SF 1007

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; making technical and 
  1.3             administrative changes and corrections to property, 
  1.4             income, corporate franchise, sales and use, gross 
  1.5             earnings, and other taxes; repealing obsolete laws and 
  1.6             rules; amending Minnesota Statutes 2002, sections 
  1.7             115B.24, subdivision 8; 270.10, subdivision 1a; 
  1.8             270.69, by adding a subdivision; 272.02, by adding 
  1.9             subdivisions; 272.12; 273.11, subdivision 1a; 273.124, 
  1.10            subdivision 1; 273.13, subdivision 25; 273.1398, 
  1.11            subdivision 4d; 273.372; 275.025, subdivisions 1, 3; 
  1.12            277.20, subdivision 2; 279.06, subdivision 1; 281.17; 
  1.13            289A.31, subdivisions 3, 4; 289A.50, subdivision 2a; 
  1.14            289A.60, subdivision 15; 290.01, subdivision 19b; 
  1.15            290.06, subdivision 2c; 290.0671, subdivision 1; 
  1.16            290.0675, subdivisions 2, 3; 290.0802, subdivision 1; 
  1.17            290C.02, subdivisions 3, 7; 290C.03; 290C.07; 290C.09; 
  1.18            290C.10; 290C.11; 295.50, subdivision 9b; 295.53, 
  1.19            subdivision 1; 297A.61, subdivision 34; 297A.665; 
  1.20            297A.67, subdivision 2; 297A.85; 297F.01, subdivision 
  1.21            23; 297I.01, subdivision 9; 297I.20; 515B.1-116; Laws 
  1.22            2002, chapter 377, article 6, section 4; repealing 
  1.23            Minnesota Statutes 2002, sections 290.0671, 
  1.24            subdivision 3; 290.0675, subdivision 5; 294.01; 
  1.25            294.02; 294.021; 294.03; 294.06; 294.07; 294.08; 
  1.26            294.09; 294.10; 294.11; 294.12; 297A.72, subdivision 
  1.27            1; 297A.97; 477A.065; Minnesota Rules, parts 
  1.28            8007.0300, subpart 3; 8009.7100; 8009.7200; 8009.7300; 
  1.29            8009.7400; 8092.1000; 8106.0100, subparts 11, 15, 16; 
  1.30            8106.0200; 8125.1000; 8125.1300, subpart 1; 8125.1400; 
  1.31            8130.0800, subparts 5, 12; 8130.1300; 8130.1600, 
  1.32            subpart 5; 8130.1700, subparts 3, 4; 8130.4800, 
  1.33            subpart 2; 8130.7500, subpart 5; 8130.8000; 8130.8300. 
  1.34  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.35                             ARTICLE 1
  1.36                INCOME AND CORPORATE FRANCHISE TAXES
  1.37     Section 1.  Minnesota Statutes 2002, section 290.01, 
  1.38  subdivision 19b, is amended to read: 
  1.39     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  2.1   individuals, estates, and trusts, there shall be subtracted from 
  2.2   federal taxable income: 
  2.3      (1) interest income on obligations of any authority, 
  2.4   commission, or instrumentality of the United States to the 
  2.5   extent includable in taxable income for federal income tax 
  2.6   purposes but exempt from state income tax under the laws of the 
  2.7   United States; 
  2.8      (2) if included in federal taxable income, the amount of 
  2.9   any overpayment of income tax to Minnesota or to any other 
  2.10  state, for any previous taxable year, whether the amount is 
  2.11  received as a refund or as a credit to another taxable year's 
  2.12  income tax liability; 
  2.13     (3) the amount paid to others, less the amount used to 
  2.14  claim the credit allowed under section 290.0674, not to exceed 
  2.15  $1,625 for each qualifying child in grades kindergarten to 6 and 
  2.16  $2,500 for each qualifying child in grades 7 to 12, for tuition, 
  2.17  textbooks, and transportation of each qualifying child in 
  2.18  attending an elementary or secondary school situated in 
  2.19  Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
  2.20  wherein a resident of this state may legally fulfill the state's 
  2.21  compulsory attendance laws, which is not operated for profit, 
  2.22  and which adheres to the provisions of the Civil Rights Act of 
  2.23  1964 and chapter 363.  For the purposes of this clause, 
  2.24  "tuition" includes fees or tuition as defined in section 
  2.25  290.0674, subdivision 1, clause (1).  As used in this clause, 
  2.26  "textbooks" includes books and other instructional materials and 
  2.27  equipment purchased or leased for use in elementary and 
  2.28  secondary schools in teaching only those subjects legally and 
  2.29  commonly taught in public elementary and secondary schools in 
  2.30  this state.  Equipment expenses qualifying for deduction 
  2.31  includes expenses as defined and limited in section 290.0674, 
  2.32  subdivision 1, clause (3).  "Textbooks" does not include 
  2.33  instructional books and materials used in the teaching of 
  2.34  religious tenets, doctrines, or worship, the purpose of which is 
  2.35  to instill such tenets, doctrines, or worship, nor does it 
  2.36  include books or materials for, or transportation to, 
  3.1   extracurricular activities including sporting events, musical or 
  3.2   dramatic events, speech activities, driver's education, or 
  3.3   similar programs.  For purposes of the subtraction provided by 
  3.4   this clause, "qualifying child" has the meaning given in section 
  3.5   32(c)(3) of the Internal Revenue Code; 
  3.6      (4) income as provided under section 290.0802; 
  3.7      (5) to the extent included in federal adjusted gross 
  3.8   income, income realized on disposition of property exempt from 
  3.9   tax under section 290.491; 
  3.10     (6) to the extent not deducted in determining federal 
  3.11  taxable income or used to claim the long-term care insurance 
  3.12  credit under section 290.0672, the amount paid for health 
  3.13  insurance of self-employed individuals as determined under 
  3.14  section 162(l) of the Internal Revenue Code, except that the 
  3.15  percent limit does not apply.  If the individual deducted 
  3.16  insurance payments under section 213 of the Internal Revenue 
  3.17  Code of 1986, the subtraction under this clause must be reduced 
  3.18  by the lesser of: 
  3.19     (i) the total itemized deductions allowed under section 
  3.20  63(d) of the Internal Revenue Code, less state, local, and 
  3.21  foreign income taxes deductible under section 164 of the 
  3.22  Internal Revenue Code and the standard deduction under section 
  3.23  63(c) of the Internal Revenue Code; or 
  3.24     (ii) the lesser of (A) the amount of insurance qualifying 
  3.25  as "medical care" under section 213(d) of the Internal Revenue 
  3.26  Code to the extent not deducted under section 162(1) of the 
  3.27  Internal Revenue Code or excluded from income or (B) the total 
  3.28  amount deductible for medical care under section 213(a); 
  3.29     (7) the exemption amount allowed under Laws 1995, chapter 
  3.30  255, article 3, section 2, subdivision 3; 
  3.31     (8) to the extent included in federal taxable income, 
  3.32  postservice benefits for youth community service under section 
  3.33  124D.42 for volunteer service under United States Code, title 
  3.34  42, sections 12601 to 12604; 
  3.35     (9) (7) to the extent not deducted in determining federal 
  3.36  taxable income by an individual who does not itemize deductions 
  4.1   for federal income tax purposes for the taxable year, an amount 
  4.2   equal to 50 percent of the excess of charitable contributions 
  4.3   allowable as a deduction for the taxable year under section 
  4.4   170(a) of the Internal Revenue Code over $500; 
  4.5      (10) (8) for taxable years beginning before January 1, 
  4.6   2008, the amount of the federal small ethanol producer credit 
  4.7   allowed under section 40(a)(3) of the Internal Revenue Code 
  4.8   which is included in gross income under section 87 of the 
  4.9   Internal Revenue Code; 
  4.10     (11) (9) for individuals who are allowed a federal foreign 
  4.11  tax credit for taxes that do not qualify for a credit under 
  4.12  section 290.06, subdivision 22, an amount equal to the carryover 
  4.13  of subnational foreign taxes for the taxable year, but not to 
  4.14  exceed the total subnational foreign taxes reported in claiming 
  4.15  the foreign tax credit.  For purposes of this clause, "federal 
  4.16  foreign tax credit" means the credit allowed under section 27 of 
  4.17  the Internal Revenue Code, and "carryover of subnational foreign 
  4.18  taxes" equals the carryover allowed under section 904(c) of the 
  4.19  Internal Revenue Code minus national level foreign taxes to the 
  4.20  extent they exceed the federal foreign tax credit; and 
  4.21     (12) (10) in each of the five tax years immediately 
  4.22  following the tax year in which an addition is required under 
  4.23  subdivision 19a, clause (7), an amount equal to one-fifth of the 
  4.24  delayed depreciation.  For purposes of this clause, "delayed 
  4.25  depreciation" means the amount of the addition made by the 
  4.26  taxpayer under subdivision 19a, clause (7), minus the positive 
  4.27  value of any net operating loss under section 172 of the 
  4.28  Internal Revenue Code generated for the tax year of the 
  4.29  addition.  The resulting delayed depreciation cannot be less 
  4.30  than zero. 
  4.31     [EFFECTIVE DATE.] This section is effective for tax years 
  4.32  beginning after December 31, 2003. 
  4.33     Sec. 2.  Minnesota Statutes 2002, section 290.06, 
  4.34  subdivision 2c, is amended to read: 
  4.35     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
  4.36  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
  5.1   married individuals filing joint returns and surviving spouses 
  5.2   as defined in section 2(a) of the Internal Revenue Code must be 
  5.3   computed by applying to their taxable net income the following 
  5.4   schedule of rates: 
  5.5      (1) On the first $25,680, 5.35 percent; 
  5.6      (2) On all over $25,680, but not over $102,030, 7.05 
  5.7   percent; 
  5.8      (3) On all over $102,030, 7.85 percent. 
  5.9      Married individuals filing separate returns, estates, and 
  5.10  trusts must compute their income tax by applying the above rates 
  5.11  to their taxable income, except that the income brackets will be 
  5.12  one-half of the above amounts.  
  5.13     (b) The income taxes imposed by this chapter upon unmarried 
  5.14  individuals must be computed by applying to taxable net income 
  5.15  the following schedule of rates: 
  5.16     (1) On the first $17,570, 5.35 percent; 
  5.17     (2) On all over $17,570, but not over $57,710, 7.05 
  5.18  percent; 
  5.19     (3) On all over $57,710, 7.85 percent. 
  5.20     (c) The income taxes imposed by this chapter upon unmarried 
  5.21  individuals qualifying as a head of household as defined in 
  5.22  section 2(b) of the Internal Revenue Code must be computed by 
  5.23  applying to taxable net income the following schedule of rates: 
  5.24     (1) On the first $21,630, 5.35 percent; 
  5.25     (2) On all over $21,630, but not over $86,910, 7.05 
  5.26  percent; 
  5.27     (3) On all over $86,910, 7.85 percent. 
  5.28     (d) In lieu of a tax computed according to the rates set 
  5.29  forth in this subdivision, the tax of any individual taxpayer 
  5.30  whose taxable net income for the taxable year is less than an 
  5.31  amount determined by the commissioner must be computed in 
  5.32  accordance with tables prepared and issued by the commissioner 
  5.33  of revenue based on income brackets of not more than $100.  The 
  5.34  amount of tax for each bracket shall be computed at the rates 
  5.35  set forth in this subdivision, provided that the commissioner 
  5.36  may disregard a fractional part of a dollar unless it amounts to 
  6.1   50 cents or more, in which case it may be increased to $1. 
  6.2      (e) An individual who is not a Minnesota resident for the 
  6.3   entire year must compute the individual's Minnesota income tax 
  6.4   as provided in this subdivision.  After the application of the 
  6.5   nonrefundable credits provided in this chapter, the tax 
  6.6   liability must then be multiplied by a fraction in which:  
  6.7      (1) the numerator is the individual's Minnesota source 
  6.8   federal adjusted gross income as defined in section 62 of the 
  6.9   Internal Revenue Code and increased by the additions required 
  6.10  under section 290.01, subdivision 19a, clauses (1), (5), and 
  6.11  (6), and reduced by the Minnesota assignable portion of the 
  6.12  subtraction for United States government interest under section 
  6.13  290.01, subdivision 19b, clause (1), after applying the 
  6.14  allocation and assignability provisions of section 290.081, 
  6.15  clause (a), or 290.17; and 
  6.16     (2) the denominator is the individual's federal adjusted 
  6.17  gross income as defined in section 62 of the Internal Revenue 
  6.18  Code of 1986, increased by the amounts specified in section 
  6.19  290.01, subdivision 19a, clauses (1), (5), and (6), and reduced 
  6.20  by the amounts specified in section 290.01, subdivision 19b, 
  6.21  clause (1). 
  6.22     [EFFECTIVE DATE.] This section is effective for tax years 
  6.23  beginning after December 31, 2002. 
  6.24     Sec. 3.  Minnesota Statutes 2002, section 290.0671, 
  6.25  subdivision 1, is amended to read: 
  6.26     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
  6.27  allowed a credit against the tax imposed by this chapter equal 
  6.28  to a percentage of earned income.  To receive a credit, a 
  6.29  taxpayer must be eligible for a credit under section 32 of the 
  6.30  Internal Revenue Code.  
  6.31     (b) For individuals with no qualifying children, the credit 
  6.32  equals 1.9125 percent of the first $4,620 of earned income.  The 
  6.33  credit is reduced by 1.9125 percent of earned income or modified 
  6.34  adjusted gross income, whichever is greater, in excess of 
  6.35  $5,770, but in no case is the credit less than zero. 
  6.36     (c) For individuals with one qualifying child, the credit 
  7.1   equals 8.5 percent of the first $6,920 of earned income and 8.5 
  7.2   percent of earned income over $12,080 but less than $13,450.  
  7.3   The credit is reduced by 5.73 percent of earned income or 
  7.4   modified adjusted gross income, whichever is greater, in excess 
  7.5   of $15,080, but in no case is the credit less than zero. 
  7.6      (d) For individuals with two or more qualifying children, 
  7.7   the credit equals ten percent of the first $9,720 of earned 
  7.8   income and 20 percent of earned income over $14,860 but less 
  7.9   than $16,800.  The credit is reduced by 10.3 percent of earned 
  7.10  income or modified adjusted gross income, whichever is greater, 
  7.11  in excess of $17,890, but in no case is the credit less than 
  7.12  zero. 
