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 rebates; 
  1.4             providing property tax reform; 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, and solid waste tax provisions; authorizing 
  1.11            the imposition of certain local sales, use, excise, 
  1.12            and lodging taxes; modifying provisions relating to 
  1.13            the budget reserve and other accounts; making changes 
  1.14            to tax increment financing, regional development, 
  1.15            housing, and economic development provisions; 
  1.16            providing for the taxation of taconite and the 
  1.17            distribution of taconite taxes; modifying provisions 
  1.18            relating to the taxation and operation of gaming; 
  1.19            making miscellaneous changes to state and local tax 
  1.20            and administrative provisions; providing for 
  1.21            calculation of rent constituting property taxes; 
  1.22            changing the senior citizens' property tax deferral 
  1.23            program; changing certain fiscal note requirements; 
  1.24            establishing a tax study commission; providing for a 
  1.25            land transfer; appropriating money; amending Minnesota 
  1.26            Statutes 1996, sections 124.95, subdivisions 3, 4, and 
  1.27            5; 240.15, subdivision 1; 272.02, by adding a 
  1.28            subdivision; 273.111, subdivision 9; 273.112, 
  1.29            subdivision 7; 273.13, by adding subdivisions; 
  1.30            273.135, subdivision 2; 273.1391, subdivision 2; 
  1.31            273.1398, subdivision 2; 275.07, by adding a 
  1.32            subdivision; 289A.08, subdivision 13; 290.06, 
  1.33            subdivision 2c; 290.067, subdivisions 2 and 2a; 
  1.34            290.091, subdivision 2; 290.0921, subdivision 3a; 
  1.35            290.10; 290.21, subdivision 3; 290A.03, subdivision 3; 
  1.36            297A.01, subdivision 8; 297A.02, subdivisions 2 and 4; 
  1.37            297A.135, subdivision 4; 297A.25, by adding 
  1.38            subdivisions; 297E.02, subdivisions 1, 4, and 6; 
  1.39            298.225, subdivision 1; 298.28, subdivisions 4, 6, 9, 
  1.40            10, and 11; 360.653; 462.396, subdivision 2; 469.091, 
  1.41            subdivision 1; 469.101, subdivision 1; 469.169, by 
  1.42            adding a subdivision; 469.174, by adding a 
  1.43            subdivision; 469.175, subdivisions 5, 6, 6a, and by 
  1.44            adding a subdivision; 469.176, subdivision 7; 469.177, 
  1.45            by adding a subdivision; 469.1771, subdivision 5, and 
  1.46            by adding a subdivision; 473.3915, subdivisions 2 and 
  2.1             3; 475.58, subdivision 1; 477A.0122, subdivision 6; 
  2.2             477A.03, subdivision 2; 477A.14; Minnesota Statutes 
  2.3             1997 Supplement, sections 3.986, subdivisions 2 and 4; 
  2.4             3.987, subdivisions 1 and 2; 3.988, subdivision 3; 
  2.5             3.989, subdivisions 1 and 2; 16A.152, subdivision 2; 
  2.6             16A.1521; 124.239, subdivisions 5a and 5b; 124.918, 
  2.7             subdivision 8; 124.961; 270.67, subdivision 2; 272.02, 
  2.8             subdivision 1; 272.115, subdivisions 4 and 5; 273.124, 
  2.9             subdivision 14; 273.127, subdivision 3; 273.13, 
  2.10            subdivisions 22, 23, 24, 25, as amended, and 31; 
  2.11            273.1382, subdivisions 1 and 3; 275.065, subdivisions 
  2.12            3 and 6; 275.70, subdivision 5, and by adding a 
  2.13            subdivision; 275.71, subdivisions 2, 3, and 4; 287.08; 
  2.14            289A.02, subdivision 7; 289A.11, subdivision 1; 
  2.15            289A.19, subdivision 2; 290.01, subdivisions 19, 19a, 
  2.16            19b, 19c, 19f, and 31; 290.0671, subdivision 1; 
  2.17            290.0673, subdivision 2; 290.091, subdivision 6; 
  2.18            290.371, subdivision 2; 290A.03, subdivisions 11, 13, 
  2.19            and 15; 290B.03, subdivision 1; 290B.04, subdivisions 
  2.20            1, 3, and by adding subdivisions; 290B.05, 
  2.21            subdivisions 1, 2, and 4; 290B.06; 290B.07; 290B.08, 
  2.22            subdivision 2; 290B.09, subdivision 1; 291.005, 
  2.23            subdivision 1; 297A.01, subdivisions 4 and 16; 
  2.24            297A.14, subdivision 4; 297A.25, subdivisions 3, 9, 
  2.25            and 11; 297A.256, subdivision 1; 297A.48, by adding a 
  2.26            subdivision; 297B.03; 297G.01, by adding a 
  2.27            subdivision; 297G.03, subdivision 1; 297H.04, by 
  2.28            adding a subdivision; 462A.071, subdivisions 2, 4, and 
  2.29            8; and 477A.011, subdivision 36; Laws 1971, chapter 
  2.30            773, sections 1, as amended, and 2, as amended; Laws 
  2.31            1984, chapter 380, sections 1, as amended, and 2; Laws 
  2.32            1992, chapter 511, articles 2, section 52, as amended; 
  2.33            and 8, section 33, subdivision 5; Laws 1994, chapter 
  2.34            587, article 11, by adding a section; Laws 1995, 
  2.35            chapter 255, article 3, section 2, subdivisions 1, as 
  2.36            amended, and 4, as amended; Laws 1997, chapter 231, 
  2.37            articles 1, section 16, as amended; 2, sections 63, 
  2.38            subdivision 1, and 68, subdivision 3; 5, section 20; 
  2.39            7, section 47; and 13, section 19; and Laws 1997, 
  2.40            Second Special Session chapter 2, section 33; 
  2.41            proposing coding for new law in Minnesota Statutes, 
  2.42            chapters 16A; 273; 290; and 365A; repealing Minnesota 
  2.43            Statutes 1996, sections 124A.697; 124A.698; 124A.70; 
  2.44            124A.71; 124A.711, subdivision 1; 124A.72; 124A.73; 
  2.45            289A.50, subdivision 6; and 365A.09; Minnesota 
  2.46            Statutes 1997 Supplement, sections 3.987, subdivision 
  2.47            3; 14.431; 124A.711, subdivision 2; and 273.13, 
  2.48            subdivision 32; Laws 1992, chapter 499, article 7, 
  2.49            section 31. 
  2.50  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.51                             ARTICLE 1 
  2.52                        PROPERTY TAX REBATES 
  2.53     Section 1.  [1998 PROPERTY TAX REBATE.] 
  2.54     (a) A credit is allowed against the tax imposed under 
  2.55  Minnesota Statutes, chapter 290, to an individual, other than as 
  2.56  a dependent, as defined in sections 151 and 152 of the Internal 
  2.57  Revenue Code, disregarding section 152(b)(3) of the Internal 
  2.58  Revenue Code, equal to 20 percent of the qualified property tax 
  2.59  paid before January 1, 1999, for taxes assessed in 1997.  The 
  2.60  maximum amount of qualifying tax to which the credit applies is 
  3.1   $7,500. 
  3.2      (b) For property owned and occupied by the taxpayer during 
  3.3   1998, qualified property tax means property taxes payable as 
  3.4   defined in Minnesota Statutes, section 290A.03, subdivision 13, 
  3.5   assessed in 1997 and payable in 1998, and deductible by the 
  3.6   individual under section 164 of the Internal Revenue Code of 
  3.7   1986, as amended through December 31, 1997, except the 
  3.8   requirement in Minnesota Statutes, section 290A.03, subdivision 
  3.9   13, that the taxpayer own and occupy the property on January 2, 
  3.10  1998, does not apply.  In the case of agricultural land assessed 
  3.11  as part of a homestead pursuant to Minnesota Statutes, section 
  3.12  273.13, subdivision 23, the owner is allowed to calculate the 
  3.13  credit on all property taxes on the homestead, except to the 
  3.14  extent the owner is required to furnish a rent certificate under 
  3.15  section 290A.19 to a tenant leasing a part of the farm homestead.
  3.16     (c) For a renter, the qualified property tax means the 
  3.17  amount of rent constituting property taxes under Minnesota 
  3.18  Statutes, section 290A.03, subdivision 11, based on rent paid in 
  3.19  1998.  If two or more renters could be claimants under Minnesota 
  3.20  Statutes, chapter 290A, with regard to the rent constituting 
  3.21  property taxes, the rules under Minnesota Statutes, section 
  3.22  290A.03, subdivision 8, paragraph (f), apply to determine the 
  3.23  amount of the credit for the individual. 
  3.24     (d) For an individual who both owned and rented principal 
  3.25  residences in calendar year 1998, qualified taxes are the sum of 
  3.26  the amounts under paragraphs (b) and (c). 
  3.27     (e) If the amount of the credit under this section exceeds 
  3.28  the taxpayer's tax liability under chapter 290, the commissioner 
  3.29  shall refund the excess. 
  3.30     (f) To claim a credit under this section, the taxpayer must 
  3.31  attach a copy of the property tax statement and certificate of 
  3.32  rent paid, as applicable, and provide any additional information 
  3.33  the commissioner requires. 
  3.34     (g) This credit applies to taxable years beginning after 
  3.35  December 31, 1997, and before January 1, 1999. 
  3.36     (h) Payment of the credit under this section is subject to 
  4.1   Minnesota Statutes, chapter 270A, and any other provision 
  4.2   applicable to refunds under Minnesota Statutes, chapter 290. 
  4.3      (i) An amount sufficient to pay refunds under this section 
  4.4   is appropriated to the commissioner of revenue from the general 
  4.5   fund. 
  4.6      (j) The commissioner of revenue shall proportionately 
  4.7   reduce the percentage rate of the credit and the maximum credit 
  4.8   allowed under paragraph (a) to reduce the amount of credits 
  4.9   allowed that is sufficient to equal: 
  4.10     (1) the additional aid authorized to be paid under 
  4.11  Minnesota Statutes, section 273.81, over $1,500,000 for fiscal 
  4.12  year 2000; 
  4.13     (2) the reduction in revenue from advancing the effective 
  4.14  date to taxable year 1998 of the credit against individual 
  4.15  income tax for long-term care insurance under article 5, section 
  4.16  18; 
  4.17     (3) the amount of the appropriation under Minnesota 
  4.18  Statutes, section 273.1383, subdivision 4, for fiscal years 1999 
  4.19  through 2001, except this amount is reduced by any amount of the 
  4.20  appropriation under Laws 1997, Second Special Session chapter 2, 
  4.21  section 9, that the commissioner of revenue determines will not 
  4.22  be spent for the programs under that section; and 
  4.23     (4) the reduction in revenue from the exemption under 
  4.24  Minnesota Statutes, section 297A.25, subdivision 74, for 
  4.25  materials used or consumed in the production of television 
  4.26  commercials. 
  4.27     Sec. 2.  [TRANSFER TO GENERAL FUND.] 
  4.28     Notwithstanding the provisions of Minnesota Statutes, 
  4.29  section 16A.1521, paragraph (b), $489,500,000 from the property 
  4.30  tax reform account is available to the general fund in an amount 
  4.31  equal to the rebates under section 1.  This amount is available 
  4.32  beginning March 1, 1999, except as provided in section 5. 
  4.33     Sec. 3.  [ADDITIONAL 1997 PROPERTY TAX REBATE.] 
  4.34     (a) For purposes of this section, "1997 rebate" means the 
  4.35  credit allowed under Laws 1997, chapter 231, article 1, section 
  4.36  16, as amended. 
  5.1      (b) Each individual or married couple allowed a 1997 
  5.2   property tax rebate is entitled to a payment equal to 50 percent 
  5.3   of the amount of the 1997 rebate allowed.  The maximum amount of 
  5.4   this payment to an individual or married couple is $750. 
  5.5      (c) As soon as possible after July 1, 1998, but no later 
  5.6   than October 15, 1998, the commissioner of revenue shall make 
  5.7   the payments under this section to each individual who has filed 
  5.8   a return properly claiming a 1997 rebate by August 15, 1998.  
  5.9   For claims for a 1997 rebate filed after August 15, 1998, the 
  5.10  commissioner shall make the payment under this section no later 
  5.11  than 90 days after receipt of the return claiming the rebate.  
  5.12  Interest accrues, as provided for refunds under Minnesota 
  5.13  Statutes, chapter 290, beginning on October 15, 1998, for 
  5.14  payments based on returns claiming 1997 rebates filed by August 
  5.15  15, 1998, and beginning 90 days after the receipt of the return 
  5.16  for all other returns claiming 1997 rebates. 
  5.17     (d) An amount equal to payments required by this section is 
  5.18  appropriated on July 1, 1998, to the commissioner of revenue 
  5.19  from the general fund to make the payments required by this 
  5.20  section. 
  5.21     (e) This section is effective the day following final 
  5.22  enactment. 
  5.23     Sec. 4.  Laws 1997, chapter 231, article 1, section 16, as 
  5.24  amended by Laws 1997, First Special Session chapter 5, section 
  5.25  35, and Laws 1997, Third Special Session chapter 3, section 11, 
  5.26  is amended to read: 
  5.27     Sec. 16.  [PROPERTY TAX REBATE.] 
  5.28     (a) A credit is allowed against the tax imposed under 
  5.29  Minnesota Statutes, chapter 290, to an individual, other than as 
  5.30  a dependent, as defined in sections 151 and 152 of the Internal 
  5.31  Revenue Code, disregarding section 152(b)(3) of the Internal 
  5.32  Revenue Code, equal to 20 percent of the qualified property tax 
  5.33  paid in calendar year 1997 before January 1, 1998, for taxes 
  5.34  assessed in 1996.  
  5.35     (b) For property owned and occupied by the taxpayer during 
  5.36  1997, qualified tax means property taxes payable as defined in 
  6.1   Minnesota Statutes, section 290A.03, subdivision 13, assessed in 
  6.2   1996 and payable in 1997, except the requirement that the 
  6.3   taxpayer own and occupy the property on January 2, 1997, does 
  6.4   not apply.  The credit is allowed only to the individual and 
  6.5   spouse, if any, who paid the tax, whether directly, through an 
  6.6   escrow arrangement, or under a contractual agreement for the 
  6.7   purchase or sale of the property.  In the case of agricultural 
  6.8   land assessed as part of a homestead pursuant to Minnesota 
  6.9   Statutes, section 273.13, subdivision 23, the owner is allowed 
  6.10  to calculate the credit on all property taxes on the homestead, 
  6.11  except to the extent the owner is required to furnish a rent 
  6.12  certificate under Minnesota Statutes, section 290A.19, to a 
  6.13  tenant leasing a part of the farm homestead. 
  6.14     (c) For a renter, the qualified property tax means the 
  6.15  amount of rent constituting property taxes under Minnesota 
  6.16  Statutes, section 290A.03, subdivision 11, based on rent paid in 
  6.17  1997.  If two or more renters could be claimants under Minnesota 
  6.18  Statutes, chapter 290A with regard to the rent constituting 
  6.19  property taxes, the rules under Minnesota Statutes, section 
  6.20  290A.03, subdivision 8, paragraph (f), applies to determine the 
  6.21  amount of the credit for the individual. 
  6.22     (d) For an individual who both owned and rented principal 
  6.23  residences in calendar year 1997, qualified taxes are the sum of 
  6.24  the amounts under paragraphs (a) and (b). 
  6.25     (e) If the amount of the credit under this subdivision 
  6.26  exceeds the taxpayer's tax liability under this chapter, the 
  6.27  commissioner shall refund the excess. 
  6.28     (f) To claim a credit under this subdivision, the taxpayer 
  6.29  must attach a copy of the property tax statement and certificate 
  6.30  of rent paid, as applicable, and provide any additional 
  6.31  information the commissioner requires. 
  6.32     (g) An amount sufficient to pay refunds under this 
  6.33  subdivision is appropriated to the commissioner from the general 
  6.34  fund. 
  6.35     (h) This credit applies to taxable years beginning after 
  6.36  December 31, 1996, and before January 1, 1998. 
  7.1      (i) Payment of the credit under this section is subject to 
  7.2   Minnesota Statutes, chapter 270A, and any other provision 
  7.3   applicable to refunds under Minnesota Statutes, chapter 290. 
  7.4      Sec. 5.  [APPROPRIATION.] 
  7.5      Up to $1,000,000 of the amount available in section 2 is 
  7.6   appropriated from the general fund to the commissioner of 
  7.7   revenue to administer section 1.  This amount is available July 
  7.8   1, 1998. 
  7.9                              ARTICLE 2
  7.10                        PROPERTY TAX REFORM
  7.11     Section 1.  Minnesota Statutes 1997 Supplement, section 
  7.12  16A.1521, is amended to read: 
  7.13     16A.1521 [PROPERTY TAX REFORM ACCOUNT.] 
  7.14     (a) A property tax reform account is established in the 
  7.15  general fund. 
  7.16     (b) Amounts in the account are available for and may only 
  7.17  be spent to reform the property tax system by: 
  7.18     (1) reducing the class rates to the target rates specified 
  7.19  in section 273.13, subdivision 32, or to further reduce the 
  7.20  ratio of the highest class rate to lowest class rate; 
  7.21     (2) increasing state education aids to reduce property 
  7.22  taxes; 
  7.23     (3) (2) increasing the state share of education funding to 
  7.24  70 percent or greater; 
  7.25     (4) (3) increasing the education homestead credit; or 
  7.26     (5) (4) increasing the property tax refund. 
  7.27  As provided by section 273.13, subdivision 32, the governor 
  7.28  shall recommend to the legislature uses of money in the account 
  7.29  to compress class rate ratios, while mitigating the shifting of 
  7.30  relative property tax burdens from one class to another through 
  7.31  the mechanisms listed in clauses (2) through (5).  
  7.32     (c) The balance in the account does not cancel and remains 
  7.33  in the account until appropriated for property tax reform.  
  7.34  Investment earnings on the account are credited to the account. 
  7.35     Sec. 2.  [16A.1522] [FORECAST OF GENERAL FUND BALANCE; 
  7.36  SUSPENSION.] 
  8.1      If, based on a November forecast in any year, the 
  8.2   commissioner of finance determines that there will be a negative 
  8.3   general fund balance at the close of the biennium which includes 
  8.4   the next fiscal year, and that the negative balance would reduce 
  8.5   the general fund budget reserve below five percent of estimated 
  8.6   expenditures for the next fiscal year, the following occur, 
  8.7   beginning in the levy year following the forecast: 
  8.8      (1) the rate and the maximum amount of the education 
  8.9   homestead credit are the same as the applicable rate and maximum 
  8.10  for taxes payable in 1998 under section 273.1382; and 
  8.11     (2) the class rates are the same as the applicable class 
  8.12  rates for taxes payable in 1998 under section 273.13, 
  8.13  subdivisions 22 to 25 and 31. 
  8.14     After each November forecast, the commissioner of finance 
  8.15  shall certify the effect of this section to the commissioner of 
  8.16  revenue.  For the purposes of this section, "next fiscal year" 
  8.17  means the fiscal year beginning on the July 1 following the 
  8.18  November forecast.  
  8.19     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
  8.20  124.239, subdivision 5a, is amended to read: 
  8.21     Subd. 5a.  [ALTERNATIVE FACILITIES AID.] A district's 
  8.22  alternative facilities aid is the amount equal to the district's 
  8.23  annual debt service costs, provided that the amount does not 
  8.24  exceed the amount certified to be levied for those purposes for 
  8.25  taxes payable in 1997, or for a district that made a levy under 
  8.26  subdivision 5, paragraph (b), the lesser of the district's 
  8.27  annual levy amount, or one-half of the amount of levy that it 
  8.28  certified for that purpose for taxes payable in 1997. 
  8.29     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
  8.30  124.239, subdivision 5b, is amended to read: 
  8.31     Subd. 5b.  [ALTERNATIVE FACILITIES APPROPRIATION.] (a) An 
  8.32  amount not to exceed $17,000,000 $20,785,000 for fiscal year 
  8.33  2000 and $21,205,000 for fiscal year 2001 and each year 
  8.34  thereafter is appropriated from the general fund to the 
  8.35  commissioner of children, families, and learning for fiscal year 
  8.36  2000 and each year thereafter for payment of alternative 
  9.1   facilities aid under subdivision 5a.  The 2000 appropriation 
  9.2   includes $1,700,000 for 1999 and $15,300,000 for 2000. 
  9.3      (b) The appropriation in paragraph (a) must be reduced by 
  9.4   the amount of any money specifically appropriated for the same 
  9.5   purpose in any year from any state fund. 
  9.6      Sec. 5.  Minnesota Statutes 1996, section 124.95, 
  9.7   subdivision 3, is amended to read: 
  9.8      Subd. 3.  [DEBT SERVICE EQUALIZATION REVENUE.] (a) For 
  9.9   fiscal years 1995 2000 and later, the tier 1 debt service 
  9.10  equalization revenue of a district equals the lesser of:  (1) 
  9.11  the amount raised by a levy of 14 percent times the adjusted net 
  9.12  tax capacity of the district; or (2) the eligible debt service 
  9.13  revenue minus the amount raised by a levy of ten percent times 
  9.14  the adjusted net tax capacity of the district. 
  9.15     (b) For fiscal year 1993, debt service equalization revenue 
  9.16  equals one-third of the amount calculated in paragraph (a). 
  9.17     (c) For fiscal year 1994, debt service equalization revenue 
  9.18  equals two-thirds of the amount calculated in paragraph (a) 2000 
  9.19  and later, tier 2 debt service equalization revenue equals the 
  9.20  greater of:  (1) zero; or (2) the total debt service 
  9.21  equalization revenue of the district less the district's tier 1 
  9.22  debt service equalization revenue. 
  9.23     Sec. 6.  Minnesota Statutes 1996, section 124.95, 
  9.24  subdivision 4, is amended to read: 
  9.25     Subd. 4.  [EQUALIZED DEBT SERVICE LEVY.] (a) To obtain tier 
  9.26  1 debt service equalization revenue, a district must levy an 
  9.27  amount not to exceed the district's tier 1 debt service 
  9.28  equalization revenue times the lesser of one or the ratio of: 
  9.29     (1) the quotient derived by dividing the adjusted net tax 
  9.30  capacity of the district for the year before the year the levy 
  9.31  is certified by the actual pupil units in the district for the 
  9.32  school year ending in the year prior to the year the levy is 
  9.33  certified; to 
  9.34     (2) $4,707.50. 
  9.35     (b) To obtain tier 2 debt service equalization revenue, a 
  9.36  district must levy an amount not to exceed the district's tier 2 
 10.1   debt service equalization revenue times the lesser of one or the 
 10.2   ratio of: 
 10.3      (1) the quotient derived by dividing the adjusted net tax 
 10.4   capacity of the district for the year before the year the levy 
 10.5   is certified by the actual pupil units in the district for the 
 10.6   school year ending in the year prior to the year the levy is 
 10.7   certified; to 
 10.8      (2) $5,200. 
 10.9      Sec. 7.  Minnesota Statutes 1996, section 124.95, 
 10.10  subdivision 5, is amended to read: 
 10.11     Subd. 5.  [DEBT SERVICE EQUALIZATION AID.] (a) A district's 
 10.12  tier 1 debt service equalization aid is the difference between 
 10.13  the tier 1 debt service equalization revenue and the tier 1 
 10.14  equalized debt service levy. 
 10.15     (b) A district's tier 2 debt service equalization aid is 
 10.16  the difference between the tier 2 debt service equalization 
 10.17  revenue and the tier 2 equalized debt service levy. 
 10.18     (c) If the amount of debt service equalization aid actually 
 10.19  appropriated for the fiscal year in which this calculation is 
 10.20  made is insufficient to fully fund debt service equalization 
 10.21  aid, the commissioner shall prorate the amount of aid across all 
 10.22  eligible districts. 
 10.23     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
 10.24  124.961, is amended to read: 
 10.25     124.961 [DEBT SERVICE APPROPRIATION.] 
 10.26     (a) $35,480,000 in fiscal year 1998, $38,159,000 in fiscal 
 10.27  year 1999, and $38,390,000 $40,190,000 in fiscal year 2000 and 
 10.28  each year thereafter is appropriated from the general fund to 
 10.29  the commissioner of children, families, and learning for payment 
 10.30  of debt service equalization aid under section 124.95.  The 2000 
 10.31  appropriation includes $3,842,000 for 1999 and $34,548,000 for 
 10.32  2000. 
 10.33     (b) The appropriations in paragraph (a) must be reduced by 
 10.34  the amount of any money specifically appropriated for the same 
 10.35  purpose in any year from any state fund. 
 10.36     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
 11.1   273.127, subdivision 3, is amended to read: 
 11.2      Subd. 3.  [CLASS 4C PROPERTIES.] For the market value of 
 11.3   properties that meet the criteria of subdivision 2, paragraph 
 11.4   (a), and which no longer qualify as a result of the eligibility 
 11.5   criteria specified in section 273.126, a class rate of 2.4 2.3 
 11.6   percent applies for taxes payable in 1999 and a class rate of 
 11.7   2.6 2.5 percent applies for taxes payable in 2000. 
 11.8      Sec. 10.  Minnesota Statutes 1997 Supplement, section 
 11.9   273.13, subdivision 22, is amended to read: 
 11.10     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
 11.11  23, real estate which is residential and used for homestead 
 11.12  purposes is class 1.  The market value of class 1a property must 
 11.13  be determined based upon the value of the house, garage, and 
 11.14  land.  
 11.15     For taxes payable in 1998 and thereafter, The first $75,000 
 11.16  tier of market value of class 1a property has a net class rate 
 11.17  of one percent of its market value; and the remaining market 
 11.18  value of class 1a property that exceeds $75,000 has a class rate 
 11.19  of 1.85 1.8 percent of its market value for taxes payable in 
 11.20  1999, 1.75 percent for taxes payable in 2000, and 1.7 percent 
 11.21  for taxes payable in 2001 and thereafter.  For the purposes of 
 11.22  this paragraph, the first tier means the first $76,000 of market 
 11.23  value for taxes payable in 1999, the first $77,000 of market 
 11.24  value for taxes payable in 2000, and the first $78,000 of market 
 11.25  value for taxes payable in 2001 and thereafter.  
 11.26     (b) Class 1b property includes homestead real estate or 
 11.27  homestead manufactured homes used for the purposes of a 
 11.28  homestead by 
 11.29     (1) any blind person, or the blind person and the blind 
 11.30  person's spouse; or 
 11.31     (2) any person, hereinafter referred to as "veteran," who: 
 11.32     (i) served in the active military or naval service of the 
 11.33  United States; and 
 11.34     (ii) is entitled to compensation under the laws and 
 11.35  regulations of the United States for permanent and total 
 11.36  service-connected disability due to the loss, or loss of use, by 
 12.1   reason of amputation, ankylosis, progressive muscular 
 12.2   dystrophies, or paralysis, of both lower extremities, such as to 
 12.3   preclude motion without the aid of braces, crutches, canes, or a 
 12.4   wheelchair; and 
 12.5      (iii) has acquired a special housing unit with special 
 12.6   fixtures or movable facilities made necessary by the nature of 
 12.7   the veteran's disability, or the surviving spouse of the 
 12.8   deceased veteran for as long as the surviving spouse retains the 
 12.9   special housing unit as a homestead; or 
 12.10     (3) any person who: 
 12.11     (i) is permanently and totally disabled and 
 12.12     (ii) receives 90 percent or more of total income from 
 12.13     (A) aid from any state as a result of that disability; or 
 12.14     (B) supplemental security income for the disabled; or 
 12.15     (C) workers' compensation based on a finding of total and 
 12.16  permanent disability; or 
 12.17     (D) social security disability, including the amount of a 
 12.18  disability insurance benefit which is converted to an old age 
 12.19  insurance benefit and any subsequent cost of living increases; 
 12.20  or 
 12.21     (E) aid under the federal Railroad Retirement Act of 1937, 
 12.22  United States Code Annotated, title 45, section 228b(a)5; or 
 12.23     (F) a pension from any local government retirement fund 
 12.24  located in the state of Minnesota as a result of that 
 12.25  disability; or 
 12.26     (G) pension, annuity, or other income paid as a result of 
 12.27  that disability from a private pension or disability plan, 
 12.28  including employer, employee, union, and insurance plans and 
 12.29     (iii) has household income as defined in section 290A.03, 
 12.30  subdivision 5, of $50,000 or less; or 
 12.31     (4) any person who is permanently and totally disabled and 
 12.32  whose household income as defined in section 290A.03, 
 12.33  subdivision 5, is 275 percent or less of the federal poverty 
 12.34  level. 
 12.35     Property is classified and assessed under clause (4) only 
 12.36  if the government agency or income-providing source certifies, 
 13.1   upon the request of the homestead occupant, that the homestead 
 13.2   occupant satisfies the disability requirements of this paragraph.
 13.3      Property is classified and assessed pursuant to clause (1) 
 13.4   only if the commissioner of economic security certifies to the 
 13.5   assessor that the homestead occupant satisfies the requirements 
 13.6   of this paragraph.  
 13.7      Permanently and totally disabled for the purpose of this 
 13.8   subdivision means a condition which is permanent in nature and 
 13.9   totally incapacitates the person from working at an occupation 
 13.10  which brings the person an income.  The first $32,000 market 
 13.11  value of class 1b property has a net class rate of .45 percent 
 13.12  of its market value.  The remaining market value of class 1b 
 13.13  property has a net class rate using the rates for class 1 or 
 13.14  class 2a property, whichever is appropriate, of similar market 
 13.15  value.  
 13.16     (c) Class 1c property is commercial use real property that 
 13.17  abuts a lakeshore line and is devoted to temporary and seasonal 
 13.18  residential occupancy for recreational purposes but not devoted 
 13.19  to commercial purposes for more than 250 days in the year 
 13.20  preceding the year of assessment, and that includes a portion 
 13.21  used as a homestead by the owner, which includes a dwelling 
 13.22  occupied as a homestead by a shareholder of a corporation that 
 13.23  owns the resort or a partner in a partnership that owns the 
 13.24  resort, even if the title to the homestead is held by the 
 13.25  corporation or partnership.  For purposes of this clause, 
 13.26  property is devoted to a commercial purpose on a specific day if 
 13.27  any portion of the property, excluding the portion used 
 13.28  exclusively as a homestead, is used for residential occupancy 
 13.29  and a fee is charged for residential occupancy.  In order for a 
 13.30  property to be classified as class 1c, at least 40 percent of 
 13.31  the annual gross lodging receipts related to the property must 
 13.32  be from business conducted between Memorial Day weekend and 
 13.33  Labor Day weekend, and at least 60 percent of all bookings by 
 13.34  lodging guests during the year must be for periods of at least 
 13.35  two consecutive nights.  Class 1c property has a class rate of 
 13.36  one percent of total market value with the following 
 14.1   limitation:  the area of the property must not exceed 100 feet 
 14.2   of lakeshore footage for each cabin or campsite located on the 
 14.3   property up to a total of 800 feet and 500 feet in depth, 
 14.4   measured away from the lakeshore. 
 14.5      (d) Class 1d property includes structures that meet all of 
 14.6   the following criteria: 
 14.7      (1) the structure is located on property that is classified 
 14.8   as agricultural property under section 273.13, subdivision 23; 
 14.9      (2) the structure is occupied exclusively by seasonal farm 
 14.10  workers during the time when they work on that farm, and the 
 14.11  occupants are not charged rent for the privilege of occupying 
 14.12  the property, provided that use of the structure for storage of 
 14.13  farm equipment and produce does not disqualify the property from 
 14.14  classification under this paragraph; 
 14.15     (3) the structure meets all applicable health and safety 
 14.16  requirements for the appropriate season; and 
 14.17     (4) the structure is not saleable as residential property 
 14.18  because it does not comply with local ordinances relating to 
 14.19  location in relation to streets or roads. 
 14.20     The market value of class 1d property has the same class 
 14.21  rates as class 1a property under paragraph (a). 
 14.22     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
 14.23  273.13, subdivision 23, is amended to read: 
 14.24     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
 14.25  land including any improvements that is homesteaded.  The market 
 14.26  value of the house and garage and immediately surrounding one 
 14.27  acre of land has the same class rates as class 1a property under 
 14.28  subdivision 22.  The market value of the remaining land 
 14.29  including improvements up to $115,000 has a net class rate 
 14.30  of 0.4 0.38 percent of market value for taxes payable in 1999, 
 14.31  0.36 percent for taxes payable in 2000, and 0.35 percent for 
 14.32  taxes payable in 2001 and thereafter.  The remaining market 
 14.33  value of class 2a property over $115,000 of market value that 
 14.34  does not exceed 320 acres has a net class rate of 0.9 0.85 
 14.35  percent of market value for taxes payable in 1999, 0.83 percent 
 14.36  for taxes payable in 2001, and 0.8 percent for taxes payable in 
 15.1   2001 and thereafter.  The remaining property market value over 
 15.2   the $115,000 of market value in excess of 320 acres has a class 
 15.3   rate of 1.4 percent of market value equal to the class rate for 
 15.4   class 2b property.  
 15.5      (b) Class 2b property is (1) real estate, rural in 
 15.6   character and used exclusively for growing trees for timber, 
 15.7   lumber, and wood and wood products; (2) real estate that is not 
 15.8   improved with a structure and is used exclusively for growing 
 15.9   trees for timber, lumber, and wood and wood products, if the 
 15.10  owner has participated or is participating in a cost-sharing 
 15.11  program for afforestation, reforestation, or timber stand 
 15.12  improvement on that particular property, administered or 
 15.13  coordinated by the commissioner of natural resources; (3) real 
 15.14  estate that is nonhomestead agricultural land; or (4) a landing 
 15.15  area or public access area of a privately owned public use 
 15.16  airport.  Class 2b property has a net class rate of 1.4 1.35 
 15.17  percent of market value for taxes payable in 1999, 1.3 percent 
 15.18  for taxes payable in 2000, and 1.25 percent for taxes payable in 
 15.19  2001 and thereafter. 
 15.20     (c) Agricultural land as used in this section means 
 15.21  contiguous acreage of ten acres or more, used during the 
 15.22  preceding year for agricultural purposes.  "Agricultural 
 15.23  purposes" as used in this section means the raising or 
 15.24  cultivation of agricultural products or enrollment in the 
 15.25  Reinvest in Minnesota program under sections 103F.501 to 
 15.26  103F.535 or the federal Conservation Reserve Program as 
 15.27  contained in Public Law Number 99-198.  Contiguous acreage on 
 15.28  the same parcel, or contiguous acreage on an immediately 
 15.29  adjacent parcel under the same ownership, may also qualify as 
 15.30  agricultural land, but only if it is pasture, timber, waste, 
 15.31  unusable wild land, or land included in state or federal farm 
 15.32  programs.  Agricultural classification for property shall be 
 15.33  determined excluding the house, garage, and immediately 
 15.34  surrounding one acre of land, and shall not be based upon the 
 15.35  market value of any residential structures on the parcel or 
 15.36  contiguous parcels under the same ownership. 
 16.1      (d) Real estate, excluding the house, garage, and 
 16.2   immediately surrounding one acre of land, of less than ten acres 
 16.3   which is exclusively and intensively used for raising or 
 16.4   cultivating agricultural products, shall be considered as 
 16.5   agricultural land.  
 16.6      Land shall be classified as agricultural even if all or a 
 16.7   portion of the agricultural use of that property is the leasing 
 16.8   to, or use by another person for agricultural purposes. 
 16.9      Classification under this subdivision is not determinative 
 16.10  for qualifying under section 273.111. 
 16.11     The property classification under this section supersedes, 
 16.12  for property tax purposes only, any locally administered 
 16.13  agricultural policies or land use restrictions that define 
 16.14  minimum or maximum farm acreage. 
 16.15     (e) The term "agricultural products" as used in this 
 16.16  subdivision includes production for sale of:  
 16.17     (1) livestock, dairy animals, dairy products, poultry and 
 16.18  poultry products, fur-bearing animals, horticultural and nursery 
 16.19  stock described in sections 18.44 to 18.61, fruit of all kinds, 
 16.20  vegetables, forage, grains, bees, and apiary products by the 
 16.21  owner; 
 16.22     (2) fish bred for sale and consumption if the fish breeding 
 16.23  occurs on land zoned for agricultural use; 
 16.24     (3) the commercial boarding of horses if the boarding is 
 16.25  done in conjunction with raising or cultivating agricultural 
 16.26  products as defined in clause (1); 
 16.27     (4) property which is owned and operated by nonprofit 
 16.28  organizations used for equestrian activities, excluding racing; 
 16.29  and 
 16.30     (5) game birds and waterfowl bred and raised for use on a 
 16.31  shooting preserve licensed under section 97A.115.  
 16.32     (f) If a parcel used for agricultural purposes is also used 
 16.33  for commercial or industrial purposes, including but not limited 
 16.34  to:  
 16.35     (1) wholesale and retail sales; 
 16.36     (2) processing of raw agricultural products or other goods; 
 17.1      (3) warehousing or storage of processed goods; and 
 17.2      (4) office facilities for the support of the activities 
 17.3   enumerated in clauses (1), (2), and (3), 
 17.4   the assessor shall classify the part of the parcel used for 
 17.5   agricultural purposes as class 1b, 2a, or 2b, whichever is 
 17.6   appropriate, and the remainder in the class appropriate to its 
 17.7   use.  The grading, sorting, and packaging of raw agricultural 
 17.8   products for first sale is considered an agricultural purpose.  
 17.9   A greenhouse or other building where horticultural or nursery 
 17.10  products are grown that is also used for the conduct of retail 
 17.11  sales must be classified as agricultural if it is primarily used 
 17.12  for the growing of horticultural or nursery products from seed, 
 17.13  cuttings, or roots and occasionally as a showroom for the retail 
 17.14  sale of those products.  Use of a greenhouse or building only 
 17.15  for the display of already grown horticultural or nursery 
 17.16  products does not qualify as an agricultural purpose.  
 17.17     The assessor shall determine and list separately on the 
 17.18  records the market value of the homestead dwelling and the one 
 17.19  acre of land on which that dwelling is located.  If any farm 
 17.20  buildings or structures are located on this homesteaded acre of 
 17.21  land, their market value shall not be included in this separate 
 17.22  determination.  
 17.23     (g) To qualify for classification under paragraph (b), 
 17.24  clause (4), a privately owned public use airport must be 
 17.25  licensed as a public airport under section 360.018.  For 
 17.26  purposes of paragraph (b), clause (4), "landing area" means that 
 17.27  part of a privately owned public use airport properly cleared, 
 17.28  regularly maintained, and made available to the public for use 
 17.29  by aircraft and includes runways, taxiways, aprons, and sites 
 17.30  upon which are situated landing or navigational aids.  A landing 
 17.31  area also includes land underlying both the primary surface and 
 17.32  the approach surfaces that comply with all of the following:  
 17.33     (i) the land is properly cleared and regularly maintained 
 17.34  for the primary purposes of the landing, taking off, and taxiing 
 17.35  of aircraft; but that portion of the land that contains 
 17.36  facilities for servicing, repair, or maintenance of aircraft is 
 18.1   not included as a landing area; 
 18.2      (ii) the land is part of the airport property; and 
 18.3      (iii) the land is not used for commercial or residential 
 18.4   purposes. 
 18.5   The land contained in a landing area under paragraph (b), clause 
 18.6   (4), must be described and certified by the commissioner of 
 18.7   transportation.  The certification is effective until it is 
 18.8   modified, or until the airport or landing area no longer meets 
 18.9   the requirements of paragraph (b), clause (4).  For purposes of 
 18.10  paragraph (b), clause (4), "public access area" means property 
 18.11  used as an aircraft parking ramp, apron, or storage hangar, or 
 18.12  an arrival and departure building in connection with the airport.
 18.13     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 18.14  273.13, subdivision 24, is amended to read: 
 18.15     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 18.16  property and utility real and personal property, except class 5 
 18.17  property as identified in subdivision 31, clause (1), is class 
 18.18  3a.  Each parcel has a class rate of 2.7 2.6 percent for taxes 
 18.19  payable in 1999, 2.5 percent for taxes payable in 2000, and 2.4 
 18.20  percent for taxes payable in 2001 and thereafter of the first 
 18.21  tier of market value, and 4.0 3.8 percent for taxes payable in 
 18.22  1999, 3.6 percent for taxes payable in 2000, and 3.5 percent for 
 18.23  taxes payable in 2001 and thereafter of the remaining market 
 18.24  value, except that in the case of contiguous parcels of 
 18.25  commercial and industrial property owned by the same person or 
 18.26  entity, only the value equal to the first-tier value of the 
 18.27  contiguous parcels qualifies for the reduced class rate.  For 
 18.28  the purposes of this subdivision, the first tier means the first 
 18.29  $150,000 of market value.  In the case of utility property owned 
 18.30  by one person or entity, only one parcel in each county has a 
 18.31  reduced class rate on the first tier of market value. 
 18.32     For purposes of this paragraph, parcels are considered to 
 18.33  be contiguous even if they are separated from each other by a 
 18.34  road, street, vacant lot, waterway, or other similar intervening 
 18.35  type of property. 
 18.36     (b) Employment property defined in section 469.166, during 
 19.1   the period provided in section 469.170, shall constitute class 
 19.2   3b and has a class rate of 2.3 percent of the first $50,000 of 
 19.3   market value and 3.6 percent for taxes payable in 1999 and 2000, 
 19.4   and 3.5 percent for taxes payable in 2001 and thereafter of the 
 19.5   remainder, except that for employment property located in a 
 19.6   border city enterprise zone designated pursuant to section 
 19.7   469.168, subdivision 4, paragraph (c), the class rate of the 
 19.8   first tier of market value and the class rate of the remainder 
 19.9   is determined under paragraph (a), unless the governing body of 
 19.10  the city designated as an enterprise zone determines that a 
 19.11  specific parcel shall be assessed pursuant to the first clause 
 19.12  of this sentence.  The governing body may provide for assessment 
 19.13  under the first clause of the preceding sentence only for 
 19.14  property which is located in an area which has been designated 
 19.15  by the governing body for the receipt of tax reductions 
 19.16  authorized by section 469.171, subdivision 1. 
 19.17     (c) Structures which are (i) located on property classified 
 19.18  as class 3a, (ii) constructed under an initial building permit 
 19.19  issued after January 2, 1996, (iii) located in a transit zone as 
 19.20  defined under section 473.3915, subdivision 3, (iv) located 
 19.21  within the boundaries of a school district, and (v) not 
 19.22  primarily used for retail or transient lodging purposes, shall 
 19.23  have a class rate equal to 85 percent of the class rate of the 
 19.24  second tier of the commercial property rate under paragraph (a) 
 19.25  on any portion of the market value that does not qualify for the 
 19.26  first tier class rate under paragraph (a).  As used in item (v), 
 19.27  a structure is primarily used for retail or transient lodging 
 19.28  purposes if over 50 percent of its square footage is used for 
 19.29  those purposes.  The four percent rate A class rate equal to 85 
 19.30  percent of the class rate of the second tier of the commercial 
 19.31  property rate under paragraph (a) shall also apply to 
 19.32  improvements to existing structures that meet the requirements 
 19.33  of items (i) to (v) if the improvements are constructed under an 
 19.34  initial building permit issued after January 2, 1996, even if 
 19.35  the remainder of the structure was constructed prior to January 
 19.36  2, 1996.  For the purposes of this paragraph, a structure shall 
 20.1   be considered to be located in a transit zone if any portion of 
 20.2   the structure lies within the zone.  If any property once 
 20.3   eligible for treatment under this paragraph ceases to remain 
 20.4   eligible due to revisions in transit zone boundaries, the 
 20.5   property shall continue to receive treatment under this 
 20.6   paragraph for a period of three years. 
 20.7      Sec. 13.  Minnesota Statutes 1997 Supplement, section 
 20.8   273.13, subdivision 25, as amended by Laws 1997, Third Special 
 20.9   Session chapter 3, section 28, is amended to read: 
 20.10     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 20.11  estate containing four or more units and used or held for use by 
 20.12  the owner or by the tenants or lessees of the owner as a 
 20.13  residence for rental periods of 30 days or more.  Class 4a also 
 20.14  includes hospitals licensed under sections 144.50 to 144.56, 
 20.15  other than hospitals exempt under section 272.02, and contiguous 
 20.16  property used for hospital purposes, without regard to whether 
 20.17  the property has been platted or subdivided.  Class 4a property 
 20.18  in a city with a population of 5,000 or less, that is (1) 
 20.19  located outside of the metropolitan area, as defined in section 
 20.20  473.121, subdivision 2, or outside any county contiguous to the 
 20.21  metropolitan area, and (2) whose city boundary is at least 15 
 20.22  miles from the boundary of any city with a population greater 
 20.23  than 5,000 has a class rate of 2.3 2.25 percent of market value 
 20.24  for taxes payable in 1999, 2.2 percent for taxes payable in 
 20.25  2000, and 2.15 percent for taxes payable in 2001 and 
 20.26  thereafter.  All other class 4a property has a class rate of 2.9 
 20.27  2.75 percent of market value for taxes payable in 1999, 2.6 
 20.28  percent for taxes payable in 2000, and 2.5 percent for taxes 
 20.29  payable in 2001 and thereafter.  For purposes of this paragraph, 
 20.30  population has the same meaning given in section 477A.011, 
 20.31  subdivision 3. 
 20.32     (b) Class 4b includes: 
 20.33     (1) residential real estate containing less than four units 
 20.34  that does not qualify as class 4bb, other than seasonal 
 20.35  residential, and recreational; 
 20.36     (2) manufactured homes not classified under any other 
 21.1   provision; 
 21.2      (3) a dwelling, garage, and surrounding one acre of 
 21.3   property on a nonhomestead farm classified under subdivision 23, 
 21.4   paragraph (b) containing two or three units; 
 21.5      (4) unimproved property that is classified residential as 
 21.6   determined under section 273.13, subdivision 33.  
 21.7      Class 4b property has a class rate of 2.1 2 percent of 
 21.8   market value for taxes payable in 1999, 1.8 percent for taxes 
 21.9   payable in 2000, and 1.7 percent for taxes payable in 2001 and 
 21.10  thereafter.  
 21.11     (c) Class 4bb includes: 
 21.12     (1) nonhomestead residential real estate containing one 
 21.13  unit, other than seasonal residential, and recreational; and 
 21.14     (2) a single family dwelling, garage, and surrounding one 
 21.15  acre of property on a nonhomestead farm classified under 
 21.16  subdivision 23, paragraph (b). 
 21.17     Class 4bb has a class rate of 1.9 1.6 percent for taxes 
 21.18  payable in 1999, 1.4 percent for taxes payable in 2000, and 1.25 
 21.19  percent for taxes payable in 2001 and thereafter on the first 
 21.20  $75,000 tier of market value and a class rate of 2.1 2 percent 
 21.21  for taxes payable in 1999, 1.8 percent for taxes payable in 
 21.22  2000, and 1.7 percent for taxes payable in 2001 and thereafter 
 21.23  of its remaining market value that exceeds $75,000.  For the 
 21.24  purposes of this paragraph, the first tier means the first 
 21.25  $76,000 of market value for taxes payable in 1999, the first 
 21.26  $77,000 of market value for taxes payable in 2000, and the first 
 21.27  $78,000 of market value for taxes payable in 2001 and thereafter.
 21.28     Property that has been classified as seasonal recreational 
 21.29  residential property at any time during which it has been owned 
 21.30  by the current owner or spouse of the current owner does not 
 21.31  qualify for class 4bb. 
 21.32     (d) Class 4c property includes: 
 21.33     (1) except as provided in subdivision 22, paragraph (c), 
 21.34  real property devoted to temporary and seasonal residential 
 21.35  occupancy for recreation purposes, including real property 
 21.36  devoted to temporary and seasonal residential occupancy for 
 22.1   recreation purposes and not devoted to commercial purposes for 
 22.2   more than 250 days in the year preceding the year of 
 22.3   assessment.  For purposes of this clause, property is devoted to 
 22.4   a commercial purpose on a specific day if any portion of the 
 22.5   property is used for residential occupancy, and a fee is charged 
 22.6   for residential occupancy.  In order for a property to be 
 22.7   classified as class 4c, seasonal recreational residential for 
 22.8   commercial purposes, at least 40 percent of the annual gross 
 22.9   lodging receipts related to the property must be from business 
 22.10  conducted between Memorial Day weekend and Labor Day weekend and 
 22.11  at least 60 percent of all bookings by lodging guests during the 
 22.12  year must be for periods of at least two consecutive nights.  
 22.13  Class 4c also includes commercial use real property used 
 22.14  exclusively for recreational purposes in conjunction with class 
 22.15  4c property devoted to temporary and seasonal residential 
 22.16  occupancy for recreational purposes, up to a total of two acres, 
 22.17  provided the property is not devoted to commercial recreational 
 22.18  use for more than 250 days in the year preceding the year of 
 22.19  assessment and is located within two miles of the class 4c 
 22.20  property with which it is used.  Class 4c property classified in 
 22.21  this clause also includes the remainder of class 1c resorts.  
 22.22  Owners of real property devoted to temporary and seasonal 
 22.23  residential occupancy for recreation purposes and all or a 
 22.24  portion of which was devoted to commercial purposes for not more 
 22.25  than 250 days in the year preceding the year of assessment 
 22.26  desiring classification as class 1c or 4c, must submit a 
 22.27  declaration to the assessor designating the cabins or units 
 22.28  occupied for 250 days or less in the year preceding the year of 
 22.29  assessment by January 15 of the assessment year.  Those cabins 
 22.30  or units and a proportionate share of the land on which they are 
 22.31  located will be designated class 1c or 4c as otherwise 
 22.32  provided.  The remainder of the cabins or units and a 
 22.33  proportionate share of the land on which they are located will 
 22.34  be designated as class 3a.  The owner of property desiring 
 22.35  designation as class 1c or 4c property must provide guest 
 22.36  registers or other records demonstrating that the units for 
 23.1   which class 1c or 4c designation is sought were not occupied for 
 23.2   more than 250 days in the year preceding the assessment if so 
 23.3   requested.  The portion of a property operated as a (1) 
 23.4   restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 23.5   facility operated on a commercial basis not directly related to 
 23.6   temporary and seasonal residential occupancy for recreation 
 23.7   purposes shall not qualify for class 1c or 4c; 
 23.8      (2) qualified property used as a golf course if: 
 23.9      (i) any portion of the property is located within a county 
 23.10  that has a population of less than 50,000, or within a county 
 23.11  containing a golf course owned by a municipality, the county, or 
 23.12  a special taxing district; 
 23.13     (ii) it is open to the public on a daily fee basis.  It may 
 23.14  charge membership fees or dues, but a membership fee may not be 
 23.15  required in order to use the property for golfing, and its green 
 23.16  fees for golfing must be comparable to green fees typically 
 23.17  charged by municipal courses; and 
 23.18     (iii) it meets the requirements of section 273.112, 
 23.19  subdivision 3, paragraph (d). 
 23.20     A structure used as a clubhouse, restaurant, or place of 
 23.21  refreshment in conjunction with the golf course is classified as 
 23.22  class 3a property. 
 23.23     (3) real property up to a maximum of one acre of land owned 
 23.24  by a nonprofit community service oriented organization; provided 
 23.25  that the property is not used for a revenue-producing activity 
 23.26  for more than six days in the calendar year preceding the year 
 23.27  of assessment and the property is not used for residential 
 23.28  purposes on either a temporary or permanent basis.  For purposes 
 23.29  of this clause, a "nonprofit community service oriented 
 23.30  organization" means any corporation, society, association, 
 23.31  foundation, or institution organized and operated exclusively 
 23.32  for charitable, religious, fraternal, civic, or educational 
 23.33  purposes, and which is exempt from federal income taxation 
 23.34  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 23.35  Revenue Code of 1986, as amended through December 31, 1990.  For 
 23.36  purposes of this clause, "revenue-producing activities" shall 
 24.1   include but not be limited to property or that portion of the 
 24.2   property that is used as an on-sale intoxicating liquor or 3.2 
 24.3   percent malt liquor establishment licensed under chapter 340A, a 
 24.4   restaurant open to the public, bowling alley, a retail store, 
 24.5   gambling conducted by organizations licensed under chapter 349, 
 24.6   an insurance business, or office or other space leased or rented 
 24.7   to a lessee who conducts a for-profit enterprise on the 
 24.8   premises.  Any portion of the property which is used for 
 24.9   revenue-producing activities for more than six days in the 
 24.10  calendar year preceding the year of assessment shall be assessed 
 24.11  as class 3a.  The use of the property for social events open 
 24.12  exclusively to members and their guests for periods of less than 
 24.13  24 hours, when an admission is not charged nor any revenues are 
 24.14  received by the organization shall not be considered a 
 24.15  revenue-producing activity; 
 24.16     (4) post-secondary student housing of not more than one 
 24.17  acre of land that is owned by a nonprofit corporation organized 
 24.18  under chapter 317A and is used exclusively by a student 
 24.19  cooperative, sorority, or fraternity for on-campus housing or 
 24.20  housing located within two miles of the border of a college 
 24.21  campus; and 
 24.22     (5) manufactured home parks as defined in section 327.14, 
 24.23  subdivision 3. 
 24.24     Class 4c property has a the following class rate of 2.1 
 24.25  percent of market value, except that rates:  (i) for each parcel 
 24.26  of seasonal residential recreational property not used for 
 24.27  commercial purposes the first $75,000 tier of market value has a 
 24.28  class rate of 1.4 1.35 percent for taxes payable in 1999, 1.3 
 24.29  percent for taxes payable in 2000, and 1.25 percent for taxes 
 24.30  payable in 2001 and thereafter, and the remaining market value 
 24.31  that exceeds $75,000 has a class rate of 2.5 2.4 percent, 
 24.32  and for taxes payable in 1999, 2.35 percent for taxes payable in 
 24.33  2000, and 2.3 percent for taxes payable in 2001 and thereafter.  
 24.34  For the purposes of this item, the first tier means the first 
 24.35  $75,000 of market value; (ii) manufactured home parks assessed 
 24.36  under clause (5) have a class rate of two percent; (iii) 
 25.1   property described in paragraph (d), clause (4), shall have the 
 25.2   same class rate applicable to the first tier of class 4bb 
 25.3   nonhomestead residential real estate under section 273.13, 
 25.4   subdivision 25, paragraph (c); and (iv) all other class 4c 
 25.5   property has a class rate of 2 percent for taxes payable in 
 25.6   1999, 1.9 percent for taxes payable in 2000, and 1.8 percent for 
 25.7   taxes payable in 2001 and thereafter.  
 25.8      (e) Class 4d property is qualifying low-income rental 
 25.9   housing certified to the assessor by the housing finance agency 
 25.10  under sections 273.126 and 462A.071.  Class 4d includes land in 
 25.11  proportion to the total market value of the building that is 
 25.12  qualifying low-income rental housing.  For all properties 
 25.13  qualifying as class 4d, the market value determined by the 
 25.14  assessor must be based on the normal approach to value using 
 25.15  normal unrestricted rents. 
 25.16     Class 4d property consisting of a structure, initial 
 25.17  construction of which was begun after January 1, 1999, has a 
 25.18  class rate of 2.5 percent of market value; all other class 4d 
 25.19  property has a class rate of one percent of market value.  
 25.20     (f) Class 4e property consists of the residential portion 
 25.21  of any structure located within a city that was converted from 
 25.22  nonresidential use to residential use, provided that: 
 25.23     (1) the structure had formerly been used as a warehouse; 
 25.24     (2) the structure was originally constructed prior to 1940; 
 25.25     (3) the conversion was done after December 31, 1995, but 
 25.26  before January 1, 2003; and 
 25.27     (4) the conversion involved an investment of at least 
 25.28  $25,000 per residential unit. 
 25.29     Class 4e property has a class rate of 2.3 2.25 percent for 
 25.30  taxes payable in 1999, 2.2 percent for taxes payable in 2000, 
 25.31  and 2.15 percent for taxes payable in 2001 and thereafter, 
 25.32  provided that a structure is eligible for class 4e 
 25.33  classification only in the 12 assessment years immediately 
 25.34  following the conversion. 
 25.35     Sec. 14.  Minnesota Statutes 1996, section 273.13, is 
 25.36  amended by adding a subdivision to read: 
 26.1      Subd. 25b.  [CLASS 4d CREDIT.] Property taxes due and 
 26.2   payable on class 4d property on which initial construction was 
 26.3   begun after January 1, 1999, shall be reduced by an amount equal 
 26.4   to 60 percent of the property's gross tax.  The total amount 
 26.5   credited by each county shall be reported to the commissioner of 
 26.6   revenue by June 1 of the year in which taxes are payable, in a 
 26.7   form prescribed by the commissioner.  The commissioner shall 
 26.8   make payments to counties for reimbursement of the credit on 
 26.9   October 1 of the year in which taxes are payable.  Each county 
 26.10  auditor shall distribute the payments to local taxing 
 26.11  jurisdictions in amounts equal to the amount of taxes reduced by 
 26.12  the credit.  An amount sufficient to fund the credit authorized 
 26.13  under this section is annually appropriated to the commissioner 
 26.14  of revenue from the general fund in fiscal years 2002 and 
 26.15  subsequent years. 
 26.16     Sec. 15.  Minnesota Statutes 1997 Supplement, section 
 26.17  273.13, subdivision 31, is amended to read: 
 26.18     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 26.19     (1) tools, implements, and machinery of an electric 
 26.20  generating, transmission, or distribution system or a pipeline 
 26.21  system transporting or distributing water, gas, crude oil, or 
 26.22  petroleum products or mains and pipes used in the distribution 
 26.23  of steam or hot or chilled water for heating or cooling 
 26.24  buildings, which are fixtures; 
 26.25     (2) unmined iron ore and low-grade iron-bearing formations 
 26.26  as defined in section 273.14; and 
 26.27     (3) all other property not otherwise classified. 
 26.28     Class 5 property has a class rate of 4.0 3.8 percent of 
 26.29  market value for taxes payable in 1998 1999, 3.6 percent for 
 26.30  taxes payable in 2000, and 3.5 percent for taxes payable in 2001 
 26.31  and thereafter. 
 26.32     Sec. 16.  Minnesota Statutes 1997 Supplement, section 
 26.33  273.1382, subdivision 1, is amended to read: 
 26.34     Subdivision 1.  [EDUCATION HOMESTEAD CREDIT.] Each year, 
 26.35  beginning with property taxes payable in 1998, the respective 
 26.36  county auditors shall determine the initial tax rate for each 
 27.1   school district for the general education levy certified under 
 27.2   section 124A.23, subdivision 2 or 3.  That rate plus the school 
 27.3   district's education homestead credit tax rate adjustment under 
 27.4   section 275.08, subdivision 1e, shall be the general education 
 27.5   homestead credit local tax rate for the district.  The auditor 
 27.6   shall then determine a general education homestead credit for 
 27.7   each homestead within the county equal to 32 50 percent for 
 27.8   taxes payable in 1999, 64 percent for taxes payable in 2000, and 
 27.9   75 percent for taxes payable in 2001 and thereafter of the 
 27.10  general education homestead credit local tax rate times the net 
 27.11  tax capacity of the homestead for the taxes payable year.  The 
 27.12  amount of general education homestead credit for a homestead may 
 27.13  not exceed $225 $265 for taxes payable in 1999, $325 for taxes 
 27.14  payable in 2000, and $360 for taxes payable in 2001 and 
 27.15  thereafter.  In the case of an agricultural homestead, only the 
 27.16  net tax capacity of the house, garage, and surrounding one acre 
 27.17  of land shall be used in determining the property's education 
 27.18  homestead credit. 
 27.19     Sec. 17.  Minnesota Statutes 1997 Supplement, section 
 27.20  273.1382, subdivision 3, is amended to read: 
 27.21     Subd. 3.  [APPROPRIATION.] An amount sufficient to make the 
 27.22  payments required by this section is annually appropriated from 
 27.23  the general fund to the commissioner of children, families, and 
 27.24  learning, except that for fiscal years 2000 and 2001 the amount 
 27.25  necessary to make the increased payments attributable to section 
 27.26  16 is appropriated from the property tax reform account. 
