Minnesota Legislature
HF 3270
1st Unofficial Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to the financing and operation of state and 1.3 local government; changing appropriations to reflect 1.4 forecast changes; reducing appropriations for the 1.5 fiscal years ending June 30, 2002 and 2003; canceling 1.6 balances and appropriations and transferring balances 1.7 to the general fund in order to avert a deficit; 1.8 authorizing the sale of state bonds; modifying 1.9 education levies and aids; modifying provisions 1.10 relating to income, franchise, sales, property, 1.11 cigarette and tobacco products, taconite, and other 1.12 taxes, and tax administration; imposing cigarette and 1.13 tobacco products floor stock taxes; modifying property 1.14 tax and other state aids and credits; modifying tax 1.15 court jurisdiction; changing provisions relating to 1.16 Hennepin county and Ramsey county environmental 1.17 response funds; authorizing cities and counties to 1.18 impose taxes, issue debt, and exercise other powers; 1.19 providing local development incentives; modifying tax 1.20 increment financing and public finance provisions; 1.21 transferring duties of the state treasurer; requiring 1.22 payment of prevailing wages; modifying housing with 1.23 services establishment provisions; modifying provider 1.24 surcharges; modifying medical assistance and 1.25 MinnesotaCare provisions; modifying certain payments 1.26 to counties; modifying provisions relating to 1.27 emissions reduction projects by public utilities; 1.28 providing for a crime victim ombudsman; providing for 1.29 legislative approval of certain collective bargaining 1.30 agreements, arbitration awards, and state compensation 1.31 provisions; providing an early retirement incentive; 1.32 authorizing extra unemployment benefits; changing 1.33 certain employer fees and assessments; providing for 1.34 eminent domain proceedings; changing water quality 1.35 permit fees; authorizing school district fund 1.36 transfers; modifying the length of the school year; 1.37 providing exceptions from hiring freeze; repealing 1.38 contract moratorium; changing provisions relating to 1.39 data privacy; changing lawful purpose for purposes of 1.40 lawful gambling; imposing a fee on telecommunications 1.41 services; changing or requiring certain reports, 1.42 studies, and recommendations; appropriating money; 1.43 amending Minnesota Statutes 2000, sections 3.855, 1.44 subdivision 2; 7.26; 13.871, subdivision 5, as 1.45 amended; 16A.27, subdivision 5; 16A.28, subdivision 6; 1.46 16A.626; 35.08; 49.24, subdivisions 13, 16; 60D.20, 2.1 subdivision 2; 62J.692, subdivision 4, as amended; 2.2 84A.11; 84A.23, subdivision 4; 84A.33, subdivision 4; 2.3 84A.40; 85A.05, subdivision 2; 94.53; 115A.557, 2.4 subdivision 1; 115A.58, subdivision 2; 116.16, 2.5 subdivision 4; 116.17, subdivision 2; 117.075; 2.6 118A.05, subdivision 5; 120A.41; 124D.69, by adding a 2.7 subdivision; 125A.65, subdivisions 1, 3, 8, 9; 2.8 125B.25, subdivision 9; 126C.44; 126C.72, subdivision 2.9 2; 127A.40; 127A.45, subdivisions 2, 3, 10, 13, 14, 2.10 16, by adding a subdivision; 135A.15, subdivision 1, 2.11 as amended; 136A.08, subdivision 3; 144D.01, 2.12 subdivision 4; 161.05, subdivision 3; 161.07; 167.50, 2.13 subdivision 2; 174.51, subdivision 2; 176.181, 2.14 subdivision 2; 176.581; 190.11; 241.08, subdivision 1; 2.15 241.10; 241.13, subdivision 1; 244.19, subdivision 7; 2.16 246.15, subdivision 1; 246.18, subdivision 1; 246.21; 2.17 256.9657, subdivision 1, as amended; 256B.19, 2.18 subdivision 1, as amended; 256B.69, subdivision 5a, as 2.19 amended; 256E.06, subdivision 3; 256I.04, subdivision 2.20 2a; 256L.12, subdivision 9, as amended; 268.035, 2.21 subdivision 24; 268.051, subdivision 8; 270.063, 2.22 subdivision 4; 270.60, subdivision 4; 270B.01, 2.23 subdivision 8; 270B.02, subdivision 4; 270B.14, 2.24 subdivision 8; 272.02, subdivisions 15, 42, by adding 2.25 subdivisions; 272.0212, subdivisions 1, 4, by adding a 2.26 subdivision; 273.11, subdivision 16, by adding a 2.27 subdivision; 273.125, subdivision 4; 273.1398, 2.28 subdivision 3; 275.08, subdivision 1d; 278.01, 2.29 subdivision 1; 279.01, subdivision 3; 280.29; 287.01, 2.30 subdivision 3; 289A.19, subdivision 1; 290.06, by 2.31 adding a subdivision; 290.067, subdivisions 1, 2a; 2.32 290.081; 290.0922, subdivision 1; 290.17, subdivisions 2.33 2, 3; 290.191, subdivision 4; 290A.03, subdivision 3; 2.34 293.06; 295.53, subdivision 1; 295.57, by adding a 2.35 subdivision; 296A.18, subdivision 8; 297A.66, by 2.36 adding a subdivision; 297A.67, subdivision 5, by 2.37 adding subdivisions; 297A.68, by adding a subdivision; 2.38 297A.71, by adding subdivisions; 297F.05, subdivisions 2.39 1, 3, 4; 297F.08, subdivision 7; 297F.09, subdivision 2.40 2; 297G.07, subdivision 1; 297H.06, subdivision 2; 2.41 297I.05, subdivision 11; 298.27; 298.28, subdivisions 2.42 5, 9b, 11; 352.05; 352B.03, subdivision 2; 354.06, 2.43 subdivision 3; 354.52, subdivision 5; 373.01, 2.44 subdivision 3; 383A.81, by adding subdivisions; 2.45 383B.81, by adding subdivisions; 385.05; 410.32; 2.46 412.301; 465.73; 469.012, subdivision 1; 469.034, 2.47 subdivision 2; 469.102, subdivision 2; 469.153, by 2.48 adding a subdivision; 469.155, subdivisions 3, 4, 8; 2.49 469.157; 473.251; 473.252, subdivision 3; 473.39, by 2.50 adding a subdivision; 475.67, subdivision 13; 475A.04; 2.51 475A.06, subdivision 2; 477A.011, subdivision 20; 2.52 481.01; 490.123, subdivision 2; 525.161; 525.841; 2.53 611A.371, subdivision 1, as amended; 611A.373, 2.54 subdivisions 1, as amended, 2, as amended; 611A.72, as 2.55 amended; 611A.73, subdivision 2, as amended; 611A.74, 2.56 subdivisions 2, as amended, 3, as amended, 4, as 2.57 amended, 5, as amended, 6, as amended; 641.23; 2.58 Minnesota Statutes 2001 Supplement, sections 35.09, 2.59 subdivision 3; 69.021, subdivision 5; 122A.21; 2.60 123B.54, as amended; 124D.11, subdivision 9; 124D.86, 2.61 subdivision 3; 126C.17, subdivisions 7, 7a; 126C.21, 2.62 subdivision 4; 126C.40, subdivision 1; 126C.43, 2.63 subdivision 3; 126C.48, subdivision 8; 127A.45, 2.64 subdivision 14a; 216B.1692, subdivisions 2, 3, 6; 2.65 241.021, subdivision 4; 256.01, subdivision 2, as 2.66 amended; 256.022, subdivision 1, as amended; 256B.057, 2.67 subdivision 9; 256B.0625, subdivision 13, as amended; 2.68 268.022, subdivision 1; 270.69, subdivision 2; 2.69 270.691, subdivision 8; 270B.02, subdivision 3; 2.70 270B.08, subdivision 2; 271.01, subdivision 5; 271.21, 2.71 subdivision 2; 272.02, subdivision 22; 272.028; 3.1 273.121; 273.124, subdivision 11; 273.13, subdivisions 3.2 22, 24; 273.1384, subdivision 2; 273.1392; 273.1398, 3.3 subdivision 4c; 275.025, subdivision 2; 275.065, 3.4 subdivision 3; 275.70, subdivision 5; 275.71, 3.5 subdivisions 2, 3, 4; 275.74, subdivision 2; 276.11, 3.6 subdivision 1; 289A.02, subdivision 7; 289A.20, 3.7 subdivisions 2, 4; 289A.60, subdivision 2; 290.01, 3.8 subdivisions 19, 19b, 31; 290.0675, subdivisions 1, 3; 3.9 290.091, subdivision 2; 290.0921, subdivisions 2, 6; 3.10 290.21, subdivision 4; 290A.03, subdivision 15; 3.11 290A.04, subdivision 2h; 295.60, subdivisions 2, 7, by 3.12 adding subdivisions; 297A.61, subdivisions 3, 26; 3.13 297A.66, subdivision 1; 297A.67, subdivisions 2, 25, 3.14 29; 297A.68, subdivision 3; 297A.70, subdivision 3; 3.15 297A.71, subdivision 23; 297A.995, subdivision 4; 3.16 298.01, subdivisions 3b, 4c; 298.225, subdivision 1; 3.17 298.28, subdivisions 4, 6, 9a, 10; 298.296, 3.18 subdivision 2; 299D.03, subdivision 5; 349.12, 3.19 subdivision 25; 469.1734, subdivision 6; 469.1763, 3.20 subdivision 6; 469.1792, subdivisions 1, 2; 469.1813, 3.21 subdivision 6; 475.58, subdivision 1; 477A.011, 3.22 subdivision 36; 477A.013, subdivision 9; 477A.03, 3.23 subdivision 2; 477A.07, subdivisions 1, 3; 611A.372, 3.24 as amended; 611A.74, subdivision 1, as amended; Laws 3.25 1971, chapter 773, section 1, subdivision 2, as 3.26 amended; Laws 1989, chapter 211, section 8, as 3.27 amended; Laws 1990, chapter 604, article 6, section 9, 3.28 subdivision 1, as amended; Laws 1993, chapter 375, 3.29 article 5, section 42; Laws 1995, chapter 264, article 3.30 5, section 45, subdivision 1, as amended; Laws 1996, 3.31 chapter 471, article 2, section 29; Laws 1998, chapter 3.32 389, article 8, section 37, subdivision 2; Laws 2001, 3.33 First Special Session chapter 3, article 1, section 3.34 17, subdivisions 2, 3, as amended, 4, 7, as amended, 3.35 9, as amended; Laws 2001, First Special Session 3.36 chapter 3, article 1, section 19, subdivisions 3, as 3.37 amended, 5, as amended; Laws 2001, First Special 3.38 Session chapter 3, article 2, section 15, subdivisions 3.39 3, as amended, 4, 6; Laws 2001, First Special Session 3.40 chapter 3, article 3, section 9, subdivisions 5, 7; 3.41 Laws 2001, First Special Session chapter 3, article 4, 3.42 section 5, subdivisions 2, as amended, 3, 4, as 3.43 amended; Laws 2001, First Special Session chapter 4, 3.44 article 2, section 31; Laws 2001, First Special 3.45 Session chapter 5, article 2, section 29, subdivision 3.46 2, as amended; Laws 2001, First Special Session 3.47 chapter 5, article 3, section 96; Laws 2001, First 3.48 Special Session chapter 5, article 9, section 3, the 3.49 effective date; Laws 2001, First Special Session 3.50 chapter 5, article 12, section 11, the effective date; 3.51 Laws 2001, First Special Session chapter 5, article 3.52 12, section 82, the effective date; Laws 2001, First 3.53 Special Session chapter 5, article 12, section 95; 3.54 Laws 2001, First Special Session chapter 6, article 1, 3.55 section 54, subdivisions 2, as amended, 4, as amended, 3.56 5, as amended, 6, as amended, 7, as amended; Laws 3.57 2001, First Special Session chapter 6, article 2, 3.58 section 77, subdivisions 4, as amended, 5, as amended, 3.59 6, 8, as amended, 11, as amended, 15, as amended, 18, 3.60 as amended; Laws 2001, First Special Session chapter 3.61 6, article 3, section 21, subdivisions 2, as amended, 3.62 3, as amended, 4, as amended, 5, as amended, 7, as 3.63 amended; Laws 2001, First Special Session chapter 6, 3.64 article 4, section 27, subdivisions 2, as amended, 3, 3.65 as amended, 5, as amended; Laws 2001, First Special 3.66 Session chapter 6, article 5, section 13, subdivisions 3.67 3, 5, as amended; Laws 2001, First Special Session 3.68 chapter 6, article 7, section 14, as amended; Laws 3.69 2001, First Special Session chapter 8, article 11, 3.70 section 14, as amended; Laws 2001, First Special 3.71 Session chapter 8, article 11, section 17; Laws 2001, 4.1 First Special Session chapter 9, article 2, section 4.2 74; Laws 2001, First Special Session chapter 9, 4.3 article 19, section 15; Laws 2001, First Special 4.4 Session chapter 9, article 19, section 16; Laws 2001, 4.5 First Special Session chapter 9, article 19, section 4.6 17; Laws 2002, chapter 220, article 2, section 14; 4.7 Laws 2002, chapter 220, article 5, section 1; Laws 4.8 2002, chapter 220, article 5, section 2, subdivisions 4.9 1, 2; Laws 2002, chapter 220, article 6, section 1; 4.10 Laws 2002, chapter 220, article 6, section 3, 4.11 subdivision 2; Laws 2002, chapter 220, article 7, 4.12 section 1; Laws 2002, chapter 220, article 7, section 4.13 4, subdivisions 1, 5; Laws 2002, chapter 220, article 4.14 7, section 34; Laws 2002, chapter 220, article 8, 4.15 section 15; Laws 2002, chapter 220, article 9, section 4.16 2, subdivision 4; Laws 2002, chapter 220, article 10, 4.17 section 17; Laws 2002, chapter 220, article 10, 4.18 section 36; Laws 2002, chapter 220, article 10, 4.19 section 38, subdivisions 2, 3; Laws 2002, chapter 220, 4.20 article 10, section 39; Laws 2002, chapter 220, 4.21 article 13, section 7; Laws 2002, chapter 220, article 4.22 13, section 9, subdivision 2; Laws 2002, chapter 220, 4.23 article 17, section 2, subdivision 6; proposing coding 4.24 for new law in Minnesota Statutes, chapters 126C; 4.25 144D; 177; 237; 272; 469; 473; 477A; repealing 4.26 Minnesota Statutes 2000, sections 7.21; 272.02, 4.27 subdivision 40; 278.01, subdivision 4; 290.01, 4.28 subdivisions 19g, 32; 290.0921, subdivision 5; 295.44; 4.29 297A.68, subdivision 26; 383A.80, subdivision 4; 4.30 383B.80, subdivision 4; 611A.373, subdivision 3, as 4.31 added; 611A.73, subdivision 6, as added; Minnesota 4.32 Statutes 2001 Supplement, sections 134.47, subdivision 4.33 3; 297A.61, subdivision 31; Laws 2001, First Special 4.34 Session chapter 5, article 3, section 88; Laws 2002, 4.35 chapter 220, article 6, section 4; Laws 2002, chapter 4.36 220, article 7, sections 5, 32, 33; Laws 2002, chapter 4.37 220, article 10, section 37; Minnesota Rules, parts 4.38 8130.1400; 8130.2100; 8130.2350; 8130.2600; 8130.3000; 4.39 8130.3850; 8130.5000. 4.40 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 4.41 ARTICLE 1 4.42 EDUCATION AID PAYMENT DELAY 4.43 Section 1. Minnesota Statutes 2001 Supplement, section 4.44 124D.11, subdivision 9, is amended to read: 4.45 Subd. 9. [PAYMENT OF AIDS TO CHARTER SCHOOLS.] (a) 4.46 Notwithstanding section 127A.45, subdivision 3, aid payments for 4.47 the current fiscal year to a charter school not in its first 4.48 year of operation shall be of an equal amount on each of the 23 4.49 payment dates. A charter school in its first year of operation 4.50 shall receive, on its first payment date, ten percent of its 4.51 cumulative amount guaranteed for the year and 22 payments of an 4.52 equal amount thereafter the sum of which shall be 90 percent of 4.53 the cumulative amount guaranteed. 4.54 (b) Notwithstanding paragraph (a), for a charter school 4.55 ceasing operation prior to the end of a school year,9085 5.1 percent of the amount due for the school year may be paid to the 5.2 school after audit of prior fiscal year and current fiscal year 5.3 pupil counts. 5.4 (c) Notwithstanding section 127A.45, subdivision 3, and 5.5 paragraph (a),9085 percent of the start-up cost aid under 5.6 subdivision 8 shall be paid within 45 days after the first day 5.7 of student attendance for that school year. 5.8 (d) In order to receive state aid payments under this 5.9 subdivision, a charter school in its first three years of 5.10 operation must submit a quarterly report to the department of 5.11 children, families, and learning. The report must list each 5.12 student by grade, show the student's start and end dates, if 5.13 any, with the charter school, and for any student participating 5.14 in a learning year program, the report must list the hours and 5.15 times of learning year activities. The report must be submitted 5.16 not more than two weeks after the end of the calendar quarter to 5.17 the department. The department must develop a Web-based 5.18 reporting form for charter schools to use when submitting 5.19 enrollment reports. A charter school in its fourth and 5.20 subsequent year of operation must submit enrollment information 5.21 to the department in the form and manner requested by the 5.22 department. 5.23 Sec. 2. Minnesota Statutes 2000, section 127A.45, 5.24 subdivision 2, is amended to read: 5.25 Subd. 2. [DEFINITIONS.] (a) The term "other district 5.26 receipts" means payments by county treasurers pursuant to 5.27 section 276.10, apportionments from the school endowment fund 5.28 pursuant to section 127A.33, apportionments by the county 5.29 auditor pursuant to section 127A.34, subdivision 2, and payments 5.30 to school districts by the commissioner of revenue pursuant to 5.31 chapter 298. 5.32 (b) The term "cumulative amount guaranteed" means the 5.33 product of 5.34 (1) the cumulative disbursement percentage shown in 5.35 subdivision 3; times 5.36 (2) the sum of 6.1 (i)9085 percent of the estimated aid and credit 6.2 entitlements paid according to subdivision 13; plus 6.3 (ii) 100 percent of the entitlements paid according to 6.4 subdivisions 11 and 12; plus 6.5 (iii) the other district receipts; plus6.6(iv) the final adjustment payment according to subdivision6.79. 6.8 (c) The term "payment date" means the date on which state 6.9 payments to districts are made by the electronic funds transfer 6.10 method. If a payment date falls on a Saturday, a Sunday, or a 6.11 weekday which is a legal holiday, the payment shall be made on 6.12 the immediately preceding business day. The commissioner may 6.13 make payments on dates other than those listed in subdivision 3, 6.14 but only for portions of payments from any preceding payment 6.15 dates which could not be processed by the electronic funds 6.16 transfer method due to documented extenuating circumstances. 6.17 Sec. 3. Minnesota Statutes 2000, section 127A.45, 6.18 subdivision 3, is amended to read: 6.19 Subd. 3. [PAYMENT DATES AND PERCENTAGES.] (a) For fiscal 6.20 year 2003, the commissioner shall pay to a district on the dates 6.21 indicated an amount computed as follows: the cumulative amount 6.22 guaranteed minus the sum of (a) the district's other district 6.23 receipts through the current payment, and (b) the aid and credit 6.24 payments through the immediately preceding payment. For 6.25 purposes of this computation, the payment dates and the 6.26 cumulative disbursement percentages are as follows: 6.27 Payment date Percentage 6.28 Payment 1 July 15:4.65.1 6.29 Payment 2 July 30:6.97.7 6.30 Payment 3 August 15:the greater of (a) the final6.31adjustment for the prior fiscal year for6.32the state paid property tax credits6.33established in section 273.1392, or6.34(b) the amount needed to provide 15.2 percent16.9 6.35 Payment 4 August 30:17.419.3 6.36 Payment 5 September 15:19.621.8 7.1 Payment 6 September 30:21.824.3 7.2 Payment 7 October 15:the greater of (a) one-half of7.3the final adjustment for the prior fiscal year7.4for all aid entitlements except state paid7.5property tax credits, or (b) the amount needed to7.6provide 24 percent26.3 7.7 Payment 8 October 30:the greater of (a) one-half of the7.8final adjustment for the prior fiscal year for all7.9aid entitlements except state paid property7.10tax credits, or (b) the amount needed7.11to provide 27.3percent28.3 7.12 Payment 9 November 15:33.332.8 7.13 Payment 10 November 30:39.339.1 7.14 Payment 11 December 15:42.342.4 7.15 Payment 12 December 30:45.345.6 7.16 Payment 13 January 15:49.550.5 7.17 Payment 14 January 30:53.855.0 7.18 Payment 15 February 15:58.360.2 7.19 Payment 16 February 28:62.865.0 7.20 Payment 17 March 15:67.669.7 7.21 Payment 18 March 30:72.374.3 7.22 Payment 19 April 15:75.378.3 7.23 Payment 20 April 30:81.384.2 7.24 Payment 21 May 15:84.388.7 7.25 Payment 22 May 30:92.393.3 7.26 Payment 23 June 20: 100.0 7.27 (b) In addition to the amounts paid under paragraph (a), 7.28 for fiscal year 2003, the commissioner shall pay to a district 7.29 on the dates indicated an amount computed as follows: 7.30 Payment 3 August 15: the final adjustment for the 7.31 prior fiscal year for the state paid 7.32 property tax credits established in 7.33 section 273.1392 7.34 Payment 7 October 15: one-half of the final adjustment 7.35 for the prior fiscal year for all aid 7.36 entitlements except state paid property 8.1 tax credits 8.2 Payment 8 October 30: one-half of the final adjustment 8.3 for the prior fiscal year for all aid 8.4 entitlements except state paid property 8.5 tax credits 8.6 (c) For fiscal year 2004 and later, the commissioner shall 8.7 pay to a district on the dates indicated an amount computed as 8.8 follows: the cumulative amount guaranteed minus the sum of (a) 8.9 the district's other district receipts through the current 8.10 payment, and (b) the aid and credit payments through the 8.11 immediately preceding payment. For purposes of this 8.12 computation, the payment dates and the cumulative disbursement 8.13 percentages are as follows: 8.14 Payment date Percentage 8.15 Payment 1 July 15: 5.1 8.16 Payment 2 July 30: 7.7 8.17 Payment 3 August 15: 16.9 8.18 Payment 4 August 30: 19.3 8.19 Payment 5 September 15: 21.8 8.20 Payment 6 September 30: 24.3 8.21 Payment 7 October 15: 26.3 8.22 Payment 8 October 30: 28.3 8.23 Payment 9 November 15: 30.3 8.24 Payment 10 November 30: 35.0 8.25 Payment 11 December 15: 40.0 8.26 Payment 12 December 30: 43.0 8.27 Payment 13 January 15: 48.0 8.28 Payment 14 January 30: 52.0 8.29 Payment 15 February 15: 56.0 8.30 Payment 16 February 28: 61.0 8.31 Payment 17 March 15: 66.0 8.32 Payment 18 March 30: 72.0 8.33 Payment 19 April 15: 76.0 8.34 Payment 20 April 30: 83.0 8.35 Payment 21 May 15: 88.0 8.36 Payment 22 May 30: 95.0 9.1 Payment 23 June 20: 100.0 9.2 (d) In addition to the amounts paid under paragraph (c), 9.3 for fiscal year 2004 and later, the commissioner shall pay to a 9.4 district on the dates indicated an amount computed as follows: 9.5 Payment 3 August 15: the final adjustment for the 9.6 prior fiscal year for the state paid 9.7 property tax credits established in 9.8 section 273.1392 9.9 Payment 4 August 30: one-third of the final adjustment 9.10 for the prior fiscal year for all aid 9.11 entitlements except state paid property 9.12 tax credits 9.13 Payment 7 October 15: one-third of the final adjustment 9.14 for the prior fiscal year for all aid 9.15 entitlements except state paid property 9.16 tax credits 9.17 Payment 8 October 30: one-third of the final adjustment 9.18 for the prior fiscal year for all aid 9.19 entitlements except state paid property 9.20 tax credits 9.21 Sec. 4. Minnesota Statutes 2000, section 127A.45, is 9.22 amended by adding a subdivision to read: 9.23 Subd. 7a. [ADVANCE FINAL PAYMENT.] (a) Notwithstanding 9.24 subdivisions 3 and 7, a school district or a charter school 9.25 exceeding its expenditure limitations under section 123B.83 as 9.26 of June 30 of the prior fiscal year may receive a portion of its 9.27 final payment for the current fiscal year on June 20, if 9.28 requested by the district. The amount paid under this 9.29 subdivision must not exceed the lesser of: 9.30 (1) five percent of the district or charter school's 9.31 general education aid for the current fiscal year; or 9.32 (2) the amount by which the district or charter school's 9.33 net negative unreserved general fund balance as of June 30 of 9.34 the prior fiscal year exceeds 2.5 percent of the district or 9.35 charter school's expenditures for that fiscal year. 9.36 (b) The state total advance final payment under this 10.1 subdivision for any year must not exceed $13,900,000. If the 10.2 amount requested exceeds $13,900,000, the advance final payment 10.3 for each eligible district must be reduced proportionately. 10.4 Sec. 5. Minnesota Statutes 2000, section 127A.45, 10.5 subdivision 10, is amended to read: 10.6 Subd. 10. [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 10.7 fiscal year state general fund payments for a district 10.8 nonoperating fund must be made at9085 percent of the estimated 10.9 entitlement during the fiscal year of the entitlement. This 10.10 amount shall be paid in 12 equal monthly installments. The 10.11 amount of the actual entitlement, after adjustment for actual 10.12 data, minus the payments made during the fiscal year of the 10.13 entitlement must be paid prior to October 31 of the following 10.14 school year. The commissioner may make advance payments of debt 10.15 service equalization aid or homestead and agricultural credit 10.16 aid for a district's debt service fund earlier than would occur 10.17 under the preceding schedule if the district submits evidence 10.18 showing a serious cash flow problem in the fund. The 10.19 commissioner may make earlier payments during the year and, if 10.20 necessary, increase the percent of the entitlement paid to 10.21 reduce the cash flow problem. 10.22 Sec. 6. Minnesota Statutes 2000, section 127A.45, 10.23 subdivision 13, is amended to read: 10.24 Subd. 13. [AID PAYMENT PERCENTAGE.] Except as provided in 10.25 subdivisions 11, 12, 12a, and 14, each fiscal year, all 10.26 education aids and credits in this chapter and chapters 120A, 10.27 120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and 10.28 section 273.1392, shall be paid at9085 percent of the 10.29 estimated entitlement during the fiscal year of the 10.30 entitlement. The final adjustment payment, according to 10.31 subdivision 9, must be the amount of the actual entitlement, 10.32 after adjustment for actual data, minus the payments made during 10.33 the fiscal year of the entitlement. 10.34 Sec. 7. Minnesota Statutes 2000, section 127A.45, 10.35 subdivision 14, is amended to read: 10.36 Subd. 14. [NONPUBLIC AIDS.] The state shall pay aid 11.1 according to sections 123B.40 to 123B.48 for pupils attending 11.2 nonpublic schools as follows: 11.3 (1) an advance payment by November 30 equal to9085 11.4 percent of the estimated entitlement for the current fiscal 11.5 year; and 11.6 (2) a final payment by October 31 of the following fiscal 11.7 year, adjusted for actual data. 11.8 If a payment advance to meet cash flow needs is requested 11.9 by a district and approved by the commissioner, the state shall 11.10 pay nonpublic pupil transportation aid according to section 11.11 123B.92 by October 31. 11.12 Sec. 8. Minnesota Statutes 2001 Supplement, section 11.13 127A.45, subdivision 14a, is amended to read: 11.14 Subd. 14a. [STATE NUTRITION PROGRAMS.] Notwithstanding 11.15 subdivision 3, the state shall pay 100 percent of the aid for 11.16 the current year according to sections 124D.111, 124D.115, and 11.17 124D.118 and9085 percent of the aid for the current year 11.18 according to section 124D.1156 based on submitted monthly 11.19 vouchers showing meals and milk served. The remainingten15 11.20 percent according to section 124D.1156 shall be paid by October 11.21 30 of the following fiscal year. 11.22 Sec. 9. Minnesota Statutes 2000, section 127A.45, 11.23 subdivision 16, is amended to read: 11.24 Subd. 16. [PAYMENTS TO THIRD PARTIES.] Notwithstanding 11.25 subdivision 3,9085 percent of the amounts under section 11.26 123A.26, subdivision 3, shall be paid in equal installments on 11.27 August 30, December 30, and March 30, with aten15 percent 11.28 final adjustment payment on October 30 of the next fiscal year. 11.29 Sec. 10. [APPROPRIATION, ADVANCE FINAL PAYMENT.] 11.30 $13,900,000 is appropriated from the general fund to the 11.31 commissioner of children, families, and learning to make advance 11.32 final payments to school districts and charter schools under 11.33 section 9. 11.34 ARTICLE 2 11.35 EARLY CHILDHOOD AND FAMILY EDUCATION 11.36 Section 1. Laws 2001, First Special Session chapter 3, 12.1 article 1, section 17, subdivision 2, is amended to read: 12.2 Subd. 2. [SCHOOL READINESS PROGRAM REVENUE.] For revenue 12.3 for school readiness programs according to Minnesota Statutes, 12.4 sections 124D.15 and 124D.16: 12.5 $10,395,000 ..... 2002 12.6$10,395,000$9,875,000 ..... 2003 12.7 The 2002 appropriation includes $1,039,000 for 2001 and 12.8 $9,356,000 for 2002. 12.9 The 2003 appropriation includes $1,039,000 for 2002 and 12.10$9,356,000$8,836,000 for 2003. 12.11 Any balance in the first year does not cancel but is 12.12 available in the second year. 12.13 Sec. 2. Laws 2001, First Special Session chapter 3, 12.14 article 1, section 17, subdivision 3, as amended by Laws 2002, 12.15 chapter 220, article 2, section 2, is amended to read: 12.16 Subd. 3. [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 12.17 childhood family education aid according to Minnesota Statutes, 12.18 section 124D.135: 12.19$20,725,000$20,746,000 ..... 2002 12.20$20,624,000$19,597,000 ..... 2003 12.21 The 2002 appropriation includes $2,036,000 for 2001 and 12.22$18,689,000$18,710,000 for 2002. 12.23 The 2003 appropriation includes$2,076,000$2,079,000 for 12.24 2002 and$18,548,000$17,518,000 for 2003. 12.25 Any balance in the first year does not cancel but is 12.26 available in the second year. 12.27 Sec. 3. Laws 2001, First Special Session chapter 3, 12.28 article 1, section 17, subdivision 4, is amended to read: 12.29 Subd. 4. [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 12.30 health and developmental screening aid according to Minnesota 12.31 Statutes, sections 121A.17 and 121A.19: 12.32 $2,661,000 ..... 2002 12.33$2,661,000$2,528,000 ..... 2003 12.34 The 2002 appropriation includes $266,000 for 2001 and 12.35 $2,395,000 for 2002. 12.36 The 2003 appropriation includes $266,000 for 2002 and 13.1$2,395,000$2,262,000 for 2003. 13.2 Any balance in the first year does not cancel but is 13.3 available in the second year. 13.4 Sec. 4. Laws 2001, First Special Session chapter 3, 13.5 article 1, section 17, subdivision 7, as amended by Laws 2002, 13.6 chapter 220, article 2, section 3, is amended to read: 13.7 Subd. 7. [SCHOOL AGE CARE AID.] For school age care aid 13.8 according to Minnesota Statutes, section 124D.22: 13.9 $221,000 ..... 2002 13.10$100,000$95,000 ..... 2003 13.11 The 2002 appropriation includes $30,000 for 2001 and 13.12 $191,000 for 2002. 13.13 The 2003 appropriation includes $21,000 for 2002 and 13.14$79,000$74,000 for 2003. 13.15 Any balance in the first year does not cancel but is 13.16 available in the second year. 13.17 Sec. 5. Laws 2001, First Special Session chapter 3, 13.18 article 1, section 17, subdivision 9, as amended by Laws 2002, 13.19 chapter 220, article 2, section 5, is amended to read: 13.20 Subd. 9. [MFIP CHILD CARE.] For child care assistance 13.21 according to Minnesota Statutes, section 119B.05: 13.22$69,201,000$59,956,000 ..... 2002 13.23$77,122,000$68,182,000 ..... 2003 13.24 Any balance in the first year does not cancel but is 13.25 available in the second year. 13.26 Sec. 6. Laws 2001, First Special Session chapter 3, 13.27 article 1, section 19, subdivision 3, as amended by Laws 2002, 13.28 chapter 220, article 2, section 8, is amended to read: 13.29 Subd. 3. [TRANSITION YEAR FAMILIES.] To provide 13.30 uninterrupted assistance under Minnesota Statutes, section 13.31 119B.03, for families completing transition year child care 13.32 assistance: 13.33$1,404,000$1,695,000 ..... 2002 13.34$1,357,000$1,014,000 ..... 2003 13.35 Any unspent balance from the appropriations for 2002 and 13.36 2003 is returned to the TANF reserve. TANF dollars appropriated 14.1 for this purpose in 2001 which are not encumbered by January 1, 14.2 2002, are returned to the TANF reserve. 14.3 Sec. 7. Laws 2001, First Special Session chapter 3, 14.4 article 1, section 19, subdivision 5, as amended by Laws 2002, 14.5 chapter 220, article 2, section 9, is amended to read: 14.6 Subd. 5. [MFIP SOCIAL SERVICES CHILD CARE.] For social 14.7 services child care costs of eligible MFIP participants under 14.8 Minnesota Statutes, section 119B.05, subdivision 1, clause (5): 14.9$973,000$775,000 ..... 2002 14.10$997,000$801,000 ..... 2003 14.11 Any unspent balance from the appropriations for 2002 and 14.12 2003 is returned to the TANF reserve. TANF dollars appropriated 14.13 for this purpose in 2001 which are not encumbered by January 1, 14.14 2002, are returned to the TANF reserve. 14.15 Sec. 8. Laws 2001, First Special Session chapter 3, 14.16 article 2, section 15, subdivision 3, as amended by Laws 2002, 14.17 chapter 220, article 2, section 10, is amended to read: 14.18 Subd. 3. [COMMUNITY EDUCATION AID.] For community 14.19 education aid according to Minnesota Statutes, section 124D.20: 14.20$14,190,000$14,194,000 ..... 2002 14.21$ 8,186,000$ 7,815,000 ..... 2003 14.22 The 2002 appropriation includes $1,528,000 for 2001 and 14.23$12,662,000$12,666,000 for 2002. 14.24 The 2003 appropriation includes$1,406,000$1,407,000 for 14.25 2002 and$6,780,000$6,408,000 for 2003. 14.26 Any balance in the first year does not cancel but is 14.27 available in the second year. 14.28 Sec. 9. Laws 2001, First Special Session chapter 3, 14.29 article 2, section 15, subdivision 4, is amended to read: 14.30 Subd. 4. [ADULTS WITH DISABILITIES PROGRAM AID.] For 14.31 adults with disabilities programs according to Minnesota 14.32 Statutes, section 124D.56: 14.33 $639,000 ..... 2002 14.34$710,000$675,000 ..... 2003 14.35 The 2002 appropriation includes $0 for 2001 and $639,000 14.36 for 2002. 15.1 The 2003 appropriation includes $71,000 for 2002 and 15.2$639,000$604,000 for 2003. 15.3 Any balance in the first year does not cancel but is 15.4 available in the second year. 15.5 Sec. 10. Laws 2001, First Special Session chapter 3, 15.6 article 2, section 15, subdivision 6, is amended to read: 15.7 Subd. 6. [VIOLENCE PREVENTION EDUCATION GRANTS.] For 15.8 violence prevention education grants according to Minnesota 15.9 Statutes, section 120B.23: 15.10 $1,305,000 ..... 2002 15.11$1,450,000$1,378,000 ..... 2003 15.12 The 2002 appropriation includes $0 for 2001 and $1,305,000 15.13 for 2002. 15.14 The 2003 appropriation includes $145,000 for 2002 and 15.15$1,305,000$1,233,000 for 2003. 15.16 Any balance in the first year does not cancel but is 15.17 available in the second year. 15.18 Sec. 11. Laws 2001, First Special Session chapter 3, 15.19 article 3, section 9, subdivision 5, is amended to read: 15.20 Subd. 5. [ADULT BASIC EDUCATION AID.] For adult basic 15.21 education aid according to Minnesota Statutes, section 124D.531: 15.22 $32,150,000 ..... 2002 15.23$34,731,000$32,982,000 ..... 2003 15.24 The 2002 appropriation includes $3,019,000 for 2001 and 15.25 $29,131,000 for 2002. 15.26 The 2003 appropriation includes $3,237,000 for 2002 and 15.27$31,494,000$29,745,000 for 2003. 15.28 Sec. 12. Laws 2001, First Special Session chapter 3, 15.29 article 3, section 9, subdivision 7, is amended to read: 15.30 Subd. 7. [ADULT GRADUATION AID.] For adult graduation aid 15.31 according to Minnesota Statutes, section 124D.54: 15.32$3,195,000$2,462,000 ..... 2002 15.33$3,356,000$2,378,000 ..... 2003 15.34 The 2002 appropriation includes $305,000 for 2001 and 15.35$2,890,000$2,157,000 for 2002. 15.36 The 2003 appropriation includes$321,000$240,000 for 2002 16.1 and$3,035,000$2,138,000 for 2003. 16.2 Sec. 13. Laws 2001, First Special Session chapter 3, 16.3 article 4, section 5, subdivision 2, as amended by Laws 2002, 16.4 chapter 220, article 2, section 12, is amended to read: 16.5 Subd. 2. [BASIC SUPPORT GRANTS.] For basic support grants 16.6 according to Minnesota Statutes, sections 134.32 to 134.35: 16.7 $8,570,000 ..... 2002 16.8$8,570,000$8,142,000 ..... 2003 16.9 The 2002 appropriation includes $857,000 for 2001 and 16.10 $7,713,000 for 2002. 16.11 The 2003 appropriation includes $857,000 for 2002 and 16.12$7,713,000$7,285,000 for 2003. 16.13 Base level funding for fiscal year 2004 is 16.14$9,823,000$9,754,000 and$9,822,000$9,962,000 for fiscal year 16.15 2005. 16.16 Sec. 14. Laws 2001, First Special Session chapter 3, 16.17 article 4, section 5, subdivision 3, is amended to read: 16.18 Subd. 3. [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 16.19 grants according to Minnesota Statutes, sections 134.353 and 16.20 134.354, to multicounty, multitype library systems: 16.21 $903,000 ..... 2002 16.22$903,000$858,000 ..... 2003 16.23 The 2002 appropriation includes $90,000 for 2001 and 16.24 $813,000 for 2002. 16.25 The 2003 appropriation includes $90,000 for 2002 and 16.26$813,000$768,000 for 2003. 16.27 Any balance in the first year does not cancel but is 16.28 available in the second year. 16.29 Sec. 15. Laws 2002, chapter 220, article 2, section 14, is 16.30 amended to read: 16.31 Sec. 14. [TANF APPROPRIATIONS.] 16.32 Subdivision 1. [DEPARTMENT OF CHILDREN, FAMILIES, AND 16.33 LEARNING.] The sum indicated in this section isappropriated to16.34the commissioner of children, families, and learningtransferred 16.35 from the federal Temporary Assistance for Needy Families block 16.36 grant to the child care and development fund and appropriated to 17.1 the department of children, families, and learning for the 17.2 fiscal year designated. This amount is available for 17.3 expenditure until June 30, 2003. 17.4 Subd. 2. [BASIC SLIDING FEE CHILD CARE.] For child care 17.5 assistance according to Minnesota Statutes, section 119B.03: 17.6 $3,000,000 ..... 2003 17.7 Sec. 16. [EFFECTIVE DATE.] 17.8 This article is effective the day following final enactment. 17.9 ARTICLE 3 17.10 K-12 EDUCATION APPROPRIATION ADJUSTMENTS 17.11 Section 1. Minnesota Statutes 2001 Supplement, section 17.12 123B.54, as amended by Laws 2002, chapter 220, article 4, 17.13 section 1, is amended to read: 17.14 123B.54 [DEBT SERVICE APPROPRIATION.] 17.15 (a) $25,987,000 in fiscal year 2002, 17.16$31,892,000$30,600,000 in fiscal year 2003, 17.17$36,629,000$40,246,000 in fiscal year 2004, and 17.18$36,931,000$39,732,000 in fiscal years 2005 and later are 17.19 appropriated from the general fund to the commissioner of 17.20 children, families, and learning for payment of debt service 17.21 equalization aid under section 123B.53. 17.22 (b) The appropriations in paragraph (a) must be reduced by 17.23 the amount of any money specifically appropriated for the same 17.24 purpose in any year from any state fund. 17.25 Sec. 2. Laws 2001, First Special Session chapter 5, 17.26 article 2, section 29, subdivision 2, as amended by Laws 2002, 17.27 chapter 220, article 4, section 2, is amended to read: 17.28 Subd. 2. [REFERENDUM TAX BASE REPLACEMENT AID.] For 17.29 referendum tax base replacement aid according to Minnesota 17.30 Statutes, section 126C.17, subdivision 7a: 17.31$7,616,000$7,197,000 ..... 2003 17.32 The 2003 appropriation includes $0 for 2002 and 17.33$7,616,000$7,197,000 for 2003. 17.34 Sec. 3. Laws 2001, First Special Session chapter 6, 17.35 article 1, section 54, subdivision 2, as amended by Laws 2002, 17.36 chapter 220, article 3, section 8, is amended to read: 18.1 Subd. 2. [GENERAL AND SUPPLEMENTAL EDUCATION AID.] (a) For 18.2 general and supplemental education aid: 18.3$3,404,787,000$3,414,168,000 ..... 2002 18.4$4,982,334,000$4,720,954,000 ..... 2003 18.5 The 2002 appropriation includes$323,767,000$333,756,000 18.6 for 2001 and$3,081,020,000$3,080,412,000 for 2002. 18.7 The 2003 appropriation includes$335,220,000$335,163,000 18.8 for 2002 and$4,647,114,000$4,385,791,000 for 2003. 18.9 (b) The fiscal year 2003 appropriation in paragraph (a) is 18.10 reduced by $1,901,000. 18.11 Sec. 4. Laws 2001, First Special Session chapter 6, 18.12 article 1, section 54, subdivision 4, as amended by Laws 2002, 18.13 chapter 220, article 4, section 3, is amended to read: 18.14 Subd. 4. [ABATEMENT AID.] For abatement aid according to 18.15 Minnesota Statutes, section 127A.49: 18.16 $5,698,000 ..... 2002 18.17$2,990,000$2,925,000 ..... 2003 18.18 The 2002 appropriation includes $640,000 for 2001 and 18.19 $5,058,000 for 2002. 18.20 The 2003 appropriation includes $562,000 for 2002 18.21 and$2,428,000$2,363,000 for 2003. 18.22 Sec. 5. Laws 2001, First Special Session chapter 6, 18.23 article 1, section 54, subdivision 5, as amended by Laws 2002, 18.24 chapter 220, article 4, section 4, is amended to read: 18.25 Subd. 5. [NONPUBLIC PUPIL AID.] For nonpublic pupil 18.26 education aid according to Minnesota Statutes, sections 123.79 18.27 and 123B.40 to 123B.43: 18.28$14,441,000$14,254,000 ..... 2002 18.29$15,977,000$14,568,000 ..... 2003 18.30 The 2002 appropriation includes $1,330,000 for 2001 and 18.31$13,111,000$12,924,000 for 2002. 18.32 The 2003 appropriation includes$1,457,000$1,436,000 for 18.33 2002 and$14,520,000$13,132,000 for 2003. 18.34 Sec. 6. Laws 2001, First Special Session chapter 6, 18.35 article 1, section 54, subdivision 6, as amended by Laws 2002, 18.36 chapter 220, article 4, section 5, is amended to read: 19.1 Subd. 6. [NONPUBLIC PUPIL TRANSPORTATION.] For nonpublic 19.2 pupil transportation aid under Minnesota Statutes, section 19.3 123B.92, subdivision 9: 19.4$20,635,000$20,634,000 ..... 2002 19.5$25,347,000$22,723,000 ..... 2003 19.6 The 2002 appropriation includes $2,000,000 for 2001 and 19.7$18,635,000$18,634,000 for 2002. 19.8 The 2003 appropriation includes$2,070,000$2,071,000 for 19.9 2002 and$23,277,000$20,652,000 for 2003. 19.10 Sec. 7. Laws 2001, First Special Session chapter 6, 19.11 article 1, section 54, subdivision 7, as amended by Laws 2002, 19.12 chapter 220, article 4, section 6, is amended to read: 19.13 Subd. 7. [CONSOLIDATION TRANSITION AID.] For districts 19.14 consolidating under Minnesota Statutes, section 123A.485: 19.15$531,000$539,000 ..... 2002 19.16$736,000$229,000 ..... 2003 19.17 The 2002 appropriation includes $44,000 for 2001 and 19.18$487,000$495,000 for 2002. 19.19 The 2003 appropriation includes $54,000 for 2002 19.20 and$682,000$175,000 for 2003. 19.21 Any balance in the first year does not cancel but is 19.22 available in the second year. 19.23 Sec. 8. Laws 2001, First Special Session chapter 6, 19.24 article 2, section 77, subdivision 4, as amended by Laws 2002, 19.25 chapter 220, article 4, section 7, is amended to read: 19.26 Subd. 4. [CHARTER SCHOOL BUILDING LEASE AID.] For building 19.27 lease aid under Minnesota Statutes, section 124D.11, subdivision 19.28 4: 19.29$12,323,000$12,286,000 ..... 2002 19.30$15,330,000$14,711,000 ..... 2003 19.31 The 2002 appropriation includes $1,114,000 for 2001 and 19.32$11,209,000$11,172,000 for 2002. 19.33 The 2003 appropriation includes$1,245,000$1,241,000 for 19.34 2002 and$14,085,000$13,470,000 for 2003. 19.35 Sec. 9. Laws 2001, First Special Session chapter 6, 19.36 article 2, section 77, subdivision 5, as amended by Laws 2002, 20.1 chapter 220, article 4, section 8, is amended to read: 20.2 Subd. 5. [CHARTER SCHOOL STARTUP GRANTS.] For charter 20.3 school startup cost aid under Minnesota Statutes, section 20.4 124D.11: 20.5$2,090,000$2,064,000 ..... 2002 20.6$1,549,000$1,486,000 ..... 2003 20.7 The 2002 appropriation includes $258,000 for 2001 20.8 and$1,832,000$1,806,000 for 2002. 20.9 The 2003 appropriation includes$204,000$200,000 for 2002 20.10 and$1,345,000$1,286,000 for 2003. 20.11 Sec. 10. Laws 2001, First Special Session chapter 6, 20.12 article 2, section 77, subdivision 6, is amended to read: 20.13 Subd. 6. [CHARTER SCHOOL INTEGRATION AID.] For grants to 20.14 charter schools to promote integration and desegregation under 20.15 Minnesota Statutes, section 124D.11, subdivision 6, paragraph 20.16 (e): 20.17 $45,000 ..... 2002 20.18$50,000$48,000 ..... 2003 20.19 The 2002 appropriation includes $0 for 2001 and $45,000 for 20.20 2002. 20.21 The 2003 appropriation includes $5,000 for 2002 and 20.22$45,000$43,000 for 2003. 20.23 Any balance in the first year does not cancel but is 20.24 available in the second year. 20.25 Sec. 11. Laws 2001, First Special Session chapter 6, 20.26 article 2, section 77, subdivision 8, as amended by Laws 2002, 20.27 chapter 220, article 4, section 9, is amended to read: 20.28 Subd. 8. [INTEGRATION AID.] For integration aid: 20.29$63,421,000$63,311,000 ..... 2002 20.30$53,890,000$51,478,000 ..... 2003 20.31 The 2002 appropriation includes $5,729,000 for 2001 and 20.32$57,692,000$57,582,000 for 2002. 20.33 The 2003 appropriation includes$6,410,000$6,398,000 for 20.34 2002 and$47,480,000$45,080,000 for 2003. 20.35 Sec. 12. Laws 2001, First Special Session chapter 6, 20.36 article 2, section 77, subdivision 11, as amended by Laws 2002, 21.1 chapter 220, article 4, section 10, is amended to read: 21.2 Subd. 11. [MAGNET SCHOOL STARTUP AID.] For magnet school 21.3 startup aid under Minnesota Statutes, section 124D.88: 21.4$475,000$448,000 ..... 2002 21.5$298,000$333,000 ..... 2003 21.6 The 2002 appropriation includes $25,000 for 2001 and 21.7$450,000$423,000 for 2002. 21.8 The 2003 appropriation includes$50,000$47,000 for 2002 21.9 and$248,000$286,000 for 2003. 21.10 Sec. 13. Laws 2001, First Special Session chapter 6, 21.11 article 2, section 77, subdivision 15, as amended by Laws 2002, 21.12 chapter 220, article 4, section 11, is amended to read: 21.13 Subd. 15. [SUCCESS FOR THE FUTURE.] For American Indian 21.14 success for the future grants according to Minnesota Statutes, 21.15 section 124D.81: 21.16 $1,924,000 ..... 2002 21.17$2,137,000$2,030,000 ..... 2003 21.18 The 2002 appropriation includes $0 for 2001 and $1,924,000 21.19 for 2002. 21.20 The 2003 appropriation includes $213,000 for 2002 21.21 and$1,924,000$1,817,000 for 2003. 21.22 Sec. 14. Laws 2001, First Special Session chapter 6, 21.23 article 2, section 77, subdivision 18, as amended by Laws 2002, 21.24 chapter 220, article 4, section 12, is amended to read: 21.25 Subd. 18. [TRIBAL CONTRACT SCHOOLS.] For tribal contract 21.26 school aid under Minnesota Statutes, section 124D.83: 21.27$2,304,000$2,147,000 ..... 2002 21.28$2,408,000$2,269,000 ..... 2003 21.29 The 2002 appropriation includes $192,000 for 2001 and 21.30$2,112,000$1,955,000 for 2002. 21.31 The 2003 appropriation includes$235,000$217,000 for 2002 21.32 and$2,173,0002,052,000 for 2003. 21.33 Sec. 15. Laws 2001, First Special Session chapter 6, 21.34 article 3, section 21, subdivision 2, as amended by Laws 2002, 21.35 chapter 220, article 4, section 13, is amended to read: 21.36 Subd. 2. [SPECIAL EDUCATION AID.] For special education 22.1 aid according to Minnesota Statutes, section 125A.75: 22.2$507,841,000$507,928,000 ..... 2002 22.3$532,282,000$505,728,000 ..... 2003 22.4 The 2002 appropriation includes $47,400,000 for 2001 and 22.5$460,441,000$460,528,000 for 2002. 22.6 The 2003 appropriation includes$51,160,000$51,170,000 for 22.7 2002 and$481,122,000$454,558,000 for 2003. 22.8 Sec. 16. Laws 2001, First Special Session chapter 6, 22.9 article 3, section 21, subdivision 3, as amended by Laws 2002, 22.10 chapter 220, article 4, section 14, is amended to read: 22.11 Subd. 3. [AID FOR CHILDREN WITH A DISABILITY.] For aid 22.12 according to Minnesota Statutes, section 125A.75, subdivision 3, 22.13 for children with a disability placed in residential facilities 22.14 within the district boundaries for whom no district of residence 22.15 can be determined: 22.16$1,358,000$1,346,000 ..... 2002 22.17$3,161,000$2,363,000 ..... 2003 22.18 If the appropriation for either year is insufficient, the 22.19 appropriation for the other year is available. 22.20 Any balance in the first year does not cancel but is 22.21 available in the second year. 22.22 Sec. 17. Laws 2001, First Special Session chapter 6, 22.23 article 3, section 21, subdivision 4, as amended by Laws 2002, 22.24 chapter 220, article 4, section 15, is amended to read: 22.25 Subd. 4. [TRAVEL FOR HOME-BASED SERVICES.] For aid for 22.26 teacher travel for home-based services according to Minnesota 22.27 Statutes, section 125A.75, subdivision 1: 22.28$143,000$139,000 ..... 2002 22.29$148,000$137,000 ..... 2003 22.30 The 2002 appropriation includes$14,000$13,000 for 2001 22.31 and$129,000$126,000 for 2002. 22.32 The 2003 appropriation includes$15,000$14,000 for 2002 22.33 and$133,000$123,000 for 2003. 22.34 Sec. 18. Laws 2001, First Special Session chapter 6, 22.35 article 3, section 21, subdivision 5, as amended by Laws 2002, 22.36 chapter 220, article 4, section 16, is amended to read: 23.1 Subd. 5. [SPECIAL EDUCATION EXCESS COST AID.] For excess 23.2 cost aid: 23.3$103,061,000$92,622,000 ..... 2002 23.4$105,289,000$88,823,000 ..... 2003 23.5 The 2002 appropriation includes $9,889,000 for 2001 and 23.6$93,172,000$82,733,000 for 2002. 23.7 The 2003 appropriation includes$10,352,000$9,192,000 for 23.8 2002 and$94,937,000$79,631,000 for 2003. 23.9 Sec. 19. Laws 2001, First Special Session chapter 6, 23.10 article 3, section 21, subdivision 7, as amended by Laws 2002, 23.11 chapter 220, article 4, section 17, is amended to read: 23.12 Subd. 7. [TRANSITION PROGRAMS; STUDENTS WITH 23.13 DISABILITIES.] For aid for transition programs for pupils with 23.14 disabilities according to Minnesota Statutes, section 124D.454: 23.15$8,960,000$8,962,000 ..... 2002 23.16$8,952,000$8,507,000 ..... 2003 23.17 The 2002 appropriation includes $896,000 for 2001 and 23.18$8,064,000$8,066,000 for 2002. 23.19 The 2003 appropriation includes $896,000 for 2002 23.20 and$8,056,000$7,611,000 for 2003. 23.21 Sec. 20. Laws 2001, First Special Session chapter 6, 23.22 article 4, section 27, subdivision 2, as amended by Laws 2002, 23.23 chapter 220, article 4, section 18, is amended to read: 23.24 Subd. 2. [HEALTH AND SAFETY AID.] For health and safety 23.25 aid according to Minnesota Statutes, section 123B.57, 23.26 subdivision 5: 23.27$13,630,000$12,280,000 ..... 2002 23.28$10,800,000$ 9,275,000 ..... 2003 23.29 The 2002 appropriation includes $1,480,000 for 2001 and 23.30$12,150,000$10,800,000 for 2002. 23.31 The 2003 appropriation includes$1,350,000$1,200,000 for 23.32 2002 and$9,450,000$8,075,000 for 2003. 23.33 Sec. 21. Laws 2001, First Special Session chapter 6, 23.34 article 4, section 27, subdivision 3, as amended by Laws 2002, 23.35 chapter 220, article 4, section 19, is amended to read: 23.36 Subd. 3. [DEBT SERVICE AID.] For debt service aid 24.1 according to Minnesota Statutes, section 123B.53, subdivision 6: 24.2 $25,987,000 ..... 2002 24.3$31,892,000$30,600,000 ..... 2003 24.4 The 2002 appropriation includes $2,890,000 for 2001 and 24.5 $23,097,000 for 2002. 24.6 The 2003 appropriation includes $2,566,000 for 2002 24.7 and$29,326,000$28,034,000 for 2003. 24.8 Sec. 22. Laws 2001, First Special Session chapter 6, 24.9 article 4, section 27, subdivision 5, as amended by Laws 2002, 24.10 chapter 220, article 4, section 20, is amended to read: 24.11 Subd. 5. [ALTERNATIVE FACILITIES BONDING AID.] For 24.12 alternative facilities bonding aid, according to Minnesota 24.13 Statutes, section 123B.59, subdivision 1: 24.14 $19,280,000 ..... 2002 24.15$19,287,000$18,322,000 ..... 2003 24.16 The 2002 appropriation includes $1,921,000 for 2001 and 24.17 $17,359,000 for 2002. 24.18 The 2003 appropriation includes $1,928,000 for 2002 24.19 and$17,359,000$16,394,000 for 2003. 24.20 Sec. 23. Laws 2001, First Special Session chapter 6, 24.21 article 5, section 13, subdivision 3, is amended to read: 24.22 Subd. 3. [SCHOOL BREAKFAST.] For school breakfast aid 24.23 under Minnesota Statutes, section 124D.115: 24.24 $640,000 ..... 2002 24.25$700,000$680,000 ..... 2003 24.26 Sec. 24. Laws 2001, First Special Session chapter 6, 24.27 article 5, section 13, subdivision 5, as amended by Laws 2002, 24.28 chapter 220, article 4, section 23, is amended to read: 24.29 Subd. 5. [FAST BREAK TO LEARNING GRANTS.] For fast break 24.30 to learning grants under Minnesota Statutes, section 124D.1156: 24.31 $2,446,000 ..... 2002 24.32$2,839,000$2,697,000 ..... 2003 24.33 The 2002 appropriation includes $0 for 2001 and $2,446,000 24.34 for 2002. 24.35 The 2003 appropriation includes $271,000 for 2002 24.36 and$2,568,000$2,426,000 for 2003. 25.1 Sec. 25. [EFFECTIVE DATE.] 25.2 This article is effective the day following final enactment. 25.3 ARTICLE 4 25.4 E-12 EDUCATION 25.5 Section 1. Minnesota Statutes 2000, section 120A.41, is 25.6 amended to read: 25.7 120A.41 [LENGTH OF SCHOOL YEAR; DAYS OF INSTRUCTION.] 25.8 A school board's annual school calendar must include at 25.9 leastthree additional days of student instruction or staff25.10development training related to implementing section 120B.031,25.11subdivision 1, paragraph (f), beyondthe number of days of 25.12 student instruction the board formally adopted as its school 25.13 calendar at the beginning of the 1996-1997 school year. 25.14 Sec. 2. Minnesota Statutes 2000, section 124D.69, is 25.15 amended by adding a subdivision to read: 25.16 Subd. 3. [UNCOMMON SCHOOLS SERVING STUDENTS WITH CHEMICAL 25.17 DEPENDENCIES; ALLOCATION OF FUNDS.] In addition to the amounts 25.18 provided in section 124D.68, subdivision 9, a school district 25.19 may allocate funds from its undesignated general fund to a 25.20 private contracted alternative program, including a private 25.21 contracted alternative program that is tuition free and provides 25.22 a comprehensive secondary academic program for students who have 25.23 been assessed chemically dependent and who have completed a 25.24 licensed treatment program for chemical dependency. 25.25 Sec. 3. Minnesota Statutes 2000, section 125A.65, 25.26 subdivision 1, is amended to read: 25.27 Subdivision 1. [RESPONSIBILITY ALLOCATED.] Responsibility 25.28 for special instruction and services for avisually25.29disabledblind/visually impaired orhearing impaireddeaf/hard 25.30 of hearing child attending the Minnesota state academy for the 25.31 deaf or the Minnesota state academy for the blind must be 25.32 determined in subdivisions 2 to 10. 25.33 Sec. 4. Minnesota Statutes 2000, section 125A.65, 25.34 subdivision 3, is amended to read: 25.35 Subd. 3. [EDUCATIONAL PROGRAM; TUITION.] When it is 25.36 determined pursuant to section 125A.69, subdivision 1 or 2, that 26.1 the child is entitled to attend either school, the board of the 26.2 Minnesota state academies must provide the appropriate 26.3 educational program for the child. The board of the Minnesota 26.4 state academies must make a tuition charge to the child's 26.5 district of residence for the cost of providing the program. 26.6 The amount of tuition charged must not exceed thebasic revenue26.7of the districtgeneral education revenue formula allowance 26.8 times the pupil unit weighting factor pursuant to section 26.9 126C.05 for that child, for the amount of time the child is in 26.10 the program.For purposes of this subdivision, "basic revenue"26.11has the meaning given it in section 126C.10, subdivision 2.The 26.12 district of the child's residence must pay the tuition and may 26.13 claim general education aid for the child. Tuition received by 26.14 the board of the Minnesota state academies, except for tuition 26.15 received under subdivision 4, must be deposited in the state 26.16 treasury as provided in subdivision 8. 26.17 Sec. 5. Minnesota Statutes 2000, section 125A.65, 26.18 subdivision 8, is amended to read: 26.19 Subd. 8. [STUDENT COUNT; TUITION.] (a) On May 1of each26.20year, 1996, and each year thereafter, the board of the Minnesota 26.21 state academies shall count the actual number of Minnesota 26.22 residentkindergarten and elementary students and the actual26.23number of Minnesota resident secondaryspecial education 26.24 eligible students enrolled and receiving education services at 26.25 the Minnesota state academy for the deaf and the Minnesota state 26.26 academy for the blind. The board of the Minnesota state 26.27 academies shall deposit in the state treasury an amount equal to 26.28 all tuition received less:the amount calculated in paragraph 26.29 (b). 26.30(1) the total number of students on May 1 less 175, times26.31the ratio of the number of kindergarten and elementary students26.32to the total number of students on May 1, times the general26.33education formula allowance; plus26.34(2) the total number of students on May 1 less 175, times26.35the ratio of the number of secondary students on May 1 to the26.36total number of students on May 1, times 1.3, times the general27.1education formula allowance.27.2 (b) The Minnesota state academies shall credit to their 27.3 general operation account an amount equal to the tuition 27.4 received which represents tuition earned for the total number of 27.5 students over 175 based on: 27.6 (1) the total number of enrolled students on May 1 less 27.7 175; times 27.8 (2) the ratio of the number of students in that grade 27.9 category to the total number of students on May 1; times 27.10 (3) the general education revenue formula allowance; times 27.11 (4) the pupil unit weighting factor pursuant to section 27.12 126C.05. 27.13 Sec. 6. Minnesota Statutes 2000, section 125A.65, 27.14 subdivision 9, is amended to read: 27.15 Subd. 9. [CALCULATION.] The sum provided by the 27.16 calculation in subdivision 8, clauses (1) and (2),must be 27.17 deposited in the state treasury and credited to the general 27.18 operation account of theacademy for the deaf and the academy27.19for the blindMinnesota state academy for the deaf and the 27.20 Minnesota state academy for the blind. 27.21 Sec. 7. Minnesota Statutes 2001 Supplement, section 27.22 126C.17, subdivision 7, is amended to read: 27.23 Subd. 7. [REFERENDUM EQUALIZATION AID.] (a) A district's 27.24 referendum equalization aid equals the difference between its 27.25 referendum equalization revenue and levy. 27.26 (b) If a district's actual levy for first or second tier 27.27 referendum equalization revenue is less than its maximum levy 27.28 limit for that tier, aid shall be proportionately reduced. 27.29 (c) Notwithstanding paragraph (a), the referendum 27.30 equalization aid for a district, where the referendum 27.31 equalization aid under paragraph (a) exceeds 90 percent of the 27.32 referendum revenue, must not exceed 18.2 percent of the formula 27.33 allowance times the district's resident marginal cost pupil 27.34 units. A district's referendum levy is increased by the amount 27.35 of any reduction in referendum aid under this paragraph. 27.36[EFFECTIVE DATE.] This section is effective for operating 28.1 referendum elections January 1, 2002, and later. 28.2 Sec. 8. Laws 2001, First Special Session chapter 6, 28.3 article 7, section 14, as amended by Laws 2002, chapter 220, 28.4 article 3, section 16, is amended to read: 28.5 Sec. 14. [APPROPRIATIONS; PERPICH CENTER FOR ARTS 28.6 EDUCATION.] 28.7 The sums indicated in this section are appropriated from 28.8 the general fund to the Perpich Center for Arts Education for 28.9 the fiscal years designated: 28.10$7,431,000$7,681,000 ..... 2002 28.11$7,316,000$7,816,000 ..... 2003 28.12 $150,000 each year is to extend the partnership network to 28.13 up to five new partnership sites and for developing 28.14 whole-school, arts-based teaching and learning curriculum at new 28.15 sites. 28.16 Any balance in the first year does not cancel but is 28.17 available in the second year. 28.18 Sec. 9. [REFERENDUM TRANSFER ADJUSTMENT.] 28.19 Notwithstanding Minnesota Statutes, section 126C.17, 28.20 subdivision 1, paragraph (b), for fiscal year 2003 and later, 28.21 the initial referendum allowance for independent school district 28.22 No. 709, Duluth, equals the sum of the allowance under Minnesota 28.23 Statutes, section 126C.16, subdivision 2, plus the referendum 28.24 conversion allowance approved under Minnesota Statutes, section 28.25 126C.17, subdivision 13, minus $373. If the district has more 28.26 than one referendum authority, the reduction must be computed 28.27 separately for each authority. The reduction must be applied 28.28 first to the referendum authority with the earliest expiration 28.29 date. The district's initial referendum allowance may not be 28.30 less than zero. 28.31 Sec. 10. [DECLINING PUPIL UNIT AID; ALBERT LEA.] 28.32 Subdivision 1. [FISCAL YEAR 2003.] For fiscal year 2003, 28.33 independent school district No. 241, Albert Lea, is eligible for 28.34 family dislocation declining enrollment aid equal to $300,000. 28.35 Subd. 2. [FISCAL YEAR 2004.] For fiscal year 2004, 28.36 independent school district No. 241, Albert Lea, is eligible for 29.1 family dislocation declining enrollment aid equal to 75 percent 29.2 of the fiscal year 2003 appropriation in subdivision 1. 29.3 Subd. 3. [FISCAL YEAR 2005.] For fiscal year 2005, 29.4 independent school district No. 241, Albert Lea, is eligible for 29.5 family dislocation declining enrollment aid equal to 50 percent 29.6 of the fiscal year 2003 appropriation in subdivision 1. 29.7 Subd. 4. [FISCAL YEAR 2006.] For fiscal year 2006, 29.8 independent school district No. 241, Albert Lea, is eligible for 29.9 family dislocation declining enrollment aid equal to 25 percent 29.10 of the fiscal year 2003 appropriation in subdivision 1. 29.11 Sec. 11. [DECLINING ENROLLMENT; LTV DISLOCATION.] 29.12 Subdivision 1. [FISCAL YEAR 2003.] For fiscal year 2003, 29.13 independent school districts Nos. 706, Virginia; 2154, 29.14 Eveleth-Gilbert; 2711, Mesabi East; and the portion of 2142, St. 29.15 Louis county that comprises the Babbitt-Embarass and 29.16 Tower-Soudan attendance areas are eligible for LTV dislocation 29.17 declining pupil aid equal to one-half of the difference between 29.18 each district's fiscal year 2001 adjusted marginal cost pupil 29.19 units and its fiscal year 2003 pupil units times $4,601. 29.20 Subd. 2. [FISCAL YEAR 2004.] For fiscal year 2004, 29.21 independent school districts Nos. 706, Virginia; 2154, 29.22 Eveleth-Gilbert; 2711, Mesabi East; 2142, St. Louis county are 29.23 eligible for LTV dislocation declining enrollment aid equal to 29.24 75 percent of the amount that the district received in the 29.25 fiscal year 2003 appropriation in subdivision 1. 29.26 Subd. 3. [FISCAL YEAR 2005.] For fiscal year 2005, 29.27 independent school districts Nos. 706, Virginia; 2154, 29.28 Eveleth-Gilbert; 2711, Mesabi East; 2142, St. Louis county are 29.29 eligible for LTV dislocation declining enrollment aid equal to 29.30 50 percent of the amount that the district received in the 29.31 fiscal year 2003 appropriation in subdivision 1. 29.32 Subd. 4. [FISCAL YEAR 2006.] For fiscal year 2006, 29.33 independent school districts Nos. 706, Virginia; 2154, 29.34 Eveleth-Gilbert; 2711, Mesabi East; 2142, St. Louis county are 29.35 eligible for LTV dislocation declining enrollment aid equal to 29.36 25 percent of the amount that the district received in the 30.1 fiscal year 2003 appropriation in subdivision 1. 30.2 Subd. 5. [CALCULATION.] For the purpose of calculating the 30.3 pupil loss of independent school district No. 2142, St. Louis 30.4 county, under subdivision 1, the department of children, 30.5 families, and learning shall calculate the loss in the 30.6 Babbitt-Embarass and Tower-Soudan attendance areas only. 30.7[EFFECTIVE DATE.] This section is effective the day 30.8 following final enactment. 30.9 Sec. 12. [STAFF DEVELOPMENT REVENUE ALLOCATION.] 30.10 Notwithstanding Minnesota Statutes, section 122A.61, school 30.11 districts may reallocate up to one-half of the basic revenue 30.12 reserved for staff development for any operating expenses in 30.13 fiscal year 2003 only, unless a majority of licensed teachers in 30.14 the district vote to oppose the staff development revenue 30.15 reallocation. 30.16 Sec. 13. [FUND TRANSFER; BUTTERFIELD.] 30.17 Notwithstanding Minnesota Statutes, section 123B.79 or 30.18 123B.80, on June 30, 2002, independent school district No. 836, 30.19 Butterfield, may permanently transfer up to $117,000 from its 30.20 reserves for operating capital account in its general fund to 30.21 the undesignated fund balance. 30.22[EFFECTIVE DATE.] This section is effective the day 30.23 following final enactment. 30.24 Sec. 14. [FUND TRANSFER; TRUMAN.] 30.25 Notwithstanding Minnesota Statutes, section 123B.79 or 30.26 123B.80, on June 30, 2002, independent school district No. 458, 30.27 Truman, may permanently transfer up to $500,000 from its 30.28 reserves for operating capital account in its general fund to 30.29 the undesignated fund balance. 30.30[EFFECTIVE DATE.] This section is effective the day 30.31 following final enactment. 30.32 Sec. 15. [FUND TRANSFER.] 30.33 Notwithstanding Minnesota Statutes, section 123B.79 or 30.34 123B.80, for fiscal year 2003 only, a school district, with the 30.35 approval of the school board, may permanently transfer any 30.36 available amount from its reserve for operating capital account 31.1 in its general fund to its undesignated fund balance. A school 31.2 district that utilizes the operating capital account in 31.3 combination with the debt service equalization program, under 31.4 Minnesota Statutes, section 123B.53, to support a building 31.5 program may not utilize this fund transfer authority. 31.6 Sec. 16. [APPROPRIATION.] 31.7 (a) $300,000 in fiscal year 2003 is appropriated from the 31.8 general fund to the commissioner of children, families, and 31.9 learning for declining pupil unit aid to independent school 31.10 district No. 241, Albert Lea. 31.11 (b) In addition to the amounts appropriated for general and 31.12 supplemental education aid, $295,000 in fiscal year 2003 is 31.13 appropriated from the general fund to the commissioner of 31.14 children, families, and learning for the aid portion of the 31.15 referendum transfer adjustment for independent school district 31.16 No. 709, Duluth. 31.17 (c) $1,000,000 in fiscal year 2003 is appropriated from the 31.18 general fund to the commissioner of children, families, and 31.19 learning for declining pupil unit aid to independent school 31.20 districts Nos. 706, Virginia; 2154, Eveleth-Gilbert; 2711, 31.21 Mesabi East; and 2142, St. Louis county. 31.22 Sec. 17. [EFFECTIVE DATE.] 31.23 Except as otherwise provided in this article, this article 31.24 is effective the day following final enactment. 31.25 ARTICLE 5 31.26 EDUCATION LEVIES 31.27 Section 1. Minnesota Statutes 2001 Supplement, section 31.28 124D.86, subdivision 3, is amended to read: 31.29 Subd. 3. [INTEGRATION REVENUE.] Integration revenue equals 31.30 the following amounts: 31.31 (1) for independent school district No. 709, Duluth, $207 31.32 times the adjusted pupil units for the school year; 31.33 (2) for independent school district No. 625, St. Paul,and31.34for special school district No. 1, Minneapolis,$446 times the 31.35 adjusted pupil units for the school year; 31.36 (3) for special school district No. 1, Minneapolis, the sum 32.1 of $446 times the adjusted pupil units for the school year and 32.2 an additional $35 times the adjusted pupil units for the school 32.3 year that is provided entirely through a local levy; 32.4 (4) for a district not listed in clause (1)or, (2), or 32.5 (3), that must implement a plan under Minnesota Rules, parts 32.6 3535.0100 to 3535.0180, where the district's enrollment of 32.7 protected students, as defined under Minnesota Rules, part 32.8 3535.0110, exceeds 15 percent, the lesser of (i) the actual cost 32.9 of implementing the plan during the fiscal year minus the aid 32.10 received under subdivision 6, or (ii) $130 times the adjusted 32.11 pupil units for the school year; 32.12(4)(5) for a district not listed in clause (1), (2), 32.13or(3), or (4), that is required to implement a plan according 32.14 to the requirements of Minnesota Rules, parts 3535.0100 to 32.15 3535.0180, the lesser of 32.16 (i) the actual cost of implementing the plan during the 32.17 fiscal year minus the aid received under subdivision 6, or 32.18 (ii) $93 times the adjusted pupil units for the school year. 32.19 Any money received by districts in clauses (1) to(3)(4) 32.20 which exceeds the amount received in fiscal year 2000 shall be 32.21 subject to the budget requirements in subdivision 1a; and 32.22(5)(6) for a member district of a multidistrict 32.23 integration collaborative that files a plan with the 32.24 commissioner, but is not contiguous to a racially isolated 32.25 district, integration revenue equals the amount defined in 32.26 clause(4)(5). 32.27[EFFECTIVE DATE.] This section is effective the day 32.28 following final enactment for revenue for fiscal year 2003. 32.29 Sec. 2. Minnesota Statutes 2001 Supplement, section 32.30 126C.40, subdivision 1, is amended to read: 32.31 Subdivision 1. [TO LEASE BUILDING OR LAND.] (a) Whenaan 32.32 independent or a special school district or a group of 32.33 independent or special school districts finds it economically 32.34 advantageous to rent or lease a building or land for any 32.35 instructional purposes or for school storage or furniture 32.36 repair, and it determines that the operating capital revenue 33.1 authorized under section 126C.10, subdivision 13, is 33.2 insufficient for this purpose, it may apply to the commissioner 33.3 for permission to make an additional capital expenditure levy 33.4 for this purpose. An application for permission to levy under 33.5 this subdivision must contain financial justification for the 33.6 proposed levy, the terms and conditions of the proposed lease, 33.7 and a description of the space to be leased and its proposed use. 33.8 (b) The criteria for approval of applications to levy under 33.9 this subdivision must include: the reasonableness of the price, 33.10 the appropriateness of the space to the proposed activity, the 33.11 feasibility of transporting pupils to the leased building or 33.12 land, conformity of the lease to the laws and rules of the state 33.13 of Minnesota, and the appropriateness of the proposed lease to 33.14 the space needs and the financial condition of the district. 33.15 The commissioner must not authorize a levy under this 33.16 subdivision in an amount greater than the cost to the district 33.17 of renting or leasing a building or land for approved purposes. 33.18 The proceeds of this levy must not be used for custodial or 33.19 other maintenance services. A district may not levy under this 33.20 subdivision for the purpose of leasing or renting a 33.21 district-owned building or site to itself. 33.22 (c) For agreements finalized after July 1, 1997, a district 33.23 may not levy under this subdivision for the purpose of leasing: 33.24 (1) a newly constructed building used primarily for regular 33.25 kindergarten, elementary, or secondary instruction; or (2) a 33.26 newly constructed building addition or additions used primarily 33.27 for regular kindergarten, elementary, or secondary instruction 33.28 that contains more than 20 percent of the square footage of the 33.29 previously existing building. 33.30 (d) Notwithstanding paragraph (b), a district may levy 33.31 under this subdivision for the purpose of leasing or renting a 33.32 district-owned building or site to itself only if the amount is 33.33 needed by the district to make payments required by a lease 33.34 purchase agreement, installment purchase agreement, or other 33.35 deferred payments agreement authorized by law, and the levy 33.36 meets the requirements of paragraph (c). A levy authorized for 34.1 a district by the commissioner under this paragraph may be in 34.2 the amount needed by the district to make payments required by a 34.3 lease purchase agreement, installment purchase agreement, or 34.4 other deferred payments agreement authorized by law, provided 34.5 that any agreement include a provision giving the school 34.6 districts the right to terminate the agreement annually without 34.7 penalty. 34.8 (e) The total levy under this subdivision for a district 34.9 for any year must not exceed $100 times the resident pupil units 34.10 for the fiscal year to which the levy is attributable. 34.11 (f) For agreements for which a review and comment have been 34.12 submitted to the department of children, families, and learning 34.13 after April 1, 1998, the term "instructional purpose" as used in 34.14 this subdivision excludes expenditures on stadiums. 34.15 (g) The commissioner of children, families, and learning 34.16 may authorize a school district to exceed the limit in paragraph 34.17 (e) if the school district petitions the commissioner for 34.18 approval. The commissioner shall grant approval to a school 34.19 district to exceed the limit in paragraph (e) for not more than 34.20 five years if the district meets the following criteria: 34.21 (1) the school district has been experiencing pupil 34.22 enrollment growth in the preceding five years; 34.23 (2) the purpose of the increased levy is in the long-term 34.24 public interest; 34.25 (3) the purpose of the increased levy promotes colocation 34.26 of government services; and 34.27 (4) the purpose of the increased levy is in the long-term 34.28 interest of the district by avoiding over construction of school 34.29 facilities. 34.30 (h) A school district that is a member of an intermediate 34.31 school district may include in its authority under this section 34.32 the costs associated with leases of administrative and classroom 34.33 space for intermediate school district programs. This authority 34.34 must not exceed $25 times the adjusted marginal cost pupil units 34.35 of the member districts. This authority is in addition to any 34.36 other authority authorized under this section. 35.1 (i) In addition to the allowable capital levies in 35.2 paragraph (a), a district that is a member of the "Total 35.3 Information for Educational Systems" data processing joint 35.4 board, that finds it economically advantageous to enter into a 35.5 lease purchase agreement for a building for a group of school 35.6 districts or special school districts for staff development 35.7 purposes, may levy for its portion of lease costs attributed to 35.8 the district within the total levy limit in paragraph (e). 35.9[EFFECTIVE DATE.] This section is effective for revenue for 35.10 fiscal year 2003. 35.11 Sec. 3. Minnesota Statutes 2001 Supplement, section 35.12 126C.43, subdivision 3, is amended to read: 35.13 Subd. 3. [TAX LEVY FOR JUDGMENT.] A district may levy the 35.14 amounts necessary to pay judgments against the district under 35.15 section 123B.25 that became final after the date the district 35.16 certified its proposed levy in the previous year. With the 35.17 approval of the commissioner, a district may spread this levy 35.18 over a period not to exceed three years. Upon approval through 35.19 the adoption of a resolution by each of an intermediate 35.20 district's member school district boards, a member school 35.21 district may include its proportionate share of the costs of a 35.22 judgment against an intermediate school district that became 35.23 final under section 123B.25 after the date that the earliest 35.24 member school district certified its proposed levy in the 35.25 previous year. With the approval of the commissioner, an 35.26 intermediate school district member school district may spread 35.27 this levy over a period not to exceed three years. 35.28[EFFECTIVE DATE.] This section is effective for taxes 35.29 payable in 2003 and later. 35.30 Sec. 4. Minnesota Statutes 2000, section 126C.44, is 35.31 amended to read: 35.32 126C.44 [CRIME-RELATED COSTSSAFE SCHOOLS LEVY.] 35.33 Each district may make a levy on all taxable property 35.34 located within the district for the purposes specified in this 35.35 section. The maximum amount which may be levied for all costs 35.36 under this section shall be equal to$11$30 multiplied by the 36.1 district's adjusted marginal cost pupil units for the school 36.2 year. The proceeds of the levy must be used for directly 36.3 funding the following purposes or for reimbursing the cities and 36.4 counties who contract with the district for the following 36.5 purposes: (1) to pay the costs incurred for the salaries, 36.6 benefits, and transportation costs of peace officers and 36.7 sheriffs for liaison in services in the district's schools; (2) 36.8 to pay the costs for a drug abuse prevention program as defined 36.9 in section 609.101, subdivision 3, paragraph (e), in the 36.10 elementary schools; (3) to pay the costs for a gang resistance 36.11 education training curriculum in the district's schools; (4) to 36.12 pay the costs for security in the district's schools and on 36.13 school property; or (5) to pay the costs for other crime 36.14 prevention, drug abuse, student and staff safety, and violence 36.15 prevention measures taken by the school district. The district 36.16 must initially attempt to contract for services to be provided 36.17 by peace officers or sheriffs with the police department of each 36.18 city or the sheriff's department of the county within the 36.19 district containing the school receiving the services. If a 36.20 local police department or a county sheriff's department does 36.21 not wish to provide the necessary services, the district may 36.22 contract for these services with any other police or sheriff's 36.23 department located entirely or partially within the school 36.24 district's boundaries. The levy authorized under this section 36.25 is not included in determining the school district's levy 36.26 limitations. 36.27[EFFECTIVE DATE.] This section is effective for revenue for 36.28 levies payable in 2003 and thereafter. 36.29 Sec. 5. [STAFF DEVELOPMENT LEVY.] 36.30 For taxes payable in 2003 only, each school district that 36.31 reallocates staff development revenue under article 4, section 36.32 12, shall levy an equivalent amount and dedicate the revenue for 36.33 staff development purposes under Minnesota Statutes, section 36.34 122A.61, subdivision 1. 36.35[EFFECTIVE DATE.] This section is effective for taxes 36.36 payable in 2003 and shall be recognized in fiscal year 2003. 37.1 Sec. 6. [DISABLED ACCESS LEVY AUTHORITY; WESTBROOK-WALNUT 37.2 GROVE.] 37.3 Notwithstanding the time limit in Minnesota Statutes, 37.4 section 123B.58, subdivision 3, independent school district No. 37.5 2898, Westbrook-Walnut Grove, may levy its remaining disabled 37.6 access levy authority over five or fewer years. 37.7[EFFECTIVE DATE.] This section is effective the day 37.8 following final enactment. 37.9 Sec. 7. [DISABLED ACCESS LEVY AUTHORITY; PINE CITY.] 37.10 Notwithstanding the time limits in Minnesota Statutes, 37.11 section 123B.58, subdivision 3, independent school district No. 37.12 578, Pine City, may levy its remaining disabled access levy 37.13 authority over five or fewer years. 37.14[EFFECTIVE DATE.] This section is effective the day 37.15 following final enactment. 37.16 Sec. 8. [BLUE EARTH AREA PUBLIC SCHOOLS.] 37.17 In addition to other levies, for taxes payable in 2003 37.18 through 2012, independent school district No. 2860, Blue Earth 37.19 Area public school, may levy up to $46,000 each year for up to 37.20 ten years for the costs associated with the replacement of a 37.21 boiler at Blue Earth Area elementary/junior high. 37.22 Sec. 9. [LEVY; ELY.] 37.23 Independent school district No. 696, Ely, may levy up to 37.24 $100,000 in taxes payable in 2003 for the development and 37.25 completion of the boundary waters wilderness program. 37.26[EFFECTIVE DATE.] This section is effective for taxes 37.27 payable in 2003. 37.28 ARTICLE 6 37.29 HIGHER EDUCATION 37.30 Section 1. Laws 2002, chapter 220, article 5, section 1, 37.31 is amended to read: 37.32 Section 1. [HIGHER EDUCATION APPROPRIATIONS.] 37.33 The dollar amounts in the columns marked "APPROPRIATIONS" 37.34 are added to or, if shown in parentheses, are subtracted from 37.35 the appropriations in Laws 2001, First Special Session chapter 37.36 1, or other law to the specified agencies. The appropriations 38.1 are from the general fund or any other named fund and are 38.2 available for the fiscal years indicated for each purpose. The 38.3 figure 2002 or 2003 means that the addition to or subtraction 38.4 from the appropriations listed under the figure are for the 38.5 fiscal year ending June 30, 2002, or June 30, 2003, 38.6 respectively. If only one figure is shown in the text for a 38.7 specified purpose, the addition or subtraction is for 2002 38.8 unless the context intends another fiscal year. 38.9 SUMMARY BY FUND 38.10 2002 2003 TOTAL 38.11 General $( 2,744,000)$(47,256,000)$(50,000,000)38.12 2,256,000 (47,256,000) (45,000,000) 38.13 SUMMARY BY AGENCY - ALL FUNDS 38.14 2002 2003 TOTAL 38.15 Higher Education 38.16 Services Office $( 2,744,000)$ ( 931,000) $( 3,675,000)38.17 2,256,000 1,325,000 38.18 Board of Trustees of 38.19 the Minnesota State Colleges 38.20 and Universities $ (22,692,000) $ (22,692,000) 38.21 Board of Regents of the 38.22 University of Minnesota $ (23,633,000) $ (23,633,000) 38.23 APPROPRIATIONS 38.24 Available for the Year 38.25 Ending June 30 38.26 2002 2003 38.27 Sec. 2. Laws 2002, chapter 220, article 5, section 2, 38.28 subdivision 1, is amended to read: 38.29 Subdivision 1. Total 38.30 Appropriation Changes(2,744,000)( 931,000)( 3,675,000)38.31 2,256,000 1,325,000 38.32 Sec. 3. Laws 2002, chapter 220, article 5, section 2, 38.33 subdivision 2, is amended to read: 38.34 Subd. 2. State Grants1,460,0002,995,0004,455,00038.35 6,460,000 9,455,000 38.36 Notwithstanding Laws 2001, First 38.37 Special Session chapter 1, article 1, 38.38 section 2, subdivision 2, savings in 38.39 the state grant program in fiscal year 38.40 2003 resulting from any increase in the 38.41 maximum federal grant over $3,750 or 38.42 from any other source, after use to 38.43 provide additional decreases in the 38.44 family responsibility for independent 39.1 students as provided by law, shall 39.2 remain in the state grant program. 39.3 A reduction of $75,000 each year is 39.4 made to appropriations for the summer 39.5 scholarship program. A reduction of 39.6 $125,000 each year is made to 39.7 appropriations for the national service 39.8 scholars program. The appropriation 39.9 for the advanced placement scholarship 39.10 is reduced by $75,000 in fiscal year 39.11 2003. 39.12 Sec. 4. [FULL STATE GRANT AWARDS.] 39.13 The higher education services office shall transfer to the 39.14 state grant appropriation from the work study appropriation and 39.15 notwithstanding Minnesota Statutes, section 136A.125, 39.16 subdivision 4c, from the child care grant appropriation in Laws 39.17 2001, First Special Session, chapter 1, article 1, section 2, 39.18 the amount necessary, if any, to make full state grant awards in 39.19 fiscal year 2003. 39.20 ARTICLE 7 39.21 ENVIRONMENT AND NATURAL RESOURCES 39.22 Section 1. Minnesota Statutes 2000, section 115A.557, 39.23 subdivision 1, is amended to read: 39.24 Subdivision 1. [DISTRIBUTION; FORMULA.] Any funds 39.25 appropriated to the director for the purpose of distribution to 39.26 counties under this section must be distributed each fiscal year 39.27 by the director based on population, except a county may not 39.28 receive less than $55,000 in a fiscal year. If the amount 39.29 available for distribution under this section is less than the 39.30 amount available in fiscal year 2001, the minimum county payment 39.31 under this section is reduced proportionately. For purposes of 39.32 this subdivision, "population" has the definition given in 39.33 section 477A.011, subdivision 3. A county that participates in 39.34 a multicounty district that manages solid waste and that has 39.35 responsibility for recycling programs as authorized in section 39.36 115A.552, must pass through to the districts funds received by 39.37 the county in excess of the$55,000 annual baseminimum county 39.38 payment under this section in proportion to the population of 39.39 the county served by that district. 39.40 Sec. 2. Laws 2002, chapter 220, article 8, section 15, is 40.1 amended to read: 40.2 Sec. 15. [INCREASE TO WATER QUALITY PERMIT FEES.] 40.3 (a) The pollution control agency shall collect water 40.4 quality permit application and annual fees that reflect the fees 40.5 in Minnesota Rules, part 7002.0310, increased to the amounts 40.6 described in paragraphs (b) to (g). 40.7 (b) The application fee for individual permits, general 40.8 permits, and general industrial stormwater permits is $240. 40.9 (c) The annual fees for individual National Pollutant 40.10 Discharge Elimination System permits for major municipal 40.11 facilities are as follows: 40.12 Design Flow in 40.13 Million Gallons Per Day Annual Fee 40.15 50 and over$175,750$175,500 40.16 20 to 49.99 $40,350 40.17 5 to 19.99 $14,350 40.18 Up to 4.99 $5,900 40.19 (d) The annual fees for individual National Pollutant 40.20 Discharge Elimination System permits for major nonmunicipal 40.21 facilities are as follows: 40.22 Design Flow in 40.23 Million Gallons Per Day Annual Fee 40.25 20 to 49.99 $44,200 40.26 5 to 19.99 $18,250 40.27 Up to 4.99 $8,450 40.28 Cooling or mine pit 40.29 dewatering (any flow) $16,900 40.30 (e) The annual fees for individual National Pollutant 40.31 Discharge Elimination System and State Disposal System permits 40.32 for nonmajor municipal facilities with design flows greater than 40.33 0.100 million gallons per day are $1,450. 40.34 (f) The annual fees for general industrial stormwater 40.35 permits are $280. 40.36 (g) The annual fees for general National Pollutant 40.37 Discharge Elimination System and State Disposal System permits 40.38 are $345. 40.39 (h) The application and annual fees are not increased for 40.40 general construction stormwater permits and sanitary sewer 40.41 extension permits. The annual fees are not increased for 40.42 National Pollutant Discharge Elimination System and State 41.1 Disposal System permits regulating municipal nonmajors with 41.2 facility design flow of 0 to .100, sewage sludge landspreading 41.3 facilities, and nonmajor nonmunicipal facilities. 41.4 (i) The increased permit fees are effective July 1, 2002. 41.5 The agency shall adopt amended water quality permit fee rules 41.6 incorporating the permit fee increases in this subdivision under 41.7 Minnesota Statutes, section 14.389. The pollution control 41.8 agency shall begin collecting the increased permit fees on July 41.9 1, 2002, even if the rule adoption process has not been 41.10 initiated or completed. Notwithstanding Minnesota Statutes, 41.11 section 14.18, subdivision 2, the increased permit fees 41.12 reflecting the permit fee increases in this section and the rule 41.13 amendments incorporating those permit fee increases do not 41.14 require further legislative approval. 41.15 Sec. 3. Laws 2002, chapter 220, article 9, section 2, 41.16 subdivision 4, is amended to read: 41.17 Subd. 4. Administration and 41.18 Financial Assistance 41.19 (5,000) (489,000) 41.20 $5,000 the first year and $2,000 the 41.21 second year of this reduction are from 41.22 family farm security interest payment 41.23 adjustments. 41.24$175,000 the second year of this41.25reduction is from grants to agriculture41.26information centers.41.27 $11,500 the second year of this 41.28 reduction is from the appropriation for 41.29 the Seaway Port Authority of Duluth. 41.30 Base funding for the administration and 41.31 financial assistance program is 41.32 $4,344,000 for the fiscal year 41.33 beginning July 1, 2003. 41.34 Sec. 4. [EFFECTIVE DATE.] 41.35 This article is effective the day following final enactment. 41.36 ARTICLE 8 41.37 PUBLIC SAFETY 41.38 Section 1. Minnesota Statutes 2000, section 13.871, 41.39 subdivision 5, as amended by Laws 2002, chapter 220, article 7, 41.40 section 6, is amended to read: 41.41 Subd. 5. [CRIME VICTIMS.] (a) [CRIME VICTIM NOTICE OF 42.1 RELEASE.] Data on crime victims who request notice of an 42.2 offender's release are classified under section 611A.06. 42.3 (b) [SEX OFFENDER HIV TESTS.] Results of HIV tests of sex 42.4 offenders under section 611A.19, subdivision 2, are classified 42.5 under that section. 42.6 (c) [BATTERED WOMEN.] Data on battered women maintained by 42.7 grantees for emergency shelter and support services for battered 42.8 women are governed by section 611A.32, subdivision 5. 42.9 (d) [VICTIMS OF DOMESTIC ABUSE.] Data on battered women and 42.10 victims of domestic abuse maintained by grantees and recipients 42.11 of per diem payments for emergency shelter for battered women 42.12 and support services for battered women and victims of domestic 42.13 abuse are governed by sections 611A.32, subdivision 5, and 42.14 611A.371, subdivision 3. 42.15 (e) [CRIME VICTIM CLAIMS FOR REPARATIONS.] Claims and 42.16 supporting documents filed by crime victims seeking reparations 42.17 are classified under section 611A.57, subdivision 6. 42.18 (f) [CRIME VICTIMOVERSIGHT ACTOMBUDSMAN.] Data 42.19 maintained by thecommissioner of public safety under thecrime 42.20 victimOversight Actombudsman are classified under section 42.21 611A.74, subdivision 2. 42.22 Sec. 2. Minnesota Statutes 2000, section 135A.15, 42.23 subdivision 1, as amended by Laws 2002, chapter 220, article 7, 42.24 section 8, is amended to read: 42.25 Subdivision 1. [POLICY REQUIRED.] The board of trustees of 42.26 the Minnesota state colleges and universities shall, and the 42.27 University of Minnesota is requested to, adopt a clear, 42.28 understandable written policy on sexual harassment and sexual 42.29 violence that informs victims of their rights under the crime 42.30 victims bill of rights, including the right to assistance from 42.31 the crime victims reparations board and thecommissioner of42.32public safetyoffice of the crime victim ombudsman. The policy 42.33 must apply to students and employees and must provide 42.34 information about their rights and duties. The policy must 42.35 apply to criminal incidents occurring on property owned by the 42.36 post-secondary system or institution in which the victim is a 43.1 student or employee of that system or institution. It must 43.2 include procedures for reporting incidents of sexual harassment 43.3 or sexual violence and for disciplinary actions against 43.4 violators. During student registration, each technical college, 43.5 community college, or state university shall, and the University 43.6 of Minnesota is requested to, provide each student with 43.7 information regarding its policy. A copy of the policy also 43.8 shall be posted at appropriate locations on campus at all 43.9 times. Each private post-secondary institution that is an 43.10 eligible institution as defined in section 136A.101, subdivision 43.11 4, must adopt a policy that meets the requirements of this 43.12 section. 43.13 Sec. 3. Minnesota Statutes 2001 Supplement, section 43.14 256.022, subdivision 1, as amended by Laws 2002, chapter 220, 43.15 article 7, section 11, is amended to read: 43.16 Subdivision 1. [CREATION.] The commissioner of human 43.17 services shall establish a review panel for purposes of 43.18 reviewing investigating agency determinations regarding 43.19 maltreatment of a child in a facility in response to requests 43.20 received under section 626.556, subdivision 10i, paragraph (b). 43.21 The review panel consists of the commissioners of health; human 43.22 services; children, families, and learning;public safety;and 43.23 corrections; the ombudsman for crime victims; and the ombudsman 43.24 for mental health and mental retardation; or their designees. 43.25 Sec. 4. Minnesota Statutes 2000, section 611A.371, 43.26 subdivision 1, as amended by Laws 2002, chapter 220, article 7, 43.27 section 16, is amended to read: 43.28 Subdivision 1. [PURPOSE.] The purpose of thegrantper 43.29 diem program is to provide reimbursement in a timely, efficient 43.30 manner to local programs for the reasonable and necessary costs 43.31 of providing battered women and their children with food, 43.32 lodging, and safety.GrantPer diem funding may not be used for 43.33 other purposes. 43.34 Sec. 5. Minnesota Statutes 2001 Supplement, section 43.35 611A.372, as amended by Laws 2002, chapter 220, article 7, 43.36 section 17, is amended to read: 44.1 611A.372 [DUTIES OF DIRECTOR.] 44.2 In addition to any other duties imposed by law, the 44.3 director, with the approval of the commissioner of public 44.4 safety, shall: 44.5 (1) supervise the administration ofgrantper diem payments 44.6 to designated shelter facilities; 44.7 (2) collect data on shelter facilities; 44.8 (3) conduct an annual evaluation of thegrantper diem 44.9 program; 44.10 (4) report to the governor and the legislature on the need 44.11 for emergency secure shelter; 44.12 (5) develop an application process for shelter facilities 44.13 to follow in seeking reimbursement under thegrantper diem 44.14 program; and 44.15 (6) adopt rules to implement and administer sections 44.16 611A.37 to 611A.375. 44.17 Sec. 6. Minnesota Statutes 2000, section 611A.373, 44.18 subdivision 1, as amended by Laws 2002, chapter 220, article 7, 44.19 section 18, is amended to read: 44.20 Subdivision 1. [PAYMENT REQUESTS.]Payments to designated44.21shelter facilities must be in the form of a grant.Designated 44.22 shelter facilities may submit requests for payment monthly based 44.23 ontheir expenses. The process for the submission of payments44.24and for the submission of requests may be established by the44.25directorthe number of persons housed. Upon approval of the 44.26 request for payment by the center, payments shall be made 44.27 directly to designated shelter facilities fromgrantper diem 44.28 funds on behalf of women and their children who reside in the 44.29 shelter facility. Payments made to a designated shelter 44.30 facility must not exceed thegrantannual reserve amount for 44.31 that facility unless approved by the director. These payments 44.32 must not affect the eligibility of individuals who reside in 44.33 shelter facilities for public assistance benefits, except when 44.34 required by federal law or regulation. 44.35 Sec. 7. Minnesota Statutes 2000, section 611A.373, 44.36 subdivision 2, as amended by Laws 2002, chapter 220, article 7, 45.1 section 18, is amended to read: 45.2 Subd. 2. [RESERVEGRANTAMOUNT.] The center shall 45.3 calculatethe grantannually the reserve amount for each 45.4 designated shelter facility. This calculation may be based upon 45.5 program type, average occupancy rates, and licensed capacity 45.6 limits. The total of allgrantreserve amounts shall not exceed 45.7 the legislative per diem appropriation. 45.8 Sec. 8. Minnesota Statutes 2000, section 611A.72, as 45.9 amended by Laws 2002, chapter 220, article 7, section 19, is 45.10 amended to read: 45.11 611A.72 [CITATION.] 45.12 Sections 611A.72 to 611A.74 may be cited as the "Crime 45.13 VictimOversightOmbudsman Act." 45.14 Sec. 9. Minnesota Statutes 2000, section 611A.73, 45.15 subdivision 2, as amended by Laws 2002, chapter 220, article 7, 45.16 section 20, is amended to read: 45.17 Subd. 2. [APPROPRIATE AUTHORITY.] "Appropriate authority" 45.18 includes anyone who is the subject of a complaintunder sections45.19611A.72 to 611A.74to thecommissionercrime victim ombudsman or 45.20 anyone within the agency who is in a supervisory position with 45.21 regard to one who is the subject of a complaintunder sections45.22611A.72 to 611A.74. 45.23 Sec. 10. Minnesota Statutes 2001 Supplement, section 45.24 611A.74, subdivision 1, as amended by Laws 2002, chapter 220, 45.25 article 7, section 22, is amended to read: 45.26 Subdivision 1. [AUTHORITY UNDER THIS ACTCREATION.] The 45.27 office of crime victim ombudsman for Minnesota is created. The 45.28 ombudsman shall be appointed by the governor, shall serve in the 45.29 unclassified service at the pleasure of the governor, and shall 45.30 be selected without regard to political affiliation. No person 45.31 may serve as ombudsman while holding any other public office. 45.32 The ombudsman is directly accountable to the governor and must 45.33 periodically report to the commissioner of public safety on the 45.34 operations and activities of the office. Thecommissioner45.35 ombudsman shall have the authorityunder sections 611A.72 to45.36611A.74to investigate decisions, acts, and other matters of the 46.1 criminal justice system so as to promote the highest attainable 46.2 standards of competence, efficiency, and justice for crime 46.3 victims in the criminal justice system. 46.4 Sec. 11. Minnesota Statutes 2000, section 611A.74, 46.5 subdivision 2, as amended by Laws 2002, chapter 220, article 7, 46.6 section 23, is amended to read: 46.7 Subd. 2. [DUTIES.] Thecommissionercrime victim ombudsman 46.8 may investigate complaints concerning possible violation of the 46.9 rights of crime victims or witnesses provided under this 46.10 chapter, the delivery of victim services by victim assistance 46.11 programs, the administration of the crime victims reparations 46.12 act, and other complaints of mistreatment by elements of the 46.13 criminal justice system or victim assistance programs. 46.14 Thecommissionerombudsman shall act as a liaison, when 46.15 thecommissionerombudsman deems necessary, between agencies, 46.16 either in the criminal justice system or in victim assistance 46.17 programs, and victims and witnesses. Thecommissionerombudsman 46.18 may be concerned with activities that strengthen procedures and 46.19 practices which lessen the risk that objectionable 46.20 administrative acts will occur. Thecommissionerombudsman must 46.21 be made available through the use of a toll-free telephone 46.22 number and shall answer questions concerning the criminal 46.23 justice system and victim services put to thecommissioner46.24 ombudsman by victims and witnesses in accordance with 46.25 thecommissioner'sombudsman's knowledge of the facts or law, 46.26 unless the information is otherwise restricted. The 46.27commissionerombudsman shall establish a procedure for referral 46.28 to the crime victim crisis centers, the crime victims 46.29 reparations board, and other victim assistance programs when 46.30 services are requested by crime victims or deemed necessary by 46.31 thecommissionerombudsman. 46.32 Thecommissioner'sombudsman's files are confidential data 46.33 as defined in section 13.02, subdivision 3, during the course of 46.34 an investigation or while the files are active. Upon completion 46.35 of the investigation or when the files are placed on inactive 46.36 status, they are private data on individuals as defined in 47.1 section 13.02, subdivision 12. 47.2 Sec. 12. Minnesota Statutes 2000, section 611A.74, 47.3 subdivision 3, as amended by Laws 2002, chapter 220, article 7, 47.4 section 24, is amended to read: 47.5 Subd. 3. [POWERS.] Thecommissionercrime victim ombudsman 47.6 has those powers necessary to carry out the duties set out in 47.7 subdivision 2, including: 47.8 (a) Thecommissionerombudsman may investigate, with or 47.9 without a complaint, any action of an element of the criminal 47.10 justice system or a victim assistance program included in 47.11 subdivision 2. 47.12 (b) Thecommissionerombudsman may request and shall be 47.13 given access to information and assistance thecommissioner47.14 ombudsman considers necessary for the discharge of 47.15 responsibilities. Thecommissionerombudsman may inspect, 47.16 examine, and be provided copies of records and documents of all 47.17 elements of the criminal justice system and victim assistance 47.18 programs. Thecommissionerombudsman may request and shall be 47.19 given access to police reports pertaining to juveniles and 47.20 juvenile delinquency petitions, notwithstanding section 260B.171 47.21 or 260C.171. Any information received by thecommissioner47.22 ombudsman retains its data classification under chapter 13 while 47.23 in thecommissioner'sombudsman's possession. Juvenile records 47.24 obtained under this subdivision may not be released to any 47.25 person. 47.26 (c) Thecommissionerombudsman may prescribe the methods by 47.27 which complaints are to be made, received, and acted upon; may 47.28 determine the scope and manner of investigations to be made; and 47.29 subject to the requirements of sections 611A.72 to 611A.74, may 47.30 determine the form, frequency, and distribution ofcommissioner47.31 ombudsman conclusions, recommendations, and proposals. 47.32 (d) After completing investigation of a complaint, the 47.33commissionerombudsman shall inform in writing the complainant, 47.34 the investigated person or entity, and other appropriate 47.35 authorities of the action taken. If the complaint involved the 47.36 conduct of an element of the criminal justice system in relation 48.1 to a criminal or civil proceeding, thecommissioner's48.2 ombudsman's findings shall be forwarded to the court in which 48.3 the proceeding occurred. 48.4 (e) Before announcing a conclusion or recommendation that 48.5 expressly or impliedly criticizes an administrative agency or 48.6 any person, thecommissionerombudsman shall consult with that 48.7 agency or person. 48.8 Sec. 13. Minnesota Statutes 2000, section 611A.74, 48.9 subdivision 4, as amended by Laws 2002, chapter 220, article 7, 48.10 section 25, is amended to read: 48.11 Subd. 4. [NO COMPELLED TESTIMONY.] Neither the 48.12commissionerombudsman nor any member of thecommissioner's48.13 ombudsman's staff may be compelled to testify or produce 48.14 evidence in any judicial or administrative proceeding with 48.15 respect to matters involving the exercise of official 48.16 dutiesunder sections 611A.72 to 611A.74except as may be 48.17 necessary to enforce the provisions of this section. 48.18 Sec. 14. Minnesota Statutes 2000, section 611A.74, 48.19 subdivision 5, as amended by Laws 2002, chapter 220, article 7, 48.20 section 26, is amended to read: 48.21 Subd. 5. [RECOMMENDATIONS.] (a) On finding a complaint 48.22 valid after duly considering the complaint and whatever material 48.23 thecommissionerombudsman deems pertinent, thecommissioner48.24 ombudsman may recommend action to the appropriate authority. 48.25 (b) If thecommissionerombudsman makes a recommendation to 48.26 an appropriate authority for action, the authority shall, within 48.27 a reasonable time period, but not more than 30 days, inform the 48.28commissionerombudsman about the action taken or the reasons for 48.29 not complying with the recommendation. 48.30 (c) Thecommissionerombudsman may publish conclusions and 48.31 suggestions by transmitting them to the governor, the 48.32 legislature or any of its committees, the press, and others who 48.33 may be concerned. When publishing an opinion adverse to an 48.34 administrative agency, thecommissionerombudsman shall include 48.35 any statement the administrative agency may have made to the 48.36commissionerombudsman by way of explaining its past 49.1 difficulties or its present rejection of thecommissioner's49.2 ombudsman's proposals. 49.3 Sec. 15. Minnesota Statutes 2000, section 611A.74, 49.4 subdivision 6, as amended by Laws 2002, chapter 220, article 7, 49.5 section 27, is amended to read: 49.6 Subd. 6. [REPORTS.] In addition to whatever reports the 49.7commissionerombudsman may make from time to time, the 49.8commissionerombudsman shall biennially report to the 49.9 legislature and to the governor concerning the exercise of 49.10 thecommissioner'sombudsman's functionsunder sections 611A.7249.11to 611A.74during the preceding biennium. The biennial report 49.12 is due on or before the beginning of the legislative session 49.13 following the end of the biennium. 49.14 Sec. 16. Laws 2001, First Special Session chapter 8, 49.15 article 11, section 14, as amended by Laws 2002, chapter 220, 49.16 article 6, section 14, is amended to read: 49.17 Sec. 14. [FELONY DWI STUDY.] 49.18 ByJanuaryJuly 15, 2004, and each year thereafter through 49.19JanuaryJuly 15, 2007, the commissioner of corrections must 49.20 report to the chairs and ranking minority members of the house 49.21 and senate committees having jurisdiction over criminal justice 49.22 and judiciary finance issues on the implementation and effects 49.23 of the felony level driving while impaired offense. The report 49.24 must include the following information on felony level driving 49.25 while impaired offenses: 49.26 (1) the number of persons convicted; 49.27 (2) the month and county of conviction; 49.28 (3) the offenders' ages and gender; 49.29 (4) the offenders' prior impaired driving histories and 49.30 prior criminal histories; 49.31 (5) the number of trials taken to verdict, separating out 49.32 cases tried to a judge versus cases tried to a jury, and the 49.33 number of convictions for each; 49.34 (6) the number of offenders incarcerated locally and the 49.35 term of incarceration; 49.36 (7) the number placed on probation and the length of the 50.1 probation; 50.2 (8) the number for whom probation is revoked, the reasons 50.3 for revocation, and the consequences imposed; 50.4 (9) the number given an executed prison sentence upon 50.5 conviction and the length of the sentence; 50.6 (10) the number given an executed prison sentence upon 50.7 revocation of probation and the length of sentence; 50.8 (11) the number who successfully complete treatment in 50.9 prison; 50.10 (12) the number placed on intensive supervision following 50.11 release from incarceration; 50.12 (13) the number who violate supervised release and the 50.13 consequences imposed; 50.14 (14) per diem costs, including treatment costs, for 50.15 offenders incarcerated under the felony sentence provisions; and 50.16 (15) any other information the commissioner deems relevant 50.17 to estimating future costs. 50.18 The commissioner of corrections shall share preliminary 50.19 information with the commissioner of administration for the 50.20 purpose of issuance of a request for proposals under section 6. 50.21 Sec. 17. Laws 2001, First Special Session chapter 8, 50.22 article 11, section 17, is amended to read: 50.23 Sec. 17. [EFFECTIVE DATE.] 50.24 Sections 1 to 11, 13, and 14 are effectiveAugustFebruary 50.25 1,20022003, and apply to crimes committed on or after that 50.26 date. However, violations occurring beforeAugustFebruary 1, 50.2720022003, that are listed in Minnesota Statutes, section 50.28 169A.03, subdivisions 20 and 21, are considered qualified prior 50.29 impaired driving incidents for purposes of this act. The 50.30 remaining sections are effective July 1, 2001. 50.31 Sec. 18. Laws 2001, First Special Session chapter 9, 50.32 article 19, section 15, is amended to read: 50.33 Sec. 15. [FELONY DWI STUDY.] 