  7.13     (e) For a nonresident or part-year resident, the credit 
  7.14  must be allocated based on the percentage calculated under 
  7.15  section 290.06, subdivision 2c, paragraph (e). 
  7.16     (f) For a person who was a resident for the entire tax year 
  7.17  and has earned income not subject to tax under this chapter, the 
  7.18  credit must be allocated based on the ratio of federal adjusted 
  7.19  gross income reduced by the earned income not subject to tax 
  7.20  under this chapter over federal adjusted gross income. 
  7.21     (g) For tax years beginning after December 31, 2001, and 
  7.22  before December 31, 2004, the $5,770 in paragraph (b) is 
  7.23  increased to $6,770, the $15,080 in paragraph (c) is increased 
  7.24  to $16,080, and the $17,890 in paragraph (d) is increased to 
  7.25  $18,890, after being adjusted for inflation under subdivision 7, 
  7.26  are each increased by $1,000 for married taxpayers filing joint 
  7.27  returns. 
  7.28     (h) For tax years beginning after December 31, 2004, and 
  7.29  before December 31, 2007, the $5,770 in paragraph (b) is 
  7.30  increased to $7,770, the $15,080 in paragraph (c) is increased 
  7.31  to $17,080, and the $17,890 in paragraph (d) is increased to 
  7.32  $19,890, after being adjusted for inflation under subdivision 7, 
  7.33  are each increased by $2,000 for married taxpayers filing joint 
  7.34  returns. 
  7.35     (i) For tax years beginning after December 31, 2007, and 
  7.36  before December 31, 2010, the $5,770 in paragraph (b) is 
  8.1   increased to $8,770, the $15,080 in paragraph (c) is increased 
  8.2   to $18,080, and the $17,890 in paragraph (d) is increased to 
  8.3   $20,890, after being adjusted for inflation under subdivision 7, 
  8.4   are each increased by $3,000 for married taxpayers filing joint 
  8.5   returns.  For tax years beginning after December 31, 2008, the 
  8.6   $3,000 is adjusted annually for inflation under subdivision 7. 
  8.7      (j) The commissioner shall construct tables showing the 
  8.8   amount of the credit at various income levels and make them 
  8.9   available to taxpayers.  The tables shall follow the schedule 
  8.10  contained in this subdivision, except that the commissioner may 
  8.11  graduate the transition between income brackets. 
  8.12     [EFFECTIVE DATE.] This section is effective for tax years 
  8.13  beginning after December 31, 2002. 
  8.14     Sec. 4.  Minnesota Statutes 2002, section 290.0675, 
  8.15  subdivision 2, is amended to read: 
  8.16     Subd. 2.  [CREDIT ALLOWED.] A married couple filing a joint 
  8.17  return is allowed a credit against the tax imposed under section 
  8.18  290.06.  
  8.19     The minimum taxable income for the married couple to be 
  8.20  eligible for the credit is $25,680, and the minimum earned 
  8.21  income in order for the couple to be eligible for the credit is 
  8.22  $14,250 for each spouse. 
  8.23     [EFFECTIVE DATE.] This section is effective for tax years 
  8.24  beginning after December 31, 2002. 
  8.25     Sec. 5.  Minnesota Statutes 2002, section 290.0675, 
  8.26  subdivision 3, is amended to read: 
  8.27     Subd. 3.  [CREDIT AMOUNT.] The credit amount is the 
  8.28  difference between the tax on the couple's joint Minnesota 
  8.29  taxable income under the rates and income levels in section 
  8.30  290.06, subdivision 2c, paragraph (a), as adjusted for the 
  8.31  taxable year by section 290.06, subdivision 2d, and the sum of 
  8.32  the tax under the rates and income levels of section 290.06, 
  8.33  subdivision 2c, paragraph (b), as adjusted for the taxable year 
  8.34  by section 290.06, subdivision 2d, on the earned income of the 
  8.35  lesser-earning spouse, and the tax under the rates and income 
  8.36  levels of section 290.06, subdivision 2c, paragraph (b), as 
  9.1   adjusted for the taxable year by section 290.06, subdivision 2d, 
  9.2   on the couple's joint Minnesota taxable income, minus the earned 
  9.3   income of the lesser-earning spouse. 
  9.4      The commissioner of revenue shall prepare and make 
  9.5   available to taxpayers a comprehensive table showing the credit 
  9.6   under this section at brackets of earnings of the lesser-earning 
  9.7   spouse and joint taxable income.  The brackets of earnings shall 
  9.8   not be more than $2,000. 
  9.9      [EFFECTIVE DATE.] This section is effective for tax years 
  9.10  beginning after December 31, 2002. 
  9.11     Sec. 6.  Minnesota Statutes 2002, section 290.0802, 
  9.12  subdivision 1, is amended to read: 
  9.13     Subdivision 1.  [DEFINITIONS.] For purposes of this 
  9.14  section, the following terms have the meanings given. 
  9.15     (a) "Adjusted gross income" means federal adjusted gross 
  9.16  income as used in section 22(d) of the Internal Revenue Code for 
  9.17  the taxable year, plus a lump sum distribution as defined in 
  9.18  section 402(e)(3) of the Internal Revenue Code, and less any 
  9.19  pension, annuity, or disability benefits included in federal 
  9.20  gross income but not subject to state taxation other than the 
  9.21  subtraction allowed under section 290.01, subdivision 19b, 
  9.22  clause (4). 
  9.23     (b) "Disability income" means disability income as defined 
  9.24  in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 
  9.25     (c) "Nontaxable retirement and disability benefits" means 
  9.26  the amount of pension, annuity, or disability benefits that 
  9.27  would be included in the reduction under section 22(c)(3) of the 
  9.28  Internal Revenue Code and pension, annuity, or disability 
  9.29  benefits included in federal gross income but not subject to 
  9.30  state taxation other than the subtraction allowed under section 
  9.31  290.01, subdivision 19b, clause (4). 
  9.32     (d) "Qualified individual" means a qualified individual as 
  9.33  defined in section 22(b) of the Internal Revenue Code. 
  9.34     (e) "Social security benefits above the second federal 
  9.35  threshold" means the amount of social security benefits included 
  9.36  in federal taxable income due to the provisions of section 13215 
 10.1   of the Omnibus Budget Reconciliation Act of 1993, Public Law 
 10.2   Number 103-66. 
 10.3      [EFFECTIVE DATE.] This section is effective for tax years 
 10.4   beginning after December 31, 2002. 
 10.5      Sec. 7.  [REPEALER.] 
 10.6      (a) Minnesota Statutes 2002, sections 290.0671, subdivision 
 10.7   3; and 290.0675, subdivision 5, are repealed effective for tax 
 10.8   years beginning after December 31, 2002. 
 10.9      (b) Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 
 10.10  8009.7200; 8009.7300; 8009.7400; and 8092.1000, are repealed 
 10.11  effective the day following final enactment.  
 10.12                             ARTICLE 2
 10.13                           PROPERTY TAXES
 10.14     Section 1.  Minnesota Statutes 2002, section 270.10, 
 10.15  subdivision 1a, is amended to read: 
 10.16     Subd. 1a.  [NOTIFICATION TO TAXPAYER.] At the same time 
 10.17  that notice of the assessment, determination, or order of the 
 10.18  commissioner is given to a taxpayer, the taxpayer must be 
 10.19  notified in writing of the right to appeal to the tax court, and 
 10.20  if applicable, to the small claims division.  Except in the case 
 10.21  of mathematical or clerical errors, the notice must contain a 
 10.22  description of the basis for, including applicable law and other 
 10.23  factors considered in the determination, and a listing of the 
 10.24  amounts of tax due, interest, additions to tax, and penalties.  
 10.25  Failure to provide all the required information does not 
 10.26  invalidate the notice for purposes of satisfying statutory 
 10.27  notice requirements if the notice contains sufficient 
 10.28  information to advise the taxpayer that an assessment, order, or 
 10.29  other determination has been made.  The taxpayer may request 
 10.30  further clarification within the time provided for appealing the 
 10.31  determination.  In any notice of assessment, determination, or 
 10.32  order dealing with property valuation or assessment for property 
 10.33  tax purposes by the commissioner of revenue or a local unit of 
 10.34  government, the taxpayer must be notified in writing that a 
 10.35  taxpayer must appeal to the town or city board of equalization 
 10.36  and to the county board of equalization before appealing to the 
 11.1   small claims division of the tax court, except for those 
 11.2   taxpayers whose original assessments are determined by the 
 11.3   commissioner of revenue.  
 11.4      [EFFECTIVE DATE.] This section is effective the day 
 11.5   following final enactment. 
 11.6      Sec. 2.  Minnesota Statutes 2002, section 272.02, is 
 11.7   amended by adding a subdivision to read: 
 11.8      Subd. 56.  [COMPREHENSIVE HEALTH ASSOCIATION.] All property 
 11.9   owned by the comprehensive health association is exempt to the 
 11.10  extent provided in section 62E.10, subdivision 1. 
 11.11     [EFFECTIVE DATE.] This section is effective the day 
 11.12  following final enactment. 
 11.13     Sec. 3.  Minnesota Statutes 2002, section 272.02, is 
 11.14  amended by adding a subdivision to read: 
 11.15     Subd. 57.  [PRIVATE CEMETERIES.] All property owned by 
 11.16  private cemeteries is exempt to the extent provided in section 
 11.17  307.09. 
 11.18     [EFFECTIVE DATE.] This section is effective the day 
 11.19  following final enactment. 
 11.20     Sec. 4.  Minnesota Statutes 2002, section 272.02, is 
 11.21  amended by adding a subdivision to read: 
 11.22     Subd. 58.  [WESTERN LAKE SUPERIOR SANITARY BOARD.] All 
 11.23  property owned, leased, controlled, used, or occupied for 
 11.24  public, governmental, and municipal purposes by the Western Lake 
 11.25  Superior Sanitary Board is exempt to the extent provided in 
 11.26  section 458D.23. 
 11.27     [EFFECTIVE DATE.] This section is effective the day 
 11.28  following final enactment. 
 11.29     Sec. 5.  Minnesota Statutes 2002, section 272.02, is 
 11.30  amended by adding a subdivision to read: 
 11.31     Subd. 59.  [UNFINISHED SALE OR RENTAL PROJECTS.] Unfinished 
 11.32  sale or rental projects are exempt to the extent provided in 
 11.33  section 469.155, subdivision 17. 
 11.34     [EFFECTIVE DATE.] This section is effective the day 
 11.35  following final enactment. 
 11.36     Sec. 6.  Minnesota Statutes 2002, section 272.02, is 
 12.1   amended by adding a subdivision to read: 
 12.2      Subd. 60.  [SKYWAYS.] The pedestrian skyway system, 
 12.3   underground pedestrian concourse, the people mover system, and 
 12.4   publicly owned parking structures are exempt to the extent 
 12.5   provided in section 469.127. 
 12.6      [EFFECTIVE DATE.] This section is effective the day 
 12.7   following final enactment. 
 12.8      Sec. 7.  Minnesota Statutes 2002, section 272.02, is 
 12.9   amended by adding a subdivision to read: 
 12.10     Subd. 61.  [MUNICIPAL RECREATION FACILITIES.] All property 
 12.11  acquired and used by a city is exempt to the extent provided in 
 12.12  section 471.191, subdivision 4. 
 12.13     [EFFECTIVE DATE.] This section is effective the day 
 12.14  following final enactment. 
 12.15     Sec. 8.  Minnesota Statutes 2002, section 272.02, is 
 12.16  amended by adding a subdivision to read: 
 12.17     Subd. 62.  [WATER AND WASTEWATER TREATMENT 
 12.18  FACILITIES.] Related facilities owned by water and wastewater 
 12.19  treatment providers who have contracted with a municipality to 
 12.20  provide capital intensive public services to the municipality 
 12.21  are exempt to the extent provided in section 471A.05. 
 12.22     [EFFECTIVE DATE.] This section is effective the day 
 12.23  following final enactment. 
 12.24     Sec. 9.  Minnesota Statutes 2002, section 272.12, is 
 12.25  amended to read: 
 12.26     272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.] 
 12.27     When: 
 12.28     (a) a deed or other instrument conveying land, 
 12.29     (b) a plat of any town site or addition thereto, 
 12.30     (c) a survey required pursuant to section 508.47, 
 12.31     (d) a condominium plat subject to chapter 515 or 515A or a 
 12.32  declaration that contains such a plat, or 
 12.33     (e) a common interest community plat subject to chapter 
 12.34  515B or a declaration that contains such a plat, 
 12.35  is presented to the county auditor for transfer, the auditor 
 12.36  shall ascertain from the records if there be taxes delinquent 
 13.1   upon the land described therein, or if it has been sold for 
 13.2   taxes.  An assignment of a sheriff's or referee's certificate of 
 13.3   sale, when the certificate of sale describes real estate, and 
 13.4   certificates of redemption from mortgage or lien foreclosure 
 13.5   sales, when the certificate of redemption encompasses real 
 13.6   estate and is issued to a junior creditor, are considered 
 13.7   instruments conveying land for the purposes of this section and 
 13.8   section 272.121.  If there are taxes delinquent, the auditor 
 13.9   shall certify to the same; and upon payment of such taxes, or in 
 13.10  case no taxes are delinquent, shall transfer the land upon the 
 13.11  books of the auditor's office, and note upon the instrument, 
 13.12  over official signature, the words, "no delinquent taxes and 
 13.13  transfer entered," or, if the land described has been sold or 
 13.14  assigned to an actual purchaser for taxes, the words "paid by 
 13.15  sale of land described within;" and, unless such statement is 
 13.16  made upon such instrument, the county recorder or the registrar 
 13.17  of titles shall refuse to receive or record the same; provided, 
 13.18  that sheriff's or referees' certificates of sale on execution or 
 13.19  foreclosure of a lien or mortgage, certificates of redemption 
 13.20  from mortgage or lien foreclosure sales issued to the redeeming 
 13.21  mortgagor or lienee, deeds of distribution made by a personal 
 13.22  representative in probate proceedings, decrees and judgments, 
 13.23  receivers receipts, patents, and copies of town or statutory 
 13.24  city plats, in case the original plat filed in the office of the 
 13.25  county recorder has been lost or destroyed, and the instruments 
 13.26  releasing, removing and discharging reversionary and forfeiture 
 13.27  provisions affecting title to land and instruments releasing, 
 13.28  removing or discharging easement rights in land or building or 
 13.29  other restrictions, may be recorded without such certificate; 
 13.30  and, provided that instruments conveying land and, as 
 13.31  appurtenant thereto an easement over adjacent tract or tracts of 
 13.32  land, may be recorded without such certificate as to the land 
 13.33  covered by such easement; and provided further, that any 
 13.34  instrument granting an easement made in favor of any public 
 13.35  utility or pipe line for conveying gas, liquids or solids in 
 13.36  suspension, in the nature of a right-of-way over, along, across 
 14.1   or under a tract of land may be recorded without such 
 14.2   certificate as to the land covered by such easement.  Any 
 14.3   instrument amending or restating the declarations, bylaws, 
 14.4   plats, or other enabling Documents governing homeowners 
 14.5   associations of condominiums, townhouses, common interest 
 14.6   ownership communities, and other planned unit developments may 
 14.7   be recorded without the auditor's certificate to the extent 
 14.8   provided in section 515B.1-116(f). 
