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Capital IconMinnesota Legislature

SF 1505

1st Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
  1.1                          A bill for an act 
  1.2             relating to taxation; making changes to income, 
  1.3             estate, franchise, sales and use, property, motor 
  1.4             vehicle sales tax and registration, cigarette and 
  1.5             tobacco, liquor, aggregate and minerals taxes; 
  1.6             creating and modifying certain sales tax exemptions; 
  1.7             extending sunset dates for certain sales and property 
  1.8             tax exemptions; providing for the disposition of local 
  1.9             sales taxes for the cities of Duluth, St. Paul, 
  1.10            Hermantown, Rochester, and Proctor; authorizing local 
  1.11            sales taxes in the cities of Beaver Bay, Bemidji, 
  1.12            Cloquet, Hopkins, Medford, and Park Rapids; 
  1.13            authorizing lodging taxes in the city of Newport and 
  1.14            Itasca county; providing property tax exemptions and 
  1.15            exclusions from property valuations; modifying 
  1.16            truth-in-taxation provisions; providing for the 
  1.17            creation of housing districts; authorizing or 
  1.18            modifying the authority of tax increment financing 
  1.19            districts in Detroit Lakes, Duluth, Monticello, New 
  1.20            Hope, Richfield, Roseville, and St. Michael; 
  1.21            authorizing the creation of and modifying the 
  1.22            authority of local districts and economic development 
  1.23            authorities; granting bonding authority to the state 
  1.24            agricultural society and other political subdivisions; 
  1.25            allowing bonding for computer systems and other 
  1.26            purposes; authorizing cities to establish a program 
  1.27            for issuance of capital improvement bonds; limiting 
  1.28            challenges to tax increment financing actions; 
  1.29            establishing the corporate status of an entity; 
  1.30            updating to federal provisions; modifying payment, 
  1.31            penalty, interest, and enforcement provisions; 
  1.32            distributing payments to counties; allowing counties 
  1.33            to sell tax liens; authorizing billing of counties for 
  1.34            certain medical exams; changing requirements for 
  1.35            purchases of recycled materials; making technical 
  1.36            changes; imposing penalties; amending Minnesota 
  1.37            Statutes 2002, sections 16B.121; 115B.24, subdivision 
  1.38            8; 168.012, subdivision 1; 168A.03; 216B.2424, 
  1.39            subdivision 5; 256.969, by adding a subdivision; 
  1.40            270.06; 270.10, subdivision 1a; 270.60, subdivision 4; 
  1.41            270.69, by adding a subdivision; 270.701, subdivision 
  1.42            2, by adding a subdivision; 270.72, subdivision 2; 
  1.43            270A.03, subdivision 2; 270B.12, by adding a 
  1.44            subdivision; 272.02, subdivisions 26, 31, 47, 53, by 
  1.45            adding subdivisions; 272.12; 273.01; 273.05, 
  1.46            subdivision 1; 273.061, by adding subdivisions; 
  2.1             273.08; 273.11, subdivision 1a, by adding 
  2.2             subdivisions; 273.124, subdivision 1; 273.13, 
  2.3             subdivisions 22, 25; 273.1315; 273.1398, subdivisions 
  2.4             4b, 4d; 273.372; 273.42, subdivision 2; 274.01, 
  2.5             subdivision 1; 274.13, subdivision 1; 275.025, 
  2.6             subdivisions 1, 3, 4; 275.065, subdivisions 1, 1a, 3; 
  2.7             276.04, subdivision 2; 276.10; 276.11, subdivision 1; 
  2.8             277.20, subdivision 2; 278.03, subdivision 1; 278.05, 
  2.9             subdivision 6; 279.01, subdivision 1, by adding a 
  2.10            subdivision; 279.06, subdivision 1; 281.17; 282.01, 
  2.11            subdivisions 1b, 7a; 282.08; 287.12; 287.29, 
  2.12            subdivision 1; 287.31, by adding a subdivision; 
  2.13            289A.02, subdivision 7; 289A.10, subdivision 1; 
  2.14            289A.19, subdivision 4; 289A.31, subdivisions 3, 4, by 
  2.15            adding a subdivision; 289A.36, subdivision 7, by 
  2.16            adding subdivisions; 289A.50, subdivision 2a; 289A.56, 
  2.17            subdivision 3; 289A.60, subdivision 7, by adding a 
  2.18            subdivision; 290.01, subdivisions 19, 19b, 19d, 31; 
  2.19            290.06, subdivision 2c; 290.0671, subdivision 1; 
  2.20            290.0675, subdivisions 2, 3; 290.0679, subdivision 2; 
  2.21            290.0802, subdivision 1; 290A.03, subdivisions 8, 15; 
  2.22            290C.02, subdivisions 3, 7; 290C.03; 290C.07; 290C.09; 
  2.23            290C.10; 290C.11; 291.005, subdivision 1; 291.03, 
  2.24            subdivision 1; 295.50, subdivision 9b; 295.53, 
  2.25            subdivision 1; 297A.61, subdivisions 3, 12, 34, by 
  2.26            adding subdivisions; 297A.62, subdivision 3; 297A.665; 
  2.27            297A.67, subdivisions 2, 18, by adding subdivisions; 
  2.28            297A.68, subdivisions 5, 36, by adding a subdivision; 
  2.29            297A.69, subdivisions 2, 3, 4; 297A.70, subdivisions 
  2.30            8, 16; 297A.71, subdivision 10, by adding 
  2.31            subdivisions; 297A.85; 297B.025, subdivisions 1, 2; 
  2.32            297B.03; 297B.035, subdivision 1, by adding a 
  2.33            subdivision; 297F.01, subdivisions 21a, 23; 297F.06, 
  2.34            subdivision 4; 297F.08, by adding a subdivision; 
  2.35            297F.20, subdivisions 1, 2, 3, 6, 9; 297G.01, by 
  2.36            adding a subdivision; 297G.03, subdivision 1; 297I.01, 
  2.37            subdivision 9; 297I.20; 352.15, subdivision 1; 353.15, 
  2.38            subdivision 1; 354.10, subdivision 1; 354B.30; 
  2.39            354C.165; 373.01, subdivision 3; 373.45, subdivision 
  2.40            1; 373.47, subdivision 1; 376.009; 376.55, subdivision 
  2.41            3, by adding a subdivision; 376.56, subdivision 3; 
  2.42            383B.77, subdivisions 1, 2; 410.32; 412.301; 469.169, 
  2.43            by adding a subdivision; 469.1731, subdivision 3; 
  2.44            469.174, subdivision 10, by adding subdivisions; 
  2.45            469.175, subdivision 3, by adding a subdivision; 
  2.46            469.176, subdivision 7; 469.1761, by adding a 
  2.47            subdivision; 469.1763, subdivision 2; 469.177, 
  2.48            subdivision 1; 469.1792; 473.39, by adding a 
  2.49            subdivision; 473F.07, subdivision 4; 473F.08, by 
  2.50            adding a subdivision; 475.58, subdivision 3b; 
  2.51            477A.011, subdivision 30; 515B.1-116; Laws 1967, 
  2.52            chapter 558, section 1, subdivision 5, as amended; 
  2.53            Laws 1978, chapter 464, section 1; Laws 1980, chapter 
  2.54            511, section 1, subdivision 2, as amended; Laws 1980, 
  2.55            chapter 511, section 2, as amended; Laws 1989, chapter 
  2.56            211, section 8, subdivision 2, as amended; Laws 1989, 
  2.57            chapter 211, section 8, subdivision 4, as amended; 
  2.58            Laws 1993, chapter 375, article 9, section 46, 
  2.59            subdivision 2, as amended; Laws 1996, chapter 471, 
  2.60            article 2, section 29; Laws 1998, chapter 389, article 
  2.61            8, section 43, subdivision 3; Laws 1998, chapter 389, 
  2.62            article 8, section 43, subdivision 4; Laws 1999, 
  2.63            chapter 243, article 4, section 18, subdivision 1; 
  2.64            Laws 1999, chapter 243, article 4, section 18, 
  2.65            subdivision 3; Laws 1999, chapter 243, article 4, 
  2.66            section 18, subdivision 4; Laws 1999, chapter 243, 
  2.67            article 4, section 19, as amended; Laws 2001, First 
  2.68            Special Session chapter 5, article 3, section 61, the 
  2.69            effective date; Laws 2001 First Special Session 
  2.70            chapter 5, article 3, section 63, the effective date; 
  2.71            Laws 2001, First Special Session chapter 5, article 3, 
  3.1             section 96; Laws 2001, First Special Session chapter 
  3.2             5, article 9, section 12, the effective date; Laws 
  3.3             2001, First Special Session chapter 5, article 12, 
  3.4             section 67, the effective date; Laws 2002, chapter 
  3.5             377, article 3, section 15, the effective date; Laws 
  3.6             2002 chapter 377, article 6, section 4, the effective 
  3.7             date; proposing coding for new law in Minnesota 
  3.8             Statutes, chapters 37; 270; 273; 275; 276; 290C; 410; 
  3.9             469; proposing coding for new law as Minnesota 
  3.10            Statutes, chapter 280A; repealing Minnesota Statutes 
  3.11            2002, sections 270.691, subdivision 8; 274.04; 
  3.12            290.0671, subdivision 3; 290.0675, subdivision 5; 
  3.13            294.01; 294.02; 294.021; 294.03; 294.06; 294.07; 
  3.14            294.08; 294.09; 294.10; 294.11; 294.12; 297A.72, 
  3.15            subdivision 1; 297A.97; 477A.065; Laws 1984, chapter 
  3.16            652, section 2; Laws 2002, chapter 377, article 9, 
  3.17            section 12, the effective date; Minnesota Rules, parts 
  3.18            8007.0300, subpart 3; 8009.7100; 8009.7200; 8009.7300; 
  3.19            8009.7400; 8092.1000; 8106.0100, subparts 11, 15, 16; 
  3.20            8106.0200; 8125.1000; 8125.1300, subpart 1; 8125.1400; 
  3.21            8130.0800, subparts 5, 12; 8130.1300; 8130.1600, 
  3.22            subpart 5; 8130.1700, subparts 3, 4; 8130.4800, 
  3.23            subpart 2; 8130.7500, subpart 5; 8130.8000; 8130.8300. 
  3.24  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  3.25                             ARTICLE 1
  3.26                             SALES TAX
  3.27     Section 1.  Minnesota Statutes 2002, section 16B.121, is 
  3.28  amended to read: 
  3.29     16B.121 [PURCHASE OF RECYCLED, REPAIRABLE, AND DURABLE 
  3.30  MATERIALS.] 
  3.31     The commissioner shall take the recycled content and 
  3.32  recyclability of commodities to be purchased into consideration 
  3.33  in bid specifications.  When feasible and when the price of 
  3.34  recycled materials does not exceed the price of nonrecycled 
  3.35  materials by more than ten percent, The commissioner, and state 
  3.36  agencies when purchasing under delegated authority, shall 
  3.37  purchase recycled materials, unless the commissioner determines 
  3.38  that the price of the recycled materials exceeds the price of 
  3.39  nonrecycled materials by more than ten percent or that use of 
  3.40  the recycled materials would be impracticable.  In order to 
  3.41  maximize the quantity and quality of recycled materials 
  3.42  purchased, the commissioner, and state agencies when purchasing 
  3.43  under delegated authority, may also use other appropriate 
  3.44  procedures to acquire recycled materials at the most economical 
  3.45  cost to the state. 
  3.46     When purchasing commodities and services, the commissioner, 
  3.47  and state agencies when purchasing under delegated authority, 
  4.1   shall apply and promote the preferred waste management practices 
  4.2   listed in section 115A.02, with special emphasis on reduction of 
  4.3   the quantity and toxicity of materials in waste.  The 
  4.4   commissioner, and state agencies when purchasing under delegated 
  4.5   authority, in developing bid specifications, shall consider the 
  4.6   extent to which a commodity or product is durable, reusable, or 
  4.7   recyclable and marketable through the state resource recovery 
  4.8   program and the extent to which the commodity or product 
  4.9   contains postconsumer material. 
  4.10     Sec. 2.  Minnesota Statutes 2002, section 168.012, 
  4.11  subdivision 1, is amended to read: 
  4.12     Subdivision 1.  [VEHICLES EXEMPT FROM TAX, FEES, OR PLATE 
  4.13  DISPLAY.] (a) The following vehicles are exempt from the 
  4.14  provisions of this chapter requiring payment of tax and 
  4.15  registration fees, except as provided in subdivision 1c:  
  4.16     (1) vehicles owned and used solely in the transaction of 
  4.17  official business by the federal government, the state, or any 
  4.18  political subdivision; 
  4.19     (2) vehicles owned and used exclusively by educational 
  4.20  institutions and used solely in the transportation of pupils to 
  4.21  and from those institutions; 
  4.22     (3) vehicles used solely in driver education programs at 
  4.23  nonpublic high schools; 
  4.24     (4) vehicles owned by nonprofit charities and used 
  4.25  exclusively to transport disabled persons for educational 
  4.26  purposes; 
  4.27     (5) ambulances owned by ambulance services licensed under 
  4.28  section 144E.10, the general appearance of which is 
  4.29  unmistakable; and 
  4.30     (6) vehicles used to provide emergency medical services, 
  4.31  except as provided in paragraph (b), and owned by the state, a 
  4.32  political subdivision, or an ambulance service licensed under 
  4.33  section 144E.10; and 
  4.34     (7) vehicles owned by a commercial driving school licensed 
  4.35  under section 171.34, or an employee of a commercial driving 
  4.36  school licensed under section 171.34, and the vehicle is used 
  5.1   exclusively for driver education and training. 
  5.2      (b) Vehicles owned by the federal government, municipal 
  5.3   fire apparatuses including fire-suppression support vehicles, 
  5.4   police patrols, and ambulances, the general appearance of which 
  5.5   is unmistakable, are not required to register or display number 
  5.6   plates.  
  5.7      (c) Unmarked vehicles used in general police work, liquor 
  5.8   investigations, or arson investigations, and passenger 
  5.9   automobiles, pickup trucks, and buses owned or operated by the 
  5.10  department of corrections, must be registered and must display 
  5.11  appropriate license number plates, furnished by the registrar at 
  5.12  cost.  Original and renewal applications for these license 
  5.13  plates authorized for use in general police work and for use by 
  5.14  the department of corrections must be accompanied by a 
  5.15  certification signed by the appropriate chief of police if 
  5.16  issued to a police vehicle, the appropriate sheriff if issued to 
  5.17  a sheriff's vehicle, the commissioner of corrections if issued 
  5.18  to a department of corrections vehicle, or the appropriate 
  5.19  officer in charge if issued to a vehicle of any other law 
  5.20  enforcement agency.  The certification must be on a form 
  5.21  prescribed by the commissioner and state that the vehicle will 
  5.22  be used exclusively for a purpose authorized by this section.  
  5.23     (d) Unmarked vehicles used by the departments of revenue 
  5.24  and labor and industry, fraud unit, in conducting seizures or 
  5.25  criminal investigations must be registered and must display 
  5.26  passenger vehicle classification license number plates, 
  5.27  furnished at cost by the registrar.  Original and renewal 
  5.28  applications for these passenger vehicle license plates must be 
  5.29  accompanied by a certification signed by the commissioner of 
  5.30  revenue or the commissioner of labor and industry.  The 
  5.31  certification must be on a form prescribed by the commissioner 
  5.32  and state that the vehicles will be used exclusively for the 
  5.33  purposes authorized by this section. 
  5.34     (e) Unmarked vehicles used by the division of disease 
  5.35  prevention and control of the department of health must be 
  5.36  registered and must display passenger vehicle classification 
  6.1   license number plates.  These plates must be furnished at cost 
  6.2   by the registrar.  Original and renewal applications for these 
  6.3   passenger vehicle license plates must be accompanied by a 
  6.4   certification signed by the commissioner of health.  The 
  6.5   certification must be on a form prescribed by the commissioner 
  6.6   and state that the vehicles will be used exclusively for the 
  6.7   official duties of the division of disease prevention and 
  6.8   control.  
  6.9      (f) Unmarked vehicles used by staff of the gambling control 
  6.10  board in gambling investigations and reviews must be registered 
  6.11  and must display passenger vehicle classification license number 
  6.12  plates.  These plates must be furnished at cost by the 
  6.13  registrar.  Original and renewal applications for these 
  6.14  passenger vehicle license plates must be accompanied by a 
  6.15  certification signed by the board chair.  The certification must 
  6.16  be on a form prescribed by the commissioner and state that the 
  6.17  vehicles will be used exclusively for the official duties of the 
  6.18  gambling control board.  
  6.19     (g) All other motor vehicles must be registered and display 
  6.20  tax-exempt number plates, furnished by the registrar at cost, 
  6.21  except as provided in subdivision 1c.  All vehicles required to 
  6.22  display tax-exempt number plates must have the name of the state 
  6.23  department or political subdivision, nonpublic high school 
  6.24  operating a driver education program, or licensed commercial 
  6.25  driving school, plainly displayed on both sides of the vehicle; 
  6.26  except that each state hospital and institution for the mentally 
  6.27  ill and mentally retarded may have one vehicle without the 
  6.28  required identification on the sides of the vehicle, and county 
  6.29  social service agencies may have vehicles used for child and 
  6.30  vulnerable adult protective services without the required 
  6.31  identification on the sides of the vehicle.  This identification 
  6.32  must be in a color giving contrast with that of the part of the 
  6.33  vehicle on which it is placed and must endure throughout the 
  6.34  term of the registration.  The identification must not be on a 
  6.35  removable plate or placard and must be kept clean and visible at 
  6.36  all times; except that a removable plate or placard may be 
  7.1   utilized on vehicles leased or loaned to a political subdivision 
  7.2   or to a nonpublic high school driver education program. 
  7.3      [EFFECTIVE DATE.] This section is effective July 1, 2003. 
  7.4      Sec. 3.  Minnesota Statutes 2002, section 168A.03, is 
  7.5   amended to read: 
  7.6      168A.03 [EXEMPT VEHICLES.] 
  7.7      Subdivision 1.  The registrar shall not issue a certificate 
  7.8   of title for: 
  7.9      (1) a vehicle owned by the United States; 
  7.10     (2) a vehicle owned by a manufacturer or dealer and held 
  7.11  for sale, even though incidentally moved on the highway or used 
  7.12  pursuant to section 168.27 or 168.28, or a vehicle used by a 
  7.13  manufacturer solely for testing; 
  7.14     (3) a vehicle owned by a nonresident and not required by 
  7.15  law to be registered in this state; 
  7.16     (4) (3) a vehicle owned by a nonresident and regularly 
  7.17  engaged in the interstate transportation of persons or property 
  7.18  for which a currently effective certificate of title has been 
  7.19  issued in another state; 
  7.20     (5) (4) a vehicle moved solely by animal power; 
  7.21     (6) (5) an implement of husbandry; 
  7.22     (7) (6) special mobile equipment; 
  7.23     (8) (7) a self-propelled wheelchair or invalid tricycle; 
  7.24     (9) (8) a trailer (i) having a gross weight of 4,000 pounds 
  7.25  or less unless a secured party holds an interest in the trailer 
  7.26  or a certificate of title was previously issued by this state or 
  7.27  any other state or (ii) designed primarily for agricultural 
  7.28  purposes except recreational equipment or a manufactured home, 
  7.29  both as defined in section 168.011, subdivisions 8 and 25; 
  7.30     (10) (9) a snowmobile.  
  7.31     Subd. 2.  [DEALERS.] No certificate of title need be 
  7.32  obtained for a vehicle owned by a manufacturer or dealer and 
  7.33  held for sale, even though incidentally moved on the highway or 
  7.34  used pursuant to section 168.27 or 168.28, or a vehicle used by 
  7.35  a manufacturer solely for testing. 
  7.36     [EFFECTIVE DATE.] This section is effective July 1, 2003. 
  8.1      Sec. 4.  Minnesota Statutes 2002, section 297A.61, 
  8.2   subdivision 3, is amended to read: 
  8.3      Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
  8.4   include, but are not limited to, each of the transactions listed 
  8.5   in this subdivision. 
  8.6      (b) Sale and purchase include: 
  8.7      (1) any transfer of title or possession, or both, of 
  8.8   tangible personal property, whether absolutely or conditionally, 
  8.9   for a consideration in money or by exchange or barter; and 
  8.10     (2) the leasing of or the granting of a license to use or 
  8.11  consume, for a consideration in money or by exchange or barter, 
  8.12  tangible personal property, other than a manufactured home used 
  8.13  for residential purposes for a continuous period of 30 days or 
  8.14  more. 
  8.15     (c) Sale and purchase include the production, fabrication, 
  8.16  printing, or processing of tangible personal property for a 
  8.17  consideration for consumers who furnish either directly or 
  8.18  indirectly the materials used in the production, fabrication, 
  8.19  printing, or processing. 
  8.20     (d) Sale and purchase include the preparing for a 
  8.21  consideration of food.  Notwithstanding section 297A.67, 
  8.22  subdivision 2, taxable food includes, but is not limited to, the 
  8.23  following: 
  8.24     (1) prepared food sold by the retailer; 
  8.25     (2) soft drinks; 
  8.26     (3) candy; and 
  8.27     (4) all food sold through vending machines. 
  8.28     (e) A sale and a purchase includes the furnishing for a 
  8.29  consideration of electricity, gas, water, or steam for use or 
  8.30  consumption within this state. 
  8.31     (f) A sale and a purchase includes the transfer for a 
  8.32  consideration of computer software.  
  8.33     (g) A sale and a purchase includes the furnishing for a 
  8.34  consideration of the following services: 
  8.35     (1) the privilege of admission to places of amusement, 
  8.36  recreational areas, or athletic events, and the making available 
  9.1   of amusement devices, tanning facilities, reducing salons, steam 
  9.2   baths, turkish baths, health clubs, and spas or athletic 
  9.3   facilities; 
  9.4      (2) lodging and related services by a hotel, rooming house, 
  9.5   resort, campground, motel, or trailer camp and the granting of 
  9.6   any similar license to use real property other than the renting 
  9.7   or leasing of it for a continuous period of 30 days or more; 
  9.8      (3) parking services, whether on a contractual, hourly, or 
  9.9   other periodic basis, except for parking at a meter; 
  9.10     (4) the granting of membership in a club, association, or 
  9.11  other organization if: 
  9.12     (i) the club, association, or other organization makes 
  9.13  available for the use of its members sports and athletic 
  9.14  facilities, without regard to whether a separate charge is 
  9.15  assessed for use of the facilities; and 
  9.16     (ii) use of the sports and athletic facility is not made 
  9.17  available to the general public on the same basis as it is made 
  9.18  available to members.  
  9.19  Granting of membership means both onetime initiation fees and 
  9.20  periodic membership dues.  Sports and athletic facilities 
  9.21  include golf courses; tennis, racquetball, handball, and squash 
  9.22  courts; basketball and volleyball facilities; running tracks; 
  9.23  exercise equipment; swimming pools; and other similar athletic 
  9.24  or sports facilities; 
  9.25     (5) delivery of aggregate materials and concrete block by a 
  9.26  third party if the delivery would be subject to the sales tax if 
  9.27  provided by the seller of the aggregate material or concrete 
  9.28  block; and 
  9.29     (6) services as provided in this clause: 
  9.30     (i) laundry and dry cleaning services including cleaning, 
  9.31  pressing, repairing, altering, and storing clothes, linen 
  9.32  services and supply, cleaning and blocking hats, and carpet, 
  9.33  drapery, upholstery, and industrial cleaning.  Laundry and dry 
  9.34  cleaning services do not include services provided by coin 
  9.35  operated facilities operated by the customer; 
  9.36     (ii) motor vehicle washing, waxing, and cleaning services, 
 10.1   including services provided by coin operated facilities operated 
 10.2   by the customer, and rustproofing, undercoating, and towing of 
 10.3   motor vehicles; 
 10.4      (iii) building and residential cleaning, maintenance, and 
 10.5   disinfecting and exterminating services; 
 10.6      (iv) detective, security, burglar, fire alarm, and armored 
 10.7   car services; but not including services performed within the 
 10.8   jurisdiction they serve by off-duty licensed peace officers as 
 10.9   defined in section 626.84, subdivision 1, or services provided 
 10.10  by a nonprofit organization for monitoring and electronic 
 10.11  surveillance of persons placed on in-home detention pursuant to 
 10.12  court order or under the direction of the Minnesota department 
 10.13  of corrections; 
 10.14     (v) pet grooming services; 
 10.15     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
 10.16  services; garden planting and maintenance; tree, bush, and shrub 
 10.17  pruning, bracing, spraying, and surgery; indoor plant care; 
 10.18  tree, bush, shrub, and stump removal; and tree trimming for 
 10.19  public utility lines.  Services performed under a construction 
 10.20  contract for the installation of shrubbery, plants, sod, trees, 
 10.21  bushes, and similar items are not taxable; 
 10.22     (vii) massages, except when provided by a licensed health 
 10.23  care facility or professional or upon written referral from a 
 10.24  licensed health care facility or professional for treatment of 
 10.25  illness, injury, or disease; and 
 10.26     (viii) the furnishing of lodging, board, and care services 
 10.27  for animals in kennels and other similar arrangements, but 
 10.28  excluding veterinary and horse boarding services. 
 10.29     In applying the provisions of this chapter, the terms 
 10.30  "tangible personal property" and "sales at retail" include 
 10.31  taxable services and the provision of taxable services, unless 
 10.32  specifically provided otherwise.  Services performed by an 
 10.33  employee for an employer are not taxable.  Services performed by 
 10.34  a partnership or association for another partnership or 
 10.35  association are not taxable if one of the entities owns or 
 10.36  controls more than 80 percent of the voting power of the equity 
 11.1   interest in the other entity.  Services performed between 
 11.2   members of an affiliated group of corporations are not taxable.  
 11.3   For purposes of this section, "affiliated group of corporations" 
 11.4   includes those entities that would be classified as members of 
 11.5   an affiliated group under United States Code, title 26, section 
 11.6   1504, and that are eligible to file a consolidated tax return 
 11.7   for federal income tax purposes. 
 11.8      (h) A sale and a purchase includes the furnishing for a 
 11.9   consideration of tangible personal property or taxable services 
 11.10  by the United States or any of its agencies or 
 11.11  instrumentalities, or the state of Minnesota, its agencies, 
 11.12  instrumentalities, or political subdivisions. 
 11.13     (i) A sale and a purchase includes the furnishing for a 
 11.14  consideration of telecommunications services, including cable 
 11.15  television services and direct satellite services.  
 11.16  Telecommunications services are taxed to the extent allowed 
 11.17  under federal law if those services: 
 11.18     (1) either (i) originate and terminate in this state; or 
 11.19  (ii) originate in this state and terminate outside the state and 
 11.20  the service is charged to a telephone number customer located in 
 11.21  this state or to the account of any transmission instrument in 
 11.22  this state; or (iii) originate outside this state and terminate 
 11.23  in this state and the service is charged to a telephone number 
 11.24  customer located in this state or to the account of any 
 11.25  transmission instrument in this state; or 
 11.26     (2) are rendered by providing a private communications 
 11.27  service for which the customer has one or more locations within 
 11.28  Minnesota connected to the service and the service is charged to 
 11.29  a telephone number customer located in this state or to the 
 11.30  account of any transmission instrument in this state. 
 11.31     All charges for mobile telecommunications services, as 
 11.32  defined in United States Code, title 4, section 124, are deemed 
 11.33  to be provided by the customer's home service provider and 
 11.34  sourced to the customer's place of primary use and are subject 
 11.35  to tax based upon the customer's place of primary use in 
 11.36  accordance with the Mobile Telecommunications Sourcing Act, 
 12.1   United States Code, title 4, sections 116 to 126.  All other 
 12.2   definitions and provisions of the Mobile Telecommunications 
 12.3   Sourcing Act as provided in United States Code, title 4, are 
 12.4   hereby adopted. 
 12.5      (j) A sale and a purchase includes the furnishing for a 
 12.6   consideration of installation if the installation charges would 
 12.7   be subject to the sales tax if the installation were provided by 
 12.8   the seller of the item being installed. 
 12.9      (k) A sale and a purchase includes the rental of a vehicle 
 12.10  by a motor vehicle dealer to a customer when (1) the vehicle is 
 12.11  rented by the customer for a consideration, or (2) the motor 
 12.12  vehicle dealer is reimbursed pursuant to a service contract as 
 12.13  defined in section 65B.29, subdivision 1, clause (1). 
 12.14     [EFFECTIVE DATE.] This section is effective for sales and 
 12.15  purchases made on or after July 1, 2003. 
 12.16     Sec. 5.  Minnesota Statutes 2002, section 297A.61, is 
 12.17  amended by adding a subdivision to read: 
 12.18     Subd. 35.  [DIRECT MAIL.] "Direct mail" means printed 
 12.19  material delivered or distributed by United States Mail or other 
 12.20  delivery service to a mass audience or to addressees on a 
 12.21  mailing list provided by the purchaser or at the direction of 
 12.22  the purchaser when the cost of the items is not billed directly 
 12.23  to the recipients.  "Direct mail" includes tangible personal 
 12.24  property supplied directly or indirectly by the purchaser to the 
 12.25  direct mail seller for inclusion in the package containing the 
 12.26  printed material.  "Direct mail" does not include multiple 
 12.27  identical items of printed material delivered to a single 
 12.28  address. 
 12.29     [EFFECTIVE DATE.] This section is effective retroactively 
 12.30  for delivery or distribution charges on sales and purchases made 
 12.31  after December 31, 2001. 
 12.32     Sec. 6.  Minnesota Statutes 2002, section 297A.62, 
 12.33  subdivision 3, is amended to read: 
 12.34     Subd. 3.  [MANUFACTURED HOUSING AND PARK TRAILERS.] For 
 12.35  retail sales of manufactured homes as defined in section 327.31, 
 12.36  subdivision 6, for residential uses, the sales tax under 
 13.1   subdivision 1 is imposed on 65 percent of the dealer's cost of 
 13.2   the manufactured home.  For retail sales of new or used park 
 13.3   trailers, as defined in section 168.011, subdivision 8, 
 13.4   paragraph (b), the sales tax under subdivision 1 is imposed on 
 13.5   65 percent of the sales price of the park trailer.  For retail 
 13.6   sales of prefabricated homes subject to regulation under 
 13.7   Minnesota Rules, chapter 1360 or 1361, for residential use, the 
 13.8   sales tax under subdivision 1 is imposed on 65 percent of the 
 13.9   manufacturer's wholesale list price of the prefabricated home. 
 13.10     [EFFECTIVE DATE.] This section is effective for sales and 
 13.11  purchases occurring on or after July 1, 2003. 
 13.12     Sec. 7.  Minnesota Statutes 2002, section 297A.67, 
 13.13  subdivision 18, is amended to read: 
 13.14     Subd. 18.  [USED AND REREFINED MOTOR OILS.] Used motor oils 
 13.15  are exempt.  Rerefined motor oils that meet American Petroleum 
 13.16  Institute specifications for gasoline or diesel engines are 
 13.17  exempt.  The exemption for rerefined motor oils expires July 1, 
 13.18  2007.  
 13.19     [EFFECTIVE DATE.] This section is effective for sales and 
 13.20  purchases made after June 30, 2003, and before July 1, 2007. 
 13.21     Sec. 8.  Minnesota Statutes 2002, section 297A.67, is 
 13.22  amended by adding a subdivision to read: 
 13.23     Subd. 31.  [RECYCLED COPIER AND PRINTING PAPER.] Copier 
 13.24  paper with a minimum postconsumer recycled content of 30 percent 
 13.25  by weight is exempt.  Uncoated printing paper with a minimum of 
 13.26  30 percent postconsumer recycled content by weight is exempt.  
 13.27  Coated printing paper with a minimum of ten percent postconsumer 
 13.28  recycled content by weight is exempt.  These exemptions expire 
 13.29  July 1, 2007. 
 13.30     [EFFECTIVE DATE.] This section is effective for sales and 
 13.31  purchases made after June 30, 2003, and before July 1, 2007. 
 13.32     Sec. 9.  Minnesota Statutes 2002, section 297A.67, is 
 13.33  amended by adding a subdivision to read: 
 13.34     Subd. 32.  [SERVICE LOANER VEHICLE COVERED BY 
 13.35  WARRANTY.] The loan of a vehicle by a motor vehicle dealer to a 
 13.36  customer as a replacement for a vehicle being serviced or 
 14.1   repaired is exempt if the vehicle is loaned pursuant to a 
 14.2   warranty included in the original purchase price of the vehicle 
 14.3   being serviced or repaired. 
 14.4      [EFFECTIVE DATE.] This section is effective the day 
 14.5   following final enactment. 
 14.6      Sec. 10.  Minnesota Statutes 2002, section 297A.68, 
 14.7   subdivision 36, is amended to read: 
 14.8      Subd. 36.  [DELIVERY OR DISTRIBUTION CHARGES; PRINTED 
 14.9   MATERIALS DIRECT MAIL.] Charges for the delivery or distribution 
 14.10  of printed materials, including individual account 
 14.11  information, direct mail are exempt if (1) the charges are 
 14.12  separately stated, (2) the delivery or distribution is to a mass 
 14.13  audience or to a mailing list provided at the direction of the 
 14.14  customer, and (3) the cost of the materials is not billed 
 14.15  directly to the recipients on an invoice or similar billing 
 14.16  document given to the purchaser. 
 14.17     [EFFECTIVE DATE.] This section is effective retroactively 
 14.18  for delivery or distribution charges on sales and purchases made 
 14.19  after December 31, 2001. 
 14.20     Sec. 11.  Minnesota Statutes 2002, section 297A.70, 
 14.21  subdivision 8, is amended to read: 
 14.22     Subd. 8.  [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 
 14.23  SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 
 14.24  but not limited to, end user equipment used for construction, 
 14.25  ownership, operation, maintenance, and enhancement of the 
 14.26  backbone system of the regionwide public safety radio 
 14.27  communication system established under sections 473.891 to 
 14.28  473.905, are exempt.  For purposes of this subdivision, backbone 
 14.29  system is defined in section 473.891, subdivision 9.  This 
 14.30  subdivision is effective for purchases, sales, storage, use, or 
 14.31  consumption occurring before August 1, 2003 2005, in the 
 14.32  counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
 14.33  Washington. 
 14.34     [EFFECTIVE DATE.] This section is effective the day 
 14.35  following final enactment. 
 14.36     Sec. 12.  Minnesota Statutes 2002, section 297A.70, 
 15.1   subdivision 16, is amended to read: 
 15.2      Subd. 16.  [CAMP FEES.] Camp fees to camps or other 
 15.3   recreation facilities owned and operated by an exempt 
 15.4   organization under section 501(c)(3) of the Internal Revenue 
 15.5   Code are exempt if the camps or facilities provide educational 
 15.6   and social activities for young people primarily age 18 and 
 15.7   under and at least 15 percent of the costs of operating and 
 15.8   maintaining the camp are underwritten by charitable 
 15.9   contributions. 
 15.10     [EFFECTIVE DATE.] This section is effective for sales and 
 15.11  purchases made on or after June 30, 2003. 
 15.12     Sec. 13.  Minnesota Statutes 2002, section 297A.71, 
 15.13  subdivision 10, is amended to read: 
 15.14     Subd. 10.  [AIRCRAFT HEAVY MAINTENANCE FACILITY.] 
 15.15  Materials, equipment, and supplies used or consumed in 
 15.16  constructing a heavy maintenance facility for aircraft that is 
 15.17  to be owned by the state of Minnesota or one of its political 
 15.18  subdivisions and leased by an airline company, an aircraft 
 15.19  repair company, or an aircraft engine repair facility described 
 15.20  in section 116R.02, subdivision 6, are exempt.  Except for 
 15.21  equipment owned or leased by a contractor, all machinery, 
 15.22  equipment, and tools necessary to the construction and equipping 
 15.23  of that facility in order to provide those services are also 
 15.24  exempt. 
 15.25     [EFFECTIVE DATE.] This section is effective for sales and 
 15.26  purchases made on or after July 1, 2003. 
 15.27     Sec. 14.  Minnesota Statutes 2002, section 297A.71, is 
 15.28  amended by adding a subdivision to read: 
 15.29     Subd. 32.  [CONSTRUCTION MATERIALS; MINNEAPOLIS 
 15.30  PLANETARIUM.] Materials and supplies used or consumed in the 
 15.31  construction of a Minneapolis planetarium are exempt. 
 15.32     [EFFECTIVE DATE.] This section is effective for purchases 
 15.33  made on or after January 1, 2002, and before July 1, 2006. 
 15.34     Sec. 15.  Minnesota Statutes 2002, section 297A.71, is 
 15.35  amended by adding a subdivision to read: 
 15.36     Subd. 33.  [GUTHRIE THEATER.] Materials, equipment, and 
 16.1   supplies used or consumed in construction of the Guthrie Theater 
 16.2   and the related parking garage are exempt. 
 16.3      [EFFECTIVE DATE.] This section is effective the day 
 16.4   following final enactment. 
 16.5      Sec. 16.  Minnesota Statutes 2002, section 297A.71, is 
 16.6   amended by adding a subdivision to read: 
 16.7      Subd. 34.  [CHILDREN'S THEATRE.] Materials, equipment, and 
 16.8   supplies used or consumed in construction of the Children's 
 16.9   Theatre in the city of Minneapolis are exempt. 
 16.10     [EFFECTIVE DATE.] This section is effective for sales and 
 16.11  purchases made on or after July 1, 2003. 
 16.12     Sec. 17.  Minnesota Statutes 2002, section 297A.71, is 
 16.13  amended by adding a subdivision to read: 
 16.14     Subd. 35.  [WALKER ART CENTER.] Materials, equipment, and 
 16.15  supplies used or consumed in construction of the Walker Art 
 16.16  Center are exempt if more than $70,000,000 is raised from 
 16.17  private sources to pay for a portion of the costs of the project.
 16.18     [EFFECTIVE DATE.] This section is effective for purchases 
 16.19  made on or after June 1, 2003. 
 16.20     Sec. 18.  Minnesota Statutes 2002, section 297B.03, is 
 16.21  amended to read: 
 16.22     297B.03 [EXEMPTIONS.] 
 16.23     There is specifically exempted from the provisions of this 
 16.24  chapter and from computation of the amount of tax imposed by it 
 16.25  the following:  
 16.26     (1) purchase or use, including use under a lease purchase 
 16.27  agreement or installment sales contract made pursuant to section 
 16.28  465.71, of any motor vehicle by the United States and its 
 16.29  agencies and instrumentalities and by any person described in 
 16.30  and subject to the conditions provided in section 297A.67, 
 16.31  subdivision 11; 
 16.32     (2) purchase or use of any motor vehicle by any person who 
 16.33  was a resident of another state or country at the time of the 
 16.34  purchase and who subsequently becomes a resident of Minnesota, 
 16.35  provided the purchase occurred more than 60 days prior to the 
 16.36  date such person began residing in the state of Minnesota and 
 17.1   the motor vehicle was registered in the person's name in the 
 17.2   other state or country; 
 17.3      (3) purchase or use of any motor vehicle by any person 
 17.4   making a valid election to be taxed under the provisions of 
 17.5   section 297A.90; 
 17.6      (4) purchase or use of any motor vehicle previously 
 17.7   registered in the state of Minnesota when such transfer 
 17.8   constitutes a transfer within the meaning of section 118, 331, 
 17.9   332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 
 17.10  1563(a) of the Internal Revenue Code of 1986, as amended through 
 17.11  December 31, 1999; 
 17.12     (5) purchase or use of any vehicle owned by a resident of 
 17.13  another state and leased to a Minnesota based private or for 
 17.14  hire carrier for regular use in the transportation of persons or 
 17.15  property in interstate commerce provided the vehicle is titled 
 17.16  in the state of the owner or secured party, and that state does 
 17.17  not impose a sales tax or sales tax on motor vehicles used in 
 17.18  interstate commerce; 
 17.19     (6) purchase or use of a motor vehicle by a private 
 17.20  nonprofit or public educational institution for use as an 
 17.21  instructional aid in automotive training programs operated by 
 17.22  the institution.  "Automotive training programs" includes motor 
 17.23  vehicle body and mechanical repair courses but does not include 
 17.24  driver education programs; 
 17.25     (7) purchase of a motor vehicle for use as an ambulance or 
 17.26  to provide emergency medical services by an ambulance service 
 17.27  licensed under section 144E.10; 
 17.28     (8) purchase of a motor vehicle by or for a public library, 
 17.29  as defined in section 134.001, subdivision 2, as a bookmobile or 
 17.30  library delivery vehicle; 
 17.31     (9) purchase of a ready-mixed concrete truck; 
 17.32     (10) purchase or use of a motor vehicle by a town for use 
 17.33  exclusively for road maintenance, including snowplows and dump 
 17.34  trucks, but not including automobiles, vans, or pickup trucks; 
 17.35     (11) purchase or use of a motor vehicle by a corporation, 
 17.36  society, association, foundation, or institution organized and 
 18.1   operated exclusively for charitable, religious, or educational 
 18.2   purposes, except a public school, university, or library, but 
 18.3   only if the vehicle is: 
 18.4      (i) a truck, as defined in section 168.011, a bus, as 
 18.5   defined in section 168.011, or a passenger automobile, as 
 18.6   defined in section 168.011, if the automobile is designed and 
 18.7   used for carrying more than nine persons including the driver; 
 18.8   and 
 18.9      (ii) intended to be used primarily to transport tangible 
 18.10  personal property or individuals, other than employees, to whom 
 18.11  the organization provides service in performing its charitable, 
 18.12  religious, or educational purpose; 
 18.13     (12) purchase of a motor vehicle for use by a transit 
 18.14  provider exclusively to provide transit service is exempt if the 
 18.15  transit provider is either (i) receiving financial assistance or 
 18.16  reimbursement under section 174.24 or 473.384, or (ii) operating 
 18.17  under section 174.29, 473.388, or 473.405. 
 18.18     [EFFECTIVE DATE.] This section is effective for sales and 
 18.19  purchases made on or after July 1, 2003. 
 18.20     Sec. 19.  Minnesota Statutes 2002, section 297B.035, is 
 18.21  amended by adding a subdivision to read: 
 18.22     Subd. 5.  [USE BY DEALER.] If a motor vehicle dealer uses a 
 18.23  vehicle, purchased for resale in the ordinary course of 
 18.24  business, other than for demonstration purposes, the dealer may 
 18.25  elect to pay the motor vehicle sales tax under this chapter or 
 18.26  the use tax under chapter 297A based on the reasonable rental 
 18.27  value of the vehicle.  If the motor vehicle dealer fails to 
 18.28  report the use tax under chapter 297A, it is presumed that the 
 18.29  dealer elected to pay the motor vehicle sales tax under this 
 18.30  chapter. 
 18.31     [EFFECTIVE DATE.] This section is effective for purchases 
 18.32  made on or after July 1, 2003. 
 18.33     Sec. 20.  Laws 1999, chapter 243, article 4, section 19, as 
 18.34  amended by Laws 2001, First Special Session chapter 5, article 
 18.35  12, section 88, is amended to read: 
 18.36     Sec. 19.  [EFFECTIVE DATES.] 
 19.1      Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 
 19.2   purchases made after June 30, 1999.  
 19.3      Section 3 is effective for amended returns and refund 
 19.4   claims filed on or after July 1, 1999. 
 19.5      Section 4 is effective the day following final enactment 
 19.6   and applies retroactively to all open tax years and to 
 19.7   assessments and appeals under Minnesota Statutes, sections 
 19.8   289A.38 and 289A.65, for which the time limits have not expired 
 19.9   on the date of final enactment of this act.  The provisions of 
 19.10  Minnesota Statutes, section 289A.50, apply to refunds claimed 
 19.11  under section 4.  Refunds claimed under section 4 must be filed 
 19.12  by the later of December 31, 1999, or the time limit under 
 19.13  Minnesota Statutes, section 289A.40, subdivision 1. 
 19.14     Section 6 is effective retroactively for sales and 
 19.15  purchases made after June 30, 1998. 
 19.16     Section 8 is effective for purchases and sales made after 
 19.17  the date of final enactment.  
 19.18     Section 10 is effective for purchases made after the date 
 19.19  of final enactment and before July 1, 2003 2005. 
 19.20     Section 12 is effective the day after final enactment.  
 19.21  Section 12, paragraphs (a) to (c), apply to all local sales 
 19.22  taxes enacted after July 1, 1999.  Section 12, paragraph (d), 
 19.23  applies to all local sales taxes in effect at the time of, or 
 19.24  imposed after the day of, the enactment of this section. 
 19.25     Section 13 is effective the day following final enactment. 
 19.26     [EFFECTIVE DATE.] This section is effective the day 
 19.27  following final enactment. 
 19.28     Sec. 21.  Laws 2001, First Special Session chapter 5, 
 19.29  article 12, section 67, the effective date, is amended to read: 
 19.30     [EFFECTIVE DATE.] This section is effective for purchases 
 19.31  and sales made after June 30, 2001, and before January 1, 2003 
 19.32  July 1, 2005. 
 19.33     [EFFECTIVE DATE.] This section is effective the day 
 19.34  following final enactment. 
 19.35     Sec. 22.  [STATE CONVENTION CENTER.] 
 19.36     (a) Building materials, supplies, or equipment used or 
 20.1   consumed in constructing or equipping improvements to a state 
 20.2   convention center located in a city outside the metropolitan 
 20.3   area as defined in Minnesota Statutes, section 473.121, 
 20.4   subdivision 2, and governed by an 11-person board of which four 
 20.5   are appointed by the governor are exempt if the improvements are 
 20.6   financed in whole or in part by nonstate resources including, 
 20.7   but not limited to, revenue or general obligations issued by the 
 20.8   state convention center board of the city in which the center is 
 20.9   located.  This exemption applies regardless of whether the items 
 20.10  are purchased by the owner or by a contractor, subcontractor, or 
 20.11  builder. 
 20.12     (b) This section is intended to clarify the original intent 
 20.13  of Minnesota Statutes, section 297A.71, subdivision 2. 
 20.14     [EFFECTIVE DATE.] This section is effective the day 
 20.15  following final enactment and applies retroactively to sales and 
 20.16  purchases made after June 30, 1995, and before July 1, 2001. 
 20.17     Sec. 23.  [REPEALER.] 
 20.18     Laws 2002, chapter 377, article 9, section 12, the 
 20.19  effective date, is repealed effective the day following final 
 20.20  enactment. 
 20.21                             ARTICLE 2
 20.22                LOCAL LODGING AND SALES TAX ARTICLE
 20.23     Section 1.  Laws 1980, chapter 511, section 1, subdivision 
 20.24  2, as amended by Laws 1991, chapter 291, article 8, section 22, 
 20.25  and Laws 1998, chapter 389, article 8, section 25, is amended to 
 20.26  read: 
 20.27     Subd. 2.  Notwithstanding Minnesota Statutes, Section 
 20.28  477A.016, or any other law, ordinance, or city charter provision 
 20.29  to the contrary, the city of Duluth may, by ordinance, impose an 
 20.30  additional sales tax of up to one and one-half percent on sales 
 20.31  transactions which are described in Minnesota Statutes 2000, 
 20.32  Section 297A.01, Subdivision 3, Clause (c).  When the city 
 20.33  council determines that the taxes imposed under this subdivision 
 20.34  and under section 26 at a rate of one-half of one percent have 
 20.35  produced revenue sufficient to pay (1) the debt service on bonds 
 20.36  in a principal amount of $8,000,000 issued for capital 
 21.1   improvements to the Duluth Entertainment and Convention Center, 
 21.2   and (2) debt service on outstanding bonds originally issued in 
 21.3   the principal amount of $4,970,000 to finance capital 
 21.4   improvements to the Great Lakes Aquarium since the imposition of 
 21.5   the taxes at the rate of one and one-half percent, the rate of 
 21.6   the tax under this subdivision is reduced to one percent.  The 
 21.7   imposition of this tax shall not be subject to voter referendum 
 21.8   under either state law or city charter provisions.  
 21.9      [EFFECTIVE DATE.] This section is effective the day after 
 21.10  the governing body of the city of Duluth and its chief clerical 
 21.11  officer comply with Minnesota Statutes, section 645.021, 
 21.12  subdivisions 2 and 3. 
 21.13     Sec. 2.  Laws 1980, chapter 511, section 2, as amended by 
 21.14  Laws 1998, chapter 389, article 8, section 26, is amended to 
 21.15  read: 
 21.16     Sec. 2.  [CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND 
 21.17  MOTELS.] 
 21.18     Notwithstanding Minnesota Statutes, Section 477A.016, or 
 21.19  any other law, or ordinance, or city charter provision to the 
 21.20  contrary, the city of Duluth may, by ordinance, impose an 
 21.21  additional tax of one and one-half percent upon the gross 
 21.22  receipts from the sale of lodging for periods of less than 30 
 21.23  days in hotels and motels located in the city.  When the city 
 21.24  council determines that the taxes imposed under this section and 
 21.25  section 25 at a rate of one-half of one percent have produced 
 21.26  revenue sufficient to pay (1) the debt service on bonds in a 
 21.27  principal amount of $8,000,000 issued for capital improvements 
 21.28  for the Duluth Entertainment and Convention Center, and (2) the 
 21.29  debt service on outstanding bonds originally issued in the 
 21.30  principal amount of $4,970,000 to finance capital improvements 
 21.31  to the Great Lakes Aquarium since the imposition of the taxes at 
 21.32  the rate of one and one-half percent, the rate of the tax under 
 21.33  this section is reduced to one percent.  The tax shall be 
 21.34  collected in the same manner as the tax set forth in the Duluth 
 21.35  city charter, section 54(d), paragraph one.  The imposition of 
 21.36  this tax shall not be subject to voter referendum under either 
 22.1   state law or city charter provisions. 
 22.2      [EFFECTIVE DATE.] This section is effective the day after 
 22.3   the governing body of the city of Duluth and its chief clerical 
 22.4   officer comply with Minnesota Statutes, section 645.021, 
 22.5   subdivisions 2 and 3. 
 22.6      Sec. 3.  Laws 1993, chapter 375, article 9, section 46, 
 22.7   subdivision 2, as amended by Laws 1997, chapter 231, article 7, 
 22.8   section 40, and Laws 1998, chapter 389, article 8, section 30, 
 22.9   is amended to read: 
 22.10     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
 22.11  authorized by subdivision 1 may only be used by the city to pay 
 22.12  the cost of collecting the tax, and to pay for the following 
 22.13  projects or to secure or pay any principal, premium, or interest 
 22.14  on bonds issued in accordance with subdivision 3 for the 
 22.15  following projects.  
 22.16     (a) To pay all or a portion of the capital expenses of 
 22.17  construction, equipment and acquisition costs for the expansion 
 22.18  and remodeling of the St. Paul Civic Center complex, including 
 22.19  the demolition of the existing arena and the construction and 
 22.20  equipping of a new arena. 
 22.21     (b) The remainder of the funds must be spent for: 
 22.22     (1) capital projects to further residential, cultural, 
 22.23  commercial, and economic development in both downtown St. Paul 
 22.24  and St. Paul neighborhoods.  The amount apportioned under this 
 22.25  paragraph shall be no less than 60 percent of the revenues 
 22.26  derived from the tax each year, except to the extent that a 
 22.27  portion of that amount is required to pay debt service on (1) 
 22.28  bonds issued for the purposes of paragraph (a) prior to March 1, 
 22.29  1998; or (2) bonds issued for the purposes of paragraph (a) 
 22.30  after March 1, 1998, but only if the city council determines 
 22.31  that 40 percent of the revenues derived from the tax together 
 22.32  with other revenues pledged to the payment of the bonds, 
 22.33  including the proceeds of definitive bonds, is expected to 
 22.34  exceed the annual debt service on the bonds; and 
 22.35     (2) the operating expenses of cultural organizations in the 
 22.36  city, provided that the amount spent under this clause may not 
 23.1   exceed must equal ten percent of the total amount spent under 
 23.2   this paragraph in any year.  
 23.3      (c) The amount apportioned under paragraph (b) shall be no 
 23.4   less than 60 percent of the revenues derived from the tax each 
 23.5   year, except to the extent that a portion of that amount is 
 23.6   required to pay debt service on (1) bonds issued for the 
 23.7   purposes of paragraph (a) prior to March 1, 1998; or (2) bonds 
 23.8   issued for the purposes of paragraph (a) after March 1, 1998, 
 23.9   but only if the city council determines that 40 percent of the 
 23.10  revenues derived from the tax together with other revenues 
 23.11  pledged to the payment of the bonds, including the proceeds of 
 23.12  definitive bonds, is expected to exceed the annual debt service 
 23.13  on the bonds. 
 23.14     (d) If in any year more than 40 percent of the revenue 
 23.15  derived from the tax authorized by subdivision 1 is used to pay 
 23.16  debt service on the bonds issued for the purposes of paragraph 
 23.17  (a) and to fund a reserve for the bonds, the amount of the debt 
 23.18  service payment that exceeds 40 percent of the revenue must be 
 23.19  determined for that year.  In any year when 40 percent of the 
 23.20  revenue produced by the sales tax exceeds the amount required to 
 23.21  pay debt service on the bonds and to fund a reserve for the 
 23.22  bonds under paragraph (a), the amount of the excess must be made 
 23.23  available for capital projects to further residential, cultural, 
 23.24  commercial, and economic development in the neighborhoods and 
 23.25  downtown until the cumulative amounts determined for all years 
 23.26  under the preceding sentence have been made available under this 
 23.27  sentence.  The amount made available as reimbursement in the 
 23.28  preceding sentence is not included in the 60 percent determined 
 23.29  under paragraph (b) (c). 
 23.30     (d) (e) By January 15 of each odd-numbered year, the mayor 
 23.31  and the city council must report to the legislature on the use 
 23.32  of sales tax revenues during the preceding two-year period. 
 23.33     [EFFECTIVE DATE.] This section is effective for 
 23.34  distributions after April 30, 2003. 
 23.35     Sec. 4.  Laws 1996, chapter 471, article 2, section 29, is 
 23.36  amended to read: 
 24.1      Sec. 29.  [CITY OF HERMANTOWN; SALES AND USE TAX.] 
 24.2      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] (a) 
 24.3   Notwithstanding Minnesota Statutes, section 477A.016, or any 
 24.4   other contrary provision of law, ordinance, or city charter, the 
 24.5   city of Hermantown may, by ordinance, impose an additional sales 
 24.6   and use tax of up to one percent on sales transactions, storage, 
 24.7   and use taxable pursuant to Minnesota Statutes, chapter 297A, 
 24.8   that occur within the city. 
 24.9      (b) The proceeds of the first one-half of one percent of 
 24.10  tax imposed under this section must be used to meet the costs of 
 24.11  by the city for the following projects: 
 24.12     (1) extending a sewer interceptor line; 
 24.13     (2) construction of a booster pump station, reservoirs, and 
 24.14  related improvements to the water system; and 
 24.15     (3) construction of a police and fire station. 
 24.16     (c) Revenues received from the remaining one-half of one 
 24.17  percent of the tax authorized under this section must be used by 
 24.18  the city to pay all or part of the capital and administrative 
 24.19  costs of developing, acquiring, constructing, and initially 
 24.20  furnishing and equipping for the following projects: 
 24.21     (1) construction of a community recreation center; 
 24.22     (2) completion of a civic center services complex; 
 24.23     (3) construction and relocation of a new public works 
 24.24  facility; 
 24.25     (4) construction of roads, street improvements, and other 
 24.26  traffic control measures within the city; and 
 24.27     (5) acquisition, construction, and improvement of parks and 
 24.28  trails within the city. 
 24.29     (d) Authorized expenses include, but are not limited to, 
 24.30  acquiring property, paying construction, administrative, and 
 24.31  operating expenses related to the development of the projects 
 24.32  listed in paragraph (c), paying debt service on bonds or other 
 24.33  obligations, including lease obligations, issued to finance 
 24.34  construction, expansion, or improvement of the projects listed 
 24.35  in paragraph (c), and other compatible uses, including but not 
 24.36  limited to, parking, lighting, and landscaping. 
 25.1      Subd. 2.  [REFERENDUM.] (a) If the Hermantown city council 
 25.2   proposes to impose the sales tax authorized by this section, it 
 25.3   shall conduct a referendum on the issue. 
 25.4      (b) If the Hermantown city council initially imposes the 
 25.5   tax at a rate less than one percent and proposes increasing it 
 25.6   at a later date up to the authorized rate in subdivision 1, it 
 25.7   shall conduct a referendum on the increase. 
 25.8      (c) The question of imposing or increasing the tax must be 
 25.9   submitted to the voters at a special or general election.  The 
 25.10  tax may not be imposed unless a majority of votes cast on the 
 25.11  question of imposing the tax are in the affirmative.  The 
 25.12  commissioner of revenue shall prepare a suggested form of 
 25.13  question to be presented at the election.  This subdivision 
 25.14  applies notwithstanding any city charter provision to the 
 25.15  contrary. 
 25.16     Subd. 3.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 
 25.17  TAXES.] A sales tax imposed under this section must be reported 
 25.18  and paid to the commissioner of revenue with the state sales 
 25.19  taxes, and be subject to the same penalties, interest, and 
 25.20  enforcement provisions.  The proceeds of the tax, less refunds 
 25.21  and a proportionate share of the cost of collection, shall be 
 25.22  remitted at least quarterly to the city.  The commissioner shall 
 25.23  deduct from the proceeds remitted an amount that equals the 
 25.24  indirect statewide cost as well as the direct and indirect 
 25.25  department costs necessary to administer, audit, and collect the 
 25.26  tax.  The amount deducted shall be deposited in the state 
 25.27  general fund. 
 25.28     Subd. 3a.  [BONDING AUTHORITY.] (a) The city may issue 
 25.29  general obligation bonds under Minnesota Statutes, chapter 475, 
 25.30  to finance the costs in subdivision 1, paragraph (c).  The total 
 25.31  amount of bonds issued for the projects under subdivision 1, 
 25.32  paragraph (c), may not exceed $12,900,000 in the aggregate.  An 
 25.33  election to approve the bonds is not required. 
 25.34     (b) The bonds are not included in computing any debt 
 25.35  limitation applicable to the city and the levy of taxes under 
 25.36  Minnesota Statutes, section 475.61, to pay principal of and 
 26.1   interest on the bonds is not subject to any levy limitation. 
 26.2      (c) The taxes authorized under this section may be pledged 
 26.3   to and used for the payment of the bonds and any bonds issued to 
 26.4   refund them. 
 26.5      Subd. 4.  [TERMINATION.] The portion of the tax authorized 
 26.6   under this section to finance the improvements described in 
 26.7   subdivision 1, paragraph (b), terminates at the later of (1) ten 
 26.8   years after the date of initial imposition of the tax, or (2) on 
 26.9   the first day of the second month next succeeding a 
 26.10  determination by the city council that sufficient funds have 
 26.11  been received from that portion of the tax dedicated to finance 
 26.12  the those improvements described in subdivision 1, clauses (1) 
 26.13  to (3), and to prepay or retire at maturity the principal, 
 26.14  interest, and premium due on any bonds issued for the 
 26.15  improvements.  The portion of the tax authorized to finance the 
 26.16  improvements described in subdivision 1, paragraph (c), 
 26.17  terminates when the revenues raised are sufficient to finance 
 26.18  those improvements, up to an amount equal to $12,900,000 plus 
 26.19  any interest, premium, and other costs associated with the bonds 
 26.20  issued under subdivision 3a.  The city council may terminate 
 26.21  this portion of the tax earlier.  Any funds remaining after 
 26.22  completion of the improvements and retirement or redemption of 
 26.23  the bonds may be placed in the general fund of the city. 
 26.24     Subd. 5.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
 26.25  effective the day after final enactment, upon compliance with 
 26.26  Minnesota Statutes, section 645.021, subdivision 3, by the city 
 26.27  of Hermantown. 
 26.28     [EFFECTIVE DATE.] This section is effective the day after 
 26.29  the governing body of the city of Hermantown and its chief 
 26.30  clerical officer comply with Minnesota Statutes, section 
 26.31  645.021, subdivisions 2 and 3. 
 26.32     Sec. 5.  Laws 1998, chapter 389, article 8, section 43, 
 26.33  subdivision 3, is amended to read: 
 26.34     Subd. 3.  [USE OF REVENUES.] Revenues received from the 
 26.35  taxes authorized by subdivisions 1 and 2 must be used by the 
 26.36  city to pay for the cost of collecting and administering the 
 27.1   taxes and to pay for the following projects: 
 27.2      (1) transportation infrastructure improvements including 
 27.3   both regional highway and airport improvements; 
 27.4      (2) improvements to the civic center complex; 
 27.5      (3) a municipal water, sewer, and storm sewer project 
 27.6   necessary to improve regional ground water quality; and 
 27.7      (4) construction of a regional recreation and sports center 
 27.8   and associated other facilities available for both community and 
 27.9   student use, that are located on state-owned land at or adjacent 
 27.10  to the Rochester center. 
 27.11  The total amount of capital expenditures or bonds for these 
 27.12  projects that may be paid from the revenues raised from the 
 27.13  taxes authorized in this section may not exceed 
 27.14  $71,500,000 $111,500,000.  The total amount of capital 
 27.15  expenditures or bonds for the project in clause (4) that may be 
 27.16  paid from the revenues raised from the taxes authorized in this 
 27.17  section may not exceed $20,000,000 $28,000,000. 
 27.18     [EFFECTIVE DATE.] This section is effective the day after 
 27.19  the governing body of Rochester and its chief clerical officer 
 27.20  timely complete their compliance with Minnesota Statutes, 
 27.21  section 645.021, subdivisions 2 and 3. 
 27.22     Sec. 6.  Laws 1998, chapter 389, article 8, section 43, 
 27.23  subdivision 4, is amended to read: 
 27.24     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 27.25  under Minnesota Statutes, chapter 475, to finance the capital 
 27.26  expenditure and improvement projects.  An election to approve 
 27.27  the bonds under Minnesota Statutes, section 475.58, may be held 
 27.28  in combination with the election to authorize imposition of the 
 27.29  tax under subdivision 1.  Whether to permit imposition of the 
 27.30  tax and issuance of bonds may be posed to the voters as a single 
 27.31  question.  The question must state that the sales tax revenues 
 27.32  are pledged to pay the bonds, but that the bonds are general 
 27.33  obligations and will be guaranteed by the city's property taxes. 
 27.34     (b) The issuance of bonds under this subdivision is not 
 27.35  subject to Minnesota Statutes, section 275.60. 
 27.36     (c) The bonds are not included in computing any debt 
 28.1   limitation applicable to the city, and the levy of taxes under 
 28.2   Minnesota Statutes, section 475.61, to pay principal of and 
 28.3   interest on the bonds is not subject to any levy limitation. 
 28.4   The aggregate principal amount of bonds, plus the aggregate of 
 28.5   the taxes used directly to pay eligible capital expenditures and 
 28.6   improvements may not exceed $71,500,000 $111,500,000, plus an 
 28.7   amount equal to the costs related to issuance of the bonds. 
 28.8      (d) The taxes may be pledged to and used for the payment of 
 28.9   the bonds and any bonds issued to refund them, only if the bonds 
 28.10  and any refunding bonds are general obligations of the city. 
 28.11     [EFFECTIVE DATE.] This section is effective the day after 
 28.12  the governing body of Rochester and its chief clerical officer 
 28.13  timely complete their compliance with Minnesota Statutes, 
 28.14  section 645.021, subdivisions 2 and 3. 
 28.15     Sec. 7.  Laws 1999, chapter 243, article 4, section 18, 
 28.16  subdivision 1, is amended to read:  
 28.17     Subdivision 1.  [SALES AND USE TAX.] (a) Notwithstanding 
 28.18  Minnesota Statutes, section 297A.48, subdivision 1a, 477A.016, 
 28.19  or any other provision of law, ordinance, or city charter, if 
 28.20  approved by the city voters at the first municipal general 
 28.21  election held after the date of final enactment of this act or 
 28.22  at a special election held November 2, 1999, the city of Proctor 
 28.23  may impose by ordinance a sales and use tax of up to one-half of 
 28.24  one percent for the purposes specified in subdivision 3, 
 28.25  paragraph (a).  The provisions of Minnesota Statutes, 
 28.26  section 297A.48 297A.99, govern the imposition, administration, 
 28.27  collection, and enforcement of the tax authorized under this 
 28.28  subdivision. 
 28.29     (b) The city of Proctor may impose by ordinance an 
 28.30  additional sales and use tax of up to one-half of one percent if 
 28.31  approved by the city voters at a general election or at a 
 28.32  special election held for this purpose.  The revenues received 
 28.33  from this additional tax must be used for the purposes specified 
 28.34  in subdivision 3, paragraph (b).  
 28.35     [EFFECTIVE DATE.] This section is effective the day 
 28.36  following final enactment, upon compliance by the city of 
 29.1   Proctor with Minnesota Statutes, section 645.021, subdivision 3. 
 29.2      Sec. 8.  Laws 1999, chapter 243, article 4, section 18, 
 29.3   subdivision 3, is amended to read:  
 29.4      Subd. 3.  [USE OF REVENUES.] (a) Revenues received from 
 29.5   taxes authorized by subdivisions 1, paragraph (a), and 2 must be 
 29.6   used by the city to pay the cost of collecting the taxes and to 
 29.7   pay for construction and improvement of the following city 
 29.8   facilities: 
 29.9      (1) streets; and 
 29.10     (2) constructing and equipping the Proctor community 
 29.11  activity center. 
 29.12     Authorized expenses include, but are not limited to, 
 29.13  acquiring property, paying construction and operating expenses 
 29.14  related to the development of an authorized facility, and paying 
 29.15  debt service on bonds or other obligations, including lease 
 29.16  obligations, issued to finance the construction, expansion, or 
 29.17  improvement of an authorized facility.  The capital expenses for 
 29.18  all projects authorized under this paragraph that may be paid 
 29.19  with these taxes is limited to $3,600,000, plus an amount equal 
 29.20  to the costs related to issuance of the bonds. 
 29.21     (b) Revenues received from taxes authorized by subdivision 
 29.22  1, paragraph (b), must be used by the city to pay the cost of 
 29.23  collecting the taxes and for construction and improvements of 
 29.24  city streets, public utilities, sidewalks, bikeways, and trails. 
 29.25     [EFFECTIVE DATE.] This section is effective the day 
 29.26  following final enactment, upon compliance by the city of 
 29.27  Proctor with Minnesota Statutes, section 645.021, subdivision 3. 
 29.28     Sec. 9.  Laws 1999, chapter 243, article 4, section 18, 
 29.29  subdivision 4, is amended to read:  
 29.30     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 29.31  under Minnesota Statutes, chapter 475, to finance the capital 
 29.32  expenditure and improvement projects described in subdivision 
 29.33  3.  An election to approve the bonds under Minnesota Statutes, 
 29.34  section 475.58, is not required. 
