SF 382

1st Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; making technical corrections to 
  1.3             income, property, sales, and certain special taxes; 
  1.4             making technical corrections to certain state tax 
  1.5             administrative provisions; amending Minnesota Statutes 
  1.6             1998, sections 271.01, subdivision 5; 271.21, 
  1.7             subdivision 2; 289A.40, subdivision 1; 289A.60, 
  1.8             subdivisions 3 and 21; 290.0671, subdivision 1; 
  1.9             290.0921, subdivision 5; 290.095, subdivision 3; 
  1.10            290.17, subdivision 4; 297A.15, subdivision 5; 
  1.11            297F.01, subdivision 23; 297F.17, subdivision 6; 
  1.12            297H.06, subdivision 2; 462A.071, subdivision 2; 
  1.13            469.002, subdivision 10; and 469.012, subdivision 1; 
  1.14            repealing Minnesota Statutes 1998, sections 273.11, 
  1.15            subdivision 10; 297E.12, subdivision 3; 297F.19, 
  1.16            subdivision 4; and 297G.18, subdivision 4. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18                             ARTICLE 1
  1.19                     INCOME AND FRANCHISE TAXES
  1.20     Section 1.  Minnesota Statutes 1998, section 290.0671, 
  1.21  subdivision 1, is amended to read: 
  1.22     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
  1.23  allowed a credit against the tax imposed by this chapter equal 
  1.24  to a percentage of earned income.  To receive a credit, a 
  1.25  taxpayer must be eligible for a credit under section 32 of the 
  1.26  Internal Revenue Code.  
  1.27     (b) For individuals with no qualifying children, the credit 
  1.28  equals 1.1475 percent of the first $4,460 of earned income.  The 
  1.29  credit is reduced by 1.1475 percent of earned income or modified 
  1.30  adjusted gross income, whichever is greater, in excess of 
  1.31  $5,570, but in no case is the credit less than zero. 
  2.1      (c) For individuals with one qualifying child, the credit 
  2.2   equals 6.8 percent of the first $6,680 of earned income and 8.5 
  2.3   percent of earned income over $11,650 but less than $12,990.  
  2.4   The credit is reduced by 4.77 percent of earned income or 
  2.5   modified adjusted gross income, whichever is greater, in excess 
  2.6   of $14,560, but in no case is the credit less than zero. 
  2.7      (d) For individuals with two or more qualifying children, 
  2.8   the credit equals eight percent of the first $9,390 of earned 
  2.9   income and 20 percent of earned income over $14,350 but less 
  2.10  than $16,230.  The credit is reduced by 8.8 percent of earned 
  2.11  income or modified adjusted gross income, whichever is greater, 
  2.12  in excess of $17,280, but in no case is the credit less than 
  2.13  zero. 
  2.14     (e) For a nonresident or part-year resident, the credit 
  2.15  must be allocated based on the percentage calculated under 
  2.16  section 290.06, subdivision 2c, paragraph (e). 
  2.17     (f) For a person who was a resident for the entire tax year 
  2.18  and has earned income not subject to tax under this chapter, the 
  2.19  credit must be allocated based on the ratio of federal adjusted 
  2.20  gross income reduced by the earned income not subject to tax 
  2.21  under this chapter over federal adjusted gross income. 
  2.22     (g) The commissioner shall construct and make available to 
  2.23  taxpayers tables showing the amount of the credit at various 
  2.24  income levels.  The tables shall follow the schedule contained 
  2.25  in this subdivision, except that the commissioner may graduate 
  2.26  the transition between income brackets. 
  2.27     Sec. 2.  Minnesota Statutes 1998, section 290.0921, 
  2.28  subdivision 5, is amended to read: 
  2.29     Subd. 5.  [CHARITABLE CONTRIBUTIONS.] (a) A deduction from 
  2.30  alternative minimum taxable net income is allowed equal to 
  2.31  the contributions subject to the deduction for charitable 
  2.32  contributions under section 290.21, subdivision 3, without 
  2.33  application of the limitation in section 290.21, subdivision 3.  
  2.34  The deduction allowable for capital gain property is limited to 
  2.35  the adjusted basis of the property as defined in section 290.01, 
  2.36  subdivision 19f.  The term capital gain property has the meaning 
  3.1   given by section 170(b)(1)(C)(iv) of the Internal Revenue Code, 
  3.2   but does not include property to which an election under section 
  3.3   170(b)(1)(C)(iii) of the Internal Revenue Code applies. 
  3.4      (b) The amount of the deduction may not exceed 15 percent 
  3.5   of alternative minimum taxable net income less the deduction 
  3.6   allowed under subdivision 6. 
  3.7      Sec. 3.  Minnesota Statutes 1998, section 290.095, 
  3.8   subdivision 3, is amended to read: 
  3.9      Subd. 3.  [CARRYOVER.] (a) A net operating loss incurred in 
  3.10  a taxable year:  (i) beginning after December 31, 1986, shall be 
  3.11  a net operating loss carryover to each of the 15 taxable years 
  3.12  following the taxable year of such loss; (ii) beginning before 
  3.13  January 1, 1987, shall be a net operating loss carryover to each 
  3.14  of the five taxable years following the taxable year of such 
  3.15  loss subject to the provisions of Minnesota Statutes 1986, 
  3.16  section 290.095; and (iii) beginning before January 1, 1987, 
  3.17  shall be a net operating loss carryback to each of the three 
  3.18  taxable years preceding the loss year subject to the provisions 
  3.19  of Minnesota Statutes 1986, section 290.095. 
  3.20     (b) The entire amount of the net operating loss for any 
  3.21  taxable year shall be carried to the earliest of the taxable 
  3.22  years to which such loss may be carried.  The portion of such 
  3.23  loss which shall be carried to each of the other taxable years 
  3.24  shall be the excess, if any, of the amount of such loss over the 
  3.25  sum of the taxable net income, adjusted by the modifications 
  3.26  specified in subdivision 4, for each of the taxable years to 
  3.27  which such loss may be carried. 