 14.9      A deed of distribution made by a personal representative in 
 14.10  a probate proceeding, a decree, or a judgment that conveys land 
 14.11  shall be presented to the county auditor, who shall transfer the 
 14.12  land upon the books of the auditor's office and note upon the 
 14.13  instrument, over official signature, the words, "transfer 
 14.14  entered", and the instrument may then be recorded.  A decree or 
 14.15  judgment that affects title to land but does not convey land may 
 14.16  be recorded without presentation to the auditor. 
 14.17     A violation of this section by the county recorder or the 
 14.18  registrar of titles shall be a gross misdemeanor, and, in 
 14.19  addition to the punishment therefor, the recorder or registrar 
 14.20  shall be liable to the grantee of any instrument so recorded for 
 14.21  the amount of any damages sustained. 
 14.22     When, as a condition to permitting the recording of deed or 
 14.23  other instrument affecting the title to real estate previously 
 14.24  forfeited to the state under the provisions of sections 281.16 
 14.25  to 281.25, county officials, after such real estate has been 
 14.26  purchased or repurchased, have required the payment of taxes 
 14.27  erroneously assumed to have accrued against such real estate 
 14.28  after forfeiture and before the date of purchase or repurchase, 
 14.29  the sum required to be so paid shall be refunded to the persons 
 14.30  entitled thereto out of moneys in the funds in which the sum so 
 14.31  paid was placed.  Delinquent taxes are those taxes deemed 
 14.32  delinquent under section 279.02. 
 14.33     [EFFECTIVE DATE.] This section is effective for deeds or 
 14.34  instruments accepted for recording or registration on or after 
 14.35  July 1, 2003. 
 14.36     Sec. 10.  Minnesota Statutes 2002, section 273.11, 
 15.1   subdivision 1a, is amended to read: 
 15.2      Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
 15.3   property classified as agricultural homestead or nonhomestead, 
 15.4   residential homestead or nonhomestead, timber, or noncommercial 
 15.5   seasonal residential recreational residential, the assessor 
 15.6   shall compare the value with the taxable portion of the value 
 15.7   determined in the preceding assessment.  
 15.8      For assessment year 2002, the amount of the increase shall 
 15.9   not exceed the greater of (1) ten percent of the value in the 
 15.10  preceding assessment, or (2) 15 percent of the difference 
 15.11  between the current assessment and the preceding assessment. 
 15.12     For assessment year 2003, the amount of the increase shall 
 15.13  not exceed the greater of (1) 12 percent of the value in the 
 15.14  preceding assessment, or (2) 20 percent of the difference 
 15.15  between the current assessment and the preceding assessment. 
 15.16     For assessment year 2004, the amount of the increase shall 
 15.17  not exceed the greater of (1) 15 percent of the value in the 
 15.18  preceding assessment, or (2) 25 percent of the difference 
 15.19  between the current assessment and the preceding assessment. 
 15.20     For assessment year 2005, the amount of the increase shall 
 15.21  not exceed the greater of (1) 15 percent of the value in the 
 15.22  preceding assessment, or (2) 33 percent of the difference 
 15.23  between the current assessment and the preceding assessment.  
 15.24     For assessment year 2006, the amount of the increase shall 
 15.25  not exceed the greater of (1) 15 percent of the value in the 
 15.26  preceding assessment, or (2) 50 percent of the difference 
 15.27  between the current assessment and the preceding assessment. 
 15.28     This limitation shall not apply to increases in value due 
 15.29  to improvements.  For purposes of this subdivision, the term 
 15.30  "assessment" means the value prior to any exclusion under 
 15.31  subdivision 16. 
 15.32     The provisions of this subdivision shall be in effect 
 15.33  through assessment year 2006 as provided in this subdivision. 
 15.34     For purposes of the assessment/sales ratio study conducted 
 15.35  under section 127A.48, and the computation of state aids paid 
 15.36  under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
 16.1   477A, market values and net tax capacities determined under this 
 16.2   subdivision and subdivision 16, shall be used. 
 16.3      [EFFECTIVE DATE.] This section is effective the day 
 16.4   following final enactment. 
 16.5      Sec. 11.  Minnesota Statutes 2002, section 273.124, 
 16.6   subdivision 1, is amended to read: 
 16.7      Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
 16.8   that is occupied and used for the purposes of a homestead by its 
 16.9   owner, who must be a Minnesota resident, is a residential 
 16.10  homestead.  
 16.11     Agricultural land, as defined in section 273.13, 
 16.12  subdivision 23, that is occupied and used as a homestead by its 
 16.13  owner, who must be a Minnesota resident, is an agricultural 
 16.14  homestead. 
 16.15     Dates for establishment of a homestead and homestead 
 16.16  treatment provided to particular types of property are as 
 16.17  provided in this section.  
 16.18     Property held by a trustee under a trust is eligible for 
 16.19  homestead classification if the requirements under this chapter 
 16.20  are satisfied. 
 16.21     The assessor shall require proof, as provided in 
 16.22  subdivision 13, of the facts upon which classification as a 
 16.23  homestead may be determined.  Notwithstanding any other law, the 
 16.24  assessor may at any time require a homestead application to be 
 16.25  filed in order to verify that any property classified as a 
 16.26  homestead continues to be eligible for homestead status.  
 16.27  Notwithstanding any other law to the contrary, the department of 
 16.28  revenue may, upon request from an assessor, verify whether an 
 16.29  individual who is requesting or receiving homestead 
 16.30  classification has filed a Minnesota income tax return as a 
 16.31  resident for the most recent taxable year for which the 
 16.32  information is available. 
 16.33     When there is a name change or a transfer of homestead 
 16.34  property, the assessor may reclassify the property in the next 
 16.35  assessment unless a homestead application is filed to verify 
 16.36  that the property continues to qualify for homestead 
 17.1   classification. 
 17.2      (b) For purposes of this section, homestead property shall 
 17.3   include property which is used for purposes of the homestead but 
 17.4   is separated from the homestead by a road, street, lot, 
 17.5   waterway, or other similar intervening property.  The term "used 
 17.6   for purposes of the homestead" shall include but not be limited 
 17.7   to uses for gardens, garages, or other outbuildings commonly 
 17.8   associated with a homestead, but shall not include vacant land 
 17.9   held primarily for future development.  In order to receive 
 17.10  homestead treatment for the noncontiguous property, the owner 
 17.11  must use the property for the purposes of the homestead, and 
 17.12  must apply to the assessor, both by the deadlines given in 
 17.13  subdivision 9.  After initial qualification for the homestead 
 17.14  treatment, additional applications for subsequent years are not 
 17.15  required. 
 17.16     (c) Residential real estate that is occupied and used for 
 17.17  purposes of a homestead by a relative of the owner is a 
 17.18  homestead but only to the extent of the homestead treatment that 
 17.19  would be provided if the related owner occupied the property.  
 17.20  For purposes of this paragraph and paragraph (g), "relative" 
 17.21  means a parent, stepparent, child, stepchild, grandparent, 
 17.22  grandchild, brother, sister, uncle, aunt, nephew, or niece.  
 17.23  This relationship may be by blood or marriage.  Property that 
 17.24  has been classified as seasonal residential recreational 
 17.25  residential property at any time during which it has been owned 
 17.26  by the current owner or spouse of the current owner will not be 
 17.27  reclassified as a homestead unless it is occupied as a homestead 
 17.28  by the owner; this prohibition also applies to property that, in 
 17.29  the absence of this paragraph, would have been classified as 
 17.30  seasonal residential recreational residential property at the 
 17.31  time when the residence was constructed.  Neither the related 
 17.32  occupant nor the owner of the property may claim a property tax 
 17.33  refund under chapter 290A for a homestead occupied by a 
 17.34  relative.  In the case of a residence located on agricultural 
 17.35  land, only the house, garage, and immediately surrounding one 
 17.36  acre of land shall be classified as a homestead under this 
 18.1   paragraph, except as provided in paragraph (d). 
 18.2      (d) Agricultural property that is occupied and used for 
 18.3   purposes of a homestead by a relative of the owner, is a 
 18.4   homestead, only to the extent of the homestead treatment that 
 18.5   would be provided if the related owner occupied the property, 
 18.6   and only if all of the following criteria are met: 
 18.7      (1) the relative who is occupying the agricultural property 
 18.8   is a son, daughter, grandson, granddaughter, father, or mother 
 18.9   of the owner of the agricultural property or a son, daughter, 
 18.10  grandson, or granddaughter of the spouse of the owner of the 
 18.11  agricultural property; 
 18.12     (2) the owner of the agricultural property must be a 
 18.13  Minnesota resident; 
 18.14     (3) the owner of the agricultural property must not receive 
 18.15  homestead treatment on any other agricultural property in 
 18.16  Minnesota; and 
 18.17     (4) the owner of the agricultural property is limited to 
 18.18  only one agricultural homestead per family under this paragraph. 
 18.19     Neither the related occupant nor the owner of the property 
 18.20  may claim a property tax refund under chapter 290A for a 
 18.21  homestead occupied by a relative qualifying under this 
 18.22  paragraph.  For purposes of this paragraph, "agricultural 
 18.23  property" means the house, garage, other farm buildings and 
 18.24  structures, and agricultural land. 
 18.25     Application must be made to the assessor by the owner of 
 18.26  the agricultural property to receive homestead benefits under 
 18.27  this paragraph.  The assessor may require the necessary proof 
 18.28  that the requirements under this paragraph have been met. 
 18.29     (e) In the case of property owned by a property owner who 
 18.30  is married, the assessor must not deny homestead treatment in 
 18.31  whole or in part if only one of the spouses occupies the 
 18.32  property and the other spouse is absent due to:  (1) marriage 
 18.33  dissolution proceedings, (2) legal separation, (3) employment or 
 18.34  self-employment in another location, or (4) other personal 
 18.35  circumstances causing the spouses to live separately, not 
 18.36  including an intent to obtain two homestead classifications for 
 19.1   property tax purposes.  To qualify under clause (3), the 
 19.2   spouse's place of employment or self-employment must be at least 
 19.3   50 miles distant from the other spouse's place of employment, 
 19.4   and the homesteads must be at least 50 miles distant from each 
 19.5   other.  Homestead treatment, in whole or in part, shall not be 
 19.6   denied to the owner's spouse who previously occupied the 
 19.7   residence with the owner if the absence of the owner is due to 
 19.8   one of the exceptions provided in this paragraph. 
 19.9      (f) The assessor must not deny homestead treatment in whole 
 19.10  or in part if: 
 19.11     (1) in the case of a property owner who is not married, the 
 19.12  owner is absent due to residence in a nursing home, boarding 
 19.13  care facility, or an elderly assisted living facility property 
 19.14  as defined in section 273.13, subdivision 25a, and the property 
 19.15  is not otherwise occupied; or 
 19.16     (2) in the case of a property owner who is married, the 
 19.17  owner or the owner's spouse or both are absent due to residence 
 19.18  in a nursing home, boarding care facility, or an elderly 
 19.19  assisted living facility property as defined in section 273.13, 
 19.20  subdivision 25a, and the property is not occupied or is occupied 
 19.21  only by the owner's spouse. 
 19.22     (g) If an individual is purchasing property with the intent 
 19.23  of claiming it as a homestead and is required by the terms of 
 19.24  the financing agreement to have a relative shown on the deed as 
 19.25  a coowner, the assessor shall allow a full homestead 
 19.26  classification.  This provision only applies to first-time 
 19.27  purchasers, whether married or single, or to a person who had 
 19.28  previously been married and is purchasing as a single individual 
 19.29  for the first time.  The application for homestead benefits must 
 19.30  be on a form prescribed by the commissioner and must contain the 
 19.31  data necessary for the assessor to determine if full homestead 
 19.32  benefits are warranted. 
 19.33     (h) If residential or agricultural real estate is occupied 
 19.34  and used for purposes of a homestead by a child of a deceased 
 19.35  owner and the property is subject to jurisdiction of probate 
 19.36  court, the child shall receive relative homestead classification 
 20.1   under paragraph (c) or (d) to the same extent they would be 
 20.2   entitled to it if the owner was still living, until the probate 
 20.3   is completed.  For purposes of this paragraph, "child" includes 
 20.4   a relationship by blood or by marriage. 
 20.5      [EFFECTIVE DATE.] This section is effective the day 
 20.6   following final enactment. 
 20.7      Sec. 12.  Minnesota Statutes 2002, section 273.13, 
 20.8   subdivision 25, is amended to read: 
 20.9      Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 20.10  estate containing four or more units and used or held for use by 
 20.11  the owner or by the tenants or lessees of the owner as a 
 20.12  residence for rental periods of 30 days or more.  Class 4a also 
 20.13  includes hospitals licensed under sections 144.50 to 144.56, 
 20.14  other than hospitals exempt under section 272.02, and contiguous 
 20.15  property used for hospital purposes, without regard to whether 
 20.16  the property has been platted or subdivided.  The market value 
 20.17  of class 4a property has a class rate of 1.8 percent for taxes 
 20.18  payable in 2002, 1.5 percent for taxes payable in 2003, and 1.25 
 20.19  percent for taxes payable in 2004 and thereafter, except that 
 20.20  class 4a property consisting of a structure for which 
 20.21  construction commenced after June 30, 2001, has a class rate of 
 20.22  1.25 percent of market value for taxes payable in 2003 and 
 20.23  subsequent years. 
