as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
Engrossments | ||
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Introduction | Posted on 08/14/1998 |
1.1 A bill for an act 1.2 relating to the financing of state and local 1.3 government; reforming state and local taxes and 1.4 intergovernmental aid programs; proposing an amendment 1.5 to the Minnesota Constitution, article XIII, section 1.6 1; prohibiting financing of certain education costs 1.7 with local property taxes; eliminating, consolidating, 1.8 and replacing school district levies; creating a local 1.9 option income tax for schools; reforming property tax 1.10 classifications; imposing a state property tax; 1.11 providing for local government aid; providing a 1.12 comprehensive low income tax credit; changing the 1.13 sales tax base; reducing the sales tax rate; 1.14 eliminating the accelerated payment of June general 1.15 sales, use, cigarette, and tobacco tax payments; 1.16 increasing cigarette and tobacco tax rates; indexing 1.17 cigarette tax rates; imposing a floor stocks tax; 1.18 repealing the working family credit, dependent care 1.19 credit, and property tax refund; appropriating money; 1.20 amending Minnesota Statutes 1994, sections 124.239, 1.21 subdivision 5; 124.2601; 124.2711, subdivisions 1 and 1.22 5; 124.2713, subdivision 1; 124.2714; 124.2715, 1.23 subdivision 1; 124.2716, subdivision 2; 124.2725, 1.24 subdivision 2; 124.2726, subdivision 3; 124.2727, 1.25 subdivision 6a; 124.4945; 124.83, subdivision 3; 1.26 124.91, subdivisions 1 and 2; 124.912, subdivisions 3 1.27 and 6; 124.914, subdivisions 1, 2, 3, and 4; 124.916, 1.28 subdivisions 3 and 4; 124.918, subdivision 8, and by 1.29 adding a subdivision; 124A.292, subdivision 2; 273.13, 1.30 subdivisions 22, 23, 31, and by adding subdivisions; 1.31 275.02; 289A.20, subdivision 4; 290.06, by adding a 1.32 subdivision; 290A.02; 290A.03, subdivision 8; 290A.07, 1.33 subdivision 3; 290A.09; 297.02, subdivision 1; 297.03, 1.34 subdivision 5; 297.07, subdivision 1; 297.32, 1.35 subdivision 1; 297A.01, subdivision 16, and by adding 1.36 a subdivision; 297A.02, subdivision 1; 297A.09; 1.37 297A.15, subdivision 5; 297A.25, subdivision 29; 1.38 473F.02, subdivisions 4, 5, and 24; 473F.06; 473F.07, 1.39 subdivisions 1 and 5; 473F.08, subdivisions 2 and 3; 1.40 477A.011, subdivisions 20, 35, and by adding a 1.41 subdivision; 477A.012, subdivision 1; and 477A.013, 1.42 subdivision 9; Minnesota Statutes 1995 Supplement, 1.43 sections 122.247, subdivision 3; 122.533; 124.2725, 1.44 subdivisions 13, 14, and 15; 124.2726, subdivision 1; 1.45 124.312, subdivision 5; 124.313; 124.3201, subdivision 1.46 1; 124.91, subdivision 4; 124.912, subdivisions 1 and 2.1 7; 124.916, subdivisions 1 and 2; 124A.22, subdivision 2.2 1; 273.13, subdivisions 24 and 25; 275.065, 2.3 subdivision 3; 275.08, subdivision 1b; 276.04, 2.4 subdivision 2; 289A.18, subdivision 4; 290A.03, 2.5 subdivision 6; 297.35, subdivision 1; 297A.01, 2.6 subdivision 3; 473F.08, subdivision 5; and 477A.03, 2.7 subdivision 2; proposing coding for new law in 2.8 Minnesota Statutes, chapters 124A; 290; 297; and 473; 2.9 repealing Minnesota Statutes 1994, sections 122.531, 2.10 subdivision 4a; 124.2711, subdivision 3; 124.2713, 2.11 subdivisions 6a, 6b, and 7; 124.2715, subdivision 2; 2.12 124.2716, subdivisions 3 and 4; 124.2725, subdivision 2.13 7; 124.2727, subdivisions 6b, 6c, and 9; 124.321, 2.14 subdivisions 3, 4, and 5; 124.912, subdivision 2; 2.15 124A.029, subdivisions 1, 2, 3, and 4; 124A.03, 2.16 subdivisions 1b, 1d, 1e, 1f, 1i, 2a, 2b, and 3b; 2.17 124A.0311, subdivisions 1 and 3; 124A.23, subdivisions 2.18 2, 3, and 5; 124A.292, subdivisions 3 and 4; 273.13, 2.19 subdivision 32; 273.1398, subdivisions 2, 2, 3, and 2.20 3a; 275.08, subdivisions 1c and 1d; 275.61; 289A.60, 2.21 subdivision 15; 290.067, subdivisions 2, 2a, 2b, 3, 2.22 and 4; 290.0671; 290A.03, subdivisions 3, 4, 5, 7, 9, 2.23 10, 11, 12, 12a, and 14; 290A.04, subdivisions 1, 2, 2.24 2a, 2b, and 5; 290A.05; 290A.08; 290A.091; 290A.19; 2.25 290A.22; 290A.23, subdivision 1; 297.07, subdivision 2.26 4; 297.35, subdivision 5; 297A.01, subdivisions 17 and 2.27 20; 297A.02, subdivisions 2 and 5; 297A.25, 2.28 subdivisions 8, 10, 23, and 53; 473F.08, subdivision 2.29 8a; 477A.011, subdivision 37; Minnesota Statutes 1995 2.30 Supplement, sections 124.2711, subdivision 2a; 2.31 124.2713, subdivision 6; 124.2715, subdivision 3; 2.32 124.2725, subdivisions 3, 4, and 15; 124.312, 2.33 subdivision 4; 124.314, subdivision 2; 124.321, 2.34 subdivisions 1 and 2; 124A.03, subdivisions 1c, 1g, 2.35 1h, and 2; 124A.0311, subdivisions 2 and 4; 124A.22, 2.36 subdivisions 13d and 13e; 124A.23, subdivisions 1 and 2.37 4; 124A.24; 290.067, subdivision 1; 290A.04, 2.38 subdivisions 3 and 6; 290A.07, subdivision 2a; and 2.39 477A.011, subdivision 36. 2.40 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.41 ARTICLE 1 2.42 CONSTITUTIONAL AMENDMENT 2.43 Section 1. [CONSTITUTIONAL AMENDMENT PROPOSED.] 2.44 An amendment to the Minnesota Constitution, article XIII, 2.45 section 1, is proposed to the people. If the amendment is 2.46 adopted, the section will read as follows: 2.47 Section 1. The stability of a republican form of 2.48 government depending mainly upon the intelligence of the people, 2.49 it is the duty of the legislature to establish a general and 2.50 uniform system of public schools. The legislature shall make 2.51 such provisions by taxation or otherwise as will secure a 2.52 thorough and efficient system of public schools throughout the 2.53 state, but without the use of local property tax revenues. 2.54 Local property taxes may be used to fund facilities and 2.55 equipment and to secure and pay debt to finance public school 3.1 capital facilities. 3.2 Sec. 2. [SUBMISSION TO VOTERS.] 3.3 The proposed amendment must be submitted to the people at 3.4 the 1996 general election. The question submitted is: 3.5 "Shall the Minnesota Constitution be amended to require 3.6 that operating funds for public schools come from sources other 3.7 than local property taxes? 3.8 Yes ....... 3.9 No ........" 3.10 Sec. 3. [EFFECTIVE DATE.] 3.11 If the amendment proposed by section 1 is adopted by the 3.12 voters, the amendment is effective July 1, 1998. 3.13 ARTICLE 2 3.14 EDUCATION FINANCE REFORM 3.15 Section 1. Minnesota Statutes 1995 Supplement, section 3.16 122.247, subdivision 3, is amended to read: 3.17 Subd. 3. [TRANSITIONALLEVYREVENUE.] The board of the 3.18 combined district, or the boards of combining districts that 3.19 have received voter approval for the combination under section 3.20 122.243, subdivision 2,may levyare eligible for state aid to 3.21 pay for the expenses of negotiation, administrative expenses 3.22 directly related to the transition from cooperation to 3.23 combination, and the cost of necessary new athletic and music 3.24 uniforms.The board or boards may levy this amount over three3.25or fewer years.All expenses must be approved by the 3.26 commissioner of children, families, and learning. The 3.27 commissioner may pay this state aid over three or fewer years. 3.28 Sec. 2. Minnesota Statutes 1995 Supplement, section 3.29 122.533, is amended to read: 3.30 122.533 [EXPENSES OF TRANSITION.] 3.31 The board of a district to which a dissolved district is 3.32 attached pursuant to section 122.22,may,is eligible for state 3.33 aid for the purpose of paying the expenses of negotiations and 3.34 other administrative expenses relating to the transition,. The 3.35 board of the district may enter into agreements with banks or 3.36 any person to take its orders at any rate of interest not to 4.1 exceed seven percent per annum. These orders shall be paid by 4.2 the treasurer of the district from district funds after the 4.3 effective date of the dissolution and attachment. 4.4 Notwithstanding the provisions of sections 124.226, 124.2716, 4.5 124.91, 124.912, 124.914, 124.916, and 124.918, the districtmay4.6 is, in the year the dissolution and attachment becomes 4.7 effective,levyeligible for state aid in an amount equal to the 4.8 amount of the orders issued pursuant to this subdivision and the 4.9 interest on these orders. No district shall issue orders for 4.10 fundsor make a levy pursuantaccording to this subdivision 4.11 without the commissioner's approval of the expenses to be paid 4.12 with the funds from the orders andlevystate aid. 4.13 Sec. 3. Minnesota Statutes 1994, section 124.239, 4.14 subdivision 5, is amended to read: 4.15 Subd. 5. [LEVY AUTHORIZED.] A district, after local board 4.16 approval, may levy for costs related to an approved facility 4.17 plan as follows: 4.18 (a) if the district has indicated to the commissioner that 4.19 bonds will be issued, the district may levy for the principal 4.20 and interest payments on outstanding bonds issued according to 4.21 subdivision 3; or 4.22 (b) if the district has indicated to the commissioner that 4.23 the plan will be funded through levy, the district may levy 4.24 according to the schedule approved in the plan. 4.25 The authority to levy for costs related to an approved 4.26 facility plan under this section is limited to facilities plans 4.27 approved prior to July 1, 1997. 4.28 Sec. 4. Minnesota Statutes 1994, section 124.2601, as 4.29 amended by Laws 1995, First Special Session chapter 3, article 4.30 16, section 13, is amended to read: 4.31 124.2601 [ADULT BASIC EDUCATION AID.] 4.32 Subdivision 1. [FULL-TIME EQUIVALENT.] In this section 4.33 "full-time equivalent" means 408 contact hours for a student at 4.34 the adult secondary instructional level and 240 contact hours 4.35 for a student at a lower instructional level. "Full-time 4.36 equivalent" for an English as a second language student means 5.1 240 contact hours. 5.2 Subd. 2. [PROGRAMS FUNDED.] Adult basic education programs 5.3 established under section 124.26 and approved by the 5.4 commissioner are eligible forrevenueaid under this section. 5.5 Subd. 3. [AID.] Adult basic education aid for each 5.6 approved program equals the sum of 65 percent of the general 5.7 education formula allowance times the number of full-time 5.8 equivalent students in its adult basic education program and an 5.9 amount equal to .12 percent times the district's adjusted net 5.10 tax capacity for assessment year 1994. 5.11 Subd. 4.[LEVY.] A district with an eligible program may5.12levy an amount not to exceed the amount raised by .12 percent5.13times the adjusted tax capacity of the district for the5.14preceding year.5.15Subd. 5. [REVENUE.] Adult basic education revenue is equal5.16to the sum of an approved program's adult basic education aid5.17and its adult basic education levy.5.18Subd. 6. [AID GUARANTEE.] (a) For fiscal year 1994, any5.19adult basic education program that receives less state aid under5.20subdivisions 3 and 7 than from the aid formula for fiscal year5.211992 shall receive the amount of aid it received in fiscal year5.221992.5.23(b) For 1995 and later fiscal years, an adult basic5.24education program that receives aid shall receive at least the5.25amount of aid it received in fiscal year 1992 under subdivisions5.263 and 7, plus aid equal to the amount of revenue that would have5.27been raised for taxes payable in 1994 under Minnesota Statutes5.281992, section 124.2601, subdivision 4, minus the amount raised5.29under subdivision 4.5.30Subd. 7.[PRORATION.] If the total appropriation for adult 5.31 basic education aid is insufficient to pay all approved programs 5.32 the full amount of aid earned, the department of children, 5.33 families, and learning shall proportionately reduce each 5.34 approved program's aid. 5.35 Sec. 5. Minnesota Statutes 1994, section 124.2711, 5.36 subdivision 1, is amended to read: 6.1 Subdivision 1. [REVENUEAID.]The revenueState aid for 6.2 early childhood family education programs for a school district 6.3 equals $101.25for 1993 and later fiscal yearstimes the greater 6.4 of: 6.5 (1) 150; or 6.6 (2) the number of people under five years of age residing 6.7 in the school district on October 1 of the previous school year. 6.8 Sec. 6. Minnesota Statutes 1994, section 124.2711, 6.9 subdivision 5, is amended to read: 6.10 Subd. 5. [HOME VISITINGLEVYAID.] A school district that 6.11 enters into a collaborative agreement to provide education 6.12 services and social services to families with young childrenmay6.13levy an amountis eligible for state aid equal to $1.60 times 6.14 the number of people under five years of age residing in the 6.15 district on September 1 of the last school year.Levy revenue6.16under this subdivision shall not be included as revenue under6.17subdivision 1.The revenue shall be used for home visiting 6.18 programs under section 121.882, subdivision 2b. 6.19 Sec. 7. Minnesota Statutes 1994, section 124.2713, 6.20 subdivision 1, is amended to read: 6.21 Subdivision 1. [TOTAL COMMUNITY EDUCATION REVENUE.] 6.22 Community education revenue equals the sum of a district's 6.23 general community education revenue and youth service program 6.24 revenue. Community education revenue is provided entirely 6.25 through state aid. 6.26 Sec. 8. Minnesota Statutes 1994, section 124.2714, is 6.27 amended to read: 6.28 124.2714 [ADDITIONAL COMMUNITY EDUCATION REVENUE.] 6.29 (a) A district that is eligible under section 124.2713, 6.30 subdivision 2,may levy an amount upis eligible for aid equal 6.31 to the amount of revenue authorized by Minnesota Statutes 1986, 6.32 section 275.125, subdivision 8, clause (2). 6.33 (b) Beginning withleviesrevenue for fiscal year 1995, 6.34 thislevyrevenue must be reduced each year by the amount of any 6.35 increase in thelevyingdistrict's general community education 6.36 revenue under section 124.2713, subdivision 3, for that fiscal 7.1 year over the amount received by the district under section 7.2 124.2713, subdivision 3, for fiscal year 1994. 7.3 (c) Theproceeds of the levyrevenue may be used for the 7.4 purposes set forth in section 124.2713, subdivision 8. 7.5 Sec. 9. Minnesota Statutes 1994, section 124.2715, 7.6 subdivision 1, is amended to read: 7.7 Subdivision 1. [REVENUE AMOUNT.] A district that is 7.8 eligible according to section 124.2713, subdivision 2, may 7.9 receive revenue for a program for adults with disabilities. 7.10 Revenue for the program for adults with disabilities for a 7.11 district or a group of districts equals the lesser of: 7.12 (1) the actual expenditures for approved programs and 7.13 budgets; or 7.14 (2) $60,000. 7.15 Revenue is provided through state aid. 7.16 Sec. 10. Minnesota Statutes 1994, section 124.2716, 7.17 subdivision 2, is amended to read: 7.18 Subd. 2. [EXTENDED DAY REVENUE.] The extended day revenue 7.19 for an eligible school district equals the approved additional 7.20 cost of providing services to children with disabilities or 7.21 children experiencing family or related problems of a temporary 7.22 nature who participate in the extended day program. Extended 7.23 day revenue is provided through state aid. 7.24 Sec. 11. Minnesota Statutes 1994, section 124.2725, 7.25 subdivision 2, is amended to read: 7.26 Subd. 2. [COOPERATION AND COMBINATION REVENUE.] 7.27 Cooperation and combination revenue equals $100 times the pupil 7.28 units served in the district. For purposes of this section, 7.29 pupil units served means the number of resident and nonresident 7.30 pupil units in average daily membership receiving instruction in 7.31 the cooperating or combined district. A district may not 7.32 receive revenue under this section if itleviesreceives revenue 7.33 under section 124.912, subdivision 4. Cooperation and 7.34 combination revenue is provided through state aid. 7.35 Sec. 12. Minnesota Statutes 1995 Supplement, section 7.36 124.2725, subdivision 13, is amended to read: 8.1 Subd. 13. [FAILURE TO COMBINE.] A district has failed to 8.2 combine if the commissioner disapproves of the plan according to 8.3 section 122.243, subdivision 1, or if a third referendum fails 8.4 under section 122.243, subdivision 2, or if the commissioner of 8.5 children, families, and learning determines that the districts 8.6 involved are not making sufficient progress toward combination. 8.7 (a) If a district has failed to combine, cooperation and 8.8 combination aid under subdivisions 5 and 6 shall not be paidand8.9the authority to levy under subdivision 4 ceases. The 8.10 commissioner shall reduce other aids due the district to recover 8.11 an amount equal to the aid paid under subdivision 6 plus the 8.12 difference between the aid paid under subdivision 5 and the aid 8.13 that would have been paid if the revenue had been $50 times the 8.14 pupil units served. 8.15 (b) If a district has failed to combine, theauthority to8.16levyeligibility for revenue for reorganization operating debt 8.17 under section 122.531, subdivision 4a, and for severance pay or 8.18 early retirement incentives under subdivision 15 ceases. 8.19 Sec. 13. Minnesota Statutes 1995 Supplement, section 8.20 124.2725, subdivision 14, is amended to read: 8.21 Subd. 14. [CESSATION OF REVENUE.] At any time the 8.22 districts cease cooperating, aid shall not be paidand the8.23authority to levy ceases. If a district ceases to cooperate for8.24all or a portion of a fiscal year for which a levy has been8.25certified under subdivision 3, the department of children,8.26families, and learning shall adjust the next levy certified by8.27the district by an amount in proportion to the part of the8.28fiscal year that the district did not cooperate. 8.29 Sec. 14. Minnesota Statutes 1995 Supplement, section 8.30 124.2725, subdivision 15, is amended to read: 8.31 Subd. 15. [RETIREMENT AND SEVERANCELEVYAID.] A 8.32 cooperating or combined district that levied under subdivision 3 8.33 for taxes payable in 1995may levyis eligible for state aid for 8.34 severance pay or early retirement incentives for licensed and 8.35 nonlicensed employees who retire early as a result of the 8.36 cooperation or combination. All severance pay agreements or 9.1 early retirement incentives for licensed and nonlicensed 9.2 employees who retire early as a result of the cooperation and 9.3 combination must be approved by the commissioner. 9.4 Sec. 15. Minnesota Statutes 1995 Supplement, section 9.5 124.2726, subdivision 1, is amended to read: 9.6 Subdivision 1. [ELIGIBILITY AND USE.] A school district 9.7 that has been reorganized after June 30, 1994, under section 9.8 122.23 is eligible for consolidation transition revenue. 9.9 Revenue is equal to the sum of aid undersubdivision9.10 subdivisions 2 andlevy under subdivision3. Consolidation 9.11 transition revenue may only be used according to this section. 9.12 Revenue must be used for the following purposes and may be 9.13 distributed among these purposes at the discretion of the 9.14 district: 9.15 (1) to offer early retirement incentives as provided by 9.16 section 122.23, subdivision 20; 9.17 (2) to reduce operating debt as defined in section 121.915; 9.18 (3) to enhance learning opportunities for students in the 9.19 reorganized district; and 9.20 (4) for other costs incurred in the reorganization. 9.21 Revenue received and utilized under clause (3) or (4) may 9.22 be expended for operating, facilities, and/or equipment. 9.23 Revenue received under this section shall not be included in the 9.24 determination of the reduction under section 124A.26, 9.25 subdivision 1. 9.26 Sec. 16. Minnesota Statutes 1994, section 124.2726, 9.27 subdivision 3, is amended to read: 9.28 Subd. 3. [LEVYADDITIONAL AID.] If the aid available in 9.29 subdivision 2 is insufficient to cover the costs of the district 9.30 under section 122.23, subdivision 20, the district maylevy9.31 apply to the commissioner for state aid to cover the difference 9.32 over a period of time not to exceed three years. 9.33 Sec. 17. Minnesota Statutes 1994, section 124.2727, 9.34 subdivision 6a, is amended to read: 9.35 Subd. 6a. [DISTRICT COOPERATION REVENUE.] A district's 9.36 cooperation revenue is equal to the greater of $67 times the 10.1 actual pupil units or $25,000. District cooperation revenue is 10.2 provided through state aid. 10.3 Sec. 18. Minnesota Statutes 1995 Supplement, section 10.4 124.312, subdivision 5, is amended to read: 10.5 Subd. 5. [INTEGRATION AID.]For fiscal year 1996 and later10.6fiscal yearsIntegration revenue is provided through state aid 10.7 and equals the following amounts: 10.8 (1) for independent school district No. 709, Duluth, 10.9 $1,385,000 plus the sum of $660,000 and an amount equal to 2.0 10.10 percent times the district's adjusted net tax capacity for 10.11 assessment year 1994; 10.12 (2) for independent school district No. 625, St. Paul, 10.13 $8,090,700 plus the product of $197 and the district's actual 10.14 pupil units for that year; and 10.15 (3) for special school district No. 1, Minneapolis, 10.16 $9,368,300 plus the product of $197 and the district's actual 10.17 pupil units for that year. 10.18 Sec. 19. Minnesota Statutes 1995 Supplement, section 10.19 124.313, is amended to read: 10.20 124.313 [TARGETED NEEDS REVENUE.] 10.21 For fiscal year 1996 and thereafter, a school district's 10.22 targeted needs revenue equals the sum of: 10.23 (1) assurance of mastery revenue according to section 10.24 124.311; plus 10.25 (2) the district's limited English proficiency revenue 10.26 computed according to section 124.273, subdivision 1d; plus 10.27 (3) integration revenue computed according to section 10.28 124.312, subdivision 4. 10.29 Sec. 20. Minnesota Statutes 1995 Supplement, section 10.30 124.3201, subdivision 1, is amended to read: 10.31 Subdivision 1. [DEFINITIONS.] For the purposes of this 10.32 section and sections 124.3202 and 124.321, the definitions in 10.33 this subdivision apply. 10.34 (a) "Base year" for fiscal year 1996 means fiscal year 1995. 10.35 Base year for later fiscal years means the second fiscal year 10.36 preceding the fiscal year for which aid will be paid. 11.1 (b) "Basic revenue" has the meaning given it in section 11.2 124A.22, subdivision 2. For the purposes of computing basic 11.3 revenue pursuant to this section, each child with a disability 11.4 shall be counted as prescribed in section 124.17, subdivision 1. 11.5 (c) "Essential personnel" means teachers, related services, 11.6 and support services staff providing direct services to students. 11.7 (d) "Average daily membership" has the meaning given it in 11.8 section 124.17. 11.9 (e) "Program growth factor" means 1.00 for fiscal year 1998 11.10 and later. 11.11 (f) "Aid percentage factor" means 60 percent for fiscal 11.12 year 1996, 70 percent for fiscal year 1997, 80 percent for 11.13 fiscal year 1998,90 percent for fiscal year 1999,and 100 11.14 percent for fiscal years20001999 and later. 11.15 (g) "Levy percentage factor" means 100 minus the aid 11.16 percentage factor for that year. 11.17 Sec. 21. Minnesota Statutes 1994, section 124.4945, is 11.18 amended to read: 11.19 124.4945 [LEVYSTATE AID FOR SEVERANCE PAY.] 11.20 A joint powers board established under section 124.494may11.21make a levyis eligible to receive state aid to provide 11.22 severance pay and early retirement incentives under section 11.23 125.611, for any teacher as defined under section 125.12, 11.24 subdivision 1, who is placed on unrequested leave as a result of 11.25 the cooperative secondary facility agreement.A joint powers11.26board making a levy shall certify to each participating district11.27tax levies sufficient to raise the amount necessary to provide11.28the district's portion of severance pay and early retirement11.29incentives. The tax levy certified to each district must be11.30expressed as a local tax rate, that, when applied to the11.31adjusted net tax capacity of all of the participating districts11.32raises the amount necessary to provide severance pay and early11.33retirement incentives. Each participating school district shall11.34include the levy in the next tax roll which it shall certify to11.35the county auditor, and shall remit the collections of the levy11.36to the joint powers board.12.1 Sec. 22. Minnesota Statutes 1994, section 124.83, 12.2 subdivision 3, is amended to read: 12.3 Subd. 3. [HEALTH AND SAFETY REVENUE.] A district's health 12.4 and safety revenue for a fiscal year equals: 12.5 (1) the sum of (a) the total approved cost of the 12.6 district's hazardous substance plan for fiscal years 1985 12.7 through 1989, plus (b) the total approved cost of the district's 12.8 health and safety program for fiscal year 1990 through the 12.9 fiscal year to which the levy is attributable, minus 12.10 (2) the sum of (a) the district's total hazardous substance 12.11 aid and levy for fiscal years 1985 through 1989 under sections 12.12 124.245 and 275.125, subdivision 11c, plus (b) the district's 12.13 health and safety revenue under this subdivision, for years 12.14 before the fiscal year to which the levy is attributable, plus 12.15 (c) the amount of other federal, state, or local receipts for 12.16 the district's hazardous substance or health and safety programs 12.17 for fiscal year 1985 through the fiscal year to which the levy 12.18 is attributable. 