as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; providing property tax reform; 1.3 providing for a state takeover of K-12 education 1.4 costs; setting state property tax rates; providing 1.5 that school operating referenda will be levied as an 1.6 income tax surtax; modifying class rates for local 1.7 property taxation; reforming the property tax 1.8 treatment of low-income housing; expanding the 1.9 property tax refund program; providing the 1.10 truth-in-budgeting program; modifying state property 1.11 tax aid programs; imposing and changing civil 1.12 penalties; appropriating money; amending Minnesota 1.13 Statutes 1996, sections 122.247, subdivision 3; 1.14 122.45, subdivision 3a; 122.531, subdivisions 4a and 1.15 9; 122.533; 122.535, subdivision 6; 124.239, 1.16 subdivision 5; 124.2601, subdivisions 2 and 3; 1.17 124.2711, subdivisions 1 and 5; 124.2713, subdivision 1.18 1; 124.2714; 124.2715, subdivision 1; 124.2716, 1.19 subdivision 2; 124.2725, subdivisions 2, 6, 13, and 1.20 14; 124.2726, subdivisions 1 and 3; 124.2727, 1.21 subdivision 6a; 124.312, subdivision 5; 124.313; 1.22 124.3201, subdivision 1; 124.4945; 124.574, 1.23 subdivision 2c; 124.83, subdivision 3; 124.91, 1.24 subdivisions 1, 2, 5, and 7; 124.912, subdivisions 1, 1.25 3, 6, and 7; 124.914, subdivisions 1, 2, 3, and 4; 1.26 124.916, subdivisions 1, 2, 3, and 4; 124.918, 1.27 subdivision 8, and by adding a subdivision; 124A.22, 1.28 subdivision 1; 124A.292, subdivision 2; 271.01, 1.29 subdivision 5; 273.11, subdivision 1a; 273.121; 1.30 273.124, subdivisions 13, 14, and by adding a 1.31 subdivision; 273.13, subdivisions 1, 21b, 22, 23, 24, 1.32 25, and by adding subdivisions; 273.135, subdivision 1.33 2; 273.1391, subdivision 2; 273.1398, subdivision 6; 1.34 274.01; 274.13, by adding subdivisions; 275.065, 1.35 subdivisions 3, 5a, 6, and by adding a subdivision; 1.36 275.08, subdivision 1b; 276.04, subdivision 2; 1.37 276A.01, subdivisions 4, 5, and 16; 276A.04; 276A.05, 1.38 subdivisions 1 and 5; 276A.06, subdivisions 2, 3, 5, 1.39 and 7; 290.06, by adding a subdivision; 290A.03, 1.40 subdivisions 6, 11, and 13; 290A.04, subdivisions 1, 1.41 2, 2h, and 6; 290A.07, subdivision 1; 290A.19; 298.24, 1.42 subdivision 1; 298.28, subdivisions 2, 3, 4, 5, and by 1.43 adding subdivisions; 473F.02, subdivisions 4, 5, and 1.44 24; 473F.06; 473F.07, subdivisions 1 and 5; 473F.08, 1.45 subdivisions 2, 3, 5, and 6; 477A.011, subdivisions 1.46 20, 35, 37, and by adding subdivisions; 477A.013, 2.1 subdivisions 1, 8, and 9; and 477A.03, subdivision 2; 2.2 proposing coding for new law in Minnesota Statutes, 2.3 chapters 124A; 273; 290; 462A; and 477A; repealing 2.4 Minnesota Statutes 1996, sections 124.2134; 124.225, 2.5 subdivisions 1, 3a, 7a, 7b, 7d, 7e, 7f, 8a, 8k, 8l, 2.6 8m, 9, 10, 13, 14, 15, 16, and 17; 124.226; 124.2442; 2.7 124.2601, subdivisions 4, 5, and 6; 124.2711, 2.8 subdivisions 2a and 3; 124.2713, subdivisions 6, 6a, 2.9 6b, and 7; 124.2715, subdivisions 2 and 3; 124.2716, 2.10 subdivisions 3 and 4; 124.2725, subdivisions 3, 4, 5, 2.11 and 7; 124.2727, subdivisions 6b, 6c, and 9; 124.314, 2.12 subdivision 2; 124.321; 124.91, subdivision 4; 2.13 124.912, subdivision 2; 124A.029; 124A.03, 2.14 subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, 1i, 2, 2a, 2.15 2b, 3b, and 3c; 124A.0311; 124A.22, subdivisions 4a, 2.16 4b, 8a, 8b, 13d, and 13e; 124A.23, subdivisions 1, 2, 2.17 3, and 4; 124A.26, subdivisions 2 and 3; 124A.292, 2.18 subdivisions 3 and 4; 124A.697; 124A.698; 124A.70, 2.19 subdivisions 1, 2, 3a, and 5; 124A.71; 124A.711; 2.20 124A.72; 124A.73; 270B.12, subdivision 11; 273.13, 2.21 subdivisions 21a, 31, and 32; 273.1315; 273.1317; 2.22 273.1318; 273.1398, subdivisions 2, 2c, 2d, 3, and 3a; 2.23 273.1399; 273.166; 275.02; 275.08, subdivisions 1c and 2.24 1d; 275.61; 276.012; 276A.06, subdivision 9; 290A.03, 2.25 subdivisions 12a and 14; 290A.04, subdivision 2h; 2.26 290A.055; 290A.07, subdivisions 2a and 3; 290A.26; and 2.27 473F.08, subdivision 8a; Laws 1992, chapter 499, 2.28 article 7, section 31; and Laws 1995, chapter 264, 2.29 article 4, as amended. 2.30 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.31 ARTICLE 1 2.32 PROPERTY TAX CLASSIFICATION AND RATES 2.33 Section 1. Minnesota Statutes 1996, section 273.121, is 2.34 amended to read: 2.35 273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 2.36 Any county assessor or city assessor having the powers of a 2.37 county assessor, valuing or classifying taxable real property 2.38 shall in each year notify those persons whose property is to be 2.39 assessed or reclassified that year if the person's address is 2.40 known to the assessor, otherwise the occupant of the property. 2.41 The notice shall be in writing and shall be sent by ordinary 2.42 mail at least ten days before the meeting of the local board of 2.43 review or equalization. It shall contain: (1) the market 2.44 value, (2) the limited market value under section 273.11, 2.45 subdivision 1a, (3) the qualifying amount of any improvements 2.46 under section 273.11, subdivision 16, (4) the market value 2.47 subject to taxation after subtracting the amount of any 2.48 qualifying improvements, (5) a note that the property's tax will 2.49 be based upon the equalized market value, which has not yet been 2.50 determined but which is directly computed from the market value 3.1 subject to taxation, (6) the new classification,(6)(7) a note 3.2 that if the property is homestead and at least 35 years old, 3.3 improvements made to the property may be eligible for a 3.4 valuation exclusion under section 273.11, subdivision 16,(7)(8) 3.5 the assessor's office address, and(8)(9) the dates, places, 3.6 and times set for the meetings of the local board of review or 3.7 equalization and the county board of equalization. If the 3.8 assessment roll is not complete, the notice shall be sent by 3.9 ordinary mail at least ten days prior to the date on which the 3.10 board of review has adjourned. The assessor shall attach to the 3.11 assessment roll a statement that the notices required by this 3.12 section have been mailed. Any assessor who is not provided 3.13 sufficient funds from the assessor's governing body to provide 3.14 such notices, may make application to the commissioner of 3.15 revenue to finance such notices. The commissioner of revenue 3.16 shall conduct an investigation and, if satisfied that the 3.17 assessor does not have the necessary funds, issue a 3.18 certification to the commissioner of finance of the amount 3.19 necessary to provide such notices. The commissioner of finance 3.20 shall issue a warrant for such amount and shall deduct such 3.21 amount from any state payment to such county or municipality. 3.22 The necessary funds to make such payments are hereby 3.23 appropriated. Failure to receive the notice shall in no way 3.24 affect the validity of the assessment, the resulting tax, the 3.25 procedures of any board of review or equalization, or the 3.26 enforcement of delinquent taxes by statutory means. 3.27 Sec. 2. Minnesota Statutes 1996, section 273.124, 3.28 subdivision 14, is amended to read: 3.29 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 3.30 (a) Real estate of less than ten acres that is the homestead of 3.31 its ownermust be classified as class 2aqualifies for treatment 3.32 as an agricultural homestead under section 273.13,subdivision3.3323, paragraph (a),if: 3.34 (1) the parcel on which the house is located is contiguous 3.35 on at least two sides to (i) agricultural land, (ii) land owned 3.36 or administered by the United States Fish and Wildlife Service, 4.1 or (iii) land administered by the department of natural 4.2 resources on which in lieu taxes are paid under sections 477A.11 4.3 to 477A.14; 4.4 (2) its owner also owns a noncontiguous parcel of 4.5 agricultural land that is at least 20 acres; 4.6 (3) the noncontiguous land is located not farther than two 4.7 townships or cities, or a combination of townships or cities 4.8 from the homestead; and 4.9 (4) the agricultural use value of the noncontiguous land 4.10 and farm buildings is equal to at least 50 percent of the market 4.11 value of the house, garage, and one acre of land. 4.12 Homesteads initiallyclassified as class 2aqualifying 4.13 under the provisions of this subdivision shall remainclassified4.14as class 2aqualified, irrespective of subsequent changes in the 4.15 use of adjoining properties, as long as the homestead remains 4.16 under the same ownership, the owner owns a noncontiguous parcel 4.17 of agricultural land that is at least 20 acres, and the 4.18 agricultural use value qualifies under clause (4). 4.19 (b) Noncontiguous land shall be included as part ofaan 4.20 agricultural homesteadunder section 273.13, subdivision 23,4.21paragraph (a), only if thehomestead is classified as class 2a4.22and thedetached land is located in the same township or city, 4.23 or not farther than two townships or cities or combination 4.24 thereof from the remainder of the homestead. 4.25 (c) Agricultural land used for purposes of a homestead and 4.26 actively farmed by a person holding a vested remainder interest 4.27 in it must be classified as a homesteadunder section 273.13,4.28subdivision 23, paragraph (a). If agricultural landis4.29classified class 2aqualifies for homestead treatment, any other 4.30 dwellings on the land usedfor purposes of a homesteadas a 4.31 residence by persons holding vested remainder interests who are 4.32 actively engaged in farming the property, and up to one acre of 4.33 the land surrounding eachhomesteaddwelling and reasonably 4.34 necessary for the use of the dwelling as a home, must alsobe4.35assessed class 2aqualify for homestead treatment. 4.36 Sec. 3. Minnesota Statutes 1996, section 273.124, is 5.1 amended by adding a subdivision to read: 5.2 Subd. 19. [LEASE-PURCHASE PROGRAM.] Qualifying buildings 5.3 and appurtenances, together with the land on which they are 5.4 located, are classified as homesteads, if the following 5.5 qualifications are met: 5.6 (1) the property is leased for up to a five-year period by 5.7 the occupant under a lease-purchase program administered by the 5.8 Minnesota housing finance agency or a housing and redevelopment 5.9 authority under sections 469.001 to 469.047; 5.10 (2) the occupant's income is no greater than 80 percent of 5.11 the county or area median income, adjusted for family size; 5.12 (3) the building consists of one or two dwelling units; 5.13 (4) the lease agreement provides that part of the lease 5.14 payment is escrowed as a nonrefundable down payment on the 5.15 housing; 5.16 (5) the administering agency verifies the occupant's income 5.17 eligibility and certifies to the county assessor that the 5.18 occupant meets the income standards; and 5.19 (6) the property owner applies to the county assessor by 5.20 May 30 of each year. 5.21 For purposes of this subdivision, "qualifying buildings and 5.22 appurtenances" means a one- or two-unit residential building 5.23 which was unoccupied, abandoned, and boarded for at least six 5.24 months. 5.25 Sec. 4. [273.126] [QUALIFYING LOW-INCOME RENTAL HOUSING.] 5.26 Subdivision 1. [QUALIFYING RULES.] The market value of a 5.27 rental housing unit qualifies for assessment under subclass 4x 5.28 if: 5.29 (1) it is occupied by individuals meeting the income limits 5.30 under subdivision 2; 5.31 (2) a rent restriction agreement under subdivision 3 5.32 applies; 5.33 (3) the unit meets the minimum housing quality standards 5.34 under subdivision 4; and 5.35 (4) the Minnesota housing finance agency certifies to the 5.36 local assessor that the unit qualifies. 6.1 Subd. 2. [INCOME LIMITS.] (a) In order to qualify under 6.2 subclass 4x, a unit must be occupied by an individual or 6.3 individuals whose income is at or below 60 percent of the median 6.4 area gross income. If the resident's income met the requirement 6.5 when the resident first occupied the unit, the income of the 6.6 resident continues to qualify. 6.7 (b) For purposes of this section, "median area gross income" 6.8 means the greater of (1) the median gross income for the area 6.9 determined under section 42 of the Internal Revenue Code of 6.10 1986, as amended through December 31, 1995, or (2) the median 6.11 gross income for the state. The median gross income must be 6.12 adjusted for family size. 6.13 (c) The owner or manager of the property may comply with 6.14 this subdivision by obtaining written statements from the 6.15 residents, at least annually, that their incomes are at or below 6.16 the limit. 6.17 Subd. 3. [RENT RESTRICTIONS.] (a) In order to qualify 6.18 under subclass 4x, a unit must be subject to a rent restriction 6.19 agreement with the housing finance agency for a period of at 6.20 least five years. The agreement must be in effect and apply to 6.21 the rents to be charged for the year in which the property taxes 6.22 are payable. The agreement must provide that the restrictions 6.23 apply to each year of the period, regardless of whether the unit 6.24 is occupied by an individual with qualifying income or whether 6.25 subclass 4x applies. The rent restriction agreement must 6.26 provide for rents for the unit to be no higher than 30 percent 6.27 of 60 percent of the median area gross income. The definition 6.28 of median area gross income specified in this section applies. 6.29 (b) If the owner or manager does not comply with the rent 6.30 restriction agreement, the provisions of subdivision 5 apply. 6.31 The additional taxes for purposes of subdivision 5 for a 6.32 violation are the lesser of (1) increased taxes under 6.33 subdivision 5 for any year of the period in which subclass 4x 6.34 did not apply or (2) 150 percent of the rent charged in excess 6.35 of the rent restriction agreement. 6.36 Subd. 4. [MINIMUM HOUSING STANDARDS.] In order to qualify 7.1 under subclass 4x, a unit must be certified by the housing 7.2 finance agency to meet the minimum housing standards established 7.3 under section 462A.071. 7.4 Subd. 5. [ADDITIONAL TAXES.] Notwithstanding the 7.5 provisions of section 273.01, 274.01, or any other law, if the 7.6 assessor determines that the provisions of this section have not 7.7 been met for any period during which a unit was classified under 7.8 subclass 4x, an additional tax is imposed. The additional tax 7.9 equals the tax which would have been imposed if the property had 7.10 not been classified under subclass 4x, and the tax actually 7.11 imposed, during the period of noncompliance. The additional tax 7.12 must be extended against the property on the tax list for the 7.13 current year. No interest or penalties may be levied on 7.14 additional taxes if timely paid. The tax imposed by this 7.15 subdivision is a lien upon the property assessed to the same 7.16 extent and for the same duration as other taxes imposed on the 7.17 property. 7.18 Sec. 5. Minnesota Statutes 1996, section 273.13, 7.19 subdivision 1, is amended to read: 7.20 Subdivision 1. [HOW CLASSIFIED.] All real and personal 7.21 property subject to a general property tax and not subject to 7.22 any gross earnings or otherlieuin-lieu tax is hereby 7.23 classified for purposes of taxation as provided by this section. 7.24 All of a property's taxable value must be assigned to the 7.25 classes defined in this section provided, however, that the 7.26 value may be split into more than one class. 7.27 Sec. 6. Minnesota Statutes 1996, section 273.13, is 7.28 amended by adding a subdivision to read: 7.29 Subd. 1a. [CLASS RATES; LOCAL PROPERTY TAXES.] The 7.30 following class rates apply to each class of property described 7.31 in this section in determining net tax capacity for levying 7.32 local property taxes: 7.33 Class Class rate 7.34 1 (residential) 1.0 percent 7.35 2 (agricultural) 0.5 percent 7.36 3 (commercial-industrial) 2.0 percent 8.1 4 (apartment) 1.5 percent 8.2 Sec. 7. Minnesota Statutes 1996, section 273.13, is 8.3 amended by adding a subdivision to read: 8.4 Subd. 1b. [TAX RATES; STATE PROPERTY TAX.] A state tax is 8.5 imposed on each parcel of property equal to the property's 8.6 equalized market value multiplied by the applicable rate: 8.7 Class State tax rate 8.8 1 (residential) 1.2 percent 8.9 2 (agricultural) 1.2 percent 8.10 3 (commercial-industrial) 2.4 percent 8.11 4 (apartments) 1.2 percent 8.12 All property classified as subclass 1x, 2x, 3x, or 4x is 8.13 exempt from the state property tax. 8.14 Sec. 8. Minnesota Statutes 1996, section 273.13, is 8.15 amended by adding a subdivision to read: 8.16 Subd. 1c. [TRANSITION STATE TAX RATES.] (a) The state tax 8.17 rate applying to class 4 property which does not qualify as 8.18 subclass 4a or 4x, and which does not qualify for taxation under 8.19 paragraph (c), is 1.6 percent for taxes payable in 1999 and 1.49 8.20 percent for taxes payable in 2000. 8.21 (b) The state tax rate applying to subclass 4a property is 8.22 0.8 percent for taxes payable in 1999 and one percent for taxes 8.23 payable in 2000. 8.24 (c)(1) The state tax rates under this paragraph apply for 8.25 property taxes payable in 1999 to 2002 for class 4 properties 8.26 which do not qualify as subclass 4x property, but 8.27 (i) which were classified as class 4c or class 4d for taxes 8.28 payable in 1998, or 8.29 (ii) which are constructed or substantially rehabilitated 8.30 during calendar year 1997 and would have qualified as class 4c 8.31 or class 4d for taxes payable in 1999 under section 273.13, 8.32 subdivision 25. 8.33 (2) To qualify for the state tax rates under this 8.34 paragraph, the building's owner must annually certify to the 8.35 assessor in writing that the property, building, or unit 8.36 continues to qualify under the laws in effect and applicable to 9.1 its classification for taxes payable in 1998. 9.2 (3) A property no longer qualifies under this paragraph: 9.3 (i) if it is transferred or sold; or 9.4 (ii) if loans, that have a principal amount equal to more 9.5 than 25 percent of the property's market value and that are 9.6 secured by the property, are refinanced. 9.7 (4) For the market value of properties described in this 9.8 paragraph, the following state tax rates apply: 9.9 (i) for taxes payable in 1999, a state tax rate of 0.4 9.10 percent; 9.11 (ii) for taxes payable in 2000, a state tax rate of 0.6 9.12 percent; 9.13 (iii) for taxes payable in 2001, a state tax rate of 0.8 9.14 percent; and 9.15 (iv) for taxes payable in 2002, a state tax rate of one 9.16 percent. 9.17 Sec. 9. Minnesota Statutes 1996, section 273.13, 9.18 subdivision 21b, is amended to read: 9.19 Subd. 21b. [EQUALIZED MARKET VALUE; NET TAX CAPACITY.] (a) 9.20Gross tax capacity means the product of the appropriate gross9.21class rates in this section and market values.Equalized market 9.22 value means a property's value determined under section 273.11, 9.23 divided by the most recent assessment/sales ratio applicable to 9.24 the property, considering both the type of property and the 9.25 location of the property, as determined under section 124.2131, 9.26 subdivision 1. 9.27 (b) Net tax capacity means the product of the appropriate 9.28 net class rates in this section and equalized market values. 9.29 Sec. 10. Minnesota Statutes 1996, section 273.13, 9.30 subdivision 22, is amended to read: 9.31 Subd. 22. [CLASS 1.] (a)Except as provided in subdivision9.3223,Class 1 property consists of real estate which is (1) used 9.33 for residentialand used for homesteadpurposesis class 1. The9.34market value of class 1a property must be determined based upon9.35the value of the house, garage, and land., including residential 9.36 structures on agricultural property, or (2) devoted to temporary 10.1 and seasonal residential occupancy for recreation purposes. 10.2 (b) A residential property qualifies for class 1 only if it 10.3 contains no more than three housing units. 10.4 (c) Seasonal recreational property qualifies for class 1 10.5 only if it is not used for commercial purposes for more than 250 10.6 days in the year preceding the year of assessment. For purposes 10.7 of this paragraph, property is devoted to a commercial purpose 10.8 on a specific day if any portion of the property is used for 10.9 residential occupancy, and a fee is charged for residential 10.10 occupancy. 10.11 (d) Class 1 includes commercial use real property used 10.12 exclusively for recreational purposes in conjunction with class 10.13 1 property devoted to temporary and seasonal residential 10.14 occupancy for recreational purposes, up to a total of two acres, 10.15 provided the property is not devoted to commercial recreational 10.16 use for more than 250 days in the year preceding the year of 10.17 assessment and is located within two miles of the class 1 10.18 property with which it is used. Owners of real property devoted 10.19 to temporary and seasonal residential occupancy for recreational 10.20 purposes and all or a portion of which was devoted to commercial 10.21 purposes for not more than 250 days in the year preceding the 10.22 year of assessment desiring classification as class 1, must 10.23 submit a declaration to the assessor designating the cabins or 10.24 units occupied for 250 days or less in the year preceding the 10.25 year of assessment by January 15 of the assessment year. Those 10.26 cabins or units and a proportionate share of the land on which 10.27 they are located will be designated class 1 as otherwise 10.28 provided. The remainder of the cabins or units and a 10.29 proportionate share of the land on which they are located will 10.30 be designated as class 3. The owner of property desiring 10.31 designation as class 1 property must provide guest registers or 10.32 other records demonstrating that the units for which class 1 10.33 designation is sought were not occupied for more than 250 days 10.34 in the year preceding the assessment if so requested. The 10.35 portion of a property operated as a (1) restaurant, (2) bar, (3) 10.36 gift shop, and (4) other nonresidential facility operated on a 11.1 commercial basis not directly related to temporary and seasonal 11.2 residential occupancy for recreational purposes shall not 11.3 qualify for class 1. 11.4The first $72,000 of market value of class 1a property has11.5a net class rate of one percent of its market value and a gross11.6class rate of 2.17 percent of its market value. For taxes11.7payable in 1992, the market value of class 1a property that11.8exceeds $72,000 but does not exceed $115,000 has a class rate of11.9two percent of its market value; and the market value of class11.101a property that exceeds $115,000 has a class rate of 2.511.11percent of its market value. For taxes payable in 1993 and11.12thereafter, the market value of class 1a property that exceeds11.13$72,000 has a class rate of two percent.11.14(b) Class 1b property includes homestead real estate or11.15homestead manufactured homes used for the purposes of a11.16homestead by11.17(1) any blind person, or the blind person and the blind11.18person's spouse; or11.19(2) any person, hereinafter referred to as "veteran," who:11.20(i) served in the active military or naval service of the11.21United States; and11.22(ii) is entitled to compensation under the laws and11.23regulations of the United States for permanent and total11.24service-connected disability due to the loss, or loss of use, by11.25reason of amputation, ankylosis, progressive muscular11.26dystrophies, or paralysis, of both lower extremities, such as to11.27preclude motion without the aid of braces, crutches, canes, or a11.28wheelchair; and11.29(iii) has acquired a special housing unit with special11.30fixtures or movable facilities made necessary by the nature of11.31the veteran's disability, or the surviving spouse of the11.32deceased veteran for as long as the surviving spouse retains the11.33special housing unit as a homestead; or11.34(3) any person who:11.35(i) is permanently and totally disabled and11.36(ii) receives 90 percent or more of total income from12.1(A) aid from any state as a result of that disability; or12.2(B) supplemental security income for the disabled; or12.3(C) workers' compensation based on a finding of total and12.4permanent disability; or12.5(D) social security disability, including the amount of a12.6disability insurance benefit which is converted to an old age12.7insurance benefit and any subsequent cost of living increases;12.8or12.9(E) aid under the federal Railroad Retirement Act of 1937,12.10United States Code Annotated, title 45, section 228b(a)5; or12.11(F) a pension from any local government retirement fund12.12located in the state of Minnesota as a result of that12.13disability; or12.14(G) pension, annuity, or other income paid as a result of12.15that disability from a private pension or disability plan,12.16including employer, employee, union, and insurance plans and12.17(iii) has household income as defined in section 290A.03,12.18subdivision 5, of $50,000 or less; or12.19(4) any person who is permanently and totally disabled and12.20whose household income as defined in section 290A.03,12.21subdivision 5, is 150 percent or less of the federal poverty12.22level.12.23Property is classified and assessed under clause (4) only12.24if the government agency or income-providing source certifies,12.25upon the request of the homestead occupant, that the homestead12.26occupant satisfies the disability requirements of this paragraph.12.27Property is classified and assessed pursuant to clause (1)12.28only if the commissioner of economic security certifies to the12.29assessor that the homestead occupant satisfies the requirements12.30of this paragraph.12.31Permanently and totally disabled for the purpose of this12.32subdivision means a condition which is permanent in nature and12.33totally incapacitates the person from working at an occupation12.34which brings the person an income. The first $32,000 market12.35value of class 1b property has a net class rate of .45 percent12.36of its market value and a gross class rate of .87 percent of its13.1market value. The remaining market value of class 1b property13.2has a gross or net class rate using the rates for class 1 or13.3class 2a property, whichever is appropriate, of similar market13.4value.13.5(c) Class 1c property is(e) Class 1 includes commercial 13.6 use real property that abuts a lakeshore line and is devoted to 13.7 temporary and seasonal residential occupancy for recreational 13.8 purposesbut not devoted to commercial purposes for more than13.9250 days in the year preceding the year of assessment, and that 13.10 includes a portion used as a homestead by the owner, which 13.11 includes a dwelling occupied as a homestead by a shareholder of 13.12 a corporation that owns the resort or a partner in a partnership 13.13 that owns the resort, even if the title to the homestead is held 13.14 by the corporation or partnership.For purposes of this clause,13.15property is devoted to a commercial purpose on a specific day if13.16any portion of the property, excluding the portion used13.17exclusively as a homestead, is used for residential occupancy13.18and a fee is charged for residential occupancy. Class 1c13.19property has a class rate of one percent of total market value13.20for taxes payable in 1993 and thereafter with the following13.21limitation: the area of the property must not exceed 100 feet13.22of lakeshore footage for each cabin or campsite located on the13.23property up to a total of 800 feet and 500 feet in depth,13.24measured away from the lakeshore.13.25 (f) Subclass 1x consists of the first tier of market value 13.26 of each class 1 property that (1) is used for residential 13.27 purposes and qualifies as a homestead under section 273.124, (2) 13.28 is used for noncommercial seasonal recreational residential 13.29 purposes, or (3) is used for homestead commercial seasonal 13.30 recreational residential purposes as defined in paragraph (e). 13.31 (g) The valuation limit for the first tier in paragraph 13.32 (f), clauses (1) and (2), is $115,000, adjusted for inflation 13.33 under subdivision 34. The valuation limit for the first tier in 13.34 paragraph (f), clause (3), is $230,000, adjusted for inflation 13.35 under subdivision 34. 13.36 Sec. 11. Minnesota Statutes 1996, section 273.13, 14.1 subdivision 23, is amended to read: 14.2 Subd. 23. [CLASS 2.] (a) Class2a2 propertyisconsists 14.3 of agricultural landincluding any improvements that is14.4homesteadedand structures used for agricultural purposes. In 14.5 the case of a property qualifying as an agricultural homestead 14.6 under section 273.124, themarket value of thehouse and garage 14.7 and immediately surrounding one acre of landhas the same class14.8rates as class 1a property under subdivision 22. The value of14.9the remaining land including improvements up to $115,000 has a14.10net class rate of .45 percent of market value and a gross class14.11rate of 1.75 percent of market value. The remaining value of14.12class 2a property over $115,000 of market value that does not14.13exceed 320 acres has a net class rate of one percent of market14.14value, and a gross class rate of 2.25 percent of market value.14.15The remaining property over the $115,000 market value in excess14.16of 320 acres has a class rate of 1.5 percent of market value,14.17and a gross class rate of 2.25 percent of market valueis class 14.18 1 property and the remainder of the homestead is class 2. 14.19 (b) Class2b2 includes property that is (1) real estate, 14.20 rural in character and used exclusively for growing trees for 14.21 timber, lumber, and wood and wood products; (2) real estate that 14.22 is not improved with a structure and is used exclusively for 14.23 growing trees for timber, lumber, and wood and wood products, if 14.24 the owner has participated or is participating in a cost-sharing 14.25 program for afforestation, reforestation, or timber stand 14.26 improvement on that particular property, administered or 14.27 coordinated by the commissioner of natural resources;(3) real14.28estate that is nonhomestead agricultural land;or(4)(3) a 14.29 landing area or public access area of a privately owned public 14.30 use airport.Class 2b property has a net class rate of 1.514.31percent of market value, and a gross class rate of 2.25 percent14.32of market value.14.33 (c) Agricultural land as used in this section means 14.34 contiguous acreage of ten acres or more, primarily used during 14.35 the preceding year for agricultural purposes. Agricultural use 14.36 may include pasture, timber, waste, unusable wild land, and land 15.1 included in state or federal farm or conservation programs. 15.2 "Agricultural purposes" as used in this section means the 15.3 raising or cultivation of agricultural products. Land enrolled 15.4 in the Reinvest in Minnesota program under sections 103F.505 to 15.5 103F.531 or the federal Conservation Reserve Program as 15.6 contained in Public Law Number 99-198, and consisting of a 15.7 minimum of ten contiguous acres, shall be classified as 15.8 agricultural. Agricultural classification for property shall be 15.9 determined with respect to the use of the whole parcel, and not 15.10 based upon the market value of any residential structures on the 15.11 parcel or contiguous parcels under the same ownership. 15.12 (d) Real estate of less than ten acres used principally for 15.13 raising or cultivating agricultural products, shall be 15.14 considered as agricultural land, if it is not used primarily for 15.15 residential purposes. 15.16 (e) The term "agricultural products" as used in this 15.17 subdivision includes: 15.18 (1) livestock, dairy animals, dairy products, poultry and 15.19 poultry products, fur-bearing animals, horticultural and nursery 15.20 stock described in sections 18.44 to 18.61, fruit of all kinds, 15.21 vegetables, forage, grains, bees, and apiary products by the 15.22 owner; 15.23 (2) fish bred for sale and consumption if the fish breeding 15.24 occurs on land zoned for agricultural use; 15.25 (3) the commercial boarding of horses if the boarding is 15.26 done in conjunction with raising or cultivating agricultural 15.27 products as defined in clause (1); 15.28 (4) property which is owned and operated by nonprofit 15.29 organizations used for equestrian activities, excluding racing; 15.30 and 15.31 (5) game birds and waterfowl bred and raised for use on a 15.32 shooting preserve licensed under section 97A.115. 15.33 (f) If a parcel used for agricultural purposes is also used 15.34 for commercial or industrial purposes, including but not limited 15.35 to: 15.36 (1) wholesale and retail sales; 16.1 (2) processing of raw agricultural products or other goods; 16.2 (3) warehousing or storage of processed goods; and 16.3 (4) office facilities for the support of the activities 16.4 enumerated in clauses (1), (2), and (3), 16.5 the assessor shall classify the part of the parcel used for 16.6 agricultural purposes as class1b, 2a, or 2b, whichever is16.7appropriate2,and the remainder in the class appropriate to its 16.8 use. The grading, sorting, and packaging of raw agricultural 16.9 products for first sale is considered an agricultural purpose. 16.10 A greenhouse or other building where horticultural or nursery 16.11 products are grown that is also used for the conduct of retail 16.12 sales must be classified as agricultural if it is primarily used 16.13 for the growing of horticultural or nursery products from seed, 16.14 cuttings, or roots and occasionally as a showroom for the retail 16.15 sale of those products. Use of a greenhouse or building only 16.16 for the display of already grown horticultural or nursery 16.17 products does not qualify as an agricultural purpose. 16.18The assessor shall determine and list separately on the16.19records the market value of the homestead dwelling and the one16.20acre of land on which that dwelling is located. If any farm16.21buildings or structures are located on this homesteaded acre of16.22land, their market value shall not be included in this separate16.23determination.16.24 (g) To qualify for classification under paragraph (b), 16.25 clause(4)(3), a privately owned public use airport must be 16.26 licensed as a public airport under section 360.018. For 16.27 purposes of paragraph (b), clause(4)(3), "landing area" means 16.28 that part of a privately owned public use airport properly 16.29 cleared, regularly maintained, and made available to the public 16.30 for use by aircraft and includes runways, taxiways, aprons, and 16.31 sites upon which are situated landing or navigational aids. A 16.32 landing area also includes land underlying both the primary 16.33 surface and the approach surfaces that comply with all of the 16.34 following: 16.35 (i) the land is properly cleared and regularly maintained 16.36 for the primary purposes of the landing, taking off, and taxiing 17.1 of aircraft; but that portion of the land that contains 17.2 facilities for servicing, repair, or maintenance of aircraft is 17.3 not included as a landing area; 17.4 (ii) the land is part of the airport property; and 17.5 (iii) the land is not used for commercial or residential 17.6 purposes. 17.7 The land contained in a landing area under paragraph (b), 17.8 clause(4)(3), must be described and certified by the 17.9 commissioner of transportation. The certification is effective 17.10 until it is modified, or until the airport or landing area no 17.11 longer meets the requirements of paragraph (b), clause(4)(3). 17.12 For purposes of paragraph (b), clause(4)(3), "public access 17.13 area" means property used as an aircraft parking ramp, apron, or 17.14 storage hangar, or an arrival and departure building in 17.15 connection with the airport. 17.16 (h) Subclass 2x consists of the first tier of class 2 17.17 market value of each homestead agricultural property. The 17.18 valuation limit for the first tier is $200,000, adjusted for 17.19 inflation under subdivision 34. 17.20 Sec. 12. Minnesota Statutes 1996, section 273.13, 17.21 subdivision 24, is amended to read: 17.22 Subd. 24. [CLASS 3.] (a) Class 3 consists of commercial 17.23 and industrial property and utility real and personal 17.24 property,except class 5 property as identified in subdivision17.2531, clause (1), is class 3a. It has a class rate of three17.26percentincluding: 17.27 (1) tools, implements, and machinery of an electric 17.28 generating, transmission, or distribution system or a pipeline 17.29 system transporting or distributing water, gas, crude oil, or 17.30 petroleum products or mains and pipes used in the distribution 17.31 of steam or hot or chilled water for heating or cooling 17.32 buildings, which are fixtures; 17.33 (2) unmined iron ore and low-grade iron-bearing formations 17.34 as defined in section 273.14; and 17.35 (3) all other property not otherwise classified. 