SF 1510

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; providing for property tax 
  1.3             reform; changing class rates; providing education 
  1.4             funding; providing truth in budgeting; providing levy 
  1.5             constraints; appropriating money; amending Minnesota 
  1.6             Statutes 1996, sections 273.13, subdivisions 22, 23, 
  1.7             24, 25, and 31; 273.1393; 275.065, subdivisions 1, 3, 
  1.8             5a, and 6, and by adding a subdivision; 275.07, by 
  1.9             adding a subdivision; 276.04, subdivision 2; 477A.013, 
  1.10            subdivision 9; and 477A.03, subdivision 2; proposing 
  1.11            coding for new law in Minnesota Statutes, chapters 
  1.12            273; and 275; repealing Minnesota Statutes 1996, 
  1.13            sections 273.13, subdivision 32; 473.3915; and 
  1.14            477A.011, subdivision 37. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16                             ARTICLE 1 
  1.17                    PROPERTY TAX CLASSIFICATION 
  1.18     Section 1.  Minnesota Statutes 1996, section 273.13, 
  1.19  subdivision 22, is amended to read: 
  1.20     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  1.21  23, real estate which is residential and used for homestead 
  1.22  purposes is class 1.  The market value of class 1a property must 
  1.23  be determined based upon the value of the house, garage, and 
  1.24  land.  
  1.25     The first $72,000 of market value of class 1a property has 
  1.26  a net class rate of one percent of its market value and a gross 
  1.27  class rate of 2.17 percent of its market value.  For taxes 
  1.28  payable in 1992, the market value of class 1a property that 
  1.29  exceeds $72,000 but does not exceed $115,000 has a class rate of 
  1.30  two percent of its market value; and the market value of class 
  2.1   1a property that exceeds $115,000 has a class rate of 2.5 
  2.2   percent of its market value.  For taxes payable in 1993 and 
  2.3   thereafter, The market value of class 1a property that exceeds 
  2.4   $72,000 has a class rate of two 1.65 percent for taxes payable 
  2.5   in 1998, 1.6 percent for taxes payable in 1999, and 1.55 percent 
  2.6   for taxes payable in 2000. 
  2.7      (b) Class 1b property includes homestead real estate or 
  2.8   homestead manufactured homes used for the purposes of a 
  2.9   homestead by 
  2.10     (1) any blind person, or the blind person and the blind 
  2.11  person's spouse; or 
  2.12     (2) any person, hereinafter referred to as "veteran," who: 
  2.13     (i) served in the active military or naval service of the 
  2.14  United States; and 
  2.15     (ii) is entitled to compensation under the laws and 
  2.16  regulations of the United States for permanent and total 
  2.17  service-connected disability due to the loss, or loss of use, by 
  2.18  reason of amputation, ankylosis, progressive muscular 
  2.19  dystrophies, or paralysis, of both lower extremities, such as to 
  2.20  preclude motion without the aid of braces, crutches, canes, or a 
  2.21  wheelchair; and 
  2.22     (iii) has acquired a special housing unit with special 
  2.23  fixtures or movable facilities made necessary by the nature of 
  2.24  the veteran's disability, or the surviving spouse of the 
  2.25  deceased veteran for as long as the surviving spouse retains the 
  2.26  special housing unit as a homestead; or 
  2.27     (3) any person who: 
  2.28     (i) is permanently and totally disabled and 
  2.29     (ii) receives 90 percent or more of total income from 
  2.30     (A) aid from any state as a result of that disability; or 
  2.31     (B) supplemental security income for the disabled; or 
  2.32     (C) workers' compensation based on a finding of total and 
  2.33  permanent disability; or 
  2.34     (D) social security disability, including the amount of a 
  2.35  disability insurance benefit which is converted to an old age 
  2.36  insurance benefit and any subsequent cost of living increases; 
  3.1   or 
  3.2      (E) aid under the federal Railroad Retirement Act of 1937, 
  3.3   United States Code Annotated, title 45, section 228b(a)5; or 
  3.4      (F) a pension from any local government retirement fund 
  3.5   located in the state of Minnesota as a result of that 
  3.6   disability; or 
  3.7      (G) pension, annuity, or other income paid as a result of 
  3.8   that disability from a private pension or disability plan, 
  3.9   including employer, employee, union, and insurance plans and 
  3.10     (iii) has household income as defined in section 290A.03, 
  3.11  subdivision 5, of $50,000 or less; or 
  3.12     (4) any person who is permanently and totally disabled and 
  3.13  whose household income as defined in section 290A.03, 
  3.14  subdivision 5, is 150 percent or less of the federal poverty 
  3.15  level. 
  3.16     Property is classified and assessed under clause (4) only 
  3.17  if the government agency or income-providing source certifies, 
  3.18  upon the request of the homestead occupant, that the homestead 
  3.19  occupant satisfies the disability requirements of this paragraph.
  3.20     Property is classified and assessed pursuant to clause (1) 
  3.21  only if the commissioner of economic security certifies to the 
  3.22  assessor that the homestead occupant satisfies the requirements 
  3.23  of this paragraph.  
  3.24     Permanently and totally disabled for the purpose of this 
  3.25  subdivision means a condition which is permanent in nature and 
  3.26  totally incapacitates the person from working at an occupation 
  3.27  which brings the person an income.  The first $32,000 market 
  3.28  value of class 1b property has a net class rate of .45 percent 
  3.29  of its market value and a gross class rate of .87 percent of its 
  3.30  market value.  The remaining market value of class 1b property 
  3.31  has a gross or net class rate using the rates for class 1 or 
  3.32  class 2a property, whichever is appropriate, of similar market 
  3.33  value.  
  3.34     (c) Class 1c property is commercial use real property that 
  3.35  abuts a lakeshore line and is devoted to temporary and seasonal 
  3.36  residential occupancy for recreational purposes but not devoted 
  4.1   to commercial purposes for more than 250 days in the year 
  4.2   preceding the year of assessment, and that includes a portion 
  4.3   used as a homestead by the owner, which includes a dwelling 
  4.4   occupied as a homestead by a shareholder of a corporation that 
  4.5   owns the resort or a partner in a partnership that owns the 
  4.6   resort, even if the title to the homestead is held by the 
  4.7   corporation or partnership.  For purposes of this clause, 
  4.8   property is devoted to a commercial purpose on a specific day if 
  4.9   any portion of the property, excluding the portion used 
  4.10  exclusively as a homestead, is used for residential occupancy 
  4.11  and a fee is charged for residential occupancy.  Class 1c 
  4.12  property has a class rate of one .85 percent of total market 
  4.13  value for taxes payable in 1993 and thereafter with the 
  4.14  following limitation:  the area of the property must not exceed 
  4.15  100 feet of lakeshore footage for each cabin or campsite located 
  4.16  on the property up to a total of 800 feet and 500 feet in depth, 
  4.17  measured away from the lakeshore.  
  4.18     Sec. 2.  Minnesota Statutes 1996, section 273.13, 
  4.19  subdivision 23, is amended to read: 
  4.20     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
  4.21  land including any improvements that is homesteaded.  The market 
  4.22  value of the house and garage and immediately surrounding one 
  4.23  acre of land has the same class rates as class 1a property under 
  4.24  subdivision 22.  The value of the remaining land including 
  4.25  improvements up to $115,000 has a net class rate of .45 .35 
  4.26  percent of market value and a gross class rate of 1.75 percent 
  4.27  of market value.  The remaining value of class 2a property over 
  4.28  $115,000 of market value that does not exceed 320 acres has a 
  4.29  net class rate of one .85 percent of market value, and a gross 
  4.30  class rate of 2.25 percent of market value.  The remaining 
  4.31  property over the $115,000 market value in excess of 320 acres 
  4.32  has a class rate of 1.5 1.25 percent of market value, and a 
  4.33  gross class rate of 2.25 percent of market value.  
  4.34     (b) Class 2b property is (1) real estate, rural in 
  4.35  character and used exclusively for growing trees for timber, 
  4.36  lumber, and wood and wood products; (2) real estate that is not 
  5.1   improved with a structure and is used exclusively for growing 
  5.2   trees for timber, lumber, and wood and wood products, if the 
  5.3   owner has participated or is participating in a cost-sharing 
  5.4   program for afforestation, reforestation, or timber stand 
  5.5   improvement on that particular property, administered or 
  5.6   coordinated by the commissioner of natural resources; (3) real 
  5.7   estate that is nonhomestead agricultural land; or (4) a landing 
  5.8   area or public access area of a privately owned public use 
  5.9   airport.  Class 2b property has a net class rate of 1.5 1.25 
  5.10  percent of market value, and a gross class rate of 2.25 percent 
  5.11  of market value.  
  5.12     (c) Agricultural land as used in this section means 
  5.13  contiguous acreage of ten acres or more, primarily used during 
  5.14  the preceding year for agricultural purposes.  Agricultural use 
  5.15  may include pasture, timber, waste, unusable wild land, and land 
  5.16  included in state or federal farm or conservation programs.  
  5.17  "Agricultural purposes" as used in this section means the 
  5.18  raising or cultivation of agricultural products.  Land enrolled 
  5.19  in the Reinvest in Minnesota program under sections 103F.505 to 
  5.20  103F.531 or the federal Conservation Reserve Program as 
  5.21  contained in Public Law Number 99-198, and consisting of a 
  5.22  minimum of ten contiguous acres, shall be classified as 
  5.23  agricultural.  Agricultural classification for property shall be 
  5.24  determined with respect to the use of the whole parcel, and not 
  5.25  based upon the market value of any residential structures on the 
  5.26  parcel or contiguous parcels under the same ownership. 
  5.27     (d) Real estate of less than ten acres used principally for 
  5.28  raising or cultivating agricultural products, shall be 
  5.29  considered as agricultural land, if it is not used primarily for 
  5.30  residential purposes.  