12.19 The annual statewide total amount of health and safety 12.20 revenue may not exceed the statewide total health and safety 12.21 revenue for fiscal year 1998. 12.22 Sec. 23. Minnesota Statutes 1994, section 124.91, 12.23 subdivision 1, is amended to read: 12.24 Subdivision 1. [TO LEASE BUILDING OR LAND.] When a 12.25 district finds it economically advantageous to rent or lease a 12.26 building or land for any instructional purposes and it 12.27 determines that the capital expenditure facilities revenues 12.28 authorized under section 124.243 are insufficient for this 12.29 purpose, it may apply to the commissioner for permission to make 12.30 an additional capital expenditure levy for this purpose. An 12.31 application for permission to levy under this subdivision must 12.32 contain financial justification for the proposed levy, the terms 12.33 and conditions of the proposed lease, and a description of the 12.34 space to be leased and its proposed use. The criteria for 12.35 approval of applications to levy under this subdivision must 12.36 include: the reasonableness of the price, the appropriateness 13.1 of the space to the proposed activity, the feasibility of 13.2 transporting pupils to the leased building or land, conformity 13.3 of the lease to the laws and rules of the state of Minnesota, 13.4 and the appropriateness of the proposed lease to the space needs 13.5 and the financial condition of the district. The commissioner 13.6 must not authorize a levy under this subdivision in an amount 13.7 greater than the cost to the district of renting or leasing a 13.8 building or land for approved purposes. The proceeds of this 13.9 levy must not be used for custodial or other maintenance 13.10 services. A district may not levy under this subdivision for 13.11 the purpose of leasing or renting a district-owned building to 13.12 itself. For taxes payable in 1998 and later, a district's levy 13.13 under this subdivision must not exceed the amount levied for 13.14 this purpose for taxes payable in 1997. 13.15 Sec. 24. Minnesota Statutes 1994, section 124.91, 13.16 subdivision 2, is amended to read: 13.17 Subd. 2. [PRE-JULY 1990 LEASE PURCHASE, INSTALLMENT BUYS.] 13.18 A district may annually levy the amount needed to make payments 13.19 required by a lease purchase agreement, installment purchase 13.20 agreement, or other deferred payment agreement authorized by 13.21 Minnesota Statutes 1989 Supplement, section 465.71, if: 13.22 (1) the agreement was approved by the commissioner before 13.23 July 1, 1990, according to Minnesota Statutes 1989 Supplement, 13.24 section 275.125, subdivision 11d; or 13.25 (2) the district levied in 1989 for the payments. 13.26 For taxes payable in 1998 and later, a district's levy 13.27 under this subdivision must not exceed the amount levied for 13.28 this purpose for taxes payable in 1997. 13.29 Sec. 25. Minnesota Statutes 1995 Supplement, section 13.30 124.91, subdivision 4, is amended to read: 13.31 Subd. 4. [COOPERATING DISTRICTS.] A district that has an 13.32 agreement according to section 122.535 or 122.541 may levy for 13.33 the repair costs, as approved by the department of children, 13.34 families, and learning, of a building located in another 13.35 district that is a party to the agreement. For taxes payable in 13.36 1998 and later, a district's levy under this subdivision must 14.1 not exceed the amount levied for this purpose for taxes payable 14.2 in 1997. 14.3 Sec. 26. Minnesota Statutes 1995 Supplement, section 14.4 124.912, subdivision 1, is amended to read: 14.5 Subdivision 1. [STATUTORY OBLIGATIONS.](a)A school 14.6 districtmay levyis eligible for state aid for the amount 14.7 authorized for liabilities of dissolved districts pursuant to 14.8 section 122.45; the amounts necessary to pay the district's 14.9 obligations under section 268.06, subdivision 25; the amounts 14.10 necessary to pay for job placement services offered to employees 14.11 who may become eligible for benefits pursuant to section 268.08; 14.12 the amounts necessary to pay the district's obligations under 14.13 section 127.05; the amounts authorized by section 122.531; the 14.14 amounts necessary to pay the district's obligations under 14.15 section 122.533; and for severance pay required by sections 14.16 120.08, subdivision 3, and 122.535, subdivision 6. 14.17(b) An education district that negotiates a collective14.18bargaining agreement for teachers under section 122.937 may14.19certify to the department of children, families, and learning14.20the amount necessary to pay all of the member districts'14.21obligations and the education district's obligations under14.22section 268.06, subdivision 25.14.23The department of children, families, and learning must14.24allocate the levy amount proportionately among the member14.25districts based on adjusted net tax capacity. The member14.26districts must levy the amount allocated.14.27(c) Each year, a member district of an education district14.28that levies under this subdivision must transfer the amount of14.29revenue certified under paragraph (b) to the education district14.30board according to this subdivision. By June 20 and November 3014.31of each year, an amount must be transferred equal to:14.32(1) 50 percent times14.33(2) the amount certified in paragraph (b) minus homestead14.34and agricultural credit aid allocated for that levy according to14.35section 273.1398, subdivision 6.14.36 Sec. 27. Minnesota Statutes 1994, section 124.912, 15.1 subdivision 3, is amended to read: 15.2 Subd. 3. [RULE COMPLIANCE.] Each year a district that is 15.3 required to implement a plan according to the requirements of 15.4 Minnesota Rules, parts 3535.0200 to 3535.2200,may levyis 15.5 eligible for state aid in an amountnot to exceed a net tax rate15.6ofequal to 2.0 percent times the adjusted net tax capacity of 15.7 the district fortaxes payable in 1991 and thereafterthe 15.8 preceding year. A district thatleviesreceives integration 15.9 revenue according tosubdivision 2 may not levy according to15.10 section 124.312 is not eligible for state aid under this 15.11 subdivision.Notwithstanding section 121.904, the entire amount15.12of this levy shall be recognized as revenue for the fiscal year15.13in which the levy is certified. This levy shall not be15.14considered in computing the aid reduction under section 124.155.15.15 Sec. 28. Minnesota Statutes 1994, section 124.912, 15.16 subdivision 6, is amended to read: 15.17 Subd. 6. [CRIME RELATED COSTS.]For taxes levied in 199115.18and subsequent years, payable in 1992 and subsequent years, each15.19school district may make a levy on all taxable property located15.20within the school district for the purposes specified in this15.21subdivision. The maximum amount which may be levied for all15.22costs under this subdivision shall be equal toState aid for 15.23 crime related costs equals $1 multiplied by the population of 15.24 the school district. For purposes of this subdivision, 15.25 "population" of the school district means the same as contained 15.26 in section 275.14. Theproceeds of the levystate aid must be 15.27 used for reimbursing the cities and counties who contract with 15.28 the school district for the following purposes: (1) to pay the 15.29 costs incurred for the salaries, benefits, and transportation 15.30 costs of peace officers and sheriffs for liaison services in the 15.31 district's middle and secondary schools and (2) to pay the costs 15.32 for a drug abuse prevention program as defined in Minnesota 15.33 Statutes 1991 Supplement, section 609.101, subdivision 3, 15.34 paragraph (f) in the elementary schools. The school district 15.35 must initially attempt to contract for these services with the 15.36 police department of each city or the sheriff's department of 16.1 the county within the school district containing the school 16.2 receiving the services. If a local police department or a 16.3 county sheriff's department does not wish to provide the 16.4 necessary services, the district may contract for these services 16.5 with any other police or sheriff's department located entirely 16.6 or partially within the school district's boundaries.The levy16.7authorized under this subdivision is not included in determining16.8the school district's levy limitations.16.9 Sec. 29. Minnesota Statutes 1995 Supplement, section 16.10 124.912, subdivision 7, is amended to read: 16.11 Subd. 7. [ICE ARENA LEVY.] (a) Each year, an independent 16.12 school district operating and maintaining an ice arena,may levy16.13 is eligible for state aid for the net operational costs of the 16.14 ice arena. Thelevyamount of state aid may not exceed the net 16.15 actual costs of operation of the arena for the previous year. 16.16 Net actual costs are defined as operating costs less any 16.17 operating revenues. 16.18 (b) Any school district operating and maintaining an ice 16.19 arena must demonstrate to the satisfaction of the office of 16.20 monitoring in the department of children, families, and learning 16.21 that the district will offer equal sports opportunities for male 16.22 and female students to use its ice arena, particularly in areas 16.23 of access to prime practice time, team support, and providing 16.24 junior varsity and younger level teams for girls' ice sports and 16.25 ice sports offerings. 16.26 Sec. 30. Minnesota Statutes 1994, section 124.914, 16.27 subdivision 1, is amended to read: 16.28 Subdivision 1. [1977 STATUTORY OPERATING DEBT.] (1) In 16.29 each year in which so required by this subdivision, a district 16.30shall make an additional levyis eligible for state aid to 16.31 eliminate its statutory operating debt, determined as of June 16.32 30, 1977, and certified and adjusted by the commissioner. 16.33ThisState aid payments for fiscal years 1999 and later and the 16.34 previous local levy shall not be made in more than 30 successive 16.35 years and each year before it is made, it must be approved by 16.36 the commissioner and the approval shall specify its amount. 17.1This levy shall be an amount which is equal to the amount raised17.2by a levy of a net tax rate of 1.66 percent times the adjusted17.3net tax capacity of the district for the preceding year for17.4taxes payable in 1991 and thereafter; provided that in the last17.5year in which the district is required to make this levy, it17.6shall levy an amount not to exceed the amount raised by a levy17.7of a net tax rate of 1.66 percent times the adjusted net tax17.8capacity of the district for the preceding year for taxes17.9payable in 1991 and thereafterThe state aid for each district 17.10 equals the amount raised by the levy for this purpose for taxes 17.11 payable in 1997. When the sum of the cumulativelevies made17.12pursuantrevenue received according to this subdivision and 17.13 transfers made according to section 121.912, subdivision 4, 17.14 equals an amount equal to the statutory operating debt of the 17.15 district, thelevystate aid shall be discontinued. 17.16 (2) The district shall establish a special account in the 17.17 general fund which shall be designated "appropriated fund 17.18 balance reserve account for purposes of reducing statutory 17.19 operating debt" on its books and records. This account shall 17.20 reflect thelevyrevenue authorized pursuant to this subdivision. 17.21 The proceeds of thislevyrevenue shall be used only for cash 17.22 flow requirements and shall not be used to supplement district 17.23 revenues or income for the purposes of increasing the district's 17.24 expenditures or budgets. 17.25 (3)Any district which is required to levy pursuant to this17.26subdivision shall certify the maximum levy allowable under17.27section 124A.23, subdivision 2, in that same year.17.28(4)Each district shall make permanent fund balance 17.29 transfers so that the total statutory operating debt of the 17.30 district is reflected in the general fund as of June 30, 1977. 17.31 Sec. 31. Minnesota Statutes 1994, section 124.914, 17.32 subdivision 2, is amended to read: 17.33 Subd. 2. [1983 OPERATING DEBT.] (1) Each year, a 17.34 districtmay make an additional levyis eligible for state aid 17.35 to eliminate a deficit in the net unappropriated operating funds 17.36 of the district, determined as of June 30, 1983, and certified 18.1 and adjusted by the commissioner. Thislevy may in each year be18.2an amount not to exceed the amount raised by a levy of a net tax18.3rate of 1.85 percent times the adjusted net tax capacity for18.4taxes payable in 1991 and thereafter of the district for the18.5preceding year as determined by the commissionerstate aid for 18.6 each district equals the amount raised by the district's levy 18.7 for this purpose for taxes payable in 1997. However, the total 18.8 amount of thislevyrevenue for all years it ismadereceived 18.9 shall not exceed the lesser of (a) the amount of the deficit in 18.10 the net unappropriated operating funds of the district as of 18.11 June 30, 1983, or (b) the amount of the aid reduction, according 18.12 to Laws 1981, Third Special Session chapter 2, article 2, 18.13 section 2, but excluding clauses (l), (m), (n), (o), and (p), 18.14 and Laws 1982, Third Special Session chapter 1, article 3, 18.15 section 6, to the district in fiscal year 1983. When the 18.16 cumulativelevies made pursuantrevenue received according to 18.17 this subdivisionequalequals the total amount permitted by this 18.18 subdivision, thelevystate aid shall be discontinued. 18.19 (2) The proceeds of thislevystate aid shall be used only 18.20 for cash flow requirements and shall not be used to supplement 18.21 district revenues or income for the purposes of increasing the 18.22 district's expenditures or budgets. 18.23(3) Any district that levies pursuant to this subdivision18.24shall certify the maximum levy allowable under section 124A.23,18.25subdivisions 2 and 2a, in that same year.18.26 Sec. 32. Minnesota Statutes 1994, section 124.914, 18.27 subdivision 3, is amended to read: 18.28 Subd. 3. [1985 OPERATING DEBT.] (1) Each year, a 18.29 districtmay levyis eligible for state aid to eliminate a 18.30 deficit in the net unappropriated balance in the general fund of 18.31 the district, determined as of June 30, 1985, and certified and 18.32 adjusted by the commissioner. Each yearthis levy may be an18.33amount not to exceed the amount raised by a levy of a net tax18.34rate of 1.85 percent times the adjusted net tax capacity for18.35taxes payable in 1991 and thereafter of the district for the18.36preceding yearthe state aid for each district equals the amount 19.1 raised by the district's levy for this purpose for taxes payable 19.2 in 1997. However, the total amount of thislevyrevenue for all 19.3 years it ismadereceived shall not exceed the amount of the 19.4 deficit in the net unappropriated balance in the general fund of 19.5 the district as of June 30, 1985. When the cumulativelevies19.6made pursuant torevenue received under this subdivisionequal19.7 equals the total amount permitted by this subdivision, thelevy19.8 state aid shall be discontinued. 19.9 (2) A district, if eligible, maylevyrevenue under this 19.10 subdivision or subdivision 2 but not both. 19.11 (3) The proceeds of thislevyrevenue shall be used only 19.12 for cash flow requirements and shall not be used to supplement 19.13 district revenues or income for the purposes of increasing the 19.14 district's expenditures or budgets. 19.15(4) Any district that levies pursuant to this subdivision19.16shall certify the maximum levy allowable under section 124A.23,19.17subdivision 2, in that same year.19.18 Sec. 33. Minnesota Statutes 1994, section 124.914, 19.19 subdivision 4, is amended to read: 19.20 Subd. 4. [1992 OPERATING DEBT.] (a) Fortaxes payable for19.21calendar year 2003fiscal year 2004 and earlier, a district that 19.22 has filed a plan pursuant to section 121.917, subdivision 4,may19.23levyis eligible for state aid, with the approval of the 19.24 commissioner, to eliminate a deficit in the net unappropriated 19.25 balance in the operating funds of the district, determined as of 19.26 June 30, 1992, and certified and adjusted by the commissioner. 19.27 Each year thislevy may be an amount not tostate aid shall not 19.28 exceed the lesser of: 19.29 (1) an amount raised bya levy of a net tax rate of one19.30percent times the adjusted net tax capacitythe district's levy 19.31 for this purpose for taxes payable in 1997; or 19.32 (2) $100,000. 19.33 This amount shall be reduced by referendum revenue authorized 19.34 under section 124A.03 pursuant to the plan filed under section 19.35 121.917. However, the total amount of thislevyrevenue for all 19.36 years it ismadereceived shall not exceed the amount of the 20.1 deficit in the net unappropriated balance in the operating funds 20.2 of the district as of June 30, 1992. When the cumulativelevies20.3made pursuant torevenue received under this subdivisionequal20.4 equals the total amount permitted by this subdivision, thelevy20.5 state aid shall be discontinued. 20.6 (b) A district, if eligible, maylevyreceive revenue under 20.7 this subdivision or subdivision 2 or 3, or under section 20.8 122.531, subdivision 4a, or Laws 1992, chapter 499, article 7, 20.9 sections 16 or 17, but not under more than one. 20.10 (c) The proceeds of thislevyrevenue shall be used only 20.11 for cash flow requirements and shall not be used to supplement 20.12 district revenues or income for the purposes of increasing the 20.13 district's expenditures or budgets. 20.14(d) Any district that levies pursuant to this subdivision20.15shall certify the maximum levy allowable under section 124A.23,20.16subdivision 2, in that same year.20.17 Sec. 34. Minnesota Statutes 1995 Supplement, section 20.18 124.916, subdivision 1, is amended to read: 20.19 Subdivision 1. [HEALTH INSURANCE.] (a) A school 20.20 districtmay levyis eligible for state aid in the amount 20.21 necessary to make employer contributions for insurance for 20.22 retired employees under this subdivision.Notwithstanding20.23section 121.904, 50 percent of the amount levied shall be20.24recognized as revenue for the fiscal year in which the levy is20.25certified. This levy shall not be considered in computing the20.26aid reduction under section 124.155.20.27 (b) The school board of a joint vocational technical 20.28 district formed under sections 136C.60 to 136C.69 and the school 20.29 board of a school district may provide employer-paid hospital, 20.30 medical, and dental benefits to a person who: 20.31 (1) is eligible for employer-paid insurance under 20.32 collective bargaining agreements or personnel plans in effect on 20.33 June 30, 1992; 20.34 (2) has at least 25 years of service credit in the public 20.35 pension plan of which the person is a member on the day before 20.36 retirement or, in the case of a teacher, has a total of at least 21.1 25 years of service credit in the teachers retirement 21.2 association, a first-class city teacher retirement fund, or any 21.3 combination of these; 21.4 (3) upon retirement is immediately eligible for a 21.5 retirement annuity; 21.6 (4) is at least 55 and not yet 65 years of age; and 21.7 (5) retires on or after May 15, 1992, and before July 21, 21.8 1992. 21.9 A school board paying insurance under this subdivision may 21.10 not exclude any eligible employees. 21.11 (c) An employee who is eligible both for the health 21.12 insurance benefit under this subdivision and for an early 21.13 retirement incentive under a collective bargaining agreement or 21.14 personnel plan established by the employer must select either 21.15 the early retirement incentive provided under the collective 21.16 bargaining agreement personnel plan or the incentive provided 21.17 under this subdivision, but may not receive both. For purposes 21.18 of this subdivision, a person retires when the person terminates 21.19 active employment and applies for retirement benefits. The 21.20 retired employee is eligible for single and dependent coverages 21.21 and employer payments to which the person was entitled 21.22 immediately before retirement, subject to any changes in 21.23 coverage and employer and employee payments through collective 21.24 bargaining or personnel plans, for employees in positions 21.25 equivalent to the position from which the employee retired. The 21.26 retired employee is not eligible for employer-paid life 21.27 insurance. Eligibility ceases when the retired employee attains 21.28 the age of 65, or when the employee chooses not to receive the 21.29 retirement benefits for which the employee has applied, or when 21.30 the employee is eligible for employer-paid health insurance from 21.31 a new employer. Coverages must be coordinated with relevant 21.32 health insurance benefits provided through the federally 21.33 sponsored Medicare program. 21.34 (d) Unilateral implementation of this section by a public 21.35 employer is not an unfair labor practice for purposes of chapter 21.36 179A. The authority provided in this subdivision for an 22.1 employer to pay health insurance costs for certain retired 22.2 employees is not subject to the limits in section 179A.20, 22.3 subdivision 2a. 22.4 (e) If a school districtleviesreceives revenue according 22.5 to this subdivision, it may not alsolevyreceive revenue 22.6 according to section 122.531, subdivision 9, for eligible 22.7 employees. 22.8 Sec. 35. Minnesota Statutes 1995 Supplement, section 22.9 124.916, subdivision 2, is amended to read: 22.10 Subd. 2. [RETIRED EMPLOYEE HEALTH BENEFITS.] Fortaxes22.11payable in 1996,fiscal years 1997, 1998, and 1999 only, a 22.12 school districtmay levyis eligible for state aid in an amount 22.13 up to the amount the district is required by the collective 22.14 bargaining agreement in effect on March 30, 1992, to pay for 22.15 health insurance or unreimbursed medical expenses for licensed 22.16 and nonlicensed employees who have terminated services in the 22.17 employing district and withdrawn from active teaching service or 22.18 other active service, as applicable, before July 1, 1992. The 22.19 total amount of thelevystate aid each year may not exceed 22.20 $300,000. 22.21Notwithstanding section 121.904, 50 percent of the proceeds22.22of this levy shall be recognized in the fiscal year in which it22.23is certified.22.24 Sec. 36. Minnesota Statutes 1994, section 124.916, 22.25 subdivision 3, is amended to read: 22.26 Subd. 3. [RETIREMENTLEVIESAID.] (1)In addition to the22.27excess levy authorized in 1976 any district within a city of the22.28first class which was authorized in 1975 to make a retirement22.29levy under Minnesota Statutes 1974, section 275.127 and chapter22.30422A may levy an amount per pupil unit which is equal to the22.31amount levied in 1975 payable 1976, under Minnesota Statutes22.321974, section 275.127 and chapter 422A, divided by the number of22.33pupil units in the district in 1976-1977.22.34(2) In 1979 and each year thereafter, any district which22.35qualified in 1976 for an extra levy under clause (1) shall be22.36allowed to levy the same amount as levied for retirement in 197823.1under this clause reduced each year by ten percent of the23.2difference between the amount levied for retirement in 197123.3under Minnesota Statutes 1971, sections 275.127 and 422.01 to23.4422.54 and the amount levied for retirement in 1975 under23.5Minnesota Statutes 1974, section 275.127 and chapter 422A.23.6(3) In 1991 and each year thereafter, a district to which23.7this subdivision applies may levy an additional amount required23.8for contributions to the Minneapolis employees retirement fund23.9as a result of the maximum dollar amount limitation on state23.10contributions to the fund imposed under section 422A.101,23.11subdivision 3. The additional levy shall not exceed the most23.12recent amount certified by the board of the Minneapolis23.13employees retirement fund as the district's share of the23.14contribution requirement in excess of the maximum state23.15contribution under section 422A.101, subdivision 3.23.16(4) For taxes payable in 1994 and thereafter, special23.17school district No. 1, Minneapolis, and independent school23.18district No. 625, St. Paul, may levy for the increase in the23.19employer retirement fund contributions, under Laws 1992, chapter23.20598, article 5, section 1. Notwithstanding section 121.904, the23.21entire amount of this levy may be recognized as revenue for the23.22fiscal year in which the levy is certified. This levy shall not23.23be considered in computing the aid reduction under section23.24124.155.For fiscal years 1998 and later, the commissioner 23.25 shall determine the amount of retirement levies certified under 23.26 this subdivision by each district for taxes payable in 1997. 