Minnesota Legislature
SF 1505
1st Unofficial 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 financing and operation of government in 1.3 this state; making changes to income, corporate 1.4 franchise, estate, property, sales and use, motor 1.5 vehicle sales, gross earnings, hazardous waste 1.6 generator, insurance premiums, and cigarette and 1.7 tobacco taxes, and tax provisions; changing, 1.8 providing, or abolishing tax exemptions and credits; 1.9 changing property tax valuation, assessment, 1.10 classification, levy, notice, review, appeal, 1.11 apportionment, distribution, and aid provisions; 1.12 conforming to certain changes in the internal revenue 1.13 code; providing for tax administration, collection, 1.14 compliance, and enforcement; changing or imposing 1.15 certain requirements on assessors; changing provisions 1.16 relating to property tax refunds, tax increment 1.17 financing, border city development zones, 1.18 tax-forfeited land sales, recording of documents, 1.19 revenue recapture, and sustainable forest management 1.20 incentives; authorizing certain certificates of motor 1.21 vehicle title; imposing certain requirements for 1.22 cigarettes shipped for sale in another state; 1.23 authorizing a Central Lakes Region Sanitary District; 1.24 authorizing a tax increment financing district in the 1.25 city of Duluth; changing provisions relating to Cook 1.26 county hospital district; authorizing a lodging tax in 1.27 the city of Newport; repealing a local law relating to 1.28 Stearns and Benton counties; authorizing disclosure of 1.29 data and requiring access to certain records; imposing 1.30 penalties; amending Minnesota Statutes 2002, sections 1.31 115B.24, subdivision 8; 168A.03; 216B.2424, 1.32 subdivision 5; 270.06; 270.10, subdivision 1a; 270.69, 1.33 by adding a subdivision; 270.701, subdivision 2, by 1.34 adding a subdivision; 270.72, subdivision 2; 270A.03, 1.35 subdivision 2; 270B.12, by adding a subdivision; 1.36 272.02, subdivisions 31, 47, 53, by adding 1.37 subdivisions; 272.12; 273.01; 273.05, subdivision 1; 1.38 273.061, by adding subdivisions; 273.08; 273.11, 1.39 subdivision 1a; 273.124, subdivision 1; 273.13, 1.40 subdivisions 22, 25; 273.1398, subdivisions 4b, 4d; 1.41 273.372; 273.42, subdivision 2; 274.01, subdivision 1; 1.42 274.13, subdivision 1; 275.025, subdivisions 1, 3, 4; 1.43 276.10; 276.11, subdivision 1; 277.20, subdivision 2; 1.44 278.01, subdivision 4; 279.06, subdivision 1; 281.17; 1.45 282.01, subdivision 7a; 282.08; 289A.02, subdivision 1.46 7; 289A.10, subdivision 1; 289A.19, subdivision 4; 2.1 289A.31, subdivisions 3, 4, by adding a subdivision; 2.2 289A.36, subdivision 7, by adding subdivisions; 2.3 289A.50, subdivision 2a; 289A.56, subdivision 3; 2.4 289A.60, subdivision 7, by adding a subdivision; 2.5 290.01, subdivisions 19, 19b, 19d, 31; 290.06, 2.6 subdivision 2c; 290.0671, subdivision 1; 290.0675, 2.7 subdivisions 2, 3; 290.0679, subdivision 2; 290.0802, 2.8 subdivision 1; 290A.03, subdivisions 8, 15; 290C.02, 2.9 subdivisions 3, 7; 290C.03; 290C.07; 290C.09; 290C.10; 2.10 290C.11; 291.005, subdivision 1; 291.03, subdivision 2.11 1; 295.50, subdivision 9b; 295.53, subdivision 1; 2.12 297A.61, subdivisions 3, 12, 34, by adding 2.13 subdivisions; 297A.665; 297A.67, subdivision 2, by 2.14 adding a subdivision; 297A.68, subdivisions 5, 36, by 2.15 adding a subdivision; 297A.69, subdivisions 2, 3, 4; 2.16 297A.85; 297B.025, subdivisions 1, 2; 297B.035, 2.17 subdivision 1, by adding a subdivision; 297F.01, 2.18 subdivisions 21a, 23; 297F.06, subdivision 4; 297F.20, 2.19 subdivisions 1, 2, 3, 6, 9; 297I.01, subdivision 9; 2.20 297I.20; 325D.421, subdivision 2, by adding a 2.21 subdivision; 352.15, subdivision 1; 353.15, 2.22 subdivision 1; 354.10, subdivision 1; 354B.30; 2.23 354C.165; 469.1731, subdivision 3; 469.1792, 2.24 subdivision 3; 473F.07, subdivision 4; 515B.1-116; 2.25 Laws 1989, chapter 211, section 8, subdivision 2, as 2.26 amended; Laws 1989, chapter 211, section 8, 2.27 subdivision 4, as amended; Laws 2001, First Special 2.28 Session chapter 5, article 3, section 61; Laws 2001, 2.29 First Special Session chapter 5, article 3, section 2.30 63; Laws 2001, First Special Session chapter 5, 2.31 article 9, section 12; Laws 2002, chapter 377, article 2.32 6, section 4; proposing coding for new law in 2.33 Minnesota Statutes, chapters 270; 275; 276; 290C; 2.34 repealing Minnesota Statutes 2002, sections 270.691, 2.35 subdivision 8; 274.04; 290.0671, subdivision 3; 2.36 290.0675, subdivision 5; 294.01; 294.02; 294.021; 2.37 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 2.38 294.11; 294.12; 297A.72, subdivision 1; 297A.97; 2.39 477A.065; Laws 1984, chapter 652, section 2; Laws 2.40 2002, chapter 377, article 9, section 12; Minnesota 2.41 Rules, parts 8007.0300, subpart 3; 8009.7100; 2.42 8009.7200; 8009.7300; 8009.7400; 8092.1000; 8106.0100, 2.43 subparts 11, 15, 16; 8106.0200; 8125.1000, 8125.1300, 2.44 subpart 1; 8125.1400; 8130.0800, subparts 5, 12; 2.45 8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 2.46 3, 4; 8130.4800, subpart 2; 8130.7500, subpart 5; 2.47 8130.8000; 8130.8300. 2.48 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.49 ARTICLE 1 2.50 SALES TAX 2.51 Section 1. Minnesota Statutes 2002, section 168A.03, is 2.52 amended to read: 2.53 168A.03 [EXEMPT VEHICLES.] 2.54 Subdivision 1. The registrar shall not issue a certificate 2.55 of title for: 2.56 (1) a vehicle owned by the United States; 2.57 (2)a vehicle owned by a manufacturer or dealer and held2.58for sale, even though incidentally moved on the highway or used2.59pursuant to section 168.27 or 168.28, or a vehicle used by a3.1manufacturer solely for testing;3.2(3)a vehicle owned by a nonresident and not required by 3.3 law to be registered in this state; 3.4(4)(3) a vehicle owned by a nonresident and regularly 3.5 engaged in the interstate transportation of persons or property 3.6 for which a currently effective certificate of title has been 3.7 issued in another state; 3.8(5)(4) a vehicle moved solely by animal power; 3.9(6)(5) an implement of husbandry; 3.10(7)(6) special mobile equipment; 3.11(8)(7) a self-propelled wheelchair or invalid tricycle; 3.12(9)(8) a trailer (i) having a gross weight of 4,000 pounds 3.13 or less unless a secured party holds an interest in the trailer 3.14 or a certificate of title was previously issued by this state or 3.15 any other state or (ii) designed primarily for agricultural 3.16 purposes except recreational equipment or a manufactured home, 3.17 both as defined in section 168.011, subdivisions 8 and 25; 3.18(10)(9) a snowmobile. 3.19 Subd. 2. [DEALERS.] No certificate of title need be 3.20 obtained for a vehicle owned by a manufacturer or dealer and 3.21 held for sale, even though incidentally moved on the highway or 3.22 used pursuant to section 168.27 or 168.28, or a vehicle used by 3.23 a manufacturer solely for testing. 3.24[EFFECTIVE DATE.] This section is effective for sales made 3.25 after June 30, 2003. 3.26 Sec. 2. Minnesota Statutes 2002, section 297A.61, 3.27 subdivision 3, is amended to read: 3.28 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 3.29 include, but are not limited to, each of the transactions listed 3.30 in this subdivision. 3.31 (b) Sale and purchase include: 3.32 (1) any transfer of title or possession, or both, of 3.33 tangible personal property, whether absolutely or conditionally, 3.34 for a consideration in money or by exchange or barter; and 3.35 (2) the leasing of or the granting of a license to use or 3.36 consume, for a consideration in money or by exchange or barter, 4.1 tangible personal property, other than a manufactured home used 4.2 for residential purposes for a continuous period of 30 days or 4.3 more. 4.4 (c) Sale and purchase include the production, fabrication, 4.5 printing, or processing of tangible personal property for a 4.6 consideration for consumers who furnish either directly or 4.7 indirectly the materials used in the production, fabrication, 4.8 printing, or processing. 4.9 (d) Sale and purchase include the preparing for a 4.10 consideration of food. Notwithstanding section 297A.67, 4.11 subdivision 2, taxable food includes, but is not limited to, the 4.12 following: 4.13 (1) prepared food sold by the retailer; 4.14 (2) soft drinks; 4.15 (3) candy; and 4.16 (4) all food sold through vending machines. 4.17 (e) A sale and a purchase includes the furnishing for a 4.18 consideration of electricity, gas, water, or steam for use or 4.19 consumption within this state. 4.20 (f) A sale and a purchase includes the transfer for a 4.21 consideration of computer software. 4.22 (g) A sale and a purchase includes the furnishing for a 4.23 consideration of the following services: 4.24 (1) the privilege of admission to places of amusement, 4.25 recreational areas, or athletic events, and the making available 4.26 of amusement devices, tanning facilities, reducing salons, steam 4.27 baths, turkish baths, health clubs, and spas or athletic 4.28 facilities; 4.29 (2) lodging and related services by a hotel, rooming house, 4.30 resort, campground, motel, or trailer camp and the granting of 4.31 any similar license to use real property other than the renting 4.32 or leasing of it for a continuous period of 30 days or more; 4.33 (3) parking services, whether on a contractual, hourly, or 4.34 other periodic basis, except for parking at a meter; 4.35 (4) the granting of membership in a club, association, or 4.36 other organization if: 5.1 (i) the club, association, or other organization makes 5.2 available for the use of its members sports and athletic 5.3 facilities, without regard to whether a separate charge is 5.4 assessed for use of the facilities; and 5.5 (ii) use of the sports and athletic facility is not made 5.6 available to the general public on the same basis as it is made 5.7 available to members. 5.8 Granting of membership means both onetime initiation fees and 5.9 periodic membership dues. Sports and athletic facilities 5.10 include golf courses; tennis, racquetball, handball, and squash 5.11 courts; basketball and volleyball facilities; running tracks; 5.12 exercise equipment; swimming pools; and other similar athletic 5.13 or sports facilities; 5.14 (5) delivery of aggregate materials and concrete block by a 5.15 third party if the delivery would be subject to the sales tax if 5.16 provided by the seller of the aggregate material or concrete 5.17 block; and 5.18 (6) services as provided in this clause: 5.19 (i) laundry and dry cleaning services including cleaning, 5.20 pressing, repairing, altering, and storing clothes, linen 5.21 services and supply, cleaning and blocking hats, and carpet, 5.22 drapery, upholstery, and industrial cleaning. Laundry and dry 5.23 cleaning services do not include services provided by coin 5.24 operated facilities operated by the customer; 5.25 (ii) motor vehicle washing, waxing, and cleaning services, 5.26 including services provided by coin operated facilities operated 5.27 by the customer, and rustproofing, undercoating, and towing of 5.28 motor vehicles; 5.29 (iii) building and residential cleaning, maintenance, and 5.30 disinfecting and exterminating services; 5.31 (iv) detective, security, burglar, fire alarm, and armored 5.32 car services; but not including services performed within the 5.33 jurisdiction they serve by off-duty licensed peace officers as 5.34 defined in section 626.84, subdivision 1, or services provided 5.35 by a nonprofit organization for monitoring and electronic 5.36 surveillance of persons placed on in-home detention pursuant to 6.1 court order or under the direction of the Minnesota department 6.2 of corrections; 6.3 (v) pet grooming services; 6.4 (vi) lawn care, fertilizing, mowing, spraying and sprigging 6.5 services; garden planting and maintenance; tree, bush, and shrub 6.6 pruning, bracing, spraying, and surgery; indoor plant care; 6.7 tree, bush, shrub, and stump removal; and tree trimming for 6.8 public utility lines. Services performed under a construction 6.9 contract for the installation of shrubbery, plants, sod, trees, 6.10 bushes, and similar items are not taxable; 6.11 (vii) massages, except when provided by a licensed health 6.12 care facility or professional or upon written referral from a 6.13 licensed health care facility or professional for treatment of 6.14 illness, injury, or disease; and 6.15 (viii) the furnishing of lodging, board, and care services 6.16 for animals in kennels and other similar arrangements, but 6.17 excluding veterinary and horse boarding services. 6.18 In applying the provisions of this chapter, the terms 6.19 "tangible personal property" and "sales at retail" include 6.20 taxable services and the provision of taxable services, unless 6.21 specifically provided otherwise. Services performed by an 6.22 employee for an employer are not taxable. Services performed by 6.23 a partnership or association for another partnership or 6.24 association are not taxable if one of the entities owns or 6.25 controls more than 80 percent of the voting power of the equity 6.26 interest in the other entity. Services performed between 6.27 members of an affiliated group of corporations are not taxable. 6.28 For purposes of this section, "affiliated group of corporations" 6.29 includes those entities that would be classified as members of 6.30 an affiliated group under United States Code, title 26, section 6.31 1504, and that are eligible to file a consolidated tax return 6.32 for federal income tax purposes. 6.33 (h) A sale and a purchase includes the furnishing for a 6.34 consideration of tangible personal property or taxable services 6.35 by the United States or any of its agencies or 6.36 instrumentalities, or the state of Minnesota, its agencies, 7.1 instrumentalities, or political subdivisions. 7.2 (i) A sale and a purchase includes the furnishing for a 7.3 consideration of telecommunications services, including cable 7.4 television services and direct satellite services. 7.5 Telecommunications services are taxed to the extent allowed 7.6 under federal law if those services: 7.7 (1) either (i) originate and terminate in this state; or 7.8 (ii) originate in this state and terminate outside the state and 7.9 the service is charged to a telephone number customer located in 7.10 this state or to the account of any transmission instrument in 7.11 this state; or (iii) originate outside this state and terminate 7.12 in this state and the service is charged to a telephone number 7.13 customer located in this state or to the account of any 7.14 transmission instrument in this state; or 7.15 (2) are rendered by providing a private communications 7.16 service for which the customer has one or more locations within 7.17 Minnesota connected to the service and the service is charged to 7.18 a telephone number customer located in this state or to the 7.19 account of any transmission instrument in this state. 7.20 All charges for mobile telecommunications services, as 7.21 defined in United States Code, title 4, section 124, are deemed 7.22 to be provided by the customer's home service provider and 7.23 sourced to the customer's place of primary use and are subject 7.24 to tax based upon the customer's place of primary use in 7.25 accordance with the Mobile Telecommunications Sourcing Act, 7.26 United States Code, title 4, sections 116 to 126. All other 7.27 definitions and provisions of the Mobile Telecommunications 7.28 Sourcing Act as provided in United States Code, title 4, are 7.29 hereby adopted. 7.30 (j) A sale and a purchase includes the furnishing for a 7.31 consideration of installation if the installation charges would 7.32 be subject to the sales tax if the installation were provided by 7.33 the seller of the item being installed. 7.34 (k) A sale and a purchase includes the rental of a vehicle 7.35 by a motor vehicle dealer to a customer when (1) the vehicle is 7.36 rented by the customer for a consideration, or (2) the motor 8.1 vehicle dealer is reimbursed pursuant to a service contract as 8.2 defined in section 65B.29, subdivision 1, clause (1). 8.3[EFFECTIVE DATE.] This section is effective for sales and 8.4 purchases made on or after July 1, 2003. 8.5 Sec. 3. Minnesota Statutes 2002, section 297A.61, is 8.6 amended by adding a subdivision to read: 8.7 Subd. 35. [DIRECT MAIL.] "Direct mail" means printed 8.8 material delivered or distributed by United States Mail or other 8.9 delivery service to a mass audience or to addressees on a 8.10 mailing list provided by the purchaser or at the direction of 8.11 the purchaser when the cost of the items is not billed directly 8.12 to the recipients. "Direct mail" includes tangible personal 8.13 property supplied directly or indirectly by the purchaser to the 8.14 direct mail seller for inclusion in the package containing the 8.15 printed material. "Direct mail" does not include multiple items 8.16 of printed material delivered to a single address. 8.17[EFFECTIVE DATE.] This section is effective for sales and 8.18 purchases made on or after January 1, 2004. 8.19 Sec. 4. Minnesota Statutes 2002, section 297A.67, is 8.20 amended by adding a subdivision to read: 8.21 Subd. 31. [SERVICE LOANER VEHICLE COVERED BY 8.22 WARRANTY.] The loan of a vehicle by a motor vehicle dealer to a 8.23 customer as a replacement for a vehicle being serviced or 8.24 repaired is exempt if the vehicle is loaned pursuant to a 8.25 warranty included in the original purchase price of the vehicle 8.26 being serviced or repaired. 8.27[EFFECTIVE DATE.] This section is effective for vehicle 8.28 loans made after June 30, 2003. 8.29 Sec. 5. Minnesota Statutes 2002, section 297A.68, 8.30 subdivision 36, is amended to read: 8.31 Subd. 36. [DELIVERY OR DISTRIBUTION CHARGES;PRINTED8.32MATERIALSDIRECT MAIL.] Charges for the delivery or distribution 8.33 ofprinted materials, including individual account8.34information,direct mail are exempt if(1)the charges are 8.35 separately stated, (2) the delivery or distribution is to a mass8.36audience or to a mailing list provided at the direction of the9.1customer, and (3) the cost of the materials is not billed9.2directly to the recipientson an invoice or similar billing 9.3 document given to the purchaser. 9.4[EFFECTIVE DATE.] This section is effective for purchases 9.5 and sales made on or after January 1, 2004. 9.6 Sec. 6. Minnesota Statutes 2002, section 297B.035, is 9.7 amended by adding a subdivision to read: 9.8 Subd. 5. [USE BY DEALER.] If a motor vehicle dealer uses a 9.9 vehicle, purchased for resale in the ordinary course of 9.10 business, other than for demonstration purposes, the dealer may 9.11 elect to pay the motor vehicle sales tax under this chapter or 9.12 the use tax under chapter 297A based on the reasonable rental 9.13 value of the vehicle. If the motor vehicle dealer fails to 9.14 report the use tax under chapter 297A, it is presumed that the 9.15 dealer elected to pay the motor vehicle sales tax under this 9.16 chapter. 9.17[EFFECTIVE DATE.] This section is effective for sales made 9.18 after June 30, 2003. 9.19 Sec. 7. [CITY OF NEWPORT; LODGING TAX.] 9.20 Subdivision 1. [LODGING TAX.] Notwithstanding Minnesota 9.21 Statutes, section 477A.016, or any ordinance, city charter, or 9.22 other provision of law, the city of Newport may, by ordinance, 9.23 impose a tax of up to four percent upon the gross receipts from 9.24 the sale of lodging for periods of less than 30 days in hotels 9.25 and motels located in the city. The tax does not apply to the 9.26 furnishing of lodging by a business having less than 25 lodging 9.27 rooms. The total amount of taxes imposed under this section and 9.28 under Minnesota Statutes, section 469.190, shall not exceed four 9.29 percent. 9.30 Subd. 2. [USE OF PROCEEDS.] The proceeds of any tax 9.31 imposed in subdivision 1 shall be used by the city to fund 9.32 economic development and redevelopment of the city. Authorized 9.33 expenses include, but are not limited to, acquisition and 9.34 development costs of open space, parks, and trails. 9.35 Subd. 3. [ENFORCEMENT, COLLECTION, AND 9.36 ADMINISTRATION.] The tax shall be collected and administered in 10.1 the same manner as local lodging taxes under Minnesota Statutes, 10.2 section 469.190. 10.3[EFFECTIVE DATE.] This section is effective upon approval 10.4 by the Newport city council and compliance with Minnesota 10.5 Statutes, section 645.021, subdivision 3. 10.6 Sec. 8. [REPEALER.] 10.7 Laws 2002, chapter 377, article 9, section 12, the 10.8 effective date, is repealed effective for sales and purchases 10.9 made on or after January 1, 2004. 10.10 ARTICLE 2 10.11 PROPERTY TAX 10.12 Section 1. Minnesota Statutes 2002, section 216B.2424, 10.13 subdivision 5, is amended to read: 10.14 Subd. 5. [MANDATE.] (a) A public utility, as defined in 10.15 section 216B.02, subdivision 4, that operates a nuclear-powered 10.16 electric generating plant within this state must construct and 10.17 operate, purchase, or contract to construct and operate (1) by 10.18 December 31, 1998, 50 megawatts of electric energy installed 10.19 capacity generated by farm-grown closed-loop biomass scheduled 10.20 to be operational by December 31, 2001; and (2) by December 31, 10.21 1998, an additional 75 megawatts of installed capacity so 10.22 generated scheduled to be operational by December 31, 2002. 10.23 (b) Of the 125 megawatts of biomass electricity installed 10.24 capacity required under this subdivision, no more than 50 10.25 megawatts of this capacity may be provided by a facility that 10.26 uses poultry litter as its primary fuel source and any such 10.27 facility: 10.28 (1) need not use biomass that complies with the definition 10.29 in subdivision 1; 10.30 (2) must enter into a contract with the public utility for 10.31 such capacity, that has an average purchase price per megawatt 10.32 hour over the life of the contract that is equal to or less than 10.33 the average purchase price per megawatt hour over the life of 10.34 the contract in contracts approved by the public utilities 10.35 commission before April 1, 2000, to satisfy the mandate of this 10.36 section, and file that contract with the public utilities 11.1 commission prior to September 1, 2000; and 11.2 (3) must schedule such capacity to be operational by 11.3 December 31, 2002. 11.4 (c) Of the total 125 megawatts of biomass electric energy 11.5 installed capacity required under this section, no more than 75 11.6 megawatts may be provided by a single project. 11.7 (d) Of the 75 megawatts of biomass electric energy 11.8 installed capacity required under paragraph (a), clause (2), no 11.9 more than 25 megawatts of this capacity may be provided by a St. 11.10 Paul district heating and cooling system cogeneration facility 11.11 utilizing waste wood as a primary fuel source. The St. Paul 11.12 district heating and cooling system cogeneration facility need 11.13 not use biomass that complies with the definition in subdivision 11.14 1. 11.15 (e) The public utility must accept and consider on an equal 11.16 basis with other biomass proposals: 11.17 (1) a proposal to satisfy the requirements of this section 11.18 that includes a project that exceeds the megawatt capacity 11.19 requirements of either paragraph (a), clause (1) or (2), and 11.20 that proposes to sell the excess capacity to the public utility 11.21 or to other purchasers; and 11.22 (2) a proposal for a new facility to satisfy more than ten 11.23 but not more than 20 megawatts of the electrical generation 11.24 requirements by a small business-sponsored independent power 11.25 producer facility to be located within the northern quarter of 11.26 the state, which means the area located north of Constitutional 11.27 Route No. 8 as described in section 161.114, subdivision 2, and 11.28 that utilizes biomass residue wood, sawdust, bark, chipped wood, 11.29 or brush to generate electricity. A facility described in this 11.30 clause is not required to utilize biomass complying with the 11.31 definition in subdivision 1, but musthave the capacity required11.32by this clause operationalbe under construction by December 31, 11.3320022005. 11.34 (f) If a public utility files a contract with the 11.35 commission for electric energy installed capacity that uses 11.36 poultry litter as its primary fuel source, the commission must 12.1 do a preliminary review of the contract to determine if it meets 12.2 the purchase price criteria provided in paragraph (b), clause 12.3 (2), of this subdivision. The commission shall perform its 12.4 review and advise the parties of its determination within 30 12.5 days of filing of such a contract by a public utility. A public 12.6 utility may submit by September 1, 2000, a revised contract to 12.7 address the commission's preliminary determination. 12.8 (g) The commission shall finally approve, modify, or 12.9 disapprove no later than July 1, 2001, all contracts submitted 12.10 by a public utility as of September 1, 2000, to meet the mandate 12.11 set forth in this subdivision. 12.12 (h) If a public utility subject to this section exercises 12.13 an option to increase the generating capacity of a project in a 12.14 contract approved by the commission prior to April 25, 2000, to 12.15 satisfy the mandate in this subdivision, the public utility must 12.16 notify the commission by September 1, 2000, that it has 12.17 exercised the option and include in the notice the amount of 12.18 additional megawatts to be generated under the option 12.19 exercised. Any review by the commission of the project after 12.20 exercise of such an option shall be based on the same criteria 12.21 used to review the existing contract. 12.22 (i) A facility specified in this subdivision qualifies for 12.23 exemption from property taxation under section 272.02, 12.24 subdivision 43. 12.25[EFFECTIVE DATE.] This section is effective the day 12.26 following final enactment. 12.27 Sec. 2. Minnesota Statutes 2002, section 270B.12, is 12.28 amended by adding a subdivision to read: 12.29 Subd. 13. [COUNTY ASSESSORS; CLASS 1B HOMESTEADS.] The 12.30 commissioner may disclose to a county assessor, and to the 12.31 assessor's designated agents or employees, a listing of parcels 12.32 of property qualifying for the class 1b property tax 12.33 classification under section 273.13, subdivision 22. 12.34[EFFECTIVE DATE.] This section is effective the day 12.35 following final enactment. 12.36 Sec. 3. Minnesota Statutes 2002, section 272.02, 13.1 subdivision 31, is amended to read: 13.2 Subd. 31. [BUSINESS INCUBATOR PROPERTY.] Property owned by 13.3 a nonprofit charitable organization that qualifies for tax 13.4 exemption under section 501(c)(3) of the Internal Revenue Code 13.5 of 1986, as amended through December 31, 1997, that is intended 13.6 to be used as a business incubator in a high-unemployment 13.7 county, is exempt. As used in this subdivision, a "business 13.8 incubator" is a facility used for the development of nonretail 13.9 businesses, offering access to equipment, space, services, and 13.10 advice to the tenant businesses, for the purpose of encouraging 13.11 economic development, diversification, and job creation in the 13.12 area served by the organization, and "high-unemployment county" 13.13 is a county that had an average annual unemployment rate of 7.9 13.14 percent or greater in 1997. Property that qualifies for the 13.15 exemption under this subdivision is limited to no more than two 13.16 contiguous parcels and structures that do not exceed in the 13.17 aggregate 40,000 square feet. This exemption expires after 13.18 taxes payable in20052011. 13.19 Sec. 4. Minnesota Statutes 2002, section 272.02, 13.20 subdivision 47, is amended to read: 13.21 Subd. 47. [POULTRY LITTER BIOMASS GENERATION FACILITY; 13.22 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 13.23 attached machinery and other personal property which is part of 13.24 an electrical generating facility that meets the requirements of 13.25 this subdivision is exempt. At the time of construction, the 13.26 facility must: 13.27 (1) be designed to utilize poultry litter as a primary fuel 13.28 source; and 13.29 (2) be constructed for the purpose of generating power at 13.30 the facility that will be sold pursuant to a contract approved 13.31 by the public utilities commission in accordance with the 13.32 biomass mandate imposed under section 216B.2424. 13.33 Construction of the facility must be commenced after 13.34 January 1,20002003, and before December 31,20022003. 13.35 Property eligible for this exemption does not include electric 13.36 transmission lines and interconnections or gas pipelines and 14.1 interconnections appurtenant to the property or the facility. 14.2[EFFECTIVE DATE.] This section is effective for taxes 14.3 levied in 2004, payable in 2005, and thereafter. 14.4 Sec. 5. Minnesota Statutes 2002, section 272.02, 14.5 subdivision 53, is amended to read: 14.6 Subd. 53. [ELECTRIC GENERATION FACILITY; PERSONAL 14.7 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 14.8 machinery and other personal property which is part of a 3.2 14.9 megawatt run-of-the-river hydroelectric generation facility and 14.10 that meets the requirements of this subdivision is exempt. At 14.11 the time of construction, the facility must: 14.12 (1) utilize two turbine generators at a dam site existing 14.13 on March 31, 1994; 14.14 (2) be located on publicly owned land and within 1,500 feet 14.15 of a 13.8 kilovolt distribution substation; and 14.16 (3) be eligible to receive a renewable energy production 14.17 incentive payment under section 216C.41. 14.18 Construction of the facility must be commenced after 14.19 January 1, 2002, and before January 1,20042005. Property 14.20 eligible for this exemption does not include electric 14.21 transmission lines and interconnections or gas pipelines and 14.22 interconnections appurtenant to the property or the facility. 14.23 Sec. 6. Minnesota Statutes 2002, section 272.02, is 14.24 amended by adding a subdivision to read: 14.25 Subd. 56. [ELECTRIC GENERATION FACILITY; PERSONAL 14.26 PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 14.27 attached machinery and other personal property which is part of 14.28 a combined-cycle combustion-turbine electric generation facility 14.29 that exceeds 550 megawatts of installed capacity and that meets 14.30 the requirements of this subdivision is exempt. At the time of 14.31 construction, the facility must: 14.32 (1) be designed to utilize natural gas as a primary fuel; 14.33 (2) not be owned by a public utility as defined in section 14.34 216B.02, subdivision 4; 14.35 (3) be located within five miles of an existing natural gas 14.36 pipeline and within four miles of an existing electrical 15.1 transmission substation; 15.2 (4) be located outside the metropolitan area as defined 15.3 under section 473.121, subdivision 2; and 15.4 (5) be designed to provide energy and ancillary services 15.5 and have received a certificate of need under section 216B.243. 15.6 (b) Construction of the facility must be commenced after 15.7 January 1, 2004, and before January 1, 2007. Property eligible 15.8 for this exemption does not include electric transmission lines 15.9 and interconnections or gas pipelines and interconnections 15.10 appurtenant to the property or the facility. 15.11[EFFECTIVE DATE.] This section is effective for assessment 15.12 year 2005, taxes payable in 2006, and thereafter. 15.13 Sec. 7. Minnesota Statutes 2002, section 272.02, is 15.14 amended by adding a subdivision to read: 15.15 Subd. 57. [ELECTRIC GENERATION FACILITY; PERSONAL 15.16 PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 15.17 attached machinery and other personal property which is part of 15.18 a combined-cycle combustion-turbine electric generation facility 15.19 that exceeds 150 megawatts of installed capacity and that meets 15.20 the requirements of this subdivision is exempt. At the time of 15.21 construction, the facility must: 15.22 (1) utilize natural gas as a primary fuel; 15.23 (2) be owned by an electric generation and transmission 15.24 cooperative; 15.25 (3) be located within ten miles of parallel existing 15.26 24-inch and 30-inch natural gas pipelines and a 345-kilovolt 15.27 high-voltage electric transmission line; 15.28 (4) be designed to provide intermediate energy and 15.29 ancillary services, and have received a certificate of need 15.30 under section 216B.243, demonstrating demand for its capacity; 15.31 and 15.32 (5) have received by resolution, the approval from the 15.33 governing body of the county and city in which the proposed 15.34 facility is to be located for the exemption of personal property 15.35 under this subdivision. 15.36 (b) Construction of the facility must be commenced after 16.1 January 1, 2004, and before January 1, 2009. Property eligible 16.2 for this exemption does not include electric transmission lines 16.3 and interconnections or gas pipelines and interconnections 16.4 appurtenant to the property or the facility. 16.5 (c) The exemption under this section will take effect only 16.6 if the owner of the facility enters into agreements with the 16.7 governing bodies of the county and the city in which the 16.8 facility is located. The agreements may include a requirement 16.9 that the facility must pay a host fee to compensate the county 16.10 and city for hosting the facility. 16.11[EFFECTIVE DATE.] This section is effective for assessment 16.12 year 2005, taxes payable in 2006, and thereafter. 16.13 Sec. 8. Minnesota Statutes 2002, section 273.01, is 16.14 amended to read: 16.15 273.01 [LISTING AND ASSESSMENT, TIME.] 16.16 All real property subject to taxation shall be listed and 16.17 at leastone-fourthone-fifth of the parcels listed shall be 16.18 appraised each year with reference to their value on January 2 16.19 preceding the assessment so that each parcel shall be 16.20 reappraised at maximum intervals offourfive years. All real 16.21 property becoming taxable in any year shall be listed with 16.22 reference to its value on January 2 of that year. Except as 16.23 provided in this section and section 274.01, subdivision 1, all 16.24 real property assessments shall be completed two weeks prior to 16.25 the date scheduled for the local board of review or 16.26 equalization. No changes in valuation or classification which 16.27 are intended to correct errors in judgment by the county 16.28 assessor may be made by the county assessor after the board of 16.29 review or the county board of equalization has adjourned; 16.30 however, corrections of errors that are merely clerical in 16.31 nature or changes that extend homestead treatment to property 16.32 are permitted after adjournment until the tax extension date for 16.33 that assessment year. Any changes made by the assessor after 16.34 adjournment must be fully documented and maintained in a file in 16.35 the assessor's office and shall be available for review by any 16.36 person. A copy of any changes made during this period shall be 17.1 sent to the county board no later than December 31 of the 17.2 assessment year. In the event a valuation and classification is 17.3 not placed on any real property by the dates scheduled for the 17.4 local board of review or equalization the valuation and 17.5 classification determined in the preceding assessment shall be 17.6 continued in effect and the provisions of section 273.13 shall, 17.7 in such case, not be applicable, except with respect to real 17.8 estate which has been constructed since the previous 17.9 assessment. Real property containing iron ore, the fee to which 17.10 is owned by the state of Minnesota, shall, if leased by the 17.11 state after January 2 in any year, be subject to assessment for 17.12 that year on the value of any iron ore removed under said lease 17.13 prior to January 2 of the following year. Personal property 17.14 subject to taxation shall be listed and assessed annually with 17.15 reference to its value on January 2; and, if acquired on that 17.16 day, shall be listed by or for the person acquiring it. 17.17[EFFECTIVE DATE.] This section is effective for assessments 17.18 on or after January 2, 2004. 17.19 Sec. 9. Minnesota Statutes 2002, section 273.08, is 17.20 amended to read: 17.21 273.08 [ASSESSOR'S DUTIES.] 17.22 The assessor shall actually view, and determine the market 17.23 value of each tract or lot of real property listed for taxation, 17.24 including the value of all improvements and structures thereon, 17.25 at maximum intervals offourfive years and shall enter the 17.26 value opposite each description. 17.27[EFFECTIVE DATE.] This section is effective for assessments 17.28 on or after January 2, 2004. 17.29 Sec. 10. Minnesota Statutes 2002, section 273.13, 17.30 subdivision 22, is amended to read: 17.31 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 17.32 23 and in paragraphs (b) and (c), real estate which is 17.33 residential and used for homestead purposes is class 1a. In the 17.34 case of a duplex or triplex in which one of the units is used 17.35 for homestead purposes, the entire property is deemed to be used 17.36 for homestead purposes. The market value of class 1a property 18.1 must be determined based upon the value of the house, garage, 18.2 and land. 18.3 The first $500,000 of market value of class 1a property has 18.4 a net class rate of one percent of its market value; and the 18.5 market value of class 1a property that exceeds $500,000 has a 18.6 class rate of 1.25 percent of its market value. 18.7 (b) Class 1b property includes homestead real estate or 18.8 homestead manufactured homes used for the purposes of a 18.9 homestead by 18.10 (1) any blind person, or the blind person and the blind 18.11 person's spouse; or 18.12 (2) any person, hereinafter referred to as "veteran," who: 18.13 (i) served in the active military or naval service of the 18.14 United States; and 18.15 (ii) is entitled to compensation under the laws and 18.16 regulations of the United States for permanent and total 18.17 service-connected disability due to the loss, or loss of use, by 18.18 reason of amputation, ankylosis, progressive muscular 18.19 dystrophies, or paralysis, of both lower extremities, such as to 18.20 preclude motion without the aid of braces, crutches, canes, or a 18.21 wheelchair; and 18.22 (iii) has acquired a special housing unit with special 18.23 fixtures or movable facilities made necessary by the nature of 18.24 the veteran's disability, or the surviving spouse of the 18.25 deceased veteran for as long as the surviving spouse retains the 18.26 special housing unit as a homestead; or 18.27 (3) any person who: 18.28 (i) is permanently and totally disabled and 18.29 (ii) receives 90 percent or more of total household income, 18.30 as defined in section 290A.03, subdivision 5, from 18.31 (A) aid from any state as a result of that disability; or 18.32 (B) supplemental security income for the disabled; or 18.33 (C) workers' compensation based on a finding of total and 18.34 permanent disability; or 18.35 (D) social security disability, including the amount of a 18.36 disability insurance benefit which is converted to an old age 19.1 insurance benefit and any subsequent cost of living increases; 19.2 or 19.3 (E) aid under the federal Railroad Retirement Act of 1937, 19.4 United States Code Annotated, title 45, section 228b(a)5; or 19.5 (F) a pension from any local government retirement fund 19.6 located in the state of Minnesota as a result of that 19.7 disability; or 19.8 (G) pension, annuity, or other income paid as a result of 19.9 that disability from a private pension or disability plan, 19.10 including employer, employee, union, and insurance plans and 19.11 (iii) has household income as defined in section 290A.03, 19.12 subdivision 5, of $50,000 or less; or 19.13 (4) any person who is permanently and totally disabled and 19.14 whose household income as defined in section 290A.03, 19.15 subdivision 5, is 275 percent or less of the federal poverty 19.16 level. 19.17 Property is classified and assessed under clause (4) only 19.18 if the government agency or income-providing source certifies, 19.19 upon the request of the homestead occupant, that the homestead 19.20 occupant satisfies the disability requirements of this paragraph. 19.21 Property is classified and assessed pursuant to clause (1) 19.22 only if the commissioner ofeconomic securityrevenue certifies 19.23 to the assessor that the homestead occupant satisfies the 19.24 requirements of this paragraph. Once the initial application is 19.25 made and approved by the commissioner, no further applications 19.26 are required, unless the property is sold, there is a change in 19.27 occupancy, or the occupant's vision changes. Failure to notify 19.28 the commissioner within 60 days that the property no longer 19.29 qualifies shall result in a penalty provided under section 19.30 273.124, subdivision 13, computed on the basis of the class 1b 19.31 benefits for the property, and the property shall lose its 19.32 current class 1b classification. If the commissioner determines 19.33 that the homestead occupant no longer satisfies the requirements 19.34 of this paragraph, the commissioner shall notify the county 19.35 assessor. 19.36 Permanently and totally disabled for the purpose of this 20.1 subdivision means a condition which is permanent in nature and 20.2 totally incapacitates the person from working at an occupation 20.3 which brings the person an income. The first $32,000 market 20.4 value of class 1b property has a net class rate of .45 percent 20.5 of its market value. The remaining market value of class 1b 20.6 property has a class rate using the rates for class 1a or class 20.7 2a property, whichever is appropriate, of similar market value. 20.8 (c) Class 1c property is commercial use real property that 20.9 abuts a lakeshore line and is devoted to temporary and seasonal 20.10 residential occupancy for recreational purposes but not devoted 20.11 to commercial purposes for more than 250 days in the year 20.12 preceding the year of assessment, and that includes a portion 20.13 used as a homestead by the owner, which includes a dwelling 20.14 occupied as a homestead by a shareholder of a corporation that 20.15 owns the resortor, a partner in a partnership that owns the 20.16 resort, or a member of a limited liability company that owns the 20.17 resort even if the title to the homestead is held by the 20.18 corporationor, partnership, or limited liability company. For 20.19 purposes of this clause, property is devoted to a commercial 20.20 purpose on a specific day if any portion of the property, 20.21 excluding the portion used exclusively as a homestead, is used 20.22 for residential occupancy and a fee is charged for residential 20.23 occupancy. The first $500,000 of market value of class 1c 20.24 property has a class rate of one percent, and the remaining 20.25 market value of class 1c property has a class rate of one 20.26 percent, with the following limitation: the area of the 20.27 property must not exceed 100 feet of lakeshore footage for each 20.28 cabin or campsite located on the property up to a total of 800 20.29 feet and 500 feet in depth, measured away from the lakeshore. 20.30 If any portion of the class 1c resort property is classified as 20.31 class 4c under subdivision 25, the entire property must meet the 20.32 requirements of subdivision 25, paragraph (d), clause (1), to 20.33 qualify for class 1c treatment under this paragraph. 20.34 (d) Class 1d property includes structures that meet all of 20.35 the following criteria: 20.36 (1) the structure is located on property that is classified 21.1 as agricultural property under section 273.13, subdivision 23; 21.2 (2) the structure is occupied exclusively by seasonal farm 21.3 workers during the time when they work on that farm, and the 21.4 occupants are not charged rent for the privilege of occupying 21.5 the property, provided that use of the structure for storage of 21.6 farm equipment and produce does not disqualify the property from 21.7 classification under this paragraph; 21.8 (3) the structure meets all applicable health and safety 21.9 requirements for the appropriate season; and 21.10 (4) the structure is not salable as residential property 21.11 because it does not comply with local ordinances relating to 21.12 location in relation to streets or roads. 21.13 The market value of class 1d property has the same class 21.14 rates as class 1a property under paragraph (a). 21.15[EFFECTIVE DATE.] Paragraph (b) of this section is 21.16 effective for taxes payable in 2005 and thereafter. 21.17 Paragraph (c) of this section is effective for taxes 21.18 payable in 2004 and thereafter. 21.19 Sec. 11. [275.75] [CHARTER EXEMPTION FOR AID LOSS.] 21.20 Notwithstanding any other provision of a municipal charter 21.21 which limits ad valorem taxes to a lesser amount, or which would 21.22 require voter approval for any increase, a municipality may 21.23 increase its levy in any payable year by an amount equal to the 21.24 reduction in the amount of aid it is certified to receive under 21.25 sections 477A.011 to 477A.03 for that same payable year compared 21.26 to the amount certified in the previous year. The levy increase 21.27 is a permanent increase in the municipality's levy authority. 21.28[EFFECTIVE DATE.] This section is effective for aids levied 21.29 in calendar year 2003, payable in 2004, and thereafter. 21.30 Sec. 12. Minnesota Statutes 2002, section 278.01, 21.31 subdivision 4, is amended to read: 21.32 Subd. 4. [FILING OF APPEAL DEADLINE; EXCEPTION.] 21.33 Notwithstanding theMarch 31April 30 date in subdivision 1, 21.34 whenever the exempt status, valuation, or classification of real 21.35 or personal property is changed other than by an abatement or a 21.36 court decision, and the owner responsible for payment of the tax 22.1 is not given notice of the change until afterJanuary 3122.2 February 28 of the year the tax is payable or after July 1 in 22.3 the case of property subject to section 273.125, subdivision 4, 22.4 an eligible petitioner, as defined and limited in subdivision 1, 22.5 has 60 days from the date of mailing of the notice to initiate 22.6 an appeal of the property's exempt status, classification, or 22.7 valuation change under this chapter. 22.8[EFFECTIVE DATE.] This section is effective for taxes 22.9 payable in 2003 and thereafter. 22.10 Sec. 13. Minnesota Statutes 2002, section 290A.03, 22.11 subdivision 8, is amended to read: 22.12 Subd. 8. [CLAIMANT.] (a) "Claimant" means a person, other 22.13 than a dependent, as defined under sections 151 and 152 of the 22.14 Internal Revenue Code disregarding section 152(b)(3) of the 22.15 Internal Revenue Code, who filed a claim authorized by this 22.16 chapter and who was a resident of this state as provided in 22.17 chapter 290 during the calendar year for which the claim for 22.18 relief was filed. 22.19 (b) In the case of a claim relating to rent constituting 22.20 property taxes, the claimant shall have resided in a rented or 22.21 leased unit on which ad valorem taxes or payments made in lieu 22.22 of ad valorem taxes, including payments of special assessments 22.23 imposed in lieu of ad valorem taxes, are payable at some time 22.24 during the calendar year covered by the claim. 