17.36 (b) Subclass 3x consists of the first$100,000$60,000 of 18.1 each class 3 property's market valuefor taxes payable in 199318.2and thereafter, and 5.06 percent of the market value over18.3$100,000., provided that in the case of 18.4 state-assessedcommercial, industrial, and utilityproperty 18.5 owned by one person or entity, only one parcelhas a reduced18.6class rate on the first $100,000 of market value.is eligible 18.7 for inclusion in subclass 3x, and provided that in the case of 18.8 othercommercial, industrial, and utilityproperty owned by one 18.9 person or entity, only one parcel in each countyhas a reduced18.10class rate on the first $100,000 of market valueis eligible for 18.11 inclusion in subclass 3x, except that: 18.12 (1) if the market value of the parcel is less than 18.13$100,000$60,000, and additional parcels are owned by the same 18.14 person or entity in the same city or town within that 18.15 county,the reduced class rate shall be applied up toa combined 18.16 total market value of$100,000$60,000 for all parcels owned by 18.17 the same person or entity in the same city or town within the 18.18 county is eligible for subclass 3x; 18.19 (2) in the case of grain, fertilizer, and feed elevator 18.20 facilities, as defined in section 18C.305, subdivision 1, or 18.21 232.21, subdivision 8, the limitation to one parcel per owner 18.22 per countyfor the reduced class rateinclusion in subclass 3x 18.23 shall not apply, but there shall be a limit of$100,000of 18.24preferentialsubclass 3x value per site of contiguous parcels 18.25 owned by the same person or entity. Only the value of the 18.26 elevator portion of each parcel shall qualify for treatment 18.27 under this clause. For purposes of this subdivision, contiguous 18.28 parcels include parcels separated only by a railroad or public 18.29 road right-of-way; and 18.30 (3) in the case of property owned by a nonprofit charitable 18.31 organization that qualifies for tax exemption under section 18.32 501(c)(3) of the Internal Revenue Code of 1986, as amended 18.33 through December 31, 1993, if the property is used as a business 18.34 incubator, the limitation to one parcel per owner per county for 18.35the reduced class rateinclusion in subclass 3x shall not apply, 18.36 provided thatthe reduced rate appliesonly to the first 19.1$100,000$60,000 of value per parcel owned by the 19.2 organization qualifies as subclass 3x. As used in this clause, 19.3 a "business incubator" is a facility used for the development of 19.4 nonretail businesses, offering access to equipment, space, 19.5 services, and advice to the tenant businesses, for the purpose 19.6 of encouraging economic development, diversification, and job 19.7 creation in the area served by the organization. 19.8 To receivethe reduced class ratesubclass 3x 19.9 classification on additional parcels under clause (1), (2), or 19.10 (3), the taxpayer must notify the county assessor that the 19.11 taxpayer owns more than one parcel that qualifies under clause 19.12 (1), (2), or (3). 19.13(b) Employment property defined in section 469.166, during19.14the period provided in section 469.170, shall constitute class19.153b and has a class rate of 2.3 percent of the first $50,000 of19.16market value and 3.6 percent of the remainder, except that for19.17employment property located in a border city enterprise zone19.18designated pursuant to section 469.168, subdivision 4, paragraph19.19(c), the class rate of the first $100,000 of market value and19.20the class rate of the remainder is determined under paragraph19.21(a), unless the governing body of the city designated as an19.22enterprise zone determines that a specific parcel shall be19.23assessed pursuant to the first clause of this sentence. The19.24governing body may provide for assessment under the first clause19.25of the preceding sentence only for property which is located in19.26an area which has been designated by the governing body for the19.27receipt of tax reductions authorized by section 469.171,19.28subdivision 1.19.29(c) Structures which are (i) located on property classified19.30as class 3a, (ii) constructed under an initial building permit19.31issued after January 2, 1996, (iii) located in a transit zone as19.32defined under section 473.3915, subdivision 3, (iv) located19.33within the boundaries of a school district, and (v) not19.34primarily used for retail or transient lodging purposes, shall19.35have a class rate of four percent on that portion of the market19.36value in excess of $100,000 and any market value under $100,00020.1that does not qualify for the three percent class rate under20.2paragraph (a). As used in item (v), a structure is primarily20.3used for retail or transient lodging purposes if over 50 percent20.4of its square footage is used for those purposes. The four20.5percent rate shall also apply to improvements to existing20.6structures that meet the requirements of items (i) to (v) if the20.7improvements are constructed under an initial building permit20.8issued after January 2, 1996, even if the remainder of the20.9structure was constructed prior to January 2, 1996. For the20.10purposes of this paragraph, a structure shall be considered to20.11be located in a transit zone if any portion of the structure20.12lies within the zone. If any property once eligible for20.13treatment under this paragraph ceases to remain eligible due to20.14revisions in transit zone boundaries, the property shall20.15continue to receive treatment under this paragraph for a period20.16of three years.20.17 Sec. 13. Minnesota Statutes 1996, section 273.13, 20.18 subdivision 25, is amended to read: 20.19 Subd. 25. [CLASS 4.] (a) Class4a is4 consists of 20.20 residential real estate containing four or more units and used 20.21 or held for use by the owner or by the tenants or lessees of the 20.22 owner as a residence for rental periods of 30 days or more. 20.23 Class4a4 also includes all property described in paragraph 20.24 (c), and hospitals licensed under sections 144.50 to 144.56, 20.25 other than hospitals exempt under section 272.02, and contiguous 20.26 property used for hospital purposes, without regard to whether 20.27 the property has been platted or subdivided.Class 4a20.28 (b) Subclass 4a consists of property in a city with a 20.29 population of 5,000 or less, that is (1) located outside of the 20.30 metropolitan area, as defined in section 473.121, subdivision 2, 20.31 or outside any county contiguous to the metropolitan area, and 20.32 (2) whose city boundary is at least 15 miles from the boundary 20.33 of any city with a population greater than 5,000has a class20.34rate of 2.3 percent of market value for taxes payable in 199620.35and thereafter.All other class 4a property has a class rate of20.363.4 percent of market value for taxes payable in 1996 and21.1thereafter. For purposes of this paragraph, population has the21.2same meaning given in section 477A.011, subdivision 3.21.3(b) Class 4b includes:21.4(1) residential real estate containing less than four21.5units, other than seasonal residential, and recreational;21.6(2) manufactured homes not classified under any other21.7provision;21.8(3) a dwelling, garage, and surrounding one acre of21.9property on a nonhomestead farm classified under subdivision 23,21.10paragraph (b).21.11Class 4b property has a class rate of 2.8 percent of market21.12value for taxes payable in 1992, 2.5 percent of market value for21.13taxes payable in 1993, and 2.3 percent of market value for taxes21.14payable in 1994 and thereafter.21.15(c) Class 4c property includes:21.16(1) a structure that is:21.17(i) situated on real property that is used for21.18housing for the elderly or for low- and moderate-income21.19families as defined in Title II, as amended through December 31,21.201990, of the National Housing Act or the Minnesota housing21.21finance agency law of 1971, as amended, or rules promulgated by21.22the agency and financed by a direct federal loan or federally21.23insured loan made pursuant to Title II of the Act; or21.24(ii) situated on real property that is used for housing the21.25elderly or for low- and moderate-income families as defined by21.26the Minnesota housing finance agency law of 1971, as amended, or21.27rules adopted by the agency pursuant thereto and financed by a21.28loan made by the Minnesota housing finance agency pursuant to21.29the provisions of the act.21.30This clause applies only to property of a nonprofit or21.31limited dividend entity. Property is classified as class 4c21.32under this clause for 15 years from the date of the completion21.33of the original construction or substantial rehabilitation, or21.34for the original term of the loan.21.35(2) a structure that is:21.36(i) situated upon real property that is used for housing22.1lower income families or elderly or handicapped persons, as22.2defined in section 8 of the United States Housing Act of 1937,22.3as amended; and22.4(ii) owned by an entity which has entered into a housing22.5assistance payments contract under section 8 which provides22.6assistance for 100 percent of the dwelling units in the22.7structure, other than dwelling units intended for management or22.8maintenance personnel. Property is classified as class 4c under22.9this clause for the term of the housing assistance payments22.10contract, including all renewals, or for the term of its22.11permanent financing, whichever is shorter; and22.12(3) a qualified low-income building as defined in section22.1342(c)(2) of the Internal Revenue Code of 1986, as amended22.14through December 31, 1990, that (i) receives a low-income22.15housing credit under section 42 of the Internal Revenue Code of22.161986, as amended through December 31, 1990; or (ii) meets the22.17requirements of that section and receives public financing,22.18except financing provided under sections 469.174 to 469.179,22.19which contains terms restricting the rents; or (iii) meets the22.20requirements of section 273.1317. Classification pursuant to22.21this clause is limited to a term of 15 years. The public22.22financing received must be from at least one of the following22.23sources: government issued bonds exempt from taxes under22.24section 103 of the Internal Revenue Code of 1986, as amended22.25through December 31, 1993, the proceeds of which are used for22.26the acquisition or rehabilitation of the building; programs22.27under section 221(d)(3), 202, or 236, of Title II of the22.28National Housing Act; rental housing program funds under Section22.298 of the United States Housing Act of 1937 or the market rate22.30family graduated payment mortgage program funds administered by22.31the Minnesota housing finance agency that are used for the22.32acquisition or rehabilitation of the building; public financing22.33provided by a local government used for the acquisition or22.34rehabilitation of the building, including grants or loans from22.35federal community development block grants, HOME block grants,22.36or residential rental bonds issued under chapter 474A; or other23.1rental housing program funds provided by the Minnesota housing23.2finance agency for the acquisition or rehabilitation of the23.3building.23.4For all properties described in clauses (1), (2), and (3)23.5and in paragraph (d), the market value determined by the23.6assessor must be based on the normal approach to value using23.7normal unrestricted rents unless the owner of the property23.8elects to have the property assessed under Laws 1991, chapter23.9291, article 1, section 55. If the owner of the property elects23.10to have the market value determined on the basis of the actual23.11restricted rents, as provided in Laws 1991, chapter 291, article23.121, section 55, the property will be assessed at the rate23.13provided for class 4a or class 4b property, as appropriate.23.14Properties described in clauses (1)(ii), (3), and (4) may apply23.15to the assessor for valuation under Laws 1991, chapter 291,23.16article 1, section 55. The land on which these structures are23.17situated has the class rate given in paragraph (b) if the23.18structure contains fewer than four units, and the class rate23.19given in paragraph (a) if the structure contains four or more23.20units. This clause applies only to the property of a nonprofit23.21or limited dividend entity.23.22(4) a parcel of land, not to exceed one acre, and its23.23improvements or a parcel of unimproved land, not to exceed one23.24acre, if it is owned by a neighborhood real estate trust and at23.25least 60 percent of the dwelling units, if any, on all land23.26owned by the trust are leased to or occupied by lower income23.27families or individuals. This clause does not apply to any23.28portion of the land or improvements used for nonresidential23.29purposes. For purposes of this clause, a lower income family is23.30a family with an income that does not exceed 65 percent of the23.31median family income for the area, and a lower income individual23.32is an individual whose income does not exceed 65 percent of the23.33median individual income for the area, as determined by the23.34United States Secretary of Housing and Urban Development. For23.35purposes of this clause, "neighborhood real estate trust" means23.36an entity which is certified by the governing body of the24.1municipality in which it is located to have the following24.2characteristics:24.3(a) it is a nonprofit corporation organized under chapter24.4317A;24.5(b) it has as its principal purpose providing housing for24.6lower income families in a specific geographic community24.7designated in its articles or bylaws;24.8(c) it limits membership with voting rights to residents of24.9the designated community; and24.10(d) it has a board of directors consisting of at least24.11seven directors, 60 percent of whom are members with voting24.12rights and, to the extent feasible, 25 percent of whom are24.13elected by resident members of buildings owned by the trust; and24.14(5) except as provided in subdivision 22, paragraph (c),24.15real property devoted to temporary and seasonal residential24.16occupancy for recreation purposes, including real property24.17devoted to temporary and seasonal residential occupancy for24.18recreation purposes and not devoted to commercial purposes for24.19more than 250 days in the year preceding the year of24.20assessment. For purposes of this clause, property is devoted to24.21a commercial purpose on a specific day if any portion of the24.22property is used for residential occupancy, and a fee is charged24.23for residential occupancy. Class 4c also includes commercial24.24use real property used exclusively for recreational purposes in24.25conjunction with class 4c property devoted to temporary and24.26seasonal residential occupancy for recreational purposes, up to24.27a total of two acres, provided the property is not devoted to24.28commercial recreational use for more than 250 days in the year24.29preceding the year of assessment and is located within two miles24.30of the class 4c property with which it is used. Class 4c24.31property classified in this clause also includes the remainder24.32of class 1c resorts. Owners of real property devoted to24.33temporary and seasonal residential occupancy for recreation24.34purposes and all or a portion of which was devoted to commercial24.35purposes for not more than 250 days in the year preceding the24.36year of assessment desiring classification as class 1c or 4c,25.1must submit a declaration to the assessor designating the cabins25.2or units occupied for 250 days or less in the year preceding the25.3year of assessment by January 15 of the assessment year. Those25.4cabins or units and a proportionate share of the land on which25.5they are located will be designated class 1c or 4c as otherwise25.6provided. The remainder of the cabins or units and a25.7proportionate share of the land on which they are located will25.8be designated as class 3a. The first $100,000 of the market25.9value of the remainder of the cabins or units and a25.10proportionate share of the land on which they are located shall25.11have a class rate of three percent. The owner of property25.12desiring designation as class 1c or 4c property must provide25.13guest registers or other records demonstrating that the units25.14for which class 1c or 4c designation is sought were not occupied25.15for more than 250 days in the year preceding the assessment if25.16so requested. The portion of a property operated as a (1)25.17restaurant, (2) bar, (3) gift shop, and (4) other nonresidential25.18facility operated on a commercial basis not directly related to25.19temporary and seasonal residential occupancy for recreation25.20purposes shall not qualify for class 1c or 4c;25.21 (c) Subclass 4x property includes: 25.22 (1) qualifying low-income rental housing certified to the 25.23 assessor by the housing finance agency under sections 273.126 25.24 and 462A.071. Subclass 4x includes land in proportion to the 25.25 total market value of the building that is qualifying low-income 25.26 rental housing. For all properties qualifying as subclass 4x, 25.27 the market value determined by the assessor must be based in the 25.28 normal approach to value using normal unrestricted rents; 25.29(6)(2) real property up to a maximum of one acre of land 25.30 owned by a nonprofit community service oriented organization; 25.31 provided that the property is not used for a revenue-producing 25.32 activity for more than six days in the calendar year preceding 25.33 the year of assessment and the property is not used for 25.34 residential purposes on either a temporary or permanent basis. 25.35 For purposes of this clause, a "nonprofit community service 25.36 oriented organization" means any corporation, society, 26.1 association, foundation, or institution organized and operated 26.2 exclusively for charitable, religious, fraternal, civic, or 26.3 educational purposes, and which is exempt from federal income 26.4 taxation pursuant to section 501(c)(3), (10), or (19) of the 26.5 Internal Revenue Code of 1986, as amended through December 31, 26.6 1990. For purposes of this clause, "revenue-producing 26.7 activities" shall include but not be limited to property or that 26.8 portion of the property that is used as an on-sale intoxicating 26.9 liquor or 3.2 percent malt liquor establishment licensed under 26.10 chapter 340A, a restaurant open to the public, bowling alley, a 26.11 retail store, gambling conducted by organizations licensed under 26.12 chapter 349, an insurance business, or office or other space 26.13 leased or rented to a lessee who conducts a for-profit 26.14 enterprise on the premises. Any portion of the property which 26.15 is used for revenue-producing activities for more than six days 26.16 in the calendar year preceding the year of assessment shall be 26.17 assessed as class3a3. The use of the property for social 26.18 events open exclusively to members and their guests for periods 26.19 of less than 24 hours, when an admission is not charged nor any 26.20 revenues are received by the organization shall not be 26.21 considered a revenue-producing activity; 26.22(7)(3) post-secondary student housing of not more than one 26.23 acre of land that is owned by a nonprofit corporation organized 26.24 under chapter 317A and is used exclusively by a student 26.25 cooperative, sorority, or fraternity for on-campus housing or 26.26 housing located within two miles of the border of a college 26.27 campus; and 26.28(8)(4) manufactured home parks as defined in section 26.29 327.14, subdivision 3. 26.30Class 4c property has a class rate of 2.3 percent of market26.31value, except that (i) for each parcel of seasonal residential26.32recreational property not used for commercial purposes under26.33clause (5) the first $72,000 of market value on each parcel has26.34a class rate of 1.75 percent for taxes payable in 1997 and 1.526.35percent for taxes payable in 1998 and thereafter, and the market26.36value of each parcel that exceeds $72,000 has a class rate of27.12.5 percent, and (ii) manufactured home parks assessed under27.2clause (8) have a class rate of two percent for taxes payable in27.31996, and thereafter.27.4(d) Class 4d property includes:27.5(1) a structure that is:27.6(i) situated on real property that is used for housing for27.7the elderly or for low and moderate income families as defined27.8by the Farmers Home Administration;27.9(ii) located in a municipality of less than 10,00027.10population; and27.11(iii) financed by a direct loan or insured loan from the27.12Farmers Home Administration. Property is classified under this27.13clause for 15 years from the date of the completion of the27.14original construction or for the original term of the loan.27.15The class rates in paragraph (c), clauses (1), (2), and (3)27.16and this clause apply to the properties described in them, only27.17in proportion to occupancy of the structure by elderly or27.18handicapped persons or low and moderate income families as27.19defined in the applicable laws unless construction of the27.20structure had been commenced prior to January 1, 1984; or the27.21project had been approved by the governing body of the27.22municipality in which it is located prior to June 30, 1983; or27.23financing of the project had been approved by a federal or state27.24agency prior to June 30, 1983. For those properties, 4c or 4d27.25classification is available only for those units meeting the27.26requirements of section 273.1318.27.27Classification under this clause is only available to27.28property of a nonprofit or limited dividend entity.27.29In the case of a structure financed or refinanced under any27.30federal or state mortgage insurance or direct loan program27.31exclusively for housing for the elderly or for housing for the27.32handicapped, a unit shall be considered occupied so long as it27.33is actually occupied by an elderly or handicapped person or, if27.34vacant, is held for rental to an elderly or handicapped person.27.35(2) For taxes payable in 1992, 1993, and 1994, only,27.36buildings and appurtenances, together with the land upon which28.1they are located, leased by the occupant under the community28.2lending model lease-purchase mortgage loan program administered28.3by the Federal National Mortgage Association, provided the28.4occupant's income is no greater than 60 percent of the county or28.5area median income, adjusted for family size and the building28.6consists of existing single family or duplex housing. The lease28.7agreement must provide for a portion of the lease payment to be28.8escrowed as a nonrefundable down payment on the housing. To28.9qualify under this clause, the taxpayer must apply to the county28.10assessor by May 30 of each year. The application must be28.11accompanied by an affidavit or other proof required by the28.12assessor to determine qualification under this clause.28.13(3) Qualifying buildings and appurtenances, together with28.14the land upon which they are located, leased for a period of up28.15to five years by the occupant under a lease-purchase program28.16administered by the Minnesota housing finance agency or a28.17housing and redevelopment authority authorized under sections28.18469.001 to 469.047, provided the occupant's income is no greater28.19than 80 percent of the county or area median income, adjusted28.20for family size, and the building consists of two or less28.21dwelling units. The lease agreement must provide for a portion28.22of the lease payment to be escrowed as a nonrefundable down28.23payment on the housing. The administering agency shall verify28.24the occupants income eligibility and certify to the county28.25assessor that the occupant meets the income criteria under this28.26paragraph. To qualify under this clause, the taxpayer must28.27apply to the county assessor by May 30 of each year. For28.28purposes of this section, "qualifying buildings and28.29appurtenances" shall be defined as one or two unit residential28.30buildings which are unoccupied and have been abandoned and28.31boarded for at least six months.28.32Class 4d property has a class rate of two percent of market28.33value except that property classified under clause (3), shall28.34have the same class rate as class 1a property.28.35(e) Residential rental property that would otherwise be28.36assessed as class 4 property under paragraph (a); paragraph (b),29.1clauses (1) and (3); paragraph (c), clause (1), (2), (3), or29.2(4), is assessed at the class rate applicable to it under29.3Minnesota Statutes 1988, section 273.13, if it is found to be a29.4substandard building under section 273.1316. Residential rental29.5property that would otherwise be assessed as class 4 property29.6under paragraph (d) is assessed at 2.3 percent of market value29.7if it is found to be a substandard building under section29.8273.1316.29.9(f) Class 4e property consists of the residential portion29.10of any structure located within a city that was converted from29.11nonresidential use to residential use, provided that:29.12(1) the structure had formerly been used as a warehouse;29.13(2) the structure was originally constructed prior to 1940;29.14(3) the conversion was done after December 31, 1995, but29.15before January 1, 2003; and29.16(4) the conversion involved an investment of at least29.17$25,000 per residential unit.29.18Class 4e property has a class rate of 2.3 percent, provided29.19that a structure is eligible for class 4e classification only in29.20the 12 assessment years immediately following the conversion.29.21 Sec. 14. Minnesota Statutes 1996, section 273.13, is 29.22 amended by adding a subdivision to read: 29.23 Subd. 34. [INFLATION ADJUSTMENT.] Beginning for property 29.24 taxes assessed in 1999, payable in 2000, the commissioner shall 29.25 annually adjust the valuation limits specified in subdivisions 29.26 22 and 23 for inflation. The commissioner shall make the 29.27 inflation adjustments in accordance with section 290.06, 29.28 subdivision 2d, except that for purposes of this subdivision the 29.29 percentage increase shall be determined from the year ending on 29.30 August 31, 1997, to the year ending on August 31 of the year 29.31 preceding the assessment year. The commissioner shall round the 29.32 valuation limits to the nearest $1,000 value. The commissioner 29.33 shall annually announce the adjusted valuation limits at the 29.34 same time provided under section 290.06. The determination of 29.35 the commissioner under this subdivision is not a rule under the 29.36 Administrative Procedure Act. 30.1 Sec. 15. Minnesota Statutes 1996, section 275.08, 30.2 subdivision 1b, is amended to read: 30.3 Subd. 1b. [COMPUTATION OF TAX RATES.] The amounts 30.4 certified to be levied against net tax capacity under section 30.5 275.07 by an individual local government unit shall be divided 30.6 by the total net tax capacity of all taxable properties within 30.7 the local government unit's taxing jurisdiction. The resulting 30.8 ratio, the local government's local tax rate, multiplied by each 30.9 property's net tax capacity shall be each property's net tax 30.10 capacity tax for that local government unit before reduction by 30.11 any credits. The sum of the state tax, if any, plus each local 30.12 government's tax is the property's total property tax, before 30.13 reduction by any credits. 30.14Any amount certified to the county auditor to be levied30.15against market value shall be divided by the total referendum30.16market value of all taxable properties within the taxing30.17district. The resulting ratio, the taxing district's new30.18referendum tax rate, multiplied by each property's referendum30.19market value shall be each property's new referendum tax before30.20reduction by any credits. For the purposes of this subdivision,30.21"referendum market value" means the market value as defined in30.22section 124A.02, subdivision 3b.30.23 Sec. 16. Minnesota Statutes 1996, section 290.06, is 30.24 amended by adding a subdivision to read: 30.25 Subd. 25. [PROPERTY TAX CREDIT FOR DISABLED.] (a) A 30.26 disabled individual may claim a credit against the tax imposed 30.27 by this chapter equal to 50 percent of the ad valorem homestead 30.28 property tax paid during the taxable year. The maximum credit 30.29 allowed to an individual or a married couple for the year is 30.30 $300. Homestead tax means the tax paid on the individual's or 30.31 married couple's principal residence, classified as class 1 30.32 under section 273.13, subdivision 22. 30.33 (b) If the amount of the credit under this subdivision 30.34 exceeds the claimant's liability for tax, the commissioner shall 30.35 refund the excess to the individual. An amount sufficient to 30.36 pay the refunds is appropriated to the commissioner from the 31.1 general fund. 31.2 (c) For purposes of this subdivision, a disabled person 31.3 means: 31.4 (1) a blind person; 31.5 (2) a person who: 31.6 (i) served in the active military or naval service of the 31.7 United States; 31.8 (ii) is entitled to compensation under the laws and 31.9 regulations of the United States for permanent and total 31.10 service-connected disability due to the loss, or loss of use, by 31.11 reason of amputation, ankylosis, progressive muscular 31.12 dystrophies, or paralysis of both lower extremities, such as to 31.13 preclude motion without the aid of braces, crutches, canes, or a 31.14 wheelchair; and 31.15 (iii) has acquired a special housing unit with special 31.16 fixtures or movable facilities made necessary by the nature of 31.17 the veteran's disability; 31.18 (3) the surviving spouse of a deceased individual who 31.19 qualified under clause (2), for as long as the surviving spouse 31.20 uses the special housing unit as the spouse's principal 31.21 residence; 31.22 (4) any person who: 31.23 (i) is permanently and totally disabled; and 31.24 (ii) receives 90 percent or more of the person's total 31.25 income from one or more of the following: 31.26 (A) aid from any state as a result of that disability; 31.27 (B) supplemental security income for the disabled; 31.28 (C) workers' compensation based on a finding of total and 31.29 permanent disability; 31.30 (D) social security disability, including the amount of a 31.31 disability insurance benefit which is converted to an old-age 31.32 insurance benefit and any subsequent cost-of-living increases; 31.33 (E) aid under the federal Railroad Retirement Act of 1937, 31.34 United States Code Annotated, title 45, section 228b(a)5; 31.35 (F) a pension from any local government retirement fund 31.36 located in the state of Minnesota as a result of that 32.1 disability; 32.2 (G) pension, annuity, or other income paid as a result of 32.3 that disability from a private pension or disability plan, 32.4 including employer, employee, union, and insurance plans; and 32.5 (iii) has household income as defined in section 290A.03, 32.6 subdivision 5, of $50,000 or less; or 32.7 (5) any person who is permanently and totally disabled and 32.8 whose household income as defined in section 290A.03, 32.9 subdivision 5, is 150 percent or less of the federal poverty 32.10 level. 32.11 Permanently and totally disabled for purposes of this 32.12 subdivision means a condition that is permanent and totally 32.13 incapacitates the person from working at an occupation which 32.14 brings the person an income. 32.15 Sec. 17. [462A.071] [CERTIFICATION OF HOUSING QUALIFYING 32.16 FOR REDUCED PROPERTY TAX RATE.] 32.17 Subdivision 1. [CERTIFICATION.] By June 30 of each year, 32.18 the agency must certify to local assessors the units of 32.19 low-income rental properties that qualify for subclass 4x under 32.20 sections 273.126 and 273.13. In making these certifications, 32.21 the agency may rely on the application and supporting 32.22 information supplied by the property owner as to compliance with 32.23 the income limits under subdivision 2 and satisfaction of the 32.24 minimum housing quality standards under subdivision 4. 32.25 Subd. 2. [APPLICATION.] (a) In order to qualify for 32.26 certification under subdivision 1, the owner or manager of the 32.27 property must annually apply to the agency. The application 32.28 must be in the form prescribed by the agency, contain the 32.29 information required by the agency, and be submitted by the date 32.30 and time specified by the agency. 32.31 (b) Each application must include: 32.32 (1) the property tax identification number; 32.33 (2) the number, type, and size of units the applicant seeks 32.34 to qualify as low-income housing under subclass 4x; 32.35 (3) the number, type, and size of units in the property for 32.36 which the applicant is not seeking qualification, if any; 33.1 (4) a certification that the property has been inspected by 33.2 a qualified inspector within the past three years and meets the 33.3 minimum housing quality standards or is exempt from the 33.4 inspection requirement under subdivision 4; 33.5 (5) information documenting compliance with the income 33.6 limits; 33.7 (6) an executed agreement to restrict rents meeting the 33.8 requirements specified by the agency or executed leases for the 33.9 units for which qualification as low-income housing as subclass 33.10 4x under section 273.13 is sought and the rent schedule; and 33.11 (7) any additional information the agency deems appropriate 33.12 to require. 33.13 (c) The applicant must pay a per-unit application fee to be 33.14 set by the agency. The application fee charged by the agency 33.15 must approximately equal the costs of processing and reviewing 33.16 the applications. The fee must be deposited in the general fund. 33.17 Subd. 3. [AGREEMENT TO RESTRICT RENTS.] The agency may 33.18 prescribe one or more standard form agreements to restrict rents 33.19 that meet the requirements of section 273.126, subdivision 3. 33.20 The agency may require applicants to execute a rent restriction 33.21 agreement in this form as a condition of entering an agreement 33.22 to restrict rents. 33.23 Subd. 4. [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 33.24 qualify for taxation under subclass 4x under section 273.13, a 33.25 unit must meet the housing maintenance code of the local unit of 33.26 government in which the unit is located, if such a code has been 33.27 adopted, or the housing quality standards adopted by the United 33.28 States Department of Housing and Urban Development. 33.29 (b) In order to meet the minimum housing quality standards, 33.30 a building must be inspected by an independent designated 33.31 inspector at least once every three years. The inspector must 33.32 certify that the building complies with the minimum standards. 33.33 The property owner must pay the cost of the inspection. 33.34 (c) The agency may exempt from the inspection requirement 33.35 housing units that are financed by a governmental entity and 33.36 subject to regular inspection or other compliance checks with 34.1 regard to minimum housing quality. 34.2 Written certification must be supplied, however, showing 34.3 that these exempt units have been inspected within the last 34.4 three years and comply with the requirements under the public 34.5 financing or local requirements. 34.6 Subd. 5. [HOUSING INSPECTORS.] (a) Housing inspections 34.7 required by this section may be conducted by any persons 34.8 employed by or under contract with a state agency or a local 34.9 unit of government to conduct property inspections in connection 34.10 with a state or federal housing program or by persons charged by 34.11 the governing body of a political subdivision with the 34.12 responsibility of enforcing provisions of local housing law, 34.13 building, or housing maintenance code. The inspector must be 34.14 independent of the owner or manager of the inspected property. 34.15 (b) The agency must maintain a list of persons eligible to 34.16 conduct housing inspections under this section. 34.17 (c) The agency may provide housing inspection services 34.18 under this section and may set and charge appropriate fees for 34.19 the services. The fees are deposited in the general fund. 34.20 Sec. 18. [APPROPRIATION.] 34.21 $500,000 is appropriated for the 1998-1999 biennium from 34.22 the general fund to the housing finance agency for purposes of 34.23 administering the certification of qualifying low-income 34.24 residential properties for property taxation under subclass 4x. 34.25 Sec. 19. [REPEALER.] 34.26 Minnesota Statutes 1996, sections 273.13, subdivisions 21a, 34.27 31, and 32; 273.1315; 273.1317; 273.1318; 275.02; 275.08, 34.28 subdivisions 1c and 1d; and 275.61, are repealed. 34.29 Sec. 20. [EFFECTIVE DATE.] 34.30 This article is effective for taxes levied in 1998, payable 34.31 in 1999, and subsequent years, except for section 16, which is 34.32 effective for tax years beginning after 1998. 34.33 ARTICLE 2 34.34 CONVERSION OF SCHOOL DISTRICT LEVY AUTHORITY 34.35 Section 1. Minnesota Statutes 1996, section 122.247, 34.36 subdivision 3, is amended to read: 35.1 Subd. 3. [TRANSITIONALLEVYREVENUE.] The board of the 35.2 combined district, or the boards of combining districts that 35.3 have received voter approval for the combination under section 35.4 122.243, subdivision 2,may levyare eligible for state aid to 35.5 pay for the expenses of negotiation, administrative expenses 35.6 directly related to the transition from cooperation to 35.7 combination, and the cost of necessary new athletic and music 35.8 uniforms.The board or boards may levy this amount over three35.9or fewer years.All expenses must be approved by the 35.10 commissioner of children, families, and learning. The 35.11 commissioner may pay this state aid to a district over three or 35.12 fewer years. 