as introduced - 82nd Legislature, 2001 1st Special Session (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to the financing and operation of government 1.3 in this state; making changes to income, sales and 1.4 use, property, motor vehicle sales, motor vehicle 1.5 registration, mortgage registry, deed, insurance 1.6 premiums, motor fuels, cigarette and tobacco, liquor, 1.7 lawful gambling, and special taxes; changing and 1.8 allowing tax credits and exemptions; conforming with 1.9 changes in federal income tax provisions; providing 1.10 for allocation of income; changing property tax 1.11 valuation, assessment, levy, classification, 1.12 homestead, exemption, review, appeal, and distribution 1.13 provisions; changing certain provisions relating to 1.14 biomass facilities; providing for uniform sales and 1.15 use tax administration; providing for taxation and 1.16 incentive payments on forest lands; providing for 1.17 electronic filing and payment of taxes; changing 1.18 procedures for disposition of seized contraband; 1.19 changing tax increment financing provisions; providing 1.20 for payments in lieu of taxes; changing calculation of 1.21 rent constituting property taxes for purposes of 1.22 property tax refunds; providing special authority to 1.23 certain political subdivisions; authorizing special 1.24 taxing districts; changing and clarifying tax 1.25 administration, collection, enforcement, interest, and 1.26 penalty provisions; transferring administration and 1.27 enforcement of the Unfair Cigarette Sales Act from the 1.28 commissioner of revenue to the commissioner of 1.29 commerce; changing revenue recapture provisions; 1.30 authorizing abatements and waivers of fees and certain 1.31 taxes in disaster areas; changing and imposing a fee; 1.32 changing debt collection provisions for student loans; 1.33 providing certain duties and powers to the 1.34 commissioner of revenue; authorizing publication of 1.35 names of certain delinquent taxpayers; authorizing 1.36 border city allocations; changing provisions relating 1.37 to tax-forfeited lands and providing for tax-forfeited 1.38 lands transfers; defining a lottery and other terms; 1.39 classifying data; requiring a report; imposing 1.40 penalties; appropriating money; amending Minnesota 1.41 Statutes 2000, sections 16A.152, subdivision 2; 1.42 16D.08, subdivision 2; 45.011, subdivision 1; 69.021, 1.43 subdivision 5, as amended; 84.922, by adding a 1.44 subdivision; 88.49, subdivisions 5, 9a; 88.491, 1.45 subdivision 2; 103D.905, subdivision 3; 115B.24, 1.46 subdivision 2; 123A.45, subdivisions 2, 6; 144.3831, 2.1 subdivision 2; 168.013, subdivision 1a; 168.017, 2.2 subdivision 3; 216B.2424, subdivision 5; 239.101, 2.3 subdivision 3; 270.06; 270.07, subdivision 3, by 2.4 adding a subdivision; 270.271, subdivisions 1, 3; 2.5 270.60, by adding a subdivision; 270.70, subdivision 2.6 13; 270.73, subdivision 1; 270.771; 270.78; 270A.03, 2.7 subdivisions 5, 7; 270A.11; 270B.02, subdivisions 2, 2.8 3; 270B.03, subdivision 6; 271.01, subdivision 5; 2.9 271.21, subdivision 2; 272.02, subdivisions 10, 22, by 2.10 adding a subdivision; 273.061, subdivisions 1, 2; 2.11 273.072, subdivision 1; 273.11, subdivisions 1a, 14, 2.12 by adding subdivisions; 273.1104, subdivision 2; 2.13 273.111, subdivision 4; 273.121; 273.124, subdivisions 2.14 1, 8, 13, 14; 274.01, subdivision 1; 274.13, 2.15 subdivision 1; 275.065, subdivisions 3, 5a, 6; 2.16 275.066; 275.07, subdivision 1; 275.62, subdivision 1; 2.17 276A.01, subdivision 3; 281.17; 282.01, subdivisions 2.18 1, 1b, 1c, 1d, 1e; 282.04, subdivision 2; 282.241; 2.19 287.08; 287.12; 287.20, subdivisions 2, 9; 287.21, 2.20 subdivision 1; 287.28; 289A.02, subdivision 7, by 2.21 adding a subdivision; 289A.12, subdivision 3; 289A.18, 2.22 subdivision 4, as amended; 289A.20, subdivisions 1, 2, 2.23 4; 289A.26, subdivision 2a; 289A.31, subdivision 7; 2.24 289A.50, subdivisions 2, 2a; 289A.55, subdivision 9; 2.25 289A.60, subdivisions 1, 2, 7, 21, as amended, by 2.26 adding a subdivision; 290.01, subdivisions 6b, 19, 2.27 19c, 19d, 31; 290.06, subdivisions 2c, 23; 290.067, 2.28 subdivisions 2, 2b; 290.0671, subdivisions 1, 7; 2.29 290.0675, subdivisions 1, 3; 290.0921, subdivision 3; 2.30 290.92, subdivision 23; 290A.03, subdivisions 12, 15; 2.31 290A.15; 291.005, subdivision 1; 295.55, subdivision 2.32 4; 296A.07, subdivision 4; 296A.08, subdivision 3; 2.33 296A.15, subdivisions 1, 7; 296A.16, subdivision 2; 2.34 296A.21, subdivisions 1, 4; 296A.24, subdivisions 1, 2.35 2; 297A.01, subdivision 5; 297A.07, subdivision 3; 2.36 297A.25, subdivisions 3, 11, 28; 297A.61, subdivisions 2.37 2, 3, 4, 6, 7, 9, 10, 14, 17, 19, 22, 23, by adding 2.38 subdivisions; 297A.64, subdivisions 3, 4; 297A.66, 2.39 subdivisions 1, 3; 297A.67, subdivisions 2, 8, 23, 24, 2.40 25, by adding subdivisions; 297A.68, subdivisions 2, 2.41 3, 5, 11, 13, 14, 18, 19, 25; 297A.69, subdivision 2; 2.42 297A.70, subdivisions 1, 2, 3, 4, 7, 8, 13, 14; 2.43 297A.71, subdivision 6; 297A.72, subdivision 1; 2.44 297A.75; 297A.77, subdivision 1; 297A.80; 297A.82, 2.45 subdivision 3, by adding a subdivision; 297A.86, 2.46 subdivision 1; 297A.89, subdivision 1; 297A.90, 2.47 subdivision 1; 297A.91; 297A.92, subdivision 2; 2.48 297A.94, as amended; 297A.99, subdivisions 7, 9, 11; 2.49 297B.03; 297E.02, subdivision 4; 297E.16, subdivisions 2.50 1, 2; 297F.04, subdivision 1; 297F.09, subdivision 7; 2.51 297F.13, subdivision 4; 297F.16, subdivision 4; 2.52 297F.20, subdivision 3; 297F.21, subdivisions 1, 2, 3; 2.53 297G.09, subdivision 6; 297G.15, subdivision 4; 2.54 297G.16, subdivisions 5, 7; 297G.20, subdivisions 3, 2.55 4; 297H.04, by adding a subdivision; 297H.06, by 2.56 adding a subdivision; 297I.35, subdivision 2; 297I.85, 2.57 subdivision 7; 325D.33, subdivision 8, by adding a 2.58 subdivision; 325D.405; 325D.415; 345.41; 349.19, 2.59 subdivision 2a; 461.12, by adding a subdivision; 2.60 469.040, subdivision 5; 469.169, by adding a 2.61 subdivision; 469.174, subdivisions 3, 10, 10a, 12; 2.62 469.175, subdivisions 1, 6b, by adding a subdivision; 2.63 469.176, subdivisions 1b, 1e, 3, 4g, by adding a 2.64 subdivision; 469.177, subdivision 1; 469.178, by 2.65 adding a subdivision; 469.1812, subdivision 2; 2.66 469.1813, subdivision 6; 469.202, subdivision 2; 2.67 473.843, subdivision 3; 473H.10, subdivision 3; 2.68 475.58, subdivision 1, as amended; 477A.12; 477A.14; 2.69 609.75, subdivision 1; Laws 1986, chapter 396, section 2.70 5; Laws 1992, chapter 499, article 7, section 31, as 2.71 amended; Laws 2000, chapter 490, article 11, section 3.1 26; proposing coding for new law in Minnesota 3.2 Statutes, chapters 12; 103B; 126C; 144F; 270; 272; 3.3 290C; 295; 296A; 297A; 297F; 297H; 383A; 471; 3.4 repealing Minnesota Statutes 2000, sections 16A.1521; 3.5 126C.30; 126C.31; 126C.32; 126C.33; 126C.34; 126C.35; 3.6 126C.36; 270.31; 270.32; 270.33; 270.34; 270.35; 3.7 270.36; 270.37; 270.38; 270.39; 275.078; 289A.60, 3.8 subdivision 3; 290.06, subdivision 25; 290.095, 3.9 subdivision 7; 290.23; 290.25; 290.31, subdivisions 2, 3.10 2a, 3, 4, 5, 19; 290A.04, subdivision 2j; 296A.16, 3.11 subdivision 6; 296A.24, subdivision 3; 297A.61, 3.12 subdivision 16; 297A.62, subdivision 2; 297A.64, 3.13 subdivision 1; 297A.68, subdivision 21; 297A.71, 3.14 subdivisions 2, 15, 16; 297B.032; 297E.16, subdivision 3.15 3; 297F.21, subdivision 4; 297G.20, subdivision 5; 3.16 297I.05, subdivision 8; 297I.30, subdivision 3; 3.17 325D.33, subdivision 5; Laws 1988, chapter 426, 3.18 section 1; Laws 1988, chapter 702, section 16; Laws 3.19 1992, chapter 511, article 2, section 52, as amended; 3.20 Laws 1996, chapter 471, article 8, section 45; Laws 3.21 1999, chapter 243, article 6, section 14; Laws 1999, 3.22 chapter 243, article 6, section 15; Laws 2000, chapter 3.23 490, article 6, section 17; Minnesota Rules, parts 3.24 8120.0200; 8120.0500; 8120.0700; 8120.0900; 8120.1300; 3.25 8120.1600; 8120.2000; 8120.2100; 8120.2200; 8120.2300; 3.26 8120.2500; 8120.2700; 8120.2800; 8120.3000; 8120.3200; 3.27 8120.4300; 8120.4400; 8120.4500; 8120.4600; 8120.4900; 3.28 8120.5000; 8120.5100; 8120.5300. 3.29 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.30 ARTICLE 1 3.31 PROPERTY TAXES 3.32 Section 1. [103B.253] [COUNTY LEVY AUTHORITY.] 3.33 Notwithstanding any other law to the contrary, a county 3.34 levying a tax under section 103B.241, 103B.245, or 103B.251 3.35 shall not include any taxes levied under those authorities in 3.36 the levy certified under section 275.07, subdivision 1, 3.37 paragraph (a). A county levying under section 103B.241, 3.38 103B.245, or 103B.251 shall separately certify that amount and 3.39 the auditor shall extend that levy as a special taxing district 3.40 levy under sections 275.066 and 275.07, subdivision 1, paragraph 3.41 (b). 3.42 [EFFECTIVE DATE.] This section is effective for taxes 3.43 levied in 2001, payable in 2002, and thereafter. 3.44 Sec. 2. Minnesota Statutes 2000, section 103D.905, 3.45 subdivision 3, is amended to read: 3.46 Subd. 3. [ADMINISTRATIVEGENERAL FUND.]An administrative3.47 A general fund, consisting of an ad valorem tax levy, may not 3.48 exceed0.024180.048 percent of taxable market value, or 3.49$125,000$250,000, whichever is less. The money in the fund 4.1 shall be used for general administrative expenses and for the 4.2 construction or implementation and maintenance of projects of 4.3 common benefit to the watershed district. The managers may make 4.4 an annual levy for theadministrativegeneral fund as provided 4.5 in section 103D.911. In addition to the annualadministrative4.6 general levy, the managers may annually levy a tax not to exceed 4.7 0.00798 percent of taxable market value for a period not to 4.8 exceed 15 consecutive years to pay the cost attributable to the 4.9 basic water management features of projects initiated by 4.10 petition of amunicipality ofpolitical subdivision within the 4.11 watershed district or by petition of at least 50 resident owners 4.12 whose property is within the watershed district. 4.13 [EFFECTIVE DATE.] This section is effective for taxes 4.14 levied in 2001, payable in 2002, and thereafter. 4.15 Sec. 3. Minnesota Statutes 2000, section 123A.45, 4.16 subdivision 2, is amended to read: 4.17 Subd. 2. [PETITION.] The petition must contain: 4.18 (a) A correct description of the area proposed for 4.19 detachment and annexation, including supporting data regarding 4.20 location and title to land to establish that the land is 4.21 adjoining a district. 4.22 (b) The reasons for the proposed change with facts showing 4.23 that the granting of the petition will not reduce the size of 4.24 any district to less than four sections, unless the district is 4.25 not operating a school within the district. 4.26 (c) Consent to the petition, if, at the time of the filing 4.27 of the petition, any part of the area proposed for detachment is 4.28 part of a district which maintains and operates a secondary 4.29 school within the district. Before the hearing, the consent of 4.30 the board of the district in which the area proposed for 4.31 detachment lies must be endorsed on the petition. 4.32 (d) An identification of the district to which annexation 4.33 is sought. 4.34 (e) Other information the petitioners may desire to affix. 4.35 (f) An acknowledgment by the petitioner. 4.36 (g) A description of whether bonded indebtedness will be 5.1 allocated according to subdivision 6, paragraph (b) or (c). 5.2 [EFFECTIVE DATE.] This section is effective the day 5.3 following final enactment for detachment and annexations 5.4 requests approved by a county board on or after that date. 5.5 Sec. 4. Minnesota Statutes 2000, section 123A.45, 5.6 subdivision 6, is amended to read: 5.7 Subd. 6. [TAXABLE PROPERTY.] (a) Upon the effective date 5.8 of the order, the detachment and annexation is effected. The 5.9 bonded indebtedness must be assigned to the detached and annexed 5.10 land under either paragraph (b) or (c). 5.11 (b) Unless specified separately under paragraph (c), all 5.12 taxable property in the area so detached and annexed remains 5.13 taxable for payment of any school purpose obligations already 5.14 authorized by or outstanding on the effective date of the order 5.15 against the district from which detached. The order does not 5.16 relieve such property from the obligation of any bonded debt 5.17 already incurred to which it was subject prior to the order. 5.18 All taxable property in the area so detached and annexed is 5.19 taxable for payment of any district obligations authorized on or 5.20 subsequent to the effective date of the order by the district to 5.21 which annexation is made. 5.22 (c) Alternatively, if the school board of the district in 5.23 which the area is proposed for detachment and the school board 5.24 of the district in which the area is proposed for annexation 5.25 agree, all taxable property in the area detached and annexed 5.26 shall be taxable by the school district to which the property is 5.27 annexed. Detached and annexed property is relieved from the 5.28 obligation of any bonded debt already incurred by the district 5.29 in which the area is detached and is obligated for any bonded 5.30 debt already incurred by the district to which the area is 5.31 annexed. 5.32 [EFFECTIVE DATE.] This sections is effective the day 5.33 following final enactment for detachment and annexations 5.34 requests approved by a county board on or after that date. 5.35 Sec. 5. [126C.455] [SWIMMING POOL LEVY.] 5.36 Each year, a school district with its home office located 6.1 in a county that has (i) a population density of ten or fewer 6.2 persons per square mile according to the 2000 census of 6.3 population; (ii) an international border; and (iii) more than 6.4 one school district within its boundaries, may levy for the net 6.5 operational costs of a swimming pool. The levy may not exceed 6.6 the net actual costs of operation of the swimming pool for the 6.7 previous year. Net actual costs are defined as operating costs 6.8 less any operating revenues and less any payments from other 6.9 local governmental units. 6.10 [EFFECTIVE DATE.] This section is effective for taxes 6.11 payable in 2002 and later. 6.12 Sec. 6. [144F.01] [EMERGENCY MEDICAL SERVICES SPECIAL 6.13 TAXING DISTRICTS.] 6.14 Subdivision 1. [POLITICAL SUBDIVISION DEFINED.] In this 6.15 section, "political subdivision" means a county, a statutory or 6.16 home rule charter city, or a township organized to provide town 6.17 government. 6.18 Subd. 2. [WHO MAY ESTABLISH.] Two or more political 6.19 subdivisions, or parts of them, may establish by resolution of 6.20 their governing bodies a special taxing district for emergency 6.21 medical services. The participating territory of a 6.22 participating political subdivision need not abut any other 6.23 participating territory to be in the special taxing district. 6.24 Subd. 3. [BOARD.] The special taxing district under this 6.25 section is governed by a board made up initially of 6.26 representatives of each participating political subdivision in 6.27 the proportions set out in the establishing resolution, subject 6.28 to change as provided in the district's charter, if any, or in 6.29 the district's bylaws. Each participant's representative serves 6.30 at the pleasure of that participant's governing body. 6.31 Subd. 4. [PROPERTY TAX LEVY AUTHORITY.] The district's 6.32 board may levy a tax on the taxable real and personal property 6.33 in the district. The ad valorem tax levy may not exceed 0.048 6.34 percent of the taxable market value of the district or $250,000, 6.35 whichever is less. The proceeds of the levy must be used as 6.36 provided in subdivision 5. The board shall certify the levy at 7.1 the times as provided under section 275.07. The board shall 7.2 provide the county with whatever information is necessary to 7.3 identify the property that is located within the district. If 7.4 the boundaries include a part of a parcel, the entire parcel 7.5 shall be included in the district. The county auditors must 7.6 spread, collect, and distribute the proceeds of the tax at the 7.7 same time and in the same manner as provided by law for all 7.8 other property taxes. 7.9 Subd. 5. [USE OF LEVY PROCEEDS.] The proceeds of property 7.10 taxes levied under this section must be used to support the 7.11 providing of out-of-hospital emergency medical services 7.12 including, but not limited to, first responder or rescue squads 7.13 recognized by the district, ambulance services licensed under 7.14 chapter 144E and recognized by the district, medical control 7.15 functions set out in chapter 144E, communications equipment and 7.16 systems, and programs of regional emergency medical services 7.17 authorized by regional boards described in section 144E.52. 7.18 Subd. 6. [ADVISORY COMMITTEE.] A special taxing district 7.19 board under this section must have an advisory committee to 7.20 advise the board on issues involving emergency medical services 7.21 and EMS communications. The committee's membership must be 7.22 comprised of representatives of first responders, ambulance 7.23 services, ambulance medical directors, and EMS communication 7.24 experts. The advisory committee members serve at the pleasure 7.25 of the appointing board. 7.26 Subd. 7. [POWERS.] (a) In addition to authority expressly 7.27 granted in this section, a special taxing district under this 7.28 section may exercise any power that may be exercised by any of 7.29 its participating political subdivisions, except that the board 7.30 may not incur debt. The special taxing district may only use 7.31 the power to do what is necessary or reasonable to support the 7.32 services set out in subdivision 5. 7.33 (b) Notwithstanding paragraph (a), the district may only 7.34 levy the taxes authorized in this section. 7.35 Subd. 8. [ADDITIONS AND WITHDRAWALS.] (a) Additional 7.36 eligible political subdivisions may be added to a special taxing 8.1 district under this section as provided by the board of the 8.2 district and agreed to in a resolution of the governing body of 8.3 the political subdivision proposed to be added. 8.4 (b) A political subdivision may withdraw from a special 8.5 taxing district under this section by resolution of its 8.6 governing body. The political subdivision must notify the board 8.7 of the special taxing district of the withdrawal by providing a 8.8 copy of the resolution at least one year in advance of the 8.9 proposed withdrawal. The taxable property of the withdrawing 8.10 member is subject to the property tax levy under subdivision 4 8.11 for the taxes payable year following the notice of the 8.12 withdrawal, unless the board and the withdrawing member agree 8.13 otherwise by action of their governing bodies. 8.14 (c) Notwithstanding subdivision 2, if the district is 8.15 comprised of only two political subdivisions and one of the 8.16 political subdivisions withdraws, the district can continue to 8.17 exist. 8.18 Subd. 9. [DISSOLUTION.] If the special taxing district is 8.19 dissolved, the assets and liabilities may be assigned to a 8.20 successor entity, if any, or otherwise disposed of for public 8.21 purposes as provided by law. 8.22 [EFFECTIVE DATE.] This section is effective for taxes 8.23 levied in 2002, payable in 2003, through taxes levied in 2007, 8.24 payable in 2008. 8.25 Sec. 7. Minnesota Statutes 2000, section 216B.2424, 8.26 subdivision 5, is amended to read: 8.27 Subd. 5. [MANDATE.] (a) A public utility, as defined in 8.28 section 216B.02, subdivision 4, that operates a nuclear-powered 8.29 electric generating plant within this state must construct and 8.30 operate, purchase, or contract to construct and operate (1) by 8.31 December 31, 1998, 50 megawatts of electric energy installed 8.32 capacity generated by farm-grown closed-loop biomass scheduled 8.33 to be operational by December 31, 2001; and (2) by December 31, 8.34 1998, an additional 75 megawatts of installed capacity so 8.35 generated scheduled to be operational by December 31, 2002. 8.36 (b) Of the 125 megawatts of biomass electricity installed 9.1 capacity required under this subdivision, no more than 50 9.2 megawatts of this capacity may be provided by a facility that 9.3 uses poultry litter as its primary fuel source and any such 9.4 facility: 9.5 (1) need not use biomass that complies with the definition 9.6 in subdivision 1; 9.7 (2) must enter into a contract with the public utility for 9.8 such capacity, that has an average purchase price per megawatt 9.9 hour over the life of the contract that is equal to or less than 9.10 the average purchase price per megawatt hour over the life of 9.11 the contract in contracts approved by the public utilities 9.12 commission before April 1, 2000, to satisfy the mandate of this 9.13 section, and file that contract with the public utilities 9.14 commission prior to September 1, 2000; and 9.15 (3) such capacity must be scheduled to be operational by 9.16 December 31, 2002. 9.17 (c) Of the total 125 megawatts of biomass electric energy 9.18 installed capacity required under this section, no more than 75 9.19 megawatts may be provided by a single project. 9.20 (d) Of the 75 megawatts of biomass electric energy 9.21 installed capacity required under paragraph (a), clause (2), no 9.22 more than 25 megawatts of this capacity may be provided by a St. 9.23 Paul district heating and cooling system cogeneration facility 9.24 utilizing waste wood as a primary fuel source. The St. Paul 9.25 district heating and cooling system cogeneration facility need 9.26 not use biomass that complies with the definition in subdivision 9.27 1. 9.28 (e) The public utility must accept and consider on an equal 9.29 basis with other biomass proposals: 9.30 (1) a proposal to satisfy the requirements of this section 9.31 that includes a project that exceeds the megawatt capacity 9.32 requirements of either paragraph (a), clause (1) or (2), and 9.33 that proposes to sell the excess capacity to the public utility 9.34 or to other purchasers; and 9.35 (2) a proposal for a new facility to satisfy more than ten 9.36 but not more than 20 megawatts of the electrical generation 10.1 requirements by a small business-sponsored independent power 10.2 producer facility to be located within the northern quarter of 10.3 the state, which means the area located north of Constitutional 10.4 Route No. 8 as described in section 161.114, subdivision 2, and 10.5 that utilizes biomass residue wood, sawdust, bark, chipped wood, 10.6 or brush to generate electricity. A facility described in this 10.7 clause is not required to utilize biomass complying with the 10.8 definition in subdivision 1, but must have the capacity required 10.9 by this clause operational by December 31, 2002. 10.10(e)(f) If a public utility files a contract with the 10.11 commission for electric energy installed capacity that uses 10.12 poultry litter as its primary fuel source, the commission must 10.13 do a preliminary review of the contract to determine if it meets 10.14 the purchase price criteria provided in paragraph (b), clause 10.15 (2), of this subdivision. The commission shall perform its 10.16 review and advise the parties of its determination within 30 10.17 days of filing of such a contract by a public utility. A public 10.18 utility may submit by September 1, 2000, a revised contract to 10.19 address the commission's preliminary determination. 10.20(f)(g) The commission shall finally approve, modify, or 10.21 disapprove no later than July 1, 2001, all contracts submitted 10.22 by a public utility as of September 1, 2000, to meet the mandate 10.23 set forth in this subdivision. 10.24(g)(h) If a public utility subject to this section 10.25 exercises an option to increase the generating capacity of a 10.26 project in a contract approved by the commission prior to April 10.27 25, 2000, to satisfy the mandate in this subdivision, the public 10.28 utility must notify the commission by September 1, 2000, that it 10.29 has exercised the option and include in the notice the amount of 10.30 additional megawatts to be generated under the option 10.31 exercised. Any review by the commission of the project after 10.32 exercise of such an option shall be based on the same criteria 10.33 used to review the existing contract. 10.34 (i) A facility specified in this subdivision qualifies for 10.35 exemption from property taxation under section 272.02, 10.36 subdivision 43. 11.1 [EFFECTIVE DATE.] This section is effective the day 11.2 following final enactment. 11.3 Sec. 8. Minnesota Statutes 2000, section 271.01, 11.4 subdivision 5, is amended to read: 11.5 Subd. 5. [JURISDICTION.] The tax court shall have 11.6 statewide jurisdiction. Except for an appeal to the supreme 11.7 court or any other appeal allowed under this subdivision, the 11.8 tax court shall be the sole, exclusive, and final authority for 11.9 the hearing and determination of all questions of law and fact 11.10 arising under the tax laws of the state, as defined in this 11.11 subdivision, in those cases that have been appealed to the tax 11.12 court and in any case that has been transferred by the district 11.13 court to the tax court. The tax court shall have no 11.14 jurisdiction in any case that does not arise under the tax laws 11.15 of the state or in any criminal case or in any case determining 11.16 or granting title to real property or in any case that is under 11.17 the probate jurisdiction of the district court. The small 11.18 claims division of the tax court shall have no jurisdiction in 11.19 any case dealing with property valuation or assessment for 11.20 property tax purposes until the taxpayer has appealed the 11.21 valuation or assessment to the county board of equalization, and 11.22 in those towns and cities which have not transferred their 11.23 duties to the county, the town or city board of equalization, 11.24 except for: (i) those taxpayers whose original assessments are 11.25 determined by the commissioner of revenue;and(ii) those 11.26 taxpayers appealing a denial of a current year application for 11.27 the homestead classification for their property and the denial 11.28 was not reflected on a valuation notice issued in the year; and 11.29 (iii) any case dealing with property valuation, assessment, or 11.30 taxation for property tax purposes and meeting the 11.31 jurisdictional requirements of section 271.21, subdivision 2, 11.32 paragraph (c). The tax court shall have no jurisdiction in any 11.33 case involving an order of the state board of equalization 11.34 unless a taxpayer contests the valuation of property. Laws 11.35 governing taxes, aids, and related matters administered by the 11.36 commissioner of revenue, laws dealing with property valuation, 12.1 assessment or taxation of property for property tax purposes, 12.2 and any other laws that contain provisions authorizing review of 12.3 taxes, aids, and related matters by the tax court shall be 12.4 considered tax laws of this state subject to the jurisdiction of 12.5 the tax court. This subdivision shall not be construed to 12.6 prevent an appeal, as provided by law, to an administrative 12.7 agency, board of equalization, review under section 274.13, 12.8 subdivision 1c, or to the commissioner of revenue. Wherever 12.9 used in this chapter, the term commissioner shall mean the 12.10 commissioner of revenue, unless otherwise specified. 12.11 Sec. 9. Minnesota Statutes 2000, section 271.21, 12.12 subdivision 2, is amended to read: 12.13 Subd. 2. [JURISDICTION.] At the election of the taxpayer, 12.14 the small claims division shall have jurisdiction only in the 12.15 following matters: 12.16 (a) cases involving valuation, assessment, or taxation of 12.17 real or personal property, if the taxpayer has satisfied the 12.18 requirements of section 271.01, subdivision 5, and: (i) the 12.19 issue is a denial of a current year application for the 12.20 homestead classification for the taxpayer's property and the 12.21 denial was not reflected on a valuation notice issued in the 12.22 year; or (ii) in the case of nonhomestead property, the 12.23 assessor's estimated market value is less than $100,000;or12.24 (b) any other case concerning the tax laws as defined in 12.25 section 271.01, subdivision 5, in which the amount in 12.26 controversy does not exceed $5,000, including penalty and 12.27 interest; or 12.28 (c) cases involving valuation, assessment, or taxation of 12.29 real or personal property if: 12.30 (i) the issue is a denial of a current year application for 12.31 the homestead classification for the taxpayer's property; 12.32 (ii) only one parcel is included in the petition, the 12.33 entire parcel is classified as homestead 1a or 1b pursuant to 12.34 section 273.13, and the parcel contains no more than one 12.35 dwelling unit; or 12.36 (iii) the assessor's estimated market value of the property 13.1 included in the petition is less than $300,000. 13.2 Sec. 10. Minnesota Statutes 2000, section 272.02, 13.3 subdivision 22, is amended to read: 13.4 Subd. 22. [WIND ENERGY CONVERSION SYSTEMS.] (a) Small 13.5 scale wind energy conversion systems installed after January 1, 13.6 1991, and used as an electric power source are exempt. 13.7 "Small scale wind energy conversion systems" are wind 13.8 energy conversion systems, as defined in section 216C.06, 13.9 subdivision 12, including the foundation or support pad, which 13.10 (i) are used as an electric power source; (ii) are located 13.11 within one county and owned by the same owner; and (iii) produce 13.12 two megawatts or less of electricity as measured by nameplate 13.13 ratings. 13.14 (b) Medium scale wind energy conversion systems installed 13.15 after January 1, 1991, are treated as follows: (i) the 13.16 foundation and support pad are taxable; (ii) the associated 13.17 supporting and protective structures are exempt for the first 13.18 five assessment years after they have been constructed, and 13.19 thereafter, 30 percent of the market value of the associated 13.20 supporting and protective structures are taxable; and (iii) the 13.21 turbines, blades, transformers, and its related equipment, are 13.22 exempt. "Medium scale wind energy conversion systems" are wind 13.23 energy conversion systems as defined in section 216C.06, 13.24 subdivision 12, including the foundation or support pad, which: 13.25 (i) are used as an electric power source; (ii) are located 13.26 within one county and owned by the same owner; and (iii) produce 13.27 more than two but equal to or less than 12 megawatts of energy 13.28 as measured by nameplate ratings. 13.29 (c) Large scale wind energy conversion systems installed 13.30 after January 1, 1991, are treated as follows: 25 percent of 13.31 the market value of all property is taxable, including (i) the 13.32 foundation and support pad; (ii) the associated supporting and 13.33 protective structures; and (iii) the turbines, blades, 13.34 transformers, and its related equipment. "Large scale wind 13.35 energy conversion systems" are wind energy conversion systems as 13.36 defined in section 216C.06, subdivision 12, including the 14.1 foundation or support pad, which (i) are used as an electric 14.2 power source; and (ii) produce more than 12 megawatts of energy 14.3 as measured by nameplate ratings. 14.4 (d) The total size of a wind energy conversion system under 14.5 this subdivision shall be determined according to this paragraph. 14.6 Unless the systems are interconnected with different 14.7 distribution systems, the nameplate capacity of one wind energy 14.8 conversion system shall be combined with the nameplate capacity 14.9 of any other wind energy conversion system that is: 14.10 (1) located within five miles of the wind energy conversion 14.11 system; 14.12 (2) constructed within the same calendar year as the wind 14.13 energy conversion system; and 14.14 (3) under common ownership. 14.15 In the case of a dispute, the commissioner of commerce 14.16 shall determine the total size of the system, and shall draw all 14.17 reasonable inferences in favor of combining the systems. 14.18 (e) In making a determination under paragraph (d), the 14.19 commissioner of commerce may determine that two wind energy 14.20 conversion systems are under common ownership when the 14.21 underlying ownership structure contains similar persons or 14.22 entities, even if the ownership shares differ between the two 14.23 systems. Wind energy conversion systems are not under common 14.24 ownership solely because the same person or entity provided 14.25 equity financing for the systems. 14.26 [EFFECTIVE DATE.] This section is effective for wind energy 14.27 conversion systems installed after January 1, 2001. 14.28 Sec. 11. Minnesota Statutes 2000, section 272.02, is 14.29 amended by adding a subdivision to read: 14.30 Subd. 46. [RESIDENTIAL BUILDINGS ON TEMPORARY SITES.] A 14.31 newly constructed building that is situated on real property is 14.32 exempt if it is: 14.33 (1) intended for future residential occupancy; 14.34 (2) on a temporary foundation and intended to be moved; 14.35 (3) not used as a model or for any other business purposes; 14.36 (4) not connected to any utilities; and 15.1 (5) located on land that will not be sold with the building. 15.2 The exemption under this subdivision is allowable for only 15.3 one assessment year after the date of the initial construction 15.4 of the building. 15.5 [EFFECTIVE DATE.] This section is effective for assessment 15.6 year 2001 and thereafter. 15.7 Sec. 12. [272.028] [PAYMENT IN LIEU OF PERSONAL PROPERTY 15.8 TAX; WIND GENERATION FACILITIES.] 15.9 A developer of a new or existing medium or large scale wind 15.10 energy conversion system, as defined under section 272.02, 15.11 subdivision 22, paragraphs (b) and (c), may negotiate with the 15.12 city or town and the county where the wind energy conversion 15.13 system is located to establish a payment in lieu of tax on 15.14 personal property used to generate electric power. The in lieu 15.15 payment is to provide fees or compensation to the host 15.16 jurisdictions to maintain public infrastructure and services. 15.17 The payment in lieu of personal property tax may be based on 15.18 production capacity, historical production, or other factors 15.19 agreed upon by the parties. The payment in lieu of tax 15.20 agreement must be signed by the parties and filed with the 15.21 commissioner of revenue and the county recorder. Upon execution 15.22 and filing of the agreement, the personal property to which the 15.23 in lieu payment applies shall be deemed exempt from tax under 15.24 section 272.02, subdivision 22, paragraphs (b) and (c). This 15.25 exemption shall be effective for the assessment year in which 15.26 the in lieu payment is agreed upon and shall remain exempt for 15.27 the same duration as the in lieu payments are in effect. 15.28 Sec. 13. Minnesota Statutes 2000, section 273.11, 15.29 subdivision 1a, is amended to read: 15.30 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 15.31 property classified as agricultural homestead or nonhomestead, 15.32 residential homestead or nonhomestead, or noncommercial seasonal 15.33 recreational residential, the assessor shall compare the value 15.34 withthatthe taxable portion of the value determined in the 15.35 preceding assessment.The amount of the increase entered in the15.36current assessment shall not exceed the greater of (1) 8.516.1percent of the value in the preceding assessment, or (2) 1516.2percent of the difference between the current assessment and the16.3preceding assessment.16.4 For assessment year 2002, the amount of the increase shall 16.5 not exceed the greater of (1) 10 percent of the value in the 16.6 preceding assessment, or (2) 15 percent of the difference 16.7 between the current assessment and the preceding assessment. 16.8 For assessment year 2003, the amount of the increase shall 16.9 not exceed the greater of (1) 12 percent of the value in the 16.10 preceding assessment, or (2) 20 percent of the difference 16.11 between the current assessment and the preceding assessment. 16.12 For assessment year 2004, the amount of the increase shall 16.13 not exceed the greater of (1) 15 percent of the value in the 16.14 preceding assessment, or (2) 25 percent of the difference 16.15 between the current assessment and the preceding assessment. 16.16 For assessment year 2005, the amount of the increase shall 16.17 not exceed the greater of (1) 15 percent of the value in the 16.18 preceding assessment, or (2) 33 percent of the difference 16.19 between the current assessment and the preceding assessment. 16.20 For assessment year 2006, the amount of the increase shall 16.21 not exceed the greater of (1) 15 percent of the value in the 16.22 preceding assessment, or (2) 50 percent of the difference 16.23 between the current assessment and the preceding assessment. 16.24 This limitation shall not apply to increases in value due 16.25 to improvements. For purposes of this subdivision, the term 16.26 "assessment" means the value prior to any exclusion under 16.27 subdivision 16. 16.28 The provisions of this subdivision shall be in effectonly16.29 through assessment year20012006 as provided in this 16.30 subdivision. 16.31 For purposes of the assessment/sales ratio study conducted 16.32 under section 127A.48, and the computation of state aids paid 16.33 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 16.34 477A, market values and net tax capacities determined under this 16.35 subdivision and subdivision 16, shall be used. 16.36 [EFFECTIVE DATE.] This section is effective the day 17.1 following final enactment. 17.2 Sec. 14. Minnesota Statutes 2000, section 273.11, 17.3 subdivision 14, is amended to read: 17.4 Subd. 14. [VACANT LAND PLATTEDON OR AFTERBEFORE AUGUST 17.5 1,19912001.] (a) All land plattedon or afterbefore August 1, 17.619912001, and not improved with a permanent structure, shall be 17.7 assessed as provided in this subdivision. The assessor shall 17.8 determine the market value of each individual lot based upon the 17.9 highest and best use of the property as unplatted land. In 17.10 establishing the market value of the property, the assessor 17.11 shall consider the sale price of the unplatted land or 17.12 comparable sales of unplatted land of similar use and similar 17.13 availability of public utilities. 17.14 (b) The market value determined in paragraph (a) shall be 17.15 increased as follows for each of the three assessment years 17.16 immediately following the final approval of the plat: one-third 17.17 of the difference between the property's unplatted market value 17.18 as determined under paragraph (a) and the market value based 17.19 upon the highest and best use of the land as platted property 17.20 shall be added in each of the three subsequent assessment years. 17.21 (c) Any increase in market value after the first assessment 17.22 year following the plat's final approval shall be added to the 17.23 property's market value in the next assessment year. 17.24 Notwithstanding paragraph (b), if construction begins before the 17.25 expiration of the three years in paragraph (b), that lot shall 17.26 be eligible for revaluation in the next assessment year. The 17.27 market value of a platted lot determined under this subdivision 17.28 shall not exceed the value of that lot based upon the highest 17.29 and best use of the property as platted land. 17.30 [EFFECTIVE DATE.] This section is effective for land 17.31 platted after July 31, 2001. 17.32 Sec. 15. Minnesota Statutes 2000, section 273.11, is 17.33 amended by adding a subdivision to read: 17.34 Subd. 14a. [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 17.35 2001; LOCATED IN METROPOLITAN COUNTIES.] (a) All land platted on 17.36 or after August 1, 2001, located in a metropolitan county, and 18.1 not improved with a permanent structure, shall be assessed as 18.2 provided in this subdivision. The assessor shall determine the 18.3 market value of each individual lot based upon the highest and 18.4 best use of the property as unplatted land. In establishing the 18.5 market value of the property, the assessor shall consider the 18.6 sale price of the unplatted land or comparable sales of 18.7 unplatted land of similar use and similar availability of public 18.8 utilities. 18.9 (b) The market value determined in paragraph (a) shall be 18.10 increased as follows for each of the three assessment years 18.11 immediately following the final approval of the plat: one-third 18.12 of the difference between the property's unplatted market value 18.13 as determined under paragraph (a) and the market value based 18.14 upon the highest and best use of the land as platted property 18.15 shall be added in each of the three subsequent assessment years. 18.16 (c) Any increase in market value after the first assessment 18.17 year following the plat's final approval shall be added to the 18.18 property's market value in the next assessment year. 18.19 Notwithstanding paragraph (b), if construction begins before the 18.20 expiration of the three years in paragraph (b), that lot shall 18.21 be eligible for revaluation in the next assessment year. The 18.22 market value of a platted lot determined under this subdivision 18.23 shall not exceed the value of that lot based upon the highest 18.24 and best use of the property as platted land. 18.25 (d) For purposes of this section, "metropolitan county" 18.26 means the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, 18.27 Scott, and Washington. 18.28 [EFFECTIVE DATE.] This section is effective for land 18.29 platted after July 31, 2001. 18.30 Sec. 16. Minnesota Statutes 2000, section 273.11, is 18.31 amended by adding a subdivision to read: 18.32 Subd. 14b. [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 18.33 2001; LOCATED IN NONMETROPOLITAN COUNTIES.] (a) All land platted 18.34 on or after August 1, 2001, located in a nonmetropolitan county, 18.35 and not improved with a permanent structure, shall be assessed 18.36 as provided in this subdivision. The assessor shall determine 19.1 the market value of each individual lot based upon the highest 19.2 and best use of the property as unplatted land. In establishing 19.3 the market value of the property, the assessor shall consider 19.4 the sale price of the unplatted land or comparable sales of 19.5 unplatted land of similar use and similar availability of public 19.6 utilities. 19.7 (b) The market value determined in paragraph (a) shall be 19.8 increased as follows for each of the five assessment years 19.9 immediately following the final approval of the plat: one-fifth 19.10 of the difference between the property's unplatted market value 19.11 as determined under paragraph (a) and the market value based 19.12 upon the highest and best use of the land as platted property 19.13 shall be added in each of the five subsequent assessment years. 19.14 (c) Any increase in market value after the first assessment 19.15 year following the plat's final approval shall be added to the 19.16 property's market value in the next assessment year. 19.17 Notwithstanding paragraph (b), if construction begins before the 19.18 expiration of the five years in paragraph (b), that lot shall be 19.19 eligible for revaluation in the next assessment year. The 19.20 market value of a platted lot determined under this subdivision 19.21 shall not exceed the value of that lot based upon the highest 19.22 and best use of the property as platted land. 19.23 [EFFECTIVE DATE.] This section is effective for land 19.24 platted after July 31, 2001. 19.25 Sec. 17. Minnesota Statutes 2000, section 273.124, 19.26 subdivision 1, is amended to read: 19.27 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 19.28 that is occupied and used for the purposes of a homestead by its 19.29 owner, who must be a Minnesota resident, is a residential 19.30 homestead. 19.31 Agricultural land, as defined in section 273.13, 19.32 subdivision 23, that is occupied and used as a homestead by its 19.33 owner, who must be a Minnesota resident, is an agricultural 19.34 homestead. 19.35 Dates for establishment of a homestead and homestead 19.36 treatment provided to particular types of property are as 20.1 provided in this section. 20.2 Property held by a trustee under a trust is eligible for 20.3 homestead classification if the requirements under this chapter 20.4 are satisfied. 20.5 The assessor shall require proof, as provided in 20.6 subdivision 13, of the facts upon which classification as a 20.7 homestead may be determined. Notwithstanding any other law, the 20.8 assessor may at any time require a homestead application to be 20.9 filed in order to verify that any property classified as a 20.10 homestead continues to be eligible for homestead status. 20.11 Notwithstanding any other law to the contrary, the department of 20.12 revenue may, upon request from an assessor, verify whether an 20.13 individual who is requesting or receiving homestead 20.14 classification has filed a Minnesota income tax return as a 20.15 resident for the most recent taxable year for which the 20.16 information is available. 20.17 When there is a name change or a transfer of homestead 20.18 property, the assessor may reclassify the property in the next 20.19 assessment unless a homestead application is filed to verify 20.20 that the property continues to qualify for homestead 20.21 classification. 20.22 (b) For purposes of this section, homestead property shall 20.23 include property which is used for purposes of the homestead but 20.24 is separated from the homestead by a road, street, lot, 20.25 waterway, or other similar intervening property. The term "used 20.26 for purposes of the homestead" shall include but not be limited 20.27 to uses for gardens, garages, or other outbuildings commonly 20.28 associated with a homestead, but shall not include vacant land 20.29 held primarily for future development. In order to receive 20.30 homestead treatment for the noncontiguous property, the owner 20.31 must use the property for the purposes of the homestead, and 20.32 must apply to the assessor, both by the deadlines given in 20.33 subdivision 9. After initial qualification for the homestead 20.34 treatment, additional applications for subsequent years are not 20.35 required. 20.36 (c) Residential real estate that is occupied and used for 21.1 purposes of a homestead by a relative of the owner is a 21.2 homestead but only to the extent of the homestead treatment that 21.3 would be provided if the related owner occupied the property. 21.4 For purposes of this paragraph and paragraph (g), "relative" 21.5 means a parent, stepparent, child, stepchild, grandparent, 21.6 grandchild, brother, sister, uncle, aunt, nephew, or niece. 21.7 This relationship may be by blood or marriage. Property that 21.8 has been classified as seasonal recreational residential 21.9 property at any time during which it has been owned by the 21.10 current owner or spouse of the current owner will not be 21.11 reclassified as a homestead unless it is occupied as a homestead 21.12 by the owner; this prohibition also applies to property that, in 21.13 the absence of this paragraph, would have been classified as 21.14 seasonal recreational residential property at the time when the 21.15 residence was constructed. Neither the related occupant nor the 21.16 owner of the property may claim a property tax refund under 21.17 chapter 290A for a homestead occupied by a relative. In the 21.18 case of a residence located on agricultural land, only the 21.19 house, garage, and immediately surrounding one acre of land 21.20 shall be classified as a homestead under this paragraph, except 21.21 as provided in paragraph (d). 21.22 (d) Agricultural property that is occupied and used for 21.23 purposes of a homestead by a relative of the owner, is a 21.24 homestead, only to the extent of the homestead treatment that 21.25 would be provided if the related owner occupied the property, 21.26 and only if all of the following criteria are met: 21.27 (1) the relative who is occupying the agricultural property 21.28 is a son, daughter, grandson, granddaughter, father, or mother 21.29 of the owner of the agricultural property or a son, daughter, 21.30 grandson, or granddaughter of the spouse of the owner of the 21.31 agricultural property; 21.32 (2) the owner of the agricultural property must be a 21.33 Minnesota resident; 21.34 (3) the owner of the agricultural property must not receive 21.35 homestead treatment on any other agricultural property in 21.36 Minnesota; and 22.1 (4) the owner of the agricultural property is limited to 22.2 only one agricultural homestead per family under this paragraph. 22.3 Neither the related occupant nor the owner of the property 22.4 may claim a property tax refund under chapter 290A for a 22.5 homestead occupied by a relative qualifying under this 22.6 paragraph. For purposes of this paragraph, "agricultural 22.7 property" means the house, garage, other farm buildings and 22.8 structures, and agricultural land. 22.9 Application must be made to the assessor by the owner of 22.10 the agricultural property to receive homestead benefits under 22.11 this paragraph. The assessor may require the necessary proof 22.12 that the requirements under this paragraph have been met. 22.13 (e) In the case of property owned by a property owner who 22.14 is married, the assessor must not deny homestead treatment in 22.15 whole or in part if only one of the spouses occupies the 22.16 property and the other spouse is absent due to: (1) marriage 22.17 dissolution proceedings, (2) legal separation, (3) employment or 22.18 self-employment in another location, or (4) other personal 22.19 circumstances causing the spouses to live separately, not 22.20 including an intent to obtain two homestead classifications for 22.21 property tax purposes. To qualify under clause (3), the 22.22 spouse's place of employment or self-employment must be at least 22.23 50 miles distant from the other spouse's place of employment, 22.24 and the homesteads must be at least 50 miles distant from each 22.25 other. Homestead treatment, in whole or in part, shall not be 22.26 denied to the owner's spouse who previously occupied the 22.27 residence with the owner if the absence of the owner is due to 22.28 one of the exceptions provided in this paragraph. 22.29 (f) The assessor must not deny homestead treatment in whole 22.30 or in part if: 22.31 (1) in the case of a property owner who is not married, the 22.32 owner is absent due to residence in a nursing homeor, boarding 22.33 care facility, or an elderly assisted living facility property 22.34 as defined in section 273.13, subdivision 25a, and the property 22.35 is not otherwise occupied; or 22.36 (2) in the case of a property owner who is married, the 23.1 owner or the owner's spouse or both are absent due to residence 23.2 in a nursing homeor, boarding care facility, or an elderly 23.3 assisted living facility property as defined in section 273.13, 23.4 subdivision 25a, and the property is not occupied or is occupied 23.5 only by the owner's spouse. 23.6 (g) If an individual is purchasing property with the intent 23.7 of claiming it as a homestead and is required by the terms of 23.8 the financing agreement to have a relative shown on the deed as 23.9 a coowner, the assessor shall allow a full homestead 23.10 classification. This provision only applies to first-time 23.11 purchasers, whether married or single, or to a person who had 23.12 previously been married and is purchasing as a single individual 23.13 for the first time. The application for homestead benefits must 23.14 be on a form prescribed by the commissioner and must contain the 23.15 data necessary for the assessor to determine if full homestead 23.16 benefits are warranted. 23.17 (h) If residential or agricultural real estate is occupied 23.18 and used for purposes of a homestead by a child of a deceased 23.19 owner and the property is subject to jurisdiction of probate 23.20 court, the child shall receive relative homestead classification 23.21 under paragraph (c) or (d) to the same extent they would be 23.22 entitled to it if the owner was still living, until the probate 23.23 is completed. For purposes of this paragraph, "child" includes 23.24 a relationship by blood or by marriage. 23.25 [EFFECTIVE DATE.] This section is effective for taxes 23.26 levied in 2001, payable in 2002, and thereafter. 23.27 Sec. 18. Minnesota Statutes 2000, section 273.124, 23.28 subdivision 8, is amended to read: 23.29 Subd. 8. [HOMESTEAD OWNED BY OR LEASED TO FAMILY FARM 23.30 CORPORATION, JOINT FAMILY FARM VENTURE, LIMITED LIABILITY 23.31 COMPANY, OR PARTNERSHIP.] (a) Each family farm corporation, each 23.32 joint family farm venture, each limited liability company, and 23.33 each partnership operating a family farm is entitled to class 1b 23.34 under section 273.13, subdivision 22, paragraph (b), or class 2a 23.35 assessment for one homestead occupied by a shareholder, member, 23.36 or partner thereof who is residing on the landexcept as24.1provided in subdivision 14, paragraph (g), and actively engaged 24.2 in farming of the land owned by the family farm corporation, 24.3 joint family farm venture, limited liability company, or 24.4 partnership operating a family farm. Homestead treatment 24.5 applies even if legal title to the property is in the name of 24.6 the family farm corporation, joint family farm venture, limited 24.7 liability company, or partnership operating the family farm, and 24.8 not in the name of the person residing on it. 24.9 "Family farm corporation," "family farm," and "farm24.10 partnership operating a family farm" have the meanings given in 24.11 section 500.24, except that the number of allowable 24.12 shareholders, members, or partners under this subdivision shall 24.13 not exceed 12. "Limited liability company" has the meaning 24.14 contained insectionsections 322B.03, subdivision 28, and 24.15 500.24, subdivision 2, paragraphs (l) and (m). "Joint family 24.16 farm venture" means a cooperative agreement among two or more 24.17 farm enterprises authorized to operate a family farmlandunder 24.18 section 500.24. 24.19 (b) In addition to property specified in paragraph (a), any 24.20 other residences owned by family farm corporations, joint family 24.21 farm ventures, limited liability companies, or 24.22 partnerships operating a family farm described in paragraph (a) 24.23 which are located on agricultural land and occupied as 24.24 homesteads by its shareholders, members, or partners who are 24.25 actively engaged in farming on behalf ofthethat corporation, 24.26 joint farm venture, limited liability company, or partnership 24.27 must also be assessed as class 2a property or as class 1b 24.28 property under section 273.13, subdivision 22, paragraph (b). 24.29 (c) Agricultural property that is owned by a member, 24.30 partner, or shareholder of a family farm corporation or 24.31 joint family farm venture,as defined in paragraph (a), or by a24.32member of alimited liability company, or by apartner in a24.33 partnership operating a family farm and leased to the family 24.34 farm corporationby the shareholder, or to a member of a, 24.35 limited liability company, orto thepartnershipby the partner24.36 operating a family farm, or joint farm venture, as defined in 25.1 paragraph (a), is eligible for classification as class 1b or 25.2 class 2a under section 273.13,subdivision 22, paragraph (b), or25.3class 2a under section 273.13, subdivision 23, paragraph (a),if 25.4 the owner is actually residing on the propertyexcept as25.5provided in subdivision 14, paragraph (g), and is actually 25.6 engaged in farming the land on behalf ofthethat corporation, 25.7 joint farm venture, limited liability company, or partnership. 25.8 This paragraph applies without regard to any legal possession 25.9 rights of the family farm corporation, joint family farm 25.10 venture, limited liability company, or partnership operating a 25.11 family farm under the lease. 25.12 [EFFECTIVE DATE.] This section is effective for the 2001 25.13 assessment, taxes payable in 2002, and thereafter. 25.14 Sec. 19. Minnesota Statutes 2000, section 273.124, 25.15 subdivision 13, is amended to read: 25.16 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 25.17 the homestead requirements under subdivision 1 must file a 25.18 homestead application with the county assessor to initially 25.19 obtain homestead classification. 25.20 (b) On or before January 2, 1993, each county assessor 25.21 shall mail a homestead application to the owner of each parcel 25.22 of property within the county which was classified as homestead 25.23 for the 1992 assessment year. The format and contents of a 25.24 uniform homestead application shall be prescribed by the 25.25 commissioner of revenue. The commissioner shall consult with 25.26 the chairs of the house and senate tax committees on the 25.27 contents of the homestead application form. The application 25.28 must clearly inform the taxpayer that this application must be 25.29 signed by all owners who occupy the property or by the 25.30 qualifying relative and returned to the county assessor in order 25.31 for the property to continue receiving homestead treatment. The 25.32 envelope containing the homestead application shall clearly 25.33 identify its contents and alert the taxpayer of its necessary 25.34 immediate response. 25.35 (c) Every property owner applying for homestead 25.36 classification must furnish to the county assessor the social 26.1 security number of each occupant who is listed as an owner of 26.2 the property on the deed of record, the name and address of each 26.3 owner who does not occupy the property, and the name and social 26.4 security number of each owner's spouse who occupies the 26.5 property. The application must be signed by each owner who 26.6 occupies the property and by each owner's spouse who occupies 26.7 the property, or, in the case of property that qualifies as a 26.8 homestead under subdivision 1, paragraph (c), by the qualifying 26.9 relative. 26.10 If a property owner occupies a homestead, the property 26.11 owner's spouse may not claim another property as a homestead 26.12 unless the property owner and the property owner's spouse file 26.13 with the assessor an affidavit or other proof required by the 26.14 assessor stating that the property qualifies as a homestead 26.15 under subdivision 1, paragraph (e). 26.16 Owners or spouses occupying residences owned by their 26.17 spouses and previously occupied with the other spouse, either of 26.18 whom fail to include the other spouse's name and social security 26.19 number on the homestead application or provide the affidavits or 26.20 other proof requested, will be deemed to have elected to receive 26.21 only partial homestead treatment of their residence. The 26.22 remainder of the residence will be classified as nonhomestead 26.23 residential. When an owner or spouse's name and social security 26.24 number appear on homestead applications for two separate 26.25 residences and only one application is signed, the owner or 26.26 spouse will be deemed to have elected to homestead the residence 26.27 for which the application was signed. 26.28 The social security numbers or affidavits or other proofs 26.29 of the property owners and spouses are private data on 26.30 individuals as defined by section 13.02, subdivision 12, but, 26.31 notwithstanding that section, the private data may be disclosed 26.32 to the commissioner of revenue, or, for purposes of proceeding 26.33 under the Revenue Recapture Act to recover personal property 26.34 taxes owing, to the county treasurer. 26.35 (d) If residential real estate is occupied and used for 26.36 purposes of a homestead by a relative of the owner and qualifies 27.1 for a homestead under subdivision 1, paragraph (c), in order for 27.2 the property to receive homestead status, a homestead 27.3 application must be filed with the assessor. The social 27.4 security number of each relative occupying the property and the 27.5 social security number of each owner who is related to an 27.6 occupant of the property shall be required on the homestead 27.7 application filed under this subdivision. If a different 27.8 relative of the owner subsequently occupies the property, the 27.9 owner of the property must notify the assessor within 30 days of 27.10 the change in occupancy. The social security number of a 27.11 relative occupying the property is private data on individuals 27.12 as defined by section 13.02, subdivision 12, but may be 27.13 disclosed to the commissioner of revenue. 27.14 (e) The homestead application shall also notify the 27.15 property owners that the application filed under this section 27.16 will not be mailed annually and that if the property is granted 27.17 homestead status for the 1993 assessment, or any assessment year 27.18 thereafter, that same property shall remain classified as 27.19 homestead until the property is sold or transferred to another 27.20 person, or the owners, the spouse of the owner, or the relatives 27.21 no longer use the property as their homestead. Upon the sale or 27.22 transfer of the homestead property, a certificate of value must 27.23 be timely filed with the county auditor as provided under 27.24 section 272.115. Failure to notify the assessor within 30 days 27.25 that the property has been sold, transferred, or that the owner, 27.26 the spouse of the owner, or the relative is no longer occupying 27.27 the property as a homestead, shall result in the penalty 27.28 provided under this subdivision and the property will lose its 27.29 current homestead status. 27.30 (f) If the homestead application is not returned within 30 27.31 days, the county will send a second application to the present 27.32 owners of record. The notice of proposed property taxes 27.33 prepared under section 275.065, subdivision 3, shall reflect the 27.34 property's classification. Beginning with assessment year 1993 27.35 for all properties, if a homestead application has not been 27.36 filed with the county by December 15, the assessor shall 28.1 classify the property as nonhomestead for the current assessment 28.2 year for taxes payable in the following year, provided that the 28.3 owner may be entitled to receive the homestead classification by 28.4 proper application under section 375.192. 28.5 (g) At the request of the commissioner, each county must 28.6 give the commissioner a list that includes the name and social 28.7 security number of each property owner and the property owner's 28.8 spouse occupying the property, or relative of a property owner, 28.9 applying for homestead classification under this subdivision. 28.10 The commissioner shall use the information provided on the lists 28.11 as appropriate under the law, including for the detection of 28.12 improper claims by owners, or relatives of owners, under chapter 28.13 290A. 28.14 (h) If the commissioner finds that a property owner may be 28.15 claiming a fraudulent homestead, the commissioner shall notify 28.16 the appropriate counties. Within 90 days of the notification, 28.17 the county assessor shall investigate to determine if the 28.18 homestead classification was properly claimed. If the property 28.19 owner does not qualify, the county assessor shall notify the 28.20 county auditor who will determine the amount of homestead 28.21 benefits that had been improperly allowed. For the purpose of 28.22 this section, "homestead benefits" means the tax reduction 28.23 resulting from the classification as a homestead under section 28.24 273.13, the taconite homestead credit under section 273.135, and 28.25 the supplemental homestead credit under section 273.1391. 28.26 The county auditor shall send a notice to the person who 28.27 owned the affected property at the time the homestead 28.28 application related to the improper homestead was filed, 28.29 demanding reimbursement of the homestead benefits plus a penalty 28.30 equal to 100 percent of the homestead benefits. The person 28.31 notified may appeal the county's determination by serving copies 28.32 of a petition for review with county officials as provided in 28.33 section 278.01 and filing proof of service as provided in 28.34 section 278.01 with the Minnesota tax court within 60 days of 28.35 the date of the notice from the county. Procedurally, the 28.36 appeal is governed by the provisions in chapter 271 which apply 29.1 to the appeal of a property tax assessment or levy, but without 29.2 requiring any prepayment of the amount in controversy. If the 29.3 amount of homestead benefits and penalty is not paid within 60 29.4 days, and if no appeal has been filed, the county auditor shall 29.5 certify the amount of taxes and penalty to the county 29.6 treasurer. The county treasurer will add interest to the unpaid 29.7 homestead benefits and penalty amounts at the rate provided in 29.8 section 279.03 for real property taxes becoming delinquent in 29.9 the calendar year during which the amount remains unpaid. 29.10 Interest may be assessed for the period beginning 60 days after 29.11 demand for payment was made. 29.12 If the person notified is the current owner of the 29.13 property, the treasurer may add the total amount of homestead 29.14 benefits, penalty, interest, and costs to the ad valorem taxes 29.15 otherwise payable on the property by including the amounts on 29.16 the property tax statements under section 276.04, subdivision 29.17 3. The amounts added under this paragraph to the ad valorem 29.18 taxes shall include interest accrued through December 31 of the 29.19 year preceding the taxes payable year for which the amounts are 29.20 first added. These amounts, when added to the property tax 29.21 statement, become subject to all the laws for the enforcement of 29.22 real or personal property taxes for that year, and for any 29.23 subsequent year. 29.24 If the person notified is not the current owner of the 29.25 property, the treasurer may collect the amounts due under the 29.26 Revenue Recapture Act in chapter 270A, or use any of the powers 29.27 granted in sections 277.20 and 277.21 without exclusion, to 29.28 enforce payment of the homestead benefits, penalty, interest, 29.29 and costs, as if those amounts were delinquent tax obligations 29.30 of the person who owned the property at the time the application 29.31 related to the improperly allowed homestead was filed. The 29.32 treasurer may relieve a prior owner of personal liability for 29.33 the homestead benefits, penalty, interest, and costs, and 29.34 instead extend those amounts on the tax lists against the 29.35 property as provided in this paragraph to the extent that the 29.36 current owner agrees in writing. On all demands, billings, 30.1 property tax statements, and related correspondence, the county 30.2 must list and state separately the amounts of homestead 30.3 benefits, penalty, interest and costs being demanded, billed or 30.4 assessed. 30.5 (i) Any amount of homestead benefits recovered by the 30.6 county from the property owner shall be distributed to the 30.7 county, city or town, and school district where the property is 30.8 located in the same proportion that each taxing district's levy 30.9 was to the total of the three taxing districts' levy for the 30.10 current year. Any amount recovered attributable to taconite 30.11 homestead credit shall be transmitted to the St. Louis county 30.12 auditor to be deposited in the taconite property tax relief 30.13 account. Any amount recovered that is attributable to 30.14 supplemental homestead credit is to be transmitted to the 30.15 commissioner of revenue for deposit in the general fund of the 30.16 state treasury. The total amount of penalty collected must be 30.17 deposited in the county general fund. 30.18 (j) If a property owner has applied for more than one 30.19 homestead and the county assessors cannot determine which 30.20 property should be classified as homestead, the county assessors 30.21 will refer the information to the commissioner. The 30.22 commissioner shall make the determination and notify the 30.23 counties within 60 days. 30.24 (k) In addition to lists of homestead properties, the 30.25 commissioner may ask the counties to furnish lists of all 30.26 properties and the record owners. The social security numbers 30.27 and federal identification numbers that are maintained by a 30.28 county or city assessor for property tax administration 30.29 purposes, and that may appear on the lists retain their 30.30 classification as private or nonpublic data; but may be viewed, 30.31 accessed, and used by the county auditor or treasurer of the 30.32 same county for the limited purpose of assisting the 30.33 commissioner in the preparation of microdata samples under 30.34 section 270.0681. 30.35 [EFFECTIVE DATE.] This section is effective for homestead 30.36 applications submitted on or after the day following final 31.1 enactment. 31.2 Sec. 20. Minnesota Statutes 2000, section 273.124, 31.3 subdivision 14, is amended to read: 31.4 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 31.5 (a) Real estate of less than ten acres that is the homestead of 31.6 its owner must be classified as class 2a under section 273.13, 31.7 subdivision 23, paragraph (a), if: 31.8 (1) the parcel on which the house is located is contiguous 31.9 on at least two sides to (i) agricultural land, (ii) land owned 31.10 or administered by the United States Fish and Wildlife Service, 31.11 or (iii) land administered by the department of natural 31.12 resources on which in lieu taxes are paid under sections 477A.11 31.13 to 477A.14; 31.14 (2) its owner also owns a noncontiguous parcel of 31.15 agricultural land that is at least 20 acres; 31.16 (3) the noncontiguous land is located not farther than four 31.17 townships or cities, or a combination of townships or cities 31.18 from the homestead; and 31.19 (4) the agricultural use value of the noncontiguous land 31.20 and farm buildings is equal to at least 50 percent of the market 31.21 value of the house, garage, and one acre of land. 31.22 Homesteads initially classified as class 2a under the 31.23 provisions of this paragraph shall remain classified as class 31.24 2a, irrespective of subsequent changes in the use of adjoining 31.25 properties, as long as the homestead remains under the same 31.26 ownership, the owner owns a noncontiguous parcel of agricultural 31.27 land that is at least 20 acres, and the agricultural use value 31.28 qualifies under clause (4). Homestead classification under this 31.29 paragraph is limited to property that qualified under this 31.30 paragraph for the 1998 assessment. 31.31 (b)(i) Agricultural property consisting of at least 40 31.32 acres shall be classified as the owner's homestead, to the same 31.33 extent as other agricultural homestead property, if all of the 31.34 following criteria are met: 31.35 (1) the owner, the owner's spouse, or theowner'sson or 31.36 daughter of the owner or owner's spouse, is actively farming the 32.1 agricultural property, either on the person's own behalf as an 32.2 individual or on behalf of a partnership operating a family 32.3 farm, family farm corporation, joint family farm venture, or 32.4 limited liability company of which the person is a partner, 32.5 shareholder, or member; 32.6 (2) both the owner of the agricultural propertyis a32.7Minnesota resident,andiftheowner's son or daughterperson 32.8 who is actively farming the agricultural property under clause 32.9 (1),that person must also be aare Minnesota 32.10residentresidents; 32.11 (3) neither the owner nor the spouse of the owner claims 32.12 another agricultural homestead in Minnesota; and 32.13 (4) neither the ownerdoes not livenor the person actively 32.14 farming the property lives farther than four townships or 32.15 cities, or a combination of four townships or cities, from the 32.16 agricultural property,andexcept that if theowner's son or32.17daughter is actively farming the agricultural property under32.18clause (1), that person must also live within theowner or the 32.19 owner's spouse is required to live in employer-provided housing, 32.20 the owner or owner's spouse, whichever is actively farming the 32.21 agricultural property, may live more than four townships or 32.22 cities, or combination of four townships or cities from the 32.23 agricultural property. 32.24 The relationship under this paragraph may be either by 32.25 blood or marriage. 32.26 (ii) Real property held by a trustee under a trust is 32.27 eligible for agricultural homestead classification under this 32.28 paragraph if the qualifications in clause (i) are met, except 32.29 that "owner" means the grantor of the trust. 32.30(ii)(iii) Property containing the residence of an owner 32.31 who owns qualified property under clause (i) shall be classified 32.32 as part of the owner's agricultural homestead, if that property 32.33 is also used for noncommercial storage or drying of agricultural 32.34 crops. 32.35 (c)Except as provided in paragraph (e),Noncontiguous land 32.36 shall be included as part of a homestead under section 273.13, 33.1 subdivision 23, paragraph (a), only if the homestead is 33.2 classified as class 2a and the detached land is located in the 33.3 same township or city, or not farther than four townships or 33.4 cities or combination thereof from the homestead. Any taxpayer 33.5 of these noncontiguous lands must notify the county assessor 33.6 that the noncontiguous land is part of the taxpayer's homestead, 33.7 and, if the homestead is located in another county, the taxpayer 33.8 must also notify the assessor of the other county. 33.9 (d) Agricultural land used for purposes of a homestead and 33.10 actively farmed by a person holding a vested remainder interest 33.11 in it must be classified as a homestead under section 273.13, 33.12 subdivision 23, paragraph (a). If agricultural land is 33.13 classified class 2a, any other dwellings on the land used for 33.14 purposes of a homestead by persons holding vested remainder 33.15 interests who are actively engaged in farming the property, and 33.16 up to one acre of the land surrounding each homestead and 33.17 reasonably necessary for the use of the dwelling as a home, must 33.18 also be assessed class 2a. 33.19 (e) Agricultural land and buildings that were class 2a 33.20 homestead property under section 273.13, subdivision 23, 33.21 paragraph (a), for the 1997 assessment shall remain classified 33.22 as agricultural homesteads for subsequent assessments if: 33.23 (1) the property owner abandoned the homestead dwelling 33.24 located on the agricultural homestead as a result of the April 33.25 1997 floods; 33.26 (2) the property is located in the county of Polk, Clay, 33.27 Kittson, Marshall, Norman, or Wilkin; 33.28 (3) the agricultural land and buildings remain under the 33.29 same ownership for the current assessment year as existed for 33.30 the 1997 assessment year and continue to be used for 33.31 agricultural purposes; 33.32 (4) the dwelling occupied by the owner is located in 33.33 Minnesota and is within 30 miles of one of the parcels of 33.34 agricultural land that is owned by the taxpayer; and 33.35 (5) the owner notifies the county assessor that the 33.36 relocation was due to the 1997 floods, and the owner furnishes 34.1 the assessor any information deemed necessary by the assessor in 34.2 verifying the change in dwelling. Further notifications to the 34.3 assessor are not required if the property continues to meet all 34.4 the requirements in this paragraph and any dwellings on the 34.5 agricultural land remain uninhabited. 34.6 (f) Agricultural land and buildings that were class 2a 34.7 homestead property under section 273.13, subdivision 23, 34.8 paragraph (a), for the 1998 assessment shall remain classified 34.9 agricultural homesteads for subsequent assessments if: 34.10 (1) the property owner abandoned the homestead dwelling 34.11 located on the agricultural homestead as a result of damage 34.12 caused by a March 29, 1998, tornado; 34.13 (2) the property is located in the county of Blue Earth, 34.14 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 34.15 (3) the agricultural land and buildings remain under the 34.16 same ownership for the current assessment year as existed for 34.17 the 1998 assessment year; 34.18 (4) the dwelling occupied by the owner is located in this 34.19 state and is within 50 miles of one of the parcels of 34.20 agricultural land that is owned by the taxpayer; and 34.21 (5) the owner notifies the county assessor that the 34.22 relocation was due to a March 29, 1998, tornado, and the owner 34.23 furnishes the assessor any information deemed necessary by the 34.24 assessor in verifying the change in homestead dwelling. For 34.25 taxes payable in 1999, the owner must notify the assessor by 34.26 December 1, 1998. Further notifications to the assessor are not 34.27 required if the property continues to meet all the requirements 34.28 in this paragraph and any dwellings on the agricultural land 34.29 remain uninhabited. 34.30 (g) Agricultural property consisting of at least 40 acres 34.31 of a family farm corporation, joint family farm venture, limited 34.32 liability company, or partnership operating a family farm as 34.33 described under subdivision 8 shall be classified homestead, to 34.34 the same extent as other agricultural homestead property, if all 34.35 of the following criteria are met: 34.36 (1)thea shareholder, member, or partner of that entity is 35.1 actively farming the agricultural property; 35.2 (2)thethat shareholder, member, or partnerofwho is 35.3 actively farming the agricultural property is a Minnesota 35.4 resident; 35.5 (3) neitherthethat shareholder, member, or partner, nor 35.6 the spouse ofthethat shareholder, member, or partner claims 35.7 another agricultural homestead in Minnesota; and 35.8 (4)thethat shareholder, member, or partner does not live 35.9 farther than four townships or cities, or a combination of four 35.10 townships or cities, from the agricultural property. 35.11 Homestead treatment applies under this paragraph for 35.12 property leased to a family farm corporation, joint farm 35.13 venture, limited liability company, or partnership operating a 35.14 family farm if legal title to the property is in the name of an 35.15 individual who is a member, shareholder, or partner in the 35.16 entity. 35.17 [EFFECTIVE DATE.] This section is effective for the 2001 35.18 assessment, taxes payable in 2002, and thereafter. 35.19 Sec. 21. Minnesota Statutes 2000, section 273.13, 35.20 subdivision 23, is amended to read: 35.21 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 35.22 land including any improvements that is homesteaded. The market 35.23 value of the house and garage and immediately surrounding one 35.24 acre of land has the same class rates as class 1a property under 35.25 subdivision 22. The value of the remaining land including 35.26 improvements up to $115,000 has a net class rate of 0.35 percent 35.27 of market value. The value of class 2a property over $115,000 35.28 of market value up to and including $600,000 market value has a 35.29 net class rate of 0.8 percent of market value. The remaining 35.30 property over $600,000 market value has a class rate of 1.20 35.31 percent of market value. 35.32 (b) Class 2b property is (1) real estate, rural in 35.33 character and used exclusively for growing trees for timber, 35.34 lumber, and wood and wood products; (2) real estate that is not 35.35 improved with a structure and is used exclusively for growing 35.36 trees for timber, lumber, and wood and wood products, if the 36.1 owner has participated or is participating in a cost-sharing 36.2 program for afforestation, reforestation, or timber stand 36.3 improvement on that particular property, administered or 36.4 coordinated by the commissioner of natural resources; (3) real 36.5 estate that is nonhomestead agricultural land; or (4) a landing 36.6 area or public access area of a privately owned public use 36.7 airport. Class 2b property has a net class rate of 1.20 percent 36.8 of market value. 36.9 (c) Agricultural land as used in this section means 36.10 contiguous acreage of ten acres or more, used during the 36.11 preceding year for agricultural purposes. "Agricultural 36.12 purposes" as used in this section means the raising or 36.13 cultivation of agricultural products or enrollment in the 36.14 Reinvest in Minnesota program under sections 103F.501 to 36.15 103F.535 or the federal Conservation Reserve Program as 36.16 contained in Public Law Number 99-198. Contiguous acreage on 36.17 the same parcel, or contiguous acreage on an immediately 36.18 adjacent parcel under the same ownership, may also qualify as 36.19 agricultural land, but only if it is pasture, timber, waste, 36.20 unusable wild land, or land included in state or federal farm 36.21 programs. Agricultural classification for property shall be 36.22 determined excluding the house, garage, and immediately 36.23 surrounding one acre of land, and shall not be based upon the 36.24 market value of any residential structures on the parcel or 36.25 contiguous parcels under the same ownership. 36.26 (d) Real estate, excluding the house, garage, and 36.27 immediately surrounding one acre of land, of less than ten acres 36.28 which is exclusively and intensively used for raising or 36.29 cultivating agricultural products, shall be considered as 36.30 agricultural land. 36.31 Land shall be classified as agricultural even if all or a 36.32 portion of the agricultural use of that property is the leasing 36.33 to, or use by another person for agricultural purposes. 36.34 Classification under this subdivision is not determinative 36.35 for qualifying under section 273.111. 36.36 The property classification under this section supersedes, 37.1 for property tax purposes only, any locally administered 37.2 agricultural policies or land use restrictions that define 37.3 minimum or maximum farm acreage. 37.4 (e) The term "agricultural products" as used in this 37.5 subdivision includes production for sale of: 37.6 (1) livestock, dairy animals, dairy products, poultry and 37.7 poultry products, fur-bearing animals, horticultural and nursery 37.8 stock described in sections 18.44 to 18.61, fruit of all kinds, 37.9 vegetables, forage, grains, bees, and apiary products by the 37.10 owner; 37.11 (2) fish bred for sale and consumption if the fish breeding 37.12 occurs on land zoned for agricultural use; 37.13 (3) the commercial boarding of horses if the boarding is 37.14 done in conjunction with raising or cultivating agricultural 37.15 products as defined in clause (1); 37.16 (4) property which is owned and operated by nonprofit 37.17 organizations used for equestrian activities, excluding racing; 37.18 (5) game birds and waterfowl bred and raised for use on a 37.19 shooting preserve licensed under section 97A.115; 37.20 (6) insects primarily bred to be used as food for 37.21 animals;and37.22 (7) trees, grown for sale as a crop, and not sold for 37.23 timber, lumber, wood, or wood products; and 37.24 (8) maple syrup taken from trees grown by a person licensed 37.25 by the Minnesota department of agriculture under chapter 28A as 37.26 a food processor. 37.27 (f) If a parcel used for agricultural purposes is also used 37.28 for commercial or industrial purposes, including but not limited 37.29 to: 37.30 (1) wholesale and retail sales; 37.31 (2) processing of raw agricultural products or other goods; 37.32 (3) warehousing or storage of processed goods; and 37.33 (4) office facilities for the support of the activities 37.34 enumerated in clauses (1), (2), and (3), 37.35 the assessor shall classify the part of the parcel used for 37.36 agricultural purposes as class 1b, 2a, or 2b, whichever is 38.1 appropriate, and the remainder in the class appropriate to its 38.2 use. The grading, sorting, and packaging of raw agricultural 38.3 products for first sale is considered an agricultural purpose. 38.4 A greenhouse or other building where horticultural or nursery 38.5 products are grown that is also used for the conduct of retail 38.6 sales must be classified as agricultural if it is primarily used 38.7 for the growing of horticultural or nursery products from seed, 38.8 cuttings, or roots and occasionally as a showroom for the retail 38.9 sale of those products. Use of a greenhouse or building only 38.10 for the display of already grown horticultural or nursery 38.11 products does not qualify as an agricultural purpose. 