50.34 ByJanuaryJuly 15, 2004, and each year thereafter through 50.35JanuaryJuly 15, 2007, the commissioner of corrections must 50.36 report to the chairs and ranking minority members of the house 51.1 and senate committees having jurisdiction over criminal justice 51.2 and judiciary finance issues on the implementation and effects 51.3 of the felony level driving while impaired offense. The report 51.4 must include the following information on felony level driving 51.5 while impaired offenses: 51.6 (1) the number of persons convicted; 51.7 (2) the number of trials taken to verdict, separating out 51.8 cases tried to a judge versus cases tried to a jury, and the 51.9 number of convictions for each; 51.10 (3) the number of offenders incarcerated locally and the 51.11 term of incarceration; 51.12 (4) the number placed on probation and the length of the 51.13 probation; 51.14 (5) the number for whom probation is revoked, the reasons 51.15 for revocation, and the consequences imposed; 51.16 (6) the number given an executed prison sentence upon 51.17 conviction and the length of the sentence; 51.18 (7) the number given an executed prison sentence upon 51.19 revocation of probation and the length of sentence; 51.20 (8) the number who successfully complete treatment in 51.21 prison; 51.22 (9) the number placed on intensive supervision following 51.23 release from incarceration; 51.24 (10) the number who violate supervised release and the 51.25 consequences imposed; and 51.26 (11) any other information the commissioner deems relevant 51.27 to estimating future costs. 51.28 Sec. 19. Laws 2001, First Special Session chapter 9, 51.29 article 19, section 16, is amended to read: 51.30 Sec. 16. [REPORT ON INSURANCE COVERAGE.] 51.31 ByFebruaryAugust 1, 2004, the commissioner of corrections 51.32 shall report to the chairs of the senate and house committees 51.33 with jurisdiction over criminal justice funding on the number of 51.34 cases in which a felony DWI offender had private health 51.35 insurance coverage for chemical dependency treatment, and the 51.36 results of the commissioner's attempts to obtain coverage for 52.1 this treatment under Minnesota Statutes, section 62Q.137. 52.2 Sec. 20. Laws 2001, First Special Session chapter 9, 52.3 article 19, section 17, is amended to read: 52.4 Sec. 17. [EFFECTIVE DATE.] 52.5 Sections 1 to 12 and 14 to 16 are effectiveAugustFebruary 52.6 1,20022003, and apply to crimes committed on or after that 52.7 date. However, violations occurring beforeAugustFebruary 1, 52.820022003, that are listed in Minnesota Statutes, section 52.9 169A.03, subdivisions 20 and 21, are considered qualified prior 52.10 impaired driving incidents for purposes of this act. Section 13 52.11 is effective July 1, 2001. 52.12 Sec. 21. Laws 2002, chapter 220, article 6, section 1, is 52.13 amended to read: 52.14 Section 1. [APPROPRIATIONS/REDUCTIONS.] 52.15 The dollar amounts in the columns under "APPROPRIATIONS" 52.16 are added to or, if shown in parentheses, are subtracted from 52.17 the appropriations in Laws 2001, First Special Session chapters 52.18 8, 9, or other law to the specified agencies. The 52.19 appropriations are from the general fund or other named fund and 52.20 are available for the fiscal years indicated for each purpose. 52.21 The figure "2002" or "2003" means that the addition to or 52.22 subtraction from the appropriations listed under the figure are 52.23 for the fiscal year ending June 30, 2002, or June 30, 2003, 52.24 respectively. 52.25 2002 2003 52.26 APPROPRIATION REDUCTIONS (5,165,000)(11,489,000)52.27 (11,321,000) 52.28 Sec. 22. Laws 2002, chapter 220, article 7, section 1, is 52.29 amended to read: 52.30 Section 1. [TRANSPORTATION AND OTHER AGENCY APPROPRIATIONS.] 52.31 The dollar amounts in the columns marked "APPROPRIATIONS" 52.32 are added to or, if shown in parentheses, are subtracted from 52.33 the appropriations in Laws 2001, First Special Session chapter 52.34 8, 9, or other law to the specified agencies. The 52.35 appropriations are from the general fund or any other named fund 52.36 and are available for the fiscal years indicated for each 53.1 purpose. The figure 2002 or 2003 means that the addition to or 53.2 subtraction from the appropriations listed under the figure are 53.3 for the fiscal year ending June 30, 2002, or June 30, 2003, 53.4 respectively. If only one figure is shown in the text for a 53.5 specified purpose, the addition or subtraction is for 2002 53.6 unless the context intends another fiscal year. 53.7 SUMMARY BY FUND 53.8 2002 2003 TOTAL 53.9 APPROPRIATIONS 53.10 General $ (2,018,000) $(6,932,000)$(8,950,000)53.11 (5,921,000) (7,939,000) 53.12 TRANSFERS IN (2,705,000) (1,996,000) (4,701,000) 53.13 Sec. 23. Laws 2002, chapter 220, article 7, section 4, 53.14 subdivision 1, is amended to read: 53.15 Subdivision 1. Total Appropriation 53.16 Changes (2,018,000)(3,296,000)53.17 (2,696,000) 53.18 Sec. 24. Laws 2002, chapter 220, article 7, section 4, 53.19 subdivision 5, is amended to read: 53.20 Subd. 5. Crime Victims 53.21 Services Center (384,000)(1,368,000)53.22 ( 768,000) 53.23[SHELTER PER DIEMS.] $600,000 the53.24second year is a reduction in per diem53.25funding for shelters. The base for the53.26crime victim services center shall be53.27reduced by $600,000 in fiscal year 200453.28and $600,000 in fiscal year 2005 to53.29reflect reduced funding for shelters.53.30 [CRIME VICTIMS SERVICES STAFF AND 53.31 GRANTS.] $384,000 the first year and 53.32 $768,000 the second year are reductions 53.33 for crime victims services staff and 53.34 grants. For crime victims services 53.35 grants, the base for fiscal year 2004 53.36 shall be reduced by $2,000,000 and for 53.37 fiscal year 2005 by $2,000,000. 53.38 Sec. 25. Laws 2002, chapter 220, article 7, section 34, is 53.39 amended to read: 53.40 Sec. 34. [EFFECTIVE DATE.] 53.41(a)Sections 1 to 5, 9, 12, and 30 are effective the day 53.42 following final enactment. 53.43(b) Sections 16, 17, and 33, paragraph (a), are effective53.44July 1, 2003.54.1(c) The amendments to section 18, subdivisions 1 and 2, are54.2effective July 1, 2003. Section 18, subdivision 3, is effective54.3the day following final enactment.54.4 Sec. 26. [FELONY DWI APPROPRIATION REDUCTIONS.] 54.5 The following dollar amounts are subtracted from the 54.6 general fund appropriations to the specified agencies for the 54.7 fiscal year ending June 30, 2003, enacted in Laws 2001, First 54.8 Special Session chapters 8 and 9, and Laws 2002, chapter 220, 54.9 article 6, section 3, related to the felony driving while 54.10 impaired penalty: 54.11 (1) public safety $(84,000); 54.12 (2) board of public defense $(125,000); and 54.13 (3) attorney general $(127,000). 54.14 Sec. 27. [REPEALER.] 54.15 (a) Minnesota Statutes 2000, sections 611A.373, subdivision 54.16 3, as added by Laws 2002, chapter 220, article 7, section 18; 54.17 and 611A.73, subdivision 6, as added by Laws 2002, chapter 220, 54.18 article 7, section 21, are repealed. 54.19 (b) Laws 2002, chapter 220, article 6, section 4, and 54.20 article 7, sections 5, 32, and 33, are repealed. 54.21 Sec. 28. [EFFECTIVE DATE.] 54.22 This article is effective the day following final enactment. 54.23 ARTICLE 9 54.24 STATE GOVERNMENT 54.25 Section 1. Minnesota Statutes 2000, section 3.855, 54.26 subdivision 2, is amended to read: 54.27 Subd. 2. [STATE EMPLOYEE NEGOTIATIONS.] (a) The 54.28 commissioner of employee relations shall regularly advise the 54.29 commission on the progress of collective bargaining activities 54.30 with state employees under the state Public Employment Labor 54.31 Relations Act. During negotiations, the commission may make 54.32 recommendations to the commissioner as it deems appropriate but 54.33 no recommendation shall impose any obligation or grant any right 54.34 or privilege to the parties. 54.35 (b) The commissioner shall submit to the chair of the 54.36 commission any negotiated collective bargaining agreements, 55.1 arbitration awards, compensation plans, or salaries for 55.2 legislative approval or disapproval. Negotiated agreements 55.3 shall be submitted within five days of the date of approval by 55.4 the commissioner or the date of approval by the affected state 55.5 employees, whichever occurs later. Arbitration awards shall be 55.6 submitted within five days of their receipt by the 55.7 commissioner. If the commission disapproves a collective 55.8 bargaining agreement, award, compensation plan, or salary, the 55.9 commission shall specify in writing to the parties those 55.10 portions with which it disagrees and its reasons. If the 55.11 commission approves a collective bargaining agreement, award, 55.12 compensation plan, or salary, it shall submit the matter to the 55.13 legislature to be accepted or rejected under this section. 55.14 (c) When the legislature is not in session, the commission 55.15 may give interim approval to a negotiated collective bargaining 55.16 agreement, salary, compensation plan, or arbitration award. 55.17 When the legislature is not in session, failure of the 55.18 commission to disapprove a collective bargaining agreement or 55.19 arbitration award within 30 days constitutes approval. The 55.20 commission shall submit the negotiated collective bargaining 55.21 agreements, salaries, compensation plans, or arbitration awards 55.22 for which it has provided approval to the entire legislature for 55.23 ratification at a special legislative session called to consider 55.24 them or at its next regular legislative session as provided in 55.25 this section. Approval or disapproval by the commission is not 55.26 binding on the legislature. 55.27 (d) When the legislature is not in session, the proposed 55.28 collective bargaining agreement, arbitration decision, salary, 55.29 or compensation plan must be implemented upon its approval by 55.30 the commission, and state employees covered by the proposed 55.31 agreement or arbitration decision do not have the right to 55.32 strike while the interim approval is in effect. Wages and 55.33 economic fringe benefit increases provided for in the agreement 55.34 or arbitration decision paid in accordance with the interim 55.35 approval by the commission are not affected, but the wages or 55.36 benefit increases must cease to be paid or provided effective 56.1 upon the rejection of the agreement, arbitration decision, 56.2 salary, or compensation plan, or upon adjournment of the56.3legislature without acting on it. Failure of the legislature to 56.4 disapprove a collective bargaining agreement or arbitration 56.5 award before adjournment of the legislature constitutes approval. 56.6 Failure of the legislature to disapprove a compensation plan or 56.7 salary that has been submitted to the legislative coordinating 56.8 commission under section 3.855 at least 45 days before 56.9 adjournment constitutes approval. 56.10 Sec. 2. Minnesota Statutes 2000, section 16A.28, 56.11 subdivision 6, is amended to read: 56.12 Subd. 6. [CANCELED OCTOBER 15.] On October 15 all 56.13 allotments and encumbrances for the last fiscal year shall be 56.14 canceled unless an agency head certifies to the commissioner 56.15 that there is an encumbrance for services renderedor, goods 56.16 ordered, or grants issued in the last fiscal year, or certifies 56.17 that funding will be carried forward under subdivision 56.18 1. Encumbrances for grants issued by June 30 may be certified 56.19 for a period of one year beyond the year in which the funds were 56.20 originally appropriated. Services rendered under grant 56.21 contracts may occur during the certification period. The 56.22 commissioner may:reinstate the part of the cancellation needed 56.23 to meet the certified encumbrance or charge the certified 56.24 encumbrance against the current year's appropriation. 56.25 Sec. 3. Laws 2002, chapter 220, article 10, section 17, is 56.26 amended to read: 56.27 Sec. 17. MILITARY AFFAIRS (452,000) (2,399,000) 56.28 The base funding for the 2004-2005 56.29 biennium is$12,472,000$12,619,000 56.30 each year. 56.31 Sec. 4. Laws 2002, chapter 220, article 10, section 36, is 56.32 amended to read: 56.33 Sec. 36. [REDUCTION IN CONTRACT EXPENDITURES.] 56.34 During the biennium ending June 30, 2003, the governor must 56.35 reduce planned executive branch state agency general fund 56.36 expenditures on contracts for professional or technical services 56.37 by at least$35,000,000$27,300,000. The governor must allocate 57.1 this reduction among executive branch state agencies. For 57.2 purposes of this section, "professional or technical services" 57.3 has the meaning given in Minnesota Statutes, section 16C.08, 57.4 subdivision 1; and "executive branch state agency" has the 57.5 meaning given in Minnesota Statutes, section 16A.011, 57.6 subdivision 12a,and includesbut does not include the Minnesota 57.7 state colleges and universities, the higher education services 57.8 office, the department of corrections, or the department of 57.9 human services with respect to contracts for state operated 57.10 services. The base for these reductions is the amount allocated 57.11 for professional or technical service contracts in agency 57.12 spending plans as of January 1, 2002. 57.13 Sec. 5. Laws 2002, chapter 220, article 10, section 38, 57.14 subdivision 2, is amended to read: 57.15 Subd. 2. [EXCEPTIONS.] Subdivision 1 does not apply to: 57.16 (1) an employee at a state correctional facility; 57.17 (2) an employee of state operated services under the 57.18 department of human services; 57.19 (3) a lateral transfer of an employee within an agency; 57.20 (4) a student in a work-study position;or57.21(2)(5) a position that is necessary to perform essential 57.22 government services; or 57.23 (6) an employee who is paid entirely with federal money. 57.24 A determination under clause(2)(5) must be made by the 57.25 speaker of the house of representatives with respect to house 57.26 employees, the chair of the committee on rules and 57.27 administration with respect to senate employees, and the 57.28 legislative coordinating commission with respect to its 57.29 employees, by a constitutional officer with respect to employees 57.30 of the constitutional office, and by the governor with respect 57.31 to any other employee covered by this section. Exceptions 57.32 granted under clause(2)(5) must be reported monthly by the 57.33 entity granting the exception. The reports must be published on 57.34 the entity's Web site, and copies must be provided to the chairs 57.35 of the house ways and means and senate finance committees and to 57.36 the legislative reference library. 58.1 Sec. 6. Laws 2002, chapter 220, article 10, section 38, 58.2 subdivision 3, is amended to read: 58.3 Subd. 3. [ANTICIPATED SAVINGS.] The legislature 58.4 anticipates that application of this section to executive branch 58.5 agenciesand to the Minnesota state colleges and universities58.6 will result in savings to the general fund of $40,000,000 by 58.7 June 30, 2003. If the governor determines that application of 58.8 this section will not result in $40,000,000 in savings to the 58.9 general fund by June 30, 2003, the governor must make 58.10 proportional reductions in executive agency operating budgets 58.11 necessary to achieve these savings. If the governor makes 58.12 proportional reductions to executive agency operating budgets to 58.13 achieve the required savings, the governor shall exclude the 58.14 department of corrections from the reductions. 58.15 Sec. 7. Laws 2002, chapter 220, article 10, section 39, is 58.16 amended to read: 58.17 Sec. 39. [SAVINGS ARE ADDITIONAL.] 58.18 Savings achieved in sections 36 to 38 from the freeze in 58.19 state hiring or the reduction in the number of state contracts 58.20 for professional or technical services are in addition to 58.21 reductions in spending required by other sections of this 58.22articleact. 58.23 Sec. 8. [REPORT ON REDUCTIONS.] 58.24 By August 1, 2002, state agencies shall report to the 58.25 commissioner of finance on how budget cuts and the hiring freeze 58.26 have been implemented. Reports must identify positions cut and 58.27 specific programs and services that have been cut back or 58.28 eliminated. To the extent possible, departments must identify 58.29 the impact on Minnesotans of the changes made in state programs 58.30 and services as a result of the 2002-2003 budget agreements. 58.31 The commissioner of finance must make the reports available to 58.32 members of the legislature and to the public. 58.33 Sec. 9. [EARLY RETIREMENT INCENTIVE.] 58.34 Subdivision 1. [AGENCY ELIGIBILITY.] The early retirement 58.35 incentive provided by this section may be offered to eligible 58.36 employees by agencies in the executive branch of state 59.1 government that are forced by budget reductions to make 59.2 significant reductions in staff or by a legislative employer. 59.3 For purposes of this section, "agency" means a legislative 59.4 employer as well as an agency in the executive branch. 59.5 Subd. 2. [EMPLOYEE ELIGIBILITY.] The early retirement 59.6 incentive provided by this section is available to an employee 59.7 of an eligible agency or a legislative employer who is paid from 59.8 the general fund and who: 59.9 (1) on the date of retirement is at least 55 years old and 59.10 has at least 25 years of allowable service in one or more of the 59.11 funds listed in Minnesota Statutes, section 356.30, subdivision 59.12 3; 59.13 (2) upon retirement is immediately eligible for a 59.14 retirement annuity from one or more of those funds; 59.15 (3) retires on or after the effective date of this section 59.16 but before January 1, 2003; and 59.17 (4) holds a position designated by the agency as eligible 59.18 for the incentive. 59.19 Subd. 3. [INCENTIVE.] For an eligible employee who retires 59.20 under this section, the employer shall provide an amount to be 59.21 determined by the employer, but not to exceed $20,000, to be 59.22 used, at the employee's option, for: 59.23 (1) deposit on the employee's behalf in the postretirement 59.24 health care savings plan established by Minnesota Statutes, 59.25 section 352.98; 59.26 (2) notwithstanding Minnesota Statutes, section 352.01, 59.27 subdivision 11, or 356.55, purchase of service credit for 59.28 unperformed service sufficient to enable the employee to retire 59.29 under Minnesota Statutes, section 352.116, subdivision 1, 59.30 paragraph (b); or 59.31 (3) purchase of a lifetime annuity or annuity for a 59.32 specific number of years from the state unclassified retirement 59.33 program to provide additional retirement benefits to the 59.34 employee calculated under Minnesota Statutes, section 352D.061, 59.35 subdivision 1. 59.36 An employee selecting the option in clause (2) may use money 60.1 from the employee's deferred compensation account to purchase 60.2 additional service credit if the employer contribution under 60.3 this subdivision is not sufficient to purchase enough credit to 60.4 enable the employee to retire under Minnesota Statutes, section 60.5 352.116, subdivision 1, paragraph (b). 60.6 Subd. 4. [DESIGNATION OF ELIGIBLE POSITIONS.] If an 60.7 eligible agency chooses to offer the retirement incentive under 60.8 this section, the agency must designate the positions or groups 60.9 of positions within the agency that will qualify for 60.10 participation in the incentive program and may exclude otherwise 60.11 eligible employees. The agency may at any time modify its 60.12 designation. Unilateral implementation of this subdivision is 60.13 not an unfair labor practice for purposes of Minnesota Statutes, 60.14 chapter 179A. 60.15 Sec. 10. [REPEALER.] 60.16 Laws 2002, chapter 220, article 10, section 37, is repealed. 60.17 Sec. 11. [EFFECTIVE DATE.] 60.18 This article is effective the day following final enactment. 60.19 ARTICLE 10 60.20 ECONOMIC DEVELOPMENT 60.21 Section 1. Minnesota Statutes 2001 Supplement, section 60.22 268.022, subdivision 1, is amended to read: 60.23 Subdivision 1. [DETERMINATION AND COLLECTION OF SPECIAL 60.24 ASSESSMENT.] (a) In addition to all other taxes, assessments, 60.25 and payment obligations under chapter 268, each employer, except 60.26 an employer making payments in lieu of taxes is liable for a 60.27 special assessment levied at the rate of one-tenth of one 60.28 percent per yearuntil June 30, 2000, and seven-hundredths of60.29one percent per year on and after July 1, 2000,on all taxable 60.30 wages, as defined in section 268.035, subdivision 24. The 60.31 assessment shall become due and be paid by each employer to the 60.32 department on the same schedule and in the same manner as other 60.33 taxes. 60.34 (b) The special assessment levied under this section shall 60.35 not affect the computation of any other taxes, assessments, or 60.36 payment obligations due under this chapter. 61.1 Sec. 2. Minnesota Statutes 2000, section 268.035, 61.2 subdivision 24, is amended to read: 61.3 Subd. 24. [TAXABLE WAGES.] (a) "Taxable wages" means those 61.4 wages paid to an employee in covered employment each calendar 61.5 year up to an amount equal to6070 percent of the state's 61.6 average annual wage, rounded to the nearest $1,000. 61.7 (b) Taxable wages includes the amount of wages paid for 61.8 covered employment by the employer's predecessor when there has 61.9 been an experience ratingrecordtransfer under section 268.051, 61.10 subdivision 4. 61.11 Sec. 3. Minnesota Statutes 2000, section 268.051, 61.12 subdivision 8, is amended to read: 61.13 Subd. 8. [SOLVENCYSPECIAL ASSESSMENT FOR INTEREST ON 61.14 FEDERAL LOAN.] (a) Ifthe fund balance is less than $150,000,00061.15 onJune 30October 31 of any year, the commissioner, in 61.16 consultation with the commissioner of finance, determines that 61.17 an interest payment will be due during the following calendar 61.18 year on any loan from the federal unemployment trust fund under 61.19 section 268.194, subdivision 6, asolvencyspecial assessment on 61.20 taxpaying employers will be in effect for the following calendar 61.21 year. Thetaxpaying employer shall pay quarterly a solvency61.22 legislature authorizes the commissioner, in consultation with 61.23 the commissioner of finance, to determine the appropriate level 61.24 of the assessment, oftenfrom two percent to eight percent of 61.25 the quarterly unemployment taxes due, that will be necessary to 61.26 pay the interest due on the loan. 61.27 (b) Thesolvencyspecial assessment shall be placed into a 61.28 special account from which the commissioner shall pay any 61.29 interestaccruingthat has accrued on any loan from the federal 61.30 unemployment trust fund provided for under section 268.194, 61.31 subdivision 6. If, at the end of each calendar quarter, the 61.32 commissioner, in consultation with the commissioner of finance, 61.33 determines that the balance in this special account, including 61.34 interest earned on the special account, is more than is 61.35 necessary to pay the interest which has accrued on any loan as 61.36 of that date, or will accrue over the following calendar 62.1 quarter, the commissioner shall immediately pay to the fund the 62.2 amount in excess of that necessary to pay the interest on any 62.3 loan. 62.4 Sec. 4. Laws 2001, First Special Session chapter 4, 62.5 article 2, section 31, is amended to read: 62.6 Sec. 31. [WORKFORCE ENHANCEMENT FEE.] 62.7 Subdivision 1. [FEE.] Notwithstanding Minnesota Statutes, 62.8 section 268.022, effective January 1, 2002, the special 62.9 assessment under that section on taxable wages as defined in 62.10 Minnesota Statutes, section 268.035, subdivision 24, is 62.11 suspended until December 31, 2005. Effective January 1, 2002, 62.12 there shall be assessed, in addition to unemployment taxes due 62.13 under Minnesota Statutes, section 268.051, a workforce 62.14 enhancement fee of.09.12 percent on taxable wages. This fee 62.15 shall be due and be paid on the same schedule and in the same 62.16 manner as unemployment taxes under Minnesota Statutes, section 62.17 268.051. Any amount past due under this section shall be 62.18 subject to the same interest and collection provisions as 62.19 unemployment taxes. This fee shall expire on December 31, 2005. 62.20 Subd. 2. [USE OF FUNDS COLLECTED.] An amount equal to 62.21.070.1 percent on taxable wages shall be deposited in the 62.22 workforce development fund provided for under Minnesota 62.23 Statutes, section 268.022, subdivision 2. An amount equal to 62.24 .02 percent on taxable wages, less reimbursement for collection 62.25 costs of the total amount of the fee, shall be deposited in the 62.26 unemployment insurance technology initiative account provided 62.27 for in section 32. 62.28 Sec. 5. [EXTRA UNEMPLOYMENT BENEFITS.] 62.29 Subdivision 1. [EXTRA BENEFITS; AVAILABILITY.] Extra 62.30 unemployment benefits are available to an applicant: 62.31 (1) who has a benefit account effective March 11, 2001, or 62.32 thereafter if the applicant was laid off due to lack of work 62.33 from Northwest Airlines, Sun Country Airlines, Mark Travel 62.34 Corporation, Mesaba Airlines, United Airlines, MLT Vacations, 62.35 Carlson Wagonlit Travel, LSG Sky Chefs, Air Wisconsin, American 62.36 Airlines, American TransAir, Champion Air, Chautaugua Airlines, 63.1 Continental Airlines, Emery Worldwide Air, Great Lakes Airlines, 63.2 PanAm International, Skyway Airlines, and U.S. Airways; 63.3 (2) who was laid off on or after January 1, 2002, due to 63.4 lack of work from Fingerhut Companies, Incorporated; 63.5 (3) who was laid off due to a lack of work on or after July 63.6 8, 2001, from the Farmland Foods Company in Freeborn county; or 63.7 (4) who was laid off due to a lack of work on or after 63.8 March 18, 2002, from Potlatch Corporation in Crow Wing county. 63.9 Subd. 2. [PAYMENT FROM FUND; EFFECT ON EMPLOYER.] Extra 63.10 unemployment benefits are payable from the fund. 63.11 Subd. 3. [ELIGIBILITY CONDITIONS.] An applicant described 63.12 under subdivision 1, clause (1), is eligible to receive extra 63.13 unemployment benefits under this section for any week through 63.14 March 15, 2003, an applicant described under subdivision 1, 63.15 clauses (2) and (4), is eligible to receive extra unemployment 63.16 benefits under this section for any week through January 3, 63.17 2004, and an applicant described under subdivision 1, clause 63.18 (3), is eligible to receive extra unemployment benefits under 63.19 this section for any week through July 1, 2003, if: 63.20 (1) a majority of the applicant's wage credits were with an 63.21 employer specified under subdivision 1; 63.22 (2) the applicant meets the eligibility requirements of 63.23 Minnesota Statutes, section 268.085; 63.24 (3) the applicant is not subject to a disqualification 63.25 under Minnesota Statutes, section 268.095; 63.26 (4) the applicant is not entitled to any regular, 63.27 additional, or extended unemployment benefits for that week and 63.28 the applicant is not entitled to receive unemployment benefits 63.29 under any other state or federal law for that week; 63.30 (5) the applicant is enrolled in, or has within the last 63.31 two weeks successfully completed, a program that qualifies as 63.32 reemployment assistance training under the state dislocated 63.33 worker program, except that an applicant whose training is 63.34 scheduled to begin in more than 30 days may be considered to be 63.35 in training if: (i) the applicant's chosen training program 63.36 does not offer an available start date within 30 days; (ii) the 64.1 applicant is scheduled to begin training on the earliest 64.2 available start date for the chosen training program; and (iii) 64.3 the applicant is scheduled to begin training in no more than 60 64.4 days; and 64.5 (6) an applicant qualifies for a new regular benefit 64.6 account at any time after exhausting regular unemployment 64.7 benefits as a result of the layoff under subdivision 1, the 64.8 applicant must apply for and exhaust entitlement to those new 64.9 regular or any other type of unemployment benefits under any 64.10 state or federal law. 64.11 Subd. 4. [WEEKLY AMOUNT OF EXTRA BENEFITS.] The weekly 64.12 extra unemployment benefits amount available to an applicant is 64.13 the same as the applicant's weekly regular unemployment benefit 64.14 amount on the benefit account established as a result of a 64.15 layoff under subdivision 1. 64.16 Subd. 5. [MAXIMUM AMOUNT OF EXTRA UNEMPLOYMENT 64.17 BENEFITS.] The maximum amount of extra unemployment benefits 64.18 available is 26 times the applicant's weekly extra unemployment 64.19 benefits amount. Any type of unemployment benefits, under any 64.20 state or federal law, the applicant may be entitled to after 64.21 exhausting regular unemployment benefits as a result of a layoff 64.22 under subdivision 1, shall reduce the maximum amount of extra 64.23 unemployment benefits available. The reduction in total extra 64.24 unemployment benefits available shall equal the total amount of 64.25 any other type of unemployment benefits available. 64.26 Subd. 6. [PROGRAM EXPIRATION.] This extra unemployment 64.27 benefit program expires on January 3, 2004. No extra 64.28 unemployment benefits shall be paid for any week after the 64.29 expiration of this program. 64.30[EFFECTIVE DATE.] This section is effective the day 64.31 following final enactment and is retroactive to September 16, 64.32 2001. 64.33 Sec. 6. [UNIFORM LAWS COMMISSION APPROPRIATION.] 64.34 The following amounts are added to the appropriations from 64.35 the general fund to the uniform laws commission in Laws 2001, 64.36 First Special Session chapter 8, article 4, section 8: $5,000 65.1 in the fiscal year ending June 30, 2002, and $5,000 in the 65.2 fiscal year ending June 30, 2003. 65.3 Sec. 7. [EFFECTIVE DATE.] 65.4 This article is effective the day following final enactment. 65.5 ARTICLE 11 65.6 CANCELLATIONS; INFLATION; TRANSFERS IN 65.7 Section 1. Laws 2002, chapter 220, article 13, section 7, 65.8 is amended to read: 65.9 Sec. 7. [BALANCES CANCELED TO GENERAL FUND.] 65.10 The unobligated balances in the following general fund 65.11 accounts created in the sections of Minnesota Statutes indicated 65.12 are canceled to the general fund in the fiscal years indicated: 65.13 (1) the budget reserve account, Minnesota Statutes, section 65.14 16A.152, subdivision 1a, estimated to be $653,000,000, in fiscal 65.15 year 2002; 65.16 (2) the local government aid reform account, Minnesota 65.17 Statutes, section 16A.1523, estimated to be $14,000,000, in 65.18 fiscal year 2003; 65.19 (3) the tax relief account, Minnesota Statutes, section 65.20 16A.1522, subdivision 4, estimated to be $158,148,000, in fiscal 65.21 year20042003; and 65.22 (4) $195,000,000 of the unobligated balance in the cash 65.23 flow account in Minnesota Statutes, section 16A.152, subdivision 65.24 1. 65.25 Sec. 2. Laws 2002, chapter 220, article 13, section 9, 65.26 subdivision 2, is amended to read: 65.27 Subd. 2. [SPECIAL COMPENSATION FUND.] After June 1, 2003, 65.28 but no later than June 30, 2003, the commissioner of finance 65.29 shall transfer$230,000,000$282,000,000 in assets of the excess 65.30 surplus account of the special compensation fund created under 65.31 Minnesota Statutes, section 176.129, to the general fund. 65.32 Sec. 3. [TRAFFIC BOTTLENECKS AND INTERREGIONAL CORRIDORS.] 65.33 Subdivision 1. [CANCELLATION.] $245,240,000 of the 65.34 appropriation from the general fund in Laws 2000, chapter 479, 65.35 article 1, section 2, subdivision 3, is canceled to the general 65.36 fund. 66.1 Subd. 2. [APPROPRIATION.] $245,240,000 is appropriated 66.2 from the trunk highway fund to the commissioner of 66.3 transportation. One-half is for state trunk highway 66.4 improvements within the seven-county metropolitan area primarily 66.5 for the purpose of improving traffic flow and expanding highway 66.6 capacity by eliminating traffic bottlenecks. One-half is for 66.7 improvements on state trunk highways outside the seven-county 66.8 metropolitan area that the commissioner designates as at-risk 66.9 interregional corridors. 66.10 Subd. 3. [BOND SALE.] To provide the money appropriated in 66.11 this section from the trunk highway fund, the commissioner of 66.12 finance shall sell and issue bonds of the state in an amount up 66.13 to $245,240,000 in the manner, upon the terms, and with the 66.14 effect prescribed by Minnesota Statutes, sections 167.50 to 66.15 167.52, and by the Minnesota Constitution, article XIV, section 66.16 11, at the times and in the amounts requested by the 66.17 commissioner of transportation. The proceeds of the bonds, 66.18 except accrued interest and any premium received on the sale of 66.19 the bonds, must be credited to a bond proceeds account in the 66.20 trunk highway fund. 66.21 Sec. 4. [CASH FLOW ACCOUNT CANCELLATION.] 66.22 $155,000,000 of the unobligated balance in the cash flow 66.23 account created in Minnesota Statutes, section 16A.152, 66.24 subdivision 1, is canceled to the general fund. 66.25 Sec. 5. [BALANCES DEPOSITED IN BUDGET RESERVE.] 66.26 Notwithstanding Minnesota Statutes, section 16A.1522, any 66.27 positive unrestricted general fund balance on June 30, 2003, 66.28 must be deposited in the budget reserve account in the general 66.29 fund. 66.30 Sec. 6. [APPROPRIATION TO EDUCATION RESERVE ACCOUNT.] 66.31 $61,000,000 is appropriated in fiscal year 2004, and 66.32 $148,000,000 is appropriated in fiscal year 2005 to the 66.33 education reserve account created under Minnesota Statutes, 66.34 section 275.025, subdivision 1. 66.35 Sec. 7. [EFFECTIVE DATE.] 66.36 This article is effective the day following final enactment. 67.1 ARTICLE 12 67.2 HEALTH AND HUMAN SERVICES APPROPRIATIONS 67.3 Section 1. [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 67.4 The dollar amounts shown in the columns marked 67.5 "APPROPRIATIONS" are added to or, if shown in parentheses, are 67.6 subtracted from the appropriations in Laws 2001, First Special 67.7 Session chapter 9, and Laws 2002, chapter 220, or other law, and 67.8 are appropriated from the general fund, or any other fund named, 67.9 to the agencies and for the purposes specified in this article, 67.10 to be available for the fiscal years indicated for each 67.11 purpose. The figures "2002" and "2003" used in this article 67.12 mean that the appropriation or appropriations listed under them 67.13 are available for the fiscal year ending June 30, 2002, or June 67.14 30, 2003, respectively. 67.15 SUMMARY BY FUND 67.16 2002 2003 TOTAL 67.17 General 67.18 Forecast 67.19 Adjustments $47,032,000 $26,019,000 $73,051,000 67.20 Nonforecast 350,000 (35,633,000) (35,283,000) 67.21 Health Care 67.22 Access (2,605,000) (4,816,000) (7,421,000) 67.23 Federal TANF (7,383,000) 8,636,000 1,253,000 67.24 State Government 67.25 Special Revenue -0- 4,000 4,000 67.26 APPROPRIATIONS 67.27 Available for the Year 67.28 Ending June 30 67.29 2002 2003 67.30 Sec. 2. COMMISSIONER OF 67.31 HUMAN SERVICES 67.32 Subdivision 1. Total 67.33 Appropriation $ 37,394,000 $(6,294,000) 67.34 Summary by Fund 67.35 General 47,382,000 (10,114,000) 67.36 Health Care 67.37 Access (2,605,000) (4,816,000) 67.38 Federal TANF (7,383,000) 8,636,000 67.39 Subd. 2. Children's 67.40 Grants 67.41 General -0- (4,714,000) 68.1 This appropriation includes a reduction 68.2 of $6,548,000 in family preservation 68.3 and children's mental health grants due 68.4 to changes in allocations and an 68.5 increase of $1,834,000 in local 68.6 collaboratives wraparound services 68.7 coordination grants. 68.8 Subd. 3. Basic Health Care 68.9 Grants 68.10 General 9,689,000 1,188,000 68.11 Health Care 68.12 Access (2,605,000) (4,816,000) 68.13 The amounts that may be spent from this 68.14 appropriation for each purpose are as 68.15 follows: 68.16 (a) MinnesotaCare Grants 68.17 Health Care 68.18 Access (2,605,000) (4,816,000) 68.19 (b) MA Basic Health Care 68.20 Grants - Families and Children 68.21 General 7,437,000 (6,007,000) 68.22 (c) MA Basic Health Care 68.23 Grants - Elderly and Disabled 68.24 General (779,000) 2,757,000 68.25 [CRITICAL ACCESS PHARMACY PROVIDERS.] 68.26 Of this appropriation, $1,975,000 in 68.27 fiscal year 2003 is to the commissioner 68.28 to increase pharmacy dispensing fees to 68.29 critical access pharmacies as 68.30 authorized under Minnesota Statutes, 68.31 section 256B.0625, subdivision 13, 68.32 paragraph (d). 68.33 [NOTICE OF CHANGE IN DOCUMENTATION.] 68.34 The commissioner shall provide to all 68.35 medical assistance recipients receiving 68.36 coverage through the employed persons 68.37 with disabilities program under 68.38 Minnesota Statutes, section 256B.057, 68.39 subdivision 9, three-months advance 68.40 notice of the new employment 68.41 documentation requirement. 68.42 [MENTAL HEALTH SERVICES RATE INCREASE 68.43 PASSTHROUGH.] Prepaid health plans must 68.44 pass through to service providers the 68.45 rate increases provided under Minnesota 68.46 Statutes, section 256B.761. 68.47 (d) General Assistance 68.48 Medical Care Grants 68.49 General 2,681,000 4,438,000 68.50 (e) Health Care Grants - 68.51 Other Assistance 68.52 General 350,000 -0- 68.53 [U SPECIAL KIDS PROGRAM.] Of this 69.1 appropriation, $350,000 in fiscal year 69.2 2002 is immediately available to the 69.3 commissioner to be transferred 69.4 immediately to the University of 69.5 Minnesota for the U Special Kids 69.6 program. The money may be used to 69.7 match private grants. The money shall 69.8 be used to provide physician-supervised 69.9 medical case management services for up 69.10 to 50 Minnesota children in the program 69.11 who are eligible for medical 69.12 assistance. Any unspent portion of this 69.13 appropriation shall not cancel but 69.14 shall be available for these purposes 69.15 until June 30, 2005. This is a 69.16 one-time appropriation and shall not 69.17 become part of base level funding for 69.18 the 2004-2005 biennium. 69.19 [HIV/AIDS DRUG REBATES.] General fund 69.20 appropriations for HIV/AIDS grants and 69.21 services that are no longer needed as a 69.22 result of greater than anticipated 69.23 collections under the AIDS drug 69.24 assistance program rebate must first be 69.25 used to meet funding needs of the state 69.26 prescription drug program. 69.27 Subd. 4. Basic Health Care 69.28 Management 69.29 General -0- 75,000 69.30 The amounts that may be spent from this 69.31 appropriation for each purpose are as 69.32 follows: 69.33 Health Care Policy 69.34 Administration 69.35 General -0- 75,000 69.36 Subd. 5. State-Operated 69.37 Services 69.38 General -0- 5,000,000 69.39 Subd. 6. Continuing Care 69.40 Grants 69.41 [FUNDING USAGE.] Up to 75 percent of 69.42 the fiscal year 2004 appropriations for 69.43 family preservation grants, 69.44 developmental disability 69.45 semi-independent living services, 69.46 developmental disability family 69.47 support, adult mental health grants, 69.48 and children's mental health grants may 69.49 be used to fund calendar year 2003 69.50 allocations for these programs, with 69.51 the resulting calendar year funding 69.52 pattern continuing into the future. 69.53 Appropriation reductions associated 69.54 with this shift are onetime only. 69.55 General 27,896,000 (9,713,000) 69.56 The amounts that may be spent from this 69.57 appropriation for each purpose are as 69.58 follows: 70.1 (a) Medical Assistance 70.2 Long-Term Care Waivers and 70.3 Home Care Grants 70.4 General 26,054,000 26,552,000 70.5 [COMMUNITY SERVICES DEVELOPMENT GRANTS 70.6 USAGE.] For fiscal year 2003, the 70.7 commissioner may make grants under the 70.8 community services development grants 70.9 program in Minnesota Statutes, section 70.10 256.9754, for the development of 70.11 housing options for persons under age 70.12 65 residing in nursing facilities. 70.13 (b) Medical Assistance 70.14 Long-Term Care Facilities 70.15 Grants 70.16 General 1,815,000 (5,586,000) 70.17 (c) Group Residential 70.18 Housing Grants 70.19 General 27,000 689,000 70.20 (d) Chemical Dependency 70.21 Entitlement Grants 70.22 General -0- (1,000,000) 70.23 (e) Community Social 70.24 Service Grants 70.25 General -0- (13,730,000) 70.26 (f) Mental Health 70.27 Grants 70.28 General -0- (13,635,000) 70.29 This reduction is onetime only. 70.30 (g) Community Support 70.31 Grants 70.32 General -0- (3,003,000) 70.33 Subd. 7. Economic 70.34 Support Grants 70.35 General 9,797,000 (1,950,000) 70.36 Federal TANF (7,383,000) 8,636,000 70.37 The amounts that may be spent from the 70.38 appropriation for each purpose are as 70.39 follows: 70.40 (a) Assistance to Families 70.41 Grants 70.42 General 8,712,000 (3,740,000) 70.43 Federal TANF (7,383,000) 8,636,000 70.44 (b) General Assistance 70.45 Grants 70.46 General 1,361,000 1,779,000 71.1 (c) Minnesota Supplemental 71.2 Aid Grants 71.3 General (276,000) 11,000 71.4 Sec. 3. COMMISSIONER OF HEALTH 71.5 Subdivision 1. Total Appropriation 71.6 Reductions -0- 4,000 71.7 Summary by Fund 71.8 State Government 71.9 Special Revenue -0- 4,000 71.10 Subd. 2. Family and Provider 71.11 Compliance 71.12 State Government 71.13 Special Revenue -0- 4,000 71.14 [REGISTRATION COSTS.] This 71.15 appropriation in fiscal year 2003 is to 71.16 the commissioner for the costs of 71.17 registering establishments under 71.18 Minnesota Statutes, section 144D.025. 71.19 Sec. 4. VETERANS NURSING 71.20 HOMES BOARD 71.21 Summary by Fund 71.22 General -0- 500,000 71.23 [DEFICIENCY APPROPRIATION.] The 71.24 appropriation to the veterans nursing 71.25 homes board for fiscal year 2003 is for 71.26 a deficiency in board operations. This 71.27 is a one-time appropriation and shall 71.28 not become part of base-level funding 71.29 for the 2004-2005 biennium. 71.30 Sec. 5. Laws 2002, chapter 220, article 6, section 3, 71.31 subdivision 2, is amended to read: 71.32 Subd. 2. Adult Institutions (5,200,000) (1,750,000) 71.33 The base for fiscal year 2004 shall be 71.34 reduced by$8,145,000$1,750,000, and 71.35 for fiscal year 2005 by$8,145,000.71.36The commissioner of corrections shall71.37develop an agencywide spending plan for71.38the 2004-2005 biennium and report to71.39the chairs and ranking minority members71.40of the house and senate committees with71.41jurisdiction over criminal justice71.42policy and funding on its71.43recommendations by January 15,71.442003$1,750,000. 71.45 Sec. 6. [VETERANS NURSING HOMES BOARD FUNDING.] 71.46 (a) Notwithstanding Minnesota Statutes, section 16B.31, 71.47 subdivision 7, on July 1, 2002, the commissioner of 71.48 administration shall transfer to the veterans nursing homes 71.49 board any remaining portion of the payments received from 72.1 contractors for the mold damage at the Luverne facility. 72.2 (b) Notwithstanding the provisions of Minnesota Statutes, 72.3 section 16A.151, any payments made during fiscal year 2003 from 72.4 contractors to settle legal issues regarding the mold damage at 72.5 the Luverne facility are appropriated to the veterans nursing 72.6 homes board. 72.7 (c) Total appropriations to the veterans nursing homes 72.8 board under this section shall not exceed $900,000. 72.9 Sec. 7. [EXEMPTIONS FROM REDUCTION IN CONTRACT 72.10 EXPENDITURES AND FROM HIRING FREEZE.] 72.11 The department of human services is exempt from the hiring 72.12 freeze established in Laws 2002, chapter 220, article 10, 72.13 section 38, and the contract moratorium established in Laws 72.14 2002, chapter 220, article 10, section 37, as it relates to the 72.15 establishment and implementation of a supplemental drug rebate 72.16 program and a critical access pharmacy program. 72.17 Sec. 8. [SUNSET OF UNCODIFIED LANGUAGE.] 72.18 All uncodified language contained in this article expires 72.19 on June 30, 2003, unless a different expiration date is explicit. 72.20 Sec. 9. [EFFECTIVE DATE.] 72.21 Except as otherwise provided in this article, this article 72.22 is effective the day following final enactment. 72.23 ARTICLE 13 72.24 HEALTH AND HUMAN SERVICES 72.25 Section 1. Minnesota Statutes 2000, section 62J.692, 72.26 subdivision 4, as amended by Laws 2002, chapter 220, article 15, 72.27 section 1, is amended to read: 72.28 Subd. 4. [DISTRIBUTION OF FUNDS.] (a) The commissioner 72.29 shall annually distribute medical education funds to all 72.30 qualifying applicants based on the following criteria: 72.31 (1) total medical education funds available for 72.32 distribution; 72.33 (2) total number of eligible trainee FTEs in each clinical 72.34 medical education program; and 72.35 (3) the statewide average cost per trainee as determined by 72.36 the application information provided in the first year of the 73.1 biennium, by type of trainee, in each clinical medical education 73.2 program. 73.3 (b) Funds distributed shall not be used to displace current 73.4 funding appropriations from federal or state sources. 73.5 (c) Funds shall be distributed to the sponsoring 73.6 institutions indicating the amount to be distributed to each of 73.7 the sponsor's clinical medical education programs based on the 73.8 criteria in this subdivision and in accordance with the 73.9 commissioner's approval letter. Each clinical medical education 73.10 program must distribute funds to the training sites as specified 73.11 in the commissioner's approval letter. Sponsoring institutions, 73.12 which are accredited through an organization recognized by the 73.13 department of education or the health care financing 73.14 administration, may contract directly with training sites to 73.15 provide clinical training. To ensure the quality of clinical 73.16 training, those accredited sponsoring institutions must: 73.17 (1) develop contracts specifying the terms, expectations, 73.18 and outcomes of the clinical training conducted at sites; and 73.19 (2) take necessary action if the contract requirements are 73.20 not met. Action may include the withholding of payments under 73.21 this section or the removal of students from the site. 73.22 (d) Any funds not distributed in accordance with the 73.23 commissioner's approval letter must be returned to the medical 73.24 education and research fund within 30 days of receiving notice 73.25 from the commissioner. The commissioner shall distribute 73.26 returned funds to the appropriate training sites in accordance 73.27 with the commissioner's approval letter. 73.28 (e) The commissioner shall distributeno later thanby June 73.29 30 of each year an amount equal to the funds transferred under 73.30 section 62J.694, subdivision 2a, paragraph (b), plus five 73.31 percent interestat a rate equal to the average earnings paid73.32under section 62J.694, subdivision 2a,to the University of 73.33 Minnesota board of regents for the costs of the academic health 73.34 center as specified under section 62J.694, subdivision 2a, 73.35 paragraph (a). 73.36 Sec. 2. Minnesota Statutes 2000, section 144D.01, 74.1 subdivision 4, is amended to read: 74.2 Subd. 4. [HOUSING WITH SERVICES ESTABLISHMENT OR 74.3 ESTABLISHMENT.] (a) "Housing with services establishment" or 74.4 "establishment" means: 74.5 (1) an establishment providing sleeping accommodations to 74.6 one or more adult residents, at least 80 percent of which are 55 74.7 years of age or older, and offering or providing, for a fee, one 74.8 or more regularly scheduled health-related services or two or 74.9 more regularly scheduled supportive services, whether offered or 74.10 provided directly by the establishment or by another entity 74.11 arranged for by the establishment; or 74.12 (2) an establishment that registers under section 144D.025. 74.13 (b) Housing with services establishment does not include: 74.14 (1) a nursing home licensed under chapter 144A; 74.15 (2) a hospital, certified boarding care home, or supervised 74.16 living facility licensed under sections 144.50 to 144.56; 74.17 (3) a board and lodging establishment licensed under 74.18 chapter 157 and Minnesota Rules, parts 9520.0500 to 9520.0670, 74.19 9525.0215 to 9525.0355, 9525.0500 to 9525.0660, or 9530.4100 to 74.20 9530.4450, or under chapter 245B; 74.21 (4) a board and lodging establishment which serves as a 74.22 shelter for battered women or other similar purpose; 74.23 (5) a family adult foster care home licensed by the 74.24 department of human services; 74.25 (6) private homes in which the residents are related by 74.26 kinship, law, or affinity with the providers of services; 74.27 (7) residential settings for persons with mental 74.28 retardation or related conditions in which the services are 74.29 licensed under Minnesota Rules, parts 9525.2100 to 9525.2140, or 74.30 applicable successor rules or laws; 74.31 (8) a home-sharing arrangement such as when an elderly or 74.32 disabled person or single-parent family makes lodging in a 74.33 private residence available to another person in exchange for 74.34 services or rent, or both; 74.35 (9) a duly organized condominium, cooperative, common 74.36 interest community, or owners' association of the foregoing 75.1 where at least 80 percent of the units that comprise the 75.2 condominium, cooperative, or common interest community are 75.3 occupied by individuals who are the owners, members, or 75.4 shareholders of the units; or 75.5 (10) services for persons with developmental disabilities 75.6 that are provided under a license according to Minnesota Rules, 75.7 parts 9525.2000 to 9525.2140 in effect until January 1, 1998, or 75.8 under chapter 245B. 75.9 Sec. 3. [144D.025] [OPTIONAL REGISTRATION.] 75.10 An establishment that meets all the requirements of this 75.11 chapter except that fewer than 80 percent of the adult residents 75.12 are age 55 or older may, at its option, register as a housing 75.13 with services establishment. 75.14 Sec. 4. Minnesota Statutes 2001 Supplement, section 75.15 241.021, subdivision 4, is amended to read: 75.16 Subd. 4. [HEALTH CARE.] The commissioner of corrections 75.17 shall provide professional health care to persons confined in 75.18 institutions under the control of the commissioner of 75.19 corrections and pay the costs of their care in hospitals and 75.20 other medical facilities not under the control of the 75.21 commissioner of corrections. All reimbursements for these 75.22 health care services shall be deposited in the general fund. 75.23 The commissioner of corrections is authorized to contract 75.24 with or reimburse entities, including health care management 75.25 companies, to provide health care to inmates, at reimbursement 75.26 rates equal to medical assistance unless otherwise negotiated. 75.27 With respect to these contracts, these entities shall not be 75.28 regulated as, or otherwise considered to be, health plan 75.29 companies as defined in section 62Q.01, subdivision 4. 75.30 Sec. 5. Minnesota Statutes 2001 Supplement, section 75.31 256.01, subdivision 2, as amended by Laws 2002, chapter 220, 75.32 article 15, section 4, is amended to read: 75.33 Subd. 2. [SPECIFIC POWERS.] Subject to the provisions of 75.34 section 241.021, subdivision 2, the commissioner of human 75.35 services shall: 75.36 (1) Administer and supervise all forms of public assistance 76.1 provided for by state law and other welfare activities or 76.2 services as are vested in the commissioner. Administration and 76.3 supervision of human services activities or services includes, 76.4 but is not limited to, assuring timely and accurate distribution 76.5 of benefits, completeness of service, and quality program 76.6 management. In addition to administering and supervising human 76.7 services activities vested by law in the department, the 76.8 commissioner shall have the authority to: 76.9 (a) require county agency participation in training and 76.10 technical assistance programs to promote compliance with 76.11 statutes, rules, federal laws, regulations, and policies 76.12 governing human services; 76.13 (b) monitor, on an ongoing basis, the performance of county 76.14 agencies in the operation and administration of human services, 76.15 enforce compliance with statutes, rules, federal laws, 76.16 regulations, and policies governing welfare services and promote 76.17 excellence of administration and program operation; 76.18 (c) develop a quality control program or other monitoring 76.19 program to review county performance and accuracy of benefit 76.20 determinations; 76.21 (d) require county agencies to make an adjustment to the 76.22 public assistance benefits issued to any individual consistent 76.23 with federal law and regulation and state law and rule and to 76.24 issue or recover benefits as appropriate; 76.25 (e) delay or deny payment of all or part of the state and 76.26 federal share of benefits and administrative reimbursement 76.27 according to the procedures set forth in section 256.017; 76.28 (f) make contracts with and grants to public and private 76.29 agencies and organizations, both profit and nonprofit, and 76.30 individuals, using appropriated funds; and 76.31 (g) enter into contractual agreements with federally 76.32 recognized Indian tribes with a reservation in Minnesota to the 76.33 extent necessary for the tribe to operate a federally approved 76.34 family assistance program or any other program under the 76.35 supervision of the commissioner. The commissioner shall consult 76.36 with the affected county or counties in the contractual 77.1 agreement negotiations, if the county or counties wish to be 77.2 included, in order to avoid the duplication of county and tribal 77.3 assistance program services. The commissioner may establish 77.4 necessary accounts for the purposes of receiving and disbursing 77.5 funds as necessary for the operation of the programs. 77.6 (2) Inform county agencies, on a timely basis, of changes 77.7 in statute, rule, federal law, regulation, and policy necessary 77.8 to county agency administration of the programs. 77.9 (3) Administer and supervise all child welfare activities; 77.10 promote the enforcement of laws protecting handicapped, 77.11 dependent, neglected and delinquent children, and children born 77.12 to mothers who were not married to the children's fathers at the 77.13 times of the conception nor at the births of the children; 77.14 license and supervise child-caring and child-placing agencies 77.15 and institutions; supervise the care of children in boarding and 77.16 foster homes or in private institutions; and generally perform 77.17 all functions relating to the field of child welfare now vested 77.18 in the state board of control. 77.19 (4) Administer and supervise all noninstitutional service 77.20 to handicapped persons, including those who are visually 77.21 impaired, hearing impaired, or physically impaired or otherwise 77.22 handicapped. The commissioner may provide and contract for the 77.23 care and treatment of qualified indigent children in facilities 77.24 other than those located and available at state hospitals when 77.25 it is not feasible to provide the service in state hospitals. 77.26 (5) Assist and actively cooperate with other departments, 77.27 agencies and institutions, local, state, and federal, by 77.28 performing services in conformity with the purposes of Laws 77.29 1939, chapter 431. 77.30 (6) Act as the agent of and cooperate with the federal 77.31 government in matters of mutual concern relative to and in 77.32 conformity with the provisions of Laws 1939, chapter 431, 77.33 including the administration of any federal funds granted to the 77.34 state to aid in the performance of any functions of the 77.35 commissioner as specified in Laws 1939, chapter 431, and 77.36 including the promulgation of rules making uniformly available 78.1 medical care benefits to all recipients of public assistance, at 78.2 such times as the federal government increases its participation 78.3 in assistance expenditures for medical care to recipients of 78.4 public assistance, the cost thereof to be borne in the same 78.5 proportion as are grants of aid to said recipients. 78.6 (7) Establish and maintain any administrative units 78.7 reasonably necessary for the performance of administrative 78.8 functions common to all divisions of the department. 78.9 (8) Act as designated guardian of both the estate and the 78.10 person of all the wards of the state of Minnesota, whether by 78.11 operation of law or by an order of court, without any further 78.12 act or proceeding whatever, except as to persons committed as 78.13 mentally retarded. For children under the guardianship of the 78.14 commissioner whose interests would be best served by adoptive 78.15 placement, the commissioner may contract with a licensed 78.16 child-placing agency or a Minnesota tribal social services 78.17 agency to provide adoption services. A contract with a licensed 78.18 child-placing agency must be designed to supplement existing 78.19 county efforts and may not replace existing county programs, 78.20 unless the replacement is agreed to by the county board and the 78.21 appropriate exclusive bargaining representative or the 78.22 commissioner has evidence that child placements of the county 78.23 continue to be substantially below that of other counties. 78.24 Funds encumbered and obligated under an agreement for a specific 78.25 child shall remain available until the terms of the agreement 78.26 are fulfilled or the agreement is terminated. 78.27 (9) Act as coordinating referral and informational center 78.28 on requests for service for newly arrived immigrants coming to 78.29 Minnesota. 78.30 (10) The specific enumeration of powers and duties as 78.31 hereinabove set forth shall in no way be construed to be a 78.32 limitation upon the general transfer of powers herein contained. 78.33 (11) Establish county, regional, or statewide schedules of 78.34 maximum fees and charges which may be paid by county agencies 78.35 for medical, dental, surgical, hospital, nursing and nursing 78.36 home care and medicine and medical supplies under all programs 79.1 of medical care provided by the state and for congregate living 79.2 care under the income maintenance programs. 79.3 (12) Have the authority to conduct and administer 79.4 experimental projects to test methods and procedures of 79.5 administering assistance and services to recipients or potential 79.6 recipients of public welfare. To carry out such experimental 79.7 projects, it is further provided that the commissioner of human 79.8 services is authorized to waive the enforcement of existing 79.9 specific statutory program requirements, rules, and standards in 79.10 one or more counties. The order establishing the waiver shall 79.11 provide alternative methods and procedures of administration, 79.12 shall not be in conflict with the basic purposes, coverage, or 79.13 benefits provided by law, and in no event shall the duration of 79.14 a project exceed four years. It is further provided that no 79.15 order establishing an experimental project as authorized by the 79.16 provisions of this section shall become effective until the 79.17 following conditions have been met: 79.18 (a) The secretary of health and human services of the 79.19 United States has agreed, for the same project, to waive state 79.20 plan requirements relative to statewide uniformity. 79.21 (b) A comprehensive plan, including estimated project 79.22 costs, shall be approved by the legislative advisory commission 79.23 and filed with the commissioner of administration. 79.24 (13) According to federal requirements, establish 79.25 procedures to be followed by local welfare boards in creating 79.26 citizen advisory committees, including procedures for selection 79.27 of committee members. 79.28 (14) Allocate federal fiscal disallowances or sanctions 79.29 which are based on quality control error rates for the aid to 79.30 families with dependent children program formerly codified in 79.31 sections 256.72 to 256.87, medical assistance, or food stamp 79.32 program in the following manner: 79.33 (a) One-half of the total amount of the disallowance shall 79.34 be borne by the county boards responsible for administering the 79.35 programs. For the medical assistance and the AFDC program 79.36 formerly codified in sections 256.72 to 256.87, disallowances 80.1 shall be shared by each county board in the same proportion as 80.2 that county's expenditures for the sanctioned program are to the 80.3 total of all counties' expenditures for the AFDC program 80.4 formerly codified in sections 256.72 to 256.87, and medical 80.5 assistance programs. For the food stamp program, sanctions 80.6 shall be shared by each county board, with 50 percent of the 80.7 sanction being distributed to each county in the same proportion 80.8 as that county's administrative costs for food stamps are to the 80.9 total of all food stamp administrative costs for all counties, 80.10 and 50 percent of the sanctions being distributed to each county 80.11 in the same proportion as that county's value of food stamp 80.12 benefits issued are to the total of all benefits issued for all 80.13 counties. Each county shall pay its share of the disallowance 80.14 to the state of Minnesota. When a county fails to pay the 80.15 amount due hereunder, the commissioner may deduct the amount 80.16 from reimbursement otherwise due the county, or the attorney 80.17 general, upon the request of the commissioner, may institute 80.18 civil action to recover the amount due. 80.19 (b) Notwithstanding the provisions of paragraph (a), if the 80.20 disallowance results from knowing noncompliance by one or more 80.21 counties with a specific program instruction, and that knowing 80.22 noncompliance is a matter of official county board record, the 80.23 commissioner may require payment or recover from the county or 80.24 counties, in the manner prescribed in paragraph (a), an amount 80.25 equal to the portion of the total disallowance which resulted 80.26 from the noncompliance, and may distribute the balance of the 80.27 disallowance according to paragraph (a). 80.28 (15) Develop and implement special projects that maximize 80.29 reimbursements and result in the recovery of money to the 80.30 state. For the purpose of recovering state money, the 80.31 commissioner may enter into contracts with third parties. Any 80.32 recoveries that result from projects or contracts entered into 80.33 under this paragraph shall be deposited in the state treasury 80.34 and credited to a special account until the balance in the 80.35 account reaches $1,000,000. When the balance in the account 80.36 exceeds $1,000,000, the excess shall be transferred and credited 81.1 to the general fund. All money in the account is appropriated 81.2 to the commissioner for the purposes of this paragraph. 81.3 (16) Have the authority to make direct payments to 81.4 facilities providing shelter to women and their children 81.5 according to section 256D.05, subdivision 3. Upon the written 81.6 request of a shelter facility that has been denied payments 81.7 under section 256D.05, subdivision 3, the commissioner shall 81.8 review all relevant evidence and make a determination within 30 81.9 days of the request for review regarding issuance of direct 81.10 payments to the shelter facility. Failure to act within 30 days 81.11 shall be considered a determination not to issue direct payments. 81.12 (17) Have the authority to establish and enforce the 81.13 following county reporting requirements: 81.14 (a) The commissioner shall establish fiscal and statistical 81.15 reporting requirements necessary to account for the expenditure 81.16 of funds allocated to counties for human services programs. 81.17 When establishing financial and statistical reporting 81.18 requirements, the commissioner shall evaluate all reports, in 81.19 consultation with the counties, to determine if the reports can 81.20 be simplified or the number of reports can be reduced. 81.21 (b) The county board shall submit monthly or quarterly 81.22 reports to the department as required by the commissioner. 81.23 Monthly reports are due no later than 15 working days after the 81.24 end of the month. Quarterly reports are due no later than 30 81.25 calendar days after the end of the quarter, unless the 81.26 commissioner determines that the deadline must be shortened to 81.27 20 calendar days to avoid jeopardizing compliance with federal 81.28 deadlines or risking a loss of federal funding. Only reports 81.29 that are complete, legible, and in the required format shall be 81.30 accepted by the commissioner. 81.31 (c) If the required reports are not received by the 81.32 deadlines established in clause (b), the commissioner may delay 81.33 payments and withhold funds from the county board until the next 81.34 reporting period. When the report is needed to account for the 81.35 use of federal funds and the late report results in a reduction 81.36 in federal funding, the commissioner shall withhold from the 82.1 county boards with late reports an amount equal to the reduction 82.2 in federal funding until full federal funding is received. 82.3 (d) A county board that submits reports that are late, 82.4 illegible, incomplete, or not in the required format for two out 82.5 of three consecutive reporting periods is considered 82.6 noncompliant. When a county board is found to be noncompliant, 82.7 the commissioner shall notify the county board of the reason the 82.8 county board is considered noncompliant and request that the 82.9 county board develop a corrective action plan stating how the 82.10 county board plans to correct the problem. The corrective 82.11 action plan must be submitted to the commissioner within 45 days 82.12 after the date the county board received notice of noncompliance. 82.13 (e) The final deadline for fiscal reports or amendments to 82.14 fiscal reports is one year after the date the report was 82.15 originally due. If the commissioner does not receive a report 82.16 by the final deadline, the county board forfeits the funding 82.17 associated with the report for that reporting period and the 82.18 county board must repay any funds associated with the report 82.19 received for that reporting period. 82.20 (f) The commissioner may not delay payments, withhold 82.21 funds, or require repayment under paragraph (c) or (e) if the 82.22 county demonstrates that the commissioner failed to provide 82.23 appropriate forms, guidelines, and technical assistance to 82.24 enable the county to comply with the requirements. If the 82.25 county board disagrees with an action taken by the commissioner 82.26 under paragraph (c) or (e), the county board may appeal the 82.27 action according to sections 14.57 to 14.69. 82.28 (g) Counties subject to withholding of funds under 82.29 paragraph (c) or forfeiture or repayment of funds under 82.30 paragraph (e) shall not reduce or withhold benefits or services 82.31 to clients to cover costs incurred due to actions taken by the 82.32 commissioner under paragraph (c) or (e). 82.33 (18) Allocate federal fiscal disallowances or sanctions for 82.34 audit exceptions when federal fiscal disallowances or sanctions 82.35 are based on a statewide random sample for the foster care 82.36 program under title IV-E of the Social Security Act, United 83.1 States Code, title 42, in direct proportion to each county's 83.2 title IV-E foster care maintenance claim for that period. 83.3 (19) Be responsible for ensuring the detection, prevention, 83.4 investigation, and resolution of fraudulent activities or 83.5 behavior by applicants, recipients, and other participants in 83.6 the human services programs administered by the department. 83.7 (20) Require county agencies to identify overpayments, 83.8 establish claims, and utilize all available and cost-beneficial 83.9 methodologies to collect and recover these overpayments in the 83.10 human services programs administered by the department. 83.11 (21) Have the authority to administer a drug rebate program 83.12 for drugs purchased pursuant to the prescription drug program 83.13 established under section 256.955 after the beneficiary's 83.14 satisfaction of any deductible established in the program. The 83.15 commissioner shall require a rebate agreement from all 83.16 manufacturers of covered drugs as defined in section 256B.0625, 83.17 subdivision 13. Rebate agreements for prescription drugs 83.18 delivered on or after July 1, 2002, must include rebates for 83.19 individuals covered under the prescription drug program who are 83.20 under 65 years of age. For each drug, the amount of the rebate 83.21 shall be equal to the basic rebate as defined for purposes of 83.22 the federal rebate program in United States Code, title 42, 83.23 section 1396r-8(c)(1). This basic rebate shall be applied to 83.24 single-source and multiple-source drugs. The manufacturers must 83.25 provide full payment within 30 days of receipt of the state 83.26 invoice for the rebate within the terms and conditions used for 83.27 the federal rebate program established pursuant to section 1927 83.28 of title XIX of the Social Security Act. The manufacturers must 83.29 provide the commissioner with any information necessary to 83.30 verify the rebate determined per drug. The rebate program shall 83.31 utilize the terms and conditions used for the federal rebate 83.32 program established pursuant to section 1927 of title XIX of the 83.33 Social Security Act. 83.34 (22) Have the authority to administer the federal drug 83.35 rebate program for drugs purchased under the medical assistance 83.36 program as allowed by section 1927 of title XIX of the Social 84.1 Security Act and according to the terms and conditions of 84.2 section 1927. Rebates shall be collected for all drugs that 84.3 have been dispensed or administered in an outpatient setting and 84.4 that are from manufacturers who have signed a rebate agreement 84.5 with the United States Department of Health and Human Services. 84.6 (23) Have the authority to administer a supplemental drug 84.7 rebate program for drugs purchased under the medical assistance 84.8 programand under the prescription drug program established in84.9section 256.955. The commissioner may enter into supplemental 84.10 rebate contracts with pharmaceutical manufacturers and may 84.11 require prior authorization for drugs that are from 84.12 manufacturers that have not signed a supplemental rebate 84.13 contract. Prior authorization of drugs shall be subject to the 84.14 provisions of section 256B.0625, subdivision 13, paragraph (b). 84.15 (24) Operate the department's communication systems account 84.16 established in Laws 1993, First Special Session chapter 1, 84.17 article 1, section 2, subdivision 2, to manage shared 84.18 communication costs necessary for the operation of the programs 84.19 the commissioner supervises. A communications account may also 84.20 be established for each regional treatment center which operates 84.21 communications systems. Each account must be used to manage 84.22 shared communication costs necessary for the operations of the 84.23 programs the commissioner supervises. The commissioner may 84.24 distribute the costs of operating and maintaining communication 84.25 systems to participants in a manner that reflects actual usage. 84.26 Costs may include acquisition, licensing, insurance, 84.27 maintenance, repair, staff time and other costs as determined by 84.28 the commissioner. Nonprofit organizations and state, county, 84.29 and local government agencies involved in the operation of 84.30 programs the commissioner supervises may participate in the use 84.31 of the department's communications technology and share in the 84.32 cost of operation. The commissioner may accept on behalf of the 84.33 state any gift, bequest, devise or personal property of any 84.34 kind, or money tendered to the state for any lawful purpose 84.35 pertaining to the communication activities of the department. 84.36 Any money received for this purpose must be deposited in the 85.1 department's communication systems accounts. Money collected by 85.2 the commissioner for the use of communication systems must be 85.3 deposited in the state communication systems account and is 85.4 appropriated to the commissioner for purposes of this section. 85.5 (25) Receive any federal matching money that is made 85.6 available through the medical assistance program for the 85.7 consumer satisfaction survey. Any federal money received for 85.8 the survey is appropriated to the commissioner for this 85.9 purpose. The commissioner may expend the federal money received 85.10 for the consumer satisfaction survey in either year of the 85.11 biennium. 85.12 (26) Incorporate cost reimbursement claims from First Call 85.13 Minnesota and Greater Twin Cities United Way into the federal 85.14 cost reimbursement claiming processes of the department 85.15 according to federal law, rule, and regulations. Any 85.16 reimbursement received is appropriated to the commissioner and 85.17 shall be disbursed to First Call Minnesota and Greater Twin 85.18 Cities United Way according to normal department payment 85.19 schedules. 85.20 (27) Develop recommended standards for foster care homes 85.21 that address the components of specialized therapeutic services 85.22 to be provided by foster care homes with those services. 85.23 Sec. 6. Minnesota Statutes 2000, section 256.9657, 85.24 subdivision 1, as amended by Laws 2002, chapter 220, article 14, 85.25 section 5, is amended to read: 85.26 Subdivision 1. [NURSING HOME LICENSE SURCHARGE.] (a) 85.27 Effective July 1, 1993, each non-state-operated nursing home 85.28 licensed under chapter 144A shall pay to the commissioner an 85.29 annual surcharge according to the schedule in subdivision 4. 85.30 The surcharge shall be calculated as $620 per licensed bed. If 85.31 the number of licensed beds is reduced, the surcharge shall be 85.32 based on the number of remaining licensed beds the second month 85.33 following the receipt of timely notice by the commissioner of 85.34 human services that beds have been delicensed. The nursing home 85.35 must notify the commissioner of health in writing when beds are 85.36 delicensed. The commissioner of health must notify the 86.1 commissioner of human services within ten working days after 86.2 receiving written notification. If the notification is received 86.3 by the commissioner of human services by the 15th of the month, 86.4 the invoice for the second following month must be reduced to 86.5 recognize the delicensing of beds. Beds on layaway status 86.6 continue to be subject to the surcharge. The commissioner of 86.7 human services must acknowledge a medical care surcharge appeal 86.8 within 30 days of receipt of the written appeal from the 86.9 provider. 86.10 (b) Effective July 1, 1994, the surcharge in paragraph (a) 86.11 shall be increased to $625. 86.12 (c) Effective August 15, 2003, the surcharge under 86.13 paragraph (b) shall be increased by an amount necessary to 86.14 ensure a net gain to the general fund of $9,620,000 during 86.15 fiscal year 2004 as a result of: 86.16 (1) the total transfers anticipated during the fiscal year 86.17 ending June 30, 2004, under section 256B.19, subdivision 1d, 86.18 paragraph (c); 86.19 (2) the county nursing home payment adjustments under 86.20 section 256B.431, subdivision 23, paragraph (c); 86.21 (3) the surcharges under this paragraph; and 86.22 (4) the nursing facility rate increases under section 86.23 256B.431, subdivision 37. 86.24 The increase under this paragraph shall not exceed $365 per bed. 86.25 (d) Effective August 15, 2004, the surcharge under 86.26 paragraph (c) shall be equal to an amount necessary to ensure a 86.27 net gain to the general fund each fiscal year of $10,228,000 as 86.28 a result of: 86.29 (1) the total transfers anticipated during the fiscal year 86.30 under section 256B.19, subdivision 1d, paragraph (c); 86.31 (2) the county nursing home payment adjustments under 86.32 section 256B.431, subdivision 23, paragraph (c); 86.33 (3) the surcharges under this paragraph; and 86.34 (4) the nursing facility rate increases under section 86.35 256B.431, subdivision 37. 86.36 The surcharge under this paragraph shall not exceed $365 per bed. 87.1 (e) Between April 1, 2002, and August 15, 2003, a facility 87.2 governed by this subdivision may elect to assume full 87.3 participation in the medical assistance program by agreeing to 87.4 comply with all of the requirements of the medical assistance 87.5 program, including the rate equalization law in section 256B.48, 87.6 subdivision 1, paragraph (a), and all other requirements 87.7 established in law or rule, and to begin intake of new medical 87.8 assistance recipients. Rates will be determined under Minnesota 87.9 Rules, parts 9549.0010 to 9549.0080. Notwithstanding section 87.10 256B.431, subdivision 27, paragraph (i), rate calculations will 87.11 be subject to limits as prescribed in rule and law. Other than 87.12 the adjustments in Minnesota Rules, part 9549.0057; sections 87.13 256B.431, subdivisions 30 and 32; 256B.437, subdivision 3, 87.14 paragraph (b), and any other applicable legislation enacted 87.15 prior to the finalization of rates, facilities assuming full 87.16 participation in medical assistance under this paragraph are not 87.17 eligible for any rate adjustments until the July 1 following 87.18 their settle-up period. 87.19[EFFECTIVE DATE.] This section is effective April 1, 2002. 87.20 Sec. 7. Minnesota Statutes 2001 Supplement, section 87.21 256B.057, subdivision 9, is amended to read: 87.22 Subd. 9. [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 87.23 assistance may be paid for a person who is employed and who: 87.24 (1) meets the definition of disabled under the supplemental 87.25 security income program; 87.26 (2) is at least 16 but less than 65 years of age; 87.27 (3) meets the asset limits in paragraph (b); and 87.28 (4) pays a premium, if required, under paragraph (c). 87.29 The person must verify earnings from employment by documenting 87.30 that social security and Medicare taxes are withheld, and, if 87.31 applicable, state and federal income taxes are also withheld. 87.32 If the person is self-employed, the person must document payment 87.33 of self-employment tax and, if applicable, state and federal 87.34 income taxes. 87.35 Any spousal income or assets shall be disregarded for purposes 87.36 of eligibility and premium determinations. 88.1 After the month of enrollment, a person enrolled in medical 88.2 assistance under this subdivision who is temporarily unable to 88.3 work and without receipt of earned income due to a medical 88.4 condition, as verified by a physician, may retain eligibility 88.5 for up to four calendar months. 88.6 (b) For purposes of determining eligibility under this 88.7 subdivision, a person's assets must not exceed $20,000, 88.8 excluding: 88.9 (1) all assets excluded under section 256B.056; 88.10 (2) retirement accounts, including individual accounts, 88.11 401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 88.12 (3) medical expense accounts set up through the person's 88.13 employer. 88.14 (c) A person whose earned and unearned income is equal to 88.15 or greater than 100 percent of federal poverty guidelines for 88.16 the applicable family size must pay a premium to be eligible for 88.17 medical assistance under this subdivision. The premium shall be 88.18 based on the person's gross earned and unearned income and the 88.19 applicable family size using a sliding fee scale established by 88.20 the commissioner, which begins at one percent of income at 100 88.21 percent of the federal poverty guidelines and increases to 7.5 88.22 percent of income for those with incomes at or above 300 percent 88.23 of the federal poverty guidelines. Annual adjustments in the 88.24 premium schedule based upon changes in the federal poverty 88.25 guidelines shall be effective for premiums due in July of each 88.26 year. 88.27 (d) A person's eligibility and premium shall be determined 88.28 by the local county agency. Premiums must be paid to the 88.29 commissioner. All premiums are dedicated to the commissioner. 88.30 (e) Any required premium shall be determined at application 88.31 and redetermined annually at recertification or when a change in 88.32 income or family size occurs. 88.33 (f) Premium payment is due upon notification from the 88.34 commissioner of the premium amount required. Premiums may be 88.35 paid in installments at the discretion of the commissioner. 88.36 (g) Nonpayment of the premium shall result in denial or 89.1 termination of medical assistance unless the person demonstrates 89.2 good cause for nonpayment. Good cause exists if the 89.3 requirements specified in Minnesota Rules, part 9506.0040, 89.4 subpart 7, items B to D, are met. Nonpayment shall include 89.5 payment with a returned, refused, or dishonored instrument. The 89.6 commissioner may require a guaranteed form of payment as the 89.7 only means to replace a returned, refused, or dishonored 89.8 instrument. 89.9 Sec. 8. Minnesota Statutes 2001 Supplement, section 89.10 256B.0625, subdivision 13, as amended by Laws 2002, chapter 220, 89.11 article 15, section 13, is amended to read: 89.12 Subd. 13. [DRUGS.] (a) Medical assistance covers drugs, 89.13 except for fertility drugs when specifically used to enhance 89.14 fertility, if prescribed by a licensed practitioner and 89.15 dispensed by a licensed pharmacist, by a physician enrolled in 89.16 the medical assistance program as a dispensing physician, or by 89.17 a physician or a nurse practitioner employed by or under 89.18 contract with a community health board as defined in section 89.19 145A.02, subdivision 5, for the purposes of communicable disease 89.20 control. The commissioner, after receiving recommendations from 89.21 professional medical associations and professional pharmacist 89.22 associations, shall designate a formulary committee to advise 89.23 the commissioner on the names of drugs for which payment is 89.24 made, recommend a system for reimbursing providers on a set fee 89.25 or charge basis rather than the present system, and develop 89.26 methods encouraging use of generic drugs when they are less 89.27 expensive and equally effective as trademark drugs. The 89.28 formulary committee shall consist of nine members, four of whom 89.29 shall be physicians who are not employed by the department of 89.30 human services, and a majority of whose practice is for persons 89.31 paying privately or through health insurance, three of whom 89.32 shall be pharmacists who are not employed by the department of 89.33 human services, and a majority of whose practice is for persons 89.34 paying privately or through health insurance, a consumer 89.35 representative, and a nursing home representative. Committee 89.36 members shall serve three-year terms and shall serve without 90.1 compensation. Members may be reappointed once. 90.2 (b) The commissioner shall establish a drug formulary. Its 90.3 establishment and publication shall not be subject to the 90.4 requirements of the Administrative Procedure Act, but the 90.5 formulary committee shall review and comment on the formulary 90.6 contents. 90.7 The formulary shall not include: 90.8 (i) drugs or products for which there is no federal 90.9 funding; 90.10 (ii) over-the-counter drugs, except for antacids, 90.11 acetaminophen, family planning products, aspirin, insulin, 90.12 products for the treatment of lice, vitamins for adults with 90.13 documented vitamin deficiencies, vitamins for children under the 90.14 age of seven and pregnant or nursing women, and any other 90.15 over-the-counter drug identified by the commissioner, in 90.16 consultation with the drug formulary committee, as necessary, 90.17 appropriate, and cost-effective for the treatment of certain 90.18 specified chronic diseases, conditions or disorders, and this 90.19 determination shall not be subject to the requirements of 90.20 chapter 14; 90.21 (iii) anorectics, except that medically necessary 90.22 anorectics shall be covered for a recipient previously diagnosed 90.23 as having pickwickian syndrome and currently diagnosed as having 90.24 diabetes and being morbidly obese; 90.25 (iv) drugs for which medical value has not been 90.26 established; and 90.27 (v) drugs from manufacturers who have not signed a rebate 90.28 agreement with the Department of Health and Human Services 90.29 pursuant to section 1927 of title XIX of the Social Security Act. 90.30 The commissioner shall publish conditions for prohibiting 90.31 payment for specific drugs after considering the formulary 90.32 committee's recommendations. An honorarium of $100 per meeting 90.33 and reimbursement for mileage shall be paid to each committee 90.34 member in attendance. 90.35 (c) The basis for determining the amount of payment shall 90.36 be the lower of the actual acquisition costs of the drugs plus a 91.1 fixed dispensing fee; the maximum allowable cost set by the 91.2 federal government or by the commissioner plus the fixed 91.3 dispensing fee; or the usual and customary price charged to the 91.4 public. The pharmacy dispensing fee shall be$3.65$4.15, 91.5 except that the dispensing fee for intravenous solutions which 91.6 must be compounded by the pharmacist shall be $8 per bag, $14 91.7 per bag for cancer chemotherapy products, and $30 per bag for 91.8 total parenteral nutritional products dispensed in one liter 91.9 quantities, or $44 per bag for total parenteral nutritional 91.10 products dispensed in quantities greater than one liter. Actual 91.11 acquisition cost includes quantity and other special discounts 91.12 except time and cash discounts. The actual acquisition cost of 91.13 a drug shall be estimated by the commissioner, at average 91.14 wholesale price minusnine14 percent, except that where a drug 91.15 has had its wholesale price reduced as a result of the actions 91.16 of the National Association of Medicaid Fraud Control Units, the 91.17 estimated actual acquisition cost shall be the reduced average 91.18 wholesale price, without thenine14 percent deduction. The 91.19 maximum allowable cost of a multisource drug may be set by the 91.20 commissioner and it shall be comparable to, but no higher than, 91.21 the maximum amount paid by other third-party payors in this 91.22 state who have maximum allowable cost programs.The91.23commissioner shall set maximum allowable costs for multisource91.24drugs that are not on the federal upper limit list as described91.25in United States Code, title 42, chapter 7, section 1396r-8(e),91.26the Social Security Act, and Code of Federal Regulations, title91.2742, part 447, section 447.332. Establishment of the amount of91.28payment for drugs shall not be subject to the requirements of91.29the Administrative Procedure Act.An additional dispensing fee 91.30 of $.30 may be added to the dispensing fee paid to pharmacists 91.31 for legend drug prescriptions dispensed to residents of 91.32 long-term care facilities when a unit dose blister card system, 91.33 approved by the department, is used. Under this type of 91.34 dispensing system, the pharmacist must dispense a 30-day supply 91.35 of drug. The National Drug Code (NDC) from the drug container 91.36 used to fill the blister card must be identified on the claim to 92.1 the department. The unit dose blister card containing the drug 92.2 must meet the packaging standards set forth in Minnesota Rules, 92.3 part 6800.2700, that govern the return of unused drugs to the 92.4 pharmacy for reuse. The pharmacy provider will be required to 92.5 credit the department for the actual acquisition cost of all 92.6 unused drugs that are eligible for reuse. Over-the-counter 92.7 medications must be dispensed in the manufacturer's unopened 92.8 package. The commissioner may permit the drug clozapine to be 92.9 dispensed in a quantity that is less than a 30-day supply. 92.10 Whenever a generically equivalent product is available, payment 92.11 shall be on the basis of the actual acquisition cost of the 92.12 generic drug, unless the prescriber specifically indicates 92.13 "dispense as written - brand necessary" on the prescription as 92.14 required by section 151.21, subdivision 2. 92.15 (d)For purposes of this subdivision, "multisource drugs"92.16means covered outpatient drugs, excluding innovator multisource92.17drugs for which there are two or more drug products, which:92.18(1) are related as therapeutically equivalent under the92.19Food and Drug Administration's most recent publication of92.20"Approved Drug Products with Therapeutic Equivalence92.21Evaluations";92.22(2) are pharmaceutically equivalent and bioequivalent as92.23determined by the Food and Drug Administration; and92.24(3) are sold or marketed in Minnesota.92.25"Innovator multisource drug" means a multisource drug that was92.26originally marketed under an original new drug application92.27approved by the Food and Drug AdministrationEffective for 92.28 prescriptions dispensed on or after July 1, 2002, the 92.29 commissioner, may, within the limits of available appropriation, 92.30 increase the dispensing fee described in paragraph (c) to 92.31 pharmacies deemed by the commissioner to be a critical-access 92.32 pharmacy. In determining whether a pharmacy shall be deemed a 92.33 critical-access pharmacy, the commissioner shall consider the 92.34 following criteria: 92.35 (1) for pharmacies located outside the seven-county 92.36 metropolitan area: 93.1 (i) the total annual sum of the pharmacy's fee-for-service 93.2 medical assistance payments for the previous year in all 93.3 locations, excluding payments for prescriptions dispensed to 93.4 residents residing in nursing homes. The pharmacy's total 93.5 annual sum must be no greater than $300,000; and 93.6 (ii) the proximity of the pharmacy to other medical 93.7 assistance pharmacy providers in a specified geographic area; 93.8 and 93.9 (2) for pharmacies located within the seven-county 93.10 metropolitan area: 93.11 (i) the percentage of the pharmacy's annual fee-for-service 93.12 medical assistance payments in that location, excluding payments 93.13 for prescriptions dispensed to residents in nursing homes 93.14 compared to the pharmacy's total annual prescription drug 93.15 sales. The pharmacy's percentage must be greater than the 93.16 average percentage for pharmacies enrolled as a medical 93.17 assistance provider; and 93.18 (ii) the proximity of the pharmacy to other medical 93.19 assistance pharmacy providers in a specified geographic area. 93.20 The commissioner may establish regions within the state for 93.21 purposes of applying this criteria and may assign different 93.22 weights to the criteria depending on the region. 93.23 (e) The formulary committee shall review and recommend 93.24 drugs which require prior authorization. The formulary 93.25 committee may recommend drugs for prior authorization directly 93.26 to the commissioner, as long as opportunity for public input is 93.27 provided. Prior authorization may be requested by the 93.28 commissioner based on medical and clinical criteria and on cost 93.29 before certain drugs are eligible for payment. Before a drug 93.30 may be considered for prior authorization at the request of the 93.31 commissioner: 93.32 (1) the drug formulary committee must develop criteria to 93.33 be used for identifying drugs; the development of these criteria 93.34 is not subject to the requirements of chapter 14, but the 93.35 formulary committee shall provide opportunity for public input 93.36 in developing criteria; 94.1 (2) the drug formulary committee must hold a public forum 94.2 and receive public comment for an additional 15 days;and94.3 (3) the drug formulary committee must consider data from 94.4 the state Medicaid program if such data is available; and 94.5 (4) the commissioner must provide information to the 94.6 formulary committee on the impact that placing the drug on prior 94.7 authorization will have on the quality of patient care and on 94.8 program costs, and information regarding whether the drug is 94.9 subject to clinical abuse or misuse. 94.10 Prior authorization may be required by the commissioner 94.11 before certain formulary drugs are eligible for payment. If 94.12 prior authorization of a drug is required by the commissioner, 94.13 the commissioner must provide a 30-day notice period before 94.14 implementing the prior authorization. If a prior authorization 94.15 request is denied by the department, the recipient may appeal 94.16 the denial in accordance with section 256.045. If an appeal is 94.17 filed, the drug must be provided without prior authorization 94.18 until a decision is made on the appeal. 94.19 (f) The basis for determining the amount of payment for 94.20 drugs administered in an outpatient setting shall be the lower 94.21 of the usual and customary cost submitted by the provider; the 94.22 average wholesale price minus five percent; or the maximum 94.23 allowable cost set by the federal government under United States 94.24 Code, title 42, chapter 7, section 1396r-8(e), and Code of 94.25 Federal Regulations, title 42, section 447.332, or by the 94.26 commissioner under paragraph (c). 94.27 (g) Prior authorization shall not be required or utilized 94.28 for any antipsychotic drug prescribed for the treatment of 94.29 mental illness where there is no generically equivalent drug 94.30 available unless the commissioner determines that prior 94.31 authorization is necessary for patient safety. This paragraph 94.32 applies to any supplemental drug rebate program established or 94.33 administered by the commissioner. 94.34 Sec. 9. Minnesota Statutes 2000, section 256B.19, 94.35 subdivision 1, as amended by Laws 2002, chapter 220, article 14, 94.36 section 7, is amended to read: 95.1 Subdivision 1. [DIVISION OF COST.] The state and county 95.2 share of medical assistance costs not paid by federal funds 95.3 shall be as follows: 95.4 (1)ninety90 percent state funds and ten percent county 95.5 funds, unless otherwise provided below; 95.6 (2) beginning January 1, 1992, 50 percent state funds and 95.7 50 percent county funds for the cost of placement of severely 95.8 emotionally disturbed children in regional treatment centers; 95.9 and 95.10 (3) beginning January 1, 2003, 80 percent state funds and 95.11 20 percent county funds for the costs of nursing facility 95.12 placements of persons with disabilities under the age of 65 that 95.13 have exceeded 90 days. This clause shall be subject to chapter 95.14 256G and shall not apply to placements in facilities not 95.15 certified to participate in medical assistance. 95.16 For counties that participate in a Medicaid demonstration 95.17 project under sections 256B.69 and 256B.71, the division of the 95.18 nonfederal share of medical assistance expenses for payments 95.19 made to prepaid health plans or for payments made to health 95.20 maintenance organizations in the form of prepaid capitation 95.21 payments, this division of medical assistance expenses shall be 95.22 95 percent by the state and five percent by the county of 95.23 financial responsibility. 95.24 In counties where prepaid health plans are under contract 95.25 to the commissioner to provide services to medical assistance 95.26 recipients, the cost of court ordered treatment ordered without 95.27 consulting the prepaid health plan that does not include 95.28 diagnostic evaluation, recommendation, and referral for 95.29 treatment by the prepaid health plan is the responsibility of 95.30 the county of financial responsibility. 95.31 Sec. 10. Minnesota Statutes 2000, section 256B.69, 95.32 subdivision 5a, as amended by Laws 2002, chapter 220, article 95.33 15, section 15, is amended to read: 95.34 Subd. 5a. [MANAGED CARE CONTRACTS.] (a) Managed care 95.35 contracts under this section and sections 256L.12 and 256D.03, 95.36 shall be entered into or renewed on a calendar year basis 96.1 beginning January 1, 1996. Managed care contracts which were in 96.2 effect on June 30, 1995, and set to renew on July 1, 1995, shall 96.3 be renewed for the period July 1, 1995 through December 31, 1995 96.4 at the same terms that were in effect on June 30, 1995. 96.5 (b) A prepaid health plan providing covered health services 96.6 for eligible persons pursuant to chapters 256B, 256D, and 256L, 96.7 is responsible for complying with the terms of its contract with 96.8 the commissioner. Requirements applicable to managed care 96.9 programs under chapters 256B, 256D, and 256L, established after 96.10 the effective date of a contract with the commissioner take 96.11 effect when the contract is next issued or renewed. 96.12 (c) Effective for services rendered on or after January 1, 96.13 2003, the commissioner shall withhold five percent of managed 96.14 care plan payments under this section for the prepaid medical 96.15 assistance and general assistance medical care programs pending 96.16 completion of performance targets. The withheld fundswillmust 96.17 be returned no sooner than July of the following year if 96.18 performance targets in the contract are achieved. The 96.19 commissioner may exclude special demonstration projects under 96.20 subdivision 23. A managed care plan may include as admitted 96.21 assets under section 62D.044 any amount withheld under this 96.22 paragraph that is reasonably expected to be returned. 96.23 Sec. 11. Minnesota Statutes 2000, section 256E.06, 96.24 subdivision 3, is amended to read: 96.25 Subd. 3. [PAYMENTS TO COUNTIES.] The commissioner of human 96.26 services shall make payments for community social services to 96.27 each countyin four installments peron or before July 10 of 96.28 each year.The commissioner of human services may certify the96.29payments for the first three months of a calendar year based on96.30estimates of the unduplicated number of persons receiving96.31Minnesota family investment program assistance, general96.32assistance, and medical assistance for the prior year. The96.33following three payments shall be adjusted to reflect the actual96.34unduplicated number of persons who received Minnesota family96.35investment program assistance, general assistance, and medical96.36assistance as required by subdivision 1. The commissioner shall97.1ensure that the pertinent payment of the allotment for that97.2quarter is made to each county on the first working day after97.3the end of each quarter of the calendar year, except for the97.4last quarter of the calendar year. The commissioner shall97.5ensure that each county receives its payment of the allotment97.6for that quarter no later than the last working day of that97.7quarter. This scheduling of payments does not require97.8compliance with subdivision 10.97.9 Sec. 12. Minnesota Statutes 2000, section 256I.04, 97.10 subdivision 2a, is amended to read: 97.11 Subd. 2a. [LICENSE REQUIRED.] A county agency may not 97.12 enter into an agreement with an establishment to provide group 97.13 residential housing unless: 97.14 (1) the establishment is licensed by the department of 97.15 health as a hotel and restaurant; a board and lodging 97.16 establishment; a residential care home; a boarding care home 97.17 before March 1, 1985; or a supervised living facility, and the 97.18 service provider for residents of the facility is licensed under 97.19 chapter 245A. However, an establishment licensed by the 97.20 department of health to provide lodging need not also be 97.21 licensed to provide board if meals are being supplied to 97.22 residents under a contract with a food vendor who is licensed by 97.23 the department of health; 97.24 (2) the residence is licensed by the commissioner of human 97.25 services under Minnesota Rules, parts 9555.5050 to 9555.6265, or 97.26 certified by a county human services agency prior to July 1, 97.27 1992, using the standards under Minnesota Rules, parts 9555.5050 97.28 to 9555.6265; or 97.29 (3) the establishment is registered under chapter 144D and 97.30 provides three meals a day, except that an establishment 97.31 registered under section 144D.025 is not eligible for an 97.32 agreement to provide group residential housing. 97.33 The requirements under clauses (1), (2), and (3) do not 97.34 apply to establishments exempt from state licensure because they 97.35 are located on Indian reservations and subject to tribal health 97.36 and safety requirements. 98.1 Sec. 13. Minnesota Statutes 2000, section 256L.12, 98.2 subdivision 9, as amended by Laws 2002, chapter 220, article 15, 98.3 section 23, is amended to read: 98.4 Subd. 9. [RATE SETTING.] (a) Rates will be prospective, 98.5 per capita, where possible. The commissioner may allow health 98.6 plans to arrange for inpatient hospital services on a risk or 98.7 nonrisk basis. The commissioner shall consult with an 98.8 independent actuary to determine appropriate rates. 98.9 (b) For services rendered on or after January 1, 2003, the 98.10 commissioner shall withhold .5 percent of managed care plan 98.11 payments under this section pending completion of performance 98.12 targets. The withheld fundswillmust be returned no sooner 98.13 than July 1 and no later than July 31 of the following year if 98.14 performance targets in the contract are achieved. A managed 98.15 care plan may include as admitted assets under section 62D.044 98.16 any amount withheld under this paragraph that is reasonably 98.17 expected to be returned. 98.18 Sec. 14. Laws 2001, First Special Session chapter 9, 98.19 article 2, section 74, is amended to read: 98.20 Sec. 74. [ELIGIBILITY EXCEPTION TO THE PRESCRIPTION DRUG 98.21 PROGRAM.] 98.22 Notwithstanding the requirements of Minnesota Statutes, 98.23 section 256.955, subdivision 2, paragraph (d),from March 1,98.242001, to June 30, 2002,the definition of a "qualified 98.25 individual" in the prescription drug program established under 98.26 Minnesota Statutes, section 256.955, shall include an individual 98.27 who: 98.28 (1) was enrolled in the prescription drug program prior to 98.29 March 1, 2001; 98.30 (2) was enrolled in a Medicare risk plan prior to March 1, 98.31 2001, to which an annual prescription drug benefit of $400 was 98.32 added on March 1, 2001; and 98.33 (3) meets the requirements described in Minnesota Statutes, 98.34 section 256.955, subdivision 2, paragraph (d), clauses (1) and 98.35 (5), and subdivision 2a. 98.36 The prescription benefit offered by the Medicare risk plan shall 99.1 be primary to benefits provided under the prescription drug 99.2 program. 99.3 Sec. 15. Laws 2002, chapter 220, article 17, section 2, 99.4 subdivision 6, is amended to read: 99.5 Subd. 6. Continuing Care 99.6 Grants 99.7 General (8,907,000) (26,227,000) 99.8 The amounts that may be spent from this 99.9 appropriation for each purpose are as 99.10 follows: 99.11 (a) Aging Adult Service 99.12 Grants 99.13 General -0- (2,638,000) 99.14 [PLANNING AND SERVICE DEVELOPMENT.] The 99.15 planning and service development grant 99.16 from Laws 2001, First Special Session 99.17 chapter 9, article 17, section 2, 99.18 subdivision 9, is eliminated for fiscal 99.19 year 2003. Base funding for the 99.20 2004-2005 biennium shall be $550,000 99.21 each year. Notwithstanding Laws 2001, 99.22 First Special Session chapter 9, 99.23 article 17, section 2, subdivision 9, 99.24 beginning in fiscal year 2004, the 99.25 commissioner shall annually distribute 99.26 $5,000 to each county. Counties with 99.27 more than 10,000 persons over age 65 99.28 shall receive a distribution of an 99.29 additional 25 cents for each person 99.30 over age 65. The amount distributed to 99.31 each area agency on aging shall be 99.32 $2,500. 99.33 [COMMUNITY SERVICES DEVELOPMENT 99.34 GRANTS.] For fiscal year 2003, base 99.35 level funding for community services 99.36 development grants under Minnesota 99.37 Statutes, section 256.9754, is reduced 99.38 by $1,478,000. For fiscal year 2004, 99.39 base level funding for these grants is 99.40 reduced by $768,000. For fiscal year 99.41 2005, base level funding shall be 99.42 $3,000,000, and this amount shall be 99.43 the base funding level for these grants 99.44 for the biennium beginning July 1, 99.45 2005. Notwithstanding section 5, this 99.46 provision shall not expire. 99.47 (b) Medical Assistance 99.48 Long-Term Care Waivers and 99.49 Home Care Grants 99.50 General 18,471,000 12,833,000 99.51 (c) Medical Assistance 99.52 Long-Term Care Facilities 99.53 Grants 99.54 General (27,382,000) (31,922,000) 99.55 (d) Group Residential 99.56 Housing Grants 100.1 General 4,000 574,000 100.2[FEDERAL FUNDING FOR GROUP RESIDENTIAL100.3HOUSING COSTS.] The commissioner shall100.4seek federal funding to offset costs100.5for group residential housing services100.6under Minnesota Statutes, chapter 256I.100.7Any federal funding received shall be100.8distributed to counties on a pro rata100.9basis according to county spending100.10under Minnesota Statutes, section100.11256B.19, subdivision 1, clause (3), for100.12the costs of nursing facility100.13placements of persons with disabilities100.14under the age of 65 that have exceeded100.1590 days. The commissioner shall report100.16to the legislature by January 15, 2003,100.17on the status of additional federal100.18funding for group residential housing100.19costs.100.20 (e) Chemical Dependency 100.21 Entitlement Grants 100.22 General -0- (84,000) 100.23 [CONSOLIDATED CHEMICAL DEPENDENCY 100.24 TREATMENT FUND RESERVE TRANSFER.] In 100.25 fiscal year 2003, $8,544,000 of funds 100.26 available in the consolidated chemical 100.27 dependency treatment fund general 100.28 reserve account is transferred to the 100.29 general fund. 100.30 (f) Community Social Services 100.31 Block Grants 100.32 General -0- (4,990,000) 100.33 [CSSA TRADITIONAL APPROPRIATION 100.34 REDUCTION.] For fiscal year 2003, base 100.35 level funding for community social 100.36 service aids under Minnesota Statutes, 100.37 section 256E.06, subdivisions 1 and 2, 100.38 is reduced by $4,700,000. This 100.39 reduction shall become part of base 100.40 level funding for the biennium 100.41 beginning July 1, 2003. 100.42 Notwithstanding section 5, this 100.43 provision shall not expire. 