 29.35     (b) The issuance of bonds under this subdivision is not 
 29.36  subject to Minnesota Statutes, sections 275.60 and 279.61 275.61.
 30.1      (c) The bonds are not included in computing any debt 
 30.2   limitation applicable to the city, and the levy of taxes under 
 30.3   Minnesota Statutes, section 475.61, to pay principal of and 
 30.4   interest on the bonds is not subject to any levy limitation.  
 30.5      (d) For projects described in subdivision 3, paragraph (a), 
 30.6   the aggregate principal amount of bonds, plus the aggregate of 
 30.7   the taxes used directly to pay eligible capital expenditures and 
 30.8   improvements, may not exceed $3,600,000, plus an amount equal to 
 30.9   the costs related to issuance of the bonds, including interest 
 30.10  on the bonds.  For projects described in subdivision 3, 
 30.11  paragraph (b), the aggregate principal amount of bonds may not 
 30.12  exceed $7,200,000, plus an amount equal to the costs related to 
 30.13  issuance of the bonds, including interest on the bonds.  
 30.14     (e) The sales and use and excise taxes authorized in this 
 30.15  section may be pledged to and used for the payment of the bonds 
 30.16  and any bonds issued to refund them only if the bonds and any 
 30.17  refunding bonds are general obligations of the city. 
 30.18     [EFFECTIVE DATE.] This section is effective the day 
 30.19  following final enactment, upon compliance by the city of 
 30.20  Proctor with Minnesota Statutes, section 645.021, subdivision 3. 
 30.21     Sec. 10.  [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 
 30.22     Subdivision 1.  [SALES AND USE TAXES.] Notwithstanding 
 30.23  Minnesota Statutes, section 477A.016, or any other provision of 
 30.24  law or ordinance, if approved by the voters of the city at the 
 30.25  next general election held after the date of final enactment of 
 30.26  this act, the city of Beaver Bay may impose by ordinance a sales 
 30.27  and use tax at a rate of up to one percent for the purposes 
 30.28  specified in subdivision 2.  The provisions of Minnesota 
 30.29  Statutes, section 297A.99, govern the imposition, 
 30.30  administration, collection, and enforcement of the tax 
 30.31  authorized under this subdivision. 
 30.32     Subd. 2.  [USE OF REVENUES.] The revenues received from 
 30.33  taxes authorized by subdivision 1 must be used to pay the bonded 
 30.34  indebtedness on the city community building and to provide 
 30.35  funding for recreational facilities, the upgrading of the water 
 30.36  and sewer system, upgrading and replacement of fire equipment, 
 31.1   and improvement of streets. 
 31.2      Subd. 3.  [TERMINATION OF TAXES.] The authority granted 
 31.3   under subdivision 1 to the city of Beaver Bay to impose sales 
 31.4   and use taxes expires when the city council determines that the 
 31.5   amount of revenue received to pay the costs of the projects 
 31.6   described in subdivision 2 shall meet or exceed $1,500,000.  Any 
 31.7   funds remaining after completion of the projects may be placed 
 31.8   in the general fund of the city.  The tax imposed under 
 31.9   subdivision 1 may expire at an earlier time if the city so 
 31.10  determines by ordinance. 
 31.11     [EFFECTIVE DATE.] This section is effective the day after 
 31.12  the governing body of the city of Beaver Bay and its chief 
 31.13  clerical officer timely comply with Minnesota Statutes, section 
 31.14  645.021, subdivisions 2 and 3. 
 31.15     Sec. 11.  [CITY OF BEMIDJI.] 
 31.16     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
 31.17  Notwithstanding Minnesota Statutes, section 477A.016, or any 
 31.18  other provision of law, ordinance, or city charter, pursuant to 
 31.19  the approval of the city voters at the general election held on 
 31.20  November 5, 2002, the city of Bemidji may impose by ordinance a 
 31.21  sales and use tax of one-half of one percent for the purposes 
 31.22  specified in subdivision 2.  The provisions of Minnesota 
 31.23  Statutes, section 297A.99, govern the imposition, 
 31.24  administration, collection, and enforcement of the tax 
 31.25  authorized under this subdivision. 
 31.26     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
 31.27  authorized by subdivision 1 must be used for the cost of 
 31.28  collecting and administering the tax and to pay all or part of 
 31.29  the capital or administrative costs of the acquisition, 
 31.30  construction, and improvement of parks and trails within the 
 31.31  city, as provided for in the city of Bemidji's parks, open space 
 31.32  and trail system plan, adopted by the Bemidji city council on 
 31.33  November 21, 2001.  Authorized expenses include, but are not 
 31.34  limited to, acquiring property, paying construction expenses 
 31.35  related to the development of these facilities and improvements, 
 31.36  and securing and paying debt service on bonds or other 
 32.1   obligations issued to finance acquisition, construction, 
 32.2   improvement, or development of parks and trails within the city 
 32.3   of Bemidji. 
 32.4      Subd. 3.  [BONDS.] Pursuant to the approval of the city 
 32.5   voters at the general election held on November 5, 2002, the 
 32.6   city of Bemidji may issue without additional election general 
 32.7   obligation bonds of the city in an amount not to exceed 
 32.8   $9,826,000 to pay capital and administrative expenses for the 
 32.9   acquisition, construction, improvement, and development of parks 
 32.10  and trails as specified in subdivision 2.  The debt represented 
 32.11  by the bonds must not be included in computing any debt 
 32.12  limitations applicable to the city, and the levy of taxes 
 32.13  required by Minnesota Statutes, section 475.61, to pay the 
 32.14  principal of any interest on the bonds must not be subject to 
 32.15  any levy limitations or be included in computing or applying any 
 32.16  levy limitation applicable to the city. 
 32.17     Subd. 4.  [TERMINATION OF TAX.] The tax imposed under 
 32.18  subdivision 1 expires when the Bemidji city council determines 
 32.19  that the amount described in subdivision 3 has been received 
 32.20  from the tax to finance the capital and administrative costs for 
 32.21  acquisition, construction, improvement, and development of parks 
 32.22  and trails and to repay or retire at maturity the principal, 
 32.23  interest, and premium due on any bonds issued for the park and 
 32.24  trail improvements under subdivision 3.  Any funds remaining 
 32.25  after completion of the park and trail improvements and 
 32.26  retirement or redemption of the bonds may be placed in the 
 32.27  general fund of the city.  The tax imposed under subdivision 1 
 32.28  may expire at an earlier time if the city so determines by 
 32.29  ordinance. 
 32.30     Subd. 5.  [EXEMPTION.] Products and services used for 
 32.31  repair or maintenance of aircraft are exempt from the taxes 
 32.32  imposed under this section. 
 32.33     [EFFECTIVE DATE.] This section is effective the day after 
 32.34  compliance by the governing body of the city of Bemidji with 
 32.35  Minnesota Statutes, section 645.021, subdivision 3. 
 32.36     Sec. 12.  [CITY OF CLOQUET; TAXES AUTHORIZED.] 
 33.1      Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
 33.2   Minnesota Statutes, section 477A.016, or any other provision of 
 33.3   law, ordinance, or city charter, if approved by the voters 
 33.4   pursuant to Minnesota Statutes, section 297A.99, the city of 
 33.5   Cloquet may impose by ordinance a sales and use tax of up to 
 33.6   one-half of one percent for the purpose specified in subdivision 
 33.7   3.  The provisions of Minnesota Statutes, section 297A.99, 
 33.8   govern the imposition, administration, collection, and 
 33.9   enforcement of the tax authorized under this subdivision. 
 33.10     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
 33.11  Minnesota Statutes, section 477A.016, or any other provision of 
 33.12  law, ordinance, or city charter, the city of Cloquet may impose 
 33.13  by ordinance, for the purposes specified in subdivision 3, an 
 33.14  excise tax of up to $20 per motor vehicle, as defined by 
 33.15  ordinance, purchased or acquired from any person engaged within 
 33.16  the city in the business of selling motor vehicles at retail. 
 33.17     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
 33.18  authorized by subdivisions 1 and 2 must be used by the city to 
 33.19  pay the cost of collecting the taxes and to pay for the 
 33.20  following projects: 
 33.21     (1) construction and implementation of riverfront task 
 33.22  force park improvements including Veteran's Park; and 
 33.23     (2) extension of water and sewer lines and other 
 33.24  improvements to city infrastructure necessary for construction 
 33.25  of a city industrial park. 
 33.26     Authorized expenses include, but are not limited to, 
 33.27  acquiring property and paying construction expenses related to 
 33.28  these improvements, and paying debt service on bonds or other 
 33.29  obligations issued to finance acquisition and construction of 
 33.30  these improvements. 
 33.31     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 33.32  under Minnesota Statutes, chapter 475, to pay capital and 
 33.33  administrative expenses for the improvements described in 
 33.34  subdivision 3 in an amount that does not exceed $6,000,000.  An 
 33.35  election to approve the bonds under Minnesota Statutes, section 
 33.36  475.58, is not required. 
 34.1      (b) The issuance of bonds under this subdivision is not 
 34.2   subject to Minnesota Statutes, sections 275.60 and 275.61. 
 34.3      (c) The debt represented by the bonds is not included in 
 34.4   computing any debt limitation applicable to the city, and any 
 34.5   levy of taxes under Minnesota Statutes, section 475.61, to pay 
 34.6   principal of and interest on the bonds is not subject to any 
 34.7   levy limitation.  
 34.8      Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
 34.9   subdivisions 1 and 2 expire at the earlier of (1) 12 years, or 
 34.10  (2) when the city council determines that sufficient funds have 
 34.11  been received from the taxes to finance the capital and 
 34.12  administrative costs of the improvements described in 
 34.13  subdivision 3, plus the additional amount needed to pay the 
 34.14  costs related to issuance of bonds under subdivision 4, 
 34.15  including interest on the bonds.  Any funds remaining after 
 34.16  completion of the project and retirement or redemption of the 
 34.17  bonds may be placed in the general fund of the city.  The taxes 
 34.18  imposed under subdivisions 1 and 2 may expire at an earlier time 
 34.19  if the city so determines by ordinance. 
 34.20     [EFFECTIVE DATE.] This section is effective the day after 
 34.21  the governing body of the city of Cloquet and its chief clerical 
 34.22  officer timely comply with Minnesota Statutes, section 645.021, 
 34.23  subdivisions 2 and 3. 
 34.24     Sec. 13.  [CITY OF HOPKINS; FOOD AND BEVERAGE TAX.] 
 34.25     Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
 34.26  Minnesota Statutes, section 477A.016, or any ordinance, city 
 34.27  charter, or other provision of law, the city of Hopkins may, by 
 34.28  ordinance, impose a sales tax of up to one percent on the gross 
 34.29  receipts of all food and beverages, including on-sale 
 34.30  intoxicating beverages and fermented malt beverages, sold at 
 34.31  licensed on-sale liquor establishments, restaurants, or other 
 34.32  places of refreshment located within the geographic boundaries 
 34.33  of the city.  The imposition of this tax is subject to the 
 34.34  referendum requirement in subdivision 3. 
 34.35     Subd. 2.  [USE OF PROCEEDS FROM FOOD AND BEVERAGE TAX.] The 
 34.36  proceeds of any tax imposed under subdivision 1 shall be used by 
 35.1   the city to fund public arts purposes.  Authorized expenses 
 35.2   include, but are not limited to, expenses related to public art 
 35.3   facilities, community or public arts projects, or purchase or 
 35.4   acquisition of art for public purposes. 
 35.5      Subd. 3.  [REFERENDUM.] The tax must not be imposed until 
 35.6   it has been submitted to the voters at a general or special 
 35.7   election and a majority of votes cast on the question of 
 35.8   approving the imposition of the tax is in the affirmative. 
 35.9      Subd. 4.  [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 
 35.10  THE TAX.] The tax shall be collected and administered in the 
 35.11  same manner as general local sales taxes under Minnesota 
 35.12  Statutes, section 297A.99, subdivision 9.  
 35.13     Subd. 5.  [EXPIRATION.] The tax imposed under this section 
 35.14  expires five years after it first becomes effective. 
 35.15     [EFFECTIVE DATE.] This section is effective upon approval 
 35.16  by the city of Hopkins city council and compliance with 
 35.17  Minnesota Statutes, section 645.021, subdivision 3. 
 35.18     Sec. 14.  [LODGING TAX; ITASCA COUNTY AUTHORITY.] 
 35.19     Notwithstanding Minnesota Statutes, section 469.190, 
 35.20  subdivisions 1 and 4, no town located in Itasca county may 
 35.21  impose the local lodging tax authorized in Minnesota Statutes, 
 35.22  section 469.190, but the county of Itasca may impose the local 
 35.23  lodging tax authorized in that section in all towns and 
 35.24  unorganized territories within the county.  Any existing taxes 
 35.25  imposed by a town in that county will expire the day that a 
 35.26  county tax is imposed under this section. 
 35.27     If the county board exercises the authority under this 
 35.28  section, it must determine by resolution that imposition of the 
 35.29  tax is in the county's interest.  The resolution is subject to 
 35.30  the same notice and reverse referendum requirements that would 
 35.31  apply under Minnesota Statutes, section 469.190, subdivision 5, 
 35.32  if the county was only imposing the tax in an unorganized 
 35.33  territory.  The provisions of Minnesota Statutes, section 
 35.34  469.190, subdivisions 2, 3, 6, and 7, also apply to a tax 
 35.35  imposed under this section. 
 35.36     [EFFECTIVE DATE.] This section is effective the day after 
 36.1   the governing body of Itasca county and its chief clerical 
 36.2   officer comply with Minnesota Statutes, section 645.021, 
 36.3   subdivisions 2 and 3. 
 36.4      Sec. 15.  [CITY OF MEDFORD; SALES AND USE TAX.] 
 36.5      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
 36.6   Notwithstanding Minnesota Statutes, section 477A.016, or any 
 36.7   other provision of law, ordinance, or city charter, the city of 
 36.8   Medford may, by ordinance, impose a sales and use tax of 
 36.9   one-half of one percent for the purposes specified in 
 36.10  subdivision 2.  Except as otherwise specifically provided, the 
 36.11  provisions of Minnesota Statutes, section 297A.99, govern the 
 36.12  imposition, administration, collection, and enforcement of the 
 36.13  tax authorized under this subdivision. 
 36.14     Subd. 2.  [USE OF REVENUES.] The proceeds of the tax 
 36.15  imposed under this section must be used to pay up to $5,000,000 
 36.16  in costs related to improving the city's wastewater system and 
 36.17  wastewater treatment plant. 
 36.18     Subd. 3.  [REFERENDUM.] If the Medford city council 
 36.19  proposes to impose the tax authorized by this section, the 
 36.20  question of imposing the tax must be submitted to the voters at 
 36.21  the next general election.  The tax may not be imposed unless 
 36.22  the majority of votes cast on the question of imposing the tax 
 36.23  are in the affirmative.  The commissioner of revenue shall 
 36.24  prepare a suggested form of the question to be presented at the 
 36.25  election.  The question must state that the sales tax revenues 
 36.26  would be pledged to pay any bonds issued under subdivision 4 and 
 36.27  that these bonds are guaranteed by the city's property taxes. 
 36.28     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 36.29  under Minnesota Statutes, chapter 475, to finance the capital 
 36.30  expenditure and improvement projects authorized under 
 36.31  subdivision 2.  The total amount of bonds issued for the 
 36.32  projects listed in subdivision 2 may not exceed $5,000,000 in 
 36.33  aggregate.  An election to approve the bonds, as required under 
 36.34  Minnesota Statutes, section 475.58, is not required. 
 36.35     (b) The issuance of the bonds under this subdivision is not 
 36.36  subject to Minnesota Statutes, sections 275.60 and 275.61. 
 37.1      (c) The bonds are not included in computing any debt 
 37.2   limitation applicable to the city, and the levy of taxes under 
 37.3   Minnesota Statutes, section 475.61, to pay the principal of and 
 37.4   interest on the bonds is not subject to any levy limitation. 
 37.5      (d) The taxes authorized under this section may be pledged 
 37.6   to and used for the payment of the bonds and any bonds issued to 
 37.7   refund them only if the bonds and any refunding bonds are 
 37.8   general obligations of the city. 
 37.9      Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
 37.10  this section expire at the earlier of (1) 20 years after the 
 37.11  taxes are first imposed, or (2) when the city council first 
 37.12  determines that the amount of revenues raised to pay for the 
 37.13  projects under subdivision 2 shall meet or exceed the sum of 
 37.14  $5,000,000, plus an amount equal to the costs related to the 
 37.15  issuance of bonds under subdivision 4.  Any funds remaining 
 37.16  after completion of the projects and retirement or redemption of 
 37.17  the bonds may be placed in the general funds of the city. 
 37.18     [EFFECTIVE DATE.] This section is effective the day after 
 37.19  compliance with the governing body of the city of Medford with 
 37.20  Minnesota Statutes, section 645.021, subdivision 3. 
 37.21     Sec. 16.  [CITY OF NEWPORT; LODGING TAX.] 
 37.22     Subdivision 1.  [LODGING TAX.] Notwithstanding Minnesota 
 37.23  Statutes, section 477A.016, or any ordinance, city charter, or 
 37.24  other provision of law, the city of Newport may, by ordinance, 
 37.25  impose a tax of up to three percent upon the gross receipts from 
 37.26  the sale of lodging for periods of less than 30 days in hotels 
 37.27  and motels located in the city.  The tax does not apply to the 
 37.28  furnishing of lodging by a business having less than 25 lodging 
 37.29  rooms.  The total amount of taxes imposed under this section and 
 37.30  under Minnesota Statutes, section 469.190, shall not exceed 
 37.31  three percent. 
 37.32     Subd. 2.  [USE OF PROCEEDS.] The proceeds of any tax 
 37.33  imposed in subdivision 1 shall be used by the city to fund 
 37.34  economic development and redevelopment of the city.  Authorized 
 37.35  expenses include, but are not limited to, acquisition and 
 37.36  development costs of open space, parks, and trails. 
 38.1      Subd. 3.  [ENFORCEMENT, COLLECTION, AND 
 38.2   ADMINISTRATION.] The tax shall be collected and administered in 
 38.3   the same manner as local lodging taxes under Minnesota Statutes, 
 38.4   section 469.190. 
 38.5      [EFFECTIVE DATE.] This section is effective upon approval 
 38.6   by the Newport city council and compliance with Minnesota 
 38.7   Statutes, section 645.021, subdivision 3. 
 38.8      Sec. 17.  [CITY OF PARK RAPIDS.] 
 38.9      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
 38.10  Notwithstanding Minnesota Statutes, section 477A.016, or any 
 38.11  other provision of law, ordinance, or city charter, pursuant to 
 38.12  the approval of the city voters at the next general election or 
 38.13  at a special election held for this purpose, the city of Park 
 38.14  Rapids may impose by ordinance a sales and use tax of one 
 38.15  percent for the purposes specified in subdivision 2.  The 
 38.16  provisions of Minnesota Statutes, section 297A.99, govern the 
 38.17  imposition, administration, collection, and enforcement of the 
 38.18  tax authorized under this subdivision. 
 38.19     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
 38.20  authorized by subdivision 1 must be used for the cost of 
 38.21  collecting and administering the tax and to pay all or part of 
 38.22  the capital or administrative costs of the development, 
 38.23  acquisition, construction, and improvement of the following 
 38.24  projects:  
 38.25     (1) two-thirds of the cost of construction and operation of 
 38.26  a community center that may include a senior citizen center, 
 38.27  fitness center, swimming pool, meeting rooms, indoor track, and 
 38.28  racquetball, basketball, and tennis courts, provided that an 
 38.29  amount equal to one-third of the cost of construction is 
 38.30  received from private sources; 
 38.31     (2) capital improvement projects including, but not limited 
 38.32  to, installation of water, sewer, storm sewer, street 
 38.33  improvements, new city water tower and well, costs related to 
 38.34  improvements to marked trunk highway 34; and 
 38.35     (3) park improvements. 
 38.36     Authorized expenses include, but are not limited to, 
 39.1   acquiring property, paying construction expenses related to the 
 39.2   development of these facilities and improvements, and securing 
 39.3   and paying debt service on bonds or other obligations issued to 
 39.4   finance acquisition, construction, improvement, or development. 
 39.5      Subd. 3.  [BONDS.] Pursuant to the approval of the city 
 39.6   voters to impose the tax authorized in subdivision 1, the city 
 39.7   of Park Rapids may issue without an additional election general 
 39.8   obligation bonds of the city to pay capital and administrative 
 39.9   expenses for the acquisition, construction, improvement, and 
 39.10  development of the projects specified in subdivision 2.  The 
 39.11  debt represented by the bonds must not be included in computing 
 39.12  any debt limitations applicable to the city, and the levy of 
 39.13  taxes required by Minnesota Statutes, section 475.61, to pay the 
 39.14  principal or any interest on the bonds must not be subject to 
 39.15  any levy limitations or be included in computing or applying any 
 39.16  levy limitation applicable to the city. 
 39.17     Subd. 4.  [TERMINATION OF TAX.] The tax imposed under 
 39.18  subdivision 1 expires the earlier of July 1, 2023, or when the 
 39.19  city council determines that sufficient revenues have been 
 39.20  received to retire the bonds in subdivision 3.  Any funds 
 39.21  remaining after completion of the projects specified in 
 39.22  subdivision 2 and retirement or redemption of the bonds may be 
 39.23  placed in the general fund of the city.  The tax imposed under 
 39.24  subdivision 1 may expire at an earlier time if the city so 
 39.25  determines by ordinance. 
 39.26     [EFFECTIVE DATE.] This section is effective the day after 
 39.27  compliance by the governing body of the city of Park Rapids with 
 39.28  Minnesota Statutes, section 645.021, subdivision 3. 
 39.29                             ARTICLE 3
 39.30                            PROPERTY TAX
 39.31     Section 1.  Minnesota Statutes 2002, section 216B.2424, 
 39.32  subdivision 5, is amended to read: 
 39.33     Subd. 5.  [MANDATE.] (a) A public utility, as defined in 
 39.34  section 216B.02, subdivision 4, that operates a nuclear-powered 
 39.35  electric generating plant within this state must construct and 
 39.36  operate, purchase, or contract to construct and operate (1) by 
 40.1   December 31, 1998, 50 megawatts of electric energy installed 
 40.2   capacity generated by farm-grown closed-loop biomass scheduled 
 40.3   to be operational by December 31, 2001; and (2) by December 31, 
 40.4   1998, an additional 75 megawatts of installed capacity so 
 40.5   generated scheduled to be operational by December 31, 2002.  
 40.6      (b) Of the 125 megawatts of biomass electricity installed 
 40.7   capacity required under this subdivision, no more than 50 
 40.8   megawatts of this capacity may be provided by a facility that 
 40.9   uses poultry litter as its primary fuel source and any such 
 40.10  facility:  
 40.11     (1) need not use biomass that complies with the definition 
 40.12  in subdivision 1; 
 40.13     (2) must enter into a contract with the public utility for 
 40.14  such capacity, that has an average purchase price per megawatt 
 40.15  hour over the life of the contract that is equal to or less than 
 40.16  the average purchase price per megawatt hour over the life of 
 40.17  the contract in contracts approved by the public utilities 
 40.18  commission before April 1, 2000, to satisfy the mandate of this 
 40.19  section, and file that contract with the public utilities 
 40.20  commission prior to September 1, 2000; and 
 40.21     (3) must schedule such capacity to be operational by 
 40.22  December 31, 2002.  
 40.23     (c) Of the total 125 megawatts of biomass electric energy 
 40.24  installed capacity required under this section, no more than 75 
 40.25  megawatts may be provided by a single project.  
 40.26     (d) Of the 75 megawatts of biomass electric energy 
 40.27  installed capacity required under paragraph (a), clause (2), no 
 40.28  more than 25 megawatts of this capacity may be provided by a St. 
 40.29  Paul district heating and cooling system cogeneration facility 
 40.30  utilizing waste wood as a primary fuel source.  The St. Paul 
 40.31  district heating and cooling system cogeneration facility need 
 40.32  not use biomass that complies with the definition in subdivision 
 40.33  1.  
 40.34     (e) The public utility must accept and consider on an equal 
 40.35  basis with other biomass proposals: 
 40.36     (1) a proposal to satisfy the requirements of this section 
 41.1   that includes a project that exceeds the megawatt capacity 
 41.2   requirements of either paragraph (a), clause (1) or (2), and 
 41.3   that proposes to sell the excess capacity to the public utility 
 41.4   or to other purchasers; and 
 41.5      (2) a proposal for a new facility to satisfy more than ten 
 41.6   but not more than 20 megawatts of the electrical generation 
 41.7   requirements by a small business-sponsored independent power 
 41.8   producer facility to be located within the northern quarter of 
 41.9   the state, which means the area located north of Constitutional 
 41.10  Route No. 8 as described in section 161.114, subdivision 2, and 
 41.11  that utilizes biomass residue wood, sawdust, bark, chipped wood, 
 41.12  or brush to generate electricity.  A facility described in this 
 41.13  clause is not required to utilize biomass complying with the 
 41.14  definition in subdivision 1, but must have the capacity required 
 41.15  by this clause operational by December 31, 2002 2005. 
 41.16     (f) If a public utility files a contract with the 
 41.17  commission for electric energy installed capacity that uses 
 41.18  poultry litter as its primary fuel source, the commission must 
 41.19  do a preliminary review of the contract to determine if it meets 
 41.20  the purchase price criteria provided in paragraph (b), clause 
 41.21  (2), of this subdivision.  The commission shall perform its 
 41.22  review and advise the parties of its determination within 30 
 41.23  days of filing of such a contract by a public utility.  A public 
 41.24  utility may submit by September 1, 2000, a revised contract to 
 41.25  address the commission's preliminary determination.  
 41.26     (g) The commission shall finally approve, modify, or 
 41.27  disapprove no later than July 1, 2001, all contracts submitted 
 41.28  by a public utility as of September 1, 2000, to meet the mandate 
 41.29  set forth in this subdivision.  
 41.30     (h) If a public utility subject to this section exercises 
 41.31  an option to increase the generating capacity of a project in a 
 41.32  contract approved by the commission prior to April 25, 2000, to 
 41.33  satisfy the mandate in this subdivision, the public utility must 
 41.34  notify the commission by September 1, 2000, that it has 
 41.35  exercised the option and include in the notice the amount of 
 41.36  additional megawatts to be generated under the option 
 42.1   exercised.  Any review by the commission of the project after 
 42.2   exercise of such an option shall be based on the same criteria 
 42.3   used to review the existing contract. 
 42.4      (i) A facility specified in this subdivision qualifies for 
 42.5   exemption from property taxation under section 272.02, 
 42.6   subdivision 43. 
 42.7      [EFFECTIVE DATE.] This section is effective the day 
 42.8   following final enactment. 
 42.9      Sec. 2.  Minnesota Statutes 2002, section 270B.12, is 
 42.10  amended by adding a subdivision to read: 
 42.11     Subd. 13.  [COUNTY ASSESSORS; CLASS 1B HOMESTEADS.] The 
 42.12  commissioner may disclose to a county assessor, and to the 
 42.13  assessor's designated agents or employees, a listing of parcels 
 42.14  of property qualifying for the class 1b property tax 
 42.15  classification under section 273.13, subdivision 22. 
 42.16     [EFFECTIVE DATE.] This section is effective the day 
 42.17  following final enactment. 
 42.18     Sec. 3.  Minnesota Statutes 2002, section 272.02, 
 42.19  subdivision 26, is amended to read: 
 42.20     Subd. 26.  [LOW-INCOME HOUSING.] A structure that is 
 42.21  situated on real property is exempt if it is used for: 
 42.22     (i) housing for the elderly or for low- and moderate-income 
 42.23  families as defined in Title II of the National Housing Act, as 
 42.24  amended through December 31, 1990, and funded by a direct 
 42.25  federal loan or federally insured loan made pursuant to Title II 
 42.26  of the act; or 
 42.27     (ii) housing lower income families or elderly or 
 42.28  handicapped persons, as defined in Section 8 of the United 
 42.29  States Housing Act of 1937, as amended. 
 42.30     In order for a structure to be exempt under item (i) or 
 42.31  (ii), it must also meet each of the following criteria: 
 42.32     (A) is owned by an entity which is operated as a nonprofit 
 42.33  corporation organized under chapter 317A; 
 42.34     (B) is owned by an entity which has not entered into a 
 42.35  housing assistance payments contract under Section 8 of the 
 42.36  United States Housing Act of 1937, or, if the entity which owns 
 43.1   the structure has entered into a housing assistance payments 
 43.2   contract under Section 8 of the United States Housing Act of 
 43.3   1937, the contract provides assistance for less than 90 percent 
 43.4   of the dwelling units in the structure, excluding dwelling units 
 43.5   intended for management or maintenance personnel; 
 43.6      (C) operates an on-site congregate dining program in which 
 43.7   participation by residents is mandatory, and provides assisted 
 43.8   living or similar social and physical support services for 
 43.9   residents; and 
 43.10     (D)(1) was not assessed and did not pay tax under chapter 
 43.11  273 prior to the 1991 levy, while meeting the other conditions 
 43.12  of this subdivision; or 
 43.13     (2) is physically attached to a church exempt from taxation 
 43.14  under subdivision 6, and not less than 30 percent of the units 
 43.15  therein are occupied by individuals or families whose annual 
 43.16  income does not exceed 50 percent of the median family income, 
 43.17  as most recently established by the United States Department of 
 43.18  Housing and Urban Development for the applicable standard 
 43.19  metropolitan statistical area, adjusted for family size. 
 43.20     An exemption under this subdivision remains in effect for 
 43.21  taxes levied in each year or partial year of the term of its 
 43.22  permanent financing. 
 43.23     [EFFECTIVE DATE.] This section is effective the day 
 43.24  following final enactment. 
 43.25     Sec. 4.  Minnesota Statutes 2002, section 272.02, 
 43.26  subdivision 31, is amended to read: 
 43.27     Subd. 31.  [BUSINESS INCUBATOR PROPERTY.] Property owned by 
 43.28  a nonprofit charitable organization that qualifies for tax 
 43.29  exemption under section 501(c)(3) of the Internal Revenue Code 
 43.30  of 1986, as amended through December 31, 1997, that is intended 
 43.31  to be used as a business incubator in a high-unemployment 
 43.32  county, is exempt.  As used in this subdivision, a "business 
 43.33  incubator" is a facility used for the development of nonretail 
 43.34  businesses, offering access to equipment, space, services, and 
 43.35  advice to the tenant businesses, for the purpose of encouraging 
 43.36  economic development, diversification, and job creation in the 
 44.1   area served by the organization, and "high-unemployment county" 
 44.2   is a county that had an average annual unemployment rate of 7.9 
 44.3   percent or greater in 1997.  Property that qualifies for the 
 44.4   exemption under this subdivision is limited to no more than two 
 44.5   contiguous parcels and structures that do not exceed in the 
 44.6   aggregate 40,000 square feet.  This exemption expires after 
 44.7   taxes payable in 2005 2011. 
 44.8      Sec. 5.  Minnesota Statutes 2002, section 272.02, 
 44.9   subdivision 47, is amended to read: 
 44.10     Subd. 47.  [POULTRY LITTER BIOMASS GENERATION FACILITY; 
 44.11  PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 
 44.12  attached machinery and other personal property which is part of 
 44.13  an electrical generating facility that meets the requirements of 
 44.14  this subdivision is exempt.  At the time of construction, the 
 44.15  facility must: 
 44.16     (1) be designed to utilize poultry litter as a primary fuel 
 44.17  source; and 
 44.18     (2) be constructed for the purpose of generating power at 
 44.19  the facility that will be sold pursuant to a contract approved 
 44.20  by the public utilities commission in accordance with the 
 44.21  biomass mandate imposed under section 216B.2424. 
 44.22     Construction of the facility must be commenced after 
 44.23  January 1, 2000 2003, and before December 31, 2002 2003.  
 44.24  Property eligible for this exemption does not include electric 
 44.25  transmission lines and interconnections or gas pipelines and 
 44.26  interconnections appurtenant to the property or the facility. 
 44.27     [EFFECTIVE DATE.] This section is effective for taxes 
 44.28  levied in 2004, payable in 2005, and thereafter. 
 44.29     Sec. 6.  Minnesota Statutes 2002, section 272.02, 
 44.30  subdivision 53, is amended to read: 
 44.31     Subd. 53.  [ELECTRIC GENERATION FACILITY; PERSONAL 
 44.32  PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
 44.33  machinery and other personal property which is part of a 3.2 
 44.34  megawatt run-of-the-river hydroelectric generation facility and 
 44.35  that meets the requirements of this subdivision is exempt.  At 
 44.36  the time of construction, the facility must: 
 45.1      (1) utilize two turbine generators at a dam site existing 
 45.2   on March 31, 1994; 
 45.3      (2) be located on publicly owned land and within 1,500 feet 
 45.4   of a 13.8 kilovolt distribution substation; and 
 45.5      (3) be eligible to receive a renewable energy production 
 45.6   incentive payment under section 216C.41. 
 45.7      Construction of the facility must be commenced after 
 45.8   January 1, 2002, and before January 1, 2004 2005.  Property 
 45.9   eligible for this exemption does not include electric 
 45.10  transmission lines and interconnections or gas pipelines and 
 45.11  interconnections appurtenant to the property or the facility. 
 45.12     Sec. 7.  Minnesota Statutes 2002, section 272.02, is 
 45.13  amended by adding a subdivision to read: 
 45.14     Subd. 56.  [ELECTRIC GENERATION FACILITY PERSONAL 
 45.15  PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
 45.16  attached machinery and other personal property which is part of 
 45.17  a combined-cycle combustion-turbine electric generation facility 
 45.18  that exceeds 150 megawatts of installed capacity and that meets 
 45.19  the requirements of this subdivision is exempt.  At the time of 
 45.20  construction, the facility must: 
 45.21     (1) utilize natural gas as a primary fuel; 
 45.22     (2) be owned by an electric generation and transmission 
 45.23  cooperative; 
 45.24     (3) be located within ten miles of parallel existing 
 45.25  24-inch and 30-inch natural gas pipelines and a 345-kilovolt 
 45.26  high-voltage electric transmission line; and 
 45.27     (4) be designed to provide intermediate energy and 
 45.28  ancillary services, and have received a certificate of need 
 45.29  under section 216B.243, demonstrating demand for its capacity. 
 45.30     (b) Construction of the facility must be commenced after 
 45.31  January 1, 2004, and before January 1, 2009.  Property eligible 
 45.32  for this exemption does not include electric transmission lines 
 45.33  and interconnections or gas pipelines and interconnections 
 45.34  appurtenant to the property or the facility. 
 45.35     (c) The exemption under this section will take effect only 
 45.36  if the owner of the facility enters into agreements with the 
 46.1   governing bodies of the county and the city or town in which the 
 46.2   facility is located.  The agreements may include a requirement 
 46.3   that the facility must pay a host fee to compensate the county 
 46.4   and city or town for hosting the facility. 
 46.5      [EFFECTIVE DATE.] This section is effective for taxes 
 46.6   levied in 2005, payable in 2006, and thereafter. 
 46.7      Sec. 8.  Minnesota Statutes 2002, section 272.02, is 
 46.8   amended by adding a subdivision to read: 
 46.9      Subd. 57.  [ELECTRIC GENERATION FACILITY PERSONAL 
 46.10  PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
 46.11  attached machinery and other personal property which is part of 
 46.12  a combined-cycle combustion-turbine electric generation facility 
 46.13  that exceeds 550 megawatts of installed capacity and that meets 
 46.14  the requirements of this subdivision is exempt.  At the time of 
 46.15  construction, the facility must: 
 46.16     (1) be designed to utilize natural gas as a primary fuel; 
 46.17     (2) not be owned by a public utility as defined in section 
 46.18  216B.02, subdivision 4; 
 46.19     (3) be located within five miles of an existing natural gas 
 46.20  pipeline and within four miles of an existing electrical 
 46.21  transmission substation; and 
 46.22     (4) be designed to provide energy and ancillary services 
 46.23  and have received a certificate of need under section 216B.243. 
 46.24     (b) Construction of the facility must be commenced after 
 46.25  January 1, 2004, and before January 1, 2007.  Property eligible 
 46.26  for this exemption does not include electric transmission lines 
 46.27  and interconnections or gas pipelines and interconnections 
 46.28  appurtenant to the property or the facility. 
 46.29     [EFFECTIVE DATE.] This section is effective for assessment 
 46.30  year 2005, taxes payable in 2006, and thereafter. 
 46.31     Sec. 9.  Minnesota Statutes 2002, section 273.01, is 
 46.32  amended to read: 
 46.33     273.01 [LISTING AND ASSESSMENT, TIME.] 
 46.34     All real property subject to taxation shall be listed and 
 46.35  at least one-fourth one-fifth of the parcels listed shall be 
 46.36  appraised each year with reference to their value on January 2 
 47.1   preceding the assessment so that each parcel shall be 
 47.2   reappraised at maximum intervals of four five years.  All real 
 47.3   property becoming taxable in any year shall be listed with 
 47.4   reference to its value on January 2 of that year.  Except as 
 47.5   provided in this section and section 274.01, subdivision 1, all 
 47.6   real property assessments shall be completed two weeks prior to 
 47.7   the date scheduled for the local board of review or 
 47.8   equalization.  No changes in valuation or classification which 
 47.9   are intended to correct errors in judgment by the county 
 47.10  assessor may be made by the county assessor after the board of 
 47.11  review or the county board of equalization has adjourned; 
 47.12  however, corrections of errors that are merely clerical in 
 47.13  nature or changes that extend homestead treatment to property 
 47.14  are permitted after adjournment until the tax extension date for 
 47.15  that assessment year.  Any changes made by the assessor after 
 47.16  adjournment must be fully documented and maintained in a file in 
 47.17  the assessor's office and shall be available for review by any 
 47.18  person.  A copy of any changes made during this period shall be 
 47.19  sent to the county board no later than December 31 of the 
 47.20  assessment year.  In the event a valuation and classification is 
 47.21  not placed on any real property by the dates scheduled for the 
 47.22  local board of review or equalization the valuation and 
 47.23  classification determined in the preceding assessment shall be 
 47.24  continued in effect and the provisions of section 273.13 shall, 
 47.25  in such case, not be applicable, except with respect to real 
 47.26  estate which has been constructed since the previous 
 47.27  assessment.  Real property containing iron ore, the fee to which 
 47.28  is owned by the state of Minnesota, shall, if leased by the 
 47.29  state after January 2 in any year, be subject to assessment for 
 47.30  that year on the value of any iron ore removed under said lease 
 47.31  prior to January 2 of the following year.  Personal property 
 47.32  subject to taxation shall be listed and assessed annually with 
 47.33  reference to its value on January 2; and, if acquired on that 
 47.34  day, shall be listed by or for the person acquiring it.  
 47.35     [EFFECTIVE DATE.] This section is effective for assessments 
 47.36  on or after January 2, 2004. 
 48.1      Sec. 10.  Minnesota Statutes 2002, section 273.08, is 
 48.2   amended to read: 
 48.3      273.08 [ASSESSOR'S DUTIES.] 
 48.4      The assessor shall actually view, and determine the market 
 48.5   value of each tract or lot of real property listed for taxation, 
 48.6   including the value of all improvements and structures thereon, 
 48.7   at maximum intervals of four five years and shall enter the 
 48.8   value opposite each description. 
 48.9      [EFFECTIVE DATE.] This section is effective for assessments 
 48.10  on or after January 2, 2004. 
 48.11     Sec. 11.  Minnesota Statutes 2002, section 273.11, is 
 48.12  amended by adding a subdivision to read: 
 48.13     Subd. 21.  [VALUATION EXCLUSION FOR LEAD PAINT 
 48.14  REMOVAL.] Owners of property classified as class 1a, 1b, 1c, 2a, 
 48.15  4b, or 4bb under section 273.13 may apply for a valuation 
 48.16  exclusion under this subdivision, provided that the property is 
 48.17  located in a city which has authorized valuation exclusions 
 48.18  under this subdivision.  A city which authorizes valuation 
 48.19  exclusions under this subdivision must establish guidelines for 
 48.20  qualifying lead paint removal projects and must designate an 
 48.21  agency within the city to issue certificates of completion of 
 48.22  qualifying projects. 
 48.23     The property owner must obtain a certificate from the city 
 48.24  stating that the project has been completed and the cost 
 48.25  incurred by the owner in completing the project.  Only projects 
 48.26  originating after April 1, 2003, may qualify for exclusion under 
 48.27  this subdivision.  The property owner shall apply for a 
 48.28  valuation exclusion to the assessor on a form prescribed by the 
 48.29  assessor. 
 48.30     A qualifying property is eligible for a valuation exclusion 
 48.31  equal to 50 percent of the actual costs incurred, to a maximum 
 48.32  exclusion of $10,000, for a period of five years.  The valuation 
 48.33  exclusion shall terminate upon the sale of the property.  If a 
 48.34  property owner applies for exclusion under this subdivision 
 48.35  between January 1 and June 30 of any year, the exclusion shall 
 48.36  first apply for taxes payable in the following year.  If a 
 49.1   property owner applies for exclusion under this subdivision 
 49.2   between July 1 and December 31 of any year, the exclusion shall 
 49.3   first apply for taxes payable in the second following year. 
 49.4      [EFFECTIVE DATE.] This section is effective for taxes 
 49.5   payable in 2004 and subsequent years. 
 49.6      Sec. 12.  Minnesota Statutes 2002, section 273.11, is 
 49.7   amended by adding a subdivision to read: 
 49.8      Subd. 22.  [VALUATION OF CLASS 4D CERTIFIED PROPERTY.] In 
 49.9   determining the market value of class 4d rental property 
 49.10  certified under section 462A.071, the assessor shall reduce the 
 49.11  value of the property by its restricted use value.  "Restricted 
 49.12  use value" is the amount of market value reduction that results 
 49.13  from the restrictions on uses that qualify the property for 
 49.14  certification as class 4d under section 273.13, subdivision 25, 
 49.15  paragraph (e).  The assessor shall determine the restricted use 
 49.16  value of the property using guidelines set by the commissioner 
 49.17  of revenue. 
 49.18     [EFFECTIVE DATE.] This section is effective for taxes 
 49.19  levied in 2003, payable in 2004, and thereafter. 
 49.20     Sec. 13.  Minnesota Statutes 2002, section 273.11, is 
 49.21  amended by adding a subdivision to read: 
 49.22     Subd. 23.  [VALUATION EXCLUSION FOR SEWAGE TREATMENT SYSTEM 
 49.23  IMPROVEMENTS.] Owners of property classified as class 1a, 1b, 
 49.24  1c, 2a, 4b, 4bb, or noncommercial 4c under section 273.13 may 
 49.25  apply for a valuation exclusion under this subdivision, provided 
 49.26  that the following conditions are met: 
 49.27     (1) a notice of noncompliance has been issued by a licensed 
 49.28  compliance inspector with regard to the individual sewage 
 49.29  treatment system serving the property under section 115.55, 
 49.30  subdivision 5b; 
 49.31     (2) the owner of the property furnishes documentation to 
 49.32  the satisfaction of the assessor that the property's individual 
 49.33  sewage treatment system has been replaced or refurbished between 
 49.34  January 1, 2003, and December 31, 2007; and 
 49.35     (3) a certificate of compliance has been issued for the new 
 49.36  or refurbished system under section 115.55, subdivision 5. 
 50.1      Application shall be made to the assessor on a form 
 50.2   prescribed by the assessor.  Property meeting the requirements 
 50.3   above shall be eligible for a valuation exclusion equal to 50 
 50.4   percent of the actual costs incurred, to a maximum exclusion of 
 50.5   $7,500, for a period of five years.  The valuation exclusion 
 50.6   shall terminate upon the sale of the property.  If a property 
 50.7   owner applies for exclusion under this subdivision between 
 50.8   January 1 and June 30 of any year, the exclusion shall first 
 50.9   apply for taxes payable in the following year.  If a property 
 50.10  owner applies for exclusion under this subdivision between July 
 50.11  1 and December 31 of any year, the exclusion shall first apply 
 50.12  for taxes payable in the second following year. 
 50.13     [EFFECTIVE DATE.] This section is effective for taxes 
 50.14  payable in 2004 and subsequent years. 
 50.15     Sec. 14.  [273.1115] [HOMESTEAD RESORTS; VALUATION AND 
 50.16  DEFERMENT.] 
 50.17     Subdivision 1.  [REQUIREMENTS.] Real property qualifying 
 50.18  for classification as class 1c under section 273.13, subdivision 
 50.19  22, paragraph (c), is entitled to valuation and tax deferment 
 50.20  under this section, provided that if part of a resort is not 
 50.21  classified as class 1c, only that portion of the value of the 
 50.22  property that is classified as class 1c property qualifies under 
 50.23  this section. 
 50.24     Subd. 2.  [DETERMINATION OF VALUE.] Upon timely application 
 50.25  by the owner, as provided in subdivision 4, the value of real 
 50.26  property described in subdivision 1 must be determined by the 
 50.27  assessor solely with reference to its classification value as 
 50.28  class 1c property, notwithstanding sections 272.03, subdivision 
 50.29  8, and 273.11.  The owner must furnish information on the income 
 50.30  generated by the property and other information required by the 
 50.31  assessor to determine the value of the property.  The assessor 
 50.32  shall not consider any added values resulting from other factors.
 50.33     Subd. 3.  [SEPARATE DETERMINATION OF MARKET VALUE AND TAX.] 
 50.34  The assessor shall, however, make a separate determination of 
 50.35  the market value of the real estate.  The assessor shall record 
 50.36  on the property assessment records the tax based upon the 
 51.1   appropriate local tax rate applicable to the property in the 
 51.2   taxing district. 
 51.3      Subd. 4.  [APPLICATION.] Application for deferment of taxes 
 51.4   and assessment under this section must be filed by May 1 of the 
 51.5   year prior to the year in which the taxes are payable.  The 
 51.6   application must be filed with the assessor of the taxing 
 51.7   district in which the real property is located on a form 
 51.8   prescribed by the commissioner of revenue.  The assessor may 
 51.9   require proof by affidavit or otherwise that the property 
 51.10  qualifies under subdivision 1.  An application approved by the 
 51.11  assessor continues in effect for subsequent years until the 
 51.12  property no longer qualifies under subdivision 1. 
 51.13     Subd. 5.  [ADDITIONAL TAXES.] When real property valued and 
 51.14  assessed under this section no longer qualifies under 
 51.15  subdivision 1, the portion no longer qualifying is subject to 
 51.16  additional taxes, in the amount equal to the difference between 
 51.17  the taxes determined in accordance with subdivision 2, and the 
 51.18  amount determined under subdivision 3, provided, however, that 
 51.19  the amount determined under subdivision 3 must not be greater 
 51.20  than it would have been had the actual bona fide sale price of 
 51.21  the real property at an arms length transaction been used in 
 51.22  lieu of the market value determined under subdivision 3.  The 
 51.23  additional taxes must be extended against the property on the 
 51.24  tax list for the current year, except that no interest or 
 51.25  penalties may be levied on the additional taxes if timely paid, 
 51.26  and except that the additional taxes must only be levied with 
 51.27  respect to the last seven years that the property has been 
 51.28  valued and assessed under this section. 
 51.29     Subd. 6.  [LIEN.] The tax imposed by this section is a lien 
 51.30  on the property assessed to the same extent and for the same 
 51.31  duration as other taxes imposed on property within this state.  
 51.32  The tax must be annually extended by the county auditor and when 
 51.33  payable must be collected and distributed in the manner provided 
 51.34  by law for the collection and distribution of other property 
 51.35  taxes. 
 51.36     Subd. 7.  [SPECIAL LOCAL ASSESSMENTS.] The payment of 
 52.1   special local assessments levied after June 30, 2003, for 
 52.2   improvements made to any real property described in subdivision 
 52.3   2, together with the interest thereon must, on timely 
 52.4   application under subdivision 4, be deferred as long as the 
 52.5   property qualifies under subdivision 1.  If special assessments 
 52.6   against the property have been deferred under this subdivision, 
 52.7   the governmental unit shall file with the county recorder in the 
 52.8   county in which the property is located a certificate containing 
 52.9   the legal description of the affected property and of the amount 
 52.10  deferred.  When the property no longer qualifies under 
 52.11  subdivision 1, all deferred special assessments plus interest 
 52.12  are payable in equal installments spread over the time remaining 
 52.13  until the last maturity date of the bonds issued to finance the 
 52.14  improvement for which the assessments were levied.  If the bonds 
 52.15  have matured, the deferred special assessments plus interest are 
 52.16  payable within 90 days.  The provisions of section 429.061, 
 52.17  subdivision 2, apply to the collection of these installments.  
 52.18  Penalty must not be levied on the special assessments if timely 
 52.19  paid. 
 52.20     Subd. 8.  [CONTINUATION OF TAX TREATMENT UPON SALE.] When 
 52.21  real property qualifying under subdivision 1 is sold, no 
 52.22  additional taxes or deferred special assessments plus interest 
 52.23  may be extended against the property if: 
 52.24     (1) the property continues to qualify pursuant to 
 52.25  subdivision 1; and 
 52.26     (2) the new owner files an application for continued 
 52.27  deferment within 30 days after the sale. 
 52.28     Subd. 9.  [APPLICABILITY OF SPECIAL ASSESSMENT PROVISIONS.] 
 52.29  This section applies to special local assessments levied after 
 52.30  June 30, 2003, and payable in the years thereafter, but shall 
 52.31  not apply to any special assessments levied at any time by a 
 52.32  county or district court under the provisions of chapter 116A. 
 52.33     [EFFECTIVE DATE.] This section is effective for taxes 
 52.34  levied in 2003, payable in 2004, and thereafter.  For 
 52.35  applications for taxes payable in 2004 only, the application 
 52.36  deadline in subdivision 4 is extended to August 1, 2003. 
 53.1      Sec. 15.  Minnesota Statutes 2002, section 273.13, 
 53.2   subdivision 22, is amended to read: 
 53.3      Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
 53.4   23 and in paragraphs (b) and (c), real estate which is 
 53.5   residential and used for homestead purposes is class 1a.  In the 
 53.6   case of a duplex or triplex in which one of the units is used 
 53.7   for homestead purposes, the entire property is deemed to be used 
 53.8   for homestead purposes.  The market value of class 1a property 
 53.9   must be determined based upon the value of the house, garage, 
 53.10  and land.  
 53.11     The first $500,000 of market value of class 1a property has 
 53.12  a net class rate of one percent of its market value; and the 
 53.13  market value of class 1a property that exceeds $500,000 has a 
 53.14  class rate of 1.25 percent of its market value. 
 53.15     (b) Class 1b property includes homestead real estate or 
 53.16  homestead manufactured homes used for the purposes of a 
 53.17  homestead by 
 53.18     (1) any blind person who is blind as defined in section 
 53.19  256D.35, or the blind person and the blind person's spouse; or 
 53.20     (2) any person, hereinafter referred to as "veteran," who: 
 53.21     (i) served in the active military or naval service of the 
 53.22  United States; and 
 53.23     (ii) is entitled to compensation under the laws and 
 53.24  regulations of the United States for permanent and total 
 53.25  service-connected disability due to the loss, or loss of use, by 
 53.26  reason of amputation, ankylosis, progressive muscular 
 53.27  dystrophies, or paralysis, of both lower extremities, such as to 
 53.28  preclude motion without the aid of braces, crutches, canes, or a 
 53.29  wheelchair; and 
 53.30     (iii) has acquired a special housing unit with special 
 53.31  fixtures or movable facilities made necessary by the nature of 
 53.32  the veteran's disability, or the surviving spouse of the 
 53.33  deceased veteran for as long as the surviving spouse retains the 
 53.34  special housing unit as a homestead; or 
 53.35     (3) any person who: 
 53.36     (i) is permanently and totally disabled and; or 
 54.1      (ii) receives 90 percent or more of total household income, 
 54.2   as defined in section 290A.03, subdivision 5, from 
 54.3      (A) aid from any state as a result of that disability; or 
 54.4      (B) supplemental security income for the disabled; or 
 54.5      (C) workers' compensation based on a finding of total and 
 54.6   permanent disability; or 
 54.7      (D) social security disability, including the amount of a 
 54.8   disability insurance benefit which is converted to an old age 
 54.9   insurance benefit and any subsequent cost of living increases; 
 54.10  or 
 54.11     (E) aid under the federal Railroad Retirement Act of 1937, 
 54.12  United States Code Annotated, title 45, section 228b(a)5; or 
 54.13     (F) a pension from any local government retirement fund 
 54.14  located in the state of Minnesota as a result of that 
 54.15  disability; or 
 54.16     (G) pension, annuity, or other income paid as a result of 
 54.17  that disability from a private pension or disability plan, 
 54.18  including employer, employee, union, and insurance plans and 
 54.19     (iii) has household income as defined in section 290A.03, 
 54.20  subdivision 5, of $50,000 or less; or 
 54.21     (4) any person who is permanently and totally disabled and 
 54.22  whose household income as defined in section 290A.03, 
 54.23  subdivision 5, is 275 percent or less of the federal poverty 
 54.24  level. 
 54.25     Property is classified and assessed under clause (4) only 
 54.26  if the government agency or income-providing source certifies, 
 54.27  upon the request of the homestead occupant, that the homestead 
 54.28  occupant satisfies the disability requirements of this paragraph.
 54.29     Property is classified and assessed pursuant to clause (1) 
 54.30  only if the commissioner of economic security revenue certifies 
 54.31  to the assessor that the homestead occupant satisfies the 
 54.32  requirements of this paragraph.  
 54.33     Permanently and totally disabled for the purpose of this 
 54.34  subdivision means a condition which is permanent in nature and 
 54.35  totally incapacitates the person from working at an occupation 
 54.36  which brings the person an income.  The first $32,000 market 
 55.1   value of class 1b property has a net class rate of .45 percent 
 55.2   of its market value.  The remaining market value of class 1b 
 55.3   property has a class rate using the rates for class 1a or class 
 55.4   2a property, whichever is appropriate, of similar market value.  
 55.5      (c) Class 1c property is commercial use real property that 
 55.6   abuts a lakeshore line and is devoted to temporary and seasonal 
 55.7   residential occupancy for recreational purposes but not devoted 
 55.8   to commercial purposes for more than 250 days in the year 
 55.9   preceding the year of assessment, and that includes a portion 
 55.10  used as a homestead by the owner, which includes a dwelling 
 55.11  occupied as a homestead by a shareholder of a corporation that 
 55.12  owns the resort or, a partner in a partnership that owns the 
 55.13  resort, or a member of a limited liability company that owns the 
 55.14  resort even if the title to the homestead is held by the 
 55.15  corporation or, partnership, or limited liability company.  For 
 55.16  purposes of this clause, property is devoted to a commercial 
 55.17  purpose on a specific day if any portion of the property, 
 55.18  excluding the portion used exclusively as a homestead, is used 
 55.19  for residential occupancy and a fee is charged for residential 
 55.20  occupancy.  The first $500,000 of market value of class 1c 
 55.21  property has a class rate of one percent, and the remaining 
 55.22  market value of class 1c property has a class rate of one 
 55.23  percent, with the following limitation:  the area of the 
 55.24  property must not exceed 100 feet of lakeshore footage for each 
 55.25  cabin or campsite located on the property up to a total of 800 
 55.26  feet and 500 feet in depth, measured away from the lakeshore.  
 55.27  If any portion of the class 1c resort property is classified as 
 55.28  class 4c under subdivision 25, the entire property must meet the 
 55.29  requirements of subdivision 25, paragraph (d), clause (1), to 
 55.30  qualify for class 1c treatment under this paragraph. 
 55.31     (d) Class 1d property includes structures that meet all of 
 55.32  the following criteria: 
 55.33     (1) the structure is located on property that is classified 
 55.34  as agricultural property under section 273.13, subdivision 23; 
 55.35     (2) the structure is occupied exclusively by seasonal farm 
 55.36  workers during the time when they work on that farm, and the 
 56.1   occupants are not charged rent for the privilege of occupying 
 56.2   the property, provided that use of the structure for storage of 
 56.3   farm equipment and produce does not disqualify the property from 
 56.4   classification under this paragraph; 
 56.5      (3) the structure meets all applicable health and safety 
 56.6   requirements for the appropriate season; and 
 56.7      (4) the structure is not salable as residential property 
 56.8   because it does not comply with local ordinances relating to 
 56.9   location in relation to streets or roads. 
 56.10     The market value of class 1d property has the same class 
 56.11  rates as class 1a property under paragraph (a). 
 56.12     [EFFECTIVE DATE.] This section is effective for property 
 56.13  taxes levied in 2003, payable in 2004, and thereafter, except 
 56.14  that the amendments to paragraph (b) are effective for taxes 
 56.15  payable in 2005 and thereafter. 
 56.16     Sec. 16.  Minnesota Statutes 2002, section 273.1315, is 
 56.17  amended to read: 
 56.18     273.1315 [CERTIFICATION OF 1B PROPERTY.] 
 56.19     Any property owner seeking classification and assessment of 
 56.20  the owner's homestead as class 1b property pursuant to section 
 56.21  273.13, subdivision 22, paragraph (b), clause (2) or (3), shall 
 56.22  file with the commissioner of revenue for each assessment year a 
 56.23  1b homestead declaration, on a form prescribed by the 
 56.24  commissioner.  The declaration shall contain the following 
 56.25  information:  
 56.26     (a) the information necessary to verify that the property 
 56.27  owner or the owner's spouse satisfies the requirements of 
 56.28  section 273.13, subdivision 22, paragraph (b), clause (2) or 
 56.29  (3), for 1b classification; and 
 56.30     (b) the property owner's household income, as defined in 
 56.31  section 290A.03, for the previous calendar year; and 
 56.32     (c) any additional information prescribed by the 
 56.33  commissioner.  
 56.34     The declaration shall must be filed on or before March 
 56.35  October 1 of each year to be effective for property taxes 
 56.36  payable during the succeeding calendar year.  The declaration 
 57.1   and any supplementary information received from the property 
 57.2   owner pursuant to this section shall be subject to chapter 
 57.3   270B.  If approved by the commissioner, the declaration remains 
 57.4   in effect until the property no longer qualifies under section 
 57.5   273.13, subdivision 22, paragraph (b).  Failure to notify the 
 57.6   commissioner within 30 days that the property no longer 
 57.7   qualifies under that paragraph because of a sale, change in 
 57.8   occupancy, or change in the status or condition of an occupant 
 57.9   shall result in the penalty provided in section 273.124, 
 57.10  subdivision 13, computed on the basis of the class 1b benefits 
 57.11  for the property, and the property shall lose its current class 
 57.12  1b classification. 
 57.13     The commissioner shall provide to the assessor on or before 
 57.14  April November 1 a listing of the parcels of property qualifying 
 57.15  for 1b classification.  
 57.16     [EFFECTIVE DATE.] This section is effective for taxes 
 57.17  payable in 2005 and thereafter. 
 57.18     Sec. 17.  Minnesota Statutes 2002, section 275.025, 
 57.19  subdivision 4, is amended to read: 
 57.20     Subd. 4.  [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 
 57.21  The state general tax must be distributed among the counties by 
 57.22  applying a uniform rate to each county's commercial-industrial 
 57.23  tax capacity and its seasonal recreational tax capacity.  Within 
 57.24  each county, the tax must be levied by applying a uniform rate 
 57.25  against commercial-industrial tax capacity and seasonal 
 57.26  recreational tax capacity.  By November 1 October 1 each year, 
 57.27  the commissioner of revenue shall certify the state general levy 
 57.28  rate to each county auditor. 
 57.29     Sec. 18.  Minnesota Statutes 2002, section 275.065, 
 57.30  subdivision 1, is amended to read: 
 57.31     Subdivision 1.  [PROPOSED LEVY.] (a) Notwithstanding any 
 57.32  law or charter to the contrary, on or before September 15 5, 
 57.33  each taxing authority, other than a school district, shall adopt 
 57.34  a proposed budget and shall certify to the county auditor the 
 57.35  proposed or, in the case of a town, the final property tax levy 
 57.36  for taxes payable in the following year. 
 58.1      (b) On or before September 30 20, each school district 
 58.2   shall certify to the county auditor the proposed property tax 
 58.3   levy for taxes payable in the following year.  The school 
 58.4   district shall certify the proposed levy as: 
 58.5      (1) the state determined school levy amount as prescribed 
 58.6   under section 126C.13, subdivision 2; 
 58.7      (2) voter approved referendum and debt levies; and 
 58.8      (3) the sum of the remaining school levies, or the maximum 
 58.9   levy limitation certified by the commissioner of children, 
 58.10  families, and learning according to section 126C.48, subdivision 
 58.11  1, less the amounts levied under clauses (1) and (2). 
 58.12     (c) If the board of estimate and taxation or any similar 
 58.13  board that establishes maximum tax levies for taxing 
 58.14  jurisdictions within a first class city certifies the maximum 
 58.15  property tax levies for funds under its jurisdiction by charter 
 58.16  to the county auditor by September 15 5, the city shall be 
 58.17  deemed to have certified its levies for those taxing 
 58.18  jurisdictions. 
 58.19     (d) For purposes of this section, "taxing authority" 
 58.20  includes all home rule and statutory cities, towns, counties, 
 58.21  school districts, and special taxing districts as defined in 
 58.22  section 275.066.  Intermediate school districts that levy a tax 
 58.23  under chapter 124 or 136D, joint powers boards established under 
 58.24  sections 123A.44 to 123A.446, and common school districts No. 
 58.25  323, Franconia, and No. 815, Prinsburg, are also special taxing 
 58.26  districts for purposes of this section.  
 58.27     Sec. 19.  Minnesota Statutes 2002, section 275.065, 
 58.28  subdivision 1a, is amended to read: 
 58.29     Subd. 1a.  [OVERLAPPING JURISDICTIONS.] In the case of a 
 58.30  taxing authority lying in two or more counties, the home county 
 58.31  auditor shall certify the proposed levy and the proposed local 
 58.32  tax rate to the other county auditor by September 20 10.  The 
 58.33  home county auditor must estimate the levy or rate in preparing 
 58.34  the notices required in subdivision 3, if the other county has 
 58.35  not certified the appropriate information.  If requested by the 
 58.36  home county auditor, the other county auditor must furnish an 
 59.1   estimate to the home county auditor. 
 59.2      Sec. 20.  Minnesota Statutes 2002, section 275.065, 
 59.3   subdivision 3, is amended to read: 
 59.4      Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 59.5   county auditor shall prepare and the county treasurer shall 
 59.6   deliver after November 10 October 17 and on or before November 
 59.7   24 October 31 each year, by first class mail to each taxpayer at 
 59.8   the address listed on the county's current year's assessment 
 59.9   roll, a notice of proposed property taxes.  If the information 
 59.10  necessary to provide these notices is not available by the time 
 59.11  required to mail the notice by October 31, they must be mailed 
 59.12  no later than November 24. 
 59.13     If the county provides access to parcel-specific property 
 59.14  tax information on its Web site, it may elect to provide the 
 59.15  information required under this subdivision by that means 
 59.16  instead of mailing the notices to taxpayers.  If the county 
 59.17  elects to provide the information through the Web site, it must 
 59.18  provide a notice in its newsletter or by publication in a 
 59.19  newspaper described in subdivision 5a that any taxpayer may 
 59.20  contact the county and request a mailed notice, which must be 
 59.21  mailed within ten days of the receipt of the request.  Beginning 
 59.22  in 2004, information regarding the taxpayer's option to request 
 59.23  a mailed notice must be included with the property tax statement.
 59.24     (b) The commissioner of revenue shall prescribe the form of 
 59.25  the notice. 
 59.26     (c) The notice must inform taxpayers that it contains the 
 59.27  amount of property taxes each taxing authority proposes to 
 59.28  collect for taxes payable the following year.  In the case of a 
 59.29  town, or in the case of the state general tax, the final tax 
 59.30  amount will be its proposed tax.  In the case of taxing 
 59.31  authorities required to hold a public meeting under subdivision 
 59.32  6, the notice must clearly state that each taxing authority, 
 59.33  including regional library districts established under section 
 59.34  134.201, and including the metropolitan taxing districts as 
 59.35  defined in paragraph (i), but excluding all other special taxing 
 59.36  districts and towns, will hold a public meeting to receive 
 60.1   public testimony on the proposed budget and proposed or final 
 60.2   property tax levy, or, in case of a school district, on the 
 60.3   current budget and proposed property tax levy.  It must clearly 
 60.4   state the time and place of each taxing authority's meeting, a 
 60.5   telephone number for the taxing authority that taxpayers may 
 60.6   call if they have questions related to the notice, and an 
 60.7   address where comments will be received by mail.  
 60.8      (d) The notice must state for each parcel: 
 60.9      (1) the market value of the property as determined under 
 60.10  section 273.11, and used for computing property taxes payable in 
 60.11  the following year and for taxes payable in the current year as 
 60.12  each appears in the records of the county assessor on November 1 
 60.13  October 10 of the current year; and, in the case of residential 
 60.14  property, whether the property is classified as homestead or 
 60.15  nonhomestead.  The notice must clearly inform taxpayers of the 
 60.16  years to which the market values apply and that the values are 
 60.17  final values; 
 60.18     (2) the items listed below, shown separately by county, 
 60.19  city or town, and state general tax, net of the residential and 
 60.20  agricultural homestead credit under section 273.1384, voter 
 60.21  approved school levy, other local school levy, and the sum of 
 60.22  the special taxing districts, and as a total of all taxing 
 60.23  authorities:  
 60.24     (i) the actual tax for taxes payable in the current year; 
 60.25     (ii) the tax change due to spending factors, defined as the 
 60.26  proposed tax minus the constant spending tax amount; 
 60.27     (iii) the tax change due to other factors, defined as the 
 60.28  constant spending tax amount minus the actual current year tax; 
 60.29  and 
 60.30     (iv) (ii) the proposed tax amount. 
 60.31     If the county levy under clause (2) includes an amount for 
 60.32  a lake improvement district as defined under sections 103B.501 
 60.33  to 103B.581, the amount attributable for that purpose must be 
 60.34  separately stated from the remaining county levy amount.  