23.27 (2) A district is eligible for state aid equal to the 23.28 amount calculated under paragraph (1). 23.29(5)(3) If the employer retirement fund contributions under 23.30 section 354A.12, subdivision 2a, are increased for fiscal year 23.31 1994 or later fiscal years, special school district No. 1, 23.32 Minneapolis, and independent school district No. 625, St. Paul, 23.33may levy in payable 1994 or later an amountare eligible for 23.34 state aid equal to the amount derived by applying the net 23.35 increase in the employer retirement fund contribution rate of 23.36 the respective teacher retirement fund association between 24.1 fiscal year 1993 and the fiscal year beginning in the year after 24.2 the levy is certified to the total covered payroll of the 24.3 applicable teacher retirement fund association.Notwithstanding24.4section 121.904, the entire amount of this levy may be24.5recognized as revenue for the fiscal year in which the levy is24.6certified. This levy shall not be considered in computing the24.7aid reduction under section 124.155. If an applicable school24.8district levies under this paragraph, they may not levy under24.9paragraph (4).24.10(6)(4) In addition to thelevystate aid authorized under 24.11 paragraph(5)(3), special school district No. 1, 24.12 Minneapolis,may also levy in payable 1994 or lateris also 24.13 eligible for additional state aid in an amount equal to the 24.14 state aid contribution under section 354A.12, subdivision 3b. 24.15Notwithstanding section 121.904, the entire amount of this levy24.16may be recognized as revenue for the fiscal year in which the24.17levy is certified. This levy shall not be considered in24.18computing the aid reduction under section 124.155.24.19 Sec. 37. Minnesota Statutes 1994, section 124.916, 24.20 subdivision 4, is amended to read: 24.21 Subd. 4. [MINNEAPOLIS HEALTH INSURANCE SUBSIDY.] Each year 24.22 special school district No. 1, Minneapolis,may make an24.23additional levy not to exceedis eligible for state aid equal to 24.24 the amount raised by a net tax rate of .10 percent times the 24.25 adjusted net tax capacityfor taxes payable in 1991 and24.26thereafterof the property in the district for the preceding 24.27 year. The proceeds may be used only to subsidize health 24.28 insurance costs for eligible teachers as provided in this 24.29 section. 24.30 "Eligible teacher" means a retired teacher who was a basic 24.31 member of the Minneapolis teachers retirement fund association, 24.32 who retired before May 1, 1974, and who is not eligible to 24.33 receive the hospital insurance benefits of the federal Medicare 24.34 program of the Social Security Act without payment of a monthly 24.35 premium. The district shall notify eligible teachers that a 24.36 subsidy is available. To obtain a subsidy, an eligible teacher 25.1 must submit to the school district a copy of receipts for health 25.2 insurance premiums paid. The school district shall disburse the 25.3 health insurance premium subsidy to each eligible teacher 25.4 according to a schedule determined by the district, but at least 25.5 annually. An eligible teacher may receive a subsidy up to an 25.6 amount equal to the lesser of 90 percent of the cost of the 25.7 eligible teacher's health insurance or up to 90 percent of the 25.8 cost of the number two qualified plan of health coverage for 25.9 individual policies made available by the Minnesota 25.10 comprehensive health association under chapter 62E. 25.11 If funds remaining from the previous year's health 25.12 insurance subsidylevyrevenue, minus the previous year's 25.13 required subsidy amount, are sufficient to pay the estimated 25.14 current year subsidy, thelevystate aid must be discontinued 25.15 until the remaining funds are estimated by the school board to 25.16 be insufficient to pay the subsidy. 25.17 Sec. 38. Minnesota Statutes 1994, section 124.918, 25.18 subdivision 8, is amended to read: 25.19 Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 25.20 Reductions in levies pursuant to section 124.918, subdivision 1, 25.21 and section 273.138, shall be made prior to the reductions in 25.22 clause (2). 25.23 (2) Notwithstanding any other law to the contrary, 25.24 districts which received payments pursuant to sections 298.018; 25.25 298.23 to 298.28, except an amount distributed under section 25.26 298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 25.27 298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 25.28 upon severed mineral values, or recognized revenue pursuant to 25.29 section 477A.15; shall not include a portion of these aids in 25.30 their permissible levies pursuant to those sections, but instead 25.31 shall reduce the permissible levies authorized by this chapter 25.32 and chapter 124A by the greater of the following: 25.33 (a) an amount equal to 50 percent of the total dollar 25.34 amount of the payments received pursuant to those sections or 25.35 revenue recognized pursuant to section 477A.15 in the previous 25.36 fiscal year; or 26.1 (b) an amount equal to the total dollar amount of the 26.2 payments received pursuant to those sections or revenue 26.3 recognized pursuant to section 477A.15 in the previous fiscal 26.4 year less the product of the same dollar amount of payments or 26.5 revenue times the ratio of the maximum levy allowed the district 26.6 under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 26.7 124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 26.8 subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 26.9 subdivision 5a, to the total levy allowed the district under 26.10 this section and Minnesota Statutes 1986, sections 124A.03, 26.11 124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 26.12 subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 26.13 5a, and 124A.20, subdivision 2, for levies certified in 1986. 26.14 (3) No reduction pursuant to this subdivision shall reduce 26.15 the levy made by the district pursuant to section124A.2326.16 124A.25, to an amount less than the amount raised by a levy of a 26.17 net tax rate of 6.82 percent times the adjusted net tax capacity 26.18 for taxes payable in 1990 and thereafter of that district for 26.19 the preceding year as determined by the commissioner. The 26.20 amount of any increased levy authorized by referendum pursuant 26.21 to section 124A.03, subdivision 2, shall not be reduced pursuant 26.22 to this subdivision. The amount of any levy authorized by 26.23 section 124.912, subdivision 1, to make payments for bonds 26.24 issued and for interest thereon, shall not be reduced pursuant 26.25 to this subdivision. 26.26 (4) Before computing the reduction pursuant to this 26.27 subdivision of the capital expenditure facilities levy 26.28 authorized by section 124.243, the capital expenditure equipment 26.29 levy authorized by section 124.244, the health and safety levy 26.30 authorized by sections 124.83 and 124.91, subdivision 6, the 26.31 commissioner shall ascertain from each affected school district 26.32 the amount it proposes to levy under each section or 26.33 subdivision. The reduction shall be computed on the basis of 26.34 the amount so ascertained. 26.35 (5) Notwithstanding any law to the contrary, any amounts 26.36 received by districts in any fiscal year pursuant to sections 27.1 298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 27.2 298.405; or any law imposing a tax on severed mineral values; 27.3 and not deducted from general education aid pursuant to section 27.4 124A.035, subdivision 5, clause (2), and not applied to reduce 27.5 levies pursuant to this subdivision shall be paid by the 27.6 district to the St. Louis county auditor in the following amount 27.7 by March 15 of each year, the amount required to be subtracted 27.8 from the previous fiscal year's general education aid pursuant 27.9 to section 124A.035, subdivision 5, which is in excess of the 27.10 general education aid earned for that fiscal year. The county 27.11 auditor shall deposit any amounts received pursuant to this 27.12 clause in the St. Louis county treasury for purposes of paying 27.13 the taconite homestead credit as provided in section 273.135. 27.14 Sec. 39. Minnesota Statutes 1994, section 124.918, is 27.15 amended by adding a subdivision to read: 27.16 Subd. 9. [INCOME TAX LIABILITY.] No later than October 1 27.17 of each year, the commissioner of children, families, and 27.18 learning shall report to each school district the preliminary 27.19 aggregate individual income tax liability for that district, as 27.20 reported by the commissioner of revenue. 27.21 Sec. 40. [124A.038] [DISCRETIONARY REVENUE.] 27.22 Subdivision 1. [INCOME TAX SURTAX.] A school district may 27.23 hold a referendum under subdivision 2 to approve an income tax 27.24 surtax. The revenue raised by the income tax surtax may not 27.25 exceed the greater of the district's referendum revenue 27.26 authority for fiscal year 1998 or $800 per pupil unit. Each one 27.27 percent rate up to three, approved by the taxpayers under 27.28 subdivision 2 is guaranteed to raise $100 per pupil unit for 27.29 each year the surtax is in place. 27.30 Subd. 2. [REFERENDUM.] (a) A referendum to impose an 27.31 income tax surtax may be called by the school board or shall be 27.32 called by the school board upon written petition of qualified 27.33 voters of the district. The referendum shall be conducted on 27.34 the first Tuesday after the first Monday in November in the 27.35 calendar year before the tax year in which the surtax, if 27.36 approved, will first be applied. The ballot shall state the 28.1 proposed surtax rate as a percentage of Minnesota individual 28.2 income tax liability under chapter 290. The ballot may state 28.3 that an existing surtax is expiring. The ballot shall designate 28.4 the specific number of years, not to exceed ten, for which the 28.5 surtax applies. The ballot may contain a textual portion with 28.6 the information required in this subdivision and a question 28.7 stating substantially the following: 28.8 "Shall an income tax surtax proposed by (petition to) the 28.9 board of .........., independent school district No. ...., be 28.10 approved?" 28.11 If approved, the surtax rate is authorized for the number 28.12 of years authorized, not to exceed ten, beginning in the year 28.13 after the referendum, or until revoked or reduced by the voters 28.14 of the district at a subsequent referendum. 28.15 (b) The school board shall prepare and deliver by 28.16 first-class mail a notice of the referendum and the proposed 28.17 income tax surtax to each residential address in the school 28.18 district at least 15 days but no more than 30 days prior to the 28.19 day of the referendum. The notice must project the anticipated 28.20 amount of income tax increase in annual dollars and annual 28.21 percentages for typical family incomes within the school 28.22 district. The school board shall make these projections by 28.23 applying the proposed surtax rate to the preliminary aggregate 28.24 individual income tax liability in the school district in the 28.25 previous year, as reported by the commissioner of revenue. 28.26 The notice for a referendum may state that an existing 28.27 income tax surtax is expiring and project the anticipated amount 28.28 of increase over the existing discretionary income tax or 28.29 referendum property tax, if any, in annual dollars and annual 28.30 percentages for typical family incomes within the school 28.31 district. 28.32 The notice must include the following statement: "Passage 28.33 of this referendum will result in an increase in your individual 28.34 income taxes." 28.35 (c) A referendum on the question of revoking or reducing 28.36 the surtax rate authorized under paragraph (a) may be called by 29.1 the school board and shall be called by the school board upon 29.2 the written petition of qualified voters of the district. A 29.3 referendum to revoke or reduce the surtax rate must be based 29.4 upon the surtax rate that was stated in the initial 29.5 authorization. Revenue resulting from a surtax approved by the 29.6 voters of the district according to paragraph (a), must be 29.7 received at least once before it is subject to a referendum on 29.8 its revocation or reduction for subsequent years. Only one 29.9 revocation or reduction referendum may be held to revoke or 29.10 reduce referendum revenue for any specific year and for years 29.11 thereafter. 29.12 (d) A petition authorized by paragraph (a) or (c) is 29.13 effective if signed by a number of qualified voters in excess of 29.14 15 percent of the registered voters of the school district on 29.15 the day the petition is filed with the school board. A 29.16 referendum invoked by petition must be held on the date 29.17 specified in paragraph (a). 29.18 (e) The approval of 50 percent plus one of those voting on 29.19 the question is required to pass a referendum authorized by this 29.20 subdivision. 29.21 (f) At least 15 days prior to the day of the referendum, 29.22 the district shall submit a copy of the notice required under 29.23 paragraph (b) to the commissioner of children, families, and 29.24 learning. Within 15 days after the results of the referendum 29.25 have been certified by the school board, or in the case of a 29.26 recount, the certification of the results of the recount by the 29.27 canvassing board, the district shall notify the commissioner of 29.28 the results of the referendum. 29.29 Subd. 3. [REVENUE USE.] Revenue received from an income 29.30 tax surtax must be deposited either in the district's general 29.31 fund or capital expenditure fund. 29.32 Sec. 41. Minnesota Statutes 1995 Supplement, section 29.33 124A.22, subdivision 1, is amended to read: 29.34 Subdivision 1. [GENERAL EDUCATION REVENUE.](a) For fiscal29.35year 1996, the general education revenue for each district29.36equals the sum of the district's basic revenue, compensatory30.1education revenue, training and experience revenue, secondary30.2sparsity revenue, elementary sparsity revenue, and supplemental30.3revenue.30.4(b)For fiscal year 1997 and thereafter, the general 30.5 education revenue for each district equals the sum of the 30.6 district's basic revenue, compensatory education revenue, 30.7 secondary sparsity revenue, elementary sparsity revenue, 30.8 transportation sparsity, total operating capital revenue, 30.9 transition revenue, and supplemental revenue. General education 30.10 revenue is provided through state aid. 30.11 Sec. 42. Minnesota Statutes 1994, section 124A.292, 30.12 subdivision 2, is amended to read: 30.13 Subd. 2. [REVENUE.] Staff development incentive revenue is 30.14 equal to the number of teachers at the site times $25. Staff 30.15 development incentive revenue is provided through state aid. 30.16 Sec. 43. [290.0621] [SCHOOL REFERENDUM TAX.] 30.17 Subdivision 1. [IMPOSITION.] In addition to all other 30.18 taxes imposed by this chapter, a tax is imposed on individuals 30.19 who reside within the territory of a school district in which 30.20 the voters approved an income tax surtax at a referendum 30.21 conducted under section 124A.038 for that purpose in 1996 or a 30.22 subsequent year. This tax does not apply to referenda on bond 30.23 issues. Individuals residing in the district on the last day of 30.24 the tax year are subject to the surtax. 30.25 Subd. 2. [TAX IMPOSED.] The commissioner of revenue shall 30.26 annually assess the surtax as part of the individual income tax. 30.27 Sec. 44. [473.176] [SCHOOL DISTRICTS BUILDING PROJECTS.] 30.28 Subdivision 1. [REQUIRED REVIEW.] In order to qualify for 30.29 debt service equalization aid under section 124.95, a school 30.30 district with its administrative office located within a 30.31 metropolitan county must submit any proposal for new 30.32 construction, expansion, or remodeling of an educational 30.33 facility in excess of $400,000 to the metropolitan council prior 30.34 to submitting any plans to the commissioner of children, 30.35 families, and learning for review and comment under section 30.36 121.15. 31.1 Subd. 2. [APPROVAL OF PROJECT.] Within 60 days of 31.2 receiving the district proposal, the council shall return to the 31.3 district either a statement approving the project or a list of 31.4 modifications that the district must consider in order to assure 31.5 conformance with the metropolitan system plans, including the 31.6 regional blueprint. A district may resubmit a proposed project 31.7 to the council after considering the council's comments. 31.8 Subd. 3. [ELIGIBILITY FOR AID.] A district that receives a 31.9 statement from the council approving the project may proceed 31.10 with the review and comment under section 121.15 and any debt 31.11 service amounts attributable to the project qualify as they 31.12 otherwise would for debt service equalization aid under section 31.13 124.95. A district that does not receive approval of the 31.14 project may proceed with the review and comment under section 31.15 121.15, but the debt service amounts attributable to the project 31.16 do not qualify for debt service equalization aid under section 31.17 124.95. 31.18 Sec. 45. [DEPARTMENT OF REVENUE.] 31.19 The commissioner of revenue shall require taxpayers to 31.20 report on their individual income tax returns the identifying 31.21 number of the school district they lived in on the final day of 31.22 the tax year. The commissioner shall provide taxpayers with a 31.23 listing of school district names and numbers to facilitate 31.24 compliance with this provision. 31.25 No later than September 15 of each year, the commissioner 31.26 of revenue shall report to the commissioner of children, 31.27 families, and learning the preliminary aggregate individual 31.28 income tax liability for each school district in the state. 31.29 In years in which surtaxes are authorized, the commissioner 31.30 of revenue shall collect the surtax along with the individual 31.31 income tax. The instructions for completing the individual 31.32 income tax return shall include a listing of school districts 31.33 that have authorized surtaxes and the surtax rates. 31.34 Sec. 46. [REPEALER.] 31.35 Subdivision 1. [JULY 1, 1997.] (a) Minnesota Statutes 31.36 1994, sections 122.531, subdivision 4a; 124.2713, subdivisions 32.1 6a, 6b, and 7; 124.2715, subdivision 2; 124.2716, subdivisions 3 32.2 and 4; 124.2725, subdivision 7; 124.2727, subdivisions 6b, 6c, 32.3 and 9; 124A.029, subdivisions 1, 2, 3, and 4; 124A.03, 32.4 subdivisions 1b, 1d, 1e, 1f, 1i, 2a, 2b, and 3b; 124A.0311, 32.5 subdivisions 1 and 3; 124A.23, subdivisions 2, 3, and 5; and 32.6 124A.292, subdivisions 3 and 4; and Minnesota Statutes 1995 32.7 Supplement, sections 124.2715, subdivision 3; and 124A.0311, 32.8 subdivision 2, are repealed July 1, 1997. 32.9 (b) Minnesota Statutes 1994, section 273.1398, subdivision 32.10 2, is repealed December 31, 1997, for aids payable in 1998 and 32.11 subsequent years. 32.12 (c) Minnesota Statutes 1994, sections 124.2711, subdivision 32.13 3; and 124.321, subdivisions 3, 4, and 5; and Minnesota Statutes 32.14 1995 Supplement, sections 124.2711, subdivision 2a; 124.2713, 32.15 subdivision 6; 124.2725, subdivisions 3, 4, and 15; 124.312, 32.16 subdivision 4; 124.314, subdivision 2; 124.321, subdivisions 1 32.17 and 2; 124A.03, subdivisions 1c, 1g, 1h, and 2; 124A.0311, 32.18 subdivision 4; 124A.22, subdivisions 13d and 13e; 124A.23, 32.19 subdivisions 1 and 4; and 124A.24, are repealed July 1, 1997. 32.20 Subd. 2. [TAXES PAYABLE IN 1997.] Minnesota Statutes 1994, 32.21 section 124.912, subdivision 2, is repealed July 1, 1997, and 32.22 shall not be levied for taxes payable in 1998 and following 32.23 years. 32.24 Sec. 47. [EFFECTIVE DATE.] 32.25 (a) The provisions of this article take effect as provided 32.26 in paragraph (b) only if the constitutional amendment proposed 32.27 to the people by article 1, section 1, is adopted. 32.28 (b) Sections 1 to 43 are effective July 1, 1997 for revenue 32.29 for 1998-1999 and later school years. Section 44 is effective 32.30 for aids payable in 1998 and subsequent years. Sections 45 to 32.31 49 are effective for taxes payable in 1998 and subsequent years. 32.32 ARTICLE 3 32.33 PROPERTY TAX CLASSIFICATION AND RATES 32.34 Section 1. Minnesota Statutes 1994, section 273.13, 32.35 subdivision 22, is amended to read: 32.36 Subd. 22. [CLASS 1.](a) Except as provided in subdivision33.123,Class 1 property consists of real estate which is used for 33.2 residentialand used for homesteadpurposesis class 1. The33.3market value of class 1a property must be determined based upon33.4the value of the house, garage, and land., including residential 33.5 structures on agricultural property, and property used for 33.6 seasonal recreational purposes. A residential property 33.7 qualifies for class 1 only if it contains no more than three 33.8 housing units. Seasonal recreational property qualifies for 33.9 class 1 only if it is not used for commercial purposes for more 33.10 than 250 days in the year preceding the year of assessment. The 33.11 portion of commercial seasonal recreational property operated as 33.12 a (1) restaurant, (2) bar, (3) gift shop, or (4) other 33.13 nonresidential facility not directly related to temporary and 33.14 seasonal residential occupancy for recreation purposes shall not 33.15 qualify for class 1. Class 1 property is further classified 33.16 into the following subclasses: 33.17 (a) Class 1a consists of the first $115,000 of market value 33.18 of each parcel of class 1 property occupied as a homestead. 33.19 (b) Class 1b consists of that portion of each parcel of 33.20 noncommercial seasonal recreational property over $72,000 market 33.21 value. 33.22 (c) Class 1c consists of all other class 1 property. 