HF 4105

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; reducing individual income tax 
  1.3             rates; providing an exclusion for long-term capital 
  1.4             gains; expanding income tax brackets for married 
  1.5             taxpayers filing jointly; repealing the marriage 
  1.6             penalty credit; reducing property tax class rates on 
  1.7             commercial-industrial property and on certain 
  1.8             apartments; increasing the educational homestead 
  1.9             credit; creating a MinnesotaCare subsidized health 
  1.10            insurance account; repealing the premium tax and the 
  1.11            MinnesotaCare provider tax; amending Minnesota 
  1.12            Statutes 1998, sections 60A.15, subdivision 1; 
  1.13            62J.041, subdivision 1; 62Q.095, subdivision 6; 
  1.14            144.1494, subdivision 1; 144.1495, subdivision 2; 
  1.15            144.1496, subdivision 1; 214.16, subdivisions 2 and 3; 
  1.16            256L.02, subdivisions 3 and 4; and 270B.01, 
  1.17            subdivision 8; Minnesota Statutes 1999 Supplement, 
  1.18            sections 270B.14, subdivision 1; 273.13, subdivisions 
  1.19            24 and 25; 273.1382, subdivision 1a; 290.01, 
  1.20            subdivision 19b; 290.06, subdivisions 2c and 2d; 
  1.21            290.091, subdivisions 1, 2, and 6; proposing coding 
  1.22            for new law in Minnesota Statutes, chapter 16A; 
  1.23            repealing Minnesota Statutes 1998, sections 16A.724; 
  1.24            16A.76; 62T.10; 144.1484, subdivision 2; 295.50, 
  1.25            subdivisions 1, 2, 2a, 3, 6, 6a, 7, 9b, 9c, 10a, 10b, 
  1.26            12b, 13, 14, and 15; 295.51; 295.52, subdivisions 1, 
  1.27            1a, 2, 3, 4, 4a, and 6; 295.53, subdivisions 2, 3, and 
  1.28            4; 295.54; 295.55, subdivisions 1, 4, 5, 6, and 7; 
  1.29            295.56; 295.57, subdivisions 1, 2, and 3; 295.58; 
  1.30            295.581; 295.582; and 295.59; Minnesota Statutes 1999 
  1.31            Supplement, sections 13.99, subdivision 86b; 290.0675; 
  1.32            295.50, subdivision 4; 295.52, subdivisions 5 and 7; 
  1.33            295.53, subdivision 1; 295.55, subdivisions 2 and 3; 
  1.34            and 295.57, subdivision 4. 
  1.35  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.36                             ARTICLE 1
  1.37                      INDIVIDUAL INCOME TAXES 
  1.38     Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.39  290.01, subdivision 19b, is amended to read: 
  1.40     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  2.1   individuals, estates, and trusts, there shall be subtracted from 
  2.2   federal taxable income: 
  2.3      (1) interest income on obligations of any authority, 
  2.4   commission, or instrumentality of the United States to the 
  2.5   extent includable in taxable income for federal income tax 
  2.6   purposes but exempt from state income tax under the laws of the 
  2.7   United States; 
  2.8      (2) if included in federal taxable income, the amount of 
  2.9   any overpayment of income tax to Minnesota or to any other 
  2.10  state, for any previous taxable year, whether the amount is 
  2.11  received as a refund or as a credit to another taxable year's 
  2.12  income tax liability; 
  2.13     (3) the amount paid to others, less the credit allowed 
  2.14  under section 290.0674, not to exceed $1,625 for each qualifying 
  2.15  child in grades kindergarten to 6 and $2,500 for each qualifying 
  2.16  child in grades 7 to 12, for tuition, textbooks, and 
  2.17  transportation of each qualifying child in attending an 
  2.18  elementary or secondary school situated in Minnesota, North 
  2.19  Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of 
  2.20  this state may legally fulfill the state's compulsory attendance 
  2.21  laws, which is not operated for profit, and which adheres to the 
  2.22  provisions of the Civil Rights Act of 1964 and chapter 363.  For 
  2.23  the purposes of this clause, "tuition" includes fees or tuition 
  2.24  as defined in section 290.0674, subdivision 1, clause (1).  As 
  2.25  used in this clause, "textbooks" includes books and other 
  2.26  instructional materials and equipment used in elementary and 
  2.27  secondary schools in teaching only those subjects legally and 
  2.28  commonly taught in public elementary and secondary schools in 
  2.29  this state.  Equipment expenses qualifying for deduction 
  2.30  includes expenses as defined and limited in section 290.0674, 
  2.31  subdivision 1, clause (3).  "Textbooks" does not include 
  2.32  instructional books and materials used in the teaching of 
  2.33  religious tenets, doctrines, or worship, the purpose of which is 
  2.34  to instill such tenets, doctrines, or worship, nor does it 
  2.35  include books or materials for, or transportation to, 
  2.36  extracurricular activities including sporting events, musical or 
  3.1   dramatic events, speech activities, driver's education, or 
  3.2   similar programs.  For purposes of the subtraction provided by 
  3.3   this clause, "qualifying child" has the meaning given in section 
  3.4   32(c)(3) of the Internal Revenue Code; 
  3.5      (4) contributions made in taxable years beginning after 
  3.6   December 31, 1981, and before January 1, 1985, to a qualified 
  3.7   governmental pension plan, an individual retirement account, 
  3.8   simplified employee pension, or qualified plan covering a 
  3.9   self-employed person that were included in Minnesota gross 
  3.10  income in the taxable year for which the contributions were made 
  3.11  but were deducted or were not included in the computation of 
  3.12  federal adjusted gross income, less any amount allowed to be 
  3.13  subtracted as a distribution under this subdivision or a 
  3.14  predecessor provision in taxable years that began before January 
  3.15  1, 2000.  This subtraction applies only for taxable years 
  3.16  beginning after December 31, 1999, and before January 1, 2001; 
  3.17     (5) income as provided under section 290.0802; 
  3.18     (6) the amount of unrecovered accelerated cost recovery 
  3.19  system deductions allowed under subdivision 19g; 
  3.20     (7) to the extent included in federal adjusted gross 
  3.21  income, income realized on disposition of property exempt from 
  3.22  tax under section 290.491; 
  3.23     (8) to the extent not deducted in determining federal 
  3.24  taxable income, the amount paid for health insurance of 
  3.25  self-employed individuals as determined under section 162(l) of 
  3.26  the Internal Revenue Code, except that the percent limit does 
  3.27  not apply.  If the taxpayer deducted insurance payments under 
  3.28  section 213 of the Internal Revenue Code of 1986, the 
  3.29  subtraction under this clause must be reduced by the lesser of: 
  3.30     (i) the total itemized deductions allowed under section 
  3.31  63(d) of the Internal Revenue Code, less state, local, and 
  3.32  foreign income taxes deductible under section 164 of the 
  3.33  Internal Revenue Code and the standard deduction under section 
  3.34  63(c) of the Internal Revenue Code; or 
  3.35     (ii) the lesser of (A) the amount of insurance qualifying 
  3.36  as "medical care" under section 213(d) of the Internal Revenue 
  4.1   Code to the extent not deducted under section 162(1) of the 
  4.2   Internal Revenue Code or excluded from income or (B) the total 
  4.3   amount deductible for medical care under section 213(a); 
  4.4      (9) the exemption amount allowed under Laws 1995, chapter 
  4.5   255, article 3, section 2, subdivision 3; 
  4.6      (10) to the extent included in federal taxable income, 
  4.7   postservice benefits for youth community service under section 
  4.8   124D.42 for volunteer service under United States Code, title 
  4.9   42, section 5011(d), as amended; 
  4.10     (11) to the extent not deducted in determining federal 
  4.11  taxable income by an individual who does not itemize deductions 
  4.12  for federal income tax purposes for the taxable year, an amount 
  4.13  equal to 50 percent of the excess of charitable contributions 
  4.14  allowable as a deduction for the taxable year under section 
  4.15  170(a) of the Internal Revenue Code over $500; and 
  4.16     (12) to the extent included in federal taxable income, 
  4.17  holocaust victims' settlement payments for any injury incurred 
  4.18  as a result of the holocaust, if received by an individual who 
  4.19  was persecuted for racial or religious reasons by Nazi Germany 
  4.20  or any other Axis regime or an heir of such a person; and 
  4.21     (13) to the extent included in federal taxable income, 20 
  4.22  percent of adjusted net capital gain, as defined in section 1(h) 
  4.23  of the Internal Revenue Code. 
