HF 3840

3rd Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to the financing and operation of government 
  1.3             in this state; providing property tax reform; 
  1.4             providing a property tax rebate; making changes to 
  1.5             property tax rates, levies, notices, hearings, 
  1.6             assessments, exemptions, aids, and credits; providing 
  1.7             bonding and levy authority, and other powers to 
  1.8             certain political subdivisions; making changes to 
  1.9             income, sales, excise, mortgage registry and deed, 
  1.10            premiums, health care provider, and solid waste tax 
  1.11            provisions; allowing credits; authorizing the 
  1.12            imposition of certain local sales, use, excise, and 
  1.13            lodging taxes; authorizing a sanitary sewer district; 
  1.14            modifying provisions relating to the budget reserve 
  1.15            and other accounts; making changes to tax increment 
  1.16            financing, regional development, housing, and economic 
  1.17            development provisions; providing for the taxation of 
  1.18            taconite and the distribution of taconite taxes; 
  1.19            modifying provisions relating to the taxation and 
  1.20            operation of gaming; providing tax incentives for 
  1.21            border city zones; making miscellaneous changes to 
  1.22            state and local tax and administrative provisions; 
  1.23            changing the senior citizens' property tax deferral 
  1.24            program; providing grants, loan guarantees, and low 
  1.25            interest loans; changing certain fiscal note 
  1.26            requirements; providing for a land transfer; 
  1.27            appropriating money; amending Minnesota Statutes 1996, 
  1.28            sections 16A.102, subdivisions 1 and 2; 124A.03, 
  1.29            subdivision 1f; 240.15, subdivisions 1 and 5; 
  1.30            272.0211, subdivision 1; 273.135, subdivision 2; 
  1.31            273.1391, subdivision 2; 273.1398, subdivisions 1a, 2, 
  1.32            and 4; 275.07, by adding a subdivision; 290.01, 
  1.33            subdivision 3b; 290.06, subdivisions 2c; 290.067, 
  1.34            subdivision 2a; 290.0671, by adding subdivisions; 
  1.35            290.091, subdivision 2; 290.0921, subdivision 3a; 
  1.36            290.10; 290.21, subdivision 3; 290A.03, subdivision 3; 
  1.37            290A.14; 295.52, subdivision 4a; 297A.01, subdivisions 
  1.38            8 and 15; 297A.02, subdivisions 2 and 4; 297A.135, 
  1.39            subdivisions 4, as amended; and 5, as added; 297A.25, 
  1.40            subdivision 60, and by adding subdivisions; 297E.02, 
  1.41            subdivisions 1, 4, and 6; 298.22, subdivision 2; 
  1.42            298.221; 298.2213, subdivision 4; 298.225, subdivision 
  1.43            1; 298.28, subdivisions 2, 3, 4, 6, 7, 9, 10, and 11; 
  1.44            298.48, subdivision 1; 325E.112, by adding a 
  1.45            subdivision; 462.396, subdivision 2; 462A.21, by 
  1.46            adding a subdivision; 462A.222, subdivision 3; 
  2.1             469.015, subdivision 4; 469.169, by adding 
  2.2             subdivisions; 469.170, by adding a subdivision; 
  2.3             469.171, subdivision 9; 469.174, by adding a 
  2.4             subdivision; 469.175, subdivisions 5, 6, 6a, and by 
  2.5             adding a subdivision; 469.176, subdivision 7; 469.177, 
  2.6             by adding a subdivision; 469.1771, subdivision 5, and 
  2.7             by adding a subdivision; 469.303; 473.39, by adding a 
  2.8             subdivision; 473.3915, subdivisions 2 and 3; 475.58, 
  2.9             subdivisions 1 and 3; 477A.0122, subdivision 6; 
  2.10            477A.03, subdivision 2, and by adding a subdivision; 
  2.11            and 477A.14; Minnesota Statutes 1997 Supplement, 
  2.12            sections 3.986, subdivisions 2 and 4; 3.987, 
  2.13            subdivisions 1 and 2; 3.988, subdivision 3; 3.989, 
  2.14            subdivisions 1 and 2; 16A.152, subdivision 2; 60A.15, 
  2.15            subdivision 1; 124.239, subdivisions 5, 5a, and 5b; 
  2.16            124.315, subdivisions 4 and 5; 124.918, subdivision 8; 
  2.17            270.60, subdivision 4; 270.67, subdivision 2; 272.02, 
  2.18            subdivision 1; 272.115, subdivisions 4 and 5; 273.112, 
  2.19            subdivisions 2, 3, and 4; 273.124, subdivision 14; 
  2.20            273.126, subdivision 3; 273.127, subdivision 3; 
  2.21            273.13, subdivisions 22, 23, 24, 25, and 31; 273.1382, 
  2.22            subdivision 1, and by adding a subdivision; 275.065, 
  2.23            subdivisions 3 and 6; 275.70, subdivision 5, and by 
  2.24            adding a subdivision; 275.71, subdivisions 2, 3, and 
  2.25            4; 275.72, by adding a subdivision; 276.04, 
  2.26            subdivision 2; 287.08; 289A.02, subdivision 7; 
  2.27            289A.19, subdivision 2; 290.01, subdivisions 19, 19a, 
  2.28            19b, 19c, 19f, and 31; 290.0671, subdivision 1; 
  2.29            290.0673, subdivisions 2 and 6; 290.091, subdivision 
  2.30            6; 290.371, subdivision 2; 290A.03, subdivisions 11, 
  2.31            13, and 15; 290B.03, subdivision 2; 290B.04, 
  2.32            subdivisions 1, 3, and by adding subdivisions; 
  2.33            290B.05, subdivisions 1, 2, and 4; 290B.06; 290B.07; 
  2.34            290B.08, subdivision 2; 290B.09, subdivision 1; 
  2.35            291.005, subdivision 1; 295.52, subdivision 4; 
  2.36            297A.01, subdivision 16; 297A.25, subdivisions 3, 9, 
  2.37            11, 59, and by adding a subdivision; 297A.256, 
  2.38            subdivision 1; 297A.48, by adding a subdivision; 
  2.39            297B.03; 297G.01, by adding a subdivision; 297G.03, 
  2.40            subdivision 1; 297H.04, by adding a subdivision; 
  2.41            298.24, subdivision 1; 298.28, subdivisions 9a and 9b; 
  2.42            298.296, subdivision 4; 349.19, subdivision 2a; 
  2.43            446A.085, subdivision 1; 462A.05, subdivision 39; 
  2.44            462A.071, subdivisions 2, 4, 6, and 8; 465.715, by 
  2.45            adding subdivisions; 469.169, subdivision 11; and 
  2.46            477A.011, subdivision 36; Laws 1965, chapter 326, 
  2.47            section 1, subdivision 5, as amended; Laws 1967, 
  2.48            chapter 170, section 1, subdivision 5, as amended; 
  2.49            Laws 1971, chapter 773, section 1, as amended; and 
  2.50            section 2, as amended; Laws 1976, chapter 162, section 
  2.51            1, as amended; Laws 1980, chapter 511, section 1, 
  2.52            subdivision 2, as amended; section 2; and section 3; 
  2.53            Laws 1984, chapter 380, section 1, as amended; and 
  2.54            section 2; Laws 1991, chapter 291, article 8, section 
  2.55            27, subdivision 3; Laws 1992, chapter 511, article 2, 
  2.56            section 52, as amended; article 8, section 33, 
  2.57            subdivision 5; Laws 1993, chapter 375, article 9, 
  2.58            section 46, subdivisions 2, 3, and 5; Laws 1994, 
  2.59            chapter 587, article 11, by adding; Laws 1995, chapter 
  2.60            255, article 3, section 2, subdivision 1, as amended; 
  2.61            and subdivision 4, as amended; chapter 264, article 2, 
  2.62            section 44; Laws 1997, chapter 105, section 3, as 
  2.63            amended; chapter 225, article 2, section 64; chapter 
  2.64            231, article 1, section 16, as amended; article 2, 
  2.65            section 63, subdivision 1; and section 68, 
  2.66            subdivisions 1 and 3; article 5, section 18, 
  2.67            subdivision 1; article 7, section 47; article 10, 
  2.68            section 24; article 13, section 19; and Laws 1997 
  2.69            Second Special Session chapter 2, section 4, 
  2.70            subdivision 3; proposing coding for new law in 
  2.71            Minnesota Statutes, chapters 272; 273; 290B; 298; 
  3.1             365A; 462A; 469; 471; and 477A; repealing Minnesota 
  3.2             Statutes 1996, sections 289A.50, subdivision 6; 
  3.3             297A.02, subdivision 2; 298.012; 298.21; 298.23; 
  3.4             298.34, subdivisions 1 and 4; 298.391, subdivisions 2 
  3.5             and 5; and 365A.09; Minnesota Statutes 1997 
  3.6             Supplement, sections 3.987, subdivision 3; 14.431; and 
  3.7             273.13, subdivision 32. 
  3.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  3.9                              ARTICLE 1 
  3.10                        PROPERTY TAX REBATE 
  3.11     Section 1.  [1998 PROPERTY TAX REBATE.] 
  3.12     (a) A credit is allowed against the tax imposed under 
  3.13  Minnesota Statutes, chapter 290, to an individual, other than a 
  3.14  dependent, as defined in sections 151 and 152 of the Internal 
  3.15  Revenue Code, disregarding section 152(b)(3) of the Internal 
  3.16  Revenue Code, equal to 20 percent of the qualified property tax 
  3.17  paid before January 1, 1999, for taxes assessed in 1997.  The 
  3.18  maximum amount of qualifying tax to which the credit applies is 
  3.19  $7,500. 
  3.20     (b) For property owned and occupied by the taxpayer during 
  3.21  1998, qualified property tax means property taxes payable as 
  3.22  defined in Minnesota Statutes, section 290A.03, subdivision 13, 
  3.23  assessed in 1997 and payable in 1998, and deductible by the 
  3.24  individual under section 164 of the Internal Revenue Code of 
  3.25  1986, as amended through December 31, 1997, except the 
  3.26  requirement in Minnesota Statutes, section 290A.03, subdivision 
  3.27  13, that the taxpayer own and occupy the property on January 2, 
  3.28  1998, does not apply.  In the case of agricultural land assessed 
  3.29  as part of a homestead pursuant to Minnesota Statutes, section 
  3.30  273.13, subdivision 23, the owner is allowed to calculate the 
  3.31  credit on all property taxes on the homestead, except to the 
  3.32  extent the owner is required to furnish a rent certificate under 
  3.33  Minnesota Statutes, section 290A.19, to a tenant leasing a part 
  3.34  of the farm homestead. 
  3.35     (c) For a renter, the qualified property tax means the 
  3.36  amount of rent constituting property taxes under Minnesota 
  3.37  Statutes, section 290A.03, subdivision 11, based on rent paid in 
  3.38  1998.  If two or more renters could be claimants under Minnesota 
  3.39  Statutes, chapter 290A, with regard to the rent constituting 
  4.1   property taxes, the rules under Minnesota Statutes, section 
  4.2   290A.03, subdivision 8, paragraph (f), apply to determine the 
  4.3   amount of the credit for the individual. 
  4.4      (d) For an individual who both owned and rented principal 
  4.5   residences in calendar year 1998, qualified taxes are the sum of 
  4.6   the amounts under paragraphs (b) and (c). 
  4.7      (e) If the amount of the credit under this section exceeds 
  4.8   the taxpayer's tax liability under Minnesota Statutes, chapter 
  4.9   290, the commissioner shall refund the excess. 
  4.10     (f) To claim a credit under this section, the taxpayer must 
  4.11  attach a copy of the property tax statement and certificate of 
  4.12  rent paid, as applicable, and provide any additional information 
  4.13  the commissioner requires. 
  4.14     (g) This credit applies to taxable years beginning after 
  4.15  December 31, 1997, and before January 1, 1999. 
  4.16     (h) Payment of the credit under this section is subject to 
  4.17  Minnesota Statutes, chapter 270A, and any other provision 
  4.18  applicable to refunds under Minnesota Statutes, chapter 290. 
  4.19     (i) An amount sufficient to pay refunds under this section 
  4.20  is appropriated to the commissioner of revenue from the general 
  4.21  fund. 
  4.22     Sec. 2.  [TRANSFER TO GENERAL FUND.] 
  4.23     The commissioner of finance shall transfer $500,000,000 
  4.24  from the property tax reform account to the general fund on July 
  4.25  1, 1998. 
  4.26     Sec. 3.  Laws 1997, chapter 231, article 1, section 16, as 
  4.27  amended by Laws 1997, First Special Session chapter 5, section 
  4.28  35, and Laws 1997, Third Special Session chapter 3, section 11, 
  4.29  and Laws 1998, chapter 304, section 1, is amended to read: 
  4.30     Sec. 16.  [PROPERTY TAX REBATE.] 
  4.31     (a) A credit is allowed against the tax imposed under 
  4.32  Minnesota Statutes, chapter 290, to an individual, other than as 
  4.33  a dependent, as defined in sections 151 and 152 of the Internal 
  4.34  Revenue Code, disregarding section 152(b)(3) of the Internal 
  4.35  Revenue Code, equal to 20 percent of the qualified property tax 
  4.36  paid before January 1, 1998, for taxes assessed in 1996.  
  5.1      (b) For property owned and occupied by the taxpayer during 
  5.2   1997, qualified tax means property taxes payable as defined in 
  5.3   Minnesota Statutes, section 290A.03, subdivision 13, assessed in 
  5.4   1996 and payable in 1997, except the requirement that the 
  5.5   taxpayer own and occupy the property on January 2, 1997, does 
  5.6   not apply.  The credit is allowed only to the individual and 
  5.7   spouse, if any, who paid the tax, whether directly, through an 
  5.8   escrow arrangement, or under a contractual agreement for the 
  5.9   purchase or sale of the property.  In the case of agricultural 
  5.10  land assessed as part of a homestead pursuant to Minnesota 
  5.11  Statutes, section 273.13, subdivision 23, the owner is allowed 
  5.12  to calculate the credit on all property taxes on the homestead, 
  5.13  except to the extent the owner is required to furnish a rent 
  5.14  certificate under Minnesota Statutes, section 290A.19, to a 
  5.15  tenant leasing a part of the farm homestead. 
  5.16     (c) For a renter, the qualified property tax means the 
  5.17  amount of rent constituting property taxes under Minnesota 
  5.18  Statutes, section 290A.03, subdivision 11, based on rent paid in 
  5.19  1997.  If two or more renters could be claimants under Minnesota 
  5.20  Statutes, chapter 290A with regard to the rent constituting 
  5.21  property taxes, the rules under Minnesota Statutes, section 
  5.22  290A.03, subdivision 8, paragraph (f), applies to determine the 
  5.23  amount of the credit for the individual. 
  5.24     (d) For an individual who both owned and rented principal 
  5.25  residences in calendar year 1997, qualified taxes are the sum of 
  5.26  the amounts under paragraphs (a) and (b). 
  5.27     (e) If the amount of the credit under this subdivision 
  5.28  exceeds the taxpayer's tax liability under this chapter, the 
  5.29  commissioner shall refund the excess. 
  5.30     (f) To claim a credit under this subdivision, the taxpayer 
  5.31  must attach a copy of the property tax statement and certificate 
  5.32  of rent paid, as applicable, and provide any additional 
  5.33  information the commissioner requires. 
  5.34     (g) An amount sufficient to pay refunds under this 
  5.35  subdivision is appropriated to the commissioner from the general 
  5.36  fund. 
  6.1      (h) This credit applies to taxable years beginning after 
  6.2   December 31, 1996, and before January 1, 1998. 
  6.3      (i) Payment of the credit under this section is subject to 
  6.4   Minnesota Statutes, chapter 270A, and any other provision 
  6.5   applicable to refunds under Minnesota Statutes, chapter 290. 
  6.6      Sec. 4.  [APPROPRIATION.] 
  6.7      $1,837,000 is appropriated from the general fund for fiscal 
  6.8   year 1999 to the commissioner of revenue to administer section 1.
  6.9                              ARTICLE 2
  6.10                        PROPERTY TAX REFORM
  6.11     Section 1.  Minnesota Statutes 1997 Supplement, section 
  6.12  124.239, subdivision 5, is amended to read: 
  6.13     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
  6.14  approval, may levy for costs related to an approved facility 
  6.15  plan as follows:  
  6.16     (a) if the district has indicated to the commissioner that 
  6.17  bonds will be issued, the district may levy for the principal 
  6.18  and interest payments on outstanding bonds issued according to 
  6.19  subdivision 3 after reduction for any alternative facilities aid 
  6.20  receivable under subdivision 5a; or 
  6.21     (b) if the district has indicated to the commissioner that 
  6.22  the plan will be funded through levy, the district may levy 
  6.23  according to the schedule approved in the plan after reduction 
  6.24  for any alternative facilities aid receivable under subdivision 
  6.25  5a. 
  6.26     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
  6.27  124.239, subdivision 5a, is amended to read: 
  6.28     Subd. 5a.  [ALTERNATIVE FACILITIES AID.] A district's 
  6.29  alternative facilities aid is the amount equal to the district's 
  6.30  annual debt service costs, provided that the amount does not 
  6.31  exceed the amount certified to be levied for those purposes for 
  6.32  taxes payable in 1997, or for a district that made a levy under 
  6.33  subdivision 5, paragraph (b), the lesser of the district's 
  6.34  annual levy amount, or one-sixth of the amount of levy that it 
  6.35  certified for that purpose for taxes payable in 1998. 
  6.36     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
  7.1   124.239, subdivision 5b, is amended to read: 
  7.2      Subd. 5b.  [ALTERNATIVE FACILITIES APPROPRIATION.] (a) An 
  7.3   amount not to exceed $17,000,000 $19,700,000 for fiscal year 
  7.4   2000 and $20,000,000 for fiscal year 2001 and each year 
  7.5   thereafter is appropriated from the general fund to the 
  7.6   commissioner of children, families, and learning for fiscal year 
  7.7   2000 and each year thereafter for payment of alternative 
  7.8   facilities aid under subdivision 5a.  The 2000 appropriation 
  7.9   includes $1,700,000 for 1999 and $15,300,000 for 2000. 
  7.10     (b) The appropriation in paragraph (a) must be reduced by 
  7.11  the amount of any money specifically appropriated for the same 
  7.12  purpose in any year from any state fund. 
  7.13     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
  7.14  124.315, subdivision 4, is amended to read: 
  7.15     Subd. 4.  [INTEGRATION LEVY.] A district may levy an amount 
  7.16  equal to 46 33 percent for fiscal year 2000 and 22 percent for 
  7.17  fiscal year 2001 and thereafter of the district's integration 
  7.18  revenue as defined in subdivision 3. 
  7.19     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
  7.20  124.315, subdivision 5, is amended to read: 
  7.21     Subd. 5.  [INTEGRATION AID.] A district's integration aid 
  7.22  equals 54 67 percent for fiscal year 2000 and 78 percent for 
  7.23  fiscal year 2001 and thereafter of the district's integration 
  7.24  revenue as defined in subdivision 3. 
  7.25     Sec. 6.  Minnesota Statutes 1996, section 124A.03, 
  7.26  subdivision 1f, is amended to read: 
  7.27     Subd. 1f.  [REFERENDUM EQUALIZATION REVENUE.] A district's 
  7.28  referendum equalization revenue equals $315 $350 times the 
  7.29  district's actual pupil units for that year. 
  7.30     Referendum equalization revenue must not exceed a 
  7.31  district's total referendum revenue for that year. 
  7.32     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
  7.33  273.127, subdivision 3, is amended to read: 
  7.34     Subd. 3.  [CLASS 4C PROPERTIES.] For the market value of 
  7.35  properties that meet the criteria of subdivision 2, paragraph 
  7.36  (a), and which no longer qualify as a result of the eligibility 
  8.1   criteria specified in section 273.126, a class rate of 2.4 
  8.2   percent applies for taxes payable in 1999 and a class rate of 
  8.3   2.6 2.5 percent applies for taxes payable in 2000. 
  8.4      Sec. 8.  Minnesota Statutes 1997 Supplement, section 
  8.5   273.13, subdivision 22, is amended to read: 
  8.6      Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  8.7   23, real estate which is residential and used for homestead 
  8.8   purposes is class 1.  The market value of class 1a property must 
  8.9   be determined based upon the value of the house, garage, and 
  8.10  land.  
  8.11     For taxes payable in 1998 and thereafter, The first $75,000 
  8.12  of market value of class 1a property has a net class rate of one 
  8.13  percent of its market value; and the market value of class 1a 
  8.14  property that exceeds $75,000 has a class rate of 1.85 1.7 
  8.15  percent of its market value.  
  8.16     (b) Class 1b property includes homestead real estate or 
  8.17  homestead manufactured homes used for the purposes of a 
  8.18  homestead by 
  8.19     (1) any blind person, or the blind person and the blind 
  8.20  person's spouse; or 
  8.21     (2) any person, hereinafter referred to as "veteran," who: 
  8.22     (i) served in the active military or naval service of the 
  8.23  United States; and 
  8.24     (ii) is entitled to compensation under the laws and 
  8.25  regulations of the United States for permanent and total 
  8.26  service-connected disability due to the loss, or loss of use, by 
  8.27  reason of amputation, ankylosis, progressive muscular 
  8.28  dystrophies, or paralysis, of both lower extremities, such as to 
  8.29  preclude motion without the aid of braces, crutches, canes, or a 
  8.30  wheelchair; and 
  8.31     (iii) has acquired a special housing unit with special 
  8.32  fixtures or movable facilities made necessary by the nature of 
  8.33  the veteran's disability, or the surviving spouse of the 
  8.34  deceased veteran for as long as the surviving spouse retains the 
  8.35  special housing unit as a homestead; or 
  8.36     (3) any person who: 
  9.1      (i) is permanently and totally disabled and 
  9.2      (ii) receives 90 percent or more of total income from 
  9.3      (A) aid from any state as a result of that disability; or 
  9.4      (B) supplemental security income for the disabled; or 
  9.5      (C) workers' compensation based on a finding of total and 
  9.6   permanent disability; or 
  9.7      (D) social security disability, including the amount of a 
  9.8   disability insurance benefit which is converted to an old age 
  9.9   insurance benefit and any subsequent cost of living increases; 
  9.10  or 
  9.11     (E) aid under the federal Railroad Retirement Act of 1937, 
  9.12  United States Code Annotated, title 45, section 228b(a)5; or 
  9.13     (F) a pension from any local government retirement fund 
  9.14  located in the state of Minnesota as a result of that 
  9.15  disability; or 
  9.16     (G) pension, annuity, or other income paid as a result of 
  9.17  that disability from a private pension or disability plan, 
  9.18  including employer, employee, union, and insurance plans and 
  9.19     (iii) has household income as defined in section 290A.03, 
  9.20  subdivision 5, of $50,000 or less; or 
  9.21     (4) any person who is permanently and totally disabled and 
  9.22  whose household income as defined in section 290A.03, 
  9.23  subdivision 5, is 275 percent or less of the federal poverty 
  9.24  level. 
  9.25     Property is classified and assessed under clause (4) only 
  9.26  if the government agency or income-providing source certifies, 
  9.27  upon the request of the homestead occupant, that the homestead 
  9.28  occupant satisfies the disability requirements of this paragraph.
  9.29     Property is classified and assessed pursuant to clause (1) 
  9.30  only if the commissioner of economic security certifies to the 
  9.31  assessor that the homestead occupant satisfies the requirements 
  9.32  of this paragraph.  
  9.33     Permanently and totally disabled for the purpose of this 
  9.34  subdivision means a condition which is permanent in nature and 
  9.35  totally incapacitates the person from working at an occupation 
  9.36  which brings the person an income.  The first $32,000 market 
 10.1   value of class 1b property has a net class rate of .45 percent 
 10.2   of its market value.  The remaining market value of class 1b 
 10.3   property has a net class rate using the rates for class 1 or 
 10.4   class 2a property, whichever is appropriate, of similar market 
 10.5   value.  
 10.6      (c) Class 1c property is commercial use real property that 
 10.7   abuts a lakeshore line and is devoted to temporary and seasonal 
 10.8   residential occupancy for recreational purposes but not devoted 
 10.9   to commercial purposes for more than 250 days in the year 
 10.10  preceding the year of assessment, and that includes a portion 
 10.11  used as a homestead by the owner, which includes a dwelling 
 10.12  occupied as a homestead by a shareholder of a corporation that 
 10.13  owns the resort or a partner in a partnership that owns the 
 10.14  resort, even if the title to the homestead is held by the 
 10.15  corporation or partnership.  For purposes of this clause, 
 10.16  property is devoted to a commercial purpose on a specific day if 
 10.17  any portion of the property, excluding the portion used 
 10.18  exclusively as a homestead, is used for residential occupancy 
 10.19  and a fee is charged for residential occupancy.  In order for a 
 10.20  property to be classified as class 1c, at least 40 percent of 
 10.21  the annual gross lodging receipts related to the property must 
 10.22  be from business conducted between Memorial Day weekend and 
 10.23  Labor Day weekend, and at least 60 percent of all bookings by 
 10.24  lodging guests during the year must be for periods of at least 
 10.25  two consecutive nights.  Class 1c property has a class rate of 
 10.26  one percent of total market value with the following 
 10.27  limitation:  the area of the property must not exceed 100 feet 
 10.28  of lakeshore footage for each cabin or campsite located on the 
 10.29  property up to a total of 800 feet and 500 feet in depth, 
 10.30  measured away from the lakeshore.  If any portion of the class 
 10.31  1c resort property is classified as class 4c under subdivision 
 10.32  25, the entire property must meet the requirements of 
 10.33  subdivision 25, paragraph (d), clause (1), to qualify for class 
 10.34  1c treatment under this paragraph. 
 10.35     (d) Class 1d property includes structures that meet all of 
 10.36  the following criteria: 
 11.1      (1) the structure is located on property that is classified 
 11.2   as agricultural property under section 273.13, subdivision 23; 
 11.3      (2) the structure is occupied exclusively by seasonal farm 
 11.4   workers during the time when they work on that farm, and the 
 11.5   occupants are not charged rent for the privilege of occupying 
 11.6   the property, provided that use of the structure for storage of 
 11.7   farm equipment and produce does not disqualify the property from 
 11.8   classification under this paragraph; 
 11.9      (3) the structure meets all applicable health and safety 
 11.10  requirements for the appropriate season; and 
 11.11     (4) the structure is not saleable as residential property 
 11.12  because it does not comply with local ordinances relating to 
 11.13  location in relation to streets or roads. 
 11.14     The market value of class 1d property has the same class 
 11.15  rates as class 1a property under paragraph (a). 
 11.16     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
 11.17  273.13, subdivision 23, is amended to read: 
 11.18     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
 11.19  land including any improvements that is homesteaded.  The market 
 11.20  value of the house and garage and immediately surrounding one 
 11.21  acre of land has the same class rates as class 1a property under 
 11.22  subdivision 22.  The value of the remaining land including 
 11.23  improvements up to $115,000 has a net class rate of 0.4 0.35 
 11.24  percent of market value.  The remaining value of class 2a 
 11.25  property over $115,000 of market value that does not exceed 320 
 11.26  acres has a net class rate of 0.9 0.8 percent of market value. 
 11.27  The remaining property over the $115,000 market value in excess 
 11.28  of 320 acres has a class rate of 1.4 1.25 percent of market 
 11.29  value. 
 11.30     (b) Class 2b property is (1) real estate, rural in 
 11.31  character and used exclusively for growing trees for timber, 
 11.32  lumber, and wood and wood products; (2) real estate that is not 
 11.33  improved with a structure and is used exclusively for growing 
 11.34  trees for timber, lumber, and wood and wood products, if the 
 11.35  owner has participated or is participating in a cost-sharing 
 11.36  program for afforestation, reforestation, or timber stand 
 12.1   improvement on that particular property, administered or 
 12.2   coordinated by the commissioner of natural resources; (3) real 
 12.3   estate that is nonhomestead agricultural land; or (4) a landing 
 12.4   area or public access area of a privately owned public use 
 12.5   airport.  Class 2b property has a net class rate of 1.4 1.25 
 12.6   percent of market value. 
 12.7      (c) Agricultural land as used in this section means 
 12.8   contiguous acreage of ten acres or more, used during the 
 12.9   preceding year for agricultural purposes.  "Agricultural 
 12.10  purposes" as used in this section means the raising or 
 12.11  cultivation of agricultural products or enrollment in the 
 12.12  Reinvest in Minnesota program under sections 103F.501 to 
 12.13  103F.535 or the federal Conservation Reserve Program as 
 12.14  contained in Public Law Number 99-198.  Contiguous acreage on 
 12.15  the same parcel, or contiguous acreage on an immediately 
 12.16  adjacent parcel under the same ownership, may also qualify as 
 12.17  agricultural land, but only if it is pasture, timber, waste, 
 12.18  unusable wild land, or land included in state or federal farm 
 12.19  programs.  Agricultural classification for property shall be 
 12.20  determined excluding the house, garage, and immediately 
 12.21  surrounding one acre of land, and shall not be based upon the 
 12.22  market value of any residential structures on the parcel or 
 12.23  contiguous parcels under the same ownership. 
 12.24     (d) Real estate, excluding the house, garage, and 
 12.25  immediately surrounding one acre of land, of less than ten acres 
 12.26  which is exclusively and intensively used for raising or 
 12.27  cultivating agricultural products, shall be considered as 
 12.28  agricultural land.  
 12.29     Land shall be classified as agricultural even if all or a 
 12.30  portion of the agricultural use of that property is the leasing 
 12.31  to, or use by another person for agricultural purposes. 
 12.32     Classification under this subdivision is not determinative 
 12.33  for qualifying under section 273.111. 
 12.34     The property classification under this section supersedes, 
 12.35  for property tax purposes only, any locally administered 
 12.36  agricultural policies or land use restrictions that define 
 13.1   minimum or maximum farm acreage. 
 13.2      (e) The term "agricultural products" as used in this 
 13.3   subdivision includes production for sale of:  
 13.4      (1) livestock, dairy animals, dairy products, poultry and 
 13.5   poultry products, fur-bearing animals, horticultural and nursery 
 13.6   stock described in sections 18.44 to 18.61, fruit of all kinds, 
 13.7   vegetables, forage, grains, bees, and apiary products by the 
 13.8   owner; 
 13.9      (2) fish bred for sale and consumption if the fish breeding 
 13.10  occurs on land zoned for agricultural use; 
 13.11     (3) the commercial boarding of horses if the boarding is 
 13.12  done in conjunction with raising or cultivating agricultural 
 13.13  products as defined in clause (1); 
 13.14     (4) property which is owned and operated by nonprofit 
 13.15  organizations used for equestrian activities, excluding racing; 
 13.16  and 
 13.17     (5) game birds and waterfowl bred and raised for use on a 
 13.18  shooting preserve licensed under section 97A.115.  
 13.19     (f) If a parcel used for agricultural purposes is also used 
 13.20  for commercial or industrial purposes, including but not limited 
 13.21  to:  
 13.22     (1) wholesale and retail sales; 
 13.23     (2) processing of raw agricultural products or other goods; 
 13.24     (3) warehousing or storage of processed goods; and 
 13.25     (4) office facilities for the support of the activities 
 13.26  enumerated in clauses (1), (2), and (3), 
 13.27  the assessor shall classify the part of the parcel used for 
 13.28  agricultural purposes as class 1b, 2a, or 2b, whichever is 
 13.29  appropriate, and the remainder in the class appropriate to its 
 13.30  use.  The grading, sorting, and packaging of raw agricultural 
 13.31  products for first sale is considered an agricultural purpose.  
 13.32  A greenhouse or other building where horticultural or nursery 
 13.33  products are grown that is also used for the conduct of retail 
 13.34  sales must be classified as agricultural if it is primarily used 
 13.35  for the growing of horticultural or nursery products from seed, 
 13.36  cuttings, or roots and occasionally as a showroom for the retail 
 14.1   sale of those products.  Use of a greenhouse or building only 
 14.2   for the display of already grown horticultural or nursery 
 14.3   products does not qualify as an agricultural purpose.  
 14.4      The assessor shall determine and list separately on the 
 14.5   records the market value of the homestead dwelling and the one 
 14.6   acre of land on which that dwelling is located.  If any farm 
 14.7   buildings or structures are located on this homesteaded acre of 
 14.8   land, their market value shall not be included in this separate 
 14.9   determination.  
 14.10     (g) To qualify for classification under paragraph (b), 
 14.11  clause (4), a privately owned public use airport must be 
 14.12  licensed as a public airport under section 360.018.  For 
 14.13  purposes of paragraph (b), clause (4), "landing area" means that 
 14.14  part of a privately owned public use airport properly cleared, 
 14.15  regularly maintained, and made available to the public for use 
 14.16  by aircraft and includes runways, taxiways, aprons, and sites 
 14.17  upon which are situated landing or navigational aids.  A landing 
 14.18  area also includes land underlying both the primary surface and 
 14.19  the approach surfaces that comply with all of the following:  
 14.20     (i) the land is properly cleared and regularly maintained 
 14.21  for the primary purposes of the landing, taking off, and taxiing 
 14.22  of aircraft; but that portion of the land that contains 
 14.23  facilities for servicing, repair, or maintenance of aircraft is 
 14.24  not included as a landing area; 
 14.25     (ii) the land is part of the airport property; and 
 14.26     (iii) the land is not used for commercial or residential 
 14.27  purposes. 
 14.28  The land contained in a landing area under paragraph (b), clause 
 14.29  (4), must be described and certified by the commissioner of 
 14.30  transportation.  The certification is effective until it is 
 14.31  modified, or until the airport or landing area no longer meets 
 14.32  the requirements of paragraph (b), clause (4).  For purposes of 
 14.33  paragraph (b), clause (4), "public access area" means property 
 14.34  used as an aircraft parking ramp, apron, or storage hangar, or 
 14.35  an arrival and departure building in connection with the airport.
 14.36     Sec. 10.  Minnesota Statutes 1997 Supplement, section 
 15.1   273.13, subdivision 24, is amended to read: 
 15.2      Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 15.3   property and utility real and personal property, except class 5 
 15.4   property as identified in subdivision 31, clause (1), is class 
 15.5   3a.  Each parcel has a class rate of 2.7 2.45 percent of the 
 15.6   first tier of market value, and 4.0 3.5 percent of the remaining 
 15.7   market value, except that in the case of contiguous parcels of 
 15.8   commercial and industrial property owned by the same person or 
 15.9   entity, only the value equal to the first-tier value of the 
 15.10  contiguous parcels qualifies for the reduced class rate.  For 
 15.11  the purposes of this subdivision, the first tier means the first 
 15.12  $150,000 of market value.  In the case of utility property owned 
 15.13  by one person or entity, only one parcel in each county has a 
 15.14  reduced class rate on the first tier of market value. 
 15.15     For purposes of this paragraph, parcels are considered to 
 15.16  be contiguous even if they are separated from each other by a 
 15.17  road, street, vacant lot, waterway, or other similar intervening 
 15.18  type of property. 
 15.19     (b) Employment property defined in section 469.166, during 
 15.20  the period provided in section 469.170, shall constitute class 
 15.21  3b and has a class rate of 2.3 percent of the first $50,000 of 
 15.22  market value and 3.6 3.5 percent of the remainder, except that 
 15.23  for employment property located in a border city enterprise zone 
 15.24  designated pursuant to section 469.168, subdivision 4, paragraph 
 15.25  (c), the class rate of the first tier of market value and the 
 15.26  class rate of the remainder is determined under paragraph (a), 
 15.27  unless the governing body of the city designated as an 
 15.28  enterprise zone determines that a specific parcel shall be 
 15.29  assessed pursuant to the first clause of this sentence.  The 
 15.30  governing body may provide for assessment under the first clause 
 15.31  of the preceding sentence only for property which is located in 
 15.32  an area which has been designated by the governing body for the 
 15.33  receipt of tax reductions authorized by section 469.171, 
 15.34  subdivision 1. 
 15.35     (c) Structures which are (i) located on property classified 
 15.36  as class 3a, (ii) constructed under an initial building permit 
 16.1   issued after January 2, 1996, (iii) located in a transit zone as 
 16.2   defined under section 473.3915, subdivision 3, (iv) located 
 16.3   within the boundaries of a school district, and (v) not 
 16.4   primarily used for retail or transient lodging purposes, shall 
 16.5   have a class rate equal to 85 percent of the class rate of the 
 16.6   second tier of the commercial property rate under paragraph (a) 
 16.7   on any portion of the market value that does not qualify for the 
 16.8   first tier class rate under paragraph (a).  As used in item (v), 
 16.9   a structure is primarily used for retail or transient lodging 
 16.10  purposes if over 50 percent of its square footage is used for 
 16.11  those purposes.  The four percent rate A class rate equal to 85 
 16.12  percent of the class rate of the second tier of the commercial 
 16.13  property class rate under paragraph (a) shall also apply to 
 16.14  improvements to existing structures that meet the requirements 
 16.15  of items (i) to (v) if the improvements are constructed under an 
 16.16  initial building permit issued after January 2, 1996, even if 
 16.17  the remainder of the structure was constructed prior to January 
 16.18  2, 1996.  For the purposes of this paragraph, a structure shall 
 16.19  be considered to be located in a transit zone if any portion of 
 16.20  the structure lies within the zone.  If any property once 
 16.21  eligible for treatment under this paragraph ceases to remain 
 16.22  eligible due to revisions in transit zone boundaries, the 
 16.23  property shall continue to receive treatment under this 
 16.24  paragraph for a period of three years. 
 16.25     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
 16.26  273.13, subdivision 25, as amended by Laws 1997, Third Special 
 16.27  Session chapter 3, section 28, is amended to read: 
 16.28     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 16.29  estate containing four or more units and used or held for use by 
 16.30  the owner or by the tenants or lessees of the owner as a 
 16.31  residence for rental periods of 30 days or more.  Class 4a also 
 16.32  includes hospitals licensed under sections 144.50 to 144.56, 
 16.33  other than hospitals exempt under section 272.02, and contiguous 
 16.34  property used for hospital purposes, without regard to whether 
 16.35  the property has been platted or subdivided.  Class 4a property 
 16.36  in a city with a population of 5,000 or less, that is (1) 
 17.1   located outside of the metropolitan area, as defined in section 
 17.2   473.121, subdivision 2, or outside any county contiguous to the 
 17.3   metropolitan area, and (2) whose city boundary is at least 15 
 17.4   miles from the boundary of any city with a population greater 
 17.5   than 5,000 has a class rate of 2.3 2.15 percent of market value. 
 17.6   All other class 4a property has a class rate of 2.9 2.5 percent 
 17.7   of market value.  For purposes of this paragraph, population has 
 17.8   the same meaning given in section 477A.011, subdivision 3. 
 17.9      (b) Class 4b includes: 
 17.10     (1) residential real estate containing less than four units 
 17.11  that does not qualify as class 4bb, other than seasonal 
 17.12  residential, and recreational; 
 17.13     (2) manufactured homes not classified under any other 
 17.14  provision; 
 17.15     (3) a dwelling, garage, and surrounding one acre of 
 17.16  property on a nonhomestead farm classified under subdivision 23, 
 17.17  paragraph (b) containing two or three units; 
 17.18     (4) unimproved property that is classified residential as 
 17.19  determined under section 273.13, subdivision 33.  
 17.20     Class 4b property has a class rate of 2.1 1.7 percent of 
 17.21  market value.  
 17.22     (c) Class 4bb includes: 
 17.23     (1) nonhomestead residential real estate containing one 
 17.24  unit, other than seasonal residential, and recreational; and 
 17.25     (2) a single family dwelling, garage, and surrounding one 
 17.26  acre of property on a nonhomestead farm classified under 
 17.27  subdivision 23, paragraph (b). 
 17.28     Class 4bb has a class rate of 1.9 1.25 percent on the first 
 17.29  $75,000 of market value and a class rate of 2.1 1.7 percent of 
 17.30  its market value that exceeds $75,000. 
 17.31     Property that has been classified as seasonal recreational 
 17.32  residential property at any time during which it has been owned 
 17.33  by the current owner or spouse of the current owner does not 
 17.34  qualify for class 4bb. 
 17.35     (d) Class 4c property includes: 
 17.36     (1) except as provided in subdivision 22, paragraph (c), 
 18.1   real property devoted to temporary and seasonal residential 
 18.2   occupancy for recreation purposes, including real property 
 18.3   devoted to temporary and seasonal residential occupancy for 
 18.4   recreation purposes and not devoted to commercial purposes for 
 18.5   more than 250 days in the year preceding the year of 
 18.6   assessment.  For purposes of this clause, property is devoted to 
 18.7   a commercial purpose on a specific day if any portion of the 
 18.8   property is used for residential occupancy, and a fee is charged 
 18.9   for residential occupancy.  In order for a property to be 
 18.10  classified as class 4c, seasonal recreational residential for 
 18.11  commercial purposes, at least 40 percent of the annual gross 
 18.12  lodging receipts related to the property must be from business 
 18.13  conducted between Memorial Day weekend and Labor Day weekend 
 18.14  during 90 consecutive days and either (i) at least 60 percent of 
 18.15  all paid bookings by lodging guests during the year must be for 
 18.16  periods of at least two consecutive nights; or (ii) at least 20 
 18.17  percent of the annual gross receipts must be from charges for 
 18.18  rental of fish houses, boats and motors, snowmobiles, downhill 
 18.19  or cross-country ski equipment, or charges for marina services, 
 18.20  launch services, and guide services, or the sale of bait and 
 18.21  fishing tackle.  For purposes of this determination, a paid 
 18.22  booking of five or more nights shall be counted as two 
 18.23  bookings.  Class 4c also includes commercial use real property 
 18.24  used exclusively for recreational purposes in conjunction with 
 18.25  class 4c property devoted to temporary and seasonal residential 
 18.26  occupancy for recreational purposes, up to a total of two acres, 
 18.27  provided the property is not devoted to commercial recreational 
 18.28  use for more than 250 days in the year preceding the year of 
 18.29  assessment and is located within two miles of the class 4c 
 18.30  property with which it is used.  Class 4c property classified in 
 18.31  this clause also includes the remainder of class 1c 
 18.32  resorts provided that the entire property including that portion 
 18.33  of the property classified as class 1c also meets the 
 18.34  requirements for class 4c under this clause; otherwise the 
 18.35  entire property is classified as class 3.  Owners of real 
 18.36  property devoted to temporary and seasonal residential occupancy 
 19.1   for recreation purposes and all or a portion of which was 
 19.2   devoted to commercial purposes for not more than 250 days in the 
 19.3   year preceding the year of assessment desiring classification as 
 19.4   class 1c or 4c, must submit a declaration to the assessor 
 19.5   designating the cabins or units occupied for 250 days or less in 
 19.6   the year preceding the year of assessment by January 15 of the 
 19.7   assessment year.  Those cabins or units and a proportionate 
 19.8   share of the land on which they are located will be designated 
 19.9   class 1c or 4c as otherwise provided.  The remainder of the 
 19.10  cabins or units and a proportionate share of the land on which 
 19.11  they are located will be designated as class 3a.  The owner of 
 19.12  property desiring designation as class 1c or 4c property must 
 19.13  provide guest registers or other records demonstrating that the 
 19.14  units for which class 1c or 4c designation is sought were not 
 19.15  occupied for more than 250 days in the year preceding the 
 19.16  assessment if so requested.  The portion of a property operated 
 19.17  as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
 19.18  nonresidential facility operated on a commercial basis not 
 19.19  directly related to temporary and seasonal residential occupancy 
 19.20  for recreation purposes shall not qualify for class 1c or 4c; 
 19.21     (2) qualified property used as a golf course if: 
 19.22     (i) any portion of the property is located within a county 
 19.23  that has a population of less than 50,000, or within a county 
 19.24  containing a golf course owned by a municipality, the county, or 
 19.25  a special taxing district; 
 19.26     (ii) it is open to the public on a daily fee basis.  It may 
 19.27  charge membership fees or dues, but a membership fee may not be 
 19.28  required in order to use the property for golfing, and its green 
 19.29  fees for golfing must be comparable to green fees typically 
 19.30  charged by municipal courses; and 
 19.31     (iii) (ii) it meets the requirements of section 273.112, 
 19.32  subdivision 3, paragraph (d). 
 19.33     A structure used as a clubhouse, restaurant, or place of 
 19.34  refreshment in conjunction with the golf course is classified as 
 19.35  class 3a property. 
 19.36     (3) real property up to a maximum of one acre of land owned 
 20.1   by a nonprofit community service oriented organization; provided 
 20.2   that the property is not used for a revenue-producing activity 
 20.3   for more than six days in the calendar year preceding the year 
 20.4   of assessment and the property is not used for residential 
 20.5   purposes on either a temporary or permanent basis.  For purposes 
 20.6   of this clause, a "nonprofit community service oriented 
 20.7   organization" means any corporation, society, association, 
 20.8   foundation, or institution organized and operated exclusively 
 20.9   for charitable, religious, fraternal, civic, or educational 
 20.10  purposes, and which is exempt from federal income taxation 
 20.11  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 20.12  Revenue Code of 1986, as amended through December 31, 1990.  For 
 20.13  purposes of this clause, "revenue-producing activities" shall 
 20.14  include but not be limited to property or that portion of the 
 20.15  property that is used as an on-sale intoxicating liquor or 3.2 
 20.16  percent malt liquor establishment licensed under chapter 340A, a 
 20.17  restaurant open to the public, bowling alley, a retail store, 
 20.18  gambling conducted by organizations licensed under chapter 349, 
 20.19  an insurance business, or office or other space leased or rented 
 20.20  to a lessee who conducts a for-profit enterprise on the 
 20.21  premises.  Any portion of the property which is used for 
 20.22  revenue-producing activities for more than six days in the 
 20.23  calendar year preceding the year of assessment shall be assessed 
 20.24  as class 3a.  The use of the property for social events open 
 20.25  exclusively to members and their guests for periods of less than 
 20.26  24 hours, when an admission is not charged nor any revenues are 
 20.27  received by the organization shall not be considered a 
 20.28  revenue-producing activity; 
 20.29     (4) post-secondary student housing of not more than one 
 20.30  acre of land that is owned by a nonprofit corporation organized 
 20.31  under chapter 317A and is used exclusively by a student 
 20.32  cooperative, sorority, or fraternity for on-campus housing or 
 20.33  housing located within two miles of the border of a college 
 20.34  campus; and 
 20.35     (5) manufactured home parks as defined in section 327.14, 
 20.36  subdivision 3; and 
 21.1      (6) real property that is actively and exclusively devoted 
 21.2   to indoor fitness, health, social, recreational, and related 
 21.3   uses, is owned and operated by a not-for-profit corporation, and 
 21.4   is located within the metropolitan area as defined in section 
 21.5   473.121, subdivision 2. 
 21.6      Class 4c property has a class rate of 2.1 1.8 percent of 
 21.7   market value, except that (i) for each parcel of seasonal 
 21.8   residential recreational property not used for commercial 
 21.9   purposes the first $75,000 of market value has a class rate 
 21.10  of 1.4 1.25 percent, and the market value that exceeds $75,000 
 21.11  has a class rate of 2.5 2.2 percent, and (ii) manufactured home 
 21.12  parks assessed under clause (5) have a class rate of two 
 21.13  percent, and (iii) property described in paragraph (d), clause 
 21.14  (4), has the same class rate as the rate applicable to the first 
 21.15  tier of class 4bb nonhomestead residential real estate under 
 21.16  paragraph (c).  
 21.17     (e) Class 4d property is qualifying low-income rental 
 21.18  housing certified to the assessor by the housing finance agency 
 21.19  under sections 273.126 and 462A.071.  Class 4d includes land in 
 21.20  proportion to the total market value of the building that is 
 21.21  qualifying low-income rental housing.  For all properties 
 21.22  qualifying as class 4d, the market value determined by the 
 21.23  assessor must be based on the normal approach to value using 
 21.24  normal unrestricted rents. 
 21.25     Class 4d property has a class rate of one percent of market 
 21.26  value.  
 21.27     (f) Class 4e property consists of the residential portion 
 21.28  of any structure located within a city that was converted from 
 21.29  nonresidential use to residential use, provided that: 
 21.30     (1) the structure had formerly been used as a warehouse; 
 21.31     (2) the structure was originally constructed prior to 1940; 
 21.32     (3) the conversion was done after December 31, 1995, but 
 21.33  before January 1, 2003; and 
 21.34     (4) the conversion involved an investment of at least 
 21.35  $25,000 per residential unit. 
 21.36     Class 4e property has a class rate of 2.3 percent, provided 
 22.1   that a structure is eligible for class 4e classification only in 
 22.2   the 12 assessment years immediately following the conversion. 
 22.3      Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 22.4   273.13, subdivision 31, is amended to read: 
 22.5      Subd. 31.  [CLASS 5.] Class 5 property includes:  
 22.6      (1) tools, implements, and machinery of an electric 
 22.7   generating, transmission, or distribution system or a pipeline 
 22.8   system transporting or distributing water, gas, crude oil, or 
 22.9   petroleum products or mains and pipes used in the distribution 
 22.10  of steam or hot or chilled water for heating or cooling 
 22.11  buildings, which are fixtures; 
 22.12     (2) unmined iron ore and low-grade iron-bearing formations 
 22.13  as defined in section 273.14; and 
 22.14     (3) all other property not otherwise classified. 
 22.15     Class 5 property has a class rate of 4.0 3.5 percent of 
 22.16  market value for taxes payable in 1998 and thereafter. 
 22.17     Sec. 13.  Minnesota Statutes 1997 Supplement, section 
 22.18  273.1382, subdivision 1, is amended to read: 
 22.19     Subdivision 1.  [EDUCATION HOMESTEAD CREDIT.] Each year, 
 22.20  beginning with property taxes payable in 1998, the respective 
 22.21  county auditors shall determine the initial tax rate for each 
 22.22  school district for the general education levy certified under 
 22.23  section 124A.23, subdivision 2 or 3.  That rate plus the school 
 22.24  district's education homestead credit tax rate adjustment under 
 22.25  section 275.08, subdivision 1e, shall be the general education 
 22.26  homestead credit local tax rate for the district.  The auditor 
 22.27  shall then determine a general education homestead credit for 
 22.28  each homestead within the county equal to 32 68 percent for 
 22.29  taxes payable in 1999 and 69 percent for taxes payable in 2000 
 22.30  and thereafter of the general education homestead credit local 
 22.31  tax rate times the net tax capacity of the homestead for the 
 22.32  taxes payable year.  The amount of general education homestead 
 22.33  credit for a homestead may not exceed $225 $320 for taxes 
 22.34  payable in 1999 and $335 for taxes payable in 2000 and 
 22.35  thereafter.  In the case of an agricultural homestead, only the 
 22.36  net tax capacity of the house, garage, and surrounding one acre 
 23.1   of land shall be used in determining the property's education 
 23.2   homestead credit. 
 23.3      Sec. 14.  Minnesota Statutes 1997 Supplement, section 
 23.4   273.1382, is amended by adding a subdivision to read: 
 23.5      Subd. 1a.  [CREDIT PERCENTAGE REDUCTION.] If the general 
 23.6   education levy target for fiscal year 2000 or 2001 is increased 
 23.7   by another law enacted prior to the 1999 legislative session, 
 23.8   the commissioner of revenue shall adjust the percentage rates of 
 23.9   the education homestead credit for the corresponding taxes 
 23.10  payable year by multiplying the percentage rate by the ratio of 
 23.11  the prior general education levy target to the current general 
 23.12  education levy target.  If an adjustment is made under this 
 23.13  section for fiscal year 2001, the adjusted rate shall remain in 
 23.14  effect for future years until amended by subsequent legislation. 
 23.15     Sec. 15.  Minnesota Statutes 1996, section 273.1398, 
 23.16  subdivision 1a, is amended to read: 
 23.17     Subd. 1a.  [TAX BASE DIFFERENTIAL.] (a) For aids payable in 
 23.18  1997 2000, for purposes of computing the fiscal disparity 
 23.19  adjustment only, the tax base differential is 0.25 0.2 percent 
 23.20  of the assessment year 1995 1998 taxable market value of class 
 23.21  4c noncommercial seasonal recreational residential 3 
 23.22  commercial-industrial property up to $72,000 over $150,000.  
 23.23     (b) For aids payable in 1998, the tax base differential is 
 23.24  0.25 percent of the assessment year 1996 taxable market value of 
 23.25  class 4c noncommercial seasonal recreational residential 
 23.26  property up to $72,000. 
 23.27     Sec. 16.  Minnesota Statutes 1996, section 273.1398, 
 23.28  subdivision 2, is amended to read: 
 23.29     Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 
 23.30  Homestead and agricultural credit aid for each unique taxing 
 23.31  jurisdiction equals the product of (1) the homestead and 
 23.32  agricultural credit aid base, and (2) the growth adjustment 
 23.33  factor, plus the net tax capacity adjustment and the fiscal 
 23.34  disparity adjustment.  For aid payable in 2000, each county 
 23.35  shall have its homestead and agricultural credit aid permanently 
 23.36  reduced by an amount equal to one-third of the additional amount 
 24.1   received by the county under section 477A.03, subdivision 2, 
 24.2   paragraph (c), clause (ii). 
 24.3      Sec. 17.  Minnesota Statutes 1996, section 273.1398, 
 24.4   subdivision 4, is amended to read: 
 24.5      Subd. 4.  [DISPARITY REDUCTION CREDIT.] (a) Beginning with 
 24.6   taxes payable in 1989, class 4a, class 3a, and class 3b property 
 24.7   qualifies for a disparity reduction credit if:  (1) the property 
 24.8   is located in a border city that has an enterprise zone 
 24.9   designated pursuant to section 469.168, subdivision 4; (2) the 
 24.10  property is located in a city with a population greater than 
 24.11  2,500 and less than 35,000 according to the 1980 decennial 
 24.12  census; (3) the city is adjacent to a city in another state or 
 24.13  immediately adjacent to a city adjacent to a city in another 
 24.14  state; and (4) the adjacent city in the other state has a 
 24.15  population of greater than 5,000 and less than 75,000.  
 24.16     (b) The credit is an amount sufficient to reduce (i) the 
 24.17  taxes levied on class 4a property to 2.3 percent of the 
 24.18  property's market value and (ii) the tax on class 3a and class 
 24.19  3b property to 3.3 2.3 percent of market value.  
 24.20     (c) The county auditor shall annually certify the costs of 
 24.21  the credits to the department of revenue.  The department shall 
 24.22  reimburse local governments for the property taxes foregone as 
 24.23  the result of the credits in proportion to their total levies. 
 24.24     Sec. 18.  Minnesota Statutes 1997 Supplement, section 
 24.25  290A.03, subdivision 11, is amended to read: 
 24.26     Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
 24.27  constituting property taxes" means 18 19 percent of the gross 
 24.28  rent actually paid in cash, or its equivalent, or the portion of 
 24.29  rent paid in lieu of property taxes, in any calendar year by a 
 24.30  claimant for the right of occupancy of the claimant's Minnesota 
 24.31  homestead in the calendar year, and which rent constitutes the 
 24.32  basis, in the succeeding calendar year of a claim for relief 
 24.33  under this chapter by the claimant.  
 24.34     Sec. 19.  Minnesota Statutes 1997 Supplement, section 
 24.35  290A.03, subdivision 13, is amended to read: 
 24.36     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 25.1   payable" means the property tax exclusive of special 
 25.2   assessments, penalties, and interest payable on a claimant's 
 25.3   homestead after deductions made under sections 273.135, 
 25.4   273.1382, 273.1391, 273.42, subdivision 2, and any other state 
 25.5   paid property tax credits in any calendar year.  In the case of 
 25.6   a claimant who makes ground lease payments, "property taxes 
 25.7   payable" includes the amount of the payments directly 
 25.8   attributable to the property taxes assessed against the parcel 
 25.9   on which the house is located.  No apportionment or reduction of 
 25.10  the "property taxes payable" shall be required for the use of a 
 25.11  portion of the claimant's homestead for a business purpose if 
 25.12  the claimant does not deduct any business depreciation expenses 
 25.13  for the use of a portion of the homestead in the determination 
 25.14  of federal adjusted gross income.  For homesteads which are 
 25.15  manufactured homes as defined in section 273.125, subdivision 8, 
 25.16  and for homesteads which are park trailers taxed as manufactured 
 25.17  homes under section 168.012, subdivision 9, "property taxes 
 25.18  payable" shall also include 18 19 percent of the gross rent paid 
 25.19  in the preceding year for the site on which the homestead is 
 25.20  located.  When a homestead is owned by two or more persons as 
 25.21  joint tenants or tenants in common, such tenants shall determine 
 25.22  between them which tenant may claim the property taxes payable 
 25.23  on the homestead.  If they are unable to agree, the matter shall 
 25.24  be referred to the commissioner of revenue whose decision shall 
 25.25  be final.  Property taxes are considered payable in the year 
 25.26  prescribed by law for payment of the taxes. 
 25.27     In the case of a claim relating to "property taxes 
 25.28  payable," the claimant must have owned and occupied the 
 25.29  homestead on January 2 of the year in which the tax is payable 
 25.30  and (i) the property must have been classified as homestead 
 25.31  property pursuant to section 273.124, on or before December 15 
 25.32  of the assessment year to which the "property taxes payable" 
 25.33  relate; or (ii) the claimant must provide documentation from the 
 25.34  local assessor that application for homestead classification has 
 25.35  been made on or before December 15 of the year in which the 
 25.36  "property taxes payable" were payable and that the assessor has 
 26.1   approved the application. 
 26.2      Sec. 20.  Minnesota Statutes 1996, section 477A.0122, 
 26.3   subdivision 6, is amended to read: 
 26.4      Subd. 6.  [REPORT.] (a) On or before March 15 of the year 
 26.5   following the year in which the distributions under this section 
 26.6   are received, each county shall file with the commissioner of 
 26.7   revenue and commissioner of human services a report on prior 
 26.8   year expenditures for out-of-home placement and family 
 26.9   preservation, including expenditures under this section.  For 
 26.10  the human services programs specified in this section, the 
 26.11  commissioner of revenue and commissioner of human services, in 
 26.12  consultation with representatives of county governments, shall 
 26.13  make a recommendation to the 1999 legislature as to which 
 26.14  current reporting requirements imposed on county governments, if 
 26.15  any, may be eliminated, replaced, or consolidated on the report 
 26.16  established by this section.  For aid payable in calendar year 
 26.17  2000 and thereafter, each county shall provide information on 
 26.18  the amount of state aid, local property tax revenue, and federal 
 26.19  aid expended by that county on the programs specified in this 
 26.20  section using the consolidated financial report recommended by 
 26.21  the commissioner of revenue and commissioner of human services 
 26.22  under this subdivision. 
 26.23     (b) The commissioner of revenue and the commissioner of 
 26.24  human services, in consultation with representatives of county 
 26.25  governments and children's advocacy representatives, shall study 
 26.26  the current formula used in distributing aid under this section 
 26.27  and factors related to out-of-home placement and family 
 26.28  preservation expenditures and make a report to the house and 
 26.29  senate tax committees by February 1, 1999.  The report shall 
 26.30  include a recommendation for a new formula to be used in 
 26.31  distributing the aid under this section, beginning with aids 
 26.32  payable in 2000. 
 26.33     Sec. 21.  [REPEALER.] 
 26.34     Minnesota Statutes 1997 Supplement, section 273.13, 
 26.35  subdivision 32, is repealed. 
 26.36     Sec. 22.  [APPROPRIATIONS; FUND TRANSFERS.] 
 27.1      Subdivision 1.  [GENERAL FUND TRANSFER.] The sum of 
 27.2   $12,027,000 is transferred from the property tax reform account 
 27.3   to the general fund on June 30, 1999. 
 27.4      Subd. 2.  [EDUCATION LEVY REDUCTION APPROPRIATION.] In 
 27.5   addition to any amount appropriated by other law, $51,300,000 is 
 27.6   appropriated to the commissioner of children, families, and 
 27.7   learning in fiscal year 2000 and $57,000,000 in fiscal year 2001 
 27.8   and thereafter to fund a reduction in the statewide general 
 27.9   education property tax levy.  The fiscal year 2001 appropriation 
 27.10  includes $5,700,000 for 2000 and $51,300,000 for 2001.  The 
 27.11  amounts appropriated for fiscal years 2000 and 2001 are from the 
 27.12  property tax reform account; subsequent appropriations are from 
 27.13  the general fund. 
 27.14     Subd. 3.  [REFERENDUM EQUALIZATION AID.] For fiscal year 
 27.15  2000, $6,300,000 and for fiscal year 2001, $7,000,000 is 
 27.16  appropriated from the property tax reform account to the 
 27.17  commissioner of children, families, and learning to fund the 
 27.18  additional costs of referendum equalization aid under section 6. 
 27.19     Subd. 4.  [INTEGRATION AID.] For fiscal year 2000, 
 27.20  $6,300,000 and for fiscal year 2001, $12,400,000 is appropriated 
 27.21  to the commissioner of children, families, and learning from the 
 27.22  property tax reform account to fund the increase in integration 
 27.23  aid under section 5. 
 27.24     Subd. 5.  [ALTERNATIVE FACILITIES AID.] $2,700,000 for 
 27.25  fiscal year 2000 and $3,000,000 for fiscal year 2001 is 
 27.26  appropriated from the property tax reform account to the 
 27.27  commissioner of children, families, and learning to finance the 
 27.28  increase in alternative facilities aid under sections 2 and 3. 
 27.29     Subd. 6.  [EDUCATION HOMESTEAD CREDIT INCREASE.] The 
 27.30  amounts necessary to make the increased payments attributable to 
 27.31  the increases in education homestead credit percentage rates and 
 27.32  maximums under sections 13 and 14 are transferred from the 
 27.33  property tax reform account to the general fund in fiscal years 
 27.34  2000 and 2001. 
 27.35     Subd. 7.  [FISCAL DISPARITIES HACA.] The amount necessary 
 27.36  to fund the fiscal year 2001 cost of fiscal disparities HACA 
 28.1   under section 15 is transferred from the property tax reform 
 28.2   account to the general fund for fiscal year 2001. 
 28.3      Subd. 8.  [PROPERTY TAX REFUND INCREASE.] The additional 
 28.4   amount necessary to fund the changes in the property tax refund 
 28.5   under sections 18 and 19 for fiscal years 2000 and 2001 is 
 28.6   transferred from the property tax reform account to the general 
 28.7   fund in each of those fiscal years. 
 28.8      Subd. 9.  [FAMILY PRESERVATION AID INCREASE.] The sum of 
 28.9   $20,000,000 is transferred from the property tax reform account 
 28.10  to the general fund in fiscal year 2001 to fund a portion of the 
 28.11  increase in family preservation aid under article 4, section 8, 
 28.12  paragraph (c)(ii). 
 28.13     Subd. 10.  [LOCAL GOVERNMENT AID INCREASE.] The sum of 
 28.14  $3,000,000 in each of fiscal years 2000 and 2001 is transferred 
 28.15  from the property tax reform account to the general fund to 
 28.16  cover the additional local government aid appropriation provided 
 28.17  in article 4, section 8, paragraph (d). 
 28.18     Subd. 11.  [EXISTING LOW-INCOME HOUSING AID.] The amount 
 28.19  necessary to fund the cost of the existing low-income housing 
 28.20  aid under article 4, section 10, is transferred from the 
 28.21  property tax reform account to the general fund in each of 
 28.22  fiscal years 2000 and 2001. 
 28.23     Subd. 12.  [GENERAL FUND TRANSFER.] In the event that there 
 28.24  are insufficient funds within the property tax reform account to 
 28.25  fund any of the payments or transfers provided under this 
 28.26  section, sufficient funds are appropriated from the general fund 
 28.27  to the property tax reform account to fully fund the 
 28.28  appropriation or transfer in fiscal year 2000 or 2001. 
 28.29     Sec. 23.  [EFFECTIVE DATES.] 
 28.30     Sections 1 to 7 are effective for revenue for fiscal year 
 28.31  2000.  Sections 8 to 14 and 17 are effective beginning with 
 28.32  taxes payable in 1999.  Sections 15 and 16 are effective 
 28.33  beginning with aids payable in 2000.  Sections 18 and 19 are 
 28.34  effective beginning with rents paid in 1998.  Sections 20 to 22 
 28.35  are effective the day following final enactment. 
 28.36                             ARTICLE 3 
 29.1           PROPERTY TAXES, LOCAL BONDING AND LEVY AUTHORITY 
 29.2      Section 1.  Minnesota Statutes 1997 Supplement, section 
 29.3   272.02, subdivision 1, is amended to read: 
 29.4      Subdivision 1.  All property described in this section to 
 29.5   the extent herein limited shall be exempt from taxation: 
 29.6      (1) All public burying grounds. 
 29.7      (2) All public schoolhouses. 
 29.8      (3) All public hospitals. 
 29.9      (4) All academies, colleges, and universities, and all 
 29.10  seminaries of learning. 
 29.11     (5) All churches, church property, and houses of worship. 
 29.12     (6) Institutions of purely public charity except parcels of 
 29.13  property containing structures and the structures described in 
 29.14  section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
 29.15  and (3), or paragraph (d) (e), other than those that qualify for 
 29.16  exemption under clause (25). 
 29.17     (7) All public property exclusively used for any public 
 29.18  purpose. 
 29.19     (8) Except for the taxable personal property enumerated 
 29.20  below, all personal property and the property described in 
 29.21  section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
 29.22  exempt.  
 29.23     The following personal property shall be taxable:  
 29.24     (a) personal property which is part of an electric 
 29.25  generating, transmission, or distribution system or a pipeline 
 29.26  system transporting or distributing water, gas, crude oil, or 
 29.27  petroleum products or mains and pipes used in the distribution 
 29.28  of steam or hot or chilled water for heating or cooling 
 29.29  buildings and structures; 
 29.30     (b) railroad docks and wharves which are part of the 
 29.31  operating property of a railroad company as defined in section 
 29.32  270.80; 
 29.33     (c) personal property defined in section 272.03, 
 29.34  subdivision 2, clause (3); 
 29.35     (d) leasehold or other personal property interests which 
 29.36  are taxed pursuant to section 272.01, subdivision 2; 273.124, 
 30.1   subdivision 7; or 273.19, subdivision 1; or any other law 
 30.2   providing the property is taxable as if the lessee or user were 
 30.3   the fee owner; 
 30.4      (e) manufactured homes and sectional structures, including 
 30.5   storage sheds, decks, and similar removable improvements 
 30.6   constructed on the site of a manufactured home, sectional 
 30.7   structure, park trailer or travel trailer as provided in section 
 30.8   273.125, subdivision 8, paragraph (f); and 
 30.9      (f) flight property as defined in section 270.071.  
 30.10     (9) Personal property used primarily for the abatement and 
 30.11  control of air, water, or land pollution to the extent that it 
 30.12  is so used, and real property which is used primarily for 
 30.13  abatement and control of air, water, or land pollution as part 
 30.14  of an agricultural operation, as a part of a centralized 
 30.15  treatment and recovery facility operating under a permit issued 
 30.16  by the Minnesota pollution control agency pursuant to chapters 
 30.17  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
 30.18  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
 30.19  and for the treatment, recovery, and stabilization of metals, 
 30.20  oils, chemicals, water, sludges, or inorganic materials from 
 30.21  hazardous industrial wastes, or as part of an electric 
 30.22  generation system.  For purposes of this clause, personal 
 30.23  property includes ponderous machinery and equipment used in a 
 30.24  business or production activity that at common law is considered 
 30.25  real property. 
 30.26     Any taxpayer requesting exemption of all or a portion of 
 30.27  any real property or any equipment or device, or part thereof, 
 30.28  operated primarily for the control or abatement of air or water 
 30.29  pollution shall file an application with the commissioner of 
 30.30  revenue.  The equipment or device shall meet standards, rules, 
 30.31  or criteria prescribed by the Minnesota pollution control 
 30.32  agency, and must be installed or operated in accordance with a 
 30.33  permit or order issued by that agency.  The Minnesota pollution 
 30.34  control agency shall upon request of the commissioner furnish 
 30.35  information or advice to the commissioner.  On determining that 
 30.36  property qualifies for exemption, the commissioner shall issue 
 31.1   an order exempting the property from taxation.  The equipment or 
 31.2   device shall continue to be exempt from taxation as long as the 
 31.3   permit issued by the Minnesota pollution control agency remains 
 31.4   in effect. 
 31.5      (10) Wetlands.  For purposes of this subdivision, 
 31.6   "wetlands" means:  (i) land described in section 103G.005, 
 31.7   subdivision 15a; (ii) land which is mostly under water, produces 
 31.8   little if any income, and has no use except for wildlife or 
 31.9   water conservation purposes, provided it is preserved in its 
 31.10  natural condition and drainage of it would be legal, feasible, 
 31.11  and economically practical for the production of livestock, 
 31.12  dairy animals, poultry, fruit, vegetables, forage and grains, 
 31.13  except wild rice; or (iii) land in a wetland preservation area 
 31.14  under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
 31.15  and (ii) include adjacent land which is not suitable for 
 31.16  agricultural purposes due to the presence of the wetlands, but 
 31.17  do not include woody swamps containing shrubs or trees, wet 
 31.18  meadows, meandered water, streams, rivers, and floodplains or 
 31.19  river bottoms.  Exemption of wetlands from taxation pursuant to 
 31.20  this section shall not grant the public any additional or 
 31.21  greater right of access to the wetlands or diminish any right of 
 31.22  ownership to the wetlands. 
 31.23     (11) Native prairie.  The commissioner of the department of 
 31.24  natural resources shall determine lands in the state which are 
 31.25  native prairie and shall notify the county assessor of each 
 31.26  county in which the lands are located.  Pasture land used for 
 31.27  livestock grazing purposes shall not be considered native 
 31.28  prairie for the purposes of this clause.  Upon receipt of an 
 31.29  application for the exemption provided in this clause for lands 
 31.30  for which the assessor has no determination from the 
 31.31  commissioner of natural resources, the assessor shall refer the 
 31.32  application to the commissioner of natural resources who shall 
 31.33  determine within 30 days whether the land is native prairie and 
 31.34  notify the county assessor of the decision.  Exemption of native 
 31.35  prairie pursuant to this clause shall not grant the public any 
 31.36  additional or greater right of access to the native prairie or 
 32.1   diminish any right of ownership to it. 
 32.2      (12) Property used in a continuous program to provide 
 32.3   emergency shelter for victims of domestic abuse, provided the 
 32.4   organization that owns and sponsors the shelter is exempt from 
 32.5   federal income taxation pursuant to section 501(c)(3) of the 
 32.6   Internal Revenue Code of 1986, as amended through December 31, 
 32.7   1992, notwithstanding the fact that the sponsoring organization 
 32.8   receives funding under section 8 of the United States Housing 
 32.9   Act of 1937, as amended. 
 32.10     (13) If approved by the governing body of the municipality 
 32.11  in which the property is located, property not exceeding one 
 32.12  acre which is owned and operated by any senior citizen group or 
 32.13  association of groups that in general limits membership to 
 32.14  persons age 55 or older and is organized and operated 
 32.15  exclusively for pleasure, recreation, and other nonprofit 
 32.16  purposes, no part of the net earnings of which inures to the 
 32.17  benefit of any private shareholders; provided the property is 
 32.18  used primarily as a clubhouse, meeting facility, or recreational 
 32.19  facility by the group or association and the property is not 
 32.20  used for residential purposes on either a temporary or permanent 
 32.21  basis. 
 32.22     (14) To the extent provided by section 295.44, real and 
 32.23  personal property used or to be used primarily for the 
 32.24  production of hydroelectric or hydromechanical power on a site 
 32.25  owned by the federal government, the state, or a local 
 32.26  governmental unit which is developed and operated pursuant to 
 32.27  the provisions of section 103G.535. 
 32.28     (15) If approved by the governing body of the municipality 
 32.29  in which the property is located, and if construction is 
 32.30  commenced after June 30, 1983:  
 32.31     (a) a "direct satellite broadcasting facility" operated by 
 32.32  a corporation licensed by the federal communications commission 
 32.33  to provide direct satellite broadcasting services using direct 
 32.34  broadcast satellites operating in the 12-ghz. band; and 
 32.35     (b) a "fixed satellite regional or national program service 
 32.36  facility" operated by a corporation licensed by the federal 
 33.1   communications commission to provide fixed satellite-transmitted 
 33.2   regularly scheduled broadcasting services using satellites 
 33.3   operating in the 6-ghz. band. 
 33.4   An exemption provided by clause (15) shall apply for a period 
 33.5   not to exceed five years.  When the facility no longer qualifies 
 33.6   for exemption, it shall be placed on the assessment rolls as 
 33.7   provided in subdivision 4.  Before approving a tax exemption 
 33.8   pursuant to this paragraph, the governing body of the 
 33.9   municipality shall provide an opportunity to the members of the 
 33.10  county board of commissioners of the county in which the 
 33.11  facility is proposed to be located and the members of the school 
 33.12  board of the school district in which the facility is proposed 
 33.13  to be located to meet with the governing body.  The governing 
 33.14  body shall present to the members of those boards its estimate 
 33.15  of the fiscal impact of the proposed property tax exemption.  
 33.16  The tax exemption shall not be approved by the governing body 
 33.17  until the county board of commissioners has presented its 
 33.18  written comment on the proposal to the governing body or 30 days 
 33.19  have passed from the date of the transmittal by the governing 
 33.20  body to the board of the information on the fiscal impact, 
 33.21  whichever occurs first. 
 33.22     (16) Real and personal property owned and operated by a 
 33.23  private, nonprofit corporation exempt from federal income 
 33.24  taxation pursuant to United States Code, title 26, section 
 33.25  501(c)(3), primarily used in the generation and distribution of 
 33.26  hot water for heating buildings and structures.  
 33.27     (17) Notwithstanding section 273.19, state lands that are 
 33.28  leased from the department of natural resources under section 
 33.29  92.46. 
 33.30     (18) Electric power distribution lines and their 
 33.31  attachments and appurtenances, that are used primarily for 
 33.32  supplying electricity to farmers at retail.  
 33.33     (19) Transitional housing facilities.  "Transitional 
 33.34  housing facility" means a facility that meets the following 
 33.35  requirements.  (i) It provides temporary housing to individuals, 
 33.36  couples, or families.  (ii) It has the purpose of reuniting 
 34.1   families and enabling parents or individuals to obtain 
 34.2   self-sufficiency, advance their education, get job training, or 
 34.3   become employed in jobs that provide a living wage.  (iii) It 
 34.4   provides support services such as child care, work readiness 
 34.5   training, and career development counseling; and a 
 34.6   self-sufficiency program with periodic monitoring of each 
 34.7   resident's progress in completing the program's goals.  (iv) It 
 34.8   provides services to a resident of the facility for at least 
 34.9   three months but no longer than three years, except residents 
 34.10  enrolled in an educational or vocational institution or job 
 34.11  training program.  These residents may receive services during 
 34.12  the time they are enrolled but in no event longer than four 
 34.13  years.  (v) It is owned and operated or under lease from a unit 
 34.14  of government or governmental agency under a property 
 34.15  disposition program and operated by one or more organizations 
 34.16  exempt from federal income tax under section 501(c)(3) of the 
 34.17  Internal Revenue Code of 1986, as amended through December 31, 
 34.18  1992.  This exemption applies notwithstanding the fact that the 
 34.19  sponsoring organization receives financing by a direct federal 
 34.20  loan or federally insured loan or a loan made by the Minnesota 
 34.21  housing finance agency under the provisions of either Title II 
 34.22  of the National Housing Act or the Minnesota housing finance 
 34.23  agency law of 1971 or rules promulgated by the agency pursuant 
 34.24  to it, and notwithstanding the fact that the sponsoring 
 34.25  organization receives funding under Section 8 of the United 
 34.26  States Housing Act of 1937, as amended. 
 34.27     (20) Real and personal property, including leasehold or 
 34.28  other personal property interests, owned and operated by a 
 34.29  corporation if more than 50 percent of the total voting power of 
 34.30  the stock of the corporation is owned collectively by:  (i) the 
 34.31  board of regents of the University of Minnesota, (ii) the 
 34.32  University of Minnesota Foundation, an organization exempt from 
 34.33  federal income taxation under section 501(c)(3) of the Internal 
 34.34  Revenue Code of 1986, as amended through December 31, 1992, and 
 34.35  (iii) a corporation organized under chapter 317A, which by its 
 34.36  articles of incorporation is prohibited from providing pecuniary 
 35.1   gain to any person or entity other than the regents of the 
 35.2   University of Minnesota; which property is used primarily to 
 35.3   manage or provide goods, services, or facilities utilizing or 
 35.4   relating to large-scale advanced scientific computing resources 
 35.5   to the regents of the University of Minnesota and others. 
 35.6      (21)(a) Small scale wind energy conversion systems 
 35.7   installed after January 1, 1991, and used as an electric power 
 35.8   source are exempt. 
 35.9      "Small scale wind energy conversion systems" are wind 
 35.10  energy conversion systems, as defined in section 216C.06, 
 35.11  subdivision 12, including the foundation or support pad, which 
 35.12  are (i) used as an electric power source; (ii) located within 
 35.13  one county and owned by the same owner; and (iii) produce two 
 35.14  megawatts or less of electricity as measured by nameplate 
 35.15  ratings. 
 35.16     (b) Medium scale wind energy conversion systems installed 
 35.17  after January 1, 1991, are treated as follows:  (i) the 
 35.18  foundation and support pad are taxable; (ii) the associated 
 35.19  supporting and protective structures are exempt for the first 
 35.20  five assessment years after they have been constructed, and 
 35.21  thereafter, 30 percent of the market value of the associated 
 35.22  supporting and protective structures are taxable; and (iii) the 
 35.23  turbines, blades, transformers, and its related equipment, are 
 35.24  exempt.  "Medium scale wind energy conversion systems" are wind 
 35.25  energy conversion systems as defined in section 216C.06, 
 35.26  subdivision 12, including the foundation or support pad, which 
 35.27  are:  (i) used as an electric power source; (ii) located within 
 35.28  one county and owned by the same owner; and (iii) produce more 
 35.29  than two but equal to or less than 12 megawatts of energy as 
 35.30  measured by nameplate ratings. 
 35.31     (c) Large scale wind energy conversion systems installed 
 35.32  after January 1, 1991, are treated as follows:  25 percent of 
 35.33  the market value of all property is taxable, including (i) the 
 35.34  foundation and support pad; (ii) the associated supporting and 
 35.35  protective structures; and (iii) the turbines, blades, 
 35.36  transformers, and its related equipment.  "Large scale wind 
 36.1   energy conversion systems" are wind energy conversion systems as 
 36.2   defined in section 216C.06, subdivision 12, including the 
 36.3   foundation or support pad, which are:  (i) used as an electric 
 36.4   power source; and (ii) produce more than 12 megawatts of energy 
 36.5   as measured by nameplate ratings. 
 36.6      (22) Containment tanks, cache basins, and that portion of 
 36.7   the structure needed for the containment facility used to 
 36.8   confine agricultural chemicals as defined in section 18D.01, 
 36.9   subdivision 3, as required by the commissioner of agriculture 
 36.10  under chapter 18B or 18C. 
 36.11     (23) Photovoltaic devices, as defined in section 216C.06, 
 36.12  subdivision 13, installed after January 1, 1992, and used to 
 36.13  produce or store electric power. 
 36.14     (24) Real and personal property owned and operated by a 
 36.15  private, nonprofit corporation exempt from federal income 
 36.16  taxation pursuant to United States Code, title 26, section 
 36.17  501(c)(3), primarily used for an ice arena or ice rink, and used 
 36.18  primarily for youth and high school programs. 
 36.19     (25) A structure that is situated on real property that is 
 36.20  used for: 
 36.21     (i) housing for the elderly or for low- and moderate-income 
 36.22  families as defined in Title II of the National Housing Act, as 
 36.23  amended through December 31, 1990, and funded by a direct 
 36.24  federal loan or federally insured loan made pursuant to Title II 
 36.25  of the act; or 
 36.26     (ii) housing lower income families or elderly or 
 36.27  handicapped persons, as defined in Section 8 of the United 
 36.28  States Housing Act of 1937, as amended. 
 36.29     In order for a structure to be exempt under (i) or (ii), it 
 36.30  must also meet each of the following criteria: 
 36.31     (A) is owned by an entity which is operated as a nonprofit 
 36.32  corporation organized under chapter 317A; 
 36.33     (B) is owned by an entity which has not entered into a 
 36.34  housing assistance payments contract under Section 8 of the 
 36.35  United States Housing Act of 1937, or, if the entity which owns 
 36.36  the structure has entered into a housing assistance payments 
 37.1   contract under Section 8 of the United States Housing Act of 
 37.2   1937, the contract provides assistance for less than 90 percent 
 37.3   of the dwelling units in the structure, excluding dwelling units 
 37.4   intended for management or maintenance personnel; 
 37.5      (C) operates an on-site congregate dining program in which 
 37.6   participation by residents is mandatory, and provides assisted 
 37.7   living or similar social and physical support services for 
 37.8   residents; and 
 37.9      (D) was not assessed and did not pay tax under chapter 273 
 37.10  prior to the 1991 levy, while meeting the other conditions of 
 37.11  this clause. 
 37.12     An exemption under this clause remains in effect for taxes 
 37.13  levied in each year or partial year of the term of its permanent 
 37.14  financing. 
 37.15     (26) Real and personal property that is located in the 
 37.16  Superior National Forest, and owned or leased and operated by a 
 37.17  nonprofit organization that is exempt from federal income 
 37.18  taxation under section 501(c)(3) of the Internal Revenue Code of 
 37.19  1986, as amended through December 31, 1992, and primarily used 
 37.20  to provide recreational opportunities for disabled veterans and 
 37.21  their families. 
 37.22     (27) Manure pits and appurtenances, which may include 
 37.23  slatted floors and pipes, installed or operated in accordance 
 37.24  with a permit, order, or certificate of compliance issued by the 
 37.25  Minnesota pollution control agency.  The exemption shall 
 37.26  continue for as long as the permit, order, or certificate issued 
 37.27  by the Minnesota pollution control agency remains in effect. 
 37.28     (28) Notwithstanding clause (8), item (a), attached 
 37.29  machinery and other personal property which is part of a 
 37.30  facility containing a cogeneration system as described in 
 37.31  section 216B.166, subdivision 2, paragraph (a), if the 
 37.32  cogeneration system has met the following criteria:  (i) the 
 37.33  system utilizes natural gas as a primary fuel and the 
 37.34  cogenerated steam initially replaces steam generated from 
 37.35  existing thermal boilers utilizing coal; (ii) the facility 
 37.36  developer is selected as a result of a procurement process 
 38.1   ordered by the public utilities commission; and (iii) 
 38.2   construction of the facility is commenced after July 1, 1994, 
 38.3   and before July 1, 1997. 
 38.4      (29) Real property acquired by a home rule charter city, 
 38.5   statutory city, county, town, or school district under a lease 
 38.6   purchase agreement or an installment purchase contract during 
 38.7   the term of the lease purchase agreement as long as and to the 
 38.8   extent that the property is used by the city, county, town, or 
 38.9   school district and devoted to a public use and to the extent it 
 38.10  is not subleased to any private individual, entity, association, 
 38.11  or corporation in connection with a business or enterprise 
 38.12  operated for profit. 
 38.13     (30) Property owned by a nonprofit charitable organization 
 38.14  that qualifies for tax exemption under section 501(c)(3) of the 
 38.15  Internal Revenue Code of 1986, as amended through December 31, 
 38.16  1997, that is intended to be used as a business incubator in a 
 38.17  high-unemployment county but is not occupied on the assessment 
 38.18  date.  As used in this clause, a "business incubator" is a 
 38.19  facility used for the development of nonretail businesses, 
 38.20  offering access to equipment, space, services, and advice to the 
 38.21  tenant businesses, for the purpose of encouraging economic 
 38.22  development, diversification, and job creation in the area 
 38.23  served by the organization, and "high-unemployment county" is a 
 38.24  county that had an average annual unemployment rate of 7.9 
 38.25  percent or greater in 1997.  Property that qualifies for the 
 38.26  exemption under this clause is limited to no more than two 
 38.27  contiguous parcels and structures that do not exceed in the 
 38.28  aggregate 40,000 square feet.  This exemption expires after 
 38.29  taxes payable in 2005. 
 38.30     (31) Notwithstanding any other law to the contrary, real 
 38.31  property that meets the following criteria is exempt: 
 38.32     (i) constitutes a wastewater treatment system (a) 
 38.33  constructed by a municipality using public funds, (b) operates 
 38.34  under a State Disposal System Permit issued by the Minnesota 
 38.35  pollution control agency pursuant to chapters 115 and 116 and 
 38.36  Minnesota Rules, chapter 700l, and (c) applies its effluent to 
 39.1   land used as part of an agricultural operation; 
 39.2      (ii) is located within a municipality of a population of 
 39.3   less than 10,000; 
 39.4      (iii) is used for treatment of effluent from a private 
 39.5   potato processing facility; and 
 39.6      (iv) is owned by a municipality and operated by a private 
 39.7   entity under agreement with that municipality. 
 39.8      Sec. 2.  Minnesota Statutes 1996, section 272.0211, 
 39.9   subdivision 1, is amended to read: 
 39.10     Subdivision 1.  [EFFICIENCY DETERMINATION AND 
 39.11  CERTIFICATION.] An owner or operator of a new or existing 
 39.12  electric power generation facility, excluding wind energy 
 39.13  conversion systems, may apply to the commissioner of revenue for 
 39.14  a market value exclusion on the property as provided for in this 
 39.15  section.  This exclusion shall apply only to the market value of 
 39.16  the equipment of the facility, and shall not apply to the 
 39.17  structures and the land upon which the facility is located.  The 
 39.18  commissioner of revenue shall prescribe the forms and procedures 
 39.19  for this application.  Upon receiving the application, the 
 39.20  commissioner of revenue shall request the commissioner of public 
 39.21  service to make a determination of the efficiency of the 
 39.22  applicant's electric power generation facility.  In calculating 
 39.23  the efficiency of a facility, the commissioner of public service 
 39.24  shall use a definition of efficiency which calculates efficiency 
 39.25  as the sum of: 
 39.26     (1) the useful electrical power output; plus 
 39.27     (2) the useful thermal energy output; plus 
 39.28     (3) the fuel energy of the useful chemical products, 
 39.29  all divided by the total energy input to the facility, expressed 
 39.30  as a percentage.  The commissioner must include in this formula 
 39.31  the energy used in any on-site preparation of materials 
 39.32  necessary to convert the materials into the fuel used to 
 39.33  generate electricity, such as a process to gasify petroleum 
 39.34  coke.  The commissioner shall use the high heating value for all 
 39.35  substances in the commissioner's efficiency calculations, except 
 39.36  for wood for fuel in a biomass-eligible project under section 
 40.1   216B.2424; for these instances, the commissioner shall adjust 
 40.2   the heating value to allow for energy consumed for evaporation 
 40.3   of the moisture in the wood.  The applicant shall provide the 
 40.4   commissioner of public service with whatever information the 
 40.5   commissioner deems necessary to make the determination.  Within 
 40.6   30 days of the receipt of the necessary information, the 
 40.7   commissioner of public service shall certify the findings of the 
 40.8   efficiency determination to the commissioner of revenue and to 
 40.9   the applicant.  The commissioner of public service shall 
 40.10  determine the efficiency of the facility and certify the 
 40.11  findings of that determination to the commissioner of revenue 
 40.12  every two years thereafter from the date of the original 
 40.13  certification. 