  3.28     (c) Where a corporation does business both within and 
  3.29  without Minnesota, and apportions its income under the 
  3.30  provisions of section 290.191, the net operating loss deduction 
  3.31  incurred in any taxable year shall be allowed to the extent of 
  3.32  the apportionment ratio of the loss year. 
  3.33     (d) The provisions of sections 381, 382, and 384 of the 
  3.34  Internal Revenue Code apply to carryovers in certain corporate 
  3.35  acquisitions and special limitations on net operating loss 
  3.36  carryovers.  The limitation amount determined under section 382 
  4.1   shall be applied to net income, before apportionment, in each 
  4.2   post change year to which a loss is carried. 
  4.3      Sec. 4.  Minnesota Statutes 1998, section 290.17, 
  4.4   subdivision 4, is amended to read: 
  4.5      Subd. 4.  [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 
  4.6   business conducted wholly within this state or partly within and 
  4.7   partly without this state is part of a unitary business, the 
  4.8   entire income of the unitary business is subject to 
  4.9   apportionment pursuant to section 290.191.  Notwithstanding 
  4.10  subdivision 2, paragraph (c), none of the income of a unitary 
  4.11  business is considered to be derived from any particular source 
  4.12  and none may be allocated to a particular place except as 
  4.13  provided by the applicable apportionment formula.  The 
  4.14  provisions of this subdivision do not apply to farm income 
  4.15  subject to subdivision 5, paragraph (a), business income subject 
  4.16  to subdivision 5, paragraph (b) or (c), income of an insurance 
  4.17  company determined under section 290.35, or income of an 
  4.18  investment company determined under section 290.36. 
  4.19     (b) The term "unitary business" means business activities 
  4.20  or operations which are of mutual benefit, dependent upon, or 
  4.21  contributory to one another, individually or as a group.  The 
  4.22  term may be applied within a single legal entity or between 
  4.23  multiple entities and without regard to whether each entity is a 
  4.24  corporation, a partnership or a trust.  
  4.25     (c) Unity is presumed whenever there is unity of ownership, 
  4.26  operation, and use, evidenced by centralized management or 
  4.27  executive force, centralized purchasing, advertising, 
  4.28  accounting, or other controlled interaction, but the absence of 
  4.29  these centralized activities will not necessarily evidence a 
  4.30  nonunitary business. 
  4.31     (d) Where a business operation conducted in Minnesota is 
  4.32  owned by a business entity that carries on business activity 
  4.33  outside the state different in kind from that conducted within 
  4.34  this state, and the other business is conducted entirely outside 
  4.35  the state, it is presumed that the two business operations are 
  4.36  unitary in nature, interrelated, connected, and interdependent 
  5.1   unless it can be shown to the contrary.  
  5.2      (e) Unity of ownership is not deemed to exist when a 
  5.3   corporation is involved unless that corporation is a member of a 
  5.4   group of two or more business entities and more than 50 percent 
  5.5   of the voting stock of each member of the group is directly or 
  5.6   indirectly owned by a common owner or by common owners, either 
  5.7   corporate or noncorporate, or by one or more of the member 
  5.8   corporations of the group.  For this purpose, the term "voting 
  5.9   stock" shall include membership interests of mutual insurance 
  5.10  holding companies formed under section 60A.077.  
  5.11     (f) The net income and apportionment factors under section 
  5.12  290.191 or 290.20 of foreign corporations and other foreign 
  5.13  entities which are part of a unitary business shall not be 
  5.14  included in the net income or the apportionment factors of the 
  5.15  unitary business.  A foreign corporation or other foreign entity 
  5.16  which is required to file a return under this chapter shall file 
  5.17  on a separate return basis.  The net income and apportionment 
  5.18  factors under section 290.191 or 290.20 of foreign operating 
  5.19  corporations shall not be included in the net income or the 
  5.20  apportionment factors of the unitary business except as provided 
  5.21  in paragraph (g). 
  5.22     (g) The adjusted net income of a foreign operating 
  5.23  corporation shall be deemed to be paid as a dividend on the last 
  5.24  day of its taxable year to each shareholder thereof, in 
  5.25  proportion to each shareholder's ownership, with which such 
  5.26  corporation is engaged in a unitary business.  Such deemed 
  5.27  dividend shall be treated as a dividend under section 290.21, 
  5.28  subdivision 4. 
  5.29     Dividends actually paid by a foreign operating corporation 
  5.30  to a corporate shareholder which is a member of the same unitary 
  5.31  business as the foreign operating corporation shall be 
  5.32  eliminated from the net income of the unitary business in 
  5.33  preparing a combined report for the unitary business.  The 
  5.34  adjusted net income of a foreign operating corporation shall be 
  5.35  its net income adjusted as follows: 
  5.36     (1) any taxes paid or accrued to a foreign country, the 
  6.1   commonwealth of Puerto Rico, or a United States possession or 
  6.2   political subdivision of any of the foregoing shall be a 
  6.3   deduction; and 
  6.4      (2) the subtraction from federal taxable income for 
  6.5   payments received from foreign corporations or foreign operating 
  6.6   corporations under section 290.01, subdivision 19d, clause (11), 
  6.7   shall not be allowed. 
  6.8      If a foreign operating corporation incurs a net loss, 
  6.9   neither income nor deduction from that corporation shall be 
  6.10  included in determining the net income of the unitary business. 
  6.11     (h) For purposes of determining the net income of a unitary 
  6.12  business and the factors to be used in the apportionment of net 
  6.13  income pursuant to section 290.191 or 290.20, there must be 
  6.14  included only the income and apportionment factors of domestic 
  6.15  corporations or other domestic entities other than foreign 
  6.16  operating corporations that are determined to be part of the 
  6.17  unitary business pursuant to this subdivision, notwithstanding 
  6.18  that foreign corporations or other foreign entities might be 
  6.19  included in the unitary business.  