  4.24     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
  4.25  290.06, subdivision 2c, is amended to read: 
  4.26     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
  4.27  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
  4.28  married individuals filing joint returns and surviving spouses 
  4.29  as defined in section 2(a) of the Internal Revenue Code must be 
  4.30  computed by applying to their taxable net income the following 
  4.31  schedule of rates: 
  4.32     (1) On the first $25,220 $35,140, 5.5 5 percent; 
  4.33     (2) On all over $25,220 $35,140, but not over 
  4.34  $100,200 $115,420, 7.25 6.5 percent; 
  4.35     (3) On all over $100,200 $115,420, 8 7.5 percent. 
  4.36     Married individuals filing separate returns, estates, and 
  5.1   trusts must compute their income tax by applying the above rates 
  5.2   to their taxable income, except that the income brackets will be 
  5.3   one-half of the above amounts.  
  5.4      (b) The income taxes imposed by this chapter upon unmarried 
  5.5   individuals must be computed by applying to taxable net income 
  5.6   the following schedule of rates: 
  5.7      (1) On the first $17,250 $17,570, 5.5 5 percent; 
  5.8      (2) On all over $17,250 $17,570, but not over 
  5.9   $56,680 $57,710, 7.25 6.5 percent; 
  5.10     (3) On all over $56,680 $57,710, 8 7.5 percent. 
  5.11     (c) The income taxes imposed by this chapter upon unmarried 
  5.12  individuals qualifying as a head of household as defined in 
  5.13  section 2(b) of the Internal Revenue Code must be computed by 
  5.14  applying to taxable net income the following schedule of rates: 
  5.15     (1) On the first $21,240 $26,355, 5.5 5 percent; 
  5.16     (2) On all over $21,240 $26,355, but not 
  5.17  over $85,350 $86,910, 7.25 6.5 percent; 
  5.18     (3) On all over $85,350 $86,910, 8 7.5 percent. 
  5.19     (d) In lieu of a tax computed according to the rates set 
  5.20  forth in this subdivision, the tax of any individual taxpayer 
  5.21  whose taxable net income for the taxable year is less than an 
  5.22  amount determined by the commissioner must be computed in 
  5.23  accordance with tables prepared and issued by the commissioner 
  5.24  of revenue based on income brackets of not more than $100.  The 
  5.25  amount of tax for each bracket shall be computed at the rates 
  5.26  set forth in this subdivision, provided that the commissioner 
  5.27  may disregard a fractional part of a dollar unless it amounts to 
  5.28  50 cents or more, in which case it may be increased to $1. 
  5.29     (e) An individual who is not a Minnesota resident for the 
  5.30  entire year must compute the individual's Minnesota income tax 
  5.31  as provided in this subdivision.  After the application of the 
  5.32  nonrefundable credits provided in this chapter, the tax 
  5.33  liability must then be multiplied by a fraction in which:  
  5.34     (1) the numerator is the individual's Minnesota source 
  5.35  federal adjusted gross income as defined in section 62 of the 
  5.36  Internal Revenue Code and increased by the additions required 
  6.1   under section 290.01, subdivision 19a, clauses (1) and (6), 
  6.2   after applying the allocation and assignability provisions of 
  6.3   section 290.081, clause (a), or 290.17; and 
  6.4      (2) the denominator is the individual's federal adjusted 
  6.5   gross income as defined in section 62 of the Internal Revenue 
  6.6   Code of 1986, increased by the amounts specified in section 
  6.7   290.01, subdivision 19a, clauses (1) and (6), and reduced by the 
  6.8   amounts specified in section 290.01, subdivision 19b, clause (1).
  6.9      Sec. 3.  Minnesota Statutes 1999 Supplement, section 
  6.10  290.06, subdivision 2d, is amended to read: 
  6.11     Subd. 2d.  [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 
  6.12  taxable years beginning after December 31, 1999 2000, the 
  6.13  minimum and maximum dollar amounts for each rate bracket for 
  6.14  which a tax is imposed in subdivision 2c shall be adjusted for 
  6.15  inflation by the percentage determined under paragraph (b).  For 
  6.16  the purpose of making the adjustment as provided in this 
  6.17  subdivision all of the rate brackets provided in subdivision 2c 
  6.18  shall be the rate brackets as they existed for taxable years 
  6.19  beginning after December 31, 1998 1999, and before January 
  6.20  1, 2000 2001.  The rate applicable to any rate bracket must not 
  6.21  be changed.  The dollar amounts setting forth the tax shall be 
  6.22  adjusted to reflect the changes in the rate brackets.  The rate 
  6.23  brackets as adjusted must be rounded to the nearest $10 amount.  
  6.24  If the rate bracket ends in $5, it must be rounded up to the 
  6.25  nearest $10 amount.  
  6.26     (b) The commissioner shall adjust the rate brackets and by 
  6.27  the percentage determined pursuant to the provisions of section 
  6.28  1(f) of the Internal Revenue Code, except that in section 
  6.29  1(f)(3)(B) the word "1998" shall be substituted for the word 
  6.30  "1992."  For 2000 2001, the commissioner shall then determine 
  6.31  the percent change from the 12 months ending on August 31, 1998 
  6.32  1999, to the 12 months ending on August 31, 1999 2000, and in 
  6.33  each subsequent year, from the 12 months ending on August 
  6.34  31, 1998 1999, to the 12 months ending on August 31 of the year 
  6.35  preceding the taxable year.  The determination of the 
  6.36  commissioner pursuant to this subdivision shall not be 
  7.1   considered a "rule" and shall not be subject to the 
  7.2   Administrative Procedure Act contained in chapter 14.  
  7.3      No later than December 15 of each year, the commissioner 
  7.4   shall announce the specific percentage that will be used to 
  7.5   adjust the tax rate brackets. 
  7.6      Sec. 4.  Minnesota Statutes 1999 Supplement, section 
  7.7   290.091, subdivision 1, is amended to read: 
  7.8      Subdivision 1.  [IMPOSITION OF TAX.] In addition to all 
  7.9   other taxes imposed by this chapter a tax is imposed on 
  7.10  individuals, estates, and trusts equal to the excess (if any) of 
  7.11     (a) an amount equal to 6.5 5.9 percent of alternative 
  7.12  minimum taxable income after subtracting the exemption amount, 
  7.13  over 
  7.14     (b) the regular tax for the taxable year. 
  7.15     Sec. 5.  Minnesota Statutes 1999 Supplement, section 
  7.16  290.091, subdivision 2, is amended to read: 
  7.17     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
  7.18  this section, the following terms have the meanings given: 
  7.19     (a) "Alternative minimum taxable income" means the sum of 
  7.20  the following for the taxable year: 
  7.21     (1) the taxpayer's federal alternative minimum taxable 
  7.22  income as defined in section 55(b)(2) of the Internal Revenue 
  7.23  Code; 
  7.24     (2) the taxpayer's itemized deductions allowed in computing 
  7.25  federal alternative minimum taxable income, but excluding: 
  7.26     (i) the Minnesota charitable contribution deduction; 
  7.27     (ii) the medical expense deduction; 
  7.28     (iii) the casualty, theft, and disaster loss deduction; 
  7.29     (iv) the impairment-related work expenses of a disabled 
  7.30  person; and 
  7.31     (v) holocaust victims' settlement payments to the extent 
  7.32  allowed under section 290.01, subdivision 19b; 
  7.33     (3) for depletion allowances computed under section 613A(c) 
  7.34  of the Internal Revenue Code, with respect to each property (as 
  7.35  defined in section 614 of the Internal Revenue Code), to the 
  7.36  extent not included in federal alternative minimum taxable 
  8.1   income, the excess of the deduction for depletion allowable 
  8.2   under section 611 of the Internal Revenue Code for the taxable 
  8.3   year over the adjusted basis of the property at the end of the 
  8.4   taxable year (determined without regard to the depletion 
  8.5   deduction for the taxable year); 
  8.6      (4) to the extent not included in federal alternative 
  8.7   minimum taxable income, the amount of the tax preference for 
  8.8   intangible drilling cost under section 57(a)(2) of the Internal 
  8.9   Revenue Code determined without regard to subparagraph (E); and 
  8.10     (5) to the extent not included in federal alternative 
  8.11  minimum taxable income, the amount of interest income as 
  8.12  provided by section 290.01, subdivision 19a, clause (1); 
  8.13     less the sum of the amounts determined under the following: 
  8.14     (1) interest income as defined in section 290.01, 
  8.15  subdivision 19b, clause (1); 
  8.16     (2) an overpayment of state income tax as provided by 
  8.17  section 290.01, subdivision 19b, clause (2), to the extent 
  8.18  included in federal alternative minimum taxable income; and 
  8.19     (3) the amount of investment interest paid or accrued 
  8.20  within the taxable year on indebtedness to the extent that the 
  8.21  amount does not exceed net investment income, as defined in 
  8.22  section 163(d)(4) of the Internal Revenue Code.  Interest does 
  8.23  not include amounts deducted in computing federal adjusted gross 
  8.24  income. 