 60.35     In the case of a town or the state general tax, the final 
 60.36  tax shall also be its proposed tax unless the town changes its 
 61.1   levy at a special town meeting under section 365.52.  If a 
 61.2   school district has certified under section 126C.17, subdivision 
 61.3   9, that a referendum will be held in the school district at the 
 61.4   November general election, the county auditor must note next to 
 61.5   the school district's proposed amount that a referendum is 
 61.6   pending and that, if approved by the voters, the tax amount may 
 61.7   be higher than shown on the notice.  In the case of the city of 
 61.8   Minneapolis, the levy for the Minneapolis library board and the 
 61.9   levy for Minneapolis park and recreation shall be listed 
 61.10  separately from the remaining amount of the city's levy.  In the 
 61.11  case of the city of St. Paul, the levy for the St. Paul library 
 61.12  agency must be listed separately from the remaining amount of 
 61.13  the city's levy.  In the case of Ramsey county, any amount 
 61.14  levied under section 134.07 must be listed separately from the 
 61.15  remaining amount of the county's levy.  In the case of a parcel 
 61.16  where tax increment or the fiscal disparities areawide tax under 
 61.17  chapter 276A or 473F applies, the proposed tax levy on the 
 61.18  captured value or the proposed tax levy on the tax capacity 
 61.19  subject to the areawide tax must each be stated separately and 
 61.20  not included in the sum of the special taxing districts; and 
 61.21     (3) the increase or decrease between the total taxes 
 61.22  payable in the current year and the total proposed taxes, 
 61.23  expressed as a percentage. 
 61.24     For purposes of this section, the amount of the tax on 
 61.25  homesteads qualifying under the senior citizens' property tax 
 61.26  deferral program under chapter 290B is the total amount of 
 61.27  property tax before subtraction of the deferred property tax 
 61.28  amount. 
 61.29     (e) The notice must clearly state that the proposed or 
 61.30  final taxes do not include the following: 
 61.31     (1) special assessments; 
 61.32     (2) levies approved by the voters after the date the 
 61.33  proposed taxes are certified, including bond referenda, school 
 61.34  district levy referenda, and levy limit increase referenda; 
 61.35     (3) amounts necessary to pay cleanup or other costs due to 
 61.36  a natural disaster occurring after the date the proposed taxes 
 62.1   are certified; 
 62.2      (4) amounts necessary to pay tort judgments against the 
 62.3   taxing authority that become final after the date the proposed 
 62.4   taxes are certified; and 
 62.5      (5) the contamination tax imposed on properties which 
 62.6   received market value reductions for contamination. 
 62.7      (f) Except as provided in subdivision 7, failure of the 
 62.8   county auditor to prepare or the county treasurer to deliver the 
 62.9   notice as required in this section does not invalidate the 
 62.10  proposed or final tax levy or the taxes payable pursuant to the 
 62.11  tax levy. 
 62.12     (g) If the notice the taxpayer receives under this section 
 62.13  lists the property as nonhomestead, and satisfactory 
 62.14  documentation is provided to the county assessor by the 
 62.15  applicable deadline, and the property qualifies for the 
 62.16  homestead classification in that assessment year, the assessor 
 62.17  shall reclassify the property to homestead for taxes payable in 
 62.18  the following year. 
 62.19     (h) In the case of class 4 residential property used as a 
 62.20  residence for lease or rental periods of 30 days or more, the 
 62.21  taxpayer must either: 
 62.22     (1) mail or deliver a copy of the notice of proposed 
 62.23  property taxes to each tenant, renter, or lessee; or 
 62.24     (2) post a copy of the notice in a conspicuous place on the 
 62.25  premises of the property.  
 62.26     The notice must be mailed or posted by the taxpayer by 
 62.27  November 27 3 or within three days of receipt of the notice, 
 62.28  whichever is later.  A taxpayer may notify the county treasurer 
 62.29  of the address of the taxpayer, agent, caretaker, or manager of 
 62.30  the premises to which the notice must be mailed in order to 
 62.31  fulfill the requirements of this paragraph. 
 62.32     (i) For purposes of this subdivision, subdivisions 5a and 
 62.33  6, "metropolitan special taxing districts" means the following 
 62.34  taxing districts in the seven-county metropolitan area that levy 
 62.35  a property tax for any of the specified purposes listed below: 
 62.36     (1) metropolitan council under section 473.132, 473.167, 
 63.1   473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 63.2      (2) metropolitan airports commission under section 473.667, 
 63.3   473.671, or 473.672; and 
 63.4      (3) metropolitan mosquito control commission under section 
 63.5   473.711. 
 63.6      For purposes of this section, any levies made by the 
 63.7   regional rail authorities in the county of Anoka, Carver, 
 63.8   Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 63.9   398A shall be included with the appropriate county's levy and 
 63.10  shall be discussed at that county's public hearing. 
 63.11     (j) If a statutory or home rule charter city or a town has 
 63.12  exercised the local levy option provided by section 473.388, 
 63.13  subdivision 7, it may include in the notice of its proposed 
 63.14  taxes the amount of its proposed taxes attributable to its 
 63.15  exercise of the option.  In the first year of the city or town's 
 63.16  exercise of this option, the statement shall include an estimate 
 63.17  of the reduction of the metropolitan council's tax on the parcel 
 63.18  due to exercise of that option.  The metropolitan council's levy 
 63.19  shall be adjusted accordingly. 
 63.20     Sec. 21.  [275.75] [CHARTER EXEMPTION FOR AID LOSS.] 
 63.21     Notwithstanding any other provision of a municipal charter 
 63.22  that limits ad valorem taxes to a lesser amount, or that would 
 63.23  require voter approval for any increase, the governing body of a 
 63.24  municipality may by resolution increase its levy for taxes 
 63.25  payable in 2004 and 2005 only by an amount equal to the 
 63.26  reduction in the amount of aid it is certified to receive under 
 63.27  sections 477A.011 to 477A.03 for that same payable year compared 
 63.28  to the amount certified in 2003.  
 63.29     Sec. 22.  Minnesota Statutes 2002, section 276.04, 
 63.30  subdivision 2, is amended to read: 
 63.31     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 63.32  shall provide for the printing of the tax statements.  The 
 63.33  commissioner of revenue shall prescribe the form of the property 
 63.34  tax statement and its contents.  The statement must contain a 
 63.35  tabulated statement of the dollar amount due to each taxing 
 63.36  authority and the amount of the state tax from the parcel of 
 64.1   real property for which a particular tax statement is prepared.  
 64.2   The dollar amounts attributable to the county, the state tax, 
 64.3   the voter approved school tax, the other local school tax, the 
 64.4   township or municipality, and the total of the metropolitan 
 64.5   special taxing districts as defined in section 275.065, 
 64.6   subdivision 3, paragraph (i), must be separately stated.  The 
 64.7   amounts due all other special taxing districts, if any, may be 
 64.8   aggregated.  If the county levy under this paragraph includes an 
 64.9   amount for a lake improvement district as defined under sections 
 64.10  103B.501 to 103B.581, the amount attributable for that purpose 
 64.11  must be separately stated from the remaining county levy 
 64.12  amount.  In the case of Ramsey county, if the county levy under 
 64.13  this paragraph includes an amount for public library service 
 64.14  under section 134.07, the amount attributable for that purpose 
 64.15  must be separately stated from the remaining county levy 
 64.16  amount.  The amount of the tax on homesteads qualifying under 
 64.17  the senior citizens' property tax deferral program under chapter 
 64.18  290B is the total amount of property tax before subtraction of 
 64.19  the deferred property tax amount.  The amount of the tax on 
 64.20  contamination value imposed under sections 270.91 to 270.98, if 
 64.21  any, must also be separately stated.  The dollar amounts, 
 64.22  including the dollar amount of any special assessments, may be 
 64.23  rounded to the nearest even whole dollar.  For purposes of this 
 64.24  section whole odd-numbered dollars may be adjusted to the next 
 64.25  higher even-numbered dollar.  The amount of market value 
 64.26  excluded under section 273.11, subdivision 16, if any, must also 
 64.27  be listed on the tax statement. 
 64.28     (b) The property tax statements for manufactured homes and 
 64.29  sectional structures taxed as personal property shall contain 
 64.30  the same information that is required on the tax statements for 
 64.31  real property.  
 64.32     (c) Real and personal property tax statements must contain 
 64.33  the following information in the order given in this paragraph.  
 64.34  The information must contain the current year tax information in 
 64.35  the right column with the corresponding information for the 
 64.36  previous year in a column on the left: 
 65.1      (1) the property's estimated market value under section 
 65.2   273.11, subdivision 1; 
 65.3      (2) the property's taxable market value after reductions 
 65.4   under section 273.11, subdivisions 1a and 16; 
 65.5      (3) the property's gross tax, calculated by adding the 
 65.6   property's total property tax to the sum of the aids enumerated 
 65.7   in clause (4); 
 65.8      (4) a total of the following aids: 
 65.9      (i) education aids payable under chapters 122A, 123A, 123B, 
 65.10  124D, 125A, 126C, and 127A; 
 65.11     (ii) local government aids for cities, towns, and counties 
 65.12  under chapter 477A; 
 65.13     (iii) disparity reduction aid under section 273.1398; and 
 65.14     (iv) homestead and agricultural credit aid under section 
 65.15  273.1398; 
 65.16     (5) for homestead residential and agricultural properties, 
 65.17  the credits under section 273.1384; 
 65.18     (6) any credits received under sections 273.119; 273.123; 
 65.19  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 65.20  473H.10, except that the amount of credit received under section 
 65.21  273.135 must be separately stated and identified as "taconite 
 65.22  tax relief"; and 
 65.23     (7) the net tax payable in the manner required in paragraph 
 65.24  (a). 
 65.25     (d) If the county uses envelopes for mailing property tax 
 65.26  statements and if the county agrees, a taxing district may 
 65.27  include a notice with the property tax statement notifying 
 65.28  taxpayers when the taxing district will begin its budget 
 65.29  deliberations for the current year, and encouraging taxpayers to 
 65.30  attend the hearings.  If the county allows notices to be 
 65.31  included in the envelope containing the property tax statement, 
 65.32  and if more than one taxing district relative to a given 
 65.33  property decides to include a notice with the tax statement, the 
 65.34  county treasurer or auditor must coordinate the process and may 
 65.35  combine the information on a single announcement.  
 65.36     The commissioner of revenue shall certify to the county 
 66.1   auditor the actual or estimated aids enumerated in clause (4) 
 66.2   that local governments will receive in the following year.  The 
 66.3   commissioner must certify this amount by January 1 of each year. 
 66.4      Sec. 23.  Minnesota Statutes 2002, section 278.03, 
 66.5   subdivision 1, is amended to read: 
 66.6      Subdivision 1.  [REAL PROPERTY.] In the case of real 
 66.7   property, If the proceedings instituted by the filing of the 
 66.8   petition have not been completed before the 16th day of May next 
 66.9   following the filing or, in the case of class 1c property or 
 66.10  class 4c resort property before the 16th day of July for taxes 
 66.11  payable in 2004 and 2005 only, the petitioner shall pay to the 
 66.12  county treasurer 50 percent of the tax levied for such year 
 66.13  against the property involved, unless permission to continue 
 66.14  prosecution of the petition without such payment is obtained as 
 66.15  herein provided. If the proceedings instituted by the filing of 
 66.16  the petition have not been completed by the next October 16, or, 
 66.17  in the case of class 1b agricultural homestead, class 2a 
 66.18  agricultural homestead, and class 2b(2) agricultural 
 66.19  nonhomestead property, November 16, the petitioner shall pay to 
 66.20  the county treasurer 50 percent of the unpaid balance of the 
 66.21  taxes levied for the year against the property involved if the 
 66.22  unpaid balance is $2,000 or less and 80 percent of the unpaid 
 66.23  balance if the unpaid balance is over $2,000, unless permission 
 66.24  to continue prosecution of the petition without payment is 
 66.25  obtained as herein provided.  The petitioner, upon ten days' 
 66.26  notice to the county attorney and to the county auditor, given 
 66.27  at least ten days prior to the 16th day of May or, in the case 
 66.28  of class 1c or class 4c resort property, the 16th day of July 
 66.29  for taxes payable in 2004 and 2005 only, or the 16th day of 
 66.30  October, or, in the case of class 1b agricultural homestead, 
 66.31  class 2a agricultural homestead, and class 2b(2) agricultural 
 66.32  nonhomestead property, the 16th day of November, may apply to 
 66.33  the court for permission to continue prosecution of the petition 
 66.34  without payment; and, if it is made to appear 
 66.35     (1) that the proposed review is to be taken in good faith; 
 66.36     (2) that there is probable cause to believe that the 
 67.1   property may be held exempt from the tax levied or that the tax 
 67.2   may be determined to be less than 50 percent of the amount 
 67.3   levied; and 
 67.4      (3) that it would work a hardship upon petitioner to pay 
 67.5   the taxes due, 
 67.6      the court may permit the petitioner to continue prosecution 
 67.7   of the petition without payment, or may fix a lesser amount to 
 67.8   be paid as a condition of continuing the prosecution of the 
 67.9   petition. 
 67.10     Failure to make payment of the amount required when due 
 67.11  shall operate automatically to dismiss the petition and all 
 67.12  proceedings thereunder unless the payment is waived by an order 
 67.13  of the court permitting the petitioner to continue prosecution 
 67.14  of the petition without payment.  The petition shall be 
 67.15  automatically reinstated upon payment of the entire tax plus 
 67.16  interest and penalty if the payment is made within one year of 
 67.17  the dismissal.  The county treasurer shall, upon request of the 
 67.18  petitioner, issue duplicate receipts for the tax payment, one of 
 67.19  which shall be filed by the petitioner in the proceeding. 
 67.20     Sec. 24.  Minnesota Statutes 2002, section 278.05, 
 67.21  subdivision 6, is amended to read: 
 67.22     Subd. 6.  [DISMISSAL OF PETITION; EXCLUSION OF CERTAIN 
 67.23  EVIDENCE.] (a) Information, including income and expense 
 67.24  figures, verified net rentable areas, and anticipated income and 
 67.25  expenses, for income-producing property must be provided to the 
 67.26  county assessor within 60 days after the petition has been filed 
 67.27  under this chapter no later than 60 days after the applicable 
 67.28  filing deadline contained in section 278.01, subdivision 1 or 
 67.29  4.  Failure to provide the information required in this 
 67.30  paragraph shall result in the dismissal of the petition, 
 67.31  unless (1) the failure to provide it was due to the 
 67.32  unavailability of the evidence at that the time that the 
 67.33  information was due, or (2) the petitioner was not informed in 
 67.34  writing by the assessor of the requirement to provide the 
 67.35  information. 
 67.36  If the petitioner proves that the assessor did not provide the 
 68.1   written information, the petitioner has an additional 30 days to 
 68.2   provide the information from the time the petitioner was 
 68.3   informed of the requirement to provide the information, 
 68.4   otherwise the petition shall be dismissed.  
 68.5      (b) Provided that the information as contained in paragraph 
 68.6   (a) is timely submitted to the county assessor, the county 
 68.7   assessor shall furnish the petitioner at least five days before 
 68.8   the hearing under this chapter with the property's appraisal, if 
 68.9   any, which will be presented to the court at the hearing.  The 
 68.10  petitioner shall furnish to the county assessor at least five 
 68.11  days before the hearing under this chapter with the property's 
 68.12  appraisal, if any, which will be presented to the court at the 
 68.13  hearing.  An appraisal of the petitioner's property done by or 
 68.14  for the county shall not be admissible as evidence if the county 
 68.15  assessor does not comply with the provisions in this paragraph.  
 68.16  The petition shall be dismissed if the petitioner does not 
 68.17  comply with the provisions in this paragraph. 
 68.18     [EFFECTIVE DATE.] This section is effective for petitions 
 68.19  filed on or after July 1, 2003. 
 68.20     Sec. 25.  Minnesota Statutes 2002, section 279.01, 
 68.21  subdivision 1, is amended to read: 
 68.22     Subdivision 1.  [DUE DATES; PENALTIES.] Except as provided 
 68.23  in subdivision 3 or 4 this section, on May 16 or 21 days after 
 68.24  the postmark date on the envelope containing the property tax 
 68.25  statement, whichever is later, a penalty shall accrue and 
 68.26  thereafter be charged upon all unpaid taxes on real estate on 
 68.27  the current lists in the hands of the county treasurer.  The 
 68.28  penalty shall be at a rate of two percent on homestead property 
 68.29  until May 31 and four percent on June 1.  The penalty on 
 68.30  nonhomestead property shall be at a rate of four percent until 
 68.31  May 31 and eight percent on June 1.  This penalty shall not 
 68.32  accrue until June 1 of each year, or 21 days after the postmark 
 68.33  date on the envelope containing the property tax statements, 
 68.34  whichever is later, on commercial use real property used for 
 68.35  seasonal residential recreational purposes and classified as 
 68.36  class 1c or 4c, and on other commercial use real property 
 69.1   classified as class 3a, provided that over 60 percent of the 
 69.2   gross income earned by the enterprise on the class 3a property 
 69.3   is earned during the months of May, June, July, and August.  Any 
 69.4   property owner of such class 3a property who pays the first half 
 69.5   of the tax due on the property after May 15 and before June 1, 
 69.6   or 21 days after the postmark date on the envelope containing 
 69.7   the property tax statement, whichever is later, shall attach an 
 69.8   affidavit to the payment attesting to compliance with the income 
 69.9   provision of this subdivision.  Thereafter, for both homestead 
 69.10  and nonhomestead property, on the first day of each month 
 69.11  beginning July 1, up to and including October 1 following, an 
 69.12  additional penalty of one percent for each month shall accrue 
 69.13  and be charged on all such unpaid taxes provided that if the due 
 69.14  date was extended beyond May 15 as the result of any delay in 
 69.15  mailing property tax statements no additional penalty shall 
 69.16  accrue if the tax is paid by the extended due date.  If the tax 
 69.17  is not paid by the extended due date, then all penalties that 
 69.18  would have accrued if the due date had been May 15 shall be 
 69.19  charged.  When the taxes against any tract or lot exceed $50, 
 69.20  one-half thereof may be paid prior to May 16 or 21 days after 
 69.21  the postmark date on the envelope containing the property tax 
 69.22  statement, whichever is later; and, if so paid, no penalty shall 
 69.23  attach; the remaining one-half shall be paid at any time prior 
 69.24  to October 16 following, without penalty; but, if not so paid, 
 69.25  then a penalty of two percent shall accrue thereon for homestead 
 69.26  property and a penalty of four percent on nonhomestead 
 69.27  property.  Thereafter, for homestead property, on the first day 
 69.28  of November an additional penalty of four percent shall accrue 
 69.29  and on the first day of December following, an additional 
 69.30  penalty of two percent shall accrue and be charged on all such 
 69.31  unpaid taxes.  Thereafter, for nonhomestead property, on the 
 69.32  first day of November and December following, an additional 
 69.33  penalty of four percent for each month shall accrue and be 
 69.34  charged on all such unpaid taxes.  If one-half of such taxes 
 69.35  shall not be paid prior to May 16 or 21 days after the postmark 
 69.36  date on the envelope containing the property tax statement, 
 70.1   whichever is later, the same may be paid at any time prior to 
 70.2   October 16, with accrued penalties to the date of payment added, 
 70.3   and thereupon no penalty shall attach to the remaining one-half 
 70.4   until October 16 following.  
 70.5      This section applies to payment of personal property taxes 
 70.6   assessed against improvements to leased property, except as 
 70.7   provided by section 277.01, subdivision 3. 
 70.8      A county may provide by resolution that in the case of a 
 70.9   property owner that has multiple tracts or parcels with 
 70.10  aggregate taxes exceeding $50, payments may be made in 
 70.11  installments as provided in this subdivision. 
 70.12     The county treasurer may accept payments of more or less 
 70.13  than the exact amount of a tax installment due.  If the accepted 
 70.14  payment is less than the amount due, payments must be applied 
 70.15  first to the penalty accrued for the year the payment is made.  
 70.16  Acceptance of partial payment of tax does not constitute a 
 70.17  waiver of the minimum payment required as a condition for filing 
 70.18  an appeal under section 278.03 or any other law, nor does it 
 70.19  affect the order of payment of delinquent taxes under section 
 70.20  280.39. 
 70.21     Sec. 26.  Minnesota Statutes 2002, section 279.01, is 
 70.22  amended by adding a subdivision to read: 
 70.23     Subd. 5.  [SEASONAL RESIDENTIAL RECREATIONAL PROPERTY USED 
 70.24  FOR COMMERCIAL PURPOSES.] For taxes payable in 2004 and 2005 
 70.25  only, in the case of class 1c property and class 4c seasonal 
 70.26  residential recreational property used for commercial purposes, 
 70.27  no penalties shall accrue to the first one-half property tax 
 70.28  payment as provided in this section if paid by July 15.  On July 
 70.29  16, a penalty shall accrue and thereafter be charged upon all 
 70.30  unpaid taxes.  On class 1c property the penalty is at a rate of 
 70.31  two percent until July 31, and four percent on August 1.  On 
 70.32  class 4c seasonal residential recreational property used for 
 70.33  commercial purposes, the penalty is four percent until July 31 
 70.34  and eight percent on August 1.  Thereafter, for both class 1c 
 70.35  and class 4c seasonal residential recreational property used for 
 70.36  commercial purposes, on the first day of September and on the 
 71.1   first day of October, an additional penalty of one percent shall 
 71.2   accrue and be charged on unpaid taxes.  The remaining one-half 
 71.3   property taxes must be paid and penalties accrue as provided in 
 71.4   subdivision 1. 
 71.5      Sec. 27.  Minnesota Statutes 2002, section 290A.03, 
 71.6   subdivision 8, is amended to read: 
 71.7      Subd. 8.  [CLAIMANT.] (a) "Claimant" means a person, other 
 71.8   than a dependent, as defined under sections 151 and 152 of the 
 71.9   Internal Revenue Code disregarding section 152(b)(3) of the 
 71.10  Internal Revenue Code, who filed a claim authorized by this 
 71.11  chapter and who was a resident of this state as provided in 
 71.12  chapter 290 during the calendar year for which the claim for 
 71.13  relief was filed. 
 71.14     (b) In the case of a claim relating to rent constituting 
 71.15  property taxes, the claimant shall have resided in a rented or 
 71.16  leased unit on which ad valorem taxes or payments made in lieu 
 71.17  of ad valorem taxes, including payments of special assessments 
 71.18  imposed in lieu of ad valorem taxes, are payable at some time 
 71.19  during the calendar year covered by the claim.  
 71.20     (c) "Claimant" shall not include a resident of a nursing 
 71.21  home, intermediate care facility, or long-term residential 
 71.22  facility, or a facility that accepts group residential housing 
 71.23  payments whose rent constituting property taxes is paid pursuant 
 71.24  to the supplemental security income program under title XVI of 
 71.25  the Social Security Act, the Minnesota supplemental aid program 
 71.26  under sections 256D.35 to 256D.54, the medical assistance 
 71.27  program pursuant to title XIX of the Social Security Act, or the 
 71.28  general assistance medical care program pursuant to section 
 71.29  256D.03, subdivision 3, or the group residential housing program 
 71.30  under chapter 256I. 
 71.31  If only a portion of the rent constituting property taxes is 
 71.32  paid by these programs, the resident shall be a claimant for 
 71.33  purposes of this chapter, but the refund calculated pursuant to 
 71.34  section 290A.04 shall be multiplied by a fraction, the numerator 
 71.35  of which is income as defined in subdivision 3, paragraphs (1) 
 71.36  and (2), reduced by the total amount of income from the above 
 72.1   sources other than vendor payments under the medical assistance 
 72.2   program or the general assistance medical care program and the 
 72.3   denominator of which is income as defined in subdivision 3, 
 72.4   paragraphs (1) and (2), plus vendor payments under the medical 
 72.5   assistance program or the general assistance medical care 
 72.6   program, to determine the allowable refund pursuant to this 
 72.7   chapter. 
 72.8      (d) Notwithstanding paragraph (c), if the claimant was a 
 72.9   resident of the nursing home, intermediate care facility or, 
 72.10  long-term residential facility, or facility for which the rent 
 72.11  was paid for the claimant by the group residential housing 
 72.12  program for only a portion of the calendar year covered by the 
 72.13  claim, the claimant may compute rent constituting property taxes 
 72.14  by disregarding the rent constituting property taxes from the 
 72.15  nursing home, intermediate care facility, or long-term 
 72.16  residential facility and use only that amount of rent 
 72.17  constituting property taxes or property taxes payable relating 
 72.18  to that portion of the year when the claimant was not in the 
 72.19  facility.  The claimant's household income is the income for the 
 72.20  entire calendar year covered by the claim.  
 72.21     (e) In the case of a claim for rent constituting property 
 72.22  taxes of a part-year Minnesota resident, the income and rental 
 72.23  reflected in this computation shall be for the period of 
 72.24  Minnesota residency only.  Any rental expenses paid which may be 
 72.25  reflected in arriving at federal adjusted gross income cannot be 
 72.26  utilized for this computation.  When two individuals of a 
 72.27  household are able to meet the qualifications for a claimant, 
 72.28  they may determine among them as to who the claimant shall be. 
 72.29  If they are unable to agree, the matter shall be referred to the 
 72.30  commissioner of revenue whose decision shall be final.  If a 
 72.31  homestead property owner was a part-year Minnesota resident, the 
 72.32  income reflected in the computation made pursuant to section 
 72.33  290A.04 shall be for the entire calendar year, including income 
 72.34  not assignable to Minnesota. 
 72.35     (f) If a homestead is occupied by two or more renters, who 
 72.36  are not husband and wife, the rent shall be deemed to be paid 
 73.1   equally by each, and separate claims shall be filed by each.  
 73.2   The income of each shall be each renter's household income for 
 73.3   purposes of computing the amount of credit to be allowed. 
 73.4      [EFFECTIVE DATE.] This section is effective for claims 
 73.5   based on rent paid in 2003 and thereafter. 
 73.6      Sec. 28.  Laws 1989, chapter 211, section 8, subdivision 2, 
 73.7   as amended by Laws 2002, chapter 390, section 24, is amended to 
 73.8   read: 
 73.9      Subd. 2.  [OPERATION OF DISTRICT.] (a) A hospital district 
 73.10  created under this section shall be subject to Minnesota 
 73.11  Statutes, sections 447.32, except subdivision 1, to 447.41, and 
 73.12  except as provided otherwise in this act.  
 73.13     (b) A hospital district created under this section is a 
 73.14  municipal corporation and a political subdivision of the state. 
 73.15     [EFFECTIVE DATE.] This section is effective upon compliance 
 73.16  with Minnesota Statutes, section 645.021, subdivision 3, by the 
 73.17  governing body of the Cook county hospital district. 
 73.18     Sec. 29.  Laws 1989, chapter 211, section 8, subdivision 4, 
 73.19  as amended by Laws 2002, chapter 390, section 24, is amended to 
 73.20  read: 
 73.21     Subd. 4.  [TAX LEVY.] The tax levied under Minnesota 
 73.22  Statutes, section 447.34, shall not exceed $300,000 in any year, 
 73.23  and its for taxes levied in 2002.  For taxes levied in 2003 and 
 73.24  subsequent years, the tax must not exceed the lesser of: 
 73.25     (1) the product of the hospital district's property tax 
 73.26  levy limitation for the previous year determined under this 
 73.27  subdivision, multiplied by 103 percent; or 
 73.28     (2) the product of the hospital district's property tax 
 73.29  levy limitation for the previous year determined under this 
 73.30  subdivision multiplied by the ratio of the most recent available 
 73.31  annual medical care expenditure category of the revised Consumer 
 73.32  Price Index, U.S. citywide average, for all urban consumers 
 73.33  prepared by the United States Department of Labor to the same 
 73.34  annual index for the previous year. 
 73.35     The proceeds of the tax may be used for all purposes of the 
 73.36  hospital district. 
 74.1      [EFFECTIVE DATE.] This section is effective upon compliance 
 74.2   with Minnesota Statutes, section 645.021, subdivision 3, by the 
 74.3   governing body of the Cook county hospital district. 
 74.4      Sec. 30.  Laws 2001, First Special Session chapter 5, 
 74.5   article 3, section 96, is amended to read: 
 74.6      Sec. 96.  [REPEALER.] 
 74.7      (a) Minnesota Statutes 2000, sections 273.13, subdivision 
 74.8   24a; 273.1382; 273.1399; 275.078; 275.08, subdivision 1e; 
 74.9   473.446, subdivisions 1a and 1b; and 473.3915, are repealed 
 74.10  effective for taxes levied in 2001, payable in 2002, and 
 74.11  thereafter and aids or credits payable in 2002 and thereafter. 
 74.12     (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 
 74.13  702, section 16; Laws 1992, chapter 511, article 2, section 52, 
 74.14  as amended by Laws 1997, chapter 231, article 2, section 50, and 
 74.15  Laws 1998, chapter 389, article 3, section 32; Laws 1996, 
 74.16  chapter 471, article 8, section 45; Laws 1999, chapter 243, 
 74.17  article 6, section 14; Laws 1999, chapter 243, article 6, 
 74.18  section 15; and Laws 2000, chapter 490, article 6, section 17, 
 74.19  are repealed effective for taxes levied in 2001, payable in 2002 
 74.20  and thereafter. 
 74.21     (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 
 74.22  126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 
 74.23  effective July 1, 2001. 
 74.24     (d) Minnesota Statutes 2000, section 273.126 and 462A.071, 
 74.25  are repealed effective for property taxes payable in 2004, and 
 74.26  any agreement entered into pursuant to the provisions of those 
 74.27  sections expires, effective January 1, 2004, regardless of the 
 74.28  term of the agreement. 
 74.29     Sec. 31.  Laws 2002, chapter 377, article 3, section 15, 
 74.30  the effective date, is amended to read: 
 74.31     [EFFECTIVE DATE.] This section is effective for sales made 
 74.32  after August 31, 2002, and on or before December 31, 2003 2004. 
 74.33     Sec. 32.  [PROPERTY TAX ASSESSMENT OF LOW-INCOME HOUSING, 
 74.34  RULES.] 
 74.35     The commissioner of revenue shall develop guidelines for 
 74.36  use by assessors in calculating the restricted use value of 
 75.1   class 4d property under Minnesota Statutes, section 273.11, 
 75.2   subdivision 22. 
 75.3      [EFFECTIVE DATE.] This section is effective the day 
 75.4   following final enactment. 
 75.5      Sec. 33.  [COMMERCIAL-INDUSTRIAL LAND VALUE TAXATION; LOCAL 
 75.6   OPTION.] 
 75.7      The governing body of any municipality that has a 
 75.8   population in excess of 70,000, or any municipality located in 
 75.9   the taconite tax relief area defined in Minnesota Statutes, 
 75.10  section 273.134, may by resolution adopt a system of valuing 
 75.11  commercial-industrial property in its jurisdiction that is based 
 75.12  on the value of the land, not including improvements.  The 
 75.13  governing body may make the election under this section if it 
 75.14  finds that implementation of the land value system will enhance 
 75.15  economic development in the city.  An election under this 
 75.16  section must be made by December 31, 2003.  If any municipality 
 75.17  makes the election, it must notify the commissioner of revenue 
 75.18  of the election and the legislature must enact during the 2004 
 75.19  legislative session the legislation necessary to implement the 
 75.20  system for taxes levied in 2004, payable in 2005, and thereafter.
 75.21     Sec. 34.  [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 
 75.22  WATER.] 
 75.23     Pursuant to Minnesota Statutes, section 103G.265, 
 75.24  subdivision 3, the legislature approves the consumptive use 
 75.25  under a permit of more than 2,000,000 gallons per day average in 
 75.26  a 30-day period in Rosemount, in connection with a gas fueled 
 75.27  combined cycle electric generating facility, subject to the 
 75.28  commissioner of natural resources making a determination that 
 75.29  the water remaining in the basin of origin will be adequate to 
 75.30  meet the basin's need for water and approval by the commissioner 
 75.31  of natural resources of all applicable permits. 
 75.32     [EFFECTIVE DATE.] This section is effective the day 
 75.33  following final enactment. 
 75.34     Sec. 35.  [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 
 75.35  WATER.] 
 75.36     Pursuant to Minnesota Statutes, section 103G.265, 
 76.1   subdivision 3, the legislature approves the consumptive use 
 76.2   under a permit of more than 2,000,000 gallons per day average in 
 76.3   a 30-day period in Mankato, in connection with a gas fueled 
 76.4   combined cycle electric generating facility, subject to the 
 76.5   commissioner of natural resources making a determination that 
 76.6   the water remaining in the basin of origin will be adequate to 
 76.7   meet the basin's need for water and approval by the commissioner 
 76.8   of natural resources of all applicable permits. 
 76.9      [EFFECTIVE DATE.] This section is effective the day 
 76.10  following final enactment. 
 76.11                             ARTICLE 4
 76.12                         LOCAL DEVELOPMENT
 76.13     Section 1.  [469.1083] [COUNTY ECONOMIC DEVELOPMENT 
 76.14  AUTHORITY; METROPOLITAN AREA.] 
 76.15     Subdivision 1.  [ECONOMIC DEVELOPMENT POWERS AND DUTIES.] A 
 76.16  county located in the metropolitan area may, by resolution of 
 76.17  the county board, grant an existing county housing and 
 76.18  redevelopment authority any of the powers and duties of an 
 76.19  economic development authority under sections 469.090 to 
 76.20  469.093, 469.095 to 469.106, 469.108, and 469.1081.  For the 
 76.21  purposes of this section, a county community development 
 76.22  authority is a county housing and redevelopment authority that 
 76.23  has been granted economic development authority powers and 
 76.24  duties.  In applying sections 469.090 to 469.093, 469.095 to 
 76.25  469.106, 469.108, and 469.1081 to a county community development 
 76.26  authority, the county is considered to be the city and the 
 76.27  county board is considered to be the city council. 
 76.28     Subd. 2.  [RELATION TO LOCAL AUTHORITIES.] Nothing in this 
 76.29  section shall alter or impair the powers or duties of a city, a 
 76.30  municipal housing and redevelopment authority, or a municipal 
 76.31  economic development authority. 
 76.32     Subd. 3.  [LOCAL APPROVAL.] If an economic development 
 76.33  project is constructed in the county under this section and the 
 76.34  project is within the boundaries of a home rule charter or 
 76.35  statutory city, the location of the project must be approved by 
 76.36  the governing body of the city. 
 77.1      [EFFECTIVE DATE.] This section is effective the day 
 77.2   following final enactment and applies in the counties of Anoka, 
 77.3   Hennepin, Ramsey, and Washington. 
 77.4      Sec. 2.  Minnesota Statutes 2002, section 469.169, is 
 77.5   amended by adding a subdivision to read: 
 77.6      Subd. 16.  [ADDITIONAL BORDER CITY ALLOCATIONS.] (a) In 
 77.7   addition to tax reductions authorized in subdivisions 7 to 15, 
 77.8   the commissioner shall allocate $750,000 for tax reductions to 
 77.9   border city enterprise zones in cities located on the western 
 77.10  border of the state.  The commissioner shall make allocations to 
 77.11  zones in cities on the western border on a per capita basis.  
 77.12  Allocations made under this subdivision may be used for tax 
 77.13  reductions as provided in section 469.171, or for other offsets 
 77.14  of taxes imposed on or remitted by businesses located in the 
 77.15  enterprise zone, but only if the municipality determines that 
 77.16  the granting of the tax reduction or offset is necessary in 
 77.17  order to retain a business within or attract a business to the 
 77.18  zone.  Any portion of the allocation provided in this paragraph 
 77.19  may alternatively be used for tax reductions under section 
 77.20  469.1732 or 469.1734. 
 77.21     (b) The commissioner shall allocate $750,000 for tax 
 77.22  reductions under section 469.1732 or 469.1734 to cities with 
 77.23  border city enterprise zones located on the western border of 
 77.24  the state.  The commissioner shall allocate this amount among 
 77.25  the cities on a per capita basis.  Any portion of the allocation 
 77.26  provided in this paragraph may alternatively be used for tax 
 77.27  reductions as provided in section 469.171. 
 77.28     [EFFECTIVE DATE.] This section is effective the day 
 77.29  following final enactment. 
 77.30     Sec. 3.  Minnesota Statutes 2002, section 469.1731, 
 77.31  subdivision 3, is amended to read: 
 77.32     Subd. 3.  [FILING.] The city must file a copy of the 
 77.33  resolution and development plan with the commissioner of trade 
 77.34  and economic development.  The designation takes effect for the 
 77.35  first calendar year that begins more than 90 30 days after the 
 77.36  filing. 
 78.1      [EFFECTIVE DATE.] This section is effective the day 
 78.2   following final enactment. 
 78.3      Sec. 4.  Minnesota Statutes 2002, section 469.174, 
 78.4   subdivision 10, is amended to read: 
 78.5      Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
 78.6   district" means a type of tax increment financing district 
 78.7   consisting of a project, or portions of a project, within which 
 78.8   the authority finds by resolution that one or more of the 
 78.9   following conditions, reasonably distributed throughout the 
 78.10  district, exists: 
 78.11     (1) parcels consisting of 70 percent of the area of the 
 78.12  district are occupied by buildings, streets, utilities, paved or 
 78.13  gravel parking lots, or other similar structures and more than 
 78.14  50 percent of the buildings, not including outbuildings, are 
 78.15  structurally substandard to a degree requiring substantial 
 78.16  renovation or clearance; or 
 78.17     (2) the property consists of vacant, unused, underused, 
 78.18  inappropriately used, or infrequently used railyards, rail 
 78.19  storage facilities, or excessive or vacated railroad 
 78.20  rights-of-way; or 
 78.21     (3) tank facilities, or property whose immediately previous 
 78.22  use was for tank facilities, as defined in section 115C.02, 
 78.23  subdivision 15, if the tank facilities: 
 78.24     (i) have or had a capacity of more than 1,000,000 gallons; 
 78.25     (ii) are located adjacent to rail facilities; and 
 78.26     (iii) have been removed or are unused, underused, 
 78.27  inappropriately used, or infrequently used; or 
 78.28     (4) a qualifying disaster area, as defined in subdivision 
 78.29  10b. 
 78.30     (b) For purposes of this subdivision, "structurally 
 78.31  substandard" shall mean containing defects in structural 
 78.32  elements or a combination of deficiencies in essential utilities 
 78.33  and facilities, light and ventilation, fire protection including 
 78.34  adequate egress, layout and condition of interior partitions, or 
 78.35  similar factors, which defects or deficiencies are of sufficient 
 78.36  total significance to justify substantial renovation or 
 79.1   clearance. 
 79.2      (c) A building is not structurally substandard if it is in 
 79.3   compliance with the building code applicable to new buildings or 
 79.4   could be modified to satisfy the building code at a cost of less 
 79.5   than 15 percent of the cost of constructing a new structure of 
 79.6   the same square footage and type on the site.  The municipality 
 79.7   may find that a building is not disqualified as structurally 
 79.8   substandard under the preceding sentence on the basis of 
 79.9   reasonably available evidence, such as the size, type, and age 
 79.10  of the building, the average cost of plumbing, electrical, or 
 79.11  structural repairs, or other similar reliable evidence.  The 
 79.12  municipality may not make such a determination without an 
 79.13  interior inspection of the property, but need not have an 
 79.14  independent, expert appraisal prepared of the cost of repair and 
 79.15  rehabilitation of the building.  An interior inspection of the 
 79.16  property is not required, if the municipality finds that (1) the 
 79.17  municipality or authority is unable to gain access to the 
 79.18  property after using its best efforts to obtain permission from 
 79.19  the party that owns or controls the property; and (2) the 
 79.20  evidence otherwise supports a reasonable conclusion that the 
 79.21  building is structurally substandard.  Items of evidence that 
 79.22  support such a conclusion include recent fire or police 
 79.23  inspections, on-site property tax appraisals or housing 
 79.24  inspections, exterior evidence of deterioration, or other 
 79.25  similar reliable evidence.  Written documentation of the 
 79.26  findings and reasons why an interior inspection was not 
 79.27  conducted must be made and retained under section 469.175, 
 79.28  subdivision 3, clause (1). 
 79.29     (d) A parcel is deemed to be occupied by a structurally 
 79.30  substandard building for purposes of the finding under paragraph 
 79.31  (a) if all of the following conditions are met: 
 79.32     (1) the parcel was occupied by a substandard building 
 79.33  within three years of the filing of the request for 
 79.34  certification of the parcel as part of the district with the 
 79.35  county auditor; 
 79.36     (2) the substandard building was demolished or removed by 
 80.1   the authority or the demolition or removal was financed by the 
 80.2   authority or was done by a developer under a development 
 80.3   agreement with the authority; 
 80.4      (3) the authority found by resolution before the demolition 
 80.5   or removal that the parcel was occupied by a structurally 
 80.6   substandard building and that after demolition and clearance the 
 80.7   authority intended to include the parcel within a district; and 
 80.8      (4) upon filing the request for certification of the tax 
 80.9   capacity of the parcel as part of a district, the authority 
 80.10  notifies the county auditor that the original tax capacity of 
 80.11  the parcel must be adjusted as provided by section 469.177, 
 80.12  subdivision 1, paragraph (h). 
 80.13     (e) For purposes of this subdivision, a parcel is not 
 80.14  occupied by buildings, streets, utilities, paved or gravel 
 80.15  parking lots, or other similar structures unless 15 percent of 
 80.16  the area of the parcel contains buildings, streets, utilities, 
 80.17  paved or gravel parking lots, or other similar structures. 
 80.18     (f) For districts consisting of two or more noncontiguous 
 80.19  areas, each area must qualify as a redevelopment district under 
 80.20  paragraph (a) to be included in the district, and the entire 
 80.21  area of the district must satisfy paragraph (a). 
 80.22     [EFFECTIVE DATE.] This section is effective for districts 
 80.23  for which the request for certification is made after the day 
 80.24  following final enactment. 
 80.25     Sec. 5.  Minnesota Statutes 2002, section 469.174, is 
 80.26  amended by adding a subdivision to read: 
 80.27     Subd. 10b.  [QUALIFIED DISASTER AREA.] A "qualified 
 80.28  disaster area" is an area that meets the following requirements: 
 80.29     (1) parcels consisting of 70 percent of the area of the 
 80.30  district were occupied by buildings, streets, utilities, paved 
 80.31  or gravel parking lots, or other similar structures immediately 
 80.32  before the disaster or emergency; 
 80.33     (2) the area of the district was subject to a disaster or 
 80.34  emergency, as defined in section 273.123, subdivision 1, within 
 80.35  the 18-month period ending on the day the request for 
 80.36  certification of the district is made; and 
 81.1      (3) 50 percent or more of the buildings in the area have 
 81.2   suffered substantial damage as a result of the disaster or 
 81.3   emergency. 
 81.4      [EFFECTIVE DATE.] This section is effective for districts 
 81.5   for which the request for certification is made after the day 
 81.6   following final enactment.  
 81.7      Sec. 6.  Minnesota Statutes 2002, section 469.174, is 
 81.8   amended by adding a subdivision to read: 
 81.9      Subd. 28.  [QUALIFIED HOUSING DISTRICT.] "Qualified housing 
 81.10  district" means: 
 81.11     (1) a housing district for a residential rental project or 
 81.12  projects in which the only properties receiving assistance from 
 81.13  revenues derived from tax increments from the district meet all 
 81.14  of the requirements for a low-income housing credit under 
 81.15  section 42 of the Internal Revenue Code of 1986, as amended 
 81.16  through December 31, 1992, regardless of whether the project 
 81.17  actually receives a low-income housing credit; or 
 81.18     (2) a housing district for a single-family homeownership 
 81.19  project or projects, if 95 percent or more of the homes 
 81.20  receiving assistance from tax increments from the district are 
 81.21  purchased by qualified purchasers.  A qualified purchaser means 
 81.22  the first purchaser of a home after the tax increment assistance 
 81.23  is provided whose income is at or below 100 percent of the 
 81.24  median gross income for a family of the same size as the 
 81.25  purchaser.  Median gross income is the greater of (i) area 
 81.26  median gross income, or (ii) the statewide median gross income, 
 81.27  as determined by the secretary of housing and urban development. 
 81.28     Sec. 7.  Minnesota Statutes 2002, section 469.176, 
 81.29  subdivision 7, is amended to read: 
 81.30     Subd. 7.  [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The 
 81.31  authority may request inclusion in a tax increment financing 
 81.32  district and the county auditor may certify the original tax 
 81.33  capacity of a parcel or a part of a parcel that qualified under 
 81.34  the provisions of section 273.111 or 273.112 or chapter 473H for 
 81.35  taxes payable in any of the five calendar years before the 
 81.36  filing of the request for certification only for: 
 82.1      (1) a district in which 85 percent or more of the planned 
 82.2   buildings and facilities (determined on the basis of square 
 82.3   footage) are a qualified manufacturing facility or a qualified 
 82.4   distribution facility or a combination of both; or 
 82.5      (2) a qualified housing district as defined in section 
 82.6   273.1399, subdivision 1. 
 82.7      (b)(1) A distribution facility means buildings and other 
 82.8   improvements to real property that are used to conduct 
 82.9   activities in at least each of the following categories: 
 82.10     (i) to store or warehouse tangible personal property; 
 82.11     (ii) to take orders for shipment, mailing, or delivery; 
 82.12     (iii) to prepare personal property for shipment, mailing, 
 82.13  or delivery; and 
 82.14     (iv) to ship, mail, or deliver property. 
 82.15     (2) A manufacturing facility includes space used for 
 82.16  manufacturing or producing tangible personal property, including 
 82.17  processing resulting in the change in condition of the property, 
 82.18  and space necessary for and related to the manufacturing 
 82.19  activities. 
 82.20     (3) To be a qualified facility, the owner or operator of a 
 82.21  manufacturing or distribution facility must agree to pay and pay 
 82.22  90 percent or more of the employees of the facility at a rate 
 82.23  equal to or greater than 160 percent of the federal minimum wage 
 82.24  for individuals over the age of 20. 
 82.25     Sec. 8.  Minnesota Statutes 2002, section 469.1761, is 
 82.26  amended by adding a subdivision to read: 
 82.27     Subd. 3a.  [MIXED-INCOME OCCUPANCY PROJECTS.] (a) 
 82.28  Notwithstanding the income requirements in section 469.174, 
 82.29  subdivision 11, or subdivisions 2 and 3, an authority may create 
 82.30  housing districts for developments that contain both 
 82.31  owner-occupied and residential rental units for mixed-income 
 82.32  occupancy.  Such a district consists of a project, or a portion 
 82.33  of a project, intended for occupancy, in part, by persons of low 
 82.34  and moderate income as defined in chapter 462A, Title II, of the 
 82.35  National Housing Act of 1934; the National Housing Act of 1959; 
 82.36  the United States Housing Act of 1937, as amended; Title V of 
 83.1   the Housing Act of 1949, as amended; any other similar present 
 83.2   or future federal, state, or municipal legislation, or the 
 83.3   regulations promulgated under any of those acts, as further set 
 83.4   forth in this section.  Twenty percent of the units in the 
 83.5   development in the housing district must be occupied by 
 83.6   individuals whose family income is equal to or less than 50 
 83.7   percent of area median gross income and an additional 60 percent 
 83.8   of the units in the development in the housing district must be 
 83.9   occupied by individuals whose family income is equal to or less 
 83.10  than 115 percent of area median gross income.  Twenty percent of 
 83.11  the units in the development in the housing district shall not 
 83.12  be subject to any income limitations. 
 83.13     (b) For purposes of this subdivision, "family income" means 
 83.14  the median gross income for the area as determined under section 
 83.15  42 of the Internal Revenue Code of 1986, as amended.  The income 
 83.16  requirements of this subdivision shall be deemed to be satisfied 
 83.17  if the sum of qualified owner-occupied units and qualified 
 83.18  residential rental units equals the required total number of 
 83.19  qualified units.  Owner-occupied units must be initially 
 83.20  purchased and occupied by individuals whose family income 
 83.21  satisfies the income requirements of this subdivision.  For 
 83.22  residential rental property, the income requirements of this 
 83.23  subdivision apply for the duration of the tax increment district.
 83.24     (c) The development in the housing district, but not the 
 83.25  project, does not qualify under this subdivision if the fair 
 83.26  market value of the improvements that are constructed for 
 83.27  commercial uses or for uses other than owner-occupied and rental 
 83.28  mixed-income housing consists of more than 20 percent of the 
 83.29  total fair market value of the planned improvements in the 
 83.30  development plan or agreement.  The fair market value of the 
 83.31  improvements may be determined using the cost of construction, 
 83.32  capitalized income, or other appropriate method of estimating 
 83.33  market value. 
 83.34     [EFFECTIVE DATE.] This section is effective for districts 
 83.35  for which certification is requested after July 31, 2003. 
 83.36     Sec. 9.  Minnesota Statutes 2002, section 469.1763, 
 84.1   subdivision 2, is amended to read: 
 84.2      Subd. 2.  [EXPENDITURES OUTSIDE DISTRICT.] (a) For each tax 
 84.3   increment financing district, an amount equal to at least 75 
 84.4   percent of the revenue derived from tax increments paid by 
 84.5   properties in the district must be expended on activities in the 
 84.6   district or to pay bonds, to the extent that the proceeds of the 
 84.7   bonds were used to finance activities in the district or to pay, 
 84.8   or secure payment of, debt service on credit enhanced bonds.  
 84.9   For districts, other than redevelopment districts for which the 
 84.10  request for certification was made after June 30, 1995, the 
 84.11  in-district percentage for purposes of the preceding sentence is 
 84.12  80 percent.  Not more than 25 percent of the revenue derived 
 84.13  from tax increments paid by properties in the district may be 
 84.14  expended, through a development fund or otherwise, on activities 
 84.15  outside of the district but within the defined geographic area 
 84.16  of the project except to pay, or secure payment of, debt service 
 84.17  on credit enhanced bonds.  For districts, other than 
 84.18  redevelopment districts for which the request for certification 
 84.19  was made after June 30, 1995, the pooling percentage for 
 84.20  purposes of the preceding sentence is 20 percent.  The revenue 
 84.21  derived from tax increments for the district that are expended 
 84.22  on costs under section 469.176, subdivision 4h, paragraph (b), 
 84.23  may be deducted first before calculating the percentages that 
 84.24  must be expended within and without the district.  
 84.25     (b) In the case of a housing district, a housing project, 
 84.26  as defined in section 469.174, subdivision 11, is an activity in 
 84.27  the district.  
 84.28     (c) All administrative expenses are for activities outside 
 84.29  of the district, except that if the only expenses for activities 
 84.30  outside of the district under this subdivision are for the 
 84.31  purposes described in paragraph (d), administrative expenses 
 84.32  will be considered as expenditures for activities in the 
 84.33  district. 
 84.34     (d) The authority may elect, in the tax increment financing 
 84.35  plan for the district, to increase by up to ten percentage 
 84.36  points the permitted amount of expenditures for activities 
 85.1   located outside the geographic area of the district under 
 85.2   paragraph (a).  As permitted by section 469.176, subdivision 4k, 
 85.3   the expenditures, including the permitted expenditures under 
 85.4   paragraph (a), need not be made within the geographic area of 
 85.5   the project.  To qualify for the increase under this paragraph, 
 85.6   the expenditures must: 
 85.7      (1) be used exclusively to assist housing that meets the 
 85.8   requirement for a qualified low-income building, as that term is 
 85.9   used in section 42 of the Internal Revenue Code; 
 85.10     (2) not exceed the qualified basis of the housing, as 
 85.11  defined under section 42(c) of the Internal Revenue Code, less 
 85.12  the amount of any credit allowed under section 42 of the 
 85.13  Internal Revenue Code; and 
 85.14     (3) be used to: 
 85.15     (i) acquire and prepare the site of the housing; 
 85.16     (ii) acquire, construct, or rehabilitate the housing; or 
 85.17     (iii) make public improvements directly related to the 
 85.18  housing. 
 85.19     Sec. 10.  Minnesota Statutes 2002, section 469.177, 
 85.20  subdivision 1, is amended to read: 
 85.21     Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
 85.22  after adoption of a tax increment financing plan, the auditor of 
 85.23  any county in which the district is situated shall, upon request 
 85.24  of the authority, certify the original net tax capacity of the 
 85.25  tax increment financing district and that portion of the 
 85.26  district overlying any subdistrict as described in the tax 
 85.27  increment financing plan and shall certify in each year 
 85.28  thereafter the amount by which the original net tax capacity has 
 85.29  increased or decreased as a result of a change in tax exempt 
 85.30  status of property within the district and any subdistrict, 
 85.31  reduction or enlargement of the district or changes pursuant to 
 85.32  subdivision 4.  
 85.33     (b) For districts approved under section 469.175, 
 85.34  subdivision 3, or parcels added to existing districts after May 
 85.35  1, 1988, if the classification under section 273.13 of property 
 85.36  located in a district changes to a classification that has a 
 86.1   different assessment ratio, the original net tax capacity of 
 86.2   that property must be redetermined at the time when its use is 
 86.3   changed as if the property had originally been classified in the 
 86.4   same class in which it is classified after its use is changed. 
 86.5      (c) The amount to be added to the original net tax capacity 
 86.6   of the district as a result of previously tax exempt real 
 86.7   property within the district becoming taxable equals the net tax 
 86.8   capacity of the real property as most recently assessed pursuant 
 86.9   to section 273.18 or, if that assessment was made more than one 
 86.10  year prior to the date of title transfer rendering the property 
 86.11  taxable, the net tax capacity assessed by the assessor at the 
 86.12  time of the transfer.  If improvements are made to tax exempt 
 86.13  property after certification of the district and before the 
 86.14  parcel becomes taxable, the assessor shall, at the request of 
 86.15  the authority, separately assess the estimated market value of 
 86.16  the improvements.  If the property becomes taxable, the county 
 86.17  auditor shall add to original net tax capacity, the net tax 
 86.18  capacity of the parcel, excluding the separately assessed 
 86.19  improvements.  If substantial taxable improvements were made to 
 86.20  a parcel after certification of the district and if the property 
 86.21  later becomes tax exempt, in whole or part, as a result of the 
 86.22  authority acquiring the property through foreclosure or exercise 
 86.23  of remedies under a lease or other revenue agreement or as a 
 86.24  result of tax forfeiture, the amount to be added to the original 
 86.25  net tax capacity of the district as a result of the property 
 86.26  again becoming taxable is the amount of the parcel's value that 
 86.27  was included in original net tax capacity when the parcel was 
 86.28  first certified.  The amount to be added to the original net tax 
 86.29  capacity of the district as a result of enlargements equals the 
 86.30  net tax capacity of the added real property as most recently 
 86.31  certified by the commissioner of revenue as of the date of 
 86.32  modification of the tax increment financing plan pursuant to 
 86.33  section 469.175, subdivision 4. 
 86.34     (d) For districts approved under section 469.175, 
 86.35  subdivision 3, or parcels added to existing districts after May 
 86.36  1, 1988, if the net tax capacity of a property increases because 
 87.1   the property no longer qualifies under the Minnesota 
 87.2   Agricultural Property Tax Law, section 273.111; the Minnesota 
 87.3   Open Space Property Tax Law, section 273.112; or the 
 87.4   Metropolitan Agricultural Preserves Act, chapter 473H, or 
 87.5   because platted, unimproved property is improved or three years 
 87.6   pass after approval of the plat under section 273.11, 
 87.7   subdivision 1, the increase in net tax capacity must be added to 
 87.8   the original net tax capacity.  
 87.9      (e) The amount to be subtracted from the original net tax 
 87.10  capacity of the district as a result of previously taxable real 
 87.11  property within the district becoming tax exempt, or a reduction 
 87.12  in the geographic area of the district, shall be the amount of 
 87.13  original net tax capacity initially attributed to the property 
 87.14  becoming tax exempt or being removed from the district.  If the 
 87.15  net tax capacity of property located within the tax increment 
 87.16  financing district is reduced by reason of a court-ordered 
 87.17  abatement, stipulation agreement, voluntary abatement made by 
 87.18  the assessor or auditor or by order of the commissioner of 
 87.19  revenue, the reduction shall be applied to the original net tax 
 87.20  capacity of the district when the property upon which the 
 87.21  abatement is made has not been improved since the date of 
 87.22  certification of the district and to the captured net tax 
 87.23  capacity of the district in each year thereafter when the 
 87.24  abatement relates to improvements made after the date of 
 87.25  certification.  The county auditor may specify reasonable form 
 87.26  and content of the request for certification of the authority 
 87.27  and any modification thereof pursuant to section 469.175, 
 87.28  subdivision 4.  
 87.29     (f) If a parcel of property contained a substandard 
 87.30  building that was demolished or removed and if the authority 
 87.31  elects to treat the parcel as occupied by a substandard building 
 87.32  under section 469.174, subdivision 10, paragraph (b), the 
 87.33  auditor shall certify the original net tax capacity of the 
 87.34  parcel using the greater of (1) the current net tax capacity of 
 87.35  the parcel, or (2) the estimated market value of the parcel for 
 87.36  the year in which the building was demolished or removed, but 
 88.1   applying the class rates for the current year. 
 88.2      (g) For a redevelopment district qualifying under section 
 88.3   469.174, subdivision 10, paragraph (a), clause (4), as a 
 88.4   qualified disaster area, the auditor shall certify the value of 
 88.5   the land as the original tax capacity for any parcel in the 
 88.6   district that contains a building that suffered substantial 
 88.7   damage as a result of the disaster or emergency. 
 88.8      [EFFECTIVE DATE.] This section is effective for districts 
 88.9   for which the request for certification is made after the day 
 88.10  following final enactment. 
 88.11     Sec. 11.  Minnesota Statutes 2002, section 469.1792, is 
 88.12  amended to read: 
 88.13     469.1792 [SPECIAL DEFICIT AUTHORITY.] 
 88.14     Subdivision 1.  [SCOPE.] This section applies only to an 
 88.15  authority with a preexisting district for which: 
 88.16     (1) the increments from the district were insufficient to 
 88.17  pay preexisting obligations as a result of the class rate 
 88.18  changes or the elimination of the state-determined general 
 88.19  education property tax levy under this act, or both; or 
 88.20     (2)(i) the development authority has a binding contract 
 88.21  with a person requiring the authority to pay to the person an 
 88.22  amount that may not exceed the increment from the district or a 
 88.23  specific development within the district; and 
 88.24     (ii) the authority is unable to pay the full amount under 
 88.25  the contract from the pledged increments or other increments 
 88.26  from the district that would have been due if the class rate 
 88.27  changes or elimination of the state-determined general education 
 88.28  property tax levy or both had not been made under Laws 2001, 
 88.29  First Special Session chapter 5; 
 88.30     (3) the authority amends its tax increment financing plan 
 88.31  to establish an affordable housing account to which increments 
 88.32  are pledged; or 
 88.33     (4) the authority amends its tax increment financing plan 
 88.34  to establish a hazardous substance, pollutant, or contaminant 
 88.35  remediation account to which increments are pledged. 
 88.36     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
 89.1   the following terms have the meanings given. 
 89.2      (b) "Affordable housing account" means an account in which 
 89.3   increment is deposited solely for affordable housing activities 
 89.4   as defined in section 469.174, subdivision 11.  
 89.5      (c) "Hazardous substance, pollutant, or contaminant 
 89.6   remediation account" means an account in which increment is 
 89.7   deposited solely for removal or remediation activities described 
 89.8   in section 469.174, subdivisions 16 to 19.  
 89.9      (d) "Preexisting district" means a tax increment financing 
 89.10  district for which the request for certification was made before 
 89.11  August 1, 2001. 
 89.12     (c) (e) "Preexisting obligation" means a bond or binding 
 89.13  contract that: 
 89.14     (1) was issued or approved before August 1, 2001, or was 
 89.15  issued pursuant to a binding contract entered into before August 
 89.16  1, 2001; 
 89.17     (2) is secured by increments from a preexisting district. 
 89.18     Subd. 3.  [ACTIONS AUTHORIZED.] (a) An authority with a 
 89.19  district qualifying under this section may take either or both 
 89.20  any or all of the following actions for any or all of its 
 89.21  preexisting districts: 
 89.22     (1) the authority may elect that the original local tax 
 89.23  rate under section 469.177, subdivision 1a, does not apply to 
 89.24  the district; and 
 89.25     (2) the authority may elect the fiscal disparities 
 89.26  contribution will be computed under section 469.177, subdivision 
 89.27  3, paragraph (a), regardless of the election that was made for 
 89.28  the district; or 
 89.29     (3) the authority may elect to extend the duration of the 
 89.30  district by up to eight additional years beyond the duration 
 89.31  limit on the collection of increment under section 469.176, 
 89.32  subdivision 1b or 1e, or a special law applicable to the 
 89.33  district. 
 89.34     (b) The authority may take action under this subdivision 
 89.35  only after the municipality approves the action, by resolution, 
 89.36  after notice and public hearing in the manner provided under 
 90.1   section 469.175, subdivision 2. 
 90.2      (c) The additional increment that may be collected as a 
 90.3   result of actions taken under this section and any increments 
 90.4   transferred to the district under section 469.1763, subdivision 
 90.5   6, is limited to the lesser of: 
 90.6      (1) the amount the authority is obligated to pay under 
 90.7   preexisting obligations out of the increments from the district 
 90.8   that result in application of this section under subdivision 1; 
 90.9   or 
 90.10     (2) an amount estimated to represent the difference between 
 90.11  the increment that would have been collected if the class rate 
 90.12  changes and elimination of the state-determined general 
 90.13  education property tax levy had not been made under Laws 2001, 
 90.14  First Special Session chapter 5, for the term of the district 
 90.15  under general law, and the actual increments collected for the 
 90.16  term of the district. 
 90.17     Subd. 4.  [EXPENDITURES FROM AFFORDABLE HOUSING 
 90.18  ACCOUNTS.] Increment from an affordable housing account may be 
 90.19  spent by an authority anywhere within its area of operation.  
 90.20  Notwithstanding the definition of a project under section 
 90.21  469.174, increments may be spent to assist housing that meets 
 90.22  the requirements under section 469.1761.  The limitation imposed 
 90.23  by section 469.1763, subdivision 2, does not apply to any 
 90.24  transfers of increment to the affordable housing account to the 
 90.25  extent that the amount transferred to the account under this 
 90.26  subdivision does not exceed ten percent of the revenue derived 
 90.27  from tax increments paid by properties in the district in the 
 90.28  year. 
 90.29     Subd. 5.  [EXPENDITURES FROM HAZARDOUS SUBSTANCE, 
 90.30  POLLUTANT, OR CONTAMINANT REMEDIATION ACCOUNT.] Increment from a 
 90.31  hazardous substance, pollutant, or contaminant remediation 
 90.32  account may be spent by an authority anywhere within its area of 
 90.33  operation.  Notwithstanding the definition of a project under 
 90.34  section 469.174, increments may be expended to remediation and 
 90.35  removal activities that meet the requirements of section 
 90.36  469.176, subdivision 4b or 4e.  The limitation imposed by 
 91.1   section 469.1763, subdivision 2, does not apply to any transfers 
 91.2   of increment to the hazardous substance, pollutant, or 
 91.3   contaminant remediation account to the extent that the amount 
 91.4   transferred to the account under this subdivision does not 
 91.5   exceed ten percent of the revenue derived from tax increments 
 91.6   paid by properties in the district in the year. 
 91.7      [EFFECTIVE DATE.] This section is effective for actions 
 91.8   taken and resolutions approved after June 30, 2003. 
 91.9      Sec. 12.  Laws 1967, chapter 558, section 1, subdivision 5, 
 91.10  as amended by Laws 1979, chapter 135, section 1, and Laws 1985, 
 91.11  chapter 98, section 2, is amended to read:  
 91.12     Subd. 5.  Promotion of tourist, agricultural and industrial 
 91.13  developments.  The amount to be spent annually for the purposes 
 91.14  of this subdivision shall not exceed one dollar five dollars per 
 91.15  capita of the county's population.  
 91.16     [EFFECTIVE DATE.] 
 91.17     This section is effective the day after the governing body 
 91.18  of Beltrami county and its chief clerical officer timely 
 91.19  complete their compliance with Minnesota Statutes, section 
 91.20  645.021, subdivisions 2 and 3. 
 91.21     Sec. 13.  Laws 1978, chapter 464, section 1, is amended to 
 91.22  read: 
 91.23     Section 1.  [ANOKA COUNTY; HOUSING AND REDEVELOPMENT.] 
 91.24     Subdivision 1.  There is created in the county of Anoka a 
 91.25  public body corporate and politic, to be known as the Anoka 
 91.26  county housing and redevelopment authority, having all of the 
 91.27  powers and duties of a housing and redevelopment authority under 
 91.28  the provisions of the municipal housing and redevelopment act, 
 91.29  Minnesota Statutes, Section 462.411 to 462.711 sections 469.001 
 91.30  to 469.047.  For the purposes of applying the provisions of the 
 91.31  municipal housing and redevelopment act to Anoka county, the 
 91.32  county has all of the powers and duties of a municipality, the 
 91.33  county board has all of the powers and duties of a governing 
 91.34  body, the chairman of the county board has all of the powers and 
 91.35  duties of a mayor, and the area of operation includes the area 
 91.36  within the territorial boundaries of the county. 
 92.1      Subd. 2.  This section shall not limit or restrict any 
 92.2   existing housing and redevelopment authority or prevent a 
 92.3   municipality from creating an authority.  The county shall not 
 92.4   exercise jurisdiction in any municipality where a municipal 
 92.5   housing and redevelopment authority is established.  If a 
 92.6   municipal housing and redevelopment authority requests the Anoka 
 92.7   county housing and redevelopment authority to handle the housing 
 92.8   duties of the municipal authority, the Anoka county housing and 
 92.9   redevelopment authority shall act and have exclusive 
 92.10  jurisdiction for housing in the municipality.  A transfer of 
 92.11  duties relating to housing shall not transfer any duties 
 92.12  relating to redevelopment. 
 92.13     Subd. 3.  [TAXING DISTRICT.] The taxing district of the 
 92.14  Anoka county housing and redevelopment authority shall include 
 92.15  all cities and towns within Anoka county, except that a city may 
 92.16  limit its participation as provided in this subdivision.  The 
 92.17  Anoka county board shall notify all cities and towns located 
 92.18  within Anoka county if it adopts a resolution granting economic 
 92.19  development authority powers to the Anoka county housing and 
 92.20  redevelopment authority under Minnesota Statutes, section 
 92.21  469.1083, subdivision 1.  Within 12 months following the Anoka 
 92.22  county board's adoption of the resolution, a city may adopt a 
 92.23  resolution requesting limited participation.  Such limited 
 92.24  participation shall be effective only if each of the following 
 92.25  criteria are met: 
 92.26     (1) the city has created a housing and redevelopment 
 92.27  authority prior to December 13, 1994; 
 92.28     (2) the city has not transferred jurisdiction for housing 
 92.29  to the Anoka county housing and redevelopment authority under 
 92.30  subdivision 2; and 
 92.31     (3) the Anoka county housing and redevelopment authority 
 92.32  levy within the city is not pledged for the repayment of bonds 
 92.33  or other forms of indebtedness. 