38.12 The assessor shall determine and list separately on the 38.13 records the market value of the homestead dwelling and the one 38.14 acre of land on which that dwelling is located. If any farm 38.15 buildings or structures are located on this homesteaded acre of 38.16 land, their market value shall not be included in this separate 38.17 determination. 38.18 (g) To qualify for classification under paragraph (b), 38.19 clause (4), a privately owned public use airport must be 38.20 licensed as a public airport under section 360.018. For 38.21 purposes of paragraph (b), clause (4), "landing area" means that 38.22 part of a privately owned public use airport properly cleared, 38.23 regularly maintained, and made available to the public for use 38.24 by aircraft and includes runways, taxiways, aprons, and sites 38.25 upon which are situated landing or navigational aids. A landing 38.26 area also includes land underlying both the primary surface and 38.27 the approach surfaces that comply with all of the following: 38.28 (i) the land is properly cleared and regularly maintained 38.29 for the primary purposes of the landing, taking off, and taxiing 38.30 of aircraft; but that portion of the land that contains 38.31 facilities for servicing, repair, or maintenance of aircraft is 38.32 not included as a landing area; 38.33 (ii) the land is part of the airport property; and 38.34 (iii) the land is not used for commercial or residential 38.35 purposes. 38.36 The land contained in a landing area under paragraph (b), clause 39.1 (4), must be described and certified by the commissioner of 39.2 transportation. The certification is effective until it is 39.3 modified, or until the airport or landing area no longer meets 39.4 the requirements of paragraph (b), clause (4). For purposes of 39.5 paragraph (b), clause (4), "public access area" means property 39.6 used as an aircraft parking ramp, apron, or storage hangar, or 39.7 an arrival and departure building in connection with the airport. 39.8 [EFFECTIVE DATE.] This section is effective for taxes 39.9 levied in 2001, payable in 2002, and thereafter. 39.10 Sec. 22. Minnesota Statutes 2000, section 275.065, 39.11 subdivision 3, is amended to read: 39.12 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 39.13 county auditor shall prepare and the county treasurer shall 39.14 deliver after November 10 and on or before November 24 each 39.15 year, by first class mail to each taxpayer at the address listed 39.16 on the county's current year's assessment roll, a notice of 39.17 proposed property taxes. 39.18 (b) The commissioner of revenue shall prescribe the form of 39.19 the notice. 39.20 (c) The notice must inform taxpayers that it contains the 39.21 amount of property taxes each taxing authority proposes to 39.22 collect for taxes payable the following year. In the case of a 39.23 town, or in the case of the state determined portion of the 39.24 school district levy, the final tax amount will be its proposed 39.25 tax. In the case of taxing authorities required to hold a 39.26 public meeting under subdivision 6, the notice must clearly 39.27 state that each taxing authority, including regional library 39.28 districts established under section 134.201, and including the 39.29 metropolitan taxing districts as defined in paragraph (i), but 39.30 excluding all other special taxing districts and towns, will 39.31 hold a public meeting to receive public testimony on the 39.32 proposed budget and proposed or final property tax levy, or, in 39.33 case of a school district, on the current budget and proposed 39.34 property tax levy. It must clearly state the time and place of 39.35 each taxing authority's meeting, a telephone number for the 39.36 taxing authority that taxpayers may call if they have questions 40.1 related to the notice, and an address where comments will be 40.2 received by mail. 40.3 (d) The notice must state for each parcel: 40.4 (1) the market value of the property as determined under 40.5 section 273.11, and used for computing property taxes payable in 40.6 the following year and for taxes payable in the current year as 40.7 each appears in the records of the county assessor on November 1 40.8 of the current year; and, in the case of residential property, 40.9 whether the property is classified as homestead or 40.10 nonhomestead. The notice must clearly inform taxpayers of the 40.11 years to which the market values apply and that the values are 40.12 final values; 40.13 (2) the items listed below, shown separately by county, 40.14 city or town, state determined school tax net of the education 40.15 homestead credit under section 273.1382, voter approved school 40.16 levy, other local school levy, and the sum of the special taxing 40.17 districts, and as a total of all taxing authorities: 40.18 (i) the actual tax for taxes payable in the current year; 40.19 (ii) the tax change due to spending factors, defined as the 40.20 proposed tax minus the constant spending tax amount; 40.21 (iii) the tax change due to other factors, defined as the 40.22 constant spending tax amount minus the actual current year tax; 40.23 and 40.24 (iv) the proposed tax amount. 40.25 In the case of a town or the state determined school tax, 40.26 the final tax shall also be its proposed tax unless the town 40.27 changes its levy at a special town meeting under section 40.28 365.52. If a school district has certified under section 40.29 126C.17, subdivision 9, that a referendum will be held in the 40.30 school district at the November general election, the county 40.31 auditor must note next to the school district's proposed amount 40.32 that a referendum is pending and that, if approved by the 40.33 voters, the tax amount may be higher than shown on the notice. 40.34 In the case of the city of Minneapolis, the levy for the 40.35 Minneapolis library board and the levy for Minneapolis park and 40.36 recreation shall be listed separately from the remaining amount 41.1 of the city's levy. In the case of a parcel where tax increment 41.2 or the fiscal disparities areawide tax under chapter 276A or 41.3 473F applies, the proposed tax levy on the captured value or the 41.4 proposed tax levy on the tax capacity subject to the areawide 41.5 tax must each be stated separately and not included in the sum 41.6 of the special taxing districts; and 41.7 (3) the increase or decrease between the total taxes 41.8 payable in the current year and the total proposed taxes, 41.9 expressed as a percentage. 41.10 For purposes of this section, the amount of the tax on 41.11 homesteads qualifying under the senior citizens' property tax 41.12 deferral program under chapter 290B is the total amount of 41.13 property tax before subtraction of the deferred property tax 41.14 amount. 41.15 (e) The notice must clearly state that the proposed or 41.16 final taxes do not include the following: 41.17 (1) special assessments; 41.18 (2) levies approved by the voters after the date the 41.19 proposed taxes are certified, including bond referenda, school 41.20 district levy referenda, and levy limit increase referenda; 41.21 (3) amounts necessary to pay cleanup or other costs due to 41.22 a natural disaster occurring after the date the proposed taxes 41.23 are certified; 41.24 (4) amounts necessary to pay tort judgments against the 41.25 taxing authority that become final after the date the proposed 41.26 taxes are certified; and 41.27 (5) the contamination tax imposed on properties which 41.28 received market value reductions for contamination. 41.29 (f) Except as provided in subdivision 7, failure of the 41.30 county auditor to prepare or the county treasurer to deliver the 41.31 notice as required in this section does not invalidate the 41.32 proposed or final tax levy or the taxes payable pursuant to the 41.33 tax levy. 41.34 (g) If the notice the taxpayer receives under this section 41.35 lists the property as nonhomestead, and satisfactory 41.36 documentation is provided to the county assessor by the 42.1 applicable deadline, and the property qualifies for the 42.2 homestead classification in that assessment year, the assessor 42.3 shall reclassify the property to homestead for taxes payable in 42.4 the following year. 42.5 (h) In the case of class 4 residential property used as a 42.6 residence for lease or rental periods of 30 days or more, the 42.7 taxpayer must either: 42.8 (1) mail or deliver a copy of the notice of proposed 42.9 property taxes to each tenant, renter, or lessee; or 42.10 (2) post a copy of the notice in a conspicuous place on the 42.11 premises of the property. 42.12 The notice must be mailed or posted by the taxpayer by 42.13 November 27 or within three days of receipt of the notice, 42.14 whichever is later. A taxpayer may notify the county treasurer 42.15 of the address of the taxpayer, agent, caretaker, or manager of 42.16 the premises to which the notice must be mailed in order to 42.17 fulfill the requirements of this paragraph. 42.18 (i) For purposes of this subdivision, subdivisions 5a and 42.19 6, "metropolitan special taxing districts" means the following 42.20 taxing districts in the seven-county metropolitan area that levy 42.21 a property tax for any of the specified purposes listed below: 42.22 (1) metropolitan council under section 473.132, 473.167, 42.23 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 42.24 (2) metropolitan airports commission under section 473.667, 42.25 473.671, or 473.672; and 42.26 (3) metropolitan mosquito control commission under section 42.27 473.711. 42.28 For purposes of this section, any levies made by the 42.29 regional rail authorities in the county of Anoka, Carver, 42.30 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 42.31 398A shall be included with the appropriate county's levy and 42.32 shall be discussed at that county's public hearing. 42.33 (j) If a statutory or home rule charter city or a town has 42.34 exercised the local levy option provided by section 473.388, 42.35 subdivision 7, it may include in the notice of its proposed 42.36 taxes the amount of its proposed taxes attributable to its 43.1 exercise of the option. In the first year of the city or town's 43.2 exercise of this option, the statement shall include an estimate 43.3 of the reduction of the metropolitan council's tax on the parcel 43.4 due to exercise of that option. The metropolitan council's levy 43.5 shall be adjusted accordingly. 43.6 [EFFECTIVE DATE.] This section is effective for notices of 43.7 proposed property taxes required in 2001 for taxes payable in 43.8 2002, and thereafter. 43.9 Sec. 23. Minnesota Statutes 2000, section 275.065, 43.10 subdivision 5a, is amended to read: 43.11 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 43.12 population of more than 2,500, county, a metropolitan special 43.13 taxing district as defined in subdivision 3, paragraph (i), a 43.14 regional library district established under section 134.201, or 43.15 school district shall advertise in a newspaper a notice of its 43.16 intent to adopt a budget and property tax levy or, in the case 43.17 of a school district, to review its current budget and proposed 43.18 property taxes payable in the following year, at a public 43.19 hearing, if a public hearing is required under subdivision 6. 43.20 The notice must be published not less than two business days nor 43.21 more than six business days before the hearing. 43.22 The advertisement must be at least one-eighth page in size 43.23 of a standard-size or a tabloid-size newspaper. The 43.24 advertisement must not be placed in the part of the newspaper 43.25 where legal notices and classified advertisements appear. The 43.26 advertisement must be published in an official newspaper of 43.27 general circulation in the taxing authority. The newspaper 43.28 selected must be one of general interest and readership in the 43.29 community, and not one of limited subject matter. The 43.30 advertisement must appear in a newspaper that is published at 43.31 least once per week. 43.32 For purposes of this section, the metropolitan special 43.33 taxing district's advertisement must only be published in the 43.34 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 43.35 In addition to other requirements, a county and a city 43.36 having a population of more than 2,500 must show in the public 44.1 advertisement required under this subdivision the current local 44.2 tax rate, the proposed local tax rate if no property tax levy 44.3 increase is adopted, and the proposed rate if the proposed levy 44.4 is adopted. For purposes of this subdivision, "local tax rate" 44.5 means the city's or county's net tax capacity levy divided by 44.6 the city's or county's taxable net tax capacity. 44.7 (b) The advertisement for school districts, metropolitan 44.8 special taxing districts, and regional library districts must be 44.9 in the following form, except that the notice for a school 44.10 district may include references to the current budget in regard 44.11 to proposed property taxes. 44.12 "NOTICE OF 44.13 PROPOSED PROPERTY TAXES 44.14 (School District/Metropolitan 44.15 Special Taxing District/Regional 44.16 Library District) of ......... 44.17 The governing body of ........ will soon hold budget hearings 44.18 and vote on the property taxes for (metropolitan special taxing 44.19 district/regional library district services that will be 44.20 provided in (year)/school district services that will be 44.21 provided in (year) and (year)). 44.22 NOTICE OF PUBLIC HEARING: 44.23 All concerned citizens are invited to attend a public hearing 44.24 and express their opinions on the proposed (school 44.25 district/metropolitan special taxing district/regional library 44.26 district) budget and property taxes, or in the case of a school 44.27 district, its current budget and proposed property taxes, 44.28 payable in the following year. The hearing will be held on 44.29 (Month/Day/Year) at (Time) at (Location, Address)." 44.30 (c) The advertisement for cities and counties must be in 44.31 the following form. 44.32 "NOTICE OF PROPOSED 44.33 TOTAL BUDGET AND PROPERTY TAXES 44.34 The (city/county) governing body or board of commissioners will 44.35 hold a public hearing to discuss the budget and to vote on the 44.36 amount of property taxes to collect for services the 45.1 (city/county) will provide in (year). 45.2 45.3 SPENDING: The total budget amounts below compare 45.4 (city's/county's) (year) total actual budget with the amount the 45.5 (city/county) proposes to spend in (year). 45.6 45.7 (Year) Total Proposed (Year) Change from 45.8 Actual Budget Budget (Year)-(Year) 45.9 45.10 $....... $....... ...% 45.11 45.12 TAXES: The property tax amounts below compare that portion of 45.13 the current budget levied in property taxes in (city/county) for 45.14 (year) with the property taxes the (city/county) proposes to 45.15 collect in (year). 45.16 45.17 (Year) Property Proposed (Year) Change from 45.18 Taxes Property Taxes (Year)-(Year) 45.19 45.20 $....... $....... ...% 45.21 45.22 LOCAL TAX RATE COMPARISON: The current local tax rate, the 45.23 local tax rate if no tax levy increase is adopted, and the 45.24 proposed local tax rate if the proposed levy is adopted. 45.25 45.26 (Year) (Year) (Year) 45.27 Tax Rate Tax Rate if NO Proposed 45.28 Levy Increase Tax Rate 45.30 ....... ....... ....... 45.31 45.32 ATTEND THE PUBLIC HEARING 45.33 All (city/county) residents are invited to attend the public 45.34 hearing of the (city/county) to express your opinions on the 45.35 budget and the proposed amount of (year) property taxes. The 45.36 hearing will be held on: 46.1 (Month/Day/Year/Time) 46.2 (Location/Address) 46.3 If the discussion of the budget cannot be completed, a time and 46.4 place for continuing the discussion will be announced at the 46.5 hearing. You are also invited to send your written comments to: 46.6 (City/County) 46.7 (Location/Address)" 46.8 (d) For purposes of this subdivision, the budget amounts 46.9 listed on the advertisement mean: 46.10 (1) for cities, the total government fund expenditures, as 46.11 defined by the state auditor under section 471.6965, less any 46.12 expenditures for improvements or services that are specially 46.13 assessed or charged under chapter 429, 430, 435, or the 46.14 provisions of any other law or charter; and 46.15 (2) for counties, the total government fund expenditures, 46.16 as defined by the state auditor under section 375.169, less any 46.17 expenditures for direct payments to recipients or providers for 46.18 the human service aids listed below: 46.19 (i) Minnesota family investment program under chapters 256J 46.20 and 256K; 46.21 (ii) medical assistance under sections 256B.041, 46.22 subdivision 5, and 256B.19, subdivision 1; 46.23 (iii) general assistance medical care under section 46.24 256D.03, subdivision 6; 46.25 (iv) general assistance under section 256D.03, subdivision 46.26 2; 46.27 (v) emergency assistance under section 256J.48; 46.28 (vi) Minnesota supplemental aid under section 256D.36, 46.29 subdivision 1; 46.30 (vii) preadmission screening under section 256B.0911, and 46.31 alternative care grants under section 256B.0913; 46.32 (viii) general assistance medical care claims processing, 46.33 medical transportation and related costs under section 256D.03, 46.34 subdivision 4; 46.35 (ix) medical transportation and related costs under section 46.36 256B.0625, subdivisions 17 to 18a; 47.1 (x) group residential housing under section 256I.05, 47.2 subdivision 8, transferred from programs in clauses (iv) and 47.3 (vi); or 47.4 (xi) any successor programs to those listed in clauses (i) 47.5 to (x). 47.6 (e) A city with a population of over 500 but not more than 47.7 2,500 that is required to hold a public hearing under 47.8 subdivision 6 must advertise by posted notice as defined in 47.9 section 645.12, subdivision 1. The advertisement must be posted 47.10 at the time provided in paragraph (a). It must be in the form 47.11 required in paragraph (b). 47.12 (f) For purposes of this subdivision, the population of a 47.13 city is the most recent population as determined by the state 47.14 demographer under section 4A.02. 47.15 (g) The commissioner of revenue, subject to the approval of 47.16 the chairs of the house and senate tax committees, shall 47.17 prescribe the form and format of theadvertisement47.18 advertisements required under this subdivision. 47.19 [EFFECTIVE DATE.] This section is effective for public 47.20 advertisements required in 2001 for taxes payable in 2002, and 47.21 thereafter. 47.22 Sec. 24. Minnesota Statutes 2000, section 275.065, 47.23 subdivision 6, is amended to read: 47.24 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 47.25 (a) For purposes of this section, the following terms shall have 47.26 the meanings given: 47.27 (1) "Initial hearing" means the first and primary hearing 47.28 held to discuss the taxing authority's proposed budget and 47.29 proposed property tax levy for taxes payable in the following 47.30 year, or, for school districts, the current budget and the 47.31 proposed property tax levy for taxes payable in the following 47.32 year. 47.33 (2) "Continuation hearing" means a hearing held to complete 47.34 the initial hearing, if the initial hearing is not completed on 47.35 its scheduled date. 47.36 (3) "Subsequent hearing" means the hearing held to adopt 48.1 the taxing authority's final property tax levy, and, in the case 48.2 of taxing authorities other than school districts, the final 48.3 budget, for taxes payable in the following year. 48.4 (b) Between November 29 and December 20, the governing 48.5 bodies of a city that has a population over 500, county, 48.6 metropolitan special taxing districts as defined in subdivision 48.7 3, paragraph (i), and regional library districts shall each hold 48.8 an initial public hearing to discuss and seek public comment on 48.9 its final budget and property tax levy for taxes payable in the 48.10 following year, and the governing body of the school district 48.11 shall hold an initial public hearing to review its current 48.12 budget and proposed property tax levy for taxes payable in the 48.13 following year. The metropolitan special taxing districts shall 48.14 be required to hold only a single joint initial public hearing, 48.15 the location of which will be determined by the affected 48.16 metropolitan agencies. A city, county, metropolitan special 48.17 taxing district as defined in subdivision 3, paragraph (i), 48.18 regional library district established under section 134.201, or 48.19 school district is not required to hold a public hearing under 48.20 this subdivision unless its proposed property tax levy for taxes 48.21 payable in the following year, as certified under subdivision 1, 48.22 has increased over its final property tax levy for taxes payable 48.23 in the current year by a percentage that is greater than the 48.24 percentage increase in the implicit price deflator for 48.25 government consumption expenditures and gross investment for 48.26 state and local governments prepared by the Bureau of Economic 48.27 Analysts of the United States Department of Commerce for the 48.28 12-month period ending March 31 of the current year. 48.29 (c) The initial hearing must be held after 5:00 p.m. if 48.30 scheduled on a day other than Saturday. No initial hearing may 48.31 be held on a Sunday. 48.32 (d) At the initial hearing under this subdivision, the 48.33 percentage increase in property taxes proposed by the taxing 48.34 authority, if any, and the specific purposes for which property 48.35 tax revenues are being increased must be discussed. During the 48.36 discussion, the governing body shall hear comments regarding a 49.1 proposed increase and explain the reasons for the proposed 49.2 increase. The public shall be allowed to speak and to ask 49.3 questions. At the public hearing, the school district must also 49.4 provide and discuss information on the distribution of its 49.5 revenues by revenue source, and the distribution of its spending 49.6 by program area. 49.7 (e) If the initial hearing is not completed on its 49.8 scheduled date, the taxing authority must announce, prior to 49.9 adjournment of the hearing, the date, time, and place for the 49.10 continuation of the hearing. The continuation hearing must be 49.11 held at least five business days but no more than 14 business 49.12 days after the initial hearing. A continuation hearing may not 49.13 be held later than December 20 except as provided in paragraphs 49.14 (f) and (g). A continuation hearing must be held after 5:00 49.15 p.m. if scheduled on a day other than Saturday. No continuation 49.16 hearing may be held on a Sunday. 49.17 (f) The governing body of a county shall hold its initial 49.18 hearing on the first Thursday in December each year, and may 49.19 hold additional initial hearings on other dates before December 49.20 20 if necessary for the convenience of county residents. If the 49.21 county needs a continuation of its hearing, the continuation 49.22 hearing shall be held on the third Tuesday in December. If the 49.23 third Tuesday in December falls on December 21, the county's 49.24 continuation hearing shall be held on Monday, December 20. 49.25 (g) The metropolitan special taxing districts shall hold a 49.26 joint initial public hearing on the first Wednesday of 49.27 December. A continuation hearing, if necessary, shall be held 49.28 on the second Wednesday of December even if that second 49.29 Wednesday is after December 10. 49.30 (h) The county auditor shall provide for the coordination 49.31 of initial and continuation hearing dates for all school 49.32 districts and cities within the county to prevent conflicts 49.33 under clauses (i) and (j). 49.34 (i) By August 10, each school board and the board of the 49.35 regional library district shall certify to the county auditors 49.36 of the counties in which the school district or regional library 50.1 district is located the dates on which it elects to hold its 50.2 initial hearing and any continuation hearing. If a school board 50.3 or regional library district does not certify these dates by 50.4 August 10, the auditor will assign the initial and continuation 50.5 hearing dates. The dates elected or assigned must not conflict 50.6 with the initial and continuation hearing dates of the county or 50.7 the metropolitan special taxing districts. 50.8 (j) By August 20, the county auditor shall notify the 50.9 clerks of the cities within the county of the dates on which 50.10 school districts and regional library districts have elected to 50.11 hold their initial and continuation hearings. At the time a 50.12 city certifies its proposed levy under subdivision 1 it shall 50.13 certify the dates on which it elects to hold its initial hearing 50.14 and any continuation hearing. Until September 15, the first and 50.15 second Mondays of December are reserved for the use of the 50.16 cities. If a city does not certify its hearing dates by 50.17 September 15, the auditor shall assign the initial and 50.18 continuation hearing dates. The dates elected or assigned for 50.19 the initial hearing must not conflict with the initial hearing 50.20 dates of the county, metropolitan special taxing districts, 50.21 regional library districts, or school districts within which the 50.22 city is located. To the extent possible, the dates of the 50.23 city's continuation hearing should not conflict with the 50.24 continuation hearing dates of the county, metropolitan special 50.25 taxing districts, regional library districts, or school 50.26 districts within which the city is located. This paragraph does 50.27 not apply to cities of 500 population or less. 50.28 (k) The county initial hearing date and the city, 50.29 metropolitan special taxing district, regional library district, 50.30 and school district initial hearing dates must be designated on 50.31 the notices required under subdivision 3. The continuation 50.32 hearing dates need not be stated on the notices. 50.33 (l) At a subsequent hearing, each county, school district, 50.34 city over 500 population, and metropolitan special taxing 50.35 district may amend its proposed property tax levy and must adopt 50.36 a final property tax levy. Each county, city over 500 51.1 population, and metropolitan special taxing district may also 51.2 amend its proposed budget and must adopt a final budget at the 51.3 subsequent hearing. The final property tax levy must be adopted 51.4 prior to adopting the final budget. A school district is not 51.5 required to adopt its final budget at the subsequent hearing. 51.6 The subsequent hearing of a taxing authority must be held on a 51.7 date subsequent to the date of the taxing authority's initial 51.8 public hearing. If a continuation hearing is held, the 51.9 subsequent hearing must be held either immediately following the 51.10 continuation hearing or on a date subsequent to the continuation 51.11 hearing. The subsequent hearing may be held at a regularly 51.12 scheduled board or council meeting or at a special meeting 51.13 scheduled for the purposes of the subsequent hearing. The 51.14 subsequent hearing of a taxing authority does not have to be 51.15 coordinated by the county auditor to prevent a conflict with an 51.16 initial hearing, a continuation hearing, or a subsequent hearing 51.17 of any other taxing authority. All subsequent hearings must be 51.18 held prior to five working days after December 20 of the levy 51.19 year. The date, time, and place of the subsequent hearing must 51.20 be announced at the initial public hearing or at the 51.21 continuation hearing. 51.22 (m) The property tax levy certified under section 275.07 by 51.23 a city of any population, county, metropolitan special taxing 51.24 district, regional library district, or school district must not 51.25 exceed the proposed levy determined under subdivision 1, except 51.26 by an amount up to the sum of the following amounts: 51.27 (1) the amount of a school district levy whose voters 51.28 approved a referendum to increase taxes under section 123B.63, 51.29 subdivision 3, or 126C.17, subdivision 9, after the proposed 51.30 levy was certified; 51.31 (2) the amount of a city or county levy approved by the 51.32 voters after the proposed levy was certified; 51.33 (3) the amount of a levy to pay principal and interest on 51.34 bonds approved by the voters under section 475.58 after the 51.35 proposed levy was certified; 51.36 (4) the amount of a levy to pay costs due to a natural 52.1 disaster occurring after the proposed levy was certified, if 52.2 that amount is approved by the commissioner of revenue under 52.3 subdivision 6a; 52.4 (5) the amount of a levy to pay tort judgments against a 52.5 taxing authority that become final after the proposed levy was 52.6 certified, if the amount is approved by the commissioner of 52.7 revenue under subdivision 6a; 52.8 (6) the amount of an increase in levy limits certified to 52.9 the taxing authority by the commissioner of children, families, 52.10 and learning or the commissioner of revenue after the proposed 52.11 levy was certified; and 52.12 (7) the amount required under section 126C.55. 52.13 (n) This subdivision does not apply to towns and special 52.14 taxing districts other than regional library districts and 52.15 metropolitan special taxing districts. 52.16 (o) Notwithstanding the requirements of this section, the 52.17 employer is required to meet and negotiate over employee 52.18 compensation as provided for in chapter 179A. 52.19 [EFFECTIVE DATE.] This section is effective for hearings 52.20 required in 2001 for taxes payable in 2002 and thereafter. 52.21 Sec. 25. Minnesota Statutes 2000, section 275.066, is 52.22 amended to read: 52.23 275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 52.24 For the purposes of property taxation and property tax 52.25 state aids, the term "special taxing districts" includes the 52.26 following entities: 52.27 (1) watershed districts under chapter 103D; 52.28 (2) sanitary districts under sections 115.18 to 115.37; 52.29 (3) regional sanitary sewer districts under sections 115.61 52.30 to 115.67; 52.31 (4) regional public library districts under section 52.32 134.201; 52.33 (5) park districts under chapter 398; 52.34 (6) regional railroad authorities under chapter 398A; 52.35 (7) hospital districts under sections 447.31 to 447.38; 52.36 (8) St. Cloud metropolitan transit commission under 53.1 sections 458A.01 to 458A.15; 53.2 (9) Duluth transit authority under sections 458A.21 to 53.3 458A.37; 53.4 (10) regional development commissions under sections 53.5 462.381 to 462.398; 53.6 (11) housing and redevelopment authorities under sections 53.7 469.001 to 469.047; 53.8 (12) port authorities under sections 469.048 to 469.068; 53.9 (13) economic development authorities under sections 53.10 469.090 to 469.1081; 53.11 (14) metropolitan council under sections 473.123 to 53.12 473.549; 53.13 (15) metropolitan airports commission under sections 53.14 473.601 to 473.680; 53.15 (16) metropolitan mosquito control commission under 53.16 sections 473.701 to 473.716; 53.17 (17) Morrison county rural development financing authority 53.18 under Laws 1982, chapter 437, section 1; 53.19 (18) Croft Historical Park District under Laws 1984, 53.20 chapter 502, article 13, section 6; 53.21 (19) East Lake county medical clinic district under Laws 53.22 1989, chapter 211, sections 1 to 6; 53.23 (20) Floodwood area ambulance district under Laws 1993, 53.24 chapter 375, article 5, section 39; 53.25 (21) Middle Mississippi river watershed management 53.26 organization under sections 103B.211 and 103B.241;and53.27 (22) emergency medical services special taxing districts 53.28 under section 144F.01; 53.29 (23) a county levying under the authority of section 53.30 103B.241, 103B.245, or 103B.251; and 53.31 (24) any other political subdivision of the state of 53.32 Minnesota, excluding counties, school districts, cities, and 53.33 towns, that has the power to adopt and certify a property tax 53.34 levy to the county auditor, as determined by the commissioner of 53.35 revenue. 53.36 [EFFECTIVE DATE.] Clause (22) of this section is effective 54.1 for taxes levied in 2001, payable in 2002, through taxes levied 54.2 in 2006, payable in 2007. Clause (23) of this section is 54.3 effective for taxes levied in 2001, payable in 2002, and 54.4 thereafter. 54.5 Sec. 26. Minnesota Statutes 2000, section 275.07, 54.6 subdivision 1, is amended to read: 54.7 Subdivision 1. [CERTIFICATION OF LEVY.] (a) Except as 54.8 provided under paragraph (b), the taxes voted by cities, 54.9 counties, school districts, and special districts shall be 54.10 certified by the proper authorities to the county auditor on or 54.11 before five working days after December 20 in each year. A town 54.12 must certify the levy adopted by the town board to the county 54.13 auditor by September 15 each year. If the town board modifies 54.14 the levy at a special town meeting after September 15, the town 54.15 board must recertify its levy to the county auditor on or before 54.16 five working days after December 20. The taxes certified shall 54.17 not be reduced by the county auditor by the aid received under 54.18 section 273.1398, subdivision 2, but shall be reduced by the 54.19 county auditor by the aid received under section 273.1398, 54.20 subdivision 3. If a city, town, county, school district, or 54.21 special district fails to certify its levy by that date, its 54.22 levy shall be the amount levied by it for the preceding year. 54.23 (b)(i) The taxes voted by counties under sections 103B.241, 54.24 103B.245, and 103B.251 shall be separately certified by the 54.25 county to the county auditor on or before five working days 54.26 after December 20 in each year. The taxes certified shall not 54.27 be reduced by the county auditor by the aid received under 54.28 section 273.1398, subdivisions 2 and 3. If a county fails to 54.29 certify its levy by that date, its levy shall be the amount 54.30 levied by it for the preceding year. 54.31 (ii) For purposes of the proposed property tax notice under 54.32 section 275.065 and the property tax statement under section 54.33 276.04, for the first year in which the county implements the 54.34 provisions of this paragraph, the county auditor shall reduce 54.35 the county's levy for the preceding year to reflect any amount 54.36 levied for water management purposes under clause (i) included 55.1 in the county's levy. 55.2 [EFFECTIVE DATE.] This section is effective for taxes 55.3 levied in 2001, payable in 2002, and thereafter. 55.4 Sec. 27. Minnesota Statutes 2000, section 275.62, 55.5 subdivision 1, is amended to read: 55.6 Subdivision 1. [REPORT ON TAXES LEVIED.] The commissioner 55.7 of revenue shall establish procedures for the annual reporting 55.8 of local government levies. Each local governmental unit shall 55.9 submit a report to the commissioner by December 30 of the year 55.10 in which the tax is levied. A local governmental unit is 55.11 required to file this report only for levy years in which it is 55.12 not subject to levy limits under sections 275.70 to 275.74. The 55.13 report shall include, but is not limited to, information on the 55.14 amount of the tax levied by the governmental unit for the 55.15 following purposes: 55.16 (1)debt, which includes taxes levied for the purposes55.17defined in Minnesota Statutes 1991 Supplement, section 275.50,55.18subdivision 5, clauses (b), (c), (d), and (e);55.19(2) social services and related programs, which include55.20taxes levied for the purposes defined in Minnesota Statutes 199155.21Supplement, section 275.50, subdivision 5, clauses (a), (j), and55.22(v);55.23(3) libraries, which include taxes levied for the purposes55.24defined in Minnesota Statutes 1991 Supplement, section 275.50,55.25subdivision 5, clause (n);55.26(4) for counties only, the amount of levy needed to fund55.27increased county costs associated with the welfare reform under55.28Laws 1997, chapter 85, including increased administration and55.29program costs of the income maintenance programs and also55.30related support services as they relate directly to the welfare55.31reformthe amounts levied for each of the purposes listed in 55.32 section 275.70, subdivision 5; and 55.33(5)(2) other levies, which include the taxes levied for 55.34 all purposes not included in clause (1), (2), (3), or (4). 55.35 Sec. 28. Minnesota Statutes 2000, section 281.17, is 55.36 amended to read: 56.1 281.17 [PERIOD FOR REDEMPTION.] 56.2 Except for properties for which the period of redemption 56.3 has been limited under sections 281.173 and 281.174, the 56.4 following periods for redemption apply. 56.5 The period of redemption for all lands sold to the state at 56.6 a tax judgment sale shall be three years from the date of sale 56.7 to the state of Minnesota if the land is within an incorporated 56.8 area unless it is: (a) nonagricultural homesteaded land as 56.9 defined in section 273.13, subdivision 22; (b) homesteaded 56.10 agricultural land as defined in section 273.13, subdivision 23, 56.11 paragraph (a); or (c) seasonal recreational land as defined in 56.12 section 273.13, subdivision 22, paragraph (c), or 25, paragraph 56.13(c)(d), clause(5)(1), for which the period of redemption is 56.14 five years from the date of sale to the state of Minnesota. 56.15 The period of redemption for homesteaded lands as defined 56.16 in section 273.13, subdivision 22, located in a targeted 56.17 neighborhood as defined in Laws 1987, chapter 386, article 6, 56.18 section 4, and sold to the state at a tax judgment sale is three 56.19 years from the date of sale. The period of redemption for all 56.20 lands located in a targeted neighborhood as defined in Laws 56.21 1987, chapter 386, article 6, section 4, except (1) homesteaded 56.22 lands as defined in section 273.13, subdivision 22, and (2) for 56.23 periods of redemption beginning after June 30, 1991, but before 56.24 July 1, 1996, lands located in the Loring Park targeted 56.25 neighborhood on which a notice of lis pendens has been served, 56.26 and sold to the state at a tax judgment sale is one year from 56.27 the date of sale. 56.28 The period of redemption for all real property constituting 56.29 a mixed municipal solid waste disposal facility that is a 56.30 qualified facility under section 115B.39, subdivision 1, is one 56.31 year from the date of the sale to the state of Minnesota. 56.32 The period of redemption for all other lands sold to the 56.33 state at a tax judgment sale shall be five years from the date 56.34 of sale, except that the period of redemption for nonhomesteaded 56.35 agricultural land as defined in section 273.13, subdivision 23, 56.36 paragraph (b), shall be two years from the date of sale if at 57.1 that time that property is owned by a person who owns one or 57.2 more parcels of property on which taxes are delinquent, and the 57.3 delinquent taxes are more than 25 percent of the prior year's 57.4 school district levy. 57.5 Sec. 29. Minnesota Statutes 2000, section 282.01, 57.6 subdivision 1, is amended to read: 57.7 Subdivision 1. [CLASSIFICATION AS CONSERVATION OR 57.8 NONCONSERVATION.] It is the general policy of this state to 57.9 encourage the best use of tax-forfeited lands, recognizing that 57.10 some lands in public ownership should be retained and managed 57.11 for public benefits while other lands should be returned to 57.12 private ownership. Parcels of land becoming the property of the 57.13 state in trust under law declaring the forfeiture of lands to 57.14 the state for taxes must be classified by the county board of 57.15 the county in which the parcels lie as conservation or 57.16 nonconservation. In making the classification the board shall 57.17 consider the present use of adjacent lands, the productivity of 57.18 the soil, the character of forest or other growth, accessibility 57.19 of lands to established roads, schools, and other public 57.20 services, their peculiar suitability or desirability for 57.21 particular uses and the suitability of the forest resources on 57.22 the land for multiple use, sustained yield management. The 57.23 classification, furthermore, must encourage and foster a mode of 57.24 land utilization that will facilitate the economical and 57.25 adequate provision of transportation, roads, water supply, 57.26 drainage, sanitation, education, and recreation; facilitate 57.27 reduction of governmental expenditures; conserve and develop the 57.28 natural resources; and foster and develop agriculture and other 57.29 industries in the districts and places best suited to them. 57.30 In making the classification the county board may use 57.31 information made available by any office or department of the 57.32 federal, state, or local governments, or by any other person or 57.33 agency possessing pertinent information at the time the 57.34 classification is made. The lands may be reclassified from time 57.35 to time as the county board considers necessary or desirable, 57.36 except for conservation lands held by the state free from any 58.1 trust in favor of any taxing district. 58.2 If the lands are located within the boundaries of an 58.3 organized town, with taxable valuation in excess of $20,000, or 58.4 incorporated municipality, the classification or 58.5 reclassification and sale must first be approved by the town 58.6 board of the town or the governing body of the municipality in 58.7 which the lands are located. The town board of the town or the 58.8 governing body of the municipality is considered to have 58.9 approved the classification or reclassification and sale if the 58.10 county board is not notified of the disapproval of the 58.11 classification or reclassification and sale within 60 days of 58.12 the date the request for approval was transmitted to the town 58.13 board of the town or governing body of the municipality. If the 58.14 town board or governing body desires to acquire any parcel lying 58.15 in the town or municipality by procedures authorized in this 58.16 section, it must file a written application with the county 58.17 board to withhold the parcel from public sale. The application 58.18 must be filed within 60 days of the request for classification 58.19 or reclassification and sale. The county board shall then 58.20 withhold the parcel from public sale for six months. A 58.21 municipality or governmental subdivision shall pay maintenance 58.22 costs incurred by the county during the six-month period while 58.23 the property is withheld from public sale, provided the property 58.24 is not offered for public sale after the six-month period. A 58.25 clerical error made by county officials does not serve to 58.26 eliminate the request of the town board or governing body if the 58.27 board or governing body has forwarded the application to the 58.28 county auditor. If the town board or governing body of the 58.29 municipality fails to submit an application and a resolution of 58.30 the board or governing body to acquire the property within the 58.31 withholding period, the county may offer the property for sale 58.32 upon the expiration of the withholding period. 58.33 Sec. 30. Minnesota Statutes 2000, section 282.01, 58.34 subdivision 1b, is amended to read: 58.35 Subd. 1b. [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 58.36 Notwithstanding subdivision 1a, in the case of tax-forfeited 59.1 lands located in a targeted neighborhood, as defined in section 59.2 469.201, subdivision 10,outside the metropolitan area, as59.3defined inand section 473.121, subdivision 2, the commissioner 59.4 of revenuemayshall convey by deed in the name of the state any 59.5 tract of tax-forfeited land held in trust in favor of the taxing 59.6 districts, to a political subdivision that submits an 59.7 application to the commissioner of revenue and the 59.8 recommendation of the county board. 59.9 (b)Notwithstanding subdivision 1a, in the case of59.10tax-forfeited lands located in a targeted neighborhood, as59.11defined in section 469.201, subdivision 10, in a county in the59.12metropolitan area, as defined in section 473.121, subdivision 2,59.13the commissioner of revenue shall convey by deed in the name of59.14the state any tract of tax-forfeited land held in trust in favor59.15of the taxing districts, to a political subdivision that submits59.16an application to the commissioner of revenue and the county59.17board.59.18(c)The application under paragraph (a)or (b)must include 59.19 a statement of facts as to the use to be made of the tract, the 59.20 need therefor, and a resolution, adopted by the governing body 59.21 of the political subdivision, finding that the conveyance of a 59.22 tract of tax-forfeited land to the political subdivision is 59.23 necessary to provide for the redevelopment of land as productive 59.24 taxable property. Deeds of conveyance issued under paragraph 59.25 (a) are not conditioned on continued use of the property for the 59.26 use stated in the application. 59.27 [EFFECTIVE DATE.] This section is effective for deeds 59.28 issued on or after July 1, 2001. 59.29 Sec. 31. Minnesota Statutes 2000, section 282.01, 59.30 subdivision 1c, is amended to read: 59.31 Subd. 1c. [DEED OF CONVEYANCE; FORM; APPROVALS.] The deed 59.32 of conveyance for property conveyed for a public use must be on 59.33 a form approved by the attorney general and must be conditioned 59.34 on continued use for the purpose stated in the application.If,59.35however, the governing body of the governmental subdivision by59.36resolution determines that some other public use should be made60.1of the lands, and the change of use is approved by the county60.2board and an application for change of use is made to, and60.3approved by, the commissioner, the changed use may be made60.4without conveying the lands back to the state and securing a new60.5conveyance for the new public use.60.6 [EFFECTIVE DATE.] This section is effective for deeds 60.7 issued on or after July 1, 2001. 60.8 Sec. 32. Minnesota Statutes 2000, section 282.01, 60.9 subdivision 1d, is amended to read: 60.10 Subd. 1d. [REVERTER FOR FAILURE TO USE; CONVEYANCE TO 60.11 STATE.]WhenIf after three years from the date of the 60.12 conveyance a governmental subdivision to which tax-forfeited 60.13 land has been conveyed for a specified public use as provided in 60.14 this section fails to put the land to that use,or to some other60.15authorized public use as provided in this section,or abandons 60.16 that use, the governing body of the subdivisionshallmay, with 60.17 the approval of the county board, purchase the property for an 60.18 authorized public purpose at the present appraised value as 60.19 determined by the county board. In that case, the commissioner 60.20 of revenue shall, upon proper written application approved by 60.21 the county board, issue an appropriate deed to the subdivisions 60.22 free of a use restriction and reverter. The governing body may 60.23 also authorize the proper officers to convey the land, or the 60.24 part of the land not required for an authorized public use, to 60.25 the state of Minnesota. The officers shall execute a deed of 60.26 conveyance immediately. The conveyance is subject to the 60.27 approval of the commissioner and its form must be approved by 60.28 the attorney general. A sale, lease, transfer, or other 60.29 conveyance of tax-forfeited lands by a housing and redevelopment 60.30 authority, a port authority, an economic development authority, 60.31 or a city as authorized by chapter 469 is not an abandonment of 60.32 use and the lands shall not be reconveyed to the state nor shall 60.33 they revert to the state. A certificate made by a housing and 60.34 redevelopment authority, a port authority, an economic 60.35 development authority, or a city referring to a conveyance by it 60.36 and stating that the conveyance has been made as authorized by 61.1 chapter 469 may be filed with the county recorder or registrar 61.2 of titles, and the rights of reverter in favor of the state 61.3 provided by subdivision 1e will then terminate. No vote of the 61.4 people is required for the conveyance. 61.5 [EFFECTIVE DATE.] This section is effective July 1, 2001. 61.6 For deeds existing on the effective date, the three-year 61.7 limitation begins on July 1, 2001, except no deed issued prior 61.8 to July 1, 2001, shall have a limitation of less than five years. 61.9 Sec. 33. Minnesota Statutes 2000, section 282.01, 61.10 subdivision 1e, is amended to read: 61.11 Subd. 1e. [NOTICE AND DECLARATION OF REVERSION.] If the 61.12 tax-forfeited land is not either purchased or conveyed to the 61.13 state in accordance with subdivision 1d, the commissioner of 61.14 revenue shall by written instrument, in form approved by the 61.15 attorney general, declare the land to have reverted to the 61.16 state, and shall serve a notice of reversion, with a copy of the 61.17 declaration, by certified mail upon the clerk or recorder of the 61.18 governmental subdivision concerned. No declaration of reversion 61.19 under this subdivision shall be made earlier thanfive years61.20from the date of conveyance for failure to put land to the use61.21specified or from the date of abandonment of that use if the61.22lands have been put to that use60 days after the expiration of 61.23 the three-year period described in subdivision 1d. The 61.24 commissioner shall file the original declaration in the 61.25 commissioner's office, with verified proof of service. The 61.26 governmental subdivision may appeal to the district court of the 61.27 county in which the land lies by filing with the court 61.28 administrator a notice of appeal, specifying the grounds of 61.29 appeal and the description of the land involved, mailing a copy 61.30 of the notice of appeal by certified mail to the commissioner of 61.31 revenue, and filing a copy for record with the county recorder 61.32 or registrar of titles, all within 30 days after the mailing of 61.33 the notice of reversion. The appeal shall be tried by the court 61.34 in like manner as a civil action. If no appeal is taken as 61.35 provided in this subdivision, the declaration of reversion is 61.36 final. The commissioner of revenue shall file for record with 62.1 the county recorder or registrar of titles, of the county within 62.2 which the land lies, a certified copy of the declaration of 62.3 reversion and proof of service. 62.4 [EFFECTIVE DATE.] This section is effective for deeds 62.5 issued on or after July 1, 2001. 62.6 Sec. 34. Minnesota Statutes 2000, section 282.241, is 62.7 amended to read: 62.8 282.241 [REPURCHASE AFTER FORFEITURE.] 62.9 Subdivision 1. [REPURCHASE REQUIREMENTS.] The owner at the 62.10 time of forfeiture, or the owner's heirs, devisees, or 62.11 representatives, or any person to whom the right to pay taxes 62.12 was given by statute, mortgage, or other agreement, may 62.13 repurchase any parcel of land claimed by the state to be 62.14 forfeited to the state for taxes unless before the time 62.15 repurchase is made the parcel is sold under installment 62.16 payments, or otherwise, by the state as provided by law, or is 62.17 under mineral prospecting permit or lease, or proceedings have 62.18 been commenced by the state or any of its political subdivisions 62.19 or by the United States to condemn the parcel of land. The 62.20 parcel of land may be repurchased for the sum of all delinquent 62.21 taxes and assessments computed under section 282.251, together 62.22 with penalties, interest, and costs, that accrued or would have 62.23 accrued if the parcel of land had not forfeited to the state. 62.24 Except for property which was homesteaded on the date of 62.25 forfeiture, repurchase is permitted during one year only from 62.26 the date of forfeiture, and in any case only after the adoption 62.27 of a resolution by the board of county commissioners determining 62.28 that by repurchase undue hardship or injustice resulting from 62.29 the forfeiture will be corrected, or that permitting the 62.30 repurchase will promote the use of the lands that will best 62.31 serve the public interest. If the county board has good cause 62.32 to believe that a repurchase installment payment plan for a 62.33 particular parcel is unnecessary and not in the public interest, 62.34 the county board may require as a condition of repurchase that 62.35 the entire repurchase price be paid at the time of repurchase. 62.36 A repurchase is subject to any easement, lease, or other 63.1 encumbrance granted by the state before the repurchase, and if 63.2 the land is located within a restricted area established by any 63.3 county under Laws 1939, chapter 340, the repurchase must not be 63.4 permitted unless the resolution approving the repurchase is 63.5 adopted by the unanimous vote of the board of county 63.6 commissioners. 63.7 The person seeking to repurchase under this section shall 63.8 pay all maintenance costs incurred by the county auditor during 63.9 the time the property was tax-forfeited. 63.10 Subd. 2. [ALTERNATIVE COMPUTATION OF REPURCHASE AMOUNT.] A 63.11 county board may by resolution establish an alternative method 63.12 of computing the repurchase amount under this subdivision for 63.13 property homesteaded at the time of forfeiture that has been in 63.14 forfeited status for more than ten years. Equivalent taxes, 63.15 penalties, interest, and costs for each year the property was in 63.16 forfeiture status must be computed using the simple average of 63.17 the assessor's estimated market value at forfeiture and the 63.18 assessor's current estimated market value multiplied by the 63.19 class rates under current law and applying the current tax, 63.20 penalty, and interest rates. Those amounts, plus any unpaid 63.21 special assessments reinstated and included in the purchase 63.22 price under section 282.251, including the penalties and 63.23 interest that accrued or would have accrued on the special 63.24 assessments, computed under current rates, are the repurchase 63.25 price. The county assessor shall determine the current market 63.26 value and classification of the property. 63.27 Sec. 35. [383A.76] [TAX-FORFEITED LANDS.] 63.28 Subdivision 1. [SALE; VALUATION.] The Ramsey county board 63.29 may sell tax-forfeited lands in the county to an organized or 63.30 incorporated governmental subdivision of the state for any 63.31 public purpose for which the subdivision is authorized to 63.32 acquire property. In the case of tax-forfeited land in the 63.33 county which a governmental subdivision has requested for 63.34 housing purposes, the county board may sell that property to the 63.35 requesting subdivision for the specified housing use at a value, 63.36 which may be less than its appraised value, as determined by the 64.1 county board. Factors that may be considered by the county 64.2 board in determining value for lands to be held for a permitted 64.3 public purpose or redeveloped under chapter 469 include the 64.4 projected gap financing and public subsidy needed for a 64.5 redevelopment project, expected increases in property taxes, 64.6 before and after redevelopment appraised values, the potential 64.7 use of the property for affordable housing, environmental 64.8 contamination and pollution, site preparation and infrastructure 64.9 costs, and any other relevant factors. The commissioner of 64.10 revenue shall convey by deed in the name of the state a tract of 64.11 tax-forfeited land held in trust in favor of the taxing 64.12 districts to a governmental subdivision for an authorized public 64.13 use, if an application is submitted to the commissioner. The 64.14 application must include a statement of facts as to the use to 64.15 be made of the tract, the need for it, and the recommendation of 64.16 the county board. Property conveyed under this section for a 64.17 value that is less than its appraised value cannot be included 64.18 in a tax increment financing district. To the extent the 64.19 provisions of chapter 282 are not inconsistent with this 64.20 section, the provisions of chapter 282 apply to the sale of tax 64.21 forfeited land in Ramsey county. 64.22 Subd. 2. [USE OF LAND.] For lands located within Ramsey 64.23 county, the deed of conveyance of tax-forfeited land to an 64.24 organized or incorporated governmental subdivision of the state 64.25 for an authorized use must be on a form approved by the attorney 64.26 general and must be conditioned on continued use for the purpose 64.27 stated in the application. If the governing body of the 64.28 governmental subdivision determines by resolution after public 64.29 hearing that some other public use should be made of the lands, 64.30 the changed use may be made upon filing with the county recorder 64.31 or registrar of titles a certified copy of the resolution and 64.32 without conveying the lands back to the state and securing a new 64.33 conveyance for the new public use. Permitted public uses under 64.34 this section include street, storm water ponding, drainage, 64.35 parks, watershed, wetlands, library, fire and police stations, 64.36 utility easements, and public facilities. 65.1 Subd. 3. [REVERTER OF LAND.] When a subdivision to which 65.2 tax-forfeited land has been conveyed for a housing purpose at a 65.3 value of less than the appraised value, fails to pass a 65.4 resolution designating a developer or approving a redevelopment 65.5 contract within three years of the date of conveyance, the 65.6 Ramsey county board may by resolution declare the land to have 65.7 reverted to the state, and shall serve a notice of reversion, 65.8 with a copy of the declaration, by certified mail to the 65.9 subdivision and shall reimburse the subdivision for the 65.10 consideration for the lands from the tax-forfeited sale fund. 65.11 The Ramsey county board shall file for record with the Ramsey 65.12 county recorder or registrar of titles a certified copy of the 65.13 declaration of reversion and proof of service. A certificate 65.14 made by a subdivision referring to a conveyance made to it and 65.15 stating that it has passed a resolution designating a developer 65.16 or approving a redevelopment contract for a housing 65.17 redevelopment project may be filed with the Ramsey county 65.18 recorder or registrar of titles, and the right of reverter in 65.19 favor of the state under this section will then terminate. 65.20 Subd. 4. [REPORT BY SUBDIVISION.] Each subdivision to 65.21 which tax-forfeited lands have been conveyed under this section 65.22 for a value of less than its appraised value must file a report 65.23 with the commissioner of revenue by September 1, 2004, and by 65.24 September 1 of each third year thereafter. The report shall 65.25 contain a description of the lands conveyed to it, a status of 65.26 the development efforts for the lands, the intended or actual 65.27 uses being made of the lands, and the amount of property taxes 65.28 being paid on the lands. The commissioner shall retain each 65.29 report for a minimum of ten years. Failure of a subdivision to 65.30 file a report shall be cause for the commissioner to declare a 65.31 reversion of the parcel under section 282.01, subdivision 1e. 65.32 [EFFECTIVE DATE.] This section is effective only after its 65.33 approval by a majority of the governing body of Ramsey county 65.34 and upon compliance with the provisions of Minnesota Statutes, 65.35 section 645.021, subdivision 3. 65.36 Sec. 36. Minnesota Statutes 2000, section 469.040, 66.1 subdivision 5, is amended to read: 66.2 Subd. 5. [DESIGNATED HOUSING CORPORATION.] (a) To the 66.3 extent not exempt from taxation under section 272.01, 66.4 subdivision 1, property located within the exterior boundaries 66.5 ofthe White Earthan Indian reservation in the state that is 66.6 owned by the tribe's designated housing entity as defined in 66.7 United States Code, title 25, section 4103(21), and that is a 66.8 housing project or a housing development project, as defined in 66.9 section 469.002, subdivisions 13 and 15, is exempt from all real 66.10 and personal property taxes of the city, the county, the state, 66.11 or any political subdivision thereof, but the property. 66.12 (b) Property exempt from taxation under paragraph (a) is 66.13 subject to subdivision 3. A copy of those portions of the 66.14 annual reports submitted on behalf of the housing entity to the 66.15 Secretary of the United States Department of Housing and Urban 66.16 Development for the project that contain information sufficient 66.17 to determine the amount due under subdivision 3 satisfies the 66.18 reporting requirements of subdivision 3 for the project. 66.19 [EFFECTIVE DATE.] This section is effective for taxes 66.20 levied in 2001, payable in 2002, and thereafter. 66.21 Sec. 37. Minnesota Statutes 2000, section 469.202, 66.22 subdivision 2, is amended to read: 66.23 Subd. 2. [ELIGIBILITY REQUIREMENTS FOR TARGETED 66.24 NEIGHBORHOODS.] An area within a city is eligible for 66.25 designation as a targeted neighborhood if the area meets two of 66.26 the following three criteria: 66.27 (a) The area had an unemployment rate that was twice the 66.28 unemployment rate for the Minneapolis and Saint Paul standard 66.29 metropolitan statistical area as determined by the1980most 66.30 recent federal decennial census. 66.31 (b) The median household income in the area was no more 66.32 than half the median household income for the Minneapolis and 66.33 Saint Paul standard metropolitan statistical area as determined 66.34 by the1980most recent federal decennial census. 66.35 (c) The area is characterized by residential dwelling units 66.36 in need of substantial rehabilitation. An area qualifies under 67.1 this paragraph if 25 percent or more of the residential dwelling 67.2 units are in substandard condition as determined by the city, or 67.3 if 70 percent or more of the residential dwelling units in the 67.4 area were built before 1940 as determined by the1980most 67.5 recent federal decennial census. 67.6 [EFFECTIVE DATE.] This section is effective upon the 67.7 availability of the federal 2000 census data required to 67.8 determine eligibility requirements under this section. 67.9 Sec. 38. Minnesota Statutes 2000, section 477A.12, is 67.10 amended to read: 67.11 477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; 67.12 CERTIFICATION OF ACREAGE.] 67.13 Subdivision 1. [TYPES OF LAND; PAYMENTS.] (a) As an offset 67.14 for expenses incurred by counties and towns in support of 67.15 natural resources lands, the following amounts are annually 67.16 appropriated to the commissioner of natural resources from the 67.17 general fund for transfer to the commissioner of revenue. The 67.18 commissioner of revenue shall pay the transferred funds to 67.19 counties as required by sections 477A.11 to 477A.145. The 67.20 amounts are: 67.21 (1) for acquired natural resources land, $3, as adjusted 67.22 for inflation under section 477A.145, multiplied by the total 67.23 number of acres of acquired natural resources land or, at the 67.24 county's option three-fourths of one percent of the appraised 67.25 value of all acquired natural resources land in the county, 67.26 whichever is greater; 67.27 (2) 75 cents, as adjusted for inflation under section 67.28 477A.145, multiplied by the number of acres of 67.29 county-administered other natural resources land; and 67.30 (3) 37.5 cents, as adjusted for inflation under section 67.31 477A.145, multiplied by the number of acres of 67.32 commissioner-administered other natural resources land located 67.33 in each county as of July 1 of each year prior to the payment 67.34 year. 67.35 (b) The amount determined under paragraph (a), clause (1), 67.36 is payable for land that is acquired from a private owner and 68.1 owned by the department of transportation for the purpose of 68.2 replacing wetland losses caused by transportation projects, but 68.3 only if the county contains more than 500 acres of such land at 68.4 the time the certification is made under subdivision 2. 68.5 Subd. 2. [PROCEDURE.] Lands for which payments in lieu are 68.6 made pursuant to section 97A.061, subdivision 3, and Laws 1973, 68.7 chapter 567, shall not be eligible for payments under this 68.8 section. Each county auditor shall certify to the department of 68.9 natural resources during July of each year prior to the payment 68.10 year the number of acres of county-administered other natural 68.11 resources land within the county. The department of natural 68.12 resources may, in addition to the certification of acreage, 68.13 require descriptive lists of land so certified. The 68.14 commissioner of natural resources shall determine and certify to 68.15 the commissioner of revenue by March 1 of the payment year: 68.16 (1) the number of acres and most recent appraised value of 68.17 acquired natural resources land within each county; 68.18 (2) the number of acres of commissioner-administered 68.19 natural resources land within each county; and 68.20 (3) the number of acres of county-administered other 68.21 natural resources land within each county, based on the reports 68.22 filed by each county auditor with the commissioner of natural 68.23 resources. 68.24 The commissioner of transportation shall determine and 68.25 certify to the commissioner of revenue by March 1 of the payment 68.26 year the number of acres of land and the appraised value of the 68.27 land described in subdivision 1, paragraph (b), but only if it 68.28 exceeds 500 acres. 68.29 The commissioner of revenue shall determine the 68.30 distributions provided for in this section using the number of 68.31 acres and appraised values certified by the commissioner of 68.32 natural resources and the commissioner of transportation by 68.33 March 1 of the payment year. 68.34(c)Subd 3. [DETERMINATION OF APPRAISED VALUE.] For the 68.35 purposes of this section, the appraised value of acquired 68.36 natural resources land is the purchase price for the first five 69.1 years after acquisition. The appraised value of acquired 69.2 natural resources land received as a donation is the value 69.3 determined for the commissioner of natural resources by a 69.4 licensed appraiser, or the county assessor's estimated market 69.5 value if no appraisal is done. The appraised value must be 69.6 determined by the county assessor every five years after the 69.7 land is acquired. 69.8 [EFFECTIVE DATE.] This section is effective for payments in 69.9 2002 and thereafter. 69.10 Sec. 39. Minnesota Statutes 2000, section 477A.14, is 69.11 amended to read: 69.12 477A.14 [USE OF FUNDS.] 69.13 Except as provided in section 97A.061, subdivision 5, 40 69.14 percent of the total payment to the county shall be deposited in 69.15 the county general revenue fund to be used to provide property 69.16 tax levy reduction. The remainder shall be distributed by the 69.17 county in the following priority: 69.18 (a) 37.5 cents, as adjusted for inflation under section 69.19 477A.145, for each acre of county-administered other natural 69.20 resources land shall be deposited in a resource development fund 69.21 to be created within the county treasury for use in resource 69.22 development, forest management, game and fish habitat 69.23 improvement, and recreational development and maintenance of 69.24 county-administered other natural resources land. Any county 69.25 receiving less than $5,000 annually for the resource development 69.26 fund may elect to deposit that amount in the county general 69.27 revenue fund; 69.28 (b) From the funds remaining, within 30 days of receipt of 69.29 the payment to the county, the county treasurer shall pay each 69.30 organized township 30 cents, as adjusted for inflation under 69.31 section 477A.145, for each acre of acquired natural resources 69.32 land and each acre of land described in section 477A.12, 69.33 subdivision 1, paragraph (b), and 7.5 cents, as adjusted for 69.34 inflation under section 477A.145, for each acre of other natural 69.35 resources land located within its boundaries. Payments for 69.36 natural resources lands not located in an organized township 70.1 shall be deposited in the county general revenue fund. Payments 70.2 to counties and townships pursuant to this paragraph shall be 70.3 used to provide property tax levy reduction, except that of the 70.4 payments for natural resources lands not located in an organized 70.5 township, the county may allocate the amount determined to be 70.6 necessary for maintenance of roads in unorganized townships. 70.7 Provided that, if the total payment to the county pursuant to 70.8 section 477A.12 is not sufficient to fully fund the distribution 70.9 provided for in this clause, the amount available shall be 70.10 distributed to each township and the county general revenue fund 70.11 on a pro rata basis; and 70.12 (c) Any remaining funds shall be deposited in the county 70.13 general revenue fund. Provided that, if the distribution to the 70.14 county general revenue fund exceeds $35,000, the excess shall be 70.15 used to provide property tax levy reduction. 70.16 [EFFECTIVE DATE.] This section is effective for payments in 70.17 2002 and thereafter. 70.18 Sec. 40. Laws 1992, chapter 499, article 7, section 31, as 70.19 amended by Laws 1998, chapter 398, article 1, section 39, Laws 70.20 1999, chapter 241, article 1, section 54, and Laws 2000, chapter 70.21 489, article 2, section 28, is amended to read: 70.22 Sec. 31. [REPEALER.] 70.23Minnesota Statutes 1990, sections 124A.02, subdivision 24;70.24124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3;70.25124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota70.26Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and70.2723; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i;70.28124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9;70.29124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision70.301; and 124A.29, subdivision 1, are repealed effective June 30,70.312004;Laws 1991, chapter 265, article 7, section 35, is repealed. 70.32 [EFFECTIVE DATE.] This section is effective July 1, 2001. 70.33 Sec. 41. [CONVEYANCE OF TAX-FORFEITED LAND; DAKOTA 70.34 COUNTY.] 70.35 (a) If special school district No. 6 conveys the land 70.36 described in paragraph (c) to the state according to Minnesota 71.1 Statutes, section 282.01, subdivision 1d, then, notwithstanding 71.2 any other provision of Minnesota Statutes, chapter 282, the 71.3 commissioner of revenue shall reconvey the land described in 71.4 paragraph (c) to special school district No. 6 for no 71.5 consideration. 71.6 (b) The conveyance must be in a form approved by the 71.7 attorney general. Notwithstanding Minnesota Statutes, chapter 71.8 282, or other law to the contrary, special school district No. 6 71.9 may use or sell the land for other than a public use. 71.10 Notwithstanding Minnesota Statutes, chapter 282, or other law to 71.11 the contrary, the state shall not retain a reversionary interest 71.12 and shall convey the land free of the trust in favor of the 71.13 taxing district. 71.14 (c) The land to be conveyed is in the city of South St. 71.15 Paul, Dakota county, and is described as: 71.16 (1) Lots 4, 5, 6, and 7, Block 1, Lookout Park Addition; 71.17 (2) Lots 25 and 26, Block 1, Lookout Park Addition; 71.18 (3) Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block 71.19 2, Lookout Park Addition; 71.20 (4) Lots 1, 2, 3, 4, and 5, Block 1, Bryants First Addition 71.21 to the city of South St. Paul; and 71.22 (5) Lot 21, Block 1, Bryants First Addition to the city of 71.23 South St. Paul, together with that part of the vacated alley and 71.24 vacated Stanley Place accruing thereto. 71.25 [EFFECTIVE DATE.] This section is effective the day 71.26 following final enactment. 71.27 Sec. 42. [MINNEHAHA CREEK WATERSHED DISTRICT.] 71.28 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 71.29 Minnesota Statutes, section 103D.905, subdivision 3, the 71.30 Minnehaha Creek watershed district may annually levy an 71.31 additional amount up to $50,000 for enforcing rules and permits. 71.32 Subd. 2. [EFFECTIVE DATE.] This section is effective, 71.33 without local approval, beginning with taxes levied in 2001, 71.34 payable in 2002. 71.35 Sec. 43. [PRIVATE SALE OF TAX-FORFEITED LAND; ST. LOUIS 71.36 COUNTY.] 72.1 (a) Notwithstanding the public sale provisions of Minnesota 72.2 Statutes, chapter 282, or other law to the contrary, St. Louis 72.3 county may sell by private sale the tax-forfeited land described 72.4 in paragraph (c) to one or more of the owners at the time of 72.5 forfeiture. 72.6 (b) The conveyance must be in a form approved by the 72.7 attorney general for a consideration of taxes due on the 72.8 property and any penalties, interest, and costs. 72.9 (c) The land to be sold is located in St. Louis county and 72.10 is described as: 72.11 (1) Parcel 200-10-1720: Sec. 11, Twp. 61, Rge 19 NW 1/4 of 72.12 NW 1/4; and 72.13 (2) Parcel 200-10-280: Sec. 2, Twp. 61, Rge 19 SW 1/4 of 72.14 SW 1/4. 72.15 (d) The county has determined that the county's land 72.16 management interests would best be served if the lands were 72.17 returned to private ownership. 72.18 [EFFECTIVE DATE.] This section is effective the day 72.19 following final enactment. 72.20 Sec. 44. [RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT IN 72.21 LIEU OF TAXES.] 72.22 (a) The Red River watershed management board may spend 72.23 money from its general fund to compensate counties and townships 72.24 for lost tax revenue from land that becomes tax exempt after it 72.25 is acquired by the board or a member watershed district for 72.26 flood damage reduction project. The amount that may be paid 72.27 under this section to a county or township must not exceed the 72.28 tax that was payable to that taxing jurisdiction on the land in 72.29 the last taxes payable year before the land became exempt due to 72.30 the acquisition, not to exceed $4 per acre, multiplied by 20. 72.31 This total amount may be paid in one payment, or in equal annual 72.32 installments over a period that does not exceed 20 years. A 72.33 member watershed district of the Red River management board may 72.34 spend money from its construction fund for the purposes 72.35 described in this section. 72.36 (b) For the purposes of this section, "Red River watershed 73.1 management board" refers to the board established by Laws 1976, 73.2 chapter 162, section 1, as amended by Laws 1982, chapter 474, 73.3 section 1, Laws 1983, chapter 338, section 1, Laws 1989 First 73.4 Special Session chapter 1, article 5, section 45, Laws 1991, 73.5 chapter 167, section 1, and Laws 1998, chapter 389, article 3, 73.6 section 29. 73.7 Sec. 45. [FORGIVENESS OF PENALTY AND INTEREST.] 73.8 If the owner of record of property located in St. Louis 73.9 county that has parcel number 060-0030-03840 enters into an 73.10 agreement with the county by June 30, 2001, to make installment 73.11 payments over a ten-year period of the amount of taxes and 73.12 special assessments due on the property for the 1997 payable 73.13 year and the owner makes the payments required under the 73.14 agreement when due, the amount of penalties, interest, and 73.15 related fees due as of June 30, 2001, with respect to the 73.16 delinquent taxes will not be required to be paid. 73.17 Sec. 46. [RENEWAL OF RULEMAKING AUTHORITY.] 73.18 Notwithstanding Minnesota Statutes, section 14.125, the 73.19 Minnesota housing finance agency may adopt administrative rules 73.20 under Minnesota Statutes, chapter 14, to carry out the 73.21 provisions of Minnesota Statutes, section 462A.071, and 73.22 determinations made under Minnesota Statutes, section 462A.071, 73.23 subdivision 11, paragraph (b), are valid until January 1, 2003. 73.24 [EFFECTIVE DATE.] This section is effective the day 73.25 following final enactment. 73.26 Sec. 47. [REPEALER.] 73.27 (a) Minnesota Statutes 2000, section 275.078, is repealed 73.28 effective for taxes levied in 2001, payable in 2002, and 73.29 thereafter. 73.30 (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 73.31 702, section 16; Laws 1992, chapter 511, article 2, section 52, 73.32 as amended by Laws 1997, chapter 231, article 2, section 50, and 73.33 Laws 1998, chapter 389, article 3, section 32; Laws 1996, 73.34 chapter 471, article 8, section 45; Laws 1999, chapter 243, 73.35 article 6, section 14; Laws 1999, chapter 243, article 6, 73.36 section 15; and Laws 2000, chapter 490, article 6, section 17, 74.1 are repealed effective for taxes levied in 2001, payable in 2002 74.2 and thereafter. 74.3 (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 74.4 126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 74.5 effective July 1, 2001. 74.6 ARTICLE 2 74.7 SALES AND USE TAXES 74.8 Section 1. Minnesota Statutes 2000, section 289A.31, 74.9 subdivision 7, is amended to read: 74.10 Subd. 7. [SALES AND USE TAX.] (a) The sales and use tax 74.11 required to be collected by the retailer under chapter 297A 74.12 constitutes a debt owed by the retailer to Minnesota, and the 74.13 sums collected must be held as a special fund in trust for the 74.14 state of Minnesota. 74.15 A retailer who does not maintain a place of business within 74.16 this state as defined by section 297A.21, subdivision 1, shall 74.17 not be indebted to Minnesota for amounts of tax that it was 74.18 required to collect but did not collect unless the retailer knew 74.19 or had been advised by the commissioner of its obligation to 74.20 collect the tax. 74.21 (b) The use tax required to be paid by a purchaser is a 74.22 debt owed by the purchaser to Minnesota. 74.23 (c) The tax imposed by chapter 297A, and interest and 74.24 penalties, is a personal debt of the individual required to file 74.25 a return from the time the liability arises, irrespective of 74.26 when the time for payment of that liability occurs. The debt 74.27 is, in the case of the executor or administrator of the estate 74.28 of a decedent and in the case of a fiduciary, that of the 74.29 individual in an official or fiduciary capacity unless the 74.30 individual has voluntarily distributed the assets held in that 74.31 capacity without reserving sufficient assets to pay the tax, 74.32 interest, and penalties, in which case the individual is 74.33 personally liable for the deficiency. 74.34 (d) Liability for payment of sales and use taxes includes 74.35 any responsible person or entity described in the personal 74.36 liability provisions of section 270.101. 75.1 (e) Any amounts collected, even if erroneously or illegally 75.2 collected, from a purchaser under a representation that they are 75.3 taxes imposed under chapter 297A are state funds from the time 75.4 of collection and must be reported on a return filed with the 75.5 commissioner.The amounts collected are not subject to refund75.6unless the seller submits written evidence to the commissioner75.7that the tax and any interest earned on the tax has been or will75.8be refunded or credited to the purchaser by the seller.75.9 (f) The tax imposed under chapter 297A on sales of tickets 75.10 to the premises of or events sponsored by the state agricultural 75.11 society and conducted on the state fairgrounds during the period 75.12 of the annual state fair may be retained by the state 75.13 agricultural society if the funds are used and matched as 75.14 required under section 37.13, subdivision 2. 75.15 [EFFECTIVE DATE.] This section is effective for amounts 75.16 collected after June 30, 2001. 75.17 Sec. 2. Minnesota Statutes 2000, section 289A.50, 75.18 subdivision 2, is amended to read: 75.19 Subd. 2. [REFUND OF SALES TAX TO VENDORS; LIMITATION.] If 75.20 a vendor has collected from a purchaser and remitted to the 75.21 state a tax on a transaction that is not subject to the tax 75.22 imposed by chapter 297A, the tax is refundable to the vendor 75.23 only if and to the extent thatitthe tax and any interest 75.24 earned on the tax is credited to amounts due to the vendor by 75.25 the purchaser or returned to the purchaser by the vendor. In 75.26 addition to the requirements of subdivision 1, a claim for 75.27 refund under this subdivision must state in writing that the tax 75.28 and interest earned on the tax has been or will be refunded or 75.29 credited to the purchaser by the vendor. 75.30 [EFFECTIVE DATE.] This section is effective for claims for 75.31 refunds after June 30, 2001. 75.32 Sec. 3. [295.60] [SPECIAL FUR CLOTHING TAX.] 75.33 Subdivision 1. [IMPOSITION.] If clothing made of fur is 75.34 not subject to the sales tax under chapter 297A, a tax is 75.35 imposed on each furrier equal to 6.5 percent of gross revenues 75.36 from retail sales in Minnesota of clothing made from fur. 76.1 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 76.2 the following terms have the meanings given. 76.3 (b) "Commissioner" means the commissioner of revenue. 76.4 (c) "Furrier" means a retailer that sells clothing made of 76.5 fur. 76.6 (d) "Clothing made of fur" means articles of clothing made 76.7 of fur on the hide or pelt, and articles of clothing of which 76.8 such fur is the component material of chief value, but only if 76.9 such value is more than three times the value of the next most 76.10 valuable material. 76.11 (e) "Retail sale" has the meaning given in section 297A.61, 76.12 subdivision 4. 76.13 Subd. 3. [PAYMENT.] (a) Each furrier shall make estimated 76.14 payments of the taxes for the calendar year in quarterly 76.15 installments to the commissioner by April 15, July 15, October 76.16 15, and January 15 of the following calendar year. 76.17 (b) Estimated tax payments are not required if: 76.18 (1) the tax for the current calendar year is less than 76.19 $500; or 76.20 (2) the tax for the previous calendar year is less than 76.21 $500, if the taxpayer had a tax liability and was doing business 76.22 the entire year. 76.23 (c) Underpayment of estimated installments bear interest at 76.24 the rate specified in section 270.75, from the due date of the 76.25 payment until paid or until the due date of the annual return, 76.26 whichever comes first. An underpayment of an estimated 76.27 installment is the difference between the amount paid and the 76.28 lesser of (1) 90 percent of one-quarter of the tax for the 76.29 calendar year or (2) one-quarter of the total tax for the 76.30 previous calendar year if the taxpayer had a tax liability and 76.31 was doing business the entire year. 76.32 Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer 76.33 with an aggregate tax liability of $120,000 or more during a 76.34 fiscal year ending June 30 must remit all liabilities by 76.35 electronic means. 76.36 Subd. 5. [ANNUAL RETURN.] The taxpayer must file an annual 77.1 return reconciling the estimated payments by March 15 of the 77.2 following calendar year. 77.3 Subd. 6. [FORM OF RETURNS.] The estimated payments and 77.4 annual return must contain the information and be in the form 77.5 prescribed by the commissioner. 77.6 Subd. 7. [APPLICATION OF OTHER CHAPTERS.] Unless 77.7 specifically provided otherwise by this section, the 77.8 enforcement, interest, and penalty provisions under chapter 294, 77.9 appeal provisions in sections 289A.43 and 289A.65, criminal 77.10 penalties in section 289A.63, refunds provisions in section 77.11 289A.50, and collection and rulemaking provisions under chapter 77.12 270, apply to a liability for the taxes imposed under this 77.13 section. 77.14 Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid 77.15 on an overpayment refunded or credited to the taxpayer from the 77.16 date of payment of the tax until the date the refund is paid or 77.17 credited. For purposes of this subdivision, the date of payment 77.18 is the due date of the return or the date of actual payment of 77.19 the tax, whichever is later. 77.20 Subd. 9. [DEPOSIT OF REVENUES.] The commissioner shall 77.21 deposit all revenues, including penalties and interest, derived 77.22 from the tax imposed by this section in the general fund. 77.23 [EFFECTIVE DATE.] This section is effective for sales and 77.24 purchases made after December 31, 2001. 77.25 Sec. 4. Minnesota Statutes 2000, section 297A.01, 77.26 subdivision 5, is amended to read: 77.27 Subd. 5. "Storage" includes any keeping or retention in 77.28 Minnesota for any purpose except sale in the regular course of 77.29 businessor subsequent use solely outside Minnesota of tangible77.30personal property. 