  8.25     In the case of an estate or trust, alternative minimum 
  8.26  taxable income must be computed as provided in section 59(c) of 
  8.27  the Internal Revenue Code. 
  8.28     (b) "Investment interest" means investment interest as 
  8.29  defined in section 163(d)(3) of the Internal Revenue Code. 
  8.30     (c) "Tentative minimum tax" equals 6.5 5.9 percent of 
  8.31  alternative minimum taxable income after subtracting the 
  8.32  exemption amount determined under subdivision 3. 
  8.33     (d) "Regular tax" means the tax that would be imposed under 
  8.34  this chapter (without regard to this section and section 
  8.35  290.032), reduced by the sum of the nonrefundable credits 
  8.36  allowed under this chapter.  
  9.1      (e) "Net minimum tax" means the minimum tax imposed by this 
  9.2   section. 
  9.3      (f) "Minnesota charitable contribution deduction" means a 
  9.4   charitable contribution deduction under section 170 of the 
  9.5   Internal Revenue Code to or for the use of an entity described 
  9.6   in section 290.21, subdivision 3, clauses (a) to (e).  When the 
  9.7   federal deduction for charitable contributions is limited under 
  9.8   section 170(b) of the Internal Revenue Code, the allowable 
  9.9   contributions in the year of contribution are deemed to be first 
  9.10  contributions to entities described in section 290.21, 
  9.11  subdivision 3, clauses (a) to (e). 
  9.12     Sec. 6.  Minnesota Statutes 1999 Supplement, section 
  9.13  290.091, subdivision 6, is amended to read: 
  9.14     Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
  9.15  is allowed against the tax imposed by this chapter on 
  9.16  individuals, trusts, and estates equal to the minimum tax credit 
  9.17  for the taxable year.  The minimum tax credit equals the 
  9.18  adjusted net minimum tax for taxable years beginning after 
  9.19  December 31, 1988, reduced by the minimum tax credits allowed in 
  9.20  a prior taxable year.  The credit may not exceed the excess (if 
  9.21  any) for the taxable year of 
  9.22     (1) the regular tax, over 
  9.23     (2) the greater of (i) the tentative alternative minimum 
  9.24  tax, or (ii) zero. 
  9.25     (b) The adjusted net minimum tax for a taxable year equals 
  9.26  the lesser of the net minimum tax or the excess (if any) of 
  9.27     (1) the tentative minimum tax, over 
  9.28     (2) 6.5 5.9 percent of the sum of 
  9.29     (i) adjusted gross income as defined in section 62 of the 
  9.30  Internal Revenue Code, 
  9.31     (ii) interest income as defined in section 290.01, 
  9.32  subdivision 19a, clause (1), 
  9.33     (iii) interest on specified private activity bonds, as 
  9.34  defined in section 57(a)(5) of the Internal Revenue Code, to the 
  9.35  extent not included under clause (ii), 
  9.36     (iv) depletion as defined in section 57(a)(1), determined 
 10.1   without regard to the last sentence of paragraph (1), of the 
 10.2   Internal Revenue Code, less 
 10.3      (v) the deductions allowed in computing alternative minimum 
 10.4   taxable income provided in subdivision 2, paragraph (a), clause 
 10.5   (2) of the first series of clauses and clauses (1), (2), and (3) 
 10.6   of the second series of clauses, and 
 10.7      (vi) the exemption amount determined under subdivision 3. 
 10.8      In the case of an individual who is not a Minnesota 
 10.9   resident for the entire year, adjusted net minimum tax must be 
 10.10  multiplied by the fraction defined in section 290.06, 
 10.11  subdivision 2c, paragraph (e).  In the case of a trust or 
 10.12  estate, adjusted net minimum tax must be multiplied by the 
 10.13  fraction defined under subdivision 4, paragraph (b). 
 10.14     Sec. 7.  [REPEALER.] 
 10.15     Minnesota Statutes 1999 Supplement, section 290.0675, is 
 10.16  repealed. 
 10.17     Sec. 8.  [EFFECTIVE DATE.] 
 10.18     Section 1 is effective for sales and exchanges occurring 
 10.19  after the date of final enactment of this act for taxable years 
 10.20  beginning after December 31, 1999.  
 10.21     Sections 2 and 4 to 7 are effective for taxable years 
 10.22  beginning after December 31, 1999. 
 10.23     Section 3 is effective for taxable years beginning after 
 10.24  December 31, 2000. 
 10.25                             ARTICLE 2 
 10.26                           PROPERTY TAXES 
 10.27     Section 1.  Minnesota Statutes 1999 Supplement, section 
 10.28  273.13, subdivision 24, is amended to read: 
 10.29     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 10.30  property and utility real and personal property is class 3a.  
 10.31  Each parcel of real property has a class rate of 2.4 2.0 percent 
 10.32  of the first tier of market value, and 3.4 3.0 percent of the 
 10.33  remaining market value, except that in the case of contiguous 
 10.34  parcels of property owned by the same person or entity, only the 
 10.35  value equal to the first-tier value of the contiguous parcels 
 10.36  qualifies for the reduced class rate.  For the purposes of this 
 11.1   subdivision, the first tier means the first $150,000 of market 
 11.2   value.  Real property owned in fee by a utility for transmission 
 11.3   line right-of-way shall be classified at the class rate for the 
 11.4   higher tier.  All personal property shall be classified at the 
 11.5   class rate for the higher tier.  For purposes of this 
 11.6   subdivision "personal property" means tools, implements, and 
 11.7   machinery of an electric generating, transmission, or 
 11.8   distribution system, or a pipeline system transporting or 
 11.9   distributing water, gas, crude oil, or petroleum products or 
 11.10  mains and pipes used in the distribution of steam or hot or 
 11.11  chilled water for heating or cooling buildings, which are 
 11.12  fixtures. 
 11.13     For purposes of this paragraph, parcels are considered to 
 11.14  be contiguous even if they are separated from each other by a 
 11.15  road, street, vacant lot, waterway, or other similar intervening 
 11.16  type of property. 
 11.17     (b) Employment property defined in section 469.166, during 
 11.18  the period provided in section 469.170, shall constitute class 
 11.19  3b.  The class rates for class 3b property are determined under 
 11.20  paragraph (a). 
 11.21     (c)(1) Subject to the limitations of clause (2), structures 
 11.22  which are (i) located on property classified as class 3a, (ii) 
 11.23  constructed under an initial building permit issued after 
 11.24  January 2, 1996, (iii) located in a transit zone as defined 
 11.25  under section 473.3915, subdivision 3, (iv) located within the 
 11.26  boundaries of a school district, and (v) not primarily used for 
 11.27  retail or transient lodging purposes, shall have a class rate 
 11.28  equal to the lesser of 2.975 percent or the class rate of the 
 11.29  second tier of the commercial property rate under paragraph (a) 
 11.30  on any portion of the market value that does not qualify for the 
 11.31  first tier class rate under paragraph (a).  As used in item (v), 
 11.32  a structure is primarily used for retail or transient lodging 
 11.33  purposes if over 50 percent of its square footage is used for 
 11.34  those purposes.  A class rate equal to the lesser of 2.975 
 11.35  percent or the class rate of the second tier of the commercial 
 11.36  property class rate under paragraph (a) shall also apply to 
 12.1   improvements to existing structures that meet the requirements 
 12.2   of items (i) to (v) if the improvements are constructed under an 
 12.3   initial building permit issued after January 2, 1996, even if 
 12.4   the remainder of the structure was constructed prior to January 
 12.5   2, 1996.  For the purposes of this paragraph, a structure shall 
 12.6   be considered to be located in a transit zone if any portion of 
 12.7   the structure lies within the zone.  If any property once 
 12.8   eligible for treatment under this paragraph ceases to remain 
 12.9   eligible due to revisions in transit zone boundaries, the 
 12.10  property shall continue to receive treatment under this 
 12.11  paragraph for a period of three years. 