  5.31     (e) The term "agricultural products" as used in this 
  5.32  subdivision includes:  
  5.33     (1) livestock, dairy animals, dairy products, poultry and 
  5.34  poultry products, fur-bearing animals, horticultural and nursery 
  5.35  stock described in sections 18.44 to 18.61, fruit of all kinds, 
  5.36  vegetables, forage, grains, bees, and apiary products by the 
  6.1   owner; 
  6.2      (2) fish bred for sale and consumption if the fish breeding 
  6.3   occurs on land zoned for agricultural use; 
  6.4      (3) the commercial boarding of horses if the boarding is 
  6.5   done in conjunction with raising or cultivating agricultural 
  6.6   products as defined in clause (1); 
  6.7      (4) property which is owned and operated by nonprofit 
  6.8   organizations used for equestrian activities, excluding racing; 
  6.9   and 
  6.10     (5) game birds and waterfowl bred and raised for use on a 
  6.11  shooting preserve licensed under section 97A.115.  
  6.12     (f) If a parcel used for agricultural purposes is also used 
  6.13  for commercial or industrial purposes, including but not limited 
  6.14  to:  
  6.15     (1) wholesale and retail sales; 
  6.16     (2) processing of raw agricultural products or other goods; 
  6.17     (3) warehousing or storage of processed goods; and 
  6.18     (4) office facilities for the support of the activities 
  6.19  enumerated in clauses (1), (2), and (3), 
  6.20  the assessor shall classify the part of the parcel used for 
  6.21  agricultural purposes as class 1b, 2a, or 2b, whichever is 
  6.22  appropriate, and the remainder in the class appropriate to its 
  6.23  use.  The grading, sorting, and packaging of raw agricultural 
  6.24  products for first sale is considered an agricultural purpose.  
  6.25  A greenhouse or other building where horticultural or nursery 
  6.26  products are grown that is also used for the conduct of retail 
  6.27  sales must be classified as agricultural if it is primarily used 
  6.28  for the growing of horticultural or nursery products from seed, 
  6.29  cuttings, or roots and occasionally as a showroom for the retail 
  6.30  sale of those products.  Use of a greenhouse or building only 
  6.31  for the display of already grown horticultural or nursery 
  6.32  products does not qualify as an agricultural purpose.  
  6.33     The assessor shall determine and list separately on the 
  6.34  records the market value of the homestead dwelling and the one 
  6.35  acre of land on which that dwelling is located.  If any farm 
  6.36  buildings or structures are located on this homesteaded acre of 
  7.1   land, their market value shall not be included in this separate 
  7.2   determination.  
  7.3      (g) To qualify for classification under paragraph (b), 
  7.4   clause (4), a privately owned public use airport must be 
  7.5   licensed as a public airport under section 360.018.  For 
  7.6   purposes of paragraph (b), clause (4), "landing area" means that 
  7.7   part of a privately owned public use airport properly cleared, 
  7.8   regularly maintained, and made available to the public for use 
  7.9   by aircraft and includes runways, taxiways, aprons, and sites 
  7.10  upon which are situated landing or navigational aids.  A landing 
  7.11  area also includes land underlying both the primary surface and 
  7.12  the approach surfaces that comply with all of the following:  
  7.13     (i) the land is properly cleared and regularly maintained 
  7.14  for the primary purposes of the landing, taking off, and taxiing 
  7.15  of aircraft; but that portion of the land that contains 
  7.16  facilities for servicing, repair, or maintenance of aircraft is 
  7.17  not included as a landing area; 
  7.18     (ii) the land is part of the airport property; and 
  7.19     (iii) the land is not used for commercial or residential 
  7.20  purposes. 
  7.21  The land contained in a landing area under paragraph (b), clause 
  7.22  (4), must be described and certified by the commissioner of 
  7.23  transportation.  The certification is effective until it is 
  7.24  modified, or until the airport or landing area no longer meets 
  7.25  the requirements of paragraph (b), clause (4).  For purposes of 
  7.26  paragraph (b), clause (4), "public access area" means property 
  7.27  used as an aircraft parking ramp, apron, or storage hangar, or 
  7.28  an arrival and departure building in connection with the airport.
  7.29     (h) For the purposes of section 276.04, subdivision 2, 
  7.30  paragraph (c), the commissioner of revenue is to proportionately 
  7.31  reduce gross class rates for taxes payable in 1998, 1999, and 
  7.32  2000. 
  7.33     Sec. 3.  Minnesota Statutes 1996, section 273.13, 
  7.34  subdivision 24, is amended to read: 
  7.35     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
  7.36  property and utility real and personal property, except class 5 
  8.1   property as identified in subdivision 31, clause (1), is class 
  8.2   3a.  It has a class rate of three 2.45 percent for taxes payable 
  8.3   in 1998 and 1999 and 2.4 percent for taxes payable in 2000 of 
  8.4   the first $100,000 of market value for taxes payable in 1993 and 
  8.5   thereafter, and 5.06 a class rate of 3.35 percent for taxes 
  8.6   payable in 1998, 3.25 percent for taxes payable in 1999, and 3.2 
  8.7   percent for taxes payable in 2000 of the market value over 
  8.8   $100,000.  In the case of state-assessed commercial, industrial, 
  8.9   and utility property owned by one person or entity, only one 
  8.10  parcel has a reduced class rate on the first $100,000 of market 
  8.11  value.  In the case of other commercial, industrial, and utility 
  8.12  property owned by one person or entity, only one parcel in each 
  8.13  county has a reduced class rate on the first $100,000 of market 
  8.14  value, except that: 
  8.15     (1) if the market value of the parcel is less than 
  8.16  $100,000, and additional parcels are owned by the same person or 
  8.17  entity in the same city or town within that county, the reduced 
  8.18  class rate shall be applied up to a combined total market value 
  8.19  of $100,000 for all parcels owned by the same person or entity 
  8.20  in the same city or town within the county; 
  8.21     (2) in the case of grain, fertilizer, and feed elevator 
  8.22  facilities, as defined in section 18C.305, subdivision 1, or 
  8.23  232.21, subdivision 8, the limitation to one parcel per owner 
  8.24  per county for the reduced class rate shall not apply, but there 
  8.25  shall be a limit of $100,000 of preferential value per site of 
  8.26  contiguous parcels owned by the same person or entity.  Only the 
  8.27  value of the elevator portion of each parcel shall qualify for 
  8.28  treatment under this clause.  For purposes of this subdivision, 
  8.29  contiguous parcels include parcels separated only by a railroad 
  8.30  or public road right-of-way; and 
  8.31     (3) in the case of property owned by a nonprofit charitable 
  8.32  organization that qualifies for tax exemption under section 
  8.33  501(c)(3) of the Internal Revenue Code of 1986, as amended 
  8.34  through December 31, 1993, if the property is used as a business 
  8.35  incubator, the limitation to one parcel per owner per county for 
  8.36  the reduced class rate shall not apply, provided that the 
  9.1   reduced rate applies only to the first $100,000 of value per 
  9.2   parcel owned by the organization.  As used in this clause, a 
  9.3   "business incubator" is a facility used for the development of 
  9.4   nonretail businesses, offering access to equipment, space, 
  9.5   services, and advice to the tenant businesses, for the purpose 
  9.6   of encouraging economic development, diversification, and job 
  9.7   creation in the area served by the organization. 
  9.8      To receive the reduced class rate on additional parcels 
  9.9   under clause (1), (2), or (3), the taxpayer must notify the 
  9.10  county assessor that the taxpayer owns more than one parcel that 
  9.11  qualifies under clause (1), (2), or (3). 
  9.12     (b) Employment property defined in section 469.166, during 
  9.13  the period provided in section 469.170, shall constitute class 
  9.14  3b and has a class rate of 2.3 percent of the first $50,000 of 
  9.15  market value and 3.6 percent of the remainder, except that for 
  9.16  employment property located in a border city enterprise zone 
  9.17  designated pursuant to section 469.168, subdivision 4, paragraph 
  9.18  (c), the class rate of the first $100,000 of market value and 
  9.19  the class rate of the remainder is determined under paragraph 
  9.20  (a), unless the governing body of the city designated as an 
  9.21  enterprise zone determines that a specific parcel shall be 
  9.22  assessed pursuant to the first clause of this sentence.  The 
  9.23  governing body may provide for assessment under the first clause 
  9.24  of the preceding sentence only for property which is located in 
  9.25  an area which has been designated by the governing body for the 
  9.26  receipt of tax reductions authorized by section 469.171, 
  9.27  subdivision 1. 
  9.28     (c) Structures which are (i) located on property classified 
  9.29  as class 3a, (ii) constructed under an initial building permit 
  9.30  issued after January 2, 1996, (iii) located in a transit zone as 
  9.31  defined under section 473.3915, subdivision 3, (iv) located 
  9.32  within the boundaries of a school district, and (v) not 
  9.33  primarily used for retail or transient lodging purposes, shall 
  9.34  have a class rate of four percent on that portion of the market 
  9.35  value in excess of $100,000 and any market value under $100,000 
  9.36  that does not qualify for the three percent class rate under 
 10.1   paragraph (a).  As used in item (v), a structure is primarily 
 10.2   used for retail or transient lodging purposes if over 50 percent 
 10.3   of its square footage is used for those purposes.  The four 
 10.4   percent rate shall also apply to improvements to existing 
 10.5   structures that meet the requirements of items (i) to (v) if the 
 10.6   improvements are constructed under an initial building permit 
 10.7   issued after January 2, 1996, even if the remainder of the 
 10.8   structure was constructed prior to January 2, 1996.  For the 
 10.9   purposes of this paragraph, a structure shall be considered to 
 10.10  be located in a transit zone if any portion of the structure 
 10.11  lies within the zone.  If any property once eligible for 
 10.12  treatment under this paragraph ceases to remain eligible due to 
 10.13  revisions in transit zone boundaries, the property shall 
 10.14  continue to receive treatment under this paragraph for a period 
 10.15  of three years. 
