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 learningfor fiscal year7.72000 and each year thereafterfor payment of alternative 7.8 facilities aid under subdivision 5a.The 2000 appropriation7.9includes $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 to4633 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 equals5467 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 8.32.62.5 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. 8.11For 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 of1.851.7 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 a10.20property to be classified as class 1c, at least 40 percent of10.21the annual gross lodging receipts related to the property must10.22be from business conducted between Memorial Day weekend and10.23Labor Day weekend, and at least 60 percent of all bookings by10.24lodging guests during the year must be for periods of at least10.25two 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 of0.40.35 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 of0.90.8 percent of market value. 11.27 The remaining property overthe$115,000 market value in excess 11.28 of 320 acres has a class rate of1.41.25 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 of1.41.25 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 of2.72.45 percent of the 15.6 first tier of market value, and4.03.5 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 and3.63.5 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 rateA 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 of2.32.15 percent of market value. 17.6 All other class 4a property has a class rate of2.92.5 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 of2.11.7 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 of1.91.25 percent on the first 17.29 $75,000 of market value and a class rate of2.11.7 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 conductedbetween Memorial Day weekend and Labor Day weekend18.14 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 county19.23that has a population of less than 50,000, or within a county19.24containing a golf course owned by a municipality, the county, or19.25a 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;and20.35 (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 of2.11.8 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 of1.41.25 percent, and the market value that exceeds $75,000 21.11 has a class rate of2.52.2 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 of4.03.5 percent of 22.16 market valuefor 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, 22.20beginning 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 to3268 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 23.1819972000, for purposes of computing the fiscal disparity 23.19 adjustment only, the tax base differential is0.250.2 percent 23.20 of the assessment year19951998 taxable market value of class 23.214c noncommercial seasonal recreational residential3 23.22 commercial-industrial propertyup to $72,000over $150,000. 23.23(b) For aids payable in 1998, the tax base differential is23.240.25 percent of the assessment year 1996 taxable market value of23.25class 4c noncommercial seasonal recreational residential23.26property 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 to3.32.3 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" means1819 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 include1819 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),29.15and (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, 40.19social,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 recreationalor socialuses 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 rangeor41.1an establishment actively and exclusively devoted to indoor41.2fitness, health, social, recreational, and related uses in which41.3the establishment is owned and operated by a not-for-profit41.4corporation; 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 transferredon or after January 1, 1993,for 42.31 which a certificate of real estate value is required under 42.32subdivision 1this 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 estate42.35was conveyed by the federal government, the state, a political42.36subdivision of the state, or combination of them to a person43.1otherwise eligible to receive homestead classification of the43.2property. 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 toor by a public authority or agency of the43.11federal 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 43.14authority,agency,or governmental unit has agreed to file a 43.15 list of the real estate conveyedby orto theauthority,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 thantwo43.33 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 thantwofour 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 inhomesteaddwelling.For taxes payable45.13in 1998, the owner must notify the assessor by December 1,45.141997.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 thesecond Tuesdayfirst 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 firstMondayWednesday of 55.6 December. A continuation hearing, if necessary, shall be held 55.7 on the secondMondayWednesday of December even if that second 55.8MondayWednesday 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 certifytheseits 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 in1990 and thereafter1998, 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 of61.26regional 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 thebuilding isqualifying 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 thegeneral63.3 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 meetboththe 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,andor 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 8AND, 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 unitseither: 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;or63.34 (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 restrictionsor, 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 theproperty64.19 