 12.12     (2) This clause applies to any structure qualifying for the 
 12.13  transit zone reduced class rate under clause (1) on January 2, 
 12.14  1999, or any structure meeting any of the qualification criteria 
 12.15  in item (i) and otherwise qualifying for the transit zone 
 12.16  reduced class rate under clause (1).  Such a structure continues 
 12.17  to receive the transit zone reduced class rate until the 
 12.18  occurrence of one of the events in item (ii).  Property 
 12.19  qualifying under item (i)(D), that is located outside of a city 
 12.20  of the first class, qualifies for the transit zone reduced class 
 12.21  rate as provided in that item.  Property qualifying under item 
 12.22  (i)(E) qualifies for the transit zone reduced class rate as 
 12.23  provided in that item. 
 12.24     (i) A structure qualifies for the rate in this clause if it 
 12.25  is: 
 12.26     (A) property for which a building permit was issued before 
 12.27  December 31, 1998; or 
 12.28     (B) property for which a building permit was issued before 
 12.29  June 30, 2001, if: 
 12.30     (I) at least 50 percent of the land on which the structure 
 12.31  is to be built has been acquired or is the subject of signed 
 12.32  purchase agreements or signed options as of March 15, 1998, by 
 12.33  the entity that proposes construction of the project or an 
 12.34  affiliate of the entity; 
 12.35     (II) signed agreements have been entered into with one 
 12.36  entity or with affiliated entities to lease for the account of 
 13.1   the entity or affiliated entities at least 50 percent of the 
 13.2   square footage of the structure or the owner of the structure 
 13.3   will occupy at least 50 percent of the square footage of the 
 13.4   structure; and 
 13.5      (III) one of the following requirements is met: 
 13.6      the project proposer has submitted the completed data 
 13.7   portions of an environmental assessment worksheet by December 
 13.8   31, 1998; or 
 13.9      a notice of determination of adequacy of an environmental 
 13.10  impact statement has been published by April 1, 1999; or 
 13.11     an alternative urban areawide review has been completed by 
 13.12  April 1, 1999; or 
 13.13     (C) property for which a building permit is issued before 
 13.14  July 30, 1999, if: 
 13.15     (I) at least 50 percent of the land on which the structure 
 13.16  is to be built has been acquired or is the subject of signed 
 13.17  purchase agreements as of March 31, 1998, by the entity that 
 13.18  proposes construction of the project or an affiliate of the 
 13.19  entity; 
 13.20     (II) a signed agreement has been entered into between the 
 13.21  building developer and a tenant to lease for its own account at 
 13.22  least 200,000 square feet of space in the building; 
 13.23     (III) a signed letter of intent is entered into by July 1, 
 13.24  1998, between the building developer and the tenant to lease the 
 13.25  space for its own account; and 
 13.26     (IV) the environmental review process required by state law 
 13.27  was commenced by December 31, 1998; 
 13.28     (D) property for which an irrevocable letter of credit with 
 13.29  a housing and redevelopment authority was signed before December 
 13.30  31, 1998.  The structure shall receive the transit zone reduced 
 13.31  class rate during construction and for the duration of time that 
 13.32  the original tenants remain in the building.  Any unoccupied net 
 13.33  leasable square footage that is not leased within 36 months 
 13.34  after the certificate of occupancy has been issued for the 
 13.35  building shall not be eligible to receive the reduced class 
 13.36  rate.  This reduced class rate applies only if the entity that 
 14.1   constructed the structure continues to own the property; 
 14.2      (E) property, located in a city of the first class, and for 
 14.3   which the building permits for the excavation, the parking ramp, 
 14.4   and the office tower were issued prior to April 1, 1999, shall 
 14.5   receive the reduced class rate during construction and for the 
 14.6   first five assessment years immediately following its initial 
 14.7   occupancy provided that, when completed, at least 25 percent of 
 14.8   the net leasable square footage must be occupied by the entity 
 14.9   or the parent entity constructing the structure each year during 
 14.10  this time period.  In order to receive the reduced class rate on 
 14.11  the structure in any subsequent assessment years, at least 50 
 14.12  percent of the rentable square footage must be occupied by the 
 14.13  entity or the parent entity that constructed the structure.  
 14.14  This reduced class rate applies only if the entity or the parent 
 14.15  entity that constructed the structure continues to own the 
 14.16  property. 
 14.17     (ii) A structure specified by this clause, other than a 
 14.18  structure qualifying under clause (i)(D) or (E), shall continue 
 14.19  to receive the transit zone reduced class rate until the 
 14.20  occurrence of one of the following events: 
 14.21     (A) if the structure upon initial occupancy will be owner 
 14.22  occupied by the entity initially constructing the structure or 
 14.23  an affiliated entity, the structure receives the reduced class 
 14.24  rate until the structure ceases to be at least 50 percent 
 14.25  occupied by the entity or an affiliated entity, provided, if the 
 14.26  portion of the structure occupied by that entity or an affiliate 
 14.27  of the entity is less than 85 percent, the transit zone class 
 14.28  rate reduction for the portion of structure not so occupied 
 14.29  terminates upon the leasing of such space to any nonaffiliated 
 14.30  entity; or 
 14.31     (B) if the structure is leased by a single entity or 
 14.32  affiliated entity at the time of initial occupancy, the 
 14.33  structure shall receive the reduced class rate until the 
 14.34  structure ceases to be at least 50 percent occupied by the 
 14.35  entity or an affiliated entity, provided, if the portion of the 
 14.36  structure occupied by that entity or an affiliate of the entity 
 15.1   is less than 85 percent, the transit zone class rate reduction 
 15.2   for the portion of structure not so occupied shall terminate 
 15.3   upon the leasing of such space to any nonaffiliated entity; or 
 15.4      (C) if the structure meets the criteria in item (i)(C), the 
 15.5   structure shall receive the reduced class rate until the 
 15.6   expiration of the initial lease term of the applicable tenants. 
 15.7      Percentages occupied or leased shall be determined based 
 15.8   upon net leasable square footage in the structure.  The assessor 
 15.9   shall allocate the value of the structure in the same fashion as 
 15.10  provided in the general law for portions of any structure 
 15.11  receiving and not receiving the transit tax class reduction as a 
 15.12  result of this clause. 
 15.13     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
 15.14  273.13, subdivision 25, is amended to read: 
 15.15     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 15.16  estate containing four or more units and used or held for use by 
 15.17  the owner or by the tenants or lessees of the owner as a 
 15.18  residence for rental periods of 30 days or more.  Class 4a also 
 15.19  includes hospitals licensed under sections 144.50 to 144.56, 
 15.20  other than hospitals exempt under section 272.02, and contiguous 
 15.21  property used for hospital purposes, without regard to whether 
 15.22  the property has been platted or subdivided.  Class 4a property 
 15.23  in a city with a population of 5,000 or less, that is (1) 
 15.24  located outside of the metropolitan area, as defined in section 
 15.25  473.121, subdivision 2, or outside any county contiguous to the 
 15.26  metropolitan area, and (2) whose city boundary is at least 15 
 15.27  miles from the boundary of any city with a population greater 
 15.28  than 5,000 has a class rate of 2.15 percent of market value.  
 15.29  All other Class 4a property has a class rate of 2.4 2.0 percent 
 15.30  of market value.  For purposes of this paragraph, population has 
 15.31  the same meaning given in section 477A.011, subdivision 3. 