 40.14     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
 40.15  273.112, subdivision 2, is amended to read: 
 40.16     Subd. 2.  The present general system of ad valorem property 
 40.17  taxation in the state of Minnesota does not provide an equitable 
 40.18  basis for the taxation of certain private outdoor recreational, 
 40.19  social, open space and park land property and has resulted in 
 40.20  excessive taxes on some of these lands.  Therefore, it is hereby 
 40.21  declared that the public policy of this state would be best 
 40.22  served by equalizing tax burdens upon private outdoor, 
 40.23  recreational, social, open space and park land within this state 
 40.24  through appropriate taxing measures to encourage private 
 40.25  development of these lands which would otherwise not occur or 
 40.26  have to be provided by governmental authority.  
 40.27     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
 40.28  273.112, subdivision 3, is amended to read: 
 40.29     Subd. 3.  Real estate shall be entitled to valuation and 
 40.30  tax deferment under this section only if it is: 
 40.31     (a) actively and exclusively devoted to golf, skiing, lawn 
 40.32  bowling, croquet, or archery or firearms range recreational use 
 40.33  or other recreational or social uses carried on at the 
 40.34  establishment; 
 40.35     (b) five acres in size or more, except in the case of a 
 40.36  lawn bowling or croquet green or an archery or firearms range or 
 41.1   an establishment actively and exclusively devoted to indoor 
 41.2   fitness, health, social, recreational, and related uses in which 
 41.3   the establishment is owned and operated by a not-for-profit 
 41.4   corporation; 
 41.5      (c)(1) operated by private individuals or, in the case of a 
 41.6   lawn bowling or croquet green, by private individuals or 
 41.7   corporations, and open to the public; or 
 41.8      (2) operated by firms or corporations for the benefit of 
 41.9   employees or guests; or 
 41.10     (3) operated by private clubs having a membership of 50 or 
 41.11  more or open to the public, provided that the club does not 
 41.12  discriminate in membership requirements or selection on the 
 41.13  basis of sex or marital status; and 
 41.14     (d) made available for use in the case of real estate 
 41.15  devoted to golf without discrimination on the basis of sex 
 41.16  during the time when the facility is open to use by the public 
 41.17  or by members, except that use for golf may be restricted on the 
 41.18  basis of sex no more frequently than one, or part of one, 
 41.19  weekend each calendar month for each sex and no more than two, 
 41.20  or part of two, weekdays each week for each sex.  
 41.21     If a golf club membership allows use of golf course 
 41.22  facilities by more than one adult per membership, the use must 
 41.23  be equally available to all adults entitled to use of the golf 
 41.24  course under the membership, except that use may be restricted 
 41.25  on the basis of sex as permitted in this section.  Memberships 
 41.26  that permit play during restricted times may be allowed only if 
 41.27  the restricted times apply to all adults using the membership.  
 41.28  A golf club may not offer a membership or golfing privileges to 
 41.29  a spouse of a member that provides greater or less access to the 
 41.30  golf course than is provided to that person's spouse under the 
 41.31  same or a separate membership in that club, except that the 
 41.32  terms of a membership may provide that one spouse may have no 
 41.33  right to use the golf course at any time while the other spouse 
 41.34  may have either limited or unlimited access to the golf course.  
 41.35     A golf club may have or create an individual membership 
 41.36  category which entitles a member for a reduced rate to play 
 42.1   during restricted hours as established by the club.  The club 
 42.2   must have on record a written request by the member for such 
 42.3   membership.  
 42.4      A golf club that has food or beverage facilities or 
 42.5   services must allow equal access to those facilities and 
 42.6   services for both men and women members in all membership 
 42.7   categories at all times.  Nothing in this paragraph shall be 
 42.8   construed to require service or access to facilities to persons 
 42.9   under the age of 21 years or require any act that would violate 
 42.10  law or ordinance regarding sale, consumption, or regulation of 
 42.11  alcoholic beverages. 
 42.12     For purposes of this subdivision and subdivision 7a, 
 42.13  discrimination means a pattern or course of conduct and not 
 42.14  linked to an isolated incident. 
 42.15     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
 42.16  273.112, subdivision 4, is amended to read: 
 42.17     Subd. 4.  The value of any real estate described in 
 42.18  subdivision 3 shall upon timely application by the owner, in the 
 42.19  manner provided in subdivision 6, be determined solely with 
 42.20  reference to its appropriate private outdoor, 
 42.21  recreational, social, open space and park land classification 
 42.22  and value notwithstanding sections 272.03, subdivision 8, and 
 42.23  273.11.  In determining such value for ad valorem tax purposes 
 42.24  the assessor shall not consider the value such real estate would 
 42.25  have if it were converted to commercial, industrial, residential 
 42.26  or seasonal residential use. 
 42.27     Sec. 6.  Minnesota Statutes 1997 Supplement, section 
 42.28  272.115, subdivision 4, is amended to read: 
 42.29     Subd. 4.  [ELIGIBILITY FOR HOMESTEAD STATUS.] No real 
 42.30  estate sold or transferred on or after January 1, 1993, for 
 42.31  which a certificate of real estate value is required under 
 42.32  subdivision 1 this section shall be classified as a homestead, 
 42.33  unless (1) a certificate of value has been filed with the county 
 42.34  auditor in accordance with this section, or (2) the real estate 
 42.35  was conveyed by the federal government, the state, a political 
 42.36  subdivision of the state, or combination of them to a person 
 43.1   otherwise eligible to receive homestead classification of the 
 43.2   property. 
 43.3      This subdivision shall apply to any real estate taxes that 
 43.4   are payable the year or years following the sale or transfer of 
 43.5   the property. 
 43.6      Sec. 7.  Minnesota Statutes 1997 Supplement, section 
 43.7   272.115, subdivision 5, is amended to read: 
 43.8      Subd. 5.  [EXEMPTION FOR GOVERNMENT BODIES.] A certificate 
 43.9   of real estate value is not required when the real estate is 
 43.10  being conveyed to or by a public authority or agency of the 
 43.11  federal government, the state of Minnesota, a political 
 43.12  subdivision of the state, or any combination of them, for 
 43.13  highway or roadway right-of-way purposes, provided that the 
 43.14  authority, agency, or governmental unit has agreed to file a 
 43.15  list of the real estate conveyed by or to the authority, agency, 
 43.16  or governmental unit with the commissioner of revenue by June 1 
 43.17  of the year following the year of the conveyance. 
 43.18     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
 43.19  273.124, subdivision 14, is amended to read: 
 43.20     Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
 43.21  (a) Real estate of less than ten acres that is the homestead of 
 43.22  its owner must be classified as class 2a under section 273.13, 
 43.23  subdivision 23, paragraph (a), if:  
 43.24     (1) the parcel on which the house is located is contiguous 
 43.25  on at least two sides to (i) agricultural land, (ii) land owned 
 43.26  or administered by the United States Fish and Wildlife Service, 
 43.27  or (iii) land administered by the department of natural 
 43.28  resources on which in lieu taxes are paid under sections 477A.11 
 43.29  to 477A.14; 
 43.30     (2) its owner also owns a noncontiguous parcel of 
 43.31  agricultural land that is at least 20 acres; 
 43.32     (3) the noncontiguous land is located not farther than two 
 43.33  four townships or cities, or a combination of townships or 
 43.34  cities from the homestead; and 
 43.35     (4) the agricultural use value of the noncontiguous land 
 43.36  and farm buildings is equal to at least 50 percent of the market 
 44.1   value of the house, garage, and one acre of land. 
 44.2      Homesteads initially classified as class 2a under the 
 44.3   provisions of this paragraph shall remain classified as class 
 44.4   2a, irrespective of subsequent changes in the use of adjoining 
 44.5   properties, as long as the homestead remains under the same 
 44.6   ownership, the owner owns a noncontiguous parcel of agricultural 
 44.7   land that is at least 20 acres, and the agricultural use value 
 44.8   qualifies under clause (4). 
 44.9      (b) Except as provided in paragraph (d), noncontiguous land 
 44.10  shall be included as part of a homestead under section 273.13, 
 44.11  subdivision 23, paragraph (a), only if the homestead is 
 44.12  classified as class 2a and the detached land is located in the 
 44.13  same township or city, or not farther than two four townships or 
 44.14  cities or combination thereof from the homestead.  Any taxpayer 
 44.15  of these noncontiguous lands must notify the county assessor 
 44.16  that the noncontiguous land is part of the taxpayer's homestead, 
 44.17  and, if the homestead is located in another county, the taxpayer 
 44.18  must also notify the assessor of the other county. 
 44.19     (c) Agricultural land used for purposes of a homestead and 
 44.20  actively farmed by a person holding a vested remainder interest 
 44.21  in it must be classified as a homestead under section 273.13, 
 44.22  subdivision 23, paragraph (a).  If agricultural land is 
 44.23  classified class 2a, any other dwellings on the land used for 
 44.24  purposes of a homestead by persons holding vested remainder 
 44.25  interests who are actively engaged in farming the property, and 
 44.26  up to one acre of the land surrounding each homestead and 
 44.27  reasonably necessary for the use of the dwelling as a home, must 
 44.28  also be assessed class 2a. 
 44.29     (d) Agricultural land and buildings that were class 2a 
 44.30  homestead property under section 273.13, subdivision 23, 
 44.31  paragraph (a), for the 1997 assessment shall remain classified 
 44.32  as agricultural homesteads for subsequent assessments if:  
 44.33     (1) the property owner abandoned the homestead dwelling 
 44.34  located on the agricultural homestead as a result of the April 
 44.35  1997 floods; 
 44.36     (2) the property is located in the county of Polk, Clay, 
 45.1   Kittson, Marshall, Norman, or Wilkin; 
 45.2      (3) the agricultural land and buildings remain under the 
 45.3   same ownership for the current assessment year as existed for 
 45.4   the 1997 assessment year and continue to be used for 
 45.5   agricultural purposes; 
 45.6      (4) the dwelling occupied by the owner is located in 
 45.7   Minnesota and is within 30 miles of one of the parcels of 
 45.8   agricultural land that is owned by the taxpayer; and 
 45.9      (5) the owner notifies the county assessor that the 
 45.10  relocation was due to the 1997 floods, and the owner furnishes 
 45.11  the assessor any information deemed necessary by the assessor in 
 45.12  verifying the change in homestead dwelling.  For taxes payable 
 45.13  in 1998, the owner must notify the assessor by December 1, 
 45.14  1997.  Further notifications to the assessor are not required if 
 45.15  the property continues to meet all the requirements in this 
 45.16  paragraph and any dwellings on the agricultural land remain 
 45.17  uninhabited. 
 45.18     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
 45.19  273.126, subdivision 3, is amended to read: 
 45.20     Subd. 3.  [RENT RESTRICTIONS.] (a) In order to qualify 
 45.21  under class 4d, a unit must be subject to a rent restriction 
 45.22  agreement with the housing finance agency for a period of at 
 45.23  least five years.  The agreement must be in effect and apply to 
 45.24  the rents to be charged for the year in which the property taxes 
 45.25  are payable.  The agreement must provide that the restrictions 
 45.26  apply to each year of the period, regardless of whether the unit 
 45.27  is occupied by an individual with qualifying income or whether 
 45.28  class 4d applies.  The rent restriction agreement must provide 
 45.29  for rents for the unit to be no higher than 30 percent of 60 
 45.30  percent of the median gross income.  The definition of median 
 45.31  gross income specified in this section applies.  "Rent" means 
 45.32  "gross rent" as defined in section 42(g)(2)(B) of the Internal 
 45.33  Revenue Code of 1986, as amended through December 31, 1996.  
 45.34     (b) Notwithstanding the maximum rent levels permitted, 20 
 45.35  percent of the units in the metropolitan area and ten percent of 
 45.36  the units in greater Minnesota qualifying under class 4d must be 
 46.1   made available to a family with a section 8 certificate or 
 46.2   voucher.  For applications for class 4d made before July 1, 
 46.3   1999, the required percent of units for an applicant is 
 46.4   increased to 40 percent and the maximum rent that may be charged 
 46.5   on a unit occupied by a family with a section 8 certificate or 
 46.6   voucher is limited to the fair market rent for the area, as 
 46.7   established by the United States Department of Housing and Urban 
 46.8   Development, if within the five year period ending January 2 of 
 46.9   the assessment year: 
 46.10     (1) 40 percent or more of the units in the project or 
 46.11  development were covered by a section 8 project-based housing 
 46.12  assistance contract and the contract has been canceled or no 
 46.13  longer applies; or 
 46.14     (2) the units were in a project or development financed 
 46.15  with a direct federal loan or federally insured loan made 
 46.16  pursuant to Title II of the National Housing Act and the loan 
 46.17  has been paid or prepaid, eliminating the restrictions on rents 
 46.18  under Title II of the Act. 
 46.19     (c) The rent restriction agreement runs with the land and 
 46.20  binds any successor to title to the property, without regard to 
 46.21  whether the successor had actual notice or knowledge of the 
 46.22  agreement.  The owner must promptly record the agreement in the 
 46.23  office of the county recorder or must file it in the office of 
 46.24  the registrar of titles, in the county where the property is 
 46.25  located.  If the agreement is not recorded, class 4d does not 
 46.26  apply to the property. 
 46.27     Sec. 10.  [273.1383] [1997 FLOOD LOSS REPLACEMENT AID.] 
 46.28     Subdivision 1.  [FLOOD NET TAX CAPACITY LOSS.] In 
 46.29  assessment years 1998, 1999, and 2000, the county assessor of 
 46.30  each county listed in section 273.124, subdivision 14, paragraph 
 46.31  (d), clause (2), shall compute a hypothetical county net tax 
 46.32  capacity based upon market values for the current assessment 
 46.33  year and the class rates that were in effect for assessment year 
 46.34  1997.  The amount, if any, by which the assessment year 1997 
 46.35  total taxable net tax capacity exceeds the hypothetical taxable 
 46.36  net tax capacity shall be known as the county's "flood net tax 
 47.1   capacity loss" for the current assessment year.  The county 
 47.2   assessor of each county whose flood net tax capacity loss for 
 47.3   the current year exceeds five percent of its assessment year 
 47.4   1997 total taxable net tax capacity shall certify its flood net 
 47.5   tax capacity loss to the commissioner of revenue by August 1 of 
 47.6   the assessment year. 
 47.7      Subd. 2.  [FLOOD LOSS AID.] Each year, each county with a 
 47.8   flood net tax capacity loss equal to or greater than five 
 47.9   percent of its assessment year 1997 total taxable net tax 
 47.10  capacity shall be entitled to flood loss aid equal to the flood 
 47.11  net tax capacity loss times the county government's average 
 47.12  local tax rate for taxes payable in 1998. 
 47.13     Subd. 3.  [DUTIES OF COMMISSIONER.] The commissioner of 
 47.14  revenue shall determine each qualifying county's aid amount.  If 
 47.15  the sum of the aid amounts for all qualifying counties exceeds 
 47.16  the appropriation limit, the commissioner shall proportionately 
 47.17  reduce each county's aid amount so that the sum of county aid 
 47.18  amounts is equal to the appropriation limit.  The commissioner 
 47.19  shall notify each county of its flood loss aid amount by August 
 47.20  15 of the assessment year.  The commissioner shall make payments 
 47.21  to each county on or before July 20 of the taxes payable year 
 47.22  corresponding to the assessment year. 
 47.23     Subd. 4.  [APPROPRIATION.] An amount necessary to fund the 
 47.24  aid amounts under this section is annually appropriated from the 
 47.25  general fund to the commissioner of revenue in fiscal years 
 47.26  2000, 2001, and 2002, for calendar years 1999, 2000, and 2001.  
 47.27  The maximum amount of the appropriation is limited to $1,700,000 
 47.28  for fiscal year 2000 and $1,500,000 per year for fiscal years 
 47.29  2001 and 2002.  In addition, the amount of the appropriation 
 47.30  under Laws 1997, Second Special Session chapter 2, section 9, 
 47.31  that the commissioner determines will not be spent for the 
 47.32  programs under that section is available to pay the aid amounts 
 47.33  under this section. 
 47.34     Sec. 11.  [273.80] [DISTRESSED HOMESTEAD REINVESTMENT 
 47.35  EXEMPTION.] 
 47.36     Subdivision 1.  [DEFINITIONS.] For purposes of this 
 48.1   section, the following terms shall have the meanings given. 
 48.2      "Substantially condition deficient" means that repairs 
 48.3   estimated to cost at least $20,000 are necessary to restore a 
 48.4   house to sound operating condition, according to prevailing 
 48.5   costs of home improvements for the area. 
 48.6      "Sound operating condition" means that a home meets minimal 
 48.7   health and safety standards for residential occupancy under 
 48.8   applicable housing or building codes. 
 48.9      "Residential rehabilitation consultant" means a person who 
 48.10  is employed by a housing services organization recognized by 
 48.11  resolution of the city council of the city in which the property 
 48.12  is located, and who has been trained in residential housing 
 48.13  rehabilitation. 
 48.14     "Census tract" means a tract defined for the 1990 federal 
 48.15  census. 
 48.16     Subd. 2.  [ELIGIBILITY.] An owner-occupied, detached, 
 48.17  single-family dwelling is eligible for treatment under this 
 48.18  section if it: 
 48.19     (1) is located in a city of the first class; 
 48.20     (2) is located in a census tract where the median value of 
 48.21  owner-occupied homes is less than 80 percent of the median value 
 48.22  of owner-occupied homes for the entire city, according to the 
 48.23  1998 assessment; 
 48.24     (3) has an estimated market value less than 60 percent of 
 48.25  the median value of owner-occupied homes for the entire city, 
 48.26  according to the 1998 assessment; and 
 48.27     (4) has been declared to be substantially condition 
 48.28  deficient, by a residential rehabilitation consultant. 
 48.29     Subd. 3.  [QUALIFICATION.] A home which meets the 
 48.30  eligibility requirements of subdivision 2 before May 1, 2003, 
 48.31  qualifies for the property tax exemption under subdivision 4 
 48.32  after a residential rehabilitation consultant certifies that the 
 48.33  home is in sound operating condition, and that all permits 
 48.34  necessary to make the repairs were obtained.  An owner need not 
 48.35  occupy the dwelling while the necessary repairs are being done, 
 48.36  provided that the property is occupied prior to granting the 
 49.1   exemption under subdivision 4.  All or a part of the repairs 
 49.2   necessary to restore the house to sound operating conditions may 
 49.3   be done prior to the owner purchasing the property, if those 
 49.4   repairs are done by or for a 501(c)(3) nonprofit organization. 
 49.5      Subd. 4.  [PROPERTY TAX EXEMPTION.] A home qualifying under 
 49.6   subdivision 3 is exempt from all property taxes on the land and 
 49.7   buildings for taxes payable for five consecutive years following 
 49.8   its certification under subdivision 3, if the property is owned 
 49.9   and occupied by the same person who owned it when the home was 
 49.10  certified as substantially condition deficient or by the first 
 49.11  purchaser from the 501(c)(3) nonprofit organization that 
 49.12  repaired the property.  To be effective beginning with taxes 
 49.13  payable in the following year, the certification must be made by 
 49.14  September 1. 
 49.15     Subd. 5.  [ASSESSMENT; RECORD.] The assessor may require 
 49.16  whatever information is necessary to determine eligibility for 
 49.17  the tax exemption under this section.  During the time that the 
 49.18  property is exempt, the assessor shall continue to value the 
 49.19  property and record its current value on the tax rolls. 
 49.20     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 49.21  275.065, subdivision 3, is amended to read: 
 49.22     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 49.23  county auditor shall prepare and the county treasurer shall 
 49.24  deliver after November 10 and on or before November 24 each 
 49.25  year, by first class mail to each taxpayer at the address listed 
 49.26  on the county's current year's assessment roll, a notice of 
 49.27  proposed property taxes.  
 49.28     (b) The commissioner of revenue shall prescribe the form of 
 49.29  the notice. 
 49.30     (c) The notice must inform taxpayers that it contains the 
 49.31  amount of property taxes each taxing authority proposes to 
 49.32  collect for taxes payable the following year.  In the case of a 
 49.33  town, or in the case of the state determined portion of the 
 49.34  school district levy, the final tax amount will be its proposed 
 49.35  tax.  The notice must clearly state that each taxing authority, 
 49.36  including regional library districts established under section 
 50.1   134.201, and including the metropolitan taxing districts as 
 50.2   defined in paragraph (i), but excluding all other special taxing 
 50.3   districts and towns, will hold a public meeting to receive 
 50.4   public testimony on the proposed budget and proposed or final 
 50.5   property tax levy, or, in case of a school district, on the 
 50.6   current budget and proposed property tax levy.  It must clearly 
 50.7   state the time and place of each taxing authority's meeting and 
 50.8   an address where comments will be received by mail.  
 50.9      (d) The notice must state for each parcel: 
 50.10     (1) the market value of the property as determined under 
 50.11  section 273.11, and used for computing property taxes payable in 
 50.12  the following year and for taxes payable in the current year as 
 50.13  each appears in the records of the county assessor on November 1 
 50.14  of the current year; and, in the case of residential property, 
 50.15  whether the property is classified as homestead or 
 50.16  nonhomestead.  The notice must clearly inform taxpayers of the 
 50.17  years to which the market values apply and that the values are 
 50.18  final values; 
 50.19     (2) the items listed below, shown separately by county, 
 50.20  city or town, state determined school tax net of the education 
 50.21  homestead credit under section 273.1382, voter approved school 
 50.22  levy, other local school levy, and the sum of the special taxing 
 50.23  districts, and as a total of all taxing authorities:  
 50.24     (i) the actual tax for taxes payable in the current year; 
 50.25     (ii) the tax change due to spending factors, defined as the 
 50.26  proposed tax minus the constant spending tax amount; 
 50.27     (iii) the tax change due to other factors, defined as the 
 50.28  constant spending tax amount minus the actual current year tax; 
 50.29  and 
 50.30     (iv) the proposed tax amount. 
 50.31     In the case of a town or the state determined school tax, 
 50.32  the final tax shall also be its proposed tax unless the town 
 50.33  changes its levy at a special town meeting under section 
 50.34  365.52.  If a school district has certified under section 
 50.35  124A.03, subdivision 2, that a referendum will be held in the 
 50.36  school district at the November general election, the county 
 51.1   auditor must note next to the school district's proposed amount 
 51.2   that a referendum is pending and that, if approved by the 
 51.3   voters, the tax amount may be higher than shown on the notice.  
 51.4   In the case of the city of Minneapolis, the levy for the 
 51.5   Minneapolis library board and the levy for Minneapolis park and 
 51.6   recreation shall be listed separately from the remaining amount 
 51.7   of the city's levy.  In the case of a parcel where tax increment 
 51.8   or the fiscal disparities areawide tax under chapter 276A or 
 51.9   473F applies, the proposed tax levy on the captured value or the 
 51.10  proposed tax levy on the tax capacity subject to the areawide 
 51.11  tax must each be stated separately and not included in the sum 
 51.12  of the special taxing districts; and 
 51.13     (3) the increase or decrease between the total taxes 
 51.14  payable in the current year and the total proposed taxes, 
 51.15  expressed as a percentage. 
 51.16     For purposes of this section, the amount of the tax on 
 51.17  homesteads qualifying under the senior citizens' property tax 
 51.18  deferral program under chapter 290B is the total amount of 
 51.19  property tax before subtraction of the deferred property tax 
 51.20  amount. 
 51.21     (e) The notice must clearly state that the proposed or 
 51.22  final taxes do not include the following: 
 51.23     (1) special assessments; 
 51.24     (2) levies approved by the voters after the date the 
 51.25  proposed taxes are certified, including bond referenda, school 
 51.26  district levy referenda, and levy limit increase referenda; 
 51.27     (3) amounts necessary to pay cleanup or other costs due to 
 51.28  a natural disaster occurring after the date the proposed taxes 
 51.29  are certified; 
 51.30     (4) amounts necessary to pay tort judgments against the 
 51.31  taxing authority that become final after the date the proposed 
 51.32  taxes are certified; and 
 51.33     (5) the contamination tax imposed on properties which 
 51.34  received market value reductions for contamination. 
 51.35     (f) Except as provided in subdivision 7, failure of the 
 51.36  county auditor to prepare or the county treasurer to deliver the 
 52.1   notice as required in this section does not invalidate the 
 52.2   proposed or final tax levy or the taxes payable pursuant to the 
 52.3   tax levy. 
 52.4      (g) If the notice the taxpayer receives under this section 
 52.5   lists the property as nonhomestead, and satisfactory 
 52.6   documentation is provided to the county assessor by the 
 52.7   applicable deadline, and the property qualifies for the 
 52.8   homestead classification in that assessment year, the assessor 
 52.9   shall reclassify the property to homestead for taxes payable in 
 52.10  the following year. 
 52.11     (h) In the case of class 4 residential property used as a 
 52.12  residence for lease or rental periods of 30 days or more, the 
 52.13  taxpayer must either: 
 52.14     (1) mail or deliver a copy of the notice of proposed 
 52.15  property taxes to each tenant, renter, or lessee; or 
 52.16     (2) post a copy of the notice in a conspicuous place on the 
 52.17  premises of the property.  
 52.18     The notice must be mailed or posted by the taxpayer by 
 52.19  November 27 or within three days of receipt of the notice, 
 52.20  whichever is later.  A taxpayer may notify the county treasurer 
 52.21  of the address of the taxpayer, agent, caretaker, or manager of 
 52.22  the premises to which the notice must be mailed in order to 
 52.23  fulfill the requirements of this paragraph. 
 52.24     (i) For purposes of this subdivision, subdivisions 5a and 
 52.25  6, "metropolitan special taxing districts" means the following 
 52.26  taxing districts in the seven-county metropolitan area that levy 
 52.27  a property tax for any of the specified purposes listed below: 
 52.28     (1) metropolitan council under section 473.132, 473.167, 
 52.29  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 52.30     (2) metropolitan airports commission under section 473.667, 
 52.31  473.671, or 473.672; and 
 52.32     (3) metropolitan mosquito control commission under section 
 52.33  473.711. 
 52.34     For purposes of this section, any levies made by the 
 52.35  regional rail authorities in the county of Anoka, Carver, 
 52.36  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 53.1   398A shall be included with the appropriate county's levy and 
 53.2   shall be discussed at that county's public hearing. 
 53.3      (j) If a statutory or home rule charter city or a town has 
 53.4   exercised the local levy option provided by section 473.388, 
 53.5   subdivision 7, it may include in the notice of its proposed 
 53.6   taxes the amount of its proposed taxes attributable to its 
 53.7   exercise of the option.  In the first year of the city or town's 
 53.8   exercise of this option, the statement shall include an estimate 
 53.9   of the reduction of the metropolitan council's tax on the parcel 
 53.10  due to exercise of that option.  The metropolitan council's levy 
 53.11  shall be adjusted accordingly. 
 53.12     Sec. 13.  Minnesota Statutes 1997 Supplement, section 
 53.13  275.065, subdivision 6, is amended to read: 
 53.14     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
 53.15  (a) For purposes of this section, the following terms shall have 
 53.16  the meanings given: 
 53.17     (1) "Initial hearing" means the first and primary hearing 
 53.18  held to discuss the taxing authority's proposed budget and 
 53.19  proposed property tax levy for taxes payable in the following 
 53.20  year, or, for school districts, the current budget and the 
 53.21  proposed property tax levy for taxes payable in the following 
 53.22  year. 
 53.23     (2) "Continuation hearing" means a hearing held to complete 
 53.24  the initial hearing, if the initial hearing is not completed on 
 53.25  its scheduled date. 
 53.26     (3) "Subsequent hearing" means the hearing held to adopt 
 53.27  the taxing authority's final property tax levy, and, in the case 
 53.28  of taxing authorities other than school districts, the final 
 53.29  budget, for taxes payable in the following year. 
 53.30     (b) Between November 29 and December 20, the governing 
 53.31  bodies of a city that has a population over 500, county, 
 53.32  metropolitan special taxing districts as defined in subdivision 
 53.33  3, paragraph (i), and regional library districts shall each hold 
 53.34  an initial public hearing to discuss and seek public comment on 
 53.35  its final budget and property tax levy for taxes payable in the 
 53.36  following year, and the governing body of the school district 
 54.1   shall hold an initial public hearing to review its current 
 54.2   budget and proposed property tax levy for taxes payable in the 
 54.3   following year.  The metropolitan special taxing districts shall 
 54.4   be required to hold only a single joint initial public hearing, 
 54.5   the location of which will be determined by the affected 
 54.6   metropolitan agencies. 
 54.7      (c) The initial hearing must be held after 5:00 p.m. if 
 54.8   scheduled on a day other than Saturday.  No initial hearing may 
 54.9   be held on a Sunday.  
 54.10     (d) At the initial hearing under this subdivision, the 
 54.11  percentage increase in property taxes proposed by the taxing 
 54.12  authority, if any, and the specific purposes for which property 
 54.13  tax revenues are being increased must be discussed.  During the 
 54.14  discussion, the governing body shall hear comments regarding a 
 54.15  proposed increase and explain the reasons for the proposed 
 54.16  increase.  The public shall be allowed to speak and to ask 
 54.17  questions.  At the public hearing, the school district must also 
 54.18  provide and discuss information on the distribution of its 
 54.19  revenues by revenue source, and the distribution of its spending 
 54.20  by program area.  
 54.21     (e) If the initial hearing is not completed on its 
 54.22  scheduled date, the taxing authority must announce, prior to 
 54.23  adjournment of the hearing, the date, time, and place for the 
 54.24  continuation of the hearing.  The continuation hearing must be 
 54.25  held at least five business days but no more than 14 business 
 54.26  days after the initial hearing.  A continuation hearing may not 
 54.27  be held later than December 20 except as provided in paragraphs 
 54.28  (f) and (g).  A continuation hearing must be held after 5:00 
 54.29  p.m. if scheduled on a day other than Saturday.  No continuation 
 54.30  hearing may be held on a Sunday. 
 54.31     (f) The governing body of a county shall hold its initial 
 54.32  hearing on the second Tuesday first Thursday in December each 
 54.33  year, and may hold additional initial hearings on other dates 
 54.34  before December 20 if necessary for the convenience of county 
 54.35  residents.  If the county needs a continuation of its hearing, 
 54.36  the continuation hearing shall be held on the third Tuesday in 
 55.1   December.  If the third Tuesday in December falls on December 
 55.2   21, the county's continuation hearing shall be held on Monday, 
 55.3   December 20.  
 55.4      (g) The metropolitan special taxing districts shall hold a 
 55.5   joint initial public hearing on the first Monday Wednesday of 
 55.6   December.  A continuation hearing, if necessary, shall be held 
 55.7   on the second Monday Wednesday of December even if that second 
 55.8   Monday Wednesday is after December 10. 
 55.9      (h) The county auditor shall provide for the coordination 
 55.10  of initial and continuation hearing dates for all school 
 55.11  districts and cities within the county to prevent conflicts 
 55.12  under clauses (i) and (j). 
 55.13     (i) By August 10, each school board and the board of the 
 55.14  regional library district shall certify to the county auditors 
 55.15  of the counties in which the school district or regional library 
 55.16  district is located the dates on which it elects to hold its 
 55.17  initial hearing and any continuation hearing.  If a school board 
 55.18  or regional library district does not certify these dates by 
 55.19  August 10, the auditor will assign the initial and continuation 
 55.20  hearing dates.  The dates elected or assigned must not conflict 
 55.21  with the initial and continuation hearing dates of the county or 
 55.22  the metropolitan special taxing districts.  
 55.23     (j) By August 20, the county auditor shall notify the 
 55.24  clerks of the cities within the county of the dates on which 
 55.25  school districts and regional library districts have elected to 
 55.26  hold their initial and continuation hearings.  At the time a 
 55.27  city certifies its proposed levy under subdivision 1 it shall 
 55.28  certify the dates on which it elects to hold its initial hearing 
 55.29  and any continuation hearing.  Until September 15, the first and 
 55.30  second Mondays of December are reserved for the use of the 
 55.31  cities.  If a city does not certify these its hearing dates by 
 55.32  September 15, the auditor shall assign the initial and 
 55.33  continuation hearing dates.  The dates elected or assigned for 
 55.34  the initial hearing must not conflict with the initial hearing 
 55.35  dates of the county, metropolitan special taxing districts, 
 55.36  regional library districts, or school districts within which the 
 56.1   city is located.  To the extent possible, the dates of the 
 56.2   city's continuation hearing should not conflict with the 
 56.3   continuation hearing dates of the county, metropolitan special 
 56.4   taxing districts, regional library districts, or school 
 56.5   districts within which the city is located.  This paragraph does 
 56.6   not apply to cities of 500 population or less. 
 56.7      (k) The county initial hearing date and the city, 
 56.8   metropolitan special taxing district, regional library district, 
 56.9   and school district initial hearing dates must be designated on 
 56.10  the notices required under subdivision 3.  The continuation 
 56.11  hearing dates need not be stated on the notices.  
 56.12     (l) At a subsequent hearing, each county, school district, 
 56.13  city over 500 population, and metropolitan special taxing 
 56.14  district may amend its proposed property tax levy and must adopt 
 56.15  a final property tax levy.  Each county, city over 500 
 56.16  population, and metropolitan special taxing district may also 
 56.17  amend its proposed budget and must adopt a final budget at the 
 56.18  subsequent hearing.  The final property tax levy must be adopted 
 56.19  prior to adopting the final budget.  A school district is not 
 56.20  required to adopt its final budget at the subsequent hearing.  
 56.21  The subsequent hearing of a taxing authority must be held on a 
 56.22  date subsequent to the date of the taxing authority's initial 
 56.23  public hearing.  If a continuation hearing is held, the 
 56.24  subsequent hearing must be held either immediately following the 
 56.25  continuation hearing or on a date subsequent to the continuation 
 56.26  hearing.  The subsequent hearing may be held at a regularly 
 56.27  scheduled board or council meeting or at a special meeting 
 56.28  scheduled for the purposes of the subsequent hearing.  The 
 56.29  subsequent hearing of a taxing authority does not have to be 
 56.30  coordinated by the county auditor to prevent a conflict with an 
 56.31  initial hearing, a continuation hearing, or a subsequent hearing 
 56.32  of any other taxing authority.  All subsequent hearings must be 
 56.33  held prior to five working days after December 20 of the levy 
 56.34  year.  The date, time, and place of the subsequent hearing must 
 56.35  be announced at the initial public hearing or at the 
 56.36  continuation hearing. 
 57.1      (m) The property tax levy certified under section 275.07 by 
 57.2   a city of any population, county, metropolitan special taxing 
 57.3   district, regional library district, or school district must not 
 57.4   exceed the proposed levy determined under subdivision 1, except 
 57.5   by an amount up to the sum of the following amounts: 
 57.6      (1) the amount of a school district levy whose voters 
 57.7   approved a referendum to increase taxes under section 124.82, 
 57.8   subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 
 57.9   2, after the proposed levy was certified; 
 57.10     (2) the amount of a city or county levy approved by the 
 57.11  voters after the proposed levy was certified; 
 57.12     (3) the amount of a levy to pay principal and interest on 
 57.13  bonds approved by the voters under section 475.58 after the 
 57.14  proposed levy was certified; 
 57.15     (4) the amount of a levy to pay costs due to a natural 
 57.16  disaster occurring after the proposed levy was certified, if 
 57.17  that amount is approved by the commissioner of revenue under 
 57.18  subdivision 6a; 
 57.19     (5) the amount of a levy to pay tort judgments against a 
 57.20  taxing authority that become final after the proposed levy was 
 57.21  certified, if the amount is approved by the commissioner of 
 57.22  revenue under subdivision 6a; 
 57.23     (6) the amount of an increase in levy limits certified to 
 57.24  the taxing authority by the commissioner of children, families, 
 57.25  and learning or the commissioner of revenue after the proposed 
 57.26  levy was certified; and 
 57.27     (7) the amount required under section 124.755. 
 57.28     (n) This subdivision does not apply to towns and special 
 57.29  taxing districts other than regional library districts and 
 57.30  metropolitan special taxing districts. 
 57.31     (o) Notwithstanding the requirements of this section, the 
 57.32  employer is required to meet and negotiate over employee 
 57.33  compensation as provided for in chapter 179A.  
 57.34     Sec. 14.  Minnesota Statutes 1996, section 275.07, is 
 57.35  amended by adding a subdivision to read: 
 57.36     Subd. 5.  [REVISED FINAL LEVY.] (a) If the final levy of a 
 58.1   taxing jurisdiction certified to the county auditor is incorrect 
 58.2   due to an error in the deduction of the aid received under 
 58.3   section 273.1398, subdivision 2, in determining the certified 
 58.4   levy as required under subdivision 1, the taxing jurisdiction 
 58.5   may apply to the commissioner of revenue to increase the levy 
 58.6   and recertify it in the correct amount.  The commissioner must 
 58.7   receive the request by January 2. 
 58.8      (b) If the commissioner determines that the requirements of 
 58.9   paragraph (a) have been met, the commissioner shall notify the 
 58.10  taxing jurisdiction that the revised final levy has been 
 58.11  approved.  Upon receipt of the approval, but no later than 
 58.12  January 15, the governing body of the taxing jurisdiction shall 
 58.13  adopt the revised final levy and the taxing jurisdiction shall 
 58.14  recertify the revised final levy to the county auditor.  The 
 58.15  county auditor shall use the revised final levy to compute the 
 58.16  tax rate for the taxing jurisdiction. 
 58.17     (c) The county auditor shall report to the commissioner of 
 58.18  revenue the revised final levy used to determine the tax rates 
 58.19  for the taxing jurisdiction.  The provisions of section 275.065, 
 58.20  subdivisions 6, 6a, and 7 do not apply to the revised final levy 
 58.21  for the taxing jurisdiction certified under this section. 
 58.22     (d) The taxing jurisdiction must publish in an official 
 58.23  newspaper of general circulation in the taxing jurisdiction a 
 58.24  notice of its revised final levy.  The notice shall contain 
 58.25  examples of the tax impact of the revised final levy on 
 58.26  homestead, apartment, and commercial classes of property in the 
 58.27  taxing jurisdiction.  The county auditor shall assist the taxing 
 58.28  jurisdiction in preparing the examples for the publication. 
 58.29     Sec. 15.  Minnesota Statutes 1997 Supplement, section 
 58.30  287.08, is amended to read: 
 58.31     287.08 [TAX, HOW PAYABLE; RECEIPTS.] 
 58.32     (a) The tax imposed by sections 287.01 to 287.12 shall be 
 58.33  paid to the treasurer of the county in which the mortgaged land 
 58.34  or some part thereof is situated at or before the time of filing 
 58.35  the mortgage for record or registration.  The treasurer shall 
 58.36  endorse receipt on the mortgage, countersigned by the county 
 59.1   auditor, who shall charge the amount to the treasurer and such 
 59.2   receipt shall be recorded with the mortgage, and such receipt of 
 59.3   the record thereof shall be conclusive proof that the tax has 
 59.4   been paid to the amount therein stated and authorize any county 
 59.5   recorder to record the mortgage.  Its form, in substance, shall 
 59.6   be "registration tax hereon of ..................... dollars 
 59.7   paid."  If the mortgages be exempt from taxation the endorsement 
 59.8   shall be "exempt from registration tax," to be signed in either 
 59.9   case by the treasurer as such, and in case of payment to be 
 59.10  countersigned by the auditor.  In case the treasurer shall be 
 59.11  unable to determine whether a claim of exemption should be 
 59.12  allowed, the tax shall be paid as in the case of a taxable 
 59.13  mortgage.  
 59.14     (b) Upon written application of the taxpayer, the county 
 59.15  treasurer may refund in whole or in part any tax which has been 
 59.16  erroneously paid, or a person having paid a mortgage registry 
 59.17  tax amount may seek a refund of such tax, or other appropriate 
 59.18  relief, by bringing an action in tax court in the county in 
 59.19  which the tax was paid, within 60 days of the payment.  The 
 59.20  action is commenced by the serving of a petition for relief on 
 59.21  the county treasurer, and by filing a copy with the court.  The 
 59.22  county attorney shall defend the action.  The county treasurer 
 59.23  shall notify the treasurer of each county that has or would 
 59.24  receive a portion of the tax as paid.  
 59.25     (c) If the county treasurer determines a refund should be 
 59.26  paid, or if a refund is ordered, the county treasurer of each 
 59.27  county that actually received a portion of the tax shall 
 59.28  immediately pay a proportionate share of three percent of the 
 59.29  refund using any available county funds.  The county treasurer 
 59.30  of each county which received, or would have received, a portion 
 59.31  of the tax shall also pay their county's proportionate share of 
 59.32  the remaining 97 percent of the court-ordered refund on or 
 59.33  before the tenth day of the following month using solely the 
 59.34  mortgage registry tax funds that would be paid to the 
 59.35  commissioner of revenue on that date under section 287.12.  If 
 59.36  the funds on hand under this procedure are insufficient to fully 
 60.1   fund 97 percent of the court-ordered refund, the county 
 60.2   treasurer of the county in which the action was brought shall 
 60.3   file a claim with the commissioner of revenue under section 
 60.4   16A.48 for the remaining portion of 97 percent of the refund, 
 60.5   and shall pay over the remaining portion upon receipt of a 
 60.6   warrant from the state issued pursuant to the claim.  
 60.7      (d) When any such mortgage covers real property situate in 
 60.8   more than one county in this state the whole of such tax shall 
 60.9   be paid to the treasurer of the county where the mortgage is 
 60.10  first presented for record or registration, and the payment 
 60.11  shall be receipted and countersigned as above provided.  If the 
 60.12  principal debt or obligation secured by such a multiple county 
 60.13  mortgage exceeds $1,000,000, the tax shall be divided and paid 
 60.14  over by the county treasurer receiving the same, on or before 
 60.15  the tenth day of each month after receipt thereof, to the county 
 60.16  or counties entitled thereto in the ratio which the market value 
 60.17  of the real property covered by the mortgage in each county 
 60.18  bears to the market value of all the property described in the 
 60.19  mortgage.  In making such division and payment the county 
 60.20  treasurer shall send therewith a statement giving the 
 60.21  description of the property described in the mortgage and the 
 60.22  market value of the part thereof situate in each county.  For 
 60.23  the purpose aforesaid, the treasurer of any county may require 
 60.24  the treasurer of any other county to certify to the former the 
 60.25  market valuation of any tract of land in any such mortgage. 
 60.26     Sec. 16.  [365A.095] [DISSOLUTION.] 
 60.27     A petition signed by at least 75 percent of the property 
 60.28  owners in the territory of the subordinate service district 
 60.29  requesting the removal of the district may be presented to the 
 60.30  town board.  Within 30 days after the town board receives the 
 60.31  petition, the town clerk shall determine the validity of the 
 60.32  signatures on the petition.  If the requisite number of 
 60.33  signatures are certified as valid, the town board must hold a 
 60.34  public hearing on the petitioned matter.  Within 30 days after 
 60.35  the end of the hearing, the town board must decide whether to 
 60.36  discontinue the subordinate service district, continue as it is, 
 61.1   or take some other action with respect to it. 
 61.2      Sec. 17.  Minnesota Statutes 1996, section 462.396, 
 61.3   subdivision 2, is amended to read: 
 61.4      Subd. 2.  [BUDGET; HEARING; LEVY LIMITS.] On or before 
 61.5   August 20 each year, the commission shall submit its proposed 
 61.6   budget for the ensuing calendar year showing anticipated 
 61.7   receipts, disbursements and ad valorem tax levy with a written 
 61.8   notice of the time and place of the public hearing on the 
 61.9   proposed budget to each county auditor and municipal clerk 
 61.10  within the region and those town clerks who in advance have 
 61.11  requested a copy of the budget and notice of public hearing.  On 
 61.12  or before September 15 each year, the commission shall adopt, 
 61.13  after a public hearing held not later than September 15, a 
 61.14  budget covering its anticipated receipts and disbursements for 
 61.15  the ensuing year and shall decide upon the total amount 
 61.16  necessary to be raised from ad valorem tax levies to meet its 
 61.17  budget.  After adoption of the budget and no later than 
 61.18  September 15, the secretary of the commission shall certify to 
 61.19  the auditor of each county within the region the county share of 
 61.20  the tax, which shall be an amount bearing the same proportion to 
 61.21  the total levy agreed on by the commission as the net tax 
 61.22  capacity of the county bears to the net tax capacity of the 
 61.23  region.  (1) For taxes levied in 1990 and thereafter 1998, the 
 61.24  maximum amounts of levies made for the purposes of sections 
 61.25  462.381 to 462.398 are the following amounts, less the sum of 
 61.26  regional planning grants from the commissioner to that region:  
 61.27  for Region 1, $180,337; for Region 2, $150,000 $180,000; for 
 61.28  Region 3, $353,110; for Region 5, $195,865; for Region 6E, 
 61.29  $197,177; for Region 6W, $150,000 $180,000; for Region 
 61.30  7E, $158,653 $180,000; for Region 8, $206,107; for Region 9, 
 61.31  $343,572.  (2) For taxes levied in 1999 and thereafter, the 
 61.32  maximum amount that may be levied by each commission shall be 
 61.33  the amount authorized in clause (1), or 103 percent of the 
 61.34  amount levied in the previous year, whichever is greater.  The 
 61.35  auditor of each county in the region shall add the amount of any 
 61.36  levy made by the commission within the limits imposed by this 
 62.1   subdivision to other tax levies of the county for collection by 
 62.2   the county treasurer with other taxes.  When collected the 
 62.3   county treasurer shall make settlement of the taxes with the 
 62.4   commission in the same manner as other taxes are distributed to 
 62.5   political subdivisions. 
 62.6      Sec. 18.  Minnesota Statutes 1997 Supplement, section 
 62.7   462A.071, subdivision 2, is amended to read: 
 62.8      Subd. 2.  [APPLICATION.] (a) In order to qualify for 
 62.9   certification under subdivision 1, the owner or manager of the 
 62.10  property must annually apply to the agency.  The application 
 62.11  must be in the form prescribed by the agency, contain the 
 62.12  information required by the agency, and be submitted by the date 
 62.13  and time specified by the agency.  Beginning in calendar year 
 62.14  2000, the agency shall adopt procedures and deadlines for making 
 62.15  application to permit certification of the units qualifying to 
 62.16  the assessor by no later than April 1 of the assessment year.  
 62.17     (b) Each application must include: 
 62.18     (1) the property tax identification number; 
 62.19     (2) the number, type, and size of units the applicant seeks 
 62.20  to qualify as low-income housing under class 4d; 
 62.21     (3) the number, type, and size of units in the property for 
 62.22  which the applicant is not seeking qualification, if any; 
 62.23     (4) a certification that the property has been inspected by 
 62.24  a qualified inspector within the past three years and meets the 
 62.25  minimum housing quality standards or is exempt from the 
 62.26  inspection requirement under subdivision 4; 
 62.27     (5) a statement indicating the building is qualifying units 
 62.28  in compliance with the income limits; 
 62.29     (6) an executed agreement to restrict rents meeting the 
 62.30  requirements specified by the agency or executed leases for the 
 62.31  units for which qualification as low-income housing as class 4d 
 62.32  under section 273.13 is sought and the rent schedule; and 
 62.33     (7) any additional information the agency deems appropriate 
 62.34  to require. 
 62.35     (c) The applicant must pay a per-unit application fee to be 
 62.36  set by the agency.  The application fee charged by the agency 
 63.1   must approximately equal the costs of processing and reviewing 
 63.2   the applications.  The fee must be deposited in the general 
 63.3   housing development fund. 
 63.4      Sec. 19.  Minnesota Statutes 1997 Supplement, section 
 63.5   462A.071, subdivision 4, is amended to read: 
 63.6      Subd. 4.  [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 
 63.7   qualify for taxation under class 4d under section 273.13, a unit 
 63.8   must meet both the housing maintenance code of the local unit of 
 63.9   government in which the unit is located, if such a code has been 
 63.10  adopted, and or the housing quality standards adopted by the 
 63.11  United States Department of Housing and Urban Development, if no 
 63.12  local housing maintenance code has been adopted. 
 63.13     (b) In order to meet the minimum housing quality standards, 
 63.14  a building must be inspected by an independent designated 
 63.15  inspector at least once every three years.  The inspector must 
 63.16  certify that the building complies with the minimum standards.  
 63.17  The property owner must pay the cost of the inspection. 
 63.18     (c) The agency may exempt from the inspection requirement 
 63.19  housing units that are financed by a governmental entity and 
 63.20  subject to regular inspection or other compliance checks with 
 63.21  regard to minimum housing quality.  Written certification must 
 63.22  be supplied to show that these exempt units have been inspected 
 63.23  within the last three years and comply with the requirements 
 63.24  under the public financing or local requirements. 
 63.25     Sec. 20.  Minnesota Statutes 1997 Supplement, section 
 63.26  462A.071, subdivision 6, is amended to read: 
 63.27     Subd. 6.  [SECTION 8 AND, TAX CREDIT, AND RURAL HOUSING 
 63.28  SERVICE UNITS.] (a) The agency may deem units as meeting the 
 63.29  requirements of section 273.126 and this section, if the 
 63.30  units either: 
 63.31     (1) are subject to a housing assistance payments contract 
 63.32  under section 8 of the United States Housing Act of 1937, as 
 63.33  amended; or 
 63.34     (2) are rent and income restricted units of a qualified 
 63.35  low-income housing project receiving tax credits under section 
 63.36  42(g) of the Internal Revenue Code of 1986, as amended; or 
 64.1      (3) are financed by the Rural Housing Service of the United 
 64.2   States Department of Agriculture and receive payments under the 
 64.3   rental assistance program pursuant to section 521(a) of the 
 64.4   Housing Act of 1949, as amended. 
 64.5      (b) The agency may certify these deemed units under 
 64.6   subdivision 1 based on a simplified application procedure that 
 64.7   verifies the unit's qualifications under paragraph (a).  
 64.8      Sec. 21.  Minnesota Statutes 1997 Supplement, section 
 64.9   462A.071, subdivision 8, is amended to read: 
 64.10     Subd. 8.  [PENALTIES.] (a) The penalties provided by this 
 64.11  subdivision apply to each unit that received class 4d taxation 
 64.12  for a year and failed to meet the requirements of section 
 64.13  273.126 and this section. 
 64.14     (b) If the owner or manager does not comply with the rent 
 64.15  restriction agreement, or does not comply with the income 
 64.16  restrictions or, minimum housing quality standards, or the 
 64.17  section 8 availability requirements, a penalty applies equal to 
 64.18  the increased taxes that would have been imposed if the property 
 64.19  unit had not been classified under class 4d for the year in 
 64.20  which restrictions were violated, plus an additional amount 
 64.21  equal to ten percent of the increased taxes.  The provisions of 
 64.22  section 279.03 apply to the amount of increased taxes that would 
 64.23  have been imposed if a unit had not been classified under class 
 64.24  4d for the year in which restrictions were violated. 
 64.25     (c) If the agency finds that the violations were 
 64.26  inadvertent and insubstantial, a penalty of $50 per unit per 
 64.27  year applies in lieu of the penalty specified under paragraph 
 64.28  (b).  In order to qualify under this paragraph, violations of 
 64.29  the minimum housing quality standards must be corrected within a 
 64.30  reasonable period of time and rent charged in excess of the 
 64.31  agreement must be rebated to the tenants. 
 64.32     (d) The agency may abate the penalties under this 
 64.33  subdivision for reasonable cause. 
 64.34     (e) Penalties assessed under paragraph (c) are payable to 
 64.35  the agency and must be deposited in the general housing 
 64.36  development fund.  If an owner or manager fails to timely pay a 
 65.1   penalty imposed under paragraph (c), the agency may choose to: 
 65.2      (1) impose the penalty under paragraph (b); or 
 65.3      (2) certify the penalty under paragraph (c) to the auditor 
 65.4   for collection as additional taxes. 
 65.5   The agency shall certify to the county auditor penalties 
 65.6   assessed under paragraph (b) and clause (2).  The auditor shall 
 65.7   impose and collect the certified penalties as additional taxes 
 65.8   which will be distributed to taxing districts in the same manner 
 65.9   as property taxes on the property. 
 65.10     Sec. 22.  Minnesota Statutes 1996, section 473.39, is 
 65.11  amended by adding a subdivision to read: 
 65.12     Subd. 1e.  [OBLIGATIONS.] In addition to the authority in 
 65.13  subdivisions 1a, 1b, 1c, and 1d, the council may issue 
 65.14  certificates of indebtedness, bonds, or other obligations under 
 65.15  this section in an amount not exceeding $32,500,000, which may 
 65.16  be used for capital expenditures as prescribed in the council's 
 65.17  transit capital improvement program and for related costs, 
 65.18  including the costs of issuance and sale of the obligations. 
 65.19     The metropolitan council, the city of St. Paul, and the 
 65.20  Minnesota department of transportation shall jointly assess the 
 65.21  feasibility of locating a bus storage facility near Mississippi 
 65.22  and Cayuga Street and I-35E in St. Paul.  If the metropolitan 
 65.23  council determines feasibility, the first priority for siting 
 65.24  must be at that location. 
 65.25     Sec. 23.  Minnesota Statutes 1996, section 473.3915, 
 65.26  subdivision 2, is amended to read: 
 65.27     Subd. 2.  [REGULAR ROUTE TRANSIT SERVICE.] "Regular route 
 65.28  transit service" means services as defined in section 473.385, 
 65.29  subdivision 1, paragraph (b), with at least two scheduled runs 
 65.30  per hour between 7:00 a.m. and 6:30 p.m., Monday to Friday, and 
 65.31  regularly scheduled service on Saturday, Sunday, and holidays, 
 65.32  and weekdays after 6:30 p.m.  The two scheduled runs for buses 
 65.33  leaving a replacement transit service transit hub need not be on 
 65.34  the same route.  
 65.35     Sec. 24.  Minnesota Statutes 1996, section 473.3915, 
 65.36  subdivision 3, is amended to read: 
 66.1      Subd. 3.  [TRANSIT ZONE.] "Transit zone" means:  (1) the 
 66.2   area within one-quarter of a mile of a route along which regular 
 66.3   route transit service is provided that is also within the 
 66.4   metropolitan urban service area, as determined by the council; 
 66.5   or (2) the area within one-eighth of a mile around a replacement 
 66.6   transit service transit hub.  "Transit zone" includes any light 
 66.7   rail transit route for which funds for construction have been 
 66.8   committed. 
 66.9      Sec. 25.  Minnesota Statutes 1996, section 475.58, 
 66.10  subdivision 1, is amended to read: 
 66.11     Subdivision 1.  [APPROVAL BY ELECTORS; EXCEPTIONS.] 
 66.12  Obligations authorized by law or charter may be issued by any 
 66.13  municipality upon obtaining the approval of a majority of the 
 66.14  electors voting on the question of issuing the obligations, but 
 66.15  an election shall not be required to authorize obligations 
 66.16  issued: 
 66.17     (1) to pay any unpaid judgment against the municipality; 
 66.18     (2) for refunding obligations; 
 66.19     (3) for an improvement or improvement program, which 
 66.20  obligation is payable wholly or partly from the proceeds of 
 66.21  special assessments levied upon property specially benefited by 
 66.22  the improvement or by an improvement within the improvement 
 66.23  program, or of taxes levied upon the increased value of property 
 66.24  within a district for the development of which the improvement 
 66.25  is undertaken, including obligations which are the general 
 66.26  obligations of the municipality, if the municipality is entitled 
 66.27  to reimbursement in whole or in part from the proceeds of such 
 66.28  special assessments or taxes and not less than 20 percent of the 
 66.29  cost of the improvement or the improvement program is to be 
 66.30  assessed against benefited property or is to be paid from the 
 66.31  proceeds of federal grant funds or a combination thereof, or is 
 66.32  estimated to be received from such taxes within the district; 
 66.33     (4) payable wholly from the income of revenue producing 
 66.34  conveniences; 
 66.35     (5) under the provisions of a home rule charter which 
 66.36  permits the issuance of obligations of the municipality without 
 67.1   election; 
 67.2      (6) under the provisions of a law which permits the 
 67.3   issuance of obligations of a municipality without an election; 
 67.4      (7) to fund pension or retirement fund liabilities pursuant 
 67.5   to section 475.52, subdivision 6; 
 67.6      (8) under a capital improvement plan under section 373.40; 
 67.7   and 
 67.8      (9) to fund facilities as provided in subdivision 3; and 
 67.9      (10) under sections 469.1813 to 469.1815 (property tax 
 67.10  abatement authority bonds). 
 67.11     Sec. 26.  Minnesota Statutes 1996, section 477A.14, is 
 67.12  amended to read: 
 67.13     477A.14 [USE OF FUNDS.] 
 67.14     Forty percent of the total payment to the county shall be 
 67.15  deposited in the county general revenue fund to be used to 
 67.16  provide property tax levy reduction.  The remainder shall be 
 67.17  distributed by the county in the following priority:  
 67.18     (a) 37.5 cents for each acre of county-administered other 
 67.19  natural resources land shall be deposited in a resource 
 67.20  development fund to be created within the county treasury for 
 67.21  use in resource development, forest management, game and fish 
 67.22  habitat improvement, and recreational development and 
 67.23  maintenance of county-administered other natural resources 
 67.24  land.  Any county receiving less than $5,000 annually for the 
 67.25  resource development fund may elect to deposit that amount in 
 67.26  the county general revenue fund; 
 67.27     (b) From the funds remaining, within 30 days of receipt of 
 67.28  the payment to the county, the county treasurer shall pay each 
 67.29  organized township 30 cents per acre of acquired natural 
 67.30  resources land and 7.5 cents per acre of other natural resources 
 67.31  land located within its boundaries.  Payments for natural 
 67.32  resources lands not located in an organized township shall be 
 67.33  deposited in the county general revenue fund.  Payments to 
 67.34  counties and townships pursuant to this paragraph shall be used 
 67.35  to provide property tax levy reduction, except that of the 
 67.36  payments for natural resources lands not located in an organized 
 68.1   township, the county may allocate the amount determined to be 
 68.2   necessary for maintenance of roads in unorganized townships.  
 68.3   Provided that, if the total payment to the county pursuant to 
 68.4   section 477A.12 is not sufficient to fully fund the distribution 
 68.5   provided for in this clause, the amount available shall be 
 68.6   distributed to each township and the county general revenue fund 
 68.7   on a pro rata basis; and 
 68.8      (c) Any remaining funds shall be deposited in the county 
 68.9   general revenue fund.  Provided that, if the distribution to the 
 68.10  county general revenue fund exceeds $35,000, the excess shall be 
 68.11  used to provide property tax levy reduction. 
 68.12     Sec. 27.  Laws 1971, chapter 773, section 1, as amended by 
 68.13  Laws 1974, chapter 351, section 5, Laws 1976, chapter 234, 
 68.14  sections 1 and 7, Laws 1978, chapter 788, section 1, Laws 1981, 
 68.15  chapter 369, section 1, Laws 1983, chapter 302, section 1, Laws 
 68.16  1988, chapter 513, section 1, and Laws 1992, chapter 511, 
 68.17  article 9, section 23, is amended to read: 
 68.18     Section 1.  [ST. PAUL, CITY OF; CAPITAL IMPROVEMENT 
 68.19  PROGRAM.] 
 68.20     Subdivision 1.  Notwithstanding any provision of the 
 68.21  charter of the city of St. Paul, the council of said city shall 
 68.22  have power by a resolution adopted by five affirmative votes of 
 68.23  all its members to authorize the issuance and sale of general 
 68.24  obligation bonds of the city in the years stated and in the 
 68.25  aggregate annual amounts not to exceed the limits prescribed in 
 68.26  subdivision 2 of this section for the payment of which the full 
 68.27  faith and credit of the city is irrevocably pledged. 
 68.28     Subd. 2.  For each of the years through 1998 2003, the city 
 68.29  of St. Paul is authorized to issue bonds in the aggregate 
 68.30  principal amount of $8,000,000 $15,000,000 for each year; or in 
 68.31  an amount equal to one-fourth of one percent of the assessors 
 68.32  estimated market value of taxable property in St. Paul, 
 68.33  whichever is greater, provided that no more than 
 68.34  $8,000,000 $15,000,000 of bonds is authorized to be issued in 
 68.35  any year, unless St. Paul's local general obligation debt as 
 68.36  defined in this section is less than six percent of market value 
 69.1   calculated as of December 31 of the preceding year; but at no 
 69.2   time shall the aggregate principal amount of bonds authorized 
 69.3   exceed $15,700,000 in 1992, $16,600,000 in 1993, $16,600,000 in 
 69.4   1994, $16,600,000 in 1995, $17,500,000 in 1996, $17,500,000 in 
 69.5   1997, and $18,000,000 in 1998, $18,000,000 in 1999, $19,000,000 
 69.6   in 2000, $19,000,000 in 2001, $19,500,000 in 2002, and 
 69.7   $20,000,000 in 2003. 
 69.8      Subd. 3.  For purposes of this section, St. Paul's general 
 69.9   obligation debt shall consist of the principal amount of all 
 69.10  outstanding bonds of (1) the city of St. Paul, the housing and 
 69.11  redevelopment authority of St. Paul, the civic center authority 
 69.12  of St. Paul, and the port authority of St. Paul, for which the 
 69.13  full faith and credit of the city or any of the foregoing 
 69.14  authorities has been pledged; (2) Independent School District 
 69.15  625, for which the full faith and credit of the district has 
 69.16  been pledged; and (3) the county of Ramsey, for which the full 
 69.17  faith and credit of the county has been pledged, reduced by an 
 69.18  amount equal to the principal amount of the outstanding bonds 
 69.19  multiplied by a figure, the numerator of which is equal to the 
 69.20  assessed value net tax capacity of property within the county 
 69.21  outside of the city of St. Paul and the denominator of which is 
 69.22  equal to the assessed value net tax capacity of the county.  
 69.23     There shall be deducted before making the foregoing 
 69.24  computations the outstanding principal amount of all refunded 
 69.25  bonds, all tax or aid anticipation certificates of indebtedness 
 69.26  of the city, the authorities, the school district and the county 
 69.27  for which the full faith and credit of the bodies has been 
 69.28  pledged and all tax increment financed bonds which have not 
 69.29  used, for the prior three consecutive years, general tax levies 
 69.30  or capitalized interest to support annual principal and interest 
 69.31  payments. 
 69.32     Sec. 28.  Laws 1971, chapter 773, section 2, as amended by 
 69.33  Laws 1978, chapter 788, section 2, Laws 1983, chapter 302, 
 69.34  section 2, Laws 1988, chapter 513, section 2, and Laws 1992, 
 69.35  chapter 511, article 9, section 24, is amended to read: 
 69.36     Sec. 2.  The proceeds of all bonds issued pursuant to 
 70.1   section 1 hereof shall be used exclusively for the acquisition, 
 70.2   construction, and repair of capital improvements and, commencing 
 70.3   in the year 1992 and notwithstanding any provision in Laws 1978, 
 70.4   chapter 788, section 5, as amended, for redevelopment project 
 70.5   activities as defined in Minnesota Statutes, section 469.002, 
 70.6   subdivision 14, in accordance with Minnesota Statutes, section 
 70.7   469.041, clause (6).  The amount of proceeds of bonds authorized 
 70.8   by section 1 used for redevelopment project activities shall not 
 70.9   exceed $655,000 in 1992, $690,000 in 1993, $690,000 in 1994, 
 70.10  $690,000 in 1995, $700,000 in 1996, $700,000 in 1997, 
 70.11  and $725,000 in 1998 or any later year. 
 70.12     None of the proceeds of any bonds so issued shall be 
 70.13  expended except upon projects which have been reviewed, and have 
 70.14  received a priority rating, from a capital improvements 
 70.15  committee consisting of 18 members, of whom a majority shall not 
 70.16  hold any paid office or position under the city of St. Paul.  
 70.17  The members shall be appointed by the mayor, with at least four 
 70.18  members from each Minnesota senate district located entirely 
 70.19  within the city and at least two members from each senate 
 70.20  district located partly within the city.  Prior to making an 
 70.21  appointment to a vacancy on the capital improvement budget 
 70.22  committee, the mayor shall consult the legislators of the senate 
 70.23  district in which the vacancy occurs.  The priorities and 
 70.24  recommendations of the committee shall be purely advisory, and 
 70.25  no buyer of any bonds shall be required to see to the 
 70.26  application of the proceeds. 
 70.27     Sec. 29.  Laws 1976, chapter 162, section 1, as amended by 
 70.28  Laws 1982, chapter 474, section 1, Laws 1983, chapter 338, 
 70.29  section 1, Laws 1989 First Special Session chapter 1, article 5, 
 70.30  section 45, and Laws 1991, chapter 167, section 1, is amended to 
 70.31  read: 
 70.32     Section 1.  [RED RIVER OF THE NORTH WATERSHED; TAX BY 
 70.33  WATERSHED DISTRICTS.] 
 70.34     Each watershed district located both within the counties of 
 70.35  Kittson, Marshall, Polk, Pennington, Red Lake, Norman, Clay, 
 70.36  Mahnomen, Clearwater, Roseau, Wilkin, Ottertail, Becker, 
 71.1   Koochiching, Beltrami, Traverse, Grant, Big Stone, Stevens, and 
 71.2   Itasca, which district and within the hydrologic basin of the 
 71.3   Red River of the North that is a member of the Red River 
 71.4   watershed management board, established by a joint powers 
 71.5   agreement in accordance with Minnesota Statutes, section 471.59, 
 71.6   may levy an ad valorem tax not to exceed 0.04836 percent of the 
 71.7   taxable market value of all property within the district.  This 
 71.8   levy shall be in excess of any levy authorized by Minnesota 
 71.9   Statutes, section 103D.905.  The proceeds of one-half of this 
 71.10  levy shall be credited to the district's construction fund and 
 71.11  shall be used for the development, construction, and maintenance 
 71.12  of projects and programs of benefit to the district.  The 
 71.13  proceeds of the remaining one-half of this levy shall be 
 71.14  credited to the general fund of the Red River watershed 
 71.15  management board and shall be used for funding the development, 
 71.16  construction, and maintenance of projects and programs of 
 71.17  benefit to the Red River basin.  The Red River management board 
 71.18  shall adopt criteria for member districts to follow in applying 
 71.19  for funding from the board. 
 71.20     Sec. 30.  Laws 1984, chapter 380, section 1, as amended by 
 71.21  Laws 1994, chapter 505, article 6, section 27, is amended to 
 71.22  read: 
 71.23     Section 1.  [TAX.] 
 71.24     The Anoka county board may levy a tax on of not more than 
 71.25  .01 percent of the taxable market value of taxable 
 71.26  property located within the county outside of excluding any 
 71.27  taxable property taxed by any city in which is situated a for 
 71.28  the support of any free public library, to acquire, better, and 
 71.29  construct county library buildings and to pay principal and 
 71.30  interest on bonds issued for that purpose.  The tax shall be 
 71.31  disregarded in the calculation of levies or limits on levies 
 71.32  provided by Minnesota Statutes, section 373.40, or other law.  
 71.33     Sec. 31.  Laws 1984, chapter 380, section 2, is amended to 
 71.34  read: 
 71.35     Sec. 2.  [AUTHORIZATION.] 
 71.36     The Anoka county board may, by resolution adopted by a 
 72.1   four-sevenths vote, issue and sell general obligation bonds of 
 72.2   the county in the amount of $9,000,000 in the manner provided in 
 72.3   Minnesota Statutes, chapter 475, to acquire, better, and 
 72.4   construct county library buildings.  The total amount of bonds 
 72.5   outstanding at any time shall not exceed $5,000,000.  The county 
 72.6   board, prior to the issuance of any bonds authorized by section 
 72.7   1 and after adopting the resolution as provided above in this 
 72.8   section, shall adopt a resolution by majority vote of the county 
 72.9   board stating the amount, purpose and, in general, the security 
 72.10  to be provided for the bonds, and shall publish the resolution 
 72.11  once each week for two consecutive weeks in the medium of 
 72.12  official and legal publication of the county.  The bonds may be 
 72.13  issued without the submission of the question of their issuance 
 72.14  to the voters of the county library district unless within 21 
 72.15  days after the second publication of the resolution a petition 
 72.16  requesting a referendum, signed by at least ten percent of the 
 72.17  registered voters of the county, is filed with the county 
 72.18  auditor.  If a petition is filed, bonds may be issued unless 
 72.19  disapproved by a majority of the voters of the county library 
 72.20  district, voting on the question of their issuance at a regular 
 72.21  or special election.  The bonds shall not be subject to the 
 72.22  requirements of Minnesota Statutes, sections 475.57 to 475.59.  
 72.23  The maturity years and amounts and interest rates of each series 
 72.24  of bonds shall be fixed so that the maximum amount of principal 
 72.25  and interest to become due in any year, on the bonds of that 
 72.26  series and of all outstanding series issued by or for the 
 72.27  purposes of libraries, shall not exceed an amount equal to 
 72.28  three-fourths of a mill times the assessed value the lesser of 
 72.29  (i) .01 percent of the taxable market value of all taxable 
 72.30  property in the county, which was not excluding any taxable 
 72.31  property taxed in 1981 by any city for the support of any free 
 72.32  public library, as last finally equalized before the issuance of 
 72.33  the series or (ii) $1,250,000.  When the tax levy authorized in 
 72.34  this sections section is collected, it shall be appropriated and 
 72.35  credited to a debt service fund for the bonds.  The tax levy for 
 72.36  the debt service fund under Minnesota Statutes, section 475.61 
 73.1   shall be reduced by the amount available or reasonably 
 73.2   anticipated to be available in the fund to make payments 
 73.3   otherwise payable from the levy pursuant to section 475.61. 
 73.4      Sec. 32.  Laws 1992, chapter 511, article 2, section 52, as 
 73.5   amended by Laws 1997, chapter 231, article 2, section 50, is 
 73.6   amended to read: 
 73.7      Sec. 52.  [WATERSHED DISTRICT LEVIES.] 
 73.8      (a) The Nine Mile Creek watershed district, the 
 73.9   Riley-Purgatory Bluff Creek watershed district, the Minnehaha 
 73.10  Creek watershed district, the Coon Creek watershed district, and 
 73.11  the Lower Minnesota River watershed district may levy in 1992 
 73.12  and thereafter a tax not to exceed $200,000 on property within 
 73.13  the district for the administrative fund.  The levy authorized 
 73.14  under this section is in lieu of Minnesota Statutes, section 
 73.15  103D.905, subdivision 3.  The administrative fund shall be used 
 73.16  for the purposes contained in Minnesota Statutes, section 
 73.17  103D.905, subdivision 3.  The board of managers shall make the 
 73.18  levy for the administrative fund in accordance with Minnesota 
 73.19  Statutes, section 103D.915. 
 73.20     (b) The Wild Rice watershed district may levy, for taxes 
 73.21  payable in 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 
 73.22  and 2002, an ad valorem tax not to exceed $200,000 on property 
 73.23  within the district for the administrative fund.  The additional 
 73.24  $75,000 above the amount authorized in Minnesota Statutes, 
 73.25  section 103D.905, subdivision 3, must be used for (1) costs 
 73.26  incurred in connection with the development and maintenance of 
 73.27  cost-sharing projects with the United States Army Corps of 
 73.28  Engineers or (2) administrative costs associated with 1997 flood 
 73.29  mitigation projects.  The board of managers shall make the levy 
 73.30  for the administrative fund in accordance with Minnesota 
 73.31  Statutes, section 103D.915. 
 73.32     Sec. 33.  Laws 1994, chapter 587, article 11, is amended by 
 73.33  adding a section to read: 
 73.34     Sec. 5a.  [POLITICAL SUBDIVISION.] 
 73.35     For purposes of Minnesota Statutes, section 275.066, the 
 73.36  Chisholm/Hibbing airport authority is a political subdivision of 
 74.1   the state of Minnesota. 
 74.2      Sec. 34.  Laws 1997, chapter 231, article 2, section 63, 
 74.3   subdivision 1, is amended to read: 
 74.4      Subdivision 1.  [IMPROVEMENTS MADE TO CERTAIN APARTMENTS.] 
 74.5   (a) Notwithstanding any other provisions to the contrary, the 
 74.6   market value increase resulting from improvements made after the 
 74.7   effective date of this act and prior to January 1, 1999 2000, to 
 74.8   qualifying property located in the city of Brooklyn Center, 
 74.9   Richfield, or St. Louis Park shall be excluded for assessment 
 74.10  purposes under the conditions provided in this subdivision.  
 74.11     (b) "Qualifying property" means property that meets all of 
 74.12  the following criteria: 
 74.13     (1) the building is at least 30 years old at the time of 
 74.14  the improvements; 
 74.15     (2) the building is residential real estate of four or more 
 74.16  units and is classified under Minnesota Statutes, section 
 74.17  273.13, subdivision 25, as class 4a, 4c, or 4d property; and 
 74.18     (3) the total cost of the qualifying improvements exceeds 
 74.19  $5,000 $2,500 per unit. 
 74.20     (c) A building permit must have been issued prior to the 
 74.21  commencement of the improvements.  Only improvements to the 
 74.22  residential structure and garages qualify under this 
 74.23  subdivision.  The assessor shall require an application, 
 74.24  including, if unknown by the assessor, documentation of the age 
 74.25  of the building from the owner.  The application may be filed 
 74.26  subsequent to the date of the building permit provided that the 
 74.27  application is filed prior to the next assessment date. 
 74.28     (d) If the property qualifies under this subdivision, the 
 74.29  assessor shall note the qualifying value of the improvements on 
 74.30  the property's record and that amount shall be subtracted from 
 74.31  the qualifying property's market value for the five assessment 
 74.32  years immediately following the year in which the improvements 
 74.33  were completed, at which time the assessor shall determine the 
 74.34  property's estimated market value, and 20 percent of the 
 74.35  qualifying value shall be added back in each of the next five 
 74.36  subsequent assessment years.  The assessor may require from the 
 75.1   owner any documentation necessary to verify that the cost of 
 75.2   improvements exceed the $5,000 $2,500 per unit minimum.  
 75.3      Sec. 35.  Laws 1997, chapter 231, article 2, section 68, 
 75.4   subdivision 1, is amended to read: 
 75.5      Subdivision 1.  [APPLICATION.] To facilitate a review by 
 75.6   the 1998 legislature of the property taxation of elderly 
 75.7   assisted living facilities and the development of standards and 
 75.8   criteria for the taxation of these facilities, this section: 
 75.9      (1) requires the commissioner of revenue to conduct a 
 75.10  survey of the tax status of these facilities under subdivision 
 75.11  2; and 
 75.12     (2) prohibits changes in assessment practices and policies 
 75.13  regarding these facilities under subdivision 3. 
 75.14     Sec. 36.  Laws 1997, chapter 231, article 2, section 68, 
 75.15  subdivision 3, is amended to read: 
 75.16     Subd. 3.  [MORATORIUM ON CHANGES IN ASSESSMENT PRACTICES.] 
 75.17  (a) An assessor may not change the current practices or policies 
 75.18  used generally in assessing elderly assisted living facilities. 
 75.19     (b) An assessor may not change the assessment of an 
 75.20  existing elderly assisted living facility, unless the change is 
 75.21  made as a result of a change in ownership, occupancy, or use of 
 75.22  the facility.  This paragraph does not apply to: 
 75.23     (1) a facility that was constructed during calendar year 
 75.24  1997 or 1998; 
 75.25     (2) a facility that was converted to an elderly assisted 
 75.26  living facility during calendar year 1997 or 1998; or 
 75.27     (3) a change in market value. 
 75.28     (c) This subdivision expires and no longer applies on the 
 75.29  earlier of: 
 75.30     (1) the enactment of legislation establishing criteria for 
 75.31  the property taxation of elderly assisted living facilities; or 
 75.32     (2) final adjournment of the 1998 legislature 1999 regular 
 75.33  legislative session. 
 75.34     Sec. 37.  [CHILD CARE FACILITY.] 
 75.35     In connection with the capital expenditure authority in 
 75.36  Minnesota Statutes, section 473.39, subdivision 1e, the 
 76.1   metropolitan council shall consider incorporating in a new 
 76.2   transfer garage a child care facility to assist in the 
 76.3   recruitment and retention of metropolitan transit drivers. 
 76.4      Sec. 38.  [QUALIFIED PROPERTY.] 
 76.5      A contiguous property located within a county adjacent to a 
 76.6   county containing a city of the first class and within the 
 76.7   metropolitan area as defined in Minnesota Statutes, section 
 76.8   473.121, shall be valued and classified under sections 39 and 
 76.9   40, provided it meets the following conditions: 
 76.10     (1) the property does not exceed 60 acres; 
 76.11     (2) the property includes a sculpture garden open to the 
 76.12  public, either free of charge or for a nominal admission fee; 
 76.13     (3) the property includes a system of internal roads and 
 76.14  paths for pedestrian use and an amphitheater for live artistic 
 76.15  performances; 
 76.16     (4) the property is used for a summer youth art camp; 
 76.17     (5) the property is used for seminars for aspiring and 
 76.18  professional artists; 
 76.19     (6) the property includes the homestead of the owner; and 
 76.20     (7) the property has been owned by the owner for at least 
 76.21  40 years. 
 76.22     Sec. 39.  [CLASSIFICATION.] 
 76.23     Notwithstanding any law to the contrary, a property 
 76.24  qualifying under section 38 shall be classified as class 2a 
 76.25  property under Minnesota Statutes, section 273.13, subdivision 
 76.26  23. 
 76.27     Sec. 40.  [VALUATION.] 
 76.28     Notwithstanding Minnesota Statutes, section 273.11, 
 76.29  subdivision 1, the land qualifying under section 38 shall be 
 76.30  valued as if it were agricultural property, using a per acre 
 76.31  valuation equal to the average per acre valuation of similar 
 76.32  agricultural property within the county. 
 76.33     Sec. 41.  [SPECIAL ASSESSMENT DEFERRAL AUTHORIZED.] 
 76.34     Notwithstanding Minnesota Statutes, chapter 429, a city may 
 76.35  defer the payment of any special assessment levied against a 
 76.36  property qualifying under section 38 as determined by the city. 
 77.1      Sec. 42.  [TRANSFER OF PROPERTY; PAYMENT OF DEFERRED 
 77.2   TAXES.] 
 77.3      Subdivision 1.  [ADDITIONAL TAX.] The assessor shall make a 
 77.4   separate determination of the market value and net tax capacity 
 77.5   of a property qualifying under section 38 as if sections 39 and 
 77.6   40 did not apply.  The tax based upon the appropriate local tax 
 77.7   rate applicable to such property in the taxing district shall be 
 77.8   recorded on the property assessment records. 
 77.9      Subd. 2.  [RECAPTURE.] (a) Property or any portion thereof 
 77.10  qualifying under section 38 is subject to additional taxes if (1)
 77.11  ownership of the property is transferred to anyone other than 
 77.12  the spouse or child of the current owner, or (2) the current 
 77.13  owner or the spouse or child of the current owner has not 
 77.14  conveyed or entered into a contract before July 1, 2002, to 
 77.15  convey the property to a nonprofit foundation or corporation 
 77.16  created to own and operate the property as an art park providing 
 77.17  the services included in section 38, clauses (2) to (5).  
 77.18     (b) The additional taxes are imposed at the earlier of (1) 
 77.19  the year following transfer of ownership to anyone other than 
 77.20  the spouse or child of the current owner or a nonprofit 
 77.21  foundation or corporation created to own and operate the 
 77.22  property as an art park, or (2) for taxes payable in 2003.  The 
 77.23  additional taxes are equal to the difference between the taxes 
 77.24  determined under sections 39 and 40 and the amount determined 
 77.25  under subdivision 1 for all years that the property qualified 
 77.26  under section 38.  The additional taxes must be extended against 
 77.27  the property on the tax list for the current year; provided, 
 77.28  however, that no interest or penalties may be levied on the 
 77.29  additional taxes if timely paid. 
 77.30     Subd. 3.  [CURRENT OWNER.] For purposes of this section, 
 77.31  "current owner" means the owner of property qualifying under 
 77.32  section 38 on the date of final enactment of this act or that 
 77.33  owner's spouse or child.  
 77.34     Subd. 4.  [NONPROFIT FOUNDATION OR CORPORATION.] For 
 77.35  purposes of this act, "nonprofit foundation or corporation" 
 77.36  means a nonprofit entity created to own and operate the property 
 78.1   as an art park providing the services included in section 38, 
 78.2   clauses (2) to (5). 
 78.3      Sec. 43.  [WATER SUPPLY PROJECTS OF MORE THAN $15,000,000.] 
 78.4      Notwithstanding Minnesota Statutes, chapter 410, or 
 78.5   Minneapolis city charter, chapter 15, section 9, the city of 
 78.6   Minneapolis and its board of estimate and taxation may issue and 
 78.7   sell bonds or incur other indebtedness for a capital improvement 
 78.8   project related to water supply that in all phases from 
 78.9   inception to completion exceeds $15,000,000 without submitting 
 78.10  the question of issuing such obligations or incurring such 
 78.11  indebtedness to the electorate for approval. 
 78.12     Sec. 44.  [JENSEN-NOPEMING SPECIAL DISTRICT.] 
 78.13     Subdivision 1.  [SPECIAL DISTRICT MAY BE ESTABLISHED.] The 
 78.14  counties of Carlton and St. Louis may establish the 
 78.15  Jensen-Nopeming Special District with authority to levy a 
 78.16  property tax not greater than $200,000 annually for the capital 
 78.17  costs of the Chris Jensen Nursing Home and the Nopeming Nursing 
 78.18  Home.  The tax may be levied on taxable property in the 
 78.19  territory described in Minnesota Statutes, section 458D.02, 
 78.20  subdivision 2.  The district shall be governed by a board 
 78.21  composed of those members of the St. Louis county board who 
 78.22  represent territory subject to taxation by the district and two 
 78.23  members of the Carlton county board elected by the Carlton 
 78.24  county board to serve terms provided by the board.  The proceeds 
 78.25  of the tax may be used only for capital costs of the nursing 
 78.26  homes.  As provided by Minnesota Statutes, chapter 475, debt may 
 78.27  be incurred by the district for capital costs of the nursing 
 78.28  home and the proceeds of the tax may be pledged to secure the 
 78.29  debt.  The district may enter into appropriate agreements with 
 78.30  either county to facilitate the incurrence of debt or otherwise 
 78.31  discharge its duties under this section. 
 78.32     By April 15, 1999, the St. Louis county board shall 
 78.33  complete a study examining the long-term profitability of Chris 
 78.34  Jensen and Nopeming nursing homes.  Upon completion of the 
 78.35  study, the board must adopt a plan to eliminate any future 
 78.36  property tax revenue dedicated to operating costs of the two 
 79.1   facilities. 
 79.2      Subd. 2.  [LOCAL APPROVAL.] Subdivision 1 is effective the 
 79.3   day after the county boards of Carlton and St. Louis counties 
 79.4   comply with the provisions of Minnesota Statutes, section 
 79.5   645.021, subdivision 3. 
 79.6      Sec. 45.  [CITIES OF MINNEAPOLIS AND ST. PAUL; TRANSIT ZONE 
 79.7   TAX.] 
 79.8      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 79.9   section, the following terms have the meanings given. 
 79.10     (b) "City" is the city of Minneapolis or the city of St. 
 79.11  Paul. 
 79.12     (c) "Downtown taxing district" means: 
 79.13     (1) for the city of Minneapolis, the geographic area in 
 79.14  which the city may impose the tax under Laws 1986, chapter 396, 
 79.15  section 4, as amended by Laws 1986, chapter 400, section 44; and 
 79.16     (2) for the city of St. Paul, taxing wards numbers 3 and 4. 
 79.17     (d) "Purchase agreement" includes an option agreement to 
 79.18  acquire a leasehold interest that includes an option to purchase.
 79.19     (e) "Transit zone tax capacity" means the reduction in net 
 79.20  tax capacity of transit zone property in the downtown taxing 
 79.21  district that result from the reduced class rate under the 
 79.22  provisions of Minnesota Statutes, section 273.13, subdivision 
 79.23  24, paragraph (c), or a successor provision.  Transit zone tax 
 79.24  capacity is determined without regard to captured or original 
 79.25  net tax capacity under Minnesota Statutes, section 469.177, or 
 79.26  to the distribution or contribution value under Minnesota 
 79.27  Statutes, section 473F.08. 
 79.28     Subd. 2.  [EXEMPTION.] The tax under this section does not 
 79.29  apply to: 
 79.30     (1) property for which a building permit was issued before 
 79.31  December 31, 1998; or 
 79.32     (2) property for which a building permit was issued before 
 79.33  June 30, 2001, if: 
 79.34     (i) at least 50 percent of the land on which the structure 
 79.35  is to be built has been acquired or is the subject of signed 
 79.36  purchase agreements or signed options as of March 15, 1998, by 
 80.1   the entity that proposes construction of the project or an 
 80.2   affiliate of the entity; 
 80.3      (ii) signed agreements have been entered into with one 
 80.4   entity or with affiliated entities to lease for the account of 
 80.5   the entity or affiliated entities at least 50 percent of the 
 80.6   square footage of the structure or the owner of the structure 
 80.7   will occupy at least 50 percent of the square footage of the 
 80.8   structure; and 
 80.9      (iii)(A) the project proposer has submitted the completed 
 80.10  data portions of an environmental assessment worksheet by 
 80.11  December 31, 1998, or (B) a notice of determination of adequacy 
 80.12  of an environmental impact statement has been published by April 
 80.13  1, 1999, or (C) an alternative urban areawide review has been 
 80.14  completed by April 1, 1999; or 
 80.15     (3) property for which a building permit is issued before 
 80.16  July 30, 1999, if: 
 80.17     (i) at least 50 percent of the land on which the structure 
 80.18  is to be built has been acquired or is the subject of signed 
 80.19  purchase agreements as of March 31, 1998, by the entity that 
 80.20  proposes construction of the project or an affiliate of the 
 80.21  entity; 
 80.22     (ii) a signed agreement has been entered into between the 
 80.23  building developer and a tenant to lease for its own account at 
 80.24  least 200,000 square feet of space in the building; 
 80.25     (iii) a signed letter of intent is entered into by July 1, 
 80.26  1998, between the building developer and the tenant to lease the 
 80.27  space for its own account; and 
 80.28     (iv) the environmental review process required by state law 
 80.29  was commenced by December 31, 1998; or 
 80.30     (4)(i) property a portion of the land on which the 
 80.31  structure is to be built is the subject of condemnation 
 80.32  proceedings as of March 15, 1998; and 
 80.33     (ii) signed agreements have been entered into with one 
 80.34  entity or with affiliated entities to lease for the account of 
 80.35  the entity or affiliated entities at least 50 percent of the 
 80.36  square footage of the structure or the owner of the structure 
 81.1   will occupy at least 50 percent of the square footage of the 
 81.2   structure. 