33.23The first $72,000 of market value of class 1a property has33.24a net class rate of one percent of its market value and a gross33.25class rate of 2.17 percent of its market value. For taxes33.26payable in 1992, the market value of class 1a property that33.27exceeds $72,000 but does not exceed $115,000 has a class rate of33.28two percent of its market value; and the market value of class33.291a property that exceeds $115,000 has a class rate of 2.533.30percent of its market value. For taxes payable in 1993 and33.31thereafter, the market value of class 1a property that exceeds33.32$72,000 has a class rate of two percent.33.33(b) Class 1b property includes homestead real estate or33.34homestead manufactured homes used for the purposes of a33.35homestead by33.36(1) any blind person, or the blind person and the blind34.1person's spouse; or34.2(2) any person, hereinafter referred to as "veteran," who:34.3(i) served in the active military or naval service of the34.4United States; and34.5(ii) is entitled to compensation under the laws and34.6regulations of the United States for permanent and total34.7service-connected disability due to the loss, or loss of use, by34.8reason of amputation, ankylosis, progressive muscular34.9dystrophies, or paralysis, of both lower extremities, such as to34.10preclude motion without the aid of braces, crutches, canes, or a34.11wheelchair; and34.12(iii) has acquired a special housing unit with special34.13fixtures or movable facilities made necessary by the nature of34.14the veteran's disability, or the surviving spouse of the34.15deceased veteran for as long as the surviving spouse retains the34.16special housing unit as a homestead; or34.17(3) any person who:34.18(i) is permanently and totally disabled and34.19(ii) receives 90 percent or more of total income from34.20(A) aid from any state as a result of that disability; or34.21(B) supplemental security income for the disabled; or34.22(C) workers' compensation based on a finding of total and34.23permanent disability; or34.24(D) social security disability, including the amount of a34.25disability insurance benefit which is converted to an old age34.26insurance benefit and any subsequent cost of living increases;34.27or34.28(E) aid under the federal Railroad Retirement Act of 1937,34.29United States Code Annotated, title 45, section 228b(a)5; or34.30(F) a pension from any local government retirement fund34.31located in the state of Minnesota as a result of that34.32disability; or34.33(4) any person who is permanently and totally disabled and34.34whose household income as defined in section 290A.03,34.35subdivision 5, is 150 percent or less of the federal poverty34.36level.35.1Property is classified and assessed under clause (4) only35.2if the government agency or income-providing source certifies,35.3upon the request of the homestead occupant, that the homestead35.4occupant satisfies the disability requirements of this paragraph.35.5Property is classified and assessed pursuant to clause (1)35.6only if the commissioner of economic security certifies to the35.7assessor that the homestead occupant satisfies the requirements35.8of this paragraph.35.9Permanently and totally disabled for the purpose of this35.10subdivision means a condition which is permanent in nature and35.11totally incapacitates the person from working at an occupation35.12which brings the person an income. The first $32,000 market35.13value of class 1b property has a net class rate of .45 percent35.14of its market value and a gross class rate of .87 percent of its35.15market value. The remaining market value of class 1b property35.16has a gross or net class rate using the rates for class 1 or35.17class 2a property, whichever is appropriate, of similar market35.18value.35.19(c) Class 1c property is commercial use real property that35.20abuts a lakeshore line and is devoted to temporary and seasonal35.21residential occupancy for recreational purposes but not devoted35.22to commercial purposes for more than 250 days in the year35.23preceding the year of assessment, and that includes a portion35.24used as a homestead by the owner, which includes a dwelling35.25occupied as a homestead by a shareholder of a corporation that35.26owns the resort or a partner in a partnership that owns the35.27resort, even if the title to the homestead is held by the35.28corporation or partnership. For purposes of this clause,35.29property is devoted to a commercial purpose on a specific day if35.30any portion of the property, excluding the portion used35.31exclusively as a homestead, is used for residential occupancy35.32and a fee is charged for residential occupancy. Class 1c35.33property has a class rate of one percent of total market value35.34for taxes payable in 1993 and thereafter with the following35.35limitation: the area of the property must not exceed 100 feet35.36of lakeshore footage for each cabin or campsite located on the36.1property up to a total of 800 feet and 500 feet in depth,36.2measured away from the lakeshore.36.3 Sec. 2. Minnesota Statutes 1994, section 273.13, 36.4 subdivision 23, is amended to read: 36.5 Subd. 23. [CLASS 2.](a)Class2a2 propertyisconsists 36.6 of agricultural landincluding any improvements that is36.7homesteaded.and structures used for agricultural purposes, 36.8 including 36.9The market value of the house and garage and immediately36.10surrounding one acre of land has the same class rates as class36.111a property under subdivision 22. The value of the remaining36.12land including improvements up to $115,000 has a net class rate36.13of .45 percent of market value and a gross class rate of 1.7536.14percent of market value. The remaining value of class 2a36.15property over $115,000 of market value that does not exceed 32036.16acres has a net class rate of one percent of market value, and a36.17gross class rate of 2.25 percent of market value. The remaining36.18property over the $115,000 market value in excess of 320 acres36.19has a class rate of 1.5 percent of market value, and a gross36.20class rate of 2.25 percent of market value.36.21(b) Class 2bproperty that is (1) real estate, rural in 36.22 character and used exclusively for growing trees for timber, 36.23 lumber, and wood and wood products; (2) real estate that is not 36.24 improved with a structure and is used exclusively for growing 36.25 trees for timber, lumber, and wood and wood products, if the 36.26 owner has participated or is participating in a cost-sharing 36.27 program for afforestation, reforestation, or timber stand 36.28 improvement on that particular property, administered or 36.29 coordinated by the commissioner of natural resources;(3) real36.30estate that is nonhomestead agricultural land;or(4)(3) a 36.31 landing area or public access area of a privately owned public 36.32 use airport.Class 2b property has a net class rate of 1.536.33percent of market value, and a gross class rate of 2.25 percent36.34of market value.36.35(c)Agricultural land as used in this section means 36.36 contiguous acreage of ten acres or more, primarily used during 37.1 the preceding year for agricultural purposes. Agricultural use 37.2 may include pasture, timber, waste, unusable wild land, and land 37.3 included in state or federal farm programs. "Agricultural 37.4 purposes" as used in this section means the raising or 37.5 cultivation of agricultural products. 37.6(d)Real estate of less than ten acres used principally for 37.7 raising or cultivating agricultural products, shall be 37.8 considered as agricultural land, if it is not used primarily for 37.9 residential purposes. 37.10(e)The term "agricultural products" as used in this 37.11 subdivision includes: 37.12 (1) livestock, dairy animals, dairy products, poultry and 37.13 poultry products, fur-bearing animals, horticultural and nursery 37.14 stock described in sections 18.44 to 18.61, fruit of all kinds, 37.15 vegetables, forage, grains, bees, and apiary products by the 37.16 owner; 37.17 (2) fish bred for sale and consumption if the fish breeding 37.18 occurs on land zoned for agricultural use; 37.19 (3) the commercial boarding of horses if the boarding is 37.20 done in conjunction with raising or cultivating agricultural 37.21 products as defined in clause (1); 37.22 (4) property which is owned and operated by nonprofit 37.23 organizations used for equestrian activities, excluding racing; 37.24 and 37.25 (5) game birds and waterfowl bred and raised for use on a 37.26 shooting preserve licensed under section 97A.115. 37.27(f)If a parcel used for agricultural purposes is also used 37.28 for commercial or industrial purposes, including but not limited 37.29 to: 37.30 (1) wholesale and retail sales; 37.31 (2) processing of raw agricultural products or other goods; 37.32 (3) warehousing or storage of processed goods; and 37.33 (4) office facilities for the support of the activities 37.34 enumerated in clauses (1), (2), and (3), 37.35 the assessor shall classify the part of the parcel used for 37.36 agricultural purposes as class1b, 2a, or 2b, whichever is38.1appropriate,2, and the remainder in the class appropriate to 38.2 its use. The grading, sorting, and packaging of raw 38.3 agricultural products for first sale is considered an 38.4 agricultural purpose. A greenhouse or other building where 38.5 horticultural or nursery products are grown that is also used 38.6 for the conduct of retail sales must be classified as 38.7 agricultural if it is primarily used for the growing of 38.8 horticultural or nursery products from seed, cuttings, or roots 38.9 and occasionally as a showroom for the retail sale of those 38.10 products. Use of a greenhouse or building only for the display 38.11 of already grown horticultural or nursery products does not 38.12 qualify as an agricultural purpose. 38.13The assessor shall determine and list separately on the38.14records the market value of the homestead dwelling and the one38.15acre of land on which that dwelling is located. If any farm38.16buildings or structures are located on this homesteaded acre of38.17land, their market value shall not be included in this separate38.18determination.38.19(g)To qualify for classification under paragraph (b), 38.20 clause(4)(3), a privately owned public use airport must be 38.21 licensed as a public airport under section 360.018. For 38.22 purposes of paragraph (b), clause(4)(3), "landing area" means 38.23 that part of a privately owned public use airport properly 38.24 cleared, regularly maintained, and made available to the public 38.25 for use by aircraft and includes runways, taxiways, aprons, and 38.26 sites upon which are situated landing or navigational aids. A 38.27 landing area also includes land underlying both the primary 38.28 surface and the approach surfaces that comply with all of the 38.29 following: 38.30 (i) the land is properly cleared and regularly maintained 38.31 for the primary purposes of the landing, taking off, and taxiing 38.32 of aircraft; but that portion of the land that contains 38.33 facilities for servicing, repair, or maintenance of aircraft is 38.34 not included as a landing area; 38.35 (ii) the land is part of the airport property; and 38.36 (iii) the land is not used for commercial or residential 39.1 purposes. 39.2 The land contained in a landing area under paragraph (b), clause 39.3(4)(3), must be described and certified by the commissioner of 39.4 transportation. The certification is effective until it is 39.5 modified, or until the airport or landing area no longer meets 39.6 the requirements of paragraph (b), clause(4)(3). For purposes 39.7 of paragraph (b), clause(4)(3), "public access area" means 39.8 property used as an aircraft parking ramp, apron, or storage 39.9 hangar, or an arrival and departure building in connection with 39.10 the airport. 39.11 Class 2 property is further classified into the following 39.12 subclasses: 39.13 (a) Class 2a consists of the first $115,000 of market value 39.14 of each homestead agricultural property. 39.15 (b) Class 2b consists of all other class 2 property. 39.16 Sec. 3. Minnesota Statutes 1995 Supplement, section 39.17 273.13, subdivision 24, is amended to read: 39.18 Subd. 24. [CLASS 3.](a)Class 3 consists of commercial 39.19 and industrial property and utility real and personal property, 39.20 except class 5 property as identified in subdivision 31, clause 39.21 (1), is class 3a.It has a class rate of three percent ofClass 39.22 3 property is further classified into the following subclasses: 39.23 (a) Class 3a consists of the first $100,000 of each class 3 39.24 property's market valuefor taxes payable in 1993 and39.25thereafter, and 5.06 percent of the market value over $100,000., 39.26 provided that in the case of state-assessedcommercial,39.27industrial, and utilityproperty owned by one person or entity, 39.28 only one parcelhas a reduced class rate on the first $100,00039.29of market value.is eligible for inclusion in class 3a, and 39.30 provided that in the case of othercommercial, industrial, and39.31utilityproperty owned by one person or entity, only one parcel 39.32 in each countyhas a reduced class rate on the first $100,000 of39.33market valueis eligible for inclusion in class 3a, except that: 39.34 (1) if the market value of the parcel is less than 39.35 $100,000, and additional parcels are owned by the same person or 39.36 entity in the same city or town within that county,the reduced40.1class rate shall be applied up toa combined total market value 40.2 of $100,000 for all parcels owned by the same person or entity 40.3 in the same city or town within the county is eligible for class 40.4 3a; 40.5 (2) in the case of grain, fertilizer, and feed elevator 40.6 facilities, as defined in section 18C.305, subdivision 1, or 40.7 232.21, subdivision 8, the limitation to one parcel per owner 40.8 per county forthe reduced class rateinclusion in class 3a 40.9 shall not apply, but there shall be a limit of $100,000 40.10 ofpreferentialclass 3a value per site of contiguous parcels 40.11 owned by the same person or entity. Only the value of the 40.12 elevator portion of each parcel shall qualify for treatment 40.13 under this clause. For purposes of this subdivision, contiguous 40.14 parcels include parcels separated only by a railroad or public 40.15 road right-of-way; and 40.16 (3) in the case of property owned by a nonprofit charitable 40.17 organization that qualifies for tax exemption under section 40.18 501(c)(3) of the Internal Revenue Code of 1986, as amended 40.19 through December 31, 1993, if the property is used as a business 40.20 incubator, the limitation to one parcel per owner per county for 40.21the reduced class rateinclusion in class 3a shall not apply, 40.22 provided thatthe reduced rate appliesonlytothe first 40.23 $100,000 of value per parcel owned by the organization qualifies 40.24 as class 3a. As used in this clause, a "business incubator" is 40.25 a facility used for the development of nonretail businesses, 40.26 offering access to equipment, space, services, and advice to the 40.27 tenant businesses, for the purpose of encouraging economic 40.28 development, diversification, and job creation in the area 40.29 served by the organization. 40.30 To receivethe reduced class rateclass 3a classification 40.31 on additional parcels under clause (1), (2), or (3), the 40.32 taxpayer must notify the county assessor that the taxpayer owns 40.33 more than one parcel that qualifies under clause (1), (2), or 40.34 (3). 40.35(b) Employment property defined in section 469.166, during40.36the period provided in section 469.170, shall constitute class41.13b and has a class rate of 2.3 percent of the first $50,000 of41.2market value and 3.6 percent of the remainder, except that for41.3employment property located in a border city enterprise zone41.4designated pursuant to section 469.168, subdivision 4, paragraph41.5(c), the class rate of the first $100,000 of market value and41.6the class rate of the remainder is determined under paragraph41.7(a), unless the governing body of the city designated as an41.8enterprise zone determines that a specific parcel shall be41.9assessed pursuant to the first clause of this sentence. The41.10governing body may provide for assessment under the first clause41.11of the preceding sentence only for property which is located in41.12an area which has been designated by the governing body for the41.13receipt of tax reductions authorized by section 469.171,41.14subdivision 1.41.15(c) Structures which are (i) located on property classified41.16as class 3a, (ii) constructed under an initial building permit41.17issued after January 2, 1996, (iii) located in a transit zone as41.18defined under section 473.3915, subdivision 3, (iv) located41.19within the boundaries of a school district, and (v) not41.20primarily used for retail or transient lodging purposes, shall41.21have a class rate of four percent on that portion of the market41.22value in excess of $100,000 and any market value under $100,00041.23that does not qualify for the three percent class rate under41.24paragraph (a). As used in item (v), a structure is primarily41.25used for retail or transient lodging purposes if over 50 percent41.26of its square footage is used for those purposes. The four41.27percent rate shall also apply to improvements to existing41.28structures that meet the requirements of items (i) to (v) if the41.29improvements are constructed under an initial building permit41.30issued after January 2, 1996, even if the remainder of the41.31structure was constructed prior to January 2, 1996. For the41.32purposes of this paragraph, a structure shall be considered to41.33be located in a transit zone if any portion of the structure41.34lies within the zone. If any property once eligible for41.35treatment under this paragraph ceases to remain eligible due to41.36revisions in transit zone boundaries, the property shall42.1continue to receive treatment under this paragraph for a period42.2of three years.42.3 (b) Class 3b consists of all other class 3 property. 42.4 Sec. 4. Minnesota Statutes 1995 Supplement, section 42.5 273.13, subdivision 25, is amended to read: 42.6 Subd. 25. [CLASS 4.](a)Class4a is4 consists of 42.7 residential real estate containing four or more units and used 42.8 or held for use by the owner or by the tenants or lessees of the 42.9 owner as a residence for rental periods of 30 days or more. 42.10 Class4a4 also includes all property described in clause (a) 42.11 below, and hospitals licensed under sections 144.50 to 144.56, 42.12 other than hospitals exempt under section 272.02, and contiguous 42.13 property used for hospital purposes, without regard to whether 42.14 the property has been platted or subdivided.Class 4a property42.15in a city with a population of 5,000 or less, that is (1)42.16located outside of the metropolitan area, as defined in section42.17473.121, subdivision 2, or outside any county contiguous to the42.18metropolitan area, and (2) whose city boundary is at least 1542.19miles from the boundary of any city with a population greater42.20than 5,000 has a class rate of 2.3 percent of market value for42.21taxes payable in 1996 and thereafter. All other class 4a42.22property has a class rate of 3.4 percent of market value for42.23taxes payable in 1996 and thereafter. For purposes of this42.24paragraph, population has the same meaning given in section42.25477A.011, subdivision 3.Class 4 property is further classified 42.26 into the following subclasses: 42.27(b) Class 4b includes:42.28(1) residential real estate containing less than four42.29units, other than seasonal residential, and recreational;42.30(2) manufactured homes not classified under any other42.31provision;42.32(3) a dwelling, garage, and surrounding one acre of42.33property on a nonhomestead farm classified under subdivision 23,42.34paragraph (b).42.35Class 4b property has a class rate of 2.8 percent of market42.36value for taxes payable in 1992, 2.5 percent of market value for43.1taxes payable in 1993, and 2.3 percent of market value for taxes43.2payable in 1994 and thereafter.43.3(c)(a) Class4c4a property includes: 43.4 (1) a structure that is: 43.5 (i) situated on real property that is used for housing for 43.6 the elderly or for low- and moderate-income families as defined 43.7 in Title II, as amended through December 31, 1990, of the 43.8 National Housing Act or the Minnesota housing finance agency law 43.9 of 1971, as amended, or rules promulgated by the agency and 43.10 financed by a direct federal loan or federally insured loan made 43.11 pursuant to Title II of the Act; or 43.12 (ii) situated on real property that is used for housing the 43.13 elderly or for low- and moderate-income families as defined by 43.14 the Minnesota housing finance agency law of 1971, as amended, or 43.15 rules adopted by the agency pursuant thereto and financed by a 43.16 loan made by the Minnesota housing finance agency pursuant to 43.17 the provisions of the act. 43.18 This clause applies only to property of a nonprofit or 43.19 limited dividend entity. Property is classifiedas class 4c43.20 under this clause for 15 years from the date of the completion 43.21 of the original construction or substantial rehabilitation, or 43.22 for the original term of the loan. 43.23 (2) a structure that is: 43.24 (i) situated upon real property that is used for housing 43.25 lower income families or elderly or handicapped persons, as 43.26 defined in section 8 of the United States Housing Act of 1937, 43.27 as amended; and 43.28 (ii) owned by an entity which has entered into a housing 43.29 assistance payments contract under section 8 which provides 43.30 assistance for 100 percent of the dwelling units in the 43.31 structure, other than dwelling units intended for management or 43.32 maintenance personnel. Property is classifiedas class 4cunder 43.33 this clause for the term of the housing assistance payments 43.34 contract, including all renewals, or for the term of its 43.35 permanent financing, whichever is shorter; and 43.36 (3) a qualified low-income building as defined in section 44.1 42(c)(2) of the Internal Revenue Code of 1986, as amended 44.2 through December 31, 1990, that (i) receives a low-income 44.3 housing credit under section 42 of the Internal Revenue Code of 44.4 1986, as amended through December 31, 1990; or (ii) meets the 44.5 requirements of that section and receives public financing, 44.6 except financing provided under sections 469.174 to 469.179, 44.7 which contains terms restricting the rents; or (iii) meets the 44.8 requirements of section 273.1317. Classification pursuant to 44.9 this clause is limited to a term of 15 years. The public 44.10 financing received must be from at least one of the following 44.11 sources: government issued bonds exempt from taxes under 44.12 section 103 of the Internal Revenue Code of 1986, as amended 44.13 through December 31, 1993, the proceeds of which are used for 44.14 the acquisition or rehabilitation of the building; programs 44.15 under section 221(d)(3), 202, or 236, of Title II of the 44.16 National Housing Act; rental housing program funds under Section 44.17 8 of the United States Housing Act of 1937 or the market rate 44.18 family graduated payment mortgage program funds administered by 44.19 the Minnesota housing finance agency that are used for the 44.20 acquisition or rehabilitation of the building; public financing 44.21 provided by a local government used for the acquisition or 44.22 rehabilitation of the building, including grants or loans from 44.23 federal community development block grants, HOME block grants, 44.24 or residential rental bonds issued under chapter 474A; or other 44.25 rental housing program funds provided by the Minnesota housing 44.26 finance agency for the acquisition or rehabilitation of the 44.27 building. 44.28 For all properties described in clauses (1), (2), and (3) 44.29 and in paragraph (d), the market value determined by the 44.30 assessor must be based on the normal approach to value using 44.31 normal unrestricted rents unless the owner of the property 44.32 elects to have the property assessed under Laws 1991, chapter 44.33 291, article 1, section 55. If the owner of the property elects 44.34 to have the market value determined on the basis of the actual 44.35 restricted rents, as provided in Laws 1991, chapter 291, article 44.36 1, section 55, the property will beassessed at the rate45.1provided for class 4a orclassified as class 4bproperty, as45.2appropriate. Properties described in clauses (1)(ii), (3), and 45.3 (4) may apply to the assessor for valuation under Laws 1991, 45.4 chapter 291, article 1, section 55. The land on which these 45.5 structures are situatedhas the class rate given in paragraph45.6(b) if the structure contains fewer than four units, and the45.7class rate given in paragraph (a) if the structure contains four45.8or more unitsis class 4b. This clause applies only to the 45.9 property of a nonprofit or limited dividend entity. 45.10 (4) a parcel of land, not to exceed one acre, and its 45.11 improvements or a parcel of unimproved land, not to exceed one 45.12 acre, if it is owned by a neighborhood real estate trust and at 45.13 least 60 percent of the dwelling units, if any, on all land 45.14 owned by the trust are leased to or occupied by lower income 45.15 families or individuals. This clause does not apply to any 45.16 portion of the land or improvements used for nonresidential 45.17 purposes. For purposes of this clause, a lower income family is 45.18 a family with an income that does not exceed 65 percent of the 45.19 median family income for the area, and a lower income individual 45.20 is an individual whose income does not exceed 65 percent of the 45.21 median individual income for the area, as determined by the 45.22 United States Secretary of Housing and Urban Development. For 45.23 purposes of this clause, "neighborhood real estate trust" means 45.24 an entity which is certified by the governing body of the 45.25 municipality in which it is located to have the following 45.26 characteristics: 45.27 (a) it is a nonprofit corporation organized under chapter 45.28 317A; 45.29 (b) it has as its principal purpose providing housing for 45.30 lower income families in a specific geographic community 45.31 designated in its articles or bylaws; 45.32 (c) it limits membership with voting rights to residents of 45.33 the designated community; and 45.34 (d) it has a board of directors consisting of at least 45.35 seven directors, 60 percent of whom are members with voting 45.36 rights and, to the extent feasible, 25 percent of whom are 46.1 elected by resident members of buildings owned by the trust;and46.2(5) except as provided in subdivision 22, paragraph (c),46.3real property devoted to temporary and seasonal residential46.4occupancy for recreation purposes, including real property46.5devoted to temporary and seasonal residential occupancy for46.6recreation purposes and not devoted to commercial purposes for46.7more than 250 days in the year preceding the year of46.8assessment. For purposes of this clause, property is devoted to46.9a commercial purpose on a specific day if any portion of the46.10property is used for residential occupancy, and a fee is charged46.11for residential occupancy. Class 4c also includes commercial46.12use real property used exclusively for recreational purposes in46.13conjunction with class 4c property devoted to temporary and46.14seasonal residential occupancy for recreational purposes, up to46.15a total of two acres, provided the property is not devoted to46.16commercial recreational use for more than 250 days in the year46.17preceding the year of assessment and is located within two miles46.18of the class 4c property with which it is used. Class 4c46.19property classified in this clause also includes the remainder46.20of class 1c resorts. Owners of real property devoted to46.21temporary and seasonal residential occupancy for recreation46.22purposes and all or a portion of which was devoted to commercial46.23purposes for not more than 250 days in the year preceding the46.24year of assessment desiring classification as class 1c or 4c,46.25must submit a declaration to the assessor designating the cabins46.26or units occupied for 250 days or less in the year preceding the46.27year of assessment by January 15 of the assessment year. Those46.28cabins or units and a proportionate share of the land on which46.29they are located will be designated class 1c or 4c as otherwise46.30provided. The remainder of the cabins or units and a46.31proportionate share of the land on which they are located will46.32be designated as class 3a. The first $100,000 of the market46.33value of the remainder of the cabins or units and a46.34proportionate share of the land on which they are located shall46.35have a class rate of three percent. The owner of property46.36desiring designation as class 1c or 4c property must provide47.1guest registers or other records demonstrating that the units47.2for which class 1c or 4c designation is sought were not occupied47.3for more than 250 days in the year preceding the assessment if47.4so requested. The portion of a property operated as a (1)47.5restaurant, (2) bar, (3) gift shop, and (4) other nonresidential47.6facility operated on a commercial basis not directly related to47.7temporary and seasonal residential occupancy for recreation47.8purposes shall not qualify for class 1c or 4c;47.9(6)(5) real property up to a maximum of one acre of land 47.10 owned by a nonprofit community service oriented organization; 47.11 provided that the property is not used for a revenue-producing 47.12 activity for more than six days in the calendar year preceding 47.13 the year of assessment and the property is not used for 47.14 residential purposes on either a temporary or permanent basis. 