 92.34     The levy of the Anoka county housing and redevelopment 
 92.35  authority within a city with limited participation must not 
 92.36  exceed 40 percent of the maximum levy allowed by law.  The Anoka 
 93.1   county housing and redevelopment authority shall not undertake a 
 93.2   housing project, a housing development project, a redevelopment 
 93.3   project, or an economic development project within the 
 93.4   boundaries of a city with limited participation.  A city with 
 93.5   limited participation may, at any time, adopt a resolution 
 93.6   revoking its limited participation status. 
 93.7      [EFFECTIVE DATE.] This section is effective the day after 
 93.8   the governing body of Anoka county and its chief clerical 
 93.9   officer timely complete their compliance with Minnesota 
 93.10  Statutes, section 645.021, subdivisions 2 and 3. 
 93.11     Sec. 14.  [DEFINITIONS.] 
 93.12     Subdivision 1.  [DEFINITIONS.] For the purposes of sections 
 93.13  14 to 20, the terms defined in this section have the following 
 93.14  meanings. 
 93.15     Subd. 2.  [LAKES AREA ECONOMIC DEVELOPMENT 
 93.16  AUTHORITY.] "Lakes area economic development authority" or 
 93.17  "authority" means the lakes area economic authority established 
 93.18  as provided in section 15. 
 93.19     Subd. 3.  [PERSON.] "Person" means an individual, 
 93.20  partnership, corporation, cooperative, or other organization or 
 93.21  entity, public or private. 
 93.22     Subd. 4.  [MEMBER.] "Member" means the city of Alexandria 
 93.23  or Garfield or the township of Alexandria or La Grand, or any 
 93.24  other municipality, the geographic area of which is included 
 93.25  within the jurisdiction of the authority. 
 93.26     Subd. 5.  [MUNICIPALITY.] "Municipality" means a statutory 
 93.27  or home rule charter city or town located in Douglas county. 
 93.28     Sec. 15.  [LAKES AREA ECONOMIC DEVELOPMENT AUTHORITY.] 
 93.29     Subdivision 1.  [ESTABLISHMENT.] A lakes area economic 
 93.30  development authority with jurisdiction over the geographic area 
 93.31  of its members is established as a public corporation and 
 93.32  political subdivision of the state with perpetual succession and 
 93.33  all the rights, powers, privileges, immunities, and duties that 
 93.34  may be validly granted to or imposed upon a municipal 
 93.35  corporation, as provided in sections 14 to 20. 
 93.36     Subd. 2.  [BOARD OF COMMISSIONERS.] The authority is 
 94.1   governed by a board of commissioners to be selected as follows:  
 94.2   the mayor of each member city, and the chair of the town board 
 94.3   of each member town shall appoint one commissioner, subject to 
 94.4   the approval of the respective city council or town board.  The 
 94.5   terms of the commissioner are as provided in subdivision 5. 
 94.6      Subd. 3.  [TIME LIMITS FOR SELECTION, ALTERNATIVE 
 94.7   APPOINTMENT BY DISTRICT JUDGE.] The initial appointment of 
 94.8   commissioners must be made no later than 60 days after sections 
 94.9   14 to 20 become effective.  Subsequent appointments must be made 
 94.10  within 60 days before the expiration of a term in the same 
 94.11  manner as the predecessor was selected.  A vacancy on the board 
 94.12  must be filled within 60 days after it occurs.  If a selection 
 94.13  is not made within the prescribed time, the chief judge of the 
 94.14  seventh judicial district of the Minnesota district court on 
 94.15  application by an interested person shall appoint an eligible 
 94.16  person to the board. 
 94.17     Subd. 4.  [VACANCIES.] If a vacancy occurs in the office of 
 94.18  commissioner, the vacancy must be filled for the unexpired term 
 94.19  in a like manner as provided for selection of the commissioner 
 94.20  who vacated the office.  The office must be considered vacant 
 94.21  under the conditions specified in Minnesota Statutes, section 
 94.22  351.02. 
 94.23     Subd. 5.  [TERMS OF OFFICE.] The terms of the initial 
 94.24  appointees to the board of commissioners are for three, four, 
 94.25  five, and six years and must be established by lot among the 
 94.26  initial four commissioners.  The mayor or town board chair of 
 94.27  any new member added under section 18 shall designate the term, 
 94.28  not to exceed six years, of the first commissioner selected to 
 94.29  represent the member.  Succeeding terms of all commissioners are 
 94.30  six years, except that each commissioner serves until a 
 94.31  successor has been duly selected and qualified. 
 94.32     Subd. 6.  [REMOVAL.] A commissioner may be removed by the 
 94.33  unanimous vote of the appointing governing body, with or without 
 94.34  cause. 
 94.35     Subd. 7.  [QUALIFICATIONS.] A commissioner may, but need 
 94.36  not, be a resident of the territory of the member appointing 
 95.1   that commissioner. 
 95.2      Subd. 8.  [COMPENSATION.] A commissioner must be paid a per 
 95.3   diem compensation for attending a regular or special meeting in 
 95.4   an amount determined by the board.  A commissioner must be 
 95.5   reimbursed for all reasonable expenses incurred in the 
 95.6   performance of the commissioner's duties as determined by the 
 95.7   board. 
 95.8      Sec. 16.  [POWERS; APPLICATION OF EDA LAW.] 
 95.9      Subdivision 1.  [USE OF EDA POWERS.] Except as otherwise 
 95.10  provided in sections 14 to 20, the authority may exercise any of 
 95.11  the powers of an economic development authority (EDA) provided 
 95.12  by Minnesota Statutes, sections 469.090 to 469.1082, and for 
 95.13  this purpose the term "city" means a member.  Minnesota 
 95.14  Statutes, sections 469.096 to 469.101, 469.103 to 469.106, and 
 95.15  469.108 to 469.1081, apply to the authority, except that the 
 95.16  authority's fiscal year is the calendar year.  
 95.17     Subd. 2.  [LAW THAT IS NOT APPLICABLE.] The provisions in: 
 95.18     (1) Minnesota Statutes, section 469.091, subdivision 1, 
 95.19  expressly relating to: 
 95.20     (i) the adoption of an enabling resolution; 
 95.21     (ii) Minnesota Statutes, section 469.092; or 
 95.22     (iii) housing and redevelopment authorities; and 
 95.23     (2) Minnesota Statutes, sections 469.093, 469.095, 469.102, 
 95.24  and 469.107; 
 95.25  do not apply to the authority. 
 95.26     Sec. 17.  [MEMBERS MUST LEVY TAXES FOR AUTHORITY.] 
 95.27     (a) A member shall, at the request of the authority, levy a 
 95.28  tax in any year for the benefit of the authority.  The tax is, 
 95.29  for each member, a pro rata portion of the total amount of tax 
 95.30  requested by the authority based on the taxable market value 
 95.31  within a member's jurisdiction, but in no event may the tax in 
 95.32  any year exceed 0.01813 percent of taxable market value.  For 
 95.33  purposes of this section, "taxable market value" has the meaning 
 95.34  as given in Minnesota Statutes, section 273.032. 
 95.35     (b) The treasurer of each member city or town shall, within 
 95.36  15 days after receiving the property tax settlements from the 
 96.1   county treasurer, pay to the treasurer of the authority the 
 96.2   amount collected for this purpose.  The money must be used by 
 96.3   the authority for the purposes provided by sections 14 to 20. 
 96.4      Sec. 18.  [ADDITION AND WITHDRAWAL OF MEMBERS.] 
 96.5      Subdivision 1.  [ADDITIONS.] A municipality upon a 
 96.6   resolution adopted by a four-fifths vote of all of its governing 
 96.7   body may petition the authority to be included within the 
 96.8   jurisdiction of the authority and, if approved by the authority, 
 96.9   the geographic area of the municipality must be included within 
 96.10  the jurisdiction of the authority and subject to the 
 96.11  jurisdiction of the authority under sections 14 to 20. 
 96.12     Subd. 2.  [WITHDRAWALS.] A municipality may withdraw from 
 96.13  the authority by resolution of its governing body.  The 
 96.14  municipality must notify the board of commissioners of the 
 96.15  authority of the withdrawal by providing a copy of the 
 96.16  resolution at least two years in advance of the proposed 
 96.17  withdrawal.  Unless the authority and the withdrawing member 
 96.18  agree otherwise by action of their governing bodies, the taxable 
 96.19  property of the withdrawing member is subject to the property 
 96.20  tax levy under section 17 for two taxes payable years following 
 96.21  the notification of the withdrawal and the withdrawing member 
 96.22  retains any rights, obligations, and liabilities obtained or 
 96.23  incurred during its participation. 
 96.24     Sec. 19.  [CONTRACTS WITH NONPROFIT CORPORATIONS.] 
 96.25     The authority may enter into contracts with one or more 
 96.26  nonprofit corporations to make, from funds of and under 
 96.27  guidelines set by the authority, loans or grants for projects 
 96.28  the authority may undertake under sections 14 to 20.  Minnesota 
 96.29  Statutes, section 465.719, does not apply so long as the 
 96.30  nonprofit corporation is not described in Minnesota Statutes, 
 96.31  section 465.719, subdivision 1, paragraph (b), item (i), or (b), 
 96.32  item (ii). 
 96.33     Sec. 20.  [RELATION TO EXISTING LAWS.] 
 96.34     Sections 14 to 20 must be given full effect notwithstanding 
 96.35  any law or charter that is inconsistent with them. 
 96.36     Sec. 21.  [LOCAL APPROVAL; EFFECTIVE DATE.] 
 97.1      Sections 14 to 20 are only effective as to all affected 
 97.2   governing bodies on the day after the last of the governing 
 97.3   bodies or town boards of the cities of Alexandria and Garfield 
 97.4   and the towns of Alexandria and La Grand in Douglas county and 
 97.5   the chief clerical officer of each of them timely complete their 
 97.6   compliance with Minnesota Statutes, section 645.021, 
 97.7   subdivisions 2 and 3. 
 97.8      Sec. 22.  [MULTICITY HOUSING AND REDEVELOPMENT AUTHORITY.] 
 97.9      Subdivision 1.  [ESTABLISHED.] A multicity authority is 
 97.10  established that includes the cities of Arden Hills, Blaine, 
 97.11  Circle Pines, Mounds View, New Brighton, Roseville, and 
 97.12  Shoreview, to be known as the housing and redevelopment 
 97.13  authority in and for the "I-35W Corridor Coalition." 
 97.14     Subd. 2.  [PURPOSES.] In addition to the purposes set forth 
 97.15  in Minnesota Statutes, sections 469.001 to 469.047, the purposes 
 97.16  of the authority are: 
 97.17     (1) to assist homeowners with flexible financing tools to 
 97.18  complete home improvement projects; 
 97.19     (2) to assist owners through the complex construction 
 97.20  process when renovating their homes; 
 97.21     (3) to assist individuals and families to become new 
 97.22  homeowners; 
 97.23     (4) to reduce the number of substandard housing units; and 
 97.24     (5) to keep the community's housing stock usable for future 
 97.25  generations. 
 97.26     Subd. 3.  [DEFINITIONS.] (a) For the purposes of this 
 97.27  section, the terms defined in Minnesota Statutes, sections 
 97.28  469.001 to 469.047, have the meanings given to them.  The terms 
 97.29  defined in this subdivision apply to this section unless the 
 97.30  context indicates a different meaning. 
 97.31     (b) "Area of operation" means the area within the 
 97.32  territorial boundaries of the seven cities. 
 97.33     (c) "Authority" means the housing and redevelopment 
 97.34  authority in and for the I-35W Corridor Coalition. 
 97.35     (d) "Multicounty authority" means the authority. 
 97.36     (e) "State public body" means the authority. 
 98.1      Subd. 4.  [COMMISSIONERS.] The authority consists of 14 
 98.2   commissioners who shall be the mayor or acting mayor and the 
 98.3   city manager, acting city manager, city administrator, or acting 
 98.4   city administrator of each city in the authority.  The term of 
 98.5   the mayor or acting mayor is coterminous with the mayoral term 
 98.6   of office.  In the case of the city manager, acting city 
 98.7   manager, city administrator, or acting city administrator, the 
 98.8   term is five years from the date of appointment.  Each 
 98.9   commissioner has one vote. 
 98.10     Subd. 5.  [LEVY AUTHORITY.] Subject to the consent by 
 98.11  resolution of the cities in and for which a levy is created, the 
 98.12  authority may levy a tax upon all taxable property within its 
 98.13  area of operation in accordance with Minnesota Statutes, section 
 98.14  469.033, subdivision 6.  Any tax levied under this section by 
 98.15  the authority is not considered to be in addition to any tax 
 98.16  previously levied or to be levied under Minnesota Statutes, 
 98.17  section 469.033, subdivision 6.  A levy by the authority under 
 98.18  this section and a levy by any city under Minnesota Statutes, 
 98.19  section 469.033, subdivision 6, may not together exceed the levy 
 98.20  limits in that section.  The levy is effective after the 
 98.21  resolutions of consent have been adopted by all the cities in 
 98.22  the area of operation. 
 98.23     Subd. 6.  [APPROVAL OF EXISTING AUTHORITIES.] All projects, 
 98.24  redevelopment plans, or levies must be approved by the cities in 
 98.25  which they will be located, implemented, or levied.  Approval of 
 98.26  projects, redevelopment plans, or levies is not required by the 
 98.27  county in which the affected city is located or by an existing 
 98.28  housing and redevelopment authority or economic development 
 98.29  authority of the affected city. 
 98.30     Subd. 7.  [APPLICATION OF OTHER LAWS.] Provisions in 
 98.31  Minnesota Statutes, sections 469.001 to 469.047, applicable to 
 98.32  housing and redevelopment authorities also apply to the housing 
 98.33  and redevelopment authority in and for the 1-35W Corridor 
 98.34  Coalition subject to this section. 
 98.35     Subd. 8.  [SUNSET.] This section expires on December 31, 
 98.36  2013. 
 99.1      Subd. 9.  [EFFECTIVE DATE.] This section is effective for 
 99.2   the cities of Arden Hills, Blaine, Circle Pines, Mounds View, 
 99.3   New Brighton, Roseville, and Shoreview after the governing body 
 99.4   and its chief clerical officer of the last of those seven cities 
 99.5   timely complete their compliance with Minnesota Statutes, 
 99.6   section 645.021, subdivisions 2 and 3. 
 99.7      Sec. 23.  [CITY OF DETROIT LAKES.] 
 99.8      Notwithstanding limitations on the amount of increment that 
 99.9   may be pooled to eliminate a deficit under Minnesota Statutes, 
 99.10  section 469.1763, subdivision 6, the city of Detroit Lakes may 
 99.11  transfer available increments from any of its tax increment 
 99.12  financing districts to TIF District 21-1 to be used to eliminate 
 99.13  a deficit in the increment generated by TIF District 21-1 that 
 99.14  is required to pay debt service on obligations issued for the 
 99.15  district.  The authority under this section applies to deficits 
 99.16  occurring in 2000 and subsequent years.  
 99.17     [EFFECTIVE DATE.] This section is effective upon approval 
 99.18  by the governing body of Detroit Lakes and compliance with 
 99.19  Minnesota Statutes, section 645.021. 
 99.20     Sec. 24.  [CITY OF DULUTH; EXPENDITURE OF TAX INCREMENTS.] 
 99.21     Subdivision 1.  [EXPENDITURES AUTHORIZED.] Notwithstanding 
 99.22  Minnesota Statutes, section 469.1764, the Duluth economic 
 99.23  development authority may expend up to $3,000,000 of tax 
 99.24  increments collected from development district No. 3 on 
 99.25  activities located outside the geographic boundaries of the 
 99.26  district, subject to the conditions in this section. 
 99.27     Subd. 2.  [LOCATION OF EXPENDITURES.] Tax increments must 
 99.28  be spent within the area bounded by the following described 
 99.29  lines: 
 99.30     (1) to the north by a line described as follows:  beginning 
 99.31  at the intersection of the centerline of 29th Avenue West and 
 99.32  the southerly line of West Michigan Street, thence southwesterly 
 99.33  along the southerly line of West Michigan Street to the east 
 99.34  limit of the DM&IR railway right-of-way; thence northwesterly 
 99.35  along the easterly limit of the DM&IR railway right-of-way to 
 99.36  the centerline of West Superior Street to its intersection with 
100.1   the centerline of Jenswold Street; thence southwesterly along 
100.2   the centerline of Jenswold Street to its intersection with the 
100.3   centerline of the Northern Pacific Railway Company's main line 
100.4   to St. Paul; thence southwesterly along the centerline of the 
100.5   Northern Pacific Railway Company's main line to St. Paul to its 
100.6   intersection with the extended centerline of 37th Avenue West; 
100.7      (2) to the west by a line described as follows:  beginning 
100.8   at the intersection of the centerline of the Northern Pacific 
100.9   Railway Company's main line to St. Paul and the extended 
100.10  centerline of 37th Avenue West; then southeasterly along said 
100.11  extended centerline of 37th Avenue West to its intersection with 
100.12  the centerline of Interstate highway 35; 
100.13     (3) to the south by the centerline of Interstate highway 
100.14  35; and 
100.15     (4) to the east by the centerline of 29th Avenue West. 
100.16     Subd. 3.  [LIMITATIONS ON USE.] All expenditures of tax 
100.17  increments permitted by this section must meet the requirements 
100.18  of Minnesota Statutes, section 469.176, subdivision 4j. 
100.19     [EFFECTIVE DATE.] This section is effective June 1, 2003. 
100.20     Sec. 25.  [CITY OF DULUTH; TAX INCREMENT FINANCING 
100.21  DISTRICT.] 
100.22     Subdivision 1.  [AUTHORIZATION.] Upon approval of the 
100.23  governing body of the city of Duluth, the Duluth economic 
100.24  development authority may create an economic development tax 
100.25  increment financing district for aircraft related facilities.  
100.26  Except as otherwise provided in this section, the provisions of 
100.27  Minnesota Statutes, sections 469.174 to 469.179, apply to the 
100.28  district. 
100.29     Subd. 2.  [SPECIAL RULES.] (a) Notwithstanding the 
100.30  provisions of Minnesota Statutes, section 469.176, subdivision 
100.31  1b, paragraph (a), clause (3), no tax increment shall be paid to 
100.32  the authority after 25 years after receipt by the authority of 
100.33  the first tax increment for the district authorized by this 
100.34  section. 
100.35     (b) The development in the district authorized by this 
100.36  section shall be deemed to be a purpose authorized under 
101.1   Minnesota Statutes, section 469.176, subdivision 4c, paragraph 
101.2   (a). 
101.3      (c) For purposes of Minnesota Statutes, section 469.177, 
101.4   subdivision 12, the applicable maximum duration limit of the 
101.5   district authorized by this section shall be as set forth in 
101.6   paragraph (a). 
101.7      [EFFECTIVE DATE.] This section is effective upon compliance 
101.8   with the requirements of Minnesota Statutes, sections 469.1782 
101.9   and 645.021. 
101.10     Sec. 26.  [CITY OF MONTICELLO; EXTENSION OF TIME FOR 
101.11  ACTIVITY IN A TAX INCREMENT FINANCING DISTRICT.] 
101.12     The requirements of Minnesota Statutes, section 469.1763, 
101.13  subdivision 3, that activities must be undertaken within a 
101.14  five-year period from the date of certification of a tax 
101.15  increment financing district, must be considered to be met for 
101.16  the city of Monticello tax increment financing district no. 1-22 
101.17  if the activities are undertaken within ten years from the date 
101.18  of certification of the district. 
101.19     [EFFECTIVE DATE.] This section is effective upon compliance 
101.20  by the governing body of the city of Monticello with the 
101.21  requirements of Minnesota Statutes, section 645.021. 
101.22     Sec. 27.  [CITY OF NEW HOPE; TAX INCREMENT FINANCING 
101.23  DISTRICT.] 
101.24     Subdivision 1.  [SPECIAL RULES.] (a) At the election of the 
101.25  city, upon adoption of the tax increment financing plan for a 
101.26  district or districts described in this section, the rules 
101.27  provided under this section apply to each such district. 
101.28     For purposes of this section, "district" means a 
101.29  redevelopment or soils condition tax increment financing 
101.30  district established by the city of New Hope or the economic 
101.31  development authority of the city within the following area:  
101.32  beginning at the intersection of Winnetka Avenue N. and the 
101.33  westerly extension of 58th Avenue N., east on the westerly 
101.34  extension of 58th Avenue N. to Sumter Avenue N., south on Sumter 
101.35  Avenue N. to Bass Lake Road, east on Bass Lake Road to the city 
101.36  boundaries of New Hope and Crystal, MN, south along that city 
102.1   boundary to St. Raphael Drive, west on St. Raphael Drive to 
102.2   Sumter Avenue N., south on Sumter Avenue N. to 53rd Avenue N., 
102.3   west on 53rd Avenue N. to Winnetka Avenue N., north on Winnetka 
102.4   Avenue N. to 55th Avenue N., west on 55th Avenue N. to Zealand 
102.5   Avenue N., north on Zealand Avenue N. to Bass Lake Road, east on 
102.6   Bass Lake Road to Yukon Avenue N., north on Yukon Avenue N. to 
102.7   Meadow Lake Road E., east on Meadow Lake Road E. to the 
102.8   intersection with the west property line of New Hope golf 
102.9   course, south along the west property line of New Hope golf 
102.10  course to Bass Lake Road, east on Bass Lake Road to Winnetka 
102.11  Avenue N., north on Winnetka Avenue N. to the point of 
102.12  beginning.  The total number of parcels that may be included 
102.13  within all such redevelopment or soils condition tax increment 
102.14  financing districts must not exceed 131 and the total acreage, 
102.15  including roads, easements, and rights-of-way, must not exceed 
102.16  130 acres. 
102.17     (b) The five-year rule under Minnesota Statutes, section 
102.18  469.1763, subdivision 3, applies as if the limit is nine years. 
102.19     (c) The limitations on expenditure of increment outside of 
102.20  the district under Minnesota Statutes, section 469.1763, 
102.21  subdivision 2, do not apply, provided that increments may only 
102.22  be expended on improvements or activities within the area 
102.23  identified in paragraph (a).  
102.24     (d) The requirement relating to the original local tax rate 
102.25  for the district under Minnesota Statutes, section 469.177, 
102.26  subdivision 1a, does not apply.  
102.27     (e) The requirements for qualifying a redevelopment 
102.28  district under Minnesota Statutes, section 469.174, subdivision 
102.29  10, do not apply to the parcels identified as 08-118-21-22-0001, 
102.30  08-118-21-33-0008, 08-118-21-33-0009, 08-118-21-33-0010, 
102.31  08-118-21-33-0011, 08-118-21-33-0013, 08-118-21-33-0018, 
102.32  08-118-21-33-0019, 08-118-21-33-0025, 08-118-21-33-0027, 
102.33  08-118-21-33-0029, 08-118-21-33-0082, and 08-118-21-33-0087, 
102.34  which are deemed substandard for the purpose of qualifying the 
102.35  district as a redevelopment district.  
102.36     Subd. 2.  [EXPIRATION.] (a) The exception under subdivision 
103.1   1, paragraph (c), from the limitations of Minnesota Statutes, 
103.2   section 469.1763, subdivision 2, expires 20 years after the 
103.3   receipt of the first increment from a district for which the 
103.4   city has elected that this section applies.  
103.5      (b) The authority to approve tax increment financing plans 
103.6   to establish a tax increment financing district subject to this 
103.7   section expires on December 31, 2013.  
103.8      Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
103.9   approval by the governing bodies of the city of New Hope and 
103.10  Hennepin county and upon compliance by the city with Minnesota 
103.11  Statutes, section 645.021, subdivision 3. 
103.12     Sec. 28.  [CITY OF RICHFIELD; TAX INCREMENT FINANCING 
103.13  DISTRICT.] 
103.14     Subdivision 1.  [AUTHORIZATION.] The city of Richfield may 
103.15  create a tax increment financing district consisting of an area 
103.16  bordered by crosstown highway 62 on the north, 66th street on 
103.17  the south, trunk highway 77 on the east, and the east side of 
103.18  16th avenue to the west.  The city or its housing and 
103.19  redevelopment authority may be the authority for the purposes of 
103.20  Minnesota Statutes, sections 469.174 to 469.179. 
103.21     Subd. 2.  [DISTRICT IS REDEVELOPMENT DISTRICT.] The 
103.22  redevelopment tax increment district created pursuant to 
103.23  subdivision 1 is deemed to be a redevelopment district and is 
103.24  subject to Minnesota Statutes, sections 469.174 to 469.179, 
103.25  except that expenditures for activities as defined in Minnesota 
103.26  Statutes, section 469.1763, subdivision 1, paragraph (b), 
103.27  anywhere in the district are deemed to be the costs of 
103.28  correcting conditions that allow the designation of 
103.29  redevelopment districts pursuant to Minnesota Statutes, section 
103.30  469.174, subdivision 10. 
103.31     [EFFECTIVE DATE.] This section is effective upon local 
103.32  approval by the city of Richfield in compliance with Minnesota 
103.33  Statutes, section 645.021. 
103.34     Sec. 29.  [CITY OF ROSEVILLE; TAX INCREMENT FINANCING 
103.35  DISTRICT.] 
103.36     Subdivision 1.  [SPECIAL RULES.] (a) At the election of the 
104.1   city, upon adoption of the tax increment financing plan for a 
104.2   district or districts described in this section, the rules 
104.3   provided under this section apply to each such district. 
104.4      For purposes of this section, "district" means a 
104.5   redevelopment or soils condition tax increment financing 
104.6   district established by the city of Roseville or the economic 
104.7   development authority of the city within an area generally 
104.8   described as follows:  from the Northwest corner of Section 4, 
104.9   Township 29, Range 23, Ramsey County, Minnesota, south 1,265 
104.10  feet along the centerline of Cleveland Avenue to the point of 
104.11  beginning, then easterly a distance of approximately 902 feet, 
104.12  then southerly 315 feet, then easterly 416 feet to the west 
104.13  right-of-way line of the 33 foot wide Prior Avenue, then 
104.14  southerly along that line approximately 602 feet to the 
104.15  intersection with a line running southwesterly approximately 790 
104.16  feet to a point along the centerline of County Road C-2 which is 
104.17  approximately 980 feet east of its intersection with the 
104.18  centerline of Cleveland Avenue, then southerly approximately 650 
104.19  feet, then easterly 35 feet, then southerly approximately 300 
104.20  feet, then easterly 240 feet, then southerly 270 feet, then 
104.21  easterly 580 feet, then north and easterly along an irregular 
104.22  line on the eastern boundary of Langton Lake a distance of 835 
104.23  feet, then easterly 2,346 feet along the south edge of platted 
104.24  and Oasis Park property, then southerly a distance of 2,101 feet 
104.25  to the south right-of-way of County Road C, then westerly along 
104.26  the south right-of-way a distance of approximately 4,210 feet to 
104.27  the intersection with the centerline of Cleveland Avenue, then 
104.28  northerly along the Cleveland Avenue centerline a distance of 
104.29  approximately 4,371 feet to the point of beginning.  Also 
104.30  included are the additional connected public rights-of-way and 
104.31  public lands as follows:  the Terrace Drive right-of-way from 
104.32  the eastern boundary of the Business Park boundary, easterly 
104.33  approximately 1,000 feet to the intersection with the western 
104.34  right-of-way of Snelling Avenue; the County Road C right-of-way 
104.35  from the eastern boundary of the Business Park boundary, 
104.36  easterly approximately 1,080 feet to the intersection with the 
105.1   centerline of Snelling Avenue; and the area generally west of 
105.2   Cleveland Avenue between Cleveland Avenue and marked Interstate 
105.3   Highway 35W, from County Road C approximately 3,000 feet north, 
105.4   encompassing entry ramps, wetlands, and regional storm water 
105.5   storage ponds. 
105.6      (b) The five-year rule under Minnesota Statutes, section 
105.7   469.1763, subdivision 3, applies as if the limit is nine years. 
105.8      (c) The limitations on expenditure of increment outside of 
105.9   the district under Minnesota Statutes, section 469.1763, 
105.10  subdivision 2, do not apply, provided that increments may only 
105.11  be expended on improvements or activities within the areas 
105.12  identified in paragraph (a). 
105.13     (d) The requirement relating to the original local tax rate 
105.14  for the district under Minnesota Statutes, section 469.177, 
105.15  subdivision 1a, does not apply. 
105.16     Subd. 2.  [APPLICATION OF OTHER LAWS.] All references in 
105.17  Minnesota Statutes to tax increment financing districts created 
105.18  and tax increments generated under Minnesota Statutes, sections 
105.19  469.174 to 469.1799, apply subject to this section, provided 
105.20  that Minnesota Statutes, sections 469.174 to 469.1799, apply 
105.21  only to the extent specified in this section. 
105.22     Subd. 3.  [EXPIRATION.] (a) The exception under subdivision 
105.23  1, paragraph (c), from the limitations of Minnesota Statutes, 
105.24  section 469.1763, subdivision 2, expires 20 years after the 
105.25  receipt of the first increment from a district for which the 
105.26  city has elected that this section applies. 
105.27     (b) The authority to approve tax increment financing plans 
105.28  to establish a tax increment financing district subject to this 
105.29  section expires on December 31, 2013. 
105.30     [EFFECTIVE DATE.] This section is effective upon approval 
105.31  by the governing bodies of the city of Roseville and Ramsey 
105.32  county and upon compliance by the the city with Minnesota 
105.33  Statutes, section 645.021, subdivision 3. 
105.34     Sec. 30.  [CITY OF ST. MICHAEL; TAX INCREMENT FINANCING 
105.35  DISTRICT.] 
105.36     Subdivision 1.  [ESTABLISHMENT OF DISTRICT.] The city of St.
106.1   Michael may establish a redevelopment tax increment financing 
106.2   district subject to Minnesota Statutes, sections 469.174 to 
106.3   469.179, except as provided in this section.  The district must 
106.4   be established within an area that includes the downtown and 
106.5   town center areas as designated by the city as well as all 
106.6   parcels adjacent to marked trunk highway 241 within the city. 
106.7      Subd. 2.  [SPECIAL RULES.] (a) Notwithstanding the 
106.8   requirements of Minnesota Statutes, section 469.174, subdivision 
106.9   10, the district may be established and operated as a 
106.10  redevelopment district. 
106.11     (b) Notwithstanding the restrictions of Minnesota Statutes, 
106.12  sections 469.176, subdivisions 4 and 4j, and 469.1763, 
106.13  subdivision 2, revenues derived from tax increments from the 
106.14  district created under this section may be used to meet the cost 
106.15  of land acquisition, removal of buildings in the right-of-way 
106.16  acquisition area, and other costs incurred by the city of St. 
106.17  Michael in the expansion and improvement of marked trunk highway 
106.18  241 within the city. 
106.19     (c) Minnesota Statutes, section 469.176, subdivision 5, 
106.20  does not apply to the district. 
106.21     [EFFECTIVE DATE.] This section is effective the day after 
106.22  the governing body of the city of St. Michael complies with 
106.23  Minnesota Statutes, section 645.021, subdivision 3. 
106.24     Sec. 31.  [KANDIYOHI COUNTY AND CITY OF WILLMAR.] 
106.25     Subdivision 1.  [POWERS.] Notwithstanding Minnesota 
106.26  Statutes, sections 469.090 and 469.1082, Kandiyohi county may 
106.27  exercise the powers of a city under Minnesota Statutes, sections 
106.28  469.090 to 469.107.  Kandiyohi county and the city of Willmar 
106.29  may enter into a joint powers agreement under Minnesota 
106.30  Statutes, section 471.59, to jointly or cooperatively exercise 
106.31  any of the powers common to both the county and the city under 
106.32  Minnesota Statutes, sections 469.090 to 469.107, in a manner to 
106.33  be determined by a majority of the Kandiyohi county board and 
106.34  the Willmar city council.  
106.35     Subd. 2.  [SPECIAL TAXING DISTRICT.] A joint powers entity 
106.36  created under this section is a political subdivision of the 
107.1   state and a special taxing district as defined by Minnesota 
107.2   Statutes, section 275.066, clause (24), with the power to adopt 
107.3   and certify a property tax levy to the county auditor.  
107.4      Subd. 3.  [EFFECTIVE DATE; NO LOCAL APPROVAL 
107.5   REQUIRED.] Under Minnesota Statutes, section 645.023, 
107.6   subdivision 1, paragraph (a), no local approval of this section 
107.7   is required. 
107.8      [EFFECTIVE DATE.] This sections is effective the day after 
107.9   final enactment. 
107.10     Sec. 32. ?CITY OF HOPKINS; TAX INCREMENT FINANCING 
107.11  DISTRICT; EXTENSION OF FIVE-YEAR RULE.] 
107.12     The requirements of Minnesota Statutes, section 469.1763, 
107.13  subdivision 3, that activities must be undertaken within a 
107.14  five-year period from the date of certification of tax increment 
107.15  financing district must be considered to be met for the city of 
107.16  Hopkins redevelopment tax increment district 2-11, if the 
107.17  activities are undertaken within ten years from the date of 
107.18  certification of the district. 
107.19     [EFFECTIVE DATE.] This section is effective upon compliance 
107.20  by the governing body of the city of Hopkins with the provisions 
107.21  of Minnesota Statutes, section 645.021. 
107.22     Sec. 33.  [CITIES OF ELGIN, EYOTA, BYRON, AND ORONOCO; TAX 
107.23  INCREMENT FINANCING DISTRICTS.] 
107.24     Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
107.25  mileage limitation in Minnesota Statutes, section 469.174, 
107.26  subdivision 27, the cities of Elgin, Eyota, Byron, and Oronoco 
107.27  are deemed to be small cities for purposes of Minnesota 
107.28  Statutes, sections 469.174 to 469.1799, as long as they do not 
107.29  exceed the population limit in that section. 
107.30     Subd. 2.  [LOCAL APPROVAL.] This section is available for 
107.31  each of the cities of Elgin, Eyota, Byron, and Oronoco upon 
107.32  approval of that city's governing body and compliance with 
107.33  Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
107.34                             ARTICLE 5
107.35                           PUBLIC FINANCE 
107.36     Section 1.  [37.31] [ISSUANCE OF BONDS.] 
108.1      Subdivision 1.  [BONDING AUTHORITY.] The society may issue 
108.2   negotiable bonds in a principal amount that the society 
108.3   determines necessary to provide sufficient money for achieving 
108.4   its purposes, including the payment of interest on bonds of the 
108.5   society, the establishment of reserves to secure its bonds, the 
108.6   payment of fees to a third party providing credit enhancement, 
108.7   and the payment of all other expenditures of the society 
108.8   incident to and necessary or convenient to carry out its 
108.9   corporate purposes and powers.  Bonds of the society may be 
108.10  issued as bonds or notes or in any other form authorized by 
108.11  law.  The principal amount of bonds issued and outstanding under 
108.12  this section at any time may not exceed $20,000,000, excluding 
108.13  bonds for which refunding bonds or crossover refunding bonds 
108.14  have been issued.  
108.15     Subd. 2.  [REFUNDING OF BONDS.] The society may issue bonds 
108.16  to refund outstanding bonds of the society, to pay any 
108.17  redemption premiums on those bonds, and to pay interest accrued 
108.18  or to accrue to the redemption date next succeeding the date of 
108.19  delivery of the refunding bonds.  The society may apply the 
108.20  proceeds of any refunding bonds to the purchase or payment at 
108.21  maturity of the bonds to be refunded, or to the redemption of 
108.22  outstanding bonds on the redemption date next succeeding the 
108.23  date of delivery of the refunding bonds and may, pending the 
108.24  application, place the proceeds in escrow to be applied to the 
108.25  purchase, retirement, or redemption of the bonds.  Pending use, 
108.26  escrowed proceeds may be invested and reinvested in obligations 
108.27  issued or guaranteed by the state or the United States or by any 
108.28  agency or instrumentality of the state or the United States, or 
108.29  in certificates of deposit or time deposits secured in a manner 
108.30  determined by the society, maturing at a time appropriate to 
108.31  assure the prompt payment of the principal and interest and 
108.32  redemption premiums, if any, on the bonds to be refunded.  The 
108.33  income realized on any investment may also be applied to the 
108.34  payment of the bonds to be refunded.  After the terms of the 
108.35  escrow have been fully satisfied, any balance of the proceeds 
108.36  and any investment income may be returned to the society for use 
109.1   by it in any lawful manner.  All refunding bonds issued under 
109.2   this subdivision must be issued and secured in the manner 
109.3   provided by resolution of the society. 
109.4      Subd. 3.  [KIND OF BONDS.] Bonds issued under this section 
109.5   must be negotiable investment securities within the meaning and 
109.6   for all purposes of the Uniform Commercial Code, subject only to 
109.7   the provisions of the bonds for registration.  The bonds issued 
109.8   must be limited obligations of the society not secured by its 
109.9   full faith and credit and payable solely from specified sources 
109.10  or assets.  
109.11     Subd. 4.  [RESOLUTION AND TERMS OF SALE.] The bonds of the 
109.12  society must be authorized by a resolution or resolutions 
109.13  adopted by the society.  The bonds must bear the date or dates, 
109.14  mature at the time or times, bear interest at a fixed or 
109.15  variable rate, including a rate varying periodically at the time 
109.16  or times and on the terms determined by the society, or any 
109.17  combination of fixed and variable rates, be in the 
109.18  denominations, be in the form, carry the registration 
109.19  privileges, be executed in the manner, be payable in lawful 
109.20  money of the United States, at the place or places within or 
109.21  without the state, and be subject to the terms of redemption or 
109.22  purchase before maturity as the resolutions or certificates 
109.23  provide.  If, for any reason existing at the date of issue of 
109.24  the bonds or existing at the date of making or purchasing any 
109.25  loan or securities from the proceeds or after that date, the 
109.26  interest on the bonds is or becomes subject to federal income 
109.27  taxation, this fact does not affect the validity or the 
109.28  provisions made for the security of the bonds.  The society may 
109.29  make covenants and take or have taken actions that are in its 
109.30  judgment necessary or desirable to comply with conditions 
109.31  established by federal law or regulations for the exemption of 
109.32  interest on its obligations.  The society may refrain from 
109.33  compliance with those conditions if in its judgment this would 
109.34  serve the purposes and policies set forth in this chapter with 
109.35  respect to any particular issue of bonds, unless this would 
109.36  violate covenants made by the society.  The maximum maturity of 
110.1   a bond, whether or not issued for the purpose of refunding, must 
110.2   be 30 years from its date.  The bonds of the society may be sold 
110.3   at public or private sale, at a price or prices determined by 
110.4   the society; provided that: 
110.5      (1) the aggregate price at which an issue of bonds is 
110.6   initially offered by underwriters to investors, as stated in the 
110.7   authority's official statement with respect to the offering, 
110.8   must not exceed by more than three percent the aggregate price 
110.9   paid by the underwriters to the society at the time of delivery; 
110.10     (2) the commission paid by the society to an underwriter 
110.11  for placing an issue of bonds with investors must not exceed 
110.12  three percent of the aggregate price at which the issue is 
110.13  offered to investors as stated in the society's offering 
110.14  statement; and 
110.15     (3) the spread or commission must be an amount determined 
110.16  by the society to be reasonable in light of the risk assumed and 
110.17  the expenses of issuance, if any, required to be paid by the 
110.18  underwriters.  
110.19     Subd. 5.  [EXEMPTION.] The notes and bonds of the society 
110.20  are not subject to sections 16C.03, subdivision 4, and 16C.05. 
110.21     Subd. 6.  [RESERVES; FUNDS; ACCOUNTS.] The society may 
110.22  establish reserves, funds, or accounts necessary to carry out 
110.23  the purposes of the society or to comply with any agreement made 
110.24  by or any resolution passed by the society. 
110.25     Sec. 2.  [37.32] [TENDER OPTION.] 
110.26     An obligation may be issued giving its owner the right to 
110.27  tender or the society to demand tender of the obligation to the 
110.28  society or another person designated by it, for purchase at a 
110.29  specified time or times, if the society has first entered into 
110.30  an agreement with a suitable financial institution obligating 
110.31  the financial institution to provide funds on a timely basis for 
110.32  purchase of bonds tendered.  The obligation is not considered to 
110.33  mature on any tender date and the purchase of a tendered 
110.34  obligation is not considered a payment or discharge of the 
110.35  obligation by the society.  Obligations tendered for purchase 
110.36  may be remarketed by or on behalf of the society or another 
111.1   purchaser.  The society may enter into agreements it considers 
111.2   appropriate to provide for the purchase and remarketing of 
111.3   tendered obligations, including: 
111.4      (1) provisions under which undelivered obligations may be 
111.5   considered tendered for purchase and new obligations may be 
111.6   substituted for them; 
111.7      (2) provisions for the payment of charges of tender agents, 
111.8   remarketing agents, and financial institutions extending lines 
111.9   of credit or letters of credit assuring repurchase; and 
111.10     (3) provisions for reimbursement of advances under letters 
111.11  of credit that may be paid from the proceeds of the obligations 
111.12  or from tax and other revenues appropriated for the payment and 
111.13  security of the obligations and similar or related provisions. 
111.14     Sec. 3.  [37.33] [BOND FUND.] 
111.15     Subdivision 1.  [CREATION AND CONTENTS.] The society may 
111.16  establish a special fund or funds for the security of one or 
111.17  more or all series of its bonds.  The funds must be known as 
111.18  debt service reserve funds.  The society may pay into each debt 
111.19  service reserve fund: 
111.20     (1) the proceeds of sale of bonds to the extent provided in 
111.21  the resolution or indenture authorizing the issuance of them; 
111.22     (2) money directed to be transferred by the society to the 
111.23  debt service reserve fund; and 
111.24     (3) other money made available to the society from any 
111.25  other source only for the purpose of the fund. 
111.26     Subd. 2.  [USE OF FUNDS.] Except as provided in this 
111.27  section, the money credited to each debt service reserve fund 
111.28  must be used only for the payment of the principal of bonds of 
111.29  the society as they mature, the purchase of the bonds, the 
111.30  payment of interest on them, or the payment of any premium 
111.31  required when the bonds are redeemed before maturity.  Money in 
111.32  a debt service reserve fund must not be withdrawn at a time and 
111.33  in an amount that reduces the amount of the fund to less than 
111.34  the amount the society determines to be reasonably necessary for 
111.35  the purposes of the fund.  However, money may be withdrawn to 
111.36  pay principal or interest due on bonds secured by the fund if 
112.1   other money of the society is not available. 
112.2      Subd. 3.  [INVESTMENT.] Money in a debt service reserve 
112.3   fund not required for immediate use may be invested in 
112.4   accordance with section 37.07. 
112.5      Subd. 4.  [MINIMUM AMOUNT OF RESERVE AT ISSUANCE.] If the 
112.6   society establishes a debt service reserve fund for the security 
112.7   of any series of bonds, it shall not issue additional bonds that 
112.8   are similarly secured if the amount of any of the debt service 
112.9   reserve funds at the time of issuance does not equal or exceed 
112.10  the minimum amount required by the resolution creating the fund, 
112.11  unless the society deposits in each fund at the time of 
112.12  issuance, from the proceeds of the bonds, or otherwise, an 
112.13  amount that when added together with the amount then in the fund 
112.14  will be at least the minimum amount required. 
112.15     Subd. 5.  [TRANSFER OF EXCESS.] To the extent consistent 
112.16  with the resolutions and indentures securing outstanding bonds, 
112.17  the society may at the close of a fiscal year transfer to any 
112.18  other fund or account from any debt service reserve fund any 
112.19  excess in that reserve fund over the amount determined by the 
112.20  society to be reasonably necessary for the purpose of the 
112.21  reserve fund. 
112.22     Sec. 4.  [37.34] [MONEY OF THE SOCIETY.] 
112.23     The society may contract with the holders of any of its 
112.24  bonds as to the custody, collection, securing, investment, and 
112.25  payment of money of the society or money held in trust or 
112.26  otherwise for the payment of bonds, and to carry out the 
112.27  contract.  Money held in trust or otherwise for the payment of 
112.28  bonds or in any way to secure bonds and deposits of the money 
112.29  may be secured in the same manner as money of the society, and 
112.30  all banks and trust companies are authorized to give security 
112.31  for the deposits.  
112.32     Sec. 5.  [37.35] [NONLIABILITY.] 
112.33     Subdivision 1.  [NONLIABILITY OF INDIVIDUALS.] No member of 
112.34  the society or other person executing the bonds is liable 
112.35  personally on the bonds or is subject to any personal liability 
112.36  or accountability by reason of their issuance.  
113.1      Subd. 2.  [NONLIABILITY OF STATE.] The state is not liable 
113.2   on bonds of the society issued under section 37.31 and those 
113.3   bonds are not a debt of the state.  The bonds must contain on 
113.4   their face a statement to that effect. 
113.5      Sec. 6.  [37.36] [PURCHASE AND CANCELLATION BY SOCIETY.] 
113.6      Subject to agreements with bondholders that may then exist, 
113.7   the society may purchase out of money available for the purpose, 
113.8   bonds of the society which shall then be canceled, at a price 
113.9   not exceeding the following amounts: 
113.10     (1) if the bonds are then redeemable, the redemption price 
113.11  then applicable plus accrued interest to the next interest 
113.12  payment date of the bonds; or 
113.13     (2) if the bonds are not redeemable, the redemption price 
113.14  applicable on the first date after the purchase upon which the 
113.15  bonds become subject to redemption plus accrued interest to that 
113.16  date. 
113.17     Sec. 7.  [37.37] [STATE PLEDGE AGAINST IMPAIRMENT OF 
113.18  CONTRACTS.] 
113.19     The state pledges and agrees with the holders of bonds 
113.20  issued under section 37.31 that the state will not limit or 
113.21  alter the rights vested in the society to fulfill the terms of 
113.22  any agreements made with the bondholders or in any way impair 
113.23  the rights and remedies of the holders until the bonds, together 
113.24  with interest on them, with interest on any unpaid installments 
113.25  of interest, and all costs and expenses in connection with any 
113.26  action or proceeding by or on behalf of the bondholders, are 
113.27  fully met and discharged.  The society may include this pledge 
113.28  and agreement of the state in any agreement with the holders of 
113.29  bonds issued under section 37.31. 
113.30     Sec. 8.  Minnesota Statutes 2002, section 373.01, 
113.31  subdivision 3, is amended to read: 
113.32     Subd. 3.  [CAPITAL NOTES.] A county board may, by 
113.33  resolution and without referendum, issue capital notes subject 
113.34  to the county debt limit to purchase capital equipment useful 
113.35  for county purposes that has an expected useful life at least 
113.36  equal to the term of the notes.  The notes shall be payable in 
114.1   not more than five years and shall be issued on terms and in a 
114.2   manner the board determines.  A tax levy shall be made for 
114.3   payment of the principal and interest on the notes, in 
114.4   accordance with section 475.61, as in the case of bonds.  For 
114.5   purposes of this subdivision, "capital equipment" means public 
114.6   safety, ambulance, road construction or maintenance, and medical 
114.7   , and data processing equipment, and computer hardware and 
114.8   original operating system software. 
114.9      Sec. 9.  Minnesota Statutes 2002, section 373.45, 
114.10  subdivision 1, is amended to read: 
114.11     Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
114.12  the following terms have the meanings given. 
114.13     (b) "Authority" means the Minnesota public facilities 
114.14  authority. 
114.15     (c) "Commissioner" means the commissioner of finance. 
114.16     (d) "Debt obligation" means a general obligation bond 
114.17  issued by a county, or a bond payable from a county lease 
114.18  obligation under section 641.24, to provide funds for the 
114.19  construction of: 
114.20     (1) jails; 
114.21     (2) correctional facilities; 
114.22     (3) law enforcement facilities; 
114.23     (4) social services and human services facilities; or 
114.24     (5) solid waste facilities. 
114.25     Sec. 10.  Minnesota Statutes 2002, section 373.47, 
114.26  subdivision 1, is amended to read: 
114.27     Subdivision 1.  [AUTHORITY TO INCUR DEBT.] (a) Subject to 
114.28  prior approval by the public safety radio system planning 
114.29  committee under section 473.907, the governing body of a county 
114.30  may finance the cost of designing, constructing, and acquiring 
114.31  public safety communication system infrastructure and equipment 
114.32  for use on the statewide, shared public safety radio system by 
114.33  issuing: 
114.34     (1) capital improvement bonds under section 373.40, as if 
114.35  the infrastructure and equipment qualified as a "capital 
114.36  improvement" within the meaning of section 373.40, subdivision 
115.1   1, paragraph (b); and 
115.2      (2) capital notes under the provisions of section 373.01, 
115.3   subdivision 3, as if the equipment qualified as "capital 
115.4   equipment" within the meaning of section 373.01, subdivision 3. 
115.5      (b) For purposes of this section, "county" means the 
115.6   following counties:  Anoka, Benton, Carver, Chisago, Dakota, 
115.7   Dodge, Fillmore, Freeborn, Goodhue, Hennepin, Houston, Isanti, 
115.8   Mower, Olmsted, Ramsey, Rice, Scott, Sherburne, Steele, Wabasha, 
115.9   Washington, Wright, and Winona. 
115.10     (c) The authority to incur debt under this section is not 
115.11  effective until July 1, 2003, for the following counties:  
115.12  Benton, Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower, 
115.13  Olmsted, Rice, Sherburne, Steele, Wabasha, Wright, and Winona. 
115.14     Sec. 11.  Minnesota Statutes 2002, section 376.009, is 
115.15  amended to read: 
115.16     376.009 [COUNTY HOSPITAL DEFINED; MAY HAVE MANY BUILDINGS, 
115.17  SITES.] 
115.18     For the purposes of sections 376.01 to 376.06, "county 
115.19  hospital" means any hospital owned or operated by a county which 
115.20  may consist of any number of buildings at one location or any 
115.21  number of buildings at different locations within the 
115.22  county.  The county board of any county that has not established 
115.23  a county hospital may by resolution authorize a statutory or 
115.24  home rule charter city in the county and its city council to 
115.25  exercise the powers of a county and the county board under 
115.26  sections 376.01 to 376.07, in which case references in sections 
115.27  376.01 to 376.07 to "county" and "county board" refer to the 
115.28  city so designated and its governing body, respectively. 
115.29     Sec. 12.  Minnesota Statutes 2002, section 376.55, 
115.30  subdivision 3, is amended to read: 
115.31     Subd. 3.  [FINANCING.] The county board may transfer 
115.32  surplus funds from any fund except the road and bridge, sinking 
115.33  or drainage ditch funds for the purpose of 
115.34  establishing, acquiring, maintaining, enlarging, or adding to a 
115.35  county nursing home.  When surplus funds are not available for 
115.36  transfer, a county board may issue bonds to pay the cost of 
116.1   establishing, acquiring, equipping, furnishing, enlarging, or 
116.2   adding to a county nursing home, subject to section 376.56. 
116.3      Sec. 13.  Minnesota Statutes 2002, section 376.55, is 
116.4   amended by adding a subdivision to read: 
116.5      Subd. 7.  [CITY POWERS.] The county board of any county 
116.6   that has not established a nursing home may by resolution 
116.7   authorize a statutory or home rule charter city within the 
116.8   county to exercise the powers of a county under sections 376.55 
116.9   to 376.60.  A city so designated may exercise within its 
116.10  boundaries all the powers of a county under sections 376.55 to 
116.11  376.60. 
116.12     Sec. 14.  Minnesota Statutes 2002, section 376.56, 
116.13  subdivision 3, is amended to read: 
116.14     Subd. 3.  [CHAPTER 475 BONDS.] Bonds issued under section 
116.15  376.55, subdivision 3, may be general obligations of the county 
116.16  and may be issued and sold, and taxes levied for their payment 
116.17  as provided under chapter 475.  No election shall be required to 
116.18  authorize the bond issue for acquiring, improving, remodeling, 
116.19  or replacing an existing nursing home without increasing the 
116.20  total number of accommodations for residents in all nursing 
116.21  homes in the county.  The revenues of the nursing home shall 
116.22  also be pledged for the payment of the bonds and for any 
116.23  interest and premium.  Part of the proceeds may be deposited in 
116.24  the debt service fund for the issue, to capitalize interest and 
116.25  create a reserve to reduce or eliminate the tax otherwise 
116.26  required by section 475.61 to be levied before issuing the 
116.27  bonds.  The remaining proceeds from the sale of the bonds and 
116.28  any surplus funds transferred under section 376.55, subdivision 
116.29  3 must be credited to and deposited in the county nursing home 
116.30  building fund of the county in which the nursing home is located.
116.31     Sec. 15.  Minnesota Statutes 2002, section 383B.77, 
116.32  subdivision 1, is amended to read: 
116.33     Subdivision 1.  [CREATION.] The Hennepin county housing and 
116.34  redevelopment authority is created in the county of Hennepin.  
116.35  It shall have all of the powers and duties of a housing and 
116.36  redevelopment authority under sections 469.001 to 469.047.  For 
117.1   the purposes of applying the municipal housing and redevelopment 
117.2   act to Hennepin county, the county has all of the powers and 
117.3   duties of a city, the county board has all the powers and duties 
117.4   of a governing body, the chair of the county board has all of 
117.5   the powers and duties of a mayor, and, notwithstanding section 
117.6   469.008, the area of operation includes the area within the 
117.7   territorial boundaries of the county. 
117.8      Sec. 16.  Minnesota Statutes 2002, section 383B.77, 
117.9   subdivision 2, is amended to read: 
117.10     Subd. 2.  [LIMITATION.] This section does not limit or 
117.11  restrict any existing housing and redevelopment authority or 
117.12  prevent a municipality from creating an authority.  For purposes 
117.13  of this subdivision, "housing and redevelopment authority" 
117.14  includes any municipal department, agency, or authority of the 
117.15  city of Minneapolis which exercises the powers of a housing and 
117.16  redevelopment authority pursuant to section 469.003 or other 
117.17  law.  The county authority shall notify a municipal authority by 
117.18  January 31 of each year as to the activities the county 
117.19  authority plans to participate in within the municipality.  The 
117.20  municipal authority shall notify the county authority within 45 
117.21  days of the date of the notice from the county authority, if the 
117.22  municipal authority does not consent to the activities of the 
117.23  county authority.  The county authority shall not exercise its 
117.24  powers in a municipality where a housing and redevelopment 
117.25  authority was created under Minnesota Statutes 1969, chapter 
117.26  462, before June 8, 1971, except as provided in this 
117.27  subdivision.  If a city housing and redevelopment authority 
117.28  requests the county housing and redevelopment authority to 
117.29  exercise any power or perform any function of the municipal 
117.30  authority, the county authority may do so. 
117.31     Sec. 17.  Minnesota Statutes 2002, section 410.32, is 
117.32  amended to read: 
117.33     410.32 [CITIES MAY ISSUE CAPITAL NOTES TO BUY CAPITAL 
117.34  EQUIPMENT.] 
117.35     Notwithstanding any contrary provision of other law or 
117.36  charter, a home rule charter city may, by resolution and without 
118.1   public referendum, issue capital notes subject to the city debt 
118.2   limit to purchase public safety equipment, ambulance and other 
118.3   medical equipment, road construction and maintenance equipment, 
118.4   and other capital equipment having and computer hardware and 
118.5   original operating system software, provided the equipment or 
118.6   software has an expected useful life at least as long as the 
118.7   term of the notes.  The notes shall be payable in not more than 
118.8   five years and be issued on terms and in the manner the city 
118.9   determines.  The total principal amount of the capital notes 
118.10  issued in a fiscal year shall not exceed 0.03 percent of the 
118.11  market value of taxable property in the city for that year.  A 
118.12  tax levy shall be made for the payment of the principal and 
118.13  interest on the notes, in accordance with section 475.61, as in 
118.14  the case of bonds.  Notes issued under this section shall 
118.15  require an affirmative vote of two-thirds of the governing body 
118.16  of the city.  Notwithstanding a contrary provision of other law 
118.17  or charter, a home rule charter city may also issue capital 
118.18  notes subject to its debt limit in the manner and subject to the 
118.19  limitations applicable to statutory cities pursuant to section 
118.20  412.301. 
118.21     Sec. 18.  [410.326] [CAPITAL IMPROVEMENT BONDS.] 
118.22     Subdivision 1.  [DEFINITIONS.] For purposes of this 
118.23  section, the following terms have the meanings given. 
118.24     (a) "Bonds" mean an obligation defined under section 475.51.
118.25     (b) "Capital improvement" means acquisition or betterment 
118.26  of public lands, development rights in the form of conservation 
118.27  easements under chapter 84C, buildings or other improvements for 
118.28  the purpose of a city hall, administrative building, public 
118.29  safety, public works facility, parks, library, and roads and 
118.30  bridges.  An improvement must have an expected useful life of 
118.31  five years or more to qualify.  Capital improvement does not 
118.32  include light rail transit or any activity related to it or to a 
118.33  recreational or sports facility building, including, but not 
118.34  limited to, a gymnasium, ice arena, racquet sports facility, 
118.35  swimming pool, exercise room, or health spa, unless the building 
118.36  is part of an outdoor park and is incidental to the primary 
119.1   purpose of outdoor recreation. 
119.2      (c) "City" means a home rule charter or statutory city. 
119.3      Subd. 2.  [ELECTION REQUIREMENT.] (a) Bonds issued by a 
119.4   city to finance capital improvements under an approved capital 
119.5   improvements plan are not subject to the election requirements 
119.6   of section 475.58.  The bonds are subject to the net debt limits 
119.7   under section 475.53.  The bonds must be approved by an 
119.8   affirmative vote of three-fifths of the members of a five-member 
119.9   city council.  In the case of a city council having more than 
119.10  five members, the bonds must be approved by a vote of at least 
119.11  two-thirds of the city council. 
119.12     (b) Before the issuance of bonds qualifying under this 
119.13  section, the city must publish a notice of its intention to 
119.14  issue the bonds and the date and time of the hearing to obtain 
119.15  public comment on the matter.  The notice must be published in 
119.16  the official newspaper of the city or in a newspaper of general 
119.17  circulation in the city.  Additionally, the notice may be posted 
119.18  on the official Web site, if any, of the city.  The notice must 
119.19  be published at least 14 but not more than 28 days before the 
119.20  date of the hearing. 
119.21     (c) A city may issue the bonds only after obtaining the 
119.22  approval of a majority of the voters voting on the question of 
119.23  issuing the obligations, if a petition requesting a vote on the 
119.24  issuance is signed by voters equal to five percent of the votes 
119.25  cast in the city in the last general election and is filed with 
119.26  the city clerk within 30 days after the public hearing.  The 
119.27  commissioner of revenue shall prepare a suggested form of the 
119.28  question to be presented at the election. 
119.29     Subd. 3.  [CAPITAL IMPROVEMENT PLAN.] (a) A city may adopt 
119.30  a capital improvement plan.  The plan must cover at least a 
119.31  five-year period beginning with the date of its adoption.  The 
119.32  plan must set forth the estimated schedule, timing, and details 
119.33  of specific capital improvements by year, together with the 
119.34  estimated cost, the need for the improvement, and sources of 
119.35  revenue to pay for the improvement.  In preparing the capital 
119.36  improvement plan, the city council must consider for each 
120.1   project and for the overall plan: 
120.2      (1) the condition of the city's existing infrastructure, 
120.3   including the projected need for repair or replacement; 
120.4      (2) the likely demand for the improvement; 
120.5      (3) the estimated cost of the improvement; 
120.6      (4) the available public resources; 
120.7      (5) the level of overlapping debt in the city; 
120.8      (6) the relative benefits and costs of alternative uses of 
120.9   the funds; 
120.10     (7) operating costs of the proposed improvements; and 
120.11     (8) alternatives for providing services most efficiently 
120.12  through shared facilities with other cities or local government 
120.13  units. 
120.14     (b) The capital improvement plan and annual amendments to 
120.15  it must be approved by the city council after public hearing. 
120.16     Subd. 4.  [LIMITATIONS ON AMOUNT.] A city may not issue 
120.17  bonds under this section if the maximum amount of principal and 
120.18  interest to become due in any year on all the outstanding bonds 
120.19  issued under this section, including the bonds to be issued, 
120.20  will equal or exceed 0.05367 percent of taxable market value of 
120.21  property in the county.  Calculation of the limit must be made 
120.22  using the taxable market value for the taxes payable year in 
120.23  which the obligations are issued and sold.  This section does 
120.24  not limit the authority to issue bonds under any other special 
120.25  or general law. 
120.26     Subd. 5.  [APPLICATION OF CHAPTER 475.] Bonds to finance 
120.27  capital improvements qualifying under this section must be 
120.28  issued under the issuance authority in chapter 475 and the 
120.29  provisions of chapter 475 apply, except as otherwise 
120.30  specifically provided in this section. 
120.31     Sec. 19.  Minnesota Statutes 2002, section 412.301, is 
120.32  amended to read: 
120.33     412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 
120.34     The council may issue certificates of indebtedness or 
120.35  capital notes subject to the city debt limits to purchase public 
120.36  safety equipment, ambulance equipment, road construction or 
121.1   maintenance equipment, and other capital equipment having and 
121.2   computer hardware and original operating system software, 
121.3   provided the equipment or software has an expected useful life 
121.4   at least as long as the terms of the certificates or notes.  
121.5   Such certificates or notes shall be payable in not more than 
121.6   five years and except that certificates or notes issued after 
121.7   June 30, 2003, and before July 1, 2008, shall be payable in not 
121.8   more than ten years.  The certificates or notes shall be issued 
121.9   on such terms and in such manner as the council may determine.  
121.10  If the amount of the certificates or notes to be issued to 
121.11  finance any such purchase exceeds 0.25 percent of the market 
121.12  value of taxable property in the city, they shall not be issued 
121.13  for at least ten days after publication in the official 
121.14  newspaper of a council resolution determining to issue them; and 
121.15  if before the end of that time, a petition asking for an 
121.16  election on the proposition signed by voters equal to ten 
121.17  percent of the number of voters at the last regular municipal 
121.18  election is filed with the clerk, such certificates or notes 
121.19  shall not be issued until the proposition of their issuance has 
121.20  been approved by a majority of the votes cast on the question at 
121.21  a regular or special election.  A tax levy shall be made for the 
121.22  payment of the principal and interest on such certificates or 
121.23  notes, in accordance with section 475.61, as in the case of 
121.24  bonds.  
121.25     Sec. 20.  Minnesota Statutes 2002, section 469.175, 
121.26  subdivision 3, is amended to read: 
121.27     Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
121.28  not certify the original net tax capacity of a tax increment 
121.29  financing district until the tax increment financing plan 
121.30  proposed for that district has been approved by the municipality 
121.31  in which the district is located.  If an authority that proposes 
121.32  to establish a tax increment financing district and the 
121.33  municipality are not the same, the authority shall apply to the 
121.34  municipality in which the district is proposed to be located and 
121.35  shall obtain the approval of its tax increment financing plan by 
121.36  the municipality before the authority may use tax increment 
122.1   financing.  The municipality shall approve the tax increment 
122.2   financing plan only after a public hearing thereon after 
122.3   published notice in a newspaper of general circulation in the 
122.4   municipality at least once not less than ten days nor more than 
122.5   30 days prior to the date of the hearing.  The published notice 
122.6   must include a map of the area of the district from which 
122.7   increments may be collected and, if the project area includes 
122.8   additional area, a map of the project area in which the 
122.9   increments may be expended.  The hearing may be held before or 
122.10  after the approval or creation of the project or it may be held 
122.11  in conjunction with a hearing to approve the project.  Before or 
122.12  at the time of approval of the tax increment financing plan, the 
122.13  municipality shall make the following findings, and shall set 
122.14  forth in writing the reasons and supporting facts for each 
122.15  determination: 
122.16     (1) that the proposed tax increment financing district is a 
122.17  redevelopment district, a renewal or renovation district, a 
122.18  housing district, a soils condition district, or an economic 
122.19  development district; if the proposed district is a 
122.20  redevelopment district or a renewal or renovation district, the 
122.21  reasons and supporting facts for the determination that the 
122.22  district meets the criteria of section 469.174, subdivision 10, 
122.23  paragraph (a), clauses (1) and (2), or subdivision 10a, must be 
122.24  documented in writing and retained and made available to the 
122.25  public by the authority until the district has been terminated; 
122.26     (2) that the proposed development or redevelopment, in the 
122.27  opinion of the municipality, would not reasonably be expected to 
122.28  occur solely through private investment within the reasonably 
122.29  foreseeable future and that the increased market value of the 
122.30  site that could reasonably be expected to occur without the use 
122.31  of tax increment financing would be less than the increase in 
122.32  the market value estimated to result from the proposed 
122.33  development after subtracting the present value of the projected 
122.34  tax increments for the maximum duration of the district 
122.35  permitted by the plan.  The requirements of this clause do not 
122.36  apply if the district is a qualified housing district, as 
123.1   defined in section 273.1399, subdivision 1; 
123.2      (3) that the tax increment financing plan conforms to the 
123.3   general plan for the development or redevelopment of the 
123.4   municipality as a whole; 
123.5      (4) that the tax increment financing plan will afford 
123.6   maximum opportunity, consistent with the sound needs of the 
123.7   municipality as a whole, for the development or redevelopment of 
123.8   the project by private enterprise; 
123.9      (5) that the municipality elects the method of tax 
123.10  increment computation set forth in section 469.177, subdivision 
123.11  3, clause (b), if applicable. 
123.12     When the municipality and the authority are not the same, 
123.13  the municipality shall approve or disapprove the tax increment 
123.14  financing plan within 60 days of submission by the authority.  
123.15  When the municipality and the authority are not the same, the 
123.16  municipality may not amend or modify a tax increment financing 
123.17  plan except as proposed by the authority pursuant to subdivision 
123.18  4.  Once approved, the determination of the authority to 
123.19  undertake the project through the use of tax increment financing 
123.20  and the resolution of the governing body shall, except as 
123.21  provided in subdivision 9, be conclusive of the findings therein 
123.22  and of the public need for the financing. 