77.31 [EFFECTIVE DATE; INSTRUCTIONS TO REVISOR.] (a) This section 77.32 is effective for storage, use, or consumption occurring after 77.33 June 30, 2001, but refunds, based on claims that meet the 77.34 requirements of all other applicable provisions of law, shall be 77.35 issued for and tax not imposed on tangible personal property 77.36 stored in Minnesota after June 30, 1997, and before July 1, 78.1 2001, if (1) the property was kept or retained in a public 78.2 warehouse or in a common carrier's or for-hire carrier's storage 78.3 facility, (2) the property was shipped or brought into Minnesota 78.4 by common carrier or for-hire carrier for the purpose of 78.5 subsequently being transported outside Minnesota, and (3) the 78.6 property is thereafter used solely outside Minnesota or in the 78.7 course of interstate commerce. 78.8 (b) In the next edition of Minnesota Statutes, the revisor 78.9 shall codify the amendment to this section in Minnesota 78.10 Statutes, section 297A.61, subdivision 5. 78.11 Sec. 5. Minnesota Statutes 2000, section 297A.25, 78.12 subdivision 28, is amended to read: 78.13 Subd. 28. [WASTE PROCESSING EQUIPMENT.] The gross receipts 78.14 from the sale of and storage, use, or consumption of equipment 78.15 used for processing solid or hazardous waste at a resource 78.16 recovery facility, as defined in section 115A.03, subdivision 78.17 28, are exempt, including pollution control equipment at a 78.18 resource recovery facility that burns refuse-derived fuel or 78.19 mixed municipal solid waste as its primary fuel. An electric 78.20 generation facility that processes and utilizes waste tires as 78.21 its primary fuel is a resource recovery facility for the 78.22 purposes of this section. 78.23 [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 78.24 effective for purchases and sales made after the date of final 78.25 enactment. In the next edition of Minnesota Statutes, the 78.26 revisor of statutes shall codify the amendment to this section 78.27 in section 297A.68, subdivision 24. 78.28 Sec. 6. Minnesota Statutes 2000, section 297A.61, 78.29 subdivision 2, is amended to read: 78.30 Subd. 2. [PERSON.] (a) "Person" includes any individual,78.31and anyor grouporand any combination of individuals, 78.32 groups, or individuals and groups acting as a unit, and the78.33plural as well as the singular number. 78.34 (b) Person includes a firm, partnership, joint venture, 78.35 limited liability company, association, cooperative, social 78.36 club, fraternal organization, municipal or private corporation 79.1 whether or not organized for profit,estates, trusts, business79.2trustsestate, trust, business trust, receiver, trustee, 79.3 syndicate, the United States, and a state and its political 79.4 subdivisions. 79.5 (c) Person includes, but is not limited to, directors and 79.6 officers of corporations, governors and managers of a limited 79.7 liability company, or members of partnerships who, either 79.8 individually or jointly with others, have the control, 79.9 supervision, or responsibility of filing returns and making 79.10 payment of the amount of tax imposed by this chapter. 79.11 (d) Personalsoincludes any agent or consignee of any 79.12 individual or organizationenumeratedlisted in this subdivision. 79.13 [EFFECTIVE DATE.] This section is effective for sales and 79.14 purchases made after June 30, 2001. 79.15 Sec. 7. Minnesota Statutes 2000, section 297A.61, 79.16 subdivision 3, is amended to read: 79.17 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 79.18 include, but are not limited to, each of the transactions listed 79.19 in this subdivision. 79.20 (b) Sale and purchase include: 79.21 (1) any transfer of title or possession, or both, of 79.22 tangible personal property, whether absolutely or conditionally, 79.23 for a consideration in money or by exchange or barter; and 79.24 (2) the leasing of or the granting of a license to use or 79.25 consume, for a consideration in money or by exchange or barter, 79.26 tangible personal property, other than a manufactured home used 79.27 for residential purposes for a continuous period of 30 days or 79.28 more. 79.29 (c) Sale and purchase include the production, fabrication, 79.30 printing, or processing of tangible personal property for a 79.31 consideration for consumers who furnish either directly or 79.32 indirectly the materials used in the production, fabrication, 79.33 printing, or processing. 79.34 (d) Sale and purchase include thefurnishing,preparing, or79.35servingfor a consideration of foodor drinks. Notwithstanding 79.36 section 297A.67, subdivision 2, taxable foodor drinks80.1includeincludes, butareis not limited to, the following: 80.2 (1) prepared foodor drinkssold by the retailerfor80.3immediate consumption on the retailer's premises. Food and80.4drinks sold within a building or grounds that require an80.5admission charge for entrance are presumed to be sold for80.6consumption on the premises; 80.7(2) food or drinks prepared by the retailer for immediate80.8consumption either on or off the retailer's premises. For80.9purposes of this subdivision, "food or drinks prepared for80.10immediate consumption" means any food product upon which an act80.11of preparation including, but not limited to, cooking, mixing,80.12sandwich making, blending, heating, or pouring has been80.13performed by the retailer so the food product may be immediately80.14consumed by the purchaser;80.15(3) ice cream, ice milk, frozen yogurt products, or frozen80.16novelties sold in single or individual servings including, but80.17not limited to, cones, sundaes, and snow cones;80.18(4)(2) soft drinksand other beverages, including all80.19carbonated and noncarbonated beverages or drinks sold in liquid80.20form, but not including beverages or drinks which contain milk80.21or milk products, beverages or drinks containing 15 or more80.22percent fruit juice, and noncarbonated and noneffervescent80.23bottled water sold in individual containers of one-half gallon80.24or more in size; 80.25(5) gum,(3) candy, and candy products; and 80.26(6) ice;80.27(7)(4) all food soldfromthrough vending machines;. 80.28(8) all food for immediate consumption sold from concession80.29stands and vehicles;80.30(9) party trays;80.31(10) all meals and single servings of packaged snack food80.32sold in restaurants and bars; and80.33(11) bakery products that are:80.34(i) prepared by the retailer for consumption on the80.35retailer's premises;80.36(ii) sold at a place that charges admission;81.1(iii) sold from vending machines; or81.2(iv) sold in single or individual servings from concession81.3stands, vehicles, bars, and restaurants.81.4For purposes of this paragraph, "single or individual81.5servings" does not include products when sold in bulk containers81.6or bulk packaging.81.7For purposes of this paragraph, "premises" means the total81.8space and facilities, including buildings, grounds, and parking81.9lots that are made available or that are available for use by81.10the retailer or customer for the purpose of sale or consumption81.11of prepared food and drinks. The premises of a caterer is the81.12place where the catered food or drinks are served.81.13 (e) A sale and a purchase includes the furnishing for a 81.14 consideration of electricity, gas, water, or steam for use or 81.15 consumption within this state or local exchange telephone 81.16 service, intrastate toll service, and interstate toll service, 81.17 if that service originates from and is charged to a telephone 81.18 located in this state. Telephone service includes (1) paging 81.19 services, and (2) private communication service, as defined in 81.20 United States Code, title 26, section 4252(d), except for 81.21 private communication service purchased by an agent acting on 81.22 behalf of the state lottery. Telephone service does not include 81.23 services purchased with a prepaid telephone calling card. The 81.24 furnishing for a consideration of access to telephone services 81.25 by a hotel to its guests is a sale. The furnishing for a 81.26 consideration of items listed in this paragraph by a municipal 81.27 corporation is a sale. 81.28 (f) A sale and a purchase includes the transfer for a 81.29 consideration of computer software. 81.30 (g) A sale and a purchase includes the furnishing for a 81.31 consideration oftaxable services as defined in subdivision81.3216.the following services: 81.33 (1) the privilege of admission to places of amusement, 81.34 recreational areas, or athletic events, and the making available 81.35 of amusement devices, tanning facilities, reducing salons, steam 81.36 baths, turkish baths, health clubs, and spas or athletic 82.1 facilities; 82.2 (2) lodging and related services by a hotel, rooming house, 82.3 resort, campground, motel, or trailer camp and the granting of 82.4 any similar license to use real property other than the renting 82.5 or leasing of it for a continuous period of 30 days or more; 82.6 (3) cable television services or similar television 82.7 services, including, but not limited to, charges for basic, 82.8 premium, pay-per-view, and any other similar service; 82.9 (4) parking services, whether on a contractual, hourly, or 82.10 other periodic basis, except for parking at a meter; 82.11 (5) the granting of membership in a club, association, or 82.12 other organization if: 82.13 (i) the club, association, or other organization makes 82.14 available for the use of its members sports and athletic 82.15 facilities, without regard to whether a separate charge is 82.16 assessed for use of the facilities; and 82.17 (ii) use of the sports and athletic facility is not made 82.18 available to the general public on the same basis as it is made 82.19 available to members. 82.20 Granting of membership means both one-time initiation fees and 82.21 periodic membership dues. Sports and athletic facilities 82.22 include golf courses; tennis, racquetball, handball, and squash 82.23 courts; basketball and volleyball facilities; running tracks; 82.24 exercise equipment; swimming pools; and other similar athletic 82.25 or sports facilities; and 82.26 (6) services as provided in this clause: 82.27 (i) laundry and dry cleaning services including cleaning, 82.28 pressing, repairing, altering, and storing clothes, linen 82.29 services and supply, cleaning and blocking hats, and carpet, 82.30 drapery, upholstery, and industrial cleaning. Laundry and dry 82.31 cleaning services do not include services provided by coin 82.32 operated facilities operated by the customer; 82.33 (ii) motor vehicle washing, waxing, and cleaning services, 82.34 including services provided by coin operated facilities operated 82.35 by the customer, and rustproofing, undercoating, and towing of 82.36 motor vehicles; 83.1 (iii) building and residential cleaning, maintenance, and 83.2 disinfecting and exterminating services; 83.3 (iv) detective, security, burglar, fire alarm, and armored 83.4 car services; but not including services performed within the 83.5 jurisdiction they serve by off-duty licensed peace officers as 83.6 defined in section 626.84, subdivision 1, or services provided 83.7 by a nonprofit organization for monitoring and electronic 83.8 surveillance of persons placed on in-home detention pursuant to 83.9 court order or under the direction of the Minnesota department 83.10 of corrections; 83.11 (v) pet grooming services; 83.12 (vi) lawn care, fertilizing, mowing, spraying and sprigging 83.13 services; garden planting and maintenance; tree, bush, and shrub 83.14 pruning, bracing, spraying, and surgery; indoor plant care; 83.15 tree, bush, shrub, and stump removal; and tree trimming for 83.16 public utility lines. Services performed under a construction 83.17 contract for the installation of shrubbery, plants, sod, trees, 83.18 bushes, and similar items are not taxable; 83.19 (vii) massages, except when provided by a licensed health 83.20 care facility or professional or upon written referral from a 83.21 licensed health care facility or professional for treatment of 83.22 illness, injury, or disease; and 83.23 (viii) the furnishing of lodging, board, and care services 83.24 for animals in kennels and other similar arrangements, but 83.25 excluding veterinary and horse boarding services. 83.26 In applying the provisions of this chapter, the terms 83.27 "tangible personal property" and "sales at retail" include 83.28 taxable services and the provision of taxable services, unless 83.29 specifically provided otherwise. Services performed by an 83.30 employee for an employer are not taxable. Services performed by 83.31 a partnership or association for another partnership or 83.32 association are not taxable if one of the entities owns or 83.33 controls more than 80 percent of the voting power of the equity 83.34 interest in the other entity. Services performed between 83.35 members of an affiliated group of corporations are not taxable. 83.36 For purposes of this section, "affiliated group of corporations" 84.1 includes those entities that would be classified as members of 84.2 an affiliated group under United States Code, title 26, section 84.3 1504, and that are eligible to file a consolidated tax return 84.4 for federal income tax purposes. 84.5 (h) A sale and a purchase includes the furnishing for a 84.6 consideration of tangible personal property or taxable services 84.7 by the United States or any of its agencies or 84.8 instrumentalities, or the state of Minnesota, its agencies, 84.9 instrumentalities, or political subdivisions. 84.10 [EFFECTIVE DATE.] This section is effective for sales and 84.11 purchases made after June 30, 2001, except that paragraph (d) is 84.12 effective for sales and purchases occurring after December 31, 84.13 2001. 84.14 Sec. 8. Minnesota Statutes 2000, section 297A.61, 84.15 subdivision 4, is amended to read: 84.16 Subd. 4. [RETAIL SALE.] (a) A "retail sale" meansaany 84.17 sale, lease, or rental for any purpose other than resalein the84.18regular course of business, sublease, or subrent. 84.19 (b) A sale of property used by the owner only by leasing it 84.20 to others or by holding it in an effort to lease it, and put to 84.21 no use by the owner other than resale after the lease or effort 84.22 to lease, is a sale of property for resale. 84.23 (c) A sale of master computer software that is purchased 84.24 and used to make copies for sale or lease is a sale of property 84.25 for resale. 84.26 (d) A sale of building materials, supplies, and equipment 84.27 to owners, contractors, subcontractors, or builders for the 84.28 erection of buildings or the alteration, repair, or improvement 84.29 of real property is a retail sale in whatever quantity sold, 84.30 whether the sale is for purposes of resale in the form of real 84.31 property or otherwise. 84.32 (e) A sale of carpeting, linoleum, or similar floor 84.33 covering to a person who provides for installation of the floor 84.34 covering is a retail sale and not a sale for resale since a sale 84.35 of floor covering which includes installation is a contract for 84.36 the improvement of real property. 85.1 (f) A sale of shrubbery, plants, sod, trees, and similar 85.2 items to a person who provides for installation of the items is 85.3 a retail sale and not a sale for resale since a sale of 85.4 shrubbery, plants, sod, trees, and similar items that includes 85.5 installation is a contract for the improvement of real property. 85.6 (g) A sale of tangible personal property that is awarded as 85.7 prizes is a retail sale and is not considered a sale of property 85.8 for resale. 85.9 (h) A sale of tangible personal property utilized or 85.10 employed in the furnishing or providing of services under 85.11 subdivision163, paragraph(b)(g), clause (1), including, but 85.12 not limited to, property given as promotional items, is a retail 85.13 sale and is not considered a sale of property for resale. 85.14 (i) A sale of tangible personal property used in conducting 85.15 lawful gambling under chapter 349 or the state lottery under 85.16 chapter 349A, including, but not limited to, property given as 85.17 promotional items, is a retail sale and is not considered a sale 85.18 of property for resale. 85.19 (j) A sale of machines, equipment, or devices that are used 85.20 to furnish, provide, or dispense goods or services, including, 85.21 but not limited to, coin-operated devices, is a retail sale and 85.22 is not considered a sale of property for resale. 85.23 (k) In the case of a lease, a retail sale occurs when an 85.24 obligation to make a lease payment becomes due under the terms 85.25 of the agreement or the trade practices of the lessor. 85.26 (l) In the case of a conditional sales contract, a retail 85.27 sale occurs upon the transfer of title or possession of the 85.28 tangible personal property. 85.29 [EFFECTIVE DATE.] This section is effective for sales and 85.30 purchases made after June 30, 2001, except that paragraph (a) is 85.31 effective January 1, 2002. 85.32 Sec. 9. Minnesota Statutes 2000, section 297A.61, 85.33 subdivision 6, is amended to read: 85.34 Subd. 6. [USE.] (a) "Use" includes the exercise of a right 85.35 or power incident to the ownership of any interest in tangible 85.36 personal property, ortaxableservices, purchased from a 86.1 retailer, other than the sale of that property in the regular 86.2 course of business. 86.3 (b) Use includes the consumption of printed materials in 86.4 the creation of nontaxable advertising that is distributed, 86.5 either directly or indirectly, within Minnesota. 86.6 [EFFECTIVE DATE.] This section is effective for sales and 86.7 purchases made after June 30, 2001. 86.8 Sec. 10. Minnesota Statutes 2000, section 297A.61, 86.9 subdivision 7, is amended to read: 86.10 Subd. 7. [SALES PRICE.] (a) "Sales price" meansthe total86.11consideration for a retail sale, valued in money, whether paid86.12in money or by barter or exchange.the measure subject to sales 86.13 tax, and means the total amount of consideration, including 86.14 cash, credit, property, and services, for which personal 86.15 property or services are sold, leased, or rented, valued in 86.16 money, whether received in money or otherwise, without any 86.17 deduction for the following: 86.18 (1) the seller's cost of the property sold; 86.19 (2) the cost of materials used, labor or service cost, 86.20 interest, losses, all costs of transportation to the seller, all 86.21 taxes imposed on the seller, and any other expenses of the 86.22 seller; 86.23 (3) charges by the seller for any services necessary to 86.24 complete the sale, other than delivery and installation charges; 86.25 (4) delivery charges; 86.26 (5) installation charges; and 86.27 (6) the value of exempt property given to the purchaser 86.28 when taxable and exempt personal property have been bundled 86.29 together and sold by the seller as a single product or piece of 86.30 merchandise. 86.31(b) Sales price includes:86.32(1) the cost of the property sold, cost of materials used,86.33labor or service cost, interest, or discount allowed after the86.34sale is consummated;86.35(2) the cost of transportation incurred prior to the time86.36of sale;87.1(3) any amount for which credit is given by the seller to87.2the purchaser;87.3(4) charges for services that are part of a sale; or87.4(5) any other expense whatsoever.87.5(c)(b) Sales price does not includethe following: 87.6 (1)an amount allowed as credit for tangible personal87.7property taken in trade for resalediscounts, including cash, 87.8 terms, or coupons that are not reimbursed by a third party and 87.9 that are allowed by the seller and taken by a purchaser on a 87.10 sale; 87.11 (2)charges of up to 15 percent in lieu of tips if the87.12charges are separately statedinterest, financing, and carrying 87.13 charges from credit extended on the sale of personal property or 87.14 services, if the amount is separately stated on the invoice, 87.15 bill of sale, or similar document given to the purchaser; and 87.16 (3)interest, financing, or carrying charges if the charges87.17are separately stated;any taxes legally imposed directly on the 87.18 consumer that are separately stated on the invoice, bill of 87.19 sale, or similar document given to the purchaser. 87.20(4) charges for labor or services used in installing or87.21applying the property sold if the charges are separately stated;87.22(5) transportation charges if the transportation occurs87.23after the retail sale of the property if the charges are87.24separately stated;87.25(6) cash discounts allowed and taken on sales or the amount87.26refunded either in cash or in credit for property returned by87.27purchasers;87.28(7) the rental motor vehicle tax imposed under section87.29297A.64; or87.30(8) the amount of any tax imposed by the United States on87.31communications services under United States Code, title 26,87.32section 4251(a).87.33(d) Notwithstanding paragraph (c), "sales price," for87.34purposes of sales of ready-mixed concrete sold from a87.35ready-mixed concrete truck, includes any transportation,87.36delivery, or other service charges, and no deduction is allowed88.1for those charges, whether or not the charges are separately88.2stated.88.3 [EFFECTIVE DATE.] This section is effective January 1, 2002. 88.4 Sec. 11. Minnesota Statutes 2000, section 297A.61, 88.5 subdivision 9, is amended to read: 88.6 Subd. 9. [RETAILER AND SELLER.] "Retailer" and "seller" 88.7 meanseveryany personengaged inmakingretailsales, leases, 88.8 or rentals of personal property or services. 88.9 [EFFECTIVE DATE.] This section is effective January 1, 2002. 88.10 Sec. 12. Minnesota Statutes 2000, section 297A.61, 88.11 subdivision 10, is amended to read: 88.12 Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible 88.13 personal property" means corporeal personal property of any 88.14 kind, including property that is to become real property as a 88.15 result of incorporation, attachment, or installation following 88.16 its acquisition. 88.17 (b) Tangible personal property includes, but is not limited 88.18 to: 88.19 (1) computer software, whether contained on tape, discs, 88.20 cards, or other devices; and 88.21 (2) prepaid telephone calling cards. 88.22 (c) Tangible personal property does not include: 88.23 (1) large ponderous machinery and equipment used in a 88.24 business or production activity which at common law would be 88.25 considered to be real property; 88.26 (2) property which is subject to an ad valorem property 88.27 tax; 88.28 (3) property described in section 272.02, subdivision 9, 88.29 clauses (a) to (d); and 88.30 (4) property described in section 272.03, subdivision 2, 88.31 clauses (3) and (5). 88.32 [EFFECTIVE DATE.] This section is effective for sales and 88.33 purchases made after June 30, 2001. 88.34 Sec. 13. Minnesota Statutes 2000, section 297A.61, 88.35 subdivision 14, is amended to read: 88.36 Subd. 14. [LEASING; LEASE.] "Leasing" includes all 89.1 transfers of possession or the use of tangible personal property 89.2 by the lessee for a consideration, if title remains with the 89.3 lessor at the end of the lease.For purposes of this chapter,A 89.4 lease of tangible personal property is a series of sales 89.5 transactions that impose upon the lessee multiple payment 89.6 obligations. "Leasing" does not include a transaction defined 89.7 under subdivision 15. 89.8 [EFFECTIVE DATE.] This section is effective for sales and 89.9 purchases made after June 30, 2001. 89.10 Sec. 14. Minnesota Statutes 2000, section 297A.61, 89.11 subdivision 17, is amended to read: 89.12 Subd. 17. [COMPUTER SOFTWARE.] "Computer software" means a 89.13 computer program, either in the form of written procedures orin89.14the form of storage media on which, or in which, the program is89.15recordedcontained on tapes, discs, cards, or another device, or 89.16 any required documentation or manuals designed to facilitate the 89.17 use of the computer program. For purposes of this subdivision: 89.18 (1)"Storage media" includes punched cards, tapes, discs,89.19diskettes, or drums on which computer programs may be embodied89.20or stored;89.21(2)"Computer" does not include tape-controlled automatic 89.22 drilling, milling, or other manufacturing machinery or 89.23 equipment; and 89.24(3)(2) "Computer program" means information and directions 89.25 that dictate the function performed by data processing 89.26 equipment. It includes the complete plan for the solution of a 89.27 problem, such as the complete sequence of automatic data 89.28 processing equipment instructions necessary to solve a problem 89.29 and includes both systems and application programs and 89.30 subdivisions, such as assemblers, compilers, routines, 89.31 generators, and utility programs. Computer program includes a 89.32 "canned" or prewritten computer program that is held or existing 89.33 for general or repeated sale or lease, even if the prewritten or 89.34 "canned" program was initially developed on a custom basis or 89.35 for in-house use. 89.36 [EFFECTIVE DATE.] This section is effective for sales and 90.1 purchases made after June 30, 2001. 90.2 Sec. 15. Minnesota Statutes 2000, section 297A.61, 90.3 subdivision 19, is amended to read: 90.4 Subd. 19. [COMMONFOR-HIRE CARRIER.] "CommonFor-hire 90.5 carrier" means a person engaged in transportation for hire of 90.6 tangible personal propertyby motor vehicle, if the person:. 90.7(1) has a certificate or permit or has completed a90.8registration process that authorizes for-hire transportation of90.9property from the United States Department of Transportation,90.10the transportation regulation board, or the department of90.11transportation;90.12(2) is transporting commodities defined as "exempt" in90.13for-hire transportation; or90.14(3) transports tangible personal property pursuant to a90.15contract with a person described in clause (1) or (2).90.16 [EFFECTIVE DATE.] This section is effective for sales and 90.17 purchases made after June 30, 2001. 90.18 Sec. 16. Minnesota Statutes 2000, section 297A.61, 90.19 subdivision 22, is amended to read: 90.20 Subd. 22. [INTERNAL REVENUE CODE.] Unless specifically 90.21 provided otherwise, "Internal Revenue Code" means the Internal 90.22 Revenue Code of 1986, as amended through December 31,19992000. 90.23 [EFFECTIVE DATE.] This section is effective for sales and 90.24 purchases made after June 30, 2001. 90.25 Sec. 17. Minnesota Statutes 2000, section 297A.61, 90.26 subdivision 23, is amended to read: 90.27 Subd. 23. [UNITED STATES CODE.] Unless specifically 90.28 provided otherwise, "United States Code" means the United States 90.29 Code as amended through December 31,19992000. 90.30 [EFFECTIVE DATE.] This section is effective for sales and 90.31 purchases made after June 30, 2001. 90.32 Sec. 18. Minnesota Statutes 2000, section 297A.61, is 90.33 amended by adding a subdivision to read: 90.34 Subd. 24. [PURCHASE PRICE.] "Purchase price" means the 90.35 measure subject to the use tax and has the same meaning as 90.36 "sales price." 91.1 [EFFECTIVE DATE.] This section is effective January 1, 2002. 91.2 Sec. 19. Minnesota Statutes 2000, section 297A.61, is 91.3 amended by adding a subdivision to read: 91.4 Subd. 25. [STATE.] Unless specifically provided otherwise, 91.5 "state" means any state of the United States and the District of 91.6 Columbia. 91.7 [EFFECTIVE DATE.] This section is effective January 1, 2002. 91.8 Sec. 20. Minnesota Statutes 2000, section 297A.61, is 91.9 amended by adding a subdivision to read: 91.10 Subd. 26. [DELIVERY CHARGES.] "Delivery charges" means 91.11 charges by the seller for preparation and delivery to a location 91.12 designated by the purchaser of personal property or services 91.13 including, but not limited to, transportation, shipping, 91.14 postage, handling, crating, and packing. 91.15 [EFFECTIVE DATE.] This section is effective January 1, 2002. 91.16 Sec. 21. Minnesota Statutes 2000, section 297A.61, is 91.17 amended by adding a subdivision to read: 91.18 Subd. 27. [PREPARED FOOD.] "Prepared food" means (i) food 91.19 sold in a heated state or heated by the seller; (ii) two or more 91.20 food ingredients mixed or combined by the seller for sale as a 91.21 single item; or (iii) food sold with eating utensils provided by 91.22 the seller, including plates, knives, forks, spoons, glasses, 91.23 cups, napkins, or straws. Prepared food does not include food 91.24 that is sliced, repackaged, or pasteurized by the seller. 91.25 [EFFECTIVE DATE.] This section is effective January 1, 2002. 91.26 Sec. 22. Minnesota Statutes 2000, section 297A.61, is 91.27 amended by adding a subdivision to read: 91.28 Subd. 28. [SOFT DRINKS.] "Soft drinks" means nonalcoholic 91.29 beverages that contain natural or artificial sweeteners. Soft 91.30 drinks do not include beverages that contain milk or milk 91.31 products; soy, rice, or similar milk substitutes; or greater 91.32 than 50 percent vegetable or fruit juice by volume. 91.33 [EFFECTIVE DATE.] This section is effective January 1, 2002. 91.34 Sec. 23. Minnesota Statutes 2000, section 297A.61, is 91.35 amended by adding a subdivision to read: 91.36 Subd. 29. [CANDY.] "Candy" means a preparation of sugar, 92.1 honey, or other natural or artificial sweeteners in combination 92.2 with chocolate, fruits, nuts, or other ingredients or flavorings 92.3 in the form of bars, drops, or pieces. Candy does not include 92.4 any preparation containing flour and must require no 92.5 refrigeration. 92.6 [EFFECTIVE DATE.] This section is effective January 1, 2002. 92.7 Sec. 24. Minnesota Statutes 2000, section 297A.61, is 92.8 amended by adding a subdivision to read: 92.9 Subd. 30. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 92.10 through vending machines" means food dispensed from a machine or 92.11 other mechanical device that accepts payment. 92.12 [EFFECTIVE DATE.] This section is effective January 1, 2002. 92.13 Sec. 25. Minnesota Statutes 2000, section 297A.64, 92.14 subdivision 3, is amended to read: 92.15 Subd. 3. [ADMINISTRATION.]The retailer shall report and92.16pay the tax imposed in subdivision 1 to the commissioner of92.17revenue with the taxes imposed in this chapter.Thetax imposed92.18in subdivision 1 and thefee imposed in subdivision 2areis 92.19 subject to the same interest, penalty, and other provisions 92.20 provided for sales and use taxes under chapter 289A and this 92.21 chapter. The commissioner has the same powers to assess and 92.22 collect thetax andfee that are given the commissioner in 92.23 chapters 270 and 289A and this chapter to assess and collect 92.24 sales and use tax. 92.25 [EFFECTIVE DATE.] This section is effective for leases 92.26 entered into after December 31, 2005. 92.27 Sec. 26. Minnesota Statutes 2000, section 297A.64, 92.28 subdivision 4, is amended to read: 92.29 Subd. 4. [EXEMPTIONS.] (a) Thetax and thefee imposed by 92.30 this sectiondodoes not apply to a lease or rental of (1) a 92.31 vehicle to be used by the lessee to provide a licensed taxi 92.32 service; (2) a hearse or limousine used in connection with a 92.33 burial or funeral service; or (3) a van designed or adapted 92.34 primarily for transporting property rather than passengers. 92.35 (b) The lessor may elect not to charge the fee imposed in 92.36 subdivision 2 if in the previous calendar year the lessor had no 93.1 more than 20 vehicles available for lease that would have been 93.2 subject to tax under this section, or no more than $50,000 in 93.3 gross receipts that would have been subject to tax under this 93.4 section. 93.5 [EFFECTIVE DATE.] This section is effective for leases 93.6 entered into after December 31, 2005. 93.7 Sec. 27. Minnesota Statutes 2000, section 297A.66, 93.8 subdivision 1, is amended to read: 93.9 Subdivision 1. [DEFINITIONS.] (a) "Retailer maintaining a 93.10 place of business in this state," or a similar term, means a 93.11 retailer: 93.12 (1) having or maintaining within this state, directly or by 93.13 a subsidiary, an office, place of distribution, sales or sample 93.14 room or place, warehouse, or other place of business; or 93.15 (2) having a representative, agent, salesperson, canvasser, 93.16 or solicitor operating in this state under the authority of the 93.17 retailer or its subsidiary, for any purpose, including the 93.18 repairing, selling, delivering, installing, or soliciting of 93.19 orders for the retailer's goods or services, or the leasing of 93.20 tangible personal property located in this state, whether the 93.21 place of business or agent, representative, salesperson, 93.22 canvasser, or solicitor is located in the state permanently or 93.23 temporarily, or whether or not the retailer or subsidiary is 93.24 authorized to do business in this state. 93.25 (b) "Destination of a sale" means the location to which the 93.26 retailer makes delivery of the property sold, or causes the 93.27 property to be delivered, to the purchaser of the property, or 93.28 to the agent or designee of the purchaser. The delivery may be 93.29 made by any means, including the United States Postal Service, a93.30common carrier,or acontractfor-hire carrier. 93.31 [EFFECTIVE DATE.] This section is effective for sales and 93.32 purchases made after June 30, 2001. 93.33 Sec. 28. Minnesota Statutes 2000, section 297A.66, 93.34 subdivision 3, is amended to read: 93.35 Subd. 3. [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN 93.36 THIS STATE.] (a) To the extent allowed by the United States 94.1 Constitution and the laws of the United States, a retailer 94.2 making retail sales from outside this state to a destination 94.3 within this state and not maintaining a place of business in 94.4 this state shall collect sales and use taxes and remit them to 94.5 the commissioner under section 297A.77, if the retailer engages 94.6 in the regular or systematic soliciting of sales from potential 94.7 customers in this state by: 94.8 (1) distribution, by mail or otherwise, of catalogs, 94.9 periodicals, advertising flyers, or other written solicitations 94.10 of business to customers in this state; 94.11 (2) display of advertisements on billboards or other 94.12 outdoor advertising in this state; 94.13 (3) advertisements in newspapers published in this state; 94.14 (4) advertisements in trade journals or other periodicals 94.15 the circulation of which is primarily within this state; 94.16 (5) advertisements in a Minnesota edition of a national or 94.17 regional publication or a limited regional edition in which this 94.18 state is included as part of a broader regional or national 94.19 publication which are not placed in other geographically defined 94.20 editions of the same issue of the same publication; 94.21 (6) advertisements in regional or national publications in 94.22 an edition which is not by its contents geographically targeted 94.23 to Minnesota but which is sold over the counter in Minnesota or 94.24 by subscription to Minnesota residents; 94.25 (7) advertisements broadcast on a radio or television 94.26 station located in Minnesota; or 94.27 (8) any other solicitation by telegraphy, telephone, 94.28 computer database, cable, optic, microwave, or other 94.29 communication system. 94.30 This paragraph (a) must be construed without regard to the 94.31 state from which distribution of the materials originated or in 94.32 which they were prepared. 94.33 (b) The location within or without this state of 94.34 independent vendorsindependent of the retailerthat provide 94.35 products or services to the retailer in connection with its 94.36 solicitation of customers within this state, including such 95.1 products and services as creation of copy, printing, 95.2 distribution, and recording, is not considered in determining 95.3 whether the retailer is required to collect tax. 95.4 (c) A retailer not maintaining a place of business in this 95.5 state is presumed, subject to rebuttal, to be engaged in regular 95.6 solicitation within this state if it engages in any of the 95.7 activities in paragraph (a) and: 95.8 (1) makes 100 or more retail sales from outside this state 95.9 to destinations in this state during a period of 12 consecutive 95.10 months; or 95.11 (2) makes ten or more retail sales totaling more than 95.12 $100,000 from outside this state to destinations in this state 95.13 during a period of 12 consecutive months. 95.14 [EFFECTIVE DATE.] This section is effective for sales and 95.15 purchases made after June 30, 2001. 95.16 Sec. 29. [297A.668] [SOURCING OF SALE; SITUS IN THIS 95.17 STATE.] 95.18 Subdivision 1. [SOURCING RULES.] (a) The following 95.19 provisions apply regardless of the characterization of a product 95.20 as tangible personal property, a digital good, or a service; but 95.21 do not apply to telecommunications services, or the sales of 95.22 motor vehicles, watercraft, aircraft, modular homes, 95.23 manufactured homes, or mobile homes. These provisions only 95.24 apply to determine a seller's obligation to pay or collect and 95.25 remit a sales or use tax with respect to the seller's sale of a 95.26 product. These provisions do not affect the obligation of a 95.27 seller as purchaser to remit tax on the use of the product. 95.28 (b) When the product is received by the purchaser at a 95.29 business location of the seller, the sale is sourced to that 95.30 business location. 95.31 (c) When the product is not received by the purchaser at a 95.32 business location of the seller, the sale is sourced to the 95.33 location where receipt by the purchaser or the donee designated 95.34 by the purchaser occurs, including the location indicated by 95.35 instructions for delivery to the purchasers or the purchaser's 95.36 donee, known to the seller. 96.1 (d) When paragraphs (b) and (c) do not apply, the sale is 96.2 sourced to the location indicated by an address for the 96.3 purchaser that is available from the business records of the 96.4 seller that are maintained in the ordinary course of the 96.5 seller's business, when use of this address does not constitute 96.6 bad faith. 96.7 (e) When paragraphs (b), (c), and (d) do not apply, the 96.8 sale is sourced to the location indicated by an address for the 96.9 purchaser obtained during the consummation of the sale, 96.10 including the address of a purchaser's payment instrument if no 96.11 other address is available, when use of this address does not 96.12 constitute bad faith. 96.13 (f) When paragraphs (b), (c), (d), and (e) do not apply, 96.14 including the circumstance where the seller is without 96.15 sufficient information to apply the previous paragraphs, then 96.16 the location is determined by the address from which tangible 96.17 personal property was shipped, from which the digital good was 96.18 first available for transmission by the seller, or from which 96.19 the service was provided. 96.20 Subd. 2. [MULTIPLE POINTS OF USE.] (a) Notwithstanding the 96.21 provisions of subdivision 1, a business purchaser that is not a 96.22 holder of a direct pay permit that knows at the time of its 96.23 purchase of a digital good or service that the digital good or 96.24 service will be concurrently available for use in more than one 96.25 taxing jurisdiction shall deliver to the seller in conjunction 96.26 with its purchase a multiple points of use exemption certificate 96.27 disclosing this fact. 96.28 (b) Upon receipt of the multiple points of use exemption 96.29 certificate, the seller is relieved of the obligation to 96.30 collect, pay, or remit the applicable tax and the purchaser is 96.31 obligated to collect, pay, or remit the applicable tax on a 96.32 direct pay basis. 96.33 (c) A purchaser delivering the multiple points of use 96.34 exemption certificate may use any reasonable, but consistent and 96.35 uniform, method of apportionment that is supported by the 96.36 purchaser's business records as they exist at the time of the 97.1 consummation of the sale. 97.2 (d) The multiple points of use exemption certificate 97.3 remains in effect for all future sales by the seller to the 97.4 purchaser until it is revoked in writing. 97.5 (e) A holder of a direct pay permit is not required to 97.6 deliver a multiple points or use exemption certificate to the 97.7 seller. A direct pay permit holder shall follow the provisions 97.8 of paragraph (c) in apportioning the tax due on a digital good 97.9 or a service that will be concurrently available for use in more 97.10 than one taxing jurisdiction. 97.11 Subd. 3. [DEFINITION OF TERMS.] For purposes of this 97.12 section, the terms "receive" and "receipt" mean taking 97.13 possession of tangible personal property, making first use of 97.14 services, or taking possession of making first use of digital 97.15 goods, whichever occurs first. The terms receive and receipt do 97.16 not include possession by a carrier for hire on behalf of the 97.17 purchaser. 97.18 [EFFECTIVE DATE.] This section is effective for sales and 97.19 purchases made after December 31, 2001. 97.20 Sec. 30. Minnesota Statutes 2000, section 297A.67, 97.21 subdivision 2, is amended to read: 97.22 Subd. 2. [FOODPRODUCTSAND FOOD INGREDIENTS.] 97.23 Foodproducts including, but not limited to, cereal and cereal97.24products, butter, cheese, milk and milk products, oleomargarine,97.25meat and meat products, fish and fish products, eggs and egg97.26products, vegetables and vegetable products, fruit and fruit97.27products, spices and salt, sugar and sugar products, coffee and97.28coffee substitutes, tea, and cocoa and cocoa productsand food 97.29 ingredients are exempt. For purposes of this subdivision, 97.30 "food" and "food ingredients" mean substances, whether in 97.31 liquid, concentrated, solid, frozen, dried, or dehydrated form, 97.32 that are sold for ingestion or chewing by humans and are 97.33 consumed for their taste or nutritional value. Food and food 97.34 ingredients do not include candy, soft drinks, food sold through 97.35 vending machines, and prepared foods. Food and food ingredients 97.36 do not include alcoholic beverages, dietary supplements, and 98.1 tobacco. For purposes of this subdivision, "alcoholic 98.2 beverages" means beverages that are suitable for human 98.3 consumption and contain one-half of one percent or more of 98.4 alcohol by volume. For purposes of this subdivision, "tobacco" 98.5 means cigarettes, cigars, chewing or pipe tobacco, or any other 98.6 item that contains tobacco. For purposes of this subdivision, 98.7 "dietary supplements" means any product, other than tobacco, 98.8 intended to supplement the diet that: 98.9 (1) contains one or more of the following dietary 98.10 ingredients: 98.11 (i) a vitamin; 98.12 (ii) a mineral; 98.13 (iii) an herb or other botanical; 98.14 (iv) an amino acid; 98.15 (v) a dietary substance for use by humans to supplement the 98.16 diet by increasing the total dietary intake; and 98.17 (vi) a concentrate, metabolite, constituent, extract, or 98.18 combination of any ingredient described in items (i) to (v); 98.19 (2) is intended for ingestion in tablet, capsule, powder, 98.20 softgel, gelcap, or liquid form, or if not intended for 98.21 ingestion in such form, is not represented as conventional food 98.22 and is not represented for use as a sole item of a meal or of 98.23 the diet; and 98.24 (3) is required to be labeled as a dietary supplement, 98.25 identifiable by the supplement facts box found on the label and 98.26 as required pursuant to Code of Federal Regulations, title 21, 98.27 section 101.36. 98.28 [EFFECTIVE DATE.] This section is effective for sales and 98.29 purchases made after December 31, 2001. 98.30 Sec. 31. Minnesota Statutes 2000, section 297A.67, 98.31 subdivision 8, is amended to read: 98.32 Subd. 8. [CLOTHING.] (a) Clothingand wearing apparel,98.33including sewing materials to be directly incorporated into98.34wearing apparel, areis exempt. For purposes of this 98.35 subdivision,clothing and wearing apparel do not include the98.36following:99.1(1) articles designed primarily for use while engaging in a99.2specific sport or recreational activity that are not also worn99.3for general use;99.4(2) articles designed primarily to provide safety or99.5protection against injury while the user is engaged in99.6industrial or general job activities;99.7(3) all articles commonly or commercially known as jewelry99.8including, but not limited to, watches;99.9(4) nonprescription optical glasses of any sort;99.10(5) articles made entirely of fur on the hide or pelt, or99.11partially of such fur if the value of the fur is more than three99.12times the value of the next most valuable component material;99.13(6) perfume, lotions, creams, dyes, or other substances99.14that are applied to the skin or the hair; and99.15(7) luggage, bags, purses, wallets, or cases of any99.16sort."clothing" means all human wearing apparel suitable for 99.17 general use. 99.18 (b) Clothing includes, but is not limited to, aprons, 99.19 household and shop; athletic supporters; baby receiving 99.20 blankets; bathing suits and caps; beach capes and coats; belts 99.21 and suspenders; boots; coats and jackets; costumes; children and 99.22 adult diapers, including disposable; ear muffs; footlets; formal 99.23 wear; garters and garter belts; girdles; gloves and mittens for 99.24 general use; hats and caps; hosiery; insoles for shoes; lab 99.25 coats; neckties; overshoes; pantyhose; rainwear; rubber pants; 99.26 sandals; scarves; shoes and shoe laces; slippers; sneakers; 99.27 socks and stockings; steel-toed boots; underwear; uniforms, 99.28 athletic and nonathletic; and wedding apparel. 99.29 (c) Clothing does not include the following: 99.30 (1) belt buckles sold separately; 99.31 (2) costume masks sold separately; 99.32 (3) patches and emblems sold separately; 99.33 (4) sewing equipment and supplies, including but not 99.34 limited to, knitting needles, patterns, pins, scissors, sewing 99.35 machines, sewing needles, tape measures, and thimbles; 99.36 (5) sewing materials that become part of clothing, 100.1 including but not limited to, buttons, fabric, lace, thread, 100.2 yarn, and zippers; 100.3 (6) clothing accessories or equipment; 100.4 (7) sports or recreational equipment; and 100.5 (8) protective equipment. 100.6 Clothing also does not include apparel made from fur if a 100.7 uniform definition of "apparel made from fur" is developed by 100.8 the member states of the Streamlined Sales and Use Tax Agreement. 100.9 For purposes of this subdivision, "clothing accessories or 100.10 equipment" means incidental items worn on the person or in 100.11 conjunction with clothing. Clothing accessories include, but 100.12 are not limited to, briefcases; cosmetics; hair notions, 100.13 including barrettes, hair bows, and hairnets; handbags; 100.14 handkerchiefs; jewelry; nonprescription sunglasses; umbrellas; 100.15 wallets; watches; and wigs and hairpieces. "Sports or 100.16 recreational equipment" means items designed for human use and 100.17 worn in conjunction with an athletic or recreational activity 100.18 that are not suitable for general use. Sports and recreational 100.19 equipment includes, but is not limited to, ballet and tap shoes; 100.20 cleated or spiked athletic shoes; baseball, bowling, boxing, 100.21 hockey, and golf gloves; goggles; hand and elbow guards; life 100.22 preservers and vests; mouth guards; roller and ice skates; shin 100.23 guards; shoulder pads; ski boots; waders; and wetsuits and 100.24 fins. "Protective equipment" means items for human wear and 100.25 designed as protection of the wearer against injury or disease 100.26 or as protection against damage or injury of other persons or 100.27 property but not suitable for general use. Protective equipment 100.28 includes, but is not limited to, breathing masks; clean room 100.29 apparel and equipment; ear and hearing protectors; face shields; 100.30 finger guards; hard hats; helmets; paint or dust respirators; 100.31 protective gloves; safety glasses and goggles; safety belts; 100.32 tool belts; and welders gloves and masks. 100.33 [EFFECTIVE DATE.] This section is effective for sales and 100.34 purchases made after December 31, 2001. 100.35 Sec. 32. Minnesota Statutes 2000, section 297A.67, 100.36 subdivision 23, is amended to read: 101.1 Subd. 23. [OCCASIONAL SALES.] Isolated and occasional 101.2 sales in Minnesota not made in the normal course of business,101.3andof selling that kind of property or service are exempt. The 101.4 storage, use, or consumption of property or servicesresulting101.5from such sales, areacquired as a result of such a sale is 101.6 exempt. This exemption does not apply to sales of tangible 101.7 personal property primarily used in a trade or business. 101.8 [EFFECTIVE DATE.] This section is effective for sales and 101.9 purchases made after June 30, 2001. 101.10 Sec. 33. Minnesota Statutes 2000, section 297A.67, 101.11 subdivision 24, is amended to read: 101.12 Subd. 24. [CONSTITUTIONAL PROHIBITIONS.]The gross101.13receipts fromThe sale of and the storage, use, orother101.14 consumption in Minnesota of tangible personal property,tickets,101.15or admissions, electricity, gas, or local exchange telephone101.16serviceor services, that the state of Minnesota is prohibited 101.17 from taxing under the Constitution or laws of the United States 101.18 or under the Constitution of Minnesota, are exempt. 101.19 [EFFECTIVE DATE.] This section is effective for sales and 101.20 purchases made after June 30, 2001. 101.21 Sec. 34. Minnesota Statutes 2000, section 297A.67, 101.22 subdivision 25, is amended to read: 101.23 Subd. 25. [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and 101.24 related services used in the maintenance of cemetery grounds are 101.25 exempt. For purposes of this subdivision, "lawn care and 101.26 related services" means the services listed in section 297A.61, 101.27 subdivision163, paragraph (g), clause (6), item (vi), and 101.28 "cemetery" means a cemetery for human burial. 101.29 [EFFECTIVE DATE.] This section is effective for sales and 101.30 purchases made after June 30, 2001. 101.31 Sec. 35. Minnesota Statutes 2000, section 297A.67, is 101.32 amended by adding a subdivision to read: 101.33 Subd. 26. [TRADE ALLOWANCE.] The amount allowed as a 101.34 credit against the sales price for tangible personal property 101.35 taken in trade for resale is exempt. 101.36 [EFFECTIVE DATE.] This section is effective for sales and 102.1 purchases made after December 31, 2001. 102.2 Sec. 36. Minnesota Statutes 2000, section 297A.67, is 102.3 amended by adding a subdivision to read: 102.4 Subd. 27. [SEWING MATERIALS.] Sewing materials are exempt. 102.5 For purposes of this subdivision "sewing materials" mean fabric, 102.6 thread, zippers, interfacing, buttons, trim, and other items 102.7 that are usually directly incorporated into the construction of 102.8 clothing, regardless of whether it is actually used for making 102.9 clothing. It does not include batting, foam, or fabric 102.10 specifically manufactured for arts and craft projects, or other 102.11 materials for craft projects. 102.12 [EFFECTIVE DATE.] This section is effective for sales and 102.13 purchases made after December 31, 2001. 102.14 Sec. 37. Minnesota Statutes 2000, section 297A.67, is 102.15 amended by adding a subdivision to read: 102.16 Subd. 28. [AMBULANCE SUPPLIES, PARTS, AND EQUIPMENT.] The 102.17 following sales to or use by an ambulance service licensed under 102.18 section 144E.10 are exempt: 102.19 (1) supplies and equipment used to provide medical care; 102.20 and 102.21 (2) repair and replacement parts for ambulances. 102.22 [EFFECTIVE DATE.] This section is effective for sales and 102.23 purchases made after July 31, 2001. 102.24 Sec. 38. Minnesota Statutes 2000, section 297A.68, 102.25 subdivision 2, is amended to read: 102.26 Subd. 2. [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.] 102.27 (a) Materials stored, used, or consumed in industrial production 102.28 of personal property intended to be sold ultimately at retail 102.29 are exempt, whether or not the item so used becomes an 102.30 ingredient or constituent part of the property produced. 102.31 Materials that qualify for this exemption include, but are not 102.32 limited to, the following: 102.33 (1) chemicals, including chemicals used for cleaning food 102.34 processing machinery and equipment; 102.35 (2) materials, including chemicals, fuels, and electricity 102.36 purchased by persons engaged in industrial production to treat 103.1 waste generated as a result of the production process; 103.2 (3) fuels, electricity, gas, and steam used or consumed in 103.3 the production process, except that electricity, gas, or steam 103.4 used for space heating, cooling, or lighting is exemptonlyif 103.5 (i) it is in excess of the average climate control or lighting 103.6 for the production area, and (ii) it is necessary to produce 103.7 that particularindustrialproduct; 103.8 (4) petroleum products and lubricants; 103.9 (5) packaging materials, including returnable containers 103.10 used in packaging food and beverage products; 103.11 (6) accessory tools, equipment, and other items that are 103.12 separate detachable units with an ordinary useful life of less 103.13 than 12 months used in producing a direct effect upon the 103.14 product; and 103.15 (7) the following materials, tools, and equipment used in 103.16 metalcasting: crucibles, thermocouple protection sheaths and 103.17 tubes, stalk tubes, refractory materials, molten metal filters 103.18 and filter boxes, degassing lances, and base blocks. 103.19 (b) This exemption does not include: 103.20 (1) machinery, equipment, implements, tools, accessories, 103.21 appliances, contrivances and furniture and fixtures, except 103.22 those listed in paragraph (a), clause (6); and 103.23 (2) petroleum and special fuels used in producing or 103.24 generating power for propelling ready-mixed concrete trucks on 103.25 the public highways of this state. 103.26 (c) Industrial production includes, but is not limited to, 103.27 research, development, design or production of any tangible 103.28 personal property, manufacturing, processing (other than by 103.29 restaurants and consumers) of agricultural products (whether 103.30 vegetable or animal), commercial fishing, refining, smelting, 103.31 reducing, brewing, distilling, printing, mining, quarrying, 103.32 lumbering, generating electricity and the production of road 103.33 building materials. Industrial production does not include 103.34 painting, cleaning, repairing or similar processing of property 103.35 except as part of the original manufacturing process. 103.36 [EFFECTIVE DATE.] This section is effective for sales and 104.1 purchases made after June 30, 2001. 104.2 Sec. 39. Minnesota Statutes 2000, section 297A.68, 104.3 subdivision 3, is amended to read: 104.4 Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 104.5 SERVICES.] (a) Materials stored, used, or consumed in providing 104.6 a taxable service listed in section 297A.61, subdivision163, 104.7 paragraph (g), clause (6), intended to be sold ultimately at 104.8 retail are exempt. 104.9 (b) This exemption includes, but is not limited to: 104.10 (1) chemicals, lubricants, packaging materials, seeds, 104.11 trees, fertilizers, and herbicides, if these items are used or 104.12 consumed in providing the taxable service; 104.13 (2) chemicals used to treat waste generated as a result of 104.14 providing the taxable service; 104.15 (3) accessory tools, equipment, and other items that are 104.16 separate detachable units used in providing the service and that 104.17 have an ordinary useful life of less than 12 months; and 104.18 (4) fuel, electricity, gas, and steam used or consumed in 104.19 the production process, except that electricity, gas, or steam 104.20 used for space heating, cooling, or lighting is exemptonlyif 104.21 (i) it is in excess of average climate control or lighting, and 104.22 (ii) it is necessary to produce that particulartaxableservice. 104.23 (c) This exemption does not include machinery, equipment, 104.24 implements, tools, accessories, appliances, contrivances, 104.25 furniture, and fixtures used in providing the taxable service. 104.26 [EFFECTIVE DATE.] This section is effective for sales and 104.27 purchases made after June 30, 2001. 104.28 Sec. 40. Minnesota Statutes 2000, section 297A.68, 104.29 subdivision 5, is amended to read: 104.30 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 104.31 exempt. The tax must be imposed and collected as if the rate 104.32 under section 297A.62, subdivision 1, applied, and then refunded 104.33 in the manner provided in section 297A.75. 104.34 "Capital equipment" means machinery and equipment purchased 104.35 or leased, and used in this state by the purchaser or lessee 104.36 primarily for manufacturing, fabricating, mining, or refining 105.1 tangible personal property to be sold ultimately at retail.105.2Capital equipment meansif the machinery and equipment is 105.3 essential to the integrated production process of manufacturing, 105.4 fabricating, mining, or refining. Capital equipment also 105.5 includes machinery and equipment used to electronically transmit 105.6 results retrieved by a customer of an online computerized data 105.7 retrieval system. 105.8 (b) Capital equipment includes, but is not limited to: 105.9 (1) machinery and equipment used to operate, control, or 105.10 regulate the production equipment; 105.11 (2) machinery and equipment used for research and 105.12 development, design, quality control, and testing activities; 105.13 (3) environmental control devices that are used to maintain 105.14 conditions such as temperature, humidity, light, or air pressure 105.15 when those conditions are essential to and are part of the 105.16 production process; 105.17 (4) materials and supplies used to construct and install 105.18 machinery or equipment; 105.19 (5) repair and replacement parts, including accessories, 105.20 whether purchased as spare parts, repair parts, or as upgrades 105.21 or modifications to machinery or equipment; 105.22 (6) materials used for foundations that support machinery 105.23 or equipment; 105.24 (7) materials used to construct and install special purpose 105.25 buildings used in the production process; and 105.26 (8) ready-mixed concrete trucks in which the ready-mixed 105.27 concrete is mixed as part of the delivery process. 105.28 (c) Capital equipment does not include the following: 105.29 (1) motor vehicles taxed under chapter 297B; 105.30 (2) machinery or equipment used to receive or store raw 105.31 materials; 105.32 (3) building materials, except for materials included in 105.33 paragraph (b), clauses (6) and (7); 105.34 (4) machinery or equipment used for nonproduction purposes, 105.35 including, but not limited to, the following: plant security, 105.36 fire prevention, first aid, and hospital stations; support 106.1 operations or administration; pollution control; and plant 106.2 cleaning, disposal of scrap and waste, plant communications, 106.3 space heating, cooling, lighting, or safety; 106.4 (5) farm machinery and aquaculture production equipment as 106.5 defined by section 297A.61, subdivisions 12 and 13; 106.6 (6) machinery or equipment purchased and installed by a 106.7 contractor as part of an improvement to real property; or 106.8 (7) any other item that is not essential to the integrated 106.9 process of manufacturing, fabricating, mining, or refining. 106.10 (d) For purposes of this subdivision: 106.11 (1) "Machinery" means mechanical, electronic, or electrical 106.12 devices, including computers and computer software, that are 106.13 purchased or constructed to be used for the activities set forth 106.14 in paragraph (a), beginning with the removal of raw materials 106.15 from inventory through completion of the product, including 106.16 packaging of the product. 106.17 (2) "Equipment" means independent devices or tools separate 106.18 from machinery but essential to an integrated production 106.19 process, including computers and computer software, used in 106.20 operating, controlling, or regulating machinery and equipment; 106.21 and any subunit or assembly comprising a component of any 106.22 machinery or accessory or attachment parts of machinery, such as 106.23 tools, dies, jigs, patterns, and molds. 106.24 (3) "Primarily" means machinery and equipment used 50 106.25 percent or more of the time in an activity described in 106.26 paragraph (a). 106.27 (4) "Manufacturing" means an operation or series of 106.28 operations where raw materials are changed in form, composition, 106.29 or condition by machinery and equipment and which results in the 106.30 production of a new article of tangible personal property. For 106.31 purposes of this subdivision, "manufacturing" includes the 106.32 generation of electricity or steam to be sold at retail. 106.33 (5) "Fabricating" means to make, build, create, produce, or 106.34 assemble components or property to work in a new or different 106.35 manner. 106.36 (6) "Mining" means the extraction of minerals, ores, stone, 107.1 or peat. 107.2 (7) "Refining" means the process of converting a natural 107.3 resource to a product, including the treatment of water to be 107.4 sold at retail. 107.5 (8)"Integrated production process" means a process107.6beginning with the removal of raw materials from inventory107.7through the completion of the product, including packaging of107.8the product.107.9(9)"Online data retrieval system" means a system whose 107.10 cumulation of information is equally available and accessible to 107.11 all its customers. 107.12(10)(9) "Machinery and equipment used for pollution 107.13 control" means machinery and equipment used solely to eliminate, 107.14 prevent, or reduce pollution resulting from an activity 107.15 described in paragraph (a). 107.16 [EFFECTIVE DATE.] This section is effective for sales and 107.17 purchases made after June 30, 2001. 107.18 Sec. 41. Minnesota Statutes 2000, section 297A.68, 107.19 subdivision 11, is amended to read: 107.20 Subd. 11. [ADVERTISING MATERIALS.]MaterialMaterials 107.21 designed to advertise and promote the sale of merchandise or 107.22 servicesisare exempt ifthe material is purchased and stored107.23for the purpose of subsequently shipping or otherwise107.24transferring outside the state by the purchaser for laterthese 107.25 materials are mailed or transferred to a person outside the 107.26 state for use solely outside the stateof Minnesota. Mailing 107.27 and reply envelopes and cards used exclusively in connection 107.28 with these advertising and promotional materials are included in 107.29 this exemption. The exemption applies regardless of where the 107.30 mailing occurs. The storage of these materials in the state for 107.31 the purpose of subsequently shipping or otherwise transferring 107.32 the material out of state is also exempt if the other conditions 107.33 in this subdivision are met. 107.34 [EFFECTIVE DATE.] This section is effective for sales and 107.35 purchases made after June 30, 2001. 107.36 Sec. 42. Minnesota Statutes 2000, section 297A.68, 108.1 subdivision 13, is amended to read: 108.2 Subd. 13. [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible 108.3 personal property is exempt ifthe property, without108.4intermediate use, isall of the following conditions are met: 108.5 (1) the property, without intermediate use, is shipped or 108.6 transported outside Minnesota by the purchaser or is stored, 108.7 processed, fabricated or manufactured into, attached to or 108.8 incorporated into other tangible personal property that is 108.9 transported or shipped outside Minnesota; and 108.10 (2) the property is used in a trade or business outside 108.11 Minnesota after being shipped or transported outside of 108.12 Minnesota, and is not returned to Minnesota, except in the 108.13 course of interstate commerce; and 108.14 (3) the property is either (i) not subject to tax in the 108.15 state or country to which it is transported for storage or use, 108.16 or (ii) to be used in other states or countries as part of a 108.17 maintenance contract. 108.18 (b) For purposes of this subdivision, storage or 108.19 processing, fabricating, manufacturing, attaching to, or 108.20 incorporating into other property is not intermediate use. 108.21 [EFFECTIVE DATE.] This section is effective for sales and 108.22 purchases made after June 30, 2001. 108.23 Sec. 43. Minnesota Statutes 2000, section 297A.68, 108.24 subdivision 14, is amended to read: 108.25 Subd. 14. [TEMPORARY STORAGEPROPERTY IN TRANSIT.] 108.26 Tangible personal property is exempt if all of the following 108.27 conditions are met: 108.28 (1) it is shipped or brought into Minnesota by acommon108.29 for-hire carrier; 108.30 (2) withoutintermediateuse, it is kept in a public 108.31 warehouse; 108.32 (3) it is kept for the purpose of being later transported 108.33 outside Minnesota; and 108.34 (4) after storage, it is used solely outside Minnesota, 108.35 except in the course of interstate commerce. 108.36 [EFFECTIVE DATE.] This section is effective for sales and 109.1 purchases made after June 30, 2001. 109.2 Sec. 44. Minnesota Statutes 2000, section 297A.68, 109.3 subdivision 18, is amended to read: 109.4 Subd. 18. [CUSTOM COMPUTER SOFTWARE.] The design, 109.5 development, writing, translation, fabrication, lease, or 109.6 transfer for a consideration of title or possession of a custom 109.7 computer program is exempt. "Custom computer program" means a 109.8 computer program prepared to the special order of the customer, 109.9 either in the form of written procedures orin the form of109.10storage media on which, or in which, the program is109.11recordedcontained on tapes, discs, cards, or another device, or 109.12 any required documentation or manuals designed to facilitate the 109.13 use of the custom computer program transferred. It includes 109.14 those services represented by separately stated charges for 109.15 modifications to an existing prewritten program that are 109.16 prepared to the special order of the customer. It does not 109.17 include a "canned" or prewritten computer program that is held 109.18 or existing for general or repeated sale or lease, even if the 109.19 prewritten or "canned" program was initially developed on a 109.20 custom basis or for in-house use. Modification to an existing 109.21 prewritten program to meet the customer's needs is custom 109.22 computer programming only to the extent of the modification. 109.23 [EFFECTIVE DATE.] This section is effective for sales and 109.24 purchases made after June 30, 2001. 109.25 Sec. 45. Minnesota Statutes 2000, section 297A.68, 109.26 subdivision 19, is amended to read: 109.27 Subd. 19. [PETROLEUM PRODUCTS.] The following petroleum 109.28 products are exempt: 109.29 (1) products upon which a tax has been imposed and paid 109.30 under chapter 296A, and for which no refund has been or will be 109.31 allowed because the buyer used the fuel for nonhighway use; 109.32 (2) products that are used in the improvement of 109.33 agricultural land by constructing, maintaining, and repairing 109.34 drainage ditches, tile drainage systems, grass waterways, water 109.35 impoundment, and other erosion control structures; 109.36 (3) products purchased by a transit system receiving 110.1 financial assistance under section 174.24, 256B.0625, 110.2 subdivision 17, or 473.384; 110.3 (4) products purchased by an ambulance service licensed 110.4 under chapter 144E; 110.5 (5) products used in a passenger snowmobile, as defined in 110.6 section 296A.01, subdivision 39, for off-highway business use as 110.7 part of the operations of a resort as provided under section 110.8 296A.16, subdivision 2, clause (2); or 110.9(5)(6) products purchased by a state or a political 110.10 subdivision of a state for use in motor vehicles exempt from 110.11 registration under section 168.012, subdivision 1, paragraph (b). 110.12 [EFFECTIVE DATE.] This section is effective for sales and 110.13 purchases made after July 31, 2001. 110.14 Sec. 46. Minnesota Statutes 2000, section 297A.68, 110.15 subdivision 25, is amended to read: 110.16 Subd. 25. [OCCASIONAL SALESSALE OF PROPERTY USED IN A 110.17 TRADE OR BUSINESS.] (a)Isolated or occasional sales ofThe sale 110.18 of tangible personal propertyin Minnesotaprimarily used in a 110.19 trade or business is exempt if the sale is not made in the 110.20 normal course of business of selling that kind of propertyare110.21exempt. The storage, use, or consumption of property acquired110.22as a result of such a sale is exempt.110.23(b) This exemption applies to a sale of tangible personal110.24property primarily used in a trade or business onlyand if one 110.25 of the following conditions is satisfied: 110.26 (1) the sale occurs in a transaction subject to or 110.27 described in section 118, 331, 332, 336, 337, 338, 351, 355, 110.28 368, 721, 731, 1031, or 1033 of the Internal Revenue Code; 110.29 (2) the sale is between members of a controlled group as 110.30 defined in section 1563(a) of the Internal Revenue Code; 110.31 (3) the sale is a sale of farm machinery; 110.32 (4) the sale is a farm auction sale; 110.33 (5) the sale is a sale of substantially all of the assets 110.34 of a trade or business; or 110.35 (6) the total amount of gross receipts from the sale of 110.36 trade or business property made during the calendar month of the 111.1 sale and the preceding 11 calendar months does not exceed $1,000. 111.2 The use, storage, distribution, or consumption of tangible 111.3 personal property acquired as a result of a sale exempt under 111.4 this subdivision is also exempt. 111.5(c)(b) For purposes of this subdivision, the following 111.6 terms have the meanings given. 111.7 (1) A "farm auction" is a public auction conducted by a 111.8 licensed auctioneer if substantially all of the property sold 111.9 consists of property used in the trade or business of farming 111.10 and property not used primarily in a trade or business. 111.11 (2) "Trade or business" includes the assets of a separate 111.12 division, branch, or identifiable segment of a trade or business 111.13 if, before the sale, the income and expenses attributable to the 111.14 separate division, branch, or identifiable segment could be 111.15 separately ascertained from the books of account or record (the 111.16 lease or rental of an identifiable segment does not qualify for 111.17 the exemption). 111.18 (3) A "sale of substantially all of the assets of a trade 111.19 or business" must occur as a single transaction or a series of 111.20 related transactions within the 12-month period beginning on the 111.21 date of the first sale of assets intended to qualify for the 111.22 exemption provided in paragraph(b)(a), clause (5). 111.23 [EFFECTIVE DATE.] This section is effective for sales and 111.24 purchases made after June 30, 2001. 111.25 Sec. 47. Minnesota Statutes 2000, section 297A.69, 111.26 subdivision 2, is amended to read: 111.27 Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 111.28 (a) Materials stored, used, or consumed in agricultural 111.29 production of personal property intended to be sold ultimately 111.30 at retail are exempt, whether or not the item becomes an 111.31 ingredient or constituent part of the property produced. 111.32 Materials that qualify for this exemption include, but are not 111.33 limited to, the following: 111.34 (1) feeds, seeds, trees, fertilizers, and herbicides, 111.35 including when purchased for use by farmers in a federal or 111.36 state farm or conservation program; 112.1 (2) materials sold to a veterinarian to be used or consumed 112.2 in the care, medication, and treatment of agricultural 112.3 production animals and horses; 112.4 (3) chemicals, including chemicals used for cleaning food 112.5 processing machinery and equipment; 112.6 (4) materials, including chemicals, fuels, and electricity 112.7 purchased by persons engaged in agricultural production to treat 112.8 waste generated as a result of the production process; 112.9 (5) fuels, electricity, gas, and steam used or consumed in 112.10 the production process, except that electricity, gas, or steam 112.11 used for space heating, cooling, or lighting is exemptonlyif 112.12 (i) it is in excess of the average climate control or lighting 112.13 for the production area, and (ii) it is necessary to produce 112.14 that particularagriculturalproduct; 112.15 (6) petroleum products and lubricants; 112.16 (7) packaging materials, including returnable containers 112.17 used in packaging food and beverage products; and 112.18 (8) accessory tools and equipment that are separate 112.19 detachable units with an ordinary useful life of less than 12 112.20 months used in producing a direct effect upon the product. 112.21 Machinery, equipment, implements, tools, accessories, 112.22 appliances, contrivances, and furniture and fixtures, except 112.23 those listed in this clause are not included within this 112.24 exemption. 112.25 (b) For purposes of this subdivision, "agricultural 112.26 production" includes, but is not limited to, horticulture, 112.27 floriculture, maple syrup harvesting, and the raising of pets, 112.28 fur-bearing animals, research animals, horses, farmed cervidae 112.29 as defined in section 17.451, subdivision 2, llamas as defined 112.30 in section 17.455, subdivision 2, and ratitae as defined in 112.31 section 17.453, subdivision 3. 112.32 [EFFECTIVE DATE.] This section is effective for sales and 112.33 purchases made after June 30, 2001. 112.34 Sec. 48. Minnesota Statutes 2000, section 297A.70, 112.35 subdivision 1, is amended to read: 112.36 Subdivision 1. [SCOPE.] (a) To the extent provided in this 113.1 section, the gross receipts from sales of items to or by, and 113.2 storage, distribution, use, or consumption of items by the 113.3 organizations listed in this section are specifically exempted 113.4 from the taxes imposed by this chapter. 113.5 (b) Notwithstanding any law to the contrary enacted before 113.6 1992, only sales to governments and political subdivisions 113.7 listed in this section are exempt from the taxes imposed by this 113.8 chapter. 113.9 (c) "Sales" includes purchases under an installment 113.10 contract or lease purchase agreement under section 465.71. 113.11 [EFFECTIVE DATE.] This section is effective for sales and 113.12 purchases made after June 30, 2001. 113.13 Sec. 49. Minnesota Statutes 2000, section 297A.70, 113.14 subdivision 2, is amended to read: 113.15 Subd. 2. [SALES TO GOVERNMENT.] (a) All sales, except 113.16 those listed in paragraph (b), to the following governments and 113.17 political subdivisions, or to the listed agencies or 113.18 instrumentalities of governments and political subdivisions, are 113.19 exempt: 113.20 (1) the United States and its agencies and 113.21 instrumentalities; 113.22 (2) school districts, the University of Minnesota, state 113.23 universities, community colleges, technical colleges, state 113.24 academies, the Perpich Minnesota center for arts education, and 113.25 an instrumentality of a political subdivision that is accredited 113.26 as an optional/special function school by the North Central 113.27 Association of Colleges and Schools; 113.28 (3) hospitals and nursing homes owned and operated by 113.29 political subdivisions of the state; 113.30 (4) other states or political subdivisions of other states, 113.31 if the sale would be exempt from taxation if it occurred in that 113.32 state; and 113.33 (5) sales to public libraries, public library systems, 113.34 multicounty, multitype library systems as defined in section 113.35 134.001, county law libraries under chapter 134A, state agency 113.36 libraries, the state library under section 480.09, and the 114.1 legislative reference library. 114.2 (b) This exemption does not apply to the sales of the 114.3 following products and services: 114.4 (1) building, construction, or reconstruction materials 114.5 purchased by a contractor or a subcontractor as a part of a 114.6 lump-sum contract or similar type of contract with a guaranteed 114.7 maximum price covering both labor and materials for use in the 114.8 construction, alteration, or repair of a building or facility; 114.9 (2) construction materials purchased by tax exempt entities 114.10 or their contractors to be used in constructing buildings or 114.11 facilities which will not be used principally by the tax exempt 114.12 entities; 114.13 (3) the leasing of a motor vehicle as defined in section 114.14 297B.01, subdivision 5, except for leases entered into by the 114.15 United States or its agencies or instrumentalities; or 114.16 (4) meals and lodging as defined under section 297A.61, 114.17subdivisionssubdivision 3,paragraphparagraphs (d),and16114.18 (g),paragraph (c)clause (2), except for meals and lodging 114.19 purchased directly by the United States or its agencies or 114.20 instrumentalities. 114.21 (c) As used in this subdivision, "school districts" means 114.22 public school entities and districts of every kind and nature 114.23 organized under the laws of the state of Minnesota, and any 114.24 instrumentality of a school district, as defined in section 114.25 471.59. 114.26 [EFFECTIVE DATE.] This section is effective for sales and 114.27 purchases made after June 30, 2001. 114.28 Sec. 50. Minnesota Statutes 2000, section 297A.70, 114.29 subdivision 3, is amended to read: 114.30 Subd. 3. [SALES OF CERTAIN GOODS AND SERVICES TO 114.31 GOVERNMENT.] (a) The following sales to or use by the specified 114.32 governments and political subdivisions of the state are exempt: 114.33 (1)supplies and equipment used to provide medical care in114.34the operation of an ambulance service owned and operated by a114.35political subdivision of the state;114.36(2)repair and replacement parts for emergency rescue 115.1 vehicles, fire trucks, and fire apparatus to a political 115.2 subdivision; 115.3(3)(2) machinery and equipment, except for motor vehicles, 115.4 used directly for mixed municipal solid waste management 115.5 services at a solid waste disposal facility as defined in 115.6 section 115A.03, subdivision 10; 115.7(4)(3) chore and homemaking services to a political 115.8 subdivision of the state to be provided to elderly or disabled 115.9 individuals; 115.10(5)(4) telephone services to the department of 115.11 administration that are used to provide telecommunications 115.12 services through the intertechnologies revolving fund; 115.13(6)(5) firefighter personal protective equipment as 115.14 defined in paragraph (b), if purchased or authorized by and for 115.15 the use of an organized fire department, fire protection 115.16 district, or fire company regularly charged with the 115.17 responsibility of providing fire protection to the state or a 115.18 political subdivision; 115.19(7)(6) bullet-resistant body armor that provides the 115.20 wearer with ballistic and trauma protection, if purchased by a 115.21 law enforcement agency of the state or a political subdivision 115.22 of the state, or a licensed peace officer, as defined in section 115.23 626.84, subdivision 1; 115.24(8)(7) motor vehicles purchased or leased by political 115.25 subdivisions of the state if the vehicles are exempt from 115.26 registration under section 168.012, subdivision 1, paragraph 115.27 (b), or exempt from taxation under section 473.448; 115.28(9)(8) equipment designed to process, dewater, and 115.29 recycle biosolids for wastewater treatment facilities of 115.30 political subdivisions, and materials incidental to installation 115.31 of that equipment; and materials used to construct buildings to 115.32 house the equipment, if the materials are purchased after June 115.33 30, 1998, and before July 1, 2001; and 115.34(10)(9) sales to a town of gravel and of machinery, 115.35 equipment, and accessories, except motor vehicles, used 115.36 exclusively for road and bridge maintenance, and leases by a 116.1 town of motor vehicles exempt from tax under section 297B.03, 116.2 clause (10). 116.3 (b) For purposes of this subdivision, "firefighters 116.4 personal protective equipment" means helmets, including face 116.5 shields, chin straps, and neck liners; bunker coats and pants, 116.6 including pant suspenders; boots; gloves; head covers or hoods; 116.7 wildfire jackets; protective coveralls; goggles; self-contained 116.8 breathing apparatus; canister filter masks; personal alert 116.9 safety systems; spanner belts; optical or thermal imaging search 116.10 devices; and all safety equipment required by the Occupational 116.11 Safety and Health Administration. 116.12 [EFFECTIVE DATE.] This section is effective for sales and 116.13 purchases made after July 31, 2001. 116.14 Sec. 51. Minnesota Statutes 2000, section 297A.70, 116.15 subdivision 4, is amended to read: 116.16 Subd. 4. [SALES TO NONPROFIT GROUPS.] (a) All sales, 116.17 except those listed in paragraph (b), to the following 116.18 "nonprofit organizations" are exempt: 116.19 (1)an entitya corporation, society, association, 116.20 foundation, or institution organized and operated exclusively 116.21 for charitable, religious, or educational purposes if the item 116.22 purchased is used in the performance of charitable, religious, 116.23 or educational functions; and 116.24 (2) any senior citizen group or association of groups that: 116.25 (i) in general limits membership to persons who are either 116.26 age 55 or older, or physically disabled; and 116.27 (ii) is organized and operated exclusively for pleasure, 116.28 recreation, and other nonprofit purposes, no part of the net 116.29 earnings of which inures to the benefit of any private 116.30 shareholders; and. 116.31(3) an entity organized and operated exclusively to116.32maintain116.33 For purposes of this subdivision, charitable purpose includes 116.34 the maintenance of a cemetery owned by a religious organization. 116.35 (b) This exemption does not apply to the following sales: 116.36 (1) building, construction, or reconstruction materials 117.1 purchased by a contractor or a subcontractor as a part of a 117.2 lump-sum contract or similar type of contract with a guaranteed 117.3 maximum price covering both labor and materials for use in the 117.4 construction, alteration, or repair of a building or facility; 117.5 (2) construction materials purchased by tax-exempt entities 117.6 or their contractors to be used in constructing buildings or 117.7 facilities that will not be used principally by the tax-exempt 117.8 entities; and 117.9 (3) meals and lodging as defined under section 297A.61, 117.10subdivisionssubdivision 3,paragraphparagraphs (d),and 117.1116(g),paragraph (c)clause (2); and 117.12 (4) leasing of a motor vehicle as defined in section 117.13 297B.01, subdivision 5, except as provided in paragraph (c). 117.14 (c) This exemption applies to the leasing of a motor 117.15 vehicle as defined in section 297B.01, subdivision 5, only if 117.16 the vehicle is: 117.17 (1) a truck, as defined in section 168.011, a bus, as 117.18 defined in section 168.011, or a passenger automobile, as 117.19 defined in section 168.011, if the automobile is designed and 117.20 used for carrying more than nine persons including the driver; 117.21 and 117.22 (2) intended to be used primarily to transport tangible 117.23 personal property or individuals, other than employees, to whom 117.24 the organization provides service in performing its charitable, 117.25 religious, or educational purpose. 117.26 (d) A limited liability company also qualifies for 117.27 exemption under this subdivision if (1) it consists of a sole 117.28 member that would qualify for the exemption, and (2) the items 117.29 purchased qualify for the exemption. 117.30 [EFFECTIVE DATE.] This section is effective for sales and 117.31 purchases made after June 30, 2001. 117.32 Sec. 52. Minnesota Statutes 2000, section 297A.70, 117.33 subdivision 7, is amended to read: 117.34 Subd. 7. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 117.35 Sales, except for those listed in paragraph (c), to a hospital 117.36 are exempt, if the items purchased are used in providing 118.1 hospital services. For purposes of this subdivision, "hospital" 118.2 means a hospital organized and operated for charitable purposes 118.3 within the meaning of section 501(c)(3) of the Internal Revenue 118.4 Code, and licensed under chapter 144 or by any other 118.5 jurisdiction, and "hospital services" are services authorized or 118.6 required to be performed by a "hospital" under chapter 144. 