 10.16     Sec. 4.  Minnesota Statutes 1996, section 273.13, 
 10.17  subdivision 25, is amended to read: 
 10.18     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 10.19  estate containing four or more units and used or held for use by 
 10.20  the owner or by the tenants or lessees of the owner as a 
 10.21  residence for rental periods of 30 days or more.  Class 4a also 
 10.22  includes hospitals licensed under sections 144.50 to 144.56, 
 10.23  other than hospitals exempt under section 272.02, and contiguous 
 10.24  property used for hospital purposes, without regard to whether 
 10.25  the property has been platted or subdivided.  Class 4a property 
 10.26  in a city with a population of 5,000 or less, that is (1) 
 10.27  located outside of the metropolitan area, as defined in section 
 10.28  473.121, subdivision 2, or outside any county contiguous to the 
 10.29  metropolitan area, and (2) whose city boundary is at least 15 
 10.30  miles from the boundary of any city with a population greater 
 10.31  than 5,000 has a class rate of 2.3 percent of market value for 
 10.32  taxes payable in 1996 and thereafter.  All other class 4a 
 10.33  property has a class rate of 3.4 2.65 percent of market value 
 10.34  for taxes payable in 1996 and thereafter.  For purposes of this 
 10.35  paragraph, population has the same meaning given in section 
 10.36  477A.011, subdivision 3 1998, 2.55 percent of market value for 
 11.1   taxes payable in 1999, and 2.5 percent of market value for taxes 
 11.2   payable in 2000. 
 11.3      (b) Class 4b includes: 
 11.4      (1) residential real estate containing less than four 
 11.5   units, other than seasonal residential, and recreational; 
 11.6      (2) manufactured homes not classified under any other 
 11.7   provision; 
 11.8      (3) a dwelling, garage, and surrounding one acre of 
 11.9   property on a nonhomestead farm classified under subdivision 23, 
 11.10  paragraph (b).  
 11.11     Class 4b property has a class rate of 2.8 percent of market 
 11.12  value for taxes payable in 1992, 2.5 percent of market value for 
 11.13  taxes payable in 1993, and 2.3 1.85 percent of market value for 
 11.14  taxes payable in 1994 and thereafter 1998, 1.8 percent of market 
 11.15  value for taxes payable in 1999, and 1.75 percent of market 
 11.16  value for taxes payable in 2000. 
 11.17     (c) Class 4c property includes: 
 11.18     (1) a structure that is:  
 11.19     (i) situated on real property that is used for housing for 
 11.20  the elderly or for low- and moderate-income families as defined 
 11.21  in Title II, as amended through December 31, 1990, of the 
 11.22  National Housing Act or the Minnesota housing finance agency law 
 11.23  of 1971, as amended, or rules promulgated by the agency and 
 11.24  financed by a direct federal loan or federally insured loan made 
 11.25  pursuant to Title II of the Act; or 
 11.26     (ii) situated on real property that is used for housing the 
 11.27  elderly or for low- and moderate-income families as defined by 
 11.28  the Minnesota housing finance agency law of 1971, as amended, or 
 11.29  rules adopted by the agency pursuant thereto and financed by a 
 11.30  loan made by the Minnesota housing finance agency pursuant to 
 11.31  the provisions of the act.  
 11.32     This clause applies only to property of a nonprofit or 
 11.33  limited dividend entity.  Property is classified as class 4c 
 11.34  under this clause for 15 years from the date of the completion 
 11.35  of the original construction or substantial rehabilitation, or 
 11.36  for the original term of the loan.  
 12.1      (2) a structure that is: 
 12.2      (i) situated upon real property that is used for housing 
 12.3   lower income families or elderly or handicapped persons, as 
 12.4   defined in section 8 of the United States Housing Act of 1937, 
 12.5   as amended; and 
 12.6      (ii) owned by an entity which has entered into a housing 
 12.7   assistance payments contract under section 8 which provides 
 12.8   assistance for 100 percent of the dwelling units in the 
 12.9   structure, other than dwelling units intended for management or 
 12.10  maintenance personnel.  Property is classified as class 4c under 
 12.11  this clause for the term of the housing assistance payments 
 12.12  contract, including all renewals, or for the term of its 
 12.13  permanent financing, whichever is shorter; and 
 12.14     (3) a qualified low-income building as defined in section 
 12.15  42(c)(2) of the Internal Revenue Code of 1986, as amended 
 12.16  through December 31, 1990, that (i) receives a low-income 
 12.17  housing credit under section 42 of the Internal Revenue Code of 
 12.18  1986, as amended through December 31, 1990; or (ii) meets the 
 12.19  requirements of that section and receives public financing, 
 12.20  except financing provided under sections 469.174 to 469.179, 
 12.21  which contains terms restricting the rents; or (iii) meets the 
 12.22  requirements of section 273.1317.  Classification pursuant to 
 12.23  this clause is limited to a term of 15 years.  The public 
 12.24  financing received must be from at least one of the following 
 12.25  sources:  government issued bonds exempt from taxes under 
 12.26  section 103 of the Internal Revenue Code of 1986, as amended 
 12.27  through December 31, 1993, the proceeds of which are used for 
 12.28  the acquisition or rehabilitation of the building; programs 
 12.29  under section 221(d)(3), 202, or 236, of Title II of the 
 12.30  National Housing Act; rental housing program funds under Section 
 12.31  8 of the United States Housing Act of 1937 or the market rate 
 12.32  family graduated payment mortgage program funds administered by 
 12.33  the Minnesota housing finance agency that are used for the 
 12.34  acquisition or rehabilitation of the building; public financing 
 12.35  provided by a local government used for the acquisition or 
 12.36  rehabilitation of the building, including grants or loans from 
 13.1   federal community development block grants, HOME block grants, 
 13.2   or residential rental bonds issued under chapter 474A; or other 
 13.3   rental housing program funds provided by the Minnesota housing 
 13.4   finance agency for the acquisition or rehabilitation of the 
 13.5   building. 
 13.6      For all properties described in clauses (1), (2), and (3) 
 13.7   and in paragraph (d), the market value determined by the 
 13.8   assessor must be based on the normal approach to value using 
 13.9   normal unrestricted rents unless the owner of the property 
 13.10  elects to have the property assessed under Laws 1991, chapter 
 13.11  291, article 1, section 55.  If the owner of the property elects 
 13.12  to have the market value determined on the basis of the actual 
 13.13  restricted rents, as provided in Laws 1991, chapter 291, article 
 13.14  1, section 55, the property will be assessed at the rate 
 13.15  provided for class 4a or class 4b property, as appropriate.  
 13.16  Properties described in clauses (1)(ii), (3), and (4) may apply 
 13.17  to the assessor for valuation under Laws 1991, chapter 291, 
 13.18  article 1, section 55.  The land on which these structures are 
 13.19  situated has the class rate given in paragraph (b) if the 
 13.20  structure contains fewer than four units, and the class rate 
 13.21  given in paragraph (a) if the structure contains four or more 
 13.22  units.  This clause applies only to the property of a nonprofit 
 13.23  or limited dividend entity.  
