SF 514

1st Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; making technical and 
  1.3             administrative changes, corrections, and 
  1.4             clarifications; amending Minnesota Statutes 1994, 
  1.5             sections 151.48; 270.47; 270.48; 270.485; 270.494; 
  1.6             270.50; 270.52; 270.53; 270.69, subdivision 10; 
  1.7             270B.14, subdivision 11; 272.121, subdivision 2; 
  1.8             273.11, subdivision 16; 273.1398, by adding a 
  1.9             subdivision; 273.1399, subdivision 3; 273.17, 
  1.10            subdivision 2; 275.065, subdivision 6; 276.04, 
  1.11            subdivision 2; 284.28, subdivision 2; 289A.18, 
  1.12            subdivision 4; 289A.50, subdivision 1; 290.032, 
  1.13            subdivisions 1 and 2; 290A.04, subdivisions 2h and 6; 
  1.14            295.50, subdivisions 1, 4, 7, and 13; 295.53, 
  1.15            subdivisions 1, 2, and 5; 295.54, subdivision 1; 
  1.16            295.55, by adding a subdivision; 295.57; 296.01, 
  1.17            subdivision 34; 296.025, subdivision 1; 296.12, 
  1.18            subdivisions 3 and 4; 297A.01, subdivision 3; 297E.02, 
  1.19            subdivisions 1, 6, and 11; 297E.031, subdivision 1; 
  1.20            297E.13, subdivision 5; 298.75, subdivision 2; 
  1.21            325D.33, subdivision 4; 349.163, subdivision 5; 
  1.22            428A.01, subdivision 5; 428A.03, by adding a 
  1.23            subdivision; 428A.05; 469.177, subdivision 9; 473.446, 
  1.24            subdivision 1; 473.711, subdivision 2; and 473F.02, 
  1.25            subdivision 8; Laws 1994, chapter 587, article 1, 
  1.26            section 27; repealing Minnesota Statutes 1994, 
  1.27            sections 60A.15, subdivision 7; 270.49; 270.493; and 
  1.28            290A.04, subdivision 2i; Laws 1988, chapter 698, 
  1.29            section 5; and Laws 1989, First Special Session 
  1.30            chapter 1, article 7, section 9. 
  1.31  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.32                             ARTICLE 1
  1.33                 INCOME TAX AND PROPERTY TAX REFUND
  1.34     Section 1.  Minnesota Statutes 1994, section 290.032, 
  1.35  subdivision 1, is amended to read: 
  1.36     Subdivision 1.  There is hereby imposed as an addition to 
  1.37  the annual income tax for a taxable year of a taxpayer in the 
  1.38  classes described in section 290.03 a tax with respect to any 
  2.1   distribution received by such taxpayer that is treated as a lump 
  2.2   sum distribution under section 402(e) 402(d) of the Internal 
  2.3   Revenue Code and that is subject to tax for such taxable year 
  2.4   under section 402(e) 402(d) of the Internal Revenue Code. 
  2.5      Sec. 2.  Minnesota Statutes 1994, section 290.032, 
  2.6   subdivision 2, is amended to read: 
  2.7      Subd. 2.  The amount of tax imposed by subdivision 1 shall 
  2.8   be computed in the same way as the tax imposed under section 
  2.9   402(e) 402(d) of the Internal Revenue Code, except that the 
  2.10  initial separate tax shall be an amount equal to five times the 
  2.11  tax which would be imposed by section 290.06, subdivision 2c, if 
  2.12  the recipient was an unmarried individual, and the taxable net 
  2.13  income was an amount equal to one-fifth of the excess of 
  2.14     (i) the total taxable amount of the lump sum distribution 
  2.15  for the year, over 
  2.16     (ii) the minimum distribution allowance, and except that 
  2.17  references in section 402(e) 402(d) of the Internal Revenue Code 
  2.18  to paragraph (1)(A) thereof shall instead be references to 
  2.19  subdivision 1, and the excess, if any, of the subtraction base 
  2.20  amount over federal taxable income for a qualified individual as 
  2.21  provided under section 290.0802, subdivision 2. 
  2.22     Sec. 3.  Minnesota Statutes 1994, section 290A.04, 
  2.23  subdivision 2h, is amended to read: 
  2.24     Subd. 2h.  (a) If the gross property taxes payable on a 
  2.25  homestead increase more than 12 percent over the net property 
  2.26  taxes payable in the prior year on the same property that is 
  2.27  owned and occupied by the same owner on January 2 of both years, 
  2.28  and the amount of that increase is $100 or more for taxes 
  2.29  payable in 1995 and 1996, a claimant who is a homeowner shall be 
  2.30  allowed an additional refund equal to 60 percent of the amount 
  2.31  of the increase over the greater of 12 percent of the prior 
  2.32  year's net property taxes payable or $100 for taxes payable in 
  2.33  1995 and 1996.  This subdivision shall not apply to any increase 
  2.34  in the gross property taxes payable attributable to improvements 
  2.35  made to the homestead after the assessment date for the prior 
  2.36  year's taxes.  This subdivision shall not apply to any increase 
  3.1   in the gross property taxes payable attributable to the 
  3.2   termination of valuation exclusions under section 273.11, 
  3.3   subdivision 16. 
  3.4      The maximum refund allowed under this subdivision is $1,000.
  3.5      (b) For purposes of this subdivision, the following terms 
  3.6   have the meanings given: 
  3.7      (1) "Net property taxes payable" means property taxes 
  3.8   payable minus refund amounts for which the claimant qualifies 
  3.9   pursuant to subdivision 2 and this subdivision.  
  3.10     (2) "Gross property taxes" means net property taxes payable 
  3.11  determined without regard to the refund allowed under this 
  3.12  subdivision. 
  3.13     (c) In addition to the other proofs required by this 
  3.14  chapter, each claimant under this subdivision shall file with 
  3.15  the property tax refund return a copy of the property tax 
  3.16  statement for taxes payable in the preceding year or other 
  3.17  documents required by the commissioner. 
  3.18     (d) On or before December 1, 1995, the commissioner shall 
  3.19  estimate the cost of making the payments provided by this 
  3.20  subdivision for taxes payable in 1996.  Notwithstanding the open 
  3.21  appropriation provision of section 290A.23, if the estimated 
  3.22  total refund claims for taxes payable in 1996 exceed $5,500,000, 
  3.23  the commissioner shall first reduce the 60 percent refund rate 
  3.24  enough, but to no lower a rate than 50 percent, so that the 
  3.25  estimated total refund claims do not exceed $5,500,000.  If the 
  3.26  commissioner estimates that total claims will exceed $5,500,000 
  3.27  at a 50 percent refund rate, the commissioner shall also reduce 
  3.28  the $1,000 maximum refund amount by enough so that total 
  3.29  estimated refund claims do not exceed $5,500,000. 
  3.30     The determinations of the revised thresholds by the 
  3.31  commissioner are not rules subject to chapter 14.  
  3.32     (e) Upon request, the appropriate county official shall 
  3.33  make available the names and addresses of the property taxpayers 
  3.34  who may be eligible for the additional property tax refund under 
  3.35  this section.  The information shall be provided on a magnetic 
  3.36  computer disk.  The county may recover its costs by charging the 
  4.1   person requesting the information the reasonable cost for 
  4.2   preparing the data.  The information may not be used for any 
  4.3   purpose other than for notifying the homeowner of potential 
  4.4   eligibility and assisting the homeowner, without charge, in 
  4.5   preparing a refund claim. 
  4.6      Sec. 4.  Minnesota Statutes 1994, section 290A.04, 
  4.7   subdivision 6, is amended to read: 
  4.8      Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
  4.9   tax refunds payable in calendar year 1996, the commissioner 
  4.10  shall annually adjust the dollar amounts of the income 
  4.11  thresholds and the maximum refunds under subdivisions 2 and 2a 
  4.12  for inflation.  The commissioner shall make the inflation 
  4.13  adjustments in accordance with section 290.06, subdivision 2d, 
  4.14  except that for purposes of this subdivision the percentage 
  4.15  increase shall be determined from the year ending on August 31, 
  4.16  1993 1994, to the year ending on August 31 of the year preceding 
  4.17  that in which the refund is payable.  The commissioner shall use 
  4.18  the appropriate percentage increase to annually adjust the 
  4.19  income thresholds and maximum refunds under subdivisions 2 and 
  4.20  2a for inflation without regard to whether or not the income tax 
  4.21  brackets are adjusted for inflation in that year.  The 
  4.22  commissioner shall round the thresholds and the maximum amounts, 
  4.23  as adjusted to the nearest $10 amount.  If the amount ends in 
  4.24  $5, the commissioner shall round it up to the next $10 amount.  
  4.25     The commissioner shall annually announce the adjusted 
  4.26  refund schedule at the same time provided under section 290.06.  
  4.27  The determination of the commissioner under this subdivision is 
  4.28  not a rule under the administrative procedure act. 
  4.29     Sec. 5.  Laws 1994, chapter 587, article 1, section 27, is 
  4.30  amended to read: 
  4.31     Sec. 27.  [EFFECTIVE DATE.] 
  4.32     Sections 1, 7, 10, 13, 15, 16, and 22 are effective for 
  4.33  taxable years beginning after December 31, 1993. 
  4.34     Section 2 is effective to be used as an offset against 
  4.35  premium tax liabilities payable after November 30, 1995.  If a 
  4.36  guaranty association assessment was made before August 1, 1994, 
  5.1   under Minnesota Statutes 1992, sections 61B.01 to 61B.16, and is 
  5.2   revoked or invalidated, a subsequent assessment to pay the same 
  5.3   liabilities shall not be eligible for the offset as provided for 
  5.4   under Minnesota Statutes, section 60A.15, subdivision 15, and 
  5.5   shall not be used in any calculation to determine the offset 
  5.6   limitation under Minnesota Statutes, section 60A.15, subdivision 
  5.7   15, paragraph (c). 
  5.8      Sections 4 and 25, paragraph (b), are effective for 
  5.9   installments of estimated taxes due after the day following 
  5.10  enactment. 
  5.11     Section 5 is effective for taxable years beginning after 
  5.12  December 31, 1994. 
  5.13     Section 8 is effective for wages paid or incurred after 
  5.14  December 31, 1993. 
  5.15     Section 20 is effective to be used as an offset against tax 
  5.16  liabilities payable after June 30, 1995.  If a guaranty 
  5.17  association assessment was made before August 1, 1994, under 
  5.18  Minnesota Statutes 1992, sections 61B.01 to 61B.16 and is 
  5.19  revoked or invalidated, a subsequent assessment to pay the same 
  5.20  liabilities shall not be eligible for the offset as provided for 
  5.21  under Minnesota Statutes, section 290.35, subdivision 6, and 
  5.22  shall not be used in any calculation to determine the offset 
  5.23  limitation under Minnesota Statutes, section 290.35, subdivision 
  5.24  6, paragraph (c). 
  5.25     Sec. 6.  [REPEALER.] 
  5.26     Minnesota Statutes 1994, section 290A.04, subdivision 2i; 
  5.27  and Laws 1989, First Special Session chapter 1, article 7, 
  5.28  section 9, are repealed. 
  5.29     Sec. 7.  [EFFECTIVE DATE.] 
  5.30     Sections 1 and 2 are effective for tax years beginning 
  5.31  after December 31, 1994.  Section 5 is effective for tax years 
  5.32  beginning after December 31, 1993.  Section 6 is effective for 
  5.33  property taxes payable in 1995 and thereafter.  Sections 3 and 4 
  5.34  are effective for refunds based on property taxes payable in 
  5.35  1996 and rent paid in 1995 and thereafter. 
  5.36                             ARTICLE 2
  6.1                             PROPERTY TAX
  6.2      Section 1.  Minnesota Statutes 1994, section 270.47, is 
  6.3   amended to read: 
  6.4      270.47 [RULES.] 
  6.5      The board shall establish the rules necessary to accomplish 
  6.6   the purpose of section 270.41, and shall establish criteria 
  6.7   required of assessing officials in the state.  Separate criteria 
  6.8   may be established depending upon the responsibilities of the 
  6.9   assessor.  The board shall prepare and give examinations from 
  6.10  time to time to determine whether assessing officials possess 
  6.11  the necessary qualifications for performing the functions of the 
  6.12  office.  Such tests shall be given immediately upon completion 
  6.13  of courses required by the board, or to persons who already 
  6.14  possess the requisite qualifications under the rules of the 
  6.15  board.  Rules adopted by the board before July 1, 1981 to 
  6.16  accomplish the purposes of sections 270.41 to 270.53, including 
  6.17  those relating to licensure, are valid without compliance with 
  6.18  the administrative procedure act.  
  6.19     Sec. 2.  Minnesota Statutes 1994, section 270.48, is 
  6.20  amended to read: 
  6.21     270.48 [LICENSURE OF QUALIFIED PERSONS.] 
  6.22     The board shall license persons as possessing the necessary 
  6.23  qualifications of an assessing official.  Different levels of 
  6.24  licensure may be established as to classes of property which 
  6.25  assessors may be certified to assess at the discretion of the 
  6.26  board.  Every person, except a local or county assessor, 
  6.27  regularly employed by the assessor to assist in making decisions 
  6.28  regarding valuing and classifying property for assessment 
  6.29  purposes shall be required to become licensed within three years 
  6.30  of the date of employment or June 1, 1975, whichever is later. 
  6.31  Licensure shall be required for local and county assessors as 
  6.32  otherwise provided in sections 270.41 to 270.53. 
  6.33     Sec. 3.  Minnesota Statutes 1994, section 270.485, is 
  6.34  amended to read: 
  6.35     270.485 [SENIOR ACCREDITATION.] 