47.15 For purposes of this clause, a "nonprofit community service 47.16 oriented organization" means any corporation, society, 47.17 association, foundation, or institution organized and operated 47.18 exclusively for charitable, religious, fraternal, civic, or 47.19 educational purposes, and which is exempt from federal income 47.20 taxation pursuant to section 501(c)(3), (10), or (19) of the 47.21 Internal Revenue Code of 1986, as amended through December 31, 47.22 1990. For purposes of this clause, "revenue-producing 47.23 activities" shall include but not be limited to property or that 47.24 portion of the property that is used as an on-sale intoxicating 47.25 liquor or 3.2 percent malt liquor establishment licensed under 47.26 chapter 340A, a restaurant open to the public, bowling alley, a 47.27 retail store, gambling conducted by organizations licensed under 47.28 chapter 349, an insurance business, or office or other space 47.29 leased or rented to a lessee who conducts a for-profit 47.30 enterprise on the premises. Any portion of the property which 47.31 is used for revenue-producing activities for more than six days 47.32 in the calendar year preceding the year of assessment shall be 47.33 assessed as class3a3. The use of the property for social 47.34 events open exclusively to members and their guests for periods 47.35 of less than 24 hours, when an admission is not charged nor any 47.36 revenues are received by the organization shall not be 48.1 considered a revenue-producing activity; 48.2(7)(6) post-secondary student housing of not more than one 48.3 acre of land that is owned by a nonprofit corporation organized 48.4 under chapter 317A and is used exclusively by a student 48.5 cooperative, sorority, or fraternity for on-campus housing or 48.6 housing located within two miles of the border of a college 48.7 campus;and48.8(8)(7) manufactured home parks as defined in section 48.9 327.14, subdivision 3.; 48.10Class 4c property has a class rate of 2.3 percent of market48.11value, except that (i) for each parcel of seasonal residential48.12recreational property not used for commercial purposes under48.13clause (5) the first $72,000 of market value on each parcel has48.14a class rate of 1.9 percent for taxes payable in 1997 and 1.848.15percent for taxes payable in 1998 and thereafter, and the market48.16value of each parcel that exceeds $72,000 has a class rate of48.172.5 percent, and (ii) manufactured home parks assessed under48.18clause (8) have a class rate of two percent for taxes payable in48.191996, and thereafter.48.20(d) Class 4d property includes:48.21(1)(8) a structure that is: 48.22 (i) situated on real property that is used for housing for 48.23 the elderly or for low and moderate income families as defined 48.24 by the Farmers Home Administration; 48.25 (ii) located in a municipality of less than 10,000 48.26 population; and 48.27 (iii) financed by a direct loan or insured loan from the 48.28 Farmers Home Administration. Property is classified under this 48.29 clause for 15 years from the date of the completion of the 48.30 original construction or for the original term of the loan. 48.31The class ratesIn the case of property described in 48.32 paragraph (c), clauses (1), (2),and(3) andthis clause apply48.33to the properties described in them,(8), classification under 48.34 class 4a applies only in proportion to occupancy of the 48.35 structure by elderly or handicapped persons or low and moderate 48.36 income families as defined in the applicable laws unless 49.1 construction of the structure had been commenced prior to 49.2 January 1, 1984; or the project had been approved by the 49.3 governing body of the municipality in which it is located prior 49.4 to June 30, 1983; or financing of the project had been approved 49.5 by a federal or state agency prior to June 30, 1983. For those 49.6 properties,4c or 4d4a classification is available only for 49.7 those units meeting the requirements of section 273.1318. 49.8 Classification under this clause is only available to 49.9 property of a nonprofit or limited dividend entity. 49.10 In the case of a structure financed or refinanced under any 49.11 federal or state mortgage insurance or direct loan program 49.12 exclusively for housing for the elderly or for housing for the 49.13 handicapped, a unit shall be considered occupied so long as it 49.14 is actually occupied by an elderly or handicapped person or, if 49.15 vacant, is held for rental to an elderly or handicapped person. 49.16(2) For taxes payable in 1992, 1993, and 1994, only,49.17buildings and appurtenances, together with the land upon which49.18they are located, leased by the occupant under the community49.19lending model lease-purchase mortgage loan program administered49.20by the Federal National Mortgage Association, provided the49.21occupant's income is no greater than 60 percent of the county or49.22area median income, adjusted for family size and the building49.23consists of existing single family or duplex housing. The lease49.24agreement must provide for a portion of the lease payment to be49.25escrowed as a nonrefundable down payment on the housing. To49.26qualify under this clause, the taxpayer must apply to the county49.27assessor by May 30 of each year. The application must be49.28accompanied by an affidavit or other proof required by the49.29assessor to determine qualification under this clause.49.30(3)(9) Qualifying buildings and appurtenances, together 49.31 with the land upon which they are located, leased for a period 49.32 of up to five years by the occupant under a lease-purchase 49.33 program administered by the Minnesota housing finance agency or 49.34 a housing and redevelopment authority authorized under sections 49.35 469.001 to 469.047, provided the occupant's income is no greater 49.36 than 80 percent of the county or area median income, adjusted 50.1 for family size, and the building consists of two or less 50.2 dwelling units. The lease agreement must provide for a portion 50.3 of the lease payment to be escrowed as a nonrefundable down 50.4 payment on the housing. The administering agency shall verify 50.5 the occupants income eligibility and certify to the county 50.6 assessor that the occupant meets the income criteria under this 50.7 paragraph. To qualify under this clause, the taxpayer must 50.8 apply to the county assessor by May 30 of each year. For 50.9 purposes of this section, "qualifying buildings and 50.10 appurtenances" shall be defined as one or two unit residential 50.11 buildings which are unoccupied and have been abandoned and 50.12 boarded for at least six months. 50.13Class 4d property has a class rate of two percent of market50.14value except that property classified under clause (3), shall50.15have the same class rate as class 1a property.50.16(e) Residential rental property that would otherwise be50.17assessed as class 4 property under paragraph (a); paragraph (b),50.18clauses (1) and (3); paragraph (c), clause (1), (2), (3), or50.19(4), is assessed at the class rate applicable to it under50.20Minnesota Statutes 1988, section 273.13, if it is found to be a50.21substandard building under section 273.1316. Residential rental50.22property that would otherwise be assessed as class 4 property50.23under paragraph (d) is assessed at 2.3 percent of market value50.24if it is found to be a substandard building under section50.25273.1316.50.26 (b) Class 4b consists of all other class 4 property. 50.27 Sec. 5. Minnesota Statutes 1994, section 273.13, 50.28 subdivision 31, is amended to read: 50.29 Subd. 31. [CLASS 5.] Class 5 property includes: 50.30 (1) tools, implements, and machinery of an electric 50.31 generating, transmission, or distribution system or a pipeline 50.32 system transporting or distributing water, gas, crude oil, or 50.33 petroleum products or mains and pipes used in the distribution 50.34 of steam or hot or chilled water for heating or cooling 50.35 buildings, which are fixtures; 50.36 (2) unmined iron ore and low-grade iron-bearing formations 51.1 as defined in section 273.14; and 51.2 (3) all other property not otherwise classified. 51.3Class 5 property has a class rate of 5.06 percent of market51.4value.51.5 Sec. 6. Minnesota Statutes 1994, section 273.13, is 51.6 amended by adding a subdivision to read: 51.7 Subd. 34. [CLASS RATES FOR LOCAL PROPERTY TAXES.] The 51.8 following class rates apply to each class of property described 51.9 in this section in the levying of local property taxes: 51.10 Class Class rate 51.11 1 (residential) 1.0 percent 51.12 2 (agricultural) 0.5 percent 51.13 3 (commercial-industrial) 2.0 percent 51.14 4 (apartment) 2.0 percent 51.15 5 (public utility systems) 2.0 percent 51.16 Sec. 7. Minnesota Statutes 1994, section 273.13, is 51.17 amended by adding a subdivision to read: 51.18 Subd. 35. [STATE PROPERTY TAX RATES.] The following 51.19 percentages of the state tax rate apply to each class and 51.20 subclass of property described in this section: 51.21 Applicable percentage 51.22 Class, subclass of state tax rate 51.23 1a (residential homestead, 1st tier) Exempt 51.24 1b (seasonal recreational, 2nd tier) 100 percent 51.25 1c (all other class 1) 33.3 percent 51.26 2a (agricultural homestead land, 1st tier) Exempt 51.27 2b (all other class 2) 33.3 percent 51.28 3a (commercial-industrial, 1st tier) 33.3 percent 51.29 3b (all other class 3) 100 percent 51.30 4a (low-income apartments) Exempt 51.31 4b (all other class 4) 33.3 percent 51.32 5 (public utility systems) 100 percent 51.33 Sec. 8. Minnesota Statutes 1994, section 275.02, is 51.34 amended to read: 51.35 275.02 [STATE LEVY, EXCEPTIONS; CERTIFICATION OF TAX RATE.] 51.36 The state tax shall be levied on the market value of all 52.1 taxable property in the state which is not exempt from the state 52.2 tax rate under section 273.13. The rate of the tax shall be 52.3 certified by thestate auditorcommissioner of revenue to each 52.4 county auditor on or beforeNovember 15October 1 annually. The 52.5 tax rate is an amount sufficient to raise $1,235,000,000 for 52.6 taxes payable in 1997 and subsequent years. 52.7 Sec. 9. Minnesota Statutes 1995 Supplement, section 52.8 275.065, subdivision 3, is amended to read: 52.9 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 52.10 county auditor shall prepare and the county treasurer shall 52.11 deliver after November 10 and on or before November 24 each 52.12 year, by first class mail to each taxpayer at the address listed 52.13 on the county's current year's assessment roll, a notice of 52.14 proposed property taxes and, in the case of a town, final 52.15 property taxes. 52.16 (b) The commissioner of revenue shall prescribe the form of 52.17 the notice. 52.18 (c) The notice must inform taxpayers that it contains the 52.19 amount of property taxes each taxing authority other than a town 52.20 proposes to collect for taxes payable the following year and, 52.21 for a town, the amount of its final levy. It must clearly state 52.22 that each taxing authority, including regional library districts 52.23 established under section 134.201, and including the 52.24 metropolitan taxing districts as defined in paragraph (i), but 52.25 excluding all other special taxing districts and towns, will 52.26 hold a public meeting to receive public testimony on the 52.27 proposed budget and proposed or final property tax levy, or, in 52.28 case of a school district, on the current budget and proposed 52.29 property tax levy. It must clearly state the time and place of 52.30 each taxing authority's meeting and an address where comments 52.31 will be received by mail. 52.32 (d) The notice must state for each parcel: 52.33 (1) the market value of the property as determined under 52.34 section 273.11, and used for computing property taxes payable in 52.35 the following year and for taxes payable in the current year; 52.36 and, in the case of residential property, whether the property 53.1 is classified as homestead or nonhomestead. The notice must 53.2 clearly inform taxpayers of the years to which the market values 53.3 apply and that the values are final values; 53.4 (2) by the state of Minnesota, county, city or town, school 53.5 district excess referenda levy, remaining school district levy, 53.6 regional library district, if in existence, the total of the 53.7 metropolitan special taxing districts as defined in paragraph 53.8 (i) and the sum of the remaining special taxing districts, and 53.9 as a total of the taxing authorities, including all special 53.10 taxing districts, the proposed or, for a town or the state of 53.11 Minnesota, final net tax on the property for taxes payable the 53.12 following year and the actual tax for taxes payable the current 53.13 year. For the purposes of this subdivision, "school district 53.14 excess referenda levy" means school district taxes for operating 53.15 purposes approved at referendums, including those taxes based on 53.16 net tax capacity as well as those based on market value. 53.17 "School district excess referenda levy" does not include school 53.18 district taxes for capital expenditures approved at referendums 53.19 or school district taxes to pay for the debt service on bonds 53.20 approved at referenda. In the case of the city of Minneapolis, 53.21 the levy for the Minneapolis library board and the levy for 53.22 Minneapolis park and recreation shall be listed separately from 53.23 the remaining amount of the city's levy. In the case of a 53.24 parcel where tax increment or the fiscal disparities areawide 53.25 tax applies, the proposed tax levy on the captured value or the 53.26 proposed tax levy on the tax capacity subject to the areawide 53.27 tax must each be stated separately and not included in the sum 53.28 of the special taxing districts; and 53.29 (3) the increase or decrease in the amounts in clause (2) 53.30 from taxes payable in the current year to proposed or, for a 53.31 town, final taxes payable the following year, expressed as a 53.32 dollar amount and as a percentage. 53.33 (e) The notice must clearly state that the proposed or 53.34 final taxes do not include the following: 53.35 (1) special assessments; 53.36 (2) levies approved by the voters after the date the 54.1 proposed taxes are certified, including bond referenda, school 54.2 district levy referenda, and levy limit increase referenda; 54.3 (3) amounts necessary to pay cleanup or other costs due to 54.4 a natural disaster occurring after the date the proposed taxes 54.5 are certified; 54.6 (4) amounts necessary to pay tort judgments against the 54.7 taxing authority that become final after the date the proposed 54.8 taxes are certified; and 54.9 (5) the contamination tax imposed on properties which 54.10 received market value reductions for contamination. 54.11 (f) Except as provided in subdivision 7, failure of the 54.12 county auditor to prepare or the county treasurer to deliver the 54.13 notice as required in this section does not invalidate the 54.14 proposed or final tax levy or the taxes payable pursuant to the 54.15 tax levy. 54.16 (g) If the notice the taxpayer receives under this section 54.17 lists the property as nonhomestead and the homeowner provides 54.18 satisfactory documentation to the county assessor that the 54.19 property is owned and has been used as the owner's homestead 54.20 prior to June 1 of that year, the assessor shall reclassify the 54.21 property to homestead for taxes payable in the following year. 54.22 (h) In the case of class 4 residential property used as a 54.23 residence for lease or rental periods of 30 days or more, the 54.24 taxpayer must either: 54.25 (1) mail or deliver a copy of the notice of proposed 54.26 property taxes to each tenant, renter, or lessee; or 54.27 (2) post a copy of the notice in a conspicuous place on the 54.28 premises of the property. 54.29 The notice must be mailed or posted by the taxpayer by 54.30 November 27 or within three days of receipt of the notice, 54.31 whichever is later. A taxpayer may notify the county treasurer 54.32 of the address of the taxpayer, agent, caretaker, or manager of 54.33 the premises to which the notice must be mailed in order to 54.34 fulfill the requirements of this paragraph. 54.35 (i) For purposes of this subdivision, subdivisions 5a and 54.36 6, "metropolitan special taxing districts" means the following 55.1 taxing districts in the seven-county metropolitan area that levy 55.2 a property tax for any of the specified purposes listed below: 55.3 (1) metropolitan council under section 473.132, 473.167, 55.4 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 55.5 (2) metropolitan airports commission under section 473.667, 55.6 473.671, or 473.672; and 55.7 (3) metropolitan mosquito control commission under section 55.8 473.711. 55.9 For purposes of this section, any levies made by the 55.10 regional rail authorities in the county of Anoka, Carver, 55.11 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 55.12 398A shall be included with the appropriate county's levy and 55.13 shall be discussed at that county's public hearing. 55.14 Sec. 10. Minnesota Statutes 1995 Supplement, section 55.15 275.08, subdivision 1b, is amended to read: 55.16 Subd. 1b. The amounts certified under section 275.07 by an 55.17 individual local government unit, except for any amounts55.18certified under sections 124A.03, subdivision 2a, and 275.61,55.19 shall be divided by the total net tax capacity of all taxable 55.20 properties within the local government unit's taxing 55.21 jurisdiction. The resulting ratio, the local government's local 55.22 tax rate, multiplied by each property's net tax capacity shall 55.23 be each property's tax for that local government unit before 55.24 reduction by any credits. The sum of the state tax, if any, 55.25 plus each local government's tax is the property's total 55.26 property tax, before reduction by any credits. 55.27Any amount certified to the county auditor under section55.28124A.03, subdivision 2a, or 275.61, after the dates given in55.29those sections, shall be divided by the total estimated market55.30value of all taxable properties within the taxing district. The55.31resulting ratio, the taxing district's new referendum tax rate,55.32multiplied by each property's estimated market value shall be55.33each property's new referendum tax before reduction by any55.34credits.55.35 Sec. 11. Minnesota Statutes 1995 Supplement, section 55.36 276.04, subdivision 2, is amended to read: 56.1 Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 56.2 shall provide for the printing of the tax statements. The 56.3 commissioner of revenue shall prescribe the form of the property 56.4 tax statement and its contents. The statement must contain a 56.5 tabulated statement of the dollar amount due to each taxing 56.6 authority from the parcel of real property for which a 56.7 particular tax statement is prepared. The dollar amounts due 56.8 the state of Minnesota, county, township or municipality, the 56.9 total of the metropolitan special taxing districts as defined in 56.10 section 275.065, subdivision 3, paragraph (i), school district 56.11 excess referenda levy, remaining school district levy, and the 56.12 total of other voter approved referenda levies based on market 56.13 value under section 275.61 must be separately stated. The 56.14 amounts due all other special taxing districts, if any, may be 56.15 aggregated. For the purposes of this subdivision, "school 56.16 district excess referenda levy" means school district taxes for 56.17 operating purposes approved at referenda, including those taxes 56.18 based on net tax capacity as well as those based on market value. 56.19 "School district excess referenda levy" does not include school 56.20 district taxes for capital expenditures approved at referendums 56.21 or school district taxes to pay for the debt service on bonds 56.22 approved at referenda. The amount of the tax on contamination 56.23 value imposed under sections 270.91 to 270.98, if any, must also 56.24 be separately stated. The dollar amounts, including the dollar 56.25 amount of any special assessments, may be rounded to the nearest 56.26 even whole dollar. For purposes of this section whole 56.27 odd-numbered dollars may be adjusted to the next higher 56.28 even-numbered dollar. The amount of market value excluded under 56.29 section 273.11, subdivision 16, if any, must also be listed on 56.30 the tax statement.The statement shall include the following56.31sentence, printed in upper case letters in boldface print: "THE56.32STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.56.33THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING56.34CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."56.35 (b) The property tax statements for manufactured homes and 56.36 sectional structures taxed as personal property shall contain 57.1 the same information that is required on the tax statements for 57.2 real property. 57.3 (c) Real and personal property tax statements must contain 57.4 the following information in the order given in this paragraph. 57.5 The information must contain the current year tax information in 57.6 the right column with the corresponding information for the 57.7 previous year in a column on the left: 57.8 (1) the property's estimated market value under section 57.9 273.11, subdivision 1; 57.10 (2) the property's taxable market value after reductions 57.11 under section 273.11, subdivisions 1a and 16; 57.12 (3) the property's gross tax, calculated bymultiplying the57.13property's gross tax capacity times the total local tax rate and57.14 adding the property's total property tax tothe resultthe sum 57.15 of the aids enumerated in clause(3)(4); 57.16 (4) a total of the following aids: 57.17 (i) education aids payable under chapters 124 and 124A; and 57.18 (ii) local government aids for cities, towns, and counties 57.19 under chapter 477A;and57.20(iii) disparity reduction aid under section 273.1398;57.21(5) for homestead residential and agricultural properties,57.22the homestead and agricultural credit aid apportioned to the57.23property. This amount is obtained by multiplying the total57.24local tax rate by the difference between the property's gross57.25and net tax capacities under section 273.13. This amount must57.26be separately stated and identified as "homestead and57.27agricultural credit." For purposes of comparison with the57.28previous year's amount for the statement for taxes payable in57.291990, the statement must show the homestead credit for taxes57.30payable in 1989 under section 273.13, and the agricultural57.31credit under section 273.132 for taxes payable in 1989;57.32(6)(5) any credits received under sections 273.119; 57.33 273.123; 273.135; 273.1391; 273.1398, subdivision 4; 469.171; 57.34 and 473H.10, except that the amount of credit received under 57.35 section 273.135 must be separately stated and identified as 57.36 "taconite tax relief"; and 58.1(7)(6) the net tax payable in the manner required in 58.2 paragraph (a). 