 15.32     (b) Class 4b includes: 
 15.33     (1) residential real estate containing less than four units 
 15.34  that does not qualify as class 4bb, other than seasonal 
 15.35  residential, and recreational; 
 15.36     (2) manufactured homes not classified under any other 
 16.1   provision; 
 16.2      (3) a dwelling, garage, and surrounding one acre of 
 16.3   property on a nonhomestead farm classified under subdivision 23, 
 16.4   paragraph (b) containing two or three units; 
 16.5      (4) unimproved property that is classified residential as 
 16.6   determined under subdivision 33.  
 16.7      Class 4b property has a class rate of 1.65 percent of 
 16.8   market value.  
 16.9      (c) Class 4bb includes: 
 16.10     (1) nonhomestead residential real estate containing one 
 16.11  unit, other than seasonal residential, and recreational; and 
 16.12     (2) a single family dwelling, garage, and surrounding one 
 16.13  acre of property on a nonhomestead farm classified under 
 16.14  subdivision 23, paragraph (b). 
 16.15     Class 4bb has a class rate of 1.2 percent on the first 
 16.16  $76,000 of market value and a class rate of 1.65 percent of its 
 16.17  market value that exceeds $76,000. 
 16.18     Property that has been classified as seasonal recreational 
 16.19  residential property at any time during which it has been owned 
 16.20  by the current owner or spouse of the current owner does not 
 16.21  qualify for class 4bb. 
 16.22     (d) Class 4c property includes: 
 16.23     (1) except as provided in subdivision 22, paragraph (c), 
 16.24  real property devoted to temporary and seasonal residential 
 16.25  occupancy for recreation purposes, including real property 
 16.26  devoted to temporary and seasonal residential occupancy for 
 16.27  recreation purposes and not devoted to commercial purposes for 
 16.28  more than 250 days in the year preceding the year of 
 16.29  assessment.  For purposes of this clause, property is devoted to 
 16.30  a commercial purpose on a specific day if any portion of the 
 16.31  property is used for residential occupancy, and a fee is charged 
 16.32  for residential occupancy.  In order for a property to be 
 16.33  classified as class 4c, seasonal recreational residential for 
 16.34  commercial purposes, at least 40 percent of the annual gross 
 16.35  lodging receipts related to the property must be from business 
 16.36  conducted during 90 consecutive days and either (i) at least 60 
 17.1   percent of all paid bookings by lodging guests during the year 
 17.2   must be for periods of at least two consecutive nights; or (ii) 
 17.3   at least 20 percent of the annual gross receipts must be from 
 17.4   charges for rental of fish houses, boats and motors, 
 17.5   snowmobiles, downhill or cross-country ski equipment, or charges 
 17.6   for marina services, launch services, and guide services, or the 
 17.7   sale of bait and fishing tackle.  For purposes of this 
 17.8   determination, a paid booking of five or more nights shall be 
 17.9   counted as two bookings.  Class 4c also includes commercial use 
 17.10  real property used exclusively for recreational purposes in 
 17.11  conjunction with class 4c property devoted to temporary and 
 17.12  seasonal residential occupancy for recreational purposes, up to 
 17.13  a total of two acres, provided the property is not devoted to 
 17.14  commercial recreational use for more than 250 days in the year 
 17.15  preceding the year of assessment and is located within two miles 
 17.16  of the class 4c property with which it is used.  Class 4c 
 17.17  property classified in this clause also includes the remainder 
 17.18  of class 1c resorts provided that the entire property including 
 17.19  that portion of the property classified as class 1c also meets 
 17.20  the requirements for class 4c under this clause; otherwise the 
 17.21  entire property is classified as class 3.  Owners of real 
 17.22  property devoted to temporary and seasonal residential occupancy 
 17.23  for recreation purposes and all or a portion of which was 
 17.24  devoted to commercial purposes for not more than 250 days in the 
 17.25  year preceding the year of assessment desiring classification as 
 17.26  class 1c or 4c, must submit a declaration to the assessor 
 17.27  designating the cabins or units occupied for 250 days or less in 
 17.28  the year preceding the year of assessment by January 15 of the 
 17.29  assessment year.  Those cabins or units and a proportionate 
 17.30  share of the land on which they are located will be designated 
 17.31  class 1c or 4c as otherwise provided.  The remainder of the 
 17.32  cabins or units and a proportionate share of the land on which 
 17.33  they are located will be designated as class 3a.  The owner of 
 17.34  property desiring designation as class 1c or 4c property must 
 17.35  provide guest registers or other records demonstrating that the 
 17.36  units for which class 1c or 4c designation is sought were not 
 18.1   occupied for more than 250 days in the year preceding the 
 18.2   assessment if so requested.  The portion of a property operated 
 18.3   as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
 18.4   nonresidential facility operated on a commercial basis not 
 18.5   directly related to temporary and seasonal residential occupancy 
 18.6   for recreation purposes shall not qualify for class 1c or 4c; 
 18.7      (2) qualified property used as a golf course if: 
 18.8      (i) it is open to the public on a daily fee basis.  It may 
 18.9   charge membership fees or dues, but a membership fee may not be 
 18.10  required in order to use the property for golfing, and its green 
 18.11  fees for golfing must be comparable to green fees typically 
 18.12  charged by municipal courses; and 
 18.13     (ii) it meets the requirements of section 273.112, 
 18.14  subdivision 3, paragraph (d). 
 18.15     A structure used as a clubhouse, restaurant, or place of 
 18.16  refreshment in conjunction with the golf course is classified as 
 18.17  class 3a property; 
 18.18     (3) real property up to a maximum of one acre of land owned 
 18.19  by a nonprofit community service oriented organization; provided 
 18.20  that the property is not used for a revenue-producing activity 
 18.21  for more than six days in the calendar year preceding the year 
 18.22  of assessment and the property is not used for residential 
 18.23  purposes on either a temporary or permanent basis.  For purposes 
 18.24  of this clause, a "nonprofit community service oriented 
 18.25  organization" means any corporation, society, association, 
 18.26  foundation, or institution organized and operated exclusively 
 18.27  for charitable, religious, fraternal, civic, or educational 
 18.28  purposes, and which is exempt from federal income taxation 
 18.29  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 18.30  Revenue Code of 1986, as amended through December 31, 1990.  For 
 18.31  purposes of this clause, "revenue-producing activities" shall 
 18.32  include but not be limited to property or that portion of the 
 18.33  property that is used as an on-sale intoxicating liquor or 3.2 
 18.34  percent malt liquor establishment licensed under chapter 340A, a 
 18.35  restaurant open to the public, bowling alley, a retail store, 
 18.36  gambling conducted by organizations licensed under chapter 349, 
 19.1   an insurance business, or office or other space leased or rented 
 19.2   to a lessee who conducts a for-profit enterprise on the 
 19.3   premises.  Any portion of the property which is used for 
 19.4   revenue-producing activities for more than six days in the 
 19.5   calendar year preceding the year of assessment shall be assessed 
 19.6   as class 3a.  The use of the property for social events open 
 19.7   exclusively to members and their guests for periods of less than 
 19.8   24 hours, when an admission is not charged nor any revenues are 
 19.9   received by the organization shall not be considered a 
 19.10  revenue-producing activity; 
 19.11     (4) post-secondary student housing of not more than one 
 19.12  acre of land that is owned by a nonprofit corporation organized 
 19.13  under chapter 317A and is used exclusively by a student 
 19.14  cooperative, sorority, or fraternity for on-campus housing or 
 19.15  housing located within two miles of the border of a college 
 19.16  campus; 
 19.17     (5) manufactured home parks as defined in section 327.14, 
 19.18  subdivision 3; and 
 19.19     (6) real property that is actively and exclusively devoted 
 19.20  to indoor fitness, health, social, recreational, and related 
 19.21  uses, is owned and operated by a not-for-profit corporation, and 
 19.22  is located within the metropolitan area as defined in section 
 19.23  473.121, subdivision 2. 
 19.24     Class 4c property has a class rate of 1.65 percent of 
 19.25  market value, except that (i) each parcel of seasonal 
 19.26  residential recreational property not used for commercial 
 19.27  purposes has the same class rates as class 4bb property, (ii) 
 19.28  manufactured home parks assessed under clause (5) have the same 
 19.29  class rate as class 4b property, and (iii) property described in 
 19.30  paragraph (d), clause (4), has the same class rate as the rate 
 19.31  applicable to the first tier of class 4bb nonhomestead 
 19.32  residential real estate under paragraph (c).  