118.7 (b) Sales, except for those listed in paragraph (c), to an 118.8 outpatient surgical center are exempt, if the items purchased 118.9 are used in providing outpatient surgical services. For 118.10 purposes of this subdivision, "outpatient surgical center" means 118.11 an outpatient surgical center organized and operated for 118.12 charitable purposes within the meaning of section 501(c)(3) of 118.13 the Internal Revenue Code, and licensed under chapter 144 or by 118.14 any other jurisdiction. For the purposes of this subdivision, 118.15 "outpatient surgical services" means: (1) services authorized 118.16 or required to be performed by an outpatient surgical center 118.17 under chapter 144or under the applicable licensure law of any118.18other jurisdiction; and (2) urgent care. For purposes of this 118.19 subdivision, "urgent care" means health services furnished to a 118.20 person whose medical condition is sufficiently acute to require 118.21 treatment unavailable through, or inappropriate to be provided 118.22 by, a clinic or physician's office, but not so acute as to 118.23 require treatment in a hospital emergency room. 118.24 (c) This exemption does not apply to the following products 118.25 and services: 118.26 (1) purchases made by a clinic, physician's office, or any 118.27 other medical facility not operating as a hospital or outpatient 118.28 surgical center, even though the clinic, office, or facility may 118.29 be owned and operated by a hospital or outpatient surgical 118.30 center; 118.31 (2) sales under section 297A.61, subdivisions 3, paragraph 118.32 (d), and 16, paragraph (c); 118.33 (3) building and construction materials used in 118.34 constructing buildings or facilities that will not be used 118.35 principally by the hospital or outpatient surgical center; 118.36 (4) building, construction, or reconstruction materials 119.1 purchased by a contractor or a subcontractor as a part of a 119.2 lump-sum contract or similar type of contract with a guaranteed 119.3 maximum price covering both labor and materials for use in the 119.4 construction, alteration, or repair of a hospital or outpatient 119.5 surgical center; or 119.6 (5) the leasing of a motor vehicle as defined in section 119.7 297B.01, subdivision 5. 119.8 (d) A limited liability company also qualifies for 119.9 exemption under this subdivision if (1) it consists of a sole 119.10 member that would qualify for the exemption, and (2) the items 119.11 purchased qualify for the exemption. 119.12 [EFFECTIVE DATE.] This section is effective for sales and 119.13 purchases made after June 30, 2001. 119.14 Sec. 53. Minnesota Statutes 2000, section 297A.70, 119.15 subdivision 8, is amended to read: 119.16 Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 119.17 SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 119.18 but not limited to, end user equipment used for construction, 119.19 ownership, operation, maintenance, and enhancement of the 119.20 backbone system of the regionwide public safety radio 119.21 communication system established under sections 473.891 to 119.22 473.905, are exempt. For purposes of this subdivision, backbone 119.23 system is defined in section 473.891, subdivision 9. This 119.24 subdivision is effective for purchases, sales, storage, use, or 119.25 consumption occurring before August 1, 2003, in the counties of 119.26 Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 119.27 [EFFECTIVE DATE.] This section is effective for sales and 119.28 purchases made after June 30, 2001. 119.29 Sec. 54. Minnesota Statutes 2000, section 297A.70, 119.30 subdivision 13, is amended to read: 119.31 Subd. 13. [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 119.32 (a) The following sales by the specified organizations for 119.33 fundraising purposes are exempt, subject to the limitations 119.34 listed in paragraph (b): 119.35 (1) all sales made by an organization that exists solely 119.36 for the purpose of providing educational or social activities 120.1 for young people primarily age 18 and under; 120.2 (2) all sales made by an organization that is a senior 120.3 citizen group or association of groups if (i) in general it 120.4 limits membership to persons age 55 or older; (ii) it is 120.5 organized and operated exclusively for pleasure, recreation, and 120.6 other nonprofit purposes; and (iii) no part of its net earnings 120.7 inures to the benefit of any private shareholders; 120.8 (3) the sale or use of tickets or admissions to a golf 120.9 tournament held in Minnesota if the beneficiary of the 120.10 tournament's net proceeds qualifies as a tax-exempt organization 120.11 under section 501(c)(3) of the Internal Revenue Code; and 120.12 (4) sales of gum, candy, and candy products sold for 120.13 fundraising purposes by a nonprofit organization that provides 120.14 educational and social activities primarily for young people age 120.15 18years of ageand under. 120.16 (b) The exemptions listed in paragraph (a) are limited in 120.17 the following manner: 120.18 (1) the exemption under paragraph (a), clauses (1) and (2), 120.19 applies only if the gross annual receipts of the organization 120.20 from fundraising do not exceed $10,000; and 120.21 (2) the exemption under paragraph (a), clause (1), does not 120.22 apply if the sales are derived from admission charges or from 120.23 activities for which the money must be deposited with the school 120.24 district treasurer under section 123B.49, subdivision 2, or be 120.25 recorded in the same manner as other revenues or expenditures of 120.26 the school district under section 123B.49, subdivision 4. 120.27 (c) Sales of tangible personal property are exempt if the 120.28 entire proceeds, less the necessary expenses for obtaining the 120.29 property, will be contributed to a registered combined 120.30 charitable organization described in section 309.501, to be used 120.31 exclusively for charitable, religious, or educational purposes, 120.32 and the registered combined charitable organization has given 120.33 its written permission for the sale. Sales that occur over a 120.34 period of more than 24 days per year are not exempt under this 120.35 paragraph. 120.36 (d) For purposes of this subdivision, a club, association, 121.1 or other organization of elementary or secondary school students 121.2 organized for the purpose of carrying on sports, educational, or 121.3 other extracurricular activities is a separate organization from 121.4 the school district or school for purposes of applying the 121.5 $10,000 limit. 121.6 [EFFECTIVE DATE.] This section is effective for sales and 121.7 purchases made after June 30, 2001. 121.8 Sec. 55. Minnesota Statutes 2000, section 297A.70, 121.9 subdivision 14, is amended to read: 121.10 Subd. 14. [FUNDRAISING EVENTS SPONSORED BY NONPROFIT 121.11 GROUPS.] (a) Sales of tangible personal property at, and 121.12 admission charges for fundraising events sponsored by, a 121.13 nonprofit organization are exempt if the entire proceeds, less 121.14 the necessary expenses for the event, will be used solely and 121.15 exclusively for charitable, religious, or educational purposes. 121.16 Exempt sales include the sale of food, meals, and drinks, and121.17taxable servicesat the fundraising event. 121.18 (b) This exemption is limited in the following manner: 121.19 (1) it does not apply to admission charges for events 121.20 involving bingo or other gambling activities or to charges for 121.21 use of amusement devices involving bingo or other gambling 121.22 activities; 121.23 (2) all gross receipts are taxable if the profits are not 121.24 used solely and exclusively for charitable, religious, or 121.25 educational purposes; 121.26 (3) it does not apply unless the organization keeps a 121.27 separate accounting record, including receipts and disbursements 121.28 from each fundraising event that documents all deductions from 121.29 gross receipts with receipts and other records; 121.30 (4) it does not apply to any sale made by or in the name of 121.31 a nonprofit corporation as the active or passive agent of a 121.32 person that is not a nonprofit corporation; 121.33 (5) all gross receipts are taxable if fundraising events 121.34 exceed 24 days per year; and 121.35 (6) it does not apply to fundraising events conducted on 121.36 premises leased for more than five days but less than 30 days. 122.1 (c) For purposes of this subdivision, a "nonprofit 122.2 organization" means any unit of government, corporation, 122.3 society, association, foundation, or institution organized and 122.4 operated for charitable, religious, educational, civic, 122.5 fraternal, and senior citizens' or veterans' purposes, no part 122.6 of the net earnings of which inures to the benefit of a private 122.7 individual. 122.8 [EFFECTIVE DATE.] This section is effective for sales and 122.9 purchases made after June 30, 2001. 122.10 Sec. 56. Minnesota Statutes 2000, section 297A.71, 122.11 subdivision 6, is amended to read: 122.12 Subd. 6. [BUSINESS INCUBATOR AND INDUSTRIAL PARK.] 122.13 Building materials and supplies for construction of a facility 122.14 that includes a business incubator and industrial park are 122.15 exempt if the facility: 122.16 (1) is owned and operated by a nonprofit charitable 122.17 organization that qualifies for tax exemption under section 122.18 501(c)(3) of the Internal Revenue Code; 122.19 (2) is used for the development of nonretail businesses, 122.20 offering access to equipment, space, services, and advice to the 122.21 tenant businesses, for the purpose of encouraging economic 122.22 development and job creation in the area served by the 122.23 organization, and emphasizes development of businesses that 122.24 manufacture products from materials found in the waste stream, 122.25 or manufacture alternative energy and conservation systems, or 122.26 make use of emerging environmental technologies; 122.27 (3) includes in its structure systems of material and 122.28 energy exchanges that use waste products from one industrial 122.29 process as sources of energy and material for other processes; 122.30 and 122.31 (4) makes use of solar and wind energy technology and 122.32 incorporates salvaged materials in its construction. 122.33 A limited liability company also qualifies for exemption 122.34 under this subdivision if (1) it consists of a sole member that 122.35 would qualify for the exemption, and (2) the items purchased 122.36 qualify for the exemption. 123.1 [EFFECTIVE DATE.] This section is effective for sales and 123.2 purchases made after June 30, 2001. 123.3 Sec. 57. Minnesota Statutes 2000, section 297A.72, 123.4 subdivision 1, is amended to read: 123.5 Subdivision 1. [DUTY OF RETAILER.]AnA fully completed 123.6 exemption certificate conclusively relieves the retailer from 123.7 collecting and remitting the taxonlyif takenin good faith123.8 from the purchaser at the time of sale. 123.9 [EFFECTIVE DATE.] This section is effective for sales and 123.10 purchases occurring after December 31, 2001. 123.11 Sec. 58. Minnesota Statutes 2000, section 297A.75, is 123.12 amended to read: 123.13 297A.75 [REFUND; APPROPRIATION.] 123.14 Subdivision 1. [TAX COLLECTED.] The tax on the gross 123.15 receipts from the sale of the following exempt items must be 123.16 imposed and collected as if the sale were taxable and the rate 123.17 under section 297A.62, subdivision 1, applied. The exempt items 123.18 include: 123.19 (1) capital equipment exempt under section 297A.68, 123.20 subdivision 5; 123.21 (2) building materials for an agricultural processing 123.22 facility exempt under section 297A.71, subdivision 13; 123.23 (3) building materials for mineral production facilities 123.24 exempt under section 297A.71, subdivision 14; 123.25 (4) building materials for correctional facilities under 123.26 section 297A.71, subdivision 3; 123.27 (5) building materials used in a residence for disabled 123.28 veterans exempt under section 297A.71, subdivision 11;and123.29 (6) chair lifts, ramps, elevators, and associated building 123.30 materials exempt under section 297A.71, subdivision 12; and 123.31 (7) building materials for the Long Lake Conservation 123.32 Center exempt under section 297A.71, subdivision 17. 123.33 Subd. 2. [REFUND; ELIGIBLE PERSONS.] Upon application on 123.34 forms prescribed by the commissioner, a refund equal to the tax 123.35 paid on the gross receipts of the exempt items must be paid to 123.36 the applicant. Only the following persons may apply for the 124.1 refund: 124.2 (1) for subdivision 1, clauses (1) to (3), the applicant 124.3 must be the purchaser; 124.4 (2) for subdivision 1,clauseclauses (4) and (7), the 124.5 applicant must be the governmental subdivision; 124.6 (3) for subdivision 1, clause (5), the applicant must be 124.7 the recipient of the benefits provided in United States Code, 124.8 title 38, chapter 21; and 124.9 (4) for subdivision 1, clause (6), the applicant must be 124.10 the owner of the homestead property. 124.11 Subd. 3. [APPLICATION.] (a) The application must include 124.12 sufficient information to permit the commissioner to verify the 124.13 tax paid. If the tax was paid by a contractor, subcontractor, 124.14 or builder, under subdivision 1, clause (4), (5),or(6), or 124.15 (7), the contractor, subcontractor, or builder must furnish to 124.16 the refund applicant a statement including the cost of the 124.17 exempt items and the taxes paid on the items unless otherwise 124.18 specifically provided by this subdivision. The provisions of 124.19 sections 289A.40 and 289A.50 apply to refunds under this section. 124.20 (b) An applicant may not file more than two applications 124.21 per calendar year for refunds for taxes paid on capital 124.22 equipment exempt under section 297A.68, subdivision 5. 124.23 Subd. 4. [INTEREST.] Interest must be paid on the refund 124.24 at the rate in section 270.76 from the date the refund claim is 124.25 filed for taxes paid under subdivision 1, clauses (1) to (3), 124.26 and (5), and from 60 days after the date the refund claim is 124.27 filed with the commissioner for claims filed under subdivision 124.28 1, clauses (4)and, (6), and (7). 124.29 Subd. 5. [APPROPRIATION.] The amount required to make the 124.30 refunds is annually appropriated to the commissioner. 124.31 [EFFECTIVE DATE.] This section is effective for sales and 124.32 purchases made after June 30, 2001. 124.33 Sec. 59. Minnesota Statutes 2000, section 297A.77, 124.34 subdivision 1, is amended to read: 124.35 Subdivision 1. [COLLECTION OF TAX AT TIME OF SALE.] The 124.36 tax must be stated and charged separately from the sales 125.1 priceor charge for serviceinsofar as practicable and must be 125.2 collected by the seller from the purchaser. 125.3 [EFFECTIVE DATE.] This section is effective for sales and 125.4 purchases made after June 30, 2001. 125.5 Sec. 60. Minnesota Statutes 2000, section 297A.80, is 125.6 amended to read: 125.7 297A.80 [TAXES IN OTHER STATES; OFFSET AGAINST USE TAX.] 125.8 If an article of tangible personal property or an item 125.9 listed in section 297A.63 has already been taxed by another 125.10 state and any subdivision thereof for its sale, storage, use, or 125.11 other consumption in an amount less than the tax imposed by this 125.12 chapter, then as to the person who paid the tax in the other 125.13 state or any subdivision thereof, section 297A.63 applies only 125.14 at a rate measured by the difference between the rate imposed 125.15 under section 297A.62 and the rate by which the previous tax was 125.16 computed. If the tax imposed in the other state or any 125.17 subdivision thereof is equal to or greater than the tax imposed 125.18 in this state, then no tax is due from that person under section 125.19 297A.63. The credit shall be applied first against the amount 125.20 of any use tax due the state, and any unused portion of the 125.21 credit shall then be applied against any use tax due a 125.22 subdivision. 125.23 [EFFECTIVE DATE.] This section is effective for sales and 125.24 purchases occurring after December 31, 2001. 125.25 Sec. 61. Minnesota Statutes 2000, section 297A.86, 125.26 subdivision 1, is amended to read: 125.27 Subdivision 1. [NOTICE OF REVOCATION; HEARINGS.] (a) If: 125.28 (1) a person fails to comply with this chapter or the sales and 125.29 use tax provisions of chapter 289A or the rulesadopted under125.30either chapterrelated to sales tax, or (2) any retailer 125.31 purchases for resale from an unlicensed seller more than 20,000 125.32 cigarettes or $500 or more worth of tobacco products, without 125.33 reasonable cause, the commissioner may give the person 30 days' 125.34 notice in writing, specifying the violations, and stating that 125.35 based on the violations the commissioner intends to revoke the 125.36 person's permit. The notice must also advise the person of the 126.1 right to contest the revocation under this subdivision. It must 126.2 also explain the general procedures for a contested case hearing 126.3 under chapter 14. The notice may be served personally or by 126.4 mail in the manner prescribed for service of an order of 126.5 assessment. 126.6 (b) If the person does not request a hearing within 30 days 126.7 after the date of the notice of intent, the commissioner may 126.8 serve a notice of revocation of permit upon the person, and the 126.9 permit is revoked. If a hearing is timely requested, and held, 126.10 the permit is revoked after the commissioner serves an order of 126.11 revocation of permit under section 14.62, subdivision 1. 126.12 [EFFECTIVE DATE.] This section is effective for violations 126.13 occurring on or after August 1, 2001. 126.14 Sec. 62. Minnesota Statutes 2000, section 297A.89, 126.15 subdivision 1, is amended to read: 126.16 Subdivision 1. [COMMISSIONER MAY PERMIT.] The commissioner 126.17 may permit purchasers to pay taxes imposed by this chapter 126.18 directly to the commissioner. Any taxes paid by purchasers 126.19 under this section are considered use taxes, except for local126.20sales taxes when no corresponding local use tax is imposed. 126.21 [EFFECTIVE DATE.] This section is effective for sales and 126.22 purchases made after June 30, 2001. 126.23 Sec. 63. Minnesota Statutes 2000, section 297A.90, 126.24 subdivision 1, is amended to read: 126.25 Subdivision 1. [REGISTRATION; RECORDS.] (a) A person who 126.26 is engaged in interstate for-hire transportation of tangible 126.27 personal property or passengers by motor vehicle may, under 126.28 rules prescribed by the commissioner, register as a retailer and 126.29 pay the taxes imposed by this chapter in accordance with this 126.30 section. Any taxes paid under this section are use taxes,126.31except local sales taxes when no corresponding local use tax is126.32imposed. 126.33 (b) As used in this section, "person" means: 126.34 (1) one who possesses a certificate or permit or has 126.35 completed a registration process that authorizes for-hire 126.36 transportation of property or passengers from the United States 127.1 Department of Transportation, the transportation regulation 127.2 board, or the department of transportation; 127.3 (2) one who transports commodities defined as "exempt" in 127.4 for-hire transportation in interstate commerce; or 127.5 (3) one who transports tangible personal property in 127.6 interstate commerce, pursuant to contracts with persons 127.7 described in clause (1) or (2). 127.8 Persons qualifying under clause (2) or (3) must maintain on a 127.9 current basis the same type of mileage records that are required 127.10 by persons specified in clause (1) by the United States 127.11 Department of Transportation. 127.12 (c) Persons who in the course of their business are 127.13 transporting solely their own goods in interstate commerce may 127.14 also register as retailers under rules prescribed by the 127.15 commissioner and pay the taxes imposed by this chapter in 127.16 accordance with this section. 127.17 [EFFECTIVE DATE.] This section is effective for taxes paid 127.18 after June 30, 2001. 127.19 Sec. 64. Minnesota Statutes 2000, section 297A.91, 127.20 subdivision 1, is amended to read: 127.21 Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL 127.22 TRANSPORT.] (a) If the retailer does not have a sales or use tax 127.23 permit and has been engaging in transporting personal property 127.24 into the state without payment of the tax, the commissioner of 127.25 revenue or the commissioner's agents may seize in the name of 127.26 the state any truck, automobile, or means of transportation not 127.27 owned or operated by acommonfor-hire carrier, used in the 127.28 illegal importation and transportation of any tangible personal 127.29 property by a retailer or the retailer's agent or employee. The 127.30 commissioner may demand the forfeiture and sale of the truck, 127.31 automobile, or other means of transportation together with the 127.32 property being transported illegally, unless the owner 127.33 establishes to the satisfaction of the commissioner or the court 127.34 that the owner had no notice or knowledge or reason to believe 127.35 that the vehicle was used or intended to be used in any such 127.36 violation. 128.1 (b) Within two days after the seizure, the person making 128.2 the seizure shall deliver an inventory of the vehicle and 128.3 property seized to the person from whom the seizure was made, if 128.4 known, and to any person known or believed to have any right, 128.5 title, interest, or lien on the vehicle or property. The person 128.6 making the seizure shall also file a copy of the inventory with 128.7 the commissioner. 128.8 [EFFECTIVE DATE.] This section is effective for seizures 128.9 made after June 30, 2001. 128.10 Sec. 65. Minnesota Statutes 2000, section 297A.92, 128.11 subdivision 2, is amended to read: 128.12 Subd. 2. [AUCTIONS OF SECURITY.] The commissioner may sell 128.13 property deposited as security at public auction if necessary to 128.14 recover the amount required to be collected, including any 128.15 interest and penalties. Notice of the sale must be served upon 128.16 the person who deposited the security. It must be served 128.17 personally, or by mail as prescribed forthe service of a notice128.18of a deficiencyan order of assessment under section 289A.37, 128.19 subdivision 5. After a sale any surplus above the amount due 128.20 not required as security under this section must be returned to 128.21 the person who deposited the security. 128.22 [EFFECTIVE DATE.] This section is effective for auctions 128.23 held after June 30, 2001. 128.24 Sec. 66. Minnesota Statutes 2000, section 297A.94, as 128.25 amended by Laws 2001, chapter 185, section 33, is amended to 128.26 read: 128.27 297A.94 [DEPOSIT OF REVENUES.] 128.28 (a) Except as provided in this section, the commissioner 128.29 shall deposit the revenues, including interest and penalties, 128.30 derived from the taxes imposed by this chapter in the state 128.31 treasury and credit them to the general fund. 128.32 (b) The commissioner shall deposit taxes in the Minnesota 128.33 agricultural and economic account in the special revenue fund if: 128.34 (1) the taxes are derived from sales and use of property 128.35 and services purchased for the construction and operation of an 128.36 agricultural resource project; and 129.1 (2) the purchase was made on or after the date on which a 129.2 conditional commitment was made for a loan guaranty for the 129.3 project under section 41A.04, subdivision 3. 129.4 The commissioner of finance shall certify to the commissioner 129.5 the date on which the project received the conditional 129.6 commitment. The amount deposited in the loan guaranty account 129.7 must be reduced by any refunds and by the costs incurred by the 129.8 department of revenue to administer and enforce the assessment 129.9 and collection of the taxes. 129.10 (c) The commissioner shall deposit the revenues, including 129.11 interest and penalties, derived from the taxes imposed on sales 129.12 and purchases included in section 297A.61, subdivision16,129.13paragraphs (b) and (f)3, paragraph (g), clauses (1) and (5), in 129.14 the state treasury, and credit them as follows: 129.15 (1) first to the general obligation special tax bond debt 129.16 service account in each fiscal year the amount required by 129.17 section 16A.661, subdivision 3, paragraph (b); and 129.18 (2) after the requirements of clause (1) have been met, the 129.19 balance to the general fund. 129.20 (d) The commissioner shall deposit the revenues, including 129.21 interest and penalties, collected under section 297A.64, 129.22 subdivision 5, in the state treasury and credit them to the 129.23 general fund. By July 15 of each year the commissioner shall 129.24 transfer to the highway user tax distribution fund an amount 129.25 equal to the excess fees collected under section 297A.64, 129.26 subdivision 5, for the previous calendar year. 129.27 (e) For fiscal year 2001, 97 percent, and for fiscal year 129.28 2002 and thereafter, 87 percent of the revenues, including 129.29 interest and penalties, transmitted to the commissioner under 129.30 section 297A.65, must be deposited by the commissioner in the 129.31 state treasury as follows: 129.32 (1) 50 percent of the receipts must be deposited in the 129.33 heritage enhancement account in the game and fish fund, and may 129.34 be spent only on activities that improve, enhance, or protect 129.35 fish and wildlife resources, including conservation, 129.36 restoration, and enhancement of land, water, and other natural 130.1 resources of the state; 130.2 (2) 22.5 percent of the receipts must be deposited in the 130.3 natural resources fund, and may be spent only for state parks 130.4 and trails; 130.5 (3) 22.5 percent of the receipts must be deposited in the 130.6 natural resources fund, and may be spent only on metropolitan 130.7 park and trail grants; 130.8 (4) three percent of the receipts must be deposited in the 130.9 natural resources fund, and may be spent only on local trail 130.10 grants; and 130.11 (5) two percent of the receipts must be deposited in the 130.12 natural resources fund, and may be spent only for the Minnesota 130.13 zoological garden, the Como park zoo and conservatory, and the 130.14 Duluth zoo. 130.15 (f) The revenue dedicated under paragraph (e) may not be 130.16 used as a substitute for traditional sources of funding for the 130.17 purposes specified, but the dedicated revenue shall supplement 130.18 traditional sources of funding for those purposes. Land 130.19 acquired with money deposited in the game and fish fund under 130.20 paragraph (e) must be open to public hunting and fishing during 130.21 the open season, except that in aquatic management areas or on 130.22 lands where angling easements have been acquired, fishing may be 130.23 prohibited during certain times of the year and hunting may be 130.24 prohibited. At least 87 percent of the money deposited in the 130.25 game and fish fund for improvement, enhancement, or protection 130.26 of fish and wildlife resources under paragraph (e) must be 130.27 allocated for field operations. 130.28 [EFFECTIVE DATE.] This section is effective for revenues 130.29 deposited after June 30, 2001. 130.30 Sec. 67. Minnesota Statutes 2000, section 297A.99, 130.31 subdivision 7, is amended to read: 130.32 Subd. 7. [EXEMPTIONS.] (a) All goods or services that are 130.33 otherwise exempt from taxation under this chapter are exempt 130.34 from a political subdivision's tax. 130.35 (b) The gross receipts from the sale of tangible personal 130.36 property that meets the requirement of section 297A.68, 131.1 subdivision13 or 1415, are exempt, except the qualification 131.2 test applies based on the boundaries of the political 131.3 subdivision instead of the state of Minnesota. 131.4 (c) All mobile transportation equipment, and parts and 131.5 accessories attached to or to be attached to the equipment are 131.6 exempt, if purchased by a holder of a motor carrier direct pay 131.7 permit under section 297A.90. 131.8 [EFFECTIVE DATE.] This section is effective for sales and 131.9 purchases made after June 30, 2001. 131.10 Sec. 68. Minnesota Statutes 2000, section 297A.99, 131.11 subdivision 9, is amended to read: 131.12 Subd. 9. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] 131.13 (a) The commissioner of revenue shall collect the taxes subject 131.14 to this section. The commissioner may collect the tax with the 131.15 state sales and use tax. All taxes under this section are 131.16 subject to the same penalties, interest, and enforcement 131.17 provisions as apply to the state sales and use tax. 131.18 (b) A request for a refund of state sales tax paid in 131.19 excess of the amount of tax legally due includes a request for a 131.20 refund of the political subdivision taxes paid on the goods or 131.21 services. The commissioner shall refund to the taxpayer the 131.22 full amount of the political subdivision taxes paid on exempt 131.23 sales or use. 131.24(c) A political subdivision that is collecting and131.25administering its own sales and use tax before January 1, 1998,131.26may elect to be exempt from this subdivision and subdivision 11.131.27 [EFFECTIVE DATE.] This section is effective January 1, 2003. 131.28 Sec. 69. Minnesota Statutes 2000, section 297A.99, 131.29 subdivision 11, is amended to read: 131.30 Subd. 11. [REVENUES; COST OF COLLECTION.] The commissioner 131.31 shall remit the proceeds of the tax, less refunds and a 131.32 proportionate share of the cost of collection, at least 131.33 quarterly, to the political subdivision. The commissioner shall 131.34 deduct from the proceeds remitted an amount that equals 131.35 (1) the direct and indirect costs of the department to 131.36 administer, audit, and collect the political subdivision's tax, 132.1 plus 132.2 (2) the political subdivision's proportionate share of the 132.3 indirect cost of administering all taxes under this section, 132.4 plus 132.5 (3) the cost of constructing and maintaining a zip code or 132.6 geo-code data base necessary for local sales tax collections 132.7 under the Streamlined Sales and Use Tax Agreement in section 132.8 297A.995. 132.9 The initial cost of constructing a data base under clause 132.10 (3) shall be distributed among the cities with a local sales tax 132.11 based on each city's population. The commissioner shall develop 132.12 a method for distributing the cost of maintaining the data base 132.13 among the cities with a local sales tax based on the number of 132.14 boundary changes for each city. 132.15 [EFFECTIVE DATE.] This section is effective for payments to 132.16 political subdivisions made after June 30, 2001, for costs 132.17 incurred after June 30, 2001. 132.18 Sec. 70. [297A.995] [UNIFORM SALES AND USE TAX 132.19 ADMINISTRATION ACT.] 132.20 Subdivision 1. [TITLE.] This section may be cited as the 132.21 Uniform Sales and Use Tax Administration Act. 132.22 Subd. 2. [DEFINITIONS.] As used in this section: 132.23 (a) "Agreement" means the Streamlined Sales and Use Tax 132.24 Agreement. 132.25 (b) "Certified automated system" means software certified 132.26 jointly by the states that are signatories to the agreement to 132.27 calculate the tax imposed by each jurisdiction on a transaction, 132.28 determine the amount of tax to remit to the appropriate state, 132.29 and maintain a record of the transaction. 132.30 (c) "Certified service provider" means an agent certified 132.31 jointly by the states that are signatories to the agreement to 132.32 perform all of the seller's sales tax functions. 132.33 Subd. 3. [LEGISLATIVE FINDING.] The legislature finds that 132.34 this state should enter into an agreement with one or more 132.35 states to simplify and modernize sales and use tax 132.36 administration in order to substantially reduce the burden of 133.1 tax compliance for all sellers and for all types of commerce. 133.2 Subd. 4. [AUTHORITY TO ENTER AGREEMENT.] The commissioner 133.3 of revenue is authorized and directed to enter into the 133.4 agreement with one or more states to simplify and modernize 133.5 sales and use tax administration in order to substantially 133.6 reduce the burden of tax compliance for all sellers and for all 133.7 types of commerce. In furtherance of the agreement, the 133.8 commissioner is authorized to act jointly with other states that 133.9 are members of the agreement to establish standards for 133.10 certification of a certified service provider and certified 133.11 automated system and establish performance standards for 133.12 multistate sellers. 133.13 The commissioner is further authorized to take other 133.14 actions reasonably required to implement the provisions set 133.15 forth in this article. Other actions authorized by this section 133.16 include, but are not limited to, the adoption of rules and 133.17 regulations and the joint procurement, with other member states, 133.18 of goods and services in furtherance of the cooperative 133.19 agreement. 133.20 The commissioner or the commissioner's designee is 133.21 authorized to represent this state before the other states that 133.22 are signatories to the agreement. 133.23 Subd. 5. [RELATIONSHIP TO STATE LAW.] No provision of the 133.24 agreement authorized by this bill in whole or part invalidates 133.25 or amends any provision of the law of this state. Adoption of 133.26 the agreement by this state does not amend or modify any law of 133.27 this state. Implementation of any condition of the agreement in 133.28 this state, whether adopted before, at, or after membership of 133.29 this state in the agreement, must be by the action of this state. 133.30 Subd. 6. [AGREEMENT REQUIREMENTS.] The commissioner of 133.31 revenue shall not enter into the agreement unless the agreement 133.32 requires each state to abide by the following requirements: 133.33 (a) [UNIFORM STATE RATE.] The agreement must set 133.34 restrictions to achieve more uniform state rates through the 133.35 following: 133.36 (1) limiting the number of state rates; 134.1 (2) eliminating maximums on the amount of state tax that is 134.2 due on a transaction; and 134.3 (3) eliminating thresholds on the application of state tax. 134.4 (b) [UNIFORM STANDARDS.] The agreement must establish 134.5 uniform standards for the following: 134.6 (1) the sourcing of transactions to taxing jurisdictions; 134.7 (2) the administration of exempt sales; 134.8 (3) the allowances a seller can take for bad debts; and 134.9 (4) sales and use tax returns and remittances. 134.10 (c) [UNIFORM DEFINITIONS.] The agreement must require 134.11 states to develop and adopt uniform definitions of sales and use 134.12 tax terms. The definitions must enable a state to preserve its 134.13 ability to make policy choices not inconsistent with the uniform 134.14 definitions. 134.15 (d) [CENTRAL REGISTRATION.] The agreement must provide a 134.16 central, electronic registration system that allows a seller to 134.17 register to collect and remit sales and use taxes for all 134.18 signatory states. 134.19 (e) [NO NEXUS ATTRIBUTION.] The agreement must provide that 134.20 registration with the central registration system and the 134.21 collection of sales and use taxes in the signatory states will 134.22 not be used as a factor in determining whether the seller has 134.23 nexus with a state for any tax. 134.24 (f) [LOCAL SALES AND USE TAXES.] The agreement must provide 134.25 for reduction of the burdens of complying with local sales and 134.26 use taxes through the following: 134.27 (1) restricting and eliminating variances between the state 134.28 and local tax bases; 134.29 (2) requiring states to administer any sales and use taxes 134.30 levied by local jurisdictions within the state so that sellers 134.31 collecting and remitting these taxes will not have to register 134.32 or file returns with, remit funds to, or be subject to 134.33 independent audits from local taxing jurisdictions; 134.34 (3) restricting the frequency of changes in the local sales 134.35 and use tax rates and setting effective dates for the 134.36 application of local jurisdictional boundary changes to local 135.1 sales and use taxes; and 135.2 (4) providing notice of changes in local sales and use tax 135.3 rates and of changes in the boundaries of local taxing 135.4 jurisdictions. 135.5 (g) [MONETARY ALLOWANCES.] The agreement must outline any 135.6 monetary allowances that are to be provided by the states to 135.7 sellers or certified service providers. 135.8 (h) [STATE COMPLIANCE.] The agreement must require each 135.9 state to certify compliance with the terms of the agreement 135.10 prior to joining and to maintain compliance, under the laws of 135.11 the member state, with all provisions of the agreement while a 135.12 member. 135.13 (i) [CONSUMER PRIVACY.] The agreement must require each 135.14 state to adopt a uniform policy for certified service providers 135.15 that protects the privacy of consumers and maintains the 135.16 confidentiality of tax information. 135.17 (j) [ADVISORY COUNCILS.] The agreement must provide for the 135.18 appointment of an advisory council of private sector 135.19 representatives and an advisory council of nonmember state 135.20 representatives to consult with in the administration of the 135.21 agreement. 135.22 Subd. 7. [COOPERATING SOVEREIGNS.] The agreement 135.23 authorized by this bill is an accord among individual 135.24 cooperating sovereigns in furtherance of their governmental 135.25 functions. The agreement provides a mechanism among the member 135.26 states to establish and maintain a cooperative, simplified 135.27 system for the application and administration of sales and use 135.28 taxes under the duly adopted law of each member state. 135.29 Subd. 8. [LIMITED BINDING AND BENEFICIAL EFFECT.] (a) The 135.30 agreement authorized by this bill binds and inures only to the 135.31 benefit of this state and the other member states. No person, 135.32 other than a member state, is an intended beneficiary of the 135.33 agreement. Any benefit to a person other than a state is 135.34 established by the law of this state and the other member states 135.35 and not by the terms of the agreement. 135.36 (b) Consistent with paragraph (a), no person shall have any 136.1 cause of action or defense under the agreement or by virtue of 136.2 this state's approval of the agreement. No person may 136.3 challenge, in any action brought under any provision of law, any 136.4 action or inaction by any department, agency, or other 136.5 instrumentality of this state, or any political subdivision of 136.6 this state, on the ground that the action or inaction is 136.7 inconsistent with the agreement. 136.8 (c) No law of this state, or its application, may be 136.9 declared invalid as to any person or circumstance on the ground 136.10 that the provision or application is inconsistent with the 136.11 agreement. 136.12 Subd. 9. [SELLER AND THIRD-PARTY LIABILITY.] (a) A 136.13 certified service provider is the agent of a seller, with whom 136.14 the certified service provider has contracted, for the 136.15 collection and remittance of sales and use taxes. As the 136.16 seller's agent, the certified service provider is liable for 136.17 sales and use tax due each member state on all sales 136.18 transactions it processes for the seller except as set out in 136.19 this section. 136.20 A seller that contracts with a certified service provider 136.21 is not liable to the state for sales or use tax due on 136.22 transactions processed by the certified service provider unless 136.23 the seller misrepresented the type of items it sells or 136.24 committed fraud. In the absence of probable cause to believe 136.25 that the seller has committed fraud or made a material 136.26 misrepresentation, the seller is not subject to audit on the 136.27 transactions processed by the certified service provider. A 136.28 seller is subject to audit for transactions not processed by the 136.29 certified service provider. The member states acting jointly 136.30 may perform a system check of the seller and review the seller's 136.31 procedures to determine if the certified service provider's 136.32 system is functioning properly and the extent to which the 136.33 seller's transactions are being processed by the certified 136.34 service provider. 136.35 (b) A person that provides a certified automated system is 136.36 responsible for the proper functioning of that system and is 137.1 liable to the state for underpayments of tax attributable to 137.2 errors in the functioning of the certified automated system. A 137.3 seller that uses a certified automated system remains 137.4 responsible and is liable to the state for reporting and 137.5 remitting tax. 137.6 (c) A seller that has a proprietary system for determining 137.7 the amount of tax due on transactions and has signed an 137.8 agreement establishing a performance standard for that system is 137.9 liable for the failure of the system to meet the performance 137.10 standard. 137.11 [EFFECTIVE DATE.] This section is effective the day 137.12 following final enactment. 137.13 Sec. 71. [297F.185] [REVOCATION OF SALES AND USE TAX 137.14 PERMITS.] 137.15 If a retailer purchases for resale from an unlicensed 137.16 seller more than 20,000 cigarettes or $500 or more worth of 137.17 tobacco products, the commissioner may revoke the person's sales 137.18 and use tax permit as provided in section 297A.86. 137.19 [EFFECTIVE DATE.] This section is effective for violations 137.20 occurring on or after August 1, 2001. 137.21 Sec. 72. Laws 1986, chapter 396, section 5, is amended to 137.22 read: 137.23 Sec. 5. [LIQUOR, LODGING, AND RESTAURANT TAXES.] 137.24 The city may, by resolution, levy in addition to taxes 137.25 authorized by other law: 137.26 (1) a sales tax of not more than three percent on the gross 137.27 receipts on retail on-sales of intoxicating liquor and fermented 137.28 malt beverages described in section 473.592 occurring in the 137.29 downtown taxing area, provided that this tax may not be imposed 137.30 if sales of intoxicating liquor and fermented malt beverages are 137.31 exempt from taxation under chapter 297A; 137.32 (2) a sales tax of not more than three percent on the gross 137.33 receipts from the furnishing for consideration of lodging 137.34 described in section 473.592 by a hotel or motel which has more 137.35 than 50 rooms available for lodging; the tax imposed under this 137.36 clause shall be at a rate that, when added to the sum of the 138.1 rate of the sales tax imposed under Minnesota Statutes, chapter 138.2 297A, the rate of the sales tax imposed under section 4, and the 138.3 rate of any other taxes on lodging in the city of Minneapolis, 138.4 equals1213 percent; and 138.5 (3) a sales tax of not more than three percent on the gross 138.6 receipts on all sales of food primarily for consumption on or 138.7 off the premises by restaurants and places of refreshment as 138.8 defined by resolution of the city that occur within the downtown 138.9 taxing area. 138.10 These taxes shall be applied solely to pay costs of collection 138.11 and to pay or secure the payment of any principal of, premium 138.12 and interest on any bonds or any costs referred to in section 4, 138.13 subdivision 3. The commissioner of revenue may enter into 138.14 appropriate agreements with the city to provide for the 138.15 collection of these taxes by the state on behalf of the city. 138.16 The commissioner may charge the city a reasonable fee for its 138.17 collection from the proceeds of any taxes. These taxes shall be 138.18 subject to the same interest penalties and enforcement 138.19 provisions as the taxes imposed under section 473.592. 138.20 [EFFECTIVE DATE.] This section is effective the day 138.21 following final enactment. 138.22 Sec. 73. [PLAN FOR REPLACEMENT OF REVENUES RAISED BY 138.23 CURRENT TAXES ON ALCOHOL.] 138.24 The commissioner of revenue, in consultation with 138.25 interested parties from the alcohol beverage industry, shall 138.26 prepare a plan to replace the current higher sales tax on liquor 138.27 and beer under Minnesota Statutes, section 297A.62, subdivision 138.28 2, and the liquor tax under Minnesota Statutes, chapter 297G, 138.29 with a single tax on liquor. The commissioner shall report the 138.30 plan to the legislature by January 1, 2003. The plan should 138.31 include recommendations for tax rates, tax base, and tax 138.32 administration, and should be structured so that the revenue 138.33 raised is equivalent to the revenue lost from the repeal of the 138.34 current taxes. The plan should also, to the extent practical, 138.35 mirror the current incidence of the tax as it relates to 138.36 different types of liquor, and whether the liquor is consumed 139.1 on-site or off-site. 139.2 [EFFECTIVE DATE.] This section is effective the day after 139.3 final enactment. 139.4 Sec. 74. [PLAN FOR REPLACEMENT OF REVENUES RAISED BY TAXES 139.5 ON SHORT-TERM MOTOR VEHICLE RENTAL.] 139.6 The commissioner of revenue, in consultation with 139.7 interested parties from the industry, shall prepare a plan to 139.8 replace the current sales tax on short-term motor vehicle 139.9 rentals under Minnesota Statutes, section 297A.64, with a single 139.10 tax or fee on motor vehicle rentals. The commissioner shall 139.11 report the plan to the legislature by January 1, 2003. The plan 139.12 should include recommendations for tax rates, tax base, and tax 139.13 administration, and should be structured so that the state 139.14 revenue raised is equivalent to the state revenue lost from the 139.15 repeal of the current taxes. 139.16 [EFFECTIVE DATE.] This section is effective the day after 139.17 final enactment. 139.18 Sec. 75. [DIRECTIONS TO COMMISSIONER OF REVENUE.] 139.19 The commissioner of revenue shall request that the member 139.20 states of the Streamlined Sales and Use Tax Agreement adopt at 139.21 their earliest convenience a uniform definition of clothing made 139.22 from fur. 139.23 [EFFECTIVE DATE.] This section is effective the day after 139.24 final enactment. 139.25 Sec. 76. [INSTRUCTIONS TO REVISOR.] 139.26 (a) In the next edition of Minnesota Statutes, the revisor 139.27 of statutes shall put the definitions in section 297A.68, 139.28 subdivision 5, paragraph (d), in alphabetical order and correct 139.29 any references to the reordered definitions. 139.30 (b) In the next edition of Minnesota Statutes, the revisor 139.31 of statutes shall renumber section 297A.68, subdivision 27, as 139.32 297A.67, subdivision 26, and correct any references to the 139.33 renumbered section. 139.34 Sec. 77. [REPEALER.] 139.35 (a) Minnesota Statutes 2000, sections 297A.61, subdivision 139.36 16; 297A.68, subdivision 21; and 297A.71, subdivisions 2 and 16, 140.1 are repealed effective for sales and purchases occurring after 140.2 June 30, 2001. 140.3 (b) Minnesota Statutes 2000, sections 297A.62, subdivision 140.4 2, and 297A.64, subdivision 1, are repealed effective for sales 140.5 and purchases made after December 31, 2005. 140.6 (c) Minnesota Statutes 2000, section 297A.71, subdivision 140.7 15, is repealed effective for sales and purchases made after 140.8 June 30, 2002. 140.9 (d) Minnesota Statutes 2000, section 297B.032, is repealed 140.10 effective the day following final enactment. 140.11 ARTICLE 3 140.12 SPECIAL TAXES 140.13 Section 1. Minnesota Statutes 2000, section 69.021, 140.14 subdivision 5, as amended by Laws 2001, chapter 7, section 17, 140.15 is amended to read: 140.16 Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of 140.17 fire state aid available for apportionment, before the addition 140.18 of the minimum fire state aid allocation amount under 140.19 subdivision 7, is equal to 107 percent of the amount of premium 140.20 taxes paid to the state upon the fire, lightning, sprinkler 140.21 leakage, and extended coverage premiums reported to the 140.22 commissioner by insurers on the Minnesota Firetown Premium 140.23 Report. This amount shall be reduced by the amount required to 140.24 pay the state auditor's costs and expenses of the audits or 140.25 exams of the firefighters relief associations. 140.26 The total amount for apportionment in respect to fire state 140.27 aid must not be less than two percent of the premiums reported 140.28 to the commissioner by insurers on the Minnesota Firetown 140.29 Premium Report after subtracting the following amounts: 140.30 (1) the amount required to pay the state auditor's costs 140.31 and expenses of the audits or exams of the firefighters relief 140.32 associations; and 140.33 (2) one percent of the premiums reported by town and 140.34 farmers' mutual insurance companies and mutual property and 140.35 casualty companies with total assets of $5,000,000 or less. 140.36 (b) The total amount for apportionment as police state aid 141.1 is equal to 104 percent of the amount of premium taxes paid to 141.2 the state on the premiums reported to the commissioner by 141.3 insurers on the Minnesota Aid to Police Premium Report, plus the 141.4 payment amounts received under section 297I.05, subdivision 8, 141.5 since the last aid apportionment, and reduced by the amount 141.6 required to pay the costs and expenses of the state auditor for 141.7 audits or exams of police relief associations. The total amount 141.8 for apportionment in respect to the police state aid program 141.9 must not be less than two percent of the amount of premiums 141.10 reported to the commissioner by insurers on the Minnesota Aid to 141.11 Police Premium Report after subtracting the amount required to 141.12 pay the state auditor's cost and expenses of the audits or exams 141.13 of the police relief associations. 141.14 (c) The commissioner shall calculate the percentage of 141.15 increase or decrease reflected in the apportionment over or 141.16 under the previous year's available state aid using the same 141.17 premiums as a basis for comparison. 141.18 (d) The amount for apportionment in respect to peace 141.19 officer state aid under paragraph (b) must be further reduced by 141.20 $1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000, 141.21 and $2,404,000 in fiscal year 2001. These reductions in this 141.22 paragraph cancel to the general fund. 141.23 (e) The amount for apportionment of police state aid under 141.24 paragraph (b) is annually increased by an amount equal to the 141.25 revenues under the tax on automobile risk self-insurance under 141.26 Minnesota Statutes 2000, section 297I.05, subdivision 8, that 141.27 were collected in fiscal year 2001. An amount sufficient to pay 141.28 this increase is annually appropriated from the general fund. 141.29 [EFFECTIVE DATE.] This section is effective beginning with 141.30 fiscal year 2002. 141.31 Sec. 2. Minnesota Statutes 2000, section 168.013, 141.32 subdivision 1a, is amended to read: 141.33 Subd. 1a. [PASSENGER AUTOMOBILE; HEARSE.] (a) On passenger 141.34 automobiles as defined in section 168.011, subdivision 7, and 141.35 hearses, except as otherwise provided, the tax shall be $10 plus 141.36 an additional tax equal to 1.25 percent of the base value. 142.1 (b) Subject to the classification provisions herein, "base 142.2 value" means the manufacturer's suggested retail price of the 142.3 vehicle including destination charge using list price 142.4 information published by the manufacturer or determined by the 142.5 registrar if no suggested retail price exists, and shall not 142.6 include the cost of each accessory or item of optional equipment 142.7 separately added to the vehicle and the suggested retail price. 142.8 (c) If the manufacturer's list price information contains a 142.9 single vehicle identification number followed by various 142.10 descriptions and suggested retail prices, the registrar shall 142.11 select from those listings only the lowest price for determining 142.12 base value. 142.13 (d) If unable to determine the base value because the 142.14 vehicle is specially constructed, or for any other reason, the 142.15 registrar may establish such value upon the cost price to the 142.16 purchaser or owner as evidenced by a certificate of cost but not 142.17 including Minnesota sales or use tax or any local sales or other 142.18 local tax. 142.19 (e) The registrar shall classify every vehicle in its 142.20 proper base value class as follows: 142.21 FROM TO 142.22 $ 0 $199.99 142.23 200 399.99 142.24 and thereafter a series of classes successively set in brackets 142.25 having a spread of $200 consisting of such number of classes as 142.26 will permit classification of all vehicles. 142.27 (f) The base value for purposes of this section shall be 142.28 the middle point between the extremes of its class. 142.29 (g) The registrar shall establish the base value, when new, 142.30 of every passenger automobile and hearse registered prior to the 142.31 effective date of Extra Session Laws 1971, chapter 31, using 142.32 list price information published by the manufacturer or any 142.33 nationally recognized firm or association compiling such data 142.34 for the automotive industry. If unable to ascertain the base 142.35 value of any registered vehicle in the foregoing manner, the 142.36 registrar may use any other available source or method. The tax 143.1 on all previously registered vehicles shall be computed upon the 143.2 base value thus determined taking into account the depreciation 143.3 provisions of paragraph (h). 143.4 (h)Except as provided in paragraph (i),The annual 143.5 additional tax computed upon the base value as provided herein, 143.6 during the first and second years of vehicle life shall be 143.7 computed upon 100 percent of the base value; for the third and 143.8 fourth years, 90 percent of such value; for the fifth and sixth 143.9 years, 75 percent of such value; for the seventh year, 60 143.10 percent of such value; for the eighth year, 40 percent of such 143.11 value; for the ninth year, 30 percent of such value; for the 143.12 tenth year, ten percent of such value; for the 11th and each 143.13 succeeding year, the sum of $25. 143.14 In no event shall the annual additional tax be less than $25. 143.15 The total tax under this subdivision shall not exceed $189 for 143.16 the first renewal period and shall not exceed $99 for subsequent 143.17 renewal periods. The total tax under this subdivision on any 143.18 vehicle filing its initial registration in Minnesota in the 143.19 second year of vehicle life shall not exceed $189 and shall not 143.20 exceed $99 for subsequent renewal periods. The total tax under 143.21 this subdivision on any vehicle filing its initial registration 143.22 in Minnesota in the third or subsequent year of vehicle life 143.23 shall not exceed $99 and shall not exceed $99 in any subsequent 143.24 renewal period. 143.25 (i)The annual additional tax under paragraph (h) on a143.26motor vehicle on which the first annual tax was paid before143.27January 1, 1990, must not exceed the tax that was paid on that143.28vehicle the year before.As used in sections 168.013, 143.29 subdivision 1a and 168.017, the following terms have the 143.30 meanings given: "initial registration" means the 12 consecutive 143.31 month calendar period from the day of first registration of a 143.32 vehicle in Minnesota; and "renewal periods" means the 12 143.33 consecutive calendar month periods following the initial 143.34 registration period. 143.35 [EFFECTIVE DATE.] This section is effective June 1, 2001, 143.36 for taxes payable on and after that date. 144.1 Sec. 3. Minnesota Statutes 2000, section 168.017, 144.2 subdivision 3, is amended to read: 144.3 Subd. 3. [EXCEPTIONS.] (a) The registrar shall register 144.4 all vehicles subject to registration under the monthly series 144.5 system for a period of 12 consecutive calendar months, unless: 144.6 (1) the application is an original rather than renewal 144.7 application; or 144.8 (2) the applicant is a licensed motor vehicle lessor under 144.9 section 168.27, in which case the applicant may apply for 144.10originalinitial or renewed registration of a vehicle for a 144.11 period of four or more months, the month of expiration to be 144.12 designated by the applicant at the time of registration. 144.13 However, to qualify for this exemption, the applicant must 144.14 present the application to the registrar at St. Paul, or at 144.15 deputy registrar offices as the registrar may designate. 144.16 (b) In any instance except that of a licensed motor vehicle 144.17 lessor, the registrar shall not approve registering the vehicle 144.18 subject to the application for a period of less than three 144.19 months, except when the registrar determines that to do 144.20 otherwise will help to equalize the registration and renewal 144.21 work load of the department. 144.22 [EFFECTIVE DATE.] This section is effective for first 144.23 registrations in Minnesota occurring on or after July 1, 2001, 144.24 and for renewals of registrations that have been assigned 144.25 expiration dates of August 2001 or later. 144.26 Sec. 4. Minnesota Statutes 2000, section 239.101, 144.27 subdivision 3, is amended to read: 144.28 Subd. 3. [PETROLEUM INSPECTION FEE.]A person who owns144.29petroleum products held in storage at a pipeline terminal, river144.30terminal, or refinery shall pay a petroleum inspection fee of 85144.31cents for every 1,000 gallons sold or withdrawn from the144.32terminal or refinery storageAn inspection fee is imposed on 144.33 petroleum products when received by the first licensed 144.34 distributor, and on petroleum products received and held for 144.35 sale or use by any person when the petroleum products have not 144.36 previously been received by a licensed distributor. The 145.1 petroleum inspection fee is 85 cents for every 1,000 gallons 145.2 received. The commissioner of revenue shall collect the fee. 145.3 The revenue from the fee must first be applied to cover the 145.4 amounts appropriated for petroleum product quality inspection 145.5 expenses, for the inspection and testing of petroleum product 145.6 measuring equipment, and for petroleum supply monitoring under 145.7 chapter 216C. 145.8 The commissioner of revenue shall credit a person for 145.9 inspection fees previously paid in error or for any material 145.10 exported or sold for export from the state upon filing of a 145.11 report as prescribed by the commissioner of revenue. The 145.12 commissioner of revenue may collect the inspection fee along 145.13 with any taxes due under chapter 296A. 145.14 [EFFECTIVE DATE.] This section is effective for petroleum 145.15 products received on or after July 1, 2001. 145.16 Sec. 5. Minnesota Statutes 2000, section 296A.07, 145.17 subdivision 4, is amended to read: 145.18 Subd. 4. [TRANSIT SYSTEM EXEMPTEXEMPTIONS.] The 145.19 provisions of subdivision 1 do not apply to gasoline purchased 145.20 by: 145.21 (1) a transit system or transit provider receiving 145.22 financial assistance or reimbursement under section 174.24, 145.23 256B.0625, subdivision 17, or 473.384; or 145.24 (2) an ambulance service licensed under chapter 144E. 145.25 [EFFECTIVE DATE.] This section is effective August 1, 2001. 145.26 Sec. 6. Minnesota Statutes 2000, section 296A.08, 145.27 subdivision 3, is amended to read: 145.28 Subd. 3. [TRANSIT SYSTEM EXEMPTEXEMPTIONS.] The 145.29 provisions of subdivisions 1 and 2 do not apply to special fuel 145.30 or alternative fuels purchased by: 145.31 (1) a transit system or transit provider receiving 145.32 financial assistance or reimbursement under section 174.24, 145.33 256B.0625, subdivision 17, or 473.384; or 145.34 (2) an ambulance service licensed under chapter 144E. 145.35 [EFFECTIVE DATE.] This section is effective August 1, 2001. 145.36 Sec. 7. Minnesota Statutes 2000, section 296A.15, 146.1 subdivision 1, is amended to read: 146.2 Subdivision 1. [MONTHLY GASOLINE REPORT; SHRINKAGE 146.3 ALLOWANCE.] (a) Except as provided in paragraph (e), on or 146.4 before the 23rd day of each month, every person who is required 146.5 to pay a gasoline tax shall file with the commissioner a report, 146.6 in the form and manner prescribed by the commissioner, showing 146.7 the number of gallons of petroleum products received by the 146.8 reporter during the preceding calendar month, and other 146.9 information the commissioner may require. A written report is 146.10 deemed to have been filed as required in this subdivision if 146.11 postmarked on or before the 23rd day of the month in which the 146.12 tax is payable. 146.13 (b) The number of gallons of gasoline must be reported in 146.14 United States standard liquid gallons, 231 cubic inches, except 146.15 that the commissioner may upon written application and for cause 146.16 shown permit the distributor to report the number of gallons of 146.17 gasoline as corrected to a temperature of 60-degrees 146.18 Fahrenheit. If the application is granted, all gasoline covered 146.19 in the application and allowed by the commissioner must continue 146.20 to be reported by the distributor on the adjusted basis for a 146.21 period of one year from the date of the granting of the 146.22 application. The number of gallons of petroleum products other 146.23 than gasoline must be reported as originally invoiced. Each 146.24 report must show separately the number of gallons of aviation 146.25 gasoline received by the reporter during each calendar month. 146.26 (c) Each report must also include the amount of gasoline 146.27 tax on gasoline received by the reporter during the preceding 146.28 month. In computing the tax a deduction ofthree2.5 percent of 146.29 the quantity of gasoline received by a distributor shall be made 146.30 for evaporation and loss. At the time of reporting, the 146.31 reporter shall submit satisfactory evidence that one-third of 146.32 thethree2.5 percent deduction has been credited or paid to 146.33 dealers on quantities sold to them. 146.34 (d) Each report shall contain a confession of judgment for 146.35 the amount of the tax shown due to the extent not timely paid. 146.36 (e) Under certain circumstances and with the approval of 147.1 the commissioner, taxpayers may be allowed to file reports 147.2 annually. 147.3 [EFFECTIVE DATE.] This section is effective for reports due 147.4 on or after July 1, 2001. 147.5 Sec. 8. Minnesota Statutes 2000, section 297H.04, is 147.6 amended by adding a subdivision to read: 147.7 Subd. 4. [DISPOSAL WITH MIXED WASTE; RATE.] Nonmixed 147.8 municipal solid waste that is separately collected or processed, 147.9 but is disposed of within the permitted boundaries of a land 147.10 disposal facility that is also actively accepting and disposing 147.11 of mixed municipal solid waste, shall be taxed at the rate for 147.12 mixed municipal solid waste, unless the facility owner and 147.13 operator can demonstrate a physical separation between the mixed 147.14 municipal solid waste disposal area and nonmixed municipal solid 147.15 waste disposal area, such that any air or liquid emissions being 147.16 collected from the disposal areas are collected separately. 147.17 [EFFECTIVE DATE.] This section is effective for waste 147.18 disposed of after June 30, 2001. 147.19 Sec. 9. Minnesota Statutes 2000, section 297H.06, is 147.20 amended by adding a subdivision to read: 147.21 Subd. 3. [CONSTRUCTION DEBRIS IN A DISASTER AREA.] The tax 147.22 is not imposed on construction debris generated from repair and 147.23 demolition activities caused by a disaster occurring in a 147.24 presidentially declared disaster area, provided that the 147.25 construction debris is disposed of in a waste management 147.26 facility designated by the commissioner of the pollution control 147.27 agency. To be exempt, the debris must be disposed of within 18 147.28 months following the presidential declaration. 147.29 [EFFECTIVE DATE.] This section is effective for disaster 147.30 areas declarations made after April 15, 2001. 147.31 Sec. 10. Minnesota Statutes 2000, section 349.19, 147.32 subdivision 2a, is amended to read: 147.33 Subd. 2a. [TAX REFUND OR CREDIT.] (a) Each organization 147.34 that receives a refund or credit under section 297E.02, 147.35 subdivision 4, paragraph (d), must within four business days of 147.36 receiving a refund under that paragraph deposit the refund in 148.1 the organization's gambling account. 148.2 (b)In addition, each organization must annually calculate148.35.26 percent of the sum of the amount of tax it paid under:148.4(1) section 297E.02, subdivision 1, on gross receipts, less148.5prizes paid, after August 1, 1998; and148.6(2) section 297E.02, subdivision 6, on combined receipts148.7received after August 1, 1998.148.8(c) The calculated amount must be reported to the board on148.9a form prescribed by the board by March 20 of the year after the148.10calendar year for which the calculated amount is made. The148.11calculated amount must be filed as part of the organization's148.12report of expenditure of profits from lawful gambling required148.13under section 349.19, subdivision 5.148.14(d)The organization may expend the tax refund or credit 148.15 issued under section 297E.02, subdivision 4, paragraph (d),plus148.16the amount calculated under paragraph (b),only for lawful 148.17 purposes, other than lawful purposes described in section 148.18 349.12, subdivision 25, paragraph (a), clauses (8), (9), and 148.19 (12). Amounts subject to this paragraph must be spent for 148.20 qualifying lawful purposes no later than one year after the 148.21 refund or credit is receivedor the tax savings calculated under148.22paragraph (b). 148.23 Sec. 11. [REPEALER.] 148.24 Minnesota Statutes 2000, sections 297I.05, subdivision 8; 148.25 and 297I.30, subdivision 3, are repealed effective for calendar 148.26 years beginning after December 31, 1999. 148.27 ARTICLE 4 148.28 FEDERAL UPDATE 148.29 Section 1. Minnesota Statutes 2000, section 289A.02, 148.30 subdivision 7, is amended to read: 148.31 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 148.32 defined otherwise, "Internal Revenue Code" means the Internal 148.33 Revenue Code of 1986, as amended through December 31,19992000. 148.34 [EFFECTIVE DATE.] This section is effective the day 148.35 following final enactment. 148.36 Sec. 2. Minnesota Statutes 2000, section 290.01, 149.1 subdivision 6b, is amended to read: 149.2 Subd. 6b. [FOREIGN OPERATING CORPORATION.] The term 149.3 "foreign operating corporation," when applied to a corporation, 149.4 means a domestic corporation with the following characteristics: 149.5 (1) it is part of a unitary business at least one member of 149.6 which is taxable in this state; 149.7 (2) it is not a foreign sales corporation under section 922 149.8 of the Internal Revenue Code, as amended through December 31, 149.9 1999, for the taxable year; and 149.10 (3) either (i) the average of the percentages of its 149.11 property and payrolls assigned to locations inside the United 149.12 States and the District of Columbia, excluding the commonwealth 149.13 of Puerto Rico and possessions of the United States, as 149.14 determined under section 290.191 or 290.20, is 20 percent or 149.15 less; or (ii) it has in effect a valid election under section 149.16 936 of the Internal Revenue Code. 149.17 [EFFECTIVE DATE.] This section is effective for taxable 149.18 years beginning after December 31, 2001. 149.19 Sec. 3. Minnesota Statutes 2000, section 290.01, 149.20 subdivision 19, is amended to read: 149.21 Subd. 19. [NET INCOME.] The term "net income" means the 149.22 federal taxable income, as defined in section 63 of the Internal 149.23 Revenue Code of 1986, as amended through the date named in this 149.24 subdivision, incorporating any elections made by the taxpayer in 149.25 accordance with the Internal Revenue Code in determining federal 149.26 taxable income for federal income tax purposes, and with the 149.27 modifications provided in subdivisions 19a to 19f. 149.28 In the case of a regulated investment company or a fund 149.29 thereof, as defined in section 851(a) or 851(g) of the Internal 149.30 Revenue Code, federal taxable income means investment company 149.31 taxable income as defined in section 852(b)(2) of the Internal 149.32 Revenue Code, except that: 149.33 (1) the exclusion of net capital gain provided in section 149.34 852(b)(2)(A) of the Internal Revenue Code does not apply; 149.35 (2) the deduction for dividends paid under section 149.36 852(b)(2)(D) of the Internal Revenue Code must be applied by 150.1 allowing a deduction for capital gain dividends and 150.2 exempt-interest dividends as defined in sections 852(b)(3)(C) 150.3 and 852(b)(5) of the Internal Revenue Code; and 150.4 (3) the deduction for dividends paid must also be applied 150.5 in the amount of any undistributed capital gains which the 150.6 regulated investment company elects to have treated as provided 150.7 in section 852(b)(3)(D) of the Internal Revenue Code. 150.8 The net income of a real estate investment trust as defined 150.9 and limited by section 856(a), (b), and (c) of the Internal 150.10 Revenue Code means the real estate investment trust taxable 150.11 income as defined in section 857(b)(2) of the Internal Revenue 150.12 Code. 150.13 The net income of a designated settlement fund as defined 150.14 in section 468B(d) of the Internal Revenue Code means the gross 150.15 income as defined in section 468B(b) of the Internal Revenue 150.16 Code. 150.17 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 150.18 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 150.19 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 150.20 Protection Act, Public Law Number 104-188, the provisions of 150.21 Public Law Number 104-117, the provisions of sections 313(a) and 150.22 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 150.23 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 150.24 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 150.25 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 150.26 Public Law Number 105-34, the provisions of section 6010 of the 150.27 Internal Revenue Service Restructuring and Reform Act of 1998, 150.28 Public Law Number 105-206,andthe provisions of section 4003 of 150.29 the Omnibus Consolidated and Emergency Supplemental 150.30 Appropriations Act, 1999, Public Law Number 105-277, and the 150.31 provisions of section 318 of the Consolidated Appropriation Act 150.32 of 2001, Public Law Number 106-554, shall become effective at 150.33 the time they become effective for federal purposes. 150.34 The Internal Revenue Code of 1986, as amended through 150.35 December 31, 1996, shall be in effect for taxable years 150.36 beginning after December 31, 1996. 151.1 The provisions of sections 202(a) and (b), 221(a), 225, 151.2 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 151.3 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 151.4 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 151.5 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 151.6 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 151.7 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 151.8 7002, and 7003 of the Internal Revenue Service Restructuring and 151.9 Reform Act of 1998, Public Law Number 105-206, the provisions of 151.10 section 3001 of the Omnibus Consolidated and Emergency 151.11 Supplemental Appropriations Act, 1999, Public Law Number 151.12 105-277,andthe provisions of section 3001 of the Miscellaneous 151.13 Trade and Technical Corrections Act of 1999, Public Law Number 151.14 106-36, and the provisions of section 316 of the Consolidated 151.15 Appropriation Act of 2001, Public Law Number 106-554, shall 151.16 become effective at the time they become effective for federal 151.17 purposes. 151.18 The Internal Revenue Code of 1986, as amended through 151.19 December 31, 1997, shall be in effect for taxable years 151.20 beginning after December 31, 1997. 151.21 The provisions of sections 5002, 6009, 6011, and 7001 of 151.22 the Internal Revenue Service Restructuring and Reform Act of 151.23 1998, Public Law Number 105-206, the provisions of section 9010 151.24 of the Transportation Equity Act for the 21st Century, Public 151.25 Law Number 105-178, the provisions of sections 1004, 4002, and 151.26 5301 of the Omnibus Consolidation and Emergency Supplemental 151.27 Appropriations Act, 1999, Public Law Number 105-277, the 151.28 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 151.29 Act of 1998, Public Law Number 105-369,andthe provisions of 151.30 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 151.31 Work Incentives Improvement Act of 1999, Public Law Number 151.32 106-170, the provisions of the Installment Tax Correction Act of 151.33 2000, Public Law Number 106-573, and the provisions of section 151.34 309 of the Consolidated Appropriation Act of 2001, Public Law 151.35 Number 106-554, shall become effective at the time they become 151.36 effective for federal purposes. 152.1 The Internal Revenue Code of 1986, as amended through 152.2 December 31, 1998, shall be in effect for taxable years 152.3 beginning after December 31, 1998. 152.4 The provisions of the FSC Repeal and Extraterritorial 152.5 Income Exclusion Act of 2000, Public Law Number 106-519, shall 152.6 become effective at the time it became effective for federal 152.7 purposes. 152.8 The Internal Revenue Code of 1986, as amended through 152.9 December 31, 1999, shall be in effect for taxable years 152.10 beginning after December 31, 1999. The provisions of sections 152.11 306 and 401 of the Consolidated Appropriation Act of 2001, 152.12 Public Law Number 106-554, shall become effective at the same 152.13 time it became effective for federal purposes. 152.14 The Internal Revenue Code of 1986, as amended through 152.15 December 31, 2000, shall be in effect for taxable years 152.16 beginning after December 31, 2000. 152.17 Except as otherwise provided, references to the Internal 152.18 Revenue Code in subdivisions 19a to 19g mean the code in effect 152.19 for purposes of determining net income for the applicable year. 152.20 [EFFECTIVE DATE.] This section is effective the day 152.21 following final enactment. 152.22 Sec. 4. Minnesota Statutes 2000, section 290.01, 152.23 subdivision 19c, is amended to read: 152.24 Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 152.25 INCOME.] For corporations, there shall be added to federal 152.26 taxable income: 152.27 (1) the amount of any deduction taken for federal income 152.28 tax purposes for income, excise, or franchise taxes based on net 152.29 income or related minimum taxes, including but not limited to 152.30 the tax imposed under section 290.0922, paid by the corporation 152.31 to Minnesota, another state, a political subdivision of another 152.32 state, the District of Columbia, or any foreign country or 152.33 possession of the United States; 152.34 (2) interest not subject to federal tax upon obligations 152.35 of: the United States, its possessions, its agencies, or its 152.36 instrumentalities; the state of Minnesota or any other state, 153.1 any of its political or governmental subdivisions, any of its 153.2 municipalities, or any of its governmental agencies or 153.3 instrumentalities; the District of Columbia; or Indian tribal 153.4 governments; 153.5 (3) exempt-interest dividends received as defined in 153.6 section 852(b)(5) of the Internal Revenue Code; 153.7 (4) the amount of any net operating loss deduction taken 153.8 for federal income tax purposes under section 172 or 832(c)(10) 153.9 of the Internal Revenue Code or operations loss deduction under 153.10 section 810 of the Internal Revenue Code; 153.11 (5) the amount of any special deductions taken for federal 153.12 income tax purposes under sections 241 to 247 of the Internal 153.13 Revenue Code; 153.14 (6) losses from the business of mining, as defined in 153.15 section 290.05, subdivision 1, clause (a), that are not subject 153.16 to Minnesota income tax; 153.17 (7) the amount of any capital losses deducted for federal 153.18 income tax purposes under sections 1211 and 1212 of the Internal 153.19 Revenue Code; 153.20 (8) the amount of any charitable contributions deducted for 153.21 federal income tax purposes under section 170 of the Internal 153.22 Revenue Code; 153.23 (9) the exempt foreign trade income of a foreign sales 153.24 corporation under sections 921(a) and 291 of the Internal 153.25 Revenue Code; 153.26 (10) the amount of percentage depletion deducted under 153.27 sections 611 through 614 and 291 of the Internal Revenue Code; 153.28 (11) for certified pollution control facilities placed in 153.29 service in a taxable year beginning before December 31, 1986, 153.30 and for which amortization deductions were elected under section 153.31 169 of the Internal Revenue Code of 1954, as amended through 153.32 December 31, 1985, the amount of the amortization deduction 153.33 allowed in computing federal taxable income for those 153.34 facilities; 153.35 (12) the amount of any deemed dividend from a foreign 153.36 operating corporation determined pursuant to section 290.17, 154.1 subdivision 4, paragraph (g); 154.2 (13) the amount of any environmental tax paid under section 154.3 59(a) of the Internal Revenue Code;and154.4 (14) the amount of a partner's pro rata share of net income 154.5 which does not flow through to the partner because the 154.6 partnership elected to pay the tax on the income under section 154.7 6242(a)(2) of the Internal Revenue Code; and 154.8 (15) the amount of net income excluded under section 114 of 154.9 the Internal Revenue Code. 154.10 [EFFECTIVE DATE.] This section is effective for taxable 154.11 years beginning after December 31, 2000. 154.12 Sec. 5. Minnesota Statutes 2000, section 290.01, 154.13 subdivision 19d, is amended to read: 154.14 Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 154.15 TAXABLE INCOME.] For corporations, there shall be subtracted 154.16 from federal taxable income after the increases provided in 154.17 subdivision 19c: 154.18 (1) the amount of foreign dividend gross-up added to gross 154.19 income for federal income tax purposes under section 78 of the 154.20 Internal Revenue Code; 154.21 (2) the amount of salary expense not allowed for federal 154.22 income tax purposes due to claiming the federal jobs credit 154.23 under section 51 of the Internal Revenue Code; 154.24 (3) any dividend (not including any distribution in 154.25 liquidation) paid within the taxable year by a national or state 154.26 bank to the United States, or to any instrumentality of the 154.27 United States exempt from federal income taxes, on the preferred 154.28 stock of the bank owned by the United States or the 154.29 instrumentality; 154.30 (4) amounts disallowed for intangible drilling costs due to 154.31 differences between this chapter and the Internal Revenue Code 154.32 in taxable years beginning before January 1, 1987, as follows: 154.33 (i) to the extent the disallowed costs are represented by 154.34 physical property, an amount equal to the allowance for 154.35 depreciation under Minnesota Statutes 1986, section 290.09, 154.36 subdivision 7, subject to the modifications contained in 155.1 subdivision 19e; and 155.2 (ii) to the extent the disallowed costs are not represented 155.3 by physical property, an amount equal to the allowance for cost 155.4 depletion under Minnesota Statutes 1986, section 290.09, 155.5 subdivision 8; 155.6 (5) the deduction for capital losses pursuant to sections 155.7 1211 and 1212 of the Internal Revenue Code, except that: 155.8 (i) for capital losses incurred in taxable years beginning 155.9 after December 31, 1986, capital loss carrybacks shall not be 155.10 allowed; 155.11 (ii) for capital losses incurred in taxable years beginning 155.12 after December 31, 1986, a capital loss carryover to each of the 155.13 15 taxable years succeeding the loss year shall be allowed; 155.14 (iii) for capital losses incurred in taxable years 155.15 beginning before January 1, 1987, a capital loss carryback to 155.16 each of the three taxable years preceding the loss year, subject 155.17 to the provisions of Minnesota Statutes 1986, section 290.16, 155.18 shall be allowed; and 155.19 (iv) for capital losses incurred in taxable years beginning 155.20 before January 1, 1987, a capital loss carryover to each of the 155.21 five taxable years succeeding the loss year to the extent such 155.22 loss was not used in a prior taxable year and subject to the 155.23 provisions of Minnesota Statutes 1986, section 290.16, shall be 155.24 allowed; 155.25 (6) an amount for interest and expenses relating to income 155.26 not taxable for federal income tax purposes, if (i) the income 155.27 is taxable under this chapter and (ii) the interest and expenses 155.28 were disallowed as deductions under the provisions of section 155.29 171(a)(2), 265 or 291 of the Internal Revenue Code in computing 155.30 federal taxable income; 155.31 (7) in the case of mines, oil and gas wells, other natural 155.32 deposits, and timber for which percentage depletion was 155.33 disallowed pursuant to subdivision 19c, clause (11), a 155.34 reasonable allowance for depletion based on actual cost. In the 155.35 case of leases the deduction must be apportioned between the 155.36 lessor and lessee in accordance with rules prescribed by the 156.1 commissioner. In the case of property held in trust, the 156.2 allowable deduction must be apportioned between the income 156.3 beneficiaries and the trustee in accordance with the pertinent 156.4 provisions of the trust, or if there is no provision in the 156.5 instrument, on the basis of the trust's income allocable to 156.6 each; 156.7 (8) for certified pollution control facilities placed in 156.8 service in a taxable year beginning before December 31, 1986, 156.9 and for which amortization deductions were elected under section 156.10 169 of the Internal Revenue Code of 1954, as amended through 156.11 December 31, 1985, an amount equal to the allowance for 156.12 depreciation under Minnesota Statutes 1986, section 290.09, 156.13 subdivision 7; 156.14 (9) the amount included in federal taxable income 156.15 attributable to the credits provided in Minnesota Statutes 1986, 156.16 section 273.1314, subdivision 9, or Minnesota Statutes, section 156.17 469.171, subdivision 6; 156.18 (10) amounts included in federal taxable income that are 156.19 due to refunds of income, excise, or franchise taxes based on 156.20 net income or related minimum taxes paid by the corporation to 156.21 Minnesota, another state, a political subdivision of another 156.22 state, the District of Columbia, or a foreign country or 156.23 possession of the United States to the extent that the taxes 156.24 were added to federal taxable income under section 290.01, 156.25 subdivision 19c, clause (1), in a prior taxable year; 156.26 (11) 80 percent of royalties, fees, or other like income 156.27 accrued or received from a foreign operating corporation or a 156.28 foreign corporation which is part of the same unitary business 156.29 as the receiving corporation; 156.30 (12) income or gains from the business of mining as defined 156.31 in section 290.05, subdivision 1, clause (a), that are not 156.32 subject to Minnesota franchise tax; 156.33 (13) the amount of handicap access expenditures in the 156.34 taxable year which are not allowed to be deducted or capitalized 156.35 under section 44(d)(7) of the Internal Revenue Code; 156.36 (14) the amount of qualified research expenses not allowed 157.1 for federal income tax purposes under section 280C(c) of the 157.2 Internal Revenue Code, but only to the extent that the amount 157.3 exceeds the amount of the credit allowed under section 290.068; 157.4 (15) the amount of salary expenses not allowed for federal 157.5 income tax purposes due to claiming the Indian employment credit 157.6 under section 45A(a) of the Internal Revenue Code; 157.7 (16) the amount of any refund of environmental taxes paid 157.8 under section 59A of the Internal Revenue Code;and157.9 (17) for taxable years beginning before January 1, 2008, 157.10 the amount of the federal small ethanol producer credit allowed 157.11 under section 40(a)(3) of the Internal Revenue Code which is 157.12 included in gross income under section 87 of the Internal 157.13 Revenue Code; and 157.14 (18) for a corporation whose foreign sales corporation, as 157.15 defined in section 922 of the Internal Revenue Code, constituted 157.16 a foreign operating corporation during the taxable years ending 157.17 during calendar year 1992 and a return was filed by August 15, 157.18 1996, claiming the deduction under this subdivision for income 157.19 received from the foreign operating corporation, an amount equal 157.20 to 1.23 multiplied by the amount of income excluded under 157.21 section 114 of the Internal Revenue Code, provided the income is 157.22 not income of a foreign operating company. 