a dietary supplement, 388.36 identifiable by the supplement facts box found on the label and 389.1 as required pursuant to Code of Federal Regulations, title 21, 389.2 section 101.36. 389.3[EFFECTIVE DATE.] This section is effective for sales and 389.4 purchases occurring after December 31, 2001. 389.5 Sec. 15. Minnesota Statutes 2000, section 297A.67, 389.6 subdivision 8, is amended to read: 389.7 Subd. 8. [CLOTHING.] (a) Clothingand wearing apparel,389.8including sewing materials to be directly incorporated into389.9wearing apparel, areis exempt. For purposes of this 389.10 subdivision,clothing and wearing apparel do not include the389.11following:389.12(1) articles designed primarily for use while engaging in a389.13specific sport or recreational activity that are not also worn389.14for general use;389.15(2) articles designed primarily to provide safety or389.16protection against injury while the user is engaged in389.17industrial or general job activities;389.18(3) all articles commonly or commercially known as jewelry389.19including, but not limited to, watches;389.20(4) nonprescription optical glasses of any sort;389.21(5) articles made entirely of fur on the hide or pelt, or389.22partially of such fur if the value of the fur is more than three389.23times the value of the next most valuable component material;389.24(6) perfume, lotions, creams, dyes, or other substances389.25that are applied to the skin or the hair; and389.26(7) luggage, bags, purses, wallets, or cases of any389.27sort."clothing" means all human wearing apparel suitable for 389.28 general use. 389.29 (b) Clothing includes, but is not limited to, aprons, 389.30 household and shop; athletic supporters; baby receiving 389.31 blankets; bathing suits and caps; beach capes and coats; belts 389.32 and suspenders; boots; coats and jackets; costumes; children and 389.33 adult diapers, including disposable; ear muffs; footlets; formal 389.34 wear; garters and garter belts; girdles; gloves and mittens for 389.35 general use; hats and caps; hosiery; insoles for shoes; lab 389.36 coats; neckties; overshoes; pantyhose; rainwear; rubber pants; 390.1 sandals; scarves; shoes and shoe laces; slippers; sneakers; 390.2 socks and stockings; steel-toed boots; underwear; uniforms, 390.3 athletic and nonathletic; and wedding apparel. 390.4 (c) Clothing does not include the following: 390.5 (1) belt buckles sold separately; 390.6 (2) costume masks sold separately; 390.7 (3) patches and emblems sold separately; 390.8 (4) sewing equipment and supplies, including but not 390.9 limited to, knitting needles, patterns, pins, scissors, sewing 390.10 machines, sewing needles, tape measures, and thimbles; 390.11 (5) sewing materials that become part of clothing, 390.12 including but not limited to, buttons, fabric, lace, thread, 390.13 yarn, and zippers; 390.14 (6) clothing accessories or equipment; 390.15 (7) sports or recreational equipment; and 390.16 (8) protective equipment. 390.17 For purposes of this subdivision, "clothing accessories or 390.18 equipment" means incidental items worn on the person or in 390.19 conjunction with clothing. Clothing accessories include, but 390.20 are not limited to, briefcases; cosmetics; hair notions, 390.21 including barrettes, hair bows, and hairnets; handbags; 390.22 handkerchiefs; jewelry; nonprescription sunglasses; umbrellas; 390.23 wallets; watches; and wigs and hairpieces. "Sports or 390.24 recreational equipment" means items designed for human use and 390.25 worn in conjunction with an athletic or recreational activity 390.26 that are not suitable for general use. Sports and recreational 390.27 equipment, includes but is not limited to, ballet and tap shoes; 390.28 cleated or spiked athletic shoes; baseball, bowling, boxing, 390.29 hockey, and golf gloves; goggles; hand and elbow guards; life 390.30 preservers and vests; mouth guards; roller and ice skates; shin 390.31 guards; shoulder pads; ski boots; waders; and wetsuits and 390.32 fins. "Protective equipment" means items for human wear and 390.33 designed as protection of the wearer against injury or disease 390.34 or as protection against damage or injury of other persons or 390.35 property but not suitable for general use. Protective 390.36 equipment, includes but is not limited to, breathing masks; 391.1 clean room apparel and equipment; ear and hearing protectors; 391.2 face shields; finger guards; hard hats; helmets; paint or dust 391.3 respirators; protective gloves; safety glasses and goggles; 391.4 safety belts; tool belts; and welders gloves and masks. 391.5[EFFECTIVE DATE.] This section is effective for sales and 391.6 purchases occurring after December 31, 2001. 391.7 Sec. 16. Minnesota Statutes 2000, section 297A.67, is 391.8 amended by adding a subdivision to read: 391.9 Subd. 26. [TRADE ALLOWANCE.] The amount allowed as a 391.10 credit against the sales price for tangible personal property 391.11 taken in trade for resale is exempt. 391.12[EFFECTIVE DATE.] This section is effective for sales and 391.13 purchases occurring after December 31, 2001. 391.14 Sec. 17. Minnesota Statutes 2000, section 297A.72, 391.15 subdivision 1, is amended to read: 391.16 Subdivision 1. [DUTY OF RETAILER.]AnA fully completed 391.17 exemption certificate conclusively relieves the retailer from 391.18 collecting and remitting the taxonlyif takenin good faith391.19 from the purchaser at the time of sale. 391.20[EFFECTIVE DATE.] This section is effective for sales and 391.21 purchases occurring after December 31, 2001. 391.22 Sec. 18. Minnesota Statutes 2000, section 297A.99, 391.23 subdivision 9, is amended to read: 391.24 Subd. 9. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] 391.25 (a) The commissioner of revenue shall collect the taxes subject 391.26 to this section. The commissioner may collect the tax with the 391.27 state sales and use tax. All taxes under this section are 391.28 subject to the same penalties, interest, and enforcement 391.29 provisions as apply to the state sales and use tax. 391.30 (b) A request for a refund of state sales tax paid in 391.31 excess of the amount of tax legally due includes a request for a 391.32 refund of the political subdivision taxes paid on the goods or 391.33 services. The commissioner shall refund to the taxpayer the 391.34 full amount of the political subdivision taxes paid on exempt 391.35 sales or use. 391.36(c) A political subdivision that is collecting and392.1administering its own sales and use tax before January 1, 1998,392.2may elect to be exempt from this subdivision and subdivision 11.392.3[EFFECTIVE DATE.] This section is effective January 1, 2003. 392.4 Sec. 19. [297A.995] [UNIFORM SALES AND USE TAX 392.5 ADMINISTRATION ACT.] 392.6 Subdivision 1. [TITLE.] This section may be cited as the 392.7 Uniform Sales and Use Tax Administration Act. 392.8 Subd. 2. [DEFINITIONS.] As used in this section: 392.9 (a) "Agreement" means the Streamlined Sales and Use Tax 392.10 Agreement. 392.11 (b) "Certified automated system" means software certified 392.12 jointly by the states that are signatories to the agreement to 392.13 calculate the tax imposed by each jurisdiction on a transaction, 392.14 determine the amount of tax to remit to the appropriate state, 392.15 and maintain a record of the transaction. 392.16 (c) "Certified service provider" means an agent certified 392.17 jointly by the states that are signatories to the agreement to 392.18 perform all of the seller's sales tax functions. 392.19 Subd. 3. [LEGISLATIVE FINDING.] The legislature finds that 392.20 this state should enter into an agreement with one or more 392.21 states to simplify and modernize sales and use tax 392.22 administration in order to substantially reduce the burden of 392.23 tax compliance for all sellers and for all types of commerce. 392.24 Subd. 4. [AUTHORITY TO ENTER AGREEMENT.] The commissioner 392.25 of revenue is authorized and directed to enter into the 392.26 agreement with one or more states to simplify and modernize 392.27 sales and use tax administration in order to substantially 392.28 reduce the burden of tax compliance for all sellers and for all 392.29 types of commerce. In furtherance of the agreement, the 392.30 commissioner is authorized to act jointly with other states that 392.31 are members of the agreement to establish standards for 392.32 certification of a certified service provider and certified 392.33 automated system and establish performance standards for 392.34 multistate sellers. 392.35 The commissioner is further authorized to take other 392.36 actions reasonably required to implement the provisions set 393.1 forth in this article. Other actions authorized by this section 393.2 include, but are not limited to, the adoption of rules and 393.3 regulations and the joint procurement, with other member states, 393.4 of goods and services in furtherance of the cooperative 393.5 agreement. 393.6 The commissioner or the commissioner's designee is 393.7 authorized to represent this state before the other states that 393.8 are signatories to the agreement. 393.9 Subd. 5. [RELATIONSHIP TO STATE LAW.] No provision of the 393.10 agreement authorized by this article in whole or part 393.11 invalidates or amends any provision of the law of this state. 393.12 Adoption of the agreement by this state does not amend or modify 393.13 any law of this state. Implementation of any condition of the 393.14 agreement in this state, whether adopted before, at, or after 393.15 membership of this state in the agreement, must be by the action 393.16 of this state. 393.17 Subd. 6. [AGREEMENT REQUIREMENTS.] The commissioner of 393.18 revenue shall not enter into the agreement unless the agreement 393.19 requires each state to abide by the following requirements: 393.20 (a) [UNIFORM STATE RATE.] The agreement must set 393.21 restrictions to achieve more uniform state rates through the 393.22 following: 393.23 (1) limiting the number of state rates; 393.24 (2) eliminating maximums on the amount of state tax that is 393.25 due on a transaction; and 393.26 (3) eliminating thresholds on the application of state tax. 393.27 (b) [UNIFORM STANDARDS.] The agreement must establish 393.28 uniform standards for the following: 393.29 (1) the sourcing of transactions to taxing jurisdictions; 393.30 (2) the administration of exempt sales; 393.31 (3) the allowances a seller can take for bad debts; and 393.32 (4) sales and use tax returns and remittances. 393.33 (c) [UNIFORM DEFINITIONS.] The agreement must require 393.34 states to develop and adopt uniform definitions of sales and use 393.35 tax terms. The definitions must enable a state to preserve its 393.36 ability to make policy choices not inconsistent with the uniform 394.1 definitions. 394.2 (d) [CENTRAL REGISTRATION.] The agreement must provide a 394.3 central, electronic registration system that allows a seller to 394.4 register to collect and remit sales and use taxes for all 394.5 signatory states. 394.6 (e) [NO NEXUS ATTRIBUTION.] The agreement must provide that 394.7 registration with the central registration system and the 394.8 collection of sales and use taxes in the signatory states will 394.9 not be used as a factor in determining whether the seller has 394.10 nexus with a state for any tax. 394.11 (f) [LOCAL SALES AND USE TAXES.] The agreement must provide 394.12 for reduction of the burdens of complying with local sales and 394.13 use taxes through the following: 394.14 (1) restricting and eliminating variances between the state 394.15 and local tax bases; 394.16 (2) requiring states to administer any sales and use taxes 394.17 levied by local jurisdictions within the state so that sellers 394.18 collecting and remitting these taxes will not have to register 394.19 or file returns with, remit funds to, or be subject to 394.20 independent audits from local taxing jurisdictions; 394.21 (3) restricting the frequency of changes in the local sales 394.22 and use tax rates and setting effective dates for the 394.23 application of local jurisdictional boundary changes to local 394.24 sales and use taxes; and 394.25 (4) providing notice of changes in local sales and use tax 394.26 rates and of changes in the boundaries of local taxing 394.27 jurisdictions. 394.28 (g) [MONETARY ALLOWANCES.] The agreement must outline any 394.29 monetary allowances that are to be provided by the states to 394.30 sellers or certified service providers. 394.31 (h) [STATE COMPLIANCE.] The agreement must require each 394.32 state to certify compliance with the terms of the agreement 394.33 prior to joining and to maintain compliance, under the laws of 394.34 the member state, with all provisions of the agreement while a 394.35 member. 394.36 (i) [CONSUMER PRIVACY.] The agreement must require each 395.1 state to adopt a uniform policy for certified service providers 395.2 that protects the privacy of consumers and maintains the 395.3 confidentiality of tax information. 395.4 (j) [ADVISORY COUNCILS.] The agreement must provide for the 395.5 appointment of an advisory council of private sector 395.6 representatives and an advisory council of nonmember state 395.7 representatives to consult with in the administration of the 395.8 agreement. 395.9 Subd. 7. [COOPERATING SOVEREIGNS.] The agreement 395.10 authorized by this article is an accord among individual 395.11 cooperating sovereigns in furtherance of their governmental 395.12 functions. The agreement provides a mechanism among the member 395.13 states to establish and maintain a cooperative, simplified 395.14 system for the application and administration of sales and use 395.15 taxes under the duly adopted law of each member state. 395.16 Subd. 8. [LIMITED BINDING AND BENEFICIAL EFFECT.] (a) The 395.17 agreement authorized by this article binds and inures only to 395.18 the benefit of this state and the other member states. No 395.19 person, other than a member state, is an intended beneficiary of 395.20 the agreement. Any benefit to a person other than a state is 395.21 established by the law of this state and the other member states 395.22 and not by the terms of the agreement. 395.23 (b) Consistent with paragraph (a), no person shall have any 395.24 cause of action or defense under the agreement or by virtue of 395.25 this state's approval of the agreement. No person may 395.26 challenge, in any action brought under any provision of law, any 395.27 action or inaction by any department, agency, or other 395.28 instrumentality of this state, or any political subdivision of 395.29 this state, on the ground that the action or inaction is 395.30 inconsistent with the agreement. 395.31 (c) No law of this state, or its application, may be 395.32 declared invalid as to any person or circumstance on the ground 395.33 that the provision or application is inconsistent with the 395.34 agreement. 395.35 Subd. 9. [SELLER AND THIRD PARTY LIABILITY.] (a) A 395.36 certified service provider is the agent of a seller, with whom 396.1 the certified service provider has contracted, for the 396.2 collection and remittance of sales and use taxes. As the 396.3 seller's agent, the certified service provider is liable for 396.4 sales and use tax due each member state on all sales 396.5 transactions it processes for the seller except as set out in 396.6 this section. 396.7 A seller that contracts with a certified service provider 396.8 is not liable to the state for sales or use tax due on 396.9 transactions processed by the certified service provider unless 396.10 the seller misrepresented the type of items it sells or 396.11 committed fraud. In the absence of probable cause to believe 396.12 that the seller has committed fraud or made a material 396.13 misrepresentation, the seller is not subject to audit on the 396.14 transactions processed by the certified service provider. A 396.15 seller is subject to audit for transactions not processed by the 396.16 certified service provider. The member states acting jointly 396.17 may perform a system check of the seller and review the seller's 396.18 procedures to determine if the certified service provider's 396.19 system is functioning properly and the extent to which the 396.20 seller's transactions are being processed by the certified 396.21 service provider. 396.22 (b) A person that provides a certified automated system is 396.23 responsible for the proper functioning of that system and is 396.24 liable to the state for underpayments of tax attributable to 396.25 errors in the functioning of the certified automated system. A 396.26 seller that uses a certified automated system remains 396.27 responsible and is liable to the state for reporting and 396.28 remitting tax. 396.29 (c) A seller that has a proprietary system for determining 396.30 the amount of tax due on transactions and has signed an 396.31 agreement establishing a performance standard for that system is 396.32 liable for the failure of the system to meet the performance 396.33 standard. 396.34[EFFECTIVE DATE.] This section is effective the day 396.35 following final enactment. 396.36 ARTICLE 16 397.1 SPECIAL TAXES 397.2 Section 1. Minnesota Statutes 2000, section 239.101, 397.3 subdivision 3, is amended to read: 397.4 Subd. 3. [PETROLEUM INSPECTION FEE.]A person who owns397.5petroleum products held in storage at a pipeline terminal, river397.6terminal, or refinery shall pay a petroleum inspection fee of 85397.7cents for every 1,000 gallons sold or withdrawn from the397.8terminal or refinery storageAn inspection fee is imposed on 397.9 petroleum products when received by the first licensed 397.10 distributor, and on petroleum products received and held for 397.11 sale or use by any person when the petroleum products have not 397.12 previously been received by a licensed distributor. The 397.13 petroleum inspection fee is 85 cents for every 1,000 gallons 397.14 received. The commissioner of revenue shall collect the fee. 397.15 The revenue from the fee must first be applied to cover the 397.16 amounts appropriated for petroleum product quality inspection 397.17 expenses, for the inspection and testing of petroleum product 397.18 measuring equipment, and for petroleum supply monitoring under 397.19 chapter 216C. 397.20 The commissioner of revenue shall credit a person for 397.21 inspection fees previously paid in error or for any material 397.22 exported or sold for export from the state upon filing of a 397.23 report as prescribed by the commissioner of revenue. The 397.24 commissioner of revenue may collect the inspection fee along 397.25 with any taxes due under chapter 296A. 397.26[EFFECTIVE DATE.] This section is effective for petroleum 397.27 products received on or after July 1, 2001. 397.28 Sec. 2. Minnesota Statutes 2000, section 287.035, is 397.29 amended to read: 397.30 287.035 [IMPOSITION OF TAX.] 397.31 A taxof 23 centsis imposed uponeach $100, or fraction397.32thereof, ofthe debt or portion of a debt that is secured by any 397.33 recorded mortgage of real property located in this state at the 397.34 rate of .0023. The person liable for the tax is the mortgagee. 397.35 The tax is not imposed on the lawful interest amounts that may 397.36 accrue with respect to a debt. 398.1[EFFECTIVE DATE.] This section is effective for documents 398.2 executed, recorded, or registered after June 30, 2001. 398.3 Sec. 3. Minnesota Statutes 2000, section 287.04, is 398.4 amended to read: 398.5 287.04 [EXEMPTIONS.] 398.6 The tax imposed by section 287.035 does not apply to: 398.7 (a) A decree of marriage dissolution or an instrument made 398.8 pursuant to it. 398.9 (b) A mortgage given to correct a misdescription of the 398.10 mortgaged property. 398.11 (c) A mortgage or other instrument that adds additional 398.12 security for the same debt for which mortgage registry tax has 398.13 been paid. 398.14 (d) A contract for the conveyance of any interest in real 398.15 property, including a contract for deed. 398.16 (e) A mortgage secured by real property subject to the 398.17 minerals production tax of sections 298.24 to 298.28. 398.18 (f) The principal amount of bonds or other obligations 398.19 issued by the St. Paul port authority under its common revenue 398.20 bond fund if each of the following conditions are met. 398.21 (1) The bonds or other obligations are secured by a 398.22 mortgage on property, title to which is held by the political 398.23 subdivision. 398.24 (2) The mortgage is recorded after May 19, 1993. 398.25 (3) The bonds or other obligations are either (i) 398.26 outstanding on May 19, 1993, or (ii) issued in exchange for or 398.27 to otherwise refund bonds or other obligations the original 398.28 series of which were issued before May 19, 1993. 398.29 (g) Mortgages taken in good faith by persons or 398.30 corporations whose property is expressly exempted from taxation 398.31 by section 272.02, subdivisions 2 to 8, or mortgagees that are 398.32 fraternal benefit societies subject to section 64B.24. 398.33 (h) A mortgage amendment or extension, as defined in 398.34 section 287.01. 398.35 (i) An agricultural mortgage if the proceeds of the loan 398.36 secured by the mortgage are used (1) to acquire or improve real 399.1 property classified under section 273.13, subdivision 23, 399.2 paragraph (a) or (b), clause (1), (2), or (3); or (2) in the 399.3 production of agricultural products as defined in section 399.4 273.13, subdivision 23, paragraph (e), and the mortgagor signs a 399.5 statement provided by the county stating that the proceeds of 399.6 the loan secured by the mortgage will be used for the purposes 399.7 listed under this subdivision. 399.8[EFFECTIVE DATE.] This section is effective for documents 399.9 recorded on or after July 1, 2001. 399.10 Sec. 4. Minnesota Statutes 2000, section 287.20, 399.11 subdivision 2, is amended to read: 399.12 Subd. 2. [CONSIDERATION.] (a) "Consideration" means 399.13 generally the total monetary value that is given in return for a 399.14 conveyance of real property in this state and includes all 399.15 lump-sum payments, all prior or future installment payments that 399.16 are required under the agreement between the parties, and the 399.17 fair market value of any property taken, or to be taken, in 399.18 exchange. 399.19 (b) Consideration does not include the reasonable and 399.20 lawful amounts of interest paid for the privilege of paying the 399.21 purchase price in installments and the fair market value of any 399.22 items of intangible personal property that are conveyed by the 399.23 taxable instrument. 399.24 (c) Consideration does not include the amount paid for the 399.25 personal property located on the real property being conveyed 399.26 and transferred as a part of the total consideration, except 399.27 that the amount paid for the personal property located on the 399.28 real property being conveyed must be included if the real 399.29 property being conveyed is a one-, two-, or three-unit 399.30 residential structure. 399.31 (d) When a conveyance of real property is made pursuant to 399.32 a contract for deed, the consideration is the price for the real 399.33 property reflected in the contract; except that, subject to the 399.34 limitations under section 287.221,when the conveyance is made399.35by a person engaged in the business of land sales or399.36construction of buildings and other improvements, or by an400.1affiliated personif the contract for deed, or other agreement 400.2 entered into as a condition to the seller executing the 400.3 contract, requires the property to be improved during the term 400.4 of the contract and the price of the real property as reflected 400.5 in the contract does not include the consideration for the 400.6 required improvements, then the consideration is theamount paid400.7for the landprice for the real property as reflected in the 400.8 contract and the consideration for the required improvements 400.9 added during the term of the contract.By January 1, 2001, the400.10commissioner shall adopt rules that define the phrases "engaged400.11in the business of land sales or construction of buildings and400.12other improvements" and "affiliated person" as those phrases are400.13used in this paragraph.400.14 (e) "Total consideration" has the same meaning as 400.15 consideration. 400.16 (f) "Consideration, exclusive of the value of any lien or 400.17 encumbrance remaining at the time of sale" or "net 400.18 consideration" means the amount of consideration as reduced by 400.19 the amount outstanding under any lien that attached to the real 400.20 property prior to the time of sale and that is not released or 400.21 satisfied as a result of the sale. 400.22[EFFECTIVE DATE.] This section is effective for deeds 400.23 recorded on or after July 1, 2001. 400.24 Sec. 5. Minnesota Statutes 2000, section 287.21, 400.25 subdivision 1, is amended to read: 400.26 Subdivision 1. [DETERMINATION OF TAX.] (a) A tax is 400.27 imposed on each deed or instrument by which any real property in 400.28 this state is granted, assigned, transferred, or otherwise 400.29 conveyed. The tax applies against the net consideration. 400.30 (b) The tax is determined in the following manner: (1) 400.31 when transfers are made by instruments pursuant to mergers, 400.32 consolidations, sales, or transfers of substantially all of the 400.33 assets of the entities as defined in section 287.20, subdivision 400.34 9, pursuant to plans of reorganization, the tax is $1.65; (2) 400.35 when there is no consideration or when the consideration, 400.36 exclusive of the value of any lien or encumbrance remaining 401.1 thereon at the time of sale, is $500 or less, the tax is $1.65; 401.2 or (3) when the consideration, exclusive of the value of any 401.3 lien or encumbrance remaining at the time of sale, exceeds $500, 401.4 the tax is$1.65 plus $1.65 for each additional $500 or fraction401.5of that amount.0033 of the net consideration. 401.6 (c) The tax is due at the time a taxable deed or instrument 401.7 is presented for recording. 401.8[EFFECTIVE DATE.] This section is effective for documents 401.9 executed, recorded, or registered after June 30, 2001. 401.10 Sec. 6. Minnesota Statutes 2000, section 296A.07, 401.11 subdivision 4, is amended to read: 401.12 Subd. 4. [TRANSIT SYSTEM EXEMPTEXEMPTIONS.] The 401.13 provisions of subdivision 1 do not apply to gasoline purchased 401.14 by: 401.15 (1) a transit system or transit provider receiving 401.16 financial assistance or reimbursement under section 174.24, 401.17 256B.0625, subdivision 17, or 473.384; or 401.18 (2) an ambulance service licensed under chapter 144E. 401.19 Sec. 7. Minnesota Statutes 2000, section 296A.07, is 401.20 amended by adding a subdivision to read: 401.21 Subd. 5. [ANNUAL GASOLINE TAX RATE ADJUSTMENT.] (a) Before 401.22 April 1 of each year, the commissioner of revenue shall 401.23 recompute and publish the rate of the gasoline excise tax. The 401.24 new rate per gallon must be calculated by multiplying the rate 401.25 in effect at the time of the calculation by an amount obtained 401.26 under paragraph (b). The new rate must be rounded to the 401.27 nearest 0.1 cent and is effective on April 1 of each year. 401.28 (b) Divide the annual average United States Consumer Price 401.29 Index for all urban consumers, United States city average, as 401.30 determined by the United States Department of Labor for the 401.31 previous year by that annual average for the year before the 401.32 previous year. 401.33[EFFECTIVE DATE.] This section is effective January 1, 2003. 401.34 Sec. 8. Minnesota Statutes 2000, section 296A.08, 401.35 subdivision 3, is amended to read: 401.36 Subd. 3. [TRANSIT SYSTEM EXEMPTEXEMPTIONS.] The 402.1 provisions of subdivisions 1 and 2 do not apply to special fuel 402.2 or alternative fuels purchased by: 402.3 (1) a transit system or transit provider receiving 402.4 financial assistance or reimbursement under section 174.24, 402.5 256B.0625, subdivision 17, or 473.384; or 402.6 (2) an ambulance service licensed under chapter 144E. 402.7 Sec. 9. Minnesota Statutes 2000, section 296A.08, is 402.8 amended by adding a subdivision to read: 402.9 Subd. 7. [ANNUAL SPECIAL FUEL TAX RATE ADJUSTMENT.] (a) 402.10 Before April 1 of each year, the commissioner of revenue shall 402.11 recompute and publish the rate of the special fuel tax. The new 402.12 rate must be calculated by multiplying the rate in effect at the 402.13 time of the calculation by an amount obtained under paragraph 402.14 (b). The new rate must be rounded to the nearest 0.1 cent and 402.15 is effective on April 1 of each year. 402.16 (b) Divide the annual average United States Consumer Price 402.17 Index for all urban consumers, United States city average, as 402.18 determined by the United States Department of Labor for the 402.19 previous year by that annual average for the year before the 402.20 previous year. 402.21[EFFECTIVE DATE.] This section is effective January 1, 2003. 402.22 Sec. 10. Minnesota Statutes 2000, section 296A.15, 402.23 subdivision 1, is amended to read: 402.24 Subdivision 1. [MONTHLY GASOLINE REPORT; SHRINKAGE 402.25 ALLOWANCE.] (a) Except as provided in paragraph (e), on or 402.26 before the 23rd day of each month, every person who is required 402.27 to pay a gasoline tax shall file with the commissioner a report, 402.28 in the form and manner prescribed by the commissioner, showing 402.29 the number of gallons of petroleum products received by the 402.30 reporter during the preceding calendar month, and other 402.31 information the commissioner may require. A written report is 402.32 deemed to have been filed as required in this subdivision if 402.33 postmarked on or before the 23rd day of the month in which the 402.34 tax is payable. 402.35 (b) The number of gallons of gasoline must be reported in 402.36 United States standard liquid gallons, 231 cubic inches, except 403.1 that the commissioner may upon written application and for cause 403.2 shown permit the distributor to report the number of gallons of 403.3 gasoline as corrected to a temperature of 60-degrees 403.4 Fahrenheit. If the application is granted, all gasoline covered 403.5 in the application and allowed by the commissioner must continue 403.6 to be reported by the distributor on the adjusted basis for a 403.7 period of one year from the date of the granting of the 403.8 application. The number of gallons of petroleum products other 403.9 than gasoline must be reported as originally invoiced. Each 403.10 report must show separately the number of gallons of aviation 403.11 gasoline received by the reporter during each calendar month. 403.12 (c) Each report must also include the amount of gasoline 403.13 tax on gasoline received by the reporter during the preceding 403.14 month. In computing the tax a deduction ofthree2.5 percent of 403.15 the quantity of gasoline received by a distributor shall be made 403.16 for evaporation and loss. At the time of reporting, the 403.17 reporter shall submit satisfactory evidence that one-third of 403.18 thethree2.5 percent deduction has been credited or paid to 403.19 dealers on quantities sold to them. 403.20 (d) Each report shall contain a confession of judgment for 403.21 the amount of the tax shown due to the extent not timely paid. 403.22 (e) Under certain circumstances and with the approval of 403.23 the commissioner, taxpayers may be allowed to file reports 403.24 annually. 403.25[EFFECTIVE DATE.] This section is effective for reports due 403.26 on or after July 1, 2001. 403.27 Sec. 11. Minnesota Statutes 2000, section 297B.09, 403.28 subdivision 1, is amended to read: 403.29 Subdivision 1. [GENERAL FUND SHARE.]Money collected and403.30received under this chapter must be deposited as provided in403.31this subdivision.403.32 Thirty-two percent of the money collected and received 403.33 under this chapter after June 30, 2001, must be deposited in the 403.34 highway user tax distribution fund, and the remaining 68 percent 403.35 of the money must be deposited in the general fund. 403.36 Sec. 12. Minnesota Statutes 2000, section 297H.04, is 404.1 amended by adding a subdivision to read: 404.2 Subd. 4. [DISPOSAL WITH MIXED WASTE; RATE.] Nonmixed 404.3 municipal solid waste that is separately collected or processed, 404.4 but is disposed of within the permitted boundaries of a land 404.5 disposal facility that is also actively accepting and disposing 404.6 of mixed municipal solid waste, shall be taxed at the rate for 404.7 mixed municipal solid waste, unless the facility owner and 404.8 operator can demonstrate a physical separation between the mixed 404.9 municipal solid waste disposal area and nonmixed municipal solid 404.10 waste disposal area, such that any air or liquid emissions being 404.11 collected from the disposal areas are collected separately. 404.12[EFFECTIVE DATE.] This section is effective for waste 404.13 disposed of after June 30, 2001. 404.14 Sec. 13. [297H.14] [MIXED MUNICIPAL SOLID WASTE PROCESSING 404.15 TAX CREDIT.] 404.16 Subdivision 1. [DEFINITIONS.] (a) "Commissioner" means the 404.17 commissioner of revenue. 404.18 (b) "Processed" means mixed municipal solid waste that has 404.19 been: 404.20 (1) burned for energy recovery; or 404.21 (2) processed into usable compost or refuse derived fuel. 404.22 (c) "Resource recovery facility" has the meaning given it 404.23 in section 115A.03, subdivision 28. 404.24 Subd. 2. [TAX CREDIT.] (a) The commissioner shall pay 404.25 counties a processing tax credit for each ton of mixed municipal 404.26 solid waste that is generated in the county and processed at a 404.27 resource recovery facility located in Minnesota. The processing 404.28 tax credit shall be $10 for each ton of mixed municipal solid 404.29 waste processed. 404.30 (b) By the last day of October, January, April, and July, 404.31 each county claiming the credit shall file a claim for payment 404.32 with the commissioner for the three previous months certifying 404.33 the number of tons of mixed municipal solid waste that were 404.34 generated in the county and processed at a resource recovery 404.35 facility. The commissioner shall pay the processing tax credits 404.36 by November 15, February 15, May 15, and August 15 each year. 405.1 (c) If the total amount for which all counties are eligible 405.2 in a quarter exceeds the amount available for payment, the 405.3 commissioner shall make the payments on a pro rata basis. 405.4 (d) All of the credit received by a county must be used to 405.5 pay for resource recovery services. At least 50 percent of the 405.6 credit received by a county must be used to lower the tipping 405.7 fee for waste to be processed at a resource recovery facility. 405.8 Subd. 3. [EXPIRATION DATE.] The tax credit in this section 405.9 expires on July 1, 2005. For waste delivered to a resource 405.10 recovery facility from April 1, 2005, to June 30, 2005, a county 405.11 must submit payment claims by July 31, 2005. The commissioner 405.12 shall make the final mixed municipal solid waste processing tax 405.13 credit payments by August 15, 2005. 405.14 Subd. 4. [APPROPRIATION.] $12,000,000 in fiscal year 2002 405.15 and $12,000,000 in fiscal year 2003 are appropriated from the 405.16 environmental fund to the commissioner of revenue for mixed 405.17 municipal solid waste processing tax credits under this section. 405.18[EFFECTIVE DATE.] This section is effective on July 1, 405.19 2001, and applies to waste delivered to a resource recovery 405.20 facility beginning July 1, 2001. 405.21 Sec. 14. Minnesota Statutes 2000, section 297I.40, 405.22 subdivision 1, is amended to read: 405.23 Subdivision 1. [REQUIREMENT TO PAY.] On or beforeApril 1405.24 March 15, June115, September 15, and December1 of each year405.25 15 of the current year, every taxpayer subject to tax under 405.26 section 297I.05, subdivisions 1 to 6, and 12, paragraphs (a), 405.27 clauses (1) to (5), (b), and (e), must pay to the commissioner 405.28 an installment equal toone-thirdone-fourth of the insurer's 405.29 total estimated tax for the current year. 405.30[EFFECTIVE DATE.] This section is effective for payments 405.31 required to be made after December 31, 2001. 405.32 Sec. 15. Minnesota Statutes 2000, section 297I.40, 405.33 subdivision 2, is amended to read: 405.34 Subd. 2. [AMOUNT OF REQUIRED INSTALLMENT.] The amount of 405.35 any required installment isone-thirdone-fourth of the lesser 405.36 of 406.1 (1) 80 percent of the tax imposed for the current year, or 406.2 (2) 100 percent of the tax paid for the previous year. 406.3[EFFECTIVE DATE.] This section is effective for payments 406.4 required to be made after December 31, 2001. 406.5 Sec. 16. Minnesota Statutes 2000, section 297I.40, 406.6 subdivision 7, is amended to read: 406.7 Subd. 7. [APRILMARCH ESTIMATED PAYMENT.] A taxpayer who 406.8 claims a refund of an overpayment on an original return may 406.9 elect to have all or any portion of the overpayment applied as a 406.10 credit to theApril 1March 15 estimated tax payment for the 406.11 year following the year of the return. The credit is considered 406.12 applied onApril 1March 15. Notwithstanding section 297I.80, 406.13 the amount credited does not bear interest. 406.14[EFFECTIVE DATE.] This section is effective for payments 406.15 required to be made after December 31, 2001. 406.16 Sec. 17. Laws 2000, chapter 490, article 7, section 3, is 406.17 amended to read: 406.18 Sec. 3. [APPROPRIATION.] 406.19 For fiscal year 2001, $149,804,000 is appropriated from the 406.20 general fund to the highway user tax distribution fund.For406.21fiscal year 2002, $161,723,000 is appropriated from the general406.22fund to the highway user tax distribution fund.406.23 Sec. 18. [APPROPRIATION.] 406.24 A one-time appropriation of $140,000 is appropriated for 406.25 fiscal year 2002 from the highway user tax distribution fund to 406.26 the commissioner of revenue for systems modifications associated 406.27 with petroleum tax reform. 406.28 Sec. 19. [REPEALER.] 406.29 Minnesota Statutes 2000, section 296A.16, subdivision 6, is 406.30 repealed. 406.31[EFFECTIVE DATE.] This section is effective the day 406.32 following final enactment. 406.33 ARTICLE 17 406.34 ELECTRONIC FILING AND PAYING OF TAXES 406.35 Section 1. Minnesota Statutes 2000, section 115B.24, 406.36 subdivision 2, is amended to read: 407.1 Subd. 2. [DECLARATIONS OF ESTIMATED TAX.]For 1983, every407.2generator of hazardous waste required to pay a tax pursuant to407.3section 115B.22 shall make a declaration of estimated hazardous407.4waste generated for the last six months of calendar year 1983 if407.5the tax can reasonably be estimated to exceed $500. The407.6declaration of the estimated tax shall be filed by October 15,407.71983. The amount of estimated tax with respect to which a407.8declaration is required shall be paid in two equal installments407.9by October 15, 1983 and January 15, 1984.For 1984 and 407.10 subsequent years, every generator of hazardous waste required to 407.11 pay a tax pursuant to section 115B.22 shall make a declaration 407.12 of estimated hazardous waste generated for the calendar year if 407.13 the tax can reasonably be expected to be in excess of $1,000. 407.14 The declaration of estimated tax shall be filed by March 15. 407.15 The amount of estimated tax with respect to which a declaration 407.16 is required shall be paid in four equal installments on or 407.17 before the 15th day of March, June, September, and December. 407.18 An amendment of a declaration may be filed in any interval 407.19 between installment dates prescribed above but only one 407.20 amendment may be filed in each interval. If an amendment of a 407.21 declaration is filed, the amount of each remaining installment 407.22 shall be the amount which would have been payable if the new 407.23 estimate had been made when the first estimate for the calendar 407.24 year was made, increased or decreased, as the case may be, by 407.25 the amount computed by dividing 407.26 (1) the difference between (A) the amount of estimated tax 407.27 required to be paid before the date on which the amendment was 407.28 made, and (B) the amount of estimated tax which would have been 407.29 required to be paid before that date if the new estimate had 407.30 been made when the first estimate was made, by 407.31 (2) the number of installments remaining to be paid on or 407.32 after the date on which the amendment is made. 407.33 The commissioner of revenue may grant a reasonable 407.34 extension of time for filing any declaration but the extension 407.35 shall not be for more than six months. 407.36 If the aggregate amount of estimated tax payments made 408.1 duringathe fiscal year ending June 30, 2001, is equal to or 408.2 exceeds $80,000, or $40,000 for the fiscal year ending June 30, 408.3 2002, $20,000 for the fiscal year ending June 30, 2003, and 408.4 $10,000 for the fiscal year ending June 30, 2004, and each 408.5 fiscal year ending June 30 thereafter, all estimated tax 408.6 payments in the subsequent calendar year must be paid 408.7 by electronic meansof a funds transfer as defined in section408.8336.4A-104, paragraph (a). The funds transfer payment date, as408.9defined in section 336.4A-401, must be on or before the date the408.10estimated tax payment is due. If the date the estimated tax408.11payment is due is not a funds transfer business day, as defined408.12in section 336.4A-105, paragraph (a), clause (4), the payment408.13date must be on or before the funds transfer business day next408.14following the date the estimated tax payment is due. 408.15[EFFECTIVE DATE.] This section is effective for payments 408.16 due on or after July 1, 2001. 408.17 Sec. 2. Minnesota Statutes 2000, section 270.271, 408.18 subdivision 1, is amended to read: 408.19 Subdivision 1. [DATE OF DELIVERY.] When a document, 408.20 including a return, claim, or statement, is required to be 408.21 filed, or a payment is required to be made to the commissioner 408.22 within a prescribed period, or on or before a prescribed date, 408.23 and if the document or payment is delivered by electronic means 408.24 or by United States mail after the period or the date to the 408.25 place prescribed for filing or payment, then the date of 408.26 delivery or of payment is the date of the confirmation 408.27 time-and-date stamp of the transaction, if delivered by 408.28 electronic means, or the date of the United States postmark 408.29 stamped on the cover in which the document or payment is mailed, 408.30 if delivered by United States mailshall be considered the date408.31of delivery or of payment, as the case may be. 408.32[EFFECTIVE DATE.] This section is effective for returns and 408.33 payments due on or after July 1, 2001. 408.34 Sec. 3. Minnesota Statutes 2000, section 270.271, 408.35 subdivision 3, is amended to read: 408.36 Subd. 3. [CONFIRMATION OF ELECTRONIC FILING AND PAYMENT 409.1 AND UNITED STATES POSTAL SERVICE POSTMARK.] The confirmation 409.2 numbers and confirmation time-and-date stamps received by the 409.3 taxpayer following electronic payment or filing is proof of the 409.4 payment authorization and filing dates. Only the postmark of 409.5 the United States Postal Service, rather than those of private 409.6 postage meters, qualifies as proof of timely mailing under this 409.7 section. If the document or payment is sent by United States 409.8 registered mail, the date of registration shall be treated as 409.9 the postmark date. If the document or payment is sent by United 409.10 States certified mail and the sender's receipt is postmarked by 409.11 the postal employee to whom the envelope containing such 409.12 document or payment is presented, the date of the United States 409.13 postmark on the receipt shall be treated as the postmark date of 409.14 the document or payment. 409.15[EFFECTIVE DATE.] This section is effective for returns and 409.16 payments due on or after July 1, 2001. 409.17 Sec. 4. Minnesota Statutes 2000, section 270.771, is 409.18 amended to read: 409.19 270.771 [PAYMENTS REQUIRED TO BE MADEBY ELECTRONIC FUNDS409.20TRANSFERELECTRONICALLY.] 409.21 (a) If a taxpayer is required to make payment of a tax to 409.22 the commissioner by electronic meansof electronic funds409.23transfer as defined in section 336.4A-104, paragraph (a), the 409.24 taxpayer shall make all payments of all taxes and fees paid to 409.25 the commissioner by electronic meansof electronic funds409.26transfer. 409.27 (b) Paragraph (a) does not apply to payments required to be 409.28 made for individual income taxes under section 289A.20, 409.29 subdivision 1, paragraph (a), or 289A.25. 409.30[EFFECTIVE DATE.] This section is effective the day 409.31 following final enactment. 409.32 Sec. 5. Minnesota Statutes 2000, section 270.78, is 409.33 amended to read: 409.34 270.78 [PENALTY FOR FAILURE TOMAKE PAYMENT BY ELECTRONIC409.35FUNDS TRANSFERPAY ELECTRONICALLY.] 