  6.20     (i) Deductions for expenses, interest, or taxes otherwise 
  6.21  allowable under this chapter that are connected with or 
  6.22  allocable against dividends, deemed dividends described in 
  6.23  paragraph (g), or royalties, fees, or other like income 
  6.24  described in section 290.01, subdivision 19d, clause (11), shall 
  6.25  not be disallowed. 
  6.26     (j) Each corporation or other entity that is part of a 
  6.27  unitary business must file combined reports as the commissioner 
  6.28  determines.  On the reports, all intercompany transactions 
  6.29  between entities included pursuant to paragraph (h) must be 
  6.30  eliminated and the entire net income of the unitary business 
  6.31  determined in accordance with this subdivision is apportioned 
  6.32  among the entities by using each entity's Minnesota factors for 
  6.33  apportionment purposes in the numerators of the apportionment 
  6.34  formula and the total factors for apportionment purposes of all 
  6.35  entities included pursuant to paragraph (h) in the denominators 
  6.36  of the apportionment formula. 
  7.1      (k) If a corporation has been divested from a unitary 
  7.2   business and is included in a combined report for a fractional 
  7.3   part of the common accounting period of the combined report:  
  7.4      (1) its income includable in the combined report is its 
  7.5   income incurred for that part of the year determined by 
  7.6   proration or separate accounting; and 
  7.7      (2) its sales, property, and payroll included in the 
  7.8   apportionment formula must be prorated or accounted for 
  7.9   separately. 
  7.10     Sec. 5.  [EFFECTIVE DATE.] 
  7.11     Section 1 is effective for tax years beginning after 
  7.12  December 31, 1997.  Sections 2 to 4 are effective for tax years 
  7.13  beginning on or after the day following final enactment. 
  7.14                             ARTICLE 2 
  7.15                           PROPERTY TAXES 
  7.16     Section 1.  Minnesota Statutes 1998, section 271.01, 
  7.17  subdivision 5, is amended to read: 
  7.18     Subd. 5.  [JURISDICTION.] The tax court shall have 
  7.19  statewide jurisdiction.  Except for an appeal to the supreme 
  7.20  court or any other appeal allowed under this subdivision, the 
  7.21  tax court shall be the sole, exclusive, and final authority for 
  7.22  the hearing and determination of all questions of law and fact 
  7.23  arising under the tax laws of the state, as defined in this 
  7.24  subdivision, in those cases that have been appealed to the tax 
  7.25  court and in any case that has been transferred by the district 
  7.26  court to the tax court.  The tax court shall have no 
  7.27  jurisdiction in any case that does not arise under the tax laws 
  7.28  of the state or in any criminal case or in any case determining 
  7.29  or granting title to real property or in any case that is under 
  7.30  the probate jurisdiction of the district court.  The small 
  7.31  claims division of the tax court shall have no jurisdiction in 
  7.32  any case dealing with property valuation or assessment for 
  7.33  property tax purposes until the taxpayer has appealed the 
  7.34  valuation or assessment to the county board of equalization, and 
  7.35  in those towns and cities which have not transferred their 
  7.36  duties to the county, the town or city board of equalization, 
  8.1   except for:  (i) those taxpayers whose original assessments are 
  8.2   determined by the commissioner of revenue; and (ii) those 
  8.3   taxpayers appealing a denial of a current year application for 
  8.4   the homestead classification for their property and the denial 
  8.5   was not reflected on a valuation notice issued in the year.  The 
  8.6   tax court shall have no jurisdiction in any case involving an 
  8.7   order of the state board of equalization unless a taxpayer 
  8.8   contests the valuation of property.  Laws governing taxes, aids, 
  8.9   and related matters administered by the commissioner of revenue, 
  8.10  laws dealing with property valuation, assessment or taxation of 
  8.11  property for property tax purposes, and any other laws that 
  8.12  contain provisions authorizing review of taxes, aids, and 
  8.13  related matters by the tax court shall be considered tax laws of 
  8.14  this state subject to the jurisdiction of the tax court.  This 
  8.15  subdivision shall not be construed to prevent an appeal, as 
  8.16  provided by law, to an administrative agency, board of 
  8.17  equalization, review under section 274.13, subdivision 1c, or to 
  8.18  the commissioner of revenue.  Wherever used in this chapter, the 
  8.19  term commissioner shall mean the commissioner of revenue, unless 
  8.20  otherwise specified. 
  8.21     Sec. 2.  Minnesota Statutes 1998, section 271.21, 
  8.22  subdivision 2, is amended to read: 
  8.23     Subd. 2.  [JURISDICTION.] At the election of the taxpayer, 
  8.24  the small claims division shall have jurisdiction only in the 
  8.25  following matters: 
  8.26     (a) in cases involving valuation, assessment, or taxation 
  8.27  of real or personal property, if the taxpayer has satisfied the 
  8.28  requirements of section 271.01, subdivision 5, and:  (i) the 
  8.29  issue is a denial of a current year application for the 
  8.30  homestead classification for the taxpayer's property and the 
  8.31  denial was not reflected on a valuation notice issued in the 
  8.32  year; or (ii) in the case of nonhomestead property, the 
  8.33  assessor's estimated market value is less than $100,000; or 
  8.34     (b) any other case concerning the tax laws as defined in 
  8.35  section 271.01, subdivision 5, in which the amount in 
  8.36  controversy does not exceed $5,000, including penalty and 
  9.1   interest. 
  9.2      Sec. 3.  Minnesota Statutes 1998, section 462A.071, 
  9.3   subdivision 2, is amended to read: 
  9.4      Subd. 2.  [APPLICATION.] (a) In order to qualify for 
  9.5   certification under subdivision 1, the owner or manager of the 
  9.6   property must annually apply to the agency.  The application 
  9.7   must be in the form prescribed by the agency, contain the 
  9.8   information required by the agency, and be submitted by the date 
  9.9   and time specified by the agency.  Beginning in calendar year 
  9.10  2000, the agency shall adopt procedures and deadlines for making 
  9.11  application to permit certification of the units qualifying to 
  9.12  the assessor by no later than April 1 of the assessment year.  