 20.24     (b) Class 4b includes: 
 20.25     (1) residential real estate containing less than four units 
 20.26  that does not qualify as class 4bb, other than seasonal 
 20.27  residential, and recreational property; 
 20.28     (2) manufactured homes not classified under any other 
 20.29  provision; 
 20.30     (3) a dwelling, garage, and surrounding one acre of 
 20.31  property on a nonhomestead farm classified under subdivision 23, 
 20.32  paragraph (b) containing two or three units; and 
 20.33     (4) unimproved property that is classified residential as 
 20.34  determined under subdivision 33.  
 20.35     The market value of class 4b property has a class rate of 
 20.36  1.5 percent for taxes payable in 2002, and 1.25 percent for 
 21.1   taxes payable in 2003 and thereafter. 
 21.2      (c) Class 4bb includes: 
 21.3      (1) nonhomestead residential real estate containing one 
 21.4   unit, other than seasonal residential, and recreational 
 21.5   property; and 
 21.6      (2) a single family dwelling, garage, and surrounding one 
 21.7   acre of property on a nonhomestead farm classified under 
 21.8   subdivision 23, paragraph (b). 
 21.9      Class 4bb property has the same class rates as class 1a 
 21.10  property under subdivision 22. 
 21.11     Property that has been classified as seasonal recreational 
 21.12  residential recreational property at any time during which it 
 21.13  has been owned by the current owner or spouse of the current 
 21.14  owner does not qualify for class 4bb. 
 21.15     (d) Class 4c property includes: 
 21.16     (1) except as provided in subdivision 22, paragraph (c), 
 21.17  real property devoted to temporary and seasonal residential 
 21.18  occupancy for recreation purposes, including real property 
 21.19  devoted to temporary and seasonal residential occupancy for 
 21.20  recreation purposes and not devoted to commercial purposes for 
 21.21  more than 250 days in the year preceding the year of 
 21.22  assessment.  For purposes of this clause, property is devoted to 
 21.23  a commercial purpose on a specific day if any portion of the 
 21.24  property is used for residential occupancy, and a fee is charged 
 21.25  for residential occupancy.  In order for a property to be 
 21.26  classified as class 4c, seasonal residential recreational 
 21.27  residential for commercial purposes, at least 40 percent of the 
 21.28  annual gross lodging receipts related to the property must be 
 21.29  from business conducted during 90 consecutive days and either 
 21.30  (i) at least 60 percent of all paid bookings by lodging guests 
 21.31  during the year must be for periods of at least two consecutive 
 21.32  nights; or (ii) at least 20 percent of the annual gross receipts 
 21.33  must be from charges for rental of fish houses, boats and 
 21.34  motors, snowmobiles, downhill or cross-country ski equipment, or 
 21.35  charges for marina services, launch services, and guide 
 21.36  services, or the sale of bait and fishing tackle.  For purposes 
 22.1   of this determination, a paid booking of five or more nights 
 22.2   shall be counted as two bookings.  Class 4c also includes 
 22.3   commercial use real property used exclusively for recreational 
 22.4   purposes in conjunction with class 4c property devoted to 
 22.5   temporary and seasonal residential occupancy for recreational 
 22.6   purposes, up to a total of two acres, provided the property is 
 22.7   not devoted to commercial recreational use for more than 250 
 22.8   days in the year preceding the year of assessment and is located 
 22.9   within two miles of the class 4c property with which it is 
 22.10  used.  Class 4c property classified in this clause also includes 
 22.11  the remainder of class 1c resorts provided that the entire 
 22.12  property including that portion of the property classified as 
 22.13  class 1c also meets the requirements for class 4c under this 
 22.14  clause; otherwise the entire property is classified as class 3.  
 22.15  Owners of real property devoted to temporary and seasonal 
 22.16  residential occupancy for recreation purposes and all or a 
 22.17  portion of which was devoted to commercial purposes for not more 
 22.18  than 250 days in the year preceding the year of assessment 
 22.19  desiring classification as class 1c or 4c, must submit a 
 22.20  declaration to the assessor designating the cabins or units 
 22.21  occupied for 250 days or less in the year preceding the year of 
 22.22  assessment by January 15 of the assessment year.  Those cabins 
 22.23  or units and a proportionate share of the land on which they are 
 22.24  located will be designated class 1c or 4c as otherwise 
 22.25  provided.  The remainder of the cabins or units and a 
 22.26  proportionate share of the land on which they are located will 
 22.27  be designated as class 3a.  The owner of property desiring 
 22.28  designation as class 1c or 4c property must provide guest 
 22.29  registers or other records demonstrating that the units for 
 22.30  which class 1c or 4c designation is sought were not occupied for 
 22.31  more than 250 days in the year preceding the assessment if so 
 22.32  requested.  The portion of a property operated as a (1) 
 22.33  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 22.34  facility operated on a commercial basis not directly related to 
 22.35  temporary and seasonal residential occupancy for recreation 
 22.36  purposes shall not qualify for class 1c or 4c; 
 23.1      (2) qualified property used as a golf course if: 
 23.2      (i) it is open to the public on a daily fee basis.  It may 
 23.3   charge membership fees or dues, but a membership fee may not be 
 23.4   required in order to use the property for golfing, and its green 
 23.5   fees for golfing must be comparable to green fees typically 
 23.6   charged by municipal courses; and 
 23.7      (ii) it meets the requirements of section 273.112, 
 23.8   subdivision 3, paragraph (d). 
 23.9      A structure used as a clubhouse, restaurant, or place of 
 23.10  refreshment in conjunction with the golf course is classified as 
 23.11  class 3a property; 
 23.12     (3) real property up to a maximum of one acre of land owned 
 23.13  by a nonprofit community service oriented organization; provided 
 23.14  that the property is not used for a revenue-producing activity 
 23.15  for more than six days in the calendar year preceding the year 
 23.16  of assessment and the property is not used for residential 
 23.17  purposes on either a temporary or permanent basis.  For purposes 
 23.18  of this clause, a "nonprofit community service oriented 
 23.19  organization" means any corporation, society, association, 
 23.20  foundation, or institution organized and operated exclusively 
 23.21  for charitable, religious, fraternal, civic, or educational 
 23.22  purposes, and which is exempt from federal income taxation 
 23.23  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 23.24  Revenue Code of 1986, as amended through December 31, 1990.  For 
 23.25  purposes of this clause, "revenue-producing activities" shall 
 23.26  include but not be limited to property or that portion of the 
 23.27  property that is used as an on-sale intoxicating liquor or 3.2 
 23.28  percent malt liquor establishment licensed under chapter 340A, a 
 23.29  restaurant open to the public, bowling alley, a retail store, 
 23.30  gambling conducted by organizations licensed under chapter 349, 
 23.31  an insurance business, or office or other space leased or rented 
 23.32  to a lessee who conducts a for-profit enterprise on the 
 23.33  premises.  Any portion of the property which is used for 
 23.34  revenue-producing activities for more than six days in the 
 23.35  calendar year preceding the year of assessment shall be assessed 
 23.36  as class 3a.  The use of the property for social events open 
 24.1   exclusively to members and their guests for periods of less than 
 24.2   24 hours, when an admission is not charged nor any revenues are 
 24.3   received by the organization shall not be considered a 
 24.4   revenue-producing activity; 
 24.5      (4) post-secondary student housing of not more than one 
 24.6   acre of land that is owned by a nonprofit corporation organized 
 24.7   under chapter 317A and is used exclusively by a student 
 24.8   cooperative, sorority, or fraternity for on-campus housing or 
 24.9   housing located within two miles of the border of a college 
 24.10  campus; 
 24.11     (5) manufactured home parks as defined in section 327.14, 
 24.12  subdivision 3; 
 24.13     (6) real property that is actively and exclusively devoted 
 24.14  to indoor fitness, health, social, recreational, and related 
 24.15  uses, is owned and operated by a not-for-profit corporation, and 
 24.16  is located within the metropolitan area as defined in section 
 24.17  473.121, subdivision 2; 
 24.18     (7) a leased or privately owned noncommercial aircraft 
 24.19  storage hangar not exempt under section 272.01, subdivision 2, 
 24.20  and the land on which it is located, provided that: 
 24.21     (i) the land is on an airport owned or operated by a city, 
 24.22  town, county, metropolitan airports commission, or group 
 24.23  thereof; and 
 24.24     (ii) the land lease, or any ordinance or signed agreement 
 24.25  restricting the use of the leased premise, prohibits commercial 
 24.26  activity performed at the hangar. 
 24.27     If a hangar classified under this clause is sold after June 
 24.28  30, 2000, a bill of sale must be filed by the new owner with the 
 24.29  assessor of the county where the property is located within 60 
 24.30  days of the sale; and 
 24.31     (8) residential real estate, a portion of which is used by 
 24.32  the owner for homestead purposes, and that is also a place of 
 24.33  lodging, if all of the following criteria are met: 
 24.34     (i) rooms are provided for rent to transient guests that 
 24.35  generally stay for periods of 14 or fewer days; 
 24.36     (ii) meals are provided to persons who rent rooms, the cost 
 25.1   of which is incorporated in the basic room rate; 
 25.2      (iii) meals are not provided to the general public except 
 25.3   for special events on fewer than seven days in the calendar year 
 25.4   preceding the year of the assessment; and 
 25.5      (iv) the owner is the operator of the property. 
 25.6   The market value subject to the 4c classification under this 
 25.7   clause is limited to five rental units.  Any rental units on the 
 25.8   property in excess of five, must be valued and assessed as class 
 25.9   3a.  The portion of the property used for purposes of a 
 25.10  homestead by the owner must be classified as class 1a property 
 25.11  under subdivision 22. 
 25.12     Class 4c property has a class rate of 1.5 percent of market 
 25.13  value, except that (i) each parcel of seasonal residential 
 25.14  recreational property not used for commercial purposes has the 
 25.15  same class rates as class 4bb property, (ii) manufactured home 
 25.16  parks assessed under clause (5) have the same class rate as 
 25.17  class 4b property, (iii) commercial-use seasonal residential 
 25.18  recreational property has a class rate of one percent for the 
 25.19  first $500,000 of market value, which includes any market value 
 25.20  receiving the one percent rate under subdivision 22, and 1.25 
 25.21  percent for the remaining market value, (iv) the market value of 
 25.22  property described in clause (4) has a class rate of one 
 25.23  percent, (v) the market value of property described in clauses 
 25.24  (2) and (6) has a class rate of 1.25 percent, and (vi) that 
 25.25  portion of the market value of property in clause (8) qualifying 
 25.26  for class 4c property has a class rate of 1.25 percent.  
 25.27     (e) Class 4d property is qualifying low-income rental 
 25.28  housing certified to the assessor by the housing finance agency 
 25.29  under sections 273.126 and 462A.071.  Class 4d includes land in 
 25.30  proportion to the total market value of the building that is 
 25.31  qualifying low-income rental housing.  For all properties 
 25.32  qualifying as class 4d, the market value determined by the 
 25.33  assessor must be based on the normal approach to value using 
 25.34  normal unrestricted rents. 
 25.35     Class 4d property has a class rate of 0.9 percent for taxes 
 25.36  payable in 2002, and one percent for taxes payable in 2003 and 
 26.1   1.25 percent for taxes payable in 2004 and thereafter.  
 26.2      [EFFECTIVE DATE.] This section is effective the day 
 26.3   following final enactment. 
 26.4      Sec. 13.  Minnesota Statutes 2002, section 273.1398, 
 26.5   subdivision 4d, is amended to read: 
 26.6      Subd. 4d.  [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.] 
 26.7   For aid payable in 2004, each county's aid under subdivision 2 
 26.8   shall be permanently reduced by an amount equal to the county's 
 26.9   2004 reimbursement for nonfederal expenditures for out-of-home 
 26.10  placements, as provided in section 245.775, provided that 
 26.11  payments will be made under section 477A.0123 in calendar year 
 26.12  2004.  The counties shall provide all information requested by 
 26.13  the commissioner of human services necessary to allow the 
 26.14  commissioner to certify the previous three years' average 
 26.15  nonfederal costs to the commissioner of revenue by July 15, 2004 
 26.16  1, 2003.  The aid reduction under this subdivision must not 
 26.17  exceed the difference between (1) the amount of aid calculated 
 26.18  for the county for calendar year 2004 under subdivision 2, 
 26.19  including any addition under section 477A.07, and (2) the amount 
 26.20  of any aid reductions for the state takeover of courts contained 
 26.21  in Laws 2001, First Special Session chapter 5, article 5. 
 26.22     [EFFECTIVE DATE.] This section is effective for aids 
 26.23  payable in 2004 and thereafter. 
 26.24     Sec. 14.  Minnesota Statutes 2002, section 273.372, is 
 26.25  amended to read: 
 26.26     273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD 
 26.27  VALUATIONS.] 
 26.28     An appeal by a utility or railroad company concerning the 
 26.29  exemption, valuation, or classification on of property for which 
 26.30  the commissioner of revenue has provided the city or county 
 26.31  assessor with commissioner's orders valuations by order, or for 
 26.32  which the commissioner has recommended values to the city or 
 26.33  county assessor, must be brought against the commissioner in tax 
 26.34  court or in district court of the county where the property is 
 26.35  located, and not against the county or taxing district where the 
 26.36  property is located.  If the appeal to a court is of from an 
 27.1   order of the commissioner, it must be brought under chapter 
 27.2   271.  If the appeal is from the exemption, valuation, 
 27.3   classification, or tax that results from implementation of the 
 27.4   commissioner's order or recommendation, it must be brought under 
 27.5   chapter 278, and the procedures provisions in that chapter 
 27.6   apply, except that service shall be on the commissioner only and 
 27.7   not on the county officials specified in section 278.01, 
 27.8   subdivision 1.  This provision applies to the property contained 
 27.9   under described in sections 273.33, 273.35, 273.36, and 273.37, 
 27.10  but only if the appealed values have remained unchanged from 
 27.11  those provided to the city or county by the commissioner.  If 
 27.12  the exemption, valuation, or classification being appealed has 
 27.13  been changed by the city or county, then the action must be 
 27.14  brought under chapter 278 in the county where the property is 
 27.15  located and proper service must be made upon the county 
 27.16  officials as specified in section 278.01, subdivision 1. 
 27.17     Upon filing of any appeal by a utility company or railroad 
 27.18  against the commissioner, the commissioner shall give notice by 
 27.19  first class mail to each county which would be affected by the 
 27.20  appeal. 