  6.36     The legislature finds that the property tax system would be 
  7.1   enhanced by requiring that every senior appraiser in the 
  7.2   department of revenue's local government services property tax 
  7.3   division obtain senior accreditation from the state board of 
  7.4   assessors.  Every senior appraiser, including the department's 
  7.5   regional representatives, by January 1, 1990, and every county 
  7.6   assessor within two years of the first appointment under section 
  7.7   273.061, or by January 1, 1992, whichever is later, must obtain 
  7.8   senior accreditation from the state board of assessors.  The 
  7.9   board shall provide the necessary courses or training.  If a 
  7.10  department senior appraiser or regional representative fails to 
  7.11  obtain or maintain senior accreditation by January 1, 1990, the 
  7.12  failure shall be grounds for dismissal, disciplinary action, or 
  7.13  corrective action.  Except as provided in section 273.061, 
  7.14  subdivision 2, paragraph (c), after December 30, 1991, the 
  7.15  commissioner must not approve the appointment of a county 
  7.16  assessor who is not senior accredited by the state board of 
  7.17  assessors.  No employee hired by the commissioner as a senior 
  7.18  appraiser or regional representative after June 30, 1987, shall 
  7.19  attain permanent status until the employee obtains senior 
  7.20  accreditation. 
  7.21     Sec. 4.  Minnesota Statutes 1994, section 270.494, is 
  7.22  amended to read: 
  7.23     270.494 [CERTAIN TOWNSHIPS AND CITIES OPTION TO ELECT TO 
  7.24  REINSTATE THE OFFICE OF ASSESSOR.] 
  7.25     Notwithstanding the provisions of sections 270.49, 270.493, 
  7.26  and section 273.05, subdivision 1, a city or township in which 
  7.27  the office of assessor has been eliminated because of failure of 
  7.28  the city or township to certify by resolution to the 
  7.29  commissioner of revenue its intention to employ or continue to 
  7.30  employ a certified assessor on or before April 1, 1972, pursuant 
  7.31  to section 270.49, or failure to hire a certified assessor prior 
  7.32  to June 15, 1975, pursuant to sections 270.493 and 270.50, or 
  7.33  failure to fill a vacancy in the office within 90 days pursuant 
  7.34  to section 273.05, subdivision 1, may elect, with the approval 
  7.35  of the commissioner, to have the office of assessor reinstated 
  7.36  by hiring a certified or accredited assessor.  This section 
  8.1   shall not apply to Ramsey county or to cities and townships 
  8.2   located in counties which have elected a county assessment 
  8.3   system in accordance with section 273.055. 
  8.4      Sec. 5.  Minnesota Statutes 1994, section 270.50, is 
  8.5   amended to read: 
  8.6      270.50 [EMPLOYMENT OF LICENSED ASSESSORS.] 
  8.7      Commencing June 15, 1975, No assessor shall be employed who 
  8.8   has not been licensed as qualified by the board, provided the 
  8.9   time to comply may be extended after application to the board 
  8.10  upon a showing that licensed assessors are not available for 
  8.11  employment.  The board may license that a county or local 
  8.12  assessor who has not received the training, but possesses the 
  8.13  necessary qualifications for performing the functions of the 
  8.14  office by the passage of an approved examination or may waive 
  8.15  the examination if such person has demonstrated competence in 
  8.16  performing the functions of the office for a period of time the 
  8.17  board deems reasonable.  The county or local assessing district 
  8.18  shall assume the cost of training of its assessors in courses 
  8.19  approved by the board for the purpose of obtaining the 
  8.20  assessor's license to the extent of course fees, mileage, meals 
  8.21  and lodging, and recognized travel expenses not paid by the 
  8.22  state.  If the governing body of any township or city fails to 
  8.23  employ an assessor as required by sections 270.41 to 270.53, the 
  8.24  assessment shall be made by the county assessor. 
  8.25     A town shall pay its assessor $20 for each day the assessor 
  8.26  is attending approved courses or taking the examination.  In 
  8.27  addition, the town shall pay its assessor $10 for each approved 
  8.28  course successfully completed and $20 upon licensure.  The 
  8.29  maximum payable to an assessor for successful completion of 
  8.30  courses and licensure shall not exceed $50. 
  8.31     In the case of cities incorporated or townships organized 
  8.32  after April 11, 1974 except cities or towns located in Ramsey 
  8.33  county or which have elected a county assessor system in 
  8.34  accordance with section 273.055, the board shall allow the city 
  8.35  or town 90 days from the latter of June 3, 1977 or the date of 
  8.36  incorporation or organization to employ a licensed assessor. 
  9.1      Sec. 6.  Minnesota Statutes 1994, section 270.52, is 
  9.2   amended to read: 
  9.3      270.52 [COSTS OF MAKING ASSESSMENTS.] 
  9.4      The cost of making any assessment provided in sections 
  9.5   270.41 to 270.53 shall be charged to the assessment district 
  9.6   involved.  The county auditor shall certify the costs incurred 
  9.7   to the appropriate governing body not later than September 
  9.8   August 1 of each year, and if unpaid as of October 10 September 
  9.9   1, the county auditor shall levy a tax upon the taxable property 
  9.10  of such taxing district sufficient to pay such costs.  The 
  9.11  amount so collected shall be credited to the general revenue 
  9.12  fund of the county.  
  9.13     Sec. 7.  Minnesota Statutes 1994, section 270.53, is 
  9.14  amended to read: 
  9.15     270.53 [EXISTING CONTRACTS FOR ASSESSMENT OF PROPERTY.] 
  9.16     Sections 270.41 to 270.53 shall not supersede existing 
  9.17  contracts executed pursuant to section 273.072 or 471.59 except 
  9.18  to the extent that such contracts may conflict with section 
  9.19  270.49 or 270.50 nor preclude contracts between a taxing 
  9.20  district and the county for the assessment of property by the 
  9.21  county assessor.  
  9.22     Sec. 8.  Minnesota Statutes 1994, section 272.121, 
  9.23  subdivision 2, is amended to read: 
  9.24     Subd. 2.  [EXCEPTIONS.] No certification of current tax 
  9.25  paid is required when the land is being conveyed to the federal 
  9.26  government, the state, or a home rule charter or statutory city 
  9.27  or any other political subdivision, or.  No certification of 
  9.28  current tax paid is required under subdivision 1 for any 
  9.29  sheriff's or referee's certificate of sale or other instrument 
  9.30  if a certification of delinquent tax for the instrument is not 
  9.31  required under section 272.12. 
  9.32     Sec. 9.  Minnesota Statutes 1994, section 273.11, 
  9.33  subdivision 16, is amended to read: 
  9.34     Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
  9.35  Improvements to homestead property made before January 2, 2003, 
  9.36  shall be fully or partially excluded from the value of the 
 10.1   property for assessment purposes provided that (1) the house is 
 10.2   at least 35 years old at the time of the improvement and (2) 
 10.3   either (a) the assessor's estimated market value of the house on 
 10.4   January 2 of the current year is equal to or less than $150,000, 
 10.5   or (b) if the estimated market value of the house is over 
 10.6   $150,000 market value but is less than $300,000 on January 2 of 
 10.7   the current year, the property qualifies if 
 10.8      (i) it is located in a city or town in which 50 percent or 
 10.9   more of the homes owner-occupied housing units were constructed 
 10.10  before 1960 based upon the 1990 federal census, and 
 10.11     (ii) the city or town's median family income based upon the 
 10.12  1990 federal census is less than the statewide median family 
 10.13  income based upon the 1990 federal census. 
 10.14     Any house which has an estimated market value of $300,000 
 10.15  or more on January 2 of the current year is not eligible to 
 10.16  receive any property valuation exclusion under this section.  
 10.17  For purposes of determining this eligibility, "house" means land 
 10.18  and buildings.  
 10.19     The age of a residence is the number of years that the 
 10.20  residence has existed at its present site.  In the case of an 
 10.21  owner-occupied duplex or triplex, the improvement is eligible 
 10.22  regardless of which portion of the property was improved. 
 10.23     If the property lies in a jurisdiction which is subject to 
 10.24  a building permit process, a building permit must have been 
 10.25  issued prior to commencement of the improvement.  Any 
 10.26  improvement must add at least $1,000 to the value of the 
 10.27  property to be eligible for exclusion under this subdivision.  
 10.28  Only improvements to the structure which is the residence of the 
 10.29  qualifying homesteader or construction of or improvements to no 
 10.30  more than one two-car garage per residence qualify for the 
 10.31  provisions of this subdivision.  If an improvement was begun 
 10.32  between January 2, 1992, and January 2, 1993, any value added 
 10.33  from that improvement for the January 1994 and subsequent 
 10.34  assessments shall qualify for exclusion under this subdivision 
 10.35  provided that a building permit was obtained for the improvement 
 10.36  between January 2, 1992, and January 2, 1993.  Whenever a 
 11.1   building permit is issued for property currently classified as 
 11.2   homestead, the issuing jurisdiction shall notify the property 
 11.3   owner of the possibility of valuation exclusion under this 
 11.4   subdivision.  The assessor shall require an application, 
 11.5   including documentation of the age of the house from the owner, 
 11.6   if unknown by the assessor.  The application may be filed 
 11.7   subsequent to the date of the building permit provided that the 
 11.8   application is filed prior to the next assessment date. 
 11.9      After the adjournment of the 1994 county board of 
 11.10  equalization meetings, no exclusion may be granted for an 
 11.11  improvement by a local board of review or county board of 
 11.12  equalization unless (1) a building permit was issued prior to 
 11.13  the commencement of the improvement if the jurisdiction requires 
 11.14  a building permit, and (2) an application was completed on a 
 11.15  timely basis.  No abatement of the taxes for qualifying 
 11.16  improvements may be granted by a county board unless (1) a 
 11.17  building permit was issued prior to commencement of the 
 11.18  improvement if the jurisdiction requires a building permit, and 
 11.19  (2) an application was completed on a timely basis. 
 11.20     The assessor shall note the qualifying value of each 
 11.21  improvement on the property's record, and the sum of those 
 11.22  amounts shall be subtracted from the value of the property in 
 11.23  each year for ten years after the improvement has been made, at 
 11.24  which time an amount equal to 20 percent of the qualifying value 
 11.25  shall be added back in each of the five subsequent assessment 
 11.26  years.  The valuation exclusion shall terminate whenever (1) the 
 11.27  property is sold, or (2) the property is reclassified to a class 
 11.28  which does not qualify for treatment under this subdivision. 
 11.29  Improvements made by an occupant who is the purchaser of the 
 11.30  property under a conditional purchase contract do not qualify 
 11.31  under this subdivision unless the seller of the property is a 
 11.32  governmental entity.  The qualifying value of the property shall 
 11.33  be computed based upon the increase from that structure's market 
 11.34  value as of January 2 preceding the acquisition of the property 
 11.35  by the governmental entity. 
 11.36     The total qualifying value for a homestead may not exceed 
 12.1   $50,000.  The total qualifying value for a homestead with a 
 12.2   house that is less than 70 years old may not exceed $25,000.  
 12.3   The term "qualifying value" means the increase in estimated 
 12.4   market value resulting from the improvement if the improvement 
 12.5   occurs when the house is at least 70 years old, or one-half of 
 12.6   the increase in estimated market value resulting from the 
 12.7   improvement otherwise.  The $25,000 and $50,000 maximum 
 12.8   qualifying value under this subdivision may result from up to 
 12.9   three separate improvements to the homestead.  The application 
 12.10  shall state, in clear language, that if more than three 
 12.11  improvements are made to the qualifying property, a taxpayer may 
 12.12  choose which three improvements are eligible, provided that 
 12.13  after the taxpayer has made the choice and any valuation 
 12.14  attributable to those improvements has been excluded from 
 12.15  taxation, no further changes can be made by the taxpayer. 
 12.16     If 50 percent or more of the square footage of a structure 
 12.17  is voluntarily razed or removed, the valuation increase 
 12.18  attributable to any subsequent improvements to the remaining 
 12.19  structure does not qualify for the exclusion under this 
 12.20  subdivision.  If a structure is unintentionally or accidentally 
 12.21  destroyed by a natural disaster, the property is eligible for an 
 12.22  exclusion under this subdivision provided that the structure was 
 12.23  not completely destroyed.  The qualifying value on property 
 12.24  destroyed by a natural disaster shall be computed based upon the 
 12.25  increase from that structure's market value as determined on 
 12.26  January 2 of the year in which the disaster occurred.  A 
 12.27  property receiving benefits under the homestead disaster 
 12.28  provisions under section 273.123 is not disqualified from 
 12.29  receiving an exclusion under this subdivision.  If any 
 12.30  combination of improvements made to a structure after January 1, 
 12.31  1993, increases the size of the structure by 100 percent or 
 12.32  more, the valuation increase attributable to the portion of the 
 12.33  improvement that causes the structure's size to exceed 100 
 12.34  percent does not qualify for exclusion under this subdivision. 
 12.35     Sec. 10.  Minnesota Statutes 1994, section 273.1398, is 
 12.36  amended by adding a subdivision to read: 
 13.1      Subd. 2d.  [AIDS DETERMINED AS OF JUNE 30.] For aid amounts 
 13.2   authorized under subdivisions 2 and 3, and section 273.166:  (i) 
 13.3   if the effective date for a municipal incorporation, 
 13.4   consolidation, annexation, detachment, dissolution, or township 
 13.5   organization is on or before June 30 of the year preceding the 
 13.6   aid distribution year, the change in boundaries or form of 
 13.7   government shall be recognized for aid determinations for the 
 13.8   aid distribution year; (ii) if the effective date for a 
 13.9   municipal incorporation, consolidation, annexation, detachment, 
 13.10  dissolution, or township organization is after June 30 of the 
 13.11  year preceding the aid distribution year, the change in 
 13.12  boundaries or form of government shall not be recognized for aid 
 13.13  determinations until the following year. 