 27.27     Sec. 18.  Minnesota Statutes 1996, section 273.1398, 
 27.28  subdivision 2, is amended to read: 
 27.29     Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 
 27.30  Homestead and agricultural credit aid for each unique taxing 
 27.31  jurisdiction equals the product of (1) the homestead and 
 27.32  agricultural credit aid base, and (2) the growth adjustment 
 27.33  factor, plus the net tax capacity adjustment and the fiscal 
 27.34  disparity adjustment.  Beginning with homestead and agricultural 
 27.35  credit aid payable in 2000, each county that receives an 
 27.36  increased amount in calendar year 2000 under section 477A.0122 
 28.1   as a result of the appropriation in section 477A.03, subdivision 
 28.2   2, paragraph (c), clause (3), shall have its homestead and 
 28.3   agricultural credit aid permanently reduced by an equal amount. 
 28.4      Sec. 19.  [273.80] [DISTRESSED HOMESTEAD REINVESTMENT 
 28.5   EXEMPTION.] 
 28.6      Subdivision 1.  [DEFINITIONS.] For purposes of this 
 28.7   section, the following terms shall have the meanings given. 
 28.8      "Substantially condition deficient" means that repairs 
 28.9   estimated to cost at least $20,000 are necessary to restore a 
 28.10  house to sound operating condition, according to prevailing 
 28.11  costs of home improvements for the area. 
 28.12     "Sound operating condition" means that a home meets minimal 
 28.13  health and safety standards for residential occupancy under 
 28.14  applicable housing or building codes. 
 28.15     "Trained residential rehabilitation consultant" means a 
 28.16  person who is employed by a housing services organization 
 28.17  recognized by resolution of the city council of the city in 
 28.18  which the property is located, and who has been trained in 
 28.19  residential housing rehabilitation. 
 28.20     Subd. 2.  [ELIGIBILITY.] An owner-occupied, detached, 
 28.21  single family dwelling is eligible for treatment under this 
 28.22  section if it: 
 28.23     (1) is located in a city of the first class; 
 28.24     (2) is located in a census tract where the median value of 
 28.25  owner-occupied homes is less than 80 percent of the median value 
 28.26  of owner-occupied homes for the entire city, according to the 
 28.27  1998 assessment; 
 28.28     (3) has an estimated market value which is less than 80 
 28.29  percent of the median value of owner-occupied homes for the 
 28.30  entire city, according to the 1998 assessment; and 
 28.31     (4) has been declared to be substantially condition 
 28.32  deficient, by a trained residential rehabilitation consultant. 
 28.33     Subd. 3.  [QUALIFICATION.] A home which meets the 
 28.34  eligibility requirements of subdivision 2 before May 1, 2003, 
 28.35  shall qualify for the tax benefits provided under this section 
 28.36  whenever a trained residential rehabilitation consultant 
 29.1   certifies that the home is in sound operating condition, 
 29.2   provided that all necessary permits had been obtained where 
 29.3   required. 
 29.4      Subd. 4.  [TAX BENEFITS.] A property containing a home 
 29.5   which qualifies under subdivision 3 shall be exempt from all 
 29.6   property taxes for taxes payable in the five years immediately 
 29.7   following its certification under subdivision 3, provided that 
 29.8   the property continues to be owned and occupied by the same 
 29.9   person who owned it when the home was certified as substantially 
 29.10  condition deficient. 
 29.11     Subd. 5.  [ASSESSMENT; RECORD.] The assessor may require 
 29.12  whatever information is necessary to determine eligibility for 
 29.13  the tax benefit conferred by this section.  During the time that 
 29.14  the property is exempt, the assessor shall continue to value the 
 29.15  property and record its current value on the tax rolls. 
 29.16     Sec. 20.  [273.81] [LOW-INCOME HOUSING AID.] 
 29.17     Subdivision 1.  [ELIGIBILITY.] Each year, for all class 4d 
 29.18  property with a class rate of one percent in the current 
 29.19  assessment year, the assessor shall determine the difference 
 29.20  between the actual net tax capacity and the net tax capacity 
 29.21  that would be determined for the property if the class rates for 
 29.22  taxes payable in 1998 were in effect in the current assessment 
 29.23  year.  Each year, a city shall be eligible for aid equal to (i) 
 29.24  the amount by which the sum of the differences for all class 4d 
 29.25  properties with a class rate of one percent in the city exceeds 
 29.26  one percent of the city's total taxable net tax capacity for 
 29.27  taxes payable in 1998, multiplied by (ii) the city's average net 
 29.28  tax capacity tax rate for taxes payable in 1998. 
 29.29     Subd. 2.  [CERTIFICATION.] The county assessor shall notify 
 29.30  the commissioner of revenue of the amount determined under 
 29.31  subdivision 1, clause (i), for any city which qualifies for aid 
 29.32  under this section by June 30 of each assessment year, in a form 
 29.33  prescribed by the commissioner.  The commissioner shall notify 
 29.34  each city of its qualifying aid amount by August 15 of the 
 29.35  assessment year.  The aid determined under this section is a 
 29.36  subtraction from the city's levy limit under sections 275.70 to 
 30.1   275.74. 
 30.2      Subd. 3.  [APPROPRIATION; PAYMENT.] (a) The commissioner 
 30.3   shall pay each city its qualifying aid amount on July 15 of the 
 30.4   year following the assessment year.  An amount sufficient to pay 
 30.5   the aid authorized under this section is appropriated to the 
 30.6   commissioner of revenue from the property tax reform account in 
 30.7   fiscal years 2000 and 2001, and from the general fund in fiscal 
 30.8   years 2002 and thereafter. 
 30.9      (b) Beginning for fiscal year 2001, the amount of aid 
 30.10  appropriated under this section may not exceed $1,500,000 after 
 30.11  deducting the cost of the reimbursement under Minnesota 
 30.12  Statutes, section 273.13, subdivision 25b. 
 30.13     (c) If the total amount of aid that would otherwise be 
 30.14  payable under the formula in this section exceeds the maximum 
 30.15  allowed under paragraph (b), the amount of aid for each city is 
 30.16  reduced proportionately to equal the limit. 
 30.17     Sec. 21.  Minnesota Statutes 1997 Supplement, section 
 30.18  290A.03, subdivision 11, is amended to read: 
 30.19     Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
 30.20  constituting property taxes" means 18 19 percent of the gross 
 30.21  rent actually paid in cash, or its equivalent, or the portion of 
 30.22  rent paid in lieu of property taxes, in any calendar year by a 
 30.23  claimant for the right of occupancy of the claimant's Minnesota 
 30.24  homestead in the calendar year, and which rent constitutes the 
 30.25  basis, in the succeeding calendar year of a claim for relief 
 30.26  under this chapter by the claimant.  
 30.27     Sec. 22.  Minnesota Statutes 1997 Supplement, section 
 30.28  290A.03, subdivision 13, is amended to read: 
 30.29     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 30.30  payable" means the property tax exclusive of special 
 30.31  assessments, penalties, and interest payable on a claimant's 
 30.32  homestead after deductions made under sections 273.135, 
 30.33  273.1382, 273.1391, 273.42, subdivision 2, and any other state 
 30.34  paid property tax credits in any calendar year.  In the case of 
 30.35  a claimant who makes ground lease payments, "property taxes 
 30.36  payable" includes the amount of the payments directly 
 31.1   attributable to the property taxes assessed against the parcel 
 31.2   on which the house is located.  No apportionment or reduction of 
 31.3   the "property taxes payable" shall be required for the use of a 
 31.4   portion of the claimant's homestead for a business purpose if 
 31.5   the claimant does not deduct any business depreciation expenses 
 31.6   for the use of a portion of the homestead in the determination 
 31.7   of federal adjusted gross income.  For homesteads which are 
 31.8   manufactured homes as defined in section 273.125, subdivision 8, 
 31.9   and for homesteads which are park trailers taxed as manufactured 
 31.10  homes under section 168.012, subdivision 9, "property taxes 
 31.11  payable" shall also include 18 19 percent of the gross rent paid 
 31.12  in the preceding year for the site on which the homestead is 
 31.13  located.  When a homestead is owned by two or more persons as 
 31.14  joint tenants or tenants in common, such tenants shall determine 
 31.15  between them which tenant may claim the property taxes payable 
 31.16  on the homestead.  If they are unable to agree, the matter shall 
 31.17  be referred to the commissioner of revenue whose decision shall 
 31.18  be final.  Property taxes are considered payable in the year 
 31.19  prescribed by law for payment of the taxes. 
 31.20     In the case of a claim relating to "property taxes 
 31.21  payable," the claimant must have owned and occupied the 
 31.22  homestead on January 2 of the year in which the tax is payable 
 31.23  and (i) the property must have been classified as homestead 
 31.24  property pursuant to section 273.124, on or before December 15 
 31.25  of the assessment year to which the "property taxes payable" 
 31.26  relate; or (ii) the claimant must provide documentation from the 
 31.27  local assessor that application for homestead classification has 
 31.28  been made on or before December 15 of the year in which the 
 31.29  "property taxes payable" were payable and that the assessor has 
 31.30  approved the application. 
 31.31     Sec. 23.  Minnesota Statutes 1996, section 477A.0122, 
 31.32  subdivision 6, is amended to read: 
 31.33     Subd. 6.  [REPORT.] (a) On or before March 15 of the year 
 31.34  following the year in which the distributions under this section 
 31.35  are received, each county shall file with the commissioner of 
 31.36  revenue and commissioner of human services a report on prior 
 32.1   year expenditures for out-of-home placement and family 
 32.2   preservation, including expenditures under this section.  For 
 32.3   the human services programs specified in this section, the 
 32.4   commissioner of revenue and commissioner of human services, in 
 32.5   consultation with representatives of county governments, shall 
 32.6   make a recommendation to the 1999 legislature as to which 
 32.7   current reporting requirements imposed on county governments, if 
 32.8   any, may be eliminated, replaced, or consolidated on the report 
 32.9   established by this section.  For aid payable in calendar year 
 32.10  2000 and thereafter, each county shall provide information on 
 32.11  the amount of state aid, local property tax revenue, and federal 
 32.12  aid expended by that county on the programs specified in this 
 32.13  section using the consolidated financial report recommended by 
 32.14  the commissioner of revenue and commissioner of human services 
 32.15  under this subdivision. 
 32.16     (b) The commissioner of revenue and the commissioner of 
 32.17  human services, in consultation with representatives of county 
 32.18  governments and children's advocacy representatives, shall study 
 32.19  the current formula used in distributing aid under this section 
 32.20  and factors related to out-of-home placement and family 
 32.21  preservation expenditures and make a report to the house and 
 32.22  senate tax committees by February 1, 1999.  The report shall 
 32.23  include a recommendation for a new formula to be used in 
 32.24  distributing the aid under this section, beginning with aids 
 32.25  payable in 2000. 
 32.26     Sec. 24.  Minnesota Statutes 1996, section 477A.03, 
 32.27  subdivision 2, is amended to read: 
 32.28     Subd. 2.  [ANNUAL APPROPRIATION.] (a) A sum sufficient to 
 32.29  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 32.30  annually appropriated from the general fund to the commissioner 
 32.31  of revenue. 
 32.32     (b) For aids payable in 1996 and thereafter, the total aids 
 32.33  paid under sections section 477A.013, subdivision 9, and 
 32.34  477A.0122 are the amounts certified to be paid in the previous 
 32.35  year, adjusted for inflation as provided under subdivision 
 32.36  3.  Aid payments to counties under section 477A.0121 are limited 
 33.1   to $20,265,000 in 1996.  Aid payments to counties under section 
 33.2   477A.0121 are limited to $27,571,625 in 1997.  
 33.3      (c) For aid payable in 1998 and thereafter, the total aids 
 33.4   paid under section 477A.0121 are the amounts certified to be 
 33.5   paid in the previous year, adjusted for inflation as provided 
 33.6   under subdivision 3. 
 33.7      (d) For aids payable in 1999, the total aid payments under 
 33.8   section 477A.0122 are the amounts certified to be paid in the 
 33.9   previous year, adjusted for inflation as provided in subdivision 
 33.10  3.  For aid payable in 2000, the total aid payments under 
 33.11  section 477A.0122 are the sum of:  
 33.12     (1) the amounts certified to be paid in the previous year, 
 33.13  adjusted for inflation as provided in subdivision 3; plus 
 33.14     (2) $20,000,000; plus 
 33.15     (3) $10,000,000.  
 33.16     For aid payable in 2001 and thereafter, the total aid 
 33.17  payments under section 477A.0122 are the amounts certified to be 
 33.18  paid in the previous year, adjusted for inflation as provided in 
 33.19  subdivision 3. 
 33.20     Sec. 25.  [APPROPRIATIONS.] 
 33.21     Subdivision 1.  [EDUCATION LEVY REDUCTION APPROPRIATION.] 
 33.22  Notwithstanding the provisions of Minnesota Statutes, section 
 33.23  124A.23, subdivision 1, the general education levy shall be 
 33.24  reduced by $65,000,000 for taxes payable in 1999 and $75,000,000 
 33.25  for taxes payable in 2000 and thereafter.  The amounts necessary 
 33.26  to offset the costs of the levy reduction contained in this 
 33.27  section are appropriated to the commissioner of children, 
 33.28  families, and learning from the property tax reform account in 
 33.29  fiscal years 1999, 2000, and 2001, and from the general fund in 
 33.30  fiscal year 2002 and thereafter.  
 33.31     Subd. 2.  [PROPERTY TAX REFUND.] The additional amount 
 33.32  necessary to fund the changes in sections 21 and 22 for fiscal 
 33.33  years 2000 and 2001 are appropriated to the commissioner of 
 33.34  revenue from the property tax reform account. 
 33.35     Subd. 3.  [ALTERNATIVE FACILITIES AID.] $3,785,000 for 
 33.36  fiscal year 2000 and $4,205,000 for fiscal year 2001 is 
 34.1   transferred from the property tax reform account to the general 
 34.2   fund to finance the increase in alternative facilities aid under 
 34.3   sections 3 and 4. 
 34.4      Sec. 26.  [REPEALER.] 
 34.5      Minnesota Statutes 1997 Supplement, section 273.13, 
 34.6   subdivision 32, is repealed. 
 34.7      Sec. 27.  [EFFECTIVE DATE.] 
 34.8      Sections 1, 2, 23, and 26 are effective the day following 
 34.9   final enactment.  Sections 3, 15 to 18, 20, and 24 are effective 
 34.10  for taxes payable in 1999 and thereafter and for aid payable in 
 34.11  fiscal year 2000 and thereafter.  Section 19 is effective 
 34.12  through assessment year 2004.  Sections 21 and 22 are effective 
 34.13  for rents paid in 1998 and thereafter.  Section 25 is effective 
 34.14  July 1, 1998. 
 34.15                             ARTICLE 3
 34.16          PROPERTY TAXES, LOCAL BONDING AND LEVY AUTHORITY 
 34.17     Section 1.  Minnesota Statutes 1997 Supplement, section 
 34.18  272.02, subdivision 1, is amended to read: 
 34.19     Subdivision 1.  All property described in this section to 
 34.20  the extent herein limited shall be exempt from taxation: 
 34.21     (1) All public burying grounds. 
 34.22     (2) All public schoolhouses. 
 34.23     (3) All public hospitals. 
 34.24     (4) All academies, colleges, and universities, and all 
 34.25  seminaries of learning. 
 34.26     (5) All churches, church property, and houses of worship. 
 34.27     (6) Institutions of purely public charity except: 
 34.28     (a) parcels of property containing structures and the 
 34.29  structures described in section 273.13, subdivision 25, 
 34.30  paragraph (c), clauses (1), (2), and (3), or paragraph (d), 
 34.31  other than those that qualify for exemption under clause (25); 
 34.32  and 
 34.33     (b) an elderly assisted living facility that does not meet 
 34.34  the requirements of subdivision 9. 
 34.35     (7) All public property exclusively used for any public 
 34.36  purpose. 
 35.1      (8) Except for the taxable personal property enumerated 
 35.2   below, all personal property and the property described in 
 35.3   section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
 35.4   exempt.  
 35.5      The following personal property shall be taxable:  
 35.6      (a) personal property which is part of an electric 
 35.7   generating, transmission, or distribution system or a pipeline 
 35.8   system transporting or distributing water, gas, crude oil, or 
 35.9   petroleum products or mains and pipes used in the distribution 
 35.10  of steam or hot or chilled water for heating or cooling 
 35.11  buildings and structures; 
 35.12     (b) railroad docks and wharves which are part of the 
 35.13  operating property of a railroad company as defined in section 
 35.14  270.80; 
 35.15     (c) personal property defined in section 272.03, 
 35.16  subdivision 2, clause (3); 
 35.17     (d) leasehold or other personal property interests which 
 35.18  are taxed pursuant to section 272.01, subdivision 2; 273.124, 
 35.19  subdivision 7; or 273.19, subdivision 1; or any other law 
 35.20  providing the property is taxable as if the lessee or user were 
 35.21  the fee owner; 
 35.22     (e) manufactured homes and sectional structures, including 
 35.23  storage sheds, decks, and similar removable improvements 
 35.24  constructed on the site of a manufactured home, sectional 
 35.25  structure, park trailer or travel trailer as provided in section 
 35.26  273.125, subdivision 8, paragraph (f); and 
 35.27     (f) flight property as defined in section 270.071.  
 35.28     (9) Personal property used primarily for the abatement and 
 35.29  control of air, water, or land pollution to the extent that it 
 35.30  is so used, and real property which is used primarily for 
 35.31  abatement and control of air, water, or land pollution as part 
 35.32  of an agricultural operation, as a part of a centralized 
 35.33  treatment and recovery facility operating under a permit issued 
 35.34  by the Minnesota pollution control agency pursuant to chapters 
 35.35  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
 35.36  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
 36.1   and for the treatment, recovery, and stabilization of metals, 
 36.2   oils, chemicals, water, sludges, or inorganic materials from 
 36.3   hazardous industrial wastes, or as part of an electric 
 36.4   generation system.  For purposes of this clause, personal 
 36.5   property includes ponderous machinery and equipment used in a 
 36.6   business or production activity that at common law is considered 
 36.7   real property. 
 36.8      Any taxpayer requesting exemption of all or a portion of 
 36.9   any real property or any equipment or device, or part thereof, 
 36.10  operated primarily for the control or abatement of air or water 
 36.11  pollution shall file an application with the commissioner of 
 36.12  revenue.  The equipment or device shall meet standards, rules, 
 36.13  or criteria prescribed by the Minnesota pollution control 
 36.14  agency, and must be installed or operated in accordance with a 
 36.15  permit or order issued by that agency.  The Minnesota pollution 
 36.16  control agency shall upon request of the commissioner furnish 
 36.17  information or advice to the commissioner.  On determining that 
 36.18  property qualifies for exemption, the commissioner shall issue 
 36.19  an order exempting the property from taxation.  The equipment or 
 36.20  device shall continue to be exempt from taxation as long as the 
 36.21  permit issued by the Minnesota pollution control agency remains 
 36.22  in effect. 
 36.23     (10) Wetlands.  For purposes of this subdivision, 
 36.24  "wetlands" means:  (i) land described in section 103G.005, 
 36.25  subdivision 15a; (ii) land which is mostly under water, produces 
 36.26  little if any income, and has no use except for wildlife or 
 36.27  water conservation purposes, provided it is preserved in its 
 36.28  natural condition and drainage of it would be legal, feasible, 
 36.29  and economically practical for the production of livestock, 
 36.30  dairy animals, poultry, fruit, vegetables, forage and grains, 
 36.31  except wild rice; or (iii) land in a wetland preservation area 
 36.32  under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
 36.33  and (ii) include adjacent land which is not suitable for 
 36.34  agricultural purposes due to the presence of the wetlands, but 
 36.35  do not include woody swamps containing shrubs or trees, wet 
 36.36  meadows, meandered water, streams, rivers, and floodplains or 
 37.1   river bottoms.  Exemption of wetlands from taxation pursuant to 
 37.2   this section shall not grant the public any additional or 
 37.3   greater right of access to the wetlands or diminish any right of 
 37.4   ownership to the wetlands. 
 37.5      (11) Native prairie.  The commissioner of the department of 
 37.6   natural resources shall determine lands in the state which are 
 37.7   native prairie and shall notify the county assessor of each 
 37.8   county in which the lands are located.  Pasture land used for 
 37.9   livestock grazing purposes shall not be considered native 
 37.10  prairie for the purposes of this clause.  Upon receipt of an 
 37.11  application for the exemption provided in this clause for lands 
 37.12  for which the assessor has no determination from the 
 37.13  commissioner of natural resources, the assessor shall refer the 
 37.14  application to the commissioner of natural resources who shall 
 37.15  determine within 30 days whether the land is native prairie and 
 37.16  notify the county assessor of the decision.  Exemption of native 
 37.17  prairie pursuant to this clause shall not grant the public any 
 37.18  additional or greater right of access to the native prairie or 
 37.19  diminish any right of ownership to it. 
 37.20     (12) Property used in a continuous program to provide 
 37.21  emergency shelter for victims of domestic abuse, provided the 
 37.22  organization that owns and sponsors the shelter is exempt from 
 37.23  federal income taxation pursuant to section 501(c)(3) of the 
 37.24  Internal Revenue Code of 1986, as amended through December 31, 
 37.25  1992, notwithstanding the fact that the sponsoring organization 
 37.26  receives funding under section 8 of the United States Housing 
 37.27  Act of 1937, as amended. 
 37.28     (13) If approved by the governing body of the municipality 
 37.29  in which the property is located, property not exceeding one 
 37.30  acre which is owned and operated by any senior citizen group or 
 37.31  association of groups that in general limits membership to 
 37.32  persons age 55 or older and is organized and operated 
 37.33  exclusively for pleasure, recreation, and other nonprofit 
 37.34  purposes, no part of the net earnings of which inures to the 
 37.35  benefit of any private shareholders; provided the property is 
 37.36  used primarily as a clubhouse, meeting facility, or recreational 
 38.1   facility by the group or association and the property is not 
 38.2   used for residential purposes on either a temporary or permanent 
 38.3   basis. 
 38.4      (14) To the extent provided by section 295.44, real and 
 38.5   personal property used or to be used primarily for the 
 38.6   production of hydroelectric or hydromechanical power on a site 
 38.7   owned by the federal government, the state, or a local 
 38.8   governmental unit which is developed and operated pursuant to 
 38.9   the provisions of section 103G.535. 
 38.10     (15) If approved by the governing body of the municipality 
 38.11  in which the property is located, and if construction is 
 38.12  commenced after June 30, 1983:  
 38.13     (a) a "direct satellite broadcasting facility" operated by 
 38.14  a corporation licensed by the federal communications commission 
 38.15  to provide direct satellite broadcasting services using direct 
 38.16  broadcast satellites operating in the 12-ghz. band; and 
 38.17     (b) a "fixed satellite regional or national program service 
 38.18  facility" operated by a corporation licensed by the federal 
 38.19  communications commission to provide fixed satellite-transmitted 
 38.20  regularly scheduled broadcasting services using satellites 
 38.21  operating in the 6-ghz. band. 
 38.22  An exemption provided by clause (15) shall apply for a period 
 38.23  not to exceed five years.  When the facility no longer qualifies 
 38.24  for exemption, it shall be placed on the assessment rolls as 
 38.25  provided in subdivision 4.  Before approving a tax exemption 
 38.26  pursuant to this paragraph, the governing body of the 
 38.27  municipality shall provide an opportunity to the members of the 
 38.28  county board of commissioners of the county in which the 
 38.29  facility is proposed to be located and the members of the school 
 38.30  board of the school district in which the facility is proposed 
 38.31  to be located to meet with the governing body.  The governing 
 38.32  body shall present to the members of those boards its estimate 
 38.33  of the fiscal impact of the proposed property tax exemption.  
 38.34  The tax exemption shall not be approved by the governing body 
 38.35  until the county board of commissioners has presented its 
 38.36  written comment on the proposal to the governing body or 30 days 
 39.1   have passed from the date of the transmittal by the governing 
 39.2   body to the board of the information on the fiscal impact, 
 39.3   whichever occurs first. 
 39.4      (16) Real and personal property owned and operated by a 
 39.5   private, nonprofit corporation exempt from federal income 
 39.6   taxation pursuant to United States Code, title 26, section 
 39.7   501(c)(3), primarily used in the generation and distribution of 
 39.8   hot water for heating buildings and structures.  
 39.9      (17) Notwithstanding section 273.19, state lands that are 
 39.10  leased from the department of natural resources under section 
 39.11  92.46. 
 39.12     (18) Electric power distribution lines and their 
 39.13  attachments and appurtenances, that are used primarily for 
 39.14  supplying electricity to farmers at retail.  
 39.15     (19) Transitional housing facilities.  "Transitional 
 39.16  housing facility" means a facility that meets the following 
 39.17  requirements.  (i) It provides temporary housing to individuals, 
 39.18  couples, or families.  (ii) It has the purpose of reuniting 
 39.19  families and enabling parents or individuals to obtain 
 39.20  self-sufficiency, advance their education, get job training, or 
 39.21  become employed in jobs that provide a living wage.  (iii) It 
 39.22  provides support services such as child care, work readiness 
 39.23  training, and career development counseling; and a 
 39.24  self-sufficiency program with periodic monitoring of each 
 39.25  resident's progress in completing the program's goals.  (iv) It 
 39.26  provides services to a resident of the facility for at least 
 39.27  three months but no longer than three years, except residents 
 39.28  enrolled in an educational or vocational institution or job 
 39.29  training program.  These residents may receive services during 
 39.30  the time they are enrolled but in no event longer than four 
 39.31  years.  (v) It is owned and operated or under lease from a unit 
 39.32  of government or governmental agency under a property 
 39.33  disposition program and operated by one or more organizations 
 39.34  exempt from federal income tax under section 501(c)(3) of the 
 39.35  Internal Revenue Code of 1986, as amended through December 31, 
 39.36  1992.  This exemption applies notwithstanding the fact that the 
 40.1   sponsoring organization receives financing by a direct federal 
 40.2   loan or federally insured loan or a loan made by the Minnesota 
 40.3   housing finance agency under the provisions of either Title II 
 40.4   of the National Housing Act or the Minnesota housing finance 
 40.5   agency law of 1971 or rules promulgated by the agency pursuant 
 40.6   to it, and notwithstanding the fact that the sponsoring 
 40.7   organization receives funding under Section 8 of the United 
 40.8   States Housing Act of 1937, as amended. 
 40.9      (20) Real and personal property, including leasehold or 
 40.10  other personal property interests, owned and operated by a 
 40.11  corporation if more than 50 percent of the total voting power of 
 40.12  the stock of the corporation is owned collectively by:  (i) the 
 40.13  board of regents of the University of Minnesota, (ii) the 
 40.14  University of Minnesota Foundation, an organization exempt from 
 40.15  federal income taxation under section 501(c)(3) of the Internal 
 40.16  Revenue Code of 1986, as amended through December 31, 1992, and 
 40.17  (iii) a corporation organized under chapter 317A, which by its 
 40.18  articles of incorporation is prohibited from providing pecuniary 
 40.19  gain to any person or entity other than the regents of the 
 40.20  University of Minnesota; which property is used primarily to 
 40.21  manage or provide goods, services, or facilities utilizing or 
 40.22  relating to large-scale advanced scientific computing resources 
 40.23  to the regents of the University of Minnesota and others. 
 40.24     (21)(a) Small scale wind energy conversion systems 
 40.25  installed after January 1, 1991, and used as an electric power 
 40.26  source are exempt. 
 40.27     "Small scale wind energy conversion systems" are wind 
 40.28  energy conversion systems, as defined in section 216C.06, 
 40.29  subdivision 12, including the foundation or support pad, which 
 40.30  are (i) used as an electric power source; (ii) located within 
 40.31  one county and owned by the same owner; and (iii) produce two 
 40.32  megawatts or less of electricity as measured by nameplate 
 40.33  ratings. 
 40.34     (b) Medium scale wind energy conversion systems installed 
 40.35  after January 1, 1991, are treated as follows:  (i) the 
 40.36  foundation and support pad are taxable; (ii) the associated 
 41.1   supporting and protective structures are exempt for the first 
 41.2   five assessment years after they have been constructed, and 
 41.3   thereafter, 30 percent of the market value of the associated 
 41.4   supporting and protective structures are taxable; and (iii) the 
 41.5   turbines, blades, transformers, and its related equipment, are 
 41.6   exempt.  "Medium scale wind energy conversion systems" are wind 
 41.7   energy conversion systems as defined in section 216C.06, 
 41.8   subdivision 12, including the foundation or support pad, which 
 41.9   are:  (i) used as an electric power source; (ii) located within 
 41.10  one county and owned by the same owner; and (iii) produce more 
 41.11  than two but equal to or less than 12 megawatts of energy as 
 41.12  measured by nameplate ratings. 
 41.13     (c) Large scale wind energy conversion systems installed 
 41.14  after January 1, 1991, are treated as follows:  25 percent of 
 41.15  the market value of all property is taxable, including (i) the 
 41.16  foundation and support pad; (ii) the associated supporting and 
 41.17  protective structures; and (iii) the turbines, blades, 
 41.18  transformers, and its related equipment.  "Large scale wind 
 41.19  energy conversion systems" are wind energy conversion systems as 
 41.20  defined in section 216C.06, subdivision 12, including the 
 41.21  foundation or support pad, which are:  (i) used as an electric 
 41.22  power source; and (ii) produce more than 12 megawatts of energy 
 41.23  as measured by nameplate ratings. 
 41.24     (22) Containment tanks, cache basins, and that portion of 
 41.25  the structure needed for the containment facility used to 
 41.26  confine agricultural chemicals as defined in section 18D.01, 
 41.27  subdivision 3, as required by the commissioner of agriculture 
 41.28  under chapter 18B or 18C. 
 41.29     (23) Photovoltaic devices, as defined in section 216C.06, 
 41.30  subdivision 13, installed after January 1, 1992, and used to 
 41.31  produce or store electric power. 
 41.32     (24) Real and personal property owned and operated by a 
 41.33  private, nonprofit corporation exempt from federal income 
 41.34  taxation pursuant to United States Code, title 26, section 
 41.35  501(c)(3), primarily used for an ice arena or ice rink, and used 
 41.36  primarily for youth and high school programs. 
 42.1      (25) A structure that is situated on real property that is 
 42.2   used for: 
 42.3      (i) housing for the elderly or for low- and moderate-income 
 42.4   families as defined in Title II of the National Housing Act, as 
 42.5   amended through December 31, 1990, and funded by a direct 
 42.6   federal loan or federally insured loan made pursuant to Title II 
 42.7   of the act; or 
 42.8      (ii) housing lower income families or elderly or 
 42.9   handicapped persons, as defined in Section 8 of the United 
 42.10  States Housing Act of 1937, as amended. 
 42.11     In order for a structure to be exempt under (i) or (ii), it 
 42.12  must also meet each of the following criteria: 
 42.13     (A) is owned by an entity which is operated as a nonprofit 
 42.14  corporation organized under chapter 317A; 
 42.15     (B) is owned by an entity which has not entered into a 
 42.16  housing assistance payments contract under Section 8 of the 
 42.17  United States Housing Act of 1937, or, if the entity which owns 
 42.18  the structure has entered into a housing assistance payments 
 42.19  contract under Section 8 of the United States Housing Act of 
 42.20  1937, the contract provides assistance for less than 90 percent 
 42.21  of the dwelling units in the structure, excluding dwelling units 
 42.22  intended for management or maintenance personnel; 
 42.23     (C) operates an on-site congregate dining program in which 
 42.24  participation by residents is mandatory, and provides assisted 
 42.25  living or similar social and physical support services for 
 42.26  residents; and 
 42.27     (D) was not assessed and did not pay tax under chapter 273 
 42.28  prior to the 1991 levy, while meeting the other conditions of 
 42.29  this clause. 
 42.30     An exemption under this clause remains in effect for taxes 
 42.31  levied in each year or partial year of the term of its permanent 
 42.32  financing. 
 42.33     (26) Real and personal property that is located in the 
 42.34  Superior National Forest, and owned or leased and operated by a 
 42.35  nonprofit organization that is exempt from federal income 
 42.36  taxation under section 501(c)(3) of the Internal Revenue Code of 
 43.1   1986, as amended through December 31, 1992, and primarily used 
 43.2   to provide recreational opportunities for disabled veterans and 
 43.3   their families. 
 43.4      (27) Manure pits and appurtenances, which may include 
 43.5   slatted floors and pipes, installed or operated in accordance 
 43.6   with a permit, order, or certificate of compliance issued by the 
 43.7   Minnesota pollution control agency.  The exemption shall 
 43.8   continue for as long as the permit, order, or certificate issued 
 43.9   by the Minnesota pollution control agency remains in effect. 
 43.10     (28) Notwithstanding clause (8), item (a), attached 
 43.11  machinery and other personal property which is part of a 
 43.12  facility containing a cogeneration system as described in 
 43.13  section 216B.166, subdivision 2, paragraph (a), if the 
 43.14  cogeneration system has met the following criteria:  (i) the 
 43.15  system utilizes natural gas as a primary fuel and the 
 43.16  cogenerated steam initially replaces steam generated from 
 43.17  existing thermal boilers utilizing coal; (ii) the facility 
 43.18  developer is selected as a result of a procurement process 
 43.19  ordered by the public utilities commission; and (iii) 
 43.20  construction of the facility is commenced after July 1, 1994, 
 43.21  and before July 1, 1997. 
 43.22     (29) Real property acquired by a home rule charter city, 
 43.23  statutory city, county, town, or school district under a lease 
 43.24  purchase agreement or an installment purchase contract during 
 43.25  the term of the lease purchase agreement as long as and to the 
 43.26  extent that the property is used by the city, county, town, or 
 43.27  school district and devoted to a public use and to the extent it 
 43.28  is not subleased to any private individual, entity, association, 
 43.29  or corporation in connection with a business or enterprise 
 43.30  operated for profit. 
 43.31     (30) Notwithstanding any other law to the contrary, real 
 43.32  property that meets the following criteria is exempt: 
 43.33     (i) constitutes a wastewater treatment system (a) 
 43.34  constructed by a municipality using public funds, (b) operates 
 43.35  under a State Disposal System Permit issued by the Minnesota 
 43.36  pollution control agency pursuant to chapters 115 and 116 and 
 44.1   Minnesota Rules, chapter 700l, and (c) applies its effluent to 
 44.2   land used as part of an agricultural operation; 
 44.3      (ii) is located within a municipality of a population of 
 44.4   less than 10,000; 
 44.5      (iii) is used for treatment of effluent from a private 
 44.6   potato processing facility; and 
 44.7      (iv) is owned by a municipality and operated by a private 
 44.8   entity under agreement with that municipality. 
 44.9      Sec. 2.  Minnesota Statutes 1996, section 272.02, is 
 44.10  amended by adding a subdivision to read: 
 44.11     Subd. 9.  [ELDERLY ASSISTED LIVING.] (a) An elderly 
 44.12  assisted living facility is exempt if it: 
 44.13     (1) is an institution of purely public charity within the 
 44.14  meaning of subdivision 1; 
 44.15     (2) received an amount equal to one percent or more of its 
 44.16  operating costs from charitable contributions in the year 
 44.17  immediately preceding the assessment year; and 
 44.18     (3) upon request by the assessor, the owner, or manager of 
 44.19  the facility supplies information documenting compliance with 
 44.20  the requirements of clause (2). 
 44.21     (b) For purposes of this section, the following terms have 
 44.22  the meanings given: 
 44.23     (1) "Elderly assisted living facility" means a facility as 
 44.24  defined in section 273.13, subdivision 25a. 
 44.25     (2) "Charitable contributions" means a charitable 
 44.26  contribution as defined in section 170(c) of the Internal 
 44.27  Revenue Code of 1986, as amended through December 31, 1997, 
 44.28  regardless of whether the amounts are deductible for income tax 
 44.29  purposes because of other limitations on the deductibility of 
 44.30  charitable contributions. 
 44.31     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
 44.32  272.115, subdivision 4, is amended to read: 
 44.33     Subd. 4.  [ELIGIBILITY FOR HOMESTEAD STATUS.] No real 
 44.34  estate sold or transferred on or after January 1, 1993, for 
 44.35  which a certificate of real estate value is required under 
 44.36  subdivision 1 this section shall be classified as a homestead, 
 45.1   unless (1) a certificate of value has been filed with the county 
 45.2   auditor in accordance with this section, or (2) the real estate 
 45.3   was conveyed by the federal government, the state, a political 
 45.4   subdivision of the state, or combination of them to a person 
 45.5   otherwise eligible to receive homestead classification of the 
 45.6   property. 
 45.7      This subdivision shall apply to any real estate taxes that 
 45.8   are payable the year or years following the sale or transfer of 
 45.9   the property. 
 45.10     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
 45.11  272.115, subdivision 5, is amended to read: 
 45.12     Subd. 5.  [EXEMPTION FOR GOVERNMENT BODIES.] A certificate 
 45.13  of real estate value is not required when the real estate is 
 45.14  being conveyed to or by a public authority or agency of the 
 45.15  federal government, the state of Minnesota department of 
 45.16  transportation, a political subdivision of the state, or any 
 45.17  combination of them, for highway or roadway right-of-way 
 45.18  purposes, provided that the authority, agency, or governmental 
 45.19  unit has agreed to file a list of the real estate conveyed by or 
 45.20  to the authority, agency, or governmental unit with the 
 45.21  commissioner of revenue by June 1 of the year following the year 
 45.22  of the conveyance. 
 45.23     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
 45.24  273.124, subdivision 14, is amended to read: 
 45.25     Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
 45.26  (a) Real estate of less than ten acres that is the homestead of 
 45.27  its owner must be classified as class 2a under section 273.13, 
 45.28  subdivision 23, paragraph (a), if:  
 45.29     (1) the parcel on which the house is located is contiguous 
 45.30  on at least two sides to (i) agricultural land, (ii) land owned 
 45.31  or administered by the United States Fish and Wildlife Service, 
 45.32  or (iii) land administered by the department of natural 
 45.33  resources on which in lieu taxes are paid under sections 477A.11 
 45.34  to 477A.14; 
 45.35     (2) its owner also owns a noncontiguous parcel of 
 45.36  agricultural land that is at least 20 acres; 
 46.1      (3) the noncontiguous land is located not farther than two 
 46.2   four townships or cities, or a combination of townships or 
 46.3   cities from the homestead; and 
 46.4      (4) the agricultural use value of the noncontiguous land 
 46.5   and farm buildings is equal to at least 50 percent of the market 
 46.6   value of the house, garage, and one acre of land. 
 46.7      Homesteads initially classified as class 2a under the 
 46.8   provisions of this paragraph shall remain classified as class 
 46.9   2a, irrespective of subsequent changes in the use of adjoining 
 46.10  properties, as long as the homestead remains under the same 
 46.11  ownership, the owner owns a noncontiguous parcel of agricultural 
 46.12  land that is at least 20 acres, and the agricultural use value 
 46.13  qualifies under clause (4). 
 46.14     (b) Except as provided in paragraph (d), noncontiguous land 
 46.15  shall be included as part of a homestead under section 273.13, 
 46.16  subdivision 23, paragraph (a), only if the homestead is 
 46.17  classified as class 2a and the detached land is located in the 
 46.18  same township or city, or not farther than two four townships or 
 46.19  cities or combination thereof from the homestead.  Any taxpayer 
 46.20  of these noncontiguous lands must notify the county assessor 
 46.21  that the noncontiguous land is part of the taxpayer's homestead, 
 46.22  and, if the homestead is located in another county, the taxpayer 
 46.23  must also notify the assessor of the other county. 
 46.24     (c) Agricultural land used for purposes of a homestead and 
 46.25  actively farmed by a person holding a vested remainder interest 
 46.26  in it must be classified as a homestead under section 273.13, 
 46.27  subdivision 23, paragraph (a).  If agricultural land is 
 46.28  classified class 2a, any other dwellings on the land used for 
 46.29  purposes of a homestead by persons holding vested remainder 
 46.30  interests who are actively engaged in farming the property, and 
 46.31  up to one acre of the land surrounding each homestead and 
 46.32  reasonably necessary for the use of the dwelling as a home, must 
 46.33  also be assessed class 2a. 
 46.34     (d) Agricultural land and buildings that were class 2a 
 46.35  homestead property under section 273.13, subdivision 23, 
 46.36  paragraph (a), for the 1997 assessment shall remain classified 
 47.1   as agricultural homesteads for subsequent assessments if:  
 47.2      (1) the property owner abandoned the homestead dwelling 
 47.3   located on the agricultural homestead as a result of the April 
 47.4   1997 floods; 
 47.5      (2) the property is located in the county of Polk, Clay, 
 47.6   Kittson, Marshall, Norman, or Wilkin; 
 47.7      (3) the agricultural land and buildings remain under the 
 47.8   same ownership for the current assessment year as existed for 
 47.9   the 1997 assessment year; 
 47.10     (4) the dwelling occupied by the owner is located in 
 47.11  Minnesota and is within 30 miles of one of the parcels of 
 47.12  agricultural land that is owned by the taxpayer; and 
 47.13     (5) the owner notifies the county assessor that the 
 47.14  relocation was due to the 1997 floods, and the owner furnishes 
 47.15  the assessor any information deemed necessary by the assessor in 
 47.16  verifying the change in homestead dwelling.  For taxes payable 
 47.17  in 1998, the owner must notify the assessor by December 1, 
 47.18  1997.  Further notifications to the assessor are not required if 
 47.19  the property continues to meet all the requirements in this 
 47.20  paragraph and any dwellings on the agricultural land remain 
 47.21  uninhabited. 
 47.22     Sec. 6.  Minnesota Statutes 1997 Supplement, section 
 47.23  273.13, subdivision 25, as amended by Laws 1997, Third Special 
 47.24  Session chapter 231, article 1, section 8, is amended to read: 
 47.25     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 47.26  estate containing four or more units and used or held for use by 
 47.27  the owner or by the tenants or lessees of the owner as a 
 47.28  residence for rental periods of 30 days or more.  Class 4a also 
 47.29  includes hospitals licensed under sections 144.50 to 144.56, 
 47.30  other than hospitals exempt under section 272.02, and contiguous 
 47.31  property used for hospital purposes, without regard to whether 
 47.32  the property has been platted or subdivided.  Class 4a property 
 47.33  in a city with a population of 5,000 or less, that is (1) 
 47.34  located outside of the metropolitan area, as defined in section 
 47.35  473.121, subdivision 2, or outside any county contiguous to the 
 47.36  metropolitan area, and (2) whose city boundary is at least 15 
 48.1   miles from the boundary of any city with a population greater 
 48.2   than 5,000 has a class rate of 2.3 percent of market value.  All 
 48.3   other class 4a property has a class rate of 2.9 percent of 
 48.4   market value.  For purposes of this paragraph, population has 
 48.5   the same meaning given in section 477A.011, subdivision 3. 
 48.6      (b) Class 4b includes: 
 48.7      (1) residential real estate containing less than four units 
 48.8   that does not qualify as class 4bb, other than seasonal 
 48.9   residential, and recreational; 
 48.10     (2) manufactured homes not classified under any other 
 48.11  provision; 
 48.12     (3) a dwelling, garage, and surrounding one acre of 
 48.13  property on a nonhomestead farm classified under subdivision 23, 
 48.14  paragraph (b) containing two or three units; 
 48.15     (4) unimproved property that is classified residential as 
 48.16  determined under section 273.13, subdivision 33.  
 48.17     Class 4b property has a class rate of 2.1 percent of market 
 48.18  value.  
 48.19     (c) Class 4bb includes: 
 48.20     (1) nonhomestead residential real estate containing one 
 48.21  unit, other than seasonal residential, and recreational; and 
 48.22     (2) a single family dwelling, garage, and surrounding one 
 48.23  acre of property on a nonhomestead farm classified under 
 48.24  subdivision 23, paragraph (b). 
 48.25     Class 4bb has a class rate of 1.9 percent on the first 
 48.26  $75,000 of market value and a class rate of 2.1 percent of its 
 48.27  market value that exceeds $75,000. 
 48.28     Property that has been classified as seasonal recreational 
 48.29  residential property at any time during which it has been owned 
 48.30  by the current owner or spouse of the current owner does not 
 48.31  qualify for class 4bb. 
 48.32     (d) Class 4c property includes: 
 48.33     (1) except as provided in subdivision 22, paragraph (c), 
 48.34  real property devoted to temporary and seasonal residential 
 48.35  occupancy for recreation purposes, including real property 
 48.36  devoted to temporary and seasonal residential occupancy for 
 49.1   recreation purposes and not devoted to commercial purposes for 
 49.2   more than 250 days in the year preceding the year of 
 49.3   assessment.  For purposes of this clause, property is devoted to 
 49.4   a commercial purpose on a specific day if any portion of the 
 49.5   property is used for residential occupancy, and a fee is charged 
 49.6   for residential occupancy.  In order for a property to be 
 49.7   classified as class 4c, seasonal recreational residential for 
 49.8   commercial purposes, at least 40 percent of the annual gross 
 49.9   lodging receipts related to the property must be from business 
 49.10  conducted between Memorial Day weekend and Labor Day weekend and 
 49.11  at least 60 percent of all bookings by lodging guests during the 
 49.12  year must be for periods of at least two consecutive nights.  
 49.13  Class 4c also includes commercial use real property used 
 49.14  exclusively for recreational purposes in conjunction with class 
 49.15  4c property devoted to temporary and seasonal residential 
 49.16  occupancy for recreational purposes, up to a total of two acres, 
 49.17  provided the property is not devoted to commercial recreational 
 49.18  use for more than 250 days in the year preceding the year of 
 49.19  assessment and is located within two miles of the class 4c 
 49.20  property with which it is used.  Class 4c property classified in 
 49.21  this clause also includes the remainder of class 1c resorts.  
 49.22  Owners of real property devoted to temporary and seasonal 
 49.23  residential occupancy for recreation purposes and all or a 
 49.24  portion of which was devoted to commercial purposes for not more 
 49.25  than 250 days in the year preceding the year of assessment 
 49.26  desiring classification as class 1c or 4c, must submit a 
 49.27  declaration to the assessor designating the cabins or units 
 49.28  occupied for 250 days or less in the year preceding the year of 
 49.29  assessment by January 15 of the assessment year.  Those cabins 
 49.30  or units and a proportionate share of the land on which they are 
 49.31  located will be designated class 1c or 4c as otherwise 
 49.32  provided.  The remainder of the cabins or units and a 
 49.33  proportionate share of the land on which they are located will 
 49.34  be designated as class 3a.  The owner of property desiring 
 49.35  designation as class 1c or 4c property must provide guest 
 49.36  registers or other records demonstrating that the units for 
 50.1   which class 1c or 4c designation is sought were not occupied for 
 50.2   more than 250 days in the year preceding the assessment if so 
 50.3   requested.  The portion of a property operated as a (1) 
 50.4   restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 50.5   facility operated on a commercial basis not directly related to 
 50.6   temporary and seasonal residential occupancy for recreation 
 50.7   purposes shall not qualify for class 1c or 4c; 
 50.8      (2) qualified property used as a golf course if: 
 50.9      (i) any portion of the property is located within a county 
 50.10  that has a population of less than 50,000, or within a county 
 50.11  containing a golf course owned by a municipality, the county, or 
 50.12  a special taxing district; 
 50.13     (ii) it is open to the public on a daily fee basis.  It may 
 50.14  charge membership fees or dues, but a membership fee may not be 
 50.15  required in order to use the property for golfing, and its green 
 50.16  fees for golfing must be comparable to green fees typically 
 50.17  charged by municipal courses; and 
 50.18     (iii) it meets the requirements of section 273.112, 
 50.19  subdivision 3, paragraph (d). 
 50.20     A structure used as a clubhouse, restaurant, or place of 
 50.21  refreshment in conjunction with the golf course is classified as 
 50.22  class 3a property. 
 50.23     (3) real property up to a maximum of one acre of land owned 
 50.24  by a nonprofit community service oriented organization; provided 
 50.25  that the property is not used for a revenue-producing activity 
 50.26  for more than six days in the calendar year preceding the year 
 50.27  of assessment and the property is not used for residential 
 50.28  purposes on either a temporary or permanent basis.  For purposes 
 50.29  of this clause, a "nonprofit community service oriented 
 50.30  organization" means any corporation, society, association, 
 50.31  foundation, or institution organized and operated exclusively 
 50.32  for charitable, religious, fraternal, civic, or educational 
 50.33  purposes, and which is exempt from federal income taxation 
 50.34  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 50.35  Revenue Code of 1986, as amended through December 31, 1990.  For 
 50.36  purposes of this clause, "revenue-producing activities" shall 
 51.1   include but not be limited to property or that portion of the 
 51.2   property that is used as an on-sale intoxicating liquor or 3.2 
 51.3   percent malt liquor establishment licensed under chapter 340A, a 
 51.4   restaurant open to the public, bowling alley, a retail store, 
 51.5   gambling conducted by organizations licensed under chapter 349, 
 51.6   an insurance business, or office or other space leased or rented 
 51.7   to a lessee who conducts a for-profit enterprise on the 
 51.8   premises.  Any portion of the property which is used for 
 51.9   revenue-producing activities for more than six days in the 
 51.10  calendar year preceding the year of assessment shall be assessed 
 51.11  as class 3a.  The use of the property for social events open 
 51.12  exclusively to members and their guests for periods of less than 
 51.13  24 hours, when an admission is not charged nor any revenues are 
 51.14  received by the organization shall not be considered a 
 51.15  revenue-producing activity; 
 51.16     (4) post-secondary student housing of not more than one 
 51.17  acre of land that is owned by a nonprofit corporation organized 
 51.18  under chapter 317A and is used exclusively by a student 
 51.19  cooperative, sorority, or fraternity for on-campus housing or 
 51.20  housing located within two miles of the border of a college 
 51.21  campus; and 
 51.22     (5) manufactured home parks as defined in section 327.14, 
 51.23  subdivision 3. 
 51.24     Class 4c property has a class rate of 2.1 percent of market 
 51.25  value, except that (i) for each parcel of seasonal residential 
 51.26  recreational property not used for commercial purposes the first 
 51.27  $75,000 of market value has a class rate of 1.4 percent, and the 
 51.28  market value that exceeds $75,000 has a class rate of 2.5 
 51.29  percent, and (ii) manufactured home parks assessed under clause 
 51.30  (5) have a class rate of two percent.  
 51.31     (e) Class 4d property is qualifying low-income rental 
 51.32  housing certified to the assessor by the housing finance agency 
 51.33  under sections 273.126 and 462A.071.  Class 4d includes land in 
 51.34  proportion to the total market value of the building that is 
 51.35  qualifying low-income rental housing.  For all properties 
 51.36  qualifying as class 4d, the market value determined by the 
 52.1   assessor must be based on the normal approach to value using 
 52.2   normal unrestricted rents. 
 52.3      Class 4d property has a class rate of one percent of market 
 52.4   value.  
 52.5      (f) Class 4e property consists of the residential portion 
 52.6   of any structure located within a city that was converted from 
 52.7   nonresidential use to residential use, provided that: 
 52.8      (1) the structure had formerly been used as a warehouse; 
 52.9      (2) the structure was originally constructed prior to 1940; 
 52.10     (3) the conversion was done after December 31, 1995, but 
 52.11  before January 1, 2003; and 
 52.12     (4) the conversion involved an investment of at least 
 52.13  $25,000 per residential unit. 
 52.14     Class 4e property has a class rate of 2.3 percent, provided 
 52.15  that a structure is eligible for class 4e classification only in 
 52.16  the 12 assessment years immediately following the conversion. 
 52.17     (g) Class 4f property consists of any parcel or contiguous 
 52.18  parcels of unimproved real estate, not including agricultural 
 52.19  land, that meets the requirements in clauses (1) to (3): 
 52.20     (1) the property consists of at least 300 contiguous feet 
 52.21  of unimproved real estate that borders or is adjacent to public 
 52.22  waters as defined in section 103G.005, subdivision 15, clauses 
 52.23  (1) to (5), and (7) to (9); 
 52.24     (2) the unimproved real estate is located within 400 feet 
 52.25  from the ordinary high water elevation of the public waters; 
 52.26     (3) the owner of the property signs a covenant agreement 
 52.27  and files the covenant with the county assessor in the county 
 52.28  where the property is located.  The covenant agreement must 
 52.29  include all of the following: 
 52.30     (i) legal description of the area to which the covenant 
 52.31  applies; 
 52.32     (ii) name and address of the owner; 
 52.33     (iii) a statement that the land described in the covenant 
 52.34  must be kept as undeveloped land for the duration of the 
 52.35  covenant; 
 52.36     (iv) a statement that the landowner may initiate expiration 
 53.1   of the covenant agreement by notifying the county assessor, in 
 53.2   writing, with the date of expiration which must be at least 
 53.3   eight years from the date of the expiration notice; 
 53.4      (v) a statement that the covenant is binding on the owner 
 53.5   or owner's successor or assignee, and runs with the land; and 
 53.6      (vi) a witnessed signature of the owner covenanting to keep 
 53.7   the land in its undeveloped state as it existed on the date the 
 53.8   covenant was signed; and 
 53.9      (4) upon expiration of a covenant agreement in clause (3), 
 53.10  the property which is sold is subject to additional taxes.  The 
 53.11  amount of additional taxes due on the property equals the 
 53.12  difference between the taxes actually levied and the taxes that 
 53.13  would have been imposed if the property had been valued and 
 53.14  classified if class 4f did not apply.  The additional taxes must 
 53.15  be extended against the property on the tax list for the current 
 53.16  year.  No interest or penalties may be levied on the additional 
 53.17  taxes if timely paid, and the additional taxes must be levied 
 53.18  only with respect to the last five years that the property was 
 53.19  valued and assessed as class 4f property. 
 53.20     The tax imposed under this paragraph is a lien on the 
 53.21  property assessed to the same extent and for the same duration 
 53.22  as other real property taxes.  The tax must be extended by the 
 53.23  county auditor and when payable be collected and distributed in 
 53.24  the same manner provided by law for the collection and 
 53.25  distribution of other property taxes. 
 53.26     Class 4f has a class rate of 1.0 percent of market value. 
 53.27     Sec. 7.  Minnesota Statutes 1996, section 273.13, is 
 53.28  amended by adding a subdivision to read: 
 53.29     Subd. 34.  [ELDERLY ASSISTED LIVING FACILITY; TRANSITION 
 53.30  CLASS RATES.] If an elderly assisted living facility as 
 53.31  described under subdivision 25a, was exempt from property taxes 
 53.32  for the 1998 assessment, but does not qualify for the exemption 
 53.33  under section 272.02, subdivisions 1 and 9, for a subsequent 
 53.34  assessment, the assessor shall assign the property to the 
 53.35  appropriate class; however, the class rate used shall be phased 
 53.36  in over the next five years in equal proportions. 
 54.1      Sec. 8.  [273.1383] [1997 FLOOD LOSS REPLACEMENT AID.] 
 54.2      Subdivision 1.  [FLOOD NET TAX CAPACITY LOSS.] In 
 54.3   assessment years 1998, 1999, and 2000, the county assessor of 
 54.4   each county listed in section 273.124, subdivision 14, paragraph 
 54.5   (d), shall compute a hypothetical county net tax capacity based 
 54.6   upon market values for the current assessment year and the class 
 54.7   rates that were in effect for assessment year 1997.  The amount, 
 54.8   if any, by which the assessment year 1997 total taxable net tax 
 54.9   capacity exceeds the hypothetical taxable net tax capacity shall 
 54.10  be known as the county's "flood net tax capacity loss" for the 
 54.11  current assessment year.  The county assessor of each county 
 54.12  whose flood net tax capacity loss for the current year exceeds 
 54.13  five percent of its assessment year 1997 total taxable net tax 
 54.14  capacity shall certify its flood net tax capacity loss to the 
 54.15  commissioner of revenue by July 15 of the assessment year. 
 54.16     Subd. 2.  [FLOOD LOSS AID.] Each year, each county with a 
 54.17  flood net tax capacity loss equal to or greater than five 
 54.18  percent of its assessment year 1997 total taxable net tax 
 54.19  capacity shall be entitled to flood loss aid equal to the flood 
 54.20  net tax capacity loss times the county's average local tax rate 
 54.21  for taxes payable in 1998. 
 54.22     Subd. 3.  [DUTIES OF COMMISSIONER.] The commissioner of 
 54.23  revenue shall determine each qualifying county's aid amount.  If 
 54.24  the sum of the aid amounts for all qualifying counties exceeds 
 54.25  the appropriation limit, the commissioner shall proportionately 
 54.26  reduce each county's aid amount so that the sum of county aid 
 54.27  amounts is equal to the appropriation limit.  The commissioner 
 54.28  shall notify each county of its flood loss aid amount by August 
 54.29  15 of the assessment year.  The commissioner shall make payments 
 54.30  to each county on July 15 of the taxes payable year 
 54.31  corresponding to the assessment year. 
 54.32     Subd. 4.  [APPROPRIATION.] An amount necessary to fund the 
 54.33  aid amounts under this section, but not to exceed $2,000,000 per 
 54.34  year, is annually appropriated from the general fund to the 
 54.35  commissioner of revenue in fiscal years 2000, 2001, and 2002, 
 54.36  for calendar years 1999, 2000, and 2001. 
 55.1      Sec. 9.  Minnesota Statutes 1997 Supplement, section 
 55.2   275.065, subdivision 3, is amended to read: 
 55.3      Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 55.4   county auditor shall prepare and the county treasurer shall 
 55.5   deliver after November 10 and on or before November 24 each 
 55.6   year, by first class mail to each taxpayer at the address listed 
 55.7   on the county's current year's assessment roll, a notice of 
 55.8   proposed property taxes.  
 55.9      (b) The commissioner of revenue shall prescribe the form of 
 55.10  the notice. 
 55.11     (c) The notice must inform taxpayers that it contains the 
 55.12  amount of property taxes each taxing authority proposes to 
 55.13  collect for taxes payable the following year.  In the case of a 
 55.14  town, or in the case of the state determined portion of the 
 55.15  school district levy, the final tax amount will be its proposed 
 55.16  tax.  The notice must clearly state that each taxing authority, 
 55.17  including regional library districts established under section 
 55.18  134.201, and including the metropolitan taxing districts as 
 55.19  defined in paragraph (i), but excluding all other special taxing 
 55.20  districts and towns, will hold a public meeting to receive 
 55.21  public testimony on the proposed budget and proposed or final 
 55.22  property tax levy, or, in case of a school district, on the 
 55.23  current budget and proposed property tax levy.  It must clearly 
 55.24  state the time and place of each taxing authority's meeting and 
 55.25  an address where comments will be received by mail.  
 55.26     (d) The notice must state for each parcel: 
 55.27     (1) the market value of the property as determined under 
 55.28  section 273.11, and used for computing property taxes payable in 
 55.29  the following year and for taxes payable in the current year as 
 55.30  each appears in the records of the county assessor on November 1 
 55.31  of the current year; and, in the case of residential property, 
 55.32  whether the property is classified as homestead or 
 55.33  nonhomestead.  The notice must clearly inform taxpayers of the 
 55.34  years to which the market values apply and that the values are 
 55.35  final values; 
 55.36     (2) the items listed below, shown separately by county, 
 56.1   city or town, state determined school tax net of the education 
 56.2   homestead credit under section 273.1382, voter approved school 
 56.3   levy, other local school levy, and the sum of the special taxing 
 56.4   districts, and as a total of all taxing authorities:  
 56.5      (i) the actual tax for taxes payable in the current year; 
 56.6      (ii) the tax change due to spending factors, defined as the 
 56.7   proposed tax minus the constant spending tax amount; 
 56.8      (iii) the tax change due to other factors, defined as the 
 56.9   constant spending tax amount minus the actual current year tax; 
 56.10  and 
 56.11     (iv) the proposed tax amount. 