35.13 Sec. 2. Minnesota Statutes 1996, section 122.45, 35.14 subdivision 3a, is amended to read: 35.15 Subd. 3a. (a) Liabilities of a dissolved district existing 35.16 at the time of the attachment other than bonded debt within the 35.17 purview of subdivision 2 shall be obligations of the 35.18 consolidated district after attachment (in the amount and kind 35.19 determined by the commissioner according to subdivision 1, where 35.20 a dissolved district is divided), for the payment of which the 35.21 consolidated district has a right to reimbursement byspecial35.22levy or leviesstate aid. The amount of reimbursement will be 35.23 equal to the liabilities of the dissolved district for which the 35.24 consolidated district is obligated less the aggregate of the 35.25 following which has been or will be received by the consolidated 35.26 district at or after the time of attachment from or as a result 35.27 of the dissolution and attachment of the dissolved district: 35.28 (1) all taxes inuring to the consolidating district upon 35.29 levies made by the dissolved district; 35.30 (2) all cash, bank accounts, investments, and other current 35.31 assets; 35.32 (3) earned state aids of the dissolved districts; 35.33 (4) returns from the sale of property of the dissolved 35.34 district. 35.35 (b) The amount ofsuch special levy so computed shall be35.36certified to the county auditor with the other tax requirements36.1of the consolidated district but separately stated and36.2identified. The auditor shall add the amount of special levy so36.3certified to the school rate for the territory in the36.4consolidated district which came from the dissolved district and36.5include it in the levy on the taxable property in that36.6territory; provided, the county auditor shall not spread more of36.7the amount certified for special levy in any year than will36.8amount to 20 percent of the school levy without the special36.9levy, leaving the remaining part of the certified amount for36.10levy in successive years without further certification. Any36.11amount of reimbursement to which it is entitled omitted by the36.12consolidated district from its initial certification for special36.13levy may be certified in a subsequent year for levy in the same36.14manner as the levy upon initial certification.36.15The levy authorized by this subdivision shall be in36.16addition to those otherwise authorized for a school district.36.17 state aid shall be calculated by the commissioner and may be 36.18 reduced at the commissioner's discretion for any liabilities 36.19 that the commissioner determines are inappropriate for 36.20 reimbursement. 36.21 Sec. 3. Minnesota Statutes 1996, section 122.531, 36.22 subdivision 4a, is amended to read: 36.23 Subd. 4a. [REORGANIZATION OPERATING DEBTLEVIESREVENUE.] 36.24 (a) A district that receives revenue under section 124.2725 for 36.25 cooperation or has combined according to sections 122.241 to 36.26 122.248may levyis eligible for state aid to eliminate 36.27 reorganization operating debt as defined in section 121.915, 36.28 clause (1).The amount of the debt must be certified over a36.29period of five years. After the effective date of combination36.30according to sections 122.241 to 122.248, the levy may be36.31certified and spread either36.32(1) only on the property in the combined district that36.33would have been taxable in the preexisting district that36.34incurred the debt, or36.35(2) on all of the taxable property in the combined district.36.36 (b) A district that has reorganized according to section 37.1 122.22 or 122.23may levyis eligible for state aid to eliminate 37.2 reorganization operating debt as defined in section 121.915, 37.3 clause (2).The amount of debt must be certified over a period37.4not to exceed five years and may be spread either37.5(1) only on the property in the newly created or enlarged37.6district which was taxable in the preexisting district that37.7incurred the debt, or37.8(2) on all of the taxable property in the newly created or37.9enlarged district.37.10 (c) The commissioner shall calculate the amount of 37.11 reorganization operating debt for each qualifying school 37.12 district. At the commissioner's discretion, the amount of the 37.13 state aid may be reduced for any school district. The 37.14 commissioner shall establish a schedule for the payment of state 37.15 aid. The schedule may extend for up to five years. 37.16 Sec. 4. Minnesota Statutes 1996, section 122.531, 37.17 subdivision 9, is amended to read: 37.18 Subd. 9. [LEVYREVENUE FOR SEVERANCE PAY OR EARLY 37.19 RETIREMENT INCENTIVES.] The school board of a newly created or 37.20 enlarged district to which part or all of a dissolved district 37.21 was attached according to section 122.22may levy foris 37.22 eligible for state aid payments for the cost of severance pay or 37.23 early retirement incentives for licensed and nonlicensed 37.24 employees who resign or retire early as a result of the 37.25 dissolution or consolidation, if the commissioner of children, 37.26 families, and learning approves the incentives and the amountto37.27be levied. The amount may be levied over a period of up to five37.28years and shall be spread in whole or in part on the property of37.29a preexisting district or the newly created or enlarged37.30district, as determined by the school board of the newly created37.31or enlarged districtof the incentives. The commissioner shall 37.32 establish a schedule for the payment of state aid. The schedule 37.33 may extend for up to five years. 37.34 Sec. 5. Minnesota Statutes 1996, section 122.533, is 37.35 amended to read: 37.36 122.533 [EXPENSES OF TRANSITION.] 38.1 The board of a district to which a dissolved district is 38.2 attached pursuant to section 122.22,may,is eligible for state 38.3 aid for the purpose of paying the expenses of negotiations and 38.4 other administrative expenses relating to the transition,. The 38.5 board of the district may enter into agreements with banks or 38.6 any person to take its orders at any rate of interest not to 38.7 exceed seven percent per annum. These orders shall be paid by 38.8 the treasurer of the district from district funds after the 38.9 effective date of the dissolution and attachment. 38.10 Notwithstanding the provisions of sections 124.226, 124.2716, 38.11 124.91, 124.912, 124.914, 124.916, and 124.918, the districtmay38.12 is, in the year the dissolution and attachment becomes 38.13 effective,levyeligible for state aid in an amount equal to the 38.14 amount of the orders issued pursuant to this subdivision and the 38.15 interest on these orders. No district shall issue orders for 38.16 fundsor make a levy pursuantaccording to this subdivision 38.17 without the commissioner's approval of the expenses to be paid 38.18 with the funds from the orders andlevystate aid. 38.19 Sec. 6. Minnesota Statutes 1996, section 122.535, 38.20 subdivision 6, is amended to read: 38.21 Subd. 6. [SEVERANCE PAY.] A district shall pay severance 38.22 pay to a teacher who is placed on unrequested leave of absence 38.23 by the district as a result of the agreement. A teacher is 38.24 eligible under this subdivision if the teacher: 38.25 (1) is a teacher, as defined in section 125.12, subdivision 38.26 1, but not a superintendent; 38.27 (2) has a continuing contract with the district according 38.28 to section 125.12, subdivision 4. 38.29 The amount of severance pay shall be equal to the teacher's 38.30 salary for the school year during which the teacher was placed 38.31 on unrequested leave of absence minus the gross amount the 38.32 teacher was paid during the 12 months following the teacher's 38.33 termination of salary, by an entity whose teachers by statute or 38.34 rule must possess a valid Minnesota teaching license, and minus 38.35 the amount a teacher receives as severance or other similar pay 38.36 according to a contract with the district or district policy. 39.1 These entities include, but are not limited to, the school 39.2 district that placed the teacher on unrequested leave of 39.3 absence, another school district in Minnesota, an education 39.4 district, an intermediate school district, a SC, a board formed 39.5 under section 471.59, a state residential academy, the Lola and 39.6 Rudy Perpich Minnesota center for arts education, a vocational 39.7 center, or a special education cooperative. These entities do 39.8 not include a school district in another state, a Minnesota 39.9 public post-secondary institution, or a state agency. Only 39.10 amounts earned by the teacher as a substitute teacher or in a 39.11 position requiring a valid Minnesota teaching license shall be 39.12 subtracted. A teacher may decline any offer of employment as a 39.13 teacher without loss of rights to severance pay. 39.14 To determine the amount of severance pay that is due for 39.15 the first six months following termination of the teacher's 39.16 salary, the district may require the teacher to provide 39.17 documented evidence of the teacher's employers and gross 39.18 earnings during that period. The district shall pay the teacher 39.19 the amount of severance pay it determines to be due from the 39.20proceeds of the levystate aid for this purpose. To determine 39.21 the amount of severance pay that is due for the second six 39.22 months of the 12 months following the termination of the 39.23 teacher's salary, the district may require the teacher to 39.24 provide documented evidence of the teacher's employers and gross 39.25 earnings during that period. The district shall pay the teacher 39.26 the amount of severance pay it determines to be due from 39.27 theproceeds of the levystate aid for this purpose. 39.28 A teacher who receives severance pay under this subdivision 39.29 waives all further reinstatement rights under section 125.12, 39.30 subdivision 6a or 6b. If the teacher receives severance pay, 39.31 the teacher shall not receive credit for any years of service in 39.32 the district paying severance pay prior to the year in which the 39.33 teacher becomes eligible to receive severance pay. 39.34 The severance pay is subject to section 465.72. The 39.35 districtmay levy annuallyis eligible for state aid according 39.36 to section 124.912, subdivision 1, for the severance pay. 40.1 Sec. 7. Minnesota Statutes 1996, section 124.239, 40.2 subdivision 5, is amended to read: 40.3 Subd. 5. [LEVY AUTHORIZED.] A district, after local board 40.4 approval, may levy for costs related to an approved facility 40.5 plan as follows: 40.6 (a) if the district has indicated to the commissioner that 40.7 bonds will be issued, the district may levy for the principal 40.8 and interest payments on outstanding bonds issued according to 40.9 subdivision 3; or 40.10 (b) if the district has indicated to the commissioner that 40.11 the plan will be funded through levy, the district may levy 40.12 according to the schedule approved in the plan. 40.13 The authority to levy for costs related to an approved 40.14 facility plan under this section is limited to facilities plans 40.15 approved prior to July 1, 1997. 40.16 Sec. 8. Minnesota Statutes 1996, section 124.2601, 40.17 subdivision 2, is amended to read: 40.18 Subd. 2. [PROGRAMS FUNDED.] Adult basic education programs 40.19 established under section 124.26 and approved by the 40.20 commissioner are eligible forrevenueaid under this section. 40.21 Sec. 9. Minnesota Statutes 1996, section 124.2601, 40.22 subdivision 3, is amended to read: 40.23 Subd. 3. [AID.] Adult basic education aid for each 40.24 approved program equals the sum of 65 percent of the general 40.25 education formula allowance times the number of full-time 40.26 equivalent students in its adult basic education program and an 40.27 amount equal to .12 percent times the district's adjusted net 40.28 tax capacity for assessment year 1996. 40.29 Sec. 10. Minnesota Statutes 1996, section 124.2711, 40.30 subdivision 1, is amended to read: 40.31 Subdivision 1. [REVENUEAID.]The revenueState aid for 40.32 early childhood family education programs for a school district 40.33 equals $101.25for 1993 and later fiscal yearstimes the greater 40.34 of: 40.35 (1) 150; or 40.36 (2) the number of people under five years of age residing 41.1 in the school district on October 1 of the previous school year. 41.2 Sec. 11. Minnesota Statutes 1996, section 124.2711, 41.3 subdivision 5, is amended to read: 41.4 Subd. 5. [HOME VISITINGLEVYAID.] A school district that 41.5 enters into a collaborative agreement to provide education 41.6 services and social services to families with young childrenmay41.7levy an amountis eligible for state aid equal to $1.60 times 41.8 the number of people under five years of age residing in the 41.9 district on September 1 of the last school year.Levy revenue41.10under this subdivision shall not be included as revenue under41.11subdivision 1.The revenue shall be used for home visiting 41.12 programs under section 121.882, subdivision 2b. 41.13 Sec. 12. Minnesota Statutes 1996, section 124.2713, 41.14 subdivision 1, is amended to read: 41.15 Subdivision 1. [TOTAL COMMUNITY EDUCATION REVENUE.] 41.16 Community education revenue equals the sum of a district's 41.17 general community education revenue and youth service program 41.18 revenue. Community education revenue is provided entirely 41.19 through state aid. 41.20 Sec. 13. Minnesota Statutes 1996, section 124.2714, is 41.21 amended to read: 41.22 124.2714 [ADDITIONAL COMMUNITY EDUCATION REVENUE.] 41.23 (a) A district that is eligible under section 124.2713, 41.24 subdivision 2,may levy an amount upis eligible for aid equal 41.25 to the amount of revenue authorized by Minnesota Statutes 1986, 41.26 section 275.125, subdivision 8, clause (2). 41.27 (b) Beginning withleviesrevenue for fiscal year 1995, 41.28 thislevyrevenue must be reduced each year by the amount of any 41.29 increase in thelevyingdistrict's general community education 41.30 revenue under section 124.2713, subdivision 3, for that fiscal 41.31 year over the amount received by the district under section 41.32 124.2713, subdivision 3, for fiscal year 1994. 41.33 (c) Theproceeds of the levyrevenue may be used for the 41.34 purposes set forth in section 124.2713, subdivision 8. 41.35 Sec. 14. Minnesota Statutes 1996, section 124.2715, 41.36 subdivision 1, is amended to read: 42.1 Subdivision 1. [REVENUE AMOUNT.] A district that is 42.2 eligible according to section 124.2713, subdivision 2, may 42.3 receive revenue for a program for adults with disabilities. 42.4 Revenue for the program for adults with disabilities for a 42.5 district or a group of districts equals the lesser of: 42.6 (1) the actual expenditures for approved programs and 42.7 budgets; or 42.8 (2) $60,000. 42.9 Revenue is provided through state aid. 42.10 Sec. 15. Minnesota Statutes 1996, section 124.2716, 42.11 subdivision 2, is amended to read: 42.12 Subd. 2. [EXTENDED DAY REVENUE.] The extended day revenue 42.13 for an eligible school district equals the approved additional 42.14 cost of providing services to children with disabilities or 42.15 children experiencing family or related problems of a temporary 42.16 nature who participate in the extended day program. Extended 42.17 day revenue is provided through state aid. 42.18 Sec. 16. Minnesota Statutes 1996, section 124.2725, 42.19 subdivision 2, is amended to read: 42.20 Subd. 2. [COOPERATION AND COMBINATION REVENUE.] 42.21 Cooperation and combination revenue equals $100 times the pupil 42.22 units served in the district. For purposes of this section, 42.23 pupil units served means the number of resident and nonresident 42.24 pupil units in average daily membership receiving instruction in 42.25 the cooperating or combined district. A district may not 42.26 receive revenue under this section if itleviesreceives revenue 42.27 under section 124.912, subdivision 4. Cooperation and 42.28 combination revenue is provided through state aid. 42.29 Sec. 17. Minnesota Statutes 1996, section 124.2725, 42.30 subdivision 6, is amended to read: 42.31 Subd. 6. [ADDITIONAL AID.] In addition to the aid in 42.32 subdivision52, districts shall receive aid according to the 42.33 following: 42.34 (1) for districts that did not enter into an agreement 42.35 under section 122.541 at least three years before the date of a 42.36 successful referendum held under section 122.243, subdivision 2, 43.1 and combine without cooperating, $100 times the pupil units 43.2 served in the district in the first year of combination; or 43.3 (2) for districts that combine after one or two years of 43.4 cooperation, $100 times the actual pupil units served in each 43.5 district for the first year of cooperation and $100 times the 43.6 actual pupil units served in the combined district for the first 43.7 year of combination; or 43.8 (3) for districts that entered into an agreement under 43.9 section 122.541 at least three years before the date of a 43.10 successful referendum held under section 122.243, subdivision 2, 43.11 and combine without cooperating, $100 times the pupil units 43.12 served in the combined district for the first two years of 43.13 combination. 43.14 Sec. 18. Minnesota Statutes 1996, section 124.2725, 43.15 subdivision 13, is amended to read: 43.16 Subd. 13. [FAILURE TO COMBINE.] A district has failed to 43.17 combine if the commissioner disapproves of the plan according to 43.18 section 122.243, subdivision 1, or if a third referendum fails 43.19 under section 122.243, subdivision 2, or if the commissioner of 43.20 children, families, and learning determines that the districts 43.21 involved are not making sufficient progress toward combination. 43.22 (a) If a district has failed to combine, cooperation and 43.23 combination aid under subdivisions 5 and 6 shall not be paidand43.24the authority to levy under subdivision 4 ceases. The 43.25 commissioner shall reduce other aids due the district to recover 43.26 an amount equal to the aid paid under subdivision 6 plus the 43.27 difference between the aid paid under subdivision 5 and the aid 43.28 that would have been paid if the revenue had been $50 times the 43.29 pupil units served. 43.30 (b) If a district has failed to combine, theauthority to43.31levyeligibility for revenue for reorganization operating debt 43.32 under section 122.531, subdivision 4a, and for severance pay or 43.33 early retirement incentives under subdivision 15 ceases. 43.34 Sec. 19. Minnesota Statutes 1996, section 124.2725, 43.35 subdivision 14, is amended to read: 43.36 Subd. 14. [CESSATION OF REVENUE.] At any time the 44.1 districts cease cooperating, aid shall not be paidand the44.2authority to levy ceases. If a district ceases to cooperate for44.3all or a portion of a fiscal year for which a levy has been44.4certified under subdivision 3, the department of children,44.5families, and learning shall adjust the next levy certified by44.6the district by an amount in proportion to the part of the44.7fiscal year that the district did not cooperate. 44.8 Sec. 20. Minnesota Statutes 1996, section 124.2726, 44.9 subdivision 1, is amended to read: 44.10 Subdivision 1. [ELIGIBILITY AND USE.] A school district 44.11 that has been reorganized after June 30, 1994, under section 44.12 122.23 is eligible for consolidation transition revenue. 44.13 Revenue is equal to the sum of aid undersubdivision44.14 subdivisions 2 andlevy under subdivision3. Consolidation 44.15 transition revenue may only be used according to this section. 44.16 Revenue must be used for the following purposes and may be 44.17 distributed among these purposes at the discretion of the 44.18 district: 44.19 (1) to offer early retirement incentives as provided by 44.20 section 122.23, subdivision 20; 44.21 (2) to reduce operating debt as defined in section 121.915; 44.22 (3) to enhance learning opportunities for students in the 44.23 reorganized district; and 44.24 (4) for other costs incurred in the reorganization. 44.25 Revenue received and utilized under clause (3) or (4) may 44.26 be expended for operating, facilities, and/or equipment. 44.27 Revenue received under this section shall not be included in the 44.28 determination of the reduction under section 124A.26, 44.29 subdivision 1. 44.30 Sec. 21. Minnesota Statutes 1996, section 124.2726, 44.31 subdivision 3, is amended to read: 44.32 Subd. 3. [LEVYADDITIONAL AID.] If the aid available in 44.33 subdivision 2 is insufficient to cover the costs of the district 44.34 under section 122.23, subdivision 20, the district maylevy44.35 apply to the commissioner for state aid to cover the difference 44.36over a period of time not to exceed. The commissioner shall 45.1 evaluate the aid request and may award additional aid for a 45.2 period not to exceed three years. 45.3 Sec. 22. Minnesota Statutes 1996, section 124.2727, 45.4 subdivision 6a, is amended to read: 45.5 Subd. 6a. [DISTRICT COOPERATION REVENUE.] A district's 45.6 cooperation revenue is equal to the greater of $67 times the 45.7 actual pupil units or $25,000. District cooperation revenue is 45.8 provided through state aid. 45.9 Sec. 23. Minnesota Statutes 1996, section 124.312, 45.10 subdivision 5, is amended to read: 45.11 Subd. 5. [INTEGRATION AID.]For fiscal year 1996 and later45.12fiscal yearsIntegration revenue is provided through state aid 45.13 and equals the following amounts: 45.14 (1) for independent school district No. 709, Duluth, 45.15 $1,385,000 plus the sum of $660,000 and an amount equal to 2.0 45.16 percent times the district's adjusted net tax capacity for 45.17 assessment year 1994; 45.18 (2) for independent school district No. 625, St. Paul, 45.19 $8,090,700 plus the product of $197 and the district's actual 45.20 pupil units for that year; and 45.21 (3) for special school district No. 1, Minneapolis, 45.22 $9,368,300 plus the product of $197 and the district's actual 45.23 pupil units for that year. 45.24 Sec. 24. Minnesota Statutes 1996, section 124.313, is 45.25 amended to read: 45.26 124.313 [TARGETED NEEDS REVENUE.] 45.27 For fiscal year 1996 and thereafter, a school district's 45.28 targeted needs revenue equals the sum of: 45.29 (1) assurance of mastery revenue according to section 45.30 124.311; plus 45.31 (2) the district's limited English proficiency revenue 45.32 computed according to section 124.273, subdivision 1d; plus 45.33 (3) integration revenue computed according to section 45.34 124.312, subdivision 4. 45.35 Sec. 25. Minnesota Statutes 1996, section 124.3201, 45.36 subdivision 1, is amended to read: 46.1 Subdivision 1. [DEFINITIONS.] For the purposes of this 46.2 section and sections 124.3202 and 124.321, the definitions in 46.3 this subdivision apply. 46.4 (a) "Base year" for fiscal year 1996 and fiscal year 1997 46.5 means the 1994 summer program and the 1994-1995 school year. 46.6 Base year for later fiscal years means the second fiscal year 46.7 preceding the fiscal year for which aid will be paid. 46.8 (b) "Basic revenue" has the meaning given it in section 46.9 124A.22, subdivision 2. For the purposes of computing basic 46.10 revenue pursuant to this section, each child with a disability 46.11 shall be counted as prescribed in section 124.17, subdivision 1. 46.12 (c) "Essential personnel" means teachers, related services, 46.13 and support services staff providing direct services to students. 46.14 (d) "Average daily membership" has the meaning given it in 46.15 section 124.17. 46.16 (e) "Program growth factor" means 1.00 for fiscal year 1998 46.17 and later. 46.18 (f) "Aid percentage factor" means 60 percent for fiscal 46.19 year 1996, 70 percent for fiscal year 1997, 80 percent for 46.20 fiscal year 1998,90 percent for fiscal year 1999,and 100 46.21 percent for fiscal years20001999 and later. 46.22 (g) "Levy percentage factor" means 100 minus the aid 46.23 percentage factor for that year. 46.24 Sec. 26. Minnesota Statutes 1996, section 124.4945, is 46.25 amended to read: 46.26 124.4945 [LEVYSTATE AID FOR SEVERANCE PAY.] 46.27 A joint powers board established under section 124.494may46.28make a levyis eligible to receive state aid to provide 46.29 severance pay and early retirement incentives under section 46.30 125.611, for any teacher as defined under section 125.12, 46.31 subdivision 1, who is placed on unrequested leave as a result of 46.32 the cooperative secondary facility agreement.A joint powers46.33board making a levy shall certify to each participating district46.34tax levies sufficient to raise the amount necessary to provide46.35the district's portion of severance pay and early retirement46.36incentives. The tax levy certified to each district must be47.1expressed as a local tax rate, that, when applied to the47.2adjusted net tax capacity of all of the participating districts47.3raises the amount necessary to provide severance pay and early47.4retirement incentives. Each participating school district shall47.5include the levy in the next tax roll which it shall certify to47.6the county auditor, and shall remit the collections of the levy47.7to the joint powers board.The commissioner shall approve any 47.8 severance pay agreements or early retirement incentives and 47.9 determine the amount of state aid for the districts. 47.10 Sec. 27. Minnesota Statutes 1996, section 124.574, 47.11 subdivision 2c, is amended to read: 47.12 Subd. 2c. [DEFINITIONS.] For the purposes of this section 47.13 and section 124.321, the definitions in this subdivision apply. 47.14 (a) "Base year" for fiscal year 1996 means fiscal year 1995. 47.15 Base year for later fiscal years means the second fiscal year 47.16 preceding the fiscal year for which aid will be paid. 47.17 (b) "Basic revenue" has the meaning given it in section 47.18 124A.22, subdivision 2. For the purposes of computing basic 47.19 revenue pursuant to this section, each child with a disability 47.20 shall be counted as prescribed in section 124.17, subdivision 1. 47.21 (c) "Average daily membership" has the meaning given it in 47.22 section 124.17. 47.23 (d) "Program growth factor" means 1.00 for fiscal year 1998 47.24 and later. 47.25 (e) "Aid percentage factor" means 60 percent for fiscal 47.26 year 1996, 70 percent for fiscal year 1997, 80 percent for 47.27 fiscal year 1998,90 percent for fiscal year 1999,and 100 47.28 percent for fiscalyear 2000years 1999 and later. 47.29 Sec. 28. Minnesota Statutes 1996, section 124.83, 47.30 subdivision 3, is amended to read: 47.31 Subd. 3. [HEALTH AND SAFETY REVENUE.] A district's health 47.32 and safety revenue for a fiscal year equals: 47.33 (1) the sum of (a) the total approved cost of the 47.34 district's hazardous substance plan for fiscal years 1985 47.35 through 1989, plus (b) the total approved cost of the district's 47.36 health and safety program for fiscal year 1990 through the 48.1 fiscal year to which the levy is attributable, minus 48.2 (2) the sum of (a) the district's total hazardous substance 48.3 aid and levy for fiscal years 1985 through 1989 under sections 48.4 124.245 and 275.125, subdivision 11c, plus (b) the district's 48.5 health and safety revenue under this subdivision, for years 48.6 before the fiscal year to which the levy is attributable, plus 48.7 (c) the amount of other federal, state, or local receipts for 48.8 the district's hazardous substance or health and safety programs 48.9 for fiscal year 1985 through the fiscal year to which the levy 48.10 is attributable. 48.11 The commissioner shall not approve any new health and 48.12 safety revenue plans after July 1, 1997. 48.13 Sec. 29. Minnesota Statutes 1996, section 124.91, 48.14 subdivision 1, is amended to read: 48.15 Subdivision 1. [TO LEASE BUILDING OR LAND.] When a 48.16 district finds it economically advantageous to rent or lease a 48.17 building or land for any instructional purposes or for school 48.18 storage or furniture repair, and it determines that the capital 48.19 expenditure facilities revenues authorized under sections 48.20 124.243 and 124A.22, subdivision 10, are insufficient for this 48.21 purpose, it may apply to the commissioner for permission to make 48.22 an additional capital expenditure levy for this purpose. The 48.23 commissioner shall not approve any levies under this section 48.24 after July 1, 1997. A school district that has approved levy 48.25 authority under this section may continue to levy for the 48.26 remainder of the lease amounts. An application for permission 48.27 to levy under this subdivision must contain financial 48.28 justification for the proposed levy, the terms and conditions of 48.29 the proposed lease, and a description of the space to be leased 48.30 and its proposed use. The criteria for approval of applications 48.31 to levy under this subdivision must include: the reasonableness 48.32 of the price, the appropriateness of the space to the proposed 48.33 activity, the feasibility of transporting pupils to the leased 48.34 building or land, conformity of the lease to the laws and rules 48.35 of the state of Minnesota, and the appropriateness of the 48.36 proposed lease to the space needs and the financial condition of 49.1 the district. The commissioner must not authorize a levy under 49.2 this subdivision in an amount greater than the cost to the 49.3 district of renting or leasing a building or land for approved 49.4 purposes. The proceeds of this levy must not be used for 49.5 custodial or other maintenance services. A district may not 49.6 levy under this subdivision for the purpose of leasing or 49.7 renting a district-owned building to itself. 49.8 Sec. 30. Minnesota Statutes 1996, section 124.91, 49.9 subdivision 2, is amended to read: 49.10 Subd. 2. [PRE-JULY 1990 LEASE PURCHASE, INSTALLMENT BUYS.] 49.11 For taxes payable prior to 1998, a district may annually levy 49.12 the amount needed to make payments required by a lease purchase 49.13 agreement, installment purchase agreement, or other deferred 49.14 payment agreement authorized by Minnesota Statutes 1989 49.15 Supplement, section 465.71, if: 49.16 (1) the agreement was approved by the commissioner before 49.17 July 1, 1990, according to Minnesota Statutes 1989 Supplement, 49.18 section 275.125, subdivision 11d; or 49.19 (2) the district levied in 1989 for the payments. 49.20 For fiscal years 1999 and later, the commissioner shall pay 49.21 state aid to each district in the amount needed to make the 49.22 payments authorized by this section. 49.23 Sec. 31. Minnesota Statutes 1996, section 124.91, 49.24 subdivision 5, is amended to read: 49.25 Subd. 5. [INTERACTIVE TELEVISION.] (a) A school district 49.26 with its central administrative office located within economic 49.27 development region one, two, three, four, five, six, seven, 49.28 eight, nine, and ten may apply to the commissioner of children, 49.29 families, and learning for ITV revenue up to the greater of .5 49.30 percent of the adjusted net tax capacity of the district or 49.31 $25,000 for the construction, maintenance, and lease costs of an 49.32 interactive television system for instructional purposes. The 49.33 approval by the commissioner of children, families, and learning 49.34 and the application procedures set forth in subdivision 1 shall 49.35 apply to the revenue in this subdivision. In granting the 49.36 approval, the commissioner must consider whether the district is 50.1 maximizing efficiency through peak use and off-peak use pricing 50.2 structures. The commissioner may not approve any new projects 50.3 after July 1, 1997. 50.4 (b) To obtain ITV revenue, a district may levy an amount 50.5 not to exceed the district's ITV revenue times the lesser of one 50.6 or the ratio of: 50.7 (1) the quotient derived by dividing the adjusted net tax 50.8 capacity of the district for the year before the year the levy 50.9 is certified by the actual pupil units in the district for the 50.10 year to which the levy is attributable; to 50.11 (2) 100 percent of the equalizing factor as defined in 50.12 section 124A.02, subdivision 8, for the year to which the levy 50.13 is attributable. 50.14 (c) A district's ITV aid is the difference between its ITV 50.15 revenue and the ITV levy. 50.16 (d) The revenue in the first year after reorganization for 50.17 a district that has reorganized under section 122.22, 122.23, or 50.18 122.241 to 122.247 shall be the greater of: 50.19 (1) the revenue computed for the reorganized district under 50.20 paragraph (a), or 50.21 (2)(i) for two districts that reorganized, 75 percent of 50.22 the revenue computed as if the districts involved in the 50.23 reorganization were separate, or 50.24 (ii) for three or more districts that reorganized, 50 50.25 percent of the revenue computed as if the districts involved in 50.26 the reorganization were separate. 50.27 (e) The revenue in paragraph (d) is increased by the 50.28 difference between the initial revenue and ITV lease costs for 50.29 leases that had been entered into by the preexisting districts 50.30 on the effective date of the consolidation or combination and 50.31 with a term not exceeding ten years. This increased revenue is 50.32 only available for the remaining term of the lease. However, in 50.33 no case shall the revenue exceed the amount available had the 50.34 preexisting districts received revenue separately. 50.35 Sec. 32. Minnesota Statutes 1996, section 124.91, 50.36 subdivision 7, is amended to read: 51.1 Subd. 7. [LEASE PURCHASE, INSTALLMENT BUYS.] (a) Upon 51.2 application to, and approval by, the commissioner in accordance 51.3 with the procedures and limits in subdivision 1, a district, as 51.4 defined in this subdivision, may: 51.5 (1) purchase real or personal property under an installment 51.6 contract or may lease real or personal property with an option 51.7 to purchase under a lease purchase agreement, by which 51.8 installment contract or lease purchase agreement title is kept 51.9 by the seller or vendor or assigned to a third party as security 51.10 for the purchase price, including interest, if any; and 51.11 (2)annually levyreceive state aid in the amounts 51.12 necessary to pay the district's obligations under the 51.13 installment contract or lease purchase agreement. 51.14 (b) The obligation created by the installment contract or 51.15 the lease purchase agreement must not be included in the 51.16 calculation of net debt for purposes of section 475.53, and does 51.17 not constitute debt under other law. An election is not 51.18 required in connection with the execution of the installment 51.19 contract or the lease purchase agreement. 51.20 (c) Theproceeds of the levy authorized bycommissioner 51.21 shall not authorize state aid under this subdivisionmust notto 51.22 be used to acquire a facility to be primarily used for athletic 51.23 or school administration purposes. 51.24 (d) For the purposes of this subdivision, "district" means: 51.25 (1) a school district required to have a comprehensive plan 51.26 for the elimination of segregation whose plan has been 51.27 determined by the commissioner to be in compliance with the 51.28 state board of education rules relating to equality of 51.29 educational opportunity and school desegregation; or 51.30 (2) a school district that participates in a joint program 51.31 for interdistrict desegregation with a district defined in 51.32 clause (1) if the facility acquired under this subdivision is to 51.33 be primarily used for the joint program. 51.34 (e)Notwithstanding subdivision 1, the prohibition against51.35a levy by a district to lease or rent a district-owned building51.36to itself does not apply to levies otherwise authorized by this52.1subdivision.52.2(f)For the purposes of this subdivision, any references in 52.3 subdivision 1 to building or land shall include personal 52.4 property. 52.5 Sec. 33. Minnesota Statutes 1996, section 124.912, 52.6 subdivision 1, is amended to read: 52.7 Subdivision 1. [STATUTORY OBLIGATIONS.](a)A school 52.8 district may levythe amount authorized for liabilities of52.9dissolved districts pursuant to section 122.45; the amounts52.10necessary to pay the district's obligations under section52.11268.06, subdivision 25; the amounts necessary to pay for job52.12placement services offered to employees who may become eligible52.13for benefits pursuant to section 268.08;the amounts necessary 52.14 to pay the district's obligations under section 127.05; the52.15amounts authorized by section 122.531; the amounts necessary to52.16pay the district's obligations under section 122.533; and for52.17severance pay required by sections 120.08, subdivision 3, and52.18122.535, subdivision 6. 52.19(b) Each year, a member district of an education district52.20that levies under this subdivision must transfer the amount of52.21revenue certified under paragraph (b) to the education district52.22board according to this subdivision. By June 20 and November 3052.23of each year, an amount must be transferred equal to:52.24(1) 50 percent times52.25(2) the amount certified in paragraph (b) minus homestead52.26and agricultural credit aid allocated for that levy according to52.27section 273.1398, subdivision 6.A school district is eligible 52.28 for state aid for the following purposes: 52.29 (1) liabilities for dissolved districts under section 52.30 122.45; 52.31 (2) the amounts necessary to pay the district's obligations 52.32 under section 268.06, subdivision 25; 52.33 (3) the amounts necessary to pay for job placement services 52.34 offered to employees who may become eligible for benefits 52.35 pursuant to section 268.08; 52.36 (4) the amounts authorized by section 122.531; 53.1 (5) the amounts necessary to pay the district's obligations 53.2 under section 122.533; and 53.3 (6) for severance pay required by sections 120.08, 53.4 subdivision 3, and 122.535, subdivision 6. 