22.25 (c) "Claimant" shall not include a resident of a nursing 22.26 home, intermediate care facility,orlong-term residential 22.27 facility, or a facility that accepts group residential housing 22.28 payments whose rent constituting property taxes is paid pursuant 22.29 to the supplemental security income program under title XVI of 22.30 the Social Security Act, the Minnesota supplemental aid program 22.31 under sections 256D.35 to 256D.54, the medical assistance 22.32 program pursuant to title XIX of the Social Security Act,orthe 22.33 general assistance medical care program pursuant to section 22.34 256D.03, subdivision 3, or the group residential housing program 22.35 under chapter 256I. 22.36 If only a portion of the rent constituting property taxes is 23.1 paid by these programs, the resident shall be a claimant for 23.2 purposes of this chapter, but the refund calculated pursuant to 23.3 section 290A.04 shall be multiplied by a fraction, the numerator 23.4 of which is income as defined in subdivision 3, paragraphs (1) 23.5 and (2), reduced by the total amount of income from the above 23.6 sources other than vendor payments under the medical assistance 23.7 program or the general assistance medical care program and the 23.8 denominator of which is income as defined in subdivision 3, 23.9 paragraphs (1) and (2), plus vendor payments under the medical 23.10 assistance program or the general assistance medical care 23.11 program, to determine the allowable refund pursuant to this 23.12 chapter. 23.13 (d) Notwithstanding paragraph (c), if the claimant was a 23.14 resident of the nursing home, intermediate care facilityor, 23.15 long-term residential facility, or facility for which the rent 23.16 was paid for the claimant by the group residential housing 23.17 program for only a portion of the calendar year covered by the 23.18 claim, the claimant may compute rent constituting property taxes 23.19 by disregarding the rent constituting property taxes from the 23.20 nursing home, intermediate care facility,orlong-term23.21residentialfacility and use only that amount of rent 23.22 constituting property taxes or property taxes payable relating 23.23 to that portion of the year when the claimant was not in the 23.24 facility. The claimant's household income is the income for the 23.25 entire calendar year covered by the claim. 23.26 (e) In the case of a claim for rent constituting property 23.27 taxes of a part-year Minnesota resident, the income and rental 23.28 reflected in this computation shall be for the period of 23.29 Minnesota residency only. Any rental expenses paid which may be 23.30 reflected in arriving at federal adjusted gross income cannot be 23.31 utilized for this computation. When two individuals of a 23.32 household are able to meet the qualifications for a claimant, 23.33 they may determine among them as to who the claimant shall be. 23.34 If they are unable to agree, the matter shall be referred to the 23.35 commissioner of revenue whose decision shall be final. If a 23.36 homestead property owner was a part-year Minnesota resident, the 24.1 income reflected in the computation made pursuant to section 24.2 290A.04 shall be for the entire calendar year, including income 24.3 not assignable to Minnesota. 24.4 (f) If a homestead is occupied by two or more renters, who 24.5 are not husband and wife, the rent shall be deemed to be paid 24.6 equally by each, and separate claims shall be filed by each. 24.7 The income of each shall be each renter's household income for 24.8 purposes of computing the amount of credit to be allowed. 24.9[EFFECTIVE DATE.] This section is effective for claims 24.10 based on rent paid in 2003 and thereafter. 24.11 Sec. 14. Laws 1989, chapter 211, section 8, subdivision 2, 24.12 as amended by Laws 2002, chapter 390, section 24, is amended to 24.13 read: 24.14 Subd. 2. [OPERATION OF DISTRICT.] (a) A hospital district 24.15 created under this section shall be subject to Minnesota 24.16 Statutes, sections 447.32, except subdivision 1, to 447.41, and 24.17 except as provided otherwise in this act. 24.18 (b) A hospital district created under this section is a 24.19 municipal corporation and a political subdivision of the state. 24.20[EFFECTIVE DATE.] This section is effective upon compliance 24.21 with Minnesota Statutes, section 645.021, subdivision 3, by the 24.22 governing body of the Cook county hospital district. 24.23 Sec. 15. Laws 1989, chapter 211, section 8, subdivision 4, 24.24 as amended by Laws 2002, chapter 390, section 24, is amended to 24.25 read: 24.26 Subd. 4. [TAX LEVY.] The tax levied under Minnesota 24.27 Statutes, section 447.34, shall not exceed $300,000in any year,24.28and itsfor taxes levied in 2002. For taxes levied in 2003 and 24.29 subsequent years, the tax must not exceed the lesser of: 24.30 (1) the product of the hospital district's property tax 24.31 levy limitation for the previous year determined under this 24.32 subdivision, multiplied by 103 percent; or 24.33 (2) the product of the hospital district's property tax 24.34 levy limitation for the previous year determined under this 24.35 subdivision multiplied by the ratio of the most recent available 24.36 annual medical care expenditure category of the revised Consumer 25.1 Price Index, U.S. citywide average, for all urban consumers 25.2 prepared by the United States Department of Labor to the same 25.3 annual index for the previous year. 25.4 The proceeds of the tax may be used for all purposes of the 25.5 hospital district. 25.6[EFFECTIVE DATE.] This section is effective upon compliance 25.7 with Minnesota Statutes, section 645.021, subdivision 3, by the 25.8 governing body of the Cook county hospital district. 25.9 ARTICLE 3 25.10 DEPARTMENT INCOME, CORPORATE FRANCHISE, AND 25.11 ESTATE TAX INITIATIVES 25.12 Section 1. Minnesota Statutes 2002, section 289A.10, 25.13 subdivision 1, is amended to read: 25.14 Subdivision 1. [RETURN REQUIRED.] In the case of a 25.15 decedent who has an interest in property with a situs in 25.16 Minnesota, the personal representative must submit a Minnesota 25.17 estate tax return to the commissioner, on a form prescribed by 25.18 the commissioner, if: 25.19 (1) a federal estate tax return is required to be filed; or 25.20 (2) the federal gross estate exceeds $700,000 for estates 25.21 of decedents dying after December 31, 2001, and before January 25.22 1, 2004; $850,000 for estates of decedents dying after December 25.23 31, 2003, and before January 1, 2005; $950,000 for estates of 25.24 decedents dying after December 31, 2004, and before January 1, 25.25 2006; and $1,000,000 for estates of decedents dying after 25.26 December 31, 2005. 25.27 The return must contain a computation of the Minnesota 25.28 estate tax due. The return must be signed by the personal 25.29 representative. 25.30[EFFECTIVE DATE.] This section is effective for estates of 25.31 decedents dying after December 31, 2002. 25.32 Sec. 2. Minnesota Statutes 2002, section 289A.19, 25.33 subdivision 4, is amended to read: 25.34 Subd. 4. [ESTATE TAX RETURNS.] When in the commissioner's 25.35 judgment good cause exists, the commissioner may extend the time 25.36 for filing an estate tax return for not more than six months. 26.1 When an extension to file the federal estate tax return has been 26.2 granted under section 6081 of the Internal Revenue Code, the 26.3 time for filing the estate tax return is extended for that 26.4 period. 26.5[EFFECTIVE DATE.] This section is effective for estates of 26.6 decedents dying after December 31, 2001. 26.7 Sec. 3. Minnesota Statutes 2002, section 289A.31, is 26.8 amended by adding a subdivision to read: 26.9 Subd. 8. [LIABILITY OF VENDOR FOR REPAYMENT OF REFUND.] If 26.10 an individual income tax refund resulting from claiming an 26.11 education credit under section 290.0674 is paid by means of 26.12 directly depositing the proceeds of the refund into a bank 26.13 account controlled by the vendor of the product or service upon 26.14 which the education credit is based, and the commissioner 26.15 subsequently disallows the credit, the commissioner may seek 26.16 repayment of the refund from the vendor. The amount of the 26.17 repayment must be assessed and collected in the same time and 26.18 manner as an erroneous refund under section 289A.37, subdivision 26.19 2. 26.20[EFFECTIVE DATE.] This section is effective for refunds 26.21 paid to accounts controlled by a vendor on or after the day 26.22 following final enactment. 26.23 Sec. 4. Minnesota Statutes 2002, section 289A.56, 26.24 subdivision 3, is amended to read: 26.25 Subd. 3. [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 26.26 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 26.27 TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 26.28 overpayments of withholding tax, entertainer withholding tax, or 26.29 withholding from payments to out-of-state contractors,or estate26.30tax,interest is computed from the date of payment to the date 26.31 the refund is paid or credited. For purposes of this 26.32 subdivision, the date of payment is the later of the date the 26.33 tax was finally due or was paid. 26.34 For the purposes of computing interest on estate tax 26.35 refunds, interest is paid from the later of the date of 26.36 overpayment, the date the estate tax return is due, or the date 27.1 the original estate tax return is filed to the date the refund 27.2 is paid. 27.3 For purposes of computing interest on sales and use tax 27.4 refunds, interest is paid from the date of payment to the date 27.5 the refund is paid or credited, if the refund claim includes a 27.6 detailed schedule reflecting the tax periods covered in the 27.7 claim. If the refund claim submitted does not include a 27.8 detailed schedule reflecting the tax periods covered in the 27.9 claim, interest is computed from the date the claim was filed. 27.10[EFFECTIVE DATE.] This section is effective for estates of 27.11 decedents dying after December 31, 2003. 27.12 Sec. 5. Minnesota Statutes 2002, section 289A.60, 27.13 subdivision 7, is amended to read: 27.14 Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] If a taxpayer 27.15 files what purports to be a tax return or a claim for refund but 27.16 which does not contain information on which the substantial 27.17 correctness of the purported return or claim for refund may be 27.18 judged or contains information that on its face shows that the 27.19 purported return or claim for refund is substantially incorrect 27.20 and the conduct is due to a position that is frivolous or a 27.21 desire that appears on the purported return or claim for refund 27.22 to delay or impede the administration of Minnesota tax laws, 27.23 then the individual shall pay a penalty of$500the greater of 27.24 $1,000 or 25 percent of the amount of tax required to be shown 27.25 on the return. In a proceeding involving the issue of whether 27.26 or not a person is liable for this penalty, the burden of proof 27.27 is on the commissioner. 27.28[EFFECTIVE DATE.] This section is effective for returns 27.29 filed after December 31, 2003. 27.30 Sec. 6. Minnesota Statutes 2002, section 290.01, 27.31 subdivision 19b, is amended to read: 27.32 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 27.33 individuals, estates, and trusts, there shall be subtracted from 27.34 federal taxable income: 27.35 (1) interest income on obligations of any authority, 27.36 commission, or instrumentality of the United States to the 28.1 extent includable in taxable income for federal income tax 28.2 purposes but exempt from state income tax under the laws of the 28.3 United States; 28.4 (2) if included in federal taxable income, the amount of 28.5 any overpayment of income tax to Minnesota or to any other 28.6 state, for any previous taxable year, whether the amount is 28.7 received as a refund or as a credit to another taxable year's 28.8 income tax liability; 28.9 (3) the amount paid to others, less the amount used to 28.10 claim the credit allowed under section 290.0674, not to exceed 28.11 $1,625 for each qualifying child in grades kindergarten to 6 and 28.12 $2,500 for each qualifying child in grades 7 to 12, for tuition, 28.13 textbooks, and transportation of each qualifying child in 28.14 attending an elementary or secondary school situated in 28.15 Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 28.16 wherein a resident of this state may legally fulfill the state's 28.17 compulsory attendance laws, which is not operated for profit, 28.18 and which adheres to the provisions of the Civil Rights Act of 28.19 1964 and chapter 363. For the purposes of this clause, 28.20 "tuition" includes fees or tuition as defined in section 28.21 290.0674, subdivision 1, clause (1). As used in this clause, 28.22 "textbooks" includes books and other instructional materials and 28.23 equipment purchased or leased for use in elementary and 28.24 secondary schools in teaching only those subjects legally and 28.25 commonly taught in public elementary and secondary schools in 28.26 this state. Equipment expenses qualifying for deduction 28.27 includes expenses as defined and limited in section 290.0674, 28.28 subdivision 1, clause (3). "Textbooks" does not include 28.29 instructional books and materials used in the teaching of 28.30 religious tenets, doctrines, or worship, the purpose of which is 28.31 to instill such tenets, doctrines, or worship, nor does it 28.32 include books or materials for, or transportation to, 28.33 extracurricular activities including sporting events, musical or 28.34 dramatic events, speech activities, driver's education, or 28.35 similar programs. For purposes of the subtraction provided by 28.36 this clause, "qualifying child" has the meaning given in section 29.1 32(c)(3) of the Internal Revenue Code; 29.2 (4) income as provided under section 290.0802; 29.3 (5) to the extent included in federal adjusted gross 29.4 income, income realized on disposition of property exempt from 29.5 tax under section 290.491; 29.6 (6)to the extent not deducted in determining federal29.7taxable income or used to claim the long-term care insurance29.8credit under section 290.0672, the amount paid for health29.9insurance of self-employed individuals as determined under29.10section 162(l) of the Internal Revenue Code, except that the29.11percent limit does not apply. If the individual deducted29.12insurance payments under section 213 of the Internal Revenue29.13Code of 1986, the subtraction under this clause must be reduced29.14by the lesser of:29.15(i) the total itemized deductions allowed under section29.1663(d) of the Internal Revenue Code, less state, local, and29.17foreign income taxes deductible under section 164 of the29.18Internal Revenue Code and the standard deduction under section29.1963(c) of the Internal Revenue Code; or29.20(ii) the lesser of (A) the amount of insurance qualifying29.21as "medical care" under section 213(d) of the Internal Revenue29.22Code to the extent not deducted under section 162(1) of the29.23Internal Revenue Code or excluded from income or (B) the total29.24amount deductible for medical care under section 213(a);29.25(7) the exemption amount allowed under Laws 1995, chapter29.26255, article 3, section 2, subdivision 3;29.27(8)to the extent included in federal taxable income, 29.28 postservice benefits for youth community service under section 29.29 124D.42 for volunteer service under United States Code, title 29.30 42, sections 12601 to 12604; 29.31(9)(7) to the extent not deducted in determining federal 29.32 taxable income by an individual who does not itemize deductions 29.33 for federal income tax purposes for the taxable year, an amount 29.34 equal to 50 percent of the excess of charitable contributions 29.35 allowable as a deduction for the taxable year under section 29.36 170(a) of the Internal Revenue Code over $500; 30.1(10)(8) for taxable years beginning before January 1, 30.2 2008, the amount of the federal small ethanol producer credit 30.3 allowed under section 40(a)(3) of the Internal Revenue Code 30.4 which is included in gross income under section 87 of the 30.5 Internal Revenue Code; 30.6(11)(9) for individuals who are allowed a federal foreign 30.7 tax credit for taxes that do not qualify for a credit under 30.8 section 290.06, subdivision 22, an amount equal to the carryover 30.9 of subnational foreign taxes for the taxable year, but not to 30.10 exceed the total subnational foreign taxes reported in claiming 30.11 the foreign tax credit. For purposes of this clause, "federal 30.12 foreign tax credit" means the credit allowed under section 27 of 30.13 the Internal Revenue Code, and "carryover of subnational foreign 30.14 taxes" equals the carryover allowed under section 904(c) of the 30.15 Internal Revenue Code minus national level foreign taxes to the 30.16 extent they exceed the federal foreign tax credit; and 30.17(12)(10) in each of the five tax years immediately 30.18 following the tax year in which an addition is required under 30.19 subdivision 19a, clause (7), an amount equal to one-fifth of the 30.20 delayed depreciation. For purposes of this clause, "delayed 30.21 depreciation" means the amount of the addition made by the 30.22 taxpayer under subdivision 19a, clause (7), minus the positive 30.23 value of any net operating loss under section 172 of the 30.24 Internal Revenue Code generated for the tax year of the 30.25 addition. The resulting delayed depreciation cannot be less 30.26 than zero. 30.27[EFFECTIVE DATE.] This section is effective for tax years 30.28 beginning after December 31, 2003. 30.29 Sec. 7. Minnesota Statutes 2002, section 290.01, 30.30 subdivision 19d, is amended to read: 30.31 Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 30.32 TAXABLE INCOME.] For corporations, there shall be subtracted 30.33 from federal taxable income after the increases provided in 30.34 subdivision 19c: 30.35 (1) the amount of foreign dividend gross-up added to gross 30.36 income for federal income tax purposes under section 78 of the 31.1 Internal Revenue Code; 31.2 (2) the amount of salary expense not allowed for federal 31.3 income tax purposes due to claiming the federal jobs credit 31.4 under section 51 of the Internal Revenue Code; 31.5 (3) any dividend (not including any distribution in 31.6 liquidation) paid within the taxable year by a national or state 31.7 bank to the United States, or to any instrumentality of the 31.8 United States exempt from federal income taxes, on the preferred 31.9 stock of the bank owned by the United States or the 31.10 instrumentality; 31.11 (4) amounts disallowed for intangible drilling costs due to 31.12 differences between this chapter and the Internal Revenue Code 31.13 in taxable years beginning before January 1, 1987, as follows: 31.14 (i) to the extent the disallowed costs are represented by 31.15 physical property, an amount equal to the allowance for 31.16 depreciation under Minnesota Statutes 1986, section 290.09, 31.17 subdivision 7, subject to the modifications contained in 31.18 subdivision 19e; and 31.19 (ii) to the extent the disallowed costs are not represented 31.20 by physical property, an amount equal to the allowance for cost 31.21 depletion under Minnesota Statutes 1986, section 290.09, 31.22 subdivision 8; 31.23 (5) the deduction for capital losses pursuant to sections 31.24 1211 and 1212 of the Internal Revenue Code, except that: 31.25 (i) for capital losses incurred in taxable years beginning 31.26 after December 31, 1986, capital loss carrybacks shall not be 31.27 allowed; 31.28 (ii) for capital losses incurred in taxable years beginning 31.29 after December 31, 1986, a capital loss carryover to each of the 31.30 15 taxable years succeeding the loss year shall be allowed; 31.31 (iii) for capital losses incurred in taxable years 31.32 beginning before January 1, 1987, a capital loss carryback to 31.33 each of the three taxable years preceding the loss year, subject 31.34 to the provisions of Minnesota Statutes 1986, section 290.16, 31.35 shall be allowed; and 31.36 (iv) for capital losses incurred in taxable years beginning 32.1 before January 1, 1987, a capital loss carryover to each of the 32.2 five taxable years succeeding the loss year to the extent such 32.3 loss was not used in a prior taxable year and subject to the 32.4 provisions of Minnesota Statutes 1986, section 290.16, shall be 32.5 allowed; 32.6 (6) an amount for interest and expenses relating to income 32.7 not taxable for federal income tax purposes, if (i) the income 32.8 is taxable under this chapter and (ii) the interest and expenses 32.9 were disallowed as deductions under the provisions of section 32.10 171(a)(2), 265 or 291 of the Internal Revenue Code in computing 32.11 federal taxable income; 32.12 (7) in the case of mines, oil and gas wells, other natural 32.13 deposits, and timber for which percentage depletion was 32.14 disallowed pursuant to subdivision 19c, clause (11), a 32.15 reasonable allowance for depletion based on actual cost. In the 32.16 case of leases the deduction must be apportioned between the 32.17 lessor and lessee in accordance with rules prescribed by the 32.18 commissioner. In the case of property held in trust, the 32.19 allowable deduction must be apportioned between the income 32.20 beneficiaries and the trustee in accordance with the pertinent 32.21 provisions of the trust, or if there is no provision in the 32.22 instrument, on the basis of the trust's income allocable to 32.23 each; 32.24 (8) for certified pollution control facilities placed in 32.25 service in a taxable year beginning before December 31, 1986, 32.26 and for which amortization deductions were elected under section 32.27 169 of the Internal Revenue Code of 1954, as amended through 32.28 December 31, 1985, an amount equal to the allowance for 32.29 depreciation under Minnesota Statutes 1986, section 290.09, 32.30 subdivision 7; 32.31 (9) amounts included in federal taxable income that are due 32.32 to refunds of income, excise, or franchise taxes based on net 32.33 income or related minimum taxes paid by the corporation to 32.34 Minnesota, another state, a political subdivision of another 32.35 state, the District of Columbia, or a foreign country or 32.36 possession of the United States to the extent that the taxes 33.1 were added to federal taxable income under section 290.01, 33.2 subdivision 19c, clause (1), in a prior taxable year; 33.3 (10) 80 percent of royalties, fees, or other like income 33.4 accrued or received from a foreign operating corporation or a 33.5 foreign corporation which is part of the same unitary business 33.6 as the receiving corporation; 33.7 (11) income or gains from the business of mining as defined 33.8 in section 290.05, subdivision 1, clause (a), that are not 33.9 subject to Minnesota franchise tax; 33.10 (12) the amount of handicap access expenditures in the 33.11 taxable year which are not allowed to be deducted or capitalized 33.12 under section 44(d)(7) of the Internal Revenue Code; 33.13 (13) the amount of qualified research expenses not allowed 33.14 for federal income tax purposes under section 280C(c) of the 33.15 Internal Revenue Code, but only to the extent that the amount 33.16 exceeds the amount of the credit allowed under section 290.068; 33.17 (14) the amount of salary expenses not allowed for federal 33.18 income tax purposes due to claiming the Indian employment credit 33.19 under section 45A(a) of the Internal Revenue Code; 33.20 (15) the amount of any refund of environmental taxes paid 33.21 under section 59A of the Internal Revenue Code; 33.22 (16) for taxable years beginning before January 1, 2008, 33.23 the amount of the federal small ethanol producer credit allowed 33.24 under section 40(a)(3) of the Internal Revenue Code which is 33.25 included in gross income under section 87 of the Internal 33.26 Revenue Code; 33.27 (17) for a corporation whose foreign sales corporation, as 33.28 defined in section 922 of the Internal Revenue Code, constituted 33.29 a foreign operating corporation during any taxable year ending 33.30 before January 1, 1995, and a return was filed by August 15, 33.31 1996, claiming the deduction underthissection 290.21, 33.32 subdivision 4, for income received from the foreign operating 33.33 corporation, an amount equal to 1.23 multiplied by the amount of 33.34 income excluded under section 114 of the Internal Revenue Code, 33.35 provided the income is not income of a foreign operating 33.36 company; 34.1 (18) any decrease in subpart F income, as defined in 34.2 section 952(a) of the Internal Revenue Code, for the taxable 34.3 year when subpart F income is calculated without regard to the 34.4 provisions of section 614 of Public Law Number 107-147; and 34.5 (19) in each of the five tax years immediately following 34.6 the tax year in which an addition is required under subdivision 34.7 19c, clause (16), an amount equal to one-fifth of the delayed 34.8 depreciation. For purposes of this clause, "delayed 34.9 depreciation" means the amount of the addition made by the 34.10 taxpayer under subdivision 19c, clause (16). The resulting 34.11 delayed depreciation cannot be less than zero. 34.12[EFFECTIVE DATE.] This section is effective the day 34.13 following final enactment. 34.14 Sec. 8. Minnesota Statutes 2002, section 290.06, 34.15 subdivision 2c, is amended to read: 34.16 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 34.17 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 34.18 married individuals filing joint returns and surviving spouses 34.19 as defined in section 2(a) of the Internal Revenue Code must be 34.20 computed by applying to their taxable net income the following 34.21 schedule of rates: 34.22 (1) On the first $25,680, 5.35 percent; 34.23 (2) On all over $25,680, but not over $102,030, 7.05 34.24 percent; 34.25 (3) On all over $102,030, 7.85 percent. 34.26 Married individuals filing separate returns, estates, and 34.27 trusts must compute their income tax by applying the above rates 34.28 to their taxable income, except that the income brackets will be 34.29 one-half of the above amounts. 34.30 (b) The income taxes imposed by this chapter upon unmarried 34.31 individuals must be computed by applying to taxable net income 34.32 the following schedule of rates: 34.33 (1) On the first $17,570, 5.35 percent; 34.34 (2) On all over $17,570, but not over $57,710, 7.05 34.35 percent; 34.36 (3) On all over $57,710, 7.85 percent. 35.1 (c) The income taxes imposed by this chapter upon unmarried 35.2 individuals qualifying as a head of household as defined in 35.3 section 2(b) of the Internal Revenue Code must be computed by 35.4 applying to taxable net income the following schedule of rates: 35.5 (1) On the first $21,630, 5.35 percent; 35.6 (2) On all over $21,630, but not over $86,910, 7.05 35.7 percent; 35.8 (3) On all over $86,910, 7.85 percent. 35.9 (d) In lieu of a tax computed according to the rates set 35.10 forth in this subdivision, the tax of any individual taxpayer 35.11 whose taxable net income for the taxable year is less than an 35.12 amount determined by the commissioner must be computed in 35.13 accordance with tables prepared and issued by the commissioner 35.14 of revenue based on income brackets of not more than $100. The 35.15 amount of tax for each bracket shall be computed at the rates 35.16 set forth in this subdivision, provided that the commissioner 35.17 may disregard a fractional part of a dollar unless it amounts to 35.18 50 cents or more, in which case it may be increased to $1. 35.19 (e) An individual who is not a Minnesota resident for the 35.20 entire year must compute the individual's Minnesota income tax 35.21 as provided in this subdivision. After the application of the 35.22 nonrefundable credits provided in this chapter, the tax 35.23 liability must then be multiplied by a fraction in which: 35.24 (1) the numerator is the individual's Minnesota source 35.25 federal adjusted gross income as defined in section 62 of the 35.26 Internal Revenue Code and increased by the additions required 35.27 under section 290.01, subdivision 19a, clauses (1), (5), and 35.28 (6), and reduced by the Minnesota assignable portion of the 35.29 subtraction for United States government interest under section 35.30 290.01, subdivision 19b, clause (1), after applying the 35.31 allocation and assignability provisions of section 290.081, 35.32 clause (a), or 290.17; and 35.33 (2) the denominator is the individual's federal adjusted 35.34 gross income as defined in section 62 of the Internal Revenue 35.35 Code of 1986, increased by the amounts specified in section 35.36 290.01, subdivision 19a, clauses (1), (5), and (6), and reduced 36.1 by the amounts specified in section 290.01, subdivision 19b, 36.2 clause (1). 36.3[EFFECTIVE DATE.] This section is effective for tax years 36.4 beginning after December 31, 2002. 36.5 Sec. 9. Minnesota Statutes 2002, section 290.0671, 36.6 subdivision 1, is amended to read: 36.7 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 36.8 allowed a credit against the tax imposed by this chapter equal 36.9 to a percentage of earned income. To receive a credit, a 36.10 taxpayer must be eligible for a credit under section 32 of the 36.11 Internal Revenue Code. 36.12 (b) For individuals with no qualifying children, the credit 36.13 equals 1.9125 percent of the first $4,620 of earned income. The 36.14 credit is reduced by 1.9125 percent of earned income or modified 36.15 adjusted gross income, whichever is greater, in excess of 36.16 $5,770, but in no case is the credit less than zero. 36.17 (c) For individuals with one qualifying child, the credit 36.18 equals 8.5 percent of the first $6,920 of earned income and 8.5 36.19 percent of earned income over $12,080 but less than $13,450. 36.20 The credit is reduced by 5.73 percent of earned income or 36.21 modified adjusted gross income, whichever is greater, in excess 36.22 of $15,080, but in no case is the credit less than zero. 36.23 (d) For individuals with two or more qualifying children, 36.24 the credit equals ten percent of the first $9,720 of earned 36.25 income and 20 percent of earned income over $14,860 but less 36.26 than $16,800. The credit is reduced by 10.3 percent of earned 36.27 income or modified adjusted gross income, whichever is greater, 36.28 in excess of $17,890, but in no case is the credit less than 36.29 zero. 36.30 (e) For a nonresident or part-year resident, the credit 36.31 must be allocated based on the percentage calculated under 36.32 section 290.06, subdivision 2c, paragraph (e). 36.33 (f) For a person who was a resident for the entire tax year 36.34 and has earned income not subject to tax under this chapter, the 36.35 credit must be allocated based on the ratio of federal adjusted 36.36 gross income reduced by the earned income not subject to tax 37.1 under this chapter over federal adjusted gross income. 37.2 (g) For tax years beginning after December 31, 2001, and 37.3 before December 31, 2004, the $5,770 in paragraph (b)is37.4increased to $6,770, the $15,080 in paragraph (c)is increased37.5to $16,080, and the $17,890 in paragraph (d)is increased to37.6$18,890, after being adjusted for inflation under subdivision 7, 37.7 are each increased by $1,000 for married taxpayers filing joint 37.8 returns. 37.9 (h) For tax years beginning after December 31, 2004, and 37.10 before December 31, 2007, the $5,770 in paragraph (b)is37.11increased to $7,770, the $15,080 in paragraph (c)is increased37.12to $17,080, and the $17,890 in paragraph (d)is increased to37.13$19,890, after being adjusted for inflation under subdivision 7, 37.14 are each increased by $2,000 for married taxpayers filing joint 37.15 returns. 37.16 (i) For tax years beginning after December 31, 2007, and 37.17 before December 31, 2010, the $5,770 in paragraph (b)is37.18increased to $8,770, the $15,080 in paragraph (c)is increased37.19to $18,080, and the $17,890 in paragraph (d)is increased to37.20$20,890, after being adjusted for inflation under subdivision 7, 37.21 are each increased by $3,000 for married taxpayers filing joint 37.22 returns. For tax years beginning after December 31, 2008, the 37.23 $3,000 is adjusted annually for inflation under subdivision 7. 37.24 (j) The commissioner shall construct tables showing the 37.25 amount of the credit at various income levels and make them 37.26 available to taxpayers. The tables shall follow the schedule 37.27 contained in this subdivision, except that the commissioner may 37.28 graduate the transition between income brackets. 37.29[EFFECTIVE DATE.] This section is effective for tax years 37.30 beginning after December 31, 2002. 37.31 Sec. 10. Minnesota Statutes 2002, section 290.0675, 37.32 subdivision 2, is amended to read: 37.33 Subd. 2. [CREDIT ALLOWED.] A married couple filing a joint 37.34 return is allowed a credit against the tax imposed under section 37.35 290.06. 37.36The minimum taxable income for the married couple to be38.1eligible for the credit is $25,680, and the minimum earned38.2income in order for the couple to be eligible for the credit is38.3$14,250 for each spouse.38.4[EFFECTIVE DATE.] This section is effective for tax years 38.5 beginning after December 31, 2002. 38.6 Sec. 11. Minnesota Statutes 2002, section 290.0675, 38.7 subdivision 3, is amended to read: 38.8 Subd. 3. [CREDIT AMOUNT.] The credit amount is the 38.9 difference between the tax on the couple's joint Minnesota 38.10 taxable income under the rates and income levels in section 38.11 290.06, subdivision 2c, paragraph (a), as adjusted for the 38.12 taxable year by section 290.06, subdivision 2d, and the sum of 38.13 the tax under the rates and income levels of section 290.06, 38.14 subdivision 2c, paragraph (b), as adjusted for the taxable year 38.15 by section 290.06, subdivision 2d, on the earned income of the 38.16 lesser-earning spouse, and the tax under the rates and income 38.17 levels of section 290.06, subdivision 2c, paragraph (b), as 38.18 adjusted for the taxable year by section 290.06, subdivision 2d, 38.19 on the couple's joint Minnesota taxable income, minus the earned 38.20 income of the lesser-earning spouse. 38.21 The commissioner of revenue shall prepare and make 38.22 available to taxpayers a comprehensive table showing the credit 38.23 under this section at brackets of earnings of the lesser-earning 38.24 spouse and joint taxable income. The brackets of earnings shall 38.25 not be more than $2,000. 38.26[EFFECTIVE DATE.] This section is effective for tax years 38.27 beginning after December 31, 2002. 38.28 Sec. 12. Minnesota Statutes 2002, section 290.0679, 38.29 subdivision 2, is amended to read: 38.30 Subd. 2. [CONDITIONS FOR ASSIGNMENT.] A qualifying 38.31 taxpayer may assign all or part of an anticipated refund for the 38.32 current and future taxable years to a financial institution or a 38.33 qualifying organization. A financial institution or qualifying 38.34 organization accepting assignment must pay the amount secured by 38.35 the assignment to a third-party vendor. The commissioner of 38.36 children, families, and learning shallprovide a list of39.1categories of, upon request from a third-party vendor, certify 39.2 that the vendor's products and servicesthatqualify for the 39.3 education creditto financial institutions and qualifying39.4organizations. A denial of a certification is subject to the 39.5 contested case procedure under chapter 14. A financial 39.6 institution or qualifying organization that accepts assignments 39.7 under this section must verify as part of the assignment 39.8 documentation that the product or service to be provided by the 39.9 third-party vendorqualifieshas been certified by the 39.10 commissioner of children, families, and learning as qualifying 39.11 for the education credit. The amount assigned for the current 39.12 and future taxable years may not exceed the maximum allowable 39.13 education credit for the current taxable year. Both the 39.14 taxpayer and spouse must consent to the assignment of a refund 39.15 from a joint return. 39.16[EFFECTIVE DATE.] This section is effective for assignments 39.17 made on or after the day following final enactment. 39.18 Sec. 13. Minnesota Statutes 2002, section 290.0802, 39.19 subdivision 1, is amended to read: 39.20 Subdivision 1. [DEFINITIONS.] For purposes of this 39.21 section, the following terms have the meanings given. 39.22 (a) "Adjusted gross income" means federal adjusted gross 39.23 income as used in section 22(d) of the Internal Revenue Code for 39.24 the taxable year, plus a lump sum distribution as defined in 39.25 section 402(e)(3) of the Internal Revenue Code, and less any 39.26 pension, annuity, or disability benefits included in federal 39.27 gross income but not subject to state taxation other than the 39.28 subtraction allowed under section 290.01, subdivision 19b, 39.29 clause (4). 39.30 (b) "Disability income" means disability income as defined 39.31 in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 39.32 (c) "Nontaxable retirement and disability benefits" means 39.33 the amount of pension, annuity, or disability benefits that 39.34 would be included in the reduction under section 22(c)(3) of the 39.35 Internal Revenue Code and pension, annuity, or disability 39.36 benefits included in federal gross income but not subject to 40.1 state taxationother than the subtraction allowed under section40.2290.01, subdivision 19b, clause (4). 40.3 (d) "Qualified individual" means a qualified individual as 40.4 defined in section 22(b) of the Internal Revenue Code. 40.5(e) "Social security benefits above the second federal40.6threshold" means the amount of social security benefits included40.7in federal taxable income due to the provisions of section 1321540.8of the Omnibus Budget Reconciliation Act of 1993, Public Law40.9Number 103-66.40.10[EFFECTIVE DATE.] This section is effective for tax years 40.11 beginning after December 31, 2002. 40.12 Sec. 14. Minnesota Statutes 2002, section 291.005, 40.13 subdivision 1, is amended to read: 40.14 Subdivision 1. Unless the context otherwise clearly 40.15 requires, the following terms used in this chapter shall have 40.16 the following meanings: 40.17 (1) "Federal gross estate" means the gross estate of a 40.18 decedent as valued and otherwise determined for federal estate 40.19 tax purposes by federal taxing authorities pursuant to the 40.20 provisions of the Internal Revenue Code. 40.21 (2) "Minnesota gross estate" means the federal gross estate 40.22 of a decedent after (a) excluding therefrom any property 40.23 included therein which has its situs outside Minnesotaand40.24pensions exempt from tax under this chapter pursuant to section40.25352.15, subdivision 1; 353.15, subdivision 1; 354.10,40.26subdivision 1; 354B.30; or 354C.165, and (b) including therein 40.27 any property omitted from the federal gross estate which is 40.28 includable therein, has its situs in Minnesota, and was not 40.29 disclosed to federal taxing authorities. 40.30 (3) "Personal representative" means the executor, 40.31 administrator or other person appointed by the court to 40.32 administer and dispose of the property of the decedent. If 40.33 there is no executor, administrator or other person appointed, 40.34 qualified, and acting within this state, then any person in 40.35 actual or constructive possession of any property having a situs 40.36 in this state which is included in the federal gross estate of 41.1 the decedent shall be deemed to be a personal representative to 41.2 the extent of the property and the Minnesota estate tax due with 41.3 respect to the property. 41.4 (4) "Resident decedent" means an individual whose domicile 41.5 at the time of death was in Minnesota. 41.6 (5) "Nonresident decedent" means an individual whose 41.7 domicile at the time of death was not in Minnesota. 41.8 (6) "Situs of property" means, with respect to real 41.9 property, the state or country in which it is located; with 41.10 respect to tangible personal property, the state or country in 41.11 which it was normally kept or located at the time of the 41.12 decedent's death; and with respect to intangible personal 41.13 property, the state or country in which the decedent was 41.14 domiciled at death. 41.15 (7) "Commissioner" means the commissioner of revenue or any 41.16 person to whom the commissioner has delegated functions under 41.17 this chapter. 41.18 (8) "Internal Revenue Code" means the United States 41.19 Internal Revenue Code of 1986, as amended through December 31, 41.2020002002. 41.21[EFFECTIVE DATE.] This section is effective for estates of 41.22 decedents dying after December 31, 2002. 41.23 Sec. 15. Minnesota Statutes 2002, section 291.03, 41.24 subdivision 1, is amended to read: 41.25 Subdivision 1. [TAX AMOUNT.] The tax imposed shall be an 41.26 amount equal to the proportion of the maximum credit computed 41.27 under section 2011 of the Internal Revenue Code, as amended 41.28 through December 31, 2000, for state death taxes as the 41.29 Minnesota gross estate bears to the value of the federal gross 41.30 estate.For a resident decedent, the tax shall be the maximum41.31credit computed under section 2011 of the Internal Revenue Code41.32reduced by the amount of the death tax paid the other state and41.33credited against the federal estate tax if this results in a41.34larger amount of tax than the proportionate amount of the41.35credit.The tax determined under this paragraph shall not be 41.36 greater than the federal estate tax computed under section 2001 42.1 of the Internal Revenue Code after the allowance of the federal 42.2 credits allowed under section 2010 of the Internal Revenue Code 42.3 of 1986, as amended through December 31, 2000. For the purposes 42.4 of this section, expenses which are deducted for federal income 42.5 tax purposes under section 642(g) of the Internal Revenue Code 42.6 as amended through December 31, 2002, are not allowable in 42.7 computing the tax under this chapter. 42.8[EFFECTIVE DATE.] This section is effective for estates of 42.9 decedents dying after December 31, 2002. 42.10 Sec. 16. Minnesota Statutes 2002, section 352.15, 42.11 subdivision 1, is amended to read: 42.12 Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money, 42.13 annuities, or other benefits mentioned in this chapter is 42.14 assignable either in law or in equity or subject tostate estate42.15tax, or toexecution, levy, attachment, garnishment, or other 42.16 legal process, except as provided in subdivision 1a or section 42.17 518.58, 518.581, or 518.6111. 42.18[EFFECTIVE DATE.] This section is effective for estates of 42.19 decedents dying after December 31, 2002. 42.20 Sec. 17. Minnesota Statutes 2002, section 353.15, 42.21 subdivision 1, is amended to read: 42.22 Subdivision 1. [EXEMPTION; EXCEPTIONS.] No money, annuity, 42.23 or benefit provided for in this chapter is assignable or subject 42.24to any state estate tax, orto execution, levy, attachment, 42.25 garnishment, or legal process, except as provided in subdivision 42.26 2 or section 518.58, 518.581, or 518.6111. 42.27[EFFECTIVE DATE.] This section is effective for estates of 42.28 decedents dying after December 31, 2002. 42.29 Sec. 18. Minnesota Statutes 2002, section 354.10, 42.30 subdivision 1, is amended to read: 42.31 Subdivision 1. [EXEMPTION; EXCEPTIONS.] The right of a 42.32 teacher to take advantage of the benefits provided by this 42.33 chapter, is a personal right only and is not assignable. All 42.34 money to the credit of a teacher's account in the fund or any 42.35 money payable to the teacher from the fund belongs to the state 42.36 of Minnesota until actually paid to the teacher or a beneficiary 43.1 under this chapter. The association may acknowledge a properly 43.2 completed power of attorney form. An assignment or attempted 43.3 assignment of a teacher's interest in the fund, or of the 43.4 beneficiary's interest in the fund, by a teacher or a 43.5 beneficiary is void and exemptfrom taxation under chapter 29143.6andfrom garnishment or levy under attachment or execution, 43.7 except as provided in subdivision 2 or 3, or section 518.58, 43.8 518.581, or 518.6111. 43.9[EFFECTIVE DATE.] This section is effective for estates of 43.10 decedents dying after December 31, 2002. 43.11 Sec. 19. Minnesota Statutes 2002, section 354B.30, is 43.12 amended to read: 43.13 354B.30 [PROHIBITION ON LOANS OR PRETERMINATION 43.14 DISTRIBUTIONS.] 43.15 (a) No participant may obtain a loan from the plan or 43.16 obtain any distribution from the plan at a time before the 43.17 participant terminates the employment that gave rise to plan 43.18 coverage. 43.19 (b) No amounts to the credit of the plan are assignable 43.20 either in law or in equity,are subject to state estate tax,or 43.21 are subject to execution, levy, attachment, garnishment, or 43.22 other legal process, except as provided in section 518.58, 43.23 518.581, or 518.6111. 43.24[EFFECTIVE DATE.] This section is effective for estates of 43.25 decedents dying after December 31, 2002. 43.26 Sec. 20. Minnesota Statutes 2002, section 354C.165, is 43.27 amended to read: 43.28 354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 43.29 DISTRIBUTIONS.] 43.30 (a) Except as provided in paragraph (c), no participant may 43.31 obtain a loan or any distribution from the plan before the 43.32 participant terminates the employment that gave rise to plan 43.33 coverage. 43.34 (b) No amounts to the credit of the plan are assignable 43.35 either in law or in equity,are subject to state estate tax,or 43.36 are subject to execution, levy, attachment, garnishment, or 44.1 other legal process, except as provided in section 518.58, 44.2 518.581, or 518.6111. 44.3 (c) Unless prohibited by or subject to a penalty under 44.4 federal law, a teacher who is a participant in the supplemental 44.5 retirement plan may request, in writing, a transfer of all or a 44.6 portion of the funds accumulated in the person's supplemental 44.7 plan account to the teachers retirement association to purchase 44.8 service credit under sections 354.53, 354.533, 354.534, 354.535, 44.9 354.536, 354.537, and 354.538 or to the teachers retirement fund 44.10 association to purchase service credit under sections 354A.097, 44.11 354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104. 44.12 Upon receipt of a valid request, the board shall execute the 44.13 transfer. The transfer must be a fund-to-fund transfer, and in 44.14 no event shall the participant directly receive any of the funds 44.15 while still employed by the board. In no event may the board 44.16 transfer more than the participant's account balance. The 44.17 board, in cooperation with the executive director of the 44.18 teachers retirement association, shall develop the forms for 44.19 requesting a transfer and the procedures for executing the 44.20 requested transfers. 44.21[EFFECTIVE DATE.] This section is effective for estates of 44.22 decedents dying after December 31, 2002. 44.23 Sec. 21. Laws 2001, First Special Session chapter 5, 44.24 article 9, section 12, the effective date, is amended to read: 44.25[EFFECTIVE DATE.] This section is effective for assignment 44.26 of refunds filed with the commissioner after December 31, 2001. 44.27The time period for filing assignments expires December 31,44.282003, but assignments filed on or before that date remain in44.29effect until satisfied or canceled.44.30 Sec. 22. [REPEALER.] 44.31 (a) Minnesota Statutes 2002, sections 290.0671, subdivision 44.32 3; and 290.0675, subdivision 5, are repealed effective for tax 44.33 years beginning after December 31, 2002. 44.34 (b) Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 44.35 8009.7200; 8009.7300; 8009.7400; and 8092.1000, are repealed 44.36 effective the day following final enactment. 