 19.33     (e) Class 4d property is qualifying low-income rental 
 19.34  housing certified to the assessor by the housing finance agency 
 19.35  under sections 273.126 and 462A.071.  Class 4d includes land in 
 19.36  proportion to the total market value of the building that is 
 20.1   qualifying low-income rental housing.  For all properties 
 20.2   qualifying as class 4d, the market value determined by the 
 20.3   assessor must be based on the normal approach to value using 
 20.4   normal unrestricted rents. 
 20.5      Class 4d property has a class rate of one percent of market 
 20.6   value.  
 20.7      Sec. 3.  Minnesota Statutes 1999 Supplement, section 
 20.8   273.1382, subdivision 1a, is amended to read: 
 20.9      Subd. 1a.  [EDUCATION HOMESTEAD CREDIT.] Each county 
 20.10  auditor shall determine a general education homestead credit for 
 20.11  each homestead within the county equal to 66.2 percent for taxes 
 20.12  payable in 1999 and 83 .. percent for taxes payable in 2000 and 
 20.13  thereafter of the education credit tax rate times the net tax 
 20.14  capacity of the homestead for the taxes payable year.  The 
 20.15  amount of general education homestead credit for a homestead may 
 20.16  not exceed $320 for taxes payable in 1999 and $390 $....... for 
 20.17  taxes payable in 2000 and thereafter.  In the case of an 
 20.18  agricultural homestead, only the net tax capacity of the house, 
 20.19  garage, and surrounding one acre of land shall be used in 
 20.20  determining the property's education homestead credit. 
 20.21     Sec. 4.  [EFFECTIVE DATE.] 
 20.22     Sections 1 to 3 are effective for taxes levied in 2000, 
 20.23  payable in 2001, and thereafter. 
 20.24                             ARTICLE 3 
 20.25                           MINNESOTACARE 
 20.26     Section 1.  [16A.78] [MINNESOTACARE SUBSIDIZED HEALTH 
 20.27  INSURANCE ACCOUNT.] 
 20.28     (a) A MinnesotaCare subsidized health insurance account is 
 20.29  established in the general fund. 
 20.30     (b) The commissioner shall credit to the account the 
 20.31  tobacco settlement payments received by the state each December 
 20.32  beginning December 1999 as a result of the settlement of the 
 20.33  lawsuit styled as State v. Philip Morris Inc., No. C1-94-8565 
 20.34  (Minnesota District Court, Second Judicial District). 
 20.35     (c) Money in the account is available for and may only be 
 20.36  spent for expenditures associated with the MinnesotaCare program.
 21.1      (d) The balance in the account does not cancel and remains 
 21.2   in the account until appropriated by law for the purposes 
 21.3   described in this section.  
 21.4      (e) Notwithstanding section 11A.20, investment earnings on 
 21.5   the account are credited to the account.  
 21.6      Sec. 2.  Minnesota Statutes 1998, section 60A.15, 
 21.7   subdivision 1, is amended to read: 
 21.8      Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
 21.9   before April 1, June 1, and December 1 of each year, every 
 21.10  domestic and foreign company, including town and farmers' mutual 
 21.11  insurance companies, domestic mutual insurance companies, and 
 21.12  marine insurance companies, health maintenance organizations, 
 21.13  community integrated service networks, and nonprofit health 
 21.14  service plan corporations, shall pay to the commissioner of 
 21.15  revenue installments equal to one-third of the insurer's total 
 21.16  estimated tax for the current year.  Except as provided in 
 21.17  paragraphs paragraph (d), (e), (h), and (i), installments must 
 21.18  be based on a sum equal to two percent of the premiums described 
 21.19  in paragraph (b). 
 21.20     (b) Installments under paragraph (a), or (d), or (e) are 
 21.21  percentages of gross premiums less return premiums on all direct 
 21.22  business received by the insurer in this state, or by its agents 
 21.23  for it, in cash or otherwise, during such year. 
 21.24     (c) Failure of a company to make payments of at least 
 21.25  one-third of either (1) the total tax paid during the previous 
 21.26  calendar year or (2) 80 percent of the actual tax for the 
 21.27  current calendar year shall subject the company to the penalty 
 21.28  and interest provided in this section, unless the total tax for 
 21.29  the current tax year is $500 or less. 
 21.30     (d) For health maintenance organizations, nonprofit health 
 21.31  service plan corporations, and community integrated service 
 21.32  networks, the installments must be based on an amount determined 
 21.33  under paragraph (h) or (i). 
 21.34     (e) For purposes of computing installments for town and 
 21.35  farmers' mutual insurance companies and for mutual property 
 21.36  casualty companies with total assets on December 31, 1989, of 
 22.1   $1,600,000,000 or less, the following rates apply: 
 22.2      (1) for all life insurance, two percent; 
 22.3      (2) for town and farmers' mutual insurance companies and 
 22.4   for mutual property and casualty companies with total assets of 
 22.5   $5,000,000 or less, on all other coverages, one percent; and 
 22.6      (3) for mutual property and casualty companies with total 
 22.7   assets on December 31, 1989, of $1,600,000,000 or less, on all 
 22.8   other coverages, 1.26 percent. 
 22.9      (f) (e) If the aggregate amount of premium tax payments 
 22.10  under this section and the fire marshal tax payments under 
 22.11  section 299F.21 made during a calendar year is equal to or 
 22.12  exceeds $120,000, all tax payments in the subsequent calendar 
 22.13  year must be paid by means of a funds transfer as defined in 
 22.14  section 336.4A-104, paragraph (a).  The funds transfer payment 
 22.15  date, as defined in section 336.4A-401, must be on or before the 
 22.16  date the payment is due.  If the date the payment is due is not 
 22.17  a funds transfer business day, as defined in section 336.4A-105, 
 22.18  paragraph (a), clause (4), the payment date must be on or before 
 22.19  the funds transfer business day next following the date the 
 22.20  payment is due.  
 22.21     (g) (f) Premiums under medical assistance, general 
 22.22  assistance medical care, the MinnesotaCare program, and the 
 22.23  Minnesota comprehensive health insurance plan and all payments, 
 22.24  revenues, and reimbursements received from the federal 
 22.25  government for Medicare-related coverage as defined in section 
 22.26  62A.31, subdivision 3, paragraph (e), are not subject to tax 
 22.27  under this section. 
 22.28     (h) For calendar years 1997, 1998, and 1999, the 
 22.29  installments for health maintenance organizations, community 
 22.30  integrated service networks, and nonprofit health service plan 
 22.31  corporations must be based on an amount equal to one percent of 
 22.32  premiums described under paragraph (b).  Health maintenance 
 22.33  organizations, community integrated service networks, and 
 22.34  nonprofit health service plan corporations that have met the 
 22.35  cost containment goals established under section 62J.04 in the 
 22.36  individual and small employer market for calendar year 1996 are 
 23.1   exempt from payment of the tax imposed under this section for 
 23.2   premiums paid after March 30, 1997, and before April 1, 1998.  
 23.3   Health maintenance organizations, community integrated service 
 23.4   networks, and nonprofit health service plan corporations that 
 23.5   have met the cost containment goals established under section 
 23.6   62J.04 in the individual and small employer market for calendar 
 23.7   year 1997 are exempt from payment of the tax imposed under this 
 23.8   section for premiums paid after March 30, 1998, and before April 
 23.9   1, 1999.  Health maintenance organizations, community integrated 
 23.10  service networks, and nonprofit health service plan corporations 
 23.11  that have met the cost containment goals established under 
 23.12  section 62J.04 in the individual and small employer market for 
 23.13  calendar year 1998 are exempt from payment of the tax imposed 
 23.14  under this section for premiums paid after March 30, 1999, and 
 23.15  before January 1, 2000.  
 23.16     (i) For calendar years after 1999, the commissioner of 
 23.17  finance shall determine the balance of the health care access 
 23.18  fund on September 1 of each year beginning September 1, 1999.  