 56.12     In the case of a town or the state determined school tax, 
 56.13  the final tax shall also be its proposed tax unless the town 
 56.14  changes its levy at a special town meeting under section 
 56.15  365.52.  If a school district has certified under section 
 56.16  124A.03, subdivision 2, that a referendum will be held in the 
 56.17  school district at the November general election, the county 
 56.18  auditor must note next to the school district's proposed amount 
 56.19  that a referendum is pending and that, if approved by the 
 56.20  voters, the tax amount may be higher than shown on the notice.  
 56.21  In the case of the city of Minneapolis, the levy for the 
 56.22  Minneapolis library board and the levy for Minneapolis park and 
 56.23  recreation shall be listed separately from the remaining amount 
 56.24  of the city's levy.  In the case of a parcel where tax increment 
 56.25  or the fiscal disparities areawide tax under chapter 276A or 
 56.26  473F applies, the proposed tax levy on the captured value or the 
 56.27  proposed tax levy on the tax capacity subject to the areawide 
 56.28  tax must each be stated separately and not included in the sum 
 56.29  of the special taxing districts; and 
 56.30     (3) the increase or decrease between the total taxes 
 56.31  payable in the current year and the total proposed taxes, 
 56.32  expressed as a percentage. 
 56.33     For purposes of this section, the amount of the tax on 
 56.34  homesteads qualifying under the senior citizens' property tax 
 56.35  deferral program under chapter 290B is the total amount of 
 56.36  property tax before subtraction of the deferred property tax 
 57.1   amount. 
 57.2      (e) The notice must clearly state that the proposed or 
 57.3   final taxes do not include the following: 
 57.4      (1) special assessments; 
 57.5      (2) levies approved by the voters after the date the 
 57.6   proposed taxes are certified, including bond referenda, school 
 57.7   district levy referenda, and levy limit increase referenda; 
 57.8      (3) amounts necessary to pay cleanup or other costs due to 
 57.9   a natural disaster occurring after the date the proposed taxes 
 57.10  are certified; 
 57.11     (4) amounts necessary to pay tort judgments against the 
 57.12  taxing authority that become final after the date the proposed 
 57.13  taxes are certified; and 
 57.14     (5) the contamination tax imposed on properties which 
 57.15  received market value reductions for contamination. 
 57.16     (f) Except as provided in subdivision 7, failure of the 
 57.17  county auditor to prepare or the county treasurer to deliver the 
 57.18  notice as required in this section does not invalidate the 
 57.19  proposed or final tax levy or the taxes payable pursuant to the 
 57.20  tax levy. 
 57.21     (g) If the notice the taxpayer receives under this section 
 57.22  lists the property as nonhomestead, and satisfactory 
 57.23  documentation is provided to the county assessor by the 
 57.24  applicable deadline, and the property qualifies for the 
 57.25  homestead classification in that assessment year, the assessor 
 57.26  shall reclassify the property to homestead for taxes payable in 
 57.27  the following year. 
 57.28     (h) In the case of class 4 residential property used as a 
 57.29  residence for lease or rental periods of 30 days or more, the 
 57.30  taxpayer must either: 
 57.31     (1) mail or deliver a copy of the notice of proposed 
 57.32  property taxes to each tenant, renter, or lessee; or 
 57.33     (2) post a copy of the notice in a conspicuous place on the 
 57.34  premises of the property.  
 57.35     The notice must be mailed or posted by the taxpayer by 
 57.36  November 27 or within three days of receipt of the notice, 
 58.1   whichever is later.  A taxpayer may notify the county treasurer 
 58.2   of the address of the taxpayer, agent, caretaker, or manager of 
 58.3   the premises to which the notice must be mailed in order to 
 58.4   fulfill the requirements of this paragraph. 
 58.5      (i) For purposes of this subdivision, subdivisions 5a and 
 58.6   6, "metropolitan special taxing districts" means the following 
 58.7   taxing districts in the seven-county metropolitan area that levy 
 58.8   a property tax for any of the specified purposes listed below: 
 58.9      (1) metropolitan council under section 473.132, 473.167, 
 58.10  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 58.11     (2) metropolitan airports commission under section 473.667, 
 58.12  473.671, or 473.672; and 
 58.13     (3) metropolitan mosquito control commission under section 
 58.14  473.711. 
 58.15     For purposes of this section, any levies made by the 
 58.16  regional rail authorities in the county of Anoka, Carver, 
 58.17  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 58.18  398A shall be included with the appropriate county's levy and 
 58.19  shall be discussed at that county's public hearing. 
 58.20     (j) If a statutory or home rule charter city or a town 
 58.21  exercises the local levy option provided by section 473.388, 
 58.22  subdivision 7, it may include in the notice of its proposed 
 58.23  taxes a statement of the amount by which its proposed taxes are 
 58.24  attributable to its exercise of the option, together with a 
 58.25  statement that the levy of the metropolitan council was 
 58.26  decreased by a similar amount because of exercise of that option.
 58.27     Sec. 10.  Minnesota Statutes 1997 Supplement, section 
 58.28  275.065, subdivision 6, is amended to read: 
 58.29     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
 58.30  (a) For purposes of this section, the following terms shall have 
 58.31  the meanings given: 
 58.32     (1) "Initial hearing" means the first and primary hearing 
 58.33  held to discuss the taxing authority's proposed budget and 
 58.34  proposed property tax levy for taxes payable in the following 
 58.35  year, or, for school districts, the current budget and the 
 58.36  proposed property tax levy for taxes payable in the following 
 59.1   year. 
 59.2      (2) "Continuation hearing" means a hearing held to complete 
 59.3   the initial hearing, if the initial hearing is not completed on 
 59.4   its scheduled date. 
 59.5      (3) "Subsequent hearing" means the hearing held to adopt 
 59.6   the taxing authority's final property tax levy, and, in the case 
 59.7   of taxing authorities other than school districts, the final 
 59.8   budget, for taxes payable in the following year. 
 59.9      (b) Between November 29 and December 20, the governing 
 59.10  bodies of a city that has a population over 500, county, 
 59.11  metropolitan special taxing districts as defined in subdivision 
 59.12  3, paragraph (i), and regional library districts shall each hold 
 59.13  an initial public hearing to discuss and seek public comment on 
 59.14  its final budget and property tax levy for taxes payable in the 
 59.15  following year, and the governing body of the school district 
 59.16  shall hold an initial public hearing to review its current 
 59.17  budget and proposed property tax levy for taxes payable in the 
 59.18  following year.  The metropolitan special taxing districts shall 
 59.19  be required to hold only a single joint initial public hearing, 
 59.20  the location of which will be determined by the affected 
 59.21  metropolitan agencies. 
 59.22     (c) The initial hearing must be held after 5:00 p.m. if 
 59.23  scheduled on a day other than Saturday.  No initial hearing may 
 59.24  be held on a Sunday.  
 59.25     (d) At the initial hearing under this subdivision, the 
 59.26  percentage increase in property taxes proposed by the taxing 
 59.27  authority, if any, and the specific purposes for which property 
 59.28  tax revenues are being increased must be discussed.  During the 
 59.29  discussion, the governing body shall hear comments regarding a 
 59.30  proposed increase and explain the reasons for the proposed 
 59.31  increase.  The public shall be allowed to speak and to ask 
 59.32  questions.  At the public hearing, the school district must also 
 59.33  provide and discuss information on the distribution of its 
 59.34  revenues by revenue source, and the distribution of its spending 
 59.35  by program area.  
 59.36     (e) If the initial hearing is not completed on its 
 60.1   scheduled date, the taxing authority must announce, prior to 
 60.2   adjournment of the hearing, the date, time, and place for the 
 60.3   continuation of the hearing.  The continuation hearing must be 
 60.4   held at least five business days but no more than 14 business 
 60.5   days after the initial hearing.  A continuation hearing may not 
 60.6   be held later than December 20 except as provided in paragraphs 
 60.7   (f) and (g).  A continuation hearing must be held after 5:00 
 60.8   p.m. if scheduled on a day other than Saturday.  No continuation 
 60.9   hearing may be held on a Sunday. 
 60.10     (f) The governing body of a county shall hold its initial 
 60.11  hearing on the second Tuesday first Thursday in December each 
 60.12  year, and may hold additional initial hearings on other dates 
 60.13  before December 20 if necessary for the convenience of county 
 60.14  residents.  If the county needs a continuation of its hearing, 
 60.15  the continuation hearing shall be held on the third Tuesday in 
 60.16  December.  If the third Tuesday in December falls on December 
 60.17  21, the county's continuation hearing shall be held on Monday, 
 60.18  December 20.  
 60.19     (g) The metropolitan special taxing districts shall hold a 
 60.20  joint initial public hearing on the first Monday Wednesday of 
 60.21  December.  A continuation hearing, if necessary, shall be held 
 60.22  on the second Monday Wednesday of December even if that second 
 60.23  Monday Wednesday is after December 10. 
 60.24     (h) The county auditor shall provide for the coordination 
 60.25  of initial and continuation hearing dates for all school 
 60.26  districts and cities within the county to prevent conflicts 
 60.27  under clauses (i) and (j). 
 60.28     (i) By August 10, each school board and the board of the 
 60.29  regional library district shall certify to the county auditors 
 60.30  of the counties in which the school district or regional library 
 60.31  district is located the dates on which it elects to hold its 
 60.32  initial hearing and any continuation hearing.  If a school board 
 60.33  or regional library district does not certify these dates by 
 60.34  August 10, the auditor will assign the initial and continuation 
 60.35  hearing dates.  The dates elected or assigned must not conflict 
 60.36  with the initial and continuation hearing dates of the county or 
 61.1   the metropolitan special taxing districts.  
 61.2      (j) By August 20, the county auditor shall notify the 
 61.3   clerks of the cities within the county of the dates on which 
 61.4   school districts and regional library districts have elected to 
 61.5   hold their initial and continuation hearings.  At the time a 
 61.6   city certifies its proposed levy under subdivision 1 it shall 
 61.7   certify the dates on which it elects to hold its initial hearing 
 61.8   and any continuation hearing.  Until September 15, the first and 
 61.9   second Mondays of December are reserved for the use of the 
 61.10  cities.  If a city does not certify these its hearing dates by 
 61.11  September 15, the auditor shall assign the initial and 
 61.12  continuation hearing dates.  The dates elected or assigned for 
 61.13  the initial hearing must not conflict with the initial hearing 
 61.14  dates of the county, metropolitan special taxing districts, 
 61.15  regional library districts, or school districts within which the 
 61.16  city is located.  To the extent possible, the dates of the 
 61.17  city's continuation hearing should not conflict with the 
 61.18  continuation hearing dates of the county, metropolitan special 
 61.19  taxing districts, regional library districts, or school 
 61.20  districts within which the city is located.  This paragraph does 
 61.21  not apply to cities of 500 population or less. 
 61.22     (k) The county initial hearing date and the city, 
 61.23  metropolitan special taxing district, regional library district, 
 61.24  and school district initial hearing dates must be designated on 
 61.25  the notices required under subdivision 3.  The continuation 
 61.26  hearing dates need not be stated on the notices.  
 61.27     (l) At a subsequent hearing, each county, school district, 
 61.28  city over 500 population, and metropolitan special taxing 
 61.29  district may amend its proposed property tax levy and must adopt 
 61.30  a final property tax levy.  Each county, city over 500 
 61.31  population, and metropolitan special taxing district may also 
 61.32  amend its proposed budget and must adopt a final budget at the 
 61.33  subsequent hearing.  The final property tax levy must be adopted 
 61.34  prior to adopting the final budget.  A school district is not 
 61.35  required to adopt its final budget at the subsequent hearing.  
 61.36  The subsequent hearing of a taxing authority must be held on a 
 62.1   date subsequent to the date of the taxing authority's initial 
 62.2   public hearing.  If a continuation hearing is held, the 
 62.3   subsequent hearing must be held either immediately following the 
 62.4   continuation hearing or on a date subsequent to the continuation 
 62.5   hearing.  The subsequent hearing may be held at a regularly 
 62.6   scheduled board or council meeting or at a special meeting 
 62.7   scheduled for the purposes of the subsequent hearing.  The 
 62.8   subsequent hearing of a taxing authority does not have to be 
 62.9   coordinated by the county auditor to prevent a conflict with an 
 62.10  initial hearing, a continuation hearing, or a subsequent hearing 
 62.11  of any other taxing authority.  All subsequent hearings must be 
 62.12  held prior to five working days after December 20 of the levy 
 62.13  year.  The date, time, and place of the subsequent hearing must 
 62.14  be announced at the initial public hearing or at the 
 62.15  continuation hearing. 
 62.16     (m) The property tax levy certified under section 275.07 by 
 62.17  a city of any population, county, metropolitan special taxing 
 62.18  district, regional library district, or school district must not 
 62.19  exceed the proposed levy determined under subdivision 1, except 
 62.20  by an amount up to the sum of the following amounts: 
 62.21     (1) the amount of a school district levy whose voters 
 62.22  approved a referendum to increase taxes under section 124.82, 
 62.23  subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 
 62.24  2, after the proposed levy was certified; 
 62.25     (2) the amount of a city or county levy approved by the 
 62.26  voters after the proposed levy was certified; 
 62.27     (3) the amount of a levy to pay principal and interest on 
 62.28  bonds approved by the voters under section 475.58 after the 
 62.29  proposed levy was certified; 
 62.30     (4) the amount of a levy to pay costs due to a natural 
 62.31  disaster occurring after the proposed levy was certified, if 
 62.32  that amount is approved by the commissioner of revenue under 
 62.33  subdivision 6a; 
 62.34     (5) the amount of a levy to pay tort judgments against a 
 62.35  taxing authority that become final after the proposed levy was 
 62.36  certified, if the amount is approved by the commissioner of 
 63.1   revenue under subdivision 6a; 
 63.2      (6) the amount of an increase in levy limits certified to 
 63.3   the taxing authority by the commissioner of children, families, 
 63.4   and learning or the commissioner of revenue after the proposed 
 63.5   levy was certified; and 
 63.6      (7) the amount required under section 124.755. 
 63.7      (n) This subdivision does not apply to towns and special 
 63.8   taxing districts other than regional library districts and 
 63.9   metropolitan special taxing districts. 
 63.10     (o) Notwithstanding the requirements of this section, the 
 63.11  employer is required to meet and negotiate over employee 
 63.12  compensation as provided for in chapter 179A.  
 63.13     Sec. 11.  Minnesota Statutes 1996, section 275.07, is 
 63.14  amended by adding a subdivision to read: 
 63.15     Subd. 5.  [REVISED FINAL LEVY.] (a) If the final levy of a 
 63.16  taxing jurisdiction certified to the county auditor is incorrect 
 63.17  due to an error in the deduction of the aid received under 
 63.18  section 273.1398, subdivision 2, in determining the certified 
 63.19  levy as required under subdivision 1, the taxing jurisdiction 
 63.20  may apply to the commissioner of revenue to increase the levy 
 63.21  and recertify it in the correct amount.  The commissioner must 
 63.22  receive the request by January 2. 
 63.23     (b) If the commissioner determines that the requirements of 
 63.24  paragraph (a) have been met, the commissioner shall notify the 
 63.25  taxing jurisdiction that the revised final levy has been 
 63.26  approved.  Upon receipt of the approval, but no later than 
 63.27  January 15, the governing body of the taxing jurisdiction shall 
 63.28  adopt the revised final levy and the taxing jurisdiction shall 
 63.29  recertify the revised final levy to the county auditor.  The 
 63.30  county auditor shall use the revised final levy to compute the 
 63.31  tax rate for the taxing jurisdiction. 
 63.32     (c) The county auditor shall report to the commissioner of 
 63.33  revenue the revised final levy used to determine the tax rates 
 63.34  for the taxing jurisdiction.  The provisions of section 275.065, 
 63.35  subdivisions 6, 6a, and 7, do not apply to the revised final 
 63.36  levy for the taxing jurisdiction certified under this section. 
 64.1      (d) The taxing jurisdiction must publish in an official 
 64.2   newspaper of general circulation in the taxing jurisdiction a 
 64.3   notice of its revised final levy.  The notice shall contain 
 64.4   examples of the tax impact of the revised final levy on 
 64.5   homestead, apartment, and commercial classes of property in the 
 64.6   taxing jurisdiction.  The county auditor shall assist the taxing 
 64.7   jurisdiction in preparing the examples for the publication. 
 64.8      Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 64.9   275.70, subdivision 5, is amended to read: 
 64.10     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
 64.11  portions of ad valorem taxes levied by a local governmental unit 
 64.12  for the following purposes or in the following manner: 
 64.13     (1) to pay the costs of the principal and interest on 
 64.14  bonded indebtedness or to reimburse for the amount of liquor 
 64.15  store revenues used to pay the principal and interest due on 
 64.16  municipal liquor store bonds in the year preceding the year for 
 64.17  which the levy limit is calculated; 
 64.18     (2) to pay the costs of principal and interest on 
 64.19  certificates of indebtedness issued for any corporate purpose 
 64.20  except for the following: 
 64.21     (i) tax anticipation or aid anticipation certificates of 
 64.22  indebtedness; 
 64.23     (ii) certificates of indebtedness issued under sections 
 64.24  298.28 and 298.282; 
 64.25     (iii) certificates of indebtedness used to fund current 
 64.26  expenses or to pay the costs of extraordinary expenditures that 
 64.27  result from a public emergency; or 
 64.28     (iv) certificates of indebtedness used to fund an 
 64.29  insufficiency in tax receipts or an insufficiency in other 
 64.30  revenue sources; 
 64.31     (3) to provide for the bonded indebtedness portion of 
 64.32  payments made to another political subdivision of the state of 
 64.33  Minnesota; 
 64.34     (4) to fund payments made to the Minnesota state armory 
 64.35  building commission under section 193.145, subdivision 2, to 
 64.36  retire the principal and interest on armory construction bonds; 
 65.1      (5) for unreimbursed expenses related to flooding that 
 65.2   occurred during the first half of calendar year 1997, as allowed 
 65.3   by the commissioner of revenue under section 275.74, paragraph 
 65.4   (b); 
 65.5      (6) for local units of government located in an area 
 65.6   designated by the Federal Emergency Management Agency pursuant 
 65.7   to a major disaster declaration issued for Minnesota by 
 65.8   President Clinton after April 1, 1997, and before June 11, 1997, 
 65.9   for the amount of tax dollars lost due to abatements authorized 
 65.10  under section 273.123, subdivision 7, and Laws 1997, chapter 
 65.11  231, article 2, section 64, to the extent that they are related 
 65.12  to the major disaster and to the extent that neither the state 
 65.13  or federal government reimburses the local government for the 
 65.14  amount lost; 
 65.15     (7) property taxes approved by voters which are levied 
 65.16  against the referendum market value as provided under section 
 65.17  275.61; 
 65.18     (8) to fund matching requirements needed to qualify for 
 65.19  federal or state grants or programs to the extent that either 
 65.20  (i) the matching requirement exceeds the matching requirement in 
 65.21  calendar year 1997, or (ii) it is a new matching requirement 
 65.22  that didn't exist prior to 1998; and 
 65.23     (9) to pay the expenses reasonably and necessarily incurred 
 65.24  in preparing for or repairing the effects of natural disaster 
 65.25  including the occurrence or threat of widespread or severe 
 65.26  damage, injury, or loss of life or property resulting from 
 65.27  natural causes, in accordance with standards formulated by the 
 65.28  emergency services division of the state department of public 
 65.29  safety, as allowed by the commissioner of revenue under section 
 65.30  275.74, paragraph (b); and 
 65.31     (10) to pay an abatement under section 469.1815. 
 65.32     Sec. 13.  Minnesota Statutes 1997 Supplement, section 
 65.33  275.70, is amended by adding a subdivision to read: 
 65.34     Subd. 6.  [MATCHING FUND REQUIREMENTS.] The special levy 
 65.35  provided in subdivision 5, clause (8), does not include the 
 65.36  increased direct and indirect costs related to general increases 
 66.1   in program costs where there is no mandated increase regarding 
 66.2   the matching fund requirements.  Specifically, but without 
 66.3   limitation, the following provisions apply to the special levy 
 66.4   authorization in subdivision 5, clause (8):  (1) increases in 
 66.5   direct or indirect income maintenance administrative costs are 
 66.6   not included; (2) increases for social services and social 
 66.7   services administration are included, but only to the extent 
 66.8   that the minimum local share amount needed to receive community 
 66.9   social service aids exceeds the amount levied for social 
 66.10  services and social services administration for the taxes 
 66.11  payable year 1997; and (3) increases in county costs for Title 
 66.12  IV-E Foster Care Services over the amount levied for the taxes 
 66.13  payable year 1997 are included to the extent the amount from 
 66.14  both years represents the local matching fund requirement for 
 66.15  the federal grant.  
 66.16     Sec. 14.  Minnesota Statutes 1997 Supplement, section 
 66.17  275.71, subdivision 2, is amended to read: 
 66.18     Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
 66.19  local governmental unit for taxes levied in 1997 shall be equal 
 66.20  to the sum of: 
 66.21     (1) the amount the local governmental unit levied in 1996, 
 66.22  less any amount levied for debt, as reported to the department 
 66.23  of revenue under section 275.62, subdivision 1, clause (1), and 
 66.24  less any tax levied in 1996 against market value as provided for 
 66.25  in section 275.61; 
 66.26     (2) the amount of aids the local governmental unit was 
 66.27  certified to receive in calendar year 1997 under sections 
 66.28  477A.011 to 477A.03 before any reductions for state tax 
 66.29  increment financing aid under section 273.1399, subdivision 5; 
 66.30     (3) the amount of homestead and agricultural credit aid the 
 66.31  local governmental unit was certified to receive under section 
 66.32  273.1398 in calendar year 1997 before any reductions for tax 
 66.33  increment financing aid under section 273.1399, subdivision 5; 
 66.34     (4) the amount of local performance aid the local 
 66.35  governmental unit was certified to receive in calendar year 1997 
 66.36  under section 477A.05; and 
 67.1      (5) the amount of any payments certified to the local 
 67.2   government unit in 1997 under sections 298.28 and 298.282. 
 67.3      If a governmental unit was not required to report under 
 67.4   section 275.62 for taxes levied in 1997, the commissioner shall 
 67.5   request information on levies used for debt from the local 
 67.6   governmental unit and adjust its levy limit base accordingly. 
 67.7      (b) The levy limit base for a local governmental unit for 
 67.8   taxes levied in 1998 is limited to equal to its adjusted levy 
 67.9   limit base in the previous year, subject to any adjustments 
 67.10  under section 275.72 and multiplied by the increase that would 
 67.11  have occurred under subdivision 3, clause (3), if that clause 
 67.12  had been in effect for taxes levied in 1997. 
 67.13     Sec. 15.  Minnesota Statutes 1997 Supplement, section 
 67.14  275.71, subdivision 3, is amended to read: 
 67.15     Subd. 3.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied 
 67.16  in 1997 and 1998, the adjusted levy limit is equal to the levy 
 67.17  limit base computed under subdivision 2 or section 275.72, 
 67.18  multiplied by: 
 67.19     (1) one plus a percentage equal to the percentage growth in 
 67.20  the implicit price deflator; and 
 67.21     (2) for all cities and for counties outside of the 
 67.22  seven-county metropolitan area, one plus a percentage equal to 
 67.23  the percentage increase in number of households, if any, for the 
 67.24  most recent 12-month period for which data is available; and 
 67.25     (3) for counties located in the seven-county metropolitan 
 67.26  area, one plus a percentage equal to the greater of the 
 67.27  percentage increase in the number of households in the county or 
 67.28  the percentage increase in the number of households in the 
 67.29  entire seven-county metropolitan area for the most recent 
 67.30  12-month period for which data is available; and 
 67.31     (3) one plus a percentage equal to the percentage increase 
 67.32  in the taxable market value of the jurisdiction due to new 
 67.33  construction of class 3 and class 5 property, as defined in 
 67.34  section 273.13, subdivisions 24 and 31, for the most recent year 
 67.35  for which data are available. 
 67.36     Sec. 16.  Minnesota Statutes 1997 Supplement, section 
 68.1   275.71, subdivision 4, is amended to read: 
 68.2      Subd. 4.  [PROPERTY TAX LEVY LIMIT.] For taxes levied in 
 68.3   1997 and 1998, the property tax levy limit for a local 
 68.4   governmental unit is equal to its adjusted levy limit base 
 68.5   determined under subdivision 3 plus any additional levy 
 68.6   authorized under section 275.73, which is levied against net tax 
 68.7   capacity, reduced by the sum of (1) the total amount of aids 
 68.8   that the local governmental unit is certified to receive under 
 68.9   sections 477A.011 to 477A.014, (2) homestead and agricultural 
 68.10  aids it is certified to receive under section 273.1398, (3) 
 68.11  local performance aid it is certified to receive under section 
 68.12  477A.05, and (4) taconite aids under sections 298.28 and 298.282 
 68.13  including any aid which was required to be placed in a special 
 68.14  fund for expenditure in the next succeeding year, and (5) flood 
 68.15  loss aid under section 273.1383. 
 68.16     Sec. 17.  Minnesota Statutes 1997 Supplement, section 
 68.17  287.08, is amended to read: 
 68.18     287.08 [TAX, HOW PAYABLE; RECEIPTS.] 
 68.19     (a) The tax imposed by sections 287.01 to 287.12 shall be 
 68.20  paid to the treasurer of the county in which the mortgaged land 
 68.21  or some part thereof is situated at or before the time of filing 
 68.22  the mortgage for record or registration.  The treasurer shall 
 68.23  endorse receipt on the mortgage, countersigned by the county 
 68.24  auditor, who shall charge the amount to the treasurer and such 
 68.25  receipt shall be recorded with the mortgage, and such receipt of 
 68.26  the record thereof shall be conclusive proof that the tax has 
 68.27  been paid to the amount therein stated and authorize any county 
 68.28  recorder to record the mortgage.  Its form, in substance, shall 
 68.29  be "registration tax hereon of ..................... dollars 
 68.30  paid."  If the mortgages be exempt from taxation the endorsement 
 68.31  shall be "exempt from registration tax," to be signed in either 
 68.32  case by the treasurer as such, and in case of payment to be 
 68.33  countersigned by the auditor.  In case the treasurer shall be 
 68.34  unable to determine whether a claim of exemption should be 
 68.35  allowed, the tax shall be paid as in the case of a taxable 
 68.36  mortgage.  
 69.1      (b) Upon written application of the taxpayer, the county 
 69.2   treasurer may refund in whole or in part any tax which has been 
 69.3   erroneously paid, or a person having paid a mortgage registry 
 69.4   tax amount may seek a refund of such tax, or other appropriate 
 69.5   relief, by bringing an action in tax court in the county in 
 69.6   which the tax was paid, within 60 days of the payment.  The 
 69.7   action is commenced by the serving of a petition for relief on 
 69.8   the county treasurer, and by filing a copy with the court.  The 
 69.9   county attorney shall defend the action.  The county treasurer 
 69.10  shall notify the treasurer of each county that has or would 
 69.11  receive a portion of the tax as paid.  
 69.12     (c) If the county treasurer determines a refund should be 
 69.13  paid, or if a refund is ordered, the county treasurer of each 
 69.14  county that actually received a portion of the tax shall 
 69.15  immediately pay a proportionate share of three percent of the 
 69.16  refund using any available county funds.  The county treasurer 
 69.17  of each county which received, or would have received, a portion 
 69.18  of the tax shall also pay their county's proportionate share of 
 69.19  the remaining 97 percent of the court-ordered refund on or 
 69.20  before the tenth day of the following month using solely the 
 69.21  mortgage registry tax funds that would be paid to the 
 69.22  commissioner of revenue on that date under section 287.12.  If 
 69.23  the funds on hand under this procedure are insufficient to fully 
 69.24  fund 97 percent of the court-ordered refund, the county 
 69.25  treasurer of the county in which the action was brought shall 
 69.26  file a claim with the commissioner of revenue under section 
 69.27  16A.48 for the remaining portion of 97 percent of the refund, 
 69.28  and shall pay over the remaining portion upon receipt of a 
 69.29  warrant from the state issued pursuant to the claim.  
 69.30     (d) When any such mortgage covers real property situate in 
 69.31  more than one county in this state the whole of such tax shall 
 69.32  be paid to the treasurer of the county where the mortgage is 
 69.33  first presented for record or registration, and the payment 
 69.34  shall be receipted and countersigned as above provided.  If the 
 69.35  principal debt or obligation secured by such a multiple county 
 69.36  mortgage exceeds $1,000,000, the tax shall be divided and paid 
 70.1   over by the county treasurer receiving the same, on or before 
 70.2   the tenth day of each month after receipt thereof, to the county 
 70.3   or counties entitled thereto in the ratio which the market value 
 70.4   of the real property covered by the mortgage in each county 
 70.5   bears to the market value of all the property described in the 
 70.6   mortgage.  In making such division and payment the county 
 70.7   treasurer shall send therewith a statement giving the 
 70.8   description of the property described in the mortgage and the 
 70.9   market value of the part thereof situate in each county.  For 
 70.10  the purpose aforesaid, the treasurer of any county may require 
 70.11  the treasurer of any other county to certify to the former the 
 70.12  market valuation of any tract of land in any such mortgage. 
 70.13     Sec. 18.  [365A.095] [DISSOLUTION.] 
 70.14     A petition signed by at least 75 percent of the property 
 70.15  owners in the territory of the subordinate service district 
 70.16  requesting the removal of the district may be presented to the 
 70.17  town board.  Within 30 days after the town board receives the 
 70.18  petition, the town clerk shall determine the validity of the 
 70.19  signatures on the petition.  If the requisite number of 
 70.20  signatures are certified as valid, the town board must hold a 
 70.21  public hearing on the petitioned matter.  Within 30 days after 
 70.22  the end of the hearing, the town board must decide whether to 
 70.23  discontinue the subordinate service district, continue as it is, 
 70.24  or take some other action with respect to it. 
 70.25     Sec. 19.  Minnesota Statutes 1996, section 462.396, 
 70.26  subdivision 2, is amended to read: 
 70.27     Subd. 2.  [BUDGET; HEARING; LEVY LIMITS.] On or before 
 70.28  August 20 each year, the commission shall submit its proposed 
 70.29  budget for the ensuing calendar year showing anticipated 
 70.30  receipts, disbursements and ad valorem tax levy with a written 
 70.31  notice of the time and place of the public hearing on the 
 70.32  proposed budget to each county auditor and municipal clerk 
 70.33  within the region and those town clerks who in advance have 
 70.34  requested a copy of the budget and notice of public hearing.  On 
 70.35  or before September 15 each year, the commission shall adopt, 
 70.36  after a public hearing held not later than September 15, a 
 71.1   budget covering its anticipated receipts and disbursements for 
 71.2   the ensuing year and shall decide upon the total amount 
 71.3   necessary to be raised from ad valorem tax levies to meet its 
 71.4   budget.  After adoption of the budget and no later than 
 71.5   September 15, the secretary of the commission shall certify to 
 71.6   the auditor of each county within the region the county share of 
 71.7   the tax, which shall be an amount bearing the same proportion to 
 71.8   the total levy agreed on by the commission as the net tax 
 71.9   capacity of the county bears to the net tax capacity of the 
 71.10  region.  (1) For taxes levied in 1990 and thereafter 1998, the 
 71.11  maximum amounts of levies made for the purposes of sections 
 71.12  462.381 to 462.398 are the following amounts, less the sum of 
 71.13  regional planning grants from the commissioner to that region:  
 71.14  for Region 1, $180,337; for Region 2, $150,000 $180,000; for 
 71.15  Region 3, $353,110; for Region 5, $195,865; for Region 6E, 
 71.16  $197,177; for Region 6W, $150,000 $180,000; for Region 
 71.17  7E, $158,653 $180,000; for Region 8, $206,107; for Region 9, 
 71.18  $343,572.  (2) For taxes levied in 1999 and thereafter, the 
 71.19  maximum amount that may be levied by each commission shall be 
 71.20  the amount authorized in clause (1), or 103 percent of the 
 71.21  amount levied in the previous year, whichever is greater.  The 
 71.22  auditor of each county in the region shall add the amount of any 
 71.23  levy made by the commission within the limits imposed by this 
 71.24  subdivision to other tax levies of the county for collection by 
 71.25  the county treasurer with other taxes.  When collected the 
 71.26  county treasurer shall make settlement of the taxes with the 
 71.27  commission in the same manner as other taxes are distributed to 
 71.28  political subdivisions. 
 71.29     Sec. 20.  Minnesota Statutes 1997 Supplement, section 
 71.30  462A.071, subdivision 2, is amended to read: 
 71.31     Subd. 2.  [APPLICATION.] (a) In order to qualify for 
 71.32  certification under subdivision 1, the owner or manager of the 
 71.33  property must annually apply to the agency.  The application 
 71.34  must be in the form prescribed by the agency, contain the 
 71.35  information required by the agency, and be submitted by the date 
 71.36  and time specified by the agency.  Beginning in 2000, the agency 
 72.1   shall adopt procedures and deadlines for making application to 
 72.2   permit certification of the units qualifying to the assessor by 
 72.3   no later than April 1 of the assessment year.  
 72.4      (b) Each application must include: 
 72.5      (1) the property tax identification number; 
 72.6      (2) the number, type, and size of units the applicant seeks 
 72.7   to qualify as low-income housing under class 4d; 
 72.8      (3) the number, type, and size of units in the property for 
 72.9   which the applicant is not seeking qualification, if any; 
 72.10     (4) a certification that the property has been inspected by 
 72.11  a qualified inspector within the past three years and meets the 
 72.12  minimum housing quality standards or is exempt from the 
 72.13  inspection requirement under subdivision 4; 
 72.14     (5) a statement indicating the building is qualifying units 
 72.15  in compliance with the income limits; 
 72.16     (6) an executed agreement to restrict rents meeting the 
 72.17  requirements specified by the agency or executed leases for the 
 72.18  units for which qualification as low-income housing as class 4d 
 72.19  under section 273.13 is sought and the rent schedule; and 
 72.20     (7) any additional information the agency deems appropriate 
 72.21  to require. 
 72.22     (c) The applicant must pay a per-unit application fee to be 
 72.23  set by the agency.  The application fee charged by the agency 
 72.24  must approximately equal the costs of processing and reviewing 
 72.25  the applications.  The fee must be deposited in the general 
 72.26  housing development fund. 
 72.27     Sec. 21.  Minnesota Statutes 1997 Supplement, section 
 72.28  462A.071, subdivision 4, is amended to read: 
 72.29     Subd. 4.  [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 
 72.30  qualify for taxation under class 4d under section 273.13, a unit 
 72.31  must meet both the housing maintenance code of the local unit of 
 72.32  government in which the unit is located, if such a code has been 
 72.33  adopted, and or the housing quality standards adopted by the 
 72.34  United States Department of Housing and Urban Development, if no 
 72.35  local housing maintenance code has been adopted. 
 72.36     (b) In order to meet the minimum housing quality standards, 
 73.1   a building must be inspected by an independent designated 
 73.2   inspector at least once every three years.  The inspector must 
 73.3   certify that the building complies with the minimum standards.  
 73.4   The property owner must pay the cost of the inspection. 
 73.5      (c) The agency may exempt from the inspection requirement 
 73.6   housing units that are financed by a governmental entity and 
 73.7   subject to regular inspection or other compliance checks with 
 73.8   regard to minimum housing quality.  Written certification must 
 73.9   be supplied to show that these exempt units have been inspected 
 73.10  within the last three years and comply with the requirements 
 73.11  under the public financing or local requirements. 
 73.12     Sec. 22.  Minnesota Statutes 1997 Supplement, section 
 73.13  462A.071, subdivision 8, is amended to read: 
 73.14     Subd. 8.  [PENALTIES.] (a) The penalties provided by this 
 73.15  subdivision apply to each unit that received class 4d taxation 
 73.16  for a year and failed to meet the requirements of section 
 73.17  273.126 and this section. 
 73.18     (b) If the owner or manager does not comply with the rent 
 73.19  restriction agreement, or does not comply with the income 
 73.20  restrictions or, minimum housing quality standards, or the 
 73.21  section 8 availability requirements, a penalty applies equal to 
 73.22  the increased taxes that would have been imposed if the property 
 73.23  unit had not been classified under class 4d for the year in 
 73.24  which restrictions were violated, plus an additional amount 
 73.25  equal to ten percent of the increased taxes.  The provisions of 
 73.26  section 279.03 apply to the amount of increased taxes that would 
 73.27  have been imposed if a unit had not been classified under class 
 73.28  4d for the year in which restrictions were violated. 
 73.29     (c) If the agency finds that the violations were 
 73.30  inadvertent and insubstantial, a penalty of $50 per unit per 
 73.31  year applies in lieu of the penalty specified under paragraph 
 73.32  (b).  In order to qualify under this paragraph, violations of 
 73.33  the minimum housing quality standards must be corrected within a 
 73.34  reasonable period of time and rent charged in excess of the 
 73.35  agreement must be rebated to the tenants. 
 73.36     (d) The agency may abate the penalties under this 
 74.1   subdivision for reasonable cause. 
 74.2      (e) Penalties assessed under paragraph (c) are payable to 
 74.3   the agency and must be deposited in the general housing 
 74.4   development fund.  If an owner or manager fails to timely pay a 
 74.5   penalty imposed under paragraph (c), the agency may choose to: 
 74.6      (1) impose the penalty under paragraph (b); or 
 74.7      (2) certify the penalty under paragraph (c) to the auditor 
 74.8   for collection as additional taxes. 
 74.9   The agency shall certify to the county auditor penalties 
 74.10  assessed under paragraph (b) and clause (2).  The auditor shall 
 74.11  impose and collect the certified penalties as additional taxes 
 74.12  which will be distributed to taxing districts in the same manner 
 74.13  as property taxes on the property. 
 74.14     Sec. 23.  Minnesota Statutes 1996, section 475.58, 
 74.15  subdivision 1, is amended to read: 
 74.16     Subdivision 1.  [APPROVAL BY ELECTORS; EXCEPTIONS.] 
 74.17  Obligations authorized by law or charter may be issued by any 
 74.18  municipality upon obtaining the approval of a majority of the 
 74.19  electors voting on the question of issuing the obligations, but 
 74.20  an election shall not be required to authorize obligations 
 74.21  issued: 
 74.22     (1) to pay any unpaid judgment against the municipality; 
 74.23     (2) for refunding obligations; 
 74.24     (3) for an improvement or improvement program, which 
 74.25  obligation is payable wholly or partly from the proceeds of 
 74.26  special assessments levied upon property specially benefited by 
 74.27  the improvement or by an improvement within the improvement 
 74.28  program, or of taxes levied upon the increased value of property 
 74.29  within a district for the development of which the improvement 
 74.30  is undertaken, including obligations which are the general 
 74.31  obligations of the municipality, if the municipality is entitled 
 74.32  to reimbursement in whole or in part from the proceeds of such 
 74.33  special assessments or taxes and not less than 20 percent of the 
 74.34  cost of the improvement or the improvement program is to be 
 74.35  assessed against benefited property or is to be paid from the 
 74.36  proceeds of federal grant funds or a combination thereof, or is 
 75.1   estimated to be received from such taxes within the district; 
 75.2      (4) payable wholly from the income of revenue producing 
 75.3   conveniences; 
 75.4      (5) under the provisions of a home rule charter which 
 75.5   permits the issuance of obligations of the municipality without 
 75.6   election; 
 75.7      (6) under the provisions of a law which permits the 
 75.8   issuance of obligations of a municipality without an election; 
 75.9      (7) to fund pension or retirement fund liabilities pursuant 
 75.10  to section 475.52, subdivision 6; 
 75.11     (8) under a capital improvement plan under section 373.40; 
 75.12  and 
 75.13     (9) to fund facilities as provided in subdivision 3; and 
 75.14     (10) under sections 469.1813 to 469.1815 (property tax 
 75.15  abatement authority bonds). 
 75.16     Sec. 24.  Minnesota Statutes 1997 Supplement, section 
 75.17  477A.011, subdivision 36, is amended to read: 
 75.18     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
 75.19  paragraphs (b), (c), and (d), "city aid base" means, for each 
 75.20  city, the sum of the local government aid and equalization aid 
 75.21  it was originally certified to receive in calendar year 1993 
 75.22  under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
 75.23  and 5, and the amount of disparity reduction aid it received in 
 75.24  calendar year 1993 under Minnesota Statutes 1992, section 
 75.25  273.1398, subdivision 3. 
 75.26     (b) For aids payable in 1996 and thereafter, a city that in 
 75.27  1992 or 1993 transferred an amount from governmental funds to 
 75.28  its sewer and water fund, which amount exceeded its net levy for 
 75.29  taxes payable in the year in which the transfer occurred, has a 
 75.30  "city aid base" equal to the sum of (i) its city aid base, as 
 75.31  calculated under paragraph (a), and (ii) one-half of the 
 75.32  difference between its city aid distribution under section 
 75.33  477A.013, subdivision 9, for aids payable in 1995 and its city 
 75.34  aid base for aids payable in 1995. 
 75.35     (c) The city aid base for any city with a population less 
 75.36  than 500 is increased by $40,000 for aids payable in calendar 
 76.1   year 1995 and thereafter, and the maximum amount of total aid it 
 76.2   may receive under section 477A.013, subdivision 9, paragraph 
 76.3   (c), is also increased by $40,000 for aids payable in calendar 
 76.4   year 1995 only, provided that: 
 76.5      (i) the average total tax capacity rate for taxes payable 
 76.6   in 1995 exceeds 200 percent; 
 76.7      (ii) the city portion of the tax capacity rate exceeds 100 
 76.8   percent; and 
 76.9      (iii) its city aid base is less than $60 per capita. 
 76.10     (d) The city aid base for a city is increased by $20,000 in 
 76.11  1998 and thereafter and the maximum amount of total aid it may 
 76.12  receive under section 477A.013, subdivision 9, paragraph (c), is 
 76.13  also increased by $20,000 in calendar year 1998 only, provided 
 76.14  that: 
 76.15     (i) the city has a population in 1994 of 2,500 or more; 
 76.16     (ii) the city is located in a county, outside of the 
 76.17  metropolitan area, which contains a city of the first class; 
 76.18     (iii) the city's net tax capacity used in calculating its 
 76.19  1996 aid under section 477A.013 is less than $400 per capita; 
 76.20  and 
 76.21     (iv) at least four percent of the total net tax capacity, 
 76.22  for taxes payable in 1996, of property located in the city is 
 76.23  classified as railroad property. 
 76.24     (e) The city aid base for a city is increased by $200,000 
 76.25  in 1999 and thereafter and the maximum amount of total aid it 
 76.26  may receive under section 477A.013, subdivision 9, paragraph 
 76.27  (c), is also increased by $200,000 in calendar year 1999 only, 
 76.28  provided that: 
 76.29     (i) the city was incorporated as a statutory city after 
 76.30  December 1, 1993; 
 76.31     (ii) its city aid base does not exceed $5,600; and 
 76.32     (iii) the city had a population in 1996 of 5,000 or more. 
 76.33     Sec. 25.  Minnesota Statutes 1996, section 477A.14, is 
 76.34  amended to read: 
 76.35     477A.14 [USE OF FUNDS.] 
 76.36     Forty percent of the total payment to the county shall be 
 77.1   deposited in the county general revenue fund to be used to 
 77.2   provide property tax levy reduction.  The remainder shall be 
 77.3   distributed by the county in the following priority:  
 77.4      (a) 37.5 cents for each acre of county-administered other 
 77.5   natural resources land shall be deposited in a resource 
 77.6   development fund to be created within the county treasury for 
 77.7   use in resource development, forest management, game and fish 
 77.8   habitat improvement, and recreational development and 
 77.9   maintenance of county-administered other natural resources 
 77.10  land.  Any county receiving less than $5,000 annually for the 
 77.11  resource development fund may elect to deposit that amount in 
 77.12  the county general revenue fund; 
 77.13     (b) From the funds remaining, within 30 days of receipt of 
 77.14  the payment to the county, the county treasurer shall pay each 
 77.15  organized township 30 cents per acre of acquired natural 
 77.16  resources land and 7.5 cents per acre of other natural resources 
 77.17  land located within its boundaries.  Payments for natural 
 77.18  resources lands not located in an organized township shall be 
 77.19  deposited in the county general revenue fund.  Payments to 
 77.20  counties and townships pursuant to this paragraph shall be used 
 77.21  to provide property tax levy reduction, except that of the 
 77.22  payments for natural resources lands not located in an organized 
 77.23  township, the county may allocate the amount determined to be 
 77.24  necessary for maintenance of roads in unorganized townships.  
 77.25  Provided that, if the total payment to the county pursuant to 
 77.26  section 477A.12 is not sufficient to fully fund the distribution 
 77.27  provided for in this clause, the amount available shall be 
 77.28  distributed to each township and the county general revenue fund 
 77.29  on a pro rata basis; and 
 77.30     (c) Any remaining funds shall be deposited in the county 
 77.31  general revenue fund.  Provided that, if the distribution to the 
 77.32  county general revenue fund exceeds $35,000, the excess shall be 
 77.33  used to provide property tax levy reduction.  
 77.34     Sec. 26.  Laws 1971, chapter 773, section 1, subdivision 2, 
 77.35  as amended by Laws 1974, chapter 351, section 5, Laws 1976, 
 77.36  chapter 234, section 7, Laws 1978, chapter 788, section 1, Laws 
 78.1   1981, chapter 369, section 1, Laws 1983, chapter 302, section 1, 
 78.2   Laws 1988, chapter 513, section 1, and Laws 1992, chapter 511, 
 78.3   article 9, section 23, is amended to read: 
 78.4      Subd. 2.  For each of the years through 1998 2003, the city 
 78.5   of St. Paul is authorized to issue bonds in the aggregate 
 78.6   principal amount of $8,000,000 $15,000,000 for each year; or in 
 78.7   an amount equal to one-fourth of one percent of the assessors 
 78.8   estimated market value of taxable property in St. Paul, 
 78.9   whichever is greater, provided that no more than 
 78.10  $8,000,000 $15,000,000 of bonds is authorized to be issued in 
 78.11  any year, unless St. Paul's local general obligation debt as 
 78.12  defined in this section is less than six percent of market value 
 78.13  calculated as of December 31 of the preceding year; but at no 
 78.14  time shall the aggregate principal amount of bonds authorized 
 78.15  exceed $15,700,000 in 1992, $16,600,000 in 1993, $16,600,000 in 
 78.16  1994, $16,600,000 in 1995, $17,500,000 in 1996, $17,500,000 in 
 78.17  1997, and $18,000,000 in 1998, $18,000,000 in 1999, $19,000,000 
 78.18  in 2000, $19,000,000 in 2001, $19,500,000 in 2002, and 
 78.19  $20,000,000 in 2003. 
 78.20     Sec. 27.  Laws 1971, chapter 773, section 1, as amended by 
 78.21  Laws 1974, chapter 351, section 5, subdivision 1, Laws 1976, 
 78.22  chapter 234, section 1, Laws 1978, chapter 788, section 1, Laws 
 78.23  1981, chapter 369, section 1, and Laws 1983, chapter 302, 
 78.24  section 1, is amended to read:  
 78.25     Section 1.  [ST. PAUL, CITY OF; CAPITAL IMPROVEMENT 
 78.26  PROGRAM.] 
 78.27     Subdivision 1.  Notwithstanding any provision of the 
 78.28  charter of the city of St. Paul, the council of said city shall 
 78.29  have power by a resolution adopted by five affirmative votes of 
 78.30  all its members to authorize the issuance and sale of general 
 78.31  obligation bonds of the city in the years stated and in the 
 78.32  aggregate annual amounts not to exceed the limits prescribed in 
 78.33  subdivision 2 of this section for the payment of which the full 
 78.34  faith and credit of the city is irrevocably pledged. 
 78.35     Subd. 2.  For each of the years 1983, 1984, 1985, 1986, 
 78.36  1987, and 1988 the city of St. Paul is authorized to issue bonds 
 79.1   in the aggregate principal amount of $8,000,000 for each year; 
 79.2   or in an amount equal to one-fourth of one percent of the 
 79.3   assessors estimated market value of taxable property in St. 
 79.4   Paul, whichever is greater, provided that no more than 
 79.5   $8,000,000 of bonds is authorized to be issued in any year, 
 79.6   unless St. Paul's local general obligation debt as defined in 
 79.7   this section is less than six percent of market value calculated 
 79.8   as of December 31 of the preceding year; but at no time shall 
 79.9   the aggregate principal amount of bonds authorized exceed 
 79.10  $9,000,000 in 1983, $9,500,000 in 1984, $10,100,000 in 1985, 
 79.11  $10,700,000 in 1986, $11,300,000 in 1987, and $12,000,000 in 
 79.12  1988.  
 79.13     Subd. 3.  For purposes of this section, St. Paul's general 
 79.14  obligation debt shall consist of the principal amount of all 
 79.15  outstanding bonds of (1) the city of St. Paul, the housing and 
 79.16  redevelopment authority of St. Paul, the civic center authority 
 79.17  of St. Paul, and the port authority of St. Paul, for which the 
 79.18  full faith and credit of the city or any of the foregoing 
 79.19  authorities has been pledged; (2) Independent School District 
 79.20  625, for which the full faith and credit of the district has 
 79.21  been pledged; and (3) the county of Ramsey, for which the full 
 79.22  faith and credit of the county has been pledged, reduced by an 
 79.23  amount equal to the principal amount of the outstanding bonds 
 79.24  multiplied by a figure, the numerator of which is equal to the 
 79.25  assessed value net tax capacity of property within the county 
 79.26  outside of the city of St. Paul and the denominator of which is 
 79.27  equal to the assessed value net tax capacity of the county.  
 79.28     There shall be deducted before making the foregoing 
 79.29  computations the outstanding principal amount of all refunded 
 79.30  bonds, all tax or aid anticipation certificates of indebtedness 
 79.31  of the city, the authorities, the school district and the county 
 79.32  for which the full faith and credit of the bodies has been 
 79.33  pledged and all tax increment financed bonds which have not 
 79.34  used, for the prior three consecutive years, general tax levies 
 79.35  or capitalized interest to support annual principal and interest 
 79.36  payments. 
 80.1      Sec. 28.  Laws 1971, chapter 773, section 2, as amended by 
 80.2   Laws 1978, chapter 788, section 2, Laws 1983, chapter 302, 
 80.3   section 2, Laws 1988, chapter 513, section 2, and Laws 1992, 
 80.4   chapter 511, article 9, section 24, is amended to read: 
 80.5      Sec. 2.  The proceeds of all bonds issued pursuant to 
 80.6   section 1 hereof shall be used exclusively for the acquisition, 
 80.7   construction, and repair of capital improvements and, commencing 
 80.8   in the year 1992 and notwithstanding any provision in Laws 1978, 
 80.9   chapter 788, section 5, as amended, for redevelopment project 
 80.10  activities as defined in Minnesota Statutes, section 469.002, 
 80.11  subdivision 14, in accordance with Minnesota Statutes, section 
 80.12  469.041, clause (6).  The amount of proceeds of bonds authorized 
 80.13  by section 1 used for redevelopment project activities shall not 
 80.14  exceed $655,000 in 1992, $690,000 in 1993, $690,000 in 1994, 
 80.15  $690,000 in 1995, $700,000 in 1996, $700,000 in 1997, 
 80.16  and $725,000 in 1998 or any later year. 
 80.17     None of the proceeds of any bonds so issued shall be 
 80.18  expended except upon projects which have been reviewed, and have 
 80.19  received a priority rating, from a capital improvements 
 80.20  committee consisting of 18 members, of whom a majority shall not 
 80.21  hold any paid office or position under the city of St. Paul.  
 80.22  The members shall be appointed by the mayor, with at least four 
 80.23  members from each Minnesota senate district located entirely 
 80.24  within the city and at least two members from each senate 
 80.25  district located partly within the city.  Prior to making an 
 80.26  appointment to a vacancy on the capital improvement budget 
 80.27  committee, the mayor shall consult the legislators of the senate 
 80.28  district in which the vacancy occurs.  The priorities and 
 80.29  recommendations of the committee shall be purely advisory, and 
 80.30  no buyer of any bonds shall be required to see to the 
 80.31  application of the proceeds. 
 80.32     Sec. 29.  Laws 1984, chapter 380, section 1, as amended by 
 80.33  Laws 1994, chapter 505, article 6, section 27, is amended to 
 80.34  read: 
 80.35     Section 1.  [TAX.] 
 80.36     The Anoka county board may levy a tax on of not more than 
 81.1   .01 percent of the taxable market value of taxable 
 81.2   property located within the county outside of excluding any 
 81.3   taxable property taxed by any city in which is situated a for 
 81.4   the support of any free public library, to acquire, better, and 
 81.5   construct county library buildings and to pay principal and 
 81.6   interest on bonds issued for that purpose.  The tax shall be 
 81.7   disregarded in the calculation of levies or limits on levies 
 81.8   provided by Minnesota Statutes, section 373.40, or other law.  
 81.9      Sec. 30.  Laws 1984, chapter 380, section 2, is amended to 
 81.10  read: 
 81.11     Sec. 2.  [AUTHORIZATION.] 
 81.12     The Anoka county board may, by resolution adopted by a 
 81.13  four-sevenths vote, issue and sell general obligation bonds of 
 81.14  the county in the amount of $9,000,000 in the manner provided in 
 81.15  Minnesota Statutes, chapter 475, to acquire, better, and 
 81.16  construct county library buildings.  The total amount of bonds 
 81.17  outstanding at any time shall not exceed $5,000,000.  The county 
 81.18  board, prior to the issuance of any bonds authorized by section 
 81.19  1 and after adopting the resolution as provided above in this 
 81.20  section, shall adopt a resolution by majority vote of the county 
 81.21  board stating the amount, purpose and, in general, the security 
 81.22  to be provided for the bonds, and shall publish the resolution 
 81.23  once each week for two consecutive weeks in the medium of 
 81.24  official and legal publication of the county.  The bonds may be 
 81.25  issued without the submission of the question of their issuance 
 81.26  to the voters of the county library district unless within 21 
 81.27  days after the second publication of the resolution a petition 
 81.28  requesting a referendum, signed by at least ten percent of the 
 81.29  registered voters of the county, is filed with the county 
 81.30  auditor.  If a petition is filed, bonds may be issued unless 
 81.31  disapproved by a majority of the voters of the county library 
 81.32  district, voting on the question of their issuance at a regular 
 81.33  or special election.  The bonds shall not be subject to the 
 81.34  requirements of Minnesota Statutes, sections 475.57 to 475.59.  
 81.35  The maturity years and amounts and interest rates of each series 
 81.36  of bonds shall be fixed so that the maximum amount of principal 
 82.1   and interest to become due in any year, on the bonds of that 
 82.2   series and of all outstanding series issued by or for the 
 82.3   purposes of libraries, shall not exceed an amount equal to 
 82.4   three-fourths of a mill times the assessed value the lesser of 
 82.5   (i) .01 percent of the taxable market value of all taxable 
 82.6   property in the county, which was not excluding any taxable 
 82.7   property taxed in 1981 by any city for the support of any free 
 82.8   public library, as last finally equalized before the issuance of 
 82.9   the series or (ii) $1,250,000.  When the tax levy authorized in 
 82.10  this sections is collected, it shall be appropriated and 
 82.11  credited to a debt service fund for the bonds.  The tax levy for 
 82.12  the debt service fund under Minnesota Statutes, section 475.61 
 82.13  shall be reduced by the amount available or reasonably 
 82.14  anticipated to be available in the fund to make payments 
 82.15  otherwise payable from the levy pursuant to section 475.61. 
 82.16     Sec. 31.  Laws 1992, chapter 511, article 2, section 52, as 
 82.17  amended by Laws 1997, chapter 231, article 2, section 50, is 
 82.18  amended to read: 
 82.19     Sec. 52.  [WATERSHED DISTRICT LEVIES.] 
 82.20     (a) The Nine Mile Creek watershed district, the 
 82.21  Riley-Purgatory Bluff Creek watershed district, the Minnehaha 
 82.22  Creek watershed district, the Coon Creek watershed district, and 
 82.23  the Lower Minnesota River watershed district may levy in 1992 
 82.24  and thereafter a tax not to exceed $200,000 on property within 
 82.25  the district for the administrative fund.  The levy authorized 
 82.26  under this section is in lieu of section 103D.905, subdivision 
 82.27  3.  The administrative fund shall be used for the purposes 
 82.28  contained in Minnesota Statutes, section 103D.905, subdivision 
 82.29  3.  The board of managers shall make the levy for the 
 82.30  administrative fund in accordance with Minnesota Statutes, 
 82.31  section 103D.915. 
 82.32     (b) The Wild Rice watershed district may levy, for taxes 
 82.33  payable in 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 
 82.34  and 2002, an ad valorem tax not to exceed $200,000 on property 
 82.35  within the district for the administrative fund.  The additional 
 82.36  $75,000 above the amount authorized in Minnesota Statutes, 
 83.1   section 103D.905, subdivision 3, must be used for (1) costs 
 83.2   incurred in connection with the development and maintenance of 
 83.3   cost-sharing projects with the United States Army Corps of 
 83.4   Engineers or (2) administrative costs associated with 1997 flood 
 83.5   mitigation projects.  The board of managers shall make the levy 
 83.6   for the administrative fund in accordance with Minnesota 
 83.7   Statutes, section 103D.915. 
 83.8      Sec. 32.  Laws 1994, chapter 587, article 11, is amended by 
 83.9   adding a section to read: 
 83.10     Sec. 5a.  [POLITICAL SUBDIVISION.] 
 83.11     For purposes of Minnesota Statutes, section 275.066, the 
 83.12  Chisholm/Hibbing airport authority is a political subdivision of 
 83.13  the state of Minnesota. 
 83.14     Sec. 33.  Laws 1997, chapter 231, article 2, section 63, 
 83.15  subdivision 1, is amended to read: 
 83.16     Subdivision 1.  [IMPROVEMENTS MADE TO CERTAIN APARTMENTS.] 
 83.17  (a) Notwithstanding any other provisions to the contrary, the 
 83.18  market value increase resulting from improvements made after the 
 83.19  effective date of this act and prior to January 1, 1999 2000, to 
 83.20  qualifying property located in the city of Brooklyn Center, 
 83.21  Richfield, or St. Louis Park shall be excluded for assessment 
 83.22  purposes under the conditions provided in this subdivision.  
 83.23     (b) "Qualifying property" means property that meets all of 
 83.24  the following criteria: 
 83.25     (1) the building is at least 30 years old at the time of 
 83.26  the improvements; 
 83.27     (2) the building is residential real estate of four or more 
 83.28  units and is classified under Minnesota Statutes, section 
 83.29  273.13, subdivision 25, as class 4a, 4c, or 4d property; and 
 83.30     (3) the total cost of the qualifying improvements exceeds 
 83.31  $5,000 $2,500 per unit. 
 83.32     (c) A building permit must have been issued prior to the 
 83.33  commencement of the improvements.  Only improvements to the 
 83.34  residential structure and garages qualify under this 
 83.35  subdivision.  The assessor shall require an application, 
 83.36  including, if unknown by the assessor, documentation of the age 
 84.1   of the building from the owner.  The application may be filed 
 84.2   subsequent to the date of the building permit provided that the 
 84.3   application is filed prior to the next assessment date. 
 84.4      (d) If the property qualifies under this subdivision, the 
 84.5   assessor shall note the qualifying value of the improvements on 
 84.6   the property's record and that amount shall be subtracted from 
 84.7   the qualifying property's market value for the five assessment 
 84.8   years immediately following the year in which the improvements 
 84.9   were completed, at which time the assessor shall determine the 
 84.10  property's estimated market value, and 20 percent of the 
 84.11  qualifying value shall be added back in each of the next five 
 84.12  subsequent assessment years.  The assessor may require from the 
 84.13  owner any documentation necessary to verify that the cost of 
 84.14  improvements exceed the $5,000 $2,500 per unit minimum.  