 13.14     Sec. 11.  Minnesota Statutes 1994, section 273.1399, 
 13.15  subdivision 3, is amended to read: 
 13.16     Subd. 3.  [CALCULATION OF EDUCATION AIDS.] For each school 
 13.17  district containing qualifying captured net tax capacity, the 
 13.18  commissioner of education shall compute a hypothetical state aid 
 13.19  amount that would be paid to the school district if the 
 13.20  qualifying captured net tax capacity were divided by the prior 
 13.21  year's sales ratio and included in the school district's prior 
 13.22  year adjusted tax capacity for purposes of calculating equalized 
 13.23  levies as defined in section 273.1398, subdivision 1, and 
 13.24  associated state aids. The commissioner of education shall 
 13.25  notify the commissioner of revenue of the difference between the 
 13.26  actual aid paid and the hypothetical aid amounts calculated for 
 13.27  each school district, broken down by the municipality that 
 13.28  approved the tax increment financing district containing the 
 13.29  qualifying captured net tax capacity.  The resulting amount is 
 13.30  the reduction in state tax increment financing aid. 
 13.31     Sec. 12.  Minnesota Statutes 1994, section 273.17, 
 13.32  subdivision 2, is amended to read: 
 13.33     Subd. 2.  In counties where the county auditor has elected 
 13.34  to discontinue the preparation of assessment books as provided 
 13.35  by section 273.03, subdivision 2, such changes as provided for 
 13.36  in subdivision 1 of this section, shall be recorded in a 
 14.1   separate record prepared under the direction of the county 
 14.2   assessor and shall identify, by description or property 
 14.3   identification number, or both, the real estate affected, the 
 14.4   previous year's net tax capacities and the new market values and 
 14.5   net tax capacities, provided that if only property 
 14.6   identification numbers are used they shall be such that shall 
 14.7   permit positive identification of the real estate to which they 
 14.8   apply.  Such record shall further indicate the total amount of 
 14.9   increase or decrease in net tax capacity contained therein.  The 
 14.10  county assessor shall make return of such record to the county 
 14.11  auditor who shall be the official custodian thereof. 
 14.12     Such record shall be known as "County assessor's changes in 
 14.13  real estate valuations for the year 19.........".  Such records 
 14.14  on file in the county auditor's office may be destroyed when 
 14.15  they are more than 20 ten years old pursuant to the conditions 
 14.16  for destruction of government records contained in Minnesota 
 14.17  Statutes 1961, section 384.14 sections 138.161 to 138.25. 
 14.18     Sec. 13.  Minnesota Statutes 1994, section 275.065, 
 14.19  subdivision 6, is amended to read: 
 14.20     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
 14.21  Between November 29 and December 20, the governing bodies of the 
 14.22  city, county, metropolitan special taxing districts as defined 
 14.23  in subdivision 3, paragraph (i), and regional library districts 
 14.24  shall each hold a public hearing to discuss and seek public 
 14.25  comment on its final budget and property tax levy for taxes 
 14.26  payable in the following year, and the governing body of the 
 14.27  school district shall hold a public hearing to review its 
 14.28  current budget and proposed property tax levy for taxes payable 
 14.29  in the following year.  The metropolitan special taxing 
 14.30  districts shall be required to hold only a single joint public 
 14.31  hearing, the location of which will be determined by the 
 14.32  affected metropolitan agencies. 
 14.33     At a subsequent hearing, each county, school district, 
 14.34  city, and metropolitan special taxing district may amend its 
 14.35  proposed property tax levy and must adopt a final property tax 
 14.36  levy.  Each county, city, and metropolitan special taxing 
 15.1   district may also amend its proposed budget and must adopt a 
 15.2   final budget at the subsequent hearing.  A school district is 
 15.3   not required to adopt its final budget at the subsequent 
 15.4   hearing.  The subsequent hearing of a taxing authority must be 
 15.5   held on a date subsequent to the date of the taxing authority's 
 15.6   initial public hearing, or subsequent to the date of its 
 15.7   continuation hearing if a continuation hearing is held.  The 
 15.8   subsequent hearing may be held at a regularly scheduled board or 
 15.9   council meeting or at a special meeting scheduled for the 
 15.10  purposes of the subsequent hearing.  The subsequent hearing of a 
 15.11  taxing authority does not have to be coordinated by the county 
 15.12  auditor to prevent a conflict with an initial hearing, a 
 15.13  continuation hearing, or a subsequent hearing of any other 
 15.14  taxing authority.  All subsequent hearings must be held prior to 
 15.15  five working days after December 20 of the levy year. 
 15.16     The time and place of the subsequent hearing must be 
 15.17  announced at the initial public hearing or at the continuation 
 15.18  hearing. 
 15.19     The property tax levy certified under section 275.07 by a 
 15.20  city, county, metropolitan special taxing district, regional 
 15.21  library district, or school district must not exceed the 
 15.22  proposed levy determined under subdivision 1, except by an 
 15.23  amount up to the sum of the following amounts: 
 15.24     (1) the amount of a school district levy whose voters 
 15.25  approved a referendum to increase taxes under section 124.82, 
 15.26  subdivision 3, 124A.03, subdivision 2, 124B.03, subdivision 2, 
 15.27  or 136C.411, after the proposed levy was certified; 
 15.28     (2) the amount of a city or county levy approved by the 
 15.29  voters after the proposed levy was certified; 
 15.30     (3) the amount of a levy to pay principal and interest on 
 15.31  bonds issued or approved by the voters under section 475.58 
 15.32  after the proposed levy was certified; 
 15.33     (4) the amount of a levy to pay costs due to a natural 
 15.34  disaster occurring after the proposed levy was certified, if 
 15.35  that amount is approved by the commissioner of revenue under 
 15.36  subdivision 6a; 
 16.1      (5) the amount of a levy to pay tort judgments against a 
 16.2   taxing authority that become final after the proposed levy was 
 16.3   certified, if the amount is approved by the commissioner of 
 16.4   revenue under subdivision 6a; 
 16.5      (6) the amount of an increase in levy limits certified to 
 16.6   the taxing authority by the commissioner of education after the 
 16.7   proposed levy was certified; and 
 16.8      (7) the amount required under section 124.755. 
 16.9      At the hearing under this subdivision, the percentage 
 16.10  increase in property taxes proposed by the taxing authority, if 
 16.11  any, and the specific purposes for which property tax revenues 
 16.12  are being increased must be discussed.  At the hearing held in 
 16.13  1993 only, specific information for previous year, current year, 
 16.14  and proposed budget year must be presented on: 
 16.15     (i) percent of total proposed budget representing total 
 16.16  compensation cost; 
 16.17     (ii) numbers of employees by general classification, and 
 16.18  whether full or part time; 
 16.19     (iii) number and budgeted expenditures for independent 
 16.20  contractors; and 
 16.21     (iv) the effect of budget increases or decreases on the 
 16.22  proposed property tax levy. 
 16.23     During the discussion, the governing body shall hear 
 16.24  comments regarding a proposed increase and explain the reasons 
 16.25  for the proposed increase.  The public shall be allowed to speak 
 16.26  and to ask questions.  At the subsequent hearing held as 
 16.27  provided in this subdivision, the governing body, other than the 
 16.28  governing body of a school district, shall adopt its final 
 16.29  property tax levy prior to adopting its final budget. 
 16.30     If the hearing is not completed on its scheduled date, the 
 16.31  taxing authority must announce, prior to adjournment of the 
 16.32  hearing, the date, time, and place for the continuation of the 
 16.33  hearing.  The continued hearing must be held at least five 
 16.34  business days but no more than 14 business days after the 
 16.35  original hearing. 
 16.36     The hearing must be held after 5:00 p.m. if scheduled on a 
 17.1   day other than Saturday.  No hearing may be held on a Sunday.  
 17.2   The governing body of a county shall hold a hearing on the 
 17.3   second Tuesday in December each year, and may hold additional 
 17.4   hearings on other dates before December 20 if necessary for the 
 17.5   convenience of county residents.  If the county needs a 
 17.6   continuation of its hearing, the continued hearing shall be held 
 17.7   on the third Tuesday in December.  If the third Tuesday in 
 17.8   December falls on December 21, the county's continuation hearing 
 17.9   shall be held on Monday, December 20.  The county auditor shall 
 17.10  provide for the coordination of hearing dates for all cities and 
 17.11  school districts within the county. 
 17.12     The metropolitan special taxing districts shall hold a 
 17.13  joint public hearing on the first Monday of December.  A 
 17.14  continuation hearing, if necessary, shall be held on the second 
 17.15  Monday of December. 
 17.16     By August 10, each school board and the board of the 
 17.17  regional library district shall certify to the county auditors 
 17.18  of the counties in which the school district or regional library 
 17.19  district is located the dates on which it elects to hold its 
 17.20  hearings and any continuations.  If a school board or regional 
 17.21  library district does not certify the dates by August 10, the 
 17.22  auditor will assign the hearing date.  The dates elected or 
 17.23  assigned must not conflict with the hearing dates of the county 
 17.24  hearing dates or the metropolitan special taxing districts.  The 
 17.25  Ramsey county auditor shall coordinate with the metropolitan 
 17.26  special taxing districts as defined in subdivision 3, paragraph 
 17.27  (i), a date on which the metropolitan special taxing districts 
 17.28  will hold their joint public hearing and any continuation.  The 
 17.29  metropolitan special taxing districts shall decide on mutually 
 17.30  agreeable dates for their joint public hearing and for any 
 17.31  continuation of that hearing and certify these dates to the 
 17.32  Ramsey county auditor on or before July 25.  By August 20, the 
 17.33  county auditor shall notify the clerks of the cities within the 
 17.34  county of the dates on which school districts, metropolitan 
 17.35  special taxing districts, and regional library districts have 
 17.36  elected to hold their hearings.  At the time a city certifies 
 18.1   its proposed levy under subdivision 1 it shall certify the dates 
 18.2   on which it elects to hold its hearings and any continuations.  
 18.3   The city must not select dates that conflict with the county 
 18.4   hearing dates, metropolitan special taxing district dates, or 
 18.5   with those elected by or assigned to the school districts or 
 18.6   regional library district in which the city is located. 
 18.7      The county hearing dates and the city, metropolitan special 
 18.8   taxing district, regional library district, and school district 
 18.9   hearing dates must be designated on the notices required under 
 18.10  subdivision 3.  The continuation dates need not be stated on the 
 18.11  notices.  
 18.12     This subdivision does not apply to towns and special taxing 
 18.13  districts other than regional library districts and metropolitan 
 18.14  special taxing districts. 
 18.15     Notwithstanding the requirements of this section, the 
 18.16  employer is required to meet and negotiate over employee 
 18.17  compensation as provided for in chapter 179A.  
 18.18     Sec. 14.  Minnesota Statutes 1994, section 276.04, 
 18.19  subdivision 2, is amended to read: 
 18.20     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 18.21  shall provide for the printing of the tax statements.  The 
 18.22  commissioner of revenue shall prescribe the form of the property 
 18.23  tax statement and its contents.  The statement must contain a 
 18.24  tabulated statement of the dollar amount due to each taxing 
 18.25  authority from the parcel of real property for which a 
 18.26  particular tax statement is prepared.  The dollar amounts due 
 18.27  the county, township or municipality, the total of the 
 18.28  metropolitan special taxing districts as defined in section 
 18.29  275.065, subdivision 3, paragraph (i), school district excess 
 18.30  referenda levy, remaining school district levy, and the total of 
 18.31  other voter approved referenda levies based on market value 
 18.32  under section 275.61 must be separately stated.  The amounts due 
 18.33  all other special taxing districts, if any, may be aggregated.  
 18.34  For the purposes of this subdivision, "school district excess 
 18.35  referenda levy" means school district taxes for operating 
 18.36  purposes approved at referenda, including those taxes based 
 19.1   on net tax capacity as well as those based on market value.  
 19.2   "School district excess referenda levy" does not include school 
 19.3   district taxes for capital expenditures approved at referendums 
 19.4   or school district taxes to pay for the debt service on bonds 
 19.5   approved at referenda.  The amount of the tax on contamination 
 19.6   value imposed under sections 270.91 to 270.98, if any, must also 
 19.7   be separately stated.  The dollar amounts, including the dollar 
 19.8   amount of any special assessments, may be rounded to the nearest 
 19.9   even whole dollar.  For purposes of this section whole 
 19.10  odd-numbered dollars may be adjusted to the next higher 
 19.11  even-numbered dollar.  The amount of market value excluded under 
 19.12  section 273.11, subdivision 16, if any, must also be listed on 
 19.13  the tax statement.  The statement shall include the following 
 19.14  sentence, printed in upper case letters in boldface print:  "THE 
 19.15  STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.  
 19.16  THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING 
 19.17  CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."  
 19.18     (b) The property tax statements for manufactured homes and 
 19.19  sectional structures taxed as personal property shall contain 
 19.20  the same information that is required on the tax statements for 
 19.21  real property.  
 19.22     (c) Real and personal property tax statements must contain 
 19.23  the following information in the order given in this paragraph.  