157.23 [EFFECTIVE DATE.] This section is effective for taxable 157.24 years beginning after December 31, 2000. 157.25 Sec. 6. Minnesota Statutes 2000, section 290.01, 157.26 subdivision 31, is amended to read: 157.27 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 157.28 defined otherwise, "Internal Revenue Code" means the Internal 157.29 Revenue Code of 1986, as amended through December 31,19992000. 157.30 [EFFECTIVE DATE.] This section is effective at the same 157.31 time and in the same manner as the federal changes made by the 157.32 FSC Repeal and Extraterritorial Income Exclusion Act of 2000, 157.33 Public Law Number 106-519, and the Consolidated Appropriation 157.34 Act of 2001, Public Law Number 106-554, becomes effective. 157.35 Sec. 7. Minnesota Statutes 2000, section 290A.03, 157.36 subdivision 15, is amended to read: 158.1 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 158.2 means the Internal Revenue Code of 1986, as amended through 158.3 December 31,19992000. 158.4 [EFFECTIVE DATE.] This section is effective the day 158.5 following final enactment. 158.6 Sec. 8. Minnesota Statutes 2000, section 291.005, 158.7 subdivision 1, is amended to read: 158.8 Subdivision 1. Unless the context otherwise clearly 158.9 requires, the following terms used in this chapter shall have 158.10 the following meanings: 158.11 (1) "Federal gross estate" means the gross estate of a 158.12 decedent as valued and otherwise determined for federal estate 158.13 tax purposes by federal taxing authorities pursuant to the 158.14 provisions of the Internal Revenue Code. 158.15 (2) "Minnesota gross estate" means the federal gross estate 158.16 of a decedent after (a) excluding therefrom any property 158.17 included therein which has its situs outside Minnesota and (b) 158.18 including therein any property omitted from the federal gross 158.19 estate which is includable therein, has its situs in Minnesota, 158.20 and was not disclosed to federal taxing authorities. 158.21 (3) "Personal representative" means the executor, 158.22 administrator or other person appointed by the court to 158.23 administer and dispose of the property of the decedent. If 158.24 there is no executor, administrator or other person appointed, 158.25 qualified, and acting within this state, then any person in 158.26 actual or constructive possession of any property having a situs 158.27 in this state which is included in the federal gross estate of 158.28 the decedent shall be deemed to be a personal representative to 158.29 the extent of the property and the Minnesota estate tax due with 158.30 respect to the property. 158.31 (4) "Resident decedent" means an individual whose domicile 158.32 at the time of death was in Minnesota. 158.33 (5) "Nonresident decedent" means an individual whose 158.34 domicile at the time of death was not in Minnesota. 158.35 (6) "Situs of property" means, with respect to real 158.36 property, the state or country in which it is located; with 159.1 respect to tangible personal property, the state or country in 159.2 which it was normally kept or located at the time of the 159.3 decedent's death; and with respect to intangible personal 159.4 property, the state or country in which the decedent was 159.5 domiciled at death. 159.6 (7) "Commissioner" means the commissioner of revenue or any 159.7 person to whom the commissioner has delegated functions under 159.8 this chapter. 159.9 (8) "Internal Revenue Code" means the United States 159.10 Internal Revenue Code of 1986, as amended through December 31, 159.1119992000. 159.12 [EFFECTIVE DATE.] This section is effective the day 159.13 following final enactment. 159.14 ARTICLE 5 159.15 TAX ADMINISTRATION 159.16 Section 1. Minnesota Statutes 2000, section 16D.08, 159.17 subdivision 2, is amended to read: 159.18 Subd. 2. [POWERS.] (a) In addition to the collection 159.19 remedies available to private collection agencies in this state, 159.20 the commissioner, with legal assistance from the attorney 159.21 general, may utilize any statutory authority granted to a 159.22 referring agency for purposes of collecting debt owed to that 159.23 referring agency. The commissioner may also delegate to the 159.24 enterprise the tax collection remedies in sections 270.06, 159.25 clauses (7) and (17), excluding the power to subpoena witnesses; 159.26 270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 159.27 excluding subdivision 14; 270.7001 to 270.72; and 290.92, 159.28 subdivision 23, except that a continuous wage levy under section 159.29 290.92, subdivision 23, is only effective for 70 days, unless no 159.30 competing wage garnishments, executions, or levies are served 159.31 within the 70-day period, in which case a wage levy is 159.32 continuous until a competing garnishment, execution, or levy is 159.33 served in the second or a succeeding 70-day period, in which 159.34 case a continuous wage levy is effective for the remainder of 159.35 that period. A debtor who qualifies for cancellation of 159.36 collection costs under section 16D.11, subdivision 3, clause 160.1 (1), can apply to the commissioner for reduction or release of a 160.2 continuous wage levy, if the debtor establishes that the debtor 160.3 needs all or a portion of the wages being levied upon to pay for 160.4 essential living expenses, such as food, clothing, shelter, 160.5 medical care, or expenses necessary for maintaining employment. 160.6 The commissioner's determination not to reduce or release a 160.7 continuous wage levy is appealable to district court. The word 160.8 "tax" or "taxes" when used in the tax collection statutes listed 160.9 in this subdivision also means debts referred under this chapter. 160.10 (b) For debts other than state taxesor, child support, or 160.11 student loans, before any of the tax collection remedies listed 160.12 in this subdivision can be used, except for the remedies in 160.13 section 270.06, clauses (7) and (17), if the referring agency 160.14 has not already obtained a judgment or filed a lien, the 160.15 commissioner must first obtain a judgment against the debtor. 160.16 For student loans when the referring agency has not obtained a 160.17 judgment or filed a lien, before using the tax collection 160.18 remedies listed in this subdivision, except for the remedies in 160.19 section 270.06, clauses (7) and (17), the commissioner shall 160.20 give the debtor 30 days' notice in writing, which may be served 160.21 in any manner permitted in section 270.68 for service of a 160.22 summons and complaint. The notice must advise the debtor of the 160.23 debtor's right to request that the commissioner commence a court 160.24 action, and that if no such request is made within 30 days after 160.25 service of the notice, the commissioner may use these tax 160.26 collection remedies. If a timely request is made, the 160.27 commissioner shall obtain a judgment before using these tax 160.28 collection remedies. 160.29 [EFFECTIVE DATE.] This section is effective for student 160.30 loans referred to the commissioner for collection on or after 160.31 July 1, 2001. 160.32 Sec. 2. Minnesota Statutes 2000, section 84.922, is 160.33 amended by adding a subdivision to read: 160.34 Subd. 11. [PROOF OF SALES TAX PAYMENT.] A person applying 160.35 for initial registration in Minnesota of an all-terrain vehicle 160.36 shall provide a purchaser's certificate showing a complete 161.1 description of the all-terrain vehicle, the seller's name and 161.2 address, the full purchase price of the all-terrain vehicle, and 161.3 the trade-in allowance, if any. The certificate also must 161.4 include information showing either that (1) the sales and use 161.5 tax under chapter 297A was paid, or (2) the purchase was exempt 161.6 from tax under chapter 297A. The certificate is not required if 161.7 the applicant provides a receipt, invoice, or other document 161.8 that shows the all-terrain vehicle was purchased from a retailer 161.9 maintaining a place of business in this state as defined in 161.10 section 297A.66, subdivision 1. 161.11 [EFFECTIVE DATE.] This section is effective for 161.12 registrations occurring on or after July 1, 2001. 161.13 Sec. 3. Minnesota Statutes 2000, section 144.3831, 161.14 subdivision 2, is amended to read: 161.15 Subd. 2. [COLLECTION AND PAYMENT OF FEE.] The public water 161.16 supply described in subdivision 1 shall: 161.17 (1) collect the fees assessed on its service connections; 161.18 (2) pay the department ofrevenuehealth an amount 161.19 equivalent to the fees based on the total number of service 161.20 connections. The service connections for each public water 161.21 supply described in subdivision 1 shall be verified every four 161.22 years by the department of health; and 161.23 (3) pay one-fourth of the total yearly fee to the 161.24 department ofrevenuehealth each calendar quarter.The first161.25quarterly payment is due on or before September 30, 1992.In 161.26 lieu of quarterly payments, a public water supply described in 161.27 subdivision 1 with fewer than 50 service connections may make a 161.28 single annual payment by June 30 each year, starting in 1993. 161.29 The fees payable to the department ofrevenuehealth shall be 161.30 deposited in the state treasury as nondedicated state government 161.31 special revenue fund revenues. 161.32 [EFFECTIVE DATE.] This section is effective the day 161.33 following final enactment. 161.34 Sec. 4. Minnesota Statutes 2000, section 270.06, is 161.35 amended to read: 161.36 270.06 [POWERS AND DUTIES.] 162.1 The commissioner of revenue shall: 162.2 (1) have and exercise general supervision over the 162.3 administration of the assessment and taxation laws of the state, 162.4 over assessors, town, county, and city boards of review and 162.5 equalization, and all other assessing officers in the 162.6 performance of their duties, to the end that all assessments of 162.7 property be made relatively just and equal in compliance with 162.8 the laws of the state; 162.9 (2) confer with, advise, and give the necessary 162.10 instructions and directions to local assessors and local boards 162.11 of review throughout the state as to their duties under the laws 162.12 of the state; 162.13 (3) direct proceedings, actions, and prosecutions to be 162.14 instituted to enforce the laws relating to the liability and 162.15 punishment of public officers and officers and agents of 162.16 corporations for failure or negligence to comply with the 162.17 provisions of the laws of this state governing returns of 162.18 assessment and taxation of property, and cause complaints to be 162.19 made against local assessors, members of boards of equalization, 162.20 members of boards of review, or any other assessing or taxing 162.21 officer, to the proper authority, for their removal from office 162.22 for misconduct or negligence of duty; 162.23 (4) require county attorneys to assist in the commencement 162.24 of prosecutions in actions or proceedings for removal, 162.25 forfeiture and punishment for violation of the laws of this 162.26 state in respect to the assessment and taxation of property in 162.27 their respective districts or counties; 162.28 (5) require town, city, county, and other public officers 162.29 to report information as to the assessment of property, 162.30 collection of taxes received from licenses and other sources, 162.31 and such other information as may be needful in the work of the 162.32 department of revenue, in such form and upon such blanks as the 162.33 commissioner may prescribe; 162.34 (6) require individuals, copartnerships, companies, 162.35 associations, and corporations to furnish information concerning 162.36 their capital, funded or other debt, current assets and 163.1 liabilities, earnings, operating expenses, taxes, as well as all 163.2 other statements now required by law for taxation purposes; 163.3 (7) subpoena witnesses, at a time and place reasonable 163.4 under the circumstances, to appear and give testimony, and to 163.5 produce books, records, papers and documents for inspection and 163.6 copying relating to any matter which the commissioner may have 163.7 authority to investigate or determine; 163.8 (8) issue a subpoena which does not identify the person or 163.9 persons with respect to whose liability the subpoena is issued, 163.10 but only if (a) the subpoena relates to the investigation of a 163.11 particular person or ascertainable group or class of persons, 163.12 (b) there is a reasonable basis for believing that such person 163.13 or group or class of persons may fail or may have failed to 163.14 comply with any law administered by the commissioner, (c) the 163.15 information sought to be obtained from the examination of the 163.16 records (and the identity of the person or persons with respect 163.17 to whose liability the subpoena is issued) is not readily 163.18 available from other sources, (d) the subpoena is clear and 163.19 specific as to the information sought to be obtained, and (e) 163.20 the information sought to be obtained is limited solely to the 163.21 scope of the investigation. Provided further that the party 163.22 served with a subpoena which does not identify the person or 163.23 persons with respect to whose tax liability the subpoena is 163.24 issued shall have the right, within 20 days after service of the 163.25 subpoena, to petition the district court for the judicial 163.26 district in which lies the county in which that party is located 163.27 for a determination as to whether the commissioner of revenue 163.28 has complied with all the requirements in (a) to (e), and thus, 163.29 whether the subpoena is enforceable. If no such petition is 163.30 made by the party served within the time prescribed, the 163.31 subpoena shall have the force and effect of a court order; 163.32 (9) cause the deposition of witnesses residing within or 163.33 without the state, or absent therefrom, to be taken, upon notice 163.34 to the interested party, if any, in like manner that depositions 163.35 of witnesses are taken in civil actions in the district court, 163.36 in any matter which the commissioner may have authority to 164.1 investigate or determine; 164.2 (10) investigate the tax laws of other states and countries 164.3 and to formulate and submit to the legislature such legislation 164.4 as the commissioner may deem expedient to prevent evasions of 164.5 assessment and taxing laws, and secure just and equal taxation 164.6 and improvement in the system of assessment and taxation in this 164.7 state; 164.8 (11) consult and confer with the governor upon the subject 164.9 of taxation, the administration of the laws in regard thereto, 164.10 and the progress of the work of the department of revenue, and 164.11 furnish the governor, from time to time, such assistance and 164.12 information as the governor may require relating to tax matters; 164.13 (12) transmit to the governor, on or before the third 164.14 Monday in December of each even-numbered year, and to each 164.15 member of the legislature, on or before November 15 of each 164.16 even-numbered year, the report of the department of revenue for 164.17 the preceding years, showing all the taxable property in the 164.18 state and the value of the same, in tabulated form; 164.19 (13) inquire into the methods of assessment and taxation 164.20 and ascertain whether the assessors faithfully discharge their 164.21 duties, particularly as to their compliance with the laws 164.22 requiring the assessment of all property not exempt from 164.23 taxation; 164.24 (14) administer and enforce the assessment and collection 164.25 of state taxes and fees, including the use of any remedy 164.26 available to nongovernmental creditors, and, from time to time, 164.27 make, publish, and distribute rules for the administration and 164.28 enforcement of assessments and fees administered by the 164.29 commissioner and state tax laws. The rules have the force of 164.30 law; 164.31 (15) prepare blank forms for the returns required by state 164.32 tax law and distribute them throughout the state, furnishing 164.33 them subject to charge on application; 164.34 (16) prescribe rules governing the qualification and 164.35 practice of agents, attorneys, or other persons representing 164.36 taxpayers before the commissioner. The rules may require that 165.1 those persons, agents, and attorneys show that they are of good 165.2 character and in good repute, have the necessary qualifications 165.3 to give taxpayers valuable services, and are otherwise competent 165.4 to advise and assist taxpayers in the presentation of their case 165.5 before being recognized as representatives of taxpayers. After 165.6 due notice and opportunity for hearing, the commissioner may 165.7 suspend anddisbarbar from further practice before the 165.8 commissioner any person, agent, or attorney who is shown to be 165.9 incompetent or disreputable, who refuses to comply with the 165.10 rules, or who with intent to defraud, willfully or knowingly 165.11 deceives, misleads, or threatens a taxpayer or prospective 165.12 taxpayer, by words, circular, letter, or by advertisement. This 165.13 clause does not curtail the rights of individuals to appear in 165.14 their own behalf or partners or corporations' officers to appear 165.15 in behalf of their respective partnerships or corporations; 165.16 (17) appoint agents as the commissioner considers necessary 165.17 to make examinations and determinations. The agents have the 165.18 rights and powers conferred on the commissioner to subpoena, 165.19 examine, and copy books, records, papers, or memoranda, subpoena 165.20 witnesses, administer oaths and affirmations, and take 165.21 testimony. In addition to administrative subpoenas of the 165.22 commissioner and the agents, upon demand of the commissioner or 165.23 an agent, the court administrator of any district court shall 165.24 issue a subpoena for the attendance of a witness or the 165.25 production of books, papers, records, or memoranda before the 165.26 agent for inspection and copying. Disobedience of a court 165.27 administrator's subpoena shall be punished by the district court 165.28 of the district in which the subpoena is issued, or in the case 165.29 of a subpoena issued by the commissioner or an agent, by the 165.30 district court of the district in which the party served with 165.31 the subpoena is located, in the same manner as contempt of the 165.32 district court; 165.33 (18) appoint and employ additional help, purchase supplies 165.34 or materials, or incur other expenditures in the enforcement of 165.35 state tax laws as considered necessary. The salaries of all 165.36 agents and employees provided for in this chapter shall be fixed 166.1 by the appointing authority, subject to the approval of the 166.2 commissioner of administration; 166.3 (19) execute and administer any agreement with the 166.4 secretary of the treasury of the United States or a 166.5 representative of another state regarding the exchange of 166.6 information and administration of the tax laws; 166.7 (20) administer and enforce the provisions of sections 166.8 325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act; 166.9 (21) authorize the use of unmarked motor vehicles to 166.10 conduct seizures or criminal investigations pursuant to the 166.11 commissioner's authority; and 166.12 (22) exercise other powers and perform other duties 166.13 required of or imposed upon the commissioner of revenue by law. 166.14 [EFFECTIVE DATE.] This section is effective the day 166.15 following final enactment. 166.16 Sec. 5. Minnesota Statutes 2000, section 270.60, is 166.17 amended by adding a subdivision to read: 166.18 Subd. 5. [FEES; APPROPRIATION.] (a) The commissioner may 166.19 enter into an agreement with the governing body of any federally 166.20 recognized Indian reservation in Minnesota concerning fees 166.21 administered by the commissioner that are paid by the tribe, 166.22 members of the tribe, or persons who conduct business with the 166.23 tribe, or otherwise imposed on on-reservation activities. The 166.24 agreement may provide for the refund or sharing of the fee. The 166.25 commissioner may make any payments required by the agreement 166.26 from the fees collected. 166.27 (b) Each head of an agency, board, or other governmental 166.28 entity that administers a program that is funded by fees 166.29 administered by the commissioner may sign an agreement entered 166.30 into by the commissioner under this subdivision. An agreement 166.31 is not valid until signed by the head of each agency, board, or 166.32 other governmental entity that administers a program funded by 166.33 the particular fee covered in an agreement and by the 166.34 commissioner of revenue. 166.35 (c) There is annually appropriated to the commissioner of 166.36 revenue from the funds for which the fees are collected the 167.1 amounts necessary to make payments as provided in this 167.2 subdivision. 167.3 [EFFECTIVE DATE.] This section is effective the day 167.4 following final enactment and applies to all fees administered 167.5 by the commissioner of revenue for which timely claims for 167.6 refund have been, or can be, filed. 167.7 Sec. 6. Minnesota Statutes 2000, section 270.70, 167.8 subdivision 13, is amended to read: 167.9 Subd. 13. [LEVY AND SALE BY SHERIFF.] If any tax payable 167.10 to the commissioner of revenue or to the department of revenue 167.11 is not paid as provided in subdivision 2, the commissioner may,167.12within five years after the date of assessment of the167.13tax, within the time periods provided in subdivision 1 for 167.14 collection of taxes, delegate the authority granted by 167.15 subdivision 1, by means of issuing a warrant to the sheriff of 167.16 any county of the state commanding the sheriff, as agent for the 167.17 commissioner, to levy upon and sell the real and personal 167.18 property of the person liable for the payment or collection of 167.19 the tax and to levy upon the rights to property of that person 167.20 within the county, or to levy upon and seize any property within 167.21 the county on which there is a lien provided in section 270.69, 167.22 and to return the warrant to the commissioner and pay to the 167.23 commissioner the money collected by virtue thereof by a time to 167.24 be therein specified not less than 60 days from the date of the 167.25 warrant. The sheriff shall proceed thereunder to levy upon and 167.26 seize any property of the person and to levy upon the rights to 167.27 property of the person within the county (except the person's 167.28 homestead or that property which is exempt from execution 167.29 pursuant to section 550.37), or to levy upon and seize any 167.30 property within the county on which there is a lien provided in 167.31 section 270.69. For purposes of the preceding sentence, the 167.32 term "tax" shall include any penalty, interest and costs 167.33 properly payable. The sheriff shall then sell so much of the 167.34 property levied upon as is required to satisfy the taxes, 167.35 interest, and penalties, together with the sheriff's costs; but 167.36 the sales, and the time and manner of redemption therefrom, 168.1 shall, to the extent not provided in sections 270.701 to 168.2 270.709, be governed by chapter 550. The proceeds of the sales, 168.3 less the sheriff's costs, shall be turned over to the 168.4 commissioner, who shall then apply the proceeds as provided in 168.5 section 270.708. 168.6 [EFFECTIVE DATE.] This section is effective the day 168.7 following final enactment for all taxes for which issuance of a 168.8 warrant under this subdivision has not been barred as of that 168.9 date. 168.10 Sec. 7. Minnesota Statutes 2000, section 270.73, 168.11 subdivision 1, is amended to read: 168.12 Subdivision 1. [POSTING, NOTICE.] Pursuant to the 168.13 authority to disclose under section 270B.12, subdivision 4, the 168.14 commissioner shall, by the 15th of each month, submit to the 168.15 commissioner of public safety a list of all taxpayers who are 168.16 required to pay, withhold, or collect the tax imposed by section 168.17 290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or 168.18 297A.02, or local sales and use tax payable to the commissioner 168.19 of revenue, or a local option tax administered and collected by 168.20 the commissioner of revenue, and who are ten days or more 168.21 delinquent in either filing a tax return or paying the tax. 168.22 The commissioner of revenue is under no obligation to list 168.23 a taxpayer whose business is inactive. At least ten days before 168.24 notifying the commissioner of public safety, the commissioner of 168.25 revenue shall notify the taxpayer of the intended action. 168.26 The commissioner of public safety shall post the list in 168.27 the same manner as provided in section 340A.318, subdivision 3. 168.28 The list will prominently show the date of posting. If a 168.29 taxpayer previously listed files all returns and pays all taxes 168.30 then due, the commissioner shall notify the commissioner of 168.31 public safety within two business days. 168.32 [EFFECTIVE DATE.] This section is effective for lists 168.33 submitted to the commissioner of public safety on or after the 168.34 day following final enactment. 168.35 Sec. 8. Minnesota Statutes 2000, section 270A.03, 168.36 subdivision 5, is amended to read: 169.1 Subd. 5. [DEBT.] "Debt" means a legal obligation of a 169.2 natural person to pay a fixed and certain amount of money, which 169.3 equals or exceeds $25 and which is due and payable to a claimant 169.4 agency. The term includes criminal fines imposed under section 169.5 609.10 or 609.125 and restitution. A debt may arise under a 169.6 contractual or statutory obligation, a court order, or other 169.7 legal obligation, but need not have been reduced to judgment. 169.8 A debt includes any legal obligation of a current recipient 169.9 of assistance which is based on overpayment of an assistance 169.10 grant where that payment is based on a client waiver or an 169.11 administrative or judicial finding of an intentional program 169.12 violation; or where the debt is owed to a program wherein the 169.13 debtor is not a client at the time notification is provided to 169.14 initiate recovery under this chapter and the debtor is not a 169.15 current recipient of food stamps, transitional child care, or 169.16 transitional medical assistance. 169.17 A debt does not include any legal obligation to pay a 169.18 claimant agency for medical care, including hospitalization if 169.19 the income of the debtor at the time when the medical care was 169.20 rendered does not exceed the following amount: 169.21 (1) for an unmarried debtor, an income of$6,400$8,800 or 169.22 less; 169.23 (2) for a debtor with one dependent, an income 169.24 of$8,200$11,270 or less; 169.25 (3) for a debtor with two dependents, an income 169.26 of$9,700$13,330 or less; 169.27 (4) for a debtor with three dependents, an income of 169.28$11,000$15,120 or less; 169.29 (5) for a debtor with four dependents, an income 169.30 of$11,600$15,950 or less; and 169.31 (6) for a debtor with five or more dependents, an income of 169.32$12,100$16,630 or less. 169.33 The income amounts in this subdivision shall be adjusted 169.34 for inflation for debts incurred in calendar years19912001 and 169.35 thereafter. The dollar amount of each income level that applied 169.36 to debts incurred in the prior year shall be increased in the 170.1 same manner as provided in section290.06, subdivision 2d, for170.2the expansion of the tax rate brackets1f of the Internal 170.3 Revenue Code of 1986, as amended through December 31, 2000, 170.4 except that for the purposes of this subdivision the percentage 170.5 increase shall be determined from the year starting September 1, 170.6 1999, and ending August 31, 2000, as the base year for adjusting 170.7 for inflation for debts incurred after December 31, 2000. 170.8 Debt also includes an agreement to pay a MinnesotaCare 170.9 premium, regardless of the dollar amount of the premium 170.10 authorized under section 256L.15, subdivision 1a. 170.11 [EFFECTIVE DATE.] This section is effective for debts 170.12 incurred after December 31, 2000. 170.13 Sec. 9. Minnesota Statutes 2000, section 270A.11, is 170.14 amended to read: 170.15 270A.11 [DATA PRIVACY.] 170.16 Private and confidential data on individuals may be 170.17 exchanged among the department, the taxpayer's rights advocate, 170.18 the attorney general, the claimant agency, and the debtor as 170.19 necessary to accomplish and effectuate the intent of sections 170.20 270A.01 to 270A.12, as provided by section 13.05, subdivision 4, 170.21 clause (b). The department may disclose to the claimant agency 170.22 only the debtor's name, address, social security number and the 170.23 amount of the refund, and in the case of a joint return, the 170.24 name of the debtor's spouse. Any person employed by, or 170.25 formerly employed by, a claimant agency who discloses any such 170.26 information for any other purpose, shall be subject to the civil 170.27 and criminal penalties of section 270B.18. Data collected by 170.28 the department from claimant agencies relating to claims filed 170.29 under this chapter are private data on individuals. 170.30 [EFFECTIVE DATE.] This section is effective the day 170.31 following final enactment. 170.32 Sec. 10. Minnesota Statutes 2000, section 270B.02, 170.33 subdivision 2, is amended to read: 170.34 Subd. 2. [PROTECTED NONPUBLIC DATA.] The following are 170.35 protected nonpublic data as defined in section 13.02, 170.36 subdivision 13: 171.1 (1) criteria for determining which computer processed 171.2 returns are selected for audit; 171.3 (2) criteria for determining which returns are selected for 171.4 an in-depth audit;and171.5 (3) criteria for determining which accounts receivable 171.6 balances below a stated amount are written off or canceled; and 171.7 (4) criteria or information used in determining which 171.8 alleged criminal violations of any law administered by the 171.9 commissioner are selected for criminal investigation. 171.10 [EFFECTIVE DATE.] This section is effective the day 171.11 following final enactment. 171.12 Sec. 11. Minnesota Statutes 2000, section 270B.02, 171.13 subdivision 3, is amended to read: 171.14 Subd. 3. [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 171.15 NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 171.16 name or existence of an informer, informer letters, and other 171.17unsoliciteddata, in whatever form, given to the department of 171.18 revenue by a person, other than the data subject, who informs 171.19 that a specific taxpayer is not or may not be in compliance with 171.20 tax laws, or nontax laws administered by the department of 171.21 revenue, including laws not listed in section 270B.01, 171.22 subdivision 8, are confidential data on individuals or protected 171.23 nonpublic data as defined in section 13.02, subdivisions 3 and 171.24 13. 171.25 (b) Data under paragraph (a) may be disclosed with the 171.26 consent of the informer or upon a written finding by a court 171.27 that the information provided by the informer was false and that 171.28 there is evidence that the information was provided in bad 171.29 faith. This subdivision does not alter disclosure 171.30 responsibilities or obligations under the rules of criminal 171.31 procedure. 171.32 [EFFECTIVE DATE.] This section is effective the day 171.33 following final enactment. 171.34 Sec. 12. Minnesota Statutes 2000, section 270B.03, 171.35 subdivision 6, is amended to read: 171.36 Subd. 6. [INVESTIGATIVE DATA.] For purposes of any law 172.1 administered by the department of revenue, including laws not 172.2 listed in section 270B.01, subdivision 8, investigative data 172.3 collected or created by the department of revenue in order to 172.4 prepare a case against a person, whether known or unknown, for 172.5 the commission of a crime is confidential or protected nonpublic 172.6 during an investigation. When the investigation becomes 172.7 inactive, as defined in section 13.82, subdivision 5, the 172.8classifications otherwise applicable under any other laws become172.9effectivedata is private or nonpublic. 172.10 [EFFECTIVE DATE.] This section is effective the day 172.11 following final enactment. 172.12 Sec. 13. Minnesota Statutes 2000, section 272.02, 172.13 subdivision 10, is amended to read: 172.14 Subd. 10. [PERSONAL PROPERTY USED FOR POLLUTION CONTROL.] 172.15 Personal property used primarily for the abatement and control 172.16 of air, water, or land pollution is exempt to the extent that it 172.17 is so used, and real property is exempt if it is used primarily 172.18 for abatement and control of air, water, or land pollution as 172.19 part of an agricultural operation, as a part of a centralized 172.20 treatment and recovery facility operating under a permit issued 172.21 by the Minnesota pollution control agency pursuant to chapters 172.22 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 172.23 and 7045.0020 to 7045.1260, as a wastewater treatment facility 172.24 and for the treatment, recovery, and stabilization of metals, 172.25 oils, chemicals, water, sludges, or inorganic materials from 172.26 hazardous industrial wastes, or as part of an electric 172.27 generation system. For purposes of this subdivision, personal 172.28 property includes ponderous machinery and equipment used in a 172.29 business or production activity that at common law is considered 172.30 real property. 172.31 Any taxpayer requesting exemption of all or a portion of 172.32 any real property or any equipment or device, or part thereof, 172.33 operated primarily for the control or abatement of airor, 172.34 water, or land pollution shall file an application with the 172.35 commissioner of revenue.The equipment or device shall meet172.36standards, rules, or criteria prescribed by the Minnesota173.1pollution control agency, and must be installed or operated in173.2accordance with a permit or order issued by that agency.The 173.3 Minnesota pollution control agency shall upon request of the 173.4 commissioner furnish informationorand advice to the 173.5 commissioner. 173.6 The information and advice furnished by the Minnesota 173.7 pollution control agency must include statements as to whether 173.8 the equipment, device, or real property meets a standard, rule, 173.9 criteria, guideline, policy, or order of the Minnesota pollution 173.10 control agency, and whether the equipment, device, or real 173.11 property is installed or operated in accordance with it. On 173.12 determining that property qualifies for exemption, the 173.13 commissioner shall issue an order exempting the property from 173.14 taxation. The equipmentor, device, or real property shall 173.15 continue to be exempt from taxation as long as thepermitorder 173.16 issued by theMinnesota pollution control agencycommissioner 173.17 remains in effect. 173.18 [EFFECTIVE DATE.] This section is effective for exemption 173.19 applications received on or after July 1, 2001. 173.20 Sec. 14. Minnesota Statutes 2000, section 273.061, 173.21 subdivision 1, is amended to read: 173.22 Subdivision 1. [OFFICE CREATED; APPOINTMENT, 173.23 QUALIFICATIONS.] Every county in this state shall have a county 173.24 assessor. The county assessor shall be appointed by the board 173.25 of county commissioners. The assessor shall be selected and 173.26 appointed because of knowledge and training in the field of 173.27 property taxation and appointment shall be approved by the 173.28 commissioner of revenue before the same shall become effective. 173.29 Upon receipt by the county commissioners of the commissioner of 173.30 revenue's refusal to approve an appointment, the term of the 173.31 appointee shall terminate at the end of that day. 173.32 The commissioner of revenue may grant approval on a 173.33 probationary basis for a period of two years. The commissioner 173.34 must base the decision to impose a probationary period on 173.35 objective and consistent criteria. At the end of the two-year 173.36 probationary period, the commissioner may either refuse to 174.1 approve the person's appointment for the remainder of the 174.2 person's four-year term, approve the person's appointment but 174.3 only for another two-year probationary period, or 174.4 unconditionally approve the person's appointment for the 174.5 remainder of the four-year term for which the person was 174.6 originally appointed by the county board. The criteria shall 174.7 not be considered rules and are not subject to the 174.8 Administrative Procedure Act. 174.9 Notwithstanding any law to the contrary, a county assessor 174.10 must have senior accreditation from the state board of assessors 174.11 by January 1, 1992, or within two years of the assessor's first 174.12 appointment under this section, whichever is later. 174.13 [EFFECTIVE DATE.] This section is effective the day 174.14 following final enactment. 174.15 Sec. 15. Minnesota Statutes 2000, section 273.061, 174.16 subdivision 2, is amended to read: 174.17 Subd. 2. [TERM; VACANCY.] (a) The terms of county 174.18 assessors appointed under this section shall be four years. A 174.19 new term shall begin on January 1 of every fourth year after 174.20 1973. When any vacancy in the office occurs, the board of 174.21 county commissioners, within3090 days thereafter, shall fill 174.22 the same by appointment for the remainder of the term, following 174.23 the procedure prescribed in subdivision 1. The term of the 174.24 county assessor may be terminated by the board of county 174.25 commissioners at any time, on charges ofinefficiency or neglect174.26of dutymalfeasance, misfeasance, or nonfeasance by the 174.27 commissioner of revenue. If the board of county commissioners 174.28 does not intend to reappoint a county assessor who has been 174.29 certified by the state board of assessors, the board shall 174.30 present written notice to the county assessor not later than 90 174.31 days prior to the termination of the assessor's term, that it 174.32 does not intend to reappoint the assessor. If written notice is 174.33 not timely made, the county assessor will automatically be 174.34 reappointed by the board of county commissioners. 174.35 The commissioner of revenue may recommend to the state 174.36 board of assessors the nonrenewal, suspension, or revocation of 175.1 an assessor's license as provided in sections 270.41 to 270.53. 175.2 (b) In the event of a vacancy in the office of county 175.3 assessor, through death, resignation or other reasons, the 175.4 deputy (or chief deputy, if more than one) shall perform the 175.5 functions of the office. If there is no deputy, the county 175.6 auditor shall designate a person to perform the duties of the 175.7 office until an appointment is made as provided in clause (a). 175.8 Such person shall perform the duties of the office for a period 175.9 not exceeding3090 days during which the county board must 175.10 appoint a county assessor. Such30-day90-day period may, 175.11 however, be extended by written approval of the commissioner of 175.12 revenue. 175.13 (c) In the case of the first appointment under paragraph 175.14 (a) of a county assessor who is accredited but who does not have 175.15 senior accreditation, an approval of the appointment by the 175.16 commissioner shall be provisional, provided that a county 175.17 assessor appointed to a provisional term under this paragraph 175.18 must reapply to the commissioner at the end of the provisional 175.19 term. A provisional term may not exceed two years. The 175.20 commissioner shall not approve the appointment for the remainder 175.21 of the four-year term unless the assessor has obtained senior 175.22 accreditation. 175.23 [EFFECTIVE DATE.] This section is effective the day 175.24 following final enactment. 175.25 Sec. 16. Minnesota Statutes 2000, section 273.072, 175.26 subdivision 1, is amended to read: 175.27 Subdivision 1. Any county and any city or town lying 175.28 wholly or partially within the county and constituting a 175.29 separate assessment district may, by agreement entered into 175.30 under section 471.59and approved by the commissioner of175.31revenue, provide for the assessment of property in the 175.32 municipality or town by the county assessor. Any two or more 175.33 cities or towns constituting separate assessment districts,175.34whether their assessors are elective or appointive,may enter 175.35 into an agreement under section 471.59 for the assessment of 175.36 property in the contracting units by the assessor of one of the 176.1 units or by an assessor who is jointly employed. 176.2 [EFFECTIVE DATE.] This section is effective the day 176.3 following final enactment. 176.4 Sec. 17. Minnesota Statutes 2000, section 273.1104, 176.5 subdivision 2, is amended to read: 176.6 Subd. 2. [NOTICE OF MARKET VALUE.] On or before May 1 in 176.7 each year, the commissioner shall send to each person subject to 176.8 the tax on unmined iron ores and to each taxing district 176.9 affected, a notice of the market value of the unmined ores as 176.10 determined by the commissionerprior to adjustment under176.11subdivision 1. Said notice shall be sent by mail directed to 176.12 such person at the address given in the report filed and the 176.13 assessor of such taxing district, but the validity of the tax 176.14 shall not be affected by the failure of the commissioner of 176.15 revenue to mail such notice or the failure of the person subject 176.16 to the tax to receive it. 176.17 On the first secular day following May 20, the commissioner 176.18 of revenue shall hold a hearing which may be adjourned from day 176.19 to day. All relevant and material evidence having probative 176.20 value with respect to the issues shall be submitted at the 176.21 hearing and such hearing shall not be a "contested case" within 176.22 the meaning of section 14.02, subdivision 3. Every person 176.23 subject to such tax may at such hearing present evidence and 176.24 argument on any matter bearing upon the validity or correctness 176.25 of the tax determined to be due, and the commissioner of revenue 176.26 shall review the determination of such tax. 176.27 [EFFECTIVE DATE.] This section is effective the day 176.28 following final enactment. 176.29 Sec. 18. Minnesota Statutes 2000, section 273.111, 176.30 subdivision 4, is amended to read: 176.31 Subd. 4. [DETERMINATION OF VALUE.] The value of any real 176.32 estate described in subdivision 3 shall upon timely application 176.33 by the owner, in the manner provided in subdivision 8, be 176.34 determined solely with reference to its appropriate agricultural 176.35 classification and value notwithstanding sections 272.03, 176.36 subdivision 8, and 273.11. In determining the value for ad 177.1 valorem tax purposes, the assessor shall use sales dataobtained177.2fromfor agricultural lands located outside the seven 177.3 metropolitan countiesbut within the region used for computing177.4the range of values under section 273.11, subdivision 10. The177.5sales shall havehaving similar soil types, number of degree 177.6 days, and other similar agricultural characteristicsas177.7contained in section 273.11, subdivision 10. Furthermore, the 177.8 assessor shall not consider any added values resulting from 177.9 nonagricultural factors. 177.10 [EFFECTIVE DATE.] This section is effective the day 177.11 following final enactment. 177.12 Sec. 19. Minnesota Statutes 2000, section 273.121, is 177.13 amended to read: 177.14 273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 177.15 Any county assessor or city assessor having the powers of a 177.16 county assessor, valuing or classifying taxable real property 177.17 shall in each year notify those persons whose property is to be 177.18assessed or reclassifiedincluded on the assessment roll that 177.19 year if the person's address is known to the assessor, otherwise 177.20 the occupant of the property. The notice shall be in writing 177.21 and shall be sent by ordinary mail at least ten days before the 177.22 meeting of the local board ofreview orappeal and equalization 177.23 under section 274.01 or the review process established under 177.24 section 274.13, subdivision 1c. It shall contain: (1) the 177.25 market value for the current and prior assessment, (2) the 177.26 limited market value under section 273.11, subdivision 1a for 177.27 the current and prior assessment, (3) the qualifying amount of 177.28 any improvements under section 273.11, subdivision 16 for the 177.29 current assessment, (4) the market value subject to taxation 177.30 after subtracting the amount of any qualifying improvements for 177.31 the current assessment, (5) thenewclassification of the 177.32 property for the current and prior assessment, (6) a note that 177.33 if the property is homestead and at least 35 years old, 177.34 improvements made to the property may be eligible for a 177.35 valuation exclusion under section 273.11, subdivision 16, (7) 177.36 the assessor's office address, and (8) the dates, places, and 178.1 times set for the meetings of the local board ofreview or178.2 appeal and equalization, the review process established under 178.3 section 274.13, subdivision 1c, and the county board of appeal 178.4 and equalization.If the assessment roll is not complete, the178.5notice shall be sent by ordinary mail at least ten days prior to178.6the date on which the board of review has adjournedThe 178.7 commissioner of revenue shall specify the form of the notice. 178.8 The assessor shall attach to the assessment roll a statement 178.9 that the notices required by this section have been mailed. Any 178.10 assessor who is not provided sufficient funds from the 178.11 assessor's governing body to provide such notices, may make 178.12 application to the commissioner of revenue to finance such 178.13 notices. The commissioner of revenue shall conduct an 178.14 investigation and, if satisfied that the assessor does not have 178.15 the necessary funds, issue a certification to the commissioner 178.16 of finance of the amount necessary to provide such notices. The 178.17 commissioner of finance shall issue a warrant for such amount 178.18 and shall deduct such amount from any state payment to such 178.19 county or municipality. The necessary funds to make such 178.20 payments are hereby appropriated. Failure to receive the notice 178.21 shall in no way affect the validity of the assessment, the 178.22 resulting tax, the procedures of any board of review or 178.23 equalization, or the enforcement of delinquent taxes by 178.24 statutory means. 178.25 [EFFECTIVE DATE.] This section is effective for notices 178.26 required to be mailed in 2002 and thereafter. 178.27 Sec. 20. Minnesota Statutes 2000, section 274.01, 178.28 subdivision 1, is amended to read: 178.29 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 178.30 GRIEVANCES.] (a) The town board of a town, or the council or 178.31 other governing body of a city, is the board ofreviewappeal 178.32 and equalization except (1) in cities whose charters provide for 178.33 a board of equalization or (2) in any city or town that has 178.34 transferred its local board of review power and duties to the 178.35 county board as provided in subdivision 3. The county assessor 178.36 shall fix a day and time when the board or the board of 179.1 equalization shall meet in the assessment districts of the 179.2 county. Notwithstanding any law or city charter to the 179.3 contrary, a city board of equalization shall be referred to as a 179.4 board of appeal and equalization. On or before February 15 of 179.5 each year the assessor shall give written notice of the time to 179.6 the city or town clerk. Notwithstanding the provisions of any 179.7 charter to the contrary, the meetings must be held between April 179.8 1 and May 31 each year. The clerk shall give published and 179.9 posted notice of the meeting at least ten days before the date 179.10 of the meeting. 179.11If in any county, at least 25 percent of the total net tax179.12capacity of a city or town is noncommercial seasonal residential179.13recreational property classified under section 273.13,179.14subdivision 25, the county must hold two countywide179.15informational meetings on Saturdays. The meetings will allow179.16noncommercial seasonal residential recreational taxpayers to179.17discuss their property valuation with the appropriate assessment179.18staff. These Saturday informational meetings must be scheduled179.19to allow the owner of the noncommercial seasonal residential179.20recreational property the opportunity to attend one of the179.21meetings prior to the scheduled board of review for their city179.22or town. The Saturday meeting dates must be contained on the179.23notice of valuation of real property under section 273.121.179.24 The board shall meet at the office of the clerk to review 179.25 the assessment and classification of property in the town or 179.26 city. No changes in valuation or classification which are 179.27 intended to correct errors in judgment by the county assessor 179.28 may be made by the county assessor after the boardof reviewhas 179.29 adjourned in those cities or towns that hold a local board of 179.30 review; however, corrections of errors that are merely clerical 179.31 in nature or changes that extend homestead treatment to property 179.32 are permitted after adjournment until the tax extension date for 179.33 that assessment year. The changes must be fully documented and 179.34 maintained in the assessor's office and must be available for 179.35 review by any person. A copy of the changes made during this 179.36 period in those cities or towns that hold a local board of 180.1 review must be sent to the county board no later than December 180.2 31 of the assessment year. 180.3 (b) The board shall determine whether the taxable property 180.4 in the town or city has been properly placed on the list and 180.5 properly valued by the assessor. If real or personal property 180.6 has been omitted, the board shall place it on the list with its 180.7 market value, and correct the assessment so that each tract or 180.8 lot of real property, and each article, parcel, or class of 180.9 personal property, is entered on the assessment list at its 180.10 market value. No assessment of the property of any person may 180.11 be raised unless the person has been duly notified of the intent 180.12 of the board to do so. On application of any person feeling 180.13 aggrieved, the board shall review the assessment or 180.14 classification, or both, and correct it as appears just. The 180.15 board may not make an individual market value adjustment or 180.16 classification change that would benefit the property in cases 180.17 where the owner or other person having control over the property 180.18 will not permit the assessor to inspect the property and the 180.19 interior of any buildings or structures. 180.20 (c) A local boardof reviewmay reduce assessments upon 180.21 petition of the taxpayer but the total reductions must not 180.22 reduce the aggregate assessment made by the county assessor by 180.23 more than one percent. If the total reductions would lower the 180.24 aggregate assessments made by the county assessor by more than 180.25 one percent, none of the adjustments may be made. The assessor 180.26 shall correct any clerical errors or double assessments 180.27 discovered by the boardof reviewwithout regard to the one 180.28 percent limitation. 180.29 (d) A majority of the members may act at the meeting, and 180.30 adjourn from day to day until they finish hearing the cases 180.31 presented. The assessor shall attend, with the assessment books 180.32 and papers, and take part in the proceedings, but must not 180.33 vote. The county assessor, or an assistant delegated by the 180.34 county assessor shall attend the meetings. The board shall list 180.35 separately, on a form appended to the assessment book, all 180.36 omitted property added to the list by the board and all items of 181.1 property increased or decreased, with the market value of each 181.2 item of property, added or changed by the board, placed opposite 181.3 the item. The county assessor shall enter all changes made by 181.4 the board in the assessment book. 181.5 (e) Except as provided in subdivision 3, if a person fails 181.6 to appear in person, by counsel, or by written communication 181.7 before the board after being duly notified of the board's intent 181.8 to raise the assessment of the property, or if a person feeling 181.9 aggrieved by an assessment or classification fails to apply for 181.10 a review of the assessment or classification, the person may not 181.11 appear before the county board of appeal and equalization for a 181.12 review of the assessment or classification. This paragraph does 181.13 not apply if an assessment was made after the local board 181.14 meeting, as provided in section 273.01, or if the person can 181.15 establish not having received notice of market value at least 181.16 five days before the local boardof reviewmeeting. 181.17 (f) The local boardof review or the board of equalization181.18 must complete its work and adjourn within 20 days from the time 181.19 of convening stated in the notice of the clerk, unless a longer 181.20 period is approved by the commissioner of revenue. No action 181.21 taken after that date is valid. All complaints about an 181.22 assessment or classification made after the meeting of the board 181.23 must be heard and determined by the county board of 181.24 equalization. A nonresident may, at any time, before the 181.25 meeting of the boardof reviewfile written objections to an 181.26 assessment or classification with the county assessor. The 181.27 objections must be presented to the boardof reviewat its 181.28 meeting by the county assessor for its consideration. 181.29 [EFFECTIVE DATE.] This section is effective January 1, 181.30 2002, and thereafter. 181.31 Sec. 21. Minnesota Statutes 2000, section 274.13, 181.32 subdivision 1, is amended to read: 181.33 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 181.34 ASSESSMENTS.] The county commissioners, or a majority of them, 181.35 with the county auditor, or, if the auditor cannot be present, 181.36 the deputy county auditor, or, if there is no deputy, the court 182.1 administrator of the district court, shall form a board for the 182.2 equalization of the assessment of the property of the county, 182.3 including the property of all cities whose charters provide for 182.4 a board of equalization. This board shall be referred to as the 182.5 county board of appeal and equalization. The board shall meet 182.6 annually, on the date specified in section 274.14, at the office 182.7 of the auditor. Each member shall take an oath to fairly and 182.8 impartially perform duties as a member. The board shall examine 182.9 and compare the returns of the assessment of property of the 182.10 towns or districts, and equalize them so that each tract or lot 182.11 of real property and each article or class of personal property 182.12 is entered on the assessment list at its market value, subject 182.13 to the following rules: 182.14 (1) The board shall raise the valuation of each tract or 182.15 lot of real property which in its opinion is returned below its 182.16 market value to the sum believed to be its market value. The 182.17 board must first give notice of intention to raise the valuation 182.18 to the person in whose name it is assessed, if the person is a 182.19 resident of the county. The notice must fix a time and place 182.20 for a hearing. 182.21 (2) The board shall reduce the valuation of each tract or 182.22 lot which in its opinion is returned above its market value to 182.23 the sum believed to be its market value. 182.24 (3) The board shall raise the valuation of each class of 182.25 personal property which in its opinion is returned below its 182.26 market value to the sum believed to be its market value. It 182.27 shall raise the aggregate value of the personal property of 182.28 individuals, firms, or corporations, when it believes that the 182.29 aggregate valuation, as returned, is less than the market value 182.30 of the taxable personal property possessed by the individuals, 182.31 firms, or corporations, to the sum it believes to be the market 182.32 value. The board must first give notice to the persons of 182.33 intention to do so. The notice must set a time and place for a 182.34 hearing. 182.35 (4) The board shall reduce the valuation of each class of 182.36 personal property that is returned above its market value to the 183.1 sum it believes to be its market value. Upon complaint of a 183.2 party aggrieved, the board shall reduce the aggregate valuation 183.3 of the individual's personal property, or of any class of 183.4 personal property for which the individual is assessed, which in 183.5 its opinion has been assessed at too large a sum, to the sum it 183.6 believes was the market value of the individual's personal 183.7 property of that class. 183.8 (5) The board must not reduce the aggregate value of all 183.9 the property of its county, as submitted to the county board of 183.10 equalization, with the additions made by the auditor under this 183.11 chapter, by more than one percent of its whole valuation. The 183.12 board may raise the aggregate valuation of real property, and of 183.13 each class of personal property, of the county, or of any town 183.14 or district of the county, when it believes it is below the 183.15 market value of the property, or class of property, to the 183.16 aggregate amount it believes to be its market value. 183.17 (6) The board shall change the classification of any 183.18 property which in its opinion is not properly classified. 183.19 [EFFECTIVE DATE.] This section is effective January 1, 183.20 2002, and thereafter. 183.21 Sec. 22. Minnesota Statutes 2000, section 282.04, 183.22 subdivision 2, is amended to read: 183.23 Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 183.24 DEMOLITION.] Before the sale of a parcel of forfeited land the 183.25 county auditor may, with the approval of the county board of 183.26 commissioners, provide for the repair and improvement of any 183.27 building or structure located upon the parcel, and may provide 183.28 for maintenance of tax-forfeited lands, if it is determined by 183.29 the county board that such repairs, improvements, or maintenance 183.30 are necessary for the operation, use, preservation and safety of 183.31 the building or structure. If so authorized by the county 183.32 board, the county auditor may insure the building or structure 183.33 against loss or damage resulting from fire or windstorm, may 183.34 purchase workers' compensation insurance to insure the county 183.35 against claims for injury to the persons employed in the 183.36 building or structure by the county, and may insure the county, 184.1 its officers and employees against claims for injuries to 184.2 persons or property because of the management, use or operation 184.3 of the building or structure. The county auditor may, with the 184.4 approval of the county board, provide for the demolition of the 184.5 building or structure, which has been determined by the county 184.6 board to be within the purview of section 299F.10, and for the 184.7 sale of salvaged materials from the building or structure. The 184.8 county auditor, with the approval of the county board, may 184.9 provide for the sale of abandoned personal propertyunder either184.10chapter 345 or 566, as appropriate. The sale may be made by the 184.11 sheriff using the procedures for the sale of abandoned property 184.12 in section 345.15 or by the county auditor using the procedures 184.13 for the sale of abandoned property in section 504B.271. The net 184.14 proceeds from any sale of the personal property, salvaged 184.15 materials, timber or other products, or leases made under this 184.16 law must be deposited in the forfeited tax sale fund and must be 184.17 distributed in the same manner as if the parcel had been sold. 184.18 The county auditor, with the approval of the county board, 184.19 may provide for the demolition of any structure on tax-forfeited 184.20 lands, if in the opinion of the county board, the county 184.21 auditor, and the land commissioner, if there is one, the sale of 184.22 the land with the structure on it, or the continued existence of 184.23 the structure by reason of age, dilapidated condition or 184.24 excessive size as compared with nearby structures, will result 184.25 in a material lessening of net tax capacities of real estate in 184.26 the vicinity of the tax-forfeited lands, or if the demolition of 184.27 the structure or structures will aid in disposing of the 184.28 tax-forfeited property. 184.29 Before the sale of a parcel of forfeited land located in an 184.30 urban area, the county auditor may with the approval of the 184.31 county board provide for the grading of the land by filling or 184.32 the removal of any surplus material from it. If the physical 184.33 condition of forfeited lands is such that a reasonable grading 184.34 of the lands is necessary for the protection and preservation of 184.35 the property of any adjoining owner, the adjoining property 184.36 owner or owners may apply to the county board to have the 185.1 grading done. If, after considering the application, the county 185.2 board believes that the grading will enhance the value of the 185.3 forfeited lands commensurate with the cost involved, it may 185.4 approve it, and the work must be performed under the supervision 185.5 of the county or city engineer, as the case may be, and the 185.6 expense paid from the forfeited tax sale fund. 185.7 Sec. 23. Minnesota Statutes 2000, section 287.08, is 185.8 amended to read: 185.9 287.08 [TAX, HOW PAYABLE; RECEIPTS.] 185.10 (a) The tax imposed by sections 287.01 to 287.12 must be 185.11 paid to the treasurer of any county in this state in which the 185.12 real property or some part is located at or before the time of 185.13 filing the mortgage for record. The treasurer shall endorse 185.14 receipt on the mortgage and the receipt is conclusive proof that 185.15 the tax has been paid in the amount stated and authorizes any 185.16 county recorder or registrar of titles to record the mortgage. 185.17 Its form, in substance, shall be "registration tax hereon of 185.18 ..................... dollars paid." If the mortgage is exempt 185.19 from taxation the endorsement shall, in substance, be "exempt 185.20 from registration tax." In either case the receipt must be 185.21 signed by the treasurer. In case the treasurer is unable to 185.22 determine whether a claim of exemption should be allowed, the 185.23 tax must be paid as in the case of a taxable mortgage. 185.24 (b)Upon written application of the taxpayer,The county 185.25 treasurer may refund in whole or in part any mortgage registry 185.26 taxthat has been erroneously paid, or a person having paid a185.27mortgage registry tax amount may seek a refund of the tax, or185.28other appropriate relief,overpayment if a written application 185.29 by the taxpayer is submitted to the county treasurer within 185.30 three and one-half years from the date of the overpayment. If 185.31 the county has not issued a denial of the application, the 185.32 taxpayer may bring an action in tax court in the county in which 185.33 the tax was paid at any time after the expiration of six months 185.34 from the time that the application was submitted. A denial of 185.35 refund may be appealed within 60 days from the date of the 185.36 denial by bringing an action in tax court in the county in which 186.1 the tax was paid, within 60 days of the payment. The action is 186.2 commenced by the serving of a petition for relief on the county 186.3 treasurer, and by filing a copy with the court. The county 186.4 attorney shall defend the action. The county treasurer shall 186.5 notify the treasurer of each county that has or would receive a 186.6 portion of the tax as paid. 186.7 (c) If the county treasurer determines a refund should be 186.8 paid, or if a refund is ordered by the court, the county 186.9 treasurer of each county that actually received a portion of the 186.10 tax shall immediately pay a proportionate share of three percent 186.11 of the refund using any available county funds. The county 186.12 treasurer of each county that received, or would have received, 186.13 a portion of the tax shall also pay their county's proportionate 186.14 share of the remaining 97 percent of the court-ordered refund on 186.15 or before the 20th day of the following month using solely the 186.16 mortgage registry tax funds that would be paid to the 186.17 commissioner of revenue on that date under section 287.12. If 186.18 the funds on hand under this procedure are insufficient to fully 186.19 fund 97 percent of the court-ordered refund, the county 186.20 treasurer of the county in which the action was brought shall 186.21 file a claim with the commissioner of revenue under section 186.22 16A.48 for the remaining portion of 97 percent of the refund, 186.23 and shall pay over the remaining portion upon receipt of a 186.24 warrant from the state issued pursuant to the claim. 186.25 (d) When any mortgage covers real property located in more 186.26 than one county in this state the total tax must be paid to the 186.27 treasurer of the county where the mortgage is first presented 186.28 for recording, and the payment must be receipted as provided in 186.29 paragraph (a). If the principal debt or obligation secured by 186.30 such a multiple county mortgage exceeds $1,000,000, the nonstate 186.31 portion of the tax must be divided and paid over by the county 186.32 treasurer receiving it, on or before the 20th day of each month 186.33 after receipt, to the county or counties entitled in the ratio 186.34 that the market value of the real property covered by the 186.35 mortgage in each county bears to the market value of all the 186.36 real property in this state described in the mortgage. In 187.1 making the division and payment the county treasurer shall send 187.2 a statement giving the description of the real property 187.3 described in the mortgage and the market value of the part 187.4 located in each county. For this purpose, the treasurer of any 187.5 county may require the treasurer of any other county to certify 187.6 to the former the market valuation of any tract of real property 187.7 in any mortgage. 187.8 [EFFECTIVE DATE.] This section is effective for 187.9 overpayments made on or after July 1, 2001. 187.10 Sec. 24. Minnesota Statutes 2000, section 287.20, 187.11 subdivision 2, is amended to read: 187.12 Subd. 2. [CONSIDERATION.] (a) "Consideration" means 187.13 generally the total monetary value that is given in return for a 187.14 conveyance of real property in this state and includes all 187.15 lump-sum payments, all prior or future installment payments that 187.16 are required under the agreement between the parties, and the 187.17 fair market value of any property taken, or to be taken, in 187.18 exchange. 187.19 (b) Consideration does not include the reasonable and 187.20 lawful amounts of interest paid for the privilege of paying the 187.21 purchase price in installments and the fair market value of any 187.22 items of intangible personal property that are conveyed by the 187.23 taxable instrument. 187.24 (c) Consideration does not include the amount paid for the 187.25 personal property located on the real property being conveyed 187.26 and transferred as a part of the total consideration, except 187.27 that the amount paid for the personal property located on the 187.28 real property being conveyed must be included if the real 187.29 property being conveyed is a one-, two-, or three-unit 187.30 residential structure. 187.31 (d) When a conveyance of real property is made pursuant to 187.32 a contract for deed, the consideration is the price for the real 187.33 property reflected in the contract; except that, subject to the 187.34 limitations under section 287.221,when the conveyance is made187.35by a person engaged in the business of land sales or187.36construction of buildings and other improvements, or by an188.1affiliated personif the contract for deed, or other agreement 188.2 entered into as a condition to the seller executing the 188.3 contract, requires the property to be improved during the term 188.4 of the contract and the price of the real property as reflected 188.5 in the contract does not include the consideration for the 188.6 required improvements, then the consideration is theamount paid188.7for the landprice for the real property as reflected in the 188.8 contract and the consideration for the required improvements 188.9 added during the term of the contract.By January 1, 2001, the188.10commissioner shall adopt rules that define the phrases "engaged188.11in the business of land sales or construction of buildings and188.12other improvements" and "affiliated person" as those phrases are188.13used in this paragraph.188.14 (e) "Total consideration" has the same meaning as 188.15 consideration. 188.16 (f) "Consideration, exclusive of the value of any lien or 188.17 encumbrance remaining at the time of sale" or "net 188.18 consideration" means the amount of consideration as reduced by 188.19 the amount outstanding under any lien that attached to the real 188.20 property prior to the time of sale and that is not released or 188.21 satisfied as a result of the sale. 188.22 [EFFECTIVE DATE.] This section is effective for deeds 188.23 acknowledged and recorded after June 30, 2001. 188.24 Sec. 25. Minnesota Statutes 2000, section 287.20, 188.25 subdivision 9, is amended to read: 188.26 Subd. 9. [REORGANIZATION.] "Reorganization" means the 188.27 transfer of substantially all of the assets of a corporation, a 188.28 limited liability company, or a partnership not in the usual or 188.29 regular course of business if at the time of the transfer the 188.30 transfer qualifies as: (i) a corporate reorganization under 188.31 section 368(a) of the Internal Revenue Code of 1986, as amended 188.32 through December 31, 2000; or (ii) a transfer pursuant to the 188.33 continuation of an existing partnership under section 708 of the 188.34 Internal Revenue Code of 1986, as amended through December 31, 188.35 2000. 188.36 [EFFECTIVE DATE.] This section is effective for taxable 189.1 deeds acknowledged and recorded after June 30, 2001. 189.2 Sec. 26. Minnesota Statutes 2000, section 287.21, 189.3 subdivision 1, is amended to read: 189.4 Subdivision 1. [DETERMINATION OF TAX.] (a) A tax is 189.5 imposed on each deed or instrument by which any real property in 189.6 this state is granted, assigned, transferred, or otherwise 189.7 conveyed. The tax applies against the net consideration. 189.8 (b) The tax is determined in the following manner: (1) 189.9 when transfers are made by instruments pursuant to mergers, 189.10 consolidations, sales, or transfers of substantially all of the 189.11 assets of the entities as defined in section 287.20, subdivision 189.12 9, pursuant to plans of reorganization, the tax is $1.65; (2) 189.13 when there is no consideration or when the consideration, 189.14 exclusive of the value of any lien or encumbrance remaining 189.15 thereon at the time of sale, is $500 or less, the tax is $1.65; 189.16 or (3) when the consideration, exclusive of the value of any 189.17 lien or encumbrance remaining at the time of sale, exceeds $500, 189.18 the tax is$1.65 plus $1.65 for each additional $500 or fraction189.19of that amount.0033 of the net consideration. 189.20 (c) The tax is due at the time a taxable deed or instrument 189.21 is presented for recording. 189.22 [EFFECTIVE DATE.] This section is effective for documents 189.23 acknowledged and recorded after June 30, 2001. 189.24 Sec. 27. Minnesota Statutes 2000, section 287.28, is 189.25 amended to read: 189.26 287.28 [REFUNDS OR REDEMPTION.] 189.27 (a) The county treasurer mayrefund in whole or in part any189.28tax which has been erroneously paid and may allow for orredeem 189.29such of thestamps,issued under the authority of sections 189.30 287.20 to 287.31as maythat have been spoiled, destroyed, or 189.31 rendered useless or unfit for the purpose intended or for which 189.32 the owner may have no use or which through mistake may have been 189.33 improperly or unnecessarily used.Such orderRedemption shall 189.34 be made only upon written application of the taxpayer. 189.35 (b)A person having paid a deed tax amount may seek a189.36refund of the tax, or other appropriate relief,The county 190.1 treasurer may refund any deed tax overpayment if a written 190.2 application by the taxpayer is submitted to the county treasurer 190.3 within three and one-half years from the date of the 190.4 overpayment. If the county has not issued a denial of the 190.5 application, the taxpayer may bring an action in tax court in 190.6 the county in which the tax was paid at any time after the 190.7 expiration of six months from the time that the application was 190.8 submitted. A denial of refund may be appealed within 60 days 190.9 from the date of the denial by commencing an action in tax court 190.10 in the county where the tax was paid, within 60 days of the190.11payment. The action is commenced by serving a petition for 190.12 relief on the county treasurer, and filing a copy with the 190.13 court. The county attorney shall defend the action. The county 190.14 treasurer shall notify the treasurer of each county that has, or 190.15 would receive a portion of the tax as paid. Any refund of deed 190.16 tax which the county treasurer determines should be made, and 190.17 any court ordered refund of deed tax, shall be accomplished 190.18 using the refund procedures in section 287.08. 190.19 [EFFECTIVE DATE.] This section is effective for 190.20 overpayments occurring after June 30, 2001. 190.21 Sec. 28. Minnesota Statutes 2000, section 289A.12, 190.22 subdivision 3, is amended to read: 190.23 Subd. 3. [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 190.24 AND S CORPORATIONS.] (a) Partnerships must file a return with 190.25 the commissioner for each taxable year. The return must conform 190.26 to the requirements of section290.31290.311, and must include 190.27 the names and addresses of the partners entitled to a 190.28 distributive share in their taxable net income, gain, loss, or 190.29 credit, and the amount of the distributive share to which each 190.30 is entitled. A partnership required to file a return for a 190.31 partnership taxable year must furnish a copy of the information 190.32 required to be shown on the return to a person who is a partner 190.33 at any time during the taxable year, on or before the day on 190.34 which the return for the taxable year was filed. 190.35 (b) The fiduciary of an estate or trust making the return 190.36 required to be filed under section 289A.08, subdivision 2, for a 191.1 taxable year must give a beneficiary who receives a distribution 191.2 from the estate or trust with respect to the taxable year or to 191.3 whom any item with respect to the taxable year is allocated, a 191.4 statement containing the information required to be shown on the 191.5 return, on or before the date on which the return was filed. 191.6 (c) An S corporation must file a return with the 191.7 commissioner for a taxable year during which an election under 191.8 section 290.9725 is in effect, stating specifically the names 191.9 and addresses of the persons owning stock in the corporation at 191.10 any time during the taxable year, the number of shares of stock 191.11 owned by a shareholder at all times during the taxable year, the 191.12 shareholder's pro rata share of each item of the corporation for 191.13 the taxable year, and other information the commissioner 191.14 requires. An S corporation required to file a return under this 191.15 paragraph for any taxable year must furnish a copy of the 191.16 information shown on the return to the person who is a 191.17 shareholder at any time during the taxable year, on or before 191.18 the day on which the return for the taxable year was filed. 191.19 (d) The partnership or S corporation return must be signed 191.20 by someone designated by the partnership or S corporation. 191.21 [EFFECTIVE DATE.] This section is effective for tax years 191.22 beginning after December 31, 2000. 191.23 Sec. 29. Minnesota Statutes 2000, section 289A.50, 191.24 subdivision 2a, is amended to read: 191.25 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 191.26 has collected from a purchaser a tax on a transaction that is 191.27 not subject to the tax imposed by chapter 297A, the purchaser 191.28 may apply directly to the commissioner for a refund under this 191.29 section if: 191.30 (a) the purchaser is currently registered to collect and 191.31 remit the salesandtax or to remit the use tax; and 191.32 (b) the amount of the refund applied for exceeds $500. 191.33 The purchaser may not file more than two applications for 191.34 refund under this subdivision in a calendar year. 191.35 [EFFECTIVE DATE.] This section is effective the day 191.36 following final enactment. 192.1 Sec. 30. Minnesota Statutes 2000, section 290.06, 192.2 subdivision 2c, is amended to read: 192.3 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 192.4 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 192.5 married individuals filing joint returns and surviving spouses 192.6 as defined in section 2(a) of the Internal Revenue Code must be 192.7 computed by applying to their taxable net income the following 192.8 schedule of rates: 192.9 (1) On the first $25,680, 5.35 percent; 192.10 (2) On all over $25,680, but not over $102,030, 7.05 192.11 percent; 192.12 (3) On all over $102,030, 7.85 percent. 192.13 Married individuals filing separate returns, estates, and 192.14 trusts must compute their income tax by applying the above rates 192.15 to their taxable income, except that the income brackets will be 192.16 one-half of the above amounts. 192.17 (b) The income taxes imposed by this chapter upon unmarried 192.18 individuals must be computed by applying to taxable net income 192.19 the following schedule of rates: 192.20 (1) On the first $17,570, 5.35 percent; 192.21 (2) On all over $17,570, but not over $57,710, 7.05 192.22 percent; 192.23 (3) On all over $57,710, 7.85 percent. 192.24 (c) The income taxes imposed by this chapter upon unmarried 192.25 individuals qualifying as a head of household as defined in 192.26 section 2(b) of the Internal Revenue Code must be computed by 192.27 applying to taxable net income the following schedule of rates: 192.28 (1) On the first $21,630, 5.35 percent; 192.29 (2) On all over $21,630, but not over $86,910, 7.05 192.30 percent; 192.31 (3) On all over $86,910, 7.85 percent. 192.32 (d) In lieu of a tax computed according to the rates set 192.33 forth in this subdivision, the tax of any individual taxpayer 192.34 whose taxable net income for the taxable year is less than an 192.35 amount determined by the commissioner must be computed in 192.36 accordance with tables prepared and issued by the commissioner 193.1 of revenue based on income brackets of not more than $100. The 193.2 amount of tax for each bracket shall be computed at the rates 193.3 set forth in this subdivision, provided that the commissioner 193.4 may disregard a fractional part of a dollar unless it amounts to 193.5 50 cents or more, in which case it may be increased to $1. 193.6 (e) An individual who is not a Minnesota resident for the 193.7 entire year must compute the individual's Minnesota income tax 193.8 as provided in this subdivision. After the application of the 193.9 nonrefundable credits provided in this chapter, the tax 193.10 liability must then be multiplied by a fraction in which: 193.11 (1) the numerator is the individual's Minnesota source 193.12 federal adjusted gross income as defined in section 62 of the 193.13 Internal Revenue Code and increased by the additions required 193.14 under section 290.01, subdivision 19a, clauses (1) and (6), and 193.15 reduced by the Minnesota assignable portion of the subtraction 193.16 for United States government interest under section 290.01, 193.17 subdivision 19b, clause (1), after applying the allocation and 193.18 assignability provisions of section 290.081, clause (a), or 193.19 290.17; and 193.20 (2) the denominator is the individual's federal adjusted 193.21 gross income as defined in section 62 of the Internal Revenue 193.22 Code of 1986, increased by the amounts specified in section 193.23 290.01, subdivision 19a, clauses (1) and (6), and reduced by the 193.24 amounts specified in section 290.01, subdivision 19b, clause (1). 193.25 [EFFECTIVE DATE.] This section is effective for taxable 193.26 years beginning after December 31, 2000. 193.27 Sec. 31. Minnesota Statutes 2000, section 290.06, 193.28 subdivision 23, is amended to read: 193.29 Subd. 23. [REFUND OF CONTRIBUTIONS TO POLITICAL PARTIES 193.30 AND CANDIDATES.] (a) A taxpayer may claim a refund equal to the 193.31 amount of the taxpayer's contributions made in the calendar year 193.32 to candidates and to a political party. The maximum refund for 193.33 an individual must not exceed $50 and for a married couple, 193.34 filing jointly, must not exceed $100. A refund of a 193.35 contribution is allowed only if the taxpayer files a form 193.36 required by the commissioner and attaches to the form a copy of 194.1 an official refund receipt form issued by the candidate or party 194.2 and signed by the candidate, the treasurer of the candidate's 194.3 principal campaign committee, or the chair or treasurer of the 194.4 party unit, after the contribution was received. The receipt 194.5 forms must be numbered, and the data on the receipt that are not 194.6 public must be made available to the campaign finance and public 194.7 disclosure board upon its request. A claim must be filed with 194.8 the commissioner no sooner than January 1 of the calendar year 194.9 in which the contribution was made and no later than April 15 of 194.10 the calendar year following the calendar year in which the 194.11 contribution was made. A taxpayer may file only one claim per 194.12 calendar year. Amounts paid by the commissioner after June 15 194.13 of the calendar year following the calendar year in which the 194.14 contribution was made must include interest at the rate 194.15 specified in section 270.76. 194.16 (b) No refund is allowed under this subdivision for a 194.17 contribution to a candidate unless the candidate: 194.18 (1) has signed an agreement to limit campaign expenditures 194.19 as provided in section 10A.322; 194.20 (2) is seeking an office for which voluntary spending 194.21 limits are specified in section 10A.25; and 194.22 (3) has designated a principal campaign committee. 194.23 This subdivision does not limit the campaign expenditures 194.24 of a candidate who does not sign an agreement but accepts a 194.25 contribution for which the contributor improperly claims a 194.26 refund. 194.27 (c) For purposes of this subdivision, "political party" 194.28 means a major political party as defined in section 200.02, 194.29 subdivision 7, or a minor political party qualifying for 194.30 inclusion on the income tax or property tax refund form under 194.31 section 10A.31, subdivision 3a. 194.32 A "major party" or "minor party" includes the aggregate of 194.33 that party's organization within each house of the legislature, 194.34 the state party organization, and the party organization within 194.35 congressional districts, counties, legislative districts, 194.36 municipalities, and precincts. 195.1 "Candidate" means a candidate as defined in section 10A.01, 195.2 subdivision 10, except a candidate for judicial office. 195.3 "Contribution" means a gift of money. 195.4 (d) The commissioner shall make copies of the form 195.5 available to the public and candidates upon request. 195.6 (e) The following data collected or maintained by the 195.7 commissioner under this subdivision are private: the identities 195.8 of individuals claiming a refund, the identities of candidates 195.9 to whom those individuals have made contributions, and the 195.10 amount of each contribution. 195.11 (f) The commissioner shall report to the campaign finance 195.12 and public disclosure board by each August 1 a summary showing 195.13 the total number and aggregate amount of political contribution 195.14 refunds made on behalf of each candidate and each political 195.15 party. These data are public. 