 84.15     Sec. 34.  Laws 1997, chapter 231, article 2, section 68, 
 84.16  subdivision 3, is amended to read: 
 84.17     Subd. 3.  [MORATORIUM ON CHANGES IN ASSESSMENT PRACTICES.] 
 84.18  (a) An assessor may not change the current practices or policies 
 84.19  used generally in assessing elderly assisted living facilities. 
 84.20     (b) An assessor may not change the assessment of an 
 84.21  existing elderly assisted living facility, unless the change is 
 84.22  made as a result of a change in ownership, occupancy, or use of 
 84.23  the facility.  This paragraph does not apply to: 
 84.24     (1) a facility that was constructed during calendar year 
 84.25  1997 or 1998; 
 84.26     (2) a facility that was converted to an elderly assisted 
 84.27  living facility during calendar year 1997 or 1998; or 
 84.28     (3) a change in market value. 
 84.29     (c) This subdivision expires and no longer applies on the 
 84.30  earlier of: 
 84.31     (1) the enactment of legislation establishing criteria for 
 84.32  the property taxation of elderly assisted living facilities; or 
 84.33     (2) final adjournment of the 1998 legislature 1999 regular 
 84.34  legislative session. 
 84.35     Sec. 35.  Laws 1997, Second Special Session chapter 2, 
 84.36  section 33, is amended to read: 
 85.1      Sec. 33.  [EFFECTIVE DATE.] 
 85.2      Sections 1 to 19, 21, 22, and 24 to 32 are effective on the 
 85.3   day following final enactment.  Section 20 is effective for 
 85.4   taxes levied in 1997, payable in 1998, and thereafter, in each 
 85.5   of the counties of Polk, Clay, Kittson, Marshall, Norman, and 
 85.6   Wilkin, the day following compliance with Minnesota Statutes, 
 85.7   section 645.021, subdivision 3, by that county.  Section 23 is 
 85.8   effective retroactive to April 1, 1997. 
 85.9      Sec. 36.  [QUALIFIED PROPERTY.] 
 85.10     A contiguous property located within a county adjacent to a 
 85.11  county containing a city of the first class and within the 
 85.12  metropolitan area as defined in Minnesota Statutes, section 
 85.13  473.121, shall be valued and classified under sections 37 and 
 85.14  38, provided it meets the following conditions: 
 85.15     (1) the property does not exceed 60 acres; 
 85.16     (2) the property includes a sculpture garden open to the 
 85.17  public, either free of charge or for a nominal admission fee; 
 85.18     (3) the property includes a system of internal roads and 
 85.19  paths for pedestrian use and an amphitheater for live artistic 
 85.20  performances; 
 85.21     (4) the property is used for a summer youth art camp; 
 85.22     (5) the property is used for seminars for aspiring and 
 85.23  professional artists; 
 85.24     (6) the property includes the homestead of the owner; and 
 85.25     (7) the property has been owned by the owner for at least 
 85.26  40 years. 
 85.27     Sec. 37.  [CLASSIFICATION.] 
 85.28     Notwithstanding any law to the contrary, a property 
 85.29  qualifying under section 36 shall be classified as class 2a 
 85.30  property under Minnesota Statutes, section 273.13, subdivision 
 85.31  23. 
 85.32     Sec. 38.  [VALUATION.] 
 85.33     Notwithstanding Minnesota Statutes, section 273.11, 
 85.34  subdivision 1, the land qualifying under section 36 shall be 
 85.35  valued as if it were agricultural property, using a per acre 
 85.36  valuation equal to the average per acre valuation of similar 
 86.1   agricultural property within the county. 
 86.2      Sec. 39.  [SPECIAL ASSESSMENT DEFERRAL AUTHORIZED.] 
 86.3      Notwithstanding Minnesota Statutes, chapter 429, a city may 
 86.4   defer the payment of any special assessment levied against a 
 86.5   property qualifying under section 36 as determined by the city. 
 86.6      Sec. 40.  [TRANSFER OF PROPERTY; PAYMENT OF DEFERRED 
 86.7   TAXES.] 
 86.8      Subdivision 1.  [ADDITIONAL TAX.] The assessor shall make a 
 86.9   separate determination of the market value and net tax capacity 
 86.10  of a property qualifying under section 36 as if sections 37 and 
 86.11  38 did not apply.  The tax based upon the appropriate local tax 
 86.12  rate applicable to such property in the taxing district shall be 
 86.13  recorded on the property assessment records. 
 86.14     Subd. 2.  [RECAPTURE.] (a) Property or any portion thereof 
 86.15  qualifying under section 36 is subject to additional taxes if (1)
 86.16  ownership of the property is transferred to anyone other than 
 86.17  the spouse or child of the current owner, or (2) the current 
 86.18  owner or the spouse or child of the current owner has not 
 86.19  conveyed or entered into a contract before July 1, 2002, to 
 86.20  convey the property to a nonprofit foundation or corporation 
 86.21  created to own and operate the property as an art park providing 
 86.22  the services included in section 36, clauses (2) to (5).  
 86.23     (b) The additional taxes are imposed at the earlier of (1) 
 86.24  the year following transfer of ownership to anyone other than 
 86.25  the spouse or child of the current owner or a nonprofit 
 86.26  foundation or corporation created to own and operate the 
 86.27  property as an art park, or (2) for taxes payable in 2003.  The 
 86.28  additional taxes are equal to the difference between the taxes 
 86.29  determined under sections 37 and 38 and the amount determined 
 86.30  under subdivision 1 for all years that the property qualified 
 86.31  under section 36.  The additional taxes must be extended against 
 86.32  the property on the tax list for the current year; provided, 
 86.33  however, that no interest or penalties may be levied on the 
 86.34  additional taxes if timely paid. 
 86.35     Subd. 3.  [CURRENT OWNER.] For purposes of this section, 
 86.36  "current owner" means the owner of property qualifying under 
 87.1   section 36 on the date of final enactment of this act or that 
 87.2   owner's spouse or child.  
 87.3      Subd. 4.  [NONPROFIT FOUNDATION OR CORPORATION.] For 
 87.4   purposes of this act, "nonprofit foundation or corporation" 
 87.5   means a nonprofit entity created to own and operate the property 
 87.6   as an art park providing the services included in section 36, 
 87.7   clauses (2) to (5). 
 87.8      Sec. 41.  [CITY OF RED WING; LEVY LIMITS.] 
 87.9      Subdivision 1.  [LEVY LIMIT BASE INCREASE.] The levy limit 
 87.10  base of the city of Red Wing for taxes levied in 1998 under 
 87.11  Minnesota Statutes, section 275.71, subdivision 2, paragraph 
 87.12  (b), is increased by $477,677. 
 87.13     Subd. 2.  [EFFECTIVE DATE.] Upon compliance by the 
 87.14  governing body of the city of Red Wing with Minnesota Statutes, 
 87.15  section 645.021, subdivision 3, subdivision 1 is effective for 
 87.16  taxes levied in 1998, payable in 1999. 
 87.17     Sec. 42.  [WAITE PARK; LEVY LIMIT ADJUSTMENT.] 
 87.18     Subdivision 1.  [ADJUSTED LEVY LIMIT BASE.] For taxes 
 87.19  levied in 1998 only, the adjusted levy limit base defined in 
 87.20  Minnesota Statutes, section 275.71, subdivision 3, for the city 
 87.21  of Waite Park, is increased by $117,000. 
 87.22     Subd. 2.  [EFFECTIVE DATE.] Upon compliance by the 
 87.23  governing body of the city of Waite Park with Minnesota 
 87.24  Statutes, section 645.021, subdivision 3, subdivision 1 is 
 87.25  effective for taxes levied in 1998, payable in 1999. 
 87.26     Sec. 43.  [JENSEN-NOPEMING SPECIAL DISTRICT.] 
 87.27     Subdivision 1.  [SPECIAL DISTRICT MAY BE ESTABLISHED.] The 
 87.28  counties of Carlton and St. Louis may establish the 
 87.29  Jensen-Nopeming Special District with authority to levy a 
 87.30  property tax not greater than $200,000 annually for the capital 
 87.31  costs of the Chris Jensen Nursing Home and the Nopeming Nursing 
 87.32  Home.  The tax may be levied on taxable property in the 
 87.33  territory described in Minnesota Statutes, section 458D.02, 
 87.34  subdivision 2.  The district shall be governed by a board 
 87.35  composed of those members of the St. Louis county board who 
 87.36  represent territory subject to taxation by the district and two 
 88.1   members of the Carlton county board elected by the Carlton 
 88.2   county board to serve terms provided by the board.  The proceeds 
 88.3   of the tax may be used only for capital costs of the nursing 
 88.4   homes.  As provided by Minnesota Statutes, chapter 475, debt may 
 88.5   be incurred by the district for capital costs of the nursing 
 88.6   home and the proceeds of the tax may be pledged to secure the 
 88.7   debt.  The district may enter into appropriate agreements with 
 88.8   either county to facilitate the incurrence of debt or otherwise 
 88.9   discharge its duties under this section. 
 88.10     By April 15, 1999, the St. Louis county board shall 
 88.11  complete a study examining the long-term profitability of Chris 
 88.12  Jensen and Nopeming nursing homes.  Upon completion of the 
 88.13  study, the board must adopt a plan to eliminate any future 
 88.14  property tax revenue dedicated to operating costs of the two 
 88.15  facilities. 
 88.16     Subd. 2.  [LOCAL APPROVAL.] Subdivision 1 is effective the 
 88.17  day after the county boards of Carlton and St. Louis counties 
 88.18  comply with the provisions of Minnesota Statutes, section 
 88.19  645.021, subdivision 3. 
 88.20     Sec. 44.  [CITY OF MINNEAPOLIS; TRANSIT ZONE TAX.] 
 88.21     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 88.22  section, the following terms have the meanings given. 
 88.23     (b) "City" means the city of Minneapolis. 
 88.24     (c) "Downtown taxing district" means the geographic area in 
 88.25  which the city may impose the tax under Laws 1986, chapter 396, 
 88.26  section 4, as amended by Laws 1986, chapter 400, section 44. 
 88.27     (d) "Transit zone tax capacity" means the reduction in net 
 88.28  tax capacity of transit zone property in the downtown taxing 
 88.29  district that result from the reduced class rate under the 
 88.30  provisions of Minnesota Statutes, section 273.13, subdivision 
 88.31  23, paragraph (c), or a successor provision.  Transit zone tax 
 88.32  capacity is determined without regard to captured or original 
 88.33  net tax capacity under Minnesota Statutes, section 469.177, or 
 88.34  to the distribution or contribution value under Minnesota 
 88.35  Statutes, section 473F.08. 
 88.36     Subd. 2.  [AUTHORITY TO IMPOSE.] (a) The city may, by 
 89.1   ordinance, impose a tax on transit zone tax capacity within the 
 89.2   downtown taxing district. 
 89.3      (b) The rate of the tax equals the sum of the ad valorem 
 89.4   property tax rates imposed by the county, city, school district, 
 89.5   and special taxing districts in the city that apply for the 
 89.6   taxable year. 
 89.7      (c) The tax equals the rate multiplied by the transit zone 
 89.8   tax capacity. 
 89.9      Subd. 3.  [COLLECTION AND ADMINISTRATION.] Any tax imposed 
 89.10  under this section is payable at the same time and in the same 
 89.11  manner and must be collected and imposed as provided by general 
 89.12  law for ad valorem taxes.  Any tax not paid by the due date is 
 89.13  subject to the same penalty and interest as ad valorem taxes not 
 89.14  paid by the due date. 
 89.15     Subd. 4.  [USE OF REVENUES.] The revenues from the tax 
 89.16  imposed under this section must be deposited in a separate 
 89.17  account on the city's books and records.  Money in the account 
 89.18  may only be used in the downtown taxing district to provide 
 89.19  transit services or transit related projects that directly 
 89.20  increase the feasibility of existing or proposed transit system 
 89.21  services or improvements. 
 89.22     Subd. 5.  [EFFECTIVE DATE.] This section is effective the 
 89.23  day following final enactment and applies to the city of 
 89.24  Minneapolis under the provisions of Minnesota Statutes, section 
 89.25  645.023. 
 89.26     Sec. 45.  [APPROPRIATION.] 
 89.27     $50,000 is appropriated from the general fund for fiscal 
 89.28  year 1999 to the commissioner of revenue to make a grant to the 
 89.29  research foundation of the association of Minnesota counties.  
 89.30  The grant must be used to produce training videos and supporting 
 89.31  materials to educate the general public about how the Minnesota 
 89.32  property tax system works.  The grant must include as a 
 89.33  condition that copies of the videos and materials will be made 
 89.34  available at no cost to each Minnesota county government for 
 89.35  distribution to local television and other outlets and to the 
 89.36  Minnesota extension services.  Copies must also be provided at 
 90.1   no cost to the department of revenue. 
 90.2      Sec. 46.  [REPEALER.] 
 90.3      Subdivision 1.  [TOWN SUBORDINATE SERVICE 
 90.4   DISTRICT.] Minnesota Statutes 1996, section 365A.09, is repealed.
 90.5      Subd. 2.  [EDUCATION FINANCE ACT OF 1992.] Minnesota 
 90.6   Statutes 1996, sections 124A.697; 124A.698; 124A.70; 124A.71; 
 90.7   124A.711, subdivision 1; 124A.72; and 124A.73; and Minnesota 
 90.8   Statutes 1997 Supplement, section 124A.711, subdivision 2, are 
 90.9   repealed. 
 90.10     Subd. 3.  [GENERAL EDUCATION REPEALER.] Laws 1992, chapter 
 90.11  499, article 7, section 31, is repealed. 
 90.12     Sec. 47.  [EFFECTIVE DATE.] 
 90.13     Sections 1, clause 6(b), and 2 are effective for taxes 
 90.14  payable in 2000 and thereafter.  Section 1, clause (30), is 
 90.15  effective beginning with the 1998 assessment for taxes payable 
 90.16  in 1999, except that for the 1998 assessment, the filing 
 90.17  requirement under section 272.025, subdivision 3, shall be 60 
 90.18  days after enactment of this act.  Sections 3 and 4 are 
 90.19  effective for real estate sales and transfers occurring on or 
 90.20  after July 1, 1998.  Section 5, paragraph (d), clause (5), is 
 90.21  effective for the 1998 assessment and thereafter.  Section 5, 
 90.22  paragraphs (a), clause (3), and (b), and sections 9 and 20 to 22 
 90.23  are effective beginning for property taxes assessed in 1998 and 
 90.24  payable in 1999.  Sections 6, 11, and 19 are effective for taxes 
 90.25  levied in 1998, payable in 1999, and thereafter.  Section 8 is 
 90.26  effective beginning with assessment year 1998 for aids payable 
 90.27  in 1999.  Section 10 is effective for public hearings held in 
 90.28  1998 and thereafter.  Sections 12, 14, 15, and 16 are effective 
 90.29  for taxes levied in 1998, payable in 1999.  Section 13 is 
 90.30  effective for taxes payable in 1998 and 1999.  Section 17 is 
 90.31  effective for mortgages recorded or registered on or after July 
 90.32  1, 1998.  Section 23 confirms the original intent of the 
 90.33  legislature in enacting the abatement law and is effective 
 90.34  retroactively to the same time Minnesota Statutes, sections 
 90.35  469.1813 to 469.1815, became effective.  Section 24 is effective 
 90.36  for aids payable in 1999 and thereafter.  Section 25 is 
 91.1   effective for payments to counties after June 30, 1998.  
 91.2   Sections 26 to 28 are effective upon compliance by the governing 
 91.3   body of the city of St. Paul with Minnesota Statutes, section 
 91.4   645.021, subdivision 3.  Sections 29 and 30 are effective the 
 91.5   day after the chief clerical officer of Anoka county complies 
 91.6   with Minnesota Statutes, section 645.021, subdivision 3.  
 91.7   Section 31 is effective for taxes levied in 1997, payable in 
 91.8   1998, and thereafter.  Section 32 is effective for taxes payable 
 91.9   in 1998 and thereafter.  Section 33 is effective for each of the 
 91.10  cities of Brooklyn Center, Richfield, and St. Louis Park upon 
 91.11  compliance with Minnesota Statutes, section 645.021, subdivision 
 91.12  3, by the governing body of that city.  Sections 36 to 40 are 
 91.13  effective beginning with taxes payable in 1998 and ending with 
 91.14  taxes payable in 2003.  Section 46, subdivision 1, is effective 
 91.15  the day following final enactment.  Section 46, subdivisions 2 
 91.16  and 3, are effective July 1, 1998. 
 91.17                             ARTICLE 4
 91.18               SENIOR CITIZENS' PROPERTY TAX DEFERRAL
 91.19     Section 1.  Minnesota Statutes 1997 Supplement, section 
 91.20  290B.03, subdivision 1, is amended to read: 
 91.21     Subdivision 1.  [PROGRAM QUALIFICATIONS.] The 
 91.22  qualifications for the senior citizens' property tax deferral 
 91.23  program are as follows: 
 91.24     (1) the property must be owned and occupied as a homestead 
 91.25  by a person 65 years of age or older.  In the case of a married 
 91.26  couple, both of the spouses must be at least 65 years old at the 
 91.27  time the first property tax deferral is granted, regardless of 
 91.28  whether the property is titled in the name of one spouse or both 
 91.29  spouses, or titled in another way that permits the property to 
 91.30  have homestead status; 
 91.31     (2) the total household income of the qualifying 
 91.32  homeowners, as defined in section 290A.03, subdivision 5, for 
 91.33  the calendar year preceding the year of the initial application 
 91.34  may not exceed $30,000 $40,000; 
 91.35     (3) the homestead must have been owned and occupied as the 
 91.36  homestead of at least one of the qualifying homeowners for at 
 92.1   least 15 years prior to the year the initial application is 
 92.2   filed; 
 92.3      (4) there are no delinquent property taxes, penalties, or 
 92.4   interest on the homesteaded property; 
 92.5      (5) there are no delinquent special assessments on the 
 92.6   homesteaded property; 
 92.7      (6) there are no state or federal tax liens or judgment 
 92.8   liens on the homesteaded property; 
 92.9      (7) there are no mortgages or other liens on the property 
 92.10  that secure future advances, except for those subject to credit 
 92.11  limits that result in compliance with clause (8); and 
 92.12     (8) the total unpaid balances of debts secured by mortgages 
 92.13  and other liens on the property, including unpaid special 
 92.14  assessments, but not including property taxes payable during the 
 92.15  year, does not exceed 30 percent of the assessor's estimated 
 92.16  market value for the year. 
 92.17     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
 92.18  290B.04, subdivision 1, is amended to read: 
 92.19     Subdivision 1.  [INITIAL APPLICATION.] A taxpayer meeting 
 92.20  the program qualifications under section 290B.03 may apply to 
 92.21  the commissioner of revenue for the deferral of taxes.  
 92.22  Applications are due on or before July 1 for deferral of any of 
 92.23  the following year's property taxes.  A taxpayer may apply in 
 92.24  the year in which the taxpayer becomes 65 years old, provided 
 92.25  that no deferral of property taxes will be made until the 
 92.26  calendar year after the taxpayer becomes 65 years old.  The 
 92.27  application, which shall be prescribed by the commissioner of 
 92.28  revenue, shall include the following items and any other 
 92.29  information which the commissioner deems necessary: 
 92.30     (1) the name, address, and social security number of the 
 92.31  owner or owners; 
 92.32     (2) a copy of the property tax statement for the current 
 92.33  payable year for the homesteaded property; 
 92.34     (3) the initial year of ownership and occupancy as a 
 92.35  homestead; 
 92.36     (4) the owner's household income for the previous calendar 
 93.1   year; and 
 93.2      (5) information on any mortgage loans or other amounts 
 93.3   secured by mortgages or other liens against the property, for 
 93.4   which purpose the commissioner may require the applicant to 
 93.5   provide a copy of the mortgage note, the mortgage, or a 
 93.6   statement of the balance owing on the mortgage loan provided by 
 93.7   the mortgage holder.  The commissioner may require the 
 93.8   appropriate documents in connection with obtaining and 
 93.9   confirming information on unpaid amounts secured by other liens. 
 93.10     The application must state that program participation is 
 93.11  voluntary.  The application must also state that the deferred 
 93.12  amount depends directly on the applicant's household income, and 
 93.13  that program participation includes authorization for the 
 93.14  deferred amount for each year and the cumulative deferral, 
 93.15  penalty, and interest to appear on each year's property tax 
 93.16  statement as public data. 
 93.17     As a part of the initial application, the commissioner may 
 93.18  require the county recorder or the registrar of titles, 
 93.19  whichever is appropriate, of the county where the property is 
 93.20  located to certify that no mortgages and no lien notices are on 
 93.21  record against the property or the applicant as of 30 days prior 
 93.22  to the date of such certification; or, in the case where 
 93.23  mortgages or lien notices are on the record, the commissioner 
 93.24  may require the recorder or registrar to provide the date and 
 93.25  county document number of such mortgages or lien notices as a 
 93.26  part of the certification.  The commissioner may require other 
 93.27  related information from the recorder or registrar in order to 
 93.28  administer the provisions of chapter 290B. 
 93.29     The commissioner may use any information available to 
 93.30  determine or verify eligibility under this section. 
 93.31     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
 93.32  290B.04, subdivision 3, is amended to read: 
 93.33     Subd. 3.  [ANNUAL EXCESS-INCOME CERTIFICATION BY TAXPAYER.] 
 93.34  Annually on or before July 1, A taxpayer whose initial 
 93.35  application has been approved under subdivision 2, 
 93.36  shall complete the certification form and return it to notify 
 94.1   the commissioner of revenue in writing by July 1 if the 
 94.2   taxpayer's household income for the preceding calendar year 
 94.3   exceeded $40,000.  The certification must state whether or not 
 94.4   the taxpayer wishes to have property taxes deferred for the 
 94.5   following year provided the taxes exceed the maximum property 
 94.6   tax amount under section 290B.05.  If the taxpayer does wish to 
 94.7   have property taxes deferred, the certification must state the 
 94.8   homeowner's total household income for the previous calendar 
 94.9   year and any other information which the commissioner deems 
 94.10  necessary.  No property taxes may be deferred under chapter 290B 
 94.11  in any year following the year in which a program participant 
 94.12  filed or should have filed an excess-income certification under 
 94.13  this subdivision, unless the participant has filed a resumption 
 94.14  of eligibility certification as described in subdivision 4.  The 
 94.15  commissioner of revenue may use any information available to the 
 94.16  commissioner to determine or verify ineligibility under this 
 94.17  subdivision. 
 94.18     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
 94.19  290B.04, is amended by adding a subdivision to read: 
 94.20     Subd. 4.  [RESUMPTION OF ELIGIBILITY CERTIFICATION BY 
 94.21  TAXPAYER.] A taxpayer who has previously filed an excess-income 
 94.22  certification under subdivision 3 may resume program 
 94.23  participation if the taxpayer's household income for a 
 94.24  subsequent year is less than $40,000.  If the taxpayer chooses 
 94.25  to resume program participation, the taxpayer must notify the 
 94.26  commissioner of revenue in writing by July 1 of the year 
 94.27  following a calendar year in which the taxpayer's household 
 94.28  income is $40,000 or less.  The certification must state the 
 94.29  taxpayer's total household income for the previous calendar 
 94.30  year.  Once a taxpayer resumes participation in the program 
 94.31  under this subdivision, participation will continue until the 
 94.32  taxpayer files a subsequent excess-income certification under 
 94.33  subdivision 3 or until participation is terminated under section 
 94.34  290B.08, subdivision 1. 
 94.35     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
 94.36  290B.04, is amended by adding a subdivision to read: 
 95.1      Subd. 5.  [PENALTY FOR FAILURE TO FILE EXCESS-INCOME 
 95.2   CERTIFICATION.] A participant who fails to file an excess-income 
 95.3   certification as required in subdivision 3 is subject to a 
 95.4   penalty equal to ten percent of the amount deferred in the year 
 95.5   following the year in which the participant failed to file the 
 95.6   form.  The penalty is added to the cumulative deferral and is 
 95.7   subject to interest at the same rate. 
 95.8      Sec. 6.  Minnesota Statutes 1997 Supplement, section 
 95.9   290B.05, subdivision 1, is amended to read: 
 95.10     Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
 95.11  commissioner shall determine each qualifying homeowner's "annual 
 95.12  maximum property tax amount" following approval of the 
 95.13  homeowner's initial application.  The "annual maximum property 
 95.14  tax amount" equals five percent of the homeowner's total 
 95.15  household income for the year preceding the initial 
 95.16  application.  The commissioner shall annually determine the 
 95.17  qualifying homeowner's "maximum property tax amount" 
 95.18  and "maximum allowable deferral."  The maximum property tax 
 95.19  amount calculated for taxes payable in the following year is 
 95.20  equal to five percent of the homeowner's total household income 
 95.21  for the previous calendar year.  No tax may be deferred for any 
 95.22  homeowner whose total household income for the previous year 
 95.23  exceeds $30,000 $40,000.  No tax shall be deferred in any year 
 95.24  in which the homeowner does not meet the program qualifications 
 95.25  in section 290B.03.  The maximum allowable total deferral is 
 95.26  equal to 75 percent of the assessor's estimated market value for 
 95.27  the year, less (1) the balance of any mortgage loans and other 
 95.28  amounts secured by liens against the property at the time of 
 95.29  application, including any unpaid special assessments but not 
 95.30  including property taxes payable during the year; and (2) any 
 95.31  outstanding deferral, penalty, and interest.  
 95.32     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
 95.33  290B.05, subdivision 2, is amended to read: 
 95.34     Subd. 2.  [CERTIFICATION BY COMMISSIONER.] On or before 
 95.35  December 1, the commissioner shall certify to the county auditor 
 95.36  of the county in which the qualifying homestead is located (1) 
 96.1   the maximum property tax amount; (2) the maximum allowable 
 96.2   deferral for the year; and (3) the cumulative deferral, penalty, 
 96.3   and interest for all years preceding the next taxes payable year.
 96.4      Sec. 8.  Minnesota Statutes 1997 Supplement, section 
 96.5   290B.05, subdivision 4, is amended to read: 
 96.6      Subd. 4.  [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.] 
 96.7   On or before September 1 of each year, the commissioner shall 
 96.8   request, and each county or city assessor shall provide, the 
 96.9   current year's estimated market value of each property on the 
 96.10  list supplied by the commissioner that may be eligible for 
 96.11  deferral under this section for taxes payable in the following 
 96.12  year.  The total amount of deferred taxes, penalty, and interest 
 96.13  on a property, when added to (1) the balance owing on any 
 96.14  mortgages on the property at the time of initial application; 
 96.15  and (2) other amounts secured by liens on the property at the 
 96.16  time of the initial application, may not exceed 75 percent of 
 96.17  the assessor's current estimated market value of the property. 
 96.18     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
 96.19  290B.06, is amended to read: 
 96.20     290B.06 [PROPERTY TAX REFUNDS.] 
 96.21     For purposes of qualifying for the regular property tax 
 96.22  refund or the special refund for homeowners under chapter 290A, 
 96.23  the qualifying tax is the full amount of taxes, including the 
 96.24  deferred portion of the tax.  In any year in which a program 
 96.25  participant chooses to have property taxes are deferred under 
 96.26  this section, any regular or special property tax refund awarded 
 96.27  based upon those property taxes must be taken first as a 
 96.28  deduction from the amount of the deferred tax for that year, and 
 96.29  second as a deduction against any outstanding deferral from 
 96.30  previous years, rather than as a cash payment to the homeowner.  
 96.31  The commissioner shall cancel any current year's deferral or 
 96.32  previous years' deferral, penalty, and interest that is offset 
 96.33  by the property tax refunds.  If the total of the regular and 
 96.34  the special property tax refund amounts exceeds the sum of the 
 96.35  deferred tax for the current year and cumulative deferred tax, 
 96.36  penalty, and interest for previous years, the commissioner shall 
 97.1   then remit the excess amount to the homeowner.  On or before the 
 97.2   date on which the commissioner issues property tax refunds, the 
 97.3   commissioner shall notify program participants of any reduction 
 97.4   in the deferred amount for the current and previous years 
 97.5   resulting from property tax refunds. 
 97.6      Sec. 10.  Minnesota Statutes 1997 Supplement, section 
 97.7   290B.07, is amended to read: 
 97.8      290B.07 [LIEN; DEFERRED PORTION.] 
 97.9      Payment by the state to the county treasurer of taxes 
 97.10  deferred under this section is deemed a loan from the state to 
 97.11  the program participant.  The commissioner must compute the 
 97.12  interest as provided in section 270.75, subdivision 5, but not 
 97.13  to exceed five percent, and maintain records of the total 
 97.14  deferred amount, penalty, and interest for each participant.  
 97.15  Interest shall accrue beginning September 1 of the payable year 
 97.16  for which the taxes are deferred.  Any deferral made under this 
 97.17  chapter shall not be construed as delinquent property taxes. 
 97.18     The lien created under section 272.31 continues to secure 
 97.19  payment by the taxpayer, or by the taxpayer's successors or 
 97.20  assigns, of the amount deferred, including penalty and interest, 
 97.21  with respect to all years for which amounts are deferred.  The 
 97.22  lien for deferred taxes, penalty, and interest has the same 
 97.23  priority as any other lien under section 272.31, except that 
 97.24  liens, including mortgages, recorded or filed prior to the 
 97.25  recording or filing of the notice under section 290B.04, 
 97.26  subdivision 2, have priority over the lien for deferred taxes, 
 97.27  penalty, and interest.  A seller's interest in a contract for 
 97.28  deed, in which a qualifying homeowner is the purchaser or an 
 97.29  assignee of the purchaser, has priority over deferred taxes, 
 97.30  penalty, and interest on deferred taxes, regardless of whether 
 97.31  the contract for deed is recorded or filed.  The lien for 
 97.32  deferred taxes, penalty, and interest for future years has the 
 97.33  same priority as the lien for deferred taxes, penalty, and 
 97.34  interest for the first year, which is always higher in priority 
 97.35  than any mortgages or other liens filed, recorded, or created 
 97.36  after the notice recorded or filed under section 290B.04, 
 98.1   subdivision 2.  The county treasurer or auditor shall maintain 
 98.2   records of the deferred portion and shall list the amount of 
 98.3   deferred taxes for the year and the cumulative deferral, 
 98.4   penalty, and interest for all previous years as a lien against 
 98.5   the property on the property tax statement.  In any 
 98.6   certification of unpaid taxes for a tax parcel, the county 
 98.7   auditor shall clearly distinguish between taxes payable in the 
 98.8   current year, deferred taxes, penalty, and interest, and 
 98.9   delinquent taxes.  Payment of the deferred portion becomes due 
 98.10  and owing at the time specified in section 290B.08.  Upon 
 98.11  receipt of the payment, the commissioner shall issue a receipt 
 98.12  for it to the person making the payment upon request and shall 
 98.13  notify the auditor of the county in which the parcel is located, 
 98.14  within ten days, identifying the parcel to which the payment 
 98.15  applies.  Upon receipt by the commissioner of revenue of 
 98.16  collected funds in the amount of the deferral, the state's loan 
 98.17  to the program participant is deemed paid in full. 
 98.18     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
 98.19  290B.08, subdivision 2, is amended to read: 
 98.20     Subd. 2.  [PAYMENT UPON TERMINATION.] Upon the termination 
 98.21  of the deferral under subdivision 1, the amount of deferred 
 98.22  taxes, penalty, and interest plus the recording or filing fees 
 98.23  under both section 290B.04, subdivision 2, and this subdivision 
 98.24  becomes due and payable to the commissioner within 90 days of 
 98.25  termination of the deferral for terminations under subdivision 
 98.26  1, paragraph (a), clauses (1) and (2), and within one year of 
 98.27  termination of the deferral for terminations under subdivision 
 98.28  1, paragraph (a), clauses (3) and (4).  No additional interest 
 98.29  is due on the deferral or penalty if timely paid.  On receipt of 
 98.30  payment, the commissioner shall within ten days notify the 
 98.31  auditor of the county in which the parcel is located, 
 98.32  identifying the parcel to which the payment applies and shall 
 98.33  remit the recording or filing fees under section 290B.04, 
 98.34  subdivision 2, and this subdivision to the auditor.  A notice of 
 98.35  termination of deferral, containing the legal description and 
 98.36  the recording or filing data for the notice of qualification for 
 99.1   deferral under section 290B.04, subdivision 2, shall be prepared 
 99.2   and recorded or filed by the county auditor in the same office 
 99.3   in which the notice of qualification for deferral under section 
 99.4   290B.04, subdivision 2, was recorded or filed, and the county 
 99.5   auditor shall mail a copy of the notice of termination to the 
 99.6   property owner.  The property owner shall pay the recording or 
 99.7   filing fees.  Upon recording or filing of the notice of 
 99.8   termination of deferral, the notice of qualification for 
 99.9   deferral under section 290B.04, subdivision 2, and the lien 
 99.10  created by it are discharged.  If the deferral is not timely 
 99.11  paid, the penalty, interest, lien, forfeiture, and other rules 
 99.12  for the collection of ad valorem property taxes apply. 
 99.13     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 99.14  290B.09, subdivision 1, is amended to read: 
 99.15     Subdivision 1.  [DETERMINATION; PAYMENT.] The commissioner 
 99.16  of revenue shall determine the deferred amount of property tax 
 99.17  in each county, basing determinations on a review of abstracts 
 99.18  of tax lists submitted by the county auditors under section 
 99.19  275.29.  The commissioner may make changes in the abstracts of 
 99.20  tax lists as deemed necessary.  The commissioner of revenue, 
 99.21  after such review, shall pay the deferred amount of property tax 
 99.22  to each county treasurer on or before August 31.  
 99.23     At least once each year, the commissioner shall report to 
 99.24  the county auditor the total cumulative amount of deferred 
 99.25  taxes, penalty, and interest that constitute a lien against the 
 99.26  property.  
 99.27     The county treasurer shall distribute as part of the 
 99.28  October settlement the funds received as if they had been 
 99.29  collected as a part of the property tax. 
 99.30     Sec. 13.  [EFFECTIVE DATE.] 
 99.31     Sections 1 to 12 are effective for deferrals of property 
 99.32  taxes payable in 1999 and thereafter. 
 99.33                             ARTICLE 5
 99.34                     INCOME AND FRANCHISE TAXES
 99.35     Section 1.  Minnesota Statutes 1996, section 289A.08, 
 99.36  subdivision 13, is amended to read: 
100.1      Subd. 13.  [RETURN REQUIREMENTS; LONG AND SHORT FORMS.] (a) 
100.2   The commissioner shall provide a long form individual income tax 
100.3   return and may provide a short form individual income tax 
100.4   return.  The returns shall be in a form that is consistent with 
100.5   the provisions of chapter 290, notwithstanding any other law to 
100.6   the contrary.  The nongame wildlife checkoff provided in section 
100.7   290.431 and the dependent care credit provided in section 
100.8   290.067 must be included on the short form.  
100.9      (b) The commissioner shall provide on both the long form 
100.10  and short form individual income tax returns a line allowing the 
100.11  taxpayer to report use tax liability for the previous calendar 
100.12  year as provided in section 289A.11, subdivision 1. 
100.13     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
100.14  289A.11, subdivision 1, is amended to read: 
100.15     Subdivision 1.  [RETURN REQUIRED.] Except as provided in 
100.16  section 289A.18, subdivision 4, for the month in which taxes 
100.17  imposed by chapter 297A are payable, or for which a return is 
100.18  due, a return for the preceding reporting period must be filed 
100.19  with the commissioner in the form and manner the commissioner 
100.20  prescribes.  A person making sales at retail at two or more 
100.21  places of business may file a consolidated return subject to 
100.22  rules prescribed by the commissioner.  In computing the dollar 
100.23  amount of items on the return, the amounts are rounded off to 
100.24  the nearest whole dollar, disregarding amounts less than 50 
100.25  cents and increasing amounts of 50 cents to 99 cents to the next 
100.26  highest dollar. 
100.27     Notwithstanding this subdivision, a person who is not 
100.28  required to hold a sales tax permit under chapter 297A and who 
100.29  makes annual purchases of less than $18,500 that are subject to 
100.30  the use tax imposed by section 297A.14, may file an annual use 
100.31  tax return on a form prescribed by the commissioner.  If a 
100.32  person who qualifies for an annual use tax reporting period is 
100.33  required to obtain a sales tax permit or makes use tax purchases 
100.34  in excess of $18,500 during the calendar year, the reporting 
100.35  period must be considered ended at the end of the month in which 
100.36  the permit is applied for or the purchase in excess of $18,500 
101.1   is made and a return must be filed for the preceding reporting 
101.2   period. 
101.3      Notwithstanding this subdivision, a taxpayer eligible to 
101.4   file an annual use tax return under this subdivision may file 
101.5   the return and pay the tax liability under section 297A.14 with 
101.6   the income tax return, provided that the tax must be paid by 
101.7   April 15 following the close of the taxable year. 
101.8      Sec. 3.  Minnesota Statutes 1997 Supplement, section 
101.9   289A.19, subdivision 2, is amended to read: 
101.10     Subd. 2.  [CORPORATE FRANCHISE AND MINING COMPANY TAXES.] 
101.11  Corporations or mining companies shall receive an extension of 
101.12  seven months for filing the return of a corporation subject to 
101.13  tax under chapter 290 or for filing the return of a mining 
101.14  company subject to tax under sections 298.01 and 298.015 if:.  
101.15  Interest on any balance of tax not paid when the regularly 
101.16  required return is due must be paid at the rate specified in 
101.17  section 270.75, from the date such payment should have been made 
101.18  if no extension was granted, until the date of payment of such 
101.19  tax. 
101.20     If a corporation or mining company does not:  
101.21     (1) the corporation or mining company pays pay at least 90 
101.22  percent of the amount of tax shown on the return on or before 
101.23  the regular due date of the return, the penalty prescribed by 
101.24  section 289A.60, subdivision 1, shall be imposed on the unpaid 
101.25  balance of tax; or 
101.26     (2) pay the balance due shown on the regularly required 
101.27  return is paid on or before the extended due date of the return; 
101.28  and 
101.29     (3) interest on any balance due is paid at the rate 
101.30  specified in section 270.75 from the regular due date of the 
101.31  return until the tax is paid, the penalty prescribed by section 
101.32  289A.60, subdivision 1, shall be imposed on the unpaid balance 
101.33  of tax from the original due date of the return.  
101.34     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
101.35  290.01, subdivision 19a, is amended to read: 
101.36     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
102.1   individuals, estates, and trusts, there shall be added to 
102.2   federal taxable income: 
102.3      (1)(i) interest income on obligations of any state other 
102.4   than Minnesota or a political or governmental subdivision, 
102.5   municipality, or governmental agency or instrumentality of any 
102.6   state other than Minnesota exempt from federal income taxes 
102.7   under the Internal Revenue Code or any other federal statute, 
102.8   and 
102.9      (ii) exempt-interest dividends as defined in section 
102.10  852(b)(5) of the Internal Revenue Code, except the portion of 
102.11  the exempt-interest dividends derived from interest income on 
102.12  obligations of the state of Minnesota or its political or 
102.13  governmental subdivisions, municipalities, governmental agencies 
102.14  or instrumentalities, but only if the portion of the 
102.15  exempt-interest dividends from such Minnesota sources paid to 
102.16  all shareholders represents 95 percent or more of the 
102.17  exempt-interest dividends that are paid by the regulated 
102.18  investment company as defined in section 851(a) of the Internal 
102.19  Revenue Code, or the fund of the regulated investment company as 
102.20  defined in section 851(h) of the Internal Revenue Code, making 
102.21  the payment; and 
102.22     (iii) for the purposes of items (i) and (ii), interest on 
102.23  obligations of an Indian tribal government described in section 
102.24  7871(c) of the Internal Revenue Code shall be treated as 
102.25  interest income on obligations of the state in which the tribe 
102.26  is located; 
102.27     (2) the amount of income taxes paid or accrued within the 
102.28  taxable year under this chapter and income taxes paid to any 
102.29  other state or to any province or territory of Canada, to the 
102.30  extent allowed as a deduction under section 63(d) of the 
102.31  Internal Revenue Code, but the addition may not be more than the 
102.32  amount by which the itemized deductions as allowed under section 
102.33  63(d) of the Internal Revenue Code exceeds the amount of the 
102.34  standard deduction as defined in section 63(c) of the Internal 
102.35  Revenue Code.  For the purpose of this paragraph, the 
102.36  disallowance of itemized deductions under section 68 of the 
103.1   Internal Revenue Code of 1986, income tax is the last itemized 
103.2   deduction disallowed; 
103.3      (3) the capital gain amount of a lump sum distribution to 
103.4   which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
103.5   Reform Act of 1986, Public Law Number 99-514, applies; 
103.6      (4) the amount of income taxes paid or accrued within the 
103.7   taxable year under this chapter and income taxes paid to any 
103.8   other state or any province or territory of Canada, to the 
103.9   extent allowed as a deduction in determining federal adjusted 
103.10  gross income.  For the purpose of this paragraph, income taxes 
103.11  do not include the taxes imposed by sections 290.0922, 
103.12  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
103.13     (5) the amount of loss or expense included in federal 
103.14  taxable income under section 1366 of the Internal Revenue Code 
103.15  flowing from a corporation that has a valid election in effect 
103.16  for the taxable year under section 1362 of the Internal Revenue 
103.17  Code, but which is not allowed to be an "S" corporation under 
103.18  section 290.9725; and 
103.19     (6) the amount of any distributions in cash or property 
103.20  made to a shareholder during the taxable year by a corporation 
103.21  that has a valid election in effect for the taxable year under 
103.22  section 1362 of the Internal Revenue Code, but which is not 
103.23  allowed to be an "S" corporation under section 290.9725 to the 
103.24  extent not already included in federal taxable income under 
103.25  section 1368 of the Internal Revenue Code.; 
103.26     (7) in the year stock of a corporation that had made a 
103.27  valid election under section 1362 of the Internal Revenue Code 
103.28  but was not an "S" corporation under section 290.9725 is sold or 
103.29  disposed of in a transaction taxable under the Internal Revenue 
103.30  Code, the amount of difference between the Minnesota basis of 
103.31  the stock under subdivision 19f, paragraph (m), and the federal 
103.32  basis if the Minnesota basis is lower than the shareholder's 
103.33  federal basis; and 
103.34     (8) the amount of expense, interest, or taxes disallowed 
103.35  pursuant to section 290.10. 
103.36     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
104.1   290.01, subdivision 19b, is amended to read: 
104.2      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
104.3   individuals, estates, and trusts, there shall be subtracted from 
104.4   federal taxable income: 
104.5      (1) interest income on obligations of any authority, 
104.6   commission, or instrumentality of the United States to the 
104.7   extent includable in taxable income for federal income tax 
104.8   purposes but exempt from state income tax under the laws of the 
104.9   United States; 
104.10     (2) if included in federal taxable income, the amount of 
104.11  any overpayment of income tax to Minnesota or to any other 
104.12  state, for any previous taxable year, whether the amount is 
104.13  received as a refund or as a credit to another taxable year's 
104.14  income tax liability; 
104.15     (3) the amount paid to others, less the credit allowed 
104.16  under section 290.0674, not to exceed $1,625 for each dependent 
104.17  in grades kindergarten to 6 and $2,500 for each dependent in 
104.18  grades 7 to 12, for tuition, textbooks, and transportation of 
104.19  each dependent in attending an elementary or secondary school 
104.20  situated in Minnesota, North Dakota, South Dakota, Iowa, or 
104.21  Wisconsin, wherein a resident of this state may legally fulfill 
104.22  the state's compulsory attendance laws, which is not operated 
104.23  for profit, and which adheres to the provisions of the Civil 
104.24  Rights Act of 1964 and chapter 363.  For the purposes of this 
104.25  clause, "tuition" includes fees or tuition as defined in section 
104.26  290.0674, subdivision 1, clause (1).  As used in this clause, 
104.27  "textbooks" includes books and other instructional materials and 
104.28  equipment used in elementary and secondary schools in teaching 
104.29  only those subjects legally and commonly taught in public 
104.30  elementary and secondary schools in this state.  Equipment 
104.31  expenses qualifying for deduction includes expenses as defined 
104.32  and limited in section 290.0674, subdivision 1, clause (3).  
104.33  "Textbooks" does not include instructional books and materials 
104.34  used in the teaching of religious tenets, doctrines, or worship, 
104.35  the purpose of which is to instill such tenets, doctrines, or 
104.36  worship, nor does it include books or materials for, or 
105.1   transportation to, extracurricular activities including sporting 
105.2   events, musical or dramatic events, speech activities, driver's 
105.3   education, or similar programs; 
105.4      (4) to the extent included in federal taxable income, 
105.5   distributions from a qualified governmental pension plan, an 
105.6   individual retirement account, simplified employee pension, or 
105.7   qualified plan covering a self-employed person that represent a 
105.8   return of contributions that were included in Minnesota gross 
105.9   income in the taxable year for which the contributions were made 
105.10  but were deducted or were not included in the computation of 
105.11  federal adjusted gross income.  The distribution shall be 
105.12  allocated first to return of contributions until the 
105.13  contributions included in Minnesota gross income have been 
105.14  exhausted.  This subtraction applies only to contributions made 
105.15  in a taxable year prior to 1985; 
105.16     (5) income as provided under section 290.0802; 
105.17     (6) the amount of unrecovered accelerated cost recovery 
105.18  system deductions allowed under subdivision 19g; 
105.19     (7) to the extent included in federal adjusted gross 
105.20  income, income realized on disposition of property exempt from 
105.21  tax under section 290.491; 
105.22     (8) to the extent not deducted in determining federal 
105.23  taxable income, the amount paid for health insurance of 
105.24  self-employed individuals as determined under section 162(l) of 
105.25  the Internal Revenue Code, except that the 25 percent limit does 
105.26  not apply.  If the taxpayer deducted insurance payments under 
105.27  section 213 of the Internal Revenue Code of 1986, the 
105.28  subtraction under this clause must be reduced by the lesser of: 
105.29     (i) the total itemized deductions allowed under section 
105.30  63(d) of the Internal Revenue Code, less state, local, and 
105.31  foreign income taxes deductible under section 164 of the 
105.32  Internal Revenue Code and the standard deduction under section 
105.33  63(c) of the Internal Revenue Code; or 
105.34     (ii) the lesser of (A) the amount of insurance qualifying 
105.35  as "medical care" under section 213(d) of the Internal Revenue 
105.36  Code to the extent not deducted under section 162(1) of the 
106.1   Internal Revenue Code or excluded from income or (B) the total 
106.2   amount deductible for medical care under section 213(a); 
106.3      (9) the exemption amount allowed under Laws 1995, chapter 
106.4   255, article 3, section 2, subdivision 3; 
106.5      (10) to the extent included in federal taxable income, 
106.6   postservice benefits for youth community service under section 
106.7   121.707 for volunteer service under United States Code, title 
106.8   42, section 5011(d), as amended; and 
106.9      (11) to the extent not subtracted under clause (1), the 
106.10  amount of income or gain included in federal taxable income 
106.11  under section 1366 of the Internal Revenue Code flowing from a 
106.12  corporation that has a valid election in effect for the taxable 
106.13  year under section 1362 of the Internal Revenue Code which is 
106.14  not allowed to be an "S" corporation under section 290.9725.; 
106.15     (12) in the year stock of a corporation that had made a 
106.16  valid election under section 1362 of the Internal Revenue Code 
106.17  but was not an "S" corporation under section 290.9725 is sold or 
106.18  disposed of in a transaction taxable under the Internal Revenue 
106.19  Code, the amount of difference between the Minnesota basis of 
106.20  the stock under subdivision 19f, paragraph (m), and the federal 
106.21  basis if the Minnesota basis is higher than the shareholder's 
106.22  federal basis; 
106.23     (13) an amount equal to an individual's, trust's, or 
106.24  estate's net federal income tax liability for the tax year that 
106.25  is attributable to items of income, expense, gain, loss, or 
106.26  credits federally flowing to the taxpayer in the tax year from a 
106.27  corporation, having a valid election in effect for federal tax 
106.28  purposes under section 1362 of the Internal Revenue Code but not 
106.29  treated as a "S" corporation for state tax purposes under 
106.30  section 290.9725; and 
106.31     (14) to the extent not deducted in determining federal 
106.32  taxable income by a taxpayer or married couple filing a joint 
106.33  return who does not itemize deductions for federal income tax 
106.34  purposes for the taxable year, an amount equal to 50 percent of 
106.35  the excess of charitable contributions allowable as a deduction 
106.36  for the taxable year under section 170(a) of the Internal 
107.1   Revenue Code over $500. 
107.2      Sec. 6.  Minnesota Statutes 1997 Supplement, section 
107.3   290.01, subdivision 19f, is amended to read: 
107.4      Subd. 19f.  [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON 
107.5   DISPOSITION OF PROPERTY.] (a) For individuals, estates, and 
107.6   trusts, the basis of property is its adjusted basis for federal 
107.7   income tax purposes except as set forth in paragraphs (f), (g), 
107.8   and (m).  For corporations, the basis of property is its 
107.9   adjusted basis for federal income tax purposes, without regard 
107.10  to the time when the property became subject to tax under this 
107.11  chapter or to whether out-of-state losses or items of tax 
107.12  preference with respect to the property were not deductible 
107.13  under this chapter, except that the modifications to the basis 
107.14  for federal income tax purposes set forth in paragraphs (b) to 
107.15  (j) are allowed to corporations, and the resulting modifications 
107.16  to federal taxable income must be made in the year in which gain 
107.17  or loss on the sale or other disposition of property is 
107.18  recognized. 
107.19     (b) The basis of property shall not be reduced to reflect 
107.20  federal investment tax credit.  
107.21     (c) The basis of property subject to the accelerated cost 
107.22  recovery system under section 168 of the Internal Revenue Code 
107.23  shall be modified to reflect the modifications in depreciation 
107.24  with respect to the property provided for in subdivision 19e.  
107.25  For certified pollution control facilities for which 
107.26  amortization deductions were elected under section 169 of the 
107.27  Internal Revenue Code of 1954, the basis of the property must be 
107.28  increased by the amount of the amortization deduction not 
107.29  previously allowed under this chapter. 
107.30     (d) For property acquired before January 1, 1933, the basis 
107.31  for computing a gain is the fair market value of the property as 
107.32  of that date.  The basis for determining a loss is the cost of 
107.33  the property to the taxpayer less any depreciation, 
107.34  amortization, or depletion, actually sustained before that 
107.35  date.  If the adjusted cost exceeds the fair market value of the 
107.36  property, then the basis is the adjusted cost regardless of 
108.1   whether there is a gain or loss.  
108.2      (e) The basis is reduced by the allowance for amortization 
108.3   of bond premium if an election to amortize was made pursuant to 
108.4   Minnesota Statutes 1986, section 290.09, subdivision 13, and the 
108.5   allowance could have been deducted by the taxpayer under this 
108.6   chapter during the period of the taxpayer's ownership of the 
108.7   property.  
108.8      (f) For assets placed in service before January 1, 1987, 
108.9   corporations, partnerships, or individuals engaged in the 
108.10  business of mining ores other than iron ore or taconite 
108.11  concentrates subject to the occupation tax under chapter 298 
108.12  must use the occupation tax basis of property used in that 
108.13  business. 
108.14     (g) For assets placed in service before January 1, 1990, 
108.15  corporations, partnerships, or individuals engaged in the 
108.16  business of mining iron ore or taconite concentrates subject to 
108.17  the occupation tax under chapter 298 must use the occupation tax 
108.18  basis of property used in that business.  
108.19     (h) In applying the provisions of sections 301(c)(3)(B), 
108.20  312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the 
108.21  dates December 31, 1932, and January 1, 1933, shall be 
108.22  substituted for February 28, 1913, and March 1, 1913, 
108.23  respectively.  
108.24     (i) In applying the provisions of section 362(a) and (c) of 
108.25  the Internal Revenue Code, the date December 31, 1956, shall be 
108.26  substituted for June 22, 1954.  
108.27     (j) The basis of property shall be increased by the amount 
108.28  of intangible drilling costs not previously allowed due to 
108.29  differences between this chapter and the Internal Revenue Code.  
108.30     (k) The adjusted basis of any corporate partner's interest 
108.31  in a partnership is the same as the adjusted basis for federal 
108.32  income tax purposes modified as required to reflect the basis 
108.33  modifications set forth in paragraphs (b) to (j).  The adjusted 
108.34  basis of a partnership in which the partner is an individual, 
108.35  estate, or trust is the same as the adjusted basis for federal 
108.36  income tax purposes modified as required to reflect the basis 
109.1   modifications set forth in paragraphs (f) and (g).  
109.2      (l) The modifications contained in paragraphs (b) to (j) 
109.3   also apply to the basis of property that is determined by 
109.4   reference to the basis of the same property in the hands of a 
109.5   different taxpayer or by reference to the basis of different 
109.6   property.  
109.7      (m) If a corporation has a valid election in effect for the 
109.8   taxable year under section 1362 of the Internal Revenue Code, 
109.9   but is not allowed to be an "S" corporation under section 
109.10  290.9725, and the corporation is liquidated or the individual 
109.11  shareholder disposes of the stock and there is no capital loss 
109.12  reflected in federal adjusted gross income because of the fact 
109.13  that corporate losses have exhausted the shareholders' basis for 
109.14  federal purposes, the shareholders shall be entitled to a 
109.15  capital loss commensurate to their Minnesota basis for the 
109.16  stock, the Minnesota basis in the shareholder's stock in the 
109.17  corporation shall be computed as if the corporation were not an 
109.18  "S" corporation for federal tax purposes. 
109.19     Sec. 7.  Minnesota Statutes 1996, section 290.06, 
109.20  subdivision 2c, is amended to read: 
109.21     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
109.22  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
109.23  married individuals filing joint returns and surviving spouses 
109.24  as defined in section 2(a) of the Internal Revenue Code must be 
109.25  computed by applying to their taxable net income the following 
109.26  schedule of rates: 
109.27     (1) On the first $19,910, 6 percent; 
109.28     (2) On all over $19,910, but not over $79,120, 8 percent; 
109.29     (3) On all over $79,120, 8.5 percent. 
109.30     Married individuals filing separate returns, estates, and 
109.31  trusts must compute their income tax by applying the above rates 
109.32  to their taxable income, except that the income brackets will be 
109.33  one-half of the above amounts.  
109.34     (b) The income taxes imposed by this chapter upon unmarried 
109.35  individuals must be computed by applying to taxable net income 
109.36  the following schedule of rates: 
110.1      (1) On the first $13,620, 6 percent; 
110.2      (2) On all over $13,620, but not over $44,750, 8 percent; 
110.3      (3) On all over $44,750, 8.5 percent. 
110.4      (c) The income taxes imposed by this chapter upon unmarried 
110.5   individuals qualifying as a head of household as defined in 
110.6   section 2(b) of the Internal Revenue Code must be computed by 
110.7   applying to taxable net income the following schedule of rates: 
110.8      (1) On the first $16,770, 6 percent; 
110.9      (2) On all over $16,770, but not over $67,390, 8 percent; 
110.10     (3) On all over $67,390, 8.5 percent. 
110.11     (d) In lieu of a tax computed according to the rates set 
110.12  forth in this subdivision, the tax of any individual taxpayer 
110.13  whose taxable net income for the taxable year is less than an 
110.14  amount determined by the commissioner must be computed in 
110.15  accordance with tables prepared and issued by the commissioner 
110.16  of revenue based on income brackets of not more than $100.  The 
110.17  amount of tax for each bracket shall be computed at the rates 
110.18  set forth in this subdivision, provided that the commissioner 
110.19  may disregard a fractional part of a dollar unless it amounts to 
110.20  50 cents or more, in which case it may be increased to $1. 
110.21     (e) An individual who is not a Minnesota resident for the 
110.22  entire year must compute the individual's Minnesota income tax 
110.23  as provided in this subdivision.  After the application of the 
110.24  nonrefundable credits provided in this chapter, the tax 
110.25  liability must then be multiplied by a fraction in which:  
110.26     (1) The numerator is the individual's Minnesota source 
110.27  federal adjusted gross income as defined in section 62 of the 
110.28  Internal Revenue Code disregarding income or loss flowing from a 
110.29  corporation having a valid election for the taxable year under 
110.30  section 1362 of the Internal Revenue Code but which is not an 
110.31  "S" corporation under section 290.9725 and increased by the 
110.32  addition required for interest income from non-Minnesota state 
110.33  and municipal bonds under section 290.01, subdivision 19a, 
110.34  clause (1), after applying the allocation and assignability 
110.35  provisions of section 290.081, clause (a), or 290.17; and 
110.36     (2) the denominator is the individual's federal adjusted 
111.1   gross income as defined in section 62 of the Internal Revenue 
111.2   Code of 1986, as amended through April 15, 1995, increased by 
111.3   the addition required for interest income from non-Minnesota 
111.4   state and municipal bonds under section 290.01, subdivision 19a, 
111.5   clause (1) amounts specified in section 290.01, subdivision 19a, 
111.6   clauses (1), (5), (6), and (7), and reduced by the amounts 
111.7   specified in section 290.01, subdivision 19b, clauses (1), (11), 
111.8   and (12). 
111.9      Sec. 8.  Minnesota Statutes 1996, section 290.067, 
111.10  subdivision 2, is amended to read: 
111.11     Subd. 2.  [LIMITATIONS.] The credit for expenses incurred 
111.12  for the care of each dependent shall not exceed $720 in any 
111.13  taxable year, and the total credit for all dependents of a 
111.14  claimant shall not exceed $1,440 in a taxable year.  The maximum 
111.15  total credit shall be reduced according to the amount of the 
111.16  income of the claimant and a spouse, if any, as follows:  
111.17     income up to $13,350 $17,430, $720 maximum for one 
111.18  dependent, $1,440 for all dependents; 
111.19     income over $13,350 $17,430, the maximum credit for one 
111.20  dependent shall be reduced by $18 $10 for every $350 of 
111.21  additional income, $36 $20 for all dependents for tax years 
111.22  beginning after December 31, 1997, and before January 1, 1999, 
111.23  and by $9 for every $350 of additional income, $18 for all 
111.24  dependents, for tax years beginning after December 31, 1998. 
111.25     The commissioner shall construct and make available to 
111.26  taxpayers tables showing the amount of the credit at various 
111.27  levels of income and expenses.  The tables shall follow the 
111.28  schedule contained in this subdivision, except that the 
111.29  commissioner may graduate the transitions between expenses and 
111.30  income brackets. 
111.31     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
111.32  290.0673, subdivision 2, is amended to read: 
111.33     Subd. 2.  [QUALIFIED JOB TRAINING PROGRAM.] (a) To qualify 
111.34  for credits under this section, a job training program must 
111.35  satisfy the following requirements: 
111.36     (1) It must be operated by a nonprofit corporation that 
112.1   qualifies under section 501(c)(3) of the Internal Revenue Code. 
112.2      (2) The organization must spend at least $5,000 per 
112.3   graduate of the program. 
112.4      (3) The program must provide education and training in: 
112.5      (i) basic skills, such as reading, writing, mathematics, 
112.6   and communications; 
112.7      (ii) thinking skills, such as reasoning, creative thinking, 
112.8   decision making, and problem solving; and 
112.9      (iii) personal qualities, such as responsibility, 
112.10  self-esteem, self-management, honesty, and integrity. 
112.11     (4) The program must provide income supplements, when 
112.12  needed, to participants for housing, counseling, tuition, and 
112.13  other basic needs. 
112.14     (5) The education and training course must last for at 
112.15  least six months. 
112.16     (6) Individuals served by the program must: 
112.17     (i) be 18 years old or older; 
112.18     (ii) have had federal adjusted gross income of no more than 
112.19  $10,000 $15,000 per year in the last two years; 
112.20     (iii) have assets of no more than $5,000 $7,000, excluding 
112.21  the value of a homestead; and 
112.22     (iv) not have been claimed as a dependent on the federal 
112.23  tax return of another person in the previous taxable year. 