53.5 The commissioner shall consider all requests for state aid 53.6 under this subdivision and shall, at the commissioner's 53.7 discretion, approve, modify, or disapprove aid amounts. 53.8 Sec. 34. Minnesota Statutes 1996, section 124.912, 53.9 subdivision 3, is amended to read: 53.10 Subd. 3. [RULE COMPLIANCE.] Each year a district that is 53.11 required to implement a plan according to the requirements of 53.12 Minnesota Rules, parts 3535.0200 to 3535.2200,may levyis 53.13 eligible for state aid in an amountnot to exceed a net tax rate53.14ofequal to 2.0 percent times the adjusted net tax capacity of 53.15 the district fortaxes payable in 1991 and thereafterthe 53.16 preceding year. A district thatleviesreceives integration 53.17 revenue according tosubdivision 2 may not levy according53.18tosection 124.312 is not eligible for state aid under this 53.19 subdivision.Notwithstanding section 121.904, the entire amount53.20of this levy shall be recognized as revenue for the fiscal year53.21in which the levy is certified. This levy shall not be53.22considered in computing the aid reduction under section 124.155.53.23 Sec. 35. Minnesota Statutes 1996, section 124.912, 53.24 subdivision 6, is amended to read: 53.25 Subd. 6. [CRIME RELATED COSTS.]For taxes levied in 199153.26and subsequent years, payable in 1992 and subsequent years, each53.27school district may make a levy on all taxable property located53.28within the school district for the purposes specified in this53.29subdivision. The maximum amount which may be levied for all53.30costs under this subdivision shall be equal toState aid for 53.31 crime related costs equals $1 multiplied by the population of 53.32 the school district. For purposes of this subdivision, 53.33 "population" of the school district means the same as contained 53.34 in section 275.14. Theproceeds of the levystate aid must be 53.35 used for reimbursing the cities and counties who contract with 53.36 the school district for the following purposes: (1) to pay the 54.1 costs incurred for the salaries, benefits, and transportation 54.2 costs of peace officers and sheriffs for liaison services in the 54.3 district's middle and secondary schools; (2) to pay the costs 54.4 for a drug abuse prevention program as defined in Minnesota 54.5 Statutes 1991 Supplement, section 609.101, subdivision 3, 54.6 paragraph (f), in the elementary schools; or (3) to pay the 54.7 costs for a gang resistance education training curriculum in the 54.8 middle schools. The school district must initially attempt to 54.9 contract for these services with the police department of each 54.10 city or the sheriff's department of the county within the school 54.11 district containing the school receiving the services. If a 54.12 local police department or a county sheriff's department does 54.13 not wish to provide the necessary services, the district may 54.14 contract for these services with any other police or sheriff's 54.15 department located entirely or partially within the school 54.16 district's boundaries.The levy authorized under this54.17subdivision is not included in determining the school district's54.18levy limitations.54.19 Sec. 36. Minnesota Statutes 1996, section 124.912, 54.20 subdivision 7, is amended to read: 54.21 Subd. 7. [ICE ARENALEVYAID.] (a) Each year, an 54.22 independent school district operating and maintaining an ice 54.23 arena,may levyis eligible for state aid for the net 54.24 operational costs of the ice arena. Thelevyamount of state 54.25 aid may not exceed the net actual costs of operation of the 54.26 arena for the previous year. Net actual costs are defined as 54.27 operating costs less any operating revenues. 54.28 (b) Any school district operating and maintaining an ice 54.29 arena must demonstrate to the satisfaction of the office of 54.30 monitoring in the department of children, families, and learning 54.31 that the district will offer equal sports opportunities for male 54.32 and female students to use its ice arena, particularly in areas 54.33 of access to prime practice time, team support, and providing 54.34 junior varsity and younger level teams for girls' ice sports and 54.35 ice sports offerings. The commissioner shall consider all 54.36 requests for state aid under this subdivision and shall, at the 55.1 commissioner's discretion, approve, modify, or disapprove aid 55.2 amounts. 55.3 Sec. 37. Minnesota Statutes 1996, section 124.914, 55.4 subdivision 1, is amended to read: 55.5 Subdivision 1. [1977 STATUTORY OPERATING DEBT.] (1) In 55.6 each year in which so required by this subdivision, a district 55.7shall make an additional levyis eligible for state aid to 55.8 eliminate its statutory operating debt, determined as of June 55.9 30, 1977, and certified and adjusted by the commissioner.This55.10 State aid payments for fiscal years 1999 and later and the 55.11 previous local levy shall not be made in more than 30 successive 55.12 years and each year before it is made, it must be approved by 55.13 the commissioner and the approval shall specify its 55.14 amount.This levy shall be an amount which is equal to the55.15amount raised by a levy of a net tax rate of 1.66 percent times55.16the adjusted net tax capacity of the district for the preceding55.17year for taxes payable in 1991 and thereafter; provided that in55.18the last year in which the district is required to make this55.19levy, it shall levy an amount not to exceed the amount raised by55.20a levy of a net tax rate of 1.66 percent times the adjusted net55.21tax capacity of the district for the preceding year for taxes55.22payable in 1991 and thereafterThe state aid for each district 55.23 equals the amount raised by the levy for this purpose for taxes 55.24 payable in 1997. When the sum of the cumulativelevies made55.25pursuantrevenue received according to this subdivision and 55.26 transfers made according to section 121.912, subdivision 4, 55.27 equals an amount equal to the statutory operating debt of the 55.28 district, thelevystate aid shall be discontinued. 55.29 (2) The district shall establish a special account in the 55.30 general fund which shall be designated "appropriated fund 55.31 balance reserve account for purposes of reducing statutory 55.32 operating debt" on its books and records. This account shall 55.33 reflect thelevyrevenue authorized pursuant to this subdivision. 55.34 The proceeds of thislevyrevenue shall be used only for cash 55.35 flow requirements and shall not be used to supplement district 55.36 revenues or income for the purposes of increasing the district's 56.1 expenditures or budgets. 56.2 (3)Any district which is required to levy pursuant to this56.3subdivision shall certify the maximum levy allowable under56.4section 124A.23, subdivision 2, in that same year.56.5(4)Each district shall make permanent fund balance 56.6 transfers so that the total statutory operating debt of the 56.7 district is reflected in the general fund as of June 30, 1977. 56.8 Sec. 38. Minnesota Statutes 1996, section 124.914, 56.9 subdivision 2, is amended to read: 56.10 Subd. 2. [1983 OPERATING DEBT.] (1) Each year, a 56.11 districtmay make an additional levyis eligible for state aid 56.12 to eliminate a deficit in the net unappropriated operating funds 56.13 of the district, determined as of June 30, 1983, and certified 56.14 and adjusted by the commissioner. Thislevy may in each year be56.15an amount not to exceed the amount raised by a levy of a net tax56.16rate of 1.85 percent times the adjusted net tax capacity for56.17taxes payable in 1991 and thereafter of the district for the56.18preceding year as determined by the commissionerstate aid for 56.19 each district equals the amount raised by the district's levy 56.20 for this purpose for taxes payable in 1997. However, the total 56.21 amount of thislevyrevenue for all years it ismadereceived 56.22 shall not exceed the lesser of (a) the amount of the deficit in 56.23 the net unappropriated operating funds of the district as of 56.24 June 30, 1983, or (b) the amount of the aid reduction, according 56.25 to Laws 1981, Third Special Session chapter 2, article 2, 56.26 section 2, but excluding clauses (l), (m), (n), (o), and (p), 56.27 and Laws 1982, Third Special Session chapter 1, article 3, 56.28 section 6, to the district in fiscal year 1983. When the 56.29 cumulativelevies made pursuantrevenue received according to 56.30 this subdivisionequalequals the total amount permitted by this 56.31 subdivision, thelevystate aid shall be discontinued. 56.32 (2) The proceeds of thislevystate aid shall be used only 56.33 for cash flow requirements and shall not be used to supplement 56.34 district revenues or income for the purposes of increasing the 56.35 district's expenditures or budgets. 56.36(3) Any district that levies pursuant to this subdivision57.1shall certify the maximum levy allowable under section 124A.23,57.2subdivisions 2 and 2a, in that same year.57.3 Sec. 39. Minnesota Statutes 1996, section 124.914, 57.4 subdivision 3, is amended to read: 57.5 Subd. 3. [1985 OPERATING DEBT.] (1) Each year, a 57.6 districtmay levyis eligible for state aid to eliminate a 57.7 deficit in the net unappropriated balance in the general fund of 57.8 the district, determined as of June 30, 1985, and certified and 57.9 adjusted by the commissioner. Each yearthis levy may be an57.10amount not to exceed the amount raised by a levy of a net tax57.11rate of 1.85 percent times the adjusted net tax capacity for57.12taxes payable in 1991 and thereafter of the district for the57.13preceding yearthe state aid for each district equals the amount 57.14 raised by the district's levy for this purpose for taxes payable 57.15 in 1997. However, the total amount of thislevyrevenue for all 57.16 years it ismadereceived shall not exceed the amount of the 57.17 deficit in the net unappropriated balance in the general fund of 57.18 the district as of June 30, 1985. When the cumulativelevies57.19made pursuant torevenue received under this subdivisionequal57.20 equals the total amount permitted by this subdivision, thelevy57.21 state aid shall be discontinued. 57.22 (2) A district, if eligible, maylevyreceive revenue under 57.23 this subdivision or subdivision 2 but not both. 57.24 (3) The proceeds of thislevyrevenue shall be used only 57.25 for cash flow requirements and shall not be used to supplement 57.26 district revenues or income for the purposes of increasing the 57.27 district's expenditures or budgets. 57.28(4) Any district that levies pursuant to this subdivision57.29shall certify the maximum levy allowable under section 124A.23,57.30subdivision 2, in that same year.57.31 Sec. 40. Minnesota Statutes 1996, section 124.914, 57.32 subdivision 4, is amended to read: 57.33 Subd. 4. [1992 OPERATING DEBT.] (a) Fortaxes payable for57.34calendar year 2003fiscal year 2004 and earlier, a district that 57.35 has filed a plan pursuant to section 121.917, subdivision 4,may57.36levyis eligible for state aid, with the approval of the 58.1 commissioner, to eliminate a deficit in the net unappropriated 58.2 balance in the operating funds of the district, determined as of 58.3 June 30, 1992, and certified and adjusted by the commissioner. 58.4 Each year thislevy may be an amount not tostate aid shall not 58.5 exceed the lesser of: 58.6 (1) an amount raised bya levy of a net tax rate of one58.7percent times the adjusted net tax capacitythe district's levy 58.8 for this purpose for taxes payable in 1997; or 58.9 (2) $100,000. 58.10 This amount shall be reduced by referendum revenue authorized 58.11 under section 124A.03 pursuant to the plan filed under section 58.12 121.917. However, the total amount of thislevyrevenue for all 58.13 years it ismadereceived shall not exceed the amount of the 58.14 deficit in the net unappropriated balance in the operating funds 58.15 of the district as of June 30, 1992. When the cumulativelevies58.16made pursuant torevenue received under this subdivisionequal58.17 equals the total amount permitted by this subdivision, thelevy58.18 state aid shall be discontinued. 58.19 (b) A district, if eligible, maylevyreceive revenue under 58.20 this subdivision or subdivision 2 or 3, or under section 58.21 122.531, subdivision 4a, or Laws 1992, chapter 499, article 7, 58.22 sections 16 or 17, but not under more than one. 58.23 (c) The proceeds of thislevyrevenue shall be used only 58.24 for cash flow requirements and shall not be used to supplement 58.25 district revenues or income for the purposes of increasing the 58.26 district's expenditures or budgets. 58.27(d) Any district that levies pursuant to this subdivision58.28shall certify the maximum levy allowable under section 124A.23,58.29subdivision 2, in that same year.58.30 Sec. 41. Minnesota Statutes 1996, section 124.916, 58.31 subdivision 1, is amended to read: 58.32 Subdivision 1. [HEALTH INSURANCE.] (a) A school 58.33 districtmay levyis eligible for state aid in the amount 58.34 necessary to make employer contributions for insurance for 58.35 retired employees under this subdivision.Notwithstanding58.36section 121.904, 50 percent of the amount levied shall be59.1recognized as revenue for the fiscal year in which the levy is59.2certified. This levy shall not be considered in computing the59.3aid reduction under section 124.155.59.4 (b) The school board of a joint vocational technical 59.5 district formed under sections 136C.60 to 136C.69 and the school 59.6 board of a school district may provide employer-paid hospital, 59.7 medical, and dental benefits to a person who: 59.8 (1) is eligible for employer-paid insurance under 59.9 collective bargaining agreements or personnel plans in effect on 59.10 June 30, 1992; 59.11 (2) has at least 25 years of service credit in the public 59.12 pension plan of which the person is a member on the day before 59.13 retirement or, in the case of a teacher, has a total of at least 59.14 25 years of service credit in the teachers retirement 59.15 association, a first-class city teacher retirement fund, or any 59.16 combination of these; 59.17 (3) upon retirement is immediately eligible for a 59.18 retirement annuity; 59.19 (4) is at least 55 and not yet 65 years of age; and 59.20 (5) retires on or after May 15, 1992, and before July 21, 59.21 1992. 59.22 A school board paying insurance under this subdivision may 59.23 not exclude any eligible employees. 59.24 (c) An employee who is eligible both for the health 59.25 insurance benefit under this subdivision and for an early 59.26 retirement incentive under a collective bargaining agreement or 59.27 personnel plan established by the employer must select either 59.28 the early retirement incentive provided under the collective 59.29 bargaining agreement personnel plan or the incentive provided 59.30 under this subdivision, but may not receive both. For purposes 59.31 of this subdivision, a person retires when the person terminates 59.32 active employment and applies for retirement benefits. The 59.33 retired employee is eligible for single and dependent coverages 59.34 and employer payments to which the person was entitled 59.35 immediately before retirement, subject to any changes in 59.36 coverage and employer and employee payments through collective 60.1 bargaining or personnel plans, for employees in positions 60.2 equivalent to the position from which the employee retired. The 60.3 retired employee is not eligible for employer-paid life 60.4 insurance. Eligibility ceases when the retired employee attains 60.5 the age of 65, or when the employee chooses not to receive the 60.6 retirement benefits for which the employee has applied, or when 60.7 the employee is eligible for employer-paid health insurance from 60.8 a new employer. Coverages must be coordinated with relevant 60.9 health insurance benefits provided through the federally 60.10 sponsored Medicare program. 60.11 (d) Unilateral implementation of this section by a public 60.12 employer is not an unfair labor practice for purposes of chapter 60.13 179A. The authority provided in this subdivision for an 60.14 employer to pay health insurance costs for certain retired 60.15 employees is not subject to the limits in section 179A.20, 60.16 subdivision 2a. 60.17 (e) If a school districtleviesreceives revenue according 60.18 to this subdivision, it may not alsolevyreceive revenue 60.19 according to section 122.531, subdivision 9, for eligible 60.20 employees. 60.21 Sec. 42. Minnesota Statutes 1996, section 124.916, 60.22 subdivision 2, is amended to read: 60.23 Subd. 2. [RETIRED EMPLOYEE HEALTH BENEFITS.] Fortaxes60.24payable in 1996, 1997, 1998, andfiscal years 1999 and 2000 60.25 only, a school districtmay levyis eligible for state aid in an 60.26 amount up to the amount the district is required by the 60.27 collective bargaining agreement in effect on March 30, 1992, to 60.28 pay for health insurance or unreimbursed medical expenses for 60.29 licensed and nonlicensed employees who have terminated services 60.30 in the employing district and withdrawn from active teaching 60.31 service or other active service, as applicable, before July 1, 60.32 1992. The total amount of thelevystate aid for a district 60.33 each year may not exceed $300,000. 60.34Notwithstanding section 121.904, 50 percent of the proceeds60.35of this levy shall be recognized in the fiscal year in which it60.36is certified.61.1 Sec. 43. Minnesota Statutes 1996, section 124.916, 61.2 subdivision 3, is amended to read: 61.3 Subd. 3. [RETIREMENTLEVIESAID.](1) In addition to the61.4excess levy authorized in 1976 any district within a city of the61.5first class which was authorized in 1975 to make a retirement61.6levy under Minnesota Statutes 1974, section 275.127 and chapter61.7422A may levy an amount per pupil unit which is equal to the61.8amount levied in 1975 payable 1976, under Minnesota Statutes61.91974, section 275.127 and chapter 422A, divided by the number of61.10pupil units in the district in 1976-1977.61.11(2) In 1979 and each year thereafter, any district which61.12qualified in 1976 for an extra levy under paragraph (1) shall be61.13allowed to levy the same amount as levied for retirement in 197861.14under this clause reduced each year by ten percent of the61.15difference between the amount levied for retirement in 197161.16under Minnesota Statutes 1971, sections 275.127 and 422.01 to61.17422.54 and the amount levied for retirement in 1975 under61.18Minnesota Statutes 1974, section 275.127 and chapter 422A.61.19(3) In 1991 and each year thereafter, a district to which61.20this subdivision applies may levy an additional amount required61.21for contributions to the Minneapolis employees retirement fund61.22as a result of the maximum dollar amount limitation on state61.23contributions to the fund imposed under section 422A.101,61.24subdivision 3. The additional levy shall not exceed the most61.25recent amount certified by the board of the Minneapolis61.26employees retirement fund as the district's share of the61.27contribution requirement in excess of the maximum state61.28contribution under section 422A.101, subdivision 3.61.29(4) For taxes payable in 1994 and thereafter, special61.30school district No. 1, Minneapolis, and independent school61.31district No. 625, St. Paul, may levy for the increase in the61.32employer retirement fund contributions, under Laws 1992, chapter61.33598, article 5, section 1. Notwithstanding section 121.904, the61.34entire amount of this levy may be recognized as revenue for the61.35fiscal year in which the levy is certified. This levy shall not61.36be considered in computing the aid reduction under section62.1124.155.62.2 (1) For fiscal years 1999 and later, a district is eligible 62.3 for state aid equal to the amount of its retirement levies 62.4 certified under this subdivision for taxes payable in 1997. 62.5(5)(2) If the employer retirement fund contributions under 62.6 section 354A.12, subdivision 2a, are increased for fiscal year 62.7 1994 or later fiscal years, special school district No. 1, 62.8 Minneapolis, and independent school district No. 625, St. Paul, 62.9may levy in payable 1994 or later an amountare eligible for 62.10 state aid equal to the amount derived by applying the net 62.11 increase in the employer retirement fund contribution rate of 62.12 the respective teacher retirement fund association between 62.13 fiscal year 1993 and the fiscal year beginning in the year after 62.14 the levy is certified to the total covered payroll of the 62.15 applicable teacher retirement fund association.Notwithstanding62.16section 121.904, the entire amount of this levy may be62.17recognized as revenue for the fiscal year in which the levy is62.18certified. This levy shall not be considered in computing the62.19aid reduction under section 124.155. If an applicable school62.20district levies under this paragraph, they may not levy under62.21paragraph (4).62.22(6)(3) In addition to thelevystate aid authorized under 62.23 paragraph(5)(2), special school district No. 1, 62.24 Minneapolis,may also levy payable in 1997 or lateris also 62.25 eligible for additional state aid in an amount equal to the 62.26 contributions undersectionsections 423A.02, subdivision 3, and 62.27may also levy in payable 1994 or later an amount equal to the62.28state aid contribution under section354A.12, subdivision 3b. 62.29 Independent school district No. 625, St. Paul,may levy payable62.30in 1997 oris eligible for additional state aid in fiscal years 62.31 1999 and later in an amount equal to the supplemental 62.32 contributions under section 423A.02, subdivision 62.33 3.Notwithstanding section 121.904, the entire amount of these62.34levies may be recognized as revenue for the fiscal year in which62.35the levy is certified. These levies shall not be considered in62.36computing the aid reduction under section 124.155.63.1 Sec. 44. Minnesota Statutes 1996, section 124.916, 63.2 subdivision 4, is amended to read: 63.3 Subd. 4. [MINNEAPOLIS HEALTH INSURANCE SUBSIDY.] Each year 63.4 special school district No. 1, Minneapolis,may make an63.5additional levy not to exceedis eligible for state aid equal to 63.6 the amount raised by a net tax rate of .10 percent times the 63.7 adjusted net tax capacityfor taxes payable in 1991 and63.8thereafterof the property in the district forthe preceding63.9 assessment year 1996. The proceeds may be used only to 63.10 subsidize health insurance costs for eligible teachers as 63.11 provided in this section. 63.12 "Eligible teacher" means a retired teacher who was a basic 63.13 member of the Minneapolis teachers retirement fund association, 63.14 who retired before May 1, 1974, or who had 20 or more years of 63.15 basic member service in the Minneapolis teacher retirement fund 63.16 association and retired before June 30, 1983, and who is not 63.17 eligible to receive the hospital insurance benefits of the 63.18 federal Medicare program of the Social Security Act without 63.19 payment of a monthly premium. The district shall notify 63.20 eligible teachers that a subsidy is available. To obtain a 63.21 subsidy, an eligible teacher must submit to the school district 63.22 a copy of receipts for health insurance premiums paid. The 63.23 school district shall disburse the health insurance premium 63.24 subsidy to each eligible teacher according to a schedule 63.25 determined by the district, but at least annually. An eligible 63.26 teacher may receive a subsidy up to an amount equal to the 63.27 lesser of 90 percent of the cost of the eligible teacher's 63.28 health insurance or up to 90 percent of the cost of the number 63.29 two qualified plan of health coverage for individual policies 63.30 made available by the Minnesota comprehensive health association 63.31 under chapter 62E. 63.32 If funds remaining from the previous year's health 63.33 insurance subsidylevyrevenue, minus the previous year's 63.34 required subsidy amount, are sufficient to pay the estimated 63.35 current year subsidy, thelevystate aid must be discontinued 63.36 until the remaining funds are estimated by the school board to 64.1 be insufficient to pay the subsidy. 64.2 This subdivision does not extend benefits to teachers who 64.3 retire after June 30, 1983, and does not create a contractual 64.4 right or claim for altering the benefits in this subdivision. 64.5 This subdivision does not restrict the school district's right 64.6 to modify or terminate coverage under this subdivision. 64.7 Sec. 45. Minnesota Statutes 1996, section 124.918, 64.8 subdivision 8, is amended to read: 64.9 Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 64.10 Reductions in levies pursuant to section 124.918, subdivision 1, 64.11 and section 273.138, shall be made prior to the reductions in 64.12 clause (2). 64.13 (2) Notwithstanding any other law to the contrary, 64.14 districts which received payments pursuant to sections 298.018; 64.15 298.23 to 298.28, except an amount distributed under section 64.16 298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 64.17 298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 64.18 upon severed mineral values, or recognized revenue pursuant to 64.19 section 477A.15; shall not include a portion of these aids in 64.20 their permissible levies pursuant to those sections, but instead 64.21 shall reduce the permissible levies authorized by this chapter 64.22 and chapter 124A by the greater of the following: 64.23 (a) an amount equal to 50 percent of the total dollar 64.24 amount of the payments received pursuant to those sections or 64.25 revenue recognized pursuant to section 477A.15 in the previous 64.26 fiscal year; or 64.27 (b) an amount equal to the total dollar amount of the 64.28 payments received pursuant to those sections or revenue 64.29 recognized pursuant to section 477A.15 in the previous fiscal 64.30 year less the product of the same dollar amount of payments or 64.31 revenue times the ratio of the maximum levy allowed the district 64.32 under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 64.33 124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 64.34 subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 64.35 subdivision 5a, to the total levy allowed the district under 64.36 this section and Minnesota Statutes 1986, sections 124A.03, 65.1 124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 65.2 subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 65.3 5a, and 124A.20, subdivision 2, for levies certified in 1986. 65.4 (3)No reduction pursuant to this subdivision shall reduce65.5the levy made by the district pursuant to section 124A.23, to an65.6amount less than the amount raised by a levy of a net tax rate65.7of 6.82 percent times the adjusted net tax capacity for taxes65.8payable in 1990 and thereafter of that district for the65.9preceding year as determined by the commissioner. The amount of65.10any increased levy authorized by referendum pursuant to section65.11124A.03, subdivision 2, shall not be reduced pursuant to this65.12subdivision.The amount of any levy authorized by 65.13 section124.912, subdivision 1,124.97 to make payments for 65.14 bonds issued and for interest thereon, shall not be reduced 65.15 pursuant to this subdivision. 65.16 (4) Before computing the reduction pursuant to this 65.17 subdivision of the capital expenditure facilities levy 65.18 authorized by section 124.243, the capital expenditure equipment 65.19 levy authorized by section 124.244, the health and safety levy 65.20 authorized by sections 124.83 and 124.91, subdivision 6, the 65.21 commissioner shall ascertain from each affected school district 65.22 the amount it proposes to levy under each section or 65.23 subdivision. The reduction shall be computed on the basis of 65.24 the amount so ascertained. 65.25 (5) Notwithstanding any law to the contrary, any amounts 65.26 received by districts in any fiscal year pursuant to sections 65.27 298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 65.28 298.405; or any law imposing a tax on severed mineral values; 65.29 and not deducted from general education aid pursuant to section 65.30 124A.035, subdivision 5, clause (2), and not applied to reduce 65.31 levies pursuant to this subdivision shall be paid by the 65.32 district to the St. Louis county auditor in the following amount 65.33 by March 15 of each year, the amount required to be subtracted 65.34 from the previous fiscal year's general education aid pursuant 65.35 to section 124A.035, subdivision 5, which is in excess of the 65.36 general education aid earned for that fiscal year. The county 66.1 auditor shall deposit any amounts received pursuant to this 66.2 clause in the St. Louis county treasury for purposes of paying 66.3 the taconite homestead credit as provided in section 273.135. 66.4 Sec. 46. Minnesota Statutes 1996, section 124A.22, 66.5 subdivision 1, is amended to read: 66.6 Subdivision 1. [GENERAL EDUCATION REVENUE.](a) For fiscal66.7year 1996, the general education revenue for each district66.8equals the sum of the district's basic revenue, compensatory66.9education revenue, training and experience revenue, secondary66.10sparsity revenue, elementary sparsity revenue, and supplemental66.11revenue.66.12(b)For fiscal year 1997 and thereafter, the general 66.13 education revenue for each district equals the sum of the 66.14 district's basic revenue, compensatory education revenue, 66.15 secondary sparsity revenue, elementary sparsity revenue, 66.16 transportation sparsity, total operating capital revenue, 66.17 transition revenue, and supplemental revenue. For fiscal years 66.18 1999 and later, general education revenue is provided through 66.19 state aid. 66.20 Sec. 47. Minnesota Statutes 1996, section 124A.292, 66.21 subdivision 2, is amended to read: 66.22 Subd. 2. [REVENUE.] Staff development incentive revenue is 66.23 equal to the number of teachers at the site times $25. Staff 66.24 development incentive revenue is provided through state aid. 66.25 Sec. 48. Minnesota Statutes 1996, section 298.28, 66.26 subdivision 4, is amended to read: 66.27 Subd. 4. [SCHOOL DISTRICTS; REFERENDUM AID.](a) 27.566.28cents per taxable ton plus the increase provided in paragraph66.29(d) must be allocated to qualifying school districts to be66.30distributed, based upon the certification of the commissioner of66.31revenue, under paragraphs (b) and (c).66.32(b) 5.5 cents per taxable ton must be distributed to the66.33school districts in which the lands from which taconite was66.34mined or quarried were located or within which the concentrate66.35was produced. The distribution must be based on the66.36apportionment formula prescribed in subdivision 2.67.1(c)(i) 22 cents per taxable ton, less any amount67.2distributed under paragraph (e), shall be distributed to a group67.3of school districts comprised of those school districts in which67.4the taconite was mined or quarried or the concentrate produced67.5or in which there is a qualifying municipality as defined by67.6section 273.134 in direct proportion to school district indexes67.7as follows: for each school district, its pupil units67.8determined under section 124.17 for the prior school year shall67.9be multiplied by the ratio of the average adjusted net tax67.10capacity per pupil unit for school districts receiving aid under67.11this clause as calculated pursuant to chapter 124A for the67.12school year ending prior to distribution to the adjusted net tax67.13capacity per pupil unit of the district. Each district shall67.14receive that portion of the distribution which its index bears67.15to the sum of the indices for all school districts that receive67.16the distributions.67.17(ii) Notwithstanding clause (i), each school district that67.18receives a distribution under sections 298.018; 298.23 to67.19298.28, exclusive of any amount received under this clause;67.20298.34 to 298.39; 298.391 to 298.396; 298.405; or any law67.21imposing a tax on severed mineral values that is less than the67.22amount of its levy reduction under section 124.918, subdivision67.238, for the second year prior to the year of the distribution67.24shall receive a distribution equal to the difference; the amount67.25necessary to make this payment shall be derived from67.26proportionate reductions in the initial distribution to other67.27school districts under clause (i).67.28(d) Any school district described in paragraph (c) where a67.29levy increase pursuant to section 124A.03, subdivision 2, is67.30authorized by referendum, shall receive a distribution according67.31to the following formula. In 1994, the amount distributed per67.32ton shall be equal to the amount per ton distributed in 199167.33under this paragraph increased in the same proportion as the67.34increase between the fourth quarter of 1989 and the fourth67.35quarter of 1992 in the implicit price deflator as defined in67.36section 298.24, subdivision 1. On July 15, 1995, and subsequent68.1years, the increase over the amount established for the prior68.2year shall be determined according to the increase in the68.3implicit price deflator as provided in section 298.24,68.4subdivision 1. Each district shall receive the product of:68.5(i) $175 times the pupil units identified in section68.6124.17, subdivision 1, enrolled in the second previous year or68.7the 1983-1984 school year, whichever is greater, less the68.8product of 1.8 percent times the district's taxable net tax68.9capacity in the second previous year; times68.10(ii) the lesser of:68.11(A) one, or68.12(B) the ratio of the sum of the amount certified pursuant68.13to section 124A.03, subdivision 1g, in the previous year, plus68.14the amount certified pursuant to section 124A.03, subdivision68.151i, in the previous year, plus the referendum aid according to68.16section 124A.03, subdivision 1h, for the current year, plus an68.17amount equal to the reduction under section 124A.03, subdivision68.183b, to the product of 1.8 percent times the district's taxable68.19net tax capacity in the second previous year.68.20If the total amount provided by paragraph (d) is68.21insufficient to make the payments herein required then the68.22entitlement of $175 per pupil unit shall be reduced uniformly so68.23as not to exceed the funds available. Any amounts received by a68.24qualifying school district in any fiscal year pursuant to68.25paragraph (d) shall not be applied to reduce general education68.26aid which the district receives pursuant to section 124A.23 or68.27the permissible levies of the district. Any amount remaining68.28after the payments provided in this paragraph shall be paid to68.29the commissioner of iron range resources and rehabilitation who68.30shall deposit the same in the taconite environmental protection68.31fund and the northeast Minnesota economic protection trust fund68.32as provided in subdivision 11.68.33 A school district that received aid in fiscal year 1999 68.34 under this section is eligible for a reduction of one percentage 68.35 point in its income tax surtax rate under section 124A.038. 68.36 Each year, the school district shall receive an aid amount equal 69.1 to one percentage point of its income tax surtax for that year 69.2 and its surtax rate must be lowered by that amount. 69.3 Each district receiving money according to this paragraph 69.4 shall reserve $25 times the number of pupil units in the 69.5 district. It may use the money for early childhood programs or 69.6 for outcome-based learning programs that enhance the academic 69.7 quality of the district's curriculum. The outcome-based 69.8 learning programs must be approved by the commissioner of 69.9 children, families, and learning. 69.10(e) There shall be distributed to any school district the69.11amount which the school district was entitled to receive under69.12section 298.32 in 1975.69.13 Sec. 49. Minnesota Statutes 1996, section 298.28, is 69.14 amended by adding a subdivision to read: 69.15 Subd. 4a. [SCHOOL DISTRICT LEVY REDUCTION.] For taxes 69.16 payable in 1999 and later, a school district's levy reduction 69.17 under section 124.918, subdivision 8, is equal to the reduction 69.18 for taxes payable in 1998 times the ratio of the taxable tons in 69.19 the current year to the taxable tons in payable year 1998. 69.20 Sec. 50. Minnesota Statutes 1996, section 298.28, is 69.21 amended by adding a subdivision to read: 69.22 Subd. 4b. [SCHOOL DISTRICT AID REDUCTION.] A school 69.23 district's taconite aid reduction to general education aid is 69.24 equal to its aid reduction for fiscal year 1999 times the ratio 69.25 of the taxable tons in the current payable year to the taxable 69.26 tons in the payable year 1998. 69.27 Sec. 51. [REPEALER.] 