45.1 ARTICLE 4 45.2 FEDERAL UPDATE 45.3 Section 1. Minnesota Statutes 2002, section 289A.02, 45.4 subdivision 7, is amended to read: 45.5 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 45.6 defined otherwise, "Internal Revenue Code" means the Internal 45.7 Revenue Code of 1986, as amended throughMarch 15December 31, 45.8 2002. 45.9[EFFECTIVE DATE.] This section is effective the day 45.10 following final enactment. 45.11 Sec. 2. Minnesota Statutes 2002, section 290.01, 45.12 subdivision 19, is amended to read: 45.13 Subd. 19. [NET INCOME.] The term "net income" means the 45.14 federal taxable income, as defined in section 63 of the Internal 45.15 Revenue Code of 1986, as amended through the date named in this 45.16 subdivision, incorporating any elections made by the taxpayer in 45.17 accordance with the Internal Revenue Code in determining federal 45.18 taxable income for federal income tax purposes, and with the 45.19 modifications provided in subdivisions 19a to 19f. 45.20 In the case of a regulated investment company or a fund 45.21 thereof, as defined in section 851(a) or 851(g) of the Internal 45.22 Revenue Code, federal taxable income means investment company 45.23 taxable income as defined in section 852(b)(2) of the Internal 45.24 Revenue Code, except that: 45.25 (1) the exclusion of net capital gain provided in section 45.26 852(b)(2)(A) of the Internal Revenue Code does not apply; 45.27 (2) the deduction for dividends paid under section 45.28 852(b)(2)(D) of the Internal Revenue Code must be applied by 45.29 allowing a deduction for capital gain dividends and 45.30 exempt-interest dividends as defined in sections 852(b)(3)(C) 45.31 and 852(b)(5) of the Internal Revenue Code; and 45.32 (3) the deduction for dividends paid must also be applied 45.33 in the amount of any undistributed capital gains which the 45.34 regulated investment company elects to have treated as provided 45.35 in section 852(b)(3)(D) of the Internal Revenue Code. 45.36 The net income of a real estate investment trust as defined 46.1 and limited by section 856(a), (b), and (c) of the Internal 46.2 Revenue Code means the real estate investment trust taxable 46.3 income as defined in section 857(b)(2) of the Internal Revenue 46.4 Code. 46.5 The net income of a designated settlement fund as defined 46.6 in section 468B(d) of the Internal Revenue Code means the gross 46.7 income as defined in section 468B(b) of the Internal Revenue 46.8 Code. 46.9 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 46.10 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 46.11 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 46.12 Protection Act, Public Law Number 104-188, the provisions of 46.13 Public Law Number 104-117, the provisions of sections 313(a) and 46.14 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 46.15 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 46.16 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 46.17 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 46.18 Public Law Number 105-34, the provisions of section 6010 of the 46.19 Internal Revenue Service Restructuring and Reform Act of 1998, 46.20 Public Law Number 105-206, the provisions of section 4003 of the 46.21 Omnibus Consolidated and Emergency Supplemental Appropriations 46.22 Act, 1999, Public Law Number 105-277, and the provisions of 46.23 section 318 of the Consolidated Appropriation Act of 2001, 46.24 Public Law Number 106-554, shall become effective at the time 46.25 they become effective for federal purposes. 46.26 The Internal Revenue Code of 1986, as amended through 46.27 December 31, 1996, shall be in effect for taxable years 46.28 beginning after December 31, 1996. 46.29 The provisions of sections 202(a) and (b), 221(a), 225, 46.30 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 46.31 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 46.32 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 46.33 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 46.34 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 46.35 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 46.36 7002, and 7003 of the Internal Revenue Service Restructuring and 47.1 Reform Act of 1998, Public Law Number 105-206, the provisions of 47.2 section 3001 of the Omnibus Consolidated and Emergency 47.3 Supplemental Appropriations Act, 1999, Public Law Number 47.4 105-277, the provisions of section 3001 of the Miscellaneous 47.5 Trade and Technical Corrections Act of 1999, Public Law Number 47.6 106-36, and the provisions of section 316 of the Consolidated 47.7 Appropriation Act of 2001, Public Law Number 106-554, shall 47.8 become effective at the time they become effective for federal 47.9 purposes. 47.10 The Internal Revenue Code of 1986, as amended through 47.11 December 31, 1997, shall be in effect for taxable years 47.12 beginning after December 31, 1997. 47.13 The provisions of sections 5002, 6009, 6011, and 7001 of 47.14 the Internal Revenue Service Restructuring and Reform Act of 47.15 1998, Public Law Number 105-206, the provisions of section 9010 47.16 of the Transportation Equity Act for the 21st Century, Public 47.17 Law Number 105-178, the provisions of sections 1004, 4002, and 47.18 5301 of the Omnibus Consolidation and Emergency Supplemental 47.19 Appropriations Act, 1999, Public Law Number 105-277, the 47.20 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 47.21 Act of 1998, Public Law Number 105-369, the provisions of 47.22 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 47.23 Work Incentives Improvement Act of 1999, Public Law Number 47.24 106-170, the provisions of the Installment Tax Correction Act of 47.25 2000, Public Law Number 106-573, and the provisions of section 47.26 309 of the Consolidated Appropriation Act of 2001, Public Law 47.27 Number 106-554, shall become effective at the time they become 47.28 effective for federal purposes. 47.29 The Internal Revenue Code of 1986, as amended through 47.30 December 31, 1998, shall be in effect for taxable years 47.31 beginning after December 31, 1998. 47.32 The provisions of the FSC Repeal and Extraterritorial 47.33 Income Exclusion Act of 2000, Public Law Number 106-519, and the 47.34 provision of section 412 of the Job Creation and Worker 47.35 Assistance Act of 2002, Public Law Number 107-147, shall become 47.36 effective at the time it became effective for federal purposes. 48.1 The Internal Revenue Code of 1986, as amended through 48.2 December 31, 1999, shall be in effect for taxable years 48.3 beginning after December 31, 1999. The provisions of sections 48.4 306 and 401 of the Consolidated Appropriation Act of 2001, 48.5 Public Law Number 106-554, and the provision of section 48.6 632(b)(2)(A) of the Economic Growth and Tax Relief 48.7 Reconciliation Act of 2001, Public Law Number 107-16, and 48.8 provisions of sections 101 and 402 of the Job Creation and 48.9 Worker Assistance Act of 2002, Public Law Number 107-147, shall 48.10 become effective at the same time it became effective for 48.11 federal purposes. 48.12 The Internal Revenue Code of 1986, as amended through 48.13 December 31, 2000, shall be in effect for taxable years 48.14 beginning after December 31, 2000. The provisions of sections 48.15 659a and 671 of the Economic Growth and Tax Relief 48.16 Reconciliation Act of 2001, Public Law Number 107-16, the 48.17 provisions of sections 104, 105, and 111 of the Victims of 48.18 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, and 48.19 the provisions of sections 201, 403, 413, and 606 of the Job 48.20 Creation and Worker Assistance Act of 2002, Public Law Number 48.21 107-147, shall become effective at the same time it became 48.22 effective for federal purposes. 48.23 The Internal Revenue Code of 1986, as amended through March 48.24 15, 2002, shall be in effect for taxable years beginning after 48.25 December 31, 2001. 48.26 The provisions of sections 101 and 102 of the Victims of 48.27 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 48.28 shall become effective at the same time it becomes effective for 48.29 federal purposes. 48.30 The Internal Revenue Code of 1986, as amended through 48.31 December 31, 2002, shall be in effect for taxable years 48.32 beginning after December 31, 2002. 48.33 Except as otherwise provided, references to the Internal 48.34 Revenue Code in subdivisions 19a to 19g mean the code in effect 48.35 for purposes of determining net income for the applicable year. 48.36[EFFECTIVE DATE.] This section is effective the day 49.1 following final enactment. 49.2 Sec. 3. Minnesota Statutes 2002, section 290.01, 49.3 subdivision 31, is amended to read: 49.4 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 49.5 defined otherwise, "Internal Revenue Code" means the Internal 49.6 Revenue Code of 1986, as amended throughMarch 15December 31, 49.7 2002. 49.8[EFFECTIVE DATE.] This section is effective the day 49.9 following final enactment. 49.10 Sec. 4. Minnesota Statutes 2002, section 290A.03, 49.11 subdivision 15, is amended to read: 49.12 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 49.13 means the Internal Revenue Code of 1986, as amended 49.14 throughMarch 15December 31, 2002. 49.15[EFFECTIVE DATE.] This section is effective for refunds 49.16 payable for rents paid in 2003 and thereafter and property taxes 49.17 payable in 2004 and thereafter. 49.18 ARTICLE 5 49.19 DEPARTMENT PROPERTY TAX INITIATIVES 49.20 Section 1. Minnesota Statutes 2002, section 270.06, is 49.21 amended to read: 49.22 270.06 [POWERS AND DUTIES.] 49.23 The commissioner of revenue shall: 49.24 (1) have and exercise general supervision over the 49.25 administration of the assessment and taxation laws of the state, 49.26 over assessors, town, county, and city boards of review and 49.27 equalization, and all other assessing officers in the 49.28 performance of their duties, to the end that all assessments of 49.29 property be made relatively just and equal in compliance with 49.30 the laws of the state; 49.31 (2) confer with, advise, and give the necessary 49.32 instructions and directions to local assessors and local boards 49.33 of review throughout the state as to their duties under the laws 49.34 of the state; 49.35 (3) direct proceedings, actions, and prosecutions to be 49.36 instituted to enforce the laws relating to the liability and 50.1 punishment of public officers and officers and agents of 50.2 corporations for failure or negligence to comply with the 50.3 provisions of the laws of this state governing returns of 50.4 assessment and taxation of property, and cause complaints to be 50.5 made against local assessors, members of boards of equalization, 50.6 members of boards of review, or any other assessing or taxing 50.7 officer, to the proper authority, for their removal from office 50.8 for misconduct or negligence of duty; 50.9 (4) require county attorneys to assist in the commencement 50.10 of prosecutions in actions or proceedings for removal, 50.11 forfeiture and punishment for violation of the laws of this 50.12 state in respect to the assessment and taxation of property in 50.13 their respective districts or counties; 50.14 (5) require town, city, county, and other public officers 50.15 to report information as to the assessment of property, 50.16 collection of taxes received from licenses and other sources, 50.17 and such other information as may be needful in the work of the 50.18 department of revenue, in such form and upon such blanks as the 50.19 commissioner may prescribe; 50.20 (6) require individuals, copartnerships, companies, 50.21 associations, and corporations to furnish information concerning 50.22 their capital, funded or other debt, current assets and 50.23 liabilities, earnings, operating expenses, taxes, as well as all 50.24 other statements now required by law for taxation purposes; 50.25 (7) subpoena witnesses, at a time and place reasonable 50.26 under the circumstances, to appear and give testimony, and to 50.27 produce books, records, papers and documents for inspection and 50.28 copying relating to any matter which the commissioner may have 50.29 authority to investigate or determine; 50.30 (8) issue a subpoena which does not identify the person or 50.31 persons with respect to whose liability the subpoena is issued, 50.32 but only if (a) the subpoena relates to the investigation of a 50.33 particular person or ascertainable group or class of persons, 50.34 (b) there is a reasonable basis for believing that such person 50.35 or group or class of persons may fail or may have failed to 50.36 comply with any law administered by the commissioner, (c) the 51.1 information sought to be obtained from the examination of the 51.2 records (and the identity of the person or persons with respect 51.3 to whose liability the subpoena is issued) is not readily 51.4 available from other sources, (d) the subpoena is clear and 51.5 specific as to the information sought to be obtained, and (e) 51.6 the information sought to be obtained is limited solely to the 51.7 scope of the investigation. Provided further that the party 51.8 served with a subpoena which does not identify the person or 51.9 persons with respect to whose tax liability the subpoena is 51.10 issued shall have the right, within 20 days after service of the 51.11 subpoena, to petition the district court for the judicial 51.12 district in which lies the county in which that party is located 51.13 for a determination as to whether the commissioner of revenue 51.14 has complied with all the requirements in (a) to (e), and thus, 51.15 whether the subpoena is enforceable. If no such petition is 51.16 made by the party served within the time prescribed, the 51.17 subpoena shall have the force and effect of a court order; 51.18 (9) cause the deposition of witnesses residing within or 51.19 without the state, or absent therefrom, to be taken, upon notice 51.20 to the interested party, if any, in like manner that depositions 51.21 of witnesses are taken in civil actions in the district court, 51.22 in any matter which the commissioner may have authority to 51.23 investigate or determine; 51.24 (10) investigate the tax laws of other states and countries 51.25 and to formulate and submit to the legislature such legislation 51.26 as the commissioner may deem expedient to prevent evasions of 51.27 assessment and taxing laws, and secure just and equal taxation 51.28 and improvement in the system of assessment and taxation in this 51.29 state; 51.30 (11) consult and confer with the governor upon the subject 51.31 of taxation, the administration of the laws in regard thereto, 51.32 and the progress of the work of the department of revenue, and 51.33 furnish the governor, from time to time, such assistance and 51.34 information as the governor may require relating to tax matters; 51.35 (12) transmit to the governor, on or before the third 51.36 Monday in December of each even-numbered year, and to each 52.1 member of the legislature, on or before November 15 of each 52.2 even-numbered year, the report of the department of revenue for 52.3 the preceding years, showing all the taxable property in the 52.4 state and the value of the same, in tabulated form; 52.5 (13) inquire into the methods of assessment and taxation 52.6 and ascertain whether the assessors faithfully discharge their 52.7 duties, particularly as to their compliance with the laws 52.8 requiring the assessment of all property not exempt from 52.9 taxation; 52.10 (14) administer and enforce the assessment and collection 52.11 of state taxes and fees, including the use of any remedy 52.12 available to nongovernmental creditors, and, from time to time, 52.13 make, publish, and distribute rules for the administration and 52.14 enforcement ofassessments and feeslaws administered by the 52.15 commissioner and state tax laws. The rules have the force of 52.16 law; 52.17 (15) prepare blank forms for the returns required by state 52.18 tax law and distribute them throughout the state, furnishing 52.19 them subject to charge on application; 52.20 (16) prescribe rules governing the qualification and 52.21 practice of agents, attorneys, or other persons representing 52.22 taxpayers before the commissioner. The rules may require that 52.23 those persons, agents, and attorneys show that they are of good 52.24 character and in good repute, have the necessary qualifications 52.25 to give taxpayers valuable services, and are otherwise competent 52.26 to advise and assist taxpayers in the presentation of their case 52.27 before being recognized as representatives of taxpayers. After 52.28 due notice and opportunity for hearing, the commissioner may 52.29 suspend and bar from further practice before the commissioner 52.30 any person, agent, or attorney who is shown to be incompetent or 52.31 disreputable, who refuses to comply with the rules, or who with 52.32 intent to defraud, willfully or knowingly deceives, misleads, or 52.33 threatens a taxpayer or prospective taxpayer, by words, 52.34 circular, letter, or by advertisement. This clause does not 52.35 curtail the rights of individuals to appear in their own behalf 52.36 or partners or corporations' officers to appear in behalf of 53.1 their respective partnerships or corporations; 53.2 (17) appoint agents as the commissioner considers necessary 53.3 to make examinations and determinations. The agents have the 53.4 rights and powers conferred on the commissioner to subpoena, 53.5 examine, and copy books, records, papers, or memoranda, subpoena 53.6 witnesses, administer oaths and affirmations, and take 53.7 testimony. In addition to administrative subpoenas of the 53.8 commissioner and the agents, upon demand of the commissioner or 53.9 an agent, the court administrator of any district court shall 53.10 issue a subpoena for the attendance of a witness or the 53.11 production of books, papers, records, or memoranda before the 53.12 agent for inspection and copying. Disobedience of a court 53.13 administrator's subpoena shall be punished by the district court 53.14 of the district in which the subpoena is issued, or in the case 53.15 of a subpoena issued by the commissioner or an agent, by the 53.16 district court of the district in which the party served with 53.17 the subpoena is located, in the same manner as contempt of the 53.18 district court; 53.19 (18) appoint and employ additional help, purchase supplies 53.20 or materials, or incur other expenditures in the enforcement of 53.21 state tax laws as considered necessary. The salaries of all 53.22 agents and employees provided for in this chapter shall be fixed 53.23 by the appointing authority, subject to the approval of the 53.24 commissioner of administration; 53.25 (19) execute and administer any agreement with the 53.26 secretary of the treasury of the United States or a 53.27 representative of another state regarding the exchange of 53.28 information and administration of the tax laws; 53.29 (20) authorize the use of unmarked motor vehicles to 53.30 conduct seizures or criminal investigations pursuant to the 53.31 commissioner's authority; and 53.32 (21) exercise other powers and perform other duties 53.33 required of or imposed upon the commissioner of revenue by law. 53.34[EFFECTIVE DATE.] This section is effective the day 53.35 following final enactment. 53.36 Sec. 2. Minnesota Statutes 2002, section 270.10, 54.1 subdivision 1a, is amended to read: 54.2 Subd. 1a. [NOTIFICATION TO TAXPAYER.] At the same time 54.3 that notice of the assessment, determination, or order of the 54.4 commissioner is given to a taxpayer, the taxpayer must be 54.5 notified in writing of the right to appeal to the tax court, and 54.6 if applicable, to the small claims division. Except in the case 54.7 of mathematical or clerical errors, the notice must contain a 54.8 description of the basis for, including applicable law and other 54.9 factors considered in the determination, and a listing of the 54.10 amounts of tax due, interest, additions to tax, and penalties. 54.11 Failure to provide all the required information does not 54.12 invalidate the notice for purposes of satisfying statutory 54.13 notice requirements if the notice contains sufficient 54.14 information to advise the taxpayer that an assessment, order, or 54.15 other determination has been made. The taxpayer may request 54.16 further clarification within the time provided for appealing the 54.17 determination.In any notice of assessment, determination, or54.18order dealing with property valuation or assessment for property54.19tax purposes by the commissioner of revenue or a local unit of54.20government, the taxpayer must be notified in writing that a54.21taxpayer must appeal to the town or city board of equalization54.22and to the county board of equalization before appealing to the54.23small claims division of the tax court, except for those54.24taxpayers whose original assessments are determined by the54.25commissioner of revenue.54.26[EFFECTIVE DATE.] This section is effective the day 54.27 following final enactment. 54.28 Sec. 3. Minnesota Statutes 2002, section 272.02, is 54.29 amended by adding a subdivision to read: 54.30 Subd. 56. [COMPREHENSIVE HEALTH ASSOCIATION.] All property 54.31 owned by the comprehensive health association is exempt to the 54.32 extent provided in section 62E.10, subdivision 1. 54.33[EFFECTIVE DATE.] This section is effective the day 54.34 following final enactment. 54.35 Sec. 4. Minnesota Statutes 2002, section 272.02, is 54.36 amended by adding a subdivision to read: 55.1 Subd. 57. [PRIVATE CEMETERIES.] All property owned by 55.2 private cemeteries is exempt to the extent provided in section 55.3 307.09. 55.4[EFFECTIVE DATE.] This section is effective the day 55.5 following final enactment. 55.6 Sec. 5. Minnesota Statutes 2002, section 272.02, is 55.7 amended by adding a subdivision to read: 55.8 Subd. 58. [WESTERN LAKE SUPERIOR SANITARY BOARD.] All 55.9 property owned, leased, controlled, used, or occupied for 55.10 public, governmental, and municipal purposes by the Western Lake 55.11 Superior Sanitary Board is exempt to the extent provided in 55.12 section 458D.23. 55.13[EFFECTIVE DATE.] This section is effective the day 55.14 following final enactment. 55.15 Sec. 6. Minnesota Statutes 2002, section 272.02, is 55.16 amended by adding a subdivision to read: 55.17 Subd. 59. [UNFINISHED SALE OR RENTAL PROJECTS.] Unfinished 55.18 sale or rental projects are exempt to the extent provided in 55.19 section 469.155, subdivision 17. 55.20[EFFECTIVE DATE.] This section is effective the day 55.21 following final enactment. 55.22 Sec. 7. Minnesota Statutes 2002, section 272.02, is 55.23 amended by adding a subdivision to read: 55.24 Subd. 60. [SKYWAYS.] The pedestrian skyway system, 55.25 underground pedestrian concourse, the people mover system, and 55.26 publicly owned parking structures are exempt to the extent 55.27 provided in section 469.127. 55.28[EFFECTIVE DATE.] This section is effective the day 55.29 following final enactment. 55.30 Sec. 8. Minnesota Statutes 2002, section 272.02, is 55.31 amended by adding a subdivision to read: 55.32 Subd. 61. [MUNICIPAL RECREATION FACILITIES.] All property 55.33 acquired and used by a city is exempt to the extent provided in 55.34 section 471.191, subdivision 4. 55.35[EFFECTIVE DATE.] This section is effective the day 55.36 following final enactment. 56.1 Sec. 9. Minnesota Statutes 2002, section 272.02, is 56.2 amended by adding a subdivision to read: 56.3 Subd. 62. [WATER AND WASTEWATER TREATMENT 56.4 FACILITIES.] Related facilities owned by water and wastewater 56.5 treatment providers who have contracted with a municipality to 56.6 provide capital intensive public services to the municipality 56.7 are exempt to the extent provided in section 471A.05. 56.8[EFFECTIVE DATE.] This section is effective the day 56.9 following final enactment. 56.10 Sec. 10. Minnesota Statutes 2002, section 272.12, is 56.11 amended to read: 56.12 272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.] 56.13 When: 56.14 (a) a deed or other instrument conveying land, 56.15 (b) a plat of any town site or addition thereto, 56.16 (c) a survey required pursuant to section 508.47, 56.17 (d) a condominium plat subject to chapter 515 or 515A or a 56.18 declaration that contains such a plat, or 56.19 (e) a common interest community plat subject to chapter 56.20 515B or a declaration that contains such a plat, 56.21 is presented to the county auditor for transfer, the auditor 56.22 shall ascertain from the records if there be taxes delinquent 56.23 upon the land described therein, or if it has been sold for 56.24 taxes. An assignment of a sheriff's or referee's certificate of 56.25 sale, when the certificate of sale describes real estate, and 56.26 certificates of redemption from mortgage or lien foreclosure 56.27 sales, when the certificate of redemption encompasses real 56.28 estate and is issued to a junior creditor, are considered 56.29 instruments conveying land for the purposes of this section and 56.30 section 272.121. If there are taxes delinquent, the auditor 56.31 shall certify to the same; and upon payment of such taxes, or in 56.32 case no taxes are delinquent, shall transfer the land upon the 56.33 books of the auditor's office, and note upon the instrument, 56.34 over official signature, the words, "no delinquent taxes and 56.35 transfer entered," or, if the land described has been sold or 56.36 assigned to an actual purchaser for taxes, the words "paid by 57.1 sale of land described within;" and, unless such statement is 57.2 made upon such instrument, the county recorder or the registrar 57.3 of titles shall refuse to receive or record the same; provided, 57.4 that sheriff's or referees' certificates of sale on execution or 57.5 foreclosure of a lien or mortgage, certificates of redemption 57.6 from mortgage or lien foreclosure sales issued to the redeeming 57.7 mortgagor or lienee, deeds of distribution made by a personal 57.8 representative in probate proceedings, decrees and judgments, 57.9 receivers receipts, patents, and copies of town or statutory 57.10 city plats, in case the original plat filed in the office of the 57.11 county recorder has been lost or destroyed, and the instruments 57.12 releasing, removing and discharging reversionary and forfeiture 57.13 provisions affecting title to land and instruments releasing, 57.14 removing or discharging easement rights in land or building or 57.15 other restrictions, may be recorded without such certificate; 57.16 and, provided that instruments conveying land and, as 57.17 appurtenant thereto an easement over adjacent tract or tracts of 57.18 land, may be recorded without such certificate as to the land 57.19 covered by such easement; and provided further, that any 57.20 instrument granting an easement made in favor of any public 57.21 utility or pipe line for conveying gas, liquids or solids in 57.22 suspension, in the nature of a right-of-way over, along, across 57.23 or under a tract of land may be recorded without such 57.24 certificate as to the land covered by such easement.Any57.25instrument amending or restating the declarations, bylaws,57.26plats, or other enablingDocuments governing homeowners 57.27 associations of condominiums, townhouses, common interest 57.28 ownership communities, and other planned unit developments may 57.29 be recorded without the auditor's certificate to the extent 57.30 provided in section 515B.1-116(f). 57.31 A deed of distribution made by a personal representative in 57.32 a probate proceeding, a decree, or a judgment that conveys land 57.33 shall be presented to the county auditor, who shall transfer the 57.34 land upon the books of the auditor's office and note upon the 57.35 instrument, over official signature, the words, "transfer 57.36 entered", and the instrument may then be recorded. A decree or 58.1 judgment that affects title to land but does not convey land may 58.2 be recorded without presentation to the auditor. 58.3 A violation of this section by the county recorder or the 58.4 registrar of titles shall be a gross misdemeanor, and, in 58.5 addition to the punishment therefor, the recorder or registrar 58.6 shall be liable to the grantee of any instrument so recorded for 58.7 the amount of any damages sustained. 58.8 When, as a condition to permitting the recording of deed or 58.9 other instrument affecting the title to real estate previously 58.10 forfeited to the state under the provisions of sections 281.16 58.11 to 281.25, county officials, after such real estate has been 58.12 purchased or repurchased, have required the payment of taxes 58.13 erroneously assumed to have accrued against such real estate 58.14 after forfeiture and before the date of purchase or repurchase, 58.15 the sum required to be so paid shall be refunded to the persons 58.16 entitled thereto out of moneys in the funds in which the sum so 58.17 paid was placed. Delinquent taxes are those taxes deemed 58.18 delinquent under section 279.02. 58.19[EFFECTIVE DATE.] This section is effective for deeds or 58.20 instruments accepted for recording or registration on or after 58.21 July 1, 2003. 58.22 Sec. 11. Minnesota Statutes 2002, section 273.05, 58.23 subdivision 1, is amended to read: 58.24 Subdivision 1. [APPOINTMENT OF TOWN AND CITY ASSESSORS.] 58.25 Notwithstanding any other provision of law all town assessors 58.26 shall be appointed by the town board, and notwithstanding any 58.27 charter provisions to the contrary, all city assessors shall be 58.28 appointed by the city council or other appointing authority as 58.29 provided by law or charter.Such assessors shall be residents58.30of the state but need not be a resident of the town or city for58.31which they are appointed.They shall be selected and appointed 58.32 because of their knowledge and training in the field of property 58.33 taxation. All town and statutory city assessors shall be 58.34 appointed for indefinite terms. A town or statutory city 58.35 assessor who is an employee may be dismissed by the appointing 58.36 authority for cause. The term of the town or city assessors may 59.1 be terminated at any time by the town board or city council on 59.2 charges by the commissioner of revenue of inefficiency or 59.3 neglect of duty. Vacancies in the office of town or city 59.4 assessor shall be filled within 90 days by appointment of the 59.5 respective appointing authority indicated above. If the vacancy 59.6 is not filled within 90 days, the office shall be terminated. 59.7 When a vacancy in the office of town or city assessor is not 59.8 filled by appointment, and it is imperative that the office of 59.9 assessor be filled, the county auditor shall appoint some 59.10 resident of the county as assessor for such town or city. The 59.11 county auditor may appoint the county assessor as assessor for 59.12 such town or city, in which case the town or city shall pay to 59.13 the county treasurer the amount determined by the county auditor 59.14 to be due for the services performed and expenses incurred by 59.15 the county assessor in acting as assessor for such town or 59.16 city. The term of any town or statutory city assessor in a 59.17 county electing in accordance with section 273.052 shall be 59.18 terminated as provided in section 273.055. 59.19 The commissioner of revenue may recommend to the state 59.20 board of assessors the nonrenewal, suspension, or revocation of 59.21 an assessor's license as provided in sections 270.41 to 270.53. 59.22[EFFECTIVE DATE.] This section is effective the day 59.23 following final enactment and applies to every town or city 59.24 assessor whether that assessor was appointed before, on, or 59.25 after the effective date. 59.26 Sec. 12. Minnesota Statutes 2002, section 273.061, is 59.27 amended by adding a subdivision to read: 59.28 Subd. 1a. [COMPATIBLE OFFICES.] A person appointed as the 59.29 county assessor also may serve as the county auditor, county 59.30 treasurer, or county auditor-treasurer if those offices are 59.31 appointive, provided that the person in the combined appointed 59.32 office must not serve on the county board of appeal and 59.33 equalization under section 274.13. In a county in which the 59.34 functions of the county assessor are combined with those of the 59.35 county auditor or county auditor-treasurer, the county board may 59.36 not delegate any authority, power, or responsibility under 60.1 section 375.192, subdivision 4. 60.2[EFFECTIVE DATE.] This section is effective January 2, 2004. 60.3 Sec. 13. Minnesota Statutes 2002, section 273.061, is 60.4 amended by adding a subdivision to read: 60.5 Subd. 1b. [COMPATIBLE OFFICES IN COUNTIES CHANGING TO 60.6 APPOINTED AUDITOR.] In a county in which the office of auditor, 60.7 treasurer, or auditor-treasurer is an elective position, a 60.8 person appointed as the county assessor also may serve as the 60.9 county auditor, county treasurer, or county auditor-treasurer if 60.10 a proposal to make the affected office appointive has been 60.11 approved as required by other law and will be effective within 60.12 five years. 60.13[EFFECTIVE DATE.] This section is effective January 2, 2004. 60.14 Sec. 14. Minnesota Statutes 2002, section 273.061, is 60.15 amended by adding a subdivision to read: 60.16 Subd. 1c. [INCOMPATIBLE OFFICES.] The person appointed as 60.17 the county assessor must not also be the county attorney, a 60.18 county board member, an elected county auditor, an elected 60.19 county treasurer, an elected county auditor-treasurer, a town 60.20 board supervisor for a town in the same county, or a city mayor 60.21 or council member for a city in the same county. The person 60.22 appointed as the city assessor must not also be a city council 60.23 member or mayor for the same city. A person appointed as the 60.24 town assessor must not also be a town board supervisor for the 60.25 same town. Except as provided in subdivision 1b, an assessor 60.26 who accepts a position that is incompatible with the office of 60.27 assessor is deemed to have resigned from the assessor position. 60.28[EFFECTIVE DATE.] This section is effective January 2, 2004. 60.29 Sec. 15. Minnesota Statutes 2002, section 273.11, 60.30 subdivision 1a, is amended to read: 60.31 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 60.32 property classified as agricultural homestead or nonhomestead, 60.33 residential homestead or nonhomestead, timber, or noncommercial 60.34 seasonal residential recreationalresidential, the assessor 60.35 shall compare the value with the taxable portion of the value 60.36 determined in the preceding assessment. 61.1 For assessment year 2002, the amount of the increase shall 61.2 not exceed the greater of (1) ten percent of the value in the 61.3 preceding assessment, or (2) 15 percent of the difference 61.4 between the current assessment and the preceding assessment. 61.5 For assessment year 2003, the amount of the increase shall 61.6 not exceed the greater of (1) 12 percent of the value in the 61.7 preceding assessment, or (2) 20 percent of the difference 61.8 between the current assessment and the preceding assessment. 61.9 For assessment year 2004, the amount of the increase shall 61.10 not exceed the greater of (1) 15 percent of the value in the 61.11 preceding assessment, or (2) 25 percent of the difference 61.12 between the current assessment and the preceding assessment. 61.13 For assessment year 2005, the amount of the increase shall 61.14 not exceed the greater of (1) 15 percent of the value in the 61.15 preceding assessment, or (2) 33 percent of the difference 61.16 between the current assessment and the preceding assessment. 61.17 For assessment year 2006, the amount of the increase shall 61.18 not exceed the greater of (1) 15 percent of the value in the 61.19 preceding assessment, or (2) 50 percent of the difference 61.20 between the current assessment and the preceding assessment. 61.21 This limitation shall not apply to increases in value due 61.22 to improvements. For purposes of this subdivision, the term 61.23 "assessment" means the value prior to any exclusion under 61.24 subdivision 16. 61.25 The provisions of this subdivision shall be in effect 61.26 through assessment year 2006 as provided in this subdivision. 61.27 For purposes of the assessment/sales ratio study conducted 61.28 under section 127A.48, and the computation of state aids paid 61.29 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 61.30 477A, market values and net tax capacities determined under this 61.31 subdivision and subdivision 16, shall be used. 61.32[EFFECTIVE DATE.] This section is effective the day 61.33 following final enactment. 61.34 Sec. 16. Minnesota Statutes 2002, section 273.124, 61.35 subdivision 1, is amended to read: 61.36 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 62.1 that is occupied and used for the purposes of a homestead by its 62.2 owner, who must be a Minnesota resident, is a residential 62.3 homestead. 62.4 Agricultural land, as defined in section 273.13, 62.5 subdivision 23, that is occupied and used as a homestead by its 62.6 owner, who must be a Minnesota resident, is an agricultural 62.7 homestead. 62.8 Dates for establishment of a homestead and homestead 62.9 treatment provided to particular types of property are as 62.10 provided in this section. 62.11 Property held by a trustee under a trust is eligible for 62.12 homestead classification if the requirements under this chapter 62.13 are satisfied. 62.14 The assessor shall require proof, as provided in 62.15 subdivision 13, of the facts upon which classification as a 62.16 homestead may be determined. Notwithstanding any other law, the 62.17 assessor may at any time require a homestead application to be 62.18 filed in order to verify that any property classified as a 62.19 homestead continues to be eligible for homestead status. 62.20 Notwithstanding any other law to the contrary, the department of 62.21 revenue may, upon request from an assessor, verify whether an 62.22 individual who is requesting or receiving homestead 62.23 classification has filed a Minnesota income tax return as a 62.24 resident for the most recent taxable year for which the 62.25 information is available. 62.26 When there is a name change or a transfer of homestead 62.27 property, the assessor may reclassify the property in the next 62.28 assessment unless a homestead application is filed to verify 62.29 that the property continues to qualify for homestead 62.30 classification. 62.31 (b) For purposes of this section, homestead property shall 62.32 include property which is used for purposes of the homestead but 62.33 is separated from the homestead by a road, street, lot, 62.34 waterway, or other similar intervening property. The term "used 62.35 for purposes of the homestead" shall include but not be limited 62.36 to uses for gardens, garages, or other outbuildings commonly 63.1 associated with a homestead, but shall not include vacant land 63.2 held primarily for future development. In order to receive 63.3 homestead treatment for the noncontiguous property, the owner 63.4 must use the property for the purposes of the homestead, and 63.5 must apply to the assessor, both by the deadlines given in 63.6 subdivision 9. After initial qualification for the homestead 63.7 treatment, additional applications for subsequent years are not 63.8 required. 63.9 (c) Residential real estate that is occupied and used for 63.10 purposes of a homestead by a relative of the owner is a 63.11 homestead but only to the extent of the homestead treatment that 63.12 would be provided if the related owner occupied the property. 63.13 For purposes of this paragraph and paragraph (g), "relative" 63.14 means a parent, stepparent, child, stepchild, grandparent, 63.15 grandchild, brother, sister, uncle, aunt, nephew, or niece. 63.16 This relationship may be by blood or marriage. Property that 63.17 has been classified as seasonal residential recreational 63.18residentialproperty at any time during which it has been owned 63.19 by the current owner or spouse of the current owner will not be 63.20 reclassified as a homestead unless it is occupied as a homestead 63.21 by the owner; this prohibition also applies to property that, in 63.22 the absence of this paragraph, would have been classified as 63.23 seasonal residential recreationalresidentialproperty at the 63.24 time when the residence was constructed. Neither the related 63.25 occupant nor the owner of the property may claim a property tax 63.26 refund under chapter 290A for a homestead occupied by a 63.27 relative. In the case of a residence located on agricultural 63.28 land, only the house, garage, and immediately surrounding one 63.29 acre of land shall be classified as a homestead under this 63.30 paragraph, except as provided in paragraph (d). 63.31 (d) Agricultural property that is occupied and used for 63.32 purposes of a homestead by a relative of the owner, is a 63.33 homestead, only to the extent of the homestead treatment that 63.34 would be provided if the related owner occupied the property, 63.35 and only if all of the following criteria are met: 63.36 (1) the relative who is occupying the agricultural property 64.1 is a son, daughter, grandson, granddaughter, father, or mother 64.2 of the owner of the agricultural property or a son, daughter, 64.3 grandson, or granddaughter of the spouse of the owner of the 64.4 agricultural property; 64.5 (2) the owner of the agricultural property must be a 64.6 Minnesota resident; 64.7 (3) the owner of the agricultural property must not receive 64.8 homestead treatment on any other agricultural property in 64.9 Minnesota; and 64.10 (4) the owner of the agricultural property is limited to 64.11 only one agricultural homestead per family under this paragraph. 64.12 Neither the related occupant nor the owner of the property 64.13 may claim a property tax refund under chapter 290A for a 64.14 homestead occupied by a relative qualifying under this 64.15 paragraph. For purposes of this paragraph, "agricultural 64.16 property" means the house, garage, other farm buildings and 64.17 structures, and agricultural land. 64.18 Application must be made to the assessor by the owner of 64.19 the agricultural property to receive homestead benefits under 64.20 this paragraph. The assessor may require the necessary proof 64.21 that the requirements under this paragraph have been met. 64.22 (e) In the case of property owned by a property owner who 64.23 is married, the assessor must not deny homestead treatment in 64.24 whole or in part if only one of the spouses occupies the 64.25 property and the other spouse is absent due to: (1) marriage 64.26 dissolution proceedings, (2) legal separation, (3) employment or 64.27 self-employment in another location, or (4) other personal 64.28 circumstances causing the spouses to live separately, not 64.29 including an intent to obtain two homestead classifications for 64.30 property tax purposes. To qualify under clause (3), the 64.31 spouse's place of employment or self-employment must be at least 64.32 50 miles distant from the other spouse's place of employment, 64.33 and the homesteads must be at least 50 miles distant from each 64.34 other. Homestead treatment, in whole or in part, shall not be 64.35 denied to the owner's spouse who previously occupied the 64.36 residence with the owner if the absence of the owner is due to 65.1 one of the exceptions provided in this paragraph. 65.2 (f) The assessor must not deny homestead treatment in whole 65.3 or in part if: 65.4 (1) in the case of a property owner who is not married, the 65.5 owner is absent due to residence in a nursing home, boarding 65.6 care facility, or an elderly assisted living facility property 65.7 as defined in section 273.13, subdivision 25a, and the property 65.8 is not otherwise occupied; or 65.9 (2) in the case of a property owner who is married, the 65.10 owner or the owner's spouse or both are absent due to residence 65.11 in a nursing home, boarding care facility, or an elderly 65.12 assisted living facility property as defined in section 273.13, 65.13 subdivision 25a, and the property is not occupied or is occupied 65.14 only by the owner's spouse. 65.15 (g) If an individual is purchasing property with the intent 65.16 of claiming it as a homestead and is required by the terms of 65.17 the financing agreement to have a relative shown on the deed as 65.18 a coowner, the assessor shall allow a full homestead 65.19 classification. This provision only applies to first-time 65.20 purchasers, whether married or single, or to a person who had 65.21 previously been married and is purchasing as a single individual 65.22 for the first time. The application for homestead benefits must 65.23 be on a form prescribed by the commissioner and must contain the 65.24 data necessary for the assessor to determine if full homestead 65.25 benefits are warranted. 65.26 (h) If residential or agricultural real estate is occupied 65.27 and used for purposes of a homestead by a child of a deceased 65.28 owner and the property is subject to jurisdiction of probate 65.29 court, the child shall receive relative homestead classification 65.30 under paragraph (c) or (d) to the same extent they would be 65.31 entitled to it if the owner was still living, until the probate 65.32 is completed. For purposes of this paragraph, "child" includes 65.33 a relationship by blood or by marriage. 65.34[EFFECTIVE DATE.] This section is effective the day 65.35 following final enactment. 65.36 Sec. 17. Minnesota Statutes 2002, section 273.13, 66.1 subdivision 25, is amended to read: 66.2 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 66.3 estate containing four or more units and used or held for use by 66.4 the owner or by the tenants or lessees of the owner as a 66.5 residence for rental periods of 30 days or more. Class 4a also 66.6 includes hospitals licensed under sections 144.50 to 144.56, 66.7 other than hospitals exempt under section 272.02, and contiguous 66.8 property used for hospital purposes, without regard to whether 66.9 the property has been platted or subdivided. The market value 66.10 of class 4a property has a class rate of 1.8 percent for taxes 66.11 payable in 2002, 1.5 percent for taxes payable in 2003, and 1.25 66.12 percent for taxes payable in 2004 and thereafter, except that 66.13 class 4a property consisting of a structure for which 66.14 construction commenced after June 30, 2001, has a class rate of 66.15 1.25 percent of market value for taxes payable in 2003 and 66.16 subsequent years. 66.17 (b) Class 4b includes: 66.18 (1) residential real estate containing less than four units 66.19 that does not qualify as class 4bb, other than seasonal 66.20 residential, andrecreational property; 66.21 (2) manufactured homes not classified under any other 66.22 provision; 66.23 (3) a dwelling, garage, and surrounding one acre of 66.24 property on a nonhomestead farm classified under subdivision 23, 66.25 paragraph (b) containing two or three units; and 66.26 (4) unimproved property that is classified residential as 66.27 determined under subdivision 33. 66.28 The market value of class 4b property has a class rate of 66.29 1.5 percent for taxes payable in 2002, and 1.25 percent for 66.30 taxes payable in 2003 and thereafter. 66.31 (c) Class 4bb includes: 66.32 (1) nonhomestead residential real estate containing one 66.33 unit, other than seasonal residential, andrecreational 66.34 property; and 66.35 (2) a single family dwelling, garage, and surrounding one 66.36 acre of property on a nonhomestead farm classified under 67.1 subdivision 23, paragraph (b). 