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 thegeneralhousing 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; 67.7and67.8 (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 through19982003, 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 in69.41994, $16,600,000 in 1995, $17,500,000 in 1996, $17,500,000 in69.51997, 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 69.20assessed valuenet 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 theassessed valuenet 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 69.30or capitalized interestto 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 1997,70.11and$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 districtand 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 taxonof not more than 71.25 .01 percent of the taxable market value of taxable 71.26 property located within the countyoutside ofexcluding any 71.27 taxable property taxed by any cityin which is situated afor 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 countyin the amount of $9,000,000in the manner provided in 72.3 Minnesota Statutes, chapter 475, to acquire, better, and 72.4 construct county library buildings.The total amount of bonds72.5outstanding at any time shall not exceed $5,000,000. The county72.6board, prior to the issuance of any bonds authorized by section72.71 and after adopting the resolution as provided above in this72.8section, shall adopt a resolution by majority vote of the county72.9board stating the amount, purpose and, in general, the security72.10to be provided for the bonds, and shall publish the resolution72.11once each week for two consecutive weeks in the medium of72.12official and legal publication of the county. The bonds may be72.13issued without the submission of the question of their issuance72.14to the voters of the county library district unless within 2172.15days after the second publication of the resolution a petition72.16requesting a referendum, signed by at least ten percent of the72.17registered voters of the county, is filed with the county72.18auditor. If a petition is filed, bonds may be issued unless72.19disapproved by a majority of the voters of the county library72.20district, voting on the question of their issuance at a regular72.21or 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 72.28three-fourths of a mill times the assessed valuethe lesser of 72.29 (i) .01 percent of the taxable market value of all taxable 72.30 property in the county,which was notexcluding any taxable 72.31 property taxedin 1981by any city for the support of any free 72.32 public library,as last finally equalized before the issuance of72.33the seriesor (ii) $1,250,000. When the tax levy authorized in 72.34 thissectionssection 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 1,19992000, 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 the1998legislature 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)finaladjournment of the1998 legislature1999 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;and84.26 (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 islimitedequal 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 in1997 and1998, 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 87.181997 and1998, 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 total90.14aids paid under sections 477A.013, subdivision 9, and 477A.012290.15are the amounts certified to be paid in the previous year,90.16adjusted 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 senior96.30citizens' property tax deferral program under chapter 290B, as96.31well as the total deferred amount plus accrued interest; and96.32(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 amountfor each year and, the cumulative deferral and 99.4 interesttothat appear on each year'sproperty tax statement as99.5 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. [ANNUALEXCESS-INCOME CERTIFICATION BY TAXPAYER.] 100.5Annually on or before July 1,A taxpayer whose initial 100.6 application has been approved under subdivision 2,100.7 shallcomplete the certification form and return it tonotify 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 statewhether or not100.11the taxpayer wishes to have property taxes deferred for the100.12following year provided the taxes exceed the maximum property100.13tax amount under section 290B.05. If the taxpayer does wish to100.14have property taxes deferred, the certification must statethe 100.15 homeowner's total household income for the previous calendar 100.16 yearand any other information which the commissioner deems100.17necessary. 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 shallannuallydetermine the 102.8 qualifying homeowner's"maximum property tax amount"102.9and"maximum allowable deferral."The maximum property tax102.10amount calculated for taxes payable in the following year is102.11equal to five percent of the homeowner's total household income102.12for 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 and102.23interest. 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 deferralfor the year;102.31and (3) the cumulative deferral and interest for all years102.32preceding 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.] 103.4On or before September 1 of each year, the commissioner shall103.5request, and each county or city assessor shall provide, the103.6current year's estimated market value of each property on the103.7list supplied by the commissioner that may be eligible for103.8deferral under this section for taxes payable in the following103.9year.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 TAXREFUNDS; 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, anyregular or special property taxrefundawarded103.24based upon those property taxesas 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 paymentto 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 103.31property taxrefunds. If the total of theregular and the103.32special property taxrefund 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 fromproperty taxrefunds. 