 19.24  The information must contain the current year tax information in 
 19.25  the right column with the corresponding information for the 
 19.26  previous year in a column on the left: 
 19.27     (1) the property's estimated market value under section 
 19.28  273.11, subdivision 1; 
 19.29     (2) the property's taxable market value after reductions 
 19.30  under section 273.11, subdivisions 1a and 16; 
 19.31     (3) the property's gross tax, calculated by multiplying the 
 19.32  property's gross tax capacity times the total local tax rate and 
 19.33  adding to the result the sum of the aids enumerated in clause 
 19.34  (3); 
 19.35     (4) a total of the following aids: 
 19.36     (i) education aids payable under chapters 124 and 124A; 
 20.1      (ii) local government aids for cities, towns, and counties 
 20.2   under chapter 477A; and 
 20.3      (iii) disparity reduction aid under section 273.1398; 
 20.4      (5) for homestead residential and agricultural properties, 
 20.5   the homestead and agricultural credit aid apportioned to the 
 20.6   property.  This amount is obtained by multiplying the total 
 20.7   local tax rate by the difference between the property's gross 
 20.8   and net tax capacities under section 273.13.  This amount must 
 20.9   be separately stated and identified as "homestead and 
 20.10  agricultural credit."  For purposes of comparison with the 
 20.11  previous year's amount for the statement for taxes payable in 
 20.12  1990, the statement must show the homestead credit for taxes 
 20.13  payable in 1989 under section 273.13, and the agricultural 
 20.14  credit under section 273.132 for taxes payable in 1989; 
 20.15     (6) any credits received under sections 273.119; 273.123; 
 20.16  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 20.17  473H.10, except that the amount of credit received under section 
 20.18  273.135 must be separately stated and identified as "taconite 
 20.19  tax relief"; and 
 20.20     (7) the net tax payable in the manner required in paragraph 
 20.21  (a).  
 20.22     The commissioner of revenue shall certify to the county 
 20.23  auditor the actual or estimated aids enumerated in clauses (3) 
 20.24  and (4) that local governments will receive in the following 
 20.25  year.  In the case of a county containing a city of the first 
 20.26  class, for taxes levied in 1991, and for all counties for taxes 
 20.27  levied in 1992 and thereafter, the commissioner must certify 
 20.28  this amount by September 1.  
 20.29     Sec. 15.  Minnesota Statutes 1994, section 284.28, 
 20.30  subdivision 2, is amended to read: 
 20.31     Subd. 2.  Except as provided in subdivision 5, no cause of 
 20.32  action or defense shall be asserted or maintained upon any claim 
 20.33  adverse to the state, or its successors in interest, including 
 20.34  but not limited to any claim based upon any failure, omission, 
 20.35  error, or defect described in subdivision 1, respecting any 
 20.36  lands claimed to have been forfeited to the state for taxes, 
 21.1   unless such cause of action or defense is asserted in an action 
 21.2   commenced within one year after the filing of the county 
 21.3   auditor's certificate of forfeiture, as provided by section 
 21.4   281.23, subdivision 8 9, and acts supplementary thereto, or by 
 21.5   any other law hereafter enacted providing for the filing and 
 21.6   recording of such certificates. 
 21.7      Sec. 16.  Minnesota Statutes 1994, section 298.75, 
 21.8   subdivision 2, is amended to read: 
 21.9      Subd. 2.  A county shall impose upon every importer and 
 21.10  operator a production tax equal to ten cents per cubic yard or 
 21.11  seven cents per ton of aggregate material removed except that 
 21.12  the county board may decide not to impose this tax if it 
 21.13  determines that in the previous year operators removed less than 
 21.14  20,000 tons or 14,000 cubic yards of aggregate material from 
 21.15  that county.  The tax shall be imposed on aggregate material 
 21.16  produced in the county when the aggregate material is 
 21.17  transported from the extraction site or sold, when in the case 
 21.18  of storage the.  When aggregate material is stored in a 
 21.19  stockpile is within the state of Minnesota and the highways are 
 21.20  a public highway, road, or street is not used for transporting 
 21.21  the aggregate material, the tax shall be imposed either when the 
 21.22  aggregate material is sold, or when it is transported from the 
 21.23  stockpile site, or when it is used from the stockpile, whichever 
 21.24  occurs first.  The tax shall be imposed on an importer when the 
 21.25  aggregate material is imported into the county that imposes the 
 21.26  tax.  
 21.27     If the aggregate material is transported directly from the 
 21.28  extraction site to a waterway, railway, or another mode of 
 21.29  transportation other than a highway, road or street, the tax 
 21.30  imposed by this section shall be apportioned equally between the 
 21.31  county where the aggregate material is extracted and the county 
 21.32  to which the aggregate material is originally transported.  If 
 21.33  that destination is not located in Minnesota, then the county 
 21.34  where the aggregate material was extracted shall receive all of 
 21.35  the proceeds of the tax.  
 21.36     Sec. 17.  Minnesota Statutes 1994, section 428A.01, 
 22.1   subdivision 5, is amended to read: 
 22.2      Subd. 5.  [NET TAX CAPACITY.] Except as provided in section 
 22.3   428A.05, "net tax capacity" means the net tax capacity most 
 22.4   recently certified by the county auditor under section 428A.03, 
 22.5   subdivision 1a, before the effective date of the ordinance or 
 22.6   resolution adopted under section 428A.02 or 428A.03. 
 22.7      Sec. 18.  Minnesota Statutes 1994, section 428A.03, is 
 22.8   amended by adding a subdivision to read: 
 22.9      Subd. 1a.  [CERTIFICATION OF NET TAX CAPACITY.] Upon a 
 22.10  request of the city, the county auditor must certify the most 
 22.11  recent net tax capacity of the taxable property subject to 
 22.12  service charges within the special service district. 
 22.13     Sec. 19.  Minnesota Statutes 1994, section 428A.05, is 
 22.14  amended to read: 
 22.15     428A.05 [COLLECTION OF SERVICE CHARGES.] 
 22.16     Service charges may be imposed on the basis of the net tax 
 22.17  capacity of the property on which the service charge is imposed 
 22.18  but must be spread only upon the net tax capacity of the taxable 
 22.19  property located in the geographic area described in the 
 22.20  ordinance.  Service charges based on net tax capacity may be 
 22.21  payable and collected at the same time and in the same manner as 
 22.22  provided for payment and collection of ad valorem taxes.  When 
 22.23  made payable in the same manner as ad valorem taxes, service 
 22.24  charges not paid on or before the applicable due date shall be 
 22.25  subject to the same penalty and interest as in the case of ad 
 22.26  valorem tax amounts not paid by the respective due date.  The 
 22.27  due date for a service charge payable in the same manner as ad 
 22.28  valorem taxes is the due date given in law for the real or 
 22.29  personal property tax for the property on which the service 
 22.30  charge is imposed.  Services charges imposed on net tax capacity 
 22.31  which are to become payable in the following year must be 
 22.32  certified to the county auditor by the date provided in section 
 22.33  429.061, subdivision 3, for the annual certification of special 
 22.34  assessment installments.  Other service charges imposed must be 
 22.35  collected as provided by ordinance.  Service charges based on 
 22.36  net tax capacity collected under sections 428A.01 to 428A.10 are 
 23.1   not included in computations under section 469.177, chapter 
 23.2   473F, or any other law that applies to general ad valorem 
 23.3   levies.  For the purpose of this section, "net tax capacity" 
 23.4   means the net tax capacity most recently determined at the time 
 23.5   that tax rates are determined under section 275.08. 
 23.6      Sec. 20.  Minnesota Statutes 1994, section 469.177, 
 23.7   subdivision 9, is amended to read: 
 23.8      Subd. 9.  [DISTRIBUTIONS OF EXCESS TAXES ON CAPTURED NET 
 23.9   TAX CAPACITY.] (a) If the amount of tax paid on captured net tax 
 23.10  capacity exceeds the amount of tax increment, the county auditor 
 23.11  shall distribute the excess to the municipality, county, and 
 23.12  school district as follows:  each governmental unit's share of 
 23.13  the excess equals 
 23.14     (1) the total amount of the excess for the tax increment 
 23.15  financing district, multiplied by 
 23.16     (2) a fraction, the numerator of which is the current local 
 23.17  tax rate of the governmental unit less the governmental unit's 
 23.18  local tax rate for the year the original local tax rate for the 
 23.19  district was certified (in no case may this amount be less than 
 23.20  zero) and the denominator of which is the sum of the numerators 
 23.21  for the municipality, county, and school district. 
 23.22  If the entire increase in the local tax rate is attributable to 
 23.23  a taxing district, other than the municipality, county, or 
 23.24  school district, then the excess must be distributed to the 
 23.25  municipality, county, and school district in proportion to their 
 23.26  respective local tax rates. 
 23.27     The school district's tax rate must be divided into the 
 23.28  portion of the tax rate attributable (1) to state equalized 
 23.29  levies, and (2) unequalized levies.  Equalized levies mean the 
 23.30  levies identified in section 273.1398, subdivision 1, and As 
 23.31  used in this subdivision, "equalized levies" means the sum of 
 23.32  the maximum amounts that may be levied for:  (i) general 
 23.33  education under section 124A.23, subdivision 2; (ii) 
 23.34  supplemental revenue under section 124A.22, subdivision 8a; 
 23.35  (iii) capital expenditure facilities revenue under section 
 23.36  124.243, subdivision 3; (iv) capital expenditure equipment 
 24.1   revenue under section 124.244, subdivision 2; and (v) basic 
 24.2   transportation under section 124.226, subdivision 1.  
 24.3   Unequalized levies mean the rest of the school district's 
 24.4   levies.  The calculations under clause (2) must determine the 
 24.5   amount of excess taxes attributable to each portion of the 
 24.6   school district's tax rate.  If one of the portions of the 
 24.7   change in the school district tax rate is less than zero and the 
 24.8   combined change is greater than zero, the combined rate must be 
 24.9   used and all the school district's share of excess taxes 
 24.10  allocated to that portion of the tax rate. 
 24.11     (b) The amounts distributed shall be deducted in computing 
 24.12  the levy limits of the taxing district for the succeeding 
 24.13  taxable year.  In the case of a school district, only the 
 24.14  proportion of the excess taxes attributable to unequalized 
 24.15  levies that are subject to a fixed dollar amount levy limit 
 24.16  shall be deducted from the levy limit. 
 24.17     (c) In the case of distributions to a school district that 
 24.18  are attributable to state equalized levies, the county auditor 
 24.19  shall report amounts distributed to the commissioner of 
 24.20  education in the same manner as provided for excess increments 
 24.21  under section 469.176, subdivision 2, and the distribution shall 
 24.22  be deducted from the school district's state aid payments. 
 24.23     Sec. 21.  Minnesota Statutes 1994, section 473.446, 
 24.24  subdivision 1, is amended to read: 
 24.25     Subdivision 1.  [TAXATION WITHIN TRANSIT TAXING DISTRICT.] 
 24.26  For the purposes of sections 473.404 to 473.449 and the 
 24.27  metropolitan transit system, except as otherwise provided in 
 24.28  this subdivision, the council shall levy each year upon all 
 24.29  taxable property within the metropolitan transit taxing 
 24.30  district, defined in subdivision 2, a transit tax consisting of: 
 24.31     (a) an amount which shall be used for payment of the 
 24.32  expenses of operating transit and paratransit service and to 
 24.33  provide for payment of obligations issued by the council under 
 24.34  section 473.436, subdivision 6; 
 24.35     (b) an additional amount, if any, the council determines to 
 24.36  be necessary to provide for the full and timely payment of its 
 25.1   certificates of indebtedness and other obligations outstanding 
 25.2   on July 1, 1985, to which property taxes under this section have 
 25.3   been pledged; and 
 25.4      (c) an additional amount necessary to provide full and 
 25.5   timely payment of certificates of indebtedness, bonds, including 
 25.6   refunding bonds or other obligations issued or to be issued 
 25.7   under section 473.39 by the council for purposes of acquisition 
 25.8   and betterment of property and other improvements of a capital 
 25.9   nature and to which the council has specifically pledged tax 
 25.10  levies under this clause. 
 25.11     The property tax levied by the council for general purposes 
 25.12  under clause (a) must not exceed the following amount for the 
 25.13  years specified: 
 25.14     (1) for taxes payable in 1995, the council's property tax 
 25.15  levy limitation for general transit purposes is equal to the 
 25.16  former regional transit board's property tax levy limitation for 
 25.17  general transit purposes under this subdivision, for taxes 
 25.18  payable in 1994, multiplied by an index for market valuation 
 25.19  changes equal to the total market valuation of all taxable 
 25.20  property located within the metropolitan transit taxing district 
 25.21  for the current assessment taxes payable year divided by the 
 25.22  total market valuation of all taxable property located within 
 25.23  the metropolitan transit taxing district for the previous 
 25.24  assessment taxes payable year; and 
 25.25     (2) for taxes payable in 1996 and subsequent years, the 
 25.26  product of (i) the council's property tax levy limitation for 
 25.27  general transit purposes for the previous year determined under 
 25.28  this subdivision multiplied by (ii) an index for market 
 25.29  valuation changes equal to the total market valuation of all 
 25.30  taxable property located within the metropolitan transit taxing 
 25.31  district for the current taxes payable year divided by the total 
 25.32  market valuation of all taxable property located within the 
 25.33  metropolitan transit taxing district for the previous taxes 
 25.34  payable year.  
 25.35     For the taxes payable year 1995, the index for market 
 25.36  valuation changes shall be multiplied by an amount equal to the 
 26.1   sum of the regional transit board's property tax levy limitation 
 26.2   for the taxes payable year 1994 and $160,665.  The $160,665 
 26.3   increase shall be a permanent adjustment to the levy limit base 
 26.4   used in determining the regional transit board's property tax 
 26.5   levy limitation for general purposes for subsequent taxes 
 26.6   payable years. 
 26.7      For the purpose of determining the council's property tax 
 26.8   levy limitation for general transit purposes under this 
 26.9   subdivision, "total market valuation" means the total market 
 26.10  valuation of all taxable property within the metropolitan 
 26.11  transit taxing district without valuation adjustments for fiscal 
 26.12  disparities (chapter 473F), tax increment financing (sections 
 26.13  469.174 to 469.179), and high voltage transmission lines 
 26.14  (section 273.425). 