112.24     (7) The program must charge placement and retention fees 
112.25  that cumulatively exceed the amount of credit certificates 
112.26  provided to the employer by at least 20 percent. 
112.27     (b) The program must be certified by the commissioner of 
112.28  children, families, and learning as meeting the requirements of 
112.29  this subdivision. 
112.30     Sec. 10.  [290.0681] [CREDIT FOR EMPLOYER CONTRIBUTIONS FOR 
112.31  EMPLOYEE HOUSING.] 
112.32     Subdivision 1.  [CREDIT ALLOWED.] Subject to the 
112.33  limitations and conditions of this section, a taxpayer is 
112.34  allowed a credit against the tax imposed by section 290.06, 
112.35  subdivision 1 or 2c, in an amount equal to 50 percent of the 
112.36  amount certified to the commissioner by the commissioner of the 
113.1   housing finance agency as qualifying employer housing 
113.2   contributions made by the taxpayer during the taxable year. 
113.3      Subd. 2.  [DEFINITION.] For the purpose of this section, a 
113.4   "qualifying employer housing contribution" means a cash 
113.5   contribution made by an employer (1) as capital for production 
113.6   of affordable housing; (2) for direct down payment assistance 
113.7   for employees; or (3) to a fund administered by a nonprofit 
113.8   corporation or government agency and used as capital for 
113.9   production of affordable housing or direct down payment 
113.10  assistance.  A contribution is a qualifying contribution only if 
113.11  the commissioner of the housing finance agency determines that 
113.12  its use is consistent with the requirements of section 
113.13  42(m)(2)(A) of the Internal Revenue Code. 
113.14     Subd. 3.  [CREDIT ALLOCATION.] An employer must apply each 
113.15  year to the commissioner of the housing finance agency for an 
113.16  allocation of qualifying employer housing contribution tax 
113.17  credits.  The credit is at a rate of 50 percent of qualifying 
113.18  employer housing contributions.  A credit need not be allocated 
113.19  for all of an employer's qualifying contributions.  The 
113.20  commissioner shall notify the commissioner of revenue regarding 
113.21  the identity of each employer that has been allocated the tax 
113.22  credits for the following calendar year, by September 1 of each 
113.23  year.  The commissioner of the housing finance agency shall give 
113.24  priority to employers that collaborate and receive matching 
113.25  funds from a nonprofit organization and projects which best 
113.26  promote the economic vitality of the community or region they 
113.27  are located in. 
113.28     Subd. 4.  [LIMITATIONS; CARRYOVER.] (a) The credit allowed 
113.29  to any taxpayer under this section may not exceed $250,000 for 
113.30  any taxable year. 
113.31     (b) The credit for the taxable year shall not exceed the 
113.32  tax imposed on the taxpayer for the taxable year under section 
113.33  290.06, subdivision 1 or 2c, reduced by the sum of the 
113.34  nonrefundable credits allowed under this chapter. 
113.35     (c) If the amount of the credit determined under this 
113.36  section for any taxable year exceeds the limitation under 
114.1   paragraph (b), the excess shall be a credit carryover to each of 
114.2   the five succeeding taxable years.  The entire amount of the 
114.3   excess unused credit for the taxable year shall be carried, 
114.4   first to the earliest of the taxable years to which the credit 
114.5   may be carried, and then to each successive year to which the 
114.6   credit may be carried.  The amount of the unused credit which 
114.7   may be added under this paragraph shall not exceed the 
114.8   taxpayer's liability for tax less any additional credit under 
114.9   this section for the current taxable year. 
114.10     (d) The total credit allocation allowed for all taxpayers 
114.11  is limited to $10,000,000.  The total credit remains available 
114.12  until it is completely allocated or until December 31, 2003, 
114.13  whichever occurs earlier.  Unallocated credits carry over from 
114.14  one year to the next. 
114.15     Subd. 5.  [CONTINGENT EFFECTIVE DATE; MATCH 
114.16  REQUIREMENT.] Contingent on the agency receiving a commitment 
114.17  for at least $10,000,000 from nonstate resources that would be 
114.18  used in coordination with the agency's programs to secure 
114.19  affordable housing for workers, this section is effective for 
114.20  taxable years beginning after December 31, 1998. 
114.21     Sec. 11.  Minnesota Statutes 1996, section 290.091, 
114.22  subdivision 2, is amended to read: 
114.23     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
114.24  this section, the following terms have the meanings given: 
114.25     (a) "Alternative minimum taxable income" means the sum of 
114.26  the following for the taxable year: 
114.27     (1) the taxpayer's federal alternative minimum taxable 
114.28  income as defined in section 55(b)(2) of the Internal Revenue 
114.29  Code; 
114.30     (2) the taxpayer's itemized deductions allowed in computing 
114.31  federal alternative minimum taxable income, but excluding: 
114.32     (i) the Minnesota charitable contribution deduction and; 
114.33     (ii) the medical expense deduction; 
114.34     (iii) the casualty, theft, and disaster loss deduction; and 
114.35     (iv) the impairment-related work expenses of a disabled 
114.36  person; 
115.1      (3) for depletion allowances computed under section 613A(c) 
115.2   of the Internal Revenue Code, with respect to each property (as 
115.3   defined in section 614 of the Internal Revenue Code), to the 
115.4   extent not included in federal alternative minimum taxable 
115.5   income, the excess of the deduction for depletion allowable 
115.6   under section 611 of the Internal Revenue Code for the taxable 
115.7   year over the adjusted basis of the property at the end of the 
115.8   taxable year (determined without regard to the depletion 
115.9   deduction for the taxable year); 
115.10     (4) to the extent not included in federal alternative 
115.11  minimum taxable income, the amount of the tax preference for 
115.12  intangible drilling cost under section 57(a)(2) of the Internal 
115.13  Revenue Code determined without regard to subparagraph (E); 
115.14     (5) to the extent not included in federal alternative 
115.15  minimum taxable income, the amount of interest income as 
115.16  provided by section 290.01, subdivision 19a, clause (1); 
115.17     (6) amounts added to federal taxable income as provided by 
115.18  section 290.01, subdivision 19a, clauses (5), (6), and (7); 
115.19     less the sum of the amounts determined under the following 
115.20  clauses (1) to (3) (4): 
115.21     (1) interest income as defined in section 290.01, 
115.22  subdivision 19b, clause (1); 
115.23     (2) an overpayment of state income tax as provided by 
115.24  section 290.01, subdivision 19b, clause (2), to the extent 
115.25  included in federal alternative minimum taxable income; and 
115.26     (3) the amount of investment interest paid or accrued 
115.27  within the taxable year on indebtedness to the extent that the 
115.28  amount does not exceed net investment income, as defined in 
115.29  section 163(d)(4) of the Internal Revenue Code.  Interest does 
115.30  not include amounts deducted in computing federal adjusted gross 
115.31  income; and 
115.32     (4) amounts subtracted from federal taxable income as 
115.33  provided by section 290.01, subdivision 19b, clauses (11) and 
115.34  (12). 
115.35     In the case of an estate or trust, alternative minimum 
115.36  taxable income must be computed as provided in section 59(c) of 
116.1   the Internal Revenue Code. 
116.2      (b) "Investment interest" means investment interest as 
116.3   defined in section 163(d)(3) of the Internal Revenue Code. 
116.4      (c) "Tentative minimum tax" equals seven percent of 
116.5   alternative minimum taxable income after subtracting the 
116.6   exemption amount determined under subdivision 3. 
116.7      (d) "Regular tax" means the tax that would be imposed under 
116.8   this chapter (without regard to this section and section 
116.9   290.032), reduced by the sum of the nonrefundable credits 
116.10  allowed under this chapter.  
116.11     (e) "Net minimum tax" means the minimum tax imposed by this 
116.12  section. 
116.13     (f) "Minnesota charitable contribution deduction" means a 
116.14  charitable contribution deduction under section 170 of the 
116.15  Internal Revenue Code to or for the use of an entity described 
116.16  in section 290.21, subdivision 3, clauses (a) to (e).  When the 
116.17  federal deduction for charitable contributions is limited under 
116.18  section 170(b) of the Internal Revenue Code, the allowable 
116.19  contributions in the year of contribution are deemed to be first 
116.20  contributions to entities described in section 290.21, 
116.21  subdivision 3, clauses (a) to (e). 
116.22     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
116.23  290.091, subdivision 6, is amended to read: 
116.24     Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
116.25  is allowed against the tax imposed by this chapter on 
116.26  individuals, trusts, and estates equal to the minimum tax credit 
116.27  for the taxable year.  The minimum tax credit equals the 
116.28  adjusted net minimum tax for taxable years beginning after 
116.29  December 31, 1988, reduced by the minimum tax credits allowed in 
116.30  a prior taxable year.  The credit may not exceed the excess (if 
116.31  any) for the taxable year of 
116.32     (1) the regular tax, over 
116.33     (2) the greater of (i) the tentative alternative minimum 
116.34  tax, or (ii) zero. 
116.35     (b) The adjusted net minimum tax for a taxable year equals 
116.36  the lesser of the net minimum tax or the excess (if any) of 
117.1      (1) the tentative minimum tax, over 
117.2      (2) seven percent of the sum of 
117.3      (i) adjusted gross income as defined in section 62 of the 
117.4   Internal Revenue Code, 
117.5      (ii) interest income as defined in section 290.01, 
117.6   subdivision 19a, clause (1), 
117.7      (iii) the amount added to federal taxable income as 
117.8   provided by section 290.01, subdivision 19a, clauses (5), (6), 
117.9   and (7), 
117.10     (iv) the itemized deduction allowed for computing federal 
117.11  alternative income under section 56(b) of the Internal Revenue 
117.12  Code and not disallowed for Minnesota purposes under subdivision 
117.13  2, paragraph (a), clause (2), of the first series of clauses, 
117.14     (v) interest on specified private activity bonds, as 
117.15  defined in section 57(a)(5) of the Internal Revenue Code, to the 
117.16  extent not included under clause (ii), 
117.17     (iv) (vi) depletion as defined in section 57(a)(1), 
117.18  determined without regard to the last sentence of paragraph (1), 
117.19  of the Internal Revenue Code, less 
117.20     (v) (vii) the deductions allowed in computing alternative 
117.21  minimum taxable income provided in subdivision 2, paragraph (a), 
117.22  clause (2) of the first series of clauses and clauses (1), 
117.23  (2), and (3), and (4) of the second series of clauses, and 
117.24     (vi) (viii) the exemption amount determined under 
117.25  subdivision 3. 
117.26     In the case of an individual who is not a Minnesota 
117.27  resident for the entire year, adjusted net minimum tax must be 
117.28  multiplied by the fraction defined in section 290.06, 
117.29  subdivision 2c, paragraph (e).  In the case of a trust or 
117.30  estate, adjusted net minimum tax must be multiplied by the 
117.31  fraction defined under subdivision 4, paragraph (b). 
117.32     Sec. 13.  Minnesota Statutes 1996, section 290.10, is 
117.33  amended to read: 
117.34     290.10 [NONDEDUCTIBLE ITEMS.] 
117.35     Except as provided in section 290.17, subdivision 4, 
117.36  paragraph (i), in computing the net income of a corporation 
118.1   taxpayer no deduction shall in any case be allowed for expenses, 
118.2   interest and taxes connected with or allocable against the 
118.3   production or receipt of all income not included in the measure 
118.4   of the tax imposed by this chapter, except that for corporations 
118.5   engaged in the business of mining or producing iron ore, the 
118.6   mining of which is subject to the occupation tax imposed by 
118.7   section 298.01, subdivision 4, this shall not prevent the 
118.8   deduction of expenses and other items to the extent that the 
118.9   expenses and other items are allowable under this chapter and 
118.10  are not deductible, capitalizable, retainable in basis, or taken 
118.11  into account by allowance or otherwise in computing the 
118.12  occupation tax and do not exceed the amounts taken for federal 
118.13  income tax purposes for that year.  Occupation taxes imposed 
118.14  under chapter 298, royalty taxes imposed under chapter 299, or 
118.15  depletion expenses may not be deducted under this clause. 
118.16     Sec. 14.  Minnesota Statutes 1996, section 290.21, 
118.17  subdivision 3, is amended to read: 
118.18     Subd. 3.  An amount for contribution or gifts made within 
118.19  the taxable year: 
118.20     (a) to or for the use of the state of Minnesota, or any of 
118.21  its political subdivisions for exclusively public purposes, 
118.22     (b) to or for the use of any community chest, corporation, 
118.23  organization, trust, fund, association, or foundation located in 
118.24  and carrying on substantially all of its activities within this 
118.25  state, organized and operating exclusively for religious, 
118.26  charitable, public cemetery, scientific, literary, artistic, or 
118.27  educational purposes, or for the prevention of cruelty to 
118.28  children or animals, no part of the net earnings of which inures 
118.29  to the benefit of any private stockholder or individual, 
118.30     (c) to a fraternal society, order, or association, 
118.31  operating under the lodge system located in and carrying on 
118.32  substantially all of their activities within this state if such 
118.33  contributions or gifts are to be used exclusively for the 
118.34  purposes specified in clause (b), or for or to posts or 
118.35  organizations of war veterans or auxiliary units or societies of 
118.36  such posts or organizations, if they are within the state and no 
119.1   part of their net income inures to the benefit of any private 
119.2   shareholder or individual, 
119.3      (d) to or for the use of the United States of America for 
119.4   exclusively public purposes if the contribution or gift consists 
119.5   of real property located in Minnesota, 
119.6      (e) to or for the use of a foundation if the foundation is 
119.7   organized and operated exclusively for a purpose in clause (b), 
119.8   and has no part of its net earnings inuring to the benefit of a 
119.9   private shareholder or individual, but does not carry on 
119.10  substantially all of its activities within this state.  The 
119.11  deduction under this clause equals the amount of the 
119.12  corporation's contributions or gifts to the foundation within 
119.13  the taxable year multiplied by a fraction equal to the ratio of 
119.14  the foundation's total expenditures during the taxable year for 
119.15  the benefit of organizations described in clause (b) to the 
119.16  foundation's total expenditures during the taxable year, 
119.17     (f) the total deduction hereunder shall not exceed 15 
119.18  percent of the taxpayer's taxable net income less the deductions 
119.19  allowable under this section other than those for contributions 
119.20  or gifts, 
119.21     (g) in the case of a corporation reporting its taxable 
119.22  income on the accrual basis, if:  (A) the board of directors 
119.23  authorizes a charitable contribution during any taxable year, 
119.24  and (B) payment of such contribution is made after the close of 
119.25  such taxable year and on or before the 15th day of the third 
119.26  month following the close of such taxable year; then the 
119.27  taxpayer may elect to treat such contribution as paid during 
119.28  such taxable year.  The election may be made only at the time of 
119.29  the filing of the return for such taxable year, and shall be 
119.30  signified in such manner as the commissioner shall by rules 
119.31  prescribe. 
119.32     For a contribution of ordinary income or capital gain 
119.33  property, the amount allowed as a deduction is limited to the 
119.34  amount deductible under section 170(e) of the Internal Revenue 
119.35  Code. 
119.36     Sec. 15.  Minnesota Statutes 1997 Supplement, section 
120.1   290.371, subdivision 2, is amended to read: 
120.2      Subd. 2.  [EXEMPTIONS.] A corporation is not required to 
120.3   file a notice of business activities report if:  
120.4      (1) by the end of an accounting period for which it was 
120.5   otherwise required to file a notice of business activities 
120.6   report under this section, it had received a certificate of 
120.7   authority to do business in this state; 
120.8      (2) a timely return has been filed under section 289A.08; 
120.9      (3) the corporation is exempt from taxation under this 
120.10  chapter pursuant to section 290.05; or 
120.11     (4) the corporation's activities in Minnesota, or the 
120.12  interests in property which it owns, consist solely of 
120.13  activities or property exempted from jurisdiction to tax under 
120.14  section 290.015, subdivision 3, paragraph (b); or 
120.15     (5) the corporation is an "S" corporation under section 
120.16  290.9725. 
120.17     Sec. 16.  Laws 1995, chapter 255, article 3, section 2, 
120.18  subdivision 1, as amended by Laws 1996, chapter 464, article 4, 
120.19  section 1, and Laws 1997, chapter 231, article 5, section 16, is 
120.20  amended to read: 
120.21     Subdivision 1.  [URBAN REVITALIZATION AND STABILIZATION 
120.22  ZONES.] (a) By September 1, 1995, the metropolitan council shall 
120.23  designate one or more urban revitalization and stabilization 
120.24  zones in the metropolitan area, as defined in section 473.121, 
120.25  subdivision 2.  The designated zones must contain no more than 
120.26  1,000 single family homes in total.  In designating urban 
120.27  revitalization and stabilization zones, the council shall choose 
120.28  areas that are in transition toward blight and poverty.  The 
120.29  council shall use indicators that evidence increasing 
120.30  neighborhood distress such as declining residential property 
120.31  values, declining resident incomes, declining rates of 
120.32  owner-occupancy, and other indicators of blight and poverty in 
120.33  determining which areas are to be urban revitalization and 
120.34  stabilization zones. 
120.35     (b) An urban revitalization and stabilization zone is 
120.36  created in the geographic area composed entirely of parcels that 
121.1   are in whole or in part located within the 1996 65Ldn contour 
121.2   surrounding the Minneapolis-St. Paul International Airport, or 
121.3   within one mile of the boundaries of the 1996 65Ldn contour.  
121.4   For residents of the zone created under this paragraph, 
121.5   eligibility for the program as provided in subdivision 2 is 
121.6   limited to persons buying and occupying a residence in the zone 
121.7   after June 1, 1996, who have entered into purchase agreements 
121.8   related to those homes before July 1, 1997.  Initial 
121.9   applications for the homesteading program in this paragraph 
121.10  shall not be accepted after December 31, 1998. 
121.11     Sec. 17.  Laws 1995, chapter 255, article 3, section 2, 
121.12  subdivision 4, as amended by Laws 1996, chapter 464, article 4, 
121.13  section 2, is amended to read: 
121.14     Subd. 4.  [EXPIRATION.] Initial applications for the urban 
121.15  homesteading program in the zones designated under subdivision 
121.16  1, paragraph (a), shall not be accepted after July 1, 1997, for 
121.17  homes purchased and occupied before May 1, 1997.  For homes 
121.18  purchased and occupied on or after May 1, 1997, but before July 
121.19  1, 1998, initial applications shall not be accepted after June 
121.20  30, 1998. 
121.21     Sec. 18.  Laws 1997, chapter 231, article 5, section 20, is 
121.22  amended to read: 
121.23     Sec. 20.  [EFFECTIVE DATE.] 
121.24     Sections 1, 5, 6, 11, 16, and 18 are effective the day 
121.25  following final enactment.  
121.26     Sections 2 to 4, and 9 are effective for taxable years 
121.27  beginning after December 31, 1996. 
121.28     Section 7 is effective for taxable years beginning after 
121.29  December 31, 1998 1997. 
121.30     Section 8 is effective for tax credit certificates issued 
121.31  after December 31, 1996, and used in taxable years beginning 
121.32  after December 31, 1996. 
121.33     Section 10 is effective January 1, 1998. 
121.34     Sections 12, 13, 15, and 19 are effective beginning for 
121.35  property tax refunds based on rent paid after December 31, 1996. 
121.36     Section 17 is effective April 16, 1997. 
122.1      Sec. 19.  [APPROPRIATION.] 
122.2      (a) $75,000 is appropriated from the general fund to the 
122.3   commissioner of revenue to make grants to one or more nonprofit 
122.4   organizations, qualifying under section 501(c)(3) of the 
122.5   Internal Revenue Code of 1986, to coordinate, facilitate, 
122.6   encourage, and aid in the provision of taxpayer assistance 
122.7   services.  This appropriation is available for fiscal years 1998 
122.8   and 1999. 
122.9      (b) "Taxpayer assistance services" means accounting and tax 
122.10  preparation services provided by volunteers to low-income and 
122.11  disadvantaged Minnesota residents to help them file federal and 
122.12  state income tax returns and Minnesota property tax refund 
122.13  claims and to provide personal representation before the 
122.14  department of revenue and the Internal Revenue Service. 
122.15     Sec. 20.  [REPEALER.] 
122.16     Minnesota Statutes 1996, section 289A.50, subdivision 6, is 
122.17  repealed. 
122.18     Sec. 21.  [EFFECTIVE DATES.] 
122.19     Sections 1 and 2 are effective for use tax liability 
122.20  incurred in calendar year 1999 and thereafter. 
122.21     Section 3 is effective for extensions received under 
122.22  Minnesota Statutes, section 289A.19, subdivision 2, for tax 
122.23  years beginning after December 31, 1996.  The change in section 
122.24  4 made by clause (7) is effective for tax years beginning after 
122.25  December 31, 1996.  The change in section 4 made by clause (8) 
122.26  is effective for tax years beginning after December 31, 1997.  
122.27  Sections 5, clauses (11) and (12); 6; 11, paragraph (a), clause 
122.28  (6) of the first set of clauses, and clause (4) of the second 
122.29  set of clauses; 9; and 12, paragraph (b), clause (2)(iii) and 
122.30  (2)(vii), are effective for tax years beginning after December 
122.31  31, 1996.  Section 7 is effective for tax years beginning after 
122.32  December 31, 1996, except the change in denominator for 
122.33  Minnesota Statutes, section 290.01, subdivision 19b, clause (1), 
122.34  is effective for tax years beginning after December 31, 1997.  
122.35  Section 5, clauses (13) and (14); section 8; section 11, 
122.36  paragraph (a), clause (2) of the first set of clauses; section 
123.1   12, paragraph (b), clause (2)(iv); and sections 13, 14, and 20 
123.2   are effective for tax years beginning after December 31, 1997.  
123.3   Section 15 is effective for tax years beginning after December 
123.4   31, 1998.  Sections 16 to 19 are effective the day following 
123.5   final enactment.  
123.6                              ARTICLE 6 
123.7                            FEDERAL UPDATE 
123.8      Section 1.  Minnesota Statutes 1997 Supplement, section 
123.9   289A.02, subdivision 7, is amended to read: 
123.10     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
123.11  defined otherwise, "Internal Revenue Code" means the Internal 
123.12  Revenue Code of 1986, as amended through December 31, 1996, and 
123.13  includes the provisions of section 1(a) and (b) of Public Law 
123.14  Number 104-117 1997. 
123.15     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
123.16  290.01, subdivision 19, is amended to read: 
123.17     Subd. 19.  [NET INCOME.] The term "net income" means the 
123.18  federal taxable income, as defined in section 63 of the Internal 
123.19  Revenue Code of 1986, as amended through the date named in this 
123.20  subdivision, incorporating any elections made by the taxpayer in 
123.21  accordance with the Internal Revenue Code in determining federal 
123.22  taxable income for federal income tax purposes, and with the 
123.23  modifications provided in subdivisions 19a to 19f. 
123.24     In the case of a regulated investment company or a fund 
123.25  thereof, as defined in section 851(a) or 851(h) of the Internal 
123.26  Revenue Code, federal taxable income means investment company 
123.27  taxable income as defined in section 852(b)(2) of the Internal 
123.28  Revenue Code, except that:  
123.29     (1) the exclusion of net capital gain provided in section 
123.30  852(b)(2)(A) of the Internal Revenue Code does not apply; 
123.31     (2) the deduction for dividends paid under section 
123.32  852(b)(2)(D) of the Internal Revenue Code must be applied by 
123.33  allowing a deduction for capital gain dividends and 
123.34  exempt-interest dividends as defined in sections 852(b)(3)(C) 
123.35  and 852(b)(5) of the Internal Revenue Code; and 
123.36     (3) the deduction for dividends paid must also be applied 
124.1   in the amount of any undistributed capital gains which the 
124.2   regulated investment company elects to have treated as provided 
124.3   in section 852(b)(3)(D) of the Internal Revenue Code.  
124.4      The net income of a real estate investment trust as defined 
124.5   and limited by section 856(a), (b), and (c) of the Internal 
124.6   Revenue Code means the real estate investment trust taxable 
124.7   income as defined in section 857(b)(2) of the Internal Revenue 
124.8   Code.  
124.9      The net income of a designated settlement fund as defined 
124.10  in section 468B(d) of the Internal Revenue Code means the gross 
124.11  income as defined in section 468B(b) of the Internal Revenue 
124.12  Code. 
124.13     The Internal Revenue Code of 1986, as amended through 
124.14  December 31, 1986, shall be in effect for taxable years 
124.15  beginning after December 31, 1986.  The provisions of sections 
124.16  10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
124.17  10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
124.18  Omnibus Budget Reconciliation Act of 1987, Public Law Number 
124.19  100-203, the provisions of sections 1001, 1002, 1003, 1004, 
124.20  1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
124.21  1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
124.22  6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
124.23  1988, Public Law Number 100-647, the provisions of sections 
124.24  7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
124.25  1989, Public Law Number 101-239, and the provisions of sections 
124.26  1305, 1704(r), and 1704(e)(1) of the Small Business Job 
124.27  Protection Act, Public Law Number 104-188, and the provisions of 
124.28  sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 
124.29  of 1997, Public Law Number 105-34, shall be effective at the 
124.30  time they become effective for federal income tax purposes.  
124.31     The Internal Revenue Code of 1986, as amended through 
124.32  December 31, 1987, shall be in effect for taxable years 
124.33  beginning after December 31, 1987.  The provisions of sections 
124.34  4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
124.35  6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
124.36  6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
125.1   Act of 1988, Public Law Number 100-647, the provisions of 
125.2   sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
125.3   of 1989, Public Law Number 101-239, and the provisions of 
125.4   section 11702 of the Revenue Reconciliation Act of 1990, Public 
125.5   Law Number 101-508, shall become effective at the time they 
125.6   become effective for federal tax purposes.  
125.7      The Internal Revenue Code of 1986, as amended through 
125.8   December 31, 1988, shall be in effect for taxable years 
125.9   beginning after December 31, 1988.  The provisions of sections 
125.10  7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
125.11  7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
125.12  7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
125.13  Reconciliation Act of 1989, Public Law Number 101-239, the 
125.14  provision of section 1401 of the Financial Institutions Reform, 
125.15  Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
125.16  the provisions of sections 11701 and 11703 of the Revenue 
125.17  Reconciliation Act of 1990, Public Law Number 101-508, and the 
125.18  provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 
125.19  Small Business Job Protection Act, Public Law Number 104-188, 
125.20  shall become effective at the time they become effective for 
125.21  federal tax purposes.  
125.22     The Internal Revenue Code of 1986, as amended through 
125.23  December 31, 1989, shall be in effect for taxable years 
125.24  beginning after December 31, 1989.  The provisions of sections 
125.25  11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
125.26  the Revenue Reconciliation Act of 1990, Public Law Number 
125.27  101-508, and the provisions of sections 13224 and 13261 of the 
125.28  Omnibus Budget Reconciliation Act of 1993, Public Law Number 
125.29  103-66, shall become effective at the time they become effective 
125.30  for federal purposes.  
125.31     The Internal Revenue Code of 1986, as amended through 
125.32  December 31, 1990, shall be in effect for taxable years 
125.33  beginning after December 31, 1990. 
125.34     The provisions of section 13431 of the Omnibus Budget 
125.35  Reconciliation Act of 1993, Public Law Number 103-66, shall 
125.36  become effective at the time they became effective for federal 
126.1   purposes.  
126.2      The Internal Revenue Code of 1986, as amended through 
126.3   December 31, 1991, shall be in effect for taxable years 
126.4   beginning after December 31, 1991.  
126.5      The provisions of sections 1936 and 1937 of the 
126.6   Comprehensive National Energy Policy Act of 1992, Public Law 
126.7   Number 102-486, and the provisions of sections 13101, 13114, 
126.8   13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 
126.9   the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
126.10  103-66, and the provisions of section 1604(a)(1), (2), and (3) 
126.11  of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
126.12  shall become effective at the time they become effective for 
126.13  federal purposes.  
126.14     The Internal Revenue Code of 1986, as amended through 
126.15  December 31, 1992, shall be in effect for taxable years 
126.16  beginning after December 31, 1992.  
126.17     The provisions of sections 13116, 13121, 13206, 13210, 
126.18  13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
126.19  the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
126.20  103-66, and the provisions of sections 1703(a), 1703(d), 
126.21  1703(i), 1703(l), and 1703(m) of the Small Business Job 
126.22  Protection Act, Public Law Number 104-188, and the provision of 
126.23  section 1604(c) of the Taxpayer Relief Act of 1997, Public Law 
126.24  Number 105-34, shall become effective at the time they become 
126.25  effective for federal purposes. 
126.26     The Internal Revenue Code of 1986, as amended through 
126.27  December 31, 1993, shall be in effect for taxable years 
126.28  beginning after December 31, 1993. 
126.29     The provision of section 741 of Legislation to Implement 
126.30  Uruguay Round of General Agreement on Tariffs and Trade, Public 
126.31  Law Number 103-465, the provisions of sections 1, 2, and 3, of 
126.32  the Self-Employed Health Insurance Act of 1995, Public Law 
126.33  Number 104-7, the provision of section 501(b)(2) of the Health 
126.34  Insurance Portability and Accountability Act, Public Law Number 
126.35  104-191, and the provisions of sections 1604 and 1704(p)(1) and 
126.36  (2) of the Small Business Job Protection Act, Public Law Number 
127.1   104-188, and the provisions of sections 1011, 1211(b)(1), and 
127.2   1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 
127.3   105-34, shall become effective at the time they become effective 
127.4   for federal purposes. 
127.5      The Internal Revenue Code of 1986, as amended through 
127.6   December 31, 1994, shall be in effect for taxable years 
127.7   beginning after December 31, 1994. 
127.8      The provisions of sections 1119(a), 1120, 1121, 1202(a), 
127.9   1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 
127.10  Business Job Protection Act, Public Law Number 104-188, and the 
127.11  provision of section 511 of the Health Insurance Portability and 
127.12  Accountability Act, Public Law Number 104-191, and the 
127.13  provisions of sections 1174 and 1601(i)(2) of the Taxpayer 
127.14  Relief Act of 1997, Public Law Number 105-34, shall become 
127.15  effective at the time they become effective for federal purposes.
127.16     The Internal Revenue Code of 1986, as amended through March 
127.17  22, 1996, is in effect for taxable years beginning after 
127.18  December 31, 1995. 
127.19     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
127.20  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
127.21  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
127.22  Protection Act, Public Law Number 104-188, and the provisions of 
127.23  Public Law Number 104-117, and the provisions of sections 313(a) 
127.24  and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 
127.25  1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 
127.26  1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 
127.27  1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 
127.28  1997, Public Law Number 105-34, shall become effective at the 
127.29  time they become effective for federal purposes. 
127.30     The Internal Revenue Code of 1986, as amended through 
127.31  December 31, 1996, shall be in effect for taxable years 
127.32  beginning after December 31, 1996. 
127.33     The provisions of sections 202(a) and (b), 221(a), 225, 
127.34  312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
127.35  (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
127.36  1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
128.1   1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
128.2   of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
128.3   shall become effective at the time they become effective for 
128.4   federal purposes. 
128.5      The Internal Revenue Code of 1986, as amended through 
128.6   December 31, 1997, shall be in effect for taxable years 
128.7   beginning after December 31, 1997. 
128.8      Except as otherwise provided, references to the Internal 
128.9   Revenue Code in subdivisions 19a to 19g mean the code in effect 
128.10  for purposes of determining net income for the applicable year. 
128.11     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
128.12  290.01, subdivision 19a, is amended to read: 
128.13     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
128.14  individuals, estates, and trusts, there shall be added to 
128.15  federal taxable income: 
128.16     (1)(i) interest income on obligations of any state other 
128.17  than Minnesota or a political or governmental subdivision, 
128.18  municipality, or governmental agency or instrumentality of any 
128.19  state other than Minnesota exempt from federal income taxes 
128.20  under the Internal Revenue Code or any other federal statute, 
128.21  and 
128.22     (ii) exempt-interest dividends as defined in section 
128.23  852(b)(5) of the Internal Revenue Code, except the portion of 
128.24  the exempt-interest dividends derived from interest income on 
128.25  obligations of the state of Minnesota or its political or 
128.26  governmental subdivisions, municipalities, governmental agencies 
128.27  or instrumentalities, but only if the portion of the 
128.28  exempt-interest dividends from such Minnesota sources paid to 
128.29  all shareholders represents 95 percent or more of the 
128.30  exempt-interest dividends that are paid by the regulated 
128.31  investment company as defined in section 851(a) of the Internal 
128.32  Revenue Code, or the fund of the regulated investment company as 
128.33  defined in section 851(h) of the Internal Revenue Code, making 
128.34  the payment; and 
128.35     (iii) for the purposes of items (i) and (ii), interest on 
128.36  obligations of an Indian tribal government described in section 
129.1   7871(c) of the Internal Revenue Code shall be treated as 
129.2   interest income on obligations of the state in which the tribe 
129.3   is located; 
129.4      (2) the amount of income taxes paid or accrued within the 
129.5   taxable year under this chapter and income taxes paid to any 
129.6   other state or to any province or territory of Canada, to the 
129.7   extent allowed as a deduction under section 63(d) of the 
129.8   Internal Revenue Code, but the addition may not be more than the 
129.9   amount by which the itemized deductions as allowed under section 
129.10  63(d) of the Internal Revenue Code exceeds the amount of the 
129.11  standard deduction as defined in section 63(c) of the Internal 
129.12  Revenue Code.  For the purpose of this paragraph, the 
129.13  disallowance of itemized deductions under section 68 of the 
129.14  Internal Revenue Code of 1986, income tax is the last itemized 
129.15  deduction disallowed; 
129.16     (3) the capital gain amount of a lump sum distribution to 
129.17  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
129.18  Reform Act of 1986, Public Law Number 99-514, applies; 
129.19     (4) the amount of income taxes paid or accrued within the 
129.20  taxable year under this chapter and income taxes paid to any 
129.21  other state or any province or territory of Canada, to the 
129.22  extent allowed as a deduction in determining federal adjusted 
129.23  gross income.  For the purpose of this paragraph, income taxes 
129.24  do not include the taxes imposed by sections 290.0922, 
129.25  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
129.26     (5) the amount of loss or expense included in federal 
129.27  taxable income under section 1366 of the Internal Revenue Code 
129.28  flowing from a corporation that has a valid election in effect 
129.29  for the taxable year under section 1362 of the Internal Revenue 
129.30  Code, but which is not allowed to be an "S" corporation under 
129.31  section 290.9725; and 
129.32     (6) the amount of any distributions in cash or property 
129.33  made to a shareholder during the taxable year by a corporation 
129.34  that has a valid election in effect for the taxable year under 
129.35  section 1362 of the Internal Revenue Code, but which is not 
129.36  allowed to be an "S" corporation under section 290.9725 to the 
130.1   extent not already included in federal taxable income under 
130.2   section 1368 of the Internal Revenue Code.; and 
130.3      (7) the amount of a partner's pro rata share of net income 
130.4   which does not flow through to the partner because the 
130.5   partnership elected to pay the tax on the income under section 
130.6   6242(a)(2) of the Internal Revenue Code. 
130.7      Sec. 4.  Minnesota Statutes 1997 Supplement, section 
130.8   290.01, subdivision 19c, is amended to read: 
130.9      Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
130.10  INCOME.] For corporations, there shall be added to federal 
130.11  taxable income: 
130.12     (1) the amount of any deduction taken for federal income 
130.13  tax purposes for income, excise, or franchise taxes based on net 
130.14  income or related minimum taxes paid by the corporation to 
130.15  Minnesota, another state, a political subdivision of another 
130.16  state, the District of Columbia, or any foreign country or 
130.17  possession of the United States; 
130.18     (2) interest not subject to federal tax upon obligations 
130.19  of:  the United States, its possessions, its agencies, or its 
130.20  instrumentalities; the state of Minnesota or any other state, 
130.21  any of its political or governmental subdivisions, any of its 
130.22  municipalities, or any of its governmental agencies or 
130.23  instrumentalities; the District of Columbia; or Indian tribal 
130.24  governments; 
130.25     (3) exempt-interest dividends received as defined in 
130.26  section 852(b)(5) of the Internal Revenue Code; 
130.27     (4) the amount of any net operating loss deduction taken 
130.28  for federal income tax purposes under section 172 or 832(c)(10) 
130.29  of the Internal Revenue Code or operations loss deduction under 
130.30  section 810 of the Internal Revenue Code; 
130.31     (5) the amount of any special deductions taken for federal 
130.32  income tax purposes under sections 241 to 247 of the Internal 
130.33  Revenue Code; 
130.34     (6) losses from the business of mining, as defined in 
130.35  section 290.05, subdivision 1, clause (a), that are not subject 
130.36  to Minnesota income tax; 
131.1      (7) the amount of any capital losses deducted for federal 
131.2   income tax purposes under sections 1211 and 1212 of the Internal 
131.3   Revenue Code; 
131.4      (8) the amount of any charitable contributions deducted for 
131.5   federal income tax purposes under section 170 of the Internal 
131.6   Revenue Code; 
131.7      (9) the exempt foreign trade income of a foreign sales 
131.8   corporation under sections 921(a) and 291 of the Internal 
131.9   Revenue Code; 
131.10     (10) the amount of percentage depletion deducted under 
131.11  sections 611 through 614 and 291 of the Internal Revenue Code; 
131.12     (11) for certified pollution control facilities placed in 
131.13  service in a taxable year beginning before December 31, 1986, 
131.14  and for which amortization deductions were elected under section 
131.15  169 of the Internal Revenue Code of 1954, as amended through 
131.16  December 31, 1985, the amount of the amortization deduction 
131.17  allowed in computing federal taxable income for those 
131.18  facilities; 
131.19     (12) the amount of any deemed dividend from a foreign 
131.20  operating corporation determined pursuant to section 290.17, 
131.21  subdivision 4, paragraph (g); and 
131.22     (13) the amount of any environmental tax paid under section 
131.23  59(a) of the Internal Revenue Code.; and 
131.24     (14) the amount of a partner's pro rata share of net income 
131.25  which does not flow through to the partner because the 
131.26  partnership elected to pay the tax on the income under section 
131.27  6242(a)(2) of the Internal Revenue Code. 
131.28     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
131.29  290.01, subdivision 31, is amended to read: 
131.30     Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
131.31  defined otherwise, "Internal Revenue Code" means the Internal 
131.32  Revenue Code of 1986, as amended through December 31, 1996, and 
131.33  includes the provisions of section 1(a) and (b) of Public Law 
131.34  Number 104-117 1997. 
131.35     Sec. 6.  Minnesota Statutes 1996, section 290.06, 
131.36  subdivision 2c, is amended to read: 
132.1      Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
132.2   AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
132.3   married individuals filing joint returns and surviving spouses 
132.4   as defined in section 2(a) of the Internal Revenue Code must be 
132.5   computed by applying to their taxable net income the following 
132.6   schedule of rates: 
132.7      (1) On the first $19,910, 6 percent; 
132.8      (2) On all over $19,910, but not over $79,120, 8 percent; 
132.9      (3) On all over $79,120, 8.5 percent. 
132.10     Married individuals filing separate returns, estates, and 
132.11  trusts must compute their income tax by applying the above rates 
132.12  to their taxable income, except that the income brackets will be 
132.13  one-half of the above amounts.  
132.14     (b) The income taxes imposed by this chapter upon unmarried 
132.15  individuals must be computed by applying to taxable net income 
132.16  the following schedule of rates: 
132.17     (1) On the first $13,620, 6 percent; 
132.18     (2) On all over $13,620, but not over $44,750, 8 percent; 
132.19     (3) On all over $44,750, 8.5 percent. 
132.20     (c) The income taxes imposed by this chapter upon unmarried 
132.21  individuals qualifying as a head of household as defined in 
132.22  section 2(b) of the Internal Revenue Code must be computed by 
132.23  applying to taxable net income the following schedule of rates: 
132.24     (1) On the first $16,770, 6 percent; 
132.25     (2) On all over $16,770, but not over $67,390, 8 percent; 
132.26     (3) On all over $67,390, 8.5 percent. 
132.27     (d) In lieu of a tax computed according to the rates set 
132.28  forth in this subdivision, the tax of any individual taxpayer 
132.29  whose taxable net income for the taxable year is less than an 
132.30  amount determined by the commissioner must be computed in 
132.31  accordance with tables prepared and issued by the commissioner 
132.32  of revenue based on income brackets of not more than $100.  The 
132.33  amount of tax for each bracket shall be computed at the rates 
132.34  set forth in this subdivision, provided that the commissioner 
132.35  may disregard a fractional part of a dollar unless it amounts to 
132.36  50 cents or more, in which case it may be increased to $1. 
133.1      (e) An individual who is not a Minnesota resident for the 
133.2   entire year must compute the individual's Minnesota income tax 
133.3   as provided in this subdivision.  After the application of the 
133.4   nonrefundable credits provided in this chapter, the tax 
133.5   liability must then be multiplied by a fraction in which:  
133.6      (1) The numerator is the individual's Minnesota source 
133.7   federal adjusted gross income as defined in section 62 of the 
133.8   Internal Revenue Code increased by the addition additions 
133.9   required for interest income from non-Minnesota state and 
133.10  municipal bonds under section 290.01, subdivision 19a, clause 
133.11  clauses (1) and (7), after applying the allocation and 
133.12  assignability provisions of section 290.081, clause (a), or 
133.13  290.17; and 
133.14     (2) the denominator is the individual's federal adjusted 
133.15  gross income as defined in section 62 of the Internal Revenue 
133.16  Code of 1986, as amended through April 15, 1995, increased by 
133.17  the addition required for interest income from non-Minnesota 
133.18  state and municipal bonds amounts specified under section 
133.19  290.01, subdivision 19a, clause clauses (1) and (7). 
133.20     Sec. 7.  Minnesota Statutes 1996, section 290.067, 
133.21  subdivision 2a, is amended to read: 
133.22     Subd. 2a.  [INCOME.] (a) For purposes of this section, 
133.23  "income" means the sum of the following: 
133.24     (1) federal adjusted gross income as defined in section 62 
133.25  of the Internal Revenue Code; and 
133.26     (2) the sum of the following amounts to the extent not 
133.27  included in clause (1): 
133.28     (i) all nontaxable income; 
133.29     (ii) the amount of a passive activity loss that is not 
133.30  disallowed as a result of section 469, paragraph (i) or (m) of 
133.31  the Internal Revenue Code and the amount of passive activity 
133.32  loss carryover allowed under section 469(b) of the Internal 
133.33  Revenue Code; 
133.34     (iii) an amount equal to the total of any discharge of 
133.35  qualified farm indebtedness of a solvent individual excluded 
133.36  from gross income under section 108(g) of the Internal Revenue 
134.1   Code; 
134.2      (iv) cash public assistance and relief; 
134.3      (v) any pension or annuity (including railroad retirement 
134.4   benefits, all payments received under the federal Social 
134.5   Security Act, supplemental security income, and veterans 
134.6   benefits), which was not exclusively funded by the claimant or 
134.7   spouse, or which was funded exclusively by the claimant or 
134.8   spouse and which funding payments were excluded from federal 
134.9   adjusted gross income in the years when the payments were made; 
134.10     (vi) interest received from the federal or a state 
134.11  government or any instrumentality or political subdivision 
134.12  thereof; 
134.13     (vii) workers' compensation; 
134.14     (viii) nontaxable strike benefits; 
134.15     (ix) the gross amounts of payments received in the nature 
134.16  of disability income or sick pay as a result of accident, 
134.17  sickness, or other disability, whether funded through insurance 
134.18  or otherwise; 
134.19     (x) a lump sum distribution under section 402(e)(3) of the 
134.20  Internal Revenue Code; 
134.21     (xi) contributions made by the claimant to an individual 
134.22  retirement account, including a qualified voluntary employee 
134.23  contribution; simplified employee pension plan; self-employed 
134.24  retirement plan; cash or deferred arrangement plan under section 
134.25  401(k) of the Internal Revenue Code; or deferred compensation 
134.26  plan under section 457 of the Internal Revenue Code; and 
134.27     (xii) nontaxable scholarship or fellowship grants. 
134.28     In the case of an individual who files an income tax return 
134.29  on a fiscal year basis, the term "federal adjusted gross income" 
134.30  means federal adjusted gross income reflected in the fiscal year 
134.31  ending in the next calendar year.  Federal adjusted gross income 
134.32  may not be reduced by the amount of a net operating loss 
134.33  carryback or carryforward or a capital loss carryback or 
134.34  carryforward allowed for the year. 
134.35     (b) "Income" does not include: 
134.36     (1) amounts excluded pursuant to the Internal Revenue Code, 
135.1   sections 101(a), and 102, and 121; 
135.2      (2) amounts of any pension or annuity that were exclusively 
135.3   funded by the claimant or spouse if the funding payments were 
135.4   not excluded from federal adjusted gross income in the years 
135.5   when the payments were made; 
135.6      (3) surplus food or other relief in kind supplied by a 
135.7   governmental agency; 
135.8      (4) relief granted under chapter 290A; and 
135.9      (5) child support payments received under a temporary or 
135.10  final decree of dissolution or legal separation. 
135.11     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
135.12  290.0671, subdivision 1, is amended to read: 
135.13     Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
135.14  a credit against the tax imposed by this chapter equal to a 
135.15  percentage of the credit for which the individual is eligible 
135.16  under section 32 of the Internal Revenue Code disregarding the 
135.17  supplemental child credit of clause (m)[(n)].  The percentage is 
135.18  15 for individuals without a qualifying child, and 25 for 
135.19  individuals with at least one qualifying child.  For purposes of 
135.20  this section, "qualifying child" has the meaning given in 
135.21  section 32(c)(3) of the Internal Revenue Code. 
135.22     For a nonresident or part-year resident, the credit 
135.23  determined under section 32 of the Internal Revenue Code must be 
135.24  allocated based on the percentage calculated under section 
135.25  290.06, subdivision 2c, paragraph (e). 
135.26     For a person who was a resident for the entire tax year and 
135.27  has earned income not subject to tax under this chapter, the 
135.28  credit must be allocated based on the ratio of federal adjusted 
135.29  gross income reduced by the earned income not subject to tax 
135.30  under this chapter over federal adjusted gross income. 
135.31     Sec. 9.  Minnesota Statutes 1996, section 290.0921, 
135.32  subdivision 3a, is amended to read: 
135.33     Subd. 3a.  [EXEMPTIONS.] The following entities are exempt 
135.34  from the tax imposed by this section: 
135.35     (1) cooperatives taxable under subchapter T of the Internal 
135.36  Revenue Code or organized under chapter 308 or a similar law of 
136.1   another state; 
136.2      (2) corporations subject to tax under section 60A.15, 
136.3   subdivision 1; 
136.4      (3) real estate investment trusts; 
136.5      (4) regulated investment companies or a fund thereof; and 
136.6      (5) entities having a valid election in effect under 
136.7   section 860D(b) of the Internal Revenue Code.; and 
136.8      (6) small corporations exempt from the federal alternative 
136.9   minimum tax under section 55(e) of the Internal Revenue Code. 
136.10     Sec. 10.  Minnesota Statutes 1996, section 290A.03, 
136.11  subdivision 3, is amended to read: 
136.12     Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
136.13  following:  
136.14     (a) federal adjusted gross income as defined in the 
136.15  Internal Revenue Code; and 
136.16     (b) the sum of the following amounts to the extent not 
136.17  included in clause (a):  
136.18     (i) all nontaxable income; 
136.19     (ii) the amount of a passive activity loss that is not 
136.20  disallowed as a result of section 469, paragraph (i) or (m) of 
136.21  the Internal Revenue Code and the amount of passive activity 
136.22  loss carryover allowed under section 469(b) of the Internal 
136.23  Revenue Code; 
136.24     (iii) an amount equal to the total of any discharge of 
136.25  qualified farm indebtedness of a solvent individual excluded 
136.26  from gross income under section 108(g) of the Internal Revenue 
136.27  Code; 
136.28     (iv) cash public assistance and relief; 
136.29     (v) any pension or annuity (including railroad retirement 
136.30  benefits, all payments received under the federal Social 
136.31  Security Act, supplemental security income, and veterans 
136.32  benefits), which was not exclusively funded by the claimant or 
136.33  spouse, or which was funded exclusively by the claimant or 
136.34  spouse and which funding payments were excluded from federal 
136.35  adjusted gross income in the years when the payments were made; 
136.36     (vi) interest received from the federal or a state 
137.1   government or any instrumentality or political subdivision 
137.2   thereof; 
137.3      (vii) workers' compensation; 
137.4      (viii) nontaxable strike benefits; 
137.5      (ix) the gross amounts of payments received in the nature 
137.6   of disability income or sick pay as a result of accident, 
137.7   sickness, or other disability, whether funded through insurance 
137.8   or otherwise; 
137.9      (x) a lump sum distribution under section 402(e)(3) of the 
137.10  Internal Revenue Code; 
137.11     (xi) contributions made by the claimant to an individual 
137.12  retirement account, including a qualified voluntary employee 
137.13  contribution; simplified employee pension plan; self-employed 
137.14  retirement plan; cash or deferred arrangement plan under section 
137.15  401(k) of the Internal Revenue Code; or deferred compensation 
137.16  plan under section 457 of the Internal Revenue Code; and 
137.17     (xii) nontaxable scholarship or fellowship grants.  
137.18     In the case of an individual who files an income tax return 
137.19  on a fiscal year basis, the term "federal adjusted gross income" 
137.20  shall mean federal adjusted gross income reflected in the fiscal 
137.21  year ending in the calendar year.  Federal adjusted gross income 
137.22  shall not be reduced by the amount of a net operating loss 
137.23  carryback or carryforward or a capital loss carryback or 
137.24  carryforward allowed for the year.  
137.25     (2) "Income" does not include 
137.26     (a) amounts excluded pursuant to the Internal Revenue Code, 
137.27  sections 101(a), and 102, and 121; 
137.28     (b) amounts of any pension or annuity which was exclusively 
137.29  funded by the claimant or spouse and which funding payments were 
137.30  not excluded from federal adjusted gross income in the years 
137.31  when the payments were made; 
137.32     (c) surplus food or other relief in kind supplied by a 
137.33  governmental agency; 
137.34     (d) relief granted under this chapter; or 
137.35     (e) child support payments received under a temporary or 
137.36  final decree of dissolution or legal separation.  
138.1      (3) The sum of the following amounts may be subtracted from 
138.2   income:  
138.3      (a) for the claimant's first dependent, the exemption 
138.4   amount multiplied by 1.4; 
138.5      (b) for the claimant's second dependent, the exemption 
138.6   amount multiplied by 1.3; 
138.7      (c) for the claimant's third dependent, the exemption 
138.8   amount multiplied by 1.2; 
138.9      (d) for the claimant's fourth dependent, the exemption 
138.10  amount multiplied by 1.1; 
138.11     (e) for the claimant's fifth dependent, the exemption 
138.12  amount; and 
138.13     (f) if the claimant or claimant's spouse was disabled or 
138.14  attained the age of 65 on or before December 31 of the year for 
138.15  which the taxes were levied or rent paid, the exemption amount.  
138.16     For purposes of this subdivision, the "exemption amount" 
138.17  means the exemption amount under section 151(d) of the Internal 
138.18  Revenue Code for the taxable year for which the income is 
138.19  reported.  
138.20     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
138.21  290A.03, subdivision 15, is amended to read: 
138.22     Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
138.23  means the Internal Revenue Code of 1986, as amended through 
138.24  December 31, 1996 1997. 
138.25     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
138.26  291.005, subdivision 1, is amended to read: 
138.27     Subdivision 1.  Unless the context otherwise clearly 
138.28  requires, the following terms used in this chapter shall have 
138.29  the following meanings: 
138.30     (1) "Federal gross estate" means the gross estate of a 
138.31  decedent as valued and otherwise determined for federal estate 
138.32  tax purposes by federal taxing authorities pursuant to the 
138.33  provisions of the Internal Revenue Code. 
138.34     (2) "Minnesota gross estate" means the federal gross estate 
138.35  of a decedent after (a) excluding therefrom any property 
138.36  included therein which has its situs outside Minnesota and (b) 
139.1   including therein any property omitted from the federal gross 
139.2   estate which is includable therein, has its situs in Minnesota, 
139.3   and was not disclosed to federal taxing authorities.  
139.4      (3) "Personal representative" means the executor, 
139.5   administrator or other person appointed by the court to 
139.6   administer and dispose of the property of the decedent.  If 
139.7   there is no executor, administrator or other person appointed, 
139.8   qualified, and acting within this state, then any person in 
139.9   actual or constructive possession of any property having a situs 
139.10  in this state which is included in the federal gross estate of 
139.11  the decedent shall be deemed to be a personal representative to 
139.12  the extent of the property and the Minnesota estate tax due with 
139.13  respect to the property. 
139.14     (4) "Resident decedent" means an individual whose domicile 
139.15  at the time of death was in Minnesota. 
139.16     (5) "Nonresident decedent" means an individual whose 
139.17  domicile at the time of death was not in Minnesota. 
139.18     (6) "Situs of property" means, with respect to real 
139.19  property, the state or country in which it is located; with 
139.20  respect to tangible personal property, the state or country in 
139.21  which it was normally kept or located at the time of the 
139.22  decedent's death; and with respect to intangible personal 
139.23  property, the state or country in which the decedent was 
139.24  domiciled at death. 
139.25     (7) "Commissioner" means the commissioner of revenue or any 
139.26  person to whom the commissioner has delegated functions under 
139.27  this chapter. 
139.28     (8) "Internal Revenue Code" means the United States 
139.29  Internal Revenue Code of 1986, as amended through December 31, 
139.30  1996, and includes the provisions of section 1(a)(4) of Public 
139.31  Law Number 104-117 1997. 
139.32     Sec. 13.  [INSTRUCTION TO REVISOR.] 
139.33     Each place in Minnesota Statutes that refers to section 
139.34  851(h) or 851(q) of the Internal Revenue Code, the revisor in 
139.35  the next edition of Minnesota Statutes shall substitute "851(g)" 
139.36  for those references. 
140.1      Sec. 14.  [EFFECTIVE DATES.] 
140.2      Sections 1, 3, 4, and 6 to 10 are effective for tax years 
140.3   beginning after December 31, 1997.  Sections 5, 11, and 12 are 
140.4   effective at the same time federal changes made by the Taxpayer 
140.5   Relief Act of 1997, Public Law Number 105-34, which are 
140.6   incorporated into Minnesota Statutes, chapters 290, 290A, and 
140.7   291 by these sections, become effective for federal tax purposes.
140.8                              ARTICLE 7
140.9                        SALES AND EXCISE TAXES
140.10     Section 1.  Minnesota Statutes 1997 Supplement, section 
140.11  297A.01, subdivision 4, is amended to read: 
140.12     Subd. 4.  (a) A "retail sale" or "sale at retail" means a 
140.13  sale for any purpose other than resale in the regular course of 
140.14  business.  
140.15     (b) Property utilized by the owner only by leasing such 
140.16  property to others or by holding it in an effort to so lease it, 
140.17  and which is put to no use by the owner other than resale after 
140.18  such lease or effort to lease, shall be considered property 
140.19  purchased for resale.  
140.20     (c) Master computer software programs that are purchased 
140.21  and used to make copies for sale or lease are considered 
140.22  property purchased for resale.  
140.23     (d) Sales of building materials, supplies and equipment to 
140.24  owners, contractors, subcontractors or builders for the erection 
140.25  of buildings or the alteration, repair or improvement of real 
140.26  property are "retail sales" or "sales at retail" in whatever 
140.27  quantity sold and whether or not for purpose of resale in the 
140.28  form of real property or otherwise.  
140.29     (e) A sale of carpeting, linoleum, or other similar floor 
140.30  covering which includes installation of the carpeting, linoleum, 
140.31  or other similar floor covering is a contract for the 
140.32  improvement of real property.  
140.33     (f) A sale of shrubbery, plants, sod, trees, and similar 
140.34  items that includes installation of the shrubbery, plants, sod, 
140.35  trees, and similar items is a contract for the improvement of 
140.36  real property.  
141.1      (g) Aircraft and parts for the repair thereof purchased by 
141.2   a nonprofit, incorporated flying club or association utilized 
141.3   solely by the corporation by leasing such aircraft to 
141.4   shareholders of the corporation shall be considered property 
141.5   purchased for resale.  The leasing of the aircraft to the 
141.6   shareholders by the flying club or association shall be 
141.7   considered a sale.  Leasing of aircraft utilized by a lessee for 
141.8   the purpose of leasing to others, whether or not the lessee also 
141.9   utilizes the aircraft for flight instruction where no separate 
141.10  charge is made for aircraft rental or for charter service, shall 
141.11  be considered a purchase for resale; provided, however, that a 
141.12  proportionate share of the lease payment reflecting use for 
141.13  flight instruction or charter service is subject to tax pursuant 
141.14  to section 297A.14. 
141.15     (h) Tangible personal property that is awarded as prizes in 
141.16  a game of skill or chance, are considered property purchased for 
141.17  resale.  Tangible personal property awarded as prizes or 
141.18  promotions in connection with lawful gambling, as defined in 
141.19  section 349.12, the state lottery, or other activities shall not 
141.20  be considered property purchased for resale. 
141.21     (i) Tangible personal property that is utilized or employed 
141.22  in the furnishing or providing of services under section 
141.23  297A.01, subdivision 3, paragraph (d), or in conducting lawful 
141.24  gambling under chapter 349 or the state lottery under chapter 
141.25  349A, including property given as promotional items, shall not 
141.26  be considered property purchased for resale.  Machines, 
141.27  equipment, or devices that are used to furnish, provide, or 
141.28  dispense goods or services, including coin-operated devices, 
141.29  shall not be considered property purchased for resale. 
141.30     Sec. 2.  Minnesota Statutes 1996, section 297A.01, 
141.31  subdivision 8, is amended to read: 
141.32     Subd. 8.  "Sales price" means the total consideration 
141.33  valued in money, for a retail sale whether paid in money or 
141.34  otherwise, excluding therefrom any amount allowed as credit for 
141.35  tangible personal property taken in trade for resale, without 
141.36  deduction for the cost of the property sold, cost of materials 
142.1   used, labor or service cost, interest, or discount allowed after 
142.2   the sale is consummated, the cost of transportation incurred 
142.3   prior to the time of sale, any amount for which credit is given 
142.4   to the purchaser by the seller, or any other expense 
142.5   whatsoever.  A deduction may be made for charges of up to 15 
142.6   percent in lieu of tips, if the consideration for such charges 
142.7   is separately stated.  No deduction shall be allowed for charges 
142.8   for services that are part of a sale.  Except as otherwise 
142.9   provided in this subdivision, a deduction may also be made for 
142.10  interest, financing, or carrying charges, charges for labor or 
142.11  services used in installing or applying the property sold or 
142.12  transportation charges if the transportation occurs after the 
142.13  retail sale of the property only if the consideration for such 
142.14  charges is separately stated.  "Sales price," for purposes of 
142.15  sales of ready-mixed concrete sold from a ready-mixed concrete 
142.16  truck, includes any transportation, delivery, or other service 
142.17  charges, and no deduction is allowed for those charges, whether 
142.18  or not the charges are separately stated.  There shall not be 
142.19  included in "sales price" cash discounts allowed and taken on 
142.20  sales or the amount refunded either in cash or in credit for 
142.21  property returned by purchasers. 
142.22     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
142.23  297A.01, subdivision 16, is amended to read: 
142.24     Subd. 16.  [CAPITAL EQUIPMENT.] (a) Capital equipment means 
142.25  machinery and equipment purchased or leased for use in this 
142.26  state and used by the purchaser or lessee primarily for 
142.27  manufacturing, fabricating, mining, or refining tangible 
142.28  personal property to be sold ultimately at retail and for 
142.29  electronically transmitting results retrieved by a customer of 
142.30  an on-line computerized data retrieval system.  