  9.13     (b) Each application must include: 
  9.14     (1) the property tax identification number; 
  9.15     (2) the number, type, and size of units the applicant seeks 
  9.16  to qualify as low-income housing under class 4d; 
  9.17     (3) the number, type, and size of units in the property for 
  9.18  which the applicant is not seeking qualification, if any; 
  9.19     (4) a certification that the property has been inspected by 
  9.20  a qualified inspector within the past three years and meets the 
  9.21  minimum housing quality standards or is exempt from the 
  9.22  inspection requirement under subdivision 4; 
  9.23     (5) a statement indicating the qualifying units in 
  9.24  compliance with the income limits; 
  9.25     (6) an executed agreement to restrict rents meeting the 
  9.26  requirements specified by the agency or executed leases for the 
  9.27  units for which qualification as low-income housing as class 4d 
  9.28  under section 273.13 is sought and the rent schedule; and 
  9.29     (7) any additional information the agency deems appropriate 
  9.30  to require. 
  9.31     (c) The applicant must pay a per-unit application fee to be 
  9.32  set by the agency.  The application fee charged by the agency 
  9.33  must approximately equal the costs of processing and reviewing 
  9.34  the applications.  The fee must be deposited in the housing 
  9.35  development fund. 
  9.36     Sec. 4.  Minnesota Statutes 1998, section 469.002, 
 10.1   subdivision 10, is amended to read: 
 10.2      Subd. 10.  [FEDERAL LEGISLATION.] "Federal legislation" 
 10.3   includes the United States Housing Act of 1937, United States 
 10.4   Code, title 42, sections 1401 to 1440, as amended through 
 10.5   December 31, 1989 1998; the National Housing Act, United States 
 10.6   Code, title 12, sections 1701 to 1750g, as amended through 
 10.7   December 31, 1989; and any other legislation of the Congress of 
 10.8   the United States relating to federal assistance for clearance 
 10.9   or rehabilitation of substandard or blighted areas, land 
 10.10  assembly, redevelopment projects, or housing. 
 10.11     Sec. 5.  Minnesota Statutes 1998, section 469.012, 
 10.12  subdivision 1, is amended to read: 
 10.13     Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
 10.14  a public body corporate and politic and shall have all the 
 10.15  powers necessary or convenient to carry out the purposes of 
 10.16  sections 469.001 to 469.047, except that the power to levy and 
 10.17  collect taxes or special assessments is limited to the power 
 10.18  provided in sections 469.027 to 469.033.  Its powers include the 
 10.19  following powers in addition to others granted in sections 
 10.20  469.001 to 469.047:  
 10.21     (1) to sue and be sued; to have a seal, which shall be 
 10.22  judicially noticed, and to alter it; to have perpetual 
 10.23  succession; and to make, amend, and repeal rules consistent with 
 10.24  sections 469.001 to 469.047; 
 10.25     (2) to employ an executive director, technical experts, and 
 10.26  officers, agents, and employees, permanent and temporary, that 
 10.27  it requires, and determine their qualifications, duties, and 
 10.28  compensation; for legal services it requires, to call upon the 
 10.29  chief law officer of the city or to employ its own counsel and 
 10.30  legal staff; so far as practicable, to use the services of local 
 10.31  public bodies in its area of operation, provided that those 
 10.32  local public bodies, if requested, shall make the services 
 10.33  available; 
 10.34     (3) to delegate to one or more of its agents or employees 
 10.35  the powers or duties it deems proper; 
 10.36     (4) within its area of operation, to undertake, prepare, 
 11.1   carry out, and operate projects and to provide for the 
 11.2   construction, reconstruction, improvement, extension, 
 11.3   alteration, or repair of any project or part thereof; 
 11.4      (5) subject to the provisions of section 469.026, to give, 
 11.5   sell, transfer, convey, or otherwise dispose of real or personal 
 11.6   property or any interest therein and to execute leases, deeds, 
 11.7   conveyances, negotiable instruments, purchase agreements, and 
 11.8   other contracts or instruments, and take action that is 
 11.9   necessary or convenient to carry out the purposes of these 
 11.10  sections; 
 11.11     (6) within its area of operation, to acquire real or 
 11.12  personal property or any interest therein by gifts, grant, 
 11.13  purchase, exchange, lease, transfer, bequest, devise, or 
 11.14  otherwise, and by the exercise of the power of eminent domain, 
 11.15  in the manner provided by chapter 117, to acquire real property 
 11.16  which it may deem necessary for its purposes, after the adoption 
 11.17  by it of a resolution declaring that the acquisition of the real 
 11.18  property is necessary to eliminate one or more of the conditions 
 11.19  found to exist in the resolution adopted pursuant to section 
 11.20  469.003 or to provide decent, safe, and sanitary housing for 
 11.21  persons of low and moderate income, or is necessary to carry out 
 11.22  a redevelopment project.  Real property needed or convenient for 
 11.23  a project may be acquired by the authority for the project by 
 11.24  condemnation pursuant to this section.  This includes any 
 11.25  property devoted to a public use, whether or not held in trust, 
 11.26  notwithstanding that the property may have been previously 
 11.27  acquired by condemnation or is owned by a public utility 
 11.28  corporation, because the public use in conformity with the 
 11.29  provisions of sections 469.001 to 469.047 shall be deemed a 
 11.30  superior public use.  Property devoted to a public use may be so 
 11.31  acquired only if the governing body of the municipality has 
 11.32  approved its acquisition by the authority.  An award of 
 11.33  compensation shall not be increased by reason of any increase in 
 11.34  the value of the real property caused by the assembly, clearance 
 11.35  or reconstruction, or proposed assembly, clearance or 
 11.36  reconstruction for the purposes of sections 469.001 to 469.047 
 12.1   of the real property in an area; 
 12.2      (7) within its area of operation, and without the adoption 
 12.3   of an urban renewal plan, to acquire, by all means as set forth 
 12.4   in clause (6) but without the adoption of a resolution provided 