 81.3      Subd. 3.  [AUTHORITY TO IMPOSE.] (a) The city may, by 
 81.4   ordinance, impose a tax on transit zone tax capacity within the 
 81.5   downtown taxing district. 
 81.6      (b) The rate of the tax equals the sum of the ad valorem 
 81.7   property tax rates imposed by the county, city, school district, 
 81.8   and special taxing districts in the city that apply for the 
 81.9   taxable year. 
 81.10     (c) The tax equals the rate multiplied by the transit zone 
 81.11  tax capacity. 
 81.12     (d) The tax imposed is not included in the calculation of 
 81.13  levies or levy limits. 
 81.14     Subd. 4.  [COLLECTION AND ADMINISTRATION.] Any tax imposed 
 81.15  under this section is payable at the same time and in the same 
 81.16  manner and must be collected and imposed as provided by general 
 81.17  law for ad valorem taxes.  Any tax not paid by the due date is 
 81.18  subject to the same penalty and interest as ad valorem taxes not 
 81.19  paid by the due date. 
 81.20     Subd. 5.  [USE OF REVENUES.] The revenues from the tax 
 81.21  imposed under this section must be deposited in a separate 
 81.22  account on the city's books and records.  Money in the account 
 81.23  may only be used in the downtown taxing district to provide 
 81.24  transit services or transit related projects that directly 
 81.25  increase the feasibility of existing or proposed transit system 
 81.26  services or improvements. 
 81.27     Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
 81.28  day following final enactment and applies to the cities of 
 81.29  Minneapolis and St. Paul under the provisions of Minnesota 
 81.30  Statutes, section 645.023. 
 81.31     Sec. 46.  [APPLICATION.] 
 81.32     Sections 23 and 24 apply in the counties of Anoka, Carver, 
 81.33  Dakota, Hennepin, Ramsey, Scott, and Washington.  
 81.34     Sec. 47.  [REPEALER.] 
 81.35     Minnesota Statutes 1996, section 365A.09, is repealed. 
 81.36     Sec. 48.  [EFFECTIVE DATE.] 
 82.1      Section 1, clause (30), is effective for the 1998 
 82.2   assessment for taxes payable in 1999 through assessment year 
 82.3   2004, taxes payable in 2005, and section 1, clause (31), is 
 82.4   effective beginning with the 1998 assessment payable 1999 and 
 82.5   thereafter, except that for the 1998 assessment, the filing 
 82.6   requirement under Minnesota Statutes, section 272.025, 
 82.7   subdivision 3, for both clauses (30) and (31) shall be 60 days 
 82.8   after enactment of this act.  Sections 2, 29, and 43 are 
 82.9   effective the day following final enactment.  Sections 3 to 5 
 82.10  and 8 are effective for the 1998 assessment, taxes payable in 
 82.11  1999 and thereafter.  Sections 6 and 7 are effective for real 
 82.12  estate sales and transfers occurring on or after July 1, 1998.  
 82.13  Sections 9, 18, paragraph (c), and 19 to 21 are effective 
 82.14  beginning for property taxes assessed in 1998 and payable in 
 82.15  1999.  Section 10 is effective for aids payable in 1999, 2000, 
 82.16  and 2001.  Section 12 is effective beginning with notices 
 82.17  prepared in 1998 for taxes payable in 1999.  Section 13 is 
 82.18  effective for public hearings held in 1998 and thereafter.  
 82.19  Sections 14, 23, 24, and 46 are effective for taxes payable in 
 82.20  1999 and thereafter.  Section 15 is effective for mortgages 
 82.21  recorded or registered on or after July 1, 1998.  Section 25 
 82.22  confirms the original intent of the legislature in enacting the 
 82.23  abatement law and is effective retroactively to the same time 
 82.24  Minnesota Statutes, sections 469.1813 to 469.1815, became 
 82.25  effective.  Section 26 is effective for payments to counties 
 82.26  after June 30, 1998.  Sections 27 and 28 are effective upon 
 82.27  compliance by the governing body of the city of St. Paul with 
 82.28  Minnesota Statutes, section 645.021, subdivision 3.  Sections 30 
 82.29  and 31 are effective the day after the chief clerical officer of 
 82.30  Anoka county complies with Minnesota Statutes, section 645.021, 
 82.31  subdivision 3.  Sections 32 and 33 are effective for taxes 
 82.32  levied in 1997, payable in 1998, and thereafter.  Section 34 is 
 82.33  effective for each of the cities of Brooklyn Center, Richfield, 
 82.34  and St. Louis Park upon compliance with Minnesota Statutes, 
 82.35  section 645.021, subdivision 3, by the governing body of that 
 82.36  city.  Sections 38 to 42 are effective beginning with taxes 
 83.1   payable in 1998 and ending with taxes payable in 2003.  Section 
 83.2   48, subdivision 1, is effective the day following final 
 83.3   enactment.  
 83.4      An applicant for class 4d for taxes payable in 1999 may 
 83.5   withdraw its application by June 1, 1998, if the provisions 
 83.6   added to Minnesota Statutes, section 273.126, subdivision 3, by 
 83.7   section 9, would require the applicant to increase the percent 
 83.8   of units that must be made available for section 8 tenants. 
 83.9                              ARTICLE 4 
 83.10                 GENERAL LEVY LIMITS AND STATE AIDS 
 83.11     Section 1.  Minnesota Statutes 1997 Supplement, section 
 83.12  275.70, subdivision 5, is amended to read: 
 83.13     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
 83.14  portions of ad valorem taxes levied by a local governmental unit 
 83.15  for the following purposes or in the following manner: 
 83.16     (1) to pay the costs of the principal and interest on 
 83.17  bonded indebtedness or to reimburse for the amount of liquor 
 83.18  store revenues used to pay the principal and interest due on 
 83.19  municipal liquor store bonds in the year preceding the year for 
 83.20  which the levy limit is calculated; 
 83.21     (2) to pay the costs of principal and interest on 
 83.22  certificates of indebtedness issued for any corporate purpose 
 83.23  except for the following: 
 83.24     (i) tax anticipation or aid anticipation certificates of 
 83.25  indebtedness; 
 83.26     (ii) certificates of indebtedness issued under sections 
 83.27  298.28 and 298.282; 
 83.28     (iii) certificates of indebtedness used to fund current 
 83.29  expenses or to pay the costs of extraordinary expenditures that 
 83.30  result from a public emergency; or 
 83.31     (iv) certificates of indebtedness used to fund an 
 83.32  insufficiency in tax receipts or an insufficiency in other 
 83.33  revenue sources; 
 83.34     (3) to provide for the bonded indebtedness portion of 
 83.35  payments made to another political subdivision of the state of 
 83.36  Minnesota; 
 84.1      (4) to fund payments made to the Minnesota state armory 
 84.2   building commission under section 193.145, subdivision 2, to 
 84.3   retire the principal and interest on armory construction bonds; 
 84.4      (5) for unreimbursed expenses related to flooding that 
 84.5   occurred during the first half of calendar year 1997, as allowed 
 84.6   by the commissioner of revenue under section 275.74, paragraph 
 84.7   (b); 
 84.8      (6) for local units of government located in an area 
 84.9   designated by the Federal Emergency Management Agency pursuant 
 84.10  to a major disaster declaration issued for Minnesota by 
 84.11  President Clinton after April 1, 1997, and before June 11, 1997, 
 84.12  for the amount of tax dollars lost due to abatements authorized 
 84.13  under section 273.123, subdivision 7, and Laws 1997, chapter 
 84.14  231, article 2, section 64, to the extent that they are related 
 84.15  to the major disaster and to the extent that neither the state 
 84.16  or federal government reimburses the local government for the 
 84.17  amount lost; 
 84.18     (7) property taxes approved by voters which are levied 
 84.19  against the referendum market value as provided under section 
 84.20  275.61; 
 84.21     (8) to fund matching requirements needed to qualify for 
 84.22  federal or state grants or programs to the extent that either 
 84.23  (i) the matching requirement exceeds the matching requirement in 
 84.24  calendar year 1997, or (ii) it is a new matching requirement 
 84.25  that didn't exist prior to 1998; and 
 84.26     (9) to pay the expenses reasonably and necessarily incurred 
 84.27  in preparing for or repairing the effects of natural disaster 
 84.28  including the occurrence or threat of widespread or severe 
 84.29  damage, injury, or loss of life or property resulting from 
 84.30  natural causes, in accordance with standards formulated by the 
 84.31  emergency services division of the state department of public 
 84.32  safety, as allowed by the commissioner of revenue under section 
 84.33  275.74, paragraph (b).; 
 84.34     (10) for the amount of tax revenue lost due to abatements 
 84.35  authorized under section 273.123, subdivision 7, for damage 
 84.36  related to the tornadoes of March 29, 1998, to the extent that 
 85.1   neither the state or federal government provides reimbursement 
 85.2   for the amount lost; 
 85.3      (11) pay amounts required to correct an error in the levy 
 85.4   certified to the county auditor by a city or county in a levy 
 85.5   year, but only to the extent that when added to the preceding 
 85.6   year's levy it is not in excess of an applicable statutory, 
 85.7   special law or charter limitation, or the limitation imposed on 
 85.8   the governmental subdivision by sections 275.70 to 275.74 in the 
 85.9   preceding levy year; and 
 85.10     (12) to pay an abatement under section 469.1815. 
 85.11     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
 85.12  275.70, is amended by adding a subdivision to read: 
 85.13     Subd. 6.  [MATCHING FUND REQUIREMENTS.] The special levy 
 85.14  provided in subdivision 5, clause (8), does not include the 
 85.15  increased direct and indirect costs related to general increases 
 85.16  in program costs where there is no mandated increase regarding 
 85.17  the matching fund requirements.  Specifically, but without 
 85.18  limitation, the following provisions apply to the special levy 
 85.19  authorization in subdivision 5, clause (8):  (1) increases in 
 85.20  direct or indirect income maintenance administrative costs are 
 85.21  not included; (2) increases for social services and social 
 85.22  services administration are included, but only to the extent 
 85.23  that the minimum local share amount needed to receive community 
 85.24  social service aids exceeds the amount levied for social 
 85.25  services and social services administration for the taxes 
 85.26  payable year 1997; and (3) increases in county costs for Title 
 85.27  IV-E Foster Care Services over the amount levied for the taxes 
 85.28  payable year 1997 are included to the extent the amount from 
 85.29  both years represents the local matching fund requirement for 
 85.30  the federal grant.  
 85.31     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
 85.32  275.71, subdivision 2, is amended to read: 
 85.33     Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
 85.34  local governmental unit for taxes levied in 1997 shall be equal 
 85.35  to the sum of: 
 85.36     (1) the amount the local governmental unit levied in 1996, 
 86.1   less any amount levied for debt, as reported to the department 
 86.2   of revenue under section 275.62, subdivision 1, clause (1), and 
 86.3   less any tax levied in 1996 against market value as provided for 
 86.4   in section 275.61; 
 86.5      (2) the amount of aids the local governmental unit was 
 86.6   certified to receive in calendar year 1997 under sections 
 86.7   477A.011 to 477A.03 before any reductions for state tax 
 86.8   increment financing aid under section 273.1399, subdivision 5; 
 86.9      (3) the amount of homestead and agricultural credit aid the 
 86.10  local governmental unit was certified to receive under section 
 86.11  273.1398 in calendar year 1997 before any reductions for tax 
 86.12  increment financing aid under section 273.1399, subdivision 5; 
 86.13     (4) the amount of local performance aid the local 
 86.14  governmental unit was certified to receive in calendar year 1997 
 86.15  under section 477A.05; and 
 86.16     (5) the amount of any payments certified to the local 
 86.17  government unit in 1997 under sections 298.28 and 298.282. 
 86.18     If a governmental unit was not required to report under 
 86.19  section 275.62 for taxes levied in 1997, the commissioner shall 
 86.20  request information on levies used for debt from the local 
 86.21  governmental unit and adjust its levy limit base accordingly. 
 86.22     (b) The levy limit base for a local governmental unit for 
 86.23  taxes levied in 1998 is limited equal to its adjusted levy limit 
 86.24  base in the previous year, subject to any adjustments under 
 86.25  section 275.72 and multiplied by the increase that would have 
 86.26  occurred under subdivision 3, clause (3), if that clause had 
 86.27  been in effect for taxes levied in 1997. 
 86.28     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
 86.29  275.71, subdivision 3, is amended to read: 
 86.30     Subd. 3.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied 
 86.31  in 1997 and 1998, the adjusted levy limit is equal to the levy 
 86.32  limit base computed under subdivision 2 or section 275.72, 
 86.33  multiplied by: 
 86.34     (1) one plus a percentage equal to the percentage growth in 
 86.35  the implicit price deflator; and 
 86.36     (2) for all cities and for counties outside of the 
 87.1   seven-county metropolitan area, one plus a percentage equal to 
 87.2   the percentage increase in number of households, if any, for the 
 87.3   most recent 12-month period for which data is available; and 
 87.4      (3) for counties located in the seven-county metropolitan 
 87.5   area, one plus a percentage equal to the greater of the 
 87.6   percentage increase in the number of households in the county or 
 87.7   the percentage increase in the number of households in the 
 87.8   entire seven-county metropolitan area for the most recent 
 87.9   12-month period for which data is available; and 
 87.10     (3) one plus a percentage equal to the percentage increase 
 87.11  in the taxable market value of the jurisdiction due to new 
 87.12  construction of class 3 and class 5 property, as defined in 
 87.13  section 273.13, subdivisions 24 and 31, for the most recent year 
 87.14  for which data are available. 
 87.15     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
 87.16  275.71, subdivision 4, is amended to read: 
 87.17     Subd. 4.  [PROPERTY TAX LEVY LIMIT.] For taxes levied in 
 87.18  1997 and 1998, the property tax levy limit for a local 
 87.19  governmental unit is equal to its adjusted levy limit base 
 87.20  determined under subdivision 3 plus any additional levy 
 87.21  authorized under section 275.73, which is levied against net tax 
 87.22  capacity, reduced by the sum of (1) the total amount of aids 
 87.23  that the local governmental unit is certified to receive under 
 87.24  sections 477A.011 to 477A.014, (2) homestead and agricultural 
 87.25  aids it is certified to receive under section 273.1398, (3) 
 87.26  local performance aid it is certified to receive under section 
 87.27  477A.05, and (4) taconite aids under sections 298.28 and 298.282 
 87.28  including any aid which was required to be placed in a special 
 87.29  fund for expenditure in the next succeeding year, (5) flood loss 
 87.30  aid under section 273.1383, and (6) low-income housing aid under 
 87.31  sections 477A.06 and 477A.065. 
 87.32     Sec. 6.  Minnesota Statutes 1997 Supplement, section 
 87.33  275.72, is amended by adding a subdivision to read: 
 87.34     Subd. 2a.  [ADJUSTMENTS FOR CHANGES IN SERVICE LEVELS.] If 
 87.35  a local governmental unit, as a result of an annexation 
 87.36  agreement prior to January 1, 1997, has different tax rates in 
 88.1   various parts of the jurisdiction due to different service 
 88.2   levels, it may petition the commissioner of revenue to adjust 
 88.3   its levy limits established under section 275.71.  The 
 88.4   commissioner shall adjust the levy limits to reflect scheduled 
 88.5   changes in tax rates related to increasing service levels in 
 88.6   areas currently receiving less city services.  The local 
 88.7   governmental unit shall provide the commissioner with any 
 88.8   information the commissioner deems necessary in making the levy 
 88.9   limit adjustment. 
 88.10     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
 88.11  477A.011, subdivision 36, is amended to read: 
 88.12     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
 88.13  paragraphs (b), (c), and (d), "city aid base" means, for each 
 88.14  city, the sum of the local government aid and equalization aid 
 88.15  it was originally certified to receive in calendar year 1993 
 88.16  under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
 88.17  and 5, and the amount of disparity reduction aid it received in 
 88.18  calendar year 1993 under Minnesota Statutes 1992, section 
 88.19  273.1398, subdivision 3. 
 88.20     (b) For aids payable in 1996 and thereafter, a city that in 
 88.21  1992 or 1993 transferred an amount from governmental funds to 
 88.22  its sewer and water fund, which amount exceeded its net levy for 
 88.23  taxes payable in the year in which the transfer occurred, has a 
 88.24  "city aid base" equal to the sum of (i) its city aid base, as 
 88.25  calculated under paragraph (a), and (ii) one-half of the 
 88.26  difference between its city aid distribution under section 
 88.27  477A.013, subdivision 9, for aids payable in 1995 and its city 
 88.28  aid base for aids payable in 1995. 
 88.29     (c) The city aid base for any city with a population less 
 88.30  than 500 is increased by $40,000 for aids payable in calendar 
 88.31  year 1995 and thereafter, and the maximum amount of total aid it 
 88.32  may receive under section 477A.013, subdivision 9, paragraph 
 88.33  (c), is also increased by $40,000 for aids payable in calendar 
 88.34  year 1995 only, provided that: 
 88.35     (i) the average total tax capacity rate for taxes payable 
 88.36  in 1995 exceeds 200 percent; 
 89.1      (ii) the city portion of the tax capacity rate exceeds 100 
 89.2   percent; and 
 89.3      (iii) its city aid base is less than $60 per capita. 
 89.4      (d) The city aid base for a city is increased by $20,000 in 
 89.5   1998 and thereafter and the maximum amount of total aid it may 
 89.6   receive under section 477A.013, subdivision 9, paragraph (c), is 
 89.7   also increased by $20,000 in calendar year 1998 only, provided 
 89.8   that: 
 89.9      (i) the city has a population in 1994 of 2,500 or more; 
 89.10     (ii) the city is located in a county, outside of the 
 89.11  metropolitan area, which contains a city of the first class; 
 89.12     (iii) the city's net tax capacity used in calculating its 
 89.13  1996 aid under section 477A.013 is less than $400 per capita; 
 89.14  and 
 89.15     (iv) at least four percent of the total net tax capacity, 
 89.16  for taxes payable in 1996, of property located in the city is 
 89.17  classified as railroad property. 
 89.18     (e) The city aid base for a city is increased by $200,000 
 89.19  in 1999 and thereafter and the maximum amount of total aid it 
 89.20  may receive under section 477A.013, subdivision 9, paragraph 
 89.21  (c), is also increased by $200,000 in calendar year 1999 only, 
 89.22  provided that: 
 89.23     (i) the city was incorporated as a statutory city after 
 89.24  December 1, 1993; 
 89.25     (ii) its city aid base does not exceed $5,600; and 
 89.26     (iii) the city had a population in 1996 of 5,000 or more. 
 89.27     (f) The city aid base for a city is increased by $450,000 
 89.28  in 1999 to 2008 and the maximum amount of total aid it may 
 89.29  receive under section 477A.013, subdivision 9, paragraph (c), is 
 89.30  also increased by $450,000 in calendar year 1999 only, provided 
 89.31  that: 
 89.32     (i) the city had a population in 1996 of at least 50,000; 
 89.33     (ii) its population had increased by at least 40 percent in 
 89.34  the ten-year period ending in 1996; and 
 89.35     (iii) its city's net tax capacity for aids payable in 1998 
 89.36  is less than $700 per capita. 
 90.1      (g) Beginning in 2002, the city aid base for a city is 
 90.2   equal to the sum of its city aid base in 2001 and the amount of 
 90.3   additional aid it was certified to receive under section 477A.06 
 90.4   in 2001.  For 2002 only, the maximum amount of total aid a city 
 90.5   may receive under section 477A.013, subdivision 9, paragraph 
 90.6   (c), is also increased by the amount it was certified to receive 
 90.7   under section 477A.06 in 2001. 
 90.8      Sec. 8.  Minnesota Statutes 1996, section 477A.03, 
 90.9   subdivision 2, is amended to read: 
 90.10     Subd. 2.  [ANNUAL APPROPRIATION.] (a) A sum sufficient to 
 90.11  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 90.12  annually appropriated from the general fund to the commissioner 
 90.13  of revenue.  For aids payable in 1996 and thereafter, the total 
 90.14  aids paid under sections 477A.013, subdivision 9, and 477A.0122 
 90.15  are the amounts certified to be paid in the previous year, 
 90.16  adjusted for inflation as provided under subdivision 3.  
 90.17     (b) Aid payments to counties under section 477A.0121 are 
 90.18  limited to $20,265,000 in 1996.  Aid payments to counties under 
 90.19  section 477A.0121 are limited to $27,571,625 in 1997.  For aid 
 90.20  payable in 1998 and thereafter, the total aids paid under 
 90.21  section 477A.0121 are the amounts certified to be paid in the 
 90.22  previous year, adjusted for inflation as provided under 
 90.23  subdivision 3. 
 90.24     (c)(i) For aids payable in 1998 and thereafter, the total 
 90.25  aids paid to counties under section 477A.0122 are the amounts 
 90.26  certified to be paid in the previous year, adjusted for 
 90.27  inflation as provided under subdivision 3. 
 90.28     (ii) Aid payments to counties under section 477A.0122 in 
 90.29  2000 are further increased by an additional $30,000,000 in 2000. 
 90.30     (d) Aid payments to cities in 1999 under section 477A.013, 
 90.31  subdivision 9, are limited to $380,565,489.  For aids payable in 
 90.32  2000 and 2001, the total aids paid under section 477A.013, 
 90.33  subdivision 9, are the amounts certified to be paid in the 
 90.34  previous year, adjusted for inflation as provided under 
 90.35  subdivision 3.  For aids payable in 2002, the total aids paid 
 90.36  under section 477A.013, subdivision 9, are the amounts certified 
 91.1   to be paid in the previous year, adjusted for inflation as 
 91.2   provided under subdivision 3, and increased by the amount 
 91.3   certified to be paid in 2001 under section 477A.06.  For aids 
 91.4   payable in 2003 and thereafter, the total aids paid under 
 91.5   section 477A.013, subdivision 9, are the amounts certified to be 
 91.6   paid in the previous year, adjusted for inflation as provided 
 91.7   under subdivision 3.  The additional amount authorized under 
 91.8   subdivision 4 is not included when calculating the appropriation 
 91.9   limits under this paragraph. 
 91.10     Sec. 9.  Minnesota Statutes 1996, section 477A.03, is 
 91.11  amended by adding a subdivision to read: 
 91.12     Subd. 4.  [ADDITIONAL MONEY FOR CITY AID.] For the calendar 
 91.13  years 1999 to 2008, the limit on the annual appropriation for 
 91.14  aids paid under section 477A.013, subdivision 9, as determined 
 91.15  in subdivision 2, paragraph (d), is increased by $450,000.  
 91.16     Sec. 10.  [477A.06] [EXISTING LOW-INCOME HOUSING AID.] 
 91.17     Subdivision 1.  [ELIGIBILITY.] (a) For assessment years 
 91.18  1998, 1999, and 2000, for all class 4d property on which 
 91.19  construction was begun before January 1, 1999, the assessor 
 91.20  shall determine the difference between the actual net tax 
 91.21  capacity and the net tax capacity that would be determined for 
 91.22  the property if the class rates for assessment year 1997 were in 
 91.23  effect. 
 91.24     (b) In calendar years 1999, 2000, and 2001, each city shall 
 91.25  be eligible for aid equal to (i) the amount by which the sum of 
 91.26  the differences determined in clause (a) for the corresponding 
 91.27  assessment year exceeds 2.5 percent of the city's total taxable 
 91.28  net tax capacity for taxes payable in 1998, multiplied by (ii) 
 91.29  the city government's average local tax rate for taxes payable 
 91.30  in 1998. 
 91.31     Subd. 2.  [CERTIFICATION.] The county assessor shall notify 
 91.32  the commissioner of revenue of the amount determined under 
 91.33  subdivision 1, paragraph (b), clause (i), for any city which 
 91.34  qualifies for aid under this section by June 30 of the 
 91.35  assessment year, in a form prescribed by the commissioner.  The 
 91.36  commissioner shall notify each city of its qualifying aid amount 
 92.1   by August 15 of the assessment year.  
 92.2      Subd. 3.  [APPROPRIATION; PAYMENT.] (a) The commissioner 
 92.3   shall pay each city its qualifying aid amount on or before July 
 92.4   20 of each year.  An amount sufficient to pay the aid authorized 
 92.5   under this section is appropriated to the commissioner of 
 92.6   revenue from the property tax reform account in fiscal years 
 92.7   2000 and 2001, and from the general fund in fiscal year 2002. 
 92.8      (b) For fiscal years 2001 and 2002, the amount of aid 
 92.9   appropriated under this section may not exceed $1,500,000 each 
 92.10  year. 
 92.11     (c) If the total amount of aid that would otherwise be 
 92.12  payable under the formula in this section exceeds the maximum 
 92.13  allowed under paragraph (b), the amount of aid for each city is 
 92.14  reduced proportionately to equal the limit. 
 92.15     Sec. 11.  [477A.065] [NEW CONSTRUCTION LOW-INCOME HOUSING 
 92.16  AID.] 
 92.17     Subdivision 1.  [ELIGIBILITY.] Each taxes payable year, 
 92.18  each city containing class 4d property on which initial 
 92.19  construction was begun after January 1, 1999, shall be eligible 
 92.20  for aid equal to (1) 1.5 times the net tax capacity of the 
 92.21  property for the assessment year corresponding to the taxes 
 92.22  payable year, multiplied by (2) the city government's average 
 92.23  local tax rate for the previous taxes payable year. 
 92.24     Subd. 2.  [CERTIFICATION.] The county assessor shall notify 
 92.25  the commissioner of revenue of the amount determined under 
 92.26  subdivision 1, clause (1), for any city which qualifies for aid 
 92.27  under this section by June 30 of each assessment year, in a form 
 92.28  prescribed by the commissioner.  The commissioner shall notify 
 92.29  each city of its qualifying aid amount by August 15 of the 
 92.30  assessment year.  
 92.31     Subd. 3.  [APPROPRIATION; PAYMENT.] The commissioner shall 
 92.32  pay each city its qualifying aid amount on or before July 20 of 
 92.33  each year.  An amount sufficient to pay the aid authorized under 
 92.34  this section is appropriated to the commissioner of revenue from 
 92.35  the general fund each year. 
 92.36     Sec. 12.  [CITY OF COON RAPIDS; ADJUSTMENT IN 1999 AID 
 93.1   PAYMENTS.] 
 93.2      Notwithstanding Minnesota Statutes, section 477A.015, the 
 93.3   July 20, 1999, aid payment to the city of Coon Rapids for aid 
 93.4   under section 477A.013, subdivision 9, shall equal the entire 
 93.5   amount of its city aid base increase in 1999 under section 
 93.6   477A.011, subdivision 36, plus one-half of the remaining amount 
 93.7   of its aid under section 477A.013, subdivision 9.  The remainder 
 93.8   of its 1999 aid under section 477A.013, subdivision 9, shall be 
 93.9   paid on or before December 26, 1999. 
 93.10     Sec. 13.  [TEMPORARY LOCAL GOVERNMENT AID INCREASES.] 
 93.11     For payments in calendar year 1998 only, the city of East 
 93.12  Grand Forks shall receive an additional payment of $9,200,000 
 93.13  and the city of Warren shall receive an additional payment of 
 93.14  $800,000 under the provisions of Minnesota Statutes, sections 
 93.15  477A.011 to 477A.014.  For payments in calendar year 1999 only, 
 93.16  the city of East Grand Forks shall receive an additional aid 
 93.17  payment of $4,600,000 and the city of Warren shall receive an 
 93.18  additional payment of $400,000 under the provisions of Minnesota 
 93.19  Statutes, sections 447A.011 to 477A.014.  The amounts of these 
 93.20  payments shall not be included in the calculation of any other 
 93.21  aids provided under Minnesota Statutes, chapter 477A, or other 
 93.22  law, or in any limitations on levies or expenditures. 
 93.23     $10,000,000 is appropriated in fiscal year 1999 and 
 93.24  $5,000,000 is appropriated in fiscal year 2000 to the 
 93.25  commissioner of revenue from the general fund to make the 
 93.26  payments under this section. 
 93.27     Sec. 14.  [CITY OF RED WING; LEVY LIMITS.] 
 93.28     Subdivision 1.  [LEVY LIMIT BASE INCREASE.] The levy limit 
 93.29  base of the city of Red Wing for taxes levied in 1998 under 
 93.30  Minnesota Statutes, section 275.71, subdivision 2, paragraph 
 93.31  (b), is increased by $477,677. 
 93.32     Subd. 2.  [EFFECTIVE DATE.] Upon compliance by the 
 93.33  governing body of the city of Red Wing with Minnesota Statutes, 
 93.34  section 645.021, subdivision 3, subdivision 1 is effective for 
 93.35  taxes levied in 1998, payable in 1999. 
 93.36     Sec. 15.  [WAITE PARK; LEVY LIMIT ADJUSTMENT.] 
 94.1      Subdivision 1.  [ADJUSTED LEVY LIMIT BASE.] For taxes 
 94.2   levied in 1998 only, the adjusted levy limit base defined in 
 94.3   Minnesota Statutes, section 275.71, subdivision 3, for the city 
 94.4   of Waite Park, is increased by $117,000. 
 94.5      Subd. 2.  [EFFECTIVE DATE.] Upon compliance by the 
 94.6   governing body of the city of Waite Park with Minnesota 
 94.7   Statutes, section 645.021, subdivision 3, subdivision 1 is 
 94.8   effective for taxes levied in 1998, payable in 1999. 
 94.9      Sec. 16.  [CITY OF COON RAPIDS; LEVY LIMITS.] 
 94.10     Subdivision 1.  [LEVY LIMIT BASE INCREASE.] For taxes 
 94.11  levied in 1998 only, the adjusted levy limit base defined in 
 94.12  Minnesota Statutes, section 275.71, subdivision 3, for the city 
 94.13  of Coon Rapids, is increased by $450,000. 
 94.14     Subd. 2.  [EFFECTIVE DATE.] Upon compliance by the 
 94.15  governing body of the city of Coon Rapids with Minnesota 
 94.16  Statutes, section 645.021, subdivision 3, subdivision 1 is 
 94.17  effective for taxes levied in 1998, payable in 1999. 
 94.18     Sec. 17.  [CITY OF ST. PETER; LEVY LIMIT EXEMPTION.] 
 94.19     For taxes levied in 1998, payable in 1999, the city of St. 
 94.20  Peter is exempt from the levy limits imposed under Minnesota 
 94.21  Statutes, sections 275.71 to 275.74.  This section is effective 
 94.22  the day after compliance by the governing body of the city of 
 94.23  St. Peter with Minnesota Statutes, section 645.021, subdivision 
 94.24  3. 
 94.25     Sec. 18.  [EFFECTIVE DATES.] 
 94.26     Sections 1, 3 to 6, 14, and 15 are effective for taxes 
 94.27  levied in 1998, payable in 1999.  Section 2 is effective for 
 94.28  taxes levied in 1997 and 1998, payable in 1998 and 1999.  
 94.29  Sections 7 and 8 are effective for aids payable in 1999 and 
 94.30  thereafter.  Section 9 is effective for aids payable in 1999 to 
 94.31  2008.  Section 10 is effective for aids payable in 1999 to 
 94.32  2001.  Section 11 is effective for aids payable in 2001 and 
 94.33  thereafter.  Section 12 is effective for aids payable in 1999 
 94.34  only.  Section 13 is effective for aids payable in 1998 and 1999 
 94.35  only. 
 94.36                             ARTICLE 5  
 95.1                SENIOR CITIZEN'S PROPERTY TAX DEFERRAL
 95.2      Section 1.  Minnesota Statutes 1997 Supplement, section 
 95.3   276.04, subdivision 2, is amended to read: 
 95.4      Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 95.5   shall provide for the printing of the tax statements.  The 
 95.6   commissioner of revenue shall prescribe the form of the property 
 95.7   tax statement and its contents.  The statement must contain a 
 95.8   tabulated statement of the dollar amount due to each taxing 
 95.9   authority and the amount of the state determined school tax from 
 95.10  the parcel of real property for which a particular tax statement 
 95.11  is prepared.  The dollar amounts attributable to the county, the 
 95.12  state determined school tax, the voter approved school tax, the 
 95.13  other local school tax, the township or municipality, and the 
 95.14  total of the metropolitan special taxing districts as defined in 
 95.15  section 275.065, subdivision 3, paragraph (i), must be 
 95.16  separately stated.  The amounts due all other special taxing 
 95.17  districts, if any, may be aggregated.  The amount of the tax on 
 95.18  homesteads qualifying under the senior citizens' property tax 
 95.19  deferral program under chapter 290B is the total amount of 
 95.20  property tax before subtraction of the deferred property tax 
 95.21  amount.  The amount of the tax on contamination value imposed 
 95.22  under sections 270.91 to 270.98, if any, must also be separately 
 95.23  stated.  The dollar amounts, including the dollar amount of any 
 95.24  special assessments, may be rounded to the nearest even whole 
 95.25  dollar.  For purposes of this section whole odd-numbered dollars 
 95.26  may be adjusted to the next higher even-numbered dollar.  The 
 95.27  amount of market value excluded under section 273.11, 
 95.28  subdivision 16, if any, must also be listed on the tax 
 95.29  statement.  The statement shall include the following sentences, 
 95.30  printed in upper case letters in boldface print:  "EVEN THOUGH 
 95.31  THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX 
 95.32  REVENUES, IT SETS THE AMOUNT OF THE STATE-DETERMINED SCHOOL TAX 
 95.33  LEVY.  THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY 
 95.34  PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT." 
 95.35     (b) The property tax statements for manufactured homes and 
 95.36  sectional structures taxed as personal property shall contain 
 96.1   the same information that is required on the tax statements for 
 96.2   real property.  
 96.3      (c) Real and personal property tax statements must contain 
 96.4   the following information in the order given in this paragraph.  
 96.5   The information must contain the current year tax information in 
 96.6   the right column with the corresponding information for the 
 96.7   previous year in a column on the left: 
 96.8      (1) the property's estimated market value under section 
 96.9   273.11, subdivision 1; 
 96.10     (2) the property's taxable market value after reductions 
 96.11  under section 273.11, subdivisions 1a and 16; 
 96.12     (3) the property's gross tax, calculated by adding the 
 96.13  property's total property tax to the sum of the aids enumerated 
 96.14  in clause (4); 
 96.15     (4) a total of the following aids: 
 96.16     (i) education aids payable under chapters 124 and 124A; 
 96.17     (ii) local government aids for cities, towns, and counties 
 96.18  under chapter 477A; 
 96.19     (iii) disparity reduction aid under section 273.1398; and 
 96.20     (iv) homestead and agricultural credit aid under section 
 96.21  273.1398; 
 96.22     (5) for homestead residential and agricultural properties, 
 96.23  the education homestead credit under section 273.1382; 
 96.24     (6) any credits received under sections 273.119; 273.123; 
 96.25  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 96.26  473H.10, except that the amount of credit received under section 
 96.27  273.135 must be separately stated and identified as "taconite 
 96.28  tax relief"; and 
 96.29     (7) any deferred property tax amount under the senior 
 96.30  citizens' property tax deferral program under chapter 290B, as 
 96.31  well as the total deferred amount plus accrued interest; and 
 96.32     (8) the net tax payable in the manner required in paragraph 
 96.33  (a). 
 96.34     (d) If the county uses envelopes for mailing property tax 
 96.35  statements and if the county agrees, a taxing district may 
 96.36  include a notice with the property tax statement notifying 
 97.1   taxpayers when the taxing district will begin its budget 
 97.2   deliberations for the current year, and encouraging taxpayers to 
 97.3   attend the hearings.  If the county allows notices to be 
 97.4   included in the envelope containing the property tax statement, 
 97.5   and if more than one taxing district relative to a given 
 97.6   property decides to include a notice with the tax statement, the 
 97.7   county treasurer or auditor must coordinate the process and may 
 97.8   combine the information on a single announcement.  
 97.9      The commissioner of revenue shall certify to the county 
 97.10  auditor the actual or estimated aids enumerated in clause (4) 
 97.11  that local governments will receive in the following year.  The 
 97.12  commissioner must certify this amount by January 1 of each year. 
 97.13     Sec. 2.  Minnesota Statutes 1996, section 290A.14, is 
 97.14  amended to read: 
 97.15     290A.14 [PROPERTY TAX STATEMENT.] 
 97.16     The county treasurer shall prepare and send a sufficient 
 97.17  number of copies of the property tax statement to the owner, and 
 97.18  to the owner's escrow agent if the taxes are paid via an escrow 
 97.19  account, to enable the owner to comply with the filing 
 97.20  requirements of this chapter and to retain one copy as a 
 97.21  record.  The property tax statement, in a form prescribed by the 
 97.22  commissioner, shall indicate the manner in which the claimant 
 97.23  may claim relief from the state under both this chapter and 
 97.24  chapter 290B, and the amount of the tax for which the applicant 
 97.25  may claim relief.  The statement shall also indicate if there 
 97.26  are delinquent property taxes on the property in the preceding 
 97.27  year.  Taxes included in a confession of judgment under section 
 97.28  279.37 shall not constitute delinquent taxes as long as the 
 97.29  claimant is current on the payments required to be made under 
 97.30  section 279.37. 
 97.31     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
 97.32  290B.03, subdivision 2, is amended to read: 
 97.33     Subd. 2.  [QUALIFYING HOMESTEAD; DEFINED.] Qualifying 
 97.34  homestead property is defined as the dwelling occupied as the 
 97.35  homeowner's principal residence and so much of the land 
 97.36  surrounding it, not exceeding one acre, as is reasonably 
 98.1   necessary for use of the dwelling as a home and any other 
 98.2   property used for purposes of a homestead as defined in section 
 98.3   273.13, subdivisions 22 and 23, but not to exceed one acre.  The 
 98.4   homestead may be part of a multidwelling building and the land 
 98.5   on which it is built. 
 98.6      Sec. 4.  Minnesota Statutes 1997 Supplement, section 
 98.7   290B.04, subdivision 1, is amended to read: 
 98.8      Subdivision 1.  [INITIAL APPLICATION.] (a) A taxpayer 
 98.9   meeting the program qualifications under section 290B.03 may 
 98.10  apply to the commissioner of revenue for the deferral of taxes.  
 98.11  Applications are due on or before July 1 for deferral of any of 
 98.12  the following year's property taxes.  A taxpayer may apply in 
 98.13  the year in which the taxpayer becomes 65 years old, provided 
 98.14  that no deferral of property taxes will be made until the 
 98.15  calendar year after the taxpayer becomes 65 years old.  The 
 98.16  application, which shall be prescribed by the commissioner of 
 98.17  revenue, shall include the following items and any other 
 98.18  information which the commissioner deems necessary: 
 98.19     (1) the name, address, and social security number of the 
 98.20  owner or owners; 
 98.21     (2) a copy of the property tax statement for the current 
 98.22  payable year for the homesteaded property; 
 98.23     (3) the initial year of ownership and occupancy as a 
 98.24  homestead; 
 98.25     (4) the owner's household income for the previous calendar 
 98.26  year; and 
 98.27     (5) information on any mortgage loans or other amounts 
 98.28  secured by mortgages or other liens against the property, for 
 98.29  which purpose the commissioner may require the applicant to 
 98.30  provide a copy of the mortgage note, the mortgage, or a 
 98.31  statement of the balance owing on the mortgage loan provided by 
 98.32  the mortgage holder.  The commissioner may require the 
 98.33  appropriate documents in connection with obtaining and 
 98.34  confirming information on unpaid amounts secured by other liens. 
 98.35     The application must state that program participation is 
 98.36  voluntary.  The application must also state that the deferred 
 99.1   amount depends directly on the applicant's household income, and 
 99.2   that program participation includes authorization for the annual 
 99.3   deferred amount for each year and, the cumulative deferral and 
 99.4   interest to that appear on each year's property tax statement as 
 99.5   notice prepared by the county under section 290B.04, subdivision 
 99.6   6, is public data.  
 99.7      The application must state that program participants may 
 99.8   claim the property tax refund based on the full amount of 
 99.9   property taxes eligible for the refund, including any deferred 
 99.10  amounts.  The application must also state that property tax 
 99.11  refunds will be used to offset any deferral and interest under 
 99.12  this program, and that any other amounts subject to revenue 
 99.13  recapture under section 270A.03, subdivision 7, will also be 
 99.14  used to offset any deferral and interest under this program.  
 99.15     (b) As part of the initial application process, the 
 99.16  commissioner may require the applicant to obtain at the 
 99.17  applicant's own cost and submit: 
 99.18     (1) if the property is registered property under chapter 
 99.19  508 or 508A, a copy of the original certificate of title in the 
 99.20  possession of the county registrar of titles (sometimes referred 
 99.21  to as "condition of register"), or 
 99.22     (2) if the property is abstract property, a report prepared 
 99.23  by a licensed abstracter showing the last deed and any 
 99.24  unsatisfied mortgages, liens, judgments, and state and federal 
 99.25  tax lien notices which were recorded on or after the date of 
 99.26  that last deed with respect to the property or to the applicant. 
 99.27     The certificate or report under clauses (1) and (2) need 
 99.28  not include references to any documents filed or recorded more 
 99.29  than 40 years prior to the date of the certification or report.  
 99.30  The certification or report must be as of a date not more than 
 99.31  30 days prior to submission of the application. 
 99.32     The commissioner may also require the county recorder or 
 99.33  county registrar of the county where the property is located to 
 99.34  provide copies of recorded documents related to the applicant or 
 99.35  the property, for which the recorder or registrar shall not 
 99.36  charge a fee.  The commissioner may use any information 
100.1   available to determine or verify eligibility under this section. 
100.2      Sec. 5.  Minnesota Statutes 1997 Supplement, section 
100.3   290B.04, subdivision 3, is amended to read: 
100.4      Subd. 3.  [ANNUAL EXCESS-INCOME CERTIFICATION BY TAXPAYER.] 
100.5   Annually on or before July 1, A taxpayer whose initial 
100.6   application has been approved under subdivision 2, 
100.7   shall complete the certification form and return it to notify 
100.8   the commissioner of revenue in writing by July 1 if the 
100.9   taxpayer's household income for the preceding calendar year 
100.10  exceeded $30,000.  The certification must state whether or not 
100.11  the taxpayer wishes to have property taxes deferred for the 
100.12  following year provided the taxes exceed the maximum property 
100.13  tax amount under section 290B.05.  If the taxpayer does wish to 
100.14  have property taxes deferred, the certification must state the 
100.15  homeowner's total household income for the previous calendar 
100.16  year and any other information which the commissioner deems 
100.17  necessary.  No property taxes may be deferred under chapter 290B 
100.18  in any year following the year in which a program participant 
100.19  filed or should have filed an excess-income certification under 
100.20  this subdivision, unless the participant has filed a resumption 
100.21  of eligibility certification as described in subdivision 4. 
100.22     Sec. 6.  Minnesota Statutes 1997 Supplement, section 
100.23  290B.04, is amended by adding a subdivision to read: 
100.24     Subd. 4.  [RESUMPTION OF ELIGIBILITY CERTIFICATION BY 
100.25  TAXPAYER.] A taxpayer who has previously filed an excess-income 
100.26  certification under subdivision 3 may resume program 
100.27  participation if the taxpayer's household income for a 
100.28  subsequent year is $30,000 or less.  If the taxpayer chooses to 
100.29  resume program participation, the taxpayer must notify the 
100.30  commissioner of revenue in writing by July 1 of the year 
100.31  following a calendar year in which the taxpayer's household 
100.32  income is $30,000 or less.  The certification must state the 
100.33  taxpayer's total household income for the previous calendar 
100.34  year.  Once a taxpayer resumes participation in the program 
100.35  under this subdivision, participation will continue until the 
100.36  taxpayer files a subsequent excess-income certification under 
101.1   subdivision 3 or until participation is terminated under section 
101.2   290B.08, subdivision 1. 
101.3      Sec. 7.  Minnesota Statutes 1997 Supplement, section 
101.4   290B.04, is amended by adding a subdivision to read: 
101.5      Subd. 5.  [PENALTY FOR FAILURE TO FILE EXCESS-INCOME 
101.6   CERTIFICATION; INVESTIGATIONS.] (a) The commissioner shall 
101.7   assess a penalty equal to 20 percent of the property taxes 
101.8   improperly deferred in the case of a false application, a false 
101.9   certification, or in the case of a required excess-income 
101.10  certification which was not filed as of the applicable due 
101.11  date.  The commissioner shall assess a penalty equal to 50 
101.12  percent of the property taxes improperly deferred if the 
101.13  taxpayer knowingly filed a false application or certification, 
101.14  or knowingly failed to file a required excess-income 
101.15  certification by the applicable due date.  The commissioner 
101.16  shall assess penalties under this section through the issuance 
101.17  of an order under the provisions of chapter 289A.  Persons 
101.18  affected by a commissioner's order issued under this section may 
101.19  appeal as provided in chapter 289A. 
101.20     (b) The commissioner may conduct investigations related to 
101.21  initial applications and excess-income certifications required 
101.22  under this chapter within the period ending 3-1/2 years from the 
101.23  due date of the application or certification.  
101.24     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
101.25  290B.04, is amended by adding a subdivision to read: 
101.26     Subd. 6.  [ANNUAL NOTICE TO PARTICIPANT.] Annually, on or 
101.27  before July 1, the county auditor shall notify, in writing, each 
101.28  participant in the county who is in the senior citizen's 
101.29  deferral program of the current year's deferred taxes and the 
101.30  total cumulative deferred taxes and accrued interest on the 
101.31  participant's property as of that date. 
101.32     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
101.33  290B.05, subdivision 1, is amended to read: 
101.34     Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
101.35  commissioner shall determine each qualifying homeowner's "annual 
101.36  maximum property tax amount" following approval of the 
102.1   homeowner's initial application and following the receipt of a 
102.2   resumption of eligibility certification.  The "annual maximum 
102.3   property tax amount" equals five percent of the homeowner's 
102.4   total household income for the year preceding either the initial 
102.5   application or the resumption of eligibility certification, 
102.6   whichever is applicable.  Following approval of the initial 
102.7   application, the commissioner shall annually determine the 
102.8   qualifying homeowner's "maximum property tax amount" 
102.9   and "maximum allowable deferral."  The maximum property tax 
102.10  amount calculated for taxes payable in the following year is 
102.11  equal to five percent of the homeowner's total household income 
102.12  for the previous calendar year.  No tax may be deferred relative 
102.13  to the appropriate assessment year for any homeowner whose total 
102.14  household income for the previous year exceeds $30,000.  No tax 
102.15  shall be deferred in any year in which the homeowner does not 
102.16  meet the program qualifications in section 290B.03.  The maximum 
102.17  allowable total deferral is equal to 75 percent of the 
102.18  assessor's estimated market value for the year, less (1) the 
102.19  balance of any mortgage loans and other amounts secured by liens 
102.20  against the property at the time of application, including any 
102.21  unpaid special assessments but not including property taxes 
102.22  payable during the year; and (2) any outstanding deferral and 
102.23  interest.  
102.24     Sec. 10.  Minnesota Statutes 1997 Supplement, section 
102.25  290B.05, subdivision 2, is amended to read: 
102.26     Subd. 2.  [CERTIFICATION BY COMMISSIONER.] On or before 
102.27  December 1 of the year of initial application, the commissioner 
102.28  shall certify to the county auditor of the county in which the 
102.29  qualifying homestead is located (1) the annual maximum property 
102.30  tax amount; and (2) the maximum allowable deferral for the year; 
102.31  and (3) the cumulative deferral and interest for all years 
102.32  preceding the next taxes payable year.  On or before December 1 
102.33  of any year in which a homeowner files a resumption of 
102.34  eligibility certification, the commissioner shall certify to the 
102.35  county auditor the new annual maximum property tax amount to be 
102.36  used in calculating the deferral for subsequent years. 
103.1      Sec. 11.  Minnesota Statutes 1997 Supplement, section 
103.2   290B.05, subdivision 4, is amended to read: 
103.3      Subd. 4.  [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.] 
103.4   On or before September 1 of each year, the commissioner shall 
103.5   request, and each county or city assessor shall provide, the 
103.6   current year's estimated market value of each property on the 
103.7   list supplied by the commissioner that may be eligible for 
103.8   deferral under this section for taxes payable in the following 
103.9   year.  The total amount of deferred taxes and interest on a 
103.10  property, when added to (1) the balance owing on any mortgages 
103.11  on the property at the time of initial application; and (2) 
103.12  other amounts secured by liens on the property at the time of 
103.13  the initial application, may not exceed 75 percent of the 
103.14  assessor's current estimated market value of the property. 
103.15     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
103.16  290B.06, is amended to read: 
103.17     290B.06 [PROPERTY TAX REFUNDS; OFFSET.] 
103.18     For purposes of qualifying for the regular property tax 
103.19  refund or the special refund for homeowners under chapter 290A, 
103.20  the qualifying tax is the full amount of taxes, including the 
103.21  deferred portion of the tax.  In any year in which a program 
103.22  participant chooses to have property taxes deferred under this 
103.23  section, any regular or special property tax refund awarded 
103.24  based upon those property taxes as defined in section 270A.03, 
103.25  subdivision 7, must be taken first as a deduction from the 
103.26  amount of the deferred tax for that year, and second as a 
103.27  deduction against any outstanding deferral from previous years, 
103.28  rather than as a cash payment to the homeowner.  The 
103.29  commissioner shall cancel any current year's deferral or 
103.30  previous years' deferral and interest that is offset by the 
103.31  property tax refunds.  If the total of the regular and the 
103.32  special property tax refund amounts exceeds the sum of the 
103.33  deferred tax for the current year and cumulative deferred tax 
103.34  and interest for previous years, the commissioner shall then 
103.35  remit the excess amount to the homeowner.  On or before the date 
103.36  on which the commissioner issues property tax refunds, the 
104.1   commissioner shall notify program participants of any reduction 
104.2   in the deferred amount for the current and previous years 
104.3   resulting from property tax refunds. 
104.4      Sec. 13.  Minnesota Statutes 1997 Supplement, section 
104.5   290B.07, is amended to read: 
104.6      290B.07 [LIEN; DEFERRED PORTION.] 
104.7      (a) Payment by the state to the county treasurer of taxes 
104.8   deferred under this section is deemed a loan from the state to 
104.9   the program participant.  The commissioner must compute the 
104.10  interest as provided in section 270.75, subdivision 5, but not 
104.11  to exceed five percent, and maintain records of the total 
104.12  deferred amount and interest for each participant.  Interest 
104.13  shall accrue beginning September 1 of the payable year for which 
104.14  the taxes are deferred.  Any deferral made under this chapter 
104.15  shall not be construed as delinquent property taxes. 
104.16     The lien created under section 272.31 continues to secure 
104.17  payment by the taxpayer, or by the taxpayer's successors or 
104.18  assigns, of the amount deferred, including interest, with 
104.19  respect to all years for which amounts are deferred.  The lien 
104.20  for deferred taxes and interest has the same priority as any 
104.21  other lien under section 272.31, except that liens, including 
104.22  mortgages, recorded or filed prior to the recording or filing of 
104.23  the notice under section 290B.04, subdivision 2, have priority 
104.24  over the lien for deferred taxes and interest.  A seller's 
104.25  interest in a contract for deed, in which a qualifying homeowner 
104.26  is the purchaser or an assignee of the purchaser, has priority 
104.27  over deferred taxes and interest on deferred taxes, regardless 
104.28  of whether the contract for deed is recorded or filed.  The lien 
104.29  for deferred taxes and interest for future years has the same 
104.30  priority as the lien for deferred taxes and interest for the 
104.31  first year, which is always higher in priority than any 
104.32  mortgages or other liens filed, recorded, or created after the 
104.33  notice recorded or filed under section 290B.04, subdivision 2.  
104.34  The county treasurer or auditor shall maintain records of the 
104.35  deferred portion and shall list the amount of deferred taxes for 
104.36  the year and the cumulative deferral and interest for all 
105.1   previous years as a lien against the property on the property 
105.2   tax statement.  In any certification of unpaid taxes for a tax 
105.3   parcel, the county auditor shall clearly distinguish between 
105.4   taxes payable in the current year, deferred taxes and interest, 
105.5   and delinquent taxes.  Payment of the deferred portion becomes 
105.6   due and owing at the time specified in section 290B.08.  Upon 
105.7   receipt of the payment, the commissioner shall issue a receipt 
105.8   for it to the person making the payment upon request and shall 
105.9   notify the auditor of the county in which the parcel is located, 
105.10  within ten days, identifying the parcel to which the payment 
105.11  applies.  Upon receipt by the commissioner of revenue of 
105.12  collected funds in the amount of the deferral, the state's loan 
105.13  to the program participant is deemed paid in full. 
105.14     (b) If property for which taxes have been deferred under 
105.15  this chapter forfeits under chapter 281 for nonpayment of a 
105.16  nondeferred property tax amount, or because of nonpayment of 
105.17  amounts previously deferred following a termination under 
105.18  section 290B.08, the lien for the taxes deferred under this 
105.19  chapter, plus interest and costs, shall be canceled by the 
105.20  county auditor as provided in section 282.07.  However, 
105.21  notwithstanding any other law to the contrary, any proceeds from 
105.22  a subsequent sale of the property under chapter 282 or another 
105.23  law, must be used to first reimburse the county's forfeited tax 
105.24  sale fund for any direct costs of selling the property or any 
105.25  costs directly related to preparing the property for sale, and 
105.26  then to reimburse the state for the amount of the canceled 
105.27  lien.  Within 90 days of the receipt of any sale proceed to 
105.28  which the state is entitled under these provisions, the county 
105.29  auditor must pay those funds to the commissioner of revenue by 
105.30  warrant for deposit in the general fund.  No other deposit, use, 
105.31  distribution, or release of gross sale proceeds or receipts may 
105.32  be made by the county until payments sufficient to fully 
105.33  reimburse the state for the canceled lien amount have been 
105.34  transmitted to the commissioner. 
105.35     Sec. 14.  Minnesota Statutes 1997 Supplement, section 
105.36  290B.08, subdivision 2, is amended to read: 
106.1      Subd. 2.  [PAYMENT UPON TERMINATION.] Upon the termination 
106.2   of the deferral under subdivision 1, the amount of deferred 
106.3   taxes and interest plus the recording or filing fees under both 
106.4   section 290B.04, subdivision 2, and this subdivision becomes due 
106.5   and payable to the commissioner within 90 days of termination of 
106.6   the deferral for terminations under subdivision 1, paragraph 
106.7   (a), clauses (1) and (2), and within one year of termination of 
106.8   the deferral for terminations under subdivision 1, paragraph 
106.9   (a), clauses (3) and (4).  No additional interest is due on the 
106.10  deferral if timely paid.  On receipt of payment, the 
106.11  commissioner shall within ten days notify the auditor of the 
106.12  county in which the parcel is located, identifying the parcel to 
106.13  which the payment applies and shall remit the recording or 
106.14  filing fees under section 290B.04, subdivision 2, and this 
106.15  subdivision to the auditor.  A notice of termination of 
106.16  deferral, containing the legal description and the recording or 
106.17  filing data for the notice of qualification for deferral under 
106.18  section 290B.04, subdivision 2, shall be prepared and recorded 
106.19  or filed by the county auditor in the same office in which the 
106.20  notice of qualification for deferral under section 290B.04, 
106.21  subdivision 2, was recorded or filed, and the county auditor 
106.22  shall mail a copy of the notice of termination to the property 
106.23  owner.  The property owner shall pay the recording or filing 
106.24  fees.  Upon recording or filing of the notice of termination of 
106.25  deferral, the notice of qualification for deferral under section 
106.26  290B.04, subdivision 2, and the lien created by it are 
106.27  discharged.  If the deferral is not timely paid, the penalty, 
106.28  interest, lien, forfeiture, and other rules for the collection 
106.29  of ad valorem property taxes apply. 
106.30     Sec. 15.  Minnesota Statutes 1997 Supplement, section 
106.31  290B.09, subdivision 1, is amended to read: 
106.32     Subdivision 1.  [DETERMINATION; PAYMENT.] The commissioner 
106.33  of revenue county auditor shall determine the total current 
106.34  year's deferred amount of property tax under this chapter in 
106.35  each the county, basing determinations on a review of and submit 
106.36  those amounts as part of the abstracts of tax lists submitted by 
107.1   the county auditors under section 275.29.  The commissioner may 
107.2   make changes in the abstracts of tax lists as deemed necessary.  
107.3   The commissioner of revenue, after such review, shall pay the 
107.4   deferred amount of property tax to each county treasurer on or 
107.5   before August 31.  
107.6      At least once each year, the commissioner shall report to 
107.7   the county auditor the total cumulative amount of deferred taxes 
107.8   and interest that constitute a lien against the property.  
107.9      The county treasurer shall distribute as part of the 
107.10  October settlement the funds received as if they had been 
107.11  collected as a part of the property tax. 
107.12     Sec. 16.  [290B.10] [SENIOR DEFERRAL PROGRAM; INFORMATION 
107.13  PROVIDED.] 
107.14     The commissioner of revenue shall provide information about 
107.15  the senior deferral program and eligibility criteria for the 
107.16  program in the instruction booklet prepared for taxpayers to use 
107.17  in applying for property tax refunds under chapter 290A. 
107.18     Sec. 17.  [EFFECTIVE DATE.] 
107.19     Sections 1 and 3 to 15 are effective for deferrals of 
107.20  property taxes payable in 1999 and thereafter, except that the 
107.21  July 1 application date for taxes payable in 1999 in section 4 
107.22  is extended to August 1 for applications filed in 1998 only. 
107.23     Section 2 is effective for statements prepared in 1998 for 
107.24  taxes payable in 1999 and thereafter.  Section 16 is effective 
107.25  for booklets prepared in 1998 for refunds claimed in 1999 and 
107.26  thereafter. 
107.27                             ARTICLE 6 
107.28                     INCOME AND FRANCHISE TAXES 
107.29     Section 1.  Minnesota Statutes 1997 Supplement, section 
107.30  289A.19, subdivision 2, is amended to read: 
107.31     Subd. 2.  [CORPORATE FRANCHISE AND MINING COMPANY TAXES.] 
107.32  Corporations or mining companies shall receive an extension of 
107.33  seven months for filing the return of a corporation subject to 
107.34  tax under chapter 290 or for filing the return of a mining 
107.35  company subject to tax under sections 298.01 and 298.015 if:.  
107.36  Interest on any balance of tax not paid when the regularly 
108.1   required return is due must be paid at the rate specified in 
108.2   section 270.75, from the date such payment should have been made 
108.3   if no extension was granted, until the date of payment of such 
108.4   tax. 
108.5      If a corporation or mining company does not:  
108.6      (1) the corporation or mining company pays pay at least 90 
108.7   percent of the amount of tax shown on the return on or before 
108.8   the regular due date of the return, the penalty prescribed by 
108.9   section 289A.60, subdivision 1, shall be imposed on the unpaid 
108.10  balance of tax; or 
108.11     (2) pay the balance due shown on the regularly required 
108.12  return is paid on or before the extended due date of the return; 
108.13  and 
108.14     (3) interest on any balance due is paid at the rate 
108.15  specified in section 270.75 from the regular due date of the 
108.16  return until the tax is paid, the penalty prescribed by section 
108.17  289A.60, subdivision 1, shall be imposed on the unpaid balance 
108.18  of tax from the original due date of the return.  
108.19     Sec. 2.  Minnesota Statutes 1996, section 290.01, 
108.20  subdivision 3b, is amended to read: 
108.21     Subd. 3b.  [LIMITED LIABILITY COMPANY.] For purposes of 
108.22  this chapter and chapter 289A, a limited liability company that 
108.23  is formed under either the laws of this state or under similar 
108.24  laws of another state, and that is considered to be a 
108.25  partnership will be treated as an entity similar to its 
108.26  treatment for federal income tax purposes, is considered to be a 
108.27  partnership and the members must be considered to be partners. 
108.28     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
108.29  290.01, subdivision 19a, is amended to read: 
108.30     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
108.31  individuals, estates, and trusts, there shall be added to 
108.32  federal taxable income: 
108.33     (1)(i) interest income on obligations of any state other 
108.34  than Minnesota or a political or governmental subdivision, 
108.35  municipality, or governmental agency or instrumentality of any 
108.36  state other than Minnesota exempt from federal income taxes 
109.1   under the Internal Revenue Code or any other federal statute, 
109.2   and 
109.3      (ii) exempt-interest dividends as defined in section 
109.4   852(b)(5) of the Internal Revenue Code, except the portion of 
109.5   the exempt-interest dividends derived from interest income on 
109.6   obligations of the state of Minnesota or its political or 
109.7   governmental subdivisions, municipalities, governmental agencies 
109.8   or instrumentalities, but only if the portion of the 
109.9   exempt-interest dividends from such Minnesota sources paid to 
109.10  all shareholders represents 95 percent or more of the 
109.11  exempt-interest dividends that are paid by the regulated 
109.12  investment company as defined in section 851(a) of the Internal 
109.13  Revenue Code, or the fund of the regulated investment company as 
109.14  defined in section 851(h) of the Internal Revenue Code, making 
109.15  the payment; and 
109.16     (iii) for the purposes of items (i) and (ii), interest on 
109.17  obligations of an Indian tribal government described in section 
109.18  7871(c) of the Internal Revenue Code shall be treated as 
109.19  interest income on obligations of the state in which the tribe 
109.20  is located; 
109.21     (2) the amount of income taxes paid or accrued within the 
109.22  taxable year under this chapter and income taxes paid to any 
109.23  other state or to any province or territory of Canada, to the 
109.24  extent allowed as a deduction under section 63(d) of the 
109.25  Internal Revenue Code, but the addition may not be more than the 
109.26  amount by which the itemized deductions as allowed under section 
109.27  63(d) of the Internal Revenue Code exceeds the amount of the 
109.28  standard deduction as defined in section 63(c) of the Internal 
109.29  Revenue Code.  For the purpose of this paragraph, the 
109.30  disallowance of itemized deductions under section 68 of the 
109.31  Internal Revenue Code of 1986, income tax is the last itemized 
109.32  deduction disallowed; 
109.33     (3) the capital gain amount of a lump sum distribution to 
109.34  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
109.35  Reform Act of 1986, Public Law Number 99-514, applies; 
109.36     (4) the amount of income taxes paid or accrued within the 
110.1   taxable year under this chapter and income taxes paid to any 
110.2   other state or any province or territory of Canada, to the 
110.3   extent allowed as a deduction in determining federal adjusted 
110.4   gross income.  For the purpose of this paragraph, income taxes 
110.5   do not include the taxes imposed by sections 290.0922, 
110.6   subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
110.7      (5) the amount of loss or expense included in federal 
110.8   taxable income under section 1366 of the Internal Revenue Code 
110.9   flowing from a corporation that has a valid election in effect 
110.10  for the taxable year under section 1362 of the Internal Revenue 
110.11  Code, but which is not allowed to be an "S" corporation under 
110.12  section 290.9725; and 
110.13     (6) the amount of any distributions in cash or property 
110.14  made to a shareholder during the taxable year by a corporation 
110.15  that has a valid election in effect for the taxable year under 
110.16  section 1362 of the Internal Revenue Code, but which is not 
110.17  allowed to be an "S" corporation under section 290.9725 to the 
110.18  extent not already included in federal taxable income under 
110.19  section 1368 of the Internal Revenue Code.; 
110.20     (7) in the year stock of a corporation that had made a 
110.21  valid election under section 1362 of the Internal Revenue Code 
110.22  but was not an "S" corporation under section 290.9725 is sold or 
110.23  disposed of in a transaction taxable under the Internal Revenue 
110.24  Code, the amount of difference between the Minnesota basis of 
110.25  the stock under subdivision 19f, paragraph (m), and the federal 
110.26  basis if the Minnesota basis is lower than the shareholder's 
110.27  federal basis; and 
110.28     (8) the amount of expense, interest, or taxes disallowed 
110.29  pursuant to section 290.10. 
110.30     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
110.31  290.01, subdivision 19b, is amended to read: 
110.32     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
110.33  individuals, estates, and trusts, there shall be subtracted from 
110.34  federal taxable income: 
110.35     (1) interest income on obligations of any authority, 
110.36  commission, or instrumentality of the United States to the 
111.1   extent includable in taxable income for federal income tax 
111.2   purposes but exempt from state income tax under the laws of the 
111.3   United States; 
111.4      (2) if included in federal taxable income, the amount of 
111.5   any overpayment of income tax to Minnesota or to any other 
111.6   state, for any previous taxable year, whether the amount is 
111.7   received as a refund or as a credit to another taxable year's 
111.8   income tax liability; 
111.9      (3) the amount paid to others, less the credit allowed 
111.10  under section 290.0674, not to exceed $1,625 for each dependent 
111.11  in grades kindergarten to 6 and $2,500 for each dependent in 
111.12  grades 7 to 12, for tuition, textbooks, and transportation of 
111.13  each dependent in attending an elementary or secondary school 
111.14  situated in Minnesota, North Dakota, South Dakota, Iowa, or 
111.15  Wisconsin, wherein a resident of this state may legally fulfill 
111.16  the state's compulsory attendance laws, which is not operated 
111.17  for profit, and which adheres to the provisions of the Civil 
111.18  Rights Act of 1964 and chapter 363.  For the purposes of this 
111.19  clause, "tuition" includes fees or tuition as defined in section 
111.20  290.0674, subdivision 1, clause (1).  As used in this clause, 
111.21  "textbooks" includes books and other instructional materials and 
111.22  equipment used in elementary and secondary schools in teaching 
111.23  only those subjects legally and commonly taught in public 
111.24  elementary and secondary schools in this state.  Equipment 
111.25  expenses qualifying for deduction includes expenses as defined 
111.26  and limited in section 290.0674, subdivision 1, clause (3).  
111.27  "Textbooks" does not include instructional books and materials 
111.28  used in the teaching of religious tenets, doctrines, or worship, 
111.29  the purpose of which is to instill such tenets, doctrines, or 
111.30  worship, nor does it include books or materials for, or 
111.31  transportation to, extracurricular activities including sporting 
111.32  events, musical or dramatic events, speech activities, driver's 
111.33  education, or similar programs; 
111.34     (4) to the extent included in federal taxable income, 
111.35  distributions from a qualified governmental pension plan, an 
111.36  individual retirement account, simplified employee pension, or 
112.1   qualified plan covering a self-employed person that represent a 
112.2   return of contributions that were included in Minnesota gross 
112.3   income in the taxable year for which the contributions were made 
112.4   but were deducted or were not included in the computation of 
112.5   federal adjusted gross income.  The distribution shall be 
112.6   allocated first to return of contributions until the 
112.7   contributions included in Minnesota gross income have been 
112.8   exhausted.  This subtraction applies only to contributions made 
112.9   in a taxable year prior to 1985; 
112.10     (5) income as provided under section 290.0802; 
112.11     (6) the amount of unrecovered accelerated cost recovery 
112.12  system deductions allowed under subdivision 19g; 
112.13     (7) to the extent included in federal adjusted gross 
112.14  income, income realized on disposition of property exempt from 
112.15  tax under section 290.491; 
112.16     (8) to the extent not deducted in determining federal 
112.17  taxable income, the amount paid for health insurance of 
112.18  self-employed individuals as determined under section 162(l) of 
112.19  the Internal Revenue Code, except that the 25 percent limit does 
112.20  not apply.  If the taxpayer deducted insurance payments under 
112.21  section 213 of the Internal Revenue Code of 1986, the 
112.22  subtraction under this clause must be reduced by the lesser of: 
112.23     (i) the total itemized deductions allowed under section 
112.24  63(d) of the Internal Revenue Code, less state, local, and 
112.25  foreign income taxes deductible under section 164 of the 
112.26  Internal Revenue Code and the standard deduction under section 
112.27  63(c) of the Internal Revenue Code; or 
112.28     (ii) the lesser of (A) the amount of insurance qualifying 
112.29  as "medical care" under section 213(d) of the Internal Revenue 
112.30  Code to the extent not deducted under section 162(1) of the 
112.31  Internal Revenue Code or excluded from income or (B) the total 
112.32  amount deductible for medical care under section 213(a); 
112.33     (9) the exemption amount allowed under Laws 1995, chapter 
112.34  255, article 3, section 2, subdivision 3; 
112.35     (10) to the extent included in federal taxable income, 
112.36  postservice benefits for youth community service under section 
113.1   121.707 for volunteer service under United States Code, title 
113.2   42, section 5011(d), as amended; and 
113.3      (11) to the extent not subtracted under clause (1), the 
113.4   amount of income or gain included in federal taxable income 
113.5   under section 1366 of the Internal Revenue Code flowing from a 
113.6   corporation that has a valid election in effect for the taxable 
113.7   year under section 1362 of the Internal Revenue Code which is 
113.8   not allowed to be an "S" corporation under section 290.9725.; 
113.9      (12) in the year stock of a corporation that had made a 
113.10  valid election under section 1362 of the Internal Revenue Code 
113.11  but was not an "S" corporation under section 290.9725 is sold or 
113.12  disposed of in a transaction taxable under the Internal Revenue 
113.13  Code, the amount of difference between the Minnesota basis of 
113.14  the stock under subdivision 19f, paragraph (m), and the federal 
113.15  basis if the Minnesota basis is higher than the shareholder's 
113.16  federal basis; and 
113.17     (13) an amount equal to an individual's, trust's, or 
113.18  estate's net federal income tax liability for the tax year that 
113.19  is attributable to items of income, expense, gain, loss, or 
113.20  credits federally flowing to the taxpayer in the tax year from a 
113.21  corporation, having a valid election in effect for federal tax 
113.22  purposes under section 1362 of the Internal Revenue Code but not 
113.23  treated as a "S" corporation for state tax purposes under 
113.24  section 290.9725. 
113.25     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
113.26  290.01, subdivision 19f, is amended to read: 
113.27     Subd. 19f.  [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON 
113.28  DISPOSITION OF PROPERTY.] (a) For individuals, estates, and 
113.29  trusts, the basis of property is its adjusted basis for federal 
113.30  income tax purposes except as set forth in paragraphs (f), (g), 
113.31  and (m).  For corporations, the basis of property is its 
113.32  adjusted basis for federal income tax purposes, without regard 
113.33  to the time when the property became subject to tax under this 
113.34  chapter or to whether out-of-state losses or items of tax 
113.35  preference with respect to the property were not deductible 
113.36  under this chapter, except that the modifications to the basis 
114.1   for federal income tax purposes set forth in paragraphs (b) to 
114.2   (j) are allowed to corporations, and the resulting modifications 
114.3   to federal taxable income must be made in the year in which gain 
114.4   or loss on the sale or other disposition of property is 
114.5   recognized. 
114.6      (b) The basis of property shall not be reduced to reflect 
114.7   federal investment tax credit.  
114.8      (c) The basis of property subject to the accelerated cost 
114.9   recovery system under section 168 of the Internal Revenue Code 
114.10  shall be modified to reflect the modifications in depreciation 
114.11  with respect to the property provided for in subdivision 19e.  
114.12  For certified pollution control facilities for which 
114.13  amortization deductions were elected under section 169 of the 
114.14  Internal Revenue Code of 1954, the basis of the property must be 
114.15  increased by the amount of the amortization deduction not 
114.16  previously allowed under this chapter. 
114.17     (d) For property acquired before January 1, 1933, the basis 
114.18  for computing a gain is the fair market value of the property as 
114.19  of that date.  The basis for determining a loss is the cost of 
114.20  the property to the taxpayer less any depreciation, 
114.21  amortization, or depletion, actually sustained before that 
114.22  date.  If the adjusted cost exceeds the fair market value of the 
114.23  property, then the basis is the adjusted cost regardless of 
114.24  whether there is a gain or loss.  
114.25     (e) The basis is reduced by the allowance for amortization 
114.26  of bond premium if an election to amortize was made pursuant to 
114.27  Minnesota Statutes 1986, section 290.09, subdivision 13, and the 
114.28  allowance could have been deducted by the taxpayer under this 
114.29  chapter during the period of the taxpayer's ownership of the 
114.30  property.  
114.31     (f) For assets placed in service before January 1, 1987, 
114.32  corporations, partnerships, or individuals engaged in the 
114.33  business of mining ores other than iron ore or taconite 
114.34  concentrates subject to the occupation tax under chapter 298 
114.35  must use the occupation tax basis of property used in that 
114.36  business. 
115.1      (g) For assets placed in service before January 1, 1990, 
115.2   corporations, partnerships, or individuals engaged in the 
115.3   business of mining iron ore or taconite concentrates subject to 
115.4   the occupation tax under chapter 298 must use the occupation tax 
115.5   basis of property used in that business.  
115.6      (h) In applying the provisions of sections 301(c)(3)(B), 
115.7   312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the 
115.8   dates December 31, 1932, and January 1, 1933, shall be 
115.9   substituted for February 28, 1913, and March 1, 1913, 
115.10  respectively.  
115.11     (i) In applying the provisions of section 362(a) and (c) of 
115.12  the Internal Revenue Code, the date December 31, 1956, shall be 
115.13  substituted for June 22, 1954.  
115.14     (j) The basis of property shall be increased by the amount 
115.15  of intangible drilling costs not previously allowed due to 
115.16  differences between this chapter and the Internal Revenue Code.  
115.17     (k) The adjusted basis of any corporate partner's interest 
115.18  in a partnership is the same as the adjusted basis for federal 
115.19  income tax purposes modified as required to reflect the basis 
115.20  modifications set forth in paragraphs (b) to (j).  The adjusted 
115.21  basis of a partnership in which the partner is an individual, 
115.22  estate, or trust is the same as the adjusted basis for federal 
115.23  income tax purposes modified as required to reflect the basis 
115.24  modifications set forth in paragraphs (f) and (g).  
115.25     (l) The modifications contained in paragraphs (b) to (j) 
115.26  also apply to the basis of property that is determined by 
115.27  reference to the basis of the same property in the hands of a 
115.28  different taxpayer or by reference to the basis of different 
115.29  property.  
115.30     (m) If a corporation has a valid election in effect for the 
115.31  taxable year under section 1362 of the Internal Revenue Code, 
115.32  but is not allowed to be an "S" corporation under section 
115.33  290.9725, and the corporation is liquidated or the individual 
115.34  shareholder disposes of the stock and there is no capital loss 
115.35  reflected in federal adjusted gross income because of the fact 
115.36  that corporate losses have exhausted the shareholders' basis for 
116.1   federal purposes, the shareholders shall be entitled to a 
116.2   capital loss commensurate to their Minnesota basis for the 
116.3   stock, the Minnesota basis in the shareholder's stock in the 
116.4   corporation shall be computed as if the corporation were not an 
116.5   "S" corporation for federal tax purposes. 
116.6      Sec. 6.  Minnesota Statutes 1996, section 290.06, 
116.7   subdivision 2c, is amended to read: 
116.8      Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
116.9   AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
116.10  married individuals filing joint returns and surviving spouses 
116.11  as defined in section 2(a) of the Internal Revenue Code must be 
116.12  computed by applying to their taxable net income the following 
116.13  schedule of rates: 
116.14     (1) On the first $19,910, 6 percent; 
116.15     (2) On all over $19,910, but not over $79,120, 8 percent; 
116.16     (3) On all over $79,120, 8.5 percent. 
116.17     Married individuals filing separate returns, estates, and 
116.18  trusts must compute their income tax by applying the above rates 
116.19  to their taxable income, except that the income brackets will be 
116.20  one-half of the above amounts.  
116.21     (b) The income taxes imposed by this chapter upon unmarried 
116.22  individuals must be computed by applying to taxable net income 
116.23  the following schedule of rates: 
116.24     (1) On the first $13,620, 6 percent; 
116.25     (2) On all over $13,620, but not over $44,750, 8 percent; 
116.26     (3) On all over $44,750, 8.5 percent. 
116.27     (c) The income taxes imposed by this chapter upon unmarried 
116.28  individuals qualifying as a head of household as defined in 
116.29  section 2(b) of the Internal Revenue Code must be computed by 
116.30  applying to taxable net income the following schedule of rates: 
116.31     (1) On the first $16,770, 6 percent; 
116.32     (2) On all over $16,770, but not over $67,390, 8 percent; 
116.33     (3) On all over $67,390, 8.5 percent. 
116.34     (d) In lieu of a tax computed according to the rates set 
116.35  forth in this subdivision, the tax of any individual taxpayer 
116.36  whose taxable net income for the taxable year is less than an 
117.1   amount determined by the commissioner must be computed in 
117.2   accordance with tables prepared and issued by the commissioner 
117.3   of revenue based on income brackets of not more than $100.  The 
117.4   amount of tax for each bracket shall be computed at the rates 
117.5   set forth in this subdivision, provided that the commissioner 
117.6   may disregard a fractional part of a dollar unless it amounts to 
117.7   50 cents or more, in which case it may be increased to $1. 
117.8      (e) An individual who is not a Minnesota resident for the 
117.9   entire year must compute the individual's Minnesota income tax 
117.10  as provided in this subdivision.  After the application of the 
117.11  nonrefundable credits provided in this chapter, the tax 
117.12  liability must then be multiplied by a fraction in which:  
117.13     (1) The numerator is the individual's Minnesota source 
117.14  federal adjusted gross income as defined in section 62 of the 
117.15  Internal Revenue Code disregarding income or loss flowing from a 
117.16  corporation having a valid election for the taxable year under 
117.17  section 1362 of the Internal Revenue Code but which is not an 
117.18  "S" corporation under section 290.9725 and increased by the 
117.19  addition required for interest income from non-Minnesota state 
117.20  and municipal bonds under section 290.01, subdivision 19a, 
117.21  clause (1), after applying the allocation and assignability 
117.22  provisions of section 290.081, clause (a), or 290.17; and 
117.23     (2) the denominator is the individual's federal adjusted 
117.24  gross income as defined in section 62 of the Internal Revenue 
117.25  Code of 1986, as amended through April 15, 1995, increased by 
117.26  the addition required for interest income from non-Minnesota 
117.27  state and municipal bonds under section 290.01, subdivision 19a, 
117.28  clause (1) amounts specified in section 290.01, subdivision 19a, 
117.29  clauses (1), (5), (6), and (7), and reduced by the amounts 
117.30  specified in section 290.01, subdivision 19b, clauses (1), (11), 
117.31  and (12). 
117.32     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
117.33  290.0671, subdivision 1, is amended to read: 
117.34     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
117.35  allowed a credit against the tax imposed by this chapter equal 
117.36  to a percentage of the credit for which the individual is 
118.1   eligible earned income.  To receive a credit, a taxpayer must be 
118.2   eligible for a credit under section 32 of the Internal Revenue 
118.3   Code.  The percentage is 15 for individuals without a qualifying 
118.4   child, and 25 for individuals with at least one qualifying 
118.5   child.  For purposes of this section, "qualifying child" has the 
118.6   meaning given in section 32(c)(3) of the Internal Revenue Code. 
118.7      (b) For individuals with no qualifying children, the credit 
118.8   equals 1.1475 percent of the first $4,460 of earned income.  The 
118.9   credit is reduced by 1.1475 percent of earned income or modified 
118.10  adjusted gross income, whichever is greater, in excess of 
118.11  $5,570, but in no case is the credit less than zero. 
118.12     (c) For individuals with one qualifying child, the credit 
118.13  equals 6.8 percent of the first $6,680 of earned income and 8.5 
118.14  percent of earned income over $11,650 but less than $12,990.  
118.15  The credit is reduced by 4.77 percent of earned income or 
118.16  modified adjusted gross income, whichever is greater, in excess 
118.17  of $14,560, but in no case is the credit less than zero. 
118.18     (d) For individuals with two or more qualifying children, 
118.19  the credit equals eight percent of the first $9,390 of earned 
118.20  income and 20 percent of earned income over $14,350 but less 
118.21  than $16,230.  The credit is reduced by 8.8 percent of earned 
118.22  income or modified adjusted gross income, whichever is greater, 
118.23  in excess of $17,280, but in no case is the credit less than 
118.24  zero. 
118.25     (e) For a nonresident or part-year resident, the credit 
118.26  determined under section 32 of the Internal Revenue Code must be 
118.27  allocated based on the percentage calculated under section 
118.28  290.06, subdivision 2c, paragraph (e). 
118.29     (f) For a person who was a resident for the entire tax year 
118.30  and has earned income not subject to tax under this chapter, the 
118.31  credit must be allocated based on the ratio of federal adjusted 
118.32  gross income reduced by the earned income not subject to tax 
118.33  under this chapter over federal adjusted gross income. 
118.34     Sec. 8.  Minnesota Statutes 1996, section 290.0671, is 
118.35  amended by adding a subdivision to read: 
118.36     Subd. 1a.  [DEFINITIONS.] For purposes of this section, the 
119.1   terms "qualifying child," "earned income," and "modified 
119.2   adjusted gross income" have the meanings given in section 32(c) 
119.3   of the Internal Revenue Code. 
119.4      Sec. 9.  Minnesota Statutes 1996, section 290.0671, is 
119.5   amended by adding a subdivision to read: 
119.6      Subd. 7.  [INFLATION ADJUSTMENT.] The earned income amounts 
119.7   used to calculate the credit and the income thresholds at which 
119.8   the maximum credit begins to be reduced in subdivision 1 must be 
119.9   adjusted for inflation.  The commissioner shall adjust the 
119.10  earned income and threshold amounts by the percentage determined 
119.11  under section 290.06, subdivision 2d, for the taxable year. 
119.12     Sec. 10.  Minnesota Statutes 1997 Supplement, section 
119.13  290.0673, subdivision 2, is amended to read: 
119.14     Subd. 2.  [QUALIFIED JOB TRAINING PROGRAM.] (a) To qualify 
119.15  for credits under this section, a job training program must 
119.16  satisfy the following requirements: 
119.17     (1) It must be operated by a nonprofit corporation that 
119.18  qualifies under section 501(c)(3) of the Internal Revenue Code. 
119.19     (2) The organization must spend at least $5,000 per 
119.20  graduate of the program. 
119.21     (3) The program must provide education and training in: 
119.22     (i) basic skills, such as reading, writing, mathematics, 
119.23  and communications; 
119.24     (ii) thinking skills, such as reasoning, creative thinking, 
119.25  decision making, and problem solving; and 
119.26     (iii) personal qualities, such as responsibility, 
119.27  self-esteem, self-management, honesty, and integrity. 
119.28     (4) The program must provide income supplements, when 
119.29  needed, to participants for housing, counseling, tuition, and 
119.30  other basic needs. 
119.31     (5) The education and training course must last for at 
119.32  least six months. 
119.33     (6) Individuals served by the program must: 
119.34     (i) be 18 years old or older; 
119.35     (ii) have had federal adjusted gross income of no more than 
119.36  $10,000 $15,000 per year in the last two years; 
120.1      (iii) have assets of no more than $5,000 $7,000, excluding 
120.2   the value of a homestead; and 
120.3      (iv) not have been claimed as a dependent on the federal 
120.4   tax return of another person in the previous taxable year. 
120.5      (7) The program must charge placement and retention fees 
120.6   that cumulatively exceed the amount of credit certificates 
120.7   provided to the employer by at least 20 percent. 
120.8      (b) The program must be certified by the commissioner of 
120.9   children, families, and learning as meeting the requirements of 
120.10  this subdivision. 
120.11     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
120.12  290.0673, subdivision 6, is amended to read: 
120.13     Subd. 6.  [NONREFUNDABLE REFUNDABLE.] The taxpayer must use 
120.14  the tax credit for the taxable year in which the certificate is 
120.15  issued to the employer.  If the credit for the taxable year may 
120.16  not exceed exceeds the liability for tax under section 290.06, 
120.17  subdivision 1, chapter 290 for the taxable year, before 
120.18  reduction by the nonrefundable credits allowed under this 
120.19  chapter the commissioner shall refund the excess to the 
120.20  taxpayer.  An amount sufficient to pay the refunds authorized by 
120.21  this subdivision is appropriated to the commissioner from the 
120.22  general fund. 
120.23     Sec. 12.  Minnesota Statutes 1996, section 290.091, 
120.24  subdivision 2, is amended to read: 
120.25     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
120.26  this section, the following terms have the meanings given: 
120.27     (a) "Alternative minimum taxable income" means the sum of 
120.28  the following for the taxable year: 
120.29     (1) the taxpayer's federal alternative minimum taxable 
120.30  income as defined in section 55(b)(2) of the Internal Revenue 
120.31  Code; 
120.32     (2) the taxpayer's itemized deductions allowed in computing 
120.33  federal alternative minimum taxable income, but excluding: 
120.34     (i) the Minnesota charitable contribution deduction and; 
120.35     (ii) the medical expense deduction; 
120.36     (iii) the casualty, theft, and disaster loss deduction; and 
121.1      (iv) the impairment-related work expenses of a disabled 
121.2   person; 
121.3      (3) for depletion allowances computed under section 613A(c) 
121.4   of the Internal Revenue Code, with respect to each property (as 
121.5   defined in section 614 of the Internal Revenue Code), to the 
121.6   extent not included in federal alternative minimum taxable 
121.7   income, the excess of the deduction for depletion allowable 
121.8   under section 611 of the Internal Revenue Code for the taxable 
121.9   year over the adjusted basis of the property at the end of the 
121.10  taxable year (determined without regard to the depletion 
121.11  deduction for the taxable year); 
121.12     (4) to the extent not included in federal alternative 
121.13  minimum taxable income, the amount of the tax preference for 
121.14  intangible drilling cost under section 57(a)(2) of the Internal 
121.15  Revenue Code determined without regard to subparagraph (E); 
121.16     (5) to the extent not included in federal alternative 
121.17  minimum taxable income, the amount of interest income as 
121.18  provided by section 290.01, subdivision 19a, clause (1); 
121.19     (6) amounts added to federal taxable income as provided by 
121.20  section 290.01, subdivision 19a, clauses (5), (6), and (7); 
121.21     less the sum of the amounts determined under the following 
121.22  clauses (1) to (3) (4): 
121.23     (1) interest income as defined in section 290.01, 
121.24  subdivision 19b, clause (1); 
121.25     (2) an overpayment of state income tax as provided by 
121.26  section 290.01, subdivision 19b, clause (2), to the extent 
121.27  included in federal alternative minimum taxable income; and 
121.28     (3) the amount of investment interest paid or accrued 
121.29  within the taxable year on indebtedness to the extent that the 
121.30  amount does not exceed net investment income, as defined in 
121.31  section 163(d)(4) of the Internal Revenue Code.  Interest does 
121.32  not include amounts deducted in computing federal adjusted gross 
121.33  income; and 
121.34     (4) amounts subtracted from federal taxable income as 
121.35  provided by section 290.01, subdivision 19b, clauses (11) and 
121.36  (12). 
122.1      In the case of an estate or trust, alternative minimum 
122.2   taxable income must be computed as provided in section 59(c) of 
122.3   the Internal Revenue Code. 
122.4      (b) "Investment interest" means investment interest as 
122.5   defined in section 163(d)(3) of the Internal Revenue Code. 
122.6      (c) "Tentative minimum tax" equals seven percent of 
122.7   alternative minimum taxable income after subtracting the 
122.8   exemption amount determined under subdivision 3. 