195.16 (g) The amount necessary to pay claims for the refund 195.17 provided in this section is appropriated from the general fund 195.18 to the commissioner of revenue. 195.19 (h) For a taxpayer who files a claim for refund via the 195.20 Internet or other electronic means, the commissioner may accept 195.21 the number on the official receipt as documentation that a 195.22 contribution was made rather than the actual receipt as required 195.23 by paragraph (a). 195.24 [EFFECTIVE DATE.] This section is effective for refund 195.25 claims based on contributions made after December 31, 2001. 195.26 Sec. 32. Minnesota Statutes 2000, section 290.067, 195.27 subdivision 2, is amended to read: 195.28 Subd. 2. [LIMITATIONS.] The credit for expenses incurred 195.29 for the care of each dependent shall not exceed $720 in any 195.30 taxable year, and the total credit for all dependents of a 195.31 claimant shall not exceed $1,440 in a taxable year. The maximum 195.32 total credit shall be reduced according to the amount of the 195.33 income of the claimant and a spouse, if any, as follows: 195.34 income up to$13,350$18,040, $720 maximum for one 195.35 dependent, $1,440 for all dependents; 195.36 income over$13,350$18,040, the maximum credit for one 196.1 dependent shall be reduced by $18 for every $350 of additional 196.2 income, $36 for all dependents. 196.3 The commissioner shall construct and make available to 196.4 taxpayers tables showing the amount of the credit at various 196.5 levels of income and expenses. The tables shall follow the 196.6 schedule contained in this subdivision, except that the 196.7 commissioner may graduate the transitions between expenses and 196.8 income brackets. 196.9 [EFFECTIVE DATE.] This section is effective for tax years 196.10 beginning after December 31, 1999. 196.11 Sec. 33. Minnesota Statutes 2000, section 290.067, 196.12 subdivision 2b, is amended to read: 196.13 Subd. 2b. [INFLATION ADJUSTMENT.] The dollar amount of the 196.14 income threshold at which the maximum credit begins to be 196.15 reduced under subdivision 2 must be adjusted for inflation. The 196.16 commissioner shalladjust the threshold amount by the percentage196.17determined under section 290.06, subdivision 2d, for the taxable196.18year.make the inflation adjustments in accordance with section 196.19 1f of the Internal Revenue Code except that for the purposes of 196.20 this subdivision the percentage increase must be determined from 196.21 the year starting September 1, 1999, and ending August 31, 2000, 196.22 as the base year for adjusting for inflation for the tax year 196.23 beginning after December 31, 2000. The determination of the 196.24 commissioner under this subdivision is not a rule under the 196.25 Administrative Procedures Act. 196.26 [EFFECTIVE DATE.] This section is effective for tax years 196.27 beginning after December 31, 2000. 196.28 Sec. 34. Minnesota Statutes 2000, section 290.0671, 196.29 subdivision 1, is amended to read: 196.30 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 196.31 allowed a credit against the tax imposed by this chapter equal 196.32 to a percentage of earned income. To receive a credit, a 196.33 taxpayer must be eligible for a credit under section 32 of the 196.34 Internal Revenue Code. 196.35 (b) For individuals with no qualifying children, the credit 196.36 equals 1.9125 percent of the first$4,460$4,620 of earned 197.1 income. The credit is reduced by 1.9125 percent of earned 197.2 income or modified adjusted gross income, whichever is greater, 197.3 in excess of$5,570$5,770, but in no case is the credit less 197.4 than zero. 197.5 (c) For individuals with one qualifying child, the credit 197.6 equals 8.5 percent of the first$6,680$6,920 of earned income 197.7 and 8.5 percent of earned income over$11,650$12,080 but less 197.8 than$12,990$13,450. The credit is reduced by 5.73 percent of 197.9 earned income or modified adjusted gross income, whichever is 197.10 greater, in excess of$14,560$15,080, but in no case is the 197.11 credit less than zero. 197.12 (d) For individuals with two or more qualifying children, 197.13 the credit equals ten percent of the first$9,390$9,720 of 197.14 earned income and 20 percent of earned income 197.15 over$14,350$14,860 but less than$16,230$16,800. The credit 197.16 is reduced by 10.3 percent of earned income or modified adjusted 197.17 gross income, whichever is greater, in excess 197.18 of$17,280$17,890, but in no case is the credit less than zero. 197.19 (e) For a nonresident or part-year resident, the credit 197.20 must be allocated based on the percentage calculated under 197.21 section 290.06, subdivision 2c, paragraph (e). 197.22 (f) For a person who was a resident for the entire tax year 197.23 and has earned income not subject to tax under this chapter, the 197.24 credit must be allocated based on the ratio of federal adjusted 197.25 gross income reduced by the earned income not subject to tax 197.26 under this chapter over federal adjusted gross income. 197.27 (g) The commissioner shall construct tables showing the 197.28 amount of the credit at various income levels and make them 197.29 available to taxpayers. The tables shall follow the schedule 197.30 contained in this subdivision, except that the commissioner may 197.31 graduate the transition between income brackets. 197.32 [EFFECTIVE DATE.] This section is effective for taxable 197.33 years beginning after December 31, 1999. 197.34 Sec. 35. Minnesota Statutes 2000, section 290.0671, 197.35 subdivision 7, is amended to read: 197.36 Subd. 7. [INFLATION ADJUSTMENT.] The earned income amounts 198.1 used to calculate the credit and the income thresholds at which 198.2 the maximum credit begins to be reduced in subdivision 1 must be 198.3 adjusted for inflation. The commissioner shalladjust the198.4earned income and threshold amounts by the percentage determined198.5under section 290.06, subdivision 2d, for the taxable year.make 198.6 the inflation adjustments in accordance with section 1f of the 198.7 Internal Revenue Code except that for the purposes of this 198.8 subdivision the percentage increase shall be determined from the 198.9 year starting September 1, 1999, and ending August 31, 2000, as 198.10 the base year for adjusting for inflation for the tax year 198.11 beginning after December 31, 2000. The determination of the 198.12 commissioner under this subdivision is not a rule under the 198.13 Administrative Procedures Act. 198.14 [EFFECTIVE DATE.] This section is effective for tax years 198.15 beginning after December 31, 2000. 198.16 Sec. 36. Minnesota Statutes 2000, section 290.0675, 198.17 subdivision 1, is amended to read: 198.18 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 198.19 section the following terms have the meanings given. 198.20 (b) "Earned income" means the sum of the following, to the 198.21 extent included in Minnesota taxable income: 198.22 (1) earned income as defined in section 32(c)(2) of the 198.23 Internal Revenue Code; 198.24 (2)to the extent included in Minnesota taxable income,198.25 income received from a retirement pension, profit-sharing, stock 198.26 bonus, or annuity plan; and 198.27 (3)to the extent included in Minnesota taxable income,198.28 social security benefits as defined in section 86(d)(1) of the 198.29 Internal Revenue Code. 198.30 (c) "Taxable income" means net income as defined in section 198.31 290.01, subdivision 19. 198.32 (d) "Earned income of lesser-earning spouse" means the 198.33 earned income of the spouse with the lesser amount of earned 198.34 income as defined in paragraph (b) for the taxable year. 198.35 [EFFECTIVE DATE.] This section is effective for taxable 198.36 years beginning after December 31, 2000. 199.1 Sec. 37. Minnesota Statutes 2000, section 290.0675, 199.2 subdivision 3, is amended to read: 199.3 Subd. 3. [CREDIT AMOUNT.] The credit amount isas shown in199.4the table in this subdivision, based on the couple's taxable199.5income for the tax year and on the earned income of the199.6lesser-earning spousethe difference between the tax on the 199.7 couple's joint Minnesota taxable income under the rates in 199.8 section 290.06, subdivision 2c, paragraph (a), and the sum of 199.9 the tax under the rates of section 290.06, subdivision 2c, 199.10 paragraph (b), on the earned income of the lesser-earning 199.11 spouse, and the tax under the rates of section 290.06, 199.12 subdivision 2c, paragraph (b), on the couple's joint Minnesota 199.13 taxable income, minus the earned income of the lesser-earning 199.14 spouse. 199.15Credit ForCredit For199.16Earned Income ofTaxable IncomeTaxable Income199.17Lesser Earning Spouse$25,680-$102,029$102,030-over199.18$14,250 - $15,249$7$0199.19$15,250 - $16,249$24$0199.20$16,250 - $17,249$41$0199.21$17,250 - $18,249$58$0199.22$18,250 - $19,249$75$0199.23$19,250 - $20,249$92$0199.24$20,250 - $21,249$109$0199.25$21,250 - $22,249$126$0199.26$22,250 - $23,249$143$0199.27$23,250 - $24,249$160$0199.28$24,250 - $25,249$161$0199.29$25,250 - $26,249$161$0199.30$26,250 - $27,249$161$0199.31$27,250 - $28,249$161$0199.32$28,250 - $29,249$161$0199.33$29,250 - $30,249$161$0199.34$30,250 - $31,249$161$0199.35$31,250 - $32,249$161$6199.36$32,250 - $33,249$161$14200.1$33,250 - $34,249$161$22200.2$34,250 - $35,249$161$30200.3$35,250 - $36,249$161$38200.4$36,250 - $37,249$161$46200.5$37,250 - $38,249$161$54200.6$38,250 - $39,249$161$62200.7$39,250 - $40,249$161$70200.8$40,250 - $41,249$161$78200.9$41,250 - $42,249$161$86200.10$42,250 - $43,249$161$94200.11$43,250 - $44,249$161$102200.12$44,250 - $45,249$161$110200.13$45,250 - $46,249$161$118200.14$46,250 - $47,249$161$126200.15$47,250 - $48,249$161$134200.16$48,250 - $49,249$161$142200.17$49,250 - $50,249$161$150200.18$50,250 - $51,249$161$158200.19$51,250 - $52,249$161$166200.20$52,250 - $53,249$161$174200.21$53,250 - $54,249$161$182200.22$54,250 - $55,249$161$190200.23$55,250 - $56,249$161$198200.24$56,250 - $57,249$161$206200.25$57,250 - $58,249$161$214200.26$58,250 - $59,249$161$222200.27$59,250 - $60,249$161$230200.28$60,250 - $61,249$161$238200.29$61,250 - $62,249$161$246200.30$62,250 - $63,249$161$254200.31$63,250 - $64,249$161$262200.32$64,250 and over$161$268200.33 For taxable years beginning after December 31, 2001, the 200.34 commissioner of revenue shall prepare and make available to 200.35 taxpayers a comprehensive table showing the credit under this 200.36 section at brackets of earnings of the lesser-earning spouse and 201.1 joint taxable income. The brackets of earnings shall not be 201.2 more than $2,000. 201.3 For taxable years beginning after December 31,20002002, 201.4 the commissioner shall update the table as necessary to provide 201.5 a credit that reflects the relationship between the marginal tax 201.6 rates imposed under section 290.06, subdivision 2c. 201.7 [EFFECTIVE DATE.] This section is effective for taxable 201.8 years beginning after December 31, 2000. 201.9 Sec. 38. Minnesota Statutes 2000, section 290.0921, 201.10 subdivision 3, is amended to read: 201.11 Subd. 3. [ALTERNATIVE MINIMUM TAXABLE INCOME.] 201.12 "Alternative minimum taxable income" is Minnesota net income as 201.13 defined in section 290.01, subdivision 19, and includes the 201.14 adjustments and tax preference items in sections 56, 57, 58, and 201.15 59(d), (e), (f), and (h) of the Internal Revenue Code. If a 201.16 corporation files a separate company Minnesota tax return, the 201.17 minimum tax must be computed on a separate company basis. If a 201.18 corporation is part of a tax group filing a unitary return, the 201.19 minimum tax must be computed on a unitary basis. The following 201.20 adjustments must be made. 201.21 (1) For purposes of the depreciation adjustments under 201.22 section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 201.23 the basis for depreciable property placed in service in a 201.24 taxable year beginning before January 1, 1990, is the adjusted 201.25 basis for federal income tax purposes, including any 201.26 modification made in a taxable year under section 290.01, 201.27 subdivision 19e, or Minnesota Statutes 1986, section 290.09, 201.28 subdivision 7, paragraph (c). 201.29 For taxable years beginning after December 31, 2000, the 201.30 amount of any remaining modification made under section 290.01, 201.31 subdivision 19e, or Minnesota Statutes 1986, section 290.09, 201.32 subdivision 7, paragraph (c), not previously deducted is a 201.33 depreciation allowance in the first taxable year after December 201.34 31, 2000. 201.35 (2) The alternative tax net operating loss deduction under 201.36 sections 56(a)(4) and 56(d) of the Internal Revenue Code does 202.1 not apply. 202.2 (3) The special rule for certain dividends under section 202.3 56(g)(4)(C)(ii) of the Internal Revenue Code does not apply. 202.4 (4) The special rule for dividends from section 936 202.5 companies under section 56(g)(4)(C)(iii) does not apply. 202.6 (5) The tax preference for depletion under section 57(a)(1) 202.7 of the Internal Revenue Code does not apply. 202.8 (6) The tax preference for intangible drilling costs under 202.9 section 57(a)(2) of the Internal Revenue Code must be calculated 202.10 without regard to subparagraph (E) and the subtraction under 202.11 section 290.01, subdivision 19d, clause (4). 202.12 (7) The tax preference for tax exempt interest under 202.13 section 57(a)(5) of the Internal Revenue Code does not apply. 202.14 (8) The tax preference for charitable contributions of 202.15 appreciated property under section 57(a)(6) of the Internal 202.16 Revenue Code does not apply. 202.17 (9) For purposes of calculating the tax preference for 202.18 accelerated depreciation or amortization on certain property 202.19 placed in service before January 1, 1987, under section 57(a)(7) 202.20 of the Internal Revenue Code, the deduction allowable for the 202.21 taxable year is the deduction allowed under section 290.01, 202.22 subdivision 19e. 202.23 For taxable years beginning after December 31, 2000, the 202.24 amount of any remaining modification made under section 290.01, 202.25 subdivision 19e, not previously deducted is a depreciation or 202.26 amortization allowance in the first taxable year after December 202.27 31, 2000. 202.28 (10) For purposes of calculating the adjustment for 202.29 adjusted current earnings in section 56(g) of the Internal 202.30 Revenue Code, the term "alternative minimum taxable income" as 202.31 it is used in section 56(g) of the Internal Revenue Code, means 202.32 alternative minimum taxable income as defined in this 202.33 subdivision, determined without regard to the adjustment for 202.34 adjusted current earnings in section 56(g) of the Internal 202.35 Revenue Code. 202.36 (11) For purposes of determining the amount of adjusted 203.1 current earnings under section 56(g)(3) of the Internal Revenue 203.2 Code, no adjustment shall be made under section 56(g)(4) of the 203.3 Internal Revenue Code with respect to (i) the amount of foreign 203.4 dividend gross-up subtracted as provided in section 290.01, 203.5 subdivision 19d, clause (1), (ii) the amount of refunds of 203.6 income, excise, or franchise taxes subtracted as provided in 203.7 section 290.01, subdivision 19d, clause (10), or (iii) the 203.8 amount of royalties, fees or other like income subtracted as 203.9 provided in section 290.01, subdivision 19d, clause (11). 203.10 Items of tax preference must not be reduced below zero as a 203.11 result of the modifications in this subdivision. 203.12 [EFFECTIVE DATE.] This section is effective the day 203.13 following final enactment. 203.14 Sec. 39. Minnesota Statutes 2000, section 290.92, 203.15 subdivision 23, is amended to read: 203.16 Subd. 23. [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 203.17 (1) The commissioner may, within five years after the date of 203.18 assessment of the tax, or if a lien has been filed under section 203.19 270.69, within the statutory period for enforcement of the lien, 203.20 give notice to any employer deriving income which has a taxable 203.21 situs in this state regardless of whether the income is exempt 203.22 from taxation, that an employee of that employer is delinquent 203.23 in a certain amount with respect to any state taxes, including 203.24 penalties, interest, and costs. The commissioner can proceed 203.25 under this subdivision only if the tax is uncontested or if the 203.26 time for appeal of the tax has expired. The commissioner shall 203.27 not proceed under this subdivision until the expiration of 30 203.28 days after mailing to the taxpayer, at the taxpayer's last known 203.29 address, a written notice of (a) the amount of taxes, interest, 203.30 and penalties due from the taxpayer and demand for their 203.31 payment, and (b) the commissioner's intention to require 203.32 additional withholding by the taxpayer's employer pursuant to 203.33 this subdivision. The effect of the notice shall expire180203.34daysone year after it has been mailed to the taxpayer provided 203.35 that the notice may be renewed by mailing a new notice which is 203.36 in accordance with this subdivision. The renewed notice shall 204.1 have the effect of reinstating the priority of the original 204.2 claim. The notice to the taxpayer shall be in substantially the 204.3 same form as that provided in section 571.72. The notice shall 204.4 further inform the taxpayer of the wage exemptions contained in 204.5 section 550.37, subdivision 14. If no statement of exemption is 204.6 received by the commissioner within 30 days from the mailing of 204.7 the notice, the commissioner may proceed under this 204.8 subdivision. The notice to the taxpayer's employer may be 204.9 served by mail or by delivery by an employee of the department 204.10 of revenue and shall be in substantially the same form as 204.11 provided in section 571.75. Upon receipt of notice, the 204.12 employer shall withhold from compensation due or to become due 204.13 to the employee, the total amount shown by the notice, subject 204.14 to the provisions of section 571.922. The employer shall 204.15 continue to withhold each pay period until the notice is 204.16 released by the commissioner under section 270.709. Upon 204.17 receipt of notice by the employer, the claim of the state of 204.18 Minnesota shall have priority over any subsequent garnishments 204.19 or wage assignments. The commissioner may arrange between the 204.20 employer and the employee for withholding a portion of the total 204.21 amount due the employee each pay period, until the total amount 204.22 shown by the notice plus accrued interest has been withheld. 204.23 The "compensation due" any employee is defined in 204.24 accordance with the provisions of section 571.921. The maximum 204.25 withholding allowed under this subdivision for any one pay 204.26 period shall be decreased by any amounts payable pursuant to a 204.27 garnishment action with respect to which the employer was served 204.28 prior to being served with the notice of delinquency and any 204.29 amounts covered by any irrevocable and previously effective 204.30 assignment of wages; the employer shall give notice to the 204.31 department of the amounts and the facts relating to such 204.32 assignments within ten days after the service of the notice of 204.33 delinquency on the form provided by the department of revenue as 204.34 noted in this subdivision. 204.35 (2) If the employee ceases to be employed by the employer 204.36 before the full amount set forth in a notice of delinquency plus 205.1 accrued interest has been withheld, the employer shall 205.2 immediately notify the commissioner in writing of the 205.3 termination date of the employee and the total amount withheld. 205.4 No employer may discharge any employee by reason of the fact 205.5 that the commissioner has proceeded under this subdivision. If 205.6 an employer discharges an employee in violation of this 205.7 provision, the employee shall have the same remedy as provided 205.8 in section 571.927, subdivision 2. 205.9 (3) Within ten days after the expiration of such pay 205.10 period, the employer shall remit to the commissioner, on a form 205.11 and in the manner prescribed by the commissioner, the amount 205.12 withheld during each pay period under this subdivision. 205.13 (4) Clauses (1), (2), and (3), except provisions imposing a 205.14 liability on the employer for failure to withhold or remit, 205.15 shall apply to cases in which the employer is the United States 205.16 or any instrumentality thereof or this state or any municipality 205.17 or other subordinate unit thereof. 205.18 (5) The commissioner shall refund to the employee excess 205.19 amounts withheld from the employee under this subdivision. If 205.20 any excess results from payments by the employer because of 205.21 willful failure to withhold or remit as prescribed in clause 205.22 (3), the excess attributable to the employer's payment shall be 205.23 refunded to the employer. 205.24 (6) Employers required to withhold delinquent taxes, 205.25 penalties, interest, and costs under this subdivision shall not 205.26 be required to compute any additional interest, costs or other 205.27 charges to be withheld. 205.28 (7) The collection remedy provided to the commissioner by 205.29 this subdivision shall have the same legal effect as if it were 205.30 a levy made pursuant to section 270.70. 205.31 [EFFECTIVE DATE.] This section is effective for notices of 205.32 intent mailed on or after the day following final enactment. 205.33 Sec. 40. Minnesota Statutes 2000, section 290A.03, 205.34 subdivision 12, is amended to read: 205.35 Subd. 12. [GROSS RENT.] (a) "Gross rent" means rental paid 205.36 for the right of occupancy, at arms-length, of a homestead, 206.1 exclusive of charges for any medical services furnished by the 206.2 landlord as a part of the rental agreement, whether expressly 206.3 set out in the rental agreement or not. 206.4 (b) The gross rent of a resident of a nursing home or 206.5 intermediate care facility is $350 per month. The gross rent of 206.6 a resident of an adult foster care home is $550 per month. 206.7 Beginning for rent paid in 2002, the commissioner shall annually 206.8 adjust for inflation the gross rent amounts stated in this 206.9 paragraph. The adjustment must be made in accordance with 206.10 section 1f of the Internal Revenue Code, except that for 206.11 purposes of this paragraph the percentage increase shall be 206.12 determined from the year ending on June 30, 2001, to the year 206.13 ending on June 30 of the year in which the rent is paid. The 206.14 commissioner shall round the gross rents to the nearest $10 206.15 amount. If the amount ends in $5, the commissioner shall round 206.16 it up to the next $10 amount. The determination of the 206.17 commissioner under this paragraph is not a rule under the 206.18 Administrative Procedure Act. 206.19 (c) If the landlord and tenant have not dealt with each 206.20 other at arms-length and the commissioner determines that the 206.21 gross rent charged was excessive, the commissioner may adjust 206.22 the gross rent to a reasonable amount for purposes of this 206.23 chapter. 206.24 (d) Any amount paid by a claimant residing in property 206.25 assessed pursuant to section 273.124, subdivision 3, 4, 5, or 6 206.26 for occupancy in that property shall be excluded from gross rent 206.27 for purposes of this chapter. However, property taxes imputed 206.28 to the homestead of the claimant or the dwelling unit occupied 206.29 by the claimant that qualifies for homestead treatment pursuant 206.30 to section 273.124, subdivision 3, 4, 5, or 6 shall be included 206.31 within the term "property taxes payable" as defined in 206.32 subdivision 13, notwithstanding the fact that ownership is not 206.33 in the name of the claimant. 206.34 [EFFECTIVE DATE.] This section is effective for refunds 206.35 based on rent paid after December 31, 2000. 206.36 Sec. 41. Minnesota Statutes 2000, section 290A.15, is 207.1 amended to read: 207.2 290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.] 207.3 The amount of any claim otherwise payable under this 207.4 chapter may be applied by the commissioner against any 207.5 delinquent tax liability ofthe claimant or spouse of the207.6claimant payable to the department of revenueany member of the 207.7 household. If there are two members of the household, the 207.8 commissioner may apply only one-half of a refund to the separate 207.9 liability of either member of the household. 207.10 [EFFECTIVE DATE.] This section is effective beginning with 207.11 refunds paid on or after July 1, 2001. 207.12 Sec. 42. Minnesota Statutes 2000, section 296A.16, 207.13 subdivision 2, is amended to read: 207.14 Subd. 2. [FUEL USED IN OTHER VEHICLE; CLAIM FOR REFUND.] 207.15 Any person whoshall buybuys anduseuses gasoline for a 207.16 qualifying purpose other than use in motor vehicles, snowmobiles 207.17 except as provided in clause (2), or motorboats, or special fuel 207.18 for a qualifying purpose other than use in licensed motor 207.19 vehicles, and whoshall havepaid the tax directly or indirectly 207.20 through the amount of the tax being included in the price of the 207.21 gasoline or special fuel, or otherwise, shall be reimbursed and 207.22 repaid the amount of the tax paid upon filing with the 207.23 commissioner a claim for refund in the form and manner 207.24 prescribed by the commissioner, and containing the information 207.25 the commissioner shall require. By signing any such claim which 207.26 is false or fraudulent, the applicant shall be subject to the 207.27 penalties provided in this chapter for knowingly making a false 207.28 claim. The claim shall set forth the total amount of the 207.29 gasoline so purchased and used by the applicant other than in 207.30 motor vehicles, or special fuel purchased and used by the 207.31 applicant other than in licensed motor vehicles, and shall state 207.32 when and for what purpose it was used. When a claim contains an 207.33 error in computation or preparation, the commissioner is 207.34 authorized to adjust the claim in accordance with the evidence 207.35 shown on the claim or other information available to the 207.36 commissioner. The commissioner, on being satisfied that the 208.1 claimant is entitled to the payments, shall approve the claim 208.2 and transmit it to the commissioner of finance. The words 208.3 "gasoline" or "special fuel" as used in this subdivision do not 208.4 include aviation gasoline or special fuel for aircraft. 208.5 Gasoline or special fuel bought and used for a "qualifying 208.6 purpose" means: 208.7 (1) Gasoline or special fuel used in carrying on a trade or 208.8 business, used on a farm situated in Minnesota, and used for a 208.9 farming purpose. "Farm" and "farming purpose" have the meanings 208.10 given them in section 6420(c)(2), (3), and (4) of the Internal 208.11 Revenue Code of 1986, as amended through December 31, 1997. 208.12 (2) Gasoline or special fuel used for off-highway business 208.13 use. "Off-highway business use" means any use off the public 208.14 highway by a person in that person's trade, business, or 208.15 activity for the production of income. Off-highway business use 208.16 includes: 208.17 (i) use of a passenger snowmobile off the public highways 208.18 as part of the operations of a resort as defined in section 208.19 157.15, subdivision 11; and 208.20 (ii) use of gasoline or special fuel to operate a power 208.21 takeoff unit on a vehicle, but not including fuel consumed 208.22 during idling time. 208.23 Off-highway business use does not include: 208.24 (i) use as a fuel in a motor vehicle which, at the time of 208.25 use, is registered or is required to be registered for highway 208.26 use under the laws of any state or foreign country; or 208.27 (ii) use of a licensed motor vehicle fuel tank in lieu of a 208.28 separate storage tank for storing fuel to be used for a 208.29 qualifying purpose, as defined in this section. Fuel purchased 208.30 to be used for a qualifying purpose cannot be placed in the fuel 208.31 tank of a licensed motor vehicle and must be stored in a 208.32 separate supply tank. 208.33 (3) Gasoline or special fuel placed in the fuel tanks of 208.34 new motor vehicles, manufactured in Minnesota, and shipped by 208.35 interstate carrier to destinations in other states or foreign 208.36 countries. 209.1By July 1, 1998, the commissioner shall adopt rules that209.2determine the rates and percentages necessary to develop209.3formulas for calculating the refund under clause (2), item (ii).209.4 [EFFECTIVE DATE.] This section is effective the day 209.5 following final enactment. 209.6 Sec. 43. [296A.201] [ASSESSMENTS.] 209.7 Subdivision 1. [GENERAL RULE.] The commissioner may make 209.8 determinations, corrections, and assessments with respect to any 209.9 tax or fee under this chapter, including interest, additions to 209.10 taxes and fees, and assessable penalties. 209.11 Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails 209.12 to file a required return, the commissioner, from information in 209.13 the commissioner's possession or obtainable by the commissioner, 209.14 may make a return for the taxpayer. The return is prima facie 209.15 correct and valid. The commissioner may use statistical or 209.16 other sampling techniques consistent with generally accepted 209.17 auditing standards in examining returns or records and making 209.18 assessments. 209.19 Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 209.20 TAXPAYER.] (a) If a return has been filed and the commissioner 209.21 determines that the tax or fee disclosed by the return is 209.22 different than the tax or fee determined by the examination, the 209.23 commissioner shall send an order of assessment to the taxpayer. 209.24 If no return has been filed, the commissioner may make a return 209.25 for the taxpayer under subdivision 2 or may send an order of 209.26 assessment under this subdivision. The order must explain the 209.27 basis for the assessment and must explain the taxpayer's appeal 209.28 rights. An order of assessment is final when made but may be 209.29 reconsidered by the commissioner under section 296A.25. 209.30 (b) Penalties under this chapter are not imposed and no 209.31 collection action can be taken, including the filing of liens 209.32 under section 270.69, if the amount shown on the order is paid 209.33 to the commissioner: 209.34 (1) within 60 days after notice of the amount and demand 209.35 for its payment have been mailed to the taxpayer by the 209.36 commissioner; or 210.1 (2) if an administrative appeal is filed under this 210.2 chapter, or a tax court appeal is filed under chapter 271, 210.3 within 60 days following final determination of the appeal if 210.4 the appeal is based upon a constitutional challenge to the tax 210.5 or fee, and if not, when the decision of the tax court is made. 210.6 Subd. 4. [ERRONEOUS REFUNDS.] An erroneous refund is 210.7 considered an underpayment of tax or fee on the date made. An 210.8 assessment of a deficiency arising out of an erroneous refund 210.9 may be made at any time within two years from the making of the 210.10 refund. If part of the refund was induced by fraud or 210.11 misrepresentation of a material fact, the assessment may be made 210.12 at any time. 210.13 Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or 210.14 assessment of tax or fee made by the commissioner is prima facie 210.15 correct and valid. The taxpayer has the burden of establishing 210.16 its incorrectness or invalidity in any related action or 210.17 proceeding. 210.18 Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The 210.19 commissioner, on examining returns of a taxpayer for more than 210.20 one year or period, may issue one order covering the period 210.21 under examination that reflects the aggregate refund or 210.22 additional tax or fee due. 210.23 Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment, 210.24 sent postage prepaid by United States mail to the taxpayer at 210.25 the taxpayer's last known address, is sufficient even if the 210.26 taxpayer is deceased or is under a legal disability, or, in the 210.27 case of a corporation, even if the corporation has terminated 210.28 its existence, unless the department has been provided with a 210.29 new address by a party authorized to receive notices of 210.30 assessment. 210.31 [EFFECTIVE DATE.] This section is effective the day 210.32 following final enactment. 210.33 Sec. 44. Minnesota Statutes 2000, section 296A.21, 210.34 subdivision 1, is amended to read: 210.35 Subdivision 1. [GENERALRULERULES.] (a) The commissioner 210.36 shall make determinations, corrections,andassessments, and 211.1 refunds with respect to taxes and fees under this chapter, 211.2 including interest, additions to taxes, and assessable 211.3 penalties. Except as otherwise provided in this section, the 211.4 amount of taxes assessable must be assessed within 3-1/2 years 211.5 after the date the return is filed. 211.6 (b) A claim for a refund of an overpayment of state tax or 211.7 fees must be filed within 3-1/2 years from the date prescribed 211.8 for filing the return, plus any extension of time granted for 211.9 filing the return, but only if filed within the extended time; 211.10 or the claim must be filed within one year from the date of an 211.11 order assessing tax or fees, or from the date of a return filed 211.12 by the commissioner, upon payment in full of the tax, fees, 211.13 penalties, and interest shown on the order or return, whichever 211.14 period expires later. 211.15 [EFFECTIVE DATE.] This section is effective the day 211.16 following final enactment. 211.17 Sec. 45. Minnesota Statutes 2000, section 296A.21, 211.18 subdivision 4, is amended to read: 211.19 Subd. 4. [TIME LIMIT FORREPAYMENTCERTAIN REFUNDS.]No211.20repaymentNotwithstanding subdivision 1, paragraph (b), no 211.21 refund under section 296A.16, subdivision 2, shall be made 211.22 unless the claim for refund and invoiceshall beare filed with 211.23 the commissioner within one year from the date of purchase.The211.24postmark on the envelope in which a written claim is mailed211.25shall determine its date of filing.211.26 [EFFECTIVE DATE.] This section is effective the day 211.27 following final enactment. 211.28 Sec. 46. Minnesota Statutes 2000, section 297A.07, 211.29 subdivision 3, is amended to read: 211.30 Subd. 3. [NEW PERMITS AFTER REVOCATION.] The commissioner 211.31 shall not issue a new permit or reinstate a revoked permit after 211.32 revocation unless the taxpayer applies for a permit and provides 211.33 reasonable evidence of intention to comply with the sales and 211.34 use tax laws and rules. The commissioner may require the 211.35 applicant to supply security, in addition to that authorized by 211.36 section 297A.28, as is reasonably necessary to insure compliance 212.1 with the sales and use tax laws and rules. If the commissioner 212.2 issues or reinstates a permit not in conformance with the 212.3 requirements of this subdivision or applicable rules, the 212.4 commissioner may cancel the permit upon notice to the permit 212.5 holder. The notice must be served by first class and certified 212.6 mail at the permit holder's last known address. The 212.7 cancellation shall be effective immediately, subject to the 212.8 right of the permit holder to show that the permit was issued in 212.9 conformance with the requirements of this subdivision and 212.10 applicable rules. Upon such showing, the permit must be 212.11 reissued. 212.12 If a taxpayer has had a permit or permits revoked three 212.13 times in a five-year period, the commissioner shall not issue a 212.14 new permit or reinstate the revoked permit until 24 months have 212.15 elapsed after revocation and the taxpayer has satisfied the 212.16 conditions for reinstatement of a revoked permit or issuance of 212.17 a new permit imposed by this section and rules adopted hereunder. 212.18 For purposes of this subdivision, the term "taxpayer" means 212.19 an individual, if a revoked permit was issued to or in the name 212.20 of an individual, or a corporation or partnership, if a revoked 212.21 permit was issued to or in the name of a corporation or 212.22 partnership. Taxpayer also means an officer of a corporation, a 212.23 member of a partnership, or an individual who is liable for 212.24 delinquent sales taxes, either for the entity for which the new 212.25 or reinstated permit is at issue, or for another entity for 212.26 which a permit was previously revoked, or personally as a permit 212.27 holder. 212.28 [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section 212.29 is effective the day following final enactment. 212.30 (b) In the next edition of Minnesota Statutes, the revisor 212.31 shall codify the amendments to this section in Minnesota 212.32 Statutes, section 297A.86, subdivision 2. 212.33 Sec. 47. Minnesota Statutes 2000, section 297A.25, 212.34 subdivision 3, is amended to read: 212.35 Subd. 3. [MEDICINES; MEDICAL DEVICES.] The gross receipts 212.36 from the sale of and storage, use, or consumption of prescribed 213.1 drugs, prescribed medicine and insulin, intended for use, 213.2 internal or external, in the cure, mitigation, treatment or 213.3 prevention of illness or disease in human beings are exempt, 213.4 together with prescription glasses, fever thermometers, 213.5 therapeutic, and prosthetic devices. "Prescribed drugs" or 213.6 "prescribed medicine" includes over-the-counter drugs or 213.7 medicine prescribed by a licensedphysicianhealth care 213.8 professional. "Therapeutic devices" includes reusable finger 213.9 pricking devices for the extraction of blood, blood glucose 213.10 monitoring machines, and other diagnostic agents used in 213.11 diagnosing, monitoring, or treating diabetes. Nonprescription 213.12 analgesics consisting principally (determined by the weight of 213.13 all ingredients) of acetaminophen, acetylsalicylic acid, 213.14 ibuprofen, ketoprofen, naproxen, and other nonprescription 213.15 analgesics that are approved by the United States Food and Drug 213.16 Administration for internal use by human beings, or a 213.17 combination thereof, are exempt. 213.18 Medical supplies purchased by a licensed health care 213.19 facility or licensed health care professional to provide medical 213.20 treatment to residents or patients are exempt. The exemption 213.21 does not apply to medical equipment or components of medical 213.22 equipment, laboratory supplies, radiological supplies, and other 213.23 items used in providing medical services. For purposes of this 213.24 subdivision, "medical supplies" means adhesive and nonadhesive 213.25 bandages, gauze pads and strips, cotton applicators, 213.26 antiseptics, nonprescription drugs, eye solution, and other 213.27 similar supplies used directly on the resident or patient in 213.28 providing medical services. 213.29 [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 213.30 effective the day following final enactment. In the next 213.31 edition of Minnesota Statutes, the revisor of statutes shall 213.32 codify the amendment in this section in Minnesota Statutes, 213.33 section 297A.67, subdivision 7. 213.34 Sec. 48. Minnesota Statutes 2000, section 297A.25, 213.35 subdivision 11, is amended to read: 213.36 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 214.1 all sales, including sales in which title is retained by a 214.2 seller or a vendor or is assigned to a third party under an 214.3 installment sale or lease purchase agreement under section 214.4 465.71, of tangible personal property to, and all storage, use 214.5 or consumption of such property by, the United States and its 214.6 agencies and instrumentalities, the University of Minnesota, 214.7 state universities, community colleges, technical colleges, 214.8 state academies, the Perpich center for arts education, an 214.9 instrumentality of a political subdivision that is accredited as 214.10 an optional/special function school by the North Central 214.11 Association of Colleges and Schools, school districts, public 214.12 libraries, public library systems, multicounty, multitype 214.13 library systems as defined in section 134.001, county law 214.14 libraries under chapter 134A, state agency libraries, the state 214.15 library under section 480.09, and the legislative reference 214.16 library are exempt. 214.17 As used in this subdivision, "school districts" means 214.18 public school entities and districts of every kind and nature 214.19 organized under the laws of the state of Minnesota, including, 214.20 without limitation, school districts, intermediate school 214.21 districts, education districts, service cooperatives, secondary 214.22 vocational cooperative centers, special education cooperatives, 214.23 joint purchasing cooperatives, telecommunication cooperatives, 214.24 regional management information centers, and any instrumentality 214.25 of a school district, as defined in section 471.59. 214.26 Sales exempted by this subdivision include sales under 214.27 section 297A.01, subdivision 3, paragraph (f). 214.28 Sales to hospitals and nursing homes owned and operated by 214.29 political subdivisions of the state of tangible personal 214.30 property and taxable services used at or by the hospitals and 214.31 nursing homes are exempt under this subdivision. 214.32 Sales of supplies and equipment used in the operation of an 214.33 ambulance service owned and operated by a political subdivision 214.34 of the state are exempt under this subdivision provided that the 214.35 supplies and equipment are used in the course of providing 214.36 medical care. Sales to a political subdivision of repair and 215.1 replacement parts for emergency rescue vehicles and fire trucks 215.2 and apparatus are exempt under this subdivision. 215.3 Sales to a political subdivision of machinery and 215.4 equipment, except for motor vehicles, used directly for mixed 215.5 municipal solid waste management services at a solid waste 215.6 disposal facility as defined in section 115A.03, subdivision 10, 215.7 are exempt under this subdivision. 215.8 Sales to political subdivisions of chore and homemaking 215.9 services to be provided to elderly or disabled individuals are 215.10 exempt. 215.11 Sales to a town of gravel and of machinery, equipment, and 215.12 accessories, except motor vehicles, used exclusively for road 215.13 and bridge maintenance, and leases of motor vehicles exempt from 215.14 tax under section 297B.03, clause (10), are exempt. 215.15 Sales of telephone services to the department of 215.16 administration that are used to provide telecommunications 215.17 services through the intertechnologies revolving fund are exempt 215.18 under this subdivision. 215.19 This exemption shall not apply to building, construction or 215.20 reconstruction materials purchased by a contractor or a 215.21 subcontractor as a part of a lump-sum contract or similar type 215.22 of contract with a guaranteed maximum price covering both labor 215.23 and materials for use in the construction, alteration, or repair 215.24 of a building or facility. This exemption does not apply to 215.25 construction materials purchased by tax exempt entities or their 215.26 contractors to be used in constructing buildings or facilities 215.27 which will not be used principally by the tax exempt entities. 215.28 This exemption does not apply to the leasing of a motor 215.29 vehicle as defined in section 297B.01, subdivision 5, except for 215.30 leases entered into by the United States or its agencies or 215.31 instrumentalities. 215.32 The tax imposed on sales to political subdivisions of the 215.33 state under this section applies to all political subdivisions 215.34 other than those explicitly exempted under this subdivision, 215.35 notwithstanding section 115A.69, subdivision 6, 116A.25, 215.36 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 216.1 469.127, 473.448, 473.545, or 473.608 or any other law to the 216.2 contrary enacted before 1992. 216.3 Sales exempted by this subdivision include sales made to 216.4 other states or political subdivisions of other states, if the 216.5 sale would be exempt from taxation if it occurred in that state, 216.6 but do not include sales under section 297A.01, subdivision 3, 216.7 paragraphs (c) and (e). 216.8 [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 216.9 effective the day following final enactment. In the next 216.10 edition of Minnesota Statutes, the revisor of statutes shall 216.11 codify the amendment in this section in Minnesota Statutes, 216.12 section 297A.70, subdivision 2. 216.13 Sec. 49. Minnesota Statutes 2000, section 297A.82, 216.14 subdivision 3, is amended to read: 216.15 Subd. 3. [PAYMENT OF TAXTO COMMISSIONER.] Ifthean 216.16 aircraft is purchased from a person who is not the holder of a 216.17 valid sales and use tax permit under this chapter, the purchaser 216.18 shall pay the taxto the commissioner of revenueprior to 216.19 registering or licensing the aircraft in this state.The216.20commissioner of revenue shall issue a certificate stating that216.21the sales and use tax in respect to the transaction has been216.22paid.216.23 [EFFECTIVE DATE.] This section is effective for sales and 216.24 purchases occurring after the day following final enactment. 216.25 Sec. 50. Minnesota Statutes 2000, section 297A.82, is 216.26 amended by adding a subdivision to read: 216.27 Subd. 7. [AGREEMENT WITH COMMISSIONER OF 216.28 TRANSPORTATION.] Notwithstanding subdivisions 1 to 4, the 216.29 commissioner may enter into an agreement with the commissioner 216.30 of transportation whereby, upon approval of both commissioners, 216.31 the commissioner of transportation will collect the sales tax on 216.32 aircraft from persons required to register or license aircraft 216.33 in this state. For purposes of collecting the tax, the 216.34 commissioner of transportation shall act as agent of the 216.35 commissioner of revenue and shall be subject to all rules not 216.36 inconsistent with the provisions of this chapter, that may be 217.1 prescribed by the commissioner. 217.2 [EFFECTIVE DATE.] This section is effective the day 217.3 following final enactment. 217.4 Sec. 51. Minnesota Statutes 2000, section 297B.03, is 217.5 amended to read: 217.6 297B.03 [EXEMPTIONS.] 217.7 There is specifically exempted from the provisions of this 217.8 chapter and from computation of the amount of tax imposed by it 217.9 the following: 217.10 (1) purchase or use, including use under a lease purchase 217.11 agreement or installment sales contract made pursuant to section 217.12 465.71, of any motor vehicle by the United States and its 217.13 agencies and instrumentalities and by any person described in 217.14 and subject to the conditions provided in section 297A.25, 217.15 subdivision 18; 217.16 (2) purchase or use of any motor vehicle by any person who 217.17 was a resident of another state or country at the time of the 217.18 purchase and who subsequently becomes a resident of Minnesota, 217.19 provided the purchase occurred more than 60 days prior to the 217.20 date such person began residing in the state of Minnesota and 217.21 the motor vehicle was registered in the person's name in the 217.22 other state or country; 217.23 (3) purchase or use of any motor vehicle by any person 217.24 making a valid election to be taxed under the provisions of 217.25 section 297A.211; 217.26 (4) purchase or use of any motor vehicle previously 217.27 registered in the state of Minnesota when such transfer 217.28 constitutes a transfer within the meaning of section 118, 331, 217.29 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 217.30 1563(a) of the Internal Revenue Code of 1986, as amended through 217.31 December 31, 1999; 217.32 (5) purchase or use of any vehicle owned by a resident of 217.33 another state and leased to a Minnesota based private or for 217.34 hire carrier for regular use in the transportation of persons or 217.35 property in interstate commerce provided the vehicle is titled 217.36 in the state of the owner or secured party, and that state does 218.1 not impose a sales tax or sales tax on motor vehicles used in 218.2 interstate commerce; 218.3 (6) purchase or use of a motor vehicle by a private 218.4 nonprofit or public educational institution for use as an 218.5 instructional aid in automotive training programs operated by 218.6 the institution. "Automotive training programs" includes motor 218.7 vehicle body and mechanical repair courses but does not include 218.8 driver education programs; 218.9 (7) purchase of a motor vehicle for use as an ambulance by 218.10 an ambulance service licensed under section 144E.10; 218.11 (8) purchase of a motor vehicle by or for a public library, 218.12 as defined in section 134.001, subdivision 2, as a bookmobile or 218.13 library delivery vehicle; 218.14 (9) purchase of a ready-mixed concrete truck; 218.15 (10) purchase or use of a motor vehicle by a town for use 218.16 exclusively for road maintenance, including snowplows and dump 218.17 trucks, but not including automobiles, vans, or pickup trucks; 218.18 (11) purchase or use of a motor vehicle by a corporation, 218.19 society, association, foundation, or institution organized and 218.20 operated exclusively for charitable, religious, or educational 218.21 purposes, except a public school, university, or library, but 218.22 only if the vehicle is: 218.23 (i) a truck, as defined in section 168.011, a bus, as 218.24 defined in section 168.011, or a passenger automobile, as 218.25 defined in section 168.011, if the automobile is designed and 218.26 used for carrying more than nine persons including the driver; 218.27 and 218.28 (ii) intended to be used primarily to transport tangible 218.29 personal property or individuals, other than employees, to whom 218.30 the organization provides service in performing its charitable, 218.31 religious, or educational purpose. 218.32 [EFFECTIVE DATE.] This section is effective the day 218.33 following final enactment, except that the change to paragraph 218.34 (11) is effective for sales and purchases occurring after June 218.35 30, 2000. 218.36 Sec. 52. Minnesota Statutes 2000, section 297F.16, 219.1 subdivision 4, is amended to read: 219.2 Subd. 4. [ERRONEOUS REFUNDSOR CREDITS.] An erroneous 219.3 refundor creditis considered an underpayment of tax on the 219.4 date made. An assessment of a deficiency arising out of an 219.5 erroneous refundor creditmust be made within3-1/2 years from219.6the date prescribed for filing the return, plus any extension of219.7time granted for filing the return, but only if filed within the219.8extended time, or two years from the time the tax is paid in219.9full, whichever period expires latertwo years from the making 219.10 of the refund. If part of the refund was induced by fraud or 219.11 misrepresentation of a material fact, the assessment may be made 219.12 at any time. 219.13 [EFFECTIVE DATE.] This section is effective the day 219.14 following final enactment. 219.15 Sec. 53. Minnesota Statutes 2000, section 297G.15, 219.16 subdivision 4, is amended to read: 219.17 Subd. 4. [ERRONEOUS REFUNDSOR CREDITS.] An erroneous 219.18 refundor creditis considered an underpayment of tax on the 219.19 date made. An assessment of a deficiency arising out of an 219.20 erroneous refundor creditmust be made within3-1/2 years from219.21the date prescribed for filing the return, plus any extension of219.22time granted for filing the return, but only if filed within the219.23extended time, or two years from the time the tax is paid in219.24full, whichever period expires latertwo years from the making 219.25 of the refund. If part of the refund was induced by fraud or 219.26 misrepresentation of a material fact, the assessment may be made 219.27 at any time. 219.28 [EFFECTIVE DATE.] This section is effective the day 219.29 following final enactment. 219.30 Sec. 54. Minnesota Statutes 2000, section 297G.16, 219.31 subdivision 5, is amended to read: 219.32 Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise 219.33 provided in this chapter, a claim for a refund of an overpayment 219.34 of tax must be filed within 3-1/2 years from the date prescribed 219.35 for filing the return, plus any extension of time granted for 219.36 filing the return, but only if filed within the extended time, 220.1or two years from the time the tax is paid in full, whichever220.2period expires later. Claimants under this section are subject220.3to the notice requirements of section 289A.38, subdivision 7or 220.4 within one year from the date of an order assessing tax or from 220.5 the date of a return filed by the commissioner, upon payment in 220.6 full of the tax, penalties, and interest shown on the order or 220.7 return made by the commissioner, whichever period expires later. 220.8 [EFFECTIVE DATE.] This section is effective for returns 220.9 becoming due or orders assessing tax issued on or after the day 220.10 following final enactment. 220.11 Sec. 55. Minnesota Statutes 2000, section 297G.16, 220.12 subdivision 7, is amended to read: 220.13 Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 220.14 refund must be filed with the commissioner within one year of 220.15 the filing of the taxpayer's income tax return containing the 220.16 bad debt deduction that is being claimed. Claimants under this 220.17 subdivision are subject to the notice requirements of section 220.18 289A.38, subdivision 7. 220.19 [EFFECTIVE DATE.] This section is effective the day 220.20 following final enactment. 220.21 Sec. 56. [297H.115] [USE TAX.] 220.22 Subdivision 1. [IMPOSITION; LIABILITY OF GENERATORS AND 220.23 SELF-HAULERS.] (a) A use tax is imposed on the sales price of 220.24 mixed municipal solid waste management services received by a 220.25 residential generator at the rate imposed under section 297H.02, 220.26 unless the tax imposed under section 297H.02 was paid. The 220.27 residential generator is liable. 220.28 (b) A use tax is imposed on the sales price of mixed 220.29 municipal solid waste management services received by a 220.30 commercial generator at the rate imposed under section 297H.03, 220.31 unless the tax imposed under section 297H.03 was paid. The 220.32 commercial generator is liable. 220.33 (c) A use tax is imposed on the volume of nonmixed 220.34 municipal solid waste that is managed at the rate imposed under 220.35 section 297H.04, unless the tax imposed under section 297H.04 220.36 was paid. The generator is liable. 221.1 (d) A use tax is imposed on the sales price of mixed 221.2 municipal solid waste management services received by a 221.3 self-hauler at the rate imposed under section 297H.05, paragraph 221.4 (a), unless the tax imposed under section 297H.05, paragraph 221.5 (a), was paid. The self-hauler is liable. 221.6 (e) A use tax is imposed on the volume of nonmixed 221.7 municipal solid waste managed at the rate imposed under section 221.8 297H.05, paragraph (b), unless the tax imposed under section 221.9 297H.05, paragraph (b), was paid. The self-hauler is liable. 221.10 Subd. 2. [PAYMENT; REPORTING.] A generator or self-hauler 221.11 that is liable under subdivision 1 shall report the use tax on a 221.12 return prescribed by the commissioner of revenue, and shall 221.13 remit the tax with the return. The return and the tax must be 221.14 filed using the filing cycle and due dates provided for taxes 221.15 imposed under chapter 297A. 221.16 Subd. 3. [COMMISSIONER ASSESSMENT.] (a) The commissioner 221.17 of revenue may not assess the generator or self-hauler a use tax 221.18 on a transaction for which the waste management service provider 221.19 has paid the solid waste management tax, except as provided in 221.20 paragraph (b). 221.21 (b) If the waste management service provider who is an 221.22 accrual basis taxpayer remits a payment and thereafter offsets 221.23 the amount as a bad debt under section 297H.09, the commissioner 221.24 of revenue may assess the generator or self-hauler a use tax for 221.25 the offset amount. 221.26 [EFFECTIVE DATE.] This section is effective for services 221.27 received on or after July 1, 2001. 221.28 Sec. 57. Minnesota Statutes 2000, section 461.12, is 221.29 amended by adding a subdivision to read: 221.30 Subd. 8. [NOTICE TO COMMISSIONER.] The licensing authority 221.31 under this section shall, within 30 days of the issuance of a 221.32 license, inform the commissioner of revenue of the licensee's 221.33 name, address, trade name, and the effective and expiration 221.34 dates of the license. The commissioner of revenue must also be 221.35 informed of a license renewal, transfer, cancellation, 221.36 suspension, or revocation during the license period. 222.1 [EFFECTIVE DATE.] This section is effective for licenses 222.2 issued, renewed, transferred, canceled, suspended, or revoked on 222.3 or after January 1, 2002. 222.4 Sec. 58. Minnesota Statutes 2000, section 473H.10, 222.5 subdivision 3, is amended to read: 222.6 Subd. 3. [COMPUTATION OF TAX; STATE REIMBURSEMENT.] (a) 222.7 After having determined the market value of all land valued 222.8 according to subdivision 2, the assessor shall compute the net 222.9 tax capacity of those properties by applying the appropriate 222.10 class rates. When computing the rate of tax pursuant to section 222.11 275.08, the county auditor shall include the net tax capacity of 222.12 land as provided in this clause. 222.13 (b) The county auditor shall compute the tax on lands 222.14 valued according to subdivision 2 and nonresidential buildings 222.15 by multiplying the net tax capacity times the total local tax 222.16 rate for all purposes as provided in clause (a). 222.17 (c) The county auditor shall then compute the tax on lands 222.18 valued according to subdivision 2 and nonresidential buildings 222.19 by multiplying the net tax capacity times the total local tax 222.20 rate for all purposes as provided in clause (a), subtracting 222.21 $1.50 per acre of land in the preserve. 222.22 (d) The county auditor shall then compute the maximum ad 222.23 valorem property tax on lands valued according to subdivision 2 222.24 and nonresidential buildings by multiplying the net tax capacity 222.25 times 105 percent of the previous year's statewide average local 222.26 tax rate levied on property located within townships for all 222.27 purposes. 222.28 (e) The tax due and payable by the owner of preserve land 222.29 valued according to subdivision 2 and nonresidential buildings 222.30 will be the amount determined in clause (c) or (d), whichever is 222.31 less. The state shall reimburse the taxing jurisdictions for 222.32 the amount of the difference between the net tax determined 222.33 under this clause and the gross tax in clause (b). Residential 222.34 buildings shall continue to be valued and classified according 222.35 to the provisions of sections 273.11 and 273.13, as they would 222.36 be in the absence of this section, and the tax on those 223.1 buildings shall not be subject to the limitation contained in 223.2 this clause. 223.3 The county may transfer money from the county conservation 223.4 account created in section 40A.152 to the county revenue fund to 223.5 reimburse the fund for the tax lost as a result of this 223.6 subdivision or to pay taxing jurisdictions within the county for 223.7 the tax lost. The county auditor shall certify to the 223.8 commissioner of revenue on or before June 1 the total amount of 223.9 tax lost to the county and taxing jurisdictions located within 223.10 the county as a result of this subdivision and the extent that 223.11 the tax lost exceeds funds available in the county conservation 223.12 account. Payment shall be made by the state on December2615 223.13 to each of the affected taxing jurisdictions, other than school 223.14 districts, in the same proportion that the ad valorem tax is 223.15 distributed if the county conservation account is insufficient 223.16 to make the reimbursement. There is annually appropriated from 223.17 the Minnesota conservation fund under section 40A.151 to the 223.18 commissioner of revenue an amount sufficient to make the 223.19 reimbursement provided in this subdivision. If the amount 223.20 available in the Minnesota conservation fund is insufficient, 223.21 the balance that is needed is appropriated from the general fund. 223.22 Sec. 59. [REPORT ON INCOME TAX RECIPROCITY WITH 223.23 WISCONSIN.] 223.24 By March 1, 2002, the commissioner of revenue must report 223.25 to house and senate committees dealing with taxes on the 223.26 advisability of terminating individual income tax reciprocity 223.27 with the state of Wisconsin under Minnesota Statutes, section 223.28 290.081. 223.29 [EFFECTIVE DATE.] This section is effective the day 223.30 following final enactment. 223.31 Sec. 60. [REPEALER.] 223.32 (a) Minnesota Statutes 2000, section 296A.16, subdivision 223.33 6, is repealed effective the day following final enactment. 223.34 (b) Minnesota Statutes 2000, sections 290.095, subdivision 223.35 7; 290.23; 290.25; and 290.31, subdivisions 2, 2a, 3, 4, 5, and 223.36 19, are repealed effective for tax years beginning after 224.1 December 31, 2000. 224.2 (c) Minnesota Statutes 2000, section 297B.032, is repealed 224.3 effective the day following final enactment. 224.4 (d) Minnesota Statutes 2000, sections 290.06, subdivision 224.5 25, and 290A.04, subdivision 2j, are repealed effective for 224.6 taxable years beginning after December 31, 2001. 224.7 (e) Minnesota Rules, parts 8120.0200; 8120.0500; 224.8 8120.0700; 8120.0900; 8120.1300; 8120.1600; 8120.2000; 224.9 8120.2100; 8120.2200; 8120.2300; 8120.2500; 8120.2700; 224.10 8120.2800; 8120.3000; 8120.3200; 8120.4300; 8120.4400; 224.11 8120.4500; 8120.4600; 8120.4900; 8120.5000; 8120.5100; and 224.12 8120.5300, are repealed effective the day following final 224.13 enactment. 224.14 ARTICLE 6 224.15 LOCAL DEVELOPMENT 224.16 Section 1. Minnesota Statutes 2000, section 276A.01, 224.17 subdivision 3, is amended to read: 224.18 Subd. 3. [COMMERCIAL-INDUSTRIAL PROPERTY.] 224.19 "Commercial-industrial property" means the following categories 224.20 of property, as defined in section 273.13, excluding that 224.21 portion of the property (i) that may, by law, constitute the tax 224.22 base for a tax increment pledged pursuant to section 469.042 or 224.23 469.162 or sections 469.174 to 469.178, certification of which 224.24 was requested prior to May 1, 1996, to the extent and while the 224.25 tax increment is so pledged; or (ii) that is exempt from 224.26 taxation under section 272.02: 224.27 (1) that portion of class 5 property consisting of unmined 224.28 iron ore and low-grade iron-bearing formations as defined in 224.29 section 273.14, tools, implements, and machinery, except the 224.30 portion of high voltage transmission lines, the value of which 224.31 is deducted from net tax capacity under section 273.425; and 224.32 (2) that portion of class 3 and class 5 property which is 224.33 either used or zoned for use for any commercial or industrial 224.34 purpose, except for such property which is, or, in the case of 224.35 property under construction, will when completed be used 224.36 exclusively for residential occupancy and the provision of 225.1 services to residential occupants thereof. Property must be 225.2 considered as used exclusively for residential occupancy only if 225.3 each of not less than 80 percent of its occupied residential 225.4 units is, or, in the case of property under construction, will 225.5 when completed be occupied under an oral or written agreement 225.6 for occupancy over a continuous period of not less than 30 days. 225.7 If the classification of property prescribed by section 225.8 273.13 is modified by legislative amendment, the references in 225.9 this subdivision are to the successor class or classes of 225.10 property, or portions thereof, that include the kinds of 225.11 property designated in this subdivision. 225.12 [EFFECTIVE DATE.] This section is effective retroactive to 225.13 July 1, 1997, for taxes levied in 1997, payable in 1998, and 225.14 subsequent years. 225.15 Sec. 2. Minnesota Statutes 2000, section 469.169, is 225.16 amended by adding a subdivision to read: 225.17 Subd. 15. [ADDITIONAL BORDER CITY ALLOCATIONS.] In 225.18 addition to tax reductions authorized in subdivisions 7 to 14, 225.19 the commissioner shall allocate $1,500,000 for tax reductions to 225.20 border city enterprise zones in cities located on the western 225.21 border of the state. The commissioner shall make allocations to 225.22 zones in cities on the western border on a per capita basis. 225.23 Allocations made under this subdivision may be used for tax 225.24 reductions as provided in section 469.171, or for other offsets 225.25 of taxes imposed on or remitted by businesses located in the 225.26 enterprise zone, but only if the municipality determines that 225.27 the granting of the tax reduction or offset is necessary in 225.28 order to retain a business within or attract a business to the 225.29 zone. Any portion of the allocation provided in this section 225.30 may alternatively be used for tax reductions under section 225.31 469.1732 or 469.1734. If, at the end of the biennium, the total 225.32 amount allowable under this section has not been expended, a 225.33 city that has expended its allocation may submit a request for 225.34 an additional allocation for qualifying reductions from the 225.35 amount remaining. If more than one city exceeds their 225.36 allocation and the additional qualifying amounts exceed the 226.1 balance remaining, the commissioner shall allocate the amount 226.2 remaining to each qualifying city in proportion to its request 226.3 for additional allocation. Limitations on allocations under 226.4 subdivision 7 do not apply to this allocation. 226.5 [EFFECTIVE DATE.] This section is effective the day 226.6 following final enactment. 226.7 Sec. 3. Minnesota Statutes 2000, section 469.174, 226.8 subdivision 3, is amended to read: 226.9 Subd. 3. [BONDS.] "Bonds" means any bonds, including 226.10 refunding bonds, notes, interim certificates, 226.11 debentures, interfund loans or advances, or other obligations 226.12 issued by an authority under section 469.178 or which were 226.13 issued in aid of a project under any other law, except revenue 226.14 bonds issued pursuant to sections 469.152 to 469.165, prior to 226.15 August 1, 1979. 226.16 Sec. 4. Minnesota Statutes 2000, section 469.174, 226.17 subdivision 10, is amended to read: 226.18 Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 226.19 district" means a type of tax increment financing district 226.20 consisting of a project, or portions of a project, within which 226.21 the authority finds by resolution that one or more of the 226.22 following conditions, reasonably distributed throughout the 226.23 district, exists: 226.24 (1) parcels consisting of 70 percent of the area of the 226.25 district are occupied by buildings, streets, utilities, paved or 226.26 gravel parking lots, or otherimprovementssimilar structures 226.27 and more than 50 percent of the buildings, not including 226.28 outbuildings, are structurally substandard to a degree requiring 226.29 substantial renovation or clearance; or 226.30 (2) the property consists of vacant, unused, underused, 226.31 inappropriately used, or infrequently used railyards, rail 226.32 storage facilities, or excessive or vacated railroad 226.33 rights-of-way; or 226.34 (3) tank facilities, or property whose immediately previous 226.35 use was for tank facilities, as defined in section 115C.02, 226.36 subdivision 15, if the tank facilities: 227.1 (i) have or had a capacity of more than 1,000,000 gallons; 227.2 (ii) are located adjacent to rail facilities; and 227.3 (iii) have been removed or are unused, underused, 227.4 inappropriately used, or infrequently used. 227.5 (b) For purposes of this subdivision, "structurally 227.6 substandard" shall mean containing defects in structural 227.7 elements or a combination of deficiencies in essential utilities 227.8 and facilities, light and ventilation, fire protection including 227.9 adequate egress, layout and condition of interior partitions, or 227.10 similar factors, which defects or deficiencies are of sufficient 227.11 total significance to justify substantial renovation or 227.12 clearance. 227.13 (c) A building is not structurally substandard if it is in 227.14 compliance with the building code applicable to new buildings or 227.15 could be modified to satisfy the building code at a cost of less 227.16 than 15 percent of the cost of constructing a new structure of 227.17 the same square footage and type on the site. The municipality 227.18 may find that a building is not disqualified as structurally 227.19 substandard under the preceding sentence on the basis of 227.20 reasonably available evidence, such as the size, type, and age 227.21 of the building, the average cost of plumbing, electrical, or 227.22 structural repairs, or other similar reliable evidence. The 227.23 municipality may not make such a determination without an 227.24 interior inspection of the property, but need not have an 227.25 independent, expert appraisal prepared of the cost of repair and 227.26 rehabilitation of the building. An interior inspection of the 227.27 property is not required, if the municipality finds that (1) the 227.28 municipality or authority is unable to gain access to the 227.29 property after using its best efforts to obtain permission from 227.30 the party that owns or controls the property; and (2) the 227.31 evidence otherwise supports a reasonable conclusion that the 227.32 building is structurally substandard. Items of evidence that 227.33 support such a conclusion include recent fire or police 227.34 inspections, on-site property tax appraisals or housing 227.35 inspections, exterior evidence of deterioration, or other 227.36 similar reliable evidence. Written documentation of the 228.1 findings and reasons why an interior inspection was not 228.2 conducted must be made and retained under section 469.175, 228.3 subdivision 3, clause (1). 228.4 (d) A parcel is deemed to be occupied by a structurally 228.5 substandard building for purposes of the finding under paragraph 228.6 (a) if all of the following conditions are met: 228.7 (1) the parcel was occupied by a substandard building 228.8 within three years of the filing of the request for 228.9 certification of the parcel as part of the district with the 228.10 county auditor; 228.11 (2) the substandard building was demolished or removed by 228.12 the authority or the demolition or removal was financed by the 228.13 authority or was done by a developer under a development 228.14 agreement with the authority; 228.15 (3) the authority found by resolution before the demolition 228.16 or removal that the parcel was occupied by a structurally 228.17 substandard building and that after demolition and clearance the 228.18 authority intended to include the parcel within a district; and 228.19 (4) upon filing the request for certification of the tax 228.20 capacity of the parcel as part of a district, the authority 228.21 notifies the county auditor that the original tax capacity of 228.22 the parcel must be adjusted as provided by section 469.177, 228.23 subdivision 1, paragraph (h). 228.24 (e) For purposes of this subdivision, a parcel is not 228.25 occupied by buildings, streets, utilities, paved or gravel 228.26 parking lots, or otherimprovementssimilar structures unless 15 228.27 percent of the area of the parcel containsimprovements228.28 buildings, streets, utilities, paved or gravel parking lots, or 228.29 other similar structures. 228.30 (f) For districts consisting of two or more noncontiguous 228.31 areas, each area must qualify as a redevelopment district under 228.32 paragraph (a) to be included in the district, and the entire 228.33 area of the district must satisfy paragraph (a). 228.34 [EFFECTIVE DATE.] This section is effective for districts 228.35 for which the request for certification is made after June 30, 228.36 2001. 229.1 Sec. 5. Minnesota Statutes 2000, section 469.174, 229.2 subdivision 10a, is amended to read: 229.3 Subd. 10a. [RENEWAL AND RENOVATION DISTRICT.] (a) "Renewal 229.4 and renovation district" means a type of tax increment financing 229.5 district consisting of a project, or portions of a project, 229.6 within which the authority finds by resolution that: 229.7 (1)(i) parcels consisting of 70 percent of the area of the 229.8 district are occupied by buildings, streets, utilities, paved or 229.9 gravel parking lots, or otherimprovementssimilar structures; 229.10 (ii) 20 percent of the buildings are structurally substandard; 229.11 and (iii) 30 percent of the other buildings require substantial 229.12 renovation or clearance to remove existing conditions such as: 229.13 inadequate street layout, incompatible uses or land use 229.14 relationships, overcrowding of buildings on the land, excessive 229.15 dwelling unit density, obsolete buildings not suitable for 229.16 improvement or conversion, or other identified hazards to the 229.17 health, safety, and general well-being of the community; and 229.18 (2) the conditions described in clause (1) are reasonably 229.19 distributed throughout the geographic area of the district. 229.20 (b) For purposes of determining whether a building is 229.21 structurally substandard, whether parcels are occupied by 229.22 buildings, streets, utilities, paved or gravel parking lots, or 229.23 otherimprovementssimilar structures, or whether noncontiguous 229.24 areas qualify, the provisions of subdivision 10, 229.25 paragraphs(b),(c), (e), and(d)(f) apply. 229.26 [EFFECTIVE DATE.] This section is effective for districts 229.27 for which the requests for certification are made after June 30, 229.28 1997, except the provision requiring parcels to be occupied by 229.29 structures is effective for districts for which the request for 229.30 certification is made after June 30, 2001. 229.31 Sec. 6. Minnesota Statutes 2000, section 469.174, 229.32 subdivision 12, is amended to read: 229.33 Subd. 12. [ECONOMIC DEVELOPMENT DISTRICT.] "Economic 229.34 development district" means a type of tax increment financing 229.35 district which consists of any project, or portions of a 229.36 project,not meeting the requirements found in the definition of230.1redevelopment district, renewal and renovation district, soils230.2condition district, or housing district, butwhich the authority 230.3 finds to be in the public interest because: 230.4 (1) it will discourage commerce, industry, or manufacturing 230.5 from moving their operations to another state or municipality; 230.6 or 230.7 (2) it will result in increased employment in the state; or 230.8 (3) it will result in preservation and enhancement of the 230.9 tax base of the state. 230.10 [EFFECTIVE DATE.] This section is effective for districts 230.11 for which the request for certification is made after June 30, 230.12 2001. 230.13 Sec. 7. Minnesota Statutes 2000, section 469.175, 230.14 subdivision 1, is amended to read: 230.15 Subdivision 1. [TAX INCREMENT FINANCING PLAN.](a)A tax 230.16 increment financing plan shall contain: 230.17 (1) a statement of objectives of an authority for the 230.18 improvement of a project; 230.19 (2) a statement as to the development program for the 230.20 project, including the property within the project, if any, that 230.21 the authority intends to acquire; 230.22 (3) a list of any development activities that the plan 230.23 proposes to take place within the project, for which contracts 230.24 have been entered into at the time of the preparation of the 230.25 plan, including the names of the parties to the contract, the 230.26 activity governed by the contract, the cost stated in the 230.27 contract, and the expected date of completion of that activity; 230.28 (4) identification or description of the type of any other 230.29 specific development reasonably expected to take place within 230.30 the project, and the date when the development is likely to 230.31 occur; 230.32 (5) estimates of the following: 230.33 (i) cost of the project, including administration expenses; 230.34 (ii) amount of bonded indebtedness to be incurred; 230.35 (iii) sources of revenue to finance or otherwise pay public 230.36 costs; 231.1 (iv) the most recent net tax capacity of taxable real 231.2 property within the tax increment financing district and within 231.3 any subdistrict; 231.4 (v) the estimated captured net tax capacity of the tax 231.5 increment financing district at completion; and 231.6 (vi) the duration of the tax increment financing district's 231.7 and any subdistrict's existence; 231.8 (6) statements of the authority's alternate estimates of 231.9 the impact of tax increment financing on the net tax capacities 231.10 of all taxing jurisdictions in which the tax increment financing 231.11 district is located in whole or in part. For purposes of one 231.12 statement, the authority shall assume that the estimated 231.13 captured net tax capacity would be available to the taxing 231.14 jurisdictions without creation of the district, and for purposes 231.15 of the second statement, the authority shall assume that none of 231.16 the estimated captured net tax capacity would be available to 231.17 the taxing jurisdictions without creation of the district or 231.18 subdistrict; 231.19 (7) identification and description of studies and analyses 231.20 used to make the determination set forth in subdivision 3, 231.21 clause (2); and 231.22 (8) identification of all parcels to be included in the 231.23 district or any subdistrict. 231.24(b) For a housing district, redevelopment district, or a231.25hazardous substance subdistrict, the authority may elect in the231.26tax increment financing plan to provide for the identification231.27of a minimum market value in the plan, development agreement, or231.28assessment agreement, and provide that increment is first231.29received by the authority when (1) the market value of the231.30improvements as determined by the assessor reaches or exceeds231.31the minimum market value, or (2) four years has elapsed from the231.32date of certification of the original net tax capacity of the231.33taxable real property in the district or subdistrict by the231.34county auditor, whichever is earlier.231.35 [EFFECTIVE DATE.] This section is effective for requests 231.36 for certification of tax increment financing districts received 232.1 after June 30, 2001. 232.2 Sec. 8. Minnesota Statutes 2000, section 469.175, is 232.3 amended by adding a subdivision to read: 232.4 Subd. 4a. [FILING PLAN WITH STATE.] (a) The authority must 232.5 file a copy of the tax increment financing plan and amendments 232.6 to the plan with the commissioner of revenue. The authority 232.7 must also file a copy of the development plan or the project 232.8 plan for the project area with the commissioner of revenue. The 232.9 commissioner of revenue shall provide a copy of a plan to the 232.10 state auditor upon request. 232.11 (b) Filing under this subdivision must be made within 60 232.12 days after the latest of: 232.13 (1) the filing of the request for certification of the 232.14 district; 232.15 (2) approval of the plan by the municipality; or 232.16 (3) adoption of the plan by the authority. 232.17 [EFFECTIVE DATE.] This section is effective for plans and 232.18 amendments approved after July 1, 2000. 232.19 Sec. 9. Minnesota Statutes 2000, section 469.175, 232.20 subdivision 6b, is amended to read: 232.21 Subd. 6b. [DURATION OF DISCLOSURE AND REPORTING 232.22 REQUIREMENTS.] The disclosure and reporting requirements imposed 232.23 by subdivisions 5,and 6, and 6aapply with respect to a tax 232.24 increment financing district beginning with the annual 232.25 disclosure and reports for the year in which the original net 232.26 tax capacity of the district was certified and ending with the 232.27 annual disclosure and reports for the year in which both of the 232.28 following events have occurred: 232.29 (1) decertification of the district; and 232.30 (2) expenditure or return to the county auditor of all 232.31 remaining revenues derived from tax increments paid by 232.32 properties in the district. 232.33 [EFFECTIVE DATE.] This section is effective for reports 232.34 filed after December 31, 2000. 232.35 Sec. 10. Minnesota Statutes 2000, section 469.176, 232.36 subdivision 1b, is amended to read: 233.1 Subd. 1b. [DURATION LIMITS; TERMS.] (a) No tax increment 233.2 shall in any event be paid to the authority 233.3 (1) after 15 years after receipt by the authority of the 233.4 first increment for a renewal and renovation district, 233.5 (2) after 20 years after receipt by the authority of the 233.6 first increment for a soils condition district, 233.7 (3) after eight years after receipt by the authority of the 233.8 first increment for an economic development district, 233.9 (4) for a housing district or a redevelopment district, 233.10after 20 years from the date of receipt by the authority of the233.11first tax increment by the authority pursuant to section233.12469.175, subdivision 1, paragraph (b); or, if no provision is233.13made under section 469.175, subdivision 1, paragraph (b),after 233.14 25 years from the date of receipt by the authority of the first 233.15 increment. 233.16 (b) For purposes of determining a duration limit under this 233.17 subdivision or subdivision 1e that is based on the receipt of an 233.18 increment, any increments from taxes payable in the year in 233.19 which the district terminates shall be paid to the authority. 233.20 This paragraph does not affect a duration limit calculated from 233.21 the date of approval of the tax increment financing plan or 233.22 based on the recovery of costs or to a duration limit under 233.23 subdivision 1c. This paragraph does not supersede the 233.24 restrictions on payment of delinquent taxes in subdivision 1f. 233.25 (c)Except as authorized by section 469.175, subdivision 1,233.26paragraph (b),An action by the authority to waive or decline to 233.27 accept an increment has no effect for purposes of computing a 233.28 duration limit based on the receipt of increment under this 233.29 subdivision or any other provision of law. The authority is 233.30 deemed to have received an increment for any year in which it 233.31 waived or declined to accept an increment, regardless of whether 233.32 the increment was paid to the authority. 233.33 (d) Receipt by a hazardous substance subdistrict of an 233.34 increment as a result of a reduction in original net tax 233.35 capacity under section 469.174, subdivision 7, paragraph (b), 233.36 does not constitute receipt of increment by the overlying 234.1 district for purpose of calculating the duration limit under 234.2 this section. 234.3 [EFFECTIVE DATE.] This section is effective for districts 234.4 for which the request for certification is made after June 30, 234.5 2001. 234.6 Sec. 11. Minnesota Statutes 2000, section 469.176, 234.7 subdivision 1e, is amended to read: 234.8 Subd. 1e. [DURATION LIMITS; HAZARDOUS SUBSTANCE 234.9 SUBDISTRICTS.] If a parcel of a district is part of a designated 234.10 hazardous substance site or a hazardous substance subdistrict, 234.11 tax increment may be paid to the authority from the parcel for 234.12 longer than the period otherwise provided by subdivisions 1 to 234.13 1f for the overlying district. The extended period for 234.14 collection of tax increment begins on the date of receipt of the 234.15 first tax increment from the parcel that is more than any tax 234.16 increment received from the parcel before the date of the 234.17 certification under section 469.174, subdivision 7, paragraph 234.18 (b), and received after the date of certification to the county 234.19 auditor described in section 469.174, subdivision 7, paragraph 234.20 (b). The extended period for collection of tax increment is the 234.21 lesser of: (1) 25 years from the date of commencement of the 234.22 extended periodor 20 years if the authority elects under234.23section 469.175, subdivision 1, paragraph (b), to defer receipt234.24of the first increment; or (2) the period necessary to recover 234.25 the costs of removal actions or remedial actions specified in a 234.26 development response action plan. 234.27 [EFFECTIVE DATE.] This section is effective for requests 234.28 for certification of subdistricts made after June 30, 2001. 