123.23     Sec. 21.  Minnesota Statutes 2002, section 469.175, is 
123.24  amended by adding a subdivision to read: 
123.25     Subd. 9.  [LIMITS ON ACTIONS.] (a) A taxpayer in the county 
123.26  where the district is located or another person in interest may 
123.27  contest an action as provided in this subdivision.  The 
123.28  procedure set out in this subdivision is the exclusive means to 
123.29  contest: 
123.30     (1) the formation and approval or the legality of a 
123.31  district, or a tax financing plan or its modification; 
123.32     (2) the inclusion of a parcel in a district; or 
123.33     (3) the legality of the collection or retention of a tax 
123.34  increment from the district, or the legality of the bonds issued 
123.35  under a tax increment financing plan based on a defect in the 
123.36  formation of the district or the adoption or approval of the 
124.1   plan or its modification. 
124.2   This restriction applies to proceedings under section 469.1771.  
124.3      (b) The contestant must object in writing to the authority 
124.4   within 90 days after the adoption of a resolution approving a 
124.5   tax increment financing plan under subdivision 3 or modification 
124.6   of the plan under subdivision 4. 
124.7      (c) After the 90-day period has expired, no government unit 
124.8   or state agency may contest the matters described in paragraph 
124.9   (a). 
124.10     (d) The state auditor retains all rights and powers granted 
124.11  to the state auditor under section 469.1771, except to the 
124.12  extent otherwise provided in this subdivision. 
124.13     (e) If the state auditor files a notice of noncompliance 
124.14  with the county attorney regarding a matter limited by this 
124.15  subdivision, and the notice is filed after 30 days from the 
124.16  adoption of the approving resolution, then in any action begun 
124.17  later by the county attorney under section 469.1771, subdivision 
124.18  1, paragraph (b), the remedy in district court is limited to the 
124.19  remedies that would apply under section 469.1771, subdivision 
124.20  2b, paragraphs (c) and (d), for petitions filed by the attorney 
124.21  general in tax court under section 469.1771, subdivision 2b, 
124.22  paragraph (a). 
124.23     Sec. 22.  Minnesota Statutes 2002, section 473.39, is 
124.24  amended by adding a subdivision to read: 
124.25     Subd. 1j.  [OBLIGATIONS.] After July 1, 2003, in addition 
124.26  to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, and 
124.27  1i, the council may issue certificates of indebtedness, bonds, 
124.28  or other obligations under this section in an amount not 
124.29  exceeding $45,000,000 for capital expenditures as prescribed in 
124.30  the council's regional transit master plan and transit capital 
124.31  improvement program and for related costs, including the costs 
124.32  of issuance and sale of the obligations.  
124.33     [APPLICATION.] This section applies to the counties of 
124.34  Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 
124.35     Sec. 23.  Minnesota Statutes 2002, section 475.58, 
124.36  subdivision 3b, is amended to read: 
125.1      Subd. 3b.  [STREET RECONSTRUCTION.] (a) A municipality may, 
125.2   without regard to the election requirement under subdivision 1, 
125.3   issue and sell obligations for street reconstruction, if the 
125.4   following conditions are met: 
125.5      (1) the streets are reconstructed under a street 
125.6   reconstruction plan that describes the streets to be 
125.7   reconstructed, the estimated costs, and any planned 
125.8   reconstruction of other streets in the municipality over the 
125.9   next five years, and the plan and issuance of the obligations 
125.10  has been approved by a vote of all of the members of the 
125.11  governing body following a public hearing for which notice has 
125.12  been published in the official newspaper at least ten days but 
125.13  not more than 28 days prior to the hearing; and 
125.14     (2) if a petition requesting a vote on the issuance is 
125.15  signed by voters equal to five percent of the votes cast in the 
125.16  last municipal general election and is filed with the municipal 
125.17  clerk within 30 days of the public hearing, the municipality may 
125.18  issue the bonds only after obtaining the approval of a majority 
125.19  of the voters voting on the question of the issuance of the 
125.20  obligations. 
125.21     (b) Obligations issued under this subdivision are subject 
125.22  to the debt limit of the municipality and are not excluded from 
125.23  net debt under section 475.51, subdivision 4. 
125.24  For purposes of this subdivision, street reconstruction includes 
125.25  utility replacement and relocation and other activities 
125.26  incidental to the street reconstruction, but does not include 
125.27  the portion of project cost allocable to widening a street or 
125.28  adding curbs and gutters where none previously existed. 
125.29     Sec. 24.  [BONDS ISSUANCE VALIDATED.] 
125.30     The provisions of Minnesota Statutes, sections 373.47, 
125.31  subdivision 1, and 473.907, subdivision 3, requiring prior 
125.32  review and approval by the public radio safety committee do not 
125.33  apply to the general obligation bonds issued by Anoka county in 
125.34  a principal amount of $10,500,000 on November 20, 2002. 
125.35     [EFFECTIVE DATE.] This section is effective upon compliance 
125.36  by the governing body of Anoka county with the provisions of 
126.1   Minnesota Statutes, section 645.021. 
126.2      Sec. 25.  [CORPORATE STATUS FOR CERTAIN FEDERAL TAX LAW.] 
126.3      For purposes of section 1.103-1 of the federal income tax 
126.4   regulations, Lewis and Clark Rural Water System, Inc. is hereby 
126.5   recognized as a corporation authorized to act on behalf of its 
126.6   members, including its Minnesota member governmental units, to 
126.7   provide drinking water to their communities and to issue debt 
126.8   obligations in its own name on behalf of some or all of its 
126.9   members, provided that Minnesota member governmental units are 
126.10  not liable for the payment of principal of or interest on such 
126.11  obligations. 
126.12     Sec. 26.  [EFFECTIVE DATES.] 
126.13     This article is effective the day following final enactment.
126.14  Sections 20 and 21 apply to all districts, regardless of when 
126.15  created, and are effective the day following final enactment and 
126.16  for all actions commenced after November 13, 2001. 
126.17                             ARTICLE 6 
126.18            DEPARTMENT INCOME, CORPORATE FRANCHISE, AND 
126.19                       ESTATE TAX INITIATIVES 
126.20     Section 1.  Minnesota Statutes 2002, section 289A.10, 
126.21  subdivision 1, is amended to read: 
126.22     Subdivision 1.  [RETURN REQUIRED.] In the case of a 
126.23  decedent who has an interest in property with a situs in 
126.24  Minnesota, the personal representative must submit a Minnesota 
126.25  estate tax return to the commissioner, on a form prescribed by 
126.26  the commissioner, if: 
126.27     (1) a federal estate tax return is required to be filed; or 
126.28     (2) the federal gross estate exceeds $700,000 for estates 
126.29  of decedents dying after December 31, 2001, and before January 
126.30  1, 2004; $850,000 for estates of decedents dying after December 
126.31  31, 2003, and before January 1, 2005; $950,000 for estates of 
126.32  decedents dying after December 31, 2004, and before January 1, 
126.33  2006; and $1,000,000 for estates of decedents dying after 
126.34  December 31, 2005. 
126.35     The return must contain a computation of the Minnesota 
126.36  estate tax due.  The return must be signed by the personal 
127.1   representative. 
127.2      [EFFECTIVE DATE.] This section is effective for estates of 
127.3   decedents dying after December 31, 2002. 
127.4      Sec. 2.  Minnesota Statutes 2002, section 289A.19, 
127.5   subdivision 4, is amended to read: 
127.6      Subd. 4.  [ESTATE TAX RETURNS.] When in the commissioner's 
127.7   judgment good cause exists, the commissioner may extend the time 
127.8   for filing an estate tax return for not more than six months.  
127.9   When an extension to file the federal estate tax return has been 
127.10  granted under section 6081 of the Internal Revenue Code, the 
127.11  time for filing the estate tax return is extended for that 
127.12  period.  
127.13     [EFFECTIVE DATE.] This section is effective for estates of 
127.14  decedents dying after December 31, 2001. 
127.15     Sec. 3.  Minnesota Statutes 2002, section 289A.31, is 
127.16  amended by adding a subdivision to read: 
127.17     Subd. 8.  [LIABILITY OF VENDOR FOR REPAYMENT OF REFUND.] If 
127.18  an individual income tax refund resulting from claiming an 
127.19  education credit under section 290.0674 is paid by means of 
127.20  directly depositing the proceeds of the refund into a bank 
127.21  account controlled by the vendor of the product or service upon 
127.22  which the education credit is based, and the commissioner 
127.23  subsequently disallows the credit, the commissioner may seek 
127.24  repayment of the refund from the vendor.  The amount of the 
127.25  repayment must be assessed and collected in the same time and 
127.26  manner as an erroneous refund under section 289A.37, subdivision 
127.27  2. 
127.28     [EFFECTIVE DATE.] This section is effective for refunds 
127.29  paid to accounts controlled by a vendor on or after the day 
127.30  following final enactment. 
127.31     Sec. 4.  Minnesota Statutes 2002, section 289A.56, 
127.32  subdivision 3, is amended to read: 
127.33     Subd. 3.  [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 
127.34  WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 
127.35  TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 
127.36  overpayments of withholding tax, entertainer withholding tax, or 
128.1   withholding from payments to out-of-state contractors, or estate 
128.2   tax, interest is computed from the date of payment to the date 
128.3   the refund is paid or credited.  For purposes of this 
128.4   subdivision, the date of payment is the later of the date the 
128.5   tax was finally due or was paid. 
128.6      For the purposes of computing interest on estate tax 
128.7   refunds, interest is paid from the later of the date of 
128.8   overpayment, the date the estate tax return is due, or the date 
128.9   the original estate tax return is filed to the date the refund 
128.10  is paid. 
128.11     For purposes of computing interest on sales and use tax 
128.12  refunds, interest is paid from the date of payment to the date 
128.13  the refund is paid or credited, if the refund claim includes a 
128.14  detailed schedule reflecting the tax periods covered in the 
128.15  claim.  If the refund claim submitted does not include a 
128.16  detailed schedule reflecting the tax periods covered in the 
128.17  claim, interest is computed from the date the claim was filed. 
128.18     [EFFECTIVE DATE.] This section is effective for estates of 
128.19  decedents dying after December 31, 2003. 
128.20     Sec. 5.  Minnesota Statutes 2002, section 289A.60, 
128.21  subdivision 7, is amended to read: 
128.22     Subd. 7.  [PENALTY FOR FRIVOLOUS RETURN.] If a taxpayer 
128.23  files what purports to be a tax return or a claim for refund but 
128.24  which does not contain information on which the substantial 
128.25  correctness of the purported return or claim for refund may be 
128.26  judged or contains information that on its face shows that the 
128.27  purported return or claim for refund is substantially incorrect 
128.28  and the conduct is due to a position that is frivolous or a 
128.29  desire that appears on the purported return or claim for refund 
128.30  to delay or impede the administration of Minnesota tax laws, 
128.31  then the individual shall pay a penalty of $500 the greater of 
128.32  $1,000 or 25 percent of the amount of tax required to be shown 
128.33  on the return.  In a proceeding involving the issue of whether 
128.34  or not a person is liable for this penalty, the burden of proof 
128.35  is on the commissioner.  
128.36     [EFFECTIVE DATE.] This section is effective for returns 
129.1   filed after December 31, 2003. 
129.2      Sec. 6.  Minnesota Statutes 2002, section 290.01, 
129.3   subdivision 19b, is amended to read: 
129.4      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
129.5   individuals, estates, and trusts, there shall be subtracted from 
129.6   federal taxable income: 
129.7      (1) interest income on obligations of any authority, 
129.8   commission, or instrumentality of the United States to the 
129.9   extent includable in taxable income for federal income tax 
129.10  purposes but exempt from state income tax under the laws of the 
129.11  United States; 
129.12     (2) if included in federal taxable income, the amount of 
129.13  any overpayment of income tax to Minnesota or to any other 
129.14  state, for any previous taxable year, whether the amount is 
129.15  received as a refund or as a credit to another taxable year's 
129.16  income tax liability; 
129.17     (3) the amount paid to others, less the amount used to 
129.18  claim the credit allowed under section 290.0674, not to exceed 
129.19  $1,625 for each qualifying child in grades kindergarten to 6 and 
129.20  $2,500 for each qualifying child in grades 7 to 12, for tuition, 
129.21  textbooks, and transportation of each qualifying child in 
129.22  attending an elementary or secondary school situated in 
129.23  Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
129.24  wherein a resident of this state may legally fulfill the state's 
129.25  compulsory attendance laws, which is not operated for profit, 
129.26  and which adheres to the provisions of the Civil Rights Act of 
129.27  1964 and chapter 363.  For the purposes of this clause, 
129.28  "tuition" includes fees or tuition as defined in section 
129.29  290.0674, subdivision 1, clause (1).  As used in this clause, 
129.30  "textbooks" includes books and other instructional materials and 
129.31  equipment purchased or leased for use in elementary and 
129.32  secondary schools in teaching only those subjects legally and 
129.33  commonly taught in public elementary and secondary schools in 
129.34  this state.  Equipment expenses qualifying for deduction 
129.35  includes expenses as defined and limited in section 290.0674, 
129.36  subdivision 1, clause (3).  "Textbooks" does not include 
130.1   instructional books and materials used in the teaching of 
130.2   religious tenets, doctrines, or worship, the purpose of which is 
130.3   to instill such tenets, doctrines, or worship, nor does it 
130.4   include books or materials for, or transportation to, 
130.5   extracurricular activities including sporting events, musical or 
130.6   dramatic events, speech activities, driver's education, or 
130.7   similar programs.  For purposes of the subtraction provided by 
130.8   this clause, "qualifying child" has the meaning given in section 
130.9   32(c)(3) of the Internal Revenue Code; 
130.10     (4) income as provided under section 290.0802; 
130.11     (5) to the extent included in federal adjusted gross 
130.12  income, income realized on disposition of property exempt from 
130.13  tax under section 290.491; 
130.14     (6) to the extent not deducted in determining federal 
130.15  taxable income or used to claim the long-term care insurance 
130.16  credit under section 290.0672, the amount paid for health 
130.17  insurance of self-employed individuals as determined under 
130.18  section 162(l) of the Internal Revenue Code, except that the 
130.19  percent limit does not apply.  If the individual deducted 
130.20  insurance payments under section 213 of the Internal Revenue 
130.21  Code of 1986, the subtraction under this clause must be reduced 
130.22  by the lesser of: 
130.23     (i) the total itemized deductions allowed under section 
130.24  63(d) of the Internal Revenue Code, less state, local, and 
130.25  foreign income taxes deductible under section 164 of the 
130.26  Internal Revenue Code and the standard deduction under section 
130.27  63(c) of the Internal Revenue Code; or 
130.28     (ii) the lesser of (A) the amount of insurance qualifying 
130.29  as "medical care" under section 213(d) of the Internal Revenue 
130.30  Code to the extent not deducted under section 162(1) of the 
130.31  Internal Revenue Code or excluded from income or (B) the total 
130.32  amount deductible for medical care under section 213(a); 
130.33     (7) the exemption amount allowed under Laws 1995, chapter 
130.34  255, article 3, section 2, subdivision 3; 
130.35     (8) to the extent included in federal taxable income, 
130.36  postservice benefits for youth community service under section 
131.1   124D.42 for volunteer service under United States Code, title 
131.2   42, sections 12601 to 12604; 
131.3      (9) (7) to the extent not deducted in determining federal 
131.4   taxable income by an individual who does not itemize deductions 
131.5   for federal income tax purposes for the taxable year, an amount 
131.6   equal to 50 percent of the excess of charitable contributions 
131.7   allowable as a deduction for the taxable year under section 
131.8   170(a) of the Internal Revenue Code over $500; 
131.9      (10) (8) for taxable years beginning before January 1, 
131.10  2008, the amount of the federal small ethanol producer credit 
131.11  allowed under section 40(a)(3) of the Internal Revenue Code 
131.12  which is included in gross income under section 87 of the 
131.13  Internal Revenue Code; 
131.14     (11) (9) for individuals who are allowed a federal foreign 
131.15  tax credit for taxes that do not qualify for a credit under 
131.16  section 290.06, subdivision 22, an amount equal to the carryover 
131.17  of subnational foreign taxes for the taxable year, but not to 
131.18  exceed the total subnational foreign taxes reported in claiming 
131.19  the foreign tax credit.  For purposes of this clause, "federal 
131.20  foreign tax credit" means the credit allowed under section 27 of 
131.21  the Internal Revenue Code, and "carryover of subnational foreign 
131.22  taxes" equals the carryover allowed under section 904(c) of the 
131.23  Internal Revenue Code minus national level foreign taxes to the 
131.24  extent they exceed the federal foreign tax credit; and 
131.25     (12) (10) in each of the five tax years immediately 
131.26  following the tax year in which an addition is required under 
131.27  subdivision 19a, clause (7), an amount equal to one-fifth of the 
131.28  delayed depreciation.  For purposes of this clause, "delayed 
131.29  depreciation" means the amount of the addition made by the 
131.30  taxpayer under subdivision 19a, clause (7), minus the positive 
131.31  value of any net operating loss under section 172 of the 
131.32  Internal Revenue Code generated for the tax year of the 
131.33  addition.  The resulting delayed depreciation cannot be less 
131.34  than zero. 
131.35     [EFFECTIVE DATE.] This section is effective for tax years 
131.36  beginning after December 31, 2003. 
132.1      Sec. 7.  Minnesota Statutes 2002, section 290.01, 
132.2   subdivision 19d, is amended to read: 
132.3      Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
132.4   TAXABLE INCOME.] For corporations, there shall be subtracted 
132.5   from federal taxable income after the increases provided in 
132.6   subdivision 19c:  
132.7      (1) the amount of foreign dividend gross-up added to gross 
132.8   income for federal income tax purposes under section 78 of the 
132.9   Internal Revenue Code; 
132.10     (2) the amount of salary expense not allowed for federal 
132.11  income tax purposes due to claiming the federal jobs credit 
132.12  under section 51 of the Internal Revenue Code; 
132.13     (3) any dividend (not including any distribution in 
132.14  liquidation) paid within the taxable year by a national or state 
132.15  bank to the United States, or to any instrumentality of the 
132.16  United States exempt from federal income taxes, on the preferred 
132.17  stock of the bank owned by the United States or the 
132.18  instrumentality; 
132.19     (4) amounts disallowed for intangible drilling costs due to 
132.20  differences between this chapter and the Internal Revenue Code 
132.21  in taxable years beginning before January 1, 1987, as follows: 
132.22     (i) to the extent the disallowed costs are represented by 
132.23  physical property, an amount equal to the allowance for 
132.24  depreciation under Minnesota Statutes 1986, section 290.09, 
132.25  subdivision 7, subject to the modifications contained in 
132.26  subdivision 19e; and 
132.27     (ii) to the extent the disallowed costs are not represented
132.28  by physical property, an amount equal to the allowance for cost 
132.29  depletion under Minnesota Statutes 1986, section 290.09, 
132.30  subdivision 8; 
132.31     (5) the deduction for capital losses pursuant to sections 
132.32  1211 and 1212 of the Internal Revenue Code, except that: 
132.33     (i) for capital losses incurred in taxable years beginning 
132.34  after December 31, 1986, capital loss carrybacks shall not be 
132.35  allowed; 
132.36     (ii) for capital losses incurred in taxable years beginning 
133.1   after December 31, 1986, a capital loss carryover to each of the 
133.2   15 taxable years succeeding the loss year shall be allowed; 
133.3      (iii) for capital losses incurred in taxable years 
133.4   beginning before January 1, 1987, a capital loss carryback to 
133.5   each of the three taxable years preceding the loss year, subject 
133.6   to the provisions of Minnesota Statutes 1986, section 290.16, 
133.7   shall be allowed; and 
133.8      (iv) for capital losses incurred in taxable years beginning 
133.9   before January 1, 1987, a capital loss carryover to each of the 
133.10  five taxable years succeeding the loss year to the extent such 
133.11  loss was not used in a prior taxable year and subject to the 
133.12  provisions of Minnesota Statutes 1986, section 290.16, shall be 
133.13  allowed; 
133.14     (6) an amount for interest and expenses relating to income 
133.15  not taxable for federal income tax purposes, if (i) the income 
133.16  is taxable under this chapter and (ii) the interest and expenses 
133.17  were disallowed as deductions under the provisions of section 
133.18  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
133.19  federal taxable income; 
133.20     (7) in the case of mines, oil and gas wells, other natural 
133.21  deposits, and timber for which percentage depletion was 
133.22  disallowed pursuant to subdivision 19c, clause (11), a 
133.23  reasonable allowance for depletion based on actual cost.  In the 
133.24  case of leases the deduction must be apportioned between the 
133.25  lessor and lessee in accordance with rules prescribed by the 
133.26  commissioner.  In the case of property held in trust, the 
133.27  allowable deduction must be apportioned between the income 
133.28  beneficiaries and the trustee in accordance with the pertinent 
133.29  provisions of the trust, or if there is no provision in the 
133.30  instrument, on the basis of the trust's income allocable to 
133.31  each; 
133.32     (8) for certified pollution control facilities placed in 
133.33  service in a taxable year beginning before December 31, 1986, 
133.34  and for which amortization deductions were elected under section 
133.35  169 of the Internal Revenue Code of 1954, as amended through 
133.36  December 31, 1985, an amount equal to the allowance for 
134.1   depreciation under Minnesota Statutes 1986, section 290.09, 
134.2   subdivision 7; 
134.3      (9) amounts included in federal taxable income that are due 
134.4   to refunds of income, excise, or franchise taxes based on net 
134.5   income or related minimum taxes paid by the corporation to 
134.6   Minnesota, another state, a political subdivision of another 
134.7   state, the District of Columbia, or a foreign country or 
134.8   possession of the United States to the extent that the taxes 
134.9   were added to federal taxable income under section 290.01, 
134.10  subdivision 19c, clause (1), in a prior taxable year; 
134.11     (10) 80 percent of royalties, fees, or other like income 
134.12  accrued or received from a foreign operating corporation or a 
134.13  foreign corporation which is part of the same unitary business 
134.14  as the receiving corporation; 
134.15     (11) income or gains from the business of mining as defined 
134.16  in section 290.05, subdivision 1, clause (a), that are not 
134.17  subject to Minnesota franchise tax; 
134.18     (12) the amount of handicap access expenditures in the 
134.19  taxable year which are not allowed to be deducted or capitalized 
134.20  under section 44(d)(7) of the Internal Revenue Code; 
134.21     (13) the amount of qualified research expenses not allowed 
134.22  for federal income tax purposes under section 280C(c) of the 
134.23  Internal Revenue Code, but only to the extent that the amount 
134.24  exceeds the amount of the credit allowed under section 290.068; 
134.25     (14) the amount of salary expenses not allowed for federal 
134.26  income tax purposes due to claiming the Indian employment credit 
134.27  under section 45A(a) of the Internal Revenue Code; 
134.28     (15) the amount of any refund of environmental taxes paid 
134.29  under section 59A of the Internal Revenue Code; 
134.30     (16) for taxable years beginning before January 1, 2008, 
134.31  the amount of the federal small ethanol producer credit allowed 
134.32  under section 40(a)(3) of the Internal Revenue Code which is 
134.33  included in gross income under section 87 of the Internal 
134.34  Revenue Code; 
134.35     (17) for a corporation whose foreign sales corporation, as 
134.36  defined in section 922 of the Internal Revenue Code, constituted 
135.1   a foreign operating corporation during any taxable year ending 
135.2   before January 1, 1995, and a return was filed by August 15, 
135.3   1996, claiming the deduction under this section 290.21, 
135.4   subdivision 4, for income received from the foreign operating 
135.5   corporation, an amount equal to 1.23 multiplied by the amount of 
135.6   income excluded under section 114 of the Internal Revenue Code, 
135.7   provided the income is not income of a foreign operating 
135.8   company; 
135.9      (18) any decrease in subpart F income, as defined in 
135.10  section 952(a) of the Internal Revenue Code, for the taxable 
135.11  year when subpart F income is calculated without regard to the 
135.12  provisions of section 614 of Public Law Number 107-147; and 
135.13     (19) in each of the five tax years immediately following 
135.14  the tax year in which an addition is required under subdivision 
135.15  19c, clause (16), an amount equal to one-fifth of the delayed 
135.16  depreciation.  For purposes of this clause, "delayed 
135.17  depreciation" means the amount of the addition made by the 
135.18  taxpayer under subdivision 19c, clause (16).  The resulting 
135.19  delayed depreciation cannot be less than zero. 
135.20     [EFFECTIVE DATE.] This section is effective the day 
135.21  following final enactment. 
135.22     Sec. 8.  Minnesota Statutes 2002, section 290.06, 
135.23  subdivision 2c, is amended to read: 
135.24     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
135.25  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
135.26  married individuals filing joint returns and surviving spouses 
135.27  as defined in section 2(a) of the Internal Revenue Code must be 
135.28  computed by applying to their taxable net income the following 
135.29  schedule of rates: 
135.30     (1) On the first $25,680, 5.35 percent; 
135.31     (2) On all over $25,680, but not over $102,030, 7.05 
135.32  percent; 
135.33     (3) On all over $102,030, 7.85 percent. 
135.34     Married individuals filing separate returns, estates, and 
135.35  trusts must compute their income tax by applying the above rates 
135.36  to their taxable income, except that the income brackets will be 
136.1   one-half of the above amounts.  
136.2      (b) The income taxes imposed by this chapter upon unmarried 
136.3   individuals must be computed by applying to taxable net income 
136.4   the following schedule of rates: 
136.5      (1) On the first $17,570, 5.35 percent; 
136.6      (2) On all over $17,570, but not over $57,710, 7.05 
136.7   percent; 
136.8      (3) On all over $57,710, 7.85 percent. 
136.9      (c) The income taxes imposed by this chapter upon unmarried 
136.10  individuals qualifying as a head of household as defined in 
136.11  section 2(b) of the Internal Revenue Code must be computed by 
136.12  applying to taxable net income the following schedule of rates: 
136.13     (1) On the first $21,630, 5.35 percent; 
136.14     (2) On all over $21,630, but not over $86,910, 7.05 
136.15  percent; 
136.16     (3) On all over $86,910, 7.85 percent. 
136.17     (d) In lieu of a tax computed according to the rates set 
136.18  forth in this subdivision, the tax of any individual taxpayer 
136.19  whose taxable net income for the taxable year is less than an 
136.20  amount determined by the commissioner must be computed in 
136.21  accordance with tables prepared and issued by the commissioner 
136.22  of revenue based on income brackets of not more than $100.  The 
136.23  amount of tax for each bracket shall be computed at the rates 
136.24  set forth in this subdivision, provided that the commissioner 
136.25  may disregard a fractional part of a dollar unless it amounts to 
136.26  50 cents or more, in which case it may be increased to $1. 
136.27     (e) An individual who is not a Minnesota resident for the 
136.28  entire year must compute the individual's Minnesota income tax 
136.29  as provided in this subdivision.  After the application of the 
136.30  nonrefundable credits provided in this chapter, the tax 
136.31  liability must then be multiplied by a fraction in which:  
136.32     (1) the numerator is the individual's Minnesota source 
136.33  federal adjusted gross income as defined in section 62 of the 
136.34  Internal Revenue Code and increased by the additions required 
136.35  under section 290.01, subdivision 19a, clauses (1), (5), and 
136.36  (6), and reduced by the Minnesota assignable portion of the 
137.1   subtraction for United States government interest under section 
137.2   290.01, subdivision 19b, clause (1), after applying the 
137.3   allocation and assignability provisions of section 290.081, 
137.4   clause (a), or 290.17; and 
137.5      (2) the denominator is the individual's federal adjusted 
137.6   gross income as defined in section 62 of the Internal Revenue 
137.7   Code of 1986, increased by the amounts specified in section 
137.8   290.01, subdivision 19a, clauses (1), (5), and (6), and reduced 
137.9   by the amounts specified in section 290.01, subdivision 19b, 
137.10  clause (1). 
137.11     [EFFECTIVE DATE.] This section is effective for tax years 
137.12  beginning after December 31, 2002. 
137.13     Sec. 9.  Minnesota Statutes 2002, section 290.0671, 
137.14  subdivision 1, is amended to read: 
137.15     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
137.16  allowed a credit against the tax imposed by this chapter equal 
137.17  to a percentage of earned income.  To receive a credit, a 
137.18  taxpayer must be eligible for a credit under section 32 of the 
137.19  Internal Revenue Code.  
137.20     (b) For individuals with no qualifying children, the credit 
137.21  equals 1.9125 percent of the first $4,620 of earned income.  The 
137.22  credit is reduced by 1.9125 percent of earned income or modified 
137.23  adjusted gross income, whichever is greater, in excess of 
137.24  $5,770, but in no case is the credit less than zero. 
137.25     (c) For individuals with one qualifying child, the credit 
137.26  equals 8.5 percent of the first $6,920 of earned income and 8.5 
137.27  percent of earned income over $12,080 but less than $13,450.  
137.28  The credit is reduced by 5.73 percent of earned income or 
137.29  modified adjusted gross income, whichever is greater, in excess 
137.30  of $15,080, but in no case is the credit less than zero. 
137.31     (d) For individuals with two or more qualifying children, 
137.32  the credit equals ten percent of the first $9,720 of earned 
137.33  income and 20 percent of earned income over $14,860 but less 
137.34  than $16,800.  The credit is reduced by 10.3 percent of earned 
137.35  income or modified adjusted gross income, whichever is greater, 
137.36  in excess of $17,890, but in no case is the credit less than 
138.1   zero. 
138.2      (e) For a nonresident or part-year resident, the credit 
138.3   must be allocated based on the percentage calculated under 
138.4   section 290.06, subdivision 2c, paragraph (e). 
138.5      (f) For a person who was a resident for the entire tax year 
138.6   and has earned income not subject to tax under this chapter, the 
138.7   credit must be allocated based on the ratio of federal adjusted 
138.8   gross income reduced by the earned income not subject to tax 
138.9   under this chapter over federal adjusted gross income. 
138.10     (g) For tax years beginning after December 31, 2001, and 
138.11  before December 31, 2004, the $5,770 in paragraph (b) is 
138.12  increased to $6,770, the $15,080 in paragraph (c) is increased 
138.13  to $16,080, and the $17,890 in paragraph (d) is increased to 
138.14  $18,890, after being adjusted for inflation under subdivision 7, 
138.15  are each increased by $1,000 for married taxpayers filing joint 
138.16  returns. 
138.17     (h) For tax years beginning after December 31, 2004, and 
138.18  before December 31, 2007, the $5,770 in paragraph (b) is 
138.19  increased to $7,770, the $15,080 in paragraph (c) is increased 
138.20  to $17,080, and the $17,890 in paragraph (d) is increased to 
138.21  $19,890, after being adjusted for inflation under subdivision 7, 
138.22  are each increased by $2,000 for married taxpayers filing joint 
138.23  returns. 
138.24     (i) For tax years beginning after December 31, 2007, and 
138.25  before December 31, 2010, the $5,770 in paragraph (b) is 
138.26  increased to $8,770, the $15,080 in paragraph (c) is increased 
138.27  to $18,080, and the $17,890 in paragraph (d) is increased to 
138.28  $20,890, after being adjusted for inflation under subdivision 7, 
138.29  are each increased by $3,000 for married taxpayers filing joint 
138.30  returns.  For tax years beginning after December 31, 2008, the 
138.31  $3,000 is adjusted annually for inflation under subdivision 7. 
138.32     (j) The commissioner shall construct tables showing the 
138.33  amount of the credit at various income levels and make them 
138.34  available to taxpayers.  The tables shall follow the schedule 
138.35  contained in this subdivision, except that the commissioner may 
138.36  graduate the transition between income brackets. 
139.1      [EFFECTIVE DATE.] This section is effective for tax years 
139.2   beginning after December 31, 2002. 
139.3      Sec. 10.  Minnesota Statutes 2002, section 290.0675, 
139.4   subdivision 2, is amended to read: 
139.5      Subd. 2.  [CREDIT ALLOWED.] A married couple filing a joint 
139.6   return is allowed a credit against the tax imposed under section 
139.7   290.06.  
139.8      The minimum taxable income for the married couple to be 
139.9   eligible for the credit is $25,680, and the minimum earned 
139.10  income in order for the couple to be eligible for the credit is 
139.11  $14,250 for each spouse. 
139.12     [EFFECTIVE DATE.] This section is effective for tax years 
139.13  beginning after December 31, 2002. 
139.14     Sec. 11.  Minnesota Statutes 2002, section 290.0675, 
139.15  subdivision 3, is amended to read: 
139.16     Subd. 3.  [CREDIT AMOUNT.] The credit amount is the 
139.17  difference between the tax on the couple's joint Minnesota 
139.18  taxable income under the rates and income levels in section 
139.19  290.06, subdivision 2c, paragraph (a), as adjusted for the 
139.20  taxable year by section 290.06, subdivision 2d, and the sum of 
139.21  the tax under the rates and income levels of section 290.06, 
139.22  subdivision 2c, paragraph (b), as adjusted for the taxable year 
139.23  by section 290.06, subdivision 2d, on the earned income of the 
139.24  lesser-earning spouse, and the tax under the rates and income 
139.25  levels of section 290.06, subdivision 2c, paragraph (b), as 
139.26  adjusted for the taxable year by section 290.06, subdivision 2d, 
139.27  on the couple's joint Minnesota taxable income, minus the earned 
139.28  income of the lesser-earning spouse. 
139.29     The commissioner of revenue shall prepare and make 
139.30  available to taxpayers a comprehensive table showing the credit 
139.31  under this section at brackets of earnings of the lesser-earning 
139.32  spouse and joint taxable income.  The brackets of earnings shall 
139.33  not be more than $2,000. 
139.34     [EFFECTIVE DATE.] This section is effective for tax years 
139.35  beginning after December 31, 2002. 
139.36     Sec. 12.  Minnesota Statutes 2002, section 290.0679, 
140.1   subdivision 2, is amended to read: 
140.2      Subd. 2.  [CONDITIONS FOR ASSIGNMENT.] A qualifying 
140.3   taxpayer may assign all or part of an anticipated refund for the 
140.4   current and future taxable years to a financial institution or a 
140.5   qualifying organization.  A financial institution or qualifying 
140.6   organization accepting assignment must pay the amount secured by 
140.7   the assignment to a third-party vendor.  The commissioner of 
140.8   children, families, and learning shall provide a list of 
140.9   categories of, upon request from a third-party vendor, certify 
140.10  that the vendor's products and services that qualify for the 
140.11  education credit to financial institutions and qualifying 
140.12  organizations.  A denial of a certification is subject to the 
140.13  contested case procedure under chapter 14.  A financial 
140.14  institution or qualifying organization that accepts assignments 
140.15  under this section must verify as part of the assignment 
140.16  documentation that the product or service to be provided by the 
140.17  third-party vendor qualifies has been certified by the 
140.18  commissioner of children, families, and learning as qualifying 
140.19  for the education credit.  The amount assigned for the current 
140.20  and future taxable years may not exceed the maximum allowable 
140.21  education credit for the current taxable year.  Both the 
140.22  taxpayer and spouse must consent to the assignment of a refund 
140.23  from a joint return. 
140.24     [EFFECTIVE DATE.] This section is effective for assignments 
140.25  made on or after the day following final enactment. 
140.26     Sec. 13.  Minnesota Statutes 2002, section 290.0802, 
140.27  subdivision 1, is amended to read: 
140.28     Subdivision 1.  [DEFINITIONS.] For purposes of this 
140.29  section, the following terms have the meanings given. 
140.30     (a) "Adjusted gross income" means federal adjusted gross 
140.31  income as used in section 22(d) of the Internal Revenue Code for 
140.32  the taxable year, plus a lump sum distribution as defined in 
140.33  section 402(e)(3) of the Internal Revenue Code, and less any 
140.34  pension, annuity, or disability benefits included in federal 
140.35  gross income but not subject to state taxation other than the 
140.36  subtraction allowed under section 290.01, subdivision 19b, 
141.1   clause (4). 
141.2      (b) "Disability income" means disability income as defined 
141.3   in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 
141.4      (c) "Nontaxable retirement and disability benefits" means 
141.5   the amount of pension, annuity, or disability benefits that 
141.6   would be included in the reduction under section 22(c)(3) of the 
141.7   Internal Revenue Code and pension, annuity, or disability 
141.8   benefits included in federal gross income but not subject to 
141.9   state taxation other than the subtraction allowed under section 
141.10  290.01, subdivision 19b, clause (4). 
141.11     (d) "Qualified individual" means a qualified individual as 
141.12  defined in section 22(b) of the Internal Revenue Code. 
141.13     (e) "Social security benefits above the second federal 
141.14  threshold" means the amount of social security benefits included 
141.15  in federal taxable income due to the provisions of section 13215 
141.16  of the Omnibus Budget Reconciliation Act of 1993, Public Law 
141.17  Number 103-66. 
141.18     [EFFECTIVE DATE.] This section is effective for tax years 
141.19  beginning after December 31, 2002. 
141.20     Sec. 14.  Minnesota Statutes 2002, section 291.005, 
141.21  subdivision 1, is amended to read: 
141.22     Subdivision 1.  Unless the context otherwise clearly 
141.23  requires, the following terms used in this chapter shall have 
141.24  the following meanings: 
141.25     (1) "Federal gross estate" means the gross estate of a 
141.26  decedent as valued and otherwise determined for federal estate 
141.27  tax purposes by federal taxing authorities pursuant to the 
141.28  provisions of the Internal Revenue Code. 
141.29     (2) "Minnesota gross estate" means the federal gross estate 
141.30  of a decedent after (a) excluding therefrom any property 
141.31  included therein which has its situs outside Minnesota and 
141.32  pensions exempt from tax under this chapter pursuant to section 
141.33  352.15, subdivision 1; 353.15, subdivision 1; 354.10, 
141.34  subdivision 1; 354B.30; or 354C.165, and (b) including therein 
141.35  any property omitted from the federal gross estate which is 
141.36  includable therein, has its situs in Minnesota, and was not 
142.1   disclosed to federal taxing authorities.  
142.2      (3) "Personal representative" means the executor, 
142.3   administrator or other person appointed by the court to 
142.4   administer and dispose of the property of the decedent.  If 
142.5   there is no executor, administrator or other person appointed, 
142.6   qualified, and acting within this state, then any person in 
142.7   actual or constructive possession of any property having a situs 
142.8   in this state which is included in the federal gross estate of 
142.9   the decedent shall be deemed to be a personal representative to 
142.10  the extent of the property and the Minnesota estate tax due with 
142.11  respect to the property. 
142.12     (4) "Resident decedent" means an individual whose domicile 
142.13  at the time of death was in Minnesota. 
142.14     (5) "Nonresident decedent" means an individual whose 
142.15  domicile at the time of death was not in Minnesota. 
142.16     (6) "Situs of property" means, with respect to real 
142.17  property, the state or country in which it is located; with 
142.18  respect to tangible personal property, the state or country in 
142.19  which it was normally kept or located at the time of the 
142.20  decedent's death; and with respect to intangible personal 
142.21  property, the state or country in which the decedent was 
142.22  domiciled at death. 
142.23     (7) "Commissioner" means the commissioner of revenue or any 
142.24  person to whom the commissioner has delegated functions under 
142.25  this chapter. 
142.26     (8) "Internal Revenue Code" means the United States 
142.27  Internal Revenue Code of 1986, as amended through December 31, 
142.28  2000 2002. 
142.29     [EFFECTIVE DATE.] This section is effective for estates of 
142.30  decedents dying after December 31, 2002. 
142.31     Sec. 15.  Minnesota Statutes 2002, section 291.03, 
142.32  subdivision 1, is amended to read: 
142.33     Subdivision 1.  [TAX AMOUNT.] The tax imposed shall be an 
142.34  amount equal to the proportion of the maximum credit computed 
142.35  under section 2011 of the Internal Revenue Code, as amended 
142.36  through December 31, 2000, for state death taxes as the 
143.1   Minnesota gross estate bears to the value of the federal gross 
143.2   estate.  For a resident decedent, the tax shall be the maximum 
143.3   credit computed under section 2011 of the Internal Revenue Code 
143.4   reduced by the amount of the death tax paid the other state and 
143.5   credited against the federal estate tax if this results in a 
143.6   larger amount of tax than the proportionate amount of the 
143.7   credit.  The tax determined under this paragraph shall not be 
143.8   greater than the federal estate tax computed under section 2001 
143.9   of the Internal Revenue Code after the allowance of the federal 
143.10  credits allowed under section 2010 of the Internal Revenue Code 
143.11  of 1986, as amended through December 31, 2000.  For the purposes 
143.12  of this section, expenses which are deducted for federal income 
143.13  tax purposes under section 642(g) of the Internal Revenue Code 
143.14  as amended through December 31, 2002, are not allowable in 
143.15  computing the tax under this chapter. 
143.16     [EFFECTIVE DATE.] This section is effective for estates of 
143.17  decedents dying after December 31, 2002. 
143.18     Sec. 16.  Minnesota Statutes 2002, section 352.15, 
143.19  subdivision 1, is amended to read: 
143.20     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
143.21  annuities, or other benefits mentioned in this chapter is 
143.22  assignable either in law or in equity or subject to state estate 
143.23  tax, or to execution, levy, attachment, garnishment, or other 
143.24  legal process, except as provided in subdivision 1a or section 
143.25  518.58, 518.581, or 518.6111.  
143.26     [EFFECTIVE DATE.] This section is effective for estates of 
143.27  decedents dying after December 31, 2002. 
143.28     Sec. 17.  Minnesota Statutes 2002, section 353.15, 
143.29  subdivision 1, is amended to read: 
143.30     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] No money, annuity, 
143.31  or benefit provided for in this chapter is assignable or subject 
143.32  to any state estate tax, or to execution, levy, attachment, 
143.33  garnishment, or legal process, except as provided in subdivision 
143.34  2 or section 518.58, 518.581, or 518.6111.  
143.35     [EFFECTIVE DATE.] This section is effective for estates of 
143.36  decedents dying after December 31, 2002. 
144.1      Sec. 18.  Minnesota Statutes 2002, section 354.10, 
144.2   subdivision 1, is amended to read: 
144.3      Subdivision 1.  [EXEMPTION; EXCEPTIONS.] The right of a 
144.4   teacher to take advantage of the benefits provided by this 
144.5   chapter, is a personal right only and is not assignable.  All 
144.6   money to the credit of a teacher's account in the fund or any 
144.7   money payable to the teacher from the fund belongs to the state 
144.8   of Minnesota until actually paid to the teacher or a beneficiary 
144.9   under this chapter.  The association may acknowledge a properly 
144.10  completed power of attorney form.  An assignment or attempted 
144.11  assignment of a teacher's interest in the fund, or of the 
144.12  beneficiary's interest in the fund, by a teacher or a 
144.13  beneficiary is void and exempt from taxation under chapter 291 
144.14  and from garnishment or levy under attachment or execution, 
144.15  except as provided in subdivision 2 or 3, or section 518.58, 
144.16  518.581, or 518.6111.  
144.17     [EFFECTIVE DATE.] This section is effective for estates of 
144.18  decedents dying after December 31, 2002. 
144.19     Sec. 19.  Minnesota Statutes 2002, section 354B.30, is 
144.20  amended to read: 
144.21     354B.30 [PROHIBITION ON LOANS OR PRETERMINATION 
144.22  DISTRIBUTIONS.] 
144.23     (a) No participant may obtain a loan from the plan or 
144.24  obtain any distribution from the plan at a time before the 
144.25  participant terminates the employment that gave rise to plan 
144.26  coverage. 
144.27     (b) No amounts to the credit of the plan are assignable 
144.28  either in law or in equity, are subject to state estate tax, or 
144.29  are subject to execution, levy, attachment, garnishment, or 
144.30  other legal process, except as provided in section 518.58, 
144.31  518.581, or 518.6111.  
144.32     [EFFECTIVE DATE.] This section is effective for estates of 
144.33  decedents dying after December 31, 2002. 
144.34     Sec. 20.  Minnesota Statutes 2002, section 354C.165, is 
144.35  amended to read: 
144.36     354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 
145.1   DISTRIBUTIONS.] 
145.2      (a) Except as provided in paragraph (c), no participant may 
145.3   obtain a loan or any distribution from the plan before the 
145.4   participant terminates the employment that gave rise to plan 
145.5   coverage. 
145.6      (b) No amounts to the credit of the plan are assignable 
145.7   either in law or in equity, are subject to state estate tax, or 
145.8   are subject to execution, levy, attachment, garnishment, or 
145.9   other legal process, except as provided in section 518.58, 
145.10  518.581, or 518.6111.  
145.11     (c) Unless prohibited by or subject to a penalty under 
145.12  federal law, a teacher who is a participant in the supplemental 
145.13  retirement plan may request, in writing, a transfer of all or a 
145.14  portion of the funds accumulated in the person's supplemental 
145.15  plan account to the teachers retirement association to purchase 
145.16  service credit under sections 354.53, 354.533, 354.534, 354.535, 
145.17  354.536, 354.537, and 354.538 or to the teachers retirement fund 
145.18  association to purchase service credit under sections 354A.097, 
145.19  354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104.  
145.20  Upon receipt of a valid request, the board shall execute the 
145.21  transfer.  The transfer must be a fund-to-fund transfer, and in 
145.22  no event shall the participant directly receive any of the funds 
145.23  while still employed by the board.  In no event may the board 
145.24  transfer more than the participant's account balance.  The 
145.25  board, in cooperation with the executive director of the 
145.26  teachers retirement association, shall develop the forms for 
145.27  requesting a transfer and the procedures for executing the 
145.28  requested transfers. 
145.29     [EFFECTIVE DATE.] This section is effective for estates of 
145.30  decedents dying after December 31, 2002. 
145.31     Sec. 21.  Laws 2001, First Special Session chapter 5, 
145.32  article 9, section 12, the effective date, is amended to read: 
145.33     [EFFECTIVE DATE.] This section is effective for assignment 
145.34  of refunds filed with the commissioner after December 31, 2001.  
145.35  The time period for filing assignments expires December 31, 
145.36  2003, but assignments filed on or before that date remain in 
146.1   effect until satisfied or canceled. 
146.2      Sec. 22.  [REPEALER.] 
146.3      (a) Minnesota Statutes 2002, sections 290.0671, subdivision 
146.4   3; and 290.0675, subdivision 5, are repealed effective for tax 
146.5   years beginning after December 31, 2002. 
146.6      (b) Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 
146.7   8009.7200; 8009.7300; 8009.7400; and 8092.1000, are repealed 
146.8   effective the day following final enactment.  
146.9                              ARTICLE 7 
146.10                           FEDERAL UPDATE 
146.11     Section 1.  Minnesota Statutes 2002, section 289A.02, 
146.12  subdivision 7, is amended to read: 
146.13     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
146.14  defined otherwise, "Internal Revenue Code" means the Internal 
146.15  Revenue Code of 1986, as amended through March 15 December 31, 
146.16  2002. 
146.17     [EFFECTIVE DATE.] This section is effective the day 
146.18  following final enactment. 
146.19     Sec. 2.  Minnesota Statutes 2002, section 290.01, 
146.20  subdivision 19, is amended to read: 
146.21     Subd. 19.  [NET INCOME.] The term "net income" means the 
146.22  federal taxable income, as defined in section 63 of the Internal 
146.23  Revenue Code of 1986, as amended through the date named in this 
146.24  subdivision, incorporating any elections made by the taxpayer in 
146.25  accordance with the Internal Revenue Code in determining federal 
146.26  taxable income for federal income tax purposes, and with the 
146.27  modifications provided in subdivisions 19a to 19f. 
146.28     In the case of a regulated investment company or a fund 
146.29  thereof, as defined in section 851(a) or 851(g) of the Internal 
146.30  Revenue Code, federal taxable income means investment company 
146.31  taxable income as defined in section 852(b)(2) of the Internal 
146.32  Revenue Code, except that:  
146.33     (1) the exclusion of net capital gain provided in section 
146.34  852(b)(2)(A) of the Internal Revenue Code does not apply; 
146.35     (2) the deduction for dividends paid under section 
146.36  852(b)(2)(D) of the Internal Revenue Code must be applied by 
147.1   allowing a deduction for capital gain dividends and 
147.2   exempt-interest dividends as defined in sections 852(b)(3)(C) 
147.3   and 852(b)(5) of the Internal Revenue Code; and 
147.4      (3) the deduction for dividends paid must also be applied 
147.5   in the amount of any undistributed capital gains which the 
147.6   regulated investment company elects to have treated as provided 
147.7   in section 852(b)(3)(D) of the Internal Revenue Code.  
147.8      The net income of a real estate investment trust as defined 
147.9   and limited by section 856(a), (b), and (c) of the Internal 
147.10  Revenue Code means the real estate investment trust taxable 
147.11  income as defined in section 857(b)(2) of the Internal Revenue 
147.12  Code.  
147.13     The net income of a designated settlement fund as defined 
147.14  in section 468B(d) of the Internal Revenue Code means the gross 
147.15  income as defined in section 468B(b) of the Internal Revenue 
147.16  Code. 
147.17     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
147.18  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
147.19  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
147.20  Protection Act, Public Law Number 104-188, the provisions of 
147.21  Public Law Number 104-117, the provisions of sections 313(a) and 
147.22  (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 
147.23  1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 
147.24  1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 
147.25  and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 
147.26  Public Law Number 105-34, the provisions of section 6010 of the 
147.27  Internal Revenue Service Restructuring and Reform Act of 1998, 
147.28  Public Law Number 105-206, the provisions of section 4003 of the 
147.29  Omnibus Consolidated and Emergency Supplemental Appropriations 
147.30  Act, 1999, Public Law Number 105-277, and the provisions of 
147.31  section 318 of the Consolidated Appropriation Act of 2001, 
147.32  Public Law Number 106-554, shall become effective at the time 
147.33  they become effective for federal purposes. 
147.34     The Internal Revenue Code of 1986, as amended through 
147.35  December 31, 1996, shall be in effect for taxable years 
147.36  beginning after December 31, 1996. 
148.1      The provisions of sections 202(a) and (b), 221(a), 225, 
148.2   312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
148.3   (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
148.4   1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
148.5   1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
148.6   of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
148.7   the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 
148.8   7002, and 7003 of the Internal Revenue Service Restructuring and 
148.9   Reform Act of 1998, Public Law Number 105-206, the provisions of 
148.10  section 3001 of the Omnibus Consolidated and Emergency 
148.11  Supplemental Appropriations Act, 1999, Public Law Number 
148.12  105-277, the provisions of section 3001 of the Miscellaneous 
148.13  Trade and Technical Corrections Act of 1999, Public Law Number 
148.14  106-36, and the provisions of section 316 of the Consolidated 
148.15  Appropriation Act of 2001, Public Law Number 106-554, shall 
148.16  become effective at the time they become effective for federal 
148.17  purposes. 
148.18     The Internal Revenue Code of 1986, as amended through 
148.19  December 31, 1997, shall be in effect for taxable years 
148.20  beginning after December 31, 1997. 
148.21     The provisions of sections 5002, 6009, 6011, and 7001 of 
148.22  the Internal Revenue Service Restructuring and Reform Act of 
148.23  1998, Public Law Number 105-206, the provisions of section 9010 
148.24  of the Transportation Equity Act for the 21st Century, Public 
148.25  Law Number 105-178, the provisions of sections 1004, 4002, and 
148.26  5301 of the Omnibus Consolidation and Emergency Supplemental 
148.27  Appropriations Act, 1999, Public Law Number 105-277, the 
148.28  provision of section 303 of the Ricky Ray Hemophilia Relief Fund 
148.29  Act of 1998, Public Law Number 105-369, the provisions of 
148.30  sections 532, 534, 536, 537, and 538 of the Ticket to Work and 
148.31  Work Incentives Improvement Act of 1999, Public Law Number 
148.32  106-170, the provisions of the Installment Tax Correction Act of 
148.33  2000, Public Law Number 106-573, and the provisions of section 
148.34  309 of the Consolidated Appropriation Act of 2001, Public Law 
148.35  Number 106-554, shall become effective at the time they become 
148.36  effective for federal purposes. 
149.1      The Internal Revenue Code of 1986, as amended through 
149.2   December 31, 1998, shall be in effect for taxable years 
149.3   beginning after December 31, 1998.  
149.4      The provisions of the FSC Repeal and Extraterritorial 
149.5   Income Exclusion Act of 2000, Public Law Number 106-519, and the 
149.6   provision of section 412 of the Job Creation and Worker 
149.7   Assistance Act of 2002, Public Law Number 107-147, shall become 
149.8   effective at the time it became effective for federal purposes. 
149.9      The Internal Revenue Code of 1986, as amended through 
149.10  December 31, 1999, shall be in effect for taxable years 
149.11  beginning after December 31, 1999.  The provisions of sections 
149.12  306 and 401 of the Consolidated Appropriation Act of 2001, 
149.13  Public Law Number 106-554, and the provision of section 
149.14  632(b)(2)(A) of the Economic Growth and Tax Relief 
149.15  Reconciliation Act of 2001, Public Law Number 107-16, and 
149.16  provisions of sections 101 and 402 of the Job Creation and 
149.17  Worker Assistance Act of 2002, Public Law Number 107-147, shall 
149.18  become effective at the same time it became effective for 
149.19  federal purposes. 
149.20     The Internal Revenue Code of 1986, as amended through 
149.21  December 31, 2000, shall be in effect for taxable years 
149.22  beginning after December 31, 2000.  The provisions of sections 
149.23  659a and 671 of the Economic Growth and Tax Relief 
149.24  Reconciliation Act of 2001, Public Law Number 107-16, the 
149.25  provisions of sections 104, 105, and 111 of the Victims of 
149.26  Terrorism Tax Relief Act of 2001, Public Law Number 107-134, and 
149.27  the provisions of sections 201, 403, 413, and 606 of the Job 
149.28  Creation and Worker Assistance Act of 2002, Public Law Number 
149.29  107-147, shall become effective at the same time it became 
149.30  effective for federal purposes. 
149.31     The Internal Revenue Code of 1986, as amended through March 
149.32  15, 2002, shall be in effect for taxable years beginning after 
149.33  December 31, 2001. 
149.34     The provisions of sections 101 and 102 of the Victims of 
149.35  Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 
149.36  shall become effective at the same time it becomes effective for 
150.1   federal purposes. 
150.2      The Internal Revenue Code of 1986, as amended through 
150.3   December 31, 2002, shall be in effect for taxable years 
150.4   beginning after December 31, 2002. 
150.5      Except as otherwise provided, references to the Internal 
150.6   Revenue Code in subdivisions 19a to 19g mean the code in effect 
150.7   for purposes of determining net income for the applicable year. 
150.8      [EFFECTIVE DATE.] This section is effective the day 
150.9   following final enactment. 
150.10     Sec. 3.  Minnesota Statutes 2002, section 290.01, 
150.11  subdivision 31, is amended to read: 
150.12     Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
150.13  defined otherwise, "Internal Revenue Code" means the Internal 
150.14  Revenue Code of 1986, as amended through March 15 December 31, 
150.15  2002. 
150.16     [EFFECTIVE DATE.] This section is effective the day 
150.17  following final enactment. 
150.18     Sec. 4.  Minnesota Statutes 2002, section 290A.03, 
150.19  subdivision 15, is amended to read: 
150.20     Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
150.21  means the Internal Revenue Code of 1986, as amended 
150.22  through March 15 December 31, 2002. 
150.23     [EFFECTIVE DATE.] This section is effective for refunds 
150.24  payable for rents paid in 2003 and thereafter and property taxes 
150.25  payable in 2004 and thereafter. 
150.26                             ARTICLE 8 
150.27                DEPARTMENT PROPERTY TAX INITIATIVES 
150.28     Section 1.  Minnesota Statutes 2002, section 270.06, is 
150.29  amended to read: 
150.30     270.06 [POWERS AND DUTIES.] 
150.31     The commissioner of revenue shall: 
150.32     (1) have and exercise general supervision over the 
150.33  administration of the assessment and taxation laws of the state, 
150.34  over assessors, town, county, and city boards of review and 
150.35  equalization, and all other assessing officers in the 
150.36  performance of their duties, to the end that all assessments of 
151.1   property be made relatively just and equal in compliance with 
151.2   the laws of the state; 
151.3      (2) confer with, advise, and give the necessary 
151.4   instructions and directions to local assessors and local boards 
151.5   of review throughout the state as to their duties under the laws 
151.6   of the state; 
151.7      (3) direct proceedings, actions, and prosecutions to be 
151.8   instituted to enforce the laws relating to the liability and 
151.9   punishment of public officers and officers and agents of 
151.10  corporations for failure or negligence to comply with the 
151.11  provisions of the laws of this state governing returns of 
151.12  assessment and taxation of property, and cause complaints to be 
151.13  made against local assessors, members of boards of equalization, 
151.14  members of boards of review, or any other assessing or taxing 
151.15  officer, to the proper authority, for their removal from office 
151.16  for misconduct or negligence of duty; 
151.17     (4) require county attorneys to assist in the commencement 
151.18  of prosecutions in actions or proceedings for removal, 
151.19  forfeiture and punishment for violation of the laws of this 
151.20  state in respect to the assessment and taxation of property in 
151.21  their respective districts or counties; 
151.22     (5) require town, city, county, and other public officers 
151.23  to report information as to the assessment of property, 
151.24  collection of taxes received from licenses and other sources, 
151.25  and such other information as may be needful in the work of the 
151.26  department of revenue, in such form and upon such blanks as the 
151.27  commissioner may prescribe; 
151.28     (6) require individuals, copartnerships, companies, 
151.29  associations, and corporations to furnish information concerning 
151.30  their capital, funded or other debt, current assets and 
151.31  liabilities, earnings, operating expenses, taxes, as well as all 
151.32  other statements now required by law for taxation purposes; 
151.33     (7) subpoena witnesses, at a time and place reasonable 
151.34  under the circumstances, to appear and give testimony, and to 
151.35  produce books, records, papers and documents for inspection and 
151.36  copying relating to any matter which the commissioner may have 
152.1   authority to investigate or determine; 
152.2      (8) issue a subpoena which does not identify the person or 
152.3   persons with respect to whose liability the subpoena is issued, 
152.4   but only if (a) the subpoena relates to the investigation of a 
152.5   particular person or ascertainable group or class of persons, 
152.6   (b) there is a reasonable basis for believing that such person 
152.7   or group or class of persons may fail or may have failed to 
152.8   comply with any law administered by the commissioner, (c) the 
152.9   information sought to be obtained from the examination of the 
152.10  records (and the identity of the person or persons with respect 
152.11  to whose liability the subpoena is issued) is not readily 
152.12  available from other sources, (d) the subpoena is clear and 
152.13  specific as to the information sought to be obtained, and (e) 
152.14  the information sought to be obtained is limited solely to the 
152.15  scope of the investigation.  Provided further that the party 
152.16  served with a subpoena which does not identify the person or 
152.17  persons with respect to whose tax liability the subpoena is 
152.18  issued shall have the right, within 20 days after service of the 
152.19  subpoena, to petition the district court for the judicial 
152.20  district in which lies the county in which that party is located 
152.21  for a determination as to whether the commissioner of revenue 
152.22  has complied with all the requirements in (a) to (e), and thus, 
152.23  whether the subpoena is enforceable.  If no such petition is 
152.24  made by the party served within the time prescribed, the 
152.25  subpoena shall have the force and effect of a court order; 
152.26     (9) cause the deposition of witnesses residing within or 
152.27  without the state, or absent therefrom, to be taken, upon notice 
152.28  to the interested party, if any, in like manner that depositions 
152.29  of witnesses are taken in civil actions in the district court, 
152.30  in any matter which the commissioner may have authority to 
152.31  investigate or determine; 
152.32     (10) investigate the tax laws of other states and countries 
152.33  and to formulate and submit to the legislature such legislation 
152.34  as the commissioner may deem expedient to prevent evasions of 
152.35  assessment and taxing laws, and secure just and equal taxation 
152.36  and improvement in the system of assessment and taxation in this 
153.1   state; 
153.2      (11) consult and confer with the governor upon the subject 
153.3   of taxation, the administration of the laws in regard thereto, 
153.4   and the progress of the work of the department of revenue, and 
153.5   furnish the governor, from time to time, such assistance and 
153.6   information as the governor may require relating to tax matters; 
153.7      (12) transmit to the governor, on or before the third 
153.8   Monday in December of each even-numbered year, and to each 
153.9   member of the legislature, on or before November 15 of each 
153.10  even-numbered year, the report of the department of revenue for 
153.11  the preceding years, showing all the taxable property in the 
153.12  state and the value of the same, in tabulated form; 
153.13     (13) inquire into the methods of assessment and taxation 
153.14  and ascertain whether the assessors faithfully discharge their 
153.15  duties, particularly as to their compliance with the laws 
153.16  requiring the assessment of all property not exempt from 
153.17  taxation; 
153.18     (14) administer and enforce the assessment and collection 
153.19  of state taxes and fees, including the use of any remedy 
153.20  available to nongovernmental creditors, and, from time to time, 
153.21  make, publish, and distribute rules for the administration and 
153.22  enforcement of assessments and fees laws administered by the 
153.23  commissioner and state tax laws.  The rules have the force of 
153.24  law; 
153.25     (15) prepare blank forms for the returns required by state 
153.26  tax law and distribute them throughout the state, furnishing 
153.27  them subject to charge on application; 
153.28     (16) prescribe rules governing the qualification and 
153.29  practice of agents, attorneys, or other persons representing 
153.30  taxpayers before the commissioner.  The rules may require that 
153.31  those persons, agents, and attorneys show that they are of good 
153.32  character and in good repute, have the necessary qualifications 
153.33  to give taxpayers valuable services, and are otherwise competent 
153.34  to advise and assist taxpayers in the presentation of their case 
153.35  before being recognized as representatives of taxpayers.  After 
153.36  due notice and opportunity for hearing, the commissioner may 
154.1   suspend and bar from further practice before the commissioner 
154.2   any person, agent, or attorney who is shown to be incompetent or 
154.3   disreputable, who refuses to comply with the rules, or who with 
154.4   intent to defraud, willfully or knowingly deceives, misleads, or 
154.5   threatens a taxpayer or prospective taxpayer, by words, 
154.6   circular, letter, or by advertisement.  This clause does not 
154.7   curtail the rights of individuals to appear in their own behalf 
154.8   or partners or corporations' officers to appear in behalf of 
154.9   their respective partnerships or corporations; 
154.10     (17) appoint agents as the commissioner considers necessary 
154.11  to make examinations and determinations.  The agents have the 
154.12  rights and powers conferred on the commissioner to subpoena, 
154.13  examine, and copy books, records, papers, or memoranda, subpoena 
154.14  witnesses, administer oaths and affirmations, and take 
154.15  testimony.  In addition to administrative subpoenas of the 
154.16  commissioner and the agents, upon demand of the commissioner or 
154.17  an agent, the court administrator of any district court shall 
154.18  issue a subpoena for the attendance of a witness or the 
154.19  production of books, papers, records, or memoranda before the 
154.20  agent for inspection and copying.  Disobedience of a court 
154.21  administrator's subpoena shall be punished by the district court 
154.22  of the district in which the subpoena is issued, or in the case 
154.23  of a subpoena issued by the commissioner or an agent, by the 
154.24  district court of the district in which the party served with 
154.25  the subpoena is located, in the same manner as contempt of the 
154.26  district court; 
154.27     (18) appoint and employ additional help, purchase supplies 
154.28  or materials, or incur other expenditures in the enforcement of 
154.29  state tax laws as considered necessary.  The salaries of all 
154.30  agents and employees provided for in this chapter shall be fixed 
154.31  by the appointing authority, subject to the approval of the 
154.32  commissioner of administration; 
154.33     (19) execute and administer any agreement with the 
154.34  secretary of the treasury of the United States or a 
154.35  representative of another state regarding the exchange of 
154.36  information and administration of the tax laws; 
155.1      (20) authorize the use of unmarked motor vehicles to 
155.2   conduct seizures or criminal investigations pursuant to the 
155.3   commissioner's authority; and 
155.4      (21) exercise other powers and perform other duties 
155.5   required of or imposed upon the commissioner of revenue by law.  
155.6      [EFFECTIVE DATE.] This section is effective the day 
155.7   following final enactment. 
155.8      Sec. 2.  Minnesota Statutes 2002, section 270.10, 
155.9   subdivision 1a, is amended to read: 
155.10     Subd. 1a.  [NOTIFICATION TO TAXPAYER.] At the same time 
155.11  that notice of the assessment, determination, or order of the 
155.12  commissioner is given to a taxpayer, the taxpayer must be 
155.13  notified in writing of the right to appeal to the tax court, and 
155.14  if applicable, to the small claims division.  Except in the case 
155.15  of mathematical or clerical errors, the notice must contain a 
155.16  description of the basis for, including applicable law and other 
155.17  factors considered in the determination, and a listing of the 
155.18  amounts of tax due, interest, additions to tax, and penalties.  
155.19  Failure to provide all the required information does not 
155.20  invalidate the notice for purposes of satisfying statutory 
155.21  notice requirements if the notice contains sufficient 
155.22  information to advise the taxpayer that an assessment, order, or 
155.23  other determination has been made.  The taxpayer may request 
155.24  further clarification within the time provided for appealing the 
155.25  determination.  In any notice of assessment, determination, or 
155.26  order dealing with property valuation or assessment for property 
155.27  tax purposes by the commissioner of revenue or a local unit of 
155.28  government, the taxpayer must be notified in writing that a 
155.29  taxpayer must appeal to the town or city board of equalization 
155.30  and to the county board of equalization before appealing to the 
155.31  small claims division of the tax court, except for those 
155.32  taxpayers whose original assessments are determined by the 
155.33  commissioner of revenue.  
155.34     [EFFECTIVE DATE.] This section is effective the day 
155.35  following final enactment. 
155.36     Sec. 3.  Minnesota Statutes 2002, section 272.02, is 
156.1   amended by adding a subdivision to read: 
156.2      Subd. 56.  [COMPREHENSIVE HEALTH ASSOCIATION.] All property 
156.3   owned by the comprehensive health association is exempt to the 
156.4   extent provided in section 62E.10, subdivision 1. 
156.5      [EFFECTIVE DATE.] This section is effective the day 
156.6   following final enactment. 
156.7      Sec. 4.  Minnesota Statutes 2002, section 272.02, is 
156.8   amended by adding a subdivision to read: 
156.9      Subd. 57.  [PRIVATE CEMETERIES.] All property owned by 
156.10  private cemeteries is exempt to the extent provided in section 
156.11  307.09. 
156.12     [EFFECTIVE DATE.] This section is effective the day 
156.13  following final enactment. 
156.14     Sec. 5.  Minnesota Statutes 2002, section 272.02, is 
156.15  amended by adding a subdivision to read: 
156.16     Subd. 58.  [WESTERN LAKE SUPERIOR SANITARY BOARD.] All 
156.17  property owned, leased, controlled, used, or occupied for 
156.18  public, governmental, and municipal purposes by the Western Lake 
156.19  Superior Sanitary Board is exempt to the extent provided in 
156.20  section 458D.23. 