 13.24     (4) a parcel of land, not to exceed one acre, and its 
 13.25  improvements or a parcel of unimproved land, not to exceed one 
 13.26  acre, if it is owned by a neighborhood real estate trust and at 
 13.27  least 60 percent of the dwelling units, if any, on all land 
 13.28  owned by the trust are leased to or occupied by lower income 
 13.29  families or individuals.  This clause does not apply to any 
 13.30  portion of the land or improvements used for nonresidential 
 13.31  purposes.  For purposes of this clause, a lower income family is 
 13.32  a family with an income that does not exceed 65 percent of the 
 13.33  median family income for the area, and a lower income individual 
 13.34  is an individual whose income does not exceed 65 percent of the 
 13.35  median individual income for the area, as determined by the 
 13.36  United States Secretary of Housing and Urban Development.  For 
 14.1   purposes of this clause, "neighborhood real estate trust" means 
 14.2   an entity which is certified by the governing body of the 
 14.3   municipality in which it is located to have the following 
 14.4   characteristics: 
 14.5      (a) it is a nonprofit corporation organized under chapter 
 14.6   317A; 
 14.7      (b) it has as its principal purpose providing housing for 
 14.8   lower income families in a specific geographic community 
 14.9   designated in its articles or bylaws; 
 14.10     (c) it limits membership with voting rights to residents of 
 14.11  the designated community; and 
 14.12     (d) it has a board of directors consisting of at least 
 14.13  seven directors, 60 percent of whom are members with voting 
 14.14  rights and, to the extent feasible, 25 percent of whom are 
 14.15  elected by resident members of buildings owned by the trust; and 
 14.16     (5) except as provided in subdivision 22, paragraph (c), 
 14.17  real property devoted to temporary and seasonal residential 
 14.18  occupancy for recreation purposes, including real property 
 14.19  devoted to temporary and seasonal residential occupancy for 
 14.20  recreation purposes and not devoted to commercial purposes for 
 14.21  more than 250 days in the year preceding the year of 
 14.22  assessment.  For purposes of this clause, property is devoted to 
 14.23  a commercial purpose on a specific day if any portion of the 
 14.24  property is used for residential occupancy, and a fee is charged 
 14.25  for residential occupancy.  Class 4c also includes commercial 
 14.26  use real property used exclusively for recreational purposes in 
 14.27  conjunction with class 4c property devoted to temporary and 
 14.28  seasonal residential occupancy for recreational purposes, up to 
 14.29  a total of two acres, provided the property is not devoted to 
 14.30  commercial recreational use for more than 250 days in the year 
 14.31  preceding the year of assessment and is located within two miles 
 14.32  of the class 4c property with which it is used.  Class 4c 
 14.33  property classified in this clause also includes the remainder 
 14.34  of class 1c resorts.  Owners of real property devoted to 
 14.35  temporary and seasonal residential occupancy for recreation 
 14.36  purposes and all or a portion of which was devoted to commercial 
 15.1   purposes for not more than 250 days in the year preceding the 
 15.2   year of assessment desiring classification as class 1c or 4c, 
 15.3   must submit a declaration to the assessor designating the cabins 
 15.4   or units occupied for 250 days or less in the year preceding the 
 15.5   year of assessment by January 15 of the assessment year.  Those 
 15.6   cabins or units and a proportionate share of the land on which 
 15.7   they are located will be designated class 1c or 4c as otherwise 
 15.8   provided.  The remainder of the cabins or units and a 
 15.9   proportionate share of the land on which they are located will 
 15.10  be designated as class 3a.  The first $100,000 of the market 
 15.11  value of the remainder of the cabins or units and a 
 15.12  proportionate share of the land on which they are located shall 
 15.13  have a class rate of three 2.45 percent for taxes payable in 
 15.14  1998 and 1999 and 2.4 percent for taxes payable in 2000.  The 
 15.15  owner of property desiring designation as class 1c or 4c 
 15.16  property must provide guest registers or other records 
 15.17  demonstrating that the units for which class 1c or 4c 
 15.18  designation is sought were not occupied for more than 250 days 
 15.19  in the year preceding the assessment if so requested.  The 
 15.20  portion of a property operated as a (1) restaurant, (2) bar, (3) 
 15.21  gift shop, and (4) other nonresidential facility operated on a 
 15.22  commercial basis not directly related to temporary and seasonal 
 15.23  residential occupancy for recreation purposes shall not qualify 
 15.24  for class 1c or 4c; 
 15.25     (6) real property up to a maximum of one acre of land owned 
 15.26  by a nonprofit community service oriented organization; provided 
 15.27  that the property is not used for a revenue-producing activity 
 15.28  for more than six days in the calendar year preceding the year 
 15.29  of assessment and the property is not used for residential 
 15.30  purposes on either a temporary or permanent basis.  For purposes 
 15.31  of this clause, a "nonprofit community service oriented 
 15.32  organization" means any corporation, society, association, 
 15.33  foundation, or institution organized and operated exclusively 
 15.34  for charitable, religious, fraternal, civic, or educational 
 15.35  purposes, and which is exempt from federal income taxation 
 15.36  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 16.1   Revenue Code of 1986, as amended through December 31, 1990.  For 
 16.2   purposes of this clause, "revenue-producing activities" shall 
 16.3   include but not be limited to property or that portion of the 
 16.4   property that is used as an on-sale intoxicating liquor or 3.2 
 16.5   percent malt liquor establishment licensed under chapter 340A, a 
 16.6   restaurant open to the public, bowling alley, a retail store, 
 16.7   gambling conducted by organizations licensed under chapter 349, 
 16.8   an insurance business, or office or other space leased or rented 
 16.9   to a lessee who conducts a for-profit enterprise on the 
 16.10  premises.  Any portion of the property which is used for 
 16.11  revenue-producing activities for more than six days in the 
 16.12  calendar year preceding the year of assessment shall be assessed 
 16.13  as class 3a.  The use of the property for social events open 
 16.14  exclusively to members and their guests for periods of less than 
 16.15  24 hours, when an admission is not charged nor any revenues are 
 16.16  received by the organization shall not be considered a 
 16.17  revenue-producing activity; 
 16.18     (7) post-secondary student housing of not more than one 
 16.19  acre of land that is owned by a nonprofit corporation organized 
 16.20  under chapter 317A and is used exclusively by a student 
 16.21  cooperative, sorority, or fraternity for on-campus housing or 
 16.22  housing located within two miles of the border of a college 
 16.23  campus; and 
 16.24     (8) manufactured home parks as defined in section 327.14, 
 16.25  subdivision 3. 
 16.26     Class 4c property has a class rate of 2.3 1.85 percent of 
 16.27  market value for taxes payable in 1998, 1.8 percent of market 
 16.28  value for taxes payable in 1999, and 1.75 percent of market 
 16.29  value for taxes payable in 2000, except that (i) for each parcel 
 16.30  of seasonal residential recreational property not used for 
 16.31  commercial purposes under clause (5) the first $72,000 of market 
 16.32  value on each parcel has a class rate of 1.75 percent for taxes 
 16.33  payable in 1997 and 1.5 1.2 percent for taxes payable in 1998, 
 16.34  1.1 percent for taxes payable in 1999, and thereafter one 
 16.35  percent for taxes payable in 2000, and the market value of each 
 16.36  parcel that exceeds $72,000 has a class rate of 2.5 two percent, 
 17.1   and (ii) manufactured home parks assessed under clause (8) have 
 17.2   a class rate of two 1.7 percent for taxes payable in 1996, and 
 17.3   thereafter of market value.  
 17.4      (d) Class 4d property includes: 
 17.5      (1) a structure that is: 
 17.6      (i) situated on real property that is used for housing for 
 17.7   the elderly or for low and moderate income families as defined 
 17.8   by the Farmers Home Administration; 
 17.9      (ii) located in a municipality of less than 10,000 
 17.10  population; and 
 17.11     (iii) financed by a direct loan or insured loan from the 
 17.12  Farmers Home Administration.  Property is classified under this 
 17.13  clause for 15 years from the date of the completion of the 
 17.14  original construction or for the original term of the loan.  
 17.15     The class rates in paragraph (c), clauses (1), (2), and (3) 
 17.16  and this clause apply to the properties described in them, only 
 17.17  in proportion to occupancy of the structure by elderly or 
 17.18  handicapped persons or low and moderate income families as 
 17.19  defined in the applicable laws unless construction of the 
 17.20  structure had been commenced prior to January 1, 1984; or the 
 17.21  project had been approved by the governing body of the 
 17.22  municipality in which it is located prior to June 30, 1983; or 
 17.23  financing of the project had been approved by a federal or state 
 17.24  agency prior to June 30, 1983.  For those properties, 4c or 4d 
 17.25  classification is available only for those units meeting the 
 17.26  requirements of section 273.1318. 
 17.27     Classification under this clause is only available to 
 17.28  property of a nonprofit or limited dividend entity. 
 17.29     In the case of a structure financed or refinanced under any 
 17.30  federal or state mortgage insurance or direct loan program 
 17.31  exclusively for housing for the elderly or for housing for the 
 17.32  handicapped, a unit shall be considered occupied so long as it 
 17.33  is actually occupied by an elderly or handicapped person or, if 
 17.34  vacant, is held for rental to an elderly or handicapped person. 
 17.35     (2) For taxes payable in 1992, 1993, and 1994, only, 
 17.36  buildings and appurtenances, together with the land upon which 
 18.1   they are located, leased by the occupant under the community 
 18.2   lending model lease-purchase mortgage loan program administered 
 18.3   by the Federal National Mortgage Association, provided the 
 18.4   occupant's income is no greater than 60 percent of the county or 
 18.5   area median income, adjusted for family size and the building 
 18.6   consists of existing single family or duplex housing.  The lease 
 18.7   agreement must provide for a portion of the lease payment to be 
 18.8   escrowed as a nonrefundable down payment on the housing.  To 
 18.9   qualify under this clause, the taxpayer must apply to the county 
 18.10  assessor by May 30 of each year.  The application must be 
 18.11  accompanied by an affidavit or other proof required by the 
 18.12  assessor to determine qualification under this clause. 
 18.13     (3) Qualifying buildings and appurtenances, together with 
 18.14  the land upon which they are located, leased for a period of up 
 18.15  to five years by the occupant under a lease-purchase program 
 18.16  administered by the Minnesota housing finance agency or a 
 18.17  housing and redevelopment authority authorized under sections 
 18.18  469.001 to 469.047, provided the occupant's income is no greater 
 18.19  than 80 percent of the county or area median income, adjusted 
 18.20  for family size, and the building consists of two or less 
 18.21  dwelling units.  The lease agreement must provide for a portion 
 18.22  of the lease payment to be escrowed as a nonrefundable down 
 18.23  payment on the housing.  The administering agency shall verify 
 18.24  the occupants income eligibility and certify to the county 
 18.25  assessor that the occupant meets the income criteria under this 
 18.26  paragraph.  To qualify under this clause, the taxpayer must 
 18.27  apply to the county assessor by May 30 of each year.  For 
 18.28  purposes of this section, "qualifying buildings and 
 18.29  appurtenances" shall be defined as one or two unit residential 
 18.30  buildings which are unoccupied and have been abandoned and 
 18.31  boarded for at least six months. 
 18.32     Class 4d property has a class rate of two 1.7 percent of 
 18.33  market value except that property classified under 
 18.34  clause (3) (2), shall have the same class rate as class 1a 
 18.35  property. 
 18.36     (e) Residential rental property that would otherwise be 
 19.1   assessed as class 4 property under paragraph (a); paragraph (b), 
 19.2   clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 19.3   (4), is assessed at the class rate applicable to it under 
 19.4   Minnesota Statutes 1988, section 273.13, if it is found to be a 
 19.5   substandard building under section 273.1316.  Residential rental 
 19.6   property that would otherwise be assessed as class 4 property 
 19.7   under paragraph (d) is assessed at 2.3 two percent of market 
 19.8   value if it is found to be a substandard building under section 
 19.9   273.1316. 
 19.10     (f) Class 4e property consists of the residential portion 
 19.11  of any structure located within a city that was converted from 
 19.12  nonresidential use to residential use, provided that: 
 19.13     (1) the structure had formerly been used as a warehouse; 
 19.14     (2) the structure was originally constructed prior to 1940; 
 19.15     (3) the conversion was done after December 31, 1995, but 
 19.16  before January 1, 2003; and 
 19.17     (4) the conversion involved an investment of at least 
 19.18  $25,000 per residential unit. 
 19.19     Class 4e property has a class rate of 2.3 1.85 percent of 
 19.20  market value for taxes payable in 1998, 1.8 percent of market 
 19.21  value for taxes payable in 1999, and 1.75 percent of market 
 19.22  value for taxes payable in 2000, provided that a structure is 
 19.23  eligible for class 4e classification only in the 12 assessment 
 19.24  years immediately following the conversion. 