409.36 In addition to other applicable penalties imposed by law, 410.1 after notification from the commissioner of revenue to the 410.2 taxpayer that payments for a tax administered by the 410.3 commissioner are required to be made by electronic meansof410.4electronic funds transfer, and the payments are remitted by some 410.5 other means, there is a penalty in the amount of five percent of 410.6 each payment that should have been remitted 410.7 electronically. After the commissioner's initial notification 410.8 to the taxpayer that payments are required to be made by 410.9 electronic means, the commissioner is not required to notify the 410.10 taxpayer in subsequent periods if the initial notification 410.11 specified the amount of tax liability at which a taxpayer is 410.12 required to remit payments by electronic means. The penalty can 410.13 be abated under the abatement procedures prescribed in section 410.14 270.07, subdivision 6, if the failure to remit the payment 410.15 electronically is due to reasonable cause. The penalty bears 410.16 interest at the rate specified in section 270.75 from the due 410.17 date of the payment of the tax to the date of payment of the 410.18 penalty. 410.19[EFFECTIVE DATE.] This section is effective the day 410.20 following final enactment. 410.21 Sec. 6. Minnesota Statutes 2000, section 287.12, is 410.22 amended to read: 410.23 287.12 [TAXES, HOW APPORTIONED.] 410.24 (a) All taxes paid to the county treasurer under the 410.25 provisions of sections 287.01 to 287.12 must be apportioned, 97 410.26 percent to the general fund of the state, and three percent to 410.27 the county revenue fund. 410.28 (b) On or before the 20th day of each month the county 410.29 treasurer shall determine and pay to the commissioner of revenue 410.30 for deposit in the state treasury and credit to the general fund 410.31 the state's portion of the receipts from the mortgage registry 410.32 tax during the preceding month subject to the electronicfunds410.33transferpayment requirements of section 270.771. The county 410.34 treasurer shall provide any related reports requested by the 410.35 commissioner of revenue. 410.36[EFFECTIVE DATE.] This section is effective the day 411.1 following final enactment. 411.2 Sec. 7. Minnesota Statutes 2000, section 289A.02, is 411.3 amended by adding a subdivision to read: 411.4 Subd. 8. [ELECTRONIC MEANS.] "Electronic means" refers to 411.5 a method that is electronic, as defined in section 325L.02, 411.6 paragraph (e), and that is prescribed by the commissioner. 411.7[EFFECTIVE DATE.] This section is effective the day 411.8 following final enactment. 411.9 Sec. 8. Minnesota Statutes 2000, section 289A.18, 411.10 subdivision 4, is amended to read: 411.11 Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use 411.12 tax returns must be filed on or before the 20th day of the month 411.13 following the close of the preceding reporting period, except 411.14 that annual use tax returns provided for under section 289A.11, 411.15 subdivision 1, must be filed by April 15 following the close of 411.16 the calendar year, in the case of individuals. Annual use tax 411.17 returns of businesses, including sole proprietorships, and 411.18 annual sales tax returns must be filed by February 5 following 411.19 the close of the calendar year. 411.20 (b)Except for the return for the June reporting period,411.21which is due on the following August 25,Returns for the June 411.22 reporting period filed by retailers required to remit 411.23liabilities by means of funds transfertheir June liability 411.24 under section 289A.20, subdivision 4, paragraph(d)(b), are due 411.25 on or beforethe 25th day of the month following the close of411.26the preceding reporting periodAugust 20. 411.27 (c) If a retailer has an average sales and use tax 411.28 liability, including local sales and use taxes administered by 411.29 the commissioner, equal to or less than $500 per month in any 411.30 quarter of a calendar year, and has substantially complied with 411.31 the tax laws during the preceding four calendar quarters, the 411.32 retailer may request authorization to file and pay the taxes 411.33 quarterly in subsequent calendar quarters. The authorization 411.34 remains in effect during the period in which the retailer's 411.35 quarterly returns reflect sales and use tax liabilities of less 411.36 than $1,500 and there is continued compliance with state tax 412.1 laws. 412.2 (d) If a retailer has an average sales and use tax 412.3 liability, including local sales and use taxes administered by 412.4 the commissioner, equal to or less than $100 per month during a 412.5 calendar year, and has substantially complied with the tax laws 412.6 during that period, the retailer may request authorization to 412.7 file and pay the taxes annually in subsequent years. The 412.8 authorization remains in effect during the period in which the 412.9 retailer's annual returns reflect sales and use tax liabilities 412.10 of less than $1,200 and there is continued compliance with state 412.11 tax laws. 412.12 (e) The commissioner may also grant quarterly or annual 412.13 filing and payment authorizations to retailers if the 412.14 commissioner concludes that the retailers' future tax 412.15 liabilities will be less than the monthly totals identified in 412.16 paragraphs (c) and (d). An authorization granted under this 412.17 paragraph is subject to the same conditions as an authorization 412.18 granted under paragraphs (c) and (d). 412.19 (f) A taxpayer who is a materials supplier may report gross 412.20 receipts either on: 412.21 (1) the cash basis as the consideration is received; or 412.22 (2) the accrual basis as sales are made. 412.23 As used in this paragraph, "materials supplier" means a person 412.24 who provides materials for the improvement of real property; who 412.25 is primarily engaged in the sale of lumber and building 412.26 materials-related products to owners, contractors, 412.27 subcontractors, repairers, or consumers; who is authorized to 412.28 file a mechanics lien upon real property and improvements under 412.29 chapter 514; and who files with the commissioner an election to 412.30 file sales and use tax returns on the basis of this paragraph. 412.31[EFFECTIVE DATE.] This section is effective for returns due 412.32 on or after July 1, 2001. 412.33 Sec. 9. Minnesota Statutes 2000, section 289A.20, 412.34 subdivision 1, is amended to read: 412.35 Subdivision 1. [INDIVIDUAL INCOME, FIDUCIARY INCOME, 412.36 MINING COMPANY, CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] 413.1 (a) Individual income, fiduciary, mining company, and corporate 413.2 franchise taxes must be paid to the commissioner on or before 413.3 the date the return must be filed under section 289A.18, 413.4 subdivision 1, or the extended due date as provided in section 413.5 289A.19, unless an earlier date for payment is provided. 413.6 Notwithstanding any other law, a taxpayer whose unpaid 413.7 liability for income or corporate franchise taxes, as reflected 413.8 upon the return, is $1 or less need not pay the tax. 413.9 (b) Entertainment taxes must be paid on or before the date 413.10 the return must be filed under section 289A.18, subdivision 1. 413.11 (c) If a fiduciary administers 100 or more trusts, 413.12 fiduciary income taxes for all trusts administered by the 413.13 fiduciary must be paid byfunds transfer as defined in section413.14336.4A-104, paragraph (a). The funds transfer payment date, as413.15defined in section 336.4A-401, must be on or before the date the413.16tax payment is due. If the date the payment is due is not a413.17funds transfer business day, as defined in section 336.4A-105,413.18paragraph (a), clause (4), the payment date must be on or before413.19the funds transfer business day next following the date the413.20payment is dueelectronic means. 413.21[EFFECTIVE DATE.] This section is effective the day 413.22 following final enactment. 413.23 Sec. 10. Minnesota Statutes 2000, section 289A.20, 413.24 subdivision 2, is amended to read: 413.25 Subd. 2. [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 413.26 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 413.27 WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 413.28 (a) A tax required to be deducted and withheld during the 413.29 quarterly period must be paid on or before the last day of the 413.30 month following the close of the quarterly period, unless an 413.31 earlier time for payment is provided. A tax required to be 413.32 deducted and withheld from compensation of an entertainer and 413.33 from a payment to an out-of-state contractor must be paid on or 413.34 before the date the return for such tax must be filed under 413.35 section 289A.18, subdivision 2. Taxes required to be deducted 413.36 and withheld by partnerships and S corporations must be paid on 414.1 or before the date the return must be filed under section 414.2 289A.18, subdivision 2. 414.3 (b) An employer who, during the previous quarter, withheld 414.4 more than $1,500 of tax under section 290.92, subdivision 2a or 414.5 3, or 290.923, subdivision 2, must deposit tax withheld under 414.6 those sections with the commissioner within the time allowed to 414.7 deposit the employer's federal withheld employment taxes under 414.8 Treasury Regulation, section 31.6302-1, without regard to the 414.9 safe harbor or de minimis rules in subparagraph (f) or the 414.10 one-day rule in subsection (c), clause (3). Taxpayers must 414.11 submit a copy of their federal notice of deposit status to the 414.12 commissioner upon request by the commissioner. 414.13 (c) The commissioner may prescribe by rule other return 414.14 periods or deposit requirements. In prescribing the reporting 414.15 period, the commissioner may classify payors according to the 414.16 amount of their tax liability and may adopt an appropriate 414.17 reporting period for the class that the commissioner judges to 414.18 be consistent with efficient tax collection. In no event will 414.19 the duration of the reporting period be more than one year. 414.20 (d) If less than the correct amount of tax is paid to the 414.21 commissioner, proper adjustments with respect to both the tax 414.22 and the amount to be deducted must be made, without interest, in 414.23 the manner and at the times the commissioner prescribes. If the 414.24 underpayment cannot be adjusted, the amount of the underpayment 414.25 will be assessed and collected in the manner and at the times 414.26 the commissioner prescribes. 414.27 (e) If the aggregate amount of the tax withheld duringa414.28 the fiscal year ending June 30, 2001, under section 290.92, 414.29 subdivision 2a or 3, is equal to or exceedsthe amounts414.30established for remitting federal withheld taxes pursuant to the414.31regulations promulgated under section 6302(h) of the Internal414.32Revenue Code$25,000, or $10,000 for the fiscal year ending June 414.33 30, 2002, and each fiscal year ending June 30 thereafter, the 414.34 employer must remit each required deposit for wages paid in the 414.35 subsequent calendar year by electronic meansof a funds transfer414.36as defined in section 336.4A-104, paragraph (a). The funds415.1transfer payment date, as defined in section 336.4A-401, must be415.2on or before the date the deposit is due. If the date the415.3deposit is due is not a funds transfer business day, as defined415.4in section 336.4A-105, paragraph (a), clause (4), the payment415.5date must be on or before the funds transfer business day next415.6following the date the deposit is due. 415.7 (f) A third-party bulk filer as defined in section 290.92, 415.8 subdivision 30, paragraph (a), clause (2), who remits 415.9 withholding deposits must remit all deposits by electronic means 415.10of a funds transferas provided in paragraph (e), regardless of 415.11 the aggregate amount of tax withheld during a fiscal year for 415.12 all of the employers. 415.13[EFFECTIVE DATE.] This section is effective for payments 415.14 due on or after July 1, 2001. 415.15 Sec. 11. Minnesota Statutes 2000, section 289A.20, 415.16 subdivision 4, is amended to read: 415.17 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 415.18 chapter 297A are due and payable to the commissioner monthly on 415.19 or before the 20th day of the month following the month in which 415.20 the taxable event occurred, or following another reporting 415.21 period as the commissioner prescribes or as allowed under 415.22 section 289A.18, subdivision 4, paragraph (f), except that use 415.23 taxes due on an annual use tax return as provided under section 415.24 289A.11, subdivision 1, are payable by April 15 following the 415.25 close of the calendar year. 415.26 (b) A vendor having a liability of $120,000 or more during 415.27 a fiscal year ending June 30 must remit the June liability for 415.28 the next year in the following manner: 415.29 (1) Two business days before June 30 of the year, the 415.30 vendor must remit 62 percent of the estimated June liability to 415.31 the commissioner. 415.32 (2) On or before August1420 of the year, the vendor must 415.33 pay any additional amount of tax not remitted in June. 415.34 (c) A vendor having a liability of$120,000$80,000 or more 415.35 duringathe fiscal year ending June 30, 2001, or at least 415.36 $40,000 for the fiscal year ending June 30, 2002, $20,000 for 416.1 the fiscal year ending June 30, 2003, and $10,000 for the fiscal 416.2 year ending June 30, 2004, and each fiscal year ending June 30 416.3 thereafter, must remit all liabilities on returns due for 416.4 periods beginning in the subsequent calendar year by electronic 416.5 meansof a funds transfer as defined in section 336.4A-104,416.6paragraph (a). The funds transfer payment date, as defined in416.7section 336.4A-401, must beon or before the14th20th day of 416.8 the month following the month in which the taxable event 416.9 occurred, or on or before the14th20th day of the month 416.10 following the month in which the sale is reported under section 416.11 289A.18, subdivision 4, except for 62 percent of the estimated 416.12 June liability, which is due two business days before June 30. 416.13 The remaining amount of the June liability is due on August14416.14 20.If the date the tax is due is not a funds transfer business416.15day, as defined in section 336.4A-105, paragraph (a), clause416.16(4), the payment date must be on or before the funds transfer416.17business day next following the date the tax is due.416.18(d) If the vendor required to remit by electronic funds416.19transfer as provided in paragraph (c) is unable due to416.20reasonable cause to determine the actual sales and use tax due416.21on or before the due date for payment, the vendor may remit an416.22estimate of the tax owed using one of the following options:416.23(1) 100 percent of the tax reported on the previous month's416.24sales and use tax return;416.25(2) 100 percent of the tax reported on the sales and use416.26tax return for the same month in the previous calendar year; or416.27(3) 95 percent of the actual tax due.416.28Any additional amount of tax that is not remitted on or416.29before the due date for payment, must be remitted with the416.30return. If a vendor fails to remit the actual liability or does416.31not remit using one of the estimate options by the due date for416.32payment, the vendor must remit actual liability as provided in416.33paragraph (c) in all subsequent periods. This paragraph does416.34not apply to the June sales and use tax liability.416.35[EFFECTIVE DATE.] This section is effective for payments 416.36 due on or after July 1, 2001. 417.1 Sec. 12. Minnesota Statutes 2000, section 289A.26, 417.2 subdivision 2a, is amended to read: 417.3 Subd. 2a. [ELECTRONICFUNDS TRANSFERPAYMENTS.] If the 417.4 aggregate amount of estimated tax payments made during a 417.5 calendar year is equal to or exceeds $20,000, or $10,000 for the 417.6 calendar year 2004, and each calendar year thereafter, all 417.7 estimated tax payments in the subsequent calendar year must be 417.8 paid by electronic meansof a funds transfer as defined in417.9section 336.4A-104, paragraph (a). The funds transfer payment417.10date, as defined in section 336.4A-401, must be on or before the417.11date the estimated tax payment is due. If the date the417.12estimated tax payment is due is not a funds transfer business417.13day, as defined in section 336.4A-105, paragraph (a), clause417.14(4), the payment date must be on or before the funds transfer417.15business day next following the date the estimated tax payment417.16is due. 417.17[EFFECTIVE DATE.] This section is effective for payments 417.18 due on or after July 1, 2001. 417.19 Sec. 13. Minnesota Statutes 2000, section 289A.60, 417.20 subdivision 21, is amended to read: 417.21 Subd. 21. [PENALTY FOR FAILURE TO MAKE PAYMENT BY 417.22 ELECTRONICFUNDS TRANSFERMEANS.] In addition to other 417.23 applicable penalties imposed by this section, after notification 417.24 from the commissioner to the taxpayer that payments are required 417.25 to be made by electronic meansof electronic funds transfer417.26 under section 289A.20, subdivision 2, paragraph (e), or 4, 417.27 paragraph(d)(c), or 289A.26, subdivision 2a, and the payments 417.28 are remitted by some other means, there is a penalty in the 417.29 amount of five percent of each payment that should have been 417.30 remitted electronically. After the commissioner's initial 417.31 notification to the taxpayer that payments are required to be 417.32 made by electronic means, the commissioner is not required to 417.33 notify the taxpayer in subsequent periods if the initial 417.34 notification specified the amount of tax liability at which a 417.35 taxpayer is required to remit payments by electronic means. The 417.36 penalty can be abated under the abatement procedures prescribed 418.1 in section 270.07, subdivision 6, if the failure to remit the 418.2 payment electronically is due to reasonable cause. 418.3[EFFECTIVE DATE.] This section is effective the day 418.4 following final enactment. 418.5 Sec. 14. Minnesota Statutes 2000, section 295.55, 418.6 subdivision 4, is amended to read: 418.7 Subd. 4. [ELECTRONICFUNDS TRANSFERPAYMENTS.] A taxpayer 418.8 with an aggregate tax liability of$120,000$80,000 or more 418.9 duringathe fiscal year ending June 30, 2001, or at least 418.10 $40,000 for the fiscal year ending June 30, 2002, $20,000 for 418.11 the fiscal year ending June 30, 2003, and $10,000 for the fiscal 418.12 year ending June 30, 2004, and each fiscal year ending June 30 418.13 thereafter, must remit all liabilities by electronic meansof a418.14funds transfer as defined in section 336.4A-104, paragraph (a),418.15 in the subsequent calendar year.The funds transfer payment418.16date, as defined in section 336.4A-401, is on or before the date418.17the tax is due. If the date the tax is due is not a418.18funds-transfer business day, as defined in section 336.4A-105,418.19paragraph (a), clause (4), the payment date is on or before the418.20first funds-transfer business day after the date the tax is due.418.21[EFFECTIVE DATE.] This section is effective for payments 418.22 due on or after July 1, 2001. 418.23 Sec. 15. Minnesota Statutes 2000, section 296A.15, 418.24 subdivision 7, is amended to read: 418.25 Subd. 7. [ELECTRONICFUNDS TRANSFERPAYMENT REQUIRED.] All 418.26 remittances must be made by electronic meansof electronic funds418.27transfer as defined in section 336.4A-104, paragraph (a). The418.28funds transfer payment date, as defined in section 336.4A-401,418.29must be on or before the date the remittance is due. If the418.30date the remittance is due is not a funds transfer business day,418.31as defined in section 336.4A-105, paragraph (a), clause (4), the418.32payment date must be on or before the funds transfer business418.33day next following the date the remittance is due. 418.34[EFFECTIVE DATE.] This section is effective the day 418.35 following final enactment. 418.36 Sec. 16. Minnesota Statutes 2000, section 297E.02, 419.1 subdivision 4, is amended to read: 419.2 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 419.3 on the sale of each deal of pull-tabs and tipboards sold by a 419.4 distributor. The rate of the tax is 1.7 percent of the ideal 419.5 gross of the pull-tab or tipboard deal. The sales tax imposed 419.6 by chapter 297A on the sale of the pull-tabs and tipboards by 419.7 the distributor is imposed on the retail sales price less the 419.8 tax imposed by this subdivision. The retail sale of pull-tabs 419.9 or tipboards by the organization is exempt from taxes imposed by 419.10 chapter 297A and is exempt from all local taxes and license fees 419.11 except a fee authorized under section 349.16, subdivision 8. 419.12 (b) The liability for the tax imposed by this section is 419.13 incurred when the pull-tabs and tipboards are delivered by the 419.14 distributor to the customer or to a common or contract carrier 419.15 for delivery to the customer, or when received by the customer's 419.16 authorized representative at the distributor's place of 419.17 business, regardless of the distributor's method of accounting 419.18 or the terms of the sale. 419.19 The tax imposed by this subdivision is imposed on all sales 419.20 of pull-tabs and tipboards, except the following: 419.21 (1) sales to the governing body of an Indian tribal 419.22 organization for use on an Indian reservation; 419.23 (2) sales to distributors licensed under the laws of 419.24 another state or of a province of Canada, as long as all 419.25 statutory and regulatory requirements are met in the other state 419.26 or province; 419.27 (3) sales of promotional tickets as defined in section 419.28 349.12; and 419.29 (4) pull-tabs and tipboards sold to an organization that 419.30 sells pull-tabs and tipboards under the exemption from licensing 419.31 in section 349.166, subdivision 2. A distributor shall require 419.32 an organization conducting exempt gambling to show proof of its 419.33 exempt status before making a tax-exempt sale of pull-tabs or 419.34 tipboards to the organization. A distributor shall identify, on 419.35 all reports submitted to the commissioner, all sales of 419.36 pull-tabs and tipboards that are exempt from tax under this 420.1 subdivision. 420.2 (c) A distributor having a liability of$120,000$80,000 or 420.3 more duringathe fiscal year ending June 30, 2001, or at least 420.4 $40,000 for the fiscal year ending June 30, 2002, $20,000 for 420.5 the fiscal year ending June 30, 2003, and $10,000 for the fiscal 420.6 year ending June 30, 2004, and each fiscal year ending June 30 420.7 thereafter, must remit all liabilities in the subsequent 420.8 calendar year bya funds transfer as defined in section420.9336.4A-104, paragraph (a). The funds transfer payment date, as420.10defined in section 336.4A-401, must be on or before the date the420.11tax is due. If the date the tax is due is not a funds transfer420.12business day, as defined in section 336.4A-105, paragraph (a),420.13clause (4), the payment date must be on or before the funds420.14transfer business day next following the date the tax is420.15dueelectronic means. 420.16 (d) Any customer who purchases deals of pull-tabs or 420.17 tipboards from a distributor may file an annual claim for a 420.18 refund or credit of taxes paid pursuant to this subdivision for 420.19 unsold pull-tab and tipboard tickets. The claim must be filed 420.20 with the commissioner on a form prescribed by the commissioner 420.21 by March 20 of the year following the calendar year for which 420.22 the refund is claimed. The refund must be filed as part of the 420.23 customer's February monthly return. The refund or credit is 420.24 equal to 1.7 percent of the face value of the unsold pull-tab or 420.25 tipboard tickets, provided that the refund or credit will be 420.26 1.75 percent of the face value of the unsold pull-tab or 420.27 tipboard tickets for claims for a refund or credit of taxes 420.28 filed on the February 2001 monthly return. The refund claimed 420.29 will be applied as a credit against tax owing under this chapter 420.30 on the February monthly return. If the refund claimed exceeds 420.31 the tax owing on the February monthly return, that amount will 420.32 be refunded. The amount refunded will bear interest pursuant to 420.33 section 270.76 from 90 days after the claim is filed. 420.34[EFFECTIVE DATE.] This section is effective for payments 420.35 due on or after July 1, 2001. 420.36 Sec. 17. Minnesota Statutes 2000, section 297F.09, 421.1 subdivision 7, is amended to read: 421.2 Subd. 7. [ELECTRONICFUNDS TRANSFERPAYMENT.] A cigarette 421.3 or tobacco products distributor having a liability 421.4 of$120,000$80,000 or more duringathe fiscal year ending June 421.5 30, 2001, or at least $40,000 for the fiscal year ending June 421.6 30, 2002, $20,000 for the fiscal year ending June 30, 2003, and 421.7 $10,000 for the fiscal year ending June 30, 2004, and each 421.8 fiscal year ending June 30 thereafter, must remit all 421.9 liabilities in the subsequent calendar year by electronic means 421.10of a fund transfer as defined in section 336.4A-104, paragraph421.11(a). The funds transfer payment date, as defined in section421.12336.4A-401, must be on or before the date the tax is due. If421.13the date the tax is due is not a funds transfer business day, as421.14defined in section 336.4A-105, paragraph (a), clause (4), the421.15payment date must be on or before the funds transfer day421.16immediately following the date the tax is due. 421.17[EFFECTIVE DATE.] This section is effective for payments 421.18 due on or after July 1, 2001. 421.19 Sec. 18. Minnesota Statutes 2000, section 297G.09, 421.20 subdivision 6, is amended to read: 421.21 Subd. 6. [ELECTRONICFUNDS TRANSFERPAYMENTS.] A licensed 421.22 brewer, importer, or wholesaler having an excise tax liability 421.23 of$120,000$80,000 or more duringathe fiscal year ending June 421.24 30, 2001, or at least $40,000 for the fiscal year ending June 421.25 30, 2002, $20,000 for the fiscal year ending June 30, 2003, and 421.26 $10,000 for the fiscal year ending June 30, 2004, and each 421.27 fiscal year ending June 30 thereafter, must remit all excise tax 421.28 liabilities in the subsequent calendar year by electronic means 421.29of a funds transfer as defined in section 336.4A-104, paragraph421.30(a). The funds transfer payment date, as defined in section421.31336.4A-401, must be on or before the date the excise tax is421.32due. If the date the excise tax is due is not a funds transfer421.33business day, as defined in section 336.4A-105, paragraph (a),421.34clause (4), the payment date must be on or before the funds421.35transfer business day next following the date the excise tax is421.36due. 422.1[EFFECTIVE DATE.] This section is effective for payments 422.2 due on or after July 1, 2001. 422.3 Sec. 19. Minnesota Statutes 2000, section 297I.35, 422.4 subdivision 2, is amended to read: 422.5 Subd. 2. [ELECTRONICFUNDS TRANSFERPAYMENTS.] If the 422.6 aggregate amount of tax and surcharges due under this chapter 422.7 duringathe calendar year ending December 31, 2001, is equal to 422.8 or exceeds$120,000$80,000, or $40,000 for the calendar year 422.9 ending December 31, 2002, $20,000 for the calendar year ending 422.10 December 31, 2003, and $10,000 for the calendar year ending 422.11 December 31, 2004, and each calendar year thereafter, or if the 422.12 taxpayer is required to make payment of any other tax to the 422.13 commissioner by electronic meansof electronic funds transfer as422.14defined in section 336.4A-104, paragraph (a), then all tax and 422.15 surcharge payments in the subsequent calendar year must be paid 422.16 by electronic meansof a funds transfer as defined in section422.17336.4A-104, paragraph (a). The funds transfer payment date, as422.18defined in section 336.4A-104, must be on or before the date the422.19payment is due. If the date the payment is due is not a funds422.20transfer business day, as defined in section 336.4A-105,422.21paragraph (a), clause (4), the payment date must be on or before422.22the funds transfer business day next following the date the422.23payment is due. 422.24[EFFECTIVE DATE.] This section is effective for payments 422.25 due on or after January 1, 2002. 422.26 Sec. 20. Minnesota Statutes 2000, section 297I.85, 422.27 subdivision 7, is amended to read: 422.28 Subd. 7. [PENALTY FOR FAILURE TOMAKE PAYMENT BY422.29ELECTRONIC FUNDS TRANSFERPAY ELECTRONICALLY.] In addition to 422.30 other applicable penalties imposed by this section, if the 422.31 commissioner notifies the taxpayer that payments are required to 422.32 be made by electronic meansof electronic funds transfer, and 422.33 the payments are made by some other means, a penalty is 422.34 imposed. The amount of the penalty is equal to five percent of 422.35 each payment that should have been paid electronically. The 422.36 penalty may be abated under the abatement procedures prescribed 423.1 in section 270.07, subdivision 6, if the failure to pay 423.2 electronically is due to reasonable cause. 423.3[EFFECTIVE DATE.] This section is effective the day 423.4 following final enactment. 423.5 Sec. 21. Minnesota Statutes 2000, section 473.843, 423.6 subdivision 3, is amended to read: 423.7 Subd. 3. [PAYMENT OF FEE.] On or before the 20th day of 423.8 each month each operator shall pay the fee due under this 423.9 section for the previous month, using a form provided by the 423.10 commissioner of revenue. 423.11 An operator having a fee of$120,000$80,000 or more during 423.12athe fiscal year ending June 30, 2001, or at least $40,000 for 423.13 the fiscal year ending June 30, 2002, $20,000 for the fiscal 423.14 year ending June 30, 2003, and $10,000 for the fiscal year 423.15 ending June 30, 2004, and each fiscal year ending June 30 423.16 thereafter, must pay all fees in the subsequent calendar year by 423.17 electronic meansof a funds transfer as defined in section423.18336.4A-104, paragraph (a). The funds transfer payment date, as423.19defined in section 336.4A-401, must be on or before the date the423.20fee is due. If the date the fee is due is not a funds transfer423.21business day, as defined in section 336.4A-105, paragraph (a),423.22clause (4), the payment date must be on or before the funds423.23transfer business day next following the date the fee is due. 423.24[EFFECTIVE DATE.] This section is effective for payments 423.25 due on or after July 1, 2001. 423.26 ARTICLE 18 423.27 SALES TAX RECODIFICATION CORRECTIONS 423.28 Section 1. Minnesota Statutes 2000, section 289A.31, 423.29 subdivision 7, is amended to read: 423.30 Subd. 7. [SALES AND USE TAX.] (a) The sales and use tax 423.31 required to be collected by the retailer under chapter 297A 423.32 constitutes a debt owed by the retailer to Minnesota, and the 423.33 sums collected must be held as a special fund in trust for the 423.34 state of Minnesota. 423.35 A retailer who does not maintain a place of business within 423.36 this state as defined by section 297A.21, subdivision 1, shall 424.1 not be indebted to Minnesota for amounts of tax that it was 424.2 required to collect but did not collect unless the retailer knew 424.3 or had been advised by the commissioner of its obligation to 424.4 collect the tax. 424.5 (b) The use tax required to be paid by a purchaser is a 424.6 debt owed by the purchaser to Minnesota. 424.7 (c) The tax imposed by chapter 297A, and interest and 424.8 penalties, is a personal debt of the individual required to file 424.9 a return from the time the liability arises, irrespective of 424.10 when the time for payment of that liability occurs. The debt 424.11 is, in the case of the executor or administrator of the estate 424.12 of a decedent and in the case of a fiduciary, that of the 424.13 individual in an official or fiduciary capacity unless the 424.14 individual has voluntarily distributed the assets held in that 424.15 capacity without reserving sufficient assets to pay the tax, 424.16 interest, and penalties, in which case the individual is 424.17 personally liable for the deficiency. 424.18 (d) Liability for payment of sales and use taxes includes 424.19 any responsible person or entity described in the personal 424.20 liability provisions of section 270.101. 424.21 (e) Any amounts collected, even if erroneously or illegally 424.22 collected, from a purchaser under a representation that they are 424.23 taxes imposed under chapter 297A are state funds from the time 424.24 of collection and must be reported on a return filed with the 424.25 commissioner.The amounts collected are not subject to refund424.26unless the seller submits written evidence to the commissioner424.27that the tax and any interest earned on the tax has been or will424.28be refunded or credited to the purchaser by the seller.424.29 (f) The tax imposed under chapter 297A on sales of tickets 424.30 to the premises of or events sponsored by the state agricultural 424.31 society and conducted on the state fairgrounds during the period 424.32 of the annual state fair may be retained by the state 424.33 agricultural society if the funds are used and matched as 424.34 required under section 37.13, subdivision 2. 424.35 Sec. 2. Minnesota Statutes 2000, section 289A.50, 424.36 subdivision 2, is amended to read: 425.1 Subd. 2. [REFUND OF SALES TAX TO VENDORS; LIMITATION.] If 425.2 a vendor has collected from a purchaser and remitted to the 425.3 state a tax on a transaction that is not subject to the tax 425.4 imposed by chapter 297A, the tax is refundable to the vendor 425.5 only if and to the extent thatitthe tax and any interest 425.6 earned on the tax is credited to amounts due to the vendor by 425.7 the purchaser or returned to the purchaser by the vendor. In 425.8 addition to the requirements of subdivision 1, a claim for 425.9 refund under this subdivision must state in writing that the tax 425.10 and interest earned on the tax has been or will be refunded or 425.11 credited to the purchaser by the vendor. 425.12 Sec. 3. Minnesota Statutes 2000, section 297A.61, 425.13 subdivision 2, is amended to read: 425.14 Subd. 2. [PERSON.] (a) "Person" includes any individual,425.15and anyor grouporand any combination of individuals, 425.16 groups, or individuals and groups acting as a unit, and the425.17plural as well as the singular number. 425.18 (b) Person includes a firm, partnership, joint venture, 425.19 limited liability company, association, cooperative, social 425.20 club, fraternal organization, municipal or private corporation 425.21 whether or not organized for profit,estates, trusts, business425.22trustsestate, trust, business trust, receiver, trustee, 425.23 syndicate, the United States, and a state and its political 425.24 subdivisions. 425.25 (c) Person includes, but is not limited to, directors and 425.26 officers of corporations, governors and managers of a limited 425.27 liability company, or members of partnerships who, either 425.28 individually or jointly with others, have the control, 425.29 supervision, or responsibility of filing returns and making 425.30 payment of the amount of tax imposed by this chapter. 425.31 (d) Personalsoincludes any agent or consignee of any 425.32 individual or organizationenumeratedlisted in this subdivision. 425.33 Sec. 4. Minnesota Statutes 2000, section 297A.61, 425.34 subdivision 3, is amended to read: 425.35 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 425.36 include, but are not limited to, each of the transactions listed 426.1 in this subdivision. 426.2 (b) Sale and purchase include: 426.3 (1) any transfer of title or possession, or both, of 426.4 tangible personal property, whether absolutely or conditionally, 426.5 for a consideration in money or by exchange or barter; and 426.6 (2) the leasing of or the granting of a license to use or 426.7 consume, for a consideration in money or by exchange or barter, 426.8 tangible personal property, other than a manufactured home used 426.9 for residential purposes for a continuous period of 30 days or 426.10 more. 426.11 (c) Sale and purchase include the production, fabrication, 426.12 printing, or processing of tangible personal property for a 426.13 consideration for consumers who furnish either directly or 426.14 indirectly the materials used in the production, fabrication, 426.15 printing, or processing. 426.16 (d) Sale and purchase include the furnishing, preparing, or 426.17 serving for a consideration of food or drinks. Notwithstanding 426.18 section 297A.67, subdivision 2, taxable food or drinks include, 426.19 but are not limited to, the following: 426.20 (1) food or drinks sold by the retailer for immediate 426.21 consumption on the retailer's premises. Food and drinks sold 426.22 within a building or grounds that require an admission charge 426.23 for entrance are presumed to be sold for consumption on the 426.24 premises; 426.25 (2) food or drinks prepared by the retailer for immediate 426.26 consumption either on or off the retailer's premises. For 426.27 purposes of this subdivision, "food or drinks prepared for 426.28 immediate consumption" means any food product upon which an act 426.29 of preparation including, but not limited to, cooking, mixing, 426.30 sandwich making, blending, heating, or pouring has been 426.31 performed by the retailer so the food product may be immediately 426.32 consumed by the purchaser; 426.33 (3) ice cream, ice milk, frozen yogurt products, or frozen 426.34 novelties sold in single or individual servings including, but 426.35 not limited to, cones, sundaes, and snow cones; 426.36 (4) soft drinks and other beverages, including all 427.1 carbonated and noncarbonated beverages or drinks sold in liquid 427.2 form, but not including beverages or drinks which contain milk 427.3 or milk products, beverages or drinks containing 15 or more 427.4 percent fruit juice, and noncarbonated and noneffervescent 427.5 bottled water sold in individual containers of one-half gallon 427.6 or more in size; 427.7 (5) gum, candy, and candy products; 427.8 (6) ice; 427.9 (7) all food sold from vending machines; 427.10 (8) all food for immediate consumption sold from concession 427.11 stands and vehicles; 427.12 (9) party trays; 427.13 (10) all meals and single servings of packaged snack food 427.14 sold in restaurants and bars; and 427.15 (11) bakery products that are: 427.16 (i) prepared by the retailer for consumption on the 427.17 retailer's premises; 427.18 (ii) sold at a place that charges admission; 427.19 (iii) sold from vending machines; or 427.20 (iv) sold in single or individual servings from concession 427.21 stands, vehicles, bars, and restaurants. 427.22 For purposes of this paragraph, "single or individual 427.23 servings" does not include products when sold in bulk containers 427.24 or bulk packaging. 427.25 For purposes of this paragraph, "premises" means the total 427.26 space and facilities, including buildings, grounds, and parking 427.27 lots that are made available or that are available for use by 427.28 the retailer or customer for the purpose of sale or consumption 427.29 of prepared food and drinks. The premises of a caterer is the 427.30 place where the catered food or drinks are served. 427.31 (e) A sale and a purchase includes the furnishing for a 427.32 consideration of electricity, gas, water, or steam for use or 427.33 consumption within this state or local exchange telephone 427.34 service, intrastate toll service, and interstate toll service, 427.35 if that service originates from and is charged to a telephone 427.36 located in this state. Telephone service includes (1) paging 428.1 services, and (2) private communication service, as defined in 428.2 United States Code, title 26, section 4252(d), except for 428.3 private communication service purchased by an agent acting on 428.4 behalf of the state lottery. Telephone service does not include 428.5 services purchased with a prepaid telephone calling card. The 428.6 furnishing for a consideration of access to telephone services 428.7 by a hotel to its guests is a sale. The furnishing for a 428.8 consideration of items listed in this paragraph by a municipal 428.9 corporation is a sale. 428.10 (f) A sale and a purchase includes the transfer for a 428.11 consideration of computer software. 428.12 (g) A sale and a purchase includes the furnishing for a 428.13 consideration oftaxable services as defined in subdivision428.1416.the following services: 428.15 (1) the privilege of admission to places of amusement, 428.16 recreational areas, or athletic events, and the making available 428.17 of amusement devices, tanning facilities, reducing salons, steam 428.18 baths, turkish baths, health clubs, and spas or athletic 428.19 facilities; 428.20 (2) lodging and related services by a hotel, rooming house, 428.21 resort, campground, motel, or trailer camp and the granting of 428.22 any similar license to use real property other than the renting 428.23 or leasing of it for a continuous period of 30 days or more; 428.24 (3) cable television services or similar television 428.25 services, including, but not limited to, charges for basic, 428.26 premium, pay-per-view, and any other similar service; 428.27 (4) parking services, whether on a contractual, hourly, or 428.28 other periodic basis, except for parking at a meter; 428.29 (5) the granting of membership in a club, association, or 428.30 other organization if: 428.31 (i) the club, association, or other organization makes 428.32 available for the use of its members sports and athletic 428.33 facilities, without regard to whether a separate charge is 428.34 assessed for use of the facilities; and 428.35 (ii) use of the sports and athletic facility is not made 428.36 available to the general public on the same basis as it is made 429.1 available to members. 429.2 Granting of membership means both one-time initiation fees and 429.3 periodic membership dues. Sports and athletic facilities 429.4 include golf courses; tennis, racquetball, handball, and squash 429.5 courts; basketball and volleyball facilities; running tracks; 429.6 exercise equipment; swimming pools; and other similar athletic 429.7 or sports facilities; and 429.8 (6) services as provided in this clause: 429.9 (i) laundry and dry cleaning services including cleaning, 429.10 pressing, repairing, altering, and storing clothes, linen 429.11 services and supply, cleaning and blocking hats, and carpet, 429.12 drapery, upholstery, and industrial cleaning. Laundry and dry 429.13 cleaning services do not include services provided by coin 429.14 operated facilities operated by the customer; 429.15 (ii) motor vehicle washing, waxing, and cleaning services, 429.16 including services provided by coin operated facilities operated 429.17 by the customer, and rustproofing, undercoating, and towing of 429.18 motor vehicles; 429.19 (iii) building and residential cleaning, maintenance, and 429.20 disinfecting and exterminating services; 429.21 (iv) detective, security, burglar, fire alarm, and armored 429.22 car services; but not including services performed within the 429.23 jurisdiction they serve by off-duty licensed peace officers as 429.24 defined in section 626.84, subdivision 1, or services provided 429.25 by a nonprofit organization for monitoring and electronic 429.26 surveillance of persons placed on in-home detention pursuant to 429.27 court order or under the direction of the Minnesota department 429.28 of corrections; 429.29 (v) pet grooming services; 429.30 (vi) lawn care, fertilizing, mowing, spraying and sprigging 429.31 services; garden planting and maintenance; tree, bush, and shrub 429.32 pruning, bracing, spraying, and surgery; indoor plant care; 429.33 tree, bush, shrub, and stump removal; and tree trimming for 429.34 public utility lines. Services performed under a construction 429.35 contract for the installation of shrubbery, plants, sod, trees, 429.36 bushes, and similar items are not taxable; 430.1 (vii) massages, except when provided by a licensed health 430.2 care facility or professional or upon written referral from a 430.3 licensed health care facility or professional for treatment of 430.4 illness, injury, or disease; and 430.5 (viii) the furnishing of lodging, board, and care services 430.6 for animals in kennels and other similar arrangements, but 430.7 excluding veterinary and horse boarding services. 430.8 The services listed in this clause (6) are taxable under 430.9 section 297A.62 if the service is performed wholly within 430.10 Minnesota or if the service is performed partly within and 430.11 partly outside Minnesota and the greater proportion of the 430.12 service is performed in Minnesota, based on the cost of 430.13 performance. In applying the provisions of this chapter, the 430.14 terms "tangible personal property" and "sales at retail" include 430.15 taxable services and the provision of taxable services, unless 430.16 specifically provided otherwise. Services performed by an 430.17 employee for an employer are not taxable. Services performed by 430.18 a partnership or association for another partnership or 430.19 association are not taxable if one of the entities owns or 430.20 controls more than 80 percent of the voting power of the equity 430.21 interest in the other entity. Services performed between 430.22 members of an affiliated group of corporations are not taxable. 