 27.21     Companies that submit the reports under section 270.82 or 
 27.22  273.371 by the date specified in that section, or by the date 
 27.23  specified by the commissioner in an extension, may appeal 
 27.24  administratively to the commissioner under the procedures in 
 27.25  section 270.11, subdivision 6, prior to bringing an action in 
 27.26  tax court or in district court, however, instituting an 
 27.27  administrative appeal with the commissioner does not change or 
 27.28  modify the deadline in section 271.06 for appealing an order of 
 27.29  the commissioner in tax court or the deadline in section 278.01 
 27.30  for bringing an action filing a property tax claim or objection 
 27.31  in tax court or district court. 
 27.32     [EFFECTIVE DATE.] This section is effective the day 
 27.33  following final enactment. 
 27.34     Sec. 15.  Minnesota Statutes 2002, section 275.025, 
 27.35  subdivision 1, is amended to read: 
 27.36     Subdivision 1.  [LEVY AMOUNT.] The state general levy is 
 28.1   levied against commercial-industrial property and 
 28.2   seasonal residential recreational property, as defined in this 
 28.3   section.  The state general levy base amount is $592,000,000 for 
 28.4   taxes payable in 2002.  For taxes payable in subsequent years, 
 28.5   the levy base amount is increased each year by multiplying the 
 28.6   levy base amount for the prior year by the sum of one plus the 
 28.7   rate of increase, if any, in the implicit price deflator for 
 28.8   government consumption expenditures and gross investment for 
 28.9   state and local governments prepared by the Bureau of Economic 
 28.10  Analysts of the United States Department of Commerce for the 
 28.11  12-month period ending March 31 of the year prior to the year 
 28.12  the taxes are payable.  The tax under this section is not 
 28.13  treated as a local tax rate under section 469.177 and is not the 
 28.14  levy of a governmental unit under chapters 276A and 473F.  
 28.15  Beginning in fiscal year 2004, and in each year thereafter, the 
 28.16  commissioner of finance shall deposit in an education reserve 
 28.17  account, which account is hereby established, the increased 
 28.18  amount of the state general levy received for deposit in the 
 28.19  general fund for that year over the amount of the state general 
 28.20  levy received for deposit in the general fund in fiscal year 
 28.21  2003.  The amounts in the education reserve account do not lapse 
 28.22  or cancel each year, but remain until appropriated by law for 
 28.23  education aid or higher education funding. 
 28.24     [EFFECTIVE DATE.] This section is effective for taxes 
 28.25  payable in 2004 and thereafter, except that the change from 
 28.26  "seasonal recreational property" to "seasonal residential 
 28.27  recreational property" is effective the day following final 
 28.28  enactment. 
 28.29     Sec. 16.  Minnesota Statutes 2002, section 275.025, 
 28.30  subdivision 3, is amended to read: 
 28.31     Subd. 3.  [SEASONAL RESIDENTIAL RECREATIONAL TAX CAPACITY.] 
 28.32  For the purposes of this section, "seasonal residential 
 28.33  recreational tax capacity" means the tax capacity of all class 
 28.34  4c(1) property under section 273.13, subdivision 25, except that 
 28.35  the first $76,000 of market value of each noncommercial class 
 28.36  4c(1) property has a tax capacity for this purpose equal to 40 
 29.1   percent of its tax capacity under section 273.13. 
 29.2      [EFFECTIVE DATE.] This section is effective the day 
 29.3   following final enactment. 
 29.4      Sec. 17.  Minnesota Statutes 2002, section 277.20, 
 29.5   subdivision 2, is amended to read: 
 29.6      Subd. 2.  [FILING OF LIEN FOR ENFORCEABILITY.] The lien 
 29.7   imposed by subdivision 1 is not enforceable against any 
 29.8   purchaser, mortgagee, pledgee, holder of a Uniform Commercial 
 29.9   Code security interest, mechanic's lienor, or judgment lien 
 29.10  creditor until a notice of lien has been filed by the county 
 29.11  treasurer in the office of the county recorder of the county in 
 29.12  which the property is situated, or, in the case of personal 
 29.13  property belonging to an individual who is not a resident of 
 29.14  this state, or that is a corporation, partnership, or other 
 29.15  organization, in the office of the secretary of state.  Priority 
 29.16  of a lien created under Laws 1991, chapter 291, article 15, 
 29.17  shall be determined in accordance with the provisions of section 
 29.18  507.34.  Liens filed in the office of the county recorder shall 
 29.19  be filed with the state tax liens filed pursuant to section 
 29.20  270.69, and the index shall indicate the name of the county for 
 29.21  which the lien was filed.  If the land is registered, the notice 
 29.22  of lien shall be filed in the office of the registrar of titles 
 29.23  of the county in which the property is registered.  
 29.24  Notwithstanding any other law to the contrary, the county 
 29.25  treasurer is exempt from the payment of fees when the lien is 
 29.26  offered for filing or recording; the fee for filing or recording 
 29.27  the lien must be paid at the time the release of lien is offered 
 29.28  for filing or recording.  Notwithstanding any law to the 
 29.29  contrary, the fee for filing or recording the lien or the 
 29.30  release of lien is $15.  
 29.31     [EFFECTIVE DATE.] This section is effective for liens filed 
 29.32  on or after the day following final enactment. 
 29.33     Sec. 18.  Minnesota Statutes 2002, section 279.06, 
 29.34  subdivision 1, is amended to read: 
 29.35     Subdivision 1.  [LIST AND NOTICE.] Within five days after 
 29.36  the filing of such list, the court administrator shall return a 
 30.1   copy thereof to the county auditor, with a notice prepared and 
 30.2   signed by the court administrator, and attached thereto, which 
 30.3   may be substantially in the following form: 
 30.4      State of Minnesota        )                            
 30.5                                ) ss.                        
 30.6      County of ............... )                            
 30.7                                               District Court
 30.8                                .......... Judicial District.
 30.9      The state of Minnesota, to all persons, companies, or 
 30.10  corporations who have or claim any estate, right, title, or 
 30.11  interest in, claim to, or lien upon, any of the several parcels 
 30.12  of land described in the list hereto attached: 
 30.13     The list of taxes and penalties on real property for the 
 30.14  county of ............................... remaining delinquent 
 30.15  on the first Monday in January, ......., has been filed in the 
 30.16  office of the court administrator of the district court of said 
 30.17  county, of which that hereto attached is a copy.  Therefore, 
 30.18  you, and each of you, are hereby required to file in the office 
 30.19  of said court administrator, on or before the 20th day after the 
 30.20  publication of this notice and list, your answer, in writing, 
 30.21  setting forth any objection or defense you may have to the 
 30.22  taxes, or any part thereof, upon any parcel of land described in 
 30.23  the list, in, to, or on which you have or claim any estate, 
 30.24  right, title, interest, claim, or lien, and, in default thereof, 
 30.25  judgment will be entered against such parcel of land for the 
 30.26  taxes on such list appearing against it, and for all penalties, 
 30.27  interest, and costs.  Based upon said judgment, the land shall 
 30.28  be sold to the state of Minnesota on the second Monday in May, 
 30.29  .......  The period of redemption for all lands sold to the 
 30.30  state at a tax judgment sale shall be three years from the date 
 30.31  of sale to the state of Minnesota if the land is within an 
 30.32  incorporated area unless it is: 
 30.33     (a) nonagricultural homesteaded land as defined in section 
 30.34  273.13, subdivision 22; 
 30.35     (b) homesteaded agricultural land as defined in section 
 30.36  273.13, subdivision 23, paragraph (a); 
 31.1      (c) seasonal residential recreational land as defined in 
 31.2   section 273.13, subdivisions 22, paragraph (c), and 25, 
 31.3   paragraph (c) (d), clause (5) (1), in which event the period of 
 31.4   redemption is five years from the date of sale to the state of 
 31.5   Minnesota; 
 31.6      (d) abandoned property and pursuant to section 281.173 a 
 31.7   court order has been entered shortening the redemption period to 
 31.8   five weeks; or 
 31.9      (e) vacant property as described under section 281.174, 
 31.10  subdivision 2, and for which a court order is entered shortening 
 31.11  the redemption period under section 281.174. 
 31.12     The period of redemption for all other lands sold to the 
 31.13  state at a tax judgment sale shall be five years from the date 
 31.14  of sale.  
 31.15     Inquiries as to the proceedings set forth above can be made 
 31.16  to the county auditor of ..... county whose address is ..... .  
 31.17      (Signed) ............................................., 
 31.18      Court Administrator of the District Court of the County 
 31.19      of .................................................... 
 31.20      (Here insert list.) 
 31.21     The list referred to in the notice shall be substantially 
 31.22  in the following form: 
 31.23     List of real property for the county of 
 31.24  ......................., on which taxes remain delinquent on the 
 31.25  first Monday in January, .......: 
 31.26                        Town of (Fairfield), 
 31.27                     Township (40), Range (20), 
 31.28   Names (and 
 31.29   Current Filed 
 31.30   Addresses) for 
 31.31   the Taxpayers 
 31.32   and Fee Owners 
 31.33   and in Addition 
 31.34   Those Parties 
 31.35   Who Have Filed 
 31.36   Their Addresses                            Tax 
 32.1    Pursuant to     Subdivision of            Parcel   Total Tax 
 32.2    section 276.041    Section       Section  Number  and Penalty
 32.3                                                        $ cts.
 32.4    John Jones  S.E. 1/4 of S.W. 1/4    10    23101       2.20  
 32.5    (825 Fremont  
 32.6    Fairfield, MN 
 32.7    55000) 
 32.8    Bruce Smith  That part of N.E. 1/4 
 32.9    (2059 Hand   of S.W. 1/4 desc. as 
 32.10   Fairfield,   follows:  Beg. at the 
 32.11   MN 55000)    S.E. corner of said 
 32.12   and          N.E. 1/4 of S.W. 1/4;  
 32.13   Fairfield    thence N. along the E.  
 32.14   State Bank   line of said N.E. 1/4 
 32.15   (100 Main    of S.W. 1/4 a distance 
 32.16   Street       of 600 ft.; thence W. 
 32.17   Fairfield,   parallel with the S. 
 32.18   MN 55000)    line of said N.E. 1/4 
 32.19                of S.W. 1/4 a distance 
 32.20                of 600 ft.; thence S. 
 32.21                parallel with said E. 
 32.22                line a distance of 600 
 32.23                ft. to S. line of said 
 32.24                N.E. 1/4 of S.W. 1/4;
 32.25                thence E. along said S. 
 32.26                line a distance of 600 
 32.27                ft. to the point of 
 32.28                beg. ...............    21    33211       3.15  
 32.29     As to platted property, the form of heading shall conform 
 32.30  to circumstances and be substantially in the following form:  
 32.31                        City of (Smithtown) 
 32.32                  Brown's Addition, or Subdivision 
 32.33   Names (and 
 32.34   Current Filed 
 32.35   Addresses) for 
 32.36   the Taxpayers 
 33.1    and Fee Owners 
 33.2    and in Addition 
 33.3    Those Parties 
 33.4    Who have Filed 
 33.5    Their Addresses                         Tax 
 33.6    Pursuant to                            Parcel      Total Tax 
 33.7    section 276.041     Lot     Block      Number     and Penalty
 33.8                                                        $ cts.
 33.9    John Jones           15         9      58243          2.20 
 33.10   (825 Fremont 
 33.11   Fairfield, 
 33.12   MN 55000) 
 33.13   Bruce Smith          16         9      58244          3.15 
 33.14   (2059 Hand 
 33.15   Fairfield, 
 33.16   MN 55000) 
 33.17   and 
 33.18   Fairfield 
 33.19   State Bank 
 33.20   (100 Main Street 
 33.21   Fairfield, 
 33.22   MN 55000) 
 33.23     The names, descriptions, and figures employed in 
 33.24  parentheses in the above forms are merely for purposes of 
 33.25  illustration. 
 33.26     The name of the town, township, range or city, and addition 
 33.27  or subdivision, as the case may be, shall be repeated at the 
 33.28  head of each column of the printed lists as brought forward from 
 33.29  the preceding column.  
 33.30     Errors in the list shall not be deemed to be a material 
 33.31  defect to affect the validity of the judgment and sale. 
 33.32     [EFFECTIVE DATE.] This section is effective the day 
 33.33  following final enactment. 
 33.34     Sec. 19.  Minnesota Statutes 2002, section 281.17, is 
 33.35  amended to read: 
 33.36     281.17 [PERIOD FOR REDEMPTION.] 
 34.1      Except for properties for which the period of redemption 
 34.2   has been limited under sections 281.173 and 281.174, the 
 34.3   following periods for redemption apply. 
 34.4      The period of redemption for all lands sold to the state at 
 34.5   a tax judgment sale shall be three years from the date of sale 
 34.6   to the state of Minnesota if the land is within an incorporated 
 34.7   area unless it is:  (a) nonagricultural homesteaded land as 
 34.8   defined in section 273.13, subdivision 22; (b) homesteaded 
 34.9   agricultural land as defined in section 273.13, subdivision 23, 
 34.10  paragraph (a); or (c) seasonal residential recreational land as 
 34.11  defined in section 273.13, subdivision 22, paragraph (c), or 25, 
 34.12  paragraph (d), clause (1), for which the period of redemption is 
 34.13  five years from the date of sale to the state of Minnesota. 
 34.14     The period of redemption for homesteaded lands as defined 
 34.15  in section 273.13, subdivision 22, located in a targeted 
 34.16  neighborhood as defined in Laws 1987, chapter 386, article 6, 
 34.17  section 4, and sold to the state at a tax judgment sale is three 
 34.18  years from the date of sale.  The period of redemption for all 
 34.19  lands located in a targeted neighborhood as defined in Laws 
 34.20  1987, chapter 386, article 6, section 4, except (1) homesteaded 
 34.21  lands as defined in section 273.13, subdivision 22, and (2) for 
 34.22  periods of redemption beginning after June 30, 1991, but before 
 34.23  July 1, 1996, lands located in the Loring Park targeted 
 34.24  neighborhood on which a notice of lis pendens has been served, 
 34.25  and sold to the state at a tax judgment sale is one year from 
 34.26  the date of sale. 
 34.27     The period of redemption for all real property constituting 
 34.28  a mixed municipal solid waste disposal facility that is a 
 34.29  qualified facility under section 115B.39, subdivision 1, is one 
 34.30  year from the date of the sale to the state of Minnesota. 