 19.25     Sec. 5.  Minnesota Statutes 1996, section 273.13, 
 19.26  subdivision 31, is amended to read: 
 19.27     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 19.28     (1) tools, implements, and machinery of an electric 
 19.29  generating, transmission, or distribution system or a pipeline 
 19.30  system transporting or distributing water, gas, crude oil, or 
 19.31  petroleum products or mains and pipes used in the distribution 
 19.32  of steam or hot or chilled water for heating or cooling 
 19.33  buildings, which are fixtures; 
 19.34     (2) unmined iron ore and low-grade iron-bearing formations 
 19.35  as defined in section 273.14; and 
 19.36     (3) all other property not otherwise classified. 
 20.1      Class 5 property has a class rate of 5.06 3.35 percent of 
 20.2   market value for taxes payable in 1998, 3.25 percent of market 
 20.3   value for taxes payable in 1999, and 3.2 percent of market value 
 20.4   for taxes payable in 2000. 
 20.5      Sec. 6.  [TIF GRANTS; APPROPRIATIONS.] 
 20.6      (a) The commissioner of revenue shall pay grants to 
 20.7   municipalities, as defined in Minnesota Statutes, section 
 20.8   469.174, subdivision 6, for deficits in tax increment financing 
 20.9   districts caused by the changes in class rates under this 
 20.10  article.  Municipalities must submit applications for the grants 
 20.11  in a form prescribed by the commissioner by no later than March 
 20.12  1 for taxes payable during the calendar year.  The maximum grant 
 20.13  equals the lesser of: 
 20.14     (1) the reduction in the tax increment financing district's 
 20.15  revenues derived from increment resulting from the class rate 
 20.16  reductions under this article; and 
 20.17     (2) the amount by which the municipality's total available 
 20.18  tax increments, including those from previous years, are less 
 20.19  than the amount due during the calendar year to pay bonds issued 
 20.20  and sold before and binding contracts entered into before May 
 20.21  19, 1997.  
 20.22     If the total applications for grants exceed the amount 
 20.23  available under the appropriation, the commissioner shall 
 20.24  proportionately reduce the grant for each municipality.  These 
 20.25  grants are available for calendar years 1998, 1999, and 2000. 
 20.26     (b) $6,500,000 is appropriated in fiscal year 1999 to the 
 20.27  commissioner of revenue for purposes of this section.  
 20.28  $5,000,000 is appropriated in fiscal year 2000 to the 
 20.29  commissioner of revenue for purposes of this section.  
 20.30  $5,000,000 is appropriated in fiscal year 2001 to the 
 20.31  commissioner of revenue for purposes of this section.  These 
 20.32  appropriations do not cancel until June 30, 2001. 
 20.33     Sec. 7.  [REPEALER.] 
 20.34     Minnesota Statutes 1996, sections 273.13, subdivision 32; 
 20.35  and 473.3915, are repealed. 
 20.36     Sec. 8.  [EFFECTIVE DATES.] 
 21.1      Sections 1 to 5 and 7 are effective for taxes payable in 
 21.2   1998, 1999, and 2000.  Section 6 is effective for grants made in 
 21.3   calendar year 1998, 1999, and 2000. 
 21.4                              ARTICLE 2 
 21.5                   EDUCATION LEVY, AID, AND CREDIT 
 21.6      Section 1.  [273.1382] [EDUCATION HOMESTEAD CREDIT.] 
 21.7      Subdivision 1.  [EDUCATION HOMESTEAD CREDIT.] Each year, 
 21.8   beginning with property taxes payable in 1998, the respective 
 21.9   county auditors shall determine the local tax rate for each 
 21.10  school district for the general education levy certified under 
 21.11  section 124A.23, subdivision 2 or 3.  That rate shall be the 
 21.12  general education homestead credit local tax rate for the 
 21.13  district.  The auditor shall then determine a general education 
 21.14  homestead credit for each homestead within the county by 
 21.15  multiplying the general education homestead credit local tax 
 21.16  rate times the net tax capacity of the homestead for the taxes 
 21.17  payable year times 50 percent.  The amount of general education 
 21.18  homestead credit for a homestead is limited to $310. 
 21.19     Subd. 2.  [CREDIT REIMBURSEMENTS.] (a) The commissioner of 
 21.20  revenue shall determine the tax reductions allowed under this 
 21.21  section for each taxes payable year, and for each school 
 21.22  district based upon a review of the abstracts of tax lists 
 21.23  submitted by the county auditors under section 275.29, and from 
 21.24  any other information which the commissioner deems relevant.  
 21.25  The commissioner of revenue shall generally compute the tax 
 21.26  reductions at the unique taxing jurisdiction level, however the 
 21.27  commissioner may compute the tax reductions at a higher 
 21.28  geographic level if that would have a negligible impact, or if 
 21.29  changes in the composition of unique taxing jurisdictions do not 
 21.30  permit computation at the unique taxing jurisdiction level.  The 
 21.31  commissioner's determinations under this paragraph are not rules.
 21.32     (b) The commissioner of revenue shall certify the total of 
 21.33  the tax reductions granted under this section for each taxes 
 21.34  payable year within each school district to the commissioner of 
 21.35  children, families, and learning after July 1 and on or before 
 21.36  August 1 of the taxes payable year.  The commissioner of 
 22.1   children, families, and learning shall reimburse each affected 
 22.2   school district for the amount of the property tax reductions 
 22.3   allowed under this section as provided in section 273.1392.  The 
 22.4   commissioner of children, families, and learning shall treat the 
 22.5   reimbursement payments as entitlements for the same state fiscal 
 22.6   year as certified, including with each district's initial 
 22.7   payment all amounts that would have been paid up to that date, 
 22.8   computed as if 90 percent of the annual reimbursement amount for 
 22.9   the district were being paid one-twelfth in each month of the 
 22.10  fiscal year.  
 22.11     Subd. 3.  [PROPERTY TAX STATEMENTS.] The credit amount 
 22.12  under this section for each homestead shall reduce the amount of 
 22.13  property taxes otherwise payable to the county treasurer in that 
 22.14  payable year, and must be separately stated on the property tax 
 22.15  statement as a reduction, which reduction shall be identified as 
 22.16  "general education homestead credit."  The tax statement must 
 22.17  indicate that the credit amount under this section reduces the 
 22.18  "state general education tax" on the property.  
 22.19     Subd. 4.  [APPROPRIATION.] An amount sufficient to make the 
 22.20  payments required by this section is annually appropriated from 
 22.21  the general fund to the commissioner of children, families, and 
 22.22  learning.  
 22.23     Sec. 2.  Minnesota Statutes 1996, section 273.1393, is 
 22.24  amended to read: 
 22.25     273.1393 [COMPUTATION OF NET PROPERTY TAXES.] 
 22.26     Notwithstanding any other provisions to the contrary, "net" 
 22.27  property taxes are determined by subtracting the credits in the 
 22.28  order listed from the gross tax:  
 22.29     (1) disaster credit as provided in section 273.123; 
 22.30     (2) powerline credit as provided in section 273.42; 
 22.31     (3) agricultural preserves credit as provided in section 
 22.32  473H.10; 
 22.33     (4) enterprise zone credit as provided in section 469.171; 
 22.34     (5) disparity reduction credit; 
 22.35     (6) conservation tax credit as provided in section 273.119; 
 22.36     (7) taconite homestead credit as provided in section 
 23.1   273.135; and 
 23.2      (8) supplemental homestead credit as provided in section 
 23.3   273.1391; and 
 23.4      (9) general education homestead credit as provided in 
 23.5   section 273.1382.  
 23.6      The combination of all property tax credits must not exceed 
 23.7   the gross tax amount.  
 23.8      Sec. 3.  Minnesota Statutes 1996, section 477A.013, 
 23.9   subdivision 9, is amended to read: 
 23.10     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 23.11  1994 1999 and thereafter, each city shall receive an aid 
 23.12  distribution equal to the sum of (1) the city formula aid under 
 23.13  subdivision 8 for aid payable in 1998, and (2) its city aid base 
 23.14  as determined for aid payable in the prior year and as reduced 
 23.15  under paragraph (d). 
 23.16     (b) The percentage increase for a first class city in 
 23.17  calendar year 1995 and thereafter shall not exceed the 
 23.18  percentage increase in the sum of the aid to all cities under 
 23.19  this section in the current calendar year compared to the sum of 
 23.20  the aid to all cities in the previous year. 
 23.21     (c) The total aid for any city, except a first class city, 
 23.22  shall not exceed the sum of (1) ten percent of the city's net 
 23.23  levy for the year prior to the aid distribution plus (2) its 
 23.24  total aid in the previous year before any increases or decreases 
 23.25  under sections 16A.711, subdivision 5, and 477A.0132. 
 23.26     (d) Notwithstanding paragraph (c), in 1995 only, for cities 
 23.27  which in 1992 or 1993 transferred an amount from governmental 
 23.28  funds to their sewer and water fund in an amount greater than 
 23.29  their net levy for taxes payable in the year in which the 
 23.30  transfer occurred, the total aid shall not exceed the sum of (1) 
 23.31  20 percent of the city's net levy for the year prior to the aid 
 23.32  distribution plus (2) its total aid in the previous year before 
 23.33  any increases or decreases under sections 16A.711, subdivision 
 23.34  5, and 477A.0132.  For aid payable in fiscal year 2000, and for 
 23.35  aid payable in each fiscal year thereafter, the city aid base 
 23.36  amount of each city is reduced by an amount equal to five 
 24.1   percent of its aid base for aid payable in the previous fiscal 
 24.2   year.  The amount of the appropriation in section 477A.03, 
 24.3   subdivision 2, is reduced for each aid payable year by the sum 
 24.4   of the aid base reductions.  The amount by which the 
 24.5   appropriation in section 477A.03, subdivision 2, is reduced for 
 24.6   a particular fiscal year is hereby transferred to the 
 24.7   commissioner of children, families, and learning and dedicated 
 24.8   to funding the general education aid increases provided in 
 24.9   section 6. 