122.9      (d) "Regular tax" means the tax that would be imposed under 
122.10  this chapter (without regard to this section and section 
122.11  290.032), reduced by the sum of the nonrefundable credits 
122.12  allowed under this chapter.  
122.13     (e) "Net minimum tax" means the minimum tax imposed by this 
122.14  section. 
122.15     (f) "Minnesota charitable contribution deduction" means a 
122.16  charitable contribution deduction under section 170 of the 
122.17  Internal Revenue Code to or for the use of an entity described 
122.18  in section 290.21, subdivision 3, clauses (a) to (e).  When the 
122.19  federal deduction for charitable contributions is limited under 
122.20  section 170(b) of the Internal Revenue Code, the allowable 
122.21  contributions in the year of contribution are deemed to be first 
122.22  contributions to entities described in section 290.21, 
122.23  subdivision 3, clauses (a) to (e). 
122.24     Sec. 13.  Minnesota Statutes 1997 Supplement, section 
122.25  290.091, subdivision 6, is amended to read: 
122.26     Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
122.27  is allowed against the tax imposed by this chapter on 
122.28  individuals, trusts, and estates equal to the minimum tax credit 
122.29  for the taxable year.  The minimum tax credit equals the 
122.30  adjusted net minimum tax for taxable years beginning after 
122.31  December 31, 1988, reduced by the minimum tax credits allowed in 
122.32  a prior taxable year.  The credit may not exceed the excess (if 
122.33  any) for the taxable year of 
122.34     (1) the regular tax, over 
122.35     (2) the greater of (i) the tentative alternative minimum 
122.36  tax, or (ii) zero. 
123.1      (b) The adjusted net minimum tax for a taxable year equals 
123.2   the lesser of the net minimum tax or the excess (if any) of 
123.3      (1) the tentative minimum tax, over 
123.4      (2) seven percent of the sum of 
123.5      (i) adjusted gross income as defined in section 62 of the 
123.6   Internal Revenue Code, 
123.7      (ii) interest income as defined in section 290.01, 
123.8   subdivision 19a, clause (1), 
123.9      (iii) the amount added to federal taxable income as 
123.10  provided by section 290.01, subdivision 19a, clauses (5), (6), 
123.11  and (7), 
123.12     (iv) interest on specified private activity bonds, as 
123.13  defined in section 57(a)(5) of the Internal Revenue Code, to the 
123.14  extent not included under clause (ii), 
123.15     (iv) (v) depletion as defined in section 57(a)(1), 
123.16  determined without regard to the last sentence of paragraph (1), 
123.17  of the Internal Revenue Code, less 
123.18     (v) (vi) the deductions allowed in computing alternative 
123.19  minimum taxable income provided in subdivision 2, paragraph (a), 
123.20  clause (2) of the first series of clauses and clauses (1), 
123.21  (2), and (3), and (4) of the second series of clauses, and 
123.22     (vi) (vii) the exemption amount determined under 
123.23  subdivision 3. 
123.24     In the case of an individual who is not a Minnesota 
123.25  resident for the entire year, adjusted net minimum tax must be 
123.26  multiplied by the fraction defined in section 290.06, 
123.27  subdivision 2c, paragraph (e).  In the case of a trust or 
123.28  estate, adjusted net minimum tax must be multiplied by the 
123.29  fraction defined under subdivision 4, paragraph (b). 
123.30     Sec. 14.  Minnesota Statutes 1996, section 290.10, is 
123.31  amended to read: 
123.32     290.10 [NONDEDUCTIBLE ITEMS.] 
123.33     Except as provided in section 290.17, subdivision 4, 
123.34  paragraph (i), in computing the net income of a corporation 
123.35  taxpayer no deduction shall in any case be allowed for expenses, 
123.36  interest and taxes connected with or allocable against the 
124.1   production or receipt of all income not included in the measure 
124.2   of the tax imposed by this chapter, except that for corporations 
124.3   engaged in the business of mining or producing iron ore, the 
124.4   mining of which is subject to the occupation tax imposed by 
124.5   section 298.01, subdivision 4, this shall not prevent the 
124.6   deduction of expenses and other items to the extent that the 
124.7   expenses and other items are allowable under this chapter and 
124.8   are not deductible, capitalizable, retainable in basis, or taken 
124.9   into account by allowance or otherwise in computing the 
124.10  occupation tax and do not exceed the amounts taken for federal 
124.11  income tax purposes for that year.  Occupation taxes imposed 
124.12  under chapter 298, royalty taxes imposed under chapter 299, or 
124.13  depletion expenses may not be deducted under this clause. 
124.14     Sec. 15.  Minnesota Statutes 1996, section 290.21, 
124.15  subdivision 3, is amended to read: 
124.16     Subd. 3.  An amount for contribution or gifts made within 
124.17  the taxable year: 
124.18     (a) to or for the use of the state of Minnesota, or any of 
124.19  its political subdivisions for exclusively public purposes, 
124.20     (b) to or for the use of any community chest, corporation, 
124.21  organization, trust, fund, association, or foundation located in 
124.22  and carrying on substantially all of its activities within this 
124.23  state, organized and operating exclusively for religious, 
124.24  charitable, public cemetery, scientific, literary, artistic, or 
124.25  educational purposes, or for the prevention of cruelty to 
124.26  children or animals, no part of the net earnings of which inures 
124.27  to the benefit of any private stockholder or individual, 
124.28     (c) to a fraternal society, order, or association, 
124.29  operating under the lodge system located in and carrying on 
124.30  substantially all of their activities within this state if such 
124.31  contributions or gifts are to be used exclusively for the 
124.32  purposes specified in clause (b), or for or to posts or 
124.33  organizations of war veterans or auxiliary units or societies of 
124.34  such posts or organizations, if they are within the state and no 
124.35  part of their net income inures to the benefit of any private 
124.36  shareholder or individual, 
125.1      (d) to or for the use of the United States of America for 
125.2   exclusively public purposes if the contribution or gift consists 
125.3   of real property located in Minnesota, 
125.4      (e) to or for the use of a foundation if the foundation is 
125.5   organized and operated exclusively for a purpose in clause (b), 
125.6   and has no part of its net earnings inuring to the benefit of a 
125.7   private shareholder or individual, but does not carry on 
125.8   substantially all of its activities within this state.  The 
125.9   deduction under this clause equals the amount of the 
125.10  corporation's contributions or gifts to the foundation within 
125.11  the taxable year multiplied by a fraction equal to the ratio of 
125.12  the foundation's total expenditures during the taxable year for 
125.13  the benefit of organizations described in clause (b) to the 
125.14  foundation's total expenditures during the taxable year, 
125.15     (f) the total deduction hereunder shall not exceed 15 
125.16  percent of the taxpayer's taxable net income less the deductions 
125.17  allowable under this section other than those for contributions 
125.18  or gifts, 
125.19     (g) in the case of a corporation reporting its taxable 
125.20  income on the accrual basis, if:  (A) the board of directors 
125.21  authorizes a charitable contribution during any taxable year, 
125.22  and (B) payment of such contribution is made after the close of 
125.23  such taxable year and on or before the 15th day of the third 
125.24  month following the close of such taxable year; then the 
125.25  taxpayer may elect to treat such contribution as paid during 
125.26  such taxable year.  The election may be made only at the time of 
125.27  the filing of the return for such taxable year, and shall be 
125.28  signified in such manner as the commissioner shall by rules 
125.29  prescribe. 
125.30     For a contribution of ordinary income or capital gain 
125.31  property, the amount allowed as a deduction is limited to the 
125.32  amount deductible under section 170(e) of the Internal Revenue 
125.33  Code.  The contribution must also qualify under the rules in 
125.34  clauses (a) to (g) to be deductible. 
125.35     Sec. 16.  Minnesota Statutes 1997 Supplement, section 
125.36  290.371, subdivision 2, is amended to read: 
126.1      Subd. 2.  [EXEMPTIONS.] A corporation is not required to 
126.2   file a notice of business activities report if:  
126.3      (1) by the end of an accounting period for which it was 
126.4   otherwise required to file a notice of business activities 
126.5   report under this section, it had received a certificate of 
126.6   authority to do business in this state; 
126.7      (2) a timely return has been filed under section 289A.08; 
126.8      (3) the corporation is exempt from taxation under this 
126.9   chapter pursuant to section 290.05; or 
126.10     (4) the corporation's activities in Minnesota, or the 
126.11  interests in property which it owns, consist solely of 
126.12  activities or property exempted from jurisdiction to tax under 
126.13  section 290.015, subdivision 3, paragraph (b); or 
126.14     (5) the corporation is an "S" corporation under section 
126.15  290.9725. 
126.16     Sec. 17.  Laws 1995, chapter 255, article 3, section 2, 
126.17  subdivision 1, as amended by Laws 1996, chapter 464, article 4, 
126.18  section 1, and Laws 1997, chapter 231, article 5, section 16, is 
126.19  amended to read: 
126.20     Subdivision 1.  [URBAN REVITALIZATION AND STABILIZATION 
126.21  ZONES.] (a) By September 1, 1995, the metropolitan council shall 
126.22  designate one or more urban revitalization and stabilization 
126.23  zones in the metropolitan area, as defined in section 473.121, 
126.24  subdivision 2.  The designated zones must contain no more than 
126.25  1,000 single family homes in total.  In designating urban 
126.26  revitalization and stabilization zones, the council shall choose 
126.27  areas that are in transition toward blight and poverty.  The 
126.28  council shall use indicators that evidence increasing 
126.29  neighborhood distress such as declining residential property 
126.30  values, declining resident incomes, declining rates of 
126.31  owner-occupancy, and other indicators of blight and poverty in 
126.32  determining which areas are to be urban revitalization and 
126.33  stabilization zones. 
126.34     (b) An urban revitalization and stabilization zone is 
126.35  created in the geographic area composed entirely of parcels that 
126.36  are in whole or in part located within the 1996 65Ldn contour 
127.1   surrounding the Minneapolis-St. Paul International Airport, or 
127.2   within one mile of the boundaries of the 1996 65Ldn contour.  
127.3   For residents of the zone created under this paragraph, 
127.4   eligibility for the program as provided in subdivision 2 is 
127.5   limited to persons buying and occupying a residence in the zone 
127.6   after June 1, 1996, who have entered into purchase agreements 
127.7   related to those homes before July 1, 1997.  Initial 
127.8   applications for the homesteading program in this paragraph 
127.9   shall not be accepted after December 31, 1998. 
127.10     Sec. 18.  Laws 1995, chapter 255, article 3, section 2, 
127.11  subdivision 4, as amended by Laws 1996, chapter 464, article 4, 
127.12  section 2, is amended to read: 
127.13     Subd. 4.  [EXPIRATION.] Initial applications for the urban 
127.14  homesteading program in the zones designated under subdivision 
127.15  1, paragraph (a), shall not be accepted after July 1, 1997, for 
127.16  homes purchased and occupied before May 1, 1997.  For homes 
127.17  purchased and occupied on or after May 1, 1997, but before July 
127.18  1, 1998, initial applications shall not be accepted after June 
127.19  30, 1998. 
127.20     Sec. 19.  [PROHIBITION OF USE OF SOCIAL SECURITY NUMBERS.] 
127.21     No label, envelope, or other material printed by the 
127.22  department of revenue may include the social security number of 
127.23  the taxpayer in a place that will be visible when delivered or 
127.24  mailed to the taxpayer. 
127.25     Sec. 20.  [REPEALER.] 
127.26     Minnesota Statutes 1996, section 289A.50, subdivision 6, is 
127.27  repealed. 
127.28     Sec. 21.  [EFFECTIVE DATES.] 
127.29     Section 1 is effective for extensions received under 
127.30  Minnesota Statutes, section 289A.19, subdivision 2, for tax 
127.31  years beginning after December 31, 1996.  Section 2 is effective 
127.32  retroactive to August 1, 1997.  The change in section 3 made by 
127.33  clause (7) and section 12, paragraph (a), clause (2)(iii) of the 
127.34  first set of clauses, are effective for tax years beginning 
127.35  after December 31, 1996.  The change in section 3 made by clause 
127.36  (8) is effective for tax years beginning after December 31, 1997.
128.1   Sections 4, clauses (11) and (12); 5; 12, paragraph (a), clause 
128.2   (6) of the first set of clauses, and clause (4) of the second 
128.3   set of clauses; 10; 11; and 13 are effective for tax years 
128.4   beginning after December 31, 1996.  Section 6 is effective for 
128.5   tax years beginning after December 31, 1996, except the change 
128.6   in denominator for Minnesota Statutes, section 290.01, 
128.7   subdivision 19b, clause (1), is effective for tax years 
128.8   beginning after December 31, 1997.  Sections 7 and 8 are 
128.9   effective for tax years beginning after December 31, 1997.  
128.10  Section 9 is effective for tax years beginning after December 
128.11  31, 1998.  Section 4, clause (13); section 12, paragraph (a), 
128.12  clause (2)(iv) of the first set of clauses; and sections 14, 15, 
128.13  and 20 are effective for tax years beginning after December 31, 
128.14  1997.  Section 16 is effective for tax years beginning after 
128.15  December 31, 1998.  Sections 17 and 18 are effective the day 
128.16  following final enactment. 
128.17                             ARTICLE 7
128.18                           FEDERAL UPDATE 
128.19     Section 1.  Minnesota Statutes 1997 Supplement, section 
128.20  289A.02, subdivision 7, is amended to read: 
128.21     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
128.22  defined otherwise, "Internal Revenue Code" means the Internal 
128.23  Revenue Code of 1986, as amended through December 31, 1996, and 
128.24  includes the provisions of section 1(a) and (b) of Public Law 
128.25  Number 104-117 1997. 
128.26     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
128.27  290.01, subdivision 19, is amended to read: 
128.28     Subd. 19.  [NET INCOME.] The term "net income" means the 
128.29  federal taxable income, as defined in section 63 of the Internal 
128.30  Revenue Code of 1986, as amended through the date named in this 
128.31  subdivision, incorporating any elections made by the taxpayer in 
128.32  accordance with the Internal Revenue Code in determining federal 
128.33  taxable income for federal income tax purposes, and with the 
128.34  modifications provided in subdivisions 19a to 19f. 
128.35     In the case of a regulated investment company or a fund 
128.36  thereof, as defined in section 851(a) or 851(h) of the Internal 
129.1   Revenue Code, federal taxable income means investment company 
129.2   taxable income as defined in section 852(b)(2) of the Internal 
129.3   Revenue Code, except that:  
129.4      (1) the exclusion of net capital gain provided in section 
129.5   852(b)(2)(A) of the Internal Revenue Code does not apply; 
129.6      (2) the deduction for dividends paid under section 
129.7   852(b)(2)(D) of the Internal Revenue Code must be applied by 
129.8   allowing a deduction for capital gain dividends and 
129.9   exempt-interest dividends as defined in sections 852(b)(3)(C) 
129.10  and 852(b)(5) of the Internal Revenue Code; and 
129.11     (3) the deduction for dividends paid must also be applied 
129.12  in the amount of any undistributed capital gains which the 
129.13  regulated investment company elects to have treated as provided 
129.14  in section 852(b)(3)(D) of the Internal Revenue Code.  
129.15     The net income of a real estate investment trust as defined 
129.16  and limited by section 856(a), (b), and (c) of the Internal 
129.17  Revenue Code means the real estate investment trust taxable 
129.18  income as defined in section 857(b)(2) of the Internal Revenue 
129.19  Code.  
129.20     The net income of a designated settlement fund as defined 
129.21  in section 468B(d) of the Internal Revenue Code means the gross 
129.22  income as defined in section 468B(b) of the Internal Revenue 
129.23  Code. 
129.24     The Internal Revenue Code of 1986, as amended through 
129.25  December 31, 1986, shall be in effect for taxable years 
129.26  beginning after December 31, 1986.  The provisions of sections 
129.27  10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
129.28  10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
129.29  Omnibus Budget Reconciliation Act of 1987, Public Law Number 
129.30  100-203, the provisions of sections 1001, 1002, 1003, 1004, 
129.31  1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
129.32  1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
129.33  6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
129.34  1988, Public Law Number 100-647, the provisions of sections 
129.35  7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
129.36  1989, Public Law Number 101-239, and the provisions of sections 
130.1   1305, 1704(r), and 1704(e)(1) of the Small Business Job 
130.2   Protection Act, Public Law Number 104-188, and the provisions of 
130.3   sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 
130.4   of 1997, Public Law Number 105-34, shall be effective at the 
130.5   time they become effective for federal income tax purposes.  
130.6      The Internal Revenue Code of 1986, as amended through 
130.7   December 31, 1987, shall be in effect for taxable years 
130.8   beginning after December 31, 1987.  The provisions of sections 
130.9   4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
130.10  6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
130.11  6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
130.12  Act of 1988, Public Law Number 100-647, the provisions of 
130.13  sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
130.14  of 1989, Public Law Number 101-239, and the provisions of 
130.15  section 11702 of the Revenue Reconciliation Act of 1990, Public 
130.16  Law Number 101-508, shall become effective at the time they 
130.17  become effective for federal tax purposes.  
130.18     The Internal Revenue Code of 1986, as amended through 
130.19  December 31, 1988, shall be in effect for taxable years 
130.20  beginning after December 31, 1988.  The provisions of sections 
130.21  7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
130.22  7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
130.23  7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
130.24  Reconciliation Act of 1989, Public Law Number 101-239, the 
130.25  provision of section 1401 of the Financial Institutions Reform, 
130.26  Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
130.27  the provisions of sections 11701 and 11703 of the Revenue 
130.28  Reconciliation Act of 1990, Public Law Number 101-508, and the 
130.29  provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 
130.30  Small Business Job Protection Act, Public Law Number 104-188, 
130.31  shall become effective at the time they become effective for 
130.32  federal tax purposes.  
130.33     The Internal Revenue Code of 1986, as amended through 
130.34  December 31, 1989, shall be in effect for taxable years 
130.35  beginning after December 31, 1989.  The provisions of sections 
130.36  11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
131.1   the Revenue Reconciliation Act of 1990, Public Law Number 
131.2   101-508, and the provisions of sections 13224 and 13261 of the 
131.3   Omnibus Budget Reconciliation Act of 1993, Public Law Number 
131.4   103-66, shall become effective at the time they become effective 
131.5   for federal purposes.  
131.6      The Internal Revenue Code of 1986, as amended through 
131.7   December 31, 1990, shall be in effect for taxable years 
131.8   beginning after December 31, 1990. 
131.9      The provisions of section 13431 of the Omnibus Budget 
131.10  Reconciliation Act of 1993, Public Law Number 103-66, shall 
131.11  become effective at the time they became effective for federal 
131.12  purposes.  
131.13     The Internal Revenue Code of 1986, as amended through 
131.14  December 31, 1991, shall be in effect for taxable years 
131.15  beginning after December 31, 1991.  
131.16     The provisions of sections 1936 and 1937 of the 
131.17  Comprehensive National Energy Policy Act of 1992, Public Law 
131.18  Number 102-486, and the provisions of sections 13101, 13114, 
131.19  13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 
131.20  the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
131.21  103-66, and the provisions of section 1604(a)(1), (2), and (3) 
131.22  of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
131.23  shall become effective at the time they become effective for 
131.24  federal purposes.  
131.25     The Internal Revenue Code of 1986, as amended through 
131.26  December 31, 1992, shall be in effect for taxable years 
131.27  beginning after December 31, 1992.  
131.28     The provisions of sections 13116, 13121, 13206, 13210, 
131.29  13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
131.30  the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
131.31  103-66, and the provisions of sections 1703(a), 1703(d), 
131.32  1703(i), 1703(l), and 1703(m) of the Small Business Job 
131.33  Protection Act, Public Law Number 104-188, and the provision of 
131.34  section 1604(c) of the Taxpayer Relief Act of 1997, Public Law 
131.35  Number 105-34, shall become effective at the time they become 
131.36  effective for federal purposes. 
132.1      The Internal Revenue Code of 1986, as amended through 
132.2   December 31, 1993, shall be in effect for taxable years 
132.3   beginning after December 31, 1993. 
132.4      The provision of section 741 of Legislation to Implement 
132.5   Uruguay Round of General Agreement on Tariffs and Trade, Public 
132.6   Law Number 103-465, the provisions of sections 1, 2, and 3, of 
132.7   the Self-Employed Health Insurance Act of 1995, Public Law 
132.8   Number 104-7, the provision of section 501(b)(2) of the Health 
132.9   Insurance Portability and Accountability Act, Public Law Number 
132.10  104-191, and the provisions of sections 1604 and 1704(p)(1) and 
132.11  (2) of the Small Business Job Protection Act, Public Law Number 
132.12  104-188, and the provisions of sections 1011, 1211(b)(1), and 
132.13  1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 
132.14  105-34, shall become effective at the time they become effective 
132.15  for federal purposes. 
132.16     The Internal Revenue Code of 1986, as amended through 
132.17  December 31, 1994, shall be in effect for taxable years 
132.18  beginning after December 31, 1994. 
132.19     The provisions of sections 1119(a), 1120, 1121, 1202(a), 
132.20  1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 
132.21  Business Job Protection Act, Public Law Number 104-188, and the 
132.22  provision of section 511 of the Health Insurance Portability and 
132.23  Accountability Act, Public Law Number 104-191, and the 
132.24  provisions of sections 1174 and 1601(i)(2) of the Taxpayer 
132.25  Relief Act of 1997, Public Law Number 105-34, shall become 
132.26  effective at the time they become effective for federal purposes.
132.27     The Internal Revenue Code of 1986, as amended through March 
132.28  22, 1996, is in effect for taxable years beginning after 
132.29  December 31, 1995. 
132.30     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
132.31  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
132.32  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
132.33  Protection Act, Public Law Number 104-188, and the provisions of 
132.34  Public Law Number 104-117, and the provisions of sections 313(a) 
132.35  and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 
132.36  1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 
133.1   1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 
133.2   1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 
133.3   1997, Public Law Number 105-34, shall become effective at the 
133.4   time they become effective for federal purposes. 
133.5      The Internal Revenue Code of 1986, as amended through 
133.6   December 31, 1996, shall be in effect for taxable years 
133.7   beginning after December 31, 1996. 
133.8      The provisions of sections 202(a) and (b), 221(a), 225, 
133.9   312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
133.10  (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
133.11  1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
133.12  1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
133.13  of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
133.14  shall become effective at the time they become effective for 
133.15  federal purposes. 
133.16     The Internal Revenue Code of 1986, as amended through 
133.17  December 31, 1997, shall be in effect for taxable years 
133.18  beginning after December 31, 1997. 
133.19     Except as otherwise provided, references to the Internal 
133.20  Revenue Code in subdivisions 19a to 19g mean the code in effect 
133.21  for purposes of determining net income for the applicable year. 
133.22     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
133.23  290.01, subdivision 19a, is amended to read: 
133.24     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
133.25  individuals, estates, and trusts, there shall be added to 
133.26  federal taxable income: 
133.27     (1)(i) interest income on obligations of any state other 
133.28  than Minnesota or a political or governmental subdivision, 
133.29  municipality, or governmental agency or instrumentality of any 
133.30  state other than Minnesota exempt from federal income taxes 
133.31  under the Internal Revenue Code or any other federal statute, 
133.32  and 
133.33     (ii) exempt-interest dividends as defined in section 
133.34  852(b)(5) of the Internal Revenue Code, except the portion of 
133.35  the exempt-interest dividends derived from interest income on 
133.36  obligations of the state of Minnesota or its political or 
134.1   governmental subdivisions, municipalities, governmental agencies 
134.2   or instrumentalities, but only if the portion of the 
134.3   exempt-interest dividends from such Minnesota sources paid to 
134.4   all shareholders represents 95 percent or more of the 
134.5   exempt-interest dividends that are paid by the regulated 
134.6   investment company as defined in section 851(a) of the Internal 
134.7   Revenue Code, or the fund of the regulated investment company as 
134.8   defined in section 851(h) of the Internal Revenue Code, making 
134.9   the payment; and 
134.10     (iii) for the purposes of items (i) and (ii), interest on 
134.11  obligations of an Indian tribal government described in section 
134.12  7871(c) of the Internal Revenue Code shall be treated as 
134.13  interest income on obligations of the state in which the tribe 
134.14  is located; 
134.15     (2) the amount of income taxes paid or accrued within the 
134.16  taxable year under this chapter and income taxes paid to any 
134.17  other state or to any province or territory of Canada, to the 
134.18  extent allowed as a deduction under section 63(d) of the 
134.19  Internal Revenue Code, but the addition may not be more than the 
134.20  amount by which the itemized deductions as allowed under section 
134.21  63(d) of the Internal Revenue Code exceeds the amount of the 
134.22  standard deduction as defined in section 63(c) of the Internal 
134.23  Revenue Code.  For the purpose of this paragraph, the 
134.24  disallowance of itemized deductions under section 68 of the 
134.25  Internal Revenue Code of 1986, income tax is the last itemized 
134.26  deduction disallowed; 
134.27     (3) the capital gain amount of a lump sum distribution to 
134.28  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
134.29  Reform Act of 1986, Public Law Number 99-514, applies; 
134.30     (4) the amount of income taxes paid or accrued within the 
134.31  taxable year under this chapter and income taxes paid to any 
134.32  other state or any province or territory of Canada, to the 
134.33  extent allowed as a deduction in determining federal adjusted 
134.34  gross income.  For the purpose of this paragraph, income taxes 
134.35  do not include the taxes imposed by sections 290.0922, 
134.36  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
135.1      (5) the amount of loss or expense included in federal 
135.2   taxable income under section 1366 of the Internal Revenue Code 
135.3   flowing from a corporation that has a valid election in effect 
135.4   for the taxable year under section 1362 of the Internal Revenue 
135.5   Code, but which is not allowed to be an "S" corporation under 
135.6   section 290.9725; and 
135.7      (6) the amount of any distributions in cash or property 
135.8   made to a shareholder during the taxable year by a corporation 
135.9   that has a valid election in effect for the taxable year under 
135.10  section 1362 of the Internal Revenue Code, but which is not 
135.11  allowed to be an "S" corporation under section 290.9725 to the 
135.12  extent not already included in federal taxable income under 
135.13  section 1368 of the Internal Revenue Code.; and 
135.14     (7) the amount of a partner's pro rata share of net income 
135.15  which does not flow through to the partner because the 
135.16  partnership elected to pay the tax on the income under section 
135.17  6242(a)(2) of the Internal Revenue Code. 
135.18     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
135.19  290.01, subdivision 19c, is amended to read: 
135.20     Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
135.21  INCOME.] For corporations, there shall be added to federal 
135.22  taxable income: 
135.23     (1) the amount of any deduction taken for federal income 
135.24  tax purposes for income, excise, or franchise taxes based on net 
135.25  income or related minimum taxes paid by the corporation to 
135.26  Minnesota, another state, a political subdivision of another 
135.27  state, the District of Columbia, or any foreign country or 
135.28  possession of the United States; 
135.29     (2) interest not subject to federal tax upon obligations 
135.30  of:  the United States, its possessions, its agencies, or its 
135.31  instrumentalities; the state of Minnesota or any other state, 
135.32  any of its political or governmental subdivisions, any of its 
135.33  municipalities, or any of its governmental agencies or 
135.34  instrumentalities; the District of Columbia; or Indian tribal 
135.35  governments; 
135.36     (3) exempt-interest dividends received as defined in 
136.1   section 852(b)(5) of the Internal Revenue Code; 
136.2      (4) the amount of any net operating loss deduction taken 
136.3   for federal income tax purposes under section 172 or 832(c)(10) 
136.4   of the Internal Revenue Code or operations loss deduction under 
136.5   section 810 of the Internal Revenue Code; 
136.6      (5) the amount of any special deductions taken for federal 
136.7   income tax purposes under sections 241 to 247 of the Internal 
136.8   Revenue Code; 
136.9      (6) losses from the business of mining, as defined in 
136.10  section 290.05, subdivision 1, clause (a), that are not subject 
136.11  to Minnesota income tax; 
136.12     (7) the amount of any capital losses deducted for federal 
136.13  income tax purposes under sections 1211 and 1212 of the Internal 
136.14  Revenue Code; 
136.15     (8) the amount of any charitable contributions deducted for 
136.16  federal income tax purposes under section 170 of the Internal 
136.17  Revenue Code; 
136.18     (9) the exempt foreign trade income of a foreign sales 
136.19  corporation under sections 921(a) and 291 of the Internal 
136.20  Revenue Code; 
136.21     (10) the amount of percentage depletion deducted under 
136.22  sections 611 through 614 and 291 of the Internal Revenue Code; 
136.23     (11) for certified pollution control facilities placed in 
136.24  service in a taxable year beginning before December 31, 1986, 
136.25  and for which amortization deductions were elected under section 
136.26  169 of the Internal Revenue Code of 1954, as amended through 
136.27  December 31, 1985, the amount of the amortization deduction 
136.28  allowed in computing federal taxable income for those 
136.29  facilities; 
136.30     (12) the amount of any deemed dividend from a foreign 
136.31  operating corporation determined pursuant to section 290.17, 
136.32  subdivision 4, paragraph (g); and 
136.33     (13) the amount of any environmental tax paid under section 
136.34  59(a) of the Internal Revenue Code.; and 
136.35     (14) the amount of a partner's pro rata share of net income 
136.36  which does not flow through to the partner because the 
137.1   partnership elected to pay the tax on the income under section 
137.2   6242(a)(2) of the Internal Revenue Code. 
137.3      Sec. 5.  Minnesota Statutes 1997 Supplement, section 
137.4   290.01, subdivision 31, is amended to read: 
137.5      Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
137.6   defined otherwise, "Internal Revenue Code" means the Internal 
137.7   Revenue Code of 1986, as amended through December 31, 1996, and 
137.8   includes the provisions of section 1(a) and (b) of Public Law 
137.9   Number 104-117 1997. 
137.10     Sec. 6.  Minnesota Statutes 1996, section 290.06, 
137.11  subdivision 2c, is amended to read: 
137.12     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
137.13  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
137.14  married individuals filing joint returns and surviving spouses 
137.15  as defined in section 2(a) of the Internal Revenue Code must be 
137.16  computed by applying to their taxable net income the following 
137.17  schedule of rates: 
137.18     (1) On the first $19,910, 6 percent; 
137.19     (2) On all over $19,910, but not over $79,120, 8 percent; 
137.20     (3) On all over $79,120, 8.5 percent. 
137.21     Married individuals filing separate returns, estates, and 
137.22  trusts must compute their income tax by applying the above rates 
137.23  to their taxable income, except that the income brackets will be 
137.24  one-half of the above amounts.  
137.25     (b) The income taxes imposed by this chapter upon unmarried 
137.26  individuals must be computed by applying to taxable net income 
137.27  the following schedule of rates: 
137.28     (1) On the first $13,620, 6 percent; 
137.29     (2) On all over $13,620, but not over $44,750, 8 percent; 
137.30     (3) On all over $44,750, 8.5 percent. 
137.31     (c) The income taxes imposed by this chapter upon unmarried 
137.32  individuals qualifying as a head of household as defined in 
137.33  section 2(b) of the Internal Revenue Code must be computed by 
137.34  applying to taxable net income the following schedule of rates: 
137.35     (1) On the first $16,770, 6 percent; 
137.36     (2) On all over $16,770, but not over $67,390, 8 percent; 
138.1      (3) On all over $67,390, 8.5 percent. 
138.2      (d) In lieu of a tax computed according to the rates set 
138.3   forth in this subdivision, the tax of any individual taxpayer 
138.4   whose taxable net income for the taxable year is less than an 
138.5   amount determined by the commissioner must be computed in 
138.6   accordance with tables prepared and issued by the commissioner 
138.7   of revenue based on income brackets of not more than $100.  The 
138.8   amount of tax for each bracket shall be computed at the rates 
138.9   set forth in this subdivision, provided that the commissioner 
138.10  may disregard a fractional part of a dollar unless it amounts to 
138.11  50 cents or more, in which case it may be increased to $1. 
138.12     (e) An individual who is not a Minnesota resident for the 
138.13  entire year must compute the individual's Minnesota income tax 
138.14  as provided in this subdivision.  After the application of the 
138.15  nonrefundable credits provided in this chapter, the tax 
138.16  liability must then be multiplied by a fraction in which:  
138.17     (1) The numerator is the individual's Minnesota source 
138.18  federal adjusted gross income as defined in section 62 of the 
138.19  Internal Revenue Code increased by the addition additions 
138.20  required for interest income from non-Minnesota state and 
138.21  municipal bonds under section 290.01, subdivision 19a, clause 
138.22  clauses (1) and (7), after applying the allocation and 
138.23  assignability provisions of section 290.081, clause (a), or 
138.24  290.17; and 
138.25     (2) the denominator is the individual's federal adjusted 
138.26  gross income as defined in section 62 of the Internal Revenue 
138.27  Code of 1986, as amended through April 15, 1995, increased by 
138.28  the addition required for interest income from non-Minnesota 
138.29  state and municipal bonds amounts specified under section 
138.30  290.01, subdivision 19a, clause clauses (1) and (7). 
138.31     Sec. 7.  Minnesota Statutes 1996, section 290.067, 
138.32  subdivision 2a, is amended to read: 
138.33     Subd. 2a.  [INCOME.] (a) For purposes of this section, 
138.34  "income" means the sum of the following: 
138.35     (1) federal adjusted gross income as defined in section 62 
138.36  of the Internal Revenue Code; and 
139.1      (2) the sum of the following amounts to the extent not 
139.2   included in clause (1): 
139.3      (i) all nontaxable income; 
139.4      (ii) the amount of a passive activity loss that is not 
139.5   disallowed as a result of section 469, paragraph (i) or (m) of 
139.6   the Internal Revenue Code and the amount of passive activity 
139.7   loss carryover allowed under section 469(b) of the Internal 
139.8   Revenue Code; 
139.9      (iii) an amount equal to the total of any discharge of 
139.10  qualified farm indebtedness of a solvent individual excluded 
139.11  from gross income under section 108(g) of the Internal Revenue 
139.12  Code; 
139.13     (iv) cash public assistance and relief; 
139.14     (v) any pension or annuity (including railroad retirement 
139.15  benefits, all payments received under the federal Social 
139.16  Security Act, supplemental security income, and veterans 
139.17  benefits), which was not exclusively funded by the claimant or 
139.18  spouse, or which was funded exclusively by the claimant or 
139.19  spouse and which funding payments were excluded from federal 
139.20  adjusted gross income in the years when the payments were made; 
139.21     (vi) interest received from the federal or a state 
139.22  government or any instrumentality or political subdivision 
139.23  thereof; 
139.24     (vii) workers' compensation; 
139.25     (viii) nontaxable strike benefits; 
139.26     (ix) the gross amounts of payments received in the nature 
139.27  of disability income or sick pay as a result of accident, 
139.28  sickness, or other disability, whether funded through insurance 
139.29  or otherwise; 
139.30     (x) a lump sum distribution under section 402(e)(3) of the 
139.31  Internal Revenue Code; 
139.32     (xi) contributions made by the claimant to an individual 
139.33  retirement account, including a qualified voluntary employee 
139.34  contribution; simplified employee pension plan; self-employed 
139.35  retirement plan; cash or deferred arrangement plan under section 
139.36  401(k) of the Internal Revenue Code; or deferred compensation 
140.1   plan under section 457 of the Internal Revenue Code; and 
140.2      (xii) nontaxable scholarship or fellowship grants. 
140.3      In the case of an individual who files an income tax return 
140.4   on a fiscal year basis, the term "federal adjusted gross income" 
140.5   means federal adjusted gross income reflected in the fiscal year 
140.6   ending in the next calendar year.  Federal adjusted gross income 
140.7   may not be reduced by the amount of a net operating loss 
140.8   carryback or carryforward or a capital loss carryback or 
140.9   carryforward allowed for the year. 
140.10     (b) "Income" does not include: 
140.11     (1) amounts excluded pursuant to the Internal Revenue Code, 
140.12  sections 101(a), and 102, and 121; 
140.13     (2) amounts of any pension or annuity that were exclusively 
140.14  funded by the claimant or spouse if the funding payments were 
140.15  not excluded from federal adjusted gross income in the years 
140.16  when the payments were made; 
140.17     (3) surplus food or other relief in kind supplied by a 
140.18  governmental agency; 
140.19     (4) relief granted under chapter 290A; and 
140.20     (5) child support payments received under a temporary or 
140.21  final decree of dissolution or legal separation. 
140.22     Sec. 8.  Minnesota Statutes 1996, section 290.0921, 
140.23  subdivision 3a, is amended to read: 
140.24     Subd. 3a.  [EXEMPTIONS.] The following entities are exempt 
140.25  from the tax imposed by this section: 
140.26     (1) cooperatives taxable under subchapter T of the Internal 
140.27  Revenue Code or organized under chapter 308 or a similar law of 
140.28  another state; 
140.29     (2) corporations subject to tax under section 60A.15, 
140.30  subdivision 1; 
140.31     (3) real estate investment trusts; 
140.32     (4) regulated investment companies or a fund thereof; and 
140.33     (5) entities having a valid election in effect under 
140.34  section 860D(b) of the Internal Revenue Code.; and 
140.35     (6) small corporations exempt from the federal alternative 
140.36  minimum tax under section 55(e) of the Internal Revenue Code. 
141.1      Sec. 9.  Minnesota Statutes 1996, section 290A.03, 
141.2   subdivision 3, is amended to read: 
141.3      Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
141.4   following:  
141.5      (a) federal adjusted gross income as defined in the 
141.6   Internal Revenue Code; and 
141.7      (b) the sum of the following amounts to the extent not 
141.8   included in clause (a):  
141.9      (i) all nontaxable income; 
141.10     (ii) the amount of a passive activity loss that is not 
141.11  disallowed as a result of section 469, paragraph (i) or (m) of 
141.12  the Internal Revenue Code and the amount of passive activity 
141.13  loss carryover allowed under section 469(b) of the Internal 
141.14  Revenue Code; 
141.15     (iii) an amount equal to the total of any discharge of 
141.16  qualified farm indebtedness of a solvent individual excluded 
141.17  from gross income under section 108(g) of the Internal Revenue 
141.18  Code; 
141.19     (iv) cash public assistance and relief; 
141.20     (v) any pension or annuity (including railroad retirement 
141.21  benefits, all payments received under the federal Social 
141.22  Security Act, supplemental security income, and veterans 
141.23  benefits), which was not exclusively funded by the claimant or 
141.24  spouse, or which was funded exclusively by the claimant or 
141.25  spouse and which funding payments were excluded from federal 
141.26  adjusted gross income in the years when the payments were made; 
141.27     (vi) interest received from the federal or a state 
141.28  government or any instrumentality or political subdivision 
141.29  thereof; 
141.30     (vii) workers' compensation; 
141.31     (viii) nontaxable strike benefits; 
141.32     (ix) the gross amounts of payments received in the nature 
141.33  of disability income or sick pay as a result of accident, 
141.34  sickness, or other disability, whether funded through insurance 
141.35  or otherwise; 
141.36     (x) a lump sum distribution under section 402(e)(3) of the 
142.1   Internal Revenue Code; 
142.2      (xi) contributions made by the claimant to an individual 
142.3   retirement account, including a qualified voluntary employee 
142.4   contribution; simplified employee pension plan; self-employed 
142.5   retirement plan; cash or deferred arrangement plan under section 
142.6   401(k) of the Internal Revenue Code; or deferred compensation 
142.7   plan under section 457 of the Internal Revenue Code; and 
142.8      (xii) nontaxable scholarship or fellowship grants.  
142.9      In the case of an individual who files an income tax return 
142.10  on a fiscal year basis, the term "federal adjusted gross income" 
142.11  shall mean federal adjusted gross income reflected in the fiscal 
142.12  year ending in the calendar year.  Federal adjusted gross income 
142.13  shall not be reduced by the amount of a net operating loss 
142.14  carryback or carryforward or a capital loss carryback or 
142.15  carryforward allowed for the year.  
142.16     (2) "Income" does not include 
142.17     (a) amounts excluded pursuant to the Internal Revenue Code, 
142.18  sections 101(a), and 102, and 121; 
142.19     (b) amounts of any pension or annuity which was exclusively 
142.20  funded by the claimant or spouse and which funding payments were 
142.21  not excluded from federal adjusted gross income in the years 
142.22  when the payments were made; 
142.23     (c) surplus food or other relief in kind supplied by a 
142.24  governmental agency; 
142.25     (d) relief granted under this chapter; or 
142.26     (e) child support payments received under a temporary or 
142.27  final decree of dissolution or legal separation.  
142.28     (3) The sum of the following amounts may be subtracted from 
142.29  income:  
142.30     (a) for the claimant's first dependent, the exemption 
142.31  amount multiplied by 1.4; 
142.32     (b) for the claimant's second dependent, the exemption 
142.33  amount multiplied by 1.3; 
142.34     (c) for the claimant's third dependent, the exemption 
142.35  amount multiplied by 1.2; 
142.36     (d) for the claimant's fourth dependent, the exemption 
143.1   amount multiplied by 1.1; 
143.2      (e) for the claimant's fifth dependent, the exemption 
143.3   amount; and 
143.4      (f) if the claimant or claimant's spouse was disabled or 
143.5   attained the age of 65 on or before December 31 of the year for 
143.6   which the taxes were levied or rent paid, the exemption amount.  
143.7      For purposes of this subdivision, the "exemption amount" 
143.8   means the exemption amount under section 151(d) of the Internal 
143.9   Revenue Code for the taxable year for which the income is 
143.10  reported.  
143.11     Sec. 10.  Minnesota Statutes 1997 Supplement, section 
143.12  290A.03, subdivision 15, is amended to read: 
143.13     Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
143.14  means the Internal Revenue Code of 1986, as amended through 
143.15  December 31, 1996 1997. 
143.16     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
143.17  291.005, subdivision 1, is amended to read: 
143.18     Subdivision 1.  Unless the context otherwise clearly 
143.19  requires, the following terms used in this chapter shall have 
143.20  the following meanings: 
143.21     (1) "Federal gross estate" means the gross estate of a 
143.22  decedent as valued and otherwise determined for federal estate 
143.23  tax purposes by federal taxing authorities pursuant to the 
143.24  provisions of the Internal Revenue Code. 
143.25     (2) "Minnesota gross estate" means the federal gross estate 
143.26  of a decedent after (a) excluding therefrom any property 
143.27  included therein which has its situs outside Minnesota and (b) 
143.28  including therein any property omitted from the federal gross 
143.29  estate which is includable therein, has its situs in Minnesota, 
143.30  and was not disclosed to federal taxing authorities.  
143.31     (3) "Personal representative" means the executor, 
143.32  administrator or other person appointed by the court to 
143.33  administer and dispose of the property of the decedent.  If 
143.34  there is no executor, administrator or other person appointed, 
143.35  qualified, and acting within this state, then any person in 
143.36  actual or constructive possession of any property having a situs 
144.1   in this state which is included in the federal gross estate of 
144.2   the decedent shall be deemed to be a personal representative to 
144.3   the extent of the property and the Minnesota estate tax due with 
144.4   respect to the property. 
144.5      (4) "Resident decedent" means an individual whose domicile 
144.6   at the time of death was in Minnesota. 
144.7      (5) "Nonresident decedent" means an individual whose 
144.8   domicile at the time of death was not in Minnesota. 
144.9      (6) "Situs of property" means, with respect to real 
144.10  property, the state or country in which it is located; with 
144.11  respect to tangible personal property, the state or country in 
144.12  which it was normally kept or located at the time of the 
144.13  decedent's death; and with respect to intangible personal 
144.14  property, the state or country in which the decedent was 
144.15  domiciled at death. 
144.16     (7) "Commissioner" means the commissioner of revenue or any 
144.17  person to whom the commissioner has delegated functions under 
144.18  this chapter. 
144.19     (8) "Internal Revenue Code" means the United States 
144.20  Internal Revenue Code of 1986, as amended through December 31, 
144.21  1996, and includes the provisions of section 1(a)(4) of Public 
144.22  Law Number 104-117 1997. 
144.23     Sec. 12.  [INSTRUCTION TO REVISOR.] 
144.24     Each place in Minnesota Statutes that refers to section 
144.25  851(h) or 851(q) of the Internal Revenue Code, the revisor in 
144.26  the next edition of Minnesota Statutes shall substitute "851(g)" 
144.27  for those references. 
144.28     Sec. 13.  [EFFECTIVE DATES.] 
144.29     Sections 1, 3, 4, and 6 to 9 are effective for tax years 
144.30  beginning after December 31, 1997.  Sections 5, 10, and 11 are 
144.31  effective at the same time federal changes made by the Taxpayer 
144.32  Relief Act of 1997, Public Law Number 105-34, which are 
144.33  incorporated into Minnesota Statutes, chapters 290, 290A, and 
144.34  291 by these sections, become effective for federal tax purposes.
144.35                             ARTICLE 8 
144.36                             SALES TAX 
145.1      Section 1.  Minnesota Statutes 1996, section 297A.01, 
145.2   subdivision 8, is amended to read: 
145.3      Subd. 8.  "Sales price" means the total consideration 
145.4   valued in money, for a retail sale whether paid in money or 
145.5   otherwise, excluding therefrom any amount allowed as credit for 
145.6   tangible personal property taken in trade for resale, without 
145.7   deduction for the cost of the property sold, cost of materials 
145.8   used, labor or service cost, interest, or discount allowed after 
145.9   the sale is consummated, the cost of transportation incurred 
145.10  prior to the time of sale, any amount for which credit is given 
145.11  to the purchaser by the seller, or any other expense 
145.12  whatsoever.  A deduction may be made for charges of up to 15 
145.13  percent in lieu of tips, if the consideration for such charges 
145.14  is separately stated.  No deduction shall be allowed for charges 
145.15  for services that are part of a sale.  Except as otherwise 
145.16  provided in this subdivision, a deduction may also be made for 
145.17  interest, financing, or carrying charges, charges for labor or 
145.18  services used in installing or applying the property sold or 
145.19  transportation charges if the transportation occurs after the 
145.20  retail sale of the property only if the consideration for such 
145.21  charges is separately stated.  "Sales price," for purposes of 
145.22  sales of ready-mixed concrete sold from a ready-mixed concrete 
145.23  truck, includes any transportation, delivery, or other service 
145.24  charges, and no deduction is allowed for those charges, whether 
145.25  or not the charges are separately stated.  There shall not be 
145.26  included in "sales price" cash discounts allowed and taken on 
145.27  sales or the amount refunded either in cash or in credit for 
145.28  property returned by purchasers. 
145.29     Sec. 2.  Minnesota Statutes 1996, section 297A.01, 
145.30  subdivision 15, is amended to read: 
145.31     Subd. 15.  "Farm machinery" means new or used machinery, 
145.32  equipment, implements, accessories, and contrivances used 
145.33  directly and principally in the production for sale, but not 
145.34  including the processing, of livestock, dairy animals, dairy 
145.35  products, poultry and poultry products, fruits, vegetables, 
145.36  forage, grains and bees and apiary products.  "Farm machinery"  
146.1   includes: 
146.2      (1) machinery for the preparation, seeding or cultivation 
146.3   of soil for growing agricultural crops and sod, harvesting and 
146.4   threshing of agricultural products, harvesting or mowing of sod, 
146.5   and certain machinery for dairy, livestock and poultry farms; 
146.6      (2) barn cleaners, milking systems, grain dryers, automatic 
146.7   feeding systems and similar installations, whether or not the 
146.8   equipment is installed by the seller and becomes part of the 
146.9   real property; 
146.10     (3) irrigation equipment sold for exclusively agricultural 
146.11  use, including pumps, pipe fittings, valves, sprinklers and 
146.12  other equipment necessary to the operation of an irrigation 
146.13  system when sold as part of an irrigation system, whether or not 
146.14  the equipment is installed by the seller and becomes part of the 
146.15  real property; 
146.16     (4) logging equipment, including chain saws used for 
146.17  commercial logging; 
146.18     (5) fencing used for the containment of farmed cervidae, as 
146.19  defined in section 17.451, subdivision 2; and 
146.20     (6) primary and backup generator units used to generate 
146.21  electricity for the purpose of operating farm machinery, as 
146.22  defined in this subdivision, or providing light or space heating 
146.23  necessary for the production of livestock, dairy animals, dairy 
146.24  products, or poultry and poultry products; and 
146.25     (7) aquaculture production equipment as defined in 
146.26  subdivision 19.  
146.27     Repair or replacement parts for farm machinery shall not be 
146.28  included in the definition of farm machinery.  
146.29     Tools, shop equipment, grain bins, feed bunks, fencing 
146.30  material except fencing material covered by clause (5), 
146.31  communication equipment and other farm supplies shall not be 
146.32  considered to be farm machinery.  "Farm machinery" does not 
146.33  include motor vehicles taxed under chapter 297B, snowmobiles, 
146.34  snow blowers, lawn mowers except those used in the production of 
146.35  sod for sale, garden-type tractors or garden tillers and the 
146.36  repair and replacement parts for those vehicles and machines. 
147.1      Sec. 3.  Minnesota Statutes 1997 Supplement, section 
147.2   297A.01, subdivision 16, is amended to read: 
147.3      Subd. 16.  [CAPITAL EQUIPMENT.] (a) Capital equipment means 
147.4   machinery and equipment purchased or leased for use in this 
147.5   state and used by the purchaser or lessee primarily for 
147.6   manufacturing, fabricating, mining, or refining tangible 
147.7   personal property to be sold ultimately at retail and for 
147.8   electronically transmitting results retrieved by a customer of 
147.9   an on-line computerized data retrieval system.  
147.10     (b) Capital equipment includes all machinery and equipment 
147.11  that is essential to the integrated production process.  Capital 
147.12  equipment includes, but is not limited to: 
147.13     (1) machinery and equipment used or required to operate, 
147.14  control, or regulate the production equipment; 
147.15     (2) machinery and equipment used for research and 
147.16  development, design, quality control, and testing activities; 
147.17     (3) environmental control devices that are used to maintain 
147.18  conditions such as temperature, humidity, light, or air pressure 
147.19  when those conditions are essential to and are part of the 
147.20  production process; 
147.21     (4) materials and supplies necessary to construct and 
147.22  install machinery or equipment; 
147.23     (5) repair and replacement parts, including accessories, 
147.24  whether purchased as spare parts, repair parts, or as upgrades 
147.25  or modifications to machinery or equipment; 
147.26     (6) materials used for foundations that support machinery 
147.27  or equipment; or 
147.28     (7) materials used to construct and install special purpose 
147.29  buildings used in the production process; or 
147.30     (8) ready-mixed concrete trucks in which the ready-mixed 
147.31  concrete is mixed as part of the delivery process. 
147.32     (c) Capital equipment does not include the following: 
147.33     (1) motor vehicles taxed under chapter 297B; 
147.34     (2) machinery or equipment used to receive or store raw 
147.35  materials; 
147.36     (3) building materials; 
148.1      (4) machinery or equipment used for nonproduction purposes, 
148.2   including, but not limited to, the following:  machinery and 
148.3   equipment used for plant security, fire prevention, first aid, 
148.4   and hospital stations; machinery and equipment used in support 
148.5   operations or for administrative purposes; machinery and 
148.6   equipment used solely for pollution control, prevention, or 
148.7   abatement; and machinery and equipment used in plant cleaning, 
148.8   disposal of scrap and waste, plant communications, space 
148.9   heating, lighting, or safety; 
148.10     (5) "farm machinery" as defined by subdivision 15, and 
148.11  "aquaculture production equipment" as defined by subdivision 19; 
148.12  or 
148.13     (6) any other item that is not essential to the integrated 
148.14  process of manufacturing, fabricating, mining, or refining. 
148.15     (d) For purposes of this subdivision: 
148.16     (1) "Equipment" means independent devices or tools separate 
148.17  from machinery but essential to an integrated production 
148.18  process, including computers and software, used in operating, 
148.19  controlling, or regulating machinery and equipment; and any 
148.20  subunit or assembly comprising a component of any machinery or 
148.21  accessory or attachment parts of machinery, such as tools, dies, 
148.22  jigs, patterns, and molds. 
148.23     (2) "Fabricating" means to make, build, create, produce, or 
148.24  assemble components or property to work in a new or different 
148.25  manner. 
148.26     (3) "Machinery" means mechanical, electronic, or electrical 
148.27  devices, including computers and software, that are purchased or 
148.28  constructed to be used for the activities set forth in paragraph 
148.29  (a), beginning with the removal of raw materials from inventory 
148.30  through the completion of the product, including packaging of 
148.31  the product. 
148.32     (4) "Manufacturing" means an operation or series of 
148.33  operations where raw materials are changed in form, composition, 
148.34  or condition by machinery and equipment and which results in the 
148.35  production of a new article of tangible personal property.  For 
148.36  purposes of this subdivision, "manufacturing" includes the 
149.1   generation of electricity or steam to be sold at retail. 
149.2      (5) "Mining" means the extraction of minerals, ores, stone, 
149.3   and peat. 
149.4      (6) "On-line data retrieval system" means a system whose 
149.5   cumulation of information is equally available and accessible to 
149.6   all its customers. 
149.7      (7) "Pollution control equipment" means machinery and 
149.8   equipment used to eliminate, prevent, or reduce pollution 
149.9   resulting from an activity described in paragraph (a). 
149.10     (8) "Primarily" means machinery and equipment used 50 
149.11  percent or more of the time in an activity described in 
149.12  paragraph (a). 
149.13     (9) "Refining" means the process of converting a natural 
149.14  resource to a product, including the treatment of water to be 
149.15  sold at retail. 
149.16     (e) For purposes of this subdivision the requirement that 
149.17  the machinery or equipment "must be used by the purchaser or 
149.18  lessee" means that the person who purchases or leases the 
149.19  machinery or equipment must be the one who uses it for the 
149.20  qualifying purpose.  When a contractor buys and installs 
149.21  machinery or equipment as part of an improvement to real 
149.22  property, only the contractor is considered the purchaser. 
149.23     Sec. 4.  Minnesota Statutes 1996, section 297A.02, 
149.24  subdivision 2, is amended to read: 
149.25     Subd. 2.  [MACHINERY AND EQUIPMENT.] Notwithstanding the 
149.26  provisions of subdivision 1, the rate of the excise tax imposed 
149.27  upon sales of farm machinery and aquaculture production 
149.28  equipment is 2.5 2.0 percent for sales after June 30, 1998, and 
149.29  before July 1, 1999, and 1.0 percent for sales after June 30, 
149.30  1999, and before July 1, 2000. 
149.31     Sec. 5.  Minnesota Statutes 1996, section 297A.02, 
149.32  subdivision 4, is amended to read: 
149.33     Subd. 4.  [MANUFACTURED HOUSING AND PARK TRAILERS.] 
149.34  Notwithstanding the provisions of subdivision 1, for sales at 
149.35  retail of manufactured homes as defined in section 327.31, 
149.36  subdivision 6, that are used for residential purposes and new or 
150.1   used park trailers, as defined in section 168.011, subdivision 
150.2   8, paragraph (b), the excise tax is imposed upon 65 percent of 
150.3   the sales price dealer's cost of the home or, and for sales of 
150.4   new and used park trailers, as defined in section 168.011, 
150.5   subdivision 8, paragraph (b), the excise tax is imposed upon 65 
150.6   percent of the sales price of the park trailer. 
150.7      Sec. 6.  Minnesota Statutes 1996, section 297A.135, 
150.8   subdivision 4, as amended by Laws 1997, Third Special Session 
150.9   chapter 3, section 23, is amended to read: 
150.10     Subd. 4.  [EXEMPTION EXEMPTIONS.] (a) The tax and the fee 
150.11  imposed by this section do not apply to a lease or rental of (1) 
150.12  a vehicle to be used by the lessee to provide a licensed taxi 
150.13  service; (2) a hearse or limousine used in connection with a 
150.14  burial or funeral service; or (3) a van designed or adapted 
150.15  primarily for transporting property rather than passengers. 
150.16     (b) The lessor may elect not to charge the fee imposed in 
150.17  subdivision 1a if in the previous calendar year the lessor had 
150.18  no more than 20 vehicles available for lease that would have 
150.19  been subject to tax under this section, or no more than $50,000 
150.20  in gross receipts that would have been subject to tax under this 
150.21  section. 
150.22     Sec. 7.  Minnesota Statutes 1996, section 297A.135, 
150.23  subdivision 5, as added by Laws 1997, Third Special Session 
150.24  chapter 3, section 23, is amended to read: 
150.25     Subd. 5.  [PAYMENT OF EXCESS FEES.] On the first sales tax 
150.26  return due following the end of a calendar year during which a 
150.27  lessor has imposed a fee under subdivision 1a, the lessor shall 
150.28  report to the commissioner of revenue, in the form required by 
150.29  the commissioner, the amount of the fee collected and the amount 
150.30  of motor vehicle registration taxes paid by the lessor under 
150.31  chapter 168 on vehicles subject to the fee under this section.  
150.32  If the amount of the fee collected during the previous year 
150.33  exceeds the amount of motor vehicle registration taxes paid 
150.34  under chapter 168 during the previous year, the lessor shall 
150.35  remit the excess to the commissioner of revenue at the time the 
150.36  report is submitted. 
151.1      Sec. 8.  Minnesota Statutes 1997 Supplement, section 
151.2   297A.25, subdivision 3, is amended to read: 
151.3      Subd. 3.  [MEDICINES; MEDICAL DEVICES.] The gross receipts 
151.4   from the sale of and storage, use, or consumption of prescribed 
151.5   drugs, prescribed medicine and insulin, intended for use, 
151.6   internal or external, in the cure, mitigation, treatment or 
151.7   prevention of illness or disease in human beings are exempt, 
151.8   together with prescription glasses, fever thermometers, 
151.9   therapeutic, and prosthetic devices.  "Prescribed drugs" or 
151.10  "prescribed medicine" includes over-the-counter drugs or 
151.11  medicine prescribed by a licensed physician.  "Therapeutic 
151.12  devices" includes reusable finger pricking devices for the 
151.13  extraction of blood, blood glucose monitoring machines, and 
151.14  other diagnostic agents used in diagnosing, monitoring, or 
151.15  treating diabetes.  Nonprescription analgesics consisting 
151.16  principally (determined by the weight of all ingredients) of 
151.17  acetaminophen, acetylsalicylic acid, ibuprofen, ketoprofen, 
151.18  naproxen, and other nonprescription analgesics that are approved 
151.19  by the United States Food and Drug Administration for internal 
151.20  use by human beings, or a combination thereof, are exempt. 
151.21     Medical supplies purchased by a licensed health care 
151.22  facility or licensed health care professional to provide medical 
151.23  treatment to residents or patients are exempt.  The exemption 
151.24  does not apply to medical equipment or components of medical 
151.25  equipment, laboratory supplies, radiological supplies, and other 
151.26  items used in providing medical services.  For purposes of this 
151.27  subdivision, "medical supplies" means adhesive and nonadhesive 
151.28  bandages, gauze pads and strips, cotton applicators, 
151.29  antiseptics, nonprescription drugs, eye solution, and other 
151.30  similar supplies used directly on the resident or patient in 
151.31  providing medical services. 
151.32     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
151.33  297A.25, subdivision 9, is amended to read: 
151.34     Subd. 9.  [MATERIALS CONSUMED IN PRODUCTION.] The gross 
151.35  receipts from the sale of and the storage, use, or consumption 
151.36  of all materials, including chemicals, fuels, petroleum 
152.1   products, lubricants, packaging materials, including returnable 
152.2   containers used in packaging food and beverage products, feeds, 
152.3   seeds, fertilizers, electricity, gas and steam, used or consumed 
152.4   in agricultural or industrial production of personal property 
152.5   intended to be sold ultimately at retail, whether or not the 
152.6   item so used becomes an ingredient or constituent part of the 
152.7   property produced are exempt.  Seeds, trees, fertilizers, and 
152.8   herbicides purchased for use by farmers in the Conservation 
152.9   Reserve Program under United States Code, title 16, section 
152.10  590h, as amended through December 31, 1991, the Integrated Farm 
152.11  Management Program under section 1627 of Public Law Number 
152.12  101-624, the Wheat and Feed Grain Programs under sections 301 to 
152.13  305 and 401 to 405 of Public Law Number 101-624, and the 
152.14  conservation reserve program under sections 103F.505 to 
152.15  103F.531, are included in this exemption.  Sales to a 
152.16  veterinarian of materials used or consumed in the care, 
152.17  medication, and treatment of horses and agricultural production 
152.18  animals are exempt under this subdivision.  Chemicals used for 
152.19  cleaning food processing machinery and equipment are included in 
152.20  this exemption.  Materials, including chemicals, fuels, and 
152.21  electricity purchased by persons engaged in agricultural or 
152.22  industrial production to treat waste generated as a result of 
152.23  the production process are included in this exemption.  Such 
152.24  production shall include, but is not limited to, research, 
152.25  development, design or production of any tangible personal 
152.26  property, manufacturing, processing (other than by restaurants 
152.27  and consumers) of agricultural products whether vegetable or 
152.28  animal, commercial fishing, refining, smelting, reducing, 
152.29  brewing, distilling, printing, mining, quarrying, lumbering, 
152.30  generating electricity and the production of road building 
152.31  materials.  Such production shall not include painting, 
152.32  cleaning, repairing or similar processing of property except as 
152.33  part of the original manufacturing process.  Machinery, 
152.34  equipment, implements, tools, accessories, appliances, 
152.35  contrivances, furniture and fixtures, used in such production 
152.36  and fuel, electricity, gas or steam used for space heating or 
153.1   lighting, are not included within this exemption; however, 
153.2   accessory tools, equipment and other short lived items, which 
153.3   are separate detachable units used in producing a direct effect 
153.4   upon the product, where such items have an ordinary useful life 
153.5   of less than 12 months, are included within the exemption 
153.6   provided herein.  Electricity used to make snow for outdoor use 
153.7   for ski hills, ski slopes, or ski trails is included in this 
153.8   exemption.  Petroleum and special fuels used in producing or 
153.9   generating power for propelling ready-mixed concrete trucks on 
153.10  the public highways of this state are not included in this 
153.11  exemption. 
153.12     Sec. 10.  Minnesota Statutes 1997 Supplement, section 
153.13  297A.25, subdivision 11, is amended to read: 
153.14     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
153.15  all sales, including sales in which title is retained by a 
153.16  seller or a vendor or is assigned to a third party under an 
153.17  installment sale or lease purchase agreement under section 
153.18  465.71, of tangible personal property to, and all storage, use 
153.19  or consumption of such property by, the United States and its 
153.20  agencies and instrumentalities, the University of Minnesota, 
153.21  state universities, community colleges, technical colleges, 
153.22  state academies, the Lola and Rudy Perpich Minnesota center for 
153.23  arts education, and an instrumentality of a political 
153.24  subdivision that is accredited as an optional/special function 
153.25  school by the North Central Association of Colleges and Schools, 
153.26  school districts, public libraries, public library systems, 
153.27  multicounty, multitype library systems as defined in section 
153.28  134.001, county law libraries under chapter 134A, the state 
153.29  library under section 480.09, and the legislative reference 
153.30  library are exempt. 
153.31     As used in this subdivision, "school districts" means 
153.32  public school entities and districts of every kind and nature 
153.33  organized under the laws of the state of Minnesota, including, 
153.34  without limitation, school districts, intermediate school 
153.35  districts, education districts, service cooperatives, secondary 
153.36  vocational cooperative centers, special education cooperatives, 
154.1   joint purchasing cooperatives, telecommunication cooperatives, 
154.2   regional management information centers, and any instrumentality 
154.3   of a school district, as defined in section 471.59. 
154.4      Sales exempted by this subdivision include sales under 
154.5   section 297A.01, subdivision 3, paragraph (f).  
154.6      Sales to hospitals and nursing homes owned and operated by 
154.7   political subdivisions of the state are exempt under this 
154.8   subdivision.  
154.9      The sales to and exclusively for the use of libraries of 
154.10  books, periodicals, audio-visual materials and equipment, 
154.11  photocopiers for use by the public, and all cataloguing and 
154.12  circulation equipment, and cataloguing and circulation software 
154.13  for library use are exempt under this subdivision.  For purposes 
154.14  of this paragraph "libraries" means libraries as defined in 
154.15  section 134.001, county law libraries under chapter 134A, the 
154.16  state library under section 480.09, and the legislative 
154.17  reference library. 
154.18     Sales of supplies and equipment used in the operation of an 
154.19  ambulance service owned and operated by a political subdivision 
154.20  of the state are exempt under this subdivision provided that the 
154.21  supplies and equipment are used in the course of providing 
154.22  medical care.  Sales to a political subdivision of repair and 
154.23  replacement parts for emergency rescue vehicles and fire trucks 
154.24  and apparatus are exempt under this subdivision.  
154.25     Sales to a political subdivision of machinery and 
154.26  equipment, except for motor vehicles, used directly for mixed 
154.27  municipal solid waste management services at a solid waste 
154.28  disposal facility as defined in section 115A.03, subdivision 10, 
154.29  are exempt under this subdivision.  
154.30     Sales to political subdivisions of chore and homemaking 
154.31  services to be provided to elderly or disabled individuals are 
154.32  exempt. 
154.33     Sales to a town of gravel and of machinery, equipment, and 
154.34  accessories, except motor vehicles, used exclusively for road 
154.35  and bridge maintenance are exempt. 
154.36     Sales of telephone services to the department of 
155.1   administration that are used to provide telecommunications 
155.2   services through the intertechnologies revolving fund are exempt 
155.3   under this subdivision. 
155.4      This exemption shall not apply to building, construction or 
155.5   reconstruction materials purchased by a contractor or a 
155.6   subcontractor as a part of a lump-sum contract or similar type 
155.7   of contract with a guaranteed maximum price covering both labor 
155.8   and materials for use in the construction, alteration, or repair 
155.9   of a building or facility.  This exemption does not apply to 
155.10  construction materials purchased by tax exempt entities or their 
155.11  contractors to be used in constructing buildings or facilities 
155.12  which will not be used principally by the tax exempt entities. 
155.13     This exemption does not apply to the leasing of a motor 
155.14  vehicle as defined in section 297B.01, subdivision 5, except for 
155.15  leases entered into by the United States or its agencies or 
155.16  instrumentalities.  
155.17     The tax imposed on sales to political subdivisions of the 
155.18  state under this section applies to all political subdivisions 
155.19  other than those explicitly exempted under this subdivision, 
155.20  notwithstanding section 115A.69, subdivision 6, 116A.25, 
155.21  360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
155.22  469.127, 473.448, 473.545, or 473.608 or any other law to the 
155.23  contrary enacted before 1992. 
155.24     Sales exempted by this subdivision include sales made to 
155.25  other states or political subdivisions of other states, if the 
155.26  sale would be exempt from taxation if it occurred in that state, 
155.27  but do not include sales under section 297A.01, subdivision 3, 
155.28  paragraphs (c) and (e). 
155.29     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
155.30  297A.25, subdivision 59, is amended to read: 
155.31     Subd. 59.  [FARM MACHINERY.] The gross receipts from the 
155.32  sale of used farm machinery and, after June 30, 2000, the gross 
155.33  receipts from the sale of new farm machinery, are exempt. 
155.34     Sec. 12.  Minnesota Statutes 1996, section 297A.25, 
155.35  subdivision 60, is amended to read: 
155.36     Subd. 60.  [CONSTRUCTION MATERIALS; STATE CONVENTION 
156.1   CENTER.] Construction materials and supplies are exempt from the 
156.2   tax imposed under this chapter, regardless of whether purchased 
156.3   by the owner or a contractor, subcontractor, or builder, if: 
156.4      (1) the materials and supplies are used or consumed in 
156.5   constructing improvements to a state convention center located 
156.6   in a city located outside of the metropolitan area as defined in 
156.7   section 473.121, subdivision 2, and the center is governed by an 
156.8   11-person board of which four are appointed by the governor; and 
156.9      (2) the improvements are financed in whole or in part by 
156.10  nonstate resources including, but not limited to, revenue or 
156.11  general obligations issued by the state convention center board 
156.12  of the city in which the center is located. 
156.13     The exemption provided by this subdivision applies to 
156.14  construction materials and supplies purchased prior to December 
156.15  31, 1998. 
156.16     Sec. 13.  Minnesota Statutes 1996, section 297A.25, is 
156.17  amended by adding a subdivision to read: 
156.18     Subd. 73.  [BIOSOLIDS PROCESSING EQUIPMENT.] The gross 
156.19  receipts from the sale of and the storage, use, or consumption 
156.20  of equipment designed to process, dewater, and recycle biosolids 
156.21  for wastewater treatment facilities of political subdivisions, 
156.22  and materials incidental to installation of that equipment, are 
156.23  exempt. 
156.24     Sec. 14.  Minnesota Statutes 1996, section 297A.25, is 
156.25  amended by adding a subdivision to read: 
156.26     Subd. 74.  [CONSTRUCTION MATERIALS; MINNEAPOLIS CONVENTION 
156.27  CENTER.] Purchases of materials, supplies, or equipment used or 
156.28  consumed in the construction, equipment, improvement, or 
156.29  expansion of the Minneapolis convention center are exempt from 
156.30  the tax imposed under this chapter and from any sales and use 
156.31  tax imposed by a local unit of government notwithstanding any 
156.32  ordinance or charter provision.  This exemption applies 
156.33  regardless of whether the materials, supplies, or equipment are 
156.34  purchased by the city or by a construction manager or contractor.
156.35     Sec. 15.  Minnesota Statutes 1996, section 297A.25, is 
156.36  amended by adding a subdivision to read: 
157.1      Subd. 75.  [CONSTRUCTION MATERIALS; RIVERCENTRE 
157.2   ARENA.] Purchases of materials, supplies, or equipment used or 
157.3   consumed in the construction, equipment, improvement, or 
157.4   expansion of the RiverCentre arena complex in the city of St. 
157.5   Paul are exempt from the tax imposed under this chapter and from 
157.6   any sales and use tax imposed by a local unit of government 
157.7   notwithstanding any ordinance or charter provision.  This 
157.8   exemption applies regardless of whether the materials, supplies, 
157.9   or equipment are purchased by the city or by a construction 
157.10  manager or contractor. 
157.11     Sec. 16.  Minnesota Statutes 1997 Supplement, section 
157.12  297A.25, is amended by adding a subdivision to read: 
157.13     Subd. 76.  [CONSTRUCTION MATERIALS FOR AN ENVIRONMENTAL 
157.14  LEARNING CENTER.] Construction materials and supplies are exempt 
157.15  from the tax imposed under this section, regardless of whether 
157.16  purchased by the owner or a contractor, subcontractor, or 
157.17  builder, if they are used or consumed in constructing or 
157.18  improving the Long Lake Conservation Center pursuant to the 
157.19  funding provided under Laws 1994, chapter 643, section 23, 
157.20  subdivision 28, as amended by Laws 1995, First Special Session 
157.21  chapter 2, article 1, section 48; and Laws 1996, chapter 463, 
157.22  section 7, subdivision 26.  The tax shall be calculated and paid 
157.23  as if the rate in section 297A.02, subdivision 1, was in effect 
157.24  and a refund applied for in the manner prescribed in section 
157.25  297A.15, subdivision 7. 
157.26     Sec. 17.  Minnesota Statutes 1996, section 297A.25, is 
157.27  amended by adding a subdivision to read: 
157.28     Subd. 77.  [SOYBEAN OILSEED PROCESSING AND REFINING 
157.29  FACILITY.] Purchases of construction materials and supplies are 
157.30  exempt from the sales and use taxes imposed under this chapter, 
157.31  regardless of whether purchased by the owner or a contractor, 
157.32  subcontractor, or builder, if: 
157.33     (1) the materials and supplies are used or consumed in 
157.34  constructing a facility for soybean oilseed processing and 
157.35  refining; 
157.36     (2) the total capital investment made in the facility is at 
158.1   least $60,000,000; and 
158.2      (3) the facility is constructed by a Minnesota-based 
158.3   cooperative, organized under chapter 308A. 
158.4      Sec. 18.  Minnesota Statutes 1996, section 297A.25, is 
158.5   amended by adding a subdivision to read: 
158.6      Subd. 78.  [EARLE BROWN HERITAGE CENTER CONSTRUCTION 
158.7   MATERIALS.] Purchases of materials and supplies used or consumed 
158.8   in and equipment incorporated into the construction, 
158.9   improvement, or expansion of the Earle Brown Heritage Center in 
158.10  Brooklyn Center are exempt from the tax imposed under this 
158.11  chapter, and from any sales and use tax imposed by a local unit 
158.12  of government notwithstanding any ordinance or charter 
158.13  provision.  This exemption applies regardless of whether the 
158.14  materials, supplies, or equipment are purchased by the city or a 
158.15  contractor, subcontractor, or builder. 
158.16     Sec. 19.  Minnesota Statutes 1997 Supplement, section 
158.17  297A.256, subdivision 1, is amended to read: 
158.18     Subdivision 1.  [FUNDRAISING SALES BY NONPROFIT GROUPS.] 
158.19  Notwithstanding the provisions of this chapter, the following 
158.20  sales made by a "nonprofit organization" are exempt from the 
158.21  sales and use tax. 
158.22     (a)(1) All sales made by an organization for fundraising 
158.23  purposes if that organization exists solely for the purpose of 
158.24  providing educational or social activities for young people 
158.25  primarily age 18 and under.  This exemption shall apply only if 
158.26  the gross annual sales receipts of the organization from 
158.27  fundraising do not exceed $10,000. 
158.28     (2) A club, association, or other organization of 
158.29  elementary or secondary school students organized for the 
158.30  purpose of carrying on sports, educational, or other 
158.31  extracurricular activities is a separate organization from the 
158.32  school district or school for purposes of applying the $10,000 
158.33  limit.  This paragraph does not apply if the sales are derived 
158.34  from admission charges or from activities for which the money 
158.35  must be deposited with the school district treasurer under 
158.36  section 123.38, subdivision 2, or be recorded in the same manner 
159.1   as other revenues or expenditures of the school district under 
159.2   section 123.38, subdivision 2b. 
159.3      (b) All sales made by an organization for fundraising 
159.4   purposes if that organization is a senior citizen group or 
159.5   association of groups that in general limits membership to 
159.6   persons age 55 or older and is organized and operated 
159.7   exclusively for pleasure, recreation and other nonprofit 
159.8   purposes and no part of the net earnings inure to the benefit of 
159.9   any private shareholders.  This exemption shall apply only if 
159.10  the gross annual sales receipts of the organization from 
159.11  fundraising do not exceed $10,000. 
159.12     (c) The gross receipts from the sales of tangible personal 
159.13  property at, admission charges for, and sales of food, meals, or 
159.14  drinks at fundraising events sponsored by a nonprofit 
159.15  organization when the entire proceeds, except for the necessary 
159.16  expenses therewith, will be used solely and exclusively for 
159.17  charitable, religious, or educational purposes.  This exemption 
159.18  does not apply to admission charges for events involving bingo 
159.19  or other gambling activities or to charges for use of amusement 
159.20  devices involving bingo or other gambling activities.  For 
159.21  purposes of this paragraph, a "nonprofit organization" means any 
159.22  unit of government, corporation, society, association, 
159.23  foundation, or institution organized and operated for 
159.24  charitable, religious, educational, civic, fraternal, senior 
159.25  citizens' or veterans' purposes, no part of the net earnings of 
159.26  which inures to the benefit of a private individual. 
159.27     If the profits are not used solely and exclusively for 
159.28  charitable, religious, or educational purposes, the entire gross 
159.29  receipts are subject to tax. 
159.30     Each nonprofit organization shall keep a separate 
159.31  accounting record, including receipts and disbursements from 
159.32  each fundraising event.  All deductions from gross receipts must 
159.33  be documented with receipts and other records.  If records are 
159.34  not maintained as required, the entire gross receipts are 
159.35  subject to tax. 
159.36     The exemption provided by this paragraph does not apply to 
160.1   any sale made by or in the name of a nonprofit corporation as 
160.2   the active or passive agent of a person that is not a nonprofit 
160.3   corporation. 
160.4      The exemption for fundraising events under this paragraph 
160.5   is limited to no more than 24 days a year.  Fundraising events 
160.6   conducted on premises leased for more than four five days but 
160.7   less than 30 days do not qualify for this exemption. 
160.8      (d) The gross receipts from the sale or use of tickets or 
160.9   admissions to a golf tournament held in Minnesota are exempt if 
160.10  the beneficiary of the tournament's net proceeds qualifies as a 
160.11  tax-exempt organization under section 501(c)(3) of the Internal 
160.12  Revenue Code, as amended through December 31, 1994, including a 
160.13  tournament conducted on premises leased or occupied for more 
160.14  than four days. 
160.15     Sec. 20.  Minnesota Statutes 1997 Supplement, section 
160.16  297A.48, is amended by adding a subdivision to read: 
160.17     Subd. 9a.  [LOCAL RESOLUTION BEFORE APPLICATION FOR 
160.18  AUTHORITY.] Before the governing body of a political subdivision 
160.19  requests legislative approval of a special law for a local sales 
160.20  tax that is administered under this section, it shall adopt a 
160.21  resolution indicating its approval of the tax.  The resolution 
160.22  must include, at a minimum, information on the proposed tax 
160.23  rate, how the revenues will be used, the total revenue that will 
160.24  be raised before the tax expires, and the estimated length of 
160.25  time that the tax will be in effect. 
160.26     Sec. 21.  Minnesota Statutes 1997 Supplement, section 
160.27  297B.03, is amended to read: 
160.28     297B.03 [EXEMPTIONS.] 
160.29     There is specifically exempted from the provisions of this 
160.30  chapter and from computation of the amount of tax imposed by it 
160.31  the following:  
160.32     (1) Purchase or use, including use under a lease purchase 
160.33  agreement or installment sales contract made pursuant to section 
160.34  465.71, of any motor vehicle by the United States and its 
160.35  agencies and instrumentalities and by any person described in 
160.36  and subject to the conditions provided in section 297A.25, 
161.1   subdivision 18.  
161.2      (2) Purchase or use of any motor vehicle by any person who 
161.3   was a resident of another state at the time of the purchase and 
161.4   who subsequently becomes a resident of Minnesota, provided the 
161.5   purchase occurred more than 60 days prior to the date such 
161.6   person began residing in the state of Minnesota.  
161.7      (3) Purchase or use of any motor vehicle by any person 
161.8   making a valid election to be taxed under the provisions of 
161.9   section 297A.211.  
161.10     (4) Purchase or use of any motor vehicle previously 
161.11  registered in the state of Minnesota when such transfer 
161.12  constitutes a transfer within the meaning of section 351 or 721 
161.13  of the Internal Revenue Code of 1986, as amended through 
161.14  December 31, 1988.  
161.15     (5) Purchase or use of any vehicle owned by a resident of 
161.16  another state and leased to a Minnesota based private or for 
161.17  hire carrier for regular use in the transportation of persons or 
161.18  property in interstate commerce provided the vehicle is titled 
161.19  in the state of the owner or secured party, and that state does 
161.20  not impose a sales tax or sales tax on motor vehicles used in 
161.21  interstate commerce.  
161.22     (6) Purchase or use of a motor vehicle by a private 
161.23  nonprofit or public educational institution for use as an 
161.24  instructional aid in automotive training programs operated by 
161.25  the institution.  "Automotive training programs" includes motor 
161.26  vehicle body and mechanical repair courses but does not include 
161.27  driver education programs.  
161.28     (7) Purchase of a motor vehicle for use as an ambulance by 
161.29  an ambulance service licensed under section 144E.10. 
161.30     (8) Purchase of a motor vehicle by or for a public library, 
161.31  as defined in section 134.001, subdivision 2, as a bookmobile or 
161.32  library delivery vehicle. 
161.33     (9) Purchase of a ready-mixed concrete truck. 
161.34     (10) Purchase or use of a motor vehicle by a town for use 
161.35  exclusively for road maintenance, including snowplows and dump 
161.36  trucks, but not including automobiles, vans, or pickup trucks. 
162.1      Sec. 22.  Minnesota Statutes 1997 Supplement, section 
162.2   297G.01, is amended by adding a subdivision to read: 
162.3      Subd. 3a.  [CIDER.] "Cider" means a product that contains 
162.4   not less than one-half of one percent nor more than seven 
162.5   percent alcohol by volume and is made from the alcoholic 
162.6   fermentation of the juice of apples.  Cider includes, but is not 
162.7   limited to, flavored, sparkling, and carbonated cider. 
162.8      Sec. 23.  Minnesota Statutes 1997 Supplement, section 
162.9   297G.03, subdivision 1, is amended to read: 
162.10     Subdivision 1.  [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 
162.11  The following excise tax is imposed on all distilled spirits and 
162.12  wine manufactured, imported, sold, or possessed in this state: 
162.13                                  Standard             Metric
162.14  (a) Distilled spirits,      $5.03 per gallon   $1.33 per liter
162.15  liqueurs, cordials, 
162.16  and specialties regardless 
162.17  of alcohol content 
162.18  (excluding ethyl alcohol) 
162.19  (b) Wine containing         $ .30 per gallon   $ .08 per liter 
162.20  14 percent or less
162.21  alcohol by volume 
162.22  (except cider as defined 
162.23  in section 297G.01, 
162.24  subdivision 3a) 
162.25  (c) Wine containing         $ .95 per gallon   $ .25 per liter
162.26  more than 14 percent 
162.27  but not more than 21
162.28  percent alcohol by volume 
162.29  (d) Wine containing more    $1.82 per gallon   $ .48 per liter
162.30  than 21 percent but not 
162.31  more than 24 percent
162.32  alcohol by volume 
162.33  (e) Wine containing more    $3.52 per gallon   $ .93 per liter
162.34  than 24 percent alcohol
162.35  by volume
162.36  (f) Natural and             $1.82 per gallon   $ .48 per liter
163.1   artificial sparkling wines
163.2   containing alcohol 
163.3   (g) Cider as defined in     $ .15 per gallon   $ .04 per liter
163.4   section 297G.01,
163.5   subdivision 3a
163.6      In computing the tax on a package of distilled spirits or 
163.7   wine, a proportional tax at a like rate on all fractional parts 
163.8   of a gallon or liter must be paid, except that the tax on a 
163.9   fractional part of a gallon less than 1/16 of a gallon is the 
163.10  same as for 1/16 of a gallon. 
163.11     Sec. 24.  Minnesota Statutes 1996, section 475.58, 
163.12  subdivision 3, is amended to read: 
163.13     Subd. 3.  [YOUTH ICE FACILITIES.] (a) A municipality may, 
163.14  without regard to the election requirement under subdivision 1 
163.15  or under any other provision of law or a home rule charter, 
163.16  issue and sell obligations to finance acquisition, improvement, 
163.17  or construction of an indoor ice arena intended to be used 
163.18  predominantly for youth athletic activities if all the following 
163.19  conditions are met: 
163.20     (1) the obligations are secured by a pledge of revenues 
163.21  from the facility; 
163.22     (2) the facility and its financing are approved by 
163.23  resolutions of at least two of the following governing bodies of 
163.24  (i) the city in which the facility is located, (ii) the school 
163.25  district in which the facility is located, or (iii) the county 
163.26  in which the facility is located; 
163.27     (3) the governing body of the municipality finds, based on 
163.28  analysis provided by a professional experienced in finance, that 
163.29  the facility's revenues and other available money will be 
163.30  sufficient to pay the obligations, without reliance on a 
163.31  property tax levy or the municipality's general purpose state 
163.32  aid; and 
163.33     (4) no petition for an election has been timely filed under 
163.34  paragraph (b). 
163.35     (b) At least 30 days before issuing obligations under this 
163.36  subdivision, the municipality must hold a public hearing on the 
164.1   issue.  The municipality must publish or provide notice of the 
164.2   hearing in the same manner provided for its regular meetings.  
164.3   The obligations are not exempt from the election requirement 
164.4   under this subdivision, if: 
164.5      (1) registered voters equal to ten percent of the votes 
164.6   cast in the last general election in the municipality sign a 
164.7   petition requesting a vote on the issue; and 
164.8      (2) the petition is filed with the municipality within 20 
164.9   days after the public hearing. 
164.10     (c) This subdivision expires December 31, 1997 1998. 
164.11     Sec. 25.  Laws 1980, chapter 511, section 1, subdivision 2, 
164.12  as amended by Laws 1991, chapter 291, article 8, section 22, is 
164.13  amended to read:  
164.14     Subd. 2.  Notwithstanding Minnesota Statutes, Section 
164.15  477A.01, Subdivision 18 477A.016, or any other law, ordinance, 
164.16  or city charter provision to the contrary, the city of Duluth 
164.17  may, by ordinance, impose an additional sales tax of up to 
164.18  one and one-half percent on sales transactions which are 
164.19  described in Minnesota Statutes, Section 297A.01, Subdivision 3, 
164.20  Clause (c).  When the city council determines that the taxes 
164.21  imposed under this subdivision and under section 26 at a rate of 
164.22  one-half of one percent have produced revenue sufficient to pay 
164.23  the debt service on bonds in a principal amount of $8,000,000 
164.24  since the imposition of the taxes at the rate of one and 
164.25  one-half percent, the rate of the tax under this subdivision is 
164.26  reduced to one percent.  The imposition of this tax shall not be 
164.27  subject to voter referendum under either state law or city 
164.28  charter provisions. 
164.29     Sec. 26.  Laws 1980, chapter 511, section 2, is amended to 
164.30  read: 
164.31     Sec. 2.  [CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND 
164.32  MOTELS.] 
164.33     Notwithstanding Minnesota Statutes, Section 477A.01, 
164.34  Subdivision 18 477A.016, or any other law, or ordinance, or city 
164.35  charter provision to the contrary, the city of Duluth may, by 
164.36  ordinance, impose an additional tax of one and one-half percent 
165.1   upon the gross receipts from the sale of lodging for periods of 
165.2   less than 30 days in hotels and motels located in the 
165.3   city.  When the city council determines that the taxes imposed 
165.4   under this section and section 25 at a rate of one-half of one 
165.5   percent have produced revenue sufficient to pay the debt service 
165.6   on bonds in a principal amount of $8,000,000 since the 
165.7   imposition of the taxes at the rate of one and one-half percent, 
165.8   the rate of the tax under this section is reduced to one 
165.9   percent.  The tax shall be collected in the same manner as the 
165.10  tax set forth in the Duluth city charter, section 54(d), 
165.11  paragraph one.  The imposition of this tax shall not be subject 
165.12  to voter referendum under either state law or city charter 
165.13  provisions. 
165.14     Sec. 27.  Laws 1980, chapter 511, section 3, is amended to 
165.15  read: 
165.16     Sec. 3.  [ALLOCATION OF REVENUES.] 
165.17     Revenues received from the taxes authorized by section 1, 
165.18  subdivision 2, and section 2 shall be used to pay for activities 
165.19  conducted by the city or by other organizations which promote 
165.20  tourism in the city of Duluth, including capital improvements of 
165.21  tourism facilities, and to subsidize the Duluth Arena-Auditorium 
165.22  and the Spirit Mountain recreation authority.  Distribution of 
165.23  the revenues derived from these taxes shall be approved by the 
165.24  Duluth city council at least once annually, may include pledging 
165.25  such revenues to pay principal of and interest on city of Duluth 
165.26  bonds issued to finance such tourism facilities, and shall be 
165.27  made in accordance with the policy set forth in this section. 