 26.15     The county auditor shall reduce the tax levied pursuant to 
 26.16  this subdivision on all property within statutory and home rule 
 26.17  charter cities and towns that receive full-peak service and 
 26.18  limited off-peak service by an amount equal to the tax levy that 
 26.19  would be produced by applying a rate of 0.510 percent of net tax 
 26.20  capacity on the property.  The county auditor shall reduce the 
 26.21  tax levied pursuant to this subdivision on all property within 
 26.22  statutory and home rule charter cities and towns that receive 
 26.23  limited peak service by an amount equal to the tax levy that 
 26.24  would be produced by applying a rate of 0.765 percent of net tax 
 26.25  capacity on the property.  The amounts so computed by the county 
 26.26  auditor shall be submitted to the commissioner of revenue as 
 26.27  part of the abstracts of tax lists required to be filed with the 
 26.28  commissioner under section 275.29.  Any prior year adjustments 
 26.29  shall also be certified in the abstracts of tax lists.  The 
 26.30  commissioner shall review the certifications to determine their 
 26.31  accuracy and may make changes in the certification as necessary 
 26.32  or return a certification to the county auditor for 
 26.33  corrections.  The commissioner shall pay to the council the 
 26.34  amounts certified by the county auditors on the dates provided 
 26.35  in section 273.1398.  There is annually appropriated from the 
 26.36  general fund in the state treasury to the department of revenue 
 27.1   the amounts necessary to make these payments.  
 27.2      For the purposes of this subdivision, "full-peak and 
 27.3   limited off-peak service" means peak period regular route 
 27.4   service, plus weekday midday regular route service at intervals 
 27.5   longer than 60 minutes on the route with the greatest frequency; 
 27.6   and "limited peak period service" means peak period regular 
 27.7   route service only.  
 27.8      For the purposes of property taxes payable in the following 
 27.9   year, the council shall annually determine which cities and 
 27.10  towns qualify for the 0.510 percent or 0.765 percent tax 
 27.11  capacity rate reduction and shall certify this list to the 
 27.12  county auditor of the county wherein such cities and towns are 
 27.13  located on or before September 15.  No changes may be made to 
 27.14  the annual list after September 15. 
 27.15     Sec. 22.  Minnesota Statutes 1994, section 473.711, 
 27.16  subdivision 2, is amended to read: 
 27.17     Subd. 2.  [BUDGET; TAX LEVY.] The metropolitan mosquito 
 27.18  control commission shall prepare an annual budget.  The budget 
 27.19  may provide for expenditures in an amount not exceeding the 
 27.20  property tax levy limitation determined in this subdivision.  
 27.21  The commission may levy a tax on all taxable property in the 
 27.22  district as defined in section 473.702 to provide funds for the 
 27.23  purposes of sections 473.701 to 473.716.  The tax shall not 
 27.24  exceed the property tax levy limitation determined in this 
 27.25  subdivision.  A participating county may agree to levy an 
 27.26  additional tax to be used by the commission for the purposes of 
 27.27  sections 473.701 to 473.716 but the sum of the county's and 
 27.28  commission's taxes may not exceed the county's proportionate 
 27.29  share of the property tax levy limitation determined under this 
 27.30  subdivision based on the ratio of its total net tax capacity to 
 27.31  the total net tax capacity of the entire district as adjusted by 
 27.32  section 270.12, subdivision 3.  The auditor of each county in 
 27.33  the district shall add the amount of the levy made by the 
 27.34  district to other taxes of the county for collection by the 
 27.35  county treasurer with other taxes.  When collected, the county 
 27.36  treasurer shall make settlement of the tax with the district in 
 28.1   the same manner as other taxes are distributed to political 
 28.2   subdivisions.  No county shall levy any tax for mosquito, 
 28.3   disease vectoring tick, and black gnat (Simuliidae) control 
 28.4   except under sections 473.701 to 473.716.  The levy shall be in 
 28.5   addition to other taxes authorized by law. 
 28.6      The property tax levied by the metropolitan mosquito 
 28.7   control commission shall not exceed the product of (1) the 
 28.8   commission's property tax levy limitation for the previous year 
 28.9   determined under this subdivision multiplied by (2) an index for 
 28.10  market valuation changes equal to the total market valuation of 
 28.11  all taxable property located within the district for the current 
 28.12  assessment taxes payable year divided by the total market 
 28.13  valuation of all taxable property located within the district 
 28.14  for the previous assessment taxes payable year. 
 28.15     For the purpose of determining the commission's property 
 28.16  tax levy limitation under this subdivision, "total market 
 28.17  valuation" means the total market valuation of all taxable 
 28.18  property within the district without valuation adjustments for 
 28.19  fiscal disparities (chapter 473F), tax increment financing 
 28.20  (sections 469.174 to 469.179), and high voltage transmission 
 28.21  lines (section 273.425). 
 28.22     Sec. 23.  Minnesota Statutes 1994, section 473F.02, 
 28.23  subdivision 8, is amended to read: 
 28.24     Subd. 8.  [MUNICIPALITY.] "Municipality" means a city, 
 28.25  town, or township located in whole or part within the area, but 
 28.26  not the cities of New Prague or Northfield.  If a municipality 
 28.27  is located partly within and partly without the area, the 
 28.28  references in sections 473F.01 to 473F.13 to property or any 
 28.29  portion thereof subject to taxation or taxing jurisdiction 
 28.30  within the municipality are to such property or portion thereof 
 28.31  as is located in that portion of the municipality within the 
 28.32  area, except that the fiscal capacity of such a municipality 
 28.33  shall be computed upon the basis of the valuation and population 
 28.34  of the entire municipality. 
 28.35     A municipality shall be excluded from the area if its 
 28.36  municipal comprehensive zoning and planning policies 
 29.1   conscientiously deliberately exclude most commercial-industrial 
 29.2   development, for reasons other than preserving an agricultural 
 29.3   use.  The metropolitan council and the commissioner of revenue 
 29.4   shall jointly make this determination annually and shall notify 
 29.5   the commissioner of revenue and those municipalities that are 
 29.6   ineligible to participate in the tax base sharing program 
 29.7   provided in this chapter for the following year. 
 29.8      Sec. 24.  [REPEALER.] 
 29.9      Minnesota Statutes 1994, sections 270.49; and 270.493; and 
 29.10  Laws 1988, chapter 698, section 5, are repealed. 
 29.11     Sec. 25.  [EFFECTIVE DATE.] 
 29.12     Sections 1 to 5, 7 to 9, 11 to 19, 23, and 24 are effective 
 29.13  the day following final enactment.  Section 6 is effective for 
 29.14  taxes payable in 1997 and thereafter.  Section 10 is effective 
 29.15  for aids payable in 1995 and thereafter.  Section 20 is 
 29.16  effective for taxes payable in 1994 and thereafter.  Sections 21 
 29.17  and 22 are effective for taxes payable in 1995 and thereafter.  
 29.18                             ARTICLE 3
 29.19                      SALES AND SPECIAL TAXES
 29.20     Section 1.  Minnesota Statutes 1994, section 289A.18, 
 29.21  subdivision 4, is amended to read: 
 29.22     Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
 29.23  tax returns must be filed on or before the 20th day of the month 
 29.24  following the close of the preceding reporting period, except 
 29.25  that annual use tax returns provided for under section 289A.11, 
 29.26  subdivision 1, must be filed by April 15 following the close of 
 29.27  the calendar year, in the case of individuals.  Annual use tax 
 29.28  returns of businesses, including sole proprietorships, and 
 29.29  annual sales tax returns must be filed by February 5 following 
 29.30  the close of the calendar year.  
 29.31     (b) Except for the return for the June reporting period, 
 29.32  which is due on the following August 25, returns filed by 
 29.33  retailers required to remit liabilities by means of funds 
 29.34  transfer under section 289A.20, subdivision 4, paragraph (d), 
 29.35  are due on or before the 25th day of the month following the 
 29.36  close of the preceding reporting period.  The return for the May 
 30.1   liability and 75 percent of the estimated June liability is due 
 30.2   on the date payment of the estimated June liability is due, and 
 30.3   on or before August 25 of a year, the retailer must file a 
 30.4   return showing the actual June liability. 
 30.5      (c) If a retailer has an average sales and use tax 
 30.6   liability, including local sales and use taxes administered by 
 30.7   the commissioner, equal to or less than $500 per month in any 
 30.8   quarter of a calendar year, and has substantially complied with 
 30.9   the tax laws during the preceding four calendar quarters, the 
 30.10  retailer may request authorization to file and pay the taxes 
 30.11  quarterly in subsequent calendar quarters.  The authorization 
 30.12  remains in effect during the period in which the retailer's 
 30.13  quarterly returns reflect sales and use tax liabilities of less 
 30.14  than $1,500 and there is continued compliance with state tax 
 30.15  laws. 
 30.16     (d) If a retailer has an average sales and use tax 
 30.17  liability, including local sales and use taxes administered by 
 30.18  the commissioner, equal to or less than $100 per month during a 
 30.19  calendar year, and has substantially complied with the tax laws 
 30.20  during that period, the retailer may request authorization to 
 30.21  file and pay the taxes annually in subsequent years.  The 
 30.22  authorization remains in effect during the period in which the 
 30.23  retailer's annual returns reflect sales and use tax liabilities 
 30.24  of less than $1,200 and there is continued compliance with state 
 30.25  tax laws. 
 30.26     (e) The commissioner may also grant quarterly or annual 
 30.27  filing and payment authorizations to retailers if the 
 30.28  commissioner concludes that the retailers' future tax 
 30.29  liabilities will be less than the monthly totals identified in 
 30.30  paragraphs (c) and (d).  An authorization granted under this 
 30.31  paragraph is subject to the same conditions as an authorization 
 30.32  granted under paragraphs (c) and (d). 
 30.33     Sec. 2.  Minnesota Statutes 1994, section 297A.01, 
 30.34  subdivision 3, is amended to read: 
 30.35     Subd. 3.  A "sale" and a "purchase" includes, but is not 
 30.36  limited to, each of the following transactions: 
 31.1      (a) Any transfer of title or possession, or both, of 
 31.2   tangible personal property, whether absolutely or conditionally, 
 31.3   and the leasing of or the granting of a license to use or 
 31.4   consume tangible personal property other than manufactured homes 
 31.5   used for residential purposes for a continuous period of 30 days 
 31.6   or more, for a consideration in money or by exchange or barter; 
 31.7      (b) The production, fabrication, printing, or processing of 
 31.8   tangible personal property for a consideration for consumers who 
 31.9   furnish either directly or indirectly the materials used in the 
 31.10  production, fabrication, printing, or processing; 
 31.11     (c) The furnishing, preparing, or serving for a 
 31.12  consideration of food, meals, or drinks.  "Sale" does not 
 31.13  include: 
 31.14     (1) meals or drinks served to patients, inmates, or persons 
 31.15  residing at hospitals, sanitariums, nursing homes, senior 
 31.16  citizens homes, and correctional, detention, and detoxification 
 31.17  facilities; 
 31.18     (2) meals or drinks purchased for and served exclusively to 
 31.19  individuals who are 60 years of age or over and their spouses or 
 31.20  to the handicapped and their spouses by governmental agencies, 
 31.21  nonprofit organizations, agencies, or churches or pursuant to 
 31.22  any program funded in whole or part through 42 USCA sections 
 31.23  3001 through 3045, wherever delivered, prepared or served; or 
 31.24     (3) meals and lunches served at public and private schools, 
 31.25  universities, or colleges.  Notwithstanding section 297A.25, 
 31.26  subdivision 2, taxable food or meals include, but are not 
 31.27  limited to, the following:  
 31.28     (i) heated food or drinks; 
 31.29     (ii) sandwiches prepared by the retailer; 
 31.30     (iii) single sales of prepackaged ice cream or ice milk 
 31.31  novelties prepared by the retailer; 
 31.32     (iv) hand-prepared or dispensed ice cream or ice milk 
 31.33  products including cones, sundaes, and snow cones; 
 31.34     (v) soft drinks and other beverages prepared or served by 
 31.35  the retailer; 
 31.36     (vi) gum; 
 32.1      (vii) ice; 
 32.2      (viii) all food sold in vending machines; 
 32.3      (ix) party trays prepared by the retailers; and 
 32.4      (x) all meals and single servings of packaged snack food, 
 32.5   single cans or bottles of pop, sold in restaurants and bars; 
 32.6      (d) The granting of the privilege of admission to places of 
 32.7   amusement, recreational areas, or athletic events, except a 
 32.8   world championship football game sponsored by the national 
 32.9   football league, and the privilege of having access to and the 
 32.10  use of amusement devices, tanning facilities, reducing salons, 
 32.11  steam baths, turkish baths, health clubs, and spas or athletic 
 32.12  facilities; 
 32.13     (e) The furnishing for a consideration of lodging and 
 32.14  related services by a hotel, rooming house, tourist court, motel 
 32.15  or trailer camp and of the granting of any similar license to 
 32.16  use real property other than the renting or leasing thereof for 
 32.17  a continuous period of 30 days or more; 
 32.18     (f) The furnishing for a consideration of electricity, gas, 
 32.19  water, or steam for use or consumption within this state, or 
 32.20  local exchange telephone service, intrastate toll service, and 
 32.21  interstate toll service, if that service originates from and is 
 32.22  charged to a telephone located in this state.  Telephone service 
 32.23  includes paging services and private communication service, as 
 32.24  defined in United States Code, title 26, section 4252(d), except 
 32.25  for private communication service purchased by an agent acting 
 32.26  on behalf of the state lottery.  The furnishing for a 
 32.27  consideration of access to telephone services by a hotel to its 
 32.28  guests is a sale under this clause.  Sales by municipal 
 32.29  corporations in a proprietary capacity are included in the 
 32.30  provisions of this clause.  The furnishing of water and sewer 
 32.31  services for residential use shall not be considered a sale.  