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 propertyon the property105.2tax 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.] Thecommissioner106.33of revenuecounty auditor shall determine the total current 106.34 year's deferred amount of property tax under this chapter in 106.35eachthe county,basing determinations on a review ofand 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. 107.6At least once each year, the commissioner shall report to107.7the county auditor the total cumulative amount of deferred taxes107.8and 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 298.015if:. 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 payspay 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 returnis paidon or before the extended due date of the return;108.13and108.14(3) interest on any balance due is paid at the rate108.15specified in section 270.75 from the regular due date of the108.16return 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 a108.25partnershipwill be treated as an entity similar to its 108.26 treatment for federal income tax purposes, is considered to be a108.27partnership 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;and110.13 (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;and113.3 (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 stockand there is no capital loss115.35reflected in federal adjusted gross income because of the fact115.36that corporate losses have exhausted the shareholders' basis for116.1federal purposes, the shareholders shall be entitled to a116.2capital loss commensurate to their Minnesota basis for the116.3stock, 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 theaddition required for interest income from non-Minnesota117.27state and municipal bonds under section 290.01, subdivision 19a,117.28clause (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 ofthe credit for which the individual is118.1eligibleearned 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 qualifying118.4child, and 25 for individuals with at least one qualifying118.5child. For purposes of this section, "qualifying child" has the118.6meaning 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 118.26determined under section 32 of the Internal Revenue Codemust 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. [NONREFUNDABLEREFUNDABLE.] 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 yearmay120.16not exceedexceeds the liability for tax undersection 290.06,120.17subdivision 1,chapter 290 for the taxable year,before120.18reduction by the nonrefundable credits allowed under this120.19chapterthe 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 deductionand; 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;and121.28 (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 acorporation123.35 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); or126.14(5) the corporation is an "S" corporation under section126.15290.9725. 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, and128.24includes the provisions of section 1(a) and (b) of Public Law128.25Number 104-1171997. 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,andthe 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,andthe 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,andthe 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,andthe 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,andthe 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,andthe 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;and135.7 (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);and136.33 (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, and137.8includes the provisions of section 1(a) and (b) of Public Law137.9Number 104-1171997. 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 theadditionadditions 138.20 requiredfor interest income from non-Minnesota state and138.21municipal bondsunder section 290.01, subdivision 19a,clause138.22 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 theaddition required for interest income from non-Minnesota138.29state and municipal bondsamounts specified under section 138.30 290.01, subdivision 19a,clauseclauses (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;and140.33 (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 31,19961997. 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, 144.211996, and includes the provisions of section 1(a)(4) of Public144.22Law Number 104-1171997. 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;and146.20 (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;or147.28 (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 is2.52.0 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 purposesand new or150.1used park trailers, as defined in section 168.011, subdivision150.28, paragraph (b), the excise tax is imposed upon 65 percent of 150.3 thesales pricedealer's cost of the homeor, 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. [EXEMPTIONEXEMPTIONS.] (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,andan 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. 154.9The sales to and exclusively for the use of libraries of154.10books, periodicals, audio-visual materials and equipment,154.11photocopiers for use by the public, and all cataloguing and154.12circulation equipment, and cataloguing and circulation software154.13for library use are exempt under this subdivision. For purposes154.14of this paragraph "libraries" means libraries as defined in154.15section 134.001, county law libraries under chapter 134A, the154.16state library under section 480.09, and the legislative154.17reference 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. 156.13The exemption provided by this subdivision applies to156.14construction materials and supplies purchased prior to December156.1531, 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 thanfourfive 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 31,19971998. 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 164.15477A.01, Subdivision 18477A.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, Section477A.01,164.34Subdivision 18477A.