165.28     Sec. 28.  Laws 1991, chapter 291, article 8, section 27, 
165.29  subdivision 3, is amended to read: 
165.30     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
165.31  authorized by subdivisions 1 and 2 shall be used by the city to 
165.32  pay the cost of collecting the tax and to pay all or a portion 
165.33  of the expenses of constructing and operating facilities as part 
165.34  of an urban revitalization project in downtown Mankato known as 
165.35  Riverfront 2000.  Authorized expenses include, but are not 
165.36  limited to, acquiring property and paying relocation expenses 
166.1   related to the development of Riverfront 2000 and related 
166.2   facilities, and securing or paying debt service on bonds or 
166.3   other obligations issued to finance the construction of 
166.4   Riverfront 2000 and related facilities.  For purposes of this 
166.5   section, "Riverfront 2000 and related facilities" means a 
166.6   civic-convention center, an arena, a riverfront park, a 
166.7   technology center and related educational facilities, and all 
166.8   publicly owned real or personal property that the governing body 
166.9   of the city determines will be necessary to facilitate the use 
166.10  of these facilities, including but not limited to parking, 
166.11  skyways, pedestrian bridges, lighting, and landscaping. 
166.12     Sec. 29.  Laws 1992, chapter 511, article 8, section 33, 
166.13  subdivision 5, is amended to read: 
166.14     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed 
166.15  pursuant to subdivisions 1 and 2 shall terminate at the later of 
166.16  (1) December 31, 1998, or (2) on the first day of the second 
166.17  month next succeeding a determination by the city council that 
166.18  sufficient funds have been received from the taxes to finance 
166.19  capital and administrative costs of $28,760,000 for improvements 
166.20  for fire station, city hall, and public library facilities and 
166.21  to prepay or retire at maturity the principal, interest, and 
166.22  premium due on any bonds issued for the improvements.  Any funds 
166.23  remaining after completion of the improvements and retirement or 
166.24  redemption of the bonds may be placed in the general fund of the 
166.25  city. 
166.26     Sec. 30.  Laws 1993, chapter 375, article 9, section 46, 
166.27  subdivision 2, is amended to read: 
166.28     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
166.29  authorized by subdivision 1 may only be used by the city to pay 
166.30  the cost of collecting the tax, and to pay for the following 
166.31  projects or to secure or pay any principal, premium, or interest 
166.32  on bonds issued in accordance with subdivision 3 for the 
166.33  following projects.  
166.34     (a) To pay all or a portion of the capital expenses of 
166.35  construction, equipment and acquisition costs for the expansion 
166.36  and remodeling of the St. Paul Civic Center complex, including 
167.1   the demolition of the existing arena and the construction and 
167.2   equipping of a new arena. 
167.3      (b) The remainder of the funds must be spent for capital 
167.4   projects to further residential, cultural, commercial, and 
167.5   economic development in both downtown St. Paul and St. Paul 
167.6   neighborhoods.  The amount apportioned under this paragraph 
167.7   shall be no less than 60 percent of the revenues derived from 
167.8   the tax each year, except to the extent that a portion of that 
167.9   amount is required to pay debt service on (1) bonds issued for 
167.10  the purposes of paragraph (a) prior to March 1, 1998; or (2) 
167.11  bonds issued for the purposes of paragraph (a) after March 1, 
167.12  1998, but only if the city council determines that 40 percent of 
167.13  the revenues derived from the tax together with other revenues 
167.14  pledged to the payment of the bonds, including the proceeds of 
167.15  definitive bonds, is expected to exceed the annual debt service 
167.16  on the bonds. 
167.17     (c) If in any year more than 40 percent of the revenue 
167.18  derived from the tax authorized by subdivision 1 is used to pay 
167.19  debt service on the bonds issued for the purposes of paragraph 
167.20  (a) and to fund a reserve for the bonds, the amount of the debt 
167.21  service payment that exceeds 40 percent of the revenue must be 
167.22  determined for that year.  In any year when 40 percent of the 
167.23  revenue produced by the sales tax exceeds the amount required to 
167.24  pay debt service on the bonds and to fund a reserve for the 
167.25  bonds under paragraph (a), the amount of the excess must be made 
167.26  available for capital projects to further residential, cultural, 
167.27  commercial, and economic development in the neighborhoods and 
167.28  downtown until the cumulative amounts determined for all years 
167.29  under the preceding sentence have been made available under this 
167.30  sentence.  The amount made available as reimbursement in the 
167.31  preceding sentence is not included in the 60 percent determined 
167.32  under paragraph (b). 
167.33     (d) By January 15 of each odd-numbered year, the mayor and 
167.34  the city council must report to the legislature on the use of 
167.35  sales tax revenues during the preceding two-year period. 
167.36     Sec. 31.  Laws 1993, chapter 375, article 9, section 46, 
168.1   subdivision 3, is amended to read: 
168.2      Subd. 3.  [BONDS.] The city may issue general obligation 
168.3   bonds of the city or special revenue bonds to finance all or a 
168.4   portion of the cost for projects authorized in subdivision 2, 
168.5   paragraph (a).  The debt represented by the bonds shall not be 
168.6   included in computing any debt limitations applicable to the 
168.7   city.  The bonds may be paid from or secured by any funds 
168.8   available to the city, including the tax authorized under 
168.9   subdivision 1, any revenues derived from the project, tax 
168.10  increments from the tax increment district that includes the 
168.11  project, and revenue from any lodging tax imposed under Laws 
168.12  1982, chapter 523, article 25, section 1.  The bonds may be 
168.13  issued in one or more series and sold without election on the 
168.14  question of issuance of the bonds or a property tax to pay 
168.15  them.  Except as otherwise provided in this section, the bonds 
168.16  must be issued, sold, and secured in the manner provided in 
168.17  Minnesota Statutes, chapter 475.  The aggregate principal amount 
168.18  of bonds issued under this subdivision may not exceed $65 
168.19  million, provided that the city may issue additional bonds under 
168.20  this subdivision as long as the total principal amount of the 
168.21  additional bonds together with the outstanding principal amount 
168.22  of the bonds previously issued under this subdivision does not 
168.23  exceed $130 million.  The bonds authorized by this subdivision 
168.24  shall not be included in local general obligation debt as 
168.25  defined in Laws 1971, chapter 773, as amended, including Laws 
168.26  1992, chapter 511, and shall not affect the amount of capital 
168.27  improvement bonds authorized to be issued by the city of St. 
168.28  Paul.  
168.29     Sec. 32.  Laws 1993, chapter 375, article 9, section 46, 
168.30  subdivision 5, is amended to read: 
168.31     Subd. 5.  [EXPIRATION OF TAXING AUTHORITY.] The authority 
168.32  granted by subdivision 1 to the city to impose a sales tax shall 
168.33  expire when the principal and interest on any bonds or other 
168.34  obligations issued to finance projects authorized in subdivision 
168.35  2, paragraph (a) have been paid on December 31, 2030, or at an 
168.36  earlier time as the city shall, by ordinance, determine.  Any 
169.1   funds remaining after completion of projects approved under 
169.2   subdivision 2, paragraph (a) and retirement or redemption of any 
169.3   bonds or other obligations may be placed in the general fund of 
169.4   the city. 
169.5      Sec. 33.  Laws 1995, chapter 264, article 2, section 44, as 
169.6   amended by Laws 1996, chapter 471, article 2, section 27, is 
169.7   amended to read: 
169.8      Sec. 44.  [EFFECTIVE DATE.] 
169.9      Section 1 is effective the day following final enactment. 
169.10     Sections 3 and 4 are effective June 1, 1995.  Section 4 is 
169.11  repealed June 1, 2000. 
169.12     Sections 5 to 21 and 43, paragraph (a), are effective July 
169.13  1, 1995. 
169.14     Sections 23, 28, 33, 40, 42, and the part of section 22 
169.15  amending language in paragraph (i), clause (vii), are effective 
169.16  the day following final enactment. 
169.17     Sections 24 and 34 are effective for sales made after 
169.18  December 31, 1996. 
169.19     Section 25 is effective beginning with leases or rentals 
169.20  made after June 30, 1995. 
169.21     Section 26 is effective retroactively for sales after May 
169.22  31, 1992. 
169.23     Section 27 is effective for sales made after June 30, 1995. 
169.24     Section 29 and the part of section 22 striking the language 
169.25  after paragraph (h) are effective for sales after June 30, 1995. 
169.26     Section 32 is effective for sales made after June 30, 1995, 
169.27  and before July 1, 1998 1999. 
169.28     Sections 35 and 36 are effective for sales or transfers 
169.29  made after June 30, 1995. 
169.30     Section 38 is effective the day after the governing body of 
169.31  the city of Winona complies with Minnesota Statutes, section 
169.32  645.021, subdivision 3. 
169.33     Section 39 is effective upon compliance by the Minneapolis 
169.34  city council with Minnesota Statutes, section 645.021, 
169.35  subdivision 3. 
169.36     Section 43, paragraph (b), is effective for sales of 900 
170.1   information services made after June 30, 1995. 
170.2      Sec. 34.  Laws 1997, chapter 231, article 7, section 47, is 
170.3   amended to read: 
170.4      Sec. 47.  [EFFECTIVE DATES.] 
170.5      Section 1 is effective for refund claims filed after June 
170.6   30, 1997. 
170.7      Sections 2, 6, 7, 9, 13, 15, 16, 17, 18, 20, 21, 25, 31, 
170.8   and 32 are effective for purchases, sales, storage, use, or 
170.9   consumption occurring after June 30, 1997. 
170.10     Section 3 is effective on July 1, 1997, or upon adoption of 
170.11  the corresponding rules, whichever occurs earlier. 
170.12     Section 4, paragraph (i), clause (iv), is effective for 
170.13  purchases and sales occurring after September 30, 1987; the 
170.14  remainder of section 4 is effective for purchases and sales 
170.15  occurring after June 30, 1997. 
170.16     Section 5, paragraph (h), is effective for purchases and 
170.17  sales occurring after June 30, 1997, and paragraph (i) is 
170.18  effective for purchases and sales occurring after December 31, 
170.19  1992. 
170.20     Sections 8 and 46 are effective July 1, 1998. 
170.21     Sections 10 and 22 are effective for purchases, sales, 
170.22  storage, use, or consumption occurring after August 31, 1996. 
170.23     Sections 11, 12, 33, 34, and 35 are effective July 1, 1997. 
170.24     Sections 14 and 19 are effective for purchases and sales 
170.25  after June 30, 1999. 
170.26     Section 20 is effective for sales and purchases occurring 
170.27  after December 31, 1995. 
170.28     Section 23 is effective January 1, 1997. 
170.29     Section 24 is effective for purchases, sales, storage, use, 
170.30  or consumption occurring after April 30, 1997. 
170.31     Sections 26 and 45 are effective for purchases, sales, 
170.32  storage, use, or consumption occurring after July 31, 1997, and 
170.33  before August 1, 2003. 
170.34     Section 27 is effective for purchases, sales, storage, use, 
170.35  or consumption occurring after May 31, 1997. 
170.36     Section 28 is effective for sales made after December 31, 
171.1   1989, and before January 1, 1997.  The provisions of Minnesota 
171.2   Statutes, section 289A.50, apply to refunds claimed under 
171.3   section 28.  Refunds claimed under section 28 must be filed by 
171.4   the later of December 31, 1997, or the time limit under 
171.5   Minnesota Statutes, section 289A.40, subdivision 1. 
171.6      Section 29 is effective for sales or first use after May 
171.7   31, 1997, and before June 1, 1998. 
171.8      Sections 30, 42, and 43 are effective the day following 
171.9   final enactment. 
171.10     Sections 36 to 39 are effective the day after compliance by 
171.11  the governing body of Cook county with Minnesota Statutes, 
171.12  section 645.021, subdivision 3. 
171.13     Sec. 35.  [TRANSFER OF TRAVEL TRAILERS EXEMPTED.] 
171.14     Notwithstanding the provisions of Minnesota Statutes, 
171.15  chapter 297B, any transfer of title of a travel trailer from the 
171.16  Federal Emergency Management Agency to the state of Minnesota 
171.17  and any subsequent transfer of title of the trailer to a 
171.18  political subdivision of the state shall be exempt from the tax 
171.19  imposed under Minnesota Statutes, chapter 297B. 
171.20     Sec. 36.  [CITY OF ST. PAUL; USE OF SALES TAX REVENUES.] 
171.21     The revenue derived from the sales tax imposed by the city 
171.22  of St. Paul under Laws 1993, chapter 375, article 9, section 46, 
171.23  as amended by Laws 1997, chapter 231, article 7, section 40, 
171.24  that is distributed to the city's cultural STAR program must be 
171.25  awarded through a grant or loan review process as provided in 
171.26  this section.  Eighty percent of the revenue must be annually 
171.27  awarded to nonprofit arts organizations, libraries, and museums 
171.28  that are located in the designated cultural district of downtown 
171.29  St. Paul, and the remaining 20 percent may be awarded to 
171.30  businesses in the cultural district for projects which enhance 
171.31  visitor enjoyment of the district, or to nonprofit arts 
171.32  organizations, libraries, and museums located in St. Paul but 
171.33  outside of the cultural district.  Grants or loans may be used 
171.34  for capital improvements.  The restrictions in this section 
171.35  apply to all STAR cultural funds expended for projects approved 
171.36  after June 30, 1998. 
172.1      Sec. 37.  [ST. PAUL NEIGHBORHOOD INVESTMENT SALES TAX 
172.2   EXPENDITURES; CITIZEN REVIEW PROCESS.] 
172.3      Subdivision 1.  [REQUIREMENT.] Expenditures of revenues 
172.4   from the sales tax imposed by the city of St. Paul that are 
172.5   dedicated to neighborhood investments may be made only after 
172.6   review of the proposals for expenditures by the citizen review 
172.7   panel described in this section.  The panel must evaluate the 
172.8   proposals and provide a report to the city council that makes 
172.9   recommendations regarding the proposed expenditures in rank 
172.10  order. 
172.11     Subd. 2.  [APPOINTMENT OF MEMBERS.] The citizen review 
172.12  panel must consist of 17 members, each of whom represents one of 
172.13  the district councils.  The mayor must appoint the members, and 
172.14  the appointments are subject to confirmation by a majority vote 
172.15  of the city council.  Members serve for a term of four years.  
172.16  Elected officials and employees of the city are ineligible to 
172.17  serve as members of the panel. 
172.18     Sec. 38.  [CITY OF BEMIDJI.] 
172.19     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
172.20  Notwithstanding Minnesota Statutes, section 477A.016, or any 
172.21  other provision of law, ordinance, or city charter, if approved 
172.22  by the city voters at a general election held within one year of 
172.23  the date of final enactment of this act, the city of Bemidji may 
172.24  impose by ordinance a sales and use tax of up to one-half of one 
172.25  percent for the purposes specified in subdivision 3.  The 
172.26  provisions of Minnesota Statutes, section 297A.48, govern the 
172.27  imposition, administration, collection, and enforcement of the 
172.28  tax authorized under this subdivision. 
172.29     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
172.30  Minnesota Statutes, section 477A.016, or any other provision of 
172.31  law, ordinance, or city charter, if a sales and use tax is 
172.32  imposed under subdivision 1, the city of Bemidji may impose by 
172.33  ordinance, for the purpose specified in subdivision 3, an excise 
172.34  tax of up to $20 per motor vehicle, as defined by ordinance, 
172.35  purchased or acquired from any person engaged within the city in 
172.36  the business of selling motor vehicles at retail. 
173.1      Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
173.2   authorized by subdivisions 1 and 2 must be used by the city to 
173.3   pay the cost of collecting the taxes and to pay all or part of 
173.4   the capital and administrative cost of acquiring and 
173.5   constructing facilities as part of a regional convention center 
173.6   in Bemidji.  Authorized expenses include, but are not limited 
173.7   to, acquiring property and paying construction expenses related 
173.8   to the development of a convention center which is an arena for 
173.9   sporting events, concerts, trade shows, conventions, meeting 
173.10  rooms, and other compatible uses including, but not limited to, 
173.11  parking, lighting, and landscaping. 
173.12     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
173.13  under Minnesota Statutes, chapter 475, to finance the capital 
173.14  expenditure and improvement projects.  An election to approve 
173.15  the bonds under Minnesota Statutes, section 475.58, may be held 
173.16  in combination with the election to authorize imposition of the 
173.17  tax under subdivision 1.  Whether to permit imposition of the 
173.18  tax and issuance of bonds may be posed to the voters as a single 
173.19  question.  The question must state that the sales tax revenues 
173.20  are pledged to pay the bonds, but that the bonds are general 
173.21  obligations and will be guaranteed by the city's property taxes. 
173.22     (b) The issuance of bonds under this subdivision is not 
173.23  subject to Minnesota Statutes, section 275.60. 
173.24     (c) The bonds are not included in computing any debt 
173.25  limitation applicable to the city, and the levy of taxes under 
173.26  Minnesota Statutes, section 475.61, to pay principal of and 
173.27  interest on the bonds is not subject to any levy limitation. 
173.28  The aggregate principal amount of bonds, plus the aggregate of 
173.29  the taxes used directly to pay eligible capital expenditures and 
173.30  improvements, may not exceed $25,000,000, plus an amount equal 
173.31  to the costs related to issuance of the bonds. 
173.32     (d) The taxes may be pledged to and used for the payment of 
173.33  the bonds and any bonds issued to refund them only if the bonds 
173.34  and any refunding bonds are general obligations of the city. 
173.35     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
173.36  subdivisions 1 and 2 expire when the city council determines 
174.1   that sufficient funds have been received from taxes to finance 
174.2   the capital and administrative costs for acquisition and 
174.3   construction of a convention center and related facilities to 
174.4   repay or retire at maturity the principal, interest, and premium 
174.5   due on any bonds issued for the project under subdivision 4.  
174.6   Any funds remaining after completion of the project and 
174.7   retirement or redemption of the bonds may be placed in the 
174.8   general fund of the city.  The taxes imposed under subdivisions 
174.9   1 and 2 may expire at an earlier time if the city so determines 
174.10  by ordinance. 
174.11     Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
174.12  day after compliance by the governing body of the city of 
174.13  Bemidji with Minnesota Statutes, section 645.021, subdivision 3. 
174.14     Sec. 39.  [CITY OF DETROIT LAKES.] 
174.15     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
174.16  Notwithstanding Minnesota Statutes, section 477A.016, or any 
174.17  other contrary provision of law, ordinance, or city charter, if 
174.18  approved by the city voters at a general election held within 
174.19  one year of the date of final enactment of this act, the city of 
174.20  Detroit Lakes may, by ordinance, impose an additional sales and 
174.21  use tax of up to one-half of one percent for the purposes 
174.22  specified in subdivision 3.  The provisions of Minnesota 
174.23  Statutes, section 297A.48, govern the imposition, 
174.24  administration, collection, and enforcement of the tax 
174.25  authorized under this subdivision. 
174.26     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
174.27  Minnesota Statutes, section 477A.016, or any other contrary 
174.28  provision of law, ordinance, or city charter, the city of 
174.29  Detroit Lakes may impose, by ordinance, for the purposes 
174.30  specified in subdivision 3, an excise tax of up to $20 per motor 
174.31  vehicle, as defined by ordinance, purchased or acquired from any 
174.32  person engaged within the city in the business of selling motor 
174.33  vehicles at retail. 
174.34     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
174.35  authorized by subdivisions 1 and 2 must be used by the city to 
174.36  pay the costs of collecting the taxes and to pay all or part of 
175.1   the capital and administrative costs, up to $6,000,000, for 
175.2   constructing a community center.  Authorized expenses include, 
175.3   but are not limited to, acquiring property and paying 
175.4   construction and operating expenses related to the development 
175.5   of the community center and paying debt service on bonds or 
175.6   other obligations issued to finance the construction of the 
175.7   community center. 
175.8      Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
175.9   under Minnesota Statutes, chapter 475, to finance the capital 
175.10  expenditure and improvement projects.  An election to approve 
175.11  the bonds under Minnesota Statutes, section 475.58, may be held 
175.12  in combination with the election to authorize imposition of the 
175.13  tax under subdivision 1.  Whether to permit imposition of the 
175.14  tax and issuance of bonds may be posed to the voters as a single 
175.15  question.  The question must state that the sales tax revenues 
175.16  are pledged to pay the bonds, but that the bonds are general 
175.17  obligations and will be guaranteed by the city's property taxes. 
175.18     (b) The issuance of bonds under this subdivision is not 
175.19  subject to Minnesota Statutes, section 275.60. 
175.20     (c) The bonds are not included in computing any debt 
175.21  limitation applicable to the city, and the levy of taxes under 
175.22  Minnesota Statutes, section 475.61, to pay principal of and 
175.23  interest on the bonds is not subject to any levy limitation. 
175.24  The aggregate principal amount of bonds, plus the aggregate of 
175.25  the taxes used directly to pay eligible capital expenditures and 
175.26  improvements may not exceed $6,000,000, plus an amount equal to 
175.27  the costs related to issuance of the bonds. 
175.28     (d) The taxes may be pledged to and used for the payment of 
175.29  the bonds and any bonds issued to refund them, only if the bonds 
175.30  and any refunding bonds are general obligations of the city. 
175.31     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
175.32  subdivisions 1 and 2 expire when the city council determines 
175.33  that sufficient funds have been received from the taxes to 
175.34  finance the capital and administrative costs for constructing 
175.35  the community center and to prepay or retire at maturity the 
175.36  principal, interest, and premium due on any bonds issued for the 
176.1   construction.  Any funds remaining after completion of the 
176.2   project or retirement or redemption of the bonds may be placed 
176.3   in the general fund of the city.  
176.4      Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
176.5   day after compliance by the governing body of the city of 
176.6   Detroit Lakes with Minnesota Statutes, section 645.021, 
176.7   subdivision 3. 
176.8      Sec. 40.  [CITY OF FERGUS FALLS.] 
176.9      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
176.10  Notwithstanding Minnesota Statutes, section 477A.016, or any 
176.11  other provision of law, ordinance, or city charter, if approved 
176.12  by the city voters at a general election held within one year of 
176.13  the date of final enactment of this act, the city of Fergus 
176.14  Falls may impose by ordinance a sales and use tax of up to 
176.15  one-half of one percent for the purposes specified in 
176.16  subdivision 3.  The provisions of Minnesota Statutes, section 
176.17  297A.48, govern the imposition, administration, collection, and 
176.18  enforcement of the tax authorized under this subdivision, except 
176.19  that the sales and use taxes shall not apply to farm machinery. 
176.20     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
176.21  Minnesota Statutes, section 477A.016, or any other provision of 
176.22  law, ordinance, or city charter, if a sales and use tax is 
176.23  imposed under subdivision 1, the city of Fergus Falls may impose 
176.24  by ordinance, for the purposes specified in subdivision 3, an 
176.25  excise tax of up to $20 per motor vehicle, as defined by 
176.26  ordinance, purchased or acquired from any person engaged within 
176.27  the city in the business of selling motor vehicles at retail. 
176.28     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
176.29  authorized by subdivisions 1 and 2 must be used by the city to 
176.30  pay the costs of collecting the taxes and to pay all or part of 
176.31  the capital and administrative costs of constructing facilities 
176.32  as part of a regional conference center, community center, 
176.33  recreational and tourism project in Fergus Falls known as 
176.34  Project Reach Out.  Authorized expenses include, but are not 
176.35  limited to, acquiring property and paying construction and 
176.36  operating expenses related to the development of Project Reach 
177.1   Out and related facilities, and paying debt service on bonds or 
177.2   other obligations issued to finance the construction of Project 
177.3   Reach Out and related facilities. 
177.4      For purposes of this section, "Project Reach Out and 
177.5   related facilities" means a regional conference center, 
177.6   community center, regional park and recreational facilities, and 
177.7   all publicly owned real or personal property that the governing 
177.8   body of the city determines are necessary to facilitate the use 
177.9   of these facilities, including but not limited to, parking, 
177.10  pedestrian bridges, lighting, and landscaping. 
177.11     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
177.12  under Minnesota Statutes, chapter 475, to finance the capital 
177.13  expenditure and improvement projects.  An election to approve 
177.14  the bonds under Minnesota Statutes, section 475.58, may be held 
177.15  in combination with the election to authorize imposition of the 
177.16  tax under subdivision 1.  Whether to permit imposition of the 
177.17  tax and issuance of bonds may be posed to the voters as a single 
177.18  question.  The question must state that the sales tax revenues 
177.19  are pledged to pay the bonds, but that the bonds are general 
177.20  obligations and will be guaranteed by the city's property taxes. 
177.21     (b) The issuance of bonds under this subdivision is not 
177.22  subject to Minnesota Statutes, section 275.60. 
177.23     (c) The bonds are not included in computing any debt 
177.24  limitation applicable to the city, and the levy of taxes under 
177.25  Minnesota Statutes, section 475.61, to pay principal of and 
177.26  interest on the bonds is not subject to any levy limitation. 
177.27  The aggregate principal amount of bonds, plus the aggregate of 
177.28  the taxes used directly to pay eligible capital expenditures and 
177.29  improvements may not exceed $9,000,000, plus an amount equal to 
177.30  the costs related to issuance of the bonds. 
177.31     (d) The taxes may be pledged to and used for the payment of 
177.32  the bonds and any bonds issued to refund them, only if the bonds 
177.33  and any refunding bonds are general obligations of the city. 
177.34     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
177.35  subdivisions 1 and 2 expire when the city determines that 
177.36  sufficient funds have been received from the taxes to finance 
178.1   the capital and administrative costs for acquisition, 
178.2   construction, improvement, and operation of Project Reach Out 
178.3   and related facilities and to prepay or retire at maturity the 
178.4   principal, interest, and premium due on any bonds issued for the 
178.5   project under subdivision 4.  Any funds remaining after 
178.6   completion of the project and retirement or redemption of the 
178.7   bonds may be placed in the general fund of the city.  The taxes 
178.8   imposed under subdivisions 1 and 2 may expire at an earlier time 
178.9   if the city so determines by ordinance. 
178.10     Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
178.11  day after compliance by the governing body of the city of Fergus 
178.12  Falls with Minnesota Statutes, section 645.021, subdivision 3. 
178.13     Sec. 41.  [CITY OF HUTCHINSON; TAXES AUTHORIZED.] 
178.14     Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
178.15  Minnesota Statutes, section 477A.016, or any other provision of 
178.16  law, ordinance, or city charter, if approved by the city voters 
178.17  at a general election or special election held within one year 
178.18  of final enactment of this act, the city of Hutchinson may 
178.19  impose by ordinance a sales and use tax of up to one-half of one 
178.20  percent for the purposes specified in subdivision 3.  The 
178.21  provisions of Minnesota Statutes, section 297A.48, govern the 
178.22  imposition, administration, collection, and enforcement of the 
178.23  tax authorized under this subdivision. 
178.24     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
178.25  Minnesota Statutes, section 477A.016, or any other provision of 
178.26  law, ordinance, or city charter, the city of Hutchinson may 
178.27  impose by ordinance, for the purposes specified in subdivision 
178.28  3, an excise tax of up to $20 per motor vehicle, as defined by 
178.29  ordinance, purchased or acquired from any person engaged within 
178.30  the city in the business of selling motor vehicles at retail. 
178.31     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
178.32  authorized by subdivisions 1 and 2 must be used by the city to 
178.33  pay the cost of collecting the taxes and to pay for construction 
178.34  and improvement of a civic and community center and recreational 
178.35  facilities to serve seniors and youth.  Authorized expenses 
178.36  include, but are not limited to, acquiring property, paying 
179.1   construction and operating expenses related to the development 
179.2   of an authorized facility, and paying debt service on bonds or 
179.3   other obligations issued to finance the construction or 
179.4   expansion of an authorized facility.  The capital expenses for 
179.5   all projects authorized under this paragraph that may be paid 
179.6   with these taxes is limited to $5,000,000, plus an amount equal 
179.7   to the costs related to issuance of the bonds. 
179.8      Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
179.9   under Minnesota Statutes, chapter 475, to finance the capital 
179.10  expenditure and improvement projects.  An election to approve 
179.11  the bonds under Minnesota Statutes, section 475.58, may be held 
179.12  in combination with the election to authorize imposition of the 
179.13  tax under subdivision 1.  Whether to permit imposition of the 
179.14  tax and issuance of bonds may be posed to the voters as a single 
179.15  question.  The question must state that the sales tax revenues 
179.16  are pledged to pay the bonds, but that the bonds are general 
179.17  obligations and will be guaranteed by the city's property taxes. 
179.18     (b) The issuance of bonds under this subdivision is not 
179.19  subject to Minnesota Statutes, section 275.60. 
179.20     (c) The bonds are not included in computing any debt 
179.21  limitation applicable to the city, and the levy of taxes under 
179.22  Minnesota Statutes, section 475.61, to pay principal of and 
179.23  interest on the bonds is not subject to any levy limitation. 
179.24  The aggregate principal amount of bonds, plus the aggregate of 
179.25  the taxes used directly to pay eligible capital expenditures and 
179.26  improvements may not exceed $5,000,000, plus an amount equal to 
179.27  the costs related to issuance of the bonds. 
179.28     (d) The taxes may be pledged to and used for the payment of 
179.29  the bonds and any bonds issued to refund them, only if the bonds 
179.30  and any refunding bonds are general obligations of the city. 
179.31     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
179.32  subdivisions 1 and 2 expire when the city council determines 
179.33  that sufficient funds have been received from the taxes to 
179.34  finance the capital and administrative costs for the 
179.35  acquisition, construction, and improvement of facilities 
179.36  described in subdivision 3, and to prepay or retire at maturity 
180.1   the principal, interest, and premium due on any bonds issued for 
180.2   the facilities under subdivision 5.  Any funds remaining after 
180.3   completion of the project and retirement or redemption of the 
180.4   bonds may be placed in the general fund of the city.  The taxes 
180.5   imposed under subdivisions 1 and 2 may expire at an earlier time 
180.6   if the city so determines by ordinance. 
180.7      Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
180.8   day after compliance by the governing body of the city of 
180.9   Hutchinson with Minnesota Statutes, section 645.021, subdivision 
180.10  3. 
180.11     Sec. 42.  [CITY OF OWATONNA; SALES AND USE TAX.] 
180.12     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
180.13  Notwithstanding Minnesota Statutes, section 477A.016, or any 
180.14  other provision of law, ordinance, or city charter, if approved 
180.15  by the city voters at a general election held within one year of 
180.16  the date of final enactment of this act, the city of Owatonna 
180.17  may impose by ordinance a sales and use tax of up to one-half of 
180.18  one percent for the purposes specified in subdivision 3.  The 
180.19  provisions of Minnesota Statutes, section 297A.48, govern the 
180.20  imposition, administration, collection, and enforcement of the 
180.21  tax authorized under this subdivision. 
180.22     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
180.23  Minnesota Statutes, section 477A.016, or any other provision of 
180.24  law, ordinance, or city charter, if a sales and use tax is 
180.25  imposed under subdivision 1, the city of Owatonna may impose by 
180.26  ordinance, for the purposes specified in subdivision 3, an 
180.27  excise tax of up to $20 per motor vehicle, as defined by 
180.28  ordinance, purchased or acquired from any person engaged within 
180.29  the city in the business of selling motor vehicles at retail. 
180.30     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
180.31  authorized by subdivisions 1 and 2 must be used by the city to 
180.32  pay the costs of collecting the taxes and to pay all or part of 
180.33  the capital and administrative costs of constructing and 
180.34  improving infrastructure and facilities as part of Owatonna 
180.35  Economic Development 2000 and related facilities.  Authorized 
180.36  expenses include, but are not limited to, acquiring property and 
181.1   paying construction and operating expenses related to the 
181.2   development of Owatonna Economic Development 2000 and related 
181.3   facilities, and paying debt service on bonds or other 
181.4   obligations issued to finance the construction of Owatonna 
181.5   Economic Development 2000 and related facilities. 
181.6      For purposes of this section, "Owatonna Economic 
181.7   Development 2000 and related facilities" means the improvement 
181.8   of the Owatonna regional airport and infrastructure 
181.9   improvements, including roads and the extension of water and 
181.10  sewer services, for an economic and tourism project. 
181.11     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
181.12  under Minnesota Statutes, chapter 475, to finance the capital 
181.13  expenditure and improvement projects.  An election to approve 
181.14  the bonds under Minnesota Statutes, section 475.58, may be held 
181.15  in combination with the election to authorize imposition of the 
181.16  tax under subdivision 1.  Whether to permit imposition of the 
181.17  tax and issuance of bonds may be posed to the voters as a single 
181.18  question.  The question must state that the sales tax revenues 
181.19  are pledged to pay the bonds, but that the bonds are general 
181.20  obligations and will be guaranteed by the city's property taxes. 
181.21     (b) The issuance of bonds under this subdivision is not 
181.22  subject to Minnesota Statutes, section 275.60. 
181.23     (c) The bonds are not included in computing any debt 
181.24  limitation applicable to the city, and the levy of taxes under 
181.25  Minnesota Statutes, section 475.61, to pay principal of and 
181.26  interest on the bonds is not subject to any levy limitation. 
181.27  The aggregate principal amount of bonds, plus the aggregate of 
181.28  the taxes used directly to pay eligible capital expenditures and 
181.29  improvements may not exceed $5,000,000, plus an amount equal to 
181.30  the costs related to issuance of the bonds. 
181.31     (d) The taxes may be pledged to and used for the payment of 
181.32  the bonds and any bonds issued to refund them, only if the bonds 
181.33  and any refunding bonds are general obligations of the city. 
181.34     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
181.35  subdivisions 1 and 2 expire when the city council determines 
181.36  that sufficient funds have been received from the taxes to 
182.1   finance the capital and administrative costs for acquisition, 
182.2   construction, and improvement of Owatonna Economic Development 
182.3   2000 and related facilities and to prepay or retire at maturity 
182.4   the principal, interest, and premium due on any bonds issued for 
182.5   the project under subdivision 4.  Any funds remaining after 
182.6   completion of the project and retirement or redemption of the 
182.7   bonds may be placed in the general fund of the city.  The taxes 
182.8   imposed under subdivisions 1 and 2 may expire at an earlier time 
182.9   if the city so determines by ordinance. 
182.10     Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
182.11  day after compliance by the governing body of the city of 
182.12  Owatonna with Minnesota Statutes, section 645.021, subdivision 3.
182.13     Sec. 43.  [CITY OF ROCHESTER; TAXES.] 
182.14     Subdivision 1.  [SALES AND USE TAXES AUTHORIZED.] 
182.15  Notwithstanding Minnesota Statutes, section 477A.016, or any 
182.16  other contrary provision of law, ordinance, or city charter, 
182.17  upon termination of the taxes authorized under Laws 1992, 
182.18  chapter 511, article 8, section 33, subdivision 1, and if 
182.19  approved by the voters of the city at a general or special 
182.20  election held within one year of the date of final enactment of 
182.21  this act, the city of Rochester may, by ordinance, impose an 
182.22  additional sales and use tax of up to one-half of one percent.  
182.23  The provisions of Minnesota Statutes, section 297A.48, govern 
182.24  the imposition, administration, collection, and enforcement of 
182.25  the tax authorized under this subdivision. 
182.26     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
182.27  Minnesota Statutes, section 477A.016, or any other contrary 
182.28  provision of law, ordinance, or city charter, upon termination 
182.29  of the tax authorized under Laws 1992, chapter 511, article 8, 
182.30  section 33, subdivision 2, the city of Rochester may, by 
182.31  ordinance, impose an excise tax of up to $20 per motor vehicle, 
182.32  as defined by ordinance, purchased or acquired from any person 
182.33  engaged within the city in the business of selling motor 
182.34  vehicles at retail. 
182.35     Subd. 3.  [USE OF REVENUES.] Revenues received from the 
182.36  taxes authorized by subdivisions 1 and 2 must be used by the 
183.1   city to pay for the cost of collecting and administering the 
183.2   taxes and to pay for the following projects: 
183.3      (1) transportation infrastructure improvements including 
183.4   both highway and airport improvements; 
183.5      (2) improvements to the civic center complex; 
183.6      (3) a municipal water, sewer, and storm sewer project 
183.7   necessary to improve regional ground water quality; and 
183.8      (4) construction of a regional recreation and sports center 
183.9   and associated facilities available for both community and 
183.10  student use, located at or adjacent to the Rochester center. 
183.11  The total amount of capital expenditures or bonds for these 
183.12  projects that may be paid from the revenues raised from the 
183.13  taxes authorized in this section may not exceed $71,500,000.  
183.14  The total amount of capital expenditures or bonds for the 
183.15  project in clause (4) that may be paid from the revenues raised 
183.16  from the taxes authorized in this section may not exceed 
183.17  $20,000,000. 
183.18     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
183.19  under Minnesota Statutes, chapter 475, to finance the capital 
183.20  expenditure and improvement projects.  An election to approve 
183.21  the bonds under Minnesota Statutes, section 475.58, may be held 
183.22  in combination with the election to authorize imposition of the 
183.23  tax under subdivision 1.  Whether to permit imposition of the 
183.24  tax and issuance of bonds may be posed to the voters as a single 
183.25  question.  The question must state that the sales tax revenues 
183.26  are pledged to pay the bonds, but that the bonds are general 
183.27  obligations and will be guaranteed by the city's property taxes. 
183.28     (b) The issuance of bonds under this subdivision is not 
183.29  subject to Minnesota Statutes, section 275.60. 
183.30     (c) The bonds are not included in computing any debt 
183.31  limitation applicable to the city, and the levy of taxes under 
183.32  Minnesota Statutes, section 475.61, to pay principal of and 
183.33  interest on the bonds is not subject to any levy limitation. 
183.34  The aggregate principal amount of bonds, plus the aggregate of 
183.35  the taxes used directly to pay eligible capital expenditures and 
183.36  improvements may not exceed $71,500,000, plus an amount equal to 
184.1   the costs related to issuance of the bonds. 
184.2      (d) The taxes may be pledged to and used for the payment of 
184.3   the bonds and any bonds issued to refund them, only if the bonds 
184.4   and any refunding bonds are general obligations of the city. 
184.5      Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
184.6   subdivisions 1 and 2 expire when the city council determines 
184.7   that sufficient funds have been received from the taxes to 
184.8   finance the projects and to prepay or retire at maturity the 
184.9   principal, interest, and premium due on any bonds issued for the 
184.10  projects under subdivision 4.  Any funds remaining after 
184.11  completion of the project and retirement or redemption of the 
184.12  bonds may be placed in the general fund of the city.  The taxes 
184.13  imposed under subdivisions 1 and 2 may expire at an earlier time 
184.14  if the city so determines by ordinance. 
184.15     Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
184.16  day after compliance by the governing body of the city of 
184.17  Rochester with Minnesota Statutes, section 645.021, subdivision 
184.18  3. 
184.19     Sec. 44.  [CENTRAL MINNESOTA EVENTS CENTER; LOCAL OPTION 
184.20  TAXES.] 
184.21     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
184.22  Notwithstanding Minnesota Statutes, section 477A.016, or any 
184.23  other provision of law, ordinance, or city charter, the cities 
184.24  of St. Cloud, Sauk Rapids, Sartell, Waite Park, and St. Joseph 
184.25  may impose by ordinance a sales and use tax of up to one-half of 
184.26  one percent for the purposes specified in subdivision 3.  This 
184.27  tax, and the taxes described in subdivisions 2 to 4, may be 
184.28  imposed in any of these cities only if approved by the voters of 
184.29  the city at a general election held within one year of the date 
184.30  of final enactment of this act, or at an election held on the 
184.31  first Tuesday in November of 1999.  The provisions of Minnesota 
184.32  Statutes, section 297A.48, govern the imposition, 
184.33  administration, collection, and enforcement of the taxes 
184.34  authorized under this subdivision. 
184.35     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
184.36  Minnesota Statutes, section 477A.016, or any other provision of 
185.1   law, ordinance, or city charter, the cities identified in 
185.2   subdivision 1 may impose by ordinance, for the purposes 
185.3   specified in subdivision 3, an excise tax of up to $20 per motor 
185.4   vehicle acquired from any person engaged within the city in the 
185.5   business of selling motor vehicles at retail. 
185.6      Subd. 3.  [FOOD AND BEVERAGE TAX 
185.7   AUTHORIZED.] Notwithstanding Minnesota Statutes, section 
185.8   477A.016, or any other provision of law, ordinance, or city 
185.9   charter, the cities identified in subdivision 1 may each impose 
185.10  by ordinance, for the purposes specified in subdivision 5, a tax 
185.11  of up to one percent on the gross receipts from the on-sales of 
185.12  intoxicating liquor and fermented malt beverages and the sale of 
185.13  food and beverages sold at restaurants and places of refreshment 
185.14  within the city.  The city shall define "restaurant" and "place 
185.15  of refreshment" as part of the ordinance. 
185.16     Subd. 4.  [LODGING TAX AUTHORIZED.] Notwithstanding 
185.17  Minnesota Statutes, section 477A.016, or any other provision of 
185.18  law, ordinance, or city charter, the cities identified in 
185.19  subdivision 1 may each impose by ordinance, for the purposes 
185.20  specified in subdivision 5, a tax of up to one percent on the 
185.21  gross receipts from the furnishing for a consideration of 
185.22  lodging and related services by a hotel, rooming house, tourist 
185.23  court, motel, or trailer camp, other than the renting or leasing 
185.24  of it for a continuous period of 30 days or more.  This tax is 
185.25  in addition to the tax authorized in Minnesota Statutes, section 
185.26  469.190, and is not included in calculating the tax rate subject 
185.27  to the limit imposed on lodging taxes in Minnesota Statutes, 
185.28  section 469.190, subdivision 2. 
185.29     Subd. 5.  [USE OF REVENUES.] (a) Revenues received from the 
185.30  taxes authorized by subdivisions 1 to 4 must be used to pay for 
185.31  the cost of collecting the taxes; to pay all or part of the 
185.32  capital or administrative cost of the acquisition, construction, 
185.33  and improvement of the Central Minnesota Events Center and 
185.34  related on-site and off-site improvements; and to pay for the 
185.35  operating deficit, if any, in the first five years of operation 
185.36  of the facility.  Authorized expenses related to acquisition, 
186.1   construction, and improvement of the center include, but are not 
186.2   limited to, acquiring property, paying construction and 
186.3   operating expenses related to the development of the facility, 
186.4   and securing and paying debt service on bonds or other 
186.5   obligations issued to finance construction or improvement of the 
186.6   authorized facility. 
186.7      (b) In addition, if the revenues collected from a tax 
186.8   imposed in subdivisions 1 to 4 are greater than the amount 
186.9   needed to meet obligations under paragraph (a) in any year, the 
186.10  surplus may be returned to the cities in a manner agreed upon by 
186.11  the participating cities under this section, to be used by the 
186.12  cities for projects of regional significance, limited to the 
186.13  acquisition and improvement of park land and open space; the 
186.14  purchase, renovation, and construction of public buildings and 
186.15  land primarily used for the arts, libraries, and community 
186.16  centers; and for debt service on bonds issued for these 
186.17  purposes.  The amount of surplus revenues raised by a tax will 
186.18  be determined either as provided for by an applicable joint 
186.19  powers agreement or by a governing entity in charge of 
186.20  administering the project in paragraph (a). 
186.21     Subd. 6.  [BONDING AUTHORITY.] (a) The cities named in 
186.22  subdivision 1 may issue bonds under Minnesota Statutes, chapter 
186.23  475, to finance the acquisition, construction, and improvement 
186.24  of the Central Minnesota Events Center.  An election to approve 
186.25  the bonds under Minnesota Statutes, section 475.58, may be held 
186.26  in combination with the election to authorize imposition of the 
186.27  tax under subdivision 1.  Whether to permit imposition of the 
186.28  tax and issuance of bonds may be posed to the voters as a single 
186.29  question.  The question must state that the sales tax revenues 
186.30  are pledged to pay the bonds, but that the bonds are general 
186.31  obligations and will be guaranteed by the city's property taxes. 
186.32     (b) The issuance of bonds under this subdivision is not 
186.33  subject to Minnesota Statutes, section 275.60. 
186.34     (c) The bonds are not included in computing any debt 
186.35  limitation applicable to the city, and the levy of taxes under 
186.36  Minnesota Statutes, section 475.61, to pay principal of and 
187.1   interest on the bonds is not subject to any levy limitation. 
187.2   The aggregate principal amount of bonds issued by all cities 
187.3   named in subdivision 1, plus the aggregate of the taxes used 
187.4   directly to pay eligible capital expenditures and improvements 
187.5   may not exceed $50,000,000, plus an amount equal to the costs 
187.6   related to issuance of the bonds, less any amount made available 
187.7   to the cities for the project described in subdivision 5 under 
187.8   the capital expenditure legislation adopted during the 1998 
187.9   session of the legislature. 
187.10     (d) The taxes may be pledged to and used for the payment of 
187.11  the bonds and any bonds issued to refund them, only if the bonds 
187.12  and any refunding bonds are general obligations of the city. 
187.13     Subd. 7.  [TERMINATION OF TAXES.] The taxes imposed by each 
187.14  city under subdivisions 1 to 4 expire when sufficient funds have 
187.15  been received from the taxes to finance the obligations under 
187.16  subdivision 3, and to prepay or retire at maturity the 
187.17  principal, interest, and premium due on the original bonds 
187.18  issued for the initial acquisition, construction, and 
187.19  improvement of the Central Minnesota Events Center as determined 
187.20  under an applicable joint powers agreement or by a governing 
187.21  entity in charge of administering the project.  Any funds 
187.22  remaining after completion of the project and retirement or 
187.23  redemption of the bonds may be placed in the general funds of 
187.24  the cities imposing the taxes.  The taxes imposed by a city 
187.25  under this section may expire at an earlier time by city 
187.26  ordinance, if authorized under the applicable joint powers 
187.27  agreement or by the governing entity in charge of administering 
187.28  the project. 
187.29     If the cities that pass a referendum required under 
187.30  subdivision 6 determine that the revenues raised from the sum of 
187.31  all the taxes authorized by referendum under this subdivision 
187.32  will not be sufficient to fund the project in subdivision 5, 
187.33  none of the authorized taxes may be imposed. 
187.34     Subd. 8.  [EFFECTIVE DATE.] This section is effective 
187.35  August 1, 1998, with respect to any city listed in subdivision 1 
187.36  upon compliance of the governing body of that city with 
188.1   Minnesota Statutes, section 645.021, subdivision 3.  
188.2      Sec. 45.  [CITY OF TWO HARBORS; TAXES AUTHORIZED.] 
188.3      Subdivision 1.  [SALES AND USE TAXES.] Notwithstanding 
188.4   Minnesota Statutes, section 477A.016, or any other provision of 
188.5   law, ordinance, or city charter, if approved by the voters of 
188.6   the city at the next general election held after the date of 
188.7   final enactment of this act, the city of Two Harbors may impose 
188.8   by ordinance, a sales and use tax at a rate of up to one-half of 
188.9   one percent for the purposes specified in subdivision 3.  The 
188.10  provisions of Minnesota Statutes, section 297A.48, govern the 
188.11  imposition, administration, collection, and enforcement of the 
188.12  tax authorized under this subdivision. 
188.13     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
188.14  Minnesota Statutes, section 477A.016, or any other contrary 
188.15  provision of law, ordinance, or city charter, the city of Two 
188.16  Harbors may impose by ordinance, for the purposes specified in 
188.17  subdivision 3, an excise tax of up to $20 per motor vehicle, as 
188.18  defined by ordinance, purchased or acquired from any person 
188.19  engaged within the city in the business of selling motor 
188.20  vehicles at retail. 
188.21     Subd. 3.  [USE OF REVENUES.] Revenues received from the 
188.22  taxes authorized under subdivision 1 must be used for sanitary 
188.23  sewer separation, wastewater treatment, and harbor refuge 
188.24  development projects. 
188.25     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
188.26  under Minnesota Statutes, chapter 475, to finance the capital 
188.27  expenditure and improvement projects.  An election to approve 
188.28  the bonds under Minnesota Statutes, section 475.58, may be held 
188.29  in combination with the election to authorize imposition of the 
188.30  tax under subdivision 1.  Whether to permit imposition of the 
188.31  tax and issuance of bonds may be posed to the voters as a single 
188.32  question.  The question must state that the sales tax revenues 
188.33  are pledged to pay the bonds, but that the bonds are general 
188.34  obligations and will be guaranteed by the city's property taxes. 
188.35     (b) The issuance of bonds under this subdivision is not 
188.36  subject to Minnesota Statutes, section 275.60. 
189.1      (c) The bonds are not included in computing any debt 
189.2   limitation applicable to the city, and the levy of taxes under 
189.3   Minnesota Statutes, section 475.61, to pay principal of and 
189.4   interest on the bonds is not subject to any levy limitation. 
189.5   The aggregate principal amount of bonds, plus the aggregate of 
189.6   the taxes used directly to pay eligible capital expenditures and 
189.7   improvements may not exceed $20,000,000, plus an amount equal to 
189.8   the costs related to issuance of the bonds. 
189.9      (d) The taxes may be pledged to and used for the payment of 
189.10  the bonds and any bonds issued to refund them, only if the bonds 
189.11  and any refunding bonds are general obligations of the city. 
189.12     Subd. 5.  [TERMINATION OF TAXES.] The authority granted 
189.13  under subdivision 1 to the city of Two Harbors to impose sales 
189.14  and use taxes expires when the costs of the projects described 
189.15  in subdivision 3 have been paid. 
189.16     Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
189.17  day after compliance by the governing body of the city of Two 
189.18  Harbors with Minnesota Statutes, section 645.021, subdivision 3. 
189.19     Sec. 46.  [CITY OF WINONA; TAXES AUTHORIZED.] 
189.20     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
189.21  Notwithstanding Minnesota Statutes, section 477A.016, or any 
189.22  other provision of law, ordinance, or city charter, if approved 
189.23  by the city voters at a general election held within one year of 
189.24  the date of final enactment of this act, the city of Winona may 
189.25  impose by ordinance a sales and use tax of up to one-half of one 
189.26  percent for the purposes specified in subdivision 3.  The 
189.27  provisions of Minnesota Statutes, section 297A.48, govern the 
189.28  imposition, administration, collection, and enforcement of the 
189.29  tax authorized under this subdivision. 
189.30     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
189.31  Minnesota Statutes, section 477A.016, or any other contrary 
189.32  provision of law, ordinance, or city charter, the city of Winona 
189.33  may impose by ordinance, for the purposes specified in 
189.34  subdivision 3, an excise tax of up to $20 per motor vehicle, as 
189.35  defined by ordinance, purchased or acquired from any person 
189.36  engaged within the city in the business of selling motor 
190.1   vehicles at retail. 
190.2      Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
190.3   authorized by subdivisions 1 and 2 must be used by the city to 
190.4   pay the costs of collecting the taxes and to pay all or a part 
190.5   of the capital and administrative costs of the dredging of Lake 
190.6   Winona, including paying debt service on bonds or other 
190.7   obligations issued to finance the project under subdivision 4.  
190.8      Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
190.9   under Minnesota Statutes, chapter 475, to finance the capital 
190.10  expenditure and improvement projects.  An election to approve 
190.11  the bonds under Minnesota Statutes, section 475.58, may be held 
190.12  in combination with the election to authorize imposition of the 
190.13  tax under subdivision 1.  Whether to permit imposition of the 
190.14  tax and issuance of bonds may be posed to the voters as a single 
190.15  question.  The question must state that the sales tax revenues 
190.16  are pledged to pay the bonds, but that the bonds are general 
190.17  obligations and will be guaranteed by the city's property taxes. 
190.18     (b) The issuance of bonds under this subdivision is not 
190.19  subject to Minnesota Statutes, section 275.60. 
190.20     (c) The bonds are not included in computing any debt 
190.21  limitation applicable to the city, and the levy of taxes under 
190.22  Minnesota Statutes, section 475.61, to pay principal of and 
190.23  interest on the bonds is not subject to any levy limitation. 
190.24  The aggregate principal amount of bonds, plus the aggregate of 
190.25  the taxes used directly to pay eligible capital expenditures and 
190.26  improvements may not exceed $4,000,000, plus an amount equal to 
190.27  the costs related to issuance of the bonds. 
190.28     (d) The taxes may be pledged to and used for the payment of 
190.29  the bonds and any bonds issued to refund them, only if the bonds 
190.30  and any refunding bonds are general obligations of the city. 
190.31     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
190.32  subdivisions 1 and 2 expire when the city council determines 
190.33  that sufficient funds have been received from the taxes to 
190.34  finance the dredging of Lake Winona and to prepay or retire at 
190.35  maturity the principal, interest, and premium due on any bonds 
190.36  issued for the project under subdivision 4.  Any funds remaining 
191.1   after completion of the project and retirement or redemption of 
191.2   the bonds may be placed in the general fund of the city.  The 
191.3   taxes imposed under subdivisions 1 and 2 may expire at an 
191.4   earlier time if the city so determines by ordinance.  
191.5      Subd. 6.  [EFFECTIVE DATE.] This section is effective upon 
191.6   compliance by the governing body of the city of Winona with 
191.7   Minnesota Statutes, section 645.021, subdivision 3. 
191.8      Sec. 47.  [REPEALER.] 
191.9      Minnesota Statutes 1996, section 297A.02, subdivision 2, is 
191.10  repealed. 
191.11     Sec. 48.  [EFFECTIVE DATE.] 
191.12     Sections 1, 3, 8, 9, 19, and 21 are effective for sales and 
191.13  purchases made after June 30, 1998.  Sections 2 and 47 are 
191.14  effective for sales made after June 30, 2000.  Sections 5, 13, 
191.15  and 17 are effective for sales made after June 30, 1998.  
191.16  Sections 6 and 7 are effective for rentals after June 30, 1998.  
191.17  Section 10 is effective for purchases made after June 30, 1998.  
191.18  Sections 12, 14, 15, and 34 are effective the day following 
191.19  final enactment.  Section 16 is effective for purchases made 
191.20  after December 1, 1997.  Section 18 is effective for purchases 
191.21  made after June 30, 1998, and before July 1, 2003.  Section 20 
191.22  is effective for local laws enacted after June 30, 1998.  
191.23  Sections 22 and 23 are effective July 1, 1998.  Section 24 is 
191.24  effective December 31, 1997.  Sections 25 to 27 are effective 
191.25  upon approval by the governing body of the city of Duluth and 
191.26  compliance with Minnesota Statutes, section 645.021, subdivision 
191.27  3.  Section 28 is effective upon approval by the governing body 
191.28  of the city of Mankato and compliance with Minnesota Statutes, 
191.29  section 645.021, subdivision 3.  Section 29 is effective upon 
191.30  approval by the governing body of the city of Rochester and 
191.31  compliance with Minnesota Statutes, section 645.021, subdivision 
191.32  3.  Sections 30 to 32, 36, and 37 are effective the day after 
191.33  the governing body of the city of St. Paul complies with 
191.34  Minnesota Statutes, section 645.021.  Section 35 is effective 
191.35  for transfers after November 30, 1997, and before January 1, 
191.36  1999. 
192.1                              ARTICLE 9
192.2                           BUDGET RESERVES
192.3      Section 1.  Minnesota Statutes 1997 Supplement, section 
192.4   16A.152, subdivision 2, is amended to read: 
192.5      Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
192.6   of a forecast of general fund revenues and expenditures after 
192.7   November 1 in an odd-numbered year, the commissioner of finance 
192.8   determines that there will be a positive unrestricted budgetary 
192.9   general fund balance at the close of the biennium, the 
192.10  commissioner of finance must allocate money as follows: 
192.11     (a) first, to the budget reserve until the total amount in 
192.12  the account equals $522,000,000 $622,000,000; then 
192.13     (b) 60 percent to the property tax reform account 
192.14  established in section 16A.1521; and 
192.15     (c) 40 percent is an unrestricted balance in the general 
192.16  fund. 
192.17     The amounts necessary to meet the requirements of this 
192.18  section are appropriated from the general fund within two weeks 
192.19  after the forecast is released. 
192.20     Sec. 2.  [EXCESS REVENUE; TO REDUCE BORROWING.] 
192.21     Subdivision 1.  [TAX REFORM AND REDUCTION ACCOUNT.] A tax 
192.22  reform and reduction account is established in the general fund. 
192.23  Amounts in the account are available only to provide tax reform 
192.24  and reduction, as enacted by law.  The governor shall make 
192.25  recommendations to the legislature regarding uses of the money 
192.26  in the account to reduce taxes and to reform the Minnesota tax 
192.27  system. 
192.28     Subd. 2.  [PRIORITIES.] If on the basis of a forecast of 
192.29  general fund revenues and expenditures after November 1 in 1998, 
192.30  the commissioner of finance determines that there will be a 
192.31  positive unrestricted budgetary general fund balance at the 
192.32  close of the biennium, the commissioner of finance must allocate 
192.33  money as follows: 
192.34     (1) first, to the budget reserve until the total amount in 
192.35  that account equals $622,000,000; then 
192.36     (2) second, to the tax reduction and reform account until 
193.1   the amount allocated equals $200,000,000; and 
193.2      (3) third, to reduce the need to borrow money to finance 
193.3   state building projects as provided in subdivision 3. 
193.4      Subd. 3.  [CANCELLATION OF BOND APPROPRIATIONS AND 
193.5   AUTHORIZATIONS.] The commissioner of finance shall reduce 
193.6   appropriations from the bond proceeds fund and the state 
193.7   transportation fund in 1998 H.F. No. 3843, if enacted, for which 
193.8   bonds have not yet been sold as authorized by that law, by the 
193.9   amount of general fund revenue made available for this purpose 
193.10  under subdivision 2, and the amount reduced is appropriated from 
193.11  the general fund for the same purposes as the appropriations 
193.12  reduced.  The commissioner of finance shall reduce the bond sale 
193.13  authorizations in 1998 H.F. No. 3843 accordingly. 
193.14     Sec. 3.  [APPROPRIATION.] 
193.15     On July 1, 1998, $100,000,000 is appropriated from the 
193.16  general fund to the commissioner of finance to transfer to the 
193.17  budget reserve account under Minnesota Statutes, section 
193.18  16A.152, subdivision 1a. 
193.19                             ARTICLE 10 
193.20                           TACONITE TAXES 
193.21     Section 1.  Minnesota Statutes 1997 Supplement, section 
193.22  124.918, subdivision 8, is amended to read: 
193.23     Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
193.24  Reductions in levies pursuant to section 124.918, subdivision 1, 
193.25  and section 273.138, shall be made prior to the reductions in 
193.26  clause (2). 
193.27     (2) Notwithstanding any other law to the contrary, 
193.28  districts which received payments pursuant to sections 298.018; 
193.29  298.23 to 298.28, except an amount distributed under section 
193.30  298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
193.31  298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
193.32  upon severed mineral values, or recognized revenue pursuant to 
193.33  section 477A.15; shall not include a portion of these aids in 
193.34  their permissible levies pursuant to those sections, but instead 
193.35  shall reduce the permissible levies authorized by this chapter 
193.36  and chapter 124A by the greater of the following: 
194.1      (a) an amount equal to 50 percent of the total dollar 
194.2   amount of the payments received pursuant to those sections or 
194.3   revenue recognized pursuant to section 477A.15 in the previous 
194.4   fiscal year; or 
194.5      (b) an amount equal to the total dollar amount of the 
194.6   payments received pursuant to those sections or revenue 
194.7   recognized pursuant to section 477A.15 in the previous fiscal 
194.8   year less the product of the same dollar amount of payments or 
194.9   revenue times the ratio of the maximum levy allowed the district 
194.10  under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 
194.11  124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
194.12  subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 
194.13  subdivision 5a, to the total levy allowed the district under 
194.14  this section and Minnesota Statutes 1986, sections 124A.03, 
194.15  124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
194.16  subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
194.17  5a, and 124A.20, subdivision 2, for levies certified in 
194.18  1986 five percent. 
194.19     (3) No reduction pursuant to this subdivision shall reduce 
194.20  the levy made by the district pursuant to section 124A.23, to an 
194.21  amount less than the amount raised by a levy of a net tax rate 
194.22  of 6.82 percent times the adjusted net tax capacity for taxes 
194.23  payable in 1990 and thereafter of that district for the 
194.24  preceding year as determined by the commissioner.  The amount of 
194.25  any increased levy authorized by referendum pursuant to section 
194.26  124A.03, subdivision 2, shall not be reduced pursuant to this 
194.27  subdivision.  The amount of any levy authorized by section 
194.28  124.912, subdivision 1, to make payments for bonds issued and 
194.29  for interest thereon, shall not be reduced pursuant to this 
194.30  subdivision.  
194.31     (4) Before computing the reduction pursuant to this 
194.32  subdivision of the health and safety levy authorized by sections 
194.33  124.83 and 124.91, subdivision 6, the commissioner shall 
194.34  ascertain from each affected school district the amount it 
194.35  proposes to levy under each section or subdivision.  The 
194.36  reduction shall be computed on the basis of the amount so 
195.1   ascertained. 
195.2      (5) Notwithstanding any law to the contrary, any amounts 
195.3   received by districts in any fiscal year pursuant to sections 
195.4   298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 
195.5   298.405; or any law imposing a tax on severed mineral values; 
195.6   and not deducted from general education aid pursuant to section 
195.7   124A.035, subdivision 5, clause (2), and not applied to reduce 
195.8   levies pursuant to this subdivision shall be paid by the 
195.9   district to the St. Louis county auditor in the following amount 
195.10  by March 15 of each year, the amount required to be subtracted 
195.11  from the previous fiscal year's general education aid pursuant 
195.12  to section 124A.035, subdivision 5, which is in excess of the 
195.13  general education aid earned for that fiscal year.  The county 
195.14  auditor shall deposit any amounts received pursuant to this 
195.15  clause in the St. Louis county treasury for purposes of paying 
195.16  the taconite homestead credit as provided in section 273.135. 
195.17     Sec. 2.  Minnesota Statutes 1996, section 273.135, 
195.18  subdivision 2, is amended to read: 
195.19     Subd. 2.  The amount of the reduction authorized by 
195.20  subdivision 1 shall be: 
195.21     (a) In the case of property located within the boundaries 
195.22  of a municipality which meets the qualifications prescribed in 
195.23  section 273.134, 66 percent of the tax, provided that the 
195.24  reduction shall not exceed the maximum amounts specified in 
195.25  clause (c), and shall not exceed an amount sufficient to reduce 
195.26  the effective tax rate on each parcel of property to 95 percent 
195.27  of the base year effective tax rate.  In no case will the 
195.28  reduction for each homestead resulting from this credit be less 
195.29  than $10.  
195.30     (b) In the case of property located within the boundaries 
195.31  of a school district which qualifies as a tax relief area but 
195.32  which is outside the boundaries of a municipality which meets 
195.33  the qualifications prescribed in section 273.134, 57 percent of 
195.34  the tax, provided that the reduction shall not exceed the 
195.35  maximum amounts specified in clause (c), and shall not exceed an 
195.36  amount sufficient to reduce the effective tax rate on each 
196.1   parcel of property to 95 percent of the base year effective tax 
196.2   rate.  In no case will the reduction for each homestead 
196.3   resulting from this credit be less than $10.  
196.4      (c) The maximum reduction of the tax is $225.40 $315.10 on 
196.5   property described in clause (a) and $200.10 $289.80 on property 
196.6   described in clause (b). , for taxes payable in 1985.  These 
196.7   maximum amounts shall increase by $15 times the quantity one 
196.8   minus the homestead credit equivalency percentage per year for 
196.9   taxes payable in 1986 and subsequent years.  
196.10     For the purposes of this subdivision, "homestead credit 
196.11  equivalency percentage" means one minus the ratio of the net 
196.12  class rate to the gross class rate applicable to the first 
196.13  $72,000 of the market value of residential homesteads, 
196.14  "effective tax rate" means tax divided by the market value of a 
196.15  property, and the "base year effective tax rate" means the 
196.16  payable 1988 tax on a property with an identical market value to 
196.17  that of the property receiving the credit in the current year 
196.18  after the application of the credits payable under Minnesota 
196.19  Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
196.20  section, divided by the market value of the property.  
196.21     Sec. 3.  Minnesota Statutes 1996, section 273.1391, 
196.22  subdivision 2, is amended to read: 
196.23     Subd. 2.  The amount of the reduction authorized by 
196.24  subdivision 1 shall be: 
196.25     (a) In the case of property located within a school 
196.26  district which does not meet the qualifications of section 
196.27  273.134 as a tax relief area, but which is located in a county 
196.28  with a population of less than 100,000 in which taconite is 
196.29  mined or quarried and wherein a school district is located which 
196.30  does meet the qualifications of a tax relief area, and provided 
196.31  that at least 90 percent of the area of the school district 
196.32  which does not meet the qualifications of section 273.134 lies 
196.33  within such county, 57 percent of the tax on qualified property 
196.34  located in the school district that does not meet the 
196.35  qualifications of section 273.134, provided that the amount of 
196.36  said reduction shall not exceed the maximum amounts specified in 
197.1   clause (c), and shall not exceed an amount sufficient to reduce 
197.2   the effective tax rate on each parcel of property to the product 
197.3   of 95 percent of the base year effective tax rate multiplied by 
197.4   the ratio of the current year's tax rate to the payable 1989 tax 
197.5   rate.  In no case will the reduction for each homestead 
197.6   resulting from this credit be less than $10.  The reduction 
197.7   provided by this clause shall only be applicable to property 
197.8   located within the boundaries of the county described therein.  
197.9      (b) In the case of property located within a school 
197.10  district which does not meet the qualifications of section 
197.11  273.134 as a tax relief area, but which is located in a school 
197.12  district in a county containing a city of the first class and a 
197.13  qualifying municipality, but not in a school district containing 
197.14  a city of the first class or adjacent to a school district 
197.15  containing a city of the first class unless the school district 
197.16  so adjacent contains a qualifying municipality, 57 percent of 
197.17  the tax, but not to exceed the maximums specified in clause (c), 
197.18  and shall not exceed an amount sufficient to reduce the 
197.19  effective tax rate on each parcel of property to the product of 
197.20  95 percent of the base year effective tax rate multiplied by the 
197.21  ratio of the current year's tax rate to the payable 1989 tax 
197.22  rate.  In no case will the reduction for each homestead 
197.23  resulting from this credit be less than $10. 
197.24     (c) The maximum reduction of the tax is $200.10 for taxes 
197.25  payable in 1985.  This maximum amount shall increase by $15 
197.26  multiplied by the quantity one minus the homestead credit 
197.27  equivalency percentage per year for taxes payable in 1986 and 
197.28  subsequent years $289.80.  
197.29     For the purposes of this subdivision, "homestead credit 
197.30  equivalency percentage" means one minus the ratio of the net 
197.31  class rate to the gross class rate applicable to the first 
197.32  $72,000 of the market value of residential homesteads, and 
197.33  "effective tax rate" means tax divided by the market value of a 
197.34  property, and the "base year effective tax rate" means the 
197.35  payable 1988 tax on a property with an identical market value to 
197.36  that of the property receiving the credit in the current year 
198.1   after application of the credits payable under Minnesota 
198.2   Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
198.3   section, divided by the market value of the property. 
198.4      Sec. 4.  [298.001] [DEFINITIONS.] 
198.5      Subdivision 1.  [GENERALLY.] As used in this chapter, the 
198.6   terms defined in this section have the meanings given in this 
198.7   section. 
198.8      Subd. 2.  [CITY.] "City" includes any home rule charter 
198.9   city, statutory city, or any city however organized. 
198.10     Subd. 3.  [PERSON.] "Person" means individuals, 
198.11  fiduciaries, estates, trusts, partnerships, companies, joint 
198.12  stock companies, corporations, and all associations. 
198.13     Subd. 4.  [TACONITE.] "Taconite" means ferruginous chert or 
198.14  ferruginous slate in the form of compact, siliceous rock, in 
198.15  which the iron oxide is so finely disseminated that 
198.16  substantially all of the iron-bearing particles of merchantable 
198.17  grade are smaller than 20 mesh and which is not merchantable as 
198.18  iron ore in its natural state, and which cannot be made 
198.19  merchantable by simple methods of beneficiation involving only 
198.20  crushing, screening, washing, jigging, drying, or any 
198.21  combination thereof. 
198.22     Subd. 5.  [IRON SULPHIDES.] "Iron sulphides" means chemical 
198.23  combinations of iron and sulphur (mineralogically known as 
198.24  pyrrhotite, pyrites, or marcasite), in relatively impure 
198.25  condition, which are not merchantable as iron ore and which 
198.26  cannot be made merchantable by the simple methods of 
198.27  beneficiation above described.  
198.28     Subd. 6.  [SEMITACONITE.] "Semitaconite" means altered iron 
198.29  formation, altered taconite, ferruginous chert, or ferruginous 
198.30  slate which has been oxidized and partially leached and in which 
198.31  the iron oxide is so finely disseminated that substantially all 
198.32  of the iron-bearing particles of merchantable grade are smaller 
198.33  than 20 mesh and which is not merchantable as iron ore in its 
198.34  natural state, and which cannot be made merchantable by simple 
198.35  methods of beneficiation involving only crushing, screening, 
198.36  washing, jigging, heavy media separation, spirals, cyclones, 
199.1   drying, or any combination thereof.  
199.2      Subd. 7.  [AGGLOMERATES.] "Agglomerates" means the 
199.3   merchantable iron ore aggregates which are produced by 
199.4   agglomeration.  
199.5      Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
199.6   commissioner of revenue of the state of Minnesota.  
199.7      Sec. 5.  Minnesota Statutes 1996, section 298.22, 
199.8   subdivision 2, is amended to read: 
199.9      Subd. 2.  There is hereby created the iron range resources 
199.10  and rehabilitation board, consisting of 11 members, five of whom 
199.11  shall be are state senators appointed by the subcommittee on 
199.12  committees of the rules committee of the senate, and five of 
199.13  whom shall be are representatives, appointed by the speaker of 
199.14  the house of representatives, their terms of office to commence 
199.15  on May 1, 1943, and continue until January 3rd, 1945, or until 
199.16  their successors are appointed and qualified.  Their successors 
199.17  The members shall be appointed each two years in the same manner 
199.18  as the original members were appointed, in January of every 
199.19  second odd-numbered year, commencing in January, 1945.  The 11th 
199.20  member of said the board shall be is the commissioner of natural 
199.21  resources of the state of Minnesota.  Vacancies on the board 
199.22  shall be filled in the same manner as the original members were 
199.23  chosen.  At least a majority of the legislative members of the 
199.24  board shall be elected from state senatorial or legislative 
199.25  districts in which over 50 percent of the residents reside 
199.26  within a tax relief area as defined in section 273.134.  All 
199.27  expenditures and projects made by the commissioner of iron range 
199.28  resources and rehabilitation shall first be submitted to said 
199.29  the iron range resources and rehabilitation board for approval 
199.30  by at least eight board members of expenditures and projects for 
199.31  rehabilitation purposes as provided by this section, and the 
199.32  method, manner, and time of payment of all said funds proposed 
199.33  to be disbursed shall be first approved or disapproved by said 
199.34  the board.  The board shall biennially make its report to the 
199.35  governor and the legislature on or before November 15 of each 
199.36  even-numbered year.  The expenses of said the board shall be 
200.1   paid by the state of Minnesota from the funds raised pursuant to 
200.2   this section. 
200.3      Sec. 6.  Minnesota Statutes 1996, section 298.221, is 
200.4   amended to read: 
200.5      298.221 [RECEIPTS FROM CONTRACTS; APPROPRIATION.] 
200.6      (a) All moneys money paid to the state of Minnesota 
200.7   pursuant to the terms of any contract entered into by the state 
200.8   under authority of Laws 1941, chapter 544, section 4, or of said 
200.9   section as amended section 298.22 and any fees which may, in the 
200.10  discretion of the commissioner of iron range resources and 
200.11  rehabilitation, be charged in connection with any project 
200.12  pursuant to that section as amended, shall be deposited in the 
200.13  state treasury to the credit of the iron range resources and 
200.14  rehabilitation board account in the special revenue fund and are 
200.15  hereby appropriated for the purposes of section 298.22. 
200.16     (b) Notwithstanding section 7.09, merchandise may be 
200.17  accepted by the commissioner of the iron range resources and 
200.18  rehabilitation board for payment of advertising contracts if the 
200.19  commissioner determines that the merchandise can be used for 
200.20  special event prizes or mementos at facilities operated by the 
200.21  board.  Nothing in this paragraph authorizes the commissioner or 
200.22  a member of the board to receive merchandise for personal use.  
200.23     Sec. 7.  Minnesota Statutes 1996, section 298.2213, 
200.24  subdivision 4, is amended to read: 
200.25     Subd. 4.  [PROJECT APPROVAL.] The board shall by August 1, 
200.26  1987, and each year thereafter prepare a list of projects to be 
200.27  funded from the money appropriated in this section with 
200.28  necessary supporting information including descriptions of the 
200.29  projects, plans, and cost estimates.  A project must not be 
200.30  approved by the board unless it finds that:  
200.31     (1) the project will materially assist, directly or 
200.32  indirectly, the creation of additional long-term employment 
200.33  opportunities; 
200.34     (2) the prospective benefits of the expenditure exceed the 
200.35  anticipated costs; and 
200.36     (3) in the case of assistance to private enterprise, the 
201.1   project will serve a sound business purpose.  
201.2      To be proposed by the board, a project must be approved by 
201.3   at least eight iron range resources and rehabilitation board 
201.4   members and the commissioner of iron range resources and 
201.5   rehabilitation.  The list of projects must be submitted to the 
201.6   governor, who shall, by November 15 of each year, approve, 
201.7   disapprove, or return for further consideration, each project.  
201.8   The money for a project may be spent only upon approval of the 
201.9   project by the governor.  The board may submit supplemental 
201.10  projects for approval at any time.  
201.11     Sec. 8.  Minnesota Statutes 1996, section 298.225, 
201.12  subdivision 1, is amended to read: 
201.13     Subdivision 1.  For distribution of taconite production tax 
201.14  in 1987 and thereafter with respect to production in 1986 and 
201.15  thereafter, The distribution of the taconite production tax as 
201.16  provided in section 298.28, subdivisions 2 to 5, 6, paragraphs 
201.17  paragraph (b) and (c), 7, and 8, shall equal the lesser of the 
201.18  following amounts:  
201.19     (1) the amount distributed pursuant to this section and 
201.20  section 298.28, with respect to 1983 production if the 
201.21  production for the year prior to the distribution year is no 
201.22  less than 42,000,000 taxable tons.  If the production is less 
201.23  than 42,000,000 taxable tons, the amount of the distributions 
201.24  shall be reduced proportionately at the rate of two percent for 
201.25  each 1,000,000 tons, or part of 1,000,000 tons by which the 
201.26  production is less than 42,000,000 tons; or 
201.27     (2)(i) for the distributions made pursuant to section 
201.28  298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 
201.29  (c), 50 40.5 percent of the amount distributed pursuant to this 
201.30  section and section 298.28, with respect to 1983 production.  
201.31     (ii) for the distributions made pursuant to section 298.28, 
201.32  subdivision 5, paragraphs (b) and (d), 75 percent of the amount 
201.33  distributed pursuant to this section and section 298.28, with 
201.34  respect to 1983 production.  
201.35     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
201.36  298.24, subdivision 1, is amended to read: 
202.1      Subdivision 1.  (a) For concentrate produced in 1992, 1993, 
202.2   1994, and 1995 1997 and 1998, there is imposed upon taconite and 
202.3   iron sulphides, and upon the mining and quarrying thereof, and 
202.4   upon the production of iron ore concentrate therefrom, and upon 
202.5   the concentrate so produced, a tax of $2.054 $2.141 per gross 
202.6   ton of merchantable iron ore concentrate produced therefrom.  
202.7      (b) On concentrates produced in 1997 and thereafter, an 
202.8   additional tax is imposed equal to three cents per gross ton of 
202.9   merchantable iron ore concentrate for each one percent that the 
202.10  iron content of the product exceeds 72 percent, when dried at 
202.11  212 degrees Fahrenheit. 
202.12     (c) For concentrates produced in 1996 1999 and subsequent 
202.13  years, the tax rate shall be equal to the preceding year's tax 
202.14  rate plus an amount equal to the preceding year's tax rate 
202.15  multiplied by the percentage increase in the implicit price 
202.16  deflator from the fourth quarter of the second preceding year to 
202.17  the fourth quarter of the preceding year, provided that, for 
202.18  concentrates produced in 1996 only, the increase in the rate of 
202.19  tax imposed under this section over the rate imposed for the 
202.20  previous year may not exceed four cents per ton.  "Implicit 
202.21  price deflator" for the gross national product means the 
202.22  implicit price deflator prepared by the bureau of economic 
202.23  analysis of the United States Department of Commerce.  
202.24     (c) On concentrates produced in 1997 and thereafter, an 
202.25  additional tax is imposed equal to three cents per gross ton of 
202.26  merchantable iron ore concentrate for each one percent that the 
202.27  iron content of the product exceeds 72 percent, when dried at 
202.28  212 degrees Fahrenheit. 
202.29     (d) The tax shall be imposed on the average of the 
202.30  production for the current year and the previous two years.  The 
202.31  rate of the tax imposed will be the current year's tax rate.  
202.32  This clause shall not apply in the case of the closing of a 
202.33  taconite facility if the property taxes on the facility would be 
202.34  higher if this clause and section 298.25 were not applicable.  
202.35     (e) If the tax or any part of the tax imposed by this 
202.36  subdivision is held to be unconstitutional, a tax 
203.1   of $2.054 $2.141 per gross ton of merchantable iron ore 
203.2   concentrate produced shall be imposed.  
203.3      (f) Consistent with the intent of this subdivision to 
203.4   impose a tax based upon the weight of merchantable iron ore 
203.5   concentrate, the commissioner of revenue may indirectly 
203.6   determine the weight of merchantable iron ore concentrate 
203.7   included in fluxed pellets by subtracting the weight of the 
203.8   limestone, dolomite, or olivine derivatives or other basic flux 
203.9   additives included in the pellets from the weight of the 
203.10  pellets.  For purposes of this paragraph, "fluxed pellets" are 
203.11  pellets produced in a process in which limestone, dolomite, 
203.12  olivine, or other basic flux additives are combined with 
203.13  merchantable iron ore concentrate.  No subtraction from the 
203.14  weight of the pellets shall be allowed for binders, mineral and 
203.15  chemical additives other than basic flux additives, or moisture. 
203.16     (g)(1) Notwithstanding any other provision of this 
203.17  subdivision, for the first two years of a plant's production of 
203.18  direct reduced ore, no tax is imposed under this section.  As 
203.19  used in this paragraph, "direct reduced ore" is ore that results 
203.20  in a product that has an iron content of at least 75 percent.  
203.21  For the third year of a plant's production of direct reduced 
203.22  ore, the rate to be applied to direct reduced ore is 25 percent 
203.23  of the rate otherwise determined under this subdivision.  For 
203.24  the fourth such production year, the rate is 50 percent of the 
203.25  rate otherwise determined under this subdivision; for the fifth 
203.26  such production year, the rate is 75 percent of the rate 
203.27  otherwise determined under this subdivision; and for all 
203.28  subsequent production years, the full rate is imposed. 
203.29     (2) Subject to clause (1), production of direct reduced ore 
203.30  in this state is subject to the tax imposed by this section, but 
203.31  if that production is not produced by a producer of taconite or 
203.32  iron sulfides, the production of taconite or iron sulfides 
203.33  consumed in the production of direct reduced iron in this state 
203.34  is not subject to the tax imposed by this section on taconite or 
203.35  iron sulfides. 
203.36     Sec. 10.  Minnesota Statutes 1996, section 298.28, 
204.1   subdivision 2, is amended to read: 
204.2      Subd. 2.  [CITY OR TOWN WHERE QUARRIED OR PRODUCED.] (a) 
204.3   4.5 cents per gross ton of merchantable iron ore concentrate, 
204.4   hereinafter referred to as "taxable ton," must be allocated to 
204.5   the city or town in the county in which the lands from which 
204.6   taconite was mined or quarried were located or within which the 
204.7   concentrate was produced.  If the mining, quarrying, and 
204.8   concentration, or different steps in either thereof are carried 
204.9   on in more than one taxing district, the commissioner shall 
204.10  apportion equitably the proceeds of the part of the tax going to 
204.11  cities and towns among such subdivisions upon the basis of 
204.12  attributing 40 percent of the proceeds of the tax to the 
204.13  operation of mining or quarrying the taconite, and the remainder 
204.14  to the concentrating plant and to the processes of 
204.15  concentration, and with respect to each thereof giving due 
204.16  consideration to the relative extent of such operations 
204.17  performed in each such taxing district.  The commissioner's 
204.18  order making such apportionment shall be subject to review by 
204.19  the tax court at the instance of any of the interested taxing 
204.20  districts, in the same manner as other orders of the 
204.21  commissioner. 
204.22     (b) Four cents per taxable ton shall be allocated to cities 
204.23  and organized townships affected by mining because their 
204.24  boundaries are within three miles of a taconite mine pit that 
204.25  has been actively mined in at least one of the prior three years.
204.26  If a city or town is located near more than one mine meeting 
204.27  these criteria, the city or town is eligible to receive aid 
204.28  calculated from only the mine producing the largest taxable 
204.29  tonnage.  When more than one municipality qualifies for aid 
204.30  based on one company's production, the aid must be apportioned 
204.31  among the municipalities in proportion to their populations.  Of 
204.32  the amounts distributed under this paragraph to each 
204.33  municipality, one-half must be used for infrastructure 
204.34  improvement projects, and one-half must be used for projects in 
204.35  which two or more municipalities cooperate.  Each municipality 
204.36  that receives a distribution under this paragraph must report 
205.1   annually to the iron range resources and rehabilitation board 
205.2   and the commissioner of iron range resources and rehabilitation 
205.3   on the projects involving cooperation with other municipalities. 
205.4      Sec. 11.  Minnesota Statutes 1996, section 298.28, 
205.5   subdivision 3, is amended to read: 
205.6      Subd. 3.  [CITIES; TOWNS.] (a) 12.5 cents per taxable ton, 
205.7   less any amount distributed under subdivision 8, and paragraph 
205.8   (b), must be allocated to the taconite municipal aid account to 
205.9   be distributed as provided in section 298.282. 
205.10     (b) An amount must be allocated to towns or cities that is 
205.11  annually certified by the county auditor of a county containing 
205.12  a taconite tax relief area within which there is (1) an 
205.13  organized township if, as of January 2, 1982, more than 75 
205.14  percent of the assessed valuation of the township consists of 
205.15  iron ore or (2) a city if, as of January 2, 1980, more than 75 
205.16  percent of the assessed valuation of the city consists of iron 
205.17  ore.  
205.18     (c) The amount allocated under paragraph (b) will be the 
205.19  portion of a township's or city's certified levy equal to the 
205.20  proportion of (1) the difference between 50 percent of January 
205.21  2, 1982, assessed value in the case of a township and 50 percent 
205.22  of the January 2, 1980, assessed value in the case of a city and 
205.23  its current assessed value to (2) the sum of its current 
205.24  assessed value plus the difference determined in (1), provided 
205.25  that the amount distributed shall not exceed $55 per capita in 
205.26  the case of a township or $75 per capita in the case of a city.  
205.27  For purposes of this limitation, population will be determined 
205.28  according to the 1980 decennial census conducted by the United 
205.29  States Bureau of the Census.  If the current assessed value of 
205.30  the township exceeds 50 percent of the township's January 2, 
205.31  1982, assessed value, or if the current assessed value of the 
205.32  city exceeds 50 percent of the city's January 2, 1980, assessed 
205.33  value, this paragraph shall not apply.  For purposes of this 
205.34  paragraph, "assessed value," when used in reference to years 
205.35  other than 1980 or 1982, means, for distributions for production 
205.36  year 1989, production taxes payable in 1990, the appropriate net 
206.1   tax capacities multiplied by 8.2 and for distributions for 
206.2   production year 1990 and thereafter, production taxes payable in 
206.3   1991 and thereafter, the appropriate net tax capacities 
206.4   multiplied by 10.2. 
206.5      Sec. 12.  Minnesota Statutes 1996, section 298.28, 
206.6   subdivision 4, is amended to read: 
206.7      Subd. 4.  [SCHOOL DISTRICTS.] (a) 27.5 22.28 cents per 
206.8   taxable ton plus the increase provided in paragraph (d) must be 
206.9   allocated to qualifying school districts to be distributed, 
206.10  based upon the certification of the commissioner of revenue, 
206.11  under paragraphs (b) and (c). 
206.12     (b) 5.5 4.46 cents per taxable ton must be distributed to 
206.13  the school districts in which the lands from which taconite was 
206.14  mined or quarried were located or within which the concentrate 
206.15  was produced.  The distribution must be based on the 
206.16  apportionment formula prescribed in subdivision 2. 
206.17     (c)(i) 22 17.82 cents per taxable ton, less any amount 
206.18  distributed under paragraph (e), shall be distributed to a group 
206.19  of school districts comprised of those school districts in which 
206.20  the taconite was mined or quarried or the concentrate produced 
206.21  or in which there is a qualifying municipality as defined by 
206.22  section 273.134 in direct proportion to school district indexes 
206.23  as follows:  for each school district, its pupil units 
206.24  determined under section 124.17 for the prior school year shall 
206.25  be multiplied by the ratio of the average adjusted net tax 
206.26  capacity per pupil unit for school districts receiving aid under 
206.27  this clause as calculated pursuant to chapter 124A for the 
206.28  school year ending prior to distribution to the adjusted net tax 
206.29  capacity per pupil unit of the district.  Each district shall 
206.30  receive that portion of the distribution which its index bears 
206.31  to the sum of the indices for all school districts that receive 
206.32  the distributions.  
206.33     (ii) Notwithstanding clause (i), each school district that 
206.34  receives a distribution under sections 298.018; 298.23 to 
206.35  298.28, exclusive of any amount received under this clause; 
206.36  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
207.1   imposing a tax on severed mineral values that is less than the 
207.2   amount of its levy reduction under section 124.918, subdivision 
207.3   8, for the second year prior to the year of the distribution 
207.4   shall receive a distribution equal to the difference; the amount 
207.5   necessary to make this payment shall be derived from 
207.6   proportionate reductions in the initial distribution to other 
207.7   school districts under clause (i).  