 24.10     Sec. 4.  Minnesota Statutes 1996, section 477A.03, 
 24.11  subdivision 2, is amended to read: 
 24.12     Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
 24.13  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 24.14  annually appropriated from the general fund to the commissioner 
 24.15  of revenue.  For aids payable in 1996 and thereafter, the total 
 24.16  aids paid under sections 477A.013, subdivision 9, and section 
 24.17  477A.0122 are the amounts certified to be paid in the previous 
 24.18  year, adjusted for inflation as provided under subdivision 3.  
 24.19  Aid payments to counties under section 477A.0121 are limited to 
 24.20  $20,265,000 in 1996.  Aid payments to counties under section 
 24.21  477A.0121 are limited to $27,571,625 in 1997.  For aid payable 
 24.22  in 1998 and thereafter, the total aids paid under section 
 24.23  477A.0121 are the amounts certified to be paid in the previous 
 24.24  year, adjusted for inflation as provided under subdivision 
 24.25  3.  For aid payable in fiscal year 2000 and thereafter, the 
 24.26  total amount appropriated for the aids under section 477A.013, 
 24.27  subdivision 9, is the total amount of aids determined under that 
 24.28  section for payment in the previous year less the reduction 
 24.29  determined under section 477A.013, subdivision 9, paragraph (d). 
 24.30     Sec. 5.  [GENERAL EDUCATION LEVY INCREASES.] 
 24.31     Regardless of any law to the contrary, the dollar amount 
 24.32  contained in Minnesota Statutes, section 124A.23, subdivision 1, 
 24.33  may not be increased with regard to fiscal year 1998 or any 
 24.34  later fiscal year, either by an amendment of that section or by 
 24.35  the enactment of, or change to, another statute or law, unless 
 24.36  such increase is approved by a 60 percent vote in each house of 
 25.1   the legislature. 
 25.2      Sec. 6.  [GENERAL EDUCATION LEVY REDUCTION.] 
 25.3      For fiscal year 2000, general education aid under Minnesota 
 25.4   Statutes, section 124A.23, subdivision 4, is increased by 
 25.5   $60,600,000 over the general education aid expenditure for 
 25.6   fiscal year 1999.  For fiscal year 2001, general education aid 
 25.7   is increased by $56,100,000 over the general education aid 
 25.8   expenditure for fiscal year 2000.  The general education aid 
 25.9   increases under this provision must be used to decrease the 
 25.10  general education levy under Minnesota Statutes, section 
 25.11  124A.23, subdivision 1, by $60,600,000 for taxes payable in 
 25.12  1999, and by $56,100,000 for taxes payable in 2000. 
 25.13     Sec. 7.  [REPEALER.] 
 25.14     Minnesota Statutes 1996, section 477A.011, subdivision 37, 
 25.15  is repealed.  
 25.16     Sec. 8.  [EFFECTIVE DATE.] 
 25.17     Sections 1 and 2 are effective for taxes payable in 1998 
 25.18  and thereafter, and for credit reimbursement payments to school 
 25.19  districts in fiscal year 1999 and thereafter.  Sections 3, 4, 
 25.20  and 7 are effective for fiscal year 2000 and thereafter.  
 25.21  Section 5 is effective the day following final enactment.  
 25.22  Section 6 is effective for fiscal years 2000 and 2001. 
 25.23                             ARTICLE 3 
 25.24                         TRUTH IN BUDGETING 
 25.25     Section 1.  [275.0641] [BUDGET HEARINGS; NOTICE.] 
 25.26     Subdivision 1.  [PUBLICATION OF EXPENDITURE DATA.] 
 25.27  Notwithstanding any other law or charter to the contrary, on or 
 25.28  before May 25, each taxing authority shall publish prior year 
 25.29  and anticipated current year expenditure information for the 
 25.30  taxing authority broken down by categories of service.  The 
 25.31  service categories for the expenditure information shall be 
 25.32  determined by the commissioner of revenue, based on the 
 25.33  governmental expenditure categories found in the state auditor's 
 25.34  publications of revenues and expenditures for counties and 
 25.35  cities.  For purposes of this section, "taxing authority" 
 25.36  includes all counties, home rule charter and statutory cities, 
 26.1   school districts, and metropolitan special taxing districts as 
 26.2   defined in section 275.065, subdivision 3.  It excludes towns, 
 26.3   all other special taxing districts, and the school districts 
 26.4   deemed to be special taxing districts by section 275.065, 
 26.5   subdivision 1.  For a taxing authority located in two or more 
 26.6   counties, the publication of prior year and anticipated current 
 26.7   year expenditure data is to be made in each county in which the 
 26.8   taxing authority is located. 
 26.9      Subd. 2.  [REPORT OF FIRST BUDGET HEARING.] At the same 
 26.10  time as expenditure data is published under subdivision 1, each 
 26.11  taxing authority shall also publish the date, time, and location 
 26.12  for its first budget hearing for the next year.  If the first 
 26.13  budget hearing for the next year is to be held prior to May 30 
 26.14  of the current levy year, the taxing authority shall publish the 
 26.15  date, time, and location for the earliest budget hearing for the 
 26.16  next year to be held after May 29 of the current levy year. 
 26.17     Subd. 3.  [PUBLICATION.] (a) The publication required under 
 26.18  this section must include all the information required under 
 26.19  this section and must be at least one-eighth page in size of a 
 26.20  standard-size or a tabloid-size newspaper.  It must not be 
 26.21  placed in the part of the newspaper where legal notices and 
 26.22  classified advertisements appear, and it must be published in an 
 26.23  official newspaper of general circulation in the taxing 
 26.24  authority.  The newspaper selected must be one of general 
 26.25  interest and readership in the community, and not one of limited 
 26.26  subject matter.  The publication must appear in a newspaper that 
 26.27  is published at least once per week.  For purposes of this 
 26.28  section, the metropolitan special taxing districts must publish 
 26.29  only in the Minneapolis Star and Tribune and the Saint Paul 
 26.30  Pioneer Press.  
 26.31     (b) The published item must be entitled:  "NOTICE OF 
 26.32  CURRENT BUDGETS AND BUDGET HEARINGS."  The commissioner of 
 26.33  revenue, subject to the approval of the chairs of the house and 
 26.34  senate tax committees, will prescribe all other matters of form 
 26.35  and content.  
 26.36     Subd. 4.  [STATE AUDITOR'S DUTIES.] As an aid to counties 
 27.1   and cities in seeing how their expenditure information is to be 
 27.2   published, the state auditor shall provide by March 15 each year 
 27.3   to each county and city a breakdown of the county's or city's 
 27.4   expenditures by the service categories listed on the budget 
 27.5   notice prescribed by the commissioner of revenue.  The breakdown 
 27.6   of expenditure data shall be for the most recent year available 
 27.7   in the state auditor's database.  In addition, the state auditor 
 27.8   shall provide assistance to counties, cities, and metropolitan 
 27.9   special taxing districts concerning the breakdown of their prior 
 27.10  year and anticipated current year expenditure data that is to be 
 27.11  published. 
 27.12     Subd. 5.  [DUTIES OF COMMISSIONER OF CHILDREN, FAMILIES, 
 27.13  AND LEARNING.] As an aid to school districts in seeing how their 
 27.14  expenditure information is to be published, the commissioner of 
 27.15  children, families, and learning shall provide by March 15 each 
 27.16  year to each school district a breakdown of the school 
 27.17  district's expenditures by the service categories listed on the 
 27.18  budget notice prescribed by the commissioner of revenue.  The 
 27.19  breakdown of expenditure data shall be for the most recent year 
 27.20  available in the department of children, families, and 
 27.21  learning's database.  In addition, the commissioner of children, 
 27.22  families, and learning shall provide assistance to school 
 27.23  districts concerning the breakdown of their prior year and 
 27.24  anticipated current year expenditure data that is to be 
 27.25  published. 
 27.26     Subd. 6.  [COMMISSIONER OF REVENUE'S DUTIES.] The 
 27.27  commissioner of revenue shall prescribe the form of the notice 
 27.28  of current budgets and budget hearings to be published by each 
 27.29  taxing authority.  On or before March 1 of 1998 and of each year 
 27.30  thereafter, the commissioner of revenue shall send to each 
 27.31  taxing authority, and to the state auditor and the commissioner 
 27.32  of children, families, and learning, the prescribed form of the 
 27.33  notice to be used in the current year.  On or before April 15 
 27.34  the commissioner of revenue shall supply each taxing authority 
 27.35  other than a school district with the total number of households 
 27.36  for that taxing authority based on the most recent household 
 28.1   information available from the state demographer.  In addition, 
 28.2   on or before April 15 the commissioner of revenue shall supply 
 28.3   each school district with the total number of pupils for that 
 28.4   district for the most recent school year available from the 
 28.5   department of children, families, and learning. 
 28.6      Subd. 7.  [CERTIFICATION OF COMPLIANCE.] At, or before, the 
 28.7   time the taxing authority certifies its tax levy under section 
 28.8   275.07, it shall certify to the commissioner of revenue its 
 28.9   compliance with this section.  The certification must contain 
 28.10  the information required by the commissioner of revenue to 
 28.11  determine compliance with this section.  If the commissioner 
 28.12  determines that the taxing authority has failed to substantially 
 28.13  comply with the requirements of this section, the commissioner 
 28.14  of revenue shall notify the county auditor.  The decision of the 
 28.15  commissioner is final.  When fixing rates under section 275.08 
 28.16  for a taxing authority that has not complied with this section, 
 28.17  the county auditor must use the taxing authority's previous 
 28.18  year's levy, plus any additional amounts necessary to pay 
 28.19  principal and interest on general obligation bonds of the taxing 
 28.20  authority for which its taxing powers have been pledged if the 
 28.21  bonds were issued before May 19, 1997. 