67.2 Class 4bb property has the same class rates as class 1a 67.3 property under subdivision 22. 67.4 Property that has been classified as seasonalrecreational67.5 residential recreational property at any time during which it 67.6 has been owned by the current owner or spouse of the current 67.7 owner does not qualify for class 4bb. 67.8 (d) Class 4c property includes: 67.9 (1) except as provided in subdivision 22, paragraph (c), 67.10 real property devoted to temporary and seasonal residential 67.11 occupancy for recreation purposes, including real property 67.12 devoted to temporary and seasonal residential occupancy for 67.13 recreation purposes and not devoted to commercial purposes for 67.14 more than 250 days in the year preceding the year of 67.15 assessment. For purposes of this clause, property is devoted to 67.16 a commercial purpose on a specific day if any portion of the 67.17 property is used for residential occupancy, and a fee is charged 67.18 for residential occupancy. In order for a property to be 67.19 classified as class 4c, seasonal residential recreational 67.20residentialfor commercial purposes, at least 40 percent of the 67.21 annual gross lodging receipts related to the property must be 67.22 from business conducted during 90 consecutive days and either 67.23 (i) at least 60 percent of all paid bookings by lodging guests 67.24 during the year must be for periods of at least two consecutive 67.25 nights; or (ii) at least 20 percent of the annual gross receipts 67.26 must be from charges for rental of fish houses, boats and 67.27 motors, snowmobiles, downhill or cross-country ski equipment, or 67.28 charges for marina services, launch services, and guide 67.29 services, or the sale of bait and fishing tackle. For purposes 67.30 of this determination, a paid booking of five or more nights 67.31 shall be counted as two bookings. Class 4c also includes 67.32 commercial use real property used exclusively for recreational 67.33 purposes in conjunction with class 4c property devoted to 67.34 temporary and seasonal residential occupancy for recreational 67.35 purposes, up to a total of two acres, provided the property is 67.36 not devoted to commercial recreational use for more than 250 68.1 days in the year preceding the year of assessment and is located 68.2 within two miles of the class 4c property with which it is 68.3 used. Class 4c property classified in this clause also includes 68.4 the remainder of class 1c resorts provided that the entire 68.5 property including that portion of the property classified as 68.6 class 1c also meets the requirements for class 4c under this 68.7 clause; otherwise the entire property is classified as class 3. 68.8 Owners of real property devoted to temporary and seasonal 68.9 residential occupancy for recreation purposes and all or a 68.10 portion of which was devoted to commercial purposes for not more 68.11 than 250 days in the year preceding the year of assessment 68.12 desiring classification as class 1c or 4c, must submit a 68.13 declaration to the assessor designating the cabins or units 68.14 occupied for 250 days or less in the year preceding the year of 68.15 assessment by January 15 of the assessment year. Those cabins 68.16 or units and a proportionate share of the land on which they are 68.17 located will be designated class 1c or 4c as otherwise 68.18 provided. The remainder of the cabins or units and a 68.19 proportionate share of the land on which they are located will 68.20 be designated as class 3a. The owner of property desiring 68.21 designation as class 1c or 4c property must provide guest 68.22 registers or other records demonstrating that the units for 68.23 which class 1c or 4c designation is sought were not occupied for 68.24 more than 250 days in the year preceding the assessment if so 68.25 requested. The portion of a property operated as a (1) 68.26 restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 68.27 facility operated on a commercial basis not directly related to 68.28 temporary and seasonal residential occupancy for recreation 68.29 purposes shall not qualify for class 1c or 4c; 68.30 (2) qualified property used as a golf course if: 68.31 (i) it is open to the public on a daily fee basis. It may 68.32 charge membership fees or dues, but a membership fee may not be 68.33 required in order to use the property for golfing, and its green 68.34 fees for golfing must be comparable to green fees typically 68.35 charged by municipal courses; and 68.36 (ii) it meets the requirements of section 273.112, 69.1 subdivision 3, paragraph (d). 69.2 A structure used as a clubhouse, restaurant, or place of 69.3 refreshment in conjunction with the golf course is classified as 69.4 class 3a property; 69.5 (3) real property up to a maximum of one acre of land owned 69.6 by a nonprofit community service oriented organization; provided 69.7 that the property is not used for a revenue-producing activity 69.8 for more than six days in the calendar year preceding the year 69.9 of assessment and the property is not used for residential 69.10 purposes on either a temporary or permanent basis. For purposes 69.11 of this clause, a "nonprofit community service oriented 69.12 organization" means any corporation, society, association, 69.13 foundation, or institution organized and operated exclusively 69.14 for charitable, religious, fraternal, civic, or educational 69.15 purposes, and which is exempt from federal income taxation 69.16 pursuant to section 501(c)(3), (10), or (19) of the Internal 69.17 Revenue Code of 1986, as amended through December 31, 1990. For 69.18 purposes of this clause, "revenue-producing activities" shall 69.19 include but not be limited to property or that portion of the 69.20 property that is used as an on-sale intoxicating liquor or 3.2 69.21 percent malt liquor establishment licensed under chapter 340A, a 69.22 restaurant open to the public, bowling alley, a retail store, 69.23 gambling conducted by organizations licensed under chapter 349, 69.24 an insurance business, or office or other space leased or rented 69.25 to a lessee who conducts a for-profit enterprise on the 69.26 premises. Any portion of the property which is used for 69.27 revenue-producing activities for more than six days in the 69.28 calendar year preceding the year of assessment shall be assessed 69.29 as class 3a. The use of the property for social events open 69.30 exclusively to members and their guests for periods of less than 69.31 24 hours, when an admission is not charged nor any revenues are 69.32 received by the organization shall not be considered a 69.33 revenue-producing activity; 69.34 (4) post-secondary student housing of not more than one 69.35 acre of land that is owned by a nonprofit corporation organized 69.36 under chapter 317A and is used exclusively by a student 70.1 cooperative, sorority, or fraternity for on-campus housing or 70.2 housing located within two miles of the border of a college 70.3 campus; 70.4 (5) manufactured home parks as defined in section 327.14, 70.5 subdivision 3; 70.6 (6) real property that is actively and exclusively devoted 70.7 to indoor fitness, health, social, recreational, and related 70.8 uses, is owned and operated by a not-for-profit corporation, and 70.9 is located within the metropolitan area as defined in section 70.10 473.121, subdivision 2; 70.11 (7) a leased or privately owned noncommercial aircraft 70.12 storage hangar not exempt under section 272.01, subdivision 2, 70.13 and the land on which it is located, provided that: 70.14 (i) the land is on an airport owned or operated by a city, 70.15 town, county, metropolitan airports commission, or group 70.16 thereof; and 70.17 (ii) the land lease, or any ordinance or signed agreement 70.18 restricting the use of the leased premise, prohibits commercial 70.19 activity performed at the hangar. 70.20 If a hangar classified under this clause is sold after June 70.21 30, 2000, a bill of sale must be filed by the new owner with the 70.22 assessor of the county where the property is located within 60 70.23 days of the sale; and 70.24 (8) residential real estate, a portion of which is used by 70.25 the owner for homestead purposes, and that is also a place of 70.26 lodging, if all of the following criteria are met: 70.27 (i) rooms are provided for rent to transient guests that 70.28 generally stay for periods of 14 or fewer days; 70.29 (ii) meals are provided to persons who rent rooms, the cost 70.30 of which is incorporated in the basic room rate; 70.31 (iii) meals are not provided to the general public except 70.32 for special events on fewer than seven days in the calendar year 70.33 preceding the year of the assessment; and 70.34 (iv) the owner is the operator of the property. 70.35 The market value subject to the 4c classification under this 70.36 clause is limited to five rental units. Any rental units on the 71.1 property in excess of five, must be valued and assessed as class 71.2 3a. The portion of the property used for purposes of a 71.3 homestead by the owner must be classified as class 1a property 71.4 under subdivision 22. 71.5 Class 4c property has a class rate of 1.5 percent of market 71.6 value, except that (i) each parcel of seasonal residential 71.7 recreational property not used for commercial purposes has the 71.8 same class rates as class 4bb property, (ii) manufactured home 71.9 parks assessed under clause (5) have the same class rate as 71.10 class 4b property, (iii) commercial-use seasonal residential 71.11 recreational property has a class rate of one percent for the 71.12 first $500,000 of market value, which includes any market value 71.13 receiving the one percent rate under subdivision 22, and 1.25 71.14 percent for the remaining market value, (iv) the market value of 71.15 property described in clause (4) has a class rate of one 71.16 percent, (v) the market value of property described in clauses 71.17 (2) and (6) has a class rate of 1.25 percent, and (vi) that 71.18 portion of the market value of property in clause (8) qualifying 71.19 for class 4c property has a class rate of 1.25 percent. 71.20 (e) Class 4d property is qualifying low-income rental 71.21 housing certified to the assessor by the housing finance agency 71.22 under sections 273.126 and 462A.071. Class 4d includes land in 71.23 proportion to the total market value of the building that is 71.24 qualifying low-income rental housing. For all properties 71.25 qualifying as class 4d, the market value determined by the 71.26 assessor must be based on the normal approach to value using 71.27 normal unrestricted rents. 71.28 Class 4d property has a class rate of 0.9 percent for taxes 71.29 payable in 2002, and one percent for taxes payable in 2003 and 71.30 1.25 percent for taxes payable in 2004 and thereafter. 71.31[EFFECTIVE DATE.] This section is effective the day 71.32 following final enactment. 71.33 Sec. 18. Minnesota Statutes 2002, section 273.1398, 71.34 subdivision 4b, is amended to read: 71.35 Subd. 4b. [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 71.36 Until the costs of court administration as defined under section 72.1 480.183, subdivision 3, in a county have been transferred to the 72.2 state, each county in a judicial district transferring court 72.3 administration costs to state funding after July 1, 2001, shall 72.4 budget for the funding of these costs an amount at least equal 72.5 to the certified budget amount for calendar year 2001, increased 72.6 by six percent for each year from 2001 to 2003 and by eight 72.7 percent from 2004 to the year of the transfer. The county shall 72.8 budget, fund, and authorize expenditures not less than the 72.9 amount calculated under this paragraphplus the temporary aid72.10amount under subdivision 4c for maintenance of effort of72.11administrative costs. 72.12 (b) By July 15, 2001, the court shall certify to each 72.13 county in the judicial district its cost of court administration 72.14 as defined under section 480.183, subdivision 3, based on 2001 72.15 budgets. In making that determination, the court shall exclude 72.16 the budget costs of the county for the following categories: 72.17 (1) rent; 72.18 (2) examiner of titles; 72.19 (3) civil court appointed attorneys for civil matters; 72.20 (4) hospitalization costs; and 72.21 (5) cost of maintaining vital statistics. 72.22 The amount of funding provided by a county for courts that 72.23 is increased by the maintenance of effort requirement may not be 72.24 used by a county to pay the costs described in clauses (1) to 72.25 (5). 72.26[EFFECTIVE DATE.] This section is effective the day 72.27 following final enactment. 72.28 Sec. 19. Minnesota Statutes 2002, section 273.1398, 72.29 subdivision 4d, is amended to read: 72.30 Subd. 4d. [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.] 72.31 For aid payable in 2004, each county's aid under subdivision 2 72.32 shall be permanently reduced by an amount equal to the county's 72.33 2004 reimbursement for nonfederal expenditures for out-of-home 72.34 placements, as provided in section 245.775, provided that 72.35 payments will be made under section 477A.0123 in calendar year 72.36 2004. The counties shall provide all information requested by 73.1 the commissioner of human services necessary to allow the 73.2 commissioner to certify the previous three years' average 73.3 nonfederal costs to the commissioner of revenue by July15, 200473.4 1, 2003. The aid reduction under this subdivision must not 73.5 exceed the difference between (1) the amount of aid calculated 73.6 for the county for calendar year 2004 under subdivision 2, 73.7 including any addition under section 477A.07, and (2) the amount 73.8 of any aid reductions for the state takeover of courts contained 73.9 in Laws 2001, First Special Session chapter 5, article 5. 73.10[EFFECTIVE DATE.] This section is effective for aids 73.11 payable in 2004 and thereafter. 73.12 Sec. 20. Minnesota Statutes 2002, section 273.372, is 73.13 amended to read: 73.14 273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD 73.15 VALUATIONS.] 73.16 An appeal by a utility or railroad company concerning the 73.17 exemption, valuation, or classificationonof property for which 73.18 the commissioner of revenue has provided the city or county 73.19 assessor withcommissioner's ordersvaluations by order, or for 73.20 which the commissioner has recommended values to the city or 73.21 county assessor, must be brought against the commissioner in tax 73.22 court or in district court of the county where the property is 73.23 located, and not against the county or taxing district where the 73.24 property is located. If the appeal toacourt isoffrom an 73.25 order of the commissioner, it must be brought under chapter 73.26 271. If the appeal is from the exemption, valuation, 73.27 classification, or tax that results from implementation of the 73.28 commissioner's order or recommendation, it must be brought under 73.29 chapter 278, and theproceduresprovisions in that chapter 73.30 apply, except that service shall be on the commissioner only and 73.31 not on the county officials specified in section 278.01, 73.32 subdivision 1. This provision applies to the propertycontained73.33underdescribed in sections 273.33, 273.35, 273.36, and 273.37, 73.34 but only if the appealed values have remained unchanged from 73.35 those provided to the city or county by the commissioner. If 73.36 the exemption, valuation, or classification being appealed has 74.1 been changed by the city or county, then the action must be 74.2 brought under chapter 278 in the county where the property is 74.3 located and proper service must be made upon the county 74.4 officials as specified in section 278.01, subdivision 1. 74.5 Upon filing of any appeal by a utility company or railroad 74.6 against the commissioner, the commissioner shall give notice by 74.7 first class mail to each county which would be affected by the 74.8 appeal. 74.9 Companies that submit the reports under section 270.82 or 74.10 273.371 by the date specified in that section, or by the date 74.11 specified by the commissioner in an extension, may appeal 74.12 administratively to the commissioner under the procedures in 74.13 section 270.11, subdivision 6, prior to bringing an action in 74.14 tax court or in district court, however, instituting an 74.15 administrative appeal with the commissioner does not change or 74.16 modify the deadline in section 271.06 for appealing an order of 74.17 the commissioner in tax court or the deadline in section 278.01 74.18 forbringing an actionfiling a property tax claim or objection 74.19 in tax court or district court. 74.20[EFFECTIVE DATE.] This section is effective the day 74.21 following final enactment. 74.22 Sec. 21. Minnesota Statutes 2002, section 273.42, 74.23 subdivision 2, is amended to read: 74.24 Subd. 2. Owners of land that is an agricultural or 74.25 nonagricultural homestead, nonhomestead agricultural land, 74.26 rental residential property, and both commercial and 74.27 noncommercial seasonal residential recreational property, as 74.28 those terms are defined in section 273.13 listed on records of 74.29 the county auditor or county treasurer over which runs a high 74.30 voltage transmission lineas defined in section 116C.52,74.31subdivision 3with a capacity of 200 kilovolts or more, except a 74.32 high voltage transmission line the construction of which was 74.33 commenced prior to July 1, 1974, shall receive a property tax 74.34 credit in an amount determined by multiplying a fraction, the 74.35 numerator of which is the length of high voltage transmission 74.36 line which runs over that parcel and the denominator of which is 75.1 the total length of that particular line running over all 75.2 property within the city or township by ten percent of the 75.3 transmission line tax revenue derived from the tax on that 75.4 portion of the line within the city or township pursuant to 75.5 section 273.36. In the case of property owners in unorganized 75.6 townships, the property tax credit shall be determined by 75.7 multiplying a fraction, the numerator of which is the length of 75.8 the qualifying high voltage transmission line which runs over 75.9 the parcel and the denominator of which is the total length of 75.10 the qualifying high voltage transmission line running over all 75.11 property within all the unorganized townships within the county, 75.12 by the total utility property tax credit fund amount available 75.13 within the county for that year pursuant to subdivision 1. 75.14 Where a right-of-way width is shared by more than one property 75.15 owner, the numerator shall be adjusted by multiplying the length 75.16 of line on the parcel by the proportion of the total width on 75.17 the parcel owned by that property owner. The amount of credit 75.18 for which the property qualifies shall not exceed 20 percent of 75.19 the total gross tax on the parcel prior to deduction of the 75.20 state paid agricultural credit and the state paid homestead 75.21 credit, provided that, if the property containing the 75.22 right-of-way is included in a parcel which exceeds 40 acres, the 75.23 total gross tax on the parcel shall be multiplied by a fraction, 75.24 the numerator of which is the sum of the number of acres in each 75.25 quarter-quarter section or portion thereof which contains a 75.26 right-of-way and the denominator of which is the total number of 75.27 acres in the parcel set forth on the tax statement, and the 75.28 maximum credit shall be 20 percent of the product of that 75.29 computation, prior to deduction of those credits. The auditor 75.30 of the county in which the affected parcel is located shall 75.31 calculate the amount of the credit due for each parcel and 75.32 transmit that information to the county treasurer. The county 75.33 auditor, in computing the credit received pursuant to section 75.34 273.135, shall reduce the gross tax by the amount of the credit 75.35 received pursuant to this section, unless the amount of the 75.36 credit would be less than $10. 76.1 If, after the county auditor has computed the credit to 76.2 those qualifying property owners in unorganized townships, there 76.3 is money remaining in the utility property tax credit fund, then 76.4 that excess amount in the fund shall be returned to the general 76.5 school fund of the county. 76.6[EFFECTIVE DATE.] This section is effective the day 76.7 following final enactment. 76.8 Sec. 22. Minnesota Statutes 2002, section 274.01, 76.9 subdivision 1, is amended to read: 76.10 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 76.11 GRIEVANCES.] (a) The town board of a town, or the council or 76.12 other governing body of a city, is the board of appeal and 76.13 equalization except (1) in cities whose charters provide for a 76.14 board of equalization or (2) in any city or town that has 76.15 transferred its local board of review power and duties to the 76.16 county board as provided in subdivision 3. The county assessor 76.17 shall fix a day and time when the board or the board of 76.18 equalization shall meet in the assessment districts of the 76.19 county. Notwithstanding any law or city charter to the 76.20 contrary, a city board of equalization shall be referred to as a 76.21 board of appeal and equalization. On or before February 15 of 76.22 each year the assessor shall give written notice of the time to 76.23 the city or town clerk. Notwithstanding the provisions of any 76.24 charter to the contrary, the meetings must be held between April 76.25 1 and May 31 each year. The clerk shall give published and 76.26 posted notice of the meeting at least ten days before the date 76.27 of the meeting. 76.28 The board shall meet at the office of the clerk to review 76.29 the assessment and classification of property in the town or 76.30 city. No changes in valuation or classification which are 76.31 intended to correct errors in judgment by the county assessor 76.32 may be made by the county assessor after the board has adjourned 76.33 in those cities or towns that hold a local board of review; 76.34 however, corrections of errors that are merely clerical in 76.35 nature or changes that extend homestead treatment to property 76.36 are permitted after adjournment until the tax extension date for 77.1 that assessment year. The changes must be fully documented and 77.2 maintained in the assessor's office and must be available for 77.3 review by any person. A copy of the changes made during this 77.4 period in those cities or towns that hold a local board of 77.5 review must be sent to the county board no later than December 77.6 31 of the assessment year. 77.7 (b) The board shall determine whether the taxable property 77.8 in the town or city has been properly placed on the list and 77.9 properly valued by the assessor. If real or personal property 77.10 has been omitted, the board shall place it on the list with its 77.11 market value, and correct the assessment so that each tract or 77.12 lot of real property, and each article, parcel, or class of 77.13 personal property, is entered on the assessment list at its 77.14 market value. No assessment of the property of any person may 77.15 be raised unless the person has been duly notified of the intent 77.16 of the board to do so. On application of any person feeling 77.17 aggrieved, the board shall review the assessment or 77.18 classification, or both, and correct it as appears just. The 77.19 board may not make an individual market value adjustment or 77.20 classification change that would benefit the property in cases 77.21 where the owner or other person having control over the property 77.22 will not permit the assessor to inspect the property and the 77.23 interior of any buildings or structures. 77.24 (c) A local board may reduce assessments upon petition of 77.25 the taxpayer but the total reductions must not reduce the 77.26 aggregate assessment made by the county assessor by more than 77.27 one percent. If the total reductions would lower the aggregate 77.28 assessments made by the county assessor by more than one 77.29 percent, none of the adjustments may be made. The assessor 77.30 shall correct any clerical errors or double assessments 77.31 discovered by the board without regard to the one percent 77.32 limitation. 77.33 (d) A local board does not have authority to grant an 77.34 exemption or to order property removed from the tax rolls. 77.35 (e) A majority of the members may act at the meeting, and 77.36 adjourn from day to day until they finish hearing the cases 78.1 presented. The assessor shall attend, with the assessment books 78.2 and papers, and take part in the proceedings, but must not 78.3 vote. The county assessor, or an assistant delegated by the 78.4 county assessor shall attend the meetings. The board shall list 78.5 separately, on a form appended to the assessment book, all 78.6 omitted property added to the list by the board and all items of 78.7 property increased or decreased, with the market value of each 78.8 item of property, added or changed by the board, placed opposite 78.9 the item. The county assessor shall enter all changes made by 78.10 the board in the assessment book. 78.11(e)(f) Except as provided in subdivision 3, if a person 78.12 fails to appear in person, by counsel, or by written 78.13 communication before the board after being duly notified of the 78.14 board's intent to raise the assessment of the property, or if a 78.15 person feeling aggrieved by an assessment or classification 78.16 fails to apply for a review of the assessment or classification, 78.17 the person may not appear before the county board of appeal and 78.18 equalization for a review of the assessment or classification. 78.19 This paragraph does not apply if an assessment was made after 78.20 the local board meeting, as provided in section 273.01, or if 78.21 the person can establish not having received notice of market 78.22 value at least five days before the local board meeting. 78.23(f)(g) The local board must complete its work and adjourn 78.24 within 20 days from the time of convening stated in the notice 78.25 of the clerk, unless a longer period is approved by the 78.26 commissioner of revenue. No action taken after that date is 78.27 valid. All complaints about an assessment or classification 78.28 made after the meeting of the board must be heard and determined 78.29 by the county board of equalization. A nonresident may, at any 78.30 time, before the meeting of the board file written objections to 78.31 an assessment or classification with the county assessor. The 78.32 objections must be presented to the board at its meeting by the 78.33 county assessor for its consideration. 78.34[EFFECTIVE DATE.] This section is effective the day 78.35 following final enactment. 78.36 Sec. 23. Minnesota Statutes 2002, section 274.13, 79.1 subdivision 1, is amended to read: 79.2 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 79.3 ASSESSMENTS.] The county commissioners, or a majority of them, 79.4 with the county auditor, or, if the auditor cannot be present, 79.5 the deputy county auditor, or, if there is no deputy, the court 79.6 administrator of the district court, shall form a board for the 79.7 equalization of the assessment of the property of the county, 79.8 including the property of all cities whose charters provide for 79.9 a board of equalization. This board shall be referred to as the 79.10 county board of appeal and equalization. The board shall meet 79.11 annually, on the date specified in section 274.14, at the office 79.12 of the auditor. Each member shall take an oath to fairly and 79.13 impartially perform duties as a member. The board shall examine 79.14 and compare the returns of the assessment of property of the 79.15 towns or districts, and equalize them so that each tract or lot 79.16 of real property and each article or class of personal property 79.17 is entered on the assessment list at its market value, subject 79.18 to the following rules: 79.19 (1) The board shall raise the valuation of each tract or 79.20 lot of real property which in its opinion is returned below its 79.21 market value to the sum believed to be its market value. The 79.22 board must first give notice of intention to raise the valuation 79.23 to the person in whose name it is assessed, if the person is a 79.24 resident of the county. The notice must fix a time and place 79.25 for a hearing. 79.26 (2) The board shall reduce the valuation of each tract or 79.27 lot which in its opinion is returned above its market value to 79.28 the sum believed to be its market value. 79.29 (3) The board shall raise the valuation of each class of 79.30 personal property which in its opinion is returned below its 79.31 market value to the sum believed to be its market value. It 79.32 shall raise the aggregate value of the personal property of 79.33 individuals, firms, or corporations, when it believes that the 79.34 aggregate valuation, as returned, is less than the market value 79.35 of the taxable personal property possessed by the individuals, 79.36 firms, or corporations, to the sum it believes to be the market 80.1 value. The board must first give notice to the persons of 80.2 intention to do so. The notice must set a time and place for a 80.3 hearing. 80.4 (4) The board shall reduce the valuation of each class of 80.5 personal property that is returned above its market value to the 80.6 sum it believes to be its market value. Upon complaint of a 80.7 party aggrieved, the board shall reduce the aggregate valuation 80.8 of the individual's personal property, or of any class of 80.9 personal property for which the individual is assessed, which in 80.10 its opinion has been assessed at too large a sum, to the sum it 80.11 believes was the market value of the individual's personal 80.12 property of that class. 80.13 (5) The board must not reduce the aggregate value of all 80.14 the property of its county, as submitted to the county board of 80.15 equalization, with the additions made by the auditor under this 80.16 chapter, by more than one percent of its whole valuation. The 80.17 board may raise the aggregate valuation of real property, and of 80.18 each class of personal property, of the county, or of any town 80.19 or district of the county, when it believes it is below the 80.20 market value of the property, or class of property, to the 80.21 aggregate amount it believes to be its market value. 80.22 (6) The board shall change the classification of any 80.23 property which in its opinion is not properly classified. 80.24 (7) The board does not have the authority to grant an 80.25 exemption or to order property removed from the tax rolls. 80.26[EFFECTIVE DATE.] This section is effective the day 80.27 following final enactment. 80.28 Sec. 24. Minnesota Statutes 2002, section 275.025, 80.29 subdivision 1, is amended to read: 80.30 Subdivision 1. [LEVY AMOUNT.] The state general levy is 80.31 levied against commercial-industrial property and 80.32 seasonal residential recreational property, as defined in this 80.33 section. The state general levy base amount is $592,000,000 for 80.34 taxes payable in 2002. For taxes payable in subsequent years, 80.35 the levy base amount is increased each year by multiplying the 80.36 levy base amount for the prior year by the sum of one plus the 81.1 rate of increase, if any, in the implicit price deflator for 81.2 government consumption expenditures and gross investment for 81.3 state and local governments prepared by the Bureau of Economic 81.4 Analysts of the United States Department of Commerce for the 81.5 12-month period ending March 31 of the year prior to the year 81.6 the taxes are payable. The tax under this section is not 81.7 treated as a local tax rate under section 469.177 and is not the 81.8 levy of a governmental unit under chapters 276A and 473F. 81.9 Beginning in fiscal year 2004, and in each year thereafter, the 81.10 commissioner of finance shall deposit in an education reserve 81.11 account, which account is hereby established, the increased 81.12 amount of the state general levy received for deposit in the 81.13 general fund for that year over the amount of the state general 81.14 levy received for deposit in the general fund in fiscal year 81.15 2003. The amounts in the education reserve account do not lapse 81.16 or cancel each year, but remain until appropriated by law for 81.17 education aid or higher education funding. 81.18[EFFECTIVE DATE.] This section is effective for taxes 81.19 payable in 2004 and thereafter, except that the change from 81.20 "seasonal recreational property" to "seasonal residential 81.21 recreational property" is effective the day following final 81.22 enactment. 81.23 Sec. 25. Minnesota Statutes 2002, section 275.025, 81.24 subdivision 3, is amended to read: 81.25 Subd. 3. [SEASONAL RESIDENTIAL RECREATIONAL TAX CAPACITY.] 81.26 For the purposes of this section, "seasonal residential 81.27 recreational tax capacity" means the tax capacity of all class 81.28 4c(1) property under section 273.13, subdivision 25, except that 81.29 the first $76,000 of market value of each noncommercial class 81.30 4c(1) property has a tax capacity for this purpose equal to 40 81.31 percent of its tax capacity under section 273.13. 81.32[EFFECTIVE DATE.] This section is effective the day 81.33 following final enactment. 81.34 Sec. 26. Minnesota Statutes 2002, section 275.025, 81.35 subdivision 4, is amended to read: 81.36 Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 82.1 The state general tax must be distributed among the counties by 82.2 applying a uniform rate to each county's commercial-industrial 82.3 tax capacity and its seasonal residential recreational tax 82.4 capacity. Within each county, the tax must be levied by 82.5 applying a uniform rate against commercial-industrial tax 82.6 capacity and seasonal residential recreational tax capacity.By82.7NovemberOn or before October 1 each year, the commissioner of 82.8 revenue shall certifythea preliminary state general levy rate 82.9 to each county auditor that must be used to prepare the notices 82.10 of proposed property taxes for taxes payable in the following 82.11 year. By January 1 of each year, the commissioner shall certify 82.12 the final state general levy rate to each county auditor that 82.13 shall be used in spreading taxes. 82.14[EFFECTIVE DATE.] This section is effective for taxes 82.15 payable in 2004 and thereafter, except that the change from 82.16 "seasonal recreational tax capacity" to "seasonal residential 82.17 recreational tax capacity" is effective the day following final 82.18 enactment. 82.19 Sec. 27. Minnesota Statutes 2002, section 276.10, is 82.20 amended to read: 82.21 276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 82.22 On the settlement day determined in section 276.09 for each 82.23 year, the county auditor and county treasurer shall distribute 82.24 all undistributed funds in the treasury. The funds must be 82.25 apportioned as provided by law, and credited to thestate,town, 82.26 city, school district, special district and each county fund. 82.27 Within 20 days after the distribution is completed, the county 82.28 auditor shall report to the state auditor in the form prescribed 82.29 by the state auditor. The county auditor shall issue a warrant 82.30 for the payment of money in the county treasury to the credit of 82.31 thestate,town, city, school district, or special districts on 82.32 application of the persons entitled to receive the payment. The 82.33 county auditor may apply the local tax rate from the year before 82.34 the year of distribution when apportioning and distributing 82.35 delinquent tax proceeds, if the composition of the previous 82.36 year's local tax rate between taxing districts is not 83.1 significantly different from the local tax rate that existed for 83.2 the year of the delinquency. 83.3[EFFECTIVE DATE.] This section is effective for taxes 83.4 payable in 2004 and thereafter. 83.5 Sec. 28. Minnesota Statutes 2002, section 276.11, 83.6 subdivision 1, is amended to read: 83.7 Subdivision 1. [GENERALLY.] As soon as practical after the 83.8 settlement day determined in section 276.09, the county 83.9 treasurer shall pay tothe state treasurer orthe treasurer of a 83.10 town, city, school district, or special district, on the warrant 83.11 of the county auditor, all receipts of taxes levied by the 83.12 taxing district and deliver up all orders and other evidences of 83.13 indebtedness of the taxing district, taking triplicate receipts 83.14 for them. The treasurer shall file one of the receipts with the 83.15 county auditor, and shall return one by mail on the day of its 83.16 receipt to the clerk of the town, city, school district, or 83.17 special district to which payment was made. The clerk shall 83.18 keep the receipt in the clerk's office. Upon written request of 83.19 the taxing district, to the extent practicable, the county 83.20 treasurer shall make partial payments of amounts collected 83.21 periodically in advance of the next settlement and 83.22 distribution. A statement prepared by the county treasurer must 83.23 accompany each payment. It must state the years for which taxes 83.24 included in the payment were collected and, for each year, the 83.25 amount of the taxes and any penalties on the tax. Upon written 83.26 request of a taxing district, except school districts, the 83.27 county treasurer shall pay at least 70 percent of the estimated 83.28 collection within 30 days after the settlement date determined 83.29 in section 276.09. Within seven business days after the due 83.30 date, or 28 calendar days after the postmark date on the 83.31 envelopes containing real or personal property tax statements, 83.32 whichever is latest, the county treasurer shall pay to the 83.33 treasurer of the school districts 50 percent of the estimated 83.34 collections arising from taxes levied by and belonging to the 83.35 school district, unless the school district elects to receive 50 83.36 percent of the estimated collections arising from taxes levied 84.1 by and belonging to the school district after making a 84.2 proportionate reduction to reflect any loss in collections as 84.3 the result of any delay in mailing tax statements. In that 84.4 case, 50 percent of those adjusted, estimated collections shall 84.5 be paid by the county treasurer to the treasurer of the school 84.6 district within seven business days of the due date. The 84.7 remaining 50 percent of the estimated collections must be paid 84.8 to the treasurer of the school district within the next seven 84.9 business days of the later of the dates in the preceding 84.10 sentence, unless the school district elects to receive the 84.11 remainder of its estimated collections after a proportionate 84.12 reduction has been made to reflect any loss in collections as 84.13 the result of any delay in mailing tax statements. In that 84.14 case, the remaining 50 percent of those adjusted, estimated 84.15 collections shall be paid by the county treasurer to the 84.16 treasurer of the school district within 14 days of the due 84.17 date. The treasurer shall pay the balance of the amounts 84.18 collectedto the state before June 30, orto a municipal 84.19 corporation or other body within 60 days after the settlement 84.20 date determined in section 276.09. After 45 days interest at an 84.21 annual rate of eight percent accrues and must be paid to the 84.22 taxing district. Interest must be paid upon appropriation from 84.23 the general revenue fund of the county. If not paid, it may be 84.24 recovered by the taxing district, in a civil action. 84.25[EFFECTIVE DATE.] This section is effective for taxes 84.26 payable in 2004 and thereafter. 84.27 Sec. 29. [276.112] [STATE PROPERTY TAXES; COUNTY 84.28 TREASURER.] 84.29 On or before January 25 each year, for the period ending 84.30 December 31 of the prior year, and on or before June 29 each 84.31 year, for the period ending on the most recent settlement day 84.32 determined in section 276.09, and on or before December 2 each 84.33 year, for the period ending November 20, the county treasurer 84.34 must make full settlement with the county auditor according to 84.35 sections 276.09, 276.10, and 276.111 for all receipts of state 84.36 property taxes levied under section 275.025, and must transmit 85.1 those receipts to the commissioner of revenue by electronic 85.2 means. 85.3[EFFECTIVE DATE.] This section is effective the day 85.4 following final enactment. 85.5 Sec. 30. Minnesota Statutes 2002, section 277.20, 85.6 subdivision 2, is amended to read: 85.7 Subd. 2. [FILING OF LIEN FOR ENFORCEABILITY.] The lien 85.8 imposed by subdivision 1 is not enforceable against any 85.9 purchaser, mortgagee, pledgee, holder of a Uniform Commercial 85.10 Code security interest, mechanic's lienor, or judgment lien 85.11 creditor until a notice of lien has been filed by the county 85.12 treasurer in the office of the county recorder of the county in 85.13 which the property is situated, or, in the case of personal 85.14 propertybelonging to an individual who is not a resident of85.15this state, or that is a corporation, partnership, or other85.16organization, in the office of the secretary of state. Priority 85.17 of a lien created under Laws 1991, chapter 291, article 15, 85.18 shall be determined in accordance with the provisions of section 85.19 507.34. Liens filed in the office of the county recorder shall 85.20 be filed with the state tax liens filed pursuant to section 85.21 270.69, and the index shall indicate the name of the county for 85.22 which the lien was filed. If the land is registered, the notice 85.23 of lien shall be filed in the office of the registrar of titles 85.24 of the county in which the property is registered. 85.25 Notwithstanding any other law to the contrary, the county 85.26 treasurer is exempt from the payment of fees when the lien is 85.27 offered for filing or recording; the fee for filing or recording 85.28 the lien must be paid at the time the release of lien is offered 85.29 for filing or recording. Notwithstanding any law to the 85.30 contrary, the fee for filing or recording the lien or the 85.31 release of lien is $15. 85.32[EFFECTIVE DATE.] This section is effective for liens filed 85.33 on or after the day following final enactment. 85.34 Sec. 31. Minnesota Statutes 2002, section 279.06, 85.35 subdivision 1, is amended to read: 85.36 Subdivision 1. [LIST AND NOTICE.] Within five days after 86.1 the filing of such list, the court administrator shall return a 86.2 copy thereof to the county auditor, with a notice prepared and 86.3 signed by the court administrator, and attached thereto, which 86.4 may be substantially in the following form: 86.5 State of Minnesota ) 86.6 ) ss. 86.7 County of ............... ) 86.8 District Court 86.9 .......... Judicial District. 86.10 The state of Minnesota, to all persons, companies, or 86.11 corporations who have or claim any estate, right, title, or 86.12 interest in, claim to, or lien upon, any of the several parcels 86.13 of land described in the list hereto attached: 86.14 The list of taxes and penalties on real property for the 86.15 county of ............................... remaining delinquent 86.16 on the first Monday in January, ......., has been filed in the 86.17 office of the court administrator of the district court of said 86.18 county, of which that hereto attached is a copy. Therefore, 86.19 you, and each of you, are hereby required to file in the office 86.20 of said court administrator, on or before the 20th day after the 86.21 publication of this notice and list, your answer, in writing, 86.22 setting forth any objection or defense you may have to the 86.23 taxes, or any part thereof, upon any parcel of land described in 86.24 the list, in, to, or on which you have or claim any estate, 86.25 right, title, interest, claim, or lien, and, in default thereof, 86.26 judgment will be entered against such parcel of land for the 86.27 taxes on such list appearing against it, and for all penalties, 86.28 interest, and costs. Based upon said judgment, the land shall 86.29 be sold to the state of Minnesota on the second Monday in May, 86.30 ....... The period of redemption for all lands sold to the 86.31 state at a tax judgment sale shall be three years from the date 86.32 of sale to the state of Minnesota if the land is within an 86.33 incorporated area unless it is: 86.34 (a) nonagricultural homesteaded land as defined in section 86.35 273.13, subdivision 22; 86.36 (b) homesteaded agricultural land as defined in section 87.1 273.13, subdivision 23, paragraph (a); 87.2 (c) seasonal residential recreational land as defined in 87.3 section 273.13, subdivisions 22, paragraph (c), and 25, 87.4 paragraph(c)(d), clause(5)(1), in which event the period of 87.5 redemption is five years from the date of sale to the state of 87.6 Minnesota; 87.7 (d) abandoned property and pursuant to section 281.173 a 87.8 court order has been entered shortening the redemption period to 87.9 five weeks; or 87.10 (e) vacant property as described under section 281.174, 87.11 subdivision 2, and for which a court order is entered shortening 87.12 the redemption period under section 281.174. 87.13 The period of redemption for all other lands sold to the 87.14 state at a tax judgment sale shall be five years from the date 87.15 of sale. 87.16 Inquiries as to the proceedings set forth above can be made 87.17 to the county auditor of ..... county whose address is ..... . 87.18 (Signed) ............................................., 87.19 Court Administrator of the District Court of the County 87.20 of .................................................... 87.21 (Here insert list.) 87.22 The list referred to in the notice shall be substantially 87.23 in the following form: 87.24 List of real property for the county of 87.25 ......................., on which taxes remain delinquent on the 87.26 first Monday in January, .......: 87.27 Town of (Fairfield), 87.28 Township (40), Range (20), 87.29 Names (and 87.30 Current Filed 87.31 Addresses) for 87.32 the Taxpayers 87.33 and Fee Owners 87.34 and in Addition 87.35 Those Parties 87.36 Who Have Filed 88.1 Their Addresses Tax 88.2 Pursuant to Subdivision of Parcel Total Tax 88.3 section 276.041 Section Section Number and Penalty 88.4 $ cts. 88.5 John Jones S.E. 1/4 of S.W. 1/4 10 23101 2.20 88.6 (825 Fremont 88.7 Fairfield, MN 88.8 55000) 88.9 Bruce Smith That part of N.E. 1/4 88.10 (2059 Hand of S.W. 1/4 desc. as 88.11 Fairfield, follows: Beg. at the 88.12 MN 55000) S.E. corner of said 88.13 and N.E. 1/4 of S.W. 1/4; 88.14 Fairfield thence N. along the E. 88.15 State Bank line of said N.E. 1/4 88.16 (100 Main of S.W. 1/4 a distance 88.17 Street of 600 ft.; thence W. 88.18 Fairfield, parallel with the S. 88.19 MN 55000) line of said N.E. 1/4 88.20 of S.W. 1/4 a distance 88.21 of 600 ft.; thence S. 88.22 parallel with said E. 88.23 line a distance of 600 88.24 ft. to S. line of said 88.25 N.E. 1/4 of S.W. 1/4; 88.26 thence E. along said S. 88.27 line a distance of 600 88.28 ft. to the point of 88.29 beg. ............... 