58.3 The commissioner of revenue shall certify to the county 58.4 auditor the actual or estimated aids enumerated inclauses (3)58.5andclause (4) that local governments will receive in the 58.6 following year.In the case of a county containing a city of58.7the first class, for taxes levied in 1991, and for all counties58.8for taxes levied in 1992 and thereafter,The commissioner must 58.9 certify this amount by September 1 of each year. 58.10 Sec. 12. Minnesota Statutes 1994, section 290.06, is 58.11 amended by adding a subdivision to read: 58.12 Subd. 25. [PROPERTY TAX CREDIT FOR DISABLED.] (a) A 58.13 disabled individual may claim a credit against the tax imposed 58.14 by this chapter equal to 50 percent of the ad valorem homestead 58.15 property tax paid during the taxable year. The maximum credit 58.16 allowed to an individual or a married couple for the year is 58.17 $300. Homestead tax means the tax paid on the individual's or 58.18 married couple's principal residence, classified as class 1 58.19 under section 273.13, subdivision 22. 58.20 (b) If the amount of the credit under this subdivision 58.21 exceeds the claimant's liability for tax, the commissioner shall 58.22 refund the excess to the individual. An amount sufficient to 58.23 pay the refunds is appropriated to the commissioner from the 58.24 general fund. 58.25 (c) For purposes of this subdivision, a disabled person 58.26 means: 58.27 (1) a blind person; 58.28 (2) a person who: 58.29 (i) served in the active military or naval service of the 58.30 United States, 58.31 (ii) is entitled to compensation under the laws and 58.32 regulations of the United States for permanent and total 58.33 service-connected disability due to the loss, or loss of use, by 58.34 reason of amputation, ankylosis, progressive muscular 58.35 dystrophies, or paralysis of both lower extremities, such as to 58.36 preclude motion without the aid of braces, crutches, canes, or a 59.1 wheelchair, and 59.2 (iii) has acquired a special housing unit with special 59.3 fixtures or movable facilities made necessary by the nature of 59.4 the veteran's disability; 59.5 (3) the surviving spouse of a deceased individual who 59.6 qualified under clause (2), for as long as the surviving spouse 59.7 uses the special housing unit as the spouse's principal 59.8 residence; 59.9 (4) any person who: 59.10 (i) is permanently and totally disabled, and 59.11 (ii) receives 90 percent of more of the person's total 59.12 income from one or more of the following: 59.13 (A) aid from any state as a result of that disability; 59.14 (B) supplemental security income for the disabled; 59.15 (C) workers' compensation based on a finding of total and 59.16 permanent disability; 59.17 (D) social security disability, including the amount of a 59.18 disability insurance benefit which is converted to an old age 59.19 insurance benefit and any subsequent cost of living increases; 59.20 (E) aid under the federal Railroad Retirement Act of 1937, 59.21 United States Code Annotated, title 45, section 228b(a)5; and 59.22 (F) a pension from any local government retirement fund 59.23 located in the state of Minnesota as a result of that 59.24 disability; or 59.25 (5) any person who is permanently and totally disabled and 59.26 whose household income as defined in section 290A.03, 59.27 subdivision 5, is 150 percent or less of the federal poverty 59.28 level. 59.29 Permanently and total disabled for purposes of this 59.30 subdivision means a condition that is permanent and totally 59.31 incapacitates the person from working at an occupation which 59.32 brings the person an income. 59.33 Sec. 13. Minnesota Statutes 1994, section 473F.02, 59.34 subdivision 4, is amended to read: 59.35 Subd. 4. [RESIDENTIAL PROPERTY.] "Residential property" 59.36 meansthe following categories of propertyany property 60.1 classified as class 1 or class 4, as defined in section 273.13, 60.2excluding that portion of such property exempt from taxation60.3pursuant to section 272.02:60.4(a) Class 1, 1b, 2a, 4a, 4b, 4c, and 4d property except60.5resorts and property classified under section 273.13,60.6subdivision 25, paragraph (c), clause (6);60.7(b) and that portion of class 3a, 3b, and 5if the property 60.8 is used exclusively for residential occupancy. 60.9 Sec. 14. Minnesota Statutes 1994, section 473F.02, 60.10 subdivision 5, is amended to read: 60.11 Subd. 5. [GOVERNMENTAL UNIT.] "Governmental unit" means a 60.12 county, city, town, school district, or other taxing unit or 60.13 body, excluding the state of Minnesota, which levies ad valorem 60.14 taxes in whole or in part within the area. 60.15 Sec. 15. Minnesota Statutes 1994, section 473F.02, 60.16 subdivision 24, is amended to read: 60.17 Subd. 24. [LOCAL TAX RATE.] "Local tax rate" means a 60.18 governmental unit's levy, including any portion levied against60.19market value under section 124A.03, subdivision 2a,divided by 60.20 its net tax capacity. 60.21 Sec. 16. Minnesota Statutes 1994, section 473F.06, is 60.22 amended to read: 60.23 473F.06 [INCREASE IN NET TAX CAPACITY.] 60.24 On or beforeJulyAugust 15 of each year, the auditor of 60.25 each county in the area shall determine the amount, if any, by 60.26 which the net tax capacity determinedin the preceding year60.27 under section 473F.05, of commercial-industrial property subject 60.28 to taxation within each municipality in the auditor's county 60.29 exceeds the net tax capacity in 1971 of commercial-industrial 60.30 property subject to taxation within that municipality. If a 60.31 municipality is located in two or more counties within the area, 60.32 the auditors of those counties shall certify the data required 60.33 by section 473F.05 to the county auditor who is responsible 60.34 under other provisions of law for allocating the levies of that 60.35 municipality between or among the affected counties. That 60.36 county auditor shall determine the amount of the net excess, if 61.1 any, for the municipality under this section, and certify that 61.2 amount under section 473F.07. Notwithstanding any other 61.3 provision of sections 473F.01 to 473F.13 to the contrary, in the 61.4 case of a municipality which is designated on July 24, 1971, as 61.5 a redevelopment area under section 401(a)(4) of the Public Works 61.6 and Economic Development Act of 1965, Public Law Number 89-136, 61.7 the increase in its net tax capacity of commercial-industrial 61.8 property for purposes of this section shall be determined in 61.9 each year by using as a base the net tax capacity of 61.10 commercial-industrial property in that municipality in the 1989 61.11 assessment year, rather than the net tax capacity of such 61.12 property in 1971. The increase in total net tax capacity 61.13 determined by this section shall be reduced by the amount of any 61.14 decreases in net tax capacity of commercial-industrial property 61.15 resulting from any court decisions, court related stipulation 61.16 agreements, or abatements for a prior year, and only in the 61.17 amount of such decreases made during the 12-month period ending 61.18 on May 1 of the current assessment year, where such decreases, 61.19 if originally reflected in the determination of a prior year's 61.20 net tax capacity under section 473F.05, would have resulted in a 61.21 smaller contribution from the municipality in that year. An 61.22 adjustment for such decreases shall be made only if the 61.23 municipality made a contribution in a prior year based on the 61.24 higher net tax capacity of the commercial-industrial property. 61.25 Sec. 17. Minnesota Statutes 1994, section 473F.07, 61.26 subdivision 1, is amended to read: 61.27 Subdivision 1. [AREAWIDE NET TAX CAPACITY.] Each county 61.28 auditor shall certify the determinations under sections 473F.05 61.29 and 473F.06 to the administrative auditor on or before August161.30 15 of each year. 61.31 The administrative auditor shall determine an amount equal 61.32 to4020 percent of the sum of the amounts certified under 61.33 section 473F.06. The resulting amount shall be known as the 61.34 "areawide net tax capacity for ........(year)." 61.35 Sec. 18. Minnesota Statutes 1994, section 473F.07, 61.36 subdivision 5, is amended to read: 62.1 Subd. 5. [CERTIFICATION TO COUNTY AUDITOR.] The result of 62.2 the procedure prescribed by subdivision 4 shall be known as the 62.3 "areawide net tax capacity for ........(year) attributable to 62.4 ..................(municipality)." The administrative auditor 62.5 shall certify such product to the auditor of the county in which 62.6 the municipality is located on or beforeAugustSeptember 15. 62.7 Sec. 19. Minnesota Statutes 1994, section 473F.08, 62.8 subdivision 2, is amended to read: 62.9 Subd. 2. [COMPUTATION OF NET TAX CAPACITY.] The net tax 62.10 capacity of a governmental unit is its net tax capacity, as 62.11 determined in accordance with other provisions of law including 62.12 section 469.177, subdivision 3, subject to the following 62.13 adjustments: 62.14 (a) There shall be subtracted from its net tax capacity, in 62.15 each municipality in which the governmental unit exercises ad 62.16 valorem taxing jurisdiction, an amount which bears the same 62.17 proportion to4020 percent of the amount certified in that year 62.18 under sections 473F.06 and 473F.07 for the municipality as the 62.19 totalpreceding year'snet tax capacity of commercial-industrial 62.20 property which is subject to the taxing jurisdiction of the 62.21 governmental unit within the municipality, determined without 62.22 regard to section 469.177, subdivision 3, bears to the total 62.23preceding year'snet tax capacity of commercial-industrial 62.24 property within the municipality, determined without regard to 62.25 section 469.177, subdivision 3; 62.26 (b) There shall be added to its net tax capacity, in each 62.27 municipality in which the governmental unit exercises ad valorem 62.28 taxing jurisdiction, an amount which bears the same proportion 62.29 to the areawide net tax capacity for the year attributable to 62.30 that municipality as the totalpreceding year'snet tax capacity 62.31 of residential property which is subject to the taxing 62.32 jurisdiction of the governmental unit within the municipality 62.33 bears to the totalpreceding year'snet tax capacity of 62.34 residential property of the municipality. 62.35 Sec. 20. Minnesota Statutes 1994, section 473F.08, 62.36 subdivision 3, is amended to read: 63.1 Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall 63.2 apportion the levy of each governmental unit in the auditor's 63.3 county in the manner prescribed by this subdivision. The 63.4 auditor shall: 63.5 (a) byAugust 20January 31, determine the areawide portion 63.6 of the levy for each governmental unit by multiplying the local 63.7 tax rate of the governmental unit for theprecedingcurrent levy 63.8 year times the distribution value set forth in subdivision 2, 63.9 clause (b); and 63.10 (b)by September 5,determine the local portion of the 63.11 current year's levy by subtracting the resulting amount from 63.12 clause (a) from the governmental unit's current year's levy. 63.13 For any governmental unit for which the county auditor has 63.14 not yet determined the local tax rate by January 31, the county 63.15 auditor shall determine the areawide portion of the levy based 63.16 on an estimated tax rate. In the following year, the 63.17 distribution levy of the unit must be adjusted to correct for 63.18 the difference between the distribution levy actually received 63.19 and the distribution levy that would have been received if the 63.20 actual tax rate had been used. 63.21 Sec. 21. Minnesota Statutes 1995 Supplement, section 63.22 473F.08, subdivision 5, is amended to read: 63.23 Subd. 5. [AREAWIDE TAX RATE.] On or beforeAugust 2563.24 February 5 of each year, the county auditor shall certify to the 63.25 administrative auditor that portion of the levy of each 63.26 governmental unit determined under subdivisions 3, clause (a), 63.27 3a, and 3b. The administrative auditor shall then determine the 63.28 areawide tax rate sufficient to yield an amount equal to the sum 63.29 of such levies from the areawide net tax capacity. On or before 63.30September 1February 10 of each year, the administrative auditor 63.31 shall certify the areawide tax rate to each of the county 63.32 auditors. For the purposes of the notice required under section 63.33 275.065, the areawide rate for the proposed taxes payable year 63.34 shall be assumed to the same as for the current taxes payable 63.35 year. 63.36 Sec. 22. [TIF GRANTS; APPROPRIATIONS.] 64.1 (a) The commissioner of revenue shall pay grants to 64.2 municipalities for deficits in tax increment financing districts 64.3 caused by the changes in class rates under this article. 64.4 Municipalities must submit applications for the grants in a form 64.5 prescribed by the commissioner by no later than March 1 for 64.6 taxes payable during the calendar year. The maximum grant 64.7 equals the lesser of: 64.8 (1) the reduction in the tax increment financing district's 64.9 revenues derived from increment resulting from the class rate 64.10 reductions under this article; and 64.11 (2) the municipality's total available tax increments, 64.12 including those from previous years, less the amount due during 64.13 the calendar year to pay bonds issued and sold before and 64.14 binding contracts entered into before the day following final 64.15 enactment of this act. 64.16 If the total applications for grants exceed the amount 64.17 available under the appropriation, the commissioner shall 64.18 proportionately reduce the grant for each municipality. These 64.19 grants are available for calendar years 1997, 1998, and 1999. 64.20 (b) $80,000,000 is appropriated to the commissioner of 64.21 revenue for purposes of this section. This appropriation does 64.22 not cancel until June 30, 2000. 64.23 Sec. 23. [REPEALER.] 64.24 Minnesota Statutes 1994, sections 273.13, subdivision 32; 64.25 275.08, subdivisions 1c and 1d; 275.61; and 473F.08, subdivision 64.26 8a, are repealed. 64.27 Sec. 24. [EFFECTIVE DATE.] 64.28 (a) The provisions of this article take effect as provided 64.29 in paragraph (b) only if the constitutional amendment proposed 64.30 to the people by article 1, section 1, is adopted in the 1996 64.31 general election. 64.32 (b) Sections 1 to 11 and 13 to 23 are effective for taxes 64.33 payable in 1997 and subsequent years. Section 12 is effective 64.34 for tax years beginning after December 31, 1996. 64.35 ARTICLE 4 64.36 LOCAL GOVERNMENT AIDS 65.1 Section 1. Minnesota Statutes 1994, section 477A.011, 65.2 subdivision 20, is amended to read: 65.3 Subd. 20. [CITYNET TAX CAPACITY.] "CityNet tax capacity" 65.4 for a governmental jurisdiction means (1) the net tax capacity 65.5 computed using the net tax capacity rates in section 273.13, and 65.6 the market values for taxes payable in the year prior to the aid 65.7 distribution plus (2) acity'sjurisdiction's fiscal disparities 65.8 distribution tax capacity under section 473F.08, subdivision 2, 65.9 paragraph (b), for taxes payable in the year prior to that for 65.10 which aids are being calculated.The market value utilized in65.11computing cityNet tax capacity shall be reduced by the sum of 65.12 (1) acity's market value of commercial industrial property as65.13defined in section 473F.02, subdivision 3, multiplied by the65.14ratio determined pursuant tojurisdiction's fiscal disparities 65.15 contribution tax capacity under section 473F.08, subdivision 2, 65.16 paragraph (a), (2)the market value ofthe capturedvaluenet 65.17 tax capacity of tax increment financing districts as defined in 65.18 section 469.177, subdivision 2, and (3) themarket valuenet tax 65.19 capacity of transmission lines deducted from acity's65.20 jurisdiction's total net tax capacity under section 65.21 273.425.The cityNet tax capacity will be computed using 65.22 equalized market values. 65.23 Sec. 2. Minnesota Statutes 1994, section 477A.011, 65.24 subdivision 35, is amended to read: 65.25 Subd. 35. [TAX EFFORT RATE.] "Tax effort rate" for a type 65.26 of jurisdiction means the sum of the net levy for allcities65.27 jurisdictions of that type divided by the sum of thecitynet 65.28 taxcapacitycapacities for allcitiesjurisdictions of that 65.29 type. For purposes of this section, "net levy" means thecity65.30 levy, after all adjustments, used for calculating the local tax 65.31 rate under section 275.08 for taxes payable in the year prior to 65.32 the aid distribution. The fiscaldisparitydisparities 65.33 distribution levy is included in net levy. 65.34 Sec. 3. Minnesota Statutes 1994, section 477A.011, is 65.35 amended by adding a subdivision to read: 65.36 Subd. 38. [COUNTY REVENUE NEED.] "County revenue need" 66.1 means the sum of a county's population and its public assistance 66.2 caseload as defined in section 256E.06, subdivision 1, paragraph 66.3 (a). 66.4 Sec. 4. Minnesota Statutes 1994, section 477A.012, 66.5 subdivision 1, is amended to read: 66.6 Subdivision 1. [AID AMOUNT.]In calendar year 1991 and66.7subsequent years, each county government shall receive a66.8distribution equal to the aid amount it received under this66.9subdivision in the previous year less any permanent reductions66.10made under section 477A.0132.For each year, each county's aid 66.11 distribution equals the amount, if any, by which (1) the 66.12 county's revenue need multiplied by the state payment factor 66.13 exceeds (2) the county's net tax capacity multiplied by one-half 66.14 of the county tax effort rate. For the purposes of this 66.15 subdivision "state payment factor" means an amount determined by 66.16 the commissioner so that the sum of the aid amounts to all 66.17 counties equals the amount specified in section 477A.03, 66.18 subdivision 2. 66.19 Sec. 5. Minnesota Statutes 1994, section 477A.013, 66.20 subdivision 9, is amended to read: 66.21 Subd. 9. [CITY AID DISTRIBUTION.](a)In calendar year 66.2219941997 and thereafter, each city shall receive an aid 66.23 distribution equal tothe sum of (1)the city formula aid under 66.24 subdivision 8, and (2) its city aid base. 66.25(b) The percentage increase for a first class city in66.26calendar year 1995 and thereafter shall not exceed the66.27percentage increase in the sum of the aid to all cities under66.28this section in the current calendar year compared to the sum of66.29the aid to all cities in the previous year.66.30(c) The total aid for any city, except a first class city,66.31shall not exceed the sum of (1) ten percent of the city's net66.32levy for the year prior to the aid distribution plus (2) its66.33total aid in the previous year before any increases or decreases66.34under sections 16A.711, subdivision 5, and 477A.0132.66.35(d) Notwithstanding paragraph (c), in 1995 only, for cities66.36which in 1992 or 1993 transferred an amount from governmental67.1funds to their sewer and water fund in an amount greater than67.2their net levy for taxes payable in the year in which the67.3transfer occurred, the total aid shall not exceed the sum of (1)67.420 percent of the city's net levy for the year prior to the aid67.5distribution plus (2) its total aid in the previous year before67.6any increases or decreases under sections 16A.711, subdivision67.75, and 477A.0132.67.8 Sec. 6. Minnesota Statutes 1995 Supplement, section 67.9 477A.03, subdivision 2, is amended to read: 67.10 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 67.11 discharge the duties imposed by sections 477A.011 to 477A.014 is 67.12 annually appropriated from the general fund to the commissioner 67.13 of revenue. 67.14 (b) Aid payments to counties under section 477A.012, 67.15 subdivision 1, are limited to $200,000,000 in 1997. For aid 67.16 payable in 1998 and thereafter, the total aids paid under 67.17 section 477A.012, subdivision 1, are the amounts certified to be 67.18 paid in the previous year, adjusted for inflation as provided 67.19 under subdivision 3. 67.20 (c) For aids payable in 1996 and thereafter, the total aids 67.21 paid undersections 477A.013, subdivision 9, andsection 67.22 477A.0122 are the amounts certified to be paid in the previous 67.23 year, adjusted for inflation as provided under subdivision 3. 67.24 (d) Aid payments to counties under section 477A.0121 are 67.25 limited to $20,265,000 in 1996. For aid payable in 1997 and 67.26 thereafter, the total aids paid under section 477A.0121 are the 67.27 amounts certified to be paid in the previous year, adjusted for 67.28 inflation as provided under subdivision 3. 67.29 (e) Aid payments to cities under section 477A.013, 67.30 subdivision 9, are limited to $375,000,000 in 1997. For aid 67.31 payable in 1997 and thereafter, the total aids paid under 67.32 section 477A.013, subdivision 9, are the amounts certified to be 67.33 paid in the previous year, adjusted for inflation as provided 67.34 under subdivision 3. 67.35 Sec. 7. [REPEALER.] 67.36 Minnesota Statutes 1994, sections 273.1398, subdivisions 2, 68.1 3, and 3a; and 477A.011, subdivision 37; and Minnesota Statutes 68.2 1995 Supplement, section 477A.011, subdivision 36, are repealed. 68.3 Sec. 8. [EFFECTIVE DATE.] 68.4 (a) The provisions of this article take effect as provided 68.5 in paragraph (b) only if the constitutional amendment proposed 68.6 to the people by article 1, section 1, is adopted in the 1996 68.7 general election. 68.8 (b) This article is effective for aids payable in 1997 and 68.9 thereafter. 68.10 ARTICLE 5 68.11 LOW INCOME TAX CREDITS 68.12 Section 1. [290.0672] [COMPREHENSIVE LOW INCOME TAX 68.13 CREDIT.] 68.14 Subdivision 1. [CREDIT ALLOWED.] (a) An individual may 68.15 claim a credit against the tax imposed by this chapter based on 68.16 the individual's income and family size under the following 68.17 rules. 68.18 (b)(1) The initial credit amount equals 50 percent of the 68.19 total Minnesota state and local tax burden, as estimated by the 68.20 commissioner under subdivision 4, on the average family with an 68.21 income at the federal poverty guideline and with the same family 68.22 size as the taxpayer's family. 68.23 (2) Taxpayers with family sizes greater than six members 68.24 are assumed to bear a tax burden equal to a family of six for 68.25 purposes of clause (1). 68.26 (3) Single taxpayers with no dependents are assumed to bear 68.27 a tax burden equal to one-half of the tax burden of a family 68.28 with two members. 68.29 (c) If the taxpayer's income is less than or equal to the 68.30 federal poverty guideline, the initial amount equals the 68.31 credit. If the taxpayer's income exceeds the federal poverty 68.32 guideline, the initial credit amount must be reduced 68.33 proportionately so that no credit is available when the 68.34 taxpayer's income equals or exceeds 250 percent of the federal 68.35 poverty guideline. The commissioner shall establish a table 68.36 setting the reduction in the initial credit amount for taxpayers 69.1 with incomes over the federal poverty guideline. 69.2 (d) An individual who is claimed as a dependent on the 69.3 federal tax return of another or who meets the requirements to 69.4 be claimed as a dependent on the tax return of another (using 69.5 the definition of a dependent in this section) does not qualify 69.6 for a credit under this section. 69.7 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 69.8 the following terms have the meanings given. 69.9 (a) "Dependent" means any person who is considered a 69.10 dependent under sections 151 and 152 of the Internal Revenue 69.11 Code. For a son, stepson, daughter, or stepdaughter of the 69.12 claimant, amounts received as an aid to families with dependent 69.13 children grant, allowance to or on behalf of the child, surplus 69.14 food, or other relief in kind supplied by a governmental agency 69.15 may not be used to determine whether the child received more 69.16 than half of the child's support from the claimant. 69.17 (b) "Family size" means the number of individuals in the 69.18 taxpayer's family, including only the taxpayer, spouse, and 69.19 dependents. 69.20 (c) "Federal poverty guidelines" mean the federal poverty 69.21 guidelines as determined by the United States secretary of 69.22 health and human services or the secretary's designee. 