 12.5   for in clause (6), real property, and to demolish, remove, 
 12.6   rehabilitate, or reconstruct the buildings and improvements or 
 12.7   construct new buildings and improvements thereon, or to so 
 12.8   provide through other means as set forth in Laws 1974, chapter 
 12.9   228, or to grade, fill, and construct foundations or otherwise 
 12.10  prepare the site for improvements.  The authority may dispose of 
 12.11  the property pursuant to section 469.029, provided that the 
 12.12  provisions of section 469.029 requiring conformance to an urban 
 12.13  renewal plan shall not apply.  The authority may finance these 
 12.14  activities by means of the redevelopment project fund or by 
 12.15  means of tax increments or tax increment bonds or by the methods 
 12.16  of financing provided for in section 469.033 or by means of 
 12.17  contributions from the municipality provided for in section 
 12.18  469.041, clause (9), or by any combination of those means.  Real 
 12.19  property with buildings or improvements thereon shall only be 
 12.20  acquired under this clause when the buildings or improvements 
 12.21  are substandard.  The exercise of the power of eminent domain 
 12.22  under this clause shall be limited to real property which 
 12.23  contains, or has contained within the three years immediately 
 12.24  preceding the exercise of the power of eminent domain and is 
 12.25  currently vacant, buildings and improvements which are vacated 
 12.26  and substandard.  Notwithstanding the prior sentence, in cities 
 12.27  of the first class the exercise of the power of eminent domain 
 12.28  under this clause shall be limited to real property which 
 12.29  contains, or has contained within the three years immediately 
 12.30  preceding the exercise of the power of eminent domain, buildings 
 12.31  and improvements which are substandard.  For the purpose of this 
 12.32  clause, substandard buildings or improvements mean hazardous 
 12.33  buildings as defined in section 463.15, subdivision 3, or 
 12.34  buildings or improvements that are dilapidated or obsolescent, 
 12.35  faultily designed, lack adequate ventilation, light, or sanitary 
 12.36  facilities, or any combination of these or other factors that 
 13.1   are detrimental to the safety or health of the community; 
 13.2      (8) within its area of operation, to determine the level of 
 13.3   income constituting low or moderate family income.  The 
 13.4   authority may establish various income levels for various family 
 13.5   sizes.  In making its determination, the authority may consider 
 13.6   income levels that may be established by the Department of 
 13.7   Housing and Urban Development or a similar or successor federal 
 13.8   agency for the purpose of federal loan guarantees or subsidies 
 13.9   for persons of low or moderate income.  The authority may use 
 13.10  that determination as a basis for the maximum amount of income 
 13.11  for admissions to housing development projects or housing 
 13.12  projects owned or operated by it; 
 13.13     (9) to provide in federally assisted projects any 
 13.14  relocation payments and assistance necessary to comply with the 
 13.15  requirements of the Federal Uniform Relocation Assistance and 
 13.16  Real Property Acquisition Policies Act of 1970, and any 
 13.17  amendments or supplements thereto; 
 13.18     (10) to make an agreement with the governing body or bodies 
 13.19  creating the authority which provides exemption from all ad 
 13.20  valorem real and personal property taxes levied or imposed by 
 13.21  the body or bodies creating the authority.  In the case of 
 13.22  low-rent public housing that received financial assistance under 
 13.23  the United States Housing Act of 1937, or successor federal 
 13.24  legislation, an authority may make an agreement with the 
 13.25  governing body or bodies creating the authority to provide 
 13.26  exemption from all real and personal property taxes levied or 
 13.27  imposed by the state, city, county, or other political 
 13.28  subdivision, for which the authority shall make payments in lieu 
 13.29  of taxes to the state, city, county, or other political 
 13.30  subdivisions as provided in section 469.040.  The governing body 
 13.31  shall agree on behalf of all the applicable governing bodies 
 13.32  affected that local cooperation as required by the federal 
 13.33  government shall be provided by the local governing body or 
 13.34  bodies in whose jurisdiction the project is to be located, at no 
 13.35  cost or at no greater cost than the same public services and 
 13.36  facilities furnished to other residents; 
 14.1      (11) to cooperate with or act as agent for the federal 
 14.2   government, the state or any state public body, or any agency or 
 14.3   instrumentality of the foregoing, in carrying out any of the 
 14.4   provisions of sections 469.001 to 469.047 or of any other 
 14.5   related federal, state, or local legislation; and upon the 
 14.6   consent of the governing body of the city to purchase, lease, 
 14.7   manage, or otherwise take over any housing project already owned 
 14.8   and operated by the federal government; 
 14.9      (12) to make plans for carrying out a program of voluntary 
 14.10  repair and rehabilitation of buildings and improvements, and 
 14.11  plans for the enforcement of laws, codes, and regulations 
 14.12  relating to the use of land and the use and occupancy of 
 14.13  buildings and improvements, and to the compulsory repair, 
 14.14  rehabilitation, demolition, or removal of buildings and 
 14.15  improvements.  The authority may develop, test, and report 
 14.16  methods and techniques, and carry out demonstrations and other 
 14.17  activities for the prevention and elimination of slums and 
 14.18  blight; 
 14.19     (13) to borrow money or other property and accept 
 14.20  contributions, grants, gifts, services, or other assistance from 
 14.21  the federal government, the state government, state public 
 14.22  bodies, or from any other public or private sources; 
 14.23     (14) to include in any contract for financial assistance 
 14.24  with the federal government any conditions that the federal 
 14.25  government may attach to its financial aid of a project, not 
 14.26  inconsistent with purposes of sections 469.001 to 469.047, 
 14.27  including obligating itself (which obligation shall be 