430.23 For purposes of this section, "affiliated group of corporations" 430.24 includes those entities that would be classified as members of 430.25 an affiliated group under United States Code, title 26, section 430.26 1504, and that are eligible to file a consolidated tax return 430.27 for federal income tax purposes. 430.28 (h) A sale and a purchase includes the furnishing for a 430.29 consideration of tangible personal property or taxable services 430.30 by the United States or any of its agencies or 430.31 instrumentalities, or the state of Minnesota, its agencies, 430.32 instrumentalities, or political subdivisions. 430.33 Sec. 5. Minnesota Statutes 2000, section 297A.61, 430.34 subdivision 4, is amended to read: 430.35 Subd. 4. [RETAIL SALE.] (a) A "retail sale" means a sale 430.36 for any purpose other than resale in the regular course of 431.1 business. 431.2 (b) A sale of property used by the owner only by leasing it 431.3 to others or by holding it in an effort to lease it, and put to 431.4 no use by the owner other than resale after the lease or effort 431.5 to lease, is a sale of property for resale. 431.6 (c) A sale of master computer software that is purchased 431.7 and used to make copies for sale or lease is a sale of property 431.8 for resale. 431.9 (d) A sale of building materials, supplies, and equipment 431.10 to owners, contractors, subcontractors, or builders for the 431.11 erection of buildings or the alteration, repair, or improvement 431.12 of real property is a retail sale in whatever quantity sold, 431.13 whether the sale is for purposes of resale in the form of real 431.14 property or otherwise. 431.15 (e) A sale of carpeting, linoleum, or similar floor 431.16 covering to a person who provides for installation of the floor 431.17 covering is a retail sale and not a sale for resale since a sale 431.18 of floor covering which includes installation is a contract for 431.19 the improvement of real property. 431.20 (f) A sale of shrubbery, plants, sod, trees, and similar 431.21 items to a person who provides for installation of the items is 431.22 a retail sale and not a sale for resale since a sale of 431.23 shrubbery, plants, sod, trees, and similar items that includes 431.24 installation is a contract for the improvement of real property. 431.25 (g) A sale of tangible personal property that is awarded as 431.26 prizes is a retail sale and is not considered a sale of property 431.27 for resale. 431.28 (h) A sale of tangible personal property utilized or 431.29 employed in the furnishing or providing of services under 431.30 subdivision163, paragraph(b)(g), clause (1), including, but 431.31 not limited to, property given as promotional items, is a retail 431.32 sale and is not considered a sale of property for resale. 431.33 (i) A sale of tangible personal property used in conducting 431.34 lawful gambling under chapter 349 or the state lottery under 431.35 chapter 349A, including, but not limited to, property given as 431.36 promotional items, is a retail sale and is not considered a sale 432.1 of property for resale. 432.2 (j) A sale of machines, equipment, or devices that are used 432.3 to furnish, provide, or dispense goods or services, including, 432.4 but not limited to, coin-operated devices, is a retail sale and 432.5 is not considered a sale of property for resale. 432.6 (k) In the case of a lease, a retail sale occurs when an 432.7 obligation to make a lease payment becomes due under the terms 432.8 of the agreement or the trade practices of the lessor. 432.9 (l) In the case of a conditional sales contract, a retail 432.10 sale occurs upon the transfer of title or possession of the 432.11 tangible personal property. 432.12 Sec. 6. Minnesota Statutes 2000, section 297A.61, 432.13 subdivision 6, is amended to read: 432.14 Subd. 6. [USE.] (a) "Use" includes the exercise of a right 432.15 or power incident to the ownership of any interest in tangible 432.16 personal property, ortaxableservices, purchased from a 432.17 retailer, other than the sale of that property in the regular 432.18 course of business. 432.19 (b) Use includes the consumption of printed materials in 432.20 the creation of nontaxable advertising that is distributed, 432.21 either directly or indirectly, within Minnesota. 432.22 Sec. 7. Minnesota Statutes 2000, section 297A.61, 432.23 subdivision 10, is amended to read: 432.24 Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible 432.25 personal property" means corporeal personal property of any 432.26 kind, including property that is to become real property as a 432.27 result of incorporation, attachment, or installation following 432.28 its acquisition. 432.29 (b) Tangible personal property includes, but is not limited 432.30 to: 432.31 (1) computer software, whether contained on tape, discs, 432.32 cards, or other devices; and 432.33 (2) prepaid telephone calling cards. 432.34 (c) Tangible personal property does not include: 432.35 (1) large ponderous machinery and equipment used in a 432.36 business or production activity which at common law would be 433.1 considered to be real property; 433.2 (2) property which is subject to an ad valorem property 433.3 tax; 433.4 (3) property described in section 272.02, subdivision 9, 433.5 clauses (a) to (d); and 433.6 (4) property described in section 272.03, subdivision 2, 433.7 clauses (3) and (5). 433.8 Sec. 8. Minnesota Statutes 2000, section 297A.61, 433.9 subdivision 14, is amended to read: 433.10 Subd. 14. [LEASING; LEASE.] "Leasing" includes all 433.11 transfers of possession or the use of tangible personal property 433.12 by the lessee for a consideration, if title remains with the 433.13 lessor at the end of the lease.For purposes of this chapter,A 433.14 lease of tangible personal property is a series of sales 433.15 transactions that impose upon the lessee multiple payment 433.16 obligations. "Leasing" does not include a transaction defined 433.17 under subdivision 15. 433.18 Sec. 9. Minnesota Statutes 2000, section 297A.61, 433.19 subdivision 17, is amended to read: 433.20 Subd. 17. [COMPUTER SOFTWARE.] "Computer software" means a 433.21 computer program, either in the form of written procedures orin433.22the form of storage media on which, or in which, the program is433.23recordedcontained on tapes, discs, cards, or another device, or 433.24 any required documentation or manuals designed to facilitate the 433.25 use of the computer program. For purposes of this subdivision: 433.26 (1)"Storage media" includes punched cards, tapes, discs,433.27diskettes, or drums on which computer programs may be embodied433.28or stored;433.29(2)"Computer" does not include tape-controlled automatic 433.30 drilling, milling, or other manufacturing machinery or 433.31 equipment; and 433.32(3)(2) "Computer program" means information and directions 433.33 that dictate the function performed by data processing 433.34 equipment. It includes the complete plan for the solution of a 433.35 problem, such as the complete sequence of automatic data 433.36 processing equipment instructions necessary to solve a problem 434.1 and includes both systems and application programs and 434.2 subdivisions, such as assemblers, compilers, routines, 434.3 generators, and utility programs. Computer program includes a 434.4 "canned" or prewritten computer program that is held or existing 434.5 for general or repeated sale or lease, even if the prewritten or 434.6 "canned" program was initially developed on a custom basis or 434.7 for in-house use. 434.8 Sec. 10. Minnesota Statutes 2000, section 297A.61, 434.9 subdivision 19, is amended to read: 434.10 Subd. 19. [COMMONFOR-HIRE CARRIER.] "CommonFor-hire 434.11 carrier" means a person engaged in transportation for hire of 434.12 tangible personal propertyby motor vehicle, if the person:. 434.13(1) has a certificate or permit or has completed a434.14registration process that authorizes for-hire transportation of434.15property from the United States Department of Transportation,434.16the transportation regulation board, or the department of434.17transportation;434.18(2) is transporting commodities defined as "exempt" in434.19for-hire transportation; or434.20(3) transports tangible personal property pursuant to a434.21contract with a person described in clause (1) or (2).434.22 Sec. 11. Minnesota Statutes 2000, section 297A.61, 434.23 subdivision 22, is amended to read: 434.24 Subd. 22. [INTERNAL REVENUE CODE.] Unless specifically 434.25 provided otherwise, "Internal Revenue Code" means the Internal 434.26 Revenue Code of 1986, as amended through December 31,19992000. 434.27 Sec. 12. Minnesota Statutes 2000, section 297A.61, 434.28 subdivision 23, is amended to read: 434.29 Subd. 23. [UNITED STATES CODE.] Unless specifically 434.30 provided otherwise, "United States Code" means the United States 434.31 Code as amended through December 31,19992000. 434.32 Sec. 13. Minnesota Statutes 2000, section 297A.66, 434.33 subdivision 1, is amended to read: 434.34 Subdivision 1. [DEFINITIONS.] (a) "Retailer maintaining a 434.35 place of business in this state," or a similar term, means a 434.36 retailer: 435.1 (1) having or maintaining within this state, directly or by 435.2 a subsidiary, an office, place of distribution, sales or sample 435.3 room or place, warehouse, or other place of business; or 435.4 (2) having a representative, agent, salesperson, canvasser, 435.5 or solicitor operating in this state under the authority of the 435.6 retailer or its subsidiary, for any purpose, including the 435.7 repairing, selling, delivering, installing, or soliciting of 435.8 orders for the retailer's goods or services, or the leasing of 435.9 tangible personal property located in this state, whether the 435.10 place of business or agent, representative, salesperson, 435.11 canvasser, or solicitor is located in the state permanently or 435.12 temporarily, or whether or not the retailer or subsidiary is 435.13 authorized to do business in this state. 435.14 (b) "Destination of a sale" means the location to which the 435.15 retailer makes delivery of the property sold, or causes the 435.16 property to be delivered, to the purchaser of the property, or 435.17 to the agent or designee of the purchaser. The delivery may be 435.18 made by any means, including the United States Postal Service, a435.19common carrier,or acontractfor-hire carrier. 435.20 Sec. 14. Minnesota Statutes 2000, section 297A.66, 435.21 subdivision 3, is amended to read: 435.22 Subd. 3. [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN 435.23 THIS STATE.] (a) To the extent allowed by the United States 435.24 Constitution and the laws of the United States, a retailer 435.25 making retail sales from outside this state to a destination 435.26 within this state and not maintaining a place of business in 435.27 this state shall collect sales and use taxes and remit them to 435.28 the commissioner under section 297A.77, if the retailer engages 435.29 in the regular or systematic soliciting of sales from potential 435.30 customers in this state by: 435.31 (1) distribution, by mail or otherwise, of catalogs, 435.32 periodicals, advertising flyers, or other written solicitations 435.33 of business to customers in this state; 435.34 (2) display of advertisements on billboards or other 435.35 outdoor advertising in this state; 435.36 (3) advertisements in newspapers published in this state; 436.1 (4) advertisements in trade journals or other periodicals 436.2 the circulation of which is primarily within this state; 436.3 (5) advertisements in a Minnesota edition of a national or 436.4 regional publication or a limited regional edition in which this 436.5 state is included as part of a broader regional or national 436.6 publication which are not placed in other geographically defined 436.7 editions of the same issue of the same publication; 436.8 (6) advertisements in regional or national publications in 436.9 an edition which is not by its contents geographically targeted 436.10 to Minnesota but which is sold over the counter in Minnesota or 436.11 by subscription to Minnesota residents; 436.12 (7) advertisements broadcast on a radio or television 436.13 station located in Minnesota; or 436.14 (8) any other solicitation by telegraphy, telephone, 436.15 computer database, cable, optic, microwave, or other 436.16 communication system. 436.17 This paragraph (a) must be construed without regard to the 436.18 state from which distribution of the materials originated or in 436.19 which they were prepared. 436.20 (b) The location within or without this state of 436.21 independent vendorsindependent of the retailerthat provide 436.22 products or services to the retailer in connection with its 436.23 solicitation of customers within this state, including such 436.24 products and services as creation of copy, printing, 436.25 distribution, and recording, is not considered in determining 436.26 whether the retailer is required to collect tax. 436.27 (c) A retailer not maintaining a place of business in this 436.28 state is presumed, subject to rebuttal, to be engaged in regular 436.29 solicitation within this state if it engages in any of the 436.30 activities in paragraph (a) and: 436.31 (1) makes 100 or more retail sales from outside this state 436.32 to destinations in this state during a period of 12 consecutive 436.33 months; or 436.34 (2) makes ten or more retail sales totaling more than 436.35 $100,000 from outside this state to destinations in this state 436.36 during a period of 12 consecutive months. 437.1 Sec. 15. Minnesota Statutes 2000, section 297A.67, 437.2 subdivision 8, is amended to read: 437.3 Subd. 8. [CLOTHING.] Clothing and wearing apparel, 437.4 including sewing materials to be directly incorporated into 437.5 wearing apparel, are exempt. For purposes of this subdivision, 437.6 clothing and wearing apparel do not include the following: 437.7 (1) articles designed primarily for use while engaging in a 437.8 specific sport or recreational activity that are not also worn 437.9 for general use; 437.10 (2) articles designed primarily to provide safety or 437.11 protection against injury while the user is engaged in 437.12 industrial or general job activities; 437.13 (3) all articles commonly or commercially known as jewelry 437.14 including, but not limited to, watches; 437.15 (4) nonprescription optical glasses of any sort; 437.16 (5) articles made entirely of fur on the hide or pelt, or 437.17 partially of such fur if the value of the fur is more than three 437.18 times the value of the next most valuable component material; 437.19 (6) perfume, lotions, creams, dyes, or other substances 437.20 that are applied to the skin, nails, orthehair; and 437.21 (7) luggage, bags, purses, wallets, or cases of any sort. 437.22 Sec. 16. Minnesota Statutes 2000, section 297A.67, 437.23 subdivision 23, is amended to read: 437.24 Subd. 23. [OCCASIONAL SALES.] Isolated and occasional 437.25 sales in Minnesota not made in the normal course of business,437.26andof selling that kind of property or service are exempt. The 437.27 storage, use, or consumption of property or servicesresulting437.28from such sales, areacquired as a result of such a sale is 437.29 exempt. This exemption does not apply to sales of tangible 437.30 personal property primarily used in a trade or business. 437.31 Sec. 17. Minnesota Statutes 2000, section 297A.67, 437.32 subdivision 24, is amended to read: 437.33 Subd. 24. [CONSTITUTIONAL PROHIBITIONS.]The gross437.34receipts fromThe sale of and the storage, use, orother437.35 consumption in Minnesota of tangible personal property,tickets,437.36or admissions, electricity, gas, or local exchange telephone438.1serviceor services, that the state of Minnesota is prohibited 438.2 from taxing under the Constitution or laws of the United States 438.3 or under the Constitution of Minnesota, are exempt. 438.4 Sec. 18. Minnesota Statutes 2000, section 297A.67, 438.5 subdivision 25, is amended to read: 438.6 Subd. 25. [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and 438.7 related services used in the maintenance of cemetery grounds are 438.8 exempt. For purposes of this subdivision, "lawn care and 438.9 related services" means the services listed in section 297A.61, 438.10 subdivision163, paragraph (g), clause (6), item (vi), and 438.11 "cemetery" means a cemetery for human burial. 438.12 Sec. 19. Minnesota Statutes 2000, section 297A.68, 438.13 subdivision 2, is amended to read: 438.14 Subd. 2. [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.] 438.15 (a) Materials stored, used, or consumed in industrial production 438.16 of personal property intended to be sold ultimately at retail 438.17 are exempt, whether or not the item so used becomes an 438.18 ingredient or constituent part of the property produced. 438.19 Materials that qualify for this exemption include, but are not 438.20 limited to, the following: 438.21 (1) chemicals, including chemicals used for cleaning food 438.22 processing machinery and equipment; 438.23 (2) materials, including chemicals, fuels, and electricity 438.24 purchased by persons engaged in industrial production to treat 438.25 waste generated as a result of the production process; 438.26 (3) fuels, electricity, gas, and steam used or consumed in 438.27 the production process, except that electricity, gas, or steam 438.28 used for space heating, cooling, or lighting is exemptonlyif 438.29 (i) it is in excess of the average climate control or lighting 438.30 for the production area, and (ii) it is necessary to produce 438.31 that particularindustrialproduct; 438.32 (4) petroleum products and lubricants; 438.33 (5) packaging materials, including returnable containers 438.34 used in packaging food and beverage products; 438.35 (6) accessory tools, equipment, and other items that are 438.36 separate detachable units with an ordinary useful life of less 439.1 than 12 months used in producing a direct effect upon the 439.2 product; and 439.3 (7) the following materials, tools, and equipment used in 439.4 metalcasting: crucibles, thermocouple protection sheaths and 439.5 tubes, stalk tubes, refractory materials, molten metal filters 439.6 and filter boxes, degassing lances, and base blocks. 439.7 (b) This exemption does not include: 439.8 (1) machinery, equipment, implements, tools, accessories, 439.9 appliances, contrivances and furniture and fixtures, except 439.10 those listed in paragraph (a), clause (6); and 439.11 (2) petroleum and special fuels used in producing or 439.12 generating power for propelling ready-mixed concrete trucks on 439.13 the public highways of this state. 439.14 (c) Industrial production includes, but is not limited to, 439.15 research, development, design or production of any tangible 439.16 personal property, manufacturing, processing (other than by 439.17 restaurants and consumers) of agricultural products (whether 439.18 vegetable or animal), commercial fishing, refining, smelting, 439.19 reducing, brewing, distilling, printing, mining, quarrying, 439.20 lumbering, generating electricity and the production of road 439.21 building materials. Industrial production does not include 439.22 painting, cleaning, repairing or similar processing of property 439.23 except as part of the original manufacturing process. 439.24 Sec. 20. Minnesota Statutes 2000, section 297A.68, 439.25 subdivision 3, is amended to read: 439.26 Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 439.27 SERVICES.] (a) Materials stored, used, or consumed in providing 439.28 a taxable service listed in section 297A.61, subdivision163, 439.29 paragraph (g), clause (6), intended to be sold ultimately at 439.30 retail are exempt. 439.31 (b) This exemption includes, but is not limited to: 439.32 (1) chemicals, lubricants, packaging materials, seeds, 439.33 trees, fertilizers, and herbicides, if these items are used or 439.34 consumed in providing the taxable service; 439.35 (2) chemicals used to treat waste generated as a result of 439.36 providing the taxable service; 440.1 (3) accessory tools, equipment, and other items that are 440.2 separate detachable units used in providing the service and that 440.3 have an ordinary useful life of less than 12 months; and 440.4 (4) fuel, electricity, gas, and steam used or consumed in 440.5 the production process, except that electricity, gas, or steam 440.6 used for space heating, cooling, or lighting is exemptonlyif 440.7 (i) it is in excess of average climate control or lighting, and 440.8 (ii) it is necessary to produce that particulartaxableservice. 440.9 (c) This exemption does not include machinery, equipment, 440.10 implements, tools, accessories, appliances, contrivances, 440.11 furniture, and fixtures used in providing the taxable service. 440.12 Sec. 21. Minnesota Statutes 2000, section 297A.68, 440.13 subdivision 5, is amended to read: 440.14 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 440.15 exempt. The tax must be imposed and collected as if the rate 440.16 under section 297A.62, subdivision 1, applied, and then refunded 440.17 in the manner provided in section 297A.75. 440.18 "Capital equipment" means machinery and equipment purchased 440.19 or leased, and used in this state by the purchaser or lessee 440.20 primarily for manufacturing, fabricating, mining, or refining 440.21 tangible personal property to be sold ultimately at retail.440.22Capital equipment meansif the machinery and equipment is 440.23 essential to the integrated production process of manufacturing, 440.24 fabricating, mining, or refining. Capital equipment also 440.25 includes machinery and equipment used to electronically transmit 440.26 results retrieved by a customer of an online computerized data 440.27 retrieval system. 440.28 (b) Capital equipment includes, but is not limited to: 440.29 (1) machinery and equipment used to operate, control, or 440.30 regulate the production equipment; 440.31 (2) machinery and equipment used for research and 440.32 development, design, quality control, and testing activities; 440.33 (3) environmental control devices that are used to maintain 440.34 conditions such as temperature, humidity, light, or air pressure 440.35 when those conditions are essential to and are part of the 440.36 production process; 441.1 (4) materials and supplies used to construct and install 441.2 machinery or equipment; 441.3 (5) repair and replacement parts, including accessories, 441.4 whether purchased as spare parts, repair parts, or as upgrades 441.5 or modifications to machinery or equipment; 441.6 (6) materials used for foundations that support machinery 441.7 or equipment; 441.8 (7) materials used to construct and install special purpose 441.9 buildings used in the production process; and 441.10 (8) ready-mixed concrete trucks in which the ready-mixed 441.11 concrete is mixed as part of the delivery process. 441.12 (c) Capital equipment does not include the following: 441.13 (1) motor vehicles taxed under chapter 297B; 441.14 (2) machinery or equipment used to receive or store raw 441.15 materials; 441.16 (3) building materials, except for materials included in 441.17 paragraph (b), clauses (6) and (7); 441.18 (4) machinery or equipment used for nonproduction purposes, 441.19 including, but not limited to, the following: plant security, 441.20 fire prevention, first aid, and hospital stations; support 441.21 operations or administration; pollution control; and plant 441.22 cleaning, disposal of scrap and waste, plant communications, 441.23 space heating, cooling, lighting, or safety; 441.24 (5) farm machinery and aquaculture production equipment as 441.25 defined by section 297A.61, subdivisions 12 and 13; 441.26 (6) machinery or equipment purchased and installed by a 441.27 contractor as part of an improvement to real property; or 441.28 (7) any other item that is not essential to the integrated 441.29 process of manufacturing, fabricating, mining, or refining. 441.30 (d) For purposes of this subdivision: 441.31 (1) "Machinery" means mechanical, electronic, or electrical 441.32 devices, including computers and computer software, that are 441.33 purchased or constructed to be used for the activities set forth 441.34 in paragraph (a), beginning with the removal of raw materials 441.35 from inventory through completion of the product, including 441.36 packaging of the product. 442.1 (2) "Equipment" means independent devices or tools separate 442.2 from machinery but essential to an integrated production 442.3 process, including computers and computer software, used in 442.4 operating, controlling, or regulating machinery and equipment; 442.5 and any subunit or assembly comprising a component of any 442.6 machinery or accessory or attachment parts of machinery, such as 442.7 tools, dies, jigs, patterns, and molds. 442.8 (3) "Primarily" means machinery and equipment used 50 442.9 percent or more of the time in an activity described in 442.10 paragraph (a). 442.11 (4) "Manufacturing" means an operation or series of 442.12 operations where raw materials are changed in form, composition, 442.13 or condition by machinery and equipment and which results in the 442.14 production of a new article of tangible personal property. For 442.15 purposes of this subdivision, "manufacturing" includes the 442.16 generation of electricity or steam to be sold at retail. 442.17 (5) "Fabricating" means to make, build, create, produce, or 442.18 assemble components or property to work in a new or different 442.19 manner. 442.20 (6) "Mining" means the extraction of minerals, ores, stone, 442.21 or peat. 442.22 (7) "Refining" means the process of converting a natural 442.23 resource to a product, including the treatment of water to be 442.24 sold at retail. 442.25 (8)"Integrated production process" means a process442.26beginning with the removal of raw materials from inventory442.27through the completion of the product, including packaging of442.28the product.442.29(9)"Online data retrieval system" means a system whose 442.30 cumulation of information is equally available and accessible to 442.31 all its customers. 442.32(10)(9) "Machinery and equipment used for pollution 442.33 control" means machinery and equipment used solely to eliminate, 442.34 prevent, or reduce pollution resulting from an activity 442.35 described in paragraph (a). 442.36 Sec. 22. Minnesota Statutes 2000, section 297A.68, 443.1 subdivision 11, is amended to read: 443.2 Subd. 11. [ADVERTISING MATERIALS.]MaterialMaterials 443.3 designed to advertise and promote the sale of merchandise or 443.4 servicesisare exempt ifthe material is purchased and stored443.5for the purpose of subsequently shipping or otherwise443.6transferring outside the state by the purchaser for laterthese 443.7 materials are mailed or transferred to a person outside the 443.8 state for use solely outside the stateof Minnesota. Mailing 443.9 and reply envelopes and cards used exclusively in connection 443.10 with these advertising and promotional materials are included in 443.11 this exemption. The exemption applies regardless of where the 443.12 mailing occurs. The storage of these materials in the state for 443.13 the purpose of subsequently shipping or otherwise transferring 443.14 the material out of state is also exempt if the other conditions 443.15 in this subdivision are met. 443.16 Sec. 23. Minnesota Statutes 2000, section 297A.68, 443.17 subdivision 13, is amended to read: 443.18 Subd. 13. [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible 443.19 personal property is exempt ifthe property, without443.20intermediate use, isall of the following conditions are met: 443.21 (1) the property, without intermediate use, is shipped or 443.22 transported outside Minnesota by the purchaser or is stored, 443.23 processed, fabricated or manufactured into, attached to or 443.24 incorporated into other tangible personal property that is 443.25 transported or shipped outside Minnesota; and 443.26 (2) the property is used in a trade or business outside 443.27 Minnesota after being shipped or transported outside of 443.28 Minnesota, and is not returned to Minnesota, except in the 443.29 course of interstate commerce; and 443.30 (3) the property is either (i) not subject to tax in the 443.31 state or country to which it is transported for storage or use, 443.32 or (ii) to be used in other states or countries as part of a 443.33 maintenance contract. 443.34 (b) For purposes of this subdivision, storage or 443.35 processing, fabricating, manufacturing, attaching to, or 443.36 incorporating into other property is not intermediate use. 444.1 Sec. 24. Minnesota Statutes 2000, section 297A.68, 444.2 subdivision 14, is amended to read: 444.3 Subd. 14. [TEMPORARY STORAGEPROPERTY IN TRANSIT.] 444.4 Tangible personal property is exempt if all of the following 444.5 conditions are met: 444.6 (1) it is shipped or brought into Minnesota by acommon444.7 for-hire carrier; 444.8 (2) withoutintermediateuse, it is kept in a public 444.9 warehouse; 444.10 (3) it is kept for the purpose of being later transported 444.11 outside Minnesota; and 444.12 (4) after storage, it is used solely outside Minnesota, 444.13 except in the course of interstate commerce. 444.14 Sec. 25. Minnesota Statutes 2000, section 297A.68, 444.15 subdivision 18, is amended to read: 444.16 Subd. 18. [CUSTOM COMPUTER SOFTWARE.] The design, 444.17 development, writing, translation, fabrication, lease, or 444.18 transfer for a consideration of title or possession of a custom 444.19 computer program is exempt. "Custom computer program" means a 444.20 computer program prepared to the special order of the customer, 444.21 either in the form of written procedures orin the form of444.22storage media on which, or in which, the program is444.23recordedcontained on tapes, discs, cards, or another device, or 444.24 any required documentation or manuals designed to facilitate the 444.25 use of the custom computer program transferred. It includes 444.26 those services represented by separately stated charges for 444.27 modifications to an existing prewritten program that are 444.28 prepared to the special order of the customer. It does not 444.29 include a "canned" or prewritten computer program that is held 444.30 or existing for general or repeated sale or lease, even if the 444.31 prewritten or "canned" program was initially developed on a 444.32 custom basis or for in-house use. Modification to an existing 444.33 prewritten program to meet the customer's needs is custom 444.34 computer programming only to the extent of the modification. 444.35 Sec. 26. Minnesota Statutes 2000, section 297A.68, 444.36 subdivision 25, is amended to read: 445.1 Subd. 25. [OCCASIONAL SALESSALE OF PROPERTY USED IN A 445.2 TRADE OR BUSINESS.] (a)Isolated or occasional sales ofThe sale 445.3 of tangible personal propertyin Minnesotaprimarily used in a 445.4 trade or business is exempt if the sale is not made in the 445.5 normal course of business of selling that kind of propertyare445.6exempt. The storage, use, or consumption of property acquired445.7as a result of such a sale is exempt.445.8(b) This exemption applies to a sale of tangible personal445.9property primarily used in a trade or business onlyand if one 445.10 of the following conditions is satisfied: 445.11 (1) the sale occurs in a transaction subject to or 445.12 described in section 118, 331, 332, 336, 337, 338, 351, 355, 445.13 368, 721, 731, 1031, or 1033 of the Internal Revenue Code; 445.14 (2) the sale is between members of a controlled group as 445.15 defined in section 1563(a) of the Internal Revenue Code; 445.16 (3) the sale is a sale of farm machinery; 445.17 (4) the sale is a farm auction sale; 445.18 (5) the sale is a sale of substantially all of the assets 445.19 of a trade or business; or 445.20 (6) the total amount of gross receipts from the sale of 445.21 trade or business property made during the calendar month of the 445.22 sale and the preceding 11 calendar months does not exceed $1,000. 445.23 The use, storage, distribution, or consumption of tangible 445.24 personal property acquired as a result of a sale exempt under 445.25 this subdivision is also exempt. 445.26(c)(b) For purposes of this subdivision, the following 445.27 terms have the meanings given. 445.28 (1) A "farm auction" is a public auction conducted by a 445.29 licensed auctioneer if substantially all of the property sold 445.30 consists of property used in the trade or business of farming 445.31 and property not used primarily in a trade or business. 445.32 (2) "Trade or business" includes the assets of a separate 445.33 division, branch, or identifiable segment of a trade or business 445.34 if, before the sale, the income and expenses attributable to the 445.35 separate division, branch, or identifiable segment could be 445.36 separately ascertained from the books of account or record (the 446.1 lease or rental of an identifiable segment does not qualify for 446.2 the exemption). 446.3 (3) A "sale of substantially all of the assets of a trade 446.4 or business" must occur as a single transaction or a series of 446.5 related transactions within the 12-month period beginning on the 446.6 date of the first sale of assets intended to qualify for the 446.7 exemption provided in paragraph(b)(a), clause (5). 446.8 Sec. 27. Minnesota Statutes 2000, section 297A.69, 446.9 subdivision 2, is amended to read: 446.10 Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 446.11 (a) Materials stored, used, or consumed in agricultural 446.12 production of personal property intended to be sold ultimately 446.13 at retail are exempt, whether or not the item becomes an 446.14 ingredient or constituent part of the property produced. 446.15 Materials that qualify for this exemption include, but are not 446.16 limited to, the following: 446.17 (1) feeds, seeds, trees, fertilizers, and herbicides, 446.18 including when purchased for use by farmers in a federal or 446.19 state farm or conservation program; 446.20 (2) materials sold to a veterinarian to be used or consumed 446.21 in the care, medication, and treatment of agricultural 446.22 production animals and horses; 446.23 (3) chemicals, including chemicals used for cleaning food 446.24 processing machinery and equipment; 446.25 (4) materials, including chemicals, fuels, and electricity 446.26 purchased by persons engaged in agricultural production to treat 446.27 waste generated as a result of the production process; 446.28 (5) fuels, electricity, gas, and steam used or consumed in 446.29 the production process, except that electricity, gas, or steam 446.30 used for space heating, cooling, or lighting is exemptonlyif 446.31 (i) it is in excess of the average climate control or lighting 446.32 for the production area, and (ii) it is necessary to produce 446.33 that particularagriculturalproduct; 446.34 (6) petroleum products and lubricants; 446.35 (7) packaging materials, including returnable containers 446.36 used in packaging food and beverage products; and 447.1 (8) accessory tools and equipment that are separate 447.2 detachable units with an ordinary useful life of less than 12 447.3 months used in producing a direct effect upon the product. 447.4 Machinery, equipment, implements, tools, accessories, 447.5 appliances, contrivances, and furniture and fixtures, except 447.6 those listed in this clause are not included within this 447.7 exemption. 447.8 (b) For purposes of this subdivision, "agricultural 447.9 production" includes, but is not limited to, horticulture, 447.10 floriculture, maple syrup harvesting, and the raising of pets, 447.11 fur-bearing animals, research animals, horses, farmed cervidae 447.12 as defined in section 17.451, subdivision 2, llamas as defined 447.13 in section 17.455, subdivision 2, and ratitae as defined in 447.14 section 17.453, subdivision 3. 447.15 Sec. 28. Minnesota Statutes 2000, section 297A.70, 447.16 subdivision 1, is amended to read: 447.17 Subdivision 1. [SCOPE.] (a) To the extent provided in this 447.18 section, the gross receipts from sales of items to or by, and 447.19 storage, distribution, use, or consumption of items by the 447.20 organizations listed in this section are specifically exempted 447.21 from the taxes imposed by this chapter. 447.22 (b) Notwithstanding any law to the contrary enacted before 447.23 1992, only sales to governments and political subdivisions 447.24 listed in this section are exempt from the taxes imposed by this 447.25 chapter. 447.26 (c) "Sales" includes purchases under an installment 447.27 contract or lease purchase agreement under section 465.71. 447.28 Sec. 29. Minnesota Statutes 2000, section 297A.70, 447.29 subdivision 2, is amended to read: 447.30 Subd. 2. [SALES TO GOVERNMENT.] (a) All sales, except 447.31 those listed in paragraph (b), to the following governments and 447.32 political subdivisions, or to the listed agencies or 447.33 instrumentalities of governments and political subdivisions, are 447.34 exempt: 447.35 (1) the United States and its agencies and 447.36 instrumentalities; 448.1 (2) school districts, the University of Minnesota, state 448.2 universities, community colleges, technical colleges, state 448.3 academies, the Perpich Minnesota center for arts education, and 448.4 an instrumentality of a political subdivision that is accredited 448.5 as an optional/special function school by the North Central 448.6 Association of Colleges and Schools; 448.7 (3) hospitals and nursing homes owned and operated by 448.8 political subdivisions of the state; 448.9 (4) other states or political subdivisions of other states, 448.10 if the sale would be exempt from taxation if it occurred in that 448.11 state; and 448.12 (5) sales to public libraries, public library systems, 448.13 multicounty, multitype library systems as defined in section 448.14 134.001, county law libraries under chapter 134A, state agency 448.15 libraries, the state library under section 480.09, and the 448.16 legislative reference library. 448.17 (b) This exemption does not apply to the sales of the 448.18 following products and services: 448.19 (1) building, construction, or reconstruction materials 448.20 purchased by a contractor or a subcontractor as a part of a 448.21 lump-sum contract or similar type of contract with a guaranteed 448.22 maximum price covering both labor and materials for use in the 448.23 construction, alteration, or repair of a building or facility; 448.24 (2) construction materials purchased by tax exempt entities 448.25 or their contractors to be used in constructing buildings or 448.26 facilities which will not be used principally by the tax exempt 448.27 entities; 448.28 (3) the leasing of a motor vehicle as defined in section 448.29 297B.01, subdivision 5, except for leases entered into by the 448.30 United States or its agencies or instrumentalities; or 448.31 (4) meals and lodging as defined under section 297A.61, 448.32subdivisionssubdivision 3,paragraphparagraphs (d),and16448.33 (g),paragraph (c)clause (2), except for meals and lodging 448.34 purchased directly by the United States or its agencies or 448.35 instrumentalities. 448.36 (c) As used in this subdivision, "school districts" means 449.1 public school entities and districts of every kind and nature 449.2 organized under the laws of the state of Minnesota, and any 449.3 instrumentality of a school district, as defined in section 449.4 471.59. 449.5 Sec. 30. Minnesota Statutes 2000, section 297A.70, 449.6 subdivision 4, is amended to read: 449.7 Subd. 4. [SALES TO NONPROFIT GROUPS.] (a) All sales, 449.8 except those listed in paragraph (b), to the following 449.9 "nonprofit organizations" are exempt: 449.10 (1)an entitya corporation, society, association, 449.11 foundation, or institution organized and operated exclusively 449.12 for charitable, religious, or educational purposes if the item 449.13 purchased is used in the performance of charitable, religious, 449.14 or educational functions; and 449.15 (2) any senior citizen group or association of groups that: 449.16 (i) in general limits membership to persons who are either 449.17 age 55 or older, or physically disabled; and 449.18 (ii) is organized and operated exclusively for pleasure, 449.19 recreation, and other nonprofit purposes, no part of the net 449.20 earnings of which inures to the benefit of any private 449.21 shareholders; and. 449.22(3) an entity organized and operated exclusively to449.23maintain449.24 For purposes of this subdivision, charitable purpose includes 449.25 the maintenance of a cemetery owned by a religious organization. 449.26 (b) This exemption does not apply to the following sales: 449.27 (1) building, construction, or reconstruction materials 449.28 purchased by a contractor or a subcontractor as a part of a 449.29 lump-sum contract or similar type of contract with a guaranteed 449.30 maximum price covering both labor and materials for use in the 449.31 construction, alteration, or repair of a building or facility; 449.32 (2) construction materials purchased by tax-exempt entities 449.33 or their contractors to be used in constructing buildings or 449.34 facilities that will not be used principally by the tax-exempt 449.35 entities; and 449.36 (3) meals and lodging as defined under section 297A.61, 450.1subdivisionssubdivision 3,paragraphparagraphs (d),and 450.216(g),paragraph (c)clause (2); and 450.3 (4) leasing of a motor vehicle as defined in section 450.4 297B.01, subdivision 5, except as provided in paragraph (c). 450.5 (c) This exemption applies to the leasing of a motor 450.6 vehicle as defined in section 297B.01, subdivision 5, only if 450.7 the vehicle is: 450.8 (1) a truck, as defined in section 168.011, a bus, as 450.9 defined in section 168.011, or a passenger automobile, as 450.10 defined in section 168.011, if the automobile is designed and 450.11 used for carrying more than nine persons including the driver; 450.12 and 450.13 (2) intended to be used primarily to transport tangible 450.14 personal property or individuals, other than employees, to whom 450.15 the organization provides service in performing its charitable, 450.16 religious, or educational purpose. 450.17 Sec. 31. Minnesota Statutes 2000, section 297A.70, 450.18 subdivision 7, is amended to read: 450.19 Subd. 7. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 450.20 Sales, except for those listed in paragraph (c), to a hospital 450.21 are exempt, if the items purchased are used in providing 450.22 hospital services. For purposes of this subdivision, "hospital" 450.23 means a hospital organized and operated for charitable purposes 450.24 within the meaning of section 501(c)(3) of the Internal Revenue 450.25 Code, and licensed under chapter 144 or by any other 450.26 jurisdiction, and "hospital services" are services authorized or 450.27 required to be performed by a "hospital" under chapter 144. 450.28 (b) Sales, except for those listed in paragraph (c), to an 450.29 outpatient surgical center are exempt, if the items purchased 450.30 are used in providing outpatient surgical services. For 450.31 purposes of this subdivision, "outpatient surgical center" means 450.32 an outpatient surgical center organized and operated for 450.33 charitable purposes within the meaning of section 501(c)(3) of 450.34 the Internal Revenue Code, and licensed under chapter 144 or by 450.35 any other jurisdiction. For the purposes of this subdivision, 450.36 "outpatient surgical services" means: (1) services authorized 451.1 or required to be performed by an outpatient surgical center 451.2 under chapter 144or under the applicable licensure law of any451.3other jurisdiction; and (2) urgent care. For purposes of this 451.4 subdivision, "urgent care" means health services furnished to a 451.5 person whose medical condition is sufficiently acute to require 451.6 treatment unavailable through, or inappropriate to be provided 451.7 by, a clinic or physician's office, but not so acute as to 451.8 require treatment in a hospital emergency room. 451.9 (c) This exemption does not apply to the following products 451.10 and services: 451.11 (1) purchases made by a clinic, physician's office, or any 451.12 other medical facility not operating as a hospital or outpatient 451.13 surgical center, even though the clinic, office, or facility may 451.14 be owned and operated by a hospital or outpatient surgical 451.15 center; 451.16 (2) sales under section 297A.61, subdivisions 3, paragraph 451.17 (d), and 16, paragraph (c); 451.18 (3) building and construction materials used in 451.19 constructing buildings or facilities that will not be used 451.20 principally by the hospital or outpatient surgical center; 451.21 (4) building, construction, or reconstruction materials 451.22 purchased by a contractor or a subcontractor as a part of a 451.23 lump-sum contract or similar type of contract with a guaranteed 451.24 maximum price covering both labor and materials for use in the 451.25 construction, alteration, or repair of a hospital or outpatient 451.26 surgical center; or 451.27 (5) the leasing of a motor vehicle as defined in section 451.28 297B.01, subdivision 5. 