142.31     (b) Capital equipment includes all machinery and equipment 
142.32  that is essential to the integrated production process.  Capital 
142.33  equipment includes, but is not limited to: 
142.34     (1) machinery and equipment used or required to operate, 
142.35  control, or regulate the production equipment; 
142.36     (2) machinery and equipment used for research and 
143.1   development, design, quality control, and testing activities; 
143.2      (3) environmental control devices that are used to maintain 
143.3   conditions such as temperature, humidity, light, or air pressure 
143.4   when those conditions are essential to and are part of the 
143.5   production process; 
143.6      (4) materials and supplies necessary to construct and 
143.7   install machinery or equipment; 
143.8      (5) repair and replacement parts, including accessories, 
143.9   whether purchased as spare parts, repair parts, or as upgrades 
143.10  or modifications to machinery or equipment; 
143.11     (6) materials used for foundations that support machinery 
143.12  or equipment; or 
143.13     (7) materials used to construct and install special purpose 
143.14  buildings used in the production process; or 
143.15     (8) ready-mixed concrete trucks in which the ready-mixed 
143.16  concrete is mixed as part of the delivery process. 
143.17     (c) Capital equipment does not include the following: 
143.18     (1) motor vehicles taxed under chapter 297B; 
143.19     (2) machinery or equipment used to receive or store raw 
143.20  materials; 
143.21     (3) building materials; 
143.22     (4) machinery or equipment used for nonproduction purposes, 
143.23  including, but not limited to, the following:  machinery and 
143.24  equipment used for plant security, fire prevention, first aid, 
143.25  and hospital stations; machinery and equipment used in support 
143.26  operations or for administrative purposes; machinery and 
143.27  equipment used solely for pollution control, prevention, or 
143.28  abatement; and machinery and equipment used in plant cleaning, 
143.29  disposal of scrap and waste, plant communications, space 
143.30  heating, lighting, or safety; 
143.31     (5) "farm machinery" as defined by subdivision 15, and 
143.32  "aquaculture production equipment" as defined by subdivision 19; 
143.33  or 
143.34     (6) any other item that is not essential to the integrated 
143.35  process of manufacturing, fabricating, mining, or refining. 
143.36     (d) For purposes of this subdivision: 
144.1      (1) "Equipment" means independent devices or tools separate 
144.2   from machinery but essential to an integrated production 
144.3   process, including computers and software, used in operating, 
144.4   controlling, or regulating machinery and equipment; and any 
144.5   subunit or assembly comprising a component of any machinery or 
144.6   accessory or attachment parts of machinery, such as tools, dies, 
144.7   jigs, patterns, and molds. 
144.8      (2) "Fabricating" means to make, build, create, produce, or 
144.9   assemble components or property to work in a new or different 
144.10  manner. 
144.11     (3) "Machinery" means mechanical, electronic, or electrical 
144.12  devices, including computers and software, that are purchased or 
144.13  constructed to be used for the activities set forth in paragraph 
144.14  (a), beginning with the removal of raw materials from inventory 
144.15  through the completion of the product, including packaging of 
144.16  the product. 
144.17     (4) "Manufacturing" means an operation or series of 
144.18  operations where raw materials are changed in form, composition, 
144.19  or condition by machinery and equipment and which results in the 
144.20  production of a new article of tangible personal property.  For 
144.21  purposes of this subdivision, "manufacturing" includes the 
144.22  generation of electricity or steam to be sold at retail. 
144.23     (5) "Mining" means the extraction of minerals, ores, stone, 
144.24  and peat. 
144.25     (6) "On-line data retrieval system" means a system whose 
144.26  cumulation of information is equally available and accessible to 
144.27  all its customers. 
144.28     (7) "Pollution control equipment" means machinery and 
144.29  equipment used to eliminate, prevent, or reduce pollution 
144.30  resulting from an activity described in paragraph (a). 
144.31     (8) "Primarily" means machinery and equipment used 50 
144.32  percent or more of the time in an activity described in 
144.33  paragraph (a). 
144.34     (9) "Refining" means the process of converting a natural 
144.35  resource to a product, including the treatment of water to be 
144.36  sold at retail. 
145.1      (e) For purposes of this subdivision the requirement that 
145.2   the machinery or equipment "must be used by the purchaser or 
145.3   lessee" means that the person who purchases or leases the 
145.4   machinery or equipment must be the one who uses it for the 
145.5   qualifying purpose.  When a contractor buys and installs 
145.6   machinery or equipment as part of an improvement to real 
145.7   property, only the contractor is considered the purchaser. 
145.8      Sec. 4.  Minnesota Statutes 1996, section 297A.02, 
145.9   subdivision 2, is amended to read: 
145.10     Subd. 2.  [MACHINERY AND EQUIPMENT.] Notwithstanding the 
145.11  provisions of subdivision 1, the rate of the excise tax imposed 
145.12  upon sales of farm machinery and aquaculture production 
145.13  equipment is: 
145.14     for purchases prior to July 1, 1998, 2.5 percent, 
145.15     for purchases after June 30, 1998, and prior to July 1, 
145.16  1999, 1.5 percent, and 
145.17     purchases after June 30, 1999 are exempt. 
145.18     Sec. 5.  Minnesota Statutes 1996, section 297A.02, 
145.19  subdivision 4, is amended to read: 
145.20     Subd. 4.  [MANUFACTURED HOUSING AND PARK TRAILERS.] 
145.21  Notwithstanding the provisions of subdivision 1, for sales at 
145.22  retail of manufactured homes used for residential purposes and 
145.23  new or used park trailers, as defined in section 168.011, 
145.24  subdivision 8, paragraph (b), the excise tax is imposed upon 65 
145.25  percent of the sales price dealer's cost of the home or, and for 
145.26  sales of new and used park trailers, as defined in section 
145.27  168.011, subdivision 8, paragraph (b), the excise tax is imposed 
145.28  upon 65 percent of the sale price of the park trailer. 
145.29     Sec. 6.  Minnesota Statutes 1996, section 297A.135, 
145.30  subdivision 4, is amended to read: 
145.31     Subd. 4.  [EXEMPTION EXEMPTIONS.] (a) The tax and the fee 
145.32  imposed by this section do not apply to a lease or rental of (1) 
145.33  a vehicle to be used by the lessee to provide a licensed taxi 
145.34  service; (2) a hearse or limousine used in connection with a 
145.35  burial or funeral service; or (3) a van designed or adapted 
145.36  primarily for transporting property rather than passengers. 
146.1      (b) The tax and the fee imposed by this section do not 
146.2   apply if: 
146.3      (1) the lessor either (i) leases during the calendar year 
146.4   no more than 20 registered vehicles or (ii) had during the 
146.5   previous calendar year no more than $50,000 in gross receipts 
146.6   that would otherwise, except for the exemption provided by this 
146.7   paragraph, have been subject to tax under this section; 
146.8      (2) the lessor pays the registration tax under chapter 168; 
146.9   and 
146.10     (3) the lessor elects not to charge the fee. 
146.11     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
146.12  297A.14, subdivision 4, is amended to read: 
146.13     Subd. 4.  [DE MINIMIS EXEMPTION.] Purchases subject to use 
146.14  tax under this section are exempt if (1) the purchase is made by 
146.15  an individual for personal use, and (2) the total amount of 
146.16  purchases made by a person, other than a person who has or is 
146.17  obligated to have a permit under section 297A.04, that are 
146.18  subject to the use tax do, does not exceed $770 in the calendar 
146.19  year.  For purposes of this subdivision, "personal use" includes 
146.20  purchases for gifts.  If an individual a person makes purchases, 
146.21  which are subject to use tax, of more than $770 in the calendar 
146.22  year the individual person must pay the use tax on the entire 
146.23  amount.  This exemption does not apply to purchases made from 
146.24  retailers who are required or registered to collect taxes under 
146.25  this chapter. 
146.26     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
146.27  297A.25, subdivision 3, is amended to read: 
146.28     Subd. 3.  [MEDICINES; MEDICAL DEVICES.] The gross receipts 
146.29  from the sale of and storage, use, or consumption of prescribed 
146.30  drugs, prescribed medicine and insulin, intended for use, 
146.31  internal or external, in the cure, mitigation, treatment or 
146.32  prevention of illness or disease in human beings are exempt, 
146.33  together with prescription glasses, fever thermometers, 
146.34  therapeutic, and prosthetic devices.  "Prescribed drugs" or 
146.35  "prescribed medicine" includes over-the-counter drugs or 
146.36  medicine prescribed by a licensed physician.  "Therapeutic 
147.1   devices" includes reusable finger pricking devices for the 
147.2   extraction of blood, blood glucose monitoring machines, and 
147.3   other diagnostic agents used in diagnosing, monitoring, or 
147.4   treating diabetes.  Nonprescription analgesics consisting 
147.5   principally (determined by the weight of all ingredients) of 
147.6   acetaminophen, acetylsalicylic acid, ibuprofen, ketoprofen, 
147.7   naproxen, and other nonprescription analgesics that are approved 
147.8   by the United States Food and Drug Administration for internal 
147.9   use by human beings, or a combination thereof, are exempt. 
147.10     Medical supplies purchased by a licensed health care 
147.11  facility or licensed health care professional to provide medical 
147.12  treatment to residents or patients are exempt.  The exemption 
147.13  does not apply to medical equipment or components of medical 
147.14  equipment, laboratory supplies, radiological supplies, and other 
147.15  items used in providing medical services.  For purposes of this 
147.16  subdivision, "medical supplies" means Band-Aids, bandages, gauze 
147.17  pads and strips, cotton applicators, antiseptics, 
147.18  nonprescription drugs, eye solution, and other similar supplies 
147.19  used directly on the resident or patient in providing medical 
147.20  services. 
147.21     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
147.22  297A.25, subdivision 9, is amended to read: 
147.23     Subd. 9.  [MATERIALS CONSUMED IN PRODUCTION.] The gross 
147.24  receipts from the sale of and the storage, use, or consumption 
147.25  of all materials, including chemicals, fuels, petroleum 
147.26  products, lubricants, packaging materials, including returnable 
147.27  containers used in packaging food and beverage products, feeds, 
147.28  seeds, fertilizers, electricity, gas and steam, used or consumed 
147.29  in agricultural or industrial production of personal property 
147.30  intended to be sold ultimately at retail, whether or not the 
147.31  item so used becomes an ingredient or constituent part of the 
147.32  property produced are exempt.  Seeds, trees, fertilizers, and 
147.33  herbicides purchased for use by farmers in the Conservation 
147.34  Reserve Program under United States Code, title 16, section 
147.35  590h, as amended through December 31, 1991, the Integrated Farm 
147.36  Management Program under section 1627 of Public Law Number 
148.1   101-624, the Wheat and Feed Grain Programs under sections 301 to 
148.2   305 and 401 to 405 of Public Law Number 101-624, and the 
148.3   conservation reserve program under sections 103F.505 to 
148.4   103F.531, are included in this exemption.  Sales to a 
148.5   veterinarian of materials used or consumed in the care, 
148.6   medication, and treatment of horses and agricultural production 
148.7   animals are exempt under this subdivision.  Chemicals used for 
148.8   cleaning food processing machinery and equipment are included in 
148.9   this exemption.  Materials, including chemicals, fuels, and 
148.10  electricity purchased by persons engaged in agricultural or 
148.11  industrial production to treat waste generated as a result of 
148.12  the production process are included in this exemption.  Such 
148.13  production shall include, but is not limited to, research, 
148.14  development, design or production of any tangible personal 
148.15  property, manufacturing, processing (other than by restaurants 
148.16  and consumers) of agricultural products whether vegetable or 
148.17  animal, commercial fishing, refining, smelting, reducing, 
148.18  brewing, distilling, printing, mining, quarrying, lumbering, 
148.19  generating electricity and the production of road building 
148.20  materials.  Such production shall not include painting, 
148.21  cleaning, repairing or similar processing of property except as 
148.22  part of the original manufacturing process.  Machinery, 
148.23  equipment, implements, tools, accessories, appliances, 
148.24  contrivances, furniture and fixtures, used in such production 
148.25  and fuel, electricity, gas or steam used for space heating or 
148.26  lighting, are not included within this exemption; however, 
148.27  accessory tools, equipment and other short lived items, which 
148.28  are separate detachable units used in producing a direct effect 
148.29  upon the product, where such items have an ordinary useful life 
148.30  of less than 12 months, are included within the exemption 
148.31  provided herein.  Electricity used to make snow for outdoor use 
148.32  for ski hills, ski slopes, or ski trails is included in this 
148.33  exemption.  Petroleum and special fuels used in producing or 
148.34  generating power for propelling ready-mixed concrete trucks on 
148.35  the public highways of this state are not included in this 
148.36  exemption. 
149.1      Sec. 10.  Minnesota Statutes 1997 Supplement, section 
149.2   297A.25, subdivision 11, is amended to read: 
149.3      Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
149.4   all sales, including sales in which title is retained by a 
149.5   seller or a vendor or is assigned to a third party under an 
149.6   installment sale or lease purchase agreement under section 
149.7   465.71, of tangible personal property to, and all storage, use 
149.8   or consumption of such property by, the United States and its 
149.9   agencies and instrumentalities, the University of Minnesota, 
149.10  state universities, community colleges, technical colleges, 
149.11  state academies, the Lola and Rudy Perpich Minnesota center for 
149.12  arts education, and an instrumentality of a political 
149.13  subdivision that is accredited as an optional/special function 
149.14  school by the North Central Association of Colleges and Schools, 
149.15  school districts, and public libraries, public library systems, 
149.16  and multicounty, multitype library systems as defined in section 
149.17  134.001, are exempt. 
149.18     As used in this subdivision, "school districts" means 
149.19  public school entities and districts of every kind and nature 
149.20  organized under the laws of the state of Minnesota, including, 
149.21  without limitation, school districts, intermediate school 
149.22  districts, education districts, service cooperatives, secondary 
149.23  vocational cooperative centers, special education cooperatives, 
149.24  joint purchasing cooperatives, telecommunication cooperatives, 
149.25  regional management information centers, and any instrumentality 
149.26  of a school district, as defined in section 471.59. 
149.27     Sales exempted by this subdivision include sales under 
149.28  section 297A.01, subdivision 3, paragraph (f).  
149.29     Sales to hospitals and nursing homes owned and operated by 
149.30  political subdivisions of the state are exempt under this 
149.31  subdivision.  
149.32     The sales to and exclusively for the use of libraries of 
149.33  books, periodicals, audio-visual materials and equipment, 
149.34  photocopiers for use by the public, and all cataloguing and 
149.35  circulation equipment, and cataloguing and circulation software 
149.36  for library use are exempt under this subdivision.  For purposes 
150.1   of this paragraph "libraries" means libraries as defined in 
150.2   section 134.001, county law libraries under chapter 134A, the 
150.3   state library under section 480.09, and the legislative 
150.4   reference library. 
150.5      Sales of supplies and equipment used in the operation of an 
150.6   ambulance service owned and operated by a political subdivision 
150.7   of the state are exempt under this subdivision provided that the 
150.8   supplies and equipment are used in the course of providing 
150.9   medical care.  Sales to a political subdivision of repair and 
150.10  replacement parts for emergency rescue vehicles and fire trucks 
150.11  and apparatus are exempt under this subdivision.  
150.12     Sales to a political subdivision of machinery and 
150.13  equipment, except for motor vehicles, used directly for mixed 
150.14  municipal solid waste management services at a solid waste 
150.15  disposal facility as defined in section 115A.03, subdivision 10, 
150.16  are exempt under this subdivision.  
150.17     Sales to political subdivisions of chore and homemaking 
150.18  services to be provided to elderly or disabled individuals are 
150.19  exempt. 
150.20     Sales to a town of gravel and of machinery, equipment, and 
150.21  accessories, except motor vehicles, used exclusively for road 
150.22  and bridge maintenance are exempt. 
150.23     Sales of telephone services to the department of 
150.24  administration that are used to provide telecommunications 
150.25  services through the intertechnologies revolving fund are exempt 
150.26  under this subdivision. 
150.27     This exemption shall not apply to building, construction or 
150.28  reconstruction materials purchased by a contractor or a 
150.29  subcontractor as a part of a lump-sum contract or similar type 
150.30  of contract with a guaranteed maximum price covering both labor 
150.31  and materials for use in the construction, alteration, or repair 
150.32  of a building or facility.  This exemption does not apply to 
150.33  construction materials purchased by tax exempt entities or their 
150.34  contractors to be used in constructing buildings or facilities 
150.35  which will not be used principally by the tax exempt entities. 
150.36     This exemption does not apply to the leasing of a motor 
151.1   vehicle as defined in section 297B.01, subdivision 5, except for 
151.2   leases entered into by the United States or its agencies or 
151.3   instrumentalities.  
151.4      The tax imposed on sales to political subdivisions of the 
151.5   state under this section applies to all political subdivisions 
151.6   other than those explicitly exempted under this subdivision, 
151.7   notwithstanding section 115A.69, subdivision 6, 116A.25, 
151.8   360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
151.9   469.127, 473.448, 473.545, or 473.608 or any other law to the 
151.10  contrary enacted before 1992. 
151.11     Sales exempted by this subdivision include sales made to 
151.12  other states or political subdivisions of other states, if the 
151.13  sale would be exempt from taxation if it occurred in that state, 
151.14  but do not include sales under section 297A.01, subdivision 3, 
151.15  paragraphs (c) and (e). 
151.16     Sec. 11.  Minnesota Statutes 1996, section 297A.25, is 
151.17  amended by adding a subdivision to read: 
151.18     Subd. 73.  [CONSTRUCTION MATERIALS FOR AN ENVIRONMENTAL 
151.19  LEARNING CENTER.] Construction materials and supplies are exempt 
151.20  from the tax imposed under this section, regardless of whether 
151.21  purchased by the owner or a contractor, subcontractor, or 
151.22  builder, if they are used or consumed in constructing or 
151.23  improving the Long Lake Conservation Center pursuant to the 
151.24  funding provided under Laws 1994, chapter 643, section 23, 
151.25  subdivision 28, as amended by Laws 1995, First Special Session 
151.26  chapter 2, article 1, section 48; and Laws 1996, chapter 463, 
151.27  section 7, subdivision 26.  The tax shall be calculated and paid 
151.28  as if the rate in section 297A.02, subdivision 1, was in effect 
151.29  and a refund applied for in the manner prescribed in section 
151.30  297A.15, subdivision 7. 
151.31     Sec. 12.  Minnesota Statutes 1996, section 297A.25, is 
151.32  amended by adding a subdivision to read: 
151.33     Subd. 74.  [TELEVISION COMMERCIALS AND MATERIALS USED OR 
151.34  CONSUMED IN TELEVISION COMMERCIAL PRODUCTION.] The gross 
151.35  receipts from the sale of and storage, use, or other consumption 
151.36  in Minnesota of tangible personal property which is used or 
152.1   consumed in producing any television commercial, and any such 
152.2   television commercial and the tangible medium of expression in 
152.3   which it is fixed, are exempt.  This subdivision expires for 
152.4   sales made after June 30, 1999. 
152.5      Sec. 13.  Minnesota Statutes 1997 Supplement, section 
152.6   297A.256, subdivision 1, is amended to read: 
152.7      Subdivision 1.  [FUNDRAISING SALES BY NONPROFIT GROUPS.] 
152.8   Notwithstanding the provisions of this chapter, the following 
152.9   sales made by a "nonprofit organization" are exempt from the 
152.10  sales and use tax. 
152.11     (a)(1) All sales made by an organization for fundraising 
152.12  purposes if that organization exists solely for the purpose of 
152.13  providing educational or social activities for young people 
152.14  primarily age 18 and under.  This exemption shall apply only if 
152.15  the gross annual sales receipts of the organization from 
152.16  fundraising do not exceed $10,000. 
152.17     (2) A club, association, or other organization of 
152.18  elementary or secondary school students organized for the 
152.19  purpose of carrying on sports, educational, or other 
152.20  extracurricular activities is a separate organization from the 
152.21  school district or school for purposes of applying the $10,000 
152.22  limit.  This paragraph does not apply if the sales are derived 
152.23  from admission charges or from activities for which the money 
152.24  must be deposited with the school district treasurer under 
152.25  section 123.38, subdivision 2, or be recorded in the same manner 
152.26  as other revenues or expenditures of the school district under 
152.27  section 123.38, subdivision 2b. 
152.28     (b) All sales made by an organization for fundraising 
152.29  purposes if that organization is a senior citizen group or 
152.30  association of groups that in general limits membership to 
152.31  persons age 55 or older and is organized and operated 
152.32  exclusively for pleasure, recreation and other nonprofit 
152.33  purposes and no part of the net earnings inure to the benefit of 
152.34  any private shareholders.  This exemption shall apply only if 
152.35  the gross annual sales receipts of the organization from 
152.36  fundraising do not exceed $10,000. 
153.1      (c) The gross receipts from the sales of tangible personal 
153.2   property at, admission charges for, and sales of food, meals, or 
153.3   drinks at fundraising events sponsored by a nonprofit 
153.4   organization when the entire proceeds, except for the necessary 
153.5   expenses therewith, will be used solely and exclusively for 
153.6   charitable, religious, or educational purposes.  This exemption 
153.7   does not apply to admission charges for events involving bingo 
153.8   or other gambling activities or to charges for use of amusement 
153.9   devices involving bingo or other gambling activities.  For 
153.10  purposes of this paragraph, a "nonprofit organization" means any 
153.11  unit of government, corporation, society, association, 
153.12  foundation, or institution organized and operated for 
153.13  charitable, religious, educational, civic, fraternal, senior 
153.14  citizens' or veterans' purposes, no part of the net earnings of 
153.15  which inures to the benefit of a private individual. 
153.16     If the profits are not used solely and exclusively for 
153.17  charitable, religious, or educational purposes, the entire gross 
153.18  receipts are subject to tax. 
153.19     Each nonprofit organization shall keep a separate 
153.20  accounting record, including receipts and disbursements from 
153.21  each fundraising event.  All deductions from gross receipts must 
153.22  be documented with receipts and other records.  If records are 
153.23  not maintained as required, the entire gross receipts are 
153.24  subject to tax. 
153.25     The exemption provided by this paragraph does not apply to 
153.26  any sale made by or in the name of a nonprofit corporation as 
153.27  the active or passive agent of a person that is not a nonprofit 
153.28  corporation. 
153.29     The exemption for fundraising events under this paragraph 
153.30  is limited to no more than 24 days a year.  Fundraising events 
153.31  conducted on premises leased for more than four five days but 
153.32  less than 30 days do not qualify for this exemption. 
153.33     (d) The gross receipts from the sale or use of tickets or 
153.34  admissions to a golf tournament held in Minnesota are exempt if 
153.35  the beneficiary of the tournament's net proceeds qualifies as a 
153.36  tax-exempt organization under section 501(c)(3) of the Internal 
154.1   Revenue Code, as amended through December 31, 1994, including a 
154.2   tournament conducted on premises leased or occupied for more 
154.3   than four days. 
154.4      Sec. 14.  Minnesota Statutes 1997 Supplement, section 
154.5   297A.48, is amended by adding a subdivision to read: 
154.6      Subd. 9a.  [LOCAL REFERENDUM BEFORE APPLICATION FOR 
154.7   AUTHORITY.] Before a political subdivision requests a special 
154.8   law for a local sales tax that is administered under this 
154.9   section, it shall conduct a referendum on the issue at a general 
154.10  election.  The commissioner of revenue shall prepare a suggested 
154.11  form of question to be presented at the election.  The question 
154.12  shall include, at minimum, information on the proposed tax rate, 
154.13  how the revenues will be used, the total revenue that will be 
154.14  raised before the tax expires, and the estimated length of time 
154.15  that the tax will be in effect. 
154.16     Sec. 15.  Minnesota Statutes 1997 Supplement, section 
154.17  297B.03, is amended to read: 
154.18     297B.03 [EXEMPTIONS.] 
154.19     There is specifically exempted from the provisions of this 
154.20  chapter and from computation of the amount of tax imposed by it 
154.21  the following:  
154.22     (1) Purchase or use, including use under a lease purchase 
154.23  agreement or installment sales contract made pursuant to section 
154.24  465.71, of any motor vehicle by the United States and its 
154.25  agencies and instrumentalities and by any person described in 
154.26  and subject to the conditions provided in section 297A.25, 
154.27  subdivision 18.  
154.28     (2) Purchase or use of any motor vehicle by any person who 
154.29  was a resident of another state at the time of the purchase and 
154.30  who subsequently becomes a resident of Minnesota, provided the 
154.31  purchase occurred more than 60 days prior to the date such 
154.32  person began residing in the state of Minnesota.  
154.33     (3) Purchase or use of any motor vehicle by any person 
154.34  making a valid election to be taxed under the provisions of 
154.35  section 297A.211.  
154.36     (4) Purchase or use of any motor vehicle previously 
155.1   registered in the state of Minnesota when such transfer 
155.2   constitutes a transfer within the meaning of section 351 or 721 
155.3   of the Internal Revenue Code of 1986, as amended through 
155.4   December 31, 1988.  
155.5      (5) Purchase or use of any vehicle owned by a resident of 
155.6   another state and leased to a Minnesota based private or for 
155.7   hire carrier for regular use in the transportation of persons or 
155.8   property in interstate commerce provided the vehicle is titled 
155.9   in the state of the owner or secured party, and that state does 
155.10  not impose a sales tax or sales tax on motor vehicles used in 
155.11  interstate commerce.  
155.12     (6) Purchase or use of a motor vehicle by a private 
155.13  nonprofit or public educational institution for use as an 
155.14  instructional aid in automotive training programs operated by 
155.15  the institution.  "Automotive training programs" includes motor 
155.16  vehicle body and mechanical repair courses but does not include 
155.17  driver education programs.  
155.18     (7) Purchase of a motor vehicle for use as an ambulance by 
155.19  an ambulance service licensed under section 144E.10. 
155.20     (8) Purchase of a motor vehicle by or for a public library, 
155.21  as defined in section 134.001, subdivision 2, as a bookmobile or 
155.22  library delivery vehicle. 
155.23     (9) Purchase of a ready-mixed concrete truck. 
155.24     (10) Purchase or use of a motor vehicle by a town for use 
155.25  exclusively for road maintenance, including snowplows and dump 
155.26  trucks, but not including automobiles, vans, or pickup trucks. 
155.27     Sec. 16.  Minnesota Statutes 1997 Supplement, section 
155.28  297G.01, is amended by adding a subdivision to read: 
155.29     Subd. 3a.  [CIDER.] "Cider" means a product that contains 
155.30  not less than one-half of one percent nor more than seven 
155.31  percent alcohol by volume and is made from the alcoholic 
155.32  fermentation of the juice of apples.  Cider includes, but is not 
155.33  limited to, flavored, sparkling, and carbonated cider. 
155.34     Sec. 17.  Minnesota Statutes 1997 Supplement, section 
155.35  297G.03, subdivision 1, is amended to read: 
155.36     Subdivision 1.  [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 
156.1   The following excise tax is imposed on all distilled spirits and 
156.2   wine manufactured, imported, sold, or possessed in this state: 
156.3                                   Standard             Metric
156.4   (a) Distilled spirits,      $5.03 per gallon   $1.33 per liter
156.5   liqueurs, cordials, 
156.6   and specialties regardless 
156.7   of alcohol content 
156.8   (excluding ethyl alcohol) 
156.9   (b) Wine containing         $ .30 per gallon   $ .08 per liter 
156.10  14 percent or less
156.11  alcohol by volume 
156.12  (except cider as defined 
156.13  in section 297G.01, 
156.14  subdivision 3a) 
156.15  (c) Wine containing         $ .95 per gallon   $ .25 per liter
156.16  more than 14 percent 
156.17  but not more than 21
156.18  percent alcohol by volume 
156.19  (d) Wine containing more    $1.82 per gallon   $ .48 per liter
156.20  than 21 percent but not 
156.21  more than 24 percent
156.22  alcohol by volume 
156.23  (e) Wine containing more    $3.52 per gallon   $ .93 per liter
156.24  than 24 percent alcohol
156.25  by volume
156.26  (f) Natural and             $1.82 per gallon   $ .48 per liter
156.27  artificial sparkling wines
156.28  containing alcohol 
156.29  (g) Cider as defined in     $ .15 per gallon   $ .04 per liter
156.30  section 297G.01,
156.31  subdivision 3a
156.32     In computing the tax on a package of distilled spirits or 
156.33  wine, a proportional tax at a like rate on all fractional parts 
156.34  of a gallon or liter must be paid, except that the tax on a 
156.35  fractional part of a gallon less than 1/16 of a gallon is the 
156.36  same as for 1/16 of a gallon. 
157.1      Sec. 18.  Laws 1992, chapter 511, article 8, section 33, 
157.2   subdivision 5, is amended to read: 
157.3      Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed 
157.4   pursuant to subdivisions 1 and 2 shall terminate at the later of 
157.5   (1) December 31, 1998, or (2) on the first day of the second 
157.6   month next succeeding a determination by the city council that 
157.7   sufficient funds have been received from the taxes to finance 
157.8   capital and administrative costs of $28,760,000 for improvements 
157.9   for fire station, city hall, and public library facilities and 
157.10  to prepay or retire at maturity the principal, interest, and 
157.11  premium due on any bonds issued for the improvements.  Any funds 
157.12  remaining after completion of the improvements and retirement or 
157.13  redemption of the bonds may be placed in the general fund of the 
157.14  city. 
157.15     Sec. 19.  Laws 1997, chapter 231, article 7, section 47, is 
157.16  amended to read: 
157.17     Sec. 47.  [EFFECTIVE DATES.] 
157.18     Section 1 is effective for refund claims filed after June 
157.19  30, 1997. 
157.20     Sections 2, 6, 7, 9, 13, 15, 16, 17, 18, 20, 21, 25, 31, 
157.21  and 32 are effective for purchases, sales, storage, use, or 
157.22  consumption occurring after June 30, 1997. 
157.23     Section 3 is effective on July 1, 1997, or upon adoption of 
157.24  the corresponding rules, whichever occurs earlier. 
157.25     Section 4, paragraph (i), clause (iv), is effective for 
157.26  purchases and sales occurring after September 30, 1987; the 
157.27  remainder of section 4 is effective for purchases and sales 
157.28  occurring after June 30, 1997. 
157.29     Section 5, paragraph (h), is effective for purchases and 
157.30  sales occurring after June 30, 1997, and paragraph (i) is 
157.31  effective for purchases and sales occurring after December 31, 
157.32  1992. 
157.33     Sections 8 and 46 are effective July 1, 1998. 
157.34     Sections 10 and 22 are effective for purchases, sales, 
157.35  storage, use, or consumption occurring after August 31, 1996. 
157.36     Sections 11, 12, 33, 34, and 35 are effective July 1, 1997. 
158.1      Sections 14 and 19 are effective for purchases and sales 
158.2   after June 30, 1999. 
158.3      Section 20 is effective for sales and purchases occurring 
158.4   after December 31, 1995. 
158.5      Section 23 is effective January 1, 1997. 
158.6      Section 24 is effective for purchases, sales, storage, use, 
158.7   or consumption occurring after April 30, 1997. 
158.8      Sections 26 and 45 are effective for purchases, sales, 
158.9   storage, use, or consumption occurring after July 31, 1997, and 
158.10  before August 1, 2003. 
158.11     Section 27 is effective for purchases, sales, storage, use, 
158.12  or consumption occurring after May 31, 1997. 
158.13     Section 28 is effective for sales made after December 31, 
158.14  1989, and before January 1, 1997.  The provisions of Minnesota 
158.15  Statutes, section 289A.50, apply to refunds claimed under 
158.16  section 28.  Refunds claimed under section 28 must be filed by 
158.17  the later of December 31, 1997, or the time limit under 
158.18  Minnesota Statutes, section 289A.40, subdivision 1. 
158.19     Section 29 is effective for sales or first use after May 
158.20  31, 1997, and before June 1, 1998 January 1, 2006. 
158.21     Sections 30, 42, and 43 are effective the day following 
158.22  final enactment. 
158.23     Sections 36 to 39 are effective the day after compliance by 
158.24  the governing body of Cook county with Minnesota Statutes, 
158.25  section 645.021, subdivision 3. 
158.26     Section 40 is effective for STAR funds collected after June 
158.27  30, 1997. 
158.28     Sec. 20.  [TRANSFER OF TRAVEL TRAILERS EXEMPTED.] 
158.29     Notwithstanding the provisions of Minnesota Statutes, 
158.30  chapter 297B, any transfer of title of a travel trailer from the 
158.31  Federal Emergency Management Agency to the state of Minnesota 
158.32  and any subsequent transfer of title of the trailer to a 
158.33  political subdivision of the state shall be exempt from the tax 
158.34  imposed under Minnesota Statutes, chapter 297B. 
158.35     Sec. 21.  [CITY OF BEMIDJI.] 
158.36     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
159.1   Notwithstanding Minnesota Statutes, section 477A.016, or any 
159.2   other provision of law, ordinance, or city charter, if approved 
159.3   by the city voters at a general election held within one year of 
159.4   the date of final enactment of this act, the city of Bemidji may 
159.5   impose by ordinance a sales and use tax of up to one-half of one 
159.6   percent for the purposes specified in subdivision 3. The 
159.7   provisions of Minnesota Statutes, section 297A.48, govern the 
159.8   imposition, administration, collection, and enforcement of the 
159.9   tax authorized under this subdivision. 
159.10     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
159.11  Minnesota Statutes, section 477A.016, or any other provision of 
159.12  law, ordinance, or city charter, if a sales and use tax is 
159.13  imposed under subdivision 1, the city of Bemidji may impose by 
159.14  ordinance, for the purpose specified in subdivision 3, an excise 
159.15  tax of up to $20 per motor vehicle, as defined by ordinance, 
159.16  purchased or acquired from any person engaged within the city in 
159.17  the business of selling motor vehicles at retail. 
159.18     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
159.19  authorized by subdivisions 1 and 2 must be used by the city to 
159.20  pay the cost of collecting the taxes and to pay all or part of 
159.21  the capital and administrative cost of constructing facilities 
159.22  as part of a regional convention center in Bemidji.  Authorized 
159.23  expenses include, but are not limited to, acquiring property and 
159.24  paying construction expenses related to the development of a 
159.25  convention center which is an arena for sporting events, 
159.26  concerts, trade shows, conventions, meeting rooms, and other 
159.27  compatible uses including, but not limited to, parking, 
159.28  lighting, and landscaping. 
159.29     Subd. 4.  [BONDS.] If approved by the city voters at a 
159.30  general election held within one year of the date of final 
159.31  enactment of this act, the city of Bemidji may issue, without 
159.32  additional election, general obligation bonds of the city in an 
159.33  amount not to exceed $25,000,000 to pay capital and 
159.34  administrative expenses for the acquisition and construction of 
159.35  a convention center.  The debt represented by the bonds must not 
159.36  be included in computing any debt limitations applicable to the 
160.1   city, and the levy of taxes required by Minnesota Statutes, 
160.2   section 475.61, to pay the principal or any interest on the 
160.3   bonds must not be subject to any levy limitations or be included 
160.4   in computing or applying any levy limitation applicable to the 
160.5   city. 
160.6      Subd. 5.  [NO PLEDGE TO DEBT.] Revenues received from the 
160.7   tax authorized under this section may not be pledged or 
160.8   obligated to the payment of bonds or other debt obligations.  
160.9   This restriction does not prohibit the issuance of bonds, 
160.10  secured by other revenue sources including property taxes, to 
160.11  pay for the improvements which may be funded with revenues from 
160.12  the taxes under this section.  Revenues from the taxes may be 
160.13  used to pay the obligations, but repeal or reduction of the tax 
160.14  does not violate contractual obligations under the bonds or 
160.15  other debt obligations. 
160.16     Subd. 6.  [TERMINATION OF TAXES.] The taxes imposed under 
160.17  subdivisions 1 and 2 expire when the city council determines 
160.18  that sufficient funds have been received from taxes to finance 
160.19  the capital and administrative costs for acquisition and 
160.20  construction of a convention center and related facilities to 
160.21  repay or retire at maturity the principal, interest, and premium 
160.22  due on any bonds issued for the project under subdivision 4.  
160.23  Any funds remaining after completion of the project and 
160.24  retirement or redemption of the bonds may be placed in the 
160.25  general fund of the city.  The taxes imposed under subdivisions 
160.26  1 and 2 may expire at an earlier time if the city so determines 
160.27  by ordinance. 
160.28     Subd. 7.  [EFFECTIVE DATE.] This section is effective the 
160.29  day after compliance by the governing body of the city of 
160.30  Bemidji with Minnesota Statutes, section 645.021, subdivision 3. 
160.31     Sec. 22.  [CITY OF COON RAPIDS; TAXES AUTHORIZED.] 
160.32     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
160.33  Notwithstanding Minnesota Statutes, section 477A.016, or any 
160.34  other contrary provision of law, ordinance, or city charter, the 
160.35  city of Coon Rapids may, by ordinance, impose an additional 
160.36  sales and use tax of up to one-half of one percent for the 
161.1   purposes specified in subdivision 3.  The provisions of 
161.2   Minnesota Statutes, section 297A.48, govern the imposition, 
161.3   administration, collection, and enforcement of the tax 
161.4   authorized under this subdivision. 
161.5      Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
161.6   Minnesota Statutes, section 477A.016, or any other contrary 
161.7   provision of law, ordinance, or city charter, the city of Coon 
161.8   Rapids may impose, for the purposes specified in subdivision 3, 
161.9   an excise tax of up to $20 per motor vehicle, as defined, 
161.10  purchased or acquired from any person engaged within the city in 
161.11  the business of selling motor vehicles at retail. 
161.12     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
161.13  authorized by subdivisions 1 and 2 must be used by the city to 
161.14  pay the costs of collecting the taxes and to pay all or part of 
161.15  the capital and administrative costs, not to exceed $11,000,000, 
161.16  for infrastructure improvements related to the Riverdale 
161.17  regional economic development project.  Authorized expenses 
161.18  include, but are not limited to, acquiring property and paying 
161.19  construction and administrative costs of the infrastructure 
161.20  improvements and paying debt service on bonds or other 
161.21  obligations issued to finance the infrastructure improvements. 
161.22     Subd. 4.  [REFERENDUM.] If the governing body of the city 
161.23  of Coon Rapids intends to impose the taxes authorized by this 
161.24  section, it shall conduct a referendum on the issue.  The 
161.25  question of imposing the tax must be submitted to the voters at 
161.26  a general election within one year of the date of final 
161.27  enactment of this act.  The taxes may not be imposed unless a 
161.28  majority of votes cast on the question of imposing the taxes are 
161.29  in the affirmative.  The commissioner of revenue shall prepare a 
161.30  suggested form of question to be presented at the election. 
161.31     Subd. 5.  [BONDS.] Pursuant to the approval of the city 
161.32  voters under subdivision 4, the city of Coon Rapids may issue, 
161.33  without additional election, general obligation bonds of the 
161.34  city in an amount not to exceed $11,000,000 to pay the capital 
161.35  and administrative expenses of the project authorized in 
161.36  subdivision 3.  The debt represented by the bonds must not be 
162.1   included in computing any debt limitations applicable to the 
162.2   city, and the levy of taxes required by Minnesota Statutes, 
162.3   section 475.61, to pay the principal and interest on the bonds 
162.4   must not be subject to any levy limitation or be included in 
162.5   computing or applying any levy limitation applicable to the city.
162.6      Subd. 6.  [NO PLEDGE TO DEBT.] Revenues received from the 
162.7   tax authorized under this section may not be pledged or 
162.8   obligated to the payment of bonds or other debt obligations.  
162.9   This restriction does not prohibit the issuance of bonds, 
162.10  secured by other revenue sources including property taxes, to 
162.11  pay for the improvements which may be funded with revenues from 
162.12  the taxes under this section.  Revenues from the taxes may be 
162.13  used to pay the obligations, but repeal or reduction of the tax 
162.14  does not violate contractual obligations under the bonds or 
162.15  other debt obligations. 
162.16     Subd. 7.  [TERMINATION OF TAXES.] The taxes imposed under 
162.17  subdivisions 1 and 2 expire when the city council determines 
162.18  that sufficient funds have been received from the taxes to 
162.19  finance the capital and administrative costs of the project in 
162.20  subdivision 3 and to prepay or retire at maturity the principal, 
162.21  interest, and premium due on any bonds issued for the project.  
162.22  Any funds remaining after completion of the project or 
162.23  retirement or redemption of the bonds may be placed in the 
162.24  general fund of the city. 
162.25     Subd. 8.  [EFFECTIVE DATE.] This section is effective the 
162.26  day after compliance by the governing body of the city of Coon 
162.27  Rapids with Minnesota Statutes, section 645.021, subdivision 3. 
162.28     Sec. 23.  [CITY OF DETROIT LAKES.] 
162.29     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
162.30  Notwithstanding Minnesota Statutes, section 477A.016, or any 
162.31  other contrary provision of law, ordinance, or city charter, the 
162.32  city of Detroit Lakes may, by ordinance, impose an additional 
162.33  sales and use tax of up to one-half of one percent for the 
162.34  purposes specified in subdivision 3.  The provisions of 
162.35  Minnesota Statutes, section 297A.48, govern the imposition, 
162.36  administration, collection, and enforcement of the tax 
163.1   authorized under this subdivision. 
163.2      Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
163.3   Minnesota Statutes, section 477A.016, or any other contrary 
163.4   provision of law, ordinance, or city charter, the city of 
163.5   Detroit Lakes may impose, by ordinance, for the purposes 
163.6   specified in subdivision 3, an excise tax of up to $20 per motor 
163.7   vehicle, as defined by ordinance, purchased or acquired from any 
163.8   person engaged within the city in the business of selling motor 
163.9   vehicles at retail. 
163.10     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
163.11  authorized by subdivisions 1 and 2 must be used by the city to 
163.12  pay the costs of collecting the taxes and to pay all or part of 
163.13  the capital and administrative costs, up to $6,000,000, for 
163.14  constructing a community center.  Authorized expenses include, 
163.15  but are not limited to, acquiring property and paying 
163.16  construction and operating expenses related to the development 
163.17  of the community center and paying debt service on bonds or 
163.18  other obligations issued to finance the construction of the 
163.19  community center. 
163.20     Subd. 4.  [REFERENDUM.] If the governing body of the city 
163.21  of Detroit Lakes intends to impose the taxes authorized by this 
163.22  section, it shall conduct a referendum on the issue.  The 
163.23  question of imposing the tax must be submitted to the voters at 
163.24  a general election within one year of the date of final 
163.25  enactment of this act.  The taxes may not be imposed unless a 
163.26  majority of votes cast on the question of imposing the taxes are 
163.27  in the affirmative.  The commissioner of revenue shall prepare a 
163.28  suggested form of question to be presented at the election.  
163.29     Subd. 5.  [NO PLEDGE TO DEBT.] Revenues received from the 
163.30  tax authorized under this section may not be pledged or 
163.31  obligated to the payment of bonds or other debt obligations.  
163.32  This restriction does not prohibit the issuance of bonds, 
163.33  secured by other revenue sources including property taxes, to 
163.34  pay for the improvements which may be funded with revenues from 
163.35  the taxes under this section.  Revenues from the taxes may be 
163.36  used to pay the obligations, but repeal or reduction of the tax 
164.1   does not violate contractual obligations under the bonds or 
164.2   other debt obligations. 
164.3      Subd. 6.  [TERMINATION OF TAXES.] The taxes imposed under 
164.4   subdivisions 1 and 2 expire when the city council determines 
164.5   that sufficient funds have been received from the taxes to 
164.6   finance the capital and administrative costs for constructing 
164.7   the community center and to prepay or retire at maturity the 
164.8   principal, interest, and premium due on any bonds issued for the 
164.9   construction.  Any funds remaining after completion of the 
164.10  project or retirement or redemption of the bonds may be placed 
164.11  in the general fund of the city.  
164.12     Subd. 7.  [EFFECTIVE DATE.] This section is effective the 
164.13  day after compliance by the governing body of the city of 
164.14  Detroit Lakes with Minnesota Statutes, section 645.021, 
164.15  subdivision 3. 
164.16     Sec. 24.  [CITY OF FERGUS FALLS.] 
164.17     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
164.18  Notwithstanding Minnesota Statutes, section 477A.016, or any 
164.19  other provision of law, ordinance, or city charter, if approved 
164.20  by the city voters at the next general election after final 
164.21  enactment of this act, the city of Fergus Falls may impose by 
164.22  ordinance a sales and use tax of up to one-half of one percent 
164.23  for the purposes specified in subdivision 3.  The provisions of 
164.24  Minnesota Statutes, section 297A.48, govern the imposition, 
164.25  administration, collection, and enforcement of the tax 
164.26  authorized under this subdivision. 
164.27     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
164.28  Minnesota Statutes, section 477A.016, or any other provision of 
164.29  law, ordinance, or city charter, if a sales and use tax is 
164.30  imposed under subdivision 1, the city of Fergus Falls may impose 
164.31  by ordinance, for the purposes specified in subdivision 3, an 
164.32  excise tax of up to $20 per motor vehicle, as defined by 
164.33  ordinance, purchased or acquired from any person engaged within 
164.34  the city in the business of selling motor vehicles at retail. 
164.35     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
164.36  authorized by subdivisions 1 and 2 must be used by the city to 
165.1   pay the costs of collecting the taxes and to pay all or part of 
165.2   the capital and administrative costs of constructing facilities 
165.3   as part of a regional conference center, community center, 
165.4   recreational and tourism project in Fergus Falls known as 
165.5   Project Reach Out.  Authorized expenses include, but are not 
165.6   limited to, acquiring property and paying construction and 
165.7   operating expenses related to the development of Project Reach 
165.8   Out and related facilities, and paying debt service on bonds or 
165.9   other obligations issued to finance the construction of Project 
165.10  Reach Out and related facilities. 
165.11     For purposes of this section, "Project Reach Out and 
165.12  related facilities" means a regional conference center, 
165.13  community center, regional park and recreational facilities, and 
165.14  all publicly owned real or personal property that the governing 
165.15  body of the city determines are necessary to facilitate the use 
165.16  of these facilities, including but not limited to, parking, 
165.17  pedestrian bridges, lighting, and landscaping. 
165.18     Subd. 4.  [BONDS.] If approved by the city voters at the 
165.19  next general election after final enactment of this act, the 
165.20  city of Fergus Falls may issue without additional election 
165.21  general obligation bonds of the city in an amount up to 
165.22  $9,000,000 as needed to pay capital and administrative expenses 
165.23  for the acquisition, construction, improvement, and maintenance 
165.24  of Project Reach Out and related facilities.  The debt 
165.25  represented by the bonds must not be included in computing any 
165.26  debt limitations applicable to the city, and the levy of taxes 
165.27  required by Minnesota Statutes, section 475.61, to pay the 
165.28  principal or any interest on the bonds must not be subject to 
165.29  any levy limitation or be included in computing or applying any 
165.30  levy limitation applicable to the city. 
165.31     Subd. 5.  [NO PLEDGE TO DEBT.] Revenues received from the 
165.32  tax authorized under this section may not be pledged or 
165.33  obligated to the payment of bonds or other debt obligations.  
165.34  This restriction does not prohibit the issuance of bonds, 
165.35  secured by other revenue sources including property taxes, to 
165.36  pay for the improvements which may be funded with revenues from 
166.1   the taxes under this section.  Revenues from the taxes may be 
166.2   used to pay the obligations, but repeal or reduction of the tax 
166.3   does not violate contractual obligations under the bonds or 
166.4   other debt obligations. 
166.5      Subd. 6.  [TERMINATION OF TAXES.] The taxes imposed under 
166.6   subdivisions 1 and 2 expire when the city determines that 
166.7   sufficient funds have been received from the taxes to finance 
166.8   the capital and administrative costs for acquisition, 
166.9   construction, improvement, and operation of Project Reach Out 
166.10  and related facilities and to prepay or retire at maturity the 
166.11  principal, interest, and premium due on any bonds issued for the 
166.12  project under subdivision 4.  Any funds remaining after 
166.13  completion of the project and retirement or redemption of the 
166.14  bonds may be placed in the general fund of the city.  The taxes 
166.15  imposed under subdivisions 1 and 2 may expire at an earlier time 
166.16  if the city so determines by ordinance. 
166.17     Subd. 7.  [EFFECTIVE DATE.] This section is effective the 
166.18  day after compliance by the governing body of the city of Fergus 
166.19  Falls with Minnesota Statutes, section 645.021, subdivision 3. 
166.20     Sec. 25.  [CITY OF HUTCHINSON; TAXES AUTHORIZED.] 
166.21     Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
166.22  Minnesota Statutes, section 477A.016, or any other provision of 
166.23  law, ordinance, or city charter, the city of Hutchinson may 
166.24  impose by ordinance a sales and use tax of up to one-half of one 
166.25  percent for the purposes specified in subdivision 3.  The 
166.26  provisions of Minnesota Statutes, section 297A.48, govern the 
166.27  imposition, administration, collection, and enforcement of the 
166.28  tax authorized under this subdivision. 
166.29     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
166.30  Minnesota Statutes, section 477A.016, or any other provision of 
166.31  law, ordinance, or city charter, the city of Hutchinson may 
166.32  impose by ordinance, for the purposes specified in subdivision 
166.33  3, an excise tax of up to $20 per motor vehicle, as defined by 
166.34  ordinance, purchased or acquired from any person engaged within 
166.35  the city in the business of selling motor vehicles at retail. 
166.36     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
167.1   authorized by subdivisions 1 and 2 must be used by the city to 
167.2   pay the cost of collecting the taxes and to pay for construction 
167.3   and improvement of a civic and community center and recreational 
167.4   facilities to serve seniors and youth.  Authorized expenses 
167.5   include, but are not limited to, acquiring property, paying 
167.6   construction and operating expenses related to the development 
167.7   of an authorized facility, and paying debt service on bonds or 
167.8   other obligations issued to finance the construction or 
167.9   expansion of an authorized facility.  The capital expenses for 
167.10  all projects authorized under this paragraph that may be paid 
167.11  with these taxes is limited to $5,000,000.  
167.12     Subd. 4.  [REFERENDUM.] If the Hutchinson city council 
167.13  intends to exercise the authority provided in subdivisions 1 and 
167.14  2, it shall conduct a referendum on the issue.  The question, 
167.15  which shall seek simultaneous approval for imposing both taxes, 
167.16  must be submitted to the voters at a general election within one 
167.17  year of the date of final enactment of this act.  The taxes may 
167.18  not be imposed unless a majority of votes cast on the question 
167.19  of imposing the taxes is in the affirmative.  The commissioner 
167.20  of revenue shall prepare a suggested form of question to be 
167.21  presented at the election.  This subdivision applies 
167.22  notwithstanding any city charter provision to the contrary. 
167.23     Subd. 5.  [BONDS.] If the taxes are approved by the city 
167.24  voters as provided in subdivision 4, the city of Hutchinson may 
167.25  issue, without additional election, general obligation bonds of 
167.26  the city in an amount equal to $5,000,000 to pay capital and 
167.27  administrative expenses for the acquisition, construction, 
167.28  improvement, and maintenance of the facilities listed in 
167.29  subdivision 3.  The debt represented by the bonds must not be 
167.30  included in computing any debt limitations applicable to the 
167.31  city.  The levy of taxes required by Minnesota Statutes, section 
167.32  475.61, to pay the principal or any interest on the bonds must 
167.33  not be subject to any levy limitation or be included in 
167.34  computing or applying any levy limitation applicable to the city.
167.35     Subd. 6.  [NO PLEDGE TO DEBT.] Revenues received from the 
167.36  tax authorized under this section may not be pledged or 
168.1   obligated to the payment of bonds or other debt obligations.  
168.2   This restriction does not prohibit the issuance of bonds, 
168.3   secured by other revenue sources including property taxes, to 
168.4   pay for the improvements which may be funded with revenues from 
168.5   the taxes under this section.  Revenues from the taxes may be 
168.6   used to pay the obligations, but repeal or reduction of the tax 
168.7   does not violate contractual obligations under the bonds or 
168.8   other debt obligations. 
168.9      Subd. 7.  [TERMINATION OF TAXES.] The taxes imposed under 
168.10  subdivisions 1 and 2 expire when the city council determines 
168.11  that sufficient funds have been received from the taxes to 
168.12  finance the capital and administrative costs for the 
168.13  acquisition, construction, and improvement of facilities 
168.14  described in subdivision 3, and to prepay or retire at maturity 
168.15  the principal, interest, and premium due on any bonds issued for 
168.16  the facilities under subdivision 5.  Any funds remaining after 
168.17  completion of the project and retirement or redemption of the 
168.18  bonds may be placed in the general fund of the city.  The taxes 
168.19  imposed under subdivisions 1 and 2 may expire at an earlier time 
168.20  if the city so determines by ordinance. 
168.21     Subd. 8.  [EFFECTIVE DATE.] This section is effective the 
168.22  day after compliance by the governing body of the city of 
168.23  Hutchinson with Minnesota Statutes, section 645.021, subdivision 
168.24  3. 
168.25     Sec. 26.  [CITY OF OWATONNA; SALES AND USE TAX.] 
168.26     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
168.27  Notwithstanding Minnesota Statutes, section 477A.016, or any 
168.28  other provision of law, ordinance, or city charter, if approved 
168.29  by the city voters at the next general election after final 
168.30  enactment of this act, the city of Owatonna may impose by 
168.31  ordinance a sales and use tax of up to one-half of one percent 
168.32  for the purposes specified in subdivision 3.  The provisions of 
168.33  Minnesota Statutes, section 297A.48, govern the imposition, 
168.34  administration, collection, and enforcement of the tax 
168.35  authorized under this subdivision. 
168.36     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
169.1   Minnesota Statutes, section 477A.016, or any other provision of 
169.2   law, ordinance, or city charter, if a sales and use tax is 
169.3   imposed under subdivision 1, the city of Owatonna may impose by 
169.4   ordinance, for the purposes specified in subdivision 3, an 
169.5   excise tax of up to $20 per motor vehicle, as defined by 
169.6   ordinance, purchased or acquired from any person engaged within 
169.7   the city in the business of selling motor vehicles at retail. 
169.8      Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
169.9   authorized by subdivisions 1 and 2 must be used by the city to 
169.10  pay the costs of collecting the taxes and to pay all or part of 
169.11  the capital and administrative costs of constructing and 
169.12  improving infrastructure and facilities as part of Owatonna 
169.13  Economic Development 2000 and related facilities.  Authorized 
169.14  expenses include, but are not limited to, acquiring property and 
169.15  paying construction and operating expenses related to the 
169.16  development of Owatonna Economic Development 2000 and related 
169.17  facilities, and paying debt service on bonds or other 
169.18  obligations issued to finance the construction of Owatonna 
169.19  Economic Development 2000 and related facilities. 
169.20     For purposes of this section, "Owatonna Economic 
169.21  Development 2000 and related facilities" means the improvement 
169.22  of the Owatonna regional airport and infrastructure 
169.23  improvements, including roads and the extension of water and 
169.24  sewer services, for an economic and tourism project. 
169.25     Subd. 4.  [BONDS.] If the taxes are approved by the city 
169.26  voters as provided in subdivision 1, the city of Owatonna may 
169.27  issue without additional election general obligation bonds of 
169.28  the city in an amount not to exceed $5,000,000 to pay capital 
169.29  and administrative expenses for the acquisition, construction, 
169.30  improvement, and maintenance of Owatonna Economic Development 
169.31  2000 and related facilities.  The debt represented by the bonds 
169.32  must not be included in computing any debt limitations 
169.33  applicable to the city, and the levy of taxes required by 
169.34  Minnesota Statutes, section 475.61, to pay the principal and any 
169.35  interest on the bonds must not be subject to any levy limitation 
169.36  or be included in computing or applying any levy limitation 
170.1   applicable to the city. 
170.2      Subd. 5.  [NO PLEDGE TO DEBT.] Revenues received from the 
170.3   tax authorized under this section may not be pledged or 
170.4   obligated to the payment of bonds or other debt obligations.  
170.5   This restriction does not prohibit the issuance of bonds, 
170.6   secured by other revenue sources including property taxes, to 
170.7   pay for the improvements which may be funded with revenues from 
170.8   the taxes under this section.  Revenues from the taxes may be 
170.9   used to pay the obligations, but repeal or reduction of the tax 
170.10  does not violate contractual obligations under the bonds or 
170.11  other debt obligations. 
170.12     Subd. 6.  [TERMINATION OF TAXES.] The taxes imposed under 
170.13  subdivisions 1 and 2 expire when the city council determines 
170.14  that sufficient funds have been received from the taxes to 
170.15  finance the capital and administrative costs for acquisition, 
170.16  construction, and improvement of Owatonna Economic Development 
170.17  2000 and related facilities and to prepay or retire at maturity 
170.18  the principal, interest, and premium due on any bonds issued for 
170.19  the project under subdivision 4.  Any funds remaining after 
170.20  completion of the project and retirement or redemption of the 
170.21  bonds may be placed in the general fund of the city.  The taxes 
170.22  imposed under subdivisions 1 and 2 may expire at an earlier time 
170.23  if the city so determines by ordinance. 
170.24     Subd. 7.  [EFFECTIVE DATE.] This section is effective the 
170.25  day after compliance by the governing body of the city of 
170.26  Owatonna with Minnesota Statutes, section 645.021, subdivision 3.
170.27     Sec. 27.  [CITY OF ROCHESTER; TAXES.] 
170.28     Subdivision 1.  [SALES AND USE TAXES AUTHORIZED.] 
170.29  Notwithstanding Minnesota Statutes, section 477A.016, or any 
170.30  other contrary provision of law, ordinance, or city charter, 
170.31  upon termination of the taxes authorized under Laws 1992, 
170.32  chapter 511, article 8, section 33, subdivision 1, the city of 
170.33  Rochester may, by ordinance, impose an additional sales and use 
170.34  tax of up to one-half of one percent.  The provisions of 
170.35  Minnesota Statutes, section 297A.48, govern the imposition, 
170.36  administration, collection, and enforcement of the tax 
171.1   authorized under this subdivision. 
171.2      Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
171.3   Minnesota Statutes, section 477A.016, or any other contrary 
171.4   provision of law, ordinance, or city charter, upon termination 
171.5   of the tax authorized under Laws 1992, chapter 511, article 8, 
171.6   section 33, subdivision 2, the city of Rochester may, by 
171.7   ordinance, impose an excise tax of up to $20 per motor vehicle, 
171.8   as defined by ordinance, purchased or acquired from any person 
171.9   engaged within the city in the business of selling motor 
171.10  vehicles at retail. 
171.11     Subd. 3.  [USE OF REVENUES.] Revenues received from the 
171.12  taxes authorized by subdivisions 1 and 2 must be used by the 
171.13  city to pay for the cost of collecting and administering the 
171.14  taxes and to pay for the following projects: 
171.15     (1) transportation infrastructure improvements including 
171.16  both highway and airport improvements; 
171.17     (2) improvements to the civic center complex; 
171.18     (3) improvements to public safety and the dispatch system; 
171.19     (4) a municipal water, sewer, and storm sewer project 
171.20  necessary to improve regional ground water quality; and 
171.21     (5) construction of a regional recreation and sports center 
171.22  and associated facilities available for both community and 
171.23  student use, located adjacent to the Rochester center. 
171.24  The total amount of capital expenditures or bonds for these 
171.25  projects that may be paid from the revenues raised from the 
171.26  taxes authorized in this section may not exceed $76,000,000.  
171.27  The amount of revenue raised from the taxes in this section that 
171.28  is spent on the project in clause (5) shall not exceed 25 
171.29  percent of the total revenue. 
171.30     Subd. 4.  [REFERENDUM.] If the Rochester city council 
171.31  intends to exercise the authority provided in subdivisions 1 and 
171.32  2, it shall conduct a referendum on the issue.  The referendum, 
171.33  which must be approved by the majority of votes cast on the 
171.34  question of imposing the tax, must occur at a general election 
171.35  within one year of the date of final enactment of this act. 
171.36     Subd. 5.  [NO PLEDGE TO DEBT.] Revenues received from the 
172.1   tax authorized under this section may not be pledged or 
172.2   obligated to the payment of bonds or other debt obligations.  