 14.28  specifically enforceable and not constitute a mortgage, 
 14.29  notwithstanding any other laws) to convey to the federal 
 14.30  government the project to which the contract relates upon the 
 14.31  occurrence of a substantial default with respect to the 
 14.32  covenants or conditions to which the authority is subject; to 
 14.33  provide in the contract that, in case of such conveyance, the 
 14.34  federal government may complete, operate, manage, lease, convey, 
 14.35  or otherwise deal with the project until the defaults are cured 
 14.36  if the federal government agrees in the contract to reconvey to 
 15.1   the authority the project as then constituted when the defaults 
 15.2   have been cured; 
 15.3      (15) to issue bonds for any of its corporate purposes and 
 15.4   to secure the bonds by mortgages upon property held or to be 
 15.5   held by it or by pledge of its revenues, including grants or 
 15.6   contributions; 
 15.7      (16) to invest any funds held in reserves or sinking funds, 
 15.8   or any funds not required for immediate disbursement, in 
 15.9   property or securities in which savings banks may legally invest 
 15.10  funds subject to their control or in the manner and subject to 
 15.11  the conditions provided in section 118A.04 for the deposit and 
 15.12  investment of public funds; 
 15.13     (17) within its area of operation, to determine where 
 15.14  blight exists or where there is unsafe, unsanitary, or 
 15.15  overcrowded housing; 
 15.16     (18) to carry out studies of the housing and redevelopment 
 15.17  needs within its area of operation and of the meeting of those 
 15.18  needs.  This includes study of data on population and family 
 15.19  groups and their distribution according to income groups, the 
 15.20  amount and quality of available housing and its distribution 
 15.21  according to rentals and sales prices, employment, wages, 
 15.22  desirable patterns for land use and community growth, and other 
 15.23  factors affecting the local housing and redevelopment needs and 
 15.24  the meeting of those needs; to make the results of those studies 
 15.25  and analyses available to the public and to building, housing, 
 15.26  and supply industries; 
 15.27     (19) if a local public body does not have a planning agency 
 15.28  or the planning agency has not produced a comprehensive or 
 15.29  general community development plan, to make or cause to be made 
 15.30  a plan to be used as a guide in the more detailed planning of 
 15.31  housing and redevelopment areas; 
 15.32     (20) to lease or rent any dwellings, accommodations, lands, 
 15.33  buildings, structures, or facilities included in any project 
 15.34  and, subject to the limitations contained in sections 469.001 to 
 15.35  469.047 with respect to the rental of dwellings in housing 
 15.36  projects, to establish and revise the rents or charges therefor; 
 16.1      (21) to own, hold, and improve real or personal property 
 16.2   and to sell, lease, exchange, transfer, assign, pledge, or 
 16.3   dispose of any real or personal property or any interest 
 16.4   therein; 
 16.5      (22) to insure or provide for the insurance of any real or 
 16.6   personal property or operations of the authority against any 
 16.7   risks or hazards; 
 16.8      (23) to procure or agree to the procurement of government 
 16.9   insurance or guarantees of the payment of any bonds or parts 
 16.10  thereof issued by an authority and to pay premiums on the 
 16.11  insurance; 
 16.12     (24) to make expenditures necessary to carry out the 
 16.13  purposes of sections 469.001 to 469.047; 
 16.14     (25) to enter into an agreement or agreements with any 
 16.15  state public body to provide informational service and 
 16.16  relocation assistance to families, individuals, business 
 16.17  concerns, and nonprofit organizations displaced or to be 
 16.18  displaced by the activities of any state public body; 
 16.19     (26) to compile and maintain a catalog of all vacant, open 
 16.20  and undeveloped land, or land which contains substandard 
 16.21  buildings and improvements as that term is defined in clause 
 16.22  (7), that is owned or controlled by the authority or by the 
 16.23  governing body within its area of operation and to compile and 
 16.24  maintain a catalog of all authority owned real property that is 
 16.25  in excess of the foreseeable needs of the authority, in order to 
 16.26  determine and recommend if the real property compiled in either 
 16.27  catalog is appropriate for disposal pursuant to the provisions 
 16.28  of section 469.029, subdivisions 9 and 10; 
 16.29     (27) to recommend to the city concerning the enforcement of 
 16.30  the applicable health, housing, building, fire prevention, and 
 16.31  housing maintenance code requirements as they relate to 
 16.32  residential dwelling structures that are being rehabilitated by 
 16.33  low- or moderate-income persons pursuant to section 469.029, 
 16.34  subdivision 9, for the period of time necessary to complete the 
 16.35  rehabilitation, as determined by the authority; 
 16.36     (28) to recommend to the city the initiation of municipal 
 17.1   powers, against certain real properties, relating to repair, 
 17.2   closing, condemnation, or demolition of unsafe, unsanitary, 
 17.3   hazardous, and unfit buildings, as provided in section 469.041, 
 17.4   clause (5); 
 17.5      (29) to sell, at private or public sale, at the price or 
 17.6   prices determined by the authority, any note, mortgage, lease, 
 17.7   sublease, lease purchase, or other instrument or obligation 
 17.8   evidencing or securing a loan made for the purpose of economic 
 17.9   development, job creation, redevelopment, or community 
 17.10  revitalization by a public agency to a business, for-profit or 
 17.11  nonprofit organization, or an individual; 
 17.12     (30) within its area of operation, to acquire and sell real 
 17.13  property that is benefited by federal housing assistance 
 17.14  payments, other rental subsidies, interest reduction payments, 
 17.15  or interest reduction contracts for the purpose of preserving 
 17.16  the affordability of low- and moderate-income multifamily 
 17.17  housing; 
 17.18     (31) to apply for, enter into contracts with the federal 
 17.19  government, administer, and carry out a section 8 program.  