69.28 Subdivision 1. [FISCAL YEAR 2000.] Minnesota Statutes 69.29 1996, sections 124.2134; 124.225, subdivisions 1, 3a, 7a, 7b, 69.30 7d, 7e, 7f, 8a, 8k, 8l, 8m, 9, 10, 13, 14, 15, 16, and 17; 69.31 124.226; 124.2442; 124.2601, subdivisions 4, 5, and 6; 124.2711, 69.32 subdivisions 2a and 3; 124.2713, subdivisions 6, 6a, 6b, and 7; 69.33 124.2715, subdivisions 2 and 3; 124.2716, subdivisions 3 and 4; 69.34 124.2725, subdivisions 3, 4, 5, and 7; 124.2727, subdivisions 69.35 6b, 6c, and 9; 124.314, subdivision 2; 124.321; 124.91, 69.36 subdivision 4; 124.912, subdivision 2; 124A.029; 124A.03, 70.1 subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, 1i, 2, 2a, 2b, 3b, and 70.2 3c; 124A.0311; 124A.22, subdivisions 4a, 4b, 8a, 8b, 13d, and 70.3 13e; 124A.23, subdivisions 1, 2, 3, and 4; 124A.26, subdivisions 70.4 2 and 3; 124A.292, subdivisions 3 and 4; 124A.697; 124A.698; 70.5 124A.70, subdivisions 1, 2, 3a, and 5; 124A.71; 124A.711; 70.6 124A.72; and 124A.73, are repealed for revenue for fiscal year 70.7 2000. 70.8 Subd. 2. [JULY 1, 1997.] Laws 1992, chapter 499, article 70.9 7, section 31, is repealed July 1, 1997. 70.10 Sec. 52. [EFFECTIVE DATE.] 70.11 Sections 1 to 51 are effective July 1, 1997. 70.12 ARTICLE 3 70.13 SCHOOL DISTRICT INCOME TAX SURTAX 70.14 Section 1. Minnesota Statutes 1996, section 124.918, is 70.15 amended by adding a subdivision to read: 70.16 Subd. 9. [INCOME TAX LIABILITY.] No later than October 1 70.17 of each year, the commissioner of children, families, and 70.18 learning shall report to each school district the preliminary 70.19 aggregate individual income tax liability for that district for 70.20 the previous year, as reported by the commissioner of revenue. 70.21 Sec. 2. [124A.038] [DISCRETIONARY REVENUE.] 70.22 Subdivision 1. [INCOME TAX SURTAX.] A school district may 70.23 hold a referendum under subdivision 2 to approve an income tax 70.24 surtax. Each one percent rate up to five, approved by the 70.25 taxpayers under subdivision 2, results in revenues of $100 per 70.26 pupil unit for each year the surtax is in place. The rate 70.27 approved in excess of five percent results in revenues 70.28 determined by the yield of the surtax on the district's 70.29 taxpayers. The surtax rate must be expressed as a whole number. 70.30 Subd. 2. [REFERENDUM.] (a) A referendum to impose an 70.31 income tax surtax may be called by the school board or shall be 70.32 called by the school board upon written petition of qualified 70.33 voters of the district. The referendum shall be conducted on 70.34 the first Tuesday after the first Monday in November in the 70.35 calendar year before the tax year in which the surtax, if 70.36 approved, will first be applied. The ballot shall state the 71.1 proposed surtax rate as a percentage of Minnesota individual 71.2 income tax liability under chapter 290. The ballot may state 71.3 that an existing surtax is expiring or, in the case of 71.4 referendum authority converted to discretionary revenue under 71.5 subdivision 6, that a surtax must be approved by the voters to 71.6 continue at its current rate. The ballot shall designate the 71.7 specific number of years, not to exceed ten, for which the 71.8 surtax applies. The ballot may contain a textual portion with 71.9 the information required in this subdivision and a question 71.10 stating substantially the following: 71.11 "Shall an income tax surtax proposed by (petition to) the 71.12 board of .........., independent school district No. ...., be 71.13 approved?" 71.14 If approved, the surtax rate is authorized for the number 71.15 of years stated on the ballot, not to exceed ten, beginning in 71.16 the year after the referendum, or until revoked or reduced by 71.17 the voters of the district at a subsequent referendum. 71.18 (b) The school board shall prepare and deliver by first 71.19 class mail a notice of the referendum and the proposed income 71.20 tax surtax to each residential address in the school district at 71.21 least 15 days, but no more than 30 days, prior to the day of the 71.22 referendum. The notice must project the anticipated amount of 71.23 income tax increase in annual dollars and annual percentages for 71.24 typical family incomes within the school district. The school 71.25 board shall make these projections by applying the proposed 71.26 surtax rate to the preliminary aggregate individual income tax 71.27 liability in the school district in the previous year, as 71.28 reported by the commissioner of revenue. 71.29 The notice for a referendum may state that an existing 71.30 income tax surtax is expiring and project the anticipated amount 71.31 of increase over the existing discretionary income tax or 71.32 referendum property tax, if any, in annual dollars and annual 71.33 percentages for typical family incomes within the school 71.34 district. 71.35 The notice must include the following statement: "Passage 71.36 of this referendum will result in an increase in your individual 72.1 income taxes." 72.2 (c) A referendum on the question of revoking or reducing 72.3 the surtax rate authorized under paragraph (a) may be called by 72.4 the school board and shall be called by the school board upon 72.5 the written petition of qualified voters of the district. A 72.6 referendum to revoke or reduce the surtax rate must be based 72.7 upon the surtax rate that was stated in the initial 72.8 authorization. Revenue resulting from a surtax approved by the 72.9 voters of the district according to paragraph (a) must be 72.10 received at least once before it is subject to a referendum on 72.11 its revocation or reduction for subsequent years. Only one 72.12 revocation or reduction referendum may be held to revoke or 72.13 reduce referendum revenue for any specific year and for years 72.14 thereafter. 72.15 (d) A petition authorized by paragraph (a) or (c) is 72.16 effective if signed by a number of qualified voters in excess of 72.17 ten percent of the number of voters of the school district who 72.18 voted in the most recent November election held during an 72.19 even-numbered year. A referendum invoked by petition must be 72.20 held on the date specified in paragraph (a). 72.21 (e) The approval of 50 percent plus one of those voting on 72.22 the question is required to pass a referendum authorized by this 72.23 subdivision. 72.24 (f) At least 15 days prior to the day of the referendum, 72.25 the district shall submit a copy of the notice required under 72.26 paragraph (b) to the commissioner of children, families, and 72.27 learning. Within 15 days after the results of the referendum 72.28 have been certified by the school board, or in the case of a 72.29 recount, the certification of the results of the recount by the 72.30 canvassing board, the district shall notify the commissioner of 72.31 the results of the referendum. 72.32 Subd. 3. [REVENUE.] A school district shall receive 72.33 discretionary revenue aid equal to the product of its income tax 72.34 surtax rate approved under subdivision 2 and its income tax 72.35 liability for that year. 72.36 Subd. 4. [REVENUE USE.] Discretionary revenue aid must be 73.1 deposited either in the district's general fund or capital 73.2 expenditure fund. 73.3 Subd. 5. [ANNUAL AID APPROPRIATION.] There is annually 73.4 appropriated from the general fund to the commissioner of 73.5 children, families, and learning the amount necessary for 73.6 discretionary revenue aid. The amount shall be reduced by the 73.7 amount of any money specifically appropriated for the same 73.8 purpose in any year from any state fund. 73.9 Subd. 6. [CONVERSION OF REFERENDUM AUTHORITY TO 73.10 DISCRETIONARY REVENUE.] (a) For fiscal year 2000, a school 73.11 district is authorized to convert its entire referendum revenue 73.12 amount to an income tax surtax. For discretionary revenue 73.13 amounts up to $500 per pupil unit, the discretionary revenue 73.14 amount shall be rounded to the nearest $100 per pupil unit 73.15 amount. Each $100 increment of surtax, up to $500 per pupil 73.16 unit, shall result in a surtax rate of one percent. If the 73.17 district has discretionary revenue authority in excess of $500 73.18 per pupil unit and if the district intends to exercise that 73.19 authority, then the district's surtax rate shall be increased 73.20 until the district reaches its maximum authority or its surtax 73.21 rate reaches nine percent, whichever is less. Any amount in 73.22 excess of nine percent shall be paid in state aid. 73.23 (b) For fiscal year 2001, if the district's surtax rate 73.24 would exceed nine percent, the district must conduct an election 73.25 by November 2000 in order to approve any surtax amounts in 73.26 excess of nine percent. If the district does not have an 73.27 election, or if the ballot question is not approved, the 73.28 district's maximum surtax rate for fiscal year 2001 is limited 73.29 to nine percent. 73.30 (c) For fiscal year 2002, if the district's surtax rate 73.31 would exceed seven percent and the district has not yet held a 73.32 discretionary revenue referendum under subdivision 2, the 73.33 district must conduct an election by November 2001, in order to 73.34 approve any surtax amounts in excess of seven percent. If the 73.35 district does not have an election, or if the ballot question is 73.36 not approved, the district's maximum surtax rate for fiscal year 74.1 2002 is limited to seven percent. 74.2 (d) For fiscal year 2003, if the district's surtax rate 74.3 would exceed five percent and the district has not yet held a 74.4 discretionary revenue referendum under subdivision 2, the 74.5 district must conduct an election by November 2002 in order to 74.6 approve any surtax amounts in excess of five percent. If the 74.7 district does not have an election, or if the ballot question is 74.8 not approved, the district's maximum surtax rate for fiscal year 74.9 2003 and following years is limited to five percent. 74.10 Sec. 3. [290.0621] [SCHOOL REFERENDUM TAX.] 74.11 Subdivision 1. [IMPOSITION.] In addition to all other 74.12 taxes imposed by this chapter, a tax is imposed on individuals 74.13 who reside within the territory of a school district in which 74.14 the voters approved an income tax surtax at a referendum 74.15 conducted under section 124A.038 for that purpose in 1996 or a 74.16 subsequent year. This tax does not apply to referenda on bond 74.17 issues. Individuals residing in the district on the last day of 74.18 the tax year are subject to the surtax. An individual's school 74.19 district of residence is the district where the individual's 74.20 abode is located. If an individual is a homeowner and the 74.21 property is a homestead for property tax purposes, there is a 74.22 conclusive presumption that the individual's school district of 74.23 residence for purposes of the income tax surtax is the school 74.24 district where the homestead that is claimed for property tax 74.25 purposes is located. 74.26 Subd. 2. [TAX IMPOSED.] The commissioner of revenue shall 74.27 annually assess the surtax as part of the individual income tax. 74.28 Sec. 4. [290.0622] [DEPARTMENT OF REVENUE.] 74.29 The commissioner of revenue shall require taxpayers to 74.30 report on their individual income tax returns the identifying 74.31 number of the school district they lived in on the final day of 74.32 the tax year. The commissioner shall provide taxpayers with a 74.33 listing of school district names and numbers to facilitate 74.34 compliance with this provision. 74.35 No later than September 15 of each year, the commissioner 74.36 of revenue shall report to the commissioner of children, 75.1 families, and learning the preliminary aggregate individual 75.2 income tax liability for each school district in the state. 75.3 In years in which surtaxes are authorized, the commissioner 75.4 of revenue shall collect the surtax along with the individual 75.5 income tax. The instructions for completing the individual 75.6 income tax return shall include a listing of school districts 75.7 that have authorized surtaxes and the surtax rates. 75.8 Sec. 5. [290.0623] [WITHHOLDING.] 75.9 Notwithstanding chapter 289A, a taxpayer is not subject to 75.10 penalty in the first year of an income tax surtax if the 75.11 taxpayer's withholding is not adjusted to reflect the amount of 75.12 the income tax surtax. 75.13 Sec. 6. [NOVEMBER 1997 REFERENDUM.] 75.14 A school district may not hold a referendum under Minnesota 75.15 Statutes, section 124A.03, in November 1997. A district may 75.16 conduct an election under section 2. For 1997 taxes payable in 75.17 1998 only, the commissioner of children, families, and learning 75.18 shall convert the income tax surtax rate approved in November 75.19 1997 into a dollar amount by multiplying the surtax rate by the 75.20 estimated income tax liability of the school district for that 75.21 year. The school district may increase its referendum revenue 75.22 authority under section 124A.03 for taxes payable in 1998 by the 75.23 amount calculated by the commissioner. For following years, the 75.24 approved amount must be spread as an income tax surtax. 75.25 ARTICLE 4 75.26 STATE AIDS 75.27 Section 1. Minnesota Statutes 1996, section 273.1398, 75.28 subdivision 6, is amended to read: 75.29 Subd. 6. [PAYMENT.]The commissioner shall certify the75.30aids provided in subdivisions 2, 2b, 3, and 5 before September 175.31of the year preceding the distribution year to the county75.32auditor of the affected local government. The aids provided in75.33subdivisions 2, 2b, 3, and 5 must be paid to local governments75.34other than school districts at the times provided in section75.35477A.015 for payment of local government aid to taxing75.36jurisdictions, except that the first one-half payment of76.1disparity reduction aid provided in subdivision 3 must be paid76.2on or before August 31.The disparity reduction credit provided 76.3 in subdivision 4 must be paid to taxing jurisdictions other than 76.4 school districts at the time provided in section 473H.10, 76.5 subdivision 3.Aids andCredit reimbursements to school 76.6 districts must be certified to the commissioner of children, 76.7 families, and learning and paid under section 273.1392.Except76.8for education districts and secondary cooperatives that receive76.9revenue according to section 124.575, payment shall not be made76.10to any taxing jurisdiction that has ceased to levy a property76.11tax.76.12 Sec. 2. Minnesota Statutes 1996, section 298.28, 76.13 subdivision 2, is amended to read: 76.14 Subd. 2. [CITY OR TOWN WHERE QUARRIED OR PRODUCED.] 76.154.56.75 cents per gross ton of merchantable iron ore 76.16 concentrate, hereinafter referred to as "taxable ton," must be 76.17 allocated to the city or town in the county in which the lands 76.18 from which taconite was mined or quarried were located or within 76.19 which the concentrate was produced. If the mining, quarrying, 76.20 and concentration, or different steps in either thereof are 76.21 carried on in more than one taxing district, the commissioner 76.22 shall apportion equitably the proceeds of the part of the tax 76.23 going to cities and towns among such subdivisions upon the basis 76.24 of attributing 40 percent of the proceeds of the tax to the 76.25 operation of mining or quarrying the taconite, and the remainder 76.26 to the concentrating plant and to the processes of 76.27 concentration, and with respect to each thereof giving due 76.28 consideration to the relative extent of such operations 76.29 performed in each such taxing district. The commissioner's 76.30 order making such apportionment shall be subject to review by 76.31 the tax court at the instance of any of the interested taxing 76.32 districts, in the same manner as other orders of the 76.33 commissioner. 76.34 Sec. 3. Minnesota Statutes 1996, section 298.28, 76.35 subdivision 3, is amended to read: 76.36 Subd. 3. [CITIES; TOWNS.] (a)12.518.75 cents per taxable 77.1 ton, less any amount distributed under subdivision 8, and 77.2 paragraph (b), must be allocated to the taconite municipal aid 77.3 account to be distributed as provided in section 298.282. 77.4 (b) An amount must be allocated to towns or cities that is 77.5 annually certified by the county auditor of a county containing 77.6 a taconite tax relief area within which there is (1) an 77.7 organized township if, as of January 2, 1982, more than 75 77.8 percent of the assessed valuation of the township consists of 77.9 iron ore or (2) a city if, as of January 2, 1980, more than 75 77.10 percent of the assessed valuation of the city consists of iron 77.11 ore. 77.12 (c) The amount allocated under paragraph (b) will be the 77.13 portion of a township's or city's certified levy equal to the 77.14 proportion of (1) the difference between 50 percent of January 77.15 2, 1982, assessed value in the case of a township and 50 percent 77.16 of the January 2, 1980, assessed value in the case of a city and 77.17 its current assessed value to (2) the sum of its current 77.18 assessed value plus the difference determined in (1), provided 77.19 that the amount distributed shall not exceed $55 per capita in 77.20 the case of a township or $75 per capita in the case of a city. 77.21 For purposes of this limitation, population will be determined 77.22 according to the 1980 decennial census conducted by the United 77.23 States Bureau of the Census. If the current assessed value of 77.24 the township exceeds 50 percent of the township's January 2, 77.25 1982, assessed value, or if the current assessed value of the 77.26 city exceeds 50 percent of the city's January 2, 1980, assessed 77.27 value, this paragraph shall not apply. For purposes of this 77.28 paragraph, "assessed value," when used in reference to years 77.29 other than 1980 or 1982, means, for distributions for production 77.30 year 1989, production taxes payable in 1990, the appropriate net 77.31 tax capacities multiplied by 8.2 and for distributions for 77.32 production year 1990 and thereafter, production taxes payable in 77.33 1991 and thereafter, the appropriate net tax capacities 77.34 multiplied by 10.2. 77.35 Sec. 4. Minnesota Statutes 1996, section 298.28, 77.36 subdivision 5, is amended to read: 78.1 Subd. 5. [COUNTIES.] (a)16.526.25 cents per taxable ton 78.2 is allocated to counties to be distributed, based upon 78.3 certification by the commissioner of revenue, under paragraphs 78.4 (b) to (d). 78.5 (b)1319.5 cents per taxable ton shall be distributed to 78.6 the county in which the taconite is mined or quarried or in 78.7 which the concentrate is produced, less any amount which is to 78.8 be distributed pursuant to paragraph (c). The apportionment 78.9 formula prescribed in subdivision 2 is the basis for the 78.10 distribution. 78.11 (c) If an electric power plant owned by and providing the 78.12 primary source of power for a taxpayer mining and concentrating 78.13 taconite is located in a county other than the county in which 78.14 the mining and the concentrating processes are conducted,one78.15cent1.5 cents per taxable ton of the tax distributed to the 78.16 counties pursuant to paragraph (b) and imposed on and collected 78.17 from such taxpayer shall be paid to the county in which the 78.18 power plant is located. 78.19 (d)3.55.25 cents per taxable ton shall be paid to the 78.20 county from which the taconite was mined, quarried or 78.21 concentrated to be deposited in the county road and bridge 78.22 fund. If the mining, quarrying and concentrating, or separate 78.23 steps in any of those processes are carried on in more than one 78.24 county, the commissioner shall follow the apportionment formula 78.25 prescribed in subdivision 2. 78.26 Sec. 5. Minnesota Statutes 1996, section 477A.011, is 78.27 amended by adding a subdivision to read: 78.28 Subd. 3b. [SPRAWL POPULATION.] For a city with a 78.29 population of 5,000 or more which is located outside of the 78.30 metropolitan area, the "sprawl population" is equal to the total 78.31 population of all municipalities and unorganized townships that 78.32 have a geographic center closer to the geographic center of that 78.33 city than to the geographic center of any other city with a 78.34 population of 5,000 or more. For a city with a population that 78.35 is less than 5,000 or a city located in the metropolitan area, 78.36 the sprawl population is zero. 79.1 Sec. 6. Minnesota Statutes 1996, section 477A.011, is 79.2 amended by adding a subdivision to read: 79.3 Subd. 3c. [ADJUSTED POPULATION.] "Adjusted population" is 79.4 the sum of a city's population plus five percent of the city's 79.5 sprawl population. 79.6 Sec. 7. Minnesota Statutes 1996, section 477A.011, is 79.7 amended by adding a subdivision to read: 79.8 Subd. 3d. [POVERTY ADJUSTED POPULATION.] "Poverty adjusted 79.9 population" means the sum of (1) the county's population, and 79.10 (2) three times the average unduplicated number of persons who 79.11 receive benefits per month under general assistance, medical 79.12 assistance, or AFDC, or its successor program, as determined 79.13 under section 256E.06. 79.14 Sec. 8. Minnesota Statutes 1996, section 477A.011, 79.15 subdivision 20, is amended to read: 79.16 Subd. 20. [CITYNET TAX CAPACITY.] "CityNet tax capacity" 79.17 for a local taxing jurisdiction means (1) the net tax capacity 79.18 computed using the net tax capacity rates in section 273.13, and 79.19 the market values for taxes payable in the year prior to the aid 79.20 distribution plus (2) acity'sjurisdiction's fiscal disparities 79.21 distribution tax capacity under section 276A.06, subdivision 2, 79.22 paragraph (b), or 473F.08, subdivision 2, paragraph (b), for 79.23 taxes payable in the year prior to that for which aids are being 79.24 calculated. The market value utilized in computingcitya 79.25 jurisdiction's net tax capacity shall be reduced by the sum of 79.26 (1)a city'sthe jurisdiction's market value of commercial 79.27 industrial property as defined in section 276A.01, subdivision 79.28 3, or 473F.02, subdivision 3, multiplied by the ratio determined 79.29 pursuant to section 276A.06, subdivision 2, paragraph (a), or 79.30 473F.08, subdivision 2, paragraph (a), (2) the market value of 79.31 the captured value of tax increment financing districts as 79.32 defined in section 469.177, subdivision 2, and (3) the market 79.33 value of transmission lines deducted froma city'sthe 79.34 jurisdiction's total net tax capacity under section 273.425. 79.35 The county or city net tax capacity will be computed using 79.36 equalized market values. 80.1 Sec. 9. Minnesota Statutes 1996, section 477A.011, 80.2 subdivision 35, is amended to read: 80.3 Subd. 35. [TAX EFFORT RATE.] "Tax effort rate" for a type 80.4 of taxing jurisdiction means the sum of the net levy for 80.5 allcitiesjurisdictions of that type divided by the sum of the 80.6citynet tax capacity for allcitiesjurisdictions of that type. 80.7 For aids payable in 1999 only, the "tax effort rate" for cities 80.8 means (1) the sum of the net levy for all cities plus the 1998 80.9 homestead and agricultural credit aid for all cities, divided by 80.10 (2) the sum of the net tax capacity for all cities. For 80.11 purposes of this section, "net levy" means thecitylevy, after 80.12 all adjustments, used for calculating the local tax rate under 80.13 section 275.08 for taxes payable in the year prior to the aid 80.14 distribution. The fiscal disparity distribution levy under 80.15 chapter 276A or 473F is included in net levy. 80.16 Sec. 10. Minnesota Statutes 1996, section 477A.011, 80.17 subdivision 37, is amended to read: 80.18 Subd. 37. [BASE REDUCTION PERCENTAGE.] "Base reduction 80.19 percentage" is the sum of 50 percent plus a percentage equal 80.20 to (1) the difference between the amount available for city aid 80.21 under section 477A.03 for the year for which aid is being 80.22 calculated and the amount available for city aid under section 80.23 477A.03 for calendar year19941999, (2) divided by the sum of 80.24 the city aid base for all cities and (3) multiplied by 100. The 80.25 reduction percentage for any year may not be less than the 80.26 reduction percentage from the previous year.For aid paid in80.27calendar year 1994, the reduction percentage is zero.The 80.28 reduction percentage may not be more than 100 percent. 80.29 Sec. 11. Minnesota Statutes 1996, section 477A.011, is 80.30 amended by adding a subdivision to read: 80.31 Subd. 38. [ACRES.] The number of acres in a township or a 80.32 county are the number of acres of land in the jurisdiction, 80.33 according to the most recent federal census, adjusted for any 80.34 annexations and detachments as provided under section 477A.014, 80.35 subdivision 1. 80.36 Sec. 12. Minnesota Statutes 1996, section 477A.011, is 81.1 amended by adding a subdivision to read: 81.2 Subd. 39. [AGRICULTURAL NET TAX CAPACITY.] The 81.3 "agricultural net tax capacity" for a township is equal to the 81.4 net tax capacity for all property in the township that is 81.5 classified as class 2 under section 273.13, subdivision 23, 81.6 excluding any airport property, plus any class 1 property under 81.7 section 273.13, subdivision 22, that is part of an agricultural 81.8 homestead. 81.9 Sec. 13. [477A.0125] [COUNTY AID DISTRIBUTIONS.] 81.10 Subdivision 1. [FORMULA AMOUNT.] In calendar year 1999 and 81.11 subsequent years, each county shall receive an aid amount equal 81.12 to the product of (1) an aid percentage, and (2) the sum of (i) 81.13 its poverty weighted population multiplied by 145; and (ii) its 81.14 acres of land multiplied by .40; minus its net tax capacity 81.15 multiplied by 50 percent of the county tax effort rate. The aid 81.16 percentage shall be calculated by the department of revenue so 81.17 that the total aid paid to counties under this section equals 81.18 the amount available for distribution under section 477A.03. 81.19 Subd. 2. [AID LIMITATION.] (a) For aids payable in 1999, 81.20 the amount of aid a county receives under this section shall not 81.21 exceed an amount equal to (1) its 1998 homestead and 81.22 agricultural credit aid, plus (2) ten percent of its net levy 81.23 for taxes payable in 1998. 81.24 (b) For aids payable in 2000 and subsequent years, the 81.25 amount of aid a county receives under this section shall not 81.26 exceed an amount equal to (1) its 1998 homestead and 81.27 agricultural credit aid increased by the percentage increase in 81.28 total aid under this section for the current aid payable year 81.29 compared to the total aid under this section for 1999, plus (2) 81.30 a percentage of its net levy for taxes payable in 1998 equal to 81.31 ten percent plus one percent for each aid payable year since 81.32 1999. 81.33 Sec. 14. Minnesota Statutes 1996, section 477A.013, 81.34 subdivision 1, is amended to read: 81.35 Subdivision 1. [TOWNS.]In 1994 each town that had levied81.36for taxes payable in the prior year a local tax rate of at least82.1.008 shall receive a distribution equal to the amount it82.2received in 1993 under this section before any nonpermanent82.3reductions made under section 477A.0132. In 1995 each town that82.4had levied for taxes payable in 1993 a local tax rate of at82.5least .008 shall receive a distribution equal to 102 percent of82.6the amount it received in 1994 under this section before any82.7increases or reductions under sections 16A.711, subdivision 5,82.8and 477A.0132. In 1996 and subsequent years each town that had82.9levied for taxes payable in 1993 a local tax rate of at least82.10.008 shall receive a distribution equal to the amount it82.11received in the previous year under this section, adjusted for82.12inflation as provided under section 477A.03, subdivision 3.In 82.13 calendar year 1999 and subsequent years, the amount of aid that 82.14 a town receives is equal to (1) the aid factor multiplied by the 82.15 number of acres in the town, less (2) 0.10 multiplied by the 82.16 difference between the town's total net tax capacity and its 82.17 agricultural net tax capacity. In 1999, the aid factor is $1. 82.18 In 2000 and subsequent years, the aid factor is the aid factor 82.19 from the previous year adjusted for inflation as provided under 82.20 section 477A.03, subdivision 3. If the town's agricultural net 82.21 tax capacity is less than 40 percent of its total net tax 82.22 capacity, the amount of aid it receives is zero. No town may 82.23 have an aid amount less than zero. 82.24 Sec. 15. Minnesota Statutes 1996, section 477A.013, 82.25 subdivision 8, is amended to read: 82.26 Subd. 8. [CITY FORMULA AID.] In calendar year 1994 and 82.27 subsequent years, the formula aid for a city is equal to the 82.28 need increase percentage multiplied by the difference between 82.29 (1) the city's revenue need multiplied by its adjusted 82.30 population, and (2) the city's net tax capacity multiplied by 82.31 the tax effort rate. No city may have a formula aid amount less 82.32 than zero. The need increase percentage must be the same for 82.33 all cities. 82.34Notwithstanding the prior sentence, in 1995 only, the need82.35increase percentage for a city shall be twice the need increase82.36percentage applicable to other cities if:83.1(1) the city, in 1992 or 1993, transferred an amount from83.2governmental funds to their sewer and water fund, and83.3(2) the amount transferred exceeded their net levy for83.4taxes payable in the year in which the transfer occurred.83.5 The applicable need increase percentageor percentagesmust 83.6 be calculated by the department of revenue so that the total of 83.7 the aid under subdivision 9 equals the total amount available 83.8 for aid under section 477A.03. 83.9 Sec. 16. Minnesota Statutes 1996, section 477A.013, 83.10 subdivision 9, is amended to read: 83.11 Subd. 9. [CITY AID DISTRIBUTION.] (a) In calendar year 83.1219941999 and thereafter, each city shall receive an aid 83.13 distribution equal to the sum of (1) the city formula aid under 83.14 subdivision 8, and (2) its city aid base multiplied by a 83.15 percentage equal to 100 minus the base reduction percentage. 83.16(b) The percentage increase for a first class city in83.17calendar year 1995 and thereafter shall not exceed the83.18percentage increase in the sum of the aid to all cities under83.19this section in the current calendar year compared to the sum of83.20the aid to all cities in the previous year.83.21(c) The total aid for any city, except a first class city,83.22shall not exceed the sum of (1) ten percent of the city's net83.23levy for the year prior to the aid distribution plus (2) its83.24total aid in the previous year before any increases or decreases83.25under sections 16A.711, subdivision 5, and 477A.0132.83.26(d) Notwithstanding paragraph (c), in 1995 only, for cities83.27which in 1992 or 1993 transferred an amount from governmental83.28funds to their sewer and water fund in an amount greater than83.29their net levy for taxes payable in the year in which the83.30transfer occurred, the total aid shall not exceed the sum of (1)83.3120 percent of the city's net levy for the year prior to the aid83.32distribution plus (2) its total aid in the previous year before83.33any increases or decreases under sections 16A.711, subdivision83.345, and 477A.0132.83.35 Sec. 17. Minnesota Statutes 1996, section 477A.03, 83.36 subdivision 2, is amended to read: 84.1 Subd. 2. [ANNUAL APPROPRIATION.] A sum sufficient to 84.2 discharge the duties imposed by sections 477A.011 to 477A.014 is 84.3 annually appropriated from the general fund to the commissioner 84.4 of revenue. For aids payable in19961999 and thereafter, the 84.5 total aids paid under sections477A.013, subdivision 9,84.6 477A.0121 and 477A.0122 are the amounts certified to be paid in 84.7 the previous year, adjusted for inflation as provided under 84.8 subdivision 3. Aid payments to counties under section477A.012184.9are limited to $20,265,000 in 1996477A.0125 are limited to 84.10 $200,000,000 in 1999. Aid payments tocounties under section84.11477A.0121 are limited to $27,571,625 in 1997cities under 84.12 section 477A.013, subdivision 9, are limited to $375,000,000 in 84.13 1999. For aid payable in19982000 and thereafter, the total 84.14 aids paid undersection 477A.0121sections 477A.0125 and 84.15 477A.013, subdivision 9, are the amounts certified to be paid in 84.16 the previous year, adjusted for inflation as provided under 84.17 subdivision 3. 84.18 Sec. 19. [477A.20] [STATE-OWNED BUILDINGS; PAYMENTS IN 84.19 LIEU.] 84.20 Subdivision 1. [STATE-OWNED BUILDINGS.] For purposes of 84.21 this section, "state-owned buildings" means all buildings owned 84.22 or leased by the state of Minnesota, the University of 84.23 Minnesota, state universities, community colleges, and technical 84.24 colleges which are currently exempt from local property taxes, 84.25 with the following exceptions: 84.26 (1) buildings that have less than 2,000 square feet of 84.27 finished floor space, and 84.28 (2) buildings owned or leased and used by the department of 84.29 natural resources for purposes other than as a state or district 84.30 headquarters. 84.31 Subd. 2. [EDUCATIONAL AND CORRECTIONAL BUILDINGS.] For 84.32 purposes of this section, "educational and correctional 84.33 buildings" means correctional facilities and buildings used for 84.34 higher education purposes. 84.35 Subd. 3. [IN LIEU PAYMENT.] (a) A city shall receive a 84.36 payment in lieu of property taxes for state owned buildings in 85.1 the following amount, subject to the limits imposed in 85.2 paragraphs (b) and (c). The in lieu payment shall be equal to 85.3 $.25 for each square foot of finished floor space in state-owned 85.4 educational and correctional buildings plus $.75 for each square 85.5 foot of finished floor space for all other state owned buildings 85.6 located within the city. The department of administration will 85.7 provide the square footage for all qualifying buildings to the 85.8 commissioner of revenue to allow calculation of this payment. 85.9 (b) No city may receive an in lieu payment greater than $15 85.10 per capita, based on the most recent city population estimate, 85.11 as defined in section 477A.011, subdivision 3. 85.12 (c) If the total amount of finished floor space in 85.13 qualifying state owned buildings in a city is less than 8,000 85.14 square feet, the in lieu payment shall be zero. 85.15 Subd. 4. [APPROPRIATION.] A sum sufficient to discharge 85.16 the duties imposed under this section is annually appropriated 85.17 from the general fund to the commissioner of revenue. The 85.18 payments shall be made in the manner in prescribed in section 85.19 477A.014, subdivision 1. The payments shall be made on the 85.20 dates prescribed in section 477A.015. 85.21 Sec. 20. [REPEALER.] 85.22 Minnesota Statutes 1996, sections 273.1398, subdivisions 2, 85.23 2c, 2d, 3, and 3a; and 273.166, are repealed. 85.24 Sec. 21. [EFFECTIVE DATE.] 85.25 This article is effective for aids payable in 1999 and 85.26 subsequent years. 85.27 ARTICLE 5 85.28 TRUTH IN BUDGETING 85.29 Section 1. Minnesota Statutes 1996, section 275.065, 85.30 subdivision 3, is amended to read: 85.31 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 85.32 county auditor shall prepare and the county treasurer shall 85.33 deliver after November 10 and on or before November 24 each 85.34 year, by first class mail to each taxpayer at the address listed 85.35 on the county's current year's assessment roll, a notice of 85.36 proposed property taxes and, in the case of a town, final 86.1 property taxes. 86.2 (b) The commissioner of revenue shall prescribe the form of 86.3 the notice. 