21 33211 3.15 88.30 As to platted property, the form of heading shall conform 88.31 to circumstances and be substantially in the following form: 88.32 City of (Smithtown) 88.33 Brown's Addition, or Subdivision 88.34 Names (and 88.35 Current Filed 88.36 Addresses) for 89.1 the Taxpayers 89.2 and Fee Owners 89.3 and in Addition 89.4 Those Parties 89.5 Who have Filed 89.6 Their Addresses Tax 89.7 Pursuant to Parcel Total Tax 89.8 section 276.041 Lot Block Number and Penalty 89.9 $ cts. 89.10 John Jones 15 9 58243 2.20 89.11 (825 Fremont 89.12 Fairfield, 89.13 MN 55000) 89.14 Bruce Smith 16 9 58244 3.15 89.15 (2059 Hand 89.16 Fairfield, 89.17 MN 55000) 89.18 and 89.19 Fairfield 89.20 State Bank 89.21 (100 Main Street 89.22 Fairfield, 89.23 MN 55000) 89.24 The names, descriptions, and figures employed in 89.25 parentheses in the above forms are merely for purposes of 89.26 illustration. 89.27 The name of the town, township, range or city, and addition 89.28 or subdivision, as the case may be, shall be repeated at the 89.29 head of each column of the printed lists as brought forward from 89.30 the preceding column. 89.31 Errors in the list shall not be deemed to be a material 89.32 defect to affect the validity of the judgment and sale. 89.33[EFFECTIVE DATE.] This section is effective the day 89.34 following final enactment. 89.35 Sec. 32. Minnesota Statutes 2002, section 281.17, is 89.36 amended to read: 90.1 281.17 [PERIOD FOR REDEMPTION.] 90.2 Except for properties for which the period of redemption 90.3 has been limited under sections 281.173 and 281.174, the 90.4 following periods for redemption apply. 90.5 The period of redemption for all lands sold to the state at 90.6 a tax judgment sale shall be three years from the date of sale 90.7 to the state of Minnesota if the land is within an incorporated 90.8 area unless it is: (a) nonagricultural homesteaded land as 90.9 defined in section 273.13, subdivision 22; (b) homesteaded 90.10 agricultural land as defined in section 273.13, subdivision 23, 90.11 paragraph (a); or (c) seasonal residential recreational land as 90.12 defined in section 273.13, subdivision 22, paragraph (c), or 25, 90.13 paragraph (d), clause (1), for which the period of redemption is 90.14 five years from the date of sale to the state of Minnesota. 90.15 The period of redemption for homesteaded lands as defined 90.16 in section 273.13, subdivision 22, located in a targeted 90.17 neighborhood as defined in Laws 1987, chapter 386, article 6, 90.18 section 4, and sold to the state at a tax judgment sale is three 90.19 years from the date of sale. The period of redemption for all 90.20 lands located in a targeted neighborhood as defined in Laws 90.21 1987, chapter 386, article 6, section 4, except (1) homesteaded 90.22 lands as defined in section 273.13, subdivision 22, and (2) for 90.23 periods of redemption beginning after June 30, 1991, but before 90.24 July 1, 1996, lands located in the Loring Park targeted 90.25 neighborhood on which a notice of lis pendens has been served, 90.26 and sold to the state at a tax judgment sale is one year from 90.27 the date of sale. 90.28 The period of redemption for all real property constituting 90.29 a mixed municipal solid waste disposal facility that is a 90.30 qualified facility under section 115B.39, subdivision 1, is one 90.31 year from the date of the sale to the state of Minnesota. 90.32 The period of redemption for all other lands sold to the 90.33 state at a tax judgment sale shall be five years from the date 90.34 of sale, except that the period of redemption for nonhomesteaded 90.35 agricultural land as defined in section 273.13, subdivision 23, 90.36 paragraph (b), shall be two years from the date of sale if at 91.1 that time that property is owned by a person who owns one or 91.2 more parcels of property on which taxes are delinquent, and the 91.3 delinquent taxes are more than 25 percent of the prior year's 91.4 school district levy. 91.5[EFFECTIVE DATE.] This section is effective the day 91.6 following final enactment. 91.7 Sec. 33. Minnesota Statutes 2002, section 282.01, 91.8 subdivision 7a, is amended to read: 91.9 Subd. 7a. [CITY SALES; ALTERNATE PROCEDURES.] Land located 91.10 in a home rule charter or statutory city, or in a town which 91.11 cannot be improved because of noncompliance with local 91.12 ordinances regarding minimum area, shape, frontage or access may 91.13 be sold by the county auditor pursuant to this subdivision if 91.14 the auditor determines that a nonpublic sale will encourage the 91.15 approval of sale of the land by the city or town and promote its 91.16 return to the tax rolls. If the physical characteristics of the 91.17 land indicate that its highest and best use will be achieved by 91.18 combining it with an adjoining parcel and the city or town has 91.19 not adopted a local ordinance governing minimum area, shape, 91.20 frontage, or access, the land may also be sold pursuant to this 91.21 subdivision. If the property consists of an undivided interest 91.22 in land or land and improvements, the property may also be sold 91.23 to the other owners under this subdivision. The sale of land 91.24 pursuant to this subdivision shall be subject to any conditions 91.25 imposed by the county board pursuant to section 282.03. The 91.26 governing body of the city or town may recommend to the county 91.27 board conditions to be imposed on the sale. The county auditor 91.28 may restrict the sale to owners of lands adjoining the land to 91.29 be sold. The county auditor shall conduct the sale by sealed 91.30 bid or may select another means of sale. The land shall be sold 91.31 to the highest bidder but in no event shall the land be sold for 91.32 less than its appraised value. All owners of land adjoining the 91.33 land to be sold shall be given a written notice at least 30 days 91.34 prior to the sale. 91.35 This subdivision shall be liberally construed to encourage 91.36 the sale and utilization of tax-forfeited land, to eliminate 92.1 nuisances and dangerous conditions and to increase compliance 92.2 with land use ordinances. 92.3[EFFECTIVE DATE.] This section is effective for sales 92.4 occurring on or after the day following final enactment. 92.5 Sec. 34. Minnesota Statutes 2002, section 282.08, is 92.6 amended to read: 92.7 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 92.8 The net proceeds from the sale or rental of any parcel of 92.9 forfeited land, or from the sale of products from the forfeited 92.10 land, must be apportioned by the county auditor to the taxing 92.11 districts interested in the land, as follows: 92.12 (1) the amounts necessary to pay the state general tax levy 92.13 against the parcel for taxes payable in the year for which the 92.14 tax judgment was entered, and for each subsequent payable year 92.15 up to and including the year of forfeiture, must be apportioned 92.16 to the state; 92.17 (2) the portion required to pay any amounts included in the 92.18 appraised value under section 282.01, subdivision 3, as 92.19 representing increased value due to any public improvement made 92.20 after forfeiture of the parcel to the state, but not exceeding 92.21 the amount certified by the clerk of the municipality must be 92.22 apportioned to the municipal subdivision entitled to it; 92.23(2)(3) the portion required to pay any amount included in 92.24 the appraised value under section 282.019, subdivision 5, 92.25 representing increased value due to response actions taken after 92.26 forfeiture of the parcel to the state, but not exceeding the 92.27 amount of expenses certified by the pollution control agency or 92.28 the commissioner of agriculture, must be apportioned to the 92.29 agency or the commissioner of agriculture and deposited in the 92.30 fund from which the expenses were paid; 92.31(3)(4) the portion of the remainder required to discharge 92.32 any special assessment chargeable against the parcel for 92.33 drainage or other purpose whether due or deferred at the time of 92.34 forfeiture, must be apportioned to the municipal subdivision 92.35 entitled to it; and 92.36(4)(5) any balance must be apportioned as follows: 93.1 (i) The county board may annually by resolution set aside 93.2 no more than 30 percent of the receipts remaining to be used for 93.3 timber development on tax-forfeited land and dedicated memorial 93.4 forests, to be expended under the supervision of the county 93.5 board. It must be expended only on projects approved by the 93.6 commissioner of natural resources. 93.7 (ii) The county board may annually by resolution set aside 93.8 no more than 20 percent of the receipts remaining to be used for 93.9 the acquisition and maintenance of county parks or recreational 93.10 areas as defined in sections 398.31 to 398.36, to be expended 93.11 under the supervision of the county board. 93.12 (iii) Any balance remaining must be apportioned as 93.13 follows: county, 40 percent; town or city, 20 percent; and 93.14 school district, 40 percent, provided, however, that in 93.15 unorganized territory that portion which would have accrued to 93.16 the township must be administered by the county board of 93.17 commissioners. 93.18[EFFECTIVE DATE.] This section is effective for taxes 93.19 payable in 2004 and thereafter. 93.20 Sec. 35. Minnesota Statutes 2002, section 290C.02, 93.21 subdivision 3, is amended to read: 93.22 Subd. 3. [CLAIMANT.] "Claimant" means a person, as that 93.23 term is defined in section 290.01, subdivision 2, who owns 93.24 forest land in Minnesota and files an application authorized by 93.25 the Sustainable Forest Incentive Act. For purposes of section 93.26 290C.11, claimant also includes any person bound by the covenant 93.27 required in section 290C.04. No more than one claimant is 93.28 entitled to a payment under this chapter with respect to any 93.29 tract, parcel, or piece of land enrolled under this chapter that 93.30 has been assigned the same parcel identification number. When 93.31 enrolled forest land is owned by two or more persons, the owners 93.32 must determine between them which person may claim the payments 93.33 provided under sections 290C.01 to 290C.11. 93.34[EFFECTIVE DATE.] This section is effective the day 93.35 following final enactment. 93.36 Sec. 36. Minnesota Statutes 2002, section 290C.02, 94.1 subdivision 7, is amended to read: 94.2 Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management 94.3 plan" means a written document providing a framework for 94.4 site-specific healthy, productive, and sustainable forest 94.5 resources. A forest management plan must include at least the 94.6 following: (i) owner-specific forest management goals for the 94.7propertyland; (ii) a reliable field inventory of the individual 94.8 forest cover types, their age, and density; (iii) a description 94.9 of the soil type and quality; (iv) an aerial photo and/or map of 94.10 the vegetation and other natural features of thepropertyland 94.11 clearly indicating the boundaries of thepropertyland and of 94.12 the forest land; (v) the proposed future conditions of the 94.13propertyland; (vi) prescriptions to meet proposed future 94.14 conditions of thepropertyland; (vii) a recommended timetable 94.15 for implementing the prescribed activities; and (viii) a legal 94.16 description of theparcelsland encompassing the parcels 94.17 included in the plan. All management activities prescribed in a 94.18 plan must be in accordance with the recommended timber 94.19 harvesting and forest management guidelines. The commissioner 94.20 of natural resources shall provide a framework for plan content 94.21 and updating and revising plans. 94.22[EFFECTIVE DATE.] This section is effective the day 94.23 following final enactment. 94.24 Sec. 37. Minnesota Statutes 2002, section 290C.03, is 94.25 amended to read: 94.26 290C.03 [ELIGIBILITY REQUIREMENTS.] 94.27 (a)PropertyLand may be enrolled in the sustainable forest 94.28 incentive program under this chapter if all of the following 94.29 conditions are met: 94.30 (1)propertythe land consists of at least 20 contiguous 94.31 acres and at least 50 percent of the land must meet the 94.32 definition of forest land in section 88.01, subdivision 7, 94.33 during the enrollment; 94.34 (2) a forest management plan for thepropertyland must be 94.35 prepared by an approved plan writer and implemented during the 94.36 period in which the land is enrolled; 95.1 (3) timber harvesting and forest management guidelines must 95.2 be used in conjunction with any timber harvesting or forest 95.3 management activities conducted on the land during the period in 95.4 which the land is enrolled; 95.5 (4) thepropertyland must be enrolled for a minimum of 95.6 eight years; 95.7 (5) there are no delinquent property taxes on theproperty95.8 land; and 95.9 (6) claimants enrolling more than 1,920 acres in the 95.10 sustainable forest incentive program must allow year-round, 95.11 nonmotorized access to fish and wildlife resources on enrolled 95.12 land except within one-fourth mile of a permanent dwelling or 95.13 during periods of high fire hazard as determined by the 95.14 commissioner of natural resources. 95.15 (b) Claimants required to allow access under paragraph (a), 95.16 clause (6), do not by that action: 95.17 (1) extend any assurance that the land is safe for any 95.18 purpose; 95.19 (2) confer upon the person the legal status of an invitee 95.20 or licensee to whom a duty of care is owed; or 95.21 (3) assume responsibility for or incur liability for any 95.22 injury to the person or property caused by an act or omission of 95.23 the person. 95.24[EFFECTIVE DATE.] This section is effective the day 95.25 following final enactment. 95.26 Sec. 38. Minnesota Statutes 2002, section 290C.07, is 95.27 amended to read: 95.28 290C.07 [CALCULATION OF INCENTIVE PAYMENT.] 95.29 An approved claimant under the sustainable forest incentive 95.30 program is eligible to receive an annual payment. The payment 95.31 shall equal the greater of: 95.32 (1) the difference between the property tax that would be 95.33 paid on thepropertyland using the previous year's statewide 95.34 average total township tax rate and the class rate for class 2b 95.35 timberland under section 273.13, subdivision 23, paragraph (b), 95.36 if thepropertyland were valued at (i) the average statewide 96.1 timberland market value per acre calculated under section 96.2 290C.06, and (ii) the average statewide timberland current use 96.3 value per acre calculated under section 290C.02, subdivision 5; 96.4 (2) two-thirds of the property tax amount determined by 96.5 using the previous year's statewide average total township tax 96.6 rate, the estimated market value per acre as calculated in 96.7 section 290C.06, and the class rate for 2b timberland under 96.8 section 273.13, subdivision 23, paragraph (b); or 96.9 (3) $1.50 per acre for each acre enrolled in the 96.10 sustainable forest incentive program. 96.11[EFFECTIVE DATE.] This section is effective the day 96.12 following final enactment. 96.13 Sec. 39. Minnesota Statutes 2002, section 290C.09, is 96.14 amended to read: 96.15 290C.09 [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 96.16 The commissioner shall immediately remove anypropertyland 96.17 enrolled in the sustainable forest incentive program for which 96.18 taxes are determined to be delinquent as provided in chapter 279 96.19 and shall notify the claimant of such action. Lands terminated 96.20 from the sustainable forest incentive program under this section 96.21 are not entitled to any payments provided in this chapter and 96.22 are subject to removal penalties prescribed in section 290C.11. 96.23 The claimant has 60 days from the receipt of notice from the 96.24 commissioner under this section to pay the delinquent taxes. If 96.25 the delinquent taxes are paid within this 60-day period, the 96.26 lands shall be reinstated in the program as if they had not been 96.27 withdrawn and without the payment of a penalty. 96.28[EFFECTIVE DATE.] This section is effective the day 96.29 following final enactment. 96.30 Sec. 40. Minnesota Statutes 2002, section 290C.10, is 96.31 amended to read: 96.32 290C.10 [WITHDRAWAL PROCEDURES.] 96.33 An approved claimant under the sustainable forest incentive 96.34 program for a minimum of four years may notify the commissioner 96.35 of the intent to terminate enrollment. Within 90 days of 96.36 receipt of notice to terminate enrollment, the commissioner 97.1 shall inform the claimant in writing, acknowledging receipt of 97.2 this notice and indicating the effective date of termination 97.3 from the sustainable forest incentive program. Termination of 97.4 enrollment in the sustainable forest incentive program occurs on 97.5 January 1 of the fifth calendar year that begins after receipt 97.6 by the commissioner of the termination notice. After the 97.7 commissioner issues an effective date of termination, a claimant 97.8 wishing to continue theproperty'sland's enrollment in the 97.9 sustainable forest incentive program beyond the termination date 97.10 must apply for enrollment as prescribed in section 290C.04. A 97.11 claimant who withdraws a parcel of land from this program may 97.12 not reenroll the parcel for a period of three years. Within 90 97.13 days after the termination date, the commissioner shall execute 97.14 and acknowledge a document releasing the land from the covenant 97.15 required under this chapter. The document must be mailed to the 97.16 claimant and is entitled to be recorded. The commissioner may 97.17 allow early withdrawal from the Sustainable Forest Incentive Act 97.18 without penalty in cases of condemnation for a public purpose 97.19 notwithstanding the provisions of this section. 97.20[EFFECTIVE DATE.] This section is effective the day 97.21 following final enactment. 97.22 Sec. 41. Minnesota Statutes 2002, section 290C.11, is 97.23 amended to read: 97.24 290C.11 [PENALTIES FOR REMOVAL.] 97.25 (a) If the commissioner determines thatpropertyland 97.26 enrolled in the sustainable forest incentive program is in 97.27 violation of the conditions for enrollment as specified in 97.28 section 290C.03, the commissioner shall notify the claimant of 97.29 the intent to remove all enrolled land from the sustainable 97.30 forest incentive program. The claimant has 60 days to appeal 97.31 this determination. The appeal must be made in writing to the 97.32 commissioner, who shall, within 60 days, notify the claimant as 97.33 to the outcome of the appeal. Within 60 days after the 97.34 commissioner denies an appeal, or within 120 days after the 97.35 commissioner received a written appeal if the commissioner has 97.36 not made a determination in that time, the owner may appeal to 98.1 tax court under chapter 271 as if the appeal is from an order of 98.2 the commissioner. 98.3 (b) If the commissioner determines thepropertyland is to 98.4 be removed from the sustainable forest incentive program, the 98.5 claimant is liable for payment to the commissioner in the amount 98.6 equal to the payments received under this chapter for the 98.7 previous four-year period, plus interest. The claimant has 90 98.8 days to satisfy the payment for removal of land from the 98.9 sustainable forest incentive program under this section. If the 98.10 penalty is not paid within the 90-day period under this 98.11 paragraph, the commissioner shall certify the amount to the 98.12 county auditor for collection as a part of the general ad 98.13 valorem real property taxes on the land in the following taxes 98.14 payable year. 98.15[EFFECTIVE DATE.] This section is effective the day 98.16 following final enactment. 98.17 Sec. 42. [290C.12] [DEATH OF CLAIMANT.] 98.18 Within one year after the death of the claimant, the 98.19 claimant's heir, devisee, or estate must either: 98.20 (1) notify the commissioner of election to terminate 98.21 enrollment in the sustainable forest incentive program; or 98.22 (2) make an application under this chapter to continue 98.23 enrollment of the land in the program. 98.24 Upon notification under clause (1), the commissioner shall 98.25 terminate the enrollment and issue a document releasing the land 98.26 from the covenant as provided in section 290C.04, paragraph 98.27 (c). Penalties under section 290C.11 shall not apply. If the 98.28 application under clause (2) is approved, the land is enrolled 98.29 in the program without a break. If the commissioner does not 98.30 receive notification within one year after the date of death, 98.31 enrollment in the program shall be terminated and penalties 98.32 under section 290C.11 shall not apply. 98.33[EFFECTIVE DATE.] This section is effective the day 98.34 following final enactment, except in the case of claimants dying 98.35 prior to the day following final enactment, heirs, devisees, or 98.36 estates may make the election either six months after the 99.1 effective date of this provision or one year after the death of 99.2 the claimant, whichever is later. 99.3 Sec. 43. Minnesota Statutes 2002, section 469.1792, 99.4 subdivision 3, is amended to read: 99.5 Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a 99.6 district qualifying under this section may take either or both 99.7 of the following actions for any or all of its preexisting 99.8 districts: 99.9 (1) the authority may elect that the original local tax 99.10 rate under section 469.177, subdivision 1a, does not apply to 99.11 the district; and 99.12 (2) the authority may elect the fiscal disparities 99.13 contribution will be computed under section 469.177, subdivision 99.14 3, paragraph (a), regardless of the election that was made for 99.15 the district. 99.16 (b) The authority may take action under this subdivision 99.17 only after the municipality approves the action, by resolution, 99.18 after notice and public hearing in the manner provided under 99.19 section 469.175, subdivision 2. To be effective for taxes 99.20 payable in the following year, the resolution must be adopted 99.21 and the county auditor must be notified of the adoption on or 99.22 before July 1. 99.23[EFFECTIVE DATE.] This section is effective for taxes 99.24 payable in 2004 and thereafter. 99.25 Sec. 44. Minnesota Statutes 2002, section 473F.07, 99.26 subdivision 4, is amended to read: 99.27 Subd. 4. [DISTRIBUTION NET TAX CAPACITY.] The 99.28 administrative auditor shall determine the proportion which the 99.29 index of each municipality bears to the sum of the indices of 99.30 all municipalities and shall then multiply this proportion in 99.31 the case of each municipality, by the areawide net tax capacity,99.32provided that if the distribution net tax capacity for a99.33municipality is less than 95 percent of the municipality's99.34previous year distribution net tax capacity, and more than ten99.35percent of the municipality's fiscal capacity consists of99.36manufactured home property, the municipality's distribution net100.1tax capacity will be increased to 95 percent of the previous100.2year net tax capacity and the distribution net tax capacity of100.3other municipalities in the area will be proportionately reduced. 100.4[EFFECTIVE DATE.] This section is effective for taxes 100.5 payable in 2004 and subsequent years. 100.6 Sec. 45. Minnesota Statutes 2002, section 515B.1-116, is 100.7 amended to read: 100.8 515B.1-116 [RECORDING.] 100.9 (a) A declaration, bylaws, any amendment to a declaration 100.10 or bylaws, and any other instrument affecting a common interest 100.11 community shall be entitled to be recorded. In those counties 100.12 which have a tract index, the county recorder shall enter the 100.13 declaration in the tract index for each unit affected. The 100.14 registrar of titles shall file the declaration in accordance 100.15 with section 508.351 or 508A.351. 100.16 (b) The recording officer shall upon request promptly 100.17 assign a number (CIC number) to a common interest community to 100.18 be formed or to a common interest community resulting from the 100.19 merger of two or more common interest communities. 100.20 (c) Documents recorded pursuant to this chapter shall in 100.21 the case of registered land be filed, and references to the 100.22 recording of documents shall mean filed in the case of 100.23 registered land. 100.24 (d) Subject to any specific requirements of this chapter, 100.25 if a recorded document relating to a common interest community 100.26 purports to require a certain vote or signatures approving any 100.27 restatement or amendment of the document by a certain number or 100.28 percentage of unit owners or secured parties, and if the 100.29 amendment or restatement is to be recorded pursuant to this 100.30 chapter, an affidavit of the president or secretary of the 100.31 association stating that the required vote or signatures have 100.32 been obtained shall be attached to the document to be recorded 100.33 and shall constitute prima facie evidence of the representations 100.34 contained therein. 100.35 (e) If a common interest community is located on registered 100.36 land, the recording fee for any document affecting two or more 101.1 units shall be the then-current fee for registering the document 101.2 on the certificates of title for the first ten affected 101.3 certificates and one-third of the then-current fee for each 101.4 additional affected certificate. This provision shall not apply 101.5 to recording fees for deeds of conveyance, with the exception of 101.6 deeds given pursuant to sections 515B.2-119 and 515B.3-112. 101.7 (f) Except as permitted under this subsection, a recording 101.8 officer shall not file or record a declaration creating a new 101.9 common interest community, unless the county treasurer has 101.10 certified that the property taxes payable in the current year 101.11 for the real estate included in the proposed common interest 101.12 community have been paid. This certification is in addition to 101.13 the certification for delinquent taxes required by section 101.14 272.12. In the case of preexisting common interest communities, 101.15 the recording officer shall accept, file, and record the 101.16 following instruments, without requiring a certification as to 101.17 the current or delinquent taxes on any of the units in the 101.18 common interest community: (i) a declaration subjecting the 101.19 common interest community to this chapter; (ii) a declaration 101.20 changing the form of a common interest community pursuant to 101.21 section 515B.2-123; or (iii) an amendment to or restatement of 101.22 the declaration, bylaws, or CIC plat. In order forthe101.23instrumentsan instrument to be accepted and recorded under the 101.24 preceding sentence, theassessor must certify or otherwise101.25inform the recording officer that, for taxes payable in the101.26current year, the assessor has allocated taxable values to each101.27unit or has separately assessed each unitinstrument must not 101.28 create or change unit or common area boundaries. 101.29[EFFECTIVE DATE.] This section is effective for deeds or 101.30 instruments accepted for recording or registration on or after 101.31 July 1, 2003. 101.32 Sec. 46. Laws 2001, First Special Session chapter 5, 101.33 article 3, section 61, the effective date, is amended to read: 101.34[EFFECTIVE DATE.] This section is effective August 1, 2001, 101.35 for deeds issued on or after August 1, 2001. This section is 101.36 effective August 1, 2006, for deeds issued before August 1, 2001. 102.1 Sec. 47. Laws 2001, First Special Session chapter 5, 102.2 article 3, section 63, the effective date, is amended to read: 102.3[EFFECTIVE DATE.] This section is effective August 1, 2001, 102.4 for deeds issued on or after August 1, 2001. This section is 102.5 effective August 1, 2006, for deeds issued before August 1, 2001. 102.6 Sec. 48. Laws 2002, chapter 377, article 6, section 4, the 102.7 effective date, is amended to read: 102.8[EFFECTIVE DATE.] This section is effectivefor aids102.9payable in 2004May 16, 2002, and thereafter. 102.10 Sec. 49. [REPEALER.] 102.11 (a) Minnesota Statutes 2002, section 274.04, is repealed. 102.12 (b) Minnesota Statutes 2002, section 477A.065, is repealed 102.13 effective for aid payable in 2004 and thereafter. 102.14 (c) Minnesota Rules, parts 8106.0100, subparts 11, 15, and 102.15 16; and 8106.0200, are repealed effective the day following 102.16 final enactment. 102.17 ARTICLE 6 102.18 DEPARTMENT SALES AND USE TAX INITIATIVES 102.19 Section 1. Minnesota Statutes 2002, section 289A.50, 102.20 subdivision 2a, is amended to read: 102.21 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] (a) If a 102.22 vendor has collected from a purchaser a tax on a transaction 102.23 that is not subject to the tax imposed by chapter 297A, the 102.24 purchaser may apply directly to the commissioner for a refund 102.25 under this section if: 102.26(a)(1) the purchaser is currently registered or was 102.27 registered during the period of the claim, to collect and remit 102.28 the sales tax or to remit the use tax; and 102.29 (2) either 102.30(b)(i) the amount of the refund to be applied for exceeds 102.31 $500, or 102.32 (ii) the amount of the refund to be applied for does not 102.33 exceed $500, but the purchaser also applies for a capital 102.34 equipment claim at the same time, and the total of the two 102.35 refunds exceeds $500. 102.36 (b) The purchaser may not file more than two applications 103.1 for refund under this subdivision in a calendar year. 103.2[EFFECTIVE DATE.] This section is effective for claims 103.3 filed on or after the day following final enactment. 103.4 Sec. 2. Minnesota Statutes 2002, section 289A.60, is 103.5 amended by adding a subdivision to read: 103.6 Subd. 25. [PENALTY FOR FAILURE TO PROPERLY COMPLETE SALES 103.7 TAX RETURN.] A person who fails to report local sales tax on a 103.8 sales tax return or who fails to report local sales tax on 103.9 separate tax lines on the sales tax return is subject to a 103.10 penalty of five percent of the amount of tax not properly 103.11 reported on the return. A person who files a consolidated tax 103.12 return but fails to report location information is subject to a 103.13 $500 penalty for each return not containing location 103.14 information. In addition, the commissioner may revoke the 103.15 privilege for a taxpayer to file consolidated returns and may 103.16 require the taxpayer to separately register each location and to 103.17 file a tax return for each location. 103.18[EFFECTIVE DATE.] This section is effective for returns 103.19 filed after June 30, 2003. 103.20 Sec. 3. Minnesota Statutes 2002, section 297A.61, 103.21 subdivision 3, is amended to read: 103.22 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 103.23 include, but are not limited to, each of the transactions listed 103.24 in this subdivision. 103.25 (b) Sale and purchase include: 103.26 (1) any transfer of title or possession, or both, of 103.27 tangible personal property, whether absolutely or conditionally, 103.28 for a consideration in money or by exchange or barter; and 103.29 (2) the leasing of or the granting of a license to use or 103.30 consume, for a consideration in money or by exchange or barter, 103.31 tangible personal property, other than a manufactured home used 103.32 for residential purposes for a continuous period of 30 days or 103.33 more. 103.34 (c) Sale and purchase include the production, fabrication, 103.35 printing, or processing of tangible personal property for a 103.36 consideration for consumers who furnish either directly or 104.1 indirectly the materials used in the production, fabrication, 104.2 printing, or processing. 104.3 (d) Sale and purchase include the preparing for a 104.4 consideration of food. Notwithstanding section 297A.67, 104.5 subdivision 2, taxable food includes, but is not limited to, the 104.6 following: 104.7 (1) prepared food sold by the retailer; 104.8 (2) soft drinks; 104.9 (3) candy; and 104.10 (4) all food sold through vending machines. 104.11 (e) A sale and a purchase includes the furnishing for a 104.12 consideration of electricity, gas, water, or steam for use or 104.13 consumption within this state. 104.14 (f) A sale and a purchase includes the transfer for a 104.15 consideration of computer software. 104.16 (g) A sale and a purchase includes the furnishing for a 104.17 consideration of the following services: 104.18 (1) the privilege of admission to places of amusement, 104.19 recreational areas, or athletic events, and the making available 104.20 of amusement devices, tanning facilities, reducing salons, steam 104.21 baths, turkish baths, health clubs, and spas or athletic 104.22 facilities; 104.23 (2) lodging and related services by a hotel, rooming house, 104.24 resort, campground, motel, or trailer camp and the granting of 104.25 any similar license to use real property other than the renting 104.26 or leasing of it for a continuous period of 30 days or more; 104.27 (3) nonresidential parking services, whether on a 104.28 contractual, hourly, or other periodic basis, except for parking 104.29 at a meter; 104.30 (4) the granting of membership in a club, association, or 104.31 other organization if: 104.32 (i) the club, association, or other organization makes 104.33 available for the use of its members sports and athletic 104.34 facilities, without regard to whether a separate charge is 104.35 assessed for use of the facilities; and 104.36 (ii) use of the sports and athletic facility is not made 105.1 available to the general public on the same basis as it is made 105.2 available to members. 105.3 Granting of membership means both onetime initiation fees and 105.4 periodic membership dues. Sports and athletic facilities 105.5 include golf courses; tennis, racquetball, handball, and squash 105.6 courts; basketball and volleyball facilities; running tracks; 105.7 exercise equipment; swimming pools; and other similar athletic 105.8 or sports facilities; 105.9 (5) delivery of aggregate materials and concrete block by a 105.10 third party if the delivery would be subject to the sales tax if 105.11 provided by the seller of the aggregate material or concrete 105.12 block; and 105.13 (6) services as provided in this clause: 105.14 (i) laundry and dry cleaning services including cleaning, 105.15 pressing, repairing, altering, and storing clothes, linen 105.16 services and supply, cleaning and blocking hats, and carpet, 105.17 drapery, upholstery, and industrial cleaning. Laundry and dry 105.18 cleaning services do not include services provided by coin 105.19 operated facilities operated by the customer; 105.20 (ii) motor vehicle washing, waxing, and cleaning services, 105.21 including services provided by coin operated facilities operated 105.22 by the customer, and rustproofing, undercoating, and towing of 105.23 motor vehicles; 105.24 (iii) building and residential cleaning, maintenance, and 105.25 disinfecting and exterminating services; 105.26 (iv) detective, security, burglar, fire alarm, and armored 105.27 car services; but not including services performed within the 105.28 jurisdiction they serve by off-duty licensed peace officers as 105.29 defined in section 626.84, subdivision 1, or services provided 105.30 by a nonprofit organization for monitoring and electronic 105.31 surveillance of persons placed on in-home detention pursuant to 105.32 court order or under the direction of the Minnesota department 105.33 of corrections; 105.34 (v) pet grooming services; 105.35 (vi) lawn care, fertilizing, mowing, spraying and sprigging 105.36 services; garden planting and maintenance; tree, bush, and shrub 106.1 pruning, bracing, spraying, and surgery; indoor plant care; 106.2 tree, bush, shrub, and stump removal; and tree trimming for 106.3 public utility lines. Services performed under a construction 106.4 contract for the installation of shrubbery, plants, sod, trees, 106.5 bushes, and similar items are not taxable; 106.6 (vii) massages, except when provided by a licensed health 106.7 care facility or professional or upon written referral from a 106.8 licensed health care facility or professional for treatment of 106.9 illness, injury, or disease; and 106.10 (viii) the furnishing of lodging, board, and care services 106.11 for animals in kennels and other similar arrangements, but 106.12 excluding veterinary and horse boarding services. 106.13 In applying the provisions of this chapter, the terms 106.14 "tangible personal property" and "sales at retail" include 106.15 taxable services listed in clause (6), items (i) to (vi) and 106.16 (viii) and the provision of these taxable services, unless 106.17 specifically provided otherwise. Services performed by an 106.18 employee for an employer are not taxable. Services performed by 106.19 a partnership or association for another partnership or 106.20 association are not taxable if one of the entities owns or 106.21 controls more than 80 percent of the voting power of the equity 106.22 interest in the other entity. Services performed between 106.23 members of an affiliated group of corporations are not taxable. 106.24 For purposes ofthis sectionthe preceding sentence, "affiliated 106.25 group of corporations" includes those entities that would be 106.26 classified as members of an affiliated group under United States 106.27 Code, title 26, section 1504, and that are eligible to file a 106.28 consolidated tax return for federal income tax purposes. 106.29 (h) A sale and a purchase includes the furnishing for a 106.30 consideration of tangible personal property or taxable services 106.31 by the United States or any of its agencies or 106.32 instrumentalities, or the state of Minnesota, its agencies, 106.33 instrumentalities, or political subdivisions. 106.34 (i) A sale and a purchase includes the furnishing for a 106.35 consideration of telecommunications services, including cable 106.36 television services and direct satellite services. 107.1 Telecommunications services are taxed to the extent allowed 107.2 under federal law if those services: 107.3 (1) either (i) originate and terminate in this state; or 107.4 (ii) originate in this state and terminate outside the state and 107.5 the service is charged to atelephone numbertelecommunications 107.6 customer located in this state or to the account of any 107.7 transmission instrument in this state; or (iii) originate 107.8 outside this state and terminate in this state and the service 107.9 is charged to atelephone numbertelecommunications customer 107.10 located in this state or to the account of any transmission 107.11 instrument in this state; or 107.12 (2) are rendered by providing a private communications 107.13 service for which the customer has one or more locations within 107.14 Minnesota connected to the service and the service is charged to 107.15 atelephone numbertelecommunications customer located in this 107.16 state or to the account of any transmission instrument in this 107.17 state. 107.18 All charges for mobile telecommunications services, as 107.19 defined in United States Code, title 4, section 124, are deemed 107.20 to be provided by the customer's home service provider and 107.21 sourced to the customer's place of primary use and are subject 107.22 to tax based upon the customer's place of primary use in 107.23 accordance with the Mobile Telecommunications Sourcing Act, 107.24 United States Code, title 4, sections 116 to 126. All other 107.25 definitions and provisions of the Mobile Telecommunications 107.26 Sourcing Act as provided in United States Code, title 4, are 107.27 hereby adopted. 107.28 (j) A sale and a purchase includes the furnishing for a 107.29 consideration of installation if the installation charges would 107.30 be subject to the sales tax if the installation were provided by 107.31 the seller of the item being installed. 107.32[EFFECTIVE DATE.] This section is effective the day 107.33 following final enactment. 107.34 Sec. 4. Minnesota Statutes 2002, section 297A.61, 107.35 subdivision 12, is amended to read: 107.36 Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new 108.1 or used machinery, equipment, implements, accessories, and 108.2 contrivances used directly and principally intheagricultural 108.3 productionfor sale, but not including the processing, of108.4livestock, dairy animals, dairy products, poultry and poultry108.5products, fruits, vegetables, trees and shrubs, plants, forage,108.6grains, and bees and apiary products.108.7(b) Farm machinery includesincluding, but not limited to: 108.8 (1) machinery for the preparation, seeding, or cultivation 108.9 of soil for growing agricultural cropsand sod, for the108.10harvesting and threshing of agricultural products, or for the108.11harvesting or mowing of sod; 108.12 (2) barn cleaners, milking systems, grain dryers, feeding 108.13 systems including stationary feed bunks, and similar 108.14 installations, whether or not the equipment is installed by the 108.15 seller and becomes part of the real property; and 108.16 (3) irrigation equipment sold for exclusively agricultural 108.17 use, including pumps, pipe fittings, valves, sprinklers, and 108.18 other equipment necessary to the operation of an irrigation 108.19 system when sold as part of an irrigation system, whether or not 108.20 the equipment is installed by the seller and becomes part of the 108.21 real property;. 108.22(4) logging equipment, including chain saws used for108.23commercial logging;108.24(5) fencing used for the containment of farmed cervidae, as108.25defined in section 17.451, subdivision 2;108.26(6) primary and backup generator units used to generate108.27electricity for the purpose of operating farm machinery, as108.28defined in this subdivision, or providing light or space heating108.29necessary for the production of livestock, dairy animals, dairy108.30products, or poultry and poultry products;108.31(7) aquaculture production equipment as defined in108.32subdivision 13; and108.33(8) equipment used for maple syrup harvesting.108.34(c)(b) Farm machinery does not include: 108.35 (1) repair or replacement parts; 108.36 (2) tools, shop equipment, grain bins, fencing material 109.1except fencing material covered by paragraph (b), clause (5), 109.2 communication equipment, and other farm supplies; 109.3 (3) motor vehicles taxed under chapter 297B; 109.4 (4) snowmobiles or snow blowers;or109.5 (5) lawn mowers except those used in the production of sod 109.6 for sale, or garden-type tractors or garden tillers; or 109.7 (6) machinery, equipment, implements, accessories, and 109.8 contrivances used directly in the production of horses not 109.9 raised for slaughter, fur-bearing animals, or research animals. 109.10[EFFECTIVE DATE.] This section is effective for sales and 109.11 purchases made after June 30, 2003. 109.12 Sec. 5. Minnesota Statutes 2002, section 297A.61, 109.13 subdivision 34, is amended to read: 109.14 Subd. 34. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 109.15 through vending machines" means food dispensed from a machine or 109.16 othermechanicaldevice that accepts payment including honor 109.17 payments. 109.18[EFFECTIVE DATE.] This section is effective for sales and 109.19 purchases made on or after the day following final enactment. 109.20 Sec. 6. Minnesota Statutes 2002, section 297A.61, is 109.21 amended by adding a subdivision to read: 109.22 Subd. 35. [AGRICULTURAL PRODUCTION.] "Agricultural 109.23 production" includes, but is not limited to, horticulture, 109.24 silviculture, floriculture, maple syrup harvesting, and the 109.25 raising of pets, livestock as defined in section 17A.03, 109.26 subdivision 5, poultry, dairy and poultry products, bees and 109.27 apiary products, the raising and harvesting of agricultural 109.28 crops, sod, fur-bearing animals, research animals, and horses. 109.29[EFFECTIVE DATE.] This section is effective for sales and 109.30 purchases made after June 30, 2003. 109.31 Sec. 7. Minnesota Statutes 2002, section 297A.665, is 109.32 amended to read: 109.33 297A.665 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 109.34 (a) For the purpose of the proper administration of this 109.35 chapter and to prevent evasion of the tax, until the contrary is 109.36 established, it is presumed that: 110.1 (1) all gross receipts are subject to the tax; and 110.2 (2) all retail sales for delivery in Minnesota are for 110.3 storage, use, or other consumption in Minnesota. 110.4 (b) The burden of proving that a sale is not a taxable 110.5 retail sale is on the seller. However, the seller may take from 110.6 the purchaser at the time of the saleana fully completed 110.7 exemption certificateclaiming that the property purchased is110.8for resale or that the sale is otherwise exempt from the tax110.9imposed by this chapterwhich conclusively relieves the seller 110.10 from collecting and remitting the tax. This relief from 110.11 liability does not apply to a seller who fraudulently fails to 110.12 collect the tax or solicits purchasers to participate in the 110.13 unlawful claim of an exemption. If a seller claiming that 110.14 certain sales are exempt, who doesis notpossessin possession 110.15 of the required exemption certificates, must acquire the110.16certificateswithin 60 days after receiving written notice from 110.17 the commissioner that the certificates are required, deductions 110.18 claimed by the seller that required delivery of the certificates 110.19 must be disallowed. If the certificates arenot110.20obtaineddelivered to the commissioner within the 60-day period, 110.21 thesales are considered taxable sales under this110.22chapter.commissioner may verify the reason or basis for the 110.23 exemption claimed in the certificates before allowing any 110.24 deductions. A deduction must not be granted on the basis of 110.25 certificates delivered to the commissioner after the 60-day 110.26 period. 110.27 (c) A purchaser of tangible personal property or any items 110.28 listed in section 297A.63 that are shipped or brought to 110.29 Minnesota by the purchaser has the burden of proving that the 110.30 property was not purchased from a retailer for storage, use, or 110.31 consumption in Minnesota. 110.32[EFFECTIVE DATE.] This section is effective for exemption 110.33 certificates received for sales occurring after June 30, 2003. 110.34 Sec. 8. Minnesota Statutes 2002, section 297A.67, 110.35 subdivision 2, is amended to read: 110.36 Subd. 2. [FOOD AND FOOD INGREDIENTS.] Food and food 111.1 ingredients are exempt. For purposes of this subdivision, 111.2 "food" and "food ingredients" mean substances, whether in 111.3 liquid, concentrated, solid, frozen, dried, or dehydrated form, 111.4 that are sold for ingestion or chewing by humans and are 111.5 consumed for their taste or nutritional value. Food and food 111.6 ingredients exempt under this subdivision do not include candy, 111.7 soft drinks, food sold through vending machines, and prepared 111.8 foods. Food and food ingredients do not include alcoholic 111.9 beverages, dietary supplements, and tobacco. For purposes of 111.10 this subdivision, "alcoholic beverages" means beverages that are 111.11 suitable for human consumption and contain one-half of one 111.12 percent or more of alcohol by volume. For purposes of this 111.13 subdivision, "tobacco" means cigarettes, cigars, chewing or pipe 111.14 tobacco, or any other item that contains tobacco. For purposes 111.15 of this subdivision, "dietary supplements" means any product, 111.16 other than tobacco, intended to supplement the diet that: 111.17 (1) contains one or more of the following dietary 111.18 ingredients: 111.19 (i) a vitamin; 111.20 (ii) a mineral; 111.21 (iii) an herb or other botanical; 111.22 (iv) an amino acid; 111.23 (v) a dietary substance for use by humans to supplement the 111.24 diet by increasing the total dietary intake; and 111.25 (vi) a concentrate, metabolite, constituent, extract, or 111.26 combination of any ingredient described in items (i) to (v); 111.27 (2) is intended for ingestion in tablet, capsule, powder, 111.28 softgel, gelcap, or liquid form, or if not intended for 111.29 ingestion in such form, is not represented as conventional food 111.30 and is not represented for use as a sole item of a meal or of 111.31 the diet; and 111.32 (3) is required to be labeled as a dietary supplement, 111.33 identifiable by the supplement facts box found on the label and 111.34 as required pursuant to Code of Federal Regulations, title 21, 111.35 section 101.36. 