 17.20  Authorization by the governing body creating the authority to 
 17.21  administer the program at the authority's initial application is 
 17.22  sufficient to authorize operation of the program in its area of 
 17.23  operation for which it was created without additional local 
 17.24  governing body approval.  Approval by the governing body or 
 17.25  bodies creating the authority constitutes approval of a housing 
 17.26  program for purposes of any special or general law requiring 
 17.27  local approval of section 8 programs undertaken by city, county, 
 17.28  or multicounty authorities; and 
 17.29     (32) to secure a mortgage or loan for a rental housing 
 17.30  project by obtaining the appointment of receivers or assignments 
 17.31  of rents and profits under sections 559.17 and 576.01, except 
 17.32  that the limitation relating to the minimum amounts of the 
 17.33  original principal balances of mortgages specified in sections 
 17.34  559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 
 17.35  does not apply. 
 17.36     Sec. 6.  [REPEALER.] 
 18.1      Minnesota Statutes 1998, section 273.11, subdivision 10, is 
 18.2   repealed. 
 18.3      Sec. 7.  [EFFECTIVE DATE.] 
 18.4      Sections 1 and 2 are effective for petitions filed on or 
 18.5   after the day following final enactment.  Sections 3 to 6 are 
 18.6   effective the day following final enactment. 
 18.7                              ARTICLE 3
 18.8                            SPECIAL TAXES
 18.9      Section 1.  Minnesota Statutes 1998, section 297F.01, 
 18.10  subdivision 23, is amended to read: 
 18.11     Subd. 23.  [WHOLESALE PRICE.] "Wholesale price" means the 
 18.12  established price for which a manufacturer or person sells a 
 18.13  tobacco product to a distributor, exclusive of any discount or 
 18.14  other reduction. 
 18.15     Sec. 2.  Minnesota Statutes 1998, section 297F.17, 
 18.16  subdivision 6, is amended to read: 
 18.17     Subd. 6.  [TIME LIMIT FOR BAD DEBT DEDUCTION REFUND.] 
 18.18  Claims for refund must be filed with the commissioner within one 
 18.19  year of during the one-year period beginning with the timely 
 18.20  filing date of the taxpayer's federal income tax return 
 18.21  containing the bad debt deduction that is being claimed.  
 18.22  Claimants under this subdivision are subject to the notice 
 18.23  requirements of section 289A.38, subdivision 7. 
 18.24     Sec. 3.  Minnesota Statutes 1998, section 297H.06, 
 18.25  subdivision 2, is amended to read: 
 18.26     Subd. 2.  [MATERIALS.] The tax is not imposed upon charges 
 18.27  to generators of mixed municipal solid waste or upon the volume 
 18.28  of non-mixed-municipal solid waste for waste management services 
 18.29  to manage the following materials: 
 18.30     (1) mixed municipal solid waste and non-mixed-municipal 
 18.31  solid waste generated outside of Minnesota; 
 18.32     (2) recyclable materials that are separated for recycling 
 18.33  by the generator, collected separately from other waste, and 
 18.34  recycled, to the extent the price of the service for handling 
 18.35  recyclable material is separately itemized; 
 18.36     (3) recyclable non-mixed-municipal solid waste that is 
 19.1   separated for recycling by the generator, collected separately 
 19.2   from other waste, delivered to a waste facility for the purpose 
 19.3   of recycling, and recycled; 
 19.4      (4) industrial waste, when it is transported to a facility 
 19.5   owned and operated by the same person that generated it; 
 19.6      (5) mixed municipal solid waste from a recycling facility 
 19.7   that separates or processes recyclable materials and reduces the 
 19.8   volume of the waste by at least 85 percent, provided that the 
 19.9   exempted waste is managed separately from other waste; 
 19.10     (6) recyclable materials that are separated from mixed 
 19.11  municipal solid waste by the generator, collected and delivered 
 19.12  to a waste facility that recycles at least 85 percent of its 
 19.13  waste, and are collected with mixed municipal solid waste that 
 19.14  is segregated in leakproof bags, provided that the mixed 
 19.15  municipal solid waste does not exceed five percent of the total 
 19.16  weight of the materials delivered to the facility and is 
 19.17  ultimately delivered to a waste facility identified as a 
 19.18  preferred waste management facility in county solid waste plans 
 19.19  under section 115A.46; 
 19.20     (7) through December 31, 2002, source-separated compostable 
 19.21  waste, if the waste is delivered to a facility exempted as 
 19.22  described in this clause.  To initially qualify for an 
 19.23  exemption, a facility must apply for an exemption in its 
 19.24  application for a new or amended solid waste permit to the 
 19.25  pollution control agency.  The first time a facility applies to 
 19.26  the agency it must certify in its application that it will 
 19.27  comply with the criteria in items (i) to (v) and the 
 19.28  commissioner of the agency shall so certify to the commissioner 
 19.29  of revenue who must grant the exemption.  For each subsequent 
 19.30  calendar year, by October 1 of the preceding year, the facility 
 19.31  must apply to the agency for certification to renew its 
 19.32  exemption for the following year.  The application must be filed 
 19.33  according to the procedures of, and contain the information 
 19.34  required by, the agency.  The commissioner of revenue shall 
 19.35  grant the exemption if the commissioner of the pollution control 
 19.36  agency finds and certifies to the commissioner of revenue that 
 20.1   based on an evaluation of the composition of incoming waste and 
 20.2   residuals and the quality and use of the product: 
 20.3      (i) generators separate materials at the source; 
 20.4      (ii) the separation is performed in a manner appropriate to 
 20.5   the technology specific to the facility that: 
 20.6      (A) maximizes the quality of the product; 
 20.7      (B) minimizes the toxicity and quantity of residuals; and 
 20.8      (C) provides an opportunity for significant improvement in 
 20.9   the environmental efficiency of the operation; 
 20.10     (iii) the operator of the facility educates generators, in 
 20.11  coordination with each county using the facility, about 
 20.12  separating the waste to maximize the quality of the waste stream 
 20.13  for technology specific to the facility; 
 20.14     (iv) process residuals do not exceed 15 percent of the 
 20.15  weight of the total material delivered to the facility; and 
 20.16     (v) the final product is accepted for use; and 
 20.17     (8) waste and waste by-products for which the tax has been 
 20.18  paid; and 
 20.19     (9) daily cover for landfills that has been approved in 
 20.20  writing by the Minnesota pollution control agency.  