100.44 [CSSA GRANTS FOR FORMER GRH 100.45 RECIPIENTS.] For fiscal year 2003, base 100.46 level funding for community social 100.47 service aids under Minnesota Statutes, 100.48 section 256E.06, subdivision 2b, is 100.49 reduced by $290,000. This reduction 100.50 shall become part of base level funding 100.51 for the biennium beginning July 1, 100.52 2003. These reductions shall be made 100.53 on a pro rata basis to each affected 100.54 county. Notwithstanding section 5, 100.55 this provision shall not expire. 100.56 Sec. 16. [ACCESS TO AFFORDABLE HOUSING.] 100.57 The commissioners of human services and the Minnesota 100.58 housing finance agency shall make recommendations to the 101.1 long-term care task force by January 15, 2003, on ways to 101.2 increase the ability of persons with disabilities to access 101.3 affordable housing. The recommendations shall include: 101.4 (1) income supplement or housing subsidy options that 101.5 support efforts to relocate persons under the age of 65 from 101.6 nursing facilities or to divert them from a nursing facility 101.7 placement; 101.8 (2) an analysis of the impacts of the state using a fixed 101.9 amount attributable to room and board costs for home and 101.10 community-based waiver recipients in group residential settings; 101.11 (3) options to maximize federal funding that result in no 101.12 additional costs to the state. These options may include the 101.13 transfer of state funds between income maintenance programs and 101.14 the Medicaid program. These options may be implemented prior to 101.15 the report to the task force. Any additional funds made 101.16 available through implementation of these options and not 101.17 utilized to support persons relocating from nursing facilities 101.18 shall be used to reduce the county share enacted in Laws 2002, 101.19 chapter 220, article 14, section 8; and 101.20 (4) alternatives that provide additional incentives to 101.21 county agencies that successfully discharge persons with 101.22 disabilities under the age of 65 from nursing facilities. 101.23 Sec. 17. [PRIOR AUTHORIZATION REPORT.] 101.24 The commissioner of human services shall review prior 101.25 authorization of prescription drugs in the fee-for-service 101.26 medical assistance program in terms of the cost effectiveness 101.27 achieved through prior authorization on prescription drug costs 101.28 and on other medical assistance costs and evaluate the effect 101.29 that placing a drug on prior authorization has had on the 101.30 quality of patient care. The commissioner shall submit the 101.31 results to the chairs and ranking minority members of the senate 101.32 and house of representatives committees having jurisdiction over 101.33 human services funding by January 15, 2004. 101.34 ARTICLE 14 101.35 INCOME TAX 101.36 Section 1. Minnesota Statutes 2000, section 60D.20, 102.1 subdivision 2, is amended to read: 102.2 Subd. 2. [DIVIDENDS AND OTHER DISTRIBUTIONS.] (a) Subject 102.3 to the limitations and requirements of this subdivision, the 102.4 board of directors of any domestic insurer within an insurance 102.5 holding company system may authorize and cause the insurer to 102.6 declare and pay any dividend or distribution to its shareholders 102.7 as the directors deem prudent from the earned surplus of the 102.8 insurer. An insurer's earned surplus, also known as unassigned 102.9 funds, shall be determined in accordance with the accounting 102.10 procedures and practices governing preparation of its annual 102.11 statement. Dividends which are paid from sources other than an 102.12 insurer's earned surplus as of the end of the immediately 102.13 preceding quarter for which the insurer has filed a quarterly or 102.14 annual statement as appropriate, or are extraordinary dividends 102.15 or distributions may be paid only as provided in paragraphs (d), 102.16 (e), and (f). 102.17 (b) The insurer shall notify the commissioner within five 102.18 business days following declaration of a dividend declared 102.19 pursuant to paragraph (a) and at least ten days prior to its 102.20 payment. The commissioner shall promptly consider the 102.21 notification filed pursuant to this paragraph, taking into 102.22 consideration the factors described in subdivision 4. 102.23 (c) The commissioner shall review at least annually the 102.24 dividends paid by an insurer pursuant to paragraph (a) for the 102.25 purpose of determining if the dividends are reasonable based 102.26 upon (1) the adequacy of the level of surplus as regards 102.27 policyholders remaining after the dividend payments, and (2) the 102.28 quality of the insurer's earnings and extent to which the 102.29 reported earnings include extraordinary items, such as surplus 102.30 relief reinsurance transactions and reserve destrengthening. 102.31 (d) No domestic insurer shall pay any extraordinary 102.32 dividend or make any other extraordinary distribution to its 102.33 shareholders until: (1) 30 days after the commissioner has 102.34 received notice of the declaration of it and has not within the 102.35 period disapproved the payment; or (2) the commissioner has 102.36 approved the payment within the 30-day period. 103.1 (e) For purposes of this section, an extraordinary dividend 103.2 or distribution includes any dividend or distribution of cash or 103.3 other property, whose fair market value together with that of 103.4 other dividends or distributions made within the preceding 12 103.5 months exceeds the greater of (1) ten percent of the insurer's 103.6 surplus as regards policyholders on December 31 of the preceding 103.7 year; or (2) the net gain from operations of the insurer, if the 103.8 insurer is a life insurer, or the net income, if the insurer is 103.9 not a life insurer, not including realized capital gains, for 103.10 the 12-month period ending on December 31 of the preceding year, 103.11 but does not include pro rata distributions of any class of the 103.12 insurer's own securities. 103.13 (f) Notwithstanding any other provision of law, an insurer 103.14 may declare an extraordinary dividend or distribution that is 103.15 conditional upon the commissioner's approval, and the 103.16 declaration shall confer no rights upon shareholders until: (1) 103.17 the commissioner has approved the payment of such a dividend or 103.18 distribution; or (2) the commissioner has not disapproved the 103.19 payment within the 30-day period referred to above. 103.20 (g) For purposes of state law, dividends paid to an 103.21 insurer's parent company from an insurer which is a member of an 103.22 insurance holding company system are not considered income to 103.23 the parent company. 103.24[EFFECTIVE DATE.] This section is effective for dividends 103.25 paid after December 31, 2000. 103.26 Sec. 2. Minnesota Statutes 2000, section 136A.08, 103.27 subdivision 3, is amended to read: 103.28 Subd. 3. [WISCONSIN.] A higher education reciprocity 103.29 agreement with the state of Wisconsin may include provision for 103.30 the transfer of funds between Minnesota and Wisconsinprovided103.31that an income tax reciprocity agreement between Minnesota and103.32Wisconsin is in effect for the period of time included under the103.33higher education reciprocity agreement. If this provision is 103.34 included, the amount of funds to be transferred shall be 103.35 determined according to a formula which is mutually acceptable 103.36 to the office and a duly designated agency representing 104.1 Wisconsin. The formula shall recognize differences in tuition 104.2 rates between the two states and the number of students 104.3 attending institutions in each state under the agreement. Any 104.4 payments to Minnesota by Wisconsin shall be deposited by the 104.5 office in the general fund of the state treasury. The amount 104.6 required for the payments shall be certified by the director of 104.7 the office to the commissioner of finance annually. 104.8[EFFECTIVE DATE.] This section is effective the day 104.9 following final enactment. 104.10 Sec. 3. Minnesota Statutes 2000, section 290.081, is 104.11 amended to read: 104.12 290.081 [INCOME OF NONRESIDENTS, RECIPROCITY.] 104.13 (a) The compensation received for the performance of 104.14 personal or professional services within this state by an 104.15 individual whose residence, place of abode, and place 104.16 customarily returned to at least once a month is in another 104.17 state, shall be excluded from gross income to the extent such 104.18 compensation is subject to an income tax imposed by the state of 104.19 residence; provided that such state allows a similar exclusion 104.20 of compensation received by residents of Minnesota for services 104.21 performed therein. 104.22 (b) When it is deemed to be in the best interests of the 104.23 people of this state, the commissioner may determine that the 104.24 provisions ofclauseparagraph (a) shall not apply.As long as104.25the provisions of clause (a) apply between Minnesota and104.26Wisconsin, the provisions of clause (a) shall apply to any104.27individual who is domiciled in Wisconsin.104.28(c) For the purposes of clause (a), whenever the Wisconsin104.29tax on Minnesota residents which would have been paid Wisconsin104.30without clause (a) exceeds the Minnesota tax on Wisconsin104.31residents which would have been paid Minnesota without clause104.32(a), or vice versa, then the state with the net revenue loss104.33resulting from clause (a) shall receive from the other state the104.34amount of such loss. This provision shall be effective for all104.35years beginning after December 31, 1972. The data used for104.36computing the loss to either state shall be determined on or105.1before September 30 of the year following the close of the105.2previous calendar year.105.3Interest shall be payable on all delinquent balances105.4relating to taxable years beginning after December 31, 1977.105.5The commissioner of revenue is authorized to enter into105.6agreements with the state of Wisconsin specifying the105.7reciprocity payment due date, conditions constituting105.8delinquency, interest rates, and a method for computing interest105.9due on any delinquent amounts.105.10If an agreement cannot be reached as to the amount of the105.11loss, the commissioner of revenue and the taxing official of the105.12state of Wisconsin shall each appoint a member of a board of105.13arbitration and these members shall appoint the third member of105.14the board. The board shall select one of its members as chair.105.15Such board may administer oaths, take testimony, subpoena105.16witnesses, and require their attendance, require the production105.17of books, papers and documents, and hold hearings at such places105.18as are deemed necessary. The board shall then make a105.19determination as to the amount to be paid the other state which105.20determination shall be final and conclusive.105.21The commissioner may furnish copies of returns, reports, or105.22other information to the taxing official of the state of105.23Wisconsin, a member of the board of arbitration, or a consultant105.24under joint contract with the states of Minnesota and Wisconsin105.25for the purpose of making a determination as to the amount to be105.26paid the other state under the provisions of this section.105.27Prior to the release of any information under the provisions of105.28this section, the person to whom the information is to be105.29released shall sign an agreement which provides that the person105.30will protect the confidentiality of the returns and information105.31revealed thereby to the extent that it is protected under the105.32laws of the state of Minnesota.105.33[EFFECTIVE DATE.] This section is effective for tax years 105.34 beginning after December 31, 2002. 105.35 Sec. 4. Minnesota Statutes 2001 Supplement, section 105.36 290.0921, subdivision 2, is amended to read: 106.1 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 106.2 the following terms have the meanings given them. 106.3 (b) "Alternative minimum taxable net income" is alternative 106.4 minimum taxable income, 106.5 (1) less the exemption amount, and 106.6 (2) apportioned or allocated to Minnesota under section 106.7 290.17, 290.191, or 290.20. 106.8 (c) The "exemption amount" is $40,000, reduced, but not 106.9 below zero, by 25 percent of the excess of alternative minimum 106.10 taxable income over $150,000. 106.11 (d) "Minnesota alternative minimum taxable income" is 106.12 alternative minimum taxable net income, less the deductions for 106.13 alternative tax net operating loss under subdivision 4; 106.14 charitable contributions under subdivision 5; and dividends 106.15 received under subdivision 6. The sum of the deductions under 106.16 this paragraph may not exceed 90 percent of alternative minimum 106.17 taxable net income. This limitation does not apply to: 106.18 (1) a deduction for dividends paid to or received from a 106.19 corporation which is subject to tax under section 290.36 and 106.20 which is a member of an affiliated group of corporations as 106.21 defined by the Internal Revenue Code; or 106.22 (2) a deduction for dividends paid to or received from a 106.23 corporation which is subject to tax under section 297I.05 and 106.24 which is a member of an affiliated group of corporations as 106.25 defined by the Internal Revenue Code and either: (i) the 106.26 dividend is eliminated in consolidation under Treasury 106.27 Regulation 1.1502-14(a), as amended through December 31, 1989; 106.28 or (ii) the dividend is deducted under an election under section 106.29 243(b) of the Internal Revenue Code. 106.30 The deduction under this clause is limited to the amount of 106.31 distributions of the recipient corporation to another member of 106.32 the affiliated group of corporations subject to tax under 106.33 section 297I.05 in the same taxable year. 106.34[EFFECTIVE DATE.] This section is effective for tax years 106.35 beginning after December 31, 2000. 106.36 Sec. 5. Minnesota Statutes 2001 Supplement, section 107.1 290.0921, subdivision 6, is amended to read: 107.2 Subd. 6. [DIVIDENDS RECEIVED.] (a) A deduction is allowed 107.3 from alternative minimum taxable net income equal to the 107.4 deduction for dividends received under section 290.21, 107.5 subdivision 4, for purposes of calculating taxable income under 107.6 section 290.01, subdivision 29. 107.7 (b) The amount of the deduction must not exceed 90 percent 107.8 of alternative minimum taxable net income. 107.9 This limitation does not apply to: 107.10 (1) dividends paid to or received from a corporation which 107.11 is subject to tax under section 290.36 and which is a member of 107.12 an affiliated group of corporations as defined by the Internal 107.13 Revenue Code; or 107.14 (2) dividends paid to or received from a corporation which 107.15 is subject to tax under section 297I.05 and which is a member of 107.16 an affiliated group of corporations as defined by the Internal 107.17 Revenue Code and either: (i) the dividend is eliminated in 107.18 consolidation under Treasury Regulation 1.1502-14(a), as amended 107.19 through December 31, 1989; or (ii) the dividend is deducted 107.20 under an election under section 243(b) of the Internal Revenue 107.21 Code. 107.22 The deduction under this clause is limited to the amount of 107.23 distributions of the recipient corporation to another member of 107.24 the affiliated group of corporations subject to tax under 107.25 section 297I.05 in the same taxable year. 107.26[EFFECTIVE DATE.] This section is effective for tax years 107.27 beginning after December 31, 2000. 107.28 Sec. 6. Minnesota Statutes 2000, section 290.0922, 107.29 subdivision 1, is amended to read: 107.30 Subdivision 1. [IMPOSITION.] (a) In addition to the tax 107.31 imposed by this chapter without regard to this section, the 107.32 franchise tax imposed on a corporation required to file under 107.33 section 289A.08, subdivision 3, other than a corporation treated 107.34 as an "S" corporation under section 290.9725 for the taxable 107.35 year includes a tax equal to the following amounts: 107.36 If the sum of the corporation's 108.1 Minnesota property, payrolls, and sales 108.2 or receipts is: the tax equals: 108.3 less than $500,000$0$50 108.4 $ 500,000 to $ 999,999$100$150 108.5 $ 1,000,000 to $ 4,999,999$300$450 108.6 $ 5,000,000 to $ 9,999,999$1,000$1,500 108.7 $10,000,000 to $19,999,999$2,000$3,000 108.8 $20,000,000 or more$5,000$7,500 108.9 (b) A tax is imposed for each taxable year on a corporation 108.10 required to file a return under section 289A.12, subdivision 3, 108.11 that is treated as an "S" corporation under section 290.9725 and 108.12 on a partnership required to file a return under section 108.13 289A.12, subdivision 3, other than a partnership that derives 108.14 over 80 percent of its income from farming. The tax imposed 108.15 under this paragraph is due on or before the due date of the 108.16 return for the taxpayer due under section 289A.18, subdivision 108.17 1. The commissioner shall prescribe the return to be used for 108.18 payment of this tax. The tax under this paragraph is equal to 108.19 the following amounts: 108.20 If the sum of the S corporation's or partnership's 108.21 Minnesota property, payrolls, and sales 108.22 or receipts is: the tax equals: 108.23 less than $500,000$0$50 108.24 $ 500,000 to $ 999,999$100$150 108.25 $ 1,000,000 to $ 4,999,999$300$450 108.26 $ 5,000,000 to $ 9,999,999$1,000$1,500 108.27 $10,000,000 to $19,999,999$2,000$3,000 108.28 $20,000,000 or more$5,000$7,500 108.29[EFFECTIVE DATE.] This section is effective for tax years 108.30 beginning after December 31, 2001. 108.31 Sec. 7. Minnesota Statutes 2000, section 290.17, 108.32 subdivision 2, is amended to read: 108.33 Subd. 2. [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 108.34 BUSINESS.] The income of a taxpayer subject to the allocation 108.35 rules that is not derived from the conduct of a trade or 108.36 business must be assigned in accordance with paragraphs (a) to 109.1 (f): 109.2 (a)(1) Subject to paragraphs (a)(2),and (a)(3),and109.3(a)(4),income from wages as defined in section 3401(a) and (f) 109.4 of the Internal Revenue Code is assigned to this state if, and 109.5 to the extent that, the work of the employee is performed within 109.6 it; all other income from such sources is treated as income from 109.7 sources without this state. 109.8 Severance pay shall be considered income from labor or 109.9 personal or professional services. 109.10 (2) In the case of an individual who is a nonresident of 109.11 Minnesota and who is an athlete or entertainer, income from 109.12 compensation for labor or personal services performed within 109.13 this state shall be determined in the following manner: 109.14 (i) The amount of income to be assigned to Minnesota for an 109.15 individual who is a nonresident salaried athletic team employee 109.16 shall be determined by using a fraction in which the denominator 109.17 contains the total number of days in which the individual is 109.18 under a duty to perform for the employer, and the numerator is 109.19 the total number of those days spent in Minnesota. For purposes 109.20 of this paragraph, off-season training activities, unless 109.21 conducted at the team's facilities as part of a team imposed 109.22 program, are not included in the total number of duty days. 109.23 Bonuses earned as a result of play during the regular season or 109.24 for participation in championship, play-off, or all-star games 109.25 must be allocated under the formula. Signing bonuses are not 109.26 subject to allocation under the formula if they are not 109.27 conditional on playing any games for the team, are payable 109.28 separately from any other compensation, and are nonrefundable; 109.29 and 109.30 (ii) The amount of income to be assigned to Minnesota for 109.31 an individual who is a nonresident, and who is an athlete or 109.32 entertainer not listed in clause (i), for that person's athletic 109.33 or entertainment performance in Minnesota shall be determined by 109.34 assigning to this state all income from performances or athletic 109.35 contests in this state. 109.36 (3) For purposes of this section, amounts received by a 110.1 nonresident as "retirement income" as defined in section (b)(1) 110.2 of the State Income Taxation of Pension Income Act, Public Law 110.3 Number 104-95, are not considered income derived from carrying 110.4 on a trade or business or from wages or other compensation for 110.5 work an employee performed in Minnesota, and are not taxable 110.6 under this chapter. 110.7(4) Wages, otherwise assigned to this state under clause110.8(1) and not qualifying under clause (3), are not taxable under110.9this chapter if the following conditions are met:110.10(i) the recipient was not a resident of this state for any110.11part of the taxable year in which the wages were received; and110.12(ii) the wages are for work performed while the recipient110.13was a resident of this state.110.14 (b) Income or gains from tangible property located in this 110.15 state that is not employed in the business of the recipient of 110.16 the income or gains must be assigned to this state. 110.17 (c) Income or gains from intangible personal property not 110.18 employed in the business of the recipient of the income or gains 110.19 must be assigned to this state if the recipient of the income or 110.20 gains is a resident of this state or is a resident trust or 110.21 estate. 110.22 Gain on the sale of a partnership interest is allocable to 110.23 this state in the ratio of the original cost of partnership 110.24 tangible property in this state to the original cost of 110.25 partnership tangible property everywhere, determined at the time 110.26 of the sale. If more than 50 percent of the value of the 110.27 partnership's assets consists of intangibles, gain or loss from 110.28 the sale of the partnership interest is allocated to this state 110.29 in accordance with the sales factor of the partnership for its 110.30 first full tax period immediately preceding the tax period of 110.31 the partnership during which the partnership interest was sold. 110.32 Gain on the sale of goodwill or income from a covenant not 110.33 to compete that is connected with a business operating all or 110.34 partially in Minnesota is allocated to this state to the extent 110.35 that the income from the business in the year preceding the year 110.36 of sale was assignable to Minnesota under subdivision 3. 111.1 When an employer pays an employee for a covenant not to 111.2 compete, the income allocated to this state is in the ratio of 111.3 the employee's service in Minnesota in the calendar year 111.4 preceding leaving the employment of the employer over the total 111.5 services performed by the employee for the employer in that year. 111.6 (d) Income from winnings on Minnesota pari-mutuel betting 111.7 tickets, the Minnesota state lottery, and lawful gambling as 111.8 defined in section 349.12, subdivision 24, conducted within the 111.9 boundaries of the state of Minnesota shall be assigned to this 111.10 state. 111.11 (e) All items of gross income not covered in paragraphs (a) 111.12 to (d) and not part of the taxpayer's income from a trade or 111.13 business shall be assigned to the taxpayer's domicile. 111.14 (f) For the purposes of this section, working as an 111.15 employee shall not be considered to be conducting a trade or 111.16 business. 111.17[EFFECTIVE DATE.] This section is effective for wages 111.18 received in tax years beginning after December 31, 2001. 111.19 Sec. 8. Minnesota Statutes 2000, section 290.191, 111.20 subdivision 4, is amended to read: 111.21 Subd. 4. [APPORTIONMENT FORMULA FOR CERTAIN MAIL ORDER 111.22 BUSINESSES.] If the business of a corporation, partnership, or 111.23 proprietorship consists exclusively of the selling of tangible 111.24 personal property and services at retail, as defined in section 111.25 297A.61, subdivision 4, in response to orders received by United 111.26 States mail, telephone, facsimile, or other electronic media, 111.27 and 99 percent of the taxpayer's property and payroll is within 111.28 Minnesota, then the taxpayer may apportion net income to 111.29 Minnesota based solely upon the percentage that the sales made 111.30 within this state in connection with its trade or business 111.31 during the tax period are of the total sales wherever made in 111.32 connection with the trade or business during the tax period. 111.33 Property and payroll factors are disregarded. In determining 111.34 eligibility for this subdivision: 111.35 (1) the sale not in the ordinary course of business of 111.36 tangible or intangible assets used in conducting business 112.1 activities must be disregarded; and 112.2 (2) property and payroll at a distribution center outside 112.3 of Minnesota are disregarded if the sole activity at the 112.4 distribution center is the filling of orders, and no 112.5 solicitation of orders occurs at the distribution center. 112.6[EFFECTIVE DATE.] This section is effective for tax years 112.7 beginning after December 31, 2001. 112.8 Sec. 9. Minnesota Statutes 2001 Supplement, section 112.9 290.21, subdivision 4, is amended to read: 112.10 Subd. 4. (a)(1) Eighty percent of dividends received by a 112.11 corporation during the taxable year from another corporation, in 112.12 which the recipient owns 20 percent or more of the stock, by 112.13 vote and value, not including stock described in section 112.14 1504(a)(4) of the Internal Revenue Code when the corporate stock 112.15 with respect to which dividends are paid does not constitute the 112.16 stock in trade of the taxpayer or would not be included in the 112.17 inventory of the taxpayer, or does not constitute property held 112.18 by the taxpayer primarily for sale to customers in the ordinary 112.19 course of the taxpayer's trade or business, or when the trade or 112.20 business of the taxpayer does not consist principally of the 112.21 holding of the stocks and the collection of the income and gains 112.22 therefrom; and 112.23 (2)(i) the remaining 20 percent of dividends if the 112.24 dividends received are the stock in an affiliated company 112.25 transferred in an overall plan of reorganization and the 112.26 dividend is eliminated in consolidation under Treasury 112.27 Department Regulation 1.1502-14(a), as amended through December 112.28 31, 1989;or112.29 (ii) the remaining 20 percent of dividends if the dividends 112.30 are received from a corporation which is subject to tax under 112.31 section 290.36 and which is a member of an affiliated group of 112.32 corporations as defined by the Internal Revenue Code and the 112.33 dividend is eliminated in consolidation under Treasury 112.34 Department Regulation 1.1502-14(a), as amended through December 112.35 31, 1989, or is deducted under an election under section 243(b) 112.36 of the Internal Revenue Code; or 113.1 (iii) the remaining 20 percent of the dividends if the 113.2 dividends are received from a corporation which is subject to 113.3 tax under section 297I.05 and which is a member of an affiliated 113.4 group of corporations as defined by the Internal Revenue Code 113.5 and either: (A) the dividend is eliminated in consolidation 113.6 under Treasury Regulation 1.1502-14(a), as amended through 113.7 December 31, 1989; or (B) the dividend is deducted under an 113.8 election under section 243(b) of the Internal Revenue Code. 113.9 The deduction under this item is limited to the amount of 113.10 distributions of the recipient corporation to another member of 113.11 the affiliated group of corporations subject to tax under 113.12 section 297I.05 in the same taxable year. 113.13 (b) Seventy percent of dividends received by a corporation 113.14 during the taxable year from another corporation in which the 113.15 recipient owns less than 20 percent of the stock, by vote or 113.16 value, not including stock described in section 1504(a)(4) of 113.17 the Internal Revenue Code when the corporate stock with respect 113.18 to which dividends are paid does not constitute the stock in 113.19 trade of the taxpayer, or does not constitute property held by 113.20 the taxpayer primarily for sale to customers in the ordinary 113.21 course of the taxpayer's trade or business, or when the trade or 113.22 business of the taxpayer does not consist principally of the 113.23 holding of the stocks and the collection of income and gain 113.24 therefrom. 113.25 (c) The dividend deduction provided in this subdivision 113.26 shall be allowed only with respect to dividends that are 113.27 included in a corporation's Minnesota taxable net income for the 113.28 taxable year. 113.29 The dividend deduction provided in this subdivision does 113.30 not apply to a dividend from a corporation which, for the 113.31 taxable year of the corporation in which the distribution is 113.32 made or for the next preceding taxable year of the corporation, 113.33 is a corporation exempt from tax under section 501 of the 113.34 Internal Revenue Code. 113.35 The dividend deduction provided in this subdivision applies 113.36 to the amount of regulated investment company dividends only to 114.1 the extent determined under section 854(b) of the Internal 114.2 Revenue Code. 114.3 The dividend deduction provided in this subdivision shall 114.4 not be allowed with respect to any dividend for which a 114.5 deduction is not allowed under the provisions of section 246(c) 114.6 of the Internal Revenue Code. 114.7 (d) If dividends received by a corporation that does not 114.8 have nexus with Minnesota under the provisions of Public Law 114.9 Number 86-272 are included as income on the return of an 114.10 affiliated corporation permitted or required to file a combined 114.11 report under section 290.34, subdivision 2, then for purposes of 114.12 this subdivision the determination as to whether the trade or 114.13 business of the corporation consists principally of the holding 114.14 of stocks and the collection of income and gains therefrom shall 114.15 be made with reference to the trade or business of the 114.16 affiliated corporation having a nexus with Minnesota. 114.17 (e) The deduction provided by this subdivision does not 114.18 apply if the dividends are paid by a FSC as defined in section 114.19 922 of the Internal Revenue Code. 114.20 (f) If one or more of the members of the unitary group 114.21 whose income is included on the combined report received a 114.22 dividend, the deduction under this subdivision for each member 114.23 of the unitary business required to file a return under this 114.24 chapter is the product of: (1) 100 percent of the dividends 114.25 received by members of the group; (2) the percentage allowed 114.26 pursuant to paragraph (a) or (b); and (3) the percentage of the 114.27 taxpayer's business income apportionable to this state for the 114.28 taxable year under section 290.191 or 290.20. 114.29[EFFECTIVE DATE.] This section is effective for tax years 114.30 beginning after December 31, 2000. 114.31 ARTICLE 15 114.32 SALES TAX 114.33 Section 1. Minnesota Statutes 2000, section 270.60, 114.34 subdivision 4, is amended to read: 114.35 Subd. 4. [PAYMENTS TO COUNTIES.] (a) The commissioner 114.36 shall pay to a county in which an Indian gaming casino is 115.1 located ten percent of the state share of all taxes generated 115.2 from activities on reservations and collected under a tax 115.3 agreement under this section with the tribal government for the 115.4 reservation located in the county. If the tribe has casinos 115.5 located in more than one county, the payment must be divided 115.6 equally among the counties in which the casinos are located. 115.7 (b)A county is a qualified county under this subdivision115.8if one of the following conditions is met:115.9(1) the county's per capita income is less than 80 percent115.10of the state per capita personal income, based on the most115.11recent estimates made by the United States Bureau of Economic115.12Analysis; or115.13(2) 30 percent or more of the total market value of real115.14property in the county is exempt from ad valorem taxation.115.15(c)The commissioner shall make the payments required under 115.16 this subdivision by February 28 of the year following the year 115.17 the taxes are collected. 115.18(d)(c) An amount sufficient to make the payments 115.19 authorized by this subdivision, not to exceed $1,100,000 in any115.20fiscal year,is annually appropriated from the general fund to 115.21 the commissioner.If the authorized payments exceed the amount115.22of the appropriation, the commissioner shall first115.23proportionately reduce the payments to counties other than115.24qualified counties so that the total amount equals the115.25appropriation. If the authorized payments to qualified counties115.26also exceed the amount of the appropriation, the commissioner115.27shall then proportionately reduce the rate so that the total115.28amount to be paid to qualified counties equals the appropriation.115.29[EFFECTIVE DATE.] This section is effective for payments 115.30 made after December 31, 2002. 115.31 Sec. 2. Minnesota Statutes 2001 Supplement, section 115.32 289A.20, subdivision 4, is amended to read: 115.33 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 115.34 chapter 297A are due and payable to the commissioner monthly on 115.35 or before the 20th day of the month following the month in which 115.36 the taxable event occurred, or following another reporting 116.1 period as the commissioner prescribes or as allowed under 116.2 section 289A.18, subdivision 4, paragraph (f), except that use 116.3 taxes due on an annual use tax return as provided under section 116.4 289A.11, subdivision 1, are payable by April 15 following the 116.5 close of the calendar year. 116.6 (b) For a fiscal year ending before July 1,20022006, a 116.7 vendor having a liability of $120,000 or more during a fiscal 116.8 year ending June 30 must remit the June liability for the next 116.9 year in the following manner: 116.10 (1) Two business days before June 30 of the year, the 116.11 vendor must remit 62 percent of the estimated June liability to 116.12 the commissioner. 116.13 (2) On or before August 20 of the year, the vendor must pay 116.14 any additional amount of tax not remitted in June. 116.15 (c) A vendor having a liability of $120,000 or more during 116.16 a fiscal year ending June 30 must remit all liabilities on 116.17 returns due for periods beginning in the subsequent calendar 116.18 year by electronic means on or before the 20th day of the month 116.19 following the month in which the taxable event occurred, or on 116.20 or before the 20th day of the month following the month in which 116.21 the sale is reported under section 289A.18, subdivision 4, 116.22 except for 62 percent of the estimated June liability, which is 116.23 due two business days before June 30. The remaining amount of 116.24 the June liability is due on August 20. 116.25[EFFECTIVE DATE.] This section is effective the day 116.26 following final enactment. 116.27 Sec. 3. Minnesota Statutes 2001 Supplement, section 116.28 297A.61, subdivision 3, is amended to read: 116.29 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 116.30 include, but are not limited to, each of the transactions listed 116.31 in this subdivision. 116.32 (b) Sale and purchase include: 116.33 (1) any transfer of title or possession, or both, of 116.34 tangible personal property, whether absolutely or conditionally, 116.35 for a consideration in money or by exchange or barter; and 116.36 (2) the leasing of or the granting of a license to use or 117.1 consume, for a consideration in money or by exchange or barter, 117.2 tangible personal property, other than a manufactured home used 117.3 for residential purposes for a continuous period of 30 days or 117.4 more. 117.5 (c) Sale and purchase include the production, fabrication, 117.6 printing, or processing of tangible personal property for a 117.7 consideration for consumers who furnish either directly or 117.8 indirectly the materials used in the production, fabrication, 117.9 printing, or processing. 117.10 (d) Sale and purchase include the furnishing, preparing, or 117.11 serving for a consideration of food or drinks. Notwithstanding 117.12 section 297A.67, subdivision 2, taxable foodincludesor drinks 117.13 include, butisare not limited to, the following: 117.14 (1)prepared food sold by the retailerfood or drinks sold 117.15 by the retailer for immediate consumption on the retailer's 117.16 premises. Food and drinks sold within a building or grounds 117.17 that require an admission charge for entrance are presumed to be 117.18 sold for consumption on the premises; 117.19 (2)soft drinksfood or drinks prepared by the retailer for 117.20 immediate consumption either on or off the retailer's premises. 117.21 For purposes of this subdivision, "food or drinks prepared for 117.22 immediate consumption" means any food product upon which an act 117.23 of preparation, including, but not limited to, cooking, mixing, 117.24 sandwich making, blending, heating, or pouring has been 117.25 performed by the retailer so the food product may be immediately 117.26 consumed by the purchaser; 117.27 (3)candyice cream, ice milk, frozen yogurt products, or 117.28 frozen novelties sold in single or individual servings, 117.29 including, but not limited to, cones, sundaes, and snow 117.30 cones;and117.31 (4)all food sold through vending machinessoft drinks and 117.32 other beverages, including all carbonated and noncarbonated 117.33 beverages or drinks sold in liquid form, but not including 117.34 beverages or drinks which contain milk or milk products, 117.35 beverages or drinks containing 15 or more percent fruit juice, 117.36 and noncarbonated and noneffervescent bottled water sold in 118.1 individual containers of one-half gallon or more in size; 118.2 (5) gum, candy, and candy products; 118.3 (6) ice; 118.4 (7) all food sold from vending machines; 118.5 (8) all food for immediate consumption sold from concession 118.6 stands and vehicles; 118.7 (9) party trays; 118.8 (10) all meals and single servings of packaged snack food 118.9 sold in restaurants and bars; and 118.10 (11) bakery products that are: 118.11 (i) prepared by the retailer for consumption on the 118.12 retailer's premises; 118.13 (ii) sold at a place that charges admission; 118.14 (iii) sold from vending machines; or 118.15 (iv) sold in single or individual servings from concession 118.16 stands, vehicles, bars, and restaurants. 118.17 For purposes of this paragraph, "single or individual 118.18 servings" does not include products when sold in bulk containers 118.19 or bulk packaging. 118.20 For purposes of this paragraph, "premises" means the total 118.21 space and facilities, including buildings, grounds, and parking 118.22 lots that are made available or that are available for use by 118.23 the retailer or customer for the purpose of sale or consumption 118.24 of prepared food and drinks. The premises of a caterer is the 118.25 place where the catered food or drinks are served. 118.26 (e) A sale and a purchase includes the furnishing for a 118.27 consideration of electricity, gas, water, or steam for use or 118.28 consumption within this state. 118.29 (f) A sale and a purchase includes the transfer for a 118.30 consideration of computer software. 118.31 (g) A sale and a purchase includes the furnishing for a 118.32 consideration of the following services: 118.33 (1) the privilege of admission to places of amusement, 118.34 recreational areas, or athletic events, and the making available 118.35 of amusement devices, tanning facilities, reducing salons, steam 118.36 baths, turkish baths, health clubs, and spas or athletic 119.1 facilities; 119.2 (2) lodging and related services by a hotel, rooming house, 119.3 resort, campground, motel, or trailer camp and the granting of 119.4 any similar license to use real property other than the renting 119.5 or leasing of it for a continuous period of 30 days or more; 119.6 (3) parking services, whether on a contractual, hourly, or 119.7 other periodic basis, except for parking at a meter; 119.8 (4) the granting of membership in a club, association, or 119.9 other organization if: 119.10 (i) the club, association, or other organization makes 119.11 available for the use of its members sports and athletic 119.12 facilities, without regard to whether a separate charge is 119.13 assessed for use of the facilities; and 119.14 (ii) use of the sports and athletic facility is not made 119.15 available to the general public on the same basis as it is made 119.16 available to members. 119.17 Granting of membership means both one-time initiation fees and 119.18 periodic membership dues, but do not include fees or charges for 119.19 pen-raised game or poultry by a game farm or hunting preserve. 119.20 Sports and athletic facilities include golf courses; tennis, 119.21 racquetball, handball, and squash courts; basketball and 119.22 volleyball facilities; running tracks; exercise equipment; 119.23 swimming pools; and other similar athletic or sports facilities; 119.24and119.25 (5) delivery of aggregate materials and concrete block; and 119.26 (6) services as provided in this clause: 119.27 (i) laundry and dry cleaning services including cleaning, 119.28 pressing, repairing, altering, and storing clothes, linen 119.29 services and supply, cleaning and blocking hats, and carpet, 119.30 drapery, upholstery, and industrial cleaning. Laundry and dry 119.31 cleaning services do not include services provided by coin 119.32 operated facilities operated by the customer; 119.33 (ii) motor vehicle washing, waxing, and cleaning services, 119.34 including services provided by coin operated facilities operated 119.35 by the customer, and rustproofing, undercoating, and towing of 119.36 motor vehicles; 120.1 (iii) building and residential cleaning, maintenance, and 120.2 disinfecting and exterminating services; 120.3 (iv) detective, security, burglar, fire alarm, and armored 120.4 car services; but not including services performed within the 120.5 jurisdiction they serve by off-duty licensed peace officers as 120.6 defined in section 626.84, subdivision 1, or services provided 120.7 by a nonprofit organization for monitoring and electronic 120.8 surveillance of persons placed on in-home detention pursuant to 120.9 court order or under the direction of the Minnesota department 120.10 of corrections; 120.11 (v) pet grooming services; 120.12 (vi) lawn care, fertilizing, mowing, spraying and sprigging 120.13 services; garden planting and maintenance; tree, bush, and shrub 120.14 pruning, bracing, spraying, and surgery; indoor plant care; 120.15 tree, bush, shrub, and stump removal; and tree trimming for 120.16 public utility lines. Services performed under a construction 120.17 contract for the installation of shrubbery, plants, sod, trees, 120.18 bushes, and similar items are not taxable; 120.19 (vii) massages, except when provided by a licensed health 120.20 care facility or professional or upon written referral from a 120.21 licensed health care facility or professional for treatment of 120.22 illness, injury, or disease; and 120.23 (viii) the furnishing of lodging, board, and care services 120.24 for animals in kennels and other similar arrangements, but 120.25 excluding veterinary and horse boarding services. 120.26 In applying the provisions of this chapter, the terms 120.27 "tangible personal property" and "sales at retail" include 120.28 taxable services and the provision of taxable services, unless 120.29 specifically provided otherwise. Services performed by an 120.30 employee for an employer are not taxable. Services performed by 120.31 a partnership or association for another partnership or 120.32 association are not taxable if one of the entities owns or 120.33 controls more than 80 percent of the voting power of the equity 120.34 interest in the other entity. Services performed between 120.35 members of an affiliated group of corporations are not taxable. 120.36 For purposes of this section, "affiliated group of corporations" 121.1 includes those entities that would be classified as members of 121.2 an affiliated group under United States Code, title 26, section 121.3 1504, and that are eligible to file a consolidated tax return 121.4 for federal income tax purposes. 121.5 (h) A sale and a purchase includes the furnishing for a 121.6 consideration of tangible personal property or taxable services 121.7 by the United States or any of its agencies or 121.8 instrumentalities, or the state of Minnesota, its agencies, 121.9 instrumentalities, or political subdivisions. 121.10 (i) A sale and a purchase includes the furnishing for a 121.11 consideration of telecommunications services, including cable 121.12 television services and direct satellite services. 121.13 Telecommunications services are taxed to the extent allowed 121.14 under federal law if those services: 121.15 (1) either (i) originate and terminate in this state; or 121.16 (ii) originate in this state and terminate outside the state and 121.17 the service is charged to a telephone number customer located in 121.18 this state or to the account of any transmission instrument in 121.19 this state; or (iii) originate outside this state and terminate 121.20 in this state and the service is charged to a telephone number 121.21 customer located in this state or to the account of any 121.22 transmission instrument in this state; or 121.23 (2) are rendered by providing a private communications 121.24 service for which the customer has one or more locations within 121.25 Minnesota connected to the service and the service is charged to 121.26 a telephone number customer located in this state or to the 121.27 account of any transmission instrument in this state. 121.28 All charges for mobile telecommunications services, as 121.29 defined in United States Code, title 4, section 124, are deemed 121.30 to be provided by the customer's home service provider and 121.31 sourced to the customer's place of primary use and are subject 121.32 to tax based upon the customer's place of primary use in 121.33 accordance with the Mobile Telecommunications Sourcing Act, 121.34 United States Code, title 4, sections 116 to 126. All other 121.35 definitions and provisions of the Mobile Telecommunications 121.36 Sourcing Act as provided in United States Code, title 4, are 122.1 hereby adopted. 122.2 (j) A sale and a purchase includes the furnishing for a 122.3 consideration of installation if the installation charges would 122.4 be subject to the sales tax if the installation were provided by 122.5 the seller of the item being installed. 122.6[EFFECTIVE DATE.] This section is effective for sales made 122.7 after June 30, 2002. 122.8 Sec. 4. Minnesota Statutes 2001 Supplement, section 122.9 297A.66, subdivision 1, is amended to read: 122.10 Subdivision 1. [DEFINITIONS.] (a) To the extent allowed by 122.11 the United States Constitution and the laws of the United 122.12 States, "retailer maintaining a place of business in this 122.13 state," or a similar term, means a retailer: 122.14 (1) having or maintaining within this state, directly or by 122.15 a subsidiary or an affiliate, an office, place of distribution, 122.16 sales or sample room or place, warehouse, or other place of 122.17 business; or 122.18 (2) having a representative, including, but not limited to 122.19 an affiliate agent, salesperson, canvasser, or solicitor 122.20 operating in this state under the authority of the retailer or 122.21 its subsidiary, for any purpose, including the repairing, 122.22 selling, delivering, installing, or soliciting of orders for the 122.23 retailer's goods or services, or the leasing of tangible 122.24 personal property located in this state, whether the place of 122.25 business or agent, representative, affiliate, salesperson, 122.26 canvasser, or solicitor is located in the state permanently or 122.27 temporarily, or whether or not the retaileror, subsidiary, or 122.28 affiliate is authorized to do business in this state. 122.29 (b) "Destination of a sale" means the location to which the 122.30 retailer makes delivery of the property sold, or causes the 122.31 property to be delivered, to the purchaser of the property, or 122.32 to the agent or designee of the purchaser. The delivery may be 122.33 made by any means, including the United States Postal Service or 122.34 a for-hire carrier. 122.35[EFFECTIVE DATE.] (a) This section is effective the day 122.36 following final enactment and is intended to confirm the 123.1 original intent of the legislature in enacting Minnesota 123.2 Statutes, section 297A.66, and its predecessor provisions. 123.3 (b) A retailer may elect that the provisions of this 123.4 section apply only to sales it made after August 31, 2002, by 123.5 notifying the commissioner and by applying for a permit under 123.6 Minnesota Statutes, section 297A.84, by August 15, 2002, to 123.7 collect the tax imposed under Minnesota Statutes, chapter 297A. 123.8 A retailer qualifies under this paragraph only if it: 123.9 (1) did not maintain an office, place of distribution, 123.10 sales or sample room or place, warehouse, or other place of 123.11 business in Minnesota except through an affiliate or did not 123.12 have a representative, agent, salesperson, canvasser, or 123.13 solicitor in Minnesota except through an affiliate; and 123.14 (2) has not registered to collect tax under Minnesota 123.15 Statutes, chapter 297A, as of the date of enactment of this 123.16 section. 123.17 Sec. 5. Minnesota Statutes 2000, section 297A.66, is 123.18 amended by adding a subdivision to read: 123.19 Subd. 4. [AFFILIATED ENTITIES.] (a) An entity is an 123.20 "affiliate" of the retailer for purposes of subdivision 1, 123.21 paragraph (a), if: 123.22 (1) the entity uses its facilities or employees in this 123.23 state to advertise, promote or facilitate the establishment or 123.24 maintenance of a market for sales of items by the retailer to 123.25 purchasers in this state or for the provision of services to the 123.26 retailer's purchasers in this state, such as accepting returns 123.27 of purchases for the retailer, providing assistance in resolving 123.28 customer complaints of the retailer, or providing other 123.29 services; and 123.30 (2) the retailer and the entity are related parties. 123.31 (b) Two entities are related parties under this section if 123.32 one of the entities meets at least one of the following tests 123.33 with respect to the other entity: 123.34 (1) one or both entities is a corporation, and one entity 123.35 and any party related to that entity in a manner that would 123.36 require an attribution of stock from the corporation to the 124.1 party or from the party to the corporation under the attribution 124.2 rules of section 318 of the Internal Revenue Code owns directly, 124.3 indirectly, beneficially, or constructively at least 50 percent 124.4 of the value of the corporation's outstanding stock; 124.5 (2) one or both entities is a partnership, estate, or trust 124.6 and any partner or beneficiary, and the partnership, estate, or 124.7 trust and its partners or beneficiaries own directly, 124.8 indirectly, beneficially, or constructively, in the aggregate, 124.9 at least 50 percent of the profits, capital, stock, or value of 124.10 the other entity or both entities; or 124.11 (3) an individual stockholder and the members of the 124.12 stockholder's family (as defined in section 318 of the Internal 124.13 Revenue Code) owns directly, indirectly, beneficially, or 124.14 constructively, in the aggregate, at least 50 percent of the 124.15 value of both entities' outstanding stock. 124.16 (c) An entity is an affiliate under the provisions of this 124.17 subdivision if the requirements of paragraphs (a) and (b) are 124.18 met during any part of the 12-month period ending on the first 124.19 day of the month before the month in which the sale was made. 124.20[EFFECTIVE DATE.] (a) This section is effective the day 124.21 following final enactment and is intended to confirm the 124.22 original intent of the legislature in enacting Minnesota 124.23 Statutes, section 297A.66, and its predecessor provisions. 124.24 (b) A retailer may elect that the provisions of this 124.25 section apply only to sales it made after August 31, 2002, by 124.26 notifying the commissioner and by applying for a permit under 124.27 Minnesota Statutes, section 297A.84, by August 15, 2002, to 124.28 collect the tax imposed under Minnesota Statutes, chapter 297A. 124.29 A retailer qualifies under this paragraph only if it: 124.30 (1) did not maintain an office, place of distribution, 124.31 sales or sample room or place, warehouse, or other place of 124.32 business in Minnesota except through an affiliate or did not 124.33 have a representative, agent, salesperson, canvasser, or 124.34 solicitor in Minnesota except through an affiliate; and 124.35 (2) has not registered to collect tax under Minnesota 124.36 Statutes, chapter 297A, as of the date of enactment of this 125.1 section. 125.2 Sec. 6. Minnesota Statutes 2001 Supplement, section 125.3 297A.67, subdivision 2, is amended to read: 125.4 Subd. 2. [FOODAND FOOD INGREDIENTSPRODUCTS.]Food and125.5food ingredients are exempt. For purposes of this subdivision,125.6"food" and "food ingredients" mean substances, whether in125.7liquid, concentrated, solid, frozen, dried, or dehydrated form,125.8that are sold for ingestion or chewing by humans and are125.9consumed for their taste or nutritional value. Food and food125.10ingredients do not include candy, soft drinks, food sold through125.11vending machines, and prepared foods. Food and food ingredients125.12do not include alcoholic beverages, dietary supplements, and125.13tobacco. For purposes of this subdivision, "alcoholic125.14beverages" means beverages that are suitable for human125.15consumption and contain one-half of one percent or more of125.16alcohol by volume. For purposes of this subdivision, "tobacco"125.17means cigarettes, cigars, chewing or pipe tobacco, or any other125.18item that contains tobacco. For purposes of this subdivision,125.19"dietary supplements" means any product, other than tobacco,125.20intended to supplement the diet that:125.21(1) contains one or more of the following dietary125.22ingredients:125.23(i) a vitamin;125.24(ii) a mineral;125.25(iii) an herb or other botanical;125.26(iv) an amino acid;125.27(v) a dietary substance for use by humans to supplement the125.28diet by increasing the total dietary intake; and125.29(vi) a concentrate, metabolite, constituent, extract, or125.30combination of any ingredient described in items (i) to (v);125.31(2) is intended for ingestion in tablet, capsule, powder,125.32softgel, gelcap, or liquid form, or if not intended for125.33ingestion in such form, is not represented as conventional food125.34and is not represented for use as a sole item of a meal or of125.35the diet; and125.36(3) is required to be labeled as a dietary supplement,126.1identifiable by the supplement facts box found on the label and126.2as required pursuant to Code of Federal Regulations, title 21,126.3section 101.36.126.4 Food products, including, but not limited to, cereal and 126.5 cereal products, butter, cheese, milk and milk products, 126.6 oleomargarine, meat and meat products, fish and fish products, 126.7 eggs and egg products, vegetables and vegetable products, fruit 126.8 and fruit products, spices and salt, sugar and sugar products, 126.9 coffee and coffee substitutes, tea, and cocoa and cocoa products 126.10 are exempt. 126.11[EFFECTIVE DATE.] This section is effective for sales or 126.12 purchases made on or after July 1, 2002. 126.13 Sec. 7. Minnesota Statutes 2000, section 297A.67, 126.14 subdivision 5, is amended to read: 126.15 Subd. 5. [EXEMPT MEALS AT SCHOOLS.] Meals and lunches 126.16 served at public and private elementary, middle, or secondary 126.17 schools,universities, or collegesas defined in section 120A.05 126.18 are exempt. Meals and lunches served to students at a college, 126.19 university, and private career school under a board contract, 126.20 are exempt. 126.21[EFFECTIVE DATE.] This section is effective for sales and 126.22 purchases made after June 30, 2002. 126.23 Sec. 8. Minnesota Statutes 2000, section 297A.67, is 126.24 amended by adding a subdivision to read: 126.25 Subd. 13a. [INSTRUCTIONAL MATERIALS.] Instructional 126.26 materials, other than textbooks, that are prescribed for use in 126.27 conjunction with a course of study in a post-secondary school, 126.28 college, university, or private career school to students who 126.29 are regularly enrolled at such institutions are exempt. For 126.30 purposes of this subdivision, "instructional materials" means 126.31 materials required to be used directly in the completion of the 126.32 course of study, including, but not limited to, interactive CDs, 126.33 tapes, and computer software. 126.34 Instructional materials do not include general reference 126.35 works or other items incidental to the instructional process 126.36 such as pens, pencils, paper, folders, or computers. For 127.1 purposes of this subdivision, "school" and "private career 127.2 school" have the meanings given in subdivision 13. 127.3[EFFECTIVE DATE.] This section is effective for sales after 127.4 June 30, 2003. 127.5 Sec. 9. Minnesota Statutes 2001 Supplement, section 127.6 297A.67, subdivision 25, is amended to read: 127.7 Subd. 25. [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and 127.8 related services used in the maintenance of cemetery grounds are 127.9 exempt. For purposes of this subdivision, "lawn care and 127.10 related services" means the services listed in section 297A.61, 127.11 subdivision 3, paragraph (g), clause(5)(6), item (vi), and 127.12 "cemetery" means a cemetery for human burial. 127.13 Sec. 10. Minnesota Statutes 2001 Supplement, section 127.14 297A.67, subdivision 29, is amended to read: 127.15 Subd. 29. [ENERGY EFFICIENT PRODUCTS.] (a) A residential 127.16 lighting fixture or a compact fluorescent bulb is exempt if it 127.17 has an energy star label. 127.18 (b) The following products are exempt if they have an 127.19 energyguide label that indicates that the product meets or 127.20 exceeds the standards listed below: 127.21 (1) an electric heat pump hot water heater with an energy 127.22 factor of at least 1.9; 127.23 (2) a natural gas water heater with an energy factor of at 127.24 least 0.62;and127.25 (3) a propane gas water heater with an energy factor of at 127.26 least 0.62; 127.27 (4) a natural gas furnace with an annual fuel utilization 127.28 efficiency greater than 92 percent; and 127.29 (5) a propane gas furnace with an annual fuel utilization 127.30 efficiency greater than 92 percent. 127.31 (c) A photovoltaic device is exempt. For purposes of this 127.32 subdivision, "photovoltaic device" means a solid-state 127.33 electrical device, such as a solar module, that converts light 127.34 directly into direct current electricity of voltage-current 127.35 characteristics that are a function of the characteristics of 127.36 the light source and the materials in and design of the device. 128.1 A "solar module" is a photovoltaic device that produces a 128.2 specified power output under defined test conditions, usually 128.3 composed of groups of solar cells connected in series, in 128.4 parallel, or in series-parallel combinations. 128.5 (d) For purposes of this subdivision, "energy star label" 128.6 means the label granted to certain products that meet United 128.7 States Environmental Protection Agency and United States 128.8 Department of Energy criteria for energy efficiency. For 128.9 purposes of this subdivision, "energyguide label" means the 128.10 label that the United States Federal Trade Commissioner requires 128.11 manufacturers to apply to certain appliances under United States 128.12 Code, title 16, part 305. 128.13[EFFECTIVE DATE.] This section is effective for sales and 128.14 purchases made on or after the day following final enactment and 128.15 before August 1, 2005. 128.16 Sec. 11. Minnesota Statutes 2000, section 297A.67, is 128.17 amended by adding a subdivision to read: 128.18 Subd. 31. [NORTHRUP AUDITORIUM.] Sales of admissions to 128.19 events at the Northrup auditorium are exempt. 128.20[EFFECTIVE DATE.] This section is effective for sales or 128.21 purchases made on or after July 1, 2002. 128.22 Sec. 12. Minnesota Statutes 2001 Supplement, section 128.23 297A.68, subdivision 3, is amended to read: 128.24 Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 128.25 SERVICES.] (a) Materials stored, used, or consumed in providing 128.26 a taxable service listed in section 297A.61, subdivision 3, 128.27 paragraph (g), clause(5)(6), intended to be sold ultimately at 128.28 retail are exempt. 128.29 (b) This exemption includes, but is not limited to: 128.30 (1) chemicals, lubricants, packaging materials, seeds, 128.31 trees, fertilizers, and herbicides, if these items are used or 128.32 consumed in providing the taxable service; 128.33 (2) chemicals used to treat waste generated as a result of 128.34 providing the taxable service; 128.35 (3) accessory tools, equipment, and other items that are 128.36 separate detachable units used in providing the service and that 129.1 have an ordinary useful life of less than 12 months; and 129.2 (4) fuel, electricity, gas, and steam used or consumed in 129.3 the production process, except that electricity, gas, or steam 129.4 used for space heating, cooling, or lighting is exempt if (i) it 129.5 is in excess of average climate control or lighting, and (ii) it 129.6 is necessary to produce that particular service. 129.7 (c) This exemption does not include machinery, equipment, 129.8 implements, tools, accessories, appliances, contrivances, 129.9 furniture, and fixtures used in providing the taxable service. 129.10 Sec. 13. Minnesota Statutes 2001 Supplement, section 129.11 297A.71, subdivision 23, is amended to read: 129.12 Subd. 23. [CONSTRUCTION MATERIALS FOR QUALIFIED LOW-INCOME 129.13 HOUSING PROJECTS.] (a) Purchases of materials and supplies used 129.14 or consumed in and equipment incorporated into the construction, 129.15 improvement, or expansion of qualified low-income housing 129.16 projects are exempt from the tax imposed under this chapter if 129.17 the owner of the qualified low-income housing project is: 129.18 (1) the public housing agency or housing and redevelopment 129.19 authority of a political subdivision; 129.20 (2) an entity exercising the powers of a housing and 129.21 redevelopment authority within a political subdivision; 129.22 (3) a limited partnership in which the sole general partner 129.23 is an authority under clause (1) or an entity under clause (2); 129.24or129.25 (4) a nonprofit corporation subject to the provisions of 129.26 chapter 317A, and qualifying under section 501(c)(3) or 129.27 501(c)(4) of the Internal Revenue Code of 1986, as amended; or 129.28 (5) for purposes of qualified low-income housing described 129.29 in paragraph (b), clause (5), only, an owner entity, as defined 129.30 in Code of Federal Regulations, title 24, part 941.604. 129.31 This exemption applies regardless of whether the purchases 129.32 are made by the owner of the facility or a contractor. 129.33 (b) For purposes of this exemption, "qualified low-income 129.34 housing project" means: 129.35 (1) a housing or mixed use project in which at least 20 129.36 percent of the residential units are qualifying low-income 130.1 rental housing units as defined in section 273.126; 130.2 (2) a federally assisted low-income housing project 130.3 financed by a mortgage insured or held by the United States 130.4 Department of Housing and Urban Development under United States 130.5 Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 130.6 1715z-1; United States Code, title 42, section 1437f; the Native 130.7 American Housing Assistance and Self-Determination Act, United 130.8 States Code, title 25, section 4101 et seq.; or any similar 130.9 successor federal low-income housing program; 130.10 (3) a qualified low-income housing project as defined in 130.11 United States Code, title 26, section 42(g), meeting all of the 130.12 requirements for a low-income housing credit under section 42 of 130.13 the Internal Revenue Code regardless of whether the project 130.14 actually applies for or receives a low-income housing credit;or130.15 (4) a project that will be operated in compliance with 130.16 Internal Revenue Service revenue procedure 96-32; or 130.17 (5) a housing or mixed-use project in which all or a 130.18 portion of the residential units are subject to the requirements 130.19 of section 5 of the United States Housing Act of 1937. For a 130.20 housing or mixed-use project under this clause, the exempt 130.21 amount must be determined by multiplying each purchase described 130.22 in paragraph (a) for the project by the ratio of (1) the total 130.23 gross square footage of units subject to the requirements of 130.24 section 5 of the United States Housing Act of 1937 to (2) the 130.25 total gross square footage of all units in the project. 130.26[EFFECTIVE DATE.] This section is effective retroactive for 130.27 sales and purchases made after July 31, 2001. For sales and 130.28 purchases made after July 31, 2001, and before July 1, 2002, an 130.29 owner entity under this section may apply on a form prescribed 130.30 by the commissioner for a refund of the tax paid on the exempt 130.31 amount as determined under this section. 130.32 Sec. 14. Minnesota Statutes 2000, section 297A.71, is 130.33 amended by adding a subdivision to read: 130.34 Subd. 28. [CONSTRUCTION MATERIALS AND EQUIPMENT; 130.35 REPLACEMENT AGRICULTURAL PROCESSING FACILITY.] Materials and 130.36 supplies used or consumed in, and machinery and equipment 131.1 incorporated into, the construction of a meat-packing or 131.2 meat-processing facility are exempt if: 131.3 (1) the cost of the project exceeds $75,000,000; and 131.4 (2) the facility replaces a facility that was destroyed by 131.5 fire. 131.6[EFFECTIVE DATE.] This section is effective for sales and 131.7 purchases made after March 31, 2002, and before January 1, 2005. 131.8 Sec. 15. Minnesota Statutes 2000, section 297A.71, is 131.9 amended by adding a subdivision to read: 131.10 Subd. 29. [HYDROELECTRIC GENERATING FACILITY.] Materials 131.11 and supplies used or consumed in the construction of a 131.12 hydroelectric generating facility that meets the requirements of 131.13 this subdivision are exempt. To qualify for the exemption under 131.14 this subdivision, a hydroelectric generating facility must: 131.15 (1) utilize two turbine generators at a dam site existing 131.16 on March 31, 1994; 131.17 (2) be located on publicly owned land and within 2,500 feet 131.18 of a 13.8 kilovolt distribution circuit; and 131.19 (3) be eligible to receive a renewable energy production 131.20 incentive payment under section 216C.41. 131.21[EFFECTIVE DATE.] This section is effective for sales made 131.22 after August 31, 2002, and on or before December 31, 2003. 131.23 Sec. 16. Minnesota Statutes 2000, section 297A.71, is 131.24 amended by adding a subdivision to read: 131.25 Subd. 30. [GUTHRIE THEATER.] Materials, equipment, and 131.26 supplies used or consumed in construction of the Guthrie 131.27 Theater, the related parking garage, and the related parking 131.28 ramp are exempt. 131.29[EFFECTIVE DATE.] This section is effective the day 131.30 following final enactment. 131.31 Sec. 17. Minnesota Statutes 2000, section 297A.71, is 131.32 amended by adding a subdivision to read: 131.33 Subd. 31. [CHILDREN'S THEATRE.] Materials, equipment, and 131.34 supplies used or consumed in construction of a Children's 131.35 Theatre in the city of Minneapolis are exempt. 131.36[EFFECTIVE DATE.] This section is effective the day 132.1 following final enactment. 132.2 Sec. 18. Minnesota Statutes 2000, section 297A.71, is 132.3 amended by adding a subdivision to read: 132.4 Subd. 32. [THIEF RIVER FALLS.] Construction materials and 132.5 supplies used and consumed in the construction of a community or 132.6 regional project by the city of Thief River Falls are exempt if 132.7 the city receives 80 percent or more of the funding for the 132.8 project from private sources. 132.9[EFFECTIVE DATE.] This section is effective the day 132.10 following final enactment. 132.11 Sec. 19. Minnesota Statutes 2000, section 297A.71, is 132.12 amended by adding a subdivision to read: 132.13 Subd. 33. [WALKER ART CENTER.] Materials, equipment, and 132.14 supplies used or consumed in construction of the Walker Art 132.15 Center and the related parking garage are exempt. 132.16[EFFECTIVE DATE.] This section is effective the day 132.17 following final enactment. 132.18 Sec. 20. Minnesota Statutes 2001 Supplement, section 132.19 297A.995, subdivision 4, is amended to read: 132.20 Subd. 4. [AUTHORITY TO ENTER AGREEMENT.] The commissioner 132.21 of revenue is authorized and directed to enter into the 132.22 agreement with one or more states to simplify and modernize 132.23 sales and use tax administration in order to substantially 132.24 reduce the burden of tax compliance for all sellers and for all 132.25 types of commerce. In furtherance of the agreement, the 132.26 commissioner is authorized to act jointly with other states that 132.27 are members of the agreement to establish standards for 132.28 certification of a certified service provider and certified 132.29 automated system and establish performance standards for 132.30 multistate sellers. 132.31 The commissioner of revenue is further directed to 132.32 negotiate the agreement with the express intention of ensuring 132.33 uniform sales and use taxation as applied to like-kind 132.34 transactions. 132.35 The commissioner is further authorized to take other 132.36 actions reasonably required to implement the provisions set 133.1 forth in this article. Other actions authorized by this section 133.2 include, but are not limited to, the adoption of rules and 133.3 regulations and the joint procurement, with other member states, 133.4 of goods and services in furtherance of the cooperative 133.5 agreement. 133.6 The commissioner or the commissioner's designee is 133.7 authorized to represent this state before the other states that 133.8 are signatories to the agreement. 133.9[EFFECTIVE DATE.] This section is effective the day 133.10 following final enactment. 133.11 Sec. 21. Laws 1990, chapter 604, article 6, section 9, 133.12 subdivision 1, as amended by Laws 1991, chapter 291, article 8, 133.13 section 25, is amended to read: 133.14 Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota 133.15 Statutes, section 469.190, 477A.016, or other law, in addition 133.16 to the tax authorized in Laws 1986, chapter 391, section 4, the 133.17 governing body of the city of Bloomington may impose a tax of up 133.18 toonetwo percent on the gross receipts from the furnishing for 133.19 consideration of lodging at a hotel, motel, rooming house, 133.20 tourist court, or resort, other than the renting or leasing of 133.21 it for a continuous period of 30 days or more, located in the 133.22 city. The city may agree with the commissioner of revenue that 133.23 a tax imposed under this section shall be collected by the 133.24 commissioner together with the tax imposed by Minnesota 133.25 Statutes, chapter 297A, and subject to the same interest, 133.26 penalties, and other rules and that its proceeds, less the cost 133.27 of collection, shall be remitted to the city. The proceeds of 133.28 the tax must be used by the Bloomington convention bureau only 133.29 to market and promote the city as a tourist or convention 133.30 center. If the duties of the convention bureau as they existed 133.31 on January 1, 1991, are assigned to another agency, the tax 133.32 shall cease. 133.33[EFFECTIVE DATE; LOCAL APPROVAL.] This section takes effect 133.34 the day after the governing body of the city of Bloomington 133.35 complies with Minnesota Statutes, section 645.021, subdivision 3. 133.36 Sec. 22. Laws 1996, chapter 471, article 2, section 29, is 134.1 amended to read: 134.2 Sec. 29. [CITY OF HERMANTOWN; SALES AND USE TAX.] 134.3 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] (a) 134.4 Notwithstanding Minnesota Statutes, section 477A.016, or any 134.5 other contrary provision of law, ordinance, or city charter, the 134.6 city of Hermantown may, by ordinance, impose an additional sales 134.7 and use tax of up to one percent on salestransactionstaxable 134.8 pursuant to Minnesota Statutes, chapter 297A, that occur within 134.9 the city. 134.10 (b) The proceeds of the first one-half of one percent of 134.11 tax imposed under this section must be usedto meet the costs of134.12 by the city for the following projects: 134.13 (1) extending a sewer interceptor line; 134.14 (2) construction of a booster pump station, reservoirs, and 134.15 related improvements to the water system; and 134.16 (3) construction of a police and fire station. 134.17 (c) Revenues received from the remaining one-half of one 134.18 percent of the tax authorized under this section must be used by 134.19 the city to pay all or part of the capital and administrative 134.20 costs of developing, acquiring, constructing, and initially 134.21 furnishing and equipping for the following projects: 134.22 (1) construction of a community education and recreation 134.23 center that includes a senior citizens center, fitness center, 134.24 swimming pool, community meeting and education room, community 134.25 technology library, and indoor track; 134.26 (2) renovation or construction of an addition to the 134.27 school's existing ice facility; 134.28 (3) construction of a new city hall; 134.29 (4) construction of a new public works garage; 134.30 (5) construction of frontage roads and other traffic 134.31 control measures along Highway 53 within the city of Hermantown; 134.32 and 134.33 (6) construction of bleachers, and outdoor soccer, 134.34 football, and track facilities at the school. 134.35 (d) Authorized expenses include, but are not limited to, 134.36 acquiring property, paying construction, administrative, and 135.1 operating expenses related to the development of the projects 135.2 listed in paragraph (c), paying debt service on bonds or other 135.3 obligations, including lease obligations, issued to finance 135.4 construction, expansion, or improvement of the projects listed 135.5 in paragraph (c), and other compatible uses, including but not 135.6 limited to, parking, lighting, and landscaping. 135.7 Subd. 2. [REFERENDUM.] (a) If the Hermantown city council 135.8 proposes to impose the sales tax authorized by this section, it 135.9 shall conduct a referendum on the issue. 135.10 (b) If the Hermantown city council initially imposes the 135.11 tax at a rate less than one percent and proposes increasing it 135.12 at a later date up to the authorized rate in subdivision 1, it 135.13 shall conduct a referendum on the increase. 135.14 (c) The question of imposing or increasing the tax must be 135.15 submitted to the voters at a special or general election. The 135.16 tax may not be imposed unless a majority of votes cast on the 135.17 question of imposing the tax are in the affirmative. The 135.18 commissioner of revenue shall prepare a suggested form of 135.19 question to be presented at the election. This subdivision 135.20 applies notwithstanding any city charter provision to the 135.21 contrary. 135.22 Subd. 3. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 135.23 TAXES.] A sales tax imposed under this section must be reported 135.24 and paid to the commissioner of revenue with the state sales 135.25 taxes, and be subject to the same penalties, interest, and 135.26 enforcement provisions. The proceeds of the tax, less refunds 135.27 and a proportionate share of the cost of collection, shall be 135.28 remitted at least quarterly to the city. The commissioner shall 135.29 deduct from the proceeds remitted an amount that equals the 135.30 indirect statewide cost as well as the direct and indirect 135.31 department costs necessary to administer, audit, and collect the 135.32 tax. The amount deducted shall be deposited in the state 135.33 general fund. 135.34 Subd. 3a. [BONDING AUTHORITY.] (a) The city may issue 135.35 general obligation bonds under Minnesota Statutes, chapter 475, 135.36 to finance the costs in subdivision 1, paragraph (c). The total 136.1 amount of bonds issued for the projects under subdivision 1, 136.2 paragraph (c), may not exceed $12,900,000 in the aggregate. An 136.3 election to approve the bonds is not required. 136.4 (b) The bonds are not included in computing any debt 136.5 limitation applicable to the city and the levy of taxes under 136.6 Minnesota Statutes, section 475.61, to pay principal of and 136.7 interest on the bonds is not subject to any levy limitation. 136.8 (c) The taxes authorized under this section may be pledged 136.9 to and used for the payment of the bonds and any bonds issued to 136.10 refund them. 136.11 Subd. 4. [TERMINATION.] The portion of the tax authorized 136.12 under this section to finance the improvements described in 136.13 subdivision 1, paragraph (b), terminates at the later of (1) ten 136.14 years after the date of initial imposition of the tax, or (2) on 136.15 the first day of the second month next succeeding a 136.16 determination by the city council that sufficient funds have 136.17 been received from that portion of the tax dedicated to finance 136.18thethose improvementsdescribed in subdivision 1, clauses (1)136.19to (3),and to prepay or retire at maturity the principal, 136.20 interest, and premium due on any bonds issued for the 136.21 improvements. The portion of the tax authorized under this 136.22 section to finance the improvements described in subdivision 1, 136.23 paragraph (c), terminates when the revenues raised are 136.24 sufficient to finance those improvements, up to an amount equal 136.25 to $12,900,000 plus any interest, premium, and other costs 136.26 associated with the bonds issued under subdivision 3a. The city 136.27 council may terminate this portion of the tax earlier. Any 136.28 funds remaining after completion of the improvements and 136.29 retirement or redemption of the bonds may be placed in the 136.30 general fund of the city. 136.31 Subd. 5. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 136.32 effective the day after final enactment, upon compliance with 136.33 Minnesota Statutes, section 645.021, subdivision 3, by the city 136.34 of Hermantown. 136.35[EFFECTIVE DATE.] This section is effective the day after 136.36 final enactment, upon compliance with Minnesota Statutes, 137.1 section 645.021, subdivision 3, by the city of Hermantown. 137.2 Sec. 23. Laws 1998, chapter 389, article 8, section 37, 137.3 subdivision 2, is amended to read: 137.4 Subd. 2. [APPOINTMENT OF MEMBERS.] The citizen review 137.5 panelmust consist of 17 members, each of whom represents one of137.6the district councilsconsists of three residents from each of 137.7 the seven city council wards, for a total of 21 members. The 137.8 mayor must appoint the members, and the appointments are subject 137.9 to confirmation by a majority vote of the city council. Members 137.10 serve for a term of four years. Elected officials and employees 137.11 of the city are ineligible to serve as members of the panel. 137.12[EFFECTIVE DATE.] This section is effective upon approval 137.13 by the governing body of the city of St. Paul and compliance 137.14 with Minnesota Statutes, section 645.021. 137.15 Sec. 24. Laws 2001, First Special Session chapter 5, 137.16 article 12, section 11, the effective date, is amended to read: 137.17[EFFECTIVE DATE.] This section is effective for January 1, 137.18 2002, however, for contracts entered into before January 1, 137.19 2002, the sale price for aggregate materials and concrete block 137.20 does not include delivery charges until January 1, 2005. 137.21 Sec. 25. Laws 2001, First Special Session chapter 5, 137.22 article 12, section 82, the effective date, is amended to read: 137.23[EFFECTIVE DATE.] This section is effectiveJanuary 1, 2003137.24 for sales and purchases made after December 31, 2005. 137.25 Sec. 26. [ROCHESTER LODGING TAX.] 137.26 Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota 137.27 Statutes, section 469.190 or 477A.016, or any other law, the 137.28 city of Rochester may impose an additional tax of two percent on 137.29 the gross receipts from the furnishing for consideration of 137.30 lodging at a hotel, motel, rooming house, tourist court, or 137.31 resort, other than the renting or leasing of it for a continuous 137.32 period of 30 days or more. 137.33 Subd. 2. [DISPOSITION OF PROCEEDS.] The gross proceeds 137.34 from any tax imposed under subdivision 1 must be used by the 137.35 city to fund a local convention or tourism bureau for the 137.36 purpose of marketing and promoting the city as a tourist or 138.1 convention center. 138.2[EFFECTIVE DATE.] This section is effective for lodging 138.3 furnished on or after July 1, 2002. 138.4 Sec. 27. [CITY OF ALBERT LEA; SALES AND USE TAX.] 138.5 Subdivision 1. [SALES AND USE TAX 138.6 AUTHORIZED.] Notwithstanding Minnesota Statutes, section 138.7 477A.016, or any other provision of law, ordinance, or city 138.8 charter, the city of Albert Lea may, by ordinance, impose a 138.9 sales and use tax of one-half of one percent for the purposes 138.10 specified in subdivision 2. Except as otherwise specifically 138.11 provided, the provisions of Minnesota Statutes, section 297A.99, 138.12 govern the imposition, administration, collection, and 138.13 enforcement of the tax authorized under this subdivision. 138.14 Subd. 2. [USE OF REVENUES.] The proceed of the tax imposed 138.15 under this section must be used to pay the costs of the 138.16 following projects: 138.17 (1) lake improvement projects, which are specified at least 138.18 90 days before the occurrence of the referendum as required by 138.19 Minnesota Statutes, section 297A.99, subdivision 3; and 138.20 (2) downtown improvement projects, which are specified at 138.21 least 90 days before the occurrence of the referendum as 138.22 required by Minnesota Statutes, section 297A.99, subdivision 3. 138.23 Subd. 3. [REFERENDUM.] If the Albert Lea city council 138.24 proposes to impose the tax authorized by this section, the 138.25 question of imposing the tax must be submitted to the voters at 138.26 the next general election. The tax must not be imposed unless 138.27 the majority of votes cast on the question of imposing the tax 138.28 are in the affirmative. The commissioner of revenue shall 138.29 prepare a suggested form of the question to be presented at the 138.30 election. The question must state that the sales and use tax 138.31 revenues would be pledged to pay any bonds issued under 138.32 subdivision 4 and that these bonds are guaranteed by the city's 138.33 property taxes. 138.34 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 138.35 under Minnesota Statutes, chapter 475, to finance the capital 138.36 expenditure and improvement projects authorized under 139.1 subdivision 2. The total amount of bonds issued for the 139.2 projects listed in subdivision 2 may not exceed $14,500,000 in 139.3 aggregate. An election to approve the bonds, as required under 139.4 Minnesota Statutes, section 475.58, is not required. 139.5 (b) The issuance of the bonds under this subdivision is not 139.6 subject to Minnesota Statutes, sections 275.60 and 275.61. 139.7 (c) The bonds are not included in computing any debt 139.8 limitation applicable to the city, and the levy of taxes under 139.9 Minnesota Statutes, section 475.61, to pay the principal of and 139.10 interest on the bonds is not subject to any levy limitation. 139.11 (d) The tax authorized under this section may be pledged to 139.12 and used for the payment of the bonds and any bonds issued to 139.13 refund them only if the bonds and any refunding bonds are 139.14 general obligations of the city. 139.15 Subd. 5. [TERMINATION OF TAXES.] The tax imposed under 139.16 this section expires at the earlier of (1) ten years after the 139.17 tax is first imposed, or (2) when the city council first 139.18 determines that the amount of revenues raised to pay for the 139.19 projects under subdivision 2, shall meet or exceed the sum of 139.20 $14,500,000, plus an amount equal to the costs related to the 139.21 issuance of bonds under subdivision 4. Any funds remaining 139.22 after completion of the projects and retirement or redemption of 139.23 the bonds may be placed in the general funds of the city. 139.24[EFFECTIVE DATE.] This section is effective the day after 139.25 compliance by the governing body of the city of Albert Lea with 139.26 Minnesota Statutes, section 645.021, subdivision 3. 139.27 Sec. 28. [CITY OF CLOQUET; TAXES AUTHORIZED.] 139.28 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 139.29 Minnesota Statutes, section 477A.016, or any other provision of 139.30 law, ordinance, or city charter, the city of Cloquet may impose 139.31 by ordinance a sales and use tax of up to one-half of one 139.32 percent for the purpose specified in subdivision 3. Except as 139.33 otherwise specifically provided in this section, the provisions 139.34 of Minnesota Statutes, section 297A.99, govern the imposition, 139.35 administration, collection, and enforcement of the tax 139.36 authorized under this subdivision. 140.1 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 140.2 Minnesota Statutes, section 477A.016, or any other provision of 140.3 law, ordinance, or city charter, the city of Cloquet may impose 140.4 by ordinance, for the purposes specified in subdivision 3, an 140.5 excise tax of up to $20 per motor vehicle, as defined by 140.6 ordinance, purchased or acquired from any person engaged within 140.7 the city in the business of selling motor vehicles at retail. 140.8 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 140.9 authorized by subdivisions 1 and 2 must be used by the city to 140.10 pay the cost of collecting the taxes and to pay for the 140.11 following projects: 140.12 (1) construction and equipment of a senior and community 140.13 center; 140.14 (2) construction and improvements to park land along the St. 140.15 Louis river; and 140.16 (3) extension of water and sewer lines and other 140.17 improvements to city infrastructure for expansion of a city 140.18 industrial park. 140.19 Authorized expenses include, but are not limited to, 140.20 acquiring property, paying construction, and operating expenses 140.21 related to the development of the facility, and paying debt 140.22 service on bonds or other obligations, including lease 140.23 obligations, issued to finance the construction, expansion, or 140.24 improvement of the facility. 140.25 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 140.26 under Minnesota Statutes, chapter 475, to finance the capital 140.27 expenditure and improvement projects described in subdivision 3. 140.28 An election to approve the bonds under Minnesota Statutes, 140.29 section 475.58, is not required. 140.30 (b) The issuance of bonds under this subdivision is not 140.31 subject to Minnesota Statutes, sections 275.60 and 275.61. 140.32 (c) The bonds are not included in computing any debt 140.33 limitation applicable to the city, and the levy of taxes under 140.34 Minnesota Statutes, section 475.61, to pay principal of and 140.35 interest on the bonds is not subject to any levy limitation. 140.36 (d) The sales and use and excise taxes authorized in this 141.1 section may be pledged to and used for the payment of the bonds 141.2 and any bonds issued to refund them only if the bonds and any 141.3 refunding bonds are general obligations of the city. 141.4 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 141.5 subdivisions 1 and 2 expire at the earlier of (1) 20 years, or 141.6 (2) when the city council determines that sufficient funds have 141.7 been received from the taxes to finance the capital and 141.8 administrative costs for the acquisition, construction, 141.9 expansion, and improvement of the facility described in 141.10 subdivision 3, plus the additional amount needed to pay the 141.11 costs related to issuance of bonds under subdivision 4, 141.12 including interest on the bonds. Any funds remaining after 141.13 completion of the project and retirement or redemption of the 141.14 bonds may be placed in the general fund of the city. The taxes 141.15 imposed under subdivisions 1 and 2 may expire at an earlier time 141.16 if the city so determines by ordinance. 141.17[EFFECTIVE DATE.] This section is effective the day after 141.18 compliance by the governing body of the city of Cloquet with 141.19 Minnesota Statutes, section 645.021, subdivision 3. 141.20 Sec. 29. [CITY OF ELY; TAXES AUTHORIZED.] 141.21 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 141.22 Minnesota Statutes, section 297A.99, subdivision 3; 477A.016; or 141.23 any other provision of law, ordinance, or city charter, if 141.24 approved by the city voters at the first municipal general or 141.25 special election held after the date of final enactment of this 141.26 act, the city of Ely may impose by ordinance a sales and use tax 141.27 of up to one percent for the purposes specified in subdivision 141.28 2. Except as otherwise provided in this section, the provisions 141.29 of Minnesota Statutes, section 297A.99, govern the imposition, 141.30 administration, collection, and enforcement of the tax 141.31 authorized under this subdivision. 141.32 Subd. 2. [USE OF REVENUES.] Revenues received from taxes 141.33 authorized by subdivision 1 must be used by the city to pay the 141.34 cost of collecting and administering the taxes and to pay all or 141.35 part of the capital and administrative costs of acquiring, 141.36 constructing, furnishing, equipping, expanding, improving, and 142.1 developing city facilities, which the city council finds, by 142.2 resolution, are related to economic development or job creation, 142.3 including, but not limited to, the following: 142.4 (1) land acquisition and site development; 142.5 (2) installation of improvements authorized by Minnesota 142.6 Statutes, chapter 429; 142.7 (3) development or redevelopment activities in the central 142.8 business district of the city; 142.9 (4) business park development; 142.10 (5) development of a small business incubator; 142.11 (6) development of a technology center; or 142.12 (7) Americans With Disabilities Act compliance improvements 142.13 to the Ely community center and city hall. 142.14 Authorized expenses include, but are not limited to, acquiring 142.15 and clearing property; paying construction, administrative, and 142.16 operating expenses related to the development of the facilities 142.17 listed herein; and paying debt service on bonds or other 142.18 obligations, including lease obligations, issued to finance the 142.19 activities listed herein and other compatible and related 142.20 activities, including, but not limited to, parking, lighting, 142.21 and landscaping improvements. The capital expenses for all 142.22 projects authorized under this paragraph that may be paid with 142.23 these taxes are limited to $4,000,000 plus an amount equal to 142.24 the costs related to issuance of the bonds. 142.25 Subd. 3. [BONDING AUTHORITY.] (a) The city may issue bonds 142.26 under Minnesota Statutes, chapter 475, to finance the capital 142.27 expenditure and improvement projects described in subdivision 142.28 2. An election to approve the bonds under Minnesota Statutes, 142.29 section 475.58, is not required. 142.30 (b) The issuance of bonds under this subdivision is not 142.31 subject to Minnesota Statutes, section 275.60 or 275.61. 142.32 (c) The bonds are not included in computing any debt 142.33 limitation applicable to the city, and the levy of taxes under 142.34 Minnesota Statutes, section 475.61, to pay principal of and 142.35 interest on the bonds is not subject to any levy limitation. 142.36 (d) The aggregate principal amount of bonds plus the 143.1 aggregate of the taxes used directly to pay eligible capital 143.2 expenditures and improvements may not exceed $4,000,000 plus an 143.3 amount equal to the costs related to issuance of the bonds, 143.4 including interest on the bonds. 143.5 (e) The taxes may be pledged to and used for the payment of 143.6 the bonds, and any bonds issued to refund them, only if the 143.7 bonds and any refunding bonds are general obligations of the 143.8 city. 143.9 Subd. 4. [TERMINATION OF TAXES.] The taxes imposed under 143.10 subdivision 1 expire when the city council determines that the 143.11 amount described in subdivision 3, paragraph (d), has been 143.12 received from the taxes to finance the activities described in 143.13 subdivision 2 plus the additional amount needed to pay the costs 143.14 related to issuance of bonds under subdivision 3. Any funds 143.15 remaining after completion of the activities described in 143.16 subdivision 3 and retirement or redemption of the bonds may be 143.17 placed in the general fund of the city. The taxes imposed under 143.18 subdivisions 1 and 2 may expire at an earlier time if the city 143.19 so determines by ordinance. 143.20 Subd. 5. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 143.21 effective the day following final enactment, upon compliance 143.22 with Minnesota Statutes, section 645.021, subdivision 3, by the 143.23 city of Ely. 143.24 Sec. 30. [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 143.25 Subdivision 1. [SALES AND USE TAXES.] Notwithstanding 143.26 Minnesota Statutes, section 477A.016, or any other provision of 143.27 law or ordinance, if approved by the voters of the city at the 143.28 next general election held after the date of final enactment of 143.29 this act, the city of Beaver Bay may impose by ordinance a sales 143.30 and use tax at a rate of up to one percent for the purposes 143.31 specified in subdivision 2. The provisions of Minnesota 143.32 Statutes, section 297A.99, govern the imposition, 143.33 administration, collection, and enforcement of the tax 143.34 authorized under this subdivision. 143.35 Subd. 2. [USE OF REVENUES.] The revenues received from 143.36 taxes authorized by subdivision 1 must be used to pay the bonded 144.1 indebtedness on the city community building and to provide 144.2 funding for recreational facilities, the upgrading of the water 144.3 and sewer system, a fire hall and equipment, and improvement of 144.4 streets. 144.5 Subd. 3. [TERMINATION OF TAXES.] The authority granted 144.6 under subdivision 1 to the city of Beaver Bay to impose sales 144.7 and use taxes expires when the city council determines that 144.8 sufficient funds have been received to pay the costs of the 144.9 projects described in subdivision 2. 144.10[EFFECTIVE DATE.] This section is effective the day after 144.11 approval by the governing body of the city of Beaver Bay and 144.12 compliance with Minnesota Statutes, section 645.021, subdivision 144.13 3. 144.14 Sec. 31. [CITY OF MEDFORD; SALES AND USE TAX.] 144.15 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 144.16 Notwithstanding Minnesota Statutes, section 477A.016, or any 144.17 other provision of law, ordinance, or city charter, the city of 144.18 Medford may, by ordinance, impose a sales and use tax of 144.19 one-half of one percent for the purposes specified in 144.20 subdivision 2. Except as otherwise specifically provided, the 144.21 provisions of Minnesota Statutes, section 297A.99, govern the 144.22 imposition, administration, collection, and enforcement of the 144.23 tax authorized under this subdivision. 144.24 Subd. 2. [USE OF REVENUES.] Revenues received from the tax 144.25 authorized by subdivision 1 must be used to pay for the cost of 144.26 collecting and administering the tax and to pay all or part of 144.27 the capital and administrative costs of the construction and 144.28 improvement of wastewater treatment facilities. Authorized 144.29 expenses include, but are not limited to, acquiring the 144.30 property, paying construction and operating expenses related to 144.31 the development of the facilities, and securing and paying debt 144.32 service on bonds or other obligations issued to finance 144.33 construction and improvement of the authorized facilities. 144.34 Subd. 3. [REFERENDUM.] If the Medford city council 144.35 proposes to impose the tax authorized by this section, the 144.36 question of imposing the tax must be submitted to the voters at 145.1 the next general election. The tax must not be imposed unless 145.2 the majority of votes cast on the question of imposing the tax 145.3 are in the affirmative. The commissioner of revenue shall 145.4 prepare a suggested form of the question to be presented at the 145.5 election. The question must state that the sales and use tax 145.6 revenues would be pledged to pay any bonds issued under 145.7 subdivision 4 and that these bonds are guaranteed by the city's 145.8 property taxes. 145.9 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 145.10 under Minnesota Statutes, chapter 475, to finance the capital 145.11 expenditure and improvement projects authorized under 145.12 subdivision 2. The total amount of bonds issued for the 145.13 projects listed in subdivision 2 may not exceed $5,500,000 in 145.14 aggregate. An election to approve the bonds, as required under 145.15 Minnesota Statutes, section 475.58, is not required. 145.16 (b) The issuance of the bonds under this subdivision is not 145.17 subject to Minnesota Statutes, sections 275.60 and 275.61. 145.18 (c) The bonds are not included in computing any debt 145.19 limitation applicable to the city, and the levy of taxes under 145.20 Minnesota Statutes, section 475.61, to pay the principal of and 145.21 interest on the bonds is not subject to any levy limitation. 145.22 (d) The tax authorized under this section may be pledged to 145.23 and used for the payment of the bonds and any bonds issued to 145.24 refund them only if the bonds and any refunding bonds are 145.25 general obligations of the city. 145.26 Subd. 5. [TERMINATION OF TAXES.] The tax imposed under 145.27 this section expires at the earlier of (1) 20 years after the 145.28 tax is first imposed, or (2) when the city council first 145.29 determines that the amount of revenues raised to pay for the 145.30 projects under subdivision 2 shall meet or exceed the sum of 145.31 $5,500,000, plus an amount equal to the costs related to the 145.32 issuance of bonds under subdivision 4. Any funds remaining 145.33 after completion of the projects and retirement or redemption of 145.34 the bonds may be placed in the general funds of the city. 145.35[EFFECTIVE DATE.] This section is effective the day after 145.36 compliance by the governing body of the city of Medford with 146.1 Minnesota Statutes, section 645.021, subdivision 3. 146.2 Sec. 32. [REPEALER.] 146.3 (a) Minnesota Statutes 2000, section 297A.68, subdivision 146.4 26, is repealed effective for sales and purchases made after 146.5 June 30, 2003. 146.6 (b) Minnesota Statutes 2001 Supplement, section 297A.61, 146.7 subdivision 31, is repealed, effective July 1, 2002. 146.8 ARTICLE 16 146.9 PROPERTY TAX 146.10 Section 1. Minnesota Statutes 2001 Supplement, section 146.11 126C.21, subdivision 4, is amended to read: 146.12 Subd. 4. [TACONITE DEDUCTIONS.] (1) Notwithstanding any 146.13 provisions of any other law to the contrary, the adjusted net 146.14 tax capacity used in calculating general education aid may 146.15 include only that property that is currently taxable in the 146.16 district. 146.17 (2) For districts that received payments under sections 146.18 298.018; 298.225; 298.28; 298.34 to 298.39; 298.391 to 298.396; 146.19 and 298.405, orany law imposing a tax upon severed mineral 146.20 values; or recognized revenue under section 477A.15; the general 146.21 education aid must be reduced in the final adjustment payment by 146.22 the difference between the dollar amount of the payments 146.23 received pursuant to those sections, or revenue recognized under 146.24 section 477A.15 in the fiscal year to which the final adjustment 146.25 is attributable and the amount that was calculated, pursuant to 146.26 section 126C.48, subdivision 8, as a reduction of the levy 146.27 attributable to the fiscal year to which the final adjustment is 146.28 attributable. If the final adjustment of a district's general 146.29 education aid for a fiscal year is a negative amount because of 146.30 this clause, the next fiscal year's general education aid to 146.31 that district must be reduced by this negative amount in the 146.32 following manner: there must be withheld from each scheduled 146.33 general education aid payment due the district in such fiscal 146.34 year, 15 percent of the total negative amount, until the total 146.35 negative amount has been withheld. The amount reduced from 146.36 general education aid pursuant to this clause must be recognized 147.1 as revenue in the fiscal year to which the final adjustment 147.2 payment is attributable. 147.3 Sec. 2. [126C.445] [TREE GROWTH REPLACEMENT REVENUE.] 147.4 For taxes payable in 2003 and later, a school district may 147.5 levy an amount not to exceed its miscellaneous revenue for tree 147.6 growth revenue for taxes payable in 2002. 147.7 Sec. 3. Minnesota Statutes 2001 Supplement, section 147.8 126C.48, subdivision 8, is amended to read: 147.9 Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 147.10 Reductions in levies pursuant to sections 126C.48, subdivision 147.11 1, and 273.138, must be made prior to the reductions in clause 147.12 (2). 147.13 (2) Notwithstanding any other law to the contrary, 147.14 districts which received payments pursuant to sections 298.018; 147.15 298.225; 298.28, except an amount distributed under section 147.16 298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 147.17 298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 147.18 upon severed mineral values; or recognized revenue under section 147.19 477A.15 must not include a portion of these aids in their 147.20 permissible levies pursuant to those sections, but instead must 147.21 reduce the permissible levies authorized by this chapter and 147.22 chapters 120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A by 147.23 the greater of the following: 147.24 (a) an amount equal to 50 percent of the total dollar 147.25 amount of the payments received pursuant to those sections or 147.26 revenue recognized under section 477A.15 in the previous fiscal 147.27 year; or 147.28 (b) an amount equal to the total dollar amount of the 147.29 payments received pursuant to those sections or revenue 147.30 recognized under section 477A.15 in the previous fiscal year 147.31 less the product of the same dollar amount of payments or 147.32 revenue times five percent. 147.33 For levy year 2002 only, 77 percent of the amounts 147.34 distributed under section 298.225; 298.28 except an amount 147.35 distributed under section 298.28, subdivision 4, paragraph (c), 147.36 clause (ii); and 100 percent of the amounts distributed under 148.1 sections 298.018; 298.34 to 298.39; 298.391 to 298.396; 298.405; 148.2 and any law imposing a tax upon severed mineral values, or 148.3 recognized revenue under section 477A.15 shall be used for 148.4 purposes of the calculations under this paragraph. 148.5 (3)The amount of any increased levy authorized by148.6referendum pursuant to section 126C.17, subdivision 9, shall not148.7be reduced pursuant to this subdivision. The amount of any levy148.8authorized by section 126C.43, to make payments for bonds issued148.9and for interest thereon, shall not be reduced pursuant to this148.10subdivisionIn no instance may this subdivision reduce the levy 148.11 of a school district before application of this subdivision by 148.12 greater than 75 percent. 148.13 (4) Before computing the reduction pursuant to this 148.14 subdivision of the health and safety levy authorized by sections 148.15 123B.57 and 126C.40, subdivision 5, the commissioner shall 148.16 ascertain from each affected school district the amount it 148.17 proposes to levy under each section or subdivision. The 148.18 reduction shall be computed on the basis of the amount so 148.19 ascertained. 