156.21     [EFFECTIVE DATE.] This section is effective the day 
156.22  following final enactment. 
156.23     Sec. 6.  Minnesota Statutes 2002, section 272.02, is 
156.24  amended by adding a subdivision to read: 
156.25     Subd. 59.  [UNFINISHED SALE OR RENTAL PROJECTS.] Unfinished 
156.26  sale or rental projects are exempt to the extent provided in 
156.27  section 469.155, subdivision 17. 
156.28     [EFFECTIVE DATE.] This section is effective the day 
156.29  following final enactment. 
156.30     Sec. 7.  Minnesota Statutes 2002, section 272.02, is 
156.31  amended by adding a subdivision to read: 
156.32     Subd. 60.  [SKYWAYS.] The pedestrian skyway system, 
156.33  underground pedestrian concourse, the people mover system, and 
156.34  publicly owned parking structures are exempt to the extent 
156.35  provided in section 469.127. 
156.36     [EFFECTIVE DATE.] This section is effective the day 
157.1   following final enactment. 
157.2      Sec. 8.  Minnesota Statutes 2002, section 272.02, is 
157.3   amended by adding a subdivision to read: 
157.4      Subd. 61.  [MUNICIPAL RECREATION FACILITIES.] All property 
157.5   acquired and used by a city is exempt to the extent provided in 
157.6   section 471.191, subdivision 4. 
157.7      [EFFECTIVE DATE.] This section is effective the day 
157.8   following final enactment. 
157.9      Sec. 9.  Minnesota Statutes 2002, section 272.02, is 
157.10  amended by adding a subdivision to read: 
157.11     Subd. 62.  [WATER AND WASTEWATER TREATMENT 
157.12  FACILITIES.] Related facilities owned by water and wastewater 
157.13  treatment providers who have contracted with a municipality to 
157.14  provide capital intensive public services to the municipality 
157.15  are exempt to the extent provided in section 471A.05. 
157.16     [EFFECTIVE DATE.] This section is effective the day 
157.17  following final enactment. 
157.18     Sec. 10.  Minnesota Statutes 2002, section 272.12, is 
157.19  amended to read: 
157.20     272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.] 
157.21     When: 
157.22     (a) a deed or other instrument conveying land, 
157.23     (b) a plat of any town site or addition thereto, 
157.24     (c) a survey required pursuant to section 508.47, 
157.25     (d) a condominium plat subject to chapter 515 or 515A or a 
157.26  declaration that contains such a plat, or 
157.27     (e) a common interest community plat subject to chapter 
157.28  515B or a declaration that contains such a plat, 
157.29  is presented to the county auditor for transfer, the auditor 
157.30  shall ascertain from the records if there be taxes delinquent 
157.31  upon the land described therein, or if it has been sold for 
157.32  taxes.  An assignment of a sheriff's or referee's certificate of 
157.33  sale, when the certificate of sale describes real estate, and 
157.34  certificates of redemption from mortgage or lien foreclosure 
157.35  sales, when the certificate of redemption encompasses real 
157.36  estate and is issued to a junior creditor, are considered 
158.1   instruments conveying land for the purposes of this section and 
158.2   section 272.121.  If there are taxes delinquent, the auditor 
158.3   shall certify to the same; and upon payment of such taxes, or in 
158.4   case no taxes are delinquent, shall transfer the land upon the 
158.5   books of the auditor's office, and note upon the instrument, 
158.6   over official signature, the words, "no delinquent taxes and 
158.7   transfer entered," or, if the land described has been sold or 
158.8   assigned to an actual purchaser for taxes, the words "paid by 
158.9   sale of land described within;" and, unless such statement is 
158.10  made upon such instrument, the county recorder or the registrar 
158.11  of titles shall refuse to receive or record the same; provided, 
158.12  that sheriff's or referees' certificates of sale on execution or 
158.13  foreclosure of a lien or mortgage, certificates of redemption 
158.14  from mortgage or lien foreclosure sales issued to the redeeming 
158.15  mortgagor or lienee, deeds of distribution made by a personal 
158.16  representative in probate proceedings, decrees and judgments, 
158.17  receivers receipts, patents, and copies of town or statutory 
158.18  city plats, in case the original plat filed in the office of the 
158.19  county recorder has been lost or destroyed, and the instruments 
158.20  releasing, removing and discharging reversionary and forfeiture 
158.21  provisions affecting title to land and instruments releasing, 
158.22  removing or discharging easement rights in land or building or 
158.23  other restrictions, may be recorded without such certificate; 
158.24  and, provided that instruments conveying land and, as 
158.25  appurtenant thereto an easement over adjacent tract or tracts of 
158.26  land, may be recorded without such certificate as to the land 
158.27  covered by such easement; and provided further, that any 
158.28  instrument granting an easement made in favor of any public 
158.29  utility or pipe line for conveying gas, liquids or solids in 
158.30  suspension, in the nature of a right-of-way over, along, across 
158.31  or under a tract of land may be recorded without such 
158.32  certificate as to the land covered by such easement.  Any 
158.33  instrument amending or restating the declarations, bylaws, 
158.34  plats, or other enabling Documents governing homeowners 
158.35  associations of condominiums, townhouses, common interest 
158.36  ownership communities, and other planned unit developments may 
159.1   be recorded without the auditor's certificate to the extent 
159.2   provided in section 515B.1-116(f). 
159.3      A deed of distribution made by a personal representative in 
159.4   a probate proceeding, a decree, or a judgment that conveys land 
159.5   shall be presented to the county auditor, who shall transfer the 
159.6   land upon the books of the auditor's office and note upon the 
159.7   instrument, over official signature, the words, "transfer 
159.8   entered", and the instrument may then be recorded.  A decree or 
159.9   judgment that affects title to land but does not convey land may 
159.10  be recorded without presentation to the auditor. 
159.11     A violation of this section by the county recorder or the 
159.12  registrar of titles shall be a gross misdemeanor, and, in 
159.13  addition to the punishment therefor, the recorder or registrar 
159.14  shall be liable to the grantee of any instrument so recorded for 
159.15  the amount of any damages sustained. 
159.16     When, as a condition to permitting the recording of deed or 
159.17  other instrument affecting the title to real estate previously 
159.18  forfeited to the state under the provisions of sections 281.16 
159.19  to 281.25, county officials, after such real estate has been 
159.20  purchased or repurchased, have required the payment of taxes 
159.21  erroneously assumed to have accrued against such real estate 
159.22  after forfeiture and before the date of purchase or repurchase, 
159.23  the sum required to be so paid shall be refunded to the persons 
159.24  entitled thereto out of moneys in the funds in which the sum so 
159.25  paid was placed.  Delinquent taxes are those taxes deemed 
159.26  delinquent under section 279.02. 
159.27     [EFFECTIVE DATE.] This section is effective for deeds or 
159.28  instruments accepted for recording or registration on or after 
159.29  July 1, 2003. 
159.30     Sec. 11.  Minnesota Statutes 2002, section 273.05, 
159.31  subdivision 1, is amended to read: 
159.32     Subdivision 1.  [APPOINTMENT OF TOWN AND CITY ASSESSORS.] 
159.33  Notwithstanding any other provision of law all town assessors 
159.34  shall be appointed by the town board, and notwithstanding any 
159.35  charter provisions to the contrary, all city assessors shall be 
159.36  appointed by the city council or other appointing authority as 
160.1   provided by law or charter.  Such assessors shall be residents 
160.2   of the state but need not be a resident of the town or city for 
160.3   which they are appointed.  They shall be selected and appointed 
160.4   because of their knowledge and training in the field of property 
160.5   taxation.  All town and statutory city assessors shall be 
160.6   appointed for indefinite terms.  A town or statutory city 
160.7   assessor who is an employee may be dismissed by the appointing 
160.8   authority for cause.  The term of the town or city assessors may 
160.9   be terminated at any time by the town board or city council on 
160.10  charges by the commissioner of revenue of inefficiency or 
160.11  neglect of duty.  Vacancies in the office of town or city 
160.12  assessor shall be filled within 90 days by appointment of the 
160.13  respective appointing authority indicated above.  If the vacancy 
160.14  is not filled within 90 days, the office shall be terminated.  
160.15  When a vacancy in the office of town or city assessor is not 
160.16  filled by appointment, and it is imperative that the office of 
160.17  assessor be filled, the county auditor shall appoint some 
160.18  resident of the county as assessor for such town or city.  The 
160.19  county auditor may appoint the county assessor as assessor for 
160.20  such town or city, in which case the town or city shall pay to 
160.21  the county treasurer the amount determined by the county auditor 
160.22  to be due for the services performed and expenses incurred by 
160.23  the county assessor in acting as assessor for such town or 
160.24  city.  The term of any town or statutory city assessor in a 
160.25  county electing in accordance with section 273.052 shall be 
160.26  terminated as provided in section 273.055. 
160.27     The commissioner of revenue may recommend to the state 
160.28  board of assessors the nonrenewal, suspension, or revocation of 
160.29  an assessor's license as provided in sections 270.41 to 270.53. 
160.30     [EFFECTIVE DATE.] This section is effective the day 
160.31  following final enactment and applies to every town or city 
160.32  assessor whether that assessor was appointed before, on, or 
160.33  after the effective date. 
160.34     Sec. 12.  Minnesota Statutes 2002, section 273.061, is 
160.35  amended by adding a subdivision to read: 
160.36     Subd. 1a.  [COMPATIBLE OFFICES.] A person appointed as the 
161.1   county assessor also may serve as the county auditor, county 
161.2   treasurer, or county auditor-treasurer if those offices are 
161.3   appointive, provided that the person in the combined appointed 
161.4   office must not serve on the county board of appeal and 
161.5   equalization under section 274.13.  In a county in which the 
161.6   functions of the county assessor are combined with those of the 
161.7   county auditor or county auditor-treasurer, the county board may 
161.8   not delegate any authority, power, or responsibility under 
161.9   section 375.192, subdivision 4. 
161.10     Sec. 13.  Minnesota Statutes 2002, section 273.061, is 
161.11  amended by adding a subdivision to read: 
161.12     Subd. 1b.  [COMPATIBLE OFFICES IN COUNTIES CHANGING TO 
161.13  APPOINTED AUDITOR.] In a county in which the office of auditor, 
161.14  treasurer, or auditor-treasurer is an elective position, a 
161.15  person appointed as the county assessor also may serve as the 
161.16  county auditor, county treasurer, or county auditor-treasurer if 
161.17  a proposal to make the affected office appointive has been 
161.18  approved as required by other law and will be effective within 
161.19  five years. 
161.20     Sec. 14.  Minnesota Statutes 2002, section 273.061, is 
161.21  amended by adding a subdivision to read: 
161.22     Subd. 1c.  [INCOMPATIBLE OFFICES.] The person appointed as 
161.23  the county assessor must not also be the county attorney, a 
161.24  county board member, an elected county auditor, an elected 
161.25  county treasurer, an elected county auditor-treasurer, a town 
161.26  board supervisor for a town in the same county, or a city mayor 
161.27  or council member for a city in the same county.  The person 
161.28  appointed as the city assessor must not also be a city council 
161.29  member or mayor for the same city.  A person appointed as the 
161.30  town assessor must not also be a town board supervisor for the 
161.31  same town.  Except as provided in subdivision 1b, an assessor 
161.32  who accepts a position that is incompatible with the office of 
161.33  assessor is deemed to have resigned from the assessor position. 
161.34     Sec. 15.  Minnesota Statutes 2002, section 273.11, 
161.35  subdivision 1a, is amended to read: 
161.36     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
162.1   property classified as agricultural homestead or nonhomestead, 
162.2   residential homestead or nonhomestead, timber, or noncommercial 
162.3   seasonal residential recreational residential, the assessor 
162.4   shall compare the value with the taxable portion of the value 
162.5   determined in the preceding assessment.  
162.6      For assessment year 2002, the amount of the increase shall 
162.7   not exceed the greater of (1) ten percent of the value in the 
162.8   preceding assessment, or (2) 15 percent of the difference 
162.9   between the current assessment and the preceding assessment. 
162.10     For assessment year 2003, the amount of the increase shall 
162.11  not exceed the greater of (1) 12 percent of the value in the 
162.12  preceding assessment, or (2) 20 percent of the difference 
162.13  between the current assessment and the preceding assessment. 
162.14     For assessment year 2004, the amount of the increase shall 
162.15  not exceed the greater of (1) 15 percent of the value in the 
162.16  preceding assessment, or (2) 25 percent of the difference 
162.17  between the current assessment and the preceding assessment. 
162.18     For assessment year 2005, the amount of the increase shall 
162.19  not exceed the greater of (1) 15 percent of the value in the 
162.20  preceding assessment, or (2) 33 percent of the difference 
162.21  between the current assessment and the preceding assessment.  
162.22     For assessment year 2006, the amount of the increase shall 
162.23  not exceed the greater of (1) 15 percent of the value in the 
162.24  preceding assessment, or (2) 50 percent of the difference 
162.25  between the current assessment and the preceding assessment. 
162.26     This limitation shall not apply to increases in value due 
162.27  to improvements.  For purposes of this subdivision, the term 
162.28  "assessment" means the value prior to any exclusion under 
162.29  subdivision 16. 
162.30     The provisions of this subdivision shall be in effect 
162.31  through assessment year 2006 as provided in this subdivision. 
162.32     For purposes of the assessment/sales ratio study conducted 
162.33  under section 127A.48, and the computation of state aids paid 
162.34  under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
162.35  477A, market values and net tax capacities determined under this 
162.36  subdivision and subdivision 16, shall be used. 
163.1      [EFFECTIVE DATE.] This section is effective the day 
163.2   following final enactment. 
163.3      Sec. 16.  Minnesota Statutes 2002, section 273.124, 
163.4   subdivision 1, is amended to read: 
163.5      Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
163.6   that is occupied and used for the purposes of a homestead by its 
163.7   owner, who must be a Minnesota resident, is a residential 
163.8   homestead.  
163.9      Agricultural land, as defined in section 273.13, 
163.10  subdivision 23, that is occupied and used as a homestead by its 
163.11  owner, who must be a Minnesota resident, is an agricultural 
163.12  homestead. 
163.13     Dates for establishment of a homestead and homestead 
163.14  treatment provided to particular types of property are as 
163.15  provided in this section.  
163.16     Property held by a trustee under a trust is eligible for 
163.17  homestead classification if the requirements under this chapter 
163.18  are satisfied. 
163.19     The assessor shall require proof, as provided in 
163.20  subdivision 13, of the facts upon which classification as a 
163.21  homestead may be determined.  Notwithstanding any other law, the 
163.22  assessor may at any time require a homestead application to be 
163.23  filed in order to verify that any property classified as a 
163.24  homestead continues to be eligible for homestead status.  
163.25  Notwithstanding any other law to the contrary, the department of 
163.26  revenue may, upon request from an assessor, verify whether an 
163.27  individual who is requesting or receiving homestead 
163.28  classification has filed a Minnesota income tax return as a 
163.29  resident for the most recent taxable year for which the 
163.30  information is available. 
163.31     When there is a name change or a transfer of homestead 
163.32  property, the assessor may reclassify the property in the next 
163.33  assessment unless a homestead application is filed to verify 
163.34  that the property continues to qualify for homestead 
163.35  classification. 
163.36     (b) For purposes of this section, homestead property shall 
164.1   include property which is used for purposes of the homestead but 
164.2   is separated from the homestead by a road, street, lot, 
164.3   waterway, or other similar intervening property.  The term "used 
164.4   for purposes of the homestead" shall include but not be limited 
164.5   to uses for gardens, garages, or other outbuildings commonly 
164.6   associated with a homestead, but shall not include vacant land 
164.7   held primarily for future development.  In order to receive 
164.8   homestead treatment for the noncontiguous property, the owner 
164.9   must use the property for the purposes of the homestead, and 
164.10  must apply to the assessor, both by the deadlines given in 
164.11  subdivision 9.  After initial qualification for the homestead 
164.12  treatment, additional applications for subsequent years are not 
164.13  required. 
164.14     (c) Residential real estate that is occupied and used for 
164.15  purposes of a homestead by a relative of the owner is a 
164.16  homestead but only to the extent of the homestead treatment that 
164.17  would be provided if the related owner occupied the property.  
164.18  For purposes of this paragraph and paragraph (g), "relative" 
164.19  means a parent, stepparent, child, stepchild, grandparent, 
164.20  grandchild, brother, sister, uncle, aunt, nephew, or niece.  
164.21  This relationship may be by blood or marriage.  Property that 
164.22  has been classified as seasonal residential recreational 
164.23  residential property at any time during which it has been owned 
164.24  by the current owner or spouse of the current owner will not be 
164.25  reclassified as a homestead unless it is occupied as a homestead 
164.26  by the owner; this prohibition also applies to property that, in 
164.27  the absence of this paragraph, would have been classified as 
164.28  seasonal residential recreational residential property at the 
164.29  time when the residence was constructed.  Neither the related 
164.30  occupant nor the owner of the property may claim a property tax 
164.31  refund under chapter 290A for a homestead occupied by a 
164.32  relative.  In the case of a residence located on agricultural 
164.33  land, only the house, garage, and immediately surrounding one 
164.34  acre of land shall be classified as a homestead under this 
164.35  paragraph, except as provided in paragraph (d). 
164.36     (d) Agricultural property that is occupied and used for 
165.1   purposes of a homestead by a relative of the owner, is a 
165.2   homestead, only to the extent of the homestead treatment that 
165.3   would be provided if the related owner occupied the property, 
165.4   and only if all of the following criteria are met: 
165.5      (1) the relative who is occupying the agricultural property 
165.6   is a son, daughter, grandson, granddaughter, father, or mother 
165.7   of the owner of the agricultural property or a son, daughter, 
165.8   grandson, or granddaughter of the spouse of the owner of the 
165.9   agricultural property; 
165.10     (2) the owner of the agricultural property must be a 
165.11  Minnesota resident; 
165.12     (3) the owner of the agricultural property must not receive 
165.13  homestead treatment on any other agricultural property in 
165.14  Minnesota; and 
165.15     (4) the owner of the agricultural property is limited to 
165.16  only one agricultural homestead per family under this paragraph. 
165.17     Neither the related occupant nor the owner of the property 
165.18  may claim a property tax refund under chapter 290A for a 
165.19  homestead occupied by a relative qualifying under this 
165.20  paragraph.  For purposes of this paragraph, "agricultural 
165.21  property" means the house, garage, other farm buildings and 
165.22  structures, and agricultural land. 
165.23     Application must be made to the assessor by the owner of 
165.24  the agricultural property to receive homestead benefits under 
165.25  this paragraph.  The assessor may require the necessary proof 
165.26  that the requirements under this paragraph have been met. 
165.27     (e) In the case of property owned by a property owner who 
165.28  is married, the assessor must not deny homestead treatment in 
165.29  whole or in part if only one of the spouses occupies the 
165.30  property and the other spouse is absent due to:  (1) marriage 
165.31  dissolution proceedings, (2) legal separation, (3) employment or 
165.32  self-employment in another location, or (4) other personal 
165.33  circumstances causing the spouses to live separately, not 
165.34  including an intent to obtain two homestead classifications for 
165.35  property tax purposes.  To qualify under clause (3), the 
165.36  spouse's place of employment or self-employment must be at least 
166.1   50 miles distant from the other spouse's place of employment, 
166.2   and the homesteads must be at least 50 miles distant from each 
166.3   other.  Homestead treatment, in whole or in part, shall not be 
166.4   denied to the owner's spouse who previously occupied the 
166.5   residence with the owner if the absence of the owner is due to 
166.6   one of the exceptions provided in this paragraph. 
166.7      (f) The assessor must not deny homestead treatment in whole 
166.8   or in part if: 
166.9      (1) in the case of a property owner who is not married, the 
166.10  owner is absent due to residence in a nursing home, boarding 
166.11  care facility, or an elderly assisted living facility property 
166.12  as defined in section 273.13, subdivision 25a, and the property 
166.13  is not otherwise occupied; or 
166.14     (2) in the case of a property owner who is married, the 
166.15  owner or the owner's spouse or both are absent due to residence 
166.16  in a nursing home, boarding care facility, or an elderly 
166.17  assisted living facility property as defined in section 273.13, 
166.18  subdivision 25a, and the property is not occupied or is occupied 
166.19  only by the owner's spouse. 
166.20     (g) If an individual is purchasing property with the intent 
166.21  of claiming it as a homestead and is required by the terms of 
166.22  the financing agreement to have a relative shown on the deed as 
166.23  a coowner, the assessor shall allow a full homestead 
166.24  classification.  This provision only applies to first-time 
166.25  purchasers, whether married or single, or to a person who had 
166.26  previously been married and is purchasing as a single individual 
166.27  for the first time.  The application for homestead benefits must 
166.28  be on a form prescribed by the commissioner and must contain the 
166.29  data necessary for the assessor to determine if full homestead 
166.30  benefits are warranted. 
166.31     (h) If residential or agricultural real estate is occupied 
166.32  and used for purposes of a homestead by a child of a deceased 
166.33  owner and the property is subject to jurisdiction of probate 
166.34  court, the child shall receive relative homestead classification 
166.35  under paragraph (c) or (d) to the same extent they would be 
166.36  entitled to it if the owner was still living, until the probate 
167.1   is completed.  For purposes of this paragraph, "child" includes 
167.2   a relationship by blood or by marriage. 
167.3      [EFFECTIVE DATE.] This section is effective the day 
167.4   following final enactment. 
167.5      Sec. 17.  Minnesota Statutes 2002, section 273.13, 
167.6   subdivision 25, is amended to read: 
167.7      Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
167.8   estate containing four or more units and used or held for use by 
167.9   the owner or by the tenants or lessees of the owner as a 
167.10  residence for rental periods of 30 days or more.  Class 4a also 
167.11  includes hospitals licensed under sections 144.50 to 144.56, 
167.12  other than hospitals exempt under section 272.02, and contiguous 
167.13  property used for hospital purposes, without regard to whether 
167.14  the property has been platted or subdivided.  The market value 
167.15  of class 4a property has a class rate of 1.8 percent for taxes 
167.16  payable in 2002, 1.5 percent for taxes payable in 2003, and 1.25 
167.17  percent for taxes payable in 2004 and thereafter, except that 
167.18  class 4a property consisting of a structure for which 
167.19  construction commenced after June 30, 2001, has a class rate of 
167.20  1.25 percent of market value for taxes payable in 2003 and 
167.21  subsequent years. 
167.22     (b) Class 4b includes: 
167.23     (1) residential real estate containing less than four units 
167.24  that does not qualify as class 4bb, other than seasonal 
167.25  residential, and recreational property; 
167.26     (2) manufactured homes not classified under any other 
167.27  provision; 
167.28     (3) a dwelling, garage, and surrounding one acre of 
167.29  property on a nonhomestead farm classified under subdivision 23, 
167.30  paragraph (b) containing two or three units; and 
167.31     (4) unimproved property that is classified residential as 
167.32  determined under subdivision 33.  
167.33     The market value of class 4b property has a class rate of 
167.34  1.5 percent for taxes payable in 2002, and 1.25 percent for 
167.35  taxes payable in 2003 and thereafter. 
167.36     (c) Class 4bb includes: 
168.1      (1) nonhomestead residential real estate containing one 
168.2   unit, other than seasonal residential, and recreational 
168.3   property; and 
168.4      (2) a single family dwelling, garage, and surrounding one 
168.5   acre of property on a nonhomestead farm classified under 
168.6   subdivision 23, paragraph (b). 
168.7      Class 4bb property has the same class rates as class 1a 
168.8   property under subdivision 22. 
168.9      Property that has been classified as seasonal recreational 
168.10  residential recreational property at any time during which it 
168.11  has been owned by the current owner or spouse of the current 
168.12  owner does not qualify for class 4bb. 
168.13     (d) Class 4c property includes: 
168.14     (1) except as provided in subdivision 22, paragraph (c), 
168.15  real property devoted to temporary and seasonal residential 
168.16  occupancy for recreation purposes, including real property 
168.17  devoted to temporary and seasonal residential occupancy for 
168.18  recreation purposes and not devoted to commercial purposes for 
168.19  more than 250 days in the year preceding the year of 
168.20  assessment.  For purposes of this clause, property is devoted to 
168.21  a commercial purpose on a specific day if any portion of the 
168.22  property is used for residential occupancy, and a fee is charged 
168.23  for residential occupancy.  In order for a property to be 
168.24  classified as class 4c, seasonal residential recreational 
168.25  residential for commercial purposes, at least 40 percent of the 
168.26  annual gross lodging receipts related to the property must be 
168.27  from business conducted during 90 consecutive days and either 
168.28  (i) at least 60 percent of all paid bookings by lodging guests 
168.29  during the year must be for periods of at least two consecutive 
168.30  nights; or (ii) at least 20 percent of the annual gross receipts 
168.31  must be from charges for rental of fish houses, boats and 
168.32  motors, snowmobiles, downhill or cross-country ski equipment, or 
168.33  charges for marina services, launch services, and guide 
168.34  services, or the sale of bait and fishing tackle.  For purposes 
168.35  of this determination, a paid booking of five or more nights 
168.36  shall be counted as two bookings.  Class 4c also includes 
169.1   commercial use real property used exclusively for recreational 
169.2   purposes in conjunction with class 4c property devoted to 
169.3   temporary and seasonal residential occupancy for recreational 
169.4   purposes, up to a total of two acres, provided the property is 
169.5   not devoted to commercial recreational use for more than 250 
169.6   days in the year preceding the year of assessment and is located 
169.7   within two miles of the class 4c property with which it is 
169.8   used.  Class 4c property classified in this clause also includes 
169.9   the remainder of class 1c resorts provided that the entire 
169.10  property including that portion of the property classified as 
169.11  class 1c also meets the requirements for class 4c under this 
169.12  clause; otherwise the entire property is classified as class 3.  
169.13  Owners of real property devoted to temporary and seasonal 
169.14  residential occupancy for recreation purposes and all or a 
169.15  portion of which was devoted to commercial purposes for not more 
169.16  than 250 days in the year preceding the year of assessment 
169.17  desiring classification as class 1c or 4c, must submit a 
169.18  declaration to the assessor designating the cabins or units 
169.19  occupied for 250 days or less in the year preceding the year of 
169.20  assessment by January 15 of the assessment year.  Those cabins 
169.21  or units and a proportionate share of the land on which they are 
169.22  located will be designated class 1c or 4c as otherwise 
169.23  provided.  The remainder of the cabins or units and a 
169.24  proportionate share of the land on which they are located will 
169.25  be designated as class 3a.  The owner of property desiring 
169.26  designation as class 1c or 4c property must provide guest 
169.27  registers or other records demonstrating that the units for 
169.28  which class 1c or 4c designation is sought were not occupied for 
169.29  more than 250 days in the year preceding the assessment if so 
169.30  requested.  The portion of a property operated as a (1) 
169.31  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
169.32  facility operated on a commercial basis not directly related to 
169.33  temporary and seasonal residential occupancy for recreation 
169.34  purposes shall not qualify for class 1c or 4c; 
169.35     (2) qualified property used as a golf course if: 
169.36     (i) it is open to the public on a daily fee basis.  It may 
170.1   charge membership fees or dues, but a membership fee may not be 
170.2   required in order to use the property for golfing, and its green 
170.3   fees for golfing must be comparable to green fees typically 
170.4   charged by municipal courses; and 
170.5      (ii) it meets the requirements of section 273.112, 
170.6   subdivision 3, paragraph (d). 
170.7      A structure used as a clubhouse, restaurant, or place of 
170.8   refreshment in conjunction with the golf course is classified as 
170.9   class 3a property; 
170.10     (3) real property up to a maximum of one acre of land owned 
170.11  by a nonprofit community service oriented organization; provided 
170.12  that the property is not used for a revenue-producing activity 
170.13  for more than six days in the calendar year preceding the year 
170.14  of assessment and the property is not used for residential 
170.15  purposes on either a temporary or permanent basis.  For purposes 
170.16  of this clause, a "nonprofit community service oriented 
170.17  organization" means any corporation, society, association, 
170.18  foundation, or institution organized and operated exclusively 
170.19  for charitable, religious, fraternal, civic, or educational 
170.20  purposes, and which is exempt from federal income taxation 
170.21  pursuant to section 501(c)(3), (10), or (19) of the Internal 
170.22  Revenue Code of 1986, as amended through December 31, 1990.  For 
170.23  purposes of this clause, "revenue-producing activities" shall 
170.24  include but not be limited to property or that portion of the 
170.25  property that is used as an on-sale intoxicating liquor or 3.2 
170.26  percent malt liquor establishment licensed under chapter 340A, a 
170.27  restaurant open to the public, bowling alley, a retail store, 
170.28  gambling conducted by organizations licensed under chapter 349, 
170.29  an insurance business, or office or other space leased or rented 
170.30  to a lessee who conducts a for-profit enterprise on the 
170.31  premises.  Any portion of the property which is used for 
170.32  revenue-producing activities for more than six days in the 
170.33  calendar year preceding the year of assessment shall be assessed 
170.34  as class 3a.  The use of the property for social events open 
170.35  exclusively to members and their guests for periods of less than 
170.36  24 hours, when an admission is not charged nor any revenues are 
171.1   received by the organization shall not be considered a 
171.2   revenue-producing activity; 
171.3      (4) post-secondary student housing of not more than one 
171.4   acre of land that is owned by a nonprofit corporation organized 
171.5   under chapter 317A and is used exclusively by a student 
171.6   cooperative, sorority, or fraternity for on-campus housing or 
171.7   housing located within two miles of the border of a college 
171.8   campus; 
171.9      (5) manufactured home parks as defined in section 327.14, 
171.10  subdivision 3; 
171.11     (6) real property that is actively and exclusively devoted 
171.12  to indoor fitness, health, social, recreational, and related 
171.13  uses, is owned and operated by a not-for-profit corporation, and 
171.14  is located within the metropolitan area as defined in section 
171.15  473.121, subdivision 2; 
171.16     (7) a leased or privately owned noncommercial aircraft 
171.17  storage hangar not exempt under section 272.01, subdivision 2, 
171.18  and the land on which it is located, provided that: 
171.19     (i) the land is on an airport owned or operated by a city, 
171.20  town, county, metropolitan airports commission, or group 
171.21  thereof; and 
171.22     (ii) the land lease, or any ordinance or signed agreement 
171.23  restricting the use of the leased premise, prohibits commercial 
171.24  activity performed at the hangar. 
171.25     If a hangar classified under this clause is sold after June 
171.26  30, 2000, a bill of sale must be filed by the new owner with the 
171.27  assessor of the county where the property is located within 60 
171.28  days of the sale; and 
171.29     (8) residential real estate, a portion of which is used by 
171.30  the owner for homestead purposes, and that is also a place of 
171.31  lodging, if all of the following criteria are met: 
171.32     (i) rooms are provided for rent to transient guests that 
171.33  generally stay for periods of 14 or fewer days; 
171.34     (ii) meals are provided to persons who rent rooms, the cost 
171.35  of which is incorporated in the basic room rate; 
171.36     (iii) meals are not provided to the general public except 
172.1   for special events on fewer than seven days in the calendar year 
172.2   preceding the year of the assessment; and 
172.3      (iv) the owner is the operator of the property. 
172.4   The market value subject to the 4c classification under this 
172.5   clause is limited to five rental units.  Any rental units on the 
172.6   property in excess of five, must be valued and assessed as class 
172.7   3a.  The portion of the property used for purposes of a 
172.8   homestead by the owner must be classified as class 1a property 
172.9   under subdivision 22. 
172.10     Class 4c property has a class rate of 1.5 percent of market 
172.11  value, except that (i) each parcel of seasonal residential 
172.12  recreational property not used for commercial purposes has the 
172.13  same class rates as class 4bb property, (ii) manufactured home 
172.14  parks assessed under clause (5) have the same class rate as 
172.15  class 4b property, (iii) commercial-use seasonal residential 
172.16  recreational property has a class rate of one percent for the 
172.17  first $500,000 of market value, which includes any market value 
172.18  receiving the one percent rate under subdivision 22, and 1.25 
172.19  percent for the remaining market value, (iv) the market value of 
172.20  property described in clause (4) has a class rate of one 
172.21  percent, (v) the market value of property described in clauses 
172.22  (2) and (6) has a class rate of 1.25 percent, and (vi) that 
172.23  portion of the market value of property in clause (8) qualifying 
172.24  for class 4c property has a class rate of 1.25 percent.  
172.25     (e) Class 4d property is qualifying low-income rental 
172.26  housing certified to the assessor by the housing finance agency 
172.27  under sections 273.126 and 462A.071.  Class 4d includes land in 
172.28  proportion to the total market value of the building that is 
172.29  qualifying low-income rental housing.  For all properties 
172.30  qualifying as class 4d, the market value determined by the 
172.31  assessor must be based on the normal approach to value using 
172.32  normal unrestricted rents. 
172.33     Class 4d property has a class rate of 0.9 percent for taxes 
172.34  payable in 2002, and one percent for taxes payable in 2003 and 
172.35  1.25 percent for taxes payable in 2004 and thereafter.  
172.36     [EFFECTIVE DATE.] This section is effective the day 
173.1   following final enactment. 
173.2      Sec. 18.  Minnesota Statutes 2002, section 273.1398, 
173.3   subdivision 4b, is amended to read: 
173.4      Subd. 4b.  [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 
173.5   Until the costs of court administration as defined under section 
173.6   480.183, subdivision 3, in a county have been transferred to the 
173.7   state, each county in a judicial district transferring court 
173.8   administration costs to state funding after July 1, 2001, shall 
173.9   budget for the funding of these costs an amount at least equal 
173.10  to the certified budget amount for calendar year 2001, increased 
173.11  by six percent for each year from 2001 to 2003 and by eight 
173.12  percent from 2004 to the year of the transfer.  The county shall 
173.13  budget, fund, and authorize expenditures not less than the 
173.14  amount calculated under this paragraph plus the temporary aid 
173.15  amount under subdivision 4c for maintenance of effort of 
173.16  administrative costs. 
173.17     (b) By July 15, 2001, the court shall certify to each 
173.18  county in the judicial district its cost of court administration 
173.19  as defined under section 480.183, subdivision 3, based on 2001 
173.20  budgets.  In making that determination, the court shall exclude 
173.21  the budget costs of the county for the following categories: 
173.22     (1) rent; 
173.23     (2) examiner of titles; 
173.24     (3) civil court appointed attorneys for civil matters; 
173.25     (4) hospitalization costs; and 
173.26     (5) cost of maintaining vital statistics. 
173.27     The amount of funding provided by a county for courts that 
173.28  is increased by the maintenance of effort requirement may not be 
173.29  used by a county to pay the costs described in clauses (1) to 
173.30  (5). 
173.31     [EFFECTIVE DATE.] This section is effective the day 
173.32  following final enactment. 
173.33     Sec. 19.  Minnesota Statutes 2002, section 273.1398, 
173.34  subdivision 4d, is amended to read: 
173.35     Subd. 4d.  [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.] 
173.36  For aid payable in 2004, each county's aid under subdivision 2 
174.1   shall be permanently reduced by an amount equal to the county's 
174.2   2004 reimbursement for nonfederal expenditures for out-of-home 
174.3   placements, as provided in section 245.775, provided that 
174.4   payments will be made under section 477A.0123 in calendar year 
174.5   2004.  The counties shall provide all information requested by 
174.6   the commissioner of human services necessary to allow the 
174.7   commissioner to certify the previous three years' average 
174.8   nonfederal costs to the commissioner of revenue by July 15, 2004 
174.9   1, 2003.  The aid reduction under this subdivision must not 
174.10  exceed the difference between (1) the amount of aid calculated 
174.11  for the county for calendar year 2004 under subdivision 2, 
174.12  including any addition under section 477A.07, and (2) the amount 
174.13  of any aid reductions for the state takeover of courts contained 
174.14  in Laws 2001, First Special Session chapter 5, article 5. 
174.15     [EFFECTIVE DATE.] This section is effective for aids 
174.16  payable in 2004 and thereafter. 
174.17     Sec. 20.  Minnesota Statutes 2002, section 273.372, is 
174.18  amended to read: 
174.19     273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD 
174.20  VALUATIONS.] 
174.21     An appeal by a utility or railroad company concerning the 
174.22  exemption, valuation, or classification on of property for which 
174.23  the commissioner of revenue has provided the city or county 
174.24  assessor with commissioner's orders valuations by order, or for 
174.25  which the commissioner has recommended values to the city or 
174.26  county assessor, must be brought against the commissioner in tax 
174.27  court or in district court of the county where the property is 
174.28  located, and not against the county or taxing district where the 
174.29  property is located.  If the appeal to a court is of from an 
174.30  order of the commissioner, it must be brought under chapter 
174.31  271.  If the appeal is from the exemption, valuation, 
174.32  classification, or tax that results from implementation of the 
174.33  commissioner's order or recommendation, it must be brought under 
174.34  chapter 278, and the procedures provisions in that chapter 
174.35  apply, except that service shall be on the commissioner only and 
174.36  not on the county officials specified in section 278.01, 
175.1   subdivision 1.  This provision applies to the property contained 
175.2   under described in sections 273.33, 273.35, 273.36, and 273.37, 
175.3   but only if the appealed values have remained unchanged from 
175.4   those provided to the city or county by the commissioner.  If 
175.5   the exemption, valuation, or classification being appealed has 
175.6   been changed by the city or county, then the action must be 
175.7   brought under chapter 278 in the county where the property is 
175.8   located and proper service must be made upon the county 
175.9   officials as specified in section 278.01, subdivision 1. 
175.10     Upon filing of any appeal by a utility company or railroad 
175.11  against the commissioner, the commissioner shall give notice by 
175.12  first class mail to each county which would be affected by the 
175.13  appeal. 
175.14     Companies that submit the reports under section 270.82 or 
175.15  273.371 by the date specified in that section, or by the date 
175.16  specified by the commissioner in an extension, may appeal 
175.17  administratively to the commissioner under the procedures in 
175.18  section 270.11, subdivision 6, prior to bringing an action in 
175.19  tax court or in district court, however, instituting an 
175.20  administrative appeal with the commissioner does not change or 
175.21  modify the deadline in section 271.06 for appealing an order of 
175.22  the commissioner in tax court or the deadline in section 278.01 
175.23  for bringing an action filing a property tax claim or objection 
175.24  in tax court or district court. 
175.25     [EFFECTIVE DATE.] This section is effective the day 
175.26  following final enactment. 
175.27     Sec. 21.  Minnesota Statutes 2002, section 273.42, 
175.28  subdivision 2, is amended to read: 
175.29     Subd. 2.  Owners of land that is an agricultural or 
175.30  nonagricultural homestead, nonhomestead agricultural land, 
175.31  rental residential property, and both commercial and 
175.32  noncommercial seasonal residential recreational property, as 
175.33  those terms are defined in section 273.13 listed on records of 
175.34  the county auditor or county treasurer over which runs a high 
175.35  voltage transmission line as defined in section 116C.52, 
175.36  subdivision 3 with a capacity of 200 kilovolts or more, except a 
176.1   high voltage transmission line the construction of which was 
176.2   commenced prior to July 1, 1974, shall receive a property tax 
176.3   credit in an amount determined by multiplying a fraction, the 
176.4   numerator of which is the length of high voltage transmission 
176.5   line which runs over that parcel and the denominator of which is 
176.6   the total length of that particular line running over all 
176.7   property within the city or township by ten percent of the 
176.8   transmission line tax revenue derived from the tax on that 
176.9   portion of the line within the city or township pursuant to 
176.10  section 273.36.  In the case of property owners in unorganized 
176.11  townships, the property tax credit shall be determined by 
176.12  multiplying a fraction, the numerator of which is the length of 
176.13  the qualifying high voltage transmission line which runs over 
176.14  the parcel and the denominator of which is the total length of 
176.15  the qualifying high voltage transmission line running over all 
176.16  property within all the unorganized townships within the county, 
176.17  by the total utility property tax credit fund amount available 
176.18  within the county for that year pursuant to subdivision 1.  
176.19  Where a right-of-way width is shared by more than one property 
176.20  owner, the numerator shall be adjusted by multiplying the length 
176.21  of line on the parcel by the proportion of the total width on 
176.22  the parcel owned by that property owner.  The amount of credit 
176.23  for which the property qualifies shall not exceed 20 percent of 
176.24  the total gross tax on the parcel prior to deduction of the 
176.25  state paid agricultural credit and the state paid homestead 
176.26  credit, provided that, if the property containing the 
176.27  right-of-way is included in a parcel which exceeds 40 acres, the 
176.28  total gross tax on the parcel shall be multiplied by a fraction, 
176.29  the numerator of which is the sum of the number of acres in each 
176.30  quarter-quarter section or portion thereof which contains a 
176.31  right-of-way and the denominator of which is the total number of 
176.32  acres in the parcel set forth on the tax statement, and the 
176.33  maximum credit shall be 20 percent of the product of that 
176.34  computation, prior to deduction of those credits.  The auditor 
176.35  of the county in which the affected parcel is located shall 
176.36  calculate the amount of the credit due for each parcel and 
177.1   transmit that information to the county treasurer.  The county 
177.2   auditor, in computing the credit received pursuant to section 
177.3   273.135, shall reduce the gross tax by the amount of the credit 
177.4   received pursuant to this section, unless the amount of the 
177.5   credit would be less than $10. 
177.6      If, after the county auditor has computed the credit to 
177.7   those qualifying property owners in unorganized townships, there 
177.8   is money remaining in the utility property tax credit fund, then 
177.9   that excess amount in the fund shall be returned to the general 
177.10  school fund of the county. 
177.11     [EFFECTIVE DATE.] This section is effective the day 
177.12  following final enactment. 
177.13     Sec. 22.  Minnesota Statutes 2002, section 274.01, 
177.14  subdivision 1, is amended to read: 
177.15     Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
177.16  GRIEVANCES.] (a) The town board of a town, or the council or 
177.17  other governing body of a city, is the board of appeal and 
177.18  equalization except (1) in cities whose charters provide for a 
177.19  board of equalization or (2) in any city or town that has 
177.20  transferred its local board of review power and duties to the 
177.21  county board as provided in subdivision 3.  The county assessor 
177.22  shall fix a day and time when the board or the board of 
177.23  equalization shall meet in the assessment districts of the 
177.24  county.  Notwithstanding any law or city charter to the 
177.25  contrary, a city board of equalization shall be referred to as a 
177.26  board of appeal and equalization.  On or before February 15 of 
177.27  each year the assessor shall give written notice of the time to 
177.28  the city or town clerk.  Notwithstanding the provisions of any 
177.29  charter to the contrary, the meetings must be held between April 
177.30  1 and May 31 each year.  The clerk shall give published and 
177.31  posted notice of the meeting at least ten days before the date 
177.32  of the meeting.  
177.33     The board shall meet at the office of the clerk to review 
177.34  the assessment and classification of property in the town or 
177.35  city.  No changes in valuation or classification which are 
177.36  intended to correct errors in judgment by the county assessor 
178.1   may be made by the county assessor after the board has adjourned 
178.2   in those cities or towns that hold a local board of review; 
178.3   however, corrections of errors that are merely clerical in 
178.4   nature or changes that extend homestead treatment to property 
178.5   are permitted after adjournment until the tax extension date for 
178.6   that assessment year.  The changes must be fully documented and 
178.7   maintained in the assessor's office and must be available for 
178.8   review by any person.  A copy of the changes made during this 
178.9   period in those cities or towns that hold a local board of 
178.10  review must be sent to the county board no later than December 
178.11  31 of the assessment year.  
178.12     (b) The board shall determine whether the taxable property 
178.13  in the town or city has been properly placed on the list and 
178.14  properly valued by the assessor.  If real or personal property 
178.15  has been omitted, the board shall place it on the list with its 
178.16  market value, and correct the assessment so that each tract or 
178.17  lot of real property, and each article, parcel, or class of 
178.18  personal property, is entered on the assessment list at its 
178.19  market value.  No assessment of the property of any person may 
178.20  be raised unless the person has been duly notified of the intent 
178.21  of the board to do so.  On application of any person feeling 
178.22  aggrieved, the board shall review the assessment or 
178.23  classification, or both, and correct it as appears just.  The 
178.24  board may not make an individual market value adjustment or 
178.25  classification change that would benefit the property in cases 
178.26  where the owner or other person having control over the property 
178.27  will not permit the assessor to inspect the property and the 
178.28  interior of any buildings or structures.  
178.29     (c) A local board may reduce assessments upon petition of 
178.30  the taxpayer but the total reductions must not reduce the 
178.31  aggregate assessment made by the county assessor by more than 
178.32  one percent.  If the total reductions would lower the aggregate 
178.33  assessments made by the county assessor by more than one 
178.34  percent, none of the adjustments may be made.  The assessor 
178.35  shall correct any clerical errors or double assessments 
178.36  discovered by the board without regard to the one percent 
179.1   limitation.  
179.2      (d) A local board does not have authority to grant an 
179.3   exemption or to order property removed from the tax rolls. 
179.4      (e) A majority of the members may act at the meeting, and 
179.5   adjourn from day to day until they finish hearing the cases 
179.6   presented.  The assessor shall attend, with the assessment books 
179.7   and papers, and take part in the proceedings, but must not 
179.8   vote.  The county assessor, or an assistant delegated by the 
179.9   county assessor shall attend the meetings.  The board shall list 
179.10  separately, on a form appended to the assessment book, all 
179.11  omitted property added to the list by the board and all items of 
179.12  property increased or decreased, with the market value of each 
179.13  item of property, added or changed by the board, placed opposite 
179.14  the item.  The county assessor shall enter all changes made by 
179.15  the board in the assessment book.  
179.16     (e) (f) Except as provided in subdivision 3, if a person 
179.17  fails to appear in person, by counsel, or by written 
179.18  communication before the board after being duly notified of the 
179.19  board's intent to raise the assessment of the property, or if a 
179.20  person feeling aggrieved by an assessment or classification 
179.21  fails to apply for a review of the assessment or classification, 
179.22  the person may not appear before the county board of appeal and 
179.23  equalization for a review of the assessment or classification.  
179.24  This paragraph does not apply if an assessment was made after 
179.25  the local board meeting, as provided in section 273.01, or if 
179.26  the person can establish not having received notice of market 
179.27  value at least five days before the local board meeting.  
179.28     (f) (g) The local board must complete its work and adjourn 
179.29  within 20 days from the time of convening stated in the notice 
179.30  of the clerk, unless a longer period is approved by the 
179.31  commissioner of revenue.  No action taken after that date is 
179.32  valid.  All complaints about an assessment or classification 
179.33  made after the meeting of the board must be heard and determined 
179.34  by the county board of equalization.  A nonresident may, at any 
179.35  time, before the meeting of the board file written objections to 
179.36  an assessment or classification with the county assessor.  The 
180.1   objections must be presented to the board at its meeting by the 
180.2   county assessor for its consideration. 
180.3      [EFFECTIVE DATE.] This section is effective the day 
180.4   following final enactment. 
180.5      Sec. 23.  Minnesota Statutes 2002, section 274.13, 
180.6   subdivision 1, is amended to read: 
180.7      Subdivision 1.  [MEMBERS; MEETINGS; RULES FOR EQUALIZING 
180.8   ASSESSMENTS.] The county commissioners, or a majority of them, 
180.9   with the county auditor, or, if the auditor cannot be present, 
180.10  the deputy county auditor, or, if there is no deputy, the court 
180.11  administrator of the district court, shall form a board for the 
180.12  equalization of the assessment of the property of the county, 
180.13  including the property of all cities whose charters provide for 
180.14  a board of equalization.  This board shall be referred to as the 
180.15  county board of appeal and equalization.  The board shall meet 
180.16  annually, on the date specified in section 274.14, at the office 
180.17  of the auditor.  Each member shall take an oath to fairly and 
180.18  impartially perform duties as a member.  The board shall examine 
180.19  and compare the returns of the assessment of property of the 
180.20  towns or districts, and equalize them so that each tract or lot 
180.21  of real property and each article or class of personal property 
180.22  is entered on the assessment list at its market value, subject 
180.23  to the following rules: 
180.24     (1) The board shall raise the valuation of each tract or 
180.25  lot of real property which in its opinion is returned below its 
180.26  market value to the sum believed to be its market value.  The 
180.27  board must first give notice of intention to raise the valuation 
180.28  to the person in whose name it is assessed, if the person is a 
180.29  resident of the county.  The notice must fix a time and place 
180.30  for a hearing.  
180.31     (2) The board shall reduce the valuation of each tract or 
180.32  lot which in its opinion is returned above its market value to 
180.33  the sum believed to be its market value. 
180.34     (3) The board shall raise the valuation of each class of 
180.35  personal property which in its opinion is returned below its 
180.36  market value to the sum believed to be its market value.  It 
181.1   shall raise the aggregate value of the personal property of 
181.2   individuals, firms, or corporations, when it believes that the 
181.3   aggregate valuation, as returned, is less than the market value 
181.4   of the taxable personal property possessed by the individuals, 
181.5   firms, or corporations, to the sum it believes to be the market 
181.6   value.  The board must first give notice to the persons of 
181.7   intention to do so.  The notice must set a time and place for a 
181.8   hearing. 
181.9      (4) The board shall reduce the valuation of each class of 
181.10  personal property that is returned above its market value to the 
181.11  sum it believes to be its market value.  Upon complaint of a 
181.12  party aggrieved, the board shall reduce the aggregate valuation 
181.13  of the individual's personal property, or of any class of 
181.14  personal property for which the individual is assessed, which in 
181.15  its opinion has been assessed at too large a sum, to the sum it 
181.16  believes was the market value of the individual's personal 
181.17  property of that class.  
181.18     (5) The board must not reduce the aggregate value of all 
181.19  the property of its county, as submitted to the county board of 
181.20  equalization, with the additions made by the auditor under this 
181.21  chapter, by more than one percent of its whole valuation.  The 
181.22  board may raise the aggregate valuation of real property, and of 
181.23  each class of personal property, of the county, or of any town 
181.24  or district of the county, when it believes it is below the 
181.25  market value of the property, or class of property, to the 
181.26  aggregate amount it believes to be its market value. 
181.27     (6) The board shall change the classification of any 
181.28  property which in its opinion is not properly classified. 
181.29     (7) The board does not have the authority to grant an 
181.30  exemption or to order property removed from the tax rolls. 
181.31     [EFFECTIVE DATE.] This section is effective the day 
181.32  following final enactment. 
181.33     Sec. 24.  Minnesota Statutes 2002, section 275.025, 
181.34  subdivision 1, is amended to read: 
181.35     Subdivision 1.  [LEVY AMOUNT.] The state general levy is 
181.36  levied against commercial-industrial property and 
182.1   seasonal residential recreational property, as defined in this 
182.2   section.  The state general levy base amount is $592,000,000 for 
182.3   taxes payable in 2002.  For taxes payable in subsequent years, 
182.4   the levy base amount is increased each year by multiplying the 
182.5   levy base amount for the prior year by the sum of one plus the 
182.6   rate of increase, if any, in the implicit price deflator for 
182.7   government consumption expenditures and gross investment for 
182.8   state and local governments prepared by the Bureau of Economic 
182.9   Analysts of the United States Department of Commerce for the 
182.10  12-month period ending March 31 of the year prior to the year 
182.11  the taxes are payable.  The tax under this section is not 
182.12  treated as a local tax rate under section 469.177 and is not the 
182.13  levy of a governmental unit under chapters 276A and 473F.  
182.14  Beginning in fiscal year 2004, and in each year thereafter, the 
182.15  commissioner of finance shall deposit in an education reserve 
182.16  account, which account is hereby established, the increased 
182.17  amount of the state general levy received for deposit in the 
182.18  general fund for that year over the amount of the state general 
182.19  levy received for deposit in the general fund in fiscal year 
182.20  2003.  The amounts in the education reserve account do not lapse 
182.21  or cancel each year, but remain until appropriated by law for 
182.22  education aid or higher education funding. 
182.23     [EFFECTIVE DATE.] This section is effective for taxes 
182.24  payable in 2004 and thereafter, except that the change from 
182.25  "seasonal recreational property" to "seasonal residential 
182.26  recreational property" is effective the day following final 
182.27  enactment. 
182.28     Sec. 25.  Minnesota Statutes 2002, section 275.025, 
182.29  subdivision 3, is amended to read: 
182.30     Subd. 3.  [SEASONAL RESIDENTIAL RECREATIONAL TAX CAPACITY.] 
182.31  For the purposes of this section, "seasonal residential 
182.32  recreational tax capacity" means the tax capacity of all class 
182.33  4c(1) property under section 273.13, subdivision 25, except that 
182.34  the first $76,000 of market value of each noncommercial class 
182.35  4c(1) property has a tax capacity for this purpose equal to 40 
182.36  percent of its tax capacity under section 273.13. 
183.1      [EFFECTIVE DATE.] This section is effective the day 
183.2   following final enactment. 
183.3      Sec. 26.  Minnesota Statutes 2002, section 275.025, 
183.4   subdivision 4, is amended to read: 
183.5      Subd. 4.  [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 
183.6   The state general tax must be distributed among the counties by 
183.7   applying a uniform rate to each county's commercial-industrial 
183.8   tax capacity and its seasonal residential recreational tax 
183.9   capacity.  Within each county, the tax must be levied by 
183.10  applying a uniform rate against commercial-industrial tax 
183.11  capacity and seasonal residential recreational tax capacity.  By 
183.12  On or before November 1 each year, the commissioner of revenue 
183.13  shall certify the a preliminary state general levy rate to each 
183.14  county auditor that must be used to prepare the notices of 
183.15  proposed property taxes for taxes payable in the following 
183.16  year.  By January 1 of each year, the commissioner shall certify 
183.17  the final state general levy rate to each county auditor that 
183.18  shall be used in spreading taxes.  
183.19     [EFFECTIVE DATE.] This section is effective for taxes 
183.20  payable in 2004 and thereafter, except that the change from 
183.21  "seasonal recreational tax capacity" to "seasonal residential 
183.22  recreational tax capacity" is effective the day following final 
183.23  enactment. 
183.24     Sec. 27.  Minnesota Statutes 2002, section 276.10, is 
183.25  amended to read: 
183.26     276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 
183.27     On the settlement day determined in section 276.09 for each 
183.28  year, the county auditor and county treasurer shall distribute 
183.29  all undistributed funds in the treasury.  The funds must be 
183.30  apportioned as provided by law, and credited to the state, town, 
183.31  city, school district, special district and each county fund.  
183.32  Within 20 days after the distribution is completed, the county 
183.33  auditor shall report to the state auditor in the form prescribed 
183.34  by the state auditor.  The county auditor shall issue a warrant 
183.35  for the payment of money in the county treasury to the credit of 
183.36  the state, town, city, school district, or special districts on 
184.1   application of the persons entitled to receive the payment.  The 
184.2   county auditor may apply the local tax rate from the year before 
184.3   the year of distribution when apportioning and distributing 
184.4   delinquent tax proceeds, if the composition of the previous 
184.5   year's local tax rate between taxing districts is not 
184.6   significantly different from the local tax rate that existed for 
184.7   the year of the delinquency.  
184.8      [EFFECTIVE DATE.] This section is effective for taxes 
184.9   payable in 2004 and thereafter. 
184.10     Sec. 28.  Minnesota Statutes 2002, section 276.11, 
184.11  subdivision 1, is amended to read: 
184.12     Subdivision 1.  [GENERALLY.] As soon as practical after the 
184.13  settlement day determined in section 276.09, the county 
184.14  treasurer shall pay to the state treasurer or the treasurer of a 
184.15  town, city, school district, or special district, on the warrant 
184.16  of the county auditor, all receipts of taxes levied by the 
184.17  taxing district and deliver up all orders and other evidences of 
184.18  indebtedness of the taxing district, taking triplicate receipts 
184.19  for them.  The treasurer shall file one of the receipts with the 
184.20  county auditor, and shall return one by mail on the day of its 
184.21  receipt to the clerk of the town, city, school district, or 
184.22  special district to which payment was made.  The clerk shall 
184.23  keep the receipt in the clerk's office.  Upon written request of 
184.24  the taxing district, to the extent practicable, the county 
184.25  treasurer shall make partial payments of amounts collected 
184.26  periodically in advance of the next settlement and 
184.27  distribution.  A statement prepared by the county treasurer must 
184.28  accompany each payment.  It must state the years for which taxes 
184.29  included in the payment were collected and, for each year, the 
184.30  amount of the taxes and any penalties on the tax.  Upon written 
184.31  request of a taxing district, except school districts, the 
184.32  county treasurer shall pay at least 70 percent of the estimated 
184.33  collection within 30 days after the settlement date determined 
184.34  in section 276.09.  Within seven business days after the due 
184.35  date, or 28 calendar days after the postmark date on the 
184.36  envelopes containing real or personal property tax statements, 
185.1   whichever is latest, the county treasurer shall pay to the 
185.2   treasurer of the school districts 50 percent of the estimated 
185.3   collections arising from taxes levied by and belonging to the 
185.4   school district, unless the school district elects to receive 50 
185.5   percent of the estimated collections arising from taxes levied 
185.6   by and belonging to the school district after making a 
185.7   proportionate reduction to reflect any loss in collections as 
185.8   the result of any delay in mailing tax statements.  In that 
185.9   case, 50 percent of those adjusted, estimated collections shall 
185.10  be paid by the county treasurer to the treasurer of the school 
185.11  district within seven business days of the due date.  The 
185.12  remaining 50 percent of the estimated collections must be paid 
185.13  to the treasurer of the school district within the next seven 
185.14  business days of the later of the dates in the preceding 
185.15  sentence, unless the school district elects to receive the 
185.16  remainder of its estimated collections after a proportionate 
185.17  reduction has been made to reflect any loss in collections as 
185.18  the result of any delay in mailing tax statements.  In that 
185.19  case, the remaining 50 percent of those adjusted, estimated 
185.20  collections shall be paid by the county treasurer to the 
185.21  treasurer of the school district within 14 days of the due 
185.22  date.  The treasurer shall pay the balance of the amounts 
185.23  collected to the state before June 30, or to a municipal 
185.24  corporation or other body within 60 days after the settlement 
185.25  date determined in section 276.09.  After 45 days interest at an 
185.26  annual rate of eight percent accrues and must be paid to the 
185.27  taxing district.  Interest must be paid upon appropriation from 
185.28  the general revenue fund of the county.  If not paid, it may be 
185.29  recovered by the taxing district, in a civil action. 
185.30     [EFFECTIVE DATE.] This section is effective for taxes 
185.31  payable in 2004 and thereafter. 
185.32     Sec. 29.  [276.112] [STATE PROPERTY TAXES; COUNTY 
185.33  TREASURER.] 
185.34     On or before January 25 each year, for the period ending 
185.35  December 31 of the prior year, and on or before June 29 each 
185.36  year, for the period ending on the most recent settlement day 
186.1   determined in section 276.09, and on or before December 2 each 
186.2   year, for the period ending ten business days after November 15, 
186.3   the county treasurer must make full settlement with the county 
186.4   auditor according to sections 276.09, 276.10, and 276.111 for 
186.5   all receipts of state property taxes levied under section 
186.6   275.025, and must transmit those receipts to the commissioner of 
186.7   revenue by electronic means. 
186.8      [EFFECTIVE DATE.] This section is effective the day 
186.9   following final enactment. 
186.10     Sec. 30.  Minnesota Statutes 2002, section 277.20, 
186.11  subdivision 2, is amended to read: 
186.12     Subd. 2.  [FILING OF LIEN FOR ENFORCEABILITY.] The lien 
186.13  imposed by subdivision 1 is not enforceable against any 
186.14  purchaser, mortgagee, pledgee, holder of a Uniform Commercial 
186.15  Code security interest, mechanic's lienor, or judgment lien 
186.16  creditor until a notice of lien has been filed by the county 
186.17  treasurer in the office of the county recorder of the county in 
186.18  which the property is situated, or, in the case of personal 
186.19  property belonging to an individual who is not a resident of 
186.20  this state, or that is a corporation, partnership, or other 
186.21  organization, in the office of the secretary of state.  Priority 
186.22  of a lien created under Laws 1991, chapter 291, article 15, 
186.23  shall be determined in accordance with the provisions of section 
186.24  507.34.  Liens filed in the office of the county recorder shall 
186.25  be filed with the state tax liens filed pursuant to section 
186.26  270.69, and the index shall indicate the name of the county for 
186.27  which the lien was filed.  If the land is registered, the notice 
186.28  of lien shall be filed in the office of the registrar of titles 
186.29  of the county in which the property is registered.  
186.30  Notwithstanding any other law to the contrary, the county 
186.31  treasurer is exempt from the payment of fees when the lien is 
186.32  offered for filing or recording; the fee for filing or recording 
186.33  the lien must be paid at the time the release of lien is offered 
186.34  for filing or recording.  Notwithstanding any law to the 
186.35  contrary, the fee for filing or recording the lien or the 
186.36  release of lien is $15.  
187.1      [EFFECTIVE DATE.] This section is effective for liens filed 
187.2   on or after the day following final enactment. 
187.3      Sec. 31.  Minnesota Statutes 2002, section 279.06, 
187.4   subdivision 1, is amended to read: 
187.5      Subdivision 1.  [LIST AND NOTICE.] Within five days after 
187.6   the filing of such list, the court administrator shall return a 
187.7   copy thereof to the county auditor, with a notice prepared and 
187.8   signed by the court administrator, and attached thereto, which 
187.9   may be substantially in the following form: 
187.10     State of Minnesota        )                            
187.11                               ) ss.                        
187.12     County of ............... )                            
187.13                                              District Court
187.14                               .......... Judicial District.
187.15     The state of Minnesota, to all persons, companies, or 
187.16  corporations who have or claim any estate, right, title, or 
187.17  interest in, claim to, or lien upon, any of the several parcels 
187.18  of land described in the list hereto attached: 
187.19     The list of taxes and penalties on real property for the 
187.20  county of ............................... remaining delinquent 
187.21  on the first Monday in January, ......., has been filed in the 
187.22  office of the court administrator of the district court of said 
187.23  county, of which that hereto attached is a copy.  Therefore, 
187.24  you, and each of you, are hereby required to file in the office 
187.25  of said court administrator, on or before the 20th day after the 
187.26  publication of this notice and list, your answer, in writing, 
187.27  setting forth any objection or defense you may have to the 
187.28  taxes, or any part thereof, upon any parcel of land described in 
187.29  the list, in, to, or on which you have or claim any estate, 
187.30  right, title, interest, claim, or lien, and, in default thereof, 
187.31  judgment will be entered against such parcel of land for the 
187.32  taxes on such list appearing against it, and for all penalties, 
187.33  interest, and costs.  Based upon said judgment, the land shall 
187.34  be sold to the state of Minnesota on the second Monday in May, 
187.35  .......  The period of redemption for all lands sold to the 
187.36  state at a tax judgment sale shall be three years from the date 
188.1   of sale to the state of Minnesota if the land is within an 
188.2   incorporated area unless it is: 
188.3      (a) nonagricultural homesteaded land as defined in section 
188.4   273.13, subdivision 22; 
188.5      (b) homesteaded agricultural land as defined in section 
188.6   273.13, subdivision 23, paragraph (a); 
188.7      (c) seasonal residential recreational land as defined in 
188.8   section 273.13, subdivisions 22, paragraph (c), and 25, 
188.9   paragraph (c) (d), clause (5) (1), in which event the period of 
188.10  redemption is five years from the date of sale to the state of 
188.11  Minnesota; 
188.12     (d) abandoned property and pursuant to section 281.173 a 
188.13  court order has been entered shortening the redemption period to 
188.14  five weeks; or 
188.15     (e) vacant property as described under section 281.174, 
188.16  subdivision 2, and for which a court order is entered shortening 
188.17  the redemption period under section 281.174. 
188.18     The period of redemption for all other lands sold to the 
188.19  state at a tax judgment sale shall be five years from the date 
188.20  of sale.  
188.21     Inquiries as to the proceedings set forth above can be made 
188.22  to the county auditor of ..... county whose address is ..... .  
188.23      (Signed) ............................................., 
188.24      Court Administrator of the District Court of the County 
188.25      of .................................................... 
188.26      (Here insert list.) 
188.27     The list referred to in the notice shall be substantially 
188.28  in the following form: 
188.29     List of real property for the county of 
188.30  ......................., on which taxes remain delinquent on the 
188.31  first Monday in January, .......: 
188.32                        Town of (Fairfield), 
188.33                     Township (40), Range (20), 
188.34   Names (and 
188.35   Current Filed 
188.36   Addresses) for 
189.1    the Taxpayers 
189.2    and Fee Owners 
189.3    and in Addition 
189.4    Those Parties 
189.5    Who Have Filed 
189.6    Their Addresses                            Tax 
189.7    Pursuant to     Subdivision of            Parcel   Total Tax 
189.8    section 276.041    Section       Section  Number  and Penalty
189.9                                                        $ cts.
189.10   John Jones  S.E. 1/4 of S.W. 1/4    10    23101       2.20  
189.11   (825 Fremont  
189.12   Fairfield, MN 
189.13   55000) 
189.14   Bruce Smith  That part of N.E. 1/4 
189.15   (2059 Hand   of S.W. 1/4 desc. as 
189.16   Fairfield,   follows:  Beg. at the 
189.17   MN 55000)    S.E. corner of said 
189.18   and          N.E. 1/4 of S.W. 1/4;  
189.19   Fairfield    thence N. along the E.  
189.20   State Bank   line of said N.E. 1/4 
189.21   (100 Main    of S.W. 1/4 a distance 
189.22   Street       of 600 ft.; thence W. 
189.23   Fairfield,   parallel with the S. 
189.24   MN 55000)    line of said N.E. 1/4 
189.25                of S.W. 1/4 a distance 
189.26                of 600 ft.; thence S. 
189.27                parallel with said E. 
189.28                line a distance of 600 
189.29                ft. to S. line of said 
189.30                N.E. 1/4 of S.W. 1/4;
189.31                thence E. along said S. 
189.32                line a distance of 600 
189.33                ft. to the point of 
189.34                beg. ...............    21    33211       3.15  
189.35     As to platted property, the form of heading shall conform 
189.36  to circumstances and be substantially in the following form:  
190.1                         City of (Smithtown) 
190.2                   Brown's Addition, or Subdivision 
190.3    Names (and 
190.4    Current Filed 
190.5    Addresses) for 
190.6    the Taxpayers 
190.7    and Fee Owners 
190.8    and in Addition 
190.9    Those Parties 
190.10   Who have Filed 
190.11   Their Addresses                         Tax 
190.12   Pursuant to                            Parcel      Total Tax 
190.13   section 276.041     Lot     Block      Number     and Penalty
190.14                                                       $ cts.