207.8      (d) Any school district described in paragraph (c) where a 
207.9   levy increase pursuant to section 124A.03, subdivision 2, is 
207.10  authorized by referendum, shall receive a distribution according 
207.11  to the following formula.  In 1994, the amount distributed per 
207.12  ton shall be equal to the amount per ton distributed in 1991 
207.13  under this paragraph increased in the same proportion as the 
207.14  increase between the fourth quarter of 1989 and the fourth 
207.15  quarter of 1992 in the implicit price deflator as defined in 
207.16  section 298.24, subdivision 1 from a fund that receives a 
207.17  distribution in 1998 of 21.3 cents per ton.  On July 15, 1995, 
207.18  and subsequent years of 1999, and each year thereafter, the 
207.19  increase over the amount established for the prior year shall be 
207.20  determined according to the increase in the implicit price 
207.21  deflator as provided in section 298.24, subdivision 1.  Each 
207.22  district shall receive the product of: 
207.23     (i) $175 times the pupil units identified in section 
207.24  124.17, subdivision 1, enrolled in the second previous year or 
207.25  the 1983-1984 school year, whichever is greater, less the 
207.26  product of 1.8 percent times the district's taxable net tax 
207.27  capacity in the second previous year; times 
207.28     (ii) the lesser of: 
207.29     (A) one, or 
207.30     (B) the ratio of the sum of the amount certified pursuant 
207.31  to section 124A.03, subdivision 1g, in the previous year, plus 
207.32  the amount certified pursuant to section 124A.03, subdivision 
207.33  1i, in the previous year, plus the referendum aid according to 
207.34  section 124A.03, subdivision 1h, for the current year, plus an 
207.35  amount equal to the reduction under section 124A.03, subdivision 
207.36  3b, to the product of 1.8 percent times the district's taxable 
208.1   net tax capacity in the second previous year. 
208.2      If the total amount provided by paragraph (d) is 
208.3   insufficient to make the payments herein required then the 
208.4   entitlement of $175 per pupil unit shall be reduced uniformly so 
208.5   as not to exceed the funds available.  Any amounts received by a 
208.6   qualifying school district in any fiscal year pursuant to 
208.7   paragraph (d) shall not be applied to reduce general education 
208.8   aid which the district receives pursuant to section 124A.23 or 
208.9   the permissible levies of the district.  Any amount remaining 
208.10  after the payments provided in this paragraph shall be paid to 
208.11  the commissioner of iron range resources and rehabilitation who 
208.12  shall deposit the same in the taconite environmental protection 
208.13  fund and the northeast Minnesota economic protection trust fund 
208.14  as provided in subdivision 11. 
208.15     Each district receiving money according to this paragraph 
208.16  shall reserve $25 times the number of pupil units in the 
208.17  district.  It may use the money for early childhood programs or 
208.18  for outcome-based learning programs that enhance the academic 
208.19  quality of the district's curriculum.  The outcome-based 
208.20  learning programs must be approved by the commissioner of 
208.21  children, families, and learning. 
208.22     (e) There shall be distributed to any school district the 
208.23  amount which the school district was entitled to receive under 
208.24  section 298.32 in 1975. 
208.25     Sec. 13.  Minnesota Statutes 1996, section 298.28, 
208.26  subdivision 6, is amended to read: 
208.27     Subd. 6.  [PROPERTY TAX RELIEF.] (a) Fifteen In 1999, 38.81 
208.28  cents per taxable ton, less any amount required to be 
208.29  distributed under paragraphs (b) and (c), and less any amount 
208.30  required to be deducted under paragraph (d), must be allocated 
208.31  to St. Louis county acting as the counties' fiscal agent, to be 
208.32  distributed as provided in sections 273.134 to 273.136. 
208.33     (b) If an electric power plant owned by and providing the 
208.34  primary source of power for a taxpayer mining and concentrating 
208.35  taconite is located in a county other than the county in which 
208.36  the mining and the concentrating processes are conducted, .1875 
209.1   cent per taxable ton of the tax imposed and collected from such 
209.2   taxpayer shall be paid to the county. 
209.3      (c) If an electric power plant owned by and providing the 
209.4   primary source of power for a taxpayer mining and concentrating 
209.5   taconite is located in a school district other than a school 
209.6   district in which the mining and concentrating processes are 
209.7   conducted, .5625 .7282 cent per taxable ton of the tax imposed 
209.8   and collected from the taxpayer shall be paid to the school 
209.9   district. 
209.10     (d) Two cents per taxable ton must be deducted from the 
209.11  amount allocated to the St. Louis county auditor under paragraph 
209.12  (a). 
209.13     Sec. 14.  Minnesota Statutes 1996, section 298.28, 
209.14  subdivision 7, is amended to read: 
209.15     Subd. 7.  [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 
209.16  Three For the 1998 distribution, 6.5 cents per taxable ton shall 
209.17  be paid to the iron range resources and rehabilitation board for 
209.18  the purposes of section 298.22.  The amount determined in this 
209.19  subdivision shall be increased in 1981 and subsequent years 
209.20  prior to 1988 in the same proportion as the increase in the 
209.21  steel mill products index as provided in section 298.24, 
209.22  subdivision 1, and shall be increased in 1989, 1990, and 1991 
209.23  according to the increase in the implicit price deflator as 
209.24  provided in section 298.24, subdivision 1.  In 1992 and 1993, 
209.25  the amount distributed per ton shall be the same as the amount 
209.26  distributed per ton in 1991.  In 1994, the amount distributed 
209.27  shall be the distribution per ton for 1991 increased in the same 
209.28  proportion as the increase between the fourth quarter of 1989 
209.29  and the fourth quarter of 1992 in the implicit price deflator as 
209.30  defined in section 298.24, subdivision 1.  That amount shall be 
209.31  increased in 1995 1999 and subsequent years in the same 
209.32  proportion as the increase in the implicit price deflator as 
209.33  provided in section 298.24, subdivision 1.  The amount 
209.34  distributed in 1988 shall be increased according to the increase 
209.35  that would have occurred in the rate of tax under section 298.24 
209.36  if the rate had been adjusted according to the implicit price 
210.1   deflator for 1987 production.  The amount distributed pursuant 
210.2   to this subdivision shall be expended within or for the benefit 
210.3   of a tax relief area defined in section 273.134.  No part of the 
210.4   fund provided in this subdivision may be used to provide loans 
210.5   for the operation of private business unless the loan is 
210.6   approved by the governor. 
210.7      Sec. 15.  Minnesota Statutes 1996, section 298.28, 
210.8   subdivision 9, is amended to read: 
210.9      Subd. 9.  [MINNESOTA ECONOMIC PROTECTION TRUST FUND.] 1.5 
210.10  In 1999, 3.35 cents per taxable ton shall be paid to the 
210.11  northeast Minnesota economic protection trust fund.  
210.12     Sec. 16.  Minnesota Statutes 1997 Supplement, section 
210.13  298.28, subdivision 9a, is amended to read: 
210.14     Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 
210.15  cents per ton for distributions in 1996, 1998, and 1999, and 
210.16  2000 and 20.4 cents per ton for distributions in 1997 shall be 
210.17  paid to the taconite economic development fund.  No distribution 
210.18  shall be made under this paragraph in any year in which total 
210.19  industry production falls below 30 million tons. 
210.20     (b) An amount equal to 50 percent of the tax under section 
210.21  298.24 for concentrate sold in the form of pellet chips and 
210.22  fines not exceeding 5/16 inch in size and not including crushed 
210.23  pellets shall be paid to the taconite economic development 
210.24  fund.  The amount paid shall not exceed $700,000 annually for 
210.25  all companies.  If the initial amount to be paid to the fund 
210.26  exceeds this amount, each company's payment shall be prorated so 
210.27  the total does not exceed $700,000. 
210.28     Sec. 17.  Minnesota Statutes 1997 Supplement, section 
210.29  298.28, subdivision 9b, is amended to read: 
210.30     Subd. 9b.  [TACONITE ENVIRONMENTAL FUND.] Five cents per 
210.31  ton for distributions in 1998 and, 1999, and 2000 shall be paid 
210.32  to the taconite environmental fund for use under section 
210.33  298.2961.  No distribution may be made under this paragraph in 
210.34  any year in which total industry production falls below 
210.35  30,000,000 tons. 
210.36     Sec. 18.  Minnesota Statutes 1996, section 298.28, 
211.1   subdivision 10, is amended to read: 
211.2      Subd. 10.  [INCREASE.] Beginning with distributions in 
211.3   2000, the amounts determined under subdivisions 6, paragraph 
211.4   (a), and 9 shall be increased in 1979 and subsequent years prior 
211.5   to 1988 in the same proportion as the increase in the steel mill 
211.6   products index as provided in section 298.24, subdivision 1.  
211.7   The amount distributed in 1988 shall be increased according to 
211.8   the increase that would have occurred in the rate of tax under 
211.9   section 298.24 if the rate had been adjusted according to the 
211.10  implicit price deflator for 1987 production.  Those amounts 
211.11  shall be increased in 1989, 1990, and 1991 in the same 
211.12  proportion as the increase in the implicit price deflator as 
211.13  provided in section 298.24, subdivision 1.  In 1992 and 1993, 
211.14  the amounts determined under subdivisions 6, paragraph (a), and 
211.15  9, shall be the distribution per ton determined for distribution 
211.16  in 1991.  In 1994, the amounts determined under subdivisions 6, 
211.17  paragraph (a), and 9, shall be the distribution per ton 
211.18  determined for distribution in 1991 increased in the same 
211.19  proportion as the increase between the fourth quarter of 1989 
211.20  and the fourth quarter of 1992 in the implicit price deflator as 
211.21  defined in section 298.24, subdivision 1.  Those amounts shall 
211.22  be increased in 1995 and subsequent years in the same proportion 
211.23  as the increase in the implicit price deflator as provided in 
211.24  section 298.24, subdivision 1.  
211.25     The distributions per ton determined under subdivisions 5, 
211.26  paragraphs (b) and (d), and 6, paragraphs paragraph (b) and (c) 
211.27  for distribution in 1988 and subsequent years shall be the 
211.28  distribution per ton determined for distribution in 1987.  The 
211.29  distribution per ton under subdivision 6, paragraph (c), for 
211.30  distribution in 2000 and subsequent years shall be 81 percent of 
211.31  the distribution per ton determined for distribution in 1987. 
211.32     Sec. 19.  Minnesota Statutes 1996, section 298.28, 
211.33  subdivision 11, is amended to read: 
211.34     Subd. 11.  [REMAINDER.] (a) The proceeds of the tax imposed 
211.35  by section 298.24 which remain after the distributions and 
211.36  payments in subdivisions 2 to 10a, as certified by the 
212.1   commissioner of revenue, and paragraphs (b) and, (c), and (d) 
212.2   have been made, together with interest earned on all money 
212.3   distributed under this section prior to distribution, shall be 
212.4   divided between the taconite environmental protection fund 
212.5   created in section 298.223 and the northeast Minnesota economic 
212.6   protection trust fund created in section 298.292 as follows:  
212.7   Two-thirds to the taconite environmental protection fund and 
212.8   one-third to the northeast Minnesota economic protection trust 
212.9   fund.  The proceeds shall be placed in the respective special 
212.10  accounts. 
212.11     (b) There shall be distributed to each city, town, school 
212.12  district, and county the amount that it received under section 
212.13  294.26 in calendar year 1977; provided, however, that the amount 
212.14  distributed in 1981 to the unorganized territory number 2 of 
212.15  Lake county and the town of Beaver Bay based on the 
212.16  between-terminal trackage of Erie Mining Company will be 
212.17  distributed in 1982 and subsequent years to the unorganized 
212.18  territory number 2 of Lake county and the towns of Beaver Bay 
212.19  and Stony River based on the miles of track of Erie Mining 
212.20  Company in each taxing district. 
212.21     (c) There shall be distributed to the iron range resources 
212.22  and rehabilitation board the amounts it received in 1977 under 
212.23  section 298.22.  The amount distributed under this paragraph 
212.24  shall be expended within or for the benefit of the tax relief 
212.25  area defined in section 273.134. 
212.26     (d) There shall be distributed to each school district 81 
212.27  percent of the amount that it received under section 294.26 in 
212.28  calendar year 1977. 
212.29     Sec. 20.  Minnesota Statutes 1997 Supplement, section 
212.30  298.296, subdivision 4, is amended to read: 
212.31     Subd. 4.  [TEMPORARY LOAN AUTHORITY.] (a) The board may 
212.32  recommend that up to $7,500,000 from the corpus of the trust may 
212.33  be used for loans as provided in this subdivision.  The money 
212.34  would be available for loans for construction and equipping of 
212.35  facilities constituting (1) a value added iron products plant, 
212.36  which may be either a new plant or a facility incorporated into 
213.1   an existing plant that produces iron upgraded to a minimum of 75 
213.2   percent iron content or any iron alloy with a total minimum 
213.3   metallic content of 90 percent; or (2) a new mine or minerals 
213.4   processing plant for any mineral subject to the net proceeds tax 
213.5   imposed under section 298.015.  A loan under this paragraph may 
213.6   not exceed $5,000,000 for any facility.  
213.7      (b) Additionally, the board must reserve the first 
213.8   $2,000,000 of the net interest, dividends, and earnings arising 
213.9   from the investment of the trust after June 30, 1996, to be used 
213.10  for additional grants for the purposes set forth in paragraph 
213.11  (a).  This amount must be reserved until it is used for the 
213.12  grants or until June 30, 1998 1999, whichever is earlier. 
213.13     (c) Additionally, the board may recommend that up to 
213.14  $5,500,000 from the corpus of the trust may be used for 
213.15  additional grants for the purposes set forth in paragraph (a). 
213.16     (d) The board may require that it receive an equity 
213.17  percentage in any project to which it contributes under this 
213.18  section. 
213.19     (e) The authority to make loans and grants under this 
213.20  subdivision terminates June 30, 1998 1999. 
213.21     Sec. 21.  Minnesota Statutes 1996, section 298.48, 
213.22  subdivision 1, is amended to read: 
213.23     Subdivision 1.  [ANNUAL FILING.] By April 1 each year, 
213.24  every owner or lessee of mineral rights who, in respect thereto, 
213.25  has engaged in any exploration for or mining of taconite, 
213.26  semitaconite, or iron-sulphide shall, within six months of June 
213.27  3, 1977, file with the commissioner of revenue all data of the 
213.28  following kinds in the possession or under the control of the 
213.29  owner or lessee which was acquired prior to January 1, 1977 
213.30  during the preceding calendar year: 
213.31     (a) Maps and other records indicating the location, 
213.32  character and extent of exploration for taconite, semitaconite, 
213.33  or iron-sulphides; 
213.34     (b) Logs, notes and other records indicating the nature of 
213.35  minerals encountered during the course of exploration; 
213.36     (c) The results of any analyses of metallurgical tests or 
214.1   samples taken in connection with exploration; 
214.2      (d) The ultimate pit layout and the supporting cross 
214.3   sections; and 
214.4      (e) Any other data which the commissioner of revenue may 
214.5   determine to be relevant to the determination of the location, 
214.6   nature, extent, quality or quantity of unmined ores of said 
214.7   minerals.  The commissioner of revenue shall have the power to 
214.8   may compel submission of the data.  The court administrator of 
214.9   any court of record, upon demand of the commissioner, shall 
214.10  issue a subpoena for the production of any data before the 
214.11  commissioner.  Disobedience of subpoenas issued under this 
214.12  section shall be punished by the district court of the district 
214.13  in which the subpoena is issued as for a contempt of the 
214.14  district court.  By April 1 of each succeeding year every owner 
214.15  or lessee of mineral rights shall file with the commissioner of 
214.16  revenue all such data acquired during the preceding calendar 
214.17  year. 
214.18     Sec. 22.  [USE OF PRODUCTION TAX PROCEEDS.] 
214.19     An amount equal to the amount distributed under Laws 1997, 
214.20  chapter 231, article 8, section 16, shall be used by the iron 
214.21  range resources and rehabilitation board to make equal grants to 
214.22  the cities of Chisholm and Hibbing to be used for the 
214.23  establishment of an industrial park located at the 
214.24  Chisholm/Hibbing airport. 
214.25     Sec. 23.  [REPEALER.] 
214.26     Minnesota Statutes 1996, sections 298.012; 298.21; 298.23; 
214.27  298.34, subdivisions 1 and 4; and 298.391, subdivisions 2 and 5, 
214.28  are repealed. 
214.29     Sec. 24.  [EFFECTIVE DATE.] 
214.30     Section 1 is effective for taxes levied in 2000.  Sections 
214.31  2 and 3 are effective for taxes payable in 1999.  Sections 8; 
214.32  10; 12, other than paragraph (d); 13, paragraph (c); 18; and 19 
214.33  are effective for distributions in 2000 and subsequent years.  
214.34  Sections 13, paragraph (a); and 22 are effective for production 
214.35  year 1998, distributions made in 1999. 
214.36                             ARTICLE 11
215.1               TAX INCREMENT FINANCING AND DEVELOPMENT
215.2      Section 1.  Minnesota Statutes 1996, section 469.174, is 
215.3   amended by adding a subdivision to read: 
215.4      Subd. 28.  [DECERTIFY OR DECERTIFICATION.] "Decertify" or 
215.5   "decertification" means the termination of a tax increment 
215.6   financing district which occurs when the county auditor removes 
215.7   all remaining parcels from the district. 
215.8      Sec. 2.  Minnesota Statutes 1996, section 469.175, 
215.9   subdivision 5, is amended to read: 
215.10     Subd. 5.  [ANNUAL DISCLOSURE.] (a) For all tax increment 
215.11  financing districts, whether created prior or subsequent to 
215.12  August 1, 1979, on or before July 1 of each year, The authority 
215.13  shall annually submit to the county board, the county auditor, 
215.14  the school board, state auditor and, if the authority is other 
215.15  than the municipality, the governing body of the municipality, a 
215.16  report of the status of the district.  The report shall include 
215.17  the following information:  the amount and the source of revenue 
215.18  in the account, the amount and purpose of expenditures from the 
215.19  account, the amount of any pledge of revenues, including 
215.20  principal and interest on any outstanding bonded indebtedness, 
215.21  the original net tax capacity of the district and any 
215.22  subdistrict, the captured net tax capacity retained by the 
215.23  authority, the captured net tax capacity shared with other 
215.24  taxing districts, the tax increment received, and any additional 
215.25  information necessary to demonstrate compliance with any 
215.26  applicable tax increment financing plan.  The authority must 
215.27  submit the annual report for a year on or before August 1 of the 
215.28  next year. 
215.29     (b) An annual statement showing the tax increment received 
215.30  and expended in that year, the original net tax capacity, 
215.31  captured net tax capacity, amount of outstanding bonded 
215.32  indebtedness, the amount of the district's and any subdistrict's 
215.33  increments paid to other governmental bodies, the amount paid 
215.34  for administrative costs, the sum of increments paid, directly 
215.35  or indirectly, for activities and improvements located outside 
215.36  of the district, and any additional information the authority 
216.1   deems necessary shall be published in a newspaper of general 
216.2   circulation in the municipality.  If the fiscal disparities 
216.3   contribution under chapter 276A or 473F for the district is 
216.4   computed under section 469.177, subdivision 3, paragraph (a), 
216.5   the annual statement must disclose that fact and indicate the 
216.6   amount of increased property tax imposed on other properties in 
216.7   the municipality as a result of the fiscal disparities 
216.8   contribution.  The commissioner of revenue shall prescribe the 
216.9   form of this statement and the method for calculating the 
216.10  increased property taxes.  The authority must publish the annual 
216.11  statement for a year no later than July 1 August 15 of the next 
216.12  year.  The authority must identify the newspaper of general 
216.13  circulation in the municipality to which the annual statement 
216.14  has been or will be submitted for publication and provide a copy 
216.15  of the annual statement to the state auditor by the time it 
216.16  submits it for publication on or before August 1 of the year in 
216.17  which the statement must be published.  
216.18     (c) The disclosure and reporting requirements imposed by 
216.19  this subdivision apply to districts certified before, on, or 
216.20  after August 1, 1979. 
216.21     Sec. 3.  Minnesota Statutes 1996, section 469.175, 
216.22  subdivision 6, is amended to read: 
216.23     Subd. 6.  [FINANCIAL REPORTING.] (a) The state auditor 
216.24  shall develop a uniform system of accounting and financial 
216.25  reporting for tax increment financing districts.  The system of 
216.26  accounting and financial reporting shall, as nearly as possible: 
216.27     (1) provide for full disclosure of the sources and uses of 
216.28  public funds in the district; 
216.29     (2) permit comparison and reconciliation with the affected 
216.30  local government's accounts and financial reports; 
216.31     (3) permit auditing of the funds expended on behalf of a 
216.32  district, including a single district that is part of a 
216.33  multidistrict project or that is funded in part or whole through 
216.34  the use of a development account funded with tax increments from 
216.35  other districts or with other public money; 
216.36     (4) be consistent with generally accepted accounting 
217.1   principles. 
217.2      (b) The authority must annually submit to the state 
217.3   auditor, on or before July 1, a financial report in compliance 
217.4   with paragraph (a).  Copies of the report must also be provided 
217.5   to the county and school district boards and to the governing 
217.6   body of the municipality, if the authority is not the 
217.7   municipality.  To the extent necessary to permit compliance with 
217.8   the requirement of financial reporting, the county and any other 
217.9   appropriate local government unit or private entity must provide 
217.10  the necessary records or information to the authority or the 
217.11  state auditor as provided by the system of accounting and 
217.12  financial reporting developed pursuant to paragraph (a).  The 
217.13  authority must submit the annual report for a year on or before 
217.14  August 1 of the next year. 
217.15     (c) The annual financial report must also include the 
217.16  following items: 
217.17     (1) the original net tax capacity of the district and any 
217.18  subdistrict; 
217.19     (2) the captured net tax capacity of the district, 
217.20  including the amount of any captured net tax capacity shared 
217.21  with other taxing districts; 
217.22     (3) for the reporting period and for the duration of the 
217.23  district, the amount budgeted under the tax increment financing 
217.24  plan, and the actual amount expended for, at least, the 
217.25  following categories: 
217.26     (i) acquisition of land and buildings through condemnation 
217.27  or purchase; 
217.28     (ii)  site improvements or preparation costs; 
217.29     (iii) installation of public utilities, parking facilities, 
217.30  streets, roads, sidewalks, or other similar public improvements; 
217.31     (iv) administrative costs, including the allocated cost of 
217.32  the authority; 
217.33     (v) public park facilities, facilities for social, 
217.34  recreational, or conference purposes, or other similar public 
217.35  improvements; 
217.36     (4) for properties sold to developers, the total cost of 
218.1   the property to the authority and the price paid by the 
218.2   developer; and 
218.3      (5) the amount of increments rebated or paid to developers 
218.4   or property owners for privately financed improvements or other 
218.5   qualifying costs. 
218.6      (d) The reporting requirements imposed by this subdivision 
218.7   apply to districts certified before, on, and after August 1, 
218.8   1979. 
218.9      Sec. 4.  Minnesota Statutes 1996, section 469.175, 
218.10  subdivision 6a, is amended to read: 
218.11     Subd. 6a.  [REPORTING REQUIREMENTS.] (a) The municipality 
218.12  must annually report to the state auditor the following amounts 
218.13  for the entire municipality: 
218.14     (1) the total principal amount of nondefeased tax increment 
218.15  financing bonds that are outstanding at the end of the previous 
218.16  calendar year; and 
218.17     (2) the total annual amount of principal and interest 
218.18  payments that are due for the current calendar year on (i) 
218.19  general obligation tax increment financing bonds, and (ii) other 
218.20  tax increment financing bonds. 
218.21     (b) The municipality must annually report to the state 
218.22  auditor the following amounts for each tax increment financing 
218.23  district located in the municipality: 
218.24     (1) the type of district, whether economic development, 
218.25  redevelopment, housing, soils condition, mined underground 
218.26  space, or hazardous substance site; 
218.27     (2) the date on which the district is required to be 
218.28  decertified; 
218.29     (3) the amount of any payments and the value of in-kind 
218.30  benefits, such as physical improvements and the use of building 
218.31  space, that are financed with revenues derived from increments 
218.32  and are provided to another governmental unit (other than the 
218.33  municipality) during the preceding calendar year; 
218.34     (4) the tax increment revenues for taxes payable in the 
218.35  current calendar year; 
218.36     (5) whether the tax increment financing plan or other 
219.1   governing document permits increment revenues to be expended (i) 
219.2   to pay bonds, the proceeds of which were or may be expended on 
219.3   activities located outside of the district, (ii) for deposit 
219.4   into a common fund from which money may be expended on 
219.5   activities located outside of the district, or (iii) to 
219.6   otherwise finance activities located outside of the tax 
219.7   increment financing district; and 
219.8      (6) any additional information that the state auditor may 
219.9   require.  
219.10     (c) The report required by this subdivision must be filed 
219.11  with the state auditor on or before July 1 of each year.  The 
219.12  municipality must submit the annual report for a year required 
219.13  by this subdivision on or before August 1 of the next year. 
219.14     (d) The state auditor may provide for combining the reports 
219.15  required by this subdivision and subdivisions 5 and 6 so that 
219.16  only one report is made for each year to the auditor. 
219.17     (e) This section applies to districts certified before, on, 
219.18  and after August 1, 1979. 
219.19     Sec. 5.  Minnesota Statutes 1996, section 469.175, is 
219.20  amended by adding a subdivision to read: 
219.21     Subd. 6b.  [DURATION OF DISCLOSURE AND REPORTING 
219.22  REQUIREMENTS.] The disclosure and reporting requirements imposed 
219.23  by subdivisions 5, 6, and 6a apply with respect to a tax 
219.24  increment financing district beginning with the annual 
219.25  disclosure and reports for the year in which the original net 
219.26  tax capacity of the district was certified and ending with the 
219.27  annual disclosure and reports for the year in which both of the 
219.28  following events have occurred: 
219.29     (1) decertification of the district; and 
219.30     (2) expenditure or return to the county auditor of all 
219.31  remaining revenues derived from tax increments paid by 
219.32  properties in the district. 
219.33     Sec. 6.  Minnesota Statutes 1996, section 469.176, 
219.34  subdivision 7, is amended to read: 
219.35     Subd. 7.  [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The 
219.36  authority may request inclusion in a tax increment financing 
220.1   district and the county auditor may certify the original tax 
220.2   capacity of a parcel or a part of a parcel that qualified under 
220.3   the provisions of section 273.111 or 273.112 or chapter 473H for 
220.4   taxes payable in any of the five calendar years before the 
220.5   filing of the request for certification only for 
220.6      (1) a district in which 85 percent or more of the planned 
220.7   buildings and facilities (determined on the basis of square 
220.8   footage) are for a qualified manufacturing or production of 
220.9   tangible personal property, including processing resulting in 
220.10  the change in condition of the property facility or a qualified 
220.11  distribution facility or a combination of both; or 
220.12     (2) a qualified housing district as defined in section 
220.13  273.1399, subdivision 1. 
220.14     (b) (1) A distribution facility means buildings and other 
220.15  improvements to real property that are used to conduct 
220.16  activities in at least each of the following categories: 
220.17     (i) to store or warehouse tangible personal property; 
220.18     (ii) to take orders for shipment, mailing, or delivery; 
220.19     (iii) to prepare personal property for shipment, mailing, 
220.20  or delivery; and 
220.21     (iv) to ship, mail, or deliver property. 
220.22     (2) A manufacturing facility includes space used for 
220.23  manufacturing or producing tangible personal property, including 
220.24  processing resulting in the change in condition of the property, 
220.25  and space necessary for and related to the manufacturing 
220.26  activities. 
220.27     (3) To be a qualified facility, the owner or operator of a 
220.28  manufacturing or distribution facility must agree to pay and pay 
220.29  90 percent or more of the employees of the facility at a rate 
220.30  equal to or greater than 160 percent of the federal minimum wage 
220.31  for individuals over the age of 20. 
220.32     Sec. 7.  Minnesota Statutes 1996, section 469.177, is 
220.33  amended by adding a subdivision to read: 
220.34     Subd. 12.  [DECERTIFICATION OF TAX INCREMENT FINANCING 
220.35  DISTRICT.] The county auditor shall decertify a tax increment 
220.36  financing district when the earliest of the following times is 
221.1   reached: 
221.2      (1) the applicable maximum duration limit under section 
221.3   469.176, subdivisions 1a to 1g; 
221.4      (2) the maximum duration limit, if any, provided by the 
221.5   municipality pursuant to section 469.176, subdivision 1; 
221.6      (3) the time of decertification specified in section 
221.7   469.1761, subdivision 4, if the commissioner of revenue issues 
221.8   an order of noncompliance and the maximum duration limit for 
221.9   economic development districts has been exceeded; 
221.10     (4) upon completion of the required actions to allow 
221.11  decertification under section 469.1763, subdivision 4; or 
221.12     (5) upon receipt by the county auditor of a written request 
221.13  for decertification from the authority that requested 
221.14  certification of the original net tax capacity of the district 
221.15  or its successor. 
221.16     Sec. 8.  Minnesota Statutes 1996, section 469.1771, is 
221.17  amended by adding a subdivision to read: 
221.18     Subd. 2a.  [SUSPENSION OF DISTRIBUTION OF TAX 
221.19  INCREMENT.] (a) If an authority fails to make a disclosure or to 
221.20  submit a report containing the information required by section 
221.21  469.175, subdivisions 5 and 6, regarding a tax increment 
221.22  financing district within the time provided in section 469.175, 
221.23  subdivisions 5 and 6, or if a municipality fails to submit a 
221.24  report containing the information required of section 469.175, 
221.25  subdivision 6a, regarding a tax increment financing district 
221.26  within the time provided in section 469.175, subdivision 6a, the 
221.27  state auditor shall mail to the authority a written notice that 
221.28  it or the municipality has failed to make the required 
221.29  disclosure or to submit a required report with respect to a 
221.30  particular district.  The state auditor shall mail the notice on 
221.31  or before the third Tuesday of August of the year in which the 
221.32  disclosure or report was required to be made or submitted.  The 
221.33  notice must describe the consequences of failing to disclose or 
221.34  submit a report as provided in paragraph (b).  If the state 
221.35  auditor has not received a copy of a disclosure or a report 
221.36  described in this paragraph on or before the third Tuesday of 
222.1   November of the year in which the disclosure or report was 
222.2   required to be made or submitted, the state auditor shall mail a 
222.3   written notice to the county auditor to hold the distribution of 
222.4   tax increment from a particular district.  
222.5      (b) Upon receiving written notice from the state auditor to 
222.6   hold the distribution of tax increment, the county auditor shall 
222.7   hold: 
222.8      (1) 25 percent of the amount of tax increment that 
222.9   otherwise would be distributed, if the distribution is made 
222.10  after the third Friday in November but during the year in which 
222.11  the disclosure or report was required to be made or submitted; 
222.12  or 
222.13     (2) 100 percent of the amount of tax increment that 
222.14  otherwise would be distributed, if the distribution is made 
222.15  after December 31 of the year in which the disclosure or report 
222.16  was required to be made or submitted. 
222.17     (c) Upon receiving the copy of the disclosure and all of 
222.18  the reports described in paragraph (a) with respect to a 
222.19  district regarding which the state auditor has mailed to the 
222.20  county auditor a written notice to hold distribution of tax 
222.21  increment, the state auditor shall mail to the county auditor a 
222.22  written notice lifting the hold and authorizing the county 
222.23  auditor to distribute to the authority or municipality any tax 
222.24  increment that the county auditor had held pursuant to paragraph 
222.25  (b).  The state auditor shall mail the written notice required 
222.26  by this paragraph within five working days after receiving the 
222.27  last outstanding item.  The county auditor shall distribute the 
222.28  tax increment to the authority or municipality within 15 working 
222.29  days after receiving the written notice required by this 
222.30  paragraph. 
222.31     (d) Notwithstanding any law to the contrary, any interest 
222.32  that accrues on tax increment while it is being held by the 
222.33  county auditor pursuant to paragraph (b) is not tax increment 
222.34  and may be retained by the county. 
222.35     (e) For purposes of sections 469.176, subdivisions 1a to 
222.36  1g, and 469.177, subdivision 11, tax increment being held by the 
223.1   county auditor pursuant to paragraph (b) is considered 
223.2   distributed to or received by the authority or municipality as 
223.3   of the time that it would have been distributed or received but 
223.4   for paragraph (b). 
223.5      Sec. 9.  Minnesota Statutes 1996, section 469.1771, 
223.6   subdivision 5, is amended to read: 
223.7      Subd. 5.  [DISPOSITION OF PAYMENTS.] If the authority does 
223.8   not have sufficient increments or other available money to make 
223.9   a payment required by this section, the municipality that 
223.10  approved the district must use any available money to make the 
223.11  payment including the levying of property taxes.  Money received 
223.12  by the county auditor under this section must be distributed as 
223.13  excess increments under section 469.176, subdivision 2, 
223.14  paragraph (a), clause (4)., except that if the county auditor 
223.15  receives the payment after (1) 60 days from a municipality's 
223.16  receipt of the state auditor's notification under subdivision 1, 
223.17  paragraph (c), of noncompliance requiring the payment, or (2) 
223.18  the commencement of an action by the county attorney to compel 
223.19  the payment, then no distributions may be made to the 
223.20  municipality that approved the tax increment financing district. 
223.21     Sec. 10.  [469.1791] [TAX INCREMENT FINANCING SPECIAL 
223.22  TAXING DISTRICT.] 
223.23     Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
223.24  the terms defined in this subdivision have the meanings given 
223.25  them. 
223.26     (b) "City" means a city containing a tax increment 
223.27  financing district, the request for certification of which was 
223.28  made before June 2, 1997. 
223.29     (c) "Enabling ordinance" means an ordinance adopted by a 
223.30  city council establishing a special taxing district. 
223.31     (d) "Special taxing district" means all or any portion of 
223.32  the property located within a tax increment financing district, 
223.33  the request for certification of which was made before June 2, 
223.34  1997. 
223.35     (e) "Development or redevelopment services" has the meaning 
223.36  given in the city's enabling ordinance, and may include any 
224.1   services or expenditures the city or its economic development 
224.2   authority or housing and redevelopment authority or port 
224.3   authority may provide or incur under sections 469.001 to 
224.4   469.1081 and 469.124 to 469.134, including, without limitation, 
224.5   amounts necessary to pay the principal of or interest on bonds 
224.6   issued by the city or its economic development authority or 
224.7   housing and redevelopment authority or port authority under 
224.8   section 469.178, for the tax increment financing districts 
224.9   contained within the special taxing district or projects to be 
224.10  funded with increments from tax increment financing districts 
224.11  contained within the special taxing district. 
224.12     (f) "Preexisting obligations" means bonds issued and sold 
224.13  before June 2, 1997, and binding contracts entered into before 
224.14  June 2, 1997, to the extent that the bonds and contracts are 
224.15  secured by a pledge of increments from the tax increment 
224.16  financing district contained within the special taxing district. 
224.17     Subd. 2.  [ESTABLISHMENT OF SPECIAL TAXING DISTRICT.] The 
224.18  governing body of a city may adopt an ordinance establishing a 
224.19  special taxing district, if the conditions under subdivision 3 
224.20  are satisfied.  The ordinance must describe with particularity 
224.21  the property to be included in the district and the development 
224.22  or redevelopment services to be provided in the district.  Only 
224.23  property that is subject to an assessment agreement or 
224.24  development agreement with the city or its economic development 
224.25  authority, housing and redevelopment authority, or port 
224.26  authority, as of the date of adoption of the ordinance, may be 
224.27  included within the special taxing district and be subject to 
224.28  the tax imposed by the city on the district.  The ordinance may 
224.29  not be adopted until after a public hearing has been held on the 
224.30  question.  Notice of the hearing must include the time and place 
224.31  of the hearing, a map showing the boundaries of the proposed 
224.32  district, and a statement that all persons owning property in 
224.33  the proposed district that would be subject to a special tax 
224.34  will be given the opportunity to be heard at the hearing.  
224.35  Within 30 days after adoption of the ordinance under this 
224.36  subdivision, the governing body shall send a copy of the 
225.1   ordinance to the commissioner of revenue. 
225.2      Subd. 3.  [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city 
225.3   may establish a special taxing district within a tax increment 
225.4   financing district under this section only if the conditions 
225.5   under paragraphs (b) and (c) are met or if the city elects to 
225.6   exercise the authority under paragraph (d). 
225.7      (b) The city has determined that: 
225.8      (1) total tax increments from the district, including 
225.9   unspent increments from previous years and increments 
225.10  transferred under paragraph (c), will be insufficient to pay the 
225.11  amounts due in a year on preexisting obligations; and 
225.12     (2) this insufficiency of increments resulted from the 
225.13  reduction in property tax class rates enacted in the 1997 and 
225.14  1998 legislative sessions. 
225.15     (c) The city has agreed to transfer any available 
225.16  increments from other tax increment financing districts in the 
225.17  city to pay the preexisting obligations of the district.  This 
225.18  requirement does not apply to any available increments of a 
225.19  qualified housing district, as defined in section 273.1399, 
225.20  subdivision 1.  Notwithstanding any law to the contrary, the 
225.21  city may require a development authority to transfer available 
225.22  increments for any of its tax increment financing districts in 
225.23  the city to make up an insufficiency in another district in the 
225.24  city, regardless of whether the district was established by the 
225.25  development authority or another development authority.  
225.26  Notwithstanding any law to the contrary, increments transferred 
225.27  under this authority must be spent to pay preexisting 
225.28  obligations.  "Development authority" for this purpose means any 
225.29  authority as defined in section 469.174, subdivision 2. 
225.30     (d) If a tax increment financing district does not qualify 
225.31  under paragraphs (b) and (c), the governing body may elect to 
225.32  establish a special taxing district under this section.  If the 
225.33  city elects to exercise this authority, increments from the tax 
225.34  increment financing district and the proceeds of the tax imposed 
225.35  under this section may only be used to pay preexisting 
225.36  obligations and reasonable administrative expenses of the 
226.1   authority for the tax increment financing district.  The tax 
226.2   increment financing district must be decertified when all 
226.3   preexisting obligations have been paid.  
226.4      Subd. 4.  [NOTICE; HEARING.] Notice of the hearing must be 
226.5   given by publication in the official newspaper of the city at 
226.6   least ten but not more than 30 days prior to the hearing.  Not 
226.7   less than ten days before the hearing, notice must also be 
226.8   mailed to the owner of each parcel within the area proposed to 
226.9   be included within the district.  For the purpose of giving 
226.10  mailed notice, owners are those shown on the records of the 
226.11  county auditor.  At the public hearing a person affected by the 
226.12  proposed district may testify on any issues relevant to the 
226.13  proposed district.  The hearing may be adjourned from time to 
226.14  time and the ordinance establishing the district may be adopted 
226.15  at any time within six months after the date of the conclusion 
226.16  of the hearing by a vote of the majority of the governing body 
226.17  of the city. 
226.18     Subd. 5.  [BENEFIT; OBJECTION.] Before the ordinance is 
226.19  adopted or at the hearing at which it is to be adopted, any 
226.20  affected landowner may file a written objection with the city 
226.21  clerk asserting that the landowner's property should not be 
226.22  included in the district or should not be subject to a special 
226.23  tax and objecting to: 
226.24     (1) the fact that the landowner's property is not subject 
226.25  to an assessment agreement or development agreement; or 
226.26     (2) the fact that neither the landowner's property nor its 
226.27  use is benefited by the development or redevelopment services 
226.28  provided. 
226.29  The governing body shall make a determination on the objection 
226.30  within 30 days of its filing.  Pending its determination, the 
226.31  governing body may delay adoption of the ordinance or it may 
226.32  adopt the ordinance with a reservation that the landowner's 
226.33  property may be excluded from the district or district special 
226.34  taxes when a determination is made. 
226.35     Subd. 6.  [APPEAL TO DISTRICT COURT.] Within 30 days after 
226.36  the determination of the objection, any person aggrieved may 
227.1   appeal to the district court by serving a notice upon the mayor 
227.2   or city clerk.  No appeal may be filed if the aggrieved person 
227.3   failed to timely file a written objection with the city clerk 
227.4   under subdivision 5, and the failure was not due to reasonable 
227.5   cause.  The notice must be filed with the court administrator of 
227.6   the district court within ten days after its service.  The city 
227.7   clerk shall furnish the appellant a certified copy of the 
227.8   findings and determination of the governing body.  The court may 
227.9   affirm the action objected to or, if the appellant's objections 
227.10  have merit, modify or cancel it.  If the appellant does not 
227.11  prevail upon the appeal, the costs incurred are taxed to the 
227.12  appellant by the court and judgment entered for them.  All 
227.13  objections are deemed waived unless presented on appeal. 
227.14     Subd. 7.  [MODIFICATION OF SPECIAL TAXING DISTRICT.] The 
227.15  boundaries of the special taxing district may be enlarged or 
227.16  reduced under the procedures for establishment of the district 
227.17  under subdivision 2.  Property added to the district is subject 
227.18  to the special tax imposed within the district after the 
227.19  property becomes a part of the district. 
227.20     Subd. 8.  [SPECIAL TAX AUTHORITY.] A city may impose a 
227.21  special tax within a special taxing district that is reasonably 
227.22  related to the development or redevelopment services provided.  
227.23  The tax may be imposed at a rate or amount sufficient to produce 
227.24  the revenues required to provide the development or 
227.25  redevelopment services within the project area subject to limits 
227.26  under subdivision 9.  The special tax is payable only in a year 
227.27  in which the assessment or development agreement for the 
227.28  property subject to the tax remains in effect for that taxes 
227.29  payable year. 
227.30     Subd. 9.  [LIMITS ON TAX.] (a) The maximum levy for any 
227.31  year may not exceed the least of: 
227.32     (1) the amount specified in the assessment agreement or 
227.33  development agreement; 
227.34     (2) the amount needed to pay preexisting obligations, less 
227.35  available increments including increments transferred from other 
227.36  districts; and 
228.1      (3) the amount of the general ad valorem tax that would 
228.2   have been paid by the captured net tax capacity of the tax 
228.3   increment financing district, if the property tax class rates 
228.4   for taxes payable in 1997 were in effect, less the amount of the 
228.5   general ad valorem tax imposed for the payable year on the 
228.6   captured net tax capacity. 
228.7      (b) If the city uses the proceeds of a tax imposed under 
228.8   this section to pay preexisting obligations secured by 
228.9   increments from more than one tax increment financing district, 
228.10  the city must establish a special taxing district in each of the 
228.11  districts and impose a uniform rate upon all the districts.  The 
228.12  maximum limits under paragraph (a) must be calculated in 
228.13  aggregate for all of the affected districts.  
228.14     (c) If neither the assessment agreement nor the development 
228.15  agreement specify a tax amount but state an agreed market value 
228.16  for the property, the amount specified for purposes of paragraph 
228.17  (a), clause (1), is the market value of the property under the 
228.18  agreement multiplied by the class rate for taxes payable in 1997 
228.19  and multiplied by the sum of the ad valorem tax rates for all 
228.20  the taxing jurisdictions. 
228.21     Subd. 10.  [LIMITS UNDER OTHER LAW.] The tax imposed under 
228.22  this section is not included in the calculation of levies or 
228.23  limits imposed under law or charter.  Section 275.065 does not 
228.24  apply to any tax imposed under this section.  The tax proceeds 
228.25  are subject to the restrictions imposed by law on revenues 
228.26  derived from tax increments and may only be spent for the 
228.27  purposes for which increments may be spent. 
228.28     Subd. 11.  [COLLECTION AND ADMINISTRATION.] The special tax 
228.29  must be imposed on the net tax capacity of the taxable property 
228.30  located in the geographic area described in the ordinance.  
228.31  Taxable net tax capacity must be determined without regard to 
228.32  captured or original net tax capacity under section 469.177 or 
228.33  to the distribution or contribution value under section 
228.34  473F.08.  The city shall compute the amount of the tax for each 
228.35  parcel subject to tax and certify the amount to the county 
228.36  auditor by the date provided in section 429.061, subdivision 3, 
229.1   for the annual certification of special assessment 
229.2   installments.  The special tax is payable and must be collected 
229.3   at the same time and in the same manner as provided for payment 
229.4   and collection of ad valorem taxes.  Special taxes not paid on 
229.5   or before the applicable due date are subject to the same 
229.6   penalty and interest as ad valorem tax amounts not paid by the 
229.7   respective due date.  The due date for the special tax is the 
229.8   due date for the real property tax for the property on which the 
229.9   special tax is imposed. 
229.10     Sec. 11.  Laws 1965, chapter 326, section 1, subdivision 5, 
229.11  as amended by Laws 1975, chapter 110, section 1, and Laws 1985, 
229.12  chapter 87, section 3, is amended to read: 
229.13     Subd. 5.  [PROMOTION OF TOURIST, AGRICULTURAL AND 
229.14  INDUSTRIAL DEVELOPMENT.] The amount to be spent annually for the 
229.15  purposes of this subdivision shall not exceed $1 $4 per capita 
229.16  of the county's population. 
229.17     Sec. 12.  Laws 1967, chapter 170, section 1, subdivision 5, 
229.18  as amended by Laws 1985, chapter 87, section 6, is amended to 
229.19  read: 
229.20     Subd. 5.  Promotion of tourist, agricultural and industrial 
229.21  developments.  The amount to be spent annually for the purposes 
229.22  of this subdivision shall not exceed $1 $4 per capita of the 
229.23  county's population. 
229.24     Sec. 13.  Laws 1997, chapter 231, article 10, section 24, 
229.25  is amended to read: 
229.26     Sec. 24.  [TASK FORCE; TIF TAX INCREMENT FINANCING 
229.27  RECODIFICATION.] 
229.28     (a) A legislative task force is established on tax 
229.29  increment financing and local economic development powers.  The 
229.30  task force consists of 12 members as follows: 
229.31     (1) six members of the house of representatives, at least 
229.32  two of whom are members of the minority caucus, appointed by the 
229.33  speaker; and 
229.34     (2) six members of the senate, at least two of whom are 
229.35  members of the minority caucus, appointed by the committee on 
229.36  committees. 
230.1      (b) The task force shall prepare a bill for the 1998 1999 
230.2   legislative session that recodifies the Tax Increment Financing 
230.3   Act and combines the statutes providing local economic 
230.4   development powers into one law providing a uniform set of 
230.5   powers relative to the use of tax increment financing. 
230.6      (c) In preparing the bill under this section, the task 
230.7   force shall consult with and seek comments from and 
230.8   participation by representatives of the affected local 
230.9   governments. 
230.10     (d) The revisor of statutes and house and senate 
230.11  legislative staff shall staff the task force. 
230.12     (e) This section expires on March 1, 1998 May 1, 1999. 
230.13     Sec. 14.  [GOLDEN VALLEY; TAX INCREMENT FINANCING.] 
230.14     Subdivision 1.  [DISTRICT EXTENSION.] (a) Notwithstanding 
230.15  Minnesota Statutes, section 469.176, subdivision 1c, tax 
230.16  increments from the Valley Square tax increment financing 
230.17  district shall be paid to the housing and redevelopment 
230.18  authority of the city of Golden Valley for property taxes 
230.19  payable in 2001 through 2010 for the following parcels in the 
230.20  district, identified by their property tax identification 
230.21  numbers: 
230.22     (1) 31-118-21-14-0001; 
230.23     (2) 31-118-21-14-0006; 
230.24     (3) 31-118-21-14-0018 through 31-118-21-14-0022; 
230.25     (4) 31-118-21-14-0029 through 31-118-21-14-0032; and 
230.26     (5) 31-118-21-41-0001. 
230.27     (b) Increments permitted to be paid to the authority by 
230.28  paragraph (a) may only be used to pay or defease bonds issued to 
230.29  fund public redevelopment costs within the redevelopment project 
230.30  or bonds issued to refund the bonds. 
230.31     (c) Collection or receipt of increments by the housing and 
230.32  redevelopment authority under paragraph (a) does not reduce or 
230.33  affect the amount of increments that the authority may receive 
230.34  after April 1, 2001, for the district to pay bonds issued before 
230.35  April 1, 1990. 
230.36     (d) Any housing financed or assisted, directly or 
231.1   indirectly, with increments from the district during the 
231.2   extension period permitted by this section must meet the 
231.3   requirements of Minnesota Statutes, section 469.1761. 
231.4      Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
231.5   day after compliance with the requirements of Minnesota 
231.6   Statutes, sections 469.1782, subdivision 2, and 645.021, 
231.7   subdivision 3. 
231.8      Sec. 15.  [CITY OF BROWERVILLE; TAX INCREMENT FINANCING.] 
231.9      Subdivision 1.  [EXPENDITURE OUTSIDE DISTRICT.] 
231.10  Notwithstanding the provisions of Minnesota Statutes, section 
231.11  469.1763, the city of Browerville may expend tax increments from 
231.12  tax increment district No. 2 for eligible activities outside tax 
231.13  increment district No. 2 but within development district No. 1.  
231.14  The limitations contained in Minnesota Statutes, section 
231.15  469.1763, subdivision 2, do not apply if the expenditures are 
231.16  used to finance improvements to provide sewer and water service 
231.17  to the tax increment financing district.  
231.18     Subd. 2.  [EFFECTIVE DATE.] This section is effective only 
231.19  after its approval by the governing body of the city of 
231.20  Browerville and compliance with Minnesota Statutes, section 
231.21  645.021, subdivision 3. 
231.22     Sec. 16.  [CITY OF DEEPHAVEN; TAX INCREMENT FINANCING.] 
231.23     Subdivision 1.  [AUTHORIZATION OF EXPENDITURES.] 
231.24  Notwithstanding any law to the contrary, the city of Deephaven 
231.25  may expend revenues derived from tax increment financing 
231.26  district number 1-1 that are available and unencumbered on the 
231.27  date of enactment of this act to finance a public improvement 
231.28  located outside of the district under the conditions in 
231.29  subdivision 2.  The public improvement must be included in the 
231.30  tax increment plan prior to January 1, 1997. 
231.31     Subd. 2.  [CONDITIONS ON USE.] The authority under 
231.32  subdivision 1 to spend increments outside of the tax increment 
231.33  financing district number 1-1 is subject to the following 
231.34  conditions: 
231.35     (1) The city must request decertification of district 
231.36  number 1-1 by no later than December 31, 1998. 
232.1      (2) The city transfers no more than $800,000 of increments 
232.2   from district number 1-1 to a separate account on the city's 
232.3   books and records.  The interest earned on this account is not 
232.4   tax increment for purposes of Minnesota Statutes, sections 
232.5   469.174 to 469.179. 
232.6      (3) Any unspent increments from district number 1-1 after 
232.7   the transfer under clause (2) are excess increments that must be 
232.8   distributed under Minnesota Statutes, section 469.176, 
232.9   subdivision 2, clause (4). 
232.10     (4) Money in the account established under clause (2) may 
232.11  only be spent to pay for the improvement of the Minnetonka 
232.12  boulevard-Carsons Bay bridge project in the city.  If matching 
232.13  funds are not available for the project by December 31, 2002, 
232.14  the balance in the account must be distributed as excess 
232.15  increments under Minnesota Statutes, section 469.176, 
232.16  subdivision 2, clause (4).  Any unspent amounts after completion 
232.17  of the project must be distributed as excess increments under 
232.18  Minnesota Statutes, section 469.176, subdivision 2, clause (4). 
232.19     (5) The authority to spend increments from district number 
232.20  1-1 other than money transferred to the account under clause (2) 
232.21  expires upon the day following final enactment of this act. 
232.22     Subd. 3.  [EFFECTIVE DATE.] This section is effective the 
232.23  day upon approval by the governing body of the city of Deephaven 
232.24  and compliance with Minnesota Statutes, section 645.021, 
232.25  subdivision 3, and applies to revenues expended after the date 
232.26  of final enactment. 
232.27     Sec. 17.  [CITY OF BURNSVILLE; ADMISSIONS TAX.] 
232.28     Subdivision 1.  [IMPOSITION.] Notwithstanding Minnesota 
232.29  Statutes, section 477A.016, or any other contrary provision of 
232.30  law or ordinance, the governing body of the city of Burnsville 
232.31  may by ordinance impose a tax on admissions to an amphitheater 
232.32  to be constructed within the city. 
232.33     Subd. 2.  [RATE.] The tax may be imposed at a rate not to 
232.34  exceed $2 per paid admission.  The governing body of the city 
232.35  may by ordinance change the rate imposed, subject to the 
232.36  limitation in this subdivision. 
233.1      Subd. 3.  [COLLECTION.] The method of collection of the tax 
233.2   must be specified in the ordinance imposing the tax.  The tax is 
233.3   exempt from the rules under Minnesota Statutes, section 
233.4   297A.48.  The commissioner of revenue and the city may enter 
233.5   into agreements for the collection and administration of the tax 
233.6   by the state on behalf of the city.  The commissioner may charge 
233.7   the city a reasonable fee for its services from the proceeds of 
233.8   the tax.  The tax is subject to the same interest, penalties, 
233.9   and enforcement provisions as the tax imposed under Minnesota 
233.10  Statutes, chapter 297A. 
233.11     Subd. 4.  [USE OF PROCEEDS.] The city must pay money 
233.12  received from the tax imposed under this section into a separate 
233.13  fund or account to be used only to pay: 
233.14     (1) the costs of imposing and collecting the tax; and 
233.15     (2) for parking lots or ramps, and other public 
233.16  improvements as defined by Minnesota Statutes, section 429.021, 
233.17  within the boundaries of the tax increment financing district 
233.18  established under section 18, or that serve the area within the 
233.19  district. 
233.20     Subd. 5.  [EFFECTIVE DATE.] This section is effective the 
233.21  day following final enactment. 
233.22     Sec. 18.  [CITY OF BURNSVILLE; TAX INCREMENT FINANCING 
233.23  DISTRICT.] 
233.24     Subdivision 1.  [AUTHORIZATION.] The governing body of the 
233.25  city of Burnsville may create a soils condition tax increment 
233.26  financing district, as provided in this section, for an 
233.27  amphitheater and related infrastructure improvements.  Except as 
233.28  otherwise provided in this section, the provisions of Minnesota 
233.29  Statutes, sections 469.174 to 469.179, apply to the district.  
233.30  The city or its economic development authority may be the 
233.31  "authority" for the purposes of Minnesota Statutes, sections 
233.32  469.174 to 469.179. 
233.33     Subd. 2.  [SPECIAL RULES.] (a) The district established 
233.34  under subdivision 1 is subject to the provisions of Minnesota 
233.35  Statutes, sections 469.174 to 469.179, except as provided in 
233.36  this subdivision. 
234.1      (b) The district may consist of all or any portion of the 
234.2   parcels designated by the city of Burnsville as development 
234.3   district No. 2 as of April 26, 1990. 
234.4      (c) Minnesota Statutes, sections 469.174, subdivision 19, 
234.5   and 469.176, subdivision 4b, do not apply to the district. 
234.6      (d) Upon approval of the tax increment financing plan, the 
234.7   governing body of the city of Burnsville must find that the 
234.8   present value of the projected cost of closure of the former 
234.9   solid waste landfill within the district equals or exceeds the 
234.10  present value of the projected tax increments for the maximum 
234.11  duration of the district permitted by the plan. 
234.12     (e) Notwithstanding the provisions of Minnesota Statutes, 
234.13  section 469.1763, increments from the district established under 
234.14  this section may only be expended on improvements and activities 
234.15  within or directly in aid of the district and on administrative 
234.16  expenses. 
234.17     (f) Notwithstanding the provisions of Minnesota Statutes, 
234.18  section 469.176, subdivision 1b, no tax increment may be paid to 
234.19  the authority after 18 years after receipt by the authority of 
234.20  the first increment for the district. 
234.21     Subd. 3.  [DISTRICT NO. 2-1.] Upon approval of the tax 
234.22  increment financing plan for the district created under 
234.23  subdivision 1, the city shall request decertification of tax 
234.24  increment financing district No. 2-1.  The balance of the tax 
234.25  increments derived from tax increment financing district No. 2-1 
234.26  may be expended under the tax increment financing plan for the 
234.27  district created under subdivision 1.  Minnesota Statutes, 
234.28  section 469.176, subdivision 4c, does not apply to the 
234.29  expenditures.  Minnesota Statutes, section 469.1782, subdivision 
234.30  1, does not apply to tax increment financing district No. 2-1 or 
234.31  the district created under subdivision 1. 
234.32     Subd. 4.  [EFFECTIVE DATE.] This section is effective upon 
234.33  compliance with Minnesota Statutes, sections 469.1782, 
234.34  subdivision 2, and 645.021, subdivision 2. 
234.35     Sec. 19.  [REDEVELOPMENT DISTRICT FOR LAKE STREET PROJECT.] 
234.36     Subdivision 1.  [AUTHORIZATION.] Upon approval of the 
235.1   governing body of the city of Minneapolis by resolution, the 
235.2   Minneapolis community development agency may establish for the 
235.3   Lake Street project a redevelopment tax increment financing 
235.4   district with phased redevelopment.  The district is subject to 
235.5   Minnesota Statutes, sections 469.174 to 469.179, as amended, 
235.6   except as provided in this section.  
235.7      Subd. 2.  [ORIGINAL NET TAX CAPACITY.] Notwithstanding 
235.8   Minnesota Statutes, section 469.174, subdivision 7, the original 
235.9   net tax capacity of the district, as of the date the authority 
235.10  certifies to the county auditor that the authority has entered 
235.11  into a redevelopment or other agreement for rehabilitation of 
235.12  the site or remediation of hazardous substances, is zero.  
235.13     Subd. 3.  [DURATION OF DISTRICT.] Notwithstanding the 
235.14  provisions of Minnesota Statutes, section 469.176, subdivision 
235.15  1b, no tax increment may be paid to the authority after 18 years 
235.16  from the date of receipt by the authority of the first increment 
235.17  generated from the final phase of redevelopment.  In no case may 
235.18  increments be paid to the authority after 30 years from approval 
235.19  of the tax increment plan.  "Final phase of redevelopment" means 
235.20  that phase of redevelopment activity which completes the 
235.21  rehabilitation of the Lake Street site.  
235.22     Subd. 4.  [REMOVAL OF HAZARDOUS SUBSTANCES.] For purposes 
235.23  of the three-year activity rule under Minnesota Statutes, 
235.24  section 469.176, subdivision 1a, and the four-year action 
235.25  requirement under Minnesota Statutes, section 469.176, 
235.26  subdivision 6, the removal of hazardous substances from the site 
235.27  shall constitute a qualifying activity.  
235.28     Subd. 5.  [FIVE-YEAR RULE.] The five-year period under 
235.29  Minnesota Statutes, section 469.1763, subdivision 3, is extended 
235.30  to ten years.  
235.31     Subd. 6.  [NO POOLING AUTHORITY.] Notwithstanding the 
235.32  provisions of Minnesota Statutes, section 469.1763, increments 
235.33  from the district established under this section may only be 
235.34  expended on improvements and activities within or directly in 
235.35  aid of the district and on administrative expenses related to 
235.36  the district. 
236.1      Subd. 7.  [EFFECTIVE DATE.] This section is effective upon 
236.2   compliance with Minnesota Statutes, sections 469.1782, 
236.3   subdivision 2, and 645.021, subdivision 2. 
236.4      Sec. 20.  [CITY OF WEST ST. PAUL; DAKOTA COUNTY HOUSING AND 
236.5   REDEVELOPMENT AUTHORITY; EXCEPTION TO TAX INCREMENT FINANCING 
236.6   REQUIREMENTS.] 
236.7      Subdivision 1.  [GENERALLY.] The city of West St. Paul and 
236.8   the Dakota county housing and redevelopment authority may 
236.9   operate the Signal Hills redevelopment tax increment financing 
236.10  district (Dakota county housing and redevelopment authority tax 
236.11  increment financing district No. 10) under the provisions of 
236.12  this section. 
236.13     Subd. 2.  [TIME LIMITS FOR INITIATING ACTION.] The time 
236.14  limits for initiation of activity in the district and reporting 
236.15  the initiation to the county auditor under Minnesota Statutes, 
236.16  section 469.176, subdivision 6, are extended to five and six 
236.17  years, respectively. 
236.18     Subd. 3.  [FIVE-YEAR RULE.] The district is subject to the 
236.19  requirement of Minnesota Statutes, section 469.1763, subdivision 
236.20  3, except that the five-year period is extended to a nine-year 
236.21  period. 
236.22     Subd. 4.  [THREE-YEAR RULE; EXCEPTION.] The district is 
236.23  subject to the provisions of Minnesota Statutes, section 
236.24  469.176, subdivision 1a, except that any references to three 
236.25  years in that subdivision are five years for purposes of this 
236.26  section. 
236.27     Subd. 5.  [POOLING EXCEPTION.] The city and the Dakota 
236.28  county housing and redevelopment authority may elect to increase 
236.29  the limit on the percentage of increments under Minnesota 
236.30  Statutes, section 469.1763, subdivision 2, that may be spent 
236.31  outside of the district to 40 percent, if all the amounts spent 
236.32  outside of the district, other than administrative expenses, are 
236.33  for improvements and activities within or directly in aid of the 
236.34  South Robert Street redevelopment tax increment financing 
236.35  district (Dakota county housing and redevelopment authority tax 
236.36  increment financing district No. 4). 
237.1      Subd. 6.  [EFFECTIVE DATE.] This section is effective upon 
237.2   approval by the governing bodies of the city of West St. Paul 
237.3   and Dakota county and upon compliance by the city with Minnesota 
237.4   Statutes, section 645.021, subdivision 3. 
237.5      Sec. 21.  [CITY OF RENVILLE; TAX INCREMENT FINANCING 
237.6   DISTRICT.] 
237.7      Subdivision 1.  [CERTIFICATION DATE.] Except as otherwise 
237.8   provided in this section, for purposes of Minnesota Statutes, 
237.9   section 273.1399, and chapter 469, the certification date of the 
237.10  addition of the following described property to tax increment 
237.11  financing district No. 1 in the city of Renville is deemed to be 
237.12  November 1, 1994:  Lots 5, 6, 7, 8, and 9, Block 32, O'Connor's 
237.13  Addition. 
237.14     Subd. 2.  [ORIGINAL NET TAX CAPACITY; ORIGINAL LOCAL TAX 
237.15  RATE.] The original net tax capacity of property in subdivision 
237.16  1 is $432. 
237.17     Subd. 3.  [EXPENDITURE OF INCREMENT.] Notwithstanding the 
237.18  provisions of Minnesota Statutes, section 469.176, subdivision 
237.19  1b, the city of Renville may collect and expend tax increment 
237.20  generated by the lots cited in subdivision 1, in tax increment 
237.21  financing district No. 1 in the city of Renville, until December 
237.22  31, 2003. 
237.23     Subd. 4.  [STATE AID OFFSET.] Minnesota Statutes, section 
237.24  469.1782, subdivision 1, does not apply to the extension allowed 
237.25  by this section. 
237.26     Subd. 5.  [EFFECTIVE DATE.] This section is effective upon 
237.27  compliance with Minnesota Statutes, sections 469.1782, 
237.28  subdivision 2, and 645.021, subdivision 3. 
237.29     Sec. 22.  [CITY OF FOLEY; TAX INCREMENT FINANCING.] 
237.30     Subdivision 1.  [EXPENDITURE AUTHORITY.] Notwithstanding 
237.31  any law to the contrary, expenditures by the city of Foley 
237.32  before January 1, 1998, of revenue derived from tax increment 
237.33  financing district number 1 to finance a wastewater treatment 
237.34  facility located outside of the district are authorized 
237.35  expenditures of that revenue.  
237.36     Subd. 2.  [CONDITIONS.] The authority to spend increment 
238.1   under subdivision 1 on the wastewater treatment facility is 
238.2   subject to the following conditions: 
238.3      (1) the city must request decertification of tax increment 
238.4   financing district number 1 by no later than December 31, 1998; 
238.5   and 
238.6      (2) any unspent increments and any increments collected 
238.7   after December 31, 1997, must be distributed under Minnesota 
238.8   Statutes, section 469.176, subdivision 2, clause (4). 
238.9      Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
238.10  local approval by the governing body of the city of Foley and 
238.11  compliance with Minnesota Statutes, section 645.021, subdivision 
238.12  3. 
238.13     Sec. 23.  [GARRISON; TAX INCREMENT FINANCING.] 
238.14     The reduction in state aid under Minnesota Statutes, 
238.15  section 273.1399, for the city of Garrison as a result of tax 
238.16  increment financing district number 1 does not apply for aids 
238.17  paid in fiscal years 1999 and 2000.  The aid reduction for 
238.18  fiscal years 1999 and 2000 must be deducted from aid payable to 
238.19  the city in the year or years after the remainder of the aid 
238.20  reduction for tax increment financing district number 1 has been 
238.21  made. 
238.22     Sec. 24.  [NEW BRIGHTON; TAX INCREMENT FINANCING.] 
238.23     Subdivision 1.  [SPECIAL RULES.] (a) If the city elects 
238.24  upon the adoption of the tax increment financing plan for the 
238.25  district, the rules under this section apply to redevelopment or 
238.26  soils condition tax increment financing districts established by 
238.27  the city of New Brighton or a development authority of the city 
238.28  in the area bounded on the north by the south boundary line of 
238.29  tax increment district number 8 extended to Long Lake regional 
238.30  park, on the east by interstate highway 35W, on the south by 
238.31  interstate highway 694, and on the west by Long Lake regional 
238.32  park. 
238.33     (b) The five-year rule under Minnesota Statutes, section 
238.34  469.1763, subdivision 3, is extended to nine years for the 
238.35  district. 
238.36     (c) The limitations on spending increment outside of the 
239.1   district under Minnesota Statutes, section 469.1763, subdivision 
239.2   2, do not apply, but increments may only be expended on 
239.3   improvements or activities within the area defined in paragraph 
239.4   (a). 
239.5      Subd. 2.  [EXPIRATION.] (a) The exception from the 
239.6   limitations of Minnesota Statutes, section 469.1763, subdivision 
239.7   2, expires 18 years after the receipt of the first increment 
239.8   from a district to which the city has elected that this section 
239.9   applies. 
239.10     (b) The authority to approve tax increment financing plans 
239.11  to establish a tax increment financing district under this 
239.12  section expires on December 31, 2008. 
239.13     Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
239.14  approval by the governing bodies of the city of New Brighton and 
239.15  Ramsey county and upon compliance by the city with Minnesota 
239.16  Statutes, section 645.021, subdivision 3. 
239.17     Sec. 25.  [MEEKER COUNTY; ECONOMIC DEVELOPMENT AUTHORITY; 
239.18  ESTABLISHMENT AND POWERS.] 
239.19     Subdivision 1.  [ESTABLISHMENT.] The board of county 
239.20  commissioners of Meeker county may establish an economic 
239.21  development authority in the manner provided in Minnesota 
239.22  Statutes, sections 469.090 to 469.1081, and may impose limits on 
239.23  the authority enumerated in Minnesota Statutes, section 469.092. 
239.24  The economic development authority has all of the powers and 
239.25  duties granted to or imposed upon economic development 
239.26  authorities under Minnesota Statutes, sections 469.090 to 
239.27  469.1081.  The county economic development authority may create 
239.28  and define the boundaries of economic development districts at 
239.29  any place or places within the county, provided that a project 
239.30  as recommended by the county authority that is to be located 
239.31  within the corporate limits of a city may not be commenced 
239.32  without the approval of the governing body of the city.  
239.33  Minnesota Statutes, section 469.174, subdivision 10, and the 
239.34  contiguity requirement specified under Minnesota Statutes, 
239.35  section 469.101, subdivision 1, do not apply to limit the areas 
239.36  that may be designated as county economic development districts. 
240.1      Subd. 2.  [POWERS.] If an economic development authority is 
240.2   established as provided in subdivision 1, the county may 
240.3   exercise all of the powers relating to an economic development 
240.4   authority granted to a city under Minnesota Statutes, sections 
240.5   469.090 to 469.1081, or other law, including the power to levy a 
240.6   tax to support the activities of the authority. 
240.7      Subd. 3.  [EFFECTIVE DATE.] This section is effective the 
240.8   day after the Meeker county board's approval is filed as 
240.9   provided in Minnesota Statutes, section 645.021, subdivision 3. 
240.10     Sec. 26.  [KITTSON COUNTY; ECONOMIC DEVELOPMENT AUTHORITY; 
240.11  ESTABLISHMENT AND POWERS.] 
240.12     Subdivision 1.  [ESTABLISHMENT.] The board of county 
240.13  commissioners of Kittson county may establish an economic 
240.14  development authority in the manner provided in Minnesota 
240.15  Statutes, sections 469.090 to 469.1081, and may impose limits on 
240.16  the authority enumerated in Minnesota Statutes, section 469.092. 
240.17  The economic development authority has all of the powers and 
240.18  duties granted to or imposed upon economic development 
240.19  authorities under Minnesota Statutes, sections 469.090 to 
240.20  469.1081.  The county economic development authority may create 
240.21  and define the boundaries of economic development districts at 
240.22  any place or places within the county, provided that a project 
240.23  as recommended by the county authority that is to be located 
240.24  within the corporate limits of a city may not be commenced 
240.25  without the approval of the governing body of the city.  
240.26  Minnesota Statutes, section 469.174, subdivision 10, and the 
240.27  contiguity requirement specified under Minnesota Statutes, 
240.28  section 469.101, subdivision 1, do not apply to limit the areas 
240.29  that may be designated as county economic development districts. 
240.30     Subd. 2.  [POWERS.] If an economic development authority is 
240.31  established as provided in subdivision 1, the county may 
240.32  exercise all of the powers relating to an economic development 
240.33  authority granted to a city under Minnesota Statutes, sections 
240.34  469.090 to 469.1081, or other law, including the power to levy a 
240.35  tax to support the activities of the authority. 
240.36     Subd. 3.  [EFFECTIVE DATE.] This section is effective the 
241.1   day after the Kittson county board's approval is filed as 
241.2   provided in Minnesota Statutes, section 645.021, subdivision 3. 
241.3      Sec. 27.  [BLUE EARTH COUNTY; ECONOMIC DEVELOPMENT 
241.4   AUTHORITY; ESTABLISHMENT AND POWERS.] 
241.5      Subdivision 1.  [ESTABLISHMENT.] The board of county 
241.6   commissioners of Blue Earth county may establish an economic 
241.7   development authority in the manner provided in Minnesota 
241.8   Statutes, sections 469.090 to 469.1081, and may impose limits on 
241.9   the authority enumerated in Minnesota Statutes, section 469.092. 
241.10  The economic development authority has all of the powers and 
241.11  duties granted to or imposed upon economic development 
241.12  authorities under Minnesota Statutes, sections 469.090 to 
241.13  469.1081.  The county economic development authority may create 
241.14  and define the boundaries of economic development districts at 
241.15  any place or places within the county, provided that a project 
241.16  as recommended by the county authority that is to be located 
241.17  within the corporate limits of a city may not be commenced 
241.18  without the approval of the governing body of the city.  
241.19  Minnesota Statutes, section 469.174, subdivision 10, and the 
241.20  contiguity requirement specified under Minnesota Statutes, 
241.21  section 469.101, subdivision 1, do not apply to limit the areas 
241.22  that may be designated as county economic development districts. 
241.23     Subd. 2.  [POWERS.] If an economic development authority is 
241.24  established as provided in subdivision 1, the county may 
241.25  exercise all of the powers relating to an economic development 
241.26  authority granted to a city under Minnesota Statutes, sections 
241.27  469.090 to 469.1081, or other law, including the power to levy a 
241.28  tax to support the activities of the authority. 
241.29     Subd. 3.  [HOUSING PROGRAMS.] The Blue Earth county 
241.30  economic development authority may exercise its authority for 
241.31  purposes of consolidating housing programs with the city of 
241.32  Mankato. 
241.33     Subd. 4.  [EFFECTIVE DATE.] This section is effective the 
241.34  day after the Blue Earth county board's approval is filed as 
241.35  provided in Minnesota Statutes, section 645.021, subdivision 3. 
241.36     Sec. 28.  [SPECIAL TAXING AUTHORITY; BROOKLYN CENTER.] 
242.1      Subdivision 1.  [AUTHORITY.] The city of Brooklyn Center 
242.2   may establish a special taxing district and impose a tax under 
242.3   Minnesota Statutes, section 469.1791, for the following 
242.4   described property within tax increment financing district No. 3 
242.5   in the city: 
242.6      All that property that is located within the area bounded 
242.7   by a continuous line beginning at a point at the intersection of 
242.8   county road No. 10 and trunk highway No. 100 and going 
242.9   southwesterly along the center line of trunk highway No. 100 to 
242.10  its intersection with Brooklyn Boulevard; thence northerly along 
242.11  the center line of Brooklyn Boulevard to a point 476.52 feet 
242.12  northerly of the intersection of Brooklyn Boulevard and county 
242.13  road No. 10; thence easterly from that point along a straight 
242.14  line to the center line of Shingle Creek; thence southerly along 
242.15  the center line of Shingle Creek to its intersection with the 
242.16  north right-of-way line of county road No. 10; thence easterly 
242.17  along the north right-of-way line of county road No. 10 to the 
242.18  east right-of-way line of Shingle Creek Parkway; thence 
242.19  northerly along the west property line of lot 2, block 2, 
242.20  Brookdale square addition 165.43 feet; thence northeasterly 
242.21  along the northwest property line of lot 2, block 2, Brookdale 
242.22  square addition 297.73 feet; thence easterly along the north 
242.23  property line of lot 2, block 2, Brookdale square addition 
242.24  914.34 feet; thence southerly 517.9 feet along the easterly 
242.25  property line of lot 2, block 2, Brookdale square addition 
242.26  extended to the center line of county road No. 10; thence 
242.27  easterly along the center line of county road No. 10 to the 
242.28  point of the beginning. 
242.29     Subd. 2.  [EXCEPTIONS FROM GENERAL LAW.] The following 
242.30  requirements under general law do not apply to a special taxing 
242.31  district created under this section: 
242.32     (1) the preconditions for establishing a special taxing 
242.33  district under Minnesota Statutes, section 469.1791, subdivision 
242.34  3; 
242.35     (2) the authority to file written objections under 
242.36  Minnesota Statutes, section 469.1791, subdivision 5, and to 
243.1   appeal to the district court under Minnesota Statutes, section 
243.2   469.1791, subdivision 6; and 
243.3      (3) the limits on the maximum levy and the use of the 
243.4   proceeds under Minnesota Statutes, section 469.1791, subdivision 
243.5   9. 
243.6      Subd. 3.  [RESTRICTIONS.] The authority to impose the tax 
243.7   under this section is limited to property that is subject to an 
243.8   assessment agreement with the city or its economic development 
243.9   authority under Minnesota Statutes, section 469.177, subdivision 
243.10  8, as of the date of adoption of the enabling ordinance.  The 
243.11  maximum levy may not exceed the amount specified in the 
243.12  assessment agreement. 
243.13     Subd. 4.  [EFFECTIVE DATE.] This section is effective upon 
243.14  compliance by the city of Brooklyn Center with Minnesota 
243.15  Statutes, section 645.021, subdivision 3. 
243.16     Sec. 29.  [EFFECTIVE DATE.] 
243.17     Sections 1, 5, and 7 apply to tax increment financing 
243.18  districts certified on, before, and after August 1, 1979. 
243.19     Sections 2, 3, 4, and 8 are effective for disclosures 
243.20  required to be made and reports required to be submitted 
243.21  beginning in 1999. 
243.22     Section 6 is effective for tax increment financing 
243.23  districts for which the request for certification is made after 
243.24  April 30, 1998. 
243.25     Section 9 is effective the day following final enactment 
243.26  and applies to tax increment financing districts certified on, 
243.27  before, and after August 1, 1979. 
243.28     Section 10 is effective beginning for taxes payable in 1999.
243.29     Section 11 is effective upon compliance by Itasca county 
243.30  with Minnesota Statutes, section 645.021, subdivision 3. 
243.31     Section 12 is effective upon compliance by Koochiching 
243.32  county with Minnesota Statutes, section 645.021, subdivision 3. 
243.33                             ARTICLE 12 
243.34                         BORDER CITY ZONES 
243.35     Section 1.  [272.0212] [BORDER DEVELOPMENT ZONE PROPERTY.] 
243.36     Subdivision 1.  [EXEMPTION.] All qualified property in a 
244.1   zone is exempt to the extent and for the duration provided by 
244.2   the zone designation and under sections 469.1731 to 469.1735. 
244.3      Subd. 2.  [LIMITS ON EXEMPTION.] Property in a zone is not 
244.4   exempt under this section from the following: 
244.5      (1) special assessments; 
244.6      (2) ad valorem property taxes specifically levied for the 
244.7   payment of principal and interest on debt obligations; and 
244.8      (3) all taxes levied by a school district, except equalized 
244.9   school levies as defined in section 273.1398, subdivision 1, 
244.10  paragraph (e). 
244.11     Subd. 3.  [STATE AID.] Property exempt under this section 
244.12  is included in the net tax capacity for purposes of computing 
244.13  aids under chapter 477A. 
244.14     Subd. 4.  [DEFINITIONS.] (a) For purposes of this section, 
244.15  the following terms have the meanings given. 
244.16     (b) "Qualified property" means class 3 and class 5 property 
244.17  as defined in section 273.13 that is located in a zone and is 
244.18  newly constructed after the zone was designated, including the 
244.19  land that contains the improvements. 
244.20     (c) "Zone" means a border city development zone designated 
244.21  under the provisions of section 469.1731. 
244.22     Subd. 5.  [FINDING REQUIRED.] The exemption under this 
244.23  section is available to a parcel only if the municipality 
244.24  determines that the granting of the tax exemption is necessary 
244.25  to enable a business to expand within a zone or to attract a 
244.26  business to a zone.  
244.27     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
244.28  469.169, subdivision 11, is amended to read: 
244.29     Subd. 11.  [ADDITIONAL BORDER CITY ALLOCATIONS.] In 
244.30  addition to tax reductions authorized in subdivisions 7, 8, 9, 
244.31  and 10, the commissioner may allocate $1,500,000 for tax 
244.32  reductions to border city enterprise zones in cities located on 
244.33  the western border of the state.  The commissioner shall make 
244.34  allocations to zones in cities on the western border on a per 
244.35  capita basis.  Allocations made under this subdivision may be 
244.36  used for tax reductions as provided in section 469.171, or other 
245.1   offsets of taxes imposed on or remitted by businesses located in 
245.2   the enterprise zone, but only if the municipality determines 
245.3   that the granting of the tax reduction or offset is necessary in 
245.4   order to retain a business within or attract a business to the 
245.5   zone.  Limitations on allocations under section 469.169, 
245.6   subdivision 7, do not apply to this allocation.  Enterprise 
245.7   zones that receive allocations under this subdivision may 
245.8   continue in effect for purposes of those allocations through 
245.9   December 31, 1998. 
245.10     Sec. 3.  Minnesota Statutes 1996, section 469.169, is 
245.11  amended by adding a subdivision to read: 
245.12     Subd. 12.  [ADDITIONAL ZONE ALLOCATIONS.] In addition to 
245.13  tax reductions authorized in subdivisions 7, 8, 9, 10, and 11, 
245.14  the commissioner shall allocate tax reductions to border city 
245.15  enterprise zones located on the western border of the state.  
245.16  The cumulative total amount of tax reductions for all years of 
245.17  the program under sections 469.1731 to 469.1735, is limited to: 
245.18     (1) for the city of Breckenridge, $394,000; 
245.19     (2) for the city of Dilworth, $118,200; 
245.20     (3) for the city of East Grand Forks, $788,000; 
245.21     (4) for the city of Moorhead, $591,000; and 
245.22     (5) for the city of Ortonville, $78,800. 
245.23     Allocations made under this subdivision may be used for tax 
245.24  reductions provided in section 469.1732 or 469.1734 or for 
245.25  reimbursements under section 469.1735, subdivision 3, but only 
245.26  if the municipality determines that the granting of the tax 
245.27  reduction or offset is necessary to enable a business to expand 
245.28  within a city or to attract a business to a city.  Limitations 
245.29  on allocations under subdivision 7 do not apply to this 
245.30  allocation. 
245.31     Sec. 4.  Minnesota Statutes 1996, section 469.170, is 
245.32  amended by adding a subdivision to read: 
245.33     Subd. 5e.  [LIMITS ON MULTIYEAR PLANS.] The requirements 
245.34  for a multiyear enterprise zone tax credit distribution plan 
245.35  under subdivisions 5a to 5d apply only for: 
245.36     (1) each business that will receive more than $25,000 in 
246.1   credits in a year; or 
246.2      (2) tax reductions under section 469.171, subdivision 1, 
246.3   for businesses in areas designated under section 469.171, 
246.4   subdivision 5. 
246.5      Sec. 5.  Minnesota Statutes 1996, section 469.171, 
246.6   subdivision 9, is amended to read: 
246.7      Subd. 9.  [RECAPTURE.] Any business that (1) receives tax 
246.8   reductions authorized by subdivisions 1 to 8, classification as 
246.9   employment property pursuant to section 469.170, or an 
246.10  alternative local contribution under section 469.169, 
246.11  subdivision 5; and (2) ceases to operate its facility located 
246.12  within the enterprise zone within two years after the expiration 
246.13  of the tax reductions shall repay the amount of the tax 
246.14  reduction or local contribution pursuant to the following 
246.15  schedule:  
246.16        Termination                                   Repayment
246.17        of operations                                   Portion
246.18        Less than 6 months                            100 percent
246.19        6 months or more but less than 12 months       75 percent
246.20        12 months or more but less than 18 months      50 percent
246.21        18 months or more but less than 24 months      25 percent
246.22  received during the two years immediately before it ceased to 
246.23  operate in the zone. 
246.24     The repayment must be paid to the state to the extent it 
246.25  represents a tax reduction under subdivisions 1 to 8 and to the 
246.26  municipality to the extent it represents a property tax 
246.27  reduction or other local contribution.  Any amount repaid to the 
246.28  state must be credited to the amount certified as available for 
246.29  tax reductions in the zone pursuant to section 469.169, 
246.30  subdivision 7.  Any amount repaid to the municipality must be 
246.31  used by the municipality for economic development purposes.  The 
246.32  commissioner of revenue may seek repayment of tax credits from a 
246.33  business ceasing to operate within an enterprise zone by 
246.34  utilizing any remedies available for the collection of tax.  
246.35     Sec. 6.  [469.1731] [BORDER CITY DEVELOPMENT ZONES.] 
246.36     Subdivision 1.  [DESIGNATION.] To encourage economic 
247.1   development, to revitalize the designated areas, to expand tax 
247.2   base and economic activity, and to provide job creation, growth, 
247.3   and retention, the following border cities may designate, by 
247.4   resolution, areas of the city as development zones after a 
247.5   public hearing upon 30-day notice. 
247.6      (a) The city of Breckenridge may designate all or any part 
247.7   of the city as a zone. 
247.8      (b) The city of Dilworth may designate between one and six 
247.9   areas of the city as zones containing not more than 100 acres in 
247.10  the aggregate. 
247.11     (c) The city of East Grand Forks may designate all or any 
247.12  part of the city as a zone. 
247.13     (d) The city of Moorhead may designate between one and six 
247.14  areas of the city as zones containing not more than 100 acres in 
247.15  the aggregate. 
247.16     (e) The city of Ortonville may designate between one and 
247.17  six areas of the city as zones containing not more than 100 
247.18  acres in the aggregate. 
247.19     Subd. 2.  [DEVELOPMENT PLAN.] (a) Before designating a 
247.20  development zone, the city must adopt a written development plan 
247.21  that addresses: 
247.22     (1) evidence of adverse economic conditions within the area 
247.23  resulting from competition with the bordering state or the 1997 
247.24  floods or both; 
247.25     (2) the viability of the development plan; 
247.26     (3) public and private commitment to and other resources 
247.27  available for the area; 
247.28     (4) how designation would relate to a development and 
247.29  revitalization plan for the city as a whole; and 
247.30     (5) how the local regulatory burden will be eased for 
247.31  businesses operating in the area. 
247.32     (b) The development plan must include: 
247.33     (1) a map of the proposed zone that indicates the 
247.34  geographic boundaries, the total area, and the present use and 
247.35  conditions generally of land and structures within the area; 
247.36     (2) evidence of community support and commitment from 
248.1   business interests; 
248.2      (3) a description of the methods proposed to increase 
248.3   economic opportunity and expansion, facilitate infrastructure 
248.4   improvement, and identify job opportunities; and 
248.5      (4) the duration of the zone designation, not to exceed 15 
248.6   years. 
248.7      Subd. 3.  [FILING.] The city must file a copy of the 
248.8   resolution and development plan with the commissioner of trade 
248.9   and economic development.  The designation takes effect for the 
248.10  first calendar year that begins more than 90 days after the 
248.11  filing. 
248.12     Sec. 7.  [469.1732] [TAX INCENTIVES WITHIN DEVELOPMENT 
248.13  ZONES.] 
248.14     Subdivision 1.  [AUTHORITY.] A business that conducts 
248.15  business activity within a border city development zone 
248.16  designated under section 469.1731 may qualify for the property 
248.17  tax exemption under section 272.0212, the corporate franchise 
248.18  tax credit under subdivision 2, and the sales tax exemption 
248.19  under section 469.1734, subdivision 6. 
248.20     Subd. 2.  [BORDER CITY ZONE CREDIT.] (a) A corporation may 
248.21  claim a credit against the tax imposed by sections 290.02, 
248.22  290.0921, and 290.0922, subdivision 1, paragraph (a).  The 
248.23  commissioner of revenue shall prescribe the method in which the 
248.24  credit may be claimed.  This may include allowing the credit 
248.25  only as a separately processed claim for refund. The allowable 
248.26  credit is based on the tax liability attributable to business 
248.27  conducted within a zone, and may be equal to all or a portion of 
248.28  that liability, as determined by the city. 
248.29     (b) "Tax liability" means the tax liability under sections 
248.30  290.02, 290.0921, and 290.0922, subdivision 1, paragraph (a), 
248.31  after any other credits. 
248.32     (c) The tax liability attributable to business conducted 
248.33  within a zone means the taxpayer's tax liability multiplied by a 
248.34  fraction: 
248.35     (1) the numerator of which is: 
248.36     (i) the ratio of the taxpayer's property factor under 
249.1   section 290.191 located in the border city development zone, for 
249.2   the taxable year over the property factor denominator determined 
249.3   under section 290.191, plus 
249.4      (ii) the ratio of the taxpayer's payroll factor under 
249.5   section 290.191 located in the border city development zone, for 
249.6   the taxable year over the payroll factor denominator determined 
249.7   under section 290.191; and 
249.8      (2) the denominator of which is two. 
249.9      (d) Any portion of the taxpayer's tax liability that is 
249.10  attributable to illegal activity conducted in the zone must not 
249.11  be used to calculate a credit under this subdivision. 
249.12     (e) The credit allowed under this subdivision continues 
249.13  through the taxable year in which the zone designation expires. 
249.14     (f) To be eligible for a credit under this subdivision, the 
249.15  taxpayer must file an annual return under chapter 290. 
249.16     (g) The credit allowed under this subdivision may not 
249.17  exceed the lesser of: 
249.18     (1) the tax liability of the taxpayer for the taxable year; 
249.19  or 
249.20     (2) the amount of the tax credit certificates received by 
249.21  the taxpayer from the city, less any tax credit certificates 
249.22  used under section 469.1734, subdivisions 4, 5, and 6. 