148.20 (5)Notwithstanding any law to the contrary, any amounts148.21received by districts in any fiscal year pursuant to sections148.22298.018; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any148.23law imposing a tax on severed mineral values; and not deducted148.24from general education aid pursuant to section 126C.21,148.25subdivision 4, clause (2), and not applied to reduce levies148.26pursuant to this subdivision shall be paid by the district to148.27the St. Louis county auditor in the following amount by March 15148.28of each year, the amount required to be subtracted from the148.29previous fiscal year's general education aid pursuant to section148.30126C.21, subdivision 4, which is in excess of the general148.31education aid earned for that fiscal year. The county auditor148.32shall deposit any amounts received pursuant to this clause in148.33the St. Louis county treasury for purposes of paying the148.34taconite homestead credit as provided in section 273.135To the 148.35 extent the levy reduction calculated under paragraph 2 exceeds 148.36 the limitation in paragraph 3, an amount equal to the excess 149.1 must be distributed from the school district's distribution 149.2 under sections 298.225 and 298.28 in the following year to the 149.3 cities and townships within the school district in the 149.4 proportion that their taxable net tax capacity within the school 149.5 district bears to the taxable net tax capacity of the school 149.6 district for property taxes payable in the year prior to 149.7 distribution. No city or township shall receive a distribution 149.8 greater than its levy for taxes payable in the year prior to 149.9 distribution. The commissioner of revenue shall certify the 149.10 distributions of cities and towns under this paragraph to the 149.11 county auditor by September 30 of the year preceding 149.12 distribution. The county auditor shall reduce the proposed and 149.13 final levies of cities and towns receiving distributions by the 149.14 amount of their distribution. Distributions to the cities and 149.15 towns shall be made at the times provided under section 298.27. 149.16 Sec. 4. [177.356] [TAX-SUBSIDIZED ENERGY PROJECTS.] 149.17 Construction, erection, remodeling, or repair of an 149.18 electric energy generating plant or other energy facility that 149.19 is specifically identified by a law and granted special tax 149.20 treatment by that law is a project as defined in section 177.42, 149.21 subdivision 2. A contract for such a project must comply with 149.22 section 177.43. 149.23 Sec. 5. Minnesota Statutes 2001 Supplement, section 149.24 272.02, subdivision 22, is amended to read: 149.25 Subd. 22. [WIND ENERGY CONVERSION SYSTEMS.](a) Small149.26scale wind energy conversion systems installed after January 1,149.271991, and used as an electric power source are exempt.149.28"Small scale wind energy conversion systems" are wind149.29energy conversion systems, as defined in section 216C.06,149.30subdivision 12, including the foundation or support pad, which149.31(i) are used as an electric power source; (ii) are located149.32within one county and owned by the same owner; and (iii) produce149.33two megawatts or less of electricity as measured by nameplate149.34ratings.149.35(b) Medium scale wind energy conversion systems installed149.36after January 1, 1991, are treated as follows: (i) the150.1foundation and support pad are taxable; (ii) the associated150.2supporting and protective structures are exempt for the first150.3five assessment years after they have been constructed, and150.4thereafter, 30 percent of the market value of the associated150.5supporting and protective structures are taxable; and (iii) the150.6turbines, blades, transformers, and its related equipment, are150.7exempt. "Medium scale wind energy conversion systems" are wind150.8energy conversion systems as defined in section 216C.06,150.9subdivision 12, including the foundation or support pad, which:150.10(i) are used as an electric power source; (ii) are located150.11within one county and owned by the same owner; and (iii) produce150.12more than two but equal to or less than 12 megawatts of energy150.13as measured by nameplate ratings.150.14(c) Large scale wind energy conversion systems installed150.15after January 1, 1991, are treated as follows: 25 percent of150.16the market value of all property is taxable, including (i) the150.17foundation and support pad; (ii) the associated supporting and150.18protective structures; and (iii) the turbines, blades,150.19transformers, and its related equipment. "Large scale wind150.20energy conversion systems" are wind energy conversion systems as150.21defined in section 216C.06, subdivision 12, including the150.22foundation or support pad, which (i) are used as an electric150.23power source; and (ii) produce more than 12 megawatts of energy150.24as measured by nameplate ratings.150.25(d) The total size of a wind energy conversion system under150.26this subdivision shall be determined according to this paragraph.150.27Unless the systems are interconnected with different150.28distribution systems, the nameplate capacity of one wind energy150.29conversion system shall be combined with the nameplate capacity150.30of any other wind energy conversion system that is:150.31(1) located within five miles of the wind energy conversion150.32system;150.33(2) constructed within the same calendar year as the wind150.34energy conversion system; and150.35(3) under common ownership.150.36In the case of a dispute, the commissioner of commerce151.1shall determine the total size of the system, and shall draw all151.2reasonable inferences in favor of combining the systems.151.3(e) In making a determination under paragraph (d), the151.4commissioner of commerce may determine that two wind energy151.5conversion systems are under common ownership when the151.6underlying ownership structure contains similar persons or151.7entities, even if the ownership shares differ between the two151.8systems. Wind energy conversion systems are not under common151.9ownership solely because the same person or entity provided151.10equity financing for the systems.151.11 All real and personal property of a wind energy conversion 151.12 system as defined in section 272.029, subdivision 2, is exempt 151.13 from property tax in lieu of payments received under section 151.14 272.028 or 272.029, except the land on which it is located 151.15 remains taxable. 151.16 Sec. 6. Minnesota Statutes 2000, section 272.02, 151.17 subdivision 42, is amended to read: 151.18 Subd. 42. [PROPERTY LEASED TO SCHOOL DISTRICTS.] Property 151.19 that is leased or rented to a school district is exempt from 151.20 taxation if it meets the following requirements: 151.21 (1) the lease must be for a period of at least 12 151.22 consecutive months; 151.23 (2) the terms of the lease must either: 151.24 (i) require the school district to pay a nominal 151.25 consideration for use of the building; or 151.26 (ii) provide that the consideration that would otherwise be 151.27 charged to the school district for lease or rental of the 151.28 property, which must be no greater than market rent, will be 151.29 reduced by an amount equal to the property tax foregone due to 151.30 the exemption, as verified by the assessor. The owner of the 151.31 property must provide the information required by the assessor 151.32 to verify these conditions; 151.33 (3) the school district must use the property to provide 151.34 direct instruction in any grade from kindergarten through grade 151.35 12; special education for handicapped children; adult basic 151.36 education as described in section 124D.52; preschool and early 152.1 childhood family education; or community education programs, 152.2 including provision of administrative services directly related 152.3 to the educational program at that site; and 152.4 (4) the lease must provide that the school district has the 152.5 exclusive use of the property during the lease period. 152.6[EFFECTIVE DATE.] This section is effective for taxes 152.7 payable in 2003 and thereafter. 152.8 Sec. 7. Minnesota Statutes 2000, section 272.02, is 152.9 amended by adding a subdivision to read: 152.10 Subd. 50. [ELECTRIC GENERATION FACILITY PERSONAL 152.11 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 152.12 machinery and other personal property which is part of a 152.13 combined cycle natural gas turbine electric generation facility 152.14 of 43 megawatts of installed capacity and that meets the 152.15 requirements of this subdivision is exempt. At the time of 152.16 construction, the facility must: 152.17 (1) utilize a combined cycle gas turbine generator fueled 152.18 by natural gas; 152.19 (2) be connected to an existing 115-kilovolt high-voltage 152.20 electric transmission line that is within one mile of the 152.21 facility; 152.22 (3) be located on an underground natural gas storage 152.23 aquifer; 152.24 (4) be designed as an intermediate load facility; and 152.25 (5) have received, by resolution, the approval from the 152.26 governing body of the county for the exemption of personal 152.27 property under this subdivision. 152.28 Construction of the facility must be commenced after 152.29 January 1, 2002, and before January 1, 2004. Property eligible 152.30 for this exemption does not include electric transmission lines 152.31 and interconnections or gas pipelines and interconnections 152.32 appurtenant to the property or the facility. 152.33[EFFECTIVE DATE.] This section is effective for the 2002 152.34 assessment and thereafter. 152.35 Sec. 8. Minnesota Statutes 2000, section 272.02, is 152.36 amended by adding a subdivision to read: 153.1 Subd. 51. [ELECTRIC GENERATION FACILITY PERSONAL 153.2 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 153.3 machinery and other personal property which is part of a 153.4 simple-cycle combustion-turbine electric generation facility of 153.5 more than 40 megawatts and less than 50 megawatts of installed 153.6 capacity and that meets the requirements of this subdivision is 153.7 exempt. At the time of construction, the facility must: 153.8 (1) utilize natural gas as a primary fuel; 153.9 (2) be located within two miles of parallel existing 153.10 36-inch natural gas pipelines and an existing 115-kilovolt 153.11 high-voltage electric transmission line; 153.12 (3) be designed to provide peaking, emergency backup, or 153.13 contingency services; and 153.14 (4) satisfy a resource deficiency identified in an approved 153.15 integrated resource plan filed under section 216B.2422. 153.16 Construction of the facility must be commenced after 153.17 January 1, 2001, and before January 1, 2005. Property eligible 153.18 for this exemption does not include electric transmission lines 153.19 and interconnections or gas pipelines and interconnections 153.20 appurtenant to the property or the facility. 153.21[EFFECTIVE DATE.] This section is effective for the 2002 153.22 assessment and thereafter. 153.23 Sec. 9. Minnesota Statutes 2000, section 272.02, is 153.24 amended by adding a subdivision to read: 153.25 Subd. 52. [ELECTRIC GENERATION FACILITY; PERSONAL 153.26 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 153.27 machinery and other personal property which is part of an 153.28 electric generating facility that meets the requirements of this 153.29 subdivision is exempt. At the time of construction, the 153.30 facility must be sited on an energy park that (i) is located on 153.31 an active mining site, or on a former mining or industrial site 153.32 where mining or industrial operations have terminated, (ii) is 153.33 within a tax relief area as defined in section 273.134, (iii) 153.34 has on-site access to existing railroad infrastructure, (iv) has 153.35 direct rail access to a Great Lakes port, (v) has sufficient 153.36 private water resources on site, and (vi) is designed to host at 154.1 least 500 megawatts of electrical generation. 154.2 Construction of the first 250 megawatts of the facility 154.3 must be commenced after January 1, 2002, and before January 1, 154.4 2005. Construction of up to an additional 750 megawatts of 154.5 generation must be commenced before January 1, 2010. 154.6[EFFECTIVE DATE.] This section is effective for assessment 154.7 year 2003 and thereafter. 154.8 Sec. 10. Minnesota Statutes 2000, section 272.02, is 154.9 amended by adding a subdivision to read: 154.10 Subd. 53. [SMALL BIOMASS ELECTRIC GENERATION FACILITY; 154.11 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 154.12 attached machinery and other personal property which is part of 154.13 an electrical generating facility that meets the requirements of 154.14 this subdivision is exempt. At the time of construction the 154.15 facility must: 154.16 (1) have a generation capacity of less than 25 megawatts; 154.17 (2) provide process heating needs in addition to electrical 154.18 generation; and 154.19 (3) utilize agricultural by-products from the malting 154.20 process and other biomass fuels as its primary fuel source. 154.21 Property eligible for this exemption does not include 154.22 electric transmission lines and interconnections or gas 154.23 pipelines and interconnections appurtenant to the property or 154.24 facility. 154.25[EFFECTIVE DATE.] This section is effective for assessment 154.26 year 2003, and thereafter. 154.27 Sec. 11. Minnesota Statutes 2000, section 272.02, is 154.28 amended by adding a subdivision to read: 154.29 Subd. 54. [ELECTRIC GENERATION FACILITY PERSONAL 154.30 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 154.31 machinery and other personal property which is part of a 3.2 154.32 megawatt run-of-the-river hydroelectric generation facility and 154.33 that meets the requirements of this subdivision is exempt. At 154.34 the time of construction, the facility must: 154.35 (1) utilize two turbine generators at a dam site existing 154.36 on March 31, 1994; 155.1 (2) be located on publicly owned land and within 2,500 feet 155.2 of a 13.8 kilovolt distribution circuit; and 155.3 (3) be eligible to receive a renewable energy production 155.4 incentive payment under section 216C.41. 155.5 Construction of the facility must be commenced after 155.6 January 1, 2002, and before January 1, 2004. Property eligible 155.7 for this exemption does not include electric transmission lines 155.8 and interconnections or gas pipelines and interconnections 155.9 appurtenant to the property or the facility. 155.10[EFFECTIVE DATE.] This section is effective for the 2002 155.11 assessment and thereafter. 155.12 Sec. 12. Minnesota Statutes 2001 Supplement, section 155.13 272.028, is amended to read: 155.14 272.028 [PAYMENT IN LIEU OF PERSONAL PROPERTY TAX; WIND 155.15 GENERATION FACILITIES.] 155.16 A developer of a new or existing medium or large scale wind 155.17 energy conversion system, as defined under section272.02,155.18subdivision 22, paragraphs (b) and (c),272.029, subdivision 2, 155.19 may negotiate with thecity or town and thecounty where the 155.20 wind energy conversion system is located to establish a payment 155.21 in lieu of tax on personal property used to generate electric 155.22 power. The in lieu payment is to provide fees or compensation 155.23 to the host jurisdictions to maintain public infrastructure and 155.24 services. A host jurisdiction includes a city or town and the 155.25 county in which a facility is located. The payment in lieu of 155.26 personal property tax may be based on production capacity, 155.27 historical production, or other factors agreed upon by the 155.28 parties. The payment in lieu of tax agreement must be signed by 155.29 the parties and filed with the commissioner of revenue and the 155.30 county recorder. Upon execution and filing of the agreement, 155.31 the personal property to which the in lieu payment applies shall 155.32 be deemed exempt from tax under section 272.02, subdivision 22,155.33paragraphs (b) and (c). This exemption shall be effective for 155.34 the assessment year in which the in lieu payment is agreed upon 155.35 and shall remain exempt for the same duration as the in lieu 155.36 payments are in effect. 156.1 Sec. 13. [272.029] [WIND ENERGY PRODUCTION TAX.] 156.2 Subdivision 1. [PRODUCTION TAX.] A tax is imposed on the 156.3 production of electricity from a wind energy conversion system 156.4 installed after January 1, 1991, and that is used as an electric 156.5 power source. 156.6 Subd. 2. [DEFINITIONS.] (a) For the purposes of this 156.7 section, the term: 156.8 (1) "wind energy conversion system" has the meaning given 156.9 that term in section 216C.06, subdivision 12; 156.10 (2) "large scale wind energy conversion system" means a 156.11 wind energy conversion system of more than 12 megawatts, as 156.12 measured by the nameplate capacity of the system or as combined 156.13 with other systems as provided in paragraph (b); 156.14 (3) "medium scale wind energy conversion system" means a 156.15 wind energy conversion system of over 2 and not more than 12 156.16 megawatts, as measured by the nameplate capacity of the system 156.17 or as combined with other systems as provided in paragraph (b); 156.18 (4) "small scale wind energy conversion system" means a 156.19 wind energy conversion system of 2 megawatts and under, as 156.20 measured by the nameplate capacity of the system or as combined 156.21 with other systems as provided in paragraph (b). 156.22 (b) For systems installed or contracted for after January 156.23 1, 2002, the total size of a wind energy conversion system under 156.24 this subdivision shall be determined according to this paragraph. 156.25 Unless the systems are interconnected with different 156.26 distribution systems, the nameplate capacity of one wind energy 156.27 conversion system shall be combined with the nameplate capacity 156.28 of any other wind energy conversion system that is: 156.29 (1) located within five miles of the wind energy conversion 156.30 system; 156.31 (2) constructed within the same calendar year as the wind 156.32 energy conversion system; and 156.33 (3) under common ownership. 156.34 In the case of a dispute, the commissioner of commerce 156.35 shall determine the total size of the system, and shall draw all 156.36 reasonable inferences in favor of combining the systems. 157.1 (c) In making a determination under paragraph (b), the 157.2 commissioner of commerce may determine that two wind energy 157.3 conversion systems are under common ownership when the 157.4 underlying ownership structure contains similar persons or 157.5 entities, even if the ownership shares differ between the two 157.6 systems. Wind energy conversion systems are not under common 157.7 ownership solely because the same person or entity provided 157.8 equity financing for the systems. 157.9 Subd. 3. [RATE OF TAX.] The owner of a wind energy 157.10 conversion system shall pay a tax based on the following 157.11 schedule: 157.12 (1) for a large scale wind energy conversion system, .12 157.13 cents per kilowatt-hour of electricity produced by the system; 157.14 and 157.15 (2) for a medium scale wind energy conversion system, .036 157.16 cents per kilowatt-hour of electricity produced by the system; 157.17 and 157.18 (3) for a small scale wind energy conversion system of 2 157.19 megawatts or less, but greater than .25 megawatts capacity, .012 157.20 cents per kilowatt-hour of electricity produced by the system; 157.21 and 157.22 (4) small scale wind energy conversion systems with the 157.23 capacity of .25 megawatts or less, and small scale wind energy 157.24 conversion systems with a capacity of less than two megawatts 157.25 that are owned by a political subdivision, are exempt from the 157.26 wind energy production tax. 157.27 Subd. 4. [REPORTS.] An owner of a wind energy conversion 157.28 system subject to tax under subdivision 3 shall file a report 157.29 with the commissioner of revenue annually on or before March 1 157.30 detailing the amount of electricity in kilowatt-hours that was 157.31 produced by the wind energy conversion system for the previous 157.32 calendar year. The commissioner shall prescribe the form of the 157.33 report. The report must contain the information required by the 157.34 commissioner to determine the tax due to each county under this 157.35 subdivision for the current year. If an owner of a wind energy 157.36 conversion system subject to taxation under subdivision 3 fails 158.1 to file the report by the due date, the commissioner of revenue 158.2 shall determine the tax based upon the nameplate capacity of the 158.3 system multiplied by a capacity factor of 40 percent. 158.4 On or before March 31, the commissioner of revenue shall 158.5 notify the owner of the wind energy conversion systems of the 158.6 tax due to each county for the current year and shall certify to 158.7 the county auditor of each county in which the systems are 158.8 located the tax due from each owner for the current year. 158.9 Subd. 5. [PAYMENT OF TAX; COLLECTION.] The amount of 158.10 production tax determined under subdivision 4 must be paid to 158.11 the county treasurer at the time and in the manner provided for 158.12 payment of property taxes under section 277.01, subdivision 3, 158.13 and, if unpaid, are subject to the same enforcement, collection, 158.14 and interest and penalties as delinquent personal property 158.15 taxes. Except to the extent inconsistent with this section, the 158.16 provisions of section 277.01 to 277.24 and 278.01 to 278.13 158.17 apply to the taxes imposed under this section, and for purposes 158.18 of those provisions the taxes imposed under this section are 158.19 considered personal property taxes. 158.20 Subd. 6. [DISTRIBUTION OF REVENUES.] Revenues from the 158.21 taxes imposed under subdivision 5 must be part of the settlement 158.22 between the county treasurer and the county auditor under 158.23 section 276.09. The revenue must be distributed by the county 158.24 auditor and the county treasurer to all taxing jurisdictions in 158.25 which the wind energy conversion system is located, in the same 158.26 proportion that each of the taxing jurisdiction's current year's 158.27 net tax capacity based tax rate is to the current year's total 158.28 net tax capacity based rate. 158.29 Subd. 7. [ALTERNATIVE PAYMENT FOR CURRENT 158.30 FACILITIES.] Prior to December 31, 2002, facilities installed or 158.31 contracted for before January 1, 2002, may negotiate a payment 158.32 in lieu of wind energy production tax pursuant to section 158.33 272.028. Any wind energy conversion systems installed or 158.34 contracted for between January 1, 1991, and January 1, 2002, for 158.35 which an agreement is executed pursuant to section 272.028 is 158.36 exempt from the wind energy production tax established in this 159.1 section. 159.2[EFFECTIVE DATE.] This section is effective for all energy 159.3 produced by wind energy conversion systems as of January 1, 2003. 159.4 Sec. 14. Minnesota Statutes 2000, section 273.11, 159.5 subdivision 16, is amended to read: 159.6 Subd. 16. [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 159.7 Improvements to homestead property made before January 2, 159.820032013, shall be fully or partially excluded from the value 159.9 of the property for assessment purposes provided that (1) the 159.10 house is at least 45 years old at the time of the improvement 159.11 and (2) the assessor's estimated market value of the house on 159.12 January 2 of the current year is equal to or less than $400,000. 159.13 For purposes of determining this eligibility, "house" means 159.14 land and buildings. 159.15 The age of a residence is the number of years since the 159.16 original year of its construction. In the case of a residence 159.17 that is relocated, the relocation must be from a location within 159.18 the state and the only improvements eligible for exclusion under 159.19 this subdivision are (1) those for which building permits were 159.20 issued to the homeowner after the residence was relocated to its 159.21 present site, and (2) those undertaken during or after the year 159.22 the residence is initially occupied by the homeowner, excluding 159.23 any market value increase relating to basic improvements that 159.24 are necessary to install the residence on its foundation and 159.25 connect it to utilities at its present site. In the case of an 159.26 owner-occupied duplex or triplex, the improvement is eligible 159.27 regardless of which portion of the property was improved. 159.28 If the property lies in a jurisdiction which is subject to 159.29 a building permit process, a building permit must have been 159.30 issued prior to commencement of the improvement. The 159.31 improvements for a single project or in any one year must add at 159.32 least $5,000 to the value of the property to be eligible for 159.33 exclusion under this subdivision. Only improvements to the 159.34 structure which is the residence of the qualifying homesteader 159.35 or construction of or improvements to no more than one two-car 159.36 garage per residence qualify for the provisions of this 160.1 subdivision. If an improvement was begun between January 2, 160.2 1992, and January 2, 1993, any value added from that improvement 160.3 for the January 1994 and subsequent assessments shall qualify 160.4 for exclusion under this subdivision provided that a building 160.5 permit was obtained for the improvement between January 2, 1992, 160.6 and January 2, 1993. Whenever a building permit is issued for 160.7 property currently classified as homestead, the issuing 160.8 jurisdiction shall notify the property owner of the possibility 160.9 of valuation exclusion under this subdivision. The assessor 160.10 shall require an application, including documentation of the age 160.11 of the house from the owner, if unknown by the assessor. The 160.12 application may be filed subsequent to the date of the building 160.13 permit provided that the application must be filed within three 160.14 years of the date the building permit was issued for the 160.15 improvement. If the property lies in a jurisdiction which is 160.16 not subject to a building permit process, the application must 160.17 be filed within three years of the date the improvement was 160.18 made. The assessor may require proof from the taxpayer of the 160.19 date the improvement was made. Applications must be received 160.20 prior to July 1 of any year in order to be effective for taxes 160.21 payable in the following year. 160.22 No exclusion for an improvement may be granted by a local 160.23 board of review or county board of equalization, and no 160.24 abatement of the taxes for qualifying improvements may be 160.25 granted by the county board unless (1) a building permit was 160.26 issued prior to the commencement of the improvement if the 160.27 jurisdiction requires a building permit, and (2) an application 160.28 was completed. 160.29 The assessor shall note the qualifying value of each 160.30 improvement on the property's record, and the sum of those 160.31 amounts shall be subtracted from the value of the property in 160.32 each year for ten years after the improvement has been made. 160.33 After ten years the amount of the qualifying value shall be 160.34 added back as follows: 160.35 (1) 50 percent in the two subsequent assessment years if 160.36 the qualifying value is equal to or less than $10,000 market 161.1 value; or 161.2 (2) 20 percent in the five subsequent assessment years if 161.3 the qualifying value is greater than $10,000 market value. 161.4 If an application is filed after the first assessment date at 161.5 which an improvement could have been subject to the valuation 161.6 exclusion under this subdivision, the ten-year period during 161.7 which the value is subject to exclusion is reduced by the number 161.8 of years that have elapsed since the property would have 161.9 qualified initially. The valuation exclusion shall terminate 161.10 whenever (1) the property is sold, or (2) the property is 161.11 reclassified to a class which does not qualify for treatment 161.12 under this subdivision. Improvements made by an occupant who is 161.13 the purchaser of the property under a conditional purchase 161.14 contract do not qualify under this subdivision unless the seller 161.15 of the property is a governmental entity. The qualifying value 161.16 of the property shall be computed based upon the increase from 161.17 that structure's market value as of January 2 preceding the 161.18 acquisition of the property by the governmental entity. 161.19 The total qualifying value for a homestead may not exceed 161.20 $50,000. The total qualifying value for a homestead with a 161.21 house that is less than 70 years old may not exceed $25,000. 161.22 The term "qualifying value" means the increase in estimated 161.23 market value resulting from the improvement if the improvement 161.24 occurs when the house is at least 70 years old, or one-half of 161.25 the increase in estimated market value resulting from the 161.26 improvement otherwise. The $25,000 and $50,000 maximum 161.27 qualifying value under this subdivision may result from multiple 161.28 improvements to the homestead. 161.29 If 50 percent or more of the square footage of a structure 161.30 is voluntarily razed or removed, the valuation increase 161.31 attributable to any subsequent improvements to the remaining 161.32 structure does not qualify for the exclusion under this 161.33 subdivision. If a structure is unintentionally or accidentally 161.34 destroyed by a natural disaster, the property is eligible for an 161.35 exclusion under this subdivision provided that the structure was 161.36 not completely destroyed. The qualifying value on property 162.1 destroyed by a natural disaster shall be computed based upon the 162.2 increase from that structure's market value as determined on 162.3 January 2 of the year in which the disaster occurred. A 162.4 property receiving benefits under the homestead disaster 162.5 provisions under section 273.123 is not disqualified from 162.6 receiving an exclusion under this subdivision. If any 162.7 combination of improvements made to a structure after January 1, 162.8 1993, increases the size of the structure by 100 percent or 162.9 more, the valuation increase attributable to the portion of the 162.10 improvement that causes the structure's size to exceed 100 162.11 percent does not qualify for exclusion under this subdivision. 162.12 Sec. 15. Minnesota Statutes 2000, section 273.11, is 162.13 amended by adding a subdivision to read: 162.14 Subd. 20. [VALUATION OF CLASS 4D CERTIFIED PROPERTY.] In 162.15 determining the market value of class 4d rental property 162.16 certified under section 462A.071, the assessor shall reduce the 162.17 value of the property by its restricted use value. "Restricted 162.18 use value" is the amount of market value reduction that results 162.19 from the restrictions on uses that qualify the property for 162.20 certification as class 4d under section 273.13, subdivision 25, 162.21 paragraph (e). The assessor shall determine the restricted use 162.22 value of the property using guidelines set by the commissioner 162.23 of revenue. 162.24[EFFECTIVE DATE.] This section is effective for taxes 162.25 levied in 2003, payable in 2004, and thereafter. 162.26 Sec. 16. Minnesota Statutes 2001 Supplement, section 162.27 273.124, subdivision 11, is amended to read: 162.28 Subd. 11. [LIMITATION ON HOMESTEAD REDUCTIONS.] If the 162.29 assessor has classified a property as both homestead and 162.30 nonhomestead, the greater of (1) the value attributable to the 162.31 portion of the property classified as class 1 or class 2a; or 162.32 (2) $76,000, is entitled to assessment as a homestead under 162.33 section 273.13, subdivision 22 or 23. The limitation in this 162.34 subdivision does not apply to buildings containing fewer than 162.35 four residential units or to a single rented or leased dwelling 162.36 unit located within or attached to a private garage or similar 163.1 structure owned by the owner of a homestead and located on the 163.2 premises of that homestead. Treatment of property under this 163.3 paragraph terminates when (1) the property is sold or (2) the 163.4 property is no longer used for homestead purposes by the person 163.5 homesteading it for taxes payable in 2001. 163.6 If the assessor has classified a property as both homestead 163.7 and nonhomestead, the reductions in tax provided under sections 163.8 273.135 and 273.1391 apply to the value of both the homestead 163.9 and the nonhomestead portions of the property. 163.10[EFFECTIVE DATE.] This section is effective for taxes 163.11 levied in 2002, payable in 2003, and thereafter. 163.12 Sec. 17. Minnesota Statutes 2001 Supplement, section 163.13 273.13, subdivision 22, is amended to read: 163.14 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 163.15 23 and in paragraphs (b) and (c), real estate which is 163.16 residential and used for homestead purposes is class 1a. The 163.17 market value of class 1a property must be determined based upon 163.18 the value of the house, garage, and land. 163.19 The first $500,000 of market value of class 1a property has 163.20 a net class rate of one percent of its market value; and the 163.21 market value of class 1a property that exceeds $500,000 has a 163.22 class rate of 1.25 percent of its market value. 163.23 (b) Class 1b property includes homestead real estate or 163.24 homestead manufactured homes used for the purposes of a 163.25 homestead by 163.26 (1) any blind person, or the blind person and the blind 163.27 person's spouse; or 163.28 (2) any person, hereinafter referred to as "veteran," who: 163.29 (i) served in the active military or naval service of the 163.30 United States; and 163.31 (ii) is entitled to compensation under the laws and 163.32 regulations of the United States for permanent and total 163.33 service-connected disability due to the loss, or loss of use, by 163.34 reason of amputation, ankylosis, progressive muscular 163.35 dystrophies, or paralysis, of both lower extremities, such as to 163.36 preclude motion without the aid of braces, crutches, canes, or a 164.1 wheelchair; and 164.2 (iii) has acquired a special housing unit with special 164.3 fixtures or movable facilities made necessary by the nature of 164.4 the veteran's disability, or the surviving spouse of the 164.5 deceased veteran for as long as the surviving spouse retains the 164.6 special housing unit as a homestead; or 164.7 (3) any person who: 164.8 (i) is permanently and totally disabled and 164.9 (ii) receives 90 percent or more of total household income, 164.10 as defined in section 290A.03, subdivision 5, from 164.11 (A) aid from any state as a result of that disability; or 164.12 (B) supplemental security income for the disabled; or 164.13 (C) workers' compensation based on a finding of total and 164.14 permanent disability; or 164.15 (D) social security disability, including the amount of a 164.16 disability insurance benefit which is converted to an old age 164.17 insurance benefit and any subsequent cost of living increases; 164.18 or 164.19 (E) aid under the federal Railroad Retirement Act of 1937, 164.20 United States Code Annotated, title 45, section 228b(a)5; or 164.21 (F) a pension from any local government retirement fund 164.22 located in the state of Minnesota as a result of that 164.23 disability; or 164.24 (G) pension, annuity, or other income paid as a result of 164.25 that disability from a private pension or disability plan, 164.26 including employer, employee, union, and insurance plans and 164.27 (iii) has household income as defined in section 290A.03, 164.28 subdivision 5, of $50,000 or less; or 164.29 (4) any person who is permanently and totally disabled and 164.30 whose household income as defined in section 290A.03, 164.31 subdivision 5, is 275 percent or less of the federal poverty 164.32 level. 164.33 Property is classified and assessed under clause (4) only 164.34 if the government agency or income-providing source certifies, 164.35 upon the request of the homestead occupant, that the homestead 164.36 occupant satisfies the disability requirements of this paragraph. 165.1 Property is classified and assessed pursuant to clause (1) 165.2 only if the commissioner of economic security certifies to the 165.3 assessor that the homestead occupant satisfies the requirements 165.4 of this paragraph. 165.5 Permanently and totally disabled for the purpose of this 165.6 subdivision means a condition which is permanent in nature and 165.7 totally incapacitates the person from working at an occupation 165.8 which brings the person an income. The first $32,000 market 165.9 value of class 1b property has a net class rate of .45 percent 165.10 of its market value. The remaining market value of class 1b 165.11 property has a class rate using the rates for class 1a or class 165.12 2a property, whichever is appropriate, of similar market value. 165.13 (c) Class 1c property is commercial use real property that 165.14 abuts a lakeshore line and is devoted to temporary and seasonal 165.15 residential occupancy for recreational purposes but not devoted 165.16 to commercial purposes for more than 250 days in the year 165.17 preceding the year of assessment, and that includes a portion 165.18 used as a homestead by the owner, which includes a dwelling 165.19 occupied as a homestead by a shareholder of a corporation that 165.20 owns the resort or a partner in a partnership that owns the 165.21 resort, even if the title to the homestead is held by the 165.22 corporation or partnership. For purposes of this clause, 165.23 property is devoted to a commercial purpose on a specific day if 165.24 any portion of the property, excluding the portion used 165.25 exclusively as a homestead, is used for residential occupancy 165.26 and a fee is charged for residential occupancy. The first 165.27 $500,000 of market value of class 1c property has a class rate 165.28 of one percent, and the remaining market value of class 1c 165.29 property has a class rate of one percent, with the following 165.30 limitation: the area of the property must not exceed 100 feet 165.31 of lakeshore footage for each cabin or campsite located on the 165.32 property up to a total of 800 feet and 500 feet in depth, 165.33 measured away from the lakeshore. If any portion of the class 165.34 1c resort property is classified as class 4c under subdivision 165.35 25, the entire property must meet the requirements of 165.36 subdivision 25, paragraph (d), clause (1), to qualify for class 166.1 1c treatment under this paragraph. 166.2 (d) Class 1d property includes structures that meet all of 166.3 the following criteria: 166.4 (1) the structure is located on property that is classified 166.5 as agricultural property under section 273.13, subdivision 23; 166.6 (2) the structure is occupied exclusively by seasonal farm 166.7 workers during the time when they work on that farm, and the 166.8 occupants are not charged rent for the privilege of occupying 166.9 the property, provided that use of the structure for storage of 166.10 farm equipment and produce does not disqualify the property from 166.11 classification under this paragraph; 166.12 (3) the structure meets all applicable health and safety 166.13 requirements for the appropriate season; and 166.14 (4) the structure is not salable as residential property 166.15 because it does not comply with local ordinances relating to 166.16 location in relation to streets or roads. 166.17 The market value of class 1d property has the same class 166.18 rates as class 1a property under paragraph (a). 166.19 (e) Class 1e includes property used as a bed and breakfast 166.20 lodging facility. As used in this subdivision, a "bed and 166.21 breakfast lodging facility" means property that: 166.22 (1) provides rooms for rent to guests who are staying for a 166.23 continuous period of less than 30 days; 166.24 (2) is located on the same parcel as the homestead of the 166.25 owner or a parcel contiguous to the parcel on which the 166.26 homestead of the owner is located; 166.27 (3) does not include a facility at which meals are 166.28 regularly provided to the public, other than meals served to 166.29 persons who rent rooms, or meals provided at special events 166.30 which must be conducted at no more than 12 times each year; and 166.31 (4) is zoned as residential property. 166.32 The market value of class 1e property has the same class 166.33 rates as class 1a property under paragraph (a). 166.34[EFFECTIVE DATE.] This section is effective for taxes 166.35 payable in 2003 and thereafter. 166.36 Sec. 18. Minnesota Statutes 2001 Supplement, section 167.1 273.1384, subdivision 2, is amended to read: 167.2 Subd. 2. [AGRICULTURAL HOMESTEAD MARKET VALUE CREDIT.] 167.3 Property classified as class 2a agricultural homestead is 167.4 eligible for an agricultural credit. The credit is equal to0.2167.5 0.3 percent of the first $115,000 of the property's market 167.6 value. The credit under this subdivision is limited 167.7 to$230$345 for each homestead. 167.8[EFFECTIVE DATE.] This section is effective for taxes 167.9 payable in 2003 and thereafter. 167.10 Sec. 19. Minnesota Statutes 2000, section 273.1398, 167.11 subdivision 3, is amended to read: 167.12 Subd. 3. [DISPARITY REDUCTION AID.] For taxes payable 167.13 in19952003, and subsequent years, the amount of disparity aid 167.14 certified for each taxing district within each unique taxing 167.15 jurisdictionfor taxes payable in the prior year shall be167.16multiplied by the ratio of (1) the jurisdiction's tax capacity167.17using the class rates for taxes payable in the year for which167.18aid is being computed, to (2) its tax capacity using the class167.19rates for taxes payable in the year prior to that for which aid167.20is being computed, both based upon market values for taxes167.21payable in the year prior to that for which aid is being167.22computed. For the purposes of this aid determination, disparity167.23reduction aid certified for taxes payable in the prior year for167.24a taxing entity other than a town or school district is deemed167.25to be county government disparity reduction aid. For taxes167.26payable in 1992 and subsequent years,shall equal 87 percent of 167.27 its disparity reduction aid for taxes payable in 2001. The 167.28 amount of disparity aid certified to each taxing jurisdiction 167.29 shall be reduced by any reductions required in the current year 167.30 or permanent reductions required in previous years under section 167.31 477A.0132. 167.32 Sec. 20. Minnesota Statutes 2001 Supplement, section 167.33 275.025, subdivision 2, is amended to read: 167.34 Subd. 2. [COMMERCIAL-INDUSTRIAL TAX CAPACITY.] For the 167.35 purposes of this section, "commercial-industrial tax capacity" 167.36 means the tax capacity of all taxable property classified as 168.1 class 3 or class 5(1) under section 273.13, except for 25 168.2 percent of the value of electric generation attached machinery 168.3 under class 3 and all property described in section 473.625. 168.4 County commercial-industrial tax capacity amounts are not 168.5 adjusted for the captured net tax capacity of a tax increment 168.6 financing district under section 469.177, subdivision 2, the net 168.7 tax capacity of transmission lines deducted from a local 168.8 government's total net tax capacity under section 273.425, or 168.9 fiscal disparities contribution and distribution net tax 168.10 capacities under chapter 276A or 473F. 168.11[EFFECTIVE DATE.] This section is effective for taxes 168.12 payable in 2003 and thereafter. 168.13 Sec. 21. Minnesota Statutes 2001 Supplement, section 168.14 275.065, subdivision 3, is amended to read: 168.15 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 168.16 county auditor shall prepare and the county treasurer shall 168.17 deliver after November 10 and on or before November 24 each 168.18 year, by first class mail to each taxpayer at the address listed 168.19 on the county's current year's assessment roll, a notice of 168.20 proposed property taxes. 168.21 (b) The commissioner of revenue shall prescribe the form of 168.22 the notice. 168.23 (c) The notice must inform taxpayers that it contains the 168.24 amount of property taxes each taxing authority proposes to 168.25 collect for taxes payable the following year. In the case of a 168.26 town, or in the case of the state determined portion of the 168.27 school district levy, the final tax amount will be its proposed 168.28 tax. In the case of taxing authorities required to hold a 168.29 public meeting under subdivision 6, the notice must clearly 168.30 state that each taxing authority, including regional library 168.31 districts established under section 134.201, and including the 168.32 metropolitan taxing districts as defined in paragraph (i), but 168.33 excluding all other special taxing districts and towns, will 168.34 hold a public meeting to receive public testimony on the 168.35 proposed budget and proposed or final property tax levy, or, in 168.36 case of a school district, on the current budget and proposed 169.1 property tax levy. It must clearly state the time and place of 169.2 each taxing authority's meeting, a telephone number for the 169.3 taxing authority that taxpayers may call if they have questions 169.4 related to the notice, and an address where comments will be 169.5 received by mail. 169.6 (d) The notice must state for each parcel: 169.7 (1) the market value of the property as determined under 169.8 section 273.11, and used for computing property taxes payable in 169.9 the following year and for taxes payable in the current year as 169.10 each appears in the records of the county assessor on November 1 169.11 of the current year; and, in the case of residential property, 169.12 whether the property is classified as homestead or 169.13 nonhomestead. The notice must clearly inform taxpayers of the 169.14 years to which the market values apply and that the values are 169.15 final values; 169.16 (2) the items listed below, shown separately by county, 169.17 city or town, state determined school tax net of the education 169.18 homestead credit under section 273.1382, voter approved school 169.19 levy, other local school levy, and the sum of the special taxing 169.20 districts, and as a total of all taxing authorities: 169.21 (i) the actual tax for taxes payable in the current year; 169.22 (ii) the tax change due to spending factors, defined as the 169.23 proposed tax minus the constant spending tax amount; 169.24 (iii) the tax change due to other factors, defined as the 169.25 constant spending tax amount minus the actual current year tax; 169.26 and 169.27 (iv) the proposed tax amount. 169.28 In the case of a town or the state determined school tax, 169.29 the final tax shall also be its proposed tax unless the town 169.30 changes its levy at a special town meeting under section 169.31 365.52. If a school district has certified under section 169.32 126C.17, subdivision 9, that a referendum will be held in the 169.33 school district at the November general election, the county 169.34 auditor must note next to the school district's proposed amount 169.35 that a referendum is pending and that, if approved by the 169.36 voters, the tax amount may be higher than shown on the notice. 170.1 In the case of the city of Minneapolis, the levy for the 170.2 Minneapolis library board and the levy for Minneapolis park and 170.3 recreation shall be listed separately from the remaining amount 170.4 of the city's levy. In the case of the city of St. Paul, the 170.5 levy for the St. Paul library agency shall be listed separately 170.6 from the remaining amount of the city's levy. In the case of a 170.7 parcel where tax increment or the fiscal disparities areawide 170.8 tax under chapter 276A or 473F applies, the proposed tax levy on 170.9 the captured value or the proposed tax levy on the tax capacity 170.10 subject to the areawide tax must each be stated separately and 170.11 not included in the sum of the special taxing districts; and 170.12 (3) the increase or decrease between the total taxes 170.13 payable in the current year and the total proposed taxes, 170.14 expressed as a percentage. 170.15 For purposes of this section, the amount of the tax on 170.16 homesteads qualifying under the senior citizens' property tax 170.17 deferral program under chapter 290B is the total amount of 170.18 property tax before subtraction of the deferred property tax 170.19 amount. 170.20 (e) The notice must clearly state that the proposed or 170.21 final taxes do not include the following: 170.22 (1) special assessments; 170.23 (2) levies approved by the voters after the date the 170.24 proposed taxes are certified, including bond referenda, school 170.25 district levy referenda, and levy limit increase referenda; 170.26 (3) amounts necessary to pay cleanup or other costs due to 170.27 a natural disaster occurring after the date the proposed taxes 170.28 are certified; 170.29 (4) amounts necessary to pay tort judgments against the 170.30 taxing authority that become final after the date the proposed 170.31 taxes are certified; and 170.32 (5) the contamination tax imposed on properties which 170.33 received market value reductions for contamination. 170.34 (f) Except as provided in subdivision 7, failure of the 170.35 county auditor to prepare or the county treasurer to deliver the 170.36 notice as required in this section does not invalidate the 171.1 proposed or final tax levy or the taxes payable pursuant to the 171.2 tax levy. 171.3 (g) If the notice the taxpayer receives under this section 171.4 lists the property as nonhomestead, and satisfactory 171.5 documentation is provided to the county assessor by the 171.6 applicable deadline, and the property qualifies for the 171.7 homestead classification in that assessment year, the assessor 171.8 shall reclassify the property to homestead for taxes payable in 171.9 the following year. 171.10 (h) In the case of class 4 residential property used as a 171.11 residence for lease or rental periods of 30 days or more, the 171.12 taxpayer must either: 171.13 (1) mail or deliver a copy of the notice of proposed 171.14 property taxes to each tenant, renter, or lessee; or 171.15 (2) post a copy of the notice in a conspicuous place on the 171.16 premises of the property. 171.17 The notice must be mailed or posted by the taxpayer by 171.18 November 27 or within three days of receipt of the notice, 171.19 whichever is later. A taxpayer may notify the county treasurer 171.20 of the address of the taxpayer, agent, caretaker, or manager of 171.21 the premises to which the notice must be mailed in order to 171.22 fulfill the requirements of this paragraph. 171.23 (i) For purposes of this subdivision, subdivisions 5a and 171.24 6, "metropolitan special taxing districts" means the following 171.25 taxing districts in the seven-county metropolitan area that levy 171.26 a property tax for any of the specified purposes listed below: 171.27 (1) metropolitan council under section 473.132, 473.167, 171.28 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 171.29 (2) metropolitan airports commission under section 473.667, 171.30 473.671, or 473.672; and 171.31 (3) metropolitan mosquito control commission under section 171.32 473.711. 171.33 For purposes of this section, any levies made by the 171.34 regional rail authorities in the county of Anoka, Carver, 171.35 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 171.36 398A shall be included with the appropriate county's levy and 172.1 shall be discussed at that county's public hearing. 172.2 (j) If a statutory or home rule charter city or a town has 172.3 exercised the local levy option provided by section 473.388, 172.4 subdivision 7, it may include in the notice of its proposed 172.5 taxes the amount of its proposed taxes attributable to its 172.6 exercise of the option. In the first year of the city or town's 172.7 exercise of this option, the statement shall include an estimate 172.8 of the reduction of the metropolitan council's tax on the parcel 172.9 due to exercise of that option. The metropolitan council's levy 172.10 shall be adjusted accordingly. 172.11 Sec. 22. Minnesota Statutes 2000, section 275.08, 172.12 subdivision 1d, is amended to read: 172.13 Subd. 1d. [ADDITIONAL ADJUSTMENT.] If, after computing 172.14 each local government's adjusted local tax rate within a unique 172.15 taxing jurisdiction pursuant to subdivision 1c, the auditor 172.16 finds that the total adjusted local tax rate of all local 172.17 governments combined is less than90 percent of gross tax172.18capacity for taxes payable in 1989 and 9050 percent of net tax 172.19 capacity for taxes payable in19902003 and thereafter, the 172.20 auditor shall increase each local government's adjusted local 172.21 tax rate proportionately so the total adjusted local tax rate of 172.22 all local governments combined equals9050 percent. The total 172.23 amount of the increase in tax resulting from the increased local 172.24 tax rates must not exceed the amount of disparity aid allocated 172.25 to the unique taxing district under section 273.1398. The 172.26 auditor shall certify to the department of revenue the 172.27 difference between the disparity aid originally allocated under 172.28 section 273.1398, subdivision 3, and the amount necessary to 172.29 reduce the total adjusted local tax rate of all local 172.30 governments combined to9050 percent. Each local government's 172.31 disparity reduction aid payment under section 273.1398, 172.32 subdivision 6, must be reduced accordingly. 172.33 Sec. 23. Minnesota Statutes 2001 Supplement, section 172.34 275.70, subdivision 5, is amended to read: 172.35 Subd. 5. [SPECIAL LEVIES.] "Special levies" means those 172.36 portions of ad valorem taxes levied by a local governmental unit 173.1 for the following purposes or in the following manner: 173.2 (1) to pay the costs of the principal and interest on 173.3 bonded indebtedness or to reimburse for the amount of liquor 173.4 store revenues used to pay the principal and interest due on 173.5 municipal liquor store bonds in the year preceding the year for 173.6 which the levy limit is calculated; 173.7 (2) to pay the costs of principal and interest on 173.8 certificates of indebtedness issued for any corporate purpose 173.9 except for the following: 173.10 (i) tax anticipation or aid anticipation certificates of 173.11 indebtedness; 173.12 (ii) certificates of indebtedness issued under sections 173.13 298.28 and 298.282; 173.14 (iii) certificates of indebtedness used to fund current 173.15 expenses or to pay the costs of extraordinary expenditures that 173.16 result from a public emergency; or 173.17 (iv) certificates of indebtedness used to fund an 173.18 insufficiency in tax receipts or an insufficiency in other 173.19 revenue sources; 173.20 (3) to provide for the bonded indebtedness portion of 173.21 payments made to another political subdivision of the state of 173.22 Minnesota; 173.23 (4) to fund payments made to the Minnesota state armory 173.24 building commission under section 193.145, subdivision 2, to 173.25 retire the principal and interest on armory construction bonds; 173.26 (5) property taxes approved by voters which are levied 173.27 against the referendum market value as provided under section 173.28 275.61; 173.29 (6) to fund matching requirements needed to qualify for 173.30 federal or state grants or programs to the extent that either 173.31 (i) the matching requirement exceeds the matching requirement in 173.32 calendar year 2001, or (ii) it is a new matching requirement 173.33 that didn't exist prior to 2002; 173.34 (7) to pay the expenses reasonably and necessarily incurred 173.35 in preparing for or repairing the effects of natural disaster 173.36 including the occurrence or threat of widespread or severe 174.1 damage, injury, or loss of life or property resulting from 174.2 natural causes, in accordance with standards formulated by the 174.3 emergency services division of the state department of public 174.4 safety, as allowed by the commissioner of revenue under section 174.5 275.74, paragraph (b); 174.6 (8) pay amounts required to correct an error in the levy 174.7 certified to the county auditor by a city or county in a levy 174.8 year, but only to the extent that when added to the preceding 174.9 year's levy it is not in excess of an applicable statutory, 174.10 special law or charter limitation, or the limitation imposed on 174.11 the governmental subdivision by sections 275.70 to 275.74 in the 174.12 preceding levy year; 174.13 (9) to pay an abatement under section 469.1815; 174.14 (10) to pay any costs attributable to increases in the 174.15 employer contribution rates under chapter 353 that are effective 174.16 after June 30, 2001; 174.17 (11) to pay the operating or maintenance costs of a county 174.18 jail as authorized in section 641.01 or 641.262, or of a 174.19 correctional facility as defined in section 241.021, subdivision 174.20 1, paragraph (5), to the extent that the county can demonstrate 174.21 to the commissioner of revenue that the amount has been included 174.22 in the county budget as a direct result of a rule, minimum 174.23 requirement, minimum standard, or directive of the department of 174.24 corrections, or to pay the operating or maintenance costs of a 174.25 regional jail as authorized in section 641.262. For purposes of 174.26 this clause, a district court order is not a rule, minimum 174.27 requirement, minimum standard, or directive of the department of 174.28 corrections. If the county utilizes this special levy, any 174.29 amount levied by the county in the previous levy year for the 174.30 purposes specified under this clause and included in the 174.31 county's previous year's levy limitation computed under section 174.32 275.71, shall be deducted from the levy limit base under section 174.33 275.71, subdivision 2, when determining the county's current 174.34 year levy limitation. The county shall provide the necessary 174.35 information to the commissioner of revenue for making this 174.36 determination; 175.1 (12) to pay for operation of a lake improvement district, 175.2 as authorized under section 103B.555. If the county utilizes 175.3 this special levy, any amount levied by the county in the 175.4 previous levy year for the purposes specified under this clause 175.5 and included in the county's previous year's levy limitation 175.6 computed under section 275.71 shall be deducted from the levy 175.7 limit base under section 275.71, subdivision 2, when determining 175.8 the county's current year levy limitation. The county shall 175.9 provide the necessary information to the commissioner of revenue 175.10 for making this determination; 175.11 (13) to repay a state or federal loan used to fund the 175.12 direct or indirect required spending by the local government due 175.13 to a state or federal transportation project or other state or 175.14 federal capital project. This authority may only be used if the 175.15 project is not a local government initiative; 175.16 (14) for counties only, to pay the costs reasonably 175.17 expected to be incurred in 2002 related to the redistricting of 175.18 election districts and establishment of election precincts under 175.19 sections 204B.135 and 204B.14, the notice required by section 175.20 204B.14, subdivision 4, and the reassignment of voters in the 175.21 statewide registration system, not to exceed $1 per capita, 175.22 provided that the county shall distribute a portion of the 175.23 amount levied under this clause equal to 25 cents times the 175.24 population of the city to all cities in the county with a 175.25 population of 30,000 or more;and175.26 (15) to pay for court administration costs as required 175.27 under section 273.1398, subdivision 4b; however, for taxes 175.28 levied to pay for these costs in the year in which the court 175.29 financing is transferred to the state, the amount under this 175.30 section is limited to one-third of the aid reduction under 175.31 section 273.1398, subdivision 4a; and 175.32 (16) to pay amounts attributable to increases in the cost 175.33 of health insurance coverage purchased by the local government 175.34 unit for its employees, to the extent the amount reasonably 175.35 anticipated to be payable for that purpose in the year in which 175.36 the taxes are payable exceeds the amount paid for that purpose 176.1 in calendar year 2001. 176.2[EFFECTIVE DATE.] This section is effective for taxes 176.3 payable in 2003 only. 176.4 Sec. 24. Minnesota Statutes 2001 Supplement, section 176.5 275.71, subdivision 2, is amended to read: 176.6 Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a 176.7 local governmental unit for taxes levied in 2001 is equal to the 176.8 greater of: 176.9 (1) the sum of its adjusted levy limit base for taxes 176.10 levied in 1999 plus the amount it levied in 1999 under Minnesota 176.11 Statutes 1999 Supplement, section 275.70, subdivision 5, clauses 176.12 (8) and (13), multiplied by: 176.13 (i) one plus the percentage growth in the implicit price 176.14 deflator for the 12-month period ending March 30, 2000; 176.15 (ii) one plus a percentage equal to the annual percentage 176.16 increase in the estimated number of households, if any, for the 176.17 most recent 12-month period that was available on July 1, 2000; 176.18 and 176.19 (iii) one plus a percentage equal to 50 percent of the 176.20 percentage increase in the taxable market value of the 176.21 jurisdiction due to new construction of class 3 property, as 176.22 defined in section 273.13, subdivision 24, except for 176.23 state-assessed utility and railroad operating property, for the 176.24 most recent year for which data was available as of July 1, 176.25 2000; or 176.26 (2) an amount equal to: 176.27 (i) the sum of the amount it levied in 2000 plus the amount 176.28 of aids it was certified to receive in calendar year 2001 under 176.29 sections 273.1398, 298.282, 477A.011 to 477A.03, prior to any 176.30 aid reductions under section 273.1399, subdivision 5, 477A.06, 176.31 and 477A.065; less 176.32 (ii) the amount it levied in 2000 that would qualify as 176.33 special levies under section 275.70, subdivision 6, for taxes 176.34 levied in 2001. The local governmental unit shall provide the 176.35 commissioner of revenue with sufficient information to make this 176.36 calculation. 177.1 (b) If the governmental unit was not subject to levy limits 177.2 for taxes levied in 1999, its levy limit base for taxes levied 177.3 in 2001 is equal to the amount calculated under paragraph (a), 177.4 clause (2). 177.5 (c) The levy limit base for a local governmental unit for 177.6 taxes levied in 2002 is equal to its adjusted levy limit base in 177.7 the previous year, plus the amount of tree growth tax it 177.8 received in calendar year 2001 under sections 270.31 to 270.39, 177.9 and subject to any adjustments under section 275.72. 177.10[EFFECTIVE DATE.] This section is effective for taxes 177.11 payable in 2003 only. 177.12 Sec. 25. Minnesota Statutes 2001 Supplement, section 177.13 275.71, subdivision 4, is amended to read: 177.14 Subd. 4. [ADJUSTED LEVY LIMIT BASE.] (a) For taxes levied 177.15 in 2001 and 2002, the adjusted levy limit base is equal to the 177.16 levy limit base computed under subdivisions 2 and 3 or section 177.17 275.72, multiplied by: 177.18 (1) one plus a percentage equal to the percentage growth in 177.19 the implicit price deflator, provided that the increase under 177.20 this clause shall be no less than two percent; 177.21 (2) one plus a percentage equal to the percentage increase 177.22 in number of households, if any, for the most recent 12-month 177.23 period for which data is available; and 177.24 (3) one plus a percentage equal to 50 percent of the 177.25 percentage increase in the taxable market value of the 177.26 jurisdiction due to new construction of class 3 property, as 177.27 defined in section 273.13, subdivision 24, except for 177.28 state-assessed utility and railroad operating property, for the 177.29 most recent year for which data is available. 177.30 (b) For counties only, for taxes levied in 2001 and 2002, 177.31 the adjusted levy limit base is also reduced by any amount of 177.32 levy reduction required under section 275.07, subdivision 1, 177.33 paragraph (b), clause (ii). 177.34 Sec. 26. Minnesota Statutes 2001 Supplement, section 177.35 298.225, subdivision 1, is amended to read: 177.36 Subdivision 1. (a) The distribution of the taconite 178.1 production tax as provided in section 298.28, subdivisions 3 to 178.2 5, 6, paragraph (b), 7, and 8, shall equal the lesser of the 178.3 following amounts: 178.4 (1) the amount distributed pursuant to this section and 178.5 section 298.28, with respect to 1983 production if the 178.6 production for the year prior to the distribution year is no 178.7 less than 42,000,000 taxable tons. If the production is less 178.8 than 42,000,000 taxable tons, the amount of the distributions 178.9 shall be reduced proportionately at the rate of two percent for 178.10 each 1,000,000 tons, or part of 1,000,000 tons by which the 178.11 production is less than 42,000,000 tons; or 178.12 (2)(i) for the distributions made pursuant to section 178.13 298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 178.14 (c),40.531.2 percent of the amount distributed pursuant to 178.15 this section and section 298.28, with respect to 1983 178.16 production; 178.17 (ii) for the distributions made pursuant to section 298.28, 178.18 subdivision 5, paragraphs (b) and (d), 75 percent of the amount 178.19 distributed pursuant to this section and section 298.28, with 178.20 respect to 1983 production. 178.21 (b) The distribution of the taconite production tax as 178.22 provided in section 298.28, subdivision 2, shall equal the 178.23 following amount: 178.24 (1) if the production for the year prior to the 178.25 distribution year is at least 42,000,000 taxable tons, the 178.26 amount distributed pursuant to this section and section 298.28 178.27 with respect to 1999 production; or 178.28 (2) if the production for the year prior to the 178.29 distribution year is less than 42,000,000 taxable tons, the 178.30 amount distributed pursuant to this section and section 298.28 178.31 with respect to 1999 production, reduced proportionately at the 178.32 rate of two percent for each 1,000,000 tons or part of 1,000,000 178.33 tons by which the production is less than 42,000,000 tons. 178.34 Sec. 27. Minnesota Statutes 2000, section 298.27, is 178.35 amended to read: 178.36 298.27 [COLLECTION AND PAYMENT OF TAX.] 179.1 The taxes provided by section 298.24 shall be paid directly 179.2 to each eligible county and the iron range resources and 179.3 rehabilitation board. The commissioner of revenue shall notify 179.4 each producer of the amount to be paid each recipient prior to 179.5 February 15. Every person subject to taxes imposed by section 179.6 298.24 shall file a correct report covering the preceding year. 179.7 The report must contain the information required by the 179.8 commissioner. The report shall be filed on or before February 179.9 1. A remittance equal to 50 percent of the total tax required 179.10 to be paid hereunder in 2003 and 100 percent of the total tax 179.11 required to be paid hereunder in 2004 and thereafter shall be 179.12 paid on or before February 24. A remittance equal to the 179.13 remaining total tax required to be paid hereunder in 2003 shall 179.14 be paid on or before August 24. On or before February 25, and 179.15 in 2003, August 25, the county auditor shall make distribution 179.16 of thepaymentpayments previously received by the county in the 179.17 manner provided by section 298.28. Reports shall be made and 179.18 hearings held upon the determination of the tax in accordance 179.19 with procedures established by the commissioner of revenue. The 179.20 commissioner of revenue shall have authority to make reasonable 179.21 rules as to the form and manner of filing reports necessary for 179.22 the determination of the tax hereunder, and by such rules may 179.23 require the production of such information as may be reasonably 179.24 necessary or convenient for the determination and apportionment 179.25 of the tax. All the provisions of the occupation tax law with 179.26 reference to the assessment and determination of the occupation 179.27 tax, including all provisions for appeals from or review of the 179.28 orders of the commissioner of revenue relative thereto, but not 179.29 including provisions for refunds, are applicable to the taxes 179.30 imposed by section 298.24 except in so far as inconsistent 179.31 herewith. If any person subject to section 298.24 shall fail to 179.32 make the report provided for in this section at the time and in 179.33 the manner herein provided, the commissioner of revenue shall in 179.34 such case, upon information possessed or obtained, ascertain the 179.35 kind and amount of ore mined or produced and thereon find and 179.36 determine the amount of the tax due from such person. There 180.1 shall be added to the amount of tax due a penalty for failure to 180.2 report on or before February 1, which penalty shall equal ten 180.3 percent of the tax imposed and be treated as a part thereof. 180.4 If any person responsible for making a tax payment at the 180.5 time and in the manner herein provided fails to do so, there 180.6 shall be imposed a penalty equal to ten percent of the amount so 180.7 due, which penalty shall be treated as part of the tax due. 180.8 In the case of any underpayment of the tax payment required 180.9 herein, there may be added and be treated as part of the tax due 180.10 a penalty equal to ten percent of the amount so underpaid. 180.11 A person having a liability of $120,000 or more during a 180.12 calendar year must remit all liabilities by means of a funds 180.13 transfer as defined in section 336.4A-104, paragraph (a). The 180.14 funds transfer payment date, as defined in section 336.4A-401, 180.15 must be on or before the date the tax is due. If the date the 180.16 tax is due is not a funds transfer business day, as defined in 180.17 section 336.4A-105, paragraph (a), clause (4), the payment date 180.18 must be on or before the funds transfer business day next 180.19 following the date the tax is due. 180.20 Sec. 28. Minnesota Statutes 2001 Supplement, section 180.21 298.28, subdivision 4, is amended to read: 180.22 Subd. 4. [SCHOOL DISTRICTS.] (a)22.2817.15 cents per 180.23 taxable ton plus the increase provided in paragraph (d) must be 180.24 allocated to qualifying school districts to be distributed, 180.25 based upon the certification of the commissioner of revenue, 180.26 under paragraphs (b) and (c), except as otherwise provided in 180.27 paragraph (f). 180.28 (b)4.463.43 cents per taxable ton must be distributed to 180.29 the school districts in which the lands from which taconite was 180.30 mined or quarried were located or within which the concentrate 180.31 was produced. The distribution must be based on the 180.32 apportionment formula prescribed in subdivision 2. 180.33 (c)(i)17.8213.72 cents per taxable ton, less any amount 180.34 distributed under paragraph (e), shall be distributed to a group 180.35 of school districts comprised of those school districts in which 180.36 the taconite was mined or quarried or the concentrate produced 181.1 or in which there is a qualifying municipality as defined by 181.2 section 273.134, paragraph (b), in direct proportion to school 181.3 district indexes as follows: for each school district, its 181.4 pupil units determined under section 126C.05 for the prior 181.5 school year shall be multiplied by the ratio of the average 181.6 adjusted net tax capacity per pupil unit for school districts 181.7 receiving aid under this clause as calculated pursuant to 181.8 chapters 122A, 126C, and 127A for the school year ending prior 181.9 to distribution to the adjusted net tax capacity per pupil unit 181.10 of the district. Each district shall receive that portion of 181.11 the distribution which its index bears to the sum of the indices 181.12 for all school districts that receive the distributions. 181.13 (ii) Notwithstanding clause (i), each school district that 181.14 receives a distribution under sections 298.018; 298.23 to 181.15 298.28, exclusive of any amount received under this clause; 181.16 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 181.17 imposing a tax on severed mineral values that is less than the 181.18 amount of its levy reduction under section 126C.48, subdivision 181.19 8, for the second year prior to the year of the distribution 181.20 shall receive a distribution equal to the difference; the amount 181.21 necessary to make this payment shall be derived from 181.22 proportionate reductions in the initial distribution to other 181.23 school districts under clause (i). 181.24 (d) Any school district described in paragraph (c) where a 181.25 levy increase pursuant to section 126C.17, subdivision 9, was 181.26 authorized by referendum for taxes payable in 2001, shall 181.27 receive a distribution from a fund that receives a distribution 181.28 in 1998 of 21.3 cents per ton. On July 15 of 1999, and each 181.29 year thereafter, the increase over the amount established for 181.30 the prior year shall be determined according to the increase in 181.31 the implicit price deflator as provided in section 298.24, 181.32 subdivision 1. Each district shall receive $175 times the pupil 181.33 units identified in section 126C.05, subdivision 1, enrolled in 181.34 the second previous year or the 1983-1984 school year, whichever 181.35 is greater, less the product of 1.8 percent times the district's 181.36 taxable net tax capacity in the second previous year. 182.1 If the total amount provided by paragraph (d) is 182.2 insufficient to make the payments herein required then the 182.3 entitlement of $175 per pupil unit shall be reduced uniformly so 182.4 as not to exceed the funds available. Any amounts received by a 182.5 qualifying school district in any fiscal year pursuant to 182.6 paragraph (d) shall not be applied to reduce general education 182.7 aid which the district receives pursuant to section 126C.13 or 182.8 the permissible levies of the district. Any amount remaining 182.9 after the payments provided in this paragraph shall be paid to 182.10 the commissioner of iron range resources and rehabilitation who 182.11 shall deposit the same in the taconite environmental protection 182.12 fund and the northeast Minnesota economic protection trust fund 182.13 as provided in subdivision 11. 182.14 Each district receiving money according to this paragraph 182.15 shall reserve $25 times the number of pupil units in the 182.16 district. It may use the money for early childhood programs or 182.17 for outcome-based learning programs that enhance the academic 182.18 quality of the district's curriculum. The outcome-based 182.19 learning programs must be approved by the commissioner of 182.20 children, families, and learning. 182.21 (e) There shall be distributed to any school district the 182.22 amount which the school district was entitled to receive under 182.23 section 298.32 in 1975. 182.24 (f) Effectivewithfor the distribution in 2003and182.25thereafteronly, five percent of the distributions to school 182.26 districts under paragraphs (b), (c), and (e); subdivision 6, 182.27 paragraph (c); subdivision 11; and 100 percent of the 182.28 distributions to school districts under section 477A.15, shall 182.29 be distributed to the general fund. The remainder shall be 182.30distributed to the cities and townships within each school182.31district in the proportion that their taxable net tax capacity182.32within the school district bears to the taxable net tax capacity182.33of the school district for property taxes payable in the year182.34prior to distribution. No city or township shall receive a182.35distribution greater than its levy for taxes payable in the year182.36prior to distributionadded to the sums available for 183.1 expenditure under section 298.293 as governed by section 298.296. 183.2 Sec. 29. Minnesota Statutes 2001 Supplement, section 183.3 298.28, subdivision 6, is amended to read: 183.4 Subd. 6. [PROPERTY TAX RELIEF.] (a) In 2002 and 183.5 thereafter, 35.9 cents per taxable ton, less any amount required 183.6 to be distributed under paragraphs (b) and (c), and less any 183.7 amount required to be deducted under paragraph (d), must be 183.8 allocated to St. Louis county acting as the counties' fiscal 183.9 agent, to be distributed as provided in sections 273.134 to 183.10 273.136. 183.11 (b) If an electric power plant owned by and providing the 183.12 primary source of power for a taxpayer mining and concentrating 183.13 taconite is located in a county other than the county in which 183.14 the mining and the concentrating processes are conducted, .1875 183.15 cent per taxable ton of the tax imposed and collected from such 183.16 taxpayer shall be paid to the county. 183.17 (c) If an electric power plant owned by and providing the 183.18 primary source of power for a taxpayer mining and concentrating 183.19 taconite is located in a school district other than a school 183.20 district in which the mining and concentrating processes are 183.21 conducted,.7282.5607 cent per taxable ton of the tax imposed 183.22 and collected from the taxpayer shall be paid to the school 183.23 district. 183.24 (d) Two cents per taxable ton must be deducted from the 183.25 amount allocated to the St. Louis county auditor under paragraph 183.26 (a). 183.27 Sec. 30. Minnesota Statutes 2001 Supplement, section 183.28 298.28, subdivision 9a, is amended to read: 183.29 Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 30.1 183.30 cents per ton for distributions in 2002 and thereafter must be 183.31 paid to the taconite economic development fund. No distribution 183.32 shall be made under this paragraph in 2004 or any subsequent 183.33 year in which total industry production falls below 30 million 183.34 tons. Distribution shall only be made to a taconite producer's 183.35 fund under section 298.227 if the producer timely pays its tax 183.36 under section 298.24 by the dates provided under section 298.27, 184.1 or pursuant to the due dates provided by an administrative 184.2 agreement with the commissioner. 184.3 (b) An amount equal to 50 percent of the tax under section 184.4 298.24 for concentrate sold in the form of pellet chips and 184.5 fines not exceeding 5/16 inch in size and not including crushed 184.6 pellets shall be paid to the taconite economic development 184.7 fund. The amount paid shall not exceed $700,000 annually for 184.8 all companies. If the initial amount to be paid to the fund 184.9 exceeds this amount, each company's payment shall be prorated so 184.10 the total does not exceed $700,000. 184.11 Sec. 31. Minnesota Statutes 2000, section 298.28, 184.12 subdivision 9b, is amended to read: 184.13 Subd. 9b. [TACONITE ENVIRONMENTAL FUND.] Five cents per 184.14 ton for distributions in 1999, 2000, 2001,and2002, and 2003 184.15 must be paid to the taconite environmental fund for use under 184.16 section 298.2961.No distribution may be made under this184.17paragraph in any year in which total industry production falls184.18below 30,000,000 tons.184.19 Sec. 32. Minnesota Statutes 2000, section 298.28, 184.20 subdivision 11, is amended to read: 184.21 Subd. 11. [REMAINDER.] (a) The proceeds of the tax imposed 184.22 by section 298.24 which remain after the distributions and 184.23 payments in subdivisions 2 to 10a, as certified by the 184.24 commissioner of revenue, and paragraphs (b), (c),and(d), and 184.25 (e) have been made, together with interest earned on all money 184.26 distributed under this section prior to distribution, shall be 184.27 divided between the taconite environmental protection fund 184.28 created in section 298.223 and the northeast Minnesota economic 184.29 protection trust fund created in section 298.292 as follows: 184.30 Two-thirds to the taconite environmental protection fund and 184.31 one-third to the northeast Minnesota economic protection trust 184.32 fund. The proceeds shall be placed in the respective special 184.33 accounts. 184.34 (b) There shall be distributed to each city, town, and 184.35 county the amount that it received under section 294.26 in 184.36 calendar year 1977; provided, however, that the amount 185.1 distributed in 1981 to the unorganized territory number 2 of 185.2 Lake county and the town of Beaver Bay based on the 185.3 between-terminal trackage of Erie Mining Company will be 185.4 distributed in 1982 and subsequent years to the unorganized 185.5 territory number 2 of Lake county and the towns of Beaver Bay 185.6 and Stony River based on the miles of track of Erie Mining 185.7 Company in each taxing district. 185.8 (c) There shall be distributed to the iron range resources 185.9 and rehabilitation board the amounts it received in 1977 under 185.10 section 298.22. The amount distributed under this paragraph 185.11 shall be expended within or for the benefit of the tax relief 185.12 area defined in section 273.134. 185.13 (d) There shall be distributed to each school district81185.14 62 percent of the amount that it received under section 294.26 185.15 in calendar year 1977. 185.16 (e) In 2003 only, $100,000 must be distributed to a 185.17 township located in a taconite tax relief area as defined in 185.18 section 273.134, paragraph (a), that received $119,259 of 185.19 homestead and agricultural credit aid and $182,014 in local 185.20 government aid in 2001. 185.21 Sec. 33. Minnesota Statutes 2001 Supplement, section 185.22 298.296, subdivision 2, is amended to read: 185.23 Subd. 2. [EXPENDITURE OF FUNDS.]Before January 1, 2003,185.24 (a) Funds may be expended on projects and for administration of 185.25 the trust fund only from the net interest, earnings, and 185.26 dividends arising from the investment of the trust at any time, 185.27 including net interest, earnings, and dividends that have arisen 185.28 prior to July 13, 1982, plus $10,000,000 made available for use 185.29 in fiscal year 1983, except that any amount required to be paid 185.30 out of the trust fund to provide the property tax relief 185.31 specified in Laws 1977, chapter 423, article X, section 4, and 185.32 to make school bond payments and payments to recipients of 185.33 taconite production tax proceeds pursuant to section 298.225, 185.34 may be taken from the corpus of the trust. 185.35 (b) Additionally, upon recommendation by the board, up to 185.36 $13,000,000 from the corpus of the trust may be made available 186.1 for use as provided in subdivision 4, and up to $10,000,000 from 186.2 the corpus of the trust may be made available for use as 186.3 provided in section 298.2961. 186.4 (c)On and after January 1, 2003, Funds may be expended on186.5projects and for administration from any assets of the186.6trustAdditionally, an amount equal to 20 percent of the value 186.7 of the corpus of the trust on the date of enactment of this act, 186.8 not including the funds authorized in paragraph (b), may be 186.9 expended on projects and for administration from any assets of 186.10 the trust. Funds may be expended under this paragraph only if 186.11 approved by the board upon an affirmative vote of at least ten 186.12 of its members. 186.13 (d) Annual administrative costs, not including detailed 186.14 engineering expenses for the projects, shall not exceed five 186.15 percent of the net interest, dividends, and earnings arising 186.16 from the trust in the preceding fiscal year. 186.17 (e) Principal and interest received in repayment of loans 186.18 made pursuant to this section, and earnings on other investments 186.19 made under section 298.292, subdivision 2, clause (4), shall be 186.20 deposited in the state treasury and credited to the trust. 186.21 These receipts are appropriated to the board for the purposes of 186.22 sections 298.291 to 298.298. 186.23[EFFECTIVE DATE.] This section is effective January 1, 2003. 186.24 Sec. 34. Minnesota Statutes 2001 Supplement, section 186.25 477A.011, subdivision 36, is amended to read: 186.26 Subd. 36. [CITY AID BASE.] (a) Except as providedin186.27paragraphs (b) to (o)otherwise in this subdivision, "city aid 186.28 base" means, for each city, the sum of the local government aid 186.29 and equalization aid it was originally certified to receive in 186.30 calendar year 1993 under Minnesota Statutes 1992, section 186.31 477A.013, subdivisions 3 and 5, and the amount of disparity 186.32 reduction aid it received in calendar year 1993 under Minnesota 186.33 Statutes 1992, section 273.1398, subdivision 3. 186.34 (b) For aids payable in 1996 and thereafter, a city that in 186.35 1992 or 1993 transferred an amount from governmental funds to 186.36 its sewer and water fund, which amount exceeded its net levy for 187.1 taxes payable in the year in which the transfer occurred, has a 187.2 "city aid base" equal to the sum of (i) its city aid base, as 187.3 calculated under paragraph (a), and (ii) one-half of the 187.4 difference between its city aid distribution under section 187.5 477A.013, subdivision 9, for aids payable in 1995 and its city 187.6 aid base for aids payable in 1995. 187.7 (c) The city aid base for any city with a population less 187.8 than 500 is increased by $40,000 for aids payable in calendar 187.9 year 1995 and thereafter, and the maximum amount of total aid it 187.10 may receive under section 477A.013, subdivision 9, paragraph 187.11 (c), is also increased by $40,000 for aids payable in calendar 187.12 year 1995 only, provided that: 187.13 (i) the average total tax capacity rate for taxes payable 187.14 in 1995 exceeds 200 percent; 187.15 (ii) the city portion of the tax capacity rate exceeds 100 187.16 percent; and 187.17 (iii) its city aid base is less than $60 per capita. 187.18 (d) The city aid base for a city is increased by $20,000 in 187.19 1998 and thereafter and the maximum amount of total aid it may 187.20 receive under section 477A.013, subdivision 9, paragraph (c), is 187.21 also increased by $20,000 in calendar year 1998 only, provided 187.22 that: 187.23 (i) the city has a population in 1994 of 2,500 or more; 187.24 (ii) the city is located in a county, outside of the 187.25 metropolitan area, which contains a city of the first class; 187.26 (iii) the city's net tax capacity used in calculating its 187.27 1996 aid under section 477A.013 is less than $400 per capita; 187.28 and 187.29 (iv) at least four percent of the total net tax capacity, 187.30 for taxes payable in 1996, of property located in the city is 187.31 classified as railroad property. 187.32 (e) The city aid base for a city is increased by $200,000 187.33 in 1999 and thereafter and the maximum amount of total aid it 187.34 may receive under section 477A.013, subdivision 9, paragraph 187.35 (c), is also increased by $200,000 in calendar year 1999 only, 187.36 provided that: 188.1 (i) the city was incorporated as a statutory city after 188.2 December 1, 1993; 188.3 (ii) its city aid base does not exceed $5,600; and 188.4 (iii) the city had a population in 1996 of 5,000 or more. 188.5 (f) The city aid base for a city is increased by $450,000 188.6 in 1999 to 2008 and the maximum amount of total aid it may 188.7 receive under section 477A.013, subdivision 9, paragraph (c), is 188.8 also increased by $450,000 in calendar year 1999 only, provided 188.9 that: 188.10 (i) the city had a population in 1996 of at least 50,000; 188.11 (ii) its population had increased by at least 40 percent in 188.12 the ten-year period ending in 1996; and 188.13 (iii) its city's net tax capacity for aids payable in 1998 188.14 is less than $700 per capita. 188.15 (g) Beginning in 2002, the city aid base for a city is 188.16 equal to the sum of its city aid base in 2001 and the amount of 188.17 additional aid it was certified to receive under section 477A.06 188.18 in 2001. For 2002 only, the maximum amount of total aid a city 188.19 may receive under section 477A.013, subdivision 9, paragraph 188.20 (c), is also increased by the amount it was certified to receive 188.21 under section 477A.06 in 2001. 188.22 (h) The city aid base for a city is increased by $150,000 188.23 for aids payable in 2000 and thereafter, and the maximum amount 188.24 of total aid it may receive under section 477A.013, subdivision 188.25 9, paragraph (c), is also increased by $150,000 in calendar year 188.26 2000 only, provided that: 188.27 (1) the city has a population that is greater than 1,000 188.28 and less than 2,500; 188.29 (2) its commercial and industrial percentage for aids 188.30 payable in 1999 is greater than 45 percent; and 188.31 (3) the total market value of all commercial and industrial 188.32 property in the city for assessment year 1999 is at least 15 188.33 percent less than the total market value of all commercial and 188.34 industrial property in the city for assessment year 1998. 188.35 (i) The city aid base for a city is increased by $200,000 188.36 in 2000 and thereafter, and the maximum amount of total aid it 189.1 may receive under section 477A.013, subdivision 9, paragraph 189.2 (c), is also increased by $200,000 in calendar year 2000 only, 189.3 provided that: 189.4 (1) the city had a population in 1997 of 2,500 or more; 189.5 (2) the net tax capacity of the city used in calculating 189.6 its 1999 aid under section 477A.013 is less than $650 per 189.7 capita; 189.8 (3) the pre-1940 housing percentage of the city used in 189.9 calculating 1999 aid under section 477A.013 is greater than 12 189.10 percent; 189.11 (4) the 1999 local government aid of the city under section 189.12 477A.013 is less than 20 percent of the amount that the formula 189.13 aid of the city would have been if the need increase percentage 189.14 was 100 percent; and 189.15 (5) the city aid base of the city used in calculating aid 189.16 under section 477A.013 is less than $7 per capita. 189.17 (j) The city aid base for a city is increased by $225,000 189.18 in calendar years 2000 to 2002 and the maximum amount of total 189.19 aid it may receive under section 477A.013, subdivision 9, 189.20 paragraph (c), is also increased by $225,000 in calendar year 189.21 2000 only, provided that: 189.22 (1) the city had a population of at least 5,000; 189.23 (2) its population had increased by at least 50 percent in 189.24 the ten-year period ending in 1997; 189.25 (3) the city is located outside of the Minneapolis-St. Paul 189.26 metropolitan statistical area as defined by the United States 189.27 Bureau of the Census; and 189.28 (4) the city received less than $30 per capita in aid under 189.29 section 477A.013, subdivision 9, for aids payable in 1999. 189.30 (k) The city aid base for a city is increased by $102,000 189.31 in 2000 and thereafter, and the maximum amount of total aid it 189.32 may receive under section 477A.013, subdivision 9, paragraph 189.33 (c), is also increased by $102,000 in calendar year 2000 only, 189.34 provided that: 189.35 (1) the city has a population in 1997 of 2,000 or more; 189.36 (2) the net tax capacity of the city used in calculating 190.1 its 1999 aid under section 477A.013 is less than $455 per 190.2 capita; 190.3 (3) the net levy of the city used in calculating 1999 aid 190.4 under section 477A.013 is greater than $195 per capita; and 190.5 (4) the 1999 local government aid of the city under section 190.6 477A.013 is less than 38 percent of the amount that the formula 190.7 aid of the city would have been if the need increase percentage 190.8 was 100 percent. 190.9 (l) The city aid base for a city is increased by $32,000 in 190.10 2001 and thereafter, and the maximum amount of total aid it may 190.11 receive under section 477A.013, subdivision 9, paragraph (c), is 190.12 also increased by $32,000 in calendar year 2001 only, provided 190.13 that: 190.14 (1) the city has a population in 1998 that is greater than 190.15 200 but less than 500; 190.16 (2) the city's revenue need used in calculating aids 190.17 payable in 2000 was greater than $200 per capita; 190.18 (3) the city net tax capacity for the city used in 190.19 calculating aids available in 2000 was equal to or less than 190.20 $200 per capita; 190.21 (4) the city aid base of the city used in calculating aid 190.22 under section 477A.013 is less than $65 per capita; and 190.23 (5) the city's formula aid for aids payable in 2000 was 190.24 greater than zero. 190.25 (m) The city aid base for a city is increased by $7,200 in 190.26 2001 and thereafter, and the maximum amount of total aid it may 190.27 receive under section 477A.013, subdivision 9, paragraph (c), is 190.28 also increased by $7,200 in calendar year 2001 only, provided 190.29 that: 190.30 (1) the city had a population in 1998 that is greater than 190.31 200 but less than 500; 190.32 (2) the city's commercial industrial percentage used in 190.33 calculating aids payable in 2000 was less than ten percent; 190.34 (3) more than 25 percent of the city's population was 60 190.35 years old or older according to the 1990 census; 190.36 (4) the city aid base of the city used in calculating aid 191.1 under section 477A.013 is less than $15 per capita; and 191.2 (5) the city's formula aid for aids payable in 2000 was 191.3 greater than zero. 191.4 (n) The city aid base for a city is increased by $45,000 in 191.5 2001 and thereafter and by an additional $50,000 in calendar 191.6 years 2002 to 2011, and the maximum amount of total aid it may 191.7 receive under section 477A.013, subdivision 9, paragraph (c), is 191.8 also increased by $45,000 in calendar year 2001 only, and by 191.9 $50,000 in calendar year 2002 only, provided that: 191.10 (1) the net tax capacity of the city used in calculating 191.11 its 2000 aid under section 477A.013 is less than $810 per 191.12 capita; 191.13 (2) the population of the city declined more than two 191.14 percent between 1988 and 1998; 191.15 (3) the net levy of the city used in calculating 2000 aid 191.16 under section 477A.013 is greater than $240 per capita; and 191.17 (4) the city received less than $36 per capita in aid under 191.18 section 477A.013, subdivision 9, for aids payable in 2000. 191.19 (o) The city aid base for a city with a population of 191.20 10,000 or more which is located outside of the seven-county 191.21 metropolitan area is increased in 2002 and thereafter, and the 191.22 maximum amount of total aid it may receive under section 191.23 477A.013, subdivision 9, paragraph (b) or (c), is also increased 191.24 in calendar year 2002 only, by an amount equal to the lesser of: 191.25 (1)(i) the total population of the city, as determined by 191.26 the United States Bureau of the Census, in the 2000 census, (ii) 191.27 minus 5,000, (iii) times 60; or 191.28 (2) $2,500,000. 191.29 (p) The city aid base is increased by $50,000 in 2002 and 191.30 thereafter, and the maximum amount of total aid it may receive 191.31 under section 477A.013, subdivision 9, paragraph (c), is also 191.32 increased by $50,000 in calendar year 2002 only, provided that: 191.33 (1) the city is located in the seven-county metropolitan 191.34 area; 191.35 (2) its population in 2000 is between 10,000 and 20,000; 191.36 and 192.1 (3) its commercial industrial percentage, as calculated for 192.2 city aid payable in 2001, was greater than 25 percent. 192.3 (q) The city aid base for a city is increased by $150,000 192.4 in calendar years 2002 to 2011 and the maximum amount of total 192.5 aid it may receive under section 477A.013, subdivision 9, 192.6 paragraph (c), is also increased by $150,000 in calendar year 192.7 2002 only, provided that: 192.8 (1) the city had a population of at least 3,000 but no more 192.9 than 4,000 in 1999; 192.10 (2) its home county is located within the seven-county 192.11 metropolitan area; 192.12 (3) its pre-1940 housing percentage is less than 15 192.13 percent; and 192.14 (4) its city net tax capacity per capita for taxes payable 192.15 in 2000 is less than $900 per capita. 192.16 (r) The city aid base for a city that is located outside of 192.17 the metropolitan area defined in section 473.121, subdivision 2, 192.18 and has a population of 1,000 or less is increased in calendar 192.19 year 2003 and thereafter, and the maximum amount of total aid it 192.20 may receive under section 477A.013, subdivision 9, paragraph (b) 192.21 or (c), is also increased by an amount equal to the positive 192.22 difference between the sum of the aids received in calendar year 192.23 2001 by the city under sections 273.1398, subdivision 2, and 192.24 477A.013, subdivision 9, after any reduction under Minnesota 192.25 Statutes 2000, section 273.1399, and the aid the city received 192.26 in calendar year 2002 under section 477A.013, subdivision 9. 192.27 Sec. 35. Minnesota Statutes 2001 Supplement, section 192.28 477A.03, subdivision 2, is amended to read: 192.29 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 192.30 discharge the duties imposed by sections 477A.011 to 477A.014 is 192.31 annually appropriated from the general fund to the commissioner 192.32 of revenue. 192.33 (b) Aid payments to counties under section 477A.0121 are 192.34 limited to $20,265,000 in 1996. Aid payments to counties under 192.35 section 477A.0121 are limited to $27,571,625 in 1997. For aid 192.36 payable in 1998 and thereafter, the total aids paid under 193.1 section 477A.0121 are the amounts certified to be paid in the 193.2 previous year, adjusted for inflation as provided under 193.3 subdivision 3. 193.4 (c)(i) For aids payable in 1998 and thereafter, the total 193.5 aids paid to counties under section 477A.0122 are the amounts 193.6 certified to be paid in the previous year, adjusted for 193.7 inflation as provided under subdivision 3. 193.8 (ii) Aid payments to counties under section 477A.0122 in 193.9 2000 are further increased by an additional $20,000,000 in 2000. 193.10 (d) Aid payments to cities in 2002 under section 477A.013, 193.11 subdivision 9, are limited to the amounts certified to be paid 193.12 in the previous year, adjusted for inflation as provided in 193.13 subdivision 3, and increased by $140,000,000. For aids payable 193.14 in 2003, the total aids paid under section 477A.013, subdivision 193.15 9, are the amounts certified to be paid in the previous year, 193.16 adjusted for inflation as provided under subdivision 3, and 193.17 increased by $2,700,000 to pay the aids provided in section 193.18 477A.011, subdivision 36, paragraph (r). For aids payable in 193.19 2004, the total aids paid under section 477A.013, subdivision 9, 193.20 are the amounts certified to be paid in the previous year, 193.21 adjusted for inflation as provided under subdivision 3, and 193.22 increased by the amount certified to be paid in 2003 under 193.23 section 477A.06. For aids payable in 2005 and thereafter, the 193.24 total aids paid under section 477A.013, subdivision 9, are the 193.25 amounts certified to be paid in the previous year, adjusted for 193.26 inflation as provided under subdivision 3. The additional 193.27 amount authorized under subdivision 4 is not included when 193.28 calculating the appropriation limits under this paragraph. 193.29 (e) Reimbursements made to counties under section 477A.0123 193.30 in calendar year 2004 and thereafter are limited to an amount 193.31 equal to the maximum allowed appropriation under this section in 193.32 the previous year, multiplied by a percent to be established by 193.33 law. 193.34 Sec. 36. [477A.08] [UTILITY TAX BASE REPLACEMENT AID.] 193.35 Subdivision 1. [AID AMOUNT.] A county is eligible for aid 193.36 under this section if the sum of its net tax capacity for 194.1 assessment year 2000 of public utility real property and 194.2 personal property consisting of tools, implements and machinery 194.3 of a pipeline system transporting or distributing gas, crude oil 194.4 or petroleum products is greater than 40 percent of its total 194.5 net tax capacity for that year. For aid payable in 2003, each 194.6 county is eligible for aid equal to the sum of: 194.7 (1) 0.9 percent of the assessment year 2000 taxable market 194.8 value of public utility real property valued at less than 194.9 $150,000; 194.10 (2) 1.4 percent of the taxable market value of public 194.11 utility real property valued at more than $150,000; and 194.12 (3) 1.4 percent of the taxable market value of tools, 194.13 implements and machinery of pipeline systems transporting or 194.14 distributing gas, crude oil, or petroleum products multiplied by 194.15 the jurisdiction's local tax rate for taxes payable in 2001. 194.16 Subd. 2. [APPROPRIATION.] The amount required to make the 194.17 payments under this section is annually appropriated from the 194.18 general fund to the commissioner of revenue. 194.19 Sec. 37. Laws 1989, chapter 211, section 8, as amended by 194.20 Laws 1992, chapter 505, section 3, is amended to read: 194.21 Sec. 8. [COOK COUNTY; HOSPITAL DISTRICT.] 194.22 Subdivision 1. [CREATION; REFERENDUM.] The board of 194.23 commissioners of Cook county may by resolution create a Cook 194.24 county hospital district. The resolution providing for creation 194.25 of the district must be published in the official newspaper of 194.26 the county. If within ten days after the publication a petition 194.27 is filed with the county board that is signed by qualified 194.28 voters of the county at least equal in number to ten percent of 194.29 the number of voters voting at the most recent election of 194.30 county commissioners, requesting a referendum on the resolution, 194.31 it shall not be effective until it is approved by a majority of 194.32 qualified voters voting on the question at a special or general 194.33 election. 194.34 Subd. 2. [OPERATION OF DISTRICT.] A hospital district 194.35 created under this section shall be subject to Minnesota 194.36 Statutes, sections397.06 to 397.102447.32, except subdivision 195.1 1, to 447.41, and except as provided otherwise in this act. 195.2 Subd. 3. [BOARD.] Notwithstanding Minnesota Statutes, 195.3 section397.06447.32, the board of the district shall be 195.4 comprised of one member from each county commissioner district 195.5 elected by the voters at the first general election in the 195.6 county after the resolution has become effective. At the 1992 195.7 general election, the board members from districts one, three, 195.8 and five shall be elected to two-year terms and board members 195.9 from districts two and four to four-year terms. Their 195.10 successors shall be elected to regular four-year terms in 1994, 195.11 1996, and thereafter. Terms shall begin on the first day of 195.12 January following the election. 195.13 If members are elected in 1990, their terms shall be two 195.14 years. When the district is first created, the county 195.15 commissioner from each district shall appoint a member of the 195.16 board to serve until the commencement of the term of a successor. 195.17 When a vacancy occurs, thecounty commissioner from the195.18district affectedmajority of the remaining members of the board 195.19 of the hospital district shall appoint a member to serve until 195.20 January 1 following the next general election in the county, 195.21whenat which a successor shall be elected for a full regular 195.22 term if the full regular term of the seat that had the vacancy 195.23 is expiring on that January 1 or otherwise, for theunexpired195.24 remainder ofthe regularthat seat's term. 195.25 Subd. 4. [TAX LEVY.] (a) The tax levied under Minnesota 195.26 Statutes, section397.09447.34, shall not exceed $300,000in195.27any year, and its proceeds may be used for all purposes of the195.28hospital districtfor taxes levied in 2002. 195.29 (b) For taxes levied in 2003, and thereafter, the tax 195.30 levied under Minnesota Statutes, section 447.34, must not exceed 195.31 the greater of: (1) $300,000, or (2) $300,000 multiplied by the 195.32 ratio of the most recent available annual medical care 195.33 expenditure category of the revised Consumer Price Index, U.S. 195.34 citywide average, for all urban consumers prepared by the United 195.35 States Department of Labor to the same annual index for 2001. 195.36 Subd. 5. [TERRITORY.] The territory of the entire county 196.1 of Cook is the hospital district. 196.2 Subd. 6. [REFERENCES.] The county acts in the place of 196.3 cities and towns for purposes of Minnesota Statutes, sections 196.4 447.32, except subdivision 1, to 447.41; and all references made 196.5 to hospital districts in Minnesota Statutes, sections 447.32, 196.6 except subdivision 1, to 447.41, apply to the Cook county 196.7 hospital district. 196.8 Subd. 7. [APPLICATION.] Minnesota Statutes, section 196.9 447.38, subdivision 2, does not apply to the hospital district 196.10 created under this section. 196.11[EFFECTIVE DATE.] For purposes of Minnesota Statutes, 196.12 section 645.021, subdivisions 2 and 3, Cook county and the Cook 196.13 county hospital district are the local governmental units 196.14 affected. This section is effective the day after the latter of 196.15 the governing bodies of: 196.16 (1) Cook county and its chief clerical officer; and 196.17 (2) the Cook county hospital district and its chief 196.18 clerical officer; 196.19 timely complete their compliance with Minnesota Statutes, 196.20 section 645.021, subdivisions 2 and 3. 196.21 Sec. 38. Laws 2001, First Special Session chapter 5, 196.22 article 3, section 96, is amended to read: 196.23 Sec. 96. [REPEALER.] 196.24 (a) Minnesota Statutes 2000, sections 273.13, subdivision 196.25 24a; 273.1382; 273.1399; 275.078; 275.08, subdivision 1e; 196.26 473.446, subdivisions 1a and 1b; and 473.3915, are repealed 196.27 effective for taxes levied in 2001, payable in 2002, and 196.28 thereafter and aids or credits payable in 2002 and thereafter. 