86.4 (c) The notice must inform taxpayers that it contains the 86.5 amount of property taxes each taxing authority other than a town 86.6 proposes to collect for taxes payable the following year and, 86.7 for a town, the amount of its final levy. It must clearly state 86.8 that each taxing authority, including regional library districts 86.9 established under section 134.201, and including the 86.10 metropolitan taxing districts as defined in paragraph (i), but 86.11 excluding all other special taxing districts, school districts, 86.12 and towns, will hold a public meeting to receive public 86.13 testimony on the proposed budget and proposed or final property 86.14 tax levy, or, in case of a school district, on the current86.15budget and proposed property tax levy. It must clearly state 86.16 the time and place of each taxing authority's meeting and an 86.17 address where comments will be received by mail. 86.18 (d) The notice must state for each parcel the following 86.19 items listed in this sequential order: 86.20 (1) the market value of the property as determined under 86.21 section 273.11, and used for computing property taxes payable in 86.22 the following year and for taxes payable in the current year; 86.23 and, in the case of residential property, whether the property 86.24 is classified as homestead or nonhomestead. The notice must 86.25 clearly inform taxpayers of the years to which the market values 86.26 apply and that the values are final values; 86.27 (2) the property tax amount for the following year based on 86.28 each taxing authority's constant spending levy amount. This 86.29 amount must be listed by county, city or town, school district, 86.30 the state education tax, the total of the special taxing 86.31 districts, the tax increment tax, if any, the fiscal disparities 86.32 tax, if any, and a total of all taxing authorities; 86.33 (3) the proposed property tax amount for the following year 86.34byfor the county, the city or town, the school district 86.35excess referenda levy, remaining school district levy, regional86.36library district, if in existence, the total of the metropolitan87.1special taxing districts as defined in paragraph (i) and, the 87.2 state education tax, the sum of theremainingspecial taxing 87.3 districts, andasa total of all the taxing authorities,87.4including all special taxing districts, the proposed or, for. 87.5 For a town, the proposed amount is its final net tax on the 87.6 property for taxes payable the following yearand the actual tax87.7for taxes payable the current year.If a school district has87.8certified under section 124A.03, subdivision 2, that a87.9referendum will be held in the school district at the November87.10general election, the county auditor must note next to the87.11school district's proposed amount that a referendum is pending87.12and that, if approved by the voters, the tax amount may be87.13higher than shown on the notice. For the purposes of this87.14subdivision, "school district excess referenda levy" means87.15school district taxes for operating purposes approved at87.16referendums, including those taxes based on net tax capacity as87.17well as those based on market value. "School district excess87.18referenda levy" does not include school district taxes for87.19capital expenditures approved at referendums or school district87.20taxes to pay for the debt service on bonds approved at87.21referenda.In the case of the city of Minneapolis, the levy for 87.22 the Minneapolis library board and the levy for Minneapolis park 87.23 and recreation shall be listed separately from the remaining 87.24 amount of the city's levy. In the case of a parcel where tax 87.25 increment or the fiscal disparities areawide tax under chapter 87.26 276A or 473F applies, the proposed tax levy on the captured 87.27 value or the proposed tax levy on the tax capacity subject to 87.28 the areawide tax must each be stated separately and not included 87.29 in the sum of the special taxing districts;and87.30(3)(4) the increase or decreaseinbetween the amounts in 87.31clauseclauses (2)from taxes payable in the current year to87.32proposed or, for a town, final taxes payable the following year,87.33 and (3) expressed as a dollar amount and as a percentage; and 87.34 (5) the total actual taxes for the current year for all 87.35 taxing authorities for the parcel. 87.36 (e) The notice must clearly state that the proposed or 88.1 final taxes do not include the following: 88.2 (1) special assessments; 88.3 (2) levies approved by the voters after the date the 88.4 proposed taxes are certified, including bond referenda,school88.5district levy referenda,and levy limit increase referenda; 88.6 (3) amounts necessary to pay cleanup or other costs due to 88.7 a natural disaster occurring after the date the proposed taxes 88.8 are certified; 88.9 (4) amounts necessary to pay tort judgments against the 88.10 taxing authority that become final after the date the proposed 88.11 taxes are certified; and 88.12 (5) the contamination tax imposed on properties which 88.13 received market value reductions for contamination. 88.14 (f) Except as provided in subdivision 7, failure of the 88.15 county auditor to prepare or the county treasurer to deliver the 88.16 notice as required in this section does not invalidate the 88.17 proposed or final tax levy or the taxes payable pursuant to the 88.18 tax levy. 88.19 (g) If the notice the taxpayer receives under this section 88.20 lists the property as nonhomestead and the homeowner provides 88.21 satisfactory documentation to the county assessor that the 88.22 property is owned and used as the owner's homestead, the 88.23 assessor shall reclassify the property to homestead for taxes 88.24 payable in the following year. 88.25 (h) In the case of class 4 residential property used as a 88.26 residence for lease or rental periods of 30 days or more, the 88.27 taxpayer must either: 88.28 (1) mail or deliver a copy of the notice of proposed 88.29 property taxes to each tenant, renter, or lessee; or 88.30 (2) post a copy of the notice in a conspicuous place on the 88.31 premises of the property. 88.32 The notice must be mailed or posted by the taxpayer by 88.33 November 27 or within three days of receipt of the notice, 88.34 whichever is later. A taxpayer may notify the county treasurer 88.35 of the address of the taxpayer, agent, caretaker, or manager of 88.36 the premises to which the notice must be mailed in order to 89.1 fulfill the requirements of this paragraph. 89.2 (i) For purposes of this subdivision, subdivisions 5a and 89.3 6, "metropolitan special taxing districts" means the following 89.4 taxing districts in the seven-county metropolitan area that levy 89.5 a property tax for any of the specified purposes listed below: 89.6 (1) metropolitan council under section 473.132, 473.167, 89.7 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 89.8 (2) metropolitan airports commission under section 473.667, 89.9 473.671, or 473.672; and 89.10 (3) metropolitan mosquito control commission under section 89.11 473.711. 89.12 For purposes of this section, any levies made by the 89.13 regional rail authorities in the county of Anoka, Carver, 89.14 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 89.15 398A shall be included with the appropriate county's levy and 89.16 shall be discussed at that county's public hearing. 89.17(j) For taxes levied in 1996, payable in 1997 only, in the89.18case of a statutory or home rule charter city or town that89.19exercises the local levy option provided in section 473.388,89.20subdivision 7, the notice of its proposed taxes may include a89.21statement of the amount by which its proposed tax increase for89.22taxes payable in 1997 is attributable to its exercise of that89.23option, together with a statement that the levy of the89.24metropolitan council was decreased by a similar amount because89.25of the exercise of that option.89.26 Sec. 2. Minnesota Statutes 1996, section 275.065, is 89.27 amended by adding a subdivision to read: 89.28 Subd. 3a. [CONSTANT SPENDING LEVY AMOUNT.] (a) For 89.29 purposes of this section, "constant spending levy amount" for a 89.30 county, school district, city, town, or special taxing district 89.31 means the property tax levy that the taxing authority would need 89.32 to levy so that the sum of its levy, including its fiscal 89.33 disparities distribution levy under section 276A.06, subdivision 89.34 3, clause (a), or 473F.08, subdivision 3, clause (a), plus its 89.35 property tax aid amounts would remain constant from the current 89.36 year to the proposed year, taking into account the fiscal 90.1 disparities distribution levy amounts and the property tax aid 90.2 amounts that have been certified for the proposed year. For the 90.3 purposes of this paragraph, property tax aids include local 90.4 government aid under sections 477A.012 and 477A.013; local 90.5 performance aid under section 477A.05; county criminal justice 90.6 aid under section 477A.0121; family preservation aid under 90.7 section 477A.0122; and payments in lieu for state-owned 90.8 buildings under section 477A.20. 90.9 (b) For purposes of the state education tax, "constant 90.10 spending levy amount" means the state education tax that would 90.11 be computed for the property using the current year's state 90.12 education tax rate applicable to the property and the proposed 90.13 year's taxable market value. 90.14 Sec. 3. Minnesota Statutes 1996, section 275.065, 90.15 subdivision 5a, is amended to read: 90.16 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 90.17 population of more than 2,500, county, a metropolitan special 90.18 taxing district as defined in subdivision 3, paragraph (i), or a 90.19 regional library district established under section 134.201, or90.20school districtshall advertise in a newspaper a notice of its 90.21 intent to adopt a budget and property tax levyor, in the case90.22of a school district, to review its current budget and90.23proposedfor property taxes payable in the following year, at a 90.24 public hearing. The notice must be published not less than two 90.25 business days nor more than six business days before the hearing. 90.26 The advertisement must be at least one-eighth page in size 90.27 of a standard-size or a tabloid-size newspaper. The 90.28 advertisement must not be placed in the part of the newspaper 90.29 where legal notices and classified advertisements appear. The 90.30 advertisement must be published in an official newspaper of 90.31 general circulation in the taxing authority. The newspaper 90.32 selected must be one of general interest and readership in the 90.33 community, and not one of limited subject matter. The 90.34 advertisement must appear in a newspaper that is published at 90.35 least once per week. 90.36 For purposes of this section, the metropolitan special 91.1 taxing district's advertisement must only be published in the 91.2 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 91.3 (b) The advertisement for metropolitan special taxing 91.4 districts and regional library districts must be in the 91.5 following form, except that the notice for a school district may91.6include references to the current budget in regard to proposed91.7property taxes. 91.8 "NOTICE OF 91.9 PROPOSED PROPERTY TAXES 91.10 (City/County/School District/Metropolitan 91.11 Special Taxing District/Regional 91.12 Library District) of ......... 91.13 The governing body of ........ will soon hold budget hearings 91.14 and vote on the property taxes for (city/county/metropolitan 91.15 special taxing district/regional library district services that 91.16 will be provided in199_/school district services that will be91.17provided in 199_ and 199_(year)). 91.18 NOTICE OF PUBLIC HEARING: 91.19 All concerned citizens are invited to attend a public hearing 91.20 and express their opinions on the proposed (city/county/school91.21district/metropolitan special taxing district/regional library 91.22 district) budget and property taxes,or in the case of a school91.23district, its current budget and proposed property taxes,91.24 payable in the following year. The hearing will be held on 91.25 (Month/Day/Year) at (Time) at (Location, Address)." 91.26 (c) The advertisement for cities and counties must be in 91.27 the following form. 91.28 "NOTICE OF PROPOSED 91.29 TOTAL BUDGET AND PROPERTY TAXES 91.30 The (city/county) governing body or board of commissioners will 91.31 hold a public hearing to discuss the budget and to vote on the 91.32 amount of property taxes to collect for services the 91.33 (city/county) will provide in (year). 91.34 91.35 SPENDING: The total budget amounts below compare 91.36 (city's/county's) (year) total actual budget with the amount the 92.1 (city/county) proposes to spend in (year). 92.2 92.3 (Year) Total Proposed (Year) Change from 92.4 Actual Budget Budget (Year)-(Year) 92.5 92.6 $....... $....... ...% 92.7 92.8 TAXES: The property tax amounts below compare that portion of 92.9 the current budget levied in property taxes in (city/county) for 92.10 (year) with the property taxes the (city/county) proposes to 92.11 collect in (year). 92.12 92.13 (Year) Property Proposed (Year) Change from 92.14 Taxes Property Taxes (Year)-(Year) 92.15 92.16 $....... $....... ...% 92.17 92.18 ATTEND THE PUBLIC HEARING 92.19 All (city/county) residents are invited to attend the public 92.20 hearing of the (city/county) to express your opinions on the 92.21 budget and the proposed amount of (year) property taxes. The 92.22 hearing will be held on: 92.23 (Month/Day/Year/Time) 92.24 (Location/Address) 92.25 If the discussion of the budget cannot be completed, a time and 92.26 place for continuing the discussion will be announced at the 92.27 hearing. You are also invited to send your written comments to: 92.28 (City/County) 92.29 (Location/Address)" 92.30 (d) For purposes of this subdivision, the budget amounts 92.31 listed on the advertisement mean: 92.32 (1) for cities, the total government fund expenditures, as 92.33 defined by the state auditor under section 471.6965, less any 92.34 expenditures for improvements or services that are specially 92.35 assessed or charged under chapter 429, 430, 435, or the 92.36 provisions of any other law or charter; and 93.1 (2) for counties, the total government fund expenditures, 93.2 as defined by the state auditor under section 375.169, less any 93.3 expenditures for direct payments to recipients or providers for 93.4 the human service aids listed in section 273.1398, subdivision 93.5 1, paragraph (i). 93.6(c)(e) A city with a population of over 500 but not more 93.7 than 2,500 must advertise by posted notice as defined in section 93.8 645.12, subdivision 1. The advertisement must be posted at the 93.9 time provided in paragraph (a). It must be in the form required 93.10 in paragraph (b). 93.11(d)(f) For purposes of this subdivision, the population of 93.12 a city is the most recent population as determined by the state 93.13 demographer under section 4A.02. 93.14(e)(g) The commissioner of revenue, subject to the 93.15 approval of the chairs of the house and senate tax committees, 93.16 shall prescribe the form and format of the advertisement. 93.17(f) For calendar year 1993, each taxing authority required93.18to publish an advertisement must include on the advertisement a93.19statement that information on the increases or decreases of the93.20total budget, including employee and independent contractor93.21compensation in the prior year, current year, and proposed93.22budget year will be discussed at the hearing.93.23(g) Notwithstanding paragraph (f), for 1993, the93.24commissioner of revenue shall prescribe the form, format, and93.25content of an advertisement comparing current and proposed93.26expense budgets for the metropolitan council, the metropolitan93.27airports commission, and the metropolitan mosquito control93.28commission. The expense budget must include occupancy,93.29personnel, contractual and capital improvement expenses. The93.30form, format, and content of the advertisement must be approved93.31by the chairs of the house and senate tax committees prior to93.32publication.93.33 Sec. 4. Minnesota Statutes 1996, section 275.065, 93.34 subdivision 6, is amended to read: 93.35 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 93.36 Between November 29 and December 20, the governing bodies of a 94.1 city that has a population over 500, county, metropolitan 94.2 special taxing districts as defined in subdivision 3, paragraph 94.3 (i), and regional library districts shall each hold a public 94.4 hearing to discuss and seek public comment on its final budget 94.5 and property tax levy for taxes payable in the following year, 94.6 andthe governing body of the school districtshall hold a 94.7 public hearing to review its current budget and proposed 94.8 property tax levy for taxes payable in the following year. The 94.9 metropolitan special taxing districts shall be required to hold 94.10 only a single joint public hearing, the location of which will 94.11 be determined by the affected metropolitan agencies. 94.12 At a subsequent hearing, each county,school district,94.13 city, and metropolitan special taxing district may amend its 94.14 proposed property tax levy and must adopt a final property tax 94.15 levy. Each county, city, and metropolitan special taxing 94.16 district may also amend its proposed budget and must adopt a 94.17 final budget at the subsequent hearing.A school district is94.18not required to adopt its final budget at the subsequent94.19hearing.The subsequent hearing of a taxing authority must be 94.20 held on a date subsequent to the date of the taxing authority's 94.21 initial public hearing, or subsequent to the date of its 94.22 continuation hearing if a continuation hearing is held. The 94.23 subsequent hearing may be held at a regularly scheduled board or 94.24 council meeting or at a special meeting scheduled for the 94.25 purposes of the subsequent hearing. The subsequent hearing of a 94.26 taxing authority does not have to be coordinated by the county 94.27 auditor to prevent a conflict with an initial hearing, a 94.28 continuation hearing, or a subsequent hearing of any other 94.29 taxing authority. All subsequent hearings must be held prior to 94.30 five working days after December 20 of the levy year. 94.31 The time and place of the subsequent hearing must be 94.32 announced at the initial public hearing or at the continuation 94.33 hearing. 94.34 The property tax levy certified under section 275.07 by a 94.35 city, county, metropolitan special taxing district, regional 94.36 library district, or school district must not exceed the 95.1 proposed levy determined under subdivision 1, except by an 95.2 amount up to the sum of the following amounts: 95.3 (1) the amount of a school district levy whose voters 95.4 approved a referendum to increase taxes under section 124.82, 95.5 subdivision 3,124A.03, subdivision 2, or 124B.03, subdivision95.62,after the proposed levy was certified; 95.7 (2) the amount of a city or county levy approved by the 95.8 voters after the proposed levy was certified; 95.9 (3) the amount of a levy to pay principal and interest on 95.10 bonds approved by the voters under section 475.58 after the 95.11 proposed levy was certified; 95.12 (4) the amount of a levy to pay costs due to a natural 95.13 disaster occurring after the proposed levy was certified, if 95.14 that amount is approved by the commissioner of revenue under 95.15 subdivision 6a; 95.16 (5) the amount of a levy to pay tort judgments against a 95.17 taxing authority that become final after the proposed levy was 95.18 certified, if the amount is approved by the commissioner of 95.19 revenue under subdivision 6a; 95.20 (6) the amount of an increase in levy limits certified to 95.21 the taxing authority by the commissioner of children, families, 95.22 and learning or the commissioner of revenue after the proposed 95.23 levy was certified; and 95.24 (7) the amount required under section 124.755. 95.25 At the hearing under this subdivision, the percentage 95.26 increase in property taxes proposed by the taxing authority, if 95.27 any, and the specific purposes for which property tax revenues 95.28 are being increased must be discussed. 95.29 During the discussion, the governing body shall hear 95.30 comments regarding a proposed increase and explain the reasons 95.31 for the proposed increase. The public shall be allowed to speak 95.32 and to ask questions. At the subsequent hearing held as 95.33 provided in this subdivision, the governing body, other than the95.34governing body of a school district,shall adopt its final 95.35 property tax levy prior to adopting its final budget. 95.36 If the hearing is not completed on its scheduled date, the 96.1 taxing authority must announce, prior to adjournment of the 96.2 hearing, the date, time, and place for the continuation of the 96.3 hearing. The continued hearing must be held at least five 96.4 business days but no more than 14 business days after the 96.5 original hearing. 96.6 The hearing must be held after 5:00 p.m. if scheduled on a 96.7 day other than Saturday. No hearing may be held on a Sunday. 96.8 The governing body of a county shall hold a hearing on the 96.9 second Tuesday in December each year, and may hold additional 96.10 hearings on other dates before December 20 if necessary for the 96.11 convenience of county residents. If the county needs a 96.12 continuation of its hearing, the continued hearing shall be held 96.13 on the third Tuesday in December. If the third Tuesday in 96.14 December falls on December 21, the county's continuation hearing 96.15 shall be held on Monday, December 20. The county auditor shall 96.16 provide for the coordination of hearing dates for all cities and 96.17 school districts within the county. 96.18 The metropolitan special taxing districts shall hold a 96.19 joint public hearing on the first Monday of December. A 96.20 continuation hearing, if necessary, shall be held on the second 96.21 Monday of December. 96.22 By August 10,each school board andthe board of the 96.23 regional library district shall certify to the county auditors 96.24 of the counties in which the school district or regional library 96.25 district is located the dates on which it elects to hold its 96.26 hearings and any continuations. If aschool board orregional 96.27 library district does not certify the dates by August 10, the 96.28 auditor will assign the hearing date. The dates elected or 96.29 assigned must not conflict with the hearing dates of the county 96.30 or the metropolitan special taxing districts. By August 20, the 96.31 county auditor shall notify the clerks of the cities within the 96.32 county of the dates on whichschool districts andregional 96.33 library districts have elected to hold their hearings. At the 96.34 time a city certifies its proposed levy under subdivision 1 it 96.35 shall certify the dates on which it elects to hold its hearings 96.36 and any continuations. For its initial hearing and for the 97.1 subsequent hearing at which the final property tax levy will be 97.2 adopted, the city must not select dates that conflict with the 97.3 county hearing dates, metropolitan special taxing district 97.4 dates, or with those elected by or assigned to theschool97.5districts orregional library district in which the city is 97.6 located. For continuation hearings, the city may select dates 97.7 that conflict with other taxing authorities' dates if the city 97.8 deems it necessary. 97.9 The county hearing dates and the city, metropolitan special 97.10 taxing district, and regional library district, and school97.11districthearing dates must be designated on the notices 97.12 required under subdivision 3. The continuation dates need not 97.13 be stated on the notices. 97.14 This subdivision does not apply to towns, school districts, 97.15 and special taxing districts other than regional library 97.16 districts and metropolitan special taxing districts. 97.17 Notwithstanding the requirements of this section, the 97.18 employer is required to meet and negotiate over employee 97.19 compensation as provided for in chapter 179A. 97.20 Sec. 5. Minnesota Statutes 1996, section 276.04, 97.21 subdivision 2, is amended to read: 97.22 Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 97.23 shall provide for the printing of the tax statements. The 97.24 commissioner of revenue shall prescribe the form of the property 97.25 tax statement and its contents. The statement must contain a 97.26 tabulated statement of the dollar amount due to each taxing 97.27 authority and the state from the parcel of real property for 97.28 which a particular tax statement is prepared. The dollar 97.29 amounts due the county, state general education tax, the school 97.30 district, township or municipality, the total of the 97.31 metropolitan special taxing districts as defined in section 97.32 275.065, subdivision 3, paragraph (i),school district excess97.33referenda levy, remaining school district levy, and the total of97.34other voter approved referenda levies based on market value97.35under section 275.61must be separately stated. The amounts due 97.36 all other special taxing districts, if any, may be 98.1 aggregated.For the purposes of this subdivision, "school98.2district excess referenda levy" means school district taxes for98.3operating purposes approved at referenda, including those taxes98.4based on net tax capacity as well as those based on market98.5value. "School district excess referenda levy" does not include98.6school district taxes for capital expenditures approved at98.7referendums or school district taxes to pay for the debt service98.8on bonds approved at referenda.The amount of the tax on 98.9 contamination value imposed under sections 270.91 to 270.98, if 98.10 any, must also be separately stated. The dollar amounts, 98.11 including the dollar amount of any special assessments, may be 98.12 rounded to the nearest even whole dollar. For purposes of this 98.13 section whole odd-numbered dollars may be adjusted to the next 98.14 higher even-numbered dollar. The amount of market value 98.15 excluded under section 273.11, subdivision 16, if any, must also 98.16 be listed on the tax statement.The statement shall include the98.17following sentence, printed in upper case letters in boldface98.18print: "THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY98.19TAX REVENUES. THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX98.20BY PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF98.21GOVERNMENT."98.22 (b) The property tax statements for manufactured homes and 98.23 sectional structures taxed as personal property shall contain 98.24 the same information that is required on the tax statements for 98.25 real property. 98.26 (c) Real and personal property tax statements must contain 98.27 the following information in the order given in this paragraph. 98.28 The information must contain the current year tax information in 98.29 the right column with the corresponding information for the 98.30 previous year in a column on the left: 98.31 (1) the property's estimated market value under section 98.32 273.11, subdivision 1; 98.33 (2) the property's taxable market value after reductions 98.34 under section 273.11, subdivisions 1a and 16; 98.35 (3) the property's equalized market value after dividing by 98.36 the assessment/sales ratio under section 273.13, subdivision 99.1 21b; 99.2 (4) the property's gross tax, calculated bymultiplying the99.3property's gross tax capacity times the total local tax rate and99.4 adding the property's total property tax tothe resultthe sum 99.5 of the aids enumerated in clause(4)(5); 99.6(4)(5) a total of the following aids: 99.7 (i) education aids payable under chapters 124 and 124A; and 99.8 (ii) local government aids for cities, towns, and counties 99.9 under chapter 477A;and99.10(iii) disparity reduction aid under section 273.1398;99.11(5) for homestead residential and agricultural properties,99.12the homestead and agricultural credit aid apportioned to the99.13property. This amount is obtained by multiplying the total99.14local tax rate by the difference between the property's gross99.15and net tax capacities under section 273.13. This amount must99.16be separately stated and identified as "homestead and99.17agricultural credit." For purposes of comparison with the99.18previous year's amount for the statement for taxes payable in99.191990, the statement must show the homestead credit for taxes99.20payable in 1989 under section 273.13, and the agricultural99.21credit under section 273.132 for taxes payable in 1989;99.22 (6) any credits received under sections 273.119; 273.123; 99.23 273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 99.24 473H.10, except that the amount of credit received under section 99.25 273.135 must be separately stated and identified as "taconite 99.26 tax relief"; and 99.27 (7) the net tax payable in the manner required in paragraph 99.28 (a). 99.29 (d) If the county uses envelopes for mailing property tax 99.30 statements and if the county agrees, a taxing district may 99.31 include a notice with the property tax statement notifying 99.32 taxpayers when the taxing district will begin its budget 99.33 deliberations for the current year, and encouraging taxpayers to 99.34 attend the hearings. If the county allows notices to be 99.35 included in the envelope containing the property tax statement, 99.36 and if more than one taxing district relative to a given 100.1 property decides to include a notice with the tax statement, the 100.2 county treasurer or auditor must coordinate the process and may 100.3 combine the information on a single announcement. 100.4 The commissioner of revenue shall certify to the county 100.5 auditor the actual or estimated aids enumerated inclauses (3)100.6and (4)paragraph (c), clause (5), that local governments will 100.7 receive in the following year.In the case of a county100.8containing a city of the first class, for taxes levied in 1991,100.9and for all counties for taxes levied in 1992 and thereafter,100.10 The commissioner must certify this amount by September 1 of each 100.11 year. 100.12 Sec. 6. [EFFECTIVE DATE.] 100.13 Sections 1 and 2 are effective for notices prepared 100.14 beginning in 1997 for taxes payable in 1998, and thereafter. 100.15 Section 3 is effective for newspaper advertisements 100.16 prepared beginning in 1997 for taxes payable in 1998 and 100.17 thereafter. 100.18 Section 4 is effective for public hearings beginning in 100.19 1998 and thereafter. 100.20 Section 5 is effective for property tax statements prepared 100.21 in 1998 and thereafter. 100.22 ARTICLE 6 100.23 PROPERTY TAX REFUND 100.24 Section 1. [290.0672] [CREDIT FOR PROPERTY TAXES.] 100.25 An individual is allowed a credit against the tax imposed 100.26 by this chapter equal to 50 percent of the property tax refund 100.27 as determined under section 290A.04. The amount of any claim 100.28 otherwise payable under this section may be applied by the 100.29 commissioner against any delinquent tax liability of the 100.30 claimant or spouse of the claimant payable to the department of 100.31 revenue. If the amount of credit which the claimant is eligible 100.32 to receive under this section exceeds the claimant's tax 100.33 liability under this chapter, the commissioner shall refund the 100.34 excess to the claimant. An amount necessary to make the refund 100.35 payments is appropriated to the commissioner. 100.36 Sec. 2. Minnesota Statutes 1996, section 290A.03, 101.1 subdivision 6, is amended to read: 101.2 Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling 101.3 occupied as the claimant's principal residence and so much of 101.4 the land surrounding it, not exceeding ten acres, as is 101.5 reasonably necessary for use of the dwelling as a home and any 101.6 other property used for purposes of a homestead as defined in 101.7 section273.13, subdivision 22, except for agricultural land101.8assessed as part of a homestead pursuant to section 273.13,101.9subdivision 23, "homestead" is limited to 320 acres or, where101.10the farm homestead is rented, one acre273.124. The homestead 101.11 may be owned or rented and may be a part of a multidwelling or 101.12 multipurpose building and the land on which it is built. A 101.13 manufactured home, as defined in section 273.125, subdivision 8, 101.14 or a park trailer taxed as a manufactured home under section 101.15 168.012, subdivision 9, assessed as personal property may be a 101.16 dwelling for purposes of this subdivision. 101.17 Sec. 3. Minnesota Statutes 1996, section 290A.03, 101.18 subdivision 11, is amended to read: 101.19 Subd. 11. [RENT CONSTITUTING PROPERTY TAXES.] "Rent 101.20 constituting property taxes" meansthe amount of gross rent101.21actually paid in cash, or its equivalent, which is attributable101.22(a) to the property tax paid on the unit or (b) to the amount20 101.23 percent of the gross rent actually paid in cash, or its 101.24 equivalent, or the portion of rent paid in lieu of property 101.25 taxes, in any calendar year by a claimant for the right of 101.26 occupancy of the claimant's Minnesota homestead in the calendar 101.27 year, and which rent constitutes the basis, in the succeeding 101.28 calendar year of a claim for relief under this chapter by the 101.29 claimant.The amount of rent attributable to property taxes101.30paid or payments in lieu made on the unit shall be determined by101.31multiplying the gross rent paid by the claimant for the calendar101.32year for the unit by a fraction, the numerator of which is the101.33net tax on the property where the unit is located and the101.34denominator of which is the total scheduled rent. In no case101.35may the rent constituting property taxes exceed 50 percent of101.36the gross rent paid by the claimant during that calendar year.102.1In the case of a claimant who resides in a unit for which (1) a102.2rent subsidy is paid to, or for, the claimant based on the102.3income of the claimant or the claimant's family, or (2) a102.4subsidy is paid to a public housing authority that owns or102.5operates the claimant's rental unit, pursuant to United States102.6Code, title 42, section 1437c, 20 percent of gross rent actually102.7paid in cash or its equivalent shall be the claimant's "rent102.8constituting property taxes paid." For purposes of this102.9subdivision, "rent subsidy" does not include any housing102.10assistance received under aid to families with dependent102.11children, general assistance, Minnesota supplemental assistance,102.12supplemental security income, or similar income maintenance102.13programs.102.14 Sec. 4. Minnesota Statutes 1996, section 290A.03, 102.15 subdivision 13, is amended to read: 102.16 Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes 102.17 payable" means the property tax exclusive of special 102.18 assessments, penalties, and interest payable on a claimant's 102.19 homestead before reductions made under section 273.13 but after 102.20 deductions made under sections 273.135, 273.1391, 273.42, 102.21 subdivision 2, and any other state paid property tax credits in 102.22 any calendar year and after subtracting the amount of any credit 102.23 under section 290.06, subdivision 25. In the case of a claimant 102.24 who makes ground lease payments, "property taxes payable" 102.25 includes the amount of the payments directly attributable to the 102.26 property taxes assessed against the parcel on which the house is 102.27 located. No apportionment or reduction of the "property taxes 102.28 payable" shall be required for the use of a portion of the 102.29 claimant's homestead for a business purpose if the claimant does 102.30 not deduct any business depreciation expenses for the use of a 102.31 portion of the homestead in the determination of federal 102.32 adjusted gross income. For homesteads which are manufactured 102.33 homes as defined in section 273.125, subdivision 8, and for 102.34 homesteads which are park trailers taxed as manufactured homes 102.35 under section 168.012, subdivision 9, "property taxes payable" 102.36 shall also includethe amount20 percent of the gross rent paid 103.1 in the preceding year for the site on which the homestead is 103.2 located, which is attributable to the net tax paid on the site.103.3The amount attributable to property taxes shall be determined by103.4multiplying the net tax on the parcel by a fraction, the103.5numerator of which is the gross rent paid for the calendar year103.6for the site and the denominator of which is the gross rent paid103.7for the calendar year for the parcel. When a homestead is owned 103.8 by two or more persons as joint tenants or tenants in common, 103.9 such tenants shall determine between them which tenant may claim 103.10 the property taxes payable on the homestead. If they are unable 103.11 to agree, the matter shall be referred to the commissioner of 103.12 revenue whose decision shall be final. Property taxes are 103.13 considered payable in the year prescribed by law for payment of 103.14 the taxes. 103.15 In the case of a claim relating to "property taxes 103.16 payable," the claimant must have owned and occupied the 103.17 homestead on January 2 of the year in which the tax is payable 103.18 and (i) the property must have been classified as homestead 103.19 property pursuant to section273.13, subdivision 22 or 23103.20 273.124, on or before December 15 of the assessment year to 103.21 which the "property taxes payable" relate; or (ii) the claimant 103.22 must provide documentation from the local assessor that 103.23 application for homestead classification has been made on or 103.24 before December 15 of the year in which the "property taxes 103.25 payable" were payable and that the assessor has approved the 103.26 application. 103.27 Sec. 5. Minnesota Statutes 1996, section 290A.04, 103.28 subdivision 1, is amended to read: 103.29 Subdivision 1. A refundshall beis allowed each claimant 103.30in the amount that property taxes payable or rent constituting103.31property taxes exceed the percentage of the household income of103.32the claimant specified in subdivision 2 or 2a in the year for103.33which the taxes were levied or in the year in which the rent was103.34paid as specified inunder subdivision 2 or 2a. If theamount103.35of property taxes payable or rent constituting property taxes is103.36equal to or less than the percentage of theclaimant's household 104.1 incomeof the claimantis greater than the maximum amount 104.2 specified in subdivision 2 or 2a in the year for which the taxes 104.3 were levied or in the year in which the rent was paid, the 104.4 claimantshallis notbeeligible for a state refund pursuant to 104.5 this section. 104.6 Sec. 6. Minnesota Statutes 1996, section 290A.04, 104.7 subdivision 2, is amended to read: 104.8 Subd. 2. [HOMEOWNERS.] Each homeowner is allowed a 104.9 standard refund equal to the lesser of 104.10 (1) 0.25 percent of the taxable market value of the 104.11 homestead; or 104.12 (2) $180. 