111.36[EFFECTIVE DATE.] This section is effective the day 112.1 following final enactment. 112.2 Sec. 9. Minnesota Statutes 2002, section 297A.68, 112.3 subdivision 5, is amended to read: 112.4 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 112.5 exempt. The tax must be imposed and collected as if the rate 112.6 under section 297A.62, subdivision 1, applied, and then refunded 112.7 in the manner provided in section 297A.75. 112.8 "Capital equipment" means machinery and equipment purchased 112.9 or leased, and used in this state by the purchaser or lessee 112.10 primarily for manufacturing, fabricating, mining, or refining 112.11 tangible personal property to be sold ultimately at retail if 112.12 the machinery and equipment are essential to the integrated 112.13 production process of manufacturing, fabricating, mining, or 112.14 refining. Capital equipment also includes machinery and 112.15 equipment used to electronically transmit results retrieved by a 112.16 customer of an online computerized data retrieval system. 112.17 (b) Capital equipment includes, but is not limited to: 112.18 (1) machinery and equipment used to operate, control, or 112.19 regulate the production equipment; 112.20 (2) machinery and equipment used for research and 112.21 development, design, quality control, and testing activities; 112.22 (3) environmental control devices that are used to maintain 112.23 conditions such as temperature, humidity, light, or air pressure 112.24 when those conditions are essential to and are part of the 112.25 production process; 112.26 (4) materials and supplies used to construct and install 112.27 machinery or equipment; 112.28 (5) repair and replacement parts, including accessories, 112.29 whether purchased as spare parts, repair parts, or as upgrades 112.30 or modifications to machinery or equipment; 112.31 (6) materials used for foundations that support machinery 112.32 or equipment; 112.33 (7) materials used to construct and install special purpose 112.34 buildings used in the production process; and 112.35 (8) ready-mixed concretetrucksequipment in which the 112.36 ready-mixed concrete is mixed as part of the delivery 113.1 process regardless if mounted on a chassis and leases of 113.2 ready-mixed concrete trucks. 113.3 (c) Capital equipment does not include the following: 113.4 (1) motor vehicles taxed under chapter 297B; 113.5 (2) machinery or equipment used to receive or store raw 113.6 materials; 113.7 (3) building materials, except for materials included in 113.8 paragraph (b), clauses (6) and (7); 113.9 (4) machinery or equipment used for nonproduction purposes, 113.10 including, but not limited to, the following: plant security, 113.11 fire prevention, first aid, and hospital stations; support 113.12 operations or administration; pollution control; and plant 113.13 cleaning, disposal of scrap and waste, plant communications, 113.14 space heating, cooling, lighting, or safety; 113.15 (5) farm machinery and aquaculture production equipment as 113.16 defined by section 297A.61, subdivisions 12 and 13; 113.17 (6) machinery or equipment purchased and installed by a 113.18 contractor as part of an improvement to real property; or 113.19 (7) any other item that is not essential to the integrated 113.20 process of manufacturing, fabricating, mining, or refining. 113.21 (d) For purposes of this subdivision: 113.22 (1) "Equipment" means independent devices or tools separate 113.23 from machinery but essential to an integrated production 113.24 process, including computers and computer software, used in 113.25 operating, controlling, or regulating machinery and equipment; 113.26 and any subunit or assembly comprising a component of any 113.27 machinery or accessory or attachment parts of machinery, such as 113.28 tools, dies, jigs, patterns, and molds. 113.29 (2) "Fabricating" means to make, build, create, produce, or 113.30 assemble components or property to work in a new or different 113.31 manner. 113.32 (3) "Integrated production process" means a process or 113.33 series of operations through which tangible personal property is 113.34 manufactured, fabricated, mined, or refined. For purposes of 113.35 this clause, (i) manufacturing begins with the removal of raw 113.36 materials from inventory and ends when the last process prior to 114.1 loading for shipment has been completed; (ii) fabricating begins 114.2 with the removal from storage or inventory of the property to be 114.3 assembled, processed, altered, or modified and ends with the 114.4 creation or production of the new or changed product; (iii) 114.5 mining begins with the removal of overburden from the site of 114.6 the ores, minerals, stone, peat deposit, or surface materials 114.7 and ends when the last process before stockpiling is completed; 114.8 and (iv) refining begins with the removal from inventory or 114.9 storage of a natural resource and ends with the conversion of 114.10 the item to its completed form. 114.11 (4) "Machinery" means mechanical, electronic, or electrical 114.12 devices, including computers and computer software, that are 114.13 purchased or constructed to be used for the activities set forth 114.14 in paragraph (a), beginning with the removal of raw materials 114.15 from inventory through completion of the product, including 114.16 packaging of the product. 114.17(4)(5) "Machinery and equipment used for pollution control" 114.18 means machinery and equipment used solely to eliminate, prevent, 114.19 or reduce pollution resulting from an activity described in 114.20 paragraph (a). 114.21(5)(6) "Manufacturing" means an operation or series of 114.22 operations where raw materials are changed in form, composition, 114.23 or condition by machinery and equipment and which results in the 114.24 production of a new article of tangible personal property. For 114.25 purposes of this subdivision, "manufacturing" includes the 114.26 generation of electricity or steam to be sold at retail. 114.27(6)(7) "Mining" means the extraction of minerals, ores, 114.28 stone, or peat. 114.29(7)(8) "Online data retrieval system" means a system whose 114.30 cumulation of information is equally available and accessible to 114.31 all its customers. 114.32(8)(9) "Primarily" means machinery and equipment used 50 114.33 percent or more of the time in an activity described in 114.34 paragraph (a). 114.35(9)(10) "Refining" means the process of converting a 114.36 natural resource toaan intermediate or finished product, 115.1 including the treatment of water to be sold at retail. 115.2[EFFECTIVE DATE.] This section is effective for sales and 115.3 purchases made after December 31, 2003. 115.4 Sec. 10. Minnesota Statutes 2002, section 297A.68, is 115.5 amended by adding a subdivision to read: 115.6 Subd. 39. [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of 115.7 tangible personal property or services is exempt from tax for a 115.8 period of six months from the effective date of the law change 115.9 that results in the imposition of the tax under this chapter if: 115.10 (1) the act imposing the tax does not have transitional 115.11 effective date language for existing construction contracts and 115.12 construction bids; and 115.13 (2) the requirements of paragraph (b) are met. 115.14 (b) A sale is tax exempt under paragraph (a) if it meets 115.15 the requirements of either clause (1) or (2): 115.16 (1) For a construction contract: 115.17 (i) the goods or services sold must be used for the 115.18 performance of a bona fide written lump sum or fixed price 115.19 construction contract; 115.20 (ii) the contract must be entered into before the date the 115.21 goods or services become subject to the sales tax; 115.22 (iii) the contract must not provide for allocation of 115.23 future taxes; and 115.24 (iv) for each qualifying contract the contractor must give 115.25 the seller documentation of the contract on which an exemption 115.26 is to be claimed. 115.27 (2) For a bid: 115.28 (i) the goods or services sold must be used pursuant to an 115.29 obligation of a bid or bids; 115.30 (ii) the bid or bids must be submitted and accepted before 115.31 the date the goods or services became subject to the sales tax; 115.32 (iii) the bid or bids must not be able to be withdrawn, 115.33 modified, or changed without forfeiting a bond; and 115.34 (iv) for each qualifying bid, the contractor must give the 115.35 seller documentation of the bid on which an exemption is to be 115.36 claimed. 116.1[EFFECTIVE DATE.] This section is effective the day 116.2 following final enactment. 116.3 Sec. 11. Minnesota Statutes 2002, section 297A.69, 116.4 subdivision 2, is amended to read: 116.5 Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 116.6(a)Materials stored, used, or consumed in agricultural 116.7 production of personal property intended to be sold ultimately 116.8 at retail are exempt, whether or not the item becomes an 116.9 ingredient or constituent part of the property produced. 116.10 Materials that qualify for this exemption include, but are not 116.11 limited to, the following: 116.12 (1) feeds, seeds, trees, fertilizers, and herbicides, 116.13 including when purchased for use by farmers in a federal or 116.14 state farm or conservation program; 116.15 (2) materials sold to a veterinarian to be used or consumed 116.16 in the care, medication, and treatment of agricultural 116.17 production animals and horses; 116.18 (3) chemicals, including chemicals used for cleaning food 116.19 processing machinery and equipment; 116.20 (4) materials, including chemicals, fuels, and electricity 116.21 purchased by persons engaged in agricultural production to treat 116.22 waste generated as a result of the production process; 116.23 (5) fuels, electricity, gas, and steam used or consumed in 116.24 the production process, except that electricity, gas, or steam 116.25 used for space heating, cooling, or lighting is exempt if (i) it 116.26 is in excess of the average climate control or lighting for the 116.27 production area, and (ii) it is necessary to produce that 116.28 particular product; 116.29 (6) petroleum products and lubricants; 116.30 (7) packaging materials, including returnable containers 116.31 used in packaging food and beverage products; and 116.32 (8) accessory tools and equipment that are separate 116.33 detachable units with an ordinary useful life of less than 12 116.34 months used in producing a direct effect upon the product. 116.35 Machinery, equipment, implements, tools, accessories, 116.36 appliances, contrivances, and furniture and fixtures, except 117.1 those listed in this clause are not included within this 117.2 exemption. 117.3(b) For purposes of this subdivision, "agricultural117.4production" includes, but is not limited to, horticulture,117.5floriculture, maple syrup harvesting, and the raising of pets,117.6fur-bearing animals, research animals, horses, farmed cervidae117.7as defined in section 17.451, subdivision 2, llamas as defined117.8in section 17.455, subdivision 2, and ratitae as defined in117.9section 17.453, subdivision 3.117.10[EFFECTIVE DATE.] This section is effective for sales and 117.11 purchases made after December 31, 2003. 117.12 Sec. 12. Minnesota Statutes 2002, section 297A.69, 117.13 subdivision 3, is amended to read: 117.14 Subd. 3. [FARM MACHINERYREPAIR AND REPLACEMENT PARTS.] 117.15 Repair and replacement parts, except tires, used for maintenance 117.16 or repair of farm machinery, logging equipment, and aquaculture 117.17 production equipment are exempt, if the part replaces afarm117.18 machinery part assigned a specific or generic part number by the 117.19 manufacturer of thefarmmachinery. 117.20[EFFECTIVE DATE.] This section is effective for sales and 117.21 purchases made after June 30, 2003. 117.22 Sec. 13. Minnesota Statutes 2002, section 297A.69, 117.23 subdivision 4, is amended to read: 117.24 Subd. 4. [FARMMACHINERY, EQUIPMENT, AND FENCING.] The 117.25 following machinery, equipment, and fencing is exempt: 117.26 (1) farm machineryis exempt.; 117.27 (2) logging equipment, including chain saws used for 117.28 commercial logging; 117.29 (3) fencing used for the containment of farmed cervidae, as 117.30 defined in section 17.451, subdivision 2; 117.31 (4) primary and backup generator units used to generate 117.32 electricity for the purpose of operating farm machinery, 117.33 aquacultural production equipment, or logging equipment, or 117.34 providing light or space heating necessary for the production of 117.35 livestock, dairy animals, dairy products, or poultry and poultry 117.36 products; and 118.1 (5) aquaculture production equipment. 118.2[EFFECTIVE DATE.] This section is effective for sales and 118.3 purchases made after June 30, 2003. 118.4 Sec. 14. Minnesota Statutes 2002, section 297B.025, 118.5 subdivision 1, is amended to read: 118.6 Subdivision 1. [NONCOLLECTOR VEHICLE.] Purchase or use of 118.7 a passenger automobile as defined in section 168.011, 118.8 subdivision 7, shall be taxed pursuant to section 297B.02, 118.9 subdivision 2, if the passenger automobileis(1) is in the 118.10 tenth or subsequent year of vehicle life, and (2)is not an118.11above-market automobile as designated by the registrar of motor118.12vehiclesdoes not have a resale value of $3,000 or more, as 118.13 determined using nationally recognized sources of information on 118.14 automobile resale values, as designated by the registrar of 118.15 motor vehicles. 118.16The registrar of motor vehicles shall prepare, and118.17distribute to all deputy motor vehicle registrars by July 15,118.181985, a listing by make, model, and year of above-market118.19automobiles. Except as provided by subdivision 2, the registrar118.20must include in the list all automobiles with a resale value of118.21$3,000 or more, as determined using nationally recognized118.22sources of information on automobile resale values. The118.23registrar shall revise the list by February 1 of each year. The118.24initial list and all subsequent revisions must include only118.25those automobiles which are in the tenth or subsequent year of118.26vehicle life.118.27[EFFECTIVE DATE.] This section is effective for vehicles 118.28 purchased after June 30, 2003. 118.29 Sec. 15. Minnesota Statutes 2002, section 297B.025, 118.30 subdivision 2, is amended to read: 118.31 Subd. 2. [COLLECTOR VEHICLE.] A passenger automobile that 118.32 is registered under section 168.10, subdivision 1a, 1b, 1c, 1d, 118.33 or 1h, or a fire truck registered under section 168.10, 118.34 subdivision 1c, shall be taxed under section 297B.02, 118.35 subdivision 3, and the registrar shall not designate as an118.36above-market automobile a passenger automobile or a fire truck119.1registered under those subdivisions. If the vehicle is 119.2 subsequently registered in another class not under section 119.3 168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of 119.4 the date of registration under those subdivisions, it shall be 119.5 subject to the full excise tax imposed under subdivision 1. 119.6[EFFECTIVE DATE.] This section is effective for vehicles 119.7 purchased after December 31, 2003. 119.8 Sec. 16. Minnesota Statutes 2002, section 297B.035, 119.9 subdivision 1, is amended to read: 119.10 Subdivision 1. [ORDINARY COURSE OF BUSINESS.] Except as 119.11 provided in this section, motor vehicles purchased for resale in 119.12 the ordinary course of businessor usedby any motor vehicle 119.13 dealer, as defined in section 168.011, subdivision 21, who is 119.14 licensed under section 168.27, subdivision 2 or 3, which bear 119.15 dealer plates as authorized by section 168.27, subdivision 16, 119.16 shall be exempt from the provisions of this chapter. 119.17[EFFECTIVE DATE.] This section is effective the day 119.18 following final enactment. 119.19 Sec. 17. [REPEALER.] 119.20 (a) Minnesota Statutes 2002, section 297A.72, subdivision 119.21 1, is repealed effective for exemption certificates received for 119.22 sales occurring after June 30, 2003. 119.23 (b) Minnesota Statutes 2002, section 297A.97, is repealed 119.24 effective for sales and purchases occurring after December 31, 119.25 2003. 119.26 (c) Minnesota Rules, parts 8130.0800, subparts 5 and 12; 119.27 8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3 and 4; 119.28 8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; and 119.29 8130.8300, are repealed effective the day following final 119.30 enactment. 119.31 ARTICLE 7 119.32 DEPARTMENT SPECIAL TAXES INITIATIVES 119.33 Section 1. Minnesota Statutes 2002, section 115B.24, 119.34 subdivision 8, is amended to read: 119.35 Subd. 8. [PENALTIES; ENFORCEMENT.] The audit, penalty and 119.36 enforcement provisions applicable to corporate franchise taxes 120.1 imposed under chapter 290 apply to the taxes imposed under 120.2 section 115B.22 and those provisions shall be administered by 120.3 the commissioner. 120.4[EFFECTIVE DATE.] This section is effective the day 120.5 following final enactment. 120.6 Sec. 2. Minnesota Statutes 2002, section 295.50, 120.7 subdivision 9b, is amended to read: 120.8 Subd. 9b. [PATIENT SERVICES.] (a) "Patient services" means 120.9 inpatient and outpatient services and other goods and services 120.10 provided by hospitals, surgical centers, or health care 120.11 providers. They include the following health care goods and 120.12 services provided to a patient or consumer: 120.13 (1) bed and board; 120.14 (2) nursing services and other related services; 120.15 (3) use of hospitals, surgical centers, or health care 120.16 provider facilities; 120.17 (4) medical social services; 120.18 (5) drugs, biologicals, supplies, appliances, and 120.19 equipment; 120.20 (6) other diagnostic or therapeutic items or services; 120.21 (7) medical or surgical services; 120.22 (8) items and services furnished to ambulatory patients not 120.23 requiring emergency care; 120.24 (9) emergency services; and 120.25 (10) covered services listed in section 256B.0625 and in 120.26 Minnesota Rules, parts 9505.0170 to 9505.0475. 120.27 (b) "Patient services" does not include: 120.28 (1) services provided to nursing homes licensed under 120.29 chapter 144A;and120.30 (2) examinations for purposes of utilization reviews, 120.31 insurance claims or eligibility, litigation, and employment, 120.32 including reviews of medical records for those purposes; 120.33 (3) services provided by community residential mental 120.34 health facilities licensed under Minnesota Rules, parts 120.35 9520.0500 to 9520.0690; 120.36 (4) services provided by community support programs and 121.1 family community support programs approved under Minnesota 121.2 Rules, parts 9535.1700 to 9535.1760; 121.3 (5) services provided by community mental health centers as 121.4 defined in section 245.62, subdivision 2; 121.5 (6) services provided by assisted living programs and 121.6 congregate housing programs; and 121.7 (7) hospice care services. 121.8[EFFECTIVE DATE.] This section is effective for gross 121.9 revenues received after December 31, 2002. 121.10 Sec. 3. Minnesota Statutes 2002, section 295.53, 121.11 subdivision 1, is amended to read: 121.12 Subdivision 1. [EXEMPTIONS.] (a) The following payments 121.13 are excluded from the gross revenues subject to the hospital, 121.14 surgical center, or health care provider taxes under sections 121.15 295.50 to295.57295.59: 121.16 (1) payments received for services provided under the 121.17 Medicare program, including payments received from the 121.18 government, and organizations governed by sections 1833 and 1876 121.19 of title XVIII of the federal Social Security Act, United States 121.20 Code, title 42, section 1395, and enrollee deductibles, 121.21 coinsurance, and copayments, whether paid by the Medicare 121.22 enrollee or by a Medicare supplemental coverage as defined in 121.23 section 62A.011, subdivision 3, clause (10). Payments for 121.24 services not covered by Medicare are taxable; 121.25 (2) medical assistance payments including payments received 121.26 directly from the government or from a prepaid plan; 121.27 (3) payments received for home health care services; 121.28 (4) payments received from hospitals or surgical centers 121.29 for goods and services on which liability for tax is imposed 121.30 under section 295.52 or the source of funds for the payment is 121.31 exempt under clause (1), (2), (7), (8), (10), (13), 121.32 or(20)(17); 121.33 (5) payments received from health care providers for goods 121.34 and services on which liability for tax is imposed under this 121.35 chapter or the source of funds for the payment is exempt under 121.36 clause (1), (2), (7), (8), (10), (13), or(20)(17); 122.1 (6) amounts paid for legend drugs, other than nutritional 122.2 products, to a wholesale drug distributor who is subject to tax 122.3 under section 295.52, subdivision 3, reduced by reimbursements 122.4 received for legend drugs otherwise exempt under this chapter; 122.5 (7) payments received under the general assistance medical 122.6 care program including payments received directly from the 122.7 government or from a prepaid plan; 122.8 (8) payments received for providing services under the 122.9 MinnesotaCare program including payments received directly from 122.10 the government or from a prepaid plan and enrollee deductibles, 122.11 coinsurance, and copayments. For purposes of this clause, 122.12 coinsurance means the portion of payment that the enrollee is 122.13 required to pay for the covered service; 122.14 (9) payments received by a health care provider or the 122.15 wholly owned subsidiary of a health care provider for care 122.16 provided outside Minnesota; 122.17 (10) payments received from the chemical dependency fund 122.18 under chapter 254B; 122.19 (11) payments received in the nature of charitable 122.20 donations that are not designated for providing patient services 122.21 to a specific individual or group; 122.22 (12) payments received for providing patient services 122.23 incurred through a formal program of health care research 122.24 conducted in conformity with federal regulations governing 122.25 research on human subjects. Payments received from patients or 122.26 from other persons paying on behalf of the patients are subject 122.27 to tax; 122.28 (13) payments received from any governmental agency for 122.29 services benefiting the public, not including payments made by 122.30 the government in its capacity as an employer or insurer; 122.31(14) payments received for services provided by community122.32residential mental health facilities licensed under Minnesota122.33Rules, parts 9520.0500 to 9520.0690, community support programs122.34and family community support programs approved under Minnesota122.35Rules, parts 9535.1700 to 9535.1760, and community mental health122.36centers as defined in section 245.62, subdivision 2;123.1(15)(14) government payments received by a regional 123.2 treatment center; 123.3(16) payments received for hospice care services;123.4(17)(15) payments received by a health care provider for 123.5 hearing aids and related equipment or prescription eyewear 123.6 delivered outside of Minnesota; 123.7(18)(16) payments received by an educational institution 123.8 from student tuition, student activity fees, health care service 123.9 fees, government appropriations, donations, or grants. Fee for 123.10 service payments and payments for extended coverage are taxable; 123.11 and 123.12(19) payments received for services provided by: assisted123.13living programs and congregate housing programs; and123.14(20)(17) payments received under the federal Employees 123.15 Health Benefits Act, United States Code, title 5, section 123.16 8909(f), as amended by the Omnibus Reconciliation Act of 1990. 123.17 (b) Payments received by wholesale drug distributors for 123.18 legend drugs sold directly to veterinarians or veterinary bulk 123.19 purchasing organizations are excluded from the gross revenues 123.20 subject to the wholesale drug distributor tax under sections 123.21 295.50 to 295.59. 123.22[EFFECTIVE DATE.] This section is effective for gross 123.23 revenues received after December 31, 2002. 123.24 Sec. 4. Minnesota Statutes 2002, section 297F.01, 123.25 subdivision 21a, is amended to read: 123.26 Subd. 21a. [UNLICENSED SELLER.] "Unlicensed seller" means 123.27 anyone who is not licensed under section 297F.03or 461.12to 123.28 sell the particular product to the purchaser or possessor of the 123.29 product. 123.30[EFFECTIVE DATE.] This section is effective July 1, 2003. 123.31 Sec. 5. Minnesota Statutes 2002, section 297F.01, 123.32 subdivision 23, is amended to read: 123.33 Subd. 23. [WHOLESALE SALES PRICE.] "Wholesale sales price" 123.34 means theestablishedprice stated on the price list in effect 123.35 at the time of sale for which a manufacturer or person sells a 123.36 tobacco product to a distributor, exclusive of any discount, 124.1 promotional offer, or other reduction. For purposes of this 124.2 subdivision, "price list" means the manufacturer's price at 124.3 which tobacco products are made available for sale to all 124.4 distributors on an ongoing basis. 124.5[EFFECTIVE DATE.] This section is effective July 1, 2003. 124.6 Sec. 6. Minnesota Statutes 2002, section 297F.06, 124.7 subdivision 4, is amended to read: 124.8 Subd. 4. [TOBACCO PRODUCTS USE TAX.] The tobacco products 124.9 use tax does not apply to the possession, use, or storage of 124.10 tobacco productsin quantities of:that have an aggregate cost 124.11 in any calendar month to the consumer of $100 or less. 124.12(1) not more than 50 cigars;124.13(2) not more than ten ounces snuff or snuff powder;124.14(3) not more than one pound smoking or chewing tobacco or124.15any other tobacco product in the possession of any one consumer.124.16[EFFECTIVE DATE.] This section is effective July 1, 2003. 124.17 Sec. 7. Minnesota Statutes 2002, section 297F.20, 124.18 subdivision 1, is amended to read: 124.19 Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 124.20 A person or consumer required to file a return, report, or other 124.21 document with the commissioner who fails to do so is guilty of a 124.22 misdemeanor. 124.23 (b) A person or consumer required to pay or to collect and 124.24 remit a tax under this chapter, who fails to do so when 124.25 required, is guilty of a misdemeanor. 124.26[EFFECTIVE DATE.] This section is effective for acts 124.27 committed on or after July 1, 2003. 124.28 Sec. 8. Minnesota Statutes 2002, section 297F.20, 124.29 subdivision 2, is amended to read: 124.30 Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY.] 124.31 (a) A person or consumer required to file a return, report, or 124.32 other document with the commissioner, who knowingly, rather than 124.33 accidentally, inadvertently, or negligently, fails to file it 124.34 when required, is guilty of a gross misdemeanor. 124.35 (b) A person or consumer required to pay or to collect and 124.36 remit a tax under this chapter, who knowingly, rather than 125.1 accidentally, inadvertently, or negligently, fails to file it 125.2 when required, is guilty of a gross misdemeanor. 125.3[EFFECTIVE DATE.] This section is effective for acts 125.4 committed on or after July 1, 2003. 125.5 Sec. 9. Minnesota Statutes 2002, section 297F.20, 125.6 subdivision 3, is amended to read: 125.7 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 125.8 person or consumer who files with the commissioner a return, 125.9 report, or other document, or who maintains or provides invoices 125.10 subject to review by the commissioner under this chapter, known 125.11 by the person or consumer to be fraudulent or false concerning a 125.12 material matter, is guilty of a felony. 125.13 (b) A person or consumer who knowingly aids or assists in, 125.14 or advises in the preparation or presentation of a return, 125.15 report, invoice, or other document that is fraudulent or false 125.16 concerning a material matter, whether or not the falsity or 125.17 fraud is committed with the knowledge or consent of the 125.18 person or consumer authorized or required to present the return, 125.19 report, invoice, or other document, is guilty of a felony. 125.20[EFFECTIVE DATE.] This section is effective for acts 125.21 committed on or after July 1, 2003. 125.22 Sec. 10. Minnesota Statutes 2002, section 297F.20, 125.23 subdivision 6, is amended to read: 125.24 Subd. 6. [UNSTAMPED CIGARETTES; UNTAXED TOBACCO PRODUCTS.] 125.25 (a) A person, other than a licensed distributor or a consumer, 125.26 who possesses, receives, or transportsmore than 200 butfewer 125.27 than 5,000 unstamped cigarettes, or up to$100$350 worth of 125.28 untaxed tobacco products is guilty of a misdemeanor. 125.29 (b) A person, other than a licensed distributor or a 125.30 consumer, who possesses, receives, or transports 5,000 or more, 125.31 but fewer than 20,001 unstamped cigarettes, orup to $500more 125.32 than $350 but less than $1,400 worth of untaxed tobacco products 125.33 is guilty of a gross misdemeanor. 125.34 (c) A person, other than a licensed distributor or a 125.35 consumer, who possesses, receives, or transports more than 125.36 20,000 unstamped cigarettes, or$500$1,400 or more worth of 126.1 untaxed tobacco products is guilty of a felony. 126.2 (d) For purposes of this subdivision, an individual in 126.3 possession of more than 4,999 unstamped cigarettes, or more than 126.4 $350 worth of untaxed tobacco products, is presumed not to be a 126.5 consumer. 126.6[EFFECTIVE DATE.] This section is effective for acts 126.7 committed on or after July 1, 2003. 126.8 Sec. 11. Minnesota Statutes 2002, section 297F.20, 126.9 subdivision 9, is amended to read: 126.10 Subd. 9. [PURCHASES FROM UNLICENSED SELLERS.] (a) No 126.11 retailer or subjobber shall purchase cigarettes or tobacco 126.12 products from any person who is not licensed under section 126.13 297F.03 as a licensed distributor or subjobber. 126.14 (b) A retailer,or subjobber, or consumerwho purchases 126.15 from an unlicensed sellermore than 200 butfewer than 5,000 126.16 cigarettes or up to$100$350 worth of tobacco products is 126.17 guilty of a misdemeanor. 126.18(b)(c) A retailer,or subjobber, or consumerwho 126.19 purchases from an unlicensed seller 5,000 or more, but fewer 126.20 than 20,001 cigarettes orup to $500more than $350 but less 126.21 than $1,400 worth ofuntaxedtobacco products is guilty of a 126.22 gross misdemeanor. 126.23(c)(d) A retailer,or subjobber, or consumerwho 126.24 purchases from an unlicensed seller more than 20,000 cigarettes 126.25 or$500$1,400 or more worth of tobacco products is guilty of a 126.26 felony. 126.27[EFFECTIVE DATE.] This section is effective for acts 126.28 committed on or after July 1, 2003. 126.29 Sec. 12. Minnesota Statutes 2002, section 297I.01, 126.30 subdivision 9, is amended to read: 126.31 Subd. 9. [GROSS PREMIUMS.] "Gross premiums" means total 126.32 premiums paid by policyholders and applicants of policies, 126.33 whether received in the form of money or other valuable 126.34 consideration, on property, persons, lives, interests and other 126.35 risks located, resident, or to be performed in this state, but 126.36 excluding consideration and premiums for reinsurance assumed 127.1 from other insurance companies. The term "gross premiums" 127.2 includes the total consideration paid to bail bond agents for 127.3 bail bonds. For title insurance companies, "gross premiums" 127.4 means the charge for title insurance made by a title insurance 127.5 company or its agents according to the company's rate filing 127.6 approved by the commissioner of commerce without a deduction for 127.7 commissions paid to or retained by the agent. Gross premiums of 127.8 a title insurance company does not include any other charge or 127.9 fee for abstracting, searching, or examining the title, or 127.10 escrow, closing, or other related services. The term "gross 127.11 premiums" includes any workers' compensation special 127.12 compensation fund premium surcharge pursuant to section 176.129. 127.13[EFFECTIVE DATE.] This section is effective the day 127.14 following final enactment. 127.15 Sec. 13. Minnesota Statutes 2002, section 297I.20, is 127.16 amended to read: 127.17 297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSETOFFSETS 127.18 AGAINST PREMIUM TAXES.] 127.19 Subdivision 1. [GUARANTY ASSOCIATION ASSESSMENT OFFSETS.] 127.20 (a) An insurance company may offset against its premium tax 127.21 liability to this state any amount paid for assessments made for 127.22 insolvencies which occur after July 31, 1994, under sections 127.23 60C.01 to 60C.22; and any amount paid for assessments made after 127.24 July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 127.25 61B.16, or under sections 61B.18 to 61B.32 as follows: 127.26 (1) Each such assessment shall give rise to an amount of 127.27 offset equal to 20 percent of the amount of the assessment for 127.28 each of the five calendar years following the year in which the 127.29 assessment was paid. 127.30 (2) The amount of offset initially determined for each 127.31 taxable year is the sum of the amounts determined under clause 127.32 (1) for that taxable year. 127.33 (b)(1) Each year the commissioner shall compare total 127.34 guaranty association assessments levied over the preceding five 127.35 calendar years to the sum of all premium tax and corporate 127.36 franchise tax revenues collected from insurance companies, 128.1 without reduction for any guaranty association assessment offset 128.2 in the preceding calendar year, referred to in this subdivision 128.3 as "preceding year insurance tax revenues." 128.4 (2) If total guaranty association assessments levied over 128.5 the preceding five years exceed the preceding year insurance tax 128.6 revenues, insurance companies must be allowed only a 128.7 proportionate part of the premium tax offset calculated under 128.8 paragraph (a) for the current calendar year. 128.9 (3) The proportionate part of the premium tax offset 128.10 allowed in the current calendar year is determined by 128.11 multiplying the amount calculated under paragraph (a) by a 128.12 fraction. The numerator of the fraction equals the preceding 128.13 year insurance tax revenues, and its denominator equals total 128.14 guaranty association assessments levied over the preceding 128.15 five-year period. 128.16 (4) The proportionate part of the premium tax offset that 128.17 is not allowed must be carried forward to subsequent tax years 128.18 and added to the amount of premium tax offset calculated under 128.19 paragraph (a) prior to application of the limitation imposed by 128.20 this paragraph. 128.21 (5) Any amount carried forward from prior years must be 128.22 allowed before allowance of the offset for the current year 128.23 calculated under paragraph (a). 128.24 (6) The premium tax offset limitation must be calculated 128.25 separately for (i) insurance companies subject to assessment 128.26 under sections 60C.01 to 60C.22, and (ii) insurance companies 128.27 subject to assessment under Minnesota Statutes 1992, sections 128.28 61B.01 to 61B.16, or 61B.18 to 61B.32. 128.29 (7) When the premium tax offset is limited by this 128.30 provision, the commissioner shall notify affected insurance 128.31 companies on a timely basis for purposes of completing premium 128.32 and corporate franchise tax returns. 128.33 (8) The guaranty associations created under sections 60C.01 128.34 to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 128.35 and 61B.18 to 61B.32, shall provide the commissioner with the 128.36 necessary information on guaranty association assessments. 129.1 (c)(1) If the offset determined by the application of 129.2 paragraphs (a) and (b) exceeds the insurance company's premium 129.3 tax liability under this section prior to allowance of the 129.4 credit for premium taxes, then the insurance company may carry 129.5 forward the excess, referred to in this subdivision as the 129.6 "carryforward credit" to subsequent taxable years. 129.7 (2) The carryforward credit is allowed as an offset against 129.8 premium tax liability for the first succeeding year to the 129.9 extent that the premium tax liability for that year exceeds the 129.10 amount of the allowable offset for the year determined under 129.11 paragraphs (a) and (b). 129.12 (3) The carryforward credit must be reduced, but not below 129.13 zero, by the amount of the carryforward credit allowed as an 129.14 offset against the premium tax under this paragraph. The 129.15 remainder, if any, of the carryforward credit must be carried 129.16 forward to succeeding taxable years until the entire 129.17 carryforward credit has been credited against the insurance 129.18 company's liability for premium tax under this chapter if 129.19 applicable for that taxable year. 129.20 (d) When an insurer has offset against taxes its payment of 129.21 an assessment of the Minnesota life and health guaranty 129.22 association, and the association pays the insurer a refund with 129.23 respect to the assessment under Minnesota Statutes 1992, section 129.24 61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 129.25 reduces the insurer's carryforward credit under paragraph (c). 129.26 If the refund exceeds the amount of the carryforward credit, the 129.27 excess amount must be repaid to the state by the insurers to the 129.28 extent of the offset in the manner the commissioner requires. 129.29 Subd. 2. [JOINT UNDERWRITING ASSOCIATION OFFSET.] An 129.30 assessment made pursuant to section 62I.06, subdivision 6, shall 129.31 be deductible by the member from past or future premium taxes 129.32 due the state. 129.33[EFFECTIVE DATE.] This section is effective the day 129.34 following final enactment. 129.35 Sec. 14. [REVISOR'S INSTRUCTION.] 129.36 In the next edition of Minnesota Rules, the revisor shall 130.1 delete any references to the sections repealed in section 15, 130.2 paragraph (a). 130.3 Sec. 15. [REPEALER.] 130.4 (a) Minnesota Statutes 2002, sections 294.01; 294.02; 130.5 294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; 130.6 and 294.12, are repealed effective the day following final 130.7 enactment. 130.8 (b) Minnesota Rules, parts 8125.1000; 8125.1300, subpart 1; 130.9 and 8125.1400, are repealed effective the day following final 130.10 enactment. 130.11 ARTICLE 8 130.12 DEPARTMENT COLLECTIONS AND COMPLIANCE INITIATIVES 130.13 Section 1. [270.278] [PENALTY FOR FILING CERTAIN DOCUMENTS 130.14 AGAINST DEPARTMENT OF REVENUE EMPLOYEES.] 130.15 Subdivision 1. [DEFINITIONS.] (a) "Recording office" means 130.16 a county recorder, registrar of titles, or secretary of state in 130.17 this state or another state. 130.18 (b) "Filing party" means the person or persons requesting 130.19 or causing another person to request that the recording office 130.20 accept documents or instruments for recording or filing. 130.21 Subd. 2. [INVALID DOCUMENTS NAMING THE COMMISSIONER OR 130.22 DEPARTMENT OF REVENUE EMPLOYEES.] Filing a document, including a 130.23 nonconsensual common law lien under section 514.99, that 130.24 purports to create a claim against the commissioner of revenue 130.25 or an employee of the department of revenue based on performance 130.26 or nonperformance of duties by the commissioner or employee is 130.27 invalid unless accompanied by a specific order from a court of 130.28 competent jurisdiction authorizing the filing of the document or 130.29 unless a specific statute authorizes the filing of the document. 130.30 Subd. 3. [CIVIL PENALTY.] If a filing party causes a 130.31 document described in subdivision 2 to be recorded in a 130.32 recording office, the commissioner may assess a penalty against 130.33 the filing party of $1,000 per document filed, payable to the 130.34 general fund. An order assessing a penalty under this section 130.35 is reviewable administratively under section 289A.65 and is 130.36 appealable to tax court under chapter 271. The penalty is 131.1 collected and paid in the same manner as income tax. The 131.2 penalty is in addition to any other remedy available to the 131.3 commissioner of revenue or to an employee of the department of 131.4 revenue against whom the document has been filed. 131.5[EFFECTIVE DATE.] This section is effective for documents 131.6 filed on or after July 1, 2003. 131.7 Sec. 2. Minnesota Statutes 2002, section 270.69, is 131.8 amended by adding a subdivision to read: 131.9 Subd. 16. [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien 131.10 imposed under this section attaches to the proceeds of property 131.11 with the same priority that the lien has with respect to the 131.12 property itself. "Proceeds of property" means proceeds from the 131.13 sale, lease, license, exchange, or other disposition of the 131.14 property, including insurance proceeds arising from the loss or 131.15 destruction of the property. 131.16[EFFECTIVE DATE.] This section is effective for all liens, 131.17 whether imposed prior to, on, or after the day following final 131.18 enactment. 131.19 Sec. 3. Minnesota Statutes 2002, section 270.701, 131.20 subdivision 2, is amended to read: 131.21 Subd. 2. [NOTICE OF SALE.] The commissioner shall as soon 131.22 as practicable after the seizure of the property give notice of 131.23 sale of the property to the owner, in the manner of service 131.24 prescribed in subdivision 1. In the case of personal property, 131.25 the notice shall be served at least 10 days prior to the sale. 131.26 In the case of real property, the notice shall be served at 131.27 least four weeks prior to the sale. The commissioner shall also 131.28 cause public notice of each sale to be made. In the case of 131.29 personal property, notice shall be posted at least 10 days prior 131.30 to the sale at the county courthouse for the county where the 131.31 seizure is made, and in not less than two other public 131.32 places. For purposes of this requirement, the Internet is a 131.33 public place for posting the information. In the case of real 131.34 property, six weeks' published notice shall be given prior to 131.35 the sale, in a newspaper published or generally circulated in 131.36 the county. The notice of sale provided in this subdivision 132.1 shall specify the property to be sold, and the time, place, 132.2 manner and conditions of the sale. Whenever levy is made 132.3 without regard to the 30-day period provided in section 270.70, 132.4 subdivision 2, public notice of sale of the property seized 132.5 shall not be made within the 30-day period unless section 132.6 270.702 (relating to sale of perishable goods) is applicable. 132.7[EFFECTIVE DATE.] This section is effective for notices of 132.8 sales posted on or after the day following final enactment. 132.9 Sec. 4. Minnesota Statutes 2002, section 270.701, is 132.10 amended by adding a subdivision to read: 132.11 Subd. 7. [SALE OF SEIZED SECURITIES.] (a) At the time of 132.12 levy on securities, the commissioner shall provide notice to the 132.13 taxpayer that the securities may be sold after ten days from the 132.14 date of seizure. 132.15 (b) If the commissioner levies upon nonexempt publicly 132.16 traded securities and the value of the securities is less than 132.17 or equal to the total obligation for which the levy is done, 132.18 after ten days the person who possesses or controls the 132.19 securities shall liquidate the securities in a commercially 132.20 reasonable manner. After liquidation, the person shall transfer 132.21 the proceeds to the commissioner, less any applicable 132.22 commissions or fees, or both, which are charged in the normal 132.23 course of business. 132.24 (c) If the commissioner levies upon nonexempt publicly 132.25 traded securities and the value of the securities exceeds the 132.26 total amount of the levy, the owner of the securities may, 132.27 within seven days after receipt of the department's notice of 132.28 levy given pursuant to subdivision 1, instruct the person who 132.29 possesses or controls the securities which securities are to be 132.30 sold to satisfy the obligation. If the owner does not provide 132.31 instructions for liquidation, the person who possesses or 132.32 controls the securities shall liquidate the securities in an 132.33 amount sufficient to pay the obligation, plus any applicable 132.34 commissions or fees, or both, which are charged in the normal 132.35 course of business, beginning with the nonexempt securities 132.36 purchased most recently. After liquidation, the person who 133.1 possesses or controls the securities shall transfer to the 133.2 commissioner the amount of money needed to satisfy the levy. 133.3[EFFECTIVE DATE.] This section is effective for sales of 133.4 securities seized on or after the day following final enactment. 133.5 Sec. 5. Minnesota Statutes 2002, section 270.72, 133.6 subdivision 2, is amended to read: 133.7 Subd. 2. [DEFINITIONS.] For purposes of this section, the 133.8 following terms have the meanings given. 133.9 (a) "Taxes"aremean all taxes payable to the commissioner 133.10 including penalties and interest due on the taxes. 133.11 (b) "Delinquent taxes" do not include a tax liability if 133.12 (i) an administrative or court action which contests the amount 133.13 or validity of the liability has been filed or served, (ii) the 133.14 appeal period to contest the tax liability has not expired, or 133.15 (iii) the applicant has entered into a payment agreement and is 133.16 current with the payments. 133.17 (c) "Applicant" means an individual if the license is 133.18 issued to or in the name of an individual or the corporation or 133.19 partnership if the license is issued to or in the name of a 133.20 corporation or partnership. "Applicant" also means an officer 133.21 of a corporation, a member of a partnership, or an individual 133.22 who is liable for delinquent taxes, either for the entity for 133.23 which the license is at issue or for another entity for which 133.24 the liability was incurred, or personally as a licensee. In the 133.25 case of a license transfer, "applicant" also means both the 133.26 transferor and the transferee of the license. "Applicant" also 133.27 means any holder of a license. 133.28 (d) "License"includesmeans any permit, registration, 133.29 certification, or other form of approval authorized by statute 133.30 or rule to be issued by the state or a political subdivision of 133.31 the state as a condition of doing business or conducting a 133.32 trade, profession, or occupation in Minnesota, specifically 133.33 including, but not limited to, a contract for space rental at 133.34 the Minnesota state fair and authorization to operate 133.35 concessions or rides at county and local fairs, festivals, or 133.36 events. 134.1 (e) "Licensing authority" includes the Minnesota state fair 134.2 board and county and local boards or governing bodies. 