234.29 Sec. 12. Minnesota Statutes 2000, section 469.176, 234.30 subdivision 3, is amended to read: 234.31 Subd. 3. [LIMITATION ON ADMINISTRATIVE EXPENSES.] (a) For 234.32 districts for which certification was requested before August 1, 234.33 1979, or after June 30, 1982, no tax increment shall be used to 234.34 pay any administrative expenses for a project which exceed ten 234.35 percent of the total tax increment expenditures authorized by 234.36 the tax increment financing plan or the total tax increment 235.1 expenditures for the project, whichever is less. 235.2 (b) For districts for which certification was requested 235.3 after July 31, 1979, and before July 1, 1982, no tax increment 235.4 shall be used to pay administrative expenses, as defined in 235.5 Minnesota Statutes 1980, section 273.73, for aprojectdistrict 235.6 which exceeds five percent of the total tax increment 235.7 expenditures authorized by the tax increment financing plan or 235.8 the total tax increment expenditures for theprojectdistrict, 235.9 whichever is less. 235.10 (c) For districts for which certification was requested 235.11 after June 30, 2001, no tax increment may be used to pay any 235.12 administrative expenses for a project which exceed ten percent 235.13 of total tax increment expenditures authorized by the tax 235.14 increment financing plan or the total tax increments from the 235.15 district, whichever is less. 235.16 [EFFECTIVE DATE.] This section is effective for districts 235.17 for which the request for certification is received after June 235.18 30, 2001. 235.19 Sec. 13. Minnesota Statutes 2000, section 469.176, 235.20 subdivision 4g, is amended to read: 235.21 Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a)These235.22revenues shallTax increments may not be used to circumvent 235.23 existing levy limit law. 235.24 (b) Norevenues derived fromtax increment from any 235.25 district, whether certified before or after August 1, 1979,235.26shallmay be used for the acquisition, construction, renovation, 235.27 operation, or maintenance of a building to be used primarily and 235.28 regularly for conducting the business of a municipality, county, 235.29 school district, or any other local unit of government or the 235.30 state or federal governmentor for a commons area used as a235.31public park, or a facility used for social, recreational, or235.32conference purposes. This provisionshalldoes not prohibit the 235.33 use of revenues derived from tax increments for the construction 235.34 or renovation of a parking structureor of a privately owned235.35facility for conference purposes. 235.36(b) If any publicly owned facility used for social,236.1recreational, or conference purposes and financed in whole or in236.2part from revenues derived from a district is operated or236.3managed by an entity other than the authority, the operating and236.4management policies of the facility must be approved by the236.5governing body of the authority.236.6 (c)(1) Tax increments may not be used to pay for the cost 236.7 of public improvements, equipment, or other items, if: 236.8 (i) the improvements, equipment, or other items are located 236.9 outside of the area of the tax increment financing district from 236.10 which the increments were collected; and 236.11 (ii) the improvements, equipment, or items that (A) 236.12 primarily serve a decorative or aesthetic purpose, or (B) serve 236.13 a functional purpose, but their cost is increased by more than 236.14 100 percent as a result of the selection of materials, design, 236.15 or type as compared with more commonly used materials, designs, 236.16 or types for similar improvements, equipment, or items. 236.17 (2) The provisions of this paragraph do not apply to 236.18 expenditures related to the rehabilitation of historic 236.19 structures that are: 236.20 (i) individually listed on the National Register of 236.21 Historic Places; or 236.22 (ii) a contributing element to a historic district listed 236.23 on the National Register of Historic Places. 236.24 [EFFECTIVE DATE.] This section is effective for 236.25 expenditures of increment made after June 30, 2001. 236.26 Sec. 14. Minnesota Statutes 2000, section 469.176, is 236.27 amended by adding a subdivision to read: 236.28 Subd. 41. [PROHIBITED FACILITIES.] (a) No tax increment 236.29 from any district may be used for: 236.30 (1) a commons area used as a public park; or 236.31 (2) a facility used for social, recreational, or conference 236.32 purposes. 236.33 (b) This subdivision does not apply to a privately owned 236.34 facility for conference purposes or a parking structure. 236.35 [EFFECTIVE DATE.] This section is effective for 236.36 expenditures of increment made after June 30, 2001, but does not 237.1 apply to (1) expenditures made before January 1, 2000; (2) 237.2 expenditures made under a binding contract entered before 237.3 January 1, 2000; or (3) expenditures made under a binding 237.4 contract entered pursuant to a letter of intent with the 237.5 developer or contractor or its assigns if the letter of intent 237.6 was entered before January 1, 2000. 237.7 Sec. 15. Minnesota Statutes 2000, section 469.177, 237.8 subdivision 1, is amended to read: 237.9 Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or 237.10 after adoption of a tax increment financing plan, the auditor of 237.11 any county in which the district is situated shall, upon request 237.12 of the authority, certify the original net tax capacity of the 237.13 tax increment financing district and that portion of the 237.14 district overlying any subdistrict as described in the tax 237.15 increment financing plan and shall certify in each year 237.16 thereafter the amount by which the original net tax capacity has 237.17 increased or decreased as a result of a change in tax exempt 237.18 status of property within the district and any subdistrict, 237.19 reduction or enlargement of the district or changes pursuant to 237.20 subdivision 4. 237.21 (b) For districts approved under section 469.175, 237.22 subdivision 3, or parcels added to existing districts after May 237.23 1, 1988, if the classification under section 273.13 of property 237.24 located in a district changes to a classification that has a 237.25 different assessment ratio, the original net tax capacity of 237.26 that property must be redetermined at the time when its use is 237.27 changed as if the property had originally been classified in the 237.28 same class in which it is classified after its use is changed. 237.29 (c) The amount to be added to the original net tax capacity 237.30 of the district as a result of previously tax exempt real 237.31 property within the district becoming taxable equals the net tax 237.32 capacity of the real property as most recently assessed pursuant 237.33 to section 273.18 or, if that assessment was made more than one 237.34 year prior to the date of title transfer rendering the property 237.35 taxable, the net tax capacity assessed by the assessor at the 237.36 time of the transfer. If improvements are made to tax exempt 238.1 property after certification of the district and before the 238.2 parcel becomes taxable, the assessor shall, at the request of 238.3 the authority, separately assess the estimated market value of 238.4 the improvements. If the property becomes taxable, the county 238.5 auditor shall add to original net tax capacity, the net tax 238.6 capacity of the parcel, excluding the separately assessed 238.7 improvements. If substantial taxable improvements were made to 238.8 a parcel after certification of the district and if the property 238.9 later becomes tax exempt, in whole or part, as a result of the 238.10 authority acquiring the property through foreclosure or exercise 238.11 of remedies under a lease or other revenue agreement or as a 238.12 result of tax forfeiture, the amount to be added to the original 238.13 net tax capacity of the district as a result of the property 238.14 again becoming taxable is the amount of the parcel's value that 238.15 was included in original net tax capacity when the parcel was 238.16 first certified. The amount to be added to the original net tax 238.17 capacity of the district as a result of enlargements equals the 238.18 net tax capacity of the added real property as most recently 238.19 certified by the commissioner of revenue as of the date of 238.20 modification of the tax increment financing plan pursuant to 238.21 section 469.175, subdivision 4. 238.22 (d) For districts approved under section 469.175, 238.23 subdivision 3, or parcels added to existing districts after May 238.24 1, 1988, if the net tax capacity of a property increases because 238.25 the property no longer qualifies under the Minnesota 238.26 Agricultural Property Tax Law, section 273.111; the Minnesota 238.27 Open Space Property Tax Law, section 273.112; or the 238.28 Metropolitan Agricultural Preserves Act, chapter 473H, or 238.29 because platted, unimproved property is improved or three years 238.30 pass after approval of the plat under section 273.11, 238.31 subdivision 1, the increase in net tax capacity must be added to 238.32 the original net tax capacity. 238.33 (e) The amount to be subtracted from the original net tax 238.34 capacity of the district as a result of previously taxable real 238.35 property within the district becoming tax exempt, or a reduction 238.36 in the geographic area of the district, shall be the amount of 239.1 original net tax capacity initially attributed to the property 239.2 becoming tax exempt or being removed from the district. If the 239.3 net tax capacity of property located within the tax increment 239.4 financing district is reduced by reason of a court-ordered 239.5 abatement, stipulation agreement, voluntary abatement made by 239.6 the assessor or auditor or by order of the commissioner of 239.7 revenue, the reduction shall be applied to the original net tax 239.8 capacity of the district when the property upon which the 239.9 abatement is made has not been improved since the date of 239.10 certification of the district and to the captured net tax 239.11 capacity of the district in each year thereafter when the 239.12 abatement relates to improvements made after the date of 239.13 certification. The county auditor may specify reasonable form 239.14 and content of the request for certification of the authority 239.15 and any modification thereof pursuant to section 469.175, 239.16 subdivision 4. 239.17 (f) If a parcel of property contained a substandard 239.18 building that was demolished or removed and if the authority 239.19 elects to treat the parcel as occupied by a substandard building 239.20 under section 469.174, subdivision 10, paragraph (b), the 239.21 auditor shall certify the original net tax capacity of the 239.22 parcel using the greater of (1) the current net tax capacity of 239.23 the parcel, or (2) the estimated market value of the parcel for 239.24 the year in which the building was demolished or removed, but 239.25 applying the class rates for the current year. 239.26 [EFFECTIVE DATE.] This section is effective for parcels 239.27 that become taxable after June 30, 2001, and applies to tax 239.28 increment financing districts, regardless of when the request 239.29 for certification was made. 239.30 Sec. 16. Minnesota Statutes 2000, section 469.178, is 239.31 amended by adding a subdivision to read: 239.32 Subd. 7. [INTERFUND LOANS.] The authority or municipality 239.33 may advance or loan money to finance expenditures under section 239.34 469.176, subdivision 4, from its general fund or any other fund 239.35 under which it has legal authority to do so. The loan or 239.36 advance must be approved, by resolution of the governing body, 240.1 before money is transferred, advanced, or spent, whichever is 240.2 earliest. The terms and conditions for repayment of the loan 240.3 must be provided in writing and include, at a minimum, the 240.4 principal amount, the interest rate, and maximum term. The 240.5 maximum rate of interest permitted to be charged is limited to 240.6 the greater of the rates specified under section 270.75 or 240.7 549.09. 240.8 [EFFECTIVE DATE.] This section is effective for loans and 240.9 advances made after June 30, 2001. Interfund loans and advances 240.10 made before July 1, 2001, are ratified and approved, subject to 240.11 the following restrictions: (1) the interest accrued or paid 240.12 after June 30, 2001, may not exceed the limit in this section 240.13 and (2) if there is no resolution or other document created 240.14 contemporaneously with the making of the loan or advance that 240.15 specifies the principal amount of the loan or advance, the 240.16 principal amount of the loan or advance is limited to a maximum 240.17 amount equal to the largest negative cash balance that existed 240.18 at any time in the fund that received the undocumented loan or 240.19 advance. An authority or municipality may modify the terms of 240.20 an interfund loan or advance made before July 1, 2001, to comply 240.21 with any of the requirements of this section as the authority or 240.22 municipality deems appropriate. 240.23 Sec. 17. Minnesota Statutes 2000, section 469.1812, 240.24 subdivision 2, is amended to read: 240.25 Subd. 2. [GOVERNING BODY.] "Governing body" means, for a 240.26 city, the city council; for a school district, the school board; 240.27 for a county, the county board; and for a town, theannual240.28meeting of the townboard of supervisors. 240.29 [EFFECTIVE DATE.] This section is effective retroactive to 240.30 May 26, 1999. 240.31 Sec. 18. Minnesota Statutes 2000, section 469.1813, 240.32 subdivision 6, is amended to read: 240.33 Subd. 6. [DURATION LIMIT.] (a) A political subdivision may 240.34 grant an abatement for a period no longer than ten years, except 240.35 as provided under paragraph (b). The subdivision may specify in 240.36 the abatement resolution a shorter duration. If the resolution 241.1 does not specify a period of time, the abatement is for eight 241.2 years. If an abatement has been granted to a parcel of property 241.3 and the period of the abatement has expired, the political 241.4 subdivision that granted the abatement may not grant another 241.5 abatement for eight years after the expiration of the first 241.6 abatement. This prohibition does not apply to improvements 241.7 added after and not subject to the first abatement. 241.8 (b) A political subdivision proposing to abate taxes for a 241.9 parcel may request, in writing, that the other political 241.10 subdivisions in which the parcel is located grant an abatement 241.11 for the property. If one of the other political subdivisions 241.12 declines, in writing, to grant an abatement or if 90 days pass 241.13 after receipt of the request to grant an abatement without a 241.14 written response from one of the political subdivisions, the 241.15 duration limit for an abatement for the parcel by the requesting 241.16 political subdivision and any other participating political 241.17 subdivision is increased to 15 years. If the political 241.18 subdivision which declined to grant an abatement later grants an 241.19 abatement for the parcel, the 15-year duration limit is reduced 241.20 by one year for each year that the declining political 241.21 subdivision grants an abatement for the parcel during the period 241.22 of the abatement granted by the requesting political 241.23 subdivision. The duration limit may not be reduced below the 241.24 limit under paragraph (a). 241.25 [EFFECTIVE DATE.] This section is effective for abatements 241.26 approved after the day following final enactment. 241.27 Sec. 19. Minnesota Statutes 2000, section 475.58, 241.28 subdivision 1, as amended by Laws 2001, chapter 214, section 43, 241.29 is amended to read: 241.30 Subdivision 1. [APPROVAL BY ELECTORS; EXCEPTIONS.] 241.31 Obligations authorized by law or charter may be issued by any 241.32 municipality upon obtaining the approval of a majority of the 241.33 electors voting on the question of issuing the obligations, but 241.34 an election shall not be required to authorize obligations 241.35 issued: 241.36 (1) to pay any unpaid judgment against the municipality; 242.1 (2) for refunding obligations; 242.2 (3) for an improvement or improvement program, which 242.3 obligation is payable wholly or partly from the proceeds of 242.4 special assessments levied upon property specially benefited by 242.5 the improvement or by an improvement within the improvement 242.6 program, or of taxes levied upon the increased value of property 242.7 within a district for the development of which the improvement 242.8 is undertaken, including obligations which are the general 242.9 obligations of the municipality, if the municipality is entitled 242.10 to reimbursement in whole or in part from the proceeds of such 242.11 special assessments or taxes and not less than 20 percent of the 242.12 cost of the improvement or the improvement program is to be 242.13 assessed against benefited property or is to be paid from the 242.14 proceeds of federal grant funds or a combination thereof, or is 242.15 estimated to be received from such taxes within the district; 242.16 (4) payable wholly from the income of revenue producing 242.17 conveniences; 242.18 (5) under the provisions of a home rule charter which 242.19 permits the issuance of obligations of the municipality without 242.20 election; 242.21 (6) under the provisions of a law which permits the 242.22 issuance of obligations of a municipality without an election; 242.23 (7) to fund pension or retirement fund liabilities pursuant 242.24 to section 475.52, subdivision 6; 242.25 (8) under a capital improvement plan under section 373.40; 242.26 and 242.27 (9) under sections 469.1813 to 469.1815 (property tax 242.28 abatement authority bonds), if the proceeds of the bonds are not 242.29 used for a purpose prohibited under section 469.176, subdivision 242.30 4g, paragraph (b). 242.31 [EFFECTIVE DATE.] This section is effective for bonds 242.32 issued or sold after the day following final enactment. 242.33 Sec. 20. Laws 2000, chapter 490, article 11, section 26, 242.34 the effective date, is amended to read: 242.35 EFFECTIVE DATE: This section is effective for increments 242.36 spent after July 1, 2000, from districts for which certification 243.1 was requested afterMay 1, 1990June 30, 1982. 243.2 [EFFECTIVE DATE.] This section is effective the day 243.3 following final enactment. 243.4 Sec. 21. [HOLLMAN DECREE HOUSING.] 243.5 To implement a federal court order or decree relating to 243.6 the provision of low-rent public housing finance, in whole or in 243.7 part, with federal financial assistance under section 5 of the 243.8 United States Housing Act, or any successor legislation, the 243.9 Minneapolis public housing authority or the metropolitan 243.10 council, acting under the powers of Minnesota Statutes, sections 243.11 469.001 to 469.047, may enter a cooperation agreement with the 243.12 governing body of any municipality or county within the 243.13 metropolitan area, as defined in Minnesota Statutes, section 243.14 473.121, subdivision 2, to provide exemption from all real and 243.15 personal taxes levied or imposed by the state, city, county, or 243.16 other political subdivision, for which the Minneapolis public 243.17 housing authority or the metropolitan council shall make, or 243.18 cause to be made, payments in lieu of taxes as provided under 243.19 Minnesota Statutes, section 469.040. This exemption and 243.20 obligation to make payments in lieu of taxes continues until the 243.21 housing is no longer subject to the provisions of section 5 of 243.22 the United States Housing Act, or any successor legislation. 243.23 [EFFECTIVE DATE.] This section is effective with respect to 243.24 any cooperation agreement entered into on or after November 1, 243.25 1997. Any owner of low-rent public housing acquired and 243.26 renovated or constructed under a cooperation agreement under 243.27 this section may apply for abatement of the real or personal 243.28 property taxes under Minnesota Statutes, section 375.192, 243.29 notwithstanding the time limitation for filing application under 243.30 section 375.192. This section applies in counties of Anoka, 243.31 Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 243.32 Sec. 22. [CITY OF LUVERNE.] 243.33 Subdivision 1. [AUTHORIZATION.] The governing body of the 243.34 city of Luverne may designate between one and three areas of the 243.35 city as border city development zones. The total area of the 243.36 zones may not exceed 100 acres. 244.1 Subd. 2. [APPLICATION OF GENERAL LAW.] (a) The provisions 244.2 of Minnesota Statutes, sections 469.1731 to 469.1735, apply to 244.3 the border city development zones designated under this section. 244.4 The governing body of the city may exercise the powers granted 244.5 under Minnesota Statutes, sections 469.1731 to 469.1735, 244.6 including powers that apply outside of the zones. 244.7 (b) The allocation under subdivision 3 for purposes of 244.8 Minnesota Statutes, section 469.1735, subdivision 2, and the 244.9 necessary amount of the allocation is appropriated to the 244.10 commissioner of revenue. 244.11 Subd. 3. [ALLOCATION OF STATE TAX REDUCTIONS.] (a) The 244.12 cumulative total amount of tax reductions for all years of the 244.13 program under Minnesota Statutes, sections 469.1731 to 469.1735, 244.14 is limited to $175,000. 244.15 (b) This allocation may be used for tax reductions provided 244.16 in Minnesota Statutes, section 469.1732 or 469.1734, or for 244.17 reimbursements under Minnesota Statutes, section 469.1735, 244.18 subdivision 3, but only if the governing body of the city of 244.19 Luverne determines that the tax reduction or offset is necessary 244.20 to enable a business to expand within a city or to attract a 244.21 business to the city. 244.22 (c) The commissioner of revenue may waive the limit under 244.23 this subdivision using the same rules and standards provided in 244.24 Minnesota Statutes, section 469.169, subdivision 12, paragraph 244.25 (b). 244.26 Subd. 4. [EFFECTIVE DATE.] This section is effective upon 244.27 compliance by the governing body of the city of Luverne with the 244.28 requirements of Minnesota Statutes, section 645.021. 244.29 ARTICLE 7 244.30 SUSTAINABLE FOREST INCENTIVE ACT 244.31 Section 1. Minnesota Statutes 2000, section 88.49, 244.32 subdivision 5, is amended to read: 244.33 Subd. 5. [CANCELLATION.] Upon the failure of the owner 244.34 faithfully to fulfill and perform such contract or any provision 244.35 thereof, or any requirement of sections 88.47 to 88.53, or any 244.36 rule adopted by the commissioner thereunder, the commissioner 245.1 may cancel the contract in the manner herein provided. The 245.2 commissioner shall give to the owner, in the manner prescribed 245.3 in section 88.48, subdivision 4, 60 days' notice of a hearing 245.4 thereon at which the owner may appear and show cause, if any, 245.5 why the contract should not be canceled. The commissioner shall 245.6 thereupon determine whether the contract should be canceled and 245.7 make an order to that effect. Notice of the commissioner's 245.8 determination and the making of the order shall be given to the 245.9 owner in the manner provided in section 88.48, subdivision 4. 245.10 On determining that the contract should be canceled and no 245.11 appeal therefrom be taken, the commissioner shall send notice 245.12 thereof to the auditor of the county and to the town clerk of 245.13 the town affected and file with the recorder a certified copy of 245.14 the order, who shall forthwith note the cancellation upon the 245.15 record thereof, and thereupon the land therein described shall 245.16 cease to be an auxiliary forest and, together with the timber 245.17 thereon, become liable to all taxes and assessments that 245.18 otherwise would have been levied against it had it never been an 245.19 auxiliary forest from the time of the making of the contract, 245.20 any provisions of the statutes of limitation to the contrary 245.21 notwithstanding, less the amount of taxes paid under the 245.22 provisions of section 88.51, subdivision 1, together with 245.23 interest on such taxes and assessments at six percent per annum, 245.24 but without penalties. 245.25 The commissioner may in like manner and with like effect 245.26 cancel the contract upon written application of the owner. 245.27 The commissioner shall cancel any contract if the owner has 245.28 made successful application under sections270.31 to 270.39245.29inclusive290C.01 to 290C.11, theMinnesota Tree Growth Tax Law245.30 Sustainable Forest Incentive Act, and has paid to the county 245.31 treasurer the difference between the amount which would have 245.32 been paid had the land under contract been subject to the 245.33 Minnesota Tree Growth Tax Law and the Sustainable Forest 245.34 Incentive Act from the date of the filing of the contract and 245.35 the amount actually paid under section 88.51, subdivisions 1 and 245.36 2. This tax difference must be calculated based on the years 246.1 the lands would have been taxed under the Tree Growth Tax Law 246.2 and the Sustainable Forest Incentive Act. The sustainable 246.3 forest tax difference is net of the incentive payment of section 246.4 290C.07. If the amount which would have been paid, had the land 246.5 under contract been under the Minnesota Tree Growth Tax Law and 246.6 the Sustainable Forest Incentive Act from the date of the filing 246.7 of the contract, is less than the amount actually paid under the 246.8 contract, the cancellation shall be made without further payment 246.9 by the owner. 246.10 When the execution of any contract creating an auxiliary 246.11 forest shall have been procured through fraud or deception 246.12 practiced upon the county board or the commissioner or any other 246.13 person or body representing the state, it may be canceled upon 246.14 suit brought by the attorney general at the direction of the 246.15 commissioner. This cancellation shall have the same effect as 246.16 the cancellation of a contract by the commissioner. 246.17 Sec. 2. Minnesota Statutes 2000, section 88.49, 246.18 subdivision 9a, is amended to read: 246.19 Subd. 9a. [LAND TRADES WITH GOVERNMENTAL UNITS.] 246.20 Notwithstanding subdivisions 6 and 9, or section 88.491, 246.21 subdivision 2, if an owner trades land under auxiliary forest 246.22 contract for land owned by a governmental unit and the owner 246.23 agrees to use the land received in trade from the governmental 246.24 unit for the production of forest products, upon resolution of 246.25 the county board, no taxes and assessments shall be levied 246.26 against the land traded, except that any current or delinquent 246.27 annual taxes or yield taxes due on that land while it was under 246.28 the auxiliary forest provision must be paid prior to the land 246.29 exchange. The land received from the governmental unit in the 246.30 land trade automatically qualifies for inclusion in theTree246.31Growth Tax LawSustainable Forest Incentive Act. 246.32 Sec. 3. Minnesota Statutes 2000, section 88.491, 246.33 subdivision 2, is amended to read: 246.34 Subd. 2. [EFFECT OF EXPIRED CONTRACT.] When auxiliary 246.35 forest contracts expire, or prior to expiration by mutual 246.36 agreement between the land owner and the appropriate county 247.1 office, the lands previously covered by an auxiliary forest 247.2 contract automatically qualify for inclusionin the Tree Growth247.3Tax Lawunder the provisions of the Sustainable Forest Incentive 247.4 Act; provided that when such lands are included in theTree247.5Growth Tax LawSustainable Forest Incentive Act prior to 247.6 expiration of the auxiliary forest contract they will be 247.7 transferred and a tax paid as provided inaccordance with the247.8provisions ofsection 88.49, subdivision 5, upon application and 247.9 inclusion in the sustainable forest incentive program. The land 247.10 owner shall pay taxes in an amount equal to the difference 247.11 between: 247.12 (1) the sum of: 247.13 (i) the amount which would have been paid from the date of 247.14 the filing of the contract had the land under contract been 247.15 subject to the Minnesota Tree Growth Tax Lawfrom the date of247.16the filing of the contract and; plus 247.17 (ii) beginning with taxes payable in 2003, the taxes that 247.18 would have been paid if the land had been enrolled in the 247.19 sustainable forest incentive program; and 247.20 (2) the amount actually paid under section 88.51, 247.21 subdivisions 1 and 2. 247.22 Sec. 4. Minnesota Statutes 2000, section 270A.03, 247.23 subdivision 7, is amended to read: 247.24 Subd. 7. [REFUND.] "Refund" means an individual income tax 247.25 refund or political contribution refund, pursuant to chapter 247.26 290, or a property tax credit or refund, pursuant to chapter 247.27 290A, or a sustainable forest tax payment to a claimant under 247.28 chapter 290C. 247.29 For purposes of this chapter, lottery prizes, as set forth 247.30 in section 349A.08, subdivision 8, and amounts granted to 247.31 persons by the legislature on the recommendation of the joint 247.32 senate-house of representatives subcommittee on claims shall be 247.33 treated as refunds. 247.34 In the case of a joint property tax refund payable to 247.35 spouses under chapter 290A, the refund shall be considered as 247.36 belonging to each spouse in the proportion of the total refund 248.1 that equals each spouse's proportion of the total income 248.2 determined under section 290A.03, subdivision 3. In the case of 248.3 a joint income tax refund under chapter 289A, the refund shall 248.4 be considered as belonging to each spouse in the proportion of 248.5 the total refund that equals each spouse's proportion of the 248.6 total taxable income determined under section 290.01, 248.7 subdivision 29. The commissioner shall remit the entire refund 248.8 to the claimant agency, which shall, upon the request of the 248.9 spouse who does not owe the debt, determine the amount of the 248.10 refund belonging to that spouse and refund the amount to that 248.11 spouse. For court fines, fees, and surcharges and court-ordered 248.12 restitution under section 611A.04, subdivision 2, the notice 248.13 provided by the commissioner of revenue under section 270A.07, 248.14 subdivision 2, paragraph (b), serves as the appropriate legal 248.15 notice to the spouse who does not owe the debt. 248.16 [EFFECTIVE DATE.] This section is effective for refunds in 248.17 2003 and thereafter. 248.18 Sec. 5. [290C.01] [PURPOSE.] 248.19 It is the policy of this state to promote sustainable 248.20 forest resource management on the state's public and private 248.21 lands. Recognizing that private forests comprise approximately 248.22 one-half of the state forest land resources, that healthy and 248.23 robust forest land provides significant benefits to the state of 248.24 Minnesota, and that ad valorem property taxes represent a 248.25 significant annual cost that can discourage long-term forest 248.26 management investments, this chapter, hereafter referred to as 248.27 the "Sustainable Forest Incentive Act," is enacted to encourage 248.28 the state's private forest landowners to make a long-term 248.29 commitment to sustainable forest management. 248.30 [EFFECTIVE DATE.] This section is effective for taxes 248.31 levied in 2002, payable in 2003, and thereafter. 248.32 Sec. 6. [290C.02] [DEFINITIONS.] 248.33 Subdivision 1. [APPLICATION.] When used in sections 248.34 290C.01 to 290C.11, the terms in this section have the meanings 248.35 given them. 248.36 Subd. 2. [APPROVED PLAN WRITERS.] "Approved plan writers" 249.1 are natural resource professionals who are self-employed, 249.2 employed by private companies or individuals, nonprofit 249.3 organizations, local units of government, or public agencies, 249.4 and who are approved by the commissioner of natural resources. 249.5 Persons determined to be certified foresters by the Society of 249.6 American Foresters shall be deemed to meet the standards 249.7 required under this subdivision. The commissioner of natural 249.8 resources shall issue a unique identification number to each 249.9 approved planner. 249.10 Subd. 3. [CLAIMANT.] "Claimant" means a person, as that 249.11 term is defined in section 290.01, subdivision 2, who owns 249.12 forest land in Minnesota and files an application authorized by 249.13 the Sustainable Forest Incentive Act. No more than one claimant 249.14 is entitled to a payment under this chapter with respect to any 249.15 tract, parcel, or piece of land enrolled under this chapter. 249.16 When enrolled forest land is owned by two or more persons, the 249.17 owners must determine between them which person may claim the 249.18 payments provided under sections 290C.01 to 290C.11. 249.19 Subd. 4. [COMMISSIONER.] "Commissioner" means the 249.20 commissioner of revenue. 249.21 Subd. 5. [CURRENT USE VALUE.] "Current use value" means 249.22 the statewide average annual income per acre, multiplied by 90 249.23 percent and divided by the capitalization rate determined under 249.24 subdivision 9. The statewide net annual income shall be a 249.25 weighted average based on the most recent data as of July 1 of 249.26 the computation year on stumpage prices and annual tree growth 249.27 rates and acreage by cover type provided by the department of 249.28 natural resources and the United States Department of 249.29 Agriculture Forest Service North Central Research Station. 249.30 Subd. 6. [FOREST LAND.] "Forest land" means land 249.31 containing a minimum of 20 contiguous acres for which the owner 249.32 has implemented a forest management plan that was prepared or 249.33 updated within the past ten years by an approved plan writer. 249.34 For purposes of this subdivision, acres are considered to be 249.35 contiguous even if they are separated by a road, waterway, 249.36 railroad track, or other similar intervening property. At least 250.1 50 percent of the contiguous acreage must meet the definition of 250.2 forest land in section 88.01, subdivision 7. For the purposes 250.3 of sections 290C.01 to 209C.11, forest land does not include (i) 250.4 land used for residential or agricultural purposes, (ii) land 250.5 enrolled in the reinvest in Minnesota program, a state or 250.6 federal conservation reserve or easement reserve program under 250.7 sections 103F.501 to 103F.531, the Minnesota agricultural 250.8 property tax law under section 273.111, or land subject to 250.9 agricultural land preservation controls or restrictions as 250.10 defined in section 40A.02 or under the Metropolitan Agricultural 250.11 Preserves Act under chapter 473H, or (iii) land improved with a 250.12 structure, pavement, sewer, campsite, or any road, other than a 250.13 township road, used for purposes not prescribed in the forest 250.14 management plan. 250.15 Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management plan" 250.16 means a written document providing a framework for site-specific 250.17 healthy, productive, and sustainable forest resources. A forest 250.18 management plan must include at least the following: (i) 250.19 owner-specific forest management goals for the property 250.20 including, when available, goals for individual cover types; 250.21 (ii) a reliable field inventory of the individual forest cover 250.22 types, their age, and density; (iii) a description of the soil 250.23 type and quality; (iv) an aerial photo and/or map of the 250.24 vegetation and other natural features of the property clearly 250.25 indicating the boundaries of the property and of the forest 250.26 land; (v) the proposed future conditions of the property; (vi) 250.27 prescriptions to meet proposed future conditions of the 250.28 property; (vii) a recommended timetable for implementing the 250.29 prescribed activities; and (viii) a legal description of the 250.30 parcels encompassing the parcels included in the plan. All 250.31 management activities prescribed in a plan must be in accordance 250.32 with the recommended timber harvesting and forest management 250.33 guidelines. The commissioner of natural resources shall provide 250.34 a framework for plan content and updating and revising plans. 250.35 Subd. 8. [TIMBER HARVESTING AND FOREST MANAGEMENT 250.36 GUIDELINES.] "Timber harvesting and forest management guidelines" 251.1 means guidelines developed under section 89A.05 and adopted by 251.2 the Minnesota forest resources council in 1998. 251.3 Subd. 9. [CAPITALIZATION RATE.] By July 1 of each year, 251.4 the commissioner shall determine a statewide capitalization rate 251.5 for use under this chapter. The rate shall be the average 251.6 annual effective interest rate for St. Paul on new loans under 251.7 the Farm Credit Bank system calculated under section 251.8 2032A(e)(7)(A) of the Internal Revenue Code. 251.9 [EFFECTIVE DATE.] This section is effective for taxes 251.10 levied in 2002, payable in 2003, and thereafter. 251.11 Sec. 7. [290C.03] [ELIGIBILITY REQUIREMENTS.] 251.12 (a) Property may be enrolled in the sustainable forest 251.13 incentive program under this chapter if all of the following 251.14 conditions are met: 251.15 (1) property consists of at least 20 contiguous acres and 251.16 at least 50 percent of the land must meet the definition of 251.17 forest land in section 88.01, subdivision 7, during the 251.18 enrollment; 251.19 (2) a forest management plan for the property must be 251.20 prepared by an approved plan writer and implemented during the 251.21 period in which the land is enrolled; 251.22 (3) timber harvesting and forest management guidelines must 251.23 be used in conjunction with any timber harvesting or forest 251.24 management activities conducted on the land during the period in 251.25 which the land is enrolled; 251.26 (4) the property must be enrolled for a minimum of eight 251.27 years; 251.28 (5) there are no delinquent property taxes on the property; 251.29 and 251.30 (6) claimants enrolling more than 1,920 acres in the 251.31 sustainable forest incentive program must allow year-round, 251.32 nonmotorized access to fish and wildlife resources on enrolled 251.33 land except within one-fourth mile of a permanent dwelling or 251.34 during periods of high fire hazard as determined by the 251.35 commissioner of natural resources. 251.36 (b) Claimants required to allow access under paragraph (a), 252.1 clause (6), do not by that action: 252.2 (1) extend any assurance that the land is safe for any 252.3 purpose; 252.4 (2) confer upon the person the legal status of an invitee 252.5 or licensee to whom a duty of care is owed; or 252.6 (3) assume responsibility for or incur liability for any 252.7 injury to the person or property caused by an act or omission of 252.8 the person. 252.9 [EFFECTIVE DATE.] This section is effective for taxes 252.10 levied in 2002, payable in 2003, and thereafter. 252.11 Sec. 8. [290C.04] [APPLICATIONS.] 252.12 (a) A landowner may apply to enroll forest land for the 252.13 sustainable forest incentive program under this chapter. The 252.14 claimant must complete, sign, and submit an application to the 252.15 commissioner by September 30 in order for the land to become 252.16 eligible beginning in the next year. The application shall be 252.17 on a form prescribed by the commissioner and must include the 252.18 information the commissioner deems necessary. At a minimum, the 252.19 application must show the following information for the land and 252.20 the claimant: (i) the claimant's social security number or 252.21 state or federal business tax registration number and date of 252.22 birth, (ii) the claimant's address, (iii) the claimant's 252.23 signature, (iv) the county's parcel identification numbers for 252.24 the tax parcels that completely contain the claimant's forest 252.25 land that is sought to be enrolled, (v) the number of acres 252.26 eligible for enrollment in the program, (vi) the approved plan 252.27 writer's signature and identification number, and (vii) proof, 252.28 in a form specified by the commissioner, that the claimant has 252.29 executed and acknowledged in the manner required by law for a 252.30 deed, and recorded, a covenant that the land is not and shall 252.31 not be developed in a manner inconsistent with the requirements 252.32 and conditions of this chapter. The covenant shall state in 252.33 writing that the covenant is binding on the claimant and the 252.34 claimant's successor or assignee, and that it runs with the land 252.35 for a period of not less than eight years. The commissioner 252.36 shall specify the form of the covenant and provide copies upon 253.1 request. The covenant must include a legal description that 253.2 encompasses all the forest land that the claimant wishes to 253.3 enroll under this section or the certificate of title number for 253.4 that land if it is registered land. 253.5 (b) In all cases, the commissioner shall notify the 253.6 claimant within 90 days after receipt of a completed application 253.7 that either the land has or has not been approved for enrollment. 253.8 The claimant for which the application is denied may, within 60 253.9 days of receipt of a notice of denial, appeal the denial to the 253.10 commissioner. 253.11 (c) Within 45 days after the denial of an application, or 253.12 within 45 days after the denial of an appeal, the commissioner 253.13 shall execute and acknowledge a document releasing the land from 253.14 the covenant required under this chapter. The document must be 253.15 mailed to the claimant and is entitled to be recorded. 253.16 (d) The social security numbers collected from individuals 253.17 under this section are private data as provided in section 13.49. 253.18 The state or federal business tax registration number and date 253.19 of birth data collected under this section are also private data 253.20 but may be shared with county assessors for purposes of tax 253.21 administration and with county treasurers for purposes of the 253.22 revenue recapture under chapter 270A. 253.23 [EFFECTIVE DATE.] This section is effective for taxes 253.24 levied in 2002, payable in 2003, and thereafter. 253.25 Sec. 9. [290C.05] [ANNUAL CERTIFICATION.] 253.26 On or before July 1 of each year, beginning with the year 253.27 after the claimant has received an approved application, the 253.28 commissioner shall send each claimant enrolled under the 253.29 sustainable forest incentive program a certification form. The 253.30 claimant must sign the certification, attesting that the 253.31 requirements and conditions for continued enrollment in the 253.32 program are currently being met, and must return the signed 253.33 certification form to the commissioner by August 15 of that same 253.34 year. Failure to return an annual certification form by the due 253.35 date shall result in removal of the lands from the provisions of 253.36 the sustainable forest incentive program, and the imposition of 254.1 any applicable removal penalty. The claimant may appeal the 254.2 removal and any associated penalty according to the procedures 254.3 and within the time allowed under this chapter. 254.4 [EFFECTIVE DATE.] This section is effective for taxes 254.5 levied in 2002, payable in 2003, and thereafter. 254.6 Sec. 10. [290C.06] [CALCULATION OF AVERAGE ESTIMATED 254.7 MARKET VALUE; TIMBERLAND.] 254.8 The commissioner shall annually calculate a statewide 254.9 average estimated market value per acre for class 2b timberland 254.10 under section 273.13, subdivision 23, paragraph (b). 254.11 [EFFECTIVE DATE.] This section is effective for taxes 254.12 levied in 2002, payable in 2003, and thereafter. 254.13 Sec. 11. [290C.07] [CALCULATION OF INCENTIVE PAYMENT.] 254.14 An approved claimant under the sustainable forest incentive 254.15 program is eligible to receive an annual payment. The payment 254.16 shall equal the greater of: 254.17 (1) the difference between the property tax that would be 254.18 paid on the property using the previous year's statewide average 254.19 total township tax rate and the class rate for class 2b 254.20 timberland under section 273.13, subdivision 23, paragraph (b), 254.21 if the property were valued at (i) the average statewide 254.22 timberland market value per acre calculated under section 254.23 290C.06, and (ii) the average statewide timberland current use 254.24 value per acre calculated under section 290C.02, subdivision 5; 254.25 (2) two-thirds of the property tax amount determined by 254.26 using the previous year's statewide average total township tax 254.27 rate, the estimated market value per acre as calculated in 254.28 section 290C.06, and the class rate for 2b timberland under 254.29 section 273.13, subdivision 23, paragraph (b); or 254.30 (3) $1.50 per acre for each acre enrolled in the 254.31 sustainable forest incentive program. 254.32 [EFFECTIVE DATE.] This section is effective for taxes 254.33 levied in 2002, payable in 2003, and thereafter. 254.34 Sec. 12. [290C.08] [ANNUAL INCENTIVE PAYMENT; 254.35 APPROPRIATION.] 254.36 Subdivision 1. [ANNUAL PAYMENT.] An incentive payment for 255.1 each acre of enrolled land will be made annually to each 255.2 claimant in the amount determined under section 290C.07. The 255.3 incentive payment shall be paid on or before October 1 each year 255.4 based on the certifications due August 15 of that year. 255.5 Interest at the annual rate determined under section 270.75 255.6 shall be included with any incentive payment not paid by the 255.7 later of October 1 of the year the certification was due, or 45 255.8 days after the completed certification was returned or filed if 255.9 the commissioner accepts a certification filed after August 15 255.10 of the taxes payable year as the resolution of an appeal. 255.11 Subd. 2. [APPROPRIATION.] The amount necessary to make the 255.12 payments under this section is annually appropriated to the 255.13 commissioner from the general fund. 255.14 [EFFECTIVE DATE.] This section is effective for taxes 255.15 levied in 2002, payable in 2003, and thereafter. 255.16 Sec. 13. [290C.09] [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 255.17 The commissioner shall immediately remove any property 255.18 enrolled in the sustainable forest incentive program for which 255.19 taxes are determined to be delinquent as provided in chapter 279 255.20 and shall notify the claimant of such action. Lands terminated 255.21 from the sustainable forest incentive program under this section 255.22 are not entitled to any payments provided in this chapter and 255.23 are subject to removal penalties prescribed in section 290C.11. 255.24 The claimant has 90 days from the receipt of notice from the 255.25 commissioner under this section to pay the delinquent taxes. If 255.26 the delinquent taxes are paid within this 90-day period, the 255.27 lands shall be reinstated in the program as if they had not been 255.28 withdrawn and without the payment of a penalty. 255.29 [EFFECTIVE DATE.] This section is effective for taxes 255.30 levied in 2002, payable in 2003, and thereafter. 255.31 Sec. 14. [290C.10] [WITHDRAWAL PROCEDURES.] 255.32 An approved claimant under the sustainable forest incentive 255.33 program for a minimum of four years may notify the commissioner 255.34 of the intent to terminate enrollment. Within 90 days of 255.35 receipt of notice to terminate enrollment, the commissioner 255.36 shall inform the claimant in writing, acknowledging receipt of 256.1 this notice and indicating the effective date of termination 256.2 from the sustainable forest incentive program. Termination of 256.3 enrollment in the sustainable forest incentive program occurs on 256.4 January 1 of the fifth calendar year that begins after receipt 256.5 by the commissioner of the termination notice. After the 256.6 commissioner issues an effective date of termination, a claimant 256.7 wishing to continue the property's enrollment in the sustainable 256.8 forest incentive program beyond the termination date must apply 256.9 for enrollment as prescribed in section 290C.04. A claimant who 256.10 withdraws a parcel of land from this program may not reenroll 256.11 the parcel for a period of three years. Within 45 days after 256.12 the termination date, the commissioner shall execute and 256.13 acknowledge a document releasing the land from the covenant 256.14 required under this chapter. The document must be mailed to the 256.15 claimant and is entitled to be recorded. The commissioner may 256.16 allow early withdrawal from the Sustainable Forest Incentive Act 256.17 without penalty in cases of condemnation for a public purpose 256.18 notwithstanding the provisions of this section. 256.19 [EFFECTIVE DATE.] This section is effective for taxes 256.20 levied in 2002, payable in 2003, and thereafter. 256.21 Sec. 15. [290C.11] [PENALTIES FOR REMOVAL.] 256.22 (a) If the commissioner determines that property enrolled 256.23 in the sustainable forest incentive program is in violation of 256.24 the conditions for enrollment as specified in section 290C.03, 256.25 the commissioner shall notify the claimant of the intent to 256.26 remove all enrolled land from the sustainable forest incentive 256.27 program. The claimant has 90 days to appeal this determination. 256.28 The appeal must be made in writing to the commissioner, who 256.29 shall, within 60 days, notify the claimant as to the outcome of 256.30 the appeal. Within 60 days after the commissioner denies an 256.31 appeal, or within 120 days after the commissioner received a 256.32 written appeal if the commissioner has not made a determination 256.33 in that time, the owner may appeal to tax court under chapter 256.34 271 as if the appeal is from an order of the commissioner. 256.35 (b) If the commissioner determines the property is to be 256.36 removed from the sustainable forest incentive program, the 257.1 claimant is liable for payment to the commissioner in the amount 257.2 equal to the payments received under this chapter for the 257.3 previous four-year period, plus interest. The claimant has 90 257.4 days to satisfy the payment for removal of land from the 257.5 sustainable forest incentive program under this section. If the 257.6 penalty is not paid within the 90-day period under paragraph 257.7 (a), the commissioner shall certify the amount to the county 257.8 auditor for collection as a part of the general ad valorem real 257.9 property taxes on the land in the following taxes payable year. 257.10 [EFFECTIVE DATE.] This section is effective for taxes 257.11 levied in 2002, payable in 2003, and thereafter. 257.12 Sec. 16. [REPEALER.] 257.13 Minnesota Statutes 2000, sections 270.31; 270.32; 270.33; 257.14 270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are repealed. 257.15 [EFFECTIVE DATE.] This section is effective for taxes 257.16 levied in 2002, payable in 2003, and thereafter. 257.17 ARTICLE 8 257.18 CIVIL AND CRIMINAL PENALTIES 257.19 Section 1. Minnesota Statutes 2000, section 289A.55, 257.20 subdivision 9, is amended to read: 257.21 Subd. 9. [INTEREST ON PENALTIES.] (a) A penalty imposed 257.22 under section 289A.60, subdivision 1, 2,3,2a, 4, 5, 6, or 21 257.23 bears interest from the date the return or payment was required 257.24 to be filed or paid, including any extensions, to the date of 257.25 payment of the penalty. 257.26 (b) A penalty not included in paragraph (a) bears interest 257.27 only if it is not paid within 60 days from the date of notice. 257.28 In that case interest is imposed from the date of notice to the 257.29 date of payment. 257.30 [EFFECTIVE DATE.] This section is effective for tax years 257.31 beginning after December 31, 2000, and for estate tax returns 257.32 due after January 1, 2002. 257.33 Sec. 2. Minnesota Statutes 2000, section 289A.60, 257.34 subdivision 1, is amended to read: 257.35 Subdivision 1. [PENALTY FOR FAILURE TO PAY TAX.] (a)If a257.36tax other than a withholding or sales or use tax is not paid258.1within the time specified for payment, a penalty must be added258.2to the amount required to be shown as tax. The penalty is three258.3percent of the tax not paid on or before the date specified for258.4payment of the tax if the failure is for not more than 30 days,258.5with an additional penalty of three percent of the amount of tax258.6remaining unpaid during each additional 30 days or fraction of258.730 days during which the failure continues, not exceeding 24258.8percent in the aggregate.If a corporate franchise, fiduciary 258.9 income, mining company, estate, partnership, S corporation, or 258.10 nonresident entertainer tax is not paid within the time 258.11 specified for payment, a penalty of six percent is added to the 258.12 unpaid tax, except that if a corporation or mining company meets 258.13 the requirements of section 289A.19, subdivision 2, the penalty 258.14 is not imposed. 258.15 (b) For the taxes listed in paragraph (a), in addition to 258.16 the penalty in that paragraph, whether imposed or not, if a 258.17 return or amended return is filed after the due date, without 258.18 regard to extensions, and any tax reported as remaining due is 258.19 not remitted with the return or amended return, a penalty of 258.20 five percent of the tax not paid is added to the tax. If the 258.21 commissioner issues an order assessing additional tax for a tax 258.22 listed in paragraph (a), and the tax is not paid within 60 days 258.23 after the mailing of the order or, if appealed, within 60 days 258.24 after final resolution of the appeal, a penalty of five percent 258.25 of the unpaid tax is added to the tax. 258.26 (c)If an individual files a state individual income tax258.27return and pays all of the state individual income tax with the258.28filing of a return within six months of the date the return is258.29due and the amount paid by the due date of the return is at258.30least 90 percent of the amount of tax due, as shown on the258.31return, the individual is presumed to have reasonable cause for258.32the late payment.If an individual income tax is not paid 258.33 within the time specified for payment, a penalty of four percent 258.34 is added to the unpaid tax. There is a presumption of 258.35 reasonable cause for the late payment if the individual: (i) 258.36 pays by the due date of the return at least 90 percent of the 259.1 amount of tax, after credits other than withholding and 259.2 estimated payments, shown owing on the return; (ii) files the 259.3 return within six months after the due date; and (iii) pays the 259.4 remaining balance of the reported tax when the return is filed. 259.5 (d) If the commissioner issues an order assessing 259.6 additional individual income tax, and the tax is not paid within 259.7 60 days after the mailing of the order or, if appealed, within 259.8 60 days after final resolution of the appeal, a penalty of four 259.9 percent of the unpaid tax is added to the tax. 259.10(b)(e) If a withholding or sales or use tax is not paid 259.11 within the time specified for payment, a penalty must be added 259.12 to the amount required to be shown as tax. The penalty is five 259.13 percent of the tax not paid on or before the date specified for 259.14 payment of the tax if the failure is for not more than 30 days, 259.15 with an additional penalty of five percent of the amount of tax 259.16 remaining unpaid during each additional 30 days or fraction of 259.17 30 days during which the failure continues, not exceeding 15 259.18 percent in the aggregate. 259.19 [EFFECTIVE DATE.] This section is effective for tax years 259.20 beginning after December 31, 2000, and for estate tax returns 259.21 due after January 1, 2002. 259.22 Sec. 3. Minnesota Statutes 2000, section 289A.60, 259.23 subdivision 2, is amended to read: 259.24 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 259.25 a taxpayer fails to make and file areturn other than an income259.26tax return of an individual, a withholding return, or sales or259.27use tax return, within the time prescribed or an extension, a259.28penalty is added to the tax. The penalty is three percent of259.29the amount of tax not paid on or before the date prescribed for259.30payment of the tax including any extensions if the failure is259.31for not more than 30 days, with an additional five percent of259.32the amount of tax remaining unpaid during each additional 30259.33days or fraction of 30 days, during which the failure continues,259.34not exceeding 23 percent in the aggregate.259.35If a taxpayer fails to file an individual income tax return259.36within six months after the date prescribed for filing of the260.1return, a penalty of ten percent of the amount of tax not paid260.2by the end of that six-month period is added to the tax.260.3If a taxpayer fails to file a withholding or sales or use260.4 tax return within the time prescribed, including an extension, a 260.5 penalty of five percent of the amount of tax nottimelypaid by 260.6 the end of that period is added to the tax. 260.7 [EFFECTIVE DATE.] This section is effective for tax years 260.8 beginning after December 31, 2000, and for estate tax returns 260.9 due after January 1, 2002. 260.10 Sec. 4. Minnesota Statutes 2000, section 289A.60, is 260.11 amended by adding a subdivision to read: 260.12 Subd. 2a. [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an 260.13 individual income tax is not paid within 180 days after the date 260.14 of filing of a return or, in the case of taxes assessed by the 260.15 commissioner, within 180 days after the assessment date or, if 260.16 appealed, within 180 days after final resolution of the appeal, 260.17 an extended delinquency penalty of five percent of the tax 260.18 remaining unpaid is added to the amount due. 260.19 (b) If a corporate franchise, fiduciary income, mining 260.20 company, estate, partnership, S corporation, or nonresident 260.21 entertainer tax return is not filed within 30 days after written 260.22 demand for the filing of a delinquent return, an extended 260.23 delinquency penalty of five percent of the tax not paid prior to 260.24 the demand is added to the tax, or in the case of an individual 260.25 income tax return, a minimum penalty of $100 or the five percent 260.26 penalty is imposed, whichever amount is greater. 260.27 [EFFECTIVE DATE.] This section is effective for tax years 260.28 beginning after December 31, 2000, and for estate tax returns 260.29 due after January 1, 2002. 260.30 Sec. 5. Minnesota Statutes 2000, section 289A.60, 260.31 subdivision 7, is amended to read: 260.32 Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] Ifan individual260.33 a taxpayer files what purports to be a tax returnrequired by260.34chapter 290or a claim for refund but which does not contain 260.35 information on which the substantial correctness of 260.36 theassessmentpurported return or claim for refund may be 261.1 judged or contains information that on its face shows that the 261.2assessmentpurported return or claim for refund is substantially 261.3 incorrect and the conduct is due to a position that is frivolous 261.4 or a desire that appears on the purported return or claim for 261.5 refund to delay or impede the administration of Minnesota tax 261.6 laws, then the individual shall pay a penalty of $500. In a 261.7 proceeding involving the issue of whether or not a person is 261.8 liable for this penalty, the burden of proof is on the 261.9 commissioner. 261.10 [EFFECTIVE DATE.] This section is effective for returns or 261.11 claims for refunds filed on or after the day following final 261.12 enactment. 261.13 Sec. 6. Minnesota Statutes 2000, section 297F.20, 261.14 subdivision 3, is amended to read: 261.15 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 261.16 person who files with the commissioner a return, report, or 261.17 other document, or who maintains or provides invoices subject to 261.18 review by the commissioner under this chapter, known by the 261.19 person to be fraudulent or false concerning a material matter, 261.20 is guilty of a felony. 261.21 (b) A person who knowingly aids or assists in, or advises 261.22 in the preparation or presentation of a return, report, invoice, 261.23 or other document that is fraudulent or false concerning a 261.24 material matter, whether or not the falsity or fraud is 261.25 committed with the knowledge or consent of the person authorized 261.26 or required to present the return, report, invoice, or other 261.27 document, is guilty of a felony. 261.28 [EFFECTIVE DATE.] This section is effective for crimes 261.29 occurring on or after July 1, 2001. 261.30 Sec. 7. [APPROPRIATION.] 261.31 $545,000 in fiscal year 2002 and $25,000 in fiscal year 261.32 2003 is appropriated from the general fund to the commissioner 261.33 of revenue to implement sections 2 to 4. $520,000 of the 261.34 appropriation in fiscal year 2002 is for a one-time expenditure 261.35 related to system programming costs. This appropriation is 261.36 available for expenditure until June 30, 2003. 262.1 [EFFECTIVE DATE.] This section is effective July 1, 2001. 262.2 Sec. 8. [REPEALER.] 262.3 Minnesota Statutes 2000, section 289A.60, subdivision 3, is 262.4 repealed. 262.5 [EFFECTIVE DATE.] This section is effective for tax years 262.6 beginning after December 31, 2000, and for estate tax returns 262.7 due after January 1, 2002. 262.8 ARTICLE 9 262.9 SEIZURES OF CONTRABAND 262.10 Section 1. Minnesota Statutes 2000, section 296A.24, 262.11 subdivision 1, is amended to read: 262.12 Subdivision 1. [SEIZURE.] The commissioner or authorized 262.13 agents may seize gasoline or special fuel being transported for 262.14 delivery in violation of section 296A.03, subdivision 1, and any 262.15 vehicle or other method of conveyance used for transporting the 262.16 gasoline or special fuel. Any untaxed motor vehicle fuel that 262.17 is received by a person other than a licensee is subject to 262.18 seizure along with the vehicle or other means of transportation 262.19 used to transport the motor vehicle fuel. Any motor vehicle 262.20 fuel, along with the transporting vehicle, brought into the 262.21 state of Minnesota by a transporter for use, distribution, 262.22 storage, or sale that is not supported by a manifest, bill of 262.23 lading, or invoice, reflecting the licensed distributor 262.24 responsible for the tax and/or fees is subject to seizure by the 262.25 Minnesota department of revenue. Property seized under this 262.26 subdivision is subject to forfeiture as provided insubdivisions262.27 subdivision 2and 3. 262.28 [EFFECTIVE DATE.] This section is effective for seizures 262.29 made on or after July 1, 2001. 262.30 Sec. 2. Minnesota Statutes 2000, section 296A.24, 262.31 subdivision 2, is amended to read: 262.32 Subd. 2. [DISPOSITION OF SEIZED PROPERTY.] (a) Within ten 262.33 days after the seizureof gasoline or special fuel, the person 262.34 making the seizure shalldeliverserve by certified mail an 262.35 inventory of the vehicle or property seizedtoon the person 262.36 from whom the seizure was made, if known, and on any person 263.1 known or believed to have any right, title, interest, or lien on 263.2 the vehicle or property, at the last known address, and file a 263.3 copy withthe office ofthe commissioner. The notice must 263.4 include an explanation of the right to demand a judicial 263.5 forfeiture determination. 263.6 (b) Withinten60 days after the date of service of the 263.7 inventory, which is the date of mailing, the person from whom 263.8 the vehicle or property was seized or any person claiming an 263.9 interest inthe propertyit may filewith the commissionera 263.10 demand for a judicial determination of whether the vehicle or 263.11 property was lawfully subject to seizure and forfeiture.The263.12commissioner, within 60 days of demand for a judicial263.13determination, shall begin an action in the district court of263.14the county where the seizure was made to determine the issue of263.15forfeiture.263.16(b) The action must be brought in the name of the state and263.17prosecuted by the county attorney or by the attorney263.18general.The demand must be in the form of a civil complaint 263.19 and must be filed with the court administrator in the county in 263.20 which the seizure occurred, together with proof of service of a 263.21 copy of the complaint on the commissioner of revenue, and the 263.22 standard filing fee for civil actions unless the petitioner has 263.23 the right to sue in forma pauperis under section 563.01. If the 263.24 value of the seized property or vehicle is $7,500 or less, the 263.25 claimant may file an action in conciliation court for its 263.26 recovery. If the value of the seized property or vehicle is 263.27 less than $500, the claimant does not have to pay the 263.28 conciliation court filing fee. 263.29 (c) The complaint must be captioned in the name of the 263.30 claimant as plaintiff and the seized property or vehicle as 263.31 defendant, and must state with specificity the grounds on which 263.32 the claimant alleges the property or vehicle was improperly 263.33 seized and the plaintiff's interest in the property or vehicle 263.34 seized. No responsive pleading is required of the commissioner 263.35 and no court fees may be charged for the commissioner's 263.36 appearance in the matter. The proceedings are governed by the 264.1 Rules of Civil Procedure. Notwithstanding any law to the 264.2 contrary, an action for the return of property or a vehicle 264.3 seized under this section may not be maintained by or on behalf 264.4 of any person who has been served with an inventory unless the 264.5 person has complied with this subdivision. The court shall hear 264.6 the action without a jury and shall try and determine the issues 264.7 of fact and law involved. 264.8(c)(d) When a judgment of forfeiture is entered, the 264.9 commissioner may, unless the judgment is stayed pending an 264.10 appeal, either: 264.11 (1) cause the forfeitedpropertygasoline or special fuel 264.12 to be destroyed; or 264.13 (2) causeitthe forfeited property in clause (1) or 264.14 vehicle to be sold at public auction as provided by 264.15 law.Proceeds of a sale, after deducting the expense of keeping264.16the gasoline or special fuel and costs of the sale, must be paid264.17into the state treasury. The commissioner shall reimburse264.18designees for costs incurred.After deducting the expense of 264.19 keeping the property and vehicle and the costs of the sale, the 264.20 commissioner shall pay from the funds collected all liens 264.21 according to their priority, which are established as being bona 264.22 fide and as existing without the lienor having any notice or 264.23 knowledge that the property or vehicle was being used or was 264.24 intended to be used for or in connection with any violation, and 264.25 shall pay the balance of the proceeds into the general fund. 264.26(d) If a demand for judicial determination is made and no264.27action is commenced as provided in this subdivision, the264.28property must be released by the commissioner and redelivered to264.29the person entitled to it.(e) If no demand for judicial 264.30 determination is made, the property or vehicle seized must be 264.31 considered forfeited to the state by operation of law and may be 264.32 disposed of by the commissioner as provided where there has been 264.33 a judgment of forfeiture.When the commissioner is satisfied264.34that a person from whom property is seized under this chapter264.35was acting in good faith and without intent to evade the tax,264.36the commissioner shall release the property seized, without265.1further legal proceedings.265.2 [EFFECTIVE DATE.] This section is effective for seizures 265.3 made on or after July 1, 2001. 265.4 Sec. 3. Minnesota Statutes 2000, section 297A.91, is 265.5 amended to read: 265.6 297A.91 [SEIZURE; COURT REVIEW.] 265.7 Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL 265.8 TRANSPORT.] (a) If the retailer does not have a sales or use tax 265.9 permit and has been engaging in transporting personal property 265.10 into the state without payment of the tax, the commissioner of 265.11 revenue or the commissioner's agents may seize in the name of 265.12 the state any truck, automobile, or means of transportation not 265.13 owned or operated by a common carrier, used in the illegal 265.14 importation and transportation of any tangible personal property 265.15 by a retailer or the retailer's agent or employee. The 265.16 commissioner may demand the forfeiture and sale of the truck, 265.17 automobile, or other means of transportation together with the 265.18 property being transported illegally, unless the owner 265.19 establishes to the satisfaction of the commissioner or the court 265.20 that the owner had no notice or knowledge or reason to believe 265.21 that the vehicle was used or intended to be used in any such 265.22 violation. 265.23 (b) Withintwoten days after the seizure, the person 265.24 making the seizure shalldeliverserve by certified mail an 265.25 inventory of the vehicle and property seizedtoon the person 265.26 from whom the seizure was made, if known, andtoon any person 265.27 known or believed to have any right, title, interest, or lien on 265.28 the vehicle or property, at the last known address. The person 265.29 making the seizure shall also file a copy of the inventory with 265.30 the commissioner. The notice must include an explanation of the 265.31 right to demand a judicial forfeiture determination. 265.32 Subd. 2. [COURT REVIEW OF FORFEITURE.] (a) Withinten60 265.33 days after the date of service of the inventory, which is the 265.34 date of mailing, the person from whom the vehicle and property 265.35 were seized or any person claiming an interest in the vehicle or 265.36 property may filewith the commissionera demand for a judicial 266.1 determination of the question of whether the vehicle or property 266.2 was lawfully subject to seizure and forfeiture.The266.3commissioner, within 30 days, shall institute an action in the266.4district court of the county where the seizure was made to266.5determine the issue of forfeiture.266.6 (b)The action must be brought in the name of the state and266.7prosecuted by the county attorney or the attorney general.The 266.8 demand must be in the form of a civil complaint and must be 266.9 filed with the court administrator in the county in which the 266.10 seizure occurred, together with proof of service or a copy of 266.11 the complaint on the commissioner of revenue, and the standard 266.12 filing fee for civil actions unless the petitioner has the right 266.13 to sue in forma pauperis under section 563.01. If the value of 266.14 the seized property or vehicle is $7,500 or less, the claimant 266.15 may file an action in conciliation court for its recovery. If 266.16 the value of the seized property or vehicle is less than $500, 266.17 the claimant does not have to pay the conciliation court filing 266.18 fee. 266.19 (c) The complaint must be captioned in the name of the 266.20 claimant as plaintiff and the seized property or vehicle as 266.21 defendant, and must state with specificity the grounds on which 266.22 the claimant alleges the property or vehicle was improperly 266.23 seized and the plaintiff's interest in the property or vehicle 266.24 seized. No responsive pleading is required of the commissioner, 266.25 and no court fees may be charged for the commissioner's 266.26 appearance in the matter. The proceedings are governed by the 266.27 Rules of Civil Procedure. Notwithstanding any law to the 266.28 contrary, an action for the return of property or a vehicle 266.29 seized under this subdivision may not be maintained by or on 266.30 behalf of any person who has been served with an inventory 266.31 unless the person has complied with this subdivision. The court 266.32 shall hear the action without a jury and shall determine the 266.33 issues of fact and law involved. If a judgment of forfeiture is 266.34 entered and is not stayed pending an appeal, the commissioner 266.35 may have the forfeited vehicle and property sold at public 266.36 auction as provided by law. 267.1 Subd. 3. [TREATMENT OF SEIZED PROPERTY.]If a demand for267.2judicial determination is made and no action is commenced as267.3provided in this subdivision, the vehicle and property must be267.4released by the commissioner and redelivered to the person267.5entitled to it.If no demand for judicial determination is 267.6 made, the vehicle and property seized are considered forfeited 267.7 to the state by operation of law and may be disposed of by the 267.8 commissioner as if there were a judgment of forfeiture. The 267.9 forfeiture and sale of the automobile, truck, or other means of 267.10 transportation, and of the property being transported illegally 267.11 in it, are a penalty for the violation of this chapter. After 267.12 deducting the expense of keeping the vehicle and property, the 267.13 fee for seizure, and the costs of the sale, the commissioner 267.14 shall pay liens from the funds collected. The commissioner 267.15 shall pay all liens, according to their priority, that are 267.16 establishedat the hearingas being bona fide and as existing 267.17 without the lienor having any notice or knowledge that the 267.18 vehicle or property was being used or was intended to be used 267.19 for or in connection with any such violationas specified in the267.20order of the court. The commissioner shall pay the balance of 267.21 the proceeds into the state treasury to be credited to the 267.22 general fund. The state is not liable for any liens in excess 267.23 of the proceeds from the sale after allowable deductions. A 267.24 sale under this section frees the vehicle and property sold from 267.25 all liens.The order of the district court may be appealed as267.26in other civil cases.267.27 [EFFECTIVE DATE.] This section is effective for seizures 267.28 made on or after July 1, 2001. 267.29 Sec. 4. Minnesota Statutes 2000, section 297E.16, 267.30 subdivision 1, is amended to read: 267.31 Subdivision 1. [SEIZURE.] Contraband may be seized by the 267.32 commissioner or by any sheriff or other police officer, 267.33 hereinafter referred to as the "seizing authority," with or 267.34 without process, and is subject to forfeiture as provided in 267.35subdivisionssubdivision 2and 3. 267.36 [EFFECTIVE DATE.] This section is effective for seizures 268.1 made on or after July 1, 2001. 268.2 Sec. 5. Minnesota Statutes 2000, section 297E.16, 268.3 subdivision 2, is amended to read: 268.4 Subd. 2. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 268.5 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 268.6 seizure of alleged contraband described in section 349.2125, 268.7 subdivision 1, the person making the seizure shallmake268.8availableserve by certified mail an inventory of the property 268.9 seizedtoon the person from whom the property was seized, if 268.10 known, and on any person known or believed to have any right, 268.11 title, interest, or lien in the property, at the last known 268.12 address, and file a copy with the commissioner or the director 268.13 of alcohol and gambling enforcement. The notice must include an 268.14 explanation of the right to demand a judicial forfeiture 268.15 determination. 268.16 (b) Withinten60 days after the date of service of the 268.17 inventory, which is the date of mailing, the person from whom 268.18 the property was seized or any person claiming an interest in 268.19 the property may filewith the seizing authoritya demand for 268.20 judicial determination of whether the property was lawfully 268.21 subject to seizure and forfeiture.Within 60 days after the268.22date of filing of the demand, the seizing authority must bring268.23an action in the district court of the county where seizure was268.24made to determine the issue of forfeiture. The action must be268.25brought in the name of the state and be prosecuted by the county268.26attorney or by the attorney general.The demand must be in the 268.27 form of a civil complaint and must be filed with the court 268.28 administrator in the county in which the seizure occurred, 268.29 together with proof of service of a copy of the complaint on the 268.30 commissioner of revenue or the director of alcohol and gambling 268.31 enforcement, and the standard filing fee for civil actions 268.32 unless the petitioner has the right to sue in forma pauperis 268.33 under section 563.01. If the value of the seized property is 268.34 $7,500 or less, the claimant may file an action in conciliation 268.35 court for recovery of the property. If the value of the seized 268.36 property is less than $500, the claimant does not have to pay 269.1 the conciliation court filing fee. 269.2 (c) The complaint must be captioned in the name of the 269.3 claimant as plaintiff and the seized property as defendant, and 269.4 must state with specificity the grounds on which the claimant 269.5 alleges the property was improperly seized and the plaintiff's 269.6 interest in the property seized. No responsive pleading is 269.7 required of the commissioner or director, and no court fees may 269.8 be charged for the commissioner's or director's appearance in 269.9 the matter. The proceedings are governed by the Rules of Civil 269.10 Procedure. Notwithstanding any law to the contrary, an action 269.11 for the return of property seized under this section may not be 269.12 maintained by or on behalf of any person who has been served 269.13 with an inventory unless the person has complied with this 269.14 subdivision. The court shall hear the action without a jury and 269.15 determine the issues of fact and law involved. 269.16 (d) If a judgment of forfeiture is entered, the seizing 269.17 authority may, unless the judgment is stayed pending an appeal, 269.18 either (1) cause the forfeited property, other than a vehicle, 269.19 to be destroyed; or (2) cause it to be sold at a public auction 269.20 as provided by law. The person making a sale, after deducting 269.21 the expense of keeping the property, the fee for seizure, and 269.22 the costs of the sale, shall pay all liens according to their 269.23 priority, which are established as being bona fide and as 269.24 existing without the lienor having any notice or knowledge that 269.25 the property was being used or was intended to be used for or in 269.26 connection with the violation. The balance of the proceeds must 269.27 be paid 70 percent to the seizing authority for deposit as a 269.28 supplement to its operating fund or similar fund for official 269.29 use, and 20 percent to the county attorney or other prosecuting 269.30 agency that handled the court proceeding, if there is one, for 269.31 deposit as a supplement to its operating fund or similar fund 269.32 for prosecutorial purposes. The remaining ten percent of the 269.33 proceeds must be forwarded within 60 days after resolution of 269.34 the forfeiture to the department of human services to fund 269.35 programs for the treatment of compulsive gamblers. If there is 269.36 no prosecuting authority involved in the forfeiture, the 20 270.1 percent of the proceeds otherwise designated for the prosecuting 270.2 authority must be deposited into the general fund. 270.3If demand for judicial determination is made and no action270.4is commenced by the seizing authority as provided in this270.5subdivision, the property must be released by the seizing270.6authority and delivered to the person entitled to it.(e) If no 270.7 demand for judicial determination is made, the property seized 270.8 is considered forfeited to the seizing authority by operation of 270.9 law and may be disposed of by the seizing authority as provided 270.10 where there has been a judgment of forfeiture.When the seizing270.11authority is satisfied that a person from whom property is270.12seized was acting in good faith and without intent to evade the270.13tax imposed by section 297E.02, the seizing authority shall270.14release the property seized without further legal proceedings. 270.15 [EFFECTIVE DATE.] This section is effective for seizures 270.16 made on or after July 1, 2001. 270.17 Sec. 6. Minnesota Statutes 2000, section 297F.21, 270.18 subdivision 1, is amended to read: 270.19 Subdivision 1. [CONTRABAND DEFINED.] The following are 270.20 declared to be contraband and therefore subject to civil and 270.21 criminal penalties under this chapter: 270.22 (a) Cigarette packages which do not have stamps affixed to 270.23 them as provided in this chapter, including but not limited to 270.24 (i) packages with illegible stamps and packages with stamps that 270.25 are not complete or whole even if the stamps are legible, and 270.26 (ii) all devices for the vending of cigarettes in which packages 270.27 as defined in item (i) are found, including all contents 270.28 contained within the devices. 270.29 (b) A device for the vending of cigarettes and all packages 270.30 of cigarettes, where the device does not afford at least partial 270.31 visibility of contents. Where any package exposed to view does 270.32 not carry the stamp required by this chapter, it shall be 270.33 presumed that all packages contained in the device are unstamped 270.34 and contraband. 270.35 (c) A device for the vending of cigarettes to which the 270.36 commissioner or authorized agents have been denied access for 271.1 the inspection of contents. In lieu of seizure, the 271.2 commissioner or an agent may seal the device to prevent its use 271.3 until inspection of contents is permitted. 271.4 (d) A device for the vending of cigarettes which does not 271.5 carry the name and address of the owner, plainly marked and 271.6 visible from the front of the machine. 271.7 (e) A device including, but not limited to, motor vehicles, 271.8 trailers, snowmobiles, airplanes, and boats used with the 271.9 knowledge of the owner or of a person operating with the consent 271.10 of the owner for the storage or transportation of more than 271.11 5,000 cigarettes which are contraband under this subdivision. 271.12 When cigarettes are being transported in the course of 271.13 interstate commerce, or are in movement from either a public 271.14 warehouse to a distributor upon orders from a manufacturer or 271.15 distributor, or from one distributor to another, the cigarettes 271.16 are not contraband, notwithstanding the provisions of clause (a). 271.17 (f) A device including, but not limited to, motor vehicles, 271.18 trailers, snowmobiles, airplanes, and boats used with the 271.19 knowledge of the owner, or of a person operating with the 271.20 consent of the owner, for the storage or transportation of 271.21 untaxed tobacco products intended for sale in Minnesota other 271.22 than those in the possession of a licensed distributor on or 271.23 before the due date for payment of the tax under section 271.24 297F.09, subdivision 2. 271.25 (g) Cigarette packages or tobacco products obtained from an 271.26 unlicensed seller. 271.27(g)(h) Cigarette packages offered for sale or held as 271.28 inventory in violation of section 297F.20, subdivision 7. 271.29(h)(i) Tobacco products on which the tax has not been paid 271.30 by a licensed distributor. 271.31(i)(j) Any cigarette packages or tobacco products offered 271.32 for sale or held as inventory for which there is not an invoice 271.33 from a licensed seller as required under section 297F.13, 271.34 subdivision 4. 271.35(j)(k) Cigarette packages which have been imported into 271.36 the United States in violation of United States Code, title 26, 272.1 section 5754. All cigarettes held in violation of that section 272.2 shall be presumed to have entered the United States after 272.3 December 31, 1999, in the absence of proof to the contrary. 272.4 [EFFECTIVE DATE.] This section is effective for seizures 272.5 made on or after July 1, 2001. 272.6 Sec. 7. Minnesota Statutes 2000, section 297F.21, 272.7 subdivision 2, is amended to read: 272.8 Subd. 2. [SEIZURE.] Cigarettes, tobacco products, or other 272.9 property made contraband by subdivision 1 may be seized by the 272.10 commissioner or authorized agents or by any sheriff or other 272.11 police officer, with or without process, and are subject to 272.12 forfeiture as provided insubdivisionssubdivision 3and 4. 272.13 [EFFECTIVE DATE.] This section is effective for seizures 272.14 made on or after July 1, 2001. 