196.29 (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 196.30 702, section 16; Laws 1992, chapter 511, article 2, section 52, 196.31 as amended by Laws 1997, chapter 231, article 2, section 50, and 196.32 Laws 1998, chapter 389, article 3, section 32; Laws 1996, 196.33 chapter 471, article 8, section 45; Laws 1999, chapter 243, 196.34 article 6, section 14; Laws 1999, chapter 243, article 6, 196.35 section 15; and Laws 2000, chapter 490, article 6, section 17, 196.36 are repealed effective for taxes levied in 2001, payable in 2002 197.1 and thereafter. 197.2 (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 197.3 126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 197.4 effective July 1, 2001. 197.5(d) Minnesota Statutes 2000, section 273.126 and 462A.071,197.6are repealed effective for property taxes payable in 2004, and197.7any agreement entered into pursuant to the provisions of those197.8sections expires, effective January 1, 2004, regardless of the197.9term of the agreement.197.10 Sec. 39. [COOK COUNTY; EXPENDITURE OF ROAD AND BRIDGE 197.11 LEVY.] 197.12 Notwithstanding Minnesota Statutes, section 163.06, 197.13 subdivisions 4 and 5, the county board of Cook county, by 197.14 resolution, may expend the proceeds of the levy under Minnesota 197.15 Statutes, section 163.06, in any organized or unorganized 197.16 township or portion thereof in the county. 197.17[EFFECTIVE DATE.] This section is effective is effective 197.18 the day after the governing body of Cook county and its chief 197.19 clerical officer timely complete their compliance with Minnesota 197.20 Statutes, section 645.021, subdivisions 2 and 3. 197.21 Sec. 40. [DELAYED DUE DATE FOR CERTAIN PROPERTY TAXES.] 197.22 Notwithstanding Minnesota Statutes, sections 278.03, 197.23 subdivision 1, and 279.01, subdivision 1, for taxes payable in 197.24 2002 only, property taxes due by May 15 on class 1c property and 197.25 class 4c seasonal residential recreational property used for 197.26 commercial purposes will be considered to be timely paid if they 197.27 are paid by July 15, 2002, and no penalties shall accrue to the 197.28 first one-half property tax payment as provided in this section 197.29 if paid by July 15. On July 16, a penalty shall accrue and 197.30 thereafter be charged upon all unpaid taxes. On class 1c 197.31 property the penalty is at a rate of two percent until July 31, 197.32 and four percent on August 1. On class 4c seasonal residential 197.33 recreational property used for commercial purposes, the penalty 197.34 is four percent until July 31 and eight percent August 1. 197.35 Thereafter, for both class 1c and class 4c seasonal residential 197.36 recreational property used for commercial purposes, on the first 198.1 day of September and on the first day of October, an additional 198.2 penalty of one percent shall accrue and be charged on unpaid 198.3 taxes. The remaining one-half property taxes must be paid and 198.4 penalties accrue as provided in subdivision 1. 198.5 Sec. 41. [PROPERTY TAX ASSESSMENT OF LOW-INCOME HOUSING, 198.6 RULES.] 198.7 The commissioner of revenue shall develop guidelines for 198.8 use by assessors in calculating the restricted use value of 198.9 class 4d property under Minnesota Statutes, section 273.11, 198.10 subdivision 20. 198.11[EFFECTIVE DATE.] This section is effective the day 198.12 following final enactment. 198.13 Sec. 42. [SOUTHWEST REGIONAL DEVELOPMENT COMMISSION LEVY 198.14 FOR DEBT.] 198.15 (a) In addition to other levies authorized by law, the 198.16 Southwest Regional Development Commission may levy in each year 198.17 through 2010, payable through 2011, an additional amount 198.18 sufficient to retire its remaining debt in connection with the 198.19 Prairie Expo project located in Worthington, not to exceed 198.20 $232,080 annually. 198.21 (b) The commission may issue bonds or other obligations 198.22 under Minnesota Statutes, chapter 475, in an aggregate principal 198.23 amount not to exceed $1,632,224 to retire the debt sooner. In 198.24 that case the levy authorized in paragraph (a) may be used for 198.25 debt service on the bonds or other obligations. 198.26[EFFECTIVE DATE; LOCAL APPROVAL.] This section is effective 198.27 the day after: 198.28 (1) the governing body of the Southwest Regional 198.29 Development Commission and its chief clerical officer timely 198.30 complete their compliance with Minnesota Statutes, section 198.31 645.021, subdivisions 2 and 3; and 198.32 (2) the governing body of each county in the development 198.33 region and its chief clerical officer timely comply with 198.34 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 198.35 Sec. 43. [ST. PAUL LIBRARY AGENCY.] 198.36 (a) Notwithstanding any law or charter to the contrary, the 199.1 city council of the city of St. Paul may, by ordinance, 199.2 establish an independent library agency, a public body corporate 199.3 and politic, which is a governmental subdivision of the state of 199.4 Minnesota. The library agency shall be responsible for all 199.5 libraries and library operations within the city of St. Paul. 199.6 The actions of the city council as library board shall be 199.7 subject to mayoral veto and override of that veto in the same 199.8 manner as other actions of the city council. 199.9 (b) All employees of the library agency shall be employees 199.10 of the city of St. Paul. 199.11 (c) The city may transfer any real or personal property 199.12 used or to be used for library purposes to the library agency. 199.13 (d) The library board shall designate from among its 199.14 members a chair, secretary, and treasurer, and may adopt bylaws. 199.15 (e) The director of the library agency shall be appointed 199.16 by the mayor. 199.17[EFFECTIVE DATE.] This section is effective the day after 199.18 the governing body of St. Paul and its chief clerical officer 199.19 timely complete their compliance with Minnesota Statutes, 199.20 section 645.021, subdivisions 2 and 3. 199.21 Sec. 44. [ST. PAUL LIBRARY TAX LEVIES; FISCAL MATTERS.] 199.22 Subdivision 1. [BUDGET TO CITY.] Annually, at a time fixed 199.23 by charter, resolution, or ordinance of the city, the library 199.24 board shall send its budget to the city council. The budget 199.25 must include a detailed written estimate of the amount of money 199.26 that the library board expects to need from the city to operate 199.27 the library agency during the next fiscal year in excess of any 199.28 expected receipts from other sources. 199.29 Subd. 2. [FISCAL YEAR.] The fiscal year of the library 199.30 agency must be the same as the fiscal year of the city. 199.31 Subd. 3. [CITY LEVY.] The city shall, at the request of 199.32 the library board, levy a tax in any year for the benefit of the 199.33 library agency. The amount collected pursuant to the levy must 199.34 be used by the city treasurer exclusively for operations of the 199.35 library agency. 199.36[EFFECTIVE DATE.] This section is effective the day after 200.1 the governing body of St. Paul and its chief clerical officer 200.2 timely complete their compliance with Minnesota Statutes, 200.3 section 645.021, subdivisions 2 and 3. 200.4 Sec. 45. [ST. PAUL LIBRARY AGENCY GENERAL OBLIGATION 200.5 BONDS.] 200.6 Subdivision 1. [POWER; PROCEDURE.] The St. Paul library 200.7 agency may issue bonds in the principal amount authorized by the 200.8 city council. The bonds may be issued in anticipation of income 200.9 from any source. The bonds may be issued: 200.10 (1) to secure funds needed by the library agency to pay for 200.11 acquired real or personal property; or 200.12 (2) for capital improvements to property owned or used by 200.13 the library. 200.14 The bonds must be in the amount and form and bear interest 200.15 at the rate set by the city council. Except as otherwise 200.16 provided in this section, the issuance of the bonds is governed 200.17 by Minnesota Statutes, chapter 475. The library agency when 200.18 issuing the bonds is a municipality under Minnesota Statutes, 200.19 chapter 475. Notwithstanding any city charter provision or any 200.20 general or special law to the contrary, the bonds may be issued 200.21 and sold without submission of the question to the electors of 200.22 the city, provided that the ordinance of the city council 200.23 authorizing issuance of the bonds by the library agency is 200.24 subject to provisions in the city charter pertaining to the 200.25 procedure for referendum on ordinances enacted by the city 200.26 council. 200.27 Subd. 2. [OUTSIDE DEBT LIMIT.] Bonds issued by the library 200.28 agency must not be included in the net debt of the city of St. 200.29 Paul. Money received under this section must not be included in 200.30 a per capita limit on taxing or spending in the city charter. 200.31 The library agency is also exempt from the limit. 200.32 Subd. 3. [PLEDGE.] The bonds must be secured by the pledge 200.33 of the full faith, credit, and resources of the city of St. 200.34 Paul. The city council must first decide whether the issuance 200.35 of the bonds by the library agency is proper in each case and, 200.36 if so, the amount of bonds to issue. The city council shall 201.1 give specific consent in an ordinance to the pledge of the 201.2 city's full faith, credit, and resources. The city shall pay 201.3 the principal amount of the bonds and the interest on them from 201.4 taxes levied under this section to make the payment or from 201.5 library board income from any source. 201.6[EFFECTIVE DATE.] This section is effective the day after 201.7 the governing body of St. Paul and its chief clerical officer 201.8 timely complete their compliance with Minnesota Statutes, 201.9 section 645.021, subdivisions 2 and 3. 201.10 Sec. 46. [CITY OF AFTON; EARLY TERMINATION OF AGRICULTURAL 201.11 PRESERVE.] 201.12 Notwithstanding Minnesota Statutes, sections 473H.08 and 201.13 473H.09, providing for the duration and early termination of a 201.14 metropolitan agricultural preserve, the city of Afton may 201.15 initiate expiration of a parcel of land from an agricultural 201.16 preserve for which the landowner has previously initiated 201.17 expiration under Minnesota Statutes, section 473H.08, 201.18 subdivision 2, located in the city of Afton, Washington county, 201.19 and described as: 201.20 the Northeast Quarter of the Northeast Quarter of Section 201.21 29, Township 28 North, Range 20 West of the Fourth Principal 201.22 Meridian. 201.23 The effective date of the expiration may be on any date 201.24 after the effective date of this section as determined by the 201.25 Afton city council, once the council has otherwise complied with 201.26 the procedural requirements of Minnesota Statutes, sections 201.27 473H.04 and 473H.08. All benefits accruing to the parcel as an 201.28 agricultural preserve, including benefits relating to the 201.29 valuation and assessment of the parcel for ad valorem property 201.30 taxes under Minnesota Statutes, chapter 273, and section 201.31 473H.10, shall cease on the date of expiration. 201.32[EFFECTIVE DATE.] This section is effective without local 201.33 approval on the day following final enactment. 201.34 Sec. 47. [ADDITIONAL DISTRIBUTION.] 201.35 The difference between the distribution to school districts 201.36 under Minnesota Statutes, sections 298.225 and 298.28, as 202.1 amended by this act, and the amount the districts would have 202.2 received under Minnesota Statutes 2000, sections 298.225 and 202.3 298.28 for distributions in 2004 only, shall be added to the 202.4 sums available for expenditure under Minnesota Statutes, section 202.5 298.293, as governed by Minnesota Statutes, section 298.296. 202.6 Sec. 48. [REPEALER.] 202.7 Laws 2001, First Special Session chapter 5, article 3, 202.8 section 88, is repealed. 202.9[EFFECTIVE DATE.] This section is effective July 1, 2002. 202.10 ARTICLE 17 202.11 LOCAL DEVELOPMENT 202.12 Section 1. Minnesota Statutes 2000, section 272.0212, 202.13 subdivision 1, is amended to read: 202.14 Subdivision 1. [EXEMPTION.] All qualified property in a 202.15 zone is exempt to the extent and for the duration provided by 202.16 the zone designation and under sections 469.1731 to 469.1735 to 202.17 the extent limited by this section. 202.18[EFFECTIVE DATE.] This section is effective the day 202.19 following final enactment. 202.20 Sec. 2. Minnesota Statutes 2000, section 272.0212, 202.21 subdivision 4, is amended to read: 202.22 Subd. 4. [DEFINITIONS.] (a) For purposes of this section, 202.23 the following terms have the meanings given. 202.24 (b) "City" means a statutory or home rule charter city. 202.25 (c) "Qualified property" meansclass 3 and: 202.26 (1) class 1, 3, 4, and 5 property as defined in section 202.27 273.13 that is located in a zone and is newly constructed after 202.28 the zone was designated, including the land that contains the 202.29 improvements; and 202.30 (2) property qualifying under subdivision 6. 202.31(c)(d) "Zone" means a border city development zone 202.32 designated under the provisions of section 469.1731. 202.33[EFFECTIVE DATE.] This section is effective beginning for 202.34 assessment year 2003. 202.35 Sec. 3. Minnesota Statutes 2000, section 272.0212, is 202.36 amended by adding a subdivision to read: 203.1 Subd. 6. [NEWLY CONSTRUCTED PROPERTY.] (a) This 203.2 subdivision applies in the following cities: 203.3 (1) The governing body of a city authorized to establish a 203.4 zone may, by resolution, grant an exemption under the provisions 203.5 of this subdivision. 203.6 (2) The governing body of a city, other than a city under 203.7 clause (1), that is located in a county containing a city that 203.8 is authorized to establish a zone may, by resolution, grant an 203.9 exemption under the provisions of this subdivision. 203.10 (b) The authority under this subdivision applies to the 203.11 entire area of the city and is not limited to the designated 203.12 area of a zone. 203.13 (c) An exemption under this subdivision may only be granted: 203.14 (1) to property, excluding land, that is not qualified 203.15 property under subdivision 4, paragraph (c), clause (1), and 203.16 that is classified as: 203.17 (i) class 1 under section 273.13, subdivision 22; 203.18 (ii) class 2 for the house and garage only under section 203.19 273.13, subdivision 23; or 203.20 (iii) class 4 for the portion of the property used for 203.21 residential occupancy under section 273.13, subdivision 25; and 203.22 (2) for the first two assessment years immediately 203.23 following the year that the construction has begun. 203.24 (d) In order to grant an exemption under this subdivision, 203.25 the city must approve the exemption before building permits are 203.26 issued for construction of the property. The city must notify 203.27 the official, designated by the governing body of the county, of 203.28 each exemption by no later than June 1 of the first assessment 203.29 year to which the exemption applies. 203.30 (e) The provisions of subdivision 2, clauses (2) and (3), 203.31 and subdivision 5, do not apply to this subdivision. 203.32[EFFECTIVE DATE.] This section is effective beginning for 203.33 assessment year 2003. 203.34 Sec. 4. Minnesota Statutes 2000, section 290.06, is 203.35 amended by adding a subdivision to read: 203.36 Subd. 29. [REGIONAL INVESTMENT CREDIT.] (a) A credit is 204.1 allowed against the tax imposed by this chapter for investment 204.2 in a qualifying regional angel investment network fund. The 204.3 credit equals 25 percent of the taxpayer's investment made in 204.4 the fund for the taxable year, but not to exceed the lesser of: 204.5 (1) the liability for tax under this chapter, including the 204.6 applicable alternative minimum tax; or 204.7 (2) the amount of the certificate under paragraph (c) 204.8 provided to the taxpayer by the fund. 204.9 (b) For purposes of this subdivision, a regional angel 204.10 investment network fund means a pool investment fund that: 204.11 (1) is organized as a limited liability company and 204.12 consists of members who are accredited investors within the 204.13 meaning of Regulation D of the Securities and Exchange 204.14 Commission, Code of Federal Regulations, title 17, section 204.15 230.501(a), and at least one member of which is certified as a 204.16 community development financial institution by the United States 204.17 Department of Treasury; and 204.18 (2) primarily makes equity investments in emerging 204.19 companies that are located in local communities in Minnesota 204.20 outside of the metropolitan area as defined in section 473.121, 204.21 subdivision 2. 204.22 (c) Regional angel investment network funds may apply to 204.23 the commissioner of trade and economic development for 204.24 certification as a qualifying regional angel investment net 204.25 fund. The application must be in the form and made under 204.26 procedures specified by the commissioner of trade and economic 204.27 development. The commissioner of trade and economic development 204.28 may certify up to ten qualifying funds and provide certificates 204.29 entitling investors in the funds to credits under this 204.30 subdivision of up to $250,000 for each ($2,500,000 in total 204.31 credits authorized). In awarding certificates under this 204.32 paragraph, the commissioner of trade and economic development 204.33 shall seek to certify funds that are broadly dispersed across 204.34 the entire state outside of the metropolitan area, as defined in 204.35 section 473.121, subdivision 2. 204.36 (d) The commissioner may require a taxpayer to provide a 205.1 copy of the credit certificate under paragraph (c) to verify the 205.2 taxpayer's entitlement to a credit under this subdivision. 205.3 (e) If the amount of the credit under this subdivision for 205.4 any taxable year exceeds the limitation under paragraph (a), 205.5 clause (1), the excess is a credit carryover to each of the 15 205.6 succeeding taxable years. The entire amount of the excess 205.7 unused credit for the taxable year must be carried first to the 205.8 earliest of the taxable years to which the credit may be carried 205.9 and then to each successive year to which the credit may be 205.10 carried. The amount of the unused credit which may be added 205.11 under this paragraph may not exceed the taxpayer's liability for 205.12 tax less the credit for the taxable year. 205.13 (f) $2,500,000 is appropriated from the general fund in 205.14 fiscal year 2003 to the commissioner of trade and economic 205.15 development for the regional investment credit. This 205.16 appropriation is available until expended. 205.17[EFFECTIVE DATE.] This section is effective the day 205.18 following final enactment and for taxable years beginning after 205.19 December 31, 2001. It applies to investments made after the 205.20 fund has been certified by the commissioner of trade and 205.21 economic development under this section. 205.22 Sec. 5. Minnesota Statutes 2001 Supplement, section 205.23 469.1734, subdivision 6, is amended to read: 205.24 Subd. 6. [SALES TAX EXEMPTION; EQUIPMENT; CONSTRUCTION 205.25 MATERIALS.] (a) The gross receipts from the sale of machinery 205.26 and equipment and repair parts are exempt from taxation under 205.27 chapter 297A, if the machinery and equipment: 205.28 (1) are used in connection with a trade or business; 205.29 (2) are placed in service in a city that is authorized to 205.30 designate a zone under section 469.1731, regardless of whether 205.31 the machinery and equipment are used in a zone; and 205.32 (3) have a useful life of 12 months or more. 205.33 (b) The gross receipts from the sale of construction 205.34 materials are exempt, if they are used to construct: 205.35 (1) a facility for use in a trade or business located in a 205.36 city that is authorized to designate a zone under section 206.1 469.1731, regardless of whether the facility is located in a 206.2 zone; or 206.3 (2) housing that is located in a zone. 206.4 The exemptions under this paragraph apply regardless of whether 206.5 the purchase is made by the owner, the user, or a contractor. 206.6 (c) A purchaser may claim an exemption under this 206.7 subdivision for tax on the purchases up to, but not exceeding: 206.8 (1) the amount of the tax credit certificates received from 206.9 the city, less 206.10 (2) any tax credit certificates used under the provisions 206.11 of subdivisions 4 and 5, and section 469.1732, subdivision 2. 206.12 (d) The tax on sales of items exempted under this 206.13 subdivision shall be imposed and collected as if the applicable 206.14 rate under section 297A.62 applied. Upon application by the 206.15 purchaser, on forms prescribed by the commissioner, a refund 206.16 equal to the tax paid shall be paid to the purchaser. The 206.17 application must include sufficient information to permit the 206.18 commissioner to verify the sales tax paid and the eligibility of 206.19 the claimant to receive the credit. No more than two 206.20 applications for refunds may be filed under this subdivision in 206.21 a calendar year. The provisions of section 289A.40 apply to the 206.22 refunds payable under this subdivision. There is annually 206.23 appropriated to the commissioner of revenue the amount required 206.24 to make the refunds, which must be deducted from the amount of 206.25 the city's allocation under section 469.169, subdivision 12, 206.26 that remains available and its limitation under section 469.1735. 206.27 The amount to be refunded shall bear interest at the rate in 206.28 section 270.76 from the date the refund claim is filed with the 206.29 commissioner. 206.30[EFFECTIVE DATE.] This section is effective for sales made 206.31 after June 30, 2002. 206.32 Sec. 6. Minnesota Statutes 2001 Supplement, section 206.33 469.1763, subdivision 6, is amended to read: 206.34 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 206.35 subdivision applies only to districts for which the request for 206.36 certification was made before August 1, 2001, and without regard 207.1 to whether the request for certification was made prior to 207.2 August 1, 1979. 207.3 (b) The municipality for the district may transfer 207.4 available increments from another tax increment financing 207.5 district located in the municipality, if the transfer is 207.6 necessary to eliminate a deficit in the district to which the 207.7 increments are transferred. A deficit in the district for 207.8 purposes of this subdivision means the lesser of the following 207.9 two amounts: 207.10 (1)(i) the amount due during the calendar year to pay 207.11 preexisting obligations of the district; minus 207.12 (ii) the total increments to be collected from properties 207.13 located within the district that are available for the calendar 207.14 year; plus 207.15 (iii) total increments from properties located in other 207.16 districts in the municipality that are available to be used to 207.17 meet the district's obligations under this section, excluding 207.18 this subdivision, or other provisions of law (but excluding a 207.19 special tax under section 469.1791 and the grant program under 207.20 Laws 1997, chapter 231, article 1, section 19, or Laws 2001, 207.21 First Special Session chapter 5); or 207.22 (2) the reduction in increments collected from properties 207.23 located in the district for the calendar year as a result of the 207.24 changes in class rates in Laws 1997, chapter 231, article 1; 207.25 Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, 207.26 and Laws 2001, First Special Session chapter 5, or the 207.27 elimination of the general education tax levy under Laws 2001, 207.28 First Special Session chapter 5. 207.29 (c) A preexisting obligation means: 207.30 (1) bonds issued and sold before August 1, 2001, or bonds 207.31 issued pursuant to a binding contract requiring the issuance of 207.32 bonds entered into before July 1, 2001, and bonds issued to 207.33 refund such bonds or to reimburse expenditures made in 207.34 conjunction with a signed contractual agreement entered into 207.35 before August 1, 2001, to the extent that the bonds are secured 207.36 by a pledge of increments from the tax increment financing 208.1 district; and 208.2 (2) binding contracts entered into before August 1, 2001, 208.3 to the extent that the contracts require payments secured by a 208.4 pledge of increments from the tax increment financing district. 208.5 (d) The municipality may require a development authority, 208.6 other than a seaway port authority, to transfer available 208.7 increments for any of its tax increment financing districts in 208.8 the municipality to make up an insufficiency in another district 208.9 in the municipality, regardless of whether the district was 208.10 established by the development authority or another development 208.11 authority. This authority applies notwithstanding any law to 208.12 the contrary, but applies only to a development authority that: 208.13 (1) was established by the municipality; or 208.14 (2) the governing body of which is appointed, in whole or 208.15 part, by the municipality or an officer of the municipality or 208.16 which consists, in whole or part, of members of the governing 208.17 body of the municipality. The municipality may use this 208.18 authority only after it has first used all available increments 208.19 of the receiving development authority to eliminate the 208.20 insufficiency and exercised any permitted action under section 208.21 469.1792, subdivision 3, for preexisting districts of the 208.22 receiving development authority to eliminate the insufficiency. 208.23 (e) The authority under this subdivision to spend tax 208.24 increments outside of the area of the district from which the 208.25 tax increments were collected: 208.26 (1) may only be exercised after obtaining approval of the 208.27 use of the increments, in writing, by the commissioner of 208.28 revenue; 208.29 (2) is an exception to the restrictions under section 208.30 469.176, subdivision 4i, and the other provisions of this 208.31 section, and the percentage restrictions under subdivision 2 208.32 must be calculated after deducting increments spent under this 208.33 subdivision from the total increments for the district; and 208.34 (3) applies notwithstanding the provisions of the Tax 208.35 Increment Financing Act in effect for districts for which the 208.36 request for certification was made before June 30, 1982, or any 209.1 other law to the contrary. 209.2 (f) If a preexisting obligation requires the development 209.3 authority to pay an amount that is limited to the increment from 209.4 the district or a specific development within the district and 209.5 if the obligation requires paying a higher amount to the extent 209.6 that increments are available, the municipality may determine 209.7 that the amount due under the preexisting obligation equals the 209.8 higher amount and may authorize the transfer of increments under 209.9 this subdivision to pay up to the higher amount. The existence 209.10 of a guarantee of obligations by the individual or entity that 209.11 would receive the payment under this paragraph is disregarded in 209.12 the determination of eligibility to pool under this 209.13 subdivision. The authority to transfer increments under this 209.14 paragraph may only be used to the extent that the payment of all 209.15 other preexisting obligations in the municipality due during the 209.16 calendar year have been satisfied. 209.17[EFFECTIVE DATE.] This section is effective for increments 209.18 payable in 2002 and thereafter. 209.19 Sec. 7. Minnesota Statutes 2001 Supplement, section 209.20 469.1792, subdivision 1, is amended to read: 209.21 Subdivision 1. [SCOPE.] This section applies only to an 209.22 authority with a preexisting district for which: 209.23 (1)(i)the increments from the district were insufficient 209.24 to pay preexisting obligations as a result of the class rate 209.25 changes or the elimination of the state-determined general 209.26 education property tax levy under this act, or both; or 209.27(ii)(2)(i) the development authority has a binding 209.28 contract with a person requiring the authority to pay to the 209.29 person an amount that may not exceed the increment from the 209.30 district or a specific development within the districtand as a209.31result of the reduction in increment because of the class rate209.32changes or the elimination of the state-determined general209.33education property tax levy under this act, or both,; and 209.34 (ii) the authority is unable to pay the full amount under 209.35 the contract from the pledged increments or other increments 209.36 from the district that would have been due if the class rate 210.1 changes or elimination of the state-determined general education 210.2 property tax levy or both had not been made under Laws 2001, 210.3 First Special Session chapter 5; and210.4(2) the municipality exercised its full authority to pool210.5under section 469.1763, subdivision 6, and the transfer of210.6increments did not eliminate the insufficiency under clause (1),210.7item (i), or the inability to pay the full amount under clause210.8(1), item (ii); or 210.9 (3) the authority amends its tax increment financing plan 210.10 to establish an affordable housing account to which increments 210.11 are pledged. 210.12[EFFECTIVE DATE.] This section is effective for actions 210.13 taken and resolutions approved after June 30, 2002. 210.14 Sec. 8. Minnesota Statutes 2001 Supplement, section 210.15 469.1792, subdivision 2, is amended to read: 210.16 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 210.17 the following terms have the meanings given. 210.18 (b)"Preexisting district" means a tax increment financing210.19district for which the request for certification was made before210.20August 1, 2001"Affordable housing account" means an account in 210.21 which increment is deposited solely for affordable housing 210.22 activities as defined in section 469.174, subdivision 11. 210.23 Increment from the affordable housing account may be spent by an 210.24 authority anywhere within its area of operation. 210.25 Notwithstanding the definition of a project under section 210.26 469.174, increments may be spent to assist housing that meets 210.27 the requirements under section 469.1761. Any transfers of 210.28 increment to the affordable housing account shall be outside the 210.29 limitations imposed by section 469.1763, subdivision 2. 210.30 (c) "Preexisting district" means a tax increment financing 210.31 district for which the request for certification was made before 210.32 August 1, 2001. 210.33 (d) "Preexisting obligation" means: 210.34 (1) a bond or binding contract that: 210.35(1)(i) was issued or approved before August 1, 2001, or 210.36 was issued pursuant to a binding contract entered into before 211.1 August 1, 2001; and 211.2(2)(ii) is secured by increments from a preexisting 211.3 district; and 211.4 (2) any tax increment eligible expense specifically 211.5 described in the preexisting plan which the authority intends to 211.6 finance with tax increments generated from the preexisting 211.7 district. Modification of a preexisting plan after August 1, 211.8 2001, to increase tax increment eligible expenses within a 211.9 preexisting district shall not be considered a preexisting 211.10 obligation. 211.11 (e) "Preexisting plan" means a tax increment financing plan 211.12 approved and adopted by an authority prior to August 1, 2001, in 211.13 conjunction with the preexisting district. 211.14[EFFECTIVE DATE.] This section is effective for actions 211.15 taken and resolutions approved after June 30, 2002. 211.16 Sec. 9. [469.1794] [TIF GRANTS; APPROPRIATIONS.] 211.17 Subdivision 1. [TIF GRANTS.] (a) In calendar year 2003 and 211.18 thereafter, the commissioner of revenue shall pay grants to 211.19 municipalities for deficits in tax increment financing districts 211.20 caused by the changes in class rates and the elimination of the 211.21 state-determined general education property tax levy under Laws 211.22 2001, First Special Session chapter 5. Municipalities must 211.23 submit applications for the grants in a form prescribed by the 211.24 commissioner no later than August 1 for grants payable during 211.25 the calendar year. The maximum grant equals the lesser of: 211.26 (1) for taxes payable in the year before the grant is paid, 211.27 the reduction in the tax increment financing district's revenues 211.28 derived from increment resulting from the class rate changes and 211.29 the elimination of the state-determined general education 211.30 property tax levy under Laws 2001, First Special Session chapter 211.31 5; or 211.32 (2) the amount due during the calendar year to pay: 211.33 (i) a preexisting obligation as defined in section 211.34 469.1763, subdivision 6, but excluding the additional amount of 211.35 a preexisting obligation that the municipality elects to include 211.36 under paragraph (f) of that subdivision with respect to a 212.1 preexisting obligation to a developer or property owner in the 212.2 district or an assignee or successor in interest; less 212.3 (ii) the municipality's total tax increments, including 212.4 unspent increments from previous years; 212.5 (iii) the amount of any state aid reductions that would 212.6 have applied to any district in the municipality for the 212.7 calendar year, if Minnesota Statutes 2000, section 273.1399, had 212.8 not been repealed; and 212.9 (iv) the amount of any unpaid local contributions that the 212.10 municipality would have been required to make for the calendar 212.11 year under an election under Minnesota Statutes 2000, section 212.12 273.1399, subdivision 6, if that subdivision had not been 212.13 repealed. 212.14 (b) The commissioner of revenue may require applicants for 212.15 grants under this section to provide any information the 212.16 commissioner deems appropriate. The commissioner shall 212.17 calculate the amount under paragraph (a), clause (2), based on 212.18 the reports for the tax increment financing district or 212.19 districts filed with the state auditor on or before August 1 of 212.20 the year in which the grant is to be paid. 212.21 (c) This subdivision applies only to deficits in tax 212.22 increment districts for which: 212.23 (1) the request for certification of the district, or a 212.24 district transferred under special law, was made before August 212.25 1, 2001; 212.26 (2) all timely reports have been filed with the state 212.27 auditor, as required by section 469.175; and 212.28 (3) the authority and municipality have exercised any 212.29 permitted action under section 469.1792, subdivision 3, to 212.30 increase increments to pay preexisting obligations as defined 212.31 under this section. 212.32 (d) The commissioner shall pay the grants under this 212.33 section by December 26 of the year. 212.34 (e) For the purposes of this section, "tax increments" and 212.35 "revenues derived from tax increments" have the meanings given 212.36 in section 469.174, subdivision 25, except that the definition 213.1 applies to all tax increment districts, regardless of when the 213.2 request for certification was made and regardless of when the 213.3 revenues were received, notwithstanding the effective date of 213.4 section 469.174, subdivision 25. For purposes of this section, 213.5 "bonds" and "binding contracts" do not include interfund loans. 213.6 (f) If the district was authorized or certified pursuant to 213.7 a special law and the special law permitted original tax 213.8 capacity to be reduced to zero, the required dates under 213.9 paragraph (a), clause (2), and paragraph (c), clause (1), are 213.10 extended to December 31, 2001. 213.11 Subd. 2. [APPROPRIATION.] $10,000,000 is appropriated in 213.12 fiscal year 2003 to the commissioner of revenue from the general 213.13 fund to make grants under this section. 213.14 Sec. 10. Minnesota Statutes 2001 Supplement, section 213.15 469.1813, subdivision 6, is amended to read: 213.16 Subd. 6. [DURATION LIMIT.] (a) A political subdivision may 213.17 grant an abatement for a period no longer than ten years, except 213.18 as provided underparagraphparagraphs (b) and (c). The 213.19 subdivision may specify in the abatement resolution a shorter 213.20 duration. If the resolution does not specify a period of time, 213.21 the abatement is for eight years. If an abatement has been 213.22 granted to a parcel of property and the period of the abatement 213.23 has expired, the political subdivision that granted the 213.24 abatement may not grant another abatement for eight years after 213.25 the expiration of the first abatement. This prohibition does 213.26 not apply to improvements added after and not subject to the 213.27 first abatement. 213.28 (b) A political subdivision proposing to abate taxes for a 213.29 parcel may request, in writing, that the other political 213.30 subdivisions in which the parcel is located grant an abatement 213.31 for the property. If one of the other political subdivisions 213.32 declines, in writing, to grant an abatement or if 90 days pass 213.33 after receipt of the request to grant an abatement without a 213.34 written response from one of the political subdivisions, the 213.35 duration limit for an abatement for the parcel by the requesting 213.36 political subdivision and any other participating political 214.1 subdivision is increased to 15 years. If the political 214.2 subdivision which declined to grant an abatement later grants an 214.3 abatement for the parcel, the 15-year duration limit is reduced 214.4 by one year for each year that the declining political 214.5 subdivision grants an abatement for the parcel during the period 214.6 of the abatement granted by the requesting political 214.7 subdivision. The duration limit may not be reduced below the 214.8 limit under paragraph (a). 214.9 (c) For a property that is used in the operation of a 214.10 qualified business, as defined in section 469.193, a political 214.11 subdivision may grant an abatement for a period of up to 20 214.12 years, notwithstanding paragraph (a) or (b). 214.13[EFFECTIVE DATE.] This section is effective for abatement 214.14 resolutions approved after June 30, 2002. 214.15 Sec. 11. [469.193] [DEFINITION OF QUALIFIED BUSINESS.] 214.16 (a) The definition of a "qualified business" in this 214.17 section applies for purposes of section 469.1813, subdivision 6. 214.18 (b) To be a "qualified business," the operations of the 214.19 business that qualify for tax or other state provided incentives 214.20 must be: 214.21 (1) located outside of the metropolitan area, as defined in 214.22 section 473.121, subdivision 2; and 214.23 (2) at least 50 percent of the payroll of the business is 214.24 for employees engaged in one of the following lines of business 214.25 or any combination of them: 214.26 (i) manufacturing; 214.27 (ii) agricultural processing; 214.28 (iii) mining; 214.29 (iv) research and development; 214.30 (v) warehousing; or 214.31 (vi) qualified high technology. 214.32 (c)(1) "Manufacturing" means the material staging and 214.33 production of tangible personal property by procedures commonly 214.34 regarded as manufacturing, processing, fabrication, or 214.35 assembling which changes some existing material into new shapes, 214.36 new qualities, or new combinations. 215.1 (2) "Mining" has the meaning given in section 613(c) of the 215.2 Internal Revenue Code of 1986. 215.3 (3) "Agricultural processing" means transforming, 215.4 packaging, sorting, or grading livestock or livestock products, 215.5 agricultural commodities, or plants or plant products into goods 215.6 that are used for intermediate or final consumption including 215.7 goods for nonfood use. 215.8 (4) "Research and development" means qualified research as 215.9 defined in section 41(d) of the Internal Revenue Code of 1986. 215.10 (5) "Qualified high technology" means one or more of the 215.11 following activities: 215.12 (i) advanced computing, which is any technology used in the 215.13 design and development of any of the following: 215.14 (A) computer hardware and software; 215.15 (B) data communications; and 215.16 (C) information technologies; 215.17 (ii) advanced materials, which are materials with 215.18 engineered properties created through the development of 215.19 specialized process and synthesis technology; 215.20 (iii) biotechnology, which is any technology that uses 215.21 living organisms, cells, macromolecules, microorganisms, or 215.22 substances from living organisms to make or modify a product, 215.23 improve plants or animals, or develop microorganisms for useful 215.24 purposes; 215.25 (iv) electronic device technology, which is any technology 215.26 that involves microelectronics, semiconductors, electronic 215.27 equipment, and instrumentation, radio frequency, microwave, and 215.28 millimeter electronics, and optical and optic-electrical 215.29 devices, or data and digital communications and imaging devices; 215.30 (v) engineering or laboratory testing related to the 215.31 development of a product; 215.32 (vi) technology that assists in the assessment or 215.33 prevention of threats or damage to human health or the 215.34 environment, including, but not limited to, environmental 215.35 cleanup technology, pollution prevention technology, or 215.36 development of alternative energy sources; 216.1 (vii) medical device technology, which is any technology 216.2 that involves medical equipment or products other than a 216.3 pharmaceutical product that has therapeutic or diagnostic value 216.4 and is regulated; or 216.5 (viii) advanced vehicles technology which is any technology 216.6 that involves electric vehicles, hybrid vehicles, or alternative 216.7 fuel vehicles, or components used in the construction of 216.8 electric vehicles, hybrid vehicles, or alternative fuel 216.9 vehicles. An electric vehicle is a road vehicle that draws 216.10 propulsion energy only from an on-board source of electrical 216.11 energy. A hybrid vehicle is a road vehicle that can draw 216.12 propulsion energy from both a consumable fuel and a rechargeable 216.13 energy storage system. 216.14[EFFECTIVE DATE.] This section is effective the day 216.15 following final enactment. 216.16 Sec. 12. Laws 1995, chapter 264, article 5, section 45, 216.17 subdivision 1, as amended by Laws 1996, chapter 471, article 7, 216.18 section 22, and Laws 1997, chapter 231, article 10, section 13, 216.19 is amended to read: 216.20 Subdivision 1. [CREATION OF PROJECTS.] (a) An authority 216.21 may create a housing replacement project under sections 44 to 216.22 47, as provided in this section. 216.23 (b) For the cities of Crystal, Fridley, Richfield, and 216.24 Columbia Heights, the authority may designate up to 50 parcels 216.25 in the city to be included in a housing replacement district. 216.26 No more than ten parcels may be included in year one of the 216.27 district, with up to ten additional parcels added to the 216.28 district in each of the following nine years. For the cities of 216.29 Minneapolis, St. Paul, and Duluth, each authority may designate 216.30up to 100not more than 200 parcels in the city to be included 216.31 in a housing replacement district over the life of the 216.32 district. The only parcels that may be included in a district 216.33 are (1) vacant sites, (2) parcels containing vacant houses, or 216.34 (3) parcels containing houses that are structurally substandard, 216.35 as defined in Minnesota Statutes, section 469.174, subdivision 216.36 10. 217.1 (c) The city in which the authority is located must pay at 217.2 least 25 percent of the housing replacement project costs from 217.3 its general fund, a property tax levy, or other unrestricted 217.4 money, not including tax increments. 217.5 (d) The housing replacement district plan must have as its 217.6 sole object the acquisition of parcels for the purpose of 217.7 preparing the site to be sold for market rate housing. As used 217.8 in this section, "market rate housing" means housing that has a 217.9 market value that does not exceed 150 percent of the average 217.10 market value of single-family housing in that municipality. 217.11 Sec. 13. [CITY OF ALBERT LEA; TAX INCREMENT FINANCING 217.12 DISTRICT.] 217.13 Subdivision 1. [AUTHORIZATION.] The governing body of the 217.14 city of Albert Lea may create a redevelopment tax increment 217.15 financing district as provided in this section. The city or its 217.16 port authority may be the "authority" for the purposes of 217.17 Minnesota Statutes, sections 469.174 to 469.179. 217.18 Subd. 2. [DEFINITIONS.] (a) For the purposes of this 217.19 section, the terms defined in this subdivision have the meanings 217.20 given them. 217.21 (b) "Redevelopment parcel" means the property in the city 217.22 of Albert Lea bounded by Main Street, Garfield Avenue, Front 217.23 Street, the Union Pacific railway line, and Albert Lea lake. 217.24 (c) "Reconstruction parcel" means the property in the city 217.25 of Albert Lea described as lot 1, block 5, Habben First Addition. 217.26 Subd. 3. [SPECIAL RULES.] (a) The district established 217.27 under this section is subject to the provisions of Minnesota 217.28 Statutes, sections 469.174 to 469.179, except as provided in 217.29 this subdivision. 217.30 (b) The district may consist of the redevelopment parcel 217.31 and the reconstruction parcel. 217.32 (c) Minnesota Statutes, section 469.174, subdivision 10, 217.33 paragraph (f), does not apply to the district, and if the city 217.34 finds that the redevelopment parcel meets the criteria described 217.35 in Minnesota Statutes, section 469.174, subdivision 10, 217.36 paragraph (a), clause (1), then both the redevelopment parcel 218.1 and the reconstruction parcel and the district as a whole are 218.2 considered to meet those criteria. 218.3 (d) Expenditures for activities, as defined in Minnesota 218.4 Statutes, section 469.1763, subdivision 1, paragraph (b), 218.5 anywhere within the district are considered costs of correcting 218.6 conditions that allow designation of redevelopment districts 218.7 within the meaning of Minnesota Statutes, section 469.176, 218.8 subdivision 4j. 218.9 (e) For the purposes of Minnesota Statutes, section 218.10 469.1763, subdivision 3, expenditures on the redevelopment 218.11 parcel are considered to have been expended on an activity 218.12 within the district if a qualifying action occurs within ten 218.13 years after certification of the district. 218.14[EFFECTIVE DATE.] This section is effective upon local 218.15 approval in compliance with the requirements of Minnesota 218.16 Statutes, section 645.021. 218.17 Sec. 14. [CITY OF MINNEAPOLIS TAX INCREMENT DISTRICT; 218.18 HAZARDOUS SUBSTANCE SUBDISTRICT ALLOWED; DURATION EXTENSION.] 218.19 (a) Upon approval of the city council of the city of 218.20 Minneapolis, the Minneapolis community development agency may 218.21 take the following actions with respect to the east Hennepin and 218.22 University tax increment district: 218.23 (1) notwithstanding Minnesota Statutes, section 469.176, 218.24 subdivision 1b, extend the duration of the district for a period 218.25 of up to seven years, or until all amounts payable to the 218.26 developers and to the agency to reimburse the agency's provision 218.27 of $1,100,000 of city of Minneapolis HOME funds to assist 218.28 low-income housing are repaid, whichever is shorter; and 218.29 (2) notwithstanding Minnesota Statutes, section 469.175, 218.30 subdivision 7d, create a hazardous substance subdistrict 218.31 encompassing the entire east Hennepin and University tax 218.32 increment district, and continue the subdistrict for the time, 218.33 not to exceed the duration of the underlying district, necessary 218.34 to reimburse the project developers the amount of $950,000 to 218.35 repay the Hennepin county hazardous substance loan funds that 218.36 were loaned to the developers and used for remediation within 219.1 the district. 219.2 (b) Minnesota Statutes, section 469.1782, subdivision 2, 219.3 does not apply to the duration extension under this section. 219.4 (c) This section is effective upon compliance by the 219.5 Minneapolis city council with the requirements of Minnesota 219.6 Statutes, section 645.021. 219.7 Sec. 15. [CITY OF MINNEAPOLIS TAX INCREMENT DISTRICT; 219.8 DURATION EXTENSION.] 219.9 (a) Upon approval of the city council of the city of 219.10 Minneapolis, the Minneapolis community development agency may, 219.11 with respect to the southeast Minneapolis industrial area 219.12 redevelopment area phase 4 tax increment financing district, 219.13 notwithstanding Minnesota Statutes, section 469.176, subdivision 219.14 1b, extend the duration of the district for a period of up to 219.15 six years. 219.16 (b) This section is effective upon compliance by the 219.17 Minneapolis city council with the requirements of Minnesota 219.18 Statutes, section 645.021. 219.19 (c) Upon payment in full of the Minneapolis community 219.20 development agency amended and restated tax increment revenue 219.21 note, in the original face amount of $1,000,000, issued December 219.22 4, 1997, the district shall terminate and the authority granted 219.23 under this section shall terminate. 219.24 (d) Minnesota Statutes, section 469.1782, subdivision 2, 219.25 does not apply to the duration extension under this section. 219.26 Sec. 16. [GRANT TO WASHBURN-CROSBY PROJECT.] 219.27 Notwithstanding the requirements of Minnesota Statutes, 219.28 section 469.1794, the commissioner of revenue shall pay a 219.29 one-time grant of $2,600,000 from the fund established in that 219.30 section for the Washburn-Crosby Mill City Museum project as 219.31 provided under Laws 2001, First Special Session chapter 5, 219.32 article 15, section 39. The grant must be disbursed on July 1, 219.33 2002, from the appropriation under section 9. 219.34 Sec. 17. [RUSHFORD TAX INCREMENT FINANCING EXTENSION.] 219.35 The governing body of the city of Rushford may elect to 219.36 extend the duration of its downtown redevelopment tax increment 220.1 financing district by up to two additional years. The city may 220.2 apply for a grant under Minnesota Statutes, section 469.1799, 220.3 for any deficit that occurs during any year of the district's 220.4 duration, including the extension. 220.5[EFFECTIVE DATE.] This section is effective upon compliance 220.6 with the requirements of Minnesota Statutes, sections 469.1782, 220.7 subdivision 2; and 645.021. 220.8 Sec. 18. [CITY OF WEST ST. PAUL TAX INCREMENT DISTRICT 220.9 EXTENSION.] 220.10 The governing body of the city of West St. Paul may elect 220.11 to extend the duration of its South Robert Street redevelopment 220.12 tax increment financing district by up to five additional years. 220.13[EFFECTIVE DATE.] This section is effective upon approval 220.14 by the governing body of the city of West St. Paul, and 220.15 compliance with Minnesota Statutes, sections 469.1782, 220.16 subdivision 2, and 645.021. 220.17 ARTICLE 18 220.18 GENERAL PUBLIC FINANCE PROVISIONS 220.19 Section 1. Minnesota Statutes 2000, section 117.075, is 220.20 amended to read: 220.21 117.075 [COURT TO APPOINT COMMISSIONERS.] 220.22 Upon proof being filed of the service of such notice, the 220.23 court, at the time and place therein fixed or to which the 220.24 hearing may be adjourned, shall hear all competent evidence 220.25 offered for or against the granting of the petition, regulating 220.26 the order of proof as it may deem best. If the proposed taking 220.27 shall appear to be necessary and such as is authorized by law, 220.28 the court by an order shall appoint three disinterested 220.29 commissioners, and at least two alternates,residents of the220.30county,to ascertain and report the amount of damages that will 220.31 be sustained by the several owners on account of such taking. 220.32 Before appointing a commissioner, the court shall inquire 220.33 whether each prospective commissioner has any relationship, 220.34 business or otherwise, to any of the parties in the proceeding, 220.35 or any interest in the proceeding which may constitute a 220.36 conflict of interest, or which may create the appearance of 221.1 impropriety should that person be appointed. Responses to this 221.2 inquiry must be either written or on the record and made 221.3 available by the court to any party in the proceeding before and 221.4 after appointment. No person who might have difficulty in 221.5 rendering an unbiased decision may be appointed to serve. The 221.6 court, in its discretion, may appoint one registered, practicing 221.7 attorney to the commission who is knowledgeable in eminent 221.8 domain matters. All other commissioners appointed must be 221.9 persons actively engaged in the occupation of real estate sales 221.10 or real estate appraising or persons knowledgeable in real 221.11 estate values. The order shall fix the time and place of the 221.12 first meeting of the three commissioners and prescribe their 221.13 compensation. At the first meeting at the office of the court 221.14 administrator of district court the appointees must be sworn by 221.15 the court administrator or an authorized deputy and shall take 221.16 and sign the following oath before assuming their duties as 221.17 commissioners: 221.18 (TITLE OF PROCEEDING) 221.19 ................................. does swear under penalty 221.20 of perjury as follows: 221.21 I will faithfully and justly perform to the best of my 221.22 ability, all the duties of the office and trust which I now 221.23 assume as commissioner in the above entitled proceeding. I 221.24 further swear that, except as disclosed in writing or on 221.25 the record, I have no interest in any of the lands in the 221.26 above proceeding or any present or past relationship, 221.27 business or personal, with any of the parties to the above 221.28 proceeding or any other actual or potential conflict of 221.29 interest, and that I will render fair and impartial 221.30 decisions, so help me God. 221.31 The order may, in the discretion of the court, limit the 221.32 title or easement to be acquired by the petitioner by defining 221.33 the rights and privileges which the owner of any of the lands 221.34 may exercise therein in subordination to the public uses to 221.35 which it is appropriated. In case any commissioner fails to act 221.36 or fails to meet the qualifications required by this section, 222.1 the court without further notice may appoint another in that 222.2 commissioner's place. 222.3 The court administrator of court in each county shall post 222.4 in the courthouse in a prominent place a notice that a qualified 222.5 person may apply to have the person's name placed upon a list of 222.6 potential commission appointees for eminent domain proceedings. 222.7 The notice must contain the language of the oath which the 222.8 commissioners are required to take upon appointment and shall 222.9 list the other qualifications set forth in this section. The 222.10 court shall give due consideration to the names appearing on the 222.11 list, but is not bound to make appointments from the list. 222.12 Sec. 2. Minnesota Statutes 2000, section 118A.05, 222.13 subdivision 5, is amended to read: 222.14 Subd. 5. [GUARANTEED INVESTMENT CONTRACTS.] Agreements or 222.15 contracts for guaranteed investment contracts may be entered 222.16 into if they are issued or guaranteed by United States 222.17 commercial banks, domestic branches of foreign banks, United 222.18 States insurance companies, or their Canadian subsidiaries. The 222.19 credit quality of the issuer's or guarantor's short- and 222.20 long-term unsecured debt must be rated in one of the two highest 222.21 categories by a nationally recognized rating agency. Agreements 222.22 or contracts for guaranteed investment contracts may also be 222.23 entered into if they are issued or guaranteed by other financial 222.24 institutions whose short- and long-term unsecured debt is rated 222.25 in the highest rating category by a nationally recognized rating 222.26 agency. Should the issuer's or guarantor's credit quality be 222.27 downgraded below "A", the government entity must have withdrawal 222.28 rights. 222.29 Sec. 3. Minnesota Statutes 2000, section 287.01, 222.30 subdivision 3, is amended to read: 222.31 Subd. 3. [DEBT.] "Debt" means the principal amount of an 222.32 obligation to pay money that is secured in whole or in part by a 222.33 mortgage of an interest in real property. An obligation of a 222.34 political subdivision and a loan made with the proceeds of the 222.35 obligation constitute a single debt. 222.36 Sec. 4. Minnesota Statutes 2000, section 373.01, 223.1 subdivision 3, is amended to read: 223.2 Subd. 3. [CAPITAL NOTES.] A county board may, by 223.3 resolution and without referendum, issue capital notes subject 223.4 to the county debt limit to purchase capital equipment useful 223.5 for county purposes that has an expected useful life at least 223.6 equal to the term of the notes. The notes shall be payable in 223.7 not more than five years and shall be issued on terms and in a 223.8 manner the board determines. A tax levy shall be made for 223.9 payment of the principal and interest on the notes, in 223.10 accordance with section 475.61, as in the case of bonds. For 223.11 purposes of this subdivision, "capital equipment" means public 223.12 safety, ambulance, road construction or maintenance, medical, 223.13 and data processing equipment and computer hardware and software. 223.14 Sec. 5. Minnesota Statutes 2000, section 410.32, is 223.15 amended to read: 223.16 410.32 [CITIES AUTHORIZED TO ISSUE CAPITAL NOTES FOR 223.17 CERTAIN EQUIPMENT ACQUISITIONS.] 223.18 Notwithstanding any contrary provision of other law or 223.19 charter, a home rule charter city may, by resolution and without 223.20 public referendum, issue capital notes subject to the city debt 223.21 limit to purchase public safety equipment, ambulance and other 223.22 medical equipment, road construction and maintenance equipment, 223.23 and other capital equipmenthavingand computer software, 223.24 provided such equipment or software has an expected useful life 223.25 at least as long as the term of the notes. The notes shall be 223.26 payable in not more than five years and be issued on terms and 223.27 in the manner the city determines. The total principal amount 223.28 of the capital notes issued in a fiscal year shall not exceed 223.29 0.03 percent of the market value of taxable property in the city 223.30 for that year. A tax levy shall be made for the payment of the 223.31 principal and interest on the notes, in accordance with section 223.32 475.61, as in the case of bonds. Notes issued under this 223.33 section shall require an affirmative vote of two-thirds of the 223.34 governing body of the city. Notwithstanding a contrary 223.35 provision of other law or charter, a home rule charter city may 223.36 also issue capital notes subject to its debt limit in the manner 224.1 and subject to the limitations applicable to statutory cities 224.2 pursuant to section 412.301. 224.3 Sec. 6. Minnesota Statutes 2000, section 412.301, is 224.4 amended to read: 224.5 412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 224.6 The council may issue certificates of indebtedness or 224.7 capital notes subject to the city debt limits to purchase public 224.8 safety equipment, ambulance equipment, road construction or 224.9 maintenance equipment, and other capital equipmenthavingand 224.10 computer software, provided such equipment or software has an 224.11 expected useful life at least as long as the terms of the 224.12 certificates or notes. Such certificates or notes shall be 224.13 payable in not more than five years and shall be issued on such 224.14 terms and in such manner as the council may determine. If the 224.15 amount of the certificates or notes to be issued to finance any 224.16 such purchase exceeds 0.25 percent of the market value of 224.17 taxable property in the city, they shall not be issued for at 224.18 least ten days after publication in the official newspaper of a 224.19 council resolution determining to issue them; and if before the 224.20 end of that time, a petition asking for an election on the 224.21 proposition signed by voters equal to ten percent of the number 224.22 of voters at the last regular municipal election is filed with 224.23 the clerk, such certificates or notes shall not be issued until 224.24 the proposition of their issuance has been approved by a 224.25 majority of the votes cast on the question at a regular or 224.26 special election. A tax levy shall be made for the payment of 224.27 the principal and interest on such certificates or notes, in 224.28 accordance with section 475.61, as in the case of bonds. 224.29 Sec. 7. Minnesota Statutes 2000, section 465.73, is 224.30 amended to read: 224.31 465.73 [TOWN HALLS; FIRE HALLS OR RESCUE EQUIPMENT; LOANS 224.32 TO POLITICAL SUBDIVISIONS.] 224.33 For purposes of constructing, repairing, or acquiring city 224.34 halls, town halls, fire halls or fire or rescue equipmentany, 224.35 or libraries or child care facilities if otherwise authorized by 224.36 law, a city, county, or town may borrowupnot to 225.1$250,000exceed $450,000 from (i) funds granted to a rural 225.2 electric cooperative organized under chapter 308A by,the United 225.3 States Department of Agriculture Rural Business-Cooperative 225.4 Service or (ii) directly from or in the form of funds guaranteed 225.5 by theFarmers Home AdministrationRural Housing Service or 225.6 other agency of the United States Department of Agricultureon225.7 by a note secured by a mortgage or other security agreement on 225.8 the property purchased with the borrowed funds. The city, 225.9 county, or town may pledge its full faith and credit and assign 225.10 or pledge the revenues, if any, from thetown halls, fire or225.11rescue department, or fire hall orfacilities or equipment so 225.12 financed together with any other properly available funds,225.13including taxes levied pursuant to section 475.61 to the Farmers225.14Home Administration or other agency of the United States225.15Department of Agriculture or its guaranteed lender or a rural225.16electric cooperative organized under chapter 308A as its grantee225.17to repayto secure the loan. Theamount of the obligation shall225.18not beobligation of the note is not to be included when 225.19 computing the net debt of the city, county, or town. An225.20election shall not be required to authorize the note and225.21mortgage or assignment of revenues, nor is the approval of the 225.22 voters required for the issuance of the note. 225.23 Sec. 8. Minnesota Statutes 2000, section 469.012, 225.24 subdivision 1, is amended to read: 225.25 Subdivision 1. [SCHEDULE OF POWERS.] An authority shall be 225.26 a public body corporate and politic and shall have all the 225.27 powers necessary or convenient to carry out the purposes of 225.28 sections 469.001 to 469.047, except that the power to levy and 225.29 collect taxes or special assessments is limited to the power 225.30 provided in sections 469.027 to 469.033. Its powers include the 225.31 following powers in addition to others granted in sections 225.32 469.001 to 469.047: 225.33 (1) to sue and be sued; to have a seal, which shall be 225.34 judicially noticed, and to alter it; to have perpetual 225.35 succession; and to make, amend, and repeal rules consistent with 225.36 sections 469.001 to 469.047; 226.1 (2) to employ an executive director, technical experts, and 226.2 officers, agents, and employees, permanent and temporary, that 226.3 it requires, and determine their qualifications, duties, and 226.4 compensation; for legal services it requires, to call upon the 226.5 chief law officer of the city or to employ its own counsel and 226.6 legal staff; so far as practicable, to use the services of local 226.7 public bodies in its area of operation, provided that those 226.8 local public bodies, if requested, shall make the services 226.9 available; 226.10 (3) to delegate to one or more of its agents or employees 226.11 the powers or duties it deems proper; 226.12 (4) within its area of operation, to undertake, prepare, 226.13 carry out, and operate projects and to provide for the 226.14 construction, reconstruction, improvement, extension, 226.15 alteration, or repair of any project or part thereof; 226.16 (5) subject to the provisions of section 469.026, to give, 226.17 sell, transfer, convey, or otherwise dispose of real or personal 226.18 property or any interest therein and to execute leases, deeds, 226.19 conveyances, negotiable instruments, purchase agreements, and 226.20 other contracts or instruments, and take action that is 226.21 necessary or convenient to carry out the purposes of these 226.22 sections; 226.23 (6) within its area of operation, to acquire real or 226.24 personal property or any interest therein by gifts, grant, 226.25 purchase, exchange, lease, transfer, bequest, devise, or 226.26 otherwise, and by the exercise of the power of eminent domain, 226.27 in the manner provided by chapter 117, to acquire real property 226.28 which it may deem necessary for its purposes, after the adoption 226.29 by it of a resolution declaring that the acquisition of the real 226.30 property is necessary to eliminate one or more of the conditions 226.31 found to exist in the resolution adopted pursuant to section 226.32 469.003 or to provide decent, safe, and sanitary housing for 226.33 persons of low and moderate income, or is necessary to carry out 226.34 a redevelopment project. Real property needed or convenient for 226.35 a project may be acquired by the authority for the project by 226.36 condemnation pursuant to this section.This includesPrior to 227.1 adoption of a resolution authorizing acquisition of property by 227.2 condemnation, the governing body of the authority must hold a 227.3 public hearing on the proposed acquisition after published 227.4 notice in a newspaper of general circulation in the 227.5 municipality, which must be made at least one time not less than 227.6 ten days nor more than 30 days prior to the date of the 227.7 hearing. The notice must reasonably describe the property to be 227.8 acquired and state that the purpose of the hearing is to 227.9 consider acquisition by exercise of the authority's powers of 227.10 eminent domain. Not less than ten days before the hearing, 227.11 notice of the hearing must also be mailed to the owner of each 227.12 parcel proposed to be acquired, but failure to give mailed 227.13 notice or any defects in the notice does not invalidate the 227.14 acquisition. For the purpose of giving mailed notice, owners 227.15 are determined in accordance with section 429.031, subdivision 227.16 1, paragraph (a). Property acquired by condemnation under this 227.17 section may include any property devoted to a public use, 227.18 whether or not held in trust, notwithstanding that the property 227.19 may have been previously acquired by condemnation or is owned by 227.20 a public utility corporation, because the public use in 227.21 conformity with the provisions of sections 469.001 to 469.047 227.22 shall be deemed a superior public use. Property devoted to a 227.23 public use may be so acquired only if the governing body of the 227.24 municipality has approved its acquisition by the authority. An 227.25 award of compensation shall not be increased by reason of any 227.26 increase in the value of the real property caused by the 227.27 assembly, clearance or reconstruction, or proposed assembly, 227.28 clearance or reconstruction for the purposes of sections 469.001 227.29 to 469.047 of the real property in an area; 227.30 (7) within its area of operation, and without the adoption 227.31 of an urban renewal plan, to acquire, by all means as set forth 227.32 in clause (6) but without the adoption of a resolution provided 227.33 for in clause (6), real property, and to demolish, remove, 227.34 rehabilitate, or reconstruct the buildings and improvements or 227.35 construct new buildings and improvements thereon, or to so 227.36 provide through other means as set forth in Laws 1974, chapter 228.1 228, or to grade, fill, and construct foundations or otherwise 228.2 prepare the site for improvements. The authority may dispose of 228.3 the property pursuant to section 469.029, provided that the 228.4 provisions of section 469.029 requiring conformance to an urban 228.5 renewal plan shall not apply. The authority may finance these 228.6 activities by means of the redevelopment project fund or by 228.7 means of tax increments or tax increment bonds or by the methods 228.8 of financing provided for in section 469.033 or by means of 228.9 contributions from the municipality provided for in section 228.10 469.041, clause (9), or by any combination of those means. Real 228.11 property with buildings or improvements thereon shall only be 228.12 acquired under this clause when the buildings or improvements 228.13 are substandard. The exercise of the power of eminent domain 228.14 under this clause shall be limited to real property which 228.15 contains, or has contained within the three years immediately 228.16 preceding the exercise of the power of eminent domain and is 228.17 currently vacant, buildings and improvements which are vacated 228.18 and substandard. Notwithstanding the prior sentence, in cities 228.19 of the first class the exercise of the power of eminent domain 228.20 under this clause shall be limited to real property which 228.21 contains, or has contained within the three years immediately 228.22 preceding the exercise of the power of eminent domain, buildings 228.23 and improvements which are substandard. For the purpose of this 228.24 clause, substandard buildings or improvements mean hazardous 228.25 buildings as defined in section 463.15, subdivision 3, or 228.26 buildings or improvements that are dilapidated or obsolescent, 228.27 faultily designed, lack adequate ventilation, light, or sanitary 228.28 facilities, or any combination of these or other factors that 228.29 are detrimental to the safety or health of the community. The 228.30 exercise of the power of eminent domain under this clause is 228.31 subject to the notice and hearing requirements described in 228.32 clause (6); 228.33 (8) within its area of operation, to determine the level of 228.34 income constituting low or moderate family income. The 228.35 authority may establish various income levels for various family 228.36 sizes. In making its determination, the authority may consider 229.1 income levels that may be established by the Department of 229.2 Housing and Urban Development or a similar or successor federal 229.3 agency for the purpose of federal loan guarantees or subsidies 229.4 for persons of low or moderate income. The authority may use 229.5 that determination as a basis for the maximum amount of income 229.6 for admissions to housing development projects or housing 229.7 projects owned or operated by it; 229.8 (9) to provide in federally assisted projects any 229.9 relocation payments and assistance necessary to comply with the 229.10 requirements of the Federal Uniform Relocation Assistance and 229.11 Real Property Acquisition Policies Act of 1970, and any 229.12 amendments or supplements thereto; 229.13 (10) to make an agreement with the governing body or bodies 229.14 creating the authority which provides exemption from all ad 229.15 valorem real and personal property taxes levied or imposed by 229.16 the body or bodies creating the authority. In the case of 229.17 low-rent public housing that received financial assistance under 229.18 the United States Housing Act of 1937, or successor federal 229.19 legislation, an authority may make an agreement with the 229.20 governing body or bodies creating the authority to provide 229.21 exemption from all real and personal property taxes levied or 229.22 imposed by the state, city, county, or other political 229.23 subdivision, for which the authority shall make payments in lieu 229.24 of taxes to the state, city, county, or other political 229.25 subdivisions as provided in section 469.040. The governing body 229.26 shall agree on behalf of all the applicable governing bodies 229.27 affected that local cooperation as required by the federal 229.28 government shall be provided by the local governing body or 229.29 bodies in whose jurisdiction the project is to be located, at no 229.30 cost or at no greater cost than the same public services and 229.31 facilities furnished to other residents; 229.32 (11) to cooperate with or act as agent for the federal 229.33 government, the state or any state public body, or any agency or 229.34 instrumentality of the foregoing, in carrying out any of the 229.35 provisions of sections 469.001 to 469.047 or of any other 229.36 related federal, state, or local legislation; and upon the 230.1 consent of the governing body of the city to purchase, lease, 230.2 manage, or otherwise take over any housing project already owned 230.3 and operated by the federal government; 230.4 (12) to make plans for carrying out a program of voluntary 230.5 repair and rehabilitation of buildings and improvements, and 230.6 plans for the enforcement of laws, codes, and regulations 230.7 relating to the use of land and the use and occupancy of 230.8 buildings and improvements, and to the compulsory repair, 230.9 rehabilitation, demolition, or removal of buildings and 230.10 improvements. The authority may develop, test, and report 230.11 methods and techniques, and carry out demonstrations and other 230.12 activities for the prevention and elimination of slums and 230.13 blight; 230.14 (13) to borrow money or other property and accept 230.15 contributions, grants, gifts, services, or other assistance from 230.16 the federal government, the state government, state public 230.17 bodies, or from any other public or private sources; 230.18 (14) to include in any contract for financial assistance 230.19 with the federal government any conditions that the federal 230.20 government may attach to its financial aid of a project, not 230.21 inconsistent with purposes of sections 469.001 to 469.047, 230.22 including obligating itself (which obligation shall be 230.23 specifically enforceable and not constitute a mortgage, 230.24 notwithstanding any other laws) to convey to the federal 230.25 government the project to which the contract relates upon the 230.26 occurrence of a substantial default with respect to the 230.27 covenants or conditions to which the authority is subject; to 230.28 provide in the contract that, in case of such conveyance, the 230.29 federal government may complete, operate, manage, lease, convey, 230.30 or otherwise deal with the project until the defaults are cured 230.31 if the federal government agrees in the contract to reconvey to 230.32 the authority the project as then constituted when the defaults 230.33 have been cured; 230.34 (15) to issue bonds for any of its corporate purposes and 230.35 to secure the bonds by mortgages upon property held or to be 230.36 held by it or by pledge of its revenues, including grants or 231.1 contributions; 231.2 (16) to invest any funds held in reserves or sinking funds, 231.3 or any funds not required for immediate disbursement, in 231.4 property or securities in which savings banks may legally invest 231.5 funds subject to their control or in the manner and subject to 231.6 the conditions provided in section 118A.04 for the deposit and 231.7 investment of public funds; 231.8 (17) within its area of operation, to determine where 231.9 blight exists or where there is unsafe, unsanitary, or 231.10 overcrowded housing; 231.11 (18) to carry out studies of the housing and redevelopment 231.12 needs within its area of operation and of the meeting of those 231.13 needs. This includes study of data on population and family 231.14 groups and their distribution according to income groups, the 231.15 amount and quality of available housing and its distribution 231.16 according to rentals and sales prices, employment, wages, 231.17 desirable patterns for land use and community growth, and other 231.18 factors affecting the local housing and redevelopment needs and 231.19 the meeting of those needs; to make the results of those studies 231.20 and analyses available to the public and to building, housing, 231.21 and supply industries; 231.22 (19) if a local public body does not have a planning agency 231.23 or the planning agency has not produced a comprehensive or 231.24 general community development plan, to make or cause to be made 231.25 a plan to be used as a guide in the more detailed planning of 231.26 housing and redevelopment areas; 231.27 (20) to lease or rent any dwellings, accommodations, lands, 231.28 buildings, structures, or facilities included in any project 231.29 and, subject to the limitations contained in sections 469.001 to 231.30 469.047 with respect to the rental of dwellings in housing 231.31 projects, to establish and revise the rents or charges therefor; 231.32 (21) to own, hold, and improve real or personal property 231.33 and to sell, lease, exchange, transfer, assign, pledge, or 231.34 dispose of any real or personal property or any interest 231.35 therein; 231.36 (22) to insure or provide for the insurance of any real or 232.1 personal property or operations of the authority against any 232.2 risks or hazards; 232.3 (23) to procure or agree to the procurement of government 232.4 insurance or guarantees of the payment of any bonds or parts 232.5 thereof issued by an authority and to pay premiums on the 232.6 insurance; 232.7 (24) to make expenditures necessary to carry out the 232.8 purposes of sections 469.001 to 469.047; 232.9 (25) to enter into an agreement or agreements with any 232.10 state public body to provide informational service and 232.11 relocation assistance to families, individuals, business 232.12 concerns, and nonprofit organizations displaced or to be 232.13 displaced by the activities of any state public body; 232.14 (26) to compile and maintain a catalog of all vacant, open 232.15 and undeveloped land, or land which contains substandard 232.16 buildings and improvements as that term is defined in clause 232.17 (7), that is owned or controlled by the authority or by the 232.18 governing body within its area of operation and to compile and 232.19 maintain a catalog of all authority owned real property that is 232.20 in excess of the foreseeable needs of the authority, in order to 232.21 determine and recommend if the real property compiled in either 232.22 catalog is appropriate for disposal pursuant to the provisions 232.23 of section 469.029, subdivisions 9 and 10; 232.24 (27) to recommend to the city concerning the enforcement of 232.25 the applicable health, housing, building, fire prevention, and 232.26 housing maintenance code requirements as they relate to 232.27 residential dwelling structures that are being rehabilitated by 232.28 low- or moderate-income persons pursuant to section 469.029, 232.29 subdivision 9, for the period of time necessary to complete the 232.30 rehabilitation, as determined by the authority; 232.31 (28) to recommend to the city the initiation of municipal 232.32 powers, against certain real properties, relating to repair, 232.33 closing, condemnation, or demolition of unsafe, unsanitary, 232.34 hazardous, and unfit buildings, as provided in section 469.041, 232.35 clause (5); 232.36 (29) to sell, at private or public sale, at the price or 233.1 prices determined by the authority, any note, mortgage, lease, 233.2 sublease, lease purchase, or other instrument or obligation 233.3 evidencing or securing a loan made for the purpose of economic 233.4 development, job creation, redevelopment, or community 233.5 revitalization by a public agency to a business, for-profit or 233.6 nonprofit organization, or an individual; 233.7 (30) within its area of operation, to acquire and sell real 233.8 property that is benefited by federal housing assistance 233.9 payments, other rental subsidies, interest reduction payments, 233.10 or interest reduction contracts for the purpose of preserving 233.11 the affordability of low- and moderate-income multifamily 233.12 housing; 233.13 (31) to apply for, enter into contracts with the federal 233.14 government, administer, and carry out a section 8 program. 233.15 Authorization by the governing body creating the authority to 233.16 administer the program at the authority's initial application is 233.17 sufficient to authorize operation of the program in its area of 233.18 operation for which it was created without additional local 233.19 governing body approval. Approval by the governing body or 233.20 bodies creating the authority constitutes approval of a housing 233.21 program for purposes of any special or general law requiring 233.22 local approval of section 8 programs undertaken by city, county, 233.23 or multicounty authorities; and 233.24 (32) to secure a mortgage or loan for a rental housing 233.25 project by obtaining the appointment of receivers or assignments 233.26 of rents and profits under sections 559.17 and 576.01, except 233.27 that the limitation relating to the minimum amounts of the 233.28 original principal balances of mortgages specified in sections 233.29 559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 233.30 does not apply. 233.31 Sec. 9. Minnesota Statutes 2000, section 469.034, 233.32 subdivision 2, is amended to read: 233.33 Subd. 2. [GENERAL OBLIGATION REVENUE BONDS.] (a) An 233.34 authority may pledge the general obligation of the general 233.35 jurisdiction governmental unit as additional security for bonds 233.36 payable from income or revenues of the project or the 234.1 authority. The authority must find that the pledged revenues 234.2 will equal or exceed 110 percent of the principal and interest 234.3 due on the bonds for each year. The proceeds of the bonds must 234.4 be used for a qualified housing development project or 234.5 projects. The obligations must be issued and sold in the manner 234.6 and following the procedures provided by chapter 475, except the 234.7 obligations are not subject to approval by the electors and the 234.8 maturities may extend to not more than 30 years from the 234.9 estimated date of completion. The authority is the municipality 234.10 for purposes of chapter 475. 234.11 (b) The principal amount of the issue must be approved by 234.12 the governing body of the general jurisdiction governmental unit 234.13 whose general obligation is pledged. Public hearings must be 234.14 held on issuance of the obligations by both the authority and 234.15 the general jurisdiction governmental unit. The hearings must 234.16 be held at least 15 days, but not more than 120 days, before the 234.17 sale of the obligations. 234.18 (c) The maximum amount of general obligation bonds that may 234.19 be issued and outstanding under this section equals the greater 234.20 of (1) one-half of one percent of the taxable market value of 234.21 the general jurisdiction governmental unit whose general 234.22 obligation which includes a tax on property is pledged, or (2) 234.23 $3,000,000. In the case of county or multicounty general 234.24 obligation bonds, the outstanding general obligation bonds of 234.25 all cities in the county or counties issued under this 234.26 subdivision must be added in calculating the limit under clause 234.27 (1). 234.28 (d) "General jurisdiction governmental unit" means the city 234.29 in which the housing development project is located. In the 234.30 case of a county or multicounty authority, the county or 234.31 counties may act as the general jurisdiction governmental unit. 234.32 In the case of a multicounty authority, the pledge of the 234.33 general obligation is a pledge of a tax on the taxable property 234.34 in each of the counties. 234.35 (e) "Qualified housing development project" means a housing 234.36 development project providing housing either for the elderly or 235.1 for individuals and families with incomes not greater than 80 235.2 percent of the median family income as estimated by the United 235.3 States Department of Housing and Urban Development for the 235.4 standard metropolitan statistical area or the nonmetropolitan 235.5 county in which the project is located, and will be owned by the 235.6 authority for the term of the bonds. A qualified housing 235.7 development project may admit nonelderly individuals and 235.8 families with higher incomes if: 235.9 (1) three years have passed since initial occupancy; 235.10 (2) the authority finds the project is experiencing 235.11 unanticipated vacancies resulting in insufficient revenues, 235.12 because of changes in population or other unforeseen 235.13 circumstances that occurred after the initial finding of 235.14 adequate revenues; and 235.15 (3) the authority finds a tax levy or payment from general 235.16 assets of the general jurisdiction governmental unit will be 235.17 necessary to pay debt service on the bonds if higher income 235.18 individuals or families are not admitted. 235.19 Sec. 10. Minnesota Statutes 2000, section 469.102, 235.20 subdivision 2, is amended to read: 235.21 Subd. 2. [DETAIL; MATURITY.] The authority with the 235.22 consent of its city's council shall set the date, denominations, 235.23 place of payment, form, and details of the bonds. The bonds 235.24 must mature serially. The first installment is due in not more 235.25 than three years and the last in not more than2030 years from 235.26 the date of issuance. 235.27 Sec. 11. Minnesota Statutes 2000, section 469.153, is 235.28 amended by adding a subdivision to read: 235.29 Subd. 13. [RELATED PUBLIC IMPROVEMENTS.] "Related public 235.30 improvements" means any public improvements described in section 235.31 429.021, that are acquired and constructed in connection with 235.32 the project and are financed by the contracting party under the 235.33 revenue agreement. 235.34 Sec. 12. Minnesota Statutes 2000, section 469.155, 235.35 subdivision 3, is amended to read: 235.36 Subd. 3. [REVENUE BONDS.] (a) It may issue revenue bonds, 236.1 in anticipation of the collection of revenues of a project to be 236.2 situated within the state, to finance, in whole or in part, the 236.3 cost of the acquisition, construction, reconstruction, 236.4 improvement, betterment, or extension thereof and of any related 236.5 public improvements. 236.6 (b) It may issue revenue bonds to purchase the obligations 236.7 of local government units located in whole or in part within the 236.8 boundaries of the municipality. The proceeds of bonds issued to 236.9 purchase obligations as provided under this paragraph may be 236.10 disbursed or otherwise used to pay underwriter's or placement 236.11 fees, expenses, or other costs of issuance and sale for the 236.12 bonds only on a pro rata basis determined with respect to the 236.13 portion of the proceeds that are used to purchase the 236.14 obligations. The municipality may not pay the underwriter's or 236.15 placement fees, expenses, or other costs of issuance and sale 236.16 out of other money. 236.17 Sec. 13. Minnesota Statutes 2000, section 469.155, 236.18 subdivision 4, is amended to read: 236.19 Subd. 4. [REFINANCING NONPROFIT FACILITIES.] It may issue 236.20 revenue bonds to pay, purchase, or discharge all or any part of 236.21 the outstanding indebtedness of a contracting party that is an 236.22 organization described in section 501(c)(3) of the Internal 236.23 Revenue Codeprimarily engaged in health care-related activities236.24or in activities for mentally or physically disabled persons or236.25that is engaged primarily in the operation of one or more236.26nonprofit hospitals or nursing homespreviously incurred in the 236.27 acquisition or betterment of its existing facilities to the 236.28 extent deemed necessary by the governing body of the 236.29 municipality or redevelopment agency; this may include any 236.30 unpaid interest on the indebtedness accrued or to accrue to the 236.31 date on which the indebtedness is finally paid, and any premium 236.32 the governing body of the municipality or redevelopment agency 236.33 determines to be necessary to be paid to pay, purchase, or 236.34 defease the outstanding indebtedness. If revenue bonds are 236.35 issued for this purpose, the refinancing and the existing 236.36 properties of the contracting party shall be deemed to 237.1 constitute a project under section 469.153, subdivision 2, 237.2 clause (b), (c), or (d). 237.3 Sec. 14. Minnesota Statutes 2000, section 469.155, 237.4 subdivision 8, is amended to read: 237.5 Subd. 8. [IMPLEMENTATION OF POWERS AND COVENANTS; 237.6 CONSTRUCTION AND ACQUISITION BY CONTRACTING PARTY.] It may make 237.7 all contracts, execute all instruments, and do all things 237.8 necessary or convenient in the exercise of the powers granted in 237.9 sections 469.152 to 469.165, or in the performance of its 237.10 covenants or duties, or in order to secure the payment of its 237.11 bonds. It may enter into a revenue agreement authorizing the 237.12 contracting party, subject to any terms and conditions the 237.13 municipality or redevelopment agency finds necessary or 237.14 desirable and proper, to provide for the construction, 237.15 acquisition, and installation of the buildings, improvements, 237.16 and equipment to be included in the project and any related 237.17 public improvements by any means legally available to the 237.18 contracting party and in the manner determined by the 237.19 contracting party and without advertisement for bids unless 237.20 advertisement by the contracting party is otherwise required by 237.21 law. 237.22 Sec. 15. Minnesota Statutes 2000, section 469.157, is 237.23 amended to read: 237.24 469.157 [DETERMINATION OF COST OF PROJECT.] 237.25 In determining the cost of a project, the governing body 237.26 may include all cost and estimated cost of the acquisition, 237.27 construction, reconstruction, improvement, betterment, and 237.28 extension of the project and any related public improvements, 237.29 all engineering, inspection, fiscal, legal, administrative, and 237.30 printing expense, the interest which it is estimated will accrue 237.31 during the construction period and for six months thereafter on 237.32 money borrowed or which it is estimated will be borrowed 237.33 pursuant to sections 469.152 to 469.165, working capital for the 237.34 project not to exceed five percent of bond proceeds, and bond 237.35 reserves and premiums for insurance of lease rentals pledged to 237.36 pay the bonds. 238.1 Sec. 16. Minnesota Statutes 2000, section 473.251, is 238.2 amended to read: 238.3 473.251 [METROPOLITAN LIVABLE COMMUNITIES FUND.] 238.4 The metropolitan livable communities fund is created and 238.5 consists of the following accounts: 238.6 (1) the tax base revitalization account; 238.7 (2) the livable communities demonstration account; 238.8 (3) the local housing incentives account;and238.9 (4) the inclusionary housing account; and 238.10 (5) the redevelopment revolving loan account. 238.11 Sec. 17. Minnesota Statutes 2000, section 473.252, 238.12 subdivision 3, is amended to read: 238.13 Subd. 3. [DISTRIBUTION OF FUNDS.] (a) The council must use 238.14 the funds in the account to make grants to municipalities or 238.15 development authorities for the cleanup of polluted land in the 238.16 metropolitan area. A grant to a metropolitan county or a 238.17 development authority must be used for a project in a 238.18 participating municipality. The council shall prescribe and 238.19 provide the grant application form to municipalities. The 238.20 council must consider the probability of funding from other 238.21 sources when making grants under this section. 238.22 (b)(1) The legislature expects that applications for grants 238.23 will exceed the available funds and the council will be able to 238.24 provide grants to only some of the applicant municipalities. If 238.25 applications for grants for qualified sites exceed the available 238.26 funds, the council shall make grants that provide the highest 238.27 return in public benefits for the public costs incurred, that 238.28 encouragecommercial and industrialdevelopment that will lead 238.29 to the preservation or growth of living-wage jobs or the 238.30 production of affordable housing, and that enhance the tax base 238.31 of the recipient municipality. 238.32 (2) In making grants, the council shall establish regular 238.33 application deadlines in which grants will be awarded from the 238.34 available money in the account. If the council provides for 238.35 application cycles of less than six-month intervals, the council 238.36 must reserve at least 40 percent of the receipts of the account 239.1 for a year for application deadlines that occur in the second 239.2 half of the year. If the applications for grants exceed the 239.3 available funds for an application cycle, no more than one-half 239.4 of the funds may be granted to projects in a statutory or home 239.5 rule charter city and no more than three-quarters of the funds 239.6 may be granted to projects located in cities of the first class. 239.7 (c) A municipality may use the grant to provide a portion 239.8 of the local match requirement for project costs that qualify 239.9 for a grant under sections 116J.551 to 116J.557. 239.10 Sec. 18. [473.256] [REDEVELOPMENT REVOLVING LOAN PROGRAM.] 239.11 Subdivision 1. [DEFINITIONS.] (a) For the purpose of this 239.12 section, "municipality" means a statutory or home rule charter 239.13 city or town participating in the local housing incentives 239.14 program under section 473.254, or a county in the metropolitan 239.15 area. 239.16 (b) For the purpose of this section, "development authority" 239.17 means a housing and redevelopment authority, economic 239.18 development authority, or a port authority in the metropolitan 239.19 area. 239.20 Subd. 2. [SOURCES OF FUNDS.] The council must credit to 239.21 the redevelopment revolving loan account established in section 239.22 473.251: 239.23 (1) gifts or grants from private or public entities given 239.24 for the purposes of this section; 239.25 (2) any money appropriated to the council specifically for 239.26 the purposes of the redevelopment revolving loan account; 239.27 (3) all money paid to the council by recipients of loans, 239.28 and all interest on proceeds and payments; 239.29 (4) loans of available funds held by the council for other 239.30 purposes, provided that such loans meet the conditions in 239.31 subdivision 4; and 239.32 (5) the proceeds of any property tax levy made pursuant to 239.33 the provisions of subdivision 4, paragraph (b). 239.34 Subd. 3. [DISTRIBUTION OF FUNDS.] (a) The council must use 239.35 the funds in the account to make repayments of amounts loaned to 239.36 the account under subdivision 4 and to make loans to 240.1 municipalities or development authorities for projects which 240.2 have a reasonable probability of resulting in lower housing 240.3 costs in the metropolitan area. Eligible projects include, 240.4 without limitation, those which support housing production and 240.5 ensure integration of land use and transportation needs in 240.6 development of the community. A loan to a metropolitan county 240.7 or a development authority must be used for a project in a 240.8 statutory or home rule charter city or town participating in the 240.9 local housing incentives program under section 473.254. The 240.10 council must prescribe and provide the loan application form to 240.11 municipalities and development authorities. 240.12 (b) Loans from the redevelopment revolving loan account 240.13 must be made under terms and conditions determined by the 240.14 council, but including at least the following: 240.15 (1) loans must be made at an interest rate comparable to 240.16 that which would be earned by funds invested by the council; and 240.17 (2) loans must be secured at a minimum by either: 240.18 (i) a pledge of the full faith and credit of the 240.19 municipality in which the project is located; or 240.20 (ii) a pledge of other properties or assets of the types, 240.21 and in the amounts, that is satisfactory to the council. 240.22 (c) The council may require the local governmental unit to 240.23 provide matching funds in a percentage determined by the council. 240.24 Subd. 4. [LOANS FROM AVAILABLE FUNDS.] (a) The council is 240.25 authorized to loan to the redevelopment revolving loan account 240.26 any available funds held by the council for other purposes but 240.27 only in such a manner as to ensure full repayment of principal 240.28 and interest to the source fund. Loans of the funds must be 240.29 under terms and conditions determined by the council, but 240.30 including at least the following: 240.31 (1) not more than $50,000,000 of the funds must be on loan 240.32 to the redevelopment revolving loan account at any time; 240.33 (2) the schedule for repayment of loaned funds must be 240.34 structured in such a manner that funds will be available at the 240.35 times required by the source program; and 240.36 (3) money loaned to the redevelopment revolving loan 241.1 account must bear interest at an amount comparable to that which 241.2 would be earned by the source funds if invested in accordance 241.3 with the council's regular investment strategy. 241.4 (b) In the event of any shortfall or default in repayment 241.5 of principal and interest on loans to the redevelopment 241.6 revolving loan account as they become due, the council is 241.7 required to levy a tax on all taxable property in the 241.8 metropolitan area to provide sufficient funds to make up the 241.9 shortfall or default. This tax must be certified, levied, and 241.10 collected in the manner provided by section 473.13. The tax is 241.11 in addition to that authorized by section 473.249, and any other 241.12 law and does not affect the amount or rate of taxes which may be 241.13 levied by the council or any metropolitan agency or local 241.14 governmental unit. 241.15 Sec. 19. Minnesota Statutes 2000, section 473.39, is 241.16 amended by adding a subdivision to read: 241.17 Subd. 1i. [OBLIGATIONS.] After July 1, 2002, in addition 241.18 to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, and 1h, 241.19 the council may issue certificates of indebtedness, bonds, or 241.20 other obligations under this section for capital expenditures as 241.21 prescribed in the council's regional transit master plan and 241.22 transit capital improvement program and for related costs, 241.23 including the costs of issuance and sale of the obligations. 241.24 The amount of the obligations issued under this subdivision in 241.25 any year must not exceed an amount equal to the following 241.26 limitations, except as provided in this subdivision: 241.27 (1) for 2003, the limitation is $50,000,000; and 241.28 (2) for each subsequent year, the limitation is equal to 241.29 the last year's limitation calculated under this subdivision 241.30 adjusted for inflation using the United States Department of 241.31 Labor's Bureau of Labor Statistics Minneapolis-St. Paul Consumer 241.32 Price Index for All Urban Consumers (CPI-U) for the last 241.33 taxes-payable year. For any year in which the council does not 241.34 issue obligations totaling the limitation calculated under this 241.35 subdivision, the remaining available limitation amount may be 241.36 carried forward to later years. The council may issue 242.1 obligations in a carry-forward year in an amount exceeding the 242.2 annual limitation for that year by the limitation amount carried 242.3 forward, but the limitation amount carried forward is not a 242.4 permanent increase in the annual limitation calculated under 242.5 this subdivision. 242.6 Sec. 20. Minnesota Statutes 2001 Supplement, section 242.7 475.58, subdivision 1, is amended to read: 242.8 Subdivision 1. [APPROVAL BY ELECTORS; EXCEPTIONS.] 242.9 Obligations authorized by law or charter may be issued by any 242.10 municipality upon obtaining the approval of a majority of the 242.11 electors voting on the question of issuing the obligations, but 242.12 an election shall not be required to authorize obligations 242.13 issued: 242.14 (1) to pay any unpaid judgment against the municipality; 242.15 (2) for refunding obligations; 242.16 (3) for an improvement or improvement program, which 242.17 obligation is payable wholly or partly from the proceeds of 242.18 special assessments levied upon property specially benefited by 242.19 the improvement or by an improvement within the improvement 242.20 program, or of taxes levied upon the increased value of property 242.21 within a district for the development of which the improvement 242.22 is undertaken, including obligations which are the general 242.23 obligations of the municipality, if the municipality is entitled 242.24 to reimbursement in whole or in part from the proceeds of such 242.25 special assessments or taxes and not less than 20 percent of the 242.26 cost of the improvement or the improvement program is to be 242.27 assessed against benefited property or is to be paid from the 242.28 proceeds of federal grant funds or a combination thereof, or is 242.29 estimated to be received from such taxes within the district; 242.30 (4) payable wholly from the income of revenue producing 242.31 conveniences; 242.32 (5) under the provisions of a home rule charter which 242.33 permits the issuance of obligations of the municipality without 242.34 election; 242.35 (6) under the provisions of a law which permits the 242.36 issuance of obligations of a municipality without an election; 243.1 (7) to fund pension or retirement fund liabilities pursuant 243.2 to section 475.52, subdivision 6; 243.3 (8) under a capital improvement plan under section 373.40; 243.4and243.5 (9) under sections 469.1813 to 469.1815 (property tax 243.6 abatement authority bonds), if the proceeds of the bonds are not243.7used for a purpose prohibited under section 469.176, subdivision243.84g, paragraph (b); and 243.9 (10) to pay for reconstruction of streets if special 243.10 assessments were levied to pay all or a portion of the initial 243.11 costs of such streets. 243.12 Sec. 21. Minnesota Statutes 2000, section 475.67, 243.13 subdivision 13, is amended to read: 243.14 Subd. 13. [CROSSOVER REFUNDING OBLIGATIONS.] Crossover 243.15 refunding obligations may be issued by a municipality without 243.16 regard to the limitations in subdivisions 4 to 10. The proceeds 243.17 of crossover refunding obligations, less any proceeds applied to 243.18 payment of the costs of their issuance, shall be deposited in a 243.19 debt service fund irrevocably appropriated to the payment of 243.20 principal of and interest on the refunding obligations until the 243.21 date the proceeds are applied to payment of the obligations to 243.22 be refunded. The debt service fund shall be maintained as an 243.23 escrow account with a suitable financial institution within or 243.24 without the state and amounts in it shall be invested in 243.25 securities described in subdivision 8 or in an investment 243.26 contract or similar agreement with a bankor, insurance company, 243.27 or other financial institution meeting the requirements of 243.28 section 118A.05, subdivision 5. Excess proceeds, if any, of the 243.29 tax levy pursuant to section 475.61, subdivision 1, made with 243.30 respect to the obligations to be refunded, and any other 243.31 available amounts, may be deposited in the escrow account. In 243.32 the resolution authorizing the issuance of crossover refunding 243.33 obligations, the governing body may pledge to their payment any 243.34 source of payment of the obligations to be refunded. The 243.35 resolution may provide that the refunding obligations are 243.36 payable solely from the escrow account prior to the date 244.1 scheduled for payment of the obligations to be refunded and that 244.2 the obligations to be refunded shall not be discharged if the 244.3 amounts on deposit in the escrow account on that date are 244.4 insufficient. Subdivision 12 applies to crossover refunding 244.5 obligations, but the present value of debt service on the 244.6 refunding and refunded obligations shall be determined as of the 244.7 date the proceeds are applied to payment of the obligations to 244.8 be refunded. Subject to section 475.61, subdivision 3, in the 244.9 case of general obligation bonds, taxes shall be levied pursuant 244.10 to section 475.61 and appropriated to the debt service fund in 244.11 the amounts needed, together with estimated investment income of 244.12 the debt service fund and any other revenues available upon 244.13 discharge of the obligations refunded, to pay when due the 244.14 principal of and interest on the refunding obligations. The 244.15 levy so imposed may be reduced by earnings to be received from 244.16 investments on hand in the debt service fund to the extent the 244.17 applicable recording officer certifies to the county auditor 244.18 that the earnings are expected to be received in amounts and at 244.19 such times as to be sufficient, together with the remaining 244.20 levy, to satisfy the purpose of the levy requirements under 244.21 section 475.61. 244.22 Sec. 22. Minnesota Statutes 2000, section 641.23, is 244.23 amended to read: 244.24 641.23 [FUNDS, HOW PROVIDED.] 