249.23     Subd. 3.  [PHASEOUT AT END OF ZONE DURATION.] During the 
249.24  last three years of the duration of a border city development 
249.25  zone, the available exemptions, subtractions, or credits are 
249.26  reduced by the following percentages for the taxes payable year 
249.27  or the taxable years that begin during: 
249.28     (1) the calendar year that is two years before the final 
249.29  year of designation as a development zone, 25 percent; 
249.30     (2) the calendar year that is immediately before the final 
249.31  year of designation as a development zone, 50 percent; and 
249.32     (3) for the final calendar year of designation as a 
249.33  development zone, 75 percent. 
249.34     Sec. 8.  [469.1733] [DISQUALIFIED TAXPAYERS.] 
249.35     Subdivision 1.  [DELINQUENT TAXPAYERS.] An individual or a 
249.36  business is not eligible for the exemptions or credits available 
250.1   under section 272.0212, 469.1732, or 469.1734, if the individual 
250.2   or business owes delinquent amounts under chapter 290, 296, 297, 
250.3   297A, 297B, or 297C or if the individual or business owns 
250.4   property located in the city or county in which the zone is 
250.5   located on which the property taxes are delinquent.  Delinquency 
250.6   is determined as of the date of the application for a 
250.7   certificate under section 469.1735, subdivision 1.  As a 
250.8   condition of receiving a certificate, the individual or business 
250.9   must authorize the department of revenue to disclose information 
250.10  necessary to make the determination under this subdivision 
250.11  notwithstanding any provision of chapter 270B or other law to 
250.12  the contrary. 
250.13     Subd. 2.  [RELOCATION WITHIN COUNTY.] If a business located 
250.14  in the county in which the border city development zone is 
250.15  located relocates from outside a zone into a zone, the business 
250.16  is not eligible for the exemptions or credits available in the 
250.17  border city development zone, unless the governing body of the 
250.18  city, for a business located in an incorporated area, or the 
250.19  county, for a business located outside of an incorporated area, 
250.20  approves the relocation of the business. 
250.21     Subd. 3.  [RELOCATION FROM OUTSIDE COUNTY.] (a) If a 
250.22  business relocates more than 25 full-time equivalent jobs from a 
250.23  location in Minnesota outside of the county in which the zone is 
250.24  located, the business must notify the commissioner of trade and 
250.25  economic development and the city and county governments from 
250.26  which the jobs are being relocated.  A business may satisfy the 
250.27  notification requirement by notifying the commissioner of trade 
250.28  and economic development, the city, and county of its intent to 
250.29  transfer jobs to a zone before actually doing so.  The business 
250.30  is not eligible for the exemptions and credits available in the 
250.31  border city development zone, if the governing body of the city 
250.32  or county from which the jobs are being relocated adopts a 
250.33  resolution objecting to the relocation within 60 days after its 
250.34  receipt of the notice. 
250.35     (b) The business becomes eligible for the exemptions and 
250.36  credits available in the zone when each city and county that 
251.1   objected to the relocation rescinds its objection by resolution. 
251.2      (c) A city or county that objects to the relocation of jobs 
251.3   must file a copy of the resolution with the commissioner of 
251.4   trade and economic development and the city that created the 
251.5   border city development zone into which the jobs were or intend 
251.6   to be transferred. 
251.7      Sec. 9.  [469.1734] [TAX INCENTIVES OUTSIDE ZONES.] 
251.8      Subdivision 1.  [AUTHORITY.] A city with authority to 
251.9   establish a border city development zone under section 469.1731 
251.10  may grant the tax incentives provided by this section.  This 
251.11  authority applies only to projects located outside of a zone, 
251.12  except as provided in subdivision 6. 
251.13     Subd. 2.  [DEFINITIONS.] For purposes of this section, 
251.14  "qualifying business" means the business conducted by a 
251.15  corporation, partnership, or individual doing business from a 
251.16  fixed location within the border city but located outside of the 
251.17  border city development zone. 
251.18     Subd. 3.  [PROPERTY TAX.] (a) A city may grant a partial or 
251.19  complete exemption from property taxation of all buildings, 
251.20  structures, fixtures, and improvements used in or necessary to a 
251.21  qualifying business for a period not exceeding five taxes 
251.22  payable years.  A partial exemption must be stated as a 
251.23  percentage of the total ad valorem taxes assessed against the 
251.24  property. 
251.25     (b) In addition to, or in lieu of, a property tax exemption 
251.26  under paragraph (a), a city may establish an amount due as 
251.27  payments in lieu of ad valorem taxes on buildings, structures, 
251.28  fixtures, and improvements used by the qualifying business.  The 
251.29  city council shall designate the amount of the payments for each 
251.30  year and the beginning year and the concluding year for payments 
251.31  in lieu of taxes.  The option to make payments in lieu of taxes 
251.32  under this section is limited to 20 consecutive taxes payable 
251.33  years for any qualifying business.  To establish the amount of 
251.34  payments in lieu of taxes, the city council may use actual or 
251.35  estimated levels of assessment and taxation or may designate 
251.36  different amounts of payments in lieu of other taxes in 
252.1   different years to recognize future expansion plans of a 
252.2   qualifying business or other considerations.  The payments in 
252.3   lieu shall be collected and distributed in the same manner as ad 
252.4   valorem taxes. 
252.5      (c) The city council must determine whether granting the 
252.6   exemption or payments in lieu of taxes, or both, is necessary to 
252.7   enable a business to expand in the city or to attract a business 
252.8   to the city and is in the best interest of the city.  If it so 
252.9   determines, the city must give its approval. 
252.10     Subd. 4.  [INCOME TAX.] (a) Upon application by the 
252.11  qualifying business to the city, and approval of the city, a 
252.12  qualifying business shall receive a credit against taxes imposed 
252.13  under chapter 290, other than the tax imposed under section 
252.14  290.92, based on the taxable net income of the qualified 
252.15  business attributable to the border city, but outside the border 
252.16  city development zone, multiplied by 9.8 percent in the case of 
252.17  a taxpayer under section 290.02, and 8.5 percent in the case of 
252.18  a taxpayer taxable under section 290.06, subdivision 2c.  The 
252.19  attributable net income of a qualified business in the border 
252.20  city is determined by multiplying the taxable net income of the 
252.21  business entity, determined as if the business were a C 
252.22  corporation, by a fraction: 
252.23     (1) the numerator of which is: 
252.24     (i) the ratio of the taxpayer's property factor under 
252.25  section 290.191 located in the border city, but outside of the 
252.26  border city development zone, for the taxable year over the 
252.27  property factor denominator determined under section 290.191, 
252.28  plus 
252.29     (ii) the ratio of the taxpayer's payroll factor under 
252.30  section 290.191 located in the border city, but outside of the 
252.31  border city development zone, for the taxable year over the 
252.32  payroll factor denominator determined under section 290.191; and 
252.33     (2) the denominator of which is two. 
252.34     (b) The credit under this subdivision applies after any 
252.35  credit allowed under subdivision 5. 
252.36     (c) After any notice period required by subdivision 7, the 
253.1   city council must determine whether granting the credit is in 
253.2   the best interest of the city, and if it so determines, must 
253.3   approve the granting of the credit and determine its amount. 
253.4      (d) The credit under this subdivision may not exceed the 
253.5   amount of the tax credit certificates received by the taxpayer 
253.6   from the city, less any tax credit certificates used under 
253.7   section 469.1732, subdivision 2, and subdivisions 5 and 6. 
253.8      (e) No taxpayer may receive the credit under this 
253.9   subdivision for more than five taxable years. 
253.10     Subd. 5.  [BORDER CITY NEW INDUSTRY CREDIT.] (a) To provide 
253.11  a tax incentive for new industry in border cities, a corporation 
253.12  may be allowed a credit against the tax imposed by section 
253.13  290.02.  The commissioner shall prescribe the method in which 
253.14  the credit may be claimed.  This may include allowing the credit 
253.15  only as a separately processed claim for refund. 
253.16     (b) The credit equals one percent of the wages and salaries 
253.17  paid by the taxpayer during the taxable year for employees whose 
253.18  principal place of work is located in a border city but outside 
253.19  of a zone designated under section 469.1731.  The credit applies 
253.20  for the first three taxable years of the operation of the 
253.21  corporation in the border city.  In the fourth and fifth taxable 
253.22  years of the operation of the corporation in the border city, 
253.23  the credit equals 0.5 percent of the wages and salaries.  After 
253.24  the fifth year, no credit is allowed.  The city shall determine 
253.25  the amount of wages that qualify for the credit and issue tax 
253.26  credit certificates in the correct amount. 
253.27     (c) The credit under this subdivision applies only to a 
253.28  corporate enterprise engaged in assembling, fabricating, 
253.29  manufacturing, mixing, or processing of any agricultural, 
253.30  mineral, or manufactured product or combinations of them. 
253.31     (d) The credit allowed under this subdivision may not 
253.32  exceed the lesser of: 
253.33     (1) the tax liability of the taxpayer for the taxable year; 
253.34  or 
253.35     (2) the amount of the tax credit certificates received by 
253.36  the taxpayer from the city, less any tax credit certificates 
254.1   used under subdivisions 4 and 6, and section 469.1732, 
254.2   subdivision 2. 
254.3      Subd. 6.  [SALES TAX EXEMPTION; EQUIPMENT; CONSTRUCTION 
254.4   MATERIALS.] (a) The gross receipts from the sale of machinery 
254.5   and equipment and repair parts are exempt from taxation under 
254.6   chapter 297A, if the machinery and equipment: 
254.7      (1) are used in connection with a trade or business; 
254.8      (2) are placed in service in a city that is authorized to 
254.9   designate a zone under section 469.1731, regardless of whether 
254.10  the machinery and equipment are used in a zone; and 
254.11     (3) have a useful life of 12 months or more. 
254.12     (b) The gross receipts from the sale of construction 
254.13  materials are exempt, if they are used to construct a facility 
254.14  for use in a trade or business located in a city that is 
254.15  authorized to designate a zone under section 469.1731, 
254.16  regardless of whether the facility is located in a zone.  The 
254.17  exemptions under this paragraph apply regardless of whether the 
254.18  purchase is made by the owner, the user, or a contractor. 
254.19     (c) A purchaser may claim an exemption under this 
254.20  subdivision for tax on the purchases up to, but not exceeding: 
254.21     (1) the amount of the tax credit certificates received from 
254.22  the city, less 
254.23     (2) any tax credit certificates used under the provisions 
254.24  of subdivisions 4 and 5, and 469.1732, subdivision 2. 
254.25     (d) The tax on sales of items exempted under this 
254.26  subdivision shall be imposed and collected as if the applicable 
254.27  rate under section 297A.02 applied.  Upon application by the 
254.28  purchaser, on forms prescribed by the commissioner, a refund 
254.29  equal to the tax paid shall be paid to the purchaser.  The 
254.30  application must include sufficient information to permit the 
254.31  commissioner to verify the sales tax paid and the eligibility of 
254.32  the claimant to receive the credit.  No more than two 
254.33  applications for refunds may be filed under this subdivision in 
254.34  a calendar year.  The provisions of section 289A.40 apply to the 
254.35  refunds payable under this subdivision.  There is annually 
254.36  appropriated to the commissioner of revenue the amount required 
255.1   to make the refunds, which must be deducted from the amount of 
255.2   the city's allocation under section 469.169, subdivision 12, 
255.3   that remains available and its limitation under section 469.1735.
255.4   The amount to be refunded shall bear interest at the rate in 
255.5   section 270.76 from the date the refund claim is filed with the 
255.6   commissioner. 
255.7      Subd. 7.  [NOTICE TO COMPETITORS.] (a) Before an exemption 
255.8   or other concession is granted under subdivision 3 or 4, the 
255.9   procedure under this subdivision applies. 
255.10     (b) Unless the city council determines that no existing 
255.11  business within the city would be a potential competitor of the 
255.12  project, the project operator shall publish two notices to 
255.13  competitors of the application of the tax exemption or payments 
255.14  in lieu in the official newspaper of the city.  The city shall 
255.15  prescribe the form of the notice.  The two notices must be 
255.16  published at least one week apart.  The publications must be 
255.17  completed not less than 15 days nor more than 30 days before the 
255.18  city council approves the tax exemption or payments in lieu of 
255.19  taxes. 
255.20     Sec. 10.  [469.1735] [LIMIT ON TAX REDUCTIONS; APPLICATIONS 
255.21  REQUIRED.] 
255.22     Subdivision 1.  [BUSINESSES MUST APPLY.] To claim a tax 
255.23  credit under section 469.1732, subdivision 2, or 469.1734, 
255.24  subdivision 4 or 5, or an exemption from sales tax under section 
255.25  469.1734, subdivision 6, a business must apply to the city for a 
255.26  tax credit certificate.  As a condition of its application, the 
255.27  business must agree to furnish information to the city that is 
255.28  sufficient to verify the eligibility for any credits or other 
255.29  tax reductions claimed.  The total amount of the state tax 
255.30  reductions allowed for the specified period may not exceed the 
255.31  amount of the tax credit certificates provided by the city to 
255.32  the business.  The city must verify the amount of tax reduction 
255.33  or credits for which each business is eligible. 
255.34     Subd. 2.  [CITY LIMITATIONS.] (a) Each city may provide tax 
255.35  credit certificates to businesses that apply and meet the 
255.36  requirements for the tax credit and exemption.  The certificates 
256.1   that each city may provide for the period covered by this 
256.2   section is limited to the amount specified in this subdivision.  
256.3      (b) The maximum amount of tax credit certificates each city 
256.4   may issue over the duration of the program equals the amount of 
256.5   the allocation to the city under section 469.169, subdivision 12.
256.6      Subd. 3.  [TRANSFER AUTHORITY FOR PROPERTY TAX.] (a) A city 
256.7   may elect to use all or part of its allocation under subdivision 
256.8   2 to reimburse the city or county or both for property tax 
256.9   reductions under section 272.0212.  To elect this option, the 
256.10  city must notify the commissioner of revenue by October 1 of 
256.11  each calendar year of the amount of the property tax reductions 
256.12  it seeks reimbursements for taxes payable during the following 
256.13  year and the governmental units to which the amounts will be 
256.14  paid.  The commissioner may require the city to provide 
256.15  information substantiating the amount of the reductions granted 
256.16  or any other information necessary to administer this 
256.17  provision.  The commissioner shall pay the reimbursements by 
256.18  December 26.  Any amount transferred under this authority 
256.19  reduces the amount of tax credit certificates available under 
256.20  subdivisions 1 and 2. 
256.21     (b) The amount elected by the city under paragraph (a) is 
256.22  appropriated to the commissioner of revenue from the general 
256.23  fund to reimburse the city or county for tax reductions under 
256.24  section 272.0212.  The amount appropriated may not exceed the 
256.25  maximum amounts allocated to a city under subdivision 2, 
256.26  paragraph (b), less the amount of certificates issued by the 
256.27  city under subdivision 1, and is available until expended.  
256.28     Sec. 11.  [EFFECTIVE DATE.] 
256.29     Sections 1, 2, and 6 to 10 are effective the day following 
256.30  final enactment, provided that sections 7, subdivision 2, and 9, 
256.31  subdivisions 4 and 5, are effective for taxable years beginning 
256.32  after December 31, 1998. 
256.33     Section 4 is effective for plans required to be filed after 
256.34  the day following final enactment, regardless of whether the 
256.35  business received a credit and was required to file a plan in a 
256.36  prior year. 
257.1      Section 5 is effective for tax reductions received 
257.2   beginning in the first calendar year after the day following 
257.3   final enactment. 
257.4                              ARTICLE 13
257.5                             GAMING TAXES
257.6      Section 1.  Minnesota Statutes 1996, section 240.15, 
257.7   subdivision 1, is amended to read: 
257.8      Subdivision 1.  [TAXES IMPOSED.] (a) From July 1, 1996, 
257.9   until July 1, 1999, There is imposed a tax at the rate of six 
257.10  percent of the amount in excess of $12,000,000 annually withheld 
257.11  from all pari-mutuel pools by the licensee, including breakage 
257.12  and amounts withheld under section 240.13, subdivision 4.  After 
257.13  June 30, 1999, the tax is imposed on the total amount withheld 
257.14  from all pari-mutuel pools.  For the purpose of this 
257.15  subdivision, "annually" is the period from July 1 to June 30 of 
257.16  the next year. 
257.17     In addition to the above tax, the licensee must designate 
257.18  and pay to the commission a tax of one percent of the total 
257.19  amount bet on each racing day, for deposit in the Minnesota 
257.20  breeders fund.  
257.21     The taxes imposed by this clause must be paid from the 
257.22  amounts permitted to be withheld by a licensee under section 
257.23  240.13, subdivision 4.  
257.24     (b) The commission may impose an admissions tax of not more 
257.25  than ten cents on each paid admission at a licensed racetrack on 
257.26  a racing day if:  
257.27     (1) the tax is requested by a local unit of government 
257.28  within whose borders the track is located; 
257.29     (2) a public hearing is held on the request; and 
257.30     (3) the commission finds that the local unit of government 
257.31  requesting the tax is in need of its revenue to meet 
257.32  extraordinary expenses caused by the racetrack. 
257.33     Sec. 2.  Minnesota Statutes 1996, section 240.15, 
257.34  subdivision 5, is amended to read: 
257.35     Subd. 5.  [UNREDEEMED TICKETS.] (a) Notwithstanding any 
257.36  provision to the contrary in chapter 345, unredeemed pari-mutuel 
258.1   tickets shall not be considered unclaimed funds and shall be 
258.2   handled in accordance with the provisions of this subdivision.  
258.3      (b) Until the end of calendar year 1999, Any person 
258.4   claiming to be entitled to the proceeds of any unredeemed ticket 
258.5   may within one year after the conclusion of each race meet file 
258.6   with the licensee a verified claim for such proceeds on such 
258.7   form as the licensee prescribes along with the pari-mutuel 
258.8   ticket.  Unless the claimant satisfactorily establishes the 
258.9   right to the proceeds, the claim shall be rejected.  If the 
258.10  claim is allowed, the licensee shall pay the proceeds without 
258.11  interest to the claimant.  
258.12     (c) Beginning January 1, 2000, not later than 100 days 
258.13  after the end of a race meet a licensee who sells pari-mutuel 
258.14  tickets must remit to the commission or its representative an 
258.15  amount equal to the total value of unredeemed tickets from the 
258.16  race meet.  The remittance must be accompanied by a detailed 
258.17  statement of the money on a form the commission prescribes.  Any 
258.18  person claiming to be entitled to the proceeds of any unredeemed 
258.19  ticket who fails to claim said proceeds prior to their being 
258.20  remitted to the commission, may within one year after the date 
258.21  of remittance to the commission file with the commission a 
258.22  verified claim for such proceeds on such form as the commission 
258.23  prescribes along with the pari-mutuel ticket.  Unless the 
258.24  claimant satisfactorily establishes the right to the proceeds, 
258.25  the claim shall be rejected.  If the claim is allowed, the 
258.26  commission shall pay the proceeds without interest to the 
258.27  claimant.  There is hereby appropriated from the general fund to 
258.28  the commission an amount sufficient to make payment to persons 
258.29  entitled to such proceeds. 
258.30     Sec. 3.  Minnesota Statutes 1996, section 297E.02, 
258.31  subdivision 1, is amended to read: 
258.32     Subdivision 1.  [IMPOSITION.] A tax is imposed on all 
258.33  lawful gambling other than (1) pull-tabs purchased and placed 
258.34  into inventory after January 1, 1987, and (2) tipboards 
258.35  purchased and placed into inventory after June 30, 1988, at the 
258.36  rate of ten 9.5 percent on the gross receipts as defined in 
259.1   section 297E.01, subdivision 8, less prizes actually paid.  The 
259.2   tax imposed by this subdivision is in lieu of the tax imposed by 
259.3   section 297A.02 and all local taxes and license fees except a 
259.4   fee authorized under section 349.16, subdivision 8, or a tax 
259.5   authorized under subdivision 5.  
259.6      The tax imposed under this subdivision is payable by the 
259.7   organization or party conducting, directly or indirectly, the 
259.8   gambling.  
259.9      Sec. 4.  Minnesota Statutes 1996, section 297E.02, 
259.10  subdivision 4, is amended to read: 
259.11     Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 
259.12  on the sale of each deal of pull-tabs and tipboards sold by a 
259.13  distributor.  The rate of the tax is two 1.9 percent of the 
259.14  ideal gross of the pull-tab or tipboard deal.  The sales tax 
259.15  imposed by chapter 297A on the sale of the pull-tabs and 
259.16  tipboards by the distributor is imposed on the retail sales 
259.17  price less the tax imposed by this subdivision.  The retail sale 
259.18  of pull-tabs or tipboards by the organization is exempt from 
259.19  taxes imposed by chapter 297A and is exempt from all local taxes 
259.20  and license fees except a fee authorized under section 349.16, 
259.21  subdivision 8.  
259.22     (b) The liability for the tax imposed by this section is 
259.23  incurred when the pull-tabs and tipboards are delivered by the 
259.24  distributor to the customer or to a common or contract carrier 
259.25  for delivery to the customer, or when received by the customer's 
259.26  authorized representative at the distributor's place of 
259.27  business, regardless of the distributor's method of accounting 
259.28  or the terms of the sale.  
259.29     The tax imposed by this subdivision is imposed on all sales 
259.30  of pull-tabs and tipboards, except the following:  
259.31     (1) sales to the governing body of an Indian tribal 
259.32  organization for use on an Indian reservation; 
259.33     (2) sales to distributors licensed under the laws of 
259.34  another state or of a province of Canada, as long as all 
259.35  statutory and regulatory requirements are met in the other state 
259.36  or province; 
260.1      (3) sales of promotional tickets as defined in section 
260.2   349.12; and 
260.3      (4) pull-tabs and tipboards sold to an organization that 
260.4   sells pull-tabs and tipboards under the exemption from licensing 
260.5   in section 349.166, subdivision 2.  A distributor shall require 
260.6   an organization conducting exempt gambling to show proof of its 
260.7   exempt status before making a tax-exempt sale of pull-tabs or 
260.8   tipboards to the organization.  A distributor shall identify, on 
260.9   all reports submitted to the commissioner, all sales of 
260.10  pull-tabs and tipboards that are exempt from tax under this 
260.11  subdivision.  
260.12     (c) A distributor having a liability of $120,000 or more 
260.13  during a fiscal year ending June 30 must remit all liabilities 
260.14  in the subsequent calendar year by a funds transfer as defined 
260.15  in section 336.4A-104, paragraph (a).  The funds transfer 
260.16  payment date, as defined in section 336.4A-401, must be on or 
260.17  before the date the tax is due.  If the date the tax is due is 
260.18  not a funds transfer business day, as defined in section 
260.19  336.4A-105, paragraph (a), clause (4), the payment date must be 
260.20  on or before the funds transfer business day next following the 
260.21  date the tax is due. 
260.22     (d) Any customer who purchases deals of pull-tabs or 
260.23  tipboards from a distributor may file an annual claim for a 
260.24  refund or credit of taxes paid pursuant to this subdivision for 
260.25  unsold pull-tab and tipboard tickets.  The claim must be filed 
260.26  with the commissioner on a form prescribed by the commissioner 
260.27  by March 20 of the year following the calendar year for which 
260.28  the refund is claimed.  The refund must be filed as part of the 
260.29  customer's February monthly return.  The refund or credit is 
260.30  equal to two 1.9 percent of the face value of the unsold 
260.31  pull-tab or tipboard tickets, provided that the refund or credit 
260.32  will be 1.95 percent of the face value of the unsold pull-tab or 
260.33  tipboard tickets for claims for a refund or credit of taxes 
260.34  filed on the February 1999 monthly return.  The refund claimed 
260.35  will be applied as a credit against tax owing under this chapter 
260.36  on the February monthly return.  If the refund claimed exceeds 
261.1   the tax owing on the February monthly return, that amount will 
261.2   be refunded.  The amount refunded will bear interest pursuant to 
261.3   section 270.76 from 90 days after the claim is filed.  
261.4      Sec. 5.  Minnesota Statutes 1996, section 297E.02, 
261.5   subdivision 6, is amended to read: 
261.6      Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
261.7   imposed under subdivisions 1 and 4, a tax is imposed on the 
261.8   combined receipts of the organization.  As used in this section, 
261.9   "combined receipts" is the sum of the organization's gross 
261.10  receipts from lawful gambling less gross receipts directly 
261.11  derived from the conduct of bingo, raffles, and paddlewheels, as 
261.12  defined in section 297E.01, subdivision 8, for the fiscal year.  
261.13  The combined receipts of an organization are subject to a tax 
261.14  computed according to the following schedule: 
261.15     If the combined receipts for the          The tax is:
261.16     fiscal year are:
261.17     Not over $500,000                   zero
261.18     Over $500,000, but not over
261.19     $700,000                            two 1.9 percent of the 
261.20                                         amount over $500,000, but 
261.21                                         not over $700,000
261.22     Over $700,000, but not over
261.23     $900,000                            $4,000 $3,800 plus four 
261.24                                         3.8 percent of the 
261.25                                         amount over $700,000, but 
261.26                                         not over $900,000
261.27     Over $900,000                       $12,000 $11,400 plus six 
261.28                                         5.7 percent of the 
261.29                                         amount over $900,000
261.30     Sec. 6.  Minnesota Statutes 1997 Supplement, section 
261.31  349.19, subdivision 2a, is amended to read: 
261.32     Subd. 2a.  [TAX REFUND OR CREDIT.] (a) Each organization 
261.33  that receives a refund or credit under section 297E.02, 
261.34  subdivision 4, paragraph (d), must within four business days of 
261.35  receiving a refund under that paragraph deposit the refund in 
261.36  the organization's gambling account.  
262.1      (b) In addition, each organization must annually calculate 
262.2   5.26 percent of the sum of the amount of tax it paid under: 
262.3      (1) section 297E.02, subdivision 1, on gross receipts, less 
262.4   prizes paid, after August 1, 1998; and 
262.5      (2) section 297E.02, subdivision 6, on combined receipts 
262.6   received after August 1, 1998. 
262.7      (c) The calculated amount must be reported to the board on 
262.8   a form prescribed by the board by March 20 of the year after the 
262.9   calendar year for which the calculated amount is made.  The 
262.10  calculated amount must be filed as part of the organization's 
262.11  report of expenditure of profits from lawful gambling required 
262.12  under section 349.19, subdivision 5. 
262.13     (d) The organization may expend the tax refund or credit 
262.14  issued under section 297E.02, subdivision 4, paragraph (d), plus 
262.15  the amount calculated under paragraph (b), only for lawful 
262.16  purposes, other than lawful purposes described in section 
262.17  349.12, subdivision 25, paragraph (a), clauses (8), (9), and 
262.18  (12).  Amounts received as refunds or allowed as credits subject 
262.19  to this paragraph must be spent for qualifying lawful purposes 
262.20  no later than one year after the refund or credit is received or 
262.21  the tax savings calculated under paragraph (b). 
262.22     Sec. 7.  [EFFECTIVE DATE.] 
262.23     Sections 3 to 5 are effective July 1, 1998. 
262.24                             ARTICLE 14
262.25                              HOUSING
262.26  Section 1.  [HOUSING APPROPRIATIONS.] 
262.27     The sums in the columns marked "APPROPRIATIONS" are 
262.28  appropriated from the general fund, or another named fund, to 
262.29  the agencies and for the purposes specified in this article, to 
262.30  be available for the fiscal years indicated for each purpose.  
262.31  The figures "1998" and "1999," where used in this act, mean that 
262.32  the appropriation or appropriations listed under them are 
262.33  available for the year ending June 30, 1998, or June 30, 1999, 
262.34  respectively.  The term "first year" means the fiscal year 
262.35  ending June 30, 1998, and "second year" means the fiscal year 
262.36  ending June 30, 1999. 
263.1                           SUMMARY BY FUND 
263.2                                            1998           1999 
263.3   General                              $     -0-      $10,000,000 
263.4   TOTAL                                $     -0-      $10,000,000 
263.5                                              APPROPRIATIONS 
263.6                                          Available for the Year 
263.7                                              Ending June 30 
263.8                                             1998         1999 
263.9   Sec. 2.  MINNESOTA HOUSING 
263.10  FINANCE AGENCY                             -0-       10,000,000
263.11  The amounts that may be spent from this 
263.12  appropriation for certain programs are 
263.13  specified below. 
263.14  This appropriation is for transfer to 
263.15  the housing development fund for the 
263.16  programs specified and is part of the 
263.17  agency's budget base. 
263.18  (a) Affordable Rental Investment Fund
263.19  $10,000,000 in 1999 is for the 
263.20  affordable rental investment fund 
263.21  program under Minnesota Statutes, 
263.22  section 462A.21, subdivision 8b, to 
263.23  finance the acquisition, 
263.24  rehabilitation, and debt restructuring 
263.25  of federally assisted rental property 
263.26  and for making equity take-out loans 
263.27  under Minnesota Statutes, section 
263.28  462A.05, subdivision 39.  The owner of 
263.29  the rental property must agree to 
263.30  participate in the applicable federally 
263.31  assisted housing program and to extend 
263.32  any existing low-income affordability 
263.33  restrictions on the housing for the 
263.34  maximum term permitted.  The owner must 
263.35  also enter into an agreement that gives 
263.36  local units of government, housing and 
263.37  redevelopment authorities, and 
263.38  nonprofit housing organizations the 
263.39  right of first refusal if the rental 
263.40  property is offered for sale.  Priority 
263.41  must be given to properties with the 
263.42  longest remaining term under an 
263.43  agreement for federal rental 
263.44  assistance.  Priority must also be 
263.45  given among comparable rental housing 
263.46  developments to developments that are 
263.47  or will be owned by a local government 
263.48  unit, a housing and redevelopment 
263.49  authority, or a nonprofit housing 
263.50  organization.  This appropriation is 
263.51  reduced by the amount of an 
263.52  appropriation for the affordable rental 
263.53  investment fund program enacted in any 
263.54  other legislation in the 1998 regular 
263.55  session of the Minnesota Legislature.  
263.56  (b) Administrative Spending Limit
263.57  Notwithstanding Laws 1997, chapter 200, 
263.58  article 1, section 6, the spending 
263.59  limit on cost of general administration 
263.60  of housing finance agency programs is 
264.1   $11,684,000 in fiscal year 1998 and 
264.2   $13,278,000 in fiscal year 1999. 
264.3      Sec. 3.  [TRANSFER OF BONDING AUTHORITY.] 
264.4      The Minnesota housing finance agency may enter into an 
264.5   agreement with the city of Minnetonka for a residential rental 
264.6   project which received an allocation from the housing pool in 
264.7   1998, whereby the city of Minnetonka may issue up to $500,000 in 
264.8   obligations pursuant to bonding authority allocated to the 
264.9   Minnesota housing finance agency in 1998 under Minnesota 
264.10  Statutes, section 474A.03.  
264.11     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
264.12  462A.05, subdivision 39, is amended to read: 
264.13     Subd. 39.  [EQUITY TAKE-OUT LOANS.] The agency may make 
264.14  equity take-out loans to owners of section 8 project-based and 
264.15  section 236 federally assisted rental property upon which the 
264.16  agency holds a first mortgage.  The owner of a section 8 
264.17  project-based federally assisted rental property must agree to 
264.18  participate in the section 8 federal assistance program and 
264.19  extend the low-income affordability restrictions on the housing 
264.20  for the maximum term of the section 8 federal assistance 
264.21  contract.  The owner of section 236 rental property must agree 
264.22  to participate in the section 236 interest reduction payments 
264.23  program, to extend any existing low-income affordability 
264.24  restrictions on the housing, and to extend any rental assistance 
264.25  payments for the maximum term permitted under the agreement for 
264.26  rental assistance payments.  The An equity take-out loan must be 
264.27  secured by a subordinate loan on the property and may include 
264.28  additional appropriate security determined necessary by the 
264.29  agency. 
264.30     Sec. 5.  Minnesota Statutes 1996, section 462A.222, 
264.31  subdivision 3, is amended to read: 
264.32     Subd. 3.  [ALLOCATION PROCEDURE.] (a) Projects will be 
264.33  awarded tax credits in three competitive rounds on an annual 
264.34  basis.  The date for applications for each round must be 
264.35  determined by the agency.  No allocating agency may award tax 
264.36  credits prior to the application dates established by the agency.
265.1      (b) Each allocating agency must meet the requirements of 
265.2   section 42(m) of the Internal Revenue Code of 1986, as amended 
265.3   through December 31, 1989, for the allocation of tax credits and 
265.4   the selection of projects. 
265.5      (c) For projects that are eligible for an allocation of 
265.6   credits pursuant to section 42(h)(4) of the Internal Revenue 
265.7   Code of 1986, as amended, tax credits may only be allocated if 
265.8   the project satisfies the requirements of the allocating 
265.9   agency's qualified allocation plan.  For projects that are 
265.10  eligible for an allocation of credits pursuant to section 
265.11  42(h)(4) of the Internal Revenue Code of 1986, as amended, for 
265.12  which the agency is the issuer of the bonds for the project, or 
265.13  the issuer of the bonds for the project is located outside the 
265.14  jurisdiction of a city or county that has received reserved tax 
265.15  credits, the applicable allocation plan is the agency's 
265.16  qualified allocation plan. 
265.17     (d) For applications submitted for the first round, an 
265.18  allocating agency may allocate tax credits only to the following 
265.19  types of projects: 
265.20     (1) in the metropolitan area: 
265.21     (i) new construction or substantial rehabilitation of 
265.22  projects in which, for the term of the extended use period, at 
265.23  least 75 percent of the total tax credit units are single-room 
265.24  occupancy, efficiency, or one bedroom units and which are 
265.25  affordable by households whose income does not exceed 30 percent 
265.26  of the median income; 
265.27     (ii) new construction or substantial rehabilitation family 
265.28  housing projects that are not restricted to persons who are 55 
265.29  years of age or older and in which, for the term of the extended 
265.30  use period, at least 75 percent of the tax credit units contain 
265.31  two or more bedrooms and at least one-third of the 75 percent 
265.32  contain three or more bedrooms; or 
265.33     (iii) substantial rehabilitation projects in neighborhoods 
265.34  targeted by the city for revitalization; 
265.35     (2) outside the metropolitan area, projects which meet a 
265.36  locally identified housing need and which are in short supply in 
266.1   the local housing market as evidenced by credible data submitted 
266.2   with the application; 
266.3      (3) projects that are not restricted to persons of a 
266.4   particular age group and in which, for the term of the extended 
266.5   use period, a percentage of the units are set aside and rented 
266.6   to persons: 
266.7      (i) with a serious and persistent mental illness as defined 
266.8   in section 245.462, subdivision 20, paragraph (c); 
266.9      (ii) with a developmental disability as defined in United 
266.10  States Code, title 42, section 6001, paragraph (5), as amended 
266.11  through December 31, 1990; 
266.12     (iii) who have been assessed as drug dependent persons as 
266.13  defined in section 254A.02, subdivision 5, and are receiving or 
266.14  will receive care and treatment services provided by an approved 
266.15  treatment program as defined in section 254A.02, subdivision 2; 
266.16     (iv) with a brain injury as defined in section 256B.093, 
266.17  subdivision 4, paragraph (a); or 
266.18     (v) with permanent physical disabilities that substantially 
266.19  limit one or more major life activities, if at least 50 percent 
266.20  of the units in the project are accessible as provided under 
266.21  Minnesota Rules, chapter 1340; 
266.22     (4) projects, whether or not restricted to persons of a 
266.23  particular age group, which preserve existing subsidized housing 
266.24  which is subject to prepayment if the use of tax credits is 
266.25  necessary to prevent conversion to market rate use; or 
266.26     (5) projects financed by the Farmers Home Administration, 
266.27  or its successor agency, which meet statewide distribution goals.
266.28     (e) Before the date for applications for the second round, 
266.29  the allocating agencies other than the agency shall return all 
266.30  uncommitted and unallocated tax credits to the pool from which 
266.31  they were allocated, along with copies of any allocation or 
266.32  commitment.  In the second round, the agency shall allocate the 
266.33  remaining credits from the regional pools to projects from the 
266.34  respective regions.  
266.35     (f) In the third round, all unallocated tax credits must be 
266.36  transferred to a unified pool for allocation by the agency on a 
267.1   statewide basis. 
267.2      (g) Unused portions of the state ceiling for low-income 
267.3   housing tax credits reserved to cities and counties for 
267.4   allocation may be returned at any time to the agency for 
267.5   allocation. 
267.6      (h) If an allocating agency determines, at any time after 
267.7   the initial commitment or allocation for a specific project, 
267.8   that a project is no longer eligible for all or a portion of the 
267.9   low-income housing tax credits committed or allocated to the 
267.10  project, the credits must be transferred to the agency to be 
267.11  reallocated pursuant to the procedures established in paragraphs 
267.12  (e) to (g); provided that if the tax credits for which the 
267.13  project is no longer eligible are from the current year's annual 
267.14  ceiling and the allocating agency maintains a waiting list, the 
267.15  allocating agency may continue to commit or allocate the credits 
267.16  until not later than October 1, at which time any uncommitted 
267.17  credits must be transferred to the agency. 
267.18     Sec. 6.  [471.9997] [FEDERALLY ASSISTED RENTAL HOUSING; 
267.19  IMPACT STATEMENT.] 
267.20     At least 12 months before termination of participation in a 
267.21  federally assisted rental housing program, including 
267.22  project-based section 8 and section 236 rental housing, the 
267.23  owner of the federally assisted rental housing must submit a 
267.24  statement regarding the impact of termination on the residents 
267.25  of the rental housing to the governing body of the local 
267.26  government unit in which the housing is located.  The impact 
267.27  statement must identify the number of units that will no longer 
267.28  be subject to rent restrictions imposed by the federal program, 
267.29  the estimated rents that will be charged as compared to rents 
267.30  charged under the federal program, and actions the owner will 
267.31  take to assist displaced tenants in obtaining other housing.  A 
267.32  copy of the impact statement must be provided to each resident 
267.33  of the affected building, the Minnesota housing finance agency, 
267.34  and, if the property is located in the metropolitan area as 
267.35  defined in section 473.121, subdivision 2, the metropolitan 
267.36  council. 
268.1      Sec. 7.  Laws 1997, Second Special Session chapter 2, 
268.2   section 4, subdivision 3, is amended to read: 
268.3   Subd. 3.  Community Rehabilitation
268.4   Fund Program                                          4,500,000
268.5   This is a one-time appropriation from 
268.6   the general fund for the community 
268.7   rehabilitation fund program under 
268.8   Minnesota Statutes, section 462A.206.  
268.9   Of this amount, up to $500,000 is 
268.10  available for grants for damages 
268.11  occurring after June 10, 1997, in an 
268.12  area designated under a presidential 
268.13  declaration of major 
268.14  disaster.  Pursuant to a plan approved 
268.15  by the agency, grants or loans may be 
268.16  made without regard to the income of 
268.17  the borrower in communities where at 
268.18  least 20 percent of the housing stock 
268.19  is subject to acquisition and buyout as 
268.20  a result of the 1997 flooding.  The 
268.21  grants or loans made without regard to 
268.22  the borrower's income shall not exceed 
268.23  the maximum grant or loan amount 
268.24  available to buyout households.  This 
268.25  appropriation is available until 
268.26  expended. 
268.27     Sec. 8.  [EFFECTIVE DATES.] 
268.28     Sections 3, 4, and 7 are effective the day following final 
268.29  enactment. 
268.30                             ARTICLE 15 
268.31                          SANITARY SEWERS 
268.32     Section 1.  [LEGISLATIVE PURPOSE AND POLICY.] 
268.33     The legislature determines that in the cities of Farwell 
268.34  and Kensington there are serious problems of water pollution and 
268.35  disposal of sewage which cannot be effectively or economically 
268.36  dealt with by existing government units under existing laws.  
268.37  The legislature, therefore, declares that for the protection of 
268.38  the public health, safety, and welfare of these areas, for the 
268.39  preservation and best use of waters and other natural resources 
268.40  of the state in the area, for the prevention, control, and 
268.41  abatement of water pollution in the area, and for the efficient 
268.42  and economic collection, treatment, and disposal of sewage, it 
268.43  is necessary to establish in Minnesota for said area a sanitary 
268.44  sewer board. 
268.45     Sec. 2.  [DEFINITIONS.] 
268.46     Subdivision 1.  [APPLICATION.] The terms defined in this 
268.47  section shall have the meaning given them unless otherwise 
269.1   provided or indicated by the context. 
269.2      Subd. 2.  [ACQUISITION AND BETTERMENT.] "Acquisition" and 
269.3   "betterment" shall have the meanings given them in Minnesota 
269.4   Statutes, chapter 475. 
269.5      Subd. 3.  [AGENCY.] "Agency" means the Minnesota pollution 
269.6   control agency created and established by Minnesota Statutes, 
269.7   chapter 116. 
269.8      Subd. 4.  [AGRICULTURAL PROPERTY.] "Agricultural property" 
269.9   means land as is classified agricultural land within the meaning 
269.10  of Minnesota Statutes, section 273.13, subdivision 23. 
269.11     Subd. 5.  [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND 
269.12  DEBT SERVICE.] "Current costs of acquisition, betterment, and 
269.13  debt service" means interest and principal estimated to be due 
269.14  during the budget year on bonds issued to finance said 
269.15  acquisition and betterment and all other costs of acquisition 
269.16  and betterment estimated to be paid during such year from funds 
269.17  other than bond proceeds and federal or state grants. 
269.18     Subd. 6.  [DISTRICT DISPOSAL SYSTEM.] "District disposal 
269.19  system" means any and all of the interceptors or treatment works 
269.20  owned, constructed, or operated by the board unless designated 
269.21  by the board as local sanitary sewer facilities. 
269.22     Subd. 7.  [FARWELL-KENSINGTON SANITARY DISTRICT AND 
269.23  DISTRICT.] "Farwell-Kensington sanitary district" and "district" 
269.24  mean the area over which the sanitary sewer board has 
269.25  jurisdiction which shall include all that part of Douglas county 
269.26  and Pope county described as follows, to wit: 
269.27     (1) all of the land within the corporate limits of the city 
269.28  of Farwell; 
269.29     (2) all of the land within the corporate limits of the city 
269.30  of Kensington. 
269.31     Subd. 8.  [INTERCEPTOR.] "Interceptor" means any sewer and 
269.32  necessary appurtenances thereto, including but not limited to, 
269.33  mains, pumping stations, and sewage flow regulating and 
269.34  measuring stations, which is designed for or used to conduct 
269.35  sewage originating in more than one local government unit, or 
269.36  which is designed or used to conduct all or substantially all 
270.1   the sewage originating in a single local government unit from a 
270.2   point of collection in that unit to an interceptor or treatment 
270.3   works outside that unit, or which is determined by the board to 
270.4   be a major collector of sewage used or designed to serve a 
270.5   substantial area in the district. 
270.6      Subd. 9.  [LOCAL GOVERNMENT UNIT OR GOVERNMENT 
270.7   UNIT.] "Local government unit" or "government unit" means any 
270.8   municipal or public corporation or governmental or political 
270.9   subdivision or agency located in whole or in part in the 
270.10  district, authorized by law to provide for the collection and 
270.11  disposal of sewage. 
270.12     Subd. 10.  [LOCAL SANITARY SEWER FACILITIES.] "Local 
270.13  sanitary sewer facilities" means all or any part of any disposal 
270.14  system in the district other than the district disposal system. 
270.15     Subd. 11.  [MUNICIPALITY.] "Municipality" means any city or 
270.16  town located in whole or in part in the district. 
270.17     Subd. 12.  [PERSON.] "Person" means any individual, 
270.18  partnership, corporation, cooperative, or other organization or 
270.19  entity, public or private. 
270.20     Subd. 13.  [POLLUTION AND SEWAGE SYSTEM.] "Pollution" and 
270.21  "sewage system" shall have the meanings given them in Minnesota 
270.22  Statutes, section 115.01. 
270.23     Subd. 14.  [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer 
270.24  board" or "board" means the sanitary sewer board established for 
270.25  the Farwell-Kensington sanitary district as provided in section 
270.26  3. 
270.27     Subd. 15.  [SEWAGE.] "Sewage" means all liquid or 
270.28  water-carried waste products from whatever sources derived, 
270.29  together with such groundwater infiltration and surface water as 
270.30  may be present. 
270.31     Subd. 16.  [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND 
270.32  COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of 
270.33  acquisition and betterment" and "costs of acquisition and 
270.34  betterment" mean all acquisition and betterment expenses which 
270.35  are permitted to be financed out of bond proceeds issued in 
270.36  accordance with section 13, subdivision 4, whether or not such 
271.1   expenses are in fact financed out of such bond proceeds. 
271.2      Subd. 17.  [TREATMENT WORKS AND DISPOSAL SYSTEM.] 
271.3   "Treatment works" and "disposal system" shall have the meanings 
271.4   given them in Minnesota Statutes, section 115.01. 
271.5      Sec. 3.  [SANITARY SEWER BOARD.] 
271.6      Subdivision 1.  [ESTABLISHMENT.] A sanitary sewer board 
271.7   with jurisdiction in the Farwell-Kensington sanitary district is 
271.8   established as a public corporation and political subdivision of 
271.9   the state with perpetual succession and all the rights, powers, 
271.10  privileges, immunities, and duties which may be validly granted 
271.11  to or imposed upon a municipal corporation, as provided in this 
271.12  article. 
271.13     Subd. 2.  [NUMBER, TERMS, AND ELECTION OF MEMBERS.] The 
271.14  board has five members, two elected at large from the city of 
271.15  Farwell and three elected at large from the city of Kensington.  
271.16  The terms of the members are four years and until a successor is 
271.17  qualified, except that for the first election in 1998 one at 
271.18  large seat from Farwell and one from Kensington shall be for two 
271.19  years and until a successor is qualified.  The short term shall 
271.20  be determined by lot and designated before filings open by the 
271.21  municipal clerks of the two cities.  The election shall be 
271.22  conducted by the municipal clerks as provided in Minnesota 
271.23  Statutes, chapter 205, at the same time as the city council 
271.24  elections are held.  Vacancies, removal, and qualification for 
271.25  office are as otherwise provided by statute for elected city 
271.26  council members. 
271.27     Subd. 3.  [CERTIFICATES OF SELECTION, OATH OF OFFICE.] A 
271.28  certificate of selection of every board member selected under 
271.29  subdivision 2 stating the term shall be made by the respective 
271.30  municipal clerks.  The certificates, with the approval appended 
271.31  by other authority, if required, shall be filed with the 
271.32  secretary of state.  Counterparts shall be furnished to the 
271.33  board member and the secretary of the board.  Each member shall 
271.34  qualify by taking and subscribing the oath of office prescribed 
271.35  by the Minnesota Constitution, article V, section 6.  Such oath, 
271.36  duly certified by the official administering the same, shall be 
272.1   filed with the secretary of state and the secretary of the board.
272.2      Subd. 4.  [COMPENSATION OF BOARD MEMBERS.] Each board 
272.3   member shall be paid a per diem compensation for meetings and 
272.4   for such other services in such amount as may be specifically 
272.5   authorized by the board from time to time.  Per diem 
272.6   compensation shall not exceed $2,000 in any one year.  All 
272.7   members of the board shall be reimbursed for all reasonable 
272.8   expenses incurred in the performance of their duties as 
272.9   determined by the board. 
272.10     Sec. 4.  [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 
272.11  OF BOARD.] 
272.12     Subdivision 1.  [OFFICERS, MEETINGS, SEAL.] A majority of 
272.13  the members shall constitute a quorum at all meetings of the 
272.14  board, but a lesser number may meet and adjourn from time to 
272.15  time and compel the attendance of absent members.  The board 
272.16  shall meet regularly at such time and place as the board shall 
272.17  by resolution designate.  Special meetings may be held at any 
272.18  time upon call of the chair or any two members, upon written 
272.19  notice sent by mail to each member at least three days prior to 
272.20  the meeting, or upon such other notice as the board by 
272.21  resolution may provide, or without notice if each member is 
272.22  present or files with the secretary a written consent to the 
272.23  meeting either before or after the meeting.  Except as otherwise 
272.24  provided in this article, any action within the authority of the 
272.25  board may be taken by the affirmative vote of a majority of the 
272.26  board at a regular or adjourned regular meeting or at a duly 
272.27  held special meeting, but in any case only if a quorum is 
272.28  present.  All meetings of the board shall be open to the public 
272.29  as provided in Minnesota Statutes, section 471.705.  The board 
272.30  may adopt a seal, which shall be officially and judicially 
272.31  noticed, to authenticate instruments executed by its authority, 
272.32  but omission of the seal shall not affect the validity of any 
272.33  instrument. 
272.34     Subd. 2.  [CHAIR.] The board shall elect a chair from its 
272.35  membership.  The term of the chair shall expire on January 1 of 
272.36  each year.  The chair shall preside at all meetings of the 
273.1   board, if present, and shall perform all other duties and 
273.2   functions usually incumbent upon such an officer, and all 
273.3   administrative functions assigned to the chair by the board.  
273.4   The board shall elect a vice-chair from its membership to act 
273.5   for the chair during a temporary absence or disability. 
273.6      Subd. 3.  [SECRETARY AND TREASURER.] The board shall select 
273.7   a person or persons who may but need not be a member or members 
273.8   of the board, to act as its secretary and treasurer.  The 
273.9   secretary and treasurer shall hold office at the pleasure of the 
273.10  board, subject to the terms of any contract of employment which 
273.11  the board may enter into with the secretary or treasurer.  The 
273.12  secretary shall record the minutes of all meetings of the board, 
273.13  and shall be custodian of all books and records of the board 
273.14  except such as the board shall entrust to the custody of a 
273.15  designated employee.  The board may appoint a deputy to perform 
273.16  any and all functions of either the secretary or the treasurer.  
273.17  A secretary or treasurer who is not a member of the board or a 
273.18  deputy of either shall not have any right to vote. 
273.19     Subd. 4.  [GENERAL MANAGER.] The board may appoint a 
273.20  general manager who shall be selected solely upon the basis of 
273.21  training, experience, and other qualifications and who shall 
273.22  serve at the pleasure of the board and at a compensation to be 
273.23  determined by the board.  The general manager need not be a 
273.24  resident of the district and may also be selected by the board 
273.25  to serve as either secretary or treasurer, or both, of the 
273.26  board.  The general manager shall attend all meetings of the 
273.27  board, but shall not vote, and shall: 
273.28     (1) see that all resolutions, rules, regulations, or orders 
273.29  of the board are enforced; 
273.30     (2) appoint and remove, upon the basis of merit and 
273.31  fitness, all subordinate officers and regular employees of the 
273.32  board except the secretary and the treasurer and their deputies; 
273.33     (3) present to the board plans, studies, and other reports 
273.34  prepared for board purposes and recommend to the board for 
273.35  adoption such measures as the general manager deems necessary to 
273.36  enforce or carry out the powers and duties of the board, or the 
274.1   efficient administration of the affairs of the board; 
274.2      (4) keep the board fully advised as to its financial 
274.3   condition, and prepare and submit to the board, and to the 
274.4   governing bodies of the local government units, the board's 
274.5   annual budget and such other financial information as the board 
274.6   may request; 
274.7      (5) recommend to the board for adoption such rules and 
274.8   regulations as he or she deems necessary for the efficient 
274.9   operation of a district disposal system and all local sanitary 
274.10  sewer facilities over which the board may assume responsibility 
274.11  as provided in section 18; and 
274.12     (6) perform such other duties as may be prescribed by the 
274.13  board. 
274.14     Subd. 5.  [PUBLIC EMPLOYEES.] The general manager and all 
274.15  persons employed by the general manager shall be public 
274.16  employees, and shall have all the rights and duties conferred on 
274.17  public employees under Minnesota Statutes, sections 179A.01 to 
274.18  179A.25.  The compensation and conditions of employment of such 
274.19  employees shall not be governed by any rule applicable to state 
274.20  employees in the classified service nor to any of the provisions 
274.21  of Minnesota Statutes, chapter 15A, unless the board so provides.
274.22     Subd. 6.  [PROCEDURES.] The board shall adopt resolutions 
274.23  or bylaws establishing procedures for board action, personnel 
274.24  administration, recordkeeping, investment policy, approving 
274.25  claims, authorizing or making disbursements, safekeeping funds, 
274.26  and audit of all financial operations of the board. 
274.27     Subd. 7.  [SURETY BONDS AND INSURANCE.] The board may 
274.28  procure surety bonds for its officers and employees and in such 
274.29  amounts as are deemed necessary to assure proper performance of 
274.30  their duties and proper accounting for funds in their custody. 
274.31  It may procure insurance against such risks to property and such 
274.32  liability of the board and its officers, agents, and employees 
274.33  for personal injuries or death and property damage and 
274.34  destruction and in such amounts as may be deemed necessary or 
274.35  desirable, with the force and effect stated in Minnesota 
274.36  Statutes, chapter 466. 
275.1      Sec. 5.  [COMPREHENSIVE PLAN.] 
275.2      Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
275.3   adopt a comprehensive plan for the collection, treatment, and 
275.4   disposal of sewage in the district for such designated period as 
275.5   the board deems proper and reasonable.  The board shall prepare 
275.6   and adopt subsequent comprehensive plans for the collection, 
275.7   treatment, and disposal of sewage in the district for each such 
275.8   succeeding designated period as the board deems proper and 
275.9   reasonable.  The plan shall take into account the preservation 
275.10  and best and most economic use of water and other natural 
275.11  resources in the area; the preservation, use and potential for 
275.12  use of lands adjoining waters of the state to be used for the 
275.13  disposal of sewage; and the impact such a disposal system will 
275.14  have on present and future land use in the area affected 
275.15  thereby.  Such plans shall include the general location of 
275.16  needed interceptors and treatment works, a description of the 
275.17  area that is to be served by the various interceptors and 
275.18  treatment works, a long-range capital improvements program and 
275.19  such other details as the board shall deem appropriate.  In 
275.20  developing the plans, the board shall consult with persons 
275.21  designated for such purpose by governing bodies of any municipal 
275.22  or public corporation or governmental or political subdivision 
275.23  or agency within the district to represent such entities and 
275.24  shall consider the data, resources, and input offered to the 
275.25  board by such entities and any planning agency acting on behalf 
275.26  of one or more such entities.  Each such plan, when adopted, 
275.27  shall be followed in the district and may be revised as often as 
275.28  the board deems necessary. 
275.29     Subd. 2.  [COMPREHENSIVE PLANS; HEARING.] Before adopting 
275.30  any subsequent comprehensive plan the board shall hold a public 
275.31  hearing on such proposed plan at such time and place in the 
275.32  district as it shall determine.  The hearing may be continued 
275.33  from time to time.  Not less than 45 days before the hearing, 
275.34  the board shall publish notice thereof in a newspaper or 
275.35  newspapers having general circulation in the district, stating 
275.36  the date, time, and place of the hearing, and the place where 
276.1   the proposed plan may be examined by any interested person.  At 
276.2   the hearing, all interested persons shall be permitted to 
276.3   present their views on the plan. 
276.4      Subd. 3.  [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH 
276.5   BOARD'S RESPONSIBILITIES.] Before undertaking the construction 
276.6   of new sewers of other disposal facilities or the substantial 
276.7   alteration or improvement of any existing sewers or other 
276.8   disposal facilities, each local government unit may, and shall 
276.9   if the construction or alteration of any sewage disposal 
276.10  facilities is contemplated by such government unit, adopt a 
276.11  comprehensive plan and program for the collection, treatment, 
276.12  and disposal of sewage for which the local government unit is 
276.13  responsible, coordinated with the board's comprehensive plan, 
276.14  and may revise the same as often as deems necessary.  Each such 
276.15  local plan or revision thereof shall be submitted forthwith to 
276.16  the board for review and shall be subject to the approval of the 
276.17  board as to those features of the plan affecting the board's 
276.18  responsibilities as determined by the board.  Any such features 
276.19  disapproved by the board shall be modified in accordance with 
276.20  the board's recommendations.  No construction project involving 
276.21  such features shall be undertaken by the local government unit 
276.22  unless its governing body shall first find the project to be in 
276.23  accordance with the government unit's comprehensive plan and 
276.24  program as approved by the board.  Prior to approval by the 
276.25  board of the comprehensive plan and program of any local 
276.26  government unit in the district, no construction project shall 
276.27  be undertaken by such government unit unless approval of the 
276.28  project is first secured from the board as to those features of 
276.29  the project affecting the board's responsibilities as determined 
276.30  by the board. 
276.31     Sec. 6.  [SEWER SERVICE FUNCTION.] 
276.32     Subdivision 1.  [DUTY OF BOARD; ACQUISITION OF EXISTING 
276.33  FACILITIES; NEW FACILITIES.] At any time after the board has 
276.34  become organized it shall assume ownership of all existing 
276.35  interceptors and treatment works which will be needed to 
276.36  implement the board's comprehensive plan for the collection, 
277.1   treatment, and disposal of sewage in the district, in the manner 
277.2   and subject to the conditions prescribed in subdivision 2, and 
277.3   shall design, acquire, construct, better, equip, operate, and 
277.4   maintain all additional interceptors and treatment works which 
277.5   will be needed for such purpose.  The board shall assume 
277.6   ownership of all treatment works owned by a local government 
277.7   unit if any part of such treatment works will be needed for such 
277.8   purpose. 
277.9      Subd. 2.  [METHOD OF ACQUISITION; EXISTING DEBT.] The board 
277.10  may require any local government unit to transfer to the board, 
277.11  all of its right, title, and interest in any interceptors or 
277.12  treatment works and all necessary appurtenances thereto owned by 
277.13  such local government unit which will be needed for the purpose 
277.14  stated in subdivision 1.  Appropriate instruments of conveyance 
277.15  for all such property shall be executed and delivered to the 
277.16  board by the proper officers of each local government unit 
277.17  concerned.  The board, upon assuming ownership of any such 
277.18  interceptors or treatment works, shall become obligated to pay 
277.19  to such local government unit amounts sufficient to pay when due 
277.20  all remaining principal of and interests on bonds issued by such 
277.21  local government unit for the acquisition or betterment of the 
277.22  interceptors or treatment works taken over.  The board shall 
277.23  also assume the same obligation with respect to so much of any 
277.24  other existing disposal system owned by a local government unit 
277.25  as the board determines to have been replaced or rendered 
277.26  useless by the district disposal system.  The amounts to be paid 
277.27  under this subdivision may be offset against any amount to be 
277.28  paid to the board by the local government unit as provided in 
277.29  section 9.  The board shall not be obligated to pay the local 
277.30  government unit anything in addition to the assumption of debt 
277.31  herein provided for. 
277.32     Subd. 3.  [EXISTING JOINT POWERS BOARD.] Effective January 
277.33  1, 2000, or such earlier date as determined by the board, the 
277.34  corporate existence of the joint powers board created by 
277.35  agreement among local government units pursuant to Minnesota 
277.36  Statutes, section 471.59, to provide the financing, acquisition, 
278.1   construction, improvement, extension, operation, and maintenance 
278.2   of facilities for the collection, treatment, and disposal of 
278.3   sewage shall terminate.  All persons regularly employed by such 
278.4   joint powers board on that date shall be employees of the board, 
278.5   and may at their option become members of the retirement system 
278.6   applicable to persons employed directly by the board or may 
278.7   continue as members of a public retirement association under any 
278.8   other law, to which they belonged before such date, and shall 
278.9   retain all pension rights which they may have under such latter 
278.10  laws, and all other rights to which they are entitled by 
278.11  contract or law.  The board shall make the employer's 
278.12  contributions to pension funds of its employees.  Such employees 
278.13  shall perform such duties as may be prescribed by the board.  On 
278.14  January 1, 2000, or such earlier date, all funds of such joint 
278.15  powers board then on hand, and all subsequent collections of 
278.16  taxes, special assessments, or service charges or any other sums 
278.17  due the joint powers board or levied, or imposed by or for such 
278.18  joint powers board shall be transferred to or made payable to 
278.19  the sanitary sewer board and the county auditor shall remit the 
278.20  sums to the board.  The local government units otherwise 
278.21  entitled to such cash, taxes, assessments, or service charges 
278.22  shall be credited with such amounts, and such credits shall be 
278.23  offset against any amounts to be paid by them to the board as 
278.24  provided in section 9.  On January 1, 2000, or such earlier 
278.25  date, the board shall succeed to and become vested with all 
278.26  right, title, and interest in and to any property, real or 
278.27  personal, owned or operated by such joint powers board; and 
278.28  prior to that date the proper officers of such joint powers 
278.29  board shall execute and deliver to the sanitary sewer board all 
278.30  deeds, conveyances, bills of sale, and other documents or 
278.31  instruments required to vest in the board good and marketable 
278.32  title to all such real or personal property, but this article 
278.33  shall operate as such transfer and conveyance to the board of 
278.34  such real or personal property, if not so transferred, as may be 
278.35  required under the law or under the circumstances.  On January 
278.36  1, 2000, or such earlier date, the board shall become obligated 
279.1   to pay or assume all outstanding bonds or other debt and all 
279.2   contracts or obligations incurred by such joint powers board, 
279.3   and all such bonds, obligations, or debts of the joint powers 
279.4   board outstanding on the date this article becomes effective are 
279.5   validated. 
279.6      Subd. 4.  [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The 
279.7   board may terminate upon 60 days mailed notice to the 
279.8   contracting parties, any existing contract between or among 
279.9   local government units requiring payments by a local government 
279.10  unit to any other local government unit, for the use of a 
279.11  disposal system, or as reimbursement of capital costs of such a 
279.12  disposal system, all or part of which will be needed to 
279.13  implement the board's comprehensive plan.  All contracts between 
279.14  or among local government units for use of a disposal system 
279.15  entered into subsequent to the date on which this article 
279.16  becomes effective shall be submitted to the board for approval 
279.17  as to those features affecting the board's responsibilities as 
279.18  determined by the board and shall not become effective until 
279.19  such approval is given. 
279.20     Sec. 7.  [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 
279.21     Subdivision 1.  [POWERS.] In addition to all other powers 
279.22  conferred upon the board in this article, the board has the 
279.23  powers specified in this section. 
279.24     Subd. 2.  [DISCHARGE OF TREATED SEWAGE.] The board shall 
279.25  have the right to discharge the effluent from any treatment 
279.26  works operated by it into any waters of the state, subject to 
279.27  approval of the agency if required and in accordance with any 
279.28  effluent or water quality standards lawfully adopted by the 
279.29  agency, any interstate agency or any federal agency having 
279.30  jurisdiction. 
279.31     Subd. 3.  [UTILIZATION OF DISTRICT SYSTEM.] The board may 
279.32  require any person or local government unit to provide for the 
279.33  discharge of any sewage, directly or indirectly, into the 
279.34  district disposal system, or to connect any disposal system or a 
279.35  part thereof with the district disposal system wherever 
279.36  reasonable opportunity therefore is provided; may regulate the 
280.1   manner in which such connections are made; may require any 
280.2   person or local government unit discharging sewage into the 
280.3   disposal system to provide preliminary treatment therefore; may 
280.4   prohibit the discharge into the district disposal system of any 
280.5   substance which it determines will or may be harmful to the 
280.6   system or any persons operating it; may prohibit any extraneous 
280.7   flow into the system; and may require any local government unit 
280.8   to discontinue the acquisition, betterment, or operation of any 
280.9   facility for such unit's disposal system wherever and so far as 
280.10  adequate service is or will be provided by the district disposal 
280.11  system. 
280.12     Sec. 8.  [BUDGET.] 
280.13     Except as otherwise specifically provided in this article, 
280.14  the board is subject to Minnesota Statutes, section 275.065, 
280.15  popularly known as the Truth in Taxation Act.  The board shall 
280.16  prepare and adopt, on or before September 15 of each year, a 
280.17  budget showing for the following calendar year or other fiscal 
280.18  year determined by the board, sometimes referred to in this 
280.19  article as the budget year, estimated receipts of money from all 
280.20  sources including, but not limited to, payments by each local 
280.21  government unit, federal or state grants, taxes on property, and 
280.22  funds on hand at the beginning of the year, and estimated 
280.23  expenditures for: 
280.24     (1) costs of operation, administration, and maintenance of 
280.25  the district disposal system; 
280.26     (2) cost acquisition and betterment of the district 
280.27  disposal system; and 
280.28     (3) debt service, including principal and interest, on 
280.29  general obligation bonds and certificates issued pursuant to 
280.30  section 13, obligations and debts assumed under section 6, 
280.31  subdivisions 2 and 3, and any money judgments entered by a court 
280.32  of competent jurisdiction.  
280.33     Expenditures within these general categories, and such 
280.34  others as the board may from time to time determine, shall be 
280.35  itemized in such detail as the board shall prescribe.  The board 
280.36  and its officers, agents, and employees shall not spend money 
281.1   for any purpose other than debt service without having set forth 
281.2   such expense in the budget nor in excess of the amount set forth 
281.3   in the budget therefor, and no obligation to make sure an 
281.4   expenditure shall be enforceable except as the obligation of the 
281.5   person or persons incurring it; provided that the board may 
281.6   amend the budget at any time by transferring from one purpose to 
281.7   another any sums except money for debt service and bond proceeds 
281.8   or by increasing expenditures in any amount by which cash 
281.9   receipts during the budget year actually exceed the total 
281.10  amounts designated in the original budget.  The creation of any 
281.11  obligation pursuant to section 13 or the receipts of any federal 
281.12  or state grant is a sufficient budget designation of the 
281.13  proceeds for the purpose for which it is authorized, and of the 
281.14  tax or other revenue pledged to pay the obligation and interest 
281.15  on it, whether or not specifically included in any annual budget.
281.16     Sec. 9.  [ALLOCATION OF COSTS.] 
281.17     Subdivision 1.  [DEFINITION OF CURRENT COSTS.] The 
281.18  estimated cost of administration, operation, maintenance, and 
281.19  debt service of the district disposal system to be paid by the 
281.20  board in each fiscal year and the estimated costs of acquisition 
281.21  and betterment of the system which are to be paid during the 
281.22  year from funds other than state or federal grants and bond 
281.23  proceeds and all other previously unallocated payments made by 
281.24  the board pursuant to this article in such year are referred to 
281.25  as current costs. 
281.26     Subd. 2.  [COLLECTION OF CURRENT COSTS.] Current costs 
281.27  shall be collected as follows: 
281.28     (a) Allocation of current costs:  current costs may be 
281.29  allocated to local government units in the district on an 
281.30  equitable basis as the board may from time to time determine by 
281.31  resolution to be fair and reasonable and in the best interests 
281.32  of the district.  In making the allocation the board may provide 
281.33  for the deferment of payment of all or part of current costs, 
281.34  the reallocation of deferred costs and the reimbursement of 
281.35  reallocated deferred costs on an equitable basis as the board 
281.36  may from time to time determine by resolution to be fair and 
282.1   reasonable and in the best interests of the district.  The 
282.2   adoption or revision of a method of allocation, deferment, 
282.3   reallocation, or reimbursement used by the board shall be made 
282.4   by the affirmative vote of at least two-thirds of the members of 
282.5   the board. 
282.6      (b) Direct collection:  upon approval of at least 
282.7   two-thirds of the members of the board, the board may provide 
282.8   for direct collection of current costs by monthly or other 
282.9   periodic billing of sewer users. 
282.10     Sec. 10.  [GOVERNMENT UNITS; PAYMENTS TO BOARD.] 
282.11     Subdivision 1.  [OBLIGATIONS OF GOVERNMENT UNITS TO THE 
282.12  BOARD.] Each government unit shall pay to the board all sums 
282.13  charged to it as provided in section 9, at the times and in the 
282.14  manner determined by the board.  The governing body of each such 
282.15  government unit shall take all action that may be necessary to 
282.16  provide the funds required for such payments and to make the 
282.17  same when due. 
282.18     Subd. 2.  [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges 
282.19  payable to the board by local government units may be made 
282.20  payable at such times during each year as the board determines, 
282.21  after it has taken into account the dates on which taxes, 
282.22  assessments, revenue collections, and other funds become 
282.23  available to the government unit required to pay such charges. 
282.24     Subd. 3.  [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX 
282.25  LEVIES.] To accomplish any duty imposed on it by the board, the 
282.26  governing body of every government unit may, in addition to the 
282.27  powers granted in this article and in any other law or charter, 
282.28  exercise the powers granted any municipality by Minnesota 
282.29  Statutes, chapters 117, 412, 429, and 475 and sections 115.46, 
282.30  444.075, and 471.59, with respect to the area of the government 
282.31  unit located in the district.  In addition thereto, the 
282.32  governing body of every government unit located in whole or part 
282.33  in the district may levy taxes upon all taxable property in that 
282.34  part of the government unit located in the district for all or a 
282.35  part of the amount payable to the board, but if the levy is for 
282.36  only part of the amounts payable to the board, the governing 
283.1   body of the government unit may levy additional taxes on the 
283.2   entire net tax capacity of all taxable property for all or a 
283.3   part of the balance remaining payable.  The taxes levied under 
283.4   this subdivision shall be assessed and extended as a tax upon 
283.5   such taxable property by the county auditor for the next 
283.6   calendar year, free from any limitation of rate or amount 
283.7   imposed by law or charter.  The tax shall be collected and 
283.8   remitted in the same manner as other general taxes of the 
283.9   government unit. 
283.10     Subd. 3a.  [ALTERNATE LEVY.] In lieu of levying taxes on 
283.11  all taxable property pursuant to subdivision 3, the governing 
283.12  body of the government unit may elect to levy taxes upon the net 
283.13  tax capacity of all taxable property, except agricultural 
283.14  property, and upon only 25 percent of the net tax capacity of 
283.15  all agricultural property, in that part of the government unit 
283.16  located in the district for all or a part of the amounts payable 
283.17  to the board.  If the levy is for only part of the amounts 
283.18  payable to the board, the governing body may levy additional 
283.19  taxes on the entire net tax capacity of all such property, 
283.20  including agricultural property, for all or a part of the 
283.21  balance of such amounts.  The taxes shall be assessed and 
283.22  extended as a tax upon such taxable property by the county 
283.23  auditor for the next calendar year, free from any limitation of 
283.24  rate or amount imposed by law or charge, and shall be collected 
283.25  and remitted in the same manner as other general taxes of the 
283.26  government unit.  In computing the tax capacity pursuant to this 
283.27  subdivision, the county auditor shall include only 25 percent of 
283.28  the net tax capacity of all taxable agricultural property and 
283.29  100 percent of the net tax capacity of all other taxable 
283.30  property in that part of the government unit located within the 
283.31  district and, in spreading the levy, the auditor shall apply the 
283.32  tax rate upon the same percentages of agricultural and 
283.33  nonagricultural taxable property.  If the government unit elects 
283.34  to levy taxes under this subdivision and any of the taxable 
283.35  agricultural property is reclassified so as to no longer qualify 
283.36  as agricultural property, it shall be subject to additional 
284.1   taxes.  The additional taxes shall be in an amount which, 
284.2   together with any such additional taxes previously levied and 
284.3   the estimated collection of additional taxes subsequently levied 
284.4   on any other such reclassified property, is determined by the 
284.5   governing body of the government unit to be at least sufficient 
284.6   to reimburse each other government unit for any excess current 
284.7   costs reallocated to it as a result of the board deferring any 
284.8   current costs under section 9 on account of the difference 
284.9   between the amount of such current costs initially allocated to 
284.10  each government unit based on the total net tax capacity of all 
284.11  taxable property in the district and the amount of such current 
284.12  costs reallocated to each government unit based on 25 percent of 
284.13  the net tax capacity of agricultural property and 100 percent of 
284.14  the net tax capacity of all other taxable property in the 
284.15  district.  Any reimbursement shall be made on terms which the 
284.16  board determines to be just and reasonable.  These additional 
284.17  taxes may be levied in any greater amount as the governing body 
284.18  of the government unit determines to be appropriate, provided 
284.19  that in no event shall the total amount of the additional taxes 
284.20  exceed the difference between: 
284.21     (1) the total amount of taxes which would have been levied 
284.22  upon such reclassified property to help pay current costs 
284.23  charged in each year to the government unit by the board if that 
284.24  portion of such costs, if any, initially allocated by the board 
284.25  solely on the basis of 100 percent of the net tax capacity of 
284.26  all taxable property in the district and then reallocated on the 
284.27  basis of inclusion of only 25 percent of the net tax capacity of 
284.28  agricultural property in the district was not reallocated and if 
284.29  the amount of taxes levied by the government unit each year 
284.30  under this subdivision to pay current costs had been based on 
284.31  such initial allocation and had been imposed upon 100 percent of 
284.32  the net tax capacity of all taxable property, including 
284.33  agricultural property, in that part of the government unit 
284.34  located in the district; and 
284.35     (2) the amount of taxes theretofore levied each year under 
284.36  this subdivision upon such reclassified property, plus interest 
285.1   on the cumulative amount of such difference accruing each year 
285.2   at the approximate average annual rate borne by bonds issued by 
285.3   the board and outstanding at the beginning of such year or, if 
285.4   no bonds are then outstanding, at such rate of interest which 
285.5   may be determined by the board, but not exceeding the maximum 
285.6   rate of interest which may then be paid on bonds issued by the 
285.7   board.  The additional taxes shall be a lien upon the 
285.8   reclassified property assessed in the same manner and for the 
285.9   same duration as all other ad valorem taxes levied upon the 
285.10  property.  The additional taxes shall be extended against the 
285.11  reclassified property on the tax list for the current year, 
285.12  provided however that no penalties or additional interest shall 
285.13  be levied on such additional taxes if timely paid, and shall be 
285.14  collected and remitted in the same manner as other general taxes 
285.15  of the government unit. 
285.16     Subd. 4.  [DEBT LIMIT.] Any ad valorem taxes levied under 
285.17  section 10, subdivision 3, or section 5 by the governing body of 
285.18  a government unit to pay any sums charged to it by the board 
285.19  pursuant to this article are not subject to, or counted towards, 
285.20  any limit imposed by law on the levy of taxes upon taxable 
285.21  property within any governmental unit. 
285.22     Subd. 5.  [DEFICIENCY TAX LEVIES.] If the local government 
285.23  unit fails to make any payment to the board when due, the board 
285.24  may certify to the auditor of the county in which the government 
285.25  unit is located the amount required for payment of such amount 
285.26  with interest at not more than the maximum rate per annum 
285.27  authorized at that time on assessments pursuant to Minnesota 
285.28  Statutes, section 429.061, subdivision 2.  The auditor shall 
285.29  levy and extend such amount as a tax upon all taxable property 
285.30  in that part of the government unit located in the district, for 
285.31  the next calendar year, free from any limitation imposed by law 
285.32  or charter.  Such tax shall be collected in the same manner as 
285.33  other general taxes of the government unit, and the proceeds 
285.34  thereof, when collected, shall be paid by the county treasurer 
285.35  to the treasurer of the board and credited to the government 
285.36  unit for which the tax was levied. 
286.1      Sec. 11.  [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 
286.2      Subdivision 1.  [PUBLIC HEARING REQUIREMENT ON SPECIFIC 
286.3   PROJECT.] Before the board orders any project involving the 
286.4   acquisition or betterment of any interceptor or treatment works, 
286.5   all or a part of the cost of which will be allocated to local 
286.6   government units pursuant to section 9, as current costs, the 
286.7   board shall hold a public hearing on the proposed project 
286.8   following two publications in a newspaper or newspapers having 
286.9   general circulation in the district, stating the time and place 
286.10  of the hearing, the general nature and location of the project, 
286.11  the estimated total cost of acquisition and betterment, that 
286.12  portion of such costs estimated to be paid out of federal and 
286.13  state grants, and that portion of such costs estimated to be 
286.14  allocated to each local government unit affected thereby.  The 
286.15  two publications shall be a week apart and the hearing shall be 
286.16  at least three days after the last publication.  Not less than 
286.17  45 days before the hearing notice thereof shall also be mailed 
286.18  to each clerk of all local government units in the district, but 
286.19  failure to give mailed notice of any defects in the notice shall 
286.20  not invalidate the proceedings.  The project may include all or 
286.21  part of one or more interceptors or treatment works.  A hearing 
286.22  is not required with respect to a project, no part of the costs 
286.23  of which are to be allocated to local government units as the 
286.24  current costs of acquisition, betterment, and debt service. 
286.25     Subd. 2.  [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 
286.26  governing body of any local government unit in the district 
286.27  proposes to assess against benefited property within such units 
286.28  all or any part of the allocable costs of the project as 
286.29  provided in subdivision 5, such governing body shall, not less 
286.30  than ten days prior to the hearing provided for in subdivision 1 
286.31  cause mailed notice thereof to be given to the owner of each 
286.32  parcel within the area proposed to be specially assessed and 
286.33  shall also give one week's published notice of the hearing.  The 
286.34  notice of hearing shall contain the same information provided in 
286.35  the notice published by the board pursuant to subdivision 1, and 
286.36  in addition, a description of the area proposed to be assessed 
287.1   by the local government unit.  For the purpose of giving mailed 
287.2   notice, owners shall be those shown to be on the records of the 
287.3   county auditor or, in any county where tax statements are mailed 
287.4   by the county treasurer, on the records of the county treasurer; 
287.5   but other appropriate records may be used for this purpose.  
287.6   However, as to properties which are tax exempt or subject to 
287.7   taxation on a gross earnings basis and are not listed on the 
287.8   records of the county auditor or the county treasurer, the 
287.9   owners thereof shall be ascertained by any practicable means and 
287.10  mailed notice shall be given them as herein provided.  Failure 
287.11  to give mailed notice or any defects in the notice shall not 
287.12  invalidate the proceedings of the board or the local governing 
287.13  body. 
287.14     Subd. 3.  [BOARD PROCEEDINGS PERTAINING TO HEARING.] Prior 
287.15  to adoption of the resolution calling for such a hearing, the 
287.16  board shall secure from the district engineer or some other 
287.17  competent person of the board's selection a report advising it 
287.18  in a preliminary way as to whether the proposed project is 
287.19  feasible, necessary, and cost effective and as to whether it 
287.20  should best be made as proposed or in connection with some other 
287.21  project and the estimated costs of the project as recommended; 
287.22  but no error or omission in such report shall invalidate the 
287.23  proceeding.  The board may also take such other steps prior to 
287.24  the hearing, as well in its judgment provide helpful information 
287.25  in determining the desirability and feasibility of the project 
287.26  including, but not limited to, preparation of plans and 
287.27  specifications and advertisement for bids thereon.  The hearing 
287.28  may be adjourned from time to time and a resolution ordering the 
287.29  project may be adopted at any time within six months after the 
287.30  date of hearing.  In ordering the project the board may reduce 
287.31  but not increase the extent of the project as stated in the 
287.32  notice of hearing, unless another hearing is held, and shall 
287.33  find that the project as ordered is in accordance with the 
287.34  comprehensive plan and program adopted by the board pursuant to 
287.35  section 5. 
287.36     Subd. 4.  [EMERGENCY ACTION.] If the board by resolution 
288.1   adopted by the affirmative vote of not less than two-thirds of 
288.2   its members determines that an emergency exists requiring the 
288.3   immediate purchase of materials or supplies or the making of 
288.4   emergency repairs, it may order the purchase of such supplies 
288.5   and materials and the making of such repairs prior to any 
288.6   hearing required under this section, provided that the board 
288.7   shall set as early a date as practicable for such hearing at the 
288.8   time it declares such emergency.  All other provisions of this 
288.9   section shall be followed in giving notice of and conducting 
288.10  such hearing.  Nothing herein shall be construed as preventing 
288.11  the board or its agents from purchasing maintenance supplies or 
288.12  incurring maintenance costs without regard to the requirements 
288.13  of this section. 
288.14     Subd. 5.  [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A 
288.15  local government unit may specially assess all or any part of 
288.16  the costs of acquisition and betterment as herein provided, of 
288.17  any project ordered by the board pursuant to this section.  Such 
288.18  special assessments shall be levied in accordance with Minnesota 
288.19  Statutes, sections 429.051 to 429.081, except as otherwise 
288.20  provided in this subdivision.  No other provisions of Minnesota 
288.21  Statutes, chapter 429, shall apply.  For purposes of levying 
288.22  such special assessments, the hearing on such project required 
288.23  in subdivision 1 shall serve as the hearing on the making of the 
288.24  original improvement provided for by Minnesota Statutes, section 
288.25  429.051.  The area assessed may be less than but may not exceed 
288.26  the area proposed to be assessed as stated in the notice of 
288.27  hearing on the project provided for in subdivision 2.  For the 
288.28  purpose of determining the allocable cost of the project, or 
288.29  part thereof, to the local government unit, the government unit 
288.30  may adopt one of the following procedures. 
288.31     (a) At any time after a contract is let for the project, 
288.32  the local government unit may obtain from the board a current 
288.33  written estimate, on the basis of such historical and reasonably 
288.34  projected data as may be available, of that part of the total 
288.35  costs of acquisition and betterment of such project or of some 
288.36  portion of the project which the government unit shall 
289.1   designate, which will be allocated to the government unit and 
289.2   the number of years over which such costs will be allocated as 
289.3   current costs of acquisition, betterment, and debt service 
289.4   pursuant to section 9.  The board shall not in any way be bound 
289.5   by this estimate for the purpose of allocating the costs of such 
289.6   project to local government units. 
289.7      (b) The governing body may obtain from the board a written 
289.8   statement setting forth, for such prior period as the governing 
289.9   body designates, that portion of the costs previously allocated 
289.10  to the local government unit as current costs of acquisition, 
289.11  betterment, and debt service only, of all or any part of the 
289.12  project designated by the governing body.  In addition to the 
289.13  allocable costs so ascertained, the local government unit may 
289.14  include in the total expense it will pay, as a basis for levying 
289.15  assessments, all other expenses incurred directly by the 
289.16  government unit in connection with said project, or any part 
289.17  thereof.  Special assessments levied by the government unit with 
289.18  respect to previously allocated costs ascertained under this 
289.19  paragraph shall be payable in equal annual installments 
289.20  extending over a period not exceeding by more than one year the 
289.21  number of years which such costs have been allocated to the 
289.22  government unit or the estimated useful life of said project, or 
289.23  part thereof, whichever number of years is the lesser.  No 
289.24  limitation is placed upon the number of times the governing body 
289.25  of a government unit may assess such previously allocated costs 
289.26  not previously assessed by the government unit.  The power to 
289.27  specially assess provided for in this section shall be in 
289.28  addition and supplemental to all other powers of government 
289.29  units to levy special assessments. 
289.30     Sec. 12.  [INITIAL COSTS.] 
289.31     Subdivision 1.  [CONTRIBUTIONS OR ADVANCES FROM LOCAL 
289.32  GOVERNMENT UNITS.] The board may, at such time as it deems 
289.33  necessary and proper, request from all or some of the local 
289.34  government units necessary money to defray the costs of any 
289.35  obligations assumed under section 6 and the costs of 
289.36  administration, operation, and maintenance.  Before making such 
290.1   request, the board shall, by formal resolution, determine the 
290.2   necessity for such money, setting forth in such resolution the 
290.3   purposes for which such money is needed and the estimated amount 
290.4   for each such purpose.  Upon receiving such request, the 
290.5   governing body of each such government unit may provide for 
290.6   payment of the amount requested or such part thereof as it deems 
290.7   fair and reasonable.  Such money may be paid out of general 
290.8   revenue funds or any other available funds of any local 
290.9   government unit and the governing bodies thereof may levy taxes 
290.10  to provide funds therefor, free from any existing limitations 
290.11  imposed by law or charter.  Such money may be provided by such 
290.12  government units with or without interest but if interest is 
290.13  charged it shall not exceed five percent per annum.  The board 
290.14  shall credit the local government units for such payments in 
290.15  allocating current costs pursuant to section 9, on such terms 
290.16  and at such times as it may agree with the unit furnishing the 
290.17  same. 
290.18     Subd. 2.  [LIMITED TAX LEVY.] The board may levy ad valorem 
290.19  taxes on all taxable property in the district to defray any of 
290.20  the costs described in subdivision 1, provided that such costs 
290.21  have not been defrayed by contribution under subdivision 1. 
290.22     Before certification of such levy to the county auditor, 
290.23  the board shall determine the need for the money to be derived 
290.24  from such levy by formal resolution setting forth in said 
290.25  resolution the purposes for which the tax money will be used and 
290.26  the amount proposed to be used for each such purpose.  In 
290.27  allocating current costs pursuant to section 9 the board shall 
290.28  credit the government units for taxes collected pursuant to levy 
290.29  made under this subdivision on such terms and at such time or 
290.30  times as the board deems fair and reasonable and upon such terms 
290.31  as are consistent with the provisions of section 9, subdivision 
290.32  2. 
290.33     Sec. 13.  [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 
290.34     Subdivision 1.  [BUDGET ANTICIPATION CERTIFICATES OF 
290.35  INDEBTEDNESS.] (a) At any time or times after adoption of its 
290.36  annual budget and in anticipation of the collection of tax and 
291.1   other revenues estimated and set forth by the board in such 
291.2   budget, except: 
291.3      (1) taxes already anticipated by the issuance of 
291.4   certificates under subdivision 2; 
291.5      (2) deficiency taxes levied pursuant to this subdivision; 
291.6   and 
291.7      (3) taxes levied for the payment of certificates issued 
291.8   pursuant to subdivision 3, the board may by resolution, 
291.9   authorize the issuance, negotiation, and sale in accordance with 
291.10  subdivision 5 in such form and manner and upon such terms as it 
291.11  may determine of its negotiable general obligation certificates 
291.12  of indebtedness in aggregate principal amounts not exceeding 50 
291.13  percent of the total amount of such tax collections and other 
291.14  revenues and maturing not later than three months after the 
291.15  close of the budget year in which issued.  The proceeds of the 
291.16  sale of such certificates shall be used solely for the purposes 
291.17  for which such tax collections and other revenues are to be 
291.18  expended pursuant to such budget. 
291.19     (b) All such tax collections and other revenues included in 
291.20  the budget for such budget year, after the expenditures of such 
291.21  tax collections and other revenues in accordance with the 
291.22  budget, shall be irrevocably pledged and appropriated to a 
291.23  special fund to pay the principal and interest on the 
291.24  certificates when due.  If for any reason such tax collections 
291.25  and other revenues are insufficient to pay the certificates and 
291.26  interest when due, the board shall levy a tax in the amount of 
291.27  the deficiency on all taxable property in the district and shall 
291.28  appropriate this amount when received to the special fund. 
291.29     Subd. 2.  [TAX LEVY ANTICIPATION CERTIFICATES OF 
291.30  INDEBTEDNESS.] At any time or times after a tax is levied by the 
291.31  board pursuant to section 12, subdivision 2, and certified to 
291.32  the county auditors in anticipation of the collection of such 
291.33  tax, provided that such tax has not been anticipated by the 
291.34  issuance of certificates under subdivision 1, the board may, by 
291.35  resolution, authorize the issuance, negotiation, and sale in 
291.36  accordance with subdivision 5 in such form and manner and upon 
292.1   such terms and conditions as it may determine of its negotiable 
292.2   general obligation tax levy anticipation certificates of 
292.3   indebtedness in aggregate principal amounts not exceeding 50 
292.4   percent of such uncollected tax as to which no penalty for 
292.5   nonpayment or delinquency has attached.  Such certificates shall 
292.6   mature not later than April 1 in the year following the year in 
292.7   which such tax is collectible.  The proceeds of the tax in 
292.8   anticipation of which such certificates were issued and other 
292.9   funds which may become available shall be applied to the extent 
292.10  necessary to repay such certificates. 