172.3   This restriction does not prohibit the issuance of bonds, 
172.4   secured by other revenue sources including property taxes, to 
172.5   pay for the improvements which may be funded with revenues from 
172.6   the taxes under this section.  Revenues from the taxes may be 
172.7   used to pay the obligations, but repeal or reduction of the tax 
172.8   does not violate contractual obligations under the bonds or 
172.9   other debt obligations. 
172.10     Subd. 6.  [TERMINATION OF TAXES.] The taxes imposed under 
172.11  subdivisions 1 and 2 expire when the city council determines 
172.12  that sufficient funds have been received from the taxes to 
172.13  finance the projects and to prepay or retire at maturity the 
172.14  principal, interest, and premium due on any bonds issued for the 
172.15  projects under subdivision 3.  Any funds remaining after 
172.16  completion of the project and retirement or redemption of the 
172.17  bonds may be placed in the general fund of the city.  The taxes 
172.18  imposed under subdivisions 1 and 2 may expire at an earlier time 
172.19  if the city so determines by ordinance. 
172.20     Subd. 7.  [EFFECTIVE DATE.] This section is effective the 
172.21  day after compliance by the governing body of the city of 
172.22  Rochester with Minnesota Statutes, section 645.021, subdivision 
172.23  3. 
172.24     Sec. 28.  [CENTRAL MINNESOTA EVENTS CENTER; LOCAL OPTION 
172.25  TAXES.] 
172.26     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
172.27  Notwithstanding Minnesota Statutes, section 477A.016, or any 
172.28  other provision of law, ordinance, or city charter, the cities 
172.29  of St. Cloud, Sauk Rapids, Sartell, Waite Park, and St. Joseph 
172.30  may impose by ordinance a sales and use tax of up to one-half of 
172.31  one percent for the purposes specified in subdivision 3.  The 
172.32  provisions of Minnesota Statutes, section 297A.48, govern the 
172.33  imposition, administration, collection, and enforcement of the 
172.34  taxes authorized under this subdivision. 
172.35     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
172.36  Minnesota Statutes, section 477A.016, or any other provision of 
173.1   law, ordinance, or city charter, the cities identified in 
173.2   subdivision 1 may impose by ordinance, for the purposes 
173.3   specified in subdivision 3, an excise tax of up to $20 per motor 
173.4   vehicle acquired from any person engaged within the city in the 
173.5   business of selling motor vehicles at retail. 
173.6      Subd. 3.  [USE OF REVENUES.] (a) Revenues received from the 
173.7   taxes authorized by subdivisions 1 and 2 must be used to pay for 
173.8   the cost of collecting the taxes; to pay all or part of the 
173.9   capital or administrative cost of the acquisition, construction, 
173.10  and improvement of the Central Minnesota Events Center and 
173.11  related on-site and off-site improvements.  Authorized expenses 
173.12  related to acquisition, construction, and improvement of the 
173.13  center include, but are not limited to, acquiring property, 
173.14  paying construction and operating expenses related to the 
173.15  development of the facility, and paying debt service on bonds or 
173.16  other obligations issued to finance construction or improvement 
173.17  of the authorized facility. 
173.18     (b) In addition, if the revenue collected from the taxes 
173.19  imposed in subdivisions 1 and 2 are greater than the amount 
173.20  needed to meet the obligations under paragraph (a), in any year, 
173.21  the surplus, not to exceed 50 percent of the revenues raised in 
173.22  that year, may be returned to the cities in a manner agreed upon 
173.23  by the participating cities under this section, to be used by 
173.24  the cities for the acquisition and improvement of parkland and 
173.25  open space; for the purchase, renovation, and construction of 
173.26  public buildings and land primarily used for the arts, 
173.27  libraries, community center, and city halls; and for debt 
173.28  services for these purposes. 
173.29     Subd. 4.  [LODGING TAXES; USE OF REVENUES.] Notwithstanding 
173.30  Minnesota Statutes, section 469.190, subdivision 3, any city 
173.31  imposing the taxes under subdivisions 1 and 2 may use the 
173.32  proceeds from a lodging tax imposed under Minnesota Statutes, 
173.33  section 469.190, subdivision 1, to pay the operating deficit, if 
173.34  any, for the first five years of operation of the facility 
173.35  funded in subdivision 3.  This authority is in effect while the 
173.36  taxes under subdivisions 1 and 2 are imposed. 
174.1      Subd. 5.  [BONDS.] The cities named in subdivision 1 may 
174.2   issue bonds in each city in an aggregate amount not to exceed 
174.3   $25,000,000 needed to pay capital and administrative expenses 
174.4   for the acquisition, construction, and improvement of the 
174.5   Central Minnesota Events Center.  The debt represented by the 
174.6   bonds must not be included in computing any debt limitation 
174.7   applicable to the city and the levy of taxes required by 
174.8   Minnesota Statutes, section 475.61, to pay the principal of and 
174.9   interest on the bonds must not be subject to any levy limitation 
174.10  or be included in computing or applying any levy limitation 
174.11  applicable to the city. 
174.12     Subd. 6.  [NO PLEDGE TO DEBT.] Revenues received from the 
174.13  tax authorized under this section may not be pledged or 
174.14  obligated to the payment of bonds or other debt obligations.  
174.15  This restriction does not prohibit the issuance of bonds, 
174.16  secured by other revenue sources including property taxes, to 
174.17  pay for the improvements which may be funded with revenues from 
174.18  the taxes under this section.  Revenues from the taxes may be 
174.19  used to pay the obligations, but repeal or reduction of the tax 
174.20  does not violate contractual obligations under the bonds or 
174.21  other debt obligations. 
174.22     Subd. 7.  [TERMINATION OF TAXES.] The taxes imposed by each 
174.23  city under subdivisions 1 and 2 expire when sufficient funds 
174.24  have been received from the taxes to finance the obligations 
174.25  under subdivision 3, and to prepay or retire at maturity the 
174.26  principal, interest, and premium due on the original bonds 
174.27  issued for the initial acquisition, construction, and 
174.28  improvement of the Central Minnesota Events Center as determined 
174.29  under an applicable joint powers agreement or by a governing 
174.30  entity in charge of administering the project.  Any funds 
174.31  remaining after completion of the project and retirement or 
174.32  redemption of the bonds may be placed in the general funds of 
174.33  the cities imposing the taxes.  The taxes imposed by a city 
174.34  under this section may expire at an earlier time by city 
174.35  ordinance, if authorized under the applicable joint powers 
174.36  agreement or by the governing entity in charge of administering 
175.1   the project. 
175.2      Subd. 8.  [REFERENDUM.] (a) If a governing body of any of 
175.3   the cities listed in subdivision 1 intends to impose any tax 
175.4   authorized under subdivisions 1 and 2, it shall conduct a 
175.5   referendum on the issue.  The question of imposition of the tax 
175.6   must be submitted to the voters at a general election within one 
175.7   year of the day of final enactment of this act or at an election 
175.8   held on the first Tuesday in November of 1999, and the tax may 
175.9   not be imposed unless a majority of votes cast on the question 
175.10  are in the affirmative.  The commissioner of revenue shall 
175.11  prepare a suggested form of question to be presented at the 
175.12  election. 
175.13     (b) If the cities that pass a referendum required under 
175.14  paragraph (a) determine that the revenues raised from the sum of 
175.15  all the taxes authorized by referendum under this subdivision 
175.16  will not be sufficient to fund the project in subdivision 3, 
175.17  none of the authorized taxes may be imposed. 
175.18     Subd. 9.  [EFFECTIVE DATE.] This section is effective 
175.19  August 1, 1998, with respect to any city listed in subdivision 1 
175.20  upon compliance of the governing body of that city with 
175.21  Minnesota Statutes, section 645.021, subdivision 3.  
175.22     Sec. 29.  [CITY OF WINONA; TAXES AUTHORIZED.] 
175.23     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
175.24  Notwithstanding Minnesota Statutes, section 477A.016, or any 
175.25  other provision of law, ordinance, or city charter, if approved 
175.26  by the city voters at a general election held within one year of 
175.27  the date of final enactment of this act, the city of Winona may 
175.28  impose by ordinance a sales and use tax of up to one-half of one 
175.29  percent for the purposes specified in subdivision 3.  The 
175.30  provisions of Minnesota Statutes, section 297A.48, govern the 
175.31  imposition, administration, collection, and enforcement of the 
175.32  tax authorized under this subdivision. 
175.33     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
175.34  Minnesota Statutes, section 477A.016, or any other contrary 
175.35  provision of law, ordinance, or city charter, the city of Winona 
175.36  may impose by ordinance, for the purposes specified in 
176.1   subdivision 3, an excise tax of up to $20 per motor vehicle, as 
176.2   defined by ordinance, purchased or acquired from any person 
176.3   engaged within the city in the business of selling motor 
176.4   vehicles at retail. 
176.5      Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
176.6   authorized by subdivisions 1 and 2 must be used by the city to 
176.7   pay the costs of collecting the taxes and to pay all or a part 
176.8   of the capital and administrative costs of the dredging of Lake 
176.9   Winona, including paying debt service on bonds or other 
176.10  obligations issued to finance the project under subdivision 4.  
176.11     Subd. 4.  [BONDS.] Pursuant to the approval of the city 
176.12  voters under subdivision 1, the city of Winona may issue without 
176.13  additional election general obligation bonds of the city in an 
176.14  amount not to exceed $4,000,000 to pay capital and 
176.15  administrative expenses for the dredging of Lake Winona.  The 
176.16  debt represented by the bonds must not be included in computing 
176.17  any debt limitations applicable to the city, and the levy of 
176.18  taxes required by Minnesota Statutes, section 475.61, to pay the 
176.19  principal of and interest on the bonds must not be subject to 
176.20  any levy limitation or be included in computing or applying any 
176.21  levy limitation applicable to the city. 
176.22     Subd. 5.  [NO PLEDGE TO DEBT.] Revenues received from the 
176.23  tax authorized under this section may not be pledged or 
176.24  obligated to the payment of bonds or other debt obligations.  
176.25  This restriction does not prohibit the issuance of bonds, 
176.26  secured by other revenue sources including property taxes, to 
176.27  pay for the improvements which may be funded with revenues from 
176.28  the taxes under this section.  Revenues from the taxes may be 
176.29  used to pay the obligations, but repeal or reduction of the tax 
176.30  does not violate contractual obligations under the bonds or 
176.31  other debt obligations. 
176.32     Subd. 6.  [TERMINATION OF TAXES.] The taxes imposed under 
176.33  subdivisions 1 and 2 expire when the city council determines 
176.34  that sufficient funds have been received from the taxes to 
176.35  finance the dredging of Lake Winona and to prepay or retire at 
176.36  maturity the principal, interest, and premium due on any bonds 
177.1   issued for the project under subdivision 4.  Any funds remaining 
177.2   after completion of the project and retirement or redemption of 
177.3   the bonds may be placed in the general fund of the city.  The 
177.4   taxes imposed under subdivisions 1 and 2 may expire at an 
177.5   earlier time if the city so determines by ordinance.  
177.6      Subd. 7.  [EFFECTIVE DATE.] This section is effective upon 
177.7   compliance by the governing body of the city of Winona with 
177.8   Minnesota Statutes, section 645.021, subdivision 3. 
177.9      Sec. 30.  [TRANSFER TO GENERAL FUND.] 
177.10     An amount sufficient to offset the reduced revenues 
177.11  resulting from the amendments made by this article to Minnesota 
177.12  Statutes, section 297A.02, subdivision 4, for fiscal year 1999 
177.13  is transferred from the property tax reform account to the 
177.14  general fund. 
177.15     Sec. 31.  [EFFECTIVE DATE.] 
177.16     Sections 2, 3, 8, 9, 13, and 15 are effective for sales and 
177.17  purchases occurring after June 30, 1998.  Section 4 is effective 
177.18  the day following final enactment.  Section 6 is effective for 
177.19  vehicles registered after June 30, 1998.  Section 7 is effective 
177.20  for purchases made after December 31, 1998.  Section 10 is 
177.21  effective for purchases made after June 30, 1998.  Section 11 is 
177.22  effective for purchases made after December 1, 1997.  Section 14 
177.23  is effective for local laws enacted after June 30, 1998.  
177.24  Sections 16 and 17 are effective July 1, 1998.  Section 19 is 
177.25  effective the day following final enactment.  Section 20 is 
177.26  effective for transfers occurring after November 30, 1997, and 
177.27  before January 1, 1999.  
177.28                             ARTICLE 8
177.29                          BUDGET RESERVES
177.30     Section 1.  Minnesota Statutes 1997 Supplement, section 
177.31  16A.152, subdivision 2, is amended to read: 
177.32     Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
177.33  of a forecast of general fund revenues and expenditures after 
177.34  November 1 in an odd-numbered year, the commissioner of finance 
177.35  determines that there will be a positive unrestricted budgetary 
177.36  general fund balance at the close of the biennium, the 
178.1   commissioner of finance must allocate money as follows: 
178.2      (a) first, to the budget reserve until the total amount in 
178.3   the account equals $522,000,000 $582,000,000; then 
178.4      (b) 60 percent to the property tax reform account 
178.5   established in section 16A.1521; and 
178.6      (c) 40 percent is an unrestricted balance in the general 
178.7   fund. 
178.8      The amounts necessary to meet the requirements of this 
178.9   section are appropriated from the general fund within two weeks 
178.10  after the forecast is released. 
178.11     Sec. 2.  [APPROPRIATION.] 
178.12     On July 1, 1998, $60,000,000 is appropriated from the 
178.13  general fund to the commissioner of finance to transfer to the 
178.14  budget reserve account under Minnesota Statutes, section 
178.15  16A.152, subdivision 1a. 
178.16                             ARTICLE 9 
178.17                           TACONITE TAXES 
178.18     Section 1.  Minnesota Statutes 1997 Supplement, section 
178.19  124.918, subdivision 8, is amended to read: 
178.20     Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
178.21  Reductions in levies pursuant to section 124.918, subdivision 1, 
178.22  and section 273.138, shall be made prior to the reductions in 
178.23  clause (2). 
178.24     (2) Notwithstanding any other law to the contrary, 
178.25  districts which received payments pursuant to sections 298.018; 
178.26  298.23 to 298.28, except an amount distributed under section 
178.27  298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
178.28  298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
178.29  upon severed mineral values, or recognized revenue pursuant to 
178.30  section 477A.15; shall not include a portion of these aids in 
178.31  their permissible levies pursuant to those sections, but instead 
178.32  shall reduce the permissible levies authorized by this chapter 
178.33  and chapter 124A by the greater of the following: 
178.34     (a) an amount equal to 50 percent of the total dollar 
178.35  amount of the payments received pursuant to those sections or 
178.36  revenue recognized pursuant to section 477A.15 in the previous 
179.1   fiscal year; or 
179.2      (b) an amount equal to the total dollar amount of the 
179.3   payments received pursuant to those sections or revenue 
179.4   recognized pursuant to section 477A.15 in the previous fiscal 
179.5   year less the product of the same dollar amount of payments or 
179.6   revenue times the ratio of the maximum levy allowed the district 
179.7   under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 
179.8   124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
179.9   subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 
179.10  subdivision 5a, to the total levy allowed the district under 
179.11  this section and Minnesota Statutes 1986, sections 124A.03, 
179.12  124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
179.13  subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
179.14  5a, and 124A.20, subdivision 2, for levies certified in 
179.15  1986 five percent. 
179.16     (3) No reduction pursuant to this subdivision shall reduce 
179.17  the levy made by the district pursuant to section 124A.23, to an 
179.18  amount less than the amount raised by a levy of a net tax rate 
179.19  of 6.82 percent times the adjusted net tax capacity for taxes 
179.20  payable in 1990 and thereafter of that district for the 
179.21  preceding year as determined by the commissioner.  The amount of 
179.22  any increased levy authorized by referendum pursuant to section 
179.23  124A.03, subdivision 2, shall not be reduced pursuant to this 
179.24  subdivision.  The amount of any levy authorized by section 
179.25  124.912, subdivision 1, to make payments for bonds issued and 
179.26  for interest thereon, shall not be reduced pursuant to this 
179.27  subdivision.  
179.28     (4) Before computing the reduction pursuant to this 
179.29  subdivision of the health and safety levy authorized by sections 
179.30  124.83 and 124.91, subdivision 6, the commissioner shall 
179.31  ascertain from each affected school district the amount it 
179.32  proposes to levy under each section or subdivision.  The 
179.33  reduction shall be computed on the basis of the amount so 
179.34  ascertained. 
179.35     (5) Notwithstanding any law to the contrary, any amounts 
179.36  received by districts in any fiscal year pursuant to sections 
180.1   298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 
180.2   298.405; or any law imposing a tax on severed mineral values; 
180.3   and not deducted from general education aid pursuant to section 
180.4   124A.035, subdivision 5, clause (2), and not applied to reduce 
180.5   levies pursuant to this subdivision shall be paid by the 
180.6   district to the St. Louis county auditor in the following amount 
180.7   by March 15 of each year, the amount required to be subtracted 
180.8   from the previous fiscal year's general education aid pursuant 
180.9   to section 124A.035, subdivision 5, which is in excess of the 
180.10  general education aid earned for that fiscal year.  The county 
180.11  auditor shall deposit any amounts received pursuant to this 
180.12  clause in the St. Louis county treasury for purposes of paying 
180.13  the taconite homestead credit as provided in section 273.135. 
180.14     Sec. 2.  Minnesota Statutes 1996, section 273.135, 
180.15  subdivision 2, is amended to read: 
180.16     Subd. 2.  The amount of the reduction authorized by 
180.17  subdivision 1 shall be: 
180.18     (a) In the case of property located within the boundaries 
180.19  of a municipality which meets the qualifications prescribed in 
180.20  section 273.134, 66 percent of the tax, provided that the 
180.21  reduction shall not exceed the maximum amounts specified in 
180.22  clause (c), and shall not exceed an amount sufficient to reduce 
180.23  the effective tax rate on each parcel of property to 95 percent 
180.24  of the base year effective tax rate.  In no case will the 
180.25  reduction for each homestead resulting from this credit be less 
180.26  than $10.  
180.27     (b) In the case of property located within the boundaries 
180.28  of a school district which qualifies as a tax relief area but 
180.29  which is outside the boundaries of a municipality which meets 
180.30  the qualifications prescribed in section 273.134, 57 percent of 
180.31  the tax, provided that the reduction shall not exceed the 
180.32  maximum amounts specified in clause (c), and shall not exceed an 
180.33  amount sufficient to reduce the effective tax rate on each 
180.34  parcel of property to 95 percent of the base year effective tax 
180.35  rate.  In no case will the reduction for each homestead 
180.36  resulting from this credit be less than $10.  
181.1      (c) The maximum reduction of the tax is $225.40 $315.10 on 
181.2   property described in clause (a) and $200.10 $289.80 on property 
181.3   described in clause (b), for taxes payable in 1985.  These 
181.4   maximum amounts shall increase by $15 times the quantity one 
181.5   minus the homestead credit equivalency percentage per year for 
181.6   taxes payable in 1986 and subsequent years.  
181.7      For the purposes of this subdivision, "homestead credit 
181.8   equivalency percentage" means one minus the ratio of the net 
181.9   class rate to the gross class rate applicable to the first 
181.10  $72,000 of the market value of residential homesteads, 
181.11  "effective tax rate" means tax divided by the market value of a 
181.12  property, and the "base year effective tax rate" means the 
181.13  payable 1988 tax on a property with an identical market value to 
181.14  that of the property receiving the credit in the current year 
181.15  after the application of the credits payable under Minnesota 
181.16  Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
181.17  section, divided by the market value of the property.  
181.18     Sec. 3.  Minnesota Statutes 1996, section 273.1391, 
181.19  subdivision 2, is amended to read: 
181.20     Subd. 2.  The amount of the reduction authorized by 
181.21  subdivision 1 shall be: 
181.22     (a) In the case of property located within a school 
181.23  district which does not meet the qualifications of section 
181.24  273.134 as a tax relief area, but which is located in a county 
181.25  with a population of less than 100,000 in which taconite is 
181.26  mined or quarried and wherein a school district is located which 
181.27  does meet the qualifications of a tax relief area, and provided 
181.28  that at least 90 percent of the area of the school district 
181.29  which does not meet the qualifications of section 273.134 lies 
181.30  within such county, 57 percent of the tax on qualified property 
181.31  located in the school district that does not meet the 
181.32  qualifications of section 273.134, provided that the amount of 
181.33  said reduction shall not exceed the maximum amounts specified in 
181.34  clause (c), and shall not exceed an amount sufficient to reduce 
181.35  the effective tax rate on each parcel of property to the product 
181.36  of 95 percent of the base year effective tax rate multiplied by 
182.1   the ratio of the current year's tax rate to the payable 1989 tax 
182.2   rate.  In no case will the reduction for each homestead 
182.3   resulting from this credit be less than $10.  The reduction 
182.4   provided by this clause shall only be applicable to property 
182.5   located within the boundaries of the county described therein.  
182.6      (b) In the case of property located within a school 
182.7   district which does not meet the qualifications of section 
182.8   273.134 as a tax relief area, but which is located in a school 
182.9   district in a county containing a city of the first class and a 
182.10  qualifying municipality, but not in a school district containing 
182.11  a city of the first class or adjacent to a school district 
182.12  containing a city of the first class unless the school district 
182.13  so adjacent contains a qualifying municipality, 57 percent of 
182.14  the tax, but not to exceed the maximums specified in clause (c), 
182.15  and shall not exceed an amount sufficient to reduce the 
182.16  effective tax rate on each parcel of property to the product of 
182.17  95 percent of the base year effective tax rate multiplied by the 
182.18  ratio of the current year's tax rate to the payable 1989 tax 
182.19  rate.  In no case will the reduction for each homestead 
182.20  resulting from this credit be less than $10. 
182.21     (c) The maximum reduction of the tax is $200.10 for taxes 
182.22  payable in 1985.  This maximum amount shall increase by $15 
182.23  multiplied by the quantity one minus the homestead credit 
182.24  equivalency percentage per year for taxes payable in 1986 and 
182.25  subsequent years $289.80.  
182.26     For the purposes of this subdivision, "homestead credit 
182.27  equivalency percentage" means one minus the ratio of the net 
182.28  class rate to the gross class rate applicable to the first 
182.29  $72,000 of the market value of residential homesteads, and 
182.30  "effective tax rate" means tax divided by the market value of a 
182.31  property, and the "base year effective tax rate" means the 
182.32  payable 1988 tax on a property with an identical market value to 
182.33  that of the property receiving the credit in the current year 
182.34  after application of the credits payable under Minnesota 
182.35  Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
182.36  section, divided by the market value of the property. 
183.1      Sec. 4.  Minnesota Statutes 1996, section 298.225, 
183.2   subdivision 1, is amended to read: 
183.3      Subdivision 1.  For distribution of taconite production tax 
183.4   in 1987 and thereafter with respect to production in 1986 and 
183.5   thereafter, the distribution of the taconite production tax as 
183.6   provided in section 298.28, subdivisions 2 to 5, 6, paragraphs 
183.7   (b) and (c), 7, and 8, shall equal the lesser of the following 
183.8   amounts:  
183.9      (1) the amount distributed pursuant to this section and 
183.10  section 298.28, with respect to 1983 production if the 
183.11  production for the year prior to the distribution year is no 
183.12  less than 42,000,000 taxable tons.  If the production is less 
183.13  than 42,000,000 taxable tons, the amount of the distributions 
183.14  shall be reduced proportionately at the rate of two percent for 
183.15  each 1,000,000 tons, or part of 1,000,000 tons by which the 
183.16  production is less than 42,000,000 tons; or 
183.17     (2)(i) for the distributions made pursuant to section 
183.18  298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 
183.19  (c), 50 40.5 percent of the amount distributed pursuant to this 
183.20  section and section 298.28, with respect to 1983 production.  
183.21     (ii) for the distributions made pursuant to section 298.28, 
183.22  subdivision 5, paragraphs (b) and (d), 75 percent of the amount 
183.23  distributed pursuant to this section and section 298.28, with 
183.24  respect to 1983 production.  
183.25     Sec. 5.  Minnesota Statutes 1996, section 298.28, 
183.26  subdivision 4, is amended to read: 
183.27     Subd. 4.  [SCHOOL DISTRICTS.] (a) 27.5 22.28 cents per 
183.28  taxable ton plus the increase provided in paragraph (d) must be 
183.29  allocated to qualifying school districts to be distributed, 
183.30  based upon the certification of the commissioner of revenue, 
183.31  under paragraphs (b) and (c). 
183.32     (b) 5.5 4.46 cents per taxable ton must be distributed to 
183.33  the school districts in which the lands from which taconite was 
183.34  mined or quarried were located or within which the concentrate 
183.35  was produced.  The distribution must be based on the 
183.36  apportionment formula prescribed in subdivision 2. 
184.1      (c)(i) 22 17.82 cents per taxable ton, less any amount 
184.2   distributed under paragraph (e), shall be distributed to a group 
184.3   of school districts comprised of those school districts in which 
184.4   the taconite was mined or quarried or the concentrate produced 
184.5   or in which there is a qualifying municipality as defined by 
184.6   section 273.134 in direct proportion to school district indexes 
184.7   as follows:  for each school district, its pupil units 
184.8   determined under section 124.17 for the prior school year shall 
184.9   be multiplied by the ratio of the average adjusted net tax 
184.10  capacity per pupil unit for school districts receiving aid under 
184.11  this clause as calculated pursuant to chapter 124A for the 
184.12  school year ending prior to distribution to the adjusted net tax 
184.13  capacity per pupil unit of the district.  Each district shall 
184.14  receive that portion of the distribution which its index bears 
184.15  to the sum of the indices for all school districts that receive 
184.16  the distributions.  
184.17     (ii) Notwithstanding clause (i), each school district that 
184.18  receives a distribution under sections 298.018; 298.23 to 
184.19  298.28, exclusive of any amount received under this clause; 
184.20  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
184.21  imposing a tax on severed mineral values that is less than the 
184.22  amount of its levy reduction under section 124.918, subdivision 
184.23  8, for the second year prior to the year of the distribution 
184.24  shall receive a distribution equal to the difference; the amount 
184.25  necessary to make this payment shall be derived from 
184.26  proportionate reductions in the initial distribution to other 
184.27  school districts under clause (i).  
184.28     (d) Any school district described in paragraph (c) where a 
184.29  levy increase pursuant to section 124A.03, subdivision 2, is 
184.30  authorized by referendum, shall receive a distribution according 
184.31  to the following formula.  In 1994, the amount distributed per 
184.32  ton shall be equal to the amount per ton distributed in 1991 
184.33  under this paragraph increased in the same proportion as the 
184.34  increase between the fourth quarter of 1989 and the fourth 
184.35  quarter of 1992 in the implicit price deflator as defined in 
184.36  section 298.24, subdivision 1.  On July 15, 1995, and subsequent 
185.1   years, the increase over the amount established for the prior 
185.2   year shall be determined according to the increase in the 
185.3   implicit price deflator as provided in section 298.24, 
185.4   subdivision 1.  Each district shall receive the product of: 
185.5      (i) $175 times the pupil units identified in section 
185.6   124.17, subdivision 1, enrolled in the second previous year or 
185.7   the 1983-1984 school year, whichever is greater, less the 
185.8   product of 1.8 percent times the district's taxable net tax 
185.9   capacity in the second previous year; times 
185.10     (ii) the lesser of: 
185.11     (A) one, or 
185.12     (B) the ratio of the sum of the amount certified pursuant 
185.13  to section 124A.03, subdivision 1g, in the previous year, plus 
185.14  the amount certified pursuant to section 124A.03, subdivision 
185.15  1i, in the previous year, plus the referendum aid according to 
185.16  section 124A.03, subdivision 1h, for the current year, plus an 
185.17  amount equal to the reduction under section 124A.03, subdivision 
185.18  3b, to the product of 1.8 percent times the district's taxable 
185.19  net tax capacity in the second previous year. 
185.20     If the total amount provided by paragraph (d) is 
185.21  insufficient to make the payments herein required then the 
185.22  entitlement of $175 per pupil unit shall be reduced uniformly so 
185.23  as not to exceed the funds available.  Any amounts received by a 
185.24  qualifying school district in any fiscal year pursuant to 
185.25  paragraph (d) shall not be applied to reduce general education 
185.26  aid which the district receives pursuant to section 124A.23 or 
185.27  the permissible levies of the district.  Any amount remaining 
185.28  after the payments provided in this paragraph shall be paid to 
185.29  the commissioner of iron range resources and rehabilitation who 
185.30  shall deposit the same in the taconite environmental protection 
185.31  fund and the northeast Minnesota economic protection trust fund 
185.32  as provided in subdivision 11. 
185.33     Each district receiving money according to this paragraph 
185.34  shall reserve $25 times the number of pupil units in the 
185.35  district.  It may use the money for early childhood programs or 
185.36  for outcome-based learning programs that enhance the academic 
186.1   quality of the district's curriculum.  The outcome-based 
186.2   learning programs must be approved by the commissioner of 
186.3   children, families, and learning. 
186.4      (e) There shall be distributed to any school district the 
186.5   amount which the school district was entitled to receive under 
186.6   section 298.32 in 1975. 
186.7      Sec. 6.  Minnesota Statutes 1996, section 298.28, 
186.8   subdivision 6, is amended to read: 
186.9      Subd. 6.  [PROPERTY TAX RELIEF.] (a) Fifteen In 1999, 38.81 
186.10  cents per taxable ton, less any amount required to be 
186.11  distributed under paragraphs (b) and (c), and less any amount 
186.12  required to be deducted under paragraph (d), must be allocated 
186.13  to St. Louis county acting as the counties' fiscal agent, to be 
186.14  distributed as provided in sections 273.134 to 273.136. 
186.15     (b) If an electric power plant owned by and providing the 
186.16  primary source of power for a taxpayer mining and concentrating 
186.17  taconite is located in a county other than the county in which 
186.18  the mining and the concentrating processes are conducted, .1875 
186.19  cent per taxable ton of the tax imposed and collected from such 
186.20  taxpayer shall be paid to the county. 
186.21     (c) If an electric power plant owned by and providing the 
186.22  primary source of power for a taxpayer mining and concentrating 
186.23  taconite is located in a school district other than a school 
186.24  district in which the mining and concentrating processes are 
186.25  conducted, .5625 .7282 cent per taxable ton of the tax imposed 
186.26  and collected from the taxpayer shall be paid to the school 
186.27  district. 
186.28     (d) Two cents per taxable ton must be deducted from the 
186.29  amount allocated to the St. Louis county auditor under paragraph 
186.30  (a). 
186.31     Sec. 7.  Minnesota Statutes 1996, section 298.28, 
186.32  subdivision 9, is amended to read: 
186.33     Subd. 9.  [MINNESOTA ECONOMIC PROTECTION TRUST FUND.] 1.5 
186.34  In 1999, 3.35 cents per taxable ton shall be paid to the 
186.35  northeast Minnesota economic protection trust fund.  
186.36     Sec. 8.  Minnesota Statutes 1996, section 298.28, 
187.1   subdivision 10, is amended to read: 
187.2      Subd. 10.  [INCREASE.] Beginning in 2000, the amounts 
187.3   determined under subdivisions 6, paragraph (a), and 9 shall be 
187.4   increased in 1979 and subsequent years prior to 1988 in the same 
187.5   proportion as the increase in the steel mill products index as 
187.6   provided in section 298.24, subdivision 1.  The amount 
187.7   distributed in 1988 shall be increased according to the increase 
187.8   that would have occurred in the rate of tax under section 298.24 
187.9   if the rate had been adjusted according to the implicit price 
187.10  deflator for 1987 production.  Those amounts shall be increased 
187.11  in 1989, 1990, and 1991 in the same proportion as the increase 
187.12  in the implicit price deflator as provided in section 298.24, 
187.13  subdivision 1.  In 1992 and 1993, the amounts determined under 
187.14  subdivisions 6, paragraph (a), and 9, shall be the distribution 
187.15  per ton determined for distribution in 1991.  In 1994, the 
187.16  amounts determined under subdivisions 6, paragraph (a), and 9, 
187.17  shall be the distribution per ton determined for distribution in 
187.18  1991 increased in the same proportion as the increase between 
187.19  the fourth quarter of 1989 and the fourth quarter of 1992 in the 
187.20  implicit price deflator as defined in section 298.24, 
187.21  subdivision 1.  Those amounts shall be increased in 1995 and 
187.22  subsequent years in the same proportion as the increase in the 
187.23  implicit price deflator as provided in section 298.24, 
187.24  subdivision 1.  
187.25     The distributions per ton determined under subdivisions 5, 
187.26  paragraphs (b) and (d), and 6, paragraphs paragraph (b) and (c) 
187.27  for distribution in 1988 and subsequent years shall be the 
187.28  distribution per ton determined for distribution in 1987. 
187.29     Sec. 9.  Minnesota Statutes 1996, section 298.28, 
187.30  subdivision 11, is amended to read: 
187.31     Subd. 11.  [REMAINDER.] (a) The proceeds of the tax imposed 
187.32  by section 298.24 which remain after the distributions and 
187.33  payments in subdivisions 2 to 10a, as certified by the 
187.34  commissioner of revenue, and paragraphs (b), and (c), and (d) 
187.35  have been made, together with interest earned on all money 
187.36  distributed under this section prior to distribution, shall be 
188.1   divided between the taconite environmental protection fund 
188.2   created in section 298.223 and the northeast Minnesota economic 
188.3   protection trust fund created in section 298.292 as follows:  
188.4   Two-thirds to the taconite environmental protection fund and 
188.5   one-third to the northeast Minnesota economic protection trust 
188.6   fund.  The proceeds shall be placed in the respective special 
188.7   accounts. 
188.8      (b) There shall be distributed to each city, town, school 
188.9   district, and county the amount that it received under section 
188.10  294.26 in calendar year 1977; provided, however, that the amount 
188.11  distributed in 1981 to the unorganized territory number 2 of 
188.12  Lake county and the town of Beaver Bay based on the 
188.13  between-terminal trackage of Erie Mining Company will be 
188.14  distributed in 1982 and subsequent years to the unorganized 
188.15  territory number 2 of Lake county and the towns of Beaver Bay 
188.16  and Stony River based on the miles of track of Erie Mining 
188.17  Company in each taxing district. 
188.18     (c) There shall be distributed to the iron range resources 
188.19  and rehabilitation board the amounts it received in 1977 under 
188.20  section 298.22.  The amount distributed under this paragraph 
188.21  shall be expended within or for the benefit of the tax relief 
188.22  area defined in section 273.134. 
188.23     (d) There shall be distributed to each school district 81 
188.24  percent of the amount that it received under section 294.26 in 
188.25  calendar year 1977. 
188.26     Sec. 10.  [EFFECTIVE DATE.] 
188.27     Section 1 is effective for taxes levied in 2000.  Sections 
188.28  2 and 3 are effective for taxes payable in 1999.  Sections 4; 5; 
188.29  and 6, paragraph (c); and 8 are effective for production year 
188.30  1999, distributions made in 2000.  Sections 6, paragraph (a); 7; 
188.31  and 9 are effective for production year 1998, distributions made 
188.32  in 1999. 
188.33                             ARTICLE 10
188.34              TAX INCREMENT FINANCING AND DEVELOPMENT
188.35     Section 1.  Minnesota Statutes 1996, section 273.111, 
188.36  subdivision 9, is amended to read: 
189.1      Subd. 9.  When real property which is being, or has been 
189.2   valued and assessed under this section no longer qualifies under 
189.3   subdivisions 3 and 6 or no longer chooses to participate in the 
189.4   program, the portion no longer qualifying shall be subject to 
189.5   additional taxes, in the amount equal to the difference between 
189.6   the taxes determined in accordance with subdivision 4, and the 
189.7   amount determined under subdivision 5, provided, however, that 
189.8   the amount determined under subdivision 5 shall not be greater 
189.9   than it would have been had the actual bona fide sale price of 
189.10  the real property at an arms length transaction been used in 
189.11  lieu of the market value determined under subdivision 5.  Such 
189.12  additional taxes shall be extended against the property on the 
189.13  tax list for the current year, provided, however, that no 
189.14  interest or penalties shall be levied on such additional taxes 
189.15  if timely paid, and provided further, that such additional taxes 
189.16  shall only be levied with respect to the last three years that 
189.17  the said property has been valued and assessed under this 
189.18  section, except that if the property is included in a tax 
189.19  increment financing district as provided under section 469.176, 
189.20  subdivision 7, the additional taxes are levied with respect to 
189.21  the last seven years that the property has been valued and 
189.22  assessed under this section. 
189.23     Sec. 2.  Minnesota Statutes 1996, section 273.112, 
189.24  subdivision 7, is amended to read: 
189.25     Subd. 7.  When real property which is being, or has been, 
189.26  valued and assessed under this section no longer qualifies under 
189.27  subdivision 3 or no longer chooses to participate in the 
189.28  program, the portion which no longer qualifies shall be subject 
189.29  to additional taxes, in the amount equal to the difference 
189.30  between the taxes determined in accordance with subdivision 4, 
189.31  and the amount determined under subdivision 5, provided, 
189.32  however, that the amount determined under subdivision 5 shall 
189.33  not be greater than it would have been had the actual bona fide 
189.34  sale price of the real property at an arms length transaction 
189.35  been used in lieu of the market value determined under 
189.36  subdivision 5.  The additional taxes shall be extended against 
190.1   the property on the tax list for the current year, provided, 
190.2   however, that no interest or penalties shall be levied on the 
190.3   additional taxes if timely paid, and provided further, that the 
190.4   additional taxes shall only be levied with respect to the last 
190.5   seven years that the property has been valued and assessed under 
190.6   this section, except that if the property is included in a tax 
190.7   increment financing district under section 469.176, subdivision 
190.8   7, the additional taxes are levied with respect to the last ten 
190.9   years that the property has been valued and assessed under this 
190.10  section.  This subdivision does not apply to real property that 
190.11  ceases to qualify under subdivision 3 because it is acquired by 
190.12  the state of Minnesota or a political subdivision, agency, or 
190.13  instrumentality of the state, provided that the property 
190.14  continues to be used for a qualifying purpose for at least five 
190.15  years from the date that the property was acquired. 
190.16     Sec. 3.  Minnesota Statutes 1996, section 469.091, 
190.17  subdivision 1, is amended to read: 
190.18     Subdivision 1.  [ESTABLISHMENT.] (a) A city may, by 
190.19  adopting an enabling resolution in compliance with the 
190.20  procedural requirements of section 469.093, establish an 
190.21  economic development authority that, subject to section 469.092, 
190.22  has the powers contained in sections 469.090 to 469.108 and the 
190.23  powers of a housing and redevelopment authority under sections 
190.24  469.001 to 469.047 or other law, and of a city under sections 
190.25  469.124 to 469.134 or other law.  If the economic development 
190.26  authority exercises the powers of a housing and redevelopment 
190.27  authority contained in sections 469.001 to 469.047 or other law, 
190.28  the city shall exercise the powers relating to a housing and 
190.29  redevelopment authority granted to a city by sections 469.001 to 
190.30  469.047 or other law.  
190.31     (b) A county may establish an economic development 
190.32  authority in the manner provided in sections 469.090 to 
190.33  469.1081, and may impose limits on the authority as enumerated 
190.34  in section 469.092.  A county economic development authority may 
190.35  create and define the boundaries of economic development 
190.36  districts at any place or places within the county, provided 
191.1   that a project as recommended by the county authority that is to 
191.2   be located within the corporate limits of a city may not be 
191.3   commenced without the approval of the governing body of the city.
191.4   If an economic development authority is established by a county, 
191.5   the county may exercise all of the powers relating to an 
191.6   economic development authority granted to a city under sections 
191.7   469.090 to 469.1081, or other law, including the power to levy a 
191.8   tax to support the activities of the authority. 
191.9      Sec. 4.  Minnesota Statutes 1996, section 469.101, 
191.10  subdivision 1, is amended to read: 
191.11     Subdivision 1.  [ESTABLISHMENT.] An economic development 
191.12  authority may create and define the boundaries of economic 
191.13  development districts at any place or places within the city if 
191.14  the district satisfies the requirements of section 469.174, 
191.15  subdivision 10, except that the district boundaries must be 
191.16  contiguous, and may use the powers granted in sections 469.090 
191.17  to 469.108 to carry out its purposes.  First the authority must 
191.18  hold a public hearing on the matter.  At least ten days before 
191.19  the hearing, the authority shall publish notice of the hearing 
191.20  in a daily newspaper of general circulation in the city.  Also, 
191.21  the authority shall find that an economic development district 
191.22  is proper and desirable to establish and develop within the city.
191.23     Sec. 5.  Minnesota Statutes 1996, section 469.174, is 
191.24  amended by adding a subdivision to read: 
191.25     Subd. 28.  [DECERTIFICATION.] "Decertify" or 
191.26  "decertification" means the termination of a tax increment 
191.27  financing district which occurs when the county auditor removes 
191.28  all remaining parcels from the district. 
191.29     Sec. 6.  Minnesota Statutes 1996, section 469.175, 
191.30  subdivision 5, is amended to read: 
191.31     Subd. 5.  [ANNUAL DISCLOSURE.] (a) For all tax increment 
191.32  financing districts, whether created prior or subsequent to 
191.33  August 1, 1979, on or before July 1 of each year, The authority 
191.34  shall annually submit to the county board, the county auditor, 
191.35  the school board, state auditor and, if the authority is other 
191.36  than the municipality, the governing body of the municipality, a 
192.1   report of the status of the district.  The report shall include 
192.2   the following information:  the amount and the source of revenue 
192.3   in the account, the amount and purpose of expenditures from the 
192.4   account, the amount of any pledge of revenues, including 
192.5   principal and interest on any outstanding bonded indebtedness, 
192.6   the original net tax capacity of the district and any 
192.7   subdistrict, the captured net tax capacity retained by the 
192.8   authority, the captured net tax capacity shared with other 
192.9   taxing districts, the tax increment received, and any additional 
192.10  information necessary to demonstrate compliance with any 
192.11  applicable tax increment financing plan.  The authority must 
192.12  submit the annual report for a year on or before August 1 of the 
192.13  next year. 
192.14     (b) An annual statement showing the tax increment received 
192.15  and expended in that year, the original net tax capacity, 
192.16  captured net tax capacity, amount of outstanding bonded 
192.17  indebtedness, the amount of the district's and any subdistrict's 
192.18  increments paid to other governmental bodies, the amount paid 
192.19  for administrative costs, the sum of increments paid, directly 
192.20  or indirectly, for activities and improvements located outside 
192.21  of the district, and any additional information the authority 
192.22  deems necessary shall be published in a newspaper of general 
192.23  circulation in the municipality.  If the fiscal disparities 
192.24  contribution under chapter 276A or 473F for the district is 
192.25  computed under section 469.177, subdivision 3, paragraph (a), 
192.26  the annual statement must disclose that fact and indicate the 
192.27  amount of increased property tax imposed on other properties in 
192.28  the municipality as a result of the fiscal disparities 
192.29  contribution.  The commissioner of revenue shall prescribe the 
192.30  form of this statement and the method for calculating the 
192.31  increased property taxes.  The authority must publish the annual 
192.32  statement for a year no later than July 1 August 15 of the next 
192.33  year.  The authority must provide identification of the 
192.34  newspaper of general circulation in the municipality to which 
192.35  the annual statement has been or will be submitted for 
192.36  publication and a copy of the annual statement to the state 
193.1   auditor by the time it submits it for publication on or before 
193.2   August 1 of the year in which the statement must be published.  
193.3      (c) The disclosure and reporting requirements imposed by 
193.4   this subdivision apply to districts certified before, on, or 
193.5   after August 1, 1979. 
193.6      Sec. 7.  Minnesota Statutes 1996, section 469.175, 
193.7   subdivision 6, is amended to read: 
193.8      Subd. 6.  [FINANCIAL REPORTING.] (a) The state auditor 
193.9   shall develop a uniform system of accounting and financial 
193.10  reporting for tax increment financing districts.  The system of 
193.11  accounting and financial reporting shall, as nearly as possible: 
193.12     (1) provide for full disclosure of the sources and uses of 
193.13  public funds in the district; 
193.14     (2) permit comparison and reconciliation with the affected 
193.15  local government's accounts and financial reports; 
193.16     (3) permit auditing of the funds expended on behalf of a 
193.17  district, including a single district that is part of a 
193.18  multidistrict project or that is funded in part or whole through 
193.19  the use of a development account funded with tax increments from 
193.20  other districts or with other public money; 
193.21     (4) be consistent with generally accepted accounting 
193.22  principles. 
193.23     (b) The authority must annually submit to the state 
193.24  auditor, on or before July 1, a financial report in compliance 
193.25  with paragraph (a).  Copies of the report must also be provided 
193.26  to the county and school district boards and to the governing 
193.27  body of the municipality, if the authority is not the 
193.28  municipality.  To the extent necessary to permit compliance with 
193.29  the requirement of financial reporting, the county and any other 
193.30  appropriate local government unit or private entity must provide 
193.31  the necessary records or information to the authority or the 
193.32  state auditor as provided by the system of accounting and 
193.33  financial reporting developed pursuant to paragraph (a).  The 
193.34  authority must submit the annual report for a year on or before 
193.35  August 1 of the next year. 
193.36     (c) The annual financial report must also include the 
194.1   following items: 
194.2      (1) the original net tax capacity of the district and any 
194.3   subdistrict; 
194.4      (2) the captured net tax capacity of the district, 
194.5   including the amount of any captured net tax capacity shared 
194.6   with other taxing districts; 
194.7      (3) for the reporting period and for the duration of the 
194.8   district, the amount budgeted under the tax increment financing 
194.9   plan, and the actual amount expended for, at least, the 
194.10  following categories: 
194.11     (i) acquisition of land and buildings through condemnation 
194.12  or purchase; 
194.13     (ii)  site improvements or preparation costs; 
194.14     (iii) installation of public utilities, parking facilities, 
194.15  streets, roads, sidewalks, or other similar public improvements; 
194.16     (iv) administrative costs, including the allocated cost of 
194.17  the authority; 
194.18     (v) public park facilities, facilities for social, 
194.19  recreational, or conference purposes, or other similar public 
194.20  improvements; 
194.21     (4) for properties sold to developers, the total cost of 
194.22  the property to the authority and the price paid by the 
194.23  developer; and 
194.24     (5) the amount of increments rebated or paid to developers 
194.25  or property owners for privately financed improvements or other 
194.26  qualifying costs. 
194.27     (d) The reporting requirements imposed by this subdivision 
194.28  apply to districts certified before, on, and after August 1, 
194.29  1979. 
194.30     Sec. 8.  Minnesota Statutes 1996, section 469.175, 
194.31  subdivision 6a, is amended to read: 
194.32     Subd. 6a.  [REPORTING REQUIREMENTS.] (a) The municipality 
194.33  must annually report to the state auditor the following amounts 
194.34  for the entire municipality: 
194.35     (1) the total principal amount of nondefeased tax increment 
194.36  financing bonds that are outstanding at the end of the previous 
195.1   calendar year; and 
195.2      (2) the total annual amount of principal and interest 
195.3   payments that are due for the current calendar year on (i) 
195.4   general obligation tax increment financing bonds, and (ii) other 
195.5   tax increment financing bonds. 
195.6      (b) The municipality must annually report to the state 
195.7   auditor the following amounts for each tax increment financing 
195.8   district located in the municipality: 
195.9      (1) the type of district, whether economic development, 
195.10  redevelopment, housing, soils condition, mined underground 
195.11  space, or hazardous substance site; 
195.12     (2) the date on which the district is required to be 
195.13  decertified; 
195.14     (3) the amount of any payments and the value of in-kind 
195.15  benefits, such as physical improvements and the use of building 
195.16  space, that are financed with revenues derived from increments 
195.17  and are provided to another governmental unit (other than the 
195.18  municipality) during the preceding calendar year; 
195.19     (4) the tax increment revenues for taxes payable in the 
195.20  current calendar year; 
195.21     (5) whether the tax increment financing plan or other 
195.22  governing document permits increment revenues to be expended (i) 
195.23  to pay bonds, the proceeds of which were or may be expended on 
195.24  activities located outside of the district, (ii) for deposit 
195.25  into a common fund from which money may be expended on 
195.26  activities located outside of the district, or (iii) to 
195.27  otherwise finance activities located outside of the tax 
195.28  increment financing district; and 
195.29     (6) any additional information that the state auditor may 
195.30  require.  
195.31     (c) The report required by this subdivision must be filed 
195.32  with the state auditor on or before July 1 of each year.  The 
195.33  municipality must submit the annual report for a year required 
195.34  by this subdivision on or before August 1 of the next year. 
195.35     (d) The state auditor may provide for combining the reports 
195.36  required by this subdivision and subdivisions 5 and 6 so that 
196.1   only one report is made for each year to the auditor. 
196.2      (e) This section applies to districts certified before, on, 
196.3   and after August 1, 1979. 
196.4      Sec. 9.  Minnesota Statutes 1996, section 469.175, is 
196.5   amended by adding a subdivision to read: 
196.6      Subd. 6b.  [DURATION OF DISCLOSURE AND REPORTING 
196.7   REQUIREMENTS.] The disclosure and reporting requirements imposed 
196.8   by subdivisions 5, 6, and 6a apply with respect to a tax 
196.9   increment financing district beginning with the annual 
196.10  disclosure and reports for the year in which the original net 
196.11  tax capacity of the district was certified and ending with the 
196.12  annual disclosure and reports for the year in which both of the 
196.13  following events have occurred: 
196.14     (1) decertification of the district; and 
196.15     (2) expenditure or return to the county auditor of all 
196.16  remaining revenues derived from tax increments paid by 
196.17  properties in the district. 
196.18     Sec. 10.  Minnesota Statutes 1996, section 469.176, 
196.19  subdivision 7, is amended to read: 
196.20     Subd. 7.  [PARCELS NOT INCLUDABLE IN DISTRICTS; ADDITIONAL 
196.21  TAXES REQUIRED.] (a) If the authority may request requests 
196.22  inclusion in a tax increment financing district and the county 
196.23  auditor may certify the original tax capacity of a parcel or a 
196.24  part of a parcel that qualified under the provisions of section 
196.25  273.111 or 273.112 or chapter 473H for taxes payable in any of 
196.26  the five calendar years before the filing of the request for 
196.27  certification only for 
196.28     (1) a district in which 85 percent or more of the planned 
196.29  buildings and facilities (determined on the basis of square 
196.30  footage) are for manufacturing or production of tangible 
196.31  personal property, including processing resulting in the change 
196.32  in condition of the property; or 
196.33     (2) a qualified housing district as defined in section 
196.34  273.1399, subdivision 1, the county auditor may certify the 
196.35  original tax capacity only if (1) seven years of additional 
196.36  taxes have been paid for property which qualified under section 
197.1   273.111, and (2) ten years of additional taxes for property 
197.2   which qualified under section 273.112.  The additional taxes 
197.3   must be computed and paid as provided under sections 273.111, 
197.4   subdivision 9, and 273.112, subdivision 7, either when the 
197.5   property no longer qualifies or participates in the program or 
197.6   at a later time but before the request for certification is made.
197.7      (b) The authority must inform the county auditor of any 
197.8   parcels which are included within the request which qualified 
197.9   under the provisions of section 273.111 or 273.112 for taxes 
197.10  payable in any of the five calendar years before the filing of 
197.11  the request. 
197.12     Sec. 11.  Minnesota Statutes 1996, section 469.177, is 
197.13  amended by adding a subdivision to read: 
197.14     Subd. 12.  [DECERTIFICATION OF TAX INCREMENT FINANCING 
197.15  DISTRICT.] The county auditor shall decertify a tax increment 
197.16  financing district when the earliest of the following times is 
197.17  reached: 
197.18     (1) the applicable maximum duration limit under section 
197.19  469.176, subdivisions 1a to 1g; 
197.20     (2) the maximum duration limit, if any, provided by the 
197.21  municipality pursuant to section 469.176, subdivision 1; 
197.22     (3) the time of decertification specified in section 
197.23  469.1761, subdivision 4, if the commissioner of revenue issues 
197.24  an order of noncompliance and the maximum duration limit for 
197.25  economic development districts has been exceeded; 
197.26     (4) upon completion of the required actions to allow 
197.27  decertification under section 469.1763, subdivision 4; or 
197.28     (5) upon receipt by the county auditor of a written request 
197.29  for decertification from the authority that requested 
197.30  certification of the original net tax capacity of the district 
197.31  or its successor. 
197.32     Sec. 12.  Minnesota Statutes 1996, section 469.1771, is 
197.33  amended by adding a subdivision to read: 
197.34     Subd. 2a.  [SUSPENSION OF DISTRIBUTION OF TAX 
197.35  INCREMENT.] (a) If an authority fails to make a disclosure or to 
197.36  submit a report containing the information required by section 
198.1   469.175, subdivisions 5 and 6, regarding a tax increment 
198.2   financing district within the time provided in section 469.175, 
198.3   subdivisions 5 and 6, or if a municipality fails to submit a 
198.4   report containing the information required by section 469.175, 
198.5   subdivision 6a, regarding a tax increment financing district 
198.6   within the time provided in section 469.175, subdivision 6a, the 
198.7   state auditor shall mail to the authority a written notice that 
198.8   it or the municipality has failed to make the required 
198.9   disclosure or to submit a required report with respect to a 
198.10  particular district or districts.  The state auditor shall mail 
198.11  the notice on or before the third Tuesday of August of the year 
198.12  in which the disclosure or report was required to be made or 
198.13  submitted.  The notice shall describe the consequences of 
198.14  failing to disclose or submit a report as provided in paragraph 
198.15  (b).  If the state auditor has not received a copy of a 
198.16  disclosure or a report described in this paragraph on or before 
198.17  the third Tuesday of November of the year in which the 
198.18  disclosure or report was required to be made or submitted, the 
198.19  state auditor shall mail a written notice to the county auditor 
198.20  to hold the distribution of tax increment from a particular 
198.21  district or districts.  
198.22     (b) Upon receiving written notice from the state auditor to 
198.23  hold the distribution of tax increment, the county auditor shall 
198.24  hold: 
198.25     (1) 25 percent of the amount of tax increment that 
198.26  otherwise would be distributed, if the distribution is made 
198.27  after the third Friday in November but during the year in which 
198.28  the disclosure or report was required to be made or submitted; 
198.29  or 
198.30     (2) 100 percent of the amount of tax increment that 
198.31  otherwise would be distributed, if the distribution is made 
198.32  after December 31 of the year in which the disclosure or report 
198.33  was required to be made or submitted. 
198.34     (c) Upon receiving the copy of the disclosure and all of 
198.35  the reports described in paragraph (a) with respect to a 
198.36  district regarding which the state auditor has mailed to the 
199.1   county auditor a written notice to hold distribution of tax 
199.2   increment, the state auditor shall mail to the county auditor a 
199.3   written notice lifting the hold and authorizing the county 
199.4   auditor to distribute to the authority or municipality any tax 
199.5   increment that the county auditor had held pursuant to paragraph 
199.6   (b).  The state auditor shall mail the written notice required 
199.7   by this paragraph within five working days after receiving the 
199.8   last outstanding item.  The county auditor shall distribute the 
199.9   tax increment to the authority or municipality within 15 working 
199.10  days after receiving the written notice required by this 
199.11  paragraph. 
199.12     (d) Notwithstanding any law to the contrary, any interest 
199.13  that accrues on tax increment while it is being held by the 
199.14  county auditor pursuant to paragraph (b) is not tax increment 
199.15  and may be retained by the county. 
199.16     (e) For purposes of sections 469.176, subdivisions 1a to 
199.17  1g, and 469.177, subdivision 11, tax increment being held by the 
199.18  county auditor pursuant to paragraph (b) shall be considered 
199.19  distributed to or received by the authority or municipality as 
199.20  of the time that it would have been distributed or received but 
199.21  for paragraph (b). 
199.22     Sec. 13.  Minnesota Statutes 1996, section 469.1771, 
199.23  subdivision 5, is amended to read: 
199.24     Subd. 5.  [DISPOSITION OF PAYMENTS.] If the authority does 
199.25  not have sufficient increments or other available money to make 
199.26  a payment required by this section, the municipality that 
199.27  approved the district must use any available money to make the 
199.28  payment including the levying of property taxes.  Money received 
199.29  by the county auditor under this section must be distributed as 
199.30  excess increments under section 469.176, subdivision 2, 
199.31  paragraph (a), clause (4)., except that if the county auditor 
199.32  receives the payment after (1) 60 days from a municipality's 
199.33  receipt of the state auditor's notification of noncompliance 
199.34  requiring the payment, or (2) the commencement of an action by 
199.35  the county attorney to compel the payment, then no distributions 
199.36  may be made to the municipality that approved the tax increment 
200.1   financing district. 
200.2      Sec. 14.  [GOLDEN VALLEY; TIF.] 
200.3      Subdivision 1.  [DISTRICT EXTENSION.] (a) Notwithstanding 
200.4   Minnesota Statutes, section 469.176, subdivision 1c, tax 
200.5   increments from the Valley Square tax increment financing 
200.6   district shall be paid to the housing and redevelopment 
200.7   authority of the city of Golden Valley for property taxes 
200.8   payable in 2001 through 2010 for the following parcels in the 
200.9   district, identified by their property tax identification 
200.10  numbers: 
200.11     (1) 31-118-21-14-0001; 
200.12     (2) 31-118-21-14-0006; 
200.13     (3) 31-118-21-14-0018 through 31-118-21-14-0022; 
200.14     (4) 31-118-21-14-0029 through 31-118-21-14-0032; and 
200.15     (5) 31-118-21-41-0001. 
200.16     (b) Increments permitted to be paid to the authority by 
200.17  paragraph (a) may only be used to pay or defease bonds issued to 
200.18  fund public redevelopment costs within the redevelopment project 
200.19  or bonds issued to refund the bonds. 
200.20     (c) Collection or receipt of increments by the housing and 
200.21  redevelopment authority under paragraph (a) does not reduce or 
200.22  affect the amount of increments that the authority may receive 
200.23  after April 1, 2001, for the district to pay bonds issued before 
200.24  April 1, 1990. 
200.25     (d) Any housing financed or assisted, directly or 
200.26  indirectly, with increments from the district during the 
200.27  extension period permitted by this section must meet the 
200.28  requirements of Minnesota Statutes, section 469.1761. 
200.29     Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
200.30  day after compliance with the requirements of Minnesota 
200.31  Statutes, sections 469.1782, subdivision 2; and 645.021, 
200.32  subdivision 3. 
200.33     Sec. 15.  [BROOKLYN CENTER SPECIAL TAXING DISTRICT 
200.34  PROCEDURES.] 
200.35     Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
200.36  the terms defined in this subdivision have the meanings given 
201.1   them. 
201.2      (b) "City" means the city of Brooklyn Center. 
201.3      (c) "Enabling ordinance" means the ordinance adopted by the 
201.4   city council establishing the Brookdale special taxing district. 
201.5      (d) "Brookdale special taxing district" means all or any 
201.6   portion of the following described property within tax increment 
201.7   financing district No. 3 in the city: 
201.8      All that property that is located within the area bounded 
201.9   by a continuous line beginning at a point at the intersection of 
201.10  county road No. 10 and trunk highway No. 100 and going 
201.11  southwesterly along the center line of trunk highway No. 100 to 
201.12  its intersection with Brooklyn Boulevard; thence northerly along 
201.13  the center line of Brooklyn Boulevard to a point 476.52 feet 
201.14  northerly of the intersection of Brooklyn Boulevard and county 
201.15  road No. 10; thence easterly from that point along a straight 
201.16  line to the center line of Shingle Creek; thence southerly along 
201.17  the center line of Shingle Creek to its intersection with the 
201.18  north right-of-way line of county road No. 10; thence easterly 
201.19  along the north right-of-way line of county road No. 10 to the 
201.20  east right-of-way line of Shingle Creek Parkway; thence 
201.21  northerly along the west property line of lot 2, block 2, 
201.22  Brookdale square addition 165.43 feet; thence northeasterly 
201.23  along the northwest property line of lot 2, block 2, Brookdale 
201.24  square addition 297.73 feet; thence easterly along the north 
201.25  property line of lot 2, block 2, Brookdale square addition 
201.26  914.34 feet; thence southerly 517.9 feet along the easterly 
201.27  property line of lot 2, block 2, Brookdale square addition 
201.28  extended to the center line of county road No. 10; thence 
201.29  easterly along the center line of county road No. 10 to the 
201.30  point of the beginning. 