104.13 In addition to the standard refund, a claimant whose 104.14 property taxes payable after subtraction of (1) the standard 104.15 refund, and (2) the state education tax are in excess ofthe104.16percentage2.5 percent ofthehousehold incomestated below104.17 shall payan amount equal to the percent of income shown for the104.18appropriate2.5 percent of household incomelevel along104.19withplus the percent to be paid by the claimant of the 104.20 remaining amount of property taxes payable as stated below. The 104.21 total state refund equals the amount of property taxes payable 104.22 that remain plus the standard refund amount, up to the maximum 104.23 state refund amount shown below. 104.24PercentPercentMaximum104.25Household Incomeof IncomePaid byState104.26ClaimantRefund104.27$0 to 1,0291.2 percent18 percent$440104.281,030 to 2,0591.3 percent18 percent$440104.292,060 to 3,0991.4 percent20 percent$440104.303,100 to 4,1291.6 percent20 percent$440104.314,130 to 5,1591.7 percent20 percent$440104.325,160 to 7,2291.9 percent25 percent$440104.337,230 to 8,2592.1 percent25 percent$440104.348,260 to 9,2892.2 percent25 percent$440104.359,290 to 10,3192.3 percent30 percent$440104.3610,320 to 11,3492.4 percent30 percent$440104.3711,350 to 12,3892.5 percent30 percent$440104.3812,390 to 14,4492.6 percent30 percent$440104.3914,450 to 15,4792.8 percent35 percent$440104.4015,480 to 16,5093.0 percent35 percent$440104.4116,510 to 17,5493.2 percent40 percent$440104.4217,550 to 21,6693.3 percent40 percent$440104.4321,670 to 24,7693.4 percent45 percent$440104.4424,770 to 30,9593.5 percent45 percent$440104.4530,960 to 36,1193.5 percent45 percent$440104.4636,120 to 41,2793.7 percent50 percent$440104.4741,280 to 58,8294.0 percent50 percent$440104.4858,830 to 59,8594.0 percent50 percent$310105.159,860 to 60,8894.0 percent50 percent$210105.260,890 to 61,9294.0 percent50 percent$100105.3 105.4 Percent Paid Maximum State 105.5 Household Income by Claimant Refund 105.7 $0 to 4,999 20 percent $750 105.8 5,000 to 9,999 20 percent $750 105.9 10,000 to 14,999 30 percent $750 105.10 15,000 to 19,999 35 percent $750 105.11 20,000 to 24,999 40 percent $750 105.12 25,000 to 29,999 45 percent $750 105.13 30,000 to 34,999 50 percent $750 105.14 35,000 to 39,999 55 percent $750 105.15 40,000 to 44,999 60 percent $700 105.16 45,000 to 49,999 60 percent $650 105.17 50,000 to 54,999 60 percent $600 105.18 55,000 to 59,999 60 percent $550 105.19 60,000 to 64,999 60 percent $500 105.20 65,000 to 69,499 60 percent $450 105.21 69,500 to 73,999 60 percent $400 105.22 74,000 to 77,499 60 percent $350 105.23 77,500 to 81,999 60 percent $300 105.24 82,000 to 85,499 60 percent $250 105.25 85,500 to 89,999 60 percent $200 105.26 90,000 to 94,499 60 percent $150 105.27 94,500 to 97,499 60 percent $100 105.28 97,500 to 99,999 60 percent $ 50 105.29 The payment made to a claimant shall be the amount of the 105.30 state refund calculated under this subdivision. No payment is 105.31 allowed if the claimant's household income is$61,930$100,000 105.32 or more. 105.33 Sec. 7. Minnesota Statutes 1996, section 290A.04, 105.34 subdivision 2h, is amended to read: 105.35 Subd. 2h. (a) If the gross property taxes payable on a 105.36 homestead increase more than 12 percent over the net property 105.37 taxes payable in the prior year on the same property that is 105.38 owned and occupied by the same owner on January 2 of both years, 105.39 and the amount of that increase is $100 or more for taxes 105.40 payable in1996 and 19971998, 1999, 2000, and 2001, a claimant 105.41 who is a homeowner shall be allowed an additional refund equal 105.42 to (1) 60 percent of the amount of the increase over the greater 105.43 of 12 percent of the prior year's net property taxes payable or 105.44 $100 for taxes payable in1996 and1997, 1998, and 1999; (2) 40 105.45 percent of the amount of the increase over the greater of 12 105.46 percent of the prior year's net property taxes payable or $100 105.47 for taxes payable in 2000; and (3) 20 percent of the amount of 105.48 the increase over the greater of 12 percent of the prior year's 106.1 net property taxes payable or $100 for taxes payable in 2001. 106.2 This subdivision shall not apply to any increase in the gross 106.3 property taxes payable attributable to improvements made to the 106.4 homestead after the assessment date for the prior year's taxes. 106.5 This subdivision shall not apply to any increase in the gross 106.6 property taxes payable attributable to the termination of 106.7 valuation exclusions under section 273.11, subdivision 16. 106.8 The maximum refund allowed under this subdivision is $1,000 106.9 for taxes payable in 1997 and 1998, and $2,000 for taxes payable 106.10 in 1999, 2000, and 2001. 106.11 (b) For purposes of this subdivision, the following terms 106.12 have the meanings given: 106.13 (1) "Net property taxes payable" means property taxes 106.14 payable minus refund amounts for which the claimant qualifies 106.15 pursuant to subdivision 2 and this subdivision. 106.16 (2) "Gross property taxes" means net property taxes payable 106.17 determined without regard to the refund allowed under this 106.18 subdivision. 106.19 (c) In addition to the other proofs required by this 106.20 chapter, each claimant under this subdivision shall file with 106.21 the property tax refund return a copy of the property tax 106.22 statement for taxes payable in the preceding year or other 106.23 documents required by the commissioner. 106.24(d) On or before December 1, 1995, the commissioner shall106.25estimate the cost of making the payments provided by this106.26subdivision for taxes payable in 1996. Notwithstanding the open106.27appropriation provision of section 290A.23, if the estimated106.28total refund claims for taxes payable in 1996 exceed $5,500,000,106.29the commissioner shall first reduce the 60 percent refund rate106.30enough, but to no lower a rate than 50 percent, so that the106.31estimated total refund claims do not exceed $5,500,000. If the106.32commissioner estimates that total claims will exceed $5,500,000106.33at a 50 percent refund rate, the commissioner shall also reduce106.34the $1,000 maximum refund amount by enough so that total106.35estimated refund claims do not exceed $5,500,000.106.36The determinations of the revised thresholds by the107.1commissioner are not rules subject to chapter 14.107.2(e)(d) Upon request, the appropriate county official shall 107.3 make available the names and addresses of the property taxpayers 107.4 who may be eligible for the additional property tax refund under 107.5 this section. The information shall be provided on a magnetic 107.6 computer disk. The county may recover its costs by charging the 107.7 person requesting the information the reasonable cost for 107.8 preparing the data. The information may not be used for any 107.9 purpose other than for notifying the homeowner of potential 107.10 eligibility and assisting the homeowner, without charge, in 107.11 preparing a refund claim. 107.12 Sec. 8. Minnesota Statutes 1996, section 290A.04, 107.13 subdivision 6, is amended to read: 107.14 Subd. 6. [INFLATION ADJUSTMENT.] Beginning for property 107.15 tax refunds payable in calendar year19961998, the commissioner 107.16 shall annually adjust the dollar amounts of the income 107.17 thresholds and the maximum refunds under subdivisions 2 and 2a 107.18 for inflation. The commissioner shall make the inflation 107.19 adjustments in accordance with section 290.06, subdivision 2d, 107.20 except that for purposes of this subdivision the percentage 107.21 increase shall be determined from the year ending on August 31, 107.2219941996, to the year ending on August 31 of the year preceding 107.23 that in which the refund is payable. The commissioner shall use 107.24 the appropriate percentage increase to annually adjust the 107.25 income thresholds and maximum refunds under subdivisions 2 and 107.26 2a for inflation without regard to whether or not the income tax 107.27 brackets are adjusted for inflation in that year. The 107.28 commissioner shall round the thresholds and the maximum amounts, 107.29 as adjusted to the nearest $10 amount. If the amount ends in 107.30 $5, the commissioner shall round it up to the next $10 amount. 107.31 The commissioner shall annually announce the adjusted 107.32 refund schedule at the same time provided under section 290.06. 107.33 The determination of the commissioner under this subdivision is 107.34 not a rule under the administrative procedure act. 107.35 Sec. 9. Minnesota Statutes 1996, section 290A.07, 107.36 subdivision 1, is amended to read: 108.1 Subdivision 1. Allowable claims filed pursuant to the 108.2 provisions of this chapter shall be paid by the commissioner 108.3 from the general fund. One-half of the refund allowed under 108.4 section 290A.04, subdivisions 2, 2a, and 2h, is a credit against 108.5 the individual income tax as specified in section 290.0672. The 108.6 commissioner shall pay the rest of the refund allowed under 108.7 section 290A.04, subdivisions 2, 2a, and 2h, to the claimant 108.8 after September 15 and before September 30. 108.9 Sec. 10. Minnesota Statutes 1996, section 290A.19, is 108.10 amended to read: 108.11 290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT 108.12 CERTIFICATE.] 108.13(a)The owner or managing agent of any property for which 108.14 rent is paid for occupancy as a homestead must furnish a 108.15 certificate of rentconstituting property taxpaid to a person 108.16 who is a renter on December 31, in the form prescribed by the 108.17 commissioner. If the renter moves before December 31, the owner 108.18 or managing agent may give the certificate to the renter at the 108.19 time of moving, or mail the certificate to the forwarding 108.20 address if an address has been provided by the renter. The 108.21 certificate must be made available to the renter before February 108.22 1 of the year following the year in which the rent was paid. 108.23 The owner or managing agent must retain a duplicate of each 108.24 certificate or an equivalent record showing the same information 108.25 for a period of three years. The duplicate or other record must 108.26 be made available to the commissioner upon request. For the 108.27 purposes of this section, "owner" includes a park owner as 108.28 defined under section 327C.01, subdivision 6, and "property" 108.29 includes a lot as defined under section 327C.01, subdivision 3. 108.30(b) The certificate of rent constituting property taxes108.31must include the address of the property, including the county,108.32and the property tax parcel identification number and any108.33additional information that the commissioner determines is108.34appropriate.108.35(c) If the owner or managing agent fails to provide the108.36renter with a certificate of rent constituting property taxes,109.1the commissioner shall allocate the net tax on the building to109.2the unit on a square footage basis or other appropriate basis as109.3the commissioner determines. The renter shall supply the109.4commissioner with a statement from the county treasurer that109.5gives the amount of property tax on the parcel, the address and109.6property tax parcel identification number of the property, and109.7the number of units in the building.109.8(d) By January 31 of the year following the year in which109.9the rent was collected, each owner or managing agent shall109.10report to the commissioner on a form prescribed by the109.11commissioner the net tax pertaining to the rental residential109.12part of the property, the total scheduled rent, and the fraction109.13computed under section 290A.03, subdivision 11. A copy of the109.14property tax statement for taxes payable in that year must be109.15attached.109.16 Sec. 11. [REPEALER.] 109.17 (a) Minnesota Statutes 1996, sections 270B.12, subdivision 109.18 11; 276.012; 290A.055; and 290A.26; and Laws 1995, chapter 264, 109.19 article 4, as amended by Laws 1996, chapter 471, article 3, are 109.20 repealed. Notwithstanding Minnesota Statutes, section 645.34, 109.21 the sections of statutes amended by the repealed Laws 1995, 109.22 chapter 264, article 4, as amended by Laws 1996, chapter 471, 109.23 article 3, remain in effect. 109.24 (b) Minnesota Statutes 1996, sections 290A.03, subdivisions 109.25 12a and 14; and 290A.07, subdivisions 2a and 3, are repealed. 109.26 (c) Minnesota Statutes 1996, section 290A.04, subdivision 109.27 2h, is repealed. 109.28 Sec. 12. [EFFECTIVE DATE.] 109.29 Section 1 is effective beginning with tax year 1998. 109.30 Sections 2 to 10 and 11, paragraph (b), are effective for 109.31 refunds payable in 1999 and following years. Section 11, 109.32 paragraph (a), is effective the day following final enactment. 109.33 Section 11, paragraph (c), is effective for taxes payable in 109.34 2002. 109.35 ARTICLE 7 109.36 FISCAL DISPARITIES 110.1 Section 1. Minnesota Statutes 1996, section 276A.01, 110.2 subdivision 4, is amended to read: 110.3 Subd. 4. [RESIDENTIAL PROPERTY.] "Residential property" 110.4 meansthe following categories of propertyany property 110.5 classified as class 1 or class 4, as defined in section 273.13, 110.6excluding that portion of the property that is exempt from110.7taxation pursuant to section 272.02:110.8(1) class 1a, 1b, and 2a property, limited to the homestead110.9dwelling, a garage, and the one acre of land on which the110.10dwelling is located;110.11(2) that portion of class 3 propertythat is used 110.12 exclusively for residential occupancy; and110.13(3) property valued and assessed under section 273.13,110.14subdivision 25, except for hospitals and property valued and110.15assessed under section 273.13, subdivision 25, paragraph (c),110.16clauses (5) and (6), excluding property devoted to temporary and 110.17 seasonal residential occupancy for recreation purposes. 110.18 Sec. 2. Minnesota Statutes 1996, section 276A.01, 110.19 subdivision 5, is amended to read: 110.20 Subd. 5. [GOVERNMENTAL UNIT.] "Governmental unit" means a 110.21 county, city, town, school district, or other taxing unit or 110.22 body, excluding the state of Minnesota, which levies ad valorem 110.23 taxes in whole or in part within the area. 110.24 Sec. 3. Minnesota Statutes 1996, section 276A.01, 110.25 subdivision 16, is amended to read: 110.26 Subd. 16. [LOCAL TAX RATE.] "Local tax rate" means a 110.27 governmental unit's levy, including any portion levied against110.28market value under section 124A.03, subdivision 2a,divided by 110.29 its net tax capacity. 110.30 Sec. 4. Minnesota Statutes 1996, section 276A.04, is 110.31 amended to read: 110.32 276A.04 [INCREASE IN NET TAX CAPACITY.] 110.33 ByJulyAugust 15 of 1997 and each subsequent year, the 110.34 auditor of each county in the area shall determine the amount, 110.35 if any, by which the net tax capacity determinedin the110.36preceding yearpursuant to section 276A.03, of 111.1 commercial-industrial property subject to taxation within each 111.2 municipality in the county exceeds the net tax capacity in 1995 111.3 of commercial-industrial property subject to taxation within 111.4 that municipality. If a municipality is located in two or more 111.5 counties within the area, the auditors of those counties shall 111.6 certify the data required by section 276A.03 to the county 111.7 auditor responsible for allocating the levies of that 111.8 municipality between or among the affected counties. That 111.9 county auditor shall determine the amount of the net excess, if 111.10 any, for the municipality under this section, and certify that 111.11 amount under section 276A.05. The increase in total net tax 111.12 capacity determined by this section must be reduced by the 111.13 amount of any decreases in the net tax capacity of 111.14 commercial-industrial property resulting from any court 111.15 decisions, court-related stipulation agreements, or abatements 111.16 for a prior year, and only in the amount of such decreases made 111.17 during the 12-month period ending on May 1 of the current 111.18 assessment year, where the decreases, if originally reflected in 111.19 the determination of a prior year's net tax capacity under 111.20 section 276A.03, would have resulted in a smaller contribution 111.21 from the municipality in that year. An adjustment for the 111.22 decreases shall be made only if the municipality made a 111.23 contribution in a prior year based on the higher net tax 111.24 capacity of the commercial-industrial property. 111.25 Sec. 5. Minnesota Statutes 1996, section 276A.05, 111.26 subdivision 1, is amended to read: 111.27 Subdivision 1. [AREAWIDE NET TAX CAPACITY.] Each county 111.28 auditor shall certify the determinations under sections 276A.03 111.29 and 276A.04 to the administrative auditor on or before August1111.30 15 of each year. The administrative auditor shall determine an 111.31 amount equal to4020 percent of the sum of the amounts 111.32 certified pursuant to section 276A.04. The resulting amount 111.33 shall be known as the "areawide net tax capacity for 111.34 ........(year)." 111.35 Sec. 6. Minnesota Statutes 1996, section 276A.05, 111.36 subdivision 5, is amended to read: 112.1 Subd. 5. [CERTIFICATION.] The product of the procedure 112.2 prescribed by subdivision 4 shall be known as the "areawide net 112.3 tax capacity for ......(year) attributable to 112.4 ..........(municipality)." The administrative auditor shall 112.5 certify the product to the auditor of the county in which the 112.6 municipality is located on or beforeAugustSeptember 15. 112.7 Sec. 7. Minnesota Statutes 1996, section 276A.06, 112.8 subdivision 2, is amended to read: 112.9 Subd. 2. [DEFINITION.] The net tax capacity of a 112.10 governmental unit is its net tax capacity as determined in 112.11 accordance with other provisions of law including section 112.12 469.177, subdivision 3, subject to the following adjustments: 112.13 (a) There must be subtracted from its net tax capacity, in 112.14 each municipality in which the governmental unit exercises ad 112.15 valorem taxing jurisdiction, an amount that bears the same 112.16 proportion to4020 percent of the amount certified in that year 112.17 pursuant to sections 276A.04 and 276A.05 for the municipality as 112.18 the totalpreceding year'snet tax capacity of 112.19 commercial-industrial property which is subject to the taxing 112.20 jurisdiction of the governmental unit within the municipality, 112.21 determined without regard to section 469.177, subdivision 3, 112.22 bears to the totalpreceding year'snet tax capacity of 112.23 commercial-industrial property within the municipality, 112.24 determined without regard to section 469.177, subdivision 3. 112.25 (b) There must be added to its net tax capacity, in each 112.26 municipality in which the governmental unit exercises ad valorem 112.27 taxing jurisdiction, an amount which bears the same proportion 112.28 to the areawide net tax capacity for the year attributable to 112.29 that municipality as the totalpreceding year'snet tax capacity 112.30 of residential property which is subject to the taxing 112.31 jurisdiction of the governmental unit within the municipality 112.32 bears to the totalpreceding year'snet tax capacity of 112.33 residential property of the municipality. 112.34 Sec. 8. Minnesota Statutes 1996, section 276A.06, 112.35 subdivision 3, is amended to read: 112.36 Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall 113.1 apportion the levy of each governmental unit in the county in 113.2 the manner prescribed by this subdivision. The auditor shall: 113.3 (a)by August 20 of 1997 and each subsequent year,113.4 determine the areawide portion of the levy for each governmental 113.5 unit by multiplying the local tax rate of the governmental unit 113.6 for theprecedingcurrent levy year times the distribution value 113.7 set forth in subdivision 2, clause (b); and 113.8 (b)by September 5 of 1997 and each subsequent year,113.9 determine the local portion of the current year's levy by 113.10 subtracting the resulting amount from clause (a) from the 113.11 governmental unit's current year's levy. 113.12 Sec. 9. Minnesota Statutes 1996, section 276A.06, 113.13 subdivision 5, is amended to read: 113.14 Subd. 5. [AREAWIDE TAX RATE.] (a) On or beforeAugust 25113.15 February 5 of1997 andeachsubsequentyear, the county auditor 113.16 shall certify to the administrative auditor that portion of the 113.17 levy of each governmental unit determined pursuant to 113.18 subdivision 3, clause (a). The administrative auditor shall 113.19 then determine the areawide tax rate sufficient to yield an 113.20 amount equal to the sum of the levies from the areawide net tax 113.21 capacity. 113.22 (b) On or beforeSeptember 1February 10 of each year, the 113.23 administrative auditor shall certify the areawide tax rate to 113.24 each of the county auditors. 113.25 For the purposes of the notice required under section 113.26 275.065, the deadline for the certification under paragraph (a) 113.27 is October 10, and the deadline for certification under 113.28 paragraph (b) is October 15. 113.29 For any governmental unit for which the county auditor has 113.30 not yet determined the local tax rate by January 31, the county 113.31 auditor shall determine the areawide portion of the levy based 113.32 on an estimated tax rate. In the following year, the 113.33 distribution levy of the unit must be adjusted to correct for 113.34 the difference between the distribution levy actually received 113.35 and the distribution levy that would have been received if the 113.36 actual tax rate had been used. 114.1 Sec. 10. Minnesota Statutes 1996, section 276A.06, 114.2 subdivision 7, is amended to read: 114.3 Subd. 7. [APPLICATION TO COMMERCIAL-INDUSTRIAL PROPERTY.] 114.4 The areawide tax rate determined in accordance with subdivision 114.5 5 applies to each commercial-industrial property subject to 114.6 taxation within a municipality, including property located 114.7 within any tax increment financing district, as defined in 114.8 section 469.174, subdivision 9, to that portion of the net tax 114.9 capacity of theitemproperty which bears the same proportion to 114.10 its total net tax capacity as4020 percent of the amount 114.11 determined pursuant to sections 276A.04 and 276A.05 is to the 114.12 amount determined pursuant to section 276A.03. The rate of 114.13 taxation determined in accordance with subdivision 4 applies in 114.14 the taxation of the remainder of the net tax capacity of the 114.15itemproperty. 114.16 Sec. 11. Minnesota Statutes 1996, section 473F.02, 114.17 subdivision 4, is amended to read: 114.18 Subd. 4. [RESIDENTIAL PROPERTY.] "Residential property" 114.19 meansthe following categories of propertyany property 114.20 classified as class 1 or class 4, as defined in section 114.21 273.13,excluding that portion of such property exempt from114.22taxation pursuant to section 272.02:114.23(a) Class 1, 1b, 2a, 4a, 4b, 4c, and 4d property except114.24resorts and property classified under section 273.13,114.25subdivision 25, paragraph (c), clause (6);114.26(b) and that portion of class 3a, 3b, and 5 propertythat 114.27 is used exclusively for residential occupancy, excluding 114.28 property devoted to temporary and seasonal residential occupancy 114.29 for recreation purposes. 114.30 Sec. 12. Minnesota Statutes 1996, section 473F.02, 114.31 subdivision 5, is amended to read: 114.32 Subd. 5. [GOVERNMENTAL UNIT.] "Governmental unit" means a 114.33 county, city, town, school district, or other taxing unit or 114.34 body, excluding the state of Minnesota, which levies ad valorem 114.35 taxes in whole or in part within the area. 114.36 Sec. 13. Minnesota Statutes 1996, section 473F.02, 115.1 subdivision 24, is amended to read: 115.2 Subd. 24. [LOCAL TAX RATE.] "Local tax rate" means a 115.3 governmental unit's levy, including any portion levied against115.4market value under section 124A.03, subdivision 2a,divided by 115.5 its net tax capacity. 115.6 Sec. 14. Minnesota Statutes 1996, section 473F.06, is 115.7 amended to read: 115.8 473F.06 [INCREASE IN NET TAX CAPACITY.] 115.9 On or beforeJulyAugust 15 of each year, the auditor of 115.10 each county in the area shall determine the amount, if any, by 115.11 which the net tax capacity determinedin the preceding year115.12 under section 473F.05, of commercial-industrial property subject 115.13 to taxation within each municipality in the auditor's county 115.14 exceeds the net tax capacity in 1971 of commercial-industrial 115.15 property subject to taxation within that municipality. If a 115.16 municipality is located in two or more counties within the area, 115.17 the auditors of those counties shall certify the data required 115.18 by section 473F.05 to the county auditor who is responsible 115.19 under other provisions of law for allocating the levies of that 115.20 municipality between or among the affected counties. That 115.21 county auditor shall determine the amount of the net excess, if 115.22 any, for the municipality under this section, and certify that 115.23 amount under section 473F.07. Notwithstanding any other 115.24 provision of sections 473F.01 to 473F.13 to the contrary, in the 115.25 case of a municipality which is designated on July 24, 1971, as 115.26 a redevelopment area under section 401(a)(4) of the Public Works 115.27 and Economic Development Act of 1965, Public Law Number 89-136, 115.28 the increase in its net tax capacity of commercial-industrial 115.29 property for purposes of this section shall be determined in 115.30 each year by using as a base the net tax capacity of 115.31 commercial-industrial property in that municipality in the 1989 115.32 assessment year, rather than the net tax capacity of such 115.33 property in 1971. The increase in total net tax capacity 115.34 determined by this section shall be reduced by the amount of any 115.35 decreases in net tax capacity of commercial-industrial property 115.36 resulting from any court decisions, court related stipulation 116.1 agreements, or abatements for a prior year, and only in the 116.2 amount of such decreases made during the 12-month period ending 116.3 on May 1 of the current assessment year, where such decreases, 116.4 if originally reflected in the determination of a prior year's 116.5 net tax capacity under section 473F.05, would have resulted in a 116.6 smaller contribution from the municipality in that year. An 116.7 adjustment for such decreases shall be made only if the 116.8 municipality made a contribution in a prior year based on the 116.9 higher net tax capacity of the commercial-industrial property. 116.10 Sec. 15. Minnesota Statutes 1996, section 473F.07, 116.11 subdivision 1, is amended to read: 116.12 Subdivision 1. [AREAWIDE NET TAX CAPACITY.] Each county 116.13 auditor shall certify the determinations under sections 473F.05 116.14 and 473F.06 to the administrative auditor on or before August1116.15 15 of each year. 116.16 The administrative auditor shall determine an amount equal 116.17 to4020 percent of the sum of the amounts certified under 116.18 section 473F.06. The resulting amount shall be known as the 116.19 "areawide net tax capacity for ........(year)." 116.20 Sec. 16. Minnesota Statutes 1996, section 473F.07, 116.21 subdivision 5, is amended to read: 116.22 Subd. 5. [CERTIFICATION TO COUNTY AUDITOR.] The result of 116.23 the procedure prescribed by subdivision 4 shall be known as the 116.24 "areawide net tax capacity for ........(year) attributable to 116.25 ..................(municipality)." The administrative auditor 116.26 shall certify such product to the auditor of the county in which 116.27 the municipality is located on or beforeAugustSeptember 15. 116.28 Sec. 17. Minnesota Statutes 1996, section 473F.08, 116.29 subdivision 2, is amended to read: 116.30 Subd. 2. [COMPUTATION OF NET TAX CAPACITY.] The net tax 116.31 capacity of a governmental unit is its net tax capacity, as 116.32 determined in accordance with other provisions of law including 116.33 section 469.177, subdivision 3, subject to the following 116.34 adjustments: 116.35 (a) There shall be subtracted from its net tax capacity, in 116.36 each municipality in which the governmental unit exercises ad 117.1 valorem taxing jurisdiction, an amount which bears the same 117.2 proportion to4020 percent of the amount certified in that year 117.3 under sections 473F.06 and 473F.07 for the municipality as the 117.4 totalpreceding year'snet tax capacity of commercial-industrial 117.5 property which is subject to the taxing jurisdiction of the 117.6 governmental unit within the municipality, determined without 117.7 regard to section 469.177, subdivision 3, bears to the total 117.8preceding year'snet tax capacity of commercial-industrial 117.9 property within the municipality, determined without regard to 117.10 section 469.177, subdivision 3; 117.11 (b) There shall be added to its net tax capacity, in each 117.12 municipality in which the governmental unit exercises ad valorem 117.13 taxing jurisdiction, an amount which bears the same proportion 117.14 to the areawide net tax capacity for the year attributable to 117.15 that municipality as the totalpreceding year'snet tax capacity 117.16 of residential property which is subject to the taxing 117.17 jurisdiction of the governmental unit within the municipality 117.18 bears to the totalpreceding year'snet tax capacity of 117.19 residential property of the municipality. 117.20 Sec. 18. Minnesota Statutes 1996, section 473F.08, 117.21 subdivision 3, is amended to read: 117.22 Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall 117.23 apportion the levy of each governmental unit in the auditor's 117.24 county in the manner prescribed by this subdivision. The 117.25 auditor shall: 117.26 (a)by August 20,determine the areawide portion of the 117.27 levy for each governmental unit by multiplying the local tax 117.28 rate of the governmental unit for theprecedingcurrent levy 117.29 year times the distribution value set forth in subdivision 2, 117.30 clause (b); and 117.31 (b)by September 5,determine the local portion of the 117.32 current year's levy by subtracting the resulting amount from 117.33 clause (a) from the governmental unit's current year's levy. 117.34 Sec. 19. Minnesota Statutes 1996, section 473F.08, 117.35 subdivision 5, is amended to read: 117.36 Subd. 5. [AREAWIDE TAX RATE.] (a) On or beforeAugust 25118.1 February 5 of each year, the county auditor shall certify to the 118.2 administrative auditor that portion of the levy of each 118.3 governmental unit determined under subdivisions 3, clause (a), 118.4 3a, and 3b. The administrative auditor shall then determine the 118.5 areawide tax rate sufficient to yield an amount equal to the sum 118.6 of such levies from the areawide net tax capacity. 118.7 (b) On or beforeSeptember 1February 10 of each year, the 118.8 administrative auditor shall certify the areawide tax rate to 118.9 each of the county auditors. 118.10 For the purposes of the notice required under section 118.11 275.065, the deadline for the certification under paragraph (a) 118.12 is October 10, and the deadline for certification under 118.13 paragraph (b) is October 15. 118.14 For any governmental unit for which the county auditor has 118.15 not yet determined the local tax rate by January 31, the county 118.16 auditor shall determine the areawide portion of the levy based 118.17 on an estimated tax rate. In the following year, the 118.18 distribution levy of the unit must be adjusted to correct for 118.19 the difference between the distribution levy actually received 118.20 and the distribution levy that would have been received if the 118.21 actual tax rate had been used. 118.22 Sec. 20. Minnesota Statutes 1996, section 473F.08, 118.23 subdivision 6, is amended to read: 118.24 Subd. 6. [APPLICATION TO COMMERCIAL-INDUSTRIAL PROPERTY.] 118.25 The areawide tax rate determined in accordance with subdivision 118.26 5 shall apply to each commercial-industrial property subject to 118.27 taxation within a municipality, including property located 118.28 within any tax increment financing district, as defined in 118.29 section 469.174, subdivision 9, to that portion of the net tax 118.30 capacity of theitemproperty which bears the same proportion to 118.31 its total net tax capacity as4020 percent of the amount 118.32 determined under sections 473F.06 and 473F.07 is to the amount 118.33 determined under section 473F.05. The tax rate determined in 118.34 accordance with subdivision 4 shall apply in the taxation of the 118.35 remainder of the net tax capacity of theitemproperty. 118.36 Sec. 21. [REPEALER.] 119.1 Minnesota Statutes 1996, sections 276A.06, subdivision 9; 119.2 and 473F.08, subdivision 8a, are repealed. 119.3 Sec. 22. [EFFECTIVE DATE.] 119.4 This article is effective for taxes payable in 1999 and 119.5 subsequent years. 119.6 ARTICLE 8 119.7 MISCELLANEOUS 119.8 Section 1. Minnesota Statutes 1996, section 271.01, 119.9 subdivision 5, is amended to read: 119.10 Subd. 5. [JURISDICTION.] The tax court shall have 119.11 statewide jurisdiction. Except for an appeal to the supreme 119.12 court or any other appeal allowed under this subdivision, the 119.13 tax court shall be the sole, exclusive, and final authority for 119.14 the hearing and determination of all questions of law and fact 119.15 arising under the tax laws of the state, as defined in this 119.16 subdivision, in those cases that have been appealed to the tax 119.17 court and in any case that has been transferred by the district 119.18 court to the tax court. The tax court shall have no 119.19 jurisdiction in any case that does not arise under the tax laws 119.20 of the state or in any criminal case or in any case determining 119.21 or granting title to real property or in any case that is under 119.22 the probate jurisdiction of the district court. The small 119.23 claims division of the tax court shall have no jurisdiction in 119.24 any case dealing with property valuation or assessment for 119.25 property tax purposes until the taxpayer has appealed the 119.26 valuation or assessment to the county board of equalization, and 119.27 in those towns and cities which have not transferred their 119.28 duties to the county, the town or city board of equalizationand119.29to the county board of equalization, except for those taxpayers 119.30 whose original assessments are determined by the commissioner of 119.31 revenue. The tax court shall have no jurisdiction in any case 119.32 involving an order of the state board of equalization unless a 119.33 taxpayer contests the valuation of property. Laws governing 119.34 taxes, aids, and related matters administered by the 119.35 commissioner of revenue, laws dealing with property valuation, 119.36 assessment or taxation of property for property tax purposes, 120.1 and any other laws that contain provisions authorizing review of 120.2 taxes, aids, and related matters by the tax court shall be 120.3 considered tax laws of this state subject to the jurisdiction of 120.4 the tax court. This subdivision shall not be construed to 120.5 prevent an appeal, as provided by law, to an administrative 120.6 agency, board of equalization, review under section 274.13, 120.7 subdivision 1c, or to the commissioner of revenue. Wherever 120.8 used in this chapter, the term commissioner shall mean the 120.9 commissioner of revenue, unless otherwise specified. 120.10 Sec. 2. Minnesota Statutes 1996, section 273.11, 120.11 subdivision 1a, is amended to read: 120.12 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 120.13 property classified as agricultural homestead or nonhomestead, 120.14 residential homestead or nonhomestead, or noncommercial seasonal 120.15 recreational residential, the assessor shall compare the value 120.16 with that determined in the preceding assessment. The amount of 120.17 the increase entered in the current assessment shall not exceed 120.18 the greater of (1) ten percent of the value in the preceding 120.19 assessment, or (2)one-thirdone-fourth of the difference 120.20 between the current assessment and the preceding assessment. 120.21 This limitation shall not apply to increases in value due to 120.22 improvements. For purposes of this subdivision, the term 120.23 "assessment" means the value prior to any exclusion under 120.24 subdivision 16. 120.25 The provisions of this subdivision shall be in effect only 120.26 for assessment years 1993 through19972001. 120.27 For purposes of the assessment/sales ratio study conducted 120.28 under section 124.2131, and the computation of state aids paid 120.29 under chapters 124, 124A, and 477A, market values and net tax 120.30 capacities determined under this subdivision and subdivision 16, 120.31 shall be used. 120.32 Sec. 3. Minnesota Statutes 1996, section 273.121, is 120.33 amended to read: 120.34 273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 120.35 Any county assessor or city assessor having the powers of a 120.36 county assessor, valuing or classifying taxable real property 121.1 shall in each year notify those persons whose property is to be 121.2 assessed or reclassified that year if the person's address is 121.3 known to the assessor, otherwise the occupant of the property. 