 23.19  If the commissioner determines that there is no structural 
 23.20  deficit for the next fiscal year, no tax shall be imposed under 
 23.21  paragraph (d) for the following calendar year.  If the 
 23.22  commissioner determines that there will be a structural deficit 
 23.23  in the fund for the following fiscal year, then the 
 23.24  commissioner, in consultation with the commissioner of revenue, 
 23.25  shall determine the amount needed to eliminate the structural 
 23.26  deficit and a tax shall be imposed under paragraph (d) for the 
 23.27  following calendar year.  The commissioner shall determine the 
 23.28  rate of the tax as either one-quarter of one percent, one-half 
 23.29  of one percent, three-quarters of one percent, or one percent of 
 23.30  premiums described in paragraph (b), whichever is the lowest of 
 23.31  those rates that the commissioner determines will produce 
 23.32  sufficient revenue to eliminate the projected structural 
 23.33  deficit.  The commissioner of finance shall publish in the State 
 23.34  Register by October 1 of each year the amount of tax to be 
 23.35  imposed for the following calendar year.  In determining the 
 23.36  structural balance of the health care access fund for fiscal 
 24.1   years 2000 and 2001, the commissioner shall disregard the 
 24.2   transfer amount from the health care access fund to the general 
 24.3   fund for expenditures associated with the services provided to 
 24.4   pregnant women and children under the age of two enrolled in the 
 24.5   MinnesotaCare program.  
 24.6      (j) In approving the premium rates as required in sections 
 24.7   62L.08, subdivision 8, and 62A.65, subdivision 3, the 
 24.8   commissioners of health and commerce shall ensure that any 
 24.9   exemption from the tax as described in paragraphs (h) and (i) is 
 24.10  reflected in the premium rate.  
 24.11     Sec. 3.  Minnesota Statutes 1998, section 62J.041, 
 24.12  subdivision 1, is amended to read: 
 24.13     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 24.14  section, the following definitions apply. 
 24.15     (b) "Health plan company" has the definition provided in 
 24.16  section 62Q.01. 
 24.17     (c) "Total expenditures" means incurred claims or 
 24.18  expenditures on health care services, administrative expenses, 
 24.19  charitable contributions, and all other payments made by health 
 24.20  plan companies out of premium revenues. 
 24.21     (d) "Net expenditures" means total expenditures minus 
 24.22  exempted taxes and assessments and payments or allocations made 
 24.23  to establish or maintain reserves.  
 24.24     (e) "Exempted taxes and assessments" means direct payments 
 24.25  for taxes to government agencies, contributions to the Minnesota 
 24.26  comprehensive health association, the medical assistance 
 24.27  provider's surcharge under section 256.9657, the MinnesotaCare 
 24.28  provider tax under Minnesota Statutes 1998, section 295.52, 
 24.29  assessments by the health coverage reinsurance association, 
 24.30  assessments by the Minnesota life and health insurance guaranty 
 24.31  association, assessments by the Minnesota risk adjustment 
 24.32  association, and any new assessments imposed by federal or state 
 24.33  law. 
 24.34     (f) "Consumer cost-sharing or subscriber liability" means 
 24.35  enrollee coinsurance, copayment, deductible payments, and 
 24.36  amounts in excess of benefit plan maximums.  
 25.1      Sec. 4.  Minnesota Statutes 1998, section 62Q.095, 
 25.2   subdivision 6, is amended to read: 
 25.3      Subd. 6.  [EXEMPTION.] A health plan company, to the extent 
 25.4   that it operates as a staff model health plan company as defined 
 25.5   in section 295.50, subdivision 12b, by employing allied 
 25.6   independent health care providers to deliver health care 
 25.7   services to enrollees, is exempt from this section.  For 
 25.8   purposes of this subdivision, "staff model health plan company" 
 25.9   means a health plan company as defined in section 62Q.01, 
 25.10  subdivision 4, that employs one or more types of health care 
 25.11  provider to deliver health care services to the health plan 
 25.12  company's enrollees. 
 25.13     Sec. 5.  Minnesota Statutes 1998, section 144.1494, 
 25.14  subdivision 1, is amended to read: 
 25.15     Subdivision 1.  [CREATION OF ACCOUNT.] A rural physician 
 25.16  education account is established in the health care 
 25.17  access general fund.  The commissioner shall use money from the 
 25.18  account to establish a loan forgiveness program for medical 
 25.19  residents agreeing to practice in designated rural areas, as 
 25.20  defined by the commissioner.  Appropriations made to this 
 25.21  account do not cancel and are available until expended, except 
 25.22  that at the end of each biennium the commissioner shall cancel 
 25.23  to the health care access fund any remaining unobligated balance 
 25.24  in this account. 
 25.25     Sec. 6.  Minnesota Statutes 1998, section 144.1495, 
 25.26  subdivision 2, is amended to read: 
 25.27     Subd. 2.  [CREATION OF ACCOUNT.] A midlevel practitioner 
 25.28  education account is established in the health care 
 25.29  access general fund.  The commissioner shall use money from the 
 25.30  account to establish a loan forgiveness program for midlevel 
 25.31  practitioners agreeing to practice in designated rural areas.  
 25.32     Sec. 7.  Minnesota Statutes 1998, section 144.1496, 
 25.33  subdivision 1, is amended to read: 
 25.34     Subdivision 1.  [CREATION OF THE ACCOUNT.] An education 
 25.35  account in the health care access general fund is established 
 25.36  for a loan forgiveness program for nurses who agree to practice 
 26.1   nursing in a nursing home or intermediate care facility for 
 26.2   persons with mental retardation or related conditions.  The 
 26.3   account consists of money appropriated by the legislature and 
 26.4   repayments and penalties collected under subdivision 4.  Money 
 26.5   from the account must be used for a loan forgiveness program.  
 26.6      Sec. 8.  Minnesota Statutes 1998, section 214.16, 
 26.7   subdivision 2, is amended to read: 
 26.8      Subd. 2.  [BOARD COOPERATION REQUIRED.] The board shall 
 26.9   assist the commissioner of health in data collection activities 
 26.10  required under Laws 1992, chapter 549, article 7, and shall 
 26.11  assist the commissioner of revenue in activities related to 
 26.12  collection of the health care provider tax required under Laws 
 26.13  1992, chapter 549, article 9.  Upon the request of the 
 26.14  commissioner or the commissioner of revenue, the board shall 
 26.15  make available names and addresses of current licensees and 
 26.16  provide other information or assistance as needed. 
 26.17     Sec. 9.  Minnesota Statutes 1998, section 214.16, 
 26.18  subdivision 3, is amended to read: 
 26.19     Subd. 3.  [GROUNDS FOR DISCIPLINARY ACTION.] The board 
 26.20  shall take disciplinary action, which may include license 
 26.21  revocation, against a regulated person for: 
 26.22     (1) intentional failure to provide the commissioner of 
 26.23  health with the data required under chapter 62J; 
 26.24     (2) intentional failure to provide the commissioner of 
 26.25  revenue with data on gross revenue and other information 
 26.26  required for the commissioner to implement sections 295.50 to 
 26.27  295.58; 
 26.28     (3) intentional failure to pay the health care provider tax 
 26.29  required under section 295.52; and 
 26.30     (4) (2) entering into a contract or arrangement that is 
 26.31  prohibited under sections 62J.70 to 62J.73.  
 26.32     Sec. 10.  Minnesota Statutes 1998, section 256L.02, 
 26.33  subdivision 3, is amended to read: 
 26.34     Subd. 3.  [FINANCIAL MANAGEMENT.] (a) The commissioner 
 26.35  shall manage spending for the MinnesotaCare program in a manner 
 26.36  that maintains a minimum reserve in accordance with section 
 27.1   16A.76.  As part of each state revenue and expenditure forecast, 
 27.2   the commissioner must make an assessment of the expected 
 27.3   expenditures for the services covered services under the 
 27.4   MinnesotaCare program for the remainder of the current biennium 
 27.5   and for the following biennium.  The estimated expenditure, 
 27.6   including the reserve requirements described in section 16A.76, 
 27.7   shall be compared to an estimate of the revenues that will be 
 27.8   available in the health care access fund.  Based on this 
 27.9   comparison, and After consulting with the chairs of the house 
 27.10  ways and means committee and the senate finance committee, and 
 27.11  the legislative commission on health care access, the 
 27.12  commissioner shall, as necessary, make the adjustments specified 
 27.13  in paragraph (b) to ensure that expenditures remain within the 
 27.14  limits of the available revenues for the remainder of the 
 27.15  current biennium and for the following biennium appropriations.  