69.23 (d) "Income" means the sum of the following: 69.24 (1) federal adjusted gross income as defined in section 62 69.25 of the Internal Revenue Code: and 69.26 (2) the sum of the following amounts to the extent not 69.27 included in clause (1): 69.28 (i) all nontaxable income; 69.29 (ii) the amount of a passive activity loss that is not 69.30 disallowed as a result of section 469, paragraph (i) or (m) of 69.31 the Internal Revenue Code and the amount of passive activity 69.32 loss carryover allowed under section 469(b) of the Internal 69.33 Revenue Code; 69.34 (iii) an amount equal to the total of any discharge of 69.35 qualified farm indebtedness of a solvent individual excluded 69.36 from gross income under section 108(g) of the Internal Revenue 70.1 Code; 70.2 (iv) cash public assistance and relief; 70.3 (v) any pension or annuity (including railroad retirement 70.4 benefits, all payments received under the federal Social 70.5 Security Act, supplemental security income, and veterans 70.6 benefits), which was not exclusively funded by the claimant or 70.7 spouse, or which was funded exclusively by the claimant or 70.8 spouse and which funding payments were excluded from federal 70.9 adjusted gross income in the years when the payments were made; 70.10 (vi) interest received from the federal or a state 70.11 government or any instrumentality or political subdivision 70.12 thereof; 70.13 (vii) workers' compensation; 70.14 (viii) nontaxable strike benefits; 70.15 (ix) the gross amounts of payments received in the nature 70.16 of disability income or sick pay as a result of accident, 70.17 sickness, or other disability, whether funded through insurance 70.18 or otherwise; 70.19 (x) a lump sum distribution under section 402(e)(3) of the 70.20 Internal Revenue Code; 70.21 (xi) contributions made by the claimant to an individual 70.22 retirement account, including a qualified voluntary employee 70.23 contribution; simplified employee pension plan; self-employed 70.24 retirement plan; cash or deferred arrangement plan under section 70.25 457 of the Internal Revenue Code; and 70.26 (xii) nontaxable scholarship or fellowship grants. 70.27 If an individual files an income tax return on a fiscal 70.28 year basis, the term "federal adjusted gross income" means 70.29 federal adjusted gross income for the fiscal year ending in the 70.30 next calendar year. Federal adjusted gross income may not be 70.31 reduced by the amount of a net operating loss carryback or 70.32 carryforward or a capital loss carryback or carryforward allowed 70.33 for the year. 70.34 (b) "Income" does not include: 70.35 (1) amounts excluded under the Internal Revenue Code, 70.36 sections 101(a), 102, and 121; 71.1 (2) amounts of any pension or annuity that were exclusively 71.2 funded by the claimant or spouse if the funding payments were 71.3 not excluded from federal adjusted gross income in the years 71.4 when the payments were made; 71.5 (3) surplus food or other relief in kind supplied by a 71.6 governmental agency; and 71.7 (4) child support payments received under a temporary or 71.8 final decree of dissolution or legal separation. 71.9 Subd. 4. [ESTIMATES OF TAX BURDEN.] (a) The commissioner 71.10 shall biennially estimate the total state and local tax burden 71.11 on Minnesota residents for families with incomes at the federal 71.12 poverty guideline. The commissioner must prepare separate 71.13 estimates for families with two, three, four, five, and six 71.14 members. The commissioner shall prepare the estimates following 71.15 the methodology used in preparing the tax incidence study. The 71.16 estimates must reflect the Minnesota tax law as enacted and in 71.17 effect or to be in effect for each of the next two years. The 71.18 commissioner shall use the best available data on local tax 71.19 burdens in preparing the estimates. 71.20 (b) The estimates must be prepared by October 31 of each 71.21 odd numbered year. The estimates apply to credits to be paid 71.22 during the next two calendar years. Separate estimates must be 71.23 prepared for each year, if the commissioner concludes that 71.24 material changes have been enacted to take effect in state tax 71.25 law during the biennial period. 71.26 (c) For purposes of the estimates, total state and local 71.27 tax burden means the final economic burden of tax after 71.28 accounting for shifting of the following state and local taxes 71.29 on Minnesota residents: 71.30 (1) individual income taxes, 71.31 (2) corporate franchise taxes, 71.32 (3) general sales taxes, including the taxes on motor 71.33 vehicles, but not including local sales taxes, 71.34 (4) real and personal property taxes, 71.35 (5) motor fuels excise taxes, 71.36 (6) motor vehicle registration taxes, 72.1 (7) excise taxes on alcoholic beverages, cigarettes, and 72.2 tobacco products, 72.3 (8) insurance premium taxes, 72.4 (9) gross revenues taxes on hospitals, health care 72.5 providers, prescription drugs, and pharmacies. 72.6 Subd. 5. [CREDIT REFUNDABLE.] If the amount of credit for 72.7 which the claimant is eligible under this section exceeds the 72.8 claimant's tax liability under this chapter, the commissioner 72.9 shall refund the excess to the claimant. 72.10 Subd. 6. [APPROPRIATION.] An amount sufficient to pay the 72.11 refunds required by this section is appropriated to the 72.12 commissioner from the general fund. 72.13 Sec. 2. Minnesota Statutes 1994, section 290A.02, is 72.14 amended to read: 72.15 290A.02 [PURPOSE.] 72.16 The purpose of this chapter is to provide property tax 72.17 relief tocertainpersons who ownor rent theirhomesteads with 72.18 large increases in property taxes. 72.19 Sec. 3. Minnesota Statutes 1995 Supplement, section 72.20 290A.03, subdivision 6, is amended to read: 72.21 Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling 72.22 occupied as the claimant's principal residence and so much of 72.23 the land surrounding it, not exceeding ten acres, as is 72.24 reasonably necessary for use of the dwelling as a home and any 72.25 other property used for purposes of a homestead as defined in 72.26 section 273.13, subdivision 22, except for agricultural land 72.27 assessed as part of a homestead pursuant to section 273.13, 72.28 subdivision 23,"homestead" is limited to 320 acres or, where72.29the farm homestead is rented, one acreat the class rates for 72.30 class 1a property under section 273.13, subdivision 22. The 72.31 homesteadmaymust be ownedor rentedand may be a part of a 72.32 multidwelling or multipurpose building and the land on which it 72.33 is built. A manufactured home, as defined in section 273.125, 72.34 subdivision 8, or a park trailer taxed as a manufactured home 72.35 under section 168.012, subdivision 9, assessed as personal 72.36 property may be a dwelling for purposes of this subdivision. 73.1 Sec. 4. Minnesota Statutes 1994, section 290A.03, 73.2 subdivision 8, is amended to read: 73.3 Subd. 8. [CLAIMANT.](a)"Claimant" means a person, other73.4than a dependent, as defined under sections 151 and 152 of the73.5Internal Revenue Code disregarding section 152(b)(3) of the73.6Internal Revenue Code,who filed a claim authorized by this 73.7 chapter and who was a resident of this state as provided in 73.8 chapter 290 during the calendar year for which the claim for 73.9 relief was filed. 73.10(b) In the case of a claim relating to rent constituting73.11property taxes, the claimant shall have resided in a rented or73.12leased unit on which ad valorem taxes or payments made in lieu73.13of ad valorem taxes, including payments of special assessments73.14imposed in lieu of ad valorem taxes, are payable at some time73.15during the calendar year covered by the claim.73.16(c) "Claimant" shall not include a resident of a nursing73.17home, intermediate care facility, or long-term residential73.18facility whose rent constituting property taxes is paid pursuant73.19to the supplemental security income program under title XVI of73.20the Social Security Act, the Minnesota supplemental aid program73.21under sections 256D.35 to 256D.54, the medical assistance73.22program pursuant to title XIX of the Social Security Act, or the73.23general assistance medical care program pursuant to section73.24256D.03, subdivision 3. If only a portion of the rent73.25constituting property taxes is paid by these programs, the73.26resident shall be a claimant for purposes of this chapter, but73.27the refund calculated pursuant to section 290A.04 shall be73.28multiplied by a fraction, the numerator of which is income as73.29defined in subdivision 3, paragraphs (1) and (2), reduced by the73.30total amount of income from the above sources other than vendor73.31payments under the medical assistance program or the general73.32assistance medical care program and the denominator of which is73.33income as defined in subdivision 3, paragraphs (1) and (2), plus73.34vendor payments under the medical assistance program or the73.35general assistance medical care program, to determine the73.36allowable refund pursuant to this chapter.74.1(d) Notwithstanding paragraph (c), if the claimant was a74.2resident of the nursing home, intermediate care facility or74.3long-term residential facility for only a portion of the74.4calendar year covered by the claim, the claimant may compute74.5rent constituting property taxes by disregarding the rent74.6constituting property taxes from the nursing home, intermediate74.7care facility, or long-term residential facility and use only74.8that amount of rent constituting property taxes or property74.9taxes payable relating to that portion of the year when the74.10claimant was not in the facility. The claimant's household74.11income is the income for the entire calendar year covered by the74.12claim.74.13(e) In the case of a claim for rent constituting property74.14taxes of a part-year Minnesota resident, the income and rental74.15reflected in this computation shall be for the period of74.16Minnesota residency only. Any rental expenses paid which may be74.17reflected in arriving at federal adjusted gross income cannot be74.18utilized for this computation. When two individuals of a74.19household are able to meet the qualifications for a claimant,74.20they may determine among them as to who the claimant shall be.74.21If they are unable to agree, the matter shall be referred to the74.22commissioner of revenue whose decision shall be final. If a74.23homestead property owner was a part-year Minnesota resident, the74.24income reflected in the computation made pursuant to section74.25290A.04 shall be for the entire calendar year, including income74.26not assignable to Minnesota.74.27(f) If a homestead is occupied by two or more renters, who74.28are not husband and wife, the rent shall be deemed to be paid74.29equally by each, and separate claims shall be filed by each.74.30The income of each shall be each renter's household income for74.31purposes of computing the amount of credit to be allowed.74.32 Sec. 5. Minnesota Statutes 1994, section 290A.07, 74.33 subdivision 3, as amended by 1995 Laws, chapter 264, article 4, 74.34 section 13, is amended to read: 74.35 Subd. 3. [PAYMENT AS DEDUCTION ON PROPERTY TAX STATEMENT.] 74.36In the case of property not included in subdivision 2a, payment75.1of a refund under section 290A.04, subdivision 2, is made as a75.2deduction on the property tax statement for the homestead for75.3taxes payable the following year, andPayment of a refund under 75.4 section 290A.04, subdivision 2h, is made as a deduction on the 75.5 property tax statement for the homestead for taxes payable in 75.6 the current year. 75.7 Sec. 6. Minnesota Statutes 1994, section 290A.09, is 75.8 amended to read: 75.9 290A.09 [PROOF OF CLAIM.] 75.10 Every claimant shall supply to the department of revenue, 75.11 in support of the claim, proof of eligibility under this 75.12 chapter, including but not limited to amount ofrent paid or75.13 property taxes accrued,name and address of owner or managing75.14agent of property rented,changes in homestead,household75.15membership, household income,size and nature of property 75.16 claimed as a homestead. 75.17Disabled persons filing claims shall submit proof of75.18disability in the form and manner as the department may75.19prescribe. The department may require examination and75.20certification by the claimant's physician or by a physician75.21designated by the department. The cost of any examination shall75.22be borne by the claimant, unless the examination proves the75.23disability, in which case the cost of the examination shall be75.24borne by the department.75.25A determination of disability of a claimant by the social75.26security administration under Title II or Title XVI of the75.27Social Security Act shall constitute presumptive proof of75.28disability.75.29 Sec. 7. [REPEALER.] 75.30 Minnesota Statutes 1994, sections 290.067, subdivisions 2, 75.31 2a, 2b, 3, and 4; 290.0671; 290A.03, subdivisions 3, 4, 5, 7, 9, 75.32 10, 11, 12, 12a, 14; 290A.04, subdivisions 1, 2, 2a, 2b, and 5; 75.33 290A.05; 290A.08; 290A.091; 290A.19, 290A.22; and 290A.23, 75.34 subdivision 1; and Minnesota Statutes 1995 Supplement, sections 75.35 290.067, subdivision 1; 290A.04, subdivisions 3 and 6; and 75.36 290A.07, subdivision 2a, are repealed. 76.1 Sec. 8. [EFFECTIVE DATE.] 76.2 Sections 1 to 8 are effective for taxable years beginning 76.3 after December 31, 1996 and for property tax refunds payable 76.4 beginning in 1998, but only if the constitutional amendment 76.5 proposed to the people by article 1, section 1 is adopted at the 76.6 1996 general election. 76.7 ARTICLE 6 76.8 SALES TAX 76.9 Section 1. Minnesota Statutes 1995 Supplement, section 76.10 289A.18, subdivision 4, is amended to read: 76.11 Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use 76.12 tax returns must be filed on or before the 20th day of the month 76.13 following the close of the preceding reporting period, except 76.14 that annual use tax returns provided for under section 289A.11, 76.15 subdivision 1, must be filed by April 15 following the close of 76.16 the calendar year, in the case of individuals. Annual use tax 76.17 returns of businesses, including sole proprietorships, and 76.18 annual sales tax returns must be filed by February 5 following 76.19 the close of the calendar year. 76.20 (b)Except for the return for the June reporting period,76.21which is due on the following August 25,Returns filed by 76.22 retailers required to remit liabilities by means of funds 76.23 transfer under section 289A.20, subdivision 4, paragraph (d), 76.24 are due on or before the 25th day of the month following the 76.25 close of the preceding reporting period. 76.26 (c) If a retailer has an average sales and use tax 76.27 liability, including local sales and use taxes administered by 76.28 the commissioner, equal to or less than $500 per month in any 76.29 quarter of a calendar year, and has substantially complied with 76.30 the tax laws during the preceding four calendar quarters, the 76.31 retailer may request authorization to file and pay the taxes 76.32 quarterly in subsequent calendar quarters. The authorization 76.33 remains in effect during the period in which the retailer's 76.34 quarterly returns reflect sales and use tax liabilities of less 76.35 than $1,500 and there is continued compliance with state tax 76.36 laws. 77.1 (d) If a retailer has an average sales and use tax 77.2 liability, including local sales and use taxes administered by 77.3 the commissioner, equal to or less than $100 per month during a 77.4 calendar year, and has substantially complied with the tax laws 77.5 during that period, the retailer may request authorization to 77.6 file and pay the taxes annually in subsequent years. The 77.7 authorization remains in effect during the period in which the 77.8 retailer's annual returns reflect sales and use tax liabilities 77.9 of less than $1,200 and there is continued compliance with state 77.10 tax laws. 77.11 (e) The commissioner may also grant quarterly or annual 77.12 filing and payment authorizations to retailers if the 77.13 commissioner concludes that the retailers' future tax 77.14 liabilities will be less than the monthly totals identified in 77.15 paragraphs (c) and (d). An authorization granted under this 77.16 paragraph is subject to the same conditions as an authorization 77.17 granted under paragraphs (c) and (d). 77.18 Sec. 2. Minnesota Statutes 1994, section 289A.20, 77.19 subdivision 4, is amended to read: 77.20 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 77.21 chapter 297A are due and payable to the commissioner monthly on 77.22 or before the 20th day of the month following the month in which 77.23 the taxable event occurred or following another reporting period 77.24 as the commissioner prescribes, except that use taxes due on an 77.25 annual use tax return as provided under section 289A.11, 77.26 subdivision 1, are payable by April 15 following the close of 77.27 the calendar year. 77.28 (b)A vendor having a liability of $120,000 or more during77.29a fiscal year ending June 30 must remit the June liability for77.30the next year in the following manner:77.31(1) Two business days before June 30 of the year, the77.32vendor must remit 75 percent of the estimated June liability to77.33the commissioner.77.34(2) On or before August 14 of the year, the vendor must pay77.35any additional amount of tax not remitted in June.77.36(c)A vendor having a liability of $120,000 or more during 78.1 a fiscal year ending June 30 must remit all liabilities in the 78.2 subsequent calendar year by means of a funds transfer as defined 78.3 in section 336.4A-104, paragraph (a). The funds transfer 78.4 payment date, as defined in section 336.4A-401, must be on or 78.5 before the 14th day of the month following the month in which 78.6 the taxable event occurred, except for 75 percent of the78.7estimated June liability, which is due two business days before78.8June 30. The remaining amount of the June liability is due on78.9August 14.If the date the tax is due is not a funds transfer 78.10 business day, as defined in section 336.4A-105, paragraph (a), 78.11 clause (4), the payment date must be on or before the funds 78.12 transfer business day next following the date the tax is due. 78.13(d)(c) If the vendor required to remit by electronic funds 78.14 transfer as provided in paragraph(c)(b) is unable due to 78.15 reasonable cause to determine the actual sales and use tax due 78.16 on or before the due date for payment, the vendor may remit an 78.17 estimate of the tax owed using one of the following options: 78.18 (1) 100 percent of the tax reported on the previous month's 78.19 sales and use tax return; 78.20 (2) 100 percent of the tax reported on the sales and use 78.21 tax return for the same month in the previous calendar year; or 78.22 (3) 95 percent of the actual tax due. 78.23 Any additional amount of tax that is not remitted on or 78.24 before the due date for payment, must be remitted with the 78.25 return. If a vendor fails to remit the actual liability or does 78.26 not remit using one of the estimate options by the due date for 78.27 payment, the vendor must remit actual liability as provided in 78.28 paragraph (c) in all subsequent periods.This paragraph does78.29not apply to the June sales and use tax liability.78.30 Sec. 3. Minnesota Statutes 1995 Supplement, section 78.31 297A.01, subdivision 3, is amended to read: 78.32 Subd. 3. A "sale" and a "purchase" includes, but is not 78.33 limited to, each of the following transactions: 78.34 (a) Any transfer of title or possession, or both, of 78.35 tangible personal property, whether absolutely or conditionally, 78.36 and the leasing of or the granting of a license to use or 79.1 consume tangible personal property other than manufactured homes 79.2 used for residential purposes for a continuous period of 30 days 79.3 or more, for a consideration in money or by exchange or barter; 79.4 (b) The production, fabrication, printing,orprocessing, 79.5 or repair of tangible personal property for a consideration for 79.6 consumers who furnish either directly or indirectly the 79.7 materials used in the production, fabrication, printing,or79.8 processing, or repair; 79.9 (c) The furnishing, preparing, or serving for a 79.10 consideration of food, meals, or drinks. "Sale" does not 79.11 include: 79.12 (1) meals or drinks served to patients, inmates, or persons 79.13 residing at hospitals, sanitariums, nursing homes, senior 79.14 citizens homes, and correctional, detention, and detoxification 79.15 facilities; 79.16 (2) meals or drinks purchased for and served exclusively to 79.17 individuals who are 60 years of age or over and their spouses or 79.18 to the handicapped and their spouses by governmental agencies, 79.19 nonprofit organizations, agencies, or churches or pursuant to 79.20 any program funded in whole or part through 42 USCA sections 79.21 3001 through 3045, wherever delivered, prepared or served; or 79.22 (3) meals and lunches served at public and private schools, 79.23 universities, or colleges. 79.24 Notwithstanding section 297A.25, subdivision 2, taxable food or 79.25 meals include, but are not limited to, the following: 79.26 (i) heated food or drinks; 79.27 (ii) sandwiches prepared by the retailer; 79.28 (iii) single sales of prepackaged ice cream or ice milk 79.29 novelties prepared by the retailer; 79.30 (iv) hand-prepared or dispensed ice cream or ice milk 79.31 products including cones, sundaes, and snow cones; 79.32 (v) soft drinks and other beverages prepared or served by 79.33 the retailer; 79.34 (vi) gum; 79.35 (vii) ice; 79.36 (viii) all food sold in vending machines; 80.1 (ix) party trays prepared by the retailers; and 80.2 (x) all meals and single servings of packaged snack food, 80.3 single cans or bottles of pop, sold in restaurants and bars; 80.4 (d) The granting of the privilege of admission to places of 80.5 amusement, recreational areas, or athletic events, except a 80.6 world championship football game sponsored by the national 80.7 football league, and the privilege of having access to and the 80.8 use of amusement devices, tanning facilities, reducing salons, 80.9 steam baths, turkish baths, health clubs, and spas or athletic 80.10 facilities; 80.11 (e) The furnishing for a consideration of lodging and 80.12 related services by a hotel, rooming house, tourist court, motel 80.13 or trailer camp and of the granting of any similar license to 80.14 use real property other than the renting or leasing thereof for 80.15 a continuous period of 30 days or more; 80.16 (f) The furnishing for a consideration of electricity, gas, 80.17 water, or steam for use or consumption within this state, or 80.18 local exchange telephone service, intrastate toll service, and 80.19 interstate toll service, if that service originates from and is 80.20 charged to a telephone located in this state. Telephone service 80.21 includes paging services and private communication service, as 80.22 defined in United States Code, title 26, section 4252(d), except 80.23 for private communication service purchased by an agent acting 80.24 on behalf of the state lottery. The furnishing for a 80.25 consideration of access to telephone services by a hotel to its 80.26 guests is a sale under this clause. Sales by municipal 80.27 corporations in a proprietary capacity are included in the 80.28 provisions of this clause.The furnishing of water and sewer80.29services for residential use shall not be considered a sale.80.30 The sale of natural gas to be used as a fuel in vehicles 80.31 propelled by natural gas shall not be considered a sale for the 80.32 purposes of this section; 80.33 (g) The furnishing for a consideration of cable television 80.34 services, including charges for basic service, charges for 80.35 premium service, and any other charges for any other 80.36 pay-per-view, monthly, or similar television services; 81.1 (h) The furnishing for a consideration of parking services, 81.2 whether on a contractual, hourly, or other periodic basis, 81.3 except for parking at a meter; 81.4 (i) The furnishing for a consideration of services listed 81.5 in this paragraph: 81.6 (i) laundry and dry cleaning services including cleaning, 81.7 pressing, repairing, altering, and storing clothes, linen 81.8 services and supply, cleaning and blocking hats, and carpet, 81.9 drapery, upholstery, and industrial cleaning. Laundry and dry 81.10 cleaning services do not include services provided by coin 81.11 operated facilities operated by the customer; 81.12 (ii) motor vehicle repair, maintenance, diagnostic, 81.13 washing, waxing, and cleaning services, including services 81.14 provided by coin-operated facilities operated by the customer, 81.15 and rustproofing, undercoating, and towing of motor vehicles; 81.16 (iii) building and residential cleaning, maintenance, and 81.17 disinfecting and exterminating services; 81.18 (iv) detective services, security services, burglar, fire 81.19 alarm, and armored car services not including services performed 81.20 within the jurisdiction they serve by off-duty licensed peace 81.21 officers as defined in section 626.84, subdivision 1; 81.22 (v) pet grooming services; 81.23 (vi) lawn care, fertilizing, mowing, spraying and sprigging 81.24 services; garden planting and maintenance; tree, bush, and shrub 81.25 pruning, bracing, spraying, and surgery; tree, bush, shrub and 81.26 stump removal; and tree trimming for public utility lines. 