 20.21     Sec. 4.  [EFFECTIVE DATES.] 
 20.22     Sections 1 and 3 are effective the day following final 
 20.23  enactment.  Section 2 is effective for refund claims filed on or 
 20.24  after July 1, 1999. 
 20.25                             ARTICLE 4
 20.26                           MISCELLANEOUS
 20.27     Section 1.  Minnesota Statutes 1998, section 289A.40, 
 20.28  subdivision 1, is amended to read: 
 20.29     Subdivision 1.  [TIME LIMIT; GENERALLY.] Unless otherwise 
 20.30  provided in this chapter, a claim for a refund of an overpayment 
 20.31  of state tax must be filed within 3-1/2 years from the date 
 20.32  prescribed for filing the return, plus any extension of time 
 20.33  granted for filing the return, but only if filed within the 
 20.34  extended time, or one year from the date of an order assessing 
 20.35  tax under section 289A.37, subdivision 1, or an order 
 20.36  determining an appeal under section 289A.65, subdivision 8, or 
 21.1   one year from the date of a return made by the commissioner 
 21.2   under section 289A.35, upon payment in full of the tax, 
 21.3   penalties, and interest shown on the order or return made by the 
 21.4   commissioner, whichever period expires later.  Claims for 
 21.5   refund, except for taxes under chapter 297A, filed after the 
 21.6   3-1/2 year period but within the one-year period are limited to 
 21.7   the amount of the tax, penalties, and interest on the order or 
 21.8   return made by the commissioner and to issues determined by the 
 21.9   order or return made by the commissioner. 
 21.10     In the case of assessments under section 289A.38, 
 21.11  subdivision 5 or 6, claims for refund under chapter 297A filed 
 21.12  after the 3-1/2 year period but within the one-year period are 
 21.13  limited to the amount of the tax, penalties, and interest on the 
 21.14  order or return made by the commissioner that are due for the 
 21.15  period before the 3-1/2 year period. 
 21.16     Sec. 2.  Minnesota Statutes 1998, section 289A.60, 
 21.17  subdivision 3, is amended to read: 
 21.18     Subd. 3.  [COMBINED PENALTIES.] When penalties are imposed 
 21.19  under subdivisions 1 and 2, except for the minimum penalty under 
 21.20  subdivision 2, the penalties imposed under both subdivisions 
 21.21  combined must not exceed 38 percent. 
 21.22     Sec. 3.  Minnesota Statutes 1998, section 289A.60, 
 21.23  subdivision 21, is amended to read: 
 21.24     Subd. 21.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
 21.25  ELECTRONIC FUNDS TRANSFER.] (a) In addition to other applicable 
 21.26  penalties imposed by this section, after notification from the 
 21.27  commissioner to the taxpayer that payments are required to be 
 21.28  made by means of electronic funds transfer under section 
 21.29  289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or 
 21.30  289A.26, subdivision 2a, and the payments are remitted by some 
 21.31  other means, there is a penalty in the amount of five percent of 
 21.32  each payment that should have been remitted electronically.  The 
 21.33  penalty can be abated under the abatement procedures prescribed 
 21.34  in section 270.07, subdivision 6, if the failure to remit the 
 21.35  payment electronically is due to reasonable cause. 
 21.36     (b) The penalty under paragraph (a) does not apply if the 
 22.1   taxpayer pays by other means the amount due at least three 
 22.2   business days before the date the payment is due.  This 
 22.3   paragraph does not apply after December 31, 1997.  
 22.4      Sec. 4.  Minnesota Statutes 1998, section 297A.15, 
 22.5   subdivision 5, is amended to read: 
 22.6      Subd. 5.  [REFUND; APPROPRIATION.] Notwithstanding the 
 22.7   provisions of sections 297A.02, subdivision 5, and 297A.25, 
 22.8   subdivision 42, the tax on sales of capital equipment, and 
 22.9   replacement capital equipment, shall be imposed and collected as 
 22.10  if the rate under section 297A.02, subdivision 1, applied.  Upon 
 22.11  application by the purchaser, on forms prescribed by the 
 22.12  commissioner, a refund equal to the reduction in the tax due as 
 22.13  a result of the application of the exemption under section 
 22.14  297A.25, subdivision 42, and the rate under section 297A.02, 
 22.15  subdivision 5, shall be paid to the purchaser.  The application 
 22.16  must include sufficient information to permit the commissioner 
 22.17  to verify the sales tax paid for the project.  The application 
 22.18  shall include information necessary for the commissioner 
 22.19  initially to verify that the purchases qualified as capital 
 22.20  equipment under section 297A.25, subdivision 42, or replacement 
 22.21  capital equipment under section 297A.01, subdivision 20.  No 
 22.22  more than two applications for refunds may be filed under this 
 22.23  subdivision in a calendar year.  Unless otherwise specifically 
 22.24  provided by this subdivision, the provisions of section sections 
 22.25  289A.40 and 289A.50 apply to the refunds payable under this 
 22.26  subdivision.  There is annually appropriated to the commissioner 
 22.27  of revenue the amount required to make the refunds. 
 22.28     The amount to be refunded shall bear interest at the rate 
 22.29  in section 270.76 from the date the refund claim is filed with 
 22.30  the commissioner. 
 22.31     Sec. 5.  [REPEALER.] 
 22.32     Minnesota Statutes 1998, sections 297E.12, subdivision 3; 
 22.33  297F.19, subdivision 4; and 297G.18, subdivision 4, are repealed.
 22.34     Sec. 6.  [EFFECTIVE DATE.] 
 22.35     Section 1 is effective for orders issued on or after the 
 22.36  day following final enactment.  Section 2 is effective for tax 
 23.1   years ending on or after the day following final enactment.  
 23.2   Sections 3 to 5 are effective the day following final enactment.