292.11     Subd. 3.  [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 
292.12  any budget year the receipts of tax and other revenues should 
292.13  for some unforeseen cause become insufficient to pay the board's 
292.14  current expenses, or if any calamity or other public emergency 
292.15  should subject it to the necessity of making extraordinary 
292.16  expenditures, the board may by resolution authorize the 
292.17  issuance, negotiation, and sale in accordance with subdivision 5 
292.18  in such form and manner and upon such terms and conditions as it 
292.19  may determine of its negotiable general obligation certificates 
292.20  of indebtedness in an amount sufficient to meet such deficiency, 
292.21  and the board shall forthwith levy on all taxable property in 
292.22  the district a tax sufficient to pay the certificates and 
292.23  interest thereon and shall appropriate all collections of such 
292.24  tax to a special fund created for the payment of such 
292.25  certificates and the interest thereon. 
292.26     Subd. 4.  [GENERAL OBLIGATION BONDS.] The board may by 
292.27  resolution authorize the issuance of general obligation bonds 
292.28  maturing serially in one or more annual or semiannual 
292.29  installments, for the acquisition or betterment of any part of 
292.30  the district disposal system, including but without limitation 
292.31  the payment of interest during construction and for a reasonable 
292.32  period thereafter, or for the refunding of outstanding bonds, 
292.33  certificates of indebtedness, or judgments.  The board shall 
292.34  pledge its full faith and credit and taxing power for the 
292.35  payment of such bonds and shall provide for the issuance and 
292.36  sale and for the security of such bonds in the manner provided 
293.1   in Minnesota Statutes, chapter 475, and shall have the same 
293.2   powers and duties as a municipality issuing bonds under that 
293.3   law.  No election shall be required to authorize the issuance of 
293.4   such bonds and the debt limitations of Minnesota Statutes, 
293.5   chapter 475, shall not apply to such bonds.  The board may also 
293.6   pledge for the payment of such bonds and deduct from the amount 
293.7   of any tax levy required under Minnesota Statutes, section 
293.8   475.61, subdivision 1, any sums receivable under section 10 or 
293.9   any state and federal grants anticipated by the board and may 
293.10  covenant to refund such bonds if and when and to the extent that 
293.11  for any reasons such revenues, together with other funds 
293.12  properly available and appropriated for such purpose, are not 
293.13  sufficient to pay all principal and interest due or about to 
293.14  become due thereon, provided that such revenues have not been 
293.15  anticipated by the issuance of certificates under subdivision 1. 
293.16  All bonds which have been or shall hereafter be issued and sold 
293.17  in conformity with the provisions of this subdivision, and 
293.18  otherwise in conformity with law, are hereby authorized, 
293.19  legalized, and validated. 
293.20     Subd. 5.  [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 
293.21  Certificates issued under subdivisions 1, 2, and 3 may be issued 
293.22  and sold by negotiation, without public sale, and may be sold at 
293.23  a price equal to such percentage of the par value thereof, plus 
293.24  accrued interest, and bearing interest at such rate or rates as 
293.25  may be determined by the board.  No election shall be required 
293.26  to authorize the issuance of such certificates.  Such 
293.27  certificates shall bear the same rate of interest after maturity 
293.28  as before and the full faith and credit and taxing power of the 
293.29  board shall be pledged to the payment of such certificates. 
293.30     Sec. 14.  [TAX LEVIES.] 
293.31     The board shall have power to levy taxes for the payment of 
293.32  bonds or other obligations assumed by the district under section 
293.33  6 and for debt service of the district disposal system 
293.34  authorized in section 13 upon all taxable property within the 
293.35  district without limitation of rate or amount and without 
293.36  affecting the amount or rate of taxes which may be levied by the 
294.1   board for other purposes or by any local government unit in the 
294.2   district.  No other provision of law relating to debt limit 
294.3   shall restrict or in any way limit the power of the board to 
294.4   issue the bonds and certificates authorized in section 13.  The 
294.5   board shall also have power to levy taxes as provided in 
294.6   sections 10 and 12.  The county auditor shall annually assess 
294.7   and extend upon the tax rolls the portion of the taxes levied by 
294.8   the board in each year which is certified to the auditor by the 
294.9   board.  The county treasurer shall collect and make settlement 
294.10  of such taxes with the treasurer of the board. 
294.11     Sec. 15.  [DEPOSITORIES.] 
294.12     The board shall from time to time designate one or more 
294.13  national or state banks, or trust companies authorized to do a 
294.14  banking business, as official depositories for money of the 
294.15  board, and thereupon shall require the treasurer to deposit all 
294.16  or a part of such money in such institutions.  Such designation 
294.17  shall be in writing and shall set forth all the terms and 
294.18  conditions upon which the deposits are made, and shall be signed 
294.19  by the chair and treasurer, and made a part of the minutes of 
294.20  the board.  Any bank or trust company so designated shall 
294.21  qualify as a depository by furnishing a corporate surety bond or 
294.22  collateral in the amounts required by Minnesota Statutes, 
294.23  section 118A.03.  However, no bond or collateral shall be 
294.24  required to secure any deposit insofar as it is insured under 
294.25  federal law. 
294.26     Sec. 16.  [MONEY; ACCOUNTS AND INVESTMENTS.] 
294.27     Subdivision 1.  [RECEIPT AND APPLICATION.] All money 
294.28  received by the board shall be deposited or invested by the 
294.29  treasurer and disposed of as the board may direct in accordance 
294.30  with its budget; provided that any money that has been pledged 
294.31  or dedicated by the board to the payment of obligations or 
294.32  interest thereon or expenses incident thereto, or for any other 
294.33  specific purpose authorized by law, shall be paid by the 
294.34  treasurer into the fund to which they have been pledged. 
294.35     Subd. 2.  [FUNDS AND ACCOUNTS.] The board's treasurer shall 
294.36  establish such funds and accounts as may be necessary or 
295.1   convenient to handle the receipts and disbursements of the board 
295.2   in an orderly fashion. 
295.3      Subd. 3.  [DEPOSIT AND INVESTMENT.] The money on hand in 
295.4   said funds and accounts may be deposited in the official 
295.5   depositories of the board or invested as hereinafter provided. 
295.6   The amount thereof not currently needed or required by law to be 
295.7   kept in cash on deposit may be invested in obligations 
295.8   authorized for the investment of municipal sinking funds by 
295.9   law.  The money may also be held under certificates of deposit 
295.10  issued by any official depository of the board.  All investments 
295.11  by the board must conform to an investment policy adopted by the 
295.12  board and amended from time to time. 
295.13     Subd. 4.  [BONDS PROCEEDS.] The use of proceeds of all 
295.14  bonds issued by the board for the acquisition and betterment of 
295.15  the district disposal system, and the use, other than 
295.16  investment, of all money on hand in any sinking fund or funds of 
295.17  the board, shall be governed by Minnesota Statutes, chapter 475, 
295.18  this article, and the resolutions authorizing the issuance of 
295.19  the bonds.  Such bond proceeds when received shall be 
295.20  transferred to the treasurer of the board for safekeeping, 
295.21  investment, and payment of the costs for which they were issued. 
295.22     Subd. 5.  [AUDIT.] The board shall provide for and pay the 
295.23  cost of an independent annual audit of its official books and 
295.24  records by the state public examiner or a certified public 
295.25  accountant. 
295.26     Sec. 17.  [GENERAL POWERS OF BOARD.] 
295.27     Subdivision 1.  [ALL NECESSARY OR CONVENIENT POWER.] The 
295.28  board shall have all powers which may be necessary or convenient 
295.29  to discharge the duties imposed upon it by law.  The powers 
295.30  shall include those herein specified, but the express grant or 
295.31  enumeration of powers does not limit the generality or scope of 
295.32  the grant of power contained in this subdivision. 
295.33     Subd. 2.  [SUITS.] The board may sue or be sued. 
295.34     Subd. 3.  [CONTRACTS.] The board may enter into any 
295.35  contract necessary or proper for the exercise of its powers of 
295.36  the accomplishment of its purposes. 
296.1      Subd. 4.  [RULES.] The board shall have the power to adopt 
296.2   rules relating to the board's responsibilities and may provide 
296.3   penalties for the violation thereof not exceeding the maximum 
296.4   which may be specified for a misdemeanor, and the cost of 
296.5   prosecution may be added to the penalties imposed.  Any rule 
296.6   prescribing a penalty for violation shall be published at least 
296.7   once in a newspaper having general circulation in the district.  
296.8   Such violations may be prosecuted before any court in the 
296.9   district having jurisdiction of misdemeanor, and every such 
296.10  court shall have jurisdiction of such violations.  Any constable 
296.11  or other peace officer of any municipality in the district may 
296.12  make arrests for such violations committed anywhere in the 
296.13  district in like manner and with like effect as for violations 
296.14  of village ordinances or for statutory misdemeanors.  All fines 
296.15  collected in such cases shall be deposited in the treasury of 
296.16  the board, or may be allocated between the board and the 
296.17  municipality in which such prosecution occurs on such basis as 
296.18  the board and the municipality agree. 
296.19     Subd. 5.  [GIFTS; GRANTS.] The board may accept gifts, may 
296.20  apply for and accept grants or loans of money or other property 
296.21  from the United States, the state, or any person for any of its 
296.22  purposes, may enter into any agreement required in connection 
296.23  herewith, and may hold, use, and dispose of such money or 
296.24  property in accordance with the terms of the gift, grant, loan, 
296.25  or agreement relating thereto; and, with respect to any loans or 
296.26  grants of funds or real or personal property or other assistance 
296.27  from any state or federal government or any agency or 
296.28  instrumentality thereof, the board may contract to do and 
296.29  perform all acts and things required as a condition or 
296.30  consideration therefore pursuant to state or federal law or 
296.31  regulations, whether or not included among the powers expressly 
296.32  granted to the board in this article. 
296.33     Subd. 6.  [JOINT POWERS.] The board may act under Minnesota 
296.34  Statutes, section 471.59, or any other appropriate law providing 
296.35  for joint or cooperative action between government units. 
296.36     Subd. 7.  [RESEARCH, HEARINGS, INVESTIGATIONS, ADVISE.] The 
297.1   board may conduct research studies and programs, collect and 
297.2   analyze data, prepare reports, maps, charts, and tables, and 
297.3   conduct all necessary hearings and investigations in connection 
297.4   with the design, construction, and operation of the district 
297.5   disposal system; and may advise and assist other government 
297.6   units on system planning matters within the scope of its powers, 
297.7   duties, and objectives and may provide at the request of any 
297.8   such governmental unit such other technical and administrative 
297.9   assistance as the board deems appropriate for the government 
297.10  unit to carry out the powers and duties vested in the government 
297.11  unit under this article or imposed on by the board. 
297.12     Subd. 8.  [EMPLOYEES, CONTRACTORS, INSURANCE.] The board 
297.13  may employ on such terms as it deems advisable, persons or firms 
297.14  performing engineering, legal, or other services of a 
297.15  professional nature; require any employee to obtain and file 
297.16  with it an individual bond or fidelity insurance policy; and 
297.17  procure insurance in such amounts as it deems necessary against 
297.18  liability of the board or its officers or both, for personal 
297.19  injury or death and property damage or destruction, with the 
297.20  force and effect stated in Minnesota Statutes, chapter 466, and 
297.21  against risks of damage to or destruction of any of its 
297.22  facilities, equipment, or other property as it deems necessary. 
297.23     Subd. 9.  [PROPERTY.] The board may acquire by purchase, 
297.24  lease, condemnation, gift, or grant, and real or personal 
297.25  property including positive and negative easements and water and 
297.26  air rights, and it may construct, enlarge, improve, replace, 
297.27  repair, maintain, and operate any interceptor, treatment works, 
297.28  or water facility determined to be necessary or convenient for 
297.29  the collection and disposal of sewage in the district.  Any 
297.30  local government unit and the commissioners of transportation 
297.31  and natural resources may convey to or permit the use of any 
297.32  such facilities owned or controlled by it, by the board, subject 
297.33  to the rights of the holders of any bonds issued with respect 
297.34  thereto, with or without compensation, without an election or 
297.35  approval by any other government unit or agency.  All powers 
297.36  conferred by this subdivision may be exercised both within or 
298.1   without the district as may be necessary for the exercise by the 
298.2   board of its powers or the accomplishment of its purposes.  The 
298.3   board may hold, lease, convey, or otherwise dispose of such 
298.4   property for its purposes upon such terms and in such manner as 
298.5   it shall deem advisable.  Unless otherwise provided, the right 
298.6   to acquire lands and property rights by condemnation shall be 
298.7   exercised in accordance with Minnesota Statutes, chapter 117, 
298.8   and shall apply to any property or interest therein owned by any 
298.9   local government unit; provided, that no such property devoted 
298.10  to an actual public use at the time, or held to be devoted to 
298.11  such use within a reasonable time, shall be so acquired unless a 
298.12  court of competent jurisdiction shall determine that the use 
298.13  proposed by the board is paramount to such use.  Except in case 
298.14  of property in actual public use, the board may take possession 
298.15  of any property of which condemnation proceedings have been 
298.16  commenced at any time after the issuance of a court order 
298.17  appointing commissioners for its condemnation. 
298.18     Subd. 10.  [RIGHTS-OF-WAY.] The board may construct or 
298.19  maintain its systems or facilities in, along, on, under, over, 
298.20  or through public waters, streets, bridges, viaducts, and other 
298.21  public right-of-way without first obtaining a franchise from any 
298.22  county or local government unit having jurisdiction over them; 
298.23  but such facilities shall be constructed and maintained in 
298.24  accordance with the ordinances and resolutions of any such 
298.25  county or government unit relating to construction, 
298.26  installation, and maintenance of similar facilities on such 
298.27  public properties and shall not unnecessarily obstruct the 
298.28  public use of such rights-of-way. 
298.29     Subd. 11.  [DISPOSAL OF PROPERTY.] The board may sell, 
298.30  lease, or otherwise dispose of any real or personal property 
298.31  acquired by it which is no longer required for accomplishment of 
298.32  its purposes.  Such property may be sold in the manner provided 
298.33  by Minnesota Statutes, section 469.065, insofar as practical.  
298.34  The board may give such notice of sale as it shall deem 
298.35  appropriate.  When the board determines that any property or any 
298.36  part of the district disposal system which has been acquired 
299.1   from a local government unit without compensation is no longer 
299.2   required but is required as a local facility by the government 
299.3   unit from which it was acquired, the board may by resolution 
299.4   transfer it to such government unit. 
299.5      Subd. 12.  [JOINT OPERATIONS.] The board may contract with 
299.6   the United States or any agency thereof, any state or agency 
299.7   thereof, or any regional public planning body in the state with 
299.8   jurisdiction over any part of the district, or any other 
299.9   municipal or public corporation, or governmental subdivision in 
299.10  any state, for the joint use of any facility owned by the board 
299.11  or such entity, for the operation by such entity of any system 
299.12  or facility of the board, or for the performance on the board's 
299.13  behalf of any service including, but not limited to, planning, 
299.14  on such terms as may be agreed upon by the contracting parties.  
299.15  Unless designated by the board as a local sanitary sewer 
299.16  facility, any treatment works or interceptor jointly used, or 
299.17  operated on behalf of the board, as provided in this 
299.18  subdivision, shall be deemed to be operated by the board for 
299.19  purposes of including said facilities in the district disposal 
299.20  system. 
299.21     Sec. 18.  [LOCAL FACILITIES.] 
299.22     Subdivision 1.  [SANITARY SEWER FACILITIES.] Except as 
299.23  otherwise provided in this article, local government units shall 
299.24  retain responsibility for the planning, design, acquisition, 
299.25  betterment, operation, administration, and maintenance of all 
299.26  local sanitary sewer facilities as provided by law. 
299.27     Subd. 2.  [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY 
299.28  SEWER FACILITIES.] The board shall upon request of any 
299.29  government unit or units assume either alone or jointly with the 
299.30  local government unit all or any part of the responsibility of 
299.31  the local government unit described in subdivision 1.  Except as 
299.32  provided in subdivision 4 and for the purpose of exercising such 
299.33  responsibility, the board shall have all the powers and duties 
299.34  elsewhere conferred in this article with the same force and 
299.35  effect as if such local sanitary sewer facilities were a part of 
299.36  the district disposal system. 
300.1      Subd. 3.  [WATER AND STREET FACILITIES.] The board may, 
300.2   upon request of any governmental unit or units, enter into an 
300.3   agreement under which the board may assume either alone or 
300.4   jointly with such unit or units, the responsibility for the 
300.5   acquisition and construction of water and street facilities in 
300.6   conjunction with (1) any project for the acquisition or 
300.7   betterment of the district disposal system, or (2) any project 
300.8   undertaken by the board under subdivision 2.  Except as provided 
300.9   in subdivision 4, and for the purpose of exercising any 
300.10  responsibilities pursuant to this subdivision, the board shall 
300.11  have all the powers and duties elsewhere conferred in this 
300.12  article with the same force and effect as if such water or 
300.13  street facilities were a part of the district disposal system. 
300.14     Subd. 4.  [ALLOCATION OF CURRENT COSTS.] All current costs 
300.15  attributable to responsibilities assumed by the board over local 
300.16  sanitary sewer facilities and water and street facilities as 
300.17  provided in this section shall be allocated solely to the local 
300.18  unit for or with whom such responsibilities are assumed on such 
300.19  terms and over such period as the board determines to be 
300.20  equitable and in the best interest of the district, provided 
300.21  that if two or more government units form a region in accordance 
300.22  with this section, all or part of such current costs 
300.23  attributable to the region shall at the request of its joint 
300.24  board be allocated to the region and provided in the agreement 
300.25  establishing the region. 
300.26     Subd. 5.  [PART OF DISTRICT SYSTEM.] Nothing contained in 
300.27  this section or in any other part of this article shall be 
300.28  construed to prevent the board from including, where 
300.29  appropriate, treatment works or interceptors, previously 
300.30  designated or treated as local sanitary sewer facilities as a 
300.31  part of the district disposal system. 
300.32     Sec. 19.  [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE 
300.33  DISTRICT.] 
300.34     The board may contract with the United States or any agency 
300.35  thereof, any state or any agency thereof, or any municipal or 
300.36  public corporation, governmental subdivision or agency or 
301.1   political subdivision in any state, outside the jurisdiction of 
301.2   the board, for furnishing to such entities any services which 
301.3   the board may furnish to local government units in the district 
301.4   under this article including, but not limited to, planning for 
301.5   and the acquisition, betterment, operation, administration, and 
301.6   maintenance of any or all interceptors, treatment works, and 
301.7   local sanitary sewer facilities, provided that the board may 
301.8   further include as one of the terms of the contract that such 
301.9   entity also pay to the board such amount as may be agreed upon 
301.10  as a reasonable estimate of the proportionate share properly 
301.11  allocable to the entity of costs of acquisition, betterment, and 
301.12  debt service previously allocated to local government units in 
301.13  the district.  When such payments are made by such entities to 
301.14  the board, they shall be applied in reduction of the total 
301.15  amount of costs thereafter allocated to each local government 
301.16  unit in the district, on such equitable basis as the board deems 
301.17  to be in the best interest of the district.  Any municipality in 
301.18  the state of Minnesota may enter into such contract and perform 
301.19  all acts and things required as a condition or consideration 
301.20  therefore consistent with the purpose of this article, whether 
301.21  or not included among the powers otherwise granted to such 
301.22  municipality by law or charter, such powers to include those 
301.23  powers set out in section 10, subdivisions 3, 3a, and 4. 
301.24     Sec. 20.  [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 
301.25  AND EQUIPMENT.] 
301.26     Subdivision 1.  [PLANS AND SPECIFICATIONS.] When the board 
301.27  orders a project involving the acquisition or betterment of a 
301.28  part of the district disposal system it shall cause plans and 
301.29  specifications of this project to be made, or if previously 
301.30  made, to be modified, if necessary, and to be approved by the 
301.31  agency if required, and after any required approval by the 
301.32  agency, one or more contracts for work and materials called for 
301.33  by such plans and specification may be awarded as provided in 
301.34  this section. 
301.35     Subd. 2.  [UNIFORM MUNICIPAL CONTRACTING LAW.] Except as 
301.36  otherwise provided in this section, all contracts for work to be 
302.1   done or for purchases of materials, supplies, or equipment shall 
302.2   be done in accordance with Minnesota Statutes, section 471.345. 
302.3      Subd. 3.  [CONTRACTS OR PURCHASES.] The board may, without 
302.4   advertising for bids, enter into any contract or purchase any 
302.5   materials, supplies, or equipment of the type referred to in 
302.6   subdivision 2 in accordance with applicable state law. 
302.7      Sec. 21.  [ANNEXATION OF TERRITORY.] 
302.8      Any municipality in Douglas county or Pope county, upon 
302.9   resolution adopted by a four-fifths vote of its governing body, 
302.10  may petition the board for annexation to the district of the 
302.11  area then comprising the municipality, or any part thereof and, 
302.12  if accepted by the board, such area shall be deemed annexed to 
302.13  the district and subject to the jurisdiction of the board under 
302.14  the terms and provisions of this article.  The territory so 
302.15  annexed shall be subject to taxation and assessment pursuant to 
302.16  the provisions of this article and shall be subject to taxation 
302.17  by the board like other property in the district for the payment 
302.18  of principal and interest thereafter becoming due on general 
302.19  obligations of the board, whether authorized or issued before or 
302.20  after such annexation.  The board may, in its discretion, 
302.21  condition approval of the annexation upon the contribution, by 
302.22  or on behalf of the municipality petitioning for annexation, to 
302.23  the board of such amount as may be agreed upon as being a 
302.24  reasonable estimate of the proportionate share, properly 
302.25  allocable to the municipality, of costs or acquisition, 
302.26  betterment, and debt service previously allocated to local 
302.27  government units in the district, on such terms as may be agreed 
302.28  upon; and in place of or in addition thereto such other and 
302.29  further conditions as the board deems in the best interests of 
302.30  the district.  Notwithstanding any other provisions of this 
302.31  article to the contrary, the conditions established for 
302.32  annexation may include the requirement that the annexed 
302.33  municipality pay for, contract for, and oversee the construction 
302.34  of local sanitary sewer facilities and interceptor sewers as 
302.35  those terms are defined in section 2.  For the purpose of paying 
302.36  such contribution or of satisfying any other condition 
303.1   established by the board, the municipality petitioning 
303.2   annexation may exercise the powers conferred in section 10.  
303.3   When such contributions are made by the municipality to the 
303.4   board, they shall be applied in reduction of the total amount of 
303.5   costs thereafter allocated to each local government unit in the 
303.6   district, on such equitable basis as the board deems to be in 
303.7   the best interests of the district, applying so far as 
303.8   practicable and appropriate the criteria set forth in section 9, 
303.9   subdivision 2.  Upon annexation of such territory, the secretary 
303.10  of the board shall certify to the auditor and treasurer of the 
303.11  county in which the municipality is located the fact of such 
303.12  annexation and a legal description of the territory annexed. 
303.13     Sec. 22.  [PROPERTY EXEMPT FROM TAXATION.] 
303.14     Any properties, real or personal, owned, leased, 
303.15  controlled, used, or occupied by the sanitary sewer board for 
303.16  any purpose under this article are declared to be acquired, 
303.17  owned, leased, controlled, used, and occupied for public, 
303.18  governmental, and municipal purposes, and are exempt from 
303.19  taxation by the state or any political subdivision of the state, 
303.20  provided that such properties are subject to special assessments 
303.21  levied by a political subdivision for a local improvement in 
303.22  amounts proportionate to and not exceeding the special benefit 
303.23  received by the properties from such improvement.  No possible 
303.24  use of any such properties in any manner different from their 
303.25  use as part of the disposal system at the time shall be 
303.26  considered in determining the special benefit received by such 
303.27  properties.  All such assessments shall be subject to final 
303.28  approval by the board, whose determination of the benefits shall 
303.29  be conclusive upon the political subdivision levying the 
303.30  assessment.  All bonds, certificates of indebtedness, or other 
303.31  obligations of the board, and the interest thereon, are exempt 
303.32  from taxation by the state or any political subdivision of the 
303.33  state. 
303.34     Sec. 23.  [RELATION TO EXISTING LAWS.] 
303.35     This article prevails over any law or charter inconsistent 
303.36  with it.  The powers conferred on the board under this article 
304.1   do not diminish or supersede the powers conferred on the agency 
304.2   by Minnesota Statutes, chapters 115 and 116. 
304.3      Sec. 24.  [LOCAL APPROVAL.] 
304.4      This article takes effect the day after the governing 
304.5   bodies of the city of Farwell in Pope county and the city of 
304.6   Kensington in Douglas county comply with Minnesota Statutes, 
304.7   section 645.021, subdivision 3, or 30 days after a referendum is 
304.8   held in those cities. 
304.9                              ARTICLE 16
304.10                           MISCELLANEOUS 
304.11     Section 1.  Minnesota Statutes 1997 Supplement, section 
304.12  3.986, subdivision 2, is amended to read: 
304.13     Subd. 2.  [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact" 
304.14  means increased or decreased costs or revenues that a political 
304.15  subdivision would incur as a result of a law enacted after June 
304.16  30, 1997, or rule proposed after June 30 December 31, 1998: 
304.17     (1) that mandates a new program, eliminates an existing 
304.18  mandated program, requires an increased level of service of an 
304.19  existing program, or permits a decreased level of service in an 
304.20  existing mandated program; 
304.21     (2) that implements or interprets federal law and, by its 
304.22  implementation or interpretation, increases or decreases program 
304.23  or service levels beyond the level required by the federal law; 
304.24     (3) that implements or interprets a statute or amendment 
304.25  adopted or enacted pursuant to the approval of a statewide 
304.26  ballot measure by the voters and, by its implementation or 
304.27  interpretation, increases or decreases program or service levels 
304.28  beyond the levels required by the ballot measure; 
304.29     (4) that removes an option previously available to 
304.30  political subdivisions, or adds an option previously unavailable 
304.31  to political subdivisions, thus requiring higher program or 
304.32  service levels or permitting lower program or service levels, or 
304.33  prohibits a specific activity and so forces political 
304.34  subdivisions to use a more costly alternative to provide a 
304.35  mandated program or service; 
304.36     (5) that requires that an existing program or service be 
305.1   provided in a shorter time period and thus increases the cost of 
305.2   the program or service, or permits an existing mandated program 
305.3   or service to be provided in a longer time period, thus 
305.4   permitting a decrease in the cost of the program or service; 
305.5      (6) that adds new requirements to an existing optional 
305.6   program or service and thus increases the cost of the program or 
305.7   service because the political subdivisions have no reasonable 
305.8   alternative other than to continue the optional program; 
305.9      (7) that affects local revenue collections by changes in 
305.10  property or sales and use tax exemptions; 
305.11     (8) that requires costs previously incurred at local option 
305.12  that have subsequently been mandated by the state; or 
305.13     (9) that requires payment of a new fee or increases the 
305.14  amount of an existing fee, or permits the elimination or 
305.15  decrease of an existing fee mandated by the state. 
305.16     (b) When state law is intended to achieve compliance with 
305.17  federal law or court orders, state mandates shall be determined 
305.18  as follows: 
305.19     (1) if the federal law or court order is discretionary, the 
305.20  state law is a state mandate; 
305.21     (2) if the state law exceeds what is required by the 
305.22  federal law or court order, only the provisions of the state law 
305.23  that exceed the federal requirements are a state mandate; and 
305.24     (3) if the state law does not exceed what is required by 
305.25  the federal statute or regulation or court order, the state law 
305.26  is not a state mandate. 
305.27     Sec. 2.  Minnesota Statutes 1997 Supplement, section 3.986, 
305.28  subdivision 4, is amended to read: 
305.29     Subd. 4.  [POLITICAL SUBDIVISION.] A "political 
305.30  subdivision" is a county, or home rule charter or statutory city 
305.31  , town, or other taxing district or municipal corporation. 
305.32     Sec. 3.  Minnesota Statutes 1997 Supplement, section 3.987, 
305.33  subdivision 1, is amended to read: 
305.34     Subdivision 1.  [LOCAL IMPACT NOTES.] The commissioner of 
305.35  finance shall coordinate the development of a local impact note 
305.36  for any proposed legislation introduced after June 30, 1997, or 
306.1   any rule proposed after June 30 December 31, 1998, upon request 
306.2   of the chair or the ranking minority member of either 
306.3   legislative tax committee.  Upon receipt of a request to prepare 
306.4   a local impact note, the commissioner must notify the authors of 
306.5   the proposed legislation or, for an administrative rule, the 
306.6   head of the relevant executive agency or department, that the 
306.7   request has been made.  The local impact note must be prepared 
306.8   as provided in section 3.98, subdivision 2, and made available 
306.9   to the public upon request.  If the action is among the 
306.10  exceptions listed in section 3.988, a local impact note need not 
306.11  be requested nor prepared.  The commissioner shall make a 
306.12  reasonable and timely estimate of the local fiscal impact on 
306.13  each type of political subdivision that would result from the 
306.14  proposed legislation.  The commissioner of finance may require 
306.15  any political subdivision or the commissioner of an 
306.16  administrative agency of the state to supply in a timely manner 
306.17  any information determined to be necessary to determine local 
306.18  fiscal impact.  The political subdivision, its representative 
306.19  association, or commissioner shall convey the requested 
306.20  information to the commissioner of finance with a signed 
306.21  statement to the effect that the information is accurate and 
306.22  complete to the best of its ability.  The political subdivision, 
306.23  its representative association, or commissioner, when requested, 
306.24  shall update its determination of local fiscal impact based on 
306.25  actual cost or revenue figures, improved estimates, or 
306.26  both.  Upon completion of the note, the commissioner must 
306.27  provide a copy to the authors of the proposed legislation or, 
306.28  for an administrative rule, to the head of the relevant 
306.29  executive agency or department. 
306.30     Sec. 4.  Minnesota Statutes 1997 Supplement, section 3.987, 
306.31  subdivision 2, is amended to read: 
306.32     Subd. 2.  [MANDATE EXPLANATIONS.] Before a committee 
306.33  hearing on any bill introduced in the legislature after June 30, 
306.34  1997, that seeks to impose program or financial mandates on 
306.35  political subdivisions must include an attachment from the chair 
306.36  or ranking minority member of the committee may request that the 
307.1   author provide the committee with a note that gives appropriate 
307.2   responses to the following guidelines.  It must state and list: 
307.3      (1) the policy goals that are sought to be attained, 
307.4   the and any performance standards that are to be imposed, and an 
307.5   explanation why the goals and standards will best be served by 
307.6   requiring compliance by on political subdivisions; 
307.7      (2) any performance standards that will allow political 
307.8   subdivisions flexibility and innovation of method in achieving 
307.9   those goals; 
307.10     (3) the reasons for each prescribed standard and the 
307.11  process by which each standard governs input such as staffing 
307.12  and other administrative aspects of the program; 
307.13     (4) the sources of additional revenue, in addition to 
307.14  existing funding for similar programs, that are directly linked 
307.15  to imposition of the mandates that will provide adequate and 
307.16  stable funding for their requirements; 
307.17     (5) what input has been obtained to ensure that the 
307.18  implementing agencies have the capacity to carry out the 
307.19  delegated responsibilities; and 
307.20     (6) the reasons why less intrusive measures such as 
307.21  financial incentives or voluntary compliance would not yield the 
307.22  equity, efficiency, or desired level of statewide uniformity in 
307.23  the proposed program; 
307.24     (6) what input has been obtained to ensure that the 
307.25  implementing agencies have the capacity to carry out the 
307.26  delegated responsibilities; and 
307.27     (7) the efforts put forth, if any, to involve political 
307.28  subdivisions in the creation or development of the proposed 
307.29  mandate. 
307.30     Sec. 5.  Minnesota Statutes 1997 Supplement, section 3.988, 
307.31  subdivision 3, is amended to read: 
307.32     Subd. 3.  [MISCELLANEOUS EXCEPTIONS.] A local impact note 
307.33  or an attachment as provided in section 3.987, subdivision 2, 
307.34  need not be prepared for the cost of a mandated action if the 
307.35  law, including a rulemaking, containing the mandate:  
307.36     (1) accommodates a specific local request; 
308.1      (2) results in no new local government duties; 
308.2      (3) leads to revenue losses from exemptions to taxes; 
308.3      (4) provided only clarifying or conforming, nonsubstantive 
308.4   charges on local government; 
308.5      (5) imposes additional net local costs that are minor (less 
308.6   than $200 an amount less than or equal to one-half of one 
308.7   percent of the local revenue base as defined in section 
308.8   477A.011, subdivision 27, or $50,000, whichever is less for any 
308.9   single local government if the mandate does not apply statewide 
308.10  or less than $3,000,000 $1,000,000 if the mandate is statewide) 
308.11  and do not cause a financial burden on local government; 
308.12     (6) is a law or executive order enacted before July 1, 
308.13  1997, or a rule initially implementing a law enacted before July 
308.14  1, 1997; 
308.15     (7) implements something other than a law or executive 
308.16  order, such as a federal, court, or voter-approved mandate; 
308.17     (8) defines a new crime or redefines an existing crime or 
308.18  infraction; 
308.19     (9) results in savings that equal or exceed costs; 
308.20     (10) (9) requires the holding of elections; 
308.21     (11) (10) ensures due process or equal protection; 
308.22     (12) (11) provides for the notification and conduct of 
308.23  public meetings; 
308.24     (13) (12) establishes the procedures for administrative and 
308.25  judicial review of actions taken by political subdivisions; 
308.26     (14) (13) protects the public from malfeasance, 
308.27  misfeasance, or nonfeasance by officials of political 
308.28  subdivisions; 
308.29     (15) (14) relates directly to financial administration, 
308.30  including the levy, assessment, and collection of taxes; 
308.31     (16) (15) relates directly to the preparation and 
308.32  submission of financial audits necessary to the administration 
308.33  of state laws; or 
308.34     (17) (16) requires uniform standards to apply to public and 
308.35  private institutions without differentiation. 
308.36     Sec. 6.  Minnesota Statutes 1997 Supplement, section 3.989, 
309.1   subdivision 1, is amended to read: 
309.2      Subdivision 1.  [DEFINITIONS.] In this section: 
309.3      (1) "Class A state mandates" means those laws under which 
309.4   the state mandates to political subdivisions, their 
309.5   participation, the organizational structure of the program, and 
309.6   the procedural regulations under which the law must be 
309.7   administered; and 
309.8      (2) "Class B state mandates" means those mandates resulting 
309.9   from legislation enacted after July 1, 1998, that specifically 
309.10  reference this section and that allow the political subdivisions 
309.11  to opt for administration of a law with program elements 
309.12  mandated beforehand and with an assured revenue level from the 
309.13  state of at least 90 percent of full program and administrative 
309.14  costs.  
309.15     Sec. 7.  Minnesota Statutes 1997 Supplement, section 3.989, 
309.16  subdivision 2, is amended to read: 
309.17     Subd. 2.  [REPORT.] The commissioner of finance shall 
309.18  prepare by September 1, 1998 2000, and by September 1 of each 
309.19  even-numbered year thereafter, a report by political 
309.20  subdivisions of the costs of class A state local mandates 
309.21  established after June 30, 1997.  
309.22     The commissioner shall annually include the statewide total 
309.23  of the statement of costs of class A local mandates after June 
309.24  30, 1997, as a notation in the state biennial budget for the 
309.25  next fiscal year. 
309.26     Sec. 8.  Minnesota Statutes 1996, section 16A.102, 
309.27  subdivision 1, is amended to read: 
309.28     Subdivision 1.  [GOVERNOR'S RECOMMENDATION.] By the fourth 
309.29  Monday in January of each odd-numbered year, the governor shall 
309.30  submit to the legislature a recommended revenue target for the 
309.31  next two bienniums.  The recommended revenue target must specify:
309.32     (1) the maximum share of Minnesota personal income to be 
309.33  collected in taxes and other revenues to pay for state and local 
309.34  government services; 
309.35     (2) the division of the share between state and local 
309.36  government revenues; and 
310.1      (3) the appropriate mix and rates of income, sales, and 
310.2   other state and local taxes including property taxes and other 
310.3   revenues, other than property taxes, and the amount of property 
310.4   taxes and the effect of the recommendations on the incidence of 
310.5   the tax burden by income class. 
310.6   The recommendations must be based on the November forecast 
310.7   prepared under section 16A.103. 
310.8      Sec. 9.  Minnesota Statutes 1996, section 16A.102, 
310.9   subdivision 2, is amended to read: 
310.10     Subd. 2.  [LEGISLATIVE BUDGET RESOLUTION.] By March 15 of 
310.11  each odd-numbered year, the legislature shall by concurrent 
310.12  resolution adopt revenue targets for the next two bienniums.  
310.13  The resolution must specify: 
310.14     (1) the maximum share of Minnesota personal income to be 
310.15  collected in taxes and other revenues to pay for state and local 
310.16  government services; 
310.17     (2) the division of the share between state and local 
310.18  government services; and 
310.19     (3) the appropriate mix and rates of income, sales, and 
310.20  other state and local taxes including property taxes and other 
310.21  revenues, other than property taxes, and the amount of property 
310.22  taxes and the effect of the resolution on the incidence of the 
310.23  tax burden by income class. 
310.24  The resolution must be based on the February forecast prepared 
310.25  under section 16A.103 and take into consideration the revenue 
310.26  targets recommended by the governor under subdivision 1.  
310.27     Sec. 10.  Minnesota Statutes 1997 Supplement, section 
310.28  60A.15, subdivision 1, is amended to read: 
310.29     Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
310.30  before April 1, June 1, and December 1 of each year, every 
310.31  domestic and foreign company, including town and farmers' mutual 
310.32  insurance companies, domestic mutual insurance companies, marine 
310.33  insurance companies, health maintenance organizations, community 
310.34  integrated service networks, and nonprofit health service plan 
310.35  corporations, shall pay to the commissioner of revenue 
310.36  installments equal to one-third of the insurer's total estimated 
311.1   tax for the current year.  Except as provided in paragraphs (d), 
311.2   (e), (h), and (i), installments must be based on a sum equal to 
311.3   two percent of the premiums described in paragraph (b). 
311.4      (b) Installments under paragraph (a), (d), or (e) are 
311.5   percentages of gross premiums less return premiums on all direct 
311.6   business received by the insurer in this state, or by its agents 
311.7   for it, in cash or otherwise, during such year. 
311.8      (c) Failure of a company to make payments of at least 
311.9   one-third of either (1) the total tax paid during the previous 
311.10  calendar year or (2) 80 percent of the actual tax for the 
311.11  current calendar year shall subject the company to the penalty 
311.12  and interest provided in this section, unless the total tax for 
311.13  the current tax year is $500 or less. 
311.14     (d) For health maintenance organizations, nonprofit health 
311.15  service plan corporations, and community integrated service 
311.16  networks, the installments must be based on an amount determined 
311.17  under paragraph (h) or (i). 
311.18     (e) For purposes of computing installments for town and 
311.19  farmers' mutual insurance companies and for mutual property 
311.20  casualty companies with total assets on December 31, 1989, of 
311.21  $1,600,000,000 or less, the following rates apply: 
311.22     (1) for all life insurance, two percent; 
311.23     (2) for town and farmers' mutual insurance companies and 
311.24  for mutual property and casualty companies with total assets of 
311.25  $5,000,000 or less, on all other coverages, one percent; and 
311.26     (3) for mutual property and casualty companies with total 
311.27  assets on December 31, 1989, of $1,600,000,000 or less, on all 
311.28  other coverages, 1.26 percent. 
311.29     (f) If the aggregate amount of premium tax payments under 
311.30  this section and the fire marshal tax payments under section 
311.31  299F.21 made during a calendar year is equal to or exceeds 
311.32  $120,000, all tax payments in the subsequent calendar year must 
311.33  be paid by means of a funds transfer as defined in section 
311.34  336.4A-104, paragraph (a).  The funds transfer payment date, as 
311.35  defined in section 336.4A-401, must be on or before the date the 
311.36  payment is due.  If the date the payment is due is not a funds 
312.1   transfer business day, as defined in section 336.4A-105, 
312.2   paragraph (a), clause (4), the payment date must be on or before 
312.3   the funds transfer business day next following the date the 
312.4   payment is due.  
312.5      (g) Premiums under medical assistance, general assistance 
312.6   medical care, the MinnesotaCare program, and the Minnesota 
312.7   comprehensive health insurance plan and all payments, revenues, 
312.8   and reimbursements received from the federal government for 
312.9   Medicare-related coverage as defined in section 62A.31, 
312.10  subdivision 3, paragraph (e), are not subject to tax under this 
312.11  section. 
312.12     (h) For calendar years 1997, 1998, and 1999, the 
312.13  installments for health maintenance organizations, community 
312.14  integrated service networks, and nonprofit health service plan 
312.15  corporations must be based on an amount equal to one percent of 
312.16  premiums described under paragraph (b).  Health maintenance 
312.17  organizations, community integrated service networks, and 
312.18  nonprofit health service plan corporations that have met the 
312.19  cost containment goals established under section 62J.04 in the 
312.20  individual and small employer market for calendar year 1996 are 
312.21  exempt from payment of the tax imposed under this section for 
312.22  premiums paid after March 30, 1997, and before April 1, 1998.  
312.23  Health maintenance organizations, community integrated service 
312.24  networks, and nonprofit health service plan corporations that 
312.25  have met the cost containment goals established under section 
312.26  62J.04 in the individual and small employer market for calendar 
312.27  year 1997 are exempt from payment of the tax imposed under this 
312.28  section for premiums paid after March 30, 1998, and before April 
312.29  1, 1999.  Health maintenance organizations, community integrated 
312.30  service networks, and nonprofit health service plan corporations 
312.31  that have met the cost containment goals established under 
312.32  section 62J.04 in the individual and small employer market for 
312.33  calendar year 1998 are exempt from payment of the tax imposed 
312.34  under this section for premiums paid after March 30, 1999, and 
312.35  before January 1, 2000.  
312.36     (i) For calendar years after 1999, the commissioner of 
313.1   finance shall determine the balance of the health care access 
313.2   fund on September 1 of each year beginning September 1, 1999.  
313.3   If the commissioner determines that there is no structural 
313.4   deficit for the next fiscal year, no tax shall be imposed under 
313.5   paragraph (d) for the following calendar year.  If the 
313.6   commissioner determines that there will be a structural deficit 
313.7   in the fund for the following fiscal year, then the 
313.8   commissioner, in consultation with the commissioner of revenue, 
313.9   shall determine the amount needed to eliminate the structural 
313.10  deficit and a tax shall be imposed under paragraph (d) for the 
313.11  following calendar year.  The commissioner shall determine the 
313.12  rate of the tax as either one-quarter of one percent, one-half 
313.13  of one percent, three-quarters of one percent, or one percent of 
313.14  premiums described in paragraph (b), whichever is the lowest of 
313.15  those rates that the commissioner determines will produce 
313.16  sufficient revenue to eliminate the projected structural 
313.17  deficit.  The commissioner of finance shall publish in the State 
313.18  Register by October 1 of each year the amount of tax to be 
313.19  imposed for the following calendar year. 
313.20     (j) In approving the premium rates as required in sections 
313.21  62L.08, subdivision 8, and 62A.65, subdivision 3, the 
313.22  commissioners of health and commerce shall ensure that any 
313.23  exemption from the tax as described in paragraphs (h) and (i) is 
313.24  reflected in the premium rate. 
313.25     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
313.26  270.60, subdivision 4, is amended to read: 
313.27     Subd. 4.  [PAYMENTS TO COUNTIES.] (a) The commissioner 
313.28  shall pay to a qualified county in which an Indian gaming casino 
313.29  is located ten percent of the state share of all taxes generated 
313.30  from activities on reservations and collected under a tax 
313.31  agreement under this section with the tribal government for the 
313.32  reservation located in the county.  If the tribe has casinos 
313.33  located in more than one county, the payment must be divided 
313.34  equally among the counties in which the casinos are located. 
313.35     (b) A county qualifies for payments is a qualified county 
313.36  under this subdivision only if one of the following conditions 
314.1   is met: 
314.2      (1) the county's per capita income is less than 80 percent 
314.3   of the state per capita personal income, based on the most 
314.4   recent estimates made by the United States Bureau of Economic 
314.5   Analysis; or 
314.6      (2) 30 percent or more of the total market value of real 
314.7   property in the county is exempt from ad valorem taxation. 
314.8      (c) The commissioner shall make the payments required under 
314.9   this subdivision by February 28 of the year following the year 
314.10  the taxes are collected. 
314.11     (d) An amount sufficient to make the payments authorized by 
314.12  this subdivision, not to exceed $1,100,000 in any fiscal year, 
314.13  is annually appropriated from the general fund to the 
314.14  commissioner.  If the authorized payments exceed the amount of 
314.15  the appropriation, the commissioner shall first proportionately 
314.16  reduce the rate payments to counties other than qualified 
314.17  counties so that the total amount equals the appropriation.  If 
314.18  the authorized payments to qualified counties also exceed the 
314.19  amount of the appropriation, the commissioner shall then 
314.20  proportionately reduce the rate so that the total amount to be 
314.21  paid to qualified counties equals the appropriation. 
314.22     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
314.23  270.67, subdivision 2, is amended to read: 
314.24     Subd. 2.  [EXTENSION AGREEMENTS.] When any portion of any 
314.25  tax payable to the commissioner of revenue together with 
314.26  interest and penalty thereon, if any, has not been paid, the 
314.27  commissioner may extend the time for payment for a further 
314.28  period.  When the authority of this section is invoked, the 
314.29  extension shall be evidenced by written agreement signed by the 
314.30  taxpayer and the commissioner, stating the amount of the tax 
314.31  with penalty and interest, if any, and providing for the payment 
314.32  of the amount in installments.  The agreement may contain a 
314.33  confession of judgment for the amount and for any unpaid portion 
314.34  thereof and shall provide that the commissioner may forthwith 
314.35  enter judgment against the taxpayer in the district court of the 
314.36  county of residence as shown upon the taxpayer's tax return for 
315.1   the unpaid portion of the amount specified in the extension 
315.2   agreement.  The agreement shall provide that it can be 
315.3   terminated, after notice by the commissioner, if information 
315.4   provided by the taxpayer prior to the agreement was inaccurate 
315.5   or incomplete, collection of the tax covered by the agreement is 
315.6   in jeopardy, there is a subsequent change in the taxpayer's 
315.7   financial condition, the taxpayer has failed to make a payment 
315.8   due under the agreement, or has failed to pay any other tax or 
315.9   file a tax return coming due after the agreement.  The notice 
315.10  must be given at least 14 calendar days prior to termination, 
315.11  and shall advise the taxpayer of the right to request a 
315.12  reconsideration from the commissioner of whether termination is 
315.13  reasonable and appropriate under the circumstances.  A request 
315.14  for reconsideration does not stay collection action beyond the 
315.15  14-day notice period.  If the commissioner has reason to believe 
315.16  that collection of the tax covered by the agreement is in 
315.17  jeopardy, the commissioner may proceed under sections 270.70, 
315.18  subdivision 2, paragraph (b), and 270.274, and terminate the 
315.19  agreement without regard to the 14-day period.  The commissioner 
315.20  may accept other collateral the commissioner considers 
315.21  appropriate to secure satisfaction of the tax liability.  The 
315.22  principal sum specified in the agreement shall bear interest at 
315.23  the rate specified in section 270.75 on all unpaid portions 
315.24  thereof until the same has been fully paid or the unpaid portion 
315.25  thereof has been entered as a judgment.  The judgment shall bear 
315.26  interest at the rate specified in section 270.75.  If it appears 
315.27  to the commissioner that the tax reported by the taxpayer is in 
315.28  excess of the amount actually owing by the taxpayer, the 
315.29  extension agreement or the judgment entered pursuant thereto 
315.30  shall be corrected.  If after making the extension agreement or 
315.31  entering judgment with respect thereto, the commissioner 
315.32  determines that the tax as reported by the taxpayer is less than 
315.33  the amount actually due, the commissioner shall assess a further 
315.34  tax in accordance with the provisions of law applicable to the 
315.35  tax.  The authority granted to the commissioner by this section 
315.36  is in addition to any other authority granted to the 
316.1   commissioner by law to extend the time of payment or the time 
316.2   for filing a return and shall not be construed in limitation 
316.3   thereof. 
316.4      Sec. 13.  Minnesota Statutes 1997 Supplement, section 
316.5   295.52, subdivision 4, is amended to read: 
316.6      Subd. 4.  [USE TAX; PRESCRIPTION DRUGS.] (a) A person that 
316.7   receives prescription drugs for resale or use in Minnesota, 
316.8   other than from a wholesale drug distributor that paid the tax 
316.9   under subdivision 3, is subject to a tax equal to the price paid 
316.10  to the wholesale drug distributor multiplied by the tax 
316.11  percentage specified in this section.  Liability for the tax is 
316.12  incurred when prescription drugs are received or delivered in 
316.13  Minnesota by the person. 
316.14     (b) A person that receives prescription drugs for use in 
316.15  Minnesota from a nonresident pharmacy required to be registered 
316.16  under section 151.19 is subject to a tax equal to the price paid 
316.17  by the nonresident pharmacy to the wholesale drug distributor or 
316.18  the price received by the nonresident pharmacy, whichever is 
316.19  lower, multiplied by the tax percentage specified in this 
316.20  section.  Liability for the tax is incurred when prescription 
316.21  drugs are received in Minnesota by the person.  
316.22     Sec. 14.  Minnesota Statutes 1996, section 295.52, 
316.23  subdivision 4a, is amended to read: 
316.24     Subd. 4a.  [TAX COLLECTION.] A wholesale drug distributor 
316.25  with nexus in Minnesota, who is not subject to tax under 
316.26  subdivision 3, on all or a particular transaction or a 
316.27  nonresident pharmacy with nexus in Minnesota, is required to 
316.28  collect the tax imposed under subdivision 4, from the purchaser 
316.29  of the drugs and give the purchaser a receipt for the tax paid.  
316.30  The tax collected shall be remitted to the commissioner in the 
316.31  manner prescribed by section 295.55, subdivision 3. 
316.32     Sec. 15.  Minnesota Statutes 1997 Supplement, section 
316.33  297H.04, is amended by adding a subdivision to read: 
316.34     Subd. 3.  [INCINERATION WITH MIXED WASTE; RATE.] Nonmixed 
316.35  municipal solid waste that is separately collected and 
316.36  processed, but must be incinerated with mixed municipal solid 
317.1   waste in accordance with an industrial solid waste management 
317.2   plan approved by the pollution control agency, shall be taxed at 
317.3   the rate for nonmixed municipal solid waste. 
317.4      Sec. 16.  Minnesota Statutes 1996, section 325E.112, is 
317.5   amended by adding a subdivision to read: 
317.6      Subd. 2a.  [REFUND PROGRAM.] A person who accepts from the 
317.7   public used motor oil and used motor oil filters as defined in 
317.8   section 325E.10, subdivisions 3 and 5, may apply for a refund of 
317.9   $250 for the year in which the person operates a facility that 
317.10  qualifies for the reimbursement under subdivision 2, or would 
317.11  qualify for the reimbursement except that it does not accept 
317.12  contaminated motor oil.  The refund is issued by the department 
317.13  of revenue.  In order to claim the refund, the applicant must 
317.14  provide the commissioner of revenue with a copy of a certificate 
317.15  issued to the applicant by the commissioner of the pollution 
317.16  control agency verifying the applicant's eligibility for the 
317.17  refund, and other information as the commissioner may 
317.18  prescribe.  The commissioner of the pollution control agency may 
317.19  issue no more than 200 certificates for any calendar year.  The 
317.20  amount necessary to pay the refunds under this subdivision is 
317.21  appropriated to the commissioner of revenue an amount from the 
317.22  general fund. 
317.23     Sec. 17.  Minnesota Statutes 1997 Supplement, section 
317.24  446A.085, subdivision 1, is amended to read: 
317.25     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
317.26  section, the terms defined in this subdivision have the meanings 
317.27  given them. 
317.28     (a)  [ACT.] "Act" means the National Highway System 
317.29  Designation Act of 1995, Public Law Number 104-59, as amended. 
317.30     (b)  [BORROWER.] "Borrower" means the state, counties, 
317.31  cities, and other governmental entities eligible under the act 
317.32  and state law to apply for and receive loans from the 
317.33  transportation revolving loan fund, the trunk highway revolving 
317.34  loan account, the county state-aid highway revolving loan 
317.35  account, and the municipal state-aid street revolving loan 
317.36  account. 
318.1      (c)  [DEPARTMENT.] "Department" means the department of 
318.2   transportation. 
318.3      (d)  [LOAN.] "Loan" means financial assistance provided for 
318.4   all or part of the cost of a project including money disbursed 
318.5   in anticipation of reimbursement or repayment, loan guarantees, 
318.6   lines of credit, credit enhancements, equipment financing 
318.7   leases, bond insurance, or other forms of financial assistance. 
318.8      (e)  [TRANSPORTATION COMMITTEE.] "Transportation committee" 
318.9   means a committee of the Minnesota public facilities authority, 
318.10  acting on behalf of the Minnesota public facilities authority, 
318.11  consisting of the commissioner of the department of trade and 
318.12  economic development, the commissioner of finance, and the 
318.13  commissioner of transportation. 
318.14     Sec. 18.  [462A.2092] [EMPLOYER HOUSING CONTRIBUTIONS; 
318.15  MATCHING GRANT.] 
318.16     (a) The commissioner may provide matching grants for 
318.17  contributions made by employers for the development, 
318.18  rehabilitation, or acquisition of affordable housing.  An 
318.19  employer contribution is eligible for a matching grant or 
318.20  low-interest loan if the contribution is: 
318.21     (1) made to a fund administered by a nonprofit corporation 
318.22  to which the employer is not associated or to a government 
318.23  agency; and 
318.24     (2) used to develop or rehabilitate affordable housing 
318.25  located in Minnesota or is used to assist low-income and 
318.26  moderate-income households to acquire affordable housing located 
318.27  in Minnesota. 
318.28     (b) The matching grant is available up to the amount of the 
318.29  contribution made by the employer.  The amount of the matching 
318.30  grant may not exceed the amount the commissioner determines is 
318.31  necessary for the financial feasibility of the project or loan.  
318.32  The total matching grants available for an employer's 
318.33  contributions may not exceed $250,000.  The commissioner shall 
318.34  award the matching grant to the housing project or initiative 
318.35  for which the employer contribution is used. 
318.36     Sec. 19.  Minnesota Statutes 1996, section 462A.21, is 
319.1   amended by adding a subdivision to read: 
319.2      Subd. 26.  [EMPLOYER HOUSING CONTRIBUTIONS; MATCHING 
319.3   GRANT.] It may spend money for the purpose of the matching grant 
319.4   for employer contributions program under section 462A.2092, and 
319.5   may pay costs and expenses necessary and incidental to the 
319.6   development and operation of the program. 
319.7      Sec. 20.  Minnesota Statutes 1997 Supplement, section 
319.8   465.715, is amended by adding a subdivision to read: 
319.9      Subd. 1a.  [APPLICATION.] Except as provided by subdivision 
319.10  2, subdivision 1 only applies to a corporation for which a 
319.11  certificate of incorporation is issued by the secretary of state 
319.12  on or after June 1, 1997.  A corporation that had been issued a 
319.13  certificate of incorporation before June 1, 1997, may continue 
319.14  to operate as if it had been created in compliance with 
319.15  subdivision 1.  This subdivision expires July 1, 1999. 
319.16     Sec. 21.  Minnesota Statutes 1997 Supplement, section 
319.17  465.715, is amended by adding a subdivision to read: 
319.18     Subd. 3.  [INFORMATION.] (a) By June 30, 1998, the office 
319.19  of the state auditor shall request from all counties, home rule 
319.20  charter cities, statutory cities, urban towns, and school 
319.21  districts information regarding all corporations, including 
319.22  limited liability companies or limited liability partnerships, 
319.23  whether for profit or not for profit, created by the political 
319.24  subdivision.  The information requested must include information 
319.25  regarding the corporation's incorporation date, organizational 
319.26  structure, purpose, a brief summary of the extent to which the 
319.27  corporation receives or expends public funds, potential public 
319.28  liabilities for conduct of the corporation, public oversight, 
319.29  and public laws applicable to the corporation.  This information 
319.30  must be received by the state auditor on or before October 15, 
319.31  1998. 
319.32     (b) The office of the state auditor shall compile and 
319.33  summarize the information received and report to the senate 
319.34  local and metropolitan government committee and the house of 
319.35  representatives local government and metropolitan affairs 
319.36  committee or their successor committees by January 30, 1999.  
320.1   The report may include recommendations for any changes in laws 
320.2   governing the operation of existing and future corporate 
320.3   entities created by such political subdivisions, and changes in 
320.4   laws needed to clarify the legal status of these corporate 
320.5   entities.  Any corporate entity created by a political 
320.6   subdivision before September 1, 1998, for which a report is not 
320.7   received by the state auditor is not authorized to receive 
320.8   public funds or contract with public entities after July 1, 1999.
320.9      Sec. 22.  Minnesota Statutes 1996, section 469.015, 
320.10  subdivision 4, is amended to read: 
320.11     Subd. 4.  [EXCEPTIONS.] (a) An authority need not require 
320.12  competitive bidding in the following circumstances:  
320.13     (1) in the case of a contract for the acquisition of a 
320.14  low-rent housing project: 
320.15     (i) for which financial assistance is provided by the 
320.16  federal government; 
320.17     (ii) which does not require any direct loan or grant of 
320.18  money from the municipality as a condition of the federal 
320.19  financial assistance; and 
320.20     (iii) for which the contract provides for the construction 
320.21  of the project upon land that is either owned by the authority 
320.22  for redevelopment purposes or not owned by the authority at the 
320.23  time of the contract but the contract provides for the 
320.24  conveyance or lease to the authority of the project or 
320.25  improvements upon completion of construction; 
320.26     (2) with respect to a structured parking facility:  
320.27     (i) constructed in conjunction with, and directly above or 
320.28  below, a development; and 
320.29     (ii) financed with the proceeds of tax increment or parking 
320.30  ramp general obligation or revenue bonds; and 
320.31     (3) in the case of any building in which at least 75 
320.32  percent of the useable square footage constitutes a housing 
320.33  development project if: 
320.34     (i) the project is financed with the proceeds of bonds 
320.35  issued under section 469.034 or from nongovernmental sources; 
320.36     (ii) the project is either located on land that is owned or 
321.1   is being acquired by the authority only for development 
321.2   purposes, or is not owned by the authority at the time the 
321.3   contract is entered into but the contract provides for 
321.4   conveyance or lease to the authority of the project or 
321.5   improvements upon completion of construction; and 
321.6      (iii) the authority finds and determines that elimination 
321.7   of the public bidding requirements is necessary in order for the 
321.8   housing development project to be economical and feasible. 
321.9      (b) An authority need not require a performance bond for 
321.10  the following projects: 
321.11     (1) a contract described in paragraph (a), clause (1); 
321.12     (2) a construction change order for a housing project in 
321.13  which 30 percent of the construction has been completed; 
321.14     (3) a construction contract for a single-family housing 
321.15  project in which the authority acts as the general construction 
321.16  contractor; or 
321.17     (4) a services or materials contract for a housing project. 
321.18     For purposes of this paragraph, "services or materials 
321.19  contract" does not include construction contracts. 
321.20     Sec. 23.  Minnesota Statutes 1996, section 469.169, is 
321.21  amended by adding a subdivision to read: 
321.22     Subd. 12.  [ADDITIONAL ENTERPRISE ZONE ALLOCATIONS.] In 
321.23  addition to tax reductions authorized in subdivisions 7, 8, 9, 
321.24  10, and 11, the commissioner may allocate $500,000 for tax 
321.25  reductions pursuant to enterprise zone designations, as 
321.26  designated in Laws 1997, chapter 231, article 16, section 26.  
321.27  Allocations made under this subdivision may be used for tax 
321.28  reductions as provided in section 469.171, or other offsets of 
321.29  taxes imposed on or remitted by businesses located in the 
321.30  enterprise zone, but only if the municipality determines that 
321.31  the granting of the tax reduction or offset is necessary in 
321.32  order to retain a business within or attract a business to the 
321.33  enterprise zone.  Limitations on allocations under subdivision 7 
321.34  do not apply to this allocation. 
321.35     Sec. 24.  Minnesota Statutes 1996, section 469.303, is 
321.36  amended to read: 
322.1      469.303 [ELIGIBILITY REQUIREMENTS.] 
322.2      An area within the city is eligible for designation as an 
322.3   enterprise zone if the area (1) includes census tracts eligible 
322.4   for a federal empowerment zone or enterprise community as 
322.5   defined by the United States Department of Housing and Urban 
322.6   Development under Public Law Number 103-66, notwithstanding the 
322.7   maximum zone population standard under the federal empowerment 
322.8   zone program for cities with a population under 500,000 or, (2) 
322.9   is an area within a city of the second class that is designated 
322.10  as an economically depressed area by the United States 
322.11  Department of Commerce, or (3) includes property located in St. 
322.12  Paul in a transit zone as defined in section 473.3915, 
322.13  subdivision 3. 
322.14     Sec. 25.  Laws 1997, chapter 105, section 3, as amended by 
322.15  Laws 1997, Second Special Session chapter 2, section 23, is 
322.16  amended to read: 
322.17     Sec. 3.  [TEMPORARY WAIVER OF FEES, ASSESSMENTS, OR TAXES.] 
322.18     Subdivision 1.  [FEES.] Notwithstanding any law to the 
322.19  contrary, for fiscal years 1997 and 1998, an agency, with the 
322.20  approval of the governor, may waive fees that would otherwise be 
322.21  charged for agency services.  The waiver of fees must be 
322.22  confined to geographic areas affected by flooding within 
322.23  counties included in a federal disaster declaration and to the 
322.24  minimum periods of times necessary to deal with the emergency 
322.25  situation.  The agency must promptly report the reasons for and 
322.26  the impact of any suspended fees to the chairs of the 
322.27  legislative committees that oversee the policy and budgetary 
322.28  affairs of the agency.  This subdivision expires February 1, 
322.29  1998. 
322.30     Subd. 2.  [SOLID WASTE GENERATOR ASSESSMENTS AND SOLID 
322.31  WASTE MANAGEMENT TAXES.] Notwithstanding any law to the 
322.32  contrary, the waiver authority provided in subdivision 1 is also 
322.33  extended to the commissioner of revenue in relation to the solid 
322.34  waste generator assessment under Minnesota Statutes, section 
322.35  116.07, subdivision 10, and the solid waste management taxes 
322.36  under Laws 1997, chapter 231, article 13, for construction 
323.1   debris generated from repair and demolition activities in the 
323.2   area designated under Presidential Declaration of Major 
323.3   Disaster, DR-1175, and disposed of in a waste management 
323.4   facility designated by the commissioner of the pollution control 
323.5   agency.  The commissioner of revenue's authority under this 
323.6   subdivision to waive the assessment and tax expires for waste 
323.7   transported to the designated facilities after December 31, 1997 
323.8   June 30, 1998, including waste transported to a landfill that is 
323.9   limited by permit exclusively to the disposal of flood debris.  
323.10  The waiver authority granted to the commissioner of revenue is 
323.11  retroactive to April 1, 1997. 
323.12     Sec. 26.  Laws 1997, chapter 225, article 2, section 64, is 
323.13  amended to read: 
323.14     Sec. 64.  [EFFECTIVE DATE.] 
323.15     Section 8 is effective for payments made for MinnesotaCare 
323.16  services on or after July 1, 1996.  Section 23 is effective the 
323.17  day following final enactment.  Section 46 is effective January 
323.18  1, 1998, and applies to high deductible health plans issued or 
323.19  renewed on or after that date. 
323.20     Sec. 27.  Laws 1997, chapter 231, article 5, section 18, 
323.21  subdivision 1, is amended to read: 
323.22     Subdivision 1.  [COMMISSION RESPONSIBILITIES.] (a) The 
323.23  legislative coordinating commission shall prepare studies of 
323.24  business taxation and the taxation of telecommunications 
323.25  services during the 1997-98 1998 interim and the 1999 
323.26  legislative session, as provided by this section.  The 
323.27  commission is responsible for managing any contracts under this 
323.28  section and for preparing the studies.  It may delegate any or 
323.29  all of its responsibilities under this section to the 
323.30  legislative commission on planning and fiscal policy. 
323.31     (b) For the business tax study under subdivision 2, the 
323.32  commission may appoint a formal or informal bipartisan working 
323.33  group of house and senate members to oversee and coordinate the 
323.34  study. 
323.35     (c) For the study of the taxation of telecommunications 
323.36  services under subdivision 4, the commission shall appoint a 
324.1   bipartisan working group that includes house and senate members 
324.2   and members of the public, at least two of whom are 
324.3   representatives of Internet service businesses who are 
324.4   knowledgeable about the technologies and practices of the 
324.5   Internet and at least two of whom are the representatives of 
324.6   businesses that conduct commerce on the Internet. 
324.7      Sec. 28.  Laws 1997, chapter 231, article 13, section 19, 
324.8   is amended to read: 
324.9      Sec. 19.  [MORATORIUM.] 
324.10     The commissioner of revenue shall not initiate or continue 
324.11  any action to collect any underpayment from political 
324.12  subdivisions, or to reimburse any overpayment to any political 
324.13  subdivisions, of sales or use taxes on solid waste management 
324.14  services under Minnesota Statutes, section 297A.45,.  The 
324.15  moratorium is effective for the period from January 1, 1990, 
324.16  through December 31, 1996 1997. 
324.17     Sec. 29.  [SPECIAL PREMIUM TAX PAYMENT.] 
324.18     Health maintenance organizations, community integrated 
324.19  service networks, and nonprofit health service plan corporations 
324.20  that have met the cost containment goals established in 
324.21  Minnesota Statutes, section 62J.04, in the individual and small 
324.22  employer market for calendar year 1996 shall pay a special, 
324.23  one-time 1999 premium tax payment.  The tax payment must be 
324.24  based on an amount equal to one percent of gross premiums less 
324.25  return premiums on all direct business received by the insurer 
324.26  in this state, or by its agents for it, in cash or otherwise 
324.27  after March 30, 1997, and before January 1, 1998.  Payment of 
324.28  the tax under this section is due January 2, 1999.  Provisions 
324.29  relating to the payment, assessment, and collection of the tax 
324.30  assessed under Minnesota Statutes, section 60A.15, shall apply 
324.31  to the special tax payment assessed under this section. 
324.32     Sec. 30.  [PRIVATE SALE OF SURPLUS LAND; RED LAKE COUNTY.] 
324.33     (a) Notwithstanding Minnesota Statutes, sections 92.45, 
324.34  94.09, and 94.10, the commissioner of natural resources may sell 
324.35  by private sale to the adjacent land owner, for a consideration 
324.36  equal to the appraised value, the surplus land bordering public 
325.1   water that is described in paragraph (c), under the remaining 
325.2   provisions of Minnesota Statutes, chapter 94. 
325.3      (b) The conveyance shall be in a form approved by the 
325.4   attorney general. 
325.5      (c) The land that may be sold is located in Red Lake 
325.6   county, consists of about 50 acres, and is described as follows: 
325.7      (1) Government lot 5, section 25, Township 152 North, Range 
325.8   40 West; 
325.9      (2) Government lot 7, section 25, Township 152 North, Range 
325.10  40 West. 
325.11     (d) The commissioner has determined that the land is no 
325.12  longer needed for any natural resource purpose and that the 
325.13  state's land management interests would best be served if the 
325.14  land was returned to private ownership. 
325.15     Sec. 31.  [EXCHANGE OF LAKESHORE LEASED LOTS.] 
325.16     Subdivision 1.  [ANALYSIS OF LOTS.] By January 15, 1999, 
325.17  the commissioner of natural resources must submit a report to 
325.18  the chairs of the senate and house environment and natural 
325.19  resources committees, the house environment, natural resources, 
325.20  and agriculture finance committee, the senate environment and 
325.21  agriculture budget division, the senate children, families and 
325.22  learning committee, and the house education committee.  The 
325.23  report must provide the results of the field inspection required 
325.24  by this section, recommendations on appropriations needed to 
325.25  accomplish the purposes of this section, and additional 
325.26  recommendations on methods to preserve public lakeshore in the 
325.27  state.  The commissioner must conduct a field inspection of all 
325.28  lands leased pursuant to Minnesota Statutes, section 92.46, 
325.29  subdivision 1.  The commissioner must identify all lots within 
325.30  the following classifications: 
325.31     (1) the lot contains all or part of an unusual resource, 
325.32  such as a historical or archaeological site, or a sensitive 
325.33  ecological resource, or contains unique habitat, or has a high 
325.34  scenic value; 
325.35     (2) the lot provides access for adjacent state land; or 
325.36     (3) the lot is part of the trust land in Horseshoe Bay, as 
326.1   referenced in Laws 1997, chapter 216, section 151. 
326.2      Subd. 2.  [EXCHANGE OF COUNTY LAKESHORE LAND FOR LEASED 
326.3   LAKESHORE LOTS.] (a) For the purposes of this section: 
326.4      (1) "county land" includes, but is not limited to, 
326.5   tax-forfeited land administered by any county; and 
326.6      (2) "leased lakeshore lots" means lands leased by the state 
326.7   pursuant to Minnesota Statutes, section 92.46, subdivision 1. 
326.8      (b) By June 1, 1999, a county board with leased lakeshore 
326.9   lots must petition the land exchange board with a plan for an 
326.10  exchange of county land for leased lakeshore lots in the county 
326.11  that are not listed by the commissioner pursuant to subdivision 
326.12  1.  Notwithstanding Minnesota Statutes, section 94.342, the land 
326.13  proposed for the exchange must be land bordering on or adjacent 
326.14  to meandered or other public waters.  A county board proposing 
326.15  an exchange under this section may include tax-forfeited land 
326.16  administered by another county in the proposal with the consent 
326.17  of that county board.  
326.18     (c) In determining the value of the leased lakeshore lots 
326.19  for purposes of the exchange, the land exchange board must 
326.20  review an appraisal of each lot prepared by an appraiser 
326.21  licensed by the commissioner of commerce.  The selection of the 
326.22  appraiser must be agreed to by the commissioner of natural 
326.23  resources and the county board of the county containing the 
326.24  leased lakeshore lot.  The commissioner of natural resources 
326.25  must pay the costs of appraisal and may recover these costs as 
326.26  provided in this section.  The commissioner must submit 
326.27  appraisals under this paragraph to the land exchange board by 
326.28  June 1, 1999.  
326.29     (d) The land exchange board must determine whether the land 
326.30  offered for exchange by a county under this section is lakeshore 
326.31  of substantially equal value to the leased lakeshore lots 
326.32  included in the county's petition.  In making this 
326.33  determination, the land exchange board must review an appraisal 
326.34  of the land offered for exchange prepared by an appraiser 
326.35  licensed by the commissioner of commerce.  The selection of the 
326.36  appraiser must be agreed to by the commissioner of natural 
327.1   resources and the county board of the county containing the 
327.2   leased lakeshore lots.  The county must pay the costs of this 
327.3   appraisal and may recover those costs as provided in this 
327.4   section.  
327.5      (e) Before the proposed exchange may be submitted to the 
327.6   land exchange board, the commissioner of natural resources must 
327.7   ensure that, whenever possible, state lands are added to the 
327.8   leased lakeshore lots when necessary to provide conformance with 
327.9   zoning requirements.  The lands added to the leased lakeshore 
327.10  lots must be included in the appraised value of the lots.  If 
327.11  the commissioner is unable to add the necessary land to a lot, 
327.12  the lot shall be treated as if purchased at the time the state 
327.13  first leased the site, for the purposes of local zoning 
327.14  ordinances at the time of sale of the lot by the county.  
327.15     (f) The land exchange board must determine whether the lots 
327.16  are of substantially equal value and may approve the exchange, 
327.17  notwithstanding the requirements of Minnesota Statutes, sections 
327.18  94.342 to 94.347, relating to the approval process.  If the 
327.19  board approves the exchange, the commissioner must exchange the 
327.20  leased lakeshore lots for the county lands, subject to the 
327.21  requirements of the Minnesota Constitution, article XI, section 
327.22  10, relating to the reservation of mineral and water power 
327.23  rights.  
327.24     Subd. 3.  [COUNTY SALE.] Notwithstanding Minnesota 
327.25  Statutes, section 282.018, or any other law to the contrary, a 
327.26  county board must offer land that it has acquired through an 
327.27  exchange under this section for sale to the lessee of the land 
327.28  within 90 days from the date of acquisition for the value of the 
327.29  land as determined by the county board.  The county board may 
327.30  include the cost of appraisal of the county land for the 
327.31  purposes of this section in the value of the land.  If the 
327.32  lessee does not elect to purchase the land, the county board may 
327.33  sell the land by public sale at the expiration of the lease term 
327.34  for no less than the value of the land as determined by the 
327.35  county board, including the cost of appraisal required by this 
327.36  section, and the value of improvements to the land.  The county 
328.1   board must reimburse the lessee for the value of the 
328.2   improvements to the land and the county may retain a sum from 
328.3   the proceeds of the sale equivalent to the cost of appraisal.  
328.4   The county board must reimburse the commissioner of natural 
328.5   resources for the costs of appraisal under subdivision 2, 
328.6   paragraph (c), from the proceeds of the sale. 
328.7      Subd. 4.  [COUNTY ENVIRONMENTAL TRUST 
328.8   FUND.] Notwithstanding the provisions of Minnesota Statutes, 
328.9   chapter 282, and any other law relating to the apportionment of 
328.10  proceeds from the sale of tax-forfeited land, and except as 
328.11  otherwise provided in this section, a county board must deposit 
328.12  the money received from the sale of land under subdivision 3 
328.13  into an environmental trust fund established by the county under 
328.14  this subdivision.  The principal from the sale of the land may 
328.15  not be expended, and the county board may spend interest earned 
328.16  on the principal only for purposes related to the improvement of 
328.17  natural resources.  To the extent money received from the sale 
328.18  is attributable to tax-forfeited land from another county, the 
328.19  money must be deposited in an environmental trust fund 
328.20  established under this section by that county board. 
328.21     Subd. 5.  [NOTICE.] The commissioner must mail notice of 
328.22  this section to each lessee of a leased lakeshore lot and to 
328.23  each affected county board by July 1, 1998. 
328.24     Sec. 32.  [STATE PAYMENT OF CITY OF ADA AND EAST GRAND 
328.25  FORKS DEBT OBLIGATION UPON DEFAULT; REPAYMENT; STATE OBLIGATION 
328.26  NOT DEBT.] 
328.27     Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
328.28  section, the following terms have the meanings given. 
328.29     (b) "Debt obligation" means: 
328.30     (1) for the city of Ada, a loan from the Federal Emergency 
328.31  Management Agency under its community disaster loan program to 
328.32  the city in the amount of approximately $1,423,000, to cover 
328.33  operating losses for a publicly owned health care facility that 
328.34  was damaged in the spring floods of 1997; and 
328.35     (2) for the city of East Grand Forks, a loan from the 
328.36  Federal Emergency Management Agency under its community disaster 
329.1   loan program to the city in the amount of approximately 
329.2   $2,907,000. 
329.3      (c) "City" means the city of Ada or the city of East Grand 
329.4   Forks, as applicable for the loan. 
329.5      Subd. 2.  [NOTIFICATIONS; PAYMENT; APPROPRIATION.] (a) If 
329.6   the city believes that it may be unable to make a principal or 
329.7   interest payment on any outstanding debt obligation on the date 
329.8   that payment is due, it must notify the commissioner of finance 
329.9   of that fact as soon as possible, but not less than 15 working 
329.10  days before the date that principal or interest payment is due.  
329.11  The notice must identify the debt obligation issue in question, 
329.12  the date the payment is due, the amount of principal and 
329.13  interest due on the payment date, the amount of principal or 
329.14  interest that the city will be unable to repay on that date, the 
329.15  paying agent for the debt obligation, the wire transfer 
329.16  instructions to transfer funds to that paying agent, and an 
329.17  indication as to whether a payment is being requested by the 
329.18  city under this section.  If a paying agent becomes aware of a 
329.19  potential default, it shall inform the commissioner of finance 
329.20  of that fact. 
329.21     (b) Except as provided in subdivision 9, upon receipt of a 
329.22  notice from the city, which must include a final figure as to 
329.23  the amount due that the city will be unable to repay on the date 
329.24  due, the commissioner of finance shall issue a warrant to pay to 
329.25  the paying agent for the debt obligation the specified amount on 
329.26  or before the date due.  The amounts needed for the purposes of 
329.27  this subdivision are annually appropriated to the commissioner 
329.28  of finance from the state general fund. 
329.29     Subd. 3.  [CITY BOUND; INTEREST RATE ON STATE PAID AMOUNT.] 
329.30  If, at the request of the city, the state has paid part or all 
329.31  of the principal or interest due on the city's debt obligation 
329.32  on a specific date, the city is bound by all provisions of this 
329.33  section and the amount paid shall bear taxable interest from the 
329.34  date paid until the date of repayment at the state treasurer's 
329.35  invested cash rate as it is certified by the commissioner of 
329.36  finance.  Interest only accrues on the amounts paid and 
330.1   outstanding less the reduction in aid under subdivision 4 and 
330.2   other payments received from the city. 
330.3      Subd. 4.  [PLEDGE OF CITY'S FULL FAITH AND CREDIT.] If, at 
330.4   the request of the city, the state has paid part or all of the 
330.5   principal or interest due on the city's debt obligation on a 
330.6   specific date, the pledge of the full faith and credit and 
330.7   unlimited taxing powers of the city to repay the principal and 
330.8   interest due on those debt obligations, without an election or 
330.9   the requirement of a further authorization, becomes a pledge of 
330.10  the full faith and credit and unlimited taxing powers of the 
330.11  city to repay to the state the amount paid, with interest.  
330.12  Amounts paid by the state shall be repaid in the order in which 
330.13  the state payments were made. 
330.14     Subd. 5.  [AID REDUCTION FOR REPAYMENT.] Except as provided 
330.15  in this subdivision, the state shall reduce the state aid 
330.16  payable to the city under chapters 273, 469, and 477A, according 
330.17  to a schedule determined by the commissioner of finance, by the 
330.18  amount paid by the state under this section on behalf of the 
330.19  city, plus the interest due on it, and the amount reduced shall 
330.20  revert from the appropriate account to the state general fund.  
330.21  Payments from any federal aid payments shall not be reduced.  
330.22  The amount of aids to be reduced are decreased by any amounts 
330.23  repaid to the state by the city from other revenue sources. 
330.24     Subd. 6.  [TAX LEVY FOR REPAYMENT.] (a) With the approval 
330.25  of the commissioner of finance, the city may levy in the year 
330.26  the state makes a payment under this section an amount up to the 
330.27  amount necessary to provide funds for the repayment of the 
330.28  amount paid by the state plus interest through the date of 
330.29  estimated repayment by the city.  The proceeds of this levy may 
330.30  be used only for this purpose unless they are in excess of the 
330.31  amount actually due, in which case the excess shall be used to 
330.32  repay other state payments made under this section or shall be 
330.33  deposited in the debt redemption fund of the city.  This levy is 
330.34  an increase in the levy limits of the city for purposes of 
330.35  Minnesota Statutes, section 275.065, subdivision 6.  The amount 
330.36  of aids to be reduced to repay the state are decreased by the 
331.1   amount levied. 
331.2      (b) If the state is not repaid in full for a payment made 
331.3   under this section by November 30 of the calendar year following 
331.4   the year in which the state makes the payment, the commissioner 
331.5   of finance shall require the city to certify a property tax levy 
331.6   in an amount up to the amount necessary to provide funds for 
331.7   repayment of the amount paid by the state plus interest through 
331.8   the date of estimated repayment by the city.  To prevent undue 
331.9   hardship, the commissioner may allow the city to certify the 
331.10  levy over a five-year period.  The proceeds of the levy may be 
331.11  used only for this purpose unless they are in excess of the 
331.12  amount actually due, in which case the excess must be used to 
331.13  repay other state payments made under this section or must be 
331.14  deposited in the debt redemption fund of the city.  This levy is 
331.15  an increase in the levy limits of the city for purposes of 
331.16  Minnesota Statutes, section 275.065, subdivision 6.  If the 
331.17  commissioner orders the city to levy, the amount of aids reduced 
331.18  to repay the state is decreased by the amount levied.  A levy 
331.19  under this subdivision must be explained as a specific increase 
331.20  at the meeting required under Minnesota Statutes, section 
331.21  275.065, subdivision 6. 
331.22     Subd. 7.  [ELECTION AS TO MANDATORY APPLICATION.] The city 
331.23  may covenant and obligate itself, prior to incurring a debt 
331.24  obligation, to notify the commissioner of finance of a potential 
331.25  default and to use the provisions of this section to guarantee 
331.26  payment of the principal and interest on those debt obligations 
331.27  when due.  If the city obligates itself to be bound by this 
331.28  section, it shall covenant to deposit with the paying agent 
331.29  three business days prior to the date on which a payment is due 
331.30  an amount sufficient to make that payment or to notify the 
331.31  commissioner of finance under subdivision 1 that it will be 
331.32  unable to make all or a portion of that payment.  The city shall 
331.33  include a provision in its agreement with the paying agent for 
331.34  that issue that requires the paying agent to inform the 
331.35  commissioner of finance if it becomes aware of a potential 
331.36  default in the payment of principal or interest on that issue or 
332.1   if, on the day two business days prior to the date a payment is 
332.2   due on that issue, there are insufficient funds to make the 
332.3   payment on deposit with the paying agent.  If the city either 
332.4   covenants to be bound by this section or accepts state payments 
332.5   under this section to prevent a default on debt obligations, the 
332.6   provisions of this section are binding as to that issue as long 
332.7   as any debt obligation of that issue remains outstanding.  
332.8      Subd. 8.  [MANDATORY PLAN; TECHNICAL ASSISTANCE.] If the 
332.9   state makes payments on behalf of the city under this section or 
332.10  the city defaults in the payment of principal or interest on an 
332.11  outstanding debt obligation, it shall submit a plan to the 
332.12  commissioner of finance for approval specifying the measures it 
332.13  intends to implement to resolve the issues which led to its 
332.14  inability to make the payment and to prevent further defaults.  
332.15  The commissioner shall provide technical assistance to the city 
332.16  in preparing its plan.  If the commissioner determines that the 
332.17  city's plan is not adequate, the commissioner shall notify the 
332.18  city that the plan has been disapproved, the reasons for the 
332.19  disapproval, and that the state shall not make future payments 
332.20  under this section for debt obligations issued after the date 
332.21  specified in that notice until its plan is approved.  The 
332.22  commissioner may also notify the city that until its plan is 
332.23  approved, other aids due the city will be withheld after a date 
332.24  specified in the notice. 
332.25     Subd. 9.  [STATE BOND RATING.] If the commissioner of 
332.26  finance determines that the credit rating of the state would be 
332.27  adversely affected thereby, the commissioner shall not issue 
332.28  warrants under subdivision 2 for the payment of principal or 
332.29  interest on any debt obligations for which the city did not, 
332.30  prior to their issuance, obligate itself to be bound by the 
332.31  provisions of this section. 
332.32     Sec. 33.  [COON RAPIDS BONDING.] 
332.33     Subdivision 1.  [AUTHORITY.] The city of Coon Rapids may 
332.34  issue general obligation bonds under Minnesota Statutes, chapter 
332.35  475, in an amount up to $11,000,000 to finance costs related to 
332.36  the upgrading of the existing state and county bridges and 
333.1   roadways within the project areas of the tax increment financing 
333.2   districts designated 2-2 and 2-3.  No referendum is required on 
333.3   the question of the issuance of bonds under this authority.  The 
333.4   bonds are not included in computing any debt limitations of the 
333.5   city.  The levy of taxes to pay the bonds is not subject to any 
333.6   levy limit. 
333.7      Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
333.8   day following final enactment without local approval and applies 
333.9   to the city of Coon Rapids under Minnesota Statutes, section 
333.10  645.023. 
333.11     Sec. 34.  [STUDY OF HOME CARE TAX INCENTIVES.] 
333.12     The commissioners of revenue and human services shall 
333.13  conduct a study on the issue of the effectiveness of tax 
333.14  incentives to encourage people to provide care for elderly or 
333.15  disabled individuals in their homes.  The study must include 
333.16  analysis of the most effective types of incentives and their 
333.17  cost.  The commissioners shall transmit the conclusions of the 
333.18  study in a report to the legislature by January 15, 1999. 
333.19     Sec. 35.  [APPROPRIATIONS.] 
333.20     Subdivision 1.  [BAT STUDY.] $100,000 is appropriated from 
333.21  the general fund for fiscal year 1999 to the legislative 
333.22  coordinating commission to study alternative methods of taxing 
333.23  business.  The appropriations under this section and under Laws 
333.24  1997, chapter 231, article 5, section 18, subdivision 3, are 
333.25  available in fiscal years 2000 and 2001.  
333.26     Subd. 2.  [COST OF ADMINISTERING BILL.] $281,000 is 
333.27  appropriated from the general fund for fiscal year 1999 to the 
333.28  commissioner of revenue for the cost of administering this act, 
333.29  excluding article 1. 
333.30     Subd. 3.  [HOUSING DEVELOPMENT FUND.] In addition to any 
333.31  amount appropriated by other law, $250,000 is appropriated from 
333.32  the general fund to the housing development fund for fiscal year 
333.33  1999, $800,000 for fiscal year 2000, and $800,000 for fiscal 
333.34  year 2001 to provide matching grants for employer contributions 
333.35  for affordable housing under Minnesota Statutes, section 
333.36  462A.2092.  This appropriation is available until expended. 
334.1      Subd. 4.  [TRANSPORTATION.] $1,500,000 is appropriated from 
334.2   the general fund for fiscal year 1999 to the state treasurer for 
334.3   transfer to the transit account in the transportation revolving 
334.4   loan fund established in Minnesota Statutes, section 446A.085, 
334.5   subdivision 3. 
334.6      Sec. 36.  [REPEALER.] 
334.7      (a) Minnesota Statutes 1997 Supplement, sections 3.987, 
334.8   subdivision 3, and 14.431, are repealed. 
334.9      (b) 1998 S.F. No. 3353, section 60, relating to the 
334.10  exchange and sale of certain lakeshore lots, if enacted, is 
334.11  repealed. 
334.12     Sec. 37.  [EFFECTIVE DATE.] 
334.13     Sections 8, 9, 12, 20, 21, 23, 24, 28, and 30 are effective 
334.14  the day following final enactment.  Sections 15 and 25 are 
334.15  effective retroactively to January 1, 1998. 
334.16     Section 16 is effective January 1, 1999.