134.3[EFFECTIVE DATE.] This section is effective the day 134.4 following final enactment. 134.5 Sec. 6. Minnesota Statutes 2002, section 270A.03, 134.6 subdivision 2, is amended to read: 134.7 Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any 134.8 state agency, as defined by section 14.02, subdivision 2, the 134.9 regents of the University of Minnesota, any district court of 134.10 the state, any county, any statutory or home rule charter city 134.11 presenting a claim for a municipal hospital or a public library 134.12 or a municipal ambulance service, a hospital district, a private 134.13 nonprofit hospital that leases its building from the county in 134.14 which it is located, any public agency responsible for child 134.15 support enforcement, any public agency responsible for the 134.16 collection of court-ordered restitution, and any public agency 134.17 established by general or special law that is responsible for 134.18 the administration of a low-income housing program, and the 134.19 Minnesota collection enterprise as defined in section 16D.02, 134.20 subdivision 8, for the purpose of collecting the costs imposed 134.21 under section 16D.11. 134.22[EFFECTIVE DATE.] This section is effective the day 134.23 following final enactment. 134.24 Sec. 7. Minnesota Statutes 2002, section 289A.31, 134.25 subdivision 3, is amended to read: 134.26 Subd. 3. [TRANSFEREES AND FIDUCIARIES.] The amounts of the 134.27 following liabilities are, except as otherwise provided in 134.28 section 289A.38, subdivision 13, assessed, collected, and paid 134.29 in the same manner and subject to the same provisions and 134.30 limitations as a deficiency in a tax imposed by chapter 290, 134.31 including any provisions of law for the collection of taxes: 134.32 (1) the liability, at law or in equity, of a transferee of 134.33 property of a taxpayer for tax or overpayment of a refund, 134.34 including interest, additional amounts, and additions to the tax 134.35 or overpayment provided by law, imposed upon the taxpayer by 134.36 chapter 290 or provided for in chapter 290A; and 135.1 (2) the liability of a fiduciary under subdivision 4 for 135.2 the payment of tax from the estate of the taxpayer. The 135.3 liability may reflect the amount of tax shown on the return or 135.4 any deficiency in tax. 135.5[EFFECTIVE DATE.] This section is effective for refunds 135.6 paid on or after the day following final enactment. 135.7 Sec. 8. Minnesota Statutes 2002, section 289A.31, 135.8 subdivision 4, is amended to read: 135.9 Subd. 4. [TAX AS A PERSONAL DEBT OF A FIDUCIARY.]TheA 135.10 tax imposed by chapter 290 and an overpayment of a refund 135.11 provided for in chapter 290A, and interest and penalties, is a 135.12 personal debt of the taxpayer from the time the liability 135.13 arises, regardless of when the time for discharging the 135.14 liability by payment occurs. The debt is, in the case of the 135.15 personal representative of the estate of a decedent and in the 135.16 case of any fiduciary, that of the individual in the 135.17 individual's official or fiduciary capacity only, unless the 135.18 individual has voluntarily distributed the assets held in that 135.19 capacity without reserving sufficient assets to pay the tax, 135.20 interest, and penalties, in which event the individual is 135.21 personally liable for the deficiency. 135.22[EFFECTIVE DATE.] This section is effective for taxes 135.23 imposed and property tax refunds claimed on or after the day 135.24 following final enactment. 135.25 Sec. 9. Minnesota Statutes 2002, section 289A.36, 135.26 subdivision 7, is amended to read: 135.27 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF 135.28 SUBPOENA.] (a) Disobedience of subpoenas issued under this 135.29 section shall be punished by the district court of the district 135.30 in which the party served with the subpoena is located, in the 135.31 same manner as contempt of the district court. 135.32 (b) Disobedience of a subpoena issued under subdivision 9 135.33 shall be punished by the district court for Ramsey county in the 135.34 same manner as contempt of the district court. In addition to 135.35 contempt remedies, the court may issue any order the court deems 135.36 reasonably necessary to enforce compliance with the subpoena. 136.1[EFFECTIVE DATE.] This section is effective the day 136.2 following final enactment. 136.3 Sec. 10. Minnesota Statutes 2002, section 289A.36, is 136.4 amended by adding a subdivision to read: 136.5 Subd. 9. [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION 136.6 OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to 136.7 determine whether a business located outside the state of 136.8 Minnesota is required to file a return under this chapter, the 136.9 commissioner may examine the relevant records and files of the 136.10 business. 136.11 (b) To the full extent permitted by the Minnesota and 136.12 United States constitutions, the commissioner may compel 136.13 production of those relevant records and files by subpoena. The 136.14 subpoena may be served on the secretary of state along with the 136.15 address to which service of the subpoena is to be sent and a fee 136.16 of $50. The secretary of state shall forward a copy of the 136.17 subpoena to the business using the procedures for service of 136.18 process in section 5.25, subdivision 6. 136.19 (c) The commissioner shall pay the reasonable cost of 136.20 producing records subject to subpoena under this subdivision if: 136.21 (1) the subpoenaed party cannot produce the records without 136.22 undue burden; and 136.23 (2) the examination made pursuant to paragraph (a) shows 136.24 that the subpoenaed party is not required to file a return under 136.25 this chapter. 136.26[EFFECTIVE DATE.] This section is effective the day 136.27 following final enactment. 136.28 Sec. 11. Minnesota Statutes 2002, section 289A.36, is 136.29 amended by adding a subdivision to read: 136.30 Subd. 10. [PENALTY.] In addition to sanctions imposed 136.31 under subdivision 7, a penalty of $250 per day is imposed on any 136.32 business that is in violation of a court order to comply with a 136.33 subpoena that is seeking information necessary for the 136.34 commissioner to be able to determine whether the business is 136.35 required to file a return or pay a tax. The maximum penalty is 136.36 $25,000. Upon the request of the commissioner, the court shall 137.1 determine the amount of the penalty and enter it as a judgment 137.2 in favor of the commissioner. The penalty is not payable until 137.3 the judgment is entered. 137.4[EFFECTIVE DATE.] This section is effective for violations 137.5 of court orders to enforce subpoenas issued on or after the day 137.6 following final enactment. 137.7 Sec. 12. Minnesota Statutes 2002, section 297A.85, is 137.8 amended to read: 137.9 297A.85 [CANCELLATION OF PERMITS.] 137.10 The commissioner may cancel a permit if one of the 137.11 following conditions occurs: 137.12 (1) the permit holder has not filed a sales or use tax 137.13 return for at least one year; 137.14 (2) the permit holder has not reported any sales or use tax 137.15 liability on the permit holder's returns for at least two years; 137.16or137.17 (3) the permit holder requests cancellation of the permit; 137.18 or 137.19 (4) the permit is subject to cancellation pursuant to 137.20 section 297A.86, subdivision 2, paragraph (a). 137.21[EFFECTIVE DATE.] This section is effective for 137.22 cancellations of permits done on or after the day following 137.23 final enactment. 137.24 Sec. 13. [REPEALER.] 137.25 Minnesota Statutes 2002, section 270.691, subdivision 8, is 137.26 repealed effective the day following final enactment. 137.27 ARTICLE 9 137.28 CENTRAL LAKES REGION SANITARY DISTRICT 137.29 Section 1. [DEFINITIONS.] 137.30 Subdivision 1. [APPLICATION.] The terms defined in this 137.31 section shall have the meaning given them unless otherwise 137.32 provided or indicated by the context. 137.33 Subd. 2. [ACQUISITION AND BETTERMENT.] "Acquisition" and 137.34 "betterment" shall have the meanings given them in Minnesota 137.35 Statutes, section 475.51. 137.36 Subd. 3. [AGENCY.] "Agency" means the Minnesota pollution 138.1 control agency created and established by Minnesota Statutes, 138.2 chapter 116. 138.3 Subd. 4. [AGRICULTURAL PROPERTY.] "Agricultural property" 138.4 means land as is classified agricultural land within the meaning 138.5 of Minnesota Statutes, section 273.13, subdivision 23. 138.6 Subd. 5. [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND 138.7 DEBT SERVICE.] "Current costs of acquisition, betterment, and 138.8 debt service" means interest and principal estimated to be due 138.9 during the budget year on bonds issued to finance the 138.10 acquisition and betterment and all other costs of acquisition 138.11 and betterment estimated to be paid during the budget year from 138.12 funds other than bond proceeds and federal or state grants. 138.13 Subd. 6. [DISTRICT DISPOSAL SYSTEM.] "District disposal 138.14 system" means any and all of the interceptors or treatment works 138.15 owned, constructed, or operated by the board unless designated 138.16 by the board as local sanitary sewer facilities. 138.17 Subd. 7. [CENTRAL LAKES REGION SANITARY DISTRICT AND 138.18 DISTRICT.] "Central Lakes Region Sanitary District" and 138.19 "district" mean the area over which the sanitary sewer board has 138.20 jurisdiction, including those parts of the Douglas county 138.21 townships of Carlos, Brandon, La Grand, Leaf Valley, Miltona, 138.22 and Moe, as more particularly described by metes and bounds in 138.23 the comprehensive plan adopted under section 4. 138.24 Subd. 8. [INTERCEPTOR.] "Interceptor" means any sewer and 138.25 necessary appurtenances to it, including but not limited to, 138.26 mains, pumping stations, and sewage flow regulating and 138.27 measuring stations, that is designed for or used to conduct 138.28 sewage originating in more than one local government unit, or 138.29 that is designed or used to conduct all or substantially all the 138.30 sewage originating in a single local government unit from a 138.31 point of collection in that unit to an interceptor or treatment 138.32 works outside that unit, or that is determined by the board to 138.33 be a major collector of sewage used or designed to serve a 138.34 substantial area in the district. 138.35 Subd. 9. [LOCAL GOVERNMENT UNIT OR GOVERNMENT 138.36 UNIT.] "Local government unit" or "government unit" means any 139.1 municipal or public corporation or governmental or political 139.2 subdivision or agency located in whole or in part in the 139.3 district, authorized by law to provide for the collection and 139.4 disposal of sewage. 139.5 Subd. 10. [LOCAL SANITARY SEWER FACILITIES.] "Local 139.6 sanitary sewer facilities" means all or any part of any disposal 139.7 system in the district other than the district disposal system. 139.8 Subd. 11. [MUNICIPALITY.] "Municipality" means any city or 139.9 town located in whole or in part in the district. 139.10 Subd. 12. [PERSON.] "Person" means any individual, 139.11 partnership, corporation, limited liability company, 139.12 cooperative, or other organization or entity, public or private. 139.13 Subd. 13. [POLLUTION AND SEWER SYSTEM.] "Pollution" and 139.14 "sewer system" have the meanings given them in Minnesota 139.15 Statutes, section 115.01. 139.16 Subd. 14. [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer 139.17 board" or "board" means the sanitary sewer board established for 139.18 the Central Lakes Region Sanitary District as provided in 139.19 section 2. 139.20 Subd. 15. [SEWAGE.] "Sewage" means all liquid or 139.21 water-carried waste products from whatever sources derived, 139.22 together with the groundwater infiltration and surface water 139.23 that may be present. 139.24 Subd. 16. [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND 139.25 COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of 139.26 acquisition and betterment" and "costs of acquisition and 139.27 betterment" mean all acquisition and betterment expenses that 139.28 are permitted to be financed out of bond proceeds issued in 139.29 accordance with section 12, subdivision 4, whether or not the 139.30 expenses are in fact financed out of the bond proceeds. 139.31 Subd. 17. [TREATMENT WORKS AND DISPOSAL 139.32 SYSTEM.] "Treatment works" and "disposal system" have the 139.33 meanings given them in Minnesota Statutes, section 115.01. 139.34 Sec. 2. [SANITARY SEWER BOARD.] 139.35 Subdivision 1. [ESTABLISHMENT.] A sanitary sewer board 139.36 with jurisdiction in the Central Lakes Region Sanitary District 140.1 is established as a public corporation and political subdivision 140.2 of the state with perpetual succession and all the rights, 140.3 powers, privileges, immunities, and duties that may be validly 140.4 granted to or imposed upon a municipal corporation, as provided 140.5 in this article. 140.6 Subd. 2. [MEMBERS AND SELECTION.] The number of board 140.7 members and method by which they are selected is as follows: 140.8 The elected chief executive officer of any municipality and the 140.9 town board chair of each township located in whole or part 140.10 within the district must each separately select one member. 140.11 Upon the board's ordering of a project to construct a sanitary 140.12 sewer, the elected chief executive officer or town board chair 140.13 respectively of any municipality or township must appoint one 140.14 additional member for each full 800 special assessments included 140.15 in the ordered project to be levied against property located in 140.16 the municipality or township. The term of each member is 140.17 subject to the approval of the voting members of the city 140.18 council or town board. 140.19 Subd. 3. [TIME LIMIT; ALTERNATIVE APPOINTMENT.] The 140.20 initial board members must be selected as provided in 140.21 subdivision 2 within 60 days after this article is effective. A 140.22 successor must be selected at any time within 60 days before the 140.23 expiration of the predecessor's term in the same manner as the 140.24 predecessor was selected. Any vacancy on the board must be 140.25 filled within 60 days after it occurs. If a selection is not 140.26 made as provided within the time prescribed, the chief judge of 140.27 the seventh judicial district of the Minnesota district court, 140.28 on application by any interested person, shall appoint an 140.29 eligible person to the board. 140.30 Subd. 4. [VACANCIES.] If the office of any board member 140.31 becomes vacant, the vacancy shall be filled for the unexpired 140.32 term in the manner as provided for selection of the member who 140.33 vacated the office. The office shall be deemed vacant under the 140.34 conditions specified in Minnesota Statutes, section 351.02. 140.35 Subd. 5. [TERMS OF OFFICE.] The terms of all board members 140.36 shall be for one, two, three, or four calendar years to be 141.1 determined in accordance with subdivision 2 by the governing 141.2 body selecting such member. Terms shall expire on January 1 of 141.3 a calendar year, except that each member shall serve until a 141.4 successor has been duly selected and qualified. 141.5 Subd. 6. [REMOVAL.] A board member may be removed by the 141.6 unanimous vote of the appointing governing body with or without 141.7 cause. 141.8 Subd. 7. [QUALIFICATIONS.] Each board member may, but need 141.9 not be a resident of the district and may, but need not be an 141.10 elected public official. 141.11 Subd. 8. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 141.12 certificate of selection to a seat of every board member, 141.13 stating the seat's term, must be made by the respective 141.14 municipal or town clerk. The certificate, with the approval 141.15 attached by other authority, if required, must be filled with 141.16 the secretary of state. A copy must be furnished to the board 141.17 member and the secretary of the board. Each member must qualify 141.18 by taking and subscribing to the oath of office prescribed by 141.19 the Minnesota Constitution, article V, section 6. The oath, 141.20 duly certified by the official administering the same, must be 141.21 filed with the secretary of state and the secretary of the board. 141.22 Subd. 9. [COMPENSATION OF BOARD MEMBERS.] Each board 141.23 member may be paid a per diem compensation to attend meetings 141.24 and for other services in an amount as may be specifically 141.25 authorized by the board from time to time. Per diem 141.26 compensation may not exceed $4,000 for any member in any one 141.27 year. All members of the board must be reimbursed for all 141.28 reasonable expenses incurred in the performance of their duties 141.29 as determined by the board. 141.30 Sec. 3. [GENERAL PROVISION FOR ORGANIZATION AND OPERATION 141.31 OF BOARD.] 141.32 Subdivision 1. [OFFICERS MEETINGS; SEAL.] A majority of 141.33 the members is a quorum at all meetings of the board, but a 141.34 lesser number may meet and adjourn from time to time and compel 141.35 the attendance of absent members. The board must meet regularly 141.36 at the time and place as the board by resolution designates. 142.1 Special meetings may be held at any time upon call of the chair 142.2 or any two members, upon written notice sent by mail to each 142.3 member at least three days before the meeting, or upon the 142.4 notice as the board by resolution may provide, or without notice 142.5 if each member is present or files with the secretary a written 142.6 consent to the meeting either before or after the meeting. 142.7 Except as otherwise provided in this article, any action within 142.8 the authority of the board may be taken by the affirmative vote 142.9 of a majority of the board at a regular or adjourned regular 142.10 meeting or at a duly held special meeting, but in any case only 142.11 if a quorum is present. All meetings of the board must be open 142.12 to the public as provided in Minnesota Statutes, chapter 13D. 142.13 Subd. 2. [CHAIR.] The board must elect a chair from its 142.14 membership. The term of the chair expires on January 1 of each 142.15 year. The chair presides at all meetings of the board, if 142.16 present, and must perform all other duties and functions usually 142.17 incumbent upon the officer, and all administrative functions 142.18 assigned to the chair by the board. The board must elect a 142.19 vice-chair from its membership to act for the chair during a 142.20 temporary absence or disability. 142.21 Subd. 3. [SECRETARY AND TREASURER.] The board must select 142.22 one or more persons who may, but need not be a member of the 142.23 board, to act as its secretary and treasurer. The secretary and 142.24 treasurer hold office at the pleasure of the board, subject to 142.25 the terms of any contract of employment that the board may enter 142.26 into with the secretary or treasurer. The secretary must record 142.27 the minutes of all meetings of the board, and is custodian of 142.28 all books and records of the board except those the board 142.29 entrusts to the custody of a designated employee. The board may 142.30 appoint a deputy to perform any and all functions of either the 142.31 secretary or the treasurer. A secretary or treasurer or a 142.32 deputy of either who is not a member of the board shall not have 142.33 any right to vote. 142.34 Subd. 4. [GENERAL MANAGER.] The board may appoint a 142.35 general manager who shall be selected solely upon the basis of 142.36 training, experience, and other qualifications. The general 143.1 manager serves at the pleasure of the board and at a 143.2 compensation to be determined by the board. The general manager 143.3 need not be a resident of the district and may also be selected 143.4 by the board to serve as either secretary or treasurer, or both, 143.5 of the board. The general manager must attend all meetings of 143.6 the board but must not vote. The general manager must: 143.7 (1) see that all resolutions, rules, regulations, or orders 143.8 of the board are enforced; 143.9 (2) appoint and remove, upon the basis of merit and 143.10 fitness, all subordinate officers and regular employees of the 143.11 board except the secretary and the treasurer and their deputies; 143.12 (3) present to the board plans, studies, and other reports 143.13 prepared for board purposes and recommend to the board for 143.14 adoption such measures as the general manager considers 143.15 necessary to enforce or carry out the powers and duties of the 143.16 board, or for the efficient administration of the affairs of the 143.17 board; 143.18 (4) keep the board fully advised as to its financial 143.19 condition, and prepare and submit to the board, and to the 143.20 governing bodies of the local government units, the board's 143.21 annual budget and other financial information the board 143.22 requests; 143.23 (5) recommend to the board for adoption rules recommended 143.24 as necessary for the efficient operation of a district disposal 143.25 system and all local sanitary sewer facilities over which the 143.26 board may assume responsibility as provided in section 17; and 143.27 (6) perform other duties as may be prescribed by the board. 143.28 Subd. 5. [PUBLIC EMPLOYEES.] The general manager and all 143.29 persons employed by the general manager are public employees, 143.30 and have all the rights and duties conferred on public employees 143.31 under the Minnesota Public Employment Labor Relations Act. The 143.32 compensation and conditions of employment of the employees is 143.33 not governed by any rule applicable to state employees in the 143.34 classified service or by Minnesota Statutes, chapter 15A, except 143.35 as specifically authorized by law. 143.36 Subd. 6. [PROCEDURES.] The board must adopt resolutions or 144.1 bylaws establishing procedures for board action, personnel 144.2 administration, record keeping, investment policy, approving 144.3 claims, authorizing or making disbursements, safekeeping funds, 144.4 and audit of all financial operations of the board. 144.5 Subd. 7. [SURETY BONDS AND INSURANCE.] The board may 144.6 procure surety bonds for its officers and employees in such 144.7 amounts as are considered necessary to assure proper performance 144.8 of their duties and proper accounting for funds in their custody. 144.9 It may buy insurance against risks to property and liability of 144.10 the board and its officers, agents, and employees for personal 144.11 injuries or death and property damage and destruction in the 144.12 amounts as it considers necessary or desirable, with the force 144.13 and effect stated in Minnesota Statutes, chapter 466. 144.14 Sec. 4. [COMPREHENSIVE PLAN.] 144.15 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 144.16 adopt a comprehensive plan for the collection, treatment, and 144.17 disposal of sewage in the district for designated periods that 144.18 the board considers proper and reasonable. The board must 144.19 prepare and adopt subsequent comprehensive plans for the 144.20 collection, treatment, and disposal of sewage in the district 144.21 for each succeeding designated period as the board considers 144.22 proper and reasonable. The plan must take into account the 144.23 preservation and best and most economic use of water and other 144.24 natural resources in the area; the preservation, use, and 144.25 potential for use of lands adjoining waters of the state to be 144.26 used for the disposal of sewage; and the impact such a disposal 144.27 system will have on present and future land use in the affected 144.28 area. The plans shall include the following: 144.29 (1) the exact legal description of the boundaries of the 144.30 district; 144.31 (2) the general location of needed interceptors and 144.32 treatment works; 144.33 (3) a description of the area that is to be served by the 144.34 various interceptors and treatment works; 144.35 (4) a long-range capital improvements program; and 144.36 (5) such other details as the board deems appropriate. 145.1 In developing the plans, the board shall consult with persons 145.2 designated by the governing bodies of any municipal or public 145.3 corporation or governmental or political subdivision or agency 145.4 within or without the district to represent such entities and 145.5 shall consider the data, resources, and input offered to the 145.6 board by such entities and any planning agency acting on behalf 145.7 of one or more such entities. Each plan, when adopted, must be 145.8 followed in the district and may be revised as often as the 145.9 board considers necessary. 145.10 Subd. 2. [REPORT TO DOUGLAS COUNTY.] Upon adoption of any 145.11 comprehensive plan that establishes or reestablishes the 145.12 boundaries of the district, the board must supply the 145.13 appropriate Douglas county offices with the boundaries of the 145.14 district. 145.15 Subd. 3. [COMPREHENSIVE PLANS; HEARING.] Before adopting 145.16 any later comprehensive plan, the board must hold a public 145.17 hearing on the proposed plan at the time and place in the 145.18 district it determines. The hearing may be continued from time 145.19 to time. Not less than 45 days before the hearing, the board 145.20 must publish notice of it in a newspaper or newspapers having 145.21 general circulation in the district stating the date, time, and 145.22 place of the hearing, and the place where the proposed plan may 145.23 be examined by any interested person. At the hearing, all 145.24 interested persons must be permitted to present their views on 145.25 the plan. 145.26 Subd. 4. [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH 145.27 BOARD'S RESPONSIBILITIES.] Before undertaking the construction 145.28 of new sewers or other disposal facilities or the substantial 145.29 alteration or improvement of any existing sewers or other 145.30 disposal facilities, each local government unit may, and must if 145.31 the construction or alteration of any sewage disposal facilities 145.32 is contemplated by the government unit, adopt a comprehensive 145.33 plan and program for the collection, treatment, and disposal of 145.34 sewage for which the local government unit is responsible, 145.35 coordinated with the board's comprehensive plan, and may revise 145.36 the plan as often as deemed necessary. Each local plan or 146.1 revision must be submitted to the board for review and is 146.2 subject to the approval of the board as to those features of the 146.3 plan affecting the board's responsibilities as determined by the 146.4 board. Any features disapproved by the board must be modified 146.5 in accordance with the board's recommendations. No construction 146.6 project involving those features may be undertaken by the local 146.7 government unit unless its governing body first finds the 146.8 project to be in accordance with the government unit's 146.9 comprehensive plan and program as approved by the board. Before 146.10 approval by the board of the comprehensive plan and program of 146.11 any local government unit in the district, no construction 146.12 project may be undertaken by the government unit unless approval 146.13 of the project is first gotten from the board as to those 146.14 features of the project affecting the board's responsibilities 146.15 as determined by the board. 146.16 Sec. 5. [SEWER SERVICE FUNCTION.] 146.17 Subdivision 1. [DUTY OF BOARD; ACQUISITION OF EXISTING 146.18 FACILITIES; NEW FACILITIES.] At any time after the board has 146.19 become organized, it must assume ownership of all existing 146.20 interceptors and treatment works that are needed to implement 146.21 the board's comprehensive plan for the collection, treatment, 146.22 and disposal of sewage in the district, in the manner and 146.23 subject to the conditions prescribed in subdivision 2, and must 146.24 design, acquire, construct, better, equip, operate, and maintain 146.25 all additional interceptors and treatment works that will be 146.26 needed for this purpose. The board must assume ownership of all 146.27 treatment works owned by a local government unit if any part of 146.28 those treatment works are so needed. 146.29 Subd. 2. [METHOD OF ACQUISITION; EXISTING DEBT.] The board 146.30 may require any local government unit to transfer to the board 146.31 all of its right, title, and interest in any interceptors or 146.32 treatment works and all necessary appurtenances to them owned by 146.33 the local government unit that will be needed for the purpose 146.34 stated in subdivision 1. Appropriate instruments of conveyance 146.35 for all the property must be executed and delivered to the board 146.36 by the proper officers of each local government unit concerned. 147.1 The board, upon assuming ownership of any of the interceptors or 147.2 treatment works, is obligated to pay to the local government 147.3 unit amounts sufficient to pay, when due, all remaining 147.4 principal of and interest on bonds issued by the local 147.5 government unit for the acquisition or betterment of the 147.6 interceptors or treatment works. The board must also assume the 147.7 same obligation with respect to any other existing disposal 147.8 system owned by a local government unit that the board 147.9 determines to have been replaced or rendered useless by the 147.10 district disposal system. The amounts to be paid under this 147.11 subdivision may be offset against any amount to be paid to the 147.12 board by the local government unit as provided in section 8. 147.13 The board is not obligated to pay the local government unit 147.14 anything in addition to the assumption of debt provided for in 147.15 this subdivision. 147.16 Subd. 3. [EXISTING JOINT POWERS BOARD.] Effective December 147.17 31, 2004, or an earlier date as determined by the board, the 147.18 corporate existence of the joint powers board created by 147.19 agreement among local government units under Minnesota Statutes, 147.20 section 471.59, to provide the financing, acquisition, 147.21 construction, improvement, extension, operation, and maintenance 147.22 of facilities for the collection, treatment, and disposal of 147.23 sewage is terminated. All persons regularly employed by the 147.24 joint powers board on that date become employees of the board, 147.25 and may at their option become members of the retirement system 147.26 applicable to persons employed directly by the board or may 147.27 continue as members of a public retirement association under any 147.28 other law, to which they belonged before that date, and retain 147.29 all pension rights that they may have under the other law and 147.30 all other rights to which they are entitled by contract or law. 147.31 The board must make the employer's contributions to pension 147.32 funds of its employees. The employees must perform duties as 147.33 may be prescribed by the board. On December 31, 2004, or the 147.34 earlier date, all funds of the joint powers board and all later 147.35 collections of taxes, special assessments, or service charges, 147.36 or any other sums due the joint powers board, or levied or 148.1 imposed by or for the joint powers board, must be transferred to 148.2 or made payable to the sanitary sewer board and the county 148.3 auditor must remit the sums to the board. The local government 148.4 units otherwise entitled to the cash, taxes, assessments, or 148.5 service charges must be credited with the amounts, and the 148.6 credits must be offset against any amounts to be paid by them to 148.7 the board as provided in section 8. On December 31, 2004, or 148.8 the earlier chosen date, the board shall succeed to and become 148.9 vested with all right, title, and interest in and to any 148.10 property, real or personal, owned or operated by the joint 148.11 powers board. Before that date, the proper officers of the 148.12 joint powers board must execute and deliver to the sanitary 148.13 sewer board all deeds, conveyances, bills of sale, and other 148.14 documents or instruments required to vest in the board good and 148.15 marketable title to all the real or personal property, but this 148.16 article operates as the transfer and conveyance to the board of 148.17 the real or personal property, if not transferred, as may be 148.18 required under the law or under the circumstances. On December 148.19 31, 2004, or the earlier chosen date, the board is obligated to 148.20 pay or assume all outstanding bonds or other debt and all 148.21 contracts or obligations incurred by the joint powers board, and 148.22 all bonds, obligations, or debts of the joint powers board 148.23 outstanding on the date this article is effective, are validated. 148.24 Subd. 4. [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The 148.25 board may terminate, upon 60 days' mailed notice to the 148.26 contracting parties, any existing contract between or among 148.27 local government units requiring payments by a local government 148.28 unit to any other local government unit for the use of a 148.29 disposal system, or as reimbursement of capital costs of a 148.30 disposal system, all or part of which are needed to implement 148.31 the board's comprehensive plan. All contracts between or among 148.32 local government units for use of a disposal system entered into 148.33 after the date on which this article becomes effective must be 148.34 submitted to the board for approval as to those features 148.35 affecting the board's responsibilities as determined by the 148.36 board and are not effective until the approval is given. 149.1 Sec. 6. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 149.2 Subdivision 1. [POWERS.] In addition to all other powers 149.3 conferred upon the board in this article, the board has the 149.4 powers specified in this section. 149.5 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 149.6 discharge the effluent from any treatment works operated by it 149.7 into any waters of the state, subject to approval of the agency 149.8 if required and in accordance with any effluent or water quality 149.9 standards lawfully adopted by the agency, any interstate agency, 149.10 or any federal agency having jurisdiction. 149.11 Subd. 3. [USE OF DISTRICT SYSTEM.] The board may require 149.12 any person or local government unit to provide for the discharge 149.13 of any sewage, directly or indirectly, into the district 149.14 disposal system, or to connect any disposal system or a part of 149.15 it with the district disposal system wherever reasonable 149.16 opportunity is provided; may regulate the manner in which the 149.17 connections are made; may require any person or local government 149.18 unit discharging sewage into the disposal system to provide 149.19 preliminary treatment for it; may prohibit the discharge into 149.20 the district disposal system of any substance it determines will 149.21 or may be harmful to the system or any persons operating it; may 149.22 prohibit any extraneous flow into the system; and may require 149.23 any local government unit to discontinue the acquisition, 149.24 betterment, or operation of any facility for the unit's disposal 149.25 system wherever and so far as adequate service is or will be 149.26 provided by the district disposal system. 149.27 Sec. 7. [BUDGET.] 149.28 Except as otherwise specifically provided in this article, 149.29 the board is subject to Minnesota Statutes, section 275.065, the 149.30 Truth in Taxation Act. The board shall prepare and adopt, on or 149.31 before September 15 of each year, a budget showing for the 149.32 following calendar year or other fiscal year determined by the 149.33 board, sometimes referred to in this article as the budget year, 149.34 estimated receipts of money from all sources, including but not 149.35 limited to, payments by each local government unit, federal or 149.36 state grants, taxes on property, and funds on hand at the 150.1 beginning of the year, and estimated expenditures for: 150.2 (1) costs of operation, administration, and maintenance of 150.3 the district disposal system; 150.4 (2) cost acquisition and betterment of the district 150.5 disposal system; and 150.6 (3) debt service, including principal and interest, on 150.7 general obligation bonds and certificates issued under section 150.8 12, obligations and debts assumed under section 5, subdivisions 150.9 2 and 3, and any money judgments entered by a court of competent 150.10 jurisdiction. Expenditures within these general categories, and 150.11 others that the board may from time to time determine, must be 150.12 itemized in the detail the board prescribes. The board and its 150.13 officers, agents, and employees must not spend money for any 150.14 purpose other than debt service without having set forth the 150.15 expense in the budget, nor may they spend in excess of the 150.16 amount in the budget, and an excess expenditure or one for an 150.17 unauthorized purpose is enforceable except as the obligation of 150.18 the person incurring it; but the board may amend the budget at 150.19 any time by transferring from one budgetary purpose to another 150.20 any sums, except money for debt service and bond proceeds, or by 150.21 increasing expenditures in any amount by which cash receipts 150.22 during the budget year actually exceed the total amounts 150.23 designated in the original budget. The creation of any 150.24 obligation pursuant to section 12 or the receipts of any federal 150.25 or state grant is a sufficient budget designation of the 150.26 proceeds for the purpose for which it is authorized, and of the 150.27 tax or other revenue pledged to pay the obligation and interest 150.28 on it, whether or not specifically included in any annual budget. 150.29 Sec. 8. [ALLOCATION OF COSTS.] 150.30 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 150.31 estimated cost of administration, operation, maintenance, and 150.32 debt service of the district disposal system to be paid by the 150.33 board in each fiscal year and the estimated costs of acquisition 150.34 and betterment of the system that are to be paid during the year 150.35 from funds other than state or federal grants and bond proceeds 150.36 and all other previously unallocated payments made by the board 151.1 under this article in the fiscal year are referred to as current 151.2 costs. 151.3 Subd. 2. [COLLECTION OF CURRENT COSTS.] Current costs 151.4 shall be collected as described in paragraphs (a) and (b). 151.5 (a) Current costs may be allocated to local government 151.6 units in the district on an equitable basis as the board may 151.7 from time to time determine by resolution to be fair and 151.8 reasonable and in the best interests of the district. In making 151.9 the allocation, the board may provide for the deferment of 151.10 payment of all or part of current costs, the reallocation of 151.11 deferred costs, and the reimbursement of reallocated deferred 151.12 costs on an equitable basis as the board may from time to time 151.13 determine by resolution to be fair and reasonable and in the 151.14 best interests of the district. The adoption or revision of a 151.15 method of allocation, deferment, reallocation, or reimbursement 151.16 used by the board shall be made by the affirmative vote of at 151.17 least two-thirds of the members of the board. 151.18 (b) Upon approval of at least two-thirds of the members of 151.19 the board, the board may provide for direct collection of 151.20 current costs by monthly or other periodic billing of sewer 151.21 users. 151.22 Sec. 9. [GOVERNMENT UNITS; PAYMENTS TO BOARD.] 151.23 Subdivision 1. [OBLIGATIONS OF GOVERNMENT UNITS TO THE 151.24 BOARD.] Each government unit must pay to the board all sums 151.25 charged to it as provided in section 8, at the times and in the 151.26 manner determined by the board. The governing body of each 151.27 government unit must take all action necessary to provide the 151.28 funds required for the payments and to make the payments when 151.29 due. 151.30 Subd. 2. [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges 151.31 payable to the board by local government units may be made 151.32 payable at the times during each year as the board determines, 151.33 after it has taken into account the dates on which taxes, 151.34 assessments, revenue collections, and other funds become 151.35 available to the government unit required to pay such charges. 151.36 Subd. 3. [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX 152.1 LEVIES.] To accomplish any duty imposed on it by the board, the 152.2 governing body of every government unit may, in addition to the 152.3 powers granted in this article and in any other law or charter, 152.4 exercise the powers granted any municipality by Minnesota 152.5 Statutes, chapters 117, 412, 429, and 475, and sections 115.46, 152.6 444.075, and 471.59, with respect to the area of the government 152.7 unit located in the district. In addition, the governing body 152.8 of every government unit located in whole or in part within the 152.9 district may levy taxes upon all taxable property in that part 152.10 of the government unit located in this district for all or a 152.11 part of the amount payable to the board. If the levy is for 152.12 only part of the amount payable to the board, the governing body 152.13 of the government unit may levy additional taxes on the entire 152.14 net tax capacity of all taxable property of the government unit 152.15 for all or a part of the balance remaining payable. The taxes 152.16 levied under this subdivision must be assessed and extended as a 152.17 tax upon the taxable property by the county auditor for the next 152.18 calendar year, free from any limit of rate or amount imposed by 152.19 law or charter. The tax must be collected and remitted in the 152.20 same manner as other general taxes of the government unit. 152.21 Subd. 4. [ALTERNATE LEVY.] In place of levying taxes on 152.22 all taxable property under subdivision 3, the governing body of 152.23 the government unit may elect to levy taxes upon the net tax 152.24 capacity of all taxable property, except agricultural property, 152.25 and upon only 25 percent of the net tax capacity of all 152.26 agricultural property, in that part of the government unit 152.27 located in the district for all or a part of the amount payable 152.28 to the board. If the levy is for only part of the amount 152.29 payable to the board, the governing body may levy additional 152.30 taxes on the entire net tax capacity of all the property, 152.31 including agricultural property, for all or a part of the 152.32 balance. The taxes must be assessed and extended as a tax upon 152.33 the taxable property by the county auditor for the next calendar 152.34 year, free from any limit of rate or amount imposed by law or 152.35 charter, and must be collected and remitted in the same manner 152.36 as other general taxes of the government unit. In computing the 153.1 tax capacity under this subdivision, the county auditor must 153.2 include only 25 percent of the net tax capacity of all taxable 153.3 agricultural property and 100 percent of the net tax capacity of 153.4 all other taxable property in that part of the government unit 153.5 located within the district and, in spreading the levy, the 153.6 auditor must apply the tax rate upon the same percentages of 153.7 agricultural and nonagricultural taxable property. If the 153.8 government unit elects to levy taxes under this subdivision and 153.9 any of the taxable agricultural property is reclassified so as 153.10 to no longer qualify as agricultural property, it is subject to 153.11 additional taxes. The additional taxes must be in an amount 153.12 which, together with any additional taxes previously levied and 153.13 the estimated collection of additional taxes subsequently levied 153.14 on any other reclassified property, is determined by the 153.15 governing body of the government unit to be at least sufficient 153.16 to reimburse each other government unit for any excess current 153.17 costs reallocated to it as a result of the board deferring any 153.18 current cost under section 8 on account of the difference 153.19 between the amount of the current costs initially allocated to 153.20 each government unit based on the total net tax capacity of all 153.21 taxable property in the district and the amount of the current 153.22 costs reallocated to each government unit based on 25 percent of 153.23 the net tax capacity of agricultural property and 100 percent of 153.24 the net tax capacity of all other taxable property in the 153.25 district. Any reimbursement must be made on terms which the 153.26 board determines to be just and reasonable. These additional 153.27 taxes may be levied in any greater amount as the governing body 153.28 of the government unit determines to be appropriate, but the 153.29 total amount of the additional taxes must not exceed the 153.30 difference between: 153.31 (1) the total amount of taxes that would have been levied 153.32 upon the reclassified property to help pay current costs charged 153.33 in each year to the government unit by the board if that part of 153.34 the costs, if any, initially allocated by the board solely on 153.35 the basis of 100 percent of the net tax capacity of all taxable 153.36 property in the district and then reallocated on the basis of 154.1 inclusion of only 25 percent of the net tax capacity of 154.2 agricultural property in the district was not reallocated and if 154.3 the amount of taxes levied by the government unit each year 154.4 under this subdivision to pay current costs had been based on 154.5 the initial allocation and had been imposed upon 100 percent of 154.6 the net tax capacity of all taxable property, including 154.7 agricultural property, in that part of the government unit 154.8 located in the district; and 154.9 (2) the amount of taxes levied each year under this 154.10 subdivision upon reclassified property, plus interest on the 154.11 cumulative amount of the difference accruing each year at the 154.12 approximate average annual rate borne by bonds issued by the 154.13 board and outstanding at the beginning of the year or, if no 154.14 bonds are then outstanding, at a rate of interest which may be 154.15 determined by the board, but not exceeding the maximum rate of 154.16 interest that may then be paid on bonds issued by the board. 154.17 The additional taxes are a lien upon the reclassified property 154.18 assessed in the same manner and for the same duration as all 154.19 other ad valorem taxes levied upon the property. The additional 154.20 taxes must be extended against the reclassified property on the 154.21 tax list for the current year and must be collected and remitted 154.22 in the same manner as other general taxes of the government 154.23 unit. No penalties or additional interest may be levied on the 154.24 additional taxes if timely paid. 154.25 Subd. 5. [DEBT LIMIT.] Any ad valorem taxes levied under 154.26 subdivision 3, by the governing body of a government unit to pay 154.27 any sums charged to it by the board pursuant to this article are 154.28 not subject to, or counted toward, any limit imposed by law on 154.29 the levy of taxes upon taxable property within any governmental 154.30 unit. 154.31 Subd. 6. [DEFICIENCY TAX LEVIES.] If the local government 154.32 unit fails to make a payment to the board when due, the board 154.33 may certify to the Douglas county auditor the amount required 154.34 for payment, with interest at not more than the maximum rate per 154.35 year authorized at that time on assessments under Minnesota 154.36 Statutes, section 429.061, subdivision 2. The auditor must levy 155.1 and extend the amount as a tax upon all taxable property in that 155.2 part of the government unit located in the district, for the 155.3 next calendar year, free from any limits imposed by law or 155.4 charter. The tax must be collected in the same manner as other 155.5 general taxes of the government unit, and the proceeds, when 155.6 collected, shall be paid by the county treasurer to the 155.7 treasurer of the board and credited to the government unit for 155.8 which the tax was levied. 