 32.32  The sale of natural gas to be used as a fuel in vehicles 
 32.33  propelled by natural gas shall not be considered a sale for the 
 32.34  purposes of this section; 
 32.35     (g) The furnishing for a consideration of cable television 
 32.36  services, including charges for basic service, charges for 
 33.1   premium service, and any other charges for any other 
 33.2   pay-per-view, monthly, or similar television services; 
 33.3      (h) Notwithstanding section 297A.25, subdivisions 9 and 12, 
 33.4   the sales of racehorses including claiming sales and fees paid 
 33.5   for breeding racehorses or horses previously used for racing 
 33.6   shall be considered a "sale" and a "purchase."  "Racehorse" 
 33.7   means a horse that is or is intended to be used for racing and 
 33.8   whose birth has been recorded by the Jockey Club or the United 
 33.9   States Trotting Association or the American Quarter Horse 
 33.10  Association.  "Sale" does not include fees paid for breeding 
 33.11  horses that are not racehorses; 
 33.12     (i) The furnishing for a consideration of parking services, 
 33.13  whether on a contractual, hourly, or other periodic basis, 
 33.14  except for parking at a meter; 
 33.15     (j) The furnishing for a consideration of services listed 
 33.16  in this paragraph: 
 33.17     (i) laundry and dry cleaning services including cleaning, 
 33.18  pressing, repairing, altering, and storing clothes, linen 
 33.19  services and supply, cleaning and blocking hats, and carpet, 
 33.20  drapery, upholstery, and industrial cleaning.  Laundry and dry 
 33.21  cleaning services do not include services provided by coin 
 33.22  operated facilities operated by the customer; 
 33.23     (ii) motor vehicle washing, waxing, and cleaning services, 
 33.24  including services provided by coin-operated facilities operated 
 33.25  by the customer, and rustproofing, undercoating, and towing of 
 33.26  motor vehicles; 
 33.27     (iii) building and residential cleaning, maintenance, and 
 33.28  disinfecting and exterminating services; 
 33.29     (iv) services provided by detective agencies services, 
 33.30  security services, burglar, fire alarm, and armored car services 
 33.31  not including services performed within the jurisdiction they 
 33.32  serve by off-duty licensed peace officers as defined in section 
 33.33  626.84, subdivision 1; 
 33.34     (v) pet grooming services; 
 33.35     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
 33.36  services; garden planting and maintenance; tree, bush, and shrub 
 34.1   pruning, bracing, spraying, and surgery; tree, bush, shrub and 
 34.2   stump removal; and tree trimming for public utility lines.  
 34.3   Services performed under a construction contract for the 
 34.4   installation of shrubbery, plants, sod, trees, bushes, and 
 34.5   similar items are not taxable; 
 34.6      (vii) solid waste collection and disposal services as 
 34.7   described in section 297A.45; 
 34.8      (viii) massages, except when provided by a licensed health 
 34.9   care facility or professional or upon written referral from a 
 34.10  licensed health care facility or professional for treatment of 
 34.11  illness, injury, or disease; and 
 34.12     (ix) the furnishing for consideration of lodging, board and 
 34.13  care services for animals in kennels and other similar 
 34.14  arrangements, but excluding veterinary and horse boarding 
 34.15  services. 
 34.16  The services listed in this paragraph are taxable under section 
 34.17  297A.02 if the service is performed wholly within Minnesota or 
 34.18  if the service is performed partly within and partly without 
 34.19  Minnesota and the greater proportion of the service is performed 
 34.20  in Minnesota, based on the cost of performance.  In applying the 
 34.21  provisions of this chapter, the terms "tangible personal 
 34.22  property" and "sales at retail" include taxable services and the 
 34.23  provision of taxable services, unless specifically provided 
 34.24  otherwise.  Services performed by an employee for an employer 
 34.25  are not taxable under this paragraph.  Services performed by a 
 34.26  partnership or association for another partnership or 
 34.27  association are not taxable under this paragraph if one of the 
 34.28  entities owns or controls more than 80 percent of the voting 
 34.29  power of the equity interest in the other entity.  Services 
 34.30  performed between members of an affiliated group of corporations 
 34.31  are not taxable.  For purposes of this section, "affiliated 
 34.32  group of corporations" includes those entities that would be 
 34.33  classified as a member of an affiliated group under United 
 34.34  States Code, title 26, section 1504, and who are eligible to 
 34.35  file a consolidated tax return for federal income tax purposes; 
 34.36     (k) A "sale" and a "purchase" includes the transfer of 
 35.1   computer software, meaning information and directions that 
 35.2   dictate the function performed by data processing equipment.  A 
 35.3   "sale" and a "purchase" does not include the design, 
 35.4   development, writing, translation, fabrication, lease, or 
 35.5   transfer for a consideration of title or possession of a custom 
 35.6   computer program; and 
 35.7      (l) The granting of membership in a club, association, or 
 35.8   other organization if: 
 35.9      (1) the club, association, or other organization makes 
 35.10  available for the use of its members sports and athletic 
 35.11  facilities (without regard to whether a separate charge is 
 35.12  assessed for use of the facilities); and 
 35.13     (2) use of the sports and athletic facilities is not made 
 35.14  available to the general public on the same basis as it is made 
 35.15  available to members.  
 35.16  Granting of membership includes both one-time initiation fees 
 35.17  and periodic membership dues.  Sports and athletic facilities 
 35.18  include golf courses, tennis, racquetball, handball and squash 
 35.19  courts, basketball and volleyball facilities, running tracks, 
 35.20  exercise equipment, swimming pools, and other similar athletic 
 35.21  or sports facilities.  The provisions of this paragraph do not 
 35.22  apply to camps or other recreation facilities owned and operated 
 35.23  by an exempt organization under section 501(c)(3) of the 
 35.24  Internal Revenue Code of 1986, as amended through December 31, 
 35.25  1992, for educational and social activities for young people 
 35.26  primarily age 18 and under.  
 35.27     Sec. 3.  Minnesota Statutes 1994, section 297E.02, 
 35.28  subdivision 1, is amended to read: 
 35.29     Subdivision 1.  [IMPOSITION.] A tax is imposed on all 
 35.30  lawful gambling other than (1) pull-tabs purchased and placed 
 35.31  into inventory after January 1, 1987, and (2) tipboards 
 35.32  purchased and placed into inventory after June 30, 1988, at the 
 35.33  rate of ten percent on the gross receipts as defined in section 
 35.34  349.12 297E.01, subdivision 21 8, less prizes actually paid.  
 35.35  The tax imposed by this subdivision is in lieu of the tax 
 35.36  imposed by section 297A.02 and all local taxes and license fees 
 36.1   except a fee authorized under section 349.16, subdivision 8, or 
 36.2   a tax authorized under subdivision 5.  
 36.3      The tax imposed under this subdivision is payable by the 
 36.4   organization or party conducting, directly or indirectly, the 
 36.5   gambling.  
 36.6      Sec. 4.  Minnesota Statutes 1994, section 297E.02, 
 36.7   subdivision 6, is amended to read: 
 36.8      Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
 36.9   imposed under subdivisions 1 and 4, a tax is imposed on the 
 36.10  combined receipts of the organization.  As used in this section, 
 36.11  "combined receipts" is the sum of the organization's gross 
 36.12  receipts from lawful gambling less gross receipts directly 
 36.13  derived from the conduct of bingo, raffles, and paddlewheels, as 
 36.14  defined in section 349.12 297E.01, subdivision 21 8, for the 
 36.15  fiscal year.  The combined receipts of an organization are 
 36.16  subject to a tax computed according to the following schedule: 
 36.17     If the combined receipts for the          The tax is:
 36.18     fiscal year are:
 36.19     Not over $500,000                   zero
 36.20     Over $500,000, but not over
 36.21     $700,000                            two percent of the amount
 36.22                                         over $500,000, but not
 36.23                                         over $700,000
 36.24     Over $700,000, but not over
 36.25     $900,000                            $4,000 plus four percent
 36.26                                         of the amount over
 36.27                                         $700,000, but not over
 36.28                                         $900,000
 36.29     Over $900,000                       $12,000 plus six percent
 36.30                                         of the amount over
 36.31                                         $900,000
 36.32     Sec. 5.  Minnesota Statutes 1994, section 297E.02, 
 36.33  subdivision 11, is amended to read: 
 36.34     Subd. 11.  [UNPLAYED OR DEFECTIVE PULL-TABS OR TIPBOARDS.] 
 36.35  If a deal of pull-tabs or tipboards registered with the board or 
 36.36  bar coded in accordance with chapter chapters 297E and 349 and 
 37.1   upon which the tax imposed by subdivision 4 has been paid is 
 37.2   returned unplayed to the distributor, the commissioner shall 
 37.3   allow a refund of the tax paid.  
 37.4      If a defective deal registered with the board or bar coded 
 37.5   in accordance with chapter chapters 297E and 349 and upon which 
 37.6   the taxes have been paid is returned to the manufacturer, the 
 37.7   distributor shall submit to the commissioner of revenue 
 37.8   certification from the manufacturer that the deal was returned 
 37.9   and in what respect it was defective.  The certification must be 
 37.10  on a form prescribed by the commissioner and must contain 
 37.11  additional information the commissioner requires.  
 37.12     The commissioner may require that no refund under this 
 37.13  subdivision be made unless the returned pull-tabs or tipboards 
 37.14  have been set aside for inspection by the commissioner's 
 37.15  employee.  
 37.16     Reductions in previously paid taxes authorized by this 
 37.17  subdivision must be made when and in the manner prescribed by 
 37.18  the commissioner.  
 37.19     Sec. 6.  Minnesota Statutes 1994, section 297E.031, 
 37.20  subdivision 1, is amended to read: 
 37.21     Subdivision 1.  [APPLICATION AND ISSUANCE.] A distributor 
 37.22  who sells gambling products under this chapter must file an 
 37.23  application with the commissioner an application, on a form 
 37.24  prescribed by the commissioner, for a gambling tax permit and 
 37.25  identification number.  The commissioner, when satisfied that 
 37.26  the applicant has a valid license from the board meets all 
 37.27  applicable requirements under chapters 297E and 349, shall issue 
 37.28  the applicant a permit and number.  A permit is not assignable 
 37.29  and is valid only for the distributor in whose name it is issued.
 37.30     Sec. 7.  Minnesota Statutes 1994, section 297E.13, 
 37.31  subdivision 5, is amended to read: 
 37.32     Subd. 5.  [UNTAXED GAMBLING EQUIPMENT.] It is a gross 
 37.33  misdemeanor for a person to possess gambling equipment for 
 37.34  resale in this state that has not been stamped or bar-coded in 
 37.35  accordance with chapter chapters 297E and 349 and upon which the 
 37.36  taxes imposed by chapter 297A or section 297E.02, subdivision 4, 
 38.1   have not been paid.  The director of gambling enforcement or the 
 38.2   commissioner or the designated inspectors and employees of the 
 38.3   director or commissioner may seize in the name of the state of 
 38.4   Minnesota any unregistered or untaxed gambling equipment.  
 38.5      Sec. 8.  Minnesota Statutes 1994, section 325D.33, 
 38.6   subdivision 4, is amended to read: 
 38.7      Subd. 4.  [WHOLESALER TO PRESERVE COPIES OF INVOICES.] 
 38.8   Every person who sells cigarettes to persons other than the 
 38.9   ultimate consumer shall prepare for each sale itemized invoices 
 38.10  showing the seller's name and address, the purchaser's name and 
 38.11  address, the date of sale, and all prices and discounts and 
 38.12  shall keep legible copies of them for one year from the date of 
 38.13  sale.  
 38.14     Sec. 9.  Minnesota Statutes 1994, section 349.163, 
 38.15  subdivision 5, is amended to read: 
 38.16     Subd. 5.  [PULL-TAB AND TIPBOARD FLARES.] (a) A 
 38.17  manufacturer may not ship or cause to be shipped into this state 
 38.18  or sell for use or resale in this state any deal of pull-tabs or 
 38.19  tipboards that does not have its own individual flare as 
 38.20  required for that deal by this subdivision and rule of the 
 38.21  board.  A person other than a manufacturer may not manufacture, 
 38.22  alter, modify, or otherwise change a flare for a deal of 
 38.23  pull-tabs or tipboards except as allowed by this chapter or 
 38.24  board rules. 
 38.25     (b) A manufacturer must comply with either paragraphs (c) 
 38.26  to (g) or (f) to (j) with respect to pull-tabs and tipboards 
 38.27  sold by the manufacturer before January 1, 1995, for use or 
 38.28  resale in Minnesota or shipped into or caused to be shipped into 
 38.29  Minnesota by the manufacturer before January 1, 1995.  A 
 38.30  manufacturer must comply with paragraphs (f) to (j) with respect 
 38.31  to pull-tabs and tipboards sold by the manufacturer on and after 
 38.32  January 1, 1995, for use or resale in Minnesota or shipped into 
 38.33  or caused to be shipped into Minnesota by the manufacturer on 
 38.34  and after January 1, 1995.  Paragraphs (c) to (e) expire January 
 38.35  1, 1995. 
 38.36     (c) The flare of each deal of pull-tabs and tipboards sold 
 39.1   by a manufacturer for use or resale in Minnesota must have the 
 39.2   Minnesota gambling stamp affixed.  The flare, with the stamp 
 39.3   affixed, must be placed inside the wrapping of the deal which 
 39.4   the flare describes. 
 39.5      (d) Each pull-tab and tipboard flare must bear the 
 39.6   following statement printed in letters large enough to be 
 39.7   clearly legible: 
 39.8      "Pull-tab (or tipboard) purchasers -- This pull-tab (or 
 39.9   tipboard) game is not legal in Minnesota unless: 
 39.10     -- a Minnesota gambling stamp is affixed to this sheet, and 
 39.11     -- the serial number handwritten on the gambling stamp is 
 39.12  the same as the serial number printed on this sheet and on the 
 39.13  pull-tab (or tipboard) ticket you have purchased." 