 28.22     Sec. 2.  Minnesota Statutes 1996, section 275.065, 
 28.23  subdivision 3, is amended to read: 
 28.24     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 28.25  county auditor shall prepare and the county treasurer shall 
 28.26  deliver after November 10 and on or before November 24 each 
 28.27  year, by first class mail to each taxpayer at the address listed 
 28.28  on the county's current year's assessment roll, a notice of 
 28.29  proposed property taxes and, in the case of a town, final 
 28.30  property taxes.  
 28.31     (b) The commissioner of revenue shall prescribe the form of 
 28.32  the notice. 
 28.33     (c) The notice must inform taxpayers that it contains the 
 28.34  amount of property taxes each taxing authority other than a town 
 28.35  proposes to collect for taxes payable the following year and, 
 28.36  for a town, the amount of its final levy.  It must clearly state 
 29.1   that each taxing authority, including regional library districts 
 29.2   established under section 134.201, and including the 
 29.3   metropolitan taxing districts as defined in paragraph (i), but 
 29.4   excluding all other special taxing districts, school districts, 
 29.5   and towns, will hold a public meeting to receive public 
 29.6   testimony on the proposed budget and proposed or final property 
 29.7   tax levy, or, in case of a school district, on the current 
 29.8   budget and proposed property tax levy.  It must clearly state 
 29.9   the time and place of each taxing authority's meeting and an 
 29.10  address where comments will be received by mail.  
 29.11     (d) The notice must state for each parcel the following 
 29.12  items listed in this sequential order: 
 29.13     (1) the market value of the property as determined under 
 29.14  section 273.11, and used for computing property taxes payable in 
 29.15  the following year and for taxes payable in the current year; 
 29.16  and, in the case of residential property, whether the property 
 29.17  is classified as homestead or nonhomestead.  The notice must 
 29.18  clearly inform taxpayers of the years to which the market values 
 29.19  apply and that the values are final values; 
 29.20     (2) the property tax amount for the following year based on 
 29.21  each taxing authority's constant spending levy amount.  This 
 29.22  amount must be listed by county, city or town, school district, 
 29.23  the state education tax, the total of the special taxing 
 29.24  districts, the tax increment tax, if any, the fiscal disparities 
 29.25  tax, if any, and a total of all taxing authorities.  The 
 29.26  reduction in the state education tax for the parcel resulting 
 29.27  from the general education homestead credit must also be shown; 
 29.28     (3) the proposed property tax amount for the following year 
 29.29  by for the county, the city or town, the school district 
 29.30  excess referenda levy, remaining school district levy, regional 
 29.31  library district, if in existence, the total of the metropolitan 
 29.32  special taxing districts as defined in paragraph (i) and, the 
 29.33  state education tax, the sum of the remaining special taxing 
 29.34  districts, and as a total of all the taxing authorities, 
 29.35  including all special taxing districts, the proposed or, for.  
 29.36  For a town, the proposed amount is its final net tax on the 
 30.1   property for taxes payable the following year and the actual tax 
 30.2   for taxes payable the current year.  If a school district has 
 30.3   certified under section 124A.03, subdivision 2, that a 
 30.4   referendum will be held in the school district at the November 
 30.5   general election, the county auditor must note next to the 
 30.6   school district's proposed amount that a referendum is pending 
 30.7   and that, if approved by the voters, the tax amount may be 
 30.8   higher than shown on the notice.  For the purposes of this 
 30.9   subdivision, "school district excess referenda levy" means 
 30.10  school district taxes for operating purposes approved at 
 30.11  referendums, including those taxes based on net tax capacity as 
 30.12  well as those based on market value.  "School district excess 
 30.13  referenda levy" does not include school district taxes for 
 30.14  capital expenditures approved at referendums or school district 
 30.15  taxes to pay for the debt service on bonds approved at 
 30.16  referenda.  In the case of the city of Minneapolis, the levy for 
 30.17  the Minneapolis library board and the levy for Minneapolis park 
 30.18  and recreation shall be listed separately from the remaining 
 30.19  amount of the city's levy.  In the case of a parcel where tax 
 30.20  increment or the fiscal disparities areawide tax under chapter 
 30.21  276A or 473F applies, the proposed tax levy on the captured 
 30.22  value or the proposed tax levy on the tax capacity subject to 
 30.23  the areawide tax must each be stated separately and not included 
 30.24  in the sum of the special taxing districts.  The reduction in 
 30.25  the state education tax for the parcel resulting from the 
 30.26  general education homestead credit must also be shown; and 
 30.27     (3) (4) the increase or decrease in between the amounts in 
 30.28  clause clauses (2) from taxes payable in the current year to 
 30.29  proposed or, for a town, final taxes payable the following year, 
 30.30  and (3) expressed as a dollar amount and as a percentage; and 
 30.31     (5) the total actual taxes for the current year for all 
 30.32  taxing authorities for the parcel. 
 30.33     (e) The notice must clearly state that the proposed or 
 30.34  final taxes do not include the following: 
 30.35     (1) special assessments; 
 30.36     (2) levies approved by the voters after the date the 
 31.1   proposed taxes are certified, including bond referenda, school 
 31.2   district levy referenda, and levy limit increase referenda; 
 31.3      (3) amounts necessary to pay cleanup or other costs due to 
 31.4   a natural disaster occurring after the date the proposed taxes 
 31.5   are certified; 
 31.6      (4) amounts necessary to pay tort judgments against the 
 31.7   taxing authority that become final after the date the proposed 
 31.8   taxes are certified; and 
 31.9      (5) the contamination tax imposed on properties which 
 31.10  received market value reductions for contamination. 
 31.11     (f) Except as provided in subdivision 7, failure of the 
 31.12  county auditor to prepare or the county treasurer to deliver the 
 31.13  notice as required in this section does not invalidate the 
 31.14  proposed or final tax levy or the taxes payable pursuant to the 
 31.15  tax levy. 
 31.16     (g) If the notice the taxpayer receives under this section 
 31.17  lists the property as nonhomestead and the homeowner provides 
 31.18  satisfactory documentation to the county assessor that the 
 31.19  property is owned and used as the owner's homestead, the 
 31.20  assessor shall reclassify the property to homestead for taxes 
 31.21  payable in the following year. 
 31.22     (h) In the case of class 4 residential property used as a 
 31.23  residence for lease or rental periods of 30 days or more, the 
 31.24  taxpayer must either: 
 31.25     (1) mail or deliver a copy of the notice of proposed 
 31.26  property taxes to each tenant, renter, or lessee; or 
 31.27     (2) post a copy of the notice in a conspicuous place on the 
 31.28  premises of the property.  
 31.29     The notice must be mailed or posted by the taxpayer by 
 31.30  November 27 or within three days of receipt of the notice, 
 31.31  whichever is later.  A taxpayer may notify the county treasurer 
 31.32  of the address of the taxpayer, agent, caretaker, or manager of 
 31.33  the premises to which the notice must be mailed in order to 
 31.34  fulfill the requirements of this paragraph. 
 31.35     (i) For purposes of this subdivision, subdivisions 5a and 
 31.36  6, "metropolitan special taxing districts" means the following 
 32.1   taxing districts in the seven-county metropolitan area that levy 
 32.2   a property tax for any of the specified purposes listed below: 
 32.3      (1) metropolitan council under section 473.132, 473.167, 
 32.4   473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 32.5      (2) metropolitan airports commission under section 473.667, 
 32.6   473.671, or 473.672; and 
 32.7      (3) metropolitan mosquito control commission under section 
 32.8   473.711. 
 32.9      For purposes of this section, any levies made by the 
 32.10  regional rail authorities in the county of Anoka, Carver, 
 32.11  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 32.12  398A shall be included with the appropriate county's levy and 
 32.13  shall be discussed at that county's public hearing. 
 32.14     (j) For taxes levied in 1996, payable in 1997 only, in the 
 32.15  case of a statutory or home rule charter city or town that 
 32.16  exercises the local levy option provided in section 473.388, 
 32.17  subdivision 7, the notice of its proposed taxes may include a 
 32.18  statement of the amount by which its proposed tax increase for 
 32.19  taxes payable in 1997 is attributable to its exercise of that 
 32.20  option, together with a statement that the levy of the 
 32.21  metropolitan council was decreased by a similar amount because 
 32.22  of the exercise of that option. 
 32.23     Sec. 3.  Minnesota Statutes 1996, section 275.065, is 
 32.24  amended by adding a subdivision to read: 
 32.25     Subd. 3a.  [CONSTANT SPENDING LEVY AMOUNT.] (a) For 
 32.26  purposes of this section, "constant spending levy amount" for a 
 32.27  county, school district, city, town, or special taxing district 
 32.28  means the property tax levy that the taxing authority would need 
 32.29  to levy so that its levy, including its fiscal disparities 
 32.30  distribution levy under section 276A.06, subdivision 3, clause 
 32.31  (a), or 473F.08, subdivision 3, clause (a), would remain 
 32.32  constant from the current year to the proposed year. 
 32.33     (b) For purposes of the state education tax, "constant 
 32.34  spending levy amount" means the state general education tax that 
 32.35  would be computed for the property using the current year's 
 32.36  state general education tax rate applicable to the property and 
 33.1   the proposed year's taxable value. 
 33.2      Sec. 4.  Minnesota Statutes 1996, section 275.065, 
 33.3   subdivision 5a, is amended to read: 
 33.4      Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
 33.5   population of more than 2,500, county, a metropolitan special 
 33.6   taxing district as defined in subdivision 3, paragraph (i), or a 
 33.7   regional library district established under section 134.201, or 
 33.8   school district shall advertise in a newspaper a notice of its 
 33.9   intent to adopt a budget and property tax levy or, in the case 
 33.10  of a school district, to review its current budget and 
 33.11  proposed for property taxes payable in the following year, at a 
 33.12  public hearing.  The notice must be published not less than two 
 33.13  business days nor more than six business days before the hearing.