155.9 Sec. 10. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 155.10 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 155.11 PROJECT.] Before the board orders any project involving the 155.12 acquisition or betterment of any interceptor or treatment works, 155.13 all or a part of the cost of which will be allocated to local 155.14 government units under section 8 as current costs, the board 155.15 must hold a public hearing on the proposed project following two 155.16 publications in a newspaper or newspapers having general 155.17 circulation in the district, stating the time and place of the 155.18 hearing, the general nature and location of the project, the 155.19 estimated total cost of acquisition and betterment, that portion 155.20 of costs estimated to be paid out of federal and state grants, 155.21 and that portion of costs estimated to be allocated to each 155.22 local government unit affected. The two publications must be a 155.23 week apart and the hearing must be at least three days after the 155.24 last publication. Not less than 45 days before the hearing, 155.25 notice must also be mailed to each clerk of all local government 155.26 units in the district, but failure to give mailed notice of any 155.27 defects in the notice does not invalidate the proceedings. The 155.28 project may include all or part of one or more interceptors or 155.29 treatment works. A hearing is not required with respect to a 155.30 project, no part of the costs of which are to be allocated to 155.31 local government units as the current cost of acquisition, 155.32 betterment, and debt service. 155.33 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 155.34 governing body of a local government unit in the district 155.35 proposes to assess against benefited property within units, all 155.36 or any part of the allocable costs of the project as provided in 156.1 subdivision 5, the governing body must, not less than ten days 156.2 before the hearing provided for in subdivision 1 mail a notice 156.3 of the hearing to the owner of each parcel within the area 156.4 proposed to be specially assessed and must also give one week's 156.5 published notice of the hearing. The notice of hearing must 156.6 contain the same information provided in the notice published by 156.7 the board under subdivision 1, and in addition, a description of 156.8 the area proposed to be assessed by the local government unit. 156.9 To give mailed notice, owners must be those shown to be on the 156.10 records of the county auditor or, in a county where tax 156.11 statements are mailed by the county treasurer, on the records of 156.12 the county treasurer; but other appropriate records may be used 156.13 for this purpose. However, for properties that are tax exempt 156.14 or subject to taxation on a gross earnings basis and are not 156.15 listed on the records of the county auditor or the county 156.16 treasurer, the owners may be ascertained by any practicable 156.17 means and mailed notice must be given to them. Failure to give 156.18 mailed notice or any defects in the notice does not invalidate 156.19 the proceedings of the board or the local governing body. 156.20 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 156.21 adoption of the resolution calling for the hearing, the board 156.22 shall get from the district engineer, or other competent person 156.23 of the board's selection, a preliminary report advising whether 156.24 the proposed project is feasible, necessary, and cost-effective, 156.25 and whether it should best be made as proposed or in connection 156.26 with another project, and the estimated costs of the project as 156.27 recommended. No error or omission in the report invalidates the 156.28 proceeding. The board may also take steps before the hearing 156.29 that will, in its judgment, provide helpful information in 156.30 determining the desirability and feasibility of the project 156.31 including, but not limited to, preparation of plans and 156.32 specifications and advertisement for bids. The hearing may be 156.33 adjourned from time to time and a resolution ordering the 156.34 project may be adopted at any time within six months after the 156.35 date of hearing. In ordering the project, the board may reduce 156.36 but not increase the extent of the project as stated in the 157.1 notice of hearing, unless another hearing is held, and must find 157.2 that the project as ordered is in accordance with the 157.3 comprehensive plan and program adopted by the board under 157.4 section 4. 157.5 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 157.6 adopted by the affirmative vote of not less than two-thirds of 157.7 its members determines that an emergency exists requiring the 157.8 immediate purchase of materials or supplies or the making of 157.9 emergency repairs, it may order the purchase of the supplies and 157.10 materials and the making of the repairs before any hearing 157.11 required under this section. But the board must set as early a 157.12 date as practicable for that hearing at the time it declares the 157.13 emergency. All other provisions of this section must be 157.14 followed in giving notice of and conducting a hearing. This 157.15 subdivision does not prevent the board or its agents from 157.16 purchasing maintenance supplies or incurring maintenance costs 157.17 without regard to the requirements of this section. 157.18 Subd. 5. [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A 157.19 local government unit may specially assess all or part of the 157.20 costs of acquisition and betterment of any project ordered by 157.21 the board under this section. A special assessment must be 157.22 levied in accordance with Minnesota Statutes, sections 429.051 157.23 to 429.081, except as otherwise provided in this subdivision. 157.24 No other provisions of Minnesota Statutes, chapter 429, apply. 157.25 For purposes of levying special assessments, the hearing on the 157.26 project required in subdivision 1 must serve as the hearing on 157.27 the making of the original improvement provided for by Minnesota 157.28 Statutes, section 429.051. The area assessed may be less than 157.29 but must not exceed the area proposed to be assessed as stated 157.30 in the notice of hearing on the project provided for in 157.31 subdivision 2. To determine the allocable cost of the project 157.32 to the local government units, the government unit may adopt one 157.33 of the procedures in paragraph (a) or (b). 157.34 (a) At any time after a contract is let for the project, 157.35 the local government unit may get from the board a current 157.36 written estimate, on the basis of historical and reasonably 158.1 projected data, of that part of the total cost of acquisition 158.2 and betterment of the project or of some part of the project 158.3 that will be allocated to the local government unit and the 158.4 number of years over which such costs will be allocated as 158.5 current costs of acquisition, betterment, and debt service under 158.6 section 8. The board is not bound by this estimate for 158.7 allocating the costs of the project to local government units. 158.8 (b) The governing body may get from the board a written 158.9 statement showing, for the prior period that the governing body 158.10 designates, that part of the costs previously allocated to the 158.11 local government unit as current costs of acquisition, 158.12 betterment, and debt service only, of all or any part of the 158.13 project designated by the governing body. In addition to the 158.14 allocable costs, the local government unit may include in the 158.15 total expense, as a basis for levying assessments, all other 158.16 expenses incurred directly by the local government unit in 158.17 connection with the project. Special assessments levied by the 158.18 government unit with respect to previously allocated costs 158.19 ascertained under this paragraph are payable in equal annual 158.20 installments extending over a period not exceeding by more than 158.21 one year the number of years that the costs have been allocated 158.22 to the local government unit or the estimated useful life of the 158.23 project, or part of the project, whichever number of years is 158.24 the lesser. No limit is placed on the number of times the 158.25 governing body of a local government unit may assess the 158.26 previously allocated costs not previously assessed by the 158.27 government unit. The power to specially assess provided for in 158.28 this section is in addition and supplemental to all other powers 158.29 of local government units to levy special assessments. 158.30 Sec. 11. [INITIAL COSTS.] 158.31 Subdivision 1. [CONTRIBUTIONS OR ADVANCES FROM LOCAL 158.32 GOVERNMENT UNITS.] The board may, at the time it considers 158.33 necessary and proper, request from a local government unit 158.34 necessary money to defray the costs of any obligations assumed 158.35 under section 5 and the costs of administration, operation, and 158.36 maintenance. Before making a request, the board must, by formal 159.1 resolution, determine the necessity for the money, setting forth 159.2 the purposes for which the money is needed and the estimated 159.3 amount for each purpose. Upon receiving a request, the 159.4 governing body of each local government unit may provide for 159.5 payment of the amount requested as it considers fair and 159.6 reasonable. The money may be paid out of general revenue funds 159.7 or any other available funds of any local government unit and 159.8 its governing body thereof may levy taxes to provide funds, free 159.9 from any existing limit imposed by law or charter. Money may be 159.10 provided by government units with or without interest, but if 159.11 interest is charged it must not exceed five percent per year. 159.12 The board must credit the local government unit for the payments 159.13 in allocating current costs under section 8, on the terms and at 159.14 the times as are agreed to with the local government unit. 159.15 Subd. 2. [LIMITED TAX LEVY.] The board may levy ad valorem 159.16 taxes on all taxable property in the district to defray any of 159.17 the costs described in subdivision 1, provided the costs have 159.18 not been defrayed by contribution under subdivision 1. Before 159.19 certifying a levy to the county auditor, the board must 159.20 determine the need for the money to be derived from the levy by 159.21 formal resolution setting forth the purposes for which the tax 159.22 money will be used and the amount proposed to be used for each 159.23 purpose. In allocating current costs under section 8, the board 159.24 must credit the government units for taxes collected under the 159.25 levy made under this subdivision on the terms and at the time 159.26 the board considers fair and reasonable and on terms consistent 159.27 with section 8, subdivision 2. 159.28 Sec. 12. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 159.29 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 159.30 INDEBTEDNESS.] (a) Before adopting its annual budget and in 159.31 anticipation of the collection of tax and other revenues 159.32 estimated and set forth by the board in the budget, the board 159.33 may by resolution, authorize the issuance, negotiation, and sale 159.34 in accordance with subdivision 5 in such form and manner and 159.35 upon such terms as it may determine of its negotiable general 159.36 obligation certificates of indebtedness in aggregate principal 160.1 amounts not exceeding 50 percent of the total amount of such tax 160.2 collections and other revenues and maturing not later than three 160.3 months after the close of the budget year in which issued. 160.4 Revenues listed in clauses (1) to (3) must not be anticipated 160.5 for this purpose: 160.6 (1) taxes already anticipated by the issuance of 160.7 certificates under subdivision 2; 160.8 (2) deficiency taxes levied pursuant to this subdivision; 160.9 and 160.10 (3) taxes levied for the payment of certificates issued 160.11 pursuant to subdivision 3. 160.12 (b) The proceeds of the sale of the certificates must be 160.13 used only for the purposes for which tax collections and other 160.14 revenues are to be expended under the budget. 160.15 (c) All tax collections and other revenues included in the 160.16 budget for the budget year, after the expenditures of tax 160.17 collections and other revenues in accordance with the budget, 160.18 must be irrevocably pledged and appropriated to a special fund 160.19 to pay the principal and interest on the certificates when due. 160.20 (d) If for any reason the tax collections and other 160.21 revenues are insufficient to pay the certificates and interest 160.22 when due, the board must levy a tax in the amount of the 160.23 deficiency on all taxable property in the district and must 160.24 appropriate this amount when received to the special fund. 160.25 Subd. 2. [TAX LEVY ANTICIPATION CERTIFICATES OF 160.26 INDEBTEDNESS.] After a tax is levied by the board under section 160.27 11, subdivision 2, and certified to the county auditors in 160.28 anticipation of the collection of the tax, if the tax has not 160.29 been anticipated by the issuance of certificates under 160.30 subdivision 1, the board may, by resolution, authorize the 160.31 issuance, negotiation, and sale in accordance with subdivision 5 160.32 in the form and manner and on the terms and conditions as it 160.33 determines its negotiable general obligation tax levy 160.34 anticipation certificates of indebtedness in aggregate principal 160.35 amounts not exceeding 50 percent of the uncollected tax for 160.36 which no penalty for nonpayment or delinquency has been 161.1 attached. The certificates must mature not later than April 1 161.2 in the year after the year in which the tax is collectible. The 161.3 proceeds of the tax in anticipation of which the certificates 161.4 were issued and other funds that may become available must be 161.5 applied to the extent necessary to repay the certificates. 161.6 Subd. 3. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 161.7 any budget year the receipts of tax and other revenues for some 161.8 unforeseen cause become insufficient to pay the board's current 161.9 expenses, or if any calamity or other public emergency subjects 161.10 it to the necessity of making extraordinary expenditures, the 161.11 board may by resolution authorize the issuance, negotiation, and 161.12 sale in accordance with subdivision 5 in the form and manner and 161.13 on the terms and conditions as it may determine of its 161.14 negotiable general obligation certificates of indebtedness in an 161.15 amount sufficient to meet the deficiency, and the board must 161.16 levy on all taxable property in the district a tax sufficient to 161.17 pay the certificates and interest and shall appropriate all 161.18 collections of the tax to a special fund created for the payment 161.19 of the certificates and interest. 161.20 Subd. 4. [GENERAL OBLIGATION BONDS.] The board may by 161.21 resolution authorize the issuance of general obligation bonds 161.22 maturing serially in one or more annual or semiannual 161.23 installments for the acquisition or betterment of any part of 161.24 the district disposal system, including but not limited to, the 161.25 payment of interest during construction and for a reasonable 161.26 period thereafter, or for the refunding of outstanding bonds, 161.27 certificates of indebtedness, or judgments. The board must 161.28 pledge its full faith and credit and taxing power for the 161.29 payment of the bonds and shall provide for the issuance and sale 161.30 and for the security of the bonds in the manner provided in 161.31 Minnesota Statutes, chapter 475, and must have the same powers 161.32 and duties as a municipality issuing bonds under that law. An 161.33 election is not required to authorize the issuance of bonds and 161.34 the debt limit of Minnesota Statutes, chapter 475, do not apply 161.35 to the bonds. The board may also pledge for the payment of the 161.36 bonds and deduct from the amount of any tax levy required under 162.1 Minnesota Statutes, section 475.61, subdivision 1, any sums 162.2 receivable under section 9 or any state and federal grants 162.3 anticipated by the board and may covenant to refund the bonds if 162.4 and when and to the extent that for any reason the revenues, 162.5 together with other funds properly available and appropriated 162.6 for the purpose, are not sufficient to pay all principal and 162.7 interest due or about to become due; if the revenues have not 162.8 been anticipated by the issuance of certificates under 162.9 subdivision 1. All bonds that have been or shall hereafter be 162.10 issued and sold in conformity with the provisions of this 162.11 subdivision, and otherwise in conformity with law, are hereby 162.12 authorized, legalized, and validated. 162.13 Subd. 5. [MANNER OF SALE AND ISSUANCE OF 162.14 CERTIFICATES.] Certificates issued under subdivisions 1, 2, and 162.15 3 may be issued and sold by negotiation, without public sale, 162.16 and may be sold at a price equal to the percentage of their par 162.17 value, plus accrued interest, and bearing interest at the rate 162.18 or rates as may be determined by the board. No election is 162.19 required to authorize the issuance of certificates. 162.20 Certificates must bear the same rate of interest after maturity 162.21 as before and the full faith and credit and taxing power of the 162.22 board must be pledged to the payment of the certificates. 162.23 Sec. 13. [TAX LEVIES.] 162.24 The board may levy taxes to pay the bonds or other 162.25 obligations assumed by the district under section 5 and for debt 162.26 service of the district disposal system authorized in section 12 162.27 upon all taxable property within the district without limit of 162.28 rate or amount and without affecting the amount or rate of taxes 162.29 that may be levied by the board for other purposes or by any 162.30 local government unit in the district. No other provision of 162.31 law relating to debt limit shall restrict or in any way limit 162.32 the power of the board to issue the bonds and certificates 162.33 authorized in section 12. The board may also levy taxes as 162.34 provided in sections 9 and 11. The county auditor must annually 162.35 assess and extend upon the tax rolls the part of the taxes 162.36 levied by the board in each year that is certified to the 163.1 auditor by the board. The county treasurer must collect and 163.2 make settlement of the taxes with the treasurer of the board. 163.3 Sec. 14. [DEPOSITORIES.] 163.4 The board must from time to time designate one or more 163.5 national or state banks or trust companies authorized to do a 163.6 banking business as official depositories for money of the 163.7 board, and must require the treasurer to deposit all or a part 163.8 of the money in those institutions. The designation must be in 163.9 writing and must set forth all the terms and conditions on which 163.10 the deposits are made, and must be signed by the chair and 163.11 treasurer, and made a part of the minutes of the board. A 163.12 designated bank or trust company must qualify as a depository by 163.13 furnishing a corporate surety bond or collateral in the amount 163.14 required by Minnesota Statutes, section 118A.03. But, no bond 163.15 or collateral is required to secure any deposit insofar as it is 163.16 insured under federal law. 163.17 Sec. 15. [MONEY; ACCOUNTS AND INVESTMENTS.] 163.18 Subdivision 1. [RECEIPT AND APPLICATION.] All money 163.19 received by the board must be deposited or invested by the 163.20 treasurer and disposed of as the board directs in accordance 163.21 with its budget. But any money that has been pledged or 163.22 dedicated by the board to the payment of obligations or interest 163.23 on them or expenses incident to them, or for any other specific 163.24 purpose authorized by law, must be paid by the treasurer into 163.25 the fund to which they have been pledged. 163.26 Subd. 2. [FUNDS AND ACCOUNTS.] The board's treasurer must 163.27 establish funds and accounts as necessary or convenient to 163.28 handle the receipts and disbursements of the board in an orderly 163.29 fashion. 163.30 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 163.31 the board's funds and accounts may be deposited in the official 163.32 depositories of the board or invested as provided in this 163.33 subdivision. The amount not currently needed or required by law 163.34 to be kept in cash on deposit may be invested in obligations 163.35 authorized by law for the investment of municipal sinking 163.36 funds. The money may also be held under certificates of deposit 164.1 issued by any official depository of the board. All investments 164.2 by the board must conform to an investment policy adopted by the 164.3 board as amended from time to time. 164.4 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 164.5 issued by the board for the acquisition and betterment of the 164.6 district disposal system, and the use, other than investment, of 164.7 all money on hand in any sinking fund or funds of the board must 164.8 be governed by Minnesota Statutes, chapter 475, this article, 164.9 and the resolutions authorizing the issuance of the bonds. The 164.10 bond proceeds, when received, must be transferred to the 164.11 treasurer of the board for safekeeping, investment, and payment 164.12 of the costs for which they were issued. 164.13 Subd. 5. [AUDIT.] The board must provide for and pay the 164.14 cost of an independent annual audit of its official books and 164.15 records by the state public examiner or a certified public 164.16 accountant. 164.17 Sec. 16. [GENERAL POWERS OF BOARD.] 164.18 Subdivision 1. [ALL NECESSARY OR CONVENIENT POWERS.] The 164.19 board has powers necessary or convenient to discharge the duties 164.20 imposed upon it by law. The powers include those specified in 164.21 this article, but the express grant or enumeration of powers 164.22 does not limit the generality or scope of the grant of power in 164.23 this subdivision. 164.24 Subd. 2. [LAWSUITS.] The board may sue or be sued. 164.25 Subd. 3. [CONTRACTS.] The board may enter into any 164.26 contract necessary or proper for the exercise of its powers or 164.27 the accomplishment of its purposes. 164.28 Subd. 4. [RULES.] The board may adopt rules relating to 164.29 the board's responsibilities and may provide penalties not 164.30 exceeding the maximum penalty specified for a misdemeanor, and 164.31 the cost of prosecution may be added to the penalties imposed. 164.32 Any rule prescribing a penalty for violation must be published 164.33 at least once in a newspaper having general circulation in the 164.34 district. A violation may be prosecuted before any court in the 164.35 district having jurisdiction of misdemeanor, and every court has 164.36 jurisdiction of violations. A constable or other peace officer 165.1 of any municipality in the district may make arrests for 165.2 violations committed anywhere in the district in the manner and 165.3 with the effect as for violations of local ordinances or for 165.4 statutory misdemeanors. All fines collected must be deposited 165.5 in the treasury of the board, or may be allocated between the 165.6 board and the municipality in which the prosecution occurs on 165.7 terms agreed to by the board and the municipality. 165.8 Subd. 5. [GIFTS; GRANTS.] The board may accept gifts, may 165.9 apply for and accept grants or loans of money or other property 165.10 from the United States, the state, or any person for any of its 165.11 purposes, may enter into any agreement required to get the gift, 165.12 grant, loan, or other property; and may hold, use, and dispose 165.13 of money or property in accordance with the terms of the gift, 165.14 grant, loan or agreement. With respect to any loans or grants 165.15 of funds or real or personal property or other assistance from 165.16 any state or federal government or any agency or instrumentality 165.17 of the government, the board may contract to do and perform all 165.18 acts and things required as a condition or consideration under 165.19 state or federal law or rule or regulation, whether or not 165.20 included among the powers expressly granted to the board in this 165.21 article. 165.22 Subd. 6. [JOINT POWERS.] The board may act under Minnesota 165.23 Statutes, section 471.59, or any other appropriate law providing 165.24 for joint or cooperative action between government units. 165.25 Subd. 7. [RESEARCH; HEARINGS; INVESTIGATIONS; ADVISE.] The 165.26 board may conduct research studies and programs, collect and 165.27 analyze data, prepare reports, maps, charts, and tables, and 165.28 conduct all necessary hearings and investigations in connection 165.29 with the design, construction, and operation of the district 165.30 disposal system, and may advise and assist other government 165.31 units on system planning matters within the scope of its powers, 165.32 duties, and objectives, and may provide at the request of any 165.33 governmental unit other technical and administrative assistance 165.34 as the board considers appropriate for the government unit to 165.35 carry out the powers and duties vested in the government unit 165.36 under this article or imposed on or by the board. 166.1 Subd. 8. [EMPLOYEES; CONTRACTORS; INSURANCE.] The board 166.2 may employ on the terms it considers advisable, persons or firms 166.3 performing engineering, legal, or other services of a 166.4 professional nature; require any employee to get and file with 166.5 it an individual bond or fidelity insurance policy; and procure 166.6 insurance in the amounts it considers necessary against 166.7 liability of the board or its officers or both, for personal 166.8 injury or death and property damage or destruction, with the 166.9 force and effect stated in Minnesota Statutes, chapter 466, and 166.10 against risks of damage to or destruction of any of its 166.11 facilities, equipment, or other property as it considers 166.12 necessary. 166.13 Subd. 9. [PROPERTY.] The board may acquire by purchase, 166.14 lease, condemnation, gift, or grant, real or personal property 166.15 including positive and negative easements and water and air 166.16 rights, and it may construct, enlarge, improve, replace, repair, 166.17 maintain, and operate any interceptor, treatment works, or water 166.18 facility determined to be necessary or convenient for the 166.19 collection and disposal of sewage in the district. Any local 166.20 government unit and the commissioners of transportation and 166.21 natural resources may convey to or permit the use of these 166.22 facilities owned or controlled by the board, subject to the 166.23 rights of the holders of any bonds issued with respect to them 166.24 with or without compensation and without an election or approval 166.25 by any other government unit or agency. All powers conferred by 166.26 this subdivision may be exercised both within or outside the 166.27 district as may be necessary for the exercise by the board of 166.28 its powers or the accomplishment of its purposes. The board may 166.29 hold, lease, convey, or otherwise dispose of such property for 166.30 its purposes, upon the terms and in the manner it deems 166.31 advisable. Unless otherwise provided, the right to acquire 166.32 lands and property rights by condemnation must be exercised in 166.33 accordance with Minnesota Statutes, chapter 117, and must apply 166.34 to any property or interest in property owned by any local 166.35 government unit, but property devoted to an actual public use at 166.36 the time, or held to be devoted to such use within a reasonable 167.1 time, must not be so acquired unless a court of competent 167.2 jurisdiction determines that the use proposed by the board is 167.3 paramount. In case of property in actual public use, the board 167.4 may take possession of any property of which condemnation 167.5 proceedings have begun at any time after the issuance of a court 167.6 order appointing commissioners for its condemnation. 167.7 Subd. 10. [RIGHTS-OF-WAY.] The board may construct or 167.8 maintain its systems or facilities in, along, on, under, over, 167.9 or through public waters, streets, bridges, viaducts, and other 167.10 public rights-of-way without first getting a franchise from any 167.11 county or local government unit having jurisdiction over them, 167.12 but the facilities must be constructed and maintained in 167.13 accordance with the ordinances and resolutions of the county or 167.14 government unit relating to construction, installation, and 167.15 maintenance of similar facilities on public properties and must 167.16 not unnecessarily obstruct the public use of the rights-of-way. 167.17 Subd. 11. [DISPOSAL OF PROPERTY.] The board may sell, 167.18 lease, or otherwise dispose of any real or personal property 167.19 acquired by it that is no longer required to accomplish its 167.20 purposes. The property may be sold in the manner provided by 167.21 Minnesota Statutes, section 469.065, insofar as practical. The 167.22 board may give notice of sale it considers appropriate. When 167.23 the board determines that any property or any part of the 167.24 district disposal system that has been acquired from a local 167.25 government unit without compensation is no longer required, but 167.26 is required as a local facility by the government unit from 167.27 which is was acquired, the board may by resolution transfer it 167.28 to the government unit. 167.29 Subd. 12. [JOINT OPERATIONS.] The board may contract with 167.30 the United States or an agency of it, any state or agency of it, 167.31 or any regional public planning body in the state with 167.32 jurisdiction over any part of the district, or any other 167.33 municipal or public corporation, or governmental subdivision in 167.34 any state, for the joint use of any facility owned by the board 167.35 or the entity, for the operation by the entity of any system or 167.36 facility of the board, or for the performance on the board's 168.1 behalf of any service including, but not limited to, planning, 168.2 on the terms that may be agreed to by the contracting parties. 168.3 Unless designated by the board as a local sanitary sewer 168.4 facility, any treatment works or interceptor jointly used, or 168.5 operated on behalf of the board, as provided in this 168.6 subdivision, must be considered to be operated by the board to 168.7 include the facilities in the district disposal system. 168.8 Sec. 17. [LOCAL FACILITIES.] 168.9 Subdivision 1. [SANITARY SEWER FACILITIES.] Except as 168.10 otherwise provided in this article, local government units must 168.11 retain responsibility for the planning, design, acquisition, 168.12 betterment, operation, administration, and maintenance of all 168.13 local sanitary sewer facilities as provided by law. 168.14 Subd. 2. [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY 168.15 SEWER FACILITIES.] The board must upon request of any government 168.16 unit assume, either alone or jointly with the local government 168.17 unit, all or any part of the responsibility of the local 168.18 government unit described in subdivision 1. Except as provided 168.19 in subdivision 4 and to exercise the responsibility, the board 168.20 has all the powers and duties elsewhere conferred in this 168.21 article with the same force and effect as if the local sanitary 168.22 sewer facilities were a part of the district disposal system. 168.23 Subd. 3. [WATER AND STREET FACILITIES.] The board may, on 168.24 request of any governmental unit, enter into an agreement under 168.25 which the board may assume, either alone or jointly with such 168.26 unit, the responsibility to get and construct water and street 168.27 facilities in conjunction with any project for the acquisition 168.28 or betterment of the district disposal system or any project 168.29 undertaken by the board under subdivision 2. Except as provided 168.30 in subdivision 4, and to exercise any responsibilities under 168.31 this subdivision, the board has all the powers and duties 168.32 elsewhere conferred in this article with the same force and 168.33 effect as if the water or street facilities were a part of the 168.34 district disposal system. 168.35 Subd. 4. [ALLOCATION OF CURRENT COSTS.] All current costs 168.36 attributable to responsibilities assumed by the board over local 169.1 sanitary sewer facilities and water and street facilities as 169.2 provided in this section must be allocated solely to the local 169.3 unit for or with whom the responsibilities are assumed on the 169.4 terms and over a period as the board determines to be equitable 169.5 and in the best interest of the district. But if two or more 169.6 government units form a region in accordance with this section 169.7 all or part of the current costs attributable to the region 169.8 must, at the request of its joint board, be allocated to the 169.9 region and provided in the agreement establishing the region. 169.10 Subd. 5. [PART OF DISTRICT SYSTEM.] This section or any 169.11 other part of this article does not prevent the board from 169.12 including, where appropriate, treatment works or interceptors, 169.13 previously designated or treated as local sanitary sewer 169.14 facilities, as a part of the district disposal system. 169.15 Sec. 18. [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE 169.16 DISTRICT.] 169.17 The board may contract with the United States or any agency 169.18 of it, any state or any agency of it, or any municipal or public 169.19 corporation, governmental subdivision or agency, or political 169.20 subdivision in any state, outside the jurisdiction of the board, 169.21 for furnishing to the entities any services which the board may 169.22 furnish to local government units in the district under this 169.23 article including, but not limited to, planning for and the 169.24 acquisition, betterment, operation, administration, and 169.25 maintenance of any or all interceptors, treatment works, and 169.26 local sanitary sewer facilities; if the board may further 169.27 include as one of the terms of the contract that the entity also 169.28 pay to the board an amount as may be agreed upon as a reasonable 169.29 estimate of the proportionate share properly allocable to the 169.30 entity of costs of acquisition, betterment, and debt service 169.31 previously allocated to local government units in the district. 169.32 When the payments are made by the entities to the board, they 169.33 must be applied in reduction of the total amount of costs 169.34 allocated after that to each local government unit in the 169.35 district, on the equitable basis the board considers to be in 169.36 the best interest of the district. Any municipality in the 170.1 state may enter into the contract and perform all acts and 170.2 things required as a condition or consideration for it 170.3 consistent with the purpose of this article, whether or not 170.4 included among the powers otherwise granted to the municipality 170.5 by law or charter, the powers to include those powers set out in 170.6 section 9, subdivisions 3, 3a, and 4. 170.7 Sec. 19. [CONSTRUCTION, MATERIALS, SUPPLIES, EQUIPMENT; 170.8 CONTRACTS.] 170.9 Subdivision 1. [PLANS AND SPECIFICATIONS.] When the board 170.10 orders a project involving the acquisition or betterment of a 170.11 part of the district disposal system, it must cause plans and 170.12 specifications of this project to be made, or if previously 170.13 made, to be modified, if necessary, and to be approved by the 170.14 agency if required, and after any required approval by the 170.15 agency, one or more contracts for work and materials called for 170.16 by the plans and specification may be awarded as provided in 170.17 this section. 170.18 Subd. 2. [UNIFORM MUNICIPAL CONTRACTING LAW.] Except as 170.19 otherwise provided in this section, all contracts for work to be 170.20 done or for purchases of materials, supplies, or equipment must 170.21 be done in accordance with Minnesota Statutes, section 471.345. 170.22 Subd. 3. [CONTRACTS OR PURCHASES.] The board may without 170.23 advertising for bids, enter into any contract or purchase any 170.24 materials, supplies, or equipment of the type referred to in 170.25 subdivision 2 in accordance with applicable state law. 170.26 Sec. 20. [ANNEXATION OF TERRITORY.] 170.27 Any municipality in Douglas county, upon resolution adopted 170.28 by a four-fifths vote of its governing body, may petition the 170.29 board for annexation to the district of the area then comprising 170.30 the municipality or any part of it and, if accepted by the 170.31 board, the area must be considered annexed to the district and 170.32 subject to the jurisdiction of the board under the terms and 170.33 provisions of this article. The territory so annexed is subject 170.34 to taxation and assessment under this article and is subject to 170.35 taxation by the board like other property in the district for 170.36 the payment of principal and interest thereafter becoming due on 171.1 general obligations of the board, whether authorized or issued 171.2 before or after the annexation. The board may condition 171.3 approval of the annexation upon the contribution, by or on 171.4 behalf of the municipality petitioning for annexation, to the 171.5 board of an amount as may be agreed upon as being a reasonable 171.6 estimate of the proportionate share, properly allocable to the 171.7 municipality, of cost or acquisition, betterment, and debt 171.8 service previously allocated to local government units in the 171.9 district, on the terms as may be agreed upon and in place of or 171.10 in addition to further conditions as the board deems in the best 171.11 interests of the district. Notwithstanding any other provisions 171.12 of this article to the contrary, the conditions established for 171.13 annexation may include the requirement that the annexed 171.14 municipality pay for, contract for, and oversee the construction 171.15 of local sanitary sewer facilities and interceptor sewers as 171.16 those terms are defined in section 1. To pay the contribution 171.17 or satisfy any other condition established by the board, the 171.18 municipality petitioning annexation may exercise the powers 171.19 conferred in section 9. When the contributions are made by the 171.20 municipality to the board, they must be applied to reduce the 171.21 total amount of costs thereafter allocated to each local 171.22 government unit in the district, on the equitable basis as the 171.23 board considers to be in the best interests of the district, 171.24 applying so far as practicable and appropriate the criteria set 171.25 forth in section 8, subdivision 2. On annexation of the 171.26 territory, the secretary of the board must certify to the 171.27 auditor and treasurer of the county in which the municipality is 171.28 located the fact of the annexation and a legal description of 171.29 the territory annexed. 171.30 Sec. 21. [PROPERTY EXEMPT FROM TAXATION.] 171.31 Any properties, real or personal, owned, leased, 171.32 controlled, used, or occupied by the sanitary sewer board for 171.33 any purpose under this article are declared to be acquired, 171.34 owned, leased, controlled, used, and occupied for public, 171.35 governmental, and municipal purposes, and are exempt from 171.36 taxation by the state or any political subdivision of the state; 172.1 but the properties are subject to special assessments levied by 172.2 a political subdivision for a local improvement in amounts 172.3 proportionate to and not exceeding the special benefit received 172.4 by the properties from the improvement. No possible use of any 172.5 of the properties in any manner different from their use as part 172.6 of the disposal system at the time may be considered in 172.7 determining the special benefit received by the properties. All 172.8 of the assessments are subject to final approval by the board, 172.9 whose determination of the benefits is conclusive upon the 172.10 political subdivision levying the assessment. 172.11 Sec. 22. [RELATION TO EXISTING LAWS.] 172.12 This article prevails over any law or charter inconsistent 172.13 with it. The powers conferred on the board under this article 172.14 do not diminish or supersede the powers conferred on the agency 172.15 by Minnesota Statutes, chapters 115 and 116. 172.16 Sec. 23. [APPLICATION.] 172.17 This article applies to the townships of Carlos, Brandon, 172.18 La Grand, Leaf Valley, Miltona, and Moe in Douglas county. 172.19 Sec. 24. [LOCAL APPROVAL.] 172.20 Sections 1 to 23 take effect for those townships that have 172.21 approved it the day after each of the governing bodies of at 172.22 least four of the local governmental units referred to in 172.23 section 23 have complied with Minnesota Statutes, section 172.24 645.021, subdivision 3. A township listed in section 23 that 172.25 has not complied with Minnesota Statutes, section 645.021, 172.26 subdivision 3, by the date when the first four townships have 172.27 done so may opt back in to the district at a later time by 172.28 annexation as provided in this article. 172.29 ARTICLE 10 172.30 MISCELLANEOUS 172.31 Section 1. Minnesota Statutes 2002, section 325D.421, is 172.32 amended by adding a subdivision to read: 172.33 Subd. 1a. [CIGARETTES IN INTERSTATE COMMERCE.] (a) A 172.34 person may not transport or cause to be transported from this 172.35 state cigarettes for sale in another state without first 172.36 affixing to the cigarettes the stamp required by the state in 173.1 which the cigarettes are to be sold or paying any other excise 173.2 tax on the cigarettes imposed by the state in which the 173.3 cigarettes are to be sold. 173.4 (b) A person may not affix to cigarettes the stamp required 173.5 by another state or pay any other excise tax on the cigarettes 173.6 imposed by another state if the other state prohibits stamps 173.7 from being affixed to the cigarettes, prohibits the payment of 173.8 any other excise tax on the cigarettes, or prohibits the sale of 173.9 the cigarettes. 173.10 (c) Not later than 15 days after the end of each calendar 173.11 quarter, a person who transports or causes to be transported 173.12 from this state cigarettes for sale in another state shall 173.13 submit to the attorney general a report identifying the quantity 173.14 and style of each brand of the cigarettes transported or caused 173.15 to be transported in the preceding calendar quarter, and the 173.16 name and address of each recipient of the cigarettes. 173.17 (d) For purposes of this subdivision, "person" has the 173.18 meaning given in section 297F.01, subdivision 12, and includes a 173.19 common or contract carrier or a public warehouse only if the 173.20 carrier or warehouse is owned, in whole or in part, directly or 173.21 indirectly, by such a person. 173.22[EFFECTIVE DATE.] This section is effective the day 173.23 following final enactment. 173.24 Sec. 2. Minnesota Statutes 2002, section 325D.421, 173.25 subdivision 2, is amended to read: 173.26 Subd. 2. [PRIVATE CAUSE OF ACTION.] (a) In addition to any 173.27 other private remedy provided by law, any person that sustains 173.28 economic damages or commercial injury as a result of any 173.29 violation of subdivision 1 or 1a may bring an action for 173.30 appropriate injunctive or other equitable relief, actual 173.31 damages, if any, sustained by reason of the violation, and, as 173.32 determined by the court, interest on the damages from the date 173.33 of the complaint, taxable costs, and reasonable attorney fees. 173.34 (b) If the trier of fact finds that the violation is 173.35 egregious, it may increase the recovery to an amount not in 173.36 excess of three times the actual damages sustained by reason of 174.1 the violation. The trier of fact may, in addition, award 174.2 exemplary damages for violations of subdivision 1, paragraph 174.3 (c), equal to the difference between the permitted legal price 174.4 and the actual price for the sales. 174.5[EFFECTIVE DATE.] This section is effective the day 174.6 following final enactment. 174.7 Sec. 3. Minnesota Statutes 2002, section 469.1731, 174.8 subdivision 3, is amended to read: 174.9 Subd. 3. [FILING.] The city must file a copy of the 174.10 resolution and development plan with the commissioner of trade 174.11 and economic development. The designation takes effectfor the174.12first calendar year that begins more than 9030 days after the 174.13 filing. 174.14[EFFECTIVE DATE.] This section is effective the day 174.15 following final enactment. 174.16 Sec. 4. [CITY OF DULUTH; TAX INCREMENT FINANCING 174.17 DISTRICT.] 174.18 Subdivision 1. [AUTHORIZATION.] Upon approval of the 174.19 governing body of the city of Duluth, the Duluth economic 174.20 development authority may create an economic development tax 174.21 increment financing district for aircraft related facilities. 174.22 The authority may establish a district only after entering a 174.23 development agreement, which provides for construction of an 174.24 aircraft maintenance facility with a minimum square footage of 174.25 150,000 and requires employment of a minimum of 200 individuals 174.26 with average annual compensation in excess of $30,000. Except 174.27 as otherwise provided in this section, the provisions of 174.28 Minnesota Statutes, sections 469.174 to 469.179 apply to the 174.29 district. 174.30 Subd. 2. [SPECIAL RULES.] (a) Notwithstanding the 174.31 provisions of Minnesota Statutes, section 469.176, subdivision 174.32 1b, paragraph (a), clause (3), no tax increment shall be paid to 174.33 the authority after 25 years after receipt by the authority of 174.34 the first tax increment for the district authorized by this 174.35 section. 174.36 (b) The development in the district authorized by this 175.1 section shall be deemed to be a purpose authorized under 175.2 Minnesota Statutes, section 469.176, subdivision 4c, paragraph 175.3 (a). 175.4 (c) For purposes of Minnesota Statutes, section 469.177, 175.5 subdivision 12, the applicable maximum duration limit of the 175.6 district authorized by this section shall be as set forth in 175.7 paragraph (a). 175.8[EFFECTIVE DATE.] This section is effective upon compliance 175.9 with the requirements of Minnesota Statutes, sections 469.1782 175.10 and 645.021. 175.11 Sec. 5. [REPEALER.] 175.12 Laws 1984, chapter 652, section 2, is repealed. 175.13[EFFECTIVE DATE.] This section is effective for Benton 175.14 county the day after the governing body of Benton county and its 175.15 chief clerical officer timely complete their compliance with 175.16 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 175.17 This section is effective for Stearns county the day after 175.18 the governing body of Stearns county and its chief clerical 175.19 officer timely complete their compliance with Minnesota 175.20 Statutes, section 645.021, subdivisions 2 and 3.