 39.14     (e) The flare of each pull-tab and tipboard game must bear 
 39.15  the serial number of the game, printed in numbers at least 
 39.16  one-half inch high and must be imprinted with the following: 
 39.17     (1) the name of the game; 
 39.18     (2) the name of the manufacturer; 
 39.19     (3) the number of tickets in the deal; and 
 39.20     (4) other information the board by rule requires. 
 39.21     (f) The flare of each pull-tab and tipboard game must have 
 39.22  affixed to or imprinted at the bottom a bar code that provides 
 39.23  all information required by the commissioner of revenue under 
 39.24  section 297E.04, subdivision 2. 
 39.25  The serial number included in the bar code must be the same as 
 39.26  the serial number of the tickets included in the deal.  A 
 39.27  manufacturer who manufactures a deal of pull-tabs must affix to 
 39.28  the outside of the box containing that game the same bar code 
 39.29  that is affixed to or imprinted at the bottom of a flare for 
 39.30  that deal. 
 39.31     (g) No person may alter the bar code that appears on the 
 39.32  outside of a box containing a deal of pull-tabs and tipboards.  
 39.33  Possession of a box containing a deal of pull-tabs and tipboards 
 39.34  that has a bar code different from the bar code of the deal 
 39.35  inside the box is prima facie evidence that the possessor has 
 39.36  altered the bar code on the box. 
 40.1      (h) The flare of each deal of pull-tabs and tipboards sold 
 40.2   by a manufacturer for use or resale in Minnesota must have 
 40.3   imprinted on it a symbol that is at least one inch high and one 
 40.4   inch wide consisting of an outline of the geographic boundaries 
 40.5   of Minnesota with the letters "MN" inside the outline.  The 
 40.6   flare must be placed inside the wrapping of the deal which the 
 40.7   flare describes.  
 40.8      (i) Each pull-tab and tipboard flare must bear the 
 40.9   following statement printed in letters large enough to be 
 40.10  clearly legible: 
 40.11     "Pull-tab (or tipboard) purchasers -- This pull-tab (or 
 40.12  tipboard) game is not legal in Minnesota unless: 
 40.13     -- an outline of Minnesota with letters "MN" inside it is 
 40.14  imprinted on this sheet, and 
 40.15     -- the serial number imprinted on the bar code at the 
 40.16  bottom of this sheet is the same as the serial number on the 
 40.17  pull-tab (or tipboard) ticket you have purchased." 
 40.18     (j) The flare of each pull-tab and tipboard game must have 
 40.19  the serial number of the game imprinted on the bar code at the 
 40.20  bottom of the flare in numerals at least one-half inch high. 
 40.21     Sec. 10.  [REPEALER.] 
 40.22     Minnesota Statutes 1994, section 60A.15, subdivision 7, is 
 40.23  repealed. 
 40.24     Sec. 11.  [INSTRUCTIONS TO REVISOR.] 
 40.25     In the next edition of Minnesota Statutes, the revisor of 
 40.26  statutes shall renumber section 297E.02, subdivision 5, as 
 40.27  section 349.213, subdivision 3, and shall change all references 
 40.28  to that section in Minnesota Statutes or Minnesota Rules 
 40.29  accordingly. 
 40.30     Sec. 12.  [EFFECTIVE DATE.] 
 40.31     Section 1 is effective for returns due in 1996 and 
 40.32  thereafter.  Sections 2 to 11 are effective the day following 
 40.33  final enactment. 
 40.34                             ARTICLE 4 
 40.35                           MINNESOTACARE 
 40.36     Section 1.  Minnesota Statutes 1994, section 295.50, 
 41.1   subdivision 1, is amended to read: 
 41.2      Subdivision 1.  [DEFINITIONS.] For purposes of sections 
 41.3   295.50 to 295.58 295.59, the following terms have the meanings 
 41.4   given. 
 41.5      Sec. 2.  Minnesota Statutes 1994, section 295.50, 
 41.6   subdivision 4, is amended to read: 
 41.7      Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
 41.8   provider" means: 
 41.9      (1) a person furnishing any or all of the following goods 
 41.10  or services directly to a patient or consumer:  medical, 
 41.11  surgical, optical, visual, dental, hearing, nursing services, 
 41.12  drugs, medical supplies, medical appliances, laboratory, 
 41.13  diagnostic or therapeutic services, or any goods and services 
 41.14  not listed above that qualifies qualify for reimbursement under 
 41.15  the medical assistance program provided under chapter 256B; 
 41.16     (2) a staff model health plan company; or 
 41.17     (3) a licensed an ambulance service required to be licensed.
 41.18     (b) Health care provider does not include hospitals, 
 41.19  nursing homes licensed under chapter 144A or licensed in any 
 41.20  other jurisdiction, pharmacies, and surgical centers, bus and 
 41.21  taxicab transportation, or any other providers of transportation 
 41.22  services other than ambulance services required to be licensed, 
 41.23  supervised living facilities for persons with mental retardation 
 41.24  or related conditions, licensed under Minnesota Rules, parts 
 41.25  4665.0100 to 4665.9900, residential care homes licensed under 
 41.26  chapter 144B, board and lodging establishments providing only 
 41.27  custodial services that are licensed under chapter 157 and 
 41.28  registered under section 157.031 to provide supportive services 
 41.29  or health supervision services, adult foster homes as defined in 
 41.30  Minnesota Rules, part 9555.5050 and boarding care homes, as 
 41.31  defined in Minnesota Rules, part 4655.0100. 
 41.32     Sec. 3.  Minnesota Statutes 1994, section 295.50, 
 41.33  subdivision 7, is amended to read: 
 41.34     Subd. 7.  [HOSPITAL.] "Hospital" means a hospital licensed 
 41.35  under chapter 144, or a hospital licensed by any other state or 
 41.36  province or territory of Canada jurisdiction. 
 42.1      Sec. 4.  Minnesota Statutes 1994, section 295.50, 
 42.2   subdivision 13, is amended to read: 
 42.3      Subd. 13.  [SURGICAL CENTER.] "Surgical center" is an 
 42.4   outpatient surgical center as defined in Minnesota Rules, 
 42.5   chapter 4675 or a similar facility located in any other state or 
 42.6   province or territory of Canada jurisdiction. 
 42.7      Sec. 5.  Minnesota Statutes 1994, section 295.53, 
 42.8   subdivision 1, is amended to read: 
 42.9      Subdivision 1.  [EXEMPTIONS.] The following payments are 
 42.10  excluded from the gross revenues subject to the hospital, 
 42.11  surgical center, or health care provider taxes under sections 
 42.12  295.50 to 295.57: 
 42.13     (1) payments received for services provided under the 
 42.14  Medicare program, including payments received from the 
 42.15  government, and organizations governed by sections 1833 and 1876 
 42.16  of title XVIII of the federal Social Security Act, United States 
 42.17  Code, title 42, section 1395, and enrollee deductibles, 
 42.18  coinsurance, and copayments, whether paid by the individual or 
 42.19  by insurer or other third party.  Payments for services not 
 42.20  covered by Medicare are taxable; 
 42.21     (2) medical assistance payments including payments received 
 42.22  directly from the government or from a prepaid plan; 
 42.23     (3) payments received for home health care services; 
 42.24     (4) payments received from hospitals or surgical centers 
 42.25  for goods and services on which liability for tax is imposed 
 42.26  under section 295.52 or the source of funds for the payment is 
 42.27  exempt under clause (1), (2), (7), (8), or (10); 
 42.28     (5) payments received from health care providers for goods 
 42.29  and services on which liability for tax is imposed under 
 42.30  sections 295.52 to 295.57 this chapter or the source of funds 
 42.31  for the payment is exempt under clause (1), (2), (7), (8), or 
 42.32  (10); 
 42.33     (6) amounts paid for legend drugs, other than nutritional 
 42.34  products, to a wholesale drug distributor reduced by 
 42.35  reimbursements received for legend drugs under clauses (1), (2), 
 42.36  (7), and (8); 
 43.1      (7) payments received under the general assistance medical 
 43.2   care program including payments received directly from the 
 43.3   government or from a prepaid plan; 
 43.4      (8) payments received for providing services under the 
 43.5   MinnesotaCare program including payments received directly from 
 43.6   the government or from a prepaid plan and enrollee deductibles, 
 43.7   coinsurance, and copayments; 
 43.8      (9) payments received by a resident health care provider or 
 43.9   the wholly owned subsidiary of a resident health care provider 
 43.10  for care provided outside Minnesota to a patient who is not 
 43.11  domiciled in Minnesota; 
 43.12     (10) payments received from the chemical dependency fund 
 43.13  under chapter 254B; 
 43.14     (11) payments received in the nature of charitable 
 43.15  donations that are not designated for providing patient services 
 43.16  to a specific individual or group; 
 43.17     (12) payments received for providing patient services if 
 43.18  the services are incidental to conducting medical research; 
 43.19     (13) payments received from any governmental agency for 
 43.20  services benefiting the public, not including payments made by 
 43.21  the government in its capacity as an employer or insurer; 
 43.22     (14) payments received for services provided by community 
 43.23  residential mental health facilities licensed under Minnesota 
 43.24  Rules, parts 9520.0500 to 9520.0690, community support programs 
 43.25  and family community support programs approved under Minnesota 
 43.26  Rules, parts 9535.1700 to 9535.1760, and community mental health 
 43.27  centers as defined in section 245.62, subdivision 2; 
 43.28     (15) government payments received by a regional treatment 
 43.29  center; 
 43.30     (16) payments received for hospice care services; 
 43.31     (17) payments received by a resident health care provider 
 43.32  or the wholly owned subsidiary of a resident health care 
 43.33  provider for medical supplies, appliances and equipment 
 43.34  delivered outside of Minnesota; 
 43.35     (18) payments received for services provided by community 
 43.36  supervised living facilities for persons with mental retardation 
 44.1   or related conditions licensed under Minnesota Rules, parts 
 44.2   4665.0100 to 4665.9900; 
 44.3      (19) payments received by a post-secondary educational 
 44.4   institution from student tuition, student activity fees, health 
 44.5   care service fees, government appropriations, donations, or 
 44.6   grants.  Fee for service payments and payments for extended 
 44.7   coverage are taxable; and 
 44.8      (20) (19) payments received for services provided by: 
 44.9   residential care homes licensed under chapter 144B; board and 
 44.10  lodging establishments providing only custodial services, that 
 44.11  are licensed under chapter 157 and registered under section 
 44.12  157.031 to provide supportive services or health supervision 
 44.13  services; and assisted living programs, and congregate housing 
 44.14  programs, and other senior housing options. 
 44.15     Sec. 6.  Minnesota Statutes 1994, section 295.53, 
 44.16  subdivision 2, is amended to read: 
 44.17     Subd. 2.  [DEDUCTIONS FOR STAFF MODEL HEALTH PLAN COMPANY.] 
 44.18  In addition to the exemptions allowed under subdivision 1, a 
 44.19  staff model health plan company may deduct from its gross 
 44.20  revenues for the year: 
 44.21     (1) amounts paid to hospitals, surgical centers, and health 
 44.22  care providers that are not employees of the staff model health 
 44.23  plan company for services on which liability for the tax is 
 44.24  imposed under section 295.52; 
 44.25     (2) amounts added to reserves, if total reserves do not 
 44.26  exceed up to 200 percent of the statutory net worth requirement, 
 44.27  the calculation of which may be determined on a consolidated 
 44.28  basis, taking into account the amounts held in reserve by 
 44.29  affiliated staff model health plan companies; 
 44.30     (3) assessments for the comprehensive health insurance plan 
 44.31  under section 62E.11; and 
 44.32     (4) amounts spent for administration as reported as total 
 44.33  administration to the department of health in the statement of 
 44.34  revenues, expenses, and net worth pursuant to section 62D.08, 
 44.35  subdivision 3, clause (a). 
 44.36     Sec. 7.  Minnesota Statutes 1994, section 295.53, 
 45.1   subdivision 5, is amended to read: 
 45.2      Subd. 5.  [DEDUCTIONS EXEMPTIONS FOR PHARMACIES.] (a) 
 45.3   Pharmacies may deduct exclude from their gross revenues subject 
 45.4   to tax payments for medical supplies, appliances, and devices 
 45.5   that are exempt under subdivision 1, except payments under 
 45.6   subdivision 1, clauses (3), (6), (9), (11), and (14) (1), (2), 
 45.7   (4), (5), (7), (8), and (13). 
 45.8      (b) Resident pharmacies may deduct exclude from their gross 
 45.9   revenues subject to tax payments received for medical supplies, 
 45.10  appliances, and equipment delivered outside of Minnesota. 
 45.11     Sec. 8.  Minnesota Statutes 1994, section 295.54, 
 45.12  subdivision 1, is amended to read: 
 45.13     Subdivision 1.  [TAXES PAID TO ANOTHER STATE JURISDICTION.] 
 45.14  A resident hospital, resident surgical center, pharmacy, or 
 45.15  resident health care provider who is liable for taxes payable to 
 45.16  another state or province or territory of Canada jurisdiction 
 45.17  that are imposed on patient services and measured by 
 45.18  gross receipts revenues and is subject to tax under section 
 45.19  295.52 is entitled to a credit for the tax paid to another state 
 45.20  or province or territory of Canada jurisdiction to the extent of 
 45.21  the lesser of (1) the tax actually paid to the other state or 
 45.22  province or territory of Canada jurisdiction, or (2) the amount 
 45.23  of tax imposed by Minnesota on the gross receipts revenues 
 45.24  subject to tax in the other taxing jurisdictions. 