 27.16  The commissioner shall not hire additional staff using 
 27.17  appropriations from the health care access general fund until 
 27.18  the commissioner of finance makes a determination that the 
 27.19  adjustments implemented under paragraph (b) are sufficient to 
 27.20  allow MinnesotaCare expenditures to remain within the limits of 
 27.21  available revenues for the remainder of the current biennium and 
 27.22  for the following biennium appropriations. 
 27.23     (b) The adjustments the commissioner shall use must be 
 27.24  implemented in this order:  first, stop enrollment of single 
 27.25  adults and households without children; second, upon 45 days' 
 27.26  notice, stop coverage of single adults and households without 
 27.27  children already enrolled in the MinnesotaCare program; third, 
 27.28  upon 90 days' notice, decrease the premium subsidy amounts by 
 27.29  ten percent for families with gross annual income above 200 
 27.30  percent of the federal poverty guidelines; fourth, upon 90 days' 
 27.31  notice, decrease the premium subsidy amounts by ten percent for 
 27.32  families with gross annual income at or below 200 percent; and 
 27.33  fifth, require applicants to be uninsured for at least six 
 27.34  months prior to eligibility in the MinnesotaCare program.  If 
 27.35  these measures are insufficient to limit the expenditures to the 
 27.36  estimated amount of revenue available appropriations, the 
 28.1   commissioner shall further limit enrollment or decrease premium 
 28.2   subsidies. 
 28.3      Sec. 11.  Minnesota Statutes 1998, section 256L.02, 
 28.4   subdivision 4, is amended to read: 
 28.5      Subd. 4.  [FUNDING FOR PREGNANT WOMEN AND CHILDREN UNDER 
 28.6   AGE TWO.] For fiscal years beginning on or after July 1, 1999, 
 28.7   the state cost of health care services provided to MinnesotaCare 
 28.8   enrollees who are pregnant women or children under age two shall 
 28.9   be paid out of the general fund rather than the health care 
 28.10  access fund.  If the commissioner of finance decides to pay for 
 28.11  these costs using a source other than the general fund, the 
 28.12  commissioner shall include the change as a budget initiative in 
 28.13  the biennial or supplemental budget, and shall not change the 
 28.14  funding source through a forecast modification. 
 28.15     Sec. 12.  Minnesota Statutes 1998, section 270B.01, 
 28.16  subdivision 8, is amended to read: 
 28.17     Subd. 8.  [MINNESOTA TAX LAWS.] For purposes of this 
 28.18  chapter only, unless expressly stated otherwise, "Minnesota tax 
 28.19  laws" means the taxes, refunds, and fees administered by or paid 
 28.20  to the commissioner under chapters 115B (except taxes imposed 
 28.21  under sections 115B.21 to 115B.24), 289A (except taxes imposed 
 28.22  under sections 298.01, 298.015, and 298.24), 290, 290A, 291, 
 28.23  297A, and 297H and sections 295.50 to 295.59, or any similar 
 28.24  Indian tribal tax administered by the commissioner pursuant to 
 28.25  any tax agreement between the state and the Indian tribal 
 28.26  government, and includes any laws for the assessment, 
 28.27  collection, and enforcement of those taxes, refunds, and fees. 
 28.28     Sec. 13.  Minnesota Statutes 1999 Supplement, section 
 28.29  270B.14, subdivision 1, is amended to read: 
 28.30     Subdivision 1.  [DISCLOSURE TO COMMISSIONER OF HUMAN 
 28.31  SERVICES.] (a) On the request of the commissioner of human 
 28.32  services, the commissioner shall disclose return information 
 28.33  regarding taxes imposed by chapter 290, and claims for refunds 
 28.34  under chapter 290A, to the extent provided in paragraph (b) and 
 28.35  for the purposes set forth in paragraph (c). 
 28.36     (b) Data that may be disclosed are limited to data relating 
 29.1   to the identity, whereabouts, employment, income, and property 
 29.2   of a person owing or alleged to be owing an obligation of child 
 29.3   support. 
 29.4      (c) The commissioner of human services may request data 
 29.5   only for the purposes of carrying out the child support 
 29.6   enforcement program and to assist in the location of parents who 
 29.7   have, or appear to have, deserted their children.  Data received 
 29.8   may be used only as set forth in section 256.978. 
 29.9      (d) The commissioner shall provide the records and 
 29.10  information necessary to administer the supplemental housing 
 29.11  allowance to the commissioner of human services.  
 29.12     (e) At the request of the commissioner of human services, 
 29.13  the commissioner of revenue shall electronically match the 
 29.14  social security numbers and names of participants in the 
 29.15  telephone assistance plan operated under sections 237.69 to 
 29.16  237.711, with those of property tax refund filers, and determine 
 29.17  whether each participant's household income is within the 
 29.18  eligibility standards for the telephone assistance plan. 
 29.19     (f) The commissioner may provide records and information 
 29.20  collected under Minnesota Statutes 1998, sections 295.50 to 
 29.21  295.59 to the commissioner of human services for purposes of the 
 29.22  Medicaid Voluntary Contribution and Provider-Specific Tax 
 29.23  Amendments of 1991, Public Law Number 102-234.  Upon the written 
 29.24  agreement by the United States Department of Health and Human 
 29.25  Services to maintain the confidentiality of the data, the 
 29.26  commissioner may provide records and information collected under 
 29.27  Minnesota Statutes 1998, sections 295.50 to 295.59, to the 
 29.28  Health Care Financing Administration section of the United 
 29.29  States Department of Health and Human Services for purposes of 
 29.30  meeting federal reporting requirements.  
 29.31     (g) The commissioner may provide records and information to 
 29.32  the commissioner of human services as necessary to administer 
 29.33  the early refund of refundable tax credits. 
 29.34     (h) The commissioner may disclose information to the 
 29.35  commissioner of human services necessary to verify income for 
 29.36  eligibility and premium payment under the MinnesotaCare program, 
 30.1   under section 256L.05, subdivision 2. 
 30.2      (i) The commissioner may disclose information to the 
 30.3   commissioner of human services necessary to verify whether 
 30.4   applicants or recipients for the Minnesota family investment 
 30.5   program, general assistance, food stamps, and Minnesota 
 30.6   supplemental aid program have claimed refundable tax credits 
 30.7   under chapter 290 and the property tax refund under chapter 
 30.8   290A, and the amounts of the credits. 
 30.9      Sec. 14.  [TRANSFER.] 
 30.10     The commissioner of finance shall transfer money in the 
 30.11  health care access fund as of July 1, 2000, to the MinnesotaCare 
 30.12  subsidized health insurance account in the general fund. 
 30.13     Sec. 15.  [REPEALER.] 
 30.14     Minnesota Statutes 1998, sections 16A.724; 16A.76; 62T.10; 
 30.15  144.1484, subdivision 2; 295.50, subdivisions 1, 2, 2a, 3, 6, 
 30.16  6a, 7, 9b, 9c, 10a, 10b, 12b, 13, 14, and 15; 295.51; 295.52, 
 30.17  subdivisions 1, 1a, 2, 3, 4, 4a, and 6; 295.53, subdivisions 2, 
 30.18  3, and 4; 295.54; 295.55, subdivisions 1, 4, 5, 6, and 7; 
 30.19  295.56; 295.57, subdivisions 1, 2, and 3; 295.58; 295.581; 
 30.20  295.582; and 295.59; Minnesota Statutes 1999 Supplement, 
 30.21  sections 13.99, subdivision 86b; 295.50, subdivision 4; 295.52, 
 30.22  subdivisions 5 and 7; 295.53, subdivision 1; 295.55, 
 30.23  subdivisions 2 and 3; and 295.57, subdivision 4, are repealed.  
 30.24     Sec. 16.  [EFFECTIVE DATES.] 
 30.25     Sections 1 and 3 to 15 are effective July 1, 2000.  Section 
 30.26  2 is effective January 1, 2000.