190.15   John Jones           15         9      58243          2.20 
190.16   (825 Fremont 
190.17   Fairfield, 
190.18   MN 55000) 
190.19   Bruce Smith          16         9      58244          3.15 
190.20   (2059 Hand 
190.21   Fairfield, 
190.22   MN 55000) 
190.23   and 
190.24   Fairfield 
190.25   State Bank 
190.26   (100 Main Street 
190.27   Fairfield, 
190.28   MN 55000) 
190.29     The names, descriptions, and figures employed in 
190.30  parentheses in the above forms are merely for purposes of 
190.31  illustration. 
190.32     The name of the town, township, range or city, and addition 
190.33  or subdivision, as the case may be, shall be repeated at the 
190.34  head of each column of the printed lists as brought forward from 
190.35  the preceding column.  
190.36     Errors in the list shall not be deemed to be a material 
191.1   defect to affect the validity of the judgment and sale. 
191.2      [EFFECTIVE DATE.] This section is effective the day 
191.3   following final enactment. 
191.4      Sec. 32.  Minnesota Statutes 2002, section 281.17, is 
191.5   amended to read: 
191.6      281.17 [PERIOD FOR REDEMPTION.] 
191.7      Except for properties for which the period of redemption 
191.8   has been limited under sections 281.173 and 281.174, the 
191.9   following periods for redemption apply. 
191.10     The period of redemption for all lands sold to the state at 
191.11  a tax judgment sale shall be three years from the date of sale 
191.12  to the state of Minnesota if the land is within an incorporated 
191.13  area unless it is:  (a) nonagricultural homesteaded land as 
191.14  defined in section 273.13, subdivision 22; (b) homesteaded 
191.15  agricultural land as defined in section 273.13, subdivision 23, 
191.16  paragraph (a); or (c) seasonal residential recreational land as 
191.17  defined in section 273.13, subdivision 22, paragraph (c), or 25, 
191.18  paragraph (d), clause (1), for which the period of redemption is 
191.19  five years from the date of sale to the state of Minnesota. 
191.20     The period of redemption for homesteaded lands as defined 
191.21  in section 273.13, subdivision 22, located in a targeted 
191.22  neighborhood as defined in Laws 1987, chapter 386, article 6, 
191.23  section 4, and sold to the state at a tax judgment sale is three 
191.24  years from the date of sale.  The period of redemption for all 
191.25  lands located in a targeted neighborhood as defined in Laws 
191.26  1987, chapter 386, article 6, section 4, except (1) homesteaded 
191.27  lands as defined in section 273.13, subdivision 22, and (2) for 
191.28  periods of redemption beginning after June 30, 1991, but before 
191.29  July 1, 1996, lands located in the Loring Park targeted 
191.30  neighborhood on which a notice of lis pendens has been served, 
191.31  and sold to the state at a tax judgment sale is one year from 
191.32  the date of sale. 
191.33     The period of redemption for all real property constituting 
191.34  a mixed municipal solid waste disposal facility that is a 
191.35  qualified facility under section 115B.39, subdivision 1, is one 
191.36  year from the date of the sale to the state of Minnesota. 
192.1      The period of redemption for all other lands sold to the 
192.2   state at a tax judgment sale shall be five years from the date 
192.3   of sale, except that the period of redemption for nonhomesteaded 
192.4   agricultural land as defined in section 273.13, subdivision 23, 
192.5   paragraph (b), shall be two years from the date of sale if at 
192.6   that time that property is owned by a person who owns one or 
192.7   more parcels of property on which taxes are delinquent, and the 
192.8   delinquent taxes are more than 25 percent of the prior year's 
192.9   school district levy. 
192.10     [EFFECTIVE DATE.] This section is effective the day 
192.11  following final enactment. 
192.12     Sec. 33.  Minnesota Statutes 2002, section 282.01, 
192.13  subdivision 1b, is amended to read: 
192.14     Subd. 1b.  [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 
192.15  Notwithstanding subdivision 1a, in the case of tax-forfeited 
192.16  lands located in a targeted neighborhood, as defined in section 
192.17  469.201, subdivision 10, and section 473.121, subdivision 2, the 
192.18  commissioner of revenue shall convey by deed in the name of the 
192.19  state any tract of tax-forfeited land held in trust in favor of 
192.20  the taxing districts, to a political subdivision that submits an 
192.21  application to the commissioner of revenue and, in the case of 
192.22  targeted neighborhoods located outside of the metropolitan area 
192.23  as defined in section 473.121, the recommendation of the county 
192.24  board. 
192.25     (b) The application under paragraph (a) must include a 
192.26  statement of facts as to the use to be made of the tract, the 
192.27  need therefor, and a resolution, adopted by the governing body 
192.28  of the political subdivision, finding that the conveyance of a 
192.29  tract of tax-forfeited land to the political subdivision is 
192.30  necessary to provide for the redevelopment of land as productive 
192.31  taxable property.  Deeds of conveyance issued under paragraph 
192.32  (a) are not conditioned on continued use of the property for the 
192.33  use stated in the application.  
192.34     [EFFECTIVE DATE.] This section is effective for deeds 
192.35  issued on or after July 1, 2003. 
192.36     Sec. 34.  Minnesota Statutes 2002, section 282.01, 
193.1   subdivision 7a, is amended to read: 
193.2      Subd. 7a.  [CITY SALES; ALTERNATE PROCEDURES.] Land located 
193.3   in a home rule charter or statutory city, or in a town which 
193.4   cannot be improved because of noncompliance with local 
193.5   ordinances regarding minimum area, shape, frontage or access may 
193.6   be sold by the county auditor pursuant to this subdivision if 
193.7   the auditor determines that a nonpublic sale will encourage the 
193.8   approval of sale of the land by the city or town and promote its 
193.9   return to the tax rolls.  If the physical characteristics of the 
193.10  land indicate that its highest and best use will be achieved by 
193.11  combining it with an adjoining parcel and the city or town has 
193.12  not adopted a local ordinance governing minimum area, shape, 
193.13  frontage, or access, the land may also be sold pursuant to this 
193.14  subdivision.  If the property consists of an undivided interest 
193.15  in land or land and improvements, the property may also be sold 
193.16  to the other owners under this subdivision.  The sale of land 
193.17  pursuant to this subdivision shall be subject to any conditions 
193.18  imposed by the county board pursuant to section 282.03.  The 
193.19  governing body of the city or town may recommend to the county 
193.20  board conditions to be imposed on the sale.  The county auditor 
193.21  may restrict the sale to owners of lands adjoining the land to 
193.22  be sold.  The county auditor shall conduct the sale by sealed 
193.23  bid or may select another means of sale.  The land shall be sold 
193.24  to the highest bidder but in no event shall the land be sold for 
193.25  less than its appraised value.  All owners of land adjoining the 
193.26  land to be sold shall be given a written notice at least 30 days 
193.27  prior to the sale.  
193.28     This subdivision shall be liberally construed to encourage 
193.29  the sale and utilization of tax-forfeited land, to eliminate 
193.30  nuisances and dangerous conditions and to increase compliance 
193.31  with land use ordinances. 
193.32     [EFFECTIVE DATE.] This section is effective for sales 
193.33  occurring on or after the day following final enactment. 
193.34     Sec. 35.  Minnesota Statutes 2002, section 282.08, is 
193.35  amended to read: 
193.36     282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 
194.1      The net proceeds from the sale or rental of any parcel of 
194.2   forfeited land, or from the sale of products from the forfeited 
194.3   land, must be apportioned by the county auditor to the taxing 
194.4   districts interested in the land, as follows: 
194.5      (1) the amounts necessary to pay the state general tax levy 
194.6   against the parcel for taxes payable in the year for which the 
194.7   tax judgment was entered, and for each subsequent payable year 
194.8   up to and including the year of forfeiture, must be apportioned 
194.9   to the state; 
194.10     (2) the portion required to pay any amounts included in the 
194.11  appraised value under section 282.01, subdivision 3, as 
194.12  representing increased value due to any public improvement made 
194.13  after forfeiture of the parcel to the state, but not exceeding 
194.14  the amount certified by the clerk of the municipality must be 
194.15  apportioned to the municipal subdivision entitled to it; 
194.16     (2) (3) the portion required to pay any amount included in 
194.17  the appraised value under section 282.019, subdivision 5, 
194.18  representing increased value due to response actions taken after 
194.19  forfeiture of the parcel to the state, but not exceeding the 
194.20  amount of expenses certified by the pollution control agency or 
194.21  the commissioner of agriculture, must be apportioned to the 
194.22  agency or the commissioner of agriculture and deposited in the 
194.23  fund from which the expenses were paid; 
194.24     (3) (4) the portion of the remainder required to discharge 
194.25  any special assessment chargeable against the parcel for 
194.26  drainage or other purpose whether due or deferred at the time of 
194.27  forfeiture, must be apportioned to the municipal subdivision 
194.28  entitled to it; and 
194.29     (4) (5) any balance must be apportioned as follows: 
194.30     (i) The county board may annually by resolution set aside 
194.31  no more than 30 percent of the receipts remaining to be used for 
194.32  timber development on tax-forfeited land and dedicated memorial 
194.33  forests, to be expended under the supervision of the county 
194.34  board.  It must be expended only on projects approved by the 
194.35  commissioner of natural resources. 
194.36     (ii) The county board may annually by resolution set aside 
195.1   no more than 20 percent of the receipts remaining to be used for 
195.2   the acquisition and maintenance of county parks or recreational 
195.3   areas as defined in sections 398.31 to 398.36, to be expended 
195.4   under the supervision of the county board. 
195.5      (iii) Any balance remaining must be apportioned as 
195.6   follows:  county, 40 percent; town or city, 20 percent; and 
195.7   school district, 40 percent, provided, however, that in 
195.8   unorganized territory that portion which would have accrued to 
195.9   the township must be administered by the county board of 
195.10  commissioners. 
195.11     [EFFECTIVE DATE.] This section is effective for taxes 
195.12  payable in 2004 and thereafter. 
195.13     Sec. 36.  Minnesota Statutes 2002, section 290C.02, 
195.14  subdivision 3, is amended to read: 
195.15     Subd. 3.  [CLAIMANT.] "Claimant" means a person, as that 
195.16  term is defined in section 290.01, subdivision 2, who owns 
195.17  forest land in Minnesota and files an application authorized by 
195.18  the Sustainable Forest Incentive Act.  For purposes of section 
195.19  290C.11, claimant also includes any person bound by the covenant 
195.20  required in section 290C.04.  No more than one claimant is 
195.21  entitled to a payment under this chapter with respect to any 
195.22  tract, parcel, or piece of land enrolled under this chapter that 
195.23  has been assigned the same parcel identification number.  When 
195.24  enrolled forest land is owned by two or more persons, the owners 
195.25  must determine between them which person may claim the payments 
195.26  provided under sections 290C.01 to 290C.11. 
195.27     [EFFECTIVE DATE.] This section is effective the day 
195.28  following final enactment. 
195.29     Sec. 37.  Minnesota Statutes 2002, section 290C.02, 
195.30  subdivision 7, is amended to read: 
195.31     Subd. 7.  [FOREST MANAGEMENT PLAN.] "Forest management 
195.32  plan" means a written document providing a framework for 
195.33  site-specific healthy, productive, and sustainable forest 
195.34  resources.  A forest management plan must include at least the 
195.35  following:  (i) owner-specific forest management goals for the 
195.36  property land; (ii) a reliable field inventory of the individual 
196.1   forest cover types, their age, and density; (iii) a description 
196.2   of the soil type and quality; (iv) an aerial photo and/or map of 
196.3   the vegetation and other natural features of the property land 
196.4   clearly indicating the boundaries of the property land and of 
196.5   the forest land; (v) the proposed future conditions of the 
196.6   property land; (vi) prescriptions to meet proposed future 
196.7   conditions of the property land; (vii) a recommended timetable 
196.8   for implementing the prescribed activities; and (viii) a legal 
196.9   description of the parcels land encompassing the parcels 
196.10  included in the plan.  All management activities prescribed in a 
196.11  plan must be in accordance with the recommended timber 
196.12  harvesting and forest management guidelines.  The commissioner 
196.13  of natural resources shall provide a framework for plan content 
196.14  and updating and revising plans. 
196.15     [EFFECTIVE DATE.] This section is effective the day 
196.16  following final enactment. 
196.17     Sec. 38.  Minnesota Statutes 2002, section 290C.03, is 
196.18  amended to read: 
196.19     290C.03 [ELIGIBILITY REQUIREMENTS.] 
196.20     (a) Property Land may be enrolled in the sustainable forest 
196.21  incentive program under this chapter if all of the following 
196.22  conditions are met: 
196.23     (1) property the land consists of at least 20 contiguous 
196.24  acres and at least 50 percent of the land must meet the 
196.25  definition of forest land in section 88.01, subdivision 7, 
196.26  during the enrollment; 
196.27     (2) a forest management plan for the property land must be 
196.28  prepared by an approved plan writer and implemented during the 
196.29  period in which the land is enrolled; 
196.30     (3) timber harvesting and forest management guidelines must 
196.31  be used in conjunction with any timber harvesting or forest 
196.32  management activities conducted on the land during the period in 
196.33  which the land is enrolled; 
196.34     (4) the property land must be enrolled for a minimum of 
196.35  eight years; 
196.36     (5) there are no delinquent property taxes on the property 
197.1   land; and 
197.2      (6) claimants enrolling more than 1,920 acres in the 
197.3   sustainable forest incentive program must allow year-round, 
197.4   nonmotorized access to fish and wildlife resources on enrolled 
197.5   land except within one-fourth mile of a permanent dwelling or 
197.6   during periods of high fire hazard as determined by the 
197.7   commissioner of natural resources. 
197.8      (b) Claimants required to allow access under paragraph (a), 
197.9   clause (6), do not by that action: 
197.10     (1) extend any assurance that the land is safe for any 
197.11  purpose; 
197.12     (2) confer upon the person the legal status of an invitee 
197.13  or licensee to whom a duty of care is owed; or 
197.14     (3) assume responsibility for or incur liability for any 
197.15  injury to the person or property caused by an act or omission of 
197.16  the person. 
197.17     [EFFECTIVE DATE.] This section is effective the day 
197.18  following final enactment. 
197.19     Sec. 39.  Minnesota Statutes 2002, section 290C.07, is 
197.20  amended to read: 
197.21     290C.07 [CALCULATION OF INCENTIVE PAYMENT.] 
197.22     An approved claimant under the sustainable forest incentive 
197.23  program is eligible to receive an annual payment.  The payment 
197.24  shall equal the greater of: 
197.25     (1) the difference between the property tax that would be 
197.26  paid on the property land using the previous year's statewide 
197.27  average total township tax rate and the class rate for class 2b 
197.28  timberland under section 273.13, subdivision 23, paragraph (b), 
197.29  if the property land were valued at (i) the average statewide 
197.30  timberland market value per acre calculated under section 
197.31  290C.06, and (ii) the average statewide timberland current use 
197.32  value per acre calculated under section 290C.02, subdivision 5; 
197.33     (2) two-thirds of the property tax amount determined by 
197.34  using the previous year's statewide average total township tax 
197.35  rate, the estimated market value per acre as calculated in 
197.36  section 290C.06, and the class rate for 2b timberland under 
198.1   section 273.13, subdivision 23, paragraph (b); or 
198.2      (3) $1.50 per acre for each acre enrolled in the 
198.3   sustainable forest incentive program. 
198.4      [EFFECTIVE DATE.] This section is effective the day 
198.5   following final enactment. 
198.6      Sec. 40.  Minnesota Statutes 2002, section 290C.09, is 
198.7   amended to read: 
198.8      290C.09 [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 
198.9      The commissioner shall immediately remove any property land 
198.10  enrolled in the sustainable forest incentive program for which 
198.11  taxes are determined to be delinquent as provided in chapter 279 
198.12  and shall notify the claimant of such action.  Lands terminated 
198.13  from the sustainable forest incentive program under this section 
198.14  are not entitled to any payments provided in this chapter and 
198.15  are subject to removal penalties prescribed in section 290C.11.  
198.16  The claimant has 60 days from the receipt of notice from the 
198.17  commissioner under this section to pay the delinquent taxes.  If 
198.18  the delinquent taxes are paid within this 60-day period, the 
198.19  lands shall be reinstated in the program as if they had not been 
198.20  withdrawn and without the payment of a penalty. 
198.21     [EFFECTIVE DATE.] This section is effective the day 
198.22  following final enactment. 
198.23     Sec. 41.  Minnesota Statutes 2002, section 290C.10, is 
198.24  amended to read: 
198.25     290C.10 [WITHDRAWAL PROCEDURES.] 
198.26     An approved claimant under the sustainable forest incentive 
198.27  program for a minimum of four years may notify the commissioner 
198.28  of the intent to terminate enrollment.  Within 90 days of 
198.29  receipt of notice to terminate enrollment, the commissioner 
198.30  shall inform the claimant in writing, acknowledging receipt of 
198.31  this notice and indicating the effective date of termination 
198.32  from the sustainable forest incentive program.  Termination of 
198.33  enrollment in the sustainable forest incentive program occurs on 
198.34  January 1 of the fifth calendar year that begins after receipt 
198.35  by the commissioner of the termination notice.  After the 
198.36  commissioner issues an effective date of termination, a claimant 
199.1   wishing to continue the property's land's enrollment in the 
199.2   sustainable forest incentive program beyond the termination date 
199.3   must apply for enrollment as prescribed in section 290C.04.  A 
199.4   claimant who withdraws a parcel of land from this program may 
199.5   not reenroll the parcel for a period of three years.  Within 90 
199.6   days after the termination date, the commissioner shall execute 
199.7   and acknowledge a document releasing the land from the covenant 
199.8   required under this chapter.  The document must be mailed to the 
199.9   claimant and is entitled to be recorded.  The commissioner may 
199.10  allow early withdrawal from the Sustainable Forest Incentive Act 
199.11  without penalty in cases of condemnation for a public purpose 
199.12  notwithstanding the provisions of this section. 
199.13     [EFFECTIVE DATE.] This section is effective the day 
199.14  following final enactment. 
199.15     Sec. 42.  Minnesota Statutes 2002, section 290C.11, is 
199.16  amended to read: 
199.17     290C.11 [PENALTIES FOR REMOVAL.] 
199.18     (a) If the commissioner determines that property land 
199.19  enrolled in the sustainable forest incentive program is in 
199.20  violation of the conditions for enrollment as specified in 
199.21  section 290C.03, the commissioner shall notify the claimant of 
199.22  the intent to remove all enrolled land from the sustainable 
199.23  forest incentive program.  The claimant has 60 days to appeal 
199.24  this determination. The appeal must be made in writing to the 
199.25  commissioner, who shall, within 60 days, notify the claimant as 
199.26  to the outcome of the appeal.  Within 60 days after the 
199.27  commissioner denies an appeal, or within 120 days after the 
199.28  commissioner received a written appeal if the commissioner has 
199.29  not made a determination in that time, the owner may appeal to 
199.30  tax court under chapter 271 as if the appeal is from an order of 
199.31  the commissioner. 
199.32     (b) If the commissioner determines the property land is to 
199.33  be removed from the sustainable forest incentive program, the 
199.34  claimant is liable for payment to the commissioner in the amount 
199.35  equal to the payments received under this chapter for the 
199.36  previous four-year period, plus interest.  The claimant has 90 
200.1   days to satisfy the payment for removal of land from the 
200.2   sustainable forest incentive program under this section.  If the 
200.3   penalty is not paid within the 90-day period under this 
200.4   paragraph, the commissioner shall certify the amount to the 
200.5   county auditor for collection as a part of the general ad 
200.6   valorem real property taxes on the land in the following taxes 
200.7   payable year.  
200.8      [EFFECTIVE DATE.] This section is effective the day 
200.9   following final enactment. 
200.10     Sec. 43.  [290C.12] [DEATH OF CLAIMANT.] 
200.11     Within one year after the death of the claimant, the 
200.12  claimant's heir, devisee, or estate must either: 
200.13     (1) notify the commissioner of election to terminate 
200.14  enrollment in the sustainable forest incentive program; or 
200.15     (2) make an application under this chapter to continue 
200.16  enrollment of the land in the program.  
200.17     Upon notification under clause (1), the commissioner shall 
200.18  terminate the enrollment and issue a document releasing the land 
200.19  from the covenant as provided in section 290C.04, paragraph 
200.20  (c).  Penalties under section 290C.11 shall not apply.  If the 
200.21  application under clause (2) is approved, the land is enrolled 
200.22  in the program without a break.  If the commissioner does not 
200.23  receive notification within one year after the date of death, 
200.24  enrollment in the program shall be terminated and penalties 
200.25  under section 290C.11 shall not apply. 
200.26     [EFFECTIVE DATE.] This section is effective the day 
200.27  following final enactment, except in the case of claimants dying 
200.28  prior to the day following final enactment, heirs, devisees, or 
200.29  estates may make the election either six months after the 
200.30  effective date of this provision or one year after the death of 
200.31  the claimant, whichever is later. 
200.32     Sec. 44.  Minnesota Statutes 2002, section 469.1792, 
200.33  subdivision 3, is amended to read: 
200.34     Subd. 3.  [ACTIONS AUTHORIZED.] (a) An authority with a 
200.35  district qualifying under this section may take either or both 
200.36  of the following actions for any or all of its preexisting 
201.1   districts: 
201.2      (1) the authority may elect that the original local tax 
201.3   rate under section 469.177, subdivision 1a, does not apply to 
201.4   the district; and 
201.5      (2) the authority may elect the fiscal disparities 
201.6   contribution will be computed under section 469.177, subdivision 
201.7   3, paragraph (a), regardless of the election that was made for 
201.8   the district. 
201.9      (b) The authority may take action under this subdivision 
201.10  only after the municipality approves the action, by resolution, 
201.11  after notice and public hearing in the manner provided under 
201.12  section 469.175, subdivision 2.  To be effective for taxes 
201.13  payable in the following year, the resolution must be adopted 
201.14  and the county auditor must be notified of the adoption on or 
201.15  before July 1. 
201.16     [EFFECTIVE DATE.] This section is effective for taxes 
201.17  payable in 2004 and thereafter. 
201.18     Sec. 45.  Minnesota Statutes 2002, section 473F.07, 
201.19  subdivision 4, is amended to read: 
201.20     Subd. 4.  [DISTRIBUTION NET TAX CAPACITY.] The 
201.21  administrative auditor shall determine the proportion which the 
201.22  index of each municipality bears to the sum of the indices of 
201.23  all municipalities and shall then multiply this proportion in 
201.24  the case of each municipality, by the areawide net tax capacity, 
201.25  provided that if the distribution net tax capacity for a 
201.26  municipality is less than 95 percent of the municipality's 
201.27  previous year distribution net tax capacity, and more than ten 
201.28  percent of the municipality's fiscal capacity consists of 
201.29  manufactured home property, the municipality's distribution net 
201.30  tax capacity will be increased to 95 percent of the previous 
201.31  year net tax capacity and the distribution net tax capacity of 
201.32  other municipalities in the area will be proportionately reduced.
201.33     [EFFECTIVE DATE.] This section is effective for taxes 
201.34  payable in 2004 and subsequent years. 
201.35     Sec. 46.  Minnesota Statutes 2002, section 477A.011, 
201.36  subdivision 30, is amended to read: 
202.1      Subd. 30.  [PRE-1940 HOUSING PERCENTAGE.] "Pre-1940 housing 
202.2   percentage" for a city is 100 times the most recent 1990 federal 
202.3   census count of all housing units in the city built before 1940, 
202.4   divided by the total number of all housing units in the city.  
202.5   Housing units includes both occupied and vacant housing units as 
202.6   defined by the federal census. 
202.7      [EFFECTIVE DATE.] This section is effective for aids 
202.8   payable in 2003 and thereafter. 
202.9      Sec. 47.  Minnesota Statutes 2002, section 515B.1-116, is 
202.10  amended to read: 
202.11     515B.1-116 [RECORDING.] 
202.12     (a) A declaration, bylaws, any amendment to a declaration 
202.13  or bylaws, and any other instrument affecting a common interest 
202.14  community shall be entitled to be recorded.  In those counties 
202.15  which have a tract index, the county recorder shall enter the 
202.16  declaration in the tract index for each unit affected.  The 
202.17  registrar of titles shall file the declaration in accordance 
202.18  with section 508.351 or 508A.351. 
202.19     (b) The recording officer shall upon request promptly 
202.20  assign a number (CIC number) to a common interest community to 
202.21  be formed or to a common interest community resulting from the 
202.22  merger of two or more common interest communities. 
202.23     (c) Documents recorded pursuant to this chapter shall in 
202.24  the case of registered land be filed, and references to the 
202.25  recording of documents shall mean filed in the case of 
202.26  registered land. 
202.27     (d) Subject to any specific requirements of this chapter, 
202.28  if a recorded document relating to a common interest community 
202.29  purports to require a certain vote or signatures approving any 
202.30  restatement or amendment of the document by a certain number or 
202.31  percentage of unit owners or secured parties, and if the 
202.32  amendment or restatement is to be recorded pursuant to this 
202.33  chapter, an affidavit of the president or secretary of the 
202.34  association stating that the required vote or signatures have 
202.35  been obtained shall be attached to the document to be recorded 
202.36  and shall constitute prima facie evidence of the representations 
203.1   contained therein. 
203.2      (e) If a common interest community is located on registered 
203.3   land, the recording fee for any document affecting two or more 
203.4   units shall be the then-current fee for registering the document 
203.5   on the certificates of title for the first ten affected 
203.6   certificates and one-third of the then-current fee for each 
203.7   additional affected certificate.  This provision shall not apply 
203.8   to recording fees for deeds of conveyance, with the exception of 
203.9   deeds given pursuant to sections 515B.2-119 and 515B.3-112. 
203.10     (f) Except as permitted under this subsection, a recording 
203.11  officer shall not file or record a declaration creating a new 
203.12  common interest community, unless the county treasurer has 
203.13  certified that the property taxes payable in the current year 
203.14  for the real estate included in the proposed common interest 
203.15  community have been paid.  This certification is in addition to 
203.16  the certification for delinquent taxes required by section 
203.17  272.12.  In the case of preexisting common interest communities, 
203.18  the recording officer shall accept, file, and record the 
203.19  following instruments, without requiring a certification as to 
203.20  the current or delinquent taxes on any of the units in the 
203.21  common interest community:  (i) a declaration subjecting the 
203.22  common interest community to this chapter; (ii) a declaration 
203.23  changing the form of a common interest community pursuant to 
203.24  section 515B.2-123; or (iii) an amendment to or restatement of 
203.25  the declaration, bylaws, or CIC plat.  In order for the 
203.26  instruments an instrument to be accepted and recorded under the 
203.27  preceding sentence, the assessor must certify or otherwise 
203.28  inform the recording officer that, for taxes payable in the 
203.29  current year, the assessor has allocated taxable values to each 
203.30  unit or has separately assessed each unit instrument must not 
203.31  create or change unit or common area boundaries. 
203.32     [EFFECTIVE DATE.] This section is effective for deeds or 
203.33  instruments accepted for recording or registration on or after 
203.34  July 1, 2003. 
203.35     Sec. 48.  Laws 2001, First Special Session chapter 5, 
203.36  article 3, section 61, the effective date, is amended to read: 
204.1      [EFFECTIVE DATE.] This section is effective August 1, 2001, 
204.2   for deeds issued on or after August 1, 2001.  This section is 
204.3   effective August 1, 2006, for deeds issued before August 1, 2001.
204.4      Sec. 49.  Laws 2001, First Special Session chapter 5, 
204.5   article 3, section 63, the effective date, is amended to read: 
204.6      [EFFECTIVE DATE.] This section is effective August 1, 2001, 
204.7   for deeds issued on or after August 1, 2001.  This section is 
204.8   effective August 1, 2006, for deeds issued before August 1, 2001.
204.9      Sec. 50.  Laws 2002, chapter 377, article 6, section 4, the 
204.10  effective date, is amended to read: 
204.11     [EFFECTIVE DATE.] This section is effective for aids 
204.12  payable in 2004 May 16, 2002, and thereafter. 
204.13     Sec. 51.  [REPEALER.] 
204.14     (a) Minnesota Statutes 2002, section 274.04, is repealed. 
204.15     (b) Minnesota Statutes 2002, section 477A.065, is repealed 
204.16  effective for aid payable in 2004 and thereafter. 
204.17     (c) Minnesota Rules, parts 8106.0100, subparts 11, 15, and 
204.18  16; and 8106.0200, are repealed effective the day following 
204.19  final enactment. 
204.20                             ARTICLE 9 
204.21              DEPARTMENT SALES AND USE TAX INITIATIVES 
204.22     Section 1.  Minnesota Statutes 2002, section 289A.50, 
204.23  subdivision 2a, is amended to read: 
204.24     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] (a) If a 
204.25  vendor has collected from a purchaser a tax on a transaction 
204.26  that is not subject to the tax imposed by chapter 297A, the 
204.27  purchaser may apply directly to the commissioner for a refund 
204.28  under this section if: 
204.29     (a) (1) the purchaser is currently registered or was 
204.30  registered during the period of the claim, to collect and remit 
204.31  the sales tax or to remit the use tax; and 
204.32     (2) either 
204.33     (b) (i) the amount of the refund to be applied for exceeds 
204.34  $500, or 
204.35     (ii) the amount of the refund to be applied for does not 
204.36  exceed $500, but the purchaser also applies for a capital 
205.1   equipment claim at the same time, and the total of the two 
205.2   refunds exceeds $500. 
205.3      (b) The purchaser may not file more than two applications 
205.4   for refund under this subdivision in a calendar year. 
205.5      [EFFECTIVE DATE.] This section is effective for claims 
205.6   filed on or after the day following final enactment. 
205.7      Sec. 2.  Minnesota Statutes 2002, section 289A.60, is 
205.8   amended by adding a subdivision to read: 
205.9      Subd. 25.  [PENALTY FOR FAILURE TO PROPERLY COMPLETE SALES 
205.10  TAX RETURN.] A person who fails to report local sales tax on a 
205.11  sales tax return or who fails to report local sales tax on 
205.12  separate tax lines on the sales tax return is subject to a 
205.13  penalty of five percent of the amount of tax not properly 
205.14  reported on the return.  A person who files a consolidated tax 
205.15  return but fails to report location information is subject to a 
205.16  $500 penalty for each return not containing location 
205.17  information.  In addition, the commissioner may revoke the 
205.18  privilege for a taxpayer to file consolidated returns and may 
205.19  require the taxpayer to separately register each location and to 
205.20  file a tax return for each location. 
205.21     [EFFECTIVE DATE.] This section is effective for returns 
205.22  filed after June 30, 2003. 
205.23     Sec. 3.  Minnesota Statutes 2002, section 297A.61, 
205.24  subdivision 3, is amended to read: 
205.25     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
205.26  include, but are not limited to, each of the transactions listed 
205.27  in this subdivision. 
205.28     (b) Sale and purchase include: 
205.29     (1) any transfer of title or possession, or both, of 
205.30  tangible personal property, whether absolutely or conditionally, 
205.31  for a consideration in money or by exchange or barter; and 
205.32     (2) the leasing of or the granting of a license to use or 
205.33  consume, for a consideration in money or by exchange or barter, 
205.34  tangible personal property, other than a manufactured home used 
205.35  for residential purposes for a continuous period of 30 days or 
205.36  more. 
206.1      (c) Sale and purchase include the production, fabrication, 
206.2   printing, or processing of tangible personal property for a 
206.3   consideration for consumers who furnish either directly or 
206.4   indirectly the materials used in the production, fabrication, 
206.5   printing, or processing. 
206.6      (d) Sale and purchase include the preparing for a 
206.7   consideration of food.  Notwithstanding section 297A.67, 
206.8   subdivision 2, taxable food includes, but is not limited to, the 
206.9   following: 
206.10     (1) prepared food sold by the retailer; 
206.11     (2) soft drinks; 
206.12     (3) candy; and 
206.13     (4) all food sold through vending machines. 
206.14     (e) A sale and a purchase includes the furnishing for a 
206.15  consideration of electricity, gas, water, or steam for use or 
206.16  consumption within this state. 
206.17     (f) A sale and a purchase includes the transfer for a 
206.18  consideration of computer software.  
206.19     (g) A sale and a purchase includes the furnishing for a 
206.20  consideration of the following services: 
206.21     (1) the privilege of admission to places of amusement, 
206.22  recreational areas, or athletic events, and the making available 
206.23  of amusement devices, tanning facilities, reducing salons, steam 
206.24  baths, turkish baths, health clubs, and spas or athletic 
206.25  facilities; 
206.26     (2) lodging and related services by a hotel, rooming house, 
206.27  resort, campground, motel, or trailer camp and the granting of 
206.28  any similar license to use real property other than the renting 
206.29  or leasing of it for a continuous period of 30 days or more; 
206.30     (3) nonresidential parking services, whether on a 
206.31  contractual, hourly, or other periodic basis, except for parking 
206.32  at a meter; 
206.33     (4) the granting of membership in a club, association, or 
206.34  other organization if: 
206.35     (i) the club, association, or other organization makes 
206.36  available for the use of its members sports and athletic 
207.1   facilities, without regard to whether a separate charge is 
207.2   assessed for use of the facilities; and 
207.3      (ii) use of the sports and athletic facility is not made 
207.4   available to the general public on the same basis as it is made 
207.5   available to members.  
207.6   Granting of membership means both onetime initiation fees and 
207.7   periodic membership dues.  Sports and athletic facilities 
207.8   include golf courses; tennis, racquetball, handball, and squash 
207.9   courts; basketball and volleyball facilities; running tracks; 
207.10  exercise equipment; swimming pools; and other similar athletic 
207.11  or sports facilities; 
207.12     (5) delivery of aggregate materials and concrete block by a 
207.13  third party if the delivery would be subject to the sales tax if 
207.14  provided by the seller of the aggregate material or concrete 
207.15  block; and 
207.16     (6) services as provided in this clause: 
207.17     (i) laundry and dry cleaning services including cleaning, 
207.18  pressing, repairing, altering, and storing clothes, linen 
207.19  services and supply, cleaning and blocking hats, and carpet, 
207.20  drapery, upholstery, and industrial cleaning.  Laundry and dry 
207.21  cleaning services do not include services provided by coin 
207.22  operated facilities operated by the customer; 
207.23     (ii) motor vehicle washing, waxing, and cleaning services, 
207.24  including services provided by coin operated facilities operated 
207.25  by the customer, and rustproofing, undercoating, and towing of 
207.26  motor vehicles; 
207.27     (iii) building and residential cleaning, maintenance, and 
207.28  disinfecting and exterminating services; 
207.29     (iv) detective, security, burglar, fire alarm, and armored 
207.30  car services; but not including services performed within the 
207.31  jurisdiction they serve by off-duty licensed peace officers as 
207.32  defined in section 626.84, subdivision 1, or services provided 
207.33  by a nonprofit organization for monitoring and electronic 
207.34  surveillance of persons placed on in-home detention pursuant to 
207.35  court order or under the direction of the Minnesota department 
207.36  of corrections; 
208.1      (v) pet grooming services; 
208.2      (vi) lawn care, fertilizing, mowing, spraying and sprigging 
208.3   services; garden planting and maintenance; tree, bush, and shrub 
208.4   pruning, bracing, spraying, and surgery; indoor plant care; 
208.5   tree, bush, shrub, and stump removal; and tree trimming for 
208.6   public utility lines.  Services performed under a construction 
208.7   contract for the installation of shrubbery, plants, sod, trees, 
208.8   bushes, and similar items are not taxable; 
208.9      (vii) massages, except when provided by a licensed health 
208.10  care facility or professional or upon written referral from a 
208.11  licensed health care facility or professional for treatment of 
208.12  illness, injury, or disease; and 
208.13     (viii) the furnishing of lodging, board, and care services 
208.14  for animals in kennels and other similar arrangements, but 
208.15  excluding veterinary and horse boarding services. 
208.16     In applying the provisions of this chapter, the terms 
208.17  "tangible personal property" and "sales at retail" include 
208.18  taxable services listed in clause (6), items (i) to (vi) and 
208.19  (viii) and the provision of these taxable services, unless 
208.20  specifically provided otherwise.  Services performed by an 
208.21  employee for an employer are not taxable.  Services performed by 
208.22  a partnership or association for another partnership or 
208.23  association are not taxable if one of the entities owns or 
208.24  controls more than 80 percent of the voting power of the equity 
208.25  interest in the other entity.  Services performed between 
208.26  members of an affiliated group of corporations are not taxable.  
208.27  For purposes of this section the preceding sentence, "affiliated 
208.28  group of corporations" includes those entities that would be 
208.29  classified as members of an affiliated group under United States 
208.30  Code, title 26, section 1504, and that are eligible to file a 
208.31  consolidated tax return for federal income tax purposes. 
208.32     (h) A sale and a purchase includes the furnishing for a 
208.33  consideration of tangible personal property or taxable services 
208.34  by the United States or any of its agencies or 
208.35  instrumentalities, or the state of Minnesota, its agencies, 
208.36  instrumentalities, or political subdivisions. 
209.1      (i) A sale and a purchase includes the furnishing for a 
209.2   consideration of telecommunications services, including cable 
209.3   television services and direct satellite services.  
209.4   Telecommunications services are taxed to the extent allowed 
209.5   under federal law if those services: 
209.6      (1) either (i) originate and terminate in this state; or 
209.7   (ii) originate in this state and terminate outside the state and 
209.8   the service is charged to a telephone number telecommunications 
209.9   customer located in this state or to the account of any 
209.10  transmission instrument in this state; or (iii) originate 
209.11  outside this state and terminate in this state and the service 
209.12  is charged to a telephone number telecommunications customer 
209.13  located in this state or to the account of any transmission 
209.14  instrument in this state; or 
209.15     (2) are rendered by providing a private communications 
209.16  service for which the customer has one or more locations within 
209.17  Minnesota connected to the service and the service is charged to 
209.18  a telephone number telecommunications customer located in this 
209.19  state or to the account of any transmission instrument in this 
209.20  state. 
209.21     All charges for mobile telecommunications services, as 
209.22  defined in United States Code, title 4, section 124, are deemed 
209.23  to be provided by the customer's home service provider and 
209.24  sourced to the customer's place of primary use and are subject 
209.25  to tax based upon the customer's place of primary use in 
209.26  accordance with the Mobile Telecommunications Sourcing Act, 
209.27  United States Code, title 4, sections 116 to 126.  All other 
209.28  definitions and provisions of the Mobile Telecommunications 
209.29  Sourcing Act as provided in United States Code, title 4, are 
209.30  hereby adopted. 
209.31     (j) A sale and a purchase includes the furnishing for a 
209.32  consideration of installation if the installation charges would 
209.33  be subject to the sales tax if the installation were provided by 
209.34  the seller of the item being installed. 
209.35     [EFFECTIVE DATE.] This section is effective the day 
209.36  following final enactment. 
210.1      Sec. 4.  Minnesota Statutes 2002, section 297A.61, 
210.2   subdivision 12, is amended to read: 
210.3      Subd. 12.  [FARM MACHINERY.] (a) "Farm machinery" means new 
210.4   or used machinery, equipment, implements, accessories, and 
210.5   contrivances used directly and principally in the agricultural 
210.6   production for sale, but not including the processing, of 
210.7   livestock, dairy animals, dairy products, poultry and poultry 
210.8   products, fruits, vegetables, trees and shrubs, plants, forage, 
210.9   grains, and bees and apiary products.  
210.10     (b) Farm machinery includes including, but not limited to: 
210.11     (1) machinery for the preparation, seeding, or cultivation 
210.12  of soil for growing agricultural crops and sod, for the 
210.13  harvesting and threshing of agricultural products, or for the 
210.14  harvesting or mowing of sod; 
210.15     (2) barn cleaners, milking systems, grain dryers, feeding 
210.16  systems including stationary feed bunks, and similar 
210.17  installations, whether or not the equipment is installed by the 
210.18  seller and becomes part of the real property; and 
210.19     (3) irrigation equipment sold for exclusively agricultural 
210.20  use, including pumps, pipe fittings, valves, sprinklers, and 
210.21  other equipment necessary to the operation of an irrigation 
210.22  system when sold as part of an irrigation system, whether or not 
210.23  the equipment is installed by the seller and becomes part of the 
210.24  real property;. 
210.25     (4) logging equipment, including chain saws used for 
210.26  commercial logging; 
210.27     (5) fencing used for the containment of farmed cervidae, as 
210.28  defined in section 17.451, subdivision 2; 
210.29     (6) primary and backup generator units used to generate 
210.30  electricity for the purpose of operating farm machinery, as 
210.31  defined in this subdivision, or providing light or space heating 
210.32  necessary for the production of livestock, dairy animals, dairy 
210.33  products, or poultry and poultry products; 
210.34     (7) aquaculture production equipment as defined in 
210.35  subdivision 13; and 
210.36     (8) equipment used for maple syrup harvesting.  
211.1      (c) (b) Farm machinery does not include: 
211.2      (1) repair or replacement parts; 
211.3      (2) tools, shop equipment, grain bins, fencing material 
211.4   except fencing material covered by paragraph (b), clause (5), 
211.5   communication equipment, and other farm supplies; 
211.6      (3) motor vehicles taxed under chapter 297B; 
211.7      (4) snowmobiles or snow blowers; or 
211.8      (5) lawn mowers except those used in the production of sod 
211.9   for sale, or garden-type tractors or garden tillers; or 
211.10     (6) machinery, equipment, implements, accessories, and 
211.11  contrivances used directly in the production of horses not 
211.12  raised for slaughter, fur-bearing animals, or research animals. 
211.13     [EFFECTIVE DATE.] This section is effective for sales and 
211.14  purchases made after June 30, 2003. 
211.15     Sec. 5.  Minnesota Statutes 2002, section 297A.61, 
211.16  subdivision 34, is amended to read: 
211.17     Subd. 34.  [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 
211.18  through vending machines" means food dispensed from a machine or 
211.19  other mechanical device that accepts payment including honor 
211.20  payments. 
211.21     [EFFECTIVE DATE.] This section is effective for sales and 
211.22  purchases made on or after the day following final enactment. 
211.23     Sec. 6.  Minnesota Statutes 2002, section 297A.61, is 
211.24  amended by adding a subdivision to read: 
211.25     Subd. 35.  [AGRICULTURAL PRODUCTION.] "Agricultural 
211.26  production" includes, but is not limited to, horticulture, 
211.27  floriculture, maple syrup harvesting, and the raising of pets, 
211.28  livestock as defined in section 17A.03, subdivision 5, poultry, 
211.29  dairy and poultry products, bees and apiary products, the 
211.30  raising and harvesting of agricultural crops, sod, fur-bearing 
211.31  animals, research animals, and horses. 
211.32     [EFFECTIVE DATE.] This section is effective for sales and 
211.33  purchases made after June 30, 2003. 
211.34     Sec. 7.  Minnesota Statutes 2002, section 297A.665, is 
211.35  amended to read: 
211.36     297A.665 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 
212.1      (a) For the purpose of the proper administration of this 
212.2   chapter and to prevent evasion of the tax, until the contrary is 
212.3   established, it is presumed that:  
212.4      (1) all gross receipts are subject to the tax; and 
212.5      (2) all retail sales for delivery in Minnesota are for 
212.6   storage, use, or other consumption in Minnesota.  
212.7      (b) The burden of proving that a sale is not a taxable 
212.8   retail sale is on the seller.  However, the seller may take from 
212.9   the purchaser at the time of the sale an a fully completed 
212.10  exemption certificate claiming that the property purchased is 
212.11  for resale or that the sale is otherwise exempt from the tax 
212.12  imposed by this chapter which conclusively relieves the seller 
212.13  from collecting and remitting the tax.  This relief from 
212.14  liability does not apply to a seller who fraudulently fails to 
212.15  collect the tax or solicits purchasers to participate in the 
212.16  unlawful claim of an exemption.  If a seller claiming that 
212.17  certain sales are exempt, who does is not possess in possession 
212.18  of the required exemption certificates, must acquire the 
212.19  certificates within 60 days after receiving written notice from 
212.20  the commissioner that the certificates are required, deductions 
212.21  claimed by the seller that required delivery of the certificates 
212.22  must be disallowed.  If the certificates are not 
212.23  obtained delivered to the commissioner within the 60-day period, 
212.24  the sales are considered taxable sales under this 
212.25  chapter. commissioner may verify the reason or basis for the 
212.26  exemption claimed in the certificates before allowing any 
212.27  deductions.  A deduction must not be granted on the basis of 
212.28  certificates delivered to the commissioner after the 60-day 
212.29  period. 
212.30     (c) A purchaser of tangible personal property or any items 
212.31  listed in section 297A.63 that are shipped or brought to 
212.32  Minnesota by the purchaser has the burden of proving that the 
212.33  property was not purchased from a retailer for storage, use, or 
212.34  consumption in Minnesota.  
212.35     [EFFECTIVE DATE.] This section is effective for exemption 
212.36  certificates received for sales occurring after June 30, 2003. 
213.1      Sec. 8.  Minnesota Statutes 2002, section 297A.67, 
213.2   subdivision 2, is amended to read: 
213.3      Subd. 2.  [FOOD AND FOOD INGREDIENTS.] Food and food 
213.4   ingredients are exempt.  For purposes of this subdivision, 
213.5   "food" and "food ingredients" mean substances, whether in 
213.6   liquid, concentrated, solid, frozen, dried, or dehydrated form, 
213.7   that are sold for ingestion or chewing by humans and are 
213.8   consumed for their taste or nutritional value.  Food and food 
213.9   ingredients exempt under this subdivision do not include candy, 
213.10  soft drinks, food sold through vending machines, and prepared 
213.11  foods.  Food and food ingredients do not include alcoholic 
213.12  beverages, dietary supplements, and tobacco.  For purposes of 
213.13  this subdivision, "alcoholic beverages" means beverages that are 
213.14  suitable for human consumption and contain one-half of one 
213.15  percent or more of alcohol by volume.  For purposes of this 
213.16  subdivision, "tobacco" means cigarettes, cigars, chewing or pipe 
213.17  tobacco, or any other item that contains tobacco.  For purposes 
213.18  of this subdivision, "dietary supplements" means any product, 
213.19  other than tobacco, intended to supplement the diet that: 
213.20     (1) contains one or more of the following dietary 
213.21  ingredients: 
213.22     (i) a vitamin; 
213.23     (ii) a mineral; 
213.24     (iii) an herb or other botanical; 
213.25     (iv) an amino acid; 
213.26     (v) a dietary substance for use by humans to supplement the 
213.27  diet by increasing the total dietary intake; and 
213.28     (vi) a concentrate, metabolite, constituent, extract, or 
213.29  combination of any ingredient described in items (i) to (v); 
213.30     (2) is intended for ingestion in tablet, capsule, powder, 
213.31  softgel, gelcap, or liquid form, or if not intended for 
213.32  ingestion in such form, is not represented as conventional food 
213.33  and is not represented for use as a sole item of a meal or of 
213.34  the diet; and 
213.35     (3) is required to be labeled as a dietary supplement, 
213.36  identifiable by the supplement facts box found on the label and 
214.1   as required pursuant to Code of Federal Regulations, title 21, 
214.2   section 101.36. 
214.3      [EFFECTIVE DATE.] This section is effective the day 
214.4   following final enactment. 
214.5      Sec. 9.  Minnesota Statutes 2002, section 297A.68, 
214.6   subdivision 5, is amended to read: 
214.7      Subd. 5.  [CAPITAL EQUIPMENT.] (a) Capital equipment is 
214.8   exempt.  The tax must be imposed and collected as if the rate 
214.9   under section 297A.62, subdivision 1, applied, and then refunded 
214.10  in the manner provided in section 297A.75. 
214.11     "Capital equipment" means machinery and equipment purchased 
214.12  or leased, and used in this state by the purchaser or lessee 
214.13  primarily for manufacturing, fabricating, mining, or refining 
214.14  tangible personal property to be sold ultimately at retail if 
214.15  the machinery and equipment are essential to the integrated 
214.16  production process of manufacturing, fabricating, mining, or 
214.17  refining.  Capital equipment also includes machinery and 
214.18  equipment used to electronically transmit results retrieved by a 
214.19  customer of an online computerized data retrieval system. 
214.20     (b) Capital equipment includes, but is not limited to: 
214.21     (1) machinery and equipment used to operate, control, or 
214.22  regulate the production equipment; 
214.23     (2) machinery and equipment used for research and 
214.24  development, design, quality control, and testing activities; 
214.25     (3) environmental control devices that are used to maintain 
214.26  conditions such as temperature, humidity, light, or air pressure 
214.27  when those conditions are essential to and are part of the 
214.28  production process; 
214.29     (4) materials and supplies used to construct and install 
214.30  machinery or equipment; 
214.31     (5) repair and replacement parts, including accessories, 
214.32  whether purchased as spare parts, repair parts, or as upgrades 
214.33  or modifications to machinery or equipment; 
214.34     (6) materials used for foundations that support machinery 
214.35  or equipment; 
214.36     (7) materials used to construct and install special purpose 
215.1   buildings used in the production process; and 
215.2      (8) ready-mixed concrete trucks equipment in which the 
215.3   ready-mixed concrete is mixed as part of the delivery 
215.4   process regardless if mounted on a chassis and leases of 
215.5   ready-mixed concrete trucks. 
215.6      (c) Capital equipment does not include the following: 
215.7      (1) motor vehicles taxed under chapter 297B; 
215.8      (2) machinery or equipment used to receive or store raw 
215.9   materials; 
215.10     (3) building materials, except for materials included in 
215.11  paragraph (b), clauses (6) and (7); 
215.12     (4) machinery or equipment used for nonproduction purposes, 
215.13  including, but not limited to, the following:  plant security, 
215.14  fire prevention, first aid, and hospital stations; support 
215.15  operations or administration; pollution control; and plant 
215.16  cleaning, disposal of scrap and waste, plant communications, 
215.17  space heating, cooling, lighting, or safety; 
215.18     (5) farm machinery and aquaculture production equipment as 
215.19  defined by section 297A.61, subdivisions 12 and 13; 
215.20     (6) machinery or equipment purchased and installed by a 
215.21  contractor as part of an improvement to real property; or 
215.22     (7) any other item that is not essential to the integrated 
215.23  process of manufacturing, fabricating, mining, or refining. 
215.24     (d) For purposes of this subdivision: 
215.25     (1) "Equipment" means independent devices or tools separate 
215.26  from machinery but essential to an integrated production 
215.27  process, including computers and computer software, used in 
215.28  operating, controlling, or regulating machinery and equipment; 
215.29  and any subunit or assembly comprising a component of any 
215.30  machinery or accessory or attachment parts of machinery, such as 
215.31  tools, dies, jigs, patterns, and molds.  
215.32     (2) "Fabricating" means to make, build, create, produce, or 
215.33  assemble components or property to work in a new or different 
215.34  manner. 
215.35     (3) "Integrated production process" means a process or 
215.36  series of operations through which tangible personal property is 
216.1   manufactured, fabricated, mined, or refined.  For purposes of 
216.2   this clause, (i) manufacturing begins with the removal of raw 
216.3   materials from inventory and ends when the last process prior to 
216.4   loading for shipment has been completed; (ii) fabricating begins 
216.5   with the removal from storage or inventory of the property to be 
216.6   assembled, processed, altered, or modified and ends with the 
216.7   creation or production of the new or changed product; (iii) 
216.8   mining begins with the removal of overburden from the site of 
216.9   the ores, minerals, stone, peat deposit, or surface materials 
216.10  and ends when the last process before stockpiling is completed; 
216.11  and (iv) refining begins with the removal from inventory or 
216.12  storage of a natural resource and ends with the conversion of 
216.13  the item to its completed form. 
216.14     (4) "Machinery" means mechanical, electronic, or electrical 
216.15  devices, including computers and computer software, that are 
216.16  purchased or constructed to be used for the activities set forth 
216.17  in paragraph (a), beginning with the removal of raw materials 
216.18  from inventory through completion of the product, including 
216.19  packaging of the product. 
216.20     (4) (5) "Machinery and equipment used for pollution control"
216.21  means machinery and equipment used solely to eliminate, prevent, 
216.22  or reduce pollution resulting from an activity described in 
216.23  paragraph (a).  
216.24     (5) (6) "Manufacturing" means an operation or series of 
216.25  operations where raw materials are changed in form, composition, 
216.26  or condition by machinery and equipment and which results in the 
216.27  production of a new article of tangible personal property.  For 
216.28  purposes of this subdivision, "manufacturing" includes the 
216.29  generation of electricity or steam to be sold at retail. 
216.30     (6) (7) "Mining" means the extraction of minerals, ores, 
216.31  stone, or peat. 
216.32     (7) (8) "Online data retrieval system" means a system whose 
216.33  cumulation of information is equally available and accessible to 
216.34  all its customers. 
216.35     (8) (9) "Primarily" means machinery and equipment used 50 
216.36  percent or more of the time in an activity described in 
217.1   paragraph (a). 
217.2      (9) (10) "Refining" means the process of converting a 
217.3   natural resource to a an intermediate or finished product, 
217.4   including the treatment of water to be sold at retail. 
217.5      [EFFECTIVE DATE.] This section is effective for sales and 
217.6   purchases made after December 31, 2003. 
217.7      Sec. 10.  Minnesota Statutes 2002, section 297A.68, is 
217.8   amended by adding a subdivision to read: 
217.9      Subd. 39.  [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of 
217.10  tangible personal property or services is exempt from tax for a 
217.11  period of six months from the effective date of the law change 
217.12  that results in the imposition of the tax under this chapter if: 
217.13     (1) the act imposing the tax does not have transitional 
217.14  effective date language for existing construction contracts and 
217.15  construction bids; and 
217.16     (2) the requirements of paragraph (b) are met. 
217.17     (b) A sale is tax exempt under paragraph (a) if it meets 
217.18  the requirements of either clause (1) or (2): 
217.19     (1) For a construction contract: 
217.20     (i) the goods or services sold must be used for the 
217.21  performance of a bona fide written lump sum or fixed price 
217.22  construction contract; 
217.23     (ii) the contract must be entered into before the date the 
217.24  goods or services become subject to the sales tax; 
217.25     (iii) the contract must not provide for allocation of 
217.26  future taxes; and 
217.27     (iv) for each qualifying contract the contractor must give 
217.28  the seller documentation of the contract on which an exemption 
217.29  is to be claimed. 
217.30     (2) For a bid: 
217.31     (i) the goods or services sold must be used pursuant to an 
217.32  obligation of a bid or bids; 
217.33     (ii) the bid or bids must be submitted and accepted before 
217.34  the date the goods or services became subject to the sales tax; 
217.35     (iii) the bid or bids must not be able to be withdrawn, 
217.36  modified, or changed without forfeiting a bond; and 
218.1      (iv) for each qualifying bid, the contractor must give the 
218.2   seller documentation of the bid on which an exemption is to be 
218.3   claimed. 
218.4      [EFFECTIVE DATE.] This section is effective the day 
218.5   following final enactment. 
218.6      Sec. 11.  Minnesota Statutes 2002, section 297A.69, 
218.7   subdivision 2, is amended to read: 
218.8      Subd. 2.  [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 
218.9   (a) Materials stored, used, or consumed in agricultural 
218.10  production of personal property intended to be sold ultimately 
218.11  at retail are exempt, whether or not the item becomes an 
218.12  ingredient or constituent part of the property produced.  
218.13  Materials that qualify for this exemption include, but are not 
218.14  limited to, the following: 
218.15     (1) feeds, seeds, trees, fertilizers, and herbicides, 
218.16  including when purchased for use by farmers in a federal or 
218.17  state farm or conservation program; 
218.18     (2) materials sold to a veterinarian to be used or consumed 
218.19  in the care, medication, and treatment of agricultural 
218.20  production animals and horses; 
218.21     (3) chemicals, including chemicals used for cleaning food 
218.22  processing machinery and equipment; 
218.23     (4) materials, including chemicals, fuels, and electricity 
218.24  purchased by persons engaged in agricultural production to treat 
218.25  waste generated as a result of the production process; 
218.26     (5) fuels, electricity, gas, and steam used or consumed in 
218.27  the production process, except that electricity, gas, or steam 
218.28  used for space heating, cooling, or lighting is exempt if (i) it 
218.29  is in excess of the average climate control or lighting for the 
218.30  production area, and (ii) it is necessary to produce that 
218.31  particular product; 
218.32     (6) petroleum products and lubricants; 
218.33     (7) packaging materials, including returnable containers 
218.34  used in packaging food and beverage products; and 
218.35     (8) accessory tools and equipment that are separate 
218.36  detachable units with an ordinary useful life of less than 12 
219.1   months used in producing a direct effect upon the product. 
219.2   Machinery, equipment, implements, tools, accessories, 
219.3   appliances, contrivances, and furniture and fixtures, except 
219.4   those listed in this clause are not included within this 
219.5   exemption. 
219.6      (b) For purposes of this subdivision, "agricultural 
219.7   production" includes, but is not limited to, horticulture, 
219.8   floriculture, maple syrup harvesting, and the raising of pets, 
219.9   fur-bearing animals, research animals, horses, farmed cervidae 
219.10  as defined in section 17.451, subdivision 2, llamas as defined 
219.11  in section 17.455, subdivision 2, and ratitae as defined in 
219.12  section 17.453, subdivision 3. 
219.13     [EFFECTIVE DATE.] This section is effective for sales and 
219.14  purchases made after December 31, 2003. 
219.15     Sec. 12.  Minnesota Statutes 2002, section 297A.69, 
219.16  subdivision 3, is amended to read: 
219.17     Subd. 3.  [FARM MACHINERY REPAIR AND REPLACEMENT PARTS.] 
219.18  Repair and replacement parts, except tires, used for maintenance 
219.19  or repair of farm machinery, logging equipment, and aquaculture 
219.20  production equipment are exempt, if the part replaces a farm 
219.21  machinery part assigned a specific or generic part number by the 
219.22  manufacturer of the farm machinery.  
219.23     [EFFECTIVE DATE.] This section is effective for sales and 
219.24  purchases made after June 30, 2003. 
219.25     Sec. 13.  Minnesota Statutes 2002, section 297A.69, 
219.26  subdivision 4, is amended to read: 
219.27     Subd. 4.  [FARM MACHINERY, EQUIPMENT, AND FENCING.] The 
219.28  following machinery, equipment, and fencing is exempt: 
219.29     (1) farm machinery is exempt.; 
219.30     (2) logging equipment, including chain saws used for 
219.31  commercial logging; 
219.32     (3) fencing used for the containment of farmed cervidae, as 
219.33  defined in section 17.451, subdivision 2; 
219.34     (4) primary and backup generator units used to generate 
219.35  electricity for the purpose of operating farm machinery, 
219.36  aquacultural production equipment, or logging equipment, or 
220.1   providing light or space heating necessary for the production of 
220.2   livestock, dairy animals, dairy products, or poultry and poultry 
220.3   products; and 
220.4      (5) aquaculture production equipment.  
220.5      [EFFECTIVE DATE.] This section is effective for sales and 
220.6   purchases made after June 30, 2003. 
220.7      Sec. 14.  Minnesota Statutes 2002, section 297B.025, 
220.8   subdivision 1, is amended to read: 
220.9      Subdivision 1.  [NONCOLLECTOR VEHICLE.] Purchase or use of 
220.10  a passenger automobile as defined in section 168.011, 
220.11  subdivision 7, shall be taxed pursuant to section 297B.02, 
220.12  subdivision 2, if the passenger automobile is (1) is in the 
220.13  tenth or subsequent year of vehicle life, and (2) is not an 
220.14  above-market automobile as designated by the registrar of motor 
220.15  vehicles does not have a resale value of $3,000 or more, as 
220.16  determined using nationally recognized sources of information on 
220.17  automobile resale values, as designated by the registrar of 
220.18  motor vehicles. 
220.19     The registrar of motor vehicles shall prepare, and 
220.20  distribute to all deputy motor vehicle registrars by July 15, 
220.21  1985, a listing by make, model, and year of above-market 
220.22  automobiles.  Except as provided by subdivision 2, the registrar 
220.23  must include in the list all automobiles with a resale value of 
220.24  $3,000 or more, as determined using nationally recognized 
220.25  sources of information on automobile resale values.  The 
220.26  registrar shall revise the list by February 1 of each year.  The 
220.27  initial list and all subsequent revisions must include only 
220.28  those automobiles which are in the tenth or subsequent year of 
220.29  vehicle life.  
220.30     [EFFECTIVE DATE.] This section is effective for vehicles 
220.31  purchased after June 30, 2003. 
220.32     Sec. 15.  Minnesota Statutes 2002, section 297B.025, 
220.33  subdivision 2, is amended to read: 
220.34     Subd. 2.  [COLLECTOR VEHICLE.] A passenger automobile that 
220.35  is registered under section 168.10, subdivision 1a, 1b, 1c, 1d, 
220.36  or 1h, or a fire truck registered under section 168.10, 
221.1   subdivision 1c, shall be taxed under section 297B.02, 
221.2   subdivision 3, and the registrar shall not designate as an 
221.3   above-market automobile a passenger automobile or a fire truck 
221.4   registered under those subdivisions.  If the vehicle is 
221.5   subsequently registered in another class not under section 
221.6   168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of 
221.7   the date of registration under those subdivisions, it shall be 
221.8   subject to the full excise tax imposed under subdivision 1. 
221.9      [EFFECTIVE DATE.] This section is effective for vehicles 
221.10  purchased after December 31, 2003. 
221.11     Sec. 16.  Minnesota Statutes 2002, section 297B.035, 
221.12  subdivision 1, is amended to read: 
221.13     Subdivision 1.  [ORDINARY COURSE OF BUSINESS.] Except as 
221.14  provided in this section, motor vehicles purchased for resale in 
221.15  the ordinary course of business or used by any motor vehicle 
221.16  dealer, as defined in section 168.011, subdivision 21, who is 
221.17  licensed under section 168.27, subdivision 2 or 3, which bear 
221.18  dealer plates as authorized by section 168.27, subdivision 16, 
221.19  shall be exempt from the provisions of this chapter. 
221.20     [EFFECTIVE DATE.] This section is effective the day 
221.21  following final enactment. 
221.22     Sec. 17.  [REPEALER.] 
221.23     (a) Minnesota Statutes 2002, section 297A.72, subdivision 
221.24  1, is repealed effective for exemption certificates received for 
221.25  sales occurring after June 30, 2003. 
221.26     (b) Minnesota Statutes 2002, section 297A.97, is repealed 
221.27  effective for sales and purchases occurring after December 31, 
221.28  2003. 
221.29     (c) Minnesota Rules, parts 8130.0800, subparts 5 and 12; 
221.30  8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3 and 4; 
221.31  8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; and 
221.32  8130.8300, are repealed effective the day following final 
221.33  enactment. 
221.34                             ARTICLE 10 
221.35                DEPARTMENT SPECIAL TAXES INITIATIVES 
221.36     Section 1.  Minnesota Statutes 2002, section 115B.24, 
222.1   subdivision 8, is amended to read: 
222.2      Subd. 8.  [PENALTIES; ENFORCEMENT.] The audit, penalty and 
222.3   enforcement provisions applicable to corporate franchise taxes 
222.4   imposed under chapter 290 apply to the taxes imposed under 
222.5   section 115B.22 and those provisions shall be administered by 
222.6   the commissioner.  
222.7      [EFFECTIVE DATE.] This section is effective the day 
222.8   following final enactment. 
222.9      Sec. 2.  Minnesota Statutes 2002, section 295.50, 
222.10  subdivision 9b, is amended to read: 
222.11     Subd. 9b.  [PATIENT SERVICES.] (a) "Patient services" means 
222.12  inpatient and outpatient services and other goods and services 
222.13  provided by hospitals, surgical centers, or health care 
222.14  providers.  They include the following health care goods and 
222.15  services provided to a patient or consumer: 
222.16     (1) bed and board; 
222.17     (2) nursing services and other related services; 
222.18     (3) use of hospitals, surgical centers, or health care 
222.19  provider facilities; 
222.20     (4) medical social services; 
222.21     (5) drugs, biologicals, supplies, appliances, and 
222.22  equipment; 
222.23     (6) other diagnostic or therapeutic items or services; 
222.24     (7) medical or surgical services; 
222.25     (8) items and services furnished to ambulatory patients not 
222.26  requiring emergency care; 
222.27     (9) emergency services; and 
222.28     (10) covered services listed in section 256B.0625 and in 
222.29  Minnesota Rules, parts 9505.0170 to 9505.0475. 
222.30     (b) "Patient services" does not include:  
222.31     (1) services provided to nursing homes licensed under 
222.32  chapter 144A; and 
222.33     (2) examinations for purposes of utilization reviews, 
222.34  insurance claims or eligibility, litigation, and employment, 
222.35  including reviews of medical records for those purposes; 
222.36     (3) services provided by community residential mental 
223.1   health facilities licensed under Minnesota Rules, parts 
223.2   9520.0500 to 9520.0690; 
223.3      (4) services provided by community support programs and 
223.4   family community support programs approved under Minnesota 
223.5   Rules, parts 9535.1700 to 9535.1760; 
223.6      (5) services provided by community mental health centers as 
223.7   defined in section 245.62, subdivision 2; 
223.8      (6) services provided by assisted living programs and 
223.9   congregate housing programs; and 
223.10     (7) hospice care services. 
223.11     [EFFECTIVE DATE.] This section is effective for gross 
223.12  revenues received after December 31, 2002. 