 45.25     Sec. 9.  Minnesota Statutes 1994, section 295.55, is 
 45.26  amended by adding a subdivision to read: 
 45.27     Subd. 7.  [EXTENSIONS FOR FILING RETURNS.] If good cause 
 45.28  exists, the commissioner may extend the time for filing 
 45.29  MinnesotaCare tax returns for not more than 60 days. 
 45.30     Sec. 10.  Minnesota Statutes 1994, section 295.57, is 
 45.31  amended to read: 
 45.32     295.57 [COLLECTION AND ENFORCEMENT; REFUNDS; RULEMAKING; 
 45.33  APPLICATION OF OTHER CHAPTERS; INTEREST ON OVERPAYMENTS.] 
 45.34     Subdivision 1.  [APPLICATION OF OTHER CHAPTERS.] Unless 
 45.35  specifically provided otherwise by sections 295.50 to 295.58, 
 45.36  the enforcement, interest, and penalty provisions under chapter 
 46.1   294, appeal provisions in sections 289A.43 and 289A.65, criminal 
 46.2   penalties in section 289A.63, and refunds provisions in section 
 46.3   289A.50, and collection and rulemaking provisions under chapter 
 46.4   270, apply to a liability for the taxes imposed under sections 
 46.5   295.50 to 295.58. 
 46.6      Subd. 2.  [INTEREST ON OVERPAYMENTS.] Interest must be paid 
 46.7   on an overpayment refunded or credited to the taxpayer from the 
 46.8   date of payment of the tax until the date the refund is paid or 
 46.9   credited.  For purposes of this subdivision, the date of payment 
 46.10  is the due date of the return or the date of actual payment of 
 46.11  the tax, whichever is later. 
 46.12     Sec. 11.  [EFFECTIVE DATES.] 
 46.13     Sections 1, 3, 4, and 7 are effective the day following 
 46.14  final enactment.  
 46.15     Sections 2, 5, 6, and 8 are effective for tax periods 
 46.16  beginning on or after January 1, 1996. 
 46.17     Section 9 is effective for returns due on or after January 
 46.18  1, 1996. 
 46.19     Section 10 is retroactively effective from January 1, 1994. 
 46.20                             ARTICLE 5 
 46.21                           MISCELLANEOUS 
 46.22     Section 1.  Minnesota Statutes 1994, section 270.69, 
 46.23  subdivision 10, is amended to read: 
 46.24     Subd. 10.  [LIMITATION FOR HOMESTEAD PROPERTY.] A lien 
 46.25  imposed under this section upon property defined as homestead 
 46.26  property in chapter 510 sections 510.01 and 510.02 may not be 
 46.27  enforced against homestead property by levy under section 
 46.28  270.70, or by judgment lien foreclosure under chapter 550, but 
 46.29  notwithstanding section 510.07, is enforceable against the 
 46.30  proceeds from the sale, conveyance, or transfer of the homestead.
 46.31     Sec. 2.  Minnesota Statutes 1994, section 270B.14, 
 46.32  subdivision 11, is amended to read: 
 46.33     Subd. 11.  [DISCLOSURE TO COMMISSIONER OF HEALTH.] (a) On 
 46.34  the request of the commissioner of health, the commissioner may 
 46.35  disclose return information to the extent provided in paragraph 
 46.36  (b) and for the purposes provided in paragraph (c). 
 47.1      (b) Data that may be disclosed are limited to the 
 47.2   taxpayer's identity, as defined in section 270B.01, subdivision 
 47.3   5. 
 47.4      (c) The commissioner of health may request data only for 
 47.5   the purposes of carrying out epidemiologic investigations, which 
 47.6   includes conducting occupational health and safety surveillance, 
 47.7   and locating and notifying individuals exposed to health hazards 
 47.8   as a result of employment.  Requests for data by the 
 47.9   commissioner of health must be in writing and state the purpose 
 47.10  of the request.  Data received may be used only for the purposes 
 47.11  of section 144.0525. 
 47.12     (d) The commissioner may disclose health care service 
 47.13  revenue data to the commissioner of health as provided by 
 47.14  section 62J.41, subdivision 2. 
 47.15     Sec. 3.  Minnesota Statutes 1994, section 289A.50, 
 47.16  subdivision 1, is amended to read: 
 47.17     Subdivision 1.  [GENERAL RIGHT TO REFUND.] (a) Subject to 
 47.18  the requirements of this section and section 289A.40, a taxpayer 
 47.19  who has paid a tax in excess of the taxes lawfully due and who 
 47.20  files a written claim for refund will be refunded or credited 
 47.21  the overpayment of the tax determined by the commissioner to be 
 47.22  erroneously paid.  
 47.23     (b) The claim must specify the name of the taxpayer, the 
 47.24  date when and the period for which the tax was paid, the kind of 
 47.25  tax paid, the amount of the tax that the taxpayer claims was 
 47.26  erroneously paid, the grounds on which a refund is claimed, and 
 47.27  other information relative to the payment and in the form 
 47.28  required by the commissioner.  An income tax, estate tax, or 
 47.29  corporate franchise tax return, or amended return claiming an 
 47.30  overpayment constitutes a claim for refund.  
 47.31     (c) When, in the course of an examination, and within the 
 47.32  time for requesting a refund, the commissioner determines that 
 47.33  there has been an overpayment of tax, the commissioner shall 
 47.34  refund or credit the overpayment to the taxpayer and no demand 
 47.35  is necessary.  If the overpayment exceeds $1, the amount of the 
 47.36  overpayment must be refunded to the taxpayer.  If the amount of 
 48.1   the overpayment is less than $1, the commissioner is not 
 48.2   required to refund.  In these situations, the commissioner does 
 48.3   not have to make written findings or serve notice by mail to the 
 48.4   taxpayer. 
 48.5      (d) If the amount allowable as a credit for withholding, 
 48.6   estimated taxes, or dependent care exceeds the tax against which 
 48.7   the credit is allowable, the amount of the excess is considered 
 48.8   an overpayment.  The refund allowed by section 290.06, 
 48.9   subdivision 23, is also considered an overpayment.  The 
 48.10  requirements of section 270.10, subdivision 1, do not apply to 
 48.11  the refunding of such an overpayment shown on the original 
 48.12  return filed by a taxpayer. 
 48.13     (e) If the entertainment tax withheld at the source exceeds 
 48.14  by $1 or more the taxes, penalties, and interest reported in the 
 48.15  return of the entertainment entity or imposed by section 
 48.16  290.9201, the excess must be refunded to the entertainment 
 48.17  entity.  If the excess is less than $1, the commissioner need 
 48.18  not refund that amount. 
 48.19     (f) If the surety deposit required for a construction 
 48.20  contract exceeds the liability of the out-of-state contractor, 
 48.21  the commissioner shall refund the difference to the contractor. 
 48.22     (g) An action of the commissioner in refunding the amount 
 48.23  of the overpayment does not constitute a determination of the 
 48.24  correctness of the return of the taxpayer.  
 48.25     (h) There is appropriated from the general fund to the 
 48.26  commissioner of revenue the amount necessary to pay refunds 
 48.27  allowed under this section. 
 48.28     Sec. 4.  Minnesota Statutes 1994, section 296.01, 
 48.29  subdivision 34, is amended to read: 
 48.30     Subd. 34.  [SPECIAL FUEL.] "Special fuel" means (1) all 
 48.31  combustible gases and liquid petroleum products or substitutes 
 48.32  therefor including clear undyed diesel fuel, except gasoline, 
 48.33  which are delivered into the supply tank of a licensed motor 
 48.34  vehicle or into storage tanks maintained by an owner or operator 
 48.35  of a licensed motor vehicle as a source of supply for such 
 48.36  vehicle; (2) all combustible gases and liquid petroleum products 
 49.1   or substitutes therefor, except gasoline, when delivered to a 
 49.2   licensed special fuel dealer or to the retail service station 
 49.3   storage of a distributor who has elected to pay the special fuel 
 49.4   excise tax as provided in section 296.12, subdivision 3; (3) all 
 49.5   combustible gases and liquid petroleum products or substitutes 
 49.6   therefor, except gasoline, which are used as aviation fuel; or 
 49.7   (4) dyed fuel that is being used illegally in a licensed motor 
 49.8   vehicle.  
 49.9      Sec. 5.  Minnesota Statutes 1994, section 296.025, 
 49.10  subdivision 1, is amended to read: 
 49.11     Subdivision 1.  [TAX IMPOSED.] There is hereby imposed an 
 49.12  excise tax of the same rate per gallon as the gasoline excise 
 49.13  tax on all special fuel.  For clear undyed diesel fuel, the tax 
 49.14  is imposed on the first distributor who received the product in 
 49.15  Minnesota.  For dyed fuel being used illegally in a licensed 
 49.16  motor vehicle, the tax is imposed on the owner or operator of 
 49.17  the motor vehicle, or in some instances, on the dealer who 
 49.18  supplied the fuel.  For dyed fuel used in a motor vehicle but 
 49.19  subject to a federal exemption, although no federal tax may be 
 49.20  imposed, the fuel is subject to the state tax.  For other fuels, 
 49.21  including jet fuel, propane, and compressed natural gas, the tax 
 49.22  is imposed on the distributor, special fuel dealer, or bulk 
 49.23  purchaser.  This tax is payable at the time and in the manner 
 49.24  specified in this chapter.  For purposes of this section, "owner 
 49.25  or operator" means the operation of licensed motor vehicles, 
 49.26  whether loaded or empty, whether for compensation or not for 
 49.27  compensation, and whether owned by or leased to the motor 
 49.28  carrier who operates them or causes them to be operated. 
 49.29     Sec. 6.  Minnesota Statutes 1994, section 296.12, 
 49.30  subdivision 3, is amended to read: 
 49.31     Subd. 3.  [TAX COLLECTION, REPORTING AND PAYMENT.] (a) 
 49.32  For clear undyed diesel fuel, the tax is imposed on the 
 49.33  distributor who receives the fuel. 
 49.34     (b) For all other special fuels, the tax is imposed on the 
 49.35  distributor, bulk purchaser, or special fuel dealer.  The tax 
 49.36  may be paid upon receipt or sale as follows:  
 50.1      (1) Distributors and special fuel dealers may, subject to 
 50.2   the approval of the commissioner, elect to pay to the 
 50.3   commissioner the special fuel excise tax on all special fuel 
 50.4   delivered or sold into the supply tank of an aircraft or a 
 50.5   licensed motor vehicle.  Under this option an invoice must be 
 50.6   issued at the time of each delivery showing the name and address 
 50.7   of the purchaser, date of sale, number of gallons, price per 
 50.8   gallon and total amount of sale.  A separate sales ticket book 
 50.9   shall be maintained for special fuel sales; and 
 50.10     (2) Bulk purchasers shall report and pay the excise tax on 
 50.11  all special fuel purchased by them for storage, to the 
 50.12  commissioner. 
 50.13     (c) Any person delivering special fuel on which the excise 
 50.14  tax has not previously been paid, into the supply tank of an 
 50.15  aircraft or a licensed motor vehicle shall report such delivery 
 50.16  and pay the excise tax on the special fuel so delivered, to the 
 50.17  commissioner. 
 50.18     Sec. 7.  Minnesota Statutes 1994, section 296.12, 
 50.19  subdivision 4, is amended to read: 
 50.20     Subd. 4.  [MONTHLY REPORTS; SHRINKAGE ALLOWANCE.] On or 
 50.21  before the 23rd day of each month, the persons subject to the 
 50.22  provisions of this section shall file in the office of the 
 50.23  commissioner at St. Paul, Minnesota, a report in the following 
 50.24  manner: 
 50.25     (1) Distributors of clear undyed diesel fuel must file a 
 50.26  monthly tax return with the department listing all purchases or 
 50.27  receipts of clear undyed diesel fuel.  Distributors may be 
 50.28  allowed to take a credit or credits under section 296.14, 
 50.29  subdivision 2.  
 50.30     (2) Distributors and dealers of special fuel other than 
 50.31  clear undyed diesel fuel shall report the total number of 
 50.32  gallons delivered to them during the preceding calendar month 
 50.33  and shall pay the special fuel excise tax due thereon to the 
 50.34  commissioner. The invoice must show the true and correct name 
 50.35  and address of the purchaser, and the purchaser's signature.  
 50.36  The report shall contain such other information as the 
 51.1   commissioner may require.  
 51.2      (3) Distributors and dealers of special fuel other than 
 51.3   clear undyed diesel fuel who have elected to pay the special 
 51.4   fuel excise tax on all special fuel delivered into the supply 
 51.5   tank of an aircraft or licensed motor vehicle as provided in 
 51.6   subdivision 3, shall report the total number of gallons 
 51.7   delivered into the supply tank of an aircraft or licensed motor 
 51.8   vehicle during the preceding calendar month and shall pay the 
 51.9   special fuel excise tax due thereon to the commissioner.  
 51.10     (4) Bulk purchasers shall report and pay the special fuel 
 51.11  excise tax on all special fuel except clear undyed diesel fuel 
 51.12  purchased by them for storage, during the preceding calendar 
 51.13  month.  In such cases as the commissioner may permit, credit for 
 51.14  the excise tax due or previously paid on special fuel not used 
 51.15  in aircraft or licensed motor vehicles, may be allowed in 
 51.16  computing tax liability.  The report shall contain such other 
 51.17  information as the commissioner may require. 
 51.18     (5) In computing the special fuel excise tax due, a 
 51.19  deduction of one percent of the quantity of special fuel on 
 51.20  which tax is due shall be made for evaporation and loss.  
 51.21     (6) Each report shall contain a confession of judgment for 
 51.22  the amount of the tax shown due thereon to the extent not timely 
 51.23  paid. 
 51.24     Sec. 8.  [EFFECTIVE DATE.] 
 51.25     Section 1 is effective for sales, conveyances, or transfers 
 51.26  on or after the day following final enactment. 
 51.27     Sections 2 to 7 are effective the day following final 
 51.28  enactment.