451.29 Sec. 32. Minnesota Statutes 2000, section 297A.70, 451.30 subdivision 8, is amended to read: 451.31 Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 451.32 SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 451.33 but not limited to, end user equipment used for construction, 451.34 ownership, operation, maintenance, and enhancement of the 451.35 backbone system of the regionwide public safety radio 451.36 communication system established under sections 473.891 to 452.1 473.905, are exempt. For purposes of this subdivision, backbone 452.2 system is defined in section 473.891, subdivision 9. This 452.3 subdivision is effective for purchases, sales, storage, use, or 452.4 consumption occurring before August 1, 2003, in the counties of 452.5 Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 452.6 Sec. 33. Minnesota Statutes 2000, section 297A.70, 452.7 subdivision 10, is amended to read: 452.8 Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] Tickets or 452.9 admissions to the premises of or events sponsored by an 452.10 organization that provides an opportunity for citizens of the 452.11 state to participate in the creation, performance, or 452.12 appreciation of the arts are exempt if the organization is 452.13 either: 452.14 (1)a tax-exempt organization within the meaning of452.15Minnesota Statutes 1980, section 290.05, subdivision 1, clause452.16(i),a corporation, fund, foundation, trust, or association if 452.17 (i) it is organized for exclusively scientific, literary, 452.18 religious, charitable, educational, or artistic purposes, or for 452.19 the purpose of making contributions to or for the use of the 452.20 United States of America, the state of Minnesota or any of its 452.21 political subdivisions for exclusively public purposes, or for 452.22 any combination of the purposes listed in this clause, and (ii) 452.23 no part of the net income of the corporation, fund, foundation, 452.24 trust, or association inures to the benefit of any private 452.25 member, stockholder, or individual; or 452.26 (2) a municipal board that promotes cultural and arts 452.27 activities. 452.28 The exemption providedwith respectto a municipal board applies 452.29 only to tickets and admissions to events sponsored by the board. 452.30 Sec. 34. Minnesota Statutes 2000, section 297A.70, 452.31 subdivision 13, is amended to read: 452.32 Subd. 13. [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 452.33 (a) The following sales by the specified organizations for 452.34 fundraising purposes are exempt, subject to the limitations 452.35 listed in paragraph (b): 452.36 (1) all sales made by an organization that exists solely 453.1 for the purpose of providing educational or social activities 453.2 for young people primarily age 18 and under; 453.3 (2) all sales made by an organization that is a senior 453.4 citizen group or association of groups if (i) in general it 453.5 limits membership to persons age 55 or older; (ii) it is 453.6 organized and operated exclusively for pleasure, recreation, and 453.7 other nonprofit purposes; and (iii) no part of its net earnings 453.8 inures to the benefit of any private shareholders; 453.9 (3) the sale or use of tickets or admissions to a golf 453.10 tournament held in Minnesota if the beneficiary of the 453.11 tournament's net proceeds qualifies as a tax-exempt organization 453.12 under section 501(c)(3) of the Internal Revenue Code; and 453.13 (4) sales of gum, candy, and candy products sold for 453.14 fundraising purposes by a nonprofit organization that provides 453.15 educational and social activities primarily for young people age 453.16 18years of ageand under. 453.17 (b) The exemptions listed in paragraph (a) are limited in 453.18 the following manner: 453.19 (1) the exemption under paragraph (a), clauses (1) and (2), 453.20 applies only if the gross annual receipts of the organization 453.21 from fundraising do not exceed $10,000; and 453.22 (2) the exemption under paragraph (a), clause (1), does not 453.23 apply if the sales are derived from admission charges or from 453.24 activities for which the money must be deposited with the school 453.25 district treasurer under section 123B.49, subdivision 2, or be 453.26 recorded in the same manner as other revenues or expenditures of 453.27 the school district under section 123B.49, subdivision 4. 453.28 (c) For purposes of this subdivision, a club, association, 453.29 or other organization of elementary or secondary school students 453.30 organized for the purpose of carrying on sports, educational, or 453.31 other extracurricular activities is a separate organization from 453.32 the school district or school for purposes of applying the 453.33 $10,000 limit. 453.34 Sec. 35. Minnesota Statutes 2000, section 297A.70, 453.35 subdivision 14, is amended to read: 453.36 Subd. 14. [FUNDRAISING EVENTS SPONSORED BY NONPROFIT 454.1 GROUPS.] (a) Sales of tangible personal property at, and 454.2 admission charges for fundraising events sponsored by, a 454.3 nonprofit organization are exempt if the entire proceeds, less 454.4 the necessary expenses for the event, will be used solely and 454.5 exclusively for charitable, religious, or educational purposes. 454.6 Exempt sales include the sale of food, meals, and drinks, and454.7taxable servicesat the fundraising event. 454.8 (b) This exemption is limited in the following manner: 454.9 (1) it does not apply to admission charges for events 454.10 involving bingo or other gambling activities or to charges for 454.11 use of amusement devices involving bingo or other gambling 454.12 activities; 454.13 (2) all gross receipts are taxable if the profits are not 454.14 used solely and exclusively for charitable, religious, or 454.15 educational purposes; 454.16 (3) it does not apply unless the organization keeps a 454.17 separate accounting record, including receipts and disbursements 454.18 from each fundraising event that documents all deductions from 454.19 gross receipts with receipts and other records; 454.20 (4) it does not apply to any sale made by or in the name of 454.21 a nonprofit corporation as the active or passive agent of a 454.22 person that is not a nonprofit corporation; 454.23 (5) all gross receipts are taxable if fundraising events 454.24 exceed 24 days per year; and 454.25 (6) it does not apply to fundraising events conducted on 454.26 premises leased for more than five days but less than 30 days. 454.27 (c) For purposes of this subdivision, a "nonprofit 454.28 organization" means any unit of government, corporation, 454.29 society, association, foundation, or institution organized and 454.30 operated for charitable, religious, educational, civic, 454.31 fraternal, and senior citizens' or veterans' purposes, no part 454.32 of the net earnings of which inures to the benefit of a private 454.33 individual. 454.34 Sec. 36. Minnesota Statutes 2000, section 297A.75, is 454.35 amended to read: 454.36 297A.75 [REFUND; APPROPRIATION.] 455.1 Subdivision 1. [TAX COLLECTED.] The tax on the gross 455.2 receipts from the sale of the following exempt items must be 455.3 imposed and collected as if the sale were taxable and the rate 455.4 under section 297A.62, subdivision 1, applied. The exempt items 455.5 include: 455.6 (1) capital equipment exempt under section 297A.68, 455.7 subdivision 5; 455.8 (2) building materials for an agricultural processing 455.9 facility exempt under section 297A.71, subdivision 13; 455.10 (3) building materials for mineral production facilities 455.11 exempt under section 297A.71, subdivision 14; 455.12 (4) building materials for correctional facilities under 455.13 section 297A.71, subdivision 3; 455.14 (5) building materials used in a residence for disabled 455.15 veterans exempt under section 297A.71, subdivision 11;and455.16 (6) chair lifts, ramps, elevators, and associated building 455.17 materials exempt under section 297A.71, subdivision 12; and 455.18 (7) building materials for the Long Lake Conservation 455.19 Center exempt under section 297A.71, subdivision 17. 455.20 Subd. 2. [REFUND; ELIGIBLE PERSONS.] Upon application on 455.21 forms prescribed by the commissioner, a refund equal to the tax 455.22 paid on the gross receipts of the exempt items must be paid to 455.23 the applicant. Only the following persons may apply for the 455.24 refund: 455.25 (1) for subdivision 1, clauses (1) to (3), the applicant 455.26 must be the purchaser; 455.27 (2) for subdivision 1,clauseclauses (4) and (7), the 455.28 applicant must be the governmental subdivision; 455.29 (3) for subdivision 1, clause (5), the applicant must be 455.30 the recipient of the benefits provided in United States Code, 455.31 title 38, chapter 21; and 455.32 (4) for subdivision 1, clause (6), the applicant must be 455.33 the owner of the homestead property. 455.34 Subd. 3. [APPLICATION.] (a) The application must include 455.35 sufficient information to permit the commissioner to verify the 455.36 tax paid. If the tax was paid by a contractor, subcontractor, 456.1 or builder, under subdivision 1, clause (4), (5),or(6), or 456.2 (7), the contractor, subcontractor, or builder must furnish to 456.3 the refund applicant a statement including the cost of the 456.4 exempt items and the taxes paid on the items unless otherwise 456.5 specifically provided by this subdivision. The provisions of 456.6 sections 289A.40 and 289A.50 apply to refunds under this section. 456.7 (b) An applicant may not file more than two applications 456.8 per calendar year for refunds for taxes paid on capital 456.9 equipment exempt under section 297A.68, subdivision 5. 456.10 Subd. 4. [INTEREST.] Interest must be paid on the refund 456.11 at the rate in section 270.76 from the date the refund claim is 456.12 filed for taxes paid under subdivision 1, clauses (1) to (3), 456.13 and (5), and from 60 days after the date the refund claim is 456.14 filed with the commissioner for claims filed under subdivision 456.15 1, clauses (4)and, (6), and (7). 456.16 Subd. 5. [APPROPRIATION.] The amount required to make the 456.17 refunds is annually appropriated to the commissioner. 456.18 Sec. 37. Minnesota Statutes 2000, section 297A.77, 456.19 subdivision 1, is amended to read: 456.20 Subdivision 1. [COLLECTION OF TAX AT TIME OF SALE.] The 456.21 tax must be stated and charged separately from the sales 456.22 priceor charge for serviceinsofar as practicable and must be 456.23 collected by the seller from the purchaser. 456.24 Sec. 38. Minnesota Statutes 2000, section 297A.80, is 456.25 amended to read: 456.26 297A.80 [TAXES IN OTHER STATES;OFFSET AGAINSTUSE 456.27 TAX CREDIT.] 456.28 Subdivision 1. [MULTISTATE TAX COMPACT STATES.] If an 456.29 article of tangible personal property or an item listed in 456.30 section 297A.63 has already been taxed for its sale, 456.31 distribution, storage, use, or other consumption by another 456.32 state, or a subdivision of another state, that is a member of 456.33 the multistate tax compact, a tax credit is allowed to the 456.34 person who paid the tax in the other state or subdivision of the 456.35 other state under the provisions of section 290.171, article V. 456.36 Subd. 2. [OTHER STATES; GENERALLY.] If an article of 457.1 tangible personal property or an item listed in section 297A.63 457.2 has already been taxedby another statefor its sale, 457.3 distribution, storage, use, or other consumptionin an amount457.4less than the tax imposed by this chapter, then as to the person457.5who paid the tax in the other state, section 297A.63 applies457.6only at a rate measured by the difference between the rate457.7imposed under section 297A.62 and the rate by which the previous457.8tax was computedby another state not included in subdivision 1, 457.9 a tax credit is allowed against the tax imposed in section 457.10 297A.63 to the person who paid the tax in the amount of tax paid 457.11 to the other state.If the tax imposed in the other state is457.12equal to or greater thanThe credit cannot exceed the tax 457.13 imposed in this state, then no tax is due from that personunder 457.14 section 297A.63. 457.15 Sec. 39. Minnesota Statutes 2000, section 297A.82, 457.16 subdivision 3, is amended to read: 457.17 Subd. 3. [PAYMENT OF TAX TO COMMISSIONER.] Ifthean 457.18 aircraft is purchased from a person who is not the holder of a 457.19 valid sales and use tax permit under this chapter, the purchaser 457.20 shall pay the tax to the commissioner of revenue prior to 457.21 registering or licensing the aircraft in this state. The 457.22 commissioner of revenue shall issue a certificate stating that 457.23 the sales and use tax in respect to the transaction has been 457.24 paid. 457.25 Sec. 40. Minnesota Statutes 2000, section 297A.89, 457.26 subdivision 1, is amended to read: 457.27 Subdivision 1. [COMMISSIONER MAY PERMIT.] The commissioner 457.28 may permit purchasers to pay taxes imposed by this chapter 457.29 directly to the commissioner. Any taxes paid by purchasers 457.30 under this section are considered use taxes, except for local457.31sales taxes when no corresponding local use tax is imposed. 457.32 Sec. 41. Minnesota Statutes 2000, section 297A.90, 457.33 subdivision 1, is amended to read: 457.34 Subdivision 1. [REGISTRATION; RECORDS.] (a) A person who 457.35 is engaged in interstate for-hire transportation of tangible 457.36 personal property or passengers by motor vehicle may, under 458.1 rules prescribed by the commissioner, register as a retailer and 458.2 pay the taxes imposed by this chapter in accordance with this 458.3 section. Any taxes paid under this section are use taxes,458.4except local sales taxes when no corresponding local use tax is458.5imposed. 458.6 (b) As used in this section, "person" means: 458.7 (1) one who possesses a certificate or permit or has 458.8 completed a registration process that authorizes for-hire 458.9 transportation of property or passengers from the United States 458.10 Department of Transportation, the transportation regulation 458.11 board, or the department of transportation; 458.12 (2) one who transports commodities defined as "exempt" in 458.13 for-hire transportation in interstate commerce; or 458.14 (3) one who transports tangible personal property in 458.15 interstate commerce, pursuant to contracts with persons 458.16 described in clause (1) or (2). 458.17 Persons qualifying under clause (2) or (3) must maintain on a 458.18 current basis the same type of mileage records that are required 458.19 by persons specified in clause (1) by the United States 458.20 Department of Transportation. 458.21 (c) Persons who in the course of their business are 458.22 transporting solely their own goods in interstate commerce may 458.23 also register as retailers under rules prescribed by the 458.24 commissioner and pay the taxes imposed by this chapter in 458.25 accordance with this section. 458.26 Sec. 42. Minnesota Statutes 2000, section 297A.91, 458.27 subdivision 1, is amended to read: 458.28 Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL 458.29 TRANSPORT.] (a) If the retailer does not have a sales or use tax 458.30 permit and has been engaging in transporting personal property 458.31 into the state without payment of the tax, the commissioner of 458.32 revenue or the commissioner's agents may seize in the name of 458.33 the state any truck, automobile, or means of transportation not 458.34 owned or operated by acommonfor-hire carrier, used in the 458.35 illegal importation and transportation of any tangible personal 458.36 property by a retailer or the retailer's agent or employee. The 459.1 commissioner may demand the forfeiture and sale of the truck, 459.2 automobile, or other means of transportation together with the 459.3 property being transported illegally, unless the owner 459.4 establishes to the satisfaction of the commissioner or the court 459.5 that the owner had no notice or knowledge or reason to believe 459.6 that the vehicle was used or intended to be used in any such 459.7 violation. 459.8 (b) Within two days after the seizure, the person making 459.9 the seizure shall deliver an inventory of the vehicle and 459.10 property seized to the person from whom the seizure was made, if 459.11 known, and to any person known or believed to have any right, 459.12 title, interest, or lien on the vehicle or property. The person 459.13 making the seizure shall also file a copy of the inventory with 459.14 the commissioner. 459.15 Sec. 43. Minnesota Statutes 2000, section 297A.92, 459.16 subdivision 2, is amended to read: 459.17 Subd. 2. [AUCTIONS OF SECURITY.] The commissioner may sell 459.18 property deposited as security at public auction if necessary to 459.19 recover the amount required to be collected, including any 459.20 interest and penalties. Notice of the sale must be served upon 459.21 the person who deposited the security. It must be served 459.22 personally, or by mail as prescribed forthe service of a notice459.23of a deficiencyan order of assessment under section 289A.37, 459.24 subdivision 5. After a sale any surplus above the amount due 459.25 not required as security under this section must be returned to 459.26 the person who deposited the security. 459.27 Sec. 44. Minnesota Statutes 2000, section 297A.94, is 459.28 amended to read: 459.29 297A.94 [DEPOSIT OF REVENUES.] 459.30 (a) Except as provided in this section, the commissioner 459.31 shall deposit the revenues, including interest and penalties, 459.32 derived from the taxes imposed by this chapter in the state 459.33 treasury and credit them to the general fund. 459.34 (b) The commissioner shall deposit taxes in the Minnesota 459.35 agricultural and economic account in the special revenue fund if: 459.36 (1) the taxes are derived from sales and use of property 460.1 and services purchased for the construction and operation of an 460.2 agricultural resource project; and 460.3 (2) the purchase was made on or after the date on which a 460.4 conditional commitment was made for a loan guaranty for the 460.5 project under section 41A.04, subdivision 3. 460.6 The commissioner of finance shall certify to the commissioner 460.7 the date on which the project received the conditional 460.8 commitment. The amount deposited in the loan guaranty account 460.9 must be reduced by any refunds and by the costs incurred by the 460.10 department of revenue to administer and enforce the assessment 460.11 and collection of the taxes. 460.12 (c) The commissioner shall deposit the revenues, including 460.13 interest and penalties, derived from the taxes imposed on sales 460.14 and purchases included in section 297A.61, subdivision16,460.15paragraphs (b) and (f)3, paragraph (g), clauses (1) and (5), in 460.16 the state treasury, and credit them as follows: 460.17 (1) first to the general obligation special tax bond debt 460.18 service account in each fiscal year the amount required by 460.19 section 16A.661, subdivision 3, paragraph (b); and 460.20 (2) after the requirements of clause (1) have been met, the 460.21 balance to the general fund. 460.22 (d) The commissioner shall deposit the revenues, including 460.23 interest and penalties, collected under section 297A.64, 460.24 subdivision 5, in the state treasury and credit them to the 460.25 general fund. By July 15 of each year the commissioner shall 460.26 transfer to the highway user tax distribution fund an amount 460.27 equal to the excess fees collected under section 297A.64, 460.28 subdivision 5, for the previous calendar year. 460.29 (e) For fiscal year 2001, 97 percent, and for fiscal year 460.30 2002 and thereafter, 87 percent of the revenues, including 460.31 interest and penalties, transmitted to the commissioner under 460.32 section 297A.65, must be deposited by the commissioner in the 460.33 state treasury as follows: 460.34 (1) 50 percent of the receipts must be deposited in the 460.35 heritage enhancement account in the game and fish fund, and may 460.36 be spent only on activities that improve, enhance, or protect 461.1 fish and wildlife resources, including conservation, 461.2 restoration, and enhancement of land, water, and other natural 461.3 resources of the state; 461.4 (2) 22.5 percent of the receipts must be deposited in the 461.5 natural resources fund, and may be spent only for state parks 461.6 and trails; 461.7 (3) 22.5 percent of the receipts must be deposited in the 461.8 natural resources fund, and may be spent only on metropolitan 461.9 park and trail grants; 461.10 (4) three percent of the receipts must be deposited in the 461.11 natural resources fund, and may be spent only on local trail 461.12 grants; and 461.13 (5) two percent of the receipts must be deposited in the 461.14 natural resources fund, and may be spent only for the Minnesota 461.15 zoological garden, the Como park zoo and conservatory, and the 461.16 Duluth zoo. 461.17 (f) The revenue dedicated under paragraph (e) may not be 461.18 used as a substitute for traditional sources of funding for the 461.19 purposes specified, but the dedicated revenue shall supplement 461.20 traditional sources of funding for those purposes. Land 461.21 acquired with money deposited in the game and fish fund under 461.22 paragraph (e) must be open to public hunting and fishing during 461.23 the open season. At least 87 percent of the money deposited in 461.24 the game and fish fund for improvement, enhancement, or 461.25 protection of fish and wildlife resources under paragraph (e) 461.26 must be allocated for field operations. 461.27 Sec. 45. Minnesota Statutes 2000, section 297A.99, 461.28 subdivision 7, is amended to read: 461.29 Subd. 7. [EXEMPTIONS.] (a) All goods or services that are 461.30 otherwise exempt from taxation under this chapter are exempt 461.31 from a political subdivision's tax. 461.32 (b) The gross receipts from the sale of tangible personal 461.33 property that meets the requirement of section 297A.68, 461.34 subdivision13 or 1415, are exempt, except the qualification 461.35 test applies based on the boundaries of the political 461.36 subdivision instead of the state of Minnesota. 462.1 (c) All mobile transportation equipment, and parts and 462.2 accessories attached to or to be attached to the equipment are 462.3 exempt, if purchased by a holder of a motor carrier direct pay 462.4 permit under section 297A.90. 462.5 Sec. 46. [INSTRUCTIONS TO REVISOR.] 462.6 (a) In the next edition of Minnesota Statutes, the revisor 462.7 of statutes shall put the definitions in section 297A.68, 462.8 subdivision 5, paragraph (d), in alphabetical order and correct 462.9 any references to the reordered definitions. 462.10 (b) In the next edition of Minnesota Statutes, the revisor 462.11 of statutes shall renumber section 297A.68, subdivision 27, as 462.12 297A.67, subdivision 26, and correct any references to the 462.13 renumbered section. 462.14 Sec. 47. [REPEALER.] 462.15 Minnesota Statutes 2000, sections 297A.61, subdivision 16; 462.16 297A.68, subdivision 21; and 297A.71, subdivision 21, are 462.17 repealed. 462.18 Sec. 48. [EFFECTIVE DATE.] 462.19 Each section of this act takes effect at the time the 462.20 section it amends is effective under Laws 2000, chapter 418, 462.21 article 1, section 46. 462.22 ARTICLE 19 462.23 HEALTH CARE TAXES 462.24 Section 1. Minnesota Statutes 2000, section 256B.19, 462.25 subdivision 1c, is amended to read: 462.26 Subd. 1c. [ADDITIONAL PORTION OF NONFEDERAL SHARE.]In462.27addition to any payment required under subdivision 1b,(a) 462.28 Hennepin county shall be responsible for a monthly transfer 462.29 payment of $1,500,000, due before noon on the 15th of each month 462.30 and the University of Minnesota shall be responsible for a 462.31 monthly transfer payment of $500,000 due before noon on the 15th 462.32 of each month, beginning July 15, 1995. These sums shall be 462.33 part of the designated governmental unit's portion of the 462.34 nonfederal share of medical assistance costs, but shall not be 462.35 subject to payback provisions of section 256.025. 462.36 (b) For the period from July 1, 2001, to June 30, 2003, the 463.1 payment of Hennepin county under paragraph (a) shall be 463.2 $1,783,333 each month. 463.3 Sec. 2. Minnesota Statutes 2000, section 295.53, 463.4 subdivision 4a, is amended to read: 463.5 Subd. 4a. [CREDIT FOR RESEARCH.] (a) In addition to the 463.6 exemptions allowed under subdivision 1, a hospital or health 463.7 care provider may claim an annual credit against the total 463.8 amount of tax, if any, the hospital or health care provider owes 463.9 for that calendar year under sections 295.50 to 295.57. The 463.10 credit shall equal2.5 percent of revenues for patient services463.11used to funda percentage of expenditures for qualifying 463.12 research conducted by an allowable research program as 463.13 determined under paragraph (e). The amount of the credit shall 463.14 not exceed the tax liability of the hospital or health care 463.15 provider under sections 295.50 to 295.57. 463.16 (b) For purposes of this subdivision, the following 463.17 requirements apply: 463.18 (1) expenditures must be for program costs of qualifying 463.19 research conducted by an allowable research program; 463.20 (2) an allowable research program must be a formal program 463.21 of medical and health care research conducted by an entity which 463.22 is exempt under section 501(c)(3) of the Internal Revenue Code 463.23 of 1986 or is owned and operated under authority of a 463.24 governmental unit; 463.25 (3) qualifying research must: 463.26 (A) be approved in writing by the governing body of the 463.27 hospital or health care provider which is taking thededuction463.28 credit under this subdivision; 463.29 (B) have as its purpose the development of new knowledge in 463.30 basic or applied science relating to the diagnosis and treatment 463.31 of conditions affecting the human body; 463.32 (C) be subject to review by individuals with expertise in 463.33 the subject matter of the proposed study but who have no 463.34 financial interest in the proposed study and are not involved in 463.35 the conduct of the proposed study; and 463.36 (D) be subject to review and supervision by an 464.1 institutional review board operating in conformity with federal 464.2 regulations if the research involves human subjects or an 464.3 institutional animal care and use committee operating in 464.4 conformity with federal regulations if the research involves 464.5 animal subjects. Research expensesare not exemptdo not 464.6 qualify for the credit if the study is a routine evaluation of 464.7 health care methods or products used in a particular setting 464.8 conducted for the purpose of making a management decision. 464.9 Costs of clinical research activities paid directly for the 464.10 benefit of an individual patient are excluded from 464.11 thisexemptioncredit. Basic research in fields including 464.12 biochemistry, molecular biology, and physiology are also 464.13 included if such programs are subject to a peer review process. 464.14 (c) No credit shall be allowed under this subdivision for 464.15 any revenue received by the hospital or health care provider in 464.16 the form of a grant, gift, or otherwise,whether from a464.17government or nongovernment source, on which the tax liability464.18under section 295.52 is not imposedto conduct research. 464.19 (d) The taxpayer shall apply for the credit under this 464.20 section on the annual return under section 295.55, subdivision 5. 464.21 (e) For research expenses paid in 2001, the credit is equal 464.22 to 5.5 percent of the taxpayer's total expenditures for 464.23 qualifying research. Beginning September 1, 2001, if the actual 464.24 or estimated amount paid under this section for the calendar 464.25 year exceeds$2,500,000$8,500,000, the commissioner of finance 464.26 shall determine the rate of the research credit for the 464.27 following calendar year to the nearest one-half percent so that 464.28 refunds paid under this section will most closely equal 464.29$2,500,000$8,500,000. The commissioner of finance shall 464.30 publish in the State Register by October 1 of each year the rate 464.31 of the credit for the following calendar year. A determination 464.32 under this section is not subject to the rulemaking provisions 464.33 of chapter 14. 464.34[EFFECTIVE DATE.] This section is effective for research 464.35 expenses paid in 2001 and thereafter. 464.36 Sec. 3. [REPEALER.] 465.1 Minnesota Statutes 2000, section 256.9657, subdivision 2, 465.2 is repealed effective July 1, 2002, and Minnesota Statutes 2000, 465.3 section 256B.19, subdivision 1b, is repealed effective July 1, 465.4 2001. 465.5 ARTICLE 20 465.6 DEPARTMENT INCOME AND FRANCHISE TAXES 465.7 Section 1. Minnesota Statutes 2000, section 270A.03, 465.8 subdivision 5, is amended to read: 465.9 Subd. 5. [DEBT.] "Debt" means a legal obligation of a 465.10 natural person to pay a fixed and certain amount of money, which 465.11 equals or exceeds $25 and which is due and payable to a claimant 465.12 agency. The term includes criminal fines imposed under section 465.13 609.10 or 609.125 and restitution. A debt may arise under a 465.14 contractual or statutory obligation, a court order, or other 465.15 legal obligation, but need not have been reduced to judgment. 465.16 A debt includes any legal obligation of a current recipient 465.17 of assistance which is based on overpayment of an assistance 465.18 grant where that payment is based on a client waiver or an 465.19 administrative or judicial finding of an intentional program 465.20 violation; or where the debt is owed to a program wherein the 465.21 debtor is not a client at the time notification is provided to 465.22 initiate recovery under this chapter and the debtor is not a 465.23 current recipient of food stamps, transitional child care, or 465.24 transitional medical assistance. 465.25 A debt does not include any legal obligation to pay a 465.26 claimant agency for medical care, including hospitalization if 465.27 the income of the debtor at the time when the medical care was 465.28 rendered does not exceed the following amount: 465.29 (1) for an unmarried debtor, an income of$6,400$8,800 or 465.30 less; 465.31 (2) for a debtor with one dependent, an income 465.32 of$8,200$11,270 or less; 465.33 (3) for a debtor with two dependents, an income 465.34 of$9,700$13,330 or less; 465.35 (4) for a debtor with three dependents, an income of 465.36$11,000$15,120 or less; 466.1 (5) for a debtor with four dependents, an income 466.2 of$11,600$15,950 or less; and 466.3 (6) for a debtor with five or more dependents, an income of 466.4$12,100$16,630 or less. 466.5 The income amounts in this subdivision shall be adjusted 466.6 for inflation for debts incurred in calendar years19912001 and 466.7 thereafter. The dollar amount of each income level that applied 466.8 to debts incurred in the prior year shall be increased in the 466.9 same manner as provided in section290.06, subdivision 2d, for466.10the expansion of the tax rate brackets1f of the Internal 466.11 Revenue Code of 1986, as amended through December 31, 2000, 466.12 except that for the purposes of this subdivision the percentage 466.13 increase shall be determined from the year starting September 1, 466.14 1999, and ending August 31, 2000, as the base year for adjusting 466.15 for inflation for debts incurred after December 31, 2000. 466.16 Debt also includes an agreement to pay a MinnesotaCare 466.17 premium, regardless of the dollar amount of the premium 466.18 authorized under section 256L.15, subdivision 1a. 466.19[EFFECTIVE DATE.] This section is effective for debts 466.20 incurred after December 31, 2000. 466.21 Sec. 2. Minnesota Statutes 2000, section 289A.12, 466.22 subdivision 3, is amended to read: 466.23 Subd. 3. [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 466.24 AND S CORPORATIONS.] (a) Partnerships must file a return with 466.25 the commissioner for each taxable year. The return must conform 466.26 to the requirements of section290.31290.311, and must include 466.27 the names and addresses of the partners entitled to a 466.28 distributive share in their taxable net income, gain, loss, or 466.29 credit, and the amount of the distributive share to which each 466.30 is entitled. A partnership required to file a return for a 466.31 partnership taxable year must furnish a copy of the information 466.32 required to be shown on the return to a person who is a partner 466.33 at any time during the taxable year, on or before the day on 466.34 which the return for the taxable year was filed. 466.35 (b) The fiduciary of an estate or trust making the return 466.36 required to be filed under section 289A.08, subdivision 2, for a 467.1 taxable year must give a beneficiary who receives a distribution 467.2 from the estate or trust with respect to the taxable year or to 467.3 whom any item with respect to the taxable year is allocated, a 467.4 statement containing the information required to be shown on the 467.5 return, on or before the date on which the return was filed. 467.6 (c) An S corporation must file a return with the 467.7 commissioner for a taxable year during which an election under 467.8 section 290.9725 is in effect, stating specifically the names 467.9 and addresses of the persons owning stock in the corporation at 467.10 any time during the taxable year, the number of shares of stock 467.11 owned by a shareholder at all times during the taxable year, the 467.12 shareholder's pro rata share of each item of the corporation for 467.13 the taxable year, and other information the commissioner 467.14 requires. An S corporation required to file a return under this 467.15 paragraph for any taxable year must furnish a copy of the 467.16 information shown on the return to the person who is a 467.17 shareholder at any time during the taxable year, on or before 467.18 the day on which the return for the taxable year was filed. 467.19 (d) The partnership or S corporation return must be signed 467.20 by someone designated by the partnership or S corporation. 467.21[EFFECTIVE DATE.] This section is effective for tax years 467.22 beginning after December 31, 2000. 467.23 Sec. 3. Minnesota Statutes 2000, section 290.06, 467.24 subdivision 23, is amended to read: 467.25 Subd. 23. [REFUND OF CONTRIBUTIONS TO POLITICAL PARTIES 467.26 AND CANDIDATES.] (a) A taxpayer may claim a refund equal to the 467.27 amount of the taxpayer's contributions made in the calendar year 467.28 to candidates and to a political party. The maximum refund for 467.29 an individual must not exceed $50 and for a married couple, 467.30 filing jointly, must not exceed $100. A refund of a 467.31 contribution is allowed only if the taxpayer files a form 467.32 required by the commissioner and attaches to the form a copy of 467.33 an official refund receipt form issued by the candidate or party 467.34 and signed by the candidate, the treasurer of the candidate's 467.35 principal campaign committee, or the chair or treasurer of the 467.36 party unit, after the contribution was received. The receipt 468.1 forms must be numbered, and the data on the receipt that are not 468.2 public must be made available to the campaign finance and public 468.3 disclosure board upon its request. A claim must be filed with 468.4 the commissioner no sooner than January 1 of the calendar year 468.5 in which the contribution was made and no later than April 15 of 468.6 the calendar year following the calendar year in which the 468.7 contribution was made. A taxpayer may file only one claim per 468.8 calendar year. Amounts paid by the commissioner after June 15 468.9 of the calendar year following the calendar year in which the 468.10 contribution was made must include interest at the rate 468.11 specified in section 270.76. 468.12 (b) No refund is allowed under this subdivision for a 468.13 contribution to a candidate unless the candidate: 468.14 (1) has signed an agreement to limit campaign expenditures 468.15 as provided in section 10A.322; 468.16 (2) is seeking an office for which voluntary spending 468.17 limits are specified in section 10A.25; and 468.18 (3) has designated a principal campaign committee. 468.19 This subdivision does not limit the campaign expenditures 468.20 of a candidate who does not sign an agreement but accepts a 468.21 contribution for which the contributor improperly claims a 468.22 refund. 468.23 (c) For purposes of this subdivision, "political party" 468.24 means a major political party as defined in section 200.02, 468.25 subdivision 7, or a minor political party qualifying for 468.26 inclusion on the income tax or property tax refund form under 468.27 section 10A.31, subdivision 3a. 468.28 A "major party" or "minor party" includes the aggregate of 468.29 that party's organization within each house of the legislature, 468.30 the state party organization, and the party organization within 468.31 congressional districts, counties, legislative districts, 468.32 municipalities, and precincts. 468.33 "Candidate" means a candidate as defined in section 10A.01, 468.34 subdivision 10, except a candidate for judicial office. 468.35 "Contribution" means a gift of money. 468.36 (d) The commissioner shall make copies of the form 469.1 available to the public and candidates upon request. 469.2 (e) The following data collected or maintained by the 469.3 commissioner under this subdivision are private: the identities 469.4 of individuals claiming a refund, the identities of candidates 469.5 to whom those individuals have made contributions, and the 469.6 amount of each contribution. 469.7 (f) The commissioner shall report to the campaign finance 469.8 and public disclosure board by each August 1 a summary showing 469.9 the total number and aggregate amount of political contribution 469.10 refunds made on behalf of each candidate and each political 469.11 party. These data are public. 469.12 (g) The amount necessary to pay claims for the refund 469.13 provided in this section is appropriated from the general fund 469.14 to the commissioner of revenue. 469.15 (h) For a taxpayer who files a claim for refund via the 469.16 Internet or other electronic means, the commissioner may accept 469.17 the number on the official receipt as documentation that a 469.18 contribution was made rather than the actual receipt as required 469.19 by paragraph (a). 469.20[EFFECTIVE DATE.] This section is effective for refund 469.21 claims based on contributions made after December 31, 2001. 469.22 Sec. 4. Minnesota Statutes 2000, section 290.067, 469.23 subdivision 2, is amended to read: 469.24 Subd. 2. [LIMITATIONS.] The credit for expenses incurred 469.25 for the care of each dependent shall not exceed $720 in any 469.26 taxable year, and the total credit for all dependents of a 469.27 claimant shall not exceed $1,440 in a taxable year. The maximum 469.28 total credit shall be reduced according to the amount of the 469.29 income of the claimant and a spouse, if any, as follows: 469.30 income up to$13,350$18,040, $720 maximum for one 469.31 dependent, $1,440 for all dependents; 469.32 income over$13,350$18,040, the maximum credit for one 469.33 dependent shall be reduced by $18 for every $350 of additional 469.34 income, $36 for all dependents. 469.35 The commissioner shall construct and make available to 469.36 taxpayers tables showing the amount of the credit at various 470.1 levels of income and expenses. The tables shall follow the 470.2 schedule contained in this subdivision, except that the 470.3 commissioner may graduate the transitions between expenses and 470.4 income brackets. 470.5[EFFECTIVE DATE.] This section is effective for tax years 470.6 beginning after December 31, 1999. 470.7 Sec. 5. Minnesota Statutes 2000, section 290.067, 470.8 subdivision 2b, is amended to read: 470.9 Subd. 2b. [INFLATION ADJUSTMENT.] The dollar amount of the 470.10 income threshold at which the maximum credit begins to be 470.11 reduced under subdivision 2 must be adjusted for inflation. The 470.12 commissioner shalladjust the threshold amount by the percentage470.13determined under section 290.06, subdivision 2d, for the taxable470.14year.make the inflation adjustments in accordance with section 470.15 1f of the Internal Revenue Code except that for the purposes of 470.16 this subdivision the percentage increase must be determined from 470.17 the year starting September 1, 1999, and ending August 31, 2000, 470.18 as the base year for adjusting for inflation for the tax year 470.19 beginning after December 31, 2000. The determination of the 470.20 commissioner under this subdivision is not a rule under the 470.21 Administrative Procedures Act. 470.22[EFFECTIVE DATE.] This section is effective for tax years 470.23 beginning after December 31, 2000. 470.24 Sec. 6. Minnesota Statutes 2000, section 290.0671, 470.25 subdivision 1, is amended to read: 470.26 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 470.27 allowed a credit against the tax imposed by this chapter equal 470.28 to a percentage of earned income. To receive a credit, a 470.29 taxpayer must be eligible for a credit under section 32 of the 470.30 Internal Revenue Code. 470.31 (b) For individuals with no qualifying children, the credit 470.32 equals 1.9125 percent of the first$4,460$4,620 of earned 470.33 income. The credit is reduced by 1.9125 percent of earned 470.34 income or modified adjusted gross income, whichever is greater, 470.35 in excess of$5,570$5,770, but in no case is the credit less 470.36 than zero. 471.1 (c) For individuals with one qualifying child, the credit 471.2 equals 8.5 percent of the first$6,680$6,920 of earned income 471.3 and 8.5 percent of earned income over$11,650$12,080 but less 471.4 than$12,990$13,450. The credit is reduced by 5.73 percent of 471.5 earned income or modified adjusted gross income, whichever is 471.6 greater, in excess of$14,560$15,080, but in no case is the 471.7 credit less than zero. 471.8 (d) For individuals with two or more qualifying children, 471.9 the credit equals ten percent of the first$9,390$9,720 of 471.10 earned income and 20 percent of earned income 471.11 over$14,350$14,860 but less than$16,230$16,800. The credit 471.12 is reduced by 10.3 percent of earned income or modified adjusted 471.13 gross income, whichever is greater, in excess 471.14 of$17,280$17,890, but in no case is the credit less than zero. 471.15 (e) For a nonresident or part-year resident, the credit 471.16 must be allocated based on the percentage calculated under 471.17 section 290.06, subdivision 2c, paragraph (e). 471.18 (f) For a person who was a resident for the entire tax year 471.19 and has earned income not subject to tax under this chapter, the 471.20 credit must be allocated based on the ratio of federal adjusted 471.21 gross income reduced by the earned income not subject to tax 471.22 under this chapter over federal adjusted gross income. 471.23 (g) The commissioner shall construct tables showing the 471.24 amount of the credit at various income levels and make them 471.25 available to taxpayers. The tables shall follow the schedule 471.26 contained in this subdivision, except that the commissioner may 471.27 graduate the transition between income brackets. 471.28[EFFECTIVE DATE.] This section is effective for taxable 471.29 years beginning after December 31, 1999. 471.30 Sec. 7. Minnesota Statutes 2000, section 290.0671, 471.31 subdivision 7, is amended to read: 471.32 Subd. 7. [INFLATION ADJUSTMENT.] The earned income amounts 471.33 used to calculate the credit and the income thresholds at which 471.34 the maximum credit begins to be reduced in subdivision 1 must be 471.35 adjusted for inflation. The commissioner shalladjust the471.36earned income and threshold amounts by the percentage determined472.1under section 290.06, subdivision 2d, for the taxable year.make 472.2 the inflation adjustments in accordance with section 1f of the 472.3 Internal Revenue Code except that for the purposes of this 472.4 subdivision the percentage increase shall be determined from the 472.5 year starting September 1, 1999, and ending August 31, 2000, as 472.6 the base year for adjusting for inflation for the tax year 472.7 beginning after December 31, 2000. The determination of the 472.8 commissioner under this subdivision is not a rule under the 472.9 Administrative Procedures Act. 472.10[EFFECTIVE DATE.] This section is effective for tax years 472.11 beginning after December 31, 2000. 472.12 Sec. 8. Minnesota Statutes 2000, section 290.0921, 472.13 subdivision 3, is amended to read: 472.14 Subd. 3. [ALTERNATIVE MINIMUM TAXABLE INCOME.] 