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 bondsof the cityor 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 expirewhen the principal and interest on any bonds or other168.34obligations issued to finance projects authorized in subdivision168.352, paragraph (a) have been paidon 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 1,19981999. 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 timesthe ratio of the maximum levy allowed the district194.10under Minnesota Statutes 1986, sections 124A.03, subdivision 2,194.11124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10,194.12subdivision 3a, 124A.12, subdivision 3a, and 124A.14,194.13subdivision 5a, to the total levy allowed the district under194.14this section and Minnesota Statutes 1986, sections 124A.03,194.15124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10,194.16subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision194.175a, and 124A.20, subdivision 2, for levies certified in194.181986five 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 reduce195.26the effective tax rate on each parcel of property to 95 percent195.27of the base year effective tax rate. In no case will the195.28reduction for each homestead resulting from this credit be less195.29than $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 an195.36amount sufficient to reduce the effective tax rate on each196.1parcel of property to 95 percent of the base year effective tax196.2rate. In no case will the reduction for each homestead196.3resulting 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. These196.7maximum amounts shall increase by $15 times the quantity one196.8minus the homestead credit equivalency percentage per year for196.9taxes payable in 1986 and subsequent years.196.10For the purposes of this subdivision, "homestead credit196.11equivalency percentage" means one minus the ratio of the net196.12class rate to the gross class rate applicable to the first196.13$72,000 of the market value of residential homesteads,196.14"effective tax rate" means tax divided by the market value of a196.15property, and the "base year effective tax rate" means the196.16payable 1988 tax on a property with an identical market value to196.17that of the property receiving the credit in the current year196.18after the application of the credits payable under Minnesota196.19Statutes 1988, section 273.13, subdivisions 22 and 23, and this196.20section, 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 reduce197.2the effective tax rate on each parcel of property to the product197.3of 95 percent of the base year effective tax rate multiplied by197.4the ratio of the current year's tax rate to the payable 1989 tax197.5rate. In no case will the reduction for each homestead197.6resulting 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),197.18and shall not exceed an amount sufficient to reduce the197.19effective tax rate on each parcel of property to the product of197.2095 percent of the base year effective tax rate multiplied by the197.21ratio of the current year's tax rate to the payable 1989 tax197.22rate. In no case will the reduction for each homestead197.23resulting from this credit be less than $10. 197.24 (c) The maximum reduction of the tax is$200.10 for taxes197.25payable in 1985. This maximum amount shall increase by $15197.26multiplied by the quantity one minus the homestead credit197.27equivalency percentage per year for taxes payable in 1986 and197.28subsequent years$289.80. 197.29For the purposes of this subdivision, "homestead credit197.30equivalency percentage" means one minus the ratio of the net197.31class rate to the gross class rate applicable to the first197.32$72,000 of the market value of residential homesteads, and197.33"effective tax rate" means tax divided by the market value of a197.34property, and the "base year effective tax rate" means the197.35payable 1988 tax on a property with an identical market value to197.36that of the property receiving the credit in the current year198.1after application of the credits payable under Minnesota198.2Statutes 1988, section 273.13, subdivisions 22 and 23, and this198.3section, 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 199.11shall beare state senators appointed by the subcommittee on 199.12 committees of the rules committee of the senate, and five of 199.13 whomshall beare representatives, appointed by the speaker of 199.14 the house of representatives, their terms of office to commence199.15on May 1, 1943, and continue until January 3rd, 1945, or until199.16their successors are appointed and qualified.Their successors199.17 The members shall be appointedeach two years in the same manner199.18as the original members were appointed,in January of every 199.19secondodd-numbered year, commencing in January, 1945. The 11th 199.20 member ofsaidthe boardshall beis the commissioner of natural 199.21 resourcesof 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 tosaid199.29 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 allsaidfunds proposed 199.33 to be disbursed shall be first approved or disapproved bysaid199.34 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 ofsaidthe board shall be 200.1 paid by the stateof Minnesotafrom 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) Allmoneysmoney paid to the state of Minnesota 200.7 pursuant to the terms of any contract entered into by the state 200.8 under authority ofLaws 1941, chapter 544, section 4, or of said200.9section as amendedsection 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 1,200.261987, andeach yearthereafterprepare 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 tax201.14in 1987 and thereafter with respect to production in 1986 and201.15thereafter,The distribution of the taconite production tax as 201.16 provided in section 298.28, subdivisions 2 to 5, 6,paragraphs201.17 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),5040.5 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 in1992, 1993,202.21994, and 19951997 