81.27 Services performed under a construction contract for the 81.28 installation of shrubbery, plants, sod, trees, bushes, and 81.29 similar items are not taxable; 81.30 (vii) mixed municipal solid waste management services as 81.31 described in section 297A.45; 81.32 (viii) massages, except when provided by a licensed health 81.33 care facility or professional or upon written referral from a 81.34 licensed health care facility or professional for treatment of 81.35 illness, injury, or disease;and81.36 (ix) the furnishing for consideration of lodging, board and 82.1 care services for animals in kennels and other similar 82.2 arrangements, but excluding veterinary and horse boarding 82.3 services; and 82.4 (x) the furnishing for consideration of professional 82.5 services. 82.6 The services listed in this paragraph are taxable under section 82.7 297A.02 if the service is performed wholly within Minnesota or 82.8 if the service is performed partly within and partly without 82.9 Minnesota and the greater proportion of the service is performed 82.10 in Minnesota, based on the cost of performance. In applying the 82.11 provisions of this chapter, the terms "tangible personal 82.12 property" and "sales at retail" include taxable services and the 82.13 provision of taxable services, unless specifically provided 82.14 otherwise. Services performed by an employee for an employer 82.15 are not taxable under this paragraph. Services performed by a 82.16 partnership or association for another partnership or 82.17 association are not taxable under this paragraph if one of the 82.18 entities owns or controls more than 80 percent of the voting 82.19 power of the equity interest in the other entity. Services 82.20 performed between members of an affiliated group of corporations 82.21 are not taxable. For purposes of this section, "affiliated 82.22 group of corporations" includes those entities that would be 82.23 classified as a member of an affiliated group under United 82.24 States Code, title 26, section 1504, and who are eligible to 82.25 file a consolidated tax return for federal income tax purposes; 82.26 (j) A "sale" and a "purchase" includes the transfer of 82.27 computer software, meaning information and directions that 82.28 dictate the function performed by data processing equipment. A 82.29 "sale" and a "purchase" does not include the design, 82.30 development, writing, translation, fabrication, lease, or 82.31 transfer for a consideration of title or possession of a custom 82.32 computer program; and 82.33 (k) The granting of membership in a club, association, or 82.34 other organization if: 82.35 (1) the club, association, or other organization makes 82.36 available for the use of its members sports and athletic 83.1 facilities (without regard to whether a separate charge is 83.2 assessed for use of the facilities); and 83.3 (2) use of the sports and athletic facilities is not made 83.4 available to the general public on the same basis as it is made 83.5 available to members. 83.6 Granting of membership includes both one-time initiation fees 83.7 and periodic membership dues. Sports and athletic facilities 83.8 include golf courses, tennis, racquetball, handball and squash 83.9 courts, basketball and volleyball facilities, running tracks, 83.10 exercise equipment, swimming pools, and other similar athletic 83.11 or sports facilities. The provisions of this paragraph do not 83.12 apply to camps or other recreation facilities owned and operated 83.13 by an exempt organization under section 501(c)(3) of the 83.14 Internal Revenue Code of 1986, as amended through December 31, 83.15 1992, for educational and social activities for young people 83.16 primarily age 18 and under. 83.17 Sec. 4. Minnesota Statutes 1994, section 297A.01, 83.18 subdivision 16, is amended to read: 83.19 Subd. 16. [CAPITAL EQUIPMENT.] (a) Capital equipment means 83.20 machinery and equipment purchased or leased for use in this 83.21 state and used by the purchaser or lessee primarily for 83.22 manufacturing, fabricating, mining, or refining tangible 83.23 personal property to be sold ultimately at retail and for 83.24 electronically transmitting results retrieved by a customer of 83.25 an on-line computerized data retrieval system. 83.26 (b) Capital equipment includes all machinery and equipment 83.27 that is essential to the integrated production process. Capital 83.28 equipment includes, but is not limited to: 83.29 (1) machinery and equipment used or required to operate, 83.30 control, or regulate the production equipment; 83.31 (2) machinery and equipment used for research and 83.32 development, design, quality control, and testing activities; 83.33 (3) environmental control devices that are used to maintain 83.34 conditions such as temperature, humidity, light, or air pressure 83.35 when those conditions are essential to and are part of the 83.36 production process;or84.1 (4) materials and supplies necessary to construct and 84.2 install machinery or equipment; or 84.3 (5) pollution control equipment. 84.4 (c) Capital equipment does not include the following: 84.5 (1)repair or replacement parts, including accessories,84.6whether purchased as spare parts, repair parts, or as upgrades84.7or modifications, and whether purchased before or after the84.8machinery or equipment is placed into service. Parts or84.9accessories are treated as capital equipment only to the extent84.10that they are a part of and are essential to the operation of84.11the machinery or equipment as initially purchased;84.12(2)motor vehicles taxed under chapter 297B; 84.13(3)(2) machinery or equipment used to receive or store raw 84.14 materials; 84.15(4)(3) building materials; 84.16(5)(4) machinery or equipment used for nonproduction 84.17 purposes, including, but not limited to, the following: 84.18 machinery and equipment used for plant security, fire 84.19 prevention, first aid, and hospital stations; machinery and 84.20 equipment used in support operations or for administrative 84.21 purposes; machinery and equipment used solely for pollution 84.22 control, prevention, or abatement; and machinery and equipment 84.23 used in plant cleaning, disposal of scrap and waste, plant 84.24 communications, space heating, lighting, or safety; 84.25(6) "farm machinery" as defined by subdivision 15,84.26"aquaculture production equipment" as defined by subdivision 19,84.27and "replacement capital equipment" as defined by subdivision84.2820; or84.29(7)(5) any other item that is not essential to the 84.30 integrated process of manufacturing, fabricating, mining, or 84.31 refining. 84.32 (d) For purposes of this subdivision: 84.33 (1) "Equipment" means independent devices or tools separate 84.34 from machinery but essential to an integrated production 84.35 process, including computers and software, used in operating 84.36 machinery and equipment; and any subunit or assembly comprising 85.1 a component of any machinery or accessory or attachment parts of 85.2 machinery, such as tools, dies, jigs, patterns, and molds. 85.3 (2) "Fabricating" means to make, build, create, produce, or 85.4 assemble components or property to work in a new or different 85.5 manner. 85.6 (3) "Machinery" means mechanical, electronic, or electrical 85.7 devices, including computers and software, that are purchased or 85.8 constructed to be used for the activities set forth in paragraph 85.9 (a), beginning with the removal of raw materials from inventory 85.10 through the completion of the product, including packaging of 85.11 the product. 85.12 (4) "Manufacturing" means an operation or series of 85.13 operations where raw materials are changed in form, composition, 85.14 or condition by machinery and equipment and which results in the 85.15 production of a new article of tangible personal property. For 85.16 purposes of this subdivision, "manufacturing" includes the 85.17 generation of electricity or steam to be sold at retail. 85.18 (5) "Mining" means the extraction of minerals, ores, stone, 85.19 and peat. 85.20 (6) "On-line data retrieval system" means a system whose 85.21 cumulation of information is equally available and accessible to 85.22 all its customers. 85.23 (7) "Pollution control equipment" means machinery and 85.24 equipment used to eliminate, prevent, or reduce pollution 85.25 resulting from an activity described in paragraph (a). 85.26 (8) "Primarily" means machinery and equipment used 50 85.27 percent or more of the time in an activity described in 85.28 paragraph (a). 85.29 (9) "Refining" means the process of converting a natural 85.30 resource to a product, including the treatment of water to be 85.31 sold at retail. 85.32 (e) For purposes of this subdivision the requirement that 85.33 the machinery or equipment "must be used by the purchaser or 85.34 lessee" means that the person who purchases or leases the 85.35 machinery or equipment must be the one who uses it for the 85.36 qualifying purpose. When a contractor buys and installs 86.1 machinery or equipment as part of an improvement to real 86.2 property, only the contractor is considered the purchaser. 86.3(f) Notwithstanding prior provisions of this subdivision,86.4machinery and equipment purchased or leased to replace machinery86.5and equipment used in the mining or production of taconite shall86.6qualify as capital equipment.86.7 Sec. 5. Minnesota Statutes 1994, section 297A.01, is 86.8 amended by adding a subdivision to read: 86.9 Subd. 22. [PROFESSIONAL SERVICES.] "Professional services" 86.10 means accounting, architectural, engineering, financial 86.11 planning, legal, and tax preparation services, if the services 86.12 are provided to a natural individual who is a resident of 86.13 Minnesota. Professional services do not include services 86.14 provided to a person engaged in the conduct of a trade or 86.15 business within the meaning of section 162(a) of the Internal 86.16 Revenue Code, if the services are for use exclusively in the 86.17 trade or business. If professional services are provided in 86.18 combination with other services, except services incidental to 86.19 the professional services, the sale price of the taxable 86.20 services must be determined based on the cost of performance. 86.21 If other services are provided that are incidental to 86.22 professional services, all of the services are fully taxable. 86.23 Sec. 6. Minnesota Statutes 1994, section 297A.02, 86.24 subdivision 1, is amended to read: 86.25 Subdivision 1. [GENERALLY.] Except as otherwise provided 86.26 in this chapter, there is imposed an excise tax of6.56 percent 86.27 of the gross receipts from sales at retail made by any person in 86.28 this state. 86.29 Sec. 7. Minnesota Statutes 1994, section 297A.09, is 86.30 amended to read: 86.31 297A.09 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 86.32 For the purpose of the proper administration of sections 86.33 297A.01 to 297A.44 and to prevent evasion of the tax, it shall 86.34 be presumed that all gross receipts are subject to the tax until 86.35 the contrary is established. The burden of proving that a sale 86.36 is not a sale at retail is upon the person who makes the sale, 87.1 but that person may take from the purchaser an exemption 87.2 certificate to the effect that the property purchased is for 87.3 resale or that the sale is otherwise exempt from the application 87.4 of the tax imposed by sections 297A.01 to 297A.44. 87.5 The sale of accounting, architectural, engineering, 87.6 financial planning, legal, and tax preparation services are 87.7 presumed to be taxable professional services, unless the 87.8 purchaser provides an exemption certificate to the vendor. The 87.9 commissioner shall prescribe the form of and provide, upon 87.10 application, exemption certifications for purchases of 87.11 non-taxable professional services to persons engaged in the 87.12 conduct of a trade or business, government agencies, or 87.13 organizations exempt under section 297A.25, subdivision 16. 87.14 Sec. 8. Minnesota Statutes 1994, section 297A.15, 87.15 subdivision 5, is amended to read: 87.16 Subd. 5. [REFUND; APPROPRIATION.] Notwithstanding the 87.17 provisions ofsections 297A.02, subdivision 5, andsection 87.18 297A.25,subdivisions 42 andsubdivision 50, the tax on sales of 87.19capital equipment, replacement capital equipment, and87.20 construction materials and supplies under section 297A.25, 87.21 subdivision 50, shall be imposed and collected as if therates87.22 rate under sections 297A.02, subdivision 1, and 297A.021,87.23 applied. Upon application by the purchaser, on forms prescribed 87.24 by the commissioner, a refund equal to the reduction in the tax 87.25 due as a result of the application of the exemption under 87.26 section 297A.25, subdivision42 or50, and the rates under87.27sections 297A.02, subdivision 5 , and 297A.021shall be paid to 87.28 the purchaser.In the case of building materials qualifying87.29under section 297A.25, subdivision 50,Where the tax was paid by 87.30 a contractor, application must be made by the owner for the 87.31 sales tax paid by all the contractors, subcontractors, and 87.32 builders for the project. The application must include 87.33 sufficient information to permit the commissioner to verify the 87.34 sales tax paid for the project. The application shall include 87.35 information necessary for the commissioner initially to verify 87.36 that the purchases qualified ascapital equipment under section88.1297A.25, subdivision 42, replacement capital equipment under88.2section 297A.01, subdivision 20, or capital equipment or88.3 construction materials and supplies under section 297A.25, 88.4 subdivision 50. No more than two applications for refunds may 88.5 be filed under this subdivision in a calendar year.No owner88.6may apply for a refund based on the exemption under section88.7297A.25, subdivision 50, before July 1, 1993.Unless otherwise 88.8 specifically provided by this subdivision, the provisions of 88.9 section 289A.40 apply to the refunds payable under this 88.10 subdivision. There is annually appropriated to the commissioner 88.11 of revenue the amount required to make the refunds. 88.12 The amount to be refunded shall bear interest at the rate 88.13 in section 270.76 from the date the refund claim is filed with 88.14 the commissioner. 88.15 Sec. 9. Minnesota Statutes 1994, section 297A.25, 88.16 subdivision 29, is amended to read: 88.17 Subd. 29. [FARM MACHINERY REPAIR PARTS.] The gross 88.18 receipts from the sale of farm machinery and repair and 88.19 replacement parts, except tires, used for maintenance or repair 88.20 of farm machinery are exempt, if the part replaces a farm 88.21 machinery part assigned a specific or generic part number by the 88.22 manufacturer of the farm machinery. 88.23 Sec. 10. [REPEALER.] 88.24 (a) Minnesota Statutes 1994, section 289A.60, subdivision 88.25 15, is repealed. 88.26 (b) Minnesota Statutes 1994, section 297A.25, subdivisions 88.27 8, 10, and 23, are repealed. 88.28 (c) Minnesota Statutes 1994, sections 297A.01, subdivisions 88.29 17 and 20; 297A.02, subdivisions 2 and 5; and 297A.25, 88.30 subdivision 53, are repealed. 88.31 Sec. 11. [EFFECTIVE DATE.] 88.32 Sections 1, 2, and 10, paragraph (a) are effective for 88.33 sales after June 30, 1998, but only if the constitutional 88.34 amendment proposed to the people by article 1, section 1 is 88.35 adopted at the 1996 general election. 88.36 Sections 3, 5, 6, 7, and 10, paragraph (b) are effective 89.1 for sales after June 30, 1997, but only if the constitutional 89.2 amendment proposed to the people by article 1, section 1 is 89.3 adopted at the 1996 general election. 89.4 Sections 4, 8, 9, and 10, paragraph (c) are effective for 89.5 sales after June 30, 1999, but only if the constitutional 89.6 amendment proposed to the people by article 1, section 1 is 89.7 adopted at the 1996 general election. 89.8 ARTICLE 7 89.9 TOBACCO TAXES 89.10 Section 1. Minnesota Statutes 1994, section 297.02, 89.11 subdivision 1, is amended to read: 89.12 Subdivision 1. [RATES.] A tax is hereby imposed upon the 89.13 sale of cigarettes in this state or having cigarettes in 89.14 possession in this state with intent to sell and upon any person 89.15 engaged in business as a distributor thereof, at the following 89.16 rates, subject to the discount provided in section 297.03: 89.17 (1) Before July 1, 1997, the following rates apply 89.18 (A) On cigarettes weighing not more than three pounds per 89.19 thousand, 24 mills on eachsuchcigarette; 89.20(2)(B) On cigarettes weighing more than three pounds per 89.21 thousand, 48 mills on eachsuchcigarette. 89.22 (2) After June 30, 1997 and before July 1, 1998, the 89.23 following rates apply 89.24 (A) On cigarettes weighing not more than three pounds per 89.25 thousand, 29 mills on each cigarette; 89.26 (B) On cigarettes weighing more than three pounds per 89.27 thousand, 58 mills on each cigarette. 89.28 (3) After June 30, 1998, the following rates apply 89.29 (A) On cigarettes weighing not more than three pounds per 89.30 thousand, 35 mills on each cigarette; 89.31 (B) On cigarettes weighing more than three pounds per 89.32 thousand, 70 mills on each cigarette. 89.33 Sec. 2. [297.025] [INDEXING.] 89.34 Beginning July 1, 1999, on July 1 of each year the 89.35 commissioner shall increase each tax rate in section 297.02 by a 89.36 percentage equal to the annual percentage change in the most 90.1 recent consumer price index for urban consumers of tobacco and 90.2 smoking products, as prepared by the United States bureau of 90.3 labor statistics. 90.4 Sec. 3. [297.026] [FLOOR STOCKS TAX.] 90.5 Subdivision 1. [IMPOSITION OF TAX.] (a) A floor stocks tax 90.6 is imposed on every person engaged in business in this state as 90.7 a distributor, retailer, subjobber, vendor, manufacturer, or 90.8 manufacturer's representative of cigarettes, on the stamped 90.9 cigarettes in the person's possession or under the person's 90.10 control at 12:01 a.m. on the effective date of a qualifying tax 90.11 increase. The tax equals the amount determined by multiplying 90.12 the increased tax rate under the qualifying tax increase by the 90.13 number of cigarettes in the person's possession. The tax is 90.14 subject to the discounts in section 297.03. 90.15 (b) Each distributor shall, within five business days after 90.16 the effective date of the tax increase, file a report with the 90.17 commissioner, showing the cigarettes on hand on 12:01 a.m. of 90.18 the effective date of the qualifying tax increase and the amount 90.19 of floor stocks tax due on the cigarettes. The report must be 90.20 in the form prescribed by the commissioner. The tax imposed by 90.21 this section is due within 30 days after the effective date of 90.22 the qualifying tax increase, and bears interest at a rate of one 90.23 percent a month. 90.24 (c) Each retailer, subjobber, vendor, manufacturer, or 90.25 manufacturer's representative shall file a return with the 90.26 commissioner, showing the number of cigarettes on hand on 12:01 90.27 a.m. of the effective date of the qualifying tax increase and 90.28 the amount of floor stocks tax due on the cigarettes. The 90.29 return must be in the form prescribed by the commissioner. The 90.30 return must be filed and the tax paid within 30 days after the 90.31 effective date of the tax increase. Tax not paid by the due 90.32 date bears interest at the rate of one percent per month. 90.33 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 90.34 the following terms have the meanings given. 90.35 (b) "Effective date" means the day on which a qualifying 90.36 tax increase takes effect. 91.1 (c) "Qualifying tax increase" means an increase in the tax 91.2 rate, whether specifically enacted or under the indexing 91.3 provisions under section 2, if the increase equals or exceeds 91.4 one mill on cigarettes weighing not more than three pounds per 91.5 thousand and two mills on cigarettes weighing more than three 91.6 pounds per thousand. 91.7 Sec. 4. Minnesota Statutes 1994, section 297.03, 91.8 subdivision 5, is amended to read: 91.9 Subd. 5. [SALE OF STAMPS.] The commissioner shall sell 91.10 stamps to any person licensed as a distributor at a discount of 91.111.00.55 percent from the face amount of the stamps for the 91.12 first $1,500,000 of such stamps purchased in any fiscal year; 91.13 and at a discount of.600.35 percent on the remainder of such 91.14 stamps purchased in any fiscal year. The commissioner shall not 91.15 sell stamps to any other person. The commissioner may prescribe 91.16 the method of shipment of the stamps to the distributor as well 91.17 as the quantities of stamps purchased. 91.18 Sec. 5. Minnesota Statutes 1994, section 297.07, 91.19 subdivision 1, is amended to read: 91.20 Subdivision 1. [MONTHLY RETURN FILED WITH COMMISSIONER.] 91.21 On or before the 18th day of each calendar month every 91.22 distributor with a place of business in this state shall file a 91.23 return with the commissioner showing the quantity of cigarettes 91.24 manufactured or brought in from without the state or purchased 91.25 during the preceding calendar month and the quantity of 91.26 cigarettes sold or otherwise disposed of in this state and 91.27 outside this state during that month. Every licensed 91.28 distributor outside this state shall in like manner file a 91.29 return showing the quantity of cigarettes shipped or transported 91.30 into this state during the preceding calendar month. Returns 91.31 shall be made upon forms furnished and prescribed by the 91.32 commissioner and shall contain such other information as the 91.33 commissioner may require. The return shall be accompanied by a 91.34 remittance for the full unpaid tax liability shown by it.The91.35return for the May liability and 75 percent of the estimated91.36June liability is due on the date payment of the tax is due.92.1 Sec. 6. Minnesota Statutes 1994, section 297.32, 92.2 subdivision 1, is amended to read: 92.3 Subdivision 1. A tax is hereby imposed upon all tobacco 92.4 products in this state and upon any person engaged in business 92.5 as a distributor thereof, at the rate of3550 percent of the 92.6 wholesale sales price of such tobacco products. Such tax shall 92.7 be imposed at the time the distributor (1) brings, or causes to 92.8 be brought, into this state from without the state tobacco 92.9 products for sale; (2) makes, manufactures, or fabricates 92.10 tobacco products in this state for sale in this state; or (3) 92.11 ships or transports tobacco products to retailers in this state, 92.12 to be sold by those retailers. 92.13 Sec. 7. Minnesota Statutes 1995 Supplement, section 92.14 297.35, subdivision 1, is amended to read: 92.15 Subdivision 1. On or before the 18th day of each calendar 92.16 month every distributor with a place of business in this state 92.17 shall file a return with the commissioner showing the quantity 92.18 and wholesale sales price of each tobacco product (1) brought, 92.19 or caused to be brought, into this state for sale; and (2) made, 92.20 manufactured, or fabricated in this state for sale in this 92.21 state, during the preceding calendar month. Every licensed 92.22 distributor outside this state shall in like manner file a 92.23 return showing the quantity and wholesale sales price of each 92.24 tobacco product shipped or transported to retailers in this 92.25 state to be sold by those retailers, during the preceding 92.26 calendar month. Returns shall be made upon forms furnished and 92.27 prescribed by the commissioner and shall contain such other 92.28 information as the commissioner may require. Each return shall 92.29 be accompanied by a remittance for the full tax liability shown 92.30 therein, less 1.5 percent of such liability as compensation to 92.31 reimburse the distributor for expenses incurred in the 92.32 administration of sections 297.31 to 297.39.The return for the92.33May liability and 75 percent of the estimated June liability is92.34due on the date payment of the tax is due.92.35 A distributor having a liability of $120,000 or more during 92.36 a fiscal year ending June 30 must remit all liabilities in the 93.1 subsequent calendar year by means of a funds transfer as defined 93.2 in section 336.4A-104, paragraph (a). The funds transfer 93.3 payment date, as defined in section 336.4A-401, must be on or 93.4 before the date the tax is due. If the date the tax is due is 93.5 not a funds transfer business day, as defined in section 93.6 336.4A-105, paragraph (a), clause (4), the payment date must be 93.7 on or before the funds transfer business day next following the 93.8 date the tax is due. 93.9 Sec. 8. [REPEALER.] 93.10 Minnesota Statutes 1994, sections 297.07, subdivision 4; 93.11 and 297.35, subdivision 5, are repealed. 93.12 Sec. 9. [EFFECTIVE DATE.] 93.13 Sections 1 to 8 are effective July 1, 1997, but only if the 93.14 constitutional amendment proposed to the people by article 1, 93.15 section 1 is adopted at the 1996 general election.