472.15 "Alternative minimum taxable income" is Minnesota net income as 472.16 defined in section 290.01, subdivision 19, and includes the 472.17 adjustments and tax preference items in sections 56, 57, 58, and 472.18 59(d), (e), (f), and (h) of the Internal Revenue Code. If a 472.19 corporation files a separate company Minnesota tax return, the 472.20 minimum tax must be computed on a separate company basis. If a 472.21 corporation is part of a tax group filing a unitary return, the 472.22 minimum tax must be computed on a unitary basis. The following 472.23 adjustments must be made. 472.24 (1) For purposes of the depreciation adjustments under 472.25 section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 472.26 the basis for depreciable property placed in service in a 472.27 taxable year beginning before January 1, 1990, is the adjusted 472.28 basis for federal income tax purposes, including any 472.29 modification made in a taxable year under section 290.01, 472.30 subdivision 19e, or Minnesota Statutes 1986, section 290.09, 472.31 subdivision 7, paragraph (c). 472.32 (2) For taxable years beginning after December 31, 2000, 472.33 the amount of any remaining modification made under section 472.34 290.01, subdivision 19e, or Minnesota Statutes 1986, section 472.35 290.09, subdivision 7, paragraph (c), not previously deducted is 472.36 a depreciation allowance in the first taxable year after 473.1 December 31, 2000. 473.2 (3) The alternative tax net operating loss deduction under 473.3 sections 56(a)(4) and 56(d) of the Internal Revenue Code does 473.4 not apply. 473.5(3)(4) The special rule for certain dividends under 473.6 section 56(g)(4)(C)(ii) of the Internal Revenue Code does not 473.7 apply. 473.8(4)(5) The special rule for dividends from section 936 473.9 companies under section 56(g)(4)(C)(iii) does not apply. 473.10(5)(6) The tax preference for depletion under section 473.11 57(a)(1) of the Internal Revenue Code does not apply. 473.12(6)(7) The tax preference for intangible drilling costs 473.13 under section 57(a)(2) of the Internal Revenue Code must be 473.14 calculated without regard to subparagraph (E) and the 473.15 subtraction under section 290.01, subdivision 19d, clause (4). 473.16(7)(8) The tax preference for tax exempt interest under 473.17 section 57(a)(5) of the Internal Revenue Code does not apply. 473.18(8)(9) The tax preference for charitable contributions of 473.19 appreciated property under section 57(a)(6) of the Internal 473.20 Revenue Code does not apply. 473.21(9)(10) For purposes of calculating the tax preference for 473.22 accelerated depreciation or amortization on certain property 473.23 placed in service before January 1, 1987, under section 57(a)(7) 473.24 of the Internal Revenue Code, the deduction allowable for the 473.25 taxable year is the deduction allowed under section 290.01, 473.26 subdivision 19e. 473.27 (11) For taxable years beginning after December 31, 2000, 473.28 the amount of any remaining modification made under section 473.29 290.01, subdivision 19e, not previously deducted is a 473.30 depreciation or amortization allowance in the first taxable year 473.31 after December 31, 2000. 473.32(10)(12) For purposes of calculating the adjustment for 473.33 adjusted current earnings in section 56(g) of the Internal 473.34 Revenue Code, the term "alternative minimum taxable income" as 473.35 it is used in section 56(g) of the Internal Revenue Code, means 473.36 alternative minimum taxable income as defined in this 474.1 subdivision, determined without regard to the adjustment for 474.2 adjusted current earnings in section 56(g) of the Internal 474.3 Revenue Code. 474.4(11)(13) For purposes of determining the amount of 474.5 adjusted current earnings under section 56(g)(3) of the Internal 474.6 Revenue Code, no adjustment shall be made under section 56(g)(4) 474.7 of the Internal Revenue Code with respect to (i) the amount of 474.8 foreign dividend gross-up subtracted as provided in section 474.9 290.01, subdivision 19d, clause (1), (ii) the amount of refunds 474.10 of income, excise, or franchise taxes subtracted as provided in 474.11 section 290.01, subdivision 19d, clause (10), or (iii) the 474.12 amount of royalties, fees or other like income subtracted as 474.13 provided in section 290.01, subdivision 19d, clause (11). 474.14 Items of tax preference must not be reduced below zero as a 474.15 result of the modifications in this subdivision. 474.16[EFFECTIVE DATE.] This section is effective the day 474.17 following final enactment. 474.18 Sec. 9. Minnesota Statutes 2000, section 290.35, 474.19 subdivision 2, is amended to read: 474.20 Subd. 2. [APPORTIONMENT OF TAXABLE NET INCOME.] The 474.21commissionerinsurance company shall computetherefrom theits 474.22 taxable net incomeof such companiesby assigning to this state 474.23 that proportionthereofof net income which the gross premiums 474.24 collected by them during the taxable year from old and new 474.25 business within this state bears to the total gross premiums 474.26 collected by them during that year from their entire old and new 474.27 business, including reinsurance premiums; provided, the 474.28commissionerinsurance company shall add to the taxable net 474.29 incomesoapportioned to this state the amount of any taxes on 474.30 premiums paid by the company by virtue of any law of this state 474.31 (other than the surcharge on premiums imposed by section 297I.10 474.32 and the surcharge imposed by section 168A.40, subdivision 3) 474.33 which shall have been deducted from gross income by the company 474.34 in arriving at its total net income. 474.35 (a) For purposes of determining the Minnesota apportionment 474.36 percentage, premiums from reinsurance contracts in connection 475.1 with property in or liability arising out of activity in, or in 475.2 connection with the lives or health of Minnesota residents shall 475.3 be assigned to Minnesota and premiums from reinsurance contracts 475.4 in connection with property in or liability arising out of 475.5 activity in, or in connection with the lives or health of 475.6 non-Minnesota residents shall be assigned outside of Minnesota. 475.7 Reinsurance premiums are presumed to be received for a Minnesota 475.8 risk and are assigned to Minnesota, if: 475.9 (1) the reinsurance contract is assumed for a company 475.10 domiciled in Minnesota; and 475.11 (2) the taxpayer, upon request of the commissioner, fails 475.12 to provide reliable records indicating the reinsured contract 475.13 covered non-Minnesota risks. 475.14 For purposes of this paragraph, "Minnesota risk" means coverage 475.15 in connection with property in or liability arising out of 475.16 activity in Minnesota, or in connection with the lives or health 475.17 of Minnesota residents. 475.18 (b) The apportionment method prescribed by paragraph (a) 475.19 shall be presumed to fairly and correctly determine the 475.20 taxpayer's taxable net income. If the method prescribed in 475.21 paragraph (a) does not fairly reflect all or any part of taxable 475.22 net income, the taxpayer may petition for or the commissioner 475.23 may require the determination of taxable net income by use of 475.24 another method if that method fairly reflects taxable net 475.25 income. A petition within the meaning of this section must be 475.26 filed by the taxpayer on such form as the commissioner shall 475.27 require. 475.28[EFFECTIVE DATE.] This section is effective the day 475.29 following final enactment. 475.30 Sec. 10. Minnesota Statutes 2000, section 290.92, 475.31 subdivision 23, is amended to read: 475.32 Subd. 23. [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 475.33 (1) The commissioner may, within five years after the date of 475.34 assessment of the tax, or if a lien has been filed under section 475.35 270.69, within the statutory period for enforcement of the lien, 475.36 give notice to any employer deriving income which has a taxable 476.1 situs in this state regardless of whether the income is exempt 476.2 from taxation, that an employee of that employer is delinquent 476.3 in a certain amount with respect to any state taxes, including 476.4 penalties, interest, and costs. The commissioner can proceed 476.5 under this subdivision only if the tax is uncontested or if the 476.6 time for appeal of the tax has expired. The commissioner shall 476.7 not proceed under this subdivision until the expiration of 30 476.8 days after mailing to the taxpayer, at the taxpayer's last known 476.9 address, a written notice of (a) the amount of taxes, interest, 476.10 and penalties due from the taxpayer and demand for their 476.11 payment, and (b) the commissioner's intention to require 476.12 additional withholding by the taxpayer's employer pursuant to 476.13 this subdivision. The effect of the notice shall expire180476.14daysone year after it has been mailed to the taxpayer provided 476.15 that the notice may be renewed by mailing a new notice which is 476.16 in accordance with this subdivision. The renewed notice shall 476.17 have the effect of reinstating the priority of the original 476.18 claim. The notice to the taxpayer shall be in substantially the 476.19 same form as that provided in section 571.72. The notice shall 476.20 further inform the taxpayer of the wage exemptions contained in 476.21 section 550.37, subdivision 14. If no statement of exemption is 476.22 received by the commissioner within 30 days from the mailing of 476.23 the notice, the commissioner may proceed under this 476.24 subdivision. The notice to the taxpayer's employer may be 476.25 served by mail or by delivery by an employee of the department 476.26 of revenue and shall be in substantially the same form as 476.27 provided in section 571.75. Upon receipt of notice, the 476.28 employer shall withhold from compensation due or to become due 476.29 to the employee, the total amount shown by the notice, subject 476.30 to the provisions of section 571.922. The employer shall 476.31 continue to withhold each pay period until the notice is 476.32 released by the commissioner under section 270.709. Upon 476.33 receipt of notice by the employer, the claim of the state of 476.34 Minnesota shall have priority over any subsequent garnishments 476.35 or wage assignments. The commissioner may arrange between the 476.36 employer and the employee for withholding a portion of the total 477.1 amount due the employee each pay period, until the total amount 477.2 shown by the notice plus accrued interest has been withheld. 477.3 The "compensation due" any employee is defined in 477.4 accordance with the provisions of section 571.921. The maximum 477.5 withholding allowed under this subdivision for any one pay 477.6 period shall be decreased by any amounts payable pursuant to a 477.7 garnishment action with respect to which the employer was served 477.8 prior to being served with the notice of delinquency and any 477.9 amounts covered by any irrevocable and previously effective 477.10 assignment of wages; the employer shall give notice to the 477.11 department of the amounts and the facts relating to such 477.12 assignments within ten days after the service of the notice of 477.13 delinquency on the form provided by the department of revenue as 477.14 noted in this subdivision. 477.15 (2) If the employee ceases to be employed by the employer 477.16 before the full amount set forth in a notice of delinquency plus 477.17 accrued interest has been withheld, the employer shall 477.18 immediately notify the commissioner in writing of the 477.19 termination date of the employee and the total amount withheld. 477.20 No employer may discharge any employee by reason of the fact 477.21 that the commissioner has proceeded under this subdivision. If 477.22 an employer discharges an employee in violation of this 477.23 provision, the employee shall have the same remedy as provided 477.24 in section 571.927, subdivision 2. 477.25 (3) Within ten days after the expiration of such pay 477.26 period, the employer shall remit to the commissioner, on a form 477.27 and in the manner prescribed by the commissioner, the amount 477.28 withheld during each pay period under this subdivision. 477.29 (4) Clauses (1), (2), and (3), except provisions imposing a 477.30 liability on the employer for failure to withhold or remit, 477.31 shall apply to cases in which the employer is the United States 477.32 or any instrumentality thereof or this state or any municipality 477.33 or other subordinate unit thereof. 477.34 (5) The commissioner shall refund to the employee excess 477.35 amounts withheld from the employee under this subdivision. If 477.36 any excess results from payments by the employer because of 478.1 willful failure to withhold or remit as prescribed in clause 478.2 (3), the excess attributable to the employer's payment shall be 478.3 refunded to the employer. 478.4 (6) Employers required to withhold delinquent taxes, 478.5 penalties, interest, and costs under this subdivision shall not 478.6 be required to compute any additional interest, costs or other 478.7 charges to be withheld. 478.8 (7) The collection remedy provided to the commissioner by 478.9 this subdivision shall have the same legal effect as if it were 478.10 a levy made pursuant to section 270.70. 478.11[EFFECTIVE DATE.] This section is effective for notices of 478.12 intent mailed on or after the day following final enactment. 478.13 Sec. 11. [REPEALER.] 478.14 Minnesota Statutes 2000, sections 290.095, subdivision 7; 478.15 290.23; 290.25; and 290.31, subdivisions 2, 2a, 3, 4, 5, and 19, 478.16 are repealed. 478.17[EFFECTIVE DATE.] This section is effective for tax years 478.18 beginning after December 31, 2000. 478.19 ARTICLE 21 478.20 DEPARTMENT PROPERTY TAXES 478.21 Section 1. Minnesota Statutes 2000, section 273.072, 478.22 subdivision 1, is amended to read: 478.23 Subdivision 1. Any county and any city or town lying 478.24 wholly or partially within the county and constituting a 478.25 separate assessment district may, by agreement entered into 478.26 under section 471.59and approved by the commissioner of478.27revenue, provide for the assessment of property in the 478.28 municipality or town by the county assessor. Any two or more 478.29 cities or towns constituting separate assessment districts,478.30whether their assessors are elective or appointive,may enter 478.31 into an agreement under section 471.59 for the assessment of 478.32 property in the contracting units by the assessor of one of the 478.33 units or by an assessor who is jointly employed. 478.34[EFFECTIVE DATE.] This section is effective the day 478.35 following final enactment. 478.36 Sec. 2. Minnesota Statutes 2000, section 273.1104, 479.1 subdivision 2, is amended to read: 479.2 Subd. 2. [NOTICE OF MARKET VALUE.] On or before May 1 in 479.3 each year, the commissioner shall send to each person subject to 479.4 the tax on unmined iron ores and to each taxing district 479.5 affected, a notice of the market value of the unmined ores as 479.6 determined by the commissionerprior to adjustment under479.7subdivision 1. Said notice shall be sent by mail directed to 479.8 such person at the address given in the report filed and the 479.9 assessor of such taxing district, but the validity of the tax 479.10 shall not be affected by the failure of the commissioner of 479.11 revenue to mail such notice or the failure of the person subject 479.12 to the tax to receive it. 479.13 On the first secular day following May 20, the commissioner 479.14 of revenue shall hold a hearing which may be adjourned from day 479.15 to day. All relevant and material evidence having probative 479.16 value with respect to the issues shall be submitted at the 479.17 hearing and such hearing shall not be a "contested case" within 479.18 the meaning of section 14.02, subdivision 3. Every person 479.19 subject to such tax may at such hearing present evidence and 479.20 argument on any matter bearing upon the validity or correctness 479.21 of the tax determined to be due, and the commissioner of revenue 479.22 shall review the determination of such tax. 479.23[EFFECTIVE DATE.] This section is effective the day 479.24 following final enactment. 479.25 Sec. 3. Minnesota Statutes 2000, section 273.111, 479.26 subdivision 4, is amended to read: 479.27 Subd. 4. [DETERMINATION OF VALUE.] The value of any real 479.28 estate described in subdivision 3 shall upon timely application 479.29 by the owner, in the manner provided in subdivision 8, be 479.30 determined solely with reference to its appropriate agricultural 479.31 classification and value notwithstanding sections 272.03, 479.32 subdivision 8, and 273.11. In determining the value for ad 479.33 valorem tax purposes, the assessor shall use sales dataobtained479.34fromfor agricultural lands located outside the seven 479.35 metropolitan countiesbut within the region used for computing479.36the range of values under section 273.11, subdivision 10. The480.1sales shall havehaving similar soil types, number of degree 480.2 days, and other similar agricultural characteristicsas480.3contained in section 273.11, subdivision 10. Furthermore, the 480.4 assessor shall not consider any added values resulting from 480.5 nonagricultural factors. 480.6[EFFECTIVE DATE.] This section is effective the day 480.7 following final enactment. 480.8 Sec. 4. Minnesota Statutes 2000, section 273.124, 480.9 subdivision 13, is amended to read: 480.10 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 480.11 the homestead requirements under subdivision 1 must file a 480.12 homestead application with the county assessor to initially 480.13 obtain homestead classification. 480.14 (b) On or before January 2, 1993, each county assessor 480.15 shall mail a homestead application to the owner of each parcel 480.16 of property within the county which was classified as homestead 480.17 for the 1992 assessment year. The format and contents of a 480.18 uniform homestead application shall be prescribed by the 480.19 commissioner of revenue. The commissioner shall consult with 480.20 the chairs of the house and senate tax committees on the 480.21 contents of the homestead application form. The application 480.22 must clearly inform the taxpayer that this application must be 480.23 signed by all owners who occupy the property or by the 480.24 qualifying relative and returned to the county assessor in order 480.25 for the property to continue receiving homestead treatment. The 480.26 envelope containing the homestead application shall clearly 480.27 identify its contents and alert the taxpayer of its necessary 480.28 immediate response. 480.29 (c) Every property owner applying for homestead 480.30 classification must furnish to the county assessor the social 480.31 security number of each occupant who is listed as an owner of 480.32 the property on the deed of record, the name and address of each 480.33 owner who does not occupy the property, and the name and social 480.34 security number of each owner's spouse who occupies the 480.35 property. The application must be signed by each owner who 480.36 occupies the property and by each owner's spouse who occupies 481.1 the property, or, in the case of property that qualifies as a 481.2 homestead under subdivision 1, paragraph (c), by the qualifying 481.3 relative. 481.4 If a property owner occupies a homestead, the property 481.5 owner's spouse may not claim another property as a homestead 481.6 unless the property owner and the property owner's spouse file 481.7 with the assessor an affidavit or other proof required by the 481.8 assessor stating that the property qualifies as a homestead 481.9 under subdivision 1, paragraph (e). 481.10 Owners or spouses occupying residences owned by their 481.11 spouses and previously occupied with the other spouse, either of 481.12 whom fail to include the other spouse's name and social security 481.13 number on the homestead application or provide the affidavits or 481.14 other proof requested, will be deemed to have elected to receive 481.15 only partial homestead treatment of their residence. The 481.16 remainder of the residence will be classified as nonhomestead 481.17 residential. When an owner or spouse's name and social security 481.18 number appear on homestead applications for two separate 481.19 residences and only one application is signed, the owner or 481.20 spouse will be deemed to have elected to homestead the residence 481.21 for which the application was signed. 481.22 The social security numbers or affidavits or other proofs 481.23 of the property owners and spouses are private data on 481.24 individuals as defined by section 13.02, subdivision 12, but, 481.25 notwithstanding that section, the private data may be disclosed 481.26 to the commissioner of revenue, or, for purposes of proceeding 481.27 under the Revenue Recapture Act to recover personal property 481.28 taxes owing, to the county treasurer. 481.29 (d) If residential real estate is occupied and used for 481.30 purposes of a homestead by a relative of the owner and qualifies 481.31 for a homestead under subdivision 1, paragraph (c), in order for 481.32 the property to receive homestead status, a homestead 481.33 application must be filed with the assessor. The social 481.34 security number of each relative occupying the property and the 481.35 social security number of each owner who is related to an 481.36 occupant of the property shall be required on the homestead 482.1 application filed under this subdivision. If a different 482.2 relative of the owner subsequently occupies the property, the 482.3 owner of the property must notify the assessor within 30 days of 482.4 the change in occupancy. The social security number of a 482.5 relative occupying the property is private data on individuals 482.6 as defined by section 13.02, subdivision 12, but may be 482.7 disclosed to the commissioner of revenue. 482.8 (e) The homestead application shall also notify the 482.9 property owners that the application filed under this section 482.10 will not be mailed annually and that if the property is granted 482.11 homestead status for the 1993 assessment, or any assessment year 482.12 thereafter, that same property shall remain classified as 482.13 homestead until the property is sold or transferred to another 482.14 person, or the owners, the spouse of the owner, or the relatives 482.15 no longer use the property as their homestead. Upon the sale or 482.16 transfer of the homestead property, a certificate of value must 482.17 be timely filed with the county auditor as provided under 482.18 section 272.115. Failure to notify the assessor within 30 days 482.19 that the property has been sold, transferred, or that the owner, 482.20 the spouse of the owner, or the relative is no longer occupying 482.21 the property as a homestead, shall result in the penalty 482.22 provided under this subdivision and the property will lose its 482.23 current homestead status. 482.24 (f) If the homestead application is not returned within 30 482.25 days, the county will send a second application to the present 482.26 owners of record. The notice of proposed property taxes 482.27 prepared under section 275.065, subdivision 3, shall reflect the 482.28 property's classification. Beginning with assessment year 1993 482.29 for all properties, if a homestead application has not been 482.30 filed with the county by December 15, the assessor shall 482.31 classify the property as nonhomestead for the current assessment 482.32 year for taxes payable in the following year, provided that the 482.33 owner may be entitled to receive the homestead classification by 482.34 proper application under section 375.192. 482.35 (g) At the request of the commissioner, each county must 482.36 give the commissioner a list that includes the name and social 483.1 security number of each property owner and the property owner's 483.2 spouse occupying the property, or relative of a property owner, 483.3 applying for homestead classification under this subdivision. 483.4 The commissioner shall use the information provided on the lists 483.5 as appropriate under the law, including for the detection of 483.6 improper claims by owners, or relatives of owners, under chapter 483.7 290A. 483.8 (h) If the commissioner finds that a property owner may be 483.9 claiming a fraudulent homestead, the commissioner shall notify 483.10 the appropriate counties. Within 90 days of the notification, 483.11 the county assessor shall investigate to determine if the 483.12 homestead classification was properly claimed. If the property 483.13 owner does not qualify, the county assessor shall notify the 483.14 county auditor who will determine the amount of homestead 483.15 benefits that had been improperly allowed. For the purpose of 483.16 this section, "homestead benefits" means the tax reduction 483.17 resulting from the classification as a homestead under section 483.18 273.13, the taconite homestead credit under section 273.135, the 483.19 education homestead and agricultural credits under section 483.20 273.1382, and the supplemental homestead credit under section 483.21 273.1391. 483.22 The county auditor shall send a notice to the person who 483.23 owned the affected property at the time the homestead 483.24 application related to the improper homestead was filed, 483.25 demanding reimbursement of the homestead benefits plus a penalty 483.26 equal to 100 percent of the homestead benefits. The person 483.27 notified may appeal the county's determination by serving copies 483.28 of a petition for review with county officials as provided in 483.29 section 278.01 and filing proof of service as provided in 483.30 section 278.01 with the Minnesota tax court within 60 days of 483.31 the date of the notice from the county. Procedurally, the 483.32 appeal is governed by the provisions in chapter 271 which apply 483.33 to the appeal of a property tax assessment or levy, but without 483.34 requiring any prepayment of the amount in controversy. If the 483.35 amount of homestead benefits and penalty is not paid within 60 483.36 days, and if no appeal has been filed, the county auditor shall 484.1 certify the amount of taxes and penalty to the county 484.2 treasurer. The county treasurer will add interest to the unpaid 484.3 homestead benefits and penalty amounts at the rate provided in 484.4 section 279.03 for real property taxes becoming delinquent in 484.5 the calendar year during which the amount remains unpaid. 484.6 Interest may be assessed for the period beginning 60 days after 484.7 demand for payment was made. 484.8 If the person notified is the current owner of the 484.9 property, the treasurer may add the total amount of homestead 484.10 benefits, penalty, interest, and costs to the ad valorem taxes 484.11 otherwise payable on the property by including the amounts on 484.12 the property tax statements under section 276.04, subdivision 484.13 3. The amounts added under this paragraph to the ad valorem 484.14 taxes shall include interest accrued through December 31 of the 484.15 year preceding the taxes payable year for which the amounts are 484.16 first added. These amounts, when added to the property tax 484.17 statement, become subject to all the laws for the enforcement of 484.18 real or personal property taxes for that year, and for any 484.19 subsequent year. 484.20 If the person notified is not the current owner of the 484.21 property, the treasurer may collect the amounts due under the 484.22 Revenue Recapture Act in chapter 270A, or use any of the powers 484.23 granted in sections 277.20 and 277.21 without exclusion, to 484.24 enforce payment of the homestead benefits, penalty, interest, 484.25 and costs, as if those amounts were delinquent tax obligations 484.26 of the person who owned the property at the time the application 484.27 related to the improperly allowed homestead was filed. The 484.28 treasurer may relieve a prior owner of personal liability for 484.29 the homestead benefits, penalty, interest, and costs, and 484.30 instead extend those amounts on the tax lists against the 484.31 property as provided in this paragraph to the extent that the 484.32 current owner agrees in writing. On all demands, billings, 484.33 property tax statements, and related correspondence, the county 484.34 must list and state separately the amounts of homestead 484.35 benefits, penalty, interest and costs being demanded, billed or 484.36 assessed. 485.1 (i) Any amount of homestead benefits recovered by the 485.2 county from the property owner shall be distributed to the 485.3 county, city or town, and school district where the property is 485.4 located in the same proportion that each taxing district's levy 485.5 was to the total of the three taxing districts' levy for the 485.6 current year. Any amount recovered attributable to taconite 485.7 homestead credit shall be transmitted to the St. Louis county 485.8 auditor to be deposited in the taconite property tax relief 485.9 account. Any amount recovered that is attributable to 485.10 supplemental homestead credit is to be transmitted to the 485.11 commissioner of revenue for deposit in the general fund of the 485.12 state treasury. The total amount of penalty collected must be 485.13 deposited in the county general fund. 485.14 (j) If a property owner has applied for more than one 485.15 homestead and the county assessors cannot determine which 485.16 property should be classified as homestead, the county assessors 485.17 will refer the information to the commissioner. The 485.18 commissioner shall make the determination and notify the 485.19 counties within 60 days. 485.20 (k) In addition to lists of homestead properties, the 485.21 commissioner may ask the counties to furnish lists of all 485.22 properties and the record owners. The social security numbers 485.23 and federal identification numbers that are maintained by a 485.24 county or city assessor for property tax administration 485.25 purposes, and that may appear on the lists retain their 485.26 classification as private or nonpublic data; but may be viewed, 485.27 accessed, and used by the county auditor or treasurer of the 485.28 same county for the limited purpose of assisting the 485.29 commissioner in the preparation of microdata samples under 485.30 section 270.0681. 485.31[EFFECTIVE DATE.] This section is effective for homestead 485.32 applications submitted on or after the day following final 485.33 enactment. 485.34 Sec. 5. Minnesota Statutes 2000, section 282.04, 485.35 subdivision 2, is amended to read: 485.36 Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 486.1 DEMOLITION.] Before the sale of a parcel of forfeited land the 486.2 county auditor may, with the approval of the county board of 486.3 commissioners, provide for the repair and improvement of any 486.4 building or structure located upon the parcel, and may provide 486.5 for maintenance of tax-forfeited lands, if it is determined by 486.6 the county board that such repairs, improvements, or maintenance 486.7 are necessary for the operation, use, preservation and safety of 486.8 the building or structure. If so authorized by the county 486.9 board, the county auditor may insure the building or structure 486.10 against loss or damage resulting from fire or windstorm, may 486.11 purchase workers' compensation insurance to insure the county 486.12 against claims for injury to the persons employed in the 486.13 building or structure by the county, and may insure the county, 486.14 its officers and employees against claims for injuries to 486.15 persons or property because of the management, use or operation 486.16 of the building or structure. The county auditor may, with the 486.17 approval of the county board, provide for the demolition of the 486.18 building or structure, which has been determined by the county 486.19 board to be within the purview of section 299F.10, and for the 486.20 sale of salvaged materials from the building or structure. The 486.21 county auditor, with the approval of the county board, may 486.22 provide for the sale of abandoned personal propertyunder either486.23chapter 345 or 566, as appropriate. The sale may be made by the 486.24 sheriff using the procedures for the sale of abandoned property 486.25 in section 345.15 or by the county auditor using the procedures 486.26 for the sale of abandoned property in section 504B.271. The net 486.27 proceeds from any sale of the personal property, salvaged 486.28 materials, timber or other products, or leases made under this 486.29 law must be deposited in the forfeited tax sale fund and must be 486.30 distributed in the same manner as if the parcel had been sold. 486.31 The county auditor, with the approval of the county board, 486.32 may provide for the demolition of any structure on tax-forfeited 486.33 lands, if in the opinion of the county board, the county 486.34 auditor, and the land commissioner, if there is one, the sale of 486.35 the land with the structure on it, or the continued existence of 486.36 the structure by reason of age, dilapidated condition or 487.1 excessive size as compared with nearby structures, will result 487.2 in a material lessening of net tax capacities of real estate in 487.3 the vicinity of the tax-forfeited lands, or if the demolition of 487.4 the structure or structures will aid in disposing of the 487.5 tax-forfeited property. 487.6 Before the sale of a parcel of forfeited land located in an 487.7 urban area, the county auditor may with the approval of the 487.8 county board provide for the grading of the land by filling or 487.9 the removal of any surplus material from it. If the physical 487.10 condition of forfeited lands is such that a reasonable grading 487.11 of the lands is necessary for the protection and preservation of 487.12 the property of any adjoining owner, the adjoining property 487.13 owner or owners may apply to the county board to have the 487.14 grading done. If, after considering the application, the county 487.15 board believes that the grading will enhance the value of the 487.16 forfeited lands commensurate with the cost involved, it may 487.17 approve it, and the work must be performed under the supervision 487.18 of the county or city engineer, as the case may be, and the 487.19 expense paid from the forfeited tax sale fund. 487.20 Sec. 6. Minnesota Statutes 2000, section 290A.03, 487.21 subdivision 12, is amended to read: 487.22 Subd. 12. [GROSS RENT.] (a) "Gross rent" means rental paid 487.23 for the right of occupancy, at arms-length, of a homestead, 487.24 exclusive of charges for any medical services furnished by the 487.25 landlord as a part of the rental agreement, whether expressly 487.26 set out in the rental agreement or not. 487.27 (b) The gross rent of a resident of a nursing home or 487.28 intermediate care facility is $350 per month. The gross rent of 487.29 a resident of an adult foster care home is $550 per month. 487.30 Beginning for rent paid in 2002, the commissioner shall annually 487.31 adjust for inflation the gross rent amounts stated in this 487.32 paragraph. The adjustment must be made in accordance with 487.33 section 1f of the Internal Revenue Code, except that for 487.34 purposes of this paragraph the percentage increase shall be 487.35 determined from the year ending on June 30, 2001, to the year 487.36 ending on June 30 of the year in which the rent is paid. The 488.1 commissioner shall round the gross rents to the nearest $10 488.2 amount. If the amount ends in $5, the commissioner shall round 488.3 it up to the next $10 amount. The determination of the 488.4 commissioner under this paragraph is not a rule under the 488.5 Administrative Procedure Act. 488.6 (c) If the landlord and tenant have not dealt with each 488.7 other at arms-length and the commissioner determines that the 488.8 gross rent charged was excessive, the commissioner may adjust 488.9 the gross rent to a reasonable amount for purposes of this 488.10 chapter. 488.11 (d) Any amount paid by a claimant residing in property 488.12 assessed pursuant to section 273.124, subdivision 3, 4, 5, or 6 488.13 for occupancy in that property shall be excluded from gross rent 488.14 for purposes of this chapter. However, property taxes imputed 488.15 to the homestead of the claimant or the dwelling unit occupied 488.16 by the claimant that qualifies for homestead treatment pursuant 488.17 to section 273.124, subdivision 3, 4, 5, or 6 shall be included 488.18 within the term "property taxes payable" as defined in 488.19 subdivision 13, notwithstanding the fact that ownership is not 488.20 in the name of the claimant. 488.21[EFFECTIVE DATE.] This section is effective for refunds 488.22 based on rent paid after December 31, 2000. 488.23 Sec. 7. Minnesota Statutes 2000, section 290A.15, is 488.24 amended to read: 488.25 290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.] 488.26 The amount of any claim otherwise payable under this 488.27 chapter may be applied by the commissioner against any 488.28 delinquent tax liability ofthe claimant or spouse of the488.29claimant payable to the department of revenueany member of the 488.30 household. If there are two members of the household, the 488.31 commissioner may apply only one-half of a refund to the separate 488.32 liability of either member of the household. 488.33[EFFECTIVE DATE.] This section is effective beginning with 488.34 refunds paid on or after July 1, 2001. 488.35 Sec. 8. Minnesota Statutes 2000, section 477A.011, 488.36 subdivision 36, is amended to read: 489.1 Subd. 36. [CITY AID BASE.] (a) Except as provided in 489.2 paragraphs (b) to (n), "city aid base" means, for each city, the 489.3 sum of the local government aid and equalization aid it was 489.4 originally certified to receive in calendar year 1993 under 489.5 Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5, 489.6 and the amount of disparity reduction aid it received in 489.7 calendar year 1993 under Minnesota Statutes 1992, section 489.8 273.1398, subdivision 3. 489.9 (b) For aids payable in 1996 and thereafter, a city that in 489.10 1992 or 1993 transferred an amount from governmental funds to 489.11 its sewer and water fund, which amount exceeded its net levy for 489.12 taxes payable in the year in which the transfer occurred, has a 489.13 "city aid base" equal to the sum of (i) its city aid base, as 489.14 calculated under paragraph (a), and (ii) one-half of the 489.15 difference between its city aid distribution under section 489.16 477A.013, subdivision 9, for aids payable in 1995 and its city 489.17 aid base for aids payable in 1995. 489.18 (c) The city aid base for any city with a population less 489.19 than 500 is increased by $40,000 for aids payable in calendar 489.20 year 1995 and thereafter, and the maximum amount of total aid it 489.21 may receive under section 477A.013, subdivision 9, paragraph 489.22 (c), is also increased by $40,000 for aids payable in calendar 489.23 year 1995 only, provided that: 489.24 (i) the average total tax capacity rate for taxes payable 489.25 in 1995 exceeds 200 percent; 489.26 (ii) the city portion of the tax capacity rate exceeds 100 489.27 percent; and 489.28 (iii) its city aid base is less than $60 per capita. 489.29 (d) The city aid base for a city is increased by $20,000 in 489.30 1998 and thereafter and the maximum amount of total aid it may 489.31 receive under section 477A.013, subdivision 9, paragraph (c), is 489.32 also increased by $20,000 in calendar year 1998 only, provided 489.33 that: 489.34 (i) the city has a population in 1994 of 2,500 or more; 489.35 (ii) the city is located in a county, outside of the 489.36 metropolitan area, which contains a city of the first class; 490.1 (iii) the city's net tax capacity used in calculating its 490.2 1996 aid under section 477A.013 is less than $400 per capita; 490.3 and 490.4 (iv) at least four percent of the total net tax capacity, 490.5 for taxes payable in 1996, of property located in the city is 490.6 classified as railroad property. 490.7 (e) The city aid base for a city is increased by $200,000 490.8 in 1999 and thereafter and the maximum amount of total aid it 490.9 may receive under section 477A.013, subdivision 9, paragraph 490.10 (c), is also increased by $200,000 in calendar year 1999 only, 490.11 provided that: 490.12 (i) the city was incorporated as a statutory city after 490.13 December 1, 1993; 490.14 (ii) its city aid base does not exceed $5,600; and 490.15 (iii) the city had a population in 1996 of 5,000 or more. 490.16 (f) The city aid base for a city is increased by $450,000 490.17 in 1999 to 2008 and the maximum amount of total aid it may 490.18 receive under section 477A.013, subdivision 9, paragraph (c), is 490.19 also increased by $450,000 in calendar year 1999 only, provided 490.20 that: 490.21 (i) the city had a population in 1996 of at least 50,000; 490.22 (ii) its population had increased by at least 40 percent in 490.23 the ten-year period ending in 1996; and 490.24 (iii) its city's net tax capacity for aids payable in 1998 490.25 is less than $700 per capita. 490.26 (g) Beginning in20022004, the city aid base for a city is 490.27 equal to the sum of its city aid base in20012003 and the 490.28 amount of additional aid it was certified to receive under 490.29 section 477A.06 in20012003. For20022004 only, the maximum 490.30 amount of total aid a city may receive under section 477A.013, 490.31 subdivision 9, paragraph (c), is also increased by the amount it 490.32 was certified to receive under section 477A.06 in20012003. 490.33 (h) The city aid base for a city is increased by $150,000 490.34 for aids payable in 2000 and thereafter, and the maximum amount 490.35 of total aid it may receive under section 477A.013, subdivision 490.36 9, paragraph (c), is also increased by $150,000 in calendar year 491.1 2000 only, provided that: 491.2 (1) the city has a population that is greater than 1,000 491.3 and less than 2,500; 491.4 (2) its commercial and industrial percentage for aids 491.5 payable in 1999 is greater than 45 percent; and 491.6 (3) the total market value of all commercial and industrial 491.7 property in the city for assessment year 1999 is at least 15 491.8 percent less than the total market value of all commercial and 491.9 industrial property in the city for assessment year 1998. 491.10 (i) The city aid base for a city is increased by $200,000 491.11 in 2000 and thereafter, and the maximum amount of total aid it 491.12 may receive under section 477A.013, subdivision 9, paragraph 491.13 (c), is also increased by $200,000 in calendar year 2000 only, 491.14 provided that: 491.15 (1) the city had a population in 1997 of 2,500 or more; 491.16 (2) the net tax capacity of the city used in calculating 491.17 its 1999 aid under section 477A.013 is less than $650 per 491.18 capita; 491.19 (3) the pre-1940 housing percentage of the city used in 491.20 calculating 1999 aid under section 477A.013 is greater than 12 491.21 percent; 491.22 (4) the 1999 local government aid of the city under section 491.23 477A.013 is less than 20 percent of the amount that the formula 491.24 aid of the city would have been if the need increase percentage 491.25 was 100 percent; and 491.26 (5) the city aid base of the city used in calculating aid 491.27 under section 477A.013 is less than $7 per capita. 491.28 (j) The city aid base for a city is increased by $225,000 491.29 in calendar years 2000 to 2002 and the maximum amount of total 491.30 aid it may receive under section 477A.013, subdivision 9, 491.31 paragraph (c), is also increased by $225,000 in calendar year 491.32 2000 only, provided that: 491.33 (1) the city had a population of at least 5,000; 491.34 (2) its population had increased by at least 50 percent in 491.35 the ten-year period ending in 1997; 491.36 (3) the city is located outside of the Minneapolis-St. Paul 492.1 metropolitan statistical area as defined by the United States 492.2 Bureau of the Census; and 492.3 (4) the city received less than $30 per capita in aid under 492.4 section 477A.013, subdivision 9, for aids payable in 1999. 492.5 (k) The city aid base for a city is increased by $102,000 492.6 in 2000 and thereafter, and the maximum amount of total aid it 492.7 may receive under section 477A.013, subdivision 9, paragraph 492.8 (c), is also increased by $102,000 in calendar year 2000 only, 492.9 provided that: 492.10 (1) the city has a population in 1997 of 2,000 or more; 492.11 (2) the net tax capacity of the city used in calculating 492.12 its 1999 aid under section 477A.013 is less than $455 per 492.13 capita; 492.14 (3) the net levy of the city used in calculating 1999 aid 492.15 under section 477A.013 is greater than $195 per capita; and 492.16 (4) the 1999 local government aid of the city under section 492.17 477A.013 is less than 38 percent of the amount that the formula 492.18 aid of the city would have been if the need increase percentage 492.19 was 100 percent. 