 34.31     The period of redemption for all other lands sold to the 
 34.32  state at a tax judgment sale shall be five years from the date 
 34.33  of sale, except that the period of redemption for nonhomesteaded 
 34.34  agricultural land as defined in section 273.13, subdivision 23, 
 34.35  paragraph (b), shall be two years from the date of sale if at 
 34.36  that time that property is owned by a person who owns one or 
 35.1   more parcels of property on which taxes are delinquent, and the 
 35.2   delinquent taxes are more than 25 percent of the prior year's 
 35.3   school district levy. 
 35.4      [EFFECTIVE DATE.] This section is effective the day 
 35.5   following final enactment. 
 35.6      Sec. 20.  Minnesota Statutes 2002, section 290C.02, 
 35.7   subdivision 3, is amended to read: 
 35.8      Subd. 3.  [CLAIMANT.] "Claimant" means a person, as that 
 35.9   term is defined in section 290.01, subdivision 2, who owns 
 35.10  forest land in Minnesota and files an application authorized by 
 35.11  the Sustainable Forest Incentive Act.  For purposes of section 
 35.12  290C.11, claimant also includes any person bound by the covenant 
 35.13  required in section 290C.04.  No more than one claimant is 
 35.14  entitled to a payment under this chapter with respect to any 
 35.15  tract, parcel, or piece of land enrolled under this chapter that 
 35.16  has been assigned the same parcel identification number.  When 
 35.17  enrolled forest land is owned by two or more persons, the owners 
 35.18  must determine between them which person may claim the payments 
 35.19  provided under sections 290C.01 to 290C.11. 
 35.20     [EFFECTIVE DATE.] This section is effective the day 
 35.21  following final enactment. 
 35.22     Sec. 21.  Minnesota Statutes 2002, section 290C.02, 
 35.23  subdivision 7, is amended to read: 
 35.24     Subd. 7.  [FOREST MANAGEMENT PLAN.] "Forest management 
 35.25  plan" means a written document providing a framework for 
 35.26  site-specific healthy, productive, and sustainable forest 
 35.27  resources.  A forest management plan must include at least the 
 35.28  following:  (i) owner-specific forest management goals for the 
 35.29  property land; (ii) a reliable field inventory of the individual 
 35.30  forest cover types, their age, and density; (iii) a description 
 35.31  of the soil type and quality; (iv) an aerial photo and/or map of 
 35.32  the vegetation and other natural features of the property land 
 35.33  clearly indicating the boundaries of the property land and of 
 35.34  the forest land; (v) the proposed future conditions of the 
 35.35  property land; (vi) prescriptions to meet proposed future 
 35.36  conditions of the property land; (vii) a recommended timetable 
 36.1   for implementing the prescribed activities; and (viii) a legal 
 36.2   description of the parcels land encompassing the parcels 
 36.3   included in the plan.  All management activities prescribed in a 
 36.4   plan must be in accordance with the recommended timber 
 36.5   harvesting and forest management guidelines.  The commissioner 
 36.6   of natural resources shall provide a framework for plan content 
 36.7   and updating and revising plans. 
 36.8      [EFFECTIVE DATE.] This section is effective the day 
 36.9   following final enactment. 
 36.10     Sec. 22.  Minnesota Statutes 2002, section 290C.03, is 
 36.11  amended to read: 
 36.12     290C.03 [ELIGIBILITY REQUIREMENTS.] 
 36.13     (a) Property Land may be enrolled in the sustainable forest 
 36.14  incentive program under this chapter if all of the following 
 36.15  conditions are met: 
 36.16     (1) property the land consists of at least 20 contiguous 
 36.17  acres and at least 50 percent of the land must meet the 
 36.18  definition of forest land in section 88.01, subdivision 7, 
 36.19  during the enrollment; 
 36.20     (2) a forest management plan for the property land must be 
 36.21  prepared by an approved plan writer and implemented during the 
 36.22  period in which the land is enrolled; 
 36.23     (3) timber harvesting and forest management guidelines must 
 36.24  be used in conjunction with any timber harvesting or forest 
 36.25  management activities conducted on the land during the period in 
 36.26  which the land is enrolled; 
 36.27     (4) the property land must be enrolled for a minimum of 
 36.28  eight years; 
 36.29     (5) there are no delinquent property taxes on the property 
 36.30  land; and 
 36.31     (6) claimants enrolling more than 1,920 acres in the 
 36.32  sustainable forest incentive program must allow year-round, 
 36.33  nonmotorized access to fish and wildlife resources on enrolled 
 36.34  land except within one-fourth mile of a permanent dwelling or 
 36.35  during periods of high fire hazard as determined by the 
 36.36  commissioner of natural resources. 
 37.1      (b) Claimants required to allow access under paragraph (a), 
 37.2   clause (6), do not by that action: 
 37.3      (1) extend any assurance that the land is safe for any 
 37.4   purpose; 
 37.5      (2) confer upon the person the legal status of an invitee 
 37.6   or licensee to whom a duty of care is owed; or 
 37.7      (3) assume responsibility for or incur liability for any 
 37.8   injury to the person or property caused by an act or omission of 
 37.9   the person. 
 37.10     [EFFECTIVE DATE.] This section is effective the day 
 37.11  following final enactment. 
 37.12     Sec. 23.  Minnesota Statutes 2002, section 290C.07, is 
 37.13  amended to read: 
 37.14     290C.07 [CALCULATION OF INCENTIVE PAYMENT.] 
 37.15     An approved claimant under the sustainable forest incentive 
 37.16  program is eligible to receive an annual payment.  The payment 
 37.17  shall equal the greater of: 
 37.18     (1) the difference between the property tax that would be 
 37.19  paid on the property land using the previous year's statewide 
 37.20  average total township tax rate and the class rate for class 2b 
 37.21  timberland under section 273.13, subdivision 23, paragraph (b), 
 37.22  if the property land were valued at (i) the average statewide 
 37.23  timberland market value per acre calculated under section 
 37.24  290C.06, and (ii) the average statewide timberland current use 
 37.25  value per acre calculated under section 290C.02, subdivision 5; 
 37.26     (2) two-thirds of the property tax amount determined by 
 37.27  using the previous year's statewide average total township tax 
 37.28  rate, the estimated market value per acre as calculated in 
 37.29  section 290C.06, and the class rate for 2b timberland under 
 37.30  section 273.13, subdivision 23, paragraph (b); or 
 37.31     (3) $1.50 per acre for each acre enrolled in the 
 37.32  sustainable forest incentive program. 
 37.33     [EFFECTIVE DATE.] This section is effective the day 
 37.34  following final enactment. 
 37.35     Sec. 24.  Minnesota Statutes 2002, section 290C.09, is 
 37.36  amended to read: 
 38.1      290C.09 [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 
 38.2      The commissioner shall immediately remove any property land 
 38.3   enrolled in the sustainable forest incentive program for which 
 38.4   taxes are determined to be delinquent as provided in chapter 279 
 38.5   and shall notify the claimant of such action.  Lands terminated 
 38.6   from the sustainable forest incentive program under this section 
 38.7   are not entitled to any payments provided in this chapter and 
 38.8   are subject to removal penalties prescribed in section 290C.11.  
 38.9   The claimant has 60 days from the receipt of notice from the 
 38.10  commissioner under this section to pay the delinquent taxes.  If 
 38.11  the delinquent taxes are paid within this 60-day period, the 
 38.12  lands shall be reinstated in the program as if they had not been 
 38.13  withdrawn and without the payment of a penalty. 
 38.14     [EFFECTIVE DATE.] This section is effective the day 
 38.15  following final enactment. 
 38.16     Sec. 25.  Minnesota Statutes 2002, section 290C.10, is 
 38.17  amended to read: 
 38.18     290C.10 [WITHDRAWAL PROCEDURES.] 
 38.19     An approved claimant under the sustainable forest incentive 
 38.20  program for a minimum of four years may notify the commissioner 
 38.21  of the intent to terminate enrollment.  Within 90 days of 
 38.22  receipt of notice to terminate enrollment, the commissioner 
 38.23  shall inform the claimant in writing, acknowledging receipt of 
 38.24  this notice and indicating the effective date of termination 
 38.25  from the sustainable forest incentive program.  Termination of 
 38.26  enrollment in the sustainable forest incentive program occurs on 
 38.27  January 1 of the fifth calendar year that begins after receipt 
 38.28  by the commissioner of the termination notice.  After the 
 38.29  commissioner issues an effective date of termination, a claimant 
 38.30  wishing to continue the property's land's enrollment in the 
 38.31  sustainable forest incentive program beyond the termination date 
 38.32  must apply for enrollment as prescribed in section 290C.04.  A 
 38.33  claimant who withdraws a parcel of land from this program may 
 38.34  not reenroll the parcel for a period of three years.  Within 90 
 38.35  days after the termination date, the commissioner shall execute 
 38.36  and acknowledge a document releasing the land from the covenant 
 39.1   required under this chapter.  The document must be mailed to the 
 39.2   claimant and is entitled to be recorded.  The commissioner may 
 39.3   allow early withdrawal from the Sustainable Forest Incentive Act 
 39.4   without penalty in cases of condemnation for a public purpose 
 39.5   notwithstanding the provisions of this section. 
 39.6      [EFFECTIVE DATE.] This section is effective the day 
 39.7   following final enactment. 
 39.8      Sec. 26.  Minnesota Statutes 2002, section 290C.11, is 
 39.9   amended to read: 
 39.10     290C.11 [PENALTIES FOR REMOVAL.] 
 39.11     (a) If the commissioner determines that property land 
 39.12  enrolled in the sustainable forest incentive program is in 
 39.13  violation of the conditions for enrollment as specified in 
 39.14  section 290C.03, the commissioner shall notify the claimant of 
 39.15  the intent to remove all enrolled land from the sustainable 
 39.16  forest incentive program.  The claimant has 60 days to appeal 
 39.17  this determination. The appeal must be made in writing to the 
 39.18  commissioner, who shall, within 60 days, notify the claimant as 
 39.19  to the outcome of the appeal.  Within 60 days after the 
 39.20  commissioner denies an appeal, or within 120 days after the 
 39.21  commissioner received a written appeal if the commissioner has 
 39.22  not made a determination in that time, the owner may appeal to 
 39.23  tax court under chapter 271 as if the appeal is from an order of 
 39.24  the commissioner. 
 39.25     (b) If the commissioner determines the property land is to 
 39.26  be removed from the sustainable forest incentive program, the 
 39.27  claimant is liable for payment to the commissioner in the amount 
 39.28  equal to the payments received under this chapter for the 
 39.29  previous four-year period, plus interest.  The claimant has 90 
 39.30  days to satisfy the payment for removal of land from the 
 39.31  sustainable forest incentive program under this section.  If the 
 39.32  penalty is not paid within the 90-day period under this 
 39.33  paragraph, the commissioner shall certify the amount to the 
 39.34  county auditor for collection as a part of the general ad 
 39.35  valorem real property taxes on the land in the following taxes 
 39.36  payable year.  
 40.1      (c) If land is removed from the sustainable forest 
 40.2   incentive program under this section, the claimant is not 
 40.3   entitled to any payments provided in this chapter.  The claimant 
 40.4   may not reenroll the land for a period of three years from the 
 40.5   date the land is removed from the program.  The covenant as 
 40.6   provided in section 290C.04 continues in effect. 
 40.7      [EFFECTIVE DATE.] This section is effective the day 
 40.8   following final enactment. 
 40.9      Sec. 27.  Minnesota Statutes 2002, section 515B.1-116, is 
 40.10  amended to read: 
 40.11     515B.1-116 [RECORDING.] 
 40.12     (a) A declaration, bylaws, any amendment to a declaration 
 40.13  or bylaws, and any other instrument affecting a common interest 
 40.14  community shall be entitled to be recorded.  In those counties 
 40.15  which have a tract index, the county recorder shall enter the 
 40.16  declaration in the tract index for each unit affected.  The 
 40.17  registrar of titles shall file the declaration in accordance 
 40.18  with section 508.351 or 508A.351. 
 40.19     (b) The recording officer shall upon request promptly 
 40.20  assign a number (CIC number) to a common interest community to 
 40.21  be formed or to a common interest community resulting from the 
 40.22  merger of two or more common interest communities. 
 40.23     (c) Documents recorded pursuant to this chapter shall in 
 40.24  the case of registered land be filed, and references to the 
 40.25  recording of documents shall mean filed in the case of 
 40.26  registered land. 
 40.27     (d) Subject to any specific requirements of this chapter, 
 40.28  if a recorded document relating to a common interest community 
 40.29  purports to require a certain vote or signatures approving any 
 40.30  restatement or amendment of the document by a certain number or 
 40.31  percentage of unit owners or secured parties, and if the 
 40.32  amendment or restatement is to be recorded pursuant to this 
 40.33  chapter, an affidavit of the president or secretary of the 
 40.34  association stating that the required vote or signatures have 
 40.35  been obtained shall be attached to the document to be recorded 
 40.36  and shall constitute prima facie evidence of the representations 
 41.1   contained therein. 
 41.2      (e) If a common interest community is located on registered 
 41.3   land, the recording fee for any document affecting two or more 
 41.4   units shall be the then-current fee for registering the document 
 41.5   on the certificates of title for the first ten affected 
 41.6   certificates and one-third of the then-current fee for each 
 41.7   additional affected certificate.  This provision shall not apply 
 41.8   to recording fees for deeds of conveyance, with the exception of 
 41.9   deeds given pursuant to sections 515B.2-119 and 515B.3-112. 
 41.10     (f) Except as permitted under this subsection, a recording 
 41.11  officer shall not file or record a declaration creating a new 
 41.12  common interest community, unless the county treasurer has 
 41.13  certified that the property taxes payable in the current year 
 41.14  for the real estate included in the proposed common interest 
 41.15  community have been paid.  This certification is in addition to 
 41.16  the certification for delinquent taxes required by section 
 41.17  272.12.  In the case of preexisting common interest communities, 
 41.18  the recording officer shall accept, file, and record the 
 41.19  following instruments, without requiring a certification as to 
 41.20  the current or delinquent taxes on any of the units in the 
 41.21  common interest community:  (i) a declaration subjecting the 
 41.22  common interest community to this chapter; (ii) a declaration 
 41.23  changing the form of a common interest community pursuant to 
 41.24  section 515B.2-123; or (iii) an amendment to or restatement of 
 41.25  the declaration, bylaws, or CIC plat.  In order for the 
 41.26  instruments an instrument to be accepted and recorded under the 
 41.27  preceding sentence, the assessor must certify or otherwise 
 41.28  inform the recording officer that, for taxes payable in the 
 41.29  current year, the assessor has allocated taxable values to each 
 41.30  unit or has separately assessed each unit instrument must not 
 41.31  create or change unit or common area boundaries. 