121.4 The notice shall be in writing and shall be sent by ordinary 121.5 mail at least ten days before the meeting of the local board of 121.6 review or equalization under section 274.01 or the review 121.7 process established under section 274.13, subdivision 1c. It 121.8 shall contain: (1) the market value, (2) the limited market 121.9 value under section 273.11, subdivision 1a, (3) the qualifying 121.10 amount of any improvements under section 273.11, subdivision 16, 121.11 (4) the market value subject to taxation after subtracting the 121.12 amount of any qualifying improvements, (5) the new 121.13 classification, (6) a note that if the property is homestead and 121.14 at least 35 years old, improvements made to the property may be 121.15 eligible for a valuation exclusion under section 273.11, 121.16 subdivision 16, (7) the assessor's office address, and (8) the 121.17 dates, places, and times set for the meetings of the local board 121.18 of review or equalization, the review process established under 121.19 section 274.13, subdivision 1c, and the county board of 121.20 equalization. If the assessment roll is not complete, the 121.21 notice shall be sent by ordinary mail at least ten days prior to 121.22 the date on which the board of review has adjourned. The 121.23 assessor shall attach to the assessment roll a statement that 121.24 the notices required by this section have been mailed. Any 121.25 assessor who is not provided sufficient funds from the 121.26 assessor's governing body to provide such notices, may make 121.27 application to the commissioner of revenue to finance such 121.28 notices. The commissioner of revenue shall conduct an 121.29 investigation and, if satisfied that the assessor does not have 121.30 the necessary funds, issue a certification to the commissioner 121.31 of finance of the amount necessary to provide such notices. The 121.32 commissioner of finance shall issue a warrant for such amount 121.33 and shall deduct such amount from any state payment to such 121.34 county or municipality. The necessary funds to make such 121.35 payments are hereby appropriated. Failure to receive the notice 121.36 shall in no way affect the validity of the assessment, the 122.1 resulting tax, the procedures of any board of review or 122.2 equalization, or the enforcement of delinquent taxes by 122.3 statutory means. 122.4 Sec. 4. Minnesota Statutes 1996, section 273.124, 122.5 subdivision 13, is amended to read: 122.6 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 122.7 the homestead requirements under subdivision 1 must file a 122.8 homestead application with the county assessor to initially 122.9 obtain homestead classification. 122.10 (b)On or beforeIn January2, 1993, each county assessor122.11 1998, and every four years thereafter, the commissioner of 122.12 revenue shall mail a homestead application to the owner of each 122.13 parcel of property within thecountystate which was classified 122.14 as homestead for the1992immediately preceding assessment year. 122.15 Each county assessor shall furnish the commissioner of revenue 122.16 with a list of the owners and addresses of all homestead parcels 122.17 within the county. The format and contents of a uniform 122.18 homestead application shall be prescribed by the commissioner of 122.19 revenue.The commissioner shall consult with the chairs of the122.20house and senate tax committees on the contents of the homestead122.21application form.The application must clearly inform the 122.22 taxpayer that this application must be signed by all owners who 122.23 occupy the property or by the qualifying relative and returned 122.24 to the county assessor in order for the property to continue 122.25 receiving homestead treatment. The envelope containing the 122.26 homestead application shall clearly identify its contents and 122.27 alert the taxpayer of its necessary immediate response. An 122.28 envelope addressed to the county assessor for the appropriate 122.29 county shall be sent to the taxpayer with the application. 122.30 (c) Every property owner applying for homestead 122.31 classification must furnishto the county assessorthe social 122.32 security number of each occupant who is listed as an owner of 122.33 the property on the deed of record, the name and address of each 122.34 owner who does not occupy the property, and the name and social 122.35 security number of each owner's spouse who occupies the 122.36 property. The application must be signed by each owner who 123.1 occupies the property and by each owner's spouse who occupies 123.2 the property, or, in the case of property that qualifies as a 123.3 homestead under subdivision 1, paragraph (c), by the qualifying 123.4 relative. 123.5 If a property owner occupies a homestead, the property 123.6 owner's spouse may not claim another property as a homestead 123.7 unless the property owner and the property owner's spouse file 123.8 with the assessor an affidavit or other proof required by the 123.9 assessor stating that the property qualifies as a homestead 123.10 under subdivision 1, paragraph (e). 123.11 Owners or spouses occupying residences owned by their 123.12 spouses and previously occupied with the other spouse, either of 123.13 whom fail to include the other spouse's name and social security 123.14 number on the homestead application or provide the affidavits or 123.15 other proof requested, will be deemed to have elected to receive 123.16 only partial homestead treatment of their residence. The 123.17 remainder of the residence will be classified as nonhomestead 123.18 residential. When an owner or spouse's name and social security 123.19 number appear on homestead applications for two separate 123.20 residences and only one application is signed, the owner or 123.21 spouse will be deemed to have elected to homestead the residence 123.22 for which the application was signed. 123.23 The social security numbers or affidavits or other proofs 123.24 of the property owners and spouses are private data on 123.25 individuals as defined by section 13.02, subdivision 12, but, 123.26 notwithstanding that section, the private data may be disclosed 123.27 to the commissioner of revenue, or, for purposes of proceeding 123.28 under the revenue recapture act to recover personal property 123.29 taxes owing, to the county treasurer. 123.30 (d) If residential real estate is occupied and used for 123.31 purposes of a homestead by a relative of the owner and qualifies 123.32 for a homestead under subdivision 1, paragraph (c), in order for 123.33 the property to receive homestead status, a homestead 123.34 application must be filed with the assessor. The social 123.35 security number of each relative occupying the property and the 123.36 social security number of each owner who is related to an 124.1 occupant of the property shall be required on the homestead 124.2 application filed under this subdivision. If a different 124.3 relative of the owner subsequently occupies the property, the 124.4 owner of the property must notify the assessor within 30 days of 124.5 the change in occupancy. The social security number of a 124.6 relative occupying the property is private data on individuals 124.7 as defined by section 13.02, subdivision 12, but may be 124.8 disclosed to the commissioner of revenue. 124.9 (e) The homestead application shall also notify the 124.10 property owners that the application filed under this section 124.11 willnotbe mailedannually and that if the property is granted124.12homestead status for the 1993 assessment, or any assessment year124.13thereafter, that same property shall remain classified as124.14homestead until the property is sold or transferred to another124.15person, or the owners, the spouse of the owner, or the relatives124.16no longer use the property as their homesteadevery four years 124.17 by the commissioner of revenue. Upon the sale or transfer of 124.18 the homestead property, a certificate of value must be timely 124.19 filed with the county auditor as provided under section 272.115. 124.20 Failure to notify the assessor within 30 days that the property 124.21 has been sold, transferred, or that the owner, the spouse of the 124.22 owner, or the relative is no longer occupying the property as a 124.23 homestead, shall result in the penalty provided under this 124.24 subdivision and the property will lose its current homestead 124.25 status. 124.26 (f) If the homestead application is not returned within 30 124.27 days, the county will notify the commissioner of revenue and the 124.28 commissioner will send a second application to the present 124.29 owners of record. The notice of proposed property taxes 124.30 prepared under section 275.065, subdivision 3, shall reflect the 124.31 property's classification.Beginning with assessment year 1993124.32for all properties,If a homestead application has not been 124.33 filed with the county by December 15, the assessor shall 124.34 classify the property as nonhomestead for the current assessment 124.35 year for taxes payable in the following year, provided that the 124.36 owner may be entitled to receive the homestead classification by 125.1 proper application under section 375.192. 125.2 (g) At the request of the commissioner, each county must 125.3 give the commissioner a list that includes the name and social 125.4 security number of each property owner and the property owner's 125.5 spouse occupying the property, or relative of a property owner, 125.6 applying for homestead classification under this subdivision. 125.7 The commissioner shall use the information provided on the lists 125.8 as appropriate under the law, including for the detection of 125.9 improper claims by owners, or relatives of owners, under chapter 125.10 290A. 125.11 (h) If the commissioner finds that a property owner may be 125.12 claiming a fraudulent homestead, the commissioner shall notify 125.13 the appropriate counties. Within 90 days of the notification, 125.14 the county assessor shall investigate to determine if the 125.15 homestead classification was properly claimed. If the property 125.16 owner does not qualify, the county assessor shall notify the 125.17 county auditor who will determine the amount of homestead 125.18 benefits that had been improperly allowed. For the purpose of 125.19 this section, "homestead benefits" means the tax reduction 125.20 resulting from the classification as a homestead under section 125.21 273.13, the taconite homestead credit under section 273.135, and 125.22 the supplemental homestead credit under section 273.1391. 125.23 The county auditor shall send a notice to the person who 125.24 owned the affected property at the time the homestead 125.25 application related to the improper homestead was filed, 125.26 demanding reimbursement of the homestead benefits plus a penalty 125.27 equal to 100 percent of the homestead benefits. The person 125.28 notified may appeal the county's determination by serving copies 125.29 of a petition for review with county officials as provided in 125.30 section 278.01 and filing proof of service as provided in 125.31 section 278.01 with the Minnesota tax court within 60 days of 125.32 the date of the notice from the county. Procedurally, the 125.33 appeal is governed by the provisions in chapter 271 which apply 125.34 to the appeal of a property tax assessment or levy, but without 125.35 requiring any prepayment of the amount in controversy. If the 125.36 amount of homestead benefits and penalty is not paid within 60 126.1 days, and if no appeal has been filed, the county auditor shall 126.2 certify the amount of taxes and penalty to the county 126.3 treasurer. The county treasurer will add interest to the unpaid 126.4 homestead benefits and penalty amounts at the rate provided for 126.5 delinquent personal property taxes for the period beginning 60 126.6 days after demand for payment was made until payment. If the 126.7 person notified is the current owner of the property, the 126.8 treasurer may add the total amount of benefits, penalty, 126.9 interest, and costs to the real estate taxes otherwise payable 126.10 on the property in the following year. If the person notified 126.11 is not the current owner of the property, the treasurer may 126.12 collect the amounts due under the revenue recapture act in 126.13 chapter 270A, or use any of the powers granted in sections 126.14 277.20 and 277.21 without exclusion, to enforce payment of the 126.15 benefits, penalty, interest, and costs, as if those amounts were 126.16 delinquent tax obligations of the person who owned the property 126.17 at the time the application related to the improperly allowed 126.18 homestead was filed. The treasurer may relieve a prior owner of 126.19 personal liability for the benefits, penalty, interest, and 126.20 costs, and instead extend those amounts on the tax lists against 126.21 the property for taxes payable in the following year to the 126.22 extent that the current owner agrees in writing. 126.23 (i) Any amount of homestead benefits recovered by the 126.24 county from the property owner shall be distributed to the 126.25 county, city or town, and school district where the property is 126.26 located in the same proportion that each taxing district's levy 126.27 was to the total of the three taxing districts' levy for the 126.28 current year. Any amount recovered attributable to taconite 126.29 homestead credit shall be transmitted to the St. Louis county 126.30 auditor to be deposited in the taconite property tax relief 126.31 account. Any amount recovered that is attributable to 126.32 supplemental homestead credit is to be transmitted to the 126.33 commissioner of revenue for deposit in the general fund of the 126.34 state treasury. The total amount of penalty collected must be 126.35 deposited in the county general fund. 126.36 (j) If a property owner has applied for more than one 127.1 homestead and the county assessors cannot determine which 127.2 property should be classified as homestead, the county assessors 127.3 will refer the information to the commissioner. The 127.4 commissioner shall make the determination and notify the 127.5 counties within 60 days. 127.6 (k) In addition to lists of homestead properties, the 127.7 commissioner may ask the counties to furnish lists of all 127.8 properties and the record owners. 127.9 Sec. 5. Minnesota Statutes 1996, section 273.135, 127.10 subdivision 2, is amended to read: 127.11 Subd. 2. The amount of the reduction authorized by 127.12 subdivision 1 shall be: 127.13 (a) In the case of property located within the boundaries 127.14 of a municipality which meets the qualifications prescribed in 127.15 section 273.134, 66 percent of the tax, provided that the 127.16 reduction shall not exceed the maximum amounts specified in 127.17 clause (c), and shall not exceed an amount sufficient to reduce 127.18 the effective tax rate on each parcel of property to 95 percent 127.19 of the base year effective tax rate. In no case will the 127.20 reduction for each homestead resulting from this credit be less 127.21 than $10. 127.22 (b) In the case of property located within the boundaries 127.23 of a school district which qualifies as a tax relief area but 127.24 which is outside the boundaries of a municipality which meets 127.25 the qualifications prescribed in section 273.134, 57 percent of 127.26 the tax, provided that the reduction shall not exceed the 127.27 maximum amounts specified in clause (c), and shall not exceed an 127.28 amount sufficient to reduce the effective tax rate on each 127.29 parcel of property to 95 percent of the base year effective tax 127.30 rate. In no case will the reduction for each homestead 127.31 resulting from this credit be less than $10. 127.32 (c) The maximum reduction of the tax is $225.40 on property 127.33 described in clause (a) and $200.10 on property described in 127.34 clause (b), for taxes payable in 1985. These maximum amounts 127.35 shall increase by $15 times the quantity one minus the homestead 127.36 credit equivalency percentage per year for taxes payable in 1986 128.1and subsequent yearsthrough taxes payable in 1998. Beginning 128.2 with taxes payable in 1999 and thereafter, the maximum reduction 128.3 of the tax under this subdivision will be $315.10. 128.4 For the purposes of this subdivision, "homestead credit 128.5 equivalency percentage" means one minus the ratio of the net 128.6 class rate to the gross class rate applicable to the first 128.7 $72,000 of the market value of residential homesteads, 128.8 "effective tax rate" means tax divided by the market value of a 128.9 property, and the "base year effective tax rate" means the 128.10 payable 1988 tax on a property with an identical market value to 128.11 that of the property receiving the credit in the current year 128.12 after the application of the credits payable under Minnesota 128.13 Statutes 1988, section 273.13, subdivisions 22 and 23, and this 128.14 section, divided by the market value of the property. 128.15 Sec. 6. Minnesota Statutes 1996, section 273.1391, 128.16 subdivision 2, is amended to read: 128.17 Subd. 2. The amount of the reduction authorized by 128.18 subdivision 1 shall be: 128.19 (a) In the case of property located within a school 128.20 district which does not meet the qualifications of section 128.21 273.134 as a tax relief area, but which is located in a county 128.22 with a population of less than 100,000 in which taconite is 128.23 mined or quarried and wherein a school district is located which 128.24 does meet the qualifications of a tax relief area, and provided 128.25 that at least 90 percent of the area of the school district 128.26 which does not meet the qualifications of section 273.134 lies 128.27 within such county, 57 percent of the tax on qualified property 128.28 located in the school district that does not meet the 128.29 qualifications of section 273.134, provided that the amount of 128.30 said reduction shall not exceed the maximum amounts specified in 128.31 clause (c), and shall not exceed an amount sufficient to reduce 128.32 the effective tax rate on each parcel of property to the product 128.33 of 95 percent of the base year effective tax rate multiplied by 128.34 the ratio of the current year's tax rate to the payable 1989 tax 128.35 rate. In no case will the reduction for each homestead 128.36 resulting from this credit be less than $10. The reduction 129.1 provided by this clause shall only be applicable to property 129.2 located within the boundaries of the county described therein. 129.3 (b) In the case of property located within a school 129.4 district which does not meet the qualifications of section 129.5 273.134 as a tax relief area, but which is located in a school 129.6 district in a county containing a city of the first class and a 129.7 qualifying municipality, but not in a school district containing 129.8 a city of the first class or adjacent to a school district 129.9 containing a city of the first class unless the school district 129.10 so adjacent contains a qualifying municipality, 57 percent of 129.11 the tax, but not to exceed the maximums specified in clause (c), 129.12 and shall not exceed an amount sufficient to reduce the 129.13 effective tax rate on each parcel of property to the product of 129.14 95 percent of the base year effective tax rate multiplied by the 129.15 ratio of the current year's tax rate to the payable 1989 tax 129.16 rate. In no case will the reduction for each homestead 129.17 resulting from this credit be less than $10. 129.18 (c) The maximum reduction of the tax is $200.10 for taxes 129.19 payable in 1985. This maximum amount shall increase by $15 129.20 multiplied by the quantity one minus the homestead credit 129.21 equivalency percentage per year for taxes payable in 1986and129.22subsequent yearsthrough taxes payable in 1998. Beginning with 129.23 taxes payable in 1999 and thereafter, the maximum reduction of 129.24 the tax under this subdivision will be $289.80. 129.25 For the purposes of this subdivision, "homestead credit 129.26 equivalency percentage" means one minus the ratio of the net 129.27 class rate to the gross class rate applicable to the first 129.28 $72,000 of the market value of residential homesteads, and 129.29 "effective tax rate" means tax divided by the market value of a 129.30 property, and the "base year effective tax rate" means the 129.31 payable 1988 tax on a property with an identical market value to 129.32 that of the property receiving the credit in the current year 129.33 after application of the credits payable under Minnesota 129.34 Statutes 1988, section 273.13, subdivisions 22 and 23, and this 129.35 section, divided by the market value of the property. 129.36 Sec. 7. Minnesota Statutes 1996, section 274.01, is 130.1 amended to read: 130.2 274.01 [BOARD OF REVIEW.] 130.3 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 130.4 GRIEVANCES.] (a) The town board of a town, or the council or 130.5 other governing body of a city, is the board of review 130.6 except (1) in cities whose charters provide for a board of 130.7 equalization, or (2) in any city or town that has transferred 130.8 its local board of review power and duties to the county board 130.9 as provided in subdivision 3. The county assessor shall fix a 130.10 day and time when the board or the board of equalization shall 130.11 meet in the assessment districts of the county. On or before 130.12 February 15 of each year the assessor shall give written notice 130.13 of the time to the city or town clerk. Notwithstanding the 130.14 provisions of any charter to the contrary, the meetings must be 130.15 held between April 1 and May 31 each year. The clerk shall give 130.16 published and posted notice of the meeting at least ten days 130.17 before the date of the meeting. 130.18 If in any county, at least 25 percent of the total net tax 130.19 capacity of a city or town is noncommercial seasonal residential 130.20 recreational property classified under section 273.13, 130.21 subdivision 25, the county must hold two countywide 130.22 informational meetings on Saturdays. The meetings will allow 130.23 noncommercial seasonal residential recreational taxpayers to 130.24 discuss their property valuation with the appropriate assessment 130.25 staff. These Saturday informational meetings must be scheduled 130.26 to allow the owner of the noncommercial seasonal residential 130.27 recreational property the opportunity to attend one of the 130.28 meetings prior to the scheduled board of review for their city 130.29 or town. The Saturday meeting dates must be contained on the 130.30 notice of valuation of real property under section 273.121. 130.31 The board shall meet at the office of the clerk to review 130.32 the assessment and classification of property in the town or 130.33 city. No changes in valuation or classification which are 130.34 intended to correct errors in judgment by the county assessor 130.35 may be made by the county assessor after the board of reviewor130.36the county board of equalization has adjournedin those cities 131.1 or towns that hold a local board of review; however, corrections 131.2 of errors that are merely clerical in nature or changes that 131.3 extend homestead treatment to property are permitted after 131.4 adjournment until the tax extension date for that assessment 131.5 year. The changes must be fully documented and maintained in 131.6 the assessor's office and must be available for review by any 131.7 person. A copy of the changes made during this period in those 131.8 cities or towns that hold a local board of review must be sent 131.9 to the county board no later than December 31 of the assessment 131.10 year. 131.11 (b) The board shall determine whether the taxable property 131.12 in the town or city has been properly placed on the list and 131.13 properly valued by the assessor. If real or personal property 131.14 has been omitted, the board shall place it on the list with its 131.15 market value, and correct the assessment so that each tract or 131.16 lot of real property, and each article, parcel, or class of 131.17 personal property, is entered on the assessment list at its 131.18 market value. No assessment of the property of any person may 131.19 be raised unless the person has been duly notified of the intent 131.20 of the board to do so. On application of any person feeling 131.21 aggrieved, the board shall review the assessment or 131.22 classification, or both, and correct it as appears just. 131.23 (c) A local board of review may reduce assessments upon 131.24 petition of the taxpayer but the total reductions must not 131.25 reduce the aggregate assessment made by the county assessor by 131.26 more than one percent. If the total reductions would lower the 131.27 aggregate assessments made by the county assessor by more than 131.28 one percent, none of the adjustments may be made. The assessor 131.29 shall correct any clerical errors or double assessments 131.30 discovered by the board of review without regard to the one 131.31 percent limitation. 131.32 (d) A majority of the members may act at the meeting, and 131.33 adjourn from day to day until they finish hearing the cases 131.34 presented. The assessor shall attend, with the assessment books 131.35 and papers, and take part in the proceedings, but must not 131.36 vote. The county assessor, or an assistant delegated by the 132.1 county assessor shall attend the meetings. The board shall list 132.2 separately, on a form appended to the assessment book, all 132.3 omitted property added to the list by the board and all items of 132.4 property increased or decreased, with the market value of each 132.5 item of property, added or changed by the board, placed opposite 132.6 the item. The county assessor shall enter all changes made by 132.7 the board in the assessment book. 132.8 (e) Except as provided in subdivision 3, if a person fails 132.9 to appear in person, by counsel, or by written communication 132.10 before the board after being duly notified of the board's intent 132.11 to raise the assessment of the property, or if a person feeling 132.12 aggrieved by an assessment or classification fails to apply for 132.13 a review of the assessment or classification, the person may not 132.14 appear before the county board of equalization for a review of 132.15 the assessment or classification. This paragraph does not apply 132.16 if an assessment was made after the board meeting, as provided 132.17 in section 273.01, or if the person can establish not having 132.18 received notice of market value at least five days before the 132.19 local board of review meeting. 132.20 (f) The board of review or the board of equalization must 132.21 complete its work and adjourn within 20 days from the time of 132.22 convening stated in the notice of the clerk, unless a longer 132.23 period is approved by the commissioner of revenue. No action 132.24 taken after that date is valid. All complaints about an 132.25 assessment or classification made after the meeting of the board 132.26 must be heard and determined by the county board of 132.27 equalization. A nonresident may, at any time, before the 132.28 meeting of the board of review file written objections to an 132.29 assessment or classification with the county assessor. The 132.30 objections must be presented to the board of review at its 132.31 meeting by the county assessor for its consideration. 132.32 Subd. 2. [SPECIAL BOARD; DUTIES DELEGATED.] The governing 132.33 body of a city, including a city whose charter provides for a 132.34 board of equalization, may appoint a special board of review. 132.35 The city may delegate to the special board of review all of the 132.36 powers and duties in subdivision 1. The special board of review 133.1 shall serve at the direction and discretion of the appointing 133.2 body, subject to the restrictions imposed by law. The 133.3 appointing body shall determine the number of members of the 133.4 board, the compensation and expenses to be paid, and the term of 133.5 office of each member. At least one member of the special board 133.6 of review must be an appraiser, realtor, or other person 133.7 familiar with property valuations in the assessment district. 133.8 Subd. 3. [LOCAL BOARD DUTIES TRANSFERRED TO COUNTY.] The 133.9 town board of any town or the governing body of any home rule 133.10 charter or statutory city may transfer its powers and duties 133.11 under subdivision 1 to the county board and no longer perform 133.12 the function of a local board. A transfer of duties as 133.13 permitted under this subdivision must be communicated to the 133.14 county assessor, in writing, before December 1 of any year to be 133.15 effective for the following year's assessment. This transfer of 133.16 duties to the county may either be permanent or for a specified 133.17 number of years, provided that the transfer cannot be for less 133.18 than three years. Its length must be stated in writing. A town 133.19 or city may renew its option to transfer. The option to 133.20 transfer duties under this subdivision is only available to a 133.21 town or city whose assessment is done by the county. 133.22 Sec. 8. Minnesota Statutes 1996, section 274.13, is 133.23 amended by adding a subdivision to read: 133.24 Subd. 1b. [ASSESSMENT CHANGES.] No changes in valuation or 133.25 classification that are intended to correct errors in judgment 133.26 by the county assessor may be made by the county assessor after 133.27 the county board of equalization has adjourned; however, 133.28 corrections of errors that are merely clerical in nature or 133.29 changes that extend homestead treatment to property are 133.30 permitted after adjournment until the tax extension date for 133.31 that assessment year. The changes must be fully documented and 133.32 maintained in the assessor's office and must be available for 133.33 review by any person. 133.34 Sec. 9. Minnesota Statutes 1996, section 274.13, is 133.35 amended by adding a subdivision to read: 133.36 Subd. 1c. [ALTERNATIVE REVIEW OPTION.] The county shall 134.1 notify taxpayers whose town or city elected to transfer its 134.2 powers and duties under section 274.01 to the county. Prior to 134.3 the time of the county board of equalization, the county shall 134.4 make available to those taxpayers a procedure for a review of 134.5 its assessments, including, but not limited to, open book 134.6 meetings. This alternative review process shall take place in 134.7 April and May. 134.8 Sec. 10. Minnesota Statutes 1996, section 298.24, 134.9 subdivision 1, is amended to read: 134.10 Subdivision 1. (a) For concentrate produced in 1992, 1993, 134.11 1994, and 1995 there is imposed upon taconite and iron 134.12 sulphides, and upon the mining and quarrying thereof, and upon 134.13 the production of iron ore concentrate therefrom, and upon the 134.14 concentrate so produced, a tax of $2.054 per gross ton of 134.15 merchantable iron ore concentrate produced therefrom. 134.16 (b) For concentrates produced in1996 and subsequent years134.17 1997 and 1998, the tax rate shall be equal to the preceding 134.18 year's tax rate plus an amount equal to the preceding year's tax 134.19 rate multiplied by the percentage increase in the implicit price 134.20 deflator from the fourth quarter of the second preceding year to 134.21 the fourth quarter of the preceding year, provided that, for 134.22 concentrates produced in 1996 only, the increase in the rate of 134.23 tax imposed under this section over the rate imposed for the 134.24 previous year may not exceed four cents per ton. "Implicit 134.25 price deflator" for the gross national product means the 134.26 implicit price deflator prepared by the bureau of economic 134.27 analysis of the United States Department of Commerce. For 134.28 concentrates produced in 1999 and subsequent years, the tax rate 134.29 shall be equal to the tax rate determined under this subdivision 134.30 for 1998. 134.31 (c) The tax shall be imposed on the average of the 134.32 production for the current year and the previous two years. The 134.33 rate of the tax imposed will be the current year's tax rate. 134.34 This clause shall not apply in the case of the closing of a 134.35 taconite facility if the property taxes on the facility would be 134.36 higher if this clause and section 298.25 were not applicable. 135.1 (d) If the tax or any part of the tax imposed by this 135.2 subdivision is held to be unconstitutional, a tax of $2.054 per 135.3 gross ton of merchantable iron ore concentrate produced shall be 135.4 imposed. 135.5 (e) Consistent with the intent of this subdivision to 135.6 impose a tax based upon the weight of merchantable iron ore 135.7 concentrate, the commissioner of revenue may indirectly 135.8 determine the weight of merchantable iron ore concentrate 135.9 included in fluxed pellets by subtracting the weight of the 135.10 limestone, dolomite, or olivine derivatives or other basic flux 135.11 additives included in the pellets from the weight of the 135.12 pellets. For purposes of this paragraph, "fluxed pellets" are 135.13 pellets produced in a process in which limestone, dolomite, 135.14 olivine, or other basic flux additives are combined with 135.15 merchantable iron ore concentrate. No subtraction from the 135.16 weight of the pellets shall be allowed for binders, mineral and 135.17 chemical additives other than basic flux additives, or moisture. 135.18 (f)(1) Notwithstanding any other provision of this 135.19 subdivision, for the first five years of a plant's production of 135.20 direct reduced ore, the rate of the tax on direct reduced ore is 135.21 determined under this paragraph. As used in this paragraph, 135.22 "direct reduced ore" is ore that results in a product that has 135.23 an iron content of at least 75 percent. The rate to be applied 135.24 to direct reduced ore is 25 percent of the rate otherwise 135.25 determined under this subdivision for the first 500,000 of 135.26 taxable tons for the production year, and 50 percent of the rate 135.27 otherwise determined for any remainder. If the taxpayer had no 135.28 production in the two years prior to the current production 135.29 year, the tonnage eligible to be taxed at 25 percent of the rate 135.30 otherwise determined under this subdivision is the first 166,667 135.31 tons. If the taxpayer had some production in the year prior to 135.32 the current production year but no production in the second 135.33 prior year, the tonnage eligible to be taxed at 25 percent of 135.34 the rate otherwise determined under this subdivision is the 135.35 first 333,333 tons. 135.36 (2) Production of direct reduced ore in this state is 136.1 subject to the tax imposed by this section, but if that 136.2 production is not produced by a producer of taconite or iron 136.3 sulfides, the production of taconite or iron sulfides consumed 136.4 in the production of direct reduced iron in this state is not 136.5 subject to the tax imposed by this section on taconite or iron 136.6 sulfides. 136.7 Sec. 11. [TIF GRANTS; APPROPRIATIONS.] 136.8 (a) The commissioner of revenue shall pay grants to 136.9 municipalities for deficits in tax increment financing districts 136.10 caused by the changes in class rates, the reduction of school 136.11 district taxes, and the imposition of a state tax that is not 136.12 used in determining tax increment under this act. 136.13 Municipalities must submit applications for the grants in a form 136.14 prescribed by the commissioner by no later than March 1 for 136.15 taxes payable during the calendar year. The maximum grant 136.16 equals the lesser of: 136.17 (1) the reduction in the tax increment financing district's 136.18 revenues derived from increment resulting from the provisions of 136.19 this act; and 136.20 (2) the municipality's total available tax increments, 136.21 including those from previous years, less the amount due during 136.22 the calendar year to pay bonds issued and sold before and 136.23 binding contracts entered into before the day following final 136.24 enactment of this act. 136.25 (b) The amount necessary to make the grants is appropriated 136.26 to the commissioner of revenue from the general fund for 136.27 purposes of this section. 136.28 Sec. 12. [STATE PROPERTY TAX; PRE-1979 TIF DISTRICTS.] 136.29 Notwithstanding any law to the contrary, the state tax 136.30 imposed under Minnesota Statutes, section 273.13, subdivision 136.31 1b, may not be used to compute the increment for a tax increment 136.32 financing district for which certification was requested prior 136.33 to August 1, 1979. 136.34 Sec. 13. [REPEALER.] 136.35 Minnesota Statutes 1996, section 273.1399, is repealed. 136.36 Sec. 14. [EFFECTIVE DATE.] 137.1 Sections 1, 3, and 7 to 9 are effective the day following 137.2 final enactment. 137.3 Section 2 is effective beginning with assessment year 1997. 137.4 Section 4 is effective for the 1998 assessment and 137.5 thereafter. 137.6 Section 11 is effective for grants made in calendar year 137.7 1999 and thereafter. 137.8 Section 13 is effective for aids payable in 1999 and 137.9 thereafter.