492.20 (l) The city aid base for a city is increased by $32,000 in 492.21 2001 and thereafter, and the maximum amount of total aid it may 492.22 receive under section 477A.013, subdivision 9, paragraph (c), is 492.23 also increased by $32,000 in calendar year 2001 only, provided 492.24 that: 492.25 (1) the city has a population in 1998 that is greater than 492.26 200 but less than 500; 492.27 (2) the city's revenue need used in calculating aids 492.28 payable in 2000 was greater than $200 per capita; 492.29 (3) the city net tax capacity for the city used in 492.30 calculating aids available in 2000 was equal to or less than 492.31 $200 per capita; 492.32 (4) the city aid base of the city used in calculating aid 492.33 under section 477A.013 is less than $65 per capita; and 492.34 (5) the city's formula aid for aids payable in 2000 was 492.35 greater than zero. 492.36 (m) The city aid base for a city is increased by $7,200 in 493.1 2001 and thereafter, and the maximum amount of total aid it may 493.2 receive under section 477A.013, subdivision 9, paragraph (c), is 493.3 also increased by $7,200 in calendar year 2001 only, provided 493.4 that: 493.5 (1) the city had a population in 1998 that is greater than 493.6 200 but less than 500; 493.7 (2) the city's commercial industrial percentage used in 493.8 calculating aids payable in 2000 was less than ten percent; 493.9 (3) more than 25 percent of the city's population was 60 493.10 years old or older according to the 1990 census; 493.11 (4) the city aid base of the city used in calculating aid 493.12 under section 477A.013 is less than $15 per capita; and 493.13 (5) the city's formula aid for aids payable in 2000 was 493.14 greater than zero. 493.15 (n) The city aid base for a city is increased by $45,000 in 493.16 2001 and thereafter, and the maximum amount of total aid it may 493.17 receive under section 477A.013, subdivision 9, paragraph (c), is 493.18 also increased by $45,000 in calendar year 2001 only, provided 493.19 that: 493.20 (1) the net tax capacity of the city used in calculating 493.21 its 2000 aid under section 477A.013 is less than $810 per 493.22 capita; 493.23 (2) the population of the city declined more than two 493.24 percent between 1988 and 1998; 493.25 (3) the net levy of the city used in calculating 2000 aid 493.26 under section 477A.013 is greater than $240 per capita; and 493.27 (4) the city received less than $36 per capita in aid under 493.28 section 477A.013, subdivision 9, for aids payable in 2000. 493.29 ARTICLE 22 493.30 DEPARTMENT SALES AND USE TAXES 493.31 Section 1. Minnesota Statutes 2000, section 289A.50, 493.32 subdivision 2a, is amended to read: 493.33 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 493.34 has collected from a purchaser a tax on a transaction that is 493.35 not subject to the tax imposed by chapter 297A, the purchaser 493.36 may apply directly to the commissioner for a refund under this 494.1 section if: 494.2 (a) the purchaser is currently registered to collect and 494.3 remit the salesandtax or to remit the use tax; and 494.4 (b) the amount of the refund applied for exceeds $500. 494.5 The purchaser may not file more than two applications for 494.6 refund under this subdivision in a calendar year. 494.7[EFFECTIVE DATE.] This section is effective the day 494.8 following final enactment. 494.9 Sec. 2. Minnesota Statutes 2000, section 297A.01, 494.10 subdivision 3, is amended to read: 494.11 Subd. 3. A "sale" and a "purchase" includes, but is not 494.12 limited to, each of the following transactions: 494.13 (a) Any transfer of title or possession, or both, of 494.14 tangible personal property, whether absolutely or conditionally, 494.15 and the leasing of or the granting of a license to use or 494.16 consume tangible personal property other than manufactured homes 494.17 used for residential purposes for a continuous period of 30 days 494.18 or more, for a consideration in money or by exchange or barter; 494.19 (b) The production, fabrication, printing, or processing of 494.20 tangible personal property for a consideration for consumers who 494.21 furnish either directly or indirectly the materials used in the 494.22 production, fabrication, printing, or processing; 494.23 (c) The furnishing, preparing, or serving for a 494.24 consideration of food, meals, or drinks. "Sale" or "purchase" 494.25 does not include: 494.26 (1) meals or drinks served to patients, inmates, or persons 494.27 residing at hospitals, sanitariums, nursing homes, senior 494.28 citizens homes, and correctional, detention, and detoxification 494.29 facilities; 494.30 (2) meals or drinks purchased for and served exclusively to 494.31 individuals who are 60 years of age or over and their spouses or 494.32 to the handicapped and their spouses by governmental agencies, 494.33 nonprofit organizations, agencies, or churches or pursuant to 494.34 any program funded in whole or part through 42 USCA sections 494.35 3001 through 3045, wherever delivered, prepared or served; or 494.36 (3) meals and lunches served at public and private schools, 495.1 universities, or colleges. 495.2 Notwithstanding section 297A.25, subdivision 2, taxable food or 495.3 meals include, but are not limited to, the following: 495.4 (i) food or drinks sold by the retailer for immediate 495.5 consumption on the retailer's premises. Food and drinks sold 495.6 within a building or grounds which require an admission charge 495.7 for entrance are presumed to be sold for consumption on the 495.8 premises; 495.9 (ii) food or drinks prepared by the retailer for immediate 495.10 consumption either on or off the retailer's premises. For 495.11 purposes of this subdivision, "food or drinks prepared for 495.12 immediate consumption" includes any food product upon which an 495.13 act of preparation including, but not limited to, cooking, 495.14 mixing, sandwich making, blending, heating, or pouring has been 495.15 performed by the retailer so the food product may be immediately 495.16 consumed by the purchaser; 495.17 (iii) ice cream, ice milk, frozen yogurt products, or 495.18 frozen novelties sold in single or individual servings including 495.19 cones, sundaes, and snow cones. For purposes of this 495.20 subdivision, "single or individual servings" does not include 495.21 products when sold in bulk containers or bulk packaging; 495.22 (iv) soft drinks and other beverages including all 495.23 carbonated and noncarbonated beverages or drinks sold in liquid 495.24 form except nonalcoholic beverages or drinks which contain milk 495.25 or milk products, nonalcoholic beverages or drinks containing 15 495.26 or more percent fruit juice, and noncarbonated and 495.27 noneffervescent bottled water sold in individual containers of 495.28 one-half gallon or more in size; 495.29 (v) gum, candy, and candy products, except when sold for 495.30 fundraising purposes by a nonprofit organization that provides 495.31 educational and social activities primarily for young people 18 495.32 years of age and under; 495.33 (vi) ice; 495.34 (vii) all food sold from vending machines; 495.35 (viii) all food for immediate consumption sold from 495.36 concession stands and vehicles; 496.1 (ix) party trays; 496.2 (x) all meals and single servings of packaged snack food 496.3 sold in restaurants and bars; and 496.4 (xi) bakery products: 496.5 (A) prepared by the retailer for consumption on the 496.6 retailer's premises; 496.7 (B) sold at a place that charges admission; 496.8 (C) sold from vending machines; or 496.9 (D) sold in single or individual servings from concession 496.10 stands, vehicles, bars, and restaurants. For purposes of this 496.11 subdivision, "single or individual servings" does not include 496.12 products when sold in bulk containers or bulk packaging. 496.13 For purposes of this subdivision, "premises" means the 496.14 total space and facilities, including buildings, grounds, and 496.15 parking lots that are made available or that are available for 496.16 use by the retailer or customer for the purpose of sale or 496.17 consumption of prepared food and drinks. The premises of a 496.18 caterer is the place where the catered food or drinks are 496.19 served; 496.20 (d) The granting of the privilege of admission to places of 496.21 amusement, recreational areas, or athletic events, except a 496.22 world championship football game sponsored by the national 496.23 football league, and the privilege of having access to and the 496.24 use of amusement devices, tanning facilities, reducing salons, 496.25 steam baths, turkish baths, health clubs, and spas or athletic 496.26 facilities; 496.27 (e) The furnishing for a consideration of lodging and 496.28 related services by a hotel, rooming house, tourist court, motel 496.29 or trailer camp and of the granting of any similar license to 496.30 use real property other than the renting or leasing thereof for 496.31 a continuous period of 30 days or more; 496.32 (f) The furnishing for a consideration of electricity, gas, 496.33 water, or steam for use or consumption within this state, or 496.34 local exchange telephone service, intrastate toll service, and 496.35 interstate toll service, if that service originates from and is 496.36 charged to a telephone located in this state. Telephone service 497.1 does not include services purchased with prepaid telephone 497.2 calling cards. Telephone service includes paging services and 497.3 private communication service, as defined in United States Code, 497.4 title 26, section 4252(d), as amended through December 31, 1991, 497.5 except for private communication service purchased by an agent 497.6 acting on behalf of the state lottery. The furnishing for a 497.7 consideration of access to telephone services by a hotel to its 497.8 guests is a sale under this clause. Sales by municipal 497.9 corporations in a proprietary capacity are included in the 497.10 provisions of this clause. The furnishing of water and sewer 497.11 services for residential use shall not be considered a sale. 497.12 The sale of natural gas to be used as a fuel in vehicles 497.13 propelled by natural gas shall not be considered a sale for the 497.14 purposes of this section; 497.15 (g) The furnishing for a consideration of cable television 497.16 services, including charges for basic service, charges for 497.17 premium service, and any other charges for any other 497.18 pay-per-view, monthly, or similar television services; 497.19 (h) The furnishing for a consideration of parking services, 497.20 whether on a contractual, hourly, or other periodic basis, 497.21 except for parking at a meter; 497.22 (i) The furnishing for a consideration of services listed 497.23 in this paragraph: 497.24 (i) laundry and dry cleaning services including cleaning, 497.25 pressing, repairing, altering, and storing clothes, linen 497.26 services and supply, cleaning and blocking hats, and carpet, 497.27 drapery, upholstery, and industrial cleaning. Laundry and dry 497.28 cleaning services do not include services provided by coin 497.29 operated facilities operated by the customer; 497.30 (ii) motor vehicle washing, waxing, and cleaning services, 497.31 including services provided by coin-operated facilities operated 497.32 by the customer, and rustproofing, undercoating, and towing of 497.33 motor vehicles; 497.34 (iii) building and residential cleaning, maintenance, and 497.35 disinfecting and exterminating services; 497.36 (iv) detective services, security services, burglar, fire 498.1 alarm, and armored car services; but not including services 498.2 performed within the jurisdiction they serve by off-duty 498.3 licensed peace officers as defined in section 626.84, 498.4 subdivision 1, or services provided by a nonprofit organization 498.5 for monitoring and electronic surveillance of persons placed on 498.6 in-home detention pursuant to court order or under the direction 498.7 of the Minnesota department of corrections; 498.8 (v) pet grooming services; 498.9 (vi) lawn care, fertilizing, mowing, spraying and sprigging 498.10 services; garden planting and maintenance; tree, bush, and shrub 498.11 pruning, bracing, spraying, and surgery; indoor plant care; 498.12 tree, bush, shrub and stump removal; and tree trimming for 498.13 public utility lines. Services performed under a construction 498.14 contract for the installation of shrubbery, plants, sod, trees, 498.15 bushes, and similar items are not taxable; 498.16 (vii) massages, except when provided by a licensed health 498.17 care facility or professional or upon written referral from a 498.18 licensed health care facility or professional for treatment of 498.19 illness, injury, or disease; and 498.20 (viii) the furnishing for consideration of lodging, board 498.21 and care services for animals in kennels and other similar 498.22 arrangements, but excluding veterinary and horse boarding 498.23 services. 498.24 The services listed in this paragraph are taxable under section 498.25 297A.02 if the service is performed wholly within Minnesota or 498.26 if the service is performed partly within and partly without 498.27 Minnesota and the greater proportion of the service is performed 498.28 in Minnesota, based on the cost of performance. In applying the 498.29 provisions of this chapter, the terms "tangible personal 498.30 property" and "sales at retail" include taxable services and the 498.31 provision of taxable services, unless specifically provided 498.32 otherwise. Services performed by an employee for an employer 498.33 are not taxable under this paragraph. Services performed by a 498.34 partnership or association for another partnership or 498.35 association are not taxable under this paragraph if one of the 498.36 entities owns or controls more than 80 percent of the voting 499.1 power of the equity interest in the other entity. Services 499.2 performed between members of an affiliated group of corporations 499.3 are not taxable. For purposes of this section, "affiliated 499.4 group of corporations" includes those entities that would be 499.5 classified as a member of an affiliated group under United 499.6 States Code, title 26, section 1504, as amended through December 499.7 31, 1987, and who are eligible to file a consolidated tax return 499.8 for federal income tax purposes; 499.9 (j) A "sale" and a "purchase" includes the transfer of 499.10 computer software, meaning information and directions that 499.11 dictate the function performed by data processing equipment. A 499.12 "sale" and a "purchase" does not include the design, 499.13 development, writing, translation, fabrication, lease, or 499.14 transfer for a consideration of title or possession of a custom 499.15 computer program; and 499.16 (k) The granting of membership in a club, association, or 499.17 other organization if: 499.18 (1) the club, association, or other organization makes 499.19 available for the use of its members sports and athletic 499.20 facilities (without regard to whether a separate charge is 499.21 assessed for use of the facilities); and 499.22 (2) use of the sports and athletic facilities is not made 499.23 available to the general public on the same basis as it is made 499.24 available to members. 499.25 Granting of membership includes both one-time initiation fees 499.26 and periodic membership dues. Sports and athletic facilities 499.27 include golf courses, tennis, racquetball, handball and squash 499.28 courts, basketball and volleyball facilities, running tracks, 499.29 exercise equipment, swimming pools, and other similar athletic 499.30 or sports facilities. The provisions of this paragraph do not 499.31 apply to camps or other recreation facilities owned and operated 499.32 by an exempt organization under section 501(c)(3) of the 499.33 Internal Revenue Code of 1986, as amended through December 31, 499.34 1992, for educational and social activities for young people 499.35 primarily age 18 and under. 499.36[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 500.1 effective the day following final enactment. In the next 500.2 edition of Minnesota Statutes, the revisor of statutes shall 500.3 codify the amendment in this section in Minnesota Statutes, 500.4 section 297A.61, subdivision 3. 500.5 Sec. 3. Minnesota Statutes 2000, section 297A.01, 500.6 subdivision 5, is amended to read: 500.7 Subd. 5. "Storage" includes any keeping or retention in 500.8 Minnesota for any purpose except sale in the regular course of 500.9 businessor subsequent use solely outside Minnesota of tangible500.10personal property. 500.11[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section 500.12 is effective for purchases, sales, storage, use, or consumption 500.13 occurring after June 30, 1997. 500.14 (b) In the next edition of Minnesota Statutes, the revisor 500.15 shall codify the amendment to this section in Minnesota 500.16 Statutes, section 297A.61, subdivision 5. 500.17 Sec. 4. Minnesota Statutes 2000, section 297A.07, 500.18 subdivision 3, is amended to read: 500.19 Subd. 3. [NEW PERMITS AFTER REVOCATION.] The commissioner 500.20 shall not issue a new permit or reinstate a revoked permit after 500.21 revocation unless the taxpayer applies for a permit and provides 500.22 reasonable evidence of intention to comply with the sales and 500.23 use tax laws and rules. The commissioner may require the 500.24 applicant to supply security, in addition to that authorized by 500.25 section 297A.28, as is reasonably necessary to insure compliance 500.26 with the sales and use tax laws and rules. If the commissioner 500.27 issues or reinstates a permit not in conformance with the 500.28 requirements of this subdivision or applicable rules, the 500.29 commissioner may cancel the permit upon notice to the permit 500.30 holder. The notice must be served by first class and certified 500.31 mail at the permit holder's last known address. The 500.32 cancellation shall be effective immediately, subject to the 500.33 right of the permit holder to show that the permit was issued in 500.34 conformance with the requirements of this subdivision and 500.35 applicable rules. Upon such showing, the permit must be 500.36 reissued. 501.1 If a taxpayer has had a permit or permits revoked three 501.2 times in a five-year period, the commissioner shall not issue a 501.3 new permit or reinstate the revoked permit until 24 months have 501.4 elapsed after revocation and the taxpayer has satisfied the 501.5 conditions for reinstatement of a revoked permit or issuance of 501.6 a new permit imposed by this section and rules adopted hereunder. 501.7 For purposes of this subdivision, the term "taxpayer" means 501.8 an individual, if a revoked permit was issued to or in the name 501.9 of an individual, or a corporation or partnership, if a revoked 501.10 permit was issued to or in the name of a corporation or 501.11 partnership. Taxpayer also means an officer of a corporation, a 501.12 member of a partnership, or an individual who is liable for 501.13 delinquent sales taxes, either for the entity for which the new 501.14 or reinstated permit is at issue, or for another entity for 501.15 which a permit was previously revoked, or personally as a permit 501.16 holder. 501.17[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section 501.18 is effective the day following final enactment. 501.19 (b) In the next edition of Minnesota Statutes, the revisor 501.20 shall codify the amendments to this section in Minnesota 501.21 Statutes, section 297A.86, subdivision 2. 501.22 Sec. 5. Minnesota Statutes 2000, section 297A.25, 501.23 subdivision 3, is amended to read: 501.24 Subd. 3. [MEDICINES; MEDICAL DEVICES.] The gross receipts 501.25 from the sale of and storage, use, or consumption of prescribed 501.26 drugs, prescribed medicine and insulin, intended for use, 501.27 internal or external, in the cure, mitigation, treatment or 501.28 prevention of illness or disease in human beings are exempt, 501.29 together with prescription glasses, fever thermometers, 501.30 therapeutic, and prosthetic devices. "Prescribed drugs" or 501.31 "prescribed medicine" includes over-the-counter drugs or 501.32 medicine prescribed by a licensedphysicianhealth care 501.33 professional. "Therapeutic devices" includes reusable finger 501.34 pricking devices for the extraction of blood, blood glucose 501.35 monitoring machines, and other diagnostic agents used in 501.36 diagnosing, monitoring, or treating diabetes. Nonprescription 502.1 analgesics consisting principally (determined by the weight of 502.2 all ingredients) of acetaminophen, acetylsalicylic acid, 502.3 ibuprofen, ketoprofen, naproxen, and other nonprescription 502.4 analgesics that are approved by the United States Food and Drug 502.5 Administration for internal use by human beings, or a 502.6 combination thereof, are exempt. 502.7 Medical supplies purchased by a licensed health care 502.8 facility or licensed health care professional to provide medical 502.9 treatment to residents or patients are exempt. The exemption 502.10 does not apply to medical equipment or components of medical 502.11 equipment, laboratory supplies, radiological supplies, and other 502.12 items used in providing medical services. For purposes of this 502.13 subdivision, "medical supplies" means adhesive and nonadhesive 502.14 bandages, gauze pads and strips, cotton applicators, 502.15 antiseptics, nonprescription drugs, eye solution, and other 502.16 similar supplies used directly on the resident or patient in 502.17 providing medical services. 502.18[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 502.19 effective the day following final enactment. In the next 502.20 edition of Minnesota Statutes, the revisor of statutes shall 502.21 codify the amendment in this section in Minnesota Statutes, 502.22 section 297A.67, subdivision 7. 502.23 Sec. 6. Minnesota Statutes 2000, section 297A.25, 502.24 subdivision 11, is amended to read: 502.25 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 502.26 all sales, including sales in which title is retained by a 502.27 seller or a vendor or is assigned to a third party under an 502.28 installment sale or lease purchase agreement under section 502.29 465.71, of tangible personal property to, and all storage, use 502.30 or consumption of such property by, the United States and its 502.31 agencies and instrumentalities, the University of Minnesota, 502.32 state universities, community colleges, technical colleges, 502.33 state academies, the Perpich center for arts education, an 502.34 instrumentality of a political subdivision that is accredited as 502.35 an optional/special function school by the North Central 502.36 Association of Colleges and Schools, school districts, public 503.1 libraries, public library systems, multicounty, multitype 503.2 library systems as defined in section 134.001, county law 503.3 libraries under chapter 134A, state agency libraries, the state 503.4 library under section 480.09, and the legislative reference 503.5 library are exempt. 503.6 As used in this subdivision, "school districts" means 503.7 public school entities and districts of every kind and nature 503.8 organized under the laws of the state of Minnesota, including, 503.9 without limitation, school districts, intermediate school 503.10 districts, education districts, service cooperatives, secondary 503.11 vocational cooperative centers, special education cooperatives, 503.12 joint purchasing cooperatives, telecommunication cooperatives, 503.13 regional management information centers, and any instrumentality 503.14 of a school district, as defined in section 471.59. 503.15 Sales exempted by this subdivision include sales under 503.16 section 297A.01, subdivision 3, paragraph (f). 503.17 Sales to hospitals and nursing homes owned and operated by 503.18 political subdivisions of the state of tangible personal 503.19 property and taxable services used at or by the hospitals and 503.20 nursing homes are exempt under this subdivision. 503.21 Sales of supplies and equipment used in the operation of an 503.22 ambulance service owned and operated by a political subdivision 503.23 of the state are exempt under this subdivision provided that the 503.24 supplies and equipment are used in the course of providing 503.25 medical care. Sales to a political subdivision of repair and 503.26 replacement parts for emergency rescue vehicles and fire trucks 503.27 and apparatus are exempt under this subdivision. 503.28 Sales to a political subdivision of machinery and 503.29 equipment, except for motor vehicles, used directly for mixed 503.30 municipal solid waste management services at a solid waste 503.31 disposal facility as defined in section 115A.03, subdivision 10, 503.32 are exempt under this subdivision. 503.33 Sales to political subdivisions of chore and homemaking 503.34 services to be provided to elderly or disabled individuals are 503.35 exempt. 503.36 Sales to a town of gravel and of machinery, equipment, and 504.1 accessories, except motor vehicles, used exclusively for road 504.2 and bridge maintenance, and leases of motor vehicles exempt from 504.3 tax under section 297B.03, clause (10), are exempt. 504.4 Sales of telephone services to the department of 504.5 administration that are used to provide telecommunications 504.6 services through the intertechnologies revolving fund are exempt 504.7 under this subdivision. 504.8 This exemption shall not apply to building, construction or 504.9 reconstruction materials purchased by a contractor or a 504.10 subcontractor as a part of a lump-sum contract or similar type 504.11 of contract with a guaranteed maximum price covering both labor 504.12 and materials for use in the construction, alteration, or repair 504.13 of a building or facility. This exemption does not apply to 504.14 construction materials purchased by tax exempt entities or their 504.15 contractors to be used in constructing buildings or facilities 504.16 which will not be used principally by the tax exempt entities. 504.17 This exemption does not apply to the leasing of a motor 504.18 vehicle as defined in section 297B.01, subdivision 5, except for 504.19 leases entered into by the United States or its agencies or 504.20 instrumentalities. 504.21 The tax imposed on sales to political subdivisions of the 504.22 state under this section applies to all political subdivisions 504.23 other than those explicitly exempted under this subdivision, 504.24 notwithstanding section 115A.69, subdivision 6, 116A.25, 504.25 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 504.26 469.127, 473.448, 473.545, or 473.608 or any other law to the 504.27 contrary enacted before 1992. 504.28 Sales exempted by this subdivision include sales made to 504.29 other states or political subdivisions of other states, if the 504.30 sale would be exempt from taxation if it occurred in that state, 504.31 but do not include sales under section 297A.01, subdivision 3, 504.32 paragraphs (c) and (e). 504.33[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 504.34 effective the day following final enactment. In the next 504.35 edition of Minnesota Statutes, the revisor of statutes shall 504.36 codify the amendment in this section in Minnesota Statutes, 505.1 section 297A.70, subdivision 2. 505.2 Sec. 7. Minnesota Statutes 2000, section 297A.86, 505.3 subdivision 1, is amended to read: 505.4 Subdivision 1. [NOTICE OF REVOCATION; HEARINGS.] (a) If a 505.5 person fails to comply with this chapter or the sales and use 505.6 tax provisions of chapter 289A or the rulesadopted under either505.7chapterrelated to sales and use tax, or if any person fails to 505.8 comply with chapter 297F or the rules related to cigarette and 505.9 tobacco products, without reasonable cause, the commissioner may 505.10 give the person 30 days' notice in writing, specifying the 505.11 violations, and stating that based on the violations the 505.12 commissioner intends to revoke the person's permit. The notice 505.13 must also advise the person of the right to contest the 505.14 revocation under this subdivision. It must also explain the 505.15 general procedures for a contested case hearing under chapter 505.16 14. The notice may be served personally or by mail in the 505.17 manner prescribed for service of an order of assessment. 505.18 (b) If the person does not request a hearing within 30 days 505.19 after the date of the notice of intent, the commissioner may 505.20 serve a notice of revocation of permit upon the person, and the 505.21 permit is revoked. If a hearing is timely requested, and held, 505.22 the permit is revoked after the commissioner serves an order of 505.23 revocation of permit under section 14.62, subdivision 1. 505.24[EFFECTIVE DATE.] This section is effective for violations 505.25 occurring on or after July 1, 2001. 505.26 Sec. 8. Minnesota Statutes 2000, section 297B.03, is 505.27 amended to read: 505.28 297B.03 [EXEMPTIONS.] 505.29 There is specifically exempted from the provisions of this 505.30 chapter and from computation of the amount of tax imposed by it 505.31 the following: 505.32 (1) purchase or use, including use under a lease purchase 505.33 agreement or installment sales contract made pursuant to section 505.34 465.71, of any motor vehicle by the United States and its 505.35 agencies and instrumentalities and by any person described in 505.36 and subject to the conditions provided in section 297A.25, 506.1 subdivision 18; 506.2 (2) purchase or use of any motor vehicle by any person who 506.3 was a resident of another state or country at the time of the 506.4 purchase and who subsequently becomes a resident of Minnesota, 506.5 provided the purchase occurred more than 60 days prior to the 506.6 date such person began residing in the state of Minnesota and 506.7 the motor vehicle was registered in the person's name in the 506.8 other state or country; 506.9 (3) purchase or use of any motor vehicle by any person 506.10 making a valid election to be taxed under the provisions of 506.11 section 297A.211; 506.12 (4) purchase or use of any motor vehicle previously 506.13 registered in the state of Minnesota when such transfer 506.14 constitutes a transfer within the meaning of section 118, 331, 506.15 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 506.16 1563(a) of the Internal Revenue Code of 1986, as amended through 506.17 December 31, 1999; 506.18 (5) purchase or use of any vehicle owned by a resident of 506.19 another state and leased to a Minnesota based private or for 506.20 hire carrier for regular use in the transportation of persons or 506.21 property in interstate commerce provided the vehicle is titled 506.22 in the state of the owner or secured party, and that state does 506.23 not impose a sales tax or sales tax on motor vehicles used in 506.24 interstate commerce; 506.25 (6) purchase or use of a motor vehicle by a private 506.26 nonprofit or public educational institution for use as an 506.27 instructional aid in automotive training programs operated by 506.28 the institution. "Automotive training programs" includes motor 506.29 vehicle body and mechanical repair courses but does not include 506.30 driver education programs; 506.31 (7) purchase of a motor vehicle for use as an ambulance by 506.32 an ambulance service licensed under section 144E.10; 506.33 (8) purchase of a motor vehicle by or for a public library, 506.34 as defined in section 134.001, subdivision 2, as a bookmobile or 506.35 library delivery vehicle; 506.36 (9) purchase of a ready-mixed concrete truck; 507.1 (10) purchase or use of a motor vehicle by a town for use 507.2 exclusively for road maintenance, including snowplows and dump 507.3 trucks, but not including automobiles, vans, or pickup trucks; 507.4 (11) purchase or use of a motor vehicle by a corporation, 507.5 society, association, foundation, or institution organized and 507.6 operated exclusively for charitable, religious, or educational 507.7 purposes, except a public school, university, or library, but 507.8 only if the vehicle is: 507.9 (i) a truck, as defined in section 168.011, a bus, as 507.10 defined in section 168.011, or a passenger automobile, as 507.11 defined in section 168.011, if the automobile is designed and 507.12 used for carrying more than nine persons including the driver; 507.13 and 507.14 (ii) intended to be used primarily to transport tangible 507.15 personal property or individuals, other than employees, to whom 507.16 the organization provides service in performing its charitable, 507.17 religious, or educational purpose. 507.18[EFFECTIVE DATE.] This section is effective the day 507.19 following final enactment, except that the change to paragraph 507.20 (11) is effective for sales and purchases occurring after June 507.21 30, 2000. 507.22 Sec. 9. [297F.185] [REVOCATION OF SALES AND USE TAX 507.23 PERMITS.] 507.24 If a person fails to comply with this chapter, or the rules 507.25 related to cigarette and tobacco products, the commissioner may 507.26 revoke the person's sales and use tax permit as provided in 507.27 section 297A.86. 507.28[EFFECTIVE DATE.] This section is effective for violations 507.29 occurring on or after July 1, 2001. 507.30 Sec. 10. [REPEALER.] 507.31 Minnesota Statutes 2000, section 297B.032, is repealed. 507.32[EFFECTIVE DATE.] This section is effective the day 507.33 following final enactment. 507.34 ARTICLE 23 507.35 DEPARTMENT SPECIAL TAXES 507.36 Section 1. Minnesota Statutes 2000, section 287.08, is 508.1 amended to read: 508.2 287.08 [TAX, HOW PAYABLE; RECEIPTS.] 508.3 (a) The tax imposed by sections 287.01 to 287.12 must be 508.4 paid to the treasurer of any county in this state in which the 508.5 real property or some part is located at or before the time of 508.6 filing the mortgage for record. The treasurer shall endorse 508.7 receipt on the mortgage and the receipt is conclusive proof that 508.8 the tax has been paid in the amount stated and authorizes any 508.9 county recorder or registrar of titles to record the mortgage. 508.10 Its form, in substance, shall be "registration tax hereon of 508.11 ..................... dollars paid." If the mortgage is exempt 508.12 from taxation the endorsement shall, in substance, be "exempt 508.13 from registration tax." In either case the receipt must be 508.14 signed by the treasurer. In case the treasurer is unable to 508.15 determine whether a claim of exemption should be allowed, the 508.16 tax must be paid as in the case of a taxable mortgage. 508.17 (b)Upon written application of the taxpayer,The county 508.18 treasurer may refund in whole or in part any mortgage registry 508.19 taxthat has been erroneously paid, or a person having paid a508.20mortgage registry tax amount may seek a refund of the tax, or508.21other appropriate relief,overpayment if a written application 508.22 by the taxpayer is submitted to the county treasurer within 508.23 three and one-half years from the date of the overpayment. If 508.24 the county has not issued a denial of the application, the 508.25 taxpayer may bring an action in tax court in the county in which 508.26 the tax was paid at any time after the expiration of six months 508.27 from the time that the application was submitted. A denial of 508.28 refund may be appealed within 60 days from the date of the 508.29 denial by bringing an action in tax court in the county in which 508.30 the tax was paid, within 60 days of the payment. The action is 508.31 commenced by the serving of a petition for relief on the county 508.32 treasurer, and by filing a copy with the court. The county 508.33 attorney shall defend the action. The county treasurer shall 508.34 notify the treasurer of each county that has or would receive a 508.35 portion of the tax as paid. 508.36 (c) If the county treasurer determines a refund should be 509.1 paid, or if a refund is ordered by the court, the county 509.2 treasurer of each county that actually received a portion of the 509.3 tax shall immediately pay a proportionate share of three percent 509.4 of the refund using any available county funds. The county 509.5 treasurer of each county that received, or would have received, 509.6 a portion of the tax shall also pay their county's proportionate 509.7 share of the remaining 97 percent of the court-ordered refund on 509.8 or before the 20th day of the following month using solely the 509.9 mortgage registry tax funds that would be paid to the 509.10 commissioner of revenue on that date under section 287.12. If 509.11 the funds on hand under this procedure are insufficient to fully 509.12 fund 97 percent of the court-ordered refund, the county 509.13 treasurer of the county in which the action was brought shall 509.14 file a claim with the commissioner of revenue under section 509.15 16A.48 for the remaining portion of 97 percent of the refund, 509.16 and shall pay over the remaining portion upon receipt of a 509.17 warrant from the state issued pursuant to the claim. 509.18 (d) When any mortgage covers real property located in more 509.19 than one county in this state the total tax must be paid to the 509.20 treasurer of the county where the mortgage is first presented 509.21 for recording, and the payment must be receipted as provided in 509.22 paragraph (a). If the principal debt or obligation secured by 509.23 such a multiple county mortgage exceeds $1,000,000, the nonstate 509.24 portion of the tax must be divided and paid over by the county 509.25 treasurer receiving it, on or before the 20th day of each month 509.26 after receipt, to the county or counties entitled in the ratio 509.27 that the market value of the real property covered by the 509.28 mortgage in each county bears to the market value of all the 509.29 real property in this state described in the mortgage. In 509.30 making the division and payment the county treasurer shall send 509.31 a statement giving the description of the real property 509.32 described in the mortgage and the market value of the part 509.33 located in each county. For this purpose, the treasurer of any 509.34 county may require the treasurer of any other county to certify 509.35 to the former the market valuation of any tract of real property 509.36 in any mortgage. 510.1[EFFECTIVE DATE.] This section is effective for 510.2 overpayments made on or after July 1, 2001. 510.3 Sec. 2. Minnesota Statutes 2000, section 287.20, 510.4 subdivision 9, is amended to read: 510.5 Subd. 9. [REORGANIZATION.] "Reorganization" means the 510.6 transfer of substantially all of the assets of a corporation, a 510.7 limited liability company, or a partnership not in the usual or 510.8 regular course of business if at the time of the transfer the 510.9 transfer qualifies as: (i) a corporate reorganization under 510.10 section 368(a) of the Internal Revenue Code of 1986, as amended 510.11 through December 31, 2000; or (ii) a transfer pursuant to the 510.12 continuation of an existing partnership under section 708 of the 510.13 Internal Revenue Code of 1986, as amended through December 31, 510.14 2000. 510.15[EFFECTIVE DATE.] This section is effective for taxable 510.16 deeds recorded or registered on or after July 1, 2001. 510.17 Sec. 3. Minnesota Statutes 2000, section 287.28, is 510.18 amended to read: 510.19 287.28 [REFUNDS OR REDEMPTION.] 510.20 (a) The county treasurer mayrefund in whole or in part any510.21tax which has been erroneously paid and may allow for orredeem 510.22such of thestamps,issued under the authority of sections 510.23 287.20 to 287.31as maythat have been spoiled, destroyed, or 510.24 rendered useless or unfit for the purpose intended or for which 510.25 the owner may have no use or which through mistake may have been 510.26 improperly or unnecessarily used.Such orderRedemption shall 510.27 be made only upon written application of the taxpayer. 510.28 (b)A person having paid a deed tax amount may seek a510.29refund of the tax, or other appropriate relief,The county 510.30 treasurer may refund any deed tax overpayment if a written 510.31 application by the taxpayer is submitted to the county treasurer 510.32 within three and one-half years from the date of the 510.33 overpayment. If the county has not issued a denial of the 510.34 application, the taxpayer may bring an action in tax court in 510.35 the county in which the tax was paid at any time after the 510.36 expiration of six months from the time that the application was 511.1 submitted. A denial of refund may be appealed within 60 days 511.2 from the date of the denial by commencing an action in tax court 511.3 in the county where the tax was paid, within 60 days of the511.4payment. The action is commenced by serving a petition for 511.5 relief on the county treasurer, and filing a copy with the 511.6 court. The county attorney shall defend the action. The county 511.7 treasurer shall notify the treasurer of each county that has, or 511.8 would receive a portion of the tax as paid. Any refund of deed 511.9 tax which the county treasurer determines should be made, and 511.10 any court ordered refund of deed tax, shall be accomplished 511.11 using the refund procedures in section 287.08. 511.12[EFFECTIVE DATE.] This section is effective for 511.13 overpayments made on or after July 1, 2001. 511.14 Sec. 4. Minnesota Statutes 2000, section 295.50, 511.15 subdivision 3, is amended to read: 511.16 Subd. 3. [GROSS REVENUES.] "Gross revenues" are total 511.17 amounts received in money or otherwise by: 511.18 (1) a hospital for patient services; 511.19 (2) a surgical center for patient services; 511.20 (3) a health care provider, other than a staff model health 511.21 carrier, for patient services; 511.22 (4) a wholesale drug distributor for sale or distribution 511.23 of legend drugs that are delivered in Minnesota by the wholesale 511.24 drug distributor, by common carrier, or by mail, unless the 511.25 legend drugs are delivered to another wholesale drug distributor 511.26 who sells legend drugs exclusively at wholesale. Legend drugs 511.27 do not include nutritional products as defined in Minnesota 511.28 Rules, part 9505.0325; and 511.29 (5) a staff model health plan company as gross premiums for 511.30 enrollees, copayments, deductibles, coinsurance, and fees for 511.31 patient servicescovered under its contracts with groups and511.32enrollees. 511.33[EFFECTIVE DATE.] This section is effective the day 511.34 following final enactment. 511.35 Sec. 5. Minnesota Statutes 2000, section 295.50, 511.36 subdivision 4, is amended to read: 512.1 Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care 512.2 provider" means: 512.3 (1) a person whose health care occupation is regulated or 512.4 required to be regulated by the state of Minnesota furnishing 512.5 any or all of the following goods or services directly to a 512.6 patient or consumer: medical, surgical, optical, visual, 512.7 dental, hearing, nursing services, drugs, laboratory, diagnostic 512.8 or therapeutic services; 512.9 (2) a person who provides goods and services not listed in 512.10 clause (1) that qualify for reimbursement under the medical 512.11 assistance program provided under chapter 256B; 512.12 (3) a staff model health plan company; 512.13 (4) an ambulance service required to be licensed; or 512.14 (5) a person who sells or repairs hearing aids and related 512.15 equipment or prescription eyewear. 512.16 (b) Health care provider does not include: 512.17 (1) hospitals; medical supplies distributors, except as 512.18 specified under paragraph (a), clause (5); nursing homes 512.19 licensed under chapter 144A or licensed in any other 512.20 jurisdiction; pharmacies; surgical centers; bus and taxicab 512.21 transportation, or any other providers of transportation 512.22 services other than ambulance services required to be licensed; 512.23 supervised living facilities for persons with mental retardation 512.24 or related conditions, licensed under Minnesota Rules, parts 512.25 4665.0100 to 4665.9900; residential care homes licensed under 512.26 chapter 144B; board and lodging establishments providing only 512.27 custodial services that are licensed under chapter 157 and 512.28 registered under section 157.17 to provide supportive services 512.29 or health supervision services; adult foster homes as defined in 512.30 Minnesota Rules, part 9555.5105; day training and habilitation 512.31 services for adults with mental retardation and related 512.32 conditions as defined in section 252.41, subdivision 3;and512.33 boarding care homes, as defined in Minnesota Rules, part 512.34 4655.0100; and adult day care centers as defined in Minnesota 512.35 Rules, part 9555.9600; 512.36 (2) home health agencies as defined in Minnesota Rules, 513.1 part 9505.0175, subpart 15; a person providing personal care 513.2 services and supervision of personal care services as defined in 513.3 Minnesota Rules, part 9505.0335; a person providing private duty 513.4 nursing services as defined in Minnesota Rules, part 9505.0360; 513.5 and home care providers required to be licensed under chapter 513.6 144A; 513.7 (3) a person who employs health care providers solely for 513.8 the purpose of providing patient services to its employees; and 513.9 (4) an educational institution that employs health care 513.10 providers solely for the purpose of providing patient services 513.11 to its students if the institution does not receive fee for 513.12 service payments or payments for extended coverage. 