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, an202.8additional tax is imposed equal to three cents per gross ton of202.9merchantable iron ore concentrate for each one percent that the202.10iron content of the product exceeds 72 percent, when dried at202.11212 degrees Fahrenheit.202.12(c)For concentrates produced in19961999 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, for202.18concentrates produced in 1996 only, the increase in the rate of202.19tax imposed under this section over the rate imposed for the202.20previous 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 production205.36year 1989, production taxes payable in 1990, the appropriate net206.1tax capacities multiplied by 8.2 and for distributions for206.2production year 1990 and thereafter, production taxes payable in206.31991 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)27.522.28 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)5.54.46 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)2217.82 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 distributionaccording207.11to the following formula. In 1994, the amount distributed per207.12ton shall be equal to the amount per ton distributed in 1991207.13under this paragraph increased in the same proportion as the207.14increase between the fourth quarter of 1989 and the fourth207.15quarter of 1992 in the implicit price deflator as defined in207.16section 298.24, subdivision 1from a fund that receives a 207.17 distribution in 1998 of 21.3 cents per ton. On July 15, 1995,207.18and subsequent yearsof 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)FifteenIn 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.] 209.16ThreeFor 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 this209.19subdivision shall be increased in 1981 and subsequent years209.20prior to 1988 in the same proportion as the increase in the209.21steel mill products index as provided in section 298.24,209.22subdivision 1, and shall be increased in 1989, 1990, and 1991209.23according to the increase in the implicit price deflator as209.24provided in section 298.24, subdivision 1. In 1992 and 1993,209.25the amount distributed per ton shall be the same as the amount209.26distributed per ton in 1991. In 1994, the amount distributed209.27shall be the distribution per ton for 1991 increased in the same209.28proportion as the increase between the fourth quarter of 1989209.29and the fourth quarter of 1992 in the implicit price deflator as209.30defined in section 298.24, subdivision 1.That amount shall be 209.31 increased in19951999 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 amount209.34distributed in 1988 shall be increased according to the increase209.35that would have occurred in the rate of tax under section 298.24209.36if the rate had been adjusted according to the implicit price210.1deflator 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.]1.5210.10 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,and1999, 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 1998and,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 in1979 and subsequent years prior211.5to 1988 in the same proportion as the increase in the steel mill211.6products index as provided in section 298.24, subdivision 1.211.7The amount distributed in 1988 shall be increased according to211.8the increase that would have occurred in the rate of tax under211.9section 298.24 if the rate had been adjusted according to the211.10implicit price deflator for 1987 production. Those amounts211.11shall be increased in 1989, 1990, and 1991 in the same211.12proportion as the increase in the implicit price deflator as211.13provided in section 298.24, subdivision 1. In 1992 and 1993,211.14the amounts determined under subdivisions 6, paragraph (a), and211.159, shall be the distribution per ton determined for distribution211.16in 1991. In 1994, the amounts determined under subdivisions 6,211.17paragraph (a), and 9, shall be the distribution per ton211.18determined for distribution in 1991 increased in the same211.19proportion as the increase between the fourth quarter of 1989211.20and the fourth quarter of 1992 in the implicit price deflator as211.21defined in section 298.24, subdivision 1. Those amounts shall211.22be increased in 1995 and subsequent years inthe 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,paragraphsparagraph (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,school212.12district,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 30,19981999, 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 30,19981999. 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 June213.273, 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 acquiredprior to January 1, 1977213.30 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 revenueshall have the power to214.8 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 owner214.15or lessee of mineral rights shall file with the commissioner of214.16revenue all such data acquired during the preceding calendar214.17year.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 increment215.11financing districts, whether created prior or subsequent to215.12August 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 thanJuly 1August 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 auditorby the time it216.16submits it for publicationon 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 filed219.11with 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) arefora qualified manufacturingor production of220.9tangible personal property, including processing resulting in220.10the change in condition of the propertyfacility 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;TIFTAX 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 the19981999 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 onMarch 1, 1998May 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.Enterprise245.7zones that receive allocations under this subdivision may245.8continue in effect for purposes of those allocations through245.9December 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 