272.15 Sec. 8. Minnesota Statutes 2000, section 297F.21, 272.16 subdivision 3, is amended to read: 272.17 Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 272.18 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 272.19 seizure of any alleged contraband, the person making the seizure 272.20 shallmake availableserve by certified mail an inventory of the 272.21 property seizedtoon the person from whom the seizure was made, 272.22 if known, and on any person known or believed to have any right, 272.23 title, interest, or lien in the property, at the last known 272.24 address, and file a copy with the commissioner. The notice must 272.25 include an explanation of the right to demand a judicial 272.26 forfeiture determination. 272.27 (b) Withinten60 days after the date of service of the 272.28 inventory, which is the date of mailing, the person from whom 272.29 the property was seized or any person claiming an interest in 272.30 the property may filewith the commissionera demand for a 272.31 judicial determination of the question as to whether the 272.32 property was lawfully subject to seizure and forfeiture.The272.33commissioner, within 60 days, shall institute an action in the272.34district court of the county where the seizure was made to272.35determine the issue of forfeiture.The demand must be in the 272.36 form of a civil complaint and must be filed with the court 273.1 administrator in the county in which the seizure occurred, 273.2 together with proof of service of a copy of the complaint on the 273.3 commissioner of revenue, and the standard filing fee for civil 273.4 actions unless the petitioner has the right to sue in forma 273.5 pauperis under section 563.01. If the value of the seized 273.6 property is $7,500 or less, the claimant may file an action in 273.7 conciliation court for recovery of the property. If the value 273.8 of the seized property is less than $500, the claimant does not 273.9 have to pay the conciliation court filing fee. 273.10 (c) The complaint must be captioned in the name of the 273.11 claimant as plaintiff and the seized property as defendant, and 273.12 must state with specificity the grounds on which the claimant 273.13 alleges the property was improperly seized and the plaintiff's 273.14 interest in the property seized. No responsive pleading is 273.15 required of the commissioner, and no court fees may be charged 273.16 for the commissioner's appearance in the matter. The 273.17 proceedings are governed by the Rules of Civil Procedure. 273.18 Notwithstanding any law to the contrary, an action for the 273.19 return of property seized under this section may not be 273.20 maintained by or on behalf of any person who has been served 273.21 with an inventory unless the person has complied with this 273.22 subdivision. The court shall decide whether the alleged 273.23 contraband is contraband, as defined in subdivision 1. 273.24(b) The action must be brought in the name of the state and273.25must be prosecuted by the county attorney or by the attorney273.26general.The court shall hear the action without a jury and 273.27 shall try and determine the issues of fact and law involved. 273.28(c)(d) When a judgment of forfeiture is entered, the 273.29 commissioner may, unless the judgment is stayed pending an 273.30 appeal, either: 273.31 (1) deliver the forfeitedpropertycigarette packages or 273.32 tobacco products to the commissioner of human services for use 273.33 by patients in state institutions; 273.34 (2) causeitthe property in clause (1) to be destroyed; or 273.35 (3) causeitthe forfeited property to be sold at public 273.36 auction as provided by law. 274.1 The person making a sale, after deducting the expense of keeping 274.2 the property, the fee for seizure, and the costs of the sale, 274.3 shall pay all liens according to their priority, which are 274.4 established as being bona fide and as existing without the 274.5 lienor having any notice or knowledge that the property was 274.6 being used or was intended to be used for or in connection with 274.7 the violation. The balance of the proceeds must be paid 75 274.8 percent to the department of revenue for deposit as a supplement 274.9 to its operating fund or similar fund for official use, and 25 274.10 percent to the county attorney or other prosecuting agency that 274.11 handled the court proceeding, if there is one, for deposit as a 274.12 supplement to its operating fund or similar fund for 274.13 prosecutorial purposes. If there is no prosecuting authority 274.14 involved in the forfeiture, the 25 percent of the proceeds 274.15 otherwise designated for the prosecuting authority must be 274.16 deposited into the general fund. 274.17(d) If a demand for judicial determination is made and no274.18action commenced as provided in this subdivision, the property274.19must be released by the commissioner and returned to the person274.20entitled to it.(e) If no demand for judicial determination is 274.21 made, the property seized is considered forfeited to the state 274.22 by operation of law and may be disposed of by the commissioner 274.23 as provided in the case of a judgment of forfeiture. 274.24 [EFFECTIVE DATE.] This section is effective for seizures 274.25 made on or after July 1, 2001. 274.26 Sec. 9. Minnesota Statutes 2000, section 297G.20, 274.27 subdivision 3, is amended to read: 274.28 Subd. 3. [SEIZURE.] Distilled spirits, wine, fermented 274.29 malt beverages, or other property made contraband by subdivision 274.30 1 may be seized by the commissioner of revenue or public safety 274.31 and their authorized agents or by any sheriff or other police 274.32 officer, with or without process, and are subject to forfeiture 274.33 as provided insubdivisionssubdivision 4and 5. 274.34 [EFFECTIVE DATE.] This section is effective for seizures 274.35 made on or after July 1, 2001. 274.36 Sec. 10. Minnesota Statutes 2000, section 297G.20, 275.1 subdivision 4, is amended to read: 275.2 Subd. 4. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 275.3 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 275.4 seizure of alleged contraband, the person making the seizure 275.5 shallmake availableserve by certified mail an inventory of the 275.6 property seizedtoon the person from whom the property was 275.7 seized, if known, and on any person known or believed to have 275.8 any right, title, interest, or lien in the property, at the last 275.9 known address, and file a copy with both the commissioners of 275.10 revenue and public safety. The notice must include an 275.11 explanation of the right to demand a judicial forfeiture 275.12 determination. 275.13 (b) Withinten60 days after the date of service of the 275.14 inventory, which is the date of mailing, the person from whom 275.15 the property was seized or any person claiming an interest in 275.16 the property may filewith the seizing authoritya demand for 275.17 judicial determination of whether the property was lawfully 275.18 subject to seizure and forfeiture.Within 60 days after the275.19date of the filing of the demand, the seizing authority must275.20bring an action in the district court of the county where275.21seizure was made to determine the issue of forfeiture.The 275.22 demand must be in the form of a civil complaint and must be 275.23 filed with the court administrator in the county in which the 275.24 seizure occurred, together with proof of service of a copy of 275.25 the complaint on the commissioner of revenue or public safety, 275.26 and the standard filing fee for civil actions unless the 275.27 petitioner has the right to sue in forma pauperis under section 275.28 563.01. If the value of the seized property or vehicle is 275.29 $7,500 or less, the claimant may file an action in conciliation 275.30 court for recovery of the property. If the value of the seized 275.31 property is less than $500, the claimant does not have to pay 275.32 the conciliation court filing fee. 275.33 (c) The complaint must be captioned in the name of the 275.34 claimant as plaintiff and the seized property as defendant, and 275.35 must state with specificity the grounds on which the claimant 275.36 alleges the property was improperly seized and the plaintiff's 276.1 interest in the property seized. No responsive pleading is 276.2 required of the commissioner of revenue or public safety and no 276.3 court fees may be charged for either commissioner's appearance 276.4 in the matter. The proceedings are governed by the Rules of 276.5 Civil Procedure. Notwithstanding any law to the contrary, an 276.6 action for the return of property seized under this section may 276.7 not be maintained by or on behalf of any person who has been 276.8 served with an inventory unless the person has complied with 276.9 this subdivision. 276.10(b) The action must be brought in the name of the state and276.11must be prosecuted by the county attorney or by the attorney276.12general.The court shall hear the action without a jury and 276.13 determine the issues of fact and law involved. 276.14(c)(d) If a judgment of forfeiture is entered, the seizing 276.15 authority may, unless the judgment is stayed pending an appeal, 276.16 either: 276.17 (1) cause the forfeited property, other than a vehicle, to 276.18 be destroyed; or 276.19 (2) cause it to be sold at a public auction as provided by 276.20 law. 276.21 The person making a sale, after deducting the expense of 276.22 keeping the property, the fee for seizure, and the costs of the 276.23 sale, shall pay all liens according to their priority, which are 276.24 established as being bona fide and as existing without the 276.25 lienor having any notice or knowledge that the property was 276.26 being used or was intended to be used for or in connection with 276.27 the violation. The balance of the proceeds must be paid 75 276.28 percent to the seizing authority for deposit as a supplement to 276.29 its operating fund or similar fund for official use, and 25 276.30 percent to the county attorney or other prosecuting agency that 276.31 handled the court proceeding, if there is one, for deposit as a 276.32 supplement to its operating fund or similar fund for 276.33 prosecutorial purposes. If there is no prosecuting authority 276.34 involved in the forfeiture, the 25 percent of the proceeds 276.35 otherwise designated for the prosecuting authority must be 276.36 deposited into the general fund. 277.1(d) If demand for judicial determination is made and no277.2action is commenced by the seizing authority as provided in this277.3subdivision, the property must be released by the seizing277.4authority and delivered to the person entitled to it.(e) If no 277.5 demand is made, the property seized is considered forfeited to 277.6 the seizing authority by operation of law and may be disposed of 277.7 by the seizing authority as provided for a judgment of 277.8 forfeiture.When the seizing authority is satisfied that a277.9person from whom property is seized was acting in good faith and277.10without intent to evade the tax imposed by this chapter, the277.11seizing authority shall release the property seized without277.12further legal proceedings.277.13 [EFFECTIVE DATE.] This section is effective for seizures 277.14 made on or after July 1, 2001. 277.15 Sec. 11. [REPEALER.] 277.16 Minnesota Statutes 2000, sections 296A.24, subdivision 3; 277.17 297E.16, subdivision 3; 297F.21, subdivision 4; and 297G.20, 277.18 subdivision 5, are repealed. 277.19 [EFFECTIVE DATE.] This section is effective for seizures 277.20 made on or after July 1, 2001. 277.21 ARTICLE 10 277.22 ELECTRONIC FILING AND PAYMENT 277.23 Section 1. Minnesota Statutes 2000, section 115B.24, 277.24 subdivision 2, is amended to read: 277.25 Subd. 2. [DECLARATIONS OF ESTIMATED TAX.]For 1983, every277.26generator of hazardous waste required to pay a tax pursuant to277.27section 115B.22 shall make a declaration of estimated hazardous277.28waste generated for the last six months of calendar year 1983 if277.29the tax can reasonably be estimated to exceed $500. The277.30declaration of the estimated tax shall be filed by October 15,277.311983. The amount of estimated tax with respect to which a277.32declaration is required shall be paid in two equal installments277.33by October 15, 1983 and January 15, 1984.For 1984 and 277.34 subsequent years, every generator of hazardous waste required to 277.35 pay a tax pursuant to section 115B.22 shall make a declaration 277.36 of estimated hazardous waste generated for the calendar year if 278.1 the tax can reasonably be expected to be in excess of $1,000. 278.2 The declaration of estimated tax shall be filed by March 15. 278.3 The amount of estimated tax with respect to which a declaration 278.4 is required shall be paid in four equal installments on or 278.5 before the 15th day of March, June, September, and December. 278.6 An amendment of a declaration may be filed in any interval 278.7 between installment dates prescribed above but only one 278.8 amendment may be filed in each interval. If an amendment of a 278.9 declaration is filed, the amount of each remaining installment 278.10 shall be the amount which would have been payable if the new 278.11 estimate had been made when the first estimate for the calendar 278.12 year was made, increased or decreased, as the case may be, by 278.13 the amount computed by dividing 278.14 (1) the difference between (A) the amount of estimated tax 278.15 required to be paid before the date on which the amendment was 278.16 made, and (B) the amount of estimated tax which would have been 278.17 required to be paid before that date if the new estimate had 278.18 been made when the first estimate was made, by 278.19 (2) the number of installments remaining to be paid on or 278.20 after the date on which the amendment is made. 278.21 The commissioner of revenue may grant a reasonable 278.22 extension of time for filing any declaration but the extension 278.23 shall not be for more than six months. 278.24 If the aggregate amount of estimated tax payments made 278.25 during a fiscal year ending June 30 is equal to or exceeds 278.26 $80,000, all estimated tax payments in the subsequent calendar 278.27 year must be paid by electronic meansof a funds transfer as278.28defined in section 336.4A-104, paragraph (a). The funds278.29transfer payment date, as defined in section 336.4A-401, must be278.30on or before the date the estimated tax payment is due. If the278.31date the estimated tax payment is due is not a funds transfer278.32business day, as defined in section 336.4A-105, paragraph (a),278.33clause (4), the payment date must be on or before the funds278.34transfer business day next following the date the estimated tax278.35payment is due. 278.36 [EFFECTIVE DATE.] This section is effective the day 279.1 following final enactment. 279.2 Sec. 2. Minnesota Statutes 2000, section 270.271, 279.3 subdivision 1, is amended to read: 279.4 Subdivision 1. [DATE OF DELIVERY.] When a document, 279.5 including a return, claim, or statement, is required to be 279.6 filed, or a payment is required to be made to the commissioner 279.7 within a prescribed period, or on or before a prescribed date, 279.8 and if the document or payment is delivered by electronic means 279.9 or by United States mail after the period or the date to the 279.10 place prescribed for filing or payment, then the date of 279.11 delivery or of payment is the date of the confirmation 279.12 time-and-date stamp of the transaction, if delivered by 279.13 electronic means, or the date of the United States postmark 279.14 stamped on the cover in which the document or payment is mailed, 279.15 if delivered by United States mailshall be considered the date279.16of delivery or of payment, as the case may be. 279.17 [EFFECTIVE DATE.] This section is effective for returns and 279.18 payments due on or after July 1, 2001. 279.19 Sec. 3. Minnesota Statutes 2000, section 270.271, 279.20 subdivision 3, is amended to read: 279.21 Subd. 3. [CONFIRMATION OF ELECTRONIC FILING AND PAYMENT 279.22 AND UNITED STATES POSTAL SERVICE POSTMARK.] The confirmation 279.23 numbers and confirmation time-and-date stamps received by the 279.24 taxpayer following electronic payment or filing is proof of the 279.25 payment authorization and filing dates. Only the postmark of 279.26 the United States Postal Service, rather than those of private 279.27 postage meters, qualifies as proof of timely mailing under this 279.28 section. If the document or payment is sent by United States 279.29 registered mail, the date of registration shall be treated as 279.30 the postmark date. If the document or payment is sent by United 279.31 States certified mail and the sender's receipt is postmarked by 279.32 the postal employee to whom the envelope containing such 279.33 document or payment is presented, the date of the United States 279.34 postmark on the receipt shall be treated as the postmark date of 279.35 the document or payment. 279.36 [EFFECTIVE DATE.] This section is effective for returns and 280.1 payments due on or after July 1, 2001. 280.2 Sec. 4. Minnesota Statutes 2000, section 270.771, is 280.3 amended to read: 280.4 270.771 [PAYMENTS REQUIRED TO BE MADEBY ELECTRONIC FUNDS280.5TRANSFERELECTRONICALLY.] 280.6 (a) If a taxpayer is required to make payment of a tax to 280.7 the commissioner by electronic meansof electronic funds280.8transfer as defined in section 336.4A-104, paragraph (a), the 280.9 taxpayer shall make all payments of all taxes and fees paid to 280.10 the commissioner by electronic meansof electronic funds280.11transfer. 280.12 (b) Paragraph (a) does not apply to payments required to be 280.13 made for individual income taxes under section 289A.20, 280.14 subdivision 1, paragraph (a), or 289A.25. 280.15 [EFFECTIVE DATE.] This section is effective the day 280.16 following final enactment. 280.17 Sec. 5. Minnesota Statutes 2000, section 270.78, is 280.18 amended to read: 280.19 270.78 [PENALTY FOR FAILURE TOMAKE PAYMENT BY ELECTRONIC280.20FUNDS TRANSFERPAY ELECTRONICALLY.] 280.21 In addition to other applicable penalties imposed by law, 280.22 after notification from the commissioner of revenue to the 280.23 taxpayer that payments for a tax administered by the 280.24 commissioner are required to be made by electronic meansof280.25electronic funds transfer, and the payments are remitted by some 280.26 other means, there is a penalty in the amount of five percent of 280.27 each payment that should have been remitted electronically. 280.28 After the commissioner's initial notification to the taxpayer 280.29 that payments are required to be made by electronic means, the 280.30 commissioner is not required to notify the taxpayer in 280.31 subsequent periods if the initial notification specified the 280.32 amount of tax liability at which a taxpayer is required to remit 280.33 payments by electronic means. The penalty can be abated under 280.34 the abatement procedures prescribed in section 270.07, 280.35 subdivision 6, if the failure to remit the payment 280.36 electronically is due to reasonable cause. The penalty bears 281.1 interest at the rate specified in section 270.75 from the due 281.2 date of the payment of the tax to the date of payment of the 281.3 penalty. 281.4 [EFFECTIVE DATE.] This section is effective the day 281.5 following final enactment. 281.6 Sec. 6. Minnesota Statutes 2000, section 287.12, is 281.7 amended to read: 281.8 287.12 [TAXES, HOW APPORTIONED.] 281.9 (a) All taxes paid to the county treasurer under the 281.10 provisions of sections 287.01 to 287.12 must be apportioned, 97 281.11 percent to the general fund of the state, and three percent to 281.12 the county revenue fund. 281.13 (b) On or before the 20th day of each month the county 281.14 treasurer shall determine and pay to the commissioner of revenue 281.15 for deposit in the state treasury and credit to the general fund 281.16 the state's portion of the receipts from the mortgage registry 281.17 tax during the preceding month subject to the electronicfunds281.18transferpayment requirements of section 270.771. The county 281.19 treasurer shall provide any related reports requested by the 281.20 commissioner of revenue. 281.21 [EFFECTIVE DATE.] This section is effective the day 281.22 following final enactment. 281.23 Sec. 7. Minnesota Statutes 2000, section 289A.02, is 281.24 amended by adding a subdivision to read: 281.25 Subd. 8. [ELECTRONIC MEANS.] "Electronic means" refers to 281.26 a method that is electronic, as defined in section 325L.02, 281.27 paragraph (e), and that is prescribed by the commissioner. 281.28 [EFFECTIVE DATE.] This section is effective the day 281.29 following final enactment. 281.30 Sec. 8. Minnesota Statutes 2000, section 289A.18, 281.31 subdivision 4, as amended by Laws 2001, chapter 7, section 56, 281.32 is amended to read: 281.33 Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use 281.34 tax returns must be filed on or before the 20th day of the month 281.35 following the close of the preceding reporting period, except 281.36 that annual use tax returns provided for under section 289A.11, 282.1 subdivision 1, must be filed by April 15 following the close of 282.2 the calendar year, in the case of individuals. Annual use tax 282.3 returns of businesses, including sole proprietorships, and 282.4 annual sales tax returns must be filed by February 5 following 282.5 the close of the calendar year. 282.6 (b)Except for the return for the June reporting period,282.7which is due on the following August 25,Returns for the June 282.8 reporting period filed by retailers required to 282.9 remitliabilities by means of funds transfertheir June 282.10 liability under section 289A.20, subdivision 4, 282.11 paragraph(c)(b), are due on or beforethe 25th day of the282.12month following the close of the preceding reporting282.13periodAugust 20. 282.14 (c) If a retailer has an average sales and use tax 282.15 liability, including local sales and use taxes administered by 282.16 the commissioner, equal to or less than $500 per month in any 282.17 quarter of a calendar year, and has substantially complied with 282.18 the tax laws during the preceding four calendar quarters, the 282.19 retailer may request authorization to file and pay the taxes 282.20 quarterly in subsequent calendar quarters. The authorization 282.21 remains in effect during the period in which the retailer's 282.22 quarterly returns reflect sales and use tax liabilities of less 282.23 than $1,500 and there is continued compliance with state tax 282.24 laws. 282.25 (d) If a retailer has an average sales and use tax 282.26 liability, including local sales and use taxes administered by 282.27 the commissioner, equal to or less than $100 per month during a 282.28 calendar year, and has substantially complied with the tax laws 282.29 during that period, the retailer may request authorization to 282.30 file and pay the taxes annually in subsequent years. The 282.31 authorization remains in effect during the period in which the 282.32 retailer's annual returns reflect sales and use tax liabilities 282.33 of less than $1,200 and there is continued compliance with state 282.34 tax laws. 282.35 (e) The commissioner may also grant quarterly or annual 282.36 filing and payment authorizations to retailers if the 283.1 commissioner concludes that the retailers' future tax 283.2 liabilities will be less than the monthly totals identified in 283.3 paragraphs (c) and (d). An authorization granted under this 283.4 paragraph is subject to the same conditions as an authorization 283.5 granted under paragraphs (c) and (d). 283.6 (f) A taxpayer who is a materials supplier may report gross 283.7 receipts either on: 283.8 (1) the cash basis as the consideration is received; or 283.9 (2) the accrual basis as sales are made. 283.10 As used in this paragraph, "materials supplier" means a person 283.11 who provides materials for the improvement of real property; who 283.12 is primarily engaged in the sale of lumber and building 283.13 materials-related products to owners, contractors, 283.14 subcontractors, repairers, or consumers; who is authorized to 283.15 file a mechanics lien upon real property and improvements under 283.16 chapter 514; and who files with the commissioner an election to 283.17 file sales and use tax returns on the basis of this paragraph. 283.18 [EFFECTIVE DATE.] This section is effective for returns due 283.19 on or after July 1, 2001. 283.20 Sec. 9. Minnesota Statutes 2000, section 289A.20, 283.21 subdivision 1, is amended to read: 283.22 Subdivision 1. [INDIVIDUAL INCOME, FIDUCIARY INCOME, 283.23 MINING COMPANY, CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] 283.24 (a) Individual income, fiduciary, mining company, and corporate 283.25 franchise taxes must be paid to the commissioner on or before 283.26 the date the return must be filed under section 289A.18, 283.27 subdivision 1, or the extended due date as provided in section 283.28 289A.19, unless an earlier date for payment is provided. 283.29 Notwithstanding any other law, a taxpayer whose unpaid 283.30 liability for income or corporate franchise taxes, as reflected 283.31 upon the return, is $1 or less need not pay the tax. 283.32 (b) Entertainment taxes must be paid on or before the date 283.33 the return must be filed under section 289A.18, subdivision 1. 283.34 (c) If a fiduciary administers 100 or more trusts, 283.35 fiduciary income taxes for all trusts administered by the 283.36 fiduciary must be paid byfunds transfer as defined in section284.1336.4A-104, paragraph (a). The funds transfer payment date, as284.2defined in section 336.4A-401, must be on or before the date the284.3tax payment is due. If the date the payment is due is not a284.4funds transfer business day, as defined in section 336.4A-105,284.5paragraph (a), clause (4), the payment date must be on or before284.6the funds transfer business day next following the date the284.7payment is dueelectronic means. 284.8 [EFFECTIVE DATE.] This section is effective the day 284.9 following final enactment. 284.10 Sec. 10. Minnesota Statutes 2000, section 289A.20, 284.11 subdivision 2, is amended to read: 284.12 Subd. 2. [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 284.13 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 284.14 WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 284.15 (a) A tax required to be deducted and withheld during the 284.16 quarterly period must be paid on or before the last day of the 284.17 month following the close of the quarterly period, unless an 284.18 earlier time for payment is provided. A tax required to be 284.19 deducted and withheld from compensation of an entertainer and 284.20 from a payment to an out-of-state contractor must be paid on or 284.21 before the date the return for such tax must be filed under 284.22 section 289A.18, subdivision 2. Taxes required to be deducted 284.23 and withheld by partnerships and S corporations must be paid on 284.24 or before the date the return must be filed under section 284.25 289A.18, subdivision 2. 284.26 (b) An employer who, during the previous quarter, withheld 284.27 more than $1,500 of tax under section 290.92, subdivision 2a or 284.28 3, or 290.923, subdivision 2, must deposit tax withheld under 284.29 those sections with the commissioner within the time allowed to 284.30 deposit the employer's federal withheld employment taxes under 284.31 Treasury Regulation, section 31.6302-1, without regard to the 284.32 safe harbor or de minimis rules in subparagraph (f) or the 284.33 one-day rule in subsection (c), clause (3). Taxpayers must 284.34 submit a copy of their federal notice of deposit status to the 284.35 commissioner upon request by the commissioner. 284.36 (c) The commissioner may prescribe by rule other return 285.1 periods or deposit requirements. In prescribing the reporting 285.2 period, the commissioner may classify payors according to the 285.3 amount of their tax liability and may adopt an appropriate 285.4 reporting period for the class that the commissioner judges to 285.5 be consistent with efficient tax collection. In no event will 285.6 the duration of the reporting period be more than one year. 285.7 (d) If less than the correct amount of tax is paid to the 285.8 commissioner, proper adjustments with respect to both the tax 285.9 and the amount to be deducted must be made, without interest, in 285.10 the manner and at the times the commissioner prescribes. If the 285.11 underpayment cannot be adjusted, the amount of the underpayment 285.12 will be assessed and collected in the manner and at the times 285.13 the commissioner prescribes. 285.14 (e) If the aggregate amount of the tax withheld during a 285.15 fiscal year ending June 30 under section 290.92, subdivision 2a 285.16 or 3, is equal to or exceeds the amounts established for 285.17 remitting federal withheld taxes pursuant to the regulations 285.18 promulgated under section 6302(h) of the Internal Revenue Code, 285.19 the employer must remit each required deposit for wages paid in 285.20 the subsequent calendar year by electronic meansof a funds285.21transfer as defined in section 336.4A-104, paragraph (a). The285.22funds transfer payment date, as defined in section 336.4A-401,285.23must be on or before the date the deposit is due. If the date285.24the deposit is due is not a funds transfer business day, as285.25defined in section 336.4A-105, paragraph (a), clause (4), the285.26payment date must be on or before the funds transfer business285.27day next following the date the deposit is due. 285.28 (f) A third-party bulk filer as defined in section 290.92, 285.29 subdivision 30, paragraph (a), clause (2), who remits 285.30 withholding deposits must remit all deposits by electronic means 285.31of a funds transferas provided in paragraph (e), regardless of 285.32 the aggregate amount of tax withheld during a fiscal year for 285.33 all of the employers. 285.34 [EFFECTIVE DATE.] This section is effective the day 285.35 following final enactment. 285.36 Sec. 11. Minnesota Statutes 2000, section 289A.20, 286.1 subdivision 4, is amended to read: 286.2 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 286.3 chapter 297A are due and payable to the commissioner monthly on 286.4 or before the 20th day of the month following the month in which 286.5 the taxable event occurred, or following another reporting 286.6 period as the commissioner prescribes or as allowed under 286.7 section 289A.18, subdivision 4, paragraph (f), except that use 286.8 taxes due on an annual use tax return as provided under section 286.9 289A.11, subdivision 1, are payable by April 15 following the 286.10 close of the calendar year. 286.11 (b) A vendor having a liability of $120,000 or more during 286.12 a fiscal year ending June 30 must remit the June liability for 286.13 the next year in the following manner: 286.14 (1) Two business days before June 30 of the year, the 286.15 vendor must remit 62 percent of the estimated June liability to 286.16 the commissioner. 286.17 (2) On or before August1420 of the year, the vendor must 286.18 pay any additional amount of tax not remitted in June. 286.19 (c) A vendor having a liability of $120,000 or more during 286.20 a fiscal year ending June 30 must remit all liabilities on 286.21 returns due for periods beginning in the subsequent calendar 286.22 year by electronic meansof a funds transfer as defined in286.23section 336.4A-104, paragraph (a). The funds transfer payment286.24date, as defined in section 336.4A-401, must beon or before the 286.2514th20th day of the month following the month in which the 286.26 taxable event occurred, or on or before the14th20th day of the 286.27 month following the month in which the sale is reported under 286.28 section 289A.18, subdivision 4, except for 62 percent of the 286.29 estimated June liability, which is due two business days before 286.30 June 30. The remaining amount of the June liability is due on 286.31 August1420.If the date the tax is due is not a funds286.32transfer business day, as defined in section 336.4A-105,286.33paragraph (a), clause (4), the payment date must be on or before286.34the funds transfer business day next following the date the tax286.35is due.286.36(d) If the vendor required to remit by electronic funds287.1transfer as provided in paragraph (c) is unable due to287.2reasonable cause to determine the actual sales and use tax due287.3on or before the due date for payment, the vendor may remit an287.4estimate of the tax owed using one of the following options:287.5(1) 100 percent of the tax reported on the previous month's287.6sales and use tax return;287.7(2) 100 percent of the tax reported on the sales and use287.8tax return for the same month in the previous calendar year; or287.9(3) 95 percent of the actual tax due.287.10Any additional amount of tax that is not remitted on or287.11before the due date for payment, must be remitted with the287.12return. If a vendor fails to remit the actual liability or does287.13not remit using one of the estimate options by the due date for287.14payment, the vendor must remit actual liability as provided in287.15paragraph (c) in all subsequent periods. This paragraph does287.16not apply to the June sales and use tax liability.287.17 [EFFECTIVE DATE.] This section is effective for payments 287.18 due on or after July 1, 2001. 287.19 Sec. 12. Minnesota Statutes 2000, section 289A.26, 287.20 subdivision 2a, is amended to read: 287.21 Subd. 2a. [ELECTRONICFUNDS TRANSFERPAYMENTS.] If the 287.22 aggregate amount of estimated tax payments made during a 287.23 calendar year is equal to or exceeds $20,000, all estimated tax 287.24 payments in the subsequent calendar year must be paid 287.25 by electronic meansof a funds transfer as defined in section287.26336.4A-104, paragraph (a). The funds transfer payment date, as287.27defined in section 336.4A-401, must be on or before the date the287.28estimated tax payment is due. If the date the estimated tax287.29payment is due is not a funds transfer business day, as defined287.30in section 336.4A-105, paragraph (a), clause (4), the payment287.31date must be on or before the funds transfer business day next287.32following the date the estimated tax payment is due. 287.33 [EFFECTIVE DATE.] This section is effective the day 287.34 following final enactment. 287.35 Sec. 13. Minnesota Statutes 2000, section 289A.60, 287.36 subdivision 21, as amended by Laws 2001, chapter 7, section 60, 288.1 is amended to read: 288.2 Subd. 21. [PENALTY FOR FAILURE TO MAKE PAYMENT BY 288.3 ELECTRONICFUNDS TRANSFERMEANS.] In addition to other 288.4 applicable penalties imposed by this section, after notification 288.5 from the commissioner to the taxpayer that payments are required 288.6 to be made by electronic meansof electronic funds transfer288.7 under section 289A.20, subdivision 2, paragraph (e), or 4, 288.8 paragraph (c), or 289A.26, subdivision 2a, and the payments are 288.9 remitted by some other means, there is a penalty in the amount 288.10 of five percent of each payment that should have been remitted 288.11 electronically. After the commissioner's initial notification 288.12 to the taxpayer that payments are required to be made by 288.13 electronic means, the commissioner is not required to notify the 288.14 taxpayer in subsequent periods if the initial notification 288.15 specified the amount of tax liability at which a taxpayer is 288.16 required to remit payments by electronic means. The penalty can 288.17 be abated under the abatement procedures prescribed in section 288.18 270.07, subdivision 6, if the failure to remit the payment 288.19 electronically is due to reasonable cause. 288.20 [EFFECTIVE DATE.] This section is effective the day 288.21 following final enactment. 288.22 Sec. 14. Minnesota Statutes 2000, section 295.55, 288.23 subdivision 4, is amended to read: 288.24 Subd. 4. [ELECTRONICFUNDS TRANSFERPAYMENTS.] A taxpayer 288.25 with an aggregate tax liability of $120,000 or more during a 288.26 fiscal year ending June 30,must remit all liabilities by 288.27 electronic meansof a funds transfer as defined in section288.28336.4A-104, paragraph (a),in the subsequent calendar year.The288.29funds transfer payment date, as defined in section 336.4A-401,288.30is on or before the date the tax is due. If the date the tax is288.31due is not a funds-transfer business day, as defined in section288.32336.4A-105, paragraph (a), clause (4), the payment date is on or288.33before the first funds-transfer business day after the date the288.34tax is due.288.35 [EFFECTIVE DATE.] This section is effective the day 288.36 following final enactment. 289.1 Sec. 15. Minnesota Statutes 2000, section 296A.15, 289.2 subdivision 7, is amended to read: 289.3 Subd. 7. [ELECTRONICFUNDS TRANSFERPAYMENT REQUIRED.] All 289.4 remittances must be made by electronic meansof electronic funds289.5transfer as defined in section 336.4A-104, paragraph (a). The289.6funds transfer payment date, as defined in section 336.4A-401,289.7must be on or before the date the remittance is due. If the289.8date the remittance is due is not a funds transfer business day,289.9as defined in section 336.4A-105, paragraph (a), clause (4), the289.10payment date must be on or before the funds transfer business289.11day next following the date the remittance is due. 289.12 [EFFECTIVE DATE.] This section is effective the day 289.13 following final enactment. 289.14 Sec. 16. Minnesota Statutes 2000, section 297E.02, 289.15 subdivision 4, is amended to read: 289.16 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 289.17 on the sale of each deal of pull-tabs and tipboards sold by a 289.18 distributor. The rate of the tax is 1.7 percent of the ideal 289.19 gross of the pull-tab or tipboard deal. The sales tax imposed 289.20 by chapter 297A on the sale of the pull-tabs and tipboards by 289.21 the distributor is imposed on the retail sales price less the 289.22 tax imposed by this subdivision. The retail sale of pull-tabs 289.23 or tipboards by the organization is exempt from taxes imposed by 289.24 chapter 297A and is exempt from all local taxes and license fees 289.25 except a fee authorized under section 349.16, subdivision 8. 289.26 (b) The liability for the tax imposed by this section is 289.27 incurred when the pull-tabs and tipboards are delivered by the 289.28 distributor to the customer or to a common or contract carrier 289.29 for delivery to the customer, or when received by the customer's 289.30 authorized representative at the distributor's place of 289.31 business, regardless of the distributor's method of accounting 289.32 or the terms of the sale. 289.33 The tax imposed by this subdivision is imposed on all sales 289.34 of pull-tabs and tipboards, except the following: 289.35 (1) sales to the governing body of an Indian tribal 289.36 organization for use on an Indian reservation; 290.1 (2) sales to distributors licensed under the laws of 290.2 another state or of a province of Canada, as long as all 290.3 statutory and regulatory requirements are met in the other state 290.4 or province; 290.5 (3) sales of promotional tickets as defined in section 290.6 349.12; and 290.7 (4) pull-tabs and tipboards sold to an organization that 290.8 sells pull-tabs and tipboards under the exemption from licensing 290.9 in section 349.166, subdivision 2. A distributor shall require 290.10 an organization conducting exempt gambling to show proof of its 290.11 exempt status before making a tax-exempt sale of pull-tabs or 290.12 tipboards to the organization. A distributor shall identify, on 290.13 all reports submitted to the commissioner, all sales of 290.14 pull-tabs and tipboards that are exempt from tax under this 290.15 subdivision. 290.16 (c) A distributor having a liability of $120,000 or more 290.17 during a fiscal year ending June 30 must remit all liabilities 290.18 in the subsequent calendar year bya funds transfer as defined290.19in section 336.4A-104, paragraph (a). The funds transfer290.20payment date, as defined in section 336.4A-401, must be on or290.21before the date the tax is due. If the date the tax is due is290.22not a funds transfer business day, as defined in section290.23336.4A-105, paragraph (a), clause (4), the payment date must be290.24on or before the funds transfer business day next following the290.25date the tax is dueelectronic means. 290.26 (d) Any customer who purchases deals of pull-tabs or 290.27 tipboards from a distributor may file an annual claim for a 290.28 refund or credit of taxes paid pursuant to this subdivision for 290.29 unsold pull-tab and tipboard tickets. The claim must be filed 290.30 with the commissioner on a form prescribed by the commissioner 290.31 by March 20 of the year following the calendar year for which 290.32 the refund is claimed. The refund must be filed as part of the 290.33 customer's February monthly return. The refund or credit is 290.34 equal to 1.7 percent of the face value of the unsold pull-tab or 290.35 tipboard tickets, provided that the refund or credit will be 290.36 1.75 percent of the face value of the unsold pull-tab or 291.1 tipboard tickets for claims for a refund or credit of taxes 291.2 filed on the February 2001 monthly return. The refund claimed 291.3 will be applied as a credit against tax owing under this chapter 291.4 on the February monthly return. If the refund claimed exceeds 291.5 the tax owing on the February monthly return, that amount will 291.6 be refunded. The amount refunded will bear interest pursuant to 291.7 section 270.76 from 90 days after the claim is filed. 291.8 [EFFECTIVE DATE.] This section is effective the day 291.9 following final enactment. 291.10 Sec. 17. Minnesota Statutes 2000, section 297F.09, 291.11 subdivision 7, is amended to read: 291.12 Subd. 7. [ELECTRONICFUNDS TRANSFERPAYMENT.] A cigarette 291.13 or tobacco products distributor having a liability of $120,000 291.14 or more during a fiscal year ending June 30 must remit all 291.15 liabilities in the subsequent calendar year by electronic means 291.16of a fund transfer as defined in section 336.4A-104, paragraph291.17(a). The funds transfer payment date, as defined in section291.18336.4A-401, must be on or before the date the tax is due. If291.19the date the tax is due is not a funds transfer business day, as291.20defined in section 336.4A-105, paragraph (a), clause (4), the291.21payment date must be on or before the funds transfer day291.22immediately following the date the tax is due. 291.23 [EFFECTIVE DATE.] This section is effective the day 291.24 following final enactment. 291.25 Sec. 18. Minnesota Statutes 2000, section 297G.09, 291.26 subdivision 6, is amended to read: 291.27 Subd. 6. [ELECTRONICFUNDS TRANSFERPAYMENTS.] A licensed 291.28 brewer, importer, or wholesaler having an excise tax liability 291.29 of $120,000 or more during a fiscal year ending June 30 must 291.30 remit all excise tax liabilities in the subsequent calendar year 291.31 by electronic meansof a funds transfer as defined in section291.32336.4A-104, paragraph (a). The funds transfer payment date, as291.33defined in section 336.4A-401, must be on or before the date the291.34excise tax is due. If the date the excise tax is due is not a291.35funds transfer business day, as defined in section 336.4A-105,291.36paragraph (a), clause (4), the payment date must be on or before292.1the funds transfer business day next following the date the292.2excise tax is due. 292.3 [EFFECTIVE DATE.] This section is effective the day 292.4 following final enactment. 292.5 Sec. 19. Minnesota Statutes 2000, section 297I.35, 292.6 subdivision 2, is amended to read: 292.7 Subd. 2. [ELECTRONICFUNDS TRANSFERPAYMENTS.] If the 292.8 aggregate amount of tax and surcharges due under this chapter 292.9 during a calendar year is equal to or exceeds $120,000, or if 292.10 the taxpayer is required to make payment of any other tax to the 292.11 commissioner by electronic meansof electronic funds transfer as292.12defined in section 336.4A-104, paragraph (a), then all tax and 292.13 surcharge payments in the subsequent calendar year must be paid 292.14 by electronic meansof a funds transfer as defined in section292.15336.4A-104, paragraph (a). The funds transfer payment date, as292.16defined in section 336.4A-104, must be on or before the date the292.17payment is due. If the date the payment is due is not a funds292.18transfer business day, as defined in section 336.4A-105,292.19paragraph (a), clause (4), the payment date must be on or before292.20the funds transfer business day next following the date the292.21payment is due. 292.22 [EFFECTIVE DATE.] This section is effective the day 292.23 following final enactment. 292.24 Sec. 20. Minnesota Statutes 2000, section 297I.85, 292.25 subdivision 7, is amended to read: 292.26 Subd. 7. [PENALTY FOR FAILURE TOMAKE PAYMENT BY292.27ELECTRONIC FUNDS TRANSFERPAY ELECTRONICALLY.] In addition to 292.28 other applicable penalties imposed by this section, if the 292.29 commissioner notifies the taxpayer that payments are required to 292.30 be made by electronic meansof electronic funds transfer, and 292.31 the payments are made by some other means, a penalty is 292.32 imposed. The amount of the penalty is equal to five percent of 292.33 each payment that should have been paid electronically. After 292.34 the commissioner's initial notification to the taxpayer that 292.35 payments are required to be made by electronic means, the 292.36 commissioner is not required to notify the taxpayer in 293.1 subsequent periods if the initial notification specified the 293.2 amount of tax liability at which a taxpayer is required to remit 293.3 payments by electronic means. The penalty may be abated under 293.4 the abatement procedures prescribed in section 270.07, 293.5 subdivision 6, if the failure to pay electronically is due to 293.6 reasonable cause. 293.7 [EFFECTIVE DATE.] This section is effective the day 293.8 following final enactment. 293.9 Sec. 21. Minnesota Statutes 2000, section 473.843, 293.10 subdivision 3, is amended to read: 293.11 Subd. 3. [PAYMENT OF FEE.] On or before the 20th day of 293.12 each month each operator shall pay the fee due under this 293.13 section for the previous month, using a form provided by the 293.14 commissioner of revenue. 293.15 An operator having a fee of $120,000 or more during a 293.16 fiscal year ending June 30 must pay all fees in the subsequent 293.17 calendar year by electronic meansof a funds transfer as defined293.18in section 336.4A-104, paragraph (a). The funds transfer293.19payment date, as defined in section 336.4A-401, must be on or293.20before the date the fee is due. If the date the fee is due is293.21not a funds transfer business day, as defined in section293.22336.4A-105, paragraph (a), clause (4), the payment date must be293.23on or before the funds transfer business day next following the293.24date the fee is due. 293.25 [EFFECTIVE DATE.] This section is effective the day 293.26 following final enactment. 293.27 ARTICLE 11 293.28 MISCELLANEOUS 293.29 Section 1. [12.38] [STATE AGENCIES; TEMPORARY WAIVER OF 293.30 FEES.] 293.31 Notwithstanding any law to the contrary, a state agency as 293.32 defined in section 16B.01, subdivision 2, with the approval of 293.33 the governor, may waive fees that would otherwise be charged for 293.34 agency services. The waiver of fees must be confined to 293.35 geographic areas within a presidentially declared disaster area, 293.36 and to the minimum periods of time necessary to deal with the 294.1 emergency situation. The requirements of section 14.05, 294.2 subdivision 4, do not apply to a waiver made under this 294.3 section. The agency must promptly report the reasons for and 294.4 the impact of any suspended fees to the chairs of the 294.5 legislative committees that oversee the policy and budgetary 294.6 affairs of the agency. 294.7 [EFFECTIVE DATE.] This section is effective for disaster 294.8 declarations made after April 15, 2001. 294.9 Sec. 2. Minnesota Statutes 2000, section 16A.152, 294.10 subdivision 2, is amended to read: 294.11 Subd. 2. [ADDITIONAL REVENUES; PRIORITY.] If on the basis 294.12 of a forecast of general fund revenues and expenditures after 294.13 November 1 in an odd-numbered year, the commissioner of finance 294.14 determines that there will be a positive unrestricted budgetary 294.15 general fund balance at the close of the biennium, the 294.16 commissioner of finance must allocate moneyas follows:294.17(1)first, to the budget reserve until the total amount in 294.18 the account equals $622,000,000; then294.19(2) 60 percent to the property tax reform account294.20established in section 16A.1521; and294.21(3) 40 percent is, and then as an unrestricted balance in 294.22 the general fund. 294.23 The amounts necessary to meet the requirements of this 294.24 section are appropriated from the general fund within two weeks 294.25 after the forecast is released. 294.26 Sec. 3. Minnesota Statutes 2000, section 45.011, 294.27 subdivision 1, is amended to read: 294.28 Subdivision 1. [SCOPE.] As used in chapters 45 to 83, 294.29 155A, 309, 332, 345, and 359, and sections 325D.30 to 325D.42, 294.30 326.83 to 326.991, and 386.61 to 386.78, unless the context 294.31 indicates otherwise, the terms defined in this section have the 294.32 meanings given them. 294.33 Sec. 4. Minnesota Statutes 2000, section 270.06, is 294.34 amended to read: 294.35 270.06 [POWERS AND DUTIES.] 294.36 The commissioner of revenue shall: 295.1 (1) have and exercise general supervision over the 295.2 administration of the assessment and taxation laws of the state, 295.3 over assessors, town, county, and city boards of review and 295.4 equalization, and all other assessing officers in the 295.5 performance of their duties, to the end that all assessments of 295.6 property be made relatively just and equal in compliance with 295.7 the laws of the state; 295.8 (2) confer with, advise, and give the necessary 295.9 instructions and directions to local assessors and local boards 295.10 of review throughout the state as to their duties under the laws 295.11 of the state; 295.12 (3) direct proceedings, actions, and prosecutions to be 295.13 instituted to enforce the laws relating to the liability and 295.14 punishment of public officers and officers and agents of 295.15 corporations for failure or negligence to comply with the 295.16 provisions of the laws of this state governing returns of 295.17 assessment and taxation of property, and cause complaints to be 295.18 made against local assessors, members of boards of equalization, 295.19 members of boards of review, or any other assessing or taxing 295.20 officer, to the proper authority, for their removal from office 295.21 for misconduct or negligence of duty; 295.22 (4) require county attorneys to assist in the commencement 295.23 of prosecutions in actions or proceedings for removal, 295.24 forfeiture and punishment for violation of the laws of this 295.25 state in respect to the assessment and taxation of property in 295.26 their respective districts or counties; 295.27 (5) require town, city, county, and other public officers 295.28 to report information as to the assessment of property, 295.29 collection of taxes received from licenses and other sources, 295.30 and such other information as may be needful in the work of the 295.31 department of revenue, in such form and upon such blanks as the 295.32 commissioner may prescribe; 295.33 (6) require individuals, copartnerships, companies, 295.34 associations, and corporations to furnish information concerning 295.35 their capital, funded or other debt, current assets and 295.36 liabilities, earnings, operating expenses, taxes, as well as all 296.1 other statements now required by law for taxation purposes; 296.2 (7) subpoena witnesses, at a time and place reasonable 296.3 under the circumstances, to appear and give testimony, and to 296.4 produce books, records, papers and documents for inspection and 296.5 copying relating to any matter which the commissioner may have 296.6 authority to investigate or determine; 296.7 (8) issue a subpoena which does not identify the person or 296.8 persons with respect to whose liability the subpoena is issued, 296.9 but only if (a) the subpoena relates to the investigation of a 296.10 particular person or ascertainable group or class of persons, 296.11 (b) there is a reasonable basis for believing that such person 296.12 or group or class of persons may fail or may have failed to 296.13 comply with any law administered by the commissioner, (c) the 296.14 information sought to be obtained from the examination of the 296.15 records (and the identity of the person or persons with respect 296.16 to whose liability the subpoena is issued) is not readily 296.17 available from other sources, (d) the subpoena is clear and 296.18 specific as to the information sought to be obtained, and (e) 296.19 the information sought to be obtained is limited solely to the 296.20 scope of the investigation. Provided further that the party 296.21 served with a subpoena which does not identify the person or 296.22 persons with respect to whose tax liability the subpoena is 296.23 issued shall have the right, within 20 days after service of the 296.24 subpoena, to petition the district court for the judicial 296.25 district in which lies the county in which that party is located 296.26 for a determination as to whether the commissioner of revenue 296.27 has complied with all the requirements in (a) to (e), and thus, 296.28 whether the subpoena is enforceable. If no such petition is 296.29 made by the party served within the time prescribed, the 296.30 subpoena shall have the force and effect of a court order; 296.31 (9) cause the deposition of witnesses residing within or 296.32 without the state, or absent therefrom, to be taken, upon notice 296.33 to the interested party, if any, in like manner that depositions 296.34 of witnesses are taken in civil actions in the district court, 296.35 in any matter which the commissioner may have authority to 296.36 investigate or determine; 297.1 (10) investigate the tax laws of other states and countries 297.2 and to formulate and submit to the legislature such legislation 297.3 as the commissioner may deem expedient to prevent evasions of 297.4 assessment and taxing laws, and secure just and equal taxation 297.5 and improvement in the system of assessment and taxation in this 297.6 state; 297.7 (11) consult and confer with the governor upon the subject 297.8 of taxation, the administration of the laws in regard thereto, 297.9 and the progress of the work of the department of revenue, and 297.10 furnish the governor, from time to time, such assistance and 297.11 information as the governor may require relating to tax matters; 297.12 (12) transmit to the governor, on or before the third 297.13 Monday in December of each even-numbered year, and to each 297.14 member of the legislature, on or before November 15 of each 297.15 even-numbered year, the report of the department of revenue for 297.16 the preceding years, showing all the taxable property in the 297.17 state and the value of the same, in tabulated form; 297.18 (13) inquire into the methods of assessment and taxation 297.19 and ascertain whether the assessors faithfully discharge their 297.20 duties, particularly as to their compliance with the laws 297.21 requiring the assessment of all property not exempt from 297.22 taxation; 297.23 (14) administer and enforce the assessment and collection 297.24 of state taxes and fees, including the use of any remedy 297.25 available to nongovernmental creditors, and, from time to time, 297.26 make, publish, and distribute rules for the administration and 297.27 enforcement of assessments and fees administered by the 297.28 commissioner and state tax laws. The rules have the force of 297.29 law; 297.30 (15) prepare blank forms for the returns required by state 297.31 tax law and distribute them throughout the state, furnishing 297.32 them subject to charge on application; 297.33 (16) prescribe rules governing the qualification and 297.34 practice of agents, attorneys, or other persons representing 297.35 taxpayers before the commissioner. The rules may require that 297.36 those persons, agents, and attorneys show that they are of good 298.1 character and in good repute, have the necessary qualifications 298.2 to give taxpayers valuable services, and are otherwise competent 298.3 to advise and assist taxpayers in the presentation of their case 298.4 before being recognized as representatives of taxpayers. After 298.5 due notice and opportunity for hearing, the commissioner may 298.6 suspend and disbar from further practice before the commissioner 298.7 any person, agent, or attorney who is shown to be incompetent or 298.8 disreputable, who refuses to comply with the rules, or who with 298.9 intent to defraud, willfully or knowingly deceives, misleads, or 298.10 threatens a taxpayer or prospective taxpayer, by words, 298.11 circular, letter, or by advertisement. This clause does not 298.12 curtail the rights of individuals to appear in their own behalf 298.13 or partners or corporations' officers to appear in behalf of 298.14 their respective partnerships or corporations; 298.15 (17) appoint agents as the commissioner considers necessary 298.16 to make examinations and determinations. The agents have the 298.17 rights and powers conferred on the commissioner to subpoena, 298.18 examine, and copy books, records, papers, or memoranda, subpoena 298.19 witnesses, administer oaths and affirmations, and take 298.20 testimony. In addition to administrative subpoenas of the 298.21 commissioner and the agents, upon demand of the commissioner or 298.22 an agent, the court administrator of any district court shall 298.23 issue a subpoena for the attendance of a witness or the 298.24 production of books, papers, records, or memoranda before the 298.25 agent for inspection and copying. Disobedience of a court 298.26 administrator's subpoena shall be punished by the district court 298.27 of the district in which the subpoena is issued, or in the case 298.28 of a subpoena issued by the commissioner or an agent, by the 298.29 district court of the district in which the party served with 298.30 the subpoena is located, in the same manner as contempt of the 298.31 district court; 298.32 (18) appoint and employ additional help, purchase supplies 298.33 or materials, or incur other expenditures in the enforcement of 298.34 state tax laws as considered necessary. The salaries of all 298.35 agents and employees provided for in this chapter shall be fixed 298.36 by the appointing authority, subject to the approval of the 299.1 commissioner of administration; 299.2 (19) execute and administer any agreement with the 299.3 secretary of the treasury of the United States or a 299.4 representative of another state regarding the exchange of 299.5 information and administration of the tax laws; 299.6 (20)administer and enforce the provisions of sections299.7325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act;299.8(21)authorize the use of unmarked motor vehicles to 299.9 conduct seizures or criminal investigations pursuant to the 299.10 commissioner's authority; and 299.11(22)(21) exercise other powers and perform other duties 299.12 required of or imposed upon the commissioner of revenue by law. 299.13 Sec. 5. Minnesota Statutes 2000, section 270.07, 299.14 subdivision 3, is amended to read: 299.15 Subd. 3. [ADDITIONAL POWERS OF COMMISSIONER.] 299.16 Notwithstanding any other provision of law the commissioner of 299.17 revenue may, 299.18 (a) based upon the administrative costs of processing, 299.19 determine minimum standards for the determination of additional 299.20 tax for which an order shall be issued, and 299.21 (b) based upon collection costs as compared to the amount 299.22 of tax involved, determine minimum standards of collection, and 299.23 (c) based upon the administrative costs of processing, 299.24 determine the minimum amount of refunds for which an order shall 299.25 be issued and refund made where no claim therefor has been 299.26 filed, and 299.27 (d) cancel any amounts below these minimum standards 299.28 determined under (a) and (b) hereof, and 299.29 (e) based upon the inability of a taxpayer to pay a 299.30 delinquent tax liability, abate the liability if the taxpayer 299.31 agrees to perform uncompensated public service work for a state 299.32 agency, a political subdivision or public corporation of this 299.33 state, or a nonprofit educational, medical, or social service 299.34 agency. The department of corrections shall administer the work 299.35 program. No benefits under chapter 176 or 268 shall be 299.36 available, but a claim authorized under section 3.739 may be 300.1 made by the taxpayer. The state may not enter into any 300.2 agreement that has the purpose of or results in the displacement 300.3 of public employees by a delinquent taxpayer under this 300.4 section. The state must certify to the appropriate bargaining 300.5 agent or employees, as applicable, that the work performed by a 300.6 delinquent taxpayer will not result in the displacement of 300.7 currently employed workers or layoff from a substantially 300.8 equivalent position, including partial displacement such as 300.9 reduction in hours of nonovertime work, wages, or other 300.10 employment benefits, and 300.11 (f) based on a showing of reasonable cause reissue an 300.12 uncashed rebate warrant or check that has lapsed under any 300.13 provision of law relating to rebates or under section 290A.18, 300.14 subdivision 2. The authority to reissue warrants or checks 300.15 under this paragraph is limited to five years after the date of 300.16 issuance of the original warrant or check. 300.17 [EFFECTIVE DATE.] This section is effective the day 300.18 following final enactment. 300.19 Sec. 6. Minnesota Statutes 2000, section 270.07, is 300.20 amended by adding a subdivision to read: 300.21 Subd. 3a. [APPROPRIATION.] An amount sufficient for the 300.22 reissuance of rebate warrants authorized under this section is 300.23 appropriated to the commissioner from the general fund. 300.24 Sec. 7. [270.277] [NOTICES TO HOLDERS OF POWERS OF 300.25 ATTORNEY.] 300.26 If a taxpayer has executed a written power of attorney, in 300.27 a form prescribed by the commissioner, the commissioner shall 300.28 allow the taxpayer to elect, in writing, that all notices and 300.29 correspondence between the department of revenue and the 300.30 taxpayer will be sent to the holder of the power of attorney. 300.31 Sec. 8. [270.691] [PUBLICATION OF NAMES OF DELINQUENT 300.32 TAXPAYERS.] 300.33 Subdivision 1. [COMMISSIONER MAY PUBLISH.] (a) 300.34 Notwithstanding any other law, the commissioner may publish a 300.35 list or lists of taxpayers who owe delinquent taxes or fees 300.36 administered by the commissioner, and who meet the requirements 301.1 of paragraph (b). 301.2 (b) For purposes of this section, a taxpayer may be 301.3 included on a list if: 301.4 (1) the taxes or fees owed remain unpaid at least 180 days 301.5 after the dates they were due; 301.6 (2) the taxpayer's total liability for the taxes and fees, 301.7 including penalties, interest, and other charges, is at least 301.8 $5,000; and 301.9 (3) a tax lien has been filed or a judgment for the 301.10 liability has been entered against the taxpayer before notice is 301.11 given under subdivision 3. 301.12 (c) In the case of listed taxpayers that are business 301.13 entities, the commissioner may also list the names of 301.14 responsible persons assessed pursuant to section 270.101 for 301.15 listed liabilities, who are not protected from publication by 301.16 subdivision 2, and for whom the requirements of paragraph (b) 301.17 are satisfied with regard to the personal assessment. 301.18 (d) Before any list is published under this section, the 301.19 commissioner of revenue must certify in writing that each of the 301.20 conditions for publication as provided in this section has been 301.21 satisfied, and that procedures were followed to ensure the 301.22 accuracy of the list and notice was given to the affected 301.23 taxpayers. 301.24 Subd. 2. [REQUIRED AND EXCLUDED TAXPAYERS.] (a) The 301.25 commissioner may publish lists of some or all of the taxpayers 301.26 described in subdivision 1. A list must include the taxpayers 301.27 with the largest unpaid liabilities of the kind used to define 301.28 the list, subject to the limitations of paragraphs (b) and (c). 301.29 (b) For the purposes of this section, a tax or fee is not 301.30 delinquent if: 301.31 (1) an administrative or court action contesting the amount 301.32 or validity of the taxpayer's liability has been filed or served 301.33 and is unresolved at the time when notice would be given under 301.34 subdivision 3; 301.35 (2) an appeal period to contest the liability has not 301.36 expired; or 302.1 (3) the liability is subject to a payment agreement and 302.2 there is no delinquency in the payments required under the 302.3 agreement. 302.4 (c) Unpaid liabilities are not subject to publication if: 302.5 (1) the commissioner is in the process of reviewing or 302.6 adjusting the liability; 302.7 (2) the taxpayer is a debtor in a bankruptcy proceeding and 302.8 the automatic stay is in effect; 302.9 (3) the commissioner has been notified that the taxpayer is 302.10 deceased; or 302.11 (4) the time period for collecting the taxes or fees has 302.12 expired. 302.13 Subd. 3. [NOTICE TO TAXPAYER.] (a) At least 30 days before 302.14 publishing the name of a delinquent taxpayer, the commissioner 302.15 shall mail a written notice to the taxpayer, detailing the 302.16 amount and nature of each liability and the intended publication 302.17 of the information listed in subdivision 4 related to the 302.18 liability. The notice must be mailed by first class and 302.19 certified mail addressed to the last known address of the 302.20 taxpayer. The notice must include information regarding the 302.21 exceptions listed in subdivision 2 and must state that the 302.22 taxpayer's information will not be published if the taxpayer 302.23 pays the delinquent obligation, enters into an agreement to pay, 302.24 or provides information establishing that subdivision 2 302.25 prohibits publication of the taxpayer's name. 302.26 (b) After at least 30 days has elapsed since the notice was 302.27 mailed and the delinquent tax or fee has not been paid and the 302.28 taxpayer has not proved to the commissioner that subdivision 2 302.29 prohibits publication, the commissioner may publish in a list of 302.30 delinquent taxpayers the information about the taxpayer that is 302.31 listed in subdivision 4. 302.32 Subd. 4. [FORM OF LIST.] The list may be published by any 302.33 medium or method. The list must contain the name, address, type 302.34 of tax or fee, and period for which payment is due for each 302.35 liability, including penalties, interest, and other charges owed 302.36 by each listed delinquent taxpayer. 303.1 Subd. 5. [REMOVAL FROM LIST.] The commissioner shall 303.2 remove the name of a taxpayer from the list of delinquent 303.3 taxpayers after the commissioner receives written notice of and 303.4 verifies any of the following facts about the liability in 303.5 question: 303.6 (1) the taxpayer has contacted the commissioner and 303.7 arranged resolution of the liability; 303.8 (2) an active bankruptcy proceeding has been initiated for 303.9 the liability; 303.10 (3) a bankruptcy proceeding concerning the liability has 303.11 resulted in discharge of the liability; or 303.12 (4) the commissioner has written off the liability. 303.13 Subd. 6. [NAMES PUBLISHED IN ERROR.] If the commissioner 303.14 publishes a name under subdivision 1 in error, the taxpayer 303.15 whose name was erroneously published has a right to request a 303.16 retraction and apology. If the taxpayer so requests, the 303.17 commissioner shall publish a retraction and apology 303.18 acknowledging that the taxpayer's name was published in error. 303.19 The retraction and apology must appear in the same medium and 303.20 the same format as the original list that contained the name 303.21 listed in error. 303.22 Subd. 7. [PAYMENT OF DAMAGES.] Actions against the 303.23 commissioner of revenue or the state of Minnesota arising out of 303.24 the implementation of this program must be brought under section 303.25 270.276. If an action results in damages awarded to a taxpayer, 303.26 the damages must be paid out of the department of revenue 303.27 operating budget rather than in accordance with section 3.736, 303.28 subdivision 7. 303.29 Subd. 8. [EXPIRATION DATE.] The program authorized under 303.30 this section terminates on June 30, 2002. 303.31 [EFFECTIVE DATE.] This section is effective the day 303.32 following final enactment for all liabilities owing on that date 303.33 for which the statute of limitations for collection has not 303.34 expired, and all liabilities arising after that date. 303.35 Sec. 9. Minnesota Statutes 2000, section 297F.04, 303.36 subdivision 1, is amended to read: 304.1 Subdivision 1. [POWERS OF COMMISSIONER.] The commissioner 304.2 may revoke or suspend the license or licenses of any distributor 304.3 or subjobber for violation of this chapter, any other act 304.4 applicable to the sale of cigarettes or tobacco products, or any 304.5 rule promulgated by the commissioner, in furtherance of this 304.6 chapter.The commissioner may also revoke, cancel, or suspend304.7the license or licenses of any distributor or subjobber for304.8violation of sections 325D.30 to 325D.42.304.9 Sec. 10. Minnesota Statutes 2000, section 297F.13, 304.10 subdivision 4, is amended to read: 304.11 Subd. 4. [RETAILER AND SUBJOBBER TO PRESERVE PURCHASE 304.12 INVOICES.] Every retailer and subjobber shall procure itemized 304.13 invoices of all cigarettes or tobacco products purchased. 304.14 The retailer and subjobber shall preserve a legible copy of 304.15 each invoice for one year from the date of the invoice. The 304.16 retailer and subjobber shall preserve copies of the invoices at 304.17 each retail location or at a central location provided that the 304.18 invoice must be produced and made available at a retail location 304.19 within one hour when requested by the commissioner or duly 304.20 authorized agents and employees. Copies should be numbered and 304.21 kept in chronological order. 304.22 To determine whether the business is in compliance with the 304.23 provisions of this chapterand sections 325D.30 to 325D.42, at 304.24 any time during usual business hours, the commissioner, or duly 304.25 authorized agents and employees, may enter any place of business 304.26 of a retailer or subjobber without a search warrant and inspect 304.27 the premises, the records required to be kept under this 304.28 chapter, and the packages of cigarettes, tobacco products, and 304.29 vending devices contained on the premises. 304.30 Sec. 11. Minnesota Statutes 2000, section 325D.33, is 304.31 amended by adding a subdivision to read: 304.32 Subd. 2a. [COMMISSIONER.] "Commissioner" means the 304.33 commissioner of commerce or the commissioner's designated 304.34 representative. 304.35 Sec. 12. Minnesota Statutes 2000, section 325D.33, 304.36 subdivision 8, is amended to read: 305.1 Subd. 8. [PENALTIES.] (a) A retailer who sells cigarettes 305.2 for less than a legal retail price may be assessed a penalty in 305.3 the full amount of three times the difference between the actual 305.4 selling price and a legal price under sections 325D.30 to 305.5 325D.42. This penalty may be collected by the commissioner 305.6 under the authorities given the commissioner of revenue in 305.7chapterschapter 270and 297F, and the penalty shall bear 305.8 interest at the rate prescribed by section 270.75, subdivision 5. 305.9 (b) A wholesaler who sells cigarettes for less than a legal 305.10 price may be assessed a penalty in the full amount of three 305.11 times the difference between the actual selling price and the 305.12 legal price under sections 325D.30 to 325D.42. This penalty may 305.13 be collected by the commissioner under the authorities given the 305.14 commissioner of revenue inchapterschapter 270and 297F, and 305.15 the penalty shall bear interest at the rate prescribed by 305.16 section 270.75, subdivision 5. 305.17 (c) A retailer who engages in a plan, scheme, or device 305.18 with a wholesaler to purchase cigarettes at a price which the 305.19 retailer knows to be less than a legal price may be assessed a 305.20 penalty in the full amount of three times the difference between 305.21 the actual purchase price and the legal price under sections 305.22 325D.30 to 325D.42. A retailer that coerces or requires a 305.23 wholesaler to sell cigarettes at a price which the retailer 305.24 knows to be less than a legal price may be assessed a penalty in 305.25 the full amount of three times the difference between the actual 305.26 purchase price and the legal price. These penalties may be 305.27 collected by the commissioner under the authorities given the 305.28 commissioner of revenue inchapterschapter 270and 297F, and 305.29 the penalties shall bear interest at the rate prescribed by 305.30 section 270.75, subdivision 5. 305.31 For purposes of this subdivision, a retailer is presumed to 305.32 know that a purchase price is less than a legal price if any of 305.33 the following have been done: 305.34 (1) the commissioner has published the legal price in the 305.35 Minnesota State Register; 305.36 (2) the commissioner has provided written notice to the 306.1 retailer of the legal price; 306.2 (3) the commissioner has provided written notice to the 306.3 retailer that the retailer is purchasing cigarettes for less 306.4 than a legal price; 306.5 (4) the commissioner has issued a written order to the 306.6 retailer to cease and desist from purchases of cigarettes for 306.7 less than a legal price; or 306.8 (5) there is evidence that the retailer has knowledge of, 306.9 or has participated in, efforts to disguise or misrepresent the 306.10 actual purchase price as equal to or more than a legal price, 306.11 when it is actually less than a legal price. 306.12 In any proceeding arising under this subdivision, the 306.13 commissioner shall have the burden of providing by a reasonable 306.14 preponderance of the evidence that the facts necessary to 306.15 establish the presumption set forth in this section exist, or 306.16 that the retailer had knowledge that a purchase price was less 306.17 than the legal price. 306.18 (d) The commissioner may not assess penalties against any 306.19 wholesaler, retailer, or combination of wholesaler and retailer, 306.20 which are greater than three times the difference between the 306.21 actual price and the legal price under sections 325D.30 to 306.22 325D.42. 306.23 Sec. 13. Minnesota Statutes 2000, section 325D.405, is 306.24 amended to read: 306.25 325D.405 [INVESTIGATIONS.] 306.26 The commissioner or duly authorized agents may conduct 306.27 investigations to determine compliance with the provisions of 306.28 sections 325D.30 to 325D.42 and, in connection with such 306.29 investigations, the commissioner and duly authorized agents have 306.30 all the powers conferred upon the commissioner by section270.06306.31 45.027. 306.32 Sec. 14. Minnesota Statutes 2000, section 325D.415, is 306.33 amended to read: 306.34 325D.415 [CIGARETTE DISTRIBUTOR FEES.] 306.35 A cigarette distributor as defined in section 297F.01, 306.36 subdivision 4, shall pay to the commissioner an annual fee as 307.1 follows: 307.2 (1) a fee of $2,500 is due from those distributors whose 307.3 annual cigarette tax collections exceed $2,000,000; and 307.4 (2) a fee of $1,200 is due from those distributors whose 307.5 annual cigarette tax collections are $2,000,000 or less. 307.6 The annual fee must be paid by December 31 of each year. 307.7If the fee is not paid when due, the commissioner shall revoke307.8or refuse to issue or renew the license under chapter 297F.The 307.9 annual fee must be deposited into the general fund. 307.10 Sec. 15. Minnesota Statutes 2000, section 345.41, is 307.11 amended to read: 307.12 345.41 [REPORT OF ABANDONED PROPERTY.] 307.13 (a) Every person holding funds or other property, tangible 307.14 or intangible, presumed abandoned under sections 345.31 to 307.15 345.60 shall report annually to the commissioner with respect to 307.16 the property as hereinafter provided. 307.17 (b) The report shall be verified and shall include: 307.18 (1) except with respect to traveler's checks and money 307.19 orders, the name, if known, and last known address, if any, of 307.20 each person appearing from the records of the holder to be the 307.21 owner of any property of the value of $100 or more presumed 307.22 abandoned under sections 345.31 to 345.60; 307.23 (2) in case of unclaimed funds of life insurance 307.24 corporations, the full name of the policyholder, insured or 307.25 annuitant and that person's last known address according to the 307.26 life insurance corporation's records; 307.27 (3) the nature and identifying number, if any, or 307.28 description of the property and the amount appearing from the 307.29 records to be due, except that items of value under $100 each 307.30 may be reported in aggregate; 307.31 (4) the date when the property became payable, demandable 307.32 or returnable, and the date of the last transaction with the 307.33 owner with respect to the property; and 307.34 (5) other information which the commissioner prescribes by 307.35 rule as necessary for the administration of sections 345.31 to 307.36 345.60. 308.1 (c) If the person holding property presumed abandoned is a 308.2 successor to other persons who previously held the property for 308.3 the owner, or if the holder has changed a name while holding the 308.4 property, the holder shall file with the report all prior known 308.5 names and addresses of each holder of the property. 308.6 (d) The report shall be filed before November 1 of each 308.7 year as of June 30 next preceding, but the report of life 308.8 insurance corporations shall be filed before October 1 of each 308.9 year as of December 31 next preceding. The commissioner may 308.10 postpone the reporting date upon written request by any person 308.11 required to file a report. 308.12 (e) Not more than 120 days before filing the report 308.13 required by this section, the holder in possession of property 308.14 abandoned and subject to custody as unclaimed property under 308.15 this chapter shall send written notice to the presumed owner at 308.16 that owner's last known address informing the owner that the 308.17 holder is in possession of property subject to this chapter and 308.18 advising the owner of the steps necessary to prevent abandonment 308.19 if: 308.20 (1) the holder has in its records an address for the 308.21 presumed owner that the holder's records do not disclose to be 308.22 inaccurate; 308.23 (2) the claim of the apparent owner is not barred by the 308.24 statute of limitations; and 308.25 (3) the property has a value of $100 or more. 308.26 (f) Verification, if made by a partnership, shall be 308.27 executed by a partner; if made by an unincorporated association 308.28 or private corporation, by an officer, and if made by a public 308.29 corporation, by its chief fiscal officer. 308.30 (g) Holders of property described in section 345.32 shall 308.31 not impose any charges against property which is described in 308.32 section 345.32, clause (a), (b) or (c). 308.33 (h) Any person who has possession of property which the 308.34 person has reason to believe will be reportable in the future as 308.35 unclaimed property may, with the permission of the commissioner, 308.36 report and deliver such property prior to the date required for 309.1 reporting in accordance with this section. 309.2 (i) Before the last day of each calendar year, the 309.3 commissioner of revenue shall report to the commissioner as 309.4 unclaimed property under this section any uncashed checks or 309.5 warrants for overpayments of taxes that were issued more than 309.6 two years preceding the date of the report. 309.7 [EFFECTIVE DATE.] This section is effective August 1, 2001. 309.8 Sec. 16. [471.699] [EXTENSION OF FINANCIAL REPORT FILING 309.9 TIME LIMITS; DISASTER AREAS.] 309.10 The time limit by which financial reports are required to 309.11 be filed under section 471.697 or 471.698, is extended by 90 309.12 days for any city or town located in whole or in part within a 309.13 presidentially declared disaster area, if the time period for 309.14 which the area is so designated includes at least one of the 30 309.15 days immediately preceding the time limit. 309.16 [EFFECTIVE DATE.] This section is effective for disaster 309.17 declarations made after April 15, 2001. 309.18 Sec. 17. Minnesota Statutes 2000, section 609.75, 309.19 subdivision 1, is amended to read: 309.20 Subdivision 1. [LOTTERY.] (a) A lottery is a plan which 309.21 provides for the distribution of money, property or other reward 309.22 or benefit to persons selected by chance from among participants 309.23 some or all of whom have given a consideration for the chance of 309.24 being selected. A participant's payment for use of a 900 309.25 telephone number or another means of communication that results 309.26 in payment to the sponsor of the plan constitutes consideration 309.27 under this paragraph. 309.28 (b) An in-package chance promotion is not a lottery if all 309.29 of the following are met: 309.30 (1) participation is available, free and without purchase 309.31 of the package, from the retailer or by mail or toll-free 309.32 telephone request to the sponsor for entry or for a game piece; 309.33 (2) the label of the promotional package and any related 309.34 advertising clearly states any method of participation and the 309.35 scheduled termination date of the promotion; 309.36 (3) the sponsor on request provides a retailer with a 310.1 supply of entry forms or game pieces adequate to permit free 310.2 participation in the promotion by the retailer's customers; 310.3 (4) the sponsor does not misrepresent a participant's 310.4 chances of winning any prize; 310.5 (5) the sponsor randomly distributes all game pieces and 310.6 maintains records of random distribution for at least one year 310.7 after the termination date of the promotion; 310.8 (6) all prizes are randomly awarded if game pieces are not 310.9 used in the promotion; and 310.10 (7) the sponsor provides on request of a state agency a 310.11 record of the names and addresses of all winners of prizes 310.12 valued at $100 or more, if the request is made within one year 310.13 after the termination date of the promotion. 310.14 (c) Except as provided by section 349.40, acts in this 310.15 state in furtherance of a lottery conducted outside of this 310.16 state are included notwithstanding its validity where conducted. 310.17 (d) The distribution of property, or other reward or 310.18 benefit by an employer to persons selected by chance from among 310.19 participants who have made a contribution through a payroll or 310.20 pension deduction campaign to a registered combined charitable 310.21 organization, within the meaning of section 309.501, as a 310.22 precondition to the chance of being selected, is not a lottery 310.23 if: 310.24 (1) all of the persons eligible to be selected are employed 310.25 by or retirees of the employer; and 310.26 (2) the cost of the property or other reward or benefit 310.27 distributed and all costs associated with the distribution are 310.28 borne by the employer; and310.29(3) the total amount actually expended by the employer to310.30obtain the property or other rewards or benefits distributed by310.31the employer during the calendar year does not exceed $500. 310.32 Sec. 18. [TRANSFER OF RESPONSIBILITIES.] 310.33 Minnesota Statutes, section 15.039, subdivisions 1 to 6 and 310.34 8, apply to the transfer of responsibilities made by this 310.35 article. Consistent with Minnesota Statutes, section 15.039, 310.36 subdivision 6, the commissioner of finance shall transfer a 311.1 portion of the general fund appropriations in fiscal years 2002 311.2 and 2003 for the department of revenue to the department of 311.3 commerce for the enforcement and administration of Minnesota 311.4 Statutes, sections 325D.30 to 325D.42. 311.5 Sec. 19. [REPEALER.] 311.6 (a) Minnesota Statutes 2000, section 16A.1521, is repealed 311.7 effective the day following final enactment. 311.8 (b) Minnesota Statutes 2000, section 325D.33, subdivision 311.9 5, is repealed effective the day following final enactment.