223.13     Sec. 3.  Minnesota Statutes 2002, section 295.53, 
223.14  subdivision 1, is amended to read: 
223.15     Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
223.16  are excluded from the gross revenues subject to the hospital, 
223.17  surgical center, or health care provider taxes under sections 
223.18  295.50 to 295.57 295.59: 
223.19     (1) payments received for services provided under the 
223.20  Medicare program, including payments received from the 
223.21  government, and organizations governed by sections 1833 and 1876 
223.22  of title XVIII of the federal Social Security Act, United States 
223.23  Code, title 42, section 1395, and enrollee deductibles, 
223.24  coinsurance, and copayments, whether paid by the Medicare 
223.25  enrollee or by a Medicare supplemental coverage as defined in 
223.26  section 62A.011, subdivision 3, clause (10).  Payments for 
223.27  services not covered by Medicare are taxable; 
223.28     (2) medical assistance payments including payments received 
223.29  directly from the government or from a prepaid plan; 
223.30     (3) payments received for home health care services; 
223.31     (4) payments received from hospitals or surgical centers 
223.32  for goods and services on which liability for tax is imposed 
223.33  under section 295.52 or the source of funds for the payment is 
223.34  exempt under clause (1), (2), (7), (8), (10), (13), 
223.35  or (20) (17); 
223.36     (5) payments received from health care providers for goods 
224.1   and services on which liability for tax is imposed under this 
224.2   chapter or the source of funds for the payment is exempt under 
224.3   clause (1), (2), (7), (8), (10), (13), or (20) (17); 
224.4      (6) amounts paid for legend drugs, other than nutritional 
224.5   products, to a wholesale drug distributor who is subject to tax 
224.6   under section 295.52, subdivision 3, reduced by reimbursements 
224.7   received for legend drugs otherwise exempt under this chapter; 
224.8      (7) payments received under the general assistance medical 
224.9   care program including payments received directly from the 
224.10  government or from a prepaid plan; 
224.11     (8) payments received for providing services under the 
224.12  MinnesotaCare program including payments received directly from 
224.13  the government or from a prepaid plan and enrollee deductibles, 
224.14  coinsurance, and copayments.  For purposes of this clause, 
224.15  coinsurance means the portion of payment that the enrollee is 
224.16  required to pay for the covered service; 
224.17     (9) payments received by a health care provider or the 
224.18  wholly owned subsidiary of a health care provider for care 
224.19  provided outside Minnesota; 
224.20     (10) payments received from the chemical dependency fund 
224.21  under chapter 254B; 
224.22     (11) payments received in the nature of charitable 
224.23  donations that are not designated for providing patient services 
224.24  to a specific individual or group; 
224.25     (12) payments received for providing patient services 
224.26  incurred through a formal program of health care research 
224.27  conducted in conformity with federal regulations governing 
224.28  research on human subjects.  Payments received from patients or 
224.29  from other persons paying on behalf of the patients are subject 
224.30  to tax; 
224.31     (13) payments received from any governmental agency for 
224.32  services benefiting the public, not including payments made by 
224.33  the government in its capacity as an employer or insurer; 
224.34     (14) payments received for services provided by community 
224.35  residential mental health facilities licensed under Minnesota 
224.36  Rules, parts 9520.0500 to 9520.0690, community support programs 
225.1   and family community support programs approved under Minnesota 
225.2   Rules, parts 9535.1700 to 9535.1760, and community mental health 
225.3   centers as defined in section 245.62, subdivision 2; 
225.4      (15) (14) government payments received by a regional 
225.5   treatment center; 
225.6      (16) payments received for hospice care services; 
225.7      (17) (15) payments received by a health care provider for 
225.8   hearing aids and related equipment or prescription eyewear 
225.9   delivered outside of Minnesota; 
225.10     (18) (16) payments received by an educational institution 
225.11  from student tuition, student activity fees, health care service 
225.12  fees, government appropriations, donations, or grants.  Fee for 
225.13  service payments and payments for extended coverage are taxable; 
225.14  and 
225.15     (19) payments received for services provided by:  assisted 
225.16  living programs and congregate housing programs; and 
225.17     (20) (17) payments received under the federal Employees 
225.18  Health Benefits Act, United States Code, title 5, section 
225.19  8909(f), as amended by the Omnibus Reconciliation Act of 1990. 
225.20     (b) Payments received by wholesale drug distributors for 
225.21  legend drugs sold directly to veterinarians or veterinary bulk 
225.22  purchasing organizations are excluded from the gross revenues 
225.23  subject to the wholesale drug distributor tax under sections 
225.24  295.50 to 295.59. 
225.25     [EFFECTIVE DATE.] This section is effective for gross 
225.26  revenues received after December 31, 2002. 
225.27     Sec. 4.  Minnesota Statutes 2002, section 297F.01, 
225.28  subdivision 21a, is amended to read: 
225.29     Subd. 21a.  [UNLICENSED SELLER.] "Unlicensed seller" means 
225.30  anyone who is not licensed under section 297F.03 or 461.12 to 
225.31  sell the particular product to the purchaser or possessor of the 
225.32  product. 
225.33     [EFFECTIVE DATE.] This section is effective July 1, 2003. 
225.34     Sec. 5.  Minnesota Statutes 2002, section 297F.01, 
225.35  subdivision 23, is amended to read: 
225.36     Subd. 23.  [WHOLESALE SALES PRICE.] "Wholesale sales price" 
226.1   means the established price stated on the price list in effect 
226.2   at the time of sale for which a manufacturer or person sells a 
226.3   tobacco product to a distributor, exclusive of any discount, 
226.4   promotional offer, or other reduction.  For purposes of this 
226.5   subdivision, "price list" means the manufacturer's price at 
226.6   which tobacco products are made available for sale to all 
226.7   distributors on an ongoing basis. 
226.8      [EFFECTIVE DATE.] This section is effective July 1, 2003. 
226.9      Sec. 6.  Minnesota Statutes 2002, section 297F.06, 
226.10  subdivision 4, is amended to read: 
226.11     Subd. 4.  [TOBACCO PRODUCTS USE TAX.] The tobacco products 
226.12  use tax does not apply to the possession, use, or storage of 
226.13  tobacco products in quantities of: that have an aggregate cost 
226.14  in any calendar month to the consumer of $100 or less. 
226.15     (1) not more than 50 cigars; 
226.16     (2) not more than ten ounces snuff or snuff powder; 
226.17     (3) not more than one pound smoking or chewing tobacco or 
226.18  any other tobacco product in the possession of any one consumer. 
226.19     [EFFECTIVE DATE.] This section is effective July 1, 2003. 
226.20     Sec. 7.  Minnesota Statutes 2002, section 297F.20, 
226.21  subdivision 1, is amended to read: 
226.22     Subdivision 1.  [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 
226.23  A person or consumer required to file a return, report, or other 
226.24  document with the commissioner who fails to do so is guilty of a 
226.25  misdemeanor. 
226.26     (b) A person or consumer required to pay or to collect and 
226.27  remit a tax under this chapter, who fails to do so when 
226.28  required, is guilty of a misdemeanor. 
226.29     [EFFECTIVE DATE.] This section is effective for acts 
226.30  committed on or after July 1, 2003. 
226.31     Sec. 8.  Minnesota Statutes 2002, section 297F.20, 
226.32  subdivision 2, is amended to read: 
226.33     Subd. 2.  [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY.] 
226.34  (a) A person or consumer required to file a return, report, or 
226.35  other document with the commissioner, who knowingly, rather than 
226.36  accidentally, inadvertently, or negligently, fails to file it 
227.1   when required, is guilty of a gross misdemeanor.  
227.2      (b) A person or consumer required to pay or to collect and 
227.3   remit a tax under this chapter, who knowingly, rather than 
227.4   accidentally, inadvertently, or negligently, fails to file it 
227.5   when required, is guilty of a gross misdemeanor. 
227.6      [EFFECTIVE DATE.] This section is effective for acts 
227.7   committed on or after July 1, 2003. 
227.8      Sec. 9.  Minnesota Statutes 2002, section 297F.20, 
227.9   subdivision 3, is amended to read: 
227.10     Subd. 3.  [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 
227.11  person or consumer who files with the commissioner a return, 
227.12  report, or other document, or who maintains or provides invoices 
227.13  subject to review by the commissioner under this chapter, known 
227.14  by the person or consumer to be fraudulent or false concerning a 
227.15  material matter, is guilty of a felony. 
227.16     (b) A person or consumer who knowingly aids or assists in, 
227.17  or advises in the preparation or presentation of a return, 
227.18  report, invoice, or other document that is fraudulent or false 
227.19  concerning a material matter, whether or not the falsity or 
227.20  fraud is committed with the knowledge or consent of the 
227.21  person or consumer authorized or required to present the return, 
227.22  report, invoice, or other document, is guilty of a felony. 
227.23     [EFFECTIVE DATE.] This section is effective for acts 
227.24  committed on or after July 1, 2003. 
227.25     Sec. 10.  Minnesota Statutes 2002, section 297F.20, 
227.26  subdivision 6, is amended to read: 
227.27     Subd. 6.  [UNSTAMPED CIGARETTES; UNTAXED TOBACCO PRODUCTS.] 
227.28  (a) A person, other than a licensed distributor or a consumer, 
227.29  who possesses, receives, or transports more than 200 but fewer 
227.30  than 5,000 unstamped cigarettes, or up to $100 $350 worth of 
227.31  untaxed tobacco products is guilty of a misdemeanor. 
227.32     (b) A person, other than a licensed distributor or a 
227.33  consumer, who possesses, receives, or transports 5,000 or more, 
227.34  but fewer than 20,001 unstamped cigarettes, or up to $500 more 
227.35  than $350 but less than $1,400 worth of untaxed tobacco products 
227.36  is guilty of a gross misdemeanor. 
228.1      (c) A person, other than a licensed distributor or a 
228.2   consumer, who possesses, receives, or transports more than 
228.3   20,000 unstamped cigarettes, or $500 $1,400 or more worth of 
228.4   untaxed tobacco products is guilty of a felony. 
228.5      (d) For purposes of this subdivision, an individual in 
228.6   possession of more than 4,999 unstamped cigarettes, or more than 
228.7   $350 worth of untaxed tobacco products, is presumed not to be a 
228.8   consumer. 
228.9      [EFFECTIVE DATE.] This section is effective for acts 
228.10  committed on or after July 1, 2003. 
228.11     Sec. 11.  Minnesota Statutes 2002, section 297F.20, 
228.12  subdivision 9, is amended to read: 
228.13     Subd. 9.  [PURCHASES FROM UNLICENSED SELLERS.] (a) No 
228.14  retailer or subjobber shall purchase cigarettes or tobacco 
228.15  products from any person who is not licensed under section 
228.16  297F.03 as a licensed distributor or subjobber. 
228.17     (b) A retailer, or subjobber, or consumer who purchases 
228.18  from an unlicensed seller more than 200 but fewer than 5,000 
228.19  cigarettes or up to $100 $350 worth of tobacco products is 
228.20  guilty of a misdemeanor. 
228.21     (b) (c) A retailer, or subjobber, or consumer who 
228.22  purchases from an unlicensed seller 5,000 or more, but fewer 
228.23  than 20,001 cigarettes or up to $500 more than $350 but less 
228.24  than $1,400 worth of untaxed tobacco products is guilty of a 
228.25  gross misdemeanor. 
228.26     (c) (d) A retailer, or subjobber, or consumer who 
228.27  purchases from an unlicensed seller more than 20,000 cigarettes 
228.28  or $500 $1,400 or more worth of tobacco products is guilty of a 
228.29  felony. 
228.30     [EFFECTIVE DATE.] This section is effective for acts 
228.31  committed on or after July 1, 2003. 
228.32     Sec. 12.  Minnesota Statutes 2002, section 297I.01, 
228.33  subdivision 9, is amended to read: 
228.34     Subd. 9.  [GROSS PREMIUMS.] "Gross premiums" means total 
228.35  premiums paid by policyholders and applicants of policies, 
228.36  whether received in the form of money or other valuable 
229.1   consideration, on property, persons, lives, interests and other 
229.2   risks located, resident, or to be performed in this state, but 
229.3   excluding consideration and premiums for reinsurance assumed 
229.4   from other insurance companies.  The term "gross premiums" 
229.5   includes the total consideration paid to bail bond agents for 
229.6   bail bonds.  For title insurance companies, "gross premiums" 
229.7   means the charge for title insurance made by a title insurance 
229.8   company or its agents according to the company's rate filing 
229.9   approved by the commissioner of commerce without a deduction for 
229.10  commissions paid to or retained by the agent.  Gross premiums of 
229.11  a title insurance company does not include any other charge or 
229.12  fee for abstracting, searching, or examining the title, or 
229.13  escrow, closing, or other related services.  The term "gross 
229.14  premiums" includes any workers' compensation special 
229.15  compensation fund premium surcharge pursuant to section 176.129. 
229.16     [EFFECTIVE DATE.] This section is effective the day 
229.17  following final enactment. 
229.18     Sec. 13.  Minnesota Statutes 2002, section 297I.20, is 
229.19  amended to read: 
229.20     297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSET OFFSETS 
229.21  AGAINST PREMIUM TAXES.] 
229.22     Subdivision 1.  [GUARANTY ASSOCIATION ASSESSMENT OFFSETS.] 
229.23  (a) An insurance company may offset against its premium tax 
229.24  liability to this state any amount paid for assessments made for 
229.25  insolvencies which occur after July 31, 1994, under sections 
229.26  60C.01 to 60C.22; and any amount paid for assessments made after 
229.27  July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 
229.28  61B.16, or under sections 61B.18 to 61B.32 as follows: 
229.29     (1) Each such assessment shall give rise to an amount of 
229.30  offset equal to 20 percent of the amount of the assessment for 
229.31  each of the five calendar years following the year in which the 
229.32  assessment was paid. 
229.33     (2) The amount of offset initially determined for each 
229.34  taxable year is the sum of the amounts determined under clause 
229.35  (1) for that taxable year. 
229.36     (b)(1) Each year the commissioner shall compare total 
230.1   guaranty association assessments levied over the preceding five 
230.2   calendar years to the sum of all premium tax and corporate 
230.3   franchise tax revenues collected from insurance companies, 
230.4   without reduction for any guaranty association assessment offset 
230.5   in the preceding calendar year, referred to in this subdivision 
230.6   as "preceding year insurance tax revenues." 
230.7      (2) If total guaranty association assessments levied over 
230.8   the preceding five years exceed the preceding year insurance tax 
230.9   revenues, insurance companies must be allowed only a 
230.10  proportionate part of the premium tax offset calculated under 
230.11  paragraph (a) for the current calendar year. 
230.12     (3) The proportionate part of the premium tax offset 
230.13  allowed in the current calendar year is determined by 
230.14  multiplying the amount calculated under paragraph (a) by a 
230.15  fraction.  The numerator of the fraction equals the preceding 
230.16  year insurance tax revenues, and its denominator equals total 
230.17  guaranty association assessments levied over the preceding 
230.18  five-year period. 
230.19     (4) The proportionate part of the premium tax offset that 
230.20  is not allowed must be carried forward to subsequent tax years 
230.21  and added to the amount of premium tax offset calculated under 
230.22  paragraph (a) prior to application of the limitation imposed by 
230.23  this paragraph. 
230.24     (5) Any amount carried forward from prior years must be 
230.25  allowed before allowance of the offset for the current year 
230.26  calculated under paragraph (a). 
230.27     (6) The premium tax offset limitation must be calculated 
230.28  separately for (i) insurance companies subject to assessment 
230.29  under sections 60C.01 to 60C.22, and (ii) insurance companies 
230.30  subject to assessment under Minnesota Statutes 1992, sections 
230.31  61B.01 to 61B.16, or 61B.18 to 61B.32. 
230.32     (7) When the premium tax offset is limited by this 
230.33  provision, the commissioner shall notify affected insurance 
230.34  companies on a timely basis for purposes of completing premium 
230.35  and corporate franchise tax returns.  
230.36     (8) The guaranty associations created under sections 60C.01 
231.1   to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 
231.2   and 61B.18 to 61B.32, shall provide the commissioner with the 
231.3   necessary information on guaranty association assessments. 
231.4      (c)(1) If the offset determined by the application of 
231.5   paragraphs (a) and (b) exceeds the insurance company's premium 
231.6   tax liability under this section prior to allowance of the 
231.7   credit for premium taxes, then the insurance company may carry 
231.8   forward the excess, referred to in this subdivision as the 
231.9   "carryforward credit" to subsequent taxable years. 
231.10     (2) The carryforward credit is allowed as an offset against 
231.11  premium tax liability for the first succeeding year to the 
231.12  extent that the premium tax liability for that year exceeds the 
231.13  amount of the allowable offset for the year determined under 
231.14  paragraphs (a) and (b). 
231.15     (3) The carryforward credit must be reduced, but not below 
231.16  zero, by the amount of the carryforward credit allowed as an 
231.17  offset against the premium tax under this paragraph.  The 
231.18  remainder, if any, of the carryforward credit must be carried 
231.19  forward to succeeding taxable years until the entire 
231.20  carryforward credit has been credited against the insurance 
231.21  company's liability for premium tax under this chapter if 
231.22  applicable for that taxable year. 
231.23     (d) When an insurer has offset against taxes its payment of 
231.24  an assessment of the Minnesota life and health guaranty 
231.25  association, and the association pays the insurer a refund with 
231.26  respect to the assessment under Minnesota Statutes 1992, section 
231.27  61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 
231.28  reduces the insurer's carryforward credit under paragraph (c).  
231.29  If the refund exceeds the amount of the carryforward credit, the 
231.30  excess amount must be repaid to the state by the insurers to the 
231.31  extent of the offset in the manner the commissioner requires. 
231.32     Subd. 2.  [JOINT UNDERWRITING ASSOCIATION OFFSET.] An 
231.33  assessment made pursuant to section 62I.06, subdivision 6, shall 
231.34  be deductible by the member from past or future premium taxes 
231.35  due the state. 
231.36     [EFFECTIVE DATE.] This section is effective the day 
232.1   following final enactment. 
232.2      Sec. 14.  [REVISOR'S INSTRUCTION.] 
232.3      In the next edition of Minnesota Rules, the revisor shall 
232.4   delete any references to the sections repealed in section 15, 
232.5   paragraph (a). 
232.6      Sec. 15.  [REPEALER.] 
232.7      (a) Minnesota Statutes 2002, sections 294.01; 294.02; 
232.8   294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; 
232.9   and 294.12, are repealed effective the day following final 
232.10  enactment. 
232.11     (b) Minnesota Rules, parts 8125.1000; 8125.1300, subpart 1; 
232.12  and 8125.1400, are repealed effective the day following final 
232.13  enactment. 
232.14                             ARTICLE 11 
232.15         DEPARTMENT COLLECTIONS AND COMPLIANCE INITIATIVES 
232.16     Section 1.  [270.278] [PENALTY FOR FILING CERTAIN DOCUMENTS 
232.17  AGAINST DEPARTMENT OF REVENUE EMPLOYEES.] 
232.18     Subdivision 1.  [DEFINITIONS.] (a) "Recording office" means 
232.19  a county recorder, registrar of titles, or secretary of state in 
232.20  this state or another state. 
232.21     (b) "Filing party" means the person or persons requesting 
232.22  or causing another person to request that the recording office 
232.23  accept documents or instruments for recording or filing. 
232.24     Subd. 2.  [INVALID DOCUMENTS NAMING THE COMMISSIONER OR 
232.25  DEPARTMENT OF REVENUE EMPLOYEES.] Filing a document, including a 
232.26  nonconsensual common law lien under section 514.99, that 
232.27  purports to create a claim against the commissioner of revenue 
232.28  or an employee of the department of revenue based on performance 
232.29  or nonperformance of duties by the commissioner or employee is 
232.30  invalid unless accompanied by a specific order from a court of 
232.31  competent jurisdiction authorizing the filing of the document or 
232.32  unless a specific statute authorizes the filing of the document. 
232.33     Subd. 3.  [CIVIL PENALTY.] If a filing party causes a 
232.34  document described in subdivision 2 to be recorded in a 
232.35  recording office, the commissioner may assess a penalty against 
232.36  the filing party of $1,000 per document filed, payable to the 
233.1   general fund.  An order assessing a penalty under this section 
233.2   is reviewable administratively under section 289A.65 and is 
233.3   appealable to tax court under chapter 271.  The penalty is 
233.4   collected and paid in the same manner as income tax.  The 
233.5   penalty is in addition to any other remedy available to the 
233.6   commissioner of revenue or to an employee of the department of 
233.7   revenue against whom the document has been filed.  
233.8      [EFFECTIVE DATE.] This section is effective for documents 
233.9   filed on or after July 1, 2003. 
233.10     Sec. 2.  Minnesota Statutes 2002, section 270.69, is 
233.11  amended by adding a subdivision to read: 
233.12     Subd. 16.  [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien 
233.13  imposed under this section attaches to the proceeds of property 
233.14  with the same priority that the lien has with respect to the 
233.15  property itself.  "Proceeds of property" means proceeds from the 
233.16  sale, lease, license, exchange, or other disposition of the 
233.17  property, including insurance proceeds arising from the loss or 
233.18  destruction of the property. 
233.19     [EFFECTIVE DATE.] This section is effective for all liens, 
233.20  whether imposed prior to, on, or after the day following final 
233.21  enactment. 
233.22     Sec. 3.  Minnesota Statutes 2002, section 270.701, 
233.23  subdivision 2, is amended to read: 
233.24     Subd. 2.  [NOTICE OF SALE.] The commissioner shall as soon 
233.25  as practicable after the seizure of the property give notice of 
233.26  sale of the property to the owner, in the manner of service 
233.27  prescribed in subdivision 1.  In the case of personal property, 
233.28  the notice shall be served at least 10 days prior to the sale.  
233.29  In the case of real property, the notice shall be served at 
233.30  least four weeks prior to the sale.  The commissioner shall also 
233.31  cause public notice of each sale to be made.  In the case of 
233.32  personal property, notice shall be posted at least 10 days prior 
233.33  to the sale at the county courthouse for the county where the 
233.34  seizure is made, and in not less than two other public 
233.35  places.  For purposes of this requirement, the Internet is a 
233.36  public place for posting the information.  In the case of real 
234.1   property, six weeks' published notice shall be given prior to 
234.2   the sale, in a newspaper published or generally circulated in 
234.3   the county.  The notice of sale provided in this subdivision 
234.4   shall specify the property to be sold, and the time, place, 
234.5   manner and conditions of the sale.  Whenever levy is made 
234.6   without regard to the 30-day period provided in section 270.70, 
234.7   subdivision 2, public notice of sale of the property seized 
234.8   shall not be made within the 30-day period unless section 
234.9   270.702 (relating to sale of perishable goods) is applicable.  
234.10     [EFFECTIVE DATE.] This section is effective for notices of 
234.11  sales posted on or after the day following final enactment. 
234.12     Sec. 4.  Minnesota Statutes 2002, section 270.701, is 
234.13  amended by adding a subdivision to read: 
234.14     Subd. 7.  [SALE OF SEIZED SECURITIES.] (a) At the time of 
234.15  levy on securities, the commissioner shall provide notice to the 
234.16  taxpayer that the securities may be sold after ten days from the 
234.17  date of seizure.  
234.18     (b) If the commissioner levies upon nonexempt publicly 
234.19  traded securities and the value of the securities is less than 
234.20  or equal to the total obligation for which the levy is done, 
234.21  after ten days the person who possesses or controls the 
234.22  securities shall liquidate the securities in a commercially 
234.23  reasonable manner.  After liquidation, the person shall transfer 
234.24  the proceeds to the commissioner, less any applicable 
234.25  commissions or fees, or both, which are charged in the normal 
234.26  course of business.  
234.27     (c) If the commissioner levies upon nonexempt publicly 
234.28  traded securities and the value of the securities exceeds the 
234.29  total amount of the levy, the owner of the securities may, 
234.30  within seven days after receipt of the department's notice of 
234.31  levy given pursuant to subdivision 1, instruct the person who 
234.32  possesses or controls the securities which securities are to be 
234.33  sold to satisfy the obligation.  If the owner does not provide 
234.34  instructions for liquidation, the person who possesses or 
234.35  controls the securities shall liquidate the securities in an 
234.36  amount sufficient to pay the obligation, plus any applicable 
235.1   commissions or fees, or both, which are charged in the normal 
235.2   course of business, beginning with the nonexempt securities 
235.3   purchased most recently.  After liquidation, the person who 
235.4   possesses or controls the securities shall transfer to the 
235.5   commissioner the amount of money needed to satisfy the levy. 
235.6      [EFFECTIVE DATE.] This section is effective for sales of 
235.7   securities seized on or after the day following final enactment. 
235.8      Sec. 5.  Minnesota Statutes 2002, section 270.72, 
235.9   subdivision 2, is amended to read: 
235.10     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
235.11  following terms have the meanings given.  
235.12     (a) "Taxes" are mean all taxes payable to the commissioner 
235.13  including penalties and interest due on the taxes. 
235.14     (b) "Delinquent taxes" do not include a tax liability if 
235.15  (i) an administrative or court action which contests the amount 
235.16  or validity of the liability has been filed or served, (ii) the 
235.17  appeal period to contest the tax liability has not expired, or 
235.18  (iii) the applicant has entered into a payment agreement and is 
235.19  current with the payments.  
235.20     (c) "Applicant" means an individual if the license is 
235.21  issued to or in the name of an individual or the corporation or 
235.22  partnership if the license is issued to or in the name of a 
235.23  corporation or partnership.  "Applicant" also means an officer 
235.24  of a corporation, a member of a partnership, or an individual 
235.25  who is liable for delinquent taxes, either for the entity for 
235.26  which the license is at issue or for another entity for which 
235.27  the liability was incurred, or personally as a licensee.  In the 
235.28  case of a license transfer, "applicant" also means both the 
235.29  transferor and the transferee of the license.  "Applicant" also 
235.30  means any holder of a license. 
235.31     (d) "License" includes means any permit, registration, 
235.32  certification, or other form of approval authorized by statute 
235.33  or rule to be issued by the state or a political subdivision of 
235.34  the state as a condition of doing business or conducting a 
235.35  trade, profession, or occupation in Minnesota, specifically 
235.36  including, but not limited to, a contract for space rental at 
236.1   the Minnesota state fair and authorization to operate 
236.2   concessions or rides at county and local fairs, festivals, or 
236.3   events. 
236.4      (e) "Licensing authority" includes the Minnesota state fair 
236.5   board and county and local boards or governing bodies. 
236.6      [EFFECTIVE DATE.] This section is effective the day 
236.7   following final enactment. 
236.8      Sec. 6.  Minnesota Statutes 2002, section 270A.03, 
236.9   subdivision 2, is amended to read: 
236.10     Subd. 2.  [CLAIMANT AGENCY.] "Claimant agency" means any 
236.11  state agency, as defined by section 14.02, subdivision 2, the 
236.12  regents of the University of Minnesota, any district court of 
236.13  the state, any county, any statutory or home rule charter city 
236.14  presenting a claim for a municipal hospital or a public library 
236.15  or a municipal ambulance service, a hospital district, a private 
236.16  nonprofit hospital that leases its building from the county in 
236.17  which it is located, any public agency responsible for child 
236.18  support enforcement, any public agency responsible for the 
236.19  collection of court-ordered restitution, and any public agency 
236.20  established by general or special law that is responsible for 
236.21  the administration of a low-income housing program, and the 
236.22  Minnesota collection enterprise as defined in section 16D.02, 
236.23  subdivision 8, for the purpose of collecting the costs imposed 
236.24  under section 16D.11. 
236.25     [EFFECTIVE DATE.] This section is effective the day 
236.26  following final enactment. 
236.27     Sec. 7.  Minnesota Statutes 2002, section 289A.31, 
236.28  subdivision 3, is amended to read: 
236.29     Subd. 3.  [TRANSFEREES AND FIDUCIARIES.] The amounts of the 
236.30  following liabilities are, except as otherwise provided in 
236.31  section 289A.38, subdivision 13, assessed, collected, and paid 
236.32  in the same manner and subject to the same provisions and 
236.33  limitations as a deficiency in a tax imposed by chapter 290, 
236.34  including any provisions of law for the collection of taxes: 
236.35     (1) the liability, at law or in equity, of a transferee of 
236.36  property of a taxpayer for tax or overpayment of a refund, 
237.1   including interest, additional amounts, and additions to the tax 
237.2   or overpayment provided by law, imposed upon the taxpayer by 
237.3   chapter 290 or provided for in chapter 290A; and 
237.4      (2) the liability of a fiduciary under subdivision 4 for 
237.5   the payment of tax from the estate of the taxpayer.  The 
237.6   liability may reflect the amount of tax shown on the return or 
237.7   any deficiency in tax.  
237.8      [EFFECTIVE DATE.] This section is effective for refunds 
237.9   paid on or after the day following final enactment. 
237.10     Sec. 8.  Minnesota Statutes 2002, section 289A.31, 
237.11  subdivision 4, is amended to read: 
237.12     Subd. 4.  [TAX AS A PERSONAL DEBT OF A FIDUCIARY.] The A 
237.13  tax imposed by chapter 290 and an overpayment of a refund 
237.14  provided for in chapter 290A, and interest and penalties, is a 
237.15  personal debt of the taxpayer from the time the liability 
237.16  arises, regardless of when the time for discharging the 
237.17  liability by payment occurs.  The debt is, in the case of the 
237.18  personal representative of the estate of a decedent and in the 
237.19  case of any fiduciary, that of the individual in the 
237.20  individual's official or fiduciary capacity only, unless the 
237.21  individual has voluntarily distributed the assets held in that 
237.22  capacity without reserving sufficient assets to pay the tax, 
237.23  interest, and penalties, in which event the individual is 
237.24  personally liable for the deficiency.  
237.25     [EFFECTIVE DATE.] This section is effective for taxes 
237.26  imposed and property tax refunds claimed on or after the day 
237.27  following final enactment. 
237.28     Sec. 9.  Minnesota Statutes 2002, section 289A.36, 
237.29  subdivision 7, is amended to read: 
237.30     Subd. 7.  [APPLICATION TO COURT FOR ENFORCEMENT OF 
237.31  SUBPOENA.] (a) Disobedience of subpoenas issued under this 
237.32  section shall be punished by the district court of the district 
237.33  in which the party served with the subpoena is located, in the 
237.34  same manner as contempt of the district court.  
237.35     (b) Disobedience of a subpoena issued under subdivision 9 
237.36  shall be punished by the district court for Ramsey county in the 
238.1   same manner as contempt of the district court.  In addition to 
238.2   contempt remedies, the court may issue any order the court deems 
238.3   reasonably necessary to enforce compliance with the subpoena. 
238.4      [EFFECTIVE DATE.] This section is effective the day 
238.5   following final enactment. 
238.6      Sec. 10.  Minnesota Statutes 2002, section 289A.36, is 
238.7   amended by adding a subdivision to read: 
238.8      Subd. 9.  [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION 
238.9   OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to 
238.10  determine whether a business located outside the state of 
238.11  Minnesota is required to file a return under this chapter, the 
238.12  commissioner may examine the relevant records and files of the 
238.13  business. 
238.14     (b) To the full extent permitted by the Minnesota and 
238.15  United States constitutions, the commissioner may compel 
238.16  production of those relevant records and files by subpoena.  The 
238.17  subpoena may be served on the secretary of state along with the 
238.18  address to which service of the subpoena is to be sent and a fee 
238.19  of $50.  The secretary of state shall forward a copy of the 
238.20  subpoena to the business using the procedures for service of 
238.21  process in section 5.25, subdivision 6.  
238.22     (c) The commissioner shall pay the reasonable cost of 
238.23  producing records subject to subpoena under this subdivision if: 
238.24     (1) the subpoenaed party cannot produce the records without 
238.25  undue burden; and 
238.26     (2) the examination made pursuant to paragraph (a) shows 
238.27  that the subpoenaed party is not required to file a return under 
238.28  this chapter. 
238.29     [EFFECTIVE DATE.] This section is effective the day 
238.30  following final enactment. 
238.31     Sec. 11.  Minnesota Statutes 2002, section 289A.36, is 
238.32  amended by adding a subdivision to read: 
238.33     Subd. 10.  [PENALTY.] In addition to sanctions imposed 
238.34  under subdivision 7, a penalty of $250 per day is imposed on any 
238.35  business that is in violation of a court order to comply with a 
238.36  subpoena that is seeking information necessary for the 
239.1   commissioner to be able to determine whether the business is 
239.2   required to file a return or pay a tax.  The maximum penalty is 
239.3   $25,000.  Upon the request of the commissioner, the court shall 
239.4   determine the amount of the penalty and enter it as a judgment 
239.5   in favor of the commissioner.  The penalty is not payable until 
239.6   the judgment is entered. 
239.7      [EFFECTIVE DATE.] This section is effective for violations 
239.8   of court orders to enforce subpoenas issued on or after the day 
239.9   following final enactment. 
239.10     Sec. 12.  Minnesota Statutes 2002, section 297A.85, is 
239.11  amended to read: 
239.12     297A.85 [CANCELLATION OF PERMITS.] 
239.13     The commissioner may cancel a permit if one of the 
239.14  following conditions occurs: 
239.15     (1) the permit holder has not filed a sales or use tax 
239.16  return for at least one year; 
239.17     (2) the permit holder has not reported any sales or use tax 
239.18  liability on the permit holder's returns for at least two years; 
239.19  or 
239.20     (3) the permit holder requests cancellation of the permit; 
239.21  or 
239.22     (4) the permit is subject to cancellation pursuant to 
239.23  section 297A.86, subdivision 2, paragraph (a). 
239.24     [EFFECTIVE DATE.] This section is effective for 
239.25  cancellations of permits done on or after the day following 
239.26  final enactment. 
239.27     Sec. 13.  [REPEALER.] 
239.28     Minnesota Statutes 2002, section 270.691, subdivision 8, is 
239.29  repealed effective the day following final enactment. 
239.30                             ARTICLE 12
239.31                           MISCELLANEOUS
239.32     Section 1.  Minnesota Statutes 2002, section 256.969, is 
239.33  amended by adding a subdivision to read: 
239.34     Subd. 9c.  [COUNTY BILLING.] (a) Minnesota hospitals 
239.35  located in the metropolitan area defined in section 473.121, 
239.36  subdivision 2, that have a disproportionate population 
240.1   adjustment greater than ten percent are eligible for a special 
240.2   payment for uncompensated care.  These hospitals may bill a 
240.3   county for services provided to a resident of that county 
240.4   provided that: 
240.5      (1) the patient is a resident of a county other than the 
240.6   county in which the hospital is located.  For purposes of this 
240.7   section, residence is defined in section 256G.02, subdivision 8; 
240.8   and 
240.9      (2) the patient was uninsured at the time of service and 
240.10  has an income below 250 percent of the federal poverty 
240.11  guidelines. 
240.12     (b) Counties that are billed under this subdivision must 
240.13  pay eligible hospitals at a rate equal to the cost of the care 
240.14  provided.  The cost of care shall be established using the 
240.15  hospital's stated charges, adjusted to cost using the 
240.16  cost-to-charge ratio established by the state.  For purposes of 
240.17  prompt payment, section 471.425, subdivisions 2 and 4, shall 
240.18  apply.  In the event of nonpayment, the hospital shall have a 
240.19  cause of action against the county and shall be entitled to 
240.20  collection expenses incurred, including attorney fees. 
240.21     (c) The county of residence shall be the payer of last 
240.22  resort.  If third-party payments are received by a participating 
240.23  hospital for services rendered after payment has been made by 
240.24  the county of residence, the participating hospital shall 
240.25  reimburse the county of residence for payments made to the 
240.26  hospital for covered services, at the rates originally paid by 
240.27  the county of residence. 
240.28     Sec. 2.  Minnesota Statutes 2002, section 270.60, 
240.29  subdivision 4, is amended to read: 
240.30     Subd. 4.  [PAYMENTS TO COUNTIES.] (a) The commissioner 
240.31  shall pay to a county in which an Indian gaming casino is 
240.32  located: 
240.33     (1) ten percent of the state share of all taxes generated 
240.34  from activities on reservations and collected under a tax 
240.35  agreement under this section with the tribal government for the 
240.36  reservation located in the county; or 
241.1      (2) five percent of excise taxes collected by the state 
241.2   that are determined by the department of revenue to have been 
241.3   generated from activities on a reservation located in the 
241.4   county, the tribal government of which has not entered into a 
241.5   tax agreement under this section. 
241.6      If the tribe has casinos located in more than one county, 
241.7   the payment must be divided equally among the counties in which 
241.8   the casinos are located. 
241.9      (b) The commissioner shall make the payments required under 
241.10  this subdivision by February 28 of the year following the year 
241.11  the taxes are collected. 
241.12     (c) An amount sufficient to make the payments authorized by 
241.13  this subdivision is annually appropriated from the general fund 
241.14  to the commissioner.  
241.15     [EFFECTIVE DATE.] This section is effective for taxes 
241.16  collected after June 30, 2003. 
241.17     Sec. 3.  [280A.01] [DEFINITIONS.] 
241.18     Subdivision 1.  [APPLICATION.] For purposes of this 
241.19  chapter, the following terms have the meanings given. 
241.20     Subd. 2.  [FACE AMOUNT.] The "face amount of the tax lien" 
241.21  or "face amount" means the sum of the following amounts: 
241.22     (1) the unpaid real property taxes and assessments; 
241.23     (2) penalties; 
241.24     (3) fees and costs, including the allocable costs of any 
241.25  publications made and notices given by the joint powers agency 
241.26  under section 280A.04, subdivision 2; and 
241.27     (4) interest accrued on amounts listed in clauses (1) to 
241.28  (3) at the applicable statutory rate through the date of sale of 
241.29  the tax lien. 
241.30     Subd. 3.  [TAXING AUTHORITY.] "Taxing authority" is a 
241.31  county or joint powers agency with a population of 500,000 or 
241.32  more.  
241.33     Subd. 4.  [TREASURER.] "Treasurer" means the county 
241.34  treasurer or the equivalent officer of another taxing authority 
241.35  or a designee of the treasurer or other officer. 
241.36     [EFFECTIVE DATE.] This section is effective the day 
242.1   following final enactment and expires on June 30, 2005. 
242.2      Sec. 4.  [280A.02] [AUTHORITY TO SELL TAX LIENS.] 
242.3      Subdivision 1.  [GENERAL AUTHORITY.] (a) As provided in 
242.4   this chapter, a taxing authority may sell its allocable portion 
242.5   of tax liens securing delinquent real property taxes and 
242.6   assessments or other charges that are made a lien on real 
242.7   property for the benefit of the taxing authority.  The allocable 
242.8   portion of a tax lien is for all purposes itself a "tax lien" 
242.9   for purposes of this chapter.  A taxing authority may not sell 
242.10  any tax lien for which the taxes secured by the tax lien are 
242.11  subject to a proceeding under chapter 278 that has not been 
242.12  dismissed or otherwise terminated. 
242.13     Subd. 2.  [COUNTY ACTION; EFFECT.] A county may sell the 
242.14  tax liens of all of the taxing authorities having a tax lien on 
242.15  a property.  In such case, whenever this chapter requires or 
242.16  permits a taxing authority to take action, the taking of that 
242.17  action by the county is deemed to be the taking of that action 
242.18  by and on behalf of each of the participating taxing authorities.
242.19     Subd. 3.  [AMOUNT OF LIEN; PARTIAL PAYMENTS.] (a) The 
242.20  amount of a tax lien sold under this chapter equals the face 
242.21  amount of the tax lien. 
242.22     (b) Any partial payments received on a tax lien are applied 
242.23  first to accrued interest and then to the face amount of the tax 
242.24  lien. 
242.25     Subd. 4.  [NOT A BORROWING.] A sale of a tax lien or tax 
242.26  liens by a taxing authority under this chapter is a sale and is 
242.27  not a borrowing by the taxing authority. 
242.28     [EFFECTIVE DATE.] This section is effective the day 
242.29  following final enactment and expires on June 30, 2005. 
242.30     Sec. 5.  [280A.03] [PROCEDURES FOR SALE OF TAX LIENS.] 
242.31     Subdivision 1.  [SALE TO JOINT POWER AGENCY.] A taxing 
242.32  authority may, from time to time, sell all or a portion of its 
242.33  then delinquent tax liens through a negotiated sale under the 
242.34  procedures provided in this chapter to a joint powers agency 
242.35  organized by two or more counties under section 471.59.  A 
242.36  taxing authority selling tax liens to a joint powers agency need 
243.1   not be a member of the joint powers agency.  A joint powers 
243.2   agency formed to purchase and sell tax liens under this chapter 
243.3   is deemed to be exercising common powers of its member counties 
243.4   for purposes of section 471.59. 
243.5      Subd. 2.  [TERMS OF AGREEMENT.] A taxing authority may 
243.6   enter into a purchase and sale agreement with a joint powers 
243.7   agency for the sale of tax liens by the taxing authority to the 
243.8   joint powers agency.  The taxing authority may include in the 
243.9   agreement the terms, provisions, conditions, representations, 
243.10  and warranties that it determines are necessary or desirable and 
243.11  are consistent with the provisions of this chapter.  The 
243.12  agreement must specify the purchase price of the tax liens to be 
243.13  paid to the taxing authority and any other amounts that may be 
243.14  made available to the taxing authority on a contingent basis 
243.15  under the terms of the agreement.  The purchase price may be 
243.16  more or less than the face amount of the tax liens purchased by 
243.17  the joint powers agency.  
243.18     Subd. 3.  [NOTICE OF SALE.] Ninety days before a taxing 
243.19  authority sells a tax lien to a joint powers agency, the taxing 
243.20  authority shall notify all owners of record of the property that 
243.21  is subject to the lien, that the authority intends to sell the 
243.22  lien.  The notice must advise the property owner the amount of 
243.23  the taxes, penalties, interest, and any other amounts owed on 
243.24  the tax lien; how the property owner can pay the delinquent 
243.25  taxes to the taxing authority; that the taxing authority intends 
243.26  to sell the lien; the consequences to the property owner if the 
243.27  lien is sold; and a statement of the rights, obligations, and 
243.28  remedies of the property owner. 
243.29     [EFFECTIVE DATE.] This section is effective the day 
243.30  following final enactment and expires on June 30, 2005. 
243.31     Sec. 6.  [280A.04] [SALES OF TAX LIENS BY JOINT POWERS 
243.32  AGENCY.] 
243.33     Subdivision 1.  [BULK SALE.] A joint powers agency 
243.34  organized for the purposes of this chapter may sell tax liens in 
243.35  bulk through a negotiated sale under the procedures provided in 
243.36  this section.  The joint powers agency shall establish the terms 
244.1   and conditions of a sale of tax liens.  No provision of law that 
244.2   requires competitive bidding relating to the letting of 
244.3   government contracts applies to the sale of tax liens by a joint 
244.4   powers agency. 
244.5      Subd. 2.  [NOTICE OF SALE.] The joint powers agency shall 
244.6   publish a notice of its intention to sell a tax lien or tax 
244.7   liens through a negotiated sale.  The notice must advise that a 
244.8   request for statements of interest is available at the office of 
244.9   the joint powers agency, and may require the submission of any 
244.10  information or documents that the joint powers agency deems 
244.11  appropriate.  The notice must identify separately the tax liens 
244.12  intended to be sold, the number and aggregate amount of the tax 
244.13  liens and state that a copy of a list of the tax liens may be 
244.14  obtained from the office of the joint powers agency upon 
244.15  request.  The notice must be published in a newspaper of general 
244.16  circulation in the taxing authority not less than 30 days prior 
244.17  to the date designated by the joint powers agency for the 
244.18  receipt of statements of interest. 
244.19     Subd. 3.  [AWARD OF SALE.] Notwithstanding any other law to 
244.20  the contrary, in order to determine whether or not to award a 
244.21  sale of tax liens and to determine to whom to award a sale of 
244.22  tax liens, the joint powers agency may consider all factors that 
244.23  the governing body of the joint powers agency deems relevant to 
244.24  the best interests of the taxing authorities from which the tax 
244.25  liens are to be purchased, including but not limited to the 
244.26  price at which the tax liens are offered to be purchased, as 
244.27  well as the terms and conditions of the purchase and sale 
244.28  agreements proposed by the prospective purchasers.  The joint 
244.29  powers agency may negotiate with one or more prospective 
244.30  purchasers to determine the terms and conditions under which tax 
244.31  liens are proposed to be purchased. 
244.32     Subd. 4.  [TERMS OF AGREEMENT.] The joint powers agency may 
244.33  enter into one or more purchase and sale agreements for the sale 
244.34  of tax liens by the joint powers agency.  The agency may include 
244.35  in the agreements the terms, provisions, conditions, 
244.36  representations, and warranties it determines are necessary or 
245.1   desirable and are consistent with the provisions of this 
245.2   chapter.  Each agreement must specify the purchase price to be 
245.3   paid to the joint powers agency and any other amounts that may 
245.4   be made available to the joint powers agency on a contingent 
245.5   basis under the terms of the agreement.  The purchase price may 
245.6   be more or less than the face amount of the tax liens purchased 
245.7   by the tax lien purchaser and may include noncash 
245.8   consideration.  In connection with the sale of the tax liens 
245.9   under the agreement, the joint powers agency may assign to the 
245.10  tax lien purchaser all of its right, title, and interest in and 
245.11  to the purchase and sale agreement or agreements between the 
245.12  joint powers agency and the counties from which the tax liens 
245.13  were purchased by the joint powers agency. 
245.14     Subd. 5.  [AUTHORITY TO CANCEL.] The joint powers agency 
245.15  may postpone or cancel any proposed sale of tax liens for which 
245.16  notice has been published.  The joint powers agency is not 
245.17  liable for any damages as a result of cancellation or 
245.18  postponement of a proposed sale of tax liens, nor does any cause 
245.19  of action arise from a cancellation or postponement. 
245.20     [EFFECTIVE DATE.] This section is effective the day 
245.21  following final enactment and expires on June 30, 2005. 
245.22     Sec. 7.  [280A.05] [TAX LIEN CERTIFICATES.] 
245.23     Subdivision 1.  [OPERATION.] (a) Upon the sale by a taxing 
245.24  authority of a tax lien to a joint powers agency, the county 
245.25  auditor or the treasurer shall deliver to the joint powers 
245.26  agency a tax lien certificate evidencing the sale and the 
245.27  transfer of the tax lien by the taxing authority to the joint 
245.28  powers agency. 
245.29     (b) A tax lien certificate operates to transfer and assign 
245.30  the tax lien upon the property described in the certificate for: 
245.31     (1) the unpaid real property taxes and assessments; 
245.32     (2) other fees and costs, including the costs of any 
245.33  publications made and notices given under section 280A.04, 
245.34  subdivision 2; 
245.35     (3) all interest and penalties accrued on the tax lien 
245.36  through the date of sale; and 
246.1      (4) accrued interest on all unpaid amounts from the date of 
246.2   sale to the date of payment. 
246.3      (c) The county auditor or treasurer shall keep a record of 
246.4   all tax liens transferred as provided by this section. 
246.5      Subd. 2.  [CONTENTS.] (a) A tax lien certificate must 
246.6   contain: 
246.7      (1) a transfer and assignment by the taxing authority of 
246.8   the tax lien sold to the joint powers agency; 
246.9      (2) the date of the sale; 
246.10     (3) the aggregate amount of the tax lien transferred and 
246.11  the items of unpaid real property taxes and assessments and 
246.12  other charges; 
246.13     (4) the costs of any publications made and notices given 
246.14  under this chapter; 
246.15     (5) all interest and penalties accrued on the tax lien 
246.16  through the date of sale comprising the tax lien; 
246.17     (6) a statement that the tax lien certificate will bear 
246.18  interest at the rate specified in section 279.03, subdivision 
246.19  1a; and 
246.20     (7) a description of the property by block and lot or by 
246.21  such other identification sufficient to identify the property 
246.22  subject to the tax lien. 
246.23     (b) The treasurer shall, by manual or facsimile signature: 
246.24     (1) execute a tax lien certificate; and 
246.25     (2) acknowledge the certificate in the manner in which a 
246.26  deed must be acknowledged to be recorded.  
246.27     (c) A tax lien certificate may evidence the transfer of 
246.28  more than one tax lien on more than one property. 
246.29     [EFFECTIVE DATE.] This section is effective the day 
246.30  following final enactment and expires on June 30, 2005. 
246.31     Sec. 8.  [280A.06] [LOST TAX LIEN CERTIFICATE.] 
246.32     If any tax lien certificate is lost, the treasurer may, 
246.33  upon satisfactory proof of the loss, direct the execution and 
246.34  delivery of a duplicate certificate to the person or persons who 
246.35  appear entitled to the certificate.  The treasurer may require a 
246.36  bond of indemnity to the taxing authority as a condition of 
247.1   executing a duplicate certificate. 
247.2      [EFFECTIVE DATE.] This section is effective the day 
247.3   following final enactment and expires on June 30, 2005. 
247.4      Sec. 9.  [280A.07] [RECORDING OF TAX LIEN CERTIFICATES.] 
247.5      A tax lien certificate and any assignment or discharge of a 
247.6   certificate, duly acknowledged, are deemed conveyances within 
247.7   the meaning of section 507.01 and may be recorded (in the case 
247.8   of unregistered real estate) in the office of the county 
247.9   recorder of the county where the property is located or 
247.10  registered (in the case of registered real estate) in the office 
247.11  of the registrar of titles of the county where the property is 
247.12  located under section 508.55.  Tax lien certificates and all 
247.13  assignments and discharges of certificates must be recorded by 
247.14  the county recorder or registered by the registrar of titles in 
247.15  the same manner as mortgages and assignments and discharges of 
247.16  mortgages.  Notwithstanding section 272.12, the county recorder 
247.17  or the registrar of titles shall not refuse to receive or record 
247.18  a tax lien certificate and any assignment or discharge of a 
247.19  certificate because of any outstanding delinquent taxes due on 
247.20  the related property.  Notwithstanding section 507.34, neither 
247.21  the tax lien nor the rights transferred or created by a tax lien 
247.22  certificate is impaired by the failure of the county recorder or 
247.23  registrar of titles to record or register a tax lien certificate 
247.24  made by the county through the treasurer. 
247.25     [EFFECTIVE DATE.] This section is effective the day 
247.26  following final enactment and expires on June 30, 2005. 
247.27     Sec. 10.  [280A.08] [RIGHTS OF HOLDER OF TAX LIEN 
247.28  CERTIFICATE; DISCHARGE OF TAX LIEN.] 
247.29     Subdivision 1.  [RIGHTS OF LIENHOLDER.] A holder of a tax 
247.30  lien under a tax lien certificate has the right to receive all 
247.31  amounts collected by the county or the taxing authority in 
247.32  payment of amounts due on the tax lien, including all payments 
247.33  of the unpaid real property taxes, assessments, penalties, and 
247.34  costs, plus interest accrued on those amounts to the date of 
247.35  payment of the tax lien in full.  The treasurer of the county in 
247.36  which any property encumbered by a tax lien transferred under 
248.1   this chapter and recorded as provided in section 280A.07 shall 
248.2   pay to the holder of the tax lien certificate or its designee 
248.3   designated in writing promptly upon receipt any payments made on 
248.4   a tax lien.  Any person having a legal or beneficial interest in 
248.5   the property affected by a tax lien certificate may satisfy it 
248.6   at any time upon payment of the amounts then due, including all 
248.7   accrued interest on the lien.  Upon satisfaction of the tax 
248.8   lien, the holder shall issue to the person that satisfied the 
248.9   tax lien a certificate of discharge, certifying that the tax 
248.10  lien has been paid or has been otherwise satisfied, in a 
248.11  recordable or registrable form approved by the county recorder 
248.12  of the county where the property is located. 
248.13     Subd. 2.  [DISCHARGE OF LIEN.] A tax lien sold under this 
248.14  chapter may be discharged by presenting the certificate of 
248.15  discharge issued by the holder of the tax lien under subdivision 
248.16  1 to the county recorder or registrar of titles of the county 
248.17  where the property is located. 
248.18     [EFFECTIVE DATE.] This section is effective the day 
248.19  following final enactment and expires on June 30, 2005. 
248.20     Sec. 11.  [280A.09] [EXEMPTION FROM TAXATION.] 
248.21     Notwithstanding any other law to the contrary, tax liens 
248.22  and tax lien certificates are exempt from taxation by the state 
248.23  or any political subdivision of the state, including the 
248.24  mortgage registry taxes imposed by chapter 287 but excluding the 
248.25  recording fees imposed by chapter 357.  This section does not 
248.26  exempt the real property affected by any tax lien, or the 
248.27  interest paid on the tax lien, from taxation. 
248.28     [EFFECTIVE DATE.] This section is effective the day 
248.29  following final enactment and expires on June 30, 2005. 
248.30     Sec. 12.  [280A.10] [FORECLOSURE OF TAX LIENS.] 
248.31     (a) If the amount of any tax lien transferred by a tax lien 
248.32  certificate is not paid by the later of the date of expiration 
248.33  of the applicable redemption period specified in chapter 281 or 
248.34  the expiration of a confession of judgment entered into under 
248.35  section 279.37, the tax lien may be foreclosed by advertisement 
248.36  in the same manner as a mortgage as provided in chapter 580, 
249.1   except that the following rules apply: 
249.2      (1) the property owner is deemed to be the mortgagor, the 
249.3   tax lien certificate holder is deemed to be the mortgagee, and 
249.4   the tax lien certificate is deemed to be the mortgage note and 
249.5   mortgage; 
249.6      (2) the tax lien certificate is deemed to contain a power 
249.7   of sale and the failure of the property owner to redeem the tax 
249.8   lien is deemed to be a default by which the power of sale has 
249.9   become operative; and 
249.10     (3) notwithstanding section 582.01 or any other law to the 
249.11  contrary, the tax lien certificate holder may recover from the 
249.12  proceeds of foreclosure reasonable attorney fees and 
249.13  disbursements relating to the foreclosure, together with the 
249.14  expenses of the sale. 
249.15     (b) In any conflict between this chapter and any other law 
249.16  relating to the foreclosure of mortgages, this chapter has 
249.17  precedence over the other law. 
249.18     [EFFECTIVE DATE.] This section is effective the day 
249.19  following final enactment and expires on June 30, 2005. 
249.20     Sec. 13.  [280A.11] [REDEMPTION.] 
249.21     Subdivision 1.  [NOTICE OF EXPIRATION OF REDEMPTION 
249.22  PERIOD.] The provisions of chapter 281 relating to the 
249.23  redemption of tax liens sold under this chapter continue to 
249.24  apply to tax liens sold under this chapter.  The county auditor 
249.25  shall give notice of the expiration of the applicable redemption 
249.26  period of any tax lien sold under this chapter in the same 
249.27  manner as provided for tax-forfeited property under chapter 281. 
249.28     Subd. 2.  [LIMITATIONS ON ADVERSE CLAIMS.] No cause of 
249.29  action or defense claiming that any tax lien certificate or tax 
249.30  lien is invalid may be asserted or maintained upon any claim 
249.31  adverse to the holder of the tax lien certificate or the 
249.32  holder's successors in interest, including but not limited to 
249.33  any claim based upon any failure, omission, error, or defect 
249.34  described in section 284.28, subdivision 1, unless the cause of 
249.35  action or defense is asserted in an action commenced before the 
249.36  expiration of the time for redemption, as provided by section 
250.1   281.21, or by any other law hereafter enacted providing for 
250.2   notice of expiration of time for redemption and the filing 
250.3   thereof. 
250.4      [EFFECTIVE DATE.] This section is effective the day 
250.5   following final enactment and expires on June 30, 2005. 
250.6      Sec. 14.  [280A.12] [PRIORITY AND PAYMENT OF TAX LIENS; 
250.7   EFFECT OF FORFEITURE TO STATE.] 
250.8      Notwithstanding section 280.39 or any other law to the 
250.9   contrary, if more than one tax lien is entitled to foreclosure 
250.10  under this chapter on a parcel of real property, all the tax 
250.11  liens rank on a parity.  After the payment of all legal fees and 
250.12  costs, allowances, and disbursements relating to the 
250.13  foreclosure, the holders of all the tax liens must be paid from 
250.14  the proceeds of the sale, so far as the proceeds suffice to pay 
250.15  the same, the amounts of their respective tax liens in the ratio 
250.16  to which the amount of the tax lien of each holder bears to the 
250.17  aggregate of all the amounts.  All tax liens foreclosed upon in 
250.18  a foreclosure sale have priority over any other lien on the 
250.19  property sold in foreclosure regardless as to when the other 
250.20  lien became a lien on the property. 
250.21     [EFFECTIVE DATE.] This section is effective the day 
250.22  following final enactment and expires on June 30, 2005.  
250.23     Sec. 15.  Minnesota Statutes 2002, section 287.12, is 
250.24  amended to read: 
250.25     287.12 [TAXES, HOW APPORTIONED.] 
250.26     (a) All taxes paid to the county treasurer under the 
250.27  provisions of sections 287.01 to 287.12 must be apportioned, 97 
250.28  percent to the general fund of the state, and three percent to 
250.29  the county revenue fund. 
250.30     (b) On or before the 20th day of each month the county 
250.31  treasurer shall determine and pay to the commissioner of revenue 
250.32  for deposit in the state treasury and credit to the general fund 
250.33  the state's portion of the receipts from the mortgage registry 
250.34  tax during the preceding month subject to the electronic payment 
250.35  requirements of section 270.771.  The county treasurer shall 
250.36  provide any related reports requested by the commissioner of 
251.1   revenue. 
251.2      (c) Counties must remit 81 percent of the state's portion 
251.3   of the June receipts collected through June 25 and the estimated 
251.4   state's portion of the receipts to be collected during the 
251.5   remainder of the month to the commissioner of revenue two 
251.6   business days before June 30 of each year.  The remaining amount 
251.7   of the June receipts is due on August 20. 
251.8      [EFFECTIVE DATE.] This section is effective January 1, 2004.
251.9      Sec. 16.  Minnesota Statutes 2002, section 287.29, 
251.10  subdivision 1, is amended to read: 
251.11     Subdivision 1.  [APPOINTMENT AND PAYMENT OF TAX PROCEEDS.] 
251.12  (a) The proceeds of the taxes levied and collected under 
251.13  sections 287.21 to 287.39 must be apportioned, 97 percent to the 
251.14  general fund of the state, and three percent to the county 
251.15  revenue fund. 
251.16     (b) On or before the 20th day of each month, the county 
251.17  treasurer shall determine and pay to the commissioner of revenue 
251.18  for deposit in the state treasury and credit to the general fund 
251.19  the state's portion of the receipts for deed tax from the 
251.20  preceding month subject to the electronic transfer requirements 
251.21  of section 270.771.  The county treasurer shall provide any 
251.22  related reports requested by the commissioner of revenue. 
251.23     (c) Counties must remit 81 percent of the state's portion 
251.24  of the June receipts collected through June 25 and the estimated 
251.25  state's portion of the receipts to be collected during the 
251.26  remainder of the month to the commissioner of revenue two 
251.27  business days before June 30 of each year.  The remaining amount 
251.28  of the June receipts is due on August 20. 
251.29     [EFFECTIVE DATE.] This section is effective January 1, 2004.
251.30     Sec. 17.  Minnesota Statutes 2002, section 287.31, is 
251.31  amended by adding a subdivision to read: 
251.32     Subd. 3.  [UNDERPAYMENTS OF ACCELERATED PAYMENT OF JUNE TAX 
251.33  RECEIPTS.] If a county fails to timely remit the specified 
251.34  percentage of the state portion of the actual June tax receipts 
251.35  at the time required by section 287.12 or 287.29, the county 
251.36  shall pay a penalty equal to ten percent of the state portion of 
252.1   actual June receipts less the amount remitted to the 
252.2   commissioner of revenue in June.  The penalty must not be 
252.3   imposed, however, if the amount remitted in June equals either: 
252.4      (1) 75 percent of the state's portion of the preceding 
252.5   May's receipts; or 
252.6      (2) 75 percent of the average monthly amount of the state's 
252.7   portion for the previous calendar year. 
252.8      [EFFECTIVE DATE.] This section is effective January 1, 2004.
252.9      Sec. 18.  Minnesota Statutes 2002, section 297F.08, is 
252.10  amended by adding a subdivision to read: 
252.11     Subd. 12.  [CIGARETTES IN INTERSTATE COMMERCE.] (a) A 
252.12  person may not transport or cause to be transported from this 
252.13  state cigarettes for sale in another state without first 
252.14  affixing to the cigarettes the stamp required by the state in 
252.15  which the cigarettes are to be sold or paying any other excise 
252.16  tax on the cigarettes imposed by the state in which the 
252.17  cigarettes are to be sold. 
252.18     (b) A person may not affix to cigarettes the stamp required 
252.19  by another state or pay any other excise tax on the cigarettes 
252.20  imposed by another state if the other state prohibits stamps 
252.21  from being affixed to the cigarettes, prohibits the payment of 
252.22  any other excise tax on the cigarettes, or prohibits the sale of 
252.23  the cigarettes. 
252.24     (c) Not later than 15 days after the end of each calendar 
252.25  quarter, a person who transports or causes to be transported 
252.26  from this state cigarettes for sale in another state shall 
252.27  submit to the commissioner a report identifying the quantity and 
252.28  style of each brand of the cigarettes transported or caused to 
252.29  be transported in the preceding calendar quarter, and the name 
252.30  and address of each recipient of the cigarettes. 
252.31     [EFFECTIVE DATE.] This section is effective the day 
252.32  following final enactment. 
252.33     Sec. 19.  Minnesota Statutes 2002, section 297G.01, is 
252.34  amended by adding a subdivision to read: 
252.35     Subd. 21.  [LOW-ALCOHOL DAIRY COCKTAIL.] "Low-alcohol dairy 
252.36  cocktail" means a premixed cocktail, or any other product except 
253.1   liqueur-filled candy, that: 
253.2      (1) consists primarily of milk products; 
253.3      (2) contains distilled spirits; 
253.4      (3) is drinkable as a beverage or is promoted as an 
253.5   alcoholic product; and 
253.6      (4) contains less than 3.2 percent alcohol by volume. 
253.7      [EFFECTIVE DATE.] This section is effective for sales made 
253.8   after June 30, 2003. 
253.9      Sec. 20.  Minnesota Statutes 2002, section 297G.03, 
253.10  subdivision 1, is amended to read: 
253.11     Subdivision 1.  [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 
253.12  The following excise tax is imposed on all distilled spirits and 
253.13  wine manufactured, imported, sold, or possessed in this state: 
253.14                                  Standard             Metric
253.15  (a) Distilled spirits,      $5.03 per gallon   $1.33 per liter
253.16  liqueurs, cordials, 
253.17  and specialties regardless 
253.18  of alcohol content 
253.19  (excluding ethyl alcohol) 
253.20  (b) Wine containing         $ .30 per gallon   $ .08 per liter 
253.21  14 percent or less
253.22  alcohol by volume 
253.23  (except cider as defined 
253.24  in section 297G.01, 
253.25  subdivision 3a) 
253.26  (c) Wine containing         $ .95 per gallon   $ .25 per liter
253.27  more than 14 percent 
253.28  but not more than 21
253.29  percent alcohol by volume 
253.30  (d) Wine containing more    $1.82 per gallon   $ .48 per liter
253.31  than 21 percent but not 
253.32  more than 24 percent
253.33  alcohol by volume 
253.34  (e) Wine containing more    $3.52 per gallon   $ .93 per liter
253.35  than 24 percent alcohol
253.36  by volume
254.1   (f) Natural and             $1.82 per gallon   $ .48 per liter
254.2   artificial sparkling wines
254.3   containing alcohol 
254.4   (g) Cider as defined in     $ .15 per gallon   $ .04 per liter
254.5   section 297G.01,
254.6   subdivision 3a
254.7   (h) Low alcohol dairy       $ .08 per gallon   $ .02 per liter
254.8   cocktails
254.9      In computing the tax on a package of distilled spirits or 
254.10  wine, a proportional tax at a like rate on all fractional parts 
254.11  of a gallon or liter must be paid, except that the tax on a 
254.12  fractional part of a gallon less than 1/16 of a gallon is the 
254.13  same as for 1/16 of a gallon. 
254.14     [EFFECTIVE DATE.] This section is effective for sales made 
254.15  after June 30, 2003. 
254.16     Sec. 21.  Minnesota Statutes 2002, section 473F.08, is 
254.17  amended by adding a subdivision to read: 
254.18     Subd. 3c.  [CHARITY CARE REIMBURSEMENT.] (a) As used in 
254.19  this subdivision, the following terms have the meanings given in 
254.20  this paragraph. 
254.21     (1) "Charity care" means the amount that would have been 
254.22  charged by a facility for rendering free or discounted care to 
254.23  persons who cannot afford to pay and for which the facility did 
254.24  not expect payment.  Charity care does not include any amount 
254.25  for which a hospital received a payment from a county under 
254.26  section 256.969, subdivision 9c. 
254.27     (2) A "qualifying hospital" means a hospital in the area 
254.28  that is owned or operated by a local unit of government, or 
254.29  formerly owned by a university, has a licensed bed capacity 
254.30  greater than 400, and provides uncompensated care valued at more 
254.31  than 1.8 percent of its gross charges as stated in the 
254.32  Healthcare cost information system database, maintained by the 
254.33  Minnesota hospital association for the Minnesota department of 
254.34  health. 
254.35     (b) A county that contains a qualifying hospital that 
254.36  provides charity care to residents of the area is eligible for 
255.1   reimbursement of the charity care amount that is above the 
255.2   statewide average for hospitals for charity care, adjusted to 
255.3   cost.  By July 15, 2004, and each subsequent year, the county 
255.4   shall notify its county auditor, as well as the administrative 
255.5   auditor, of the amount of qualifying charity care provided, 
255.6   adjusted to cost using the hospital's cost-to-charge ratio, 
255.7   during the 12-month period ending on June 30 of the current year.
255.8      (c) The areawide levy of each governmental unit calculated 
255.9   in subdivision 3, paragraph (a), must be reduced in an amount 
255.10  equal to the reimbursement multiplied by the proportion of the 
255.11  areawide levy of each governmental unit to the total areawide 
255.12  levy of all governmental units. 
255.13     (d) The administrative auditor shall pay one-half of the 
255.14  reimbursement to the county auditor of the county that contains 
255.15  the qualifying hospital on or before June 15 and the remaining 
255.16  one-half of the reimbursement on or before November 15.  The 
255.17  county auditor receiving the payment shall disburse the 
255.18  reimbursement to the qualifying hospital within 15 days of 
255.19  receipt of the reimbursement. 
255.20     (e) Prior to the reporting specified in paragraph (b) 
255.21  above, all qualifying hospitals that participate in this program 
255.22  shall agree upon and implement a common standard for reporting 
255.23  charity care, and a common standard for determining eligibility 
255.24  for charity care for all participating hospitals. 
255.25     [EFFECTIVE DATE.] This section is effective for fiscal 
255.26  disparities contribution and distribution tax capacities for 
255.27  taxes payable in 2005 and subsequent years. 
255.28     Sec. 22.  [REPEALER.] 
255.29     Laws 1984, chapter 652, section 2, is repealed. 
255.30     [EFFECTIVE DATE.] This section is effective for Benton 
255.31  county the day after the governing body of Benton county and its 
255.32  chief clerical officer timely complete their compliance with 
255.33  Minnesota Statutes, section 645.021, subdivisions 2 and 3.  
255.34     This section is effective for Stearns county the day after 
255.35  the governing body of Stearns county and its chief clerical 
255.36  officer timely complete their compliance with Minnesota 
256.1   Statutes, section 645.021, subdivisions 2 and 3.