 41.32     [EFFECTIVE DATE.] This section is effective for deeds or 
 41.33  instruments accepted for recording or registration on or after 
 41.34  July 1, 2003. 
 41.35     Sec. 28.  Laws 2002, chapter 377, article 6, section 4, the 
 41.36  effective date, is amended to read: 
 42.1      [EFFECTIVE DATE.] This section is effective for aids 
 42.2   payable in 2004 May 16, 2002, and thereafter. 
 42.3      Sec. 29.  [REPEALER.] 
 42.4      (a) Minnesota Statutes 2002, section 477A.065, is repealed 
 42.5   effective for aid payable in 2004 and thereafter. 
 42.6      (b) Minnesota Rules, parts 8106.0100, subparts 11, 15, and 
 42.7   16; and 8106.0200, are repealed effective the day following 
 42.8   final enactment. 
 42.9                              ARTICLE 3 
 42.10                        SALES AND USE TAXES 
 42.11     Section 1.  Minnesota Statutes 2002, section 289A.50, 
 42.12  subdivision 2a, is amended to read: 
 42.13     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] (a) If a 
 42.14  vendor has collected from a purchaser a tax on a transaction 
 42.15  that is not subject to the tax imposed by chapter 297A, the 
 42.16  purchaser may apply directly to the commissioner for a refund 
 42.17  under this section if: 
 42.18     (a) (1) the purchaser is currently registered or was 
 42.19  registered during the period of the claim, to collect and remit 
 42.20  the sales tax or to remit the use tax; and 
 42.21     (2) either 
 42.22     (b) (i) the amount of the refund to be applied for exceeds 
 42.23  $500, or 
 42.24     (ii) the amount of the refund to be applied for does not 
 42.25  exceed $500, but the purchaser also applies for a capital 
 42.26  equipment claim at the same time, and the total of the two 
 42.27  refunds exceeds $500. 
 42.28     (b) The purchaser may not file more than two applications 
 42.29  for refund under this subdivision in a calendar year. 
 42.30     [EFFECTIVE DATE.] This section is effective for claims 
 42.31  filed on or after the day following final enactment. 
 42.32     Sec. 2.  Minnesota Statutes 2002, section 289A.60, 
 42.33  subdivision 15, is amended to read: 
 42.34     Subd. 15.  [ACCELERATED PAYMENT OF JUNE SALES TAX 
 42.35  LIABILITY; PENALTY FOR UNDERPAYMENT.] If a vendor is required by 
 42.36  law to submit an estimation of June sales tax liabilities and 62 
 43.1   75 percent payment by a certain date, the vendor shall pay a 
 43.2   penalty equal to ten percent of the amount of actual June 
 43.3   liability required to be paid in June less the amount remitted 
 43.4   in June.  The penalty must not be imposed, however, if the 
 43.5   amount remitted in June equals the lesser of 62 75 percent of 
 43.6   the preceding May's liability or 62 75 percent of the average 
 43.7   monthly liability for the previous calendar year. 
 43.8      [EFFECTIVE DATE.] This section is effective for payments 
 43.9   due after December 31, 2002. 
 43.10     Sec. 3.  Minnesota Statutes 2002, section 297A.61, 
 43.11  subdivision 34, is amended to read: 
 43.12     Subd. 34.  [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 
 43.13  through vending machines" means food dispensed from a machine or 
 43.14  other mechanical device that accepts payment including honor 
 43.15  payments. 
 43.16     [EFFECTIVE DATE.] This section is effective for sales and 
 43.17  purchases made on or after the day following final enactment. 
 43.18     Sec. 4.  Minnesota Statutes 2002, section 297A.665, is 
 43.19  amended to read: 
 43.20     297A.665 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 
 43.21     (a) For the purpose of the proper administration of this 
 43.22  chapter and to prevent evasion of the tax, until the contrary is 
 43.23  established, it is presumed that:  
 43.24     (1) all gross receipts are subject to the tax; and 
 43.25     (2) all retail sales for delivery in Minnesota are for 
 43.26  storage, use, or other consumption in Minnesota.  
 43.27     (b) The burden of proving that a sale is not a taxable 
 43.28  retail sale is on the seller.  However, the seller may take from 
 43.29  the purchaser at the time of the sale an a fully completed 
 43.30  exemption certificate claiming that the property purchased is 
 43.31  for resale or that the sale is otherwise exempt from the tax 
 43.32  imposed by this chapter which conclusively relieves the seller 
 43.33  from collecting and remitting the tax.  This relief from 
 43.34  liability does not apply to a seller who fraudulently fails to 
 43.35  collect the tax or solicits purchasers to participate in the 
 43.36  unlawful claim of an exemption.  If a seller claiming that 
 44.1   certain sales are exempt, who does is not possess in possession 
 44.2   of the required exemption certificates, must acquire the 
 44.3   certificates within 60 days after receiving written notice from 
 44.4   the commissioner that the certificates are required, deductions 
 44.5   claimed by the seller that required delivery of the certificates 
 44.6   must be disallowed.  If the certificates are not 
 44.7   obtained delivered to the commissioner within the 60-day period, 
 44.8   the sales are considered taxable sales under this 
 44.9   chapter. commissioner may verify the reason or basis for the 
 44.10  exemption claimed in the certificates before allowing any 
 44.11  deductions.  A deduction must not be granted on the basis of 
 44.12  certificates delivered to the commissioner after the 60-day 
 44.13  period. 
 44.14     (c) A purchaser of tangible personal property or any items 
 44.15  listed in section 297A.63 that are shipped or brought to 
 44.16  Minnesota by the purchaser has the burden of proving that the 
 44.17  property was not purchased from a retailer for storage, use, or 
 44.18  consumption in Minnesota.  
 44.19     [EFFECTIVE DATE.] This section is effective for exemption 
 44.20  certificates received for sales occurring after June 30, 2003. 
 44.21     Sec. 5.  Minnesota Statutes 2002, section 297A.67, 
 44.22  subdivision 2, is amended to read: 
 44.23     Subd. 2.  [FOOD AND FOOD INGREDIENTS.] Food and food 
 44.24  ingredients are exempt.  For purposes of this subdivision, 
 44.25  "food" and "food ingredients" mean substances, whether in 
 44.26  liquid, concentrated, solid, frozen, dried, or dehydrated form, 
 44.27  that are sold for ingestion or chewing by humans and are 
 44.28  consumed for their taste or nutritional value.  Food and food 
 44.29  ingredients exempt under this subdivision do not include candy, 
 44.30  soft drinks, food sold through vending machines, and prepared 
 44.31  foods.  Food and food ingredients do not include alcoholic 
 44.32  beverages, dietary supplements, and tobacco.  For purposes of 
 44.33  this subdivision, "alcoholic beverages" means beverages that are 
 44.34  suitable for human consumption and contain one-half of one 
 44.35  percent or more of alcohol by volume.  For purposes of this 
 44.36  subdivision, "tobacco" means cigarettes, cigars, chewing or pipe 
 45.1   tobacco, or any other item that contains tobacco.  For purposes 
 45.2   of this subdivision, "dietary supplements" means any product, 
 45.3   other than tobacco, intended to supplement the diet that: 
 45.4      (1) contains one or more of the following dietary 
 45.5   ingredients: 
 45.6      (i) a vitamin; 
 45.7      (ii) a mineral; 
 45.8      (iii) an herb or other botanical; 
 45.9      (iv) an amino acid; 
 45.10     (v) a dietary substance for use by humans to supplement the 
 45.11  diet by increasing the total dietary intake; and 
 45.12     (vi) a concentrate, metabolite, constituent, extract, or 
 45.13  combination of any ingredient described in items (i) to (v); 
 45.14     (2) is intended for ingestion in tablet, capsule, powder, 
 45.15  softgel, gelcap, or liquid form, or if not intended for 
 45.16  ingestion in such form, is not represented as conventional food 
 45.17  and is not represented for use as a sole item of a meal or of 
 45.18  the diet; and 
 45.19     (3) is required to be labeled as a dietary supplement, 
 45.20  identifiable by the supplement facts box found on the label and 
 45.21  as required pursuant to Code of Federal Regulations, title 21, 
 45.22  section 101.36. 
 45.23     [EFFECTIVE DATE.] This section is effective the day 
 45.24  following final enactment. 
 45.25     Sec. 6.  [REPEALER.] 
 45.26     (a) Minnesota Statutes 2002, section 297A.72, subdivision 
 45.27  1, is repealed effective for exemption certificates received for 
 45.28  sales occurring after June 30, 2003. 
 45.29     (b) Minnesota Statutes 2002, section 297A.97, is repealed 
 45.30  effective for sales and purchases occurring after December 31, 
 45.31  2003. 
 45.32     (c) Minnesota Rules, parts 8130.0800, subparts 5 and 12; 
 45.33  8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3 and 4; 
 45.34  8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; and 
 45.35  8130.8300, are repealed effective the day following final 
 45.36  enactment. 
 46.1                              ARTICLE 4
 46.2                         GROSS REVENUES TAXES
 46.3      Section 1.  Minnesota Statutes 2002, section 295.50, 
 46.4   subdivision 9b, is amended to read: 
 46.5      Subd. 9b.  [PATIENT SERVICES.] (a) "Patient services" means 
 46.6   inpatient and outpatient services and other goods and services 
 46.7   provided by hospitals, surgical centers, or health care 
 46.8   providers.  They include the following health care goods and 
 46.9   services provided to a patient or consumer: 
 46.10     (1) bed and board; 
 46.11     (2) nursing services and other related services; 
 46.12     (3) use of hospitals, surgical centers, or health care 
 46.13  provider facilities; 
 46.14     (4) medical social services; 
 46.15     (5) drugs, biologicals, supplies, appliances, and 
 46.16  equipment; 
 46.17     (6) other diagnostic or therapeutic items or services; 
 46.18     (7) medical or surgical services; 
 46.19     (8) items and services furnished to ambulatory patients not 
 46.20  requiring emergency care; 
 46.21     (9) emergency services; and 
 46.22     (10) covered services listed in section 256B.0625 and in 
 46.23  Minnesota Rules, parts 9505.0170 to 9505.0475. 
 46.24     (b) "Patient services" does not include:  
 46.25     (1) services provided to nursing homes licensed under 
 46.26  chapter 144A; and 
 46.27     (2) examinations for purposes of utilization reviews, 
 46.28  insurance claims or eligibility, litigation, and employment, 
 46.29  including reviews of medical records for those purposes; 
 46.30     (3) services provided by community residential mental 
 46.31  health facilities licensed under Minnesota Rules, parts 
 46.32  9520.0500 to 9520.0690; 
 46.33     (4) services provided by community support programs and 
 46.34  family community support programs approved under Minnesota 
 46.35  Rules, parts 9535.1700 to 9535.1760; 
 46.36     (5) services provided by community mental health centers as 
 47.1   defined in section 245.62, subdivision 2; 
 47.2      (6) services provided by assisted living programs and 
 47.3   congregate housing programs; and 
 47.4      (7) hospice care services. 
 47.5      [EFFECTIVE DATE.] This section is effective for gross 
 47.6   revenues received after December 31, 2002. 
 47.7      Sec. 2.  Minnesota Statutes 2002, section 295.53, 
 47.8   subdivision 1, is amended to read: 
 47.9      Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
 47.10  are excluded from the gross revenues subject to the hospital, 
 47.11  surgical center, or health care provider taxes under sections 
 47.12  295.50 to 295.57 295.59: 
 47.13     (1) payments received for services provided under the 
 47.14  Medicare program, including payments received from the 
 47.15  government, and organizations governed by sections 1833 and 1876 
 47.16  of title XVIII of the federal Social Security Act, United States 
 47.17  Code, title 42, section 1395, and enrollee deductibles, 
 47.18  coinsurance, and copayments, whether paid by the Medicare 
 47.19  enrollee or by a Medicare supplemental coverage as defined in 
 47.20  section 62A.011, subdivision 3, clause (10).  Payments for 
 47.21  services not covered by Medicare are taxable; 
 47.22     (2) medical assistance payments including payments received 
 47.23  directly from the government or from a prepaid plan; 
 47.24     (3) payments received for home health care services; 
 47.25     (4) payments received from hospitals or surgical centers 
 47.26  for goods and services on which liability for tax is imposed 
 47.27  under section 295.52 or the source of funds for the payment is 
 47.28  exempt under clause (1), (2), (7), (8), (10), (13), 
 47.29  or (20) (17); 
 47.30     (5) payments received from health care providers for goods 
 47.31  and services on which liability for tax is imposed under this 
 47.32  chapter or the source of funds for the payment is exempt under 
 47.33  clause (1), (2), (7), (8), (10), (13), or (20) (17); 
 47.34     (6) amounts paid for legend drugs, other than nutritional 
 47.35  products, to a wholesale drug distributor who is subject to tax 
 47.36  under section 295.52, subdivision 3, reduced by reimbursements 
 48.1   received for legend drugs otherwise exempt under this chapter; 
 48.2      (7) payments received under the general assistance medical 
 48.3   care program including payments received directly from the 
 48.4   government or from a prepaid plan; 
 48.5      (8) payments received for providing services under the 
 48.6   MinnesotaCare program including payments received directly from 
 48.7   the government or from a prepaid plan and enrollee deductibles, 
 48.8   coinsurance, and copayments.  For purposes of this clause, 
 48.9   coinsurance means the portion of payment that the enrollee is 
 48.10  required to pay for the covered service; 
 48.11     (9) payments received by a health care provider or the 
 48.12  wholly owned subsidiary of a health care provider for care 
 48.13  provided outside Minnesota; 
 48.14     (10) payments received from the chemical dependency fund 
 48.15  under chapter 254B; 
 48.16     (11) payments received in the nature of charitable 
 48.17  donations that are not designated for providing patient services 
 48.18  to a specific individual or group; 
 48.19     (12) payments received for providing patient services 
 48.20  incurred through a formal program of health care research 
 48.21  conducted in conformity with federal regulations governing 
 48.22  research on human subjects.  Payments received from patients or 
 48.23  from other persons paying on behalf of the patients are subject 
 48.24  to tax; 
 48.25     (13) payments received from any governmental agency for 
 48.26  services benefiting the public, not including payments made by 
 48.27  the government in its capacity as an employer or insurer; 
 48.28     (14) payments received for services provided by community 
 48.29  residential mental health facilities licensed under Minnesota 
 48.30  Rules, parts 9520.0500 to 9520.0690, community support programs 
 48.31  and family community support programs approved under Minnesota 
 48.32  Rules, parts 9535.1700 to 9535.1760, and community mental health 
 48.33  centers as defined in section 245.62, subdivision 2; 
 48.34     (15) (14) government payments received by a regional 
 48.35  treatment center; 
 48.36     (16) payments received for hospice care services; 
 49.1      (17) (15) payments received by a health care provider for 
 49.2   hearing aids and related equipment or prescription eyewear 
 49.3   delivered outside of Minnesota; 
 49.4      (18) (16) payments received by an educational institution 
 49.5   from student tuition, student activity fees, health care service 
 49.6   fees, government appropriations, donations, or grants.  Fee for 
 49.7   service payments and payments for extended coverage are taxable; 
 49.8   and 
 49.9      (19) payments received for services provided by:  assisted 
 49.10  living programs and congregate housing programs; and 
 49.11     (20) (17) payments received under the federal Employees 
 49.12  Health Benefits Act, United States Code, title 5, section 
 49.13  8909(f), as amended by the Omnibus Reconciliation Act of 1990. 