513.13[EFFECTIVE DATE.] This section is effective for gross 513.14 revenues received on or after January 1, 2002. 513.15 Sec. 6. Minnesota Statutes 2000, section 295.50, 513.16 subdivision 15, is amended to read: 513.17 Subd. 15. [LEGEND DRUG.] "Legend drug" means alegenddrug 513.18as defined in section 151.01, subdivision 17that is required by 513.19 federal law to bear one of the following statements: "Caution: 513.20 Federal law prohibits dispensing without prescription" or "Rx 513.21 only". 513.22[EFFECTIVE DATE.] This section is effective the day 513.23 following final enactment. 513.24 Sec. 7. Minnesota Statutes 2000, section 295.52, 513.25 subdivision 4, is amended to read: 513.26 Subd. 4. [USE TAX; PRESCRIPTION DRUGS.] (a) A person that 513.27 receives prescription drugs for resale or use in Minnesota, 513.28 other than from a wholesale drug distributor thatpaid theis 513.29 subject to tax under subdivision 3, is subject to a tax equal to 513.30 the price paid to the wholesale drug distributor multiplied by 513.31 the tax percentage specified in this section. Liability for the 513.32 tax is incurred when prescription drugs are received or 513.33 delivered in Minnesota by the person. 513.34 (b) A person that receives prescription drugs for use in 513.35 Minnesota from a nonresident pharmacy required to be registered 513.36 under section 151.19 is subject to a tax equal to the price paid 514.1 by the nonresident pharmacy to the wholesale drug distributor or 514.2 the price received by the nonresident pharmacy, whichever is 514.3 lower, multiplied by the tax percentage specified in this 514.4 section. Liability for the tax is incurred when prescription 514.5 drugs are received in Minnesota by the person. 514.6[EFFECTIVE DATE.] This section is effective the day 514.7 following final enactment. 514.8 Sec. 8. Minnesota Statutes 2000, section 295.57, 514.9 subdivision 1, is amended to read: 514.10 Subdivision 1. [APPLICATION OF OTHER CHAPTERS.] Unless 514.11 specifically provided otherwise by sections 295.50 to 295.59, 514.12 the enforcement, interest,and penalty provisions under chapter514.13294,appealprovisions in sections 289A.43 and 289A.65, criminal 514.14 penaltiesin section 289A.63, and refunds provisions insection514.15289A.50chapter 289A, civil penalty provisions applicable to 514.16 withholding and sales taxes under section 289A.60, and 514.17 collection and rulemaking provisions under chapter 270, apply to 514.18a liability for thetaxes imposed under sections 295.50 to 514.19 295.59. 514.20[EFFECTIVE DATE.] This section is effective the day 514.21 following final enactment. 514.22 Sec. 9. Minnesota Statutes 2000, section 296A.16, 514.23 subdivision 2, is amended to read: 514.24 Subd. 2. [FUEL USED IN OTHER VEHICLE; CLAIM FOR REFUND.] 514.25 Any person whoshall buybuys anduseuses gasoline for a 514.26 qualifying purpose other than use in motor vehicles, snowmobiles 514.27 except as provided in clause (2), or motorboats, or special fuel 514.28 for a qualifying purpose other than use in licensed motor 514.29 vehicles, and whoshall havepaid the tax directly or indirectly 514.30 through the amount of the tax being included in the price of the 514.31 gasoline or special fuel, or otherwise, shall be reimbursed and 514.32 repaid the amount of the tax paid upon filing with the 514.33 commissioner a claim for refund in the form and manner 514.34 prescribed by the commissioner, and containing the information 514.35 the commissioner shall require. By signing any such claim which 514.36 is false or fraudulent, the applicant shall be subject to the 515.1 penalties provided in this chapter for knowingly making a false 515.2 claim. The claim shall set forth the total amount of the 515.3 gasoline so purchased and used by the applicant other than in 515.4 motor vehicles, or special fuel purchased and used by the 515.5 applicant other than in licensed motor vehicles, and shall state 515.6 when and for what purpose it was used. When a claim contains an 515.7 error in computation or preparation, the commissioner is 515.8 authorized to adjust the claim in accordance with the evidence 515.9 shown on the claim or other information available to the 515.10 commissioner. The commissioner, on being satisfied that the 515.11 claimant is entitled to the payments, shall approve the claim 515.12 and transmit it to the commissioner of finance. The words 515.13 "gasoline" or "special fuel" as used in this subdivision do not 515.14 include aviation gasoline or special fuel for aircraft. 515.15 Gasoline or special fuel bought and used for a "qualifying 515.16 purpose" means: 515.17 (1) Gasoline or special fuel used in carrying on a trade or 515.18 business, used on a farm situated in Minnesota, and used for a 515.19 farming purpose. "Farm" and "farming purpose" have the meanings 515.20 given them in section 6420(c)(2), (3), and (4) of the Internal 515.21 Revenue Code of 1986, as amended through December 31, 1997. 515.22 (2) Gasoline or special fuel used for off-highway business 515.23 use. "Off-highway business use" means any use off the public 515.24 highway by a person in that person's trade, business, or 515.25 activity for the production of income. Off-highway business use 515.26 includes: 515.27 (i) use of a passenger snowmobile off the public highways 515.28 as part of the operations of a resort as defined in section 515.29 157.15, subdivision 11; and 515.30 (ii) use of gasoline or special fuel to operate a power 515.31 takeoff unit on a vehicle, but not including fuel consumed 515.32 during idling time. 515.33 Off-highway business use does not include: 515.34 (i) use as a fuel in a motor vehicle which, at the time of 515.35 use, is registered or is required to be registered for highway 515.36 use under the laws of any state or foreign country; or 516.1 (ii) use of a licensed motor vehicle fuel tank in lieu of a 516.2 separate storage tank for storing fuel to be used for a 516.3 qualifying purpose, as defined in this section. Fuel purchased 516.4 to be used for a qualifying purpose cannot be placed in the fuel 516.5 tank of a licensed motor vehicle and must be stored in a 516.6 separate supply tank. 516.7 (3) Gasoline or special fuel placed in the fuel tanks of 516.8 new motor vehicles, manufactured in Minnesota, and shipped by 516.9 interstate carrier to destinations in other states or foreign 516.10 countries. 516.11By July 1, 1998, the commissioner shall adopt rules that516.12determine the rates and percentages necessary to develop516.13formulas for calculating the refund under clause (2), item (ii).516.14[EFFECTIVE DATE.] This section is effective the day 516.15 following final enactment. 516.16 Sec. 10. [296A.201] [ASSESSMENTS.] 516.17 Subdivision 1. [GENERAL RULE.] The commissioner may make 516.18 determinations, corrections, and assessments with respect to any 516.19 tax or fee under this chapter, including interest, additions to 516.20 taxes and fees, and assessable penalties. 516.21 Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails 516.22 to file a required return, the commissioner, from information in 516.23 the commissioner's possession or obtainable by the commissioner, 516.24 may make a return for the taxpayer. The return is prima facie 516.25 correct and valid. The commissioner may use statistical or 516.26 other sampling techniques consistent with generally accepted 516.27 auditing standards in examining returns or records and making 516.28 assessments. 516.29 Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 516.30 TAXPAYER.] (a) If a return has been filed and the commissioner 516.31 determines that the tax or fee disclosed by the return is 516.32 different than the tax or fee determined by the examination, the 516.33 commissioner shall send an order of assessment to the taxpayer. 516.34 If no return has been filed, the commissioner may make a return 516.35 for the taxpayer under subdivision 2 or may send an order of 516.36 assessment under this subdivision. The order must explain the 517.1 basis for the assessment and must explain the taxpayer's appeal 517.2 rights. An order of assessment is final when made but may be 517.3 reconsidered by the commissioner under section 296A.25. 517.4 (b) Penalties under this chapter are not imposed and no 517.5 collection action can be taken, including the filing of liens 517.6 under section 270.69, if the amount shown on the order is paid 517.7 to the commissioner: 517.8 (1) within 60 days after notice of the amount and demand 517.9 for its payment have been mailed to the taxpayer by the 517.10 commissioner; or 517.11 (2) if an administrative appeal is filed under this 517.12 chapter, or a tax court appeal is filed under chapter 271, 517.13 within 60 days following final determination of the appeal if 517.14 the appeal is based upon a constitutional challenge to the tax 517.15 or fee, and if not, when the decision of the tax court is made. 517.16 Subd. 4. [ERRONEOUS REFUNDS.] An erroneous refund is 517.17 considered an underpayment of tax or fee on the date made. An 517.18 assessment of a deficiency arising out of an erroneous refund 517.19 may be made at any time within two years from the making of the 517.20 refund. If part of the refund was induced by fraud or 517.21 misrepresentation of a material fact, the assessment may be made 517.22 at any time. 517.23 Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or 517.24 assessment of tax or fee made by the commissioner is prima facie 517.25 correct and valid. The taxpayer has the burden of establishing 517.26 its incorrectness or invalidity in any related action or 517.27 proceeding. 517.28 Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The 517.29 commissioner, on examining returns of a taxpayer for more than 517.30 one year or period, may issue one order covering the period 517.31 under examination that reflects the aggregate refund or 517.32 additional tax or fee due. 517.33 Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment, 517.34 sent postage prepaid by United States mail to the taxpayer at 517.35 the taxpayer's last known address, is sufficient even if the 517.36 taxpayer is deceased or is under a legal disability, or, in the 518.1 case of a corporation, even if the corporation has terminated 518.2 its existence, unless the department has been provided with a 518.3 new address by a party authorized to receive notices of 518.4 assessment. 518.5[EFFECTIVE DATE.] This section is effective the day 518.6 following final enactment. 518.7 Sec. 11. Minnesota Statutes 2000, section 296A.21, 518.8 subdivision 1, is amended to read: 518.9 Subdivision 1. [GENERALRULERULES.] (a) The commissioner 518.10 shall make determinations, corrections,andassessments, and 518.11 refunds with respect to taxes and fees under this chapter, 518.12 including interest, additions to taxes, and assessable 518.13 penalties. Except as otherwise provided in this section, the 518.14 amount of taxes assessable must be assessed within 3-1/2 years 518.15 after the date the return is filed. 518.16 (b) A claim for a refund of an overpayment of state tax or 518.17 fees must be filed within 3-1/2 years from the date prescribed 518.18 for filing the return, plus any extension of time granted for 518.19 filing the return, but only if filed within the extended time; 518.20 or the claim must be filed within one year from the date of an 518.21 order assessing tax or fees, or from the date of a return filed 518.22 by the commissioner, upon payment in full of the tax, fees, 518.23 penalties, and interest shown on the order or return, whichever 518.24 period expires later. 518.25[EFFECTIVE DATE.] This section is effective the day 518.26 following final enactment. 518.27 Sec. 12. Minnesota Statutes 2000, section 296A.21, 518.28 subdivision 4, is amended to read: 518.29 Subd. 4. [TIME LIMIT FORREPAYMENTCERTAIN REFUNDS.]No518.30repaymentNotwithstanding subdivision 1, paragraph (b), no 518.31 refund under section 296A.16, subdivision 2, shall be made 518.32 unless the claim for refund and invoiceshall beare filed with 518.33 the commissioner within one year from the date of purchase.The518.34postmark on the envelope in which a written claim is mailed518.35shall determine its date of filing.518.36[EFFECTIVE DATE.] This section is effective the day 519.1 following final enactment. 519.2 Sec. 13. Minnesota Statutes 2000, section 297F.16, 519.3 subdivision 4, is amended to read: 519.4 Subd. 4. [ERRONEOUS REFUNDSOR CREDITS.] An erroneous 519.5 refundor creditis considered an underpayment of tax on the 519.6 date made. An assessment of a deficiency arising out of an 519.7 erroneous refundor creditmust be made within3-1/2 years from519.8the date prescribed for filing the return, plus any extension of519.9time granted for filing the return, but only if filed within the519.10extended time, or two years from the time the tax is paid in519.11full, whichever period expires latertwo years from the making 519.12 of the refund. If part of the refund was induced by fraud or 519.13 misrepresentation of a material fact, the assessment may be made 519.14 at any time. 519.15[EFFECTIVE DATE.] This section is effective the day 519.16 following final enactment. 519.17 Sec. 14. Minnesota Statutes 2000, section 297G.15, 519.18 subdivision 4, is amended to read: 519.19 Subd. 4. [ERRONEOUS REFUNDSOR CREDITS.] An erroneous 519.20 refundor creditis considered an underpayment of tax on the 519.21 date made. An assessment of a deficiency arising out of an 519.22 erroneous refundor creditmust be made within3-1/2 years from519.23the date prescribed for filing the return, plus any extension of519.24time granted for filing the return, but only if filed within the519.25extended time, or two years from the time the tax is paid in519.26full, whichever period expires latertwo years from the making 519.27 of the refund. If part of the refund was induced by fraud or 519.28 misrepresentation of a material fact, the assessment may be made 519.29 at any time. 519.30[EFFECTIVE DATE.] This section is effective the day 519.31 following final enactment. 519.32 Sec. 15. Minnesota Statutes 2000, section 297G.16, 519.33 subdivision 5, is amended to read: 519.34 Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise 519.35 provided in this chapter, a claim for a refund of an overpayment 519.36 of tax must be filed within 3-1/2 years from the date prescribed 520.1 for filing the return, plus any extension of time granted for 520.2 filing the return, but only if filed within the extended time, 520.3or two years from the time the tax is paid in full, whichever520.4period expires later. Claimants under this section are subject520.5to the notice requirements of section 289A.38, subdivision 7or 520.6 within one year from the date of an order assessing tax or from 520.7 the date of a return filed by the commissioner, upon payment in 520.8 full of the tax, penalties, and interest shown on the order or 520.9 return made by the commissioner, whichever period expires later. 520.10[EFFECTIVE DATE.] This section is effective for returns 520.11 becoming due or orders assessing tax issued on or after the day 520.12 following final enactment. 520.13 Sec. 16. Minnesota Statutes 2000, section 297G.16, 520.14 subdivision 7, is amended to read: 520.15 Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 520.16 refund must be filed with the commissioner within one year of 520.17 the filing of the taxpayer's income tax return containing the 520.18 bad debt deduction that is being claimed. Claimants under this 520.19 subdivision are subject to the notice requirements of section 520.20 289A.38, subdivision 7. 520.21[EFFECTIVE DATE.] This section is effective the day 520.22 following final enactment. 520.23 Sec. 17. [297H.115] [USE TAX.] 520.24 Subdivision 1. [IMPOSITION; LIABILITY OF GENERATORS AND 520.25 SELF-HAULERS.] (a) A use tax is imposed on the sales price of 520.26 mixed municipal solid waste management services received by a 520.27 residential generator at the rate imposed under section 297H.02, 520.28 unless the tax imposed under section 297H.02 was paid. The 520.29 residential generator is liable. 520.30 (b) A use tax is imposed on the sales price of mixed 520.31 municipal solid waste management services received by a 520.32 commercial generator at the rate imposed under section 297H.03, 520.33 unless the tax imposed under section 297H.03 was paid. The 520.34 commercial generator is liable. 520.35 (c) A use tax is imposed on the volume of nonmixed 520.36 municipal solid waste that is managed at the rate imposed under 521.1 section 297H.04, unless the tax imposed under section 297H.04 521.2 was paid. The generator is liable. 521.3 (d) A use tax is imposed on the sales price of mixed 521.4 municipal solid waste management services received by a 521.5 self-hauler at the rate imposed under section 297H.05, paragraph 521.6 (a), unless the tax imposed under section 297H.05, paragraph 521.7 (a), was paid. The self-hauler is liable. 521.8 (e) A use tax is imposed on the volume of nonmixed 521.9 municipal solid waste managed at the rate imposed under section 521.10 297H.05, paragraph (b), unless the tax imposed under section 521.11 297H.05, paragraph (b), was paid. The self-hauler is liable. 521.12 Subd. 2. [PAYMENT; REPORTING.] A generator or self-hauler 521.13 that is liable under subdivision 1 shall report the use tax on a 521.14 return prescribed by the commissioner of revenue, and shall 521.15 remit the tax with the return. The return and the tax must be 521.16 filed using the filing cycle and due dates provided for taxes 521.17 imposed under chapter 297A. 521.18 Subd. 3. [COMMISSIONER ASSESSMENT.] (a) The commissioner 521.19 of revenue may not assess the generator or self-hauler a use tax 521.20 on a transaction for which the waste management service provider 521.21 has paid the solid waste management tax, except as provided in 521.22 paragraph (b). 521.23 (b) If the waste management service provider who is an 521.24 accrual basis taxpayer remits a payment and thereafter offsets 521.25 the amount as a bad debt under section 297H.09, the commissioner 521.26 of revenue may assess the generator or self-hauler a use tax for 521.27 the offset amount. 521.28[EFFECTIVE DATE.] This section is effective for services 521.29 received on or after July 1, 2001. 521.30 Sec. 18. Minnesota Statutes 2000, section 461.12, is 521.31 amended by adding a subdivision to read: 521.32 Subd. 8. [NOTICE TO COMMISSIONER.] The licensing authority 521.33 under this section shall, within 30 days of the issuance of a 521.34 license, inform the commissioner of revenue of the licensee's 521.35 name, address, trade name, and the effective and expiration 521.36 dates of the license. The commissioner of revenue must also be 522.1 informed of a license renewal, transfer, cancellation, 522.2 suspension, or revocation during the license period. 522.3[EFFECTIVE DATE.] This section is effective for licenses 522.4 issued, renewed, transferred, canceled, suspended, or revoked on 522.5 or after January 1, 2002. 522.6 Sec. 19. [REPEALER.] 522.7 Minnesota Statutes 2000, section 296A.16, subdivision 6, is 522.8 repealed. 522.9[EFFECTIVE DATE.] This section is effective the day 522.10 following final enactment. 522.11 ARTICLE 24 522.12 CIVIL AND CRIMINAL PENALTIES 522.13 Section 1. Minnesota Statutes 2000, section 289A.55, 522.14 subdivision 9, is amended to read: 522.15 Subd. 9. [INTEREST ON PENALTIES.] (a) A penalty imposed 522.16 under section 289A.60, subdivision 1, 2,3,2a, 4, 5, 6, or 21 522.17 bears interest from the date the return or payment was required 522.18 to be filed or paid, including any extensions, to the date of 522.19 payment of the penalty. 522.20 (b) A penalty not included in paragraph (a) bears interest 522.21 only if it is not paid within 60 days from the date of notice. 522.22 In that case interest is imposed from the date of notice to the 522.23 date of payment. 522.24[EFFECTIVE DATE.] This section is effective for tax years 522.25 beginning after December 31, 2000, and for estate tax returns 522.26 due after January 1, 2002. 522.27 Sec. 2. Minnesota Statutes 2000, section 289A.60, 522.28 subdivision 1, is amended to read: 522.29 Subdivision 1. [PENALTY FOR FAILURE TO PAY TAX.] (a)If a522.30tax other than a withholding or sales or use tax is not paid522.31within the time specified for payment, a penalty must be added522.32to the amount required to be shown as tax. The penalty is three522.33percent of the tax not paid on or before the date specified for522.34payment of the tax if the failure is for not more than 30 days,522.35with an additional penalty of three percent of the amount of tax522.36remaining unpaid during each additional 30 days or fraction of523.130 days during which the failure continues, not exceeding 24523.2percent in the aggregate.If a corporate franchise, fiduciary 523.3 income, mining company, estate, partnership, S corporation, or 523.4 nonresident entertainer tax is not paid within the time 523.5 specified for payment, a penalty of six percent is added to the 523.6 unpaid tax, except that if a corporation or mining company meets 523.7 the requirements of section 289A.19, subdivision 2, the penalty 523.8 is not imposed. 523.9 (b) For the taxes listed in paragraph (a), in addition to 523.10 the penalty in that paragraph, whether imposed or not, if a 523.11 return or amended return is filed after the due date, without 523.12 regard to extensions, and any tax reported as remaining due is 523.13 not remitted with the return or amended return, a penalty of 523.14 five percent of the tax not paid is added to the tax. If the 523.15 commissioner issues an order assessing additional tax for a tax 523.16 listed in paragraph (a), and the tax is not paid within 60 days 523.17 after the mailing of the order or, if appealed, within 60 days 523.18 after final resolution of the appeal, a penalty of five percent 523.19 of the tax is added to the tax. 523.20 (c)If an individual files a state individual income tax523.21return and pays all of the state individual income tax with the523.22filing of a return within six months of the date the return is523.23due and the amount paid by the due date of the return is at523.24least 90 percent of the amount of tax due, as shown on the523.25return, the individual is presumed to have reasonable cause for523.26the late payment.If an individual income tax is not paid 523.27 within the time specified for payment, a penalty of four percent 523.28 is added to the unpaid tax. There is a presumption of 523.29 reasonable cause for the late payment if the individual: (i) 523.30 pays by the due date of the return at least 90 percent of the 523.31 amount of tax, after credits other than withholding and 523.32 estimated payments, shown owing on the return; (ii) files the 523.33 return within six months after the due date; and (iii) pays the 523.34 remaining balance of the reported tax when the return is filed. 523.35 (d) If the commissioner issues an order assessing 523.36 additional individual income tax, and the tax is not paid within 524.1 60 days after the mailing of the order or, if appealed, within 524.2 60 days after final resolution of the appeal, a penalty of four 524.3 percent of the unpaid tax is added to the tax. 524.4(b)(e) If a withholding or sales or use tax is not paid 524.5 within the time specified for payment, a penalty must be added 524.6 to the amount required to be shown as tax. The penalty is five 524.7 percent of the tax not paid on or before the date specified for 524.8 payment of the tax if the failure is for not more than 30 days, 524.9 with an additional penalty of five percent of the amount of tax 524.10 remaining unpaid during each additional 30 days or fraction of 524.11 30 days during which the failure continues, not exceeding 15 524.12 percent in the aggregate. 524.13[EFFECTIVE DATE.] This section is effective for tax years 524.14 beginning after December 31, 2000, and for estate tax returns 524.15 due after January 1, 2002. 524.16 Sec. 3. Minnesota Statutes 2000, section 289A.60, 524.17 subdivision 2, is amended to read: 524.18 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 524.19 a taxpayer fails to make and file areturn other than an income524.20tax return of an individual, a withholding return, or sales or524.21use tax return, within the time prescribed or an extension, a524.22penalty is added to the tax. The penalty is three percent of524.23the amount of tax not paid on or before the date prescribed for524.24payment of the tax including any extensions if the failure is524.25for not more than 30 days, with an additional five percent of524.26the amount of tax remaining unpaid during each additional 30524.27days or fraction of 30 days, during which the failure continues,524.28not exceeding 23 percent in the aggregate.524.29If a taxpayer fails to file an individual income tax return524.30within six months after the date prescribed for filing of the524.31return, a penalty of ten percent of the amount of tax not paid524.32by the end of that six-month period is added to the tax.524.33If a taxpayer fails to file a withholding or sales or use524.34 tax return within the time prescribed, including an extension, a 524.35 penalty of five percent of the amount of tax nottimelypaid by 524.36 the end of that period is added to the tax. 525.1[EFFECTIVE DATE.] This section is effective for tax years 525.2 beginning after December 31, 2000, and for estate tax returns 525.3 due after January 1, 2002. 525.4 Sec. 4. Minnesota Statutes 2000, section 289A.60, is 525.5 amended by adding a subdivision to read: 525.6 Subd. 2a. [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an 525.7 individual income tax is not paid within 180 days after the date 525.8 of filing of a return or, in the case of taxes assessed by the 525.9 commissioner, within 180 days after the assessment date or, if 525.10 appealed, within 180 days after final resolution of the appeal, 525.11 an extended delinquency penalty of five percent of the tax 525.12 remaining unpaid is added to the amount due. 525.13 (b) If a corporate franchise, fiduciary income, mining 525.14 company, estate, partnership, S corporation, or nonresident 525.15 entertainer tax return is not filed within 30 days after written 525.16 demand for the filing of a delinquent return, an extended 525.17 delinquency penalty of five percent of the tax not paid prior to 525.18 the demand is added to the tax, or in the case of an individual 525.19 income tax return, a minimum penalty of $100 or the five percent 525.20 penalty is imposed, whichever amount is greater. 525.21[EFFECTIVE DATE.] This section is effective for tax years 525.22 beginning after December 31, 2000, and for estate tax returns 525.23 due after January 1, 2002. 525.24 Sec. 5. Minnesota Statutes 2000, section 289A.60, 525.25 subdivision 7, is amended to read: 525.26 Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] Ifan individual525.27 a taxpayer files what purports to be a tax returnrequired by525.28chapter 290or a claim for refund but which does not contain 525.29 information on which the substantial correctness of 525.30 theassessmentpurported return or claim for refund may be 525.31 judged or contains information that on its face shows that the 525.32assessmentpurported return or claim for refund is substantially 525.33 incorrect and the conduct is due to a position that is frivolous 525.34 or a desire that appears on the purported return or claim for 525.35 refund to delay or impede the administration of Minnesota tax 525.36 laws, then the individual shall pay a penalty of $500. In a 526.1 proceeding involving the issue of whether or not a person is 526.2 liable for this penalty, the burden of proof is on the 526.3 commissioner. 526.4[EFFECTIVE DATE.] This section is effective for returns or 526.5 claims for refunds filed on or after the day following final 526.6 enactment. 526.7 Sec. 6. Minnesota Statutes 2000, section 297F.20, 526.8 subdivision 3, is amended to read: 526.9 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 526.10 person who files with the commissioner a return, report, or 526.11 other document, or who maintains or provides invoices subject to 526.12 review by the commissioner under this chapter, known by the 526.13 person to be fraudulent or false concerning a material matter, 526.14 is guilty of a felony. 526.15 (b) A person who knowingly aids or assists in, or advises 526.16 in the preparation or presentation of a return, report, invoice, 526.17 or other document that is fraudulent or false concerning a 526.18 material matter, whether or not the falsity or fraud is 526.19 committed with the knowledge or consent of the person authorized 526.20 or required to present the return, report, invoice, or other 526.21 document, is guilty of a felony. 526.22[EFFECTIVE DATE.] This section is effective for crimes 526.23 occurring on or after July 1, 2001. 526.24 Sec. 7. [APPROPRIATION.] 526.25 $545,000 in fiscal year 2002 and $25,000 in fiscal year 526.26 2003 is appropriated from the general fund to the commissioner 526.27 of revenue to implement sections 2 to 4. $520,000 of the 526.28 appropriation in fiscal year 2002 is for a one-time expenditure 526.29 related to system programming costs. This appropriation is 526.30 available for expenditure until June 30, 2003. 526.31[EFFECTIVE DATE.] This section is effective July 1, 2001. 526.32 Sec. 8. [REPEALER.] 526.33 Minnesota Statutes 2000, section 289A.60, subdivision 3, is 526.34 repealed. 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 ARTICLE 25 527.3 SEIZURES OF CONTRABAND 527.4 Section 1. Minnesota Statutes 2000, section 296A.24, 527.5 subdivision 1, is amended to read: 527.6 Subdivision 1. [SEIZURE.] The commissioner or authorized 527.7 agents may seize gasoline or special fuel being transported for 527.8 delivery in violation of section 296A.03, subdivision 1, and any 527.9 vehicle or other method of conveyance used for transporting the 527.10 gasoline or special fuel. Any untaxed motor vehicle fuel that 527.11 is received by a person other than a licensee is subject to 527.12 seizure along with the vehicle or other means of transportation 527.13 used to transport the motor vehicle fuel. Any motor vehicle 527.14 fuel, along with the transporting vehicle, brought into the 527.15 state of Minnesota by a transporter for use, distribution, 527.16 storage, or sale that is not supported by a manifest, bill of 527.17 lading, or invoice, reflecting the licensed distributor 527.18 responsible for the tax and/or fees is subject to seizure by the 527.19 Minnesota department of revenue. Property seized under this 527.20 subdivision is subject to forfeiture as provided insubdivisions527.21 subdivision 2and 3. 527.22[EFFECTIVE DATE.] This section is effective for seizures 527.23 made on or after July 1, 2001. 527.24 Sec. 2. Minnesota Statutes 2000, section 296A.24, 527.25 subdivision 2, is amended to read: 527.26 Subd. 2. [DISPOSITION OF SEIZED PROPERTY.] (a) Within ten 527.27 days after the seizureof gasoline or special fuel, the person 527.28 making the seizure shalldeliverserve by certified mail an 527.29 inventory of the vehicle or property seizedtoon the person 527.30 from whom the seizure was made, if known, and on any person 527.31 known or believed to have any right, title, interest, or lien on 527.32 the vehicle or property, at the last known address, and file a 527.33 copy withthe office ofthe commissioner. The notice must 527.34 include an explanation of the right to demand a judicial 527.35 forfeiture determination. 527.36 (b) Withinten60 days after the date of service of the 528.1 inventory, which is the date of mailing, the person from whom 528.2 the vehicle or property was seized or any person claiming an 528.3 interest inthe propertyit may filewith the commissionera 528.4 demand for a judicial determination of whether the vehicle or 528.5 property was lawfully subject to seizure and forfeiture.The528.6commissioner, within 60 days of demand for a judicial528.7determination, shall begin an action in the district court of528.8the county where the seizure was made to determine the issue of528.9forfeiture.528.10(b) The action must be brought in the name of the state and528.11prosecuted by the county attorney or by the attorney528.12general.The demand must be in the form of a civil complaint 528.13 and must be filed with the court administrator in the county in 528.14 which the seizure occurred, together with proof of service of a 528.15 copy of the complaint on the commissioner of revenue, and the 528.16 standard filing fee for civil actions unless the petitioner has 528.17 the right to sue in forma pauperis under section 563.01. If the 528.18 value of the seized property or vehicle is $7,500 or less, the 528.19 claimant may file an action in conciliation court for its 528.20 recovery. If the value of the seized property or vehicle is 528.21 less than $500, the claimant does not have to pay the 528.22 conciliation court filing fee. 528.23 (c) The complaint must be captioned in the name of the 528.24 claimant as plaintiff and the seized property or vehicle as 528.25 defendant, and must state with specificity the grounds on which 528.26 the claimant alleges the property or vehicle was improperly 528.27 seized and the plaintiff's interest in the property or vehicle 528.28 seized. No responsive pleading is required of the commissioner 528.29 and no court fees may be charged for the commissioner's 528.30 appearance in the matter. The proceedings are governed by the 528.31 Rules of Civil Procedure. Notwithstanding any law to the 528.32 contrary, an action for the return of property or a vehicle 528.33 seized under this section may not be maintained by or on behalf 528.34 of any person who has been served with an inventory unless the 528.35 person has complied with this subdivision. The court shall hear 528.36 the action without a jury and shall try and determine the issues 529.1 of fact and law involved. 529.2(c)(d) When a judgment of forfeiture is entered, the 529.3 commissioner may, unless the judgment is stayed pending an 529.4 appeal, either: 529.5 (1) cause the forfeitedpropertygasoline or special fuel 529.6 to be destroyed; or 529.7 (2) causeitthe forfeited property in clause (1) or 529.8 vehicle to be sold at public auction as provided by 529.9 law.Proceeds of a sale, after deducting the expense of keeping529.10the gasoline or special fuel and costs of the sale, must be paid529.11into the state treasury. The commissioner shall reimburse529.12designees for costs incurred.After deducting the expense of 529.13 keeping the property and vehicle and the costs of the sale, the 529.14 commissioner shall pay from the funds collected all liens 529.15 according to their priority, which are established as being bona 529.16 fide and as existing without the lienor having any notice or 529.17 knowledge that the property or vehicle was being used or was 529.18 intended to be used for or in connection with any violation, and 529.19 shall pay the balance of the proceeds into the general fund. 529.20(d) If a demand for judicial determination is made and no529.21action is commenced as provided in this subdivision, the529.22property must be released by the commissioner and redelivered to529.23the person entitled to it.(e) If no demand for judicial 529.24 determination is made, the property or vehicle seized must be 529.25 considered forfeited to the state by operation of law and may be 529.26 disposed of by the commissioner as provided where there has been 529.27 a judgment of forfeiture.When the commissioner is satisfied529.28that a person from whom property is seized under this chapter529.29was acting in good faith and without intent to evade the tax,529.30the commissioner shall release the property seized, without529.31further legal proceedings.529.32[EFFECTIVE DATE.] This section is effective for seizures 529.33 made on or after July 1, 2001. 529.34 Sec. 3. Minnesota Statutes 2000, section 297A.91, is 529.35 amended to read: 529.36 297A.91 [SEIZURE; COURT REVIEW.] 530.1 Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL 530.2 TRANSPORT.] (a) If the retailer does not have a sales or use tax 530.3 permit and has been engaging in transporting personal property 530.4 into the state without payment of the tax, the commissioner of 530.5 revenue or the commissioner's agents may seize in the name of 530.6 the state any truck, automobile, or means of transportation not 530.7 owned or operated by a common carrier, used in the illegal 530.8 importation and transportation of any tangible personal property 530.9 by a retailer or the retailer's agent or employee. The 530.10 commissioner may demand the forfeiture and sale of the truck, 530.11 automobile, or other means of transportation together with the 530.12 property being transported illegally, unless the owner 530.13 establishes to the satisfaction of the commissioner or the court 530.14 that the owner had no notice or knowledge or reason to believe 530.15 that the vehicle was used or intended to be used in any such 530.16 violation. 530.17 (b) Withintwoten days after the seizure, the person 530.18 making the seizure shalldeliverserve by certified mail an 530.19 inventory of the vehicle and property seizedtoon the person 530.20 from whom the seizure was made, if known, andtoon any person 530.21 known or believed to have any right, title, interest, or lien on 530.22 the vehicle or property, at the last known address. The person 530.23 making the seizure shall also file a copy of the inventory with 530.24 the commissioner. The notice must include an explanation of the 530.25 right to demand a judicial forfeiture determination. 530.26 Subd. 2. [COURT REVIEW OF FORFEITURE.] (a) Withinten60 530.27 days after the date of service of the inventory, which is the 530.28 date of mailing, the person from whom the vehicle and property 530.29 were seized or any person claiming an interest in the vehicle or 530.30 property may filewith the commissionera demand for a judicial 530.31 determination of the question of whether the vehicle or property 530.32 was lawfully subject to seizure and forfeiture.The530.33commissioner, within 30 days, shall institute an action in the530.34district court of the county where the seizure was made to530.35determine the issue of forfeiture.530.36 (b)The action must be brought in the name of the state and531.1prosecuted by the county attorney or the attorney general.The 531.2 demand must be in the form of a civil complaint and must be 531.3 filed with the court administrator in the county in which the 531.4 seizure occurred, together with proof of service or a copy of 531.5 the complaint on the commissioner of revenue, and the standard 531.6 filing fee for civil actions unless the petitioner has the right 531.7 to sue in forma pauperis under section 563.01. If the value of 531.8 the seized property or vehicle is $7,500 or less, the claimant 531.9 may file an action in conciliation court for its recovery. If 531.10 the value of the seized property or vehicle is less than $500, 531.11 the claimant does not have to pay the conciliation court filing 531.12 fee. 531.13 (c) The complaint must be captioned in the name of the 531.14 claimant as plaintiff and the seized property or vehicle as 531.15 defendant, and must state with specificity the grounds on which 531.16 the claimant alleges the property or vehicle was improperly 531.17 seized and the plaintiff's interest in the property or vehicle 531.18 seized. No responsive pleading is required of the commissioner, 531.19 and no court fees may be charged for the commissioner's 531.20 appearance in the matter. The proceedings are governed by the 531.21 Rules of Civil Procedure. Notwithstanding any law to the 531.22 contrary, an action for the return of property or a vehicle 531.23 seized under this subdivision may not be maintained by or on 531.24 behalf of any person who has been served with an inventory 531.25 unless the person has complied with this subdivision. The court 531.26 shall hear the action without a jury and shall determine the 531.27 issues of fact and law involved. If a judgment of forfeiture is 531.28 entered and is not stayed pending an appeal, the commissioner 531.29 may have the forfeited vehicle and property sold at public 531.30 auction as provided by law. 531.31 Subd. 3. [TREATMENT OF SEIZED PROPERTY.]If a demand for531.32judicial determination is made and no action is commenced as531.33provided in this subdivision, the vehicle and property must be531.34released by the commissioner and redelivered to the person531.35entitled to it.If no demand for judicial determination is 531.36 made, the vehicle and property seized are considered forfeited 532.1 to the state by operation of law and may be disposed of by the 532.2 commissioner as if there were a judgment of forfeiture. The 532.3 forfeiture and sale of the automobile, truck, or other means of 532.4 transportation, and of the property being transported illegally 532.5 in it, are a penalty for the violation of this chapter. After 532.6 deducting the expense of keeping the vehicle and property, the 532.7 fee for seizure, and the costs of the sale, the commissioner 532.8 shall pay liens from the funds collected. The commissioner 532.9 shall pay all liens, according to their priority, that are 532.10 establishedat the hearingas being bona fide and as existing 532.11 without the lienor having any notice or knowledge that the 532.12 vehicle or property was being used or was intended to be used 532.13 for or in connection with any such violationas specified in the532.14order of the court. The commissioner shall pay the balance of 532.15 the proceeds into the state treasury to be credited to the 532.16 general fund. The state is not liable for any liens in excess 532.17 of the proceeds from the sale after allowable deductions. A 532.18 sale under this section frees the vehicle and property sold from 532.19 all liens.The order of the district court may be appealed as532.20in other civil cases.532.21[EFFECTIVE DATE.] This section is effective for seizures 532.22 made on or after July 1, 2001. 532.23 Sec. 4. Minnesota Statutes 2000, section 297E.16, 532.24 subdivision 1, is amended to read: 532.25 Subdivision 1. [SEIZURE.] Contraband may be seized by the 532.26 commissioner or by any sheriff or other police officer, 532.27 hereinafter referred to as the "seizing authority," with or 532.28 without process, and is subject to forfeiture as provided in 532.29subdivisionssubdivision 2and 3. 532.30[EFFECTIVE DATE.] This section is effective for seizures 532.31 made on or after July 1, 2001. 532.32 Sec. 5. Minnesota Statutes 2000, section 297E.16, 532.33 subdivision 2, is amended to read: 532.34 Subd. 2. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 532.35 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 532.36 seizure of alleged contraband described in section 349.2125, 533.1 subdivision 1, the person making the seizure shallmake533.2availableserve by certified mail an inventory of the property 533.3 seizedtoon the person from whom the property was seized, if 533.4 known, and on any person known or believed to have any right, 533.5 title, interest, or lien in the property, at the last known 533.6 address, and file a copy with the commissioner or the director 533.7 of alcohol and gambling enforcement. The notice must include an 533.8 explanation of the right to demand a judicial forfeiture 533.9 determination. 533.10 (b) Withinten60 days after the date of service of the 533.11 inventory, which is the date of mailing, the person from whom 533.12 the property was seized or any person claiming an interest in 533.13 the property may filewith the seizing authoritya demand for 533.14 judicial determination of whether the property was lawfully 533.15 subject to seizure and forfeiture.Within 60 days after the533.16date of filing of the demand, the seizing authority must bring533.17an action in the district court of the county where seizure was533.18made to determine the issue of forfeiture. The action must be533.19brought in the name of the state and be prosecuted by the county533.20attorney or by the attorney general.The demand must be in the 533.21 form of a civil complaint and must be filed with the court 533.22 administrator in the county in which the seizure occurred, 533.23 together with proof of service of a copy of the complaint on the 533.24 commissioner of revenue or the director of alcohol and gambling 533.25 enforcement, and the standard filing fee for civil actions 533.26 unless the petitioner has the right to sue in forma pauperis 533.27 under section 563.01. If the value of the seized property is 533.28 $7,500 or less, the claimant may file an action in conciliation 533.29 court for recovery of the property. If the value of the seized 533.30 property is less than $500, the claimant does not have to pay 533.31 the conciliation court filing fee. 533.32 (c) The complaint must be captioned in the name of the 533.33 claimant as plaintiff and the seized property as defendant, and 533.34 must state with specificity the grounds on which the claimant 533.35 alleges the property was improperly seized and the plaintiff's 533.36 interest in the property seized. No responsive pleading is 534.1 required of the commissioner or director, and no court fees may 534.2 be charged for the commissioner's or director's appearance in 534.3 the matter. The proceedings are governed by the Rules of Civil 534.4 Procedure. Notwithstanding any law to the contrary, an action 534.5 for the return of property seized under this section may not be 534.6 maintained by or on behalf of any person who has been served 534.7 with an inventory unless the person has complied with this 534.8 subdivision. The court shall hear the action without a jury and 534.9 determine the issues of fact and law involved. 