201.31     (e) "Redevelopment services" has the meaning given in the 
201.32  city's enabling ordinance, and may include any services or 
201.33  expenditures the city or its economic development authority may 
201.34  provide or incur under Minnesota Statutes, sections 469.001 to 
201.35  469.047, and 469.090 to 469.1081, including without limitation 
201.36  amounts necessary to pay the principal of or interest on bonds 
202.1   issued by the city or its economic development authority under 
202.2   Minnesota Statutes, section 469.178. 
202.3      Subd. 2.  [ESTABLISHMENT OF SPECIAL TAXING DISTRICT.] 
202.4      (a) The governing body of the city may adopt an ordinance 
202.5   establishing the Brookdale special taxing district.  The 
202.6   ordinance must describe with particularity the property to be 
202.7   included in the district and the redevelopment services to be 
202.8   provided in the district.  Only property that is subject to an 
202.9   assessment agreement with the city or its economic development 
202.10  authority under Minnesota Statutes, section 469.177, subdivision 
202.11  8, as of the date of adoption of the ordinance may be included 
202.12  within the Brookdale special taxing district and be subject to 
202.13  the tax imposed by the city on the district.  The area of the 
202.14  Brookdale special taxing district may include noncontiguous 
202.15  parcels within the area described in subdivision 1, paragraph 
202.16  (c). 
202.17     (b) The city may impose a tax under this section that is 
202.18  reasonably related to the redevelopment services provided. 
202.19     (c) The boundaries of the Brookdale special taxing district 
202.20  may be enlarged or reduced under the procedures for 
202.21  establishment of the district under paragraph (a).  Property 
202.22  added to the district is subject to the special tax imposed 
202.23  within the district after the property becomes a part of the 
202.24  district. 
202.25     Subd. 3.  [SPECIAL TAX AUTHORITY.] (a) A special tax may be 
202.26  imposed by the city within the Brookdale special taxing district 
202.27  at a rate or amount sufficient to produce the revenues required 
202.28  to provide redevelopment services within the district.  The 
202.29  special tax is payable only in a year in which the assessment 
202.30  agreement for the property subject to the tax remains in effect 
202.31  for that taxes payable year.  The maximum levy may not exceed 
202.32  the amount specified in the assessment agreement. 
202.33     (b) The special tax imposed under this section is not 
202.34  included in the calculation of levies or limits imposed under 
202.35  law or chapter. 
202.36     Subd. 4.  [COLLECTION OF SPECIAL TAX.] The special tax must 
203.1   be imposed on the net tax capacity of the taxable property 
203.2   located in the geographic area described in the ordinance.  
203.3   Taxable net tax capacity must be determined without regard to 
203.4   captured or original net tax capacity under Minnesota Statutes, 
203.5   section 469.177, or to the distribution or contribution value 
203.6   under Minnesota Statutes, section 473F.08.  The special tax is 
203.7   payable and must be collected at the same time and in the same 
203.8   manner as provided for payment and collection of ad valorem 
203.9   taxes.  Special taxes not paid on or before the applicable due 
203.10  date are subject to the same penalty and interest as ad valorem 
203.11  tax amounts not paid by the respective due date.  The due date 
203.12  for the special tax is the due date for the real property tax 
203.13  for the property on which the special tax is imposed. 
203.14     Subd. 5.  [EFFECTIVE DATE.] This section is effective upon 
203.15  compliance by the city of Brooklyn Center with Minnesota 
203.16  Statutes, section 645.021, subdivision 3. 
203.17     Sec. 16.  [CITY OF BROWERVILLE; TIF.] 
203.18     Subdivision 1.  [EXPENDITURE OUTSIDE 
203.19  DISTRICT.] Notwithstanding the provisions of Minnesota Statutes, 
203.20  section 469.1763, the city of Browerville may expend tax 
203.21  increments from tax increment district No. 2 for eligible 
203.22  activities outside tax increment district No. 2 but within 
203.23  development district No. 1.  The limitations contained in 
203.24  Minnesota Statutes, section 469.1763, subdivision 2, do not 
203.25  apply, if the expenditures are used to finance improvements to 
203.26  provide sewer and water service to the tax increment financing 
203.27  district.  
203.28     Subd. 2.  [EFFECTIVE DATE.] This section is effective only 
203.29  after its approval by the governing body of the city of 
203.30  Browerville and compliance with Minnesota Statutes, section 
203.31  645.021, subdivision 3. 
203.32     Sec. 17.  [CITY OF DEEPHAVEN; TAX INCREMENT FINANCING.] 
203.33     Subdivision 1.  [AUTHORIZATION OF 
203.34  EXPENDITURES.] Notwithstanding any law to the contrary, the city 
203.35  of Deephaven may expend revenues derived from tax increment 
203.36  financing district number 1-1 that are available and 
204.1   unencumbered on the date of enactment of this act to finance a 
204.2   public improvement located outside of the district under the 
204.3   conditions in subdivision 2.  The public improvement must be 
204.4   included in the tax increment plan prior to January 1, 1997. 
204.5      Subd. 2.  [CONDITIONS ON USE.] The authority under 
204.6   subdivision 1 to spend increments outside of the tax increment 
204.7   financing district number 1-1 is subject to the following 
204.8   conditions: 
204.9      (1) The city must decertify district number 1-1 by no later 
204.10  than December 31, 1998. 
204.11     (2) The city transfers no more than $700,000 of increments 
204.12  from district number 1-1 to a separate account on the city's 
204.13  books and records.  The interest earned on this account is not 
204.14  tax increment for purposes of Minnesota Statutes, sections 
204.15  469.174 to 469.179. 
204.16     (3) Any unspent increments from district number 1-1 after 
204.17  the transfer under clause (2) are excess increments that must be 
204.18  distributed under Minnesota Statutes, section 469.176, 
204.19  subdivision 2, clause (4). 
204.20     (4) Money in the account established under clause (2) may 
204.21  only be spent to pay for the improvement of the Minnetonka 
204.22  boulevard-Carsons Bay bridge project in the city.  If a grant is 
204.23  not received for the project by December 31, 2002, the balance 
204.24  in the account must be distributed as excess increments under 
204.25  Minnesota Statutes, section 469.176, subdivision 2, clause (4).  
204.26  Any unspent amounts after completion of the project must be 
204.27  distributed as excess increments under Minnesota Statutes, 
204.28  section 469.176, subdivision 2, clause (4). 
204.29     (5) The authority to spend increments from district number 
204.30  1-1 other than money transferred to the account under clause (2) 
204.31  expires upon the day following final enactment of this act. 
204.32     Subd. 3.  [EFFECTIVE DATE.] This section is effective the 
204.33  day upon approval by the governing body of the city of Deephaven 
204.34  and compliance with Minnesota Statutes, section 645.021, 
204.35  subdivision 3, and applies to revenues expended after the date 
204.36  of final enactment. 
205.1      Sec. 18.  [CITY OF BURNSVILLE; ADMISSIONS TAX.] 
205.2      Subdivision 1.  [IMPOSITION.] Notwithstanding Minnesota 
205.3   Statutes, section 477A.016, or any other contrary provision of 
205.4   law or ordinance, the governing body of the city of Burnsville 
205.5   may by ordinance impose a tax on admissions to an amphitheater 
205.6   to be constructed within the city. 
205.7      Subd. 2.  [RATE.] The tax may be imposed at a rate not to 
205.8   exceed $2 per paid admission.  The governing body of the city 
205.9   may by ordinance change the rate imposed, subject to the 
205.10  limitation in this subdivision. 
205.11     Subd. 3.  [COLLECTION.] The method of collection of the tax 
205.12  must be specified in the ordinance imposing the tax.  The tax is 
205.13  exempt from the rules under Minnesota Statutes, section 
205.14  297A.48.  The commissioner of revenue and the city may enter 
205.15  into agreements for the collection and administration of the tax 
205.16  by the state on behalf of the city.  The commissioner may charge 
205.17  the city a reasonable fee for its services from the proceeds of 
205.18  the tax.  The tax is subject to the same interest, penalties, 
205.19  and enforcement provisions as the tax imposed under Minnesota 
205.20  Statutes, chapter 297A. 
205.21     Subd. 4.  [USE OF PROCEEDS.] The city must pay money 
205.22  received from the tax imposed under this section into a separate 
205.23  fund or account to be used only to pay: 
205.24     (1) the costs of imposing and collecting the tax; and 
205.25     (2) for parking lots or ramps, and other public 
205.26  improvements as defined by Minnesota Statutes, section 429.021, 
205.27  within the boundaries of the tax increment financing district 
205.28  established under section 19, or that serve the area within the 
205.29  district. 
205.30     Subd. 5.  [EFFECTIVE DATE.] This section is effective the 
205.31  day following final enactment. 
205.32     Sec. 19.  [CITY OF BURNSVILLE; TAX INCREMENT FINANCING 
205.33  DISTRICT.] 
205.34     Subdivision 1.  [AUTHORIZATION.] The governing body of the 
205.35  city of Burnsville may create a soils condition tax increment 
205.36  financing district, as provided in this section, for an 
206.1   amphitheater and related infrastructure improvements.  Except as 
206.2   otherwise provided in this section, the provisions of Minnesota 
206.3   Statutes, sections 469.174 to 469.179, apply to the district.  
206.4   The city or its economic development authority may be the 
206.5   "authority" for the purposes of Minnesota Statutes, sections 
206.6   469.174 to 469.179. 
206.7      Subd. 2.  [SPECIAL RULES.] (a) The district established 
206.8   under subdivision 1 is subject to the provisions of Minnesota 
206.9   Statutes, sections 469.174 to 469.179, except as provided in 
206.10  this subdivision. 
206.11     (b) The district may consist of all or any portion of the 
206.12  parcels designated by the city of Burnsville as development 
206.13  district No. 2 as of April 26, 1990. 
206.14     (c) Minnesota Statutes, sections 469.174, subdivision 19, 
206.15  and 469.176, subdivision 4b, do not apply to the district. 
206.16     (d) Upon approval of the tax increment financing plan, the 
206.17  governing body of the city of Burnsville must find that the 
206.18  present value of the projected cost of closure of the former 
206.19  solid waste landfill within the district equals or exceeds the 
206.20  present value of the projected tax increments for the maximum 
206.21  duration of the district permitted by the plan. 
206.22     (e) Notwithstanding the provisions of Minnesota Statutes, 
206.23  section 469.1763, increments from the district established under 
206.24  this section may only be expended on improvements and activities 
206.25  within or directly in aid of the district and on administrative 
206.26  expenses. 
206.27     Subd. 3.  [DISTRICT NO. 2-1.] Upon approval of the tax 
206.28  increment financing plan for the district created under 
206.29  subdivision 1, the city shall decertify tax increment financing 
206.30  district No. 2-1.  The balance of the tax increments derived 
206.31  from tax increment financing district No. 2-1 may be expended 
206.32  under the tax increment financing plan for the district created 
206.33  under subdivision 1.  Minnesota Statutes, section 469.176, 
206.34  subdivision 4c, does not apply to the expenditures.  Minnesota 
206.35  Statutes, section 469.1782, subdivision 1, does not apply to tax 
206.36  increment financing district No. 2-1 or the district created 
207.1   under subdivision 1. 
207.2      Subd. 4.  [EFFECTIVE DATE.] This section is effective upon 
207.3   compliance with Minnesota Statutes, sections 469.1782, 
207.4   subdivision 2, and 645.021, subdivision 2. 
207.5      Sec. 20.  [REDEVELOPMENT DISTRICT FOR SEARS PROJECT.] 
207.6      Subdivision 1.  [AUTHORIZATION.] Upon approval of the 
207.7   governing body of the city of Minneapolis by resolution, the 
207.8   Minneapolis community development agency may establish for the 
207.9   Sears project a redevelopment tax increment financing district 
207.10  with phased redevelopment.  The district is subject to Minnesota 
207.11  Statutes, sections 469.174 to 469.179, as amended, except as 
207.12  provided in this section.  
207.13     Subd. 2.  [ORIGINAL NET TAX CAPACITY.] Notwithstanding 
207.14  Minnesota Statutes, section 469.174, subdivision 7, the original 
207.15  net tax capacity of the district, as of the date the authority 
207.16  certifies to the county auditor that the authority has entered 
207.17  into a redevelopment or other agreement for rehabilitation of 
207.18  the site or remediation of hazardous substances, shall be zero.  
207.19     Subd. 3.  [DURATION OF DISTRICT.] Notwithstanding the 
207.20  provisions of Minnesota Statutes, section 469.176, subdivision 
207.21  1b, no tax increment shall be paid to the authority after 18 
207.22  years from the date of receipt by the authority of the first 
207.23  increment generated from the final phase of redevelopment.  In 
207.24  no case may increments be paid to the authority after 30 years 
207.25  from approval of the tax increment plan.  "Final phase of 
207.26  redevelopment" means that phase of redevelopment activity which 
207.27  completes the rehabilitation of the Sears site.  
207.28     Subd. 4.  [REMOVAL OF HAZARDOUS SUBSTANCES.] For purposes 
207.29  of the three-year activity rule under Minnesota Statutes, 
207.30  section 469.176, subdivision 1a, and the four-year action 
207.31  requirement under Minnesota Statutes, section 469.176, 
207.32  subdivision 6, the removal of hazardous substances from the site 
207.33  shall constitute a qualifying activity.  
207.34     Subd. 5.  [FIVE-YEAR RULE.] The five-year period under 
207.35  Minnesota Statutes, section 469.1763, subdivision 3, is extended 
207.36  to ten years.  
208.1      Subd. 6.  [NO POOLING AUTHORITY.] Notwithstanding the 
208.2   provisions of Minnesota Statutes, section 469.1763, increments 
208.3   from the district established under this section may only be 
208.4   expended on improvements and activities within or directly in 
208.5   aid of the district and on administrative expenses. 
208.6      Subd. 7.  [EFFECTIVE DATE.] This section is effective upon 
208.7   compliance with Minnesota Statutes, sections 469.1782, 
208.8   subdivision 2, and 645.021, subdivision 2. 
208.9      Sec. 21.  [CITY OF WEST ST. PAUL; DAKOTA COUNTY HOUSING AND 
208.10  REDEVELOPMENT AUTHORITY; EXCEPTION TO TAX INCREMENT FINANCING 
208.11  REQUIREMENTS.] 
208.12     Subdivision 1.  [GENERALLY.] The city of West St. Paul and 
208.13  the Dakota county housing and redevelopment authority may 
208.14  operate the Signal Hills redevelopment tax increment financing 
208.15  district (Dakota county housing and redevelopment authority tax 
208.16  increment financing district No. 10) under the provisions of 
208.17  this section. 
208.18     Subd. 2.  [TIME LIMIT FOR INITIATING ACTION.] The time 
208.19  limits for initiation of activity in the district and reporting 
208.20  the initiation to the county auditor under Minnesota Statutes, 
208.21  section 469.176, subdivision 6, are extended to five and six 
208.22  years, respectively. 
208.23     Subd. 3.  [FIVE-YEAR RULE.] The district is subject to the 
208.24  requirement of Minnesota Statutes, section 469.1763, subdivision 
208.25  3, except that the five-year period is extended to a seven-year 
208.26  period. 
208.27     Subd. 4.  [THREE-YEAR RULE; EXCEPTION.] The district is 
208.28  subject to the provisions of Minnesota Statutes, section 
208.29  469.176, subdivision 1a, except that any references to three 
208.30  years in that section are five years for purposes of this 
208.31  section. 
208.32     Subd. 5.  [EFFECTIVE DATE.] This section is effective upon 
208.33  approval by the governing bodies of the city of West St. Paul 
208.34  and Dakota county and upon compliance by the city with Minnesota 
208.35  Statutes, section 645.021, subdivision 3. 
208.36     Sec. 22.  [CITY OF RENVILLE; TAX INCREMENT FINANCING 
209.1   DISTRICT.] 
209.2      Subdivision 1.  [CERTIFICATION DATE.] Except as otherwise 
209.3   provided in this section, for purposes of Minnesota Statutes, 
209.4   section 273.1399, and chapter 469, the certification date of the 
209.5   addition of the following described property to tax increment 
209.6   financing district No. 1 in the city of Renville is deemed to be 
209.7   November 1, 1994:  Lots 5, 6, 7, 8, and 9, Block 32, O'Connor's 
209.8   Addition. 
209.9      Subd. 2.  [ORIGINAL NET TAX CAPACITY; ORIGINAL LOCAL TAX 
209.10  RATE.] The original net tax capacity of property in subdivision 
209.11  1 is $432. 
209.12     Subd. 3.  [EXPENDITURE OF INCREMENT.] Notwithstanding the 
209.13  provisions of Minnesota Statutes, section 469.176, subdivision 
209.14  1b, the city of Renville may collect and expend tax increment 
209.15  generated by the lots cited in subdivision 1, in tax increment 
209.16  financing district No. 1 in the city of Renville, until December 
209.17  31, 2003. 
209.18     Subd. 4.  [LOCAL APPROVAL.] This section is effective upon 
209.19  compliance with Minnesota Statutes, sections 469.1782, 
209.20  subdivision 2, and 645.021, subdivision 3. 
209.21     Sec. 23.  [CITY OF FOLEY; TAX INCREMENT FINANCING.] 
209.22     Subdivision 1.  [EXPENDITURE AUTHORITY.] Notwithstanding 
209.23  any law to the contrary, expenditures by the city of Foley 
209.24  before January 1, 1998, of revenue derived from tax increment 
209.25  financing district number 1 to finance a wastewater treatment 
209.26  facility located outside of the district are authorized 
209.27  expenditures of that revenue.  
209.28     Subd. 2.  [CONDITIONS.] The authority to spend increment 
209.29  under subdivision 1 on the wastewater treatment facility is 
209.30  subject to the following conditions: 
209.31     (1) The city must decertify tax increment financing 
209.32  district number 1 by no later than December 31, 1998; and 
209.33     (2) Any unspent increments and any increments collected 
209.34  after December 31, 1997, must be distributed under Minnesota 
209.35  Statutes, section 469.176, subdivision 2, clause (4). 
209.36     Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
210.1   local approval by the governing body of the city of Foley. 
210.2      Sec. 24.  [COON RAPIDS; TIF.] 
210.3      Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
210.4   provisions of Minnesota Statutes, section 469.176, subdivision 
210.5   1b, upon approval of the governing body of the city of Coon 
210.6   Rapids by resolution, the duration of the tax increment 
210.7   financing districts of the Coon Rapids economic development 
210.8   authority designated 2-2 and 2-3 may be extended to December 31, 
210.9   2010. 
210.10     Subd. 2.  [SPECIAL RULES.] (a) The tax increment financing 
210.11  districts of the Coon Rapids economic development authority 
210.12  designated 2-2 and 2-3 are subject to Minnesota Statutes, 
210.13  sections 469.174 to 469.178, except as provided in this 
210.14  subdivision. 
210.15     (b) Tax increment revenues derived from the districts may 
210.16  only be applied to the payment of project costs described in the 
210.17  tax increment plans for the tax increment financing districts on 
210.18  the date of final enactment of this section and to the payment 
210.19  of the costs incurred with respect to the reconstruction and 
210.20  upgrading of the existing state and county bridges and roadways 
210.21  within the project area of the districts. 
210.22     (c) Notwithstanding Minnesota Statutes, section 469.176, 
210.23  subdivision 1, tax increment revenue generated from each 
210.24  district may be paid to the authority until the earlier of (1) 
210.25  December 31, 2010, or (2) the date upon which all bonded 
210.26  indebtedness or contractual obligations of the authority 
210.27  relating to the districts have terminated. 
210.28     Subd. 3.  [STATE AID OFFSET; EXEMPTION.] If Coon Rapids, 
210.29  under Minnesota Statutes, section 469.1782, subdivision 1, 
210.30  elects that the districts are subject to Minnesota Statutes, 
210.31  section 273.1399, subdivision 8, the last sentence of Minnesota 
210.32  Statutes, section 273.1399, subdivision 8, does not apply, and 
210.33  Coon Rapids may elect to apply the exemption provided by 
210.34  Minnesota Statutes, section 273.1399, subdivision 6, paragraph 
210.35  (d). 
210.36     Subd. 4.  [EFFECTIVE DATE.] This section is effective upon 
211.1   compliance by the governing bodies of the city of Coon Rapids, 
211.2   the county of Anoka, and independent school district No. 11, 
211.3   Anoka-Hennepin, with Minnesota Statutes, sections 469.1782, 
211.4   subdivision 2, and 645.021, subdivision 2. 
211.5      Sec. 25.  [CITY OF GARRISON; TIF.] 
211.6      Subdivision 1.  [SPECIAL TAXING AUTHORITY.] (a) After 30 
211.7   days' notice and a public hearing, the governing body of the 
211.8   city of Garrison may establish a special taxing district 
211.9   consisting of all or a part of the geographic area of tax 
211.10  increment financing district number 1.  The city may enlarge or 
211.11  reduce the geographic area in which the tax applies. 
211.12     (b) The city may impose an ad valorem tax on the net tax 
211.13  capacity of the special taxing district.  The tax must be 
211.14  computed without regard to captured net tax capacity.  The tax 
211.15  imposed is in addition to the tax imposed by the city, county, 
211.16  school district, and any other special taxing district. 
211.17     (c) The tax that may be levied on the special taxing 
211.18  district may not exceed the sum of (1) the city tax rate 
211.19  multiplied by the captured net tax capacity of tax increment 
211.20  financing district number, plus (2) the amount of the reduction 
211.21  in state aid under Minnesota Statutes, section 273.1399, as a 
211.22  result of tax increment financing district number 1. 
211.23     (d) A tax imposed under this subdivision is payable and 
211.24  must be collected at the same time and in the same manner as 
211.25  provided for payment and collection of ad valorem taxes.  Taxes 
211.26  not paid on or before the applicable due date are subject to the 
211.27  same penalty and interest as ad valorem taxes not paid by the 
211.28  respective due date.  The due date for the tax is the due date 
211.29  for the real property tax for the property on which the tax 
211.30  under this subdivision is imposed. 
211.31     (e) Notwithstanding any law to the contrary, the proceeds 
211.32  of the tax under this section are not developer payments and may 
211.33  be used to offset the reduction in state aid under Minnesota 
211.34  Statutes, section 273.1399. 
211.35     (f) The authority to impose a tax under this subdivision 
211.36  expires upon decertification of tax increment financing district 
212.1   number 1. 
212.2      Subd. 2.  [AUTHORITY TO DECERTIFY.] (a) Notwithstanding any 
212.3   law to the contrary, the governing body of the city of Garrison 
212.4   may decertify tax increment financing district number 1, if the 
212.5   city finds that: 
212.6      (1) one or more public officials who took official action 
212.7   on or advised the city on the creation of the district had a 
212.8   financial interest in or benefited from the acquisition of or 
212.9   development of property by the district and failed to disclose 
212.10  that interest; or 
212.11     (2) the city failed to comply with the requirements of 
212.12  Minnesota Statutes, section 469.175, subdivision 2, or any other 
212.13  legal requirement that is a condition that must be satisfied 
212.14  before the tax increment financing plan is approved and 
212.15  certification of the district requested. 
212.16     (b) If the city decertifies the district under this 
212.17  subdivision, the district is void and the city may not be held 
212.18  liable to pay any obligations of the district or damages for 
212.19  breach or violation of the contract. 
212.20     (c) For purposes of this subdivision, "public official" 
212.21  means an elected official or a licensed attorney retained to 
212.22  provide legal counsel to the city. 
212.23     Sec. 26.  [NEW BRIGHTON; TIF.] 
212.24     Subdivision 1.  [FIVE-YEAR RULE.] If the city of New 
212.25  Brighton or a development authority of the city establishes a 
212.26  redevelopment district in the area bounded on the north by the 
212.27  south boundary line of tax increment district number 8 extended 
212.28  to Long Lake regional park, on the east by interstate highway 
212.29  35W, on the south by interstate highway 694, and on the west by 
212.30  Long Lake regional park, the city may elect to extend the 
212.31  five-year rule under Minnesota Statutes, section 469.1763, 
212.32  subdivision 3, to seven years for the district.  The election 
212.33  must be made at the time the governing body of the city approves 
212.34  the tax increment financing plan.  This authority applies to 
212.35  only one district. 
212.36     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
213.1   compliance by the governing body of the city of New Brighton 
213.2   with Minnesota Statutes, section 645.021. 
213.3      Sec. 27.  [EFFECTIVE DATE.] 
213.4      Sections 1, 2, and 10 are effective for requests for 
213.5   certification of tax increment financing districts made after 
213.6   June 30, 1998. 
213.7      Sections 3 and 4 are effective the day following final 
213.8   enactment. 
213.9      Sections 5, 9, and 11 apply to tax increment financing 
213.10  districts certified before, on, or after August 1, 1979. 
213.11     Sections 6, 7, 8, and 12 are effective for disclosures 
213.12  required to be made and reports required to be submitted on or 
213.13  before a date beginning August 1, 1999.  
213.14                             ARTICLE 11
213.15                            GAMING TAXES
213.16     Section 1.  Minnesota Statutes 1996, section 240.15, 
213.17  subdivision 1, is amended to read: 
213.18     Subdivision 1.  [TAXES IMPOSED.] (a) From July 1, 1996, 
213.19  until July 1, 1999, There is imposed a tax at the rate of six 
213.20  percent of the amount in excess of $12,000,000 annually withheld 
213.21  from all pari-mutuel pools by the licensee, including breakage 
213.22  and amounts withheld under section 240.13, subdivision 4.  After 
213.23  June 30, 1999, the tax is imposed on the total amount withheld 
213.24  from all pari-mutuel pools.  For the purpose of this 
213.25  subdivision, "annually" is the period from July 1 to June 30 of 
213.26  the next year. 
213.27     In addition to the above tax, the licensee must designate 
213.28  and pay to the commission a tax of one percent of the total 
213.29  amount bet on each racing day, for deposit in the Minnesota 
213.30  breeders fund.  
213.31     The taxes imposed by this clause must be paid from the 
213.32  amounts permitted to be withheld by a licensee under section 
213.33  240.13, subdivision 4.  
213.34     (b) The commission may impose an admissions tax of not more 
213.35  than ten cents on each paid admission at a licensed racetrack on 
213.36  a racing day if:  
214.1      (1) the tax is requested by a local unit of government 
214.2   within whose borders the track is located; 
214.3      (2) a public hearing is held on the request; and 
214.4      (3) the commission finds that the local unit of government 
214.5   requesting the tax is in need of its revenue to meet 
214.6   extraordinary expenses caused by the racetrack. 
214.7      Sec. 2.  Minnesota Statutes 1996, section 297E.02, 
214.8   subdivision 1, is amended to read: 
214.9      Subdivision 1.  [IMPOSITION.] A tax is imposed on all 
214.10  lawful gambling other than (1) pull-tabs purchased and placed 
214.11  into inventory after January 1, 1987, and (2) tipboards 
214.12  purchased and placed into inventory after June 30, 1988, at the 
214.13  rate of ten 9.5 percent on the gross receipts as defined in 
214.14  section 297E.01, subdivision 8, less prizes actually paid.  The 
214.15  tax imposed by this subdivision is in lieu of the tax imposed by 
214.16  section 297A.02 and all local taxes and license fees except a 
214.17  fee authorized under section 349.16, subdivision 8, or a tax 
214.18  authorized under subdivision 5.  
214.19     The tax imposed under this subdivision is payable by the 
214.20  organization or party conducting, directly or indirectly, the 
214.21  gambling.  
214.22     Sec. 3.  Minnesota Statutes 1996, section 297E.02, 
214.23  subdivision 4, is amended to read: 
214.24     Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 
214.25  on the sale of each deal of pull-tabs and tipboards sold by a 
214.26  distributor.  The rate of the tax is two 1.9 percent of the 
214.27  ideal gross of the pull-tab or tipboard deal.  The sales tax 
214.28  imposed by chapter 297A on the sale of the pull-tabs and 
214.29  tipboards by the distributor is imposed on the retail sales 
214.30  price less the tax imposed by this subdivision.  The retail sale 
214.31  of pull-tabs or tipboards by the organization is exempt from 
214.32  taxes imposed by chapter 297A and is exempt from all local taxes 
214.33  and license fees except a fee authorized under section 349.16, 
214.34  subdivision 8.  
214.35     (b) The liability for the tax imposed by this section is 
214.36  incurred when the pull-tabs and tipboards are delivered by the 
215.1   distributor to the customer or to a common or contract carrier 
215.2   for delivery to the customer, or when received by the customer's 
215.3   authorized representative at the distributor's place of 
215.4   business, regardless of the distributor's method of accounting 
215.5   or the terms of the sale.  
215.6      The tax imposed by this subdivision is imposed on all sales 
215.7   of pull-tabs and tipboards, except the following:  
215.8      (1) sales to the governing body of an Indian tribal 
215.9   organization for use on an Indian reservation; 
215.10     (2) sales to distributors licensed under the laws of 
215.11  another state or of a province of Canada, as long as all 
215.12  statutory and regulatory requirements are met in the other state 
215.13  or province; 
215.14     (3) sales of promotional tickets as defined in section 
215.15  349.12; and 
215.16     (4) pull-tabs and tipboards sold to an organization that 
215.17  sells pull-tabs and tipboards under the exemption from licensing 
215.18  in section 349.166, subdivision 2.  A distributor shall require 
215.19  an organization conducting exempt gambling to show proof of its 
215.20  exempt status before making a tax-exempt sale of pull-tabs or 
215.21  tipboards to the organization.  A distributor shall identify, on 
215.22  all reports submitted to the commissioner, all sales of 
215.23  pull-tabs and tipboards that are exempt from tax under this 
215.24  subdivision.  
215.25     (c) A distributor having a liability of $120,000 or more 
215.26  during a fiscal year ending June 30 must remit all liabilities 
215.27  in the subsequent calendar year by a funds transfer as defined 
215.28  in section 336.4A-104, paragraph (a).  The funds transfer 
215.29  payment date, as defined in section 336.4A-401, must be on or 
215.30  before the date the tax is due.  If the date the tax is due is 
215.31  not a funds transfer business day, as defined in section 
215.32  336.4A-105, paragraph (a), clause (4), the payment date must be 
215.33  on or before the funds transfer business day next following the 
215.34  date the tax is due. 
215.35     (d) Any customer who purchases deals of pull-tabs or 
215.36  tipboards from a distributor may file an annual claim for a 
216.1   refund or credit of taxes paid pursuant to this subdivision for 
216.2   unsold pull-tab and tipboard tickets.  The claim must be filed 
216.3   with the commissioner on a form prescribed by the commissioner 
216.4   by March 20 of the year following the calendar year for which 
216.5   the refund is claimed.  The refund must be filed as part of the 
216.6   customer's February monthly return.  The refund or credit is 
216.7   equal to two 1.9 percent of the face value of the unsold 
216.8   pull-tab or tipboard tickets, provided that the refund or credit 
216.9   will be 1.95 percent of the face value of the unsold pull-tab or 
216.10  tipboard tickets for claims for a refund or credit of taxes 
216.11  filed on the February 1999 monthly return.  The refund claimed 
216.12  will be applied as a credit against tax owing under this chapter 
216.13  on the February monthly return.  If the refund claimed exceeds 
216.14  the tax owing on the February monthly return, that amount will 
216.15  be refunded.  The amount refunded will bear interest pursuant to 
216.16  section 270.76 from 90 days after the claim is filed.  
216.17     Sec. 4.  Minnesota Statutes 1996, section 297E.02, 
216.18  subdivision 6, is amended to read: 
216.19     Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
216.20  imposed under subdivisions 1 and 4, a tax is imposed on the 
216.21  combined receipts of the organization.  As used in this section, 
216.22  "combined receipts" is the sum of the organization's gross 
216.23  receipts from lawful gambling less gross receipts directly 
216.24  derived from the conduct of bingo, raffles, and paddlewheels, as 
216.25  defined in section 297E.01, subdivision 8, for the fiscal year.  
216.26  The combined receipts of an organization are subject to a tax 
216.27  computed according to the following schedule: 
216.28     If the combined receipts for the          The tax is:
216.29     fiscal year are:
216.30     Not over $500,000                   zero
216.31     Over $500,000, but not over
216.32     $700,000                            two 1.9 percent of the 
216.33                                         amount over $500,000, but 
216.34                                         not over $700,000
216.35     Over $700,000, but not over
216.36     $900,000                            $4,000 $3,800 plus four 
217.1                                          3.8 percent of the 
217.2                                          amount over $700,000, but 
217.3                                          not over $900,000
217.4      Over $900,000                       $12,000 $11,400 plus six 
217.5                                          5.7 percent of the 
217.6                                          amount over $900,000
217.7      Sec. 5.  [EFFECTIVE DATE.] 
217.8      Sections 2 to 4 are effective July 1, 1998. 
217.9                              ARTICLE 12
217.10                           MISCELLANEOUS
217.11     Section 1.  Minnesota Statutes 1997 Supplement, section 
217.12  3.986, subdivision 2, is amended to read: 
217.13     Subd. 2.  [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact" 
217.14  means increased or decreased costs or revenues that a political 
217.15  subdivision would incur as a result of a law enacted after June 
217.16  30, 1997, or rule proposed after June 30 December 31, 1998: 
217.17     (1) that mandates a new program, eliminates an existing 
217.18  mandated program, requires an increased level of service of an 
217.19  existing program, or permits a decreased level of service in an 
217.20  existing mandated program; 
217.21     (2) that implements or interprets federal law and, by its 
217.22  implementation or interpretation, increases or decreases program 
217.23  or service levels beyond the level required by the federal law; 
217.24     (3) that implements or interprets a statute or amendment 
217.25  adopted or enacted pursuant to the approval of a statewide 
217.26  ballot measure by the voters and, by its implementation or 
217.27  interpretation, increases or decreases program or service levels 
217.28  beyond the levels required by the ballot measure; 
217.29     (4) that removes an option previously available to 
217.30  political subdivisions, or adds an option previously unavailable 
217.31  to political subdivisions, thus requiring higher program or 
217.32  service levels or permitting lower program or service levels, or 
217.33  prohibits a specific activity and so forces political 
217.34  subdivisions to use a more costly alternative to provide a 
217.35  mandated program or service; 
217.36     (5) that requires that an existing program or service be 
218.1   provided in a shorter time period and thus increases the cost of 
218.2   the program or service, or permits an existing mandated program 
218.3   or service to be provided in a longer time period, thus 
218.4   permitting a decrease in the cost of the program or service; 
218.5      (6) that adds new requirements to an existing optional 
218.6   program or service and thus increases the cost of the program or 
218.7   service because the political subdivisions have no reasonable 
218.8   alternative other than to continue the optional program; 
218.9      (7) that affects local revenue collections by changes in 
218.10  property or sales and use tax exemptions; 
218.11     (8) that requires costs previously incurred at local option 
218.12  that have subsequently been mandated by the state; or 
218.13     (9) that requires payment of a new fee or increases the 
218.14  amount of an existing fee, or permits the elimination or 
218.15  decrease of an existing fee mandated by the state. 
218.16     (b) When state law is intended to achieve compliance with 
218.17  federal law or court orders, state mandates shall be determined 
218.18  as follows: 
218.19     (1) if the federal law or court order is discretionary, the 
218.20  state law is a state mandate; 
218.21     (2) if the state law exceeds what is required by the 
218.22  federal law or court order, only the provisions of the state law 
218.23  that exceed the federal requirements are a state mandate; and 
218.24     (3) if the state law does not exceed what is required by 
218.25  the federal statute or regulation or court order, the state law 
218.26  is not a state mandate. 
218.27     Sec. 2.  Minnesota Statutes 1997 Supplement, section 3.986, 
218.28  subdivision 4, is amended to read: 
218.29     Subd. 4.  [POLITICAL SUBDIVISION.] A "political 
218.30  subdivision" is a county, or home rule charter or statutory city 
218.31  , town, or other taxing district or municipal corporation. 
218.32     Sec. 3.  Minnesota Statutes 1997 Supplement, section 3.987, 
218.33  subdivision 1, is amended to read: 
218.34     Subdivision 1.  [LOCAL IMPACT NOTES.] The commissioner of 
218.35  finance shall coordinate the development of a local impact note 
218.36  for any proposed legislation introduced after June 30, 1997, or 
219.1   any rule proposed after June 30 December 31, 1998, upon request 
219.2   of the chair or the ranking minority member of either 
219.3   legislative tax committee.  Upon receipt of a request to prepare 
219.4   a local impact note, the commissioner must notify the authors of 
219.5   the proposed legislation or, for an administrative rule, the 
219.6   head of the relevant executive agency or department, that the 
219.7   request has been made.  The local impact note must be prepared 
219.8   as provided in section 3.98, subdivision 2, and made available 
219.9   to the public upon request.  If the action is among the 
219.10  exceptions listed in section 3.988, a local impact note need not 
219.11  be requested nor prepared.  The commissioner shall make a 
219.12  reasonable and timely estimate of the local fiscal impact on 
219.13  each type of political subdivision that would result from the 
219.14  proposed legislation.  The commissioner of finance may require 
219.15  any political subdivision or the commissioner of an 
219.16  administrative agency of the state to supply in a timely manner 
219.17  any information determined to be necessary to determine local 
219.18  fiscal impact.  The political subdivision, its representative 
219.19  association, or commissioner shall convey the requested 
219.20  information to the commissioner of finance with a signed 
219.21  statement to the effect that the information is accurate and 
219.22  complete to the best of its ability.  The political subdivision, 
219.23  its representative association, or commissioner, when requested, 
219.24  shall update its determination of local fiscal impact based on 
219.25  actual cost or revenue figures, improved estimates, or 
219.26  both.  Upon completion of the note, the commissioner must 
219.27  provide a copy to the authors of the proposed legislation or, 
219.28  for an administrative rule, to the head of the relevant 
219.29  executive agency or department. 
219.30     Sec. 4.  Minnesota Statutes 1997 Supplement, section 3.987, 
219.31  subdivision 2, is amended to read: 
219.32     Subd. 2.  [MANDATE EXPLANATIONS.] Before a committee 
219.33  hearing on any bill introduced in the legislature after June 30, 
219.34  1997, that seeks to impose program or financial mandates on 
219.35  political subdivisions must include an attachment from the chair 
219.36  or ranking minority member of the committee may request that the 
220.1   author provide the committee with a note that gives appropriate 
220.2   responses to the following guidelines.  It must state and list: 
220.3      (1) the policy goals that are sought to be attained, 
220.4   the and any performance standards that are to be imposed, and an 
220.5   explanation why the goals and standards will best be served by 
220.6   requiring compliance by on political subdivisions; 
220.7      (2) any performance standards that will allow political 
220.8   subdivisions flexibility and innovation of method in achieving 
220.9   those goals; 
220.10     (3) the reasons for each prescribed standard and the 
220.11  process by which each standard governs input such as staffing 
220.12  and other administrative aspects of the program; 
220.13     (4) the sources of additional revenue, in addition to 
220.14  existing funding for similar programs, that are directly linked 
220.15  to imposition of the mandates that will provide adequate and 
220.16  stable funding for their requirements; 
220.17     (5) what input has been obtained to ensure that the 
220.18  implementing agencies have the capacity to carry out the 
220.19  delegated responsibilities; and 
220.20     (6) the reasons why less intrusive measures such as 
220.21  financial incentives or voluntary compliance would not yield the 
220.22  equity, efficiency, or desired level of statewide uniformity in 
220.23  the proposed program; 
220.24     (6) what input has been obtained to ensure that the 
220.25  implementing agencies have the capacity to carry out the 
220.26  delegated responsibilities; and 
220.27     (7) the efforts put forth, if any, to involve political 
220.28  subdivisions in the creation or development of the proposed 
220.29  mandate. 
220.30     Sec. 5.  Minnesota Statutes 1997 Supplement, section 3.988, 
220.31  subdivision 3, is amended to read: 
220.32     Subd. 3.  [MISCELLANEOUS EXCEPTIONS.] A local impact note 
220.33  or an attachment as provided in section 3.987, subdivision 2, 
220.34  need not be prepared for the cost of a mandated action if the 
220.35  law, including a rulemaking, containing the mandate:  
220.36     (1) accommodates a specific local request; 
221.1      (2) results in no new local government duties; 
221.2      (3) leads to revenue losses from exemptions to taxes; 
221.3      (4) provided only clarifying or conforming, nonsubstantive 
221.4   charges on local government; 
221.5      (5) imposes additional net local costs that are minor (less 
221.6   than $200 an amount less than or equal to one-half of one 
221.7   percent of the local revenue base as defined in section 
221.8   477A.011, subdivision 27, or $50,000, whichever is less for any 
221.9   single local government if the mandate does not apply statewide 
221.10  or less than $3,000,000 $1,000,000 if the mandate is statewide) 
221.11  and do not cause a financial burden on local government; 
221.12     (6) is a law or executive order enacted before July 1, 
221.13  1997, or a rule initially implementing a law enacted before July 
221.14  1, 1997; 
221.15     (7) implements something other than a law or executive 
221.16  order, such as a federal, court, or voter-approved mandate; 
221.17     (8) defines a new crime or redefines an existing crime or 
221.18  infraction; 
221.19     (9) results in savings that equal or exceed costs; 
221.20     (10) (9) requires the holding of elections; 
221.21     (11) (10) ensures due process or equal protection; 
221.22     (12) (11) provides for the notification and conduct of 
221.23  public meetings; 
221.24     (13) (12) establishes the procedures for administrative and 
221.25  judicial review of actions taken by political subdivisions; 
221.26     (14) (13) protects the public from malfeasance, 
221.27  misfeasance, or nonfeasance by officials of political 
221.28  subdivisions; 
221.29     (15) (14) relates directly to financial administration, 
221.30  including the levy, assessment, and collection of taxes; 
221.31     (16) (15) relates directly to the preparation and 
221.32  submission of financial audits necessary to the administration 
221.33  of state laws; or 
221.34     (17) (16) requires uniform standards to apply to public and 
221.35  private institutions without differentiation. 
221.36     Sec. 6.  Minnesota Statutes 1997 Supplement, section 3.989, 
222.1   subdivision 1, is amended to read: 
222.2      Subdivision 1.  [DEFINITIONS.] In this section: 
222.3      (1) "Class A state mandates" means those laws under which 
222.4   the state mandates to political subdivisions, their 
222.5   participation, the organizational structure of the program, and 
222.6   the procedural regulations under which the law must be 
222.7   administered; and 
222.8      (2) "Class B state mandates" means those mandates resulting 
222.9   from legislation enacted after July 1, 1998, that specifically 
222.10  reference this section and that allow the political subdivisions 
222.11  to opt for administration of a law with program elements 
222.12  mandated beforehand and with an assured revenue level from the 
222.13  state of at least 90 percent of full program and administrative 
222.14  costs.  
222.15     Sec. 7.  Minnesota Statutes 1997 Supplement, section 3.989, 
222.16  subdivision 2, is amended to read: 
222.17     Subd. 2.  [REPORT.] The commissioner of finance shall 
222.18  prepare by September 1, 1998 2000, and by September 1 of each 
222.19  even-numbered year thereafter, a report by political 
222.20  subdivisions of the costs of class A state local mandates 
222.21  established after June 30, 1997.  
222.22     The commissioner shall annually include the statewide total 
222.23  of the statement of costs of class A local mandates after June 
222.24  30, 1997, as a notation in the state biennial budget for the 
222.25  next fiscal year. 
222.26     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
222.27  270.67, subdivision 2, is amended to read: 
222.28     Subd. 2.  [EXTENSION AGREEMENTS.] When any portion of any 
222.29  tax payable to the commissioner of revenue together with 
222.30  interest and penalty thereon, if any, has not been paid, the 
222.31  commissioner may extend the time for payment for a further 
222.32  period.  When the authority of this section is invoked, the 
222.33  extension shall be evidenced by written agreement signed by the 
222.34  taxpayer and the commissioner, stating the amount of the tax 
222.35  with penalty and interest, if any, and providing for the payment 
222.36  of the amount in installments.  The agreement may contain a 
223.1   confession of judgment for the amount and for any unpaid portion 
223.2   thereof and shall provide that the commissioner may forthwith 
223.3   enter judgment against the taxpayer in the district court of the 
223.4   county of residence as shown upon the taxpayer's tax return for 
223.5   the unpaid portion of the amount specified in the extension 
223.6   agreement.  The agreement shall provide that it can be 
223.7   terminated, after notice by the commissioner, if information 
223.8   provided by the taxpayer prior to the agreement was inaccurate 
223.9   or incomplete, collection of the tax covered by the agreement is 
223.10  in jeopardy, there is a subsequent change in the taxpayer's 
223.11  financial condition, the taxpayer has failed to make a payment 
223.12  due under the agreement, or has failed to pay any other tax or 
223.13  file a tax return coming due after the agreement.  The notice 
223.14  must be given at least 14 calendar days prior to termination, 
223.15  and shall advise the taxpayer of the right to request a 
223.16  reconsideration from the commissioner of whether termination is 
223.17  reasonable and appropriate under the circumstances.  A request 
223.18  for reconsideration does not stay collection action beyond the 
223.19  14-day notice period.  If the commissioner has reason to believe 
223.20  that collection of the tax covered by the agreement is in 
223.21  jeopardy, the commissioner may proceed under sections 270.70, 
223.22  subdivision 2, paragraph (b), and 270.274, and terminate the 
223.23  agreement without regard to the 14-day period.  The commissioner 
223.24  may accept other collateral the commissioner considers 
223.25  appropriate to secure satisfaction of the tax liability.  The 
223.26  principal sum specified in the agreement shall bear interest at 
223.27  the rate specified in section 270.75 on all unpaid portions 
223.28  thereof until the same has been fully paid or the unpaid portion 
223.29  thereof has been entered as a judgment.  The judgment shall bear 
223.30  interest at the rate specified in section 270.75.  If it appears 
223.31  to the commissioner that the tax reported by the taxpayer is in 
223.32  excess of the amount actually owing by the taxpayer, the 
223.33  extension agreement or the judgment entered pursuant thereto 
223.34  shall be corrected.  If after making the extension agreement or 
223.35  entering judgment with respect thereto, the commissioner 
223.36  determines that the tax as reported by the taxpayer is less than 
224.1   the amount actually due, the commissioner shall assess a further 
224.2   tax in accordance with the provisions of law applicable to the 
224.3   tax.  The authority granted to the commissioner by this section 
224.4   is in addition to any other authority granted to the 
224.5   commissioner by law to extend the time of payment or the time 
224.6   for filing a return and shall not be construed in limitation 
224.7   thereof. 
224.8      Sec. 9.  Minnesota Statutes 1997 Supplement, section 
224.9   297H.04, is amended by adding a subdivision to read: 
224.10     Subd. 3.  [INCINERATION WITH MIXED WASTE; RATE.] Nonmixed 
224.11  municipal solid waste that is separately collected and 
224.12  processed, but must be incinerated with mixed municipal solid 
224.13  waste in accordance with an industrial solid waste management 
224.14  plan approved by the pollution control agency, shall be taxed at 
224.15  the rate for nonmixed municipal solid waste. 
224.16     Sec. 10.  Minnesota Statutes 1996, section 360.653, is 
224.17  amended to read: 
224.18     360.653 [AIRCRAFT, EXEMPTIONS.] 
224.19     The following aircraft, under the conditions specified, 
224.20  shall be exempt from the registration and the tax provided by 
224.21  sections 360.511 to 360.67. 
224.22     (1) Any aircraft held by a dealer listed and used as 
224.23  provided in section 360.63, except that aircraft held by dealers 
224.24  on October 1, of each year, shall be registered and the entire 
224.25  tax provided by sections 360.511 to 360.67 shall be paid for the 
224.26  portion of the fiscal year, prorated on a monthly basis 
224.27  remaining after the aircraft came into the possession of the 
224.28  dealer.  It is further provided that a dealer who has previously 
224.29  had aircraft on withholding may register such aircraft in 
224.30  September of each fiscal year by payment of an amount equal to 
224.31  one-third of the annual tax, which tax shall be applicable for 
224.32  the months of September through December and in January the 
224.33  dealer may again list these aircraft on the dealer's withholding 
224.34  form.  
224.35     (2) Aircraft remaining in the possession of aircraft 
224.36  manufacturers ten months after completion shall become subject 
225.1   to the tax provided by sections 360.511 to 360.67.  The tax 
225.2   shall be computed from the expiration of the ten months period 
225.3   and shall be prorated on a monthly basis.  
225.4      (3) Aircraft while in the hands of aircraft refitters for 
225.5   the purpose of being refitted or modified or both, and while 
225.6   being refitted or modified or both.  
225.7      (4) Aircraft licensed under section 144E.12 and used 
225.8   exclusively to provide air ambulance service are exempt from the 
225.9   tax only. 
225.10     Sec. 11.  Minnesota Statutes 1996, section 469.169, is 
225.11  amended by adding a subdivision to read: 
225.12     Subd. 12.  [ADDITIONAL ENTERPRISE ZONE ALLOCATIONS.] In 
225.13  addition to tax reductions authorized in subdivisions 7, 8, 9, 
225.14  10, and 11, the commissioner may allocate $500,000 for tax 
225.15  reductions pursuant to enterprise zone designations, as 
225.16  designated in Laws 1997, chapter 231, article 16, section 26.  
225.17  Allocations made under this subdivision may be used for tax 
225.18  reductions as provided in section 469.171, or other offsets of 
225.19  taxes imposed on or remitted by businesses located in the 
225.20  enterprise zone, but only if the municipality determines that 
225.21  the granting of the tax reduction or offset is necessary in 
225.22  order to retain a business within or attract a business to the 
225.23  enterprise zone.  Limitations on allocations under subdivision 7 
225.24  do not apply to this allocation. 
225.25     Sec. 12.  Minnesota Statutes 1996, section 473.3915, 
225.26  subdivision 2, is amended to read: 
225.27     Subd. 2.  [REGULAR ROUTE TRANSIT SERVICE.] "Regular route 
225.28  transit service" means services as defined in section 473.385, 
225.29  subdivision 1, paragraph (b), with at least two scheduled runs 
225.30  per hour between 7:00 a.m. and 6:30 p.m., Monday to Friday, and 
225.31  regularly scheduled service on Saturday, Sunday, and holidays, 
225.32  and weekdays after 6:30 p.m.  The two scheduled runs for buses 
225.33  leaving a replacement transit service transit hub need not be on 
225.34  the same route.  
225.35     Sec. 13.  Minnesota Statutes 1996, section 473.3915, 
225.36  subdivision 3, is amended to read: 
226.1      Subd. 3.  [TRANSIT ZONE.] "Transit zone" means:  (1) the 
226.2   area within one-quarter of a mile of a route along which regular 
226.3   route transit service is provided that is also within the 
226.4   metropolitan urban service area, as determined by the council; 
226.5   or (2) the area within one-eighth of a mile around a replacement 
226.6   transit service transit hub.  "Transit zone" includes any light 
226.7   rail transit route for which funds for construction have been 
226.8   committed. 
226.9      Sec. 14.  Laws 1997, chapter 231, article 13, section 19, 
226.10  is amended to read: 
226.11     Sec. 19.  [MORATORIUM.] 
226.12     The commissioner of revenue shall not initiate or continue 
226.13  any action to collect any underpayment from political 
226.14  subdivisions, or to reimburse any overpayment to any political 
226.15  subdivisions, of use taxes on solid waste management services 
226.16  under Minnesota Statutes, section 297A.45, or of sales taxes on 
226.17  any amount included on a property tax statement for county solid 
226.18  waste management services, and any other amount collected by a 
226.19  county under Minnesota Statutes, section 400.08 or 473.811, 
226.20  subdivision 3a.  The moratorium is effective for the period from 
226.21  January 1, 1990, through December 31, 1996 1997. 
226.22     Sec. 15.  [SPECIAL PREMIUM TAX PAYMENT.] 
226.23     Health maintenance organizations, community integrated 
226.24  service networks, and nonprofit health service plan corporations 
226.25  that have met the cost containment goals established in 
226.26  Minnesota Statutes, section 62J.04, in the individual and small 
226.27  employer market for calendar year 1996 shall pay a special, 
226.28  one-time 1999 premium tax payment.  The tax payment must be 
226.29  based on an amount equal to one percent of gross premiums less 
226.30  return premiums on all direct business received by the insurer 
226.31  in this state, or by its agents for it, in cash or otherwise 
226.32  after March 30, 1997, and before January 1, 1998.  Payment of 
226.33  the tax under this section is due January 2, 1999.  Provisions 
226.34  relating to the payment, assessment, and collection of the tax 
226.35  assessed under Minnesota Statutes, section 60A.15, shall apply 
226.36  to the special tax payment assessed under this section. 
227.1      Sec. 16.  [PRIVATE SALE OF SURPLUS LAND; RED LAKE COUNTY.] 
227.2      (a) Notwithstanding Minnesota Statutes, sections 92.45, 
227.3   94.09, and 94.10, the commissioner of natural resources may sell 
227.4   by private sale to the adjacent land owner, for a consideration 
227.5   equal to the appraised value, the surplus land bordering public 
227.6   water that is described in paragraph (c), under the remaining 
227.7   provisions of Minnesota Statutes, chapter 94. 
227.8      (b) The conveyance shall be in a form approved by the 
227.9   attorney general. 
227.10     (c) The land that may be sold is located in Red Lake 
227.11  county, consists of about 50 acres, and is described as follows: 
227.12     (1) Government lot 5, section 25, Township 152 North, Range 
227.13  40 West; 
227.14     (2) Government lot 7, section 25, Township 152 North, Range 
227.15  40 West. 
227.16     (d) The commissioner has determined that the land is no 
227.17  longer needed for any natural resource purpose and that the 
227.18  state's land management interests would best be served if the 
227.19  land was returned to private ownership. 
227.20     Sec. 17.  [TAX STUDY COMMISSION; STATE AND LOCAL FISCAL 
227.21  RELATIONS.] 
227.22     Subdivision 1.  [CREATION; MEMBERSHIP.] (a) A tax study 
227.23  commission is established to study state and local fiscal 
227.24  relations in Minnesota and to make recommendations to the 1999 
227.25  legislature.  The study shall be completed and findings reported 
227.26  to the legislature by February 1, 1999. 
227.27     (b) The commission consists of 30 members who serve at the 
227.28  pleasure of the appointing authority as follows: 
227.29     (1) ten legislators; five members of the senate, one of 
227.30  which must be the chair of the senate tax committee, and two 
227.31  members must be from the minority party, appointed by the 
227.32  subcommittee on committees of the committee on rules and 
227.33  administration; and five members of the house of 
227.34  representatives, one of which must be the chair of the house tax 
227.35  committee, and two members must be from the minority party, 
227.36  appointed by the speaker.  The chairs of the house and senate 
228.1   tax committees shall serve as co-chairs of the commission, and 
228.2   the chair of the house tax committee shall chair the first 
228.3   meeting; 
228.4      (2) two representatives of the executive branch of state 
228.5   government, appointed by the governor; 
228.6      (3) three county officials, appointed by the governor from 
228.7   a slate of at least six county officials submitted by the 
228.8   association of Minnesota counties; 
228.9      (4) three city officials, appointed by the governor from a 
228.10  slate of at least six city officials submitted by the league of 
228.11  Minnesota cities; 
228.12     (5) three school district officials, appointed by the 
228.13  governor from a slate of at least six school district officials 
228.14  submitted by the Minnesota school board association; 
228.15     (6) one town official, appointed by the governor from a 
228.16  slate of at least two submitted by the Minnesota association of 
228.17  township officers; and 
228.18     (7) eight members of the public who are not holding public 
228.19  office, four of whom shall be appointed by the senate committee 
228.20  on rules and administration and four of whom shall be appointed 
228.21  by the speaker of the house of representatives.  These 
228.22  appointments must be made from a slate of at least 16 names 
228.23  submitted by the governor. 
228.24     (c) Compensation to the nonlegislative members is allowed 
228.25  as provided under Minnesota Statutes, section 15.075. 
228.26     (d) The appointments under this subdivision must be made no 
228.27  later than June 15, 1998. 
228.28     Subd. 2.  [SCOPE OF STUDY.] The tax study commission is to 
228.29  study the state and local finance system, including, but not 
228.30  limited to, the following subjects: 
228.31     (1) the allocation of functions between state and local 
228.32  governments; 
228.33     (2) the relationship between spending decisions and taxing 
228.34  authority; 
228.35     (3) the efficiency and equity of the system, and how it 
228.36  addresses tax disparities between property classes, and how it 
229.1   recognizes ability to pay; 
229.2      (4) the responsiveness of the system to the costs imposed 
229.3   on local governments by state mandates; 
229.4      (5) the relationship between state and local taxes; and 
229.5      (6) the adequacy of the tax system in addressing emerging 
229.6   technologies, such as telecommunications. 
229.7      Subd. 3.  [RECOMMENDATIONS.] The tax study commission shall 
229.8   make recommendations regarding the state and local finance 
229.9   system, recommending ways to make the system: 
229.10     (1) simpler and more understandable to the average citizen; 
229.11     (2) more accountable, including the relationship between 
229.12  spending decisions and taxing authority; 
229.13     (3) more reliable, predictable, and stable over time; and 
229.14     (4) more immune from the effects of the business cycle and 
229.15  other risks. 
229.16     Subd. 4.  [STAFF.] The department of revenue and 
229.17  legislative staff shall provide administrative and staff 
229.18  assistance when requested by the commission. 
229.19     Subd. 5.  [COOPERATION BY OTHER AGENCIES.] The state 
229.20  auditor and any other state department or agency shall, upon 
229.21  request by the commission, provide data or other information 
229.22  that is collected or possessed by their agencies and that is 
229.23  necessary or useful in conducting the study and preparing the 
229.24  report required by this section. 
229.25     Subd. 6.  [APPROPRIATION.] $122,500 is appropriated from 
229.26  the general fund for fiscal year 1999 to the legislative 
229.27  coordinating commission to pay the expenses of the commission. 
229.28  This appropriation may be used to contract with the state and 
229.29  local policy program of the Humphrey Institute of Public Affairs 
229.30  or to hire a consultant or consultants to prepare all or part of 
229.31  the study.  
229.32     Sec. 18.  [APPROPRIATIONS.] 
229.33     Subdivision 1.  [BAT STUDY.] $122,500 is appropriated from 
229.34  the general fund for fiscal year 1999 to the legislative 
229.35  coordinating commission to study alternative methods of taxing 
229.36  business.  The appropriations under this section and under Laws 
230.1   1997, chapter 231, article 5, section 18, subdivision 3, are 
230.2   available in fiscal years 2000 and 2001.  
230.3      Subd. 2.  [COST OF ADMINISTERING BILL.] $226,000 is 
230.4   appropriated from the general fund for fiscal year 1999 to the 
230.5   commissioner of revenue for the cost of administering this act, 
230.6   excluding article 1. 
230.7      Sec. 19.  [APPLICATION.] 
230.8      Sections 12 and 13 apply in the counties of Anoka, Carver, 
230.9   Dakota, Hennepin, Ramsey, Scott, and Washington.  
230.10     Sec. 20.  [REPEALER.] 
230.11     Minnesota Statutes 1997 Supplement, sections 3.987, 
230.12  subdivision 3, and 14.431, are repealed. 
230.13     Sec. 21.  [EFFECTIVE DATE.] 
230.14     Sections 8, 11, and 16 to 18 are effective the day 
230.15  following final enactment.  Section 9 is effective retroactively 
230.16  to January 1, 1998.  Sections 12 and 13 are effective for taxes 
230.17  payable in 1999 and thereafter.