 49.14     (b) Payments received by wholesale drug distributors for 
 49.15  legend drugs sold directly to veterinarians or veterinary bulk 
 49.16  purchasing organizations are excluded from the gross revenues 
 49.17  subject to the wholesale drug distributor tax under sections 
 49.18  295.50 to 295.59. 
 49.19     [EFFECTIVE DATE.] This section is effective for gross 
 49.20  revenues received after December 31, 2002. 
 49.21     Sec. 3.  [REVISOR'S INSTRUCTION.] 
 49.22     In the next edition of Minnesota Rules, the revisor shall 
 49.23  delete any references to the sections repealed in section 4. 
 49.24     Sec. 4.  [REPEALER.] 
 49.25     Minnesota Statutes 2002, sections 294.01; 294.02; 294.021; 
 49.26  294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; and 
 49.27  294.12, are repealed effective the day following final enactment.
 49.28                             ARTICLE 5
 49.29                           SPECIAL TAXES
 49.30     Section 1.  Minnesota Statutes 2002, section 115B.24, 
 49.31  subdivision 8, is amended to read: 
 49.32     Subd. 8.  [PENALTIES; ENFORCEMENT.] The audit, penalty and 
 49.33  enforcement provisions applicable to corporate franchise taxes 
 49.34  imposed under chapter 290 apply to the taxes imposed under 
 49.35  section 115B.22 and those provisions shall be administered by 
 49.36  the commissioner.  
 50.1      [EFFECTIVE DATE.] This section is effective the day 
 50.2   following final enactment. 
 50.3      Sec. 2.  Minnesota Statutes 2002, section 297F.01, 
 50.4   subdivision 23, is amended to read: 
 50.5      Subd. 23.  [WHOLESALE SALES PRICE.] "Wholesale sales price" 
 50.6   means the established price stated on the price list in effect 
 50.7   at the time of sale for which a manufacturer or person sells a 
 50.8   tobacco product to a distributor, exclusive of any discount, 
 50.9   promotional offer, or other reduction.  For purposes of this 
 50.10  subdivision, "price list" means the manufacturer's price at 
 50.11  which tobacco products are made available for sale to all 
 50.12  distributors on an ongoing basis. 
 50.13     [EFFECTIVE DATE.] This section is effective July 1, 2003. 
 50.14     Sec. 3.  Minnesota Statutes 2002, section 297I.01, 
 50.15  subdivision 9, is amended to read: 
 50.16     Subd. 9.  [GROSS PREMIUMS.] "Gross premiums" means total 
 50.17  premiums paid by policyholders and applicants of policies, 
 50.18  whether received in the form of money or other valuable 
 50.19  consideration, on property, persons, lives, interests and other 
 50.20  risks located, resident, or to be performed in this state, but 
 50.21  excluding consideration and premiums for reinsurance assumed 
 50.22  from other insurance companies.  The term "gross premiums" 
 50.23  includes the total consideration paid to bail bond agents for 
 50.24  bail bonds.  For title insurance companies, "gross premiums" 
 50.25  means the charge for title insurance made by a title insurance 
 50.26  company or its agents according to the company's rate filing 
 50.27  approved by the commissioner of commerce without a deduction for 
 50.28  commissions paid to or retained by the agent.  Gross premiums of 
 50.29  a title insurance company does not include any other charge or 
 50.30  fee for abstracting, searching, or examining the title, or 
 50.31  escrow, closing, or other related services.  The term "gross 
 50.32  premiums" includes any workers' compensation special 
 50.33  compensation fund premium surcharge pursuant to section 176.129. 
 50.34     [EFFECTIVE DATE.] This section is effective the day 
 50.35  following final enactment. 
 50.36     Sec. 4.  Minnesota Statutes 2002, section 297I.20, is 
 51.1   amended to read: 
 51.2      297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSET OFFSETS 
 51.3   AGAINST PREMIUM TAXES.] 
 51.4      Subdivision 1.  [GUARANTY ASSOCIATION ASSESSMENT OFFSETS.] 
 51.5   (a) An insurance company may offset against its premium tax 
 51.6   liability to this state any amount paid for assessments made for 
 51.7   insolvencies which occur after July 31, 1994, under sections 
 51.8   60C.01 to 60C.22; and any amount paid for assessments made after 
 51.9   July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 
 51.10  61B.16, or under sections 61B.18 to 61B.32 as follows: 
 51.11     (1) Each such assessment shall give rise to an amount of 
 51.12  offset equal to 20 percent of the amount of the assessment for 
 51.13  each of the five calendar years following the year in which the 
 51.14  assessment was paid. 
 51.15     (2) The amount of offset initially determined for each 
 51.16  taxable year is the sum of the amounts determined under clause 
 51.17  (1) for that taxable year. 
 51.18     (b)(1) Each year the commissioner shall compare total 
 51.19  guaranty association assessments levied over the preceding five 
 51.20  calendar years to the sum of all premium tax and corporate 
 51.21  franchise tax revenues collected from insurance companies, 
 51.22  without reduction for any guaranty association assessment offset 
 51.23  in the preceding calendar year, referred to in this subdivision 
 51.24  as "preceding year insurance tax revenues." 
 51.25     (2) If total guaranty association assessments levied over 
 51.26  the preceding five years exceed the preceding year insurance tax 
 51.27  revenues, insurance companies must be allowed only a 
 51.28  proportionate part of the premium tax offset calculated under 
 51.29  paragraph (a) for the current calendar year. 
 51.30     (3) The proportionate part of the premium tax offset 
 51.31  allowed in the current calendar year is determined by 
 51.32  multiplying the amount calculated under paragraph (a) by a 
 51.33  fraction.  The numerator of the fraction equals the preceding 
 51.34  year insurance tax revenues, and its denominator equals total 
 51.35  guaranty association assessments levied over the preceding 
 51.36  five-year period. 
 52.1      (4) The proportionate part of the premium tax offset that 
 52.2   is not allowed must be carried forward to subsequent tax years 
 52.3   and added to the amount of premium tax offset calculated under 
 52.4   paragraph (a) prior to application of the limitation imposed by 
 52.5   this paragraph. 
 52.6      (5) Any amount carried forward from prior years must be 
 52.7   allowed before allowance of the offset for the current year 
 52.8   calculated under paragraph (a). 
 52.9      (6) The premium tax offset limitation must be calculated 
 52.10  separately for (i) insurance companies subject to assessment 
 52.11  under sections 60C.01 to 60C.22, and (ii) insurance companies 
 52.12  subject to assessment under Minnesota Statutes 1992, sections 
 52.13  61B.01 to 61B.16, or 61B.18 to 61B.32. 
 52.14     (7) When the premium tax offset is limited by this 
 52.15  provision, the commissioner shall notify affected insurance 
 52.16  companies on a timely basis for purposes of completing premium 
 52.17  and corporate franchise tax returns.  
 52.18     (8) The guaranty associations created under sections 60C.01 
 52.19  to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 
 52.20  and 61B.18 to 61B.32, shall provide the commissioner with the 
 52.21  necessary information on guaranty association assessments. 
 52.22     (c)(1) If the offset determined by the application of 
 52.23  paragraphs (a) and (b) exceeds the insurance company's premium 
 52.24  tax liability under this section prior to allowance of the 
 52.25  credit for premium taxes, then the insurance company may carry 
 52.26  forward the excess, referred to in this subdivision as the 
 52.27  "carryforward credit" to subsequent taxable years. 
 52.28     (2) The carryforward credit is allowed as an offset against 
 52.29  premium tax liability for the first succeeding year to the 
 52.30  extent that the premium tax liability for that year exceeds the 
 52.31  amount of the allowable offset for the year determined under 
 52.32  paragraphs (a) and (b). 
 52.33     (3) The carryforward credit must be reduced, but not below 
 52.34  zero, by the amount of the carryforward credit allowed as an 
 52.35  offset against the premium tax under this paragraph.  The 
 52.36  remainder, if any, of the carryforward credit must be carried 
 53.1   forward to succeeding taxable years until the entire 
 53.2   carryforward credit has been credited against the insurance 
 53.3   company's liability for premium tax under this chapter if 
 53.4   applicable for that taxable year. 
 53.5      (d) When an insurer has offset against taxes its payment of 
 53.6   an assessment of the Minnesota life and health guaranty 
 53.7   association, and the association pays the insurer a refund with 
 53.8   respect to the assessment under Minnesota Statutes 1992, section 
 53.9   61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 
 53.10  reduces the insurer's carryforward credit under paragraph (c).  
 53.11  If the refund exceeds the amount of the carryforward credit, the 
 53.12  excess amount must be repaid to the state by the insurers to the 
 53.13  extent of the offset in the manner the commissioner requires. 
 53.14     Subd. 2.  [JOINT UNDERWRITING ASSOCIATION OFFSET.] An 
 53.15  assessment made pursuant to section 62I.06, subdivision 6, shall 
 53.16  be deductible by the member from past or future premium taxes 
 53.17  due the state. 
 53.18     [EFFECTIVE DATE.] This section is effective the day 
 53.19  following final enactment. 
 53.20     Sec. 5.  [REPEALER.] 
 53.21     Minnesota Rules, parts 8125.1000; 8125.1300, subpart 1; and 
 53.22  8125.1400, are repealed. 
 53.23     [EFFECTIVE DATE.] This section is effective the day 
 53.24  following final enactment. 
 53.25                             ARTICLE 6
 53.26                            COLLECTIONS
 53.27     Section 1.  Minnesota Statutes 2002, section 270.69, is 
 53.28  amended by adding a subdivision to read: 
 53.29     Subd. 16.  [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien 
 53.30  imposed under this section attaches to the proceeds of property 
 53.31  with the same priority that the lien has with respect to the 
 53.32  property itself.  "Proceeds of property" means proceeds from the 
 53.33  sale, lease, license, exchange, or other disposition of the 
 53.34  property, including insurance proceeds arising from the loss or 
 53.35  destruction of the property. 
 53.36     [EFFECTIVE DATE.] This section is effective for all liens, 
 54.1   whether imposed prior to, on, or after the day following final 
 54.2   enactment. 
 54.3      Sec. 2.  Minnesota Statutes 2002, section 289A.31, 
 54.4   subdivision 3, is amended to read: 
 54.5      Subd. 3.  [TRANSFEREES AND FIDUCIARIES.] The amounts of the 
 54.6   following liabilities are, except as otherwise provided in 
 54.7   section 289A.38, subdivision 13, assessed, collected, and paid 
 54.8   in the same manner and subject to the same provisions and 
 54.9   limitations as a deficiency in a tax imposed by chapter 290, 
 54.10  including any provisions of law for the collection of taxes: 
 54.11     (1) the liability, at law or in equity, of a transferee of 
 54.12  property of a taxpayer for tax or overpayment of a refund, 
 54.13  including interest, additional amounts, and additions to the tax 
 54.14  or overpayment provided by law, imposed upon the taxpayer by 
 54.15  chapter 290 or provided for in chapter 290A; and 
 54.16     (2) the liability of a fiduciary under subdivision 4 for 
 54.17  the payment of tax from the estate of the taxpayer.  The 
 54.18  liability may reflect the amount of tax shown on the return or 
 54.19  any deficiency in tax.  
 54.20     [EFFECTIVE DATE.] This section is effective for refunds 
 54.21  paid on or after the day following final enactment. 
 54.22     Sec. 3.  Minnesota Statutes 2002, section 289A.31, 
 54.23  subdivision 4, is amended to read: 
 54.24     Subd. 4.  [TAX AS A PERSONAL DEBT OF A FIDUCIARY.] The A 
 54.25  tax imposed by chapter 290 and an overpayment of a refund 
 54.26  provided for in chapter 290A, and interest and penalties, is a 
 54.27  personal debt of the taxpayer from the time the liability 
 54.28  arises, regardless of when the time for discharging the 
 54.29  liability by payment occurs.  The debt is, in the case of the 
 54.30  personal representative of the estate of a decedent and in the 
 54.31  case of any fiduciary, that of the individual in the 
 54.32  individual's official or fiduciary capacity only, unless the 
 54.33  individual has voluntarily distributed the assets held in that 
 54.34  capacity without reserving sufficient assets to pay the tax, 
 54.35  interest, and penalties, in which event the individual is 
 54.36  personally liable for the deficiency.  
 55.1      [EFFECTIVE DATE.] This section is effective for taxes 
 55.2   imposed and property tax refunds claimed on or after the day 
 55.3   following final enactment. 
 55.4      Sec. 4.  Minnesota Statutes 2002, section 297A.85, is 
 55.5   amended to read: 
 55.6      297A.85 [CANCELLATION OF PERMITS.] 
 55.7      The commissioner may cancel a permit if one of the 
 55.8   following conditions occurs: 
 55.9      (1) the permit holder has not filed a sales or use tax 
 55.10  return for at least one year; 
 55.11     (2) the permit holder has not reported any sales or use tax 
 55.12  liability on the permit holder's returns for at least two years; 
 55.13  or 
 55.14     (3) the permit holder requests cancellation of the permit; 
 55.15  or 
 55.16     (4) the permit is subject to cancellation pursuant to 
 55.17  section 297A.86, subdivision 2, paragraph (a). 
 55.18     [EFFECTIVE DATE.] This section is effective for 
 55.19  cancellations of permits done on or after the day following 
 55.20  final enactment.