534.10 (d) If a judgment of forfeiture is entered, the seizing 534.11 authority may, unless the judgment is stayed pending an appeal, 534.12 either (1) cause the forfeited property, other than a vehicle, 534.13 to be destroyed; or (2) cause it to be sold at a public auction 534.14 as provided by law. The person making a sale, after deducting 534.15 the expense of keeping the property, the fee for seizure, and 534.16 the costs of the sale, shall pay all liens according to their 534.17 priority, which are established as being bona fide and as 534.18 existing without the lienor having any notice or knowledge that 534.19 the property was being used or was intended to be used for or in 534.20 connection with the violation. The balance of the proceeds must 534.21 be paid 70 percent to the seizing authority for deposit as a 534.22 supplement to its operating fund or similar fund for official 534.23 use, and 20 percent to the county attorney or other prosecuting 534.24 agency that handled the court proceeding, if there is one, for 534.25 deposit as a supplement to its operating fund or similar fund 534.26 for prosecutorial purposes. The remaining ten percent of the 534.27 proceeds must be forwarded within 60 days after resolution of 534.28 the forfeiture to the department of human services to fund 534.29 programs for the treatment of compulsive gamblers. If there is 534.30 no prosecuting authority involved in the forfeiture, the 20 534.31 percent of the proceeds otherwise designated for the prosecuting 534.32 authority must be deposited into the general fund. 534.33If demand for judicial determination is made and no action534.34is commenced by the seizing authority as provided in this534.35subdivision, the property must be released by the seizing534.36authority and delivered to the person entitled to it.(e) If no 535.1 demand for judicial determination is made, the property seized 535.2 is considered forfeited to the seizing authority by operation of 535.3 law and may be disposed of by the seizing authority as provided 535.4 where there has been a judgment of forfeiture.When the seizing535.5authority is satisfied that a person from whom property is535.6seized was acting in good faith and without intent to evade the535.7tax imposed by section 297E.02, the seizing authority shall535.8release the property seized without further legal proceedings. 535.9[EFFECTIVE DATE.] This section is effective for seizures 535.10 made on or after July 1, 2001. 535.11 Sec. 6. Minnesota Statutes 2000, section 297F.21, 535.12 subdivision 1, is amended to read: 535.13 Subdivision 1. [CONTRABAND DEFINED.] The following are 535.14 declared to be contraband and therefore subject to civil and 535.15 criminal penalties under this chapter: 535.16 (a) Cigarette packages which do not have stamps affixed to 535.17 them as provided in this chapter, including but not limited to 535.18 (i) packages with illegible stamps and packages with stamps that 535.19 are not complete or whole even if the stamps are legible, and 535.20 (ii) all devices for the vending of cigarettes in which packages 535.21 as defined in item (i) are found, including all contents 535.22 contained within the devices. 535.23 (b) A device for the vending of cigarettes and all packages 535.24 of cigarettes, where the device does not afford at least partial 535.25 visibility of contents. Where any package exposed to view does 535.26 not carry the stamp required by this chapter, it shall be 535.27 presumed that all packages contained in the device are unstamped 535.28 and contraband. 535.29 (c) A device for the vending of cigarettes to which the 535.30 commissioner or authorized agents have been denied access for 535.31 the inspection of contents. In lieu of seizure, the 535.32 commissioner or an agent may seal the device to prevent its use 535.33 until inspection of contents is permitted. 535.34 (d) A device for the vending of cigarettes which does not 535.35 carry the name and address of the owner, plainly marked and 535.36 visible from the front of the machine. 536.1 (e) A device including, but not limited to, motor vehicles, 536.2 trailers, snowmobiles, airplanes, and boats used with the 536.3 knowledge of the owner or of a person operating with the consent 536.4 of the owner for the storage or transportation of more than 536.5 5,000 cigarettes which are contraband under this subdivision. 536.6 When cigarettes are being transported in the course of 536.7 interstate commerce, or are in movement from either a public 536.8 warehouse to a distributor upon orders from a manufacturer or 536.9 distributor, or from one distributor to another, the cigarettes 536.10 are not contraband, notwithstanding the provisions of clause (a). 536.11 (f) A device including, but not limited to, motor vehicles, 536.12 trailers, snowmobiles, airplanes, and boats used with the 536.13 knowledge of the owner, or of a person operating with the 536.14 consent of the owner, for the storage or transportation of 536.15 untaxed tobacco products intended for sale in Minnesota other 536.16 than those in the possession of a licensed distributor on or 536.17 before the due date for payment of the tax under section 536.18 297F.09, subdivision 2. 536.19 (g) Cigarette packages or tobacco products obtained from an 536.20 unlicensed seller. 536.21(g)(h) Cigarette packages offered for sale or held as 536.22 inventory in violation of section 297F.20, subdivision 7. 536.23(h)(i) Tobacco products on which the tax has not been paid 536.24 by a licensed distributor. 536.25(i)(j) Any cigarette packages or tobacco products offered 536.26 for sale or held as inventory for which there is not an invoice 536.27 from a licensed seller as required under section 297F.13, 536.28 subdivision 4. 536.29(j)(k) Cigarette packages which have been imported into 536.30 the United States in violation of United States Code, title 26, 536.31 section 5754. All cigarettes held in violation of that section 536.32 shall be presumed to have entered the United States after 536.33 December 31, 1999, in the absence of proof to the contrary. 536.34[EFFECTIVE DATE.] This section is effective for seizures 536.35 made on or after July 1, 2001. 536.36 Sec. 7. Minnesota Statutes 2000, section 297F.21, 537.1 subdivision 2, is amended to read: 537.2 Subd. 2. [SEIZURE.] Cigarettes, tobacco products, or other 537.3 property made contraband by subdivision 1 may be seized by the 537.4 commissioner or authorized agents or by any sheriff or other 537.5 police officer, with or without process, and are subject to 537.6 forfeiture as provided insubdivisionssubdivision 3and 4. 537.7[EFFECTIVE DATE.] This section is effective for seizures 537.8 made on or after July 1, 2001. 537.9 Sec. 8. Minnesota Statutes 2000, section 297F.21, 537.10 subdivision 3, is amended to read: 537.11 Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 537.12 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 537.13 seizure of any alleged contraband, the person making the seizure 537.14 shallmake availableserve by certified mail an inventory of the 537.15 property seizedtoon the person from whom the seizure was made, 537.16 if known, and on any person known or believed to have any right, 537.17 title, interest, or lien in the property, at the last known 537.18 address, and file a copy with the commissioner. The notice must 537.19 include an explanation of the right to demand a judicial 537.20 forfeiture determination. 537.21 (b) Withinten60 days after the date of service of the 537.22 inventory, which is the date of mailing, the person from whom 537.23 the property was seized or any person claiming an interest in 537.24 the property may filewith the commissionera demand for a 537.25 judicial determination of the question as to whether the 537.26 property was lawfully subject to seizure and forfeiture.The537.27commissioner, within 60 days, shall institute an action in the537.28district court of the county where the seizure was made to537.29determine the issue of forfeiture.The demand must be in the 537.30 form of a civil complaint and must be filed with the court 537.31 administrator in the county in which the seizure occurred, 537.32 together with proof of service of a copy of the complaint on the 537.33 commissioner of revenue, and the standard filing fee for civil 537.34 actions unless the petitioner has the right to sue in forma 537.35 pauperis under section 563.01. If the value of the seized 537.36 property is $7,500 or less, the claimant may file an action in 538.1 conciliation court for recovery of the property. If the value 538.2 of the seized property is less than $500, the claimant does not 538.3 have to pay the conciliation court filing fee. 538.4 (c) The complaint must be captioned in the name of the 538.5 claimant as plaintiff and the seized property as defendant, and 538.6 must state with specificity the grounds on which the claimant 538.7 alleges the property was improperly seized and the plaintiff's 538.8 interest in the property seized. No responsive pleading is 538.9 required of the commissioner, and no court fees may be charged 538.10 for the commissioner's appearance in the matter. The 538.11 proceedings are governed by the Rules of Civil Procedure. 538.12 Notwithstanding any law to the contrary, an action for the 538.13 return of property seized under this section may not be 538.14 maintained by or on behalf of any person who has been served 538.15 with an inventory unless the person has complied with this 538.16 subdivision. The court shall decide whether the alleged 538.17 contraband is contraband, as defined in subdivision 1. 538.18(b) The action must be brought in the name of the state and538.19must be prosecuted by the county attorney or by the attorney538.20general.The court shall hear the action without a jury and 538.21 shall try and determine the issues of fact and law involved. 538.22(c)(d) When a judgment of forfeiture is entered, the 538.23 commissioner may, unless the judgment is stayed pending an 538.24 appeal, either: 538.25 (1) deliver the forfeitedpropertycigarette packages or 538.26 tobacco products to the commissioner of human services for use 538.27 by patients in state institutions; 538.28 (2) causeitthe property in clause (1) to be destroyed; or 538.29 (3) causeitthe forfeited property to be sold at public 538.30 auction as provided by law. 538.31 The person making a sale, after deducting the expense of keeping 538.32 the property, the fee for seizure, and the costs of the sale, 538.33 shall pay all liens according to their priority, which are 538.34 established as being bona fide and as existing without the 538.35 lienor having any notice or knowledge that the property was 538.36 being used or was intended to be used for or in connection with 539.1 the violation. The balance of the proceeds must be paid 75 539.2 percent to the department of revenue for deposit as a supplement 539.3 to its operating fund or similar fund for official use, and 25 539.4 percent to the county attorney or other prosecuting agency that 539.5 handled the court proceeding, if there is one, for deposit as a 539.6 supplement to its operating fund or similar fund for 539.7 prosecutorial purposes. If there is no prosecuting authority 539.8 involved in the forfeiture, the 25 percent of the proceeds 539.9 otherwise designated for the prosecuting authority must be 539.10 deposited into the general fund. 539.11(d) If a demand for judicial determination is made and no539.12action commenced as provided in this subdivision, the property539.13must be released by the commissioner and returned to the person539.14entitled to it.(e) If no demand for judicial determination is 539.15 made, the property seized is considered forfeited to the state 539.16 by operation of law and may be disposed of by the commissioner 539.17 as provided in the case of a judgment of forfeiture. 539.18[EFFECTIVE DATE.] This section is effective for seizures 539.19 made on or after July 1, 2001. 539.20 Sec. 9. Minnesota Statutes 2000, section 297G.20, 539.21 subdivision 3, is amended to read: 539.22 Subd. 3. [SEIZURE.] Distilled spirits, wine, fermented 539.23 malt beverages, or other property made contraband by subdivision 539.24 1 may be seized by the commissioner of revenue or public safety 539.25 and their authorized agents or by any sheriff or other police 539.26 officer, with or without process, and are subject to forfeiture 539.27 as provided insubdivisionssubdivision 4and 5. 539.28[EFFECTIVE DATE.] This section is effective for seizures 539.29 made on or after July 1, 2001. 539.30 Sec. 10. Minnesota Statutes 2000, section 297G.20, 539.31 subdivision 4, is amended to read: 539.32 Subd. 4. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 539.33 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 539.34 seizure of alleged contraband, the person making the seizure 539.35 shallmake availableserve by certified mail an inventory of the 539.36 property seizedtoon the person from whom the property was 540.1 seized, if known, and on any person known or believed to have 540.2 any right, title, interest, or lien in the property, at the last 540.3 known address, and file a copy with both the commissioners of 540.4 revenue and public safety. The notice must include an 540.5 explanation of the right to demand a judicial forfeiture 540.6 determination. 540.7 (b) Withinten60 days after the date of service of the 540.8 inventory, which is the date of mailing, the person from whom 540.9 the property was seized or any person claiming an interest in 540.10 the property may filewith the seizing authoritya demand for 540.11 judicial determination of whether the property was lawfully 540.12 subject to seizure and forfeiture.Within 60 days after the540.13date of the filing of the demand, the seizing authority must540.14bring an action in the district court of the county where540.15seizure was made to determine the issue of forfeiture.The 540.16 demand must be in the form of a civil complaint and must be 540.17 filed with the court administrator in the county in which the 540.18 seizure occurred, together with proof of service of a copy of 540.19 the complaint on the commissioner of revenue or public safety, 540.20 and the standard filing fee for civil actions unless the 540.21 petitioner has the right to sue in forma pauperis under section 540.22 563.01. If the value of the seized property or vehicle is 540.23 $7,500 or less, the claimant may file an action in conciliation 540.24 court for recovery of the property. If the value of the seized 540.25 property is less than $500, the claimant does not have to pay 540.26 the conciliation court filing fee. 540.27 (c) The complaint must be captioned in the name of the 540.28 claimant as plaintiff and the seized property as defendant, and 540.29 must state with specificity the grounds on which the claimant 540.30 alleges the property was improperly seized and the plaintiff's 540.31 interest in the property seized. No responsive pleading is 540.32 required of the commissioner of revenue or public safety and no 540.33 court fees may be charged for either commissioner's appearance 540.34 in the matter. The proceedings are governed by the Rules of 540.35 Civil Procedure. Notwithstanding any law to the contrary, an 540.36 action for the return of property seized under this section may 541.1 not be maintained by or on behalf of any person who has been 541.2 served with an inventory unless the person has complied with 541.3 this subdivision. 541.4(b) The action must be brought in the name of the state and541.5must be prosecuted by the county attorney or by the attorney541.6general.The court shall hear the action without a jury and 541.7 determine the issues of fact and law involved. 541.8(c)(d) If a judgment of forfeiture is entered, the seizing 541.9 authority may, unless the judgment is stayed pending an appeal, 541.10 either: 541.11 (1) cause the forfeited property, other than a vehicle, to 541.12 be destroyed; or 541.13 (2) cause it to be sold at a public auction as provided by 541.14 law. 541.15 The person making a sale, after deducting the expense of 541.16 keeping the property, the fee for seizure, and the costs of the 541.17 sale, shall pay all liens according to their priority, which are 541.18 established as being bona fide and as existing without the 541.19 lienor having any notice or knowledge that the property was 541.20 being used or was intended to be used for or in connection with 541.21 the violation. The balance of the proceeds must be paid 75 541.22 percent to the seizing authority for deposit as a supplement to 541.23 its operating fund or similar fund for official use, and 25 541.24 percent to the county attorney or other prosecuting agency that 541.25 handled the court proceeding, if there is one, for deposit as a 541.26 supplement to its operating fund or similar fund for 541.27 prosecutorial purposes. If there is no prosecuting authority 541.28 involved in the forfeiture, the 25 percent of the proceeds 541.29 otherwise designated for the prosecuting authority must be 541.30 deposited into the general fund. 541.31(d) If demand for judicial determination is made and no541.32action is commenced by the seizing authority as provided in this541.33subdivision, the property must be released by the seizing541.34authority and delivered to the person entitled to it.(e) If no 541.35 demand is made, the property seized is considered forfeited to 541.36 the seizing authority by operation of law and may be disposed of 542.1 by the seizing authority as provided for a judgment of 542.2 forfeiture.When the seizing authority is satisfied that a542.3person from whom property is seized was acting in good faith and542.4without intent to evade the tax imposed by this chapter, the542.5seizing authority shall release the property seized without542.6further legal proceedings.542.7[EFFECTIVE DATE.] This section is effective for seizures 542.8 made on or after July 1, 2001. 542.9 Sec. 11. [REPEALER.] 542.10 Minnesota Statutes 2000, sections 296A.24, subdivision 3; 542.11 297E.16, subdivision 3; 297F.21, subdivision 4; and 297G.20, 542.12 subdivision 5, are repealed. 542.13[EFFECTIVE DATE.] This section is effective for seizures 542.14 made on or after July 1, 2001. 542.15 ARTICLE 26 542.16 REVENUE DATA 542.17 Section 1. Minnesota Statutes 2000, section 270A.11, is 542.18 amended to read: 542.19 270A.11 [DATA PRIVACY.] 542.20 Private and confidential data on individuals may be 542.21 exchanged among the department, the taxpayer's rights advocate, 542.22 the attorney general, the claimant agency, and the debtor as 542.23 necessary to accomplish and effectuate the intent of sections 542.24 270A.01 to 270A.12, as provided by section 13.05, subdivision 4, 542.25 clause (b). The department may disclose to the claimant agency 542.26 only the debtor's name, address, social security number and the 542.27 amount of the refund, and in the case of a joint return, the 542.28 name of the debtor's spouse. Any person employed by, or 542.29 formerly employed by, a claimant agency who discloses any such 542.30 information for any other purpose, shall be subject to the civil 542.31 and criminal penalties of section 270B.18. Data collected by 542.32 the department from claimant agencies relating to claims filed 542.33 under this chapter are private data on individuals. 542.34[EFFECTIVE DATE.] This section is effective the day 542.35 following final enactment. 542.36 Sec. 2. Minnesota Statutes 2000, section 270B.02, 543.1 subdivision 2, is amended to read: 543.2 Subd. 2. [PROTECTED NONPUBLIC DATA.] The following are 543.3 protected nonpublic data as defined in section 13.02, 543.4 subdivision 13: 543.5 (1) criteria for determining which computer processed 543.6 returns are selected for audit; 543.7 (2) criteria for determining which returns are selected for 543.8 an in-depth audit;and543.9 (3) criteria for determining which accounts receivable 543.10 balances below a stated amount are written off or canceled; and 543.11 (4) criteria or information used in determining which 543.12 alleged criminal violations of any law administered by the 543.13 commissioner are selected for criminal investigation. 543.14[EFFECTIVE DATE.] This section is effective the day 543.15 following final enactment. 543.16 Sec. 3. Minnesota Statutes 2000, section 270B.02, 543.17 subdivision 3, is amended to read: 543.18 Subd. 3. [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 543.19 NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 543.20 name or existence of an informer, informer letters, and other 543.21unsoliciteddata, in whatever form, given to the department of 543.22 revenue by a person, other than the data subject, who informs 543.23 that a specific taxpayer is not or may not be in compliance with 543.24 tax laws, or nontax laws administered by the department of 543.25 revenue, including laws not listed in section 270B.01, 543.26 subdivision 8, are confidential data on individuals or protected 543.27 nonpublic data as defined in section 13.02, subdivisions 3 and 543.28 13. 543.29 (b) Data under paragraph (a) may be disclosed with the 543.30 consent of the informer or upon a written finding by a court 543.31 that the information provided by the informer was false and that 543.32 there is evidence that the information was provided in bad 543.33 faith. This subdivision does not alter disclosure 543.34 responsibilities or obligations under the rules of criminal 543.35 procedure. 543.36[EFFECTIVE DATE.] This section is effective the day 544.1 following final enactment. 544.2 Sec. 4. Minnesota Statutes 2000, section 270B.03, 544.3 subdivision 6, is amended to read: 544.4 Subd. 6. [INVESTIGATIVE DATA.] For purposes of any law 544.5 administered by the department of revenue, including laws not 544.6 listed in section 270B.01, subdivision 8, investigative data 544.7 collected or created by the department of revenue in order to 544.8 prepare a case against a person, whether known or unknown, for 544.9 the commission of a crime is confidential or protected nonpublic 544.10 during an investigation. When the investigation becomes 544.11 inactive, as defined in section 13.82, subdivision 5, the 544.12classifications otherwise applicable under any other laws become544.13effectivedata is private or nonpublic. 544.14[EFFECTIVE DATE.] This section is effective the day 544.15 following final enactment. 544.16 ARTICLE 27 544.17 MISCELLANEOUS 544.18 Section 1. Minnesota Statutes 2000, section 16D.08, 544.19 subdivision 2, is amended to read: 544.20 Subd. 2. [POWERS.] (a) In addition to the collection 544.21 remedies available to private collection agencies in this state, 544.22 the commissioner, with legal assistance from the attorney 544.23 general, may utilize any statutory authority granted to a 544.24 referring agency for purposes of collecting debt owed to that 544.25 referring agency. The commissioner may also delegate to the 544.26 enterprise the tax collection remedies in sections 270.06, 544.27 clauses (7) and (17), excluding the power to subpoena witnesses; 544.28 270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 544.29 excluding subdivision 14; 270.7001 to 270.72; and 290.92, 544.30 subdivision 23, except that a continuous wage levy under section 544.31 290.92, subdivision 23, is only effective for 70 days, unless no 544.32 competing wage garnishments, executions, or levies are served 544.33 within the 70-day period, in which case a wage levy is 544.34 continuous until a competing garnishment, execution, or levy is 544.35 served in the second or a succeeding 70-day period, in which 544.36 case a continuous wage levy is effective for the remainder of 545.1 that period. A debtor who qualifies for cancellation of 545.2 collection costs under section 16D.11, subdivision 3, clause 545.3 (1), can apply to the commissioner for reduction or release of a 545.4 continuous wage levy, if the debtor establishes that the debtor 545.5 needs all or a portion of the wages being levied upon to pay for 545.6 essential living expenses, such as food, clothing, shelter, 545.7 medical care, or expenses necessary for maintaining employment. 545.8 The commissioner's determination not to reduce or release a 545.9 continuous wage levy is appealable to district court. The word 545.10 "tax" or "taxes" when used in the tax collection statutes listed 545.11 in this subdivision also means debts referred under this chapter. 545.12 (b) For debts other than state taxesor, child support, or 545.13 student loans, before any of the tax collection remedies listed 545.14 in this subdivision can be used, except for the remedies in 545.15 section 270.06, clauses (7) and (17), if the referring agency 545.16 has not already obtained a judgment or filed a lien, the 545.17 commissioner must first obtain a judgment against the debtor. 545.18 For student loans when the referring agency has not obtained a 545.19 judgment or filed a lien, before using the tax collection 545.20 remedies listed in this subdivision, except for the remedies in 545.21 section 270.06, clauses (7) and (17), the commissioner shall 545.22 give the debtor 30 days' notice in writing, which may be served 545.23 in any manner permitted in section 270.68 for service of a 545.24 summons and complaint. The notice must advise the debtor of the 545.25 debtor's right to request that the commissioner commence a court 545.26 action, and that if no such request is made within 30 days after 545.27 service of the notice, the commissioner may use these tax 545.28 collection remedies. If a timely request is made, the 545.29 commissioner shall obtain a judgment before using these tax 545.30 collection remedies. 545.31[EFFECTIVE DATE.] This section is effective for student 545.32 loans referred to the commissioner for collection on or after 545.33 July 1, 2001. 545.34 Sec. 2. Minnesota Statutes 2000, section 144.3831, 545.35 subdivision 2, is amended to read: 545.36 Subd. 2. [COLLECTION AND PAYMENT OF FEE.] The public water 546.1 supply described in subdivision 1 shall: 546.2 (1) collect the fees assessed on its service connections; 546.3 (2) pay the department ofrevenuehealth an amount 546.4 equivalent to the fees based on the total number of service 546.5 connections. The service connections for each public water 546.6 supply described in subdivision 1 shall be verified every four 546.7 years by the department of health; and 546.8 (3) pay one-fourth of the total yearly fee to the 546.9 department ofrevenuehealth each calendar quarter. The first 546.10 quarterly payment is due on or before September 30, 1992. In 546.11 lieu of quarterly payments, a public water supply described in 546.12 subdivision 1 with fewer than 50 service connections may make a 546.13 single annual payment by June 30 each year, starting in 1993. 546.14 The fees payable to the department ofrevenuehealth shall be 546.15 deposited in the state treasury as nondedicated state government 546.16 special revenue fund revenues. 546.17[EFFECTIVE DATE.] This section is effective the day 546.18 following final enactment. 546.19 Sec. 3. Minnesota Statutes 2000, section 270.06, is 546.20 amended to read: 546.21 270.06 [POWERS AND DUTIES.] 546.22 The commissioner of revenue shall: 546.23 (1) have and exercise general supervision over the 546.24 administration of the assessment and taxation laws of the state, 546.25 over assessors, town, county, and city boards of review and 546.26 equalization, and all other assessing officers in the 546.27 performance of their duties, to the end that all assessments of 546.28 property be made relatively just and equal in compliance with 546.29 the laws of the state; 546.30 (2) confer with, advise, and give the necessary 546.31 instructions and directions to local assessors and local boards 546.32 of review throughout the state as to their duties under the laws 546.33 of the state; 546.34 (3) direct proceedings, actions, and prosecutions to be 546.35 instituted to enforce the laws relating to the liability and 546.36 punishment of public officers and officers and agents of 547.1 corporations for failure or negligence to comply with the 547.2 provisions of the laws of this state governing returns of 547.3 assessment and taxation of property, and cause complaints to be 547.4 made against local assessors, members of boards of equalization, 547.5 members of boards of review, or any other assessing or taxing 547.6 officer, to the proper authority, for their removal from office 547.7 for misconduct or negligence of duty; 547.8 (4) require county attorneys to assist in the commencement 547.9 of prosecutions in actions or proceedings for removal, 547.10 forfeiture and punishment for violation of the laws of this 547.11 state in respect to the assessment and taxation of property in 547.12 their respective districts or counties; 547.13 (5) require town, city, county, and other public officers 547.14 to report information as to the assessment of property, 547.15 collection of taxes received from licenses and other sources, 547.16 and such other information as may be needful in the work of the 547.17 department of revenue, in such form and upon such blanks as the 547.18 commissioner may prescribe; 547.19 (6) require individuals, copartnerships, companies, 547.20 associations, and corporations to furnish information concerning 547.21 their capital, funded or other debt, current assets and 547.22 liabilities, earnings, operating expenses, taxes, as well as all 547.23 other statements now required by law for taxation purposes; 547.24 (7) subpoena witnesses, at a time and place reasonable 547.25 under the circumstances, to appear and give testimony, and to 547.26 produce books, records, papers and documents for inspection and 547.27 copying relating to any matter which the commissioner may have 547.28 authority to investigate or determine; 547.29 (8) issue a subpoena which does not identify the person or 547.30 persons with respect to whose liability the subpoena is issued, 547.31 but only if (a) the subpoena relates to the investigation of a 547.32 particular person or ascertainable group or class of persons, 547.33 (b) there is a reasonable basis for believing that such person 547.34 or group or class of persons may fail or may have failed to 547.35 comply with any law administered by the commissioner, (c) the 547.36 information sought to be obtained from the examination of the 548.1 records (and the identity of the person or persons with respect 548.2 to whose liability the subpoena is issued) is not readily 548.3 available from other sources, (d) the subpoena is clear and 548.4 specific as to the information sought to be obtained, and (e) 548.5 the information sought to be obtained is limited solely to the 548.6 scope of the investigation. Provided further that the party 548.7 served with a subpoena which does not identify the person or 548.8 persons with respect to whose tax liability the subpoena is 548.9 issued shall have the right, within 20 days after service of the 548.10 subpoena, to petition the district court for the judicial 548.11 district in which lies the county in which that party is located 548.12 for a determination as to whether the commissioner of revenue 548.13 has complied with all the requirements in (a) to (e), and thus, 548.14 whether the subpoena is enforceable. If no such petition is 548.15 made by the party served within the time prescribed, the 548.16 subpoena shall have the force and effect of a court order; 548.17 (9) cause the deposition of witnesses residing within or 548.18 without the state, or absent therefrom, to be taken, upon notice 548.19 to the interested party, if any, in like manner that depositions 548.20 of witnesses are taken in civil actions in the district court, 548.21 in any matter which the commissioner may have authority to 548.22 investigate or determine; 548.23 (10) investigate the tax laws of other states and countries 548.24 and to formulate and submit to the legislature such legislation 548.25 as the commissioner may deem expedient to prevent evasions of 548.26 assessment and taxing laws, and secure just and equal taxation 548.27 and improvement in the system of assessment and taxation in this 548.28 state; 548.29 (11) consult and confer with the governor upon the subject 548.30 of taxation, the administration of the laws in regard thereto, 548.31 and the progress of the work of the department of revenue, and 548.32 furnish the governor, from time to time, such assistance and 548.33 information as the governor may require relating to tax matters; 548.34 (12) transmit to the governor, on or before the third 548.35 Monday in December of each even-numbered year, and to each 548.36 member of the legislature, on or before November 15 of each 549.1 even-numbered year, the report of the department of revenue for 549.2 the preceding years, showing all the taxable property in the 549.3 state and the value of the same, in tabulated form; 549.4 (13) inquire into the methods of assessment and taxation 549.5 and ascertain whether the assessors faithfully discharge their 549.6 duties, particularly as to their compliance with the laws 549.7 requiring the assessment of all property not exempt from 549.8 taxation; 549.9 (14) administer and enforce the assessment and collection 549.10 of state taxes and fees, including the use of any remedy 549.11 available to nongovernmental creditors, and, from time to time, 549.12 make, publish, and distribute rules for the administration and 549.13 enforcement of assessments and fees administered by the 549.14 commissioner and state tax laws. The rules have the force of 549.15 law; 549.16 (15) prepare blank forms for the returns required by state 549.17 tax law and distribute them throughout the state, furnishing 549.18 them subject to charge on application; 549.19 (16) prescribe rules governing the qualification and 549.20 practice of agents, attorneys, or other persons representing 549.21 taxpayers before the commissioner. The rules may require that 549.22 those persons, agents, and attorneys show that they are of good 549.23 character and in good repute, have the necessary qualifications 549.24 to give taxpayers valuable services, and are otherwise competent 549.25 to advise and assist taxpayers in the presentation of their case 549.26 before being recognized as representatives of taxpayers. After 549.27 due notice and opportunity for hearing, the commissioner may 549.28 suspend anddisbarbar from further practice before the 549.29 commissioner any person, agent, or attorney who is shown to be 549.30 incompetent or disreputable, who refuses to comply with the 549.31 rules, or who with intent to defraud, willfully or knowingly 549.32 deceives, misleads, or threatens a taxpayer or prospective 549.33 taxpayer, by words, circular, letter, or by advertisement. This 549.34 clause does not curtail the rights of individuals to appear in 549.35 their own behalf or partners or corporations' officers to appear 549.36 in behalf of their respective partnerships or corporations; 550.1 (17) appoint agents as the commissioner considers necessary 550.2 to make examinations and determinations. The agents have the 550.3 rights and powers conferred on the commissioner to subpoena, 550.4 examine, and copy books, records, papers, or memoranda, subpoena 550.5 witnesses, administer oaths and affirmations, and take 550.6 testimony. In addition to administrative subpoenas of the 550.7 commissioner and the agents, upon demand of the commissioner or 550.8 an agent, the court administrator of any district court shall 550.9 issue a subpoena for the attendance of a witness or the 550.10 production of books, papers, records, or memoranda before the 550.11 agent for inspection and copying. Disobedience of a court 550.12 administrator's subpoena shall be punished by the district court 550.13 of the district in which the subpoena is issued, or in the case 550.14 of a subpoena issued by the commissioner or an agent, by the 550.15 district court of the district in which the party served with 550.16 the subpoena is located, in the same manner as contempt of the 550.17 district court; 550.18 (18) appoint and employ additional help, purchase supplies 550.19 or materials, or incur other expenditures in the enforcement of 550.20 state tax laws as considered necessary. The salaries of all 550.21 agents and employees provided for in this chapter shall be fixed 550.22 by the appointing authority, subject to the approval of the 550.23 commissioner of administration; 550.24 (19) execute and administer any agreement with the 550.25 secretary of the treasury of the United States or a 550.26 representative of another state regarding the exchange of 550.27 information and administration of the tax laws; 550.28 (20) administer and enforce the provisions of sections 550.29 325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act; 550.30 (21) authorize the use of unmarked motor vehicles to 550.31 conduct seizures or criminal investigations pursuant to the 550.32 commissioner's authority; and 550.33 (22) exercise other powers and perform other duties 550.34 required of or imposed upon the commissioner of revenue by law. 550.35[EFFECTIVE DATE.] This section is effective the day 550.36 following final enactment. 551.1 Sec. 4. Minnesota Statutes 2000, section 270.60, is 551.2 amended by adding a subdivision to read: 551.3 Subd. 5. [FEES; APPROPRIATION.] (a) The commissioner may 551.4 enter into an agreement with the governing body of any federally 551.5 recognized Indian reservation in Minnesota concerning fees 551.6 administered by the commissioner that are paid by the tribe, 551.7 members of the tribe, or persons who conduct business with the 551.8 tribe, or otherwise imposed on on-reservation activities. The 551.9 agreement may provide for the refund or sharing of the fee. The 551.10 commissioner may make any payments required by the agreement 551.11 from the fees collected. 551.12 (b) Each head of an agency, board, or other governmental 551.13 entity that administers a program that is funded by fees 551.14 administered by the commissioner may sign an agreement entered 551.15 into by the commissioner under this subdivision. An agreement 551.16 is not valid until signed by the head of each agency, board, or 551.17 other governmental entity that administers a program funded by 551.18 the particular fee covered in an agreement and by the 551.19 commissioner of revenue. 551.20 (c) There is annually appropriated to the commissioner of 551.21 revenue from the funds for which the fees are collected the 551.22 amounts necessary to make payments as provided in this 551.23 subdivision. 551.24[EFFECTIVE DATE.] This section is effective the day 551.25 following final enactment and applies to all fees administered 551.26 by the commissioner of revenue for which timely claims for 551.27 refund have been, or can be, filed. 551.28 Sec. 5. Minnesota Statutes 2000, section 270.70, 551.29 subdivision 13, is amended to read: 551.30 Subd. 13. [LEVY AND SALE BY SHERIFF.] If any tax payable 551.31 to the commissioner of revenue or to the department of revenue 551.32 is not paid as provided in subdivision 2, the commissioner may,551.33within five years after the date of assessment of the551.34tax, within the time periods provided in subdivision 1 for 551.35 collection of taxes, delegate the authority granted by 551.36 subdivision 1, by means of issuing a warrant to the sheriff of 552.1 any county of the state commanding the sheriff, as agent for the 552.2 commissioner, to levy upon and sell the real and personal 552.3 property of the person liable for the payment or collection of 552.4 the tax and to levy upon the rights to property of that person 552.5 within the county, or to levy upon and seize any property within 552.6 the county on which there is a lien provided in section 270.69, 552.7 and to return the warrant to the commissioner and pay to the 552.8 commissioner the money collected by virtue thereof by a time to 552.9 be therein specified not less than 60 days from the date of the 552.10 warrant. The sheriff shall proceed thereunder to levy upon and 552.11 seize any property of the person and to levy upon the rights to 552.12 property of the person within the county (except the person's 552.13 homestead or that property which is exempt from execution 552.14 pursuant to section 550.37), or to levy upon and seize any 552.15 property within the county on which there is a lien provided in 552.16 section 270.69. For purposes of the preceding sentence, the 552.17 term "tax" shall include any penalty, interest and costs 552.18 properly payable. The sheriff shall then sell so much of the 552.19 property levied upon as is required to satisfy the taxes, 552.20 interest, and penalties, together with the sheriff's costs; but 552.21 the sales, and the time and manner of redemption therefrom, 552.22 shall, to the extent not provided in sections 270.701 to 552.23 270.709, be governed by chapter 550. The proceeds of the sales, 552.24 less the sheriff's costs, shall be turned over to the 552.25 commissioner, who shall then apply the proceeds as provided in 552.26 section 270.708. 552.27[EFFECTIVE DATE.] This section is effective the day 552.28 following final enactment for all taxes for which issuance of a 552.29 warrant under this subdivision has not been barred as of that 552.30 date. 552.31 Sec. 6. Minnesota Statutes 2000, section 270.73, 552.32 subdivision 1, is amended to read: 552.33 Subdivision 1. [POSTING, NOTICE.] Pursuant to the 552.34 authority to disclose under section 270B.12, subdivision 4, the 552.35 commissioner shall, by the 15th of each month, submit to the 552.36 commissioner of public safety a list of all taxpayers who are 553.1 required to pay, withhold, or collect the tax imposed by section 553.2 290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or 553.3 297A.02, or local sales and use tax payable to the commissioner 553.4 of revenue, or a local option tax administered and collected by 553.5 the commissioner of revenue, and who are ten days or more 553.6 delinquent in either filing a tax return or paying the tax. 553.7 The commissioner of revenue is under no obligation to list 553.8 a taxpayer whose business is inactive. At least ten days before 553.9 notifying the commissioner of public safety, the commissioner of 553.10 revenue shall notify the taxpayer of the intended action. 553.11 The commissioner of public safety shall post the list in 553.12 the same manner as provided in section 340A.318, subdivision 3. 553.13 The list will prominently show the date of posting. If a 553.14 taxpayer previously listed files all returns and pays all taxes 553.15 then due, the commissioner shall notify the commissioner of 553.16 public safety within two business days. 553.17[EFFECTIVE DATE.] This section is effective for lists 553.18 submitted to the commissioner of public safety on or after the 553.19 day following final enactment. 553.20 Sec. 7. [APPROPRIATION.] 553.21 The following amounts are appropriated to the commissioner 553.22 of revenue from the general fund to administer this act: 553.23 (1) $3,442,800 in fiscal year 2002; and 553.24 (2) $1,502,800 in fiscal year 2003. 553.25 These are one-time appropriations and are not added to the 553.26 base, except $304,800 for fiscal year 2002, and $447,800 for 553.27 subsequent fiscal years for assessment training and education 553.28 (regional representatives) is added to the budget base. 553.29 Sec. 8. [REPEALER.] 553.30 Minnesota Rules, parts 8120.0200; 8120.0500; 8120.0700; 553.31 8120.0900; 8120.1300; 8120.1600; 8120.2000; 8120.2100; 553.32 8120.2200; 8120.2300; 8120.2500; 8120.2700; 8120.2800; 553.33 8120.3000; 8120.3200; 8120.4300; 8120.4400; 8120.4500; 553.34 8120.4600; 8120.4900; 8120.5000; 8120.5100; and 8120.5300, are 553.35 repealed. 553.36[EFFECTIVE DATE.] This section is effective the day 554.1 following final enactment.