244.25 Before any contract is made for the erection of a county 244.26 jail, sheriff's residence, or both, the county board shall 244.27 either levy a sufficient tax to provide the necessary funds, or 244.28 issue county bonds therefor in accordance with the provisions of 244.29 chapter 475, provided that, unless the issuance of the bonds is244.30approved by the majority of voters voting on the question of244.31their issuance,no election is required if the amount of all 244.32 bonds issued for this purpose and interest on them which are due 244.33 and payable in any yearshalldoes not exceed an amount equal to 244.34 0.09671 percent of market value of taxable property within the 244.35 county, as last determined before the bonds are issued. 244.36 Sec. 23. Laws 1971, chapter 773, section 1, subdivision 2, 245.1 as amended by Laws 1976, chapter 234, sections 1 and 7, Laws 245.2 1978, chapter 788, section 1, Laws 1981, chapter 369, section 1, 245.3 Laws 1983, chapter 302, sections 1, Laws 1988, chapter 513, 245.4 section 1, Laws 1992, chapter 511, article 9, section 23, and 245.5 Laws 1998, chapter 389, article 3, section 27, is amended to 245.6 read: 245.7 Subd. 2. For each of the yearsthrough2003 to 2013, the 245.8 city of St. Paul is authorized to issue bonds in the aggregate 245.9 principal amount of$15,000,000$20,000,000 for each year; or in245.10an amount equal to one-fourth of one percent of the assessors245.11estimated market value of taxable property in St. Paul,245.12whichever is greater, provided that no more than 15,000,000 of245.13bonds is authorized to be issued in any year, unless St. Paul's245.14local general obligation debt as defined in this section is less245.15than six percent of market value calculated as of December 31 of245.16the preceding year; but at no time shall the aggregate principal245.17amount of bonds authorized exceed $18,000,000 in 1998,245.18$18,000,000 in 1999, $19,000,000 in 2000, $19,000,000 in 2001,245.19$19,500,000 in 2002, and $20,000,000 in 2003. 245.20 Sec. 24. [CITY OF ST. PAUL; ECONOMIC DEVELOPMENT RESERVE 245.21 BOND PROGRAM.] 245.22 Subdivision 1. [AUTHORIZATION TO ISSUE 245.23 BONDS.] Notwithstanding any contrary provision of the St. Paul 245.24 city charter, the St. Paul city council may by a resolution 245.25 adopted by five members authorize the issuance and sale of 245.26 general obligation bonds of the city in the amount of up to 245.27 $5,000,000 annually in the years 2002, 2003, 2004, and 2005, and 245.28 pledge the full faith and credit of the city to the payment of 245.29 the bonds. The bonds shall be issued and sold under Minnesota 245.30 Statutes, chapter 475, except that an election is not required, 245.31 unless within 30 days of the effective date of this section a 245.32 petition signed by eight percent of the registered voters of the 245.33 city who voted at the last city mayoral election is filed with 245.34 the city clerk requesting a referendum on the question of the 245.35 authority to issue the bonds. If a petition is filed, the 245.36 authority to issue the bonds under this section is not effective 246.1 until approved by a majority of the voters of the city voting on 246.2 the question at a general or special election. 246.3 Subd. 2. [USE OF PROCEEDS.] The proceeds of the bonds 246.4 issued under subdivision 1 must be used exclusively to fund one 246.5 or more reserve funds to be pledged for the payment of debt 246.6 service on revenue bonds issued by the city of St. Paul, the St. 246.7 Paul housing and redevelopment authority, or the St. Paul port 246.8 authority for projects described in subdivision 3. 246.9 Subd. 3. [PROJECT APPROVAL.] The proceeds of the bonds 246.10 issued under subdivision 1 shall be pledged to or expended to 246.11 pay debt service on bonds issued to finance only projects that 246.12 have been reviewed and approved by the St. Paul city council. 246.13 Subd. 4. [AUTHORITY CUMULATIVE.] The authority granted to 246.14 the city of St. Paul to issue bonds under this section is in 246.15 addition to the authority provided by any other law. 246.16 Subd. 5. [EFFECTIVE DATE.] This section is effective upon 246.17 the approval of the governing body of the city of St. Paul and 246.18 upon compliance with Minnesota Statutes, section 645.021. 246.19 Sec. 25. [ANOKA COUNTY DEBT AUTHORITY.] 246.20 Subdivision 1. [AUTHORITY TO INCUR DEBT.] To finance the 246.21 cost of designing, constructing, and acquiring public safety 246.22 communication system infrastructure and equipment, the governing 246.23 body of Anoka may issue: 246.24 (1) capital improvement bonds under the provisions of 246.25 Minnesota Statutes, section 373.40, as if the infrastructure and 246.26 equipment qualified as a "capital improvement" within the 246.27 meaning of Minnesota Statutes, section 373.40, subdivision 1, 246.28 paragraph (b); or 246.29 (2) capital notes under the provisions of Minnesota 246.30 Statutes, section 373.01, subdivision 3, as if the equipment 246.31 qualified as "capital equipment" within the meaning of Minnesota 246.32 Statutes, section 373.01, subdivision 3. 246.33 Subd. 2. [TREATMENT OF LEVY.] The county may report the 246.34 tax attributable to any levy to pay bonds or notes issued under 246.35 this section as a separate line item on the property tax 246.36 statement. The levy to pay the notes or bonds is exempt from 247.1 the limits on the amount or rate of tax imposed under any other 247.2 provision of law. 247.3 Subd. 3. [EXPIRATION.] This section expires ten years 247.4 after the first day on which the county issues a note or bond 247.5 under this section. The county may not issue a bond or note 247.6 under this section with a maturity or payment date after the 247.7 expiration date of this section. No property tax may be levied 247.8 under this section for taxes payable in a calendar year after 247.9 the calendar year in which this section expires. Expiration of 247.10 this section does not affect the obligation to pay or the 247.11 authority to collect taxes levied under this section before its 247.12 expiration. 247.13[EFFECTIVE DATE.] This section is effective the day 247.14 following final enactment without local approval. 247.15 Sec. 26. [APPLICATION.] 247.16 Sections 16 to 19 apply in the counties of Anoka, Carver, 247.17 Dakota, Hennepin, Ramsey, Scott, and Washington. 247.18 Sec. 27. [EFFECTIVE DATE.] 247.19 Section 8 is effective August 1, 2002, and applies to 247.20 resolutions adopted on or after that date. 247.21 The remainder of this article is effective the day after 247.22 final enactment. 247.23 ARTICLE 19 247.24 STATE TREASURER DUTIES 247.25 Section 1. [TRANSFER.] 247.26 All powers, responsibilities, and duties of the state 247.27 treasurer are transferred to the commissioner of finance under 247.28 Minnesota Statutes, section 15.039, except as otherwise 247.29 prescribed in this article and Laws 1998, chapter 387, and 247.30 except that Minnesota Statutes, section 15.039, subdivision 7, 247.31 does not apply to the state treasurer or deputy state treasurer. 247.32 Sec. 2. Minnesota Statutes 2000, section 7.26, is amended 247.33 to read: 247.34 7.26 [DELIVERY OF DUPLICATES; BOND.] 247.35 Such duplicate obligation when executed shall be delivered 247.36 by thestate treasurercommissioner of finance to the owner of 248.1 the original obligation, the owner's guardian, or the 248.2 representative of the owner's estate; provided, such owner, 248.3 guardian, or representative shall first file with thestate248.4treasurercommissioner a bond in the full amount of such 248.5 obligation and unpaid interest to maturity, with sufficient 248.6 sureties, approved by the same authority as state depository 248.7 bonds, indemnifying the state against any loss thereon by reason 248.8 of the existence of the original obligation or any coupon 248.9 thereto attached, unless such bond is waived as hereinafter 248.10 provided; and, provided, such owner, guardian, or representative 248.11 shall furnish satisfactory proof to thestate treasurer248.12 commissioner that such original obligation and coupons have not 248.13 been found or presented for payment up to the time of such 248.14 delivery; and, if any thereof have been found or presented, 248.15 duplicates shall be delivered only of such as have not been 248.16 found or presented. A record of the issuance and delivery of 248.17 each duplicate obligation and attached coupons shall be made by 248.18 thestate treasurer and forthwith reported by the treasurer to248.19thecommissionerof finance, who shall also make a record of the248.20same. Such duplicate obligations and coupons, when issued and 248.21 delivered as hereinbefore provided shall have the same force and 248.22 effect as the originals. 248.23 Sec. 3. Minnesota Statutes 2000, section 16A.27, 248.24 subdivision 5, is amended to read: 248.25 Subd. 5. [CHARGES, COMPENSATING BALANCES.] The 248.26 commissioner may, after consulting with the state treasurer,248.27agree that the treasurer maypay a depository a reasonable 248.28 charge from appropriated money, maintain appropriate 248.29 compensating balances with the depository, or purchase 248.30 non-interest-bearing certificates of deposit from the depository 248.31 for performing depository related services. 248.32 Sec. 4. Minnesota Statutes 2000, section 16A.626, is 248.33 amended to read: 248.34 16A.626 [ELECTRONIC PAYMENTS.] 248.35 (a) For purposes of this section, the terms defined in this 248.36 paragraph have the meaning given them. "Agency" means a state 249.1 officer, employee, board, commission, authority, department, 249.2 entity, or organization of the executive branch of state 249.3 government. "Government services transaction" means the conduct 249.4 of business between an agency and an individual or business 249.5 entity where the individual or business entity is paying a 249.6 license or permit fee or tax or purchasing goods or services. 249.7 (b) Notwithstanding any other provision of law, rule, or 249.8 regulation to the contrary, an agency may accept credit cards, 249.9 charge cards, debit cards, or other method of electronic funds 249.10 transfer for payment in government services transactions, 249.11 including electronic transactions. 249.12 (c) The commissioner of finance, in consultation with the249.13state treasurer,shall contract with one or more entities for 249.14 the purpose of enabling agencies to accept and process credit 249.15 cards and other electronic financial transactions. All agencies 249.16 shall process their credit card and other electronic financial 249.17 transactions through the contracts negotiated by the 249.18 commissioner of finance, unless the commissioner of finance 249.19 grants a waiver allowing an agency to negotiate its own contract 249.20 with an entity. These contracts must be approved by the 249.21 commissioner of finance. 249.22 (d) Agencies that accept credit cards, charge cards, debit 249.23 cards, or other method of electronic funds transfer for payment 249.24 may impose a convenience fee to be added to each transaction, 249.25 except that the department of revenue shall not impose a fee 249.26 under this section on any payment of tax that is required by law 249.27 or rule to be made by electronic funds transfer. The total 249.28 amount of such convenience fee must be equal to the transaction 249.29 fee charged by a processing contractor for such credit services 249.30 during the most recent collection period. An agency imposing a 249.31 convenience fee must notify the person using the credit services 249.32 of the fee before the transaction is processed. Fees collected 249.33 under this section are appropriated to the agency collecting the 249.34 fee for purposes of paying the processing contractor. 249.35 (e) A convenience fee imposed by an agency under this 249.36 section is in addition to any tax, fee, charge, or cost 250.1 otherwise imposed for a license, permit, tax, service, or good 250.2 provided by the agency. 250.3 (f) Credit card, charge card, debit card, or other method 250.4 of electronic funds transfer account numbers are nonpublic data 250.5 not on individuals as defined in section 13.02, subdivision 9, 250.6 or private data on individuals as defined in section 13.02, 250.7 subdivision 12. 250.8 Sec. 5. Minnesota Statutes 2000, section 35.08, is amended 250.9 to read: 250.10 35.08 [KILLING OF DISEASED ANIMALS.] 250.11 If the board decides upon the killing of an animal affected 250.12 with tuberculosis, paratuberculosis, or brucellosis, it shall 250.13 notify the animal's owner or keeper of the decision. If the 250.14 board, through its executive director, orders that an animal may 250.15 be transported for immediate slaughter to any abattoir where the 250.16 meat inspection division of the United States Department of 250.17 Agriculture maintains inspection, or where the animal and plant 250.18 health inspection service of the United States Department of 250.19 Agriculture or the board establishes field postmortem 250.20 inspection, the owner must receive the value of the net salvage 250.21 of the carcass. 250.22 Before the animal is removed from the premises of the 250.23 owner, the representative or authorized agent of the board must 250.24 agree with the owner in writing as to the value of the animal. 250.25 In the absence of an agreement, three competent, disinterested 250.26 persons, one appointed by the board, one by the owner, and a 250.27 third by the first two, shall appraise the animal at its full 250.28 replacement cost taking into consideration the purpose and use 250.29 of the animal. 250.30 The appraisement made under this section must be in 250.31 writing, signed by the appraisers, and certified by the board to 250.32 the commissioner of finance, who shall draw a warranton the250.33state treasurerfor the amount due the owner. 250.34 Sec. 6. Minnesota Statutes 2001 Supplement, section 35.09, 250.35 subdivision 3, is amended to read: 250.36 Subd. 3. [EMERGENCIES.] (a) When it is determined by the 251.1 board that it is necessary to eradicate any dangerous, 251.2 infectious, communicable disease among domestic animals in the 251.3 state, the presence of which constitutes an emergency declared 251.4 by resolution of the board, order of the governor, or by the 251.5 United States Department of Agriculture, the board may take 251.6 reasonable and necessary steps to suppress and eradicate the 251.7 disease. The board may cooperate with the animal and plant 251.8 health inspection service of the United States Department of 251.9 Agriculture, federally recognized Indian tribes, state or local 251.10 government agencies, or any other private or public entity in 251.11 the suppression and eradication of the disease. 251.12 (b) When an emergency has been declared, the board may 251.13 appraise and destroy animals affected with, or which have been 251.14 exposed to the disease, or which are highly susceptible to 251.15 exposure to the disease because of proximity to diseased 251.16 animals, appraise and destroy personal property in order to 251.17 remove the infection and complete the cleaning and disinfection 251.18 of the premises, temporarily commandeer real property under 251.19 paragraph (c) for the purpose of disposing of animals, and do 251.20 any act and incur any other expense reasonably necessary to 251.21 suppress the disease. 251.22 (c) The governor, at the request of the board, may 251.23 temporarily commandeer agricultural or other suitable 251.24 nonresidential land under the provisions of chapter 12 to be 251.25 used for disposal of the destroyed animals when an emergency has 251.26 been declared by the governor under section 35.0661 and the 251.27 board determines that: 251.28 (1) the owner of destroyed animals lacks sufficient land to 251.29 properly dispose of the animals; 251.30 (2) the animals cannot be transported to other sites; 251.31 (3) no landowner within the appropriate area will consent 251.32 to voluntarily provide land for animal disposal; 251.33 (4) time pressures prevent formal condemnation procedures; 251.34 and 251.35 (5) other means of animal disposal are either impractical 251.36 or contrary to good disease control practices. 252.1 After the land has been used for animal disposal, possession 252.2 shall return to the owner or occupant. Damages resulting from 252.3 the temporary taking shall be paid in the same amount and manner 252.4 as if the land had been temporarily condemned for other public 252.5 purposes. 252.6 (d) The board may accept, on behalf of the state, the rules 252.7 adopted by the animal and plant health inspection service of the 252.8 United States Department of Agriculture pertaining to the 252.9 disease, authorized under an act of Congress, or the portion of 252.10 the regulations deemed necessary, suitable, or applicable, and 252.11 cooperate with the animal and plant health inspection service of 252.12 the United States Department of Agriculture, in the enforcement 252.13 of those rules. Alternatively, the board may follow the 252.14 procedure only as to quarantine, inspection, condemnation, 252.15 appraisal, compensation, destruction, burial of animals, 252.16 disinfection, or other acts the board considers reasonably 252.17 necessary for the suppression of the disease, as agreed upon and 252.18 adopted by the board and representatives or authorized agents of 252.19 the animal and plant health inspection service of the United 252.20 States Department of Agriculture. 252.21 (e) For the purpose of compensation under paragraph (f), 252.22 appraisals of animals or personal property destroyed in order to 252.23 remove the infection and complete the cleaning and disinfection 252.24 of premises where the animals are found, must be made by an 252.25 appraisal board consisting of a representative of the board, a 252.26 representative of the animal and plant health inspection service 252.27 of the United States Department of Agriculture, and the owner of 252.28 the animals or the owner's representative. Notwithstanding any 252.29 law to the contrary, when, in the judgment of the board, 252.30 physical appraisal of the animals to be killed or personal 252.31 property to be destroyed poses a disease threat, appraisals may 252.32 be conducted after the animals are killed based on documents, 252.33 testimony, or other relevant evidence. Appraisals must be in 252.34 writing and signed by the appraisers, and must be made at the 252.35 true market value of all animals and personal property 252.36 appraised, unless otherwise provided by applicable federal law 253.1 or regulation when compensation is paid by federal funds. 253.2 (f) Upon destruction of animals or personal property, or 253.3 temporary commandeering of real property, and burial or other 253.4 disposition of the carcasses of the animals in accordance with 253.5 the law and rules of the board and the animal and plant health 253.6 inspection service of the United States Department of 253.7 Agriculture, and the completion of the cleaning and disinfection 253.8 of the premises, the board shall certify the appraisal or the 253.9 condemnation award to the commissioner of finance, who shall 253.10 draw a warranton the state treasurerfor the proper amount 253.11 payable to the owner, excluding any compensation received by the 253.12 owner from other sources, from appropriations made available for 253.13 this purpose. 253.14 (g) No entity of any kind may begin or proceed with any 253.15 proceeding to collect a debt from the owner of animals or 253.16 personal property destroyed under this subdivision, until the 253.17 owner has received compensation under paragraph (d). For 253.18 purposes of this paragraph, "proceeding to collect a debt" 253.19 includes foreclosure, repossession, garnishment, levy, contract 253.20 for deed cancellation, an action to obtain a court judgment, a 253.21 proceeding to collect real estate taxes or special assessments, 253.22 eviction, and any other in-court and out-of-court proceedings to 253.23 collect a debt. The term does not include sending bills or 253.24 other routine communications to the owner. If an entity refuses 253.25 to comply with this paragraph after being informed that the 253.26 owner qualifies for relief under this paragraph, the owner may 253.27 apply to the district court in the county in which the owner 253.28 resides for a court order directing the entity to comply with 253.29 this paragraph and to reimburse the owner for reasonable 253.30 attorney fees incurred in obtaining the court order. This 253.31 paragraph does not affect the validity of a mortgage 253.32 foreclosure, contract for deed cancellation or other proceeding 253.33 involving the title to real property, unless the owner records 253.34 in the office of the county recorder, or files in the office of 253.35 the registrar of titles, prior to completion of the proceeding 253.36 to collect a debt, a certified copy of a court order, which 254.1 includes a legal description of the property, determining that 254.2 the owner qualifies for relief under this paragraph. For 254.3 purposes of proceedings involving title to real property, the 254.4 court order must provide that it expires 90 days after the court 254.5 order was applied for, unless the court extends the court order 254.6 prior to that date for good cause shown. A certified copy of 254.7 any extension of the court order must be recorded or filed in 254.8 order to affect the validity of a proceeding affecting the title 254.9 to real property. For purposes of this paragraph, "completion 254.10 of a proceeding to collect a debt" means, in the case of a 254.11 mortgage foreclosure under chapter 580 or 581 or of a 254.12 foreclosure of any other lien on real property, the filing or 254.13 recording of the sheriff's certificate of sale; and, in the case 254.14 of a contract for deed cancellation under section 559.21, the 254.15 end of the cancellation period provided in that section. 254.16 Sec. 7. Minnesota Statutes 2000, section 49.24, 254.17 subdivision 13, is amended to read: 254.18 Subd. 13. [DISPOSITION OF UNCLAIMED DIVIDENDS.] Upon the 254.19 liquidation of any financial institution liquidated by the 254.20 commissioner as statutory liquidator, if any dividends or other 254.21 moneys set apart for the payment of claims remain unpaid, and 254.22 the places of residence of the owners thereof are unknown to the 254.23 commissioner, the commissioner may pay same into the state 254.24 treasury as hereinafter provided. Whenever the commissioner 254.25 shall be satisfied that the process of liquidation should not be 254.26 further continued the commissioner may make and certify 254.27 triplicate lists of any such unclaimed dividends or other 254.28 moneys, specifying the name of each owner, the amount due , and 254.29 the last known address. Upon one of such lists, to be retained 254.30 by the commissioner shall be endorsed the commissioner's order 254.31 that such unclaimed moneys be forthwith deposited in the state 254.32 treasury. When so deposited, one of said lists shall be 254.33 delivered to thestate treasurer and another to thecommissioner 254.34 of finance and the commissioner shall retain in the 254.35 commissioner's office such records and proofs concerning said 254.36 claims as the commissioner may have, which shall thereafter 255.1 remain on file in the office. Thetreasurercommissioner of 255.2 finance shall execute upon the list retained by the commissioner 255.3 a receipt for such money, which shall operate as a full 255.4 discharge of the commissioner on account of such claims. At any 255.5 time within six years after such receipt, but not afterward, the 255.6 claimant may apply to the commissioner for the amount so 255.7 deposited for the claimant's benefit, and upon proof 255.8 satisfactory to the governor, the attorney general and the 255.9 commissioner, or to a majority of them, they shall give an order 255.10 to the commissioner of finance to issue a warrantupon the255.11treasurerfor such amount, and such warrant shall thereupon be 255.12 issued. If no such claim be presented within six years, the 255.13 commissioner shall so note upon the commissioner's copy of said 255.14 list and certify the fact to the commissioner of financeand255.15treasurerwho shall make like entries upon the commissioner of 255.16 finance's corresponding listsin their hands; and all further 255.17 claims to said money shall be barred. Provided, that thestate255.18treasurercommissioner of finance shall transfer to the 255.19 commissioner of commerce's liquidation fund created by this 255.20 section not to exceed 50 percent of the amount so turned over by 255.21 the commissioner, to be used to partially defray expenses in 255.22 connection with the liquidation of closed banks and the conduct 255.23 of the liquidation division, in such amounts and at such times 255.24 as the commissioner shall request. 255.25 There is hereby appropriated to the persons entitled to 255.26 such amounts, from such moneys in the state treasury not 255.27 otherwise appropriated, an amount sufficient to make such 255.28 payment. 255.29 Sec. 8. Minnesota Statutes 2000, section 49.24, 255.30 subdivision 16, is amended to read: 255.31 Subd. 16. [TRANSFERS TO LIQUIDATION FUND.] The following 255.32 moneys shall be transferred to and deposited in the commissioner 255.33 of commerce's liquidation fund: 255.34 (1) All moneys paid to thestate treasurercommissioner of 255.35 finance by the commissioner out of funds of any financial 255.36 institution in the commissioner's hands as reimbursement for 256.1 services and expenses pursuant to the provisions of subdivision 256.2 7. 256.3 (2) All moneys in the possession of the commissioner set 256.4 aside for the purpose of meeting unforeseen and contingent 256.5 expenses incident to the liquidation of closed financial 256.6 institutions, which funds have been or shall be hereafter 256.7 established by withholding portions of final liquidating 256.8 dividends in such cases. 256.9 (3) All moneys which the commissioner shall request the 256.10state treasurercommissioner of finance to transfer to such fund 256.11 pursuant to the provisions of subdivision 13. 256.12 (4) All moneys in the possession of the commissioner now 256.13 carried on the commissioner's books in "stamp account," 256.14 "suspense account," and "unclaimed deposit account." 256.15 (5) All moneys in the possession of the commissioner which 256.16 the commissioner may be authorized by order of any district 256.17 court having jurisdiction of any liquidation proceedings to 256.18 transfer to such fund, or to use for any of the purposes for 256.19 which the fund is established. 256.20 (6) All moneys in the possession of the commissioner 256.21 carried on the commissioner's books in the "unclaimed bonds 256.22 account." At any time withinone year after the effective date256.23of Laws 1945, chapter 128, or withinsix years after any bond 256.24 the proceeds of the sale of which constitute a portion of the 256.25 moneys in this paragraph referred to came into the possession of 256.26 the commissioner as liquidator of any financial institution, 256.27whichever is later,any claimant thereto may apply to the 256.28 commissioner for the proceeds of the sale of such bond, and, 256.29 upon proof satisfactory to the governor, the attorney general, 256.30 and the commissioner, or a majority of them, they shall give an 256.31 order to the commissioner of finance to issue a warrantupon the256.32treasurerfor such amount, without interest, and such warrant 256.33 shall thereupon be issued and the amount thereof paid out of the 256.34 commissioner of commerce's liquidation fund. If no such claim 256.35 be presented within such period, all further claims to the 256.36 proceeds of any such bond shall be barred. 257.1 (7) All sums which the commissioner may receive from the 257.2 sale of personal property of liquidated financial institutions 257.3 where the final dividend has been paid and no disposition of 257.4 said property made by any order of the court, and the proceeds 257.5 of sales of any personal property used by the liquidation 257.6 division which have been purchased with funds of financial 257.7 institutions in liquidation. 257.8 Sec. 9. Minnesota Statutes 2000, section 84A.11, is 257.9 amended to read: 257.10 84A.11 [WHEN BONDS PAID IN PART BY COUNTIES.] 257.11 A county containing a portion of the preserve may 257.12 voluntarily assume, in the manner specified in this section, the 257.13 obligation to pay a portion of the principal and interest of the 257.14 bonds issued before April 19, 1929, and remaining unpaid at 257.15 maturity, of any school district or town in the county and 257.16 wholly or partly within the preserve. The portion must bear the 257.17 same proportion to the whole of the unpaid principal and 257.18 interest as the 1928 assessed valuation of lands then acquired 257.19 by the state under sections 84A.01 to 84A.11 in that school 257.20 district or town bears to the total 1928 assessed valuation of 257.21 the school district or town. 257.22 This assumption must be evidenced by a resolution of the 257.23 county board. A copy of the resolution must be certified to the 257.24 commissioner of finance within one year after the passage of 257.25 sections 84A.01 to 84A.11. 257.26 After that time, if any bonds remain unpaid at maturity, 257.27 the county board shall, upon demand of the governing body of the 257.28 school district or town or of a bondholder, provide for the 257.29 payment of the portion assumed. The county board shall levy 257.30 general taxes on all the taxable property of the county for that 257.31 purpose, or shall issue its bonds to raise the sum needed 257.32 conforming to law respecting the issuance of county refunding 257.33 bonds. The proceeds of these taxes or bonds must be paid by the 257.34 county treasurer to the treasurers of the respective school 257.35 districts or towns. 257.36 If a county fails to adopt and certify this resolution, the 258.1 commissioner of finance shall withhold from the payments to be 258.2 made to the county, under section 84A.04, a sum equal to that 258.3 portion of the principal and interest of these outstanding bonds 258.4 that bears the same proportion to the whole principal and 258.5 interest as the 1928 assessed valuation of lands acquired by the 258.6 state within the preserve bears to the total 1928 assessed 258.7 valuation of the school district or town. The money withheld 258.8 must be set aside in the state treasury and not paid to the 258.9 county until the full principal and interest of these school 258.10 district and town bonds is paid. 258.11 If any bonds remain unpaid at maturity, upon the demand of 258.12 the governing body of the school district or town, or a 258.13 bondholder, the commissioner of finance shall issue to the 258.14 treasurer of the school district or town a warranton the state258.15treasurerfor that portion of the past due principal and 258.16 interest computed as in the case of the county liability 258.17 authorized to be voluntarily assumed. Money received by a 258.18 school district or town under this section must be applied to 258.19 the payment of these past due bonds and interest. 258.20 Sec. 10. Minnesota Statutes 2000, section 84A.23, 258.21 subdivision 4, is amended to read: 258.22 Subd. 4. [DRAINAGE DITCH BONDS; REPORTS.] (a) Immediately 258.23 after a project is approved and accepted and then after each 258.24 distribution of the tax collections on the June and November tax 258.25 settlements, the county auditor shall certify to the 258.26 commissioner of finance the following information relating to 258.27 bonds issued to finance or refinance public drainage ditches 258.28 wholly or partly within the projects, and the collection of 258.29 assessments levied on account of the ditches: 258.30 (1) the amount of principal and interest to become due on 258.31 the bonds before the next tax settlement and distribution; 258.32 (2) the amount of money collected from the drainage 258.33 assessments and credited to the funds of the ditches; and 258.34 (3) the amount of the deficit in the ditch fund of the 258.35 county chargeable to the ditches. 258.36 (b) On approving the certificate, the commissioner of 259.1 finance shall draw a warranton the state treasurer, payable out 259.2 of the fund pertaining to the project, for the amount of the 259.3 deficit in favor of the county. 259.4 (c) As to public drainage ditches wholly within a project, 259.5 the amount of money paid to or for the benefit of the county 259.6 under paragraph (b) must never exceed the principal and interest 259.7 of the bonds issued to finance or refinance the ditches 259.8 outstanding at the time of the passage and approval of sections 259.9 84A.20 to 84A.30, less money on hand in the county ditch fund to 259.10 the credit of the ditches. The liabilities must be reduced from 259.11 time to time by the amount of all payments of assessments after 259.12 April 25, 1931, made by the owners of lands assessed before that 259.13 date for benefits on account of the ditches. 259.14 (d) As to public drainage ditches partly within and partly 259.15 outside a project, the amount paid from the fund pertaining to 259.16 the project to or for the benefit of the county must never 259.17 exceed a certain percentage of bonds issued to finance and 259.18 refinance the ditches so outstanding, less money on hand in the 259.19 county ditch fund to the credit of the ditches on April 25, 259.20 1931. The percentage must bear the same proportion to the whole 259.21 amount of these bonds as the original benefits assessed against 259.22 lands within the project bear to the original total benefits 259.23 assessed to the entire system of the ditches. This liability 259.24 shall be reduced from time to time by the payments of all 259.25 assessments extended after April 25, 1931, made by the owners of 259.26 lands within the project of assessments for benefits assessed 259.27 before that date on account of a ditch. 259.28 (e) The commissioner of finance may provide and prescribe 259.29 forms for reports required by sections 84A.20 to 84A.30 and 259.30 require any additional information from county officials that 259.31 the commissioner of finance considers necessary for the proper 259.32 administration of sections 84A.20 to 84A.30. 259.33 Sec. 11. Minnesota Statutes 2000, section 84A.33, 259.34 subdivision 4, is amended to read: 259.35 Subd. 4. [DITCH BONDS; FUNDS; PAYMENTS TO COUNTIES.] (a) 259.36 Upon the approval and acceptance of a project and after each 260.1 distribution of the tax collections for the June and November 260.2 tax settlements, the county auditor shall certify to the 260.3 commissioner of finance the following information about bonds 260.4 issued to finance or refinance public drainage ditches wholly or 260.5 partly within the projects, and the collection of assessments 260.6 levied for the ditches: 260.7 (1) the amount of principal and interest to become due on 260.8 the bonds before the next tax settlement and distribution; 260.9 (2) the amount of money collected from the drainage 260.10 assessments and credited to the funds of the ditches, not 260.11 already sent to thestate treasurercommissioner of finance as 260.12 provided in sections 84A.31 to 84A.42; and 260.13 (3) the amount of the deficit in the ditch fund of the 260.14 county chargeable to the ditches. 260.15 (b) On approving this certificate of the county auditor, 260.16 the commissioner of finance shall draw a warranton the state260.17treasurer, payable out of the fund provided for in sections 260.18 84A.31 to 84A.42, and send it to the county treasurer of the 260.19 county. These funds must be credited to the proper ditch of the 260.20 county and placed in the ditch bond fund of the county, which is 260.21 created, and used only to pay the ditch bonded indebtedness of 260.22 the county assumed by the state under sections 84A.31 to 260.23 84A.42. The total amount of warrants drawn must not exceed in 260.24 any one year the total amount of the deficit provided for under 260.25 this section. 260.26 (c) The state is subrogated to all title, right, interest, 260.27 or lien of the county in or on the lands so certified within 260.28 these projects. 260.29 (d) As to public drainage ditches wholly within a project, 260.30 the amount paid to, or for the benefit of, the county under this 260.31 subdivision must never exceed the principal and interest of the 260.32 bonds issued to finance or refinance a ditch outstanding on 260.33 April 22, 1933, less money on hand in the county ditch fund to 260.34 the credit of a ditch. These liabilities must be reduced from 260.35 time to time by the amount of any payments of assessments 260.36 extended after April 22, 1933, made by the owners of lands 261.1 assessed before that date for benefits on account of the ditches. 261.2 As to public drainage ditches partly within and partly 261.3 outside a project the amount paid from the fund pertaining to 261.4 the project to or for the benefit of the county must never 261.5 exceed a certain percentage of bonds issued to finance and 261.6 refinance a ditch so outstanding, less money on hand in the 261.7 county ditch fund to the credit of a ditch on April 22, 1932. 261.8 The percentage must bear the same proportion to the whole amount 261.9 of the bonds as the original benefits assessed against these 261.10 lands within the project bear to the original total benefits 261.11 assessed to the entire system for a ditch. This liability must 261.12 be reduced from time to time by the payments of all assessments 261.13 extended after April 22, 1933, made by the owners of lands 261.14 within the project of assessments for benefits assessed before 261.15 that date on account of a ditch. 261.16 Sec. 12. Minnesota Statutes 2000, section 84A.40, is 261.17 amended to read: 261.18 84A.40 [COUNTY MAY ASSUME BONDS.] 261.19 Any county where a project or portion of it is located may 261.20 voluntarily assume, in the manner specified in this section, the 261.21 obligation to pay a portion of the principal and interest of the 261.22 bonds issued before the approval and acceptance of the project 261.23 and remaining unpaid at maturity, of any school district or town 261.24 in the county and wholly or partly within the project. The 261.25 portion must bear the same proportion to the whole of the unpaid 261.26 principal and interest as the last net tax capacity, before the 261.27 acceptance of the project, of lands then acquired by the state 261.28 under sections 84A.31 to 84A.42 in the school districts or towns 261.29 bears to the total net tax capacity for the same year of the 261.30 school district or town. This assumption must be evidenced by a 261.31 resolution of the county board of the county. A copy of the 261.32 resolution must be certified to the commissioner of finance 261.33 within one year after the acceptance of the project. 261.34 Later, if any of the bonds remains unpaid at maturity, the 261.35 county board shall, upon demand of the governing body of the 261.36 school district or town or of a bondholder, provide for the 262.1 payment of the portion assumed. The county shall levy general 262.2 taxes on all the taxable property of the county for that 262.3 purpose, or issue its bonds to raise the sum needed, conforming 262.4 to law respecting the issuance of county refunding bonds. The 262.5 proceeds of taxes or bonds must be paid by the county treasurer 262.6 to the treasurer of the school district or town. No payments 262.7 shall be made by the county to the school district or town until 262.8 the money in the treasury of the school district or town, 262.9 together with the money to be paid by the county, is sufficient 262.10 to pay in full each of the bonds as it becomes due. 262.11 If a county fails to adopt and certify the resolution, the 262.12 commissioner of finance shall withhold from the payments to be 262.13 made to the county under section 84A.32 a sum equal to that 262.14 portion of the principal and interest of the outstanding bonds 262.15 that bears the same proportion to the whole of the bonds as the 262.16 above determined net tax capacity of lands acquired by the state 262.17 within the project bears to the total net tax capacity for the 262.18 same year of the school district or town. Money withheld from 262.19 the county must be set aside in the state treasury and not paid 262.20 to the county until the full principal and interest of the 262.21 school district and town bonds have been paid. 262.22 If any bonds remain unpaid at maturity, upon the demand of 262.23 the governing body of the school district or town, or a 262.24 bondholder, the commissioner of finance shall issue to the 262.25 treasurer of the school district or town a warranton the state262.26treasurerfor that portion of the past due principal and 262.27 interest computed as in the case of the county's liability 262.28 authorized in this section to be voluntarily assumed. Money 262.29 received by a school district or town under this section must be 262.30 applied to the payment of past-due bonds and interest. 262.31 Sec. 13. Minnesota Statutes 2000, section 85A.05, 262.32 subdivision 2, is amended to read: 262.33 Subd. 2. [ISSUANCE OF BONDS.] Upon request by resolution 262.34 of the Minnesota zoological board and upon authorization as 262.35 provided in subdivision 1 the commissioner of finance shall sell 262.36 and issue Minnesota zoological garden bonds in the aggregate 263.1 amount requested, upon sealed bids and upon such notice, at such 263.2 price, in such form and denominations, bearing interest at such 263.3 rate or rates, maturing in such amounts and on such dates, 263.4 without option of prepayment or subject to prepayment upon such 263.5 notice and at such times and prices, payable at such bank or 263.6 banks within or outside the state, with such provisions for 263.7 registration, conversion, and exchange and for the issuance of 263.8 notes in anticipation of the sale or delivery of definitive 263.9 bonds, and in accordance with such further rules, as the 263.10 commissioner of finance shall determine, subject to the approval 263.11 of the attorney general, but not subject to chapter 14, 263.12 including section 14.386. The bonds shall be executed by the 263.13 commissioner of financeand attested by the state treasurer263.14 undertheirofficialsealsseal. Thesignatures of the officers263.15 signature on the bonds and any appurtenant interest coupons and 263.16their sealsthe seal may be printed, lithographed, engraved, or 263.17 stamped thereon, except that each bond shall be authenticated by 263.18 the manual signature on its face ofone of the officersthe 263.19 commissioner of finance or of an officer of a bank designated by 263.20 them as authenticating agent. The commissioner of finance shall 263.21 ascertain and certify to the purchasers of the bonds the 263.22 performance and existence of all acts, conditions, and things 263.23 necessary to make them valid and binding general obligations of 263.24 the state of Minnesota, subject to the approval of the attorney 263.25 general. 263.26 Sec. 14. Minnesota Statutes 2000, section 94.53, is 263.27 amended to read: 263.28 94.53 [WARRANT TO COUNTY TREASURERS; FEDERAL LOANS TO 263.29 COUNTIES.] 263.30 It shall be the duty of the commissioner of finance to 263.31 transmit warrants on the state treasury to the county treasurers 263.32 of the respective counties for the sum that may be due in 263.33 accordance with sections 94.52 to 94.54, which sum or sums are 263.34 hereby appropriated out of the state treasury from the amounts 263.35 received from the United States government pursuant to the 263.36 aforesaid act of Congress. The commissioner of finance, upon 264.1 being notified by the federal government or any agencies thereof 264.2 that a loan has been made to any such county the repayment of 264.3 which is to be made from such fund, is authorized to transmit a 264.4 warrant or warrantson the state treasurerto the federal 264.5 government or any agency thereof sufficient to repay such loan 264.6 out of any money apportioned or due to such county under the 264.7 provisions of such act of Congress, approved May 23, 1908 264.8 (Statutes at Large, volume 35, page 260). 264.9 Sec. 15. Minnesota Statutes 2000, section 115A.58, 264.10 subdivision 2, is amended to read: 264.11 Subd. 2. [ISSUANCE OF BONDS.] Upon request by the director 264.12 and upon authorization as provided in subdivision 1, the 264.13 commissioner of finance shall sell Minnesota state waste 264.14 management bonds. The bonds shall be in the aggregate amount 264.15 requested, and sold upon sealed bids upon the notice, at the 264.16 price in the form and denominations, bearing interest at the 264.17 rate or rates, maturing in the amounts and on the dates (with or 264.18 without option of prepayment upon notice and at specified times 264.19 and prices), payable at a bank or banks within or outside the 264.20 state (with provisions, if any, for registration, conversion, 264.21 and exchange and for the issuance of temporary bonds or notes in 264.22 anticipation of the sale or delivery of definitive bonds), and 264.23 in accordance with further provisions as the commissioner of 264.24 finance shall determine, subject to the approval of the attorney 264.25 general, but not subject to chapter 14, including section 264.26 14.386. The bonds shall be executed by the commissioner of 264.27 financeand attested by the state treasurerundertheirofficial 264.28sealsseal. Thesignatures of the officerssignature on the 264.29 bonds and any interest coupons andtheir sealsthe seal may be 264.30 printed, lithographed, engraved, stamped, or otherwise 264.31 reproduced thereon, except that each bond shall be authenticated 264.32 by the manual signature on its face ofone of the officersthe 264.33 commissioner of finance or of an authorized representative of a 264.34 bank designated by the commissioner of finance as registrar or 264.35 other authenticating agent. The commissioner of finance shall 264.36 ascertain and certify to the purchasers of the bonds the 265.1 performance and existence of all acts, conditions, and things 265.2 necessary to make them valid and binding general obligations of 265.3 the state of Minnesota, subject to the approval of the attorney 265.4 general. 265.5 Sec. 16. Minnesota Statutes 2000, section 116.16, 265.6 subdivision 4, is amended to read: 265.7 Subd. 4. [DISBURSEMENTS.] Disbursements for the water 265.8 pollution control program shall be made by thestate treasurer265.9upon order of thecommissioner of finance at the times and in 265.10 the amounts requested by the agency or the Minnesota public 265.11 facilities authority in accordance with the applicable state and 265.12 federal law governing such disbursements; except that no 265.13 appropriation or loan of state funds for any project shall be 265.14 disbursed to any municipality until and unless the agency has by 265.15 resolution determined the total estimated cost of the project, 265.16 and ascertained that financing of the project is assured by: 265.17 (1) a grant to the municipality by an agency of the federal 265.18 government within the amount of funds then appropriated to that 265.19 agency and allocated by it to projects within the state; or 265.20 (2) a grant of funds appropriated by state law; or 265.21 (3) a loan authorized by state law; or 265.22 (4) the appropriation of proceeds of bonds or other funds 265.23 of the municipality to a fund for the construction of the 265.24 project; or 265.25 (5) any or all of the means referred to in clauses (1) to 265.26 (4); and 265.27 (6) an irrevocable undertaking, by resolution of the 265.28 governing body of the municipality, to use all funds so made 265.29 available exclusively for the construction of the project, and 265.30 to pay any additional amount by which the cost of the project 265.31 exceeds the estimate, by the appropriation to the construction 265.32 fund of additional municipal funds or the proceeds of additional 265.33 bonds to be issued by the municipality; and 265.34 (7) conformity of the project and of the loan or grant 265.35 application with the state water pollution control plan as 265.36 certified to the federal government and with all other 266.1 conditions under applicable state and federal law for a grant of 266.2 state or federal funds of the nature and in the amount involved. 266.3 Sec. 17. Minnesota Statutes 2000, section 116.17, 266.4 subdivision 2, is amended to read: 266.5 Subd. 2. [ISSUANCE OF BONDS.] Upon request by resolution 266.6 of the agency and upon authorization as provided in subdivision 266.7 1 the commissioner of finance shall sell and issue Minnesota 266.8 state water pollution control bonds in the aggregate amount 266.9 requested, upon sealed bids and upon such notice, at such price, 266.10 in such form and denominations, bearing interest at a rate or 266.11 rates, maturing in amounts and on dates, with or without option 266.12 of prepayment upon notice and at specified times and prices, 266.13 payable at a bank or banks within or outside the state, with 266.14 provisions, if any, for registration, conversion, and exchange 266.15 and for the issuance of temporary bonds or notes in anticipation 266.16 of the sale or delivery of definitive bonds, and in accordance 266.17 with further provisions, as the commissioner of finance shall 266.18 determine, subject to the approval of the attorney general, but 266.19 not subject to chapter 14, including section 14.386. The bonds 266.20 shall be executed by the commissioner of financeand attested by266.21the state treasurerundertheirofficialsealsseal. The 266.22signaturessignature of theofficerscommissioner on the bonds 266.23 and any appurtenant interest coupons andtheir sealsthe seal 266.24 may be printed, lithographed, engraved, stamped, or otherwise 266.25 reproduced thereon, except that each bond shall be authenticated 266.26 by the manual signature on its face ofone of the officersthe 266.27 commissioner or of an authorized representative of a bank 266.28 designated by the commissioner as registrar or other 266.29 authenticating agent. The commissioner of finance shall 266.30 ascertain and certify to the purchasers of the bonds the 266.31 performance and existence of all acts, conditions, and things 266.32 necessary to make them valid and binding general obligations of 266.33 the state of Minnesota, subject to the approval of the attorney 266.34 general. 266.35 Sec. 18. Minnesota Statutes 2001 Supplement, section 266.36 122A.21, is amended to read: 267.1 122A.21 [TEACHERS' AND ADMINISTRATORS' LICENSES; FEES.] 267.2 Each application for the issuance, renewal, or extension of 267.3 a license to teach must be accompanied by a processing fee in an 267.4 amount set by the board of teaching by rule. Each application 267.5 for issuing, renewing, or extending the license of a school 267.6 administrator or supervisor must be accompanied by a processing 267.7 fee in the amount set by the board of teaching. The processing 267.8 fee for a teacher's license and for the licenses of supervisory 267.9 personnel must be paid to the executive secretary of the 267.10 appropriate board. The executive secretary of the board shall 267.11 deposit the fees with thestate treasurer, as provided by law,267.12and report each month to thecommissioner of financethe amount267.13of fees collected. The fees as set by the board are 267.14 nonrefundable for applicants not qualifying for a license. 267.15 However, a fee must be refunded by thestate treasurer267.16 commissioner of finance in any case in which the applicant 267.17 already holds a valid unexpired license. The board may waive or 267.18 reduce fees for applicants who apply at the same time for more 267.19 than one license. 267.20 Sec. 19. Minnesota Statutes 2000, section 126C.72, 267.21 subdivision 2, is amended to read: 267.22 Subd. 2. [ISSUANCE AND SALE OF BONDS; COMMISSIONER OF 267.23 FINANCE.] Upon receipt of each such certification, subject to 267.24 authorization as provided in subdivision 4, the commissioner of 267.25 finance shall from time to time as needed issue and sell state 267.26 of Minnesota school loan bonds in the aggregate principal amount 267.27 stated in the commissioner's certificate, for the prompt and 267.28 full payment of which, with the interest thereon, the full 267.29 faith, credit, and taxing powers of the state are hereby 267.30 irrevocably pledged. The commissioner of finance shall credit 267.31 the net proceeds of the sale of the bonds to the purposes for 267.32 which they are appropriated by section 126C.66, subdivision 1. 267.33 The bonds shall be issued and sold at such price, in such 267.34 manner, in such number of series, at such times, and in such 267.35 form and denominations, shall bear such dates of issue and of 267.36 maturity, either without option of prior redemption or subject 268.1 to prepayment upon such notice and at such times and prices, 268.2 shall bear interest at such rate or rates and payable at such 268.3 intervals, shall be payable at such bank or banks within or 268.4 without the state, with such provisions for registration, 268.5 conversion, and exchange, and for the issuance of notes in 268.6 anticipation of the sale and delivery of definitive bonds, and 268.7 in accordance with such further provisions as the commissioner 268.8 of finance shall determine subject to the limitations stated in 268.9 this subdivision (but not subject to chapter 14, including 268.10 section 14.386). The maturity date must not be more than 20 268.11 years after the date of issue of any bond and the principal 268.12 amounts. The due dates must conform as near as may be with the 268.13 commissioner's estimates of dates and amounts of payments to be 268.14 received on debt service and capital loans. The bonds and any 268.15 interest coupons attached to them must be executed by the 268.16 commissioner of financeand attested by the state treasurer268.17 undertheirofficialsealsseal. Thesignaturessignature of 268.18these officersthe commissioner andtheir sealsthe seal may be 268.19 printed, lithographed, stamped, engraved, or otherwise 268.20 reproduced thereon. Each bond must be authenticated by the 268.21 manual signature on its face ofone oftheofficerscommissioner 268.22 or a person authorized to sign on behalf of a bank or trust 268.23 company designated by the commissioner to act as registrar or 268.24 other authenticating agent. The commissioner of finance is 268.25 authorized and directed to ascertain and certify to purchasers 268.26 of the bonds the performance and existence of all acts, 268.27 conditions, and things necessary to make them valid and binding 268.28 general obligations of the state of Minnesota in accordance with 268.29 their terms. 268.30 Sec. 20. Minnesota Statutes 2000, section 127A.40, is 268.31 amended to read: 268.32 127A.40 [MANNER OF PAYMENT OF STATE AIDS.] 268.33 It shall be the duty of the commissioner to deliver to the 268.34 commissioner of finance a certificate for each district entitled 268.35 to receive state aid under the provisions of this chapter. Upon 268.36 the receipt of such certificate, it shall be the duty of the 269.1 commissioner of finance to draw a warrantupon the state269.2treasurerin favor of the district for the amount shown by each 269.3 certificate to be due to the district. The commissioner of 269.4 finance shall transmit such warrants to the district together 269.5 with a copy of the certificate prepared by the commissioner. 269.6 Sec. 21. Minnesota Statutes 2000, section 161.05, 269.7 subdivision 3, is amended to read: 269.8 Subd. 3. [CERTIFICATE.] Before thestate treasurer269.9 commissioner of finance shall make any such loan, the 269.10 commissioner shall file with the commissioner of financeand the269.11state treasurera certificate showing the amount of 269.12 disbursements from the trunk highway fund which are to be repaid 269.13 to the state by the federal government. 269.14 Sec. 22. Minnesota Statutes 2000, section 161.07, is 269.15 amended to read: 269.16 161.07 [MANNER OF PAYMENTS.] 269.17 Subdivision 1. [ABSTRACT FOR PAYMENT.] In all cases of 269.18 payments to be made as herein authorized by the commissioner out 269.19 of the trunk highway fund, the same shall be made in the 269.20 following manner. The commissioner shall furnish verified 269.21 abstracts of the same, prepared intriplicateduplicate, one of 269.22 which shall be delivered to the commissioner of finance, one to269.23the state treasurer,and one to be retained by the commissioner 269.24 of transportation. The abstract shall contain the name, 269.25 residence, and the amount due each claimant and designate the 269.26 contract or purpose for which the payment is made. 269.27 Subd. 2. [PAYMENT.] The copy of the abstracts delivered to 269.28 the commissioner of finance shall be accompanied by the original 269.29 voucher or vouchers, together with the proof of claim for each 269.30 item included in such abstracts. If there be sufficient money 269.31 in the proper fund, the commissioner of finance shall issue a 269.32 warrantupon the state treasurerfor the gross amount shown by 269.33 such abstract. Thestate treasurercommissioner of finance 269.34 shall deliver checks to the several persons entitled thereto as 269.35 shown by such abstracts, and shall preserve in thetreasurer's269.36 commissioner's office a record of each check and remittance 270.1 showing the date of each issue, the name of the payee, and any 270.2 other facts tending to evidence its payment. 270.3 Sec. 23. Minnesota Statutes 2000, section 167.50, 270.4 subdivision 2, is amended to read: 270.5 Subd. 2. [ISSUANCE AND SALE.] The bonds shall be issued 270.6 and sold upon competitive bids after published notice. The 270.7 bonds shall be issued and sold at the times and prices (not less 270.8 than par and accrued interest), in the form and denominations, 270.9 bearing interest at the rate or rates, maturing on dates, with 270.10 or without option of prior redemption upon notice and at 270.11 specified times and prices, payable at a bank or banks, within 270.12 or without the state, with provisions for registration, 270.13 conversion, and exchange and for the issuance of temporary bonds 270.14 or notes in anticipation of the sale and delivery of definitive 270.15 bonds, and in accordance with such further provisions, as the 270.16 commissioner of finance may determine, subject to the approval 270.17 of the attorney general (but not subject to the provisions of 270.18 chapter 14, including 14.386). Each bond shall mature within 20 270.19 years from its date of issue and shall be executed by the 270.20 commissioner of financeand attested by the state treasurer270.21 undertheirofficialsealsseal. Thesignaturessignature of 270.22these officersthe commissioner on the face of and any interest 270.23 coupons appurtenant to any bond, andtheir sealsthe seal may be 270.24 printed, lithographed, stamped, engraved, or otherwise 270.25 reproduced thereon, provided that the signature of one of the 270.26 officers, or of an authorized representative of a corporate 270.27 registrar or other agent designated by the commissioner of 270.28 finance to authenticate the bonds, shall be manually subscribed 270.29 on the face of each bond. 270.30 Sec. 24. Minnesota Statutes 2000, section 174.51, 270.31 subdivision 2, is amended to read: 270.32 Subd. 2. [SALE; GENERAL OBLIGATIONS.] The bonds shall be 270.33 sold upon sealed bids and upon notice, at a price, in form and 270.34 denominations, bearing interest at a rate or rates, maturing in 270.35 amounts and on dates, without option of prior redemption or 270.36 subject to prepayment upon notice and at times and prices, 271.1 payable at a bank or banks within or outside the state, with or 271.2 without provisions for registration, conversion, exchange, and 271.3 issuance of temporary bonds or notes in anticipation of the sale 271.4 or delivery of definitive bonds, and in accordance with further 271.5 provisions, as the commissioner of finance shall determine 271.6 subject to the approval of the attorney general, but not subject 271.7 to the provisions of chapter 14, including section 14.386. Each 271.8 bond shall mature within 20 years from its date of issue and 271.9 shall be executed by the commissioner of financeand attested by271.10the state treasurerundertheirofficialsealsseal. The 271.11signaturessignature on the bonds and on any interest coupons 271.12 and thesealsseal may be printed or otherwise reproduced, 271.13 except that each bond shall be authenticated by the manual 271.14 signature on its face ofone of the officersthe commissioner of 271.15 finance or of a person authorized to sign on behalf of a bank 271.16 designated by the commissionerof financeas registrar or other 271.17 authenticating agent. The commissioner of finance shall 271.18 ascertain and certify to the purchasers of the bonds the 271.19 performance and existence of all acts, conditions, and things 271.20 necessary to make them valid and binding general obligations of 271.21 the state of Minnesota, subject to the approval of the attorney 271.22 general. 271.23 Sec. 25. Minnesota Statutes 2000, section 176.181, 271.24 subdivision 2, is amended to read: 271.25 Subd. 2. [COMPULSORY INSURANCE; SELF-INSURERS.] (1) Every 271.26 employer, except the state and its municipal subdivisions, 271.27 liable under this chapter to pay compensation shall insure 271.28 payment of compensation with some insurance carrier authorized 271.29 to insure workers' compensation liability in this state, or 271.30 obtain a written order from the commissioner of commerce 271.31 exempting the employer from insuring liability for compensation 271.32 and permitting self-insurance of the liability. The terms, 271.33 conditions and requirements governing self-insurance shall be 271.34 established by the commissioner pursuant to chapter 14. The 271.35 commissioner of commerce shall also adopt, pursuant to clause 271.36 (2)(c), rules permitting two or more employers, whether or not 272.1 they are in the same industry, to enter into agreements to pool 272.2 their liabilities under this chapter for the purpose of 272.3 qualifying as group self-insurers. With the approval of the 272.4 commissioner of commerce, any employer may exclude medical, 272.5 chiropractic and hospital benefits as required by this chapter. 272.6 An employer conducting distinct operations at different 272.7 locations may either insure or self-insure the other portion of 272.8 operations as a distinct and separate risk. An employer 272.9 desiring to be exempted from insuring liability for compensation 272.10 shall make application to the commissioner of commerce, showing 272.11 financial ability to pay the compensation, whereupon by written 272.12 order the commissioner of commerce, on deeming it proper, may 272.13 make an exemption. An employer may establish financial ability 272.14 to pay compensation by providing financial statements of the 272.15 employer to the commissioner of commerce. Upon ten days' 272.16 written notice the commissioner of commerce may revoke the order 272.17 granting an exemption, in which event the employer shall 272.18 immediately insure the liability. As a condition for the 272.19 granting of an exemption the commissioner of commerce may 272.20 require the employer to furnish security the commissioner of 272.21 commerce considers sufficient to insure payment of all claims 272.22 under this chapter, consistent with subdivision 2b. If the 272.23 required security is in the form of currency or negotiable 272.24 bonds, the commissioner of commerce shall deposit it with the 272.25state treasurercommissioner of finance. In the event of any 272.26 default upon the part of a self-insurer to abide by any final 272.27 order or decision of the commissioner of labor and industry 272.28 directing and awarding payment of compensation and benefits to 272.29 any employee or the dependents of any deceased employee, then 272.30 upon at least ten days' notice to the self-insurer, the 272.31 commissioner of commerce may by written order to thestate272.32treasurercommissioner of finance require the 272.33treasurercommissioner of finance to sell the pledged and 272.34 assigned securities or a part thereof necessary to pay the full 272.35 amount of any such claim or award with interest thereon. This 272.36 authority to sell may be exercised from time to time to satisfy 273.1 any order or award of the commissioner of labor and industry or 273.2 any judgment obtained thereon. When securities are sold the 273.3 money obtained shall be deposited in the state treasury to the 273.4 credit of the commissioner of commerce and awards made against 273.5 any such self-insurer by the commissioner of commerce shall be 273.6 paid to the persons entitled thereto by thestate treasurer273.7 commissioner of finance upon warrants prepared by the 273.8 commissioner of commerceand approved by the commissioner of273.9financeout of the proceeds of the sale of securities. Where 273.10 the security is in the form of a surety bond or personal 273.11 guaranty the commissioner of commerce, at any time, upon at 273.12 least ten days' notice and opportunity to be heard, may require 273.13 the surety to pay the amount of the award, the payments to be 273.14 enforced in like manner as the award may be enforced. 273.15 (2)(a) No association, corporation, partnership, sole 273.16 proprietorship, trust or other business entity shall provide 273.17 services in the design, establishment or administration of a 273.18 group self-insurance plan under rules adopted pursuant to this 273.19 subdivision unless it is licensed, or exempt from licensure, 273.20 pursuant to section 60A.23, subdivision 8, to do so by the 273.21 commissioner of commerce. An applicant for a license shall 273.22 state in writing the type of activities it seeks authorization 273.23 to engage in and the type of services it seeks authorization to 273.24 provide. The license shall be granted only when the 273.25 commissioner of commerce is satisfied that the entity possesses 273.26 the necessary organization, background, expertise, and financial 273.27 integrity to supply the services sought to be offered. The 273.28 commissioner of commerce may issue a license subject to 273.29 restrictions or limitations, including restrictions or 273.30 limitations on the type of services which may be supplied or the 273.31 activities which may be engaged in. The license is for a 273.32 two-year period. 273.33 (b) To assure that group self-insurance plans are 273.34 financially solvent, administered in a fair and capable fashion, 273.35 and able to process claims and pay benefits in a prompt, fair 273.36 and equitable manner, entities licensed to engage in such 274.1 business are subject to supervision and examination by the 274.2 commissioner of commerce. 274.3 (c) To carry out the purposes of this subdivision, the 274.4 commissioner of commerce may promulgate administrative rules 274.5 pursuant to sections 14.001 to 14.69. These rules may: 274.6 (i) establish reporting requirements for administrators of 274.7 group self-insurance plans; 274.8 (ii) establish standards and guidelines consistent with 274.9 subdivision 2b to assure the adequacy of the financing and 274.10 administration of group self-insurance plans; 274.11 (iii) establish bonding requirements or other provisions 274.12 assuring the financial integrity of entities administering group 274.13 self-insurance plans; 274.14 (iv) establish standards, including but not limited to 274.15 minimum terms of membership in self-insurance plans, as 274.16 necessary to provide stability for those plans; 274.17 (v) establish standards or guidelines governing the 274.18 formation, operation, administration, and dissolution of 274.19 self-insurance plans; and 274.20 (vi) establish other reasonable requirements to further the 274.21 purposes of this subdivision. 274.22 Sec. 26. Minnesota Statutes 2000, section 176.581, is 274.23 amended to read: 274.24 176.581 [PAYMENT TO STATE EMPLOYEES.] 274.25 Upon a warrant prepared by the commissioner of the 274.26 department of employee relationsand approved by the274.27commissioner of finance, and in accordance with the terms of the 274.28 order awarding compensation, thestate treasurercommissioner of 274.29 finance shall pay compensation to the employee or the employee's 274.30 dependent. These payments shall be made from money appropriated 274.31 for this purpose. 274.32 Sec. 27. Minnesota Statutes 2000, section 190.11, is 274.33 amended to read: 274.34 190.11 [CAMP GROUNDS AND MILITARY RESERVATIONS.] 274.35 The adjutant general shall have charge of the camp grounds 274.36 and military reservations of the state and shall be responsible 275.1 for the protection and safety thereof, and promulgate rules for 275.2 the maintenance of order thereon, for the enforcement of traffic 275.3 rules and for all other lawful rules as may be ordered for the 275.4 operation, care and preservation of existing facilities and 275.5 installations on all state military reservations. 275.6 The adjutant general shall keep in repair all state 275.7 buildings, and other improvements thereon, including water pipes 275.8 laid by the state on highways leading thereto and of all 275.9 military property connected with the grounds and may make such 275.10 further improvements thereon as the good of the service requires. 275.11 Private property may be acquired by condemnation, upon the 275.12 application of the adjutant general, for camp ground, rifle 275.13 range, and other military purposes. All damages, cost, and 275.14 expense incurred in condemning such property shall be paid by 275.15 thestate treasurercommissioner of finance, upon certificate of 275.16 the adjutant generaland warrant of the commissioner of finance, 275.17 from any unexpended balance of the military fund after meeting 275.18 the demands of the national guard. 275.19 Sec. 28. Minnesota Statutes 2000, section 241.08, 275.20 subdivision 1, is amended to read: 275.21 Subdivision 1. The chief executive officer of each 275.22 institution under the jurisdiction of the commissioner of 275.23 corrections shall have the care and custody of all money 275.24 belonging to inmates thereof which may come into the chief 275.25 executive officer's hands, keep accurate accounts thereof, and 275.26 pay them out under rules prescribed by law under section 243.23, 275.27 subdivision 3, or by the commissioner of corrections, taking 275.28 vouchers therefor. All such money received by any officer or 275.29 employee shall be paid to the chief executive officer 275.30 forthwith. Every such executive officer, at the close of each 275.31 month, or oftener if required by the commissioner, shall forward 275.32 to the commissioner a statement of the amount of all money so 275.33 received and the names of the inmates from whom received, 275.34 accompanied by a check for the amount, payable to thestate275.35treasurercommissioner of finance. On receipt of such 275.36 statement, the commissioner shall transmit the same to the 276.1 commissioner of finance, together with such check, who shall276.2deliver the same to the state treasurer. Upon the payment of 276.3 such check, the amount shall be credited to a fund to be known 276.4 as "Correctional Inmates Fund," for the institution from which 276.5 the same was received. All such funds shall be paid out by 276.6 thestate treasurercommissioner of finance upon vouchers duly 276.7 approved by the commissioner of corrections as in other cases. 276.8 The commissioner may permit a contingent fund to remain in the 276.9 hands of the executive officer of any such institution from 276.10 which necessary expenditure may from time to time be made. 276.11 Sec. 29. Minnesota Statutes 2000, section 241.10, is 276.12 amended to read: 276.13 241.10 [DISPOSAL OF FUNDS; CORRECTIONAL INSTITUTIONS.] 276.14 Every officer and employee of the several institutions 276.15 under the jurisdiction of the commissioner of corrections shall 276.16 pay to the accounting officer thereof any funds in the officer's 276.17 or employee's hands belonging to the institution. Every 276.18 accounting officer, at the close of each month or oftener, shall 276.19 forward to the commissioner of corrections a statement of the 276.20 amount and sources of all money received. On receipt of such 276.21 statement, the commissioner shall transmit the same to the 276.22 commissioner of finance, who shall deliver to the state276.23treasurera draft upon the accounting officer for the same, 276.24 specifying the funds to which it is to be credited. Upon 276.25 payment of such draft, the amount shall be so credited. 276.26 Sec. 30. Minnesota Statutes 2000, section 241.13, 276.27 subdivision 1, is amended to read: 276.28 Subdivision 1. [CONTINGENT ACCOUNT.] The commissioner of 276.29 corrections may permit a contingent account to remain in the 276.30 hands of the accounting officer of any such institution from 276.31 which expenditures may be made in case of actual emergency 276.32 requiring immediate payment to prevent loss or danger to the 276.33 institution or its inmates and for the purpose of paying 276.34 freight, purchasing produce, livestock and other commodities 276.35 requiring a cash settlement, and for the purpose of discounting 276.36 bills incurred, but in all cases subject to revision by the 277.1 commissioner of corrections. An itemized statement of every 277.2 expenditure made during the month from such account shall be 277.3 submitted to the commissioner under rules established by the 277.4 commissioner. If necessary, the commissioner shall make proper 277.5 requisition upon the commissioner of finance for a warrantupon277.6the state treasurerto secure the contingent account for each 277.7 institution. 277.8 Sec. 31. Minnesota Statutes 2000, section 244.19, 277.9 subdivision 7, is amended to read: 277.10 Subd. 7. [CERTIFICATE OF COUNTIES ENTITLED TO STATE AID.] 277.11 On or before January 1 of each year, until 1970 and on or before 277.12 April 1 thereafter, the commissioner of corrections shall 277.13 deliver to the commissioner of finance a certificate in 277.14 duplicate for each county of the state entitled to receive state 277.15 aid under the provisions of this section. Upon the receipt of 277.16 such certificate, the commissioner of finance shall draw a 277.17 warrantupon the state treasurerin favor of the county 277.18 treasurer for the amount shown by each certificate to be due to 277.19 the county specified. The commissioner of finance shall 277.20 transmit such warrant to the county treasurer together with a 277.21 copy of the certificate prepared by the commissioner of 277.22 corrections. 277.23 Sec. 32. Minnesota Statutes 2000, section 246.15, 277.24 subdivision 1, is amended to read: 277.25 Subdivision 1. The chief executive officer of each 277.26 institution under the jurisdiction of the commissioner of human 277.27 services shall have the care and custody of all money belonging 277.28 to inmates thereof which may come into the chief executive 277.29 officer's hands, keep accurate accounts thereof, and pay them 277.30 out under rules prescribed by law or by the commissioner of 277.31 human services, taking vouchers therefor. All such money 277.32 received by any officer or employee shall be paid to the chief 277.33 executive officer forthwith. Every such executive officer, at 277.34 the close of each month, or oftener if required by the 277.35 commissioner, shall forward to the commissioner a statement of 277.36 the amount of all money so received and the names of the inmates 278.1 from whom received, accompanied by a check for the amount, 278.2 payable to thestate treasurercommissioner of finance. On 278.3 receipt of such statement, the commissioner shall transmit the 278.4 same to the commissioner of finance, together with such check,278.5who shall deliver the same to the state treasurer. Upon the 278.6 payment of such check, the amount shall be credited to a fund to 278.7 be known as "Inmates Fund," for the institution from which the 278.8 same was received. All such funds shall be paid out by 278.9 thestate treasurercommissioner of finance upon vouchers duly 278.10 approved by the commissioner of human services as in other 278.11 cases. The commissioner may permit a contingent fund to remain 278.12 in the hands of the executive officer of any such institution 278.13 from which necessary expenditure may from time to time be made. 278.14 Sec. 33. Minnesota Statutes 2000, section 246.18, 278.15 subdivision 1, is amended to read: 278.16 Subdivision 1. [GENERALLY.] Except as provided in 278.17 subdivisions 2 and 4, every officer and employee of the several 278.18 institutions under the jurisdiction of the commissioner of human 278.19 services who has money belonging to an institution shall pay the 278.20 money to the accounting officer thereof. Every accounting 278.21 officer, at the close of each month or oftener, shall forward to 278.22 the commissioner of human services a statement of the amount and 278.23 sources of all money received. On receipt of such statement, 278.24 the commissioner shall transmit the same to the commissioner of 278.25 finance, who shall deliver to the state treasurera draft upon 278.26 the accounting officer for the same specifying the funds to 278.27 which it is to be credited. Upon payment of such draft, the 278.28 amount shall be so credited. 278.29 Sec. 34. Minnesota Statutes 2000, section 246.21, is 278.30 amended to read: 278.31 246.21 [CONTINGENT FUND.] 278.32 The commissioner of human services may permit a contingent 278.33 fund to remain in the hands of the accounting officer of any 278.34 such institution from which expenditures may be made in case of 278.35 actual emergency requiring immediate payment to prevent loss or 278.36 danger to the institution or its inmates and for the purpose of 279.1 paying freight, purchasing produce, livestock and other 279.2 commodities requiring a cash settlement, and for the purpose of 279.3 discounting bills incurred, but in all cases subject to revision 279.4 by the commissioner of human services. An itemized statement of 279.5 every expenditure made during the month from such fund shall be 279.6 submitted to the commissioner under rules established by the 279.7 commissioner. If necessary, the commissioner shall make proper 279.8 requisition upon the commissioner of finance for a warrantupon279.9the state treasurerto secure the contingent fund for each 279.10 institution. 279.11 Sec. 35. Minnesota Statutes 2001 Supplement, section 279.12 276.11, subdivision 1, is amended to read: 279.13 Subdivision 1. [GENERALLY.] As soon as practical after the 279.14 settlement day determined in section 276.09, the county 279.15 treasurer shall pay to thestate treasurercommissioner of 279.16 finance or the treasurer of a town, city, school district, or 279.17 special district, on the warrant of the county auditor, all 279.18 receipts of taxes levied by the taxing district and deliver up 279.19 all orders and other evidences of indebtedness of the taxing 279.20 district, taking triplicate receipts for them. The treasurer or 279.21 commissioner of finance shall file one of the receipts with the 279.22 county auditor, and shall return one by mail on the day of its 279.23 receipt to the clerk of the town, city, school district, or 279.24 special district to which payment was made. The clerk shall 279.25 keep the receipt in the clerk's office. Upon written request of 279.26 the taxing district, to the extent practicable, the county 279.27 treasurer shall make partial payments of amounts collected 279.28 periodically in advance of the next settlement and 279.29 distribution. A statement prepared by the county treasurer must 279.30 accompany each payment. It must state the years for which taxes 279.31 included in the payment were collected and, for each year, the 279.32 amount of the taxes and any penalties on the tax. Upon written 279.33 request of a taxing district, except school districts, the 279.34 county treasurer shall pay at least 70 percent of the estimated 279.35 collection within 30 days after the settlement date determined 279.36 in section 276.09. Within seven business days after the due 280.1 date, or 28 calendar days after the postmark date on the 280.2 envelopes containing real or personal property tax statements, 280.3 whichever is latest, the county treasurer shall pay to the 280.4 treasurer of the school districts 50 percent of the estimated 280.5 collections arising from taxes levied by and belonging to the 280.6 school district, unless the school district elects to receive 50 280.7 percent of the estimated collections arising from taxes levied 280.8 by and belonging to the school district after making a 280.9 proportionate reduction to reflect any loss in collections as 280.10 the result of any delay in mailing tax statements. In that 280.11 case, 50 percent of those adjusted, estimated collections shall 280.12 be paid by the county treasurer to the treasurer of the school 280.13 district within seven business days of the due date. The 280.14 remaining 50 percent of the estimated collections must be paid 280.15 to the treasurer of the school district within the next seven 280.16 business days of the later of the dates in the preceding 280.17 sentence, unless the school district elects to receive the 280.18 remainder of its estimated collections after a proportionate 280.19 reduction has been made to reflect any loss in collections as 280.20 the result of any delay in mailing tax statements. In that 280.21 case, the remaining 50 percent of those adjusted, estimated 280.22 collections shall be paid by the county treasurer to the 280.23 treasurer of the school district within 14 days of the due 280.24 date. The treasurer shall pay the balance of the amounts 280.25 collected to the state before June 30, or to a municipal 280.26 corporation or other body within 60 days after the settlement 280.27 date determined in section 276.09. After 45 days interest at an 280.28 annual rate of eight percent accrues and must be paid to the 280.29 taxing district. Interest must be paid upon appropriation from 280.30 the general revenue fund of the county. If not paid, it may be 280.31 recovered by the taxing district, in a civil action. 280.32 Sec. 36. Minnesota Statutes 2000, section 280.29, is 280.33 amended to read: 280.34 280.29 [PROCEEDS OF SALE, HOW DISTRIBUTED.] 280.35 The proceeds of any parcel of land so sold, to the amount 280.36 of taxes, penalties, interest, and costs charged thereon, shall 281.1 be distributed as provided by law for the distribution of the 281.2 like sums upon sales for delinquent taxes. The portion thereof 281.3 due to the state shall be paid to thestate treasurer upon the281.4draft of thecommissioner of finance, and the excess, if any, 281.5 above the taxes, penalties, interest, and costs charged upon the 281.6 land, shall be included in such draft and be paid in like manner 281.7 for the benefit of the state. If any parcel be sold for less 281.8 than the amount charged thereon, the state taxes shall first be 281.9 paid and the remainder, if any, distributed pro rata to the 281.10 several funds for which the taxes were levied. 281.11 Sec. 37. Minnesota Statutes 2000, section 293.06, is 281.12 amended to read: 281.13 293.06 [CONSIDERATION AND DETERMINATION OF REPORT.] 281.14 Upon the receipt of the report provided for in section 281.15 293.03, the commissioner shall determine, from information 281.16 possessed or obtained, whether the same is correct or otherwise. 281.17 If found correct, the commissioner shall determine therefrom the 281.18 amount of tax due from such income or annuity recipient, and 281.19 shall record the amount thereof and shall make a certificate of 281.20 taxes due thereon from such person; and, on or before the first 281.21 day of May, of each year, file the same with the commissioner of 281.22 financeand a duplicate thereof with the state treasurer; and 281.23 the commissioner of revenue shall have power, in case the report 281.24 is deemed incorrect, to make findings as to the amount of such 281.25 taxes due after hearing upon notice to the person interested, 281.26 and the findings shall have the same effect as the determination 281.27 of the amount of such taxes upon a report made as hereinbefore 281.28 provided. 281.29 Sec. 38. Minnesota Statutes 2001 Supplement, section 281.30 299D.03, subdivision 5, is amended to read: 281.31 Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines 281.32 and forfeited bail money, from traffic and motor vehicle law 281.33 violations, collected from persons apprehended or arrested by 281.34 officers of the state patrol, shall be paid by the person or 281.35 officer collecting the fines, forfeited bail money or 281.36 installments thereof, on or before the tenth day after the last 282.1 day of the month in which these moneys were collected, to the 282.2 county treasurer of the county where the violation occurred. 282.3 Three-eighths of these receipts shall be credited to the general 282.4 revenue fund of the county, except that in a county in a 282.5 judicial district under section 480.181, subdivision 1, 282.6 paragraph (b), this three-eighths share must be transmitted to 282.7 thestate treasurercommissioner of finance for deposit in the 282.8 state treasury and credited to the general fund. The other 282.9 five-eighths of these receipts shall be transmitted by that 282.10 officer to thestate treasurercommissioner of finance and must 282.11 be credited to the trunk highway fund. If, however, the 282.12 violation occurs within a municipality and the city attorney 282.13 prosecutes the offense, and a plea of not guilty is entered, 282.14 one-third of the receipts shall be credited to the general 282.15 revenue fund of the county, one-third of the receipts shall be 282.16 paid to the municipality prosecuting the offense, and one-third 282.17 shall be transmitted to thestate treasurercommissioner of 282.18 finance as provided in this subdivision. All costs of 282.19 participation in a nationwide police communication system 282.20 chargeable to the state of Minnesota shall be paid from 282.21 appropriations for that purpose. 282.22 (b) Notwithstanding any other provisions of law, all fines 282.23 and forfeited bail money from violations of statutes governing 282.24 the maximum weight of motor vehicles, collected from persons 282.25 apprehended or arrested by employees of the state of Minnesota, 282.26 by means of stationary or portable scales operated by these 282.27 employees, shall be paid by the person or officer collecting the 282.28 fines or forfeited bail money, on or before the tenth day after 282.29 the last day of the month in which the collections were made, to 282.30 the county treasurer of the county where the violation 282.31 occurred. Five-eighths of these receipts shall be transmitted 282.32 by that officer to thestate treasurercommissioner of finance 282.33 and shall be credited to the highway user tax distribution 282.34 fund. Three-eighths of these receipts shall be credited to the 282.35 general revenue fund of the county, except that in a county in a 282.36 judicial district under section 480.181, subdivision 1, 283.1 paragraph (b), this three-eighths share must be transmitted to 283.2 thestate treasurercommissioner of finance for deposit in the 283.3 state treasury and credited to the general fund. 283.4 Sec. 39. Minnesota Statutes 2000, section 352.05, is 283.5 amended to read: 283.6 352.05 [STATE TREASURERCOMMISSIONER OF FINANCE TO BE 283.7 TREASURER OF SYSTEM.] 283.8 Thestate treasurercommissioner of finance is ex officio 283.9 treasurer of the retirement funds of the system. The general 283.10 bond to the state shall cover all liability for actions as 283.11 treasurer of these funds. Funds of the system received by 283.12 thetreasurercommissioner of finance must be set aside in the 283.13 state treasury to the credit of the proper fund. Thetreasurer283.14 commissioner of finance shall deliver to the director copies of 283.15 all payroll abstracts of the state together with the 283.16 commissioner of finance's warrants covering the deductions made 283.17 on these payroll abstracts for the retirement fund. The 283.18 director shall have a list made of the commissioner of finance's 283.19 warrants. These warrants must then bedeposited with the state283.20treasurer to becredited to the retirement fund. Thetreasurer283.21 commissioner of finance shall pay out of this fund onlyon283.22warrants issued by the commissioner of finance,upon abstracts 283.23 signed by the director, or by the finance officer designated by 283.24 the director during the disability or the absence of the 283.25 director from the city of St. Paul, Minnesota. Abstracts for 283.26 investments may be signed by the executive director of the state 283.27 board of investment. 283.28 Sec. 40. Minnesota Statutes 2000, section 352B.03, 283.29 subdivision 2, is amended to read: 283.30 Subd. 2. [DUTIES OFTREASURERCOMMISSIONER OF FINANCE.] 283.31 Thestate treasurercommissioner of finance is ex officio 283.32 treasurer of the state patrol retirement fund. Thetreasurer's283.33 commissioner of finance's general bond to the state covers all 283.34 liability for actions as treasurer of the fund. 283.35 All money of the fund received by thetreasurer283.36 commissioner of finance under this chapter must be set aside in 284.1 the state treasury and credited to the state patrol retirement 284.2 fund. Thetreasurercommissioner of finance shall transmit, 284.3 monthly, to the director, a detailed statement showing all 284.4 credits to and disbursements from the fund. Thetreasurer284.5 commissioner of finance shall disburse money from the fund 284.6 onlyon warrants issued by the commissioner of financeupon 284.7 vouchers signed by the director. 284.8 Sec. 41. Minnesota Statutes 2000, section 354.06, 284.9 subdivision 3, is amended to read: 284.10 Subd. 3. [TREASURERCOMMISSIONER OF FINANCE.] Thestate284.11treasurercommissioner of finance shall be ex officio treasurer 284.12 of the association and thetreasurer'scommissioner's general 284.13 bond to the state shall cover any liabilities for acts as 284.14 treasurer of the association. Thestate treasurercommissioner 284.15 shall receive all moneys payable to the association and pay out 284.16 the same onlyon warrants issued by the commissioner of finance284.17 upon forms signed by the executive director. 284.18 Sec. 42. Minnesota Statutes 2000, section 354.52, 284.19 subdivision 5, is amended to read: 284.20 Subd. 5. Thestate treasurercommissioner of finance, the 284.21 several county treasurers, and the treasurers of the various 284.22 school districts and institutions to which the provisions of 284.23 this chapter apply shall be officially liable for the receipt, 284.24 handling, and disbursement of all moneys coming into their hands 284.25 belonging to the fund and the sureties on the official bonds of 284.26 each of these treasurers and the commissioner of finance shall 284.27 be liable for such moneys the same as for all other moneys 284.28 belonging to the school funds of this state. 284.29 Sec. 43. Minnesota Statutes 2000, section 385.05, is 284.30 amended to read: 284.31 385.05 [RECEIPT AND PAYMENT OF MONEY.] 284.32 The county treasurer shall receive all moneys directed by 284.33 law to be paid to the treasurer and pay them out only on the 284.34 order of the proper authority. All moneys belonging to the 284.35 county shall be paid out upon the order of the county board, 284.36 signed by the chair thereof, and attested by the county auditor, 285.1 or upon the warrant of the county auditor upon the presentation 285.2 to the auditor of the proper certificate of the person or 285.3 tribunal allowing the same, and not otherwise. All moneys due 285.4 the state, arising from the collection of taxes or from other 285.5 sources, shall be paid upon the draft of the commissioner of 285.6 finance, drawn in favor of the state treasurer,and a duplicate 285.7 copy of the receipt for payment of such draft shall be forwarded 285.8 by thestate treasurercommissioner of finance to the county 285.9 auditor, who shall preserve the same, and credit the county 285.10 treasurer with the amount thereof. The county auditor shall 285.11 issue a warrant in favor of the state for the amount of such 285.12 draft and the county treasurer shall pay the warrant forthwith 285.13 without endorsement thereof by thestate treasurercommissioner 285.14 of finance or other state official, and without expense to the 285.15 state for collection charges. 285.16 Sec. 44. Minnesota Statutes 2000, section 475A.04, is 285.17 amended to read: 285.18 475A.04 [DEBT SERVICE DEFICIENCY LOANS.] 285.19 Subdivision 1. [PROCEDURE.] In the event that funds 285.20 sufficient to pay all of the principal and interest due on any 285.21 guaranteed bond are not in the hands of the municipal treasurer 285.22 or the paying agent at least 15 days before the due date, the 285.23 treasurer or agent shall report the amount of the deficiency to 285.24 the paying agent and the auditor who shall grant a loan to the 285.25 issuer in this amount and shall certify to the issuer, the 285.26 paying agent, and the auditor and treasurer of each county in 285.27 which property subject to taxation by the issuer is situated, 285.28 the amount of the loan and interest to accrue thereon to the due 285.29 date of the loan, and the commissioner of finance shall issue a 285.30 warrant for the principal amount andthe state treasurershall 285.31 remit it to the paying agent on or before the due date. If the 285.32 municipal treasurer fails to deposit funds with the paying agent 285.33 sufficient to pay all principal and interest due on any 285.34 guaranteed bond on any date, without having previously given the 285.35 notice herein required, the paying agent may report the amount 285.36 of the deficiency to the commissioner of finance, who shall 286.1 forthwith grant a loan to the issuer for this amount plus 286.2 interest to accrue thereon for one month at the rate represented 286.3 by the coupons then due, and the loan shall be certified and 286.4 remitted as provided above. The paying agent may advance its 286.5 own funds for the payment of any guaranteed bonds and interest 286.6 due for which it has not received sufficient funds from the 286.7 municipality, and may contract with the municipality to make 286.8 such advances, and shall be entitled to reimbursement therefor 286.9 from the proceeds of the loan, with interest at the rate 286.10 represented by the coupons due. The issuing municipality shall 286.11 give a receipt to the commissioner of finance for the amount of 286.12 the loan and interest. 286.13 Subd. 2. [DUE DATE; INTEREST; PREPAYMENT.] Each loan shall 286.14 become due on December 31 in the year following the year when a 286.15 tax is levied for its payment as provided in subdivision 3, and 286.16 shall bear interest from the date of its disbursement until 286.17 paid, at a rate determined by the commissioner of finance, not 286.18 less than the average annual rate payable on state municipal aid 286.19 bonds most recently issued before such disbursement, and in no 286.20 event less than 3-1/2 percent per annum. Any loan may be 286.21 prepaid at any time with interest to the date of prepayment, by 286.22 remittance to the commissioner of finance, who shall deposit the 286.23 prepaymentwith the state treasurerto the credit of the 286.24 municipal bond guarantee fund and shall issue a receipt to the 286.25 municipality with a copy to the treasurer of each county in 286.26 which taxable property within the municipality is situated. 286.27 Interest on loans not prepaid shall be due at the same time as 286.28 principal. 286.29 Subd. 3. [LEVY.] Before October 1 in each year the state 286.30 auditor shall certify to the county auditor and treasurer of 286.31 each county containing taxable property situated within any 286.32 municipality having an outstanding loan, and to the 286.33 municipality, the amount, if any, necessary to be levied to 286.34 produce the total amount of principal and interest to become due 286.35 in the next ensuing year on such loan plus the amount of any 286.36 guaranty fee unpaid. After receipt of the certification each 287.1 county auditor, upon ascertaining the current year's net tax 287.2 capacity of all taxable property within the municipality which 287.3 is situated within that county, and upon ascertaining from the 287.4 county auditors of other counties the net tax capacity of any 287.5 such property situated within their counties, shall extend upon 287.6 the tax rolls an ad valorem tax upon all such property within 287.7 that county, in an amount equal to that proportion of the total 287.8 amount certified by the secretary which the net tax capacity of 287.9 such property bears to the net tax capacity of all taxable 287.10 property within the municipality. 287.11 Subd. 4. [FIRST LIEN.] Each loan shall be a first lien and 287.12 charge on all collections of taxes levied on property by the 287.13 municipality to which the loan is granted, which are due and 287.14 payable on and after October 31 in the year in which the loan is 287.15 due. Unless a receipt for the prepayment thereof has 287.16 theretofore been filed with the treasurer of each county in 287.17 which property taxable by the municipality to which the loan was 287.18 granted is situated, each such treasurer shall deduct from the 287.19 first such taxes to be distributed to the municipality the full 287.20 amount of the tax extended pursuant to subdivision 3, and shall 287.21 remit the same to the commissioner of finance, who shall deposit 287.22 the remittancewith the state treasurerto the credit of the 287.23 municipal bond guaranty fund and shall issue a receipt to the 287.24 municipality with a copy to the county treasurer. 287.25 Sec. 45. Minnesota Statutes 2000, section 475A.06, 287.26 subdivision 2, is amended to read: 287.27 Subd. 2. [FORMALITIES.] The bonds shall be issued and sold 287.28 upon sealed bids and upon such notice, at such price, at such 287.29 times, in such form and denominations, bearing interest at such 287.30 rate or rates, maturing in such amounts and on such dates, 287.31 either without option of prepayment or subject to prepayment 287.32 upon such notice and at such times and prices, payable at such 287.33 bank or banks within or outside the state, with such provisions 287.34 for registration, conversion, and exchange and for the issuance 287.35 of notes in anticipation of the sale or delivery of definitive 287.36 bonds, and in accordance with such further rules, as the 288.1 commissioner of finance shall determine, subject to the approval 288.2 of the attorney general, but not subject to chapter 14, 288.3 including section 14.386. The bonds shall be executed by the 288.4 commissioner of financeand attested by the state treasurer288.5 undertheirofficialsealsseal. Thesignaturessignature of 288.6 theofficerscommissioner on the bonds and any appurtenant 288.7 interest coupons andtheir sealsthe seal may be printed, 288.8 lithographed, engraved, or stamped thereon, except that each 288.9 bond shall be authenticated by the manual signature on its face 288.10 ofone of the officersthe commissioner or of an officer of a 288.11 bank designated by them as authenticating agent. The 288.12 commissioner of finance shall ascertain and certify to the 288.13 purchasers of the bonds the performance and existence of all 288.14 acts, conditions, and things necessary to make them valid and 288.15 binding general obligations of the state of Minnesota, subject 288.16 to the approval of the attorney general. 288.17 Sec. 46. Minnesota Statutes 2000, section 481.01, is 288.18 amended to read: 288.19 481.01 [BOARD OF LAW EXAMINERS; EXAMINATIONS; ALTERNATIVE 288.20 DISPUTE FEES.] 288.21 The supreme court shall, by rule from time to time, 288.22 prescribe the qualifications of all applicants for admission to 288.23 practice law in this state, and shall appoint a board of law 288.24 examiners, which shall be charged with the administration of the 288.25 rules and with the examination of all applicants for admission 288.26 to practice law. The board shall consist of not less than 288.27 three, nor more than seven, attorneys at law, who shall be 288.28 appointed each for the term of three years and until a successor 288.29 qualifies. The supreme court may fill any vacancy in the board 288.30 for the unexpired term and in its discretion may remove any 288.31 member of it. The board shall have a seal and shall keep a 288.32 record of its proceedings, of all applications for admission to 288.33 practice, and of persons admitted to practice upon its 288.34 recommendation. At least two times a year the board shall hold 288.35 examinations and report the result of them, with its 288.36 recommendations, to the supreme court. Upon consideration of 289.1 the report, the supreme court shall enter an order in the case 289.2 of each person examined, directing the board to reject or to 289.3 issue to the person a certificate of admission to practice. The 289.4 board shall have such officers as may, from time to time, be 289.5 prescribed and designated by the supreme court. The fee for 289.6 examination shall be fixed, from time to time, by the supreme 289.7 court. This fee, and any other fees which may be received 289.8 pursuant to any rules the supreme court adopts governing the 289.9 practice of law and court-related alternative dispute resolution 289.10 practices shall be paid to thestate treasurercommissioner of 289.11 finance and shall constitute a special fund in the state 289.12 treasury which shall be exempt from section 16A.127. The money 289.13 in this fund is appropriated annually to the supreme court for 289.14 the payment of compensation and expenses of the members of the 289.15 board of law examiners and for otherwise regulating the practice 289.16 of law. The money in the fund shall never cancel. Payments 289.17 from it shall be made by thestate treasurer, upon warrants of289.18the commissioner of finance issuedcommissioner of finance upon 289.19 vouchers signed by one of the justices of the supreme court. 289.20 The members of the board shall have compensation and allowances 289.21 for expenses as may, from time to time, be fixed by the supreme 289.22 court. 289.23 Sec. 47. Minnesota Statutes 2000, section 490.123, 289.24 subdivision 2, is amended to read: 289.25 Subd. 2. [TREASURERCOMMISSIONER OF FINANCE.] Thestate289.26treasurercommissioner of finance shall be ex officio treasurer 289.27 of the judges' retirement fund and thetreasurer's289.28 commissioner's general bond to the state shall be so conditioned 289.29 as to cover all liability for acting as treasurer of this fund. 289.30 All moneys received by thetreasurercommissioner pursuant to 289.31 this section shall be set aside in the state treasury to the 289.32 credit of the judges' retirement fund. Thetreasurer289.33 commissioner shall transmit monthly to the executive director 289.34 described in section 352.03, subdivision 5, a detailed statement 289.35 of all amounts so received and credited to the fund. 289.36 Thetreasurercommissioner shall pay out the fund onlyon290.1warrants issued by the commissioner of finance,upon vouchers 290.2 signed by said executive director; provided that vouchers for 290.3 investment may be signed by the secretary of the state board of 290.4 investment. 290.5 Sec. 48. Minnesota Statutes 2000, section 525.161, is 290.6 amended to read: 290.7 525.161 [NO SURVIVING SPOUSE OR KINDRED, NOTICES TO 290.8 ATTORNEY GENERAL.] 290.9 When it appears from the petition or application for 290.10 administration of the estate, or otherwise, in a proceeding in 290.11 the court that the intestate left surviving no spouse or 290.12 kindred, the court shall give notice of such fact and notice of 290.13 all subsequent proceedings in such estate to the attorney 290.14 general forthwith; and the attorney general shall protect the 290.15 interests of the state during the course of administration. The 290.16 residue which escheats to the state shall be transmitted to the 290.17 attorney general. All moneys, stocks, bonds, notes, mortgages 290.18 and other securities, and all other personal property so 290.19 escheated shall then be given into the custody of thestate290.20treasurer, who shall notify thecommissioner of financethereof290.21andwho shall immediately credit the moneys received to the 290.22 general fund. Thetreasurercommissioner of finance shall hold 290.23 such stocks, bonds, notes, mortgages and other securities, and 290.24 all other personal property, subject to such investment, sale or 290.25 other disposition as the state board of investment may direct 290.26 pursuant to section 11A.04, clause (9). The attorney general 290.27 shall immediately report to the state executive council all real 290.28 property received in the individual escheat, and any sale or 290.29 disposition of such real estate shall be made in accordance with 290.30 sections 94.09 to 94.16. 290.31 Sec. 49. Minnesota Statutes 2000, section 525.841, is 290.32 amended to read: 290.33 525.841 [ESCHEAT RETURNED.] 