zonewithin two years after the expiration246.13of the tax reductionsshall repay the amount of the tax 246.14 reduction or local contributionpursuant to the following246.15schedule:246.16TerminationRepayment246.17of operationsPortion246.18Less than 6 months100 percent246.196 months or more but less than 12 months75 percent246.2012 months or more but less than 18 months50 percent246.2118 months or more but less than 24 months25 percent246.22 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, 1996,257.9until 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.After257.13June 30, 1999, the tax is imposed on the total amount withheld257.14from 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 days258.13after the end of a race meet a licensee who sells pari-mutuel258.14tickets must remit to the commission or its representative an258.15amount equal to the total value of unredeemed tickets from the258.16race meet. The remittance must be accompanied by a detailed258.17statement of the money on a form the commission prescribes. Any258.18person claiming to be entitled to the proceeds of any unredeemed258.19ticket who fails to claim said proceeds prior to their being258.20remitted to the commission, may within one year after the date258.21of remittance to the commission file with the commission a258.22verified claim for such proceeds on such form as the commission258.23prescribes along with the pari-mutuel ticket. Unless the258.24claimant satisfactorily establishes the right to the proceeds,258.25the claim shall be rejected. If the claim is allowed, the258.26commission shall pay the proceeds without interest to the258.27claimant. There is hereby appropriated from the general fund to258.28the commission an amount sufficient to make payment to persons258.29entitled 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 often9.5 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 istwo1.9 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 totwo1.9 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 $700,000two1.9 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 plusfour261.24 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 plussix261.28 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). Amountsreceived as refunds or allowed as creditssubject 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 ofsection 8 project-based and264.15section 236federally assisted rental propertyupon which the264.16agency holds a first mortgage. The owner of asection 8264.17project-basedfederally assisted rental property must agree to 264.18 participate in thesection 8federal assistance program and 264.19 extend the low-income affordability restrictions on the housing 264.20 for the maximum term of thesection 8federal assistance 264.21 contract.The owner of section 236 rental property must agree264.22to participate in the section 236 interest reduction payments264.23program, to extend any existing low-income affordability264.24restrictions on the housing, and to extend any rental assistance264.25payments for the maximum term permitted under the agreement for264.26rental assistance payments. TheAn equity take-out loan must be 264.27 secured bya subordinate loan on the property and may include264.28additionalappropriate 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 266.24which is subject to prepaymentif 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 afterJune 30December 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 afterJune 30December 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 beprepared306.8as provided in section 3.98, subdivision 2, andmade 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 billintroduced in the legislature after June 30,306.341997,that seeks to impose program or financial mandates on 306.35 political subdivisionsmust include an attachment fromthe 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,307.4theand any performance standards that are to be imposed, and an307.5explanation why the goals and standards will best be served by307.6requiring compliance byon 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 andthe 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 the307.18implementing agencies have the capacity to carry out the307.19delegated responsibilities; and307.20(6)the reasons whyless intrusive measures such as307.21 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 (less308.6than $200an 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) 308.11and 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 or308.18infraction;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 1,19982000, and by September 1 of each 309.19 even-numbered year thereafter, a reportby political309.20subdivisionsof the costs ofclass A statelocal mandates 309.21 established after June 30, 1997. 309.22 The commissioner shallannuallyinclude the statewide total 309.23 of the statement of costs ofclass Alocal mandates after June 309.24 30, 1997, as a notation in the state biennial budgetfor the309.25next 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) theappropriatemix 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 property310.4taxes and the effect of the recommendations on the incidence of310.5the 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) theappropriatemix 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 property310.22taxes and the effect of the resolution on the incidence of the310.23tax 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 aqualifiedcounty 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 countyqualifies for paymentsis a qualified county 313.36 under this subdivisiononlyif 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 theratepayments 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 500,000or, (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 afterDecember 31, 1997323.8 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 the1997-981998 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 31,19961997. 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.