290.34 In all such cases the commissioner of finance shall be 290.35 furnished with a certified copy of the court's order assigning 290.36 the escheated property to the persons entitled thereto, and upon 291.1 notification of payment of the estate tax, the commissioner of 291.2 finance shall draw a warranton the state treasurer,or execute 291.3 a proper conveyance to the persons designated in such order. In 291.4 the event any escheated property has been sold pursuant to 291.5 sections 11A.04, clause (9), and 11A.10, subdivision 2, or 94.09 291.6 to 94.16, then the warrant shall be for the appraised value as 291.7 established during the administration of the decedent's estate. 291.8 There is hereby annually appropriated from any moneys in the 291.9 state treasury not otherwise appropriated an amount sufficient 291.10 to make payment to all such designated persons. No interest 291.11 shall be allowed on any amount paid to such persons. 291.12 Sec. 50. [INSTRUCTION TO REVISOR.] 291.13 (a) The revisor shall delete "treasurer," "state 291.14 treasurer," and "treasurer-elect," as appropriate, and make 291.15 necessary grammatical changes in the following sections of 291.16 Minnesota Statutes: 3C.12, subdivision 2; 4.06; 8.02, 291.17 subdivision 2; 8.05; 10.01; 15.16, subdivision 3; 16A.125, 291.18 subdivision 5; 16B.05, subdivision 2; 43A.08, subdivisions 1 and 291.19 1a; 43A.18, subdivision 4; 89.43; 116.16, subdivision 3; 116.17, 291.20 subdivision 5; 117.135, subdivision 2; 126C.55, subdivision 3; 291.21 161.06, subdivision 1; 167.51, subdivision 2; 174.51, 291.22 subdivision 5; 204B.11, subdivision 1; 204D.10, subdivision 2; 291.23 209.01, subdivision 2; 241.27, subdivision 4; 270.74; 272.68, 291.24 subdivision 1; 352.01, subdivision 3; 352B.01, subdivision 4; 291.25 352C.021, subdivision 2; 352D.02, subdivision 1; 355.621, 291.26 subdivision 4; and 475A.06, subdivision 5. 291.27 (b) The revisor shall delete "state treasurer," "state 291.28 treasurer's," "treasurer," and "treasurer's" where it refers to 291.29 the state treasurer, and substitute "commissioner of finance" 291.30 and "commissioner of finance's" respectively in the following 291.31 sections of Minnesota Statutes: 6.60; 7.06; 7.09; 7.10; 7.12, 291.32 subdivision 1; 7.19; 7.193; 7.20; 7.22; 7.24; 7.25; 7.27; 9.031; 291.33 11A.04; 11A.07, subdivision 4; 11A.10, subdivisions 1 and 4; 291.34 11A.15, subdivisions 3 and 5; 12.24, subdivision 2; 15.73, 291.35 subdivision 3; 16A.011, subdivision 15; 16A.126, subdivision 3; 291.36 16A.127, subdivision 7; 16A.13, subdivisions 1 and 2a; 16A.131, 292.1 subdivision 1; 16A.27, subdivisions 1 and 2; 16A.45, subdivision 292.2 1; 16A.672, subdivision 11; 31.15; 41B.17, subdivision 3; 292.3 46.041, subdivision 1; 46.34; 48A.03, subdivisions 2, 4, and 5; 292.4 49.24, subdivision 7; 51A.51, subdivisions 1, 2, and 3a; 52.06, 292.5 subdivision 1; 52.20, subdivision 5; 53.03, subdivisions 1 and 292.6 6; 56.02; 60B.47; 60K.03, subdivisions 1, 5, and 6; 60K.13, 292.7 subdivision 3; 79.34, subdivision 1; 79A.04, subdivisions 5, 6, 292.8 7, and 10; 79A.071; 79A.15; 79A.24, subdivision 4; 79A.25, 292.9 subdivision 3; 82.24, subdivision 8; 82.34, subdivisions 1 and 292.10 5; 84.153; 84.415, subdivision 5; 84A.04, subdivisions 3 and 4; 292.11 84A.23, subdivision 3; 84A.33, subdivision 4; 85A.05, 292.12 subdivision 4; 90.173; 92.21, subdivision 1; 92.23; 92.24; 292.13 93.17; 93.20, subdivisions 7, 19, and 31; 94.346, subdivision 2; 292.14 97A.055, subdivision 2; 97A.065, subdivision 2; 103I.521; 292.15 115.77, subdivision 2; 115A.54, subdivision 3; 115A.58, 292.16 subdivision 4; 116.16, subdivision 8; 116.17, subdivision 4; 292.17 116J.64, subdivisions 6, 7, and 10; 116R.11, subdivision 2; 292.18 126C.68, subdivision 3; 126C.69, subdivision 14; 127A.09, 292.19 subdivision 3; 141.25, subdivision 5; 141.26, subdivision 3; 292.20 144.09; 144.10; 144.226, subdivision 4; 144.7022, subdivision 4; 292.21 149A.06, subdivision 4; 149A.20, subdivision 8; 149A.30, 292.22 subdivision 2; 149A.40, subdivision 8; 149A.50, subdivision 6; 292.23 149A.51, subdivision 7; 149A.97, subdivision 7; 161.04, 292.24 subdivision 2; 161.05, subdivisions 1, 2, 4, and 5; 161.081, 292.25 subdivision 2; 161.36, subdivision 5; 161.41, subdivision 3; 292.26 162.16; 163.051, subdivision 2; 168.33, subdivision 2; 168.67; 292.27 168C.11, subdivision 1; 169.781, subdivision 7; 174.50, 292.28 subdivision 3; 174.51, subdivision 4; 176.129, subdivisions 1, 292.29 7, and 8; 176.181, subdivision 5; 176.421, subdivision 4; 292.30 176.591, subdivisions 2 and 3; 193.23, subdivision 1; 214.13, 292.31 subdivision 1; 222.025; 223.17, subdivision 4; 231.17; 237.11; 292.32 240.10; 240.15, subdivision 6; 240.22; 241.09; 243.48, 292.33 subdivision 1; 245.4932, subdivision 4; 246.16; 246.18, 292.34 subdivision 2a; 246.41, subdivision 2; 246.51, subdivision 1; 292.35 248.07, subdivisions 8 and 12; 256.89; 256.90; 256.92; 256B.041, 292.36 subdivision 5; 256B.0625, subdivision 20; 256B.0945, subdivision 293.1 3; 256F.10, subdivision 10; 257.69, subdivision 2; 260B.331, 293.2 subdivision 6; 260C.331, subdivision 6; 270.45; 271.12; 273.02, 293.3 subdivision 6; 282.19; 282.226; 282.33, subdivision 1; 284.28, 293.4 subdivisions 8 and 9; 290.431; 290.432; 293.08; 293.09; 293.11; 293.5 296A.03, subdivision 5; 297E.02, subdivision 3; 298.39; 298.396; 293.6 299F.17, subdivision 1; 299F.60, subdivision 4; 300.19; 293.7 302A.771; 303.07, subdivision 1; 303.16, subdivision 2; 303.19, 293.8 subdivision 2; 303.25, subdivision 3; 317A.771; 322B.86; 293.9 325A.06, subdivision 3; 325G.415; 332.15, subdivision 4; 332.30; 293.10 332.55; 340A.409, subdivision 1; 340A.904, subdivision 2; 293.11 341.10; 352.04, subdivision 4; 352B.02, subdivisions 1b and 1d; 293.12 353.05; 353B.06, subdivision 1; 354.07, subdivision 4; 357.021, 293.13 subdivisions 1a, 2, 6, and 7; 357.022; 357.08; 360.017, 293.14 subdivision 2; 385.20; 446A.085, subdivision 3; 446A.16, 293.15 subdivisions 1 and 2; 458A.03, subdivision 3; 462A.17, 293.16 subdivision 3; 462A.18; 469.177, subdivision 11; 475A.06, 293.17 subdivision 4; 480.058, subdivision 2; 480.175, subdivision 2; 293.18 485.018, subdivision 5; 487.31, subdivision 1; 487.32, 293.19 subdivision 3; 487.33, subdivision 5; 490.102, subdivision 6; 293.20 508.75; 508.77; 508.82, subdivision 1; 508A.22, subdivision 3; 293.21 508A.77; 508A.82, subdivision 1; 517.08, subdivision 1c; 293.22 518.165, subdivision 3; 525.033; 563.01, subdivisions 9 and 10; 293.23 574.261, subdivisions 1, 2, and 3; 574.264, subdivision 1; 293.24 609.101, subdivisions 3 and 4; 611.20, subdivisions 2 and 3; and 293.25 626.85, subdivisions 2 and 3. 293.26 (c) The revisor shall recodify Minnesota Statutes, chapter 293.27 7, in Minnesota Statutes, chapter 16A. 293.28 (d) The revisor shall delete "state treasurer" where it 293.29 means the state treasurer of Minnesota and substitute 293.30 "commissioner of finance" in Minnesota Rules. 293.31 Sec. 51. [REPEALER.] 293.32 Minnesota Statutes 2000, section 7.21, is repealed. 293.33 Sec. 52. [EFFECTIVE DATE.] 293.34 This article is effective January 6, 2003. 293.35 ARTICLE 20 293.36 DEPARTMENT OF REVENUE POLICY PROVISIONS 294.1 Section 1. Minnesota Statutes 2000, section 270.063, 294.2 subdivision 4, is amended to read: 294.3 Subd. 4. [FEDERAL TAX REFUND OFFSET FEES; TIME LIMIT FOR 294.4 SUBMITTING CLAIMS FOR OFFSET.] For fees charged by the 294.5 department of the treasury of the United States for the offset 294.6 of federal tax refunds that are deducted from the refund amounts 294.7 remitted to the commissioner, the unpaid debts of the taxpayers 294.8 whose refunds are being offset to satisfy the debts are reduced 294.9 only by the actual amount of the refund payments received by the 294.10 commissioner. Notwithstanding any other provision of law to the 294.11 contrary, a claim for the offset of a federal tax refund must be 294.12 submitted to the department of the treasury of the United States 294.13 within ten years after the date of the assessment of the tax 294.14 owed by the taxpayer whose refund is to be offset to satisfy the 294.15 debt. 294.16[EFFECTIVE DATE.] This section is effective for claims for 294.17 offset that were submitted before and are pending on the date of 294.18 final enactment, and for claims submitted on or after the day 294.19 following final enactment. 294.20 Sec. 2. Minnesota Statutes 2001 Supplement, section 294.21 270.691, subdivision 8, is amended to read: 294.22 Subd. 8. [EXPIRATION DATE.] The program authorized under 294.23 this section terminates on June 30,20022003. 294.24[EFFECTIVE DATE.] This section is effective the day 294.25 following final enactment. 294.26 Sec. 3. Minnesota Statutes 2000, section 273.125, 294.27 subdivision 4, is amended to read: 294.28 Subd. 4. [PETITIONS OF GRIEVANCE.] A person who claims 294.29 that the person's manufactured home has been unfairly or 294.30 unequally assessed, or that the property has been assessed at a 294.31 valuation greater than its real or actual value, or that the tax 294.32 levied against it is illegal, in whole or in part, or has been 294.33 paid, or that the property is exempt from the tax so levied, may 294.34 have the validity of the claim, defense, or objection determined 294.35 in court. The determination must be made by the district court 294.36 of the county in which the tax is levied or by the tax court. A 295.1 person can request the determination by filing a petition for it 295.2 in the office of the court administrator of the district court 295.3 on or before the later of September 1 of the year in which the 295.4 tax becomes payable or 30 days after the postmark on the 295.5 envelope containing the property tax statement for the 295.6 property. A petition for determination under this section may 295.7 be transferred by the district court to the tax court. 295.8[EFFECTIVE DATE.] This section is effective for taxes 295.9 payable in 2003 and thereafter. 295.10 Sec. 4. Minnesota Statutes 2001 Supplement, section 295.11 275.71, subdivision 4, is amended to read: 295.12 Subd. 4. [ADJUSTED LEVY LIMIT BASE.] (a) For taxes levied 295.13 in2001 and2002, the adjusted levy limit base is equal to 295.14 the sum of the levy limit base computed under subdivisions 2 and 295.15 3 or section 275.72, plus, in the case of a city, the amount it 295.16 was certified to receive in calendar year 2001 under section 295.17 273.166, multiplied by: 295.18 (1) one plus a percentage equal to the percentage growth in 295.19 the implicit price deflator; 295.20 (2) one plus a percentage equal to the percentage increase 295.21 in number of households, if any, for the most recent 12-month 295.22 period for which data is available; and 295.23 (3) one plus a percentage equal to 50 percent of the 295.24 percentage increase in the taxable market value of the 295.25 jurisdiction due to new construction of class 3 property, as 295.26 defined in section 273.13, subdivision 24, except for 295.27 state-assessed utility and railroad operating property, for the 295.28 most recent year for which data is available. 295.29 (b) For counties only, for taxes levied in 2001 and 2002, 295.30 the adjusted levy limit base is also reduced by any amount of 295.31 levy reduction required under section 275.07, subdivision 1, 295.32 paragraph (b), clause (ii). 295.33[EFFECTIVE DATE.] This section is effective for taxes 295.34 payable in 2003. 295.35 Sec. 5. Minnesota Statutes 2000, section 278.01, 295.36 subdivision 1, is amended to read: 296.1 Subdivision 1. [DETERMINATION OF VALIDITY.] (a) Any person 296.2 having personal property, or any estate, right, title, or 296.3 interest in or lien upon any parcel of land, who claims that 296.4 such property has been partially, unfairly, or unequally 296.5 assessed in comparison with other property in the (1) city, or 296.6 (2) county, or (3) in the case of a county containing a city of 296.7 the first class, the portion of the county excluding the first 296.8 class city, or that the parcel has been assessed at a valuation 296.9 greater than its real or actual value, or that the tax levied 296.10 against the same is illegal, in whole or in part, or has been 296.11 paid, or that the property is exempt from the tax so levied, may 296.12 have the validity of the claim, defense, or objection determined 296.13 by the district court of the county in which the tax is levied 296.14 or by the tax court by serving one copy of a petition for such 296.15 determination upon the county auditor, one copy on the county 296.16 attorney, one copy on the county treasurer, and three copies on 296.17 the county assessor. The county assessor shall immediately 296.18 forward one copy of the petition to the appropriate governmental 296.19 authority in a home rule charter or statutory city or town in 296.20 which the property is located if that city or town employs its 296.21 own certified assessor. A copy of the petition shall also be 296.22 forwarded by the assessor to the school board of the school 296.23 district in which the property is located. 296.24 (b) In counties where the office of county treasurer has 296.25 been combined with the office of county auditor, the county may 296.26 elect to require the petitioner to serve the number of copies as 296.27 determined by the county. The county assessor shall immediately 296.28 forward one copy of the petition to the appropriate governmental 296.29 authority in a home rule charter or statutory city or town in 296.30 which the property is located if that city or town employs its 296.31 own certified assessor. A list of petitioned properties, 296.32 including the name of the petitioner, the identification number 296.33 of the property, and the estimated market value, shall be sent 296.34 on or before the first day of July by the county 296.35 auditor/treasurer to the school board of the school district in 296.36 which the property is located. 297.1 (c) For all counties, the petitioner must file the copies 297.2 with proof of service, in the office of the court administrator 297.3 of the district court on or beforeMarch 31the later of April 297.4 30 of the year in which the tax becomes payable or 30 days after 297.5 the postmark on the envelope containing the property tax 297.6 statement for the property. A petition for determination under 297.7 this section may be transferred by the district court to the tax 297.8 court. An appeal may also be taken to the tax court under 297.9 chapter 271 at any time following receipt of the valuation 297.10 notice required by section 273.121 but prior toApril 1 of the297.11year in which the taxes are payablethe deadline in this 297.12 paragraph. 297.13[EFFECTIVE DATE.] This section is effective for taxes 297.14 payable in 2003 and thereafter. 297.15 Sec. 6. Minnesota Statutes 2000, section 279.01, 297.16 subdivision 3, is amended to read: 297.17 Subd. 3. [AGRICULTURAL PROPERTY.] In the case of class 1b 297.18 agricultural homestead, class 2a agricultural homestead 297.19 property, and class 2b(3) agricultural nonhomestead property, no 297.20 penalties shall attach to the second one-half property tax 297.21 payment as provided in this section if paid by November 15. 297.22 Thereafter for class 1b agricultural homestead and class 2a 297.23 homestead property, on November 16 following, a penalty of six 297.24 percent shall accrue and be charged on all such unpaid taxes and 297.25 on December 1 following, an additional two percent shall be 297.26 charged on all such unpaid taxes. Thereafter for class 2b(3) 297.27 agricultural nonhomestead property, on November 16 following, a 297.28 penalty of eight percent shall accrue and be charged on all such 297.29 unpaid taxes and on December 1 following, an additional four 297.30 percent shall be charged on all such unpaid taxes. 297.31 If the owner of class 1b agricultural homestead, class 2a, 297.32 or class 2b(3) agricultural property receives a consolidated 297.33 property tax statement that shows only an aggregate of the taxes 297.34 and special assessments due on that property and on other 297.35 property not classified as class 1b agricultural homestead, 297.36 class 2a, or class 2b(3) agricultural property, the aggregate 298.1 tax and special assessments shown due on the property by the 298.2 consolidated statement will be due on November 15provided that298.3at least 50 percent of the property's market value is classified298.4class 1b agricultural, class 2a, or class 2b(3) agricultural. 298.5[EFFECTIVE DATE.] This section is effective for taxes 298.6 payable in 2003 and thereafter. 298.7 Sec. 7. Minnesota Statutes 2000, section 289A.19, 298.8 subdivision 1, is amended to read: 298.9 Subdivision 1. [FIDUCIARY INCOME, ENTERTAINMENT TAX, AND 298.10 INFORMATION RETURNS.] When, in the commissioner's judgment, good 298.11 cause exists, the commissioner may extend the time for filing 298.12 entertainment tax returns for not more than six months.If an298.13extension to file the federal fiduciary income tax return or298.14information return has been granted under section 6081 of the298.15Internal Revenue Code, the time for filing the state return is298.16extended for that period. The commissioner may require the298.17taxpayer to file a tentative return when the regularly required298.18return is due, and to pay a tax on the basis of the tentative298.19return at the times required for the payment of taxes on the298.20basis of the regularly required return from the taxpayer.The 298.21 commissioner shall grant an automatic extension of six months to 298.22 file a partnership, "S" corporation, or fiduciary income tax 298.23 return if all of the taxes imposed on the entity for the year by 298.24 chapter 290 and section 289A.08, subdivision 7, have been paid 298.25 by the date prescribed by section 289A.18, subdivision 1. 298.26[EFFECTIVE DATE.] This section is effective for returns due 298.27 after December 31, 2002. 298.28 Sec. 8. Minnesota Statutes 2000, section 295.53, 298.29 subdivision 1, is amended to read: 298.30 Subdivision 1. [EXEMPTIONS.] (a) The following payments 298.31 are excluded from the gross revenues subject to the hospital, 298.32 surgical center, or health care provider taxes under sections 298.33 295.50 to 295.57: 298.34 (1) payments received for services provided under the 298.35 Medicare program, including payments received from the 298.36 government, and organizations governed by sections 1833 and 1876 299.1 of title XVIII of the federal Social Security Act, United States 299.2 Code, title 42, section 1395, and enrollee deductibles, 299.3 coinsurance, and copayments, whether paid by the Medicare 299.4 enrollee or by a Medicare supplemental coverage as defined in 299.5 section 62A.011, subdivision 3, clause (10). Payments for 299.6 services not covered by Medicare are taxable; 299.7 (2) medical assistance payments including payments received 299.8 directly from the government or from a prepaid plan; 299.9 (3) payments received for home health care services; 299.10 (4) payments received from hospitals or surgical centers 299.11 for goods and services on which liability for tax is imposed 299.12 under section 295.52 or the source of funds for the payment is 299.13 exempt under clause (1), (2), (7), (8), (10), (13), or (20); 299.14 (5) payments received from health care providers for goods 299.15 and services on which liability for tax is imposed under this 299.16 chapter or the source of funds for the payment is exempt under 299.17 clause (1), (2), (7), (8), (10), (13), or (20); 299.18 (6) amounts paid for legend drugs, other than nutritional 299.19 products, to a wholesale drug distributor who is subject to tax 299.20 under section 295.52, subdivision 3, reduced by reimbursements 299.21 received for legend drugsunder clauses (1), (2), (7), and299.22(8)otherwise exempt under chapter 295; 299.23 (7) payments received under the general assistance medical 299.24 care program including payments received directly from the 299.25 government or from a prepaid plan; 299.26 (8) payments received for providing services under the 299.27 MinnesotaCare program including payments received directly from 299.28 the government or from a prepaid plan and enrollee deductibles, 299.29 coinsurance, and copayments. For purposes of this clause, 299.30 coinsurance means the portion of payment that the enrollee is 299.31 required to pay for the covered service; 299.32 (9) payments received by a health care provider or the 299.33 wholly owned subsidiary of a health care provider for care 299.34 provided outside Minnesota; 299.35 (10) payments received from the chemical dependency fund 299.36 under chapter 254B; 300.1 (11) payments received in the nature of charitable 300.2 donations that are not designated for providing patient services 300.3 to a specific individual or group; 300.4 (12) payments received for providing patient services 300.5 incurred through a formal program of health care research 300.6 conducted in conformity with federal regulations governing 300.7 research on human subjects. Payments received from patients or 300.8 from other persons paying on behalf of the patients are subject 300.9 to tax; 300.10 (13) payments received from any governmental agency for 300.11 services benefiting the public, not including payments made by 300.12 the government in its capacity as an employer or insurer; 300.13 (14) payments received for services provided by community 300.14 residential mental health facilities licensed under Minnesota 300.15 Rules, parts 9520.0500 to 9520.0690, community support programs 300.16 and family community support programs approved under Minnesota 300.17 Rules, parts 9535.1700 to 9535.1760, and community mental health 300.18 centers as defined in section 245.62, subdivision 2; 300.19 (15) government payments received by a regional treatment 300.20 center; 300.21 (16) payments received for hospice care services; 300.22 (17) payments received by a health care provider for 300.23 hearing aids and related equipment or prescription eyewear 300.24 delivered outside of Minnesota; 300.25 (18) payments received by an educational institution from 300.26 student tuition, student activity fees, health care service 300.27 fees, government appropriations, donations, or grants. Fee for 300.28 service payments and payments for extended coverage are taxable; 300.29 (19) payments received for services provided by: assisted 300.30 living programs and congregate housing programs; and 300.31 (20) payments received under the federal Employees Health 300.32 Benefits Act, United States Code, title 5, section 8909(f), as 300.33 amended by the Omnibus Reconciliation Act of 1990. 300.34 (b) Payments received by wholesale drug distributors for 300.35 legend drugs sold directly to veterinarians or veterinary bulk 300.36 purchasing organizations are excluded from the gross revenues 301.1 subject to the wholesale drug distributor tax under sections 301.2 295.50 to 295.59. 301.3[EFFECTIVE DATE.] This section is effective for payments 301.4 received after December 31, 2001. 301.5 Sec. 9. Minnesota Statutes 2000, section 295.57, is 301.6 amended by adding a subdivision to read: 301.7 Subd. 5. [EXEMPTION FOR AMOUNTS PAID FOR LEGEND DRUGS.] If 301.8 a hospital or health care provider cannot determine the actual 301.9 cost or reimbursement of legend drugs under the exemption 301.10 provided in section 295.53, subdivision 1, paragraph (a), clause 301.11 (6), the following method must be used: 301.12 A hospital or health care provider must determine the 301.13 amount paid for legend drugs used during the month or quarter 301.14 and multiply that amount by a ratio, the numerator of which is 301.15 the total amount received for taxable patient services, and the 301.16 denominator of which is the total amount received for all 301.17 patient services, including amounts exempt under section 295.53, 301.18 subdivision 1. The result represents the allowable exemption 301.19 for the monthly or quarterly cost of drugs. 301.20[EFFECTIVE DATE.] This section is effective for payments 301.21 received on or after July 1, 2002. 301.22 Sec. 10. Minnesota Statutes 2001 Supplement, section 301.23 295.60, subdivision 2, is amended to read: 301.24 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 301.25 the following terms have the meanings given. 301.26 (b) "Commissioner" means the commissioner of revenue. 301.27 (c) "Furrier" means a retailer that sells clothing made of 301.28 fur. 301.29 (d) "Clothing made of fur" means articles of clothing made 301.30 of fur on the hide or pelt, and articles of clothing of which 301.31 such fur is the component material of chief value, but only if 301.32 such value is more than three times the value of the next most 301.33 valuable material. 301.34 (e) "Retail sale" has the meaning given in section 297A.61, 301.35 subdivision 4. 301.36 (f) "Delivered outside of Minnesota" means fur clothing 302.1 which the furrier delivers to a common carrier for delivery 302.2 outside Minnesota, places in the United States mail or parcel 302.3 post directed to the purchaser outside Minnesota, or delivers to 302.4 the purchaser outside Minnesota by means of the seller's own 302.5 delivery vehicles, and which is not returned to a point within 302.6 Minnesota, except in the course of interstate commerce. 302.7[EFFECTIVE DATE.] This section is effective January 1, 2002. 302.8 Sec. 11. Minnesota Statutes 2001 Supplement, section 302.9 295.60, is amended by adding a subdivision to read: 302.10 Subd. 2a. [EXEMPTIONS.] Payments received by a furrier for 302.11 clothing made of fur delivered outside of Minnesota are exempt 302.12 from gross revenues subject to the fur clothing tax. 302.13[EFFECTIVE DATE.] This section is effective for payments 302.14 received on or after January 1, 2002. 302.15 Sec. 12. Minnesota Statutes 2001 Supplement, section 302.16 297A.61, subdivision 26, is amended to read: 302.17 Subd. 26. [PRIVATE COMMUNICATION SERVICE.] "Private 302.18 communication service" means acommunicationtelecommunication 302.19 servicefurnished to a subscriber whichthat entitles the 302.20subscribercustomer to:302.21(1)exclusive or priority use ofanya communication 302.22 channel or group of channels;302.23(2) the use of an intercommunication system for the302.24subscriber's stations, or regardless of whether the channel,302.25group of channels, or intercommunication system may be connected302.26through switching;302.27(3) thebetween or among termination points, regardless of 302.28 the manner in which the channel or channels are connected, and 302.29 includes switching capacity, extension linesand, stations, 302.30orand any other associated services that are provided in 302.31 connection with, and are necessary or unique to the use of,the 302.32 use of the channel or channelsor systems described in clause302.33(1); or302.34(4) any combination of tunneling, encryption,302.35authentication, and access control technologies and services302.36used to carry traffic over the Internet, a managed Internet303.1provider network or provider's backbone. 303.2[EFFECTIVE DATE.] This section is effective retroactively 303.3 for sales and purchases occurring after July 31, 2001. 303.4 Sec. 13. Minnesota Statutes 2000, section 297A.68, is 303.5 amended by adding a subdivision to read: 303.6 Subd. 37. [DELIVERY OR DISTRIBUTION CHARGES; PRINTED 303.7 MATERIALS.] Charges for the delivery or distribution of printed 303.8 materials, including individual account information, are exempt 303.9 if (1) the charges are separately stated, (2) the delivery or 303.10 distribution is to a mass audience or to a mailing list provided 303.11 at the direction of the customer, and (3) the cost of the 303.12 materials is not billed directly to the recipients. 303.13[EFFECTIVE DATE.] This section is effective retroactive to 303.14 delivery charges on sales and purchases made after December 31, 303.15 2001. 303.16 Sec. 14. Minnesota Statutes 2000, section 297G.07, 303.17 subdivision 1, is amended to read: 303.18 Subdivision 1. [EXEMPTIONS.] The following are not subject 303.19 to the excise tax: 303.20 (1) Sales by a manufacturer, brewer, or wholesaler for 303.21 shipment outside the state in interstate commerce. 303.22 (2) Alcoholic beverages sold or transferred between 303.23 Minnesota wholesalers. 303.24 (3) Sales to common carriers engaged in interstate 303.25 transportation of passengers, except as provided in this chapter. 303.26 (4) Malt beverages served by a brewery for on-premise 303.27 consumption at no charge, or distributed to brewery employees 303.28 for on-premise consumption under a labor contract. 303.29 (5) Shipments of wine to Minnesota residents under section 303.30 340A.417. 303.31 (6) Fruit juices naturally fermented or beer naturally 303.32 brewed in the home for family use. 303.33 (7) Sales of wine for sacramental purposes under section 303.34 340A.316. 303.35 (8) Alcoholic beverages sold to authorized manufacturers of 303.36 food products or pharmaceutical firms. The alcoholic beverage 304.1 must be used exclusively in the manufacture of food products or 304.2 medicines. For purposes of this clause, "manufacturer" means a 304.3 person who manufactures food products intended for sale to 304.4 wholesalers or retailers for ultimate sale to the consumer. 304.5 (9) Liqueur-filled candy. 304.6 (10) Sales to a federal agency, that the state of Minnesota 304.7 is prohibited from taxing under the constitution or laws of the 304.8 United States or under the constitution of Minnesota. 304.9 (11) Sales to Indian tribes as defined in section 297G.08. 304.10 (12) Shipments of intoxicating liquor from foreign 304.11 countries to diplomatic personnel of foreign countries assigned 304.12 to service in this state. 304.13[EFFECTIVE DATE.] This section is effective the day 304.14 following final enactment. 304.15 Sec. 15. Minnesota Statutes 2000, section 298.27, is 304.16 amended to read: 304.17 298.27 [COLLECTION AND PAYMENT OF TAX.] 304.18 The taxes provided by section 298.24 shall be paid directly 304.19 to each eligible county and the iron range resources and 304.20 rehabilitation board. The commissioner of revenue shall notify 304.21 each producer of the amount to be paid each recipient prior to 304.22 February 15. Every person subject to taxes imposed by section 304.23 298.24 shall file a correct report covering the preceding year. 304.24 The report must contain the information required by the 304.25 commissioner. The report shall be filed on or before February 304.26 1. A remittance equal to 100 percent of the total tax required 304.27 to be paid hereunder shall be paid by each producer on or before 304.28 February 24. On or before February 25, the county auditor shall 304.29 make distribution of the payment received by the county in the 304.30 manner provided by section 298.28. Reports shall be made and 304.31 hearings held upon the determination of the tax in accordance 304.32 with procedures established by the commissioner of revenue. The 304.33 commissioner of revenue shall have authority to make reasonable 304.34 rules as to the form and manner of filing reports necessary for 304.35 the determination of the tax hereunder, and by such rules may 304.36 require the production of such information as may be reasonably 305.1 necessary or convenient for the determination and apportionment 305.2 of the tax. All the provisions of the occupation tax law with 305.3 reference to the assessment and determination of the occupation 305.4 tax, including all provisions for appeals from or review of the 305.5 orders of the commissioner of revenue relative thereto, but not 305.6 including provisions for refunds, are applicable to the taxes 305.7 imposed by section 298.24 except in so far as inconsistent 305.8 herewith. If any person subject to section 298.24 shall fail to 305.9 make the report provided for in this section at the time and in 305.10 the manner herein provided, the commissioner of revenue shall in 305.11 such case, upon information possessed or obtained, ascertain the 305.12 kind and amount of ore mined or produced and thereon find and 305.13 determine the amount of the tax due from such person. There 305.14 shall be added to the amount of tax due a penalty for failure to 305.15 report on or before February 1, which penalty shall equal ten 305.16 percent of the tax imposed and be treated as a part thereof. 305.17 If any person responsible for making a tax payment at the 305.18 time and in the manner herein provided fails to do so, there 305.19 shall be imposed a penalty equal to ten percent of the amount so 305.20 due, which penalty shall be treated as part of the tax due. 305.21 In the case of any underpayment of the tax payment required 305.22 herein, there may be added and be treated as part of the tax due 305.23 a penalty equal to ten percent of the amount so underpaid. 305.24 A person having a liability of $120,000 or more during a 305.25 calendar year must remit all liabilities by means of a funds 305.26 transfer as defined in section 336.4A-104, paragraph (a). The 305.27 funds transfer payment date, as defined in section 336.4A-401, 305.28 must be on or before the date the tax is due. If the date the 305.29 tax is due is not a funds transfer business day, as defined in 305.30 section 336.4A-105, paragraph (a), clause (4), the payment date 305.31 must be on or before the funds transfer business day next 305.32 following the date the tax is due. 305.33[EFFECTIVE DATE.] This section is effective for years 305.34 beginning after December 31, 2001. 305.35 Sec. 16. Minnesota Statutes 2000, section 298.28, 305.36 subdivision 5, is amended to read: 306.1 Subd. 5. [COUNTIES.] (a)16.526.05 cents per taxable ton 306.2 is allocated to counties to be distributed, based upon 306.3 certification by the commissioner of revenue, under paragraphs 306.4 (b) to (d). 306.5 (b)1320.525 cents per taxable ton shall be distributed to 306.6 the county in which the taconite is mined or quarried or in 306.7 which the concentrate is produced, less any amount which is to 306.8 be distributed pursuant to paragraph (c). The apportionment 306.9 formula prescribed in subdivision 2 is the basis for the 306.10 distribution. 306.11 (c) If an electric power plant owned by and providing the 306.12 primary source of power for a taxpayer mining and concentrating 306.13 taconite is located in a county other than the county in which 306.14 the mining and the concentrating processes are conducted, one 306.15 cent per taxable ton of the tax distributed to the counties 306.16 pursuant to paragraph (b) and imposed on and collected from such 306.17 taxpayer shall be paid to the county in which the power plant is 306.18 located. 306.19 (d)3.55.525 cents per taxable ton shall be paid to the 306.20 county from which the taconite was mined, quarried or 306.21 concentrated to be deposited in the county road and bridge 306.22 fund. If the mining, quarrying and concentrating, or separate 306.23 steps in any of those processes are carried on in more than one 306.24 county, the commissioner shall follow the apportionment formula 306.25 prescribed in subdivision 2. 306.26[EFFECTIVE DATE.] This section is effective the day 306.27 following final enactment. 306.28 Sec. 17. Minnesota Statutes 2001 Supplement, section 306.29 298.28, subdivision 6, is amended to read: 306.30 Subd. 6. [PROPERTY TAX RELIEF.] (a) In 2002 and 306.31 thereafter,35.933.9 cents per taxable ton, less any amount 306.32 required to be distributed under paragraphs (b) and (c),and306.33less any amount required to be deducted under paragraph (d),306.34 must be allocated to St. Louis county acting as the counties' 306.35 fiscal agent, to be distributed as provided in sections 273.134 306.36 to 273.136. 307.1 (b) If an electric power plant owned by and providing the 307.2 primary source of power for a taxpayer mining and concentrating 307.3 taconite is located in a county other than the county in which 307.4 the mining and the concentrating processes are conducted, .1875 307.5 cent per taxable ton of the tax imposed and collected from such 307.6 taxpayer shall be paid to the county. 307.7 (c) If an electric power plant owned by and providing the 307.8 primary source of power for a taxpayer mining and concentrating 307.9 taconite is located in a school district other than a school 307.10 district in which the mining and concentrating processes are 307.11 conducted,.7282.5898 cent per taxable ton of the tax imposed 307.12 and collected from the taxpayer shall be paid to the school 307.13 district. 307.14(d) Two cents per taxable ton must be deducted from the307.15amount allocated to the St. Louis county auditor under paragraph307.16(a).307.17[EFFECTIVE DATE.] This section is effective the day 307.18 following final enactment. 307.19 Sec. 18. Minnesota Statutes 2001 Supplement, section 307.20 298.28, subdivision 10, is amended to read: 307.21 Subd. 10. [INCREASE.] Beginning with distributions in 307.22 2000, the amount determined under subdivision 9 shall be 307.23 increased in the same proportion as the increase in the implicit 307.24 price deflator as provided in section 298.24, subdivision 1. 307.25 Beginning with distributions in 2003, the amount determined 307.26 under subdivision 6, paragraph (a), shall be increased in the 307.27 same proportion as the increase in the implicit price deflator 307.28 as provided in section 298.24, subdivision 1. 307.29The distributions per ton determined under subdivisions 5,307.30paragraphs (b) and (d), and 6, paragraph (b), for distribution307.31in 1988 and subsequent years shall be the distribution per ton307.32determined for distribution in 1987. The distribution per ton307.33under subdivision 6, paragraph (c), for distribution in 2000 and307.34subsequent years shall be 81 percent of the distribution per ton307.35determined for distribution in 1987.307.36[EFFECTIVE DATE.] This section is effective the day 308.1 following final enactment. 308.2 Sec. 19. Minnesota Statutes 2001 Supplement, section 308.3 469.1763, subdivision 6, is amended to read: 308.4 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 308.5 subdivision applies only to districts for which the request for 308.6 certification was made before August 1, 2001, and without regard 308.7 to whether the request for certification was made prior to 308.8 August 1, 1979. 308.9 (b) The municipality for the district may transfer 308.10 available increments from another tax increment financing 308.11 district located in the municipality, if the transfer is 308.12 necessary to eliminate a deficit in the district to which the 308.13 increments are transferred. A deficit in the district for 308.14 purposes of this subdivision means the lesser of the following 308.15 two amounts: 308.16 (1)(i) the amount due during the calendar year to pay 308.17 preexisting obligations of the district; minus 308.18 (ii) the total increments collected or to be collected from 308.19 properties located within the district that are available for 308.20 the calendar year including amounts collected in prior years 308.21 that are currently available; plus 308.22 (iii) total increments from properties located in other 308.23 districts in the municipality including amounts collected in 308.24 prior years that are available to be used to meet the district's 308.25 obligations under this section, excluding this subdivision, or 308.26 other provisions of law (but excluding a special tax under 308.27 section 469.1791 and the grant program under Laws 1997, chapter 308.28 231, article 1, section 19, or Laws 2001, First Special Session 308.29 chapter 5); or 308.30 (2) the reduction in increments collected from properties 308.31 located in the district for the calendar year as a result of the 308.32 changes in class rates in Laws 1997, chapter 231, article 1; 308.33 Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, 308.34 and Laws 2001, First Special Session chapter 5, or the 308.35 elimination of the general education tax levy under Laws 2001, 308.36 First Special Session chapter 5. 309.1 (c) A preexisting obligation means: 309.2 (1) bonds issued and sold before August 1, 2001, or bonds 309.3 issued pursuant to a binding contract requiring the issuance of 309.4 bonds entered into before July 1, 2001, and bonds issued to 309.5 refund such bonds or to reimburse expenditures made in 309.6 conjunction with a signed contractual agreement entered into 309.7 before August 1, 2001, to the extent that the bonds are secured 309.8 by a pledge of increments from the tax increment financing 309.9 district; and 309.10 (2) binding contracts entered into before August 1, 2001, 309.11 to the extent that the contracts require payments secured by a 309.12 pledge of increments from the tax increment financing district. 309.13 (d) The municipality may require a development authority, 309.14 other than a seaway port authority, to transfer available 309.15 increments including amounts collected in prior years that are 309.16 currently available for any of its tax increment financing 309.17 districts in the municipality to make up an insufficiency in 309.18 another district in the municipality, regardless of whether the 309.19 district was established by the development authority or another 309.20 development authority. This authority applies notwithstanding 309.21 any law to the contrary, but applies only to a development 309.22 authority that: 309.23 (1) was established by the municipality; or 309.24 (2) the governing body of which is appointed, in whole or 309.25 part, by the municipality or an officer of the municipality or 309.26 which consists, in whole or part, of members of the governing 309.27 body of the municipality. The municipality may use this 309.28 authority only after it has first used all available increments 309.29 of the receiving development authority to eliminate the 309.30 insufficiency and exercised any permitted action under section 309.31 469.1792, subdivision 3, for preexisting districts of the 309.32 receiving development authority to eliminate the insufficiency. 309.33 (e) The authority under this subdivision to spend tax 309.34 increments outside of the area of the district from which the 309.35 tax increments were collected: 309.36 (1) may only be exercised after obtaining approval of the 310.1 use of the increments, in writing, by the commissioner of 310.2 revenue; 310.3 (2) is an exception to the restrictions under section 310.4 469.176, subdivision 4i, and the other provisions of this 310.5 section, and the percentage restrictions under subdivision 2 310.6 must be calculated after deducting increments spent under this 310.7 subdivision from the total increments for the district; and 310.8 (3) applies notwithstanding the provisions of the Tax 310.9 Increment Financing Act in effect for districts for which the 310.10 request for certification was made before June 30, 1982, or any 310.11 other law to the contrary. 310.12 (f) If a preexisting obligation requires the development 310.13 authority to pay an amount that is limited to the increment from 310.14 the district or a specific development within the district and 310.15 if the obligation requires paying a higher amount to the extent 310.16 that increments are available, the municipality may determine 310.17 that the amount due under the preexisting obligation equals the 310.18 higher amount and may authorize the transfer of increments under 310.19 this subdivision to pay up to the higher amount. The authority 310.20 to transfer increments under this paragraph may only be used to 310.21 the extent that the payment of all other preexisting obligations 310.22 in the municipality due during the calendar year have been 310.23 satisfied. 310.24[EFFECTIVE DATE.] This section is effective retroactively 310.25 to January 2, 2002, and thereafter. 310.26 Sec. 20. Laws 2001, First Special Session chapter 5, 310.27 article 12, section 95, is amended to read: 310.28 Sec. 95. [REPEALER.] 310.29 (a) Minnesota Statutes 2000, sections 297A.61, subdivision 310.30 16; 297A.68, subdivision 21; and 297A.71, subdivisions 2 and 16, 310.31 are repealed effective for sales and purchases occurring after 310.32 June 30, 2001, except that the repeal of section 297A.61, 310.33 subdivision 16, paragraph (d), is effective for sales and 310.34 purchases occurring after July 31, 2001. 310.35 (b) Minnesota Statutes 2000, sections 297A.62, subdivision 310.36 2, and 297A.64, subdivision 1, are repealed effective for sales 311.1 and purchases made after December 31, 2005. 311.2 (c) Minnesota Statutes 2000, section 297A.71, subdivision 311.3 15, is repealed effective for sales and purchases made after 311.4 June 30, 2002. 311.5(d) Minnesota Statutes 2000, section 289A.60, subdivision311.615, is repealed effective for liabilities after January 1, 2003.311.7[EFFECTIVE DATE.] This section is effective the day 311.8 following final enactment. 311.9 Sec. 21. [REPEALER.] 311.10 Minnesota Statutes 2000, section 278.01, subdivision 4, is 311.11 repealed effective for taxes payable in 2003 and thereafter. 311.12 ARTICLE 21 311.13 DEPARTMENT OF REVENUE TECHNICAL PROVISIONS 311.14 Section 1. Minnesota Statutes 2001 Supplement, section 311.15 69.021, subdivision 5, is amended to read: 311.16 Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of 311.17 fire state aid available for apportionment, before the addition 311.18 of the minimum fire state aid allocation amount under 311.19 subdivision 7, is equal to 107 percent of the amount of premium 311.20 taxes paid to the state upon the fire, lightning, sprinkler 311.21 leakage, and extended coverage premiums reported to the 311.22 commissioner by insurers on the Minnesota Firetown Premium 311.23 Report. This amount shall be reduced by the amount required to 311.24 pay the state auditor's costs and expenses of the audits or 311.25 exams of the firefighters relief associations. 311.26 The total amount for apportionment in respect to fire state 311.27 aid must not be less than two percent of the premiums reported 311.28 to the commissioner by insurers on the Minnesota Firetown 311.29 Premium Report after subtracting the following amounts: 311.30 (1) the amount required to pay the state auditor's costs 311.31 and expenses of the audits or exams of the firefighters relief 311.32 associations; and 311.33 (2) one percent of the premiums reported by town and 311.34 farmers' mutual insurance companies and mutual property and 311.35 casualty companies with total assets of $5,000,000 or less. 311.36 (b) The total amount for apportionment as police state aid 312.1 is equal to 104 percent of the amount of premium taxes paid to 312.2 the state on the premiums reported to the commissioner by 312.3 insurers on the Minnesota Aid to Police Premium Report, plus the 312.4 payment amounts received under section 297I.05, subdivision 8, 312.5 since the last aid apportionment, and reduced by the amount 312.6 required to pay the costs and expenses of the state auditor for 312.7 audits or exams of police relief associations. The total amount 312.8 for apportionment in respect to the police state aid program 312.9 must not be less than two percent of the amount of premiums 312.10 reported to the commissioner by insurers on the Minnesota Aid to 312.11 Police Premium Report after subtracting the amount required to 312.12 pay the state auditor's cost and expenses of the audits or exams 312.13 of the police relief associations. 312.14 (c) The commissioner shall calculate the percentage of 312.15 increase or decrease reflected in the apportionment over or 312.16 under the previous year's available state aid using the same 312.17 premiums as a basis for comparison. 312.18 (d) The amount for apportionment in respect to peace 312.19 officer state aid under paragraph (b) must be further reduced by 312.20 $1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000, 312.21 and $2,404,000 in fiscal year 2001. These reductions in this 312.22 paragraph cancel to the general fund. 312.23 (e) In addition to the amount for apportionment of police 312.24 state aid under paragraph (b)is annually increased by an amount312.25equal to the revenues under the tax on automobile risk312.26self-insurance under Minnesota Statutes 2000, section 297I.05,312.27subdivision 8, that were collected in fiscal year 2001, each 312.28 year $100,000 shall be apportioned for police state aid. An 312.29 amount sufficient to pay this increase is annually appropriated 312.30 from the general fund. 312.31[EFFECTIVE DATE.] This section is effective beginning with 312.32 fiscal year 2003. 312.33 Sec. 2. Minnesota Statutes 2001 Supplement, section 312.34 126C.17, subdivision 7a, is amended to read: 312.35 Subd. 7a. [REFERENDUM TAX BASE REPLACEMENT AID.] For each 312.36 school district that had a referendum allowance for fiscal year 313.1 2002 exceeding $415, for each separately authorized referendum 313.2 levy, the commissioner of revenue, in consultation with the 313.3 commissioner of children, families, and learning, shall certify 313.4 the amount of the referendum levy in taxes payable year 2001 313.5 attributable to the portion of the referendum allowance 313.6 exceeding $415 levied against property classified as class 2, 313.7 noncommercial 4c(1), or 4c(4), under section 273.13, excluding 313.8 the portion of the tax paid by the portion of class 2a property 313.9 consisting of the house, garage, and surrounding one acre of 313.10 land. The resulting amount must be used to reduce the 313.11 district's referendum levy amount otherwise determined, and must 313.12 be paid to the district each year that the referendum authority 313.13 remains in effect. The aid payable under this subdivision must 313.14 be subtracted from the district's referendum equalization aid 313.15 under subdivision 7. The referendum equalization aid after the 313.16 subtraction must not be less than zero. 313.17 For the purposes of this subdivision, the referendum levy 313.18 with the latest year of expiration is assumed to be at the 313.19 highest level of equalization, and the referendum levy with the 313.20 earliest year of expiration is assumed to be at the lowest level 313.21 of equalization. 313.22[EFFECTIVE DATE.] This section is effective for taxes 313.23 payable in 2002 and thereafter. 313.24 Sec. 3. Minnesota Statutes 2001 Supplement, section 313.25 270.69, subdivision 2, is amended to read: 313.26 Subd. 2. [FILING OF LIENS NECESSARY FOR ENFORCEABILITY 313.27 AGAINST CERTAIN PERSONS; METHODS OF FILING; FEES.] (a) The lien 313.28 imposed by subdivision 1 is not enforceable against any 313.29 purchaser, mortgagee, pledgee, holder of a Uniform Commercial 313.30 Code security interest, mechanic's lienor, or judgment lien 313.31 creditor whose interest has been duly perfected or is a 313.32 conveyance or interest entitled to protection against judgments 313.33 and attachments under section 507.34 or under any other 313.34 applicable provisions of state law, until a notice of lien has 313.35 been filed by the commissioner of revenue in the office of the 313.36 county recorder of the county in which real property is 314.1 situated, or in the case of personal propertybelonging to an314.2individual who is not a resident of this state or to a314.3corporation, partnership, or other organization,in the office 314.4 of the secretary of state, or in the case of personal property314.5belonging to a resident individual, in the office of the county314.6recorder of the county of residence of the individual. 314.7 (b)(1) Notices of liens, and lien releases, transcriptions, 314.8 and renewals, in a form prescribed by the commissioner of 314.9 revenue, may be filed with the county recorder or the secretary 314.10 of state by mail, personal delivery, or by electronic 314.11 transmission by the commissioner or a delegate into the 314.12 computerized filing system of the secretary of state. The 314.13 secretary of state shall transmit the notice electronically to 314.14 the office of the county recorder, if that is the place of 314.15 filing, in the county or counties shown on the computer entry. 314.16 The filing officer, whether the county recorder or the secretary 314.17 of state, shall endorse and index a printout of the notice in 314.18 the same manner as if the notice had been mailed or delivered. 314.19 (2) County recorders and the secretary of state shall enter 314.20 information relative to lien notices, transcriptions, renewals, 314.21 and releases filed in their offices into the central database of 314.22 the secretary of state. For notices filed electronically with 314.23 the county recorders, the date and time of receipt of the notice 314.24 and county recorder's file number, and for notices filed 314.25 electronically with the secretary of state, the secretary of 314.26 state's recording information, must be entered by the filing 314.27 officer into the central database before the close of the 314.28 working day following the day of the original data entry by the 314.29 department of revenue. 314.30 The filing and indexing of all notices must be in 314.31 accordance with the filing and indexing of notices of federal 314.32 liens, certificates of release, and refiled notices under 314.33 section 272.483. 314.34 (c) Notwithstanding any other law to the contrary, the 314.35 department of revenue is exempt from payment of fees when a 314.36 lien, lien renewal, or lien transcription is offered for 315.1 recording. The recording fees must be paid along with the 315.2 release fee at the end of the month in which the release of lien 315.3 is recorded, after receipt of a monthly statement from a county 315.4 recorder or the secretary of state. The department of revenue 315.5 shall add the recording fees to the delinquent tax liability of 315.6 the taxpayer. Notwithstanding any other law to the contrary, 315.7 the fee for filing or recording a notice of lien, or lien 315.8 release, transcription, or renewal is $15. 315.9 (d) There is appropriated to the commissioner of revenue an 315.10 amount representing the cost of payment of recording fees to the 315.11 county recorders and the secretary of state. The commissioner 315.12 shall keep a separate accounting of the costs and of payments 315.13 for recording fees remitted by taxpayers, and make the records 315.14 available to the legislature upon request. 315.15[EFFECTIVE DATE.] As to the protection of interests in 315.16 property of third parties, this section is effective for liens 315.17 of record and enforceable as of the day following final 315.18 enactment, and for liens filed thereafter. As to the place of 315.19 filing of liens against personal property, this section is 315.20 effective for liens filed on or after the day following final 315.21 enactment. 315.22 Sec. 4. Minnesota Statutes 2001 Supplement, section 315.23 271.01, subdivision 5, is amended to read: 315.24 Subd. 5. [JURISDICTION.] The tax court shall have 315.25 statewide jurisdiction. Except for an appeal to the supreme 315.26 court or any other appeal allowed under this subdivision, the 315.27 tax court shall be the sole, exclusive, and final authority for 315.28 the hearing and determination of all questions of law and fact 315.29 arising under the tax laws of the state, as defined in this 315.30 subdivision, in those cases that have been appealed to the tax 315.31 court and in any case that has been transferred by the district 315.32 court to the tax court. The tax court shall have no 315.33 jurisdiction in any case that does not arise under the tax laws 315.34 of the state or in any criminal case or in any case determining 315.35 or granting title to real property or in any case that is under 315.36 the probate jurisdiction of the district court. The small 316.1 claims division of the tax court shall havenojurisdictionin316.2any case dealing with property valuation or assessment for316.3property tax purposes until the taxpayer has appealed the316.4valuation or assessment to the county board of equalization, and316.5in those towns and cities which have not transferred their316.6duties to the county, the town or city board of equalization,316.7except for: (i) those taxpayers whose original assessments are316.8determined by the commissioner of revenue; (ii) those taxpayers316.9appealing a denial of a current year application for the316.10homestead classification for their property and the denial was316.11not reflected on a valuation notice issued in the year; and316.12(iii) any case dealing with property valuation, assessment, or316.13taxation for property tax purposes and meeting the316.14jurisdictional requirements of section 271.21, subdivision 2,316.15paragraph (c)only as provided in section 271.21, subdivision 2. 316.16 The tax court shall have no jurisdiction in any case involving 316.17 an order of the state board of equalization unless a taxpayer 316.18 contests the valuation of property. Laws governing taxes, aids, 316.19 and related matters administered by the commissioner of revenue, 316.20 laws dealing with property valuation, assessment or taxation of 316.21 property for property tax purposes, and any other laws that 316.22 contain provisions authorizing review of taxes, aids, and 316.23 related matters by the tax court shall be considered tax laws of 316.24 this state subject to the jurisdiction of the tax court. This 316.25 subdivision shall not be construed to prevent an appeal, as 316.26 provided by law, to an administrative agency, board of 316.27 equalization, review under section 274.13, subdivision 1c, or to 316.28 the commissioner of revenue. Wherever used in this chapter, the 316.29 term commissioner shall mean the commissioner of revenue, unless 316.30 otherwise specified. 316.31[EFFECTIVE DATE.] This section is effective for petitions 316.32 filed pertaining to the 2002 assessment, and thereafter. 316.33 Sec. 5. Minnesota Statutes 2001 Supplement, section 316.34 271.21, subdivision 2, is amended to read: 316.35 Subd. 2. [JURISDICTION.] At the election of the taxpayer, 316.36 the small claims division shall have jurisdiction only in the 317.1 following matters: 317.2 (a) cases involving valuation, assessment, or taxation of 317.3 real or personal property, ifthe taxpayer has satisfied the317.4requirements of section 271.01, subdivision 5, and: 317.5 (i) the issue is a denial of a current year application for 317.6 the homestead classification for the taxpayer's propertyand the317.7denial was not reflected on a valuation notice issued in the317.8year;or317.9 (ii)in the case of nonhomestead property,only one parcel 317.10 is included in the petition, the entire parcel is classified as 317.11 homestead class 1a or 1b under section 273.13 and the parcel 317.12 contains no more than one dwelling unit; 317.13 (iii) the entire property is classified as agricultural 317.14 homestead class 2a or 1b under section 273.13; or 317.15 (iv) the assessor's estimated market value of the property 317.16 included in the petition is less than$100,000$300,000; or 317.17 (b) anyothercaseconcerning the tax laws as defined in317.18section 271.01, subdivision 5,not involving valuation, 317.19 assessment, or taxation of real and personal property in which 317.20 the amount in controversy does not exceed $5,000, including 317.21 penalty and interest; or. 317.22(c) cases involving valuation, assessment, or taxation of317.23real or personal property if:317.24(i) the issue is a denial of a current year application for317.25the homestead classification for the taxpayer's property;317.26(ii) only one parcel is included in the petition, the317.27entire parcel is classified as homestead 1a or 1b pursuant to317.28section 273.13, and the parcel contains no more than one317.29dwelling unit; or317.30(iii) the assessor's estimated market value of the property317.31included in the petition is less than $300,000.317.32[EFFECTIVE DATE.] This section is effective for petitions 317.33 filed pertaining to the 2002 assessment, and thereafter. 317.34 Sec. 6. Minnesota Statutes 2000, section 272.02, 317.35 subdivision 15, is amended to read: 317.36 Subd. 15. [PROPERTY USED TO GENERATE HYDROELECTRIC OR 318.1 HYDROMECHANICAL POWER.]To the extent provided by section 295.44318.2 Notwithstanding the provisions of subdivision 39, and sections 318.3 272.01, subdivision 2, and 273.19, subdivision 1, real and 318.4 personal property used or to be used primarily for the 318.5 production of hydroelectric or hydromechanical power on a site 318.6 owned by the federal government, the state, or a local 318.7 governmental unitwhich isand developed and operated pursuant 318.8 tothe provisions ofsection 103G.535 is exempt from property 318.9 tax for all years during which the site is developed and 318.10 operated under the terms of a lease or agreement authorized by 318.11 section 103G.535. 318.12[EFFECTIVE DATE.] This section is effective the day 318.13 following final enactment. 318.14 Sec. 7. Minnesota Statutes 2001 Supplement, section 318.15 273.121, is amended to read: 318.16 273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 318.17 Any county assessor or city assessor having the powers of a 318.18 county assessor, valuing or classifying taxable real property 318.19 shall in each year notify those persons whose property is to be 318.20 included on the assessment roll that year if the person's 318.21 address is known to the assessor, otherwise the occupant of the 318.22 property. The notice shall be in writing and shall be sent by 318.23 ordinary mail at least ten days before the meeting of the local 318.24 board of appeal and equalization under section 274.01 or the 318.25 review process established under section 274.13, subdivision 318.26 1c. It shall contain: (1) the market value for the current and 318.27 prior assessment, (2) the limited market value under section 318.28 273.11, subdivision 1a, for the current and prior assessment, (3) 318.29 the qualifying amount of any improvements under section 273.11, 318.30 subdivision 16, for the current assessment, (4) the market value 318.31 subject to taxation after subtracting the amount of any 318.32 qualifying improvements for the current assessment, (5) the 318.33 classification of the property for the current and prior 318.34 assessment, (6) a note that if the property is homestead and at 318.35 least3545 years old, improvements made to the property may be 318.36 eligible for a valuation exclusion under section 273.11, 319.1 subdivision 16, (7) the assessor's office address, and (8) the 319.2 dates, places, and times set for the meetings of the local board 319.3 of appeal and equalization, the review process established under 319.4 section 274.13, subdivision 1c, and the county board of appeal 319.5 and equalization. The commissioner of revenue shall specify the 319.6 form of the notice. The assessor shall attach to the assessment 319.7 roll a statement that the notices required by this section have 319.8 been mailed. Any assessor who is not provided sufficient funds 319.9 from the assessor's governing body to provide such notices, may 319.10 make application to the commissioner of revenue to finance such 319.11 notices. The commissioner of revenue shall conduct an 319.12 investigation and, if satisfied that the assessor does not have 319.13 the necessary funds, issue a certification to the commissioner 319.14 of finance of the amount necessary to provide such notices. The 319.15 commissioner of finance shall issue a warrant for such amount 319.16 and shall deduct such amount from any state payment to such 319.17 county or municipality. The necessary funds to make such 319.18 payments are hereby appropriated. Failure to receive the notice 319.19 shall in no way affect the validity of the assessment, the 319.20 resulting tax, the procedures of any board of review or 319.21 equalization, or the enforcement of delinquent taxes by 319.22 statutory means. 319.23[EFFECTIVE DATE.] This section is effective for notices 319.24 required to be mailed in 2002 and thereafter. 319.25 Sec. 8. Minnesota Statutes 2001 Supplement, section 319.26 273.13, subdivision 24, is amended to read: 319.27 Subd. 24. [CLASS 3.] (a) Commercial and industrial 319.28 property and utility real and personal property is class 3a. 319.29 (1) Except as otherwise provided, each parcel of 319.30 commercial, industrial, or utility real property has a class 319.31 rate of 1.5 percent of the first tier of market value, and 2.0 319.32 percent of the remaining market value. In the case of 319.33 contiguous parcels of property owned by the same person or 319.34 entity, only the value equal to the first-tier value of the 319.35 contiguous parcels qualifies for the reduced class rate, except 319.36 that contiguous parcels owned by the same person or entity shall 320.1 be eligible for the first-tier value class rate on each separate 320.2 business operated by the owner of the property, provided the 320.3 business is housed in a separate structure. For the purposes of 320.4 this subdivision, the first tier means the first $150,000 of 320.5 market value. Real property owned in fee by a utility for 320.6 transmission line right-of-way shall be classified at the class 320.7 rate for the higher tier. 320.8 For purposes of this subdivision, parcels are considered to 320.9 be contiguous even if they are separated from each other by a 320.10 road, street, waterway, or other similar intervening type of 320.11 property. Connections between parcels that consist of power 320.12 lines or pipelines do not cause the parcels to be contiguous. 320.13 Property owners who have contiguous parcels of property that 320.14 constitute separate businesses that may qualify for the 320.15 first-tier class rate shall notify the assessor by July 1, for 320.16 treatment beginning in the following taxes payable year. 320.17 (2)All railroad operating property andAll personal 320.18 property that is: (i) part of an electric generation, 320.19 transmission, or distribution system; or (ii) part of a pipeline 320.20 system transporting or distributing water, gas, crude oil, or 320.21 petroleum products; and (iii) not described in clause (3), and 320.22 all railroad operating property has a class rate as provided 320.23 under clause (1) for the first tier of market value and the 320.24 remaining market value. In the case of multiple parcels in one 320.25 county that are owned by one person or entity, only one first 320.26 tier amount is eligible for the reduced rate. 320.27 (3) The entire market value of personal property that is: 320.28 (i) tools, implements, and machinery of an electric generation, 320.29 transmission, or distribution system; (ii) tools, implements, 320.30 and machinery of a pipeline system transporting or distributing 320.31 water, gas, crude oil, or petroleum products; or (iii) the mains 320.32 and pipes used in the distribution of steam or hot or chilled 320.33 water for heating or cooling buildings, has a class rate as 320.34 provided under clause (1) for the remaining market value in 320.35 excess of the first tier. 320.36 (b) Employment property defined in section 469.166, during 321.1 the period provided in section 469.170, shall constitute class 321.2 3b. The class rates for class 3b property are determined under 321.3 paragraph (a). 321.4[EFFECTIVE DATE.] This section is effective for taxes 321.5 payable in 2002 and thereafter. 321.6 Sec. 9. Minnesota Statutes 2001 Supplement, section 321.7 273.1392, is amended to read: 321.8 273.1392 [PAYMENT; SCHOOL DISTRICTS.] 321.9 The amounts of conservation tax credits under section 321.10 273.119; disaster or emergency reimbursement under section 321.11 273.123; attached machinery aid under section 273.138; homestead 321.12 and agricultural credits under section 273.1384; aids and 321.13 credits under section 273.1398; wetlands reimbursement under 321.14 section 275.295; enterprise zone property credit payments under 321.15 section 469.171; and metropolitan agricultural preserve 321.16 reduction under section 473H.10 for school districts, shall be 321.17 certified to the department of children, families, and learning 321.18 by the department of revenue. The amounts so certified shall be 321.19 paid according to section 127A.45, subdivisions 9 and 13. 321.20[EFFECTIVE DATE.] This section is effective for aids and 321.21 credits payable in 2002 and thereafter. 321.22 Sec. 10. Minnesota Statutes 2001 Supplement, section 321.23 273.1398, subdivision 4c, is amended to read: 321.24 Subd. 4c. [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For 321.25 calendar years 2004 and 2005, each county in a judicial district 321.26 that has not been transferred to the state by January 1 of that 321.27 year shall receive additional homestead and agricultural credit 321.28 aid. This amount is in addition to the amount calculated under 321.29 subdivision 2 and must not be included in the definition of 321.30 homestead and agricultural credit base under subdivision 1, 321.31 paragraph (j). The amount of additional aid is equal to the 321.32 difference between (1) the amount budgeted for court 321.33 administration costs in 2001 as determined under subdivision 4b, 321.34 paragraph(c)(b), multiplied by the maintenance of effort 321.35 percent for the calendar year as determined under subdivision 321.36 4b, paragraph(d)(a), and (2) the amount calculated under 322.1 subdivision 4b, paragraph (a), for calendar year 2003. This 322.2 additional aid must be used only to fund court administration 322.3 expenditures as defined in section 480.183, subdivision 3. This 322.4 amount must be added to the state court's base budget in the 322.5 year when the court in that judicial district in which the 322.6 county is located is transferred to the state. 322.7[EFFECTIVE DATE.] This section is effective retroactively 322.8 to July 1, 2001, and thereafter. 322.9 Sec. 11. Minnesota Statutes 2001 Supplement, section 322.10 275.065, subdivision 3, is amended to read: 322.11 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 322.12 county auditor shall prepare and the county treasurer shall 322.13 deliver after November 10 and on or before November 24 each 322.14 year, by first class mail to each taxpayer at the address listed 322.15 on the county's current year's assessment roll, a notice of 322.16 proposed property taxes. 322.17 (b) The commissioner of revenue shall prescribe the form of 322.18 the notice. 322.19 (c) The notice must inform taxpayers that it contains the 322.20 amount of property taxes each taxing authority proposes to 322.21 collect for taxes payable the following year. In the case of a 322.22 town, or in the case of the statedetermined portion of the322.23school district levygeneral tax, the final tax amount will be 322.24 its proposed tax. In the case of taxing authorities required to 322.25 hold a public meeting under subdivision 6, the notice must 322.26 clearly state that each taxing authority, including regional 322.27 library districts established under section 134.201, and 322.28 including the metropolitan taxing districts as defined in 322.29 paragraph (i), but excluding all other special taxing districts 322.30 and towns, will hold a public meeting to receive public 322.31 testimony on the proposed budget and proposed or final property 322.32 tax levy, or, in case of a school district, on the current 322.33 budget and proposed property tax levy. It must clearly state 322.34 the time and place of each taxing authority's meeting, a 322.35 telephone number for the taxing authority that taxpayers may 322.36 call if they have questions related to the notice, and an 323.1 address where comments will be received by mail. 323.2 (d) The notice must state for each parcel: 323.3 (1) the market value of the property as determined under 323.4 section 273.11, and used for computing property taxes payable in 323.5 the following year and for taxes payable in the current year as 323.6 each appears in the records of the county assessor on November 1 323.7 of the current year; and, in the case of residential property, 323.8 whether the property is classified as homestead or 323.9 nonhomestead. The notice must clearly inform taxpayers of the 323.10 years to which the market values apply and that the values are 323.11 final values; 323.12 (2) the items listed below, shown separately by county, 323.13 city or town, and statedetermined schoolgeneral tax, net of 323.14 theeducationresidential and agricultural homestead credit 323.15 under section273.1382273.1384, voter approved school levy, 323.16 other local school levy, and the sum of the special taxing 323.17 districts, and as a total of all taxing authorities: 323.18 (i) the actual tax for taxes payable in the current year; 323.19 (ii) the tax change due to spending factors, defined as the 323.20 proposed tax minus the constant spending tax amount; 323.21 (iii) the tax change due to other factors, defined as the 323.22 constant spending tax amount minus the actual current year tax; 323.23 and 323.24 (iv) the proposed tax amount. 323.25 In the case of a town or the statedetermined school323.26 general tax, the final tax shall also be its proposed tax unless 323.27 the town changes its levy at a special town meeting under 323.28 section 365.52. If a school district has certified under 323.29 section 126C.17, subdivision 9, that a referendum will be held 323.30 in the school district at the November general election, the 323.31 county auditor must note next to the school district's proposed 323.32 amount that a referendum is pending and that, if approved by the 323.33 voters, the tax amount may be higher than shown on the notice. 323.34 In the case of the city of Minneapolis, the levy for the 323.35 Minneapolis library board and the levy for Minneapolis park and 323.36 recreation shall be listed separately from the remaining amount 324.1 of the city's levy. In the case of a parcel where tax increment 324.2 or the fiscal disparities areawide tax under chapter 276A or 324.3 473F applies, the proposed tax levy on the captured value or the 324.4 proposed tax levy on the tax capacity subject to the areawide 324.5 tax must each be stated separately and not included in the sum 324.6 of the special taxing districts; and 324.7 (3) the increase or decrease between the total taxes 324.8 payable in the current year and the total proposed taxes, 324.9 expressed as a percentage. 324.10 For purposes of this section, the amount of the tax on 324.11 homesteads qualifying under the senior citizens' property tax 324.12 deferral program under chapter 290B is the total amount of 324.13 property tax before subtraction of the deferred property tax 324.14 amount. 324.15 (e) The notice must clearly state that the proposed or 324.16 final taxes do not include the following: 324.17 (1) special assessments; 324.18 (2) levies approved by the voters after the date the 324.19 proposed taxes are certified, including bond referenda, school 324.20 district levy referenda, and levy limit increase referenda; 324.21 (3) amounts necessary to pay cleanup or other costs due to 324.22 a natural disaster occurring after the date the proposed taxes 324.23 are certified; 324.24 (4) amounts necessary to pay tort judgments against the 324.25 taxing authority that become final after the date the proposed 324.26 taxes are certified; and 324.27 (5) the contamination tax imposed on properties which 324.28 received market value reductions for contamination. 324.29 (f) Except as provided in subdivision 7, failure of the 324.30 county auditor to prepare or the county treasurer to deliver the 324.31 notice as required in this section does not invalidate the 324.32 proposed or final tax levy or the taxes payable pursuant to the 324.33 tax levy. 324.34 (g) If the notice the taxpayer receives under this section 324.35 lists the property as nonhomestead, and satisfactory 324.36 documentation is provided to the county assessor by the 325.1 applicable deadline, and the property qualifies for the 325.2 homestead classification in that assessment year, the assessor 325.3 shall reclassify the property to homestead for taxes payable in 325.4 the following year. 325.5 (h) In the case of class 4 residential property used as a 325.6 residence for lease or rental periods of 30 days or more, the 325.7 taxpayer must either: 325.8 (1) mail or deliver a copy of the notice of proposed 325.9 property taxes to each tenant, renter, or lessee; or 325.10 (2) post a copy of the notice in a conspicuous place on the 325.11 premises of the property. 325.12 The notice must be mailed or posted by the taxpayer by 325.13 November 27 or within three days of receipt of the notice, 325.14 whichever is later. A taxpayer may notify the county treasurer 325.15 of the address of the taxpayer, agent, caretaker, or manager of 325.16 the premises to which the notice must be mailed in order to 325.17 fulfill the requirements of this paragraph. 325.18 (i) For purposes of this subdivision, subdivisions 5a and 325.19 6, "metropolitan special taxing districts" means the following 325.20 taxing districts in the seven-county metropolitan area that levy 325.21 a property tax for any of the specified purposes listed below: 325.22 (1) metropolitan council under section 473.132, 473.167, 325.23 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 325.24 (2) metropolitan airports commission under section 473.667, 325.25 473.671, or 473.672; and 325.26 (3) metropolitan mosquito control commission under section 325.27 473.711. 325.28 For purposes of this section, any levies made by the 325.29 regional rail authorities in the county of Anoka, Carver, 325.30 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 325.31 398A shall be included with the appropriate county's levy and 325.32 shall be discussed at that county's public hearing. 325.33 (j) If a statutory or home rule charter city or a town has 325.34 exercised the local levy option provided by section 473.388, 325.35 subdivision 7, it may include in the notice of its proposed 325.36 taxes the amount of its proposed taxes attributable to its 326.1 exercise of the option. In the first year of the city or town's 326.2 exercise of this option, the statement shall include an estimate 326.3 of the reduction of the metropolitan council's tax on the parcel 326.4 due to exercise of that option. The metropolitan council's levy 326.5 shall be adjusted accordingly. 326.6[EFFECTIVE DATE.] This section is effective for notices of 326.7 proposed property taxes required in 2002 for taxes payable in 326.8 2003, and thereafter. 326.9 Sec. 12. Minnesota Statutes 2001 Supplement, section 326.10 275.71, subdivision 3, is amended to read: 326.11 Subd. 3. [ADJUSTMENTS FOR STATE TAKEOVERS.] (a) The levy 326.12 limit base for each local unit of government shall be adjusted 326.13 to reflect the assumption by the state of financing for certain 326.14 government functions as indicated in this subdivision. 326.15 (b) For a county in a judicial district for which financing 326.16 has not been transferred to the state by January 1, 2001, the 326.17 levy limit base for 2001 is permanently reduced by the amount of 326.18 the county's 2001 budget for court administration costs, as 326.19 certified under section 273.1398, subdivision 4b, paragraph (b), 326.20 net of the county's share of transferred fines and fees 326.21 collected by the district courts in the county for the same 326.22 budget period. 326.23 (c) For a governmental unit which levied a tax in 2000 326.24 under section 473.388, subdivision 7, the levy limit base for 326.25 2001 is permanently reduced by an amount equal to the sum of the 326.26 governmental unit's taxes payable 2001 nondebt transit services 326.27 levy plus the portion of its 2001 homestead and agricultural 326.28 credit aid under section 273.1398, subdivision 2, attributable 326.29 to nondebt transit services. 326.30 (d) For counties in a judicial district in which the state 326.31 assumed financing of mandated services costs as defined in 326.32 section 480.181, subdivision 4, on July 1, 2001, the levy limit 326.33 base for taxes levied in 2001 is permanently reduced by an 326.34 amount equal to one-half of the aid reduction under section 326.35 273.1398, subdivision 4a, paragraph (g). 326.36[EFFECTIVE DATE.] This section is effective retroactively 327.1 for taxes payable in 2002 and 2003. 327.2 Sec. 13. Minnesota Statutes 2001 Supplement, section 327.3 275.74, subdivision 2, is amended to read: 327.4 Subd. 2. [AUTHORIZATION FOR SPECIAL LEVIES.] A local 327.5 governmental unit may request authorization to levy for 327.6 unreimbursed costs forothernatural disasters under section 327.7 275.70, subdivision 5, clause(6)(7). The local governmental 327.8 unit shall submit a request to levy under section 275.70, 327.9 subdivision 5, clause(6)(7), to the commissioner of revenue by 327.10 September 30 of the levy year and the request must include 327.11 information documenting the estimated unreimbursed costs. The 327.12 commissioner of revenue may grant levy authority, up to the 327.13 amount requested based on the documentation submitted. All 327.14 decisions of the commissioner are final. 327.15[EFFECTIVE DATE.] This section is effective for taxes 327.16 payable in 2002 and 2003. 327.17 Sec. 14. Minnesota Statutes 2001 Supplement, section 327.18 289A.02, subdivision 7, is amended to read: 327.19 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 327.20 defined otherwise, "Internal Revenue Code" means the Internal 327.21 Revenue Code of 1986, as amended throughJune 15, 2001February 327.22 1, 2002. 327.23[EFFECTIVE DATE.] This section is effective the day 327.24 following final enactment. 327.25 Sec. 15. Minnesota Statutes 2001 Supplement, section 327.26 289A.20, subdivision 2, is amended to read: 327.27 Subd. 2. [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 327.28 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 327.29 WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 327.30 (a) A tax required to be deducted and withheld during the 327.31 quarterly period must be paid on or before the last day of the 327.32 month following the close of the quarterly period, unless an 327.33 earlier time for payment is provided. A tax required to be 327.34 deducted and withheld from compensation of an entertainer and 327.35 from a payment to an out-of-state contractor must be paid on or 327.36 before the date the return for such tax must be filed under 328.1 section 289A.18, subdivision 2. Taxes required to be deducted 328.2 and withheld by partnerships and S corporations must be paid on 328.3 or before the date the return must be filed under section 328.4 289A.18, subdivision 2. 328.5 (b) An employer who, during the previous quarter, withheld 328.6 more than $1,500 of tax under section 290.92, subdivision 2a or 328.7 3, or 290.923, subdivision 2, must deposit tax withheld under 328.8 those sections with the commissioner within the time allowed to 328.9 deposit the employer's federal withheld employment taxes under 328.10Treasury RegulationCode of Federal Regulations, title 26, 328.11 section 31.6302-1, as amended through December 31, 2001, without 328.12 regard to the safe harbor or de minimis rules in subparagraph 328.13 (f) or the one-day rule in subsection (c), clause (3). 328.14 Taxpayers must submit a copy of their federal notice of deposit 328.15 status to the commissioner upon request by the commissioner. 328.16 (c) The commissioner may prescribe by rule other return 328.17 periods or deposit requirements. In prescribing the reporting 328.18 period, the commissioner may classify payors according to the 328.19 amount of their tax liability and may adopt an appropriate 328.20 reporting period for the class that the commissioner judges to 328.21 be consistent with efficient tax collection. In no event will 328.22 the duration of the reporting period be more than one year. 328.23 (d) If less than the correct amount of tax is paid to the 328.24 commissioner, proper adjustments with respect to both the tax 328.25 and the amount to be deducted must be made, without interest, in 328.26 the manner and at the times the commissioner prescribes. If the 328.27 underpayment cannot be adjusted, the amount of the underpayment 328.28 will be assessed and collected in the manner and at the times 328.29 the commissioner prescribes. 328.30 (e) If the aggregate amount of the tax withheld during a 328.31 fiscal year ending June 30 under section 290.92, subdivision 2a 328.32 or 3, is equal to or exceeds the amounts established for 328.33 remitting federal withheld taxes pursuant to the regulations 328.34 promulgated under section 6302(h) of the Internal Revenue Code, 328.35 the employer must remit each required deposit for wages paid in 328.36 the subsequent calendar year by electronic means. 329.1 (f) A third-party bulk filer as defined in section 290.92, 329.2 subdivision 30, paragraph (a), clause (2), who remits 329.3 withholding deposits must remit all deposits by electronic means 329.4 as provided in paragraph (e), regardless of the aggregate amount 329.5 of tax withheld during a fiscal year for all of the employers. 329.6[EFFECTIVE DATE.] This section is effective the day 329.7 following final enactment. 329.8 Sec. 16. Minnesota Statutes 2001 Supplement, section 329.9 289A.60, subdivision 2, is amended to read: 329.10 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 329.11 a taxpayer fails to make and file a tax return within the time 329.12 prescribed, including an extension, or fails to file an 329.13 individual income tax return within six months after the due 329.14 date, a penalty of five percent of the amount of tax not paid by 329.15 the end of that period is added to the tax. 329.16[EFFECTIVE DATE.] This section is effective the day 329.17 following final enactment. 329.18 Sec. 17. Minnesota Statutes 2001 Supplement, section 329.19 290.01, subdivision 19, is amended to read: 329.20 Subd. 19. [NET INCOME.] The term "net income" means the 329.21 federal taxable income, as defined in section 63 of the Internal 329.22 Revenue Code of 1986, as amended through the date named in this 329.23 subdivision, incorporating any elections made by the taxpayer in 329.24 accordance with the Internal Revenue Code in determining federal 329.25 taxable income for federal income tax purposes, and with the 329.26 modifications provided in subdivisions 19a to 19f. 329.27 In the case of a regulated investment company or a fund 329.28 thereof, as defined in section 851(a) or 851(g) of the Internal 329.29 Revenue Code, federal taxable income means investment company 329.30 taxable income as defined in section 852(b)(2) of the Internal 329.31 Revenue Code, except that: 329.32 (1) the exclusion of net capital gain provided in section 329.33 852(b)(2)(A) of the Internal Revenue Code does not apply; 329.34 (2) the deduction for dividends paid under section 329.35 852(b)(2)(D) of the Internal Revenue Code must be applied by 329.36 allowing a deduction for capital gain dividends and 330.1 exempt-interest dividends as defined in sections 852(b)(3)(C) 330.2 and 852(b)(5) of the Internal Revenue Code; and 330.3 (3) the deduction for dividends paid must also be applied 330.4 in the amount of any undistributed capital gains which the 330.5 regulated investment company elects to have treated as provided 330.6 in section 852(b)(3)(D) of the Internal Revenue Code. 330.7 The net income of a real estate investment trust as defined 330.8 and limited by section 856(a), (b), and (c) of the Internal 330.9 Revenue Code means the real estate investment trust taxable 330.10 income as defined in section 857(b)(2) of the Internal Revenue 330.11 Code. 330.12 The net income of a designated settlement fund as defined 330.13 in section 468B(d) of the Internal Revenue Code means the gross 330.14 income as defined in section 468B(b) of the Internal Revenue 330.15 Code. 330.16 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 330.17 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 330.18 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 330.19 Protection Act, Public Law Number 104-188, the provisions of 330.20 Public Law Number 104-117, the provisions of sections 313(a) and 330.21 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 330.22 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 330.23 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 330.24 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 330.25 Public Law Number 105-34, the provisions of section 6010 of the 330.26 Internal Revenue Service Restructuring and Reform Act of 1998, 330.27 Public Law Number 105-206, the provisions of section 4003 of the 330.28 Omnibus Consolidated and Emergency Supplemental Appropriations 330.29 Act, 1999, Public Law Number 105-277, and the provisions of 330.30 section 318 of the Consolidated Appropriation Act of 2001, 330.31 Public Law Number 106-554, shall become effective at the time 330.32 they become effective for federal purposes. 330.33 The Internal Revenue Code of 1986, as amended through 330.34 December 31, 1996, shall be in effect for taxable years 330.35 beginning after December 31, 1996. 330.36 The provisions of sections 202(a) and (b), 221(a), 225, 331.1 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 331.2 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 331.3 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 331.4 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 331.5 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 331.6 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 331.7 7002, and 7003 of the Internal Revenue Service Restructuring and 331.8 Reform Act of 1998, Public Law Number 105-206, the provisions of 331.9 section 3001 of the Omnibus Consolidated and Emergency 331.10 Supplemental Appropriations Act, 1999, Public Law Number 331.11 105-277, the provisions of section 3001 of the Miscellaneous 331.12 Trade and Technical Corrections Act of 1999, Public Law Number 331.13 106-36, and the provisions of section 316 of the Consolidated 331.14 Appropriation Act of 2001, Public Law Number 106-554, shall 331.15 become effective at the time they become effective for federal 331.16 purposes. 331.17 The Internal Revenue Code of 1986, as amended through 331.18 December 31, 1997, shall be in effect for taxable years 331.19 beginning after December 31, 1997. 331.20 The provisions of sections 5002, 6009, 6011, and 7001 of 331.21 the Internal Revenue Service Restructuring and Reform Act of 331.22 1998, Public Law Number 105-206, the provisions of section 9010 331.23 of the Transportation Equity Act for the 21st Century, Public 331.24 Law Number 105-178, the provisions of sections 1004, 4002, and 331.25 5301 of the Omnibus Consolidation and Emergency Supplemental 331.26 Appropriations Act, 1999, Public Law Number 105-277, the 331.27 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 331.28 Act of 1998, Public Law Number 105-369, the provisions of 331.29 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 331.30 Work Incentives Improvement Act of 1999, Public Law Number 331.31 106-170, the provisions of the Installment Tax Correction Act of 331.32 2000, Public Law Number 106-573, and the provisions of section 331.33 309 of the Consolidated Appropriation Act of 2001, Public Law 331.34 Number 106-554, shall become effective at the time they become 331.35 effective for federal purposes. 331.36 The Internal Revenue Code of 1986, as amended through 332.1 December 31, 1998, shall be in effect for taxable years 332.2 beginning after December 31, 1998. 332.3 The provisions of the FSC Repeal and Extraterritorial 332.4 Income Exclusion Act of 2000, Public Law Number 106-519, shall 332.5 become effective at the time it became effective for federal 332.6 purposes. 332.7 The Internal Revenue Code of 1986, as amended through 332.8 December 31, 1999, shall be in effect for taxable years 332.9 beginning after December 31, 1999. The provisions of sections 332.10 306 and 401 of the Consolidated Appropriation Act of 2001, 332.11 Public Law Number 106-554, and the provision of section 332.12 632(b)(2)(A) of the Economic Growth and Tax Relief 332.13 Reconciliation Act of 2001, Public Law Number 107-16, shall 332.14 become effective at the same time it became effective for 332.15 federal purposes. 332.16 The Internal Revenue Code of 1986, as amended through 332.17 December 31, 2000, shall be in effect for taxable years 332.18 beginning after December 31, 2000. The provisions of sections 332.19 659a and 671 of the Economic Growth and Tax Relief 332.20 Reconciliation Act of 2001, Public Law Number 107-16, and the 332.21 provisions of sections 104, 105, and 111 of the Victims of 332.22 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 332.23 shall become effective at the same time it became effective for 332.24 federal purposes. 332.25 The Internal Revenue Code of 1986, as amended throughJune332.2615, 2001February 1, 2002, shall be in effect for taxable years 332.27 beginning after December 31, 2001. 332.28 The provisions of sections 101 and 102 of the Victims of 332.29 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 332.30 shall become effective at the same time it becomes effective for 332.31 federal purposes. 332.32 Except as otherwise provided, references to the Internal 332.33 Revenue Code in subdivisions 19a to 19g mean the code in effect 332.34 for purposes of determining net income for the applicable year. 332.35[EFFECTIVE DATE.] This section is effective the day 332.36 following final enactment. 333.1 Sec. 18. Minnesota Statutes 2001 Supplement, section 333.2 290.01, subdivision 19b, is amended to read: 333.3 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 333.4 individuals, estates, and trusts, there shall be subtracted from 333.5 federal taxable income: 333.6 (1) interest income on obligations of any authority, 333.7 commission, or instrumentality of the United States to the 333.8 extent includable in taxable income for federal income tax 333.9 purposes but exempt from state income tax under the laws of the 333.10 United States; 333.11 (2) if included in federal taxable income, the amount of 333.12 any overpayment of income tax to Minnesota or to any other 333.13 state, for any previous taxable year, whether the amount is 333.14 received as a refund or as a credit to another taxable year's 333.15 income tax liability; 333.16 (3) the amount paid to others, less the amount used to 333.17 claim the credit allowed under section 290.0674, not to exceed 333.18 $1,625 for each qualifying child in grades kindergarten to 6 and 333.19 $2,500 for each qualifying child in grades 7 to 12, for tuition, 333.20 textbooks, and transportation of each qualifying child in 333.21 attending an elementary or secondary school situated in 333.22 Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 333.23 wherein a resident of this state may legally fulfill the state's 333.24 compulsory attendance laws, which is not operated for profit, 333.25 and which adheres to the provisions of the Civil Rights Act of 333.26 1964 and chapter 363. For the purposes of this clause, 333.27 "tuition" includes fees or tuition as defined in section 333.28 290.0674, subdivision 1, clause (1). As used in this clause, 333.29 "textbooks" includes books and other instructional materials and 333.30 equipment purchased or leased for use in elementary and 333.31 secondary schools in teaching only those subjects legally and 333.32 commonly taught in public elementary and secondary schools in 333.33 this state. Equipment expenses qualifying for deduction 333.34 includes expenses as defined and limited in section 290.0674, 333.35 subdivision 1, clause (3). "Textbooks" does not include 333.36 instructional books and materials used in the teaching of 334.1 religious tenets, doctrines, or worship, the purpose of which is 334.2 to instill such tenets, doctrines, or worship, nor does it 334.3 include books or materials for, or transportation to, 334.4 extracurricular activities including sporting events, musical or 334.5 dramatic events, speech activities, driver's education, or 334.6 similar programs. For purposes of the subtraction provided by 334.7 this clause, "qualifying child" has the meaning given in section 334.8 32(c)(3) of the Internal Revenue Code; 334.9 (4)contributions made in taxable years beginning after334.10December 31, 1981, and before January 1, 1985, to a qualified334.11governmental pension plan, an individual retirement account,334.12simplified employee pension, or qualified plan covering a334.13self-employed person that were included in Minnesota gross334.14income in the taxable year for which the contributions were made334.15but were deducted or were not included in the computation of334.16federal adjusted gross income, less any amount allowed to be334.17subtracted as a distribution under this subdivision or a334.18predecessor provision in taxable years that began before January334.191, 2000. This subtraction applies only for taxable years334.20beginning after December 31, 1999, and before January 1, 2001.334.21If an individual's subtraction under this clause exceeds the334.22individual's taxable income, the excess may be carried forward334.23to taxable years beginning after December 31, 2000, and before334.24January 1, 2002;334.25(5)income as provided under section 290.0802; 334.26(6)(5) to the extent included in federal adjusted gross 334.27 income, income realized on disposition of property exempt from 334.28 tax under section 290.491; 334.29(7)(6) to the extent not deducted in determining federal 334.30 taxable income or used to claim the long-term care insurance 334.31 credit under section 290.0672, the amount paid for health 334.32 insurance of self-employed individuals as determined under 334.33 section 162(l) of the Internal Revenue Code, except that the 334.34 percent limit does not apply. If the individual deducted 334.35 insurance payments under section 213 of the Internal Revenue 334.36 Code of 1986, the subtraction under this clause must be reduced 335.1 by the lesser of: 335.2 (i) the total itemized deductions allowed under section 335.3 63(d) of the Internal Revenue Code, less state, local, and 335.4 foreign income taxes deductible under section 164 of the 335.5 Internal Revenue Code and the standard deduction under section 335.6 63(c) of the Internal Revenue Code; or 335.7 (ii) the lesser of (A) the amount of insurance qualifying 335.8 as "medical care" under section 213(d) of the Internal Revenue 335.9 Code to the extent not deducted under section 162(1) of the 335.10 Internal Revenue Code or excluded from income or (B) the total 335.11 amount deductible for medical care under section 213(a); 335.12(8)(7) the exemption amount allowed under Laws 1995, 335.13 chapter 255, article 3, section 2, subdivision 3; 335.14(9)(8) to the extent included in federal taxable income, 335.15 postservice benefits for youth community service under section 335.16 124D.42 for volunteer service under United States Code, title 335.17 42, sections 12601 to 12604; 335.18(10)(9) to the extent not deducted in determining federal 335.19 taxable income by an individual who does not itemize deductions 335.20 for federal income tax purposes for the taxable year, an amount 335.21 equal to 50 percent of the excess of charitable contributions 335.22 allowable as a deduction for the taxable year under section 335.23 170(a) of the Internal Revenue Code over $500; 335.24(11)(10) for taxable years beginning before January 1, 335.25 2008, the amount of the federal small ethanol producer credit 335.26 allowed under section 40(a)(3) of the Internal Revenue Code 335.27 which is included in gross income under section 87 of the 335.28 Internal Revenue Code; and 335.29(12)(11) for individuals who are allowed a federal foreign 335.30 tax credit for taxes that do not qualify for a credit under 335.31 section 290.06, subdivision 22, an amount equal to the carryover 335.32 of subnational foreign taxes for the taxable year, but not to 335.33 exceed the total subnational foreign taxes reported in claiming 335.34 the foreign tax credit. For purposes of this clause, "federal 335.35 foreign tax credit" means the credit allowed under section 27 of 335.36 the Internal Revenue Code, and "carryover of subnational foreign 336.1 taxes" equals the carryover allowed under section 904(c) of the 336.2 Internal Revenue Code minus national level foreign taxes to the 336.3 extent they exceed the federal foreign tax credit. 336.4[EFFECTIVE DATE.] This section is effective the day 336.5 following final enactment. 336.6 Sec. 19. Minnesota Statutes 2001 Supplement, section 336.7 290.01, subdivision 31, is amended to read: 336.8 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 336.9 defined otherwise, "Internal Revenue Code" means the Internal 336.10 Revenue Code of 1986, as amended throughJune 15, 2001February 336.11 1, 2002. 336.12[EFFECTIVE DATE.] This section is effective the day 336.13 following final enactment. 336.14 Sec. 20. Minnesota Statutes 2000, section 290.067, 336.15 subdivision 1, is amended to read: 336.16 Subdivision 1. [AMOUNT OF CREDIT.] (a) A taxpayer may take 336.17 as a credit against the tax due from the taxpayer and a spouse, 336.18 if any, under this chapter an amount equal to the dependent care 336.19 credit for which the taxpayer is eligible pursuant to the 336.20 provisions of section 21 of the Internal Revenue Code subject to 336.21 the limitations provided in subdivision 2 except that in 336.22 determining whether the child qualified as a dependent, income 336.23 received as a Minnesota family investment program grant or 336.24 allowance to or on behalf of the child must not be taken into 336.25 account in determining whether the child received more than half 336.26 of the child's support from the taxpayer, and the provisions of 336.27 section 32(b)(1)(D) of the Internal Revenue Code do not apply. 336.28 (b) If a child who has not attained the age of six years at 336.29 the close of the taxable year is cared for at a licensed family 336.30 day care home operated by the child's parent, the taxpayer is 336.31 deemed to have paid employment-related expenses. If the child 336.32 is 16 months old or younger at the close of the taxable year, 336.33 the amount of expenses deemed to have been paid equals the 336.34 maximum limit for one qualified individual under section 21(c) 336.35 and (d) of the Internal Revenue Code. If the child is older 336.36 than 16 months of age but has not attained the age of six years 337.1 at the close of the taxable year, the amount of expenses deemed 337.2 to have been paid equals the amount the licensee would charge 337.3 for the care of a child of the same age for the same number of 337.4 hours of care. 337.5 (c) If a married couple: 337.6 (1) has a child who has not attained the age of one year at 337.7 the close of the taxable year; 337.8 (2) files a joint tax return for the taxable year; and 337.9 (3) does not participate in a dependent care assistance 337.10 program as defined in section 129 of the Internal Revenue Code, 337.11 in lieu of the actual employment related expenses paid for that 337.12 child under paragraph (a) or the deemed amount under paragraph 337.13 (b), the lesser of (i) the combined earned income of the couple 337.14 or (ii)$2,400the amount of the maximum limit for one qualified 337.15 individual under section 21(c) and (d) of the Internal Revenue 337.16 Code will be deemed to be the employment related expense paid 337.17 for that child. The earned income limitation of section 21(d) 337.18 of the Internal Revenue Code shall not apply to this deemed 337.19 amount. These deemed amounts apply regardless of whether any 337.20 employment-related expenses have been paid. 337.21 (d) If the taxpayer is not required and does not file a 337.22 federal individual income tax return for the tax year, no credit 337.23 is allowed for any amount paid to any person unless: 337.24 (1) the name, address, and taxpayer identification number 337.25 of the person are included on the return claiming the credit; or 337.26 (2) if the person is an organization described in section 337.27 501(c)(3) of the Internal Revenue Code and exempt from tax under 337.28 section 501(a) of the Internal Revenue Code, the name and 337.29 address of the person are included on the return claiming the 337.30 credit. 337.31 In the case of a failure to provide the information required 337.32 under the preceding sentence, the preceding sentence does not 337.33 apply if it is shown that the taxpayer exercised due diligence 337.34 in attempting to provide the information required. 337.35 In the case of a nonresident, part-year resident, or a 337.36 person who has earned income not subject to tax under this 338.1 chapter, the credit determined under section 21 of the Internal 338.2 Revenue Code must be allocated based on the ratio by which the 338.3 earned income of the claimant and the claimant's spouse from 338.4 Minnesota sources bears to the total earned income of the 338.5 claimant and the claimant's spouse. 338.6[EFFECTIVE DATE.] This section is effective for tax years 338.7 beginning after December 31, 2002. 338.8 Sec. 21. Minnesota Statutes 2000, section 290.067, 338.9 subdivision 2a, is amended to read: 338.10 Subd. 2a. [INCOME.] (a) For purposes of this section, 338.11 "income" means the sum of the following: 338.12 (1) federal adjusted gross income as defined in section 62 338.13 of the Internal Revenue Code; and 338.14 (2) the sum of the following amounts to the extent not 338.15 included in clause (1): 338.16 (i) all nontaxable income; 338.17 (ii) the amount of a passive activity loss that is not 338.18 disallowed as a result of section 469, paragraph (i) or (m) of 338.19 the Internal Revenue Code and the amount of passive activity 338.20 loss carryover allowed under section 469(b) of the Internal 338.21 Revenue Code; 338.22 (iii) an amount equal to the total of any discharge of 338.23 qualified farm indebtedness of a solvent individual excluded 338.24 from gross income under section 108(g) of the Internal Revenue 338.25 Code; 338.26 (iv) cash public assistance and relief; 338.27 (v) any pension or annuity (including railroad retirement 338.28 benefits, all payments received under the federal Social 338.29 Security Act, supplemental security income, and veterans 338.30 benefits), which was not exclusively funded by the claimant or 338.31 spouse, or which was funded exclusively by the claimant or 338.32 spouse and which funding payments were excluded from federal 338.33 adjusted gross income in the years when the payments were made; 338.34 (vi) interest received from the federal or a state 338.35 government or any instrumentality or political subdivision 338.36 thereof; 339.1 (vii) workers' compensation; 339.2 (viii) nontaxable strike benefits; 339.3 (ix) the gross amounts of payments received in the nature 339.4 of disability income or sick pay as a result of accident, 339.5 sickness, or other disability, whether funded through insurance 339.6 or otherwise; 339.7 (x) a lump sum distribution under section 402(e)(3) of the 339.8 Internal Revenue Code; 339.9 (xi) contributions made by the claimant to an individual 339.10 retirement account, including a qualified voluntary employee 339.11 contribution; simplified employee pension plan; self-employed 339.12 retirement plan; cash or deferred arrangement plan under section 339.13 401(k) of the Internal Revenue Code; or deferred compensation 339.14 plan under section 457 of the Internal Revenue Code; and 339.15 (xii) nontaxable scholarship or fellowship grants. 339.16 In the case of an individual who files an income tax return 339.17 on a fiscal year basis, the term "federal adjusted gross income" 339.18 means federal adjusted gross income reflected in the fiscal year 339.19 ending in the next calendar year. Federal adjusted gross income 339.20 may not be reduced by the amount of a net operating loss 339.21 carryback or carryforward or a capital loss carryback or 339.22 carryforward allowed for the year. 339.23 (b) "Income" does not include: 339.24 (1) amounts excluded pursuant to the Internal Revenue Code, 339.25 sections 101(a) and 102; 339.26 (2) amounts of any pension or annuity that were exclusively 339.27 funded by the claimant or spouse if the funding payments were 339.28 not excluded from federal adjusted gross income in the years 339.29 when the payments were made; 339.30 (3) surplus food or other relief in kind supplied by a 339.31 governmental agency; 339.32 (4) relief granted under chapter 290A;and339.33 (5) child support payments received under a temporary or 339.34 final decree of dissolution or legal separation; and 339.35 (6) restitution payments received by eligible individuals 339.36 and excludible interest as defined in section 803 of the 340.1 Economic Growth and Tax Relief Reconciliation Act of 2001, 340.2 Public Law Number 107-16. 340.3[EFFECTIVE DATE.] This section is effective for tax years 340.4 beginning after December 31, 2000. 340.5 Sec. 22. Minnesota Statutes 2001 Supplement, section 340.6 290.0675, subdivision 1, is amended to read: 340.7 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 340.8 section the following terms have the meanings given. 340.9 (b) "Earned income" means the sum of the following, to the 340.10 extent included in Minnesota taxable income: 340.11 (1) earned income as defined in section 32(c)(2) of the 340.12 Internal Revenue Code; 340.13 (2) income received from a retirement pension, 340.14 profit-sharing, stock bonus, or annuity plan; and 340.15 (3) social security benefits as defined in section 86(d)(1) 340.16 of the Internal Revenue Code. 340.17 (c) "Taxable income" means net income as defined in section 340.18 290.01, subdivision 19. 340.19 (d) "Earned income of lesser-earning spouse" means the 340.20 earned income of the spouse with the lesser amount of earned 340.21 income as defined in paragraph (b) for the taxable year minus 340.22 the sum of (i) the amount for one exemption under section 151(d) 340.23 of the Internal Revenue Code and (ii) one-half the amount of the 340.24 standard deduction under section 63(c)(2)(A) and (4) of the 340.25 Internal Revenue Code. 340.26[EFFECTIVE DATE.] This section is effective for tax years 340.27 beginning after December 31, 2000. 340.28 Sec. 23. Minnesota Statutes 2001 Supplement, section 340.29 290.0675, subdivision 3, is amended to read: 340.30 Subd. 3. [CREDIT AMOUNT.] The credit amount is the 340.31 difference between the tax on the couple's joint Minnesota 340.32 taxable income under the rates in section 290.06, subdivision 340.33 2c, paragraph (a), and the sum of the tax under the rates of 340.34 section 290.06, subdivision 2c, paragraph (b), on the earned 340.35 income of the lesser-earning spouse, and the tax under the rates 340.36 of section 290.06, subdivision 2c, paragraph (b), on the 341.1 couple's joint Minnesota taxable income, minus the earned income 341.2 of the lesser-earning spouse. 341.3For taxable years beginning after December 31, 2001,The 341.4 commissioner of revenue shall prepare and make available to 341.5 taxpayers a comprehensive table showing the credit under this 341.6 section at brackets of earnings of the lesser-earning spouse and 341.7 joint taxable income. The brackets of earnings shall not be 341.8 more than $2,000. 341.9For taxable years beginning after December 31, 2002, the341.10commissioner shall update the table as necessary to provide a341.11credit that reflects the relationship between the marginal tax341.12rates imposed under section 290.06, subdivision 2c.341.13[EFFECTIVE DATE.] This section is effective for tax years 341.14 beginning after December 31, 2000. 341.15 Sec. 24. Minnesota Statutes 2001 Supplement, section 341.16 290.091, subdivision 2, is amended to read: 341.17 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 341.18 this section, the following terms have the meanings given: 341.19 (a) "Alternative minimum taxable income" means the sum of 341.20 the following for the taxable year: 341.21 (1) the taxpayer's federal alternative minimum taxable 341.22 income as defined in section 55(b)(2) of the Internal Revenue 341.23 Code; 341.24 (2) the taxpayer's itemized deductions allowed in computing 341.25 federal alternative minimum taxable income, but excluding: 341.26 (i) the Minnesota charitable contribution deduction; 341.27 (ii) the medical expense deduction; 341.28 (iii) the casualty, theft, and disaster loss deduction; and 341.29 (iv) the impairment-related work expenses of a disabled 341.30 person;and341.31(v) holocaust victims' settlement payments to the extent341.32allowed under section 290.01, subdivision 19b;341.33 (3) for depletion allowances computed under section 613A(c) 341.34 of the Internal Revenue Code, with respect to each property (as 341.35 defined in section 614 of the Internal Revenue Code), to the 341.36 extent not included in federal alternative minimum taxable 342.1 income, the excess of the deduction for depletion allowable 342.2 under section 611 of the Internal Revenue Code for the taxable 342.3 year over the adjusted basis of the property at the end of the 342.4 taxable year (determined without regard to the depletion 342.5 deduction for the taxable year); 342.6 (4) to the extent not included in federal alternative 342.7 minimum taxable income, the amount of the tax preference for 342.8 intangible drilling cost under section 57(a)(2) of the Internal 342.9 Revenue Code determined without regard to subparagraph (E); and 342.10 (5) to the extent not included in federal alternative 342.11 minimum taxable income, the amount of interest income as 342.12 provided by section 290.01, subdivision 19a, clause (1); 342.13 less the sum of the amounts determined under the following: 342.14 (1) interest income as defined in section 290.01, 342.15 subdivision 19b, clause (1); 342.16 (2) an overpayment of state income tax as provided by 342.17 section 290.01, subdivision 19b, clause (2), to the extent 342.18 included in federal alternative minimum taxable income; and 342.19 (3) the amount of investment interest paid or accrued 342.20 within the taxable year on indebtedness to the extent that the 342.21 amount does not exceed net investment income, as defined in 342.22 section 163(d)(4) of the Internal Revenue Code. Interest does 342.23 not include amounts deducted in computing federal adjusted gross 342.24 income; and342.25(4) amounts subtracted from federal taxable income as342.26provided by section 290.01, subdivision 19b, clause (4). 342.27 In the case of an estate or trust, alternative minimum 342.28 taxable income must be computed as provided in section 59(c) of 342.29 the Internal Revenue Code. 342.30 (b) "Investment interest" means investment interest as 342.31 defined in section 163(d)(3) of the Internal Revenue Code. 342.32 (c) "Tentative minimum tax" equals 6.4 percent of 342.33 alternative minimum taxable income after subtracting the 342.34 exemption amount determined under subdivision 3. 342.35 (d) "Regular tax" means the tax that would be imposed under 342.36 this chapter (without regard to this section and section 343.1 290.032), reduced by the sum of the nonrefundable credits 343.2 allowed under this chapter. 343.3 (e) "Net minimum tax" means the minimum tax imposed by this 343.4 section. 343.5 (f) "Minnesota charitable contribution deduction" means a 343.6 charitable contribution deduction under section 170 of the 343.7 Internal Revenue Code to or for the use of an entity described 343.8 in Minnesota Statutes 2000, section 290.21, subdivision 3, 343.9 clauses (a) to (e). When the federal deduction for charitable 343.10 contributions is limited under section 170(b) of the Internal 343.11 Revenue Code, the allowable contributions in the year of 343.12 contribution are deemed to be first contributions to entities 343.13 described in Minnesota Statutes 2000, section 290.21, 343.14 subdivision 3, clauses (a) to (e). 343.15[EFFECTIVE DATE.] This section is effective the day 343.16 following final enactment. 343.17 Sec. 25. Minnesota Statutes 2001 Supplement, section 343.18 290.0921, subdivision 2, is amended to read: 343.19 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 343.20 the following terms have the meanings given them. 343.21 (b) "Alternative minimum taxable net income" is alternative 343.22 minimum taxable income, 343.23 (1) less the exemption amount, and 343.24 (2) apportioned or allocated to Minnesota under section 343.25 290.17, 290.191, or 290.20. 343.26 (c) The "exemption amount" is $40,000, reduced, but not 343.27 below zero, by 25 percent of the excess of alternative minimum 343.28 taxable income over $150,000. 343.29 (d) "Minnesota alternative minimum taxable income" is 343.30 alternative minimum taxable net income, less the deductions for 343.31 alternative tax net operating loss under subdivision 4; 343.32charitable contributions under subdivision 5;and dividends 343.33 received under subdivision 6. The sum of the deductions under 343.34 this paragraph may not exceed 90 percent of alternative minimum 343.35 taxable net income. This limitation does not apply to a 343.36 deduction for dividends paid to or received from a corporation 344.1 which is subject to tax under section 290.36 and which is a 344.2 member of an affiliated group of corporations as defined by the 344.3 Internal Revenue Code. 344.4[EFFECTIVE DATE.] This section is effective for taxable 344.5 years beginning after December 31, 2001. 344.6 Sec. 26. Minnesota Statutes 2000, section 290.17, 344.7 subdivision 2, is amended to read: 344.8 Subd. 2. [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 344.9 BUSINESS.] The income of a taxpayer subject to the allocation 344.10 rules that is not derived from the conduct of a trade or 344.11 business must be assigned in accordance with paragraphs (a) to 344.12 (f): 344.13 (a)(1) Subject to paragraphs (a)(2), (a)(3), and (a)(4), 344.14 income from wages as defined in section 3401(a) and (f) of the 344.15 Internal Revenue Code is assigned to this state if, and to the 344.16 extent that, the work of the employee is performed within it; 344.17 all other income from such sources is treated as income from 344.18 sources without this state. 344.19 Severance pay shall be considered income from labor or 344.20 personal or professional services. 344.21 (2) In the case of an individual who is a nonresident of 344.22 Minnesota and who is an athlete or entertainer, income from 344.23 compensation for labor or personal services performed within 344.24 this state shall be determined in the following manner: 344.25 (i) The amount of income to be assigned to Minnesota for an 344.26 individual who is a nonresident salaried athletic team employee 344.27 shall be determined by using a fraction in which the denominator 344.28 contains the total number of days in which the individual is 344.29 under a duty to perform for the employer, and the numerator is 344.30 the total number of those days spent in Minnesota. For purposes 344.31 of this paragraph, off-season training activities, unless 344.32 conducted at the team's facilities as part of a team imposed 344.33 program, are not included in the total number of duty days. 344.34 Bonuses earned as a result of play during the regular season or 344.35 for participation in championship, play-off, or all-star games 344.36 must be allocated under the formula. Signing bonuses are not 345.1 subject to allocation under the formula if they are not 345.2 conditional on playing any games for the team, are payable 345.3 separately from any other compensation, and are nonrefundable; 345.4 and 345.5 (ii) The amount of income to be assigned to Minnesota for 345.6 an individual who is a nonresident, and who is an athlete or 345.7 entertainer not listed in clause (i), for that person's athletic 345.8 or entertainment performance in Minnesota shall be determined by 345.9 assigning to this state all income from performances or athletic 345.10 contests in this state. 345.11 (3) For purposes of this section, amounts received by a 345.12 nonresident as "retirement income" as defined in section (b)(1) 345.13 of the State Income Taxation of Pension Income Act, Public Law 345.14 Number 104-95, are not considered income derived from carrying 345.15 on a trade or business or from wages or other compensation for 345.16 work an employee performed in Minnesota, and are not taxable 345.17 under this chapter. 345.18 (4) Wages, otherwise assigned to this state under clause 345.19 (1) and not qualifying under clause (3), are not taxable under 345.20 this chapter if the following conditions are met: 345.21 (i) the recipient was not a resident of this state for any 345.22 part of the taxable year in which the wages were received; and 345.23 (ii) the wages are for work performed while the recipient 345.24 was a resident of this state. 345.25 (b) Income or gains from tangible property located in this 345.26 state that is not employed in the business of the recipient of 345.27 the income or gains must be assigned to this state. 345.28 (c) Income or gains from intangible personal property not 345.29 employed in the business of the recipient of the income or gains 345.30 must be assigned to this state if the recipient of the income or 345.31 gains is a resident of this state or is a resident trust or 345.32 estate. 345.33 Gain on the sale of a partnership interest is allocable to 345.34 this state in the ratio of the original cost of partnership 345.35 tangible property in this state to the original cost of 345.36 partnership tangible property everywhere, determined at the time 346.1 of the sale. If more than 50 percent of the value of the 346.2 partnership's assets consists of intangibles, gain or loss from 346.3 the sale of the partnership interest is allocated to this state 346.4 in accordance with the sales factor of the partnership for its 346.5 first full tax period immediately preceding the tax period of 346.6 the partnership during which the partnership interest was sold. 346.7 Gain on the sale of goodwill or income from a covenant not 346.8 to compete that is connected with a business operating all or 346.9 partially in Minnesota is allocated to this state to the extent 346.10 that the income from the business in the year preceding the year 346.11 of sale was assignable to Minnesota under subdivision 3. 346.12 When an employer pays an employee for a covenant not to 346.13 compete, the income allocated to this state is in the ratio of 346.14 the employee's service in Minnesota in the calendar year 346.15 preceding leaving the employment of the employer over the total 346.16 services performed by the employee for the employer in that year. 346.17 (d) Income from winnings onMinnesota pari-mutuel betting346.18tickets, the Minnesota state lottery, and lawful gambling as346.19defined in section 349.12, subdivision 24, conducted within the346.20boundaries of the state of Minnesota shall be assigned to this346.21statea bet made by an individual while in Minnesota is assigned 346.22 to this state. In this paragraph, "bet" has the meaning given 346.23 in section 609.75, subdivision 2, as limited by section 609.75, 346.24 subdivision 3, clauses (1), (2), and (3). 346.25 (e) All items of gross income not covered in paragraphs (a) 346.26 to (d) and not part of the taxpayer's income from a trade or 346.27 business shall be assigned to the taxpayer's domicile. 346.28 (f) For the purposes of this section, working as an 346.29 employee shall not be considered to be conducting a trade or 346.30 business. 346.31[EFFECTIVE DATE.] This section is effective for tax years 346.32 beginning after December 31, 2001. 346.33 Sec. 27. Minnesota Statutes 2000, section 290.17, 346.34 subdivision 3, is amended to read: 346.35 Subd. 3. [TRADE OR BUSINESS INCOME; GENERAL RULE.] All 346.36 income of a trade or business is subject to apportionment except 347.1 nonbusiness income. Income derived from carrying on a trade or 347.2 business must be assigned to this state if the trade or business 347.3 is conducted wholly within this state, assigned outside this 347.4 state if conducted wholly without this state and apportioned 347.5 between this state and other states and countries under this 347.6 subdivision if conducted partly within and partly without this 347.7 state. For purposes of determining whether a trade or business 347.8 is carried on exclusively within or without this state: 347.9 (a) A trade or business physically located exclusively 347.10 within this state is nevertheless carried on partly within and 347.11 partly without this state if any of the principles set forth in 347.12 section 290.191 for the allocation of sales or receipts within 347.13 or without this state when applied to the taxpayer's situation 347.14 result in the allocation of any sales or receipts without this 347.15 state. 347.16 (b) A trade or business physically located exclusively 347.17 without this state is nevertheless carried on partly within and 347.18 partly without this state if any of the principles set forth in 347.19 section 290.191 for the allocation of sales or receipts within 347.20 or without this state when applied to the taxpayer's situation 347.21 result in the allocation of any sales or receiptswithoutwithin 347.22 this state. The jurisdiction to tax such a business under this 347.23 chapter must be determined in accordance with sections 290.014 347.24 and 290.015. 347.25[EFFECTIVE DATE.] This section is effective for tax years 347.26 beginning after December 31, 2001. 347.27 Sec. 28. Minnesota Statutes 2000, section 290A.03, 347.28 subdivision 3, is amended to read: 347.29 Subd. 3. [INCOME.] (1) "Income" means the sum of the 347.30 following: 347.31 (a) federal adjusted gross income as defined in the 347.32 Internal Revenue Code; and 347.33 (b) the sum of the following amounts to the extent not 347.34 included in clause (a): 347.35 (i) all nontaxable income; 347.36 (ii) the amount of a passive activity loss that is not 348.1 disallowed as a result of section 469, paragraph (i) or (m) of 348.2 the Internal Revenue Code and the amount of passive activity 348.3 loss carryover allowed under section 469(b) of the Internal 348.4 Revenue Code; 348.5 (iii) an amount equal to the total of any discharge of 348.6 qualified farm indebtedness of a solvent individual excluded 348.7 from gross income under section 108(g) of the Internal Revenue 348.8 Code; 348.9 (iv) cash public assistance and relief; 348.10 (v) any pension or annuity (including railroad retirement 348.11 benefits, all payments received under the federal Social 348.12 Security Act, supplemental security income, and veterans 348.13 benefits), which was not exclusively funded by the claimant or 348.14 spouse, or which was funded exclusively by the claimant or 348.15 spouse and which funding payments were excluded from federal 348.16 adjusted gross income in the years when the payments were made; 348.17 (vi) interest received from the federal or a state 348.18 government or any instrumentality or political subdivision 348.19 thereof; 348.20 (vii) workers' compensation; 348.21 (viii) nontaxable strike benefits; 348.22 (ix) the gross amounts of payments received in the nature 348.23 of disability income or sick pay as a result of accident, 348.24 sickness, or other disability, whether funded through insurance 348.25 or otherwise; 348.26 (x) a lump sum distribution under section 402(e)(3) of the 348.27 Internal Revenue Code; 348.28 (xi) contributions made by the claimant to an individual 348.29 retirement account, including a qualified voluntary employee 348.30 contribution; simplified employee pension plan; self-employed 348.31 retirement plan; cash or deferred arrangement plan under section 348.32 401(k) of the Internal Revenue Code; or deferred compensation 348.33 plan under section 457 of the Internal Revenue Code; and 348.34 (xii) nontaxable scholarship or fellowship grants. 348.35 In the case of an individual who files an income tax return 348.36 on a fiscal year basis, the term "federal adjusted gross income" 349.1 shall mean federal adjusted gross income reflected in the fiscal 349.2 year ending in the calendar year. Federal adjusted gross income 349.3 shall not be reduced by the amount of a net operating loss 349.4 carryback or carryforward or a capital loss carryback or 349.5 carryforward allowed for the year. 349.6 (2) "Income" does not include: 349.7 (a) amounts excluded pursuant to the Internal Revenue Code, 349.8 sections 101(a) and 102; 349.9 (b) amounts of any pension or annuity which was exclusively 349.10 funded by the claimant or spouse and which funding payments were 349.11 not excluded from federal adjusted gross income in the years 349.12 when the payments were made; 349.13 (c) surplus food or other relief in kind supplied by a 349.14 governmental agency; 349.15 (d) relief granted under this chapter; 349.16 (e) child support payments received under a temporary or 349.17 final decree of dissolution or legal separation; or 349.18 (f)holocaust settlement payments as defined in section349.19290.01, subdivision 32restitution payments received by eligible 349.20 individuals and excludible interest as defined in section 803 of 349.21 the Economic Growth and Tax Relief Reconciliation Act of 2001, 349.22 Public Law Number 107-16. 349.23 (3) The sum of the following amounts may be subtracted from 349.24 income: 349.25 (a) for the claimant's first dependent, the exemption 349.26 amount multiplied by 1.4; 349.27 (b) for the claimant's second dependent, the exemption 349.28 amount multiplied by 1.3; 349.29 (c) for the claimant's third dependent, the exemption 349.30 amount multiplied by 1.2; 349.31 (d) for the claimant's fourth dependent, the exemption 349.32 amount multiplied by 1.1; 349.33 (e) for the claimant's fifth dependent, the exemption 349.34 amount; and 349.35 (f) if the claimant or claimant's spouse was disabled or 349.36 attained the age of 65 on or before December 31 of the year for 350.1 which the taxes were levied or rent paid, the exemption amount. 350.2 For purposes of this subdivision, the "exemption amount" 350.3 means the exemption amount under section 151(d) of the Internal 350.4 Revenue Code for the taxable year for which the income is 350.5 reported. 350.6[EFFECTIVE DATE.] This section is effective the day 350.7 following final enactment. 350.8 Sec. 29. Minnesota Statutes 2001 Supplement, section 350.9 290A.03, subdivision 15, is amended to read: 350.10 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 350.11 means the Internal Revenue Code of 1986, as amended throughJune350.1215, 2001February 1, 2002. 350.13[EFFECTIVE DATE.] This section is effective the day 350.14 following final enactment. 350.15 Sec. 30. Minnesota Statutes 2001 Supplement, section 350.16 290A.04, subdivision 2h, is amended to read: 350.17 Subd. 2h. [ADDITIONAL REFUND.] (a)Beginning with gross350.18property taxes payable in 2003,If the gross property taxes 350.19 payable on a homestead increase more than 12 percent over the 350.20 property taxes payable in the prior year on the same property 350.21 that is owned and occupied by the same owner on January 2 of 350.22 both years, and the amount of that increase is $100 or more, a 350.23 claimant who is a homeowner shall be allowed an additional 350.24 refund equal to 60 percent of the amount of the increase over 350.25 the greater of 12 percent of the prior year's property taxes 350.26 payable or $100. This subdivision shall not apply to any 350.27 increase in the gross property taxes payable attributable to 350.28 improvements made to the homestead after the assessment date for 350.29 the prior year's taxes. This subdivision shall not apply to any 350.30 increase in the gross property taxes payable attributable to the 350.31 termination of valuation exclusions under section 273.11, 350.32 subdivision 16. 350.33 The maximum refund allowed under this subdivision is $1,000. 350.34 (b) For purposes of this subdivision "gross property taxes 350.35 payable" means property taxes payable determined without regard 350.36 to the refund allowed under this subdivision. 351.1 (c) In addition to the other proofs required by this 351.2 chapter, each claimant under this subdivision shall file with 351.3 the property tax refund return a copy of the property tax 351.4 statement for taxes payable in the preceding year or other 351.5 documents required by the commissioner. 351.6 (d) Upon request, the appropriate county official shall 351.7 make available the names and addresses of the property taxpayers 351.8 who may be eligible for the additional property tax refund under 351.9 this section. The information shall be provided on a magnetic 351.10 computer disk. The county may recover its costs by charging the 351.11 person requesting the information the reasonable cost for 351.12 preparing the data. The information may not be used for any 351.13 purpose other than for notifying the homeowner of potential 351.14 eligibility and assisting the homeowner, without charge, in 351.15 preparing a refund claim. 351.16[EFFECTIVE DATE.] This section is effective beginning with 351.17 refunds based on gross property taxes payable in 2002. 351.18 Sec. 31. Minnesota Statutes 2001 Supplement, section 351.19 295.60, is amended by adding a subdivision to read: 351.20 Subd. 1a. [USE TAX; CREDIT FOR TAXES PAID.] (a) A person 351.21 that receives fur clothing for use or storage in Minnesota, 351.22 other than from a furrier that paid the tax under subdivision 1, 351.23 is subject to tax at the rate imposed under subdivision 1. 351.24 Liability for the tax is incurred when the person has possession 351.25 of the fur clothing in Minnesota. The tax must be remitted to 351.26 the commissioner in the manner prescribed by subdivision 3. 351.27 (b) A person that has paid taxes to another jurisdiction on 351.28 the same transaction and is subject to tax under this section is 351.29 entitled to a credit for the tax legally due and paid to another 351.30 jurisdiction to the extent of the lesser of (1) the tax actually 351.31 paid to the other jurisdiction, or (2) the amount of tax imposed 351.32 by Minnesota on the transaction subject to tax in the other 351.33 jurisdiction. 351.34[EFFECTIVE DATE.] This section is effective for fur 351.35 clothing purchased and brought into Minnesota on or after 351.36 January 1, 2002. 352.1 Sec. 32. Minnesota Statutes 2001 Supplement, section 352.2 295.60, is amended by adding a subdivision to read: 352.3 Subd. 1b. [TAX COLLECTION REQUIRED.] A furrier with nexus 352.4 in Minnesota, who is not subject to tax under subdivision 1, is 352.5 required to collect the tax imposed under subdivision 1a from 352.6 the purchaser of the clothing made from fur and give the 352.7 purchaser a receipt for the tax paid. The tax collected must be 352.8 remitted to the commissioner in the manner prescribed by 352.9 subdivision 3. 352.10[EFFECTIVE DATE.] This section is effective for fur 352.11 clothing purchased and brought into Minnesota on or after 352.12 January 1, 2002. 352.13 Sec. 33. Minnesota Statutes 2001 Supplement, section 352.14 295.60, is amended by adding a subdivision to read: 352.15 Subd. 1c. [TAXES PAID TO ANOTHER JURISDICTION; CREDIT.] A 352.16 furrier that has paid taxes to another jurisdiction measured by 352.17 gross revenue and is subject to tax under this section on the 352.18 same gross revenues is entitled to a credit for the tax legally 352.19 due and paid to another jurisdiction to the extent of the lesser 352.20 of (1) the tax actually paid to the other jurisdiction, or (2) 352.21 the amount of tax imposed by Minnesota on the gross revenues 352.22 subject to tax in the other taxing jurisdictions. 352.23[EFFECTIVE DATE.] This section is effective for gross 352.24 revenues received on or after January 1, 2002. 352.25 Sec. 34. Minnesota Statutes 2001 Supplement, section 352.26 295.60, subdivision 7, is amended to read: 352.27 Subd. 7. [APPLICATION OF OTHER CHAPTERS.] Unless 352.28 specifically provided otherwise by this section, the 352.29 enforcement, interest,and penalty provisions under chapter 294,352.30 appealprovisions in sections 289A.43 and 289A.65, criminal 352.31 penaltiesin section 289A.63, and refunds provisions insection352.32289A.50chapter 289A, civil penalty provisions applicable to 352.33 withholding and sales taxes under section 289A.60, and 352.34 collection and rulemaking provisions under chapter 270, apply to 352.35a liability for thetaxes imposed under this section. 352.36[EFFECTIVE DATE.] This section is effective January 1, 2002. 353.1 Sec. 35. Minnesota Statutes 2000, section 296A.18, 353.2 subdivision 8, is amended to read: 353.3 Subd. 8. [AVIATION FUEL TAXSTATE AIRPORTS FUND.] The 353.4 revenues derived from the excise taxes on aviation gasoline and 353.5 on special fuel received, sold, stored, or withdrawn from 353.6 storage as substitutes for aviation gasoline, shall be paid into 353.7 the state treasury and credited to theaviation fuel taxstate 353.8 airports fund. There is hereby appropriated such sums as are 353.9 needed to carry out the provisions of this subdivision. 353.10[EFFECTIVE DATE.] This section is effective the day 353.11 following final enactment. 353.12 Sec. 36. Minnesota Statutes 2001 Supplement, section 353.13 297A.70, subdivision 3, is amended to read: 353.14 Subd. 3. [SALES OF CERTAIN GOODS AND SERVICES TO 353.15 GOVERNMENT.] (a) The following sales to or use by the specified 353.16 governments and political subdivisions of the state are exempt: 353.17 (1) repair and replacement parts for emergency rescue 353.18 vehicles, fire trucks, and fire apparatus to a political 353.19 subdivision; 353.20 (2) machinery and equipment, except for motor vehicles, 353.21 used directly for mixed municipal solid waste management 353.22 services at a solid waste disposal facility as defined in 353.23 section 115A.03, subdivision 10; 353.24 (3) chore and homemaking services to a political 353.25 subdivision of the state to be provided to elderly or disabled 353.26 individuals; 353.27 (4) telephone services to the department of administration 353.28 that are used to provide telecommunications services through the 353.29 intertechnologies revolving fund; 353.30 (5) firefighter personal protective equipment as defined in 353.31 paragraph (b), if purchased or authorized by and for the use of 353.32 an organized fire department, fire protection district, or fire 353.33 company regularly charged with the responsibility of providing 353.34 fire protection to the state or a political subdivision; 353.35 (6) bullet-resistant body armor that provides the wearer 353.36 with ballistic and trauma protection, if purchased by a law 354.1 enforcement agency of the state or a political subdivision of 354.2 the state, or a licensed peace officer, as defined in section 354.3 626.84, subdivision 1; 354.4 (7) motor vehicles purchased or leased by political 354.5 subdivisions of the state if the vehicles are exempt from 354.6 registration under section 168.012, subdivision 1, paragraph 354.7 (b), exempt from taxation under section 473.448, or exempt from 354.8 the motor vehicle sales tax under section 297B.03, clause (12); 354.9 (8) equipment designed to process, dewater, and recycle 354.10 biosolids for wastewater treatment facilities of political 354.11 subdivisions, and materials incidental to installation of that 354.12 equipment;and materials used to construct buildings to house354.13the equipment, if the materials are purchased after June 30,354.141998, and before July 1, 2001;and 354.15 (9) sales to a town of gravel and of machinery, equipment, 354.16 and accessories, except motor vehicles, used exclusively for 354.17 road and bridge maintenance, and leases by a town of motor 354.18 vehicles exempt from tax under section 297B.03, clause (10). 354.19 (b) For purposes of this subdivision, "firefighters 354.20 personal protective equipment" means helmets, including face 354.21 shields, chin straps, and neck liners; bunker coats and pants, 354.22 including pant suspenders; boots; gloves; head covers or hoods; 354.23 wildfire jackets; protective coveralls; goggles; self-contained 354.24 breathing apparatus; canister filter masks; personal alert 354.25 safety systems; spanner belts; optical or thermal imaging search 354.26 devices; and all safety equipment required by the Occupational 354.27 Safety and Health Administration. 354.28[EFFECTIVE DATE.] This section is effective the day 354.29 following final enactment. 354.30 Sec. 37. Minnesota Statutes 2000, section 297I.05, 354.31 subdivision 11, is amended to read: 354.32 Subd. 11. [RETALIATORY PROVISIONS.] (a) If any other state 354.33 or country imposes any taxes, fines, deposits, penalties, 354.34 licenses, or fees upon any insurance companies of this state and 354.35 their agents doing business in another state or country that are 354.36 in addition to or in excess of those imposed by the laws of this 355.1 state upon foreign insurance companies and their agents doing 355.2 business in this state, the same taxes, fines, deposits, 355.3 penalties, licenses, and fees are imposed upon every similar 355.4 insurance company of that state or country and their agents 355.5 doing or applying to do business in this state. 355.6 (b) If any conditions precedent to the right to do business 355.7 in any other state or country are imposed by the laws of that 355.8 state or country, beyond those imposed upon foreign companies by 355.9 the laws of this state, the same conditions precedent are 355.10 imposed upon every similar insurance company of that state or 355.11 country and their agents doing or applying to do business in 355.12 that state. 355.13 (c) For purposes of this subdivision, "taxes, fines, 355.14 deposits, penalties, licenses, or fees" means an amount of money 355.15 that is deposited in the general revenue fund of the state or 355.16 other similar fund in another state or country and is not 355.17 dedicated to a special purpose or use or money deposited in the 355.18 general revenue fund of the state or other similar fund in 355.19 another state or country and appropriated to the commissioner of 355.20 commerce or insurance for the operation of the department of 355.21 commerce or other similar agency with jurisdiction over 355.22 insurance. Taxes, fines, deposits, penalties, licenses, or fees 355.23 do not include: 355.24 (1) special purpose obligations or assessments imposed in 355.25 connection with particular kinds of insurance, including but not 355.26 limited to assessments imposed in connection with residual 355.27 market mechanisms; or 355.28 (2) assessments made by the insurance guaranty association, 355.29 life and health guarantee association, or similar association. 355.30 (d) This subdivision applies to taxes imposed under 355.31 subdivisions 1, 3, 4, 6, and 12, paragraph (a), clauses (1) and 355.32(3)(2). 355.33 (e) This subdivision does not apply to insurance companies 355.34 organized or domiciled in a state or country, the laws of which 355.35 do not impose retaliatory taxes, fines, deposits, penalties, 355.36 licenses, or fees or which grant, on a reciprocal basis, 356.1 exemptions from retaliatory taxes, fines, deposits, penalties, 356.2 licenses, or fees to insurance companies domiciled in this state. 356.3[EFFECTIVE DATE.] This section is effective retroactively 356.4 to tax years beginning on or after January 1, 2001. 356.5 Sec. 38. Minnesota Statutes 2001 Supplement, section 356.6 298.01, subdivision 3b, is amended to read: 356.7 Subd. 3b. [DEDUCTIONS.] (a) For purposes of determining 356.8 taxable income under subdivision 3, the deductions from gross 356.9 income include only those expenses necessary to convert raw ores 356.10 to marketable quality. Such expenses include costs associated 356.11 with refinement but do not include expenses such as 356.12 transportation, stockpiling, marketing, or marine insurance that 356.13 are incurred after marketable ores are produced, unless the 356.14 expenses are included in gross income. 356.15 (b) The provisions of section 290.01, subdivisions 19c, 356.16 clauses (6) and(10)(9), and 19d, clauses (7) and (11), are not 356.17 used to determine taxable income. 356.18[EFFECTIVE DATE.] This section is effective the day 356.19 following final enactment. 356.20 Sec. 39. Minnesota Statutes 2001 Supplement, section 356.21 298.01, subdivision 4c, is amended to read: 356.22 Subd. 4c. [SPECIAL DEDUCTIONS; NET OPERATING LOSS.] (a) 356.23 For purposes of determining taxable income under subdivision 356.24 4,the following modifications are allowed:356.25(1)the provisions of section 290.01, subdivisions 19c, 356.26 clauses (6) and(10)(9), and 19d, clauses (7) and (11), are not 356.27 used to determine taxable income; and. 356.28(2) for assets placed in service before January 1, 1990,356.29the deduction for depreciation will be the same amount allowed356.30under chapter 290, except that after an asset has been fully356.31depreciated for federal income tax purposes any remaining356.32depreciable basis is allowed as a deduction using the356.33straight-line method over the following number of years:356.34(i) three-year property, one year;356.35(ii) five- and seven-year property, two years;356.36(iii) ten-year property, five years; and357.1(iv) all other property, seven years.357.2No deduction is allowed if an asset is fully depreciated357.3for occupation tax purposes before January 1990.357.4(b) For purposes of determining the deduction allowed under357.5paragraph (a), clause (2), the remaining depreciable basis of357.6property placed in service before January 1, 1990, is calculated357.7as follows:357.8(1) the adjusted basis of the property on December 31,357.91989, which was used to calculate the hypothetical corporate357.10franchise tax under Minnesota Statutes 1988, section 298.40,357.11including salvage value; less357.12(2) deductions for depreciation allowed under section357.13290.01, subdivision 19e.357.14(c) The basis for determining gain or loss on sale or357.15disposition of assets placed in service before January 1, 1990,357.16is the basis determined under paragraph (b), less the deductions357.17allowed under paragraph (a), clause (2).357.18(d)(b) The amount of net operating loss incurred in a 357.19 taxable year beginning before January 1, 1990, that may be 357.20 carried over to a taxable year beginning after December 31, 357.21 1989, is the amount of net operating loss carryover determined 357.22 in the calculation of the hypothetical corporate franchise tax 357.23 under Minnesota Statutes 1988, sections 298.40 and 298.402. 357.24[EFFECTIVE DATE.] This section is effective for taxes 357.25 payable May 1, 2002, and thereafter. 357.26 Sec. 40. Minnesota Statutes 2000, section 477A.011, 357.27 subdivision 20, is amended to read: 357.28 Subd. 20. [CITY NET TAX CAPACITY.] "City net tax capacity" 357.29 means (1) the net tax capacity computed using the net tax 357.30 capacity rates in section 273.13 for taxes payable in the year 357.31 of the aid distribution, and the market values for taxes payable 357.32 in the year prior to the aid distribution plus (2) a city's 357.33 fiscal disparities distribution tax capacity under section 357.34 276A.06, subdivision 2, paragraph (b), or 473F.08, subdivision 357.35 2, paragraph (b), for taxes payable in the year prior to that 357.36 for which aids are being calculated. The market value utilized 358.1 in computing city net tax capacity shall be reduced by the sum 358.2 of (1) a city's market value of commercial industrial property 358.3 as defined in section 276A.01, subdivision 3, or 473F.02, 358.4 subdivision 3, multiplied by the ratio determined pursuant to 358.5 section 276A.06, subdivision 2, paragraph (a), or 473F.08, 358.6 subdivision 2, paragraph (a), (2) the market value of the 358.7 captured value of tax increment financing districts as defined 358.8 in section 469.177, subdivision 2, and (3) the market value of 358.9 transmission lines deducted from a city's total net tax capacity 358.10 under section 273.425. The city net tax capacity will be 358.11 computed using equalized market values. 358.12[EFFECTIVE DATE.] This section is effective for aid payable 358.13 in 2002 and thereafter. 358.14 Sec. 41. Minnesota Statutes 2001 Supplement, section 358.15 477A.011, subdivision 36, is amended to read: 358.16 Subd. 36. [CITY AID BASE.] (a) Except as otherwise 358.17 provided inparagraphs (b) to (o)this subdivision, "city aid 358.18 base" means, for each city, the sum of the local government aid 358.19 and equalization aid it was originally certified to receive in 358.20 calendar year 1993 under Minnesota Statutes 1992, section 358.21 477A.013, subdivisions 3 and 5, and the amount of disparity 358.22 reduction aid it received in calendar year 1993 under Minnesota 358.23 Statutes 1992, section 273.1398, subdivision 3. 358.24 (b) For aids payable in 1996 and thereafter, a city that in 358.25 1992 or 1993 transferred an amount from governmental funds to 358.26 its sewer and water fund, which amount exceeded its net levy for 358.27 taxes payable in the year in which the transfer occurred, has a 358.28 "city aid base" equal to the sum of (i) its city aid base, as 358.29 calculated under paragraph (a), and (ii) one-half of the 358.30 difference between its city aid distribution under section 358.31 477A.013, subdivision 9, for aids payable in 1995 and its city 358.32 aid base for aids payable in 1995. 358.33 (c) The city aid base for any city with a population less 358.34 than 500 is increased by $40,000 for aids payable in calendar 358.35 year 1995 and thereafter, and the maximum amount of total aid it 358.36 may receive under section 477A.013, subdivision 9, paragraph 359.1 (c), is also increased by $40,000 for aids payable in calendar 359.2 year 1995 only, provided that: 359.3 (i) the average total tax capacity rate for taxes payable 359.4 in 1995 exceeds 200 percent; 359.5 (ii) the city portion of the tax capacity rate exceeds 100 359.6 percent; and 359.7 (iii) its city aid base is less than $60 per capita. 359.8 (d) The city aid base for a city is increased by $20,000 in 359.9 1998 and thereafter and the maximum amount of total aid it may 359.10 receive under section 477A.013, subdivision 9, paragraph (c), is 359.11 also increased by $20,000 in calendar year 1998 only, provided 359.12 that: 359.13 (i) the city has a population in 1994 of 2,500 or more; 359.14 (ii) the city is located in a county, outside of the 359.15 metropolitan area, which contains a city of the first class; 359.16 (iii) the city's net tax capacity used in calculating its 359.17 1996 aid under section 477A.013 is less than $400 per capita; 359.18 and 359.19 (iv) at least four percent of the total net tax capacity, 359.20 for taxes payable in 1996, of property located in the city is 359.21 classified as railroad property. 359.22 (e) The city aid base for a city is increased by $200,000 359.23 in 1999 and thereafter and the maximum amount of total aid it 359.24 may receive under section 477A.013, subdivision 9, paragraph 359.25 (c), is also increased by $200,000 in calendar year 1999 only, 359.26 provided that: 359.27 (i) the city was incorporated as a statutory city after 359.28 December 1, 1993; 359.29 (ii) its city aid base does not exceed $5,600; and 359.30 (iii) the city had a population in 1996 of 5,000 or more. 359.31 (f) The city aid base for a city is increased by $450,000 359.32 in 1999 to 2008 and the maximum amount of total aid it may 359.33 receive under section 477A.013, subdivision 9, paragraph (c), is 359.34 also increased by $450,000 in calendar year 1999 only, provided 359.35 that: 359.36 (i) the city had a population in 1996 of at least 50,000; 360.1 (ii) its population had increased by at least 40 percent in 360.2 the ten-year period ending in 1996; and 360.3 (iii) its city's net tax capacity for aids payable in 1998 360.4 is less than $700 per capita. 360.5 (g) Beginning in20022004, the city aid base for a city is 360.6 equal to the sum of its city aid base in20012003 and the 360.7 amount of additional aid it was certified to receive under 360.8 section 477A.06 in20012003. For20022004 only, the maximum 360.9 amount of total aid a city may receive under section 477A.013, 360.10 subdivision 9, paragraph (c), is also increased by the amount it 360.11 was certified to receive under section 477A.06 in20012003. 360.12 (h) The city aid base for a city is increased by $150,000 360.13 for aids payable in 2000 and thereafter, and the maximum amount 360.14 of total aid it may receive under section 477A.013, subdivision 360.15 9, paragraph (c), is also increased by $150,000 in calendar year 360.16 2000 only, provided that: 360.17 (1) the city has a population that is greater than 1,000 360.18 and less than 2,500; 360.19 (2) its commercial and industrial percentage for aids 360.20 payable in 1999 is greater than 45 percent; and 360.21 (3) the total market value of all commercial and industrial 360.22 property in the city for assessment year 1999 is at least 15 360.23 percent less than the total market value of all commercial and 360.24 industrial property in the city for assessment year 1998. 360.25 (i) The city aid base for a city is increased by $200,000 360.26 in 2000 and thereafter, and the maximum amount of total aid it 360.27 may receive under section 477A.013, subdivision 9, paragraph 360.28 (c), is also increased by $200,000 in calendar year 2000 only, 360.29 provided that: 360.30 (1) the city had a population in 1997 of 2,500 or more; 360.31 (2) the net tax capacity of the city used in calculating 360.32 its 1999 aid under section 477A.013 is less than $650 per 360.33 capita; 360.34 (3) the pre-1940 housing percentage of the city used in 360.35 calculating 1999 aid under section 477A.013 is greater than 12 360.36 percent; 361.1 (4) the 1999 local government aid of the city under section 361.2 477A.013 is less than 20 percent of the amount that the formula 361.3 aid of the city would have been if the need increase percentage 361.4 was 100 percent; and 361.5 (5) the city aid base of the city used in calculating aid 361.6 under section 477A.013 is less than $7 per capita. 361.7 (j) The city aid base for a city is increased by $225,000 361.8 in calendar years 2000 to 2002 and the maximum amount of total 361.9 aid it may receive under section 477A.013, subdivision 9, 361.10 paragraph (c), is also increased by $225,000 in calendar year 361.11 2000 only, provided that: 361.12 (1) the city had a population of at least 5,000; 361.13 (2) its population had increased by at least 50 percent in 361.14 the ten-year period ending in 1997; 361.15 (3) the city is located outside of the Minneapolis-St. Paul 361.16 metropolitan statistical area as defined by the United States 361.17 Bureau of the Census; and 361.18 (4) the city received less than $30 per capita in aid under 361.19 section 477A.013, subdivision 9, for aids payable in 1999. 361.20 (k) The city aid base for a city is increased by $102,000 361.21 in 2000 and thereafter, and the maximum amount of total aid it 361.22 may receive under section 477A.013, subdivision 9, paragraph 361.23 (c), is also increased by $102,000 in calendar year 2000 only, 361.24 provided that: 361.25 (1) the city has a population in 1997 of 2,000 or more; 361.26 (2) the net tax capacity of the city used in calculating 361.27 its 1999 aid under section 477A.013 is less than $455 per 361.28 capita; 361.29 (3) the net levy of the city used in calculating 1999 aid 361.30 under section 477A.013 is greater than $195 per capita; and 361.31 (4) the 1999 local government aid of the city under section 361.32 477A.013 is less than 38 percent of the amount that the formula 361.33 aid of the city would have been if the need increase percentage 361.34 was 100 percent. 361.35 (l) The city aid base for a city is increased by $32,000 in 361.36 2001 and thereafter, and the maximum amount of total aid it may 362.1 receive under section 477A.013, subdivision 9, paragraph (c), is 362.2 also increased by $32,000 in calendar year 2001 only, provided 362.3 that: 362.4 (1) the city has a population in 1998 that is greater than 362.5 200 but less than 500; 362.6 (2) the city's revenue need used in calculating aids 362.7 payable in 2000 was greater than $200 per capita; 362.8 (3) the city net tax capacity for the city used in 362.9 calculating aids available in 2000 was equal to or less than 362.10 $200 per capita; 362.11 (4) the city aid base of the city used in calculating aid 362.12 under section 477A.013 is less than $65 per capita; and 362.13 (5) the city's formula aid for aids payable in 2000 was 362.14 greater than zero. 362.15 (m) The city aid base for a city is increased by $7,200 in 362.16 2001 and thereafter, and the maximum amount of total aid it may 362.17 receive under section 477A.013, subdivision 9, paragraph (c), is 362.18 also increased by $7,200 in calendar year 2001 only, provided 362.19 that: 362.20 (1) the city had a population in 1998 that is greater than 362.21 200 but less than 500; 362.22 (2) the city's commercial industrial percentage used in 362.23 calculating aids payable in 2000 was less than ten percent; 362.24 (3) more than 25 percent of the city's population was 60 362.25 years old or older according to the 1990 census; 362.26 (4) the city aid base of the city used in calculating aid 362.27 under section 477A.013 is less than $15 per capita; and 362.28 (5) the city's formula aid for aids payable in 2000 was 362.29 greater than zero. 362.30 (n) The city aid base for a city is increased by $45,000 in 362.31 2001 and thereafter and by an additional $50,000 in calendar 362.32 years 2002 to 2011, and the maximum amount of total aid it may 362.33 receive under section 477A.013, subdivision 9, paragraph (c), is 362.34 also increased by $45,000 in calendar year 2001 only, and by 362.35 $50,000 in calendar year 2002 only, provided that: 362.36 (1) the net tax capacity of the city used in calculating 363.1 its 2000 aid under section 477A.013 is less than $810 per 363.2 capita; 363.3 (2) the population of the city declined more than two 363.4 percent between 1988 and 1998; 363.5 (3) the net levy of the city used in calculating 2000 aid 363.6 under section 477A.013 is greater than $240 per capita; and 363.7 (4) the city received less than $36 per capita in aid under 363.8 section 477A.013, subdivision 9, for aids payable in 2000. 363.9 (o) The city aid base for a city with a population of 363.10 10,000 or more which is located outside of the seven-county 363.11 metropolitan area is increased in 2002 and thereafter, and the 363.12 maximum amount of total aid it may receive under section 363.13 477A.013, subdivision 9, paragraph (b) or (c), is also increased 363.14 in calendar year 2002 only, by an amount equal to the lesser of: 363.15 (1)(i) the total population of the city, as determined by 363.16 the United States Bureau of the Census, in the 2000 census, (ii) 363.17 minus 5,000, (iii) times 60; or 363.18 (2) $2,500,000. 363.19 (p) The city aid base is increased by $50,000 in 2002 and 363.20 thereafter, and the maximum amount of total aid it may receive 363.21 under section 477A.013, subdivision 9, paragraph (c), is also 363.22 increased by $50,000 in calendar year 2002 only, provided that: 363.23 (1) the city is located in the seven-county metropolitan 363.24 area; 363.25 (2) its population in 2000 is between 10,000 and 20,000; 363.26 and 363.27 (3) its commercial industrial percentage, as calculated for 363.28 city aid payable in 2001, was greater than 25 percent. 363.29 (q) The city aid base for a city is increased by $150,000 363.30 in calendar years 2002 to 2011 and the maximum amount of total 363.31 aid it may receive under section 477A.013, subdivision 9, 363.32 paragraph (c), is also increased by $150,000 in calendar year 363.33 2002 only, provided that: 363.34 (1) the city had a population of at least 3,000 but no more 363.35 than 4,000 in 1999; 363.36 (2) its home county is located within the seven-county 364.1 metropolitan area; 364.2 (3) its pre-1940 housing percentage is less than 15 364.3 percent; and 364.4 (4) its city net tax capacity per capita for taxes payable 364.5 in 2000 is less than $900 per capita. 364.6[EFFECTIVE DATE.] This section is effective for aid payable 364.7 in 2002 and thereafter. 364.8 Sec. 42. Minnesota Statutes 2001 Supplement, section 364.9 477A.013, subdivision 9, is amended to read: 364.10 Subd. 9. [CITY AID DISTRIBUTION.] (a) In calendar year 364.11 2002 and thereafter, each city shall receive an aid distribution 364.12 equal to the sum of (1) the city formula aid under subdivision 364.13 8, and (2) its city aid base. 364.14 (b) The percentage increase for a first class city in 364.15 calendar year 1995 and thereafter, except for 2002, shall not 364.16 exceed the percentage increase in the sum of the aid to all 364.17 cities under this section in the current calendar year compared 364.18 to the sum of the aid to all cities in the previous year. For 364.19 aids payable in 2002 only, the amount of the aid paid to a first 364.20 class city shall not exceed the sum of its aid amount for 364.21 calendar year 2001 under this section and its aid payment in 364.22 calendar year 2001 under section 273.1398, subdivision 2, by 364.23 more than 2.5 percent. 364.24 (c) For aids payable in all years except 2002, the total 364.25 aid for any city, except a first class city, shall not exceed 364.26 the sum of (1) ten percent of the city's net levy for the year 364.27 prior to the aid distribution plus (2) its total aid in the 364.28 previous yearbefore any increases or decreases under sections364.2916A.711, subdivision 5, and 477A.0132. For aids payable in 2002 364.30 only, the total aid for any city, except a first class city, 364.31 shall not exceed40 percent ofthe sum of (1) 40 percent of the 364.32 city's net levy for taxes payable in the year prior to the aid 364.33 distribution plus (2) 40 percent of its total aid in the 364.34 previous year under section 273.1398, subdivision 2,before any364.35increases or decreases under sections 16A.711, subdivision 5,364.36and 477A.0132plus (3) its total aid in the previous year under 365.1 this section. 365.2[EFFECTIVE DATE.] This section is effective for aid payable 365.3 in 2002 and thereafter. 365.4 Sec. 43. Minnesota Statutes 2001 Supplement, section 365.5 477A.07, subdivision 1, is amended to read: 365.6 Subdivision 1. [AID AMOUNT.] (a) For aid payable in 2003, 365.7 each county and city is eligible for aid equal to the amount by 365.8 which (i) 0.3 percent of the assessment year 2001 taxable market 365.9 value of class 4a property, plus 0.25 percent of the assessment 365.10 year 2001 market value of class 4b property, as defined in 365.11 section 273.13, subdivision 25, multiplied by the jurisdiction's 365.12 average tax rate for taxes payable in 2002, exceeds (ii) 0.4 365.13 percent of the jurisdiction's total taxable net tax capacity for 365.14 taxes payable in 2002, multiplied by the jurisdiction's average365.15tax rate for taxes payable in 2002. 365.16 (b) For aid payable in 2004, each county and city is 365.17 eligible for aid equal to the amount by which (i) 0.25 percent 365.18 of the assessment year 2002 taxable market value of class 4a 365.19 property, as defined in section 273.13, subdivision 365.20 25, multiplied by the jurisdiction's average tax rate for taxes 365.21 payable in 2003, exceeds (ii) 0.4 percent of the jurisdiction's 365.22 total taxable net tax capacity for taxes payable in 2003,365.23multiplied by the jurisdiction's average tax rate for taxes365.24payable in 2003. 365.25[EFFECTIVE DATE.] This section is effective for aid payable 365.26 in 2003 and thereafter. 365.27 Sec. 44. Minnesota Statutes 2001 Supplement, section 365.28 477A.07, subdivision 3, is amended to read: 365.29 Subd. 3. [CITY AID.] Each city's 2003 aid amount 365.30 determined under subdivision 1 must be permanently added to its 365.31 city aid base under section 477A.011, subdivision 36, and the 365.32 maximum amount of total aid it may receive under section 365.33 477A.013, subdivision 9, paragraph (b) or (c), is increased by 365.34 the same amount for aid payable in 2003. Each city's 2004 aid 365.35 amount determined under subdivision 1 must be permanently added 365.36 to its city aid base under section 477A.011, subdivision 36, and 366.1 the maximum amount of total aid it may receive under section 366.2 477A.013, subdivision 9, paragraph (b) or _(c), is increased by 366.3 the same amount for aid payable in 2004. 366.4[EFFECTIVE DATE.] This section is effective for aids 366.5 payable in calendar years 2003 and 2004. 366.6 Sec. 45. Laws 1993, chapter 375, article 5, section 42, is 366.7 amended to read: 366.8 Sec. 42. [REPORT TO LEGISLATURE.] 366.9 ByFebruaryMarch 1 of each year, the commissioner of 366.10 revenue shall make a report to the legislature on the use of 366.11 limited market value under section 273.13, subdivision 1a, and 366.12 the valuation exclusion under section 273.13, subdivision 16. 366.13 For the limited market value provision, the report shall include 366.14 the total value excluded from taxation by type of property for 366.15 each city and town. For the valuation exclusion provision, the 366.16 report shall include the total market value excluded from 366.17 taxation for each city and town, as well as a breakdown of the 366.18 excluded improvement amounts by age and value of the property 366.19 being improved and the amount of the qualifying improvement. 366.20 The county assessors shall provide the information necessary for 366.21 the commissioner to compile the report in a manner prescribed by 366.22 the commissioner. 366.23 Sec. 46. Laws 2001, First Special Session chapter 5, 366.24 article 9, section 3, the effective date, is amended to read: 366.25[EFFECTIVE DATE.] This section is effective for tax years 366.26 beginning after December 31, 2001, except that the amendment 366.27 toclauseclauses (3)isand (12) are effective for tax years 366.28 beginning after December 31, 2000. 366.29 Sec. 47. [EARLY DECERTIFICATION OF TAX INCREMENT 366.30 DISTRICTS; EFFECTIVE DATE.] 366.31 Laws 2001, First Special Session chapter 5, article 15, 366.32 section 12, is retroactively effective for decertifications 366.33 occurring on or after July 1, 2001, regardless of the date of 366.34 the request for certification of the district or any portion of 366.35 the district. 366.36 Sec. 48. [REPEALER.] 367.1 (a) Minnesota Statutes 2000, sections 272.02, subdivision 367.2 40; 290.01, subdivisions 19g and 32; and 295.44, are repealed 367.3 effective the day following final enactment. 367.4 (b) Minnesota Statutes 2000, section 290.0921, subdivision 367.5 5, is repealed effective for taxable years beginning after 367.6 December 31, 2001. 367.7 (c) Minnesota Rules, parts 8130.1400; 8130.2100; 8130.2350; 367.8 8130.2600; 8130.3000; 8130.3850; and 8130.5000, are repealed 367.9 effective the day following final enactment. 367.10 ARTICLE 22 367.11 TELECOMMUNICATIONS 367.12 Section 1. Minnesota Statutes 2000, section 125B.25, 367.13 subdivision 9, is amended to read: 367.14 Subd. 9. [EXPIRATIONINSUFFICIENT FUNDING.]This section367.15expires on July 1, 2002.If the amount appropriated for purposes 367.16 of this section is insufficient to fully fund the program, the 367.17 Minnesota education telecommunications council must allocate the 367.18 amount available to enable districts or regional clusters to 367.19 maintain current connections within available funding. 367.20 Sec. 2. [237.82] [TELECOMMUNICATIONS ACCESS FEE.] 367.21 Unless specifically provided otherwise in this section, the 367.22 terms used in this section have the meanings given in section 367.23 297A.61. 367.24 A fee equal to one-half of one percent of the gross 367.25 receipts from sales at retail of telecommunication services that 367.26 are subject to taxation under chapter 297A, is imposed. The fee 367.27 must be shown as a separate line item on a bill for the 367.28 telecommunications services. The fee must be collected by the 367.29 commissioner of revenue in the same manner, and is subject to 367.30 the same interest and penalties as the tax imposed under chapter 367.31 297A, provided that section 297A.94 does not apply to the 367.32 revenues derived from the fee. The commissioner of revenue 367.33 shall deposit the revenues, including interest and penalties, 367.34 derived from the fee imposed under this section in the state 367.35 treasury and credit them to the public telecommunication 367.36 services account. 368.1 The fee terminates upon the effective date of the creation 368.2 of a universal service fund by the public utilities commission 368.3 or the legislature that addresses a broad range of access and 368.4 affordability issues, but no later than June 30, 2005. 368.5 Sec. 3. [237.83] [PUBLIC TELECOMMUNICATION SERVICES 368.6 ACCOUNT.] 368.7 Subdivision 1. [ACCOUNT ESTABLISHED.] A public 368.8 telecommunication services account is established in the state 368.9 treasury. Earnings, such as interest, dividends, and any other 368.10 earnings arising from fund assets, must be credited to the 368.11 account. 368.12 Subd. 2. [PURPOSE.] The purpose of the account is to 368.13 provide money to fund the learning network of Minnesota formerly 368.14 funded through the higher education services office, the 368.15 telecommunication access revenue program under section 125B.25, 368.16 regional library telecommunication aid under section 134.47. To 368.17 the extent money is available after fully funding those 368.18 programs, the account will be used to fund the hospital 368.19 emergency telecommunications network under section 237.84. 368.20 Subd. 3. [COORDINATED PLAN.] The Minnesota education 368.21 telecommunications council shall develop a specific funding plan 368.22 that integrates the funding for education programs under 368.23 subdivision 2, consistent with the regional distribution method 368.24 recommended by the permanent funding committee in the report 368.25 required by the legislature. The council shall submit the plan 368.26 to the education budget division chairs of the legislature by 368.27 January 15, 2003. All entities receiving funding under 368.28 subdivision 2 that are eligible for federal telecommunication 368.29 aid or discounts must apply for the maximum assistance available 368.30 and must use the amounts or discounts received to reduce the 368.31 state aid that may be necessary. 368.32 Subd. 4. [ADMINISTRATION.] The commissioner of 368.33 administration shall award grants from the account, but not 368.34 manage or operate the programs funded by the grants. The 368.35 commissioner shall consult with the Minnesota education 368.36 telecommunications council before making grant decisions related 369.1 to education networks. 369.2 Subd. 5. [COST REDUCTIONS; PERFORMANCE IMPROVEMENTS.] In 369.3 awarding grants, the commissioner and the technology enterprise 369.4 board must attempt to obtain cost reductions and performance 369.5 improvements by encouraging cooperation among education and 369.6 health care recipients of state telecommunication assistance. 369.7 Subd. 6. [CONNECTION COSTS.] Connection costs funded under 369.8 this section may not be paid to a state agency unless the 369.9 regional group making the application demonstrates that: 369.10 (1) no other entity submitted bids to provide the 369.11 connection; 369.12 (2) the state agency had been a recipient of money under a 369.13 program described in subdivision 2; or 369.14 (3) the participation of a state agency is necessary to the 369.15 interoperability of a network. 369.16 Sec. 4. [237.84] [HOSPITAL EMERGENCY COMMUNICATIONS 369.17 NETWORK.] 369.18 The commissioner of administration shall make grants to 369.19 fund a hospital emergency communications network. The initial 369.20 grants may be used for hospital telecommunications equipment and 369.21 connection charges. Subsequent grants are only for connection 369.22 costs. Applications for the grants must be submitted by 369.23 regional groups of hospitals. The commissioner must ensure the 369.24 interoperability of networks among hospitals with the learning 369.25 network. The commissioner shall establish an application 369.26 procedure for grants and award grants with the advice of the 369.27 commissioner of health and the technology enterprise board. 369.28 Grants may not exceed 80 percent of the cost of the proposal. 369.29 The hospital network must be redundant to the telephone network 369.30 and use Internet technology. The network must be designed so 369.31 that it can also be used for telemedicine and education. All 369.32 entities that are eligible for federal telecommunication aid or 369.33 discounts must apply for the maximum assistance available and 369.34 must use the amounts or discounts received to reduce the state 369.35 aid that may be necessary. Grants may be used to upgrade 369.36 existing systems. The goal of the grant program is to connect 370.1 all hospitals in Minnesota to one interoperable network for the 370.2 sharing of information. 370.3 Sec. 5. Laws 2001, First Special Session chapter 3, 370.4 article 4, section 5, subdivision 2, as amended by Laws 2002, 370.5 chapter 220, article 2, section 12, is amended to read: 370.6 Subd. 2. [BASIC SUPPORT GRANTS.] For basic support grants 370.7 according to Minnesota Statutes, sections 134.32 to 134.35: 370.8 $8,570,000 ..... 2002 370.9 $8,570,000 ..... 2003 370.10 The 2002 appropriation includes $857,000 for 2001 and 370.11 $7,713,000 for 2002. 370.12 The 2003 appropriation includes $857,000 for 2002 and 370.13 $7,713,000 for 2003. 370.14 Base level funding for fiscal year 2004 is 370.15$9,823,000$8,423,000 and$9,822,000$8,423,000 for fiscal year 370.16 2005. 370.17 Sec. 6. Laws 2001, First Special Session chapter 3, 370.18 article 4, section 5, subdivision 4, as amended by Laws 2002, 370.19 chapter 220, article 2, section 13, is amended to read: 370.20 Subd. 4. [REGIONAL LIBRARY TELECOMMUNICATIONS AID.] For 370.21 aid to regional public library systems under Minnesota Statutes, 370.22 section 134.47: 370.23 $1,200,000 ..... 2002 370.24 $1,400,000 ..... 2003 370.25This is a one-time appropriation.Any balance in the first 370.26 year does not cancel but is available in the second year. 370.27 Base level funding for fiscal year 2004 is $1,400,000 and 370.28 $1,400,000 for fiscal year 2005. 370.29 Sec. 7. [APPROPRIATIONS.] 370.30 $8,600,000 is appropriated from the public 370.31 telecommunication services account to the commissioner of 370.32 children, families, and learning for the fiscal year ending June 370.33 30, 2003, for the following purposes: 370.34 (1) $7,800,000 for the telecommunications access revenue 370.35 program under Minnesota Statutes, section 125B.25; and 370.36 (2) $800,000 for regional library telecommunications aid 371.1 under Minnesota Statutes, section 134.47, to supplement money 371.2 previously appropriated from the general fund. 371.3 Sec. 8. [REPEALER.] 371.4 Minnesota Statutes 2001 Supplement, section 134.47, 371.5 subdivision 3, is repealed. 371.6 Sec. 9. [EFFECTIVE DATE.] 371.7 This act is effective January 1, 2003. 371.8 ARTICLE 23 371.9 MISCELLANEOUS 371.10 Section 1. Minnesota Statutes 2001 Supplement, section 371.11 216B.1692, subdivision 2, is amended to read: 371.12 Subd. 2. [PROPOSAL SUBMISSION.] A public utility that 371.13 intends to submit a proposal for an emissions reduction rider 371.14 under this section, or that is ordered to do so by the 371.15 commission, must submit to the commission, the department, the 371.16 pollution control agency, and interested parties its plans for 371.17 emissions reduction projects at its generating facilities. This 371.18 submission must be made at least 60 days in advance of a 371.19 petition for a rider and shall include: 371.20 (1) the priority order of emissions reduction projects the 371.21 utility plans to pursue at its generating facilities; 371.22 (2) the planned schedule for implementation; 371.23 (3) the analysis and considerations relied on by the public 371.24 utility to develop that priority ranking; 371.25 (4) the alternative emissions reduction projects 371.26 considered, including but not limited to applications of the 371.27 best available control technology and repowering with natural 371.28 gas, and reasons for not pursuing them; 371.29 (5) the emissions reductions expected to be achieved by the 371.30 projects and their relation to applicable standards for new 371.31 facilities under the federal Clean Air Act; and 371.32 (6) the general rationale and conclusions of the public 371.33 utility in determining the priority ranking. 371.34[EFFECTIVE DATE.] This section is effective January 1, 2003. 371.35 Sec. 2. Minnesota Statutes 2001 Supplement, section 371.36 216B.1692, subdivision 3, is amended to read: 372.1 Subd. 3. [FILING PETITION TO RECOVER PROJECT COSTS.] 372.2 (a) The commission may order a public utilitymayto petition 372.3 the commission for approval of an emissions reduction rider to 372.4 recover the costs of a qualifying emissions reduction project 372.5 outside of a general rate case proceeding under section 372.6 216B.16. A public utility may also voluntarily submit such a 372.7 petition. In its filing, the public utility shall provide: 372.8 (1) a description of the planned emissions reduction 372.9 project; 372.10 (2) the activities involved in the project; 372.11 (3) a schedule for implementation; 372.12 (4) any analysis provided to the pollution control agency 372.13 regarding the project; 372.14 (5) an assessment of alternatives to the project, including 372.15 costs, environmental impact, and operational issues; 372.16 (6) the proposed method of cost recovery; 372.17 (7) any proposed recovery above cost; and 372.18 (8) the projected emissions reductions from the project. 372.19 (b) Nothing in this section precludes a public utility or 372.20 interested party from seeking commission guidelines for 372.21 emissions reduction rider filings; however, commission 372.22 guidelines are not required as a prerequisite to a public 372.23 utility-initiated filing. 372.24[EFFECTIVE DATE.] This section is effective January 1, 2003. 372.25 Sec. 3. Minnesota Statutes 2001 Supplement, section 372.26 216B.1692, subdivision 6, is amended to read: 372.27 Subd. 6. [IMPLEMENTATION.] Within 60 days of a final 372.28 commission order, the public utility shallnotify the commission372.29and the pollution control agency whether it willimplement the 372.30 order and proceed with the project.Nothing in this section372.31commits a public utility to implementing a proposed emissions372.32reduction project if the proposed project or terms of the372.33emissions reduction rider have been either modified or rejected372.34by the commission.A public utility implementing a project 372.35 under this section will not be required for a period of eight 372.36 years after installation to undertake additional investments to 373.1 comply with a new state requirement regarding pollutants 373.2 addressed by the project at the project generating facility. 373.3 This section does not affect requirements of federal law. The 373.4 term of the rider shall extend for the period approved by the 373.5 commission regardless of any subsequent state or federal 373.6 requirement affecting any pollutant addressed by the approved 373.7 emissions reduction project and regardless of the sunset date in 373.8 subdivision 8. 373.9[EFFECTIVE DATE.] This section is effective January 1, 2003. 373.10 Sec. 4. Minnesota Statutes 2000, section 270B.01, 373.11 subdivision 8, is amended to read: 373.12 Subd. 8. [MINNESOTA TAX LAWS.] For purposes of this 373.13 chapter only, unless expressly stated otherwise, "Minnesota tax 373.14 laws" means the taxes, refunds, and fees administered by or paid 373.15 to the commissioner under chapters 115B (except taxes imposed 373.16 under sections 115B.21 to 115B.24), 289A (except taxes imposed 373.17 under sections 298.01, 298.015, and 298.24), 290, 290A, 373.18 291, 295, 297A, and 297Hand sections 295.50 to 295.59, or any 373.19 similar Indian tribal tax administered by the commissioner 373.20 pursuant to any tax agreement between the state and the Indian 373.21 tribal government, and includes any laws for the assessment, 373.22 collection, and enforcement of those taxes, refunds, and fees. 373.23[EFFECTIVE DATE.] This section is effective the day 373.24 following final enactment. 373.25 Sec. 5. Minnesota Statutes 2001 Supplement, section 373.26 270B.02, subdivision 3, is amended to read: 373.27 Subd. 3. [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 373.28 NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 373.29 name or existence of an informer, informer letters, and other 373.30 data, in whatever form, given to the department of revenue by a 373.31 person, other than the data subject, who informs that a specific 373.32taxpayerperson is not or may not be in compliance with tax 373.33 laws, or nontax laws administered by the department of revenue, 373.34 including laws other than those relating to property taxes not 373.35 listed in section 270B.01, subdivision 8, are confidential data 373.36 on individuals or protected nonpublic data as defined in section 374.1 13.02, subdivisions 3 and 13. 374.2 (b) Data under paragraph (a) may be disclosed with the 374.3 consent of the informer or upon a written finding by a court 374.4 that the information provided by the informer was false and that 374.5 there is evidence that the information was provided in bad 374.6 faith. This subdivision does not alter disclosure 374.7 responsibilities or obligations under the rules of criminal 374.8 procedure. 374.9[EFFECTIVE DATE.] This section is effective the day 374.10 following final enactment. 374.11 Sec. 6. Minnesota Statutes 2000, section 270B.02, 374.12 subdivision 4, is amended to read: 374.13 Subd. 4. [PUBLIC DATA.] Information required to be filed 374.14 by exempt individuals, corporations, organizations, estates, and 374.15 trusts under section 290.05, subdivisions 1 and 4, or that 374.16 relates to exempt status under section 290.05, subdivision 2, is 374.17 public data on individuals or public data not on individuals, as 374.18 defined in section 13.02, subdivisions 14 and 15. The 374.19 commissioner may publish a list of organizations exempt from 374.20 taxation under section 290.05, except that the name or address 374.21 of any contributor to any organization that is or was exempt, or 374.22 that has applied for tax exempt status, or any other information 374.23 that could not be disclosed under section 6104 of the Internal 374.24 Revenue Code of 1986, as amended through December 31, 1988, is 374.25 classified as private data on individuals or nonpublic data as 374.26 defined in section 13.02, subdivisions 9 and 12. 374.27[EFFECTIVE DATE.] This section is effective the day 374.28 following final enactment. 374.29 Sec. 7. Minnesota Statutes 2001 Supplement, section 374.30 270B.08, subdivision 2, is amended to read: 374.31 Subd. 2. [REVOCATION.] When a taxpayer's sales tax permit 374.32 has been revoked under section 297A.86, the commissioner may 374.33 disclose data identifying the holder of the revoked permitand, 374.34 stating the basis for the revocation, and stating whether the 374.35 permit has been reinstated. 374.36[EFFECTIVE DATE.] This section is effective the day 375.1 following final enactment. 375.2 Sec. 8. Minnesota Statutes 2000, section 270B.14, 375.3 subdivision 8, is amended to read: 375.4 Subd. 8. [EXCHANGE BETWEEN DEPARTMENTS OF LABOR AND 375.5 INDUSTRY AND REVENUE.] The departments of labor and industry and 375.6 revenue may exchange information as follows: 375.7 (1) data used in determining whether a business is an 375.8 employer or a contracting agent; 375.9 (2) taxpayer identity information relating to employers and 375.10 employees for purposes of supporting tax administration and 375.11chapterchapters 176, 177, and 181; and 375.12 (3) data to the extent provided in and for the purpose set 375.13 out in section 176.181, subdivision 8. 375.14[EFFECTIVE DATE.] This section is effective the day 375.15 following final enactment. 375.16 Sec. 9. Minnesota Statutes 2000, section 297F.05, 375.17 subdivision 1, is amended to read: 375.18 Subdivision 1. [RATES; CIGARETTES.] (a) A tax is imposed 375.19 upon the sale of cigarettes in this state, upon having 375.20 cigarettes in possession in this state with intent to sell, upon 375.21 any person engaged in business as a distributor, and upon the 375.22 use or storage by consumers, at the following rates, subject to 375.23 the discount provided in this chapter, and subject to paragraph 375.24 (b): 375.25 (1) on cigarettes weighing not more than three pounds per 375.26 thousand,2439 mills and, after December 31, 2002, 54 mills on 375.27 each such cigarette; and 375.28 (2) on cigarettes weighing more than three pounds per 375.29 thousand,4878 mills and, after December 31, 2002, 108 mills on 375.30 each such cigarette. 375.31 (b) Before June 1 of 2004 and each subsequent year the 375.32 commissioner shall recompute and publish the rate for the tax 375.33 imposed under this subdivision. The new rate must be calculated 375.34 by multiplying the rate in effect at the time of the calculation 375.35 by the ratio obtained under paragraph (c). 375.36 (c) Divide the annual average U.S. Consumer Price Index for 376.1 all urban consumers, as determined by the U.S. Department of 376.2 Labor, for the previous calendar year, by the annual average for 376.3 the calendar year before the previous year. 376.4 (d) The rate calculated under this section must be rounded 376.5 to the nearest one-half mill. 376.6 (e) The new rate calculated under this section is effective 376.7 for cigarette stamp purchases and for use and storage of 376.8 cigarettes acquired by consumers after May 31. The 376.9 determination of the commissioner pursuant to this section must 376.10 not be considered a "rule" and is not subject to the 376.11 Administrative Procedure Act contained in chapter 14. 376.12[EFFECTIVE DATE.] This section is effective for cigarette 376.13 stamp purchases occurring after April 30, 2002, and for use and 376.14 storage of cigarettes acquired by consumers after April 30, 2002. 376.15 Sec. 10. Minnesota Statutes 2000, section 297F.05, 376.16 subdivision 3, is amended to read: 376.17 Subd. 3. [RATES; TOBACCO PRODUCTS.] A tax is imposed upon 376.18 all tobacco products in this state and upon any person engaged 376.19 in business as a distributor, at the rate of3549 percent of 376.20 the wholesale sales price of the tobacco products. The tax is 376.21 imposed at the time the distributor: 376.22 (1) brings, or causes to be brought, into this state from 376.23 outside the state tobacco products for sale; 376.24 (2) makes, manufactures, or fabricates tobacco products in 376.25 this state for sale in this state; or 376.26 (3) ships or transports tobacco products to retailers in 376.27 this state, to be sold by those retailers. 376.28[EFFECTIVE DATE.] This section is effective for tobacco 376.29 products brought into the state, or made or manufactured in the 376.30 state, or for shipments to retailers in this state occurring 376.31 after April 30, 2002. 376.32 Sec. 11. Minnesota Statutes 2000, section 297F.05, 376.33 subdivision 4, is amended to read: 376.34 Subd. 4. [USE TAX; TOBACCO PRODUCTS.] A tax is imposed 376.35 upon the use or storage by consumers of tobacco products in this 376.36 state, and upon such consumers, at the rate of3549 percent of 377.1 the cost to the consumer of the tobacco products. 377.2[EFFECTIVE DATE.] This section is effective for use or 377.3 storage of tobacco products acquired by consumers after April 377.4 30, 2002. 377.5 Sec. 12. Minnesota Statutes 2000, section 297F.08, 377.6 subdivision 7, is amended to read: 377.7 Subd. 7. [PRICE OF STAMPS.] The commissioner shall sell 377.8 stamps to any person licensed as a distributor at a discount 377.9 of1.00.65 percent from the face amount of the stamps for the 377.10 first$1,500,000$2,400,000 of such stamps purchased in any 377.11 fiscal year; and at a discount of0.60.4 percent on the 377.12 remainder of such stamps purchased in any fiscal year. The 377.13 commissioner shall not sell stamps to any other person. The 377.14 commissioner may prescribe the method of shipment of the stamps 377.15 to the distributor as well as the quantities of stamps purchased. 377.16[EFFECTIVE DATE.] This section is effective for cigarette 377.17 stamp purchases occurring after April 30, 2002. 377.18 Sec. 13. Minnesota Statutes 2000, section 297F.09, 377.19 subdivision 2, is amended to read: 377.20 Subd. 2. [MONTHLY RETURN; TOBACCO PRODUCTS DISTRIBUTOR.] 377.21 On or before the 18th day of each calendar month, a distributor 377.22 with a place of business in this state shall file a return with 377.23 the commissioner showing the quantity and wholesale sales price 377.24 of each tobacco product: 377.25 (1) brought, or caused to be brought, into this state for 377.26 sale; and 377.27 (2) made, manufactured, or fabricated in this state for 377.28 sale in this state, during the preceding calendar month. 377.29 Every licensed distributor outside this state shall in like 377.30 manner file a return showing the quantity and wholesale sales 377.31 price of each tobacco product shipped or transported to 377.32 retailers in this state to be sold by those retailers, during 377.33 the preceding calendar month. Returns must be made in the form 377.34 and manner prescribed by the commissioner and must contain any 377.35 other information required by the commissioner. The return must 377.36 be accompanied by a remittance for the full tax liability shown, 378.1 less1.51.0 percent of the liability as compensation to 378.2 reimburse the distributor for expenses incurred in the 378.3 administration of this chapter. 378.4[EFFECTIVE DATE.] This section is effective for tobacco 378.5 products brought into the state, or made or manufactured in the 378.6 state, after April 30, 2002. 378.7 Sec. 14. Minnesota Statutes 2000, section 297H.06, 378.8 subdivision 2, is amended to read: 378.9 Subd. 2. [MATERIALS.] The tax is not imposed upon charges 378.10 to generators of mixed municipal solid waste or upon the volume 378.11 of non-mixed-municipal solid waste for waste management services 378.12 to manage the following materials: 378.13 (1) mixed municipal solid waste and non-mixed-municipal 378.14 solid waste generated outside of Minnesota; 378.15 (2) recyclable materials that are separated for recycling 378.16 by the generator, collected separately from other waste, and 378.17 recycled, to the extent the price of the service for handling 378.18 recyclable material is separately itemized; 378.19 (3) recyclable non-mixed-municipal solid waste that is 378.20 separated for recycling by the generator, collected separately 378.21 from other waste, delivered to a waste facility for the purpose 378.22 of recycling, and recycled; 378.23 (4) industrial waste, when it is transported to a facility 378.24 owned and operated by the same person that generated it; 378.25 (5) mixed municipal solid waste from a recycling facility 378.26 that separates or processes recyclable materials and reduces the 378.27 volume of the waste by at least 85 percent, provided that the 378.28 exempted waste is managed separately from other waste; 378.29 (6) recyclable materials that are separated from mixed 378.30 municipal solid waste by the generator, collected and delivered 378.31 to a waste facility that recycles at least 85 percent of its 378.32 waste, and are collected with mixed municipal solid waste that 378.33 is segregated in leakproof bags, provided that the mixed 378.34 municipal solid waste does not exceed five percent of the total 378.35 weight of the materials delivered to the facility and is 378.36 ultimately delivered to a waste facility identified as a 379.1 preferred waste management facility in county solid waste plans 379.2 under section 115A.46; 379.3 (7)through December 31, 2002,source-separated compostable 379.4 waste, if the waste is delivered to a facility exempted as 379.5 described in this clause. To initially qualify for an 379.6 exemption, a facility must apply for an exemption in its 379.7 application for a new or amended solid waste permit to the 379.8 pollution control agency. The first time a facility applies to 379.9 the agency it must certify in its application that it will 379.10 comply with the criteria in items (i) to (v) and the 379.11 commissioner of the agency shall so certify to the commissioner 379.12 of revenue who must grant the exemption. For each subsequent 379.13 calendar year, by October 1 of the preceding year, the facility 379.14 must apply to the agency for certification to renew its 379.15 exemption for the following year. The application must be filed 379.16 according to the procedures of, and contain the information 379.17 required by, the agency. The commissioner of revenue shall 379.18 grant the exemption if the commissioner of the pollution control 379.19 agency finds and certifies to the commissioner of revenue that 379.20 based on an evaluation of the composition of incoming waste and 379.21 residuals and the quality and use of the product: 379.22 (i) generators separate materials at the source; 379.23 (ii) the separation is performed in a manner appropriate to 379.24 the technology specific to the facility that: 379.25 (A) maximizes the quality of the product; 379.26 (B) minimizes the toxicity and quantity of residuals; and 379.27 (C) provides an opportunity for significant improvement in 379.28 the environmental efficiency of the operation; 379.29 (iii) the operator of the facility educates generators, in 379.30 coordination with each county using the facility, about 379.31 separating the waste to maximize the quality of the waste stream 379.32 for technology specific to the facility; 379.33 (iv) process residuals do not exceed 15 percent of the 379.34 weight of the total material delivered to the facility; and 379.35 (v) the final product is accepted for use; 379.36 (8) waste and waste by-products for which the tax has been 380.1 paid; and 380.2 (9) daily cover for landfills that has been approved in 380.3 writing by the Minnesota pollution control agency. 380.4 Sec. 15. Minnesota Statutes 2001 Supplement, section 380.5 349.12, subdivision 25, is amended to read: 380.6 Subd. 25. [LAWFUL PURPOSE.] (a) "Lawful purpose" means one 380.7 or more of the following: 380.8 (1) any expenditure by or contribution to a 501(c)(3) or 380.9 festival organization, as defined in subdivision 15a, provided 380.10 that the organization and expenditure or contribution are in 380.11 conformity with standards prescribed by the board under section 380.12 349.154, which standards must apply to both types of 380.13 organizations in the same manner and to the same extent; 380.14 (2) a contribution to an individual or family suffering 380.15 from poverty, homelessness, or physical or mental disability, 380.16 which is used to relieve the effects of that poverty, 380.17 homelessness, or disability; 380.18 (3) a contribution to an individual for treatment for 380.19 delayed posttraumatic stress syndrome or a contribution to a 380.20 program recognized by the Minnesota department of human services 380.21 for the education, prevention, or treatment of compulsive 380.22 gambling; 380.23 (4) a contribution to or expenditure on a public or private 380.24 nonprofit educational institution registered with or accredited 380.25 by this state or any other state; 380.26 (5) a contribution to a scholarship fund for defraying the 380.27 cost of education to individuals where the funds are awarded 380.28 through an open and fair selection process; 380.29 (6) activities by an organization or a government entity 380.30 which recognize humanitarian or military service to the United 380.31 States, the state of Minnesota, or a community, subject to rules 380.32 of the board, provided that the rules must not include mileage 380.33 reimbursements in the computation of the per occasion 380.34 reimbursement limit and must impose no aggregate annual limit on 380.35 the amount of reasonable and necessary expenditures made to 380.36 support: 381.1 (i) members of a military marching or color guard unit for 381.2 activities conducted within the state; 381.3 (ii) members of an organization solely for services 381.4 performed by the members at funeral services; or 381.5 (iii) members of military marching, color guard, or honor 381.6 guard units may be reimbursed for participating in color guard, 381.7 honor guard, or marching unit events within the state or states 381.8 contiguous to Minnesota at a per participant rate of up to $35 381.9 per occasion; 381.10 (7) recreational, community, and athletic facilities and 381.11 activities intended primarily for persons under age 21, provided 381.12 that such facilities and activities do not discriminate on the 381.13 basis of gender and the organization complies with section 381.14 349.154; 381.15 (8) payment of local taxes authorized under this chapter, 381.16 taxes imposed by the United States on receipts from lawful 381.17 gambling, the taxes imposed by section 297E.02, subdivisions 1, 381.18 4, 5, and 6, and the tax imposed on unrelated business income by 381.19 section 290.05, subdivision 3; 381.20 (9) payment of real estate taxes and assessments on 381.21 permitted gambling premises wholly owned by the licensed 381.22 organization paying the taxes, or wholly leased by a licensed 381.23 veterans organization under a national charter organized under 381.24 section 501(c)(19) of the Internal Revenue Code, not to exceed: 381.25 (i) for premises used for bingo, the amount that an 381.26 organization may expend under board rules on rent for bingo; and 381.27 (ii) $35,000 per year for premises used for other forms of 381.28 lawful gambling; 381.29 (10) a contribution to the United States, this state or any 381.30 of its political subdivisions, or any agency or instrumentality 381.31 thereof other than a direct contribution to a law enforcement or 381.32 prosecutorial agency; 381.33 (11) a contribution to or expenditure by a nonprofit 381.34 organization which is a church or body of communicants gathered 381.35 in common membership for mutual support and edification in 381.36 piety, worship, or religious observances; 382.1 (12) payment of the reasonable costs of an audit required 382.2 in section 297E.06, subdivision 4, provided the annual audit is 382.3 filed in a timely manner with the department of revenue; 382.4 (13) a contribution to or expenditure on a wildlife 382.5 management project that benefits the public at-large, provided 382.6 that the state agency with authority over that wildlife 382.7 management project approves the project before the contribution 382.8 or expenditure is made; 382.9 (14) expenditures, approved by the commissioner of natural 382.10 resources, by an organization for grooming and maintaining 382.11 snowmobile trails and all-terrain vehicle trails that are (1) 382.12 grant-in-aid trails established under section 85.019, or (2) 382.13 other trails open to public use, including purchase or lease of 382.14 equipment for this purpose; or 382.15 (15) conducting nutritional programs, food shelves, and 382.16 congregate dining programs primarily for persons who are age 62 382.17 or older or disabled; or 382.18 (16) a contribution to a community arts organization, or an 382.19 expenditure to sponsor arts programs in the community, including 382.20 but not limited to visual, literary, performing, or musical arts. 382.21 (b) Notwithstanding paragraph (a), "lawful purpose" does 382.22 not include: 382.23 (1) any expenditure made or incurred for the purpose of 382.24 influencing the nomination or election of a candidate for public 382.25 office or for the purpose of promoting or defeating a ballot 382.26 question; 382.27 (2) any activity intended to influence an election or a 382.28 governmental decision-making process; 382.29 (3) the erection, acquisition, improvement, expansion, 382.30 repair, or maintenance of real property or capital assets owned 382.31 or leased by an organization, unless the board has first 382.32 specifically authorized the expenditures after finding that (i) 382.33 the real property or capital assets will be used exclusively for 382.34 one or more of the purposes in paragraph (a); (ii) with respect 382.35 to expenditures for repair or maintenance only, that the 382.36 property is or will be used extensively as a meeting place or 383.1 event location by other nonprofit organizations or community or 383.2 service groups and that no rental fee is charged for the use; 383.3 (iii) with respect to expenditures, including a mortgage payment 383.4 or other debt service payment, for erection or acquisition only, 383.5 that the erection or acquisition is necessary to replace with a 383.6 comparable building, a building owned by the organization and 383.7 destroyed or made uninhabitable by fire or natural disaster, 383.8 provided that the expenditure may be only for that part of the 383.9 replacement cost not reimbursed by insurance; (iv) with respect 383.10 to expenditures, including a mortgage payment or other debt 383.11 service payment, for erection or acquisition only, that the 383.12 erection or acquisition is necessary to replace with a 383.13 comparable building a building owned by the organization that 383.14 was acquired from the organization by eminent domain or sold by 383.15 the organization to a purchaser that the organization reasonably 383.16 believed would otherwise have acquired the building by eminent 383.17 domain, provided that the expenditure may be only for that part 383.18 of the replacement cost that exceeds the compensation received 383.19 by the organization for the building being replaced; or (v) with 383.20 respect to an expenditure to bring an existing building into 383.21 compliance with the Americans with Disabilities Act under item 383.22 (ii), an organization has the option to apply the amount of the 383.23 board-approved expenditure to the erection or acquisition of a 383.24 replacement building that is in compliance with the Americans 383.25 with Disabilities Act; 383.26 (4) an expenditure by an organization which is a 383.27 contribution to a parent organization, foundation, or affiliate 383.28 of the contributing organization, if the parent organization, 383.29 foundation, or affiliate has provided to the contributing 383.30 organization within one year of the contribution any money, 383.31 grants, property, or other thing of value; 383.32 (5) a contribution by a licensed organization to another 383.33 licensed organization unless the board has specifically 383.34 authorized the contribution. The board must authorize such a 383.35 contribution when requested to do so by the contributing 383.36 organization unless it makes an affirmative finding that the 384.1 contribution will not be used by the recipient organization for 384.2 one or more of the purposes in paragraph (a); or 384.3 (6) a contribution to a statutory or home rule charter 384.4 city, county, or town by a licensed organization with the 384.5 knowledge that the governmental unit intends to use the 384.6 contribution for a pension or retirement fund. 384.7[EFFECTIVE DATE.] This section is effective the day 384.8 following final enactment. 384.9 Sec. 16. Minnesota Statutes 2000, section 383A.81, is 384.10 amended by adding a subdivision to read: 384.11 Subd. 8. [PRIORITIES.] Beginning July 1, 2002, the board 384.12 of county commissioners must give priority to projects that 384.13 reclaim polluted land for housing and for remediation projects 384.14 in which other governmental and private sector funds are limited. 384.15 Sec. 17. Minnesota Statutes 2000, section 383A.81, is 384.16 amended by adding a subdivision to read: 384.17 Subd. 9. [SOLICITATION OF PROPOSALS.] At least annually, 384.18 the board of county commissioners must solicit proposals from 384.19 private sector developers and organizations for projects that 384.20 qualify pursuant to subdivision 2. 384.21 Sec. 18. Minnesota Statutes 2000, section 383A.81, is 384.22 amended by adding a subdivision to read: 384.23 Subd. 10. [REPORT.] Beginning July 1, 2002, and annually 384.24 thereafter, the board of county commissioners must prepare a 384.25 report on the amount of the revenues generated by the tax 384.26 imposed in section 383A.80, and any expenditures made by the 384.27 fund. The first report will cover the activities of the fund 384.28 from the date of inception. 384.29 Sec. 19. Minnesota Statutes 2000, section 383B.81, is 384.30 amended by adding a subdivision to read: 384.31 Subd. 9. [PRIORITIES.] Beginning July 1, 2002, the board 384.32 of county commissioners must give priority to projects that 384.33 reclaim polluted land for housing and for remediation projects 384.34 in which other governmental and private sector funds are limited. 384.35 Sec. 20. Minnesota Statutes 2000, section 383B.81, is 384.36 amended by adding a subdivision to read: 385.1 Subd. 10. [SOLICITATION OF PROPOSALS.] At least annually, 385.2 the board of county commissioners must solicit proposals from 385.3 private sector developers and organizations for projects that 385.4 qualify pursuant to subdivision 2. 385.5 Sec. 21. Minnesota Statutes 2000, section 383B.81, is 385.6 amended by adding a subdivision to read: 385.7 Subd. 11. [REPORT.] Beginning July 1, 2002, and annually 385.8 thereafter, the board of county commissioners must prepare a 385.9 report on the amount of the revenues generated by the tax 385.10 imposed in section 383B.80, and any expenditures made by the 385.11 fund. The first report will cover the activities of the fund 385.12 from the date of inception. 385.13 Sec. 22. [FLOOR STOCKS TAX.] 385.14 Subdivision 1. [CIGARETTES.] (a) A floor stocks tax is 385.15 imposed on every person engaged in business in this state as a 385.16 distributor, retailer, subjobber, vendor, manufacturer, or 385.17 manufacturer's representative of cigarettes, on the stamped 385.18 cigarettes and unaffixed stamps in the person's possession or 385.19 under the person's control at 12:01 a.m. on May 1, 2002. The 385.20 tax is imposed at the following rates: 385.21 (1) on cigarettes weighing not more than three pounds a 385.22 thousand, 15 mills on each cigarette; and 385.23 (2) on cigarettes weighing more than three pounds a 385.24 thousand, 30 mills on each cigarette. 385.25 Each distributor, by May 8, 2002, shall file a report with 385.26 the commissioner, in the form the commissioner prescribes, 385.27 showing the cigarettes on hand at 12:01 a.m. on May 1, 2002, and 385.28 the amount of tax due on the cigarettes. The tax imposed by 385.29 this section is due and payable by June 1, 2002, and after that 385.30 date bears interest at the rate of one percent a month. 385.31 Each retailer, subjobber, vendor, manufacturer, or 385.32 manufacturer's representative shall file a return with the 385.33 commissioner, in the form the commissioner prescribes, showing 385.34 the cigarettes on hand at 12:01 a.m. on May 1, 2002, and pay the 385.35 tax due thereon by July 1, 2002. Tax not paid by the due date 385.36 bears interest at the rate of one percent a month. 386.1 (b) A floor stocks tax is imposed on every person engaged 386.2 in business in this state as a distributor, retailer, subjobber, 386.3 vendor, manufacturer, or manufacturer's representative of 386.4 cigarettes, on the stamped cigarettes and unaffixed stamps in 386.5 the person's possession or under the person's control at 12:01 386.6 a.m. on January 1, 2003. The tax is imposed at the following 386.7 rates: 386.8 (1) on cigarettes weighing not more than three pounds a 386.9 thousand, 15 mills on each cigarette; and 386.10 (2) on cigarettes weighing more than three pounds a 386.11 thousand, 30 mills on each cigarette. 386.12 Each distributor, by January 8, 2003, shall file a report 386.13 with the commissioner, in the form the commissioner prescribes, 386.14 showing the cigarettes on hand at 12:01 a.m. on January 1, 2003, 386.15 and the amount of tax due on the cigarettes. The tax imposed by 386.16 this section is due and payable by February 1, 2003, and after 386.17 that date bears interest at the rate of one percent a month. 386.18 Each retailer, subjobber, vendor, manufacturer, or 386.19 manufacturer's representative shall file a return with the 386.20 commissioner, in the form the commissioner prescribes, showing 386.21 the cigarettes on hand at 12:01 a.m. on January 1, 2003, and pay 386.22 the tax due thereon by March 1, 2003. Tax not paid by the due 386.23 date bears interest at the rate of one percent a month. 386.24 Subd. 1a. [TOBACCO PRODUCTS.] A floor stocks tax is 386.25 imposed at the rate of 15 percent on every person engaged in 386.26 business in this state as a distributor, retailer, subjobber, 386.27 vendor, manufacturer, or manufacturer's representative of 386.28 tobacco products, on the tobacco products in the person's 386.29 possession or under the person's control at 12:01 a.m. on 386.30 January 1, 2003. 386.31 Each distributor, by January 8, 2003, shall file a report 386.32 with the commissioner, in the form the commissioner prescribes, 386.33 showing the tobacco products on hand at 12:01 a.m. on January 1, 386.34 2003, and the amount of tax due on the tobacco products. The 386.35 tax imposed by this section is due and payable by March 1, 2003, 386.36 and after that date bears interest at the rate of one percent a 387.1 month. 387.2 Each retailer, subjobber, vendor, manufacturer, or 387.3 manufacturer's representative shall file a return with the 387.4 commissioner, in the form the commissioner prescribes, showing 387.5 the tobacco products on hand at 12:01 a.m. on January 1, 2003, 387.6 and pay the tax due thereon by March 1, 2003. Tax not paid by 387.7 the due date bears interest at the rate of one percent a month. 387.8 Subd. 2. [AUDIT AND ENFORCEMENT.] The taxes imposed by 387.9 this section are subject to the audit, assessment, and 387.10 collection provisions applicable to the taxes imposed under 387.11 Minnesota Statutes, chapter 297F. The commissioner may require 387.12 a distributor to receive and maintain copies of floor stock tax 387.13 returns filed by all persons requesting a credit for returned 387.14 cigarettes. 387.15 Subd. 3. [DEPOSIT OF PROCEEDS.] The revenue from the taxes 387.16 imposed under this section shall be deposited by the 387.17 commissioner in the general fund. 387.18 Sec. 23. [REPEALER.] 387.19 Minnesota Statutes 2000, sections 383A.80, subdivision 4; 387.20 and 383B.80, subdivision 4, are repealed.