 33.14     The advertisement must be at least one-eighth page in size 
 33.15  of a standard-size or a tabloid-size newspaper.  The 
 33.16  advertisement must not be placed in the part of the newspaper 
 33.17  where legal notices and classified advertisements appear.  The 
 33.18  advertisement must be published in an official newspaper of 
 33.19  general circulation in the taxing authority.  The newspaper 
 33.20  selected must be one of general interest and readership in the 
 33.21  community, and not one of limited subject matter.  The 
 33.22  advertisement must appear in a newspaper that is published at 
 33.23  least once per week.  
 33.24     For purposes of this section, the metropolitan special 
 33.25  taxing district's advertisement must only be published in the 
 33.26  Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
 33.27     (b) The advertisement for metropolitan special taxing 
 33.28  districts and regional library districts must be in the 
 33.29  following form, except that the notice for a school district may 
 33.30  include references to the current budget in regard to proposed 
 33.31  property taxes. 
 33.32                             "NOTICE OF
 33.33                      PROPOSED PROPERTY TAXES
 33.34            (City/County/School District/Metropolitan
 33.35                  Special Taxing District/Regional
 33.36                   Library District) of .........
 34.1   The governing body of ........ will soon hold budget hearings 
 34.2   and vote on the property taxes for (city/county/metropolitan 
 34.3   special taxing district/regional library district services that 
 34.4   will be provided in 199_/school district services that will be 
 34.5   provided in 199_ and 199_ (year)). 
 34.6                      NOTICE OF PUBLIC HEARING:
 34.7   All concerned citizens are invited to attend a public hearing 
 34.8   and express their opinions on the proposed (city/county/school 
 34.9   district/metropolitan special taxing district/regional library 
 34.10  district) budget and property taxes, or in the case of a school 
 34.11  district, its current budget and proposed property taxes, 
 34.12  payable in the following year.  The hearing will be held on 
 34.13  (Month/Day/Year) at (Time) at (Location, Address)." 
 34.14     (c) The advertisement for cities and counties must be in 
 34.15  the following form. 
 34.16                       "NOTICE OF PROPOSED
 34.17                 TOTAL BUDGET AND PROPERTY TAXES
 34.18  The (city/county) governing body or board of commissioners will 
 34.19  hold a public hearing to discuss the budget and to vote on the 
 34.20  amount of property taxes to collect for services the 
 34.21  (city/county) will provide in (year). 
 34.22     
 34.23  SPENDING:  The total budget amounts below compare 
 34.24  (city's/county's) (year) total actual budget with the amount the 
 34.25  (city/county) proposes to spend in (year). 
 34.26     
 34.27  (Year) Total          Proposed (Year)          Change from
 34.28  Actual Budget             Budget               (Year)-(Year)
 34.29     
 34.30    $.......              $.......                ...%
 34.31     
 34.32  TAXES:  The property tax amounts below compare that portion of 
 34.33  the current budget levied in property taxes in (city/county) for 
 34.34  (year) with the property taxes the (city/county) proposes to 
 34.35  collect in (year). 
 34.36     
 35.1   (Year) Property       Proposed (Year)          Change from
 35.2       Taxes              Property Taxes         (Year)-(Year)
 35.3      
 35.4     $.......              $.......                ...% 
 35.5      
 35.6                     ATTEND THE PUBLIC HEARING
 35.7   All (city/county) residents are invited to attend the public 
 35.8   hearing of the (city/county) to express your opinions on the 
 35.9   budget and the proposed amount of (year) property taxes.  The 
 35.10  hearing will be held on: 
 35.11                      (Month/Day/Year/Time)
 35.12                        (Location/Address)
 35.13  If the discussion of the budget cannot be completed, a time and 
 35.14  place for continuing the discussion will be announced at the 
 35.15  hearing.  You are also invited to send your written comments to: 
 35.16                          (City/County)
 35.17                       (Location/Address)"
 35.18     (d) For purposes of this subdivision, the budget amounts 
 35.19  listed on the advertisement mean: 
 35.20     (1) for cities, the total government fund expenditures, as 
 35.21  defined by the state auditor under section 471.6965, less any 
 35.22  expenditures for improvements or services that are specially 
 35.23  assessed or charged under chapter 429, 430, 435, or the 
 35.24  provisions of any other law or charter; and 
 35.25     (2) for counties, the total government fund expenditures, 
 35.26  as defined by the state auditor under section 375.169, less any 
 35.27  expenditures for direct payments to recipients or providers for 
 35.28  the human service aids listed in section 273.1398, subdivision 
 35.29  1, paragraph (i). 
 35.30     (c) (e) A city with a population of over 500 but not more 
 35.31  than 2,500 must advertise by posted notice as defined in section 
 35.32  645.12, subdivision 1.  The advertisement must be posted at the 
 35.33  time provided in paragraph (a).  It must be in the form required 
 35.34  in paragraph (b). 
 35.35     (d) (f) For purposes of this subdivision, the population of 
 35.36  a city is the most recent population as determined by the state 
 36.1   demographer under section 4A.02. 
 36.2      (e) (g) The commissioner of revenue, subject to the 
 36.3   approval of the chairs of the house and senate tax committees, 
 36.4   shall prescribe the form and format of the advertisement. 
 36.5      (f) For calendar year 1993, each taxing authority required 
 36.6   to publish an advertisement must include on the advertisement a 
 36.7   statement that information on the increases or decreases of the 
 36.8   total budget, including employee and independent contractor 
 36.9   compensation in the prior year, current year, and proposed 
 36.10  budget year will be discussed at the hearing. 
 36.11     (g) Notwithstanding paragraph (f), for 1993, the 
 36.12  commissioner of revenue shall prescribe the form, format, and 
 36.13  content of an advertisement comparing current and proposed 
 36.14  expense budgets for the metropolitan council, the metropolitan 
 36.15  airports commission, and the metropolitan mosquito control 
 36.16  commission.  The expense budget must include occupancy, 
 36.17  personnel, contractual and capital improvement expenses.  The 
 36.18  form, format, and content of the advertisement must be approved 
 36.19  by the chairs of the house and senate tax committees prior to 
 36.20  publication. 
 36.21     Sec. 5.  Minnesota Statutes 1996, section 275.065, 
 36.22  subdivision 6, is amended to read: 
 36.23     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
 36.24  Between November 29 and December 20, the governing bodies of a 
 36.25  city that has a population over 500, county, metropolitan 
 36.26  special taxing districts as defined in subdivision 3, paragraph 
 36.27  (i), and regional library districts shall each hold a public 
 36.28  hearing to review, discuss, and seek public comment on its 
 36.29  current budget, and its final budget and property tax levy for 
 36.30  taxes payable in the following year, and the governing body of 
 36.31  the school district shall hold a public hearing to review its 
 36.32  current budget and proposed property tax levy for taxes payable 
 36.33  in the following year.  The metropolitan special taxing 
 36.34  districts shall be required to hold only a single joint public 
 36.35  hearing, the location of which will be determined by the 
 36.36  affected metropolitan agencies. 
 37.1      At a subsequent hearing, each county, school district, 
 37.2   city, and metropolitan special taxing district may amend its 
 37.3   proposed property tax levy and must adopt a final property tax 
 37.4   levy.  Each county, city, and metropolitan special taxing 
 37.5   district may also amend its proposed budget and must adopt a 
 37.6   final budget at the subsequent hearing.  A school district is 
 37.7   not required to adopt its final budget at the subsequent 
 37.8   hearing.  The subsequent hearing of a taxing authority must be 
 37.9   held on a date subsequent to the date of the taxing authority's 
 37.10  initial public hearing, or subsequent to the date of its 
 37.11  continuation hearing if a continuation hearing is held.  The 
 37.12  subsequent hearing may be held at a regularly scheduled board or 
 37.13  council meeting or at a special meeting scheduled for the 
 37.14  purposes of the subsequent hearing.  The subsequent hearing of a 
 37.15  taxing authority does not have to be coordinated by the county 
 37.16  auditor to prevent a conflict with an initial hearing, a 
 37.17  continuation hearing, or a subsequent hearing of any other 
 37.18  taxing authority.  All subsequent hearings must be held prior to 
 37.19  five working days after December 20 of the levy year. 
 37.20     The time and place of the subsequent hearing must be 
 37.21  announced at the initial public hearing or at the continuation 
 37.22  hearing. 
 37.23     The property tax levy certified under section 275.07 by a 
 37.24  city, county, metropolitan special taxing district, regional 
 37.25  library district, or school district must not exceed the 
 37.26  proposed levy determined under subdivision 1, except by an 
 37.27  amount up to the sum of the following amounts: 
 37.28     (1) the amount of a school district levy whose voters 
 37.29  approved a referendum to increase taxes under section 124.82, 
 37.30  subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 
 37.31  2, after the proposed levy was certified; 
 37.32     (2) the amount of a city or county levy approved by the 
 37.33  voters after the proposed levy was certified; 
 37.34     (3) the amount of a levy to pay principal and interest on 
 37.35  bonds approved by the voters under section 475.58 after the 
 37.36  proposed levy was certified; 
 38.1      (4) the amount of a levy to pay costs due to a natural 
 38.2   disaster occurring after the proposed levy was certified, if 
 38.3   that amount is approved by the commissioner of revenue under 
 38.4   subdivision 6a; 
 38.5      (5) the amount of a levy to pay tort judgments against a 
 38.6   taxing authority that become final after the proposed levy was 
 38.7   certified, if the amount is approved by the commissioner of 
 38.8   revenue under subdivision 6a; 
 38.9      (6) the amount of an increase in levy limits certified to 
 38.10  the taxing authority by the commissioner of children, families, 
 38.11  and learning or the commissioner of revenue after the proposed 
 38.12  levy was certified; and 
 38.13     (7) the amount required under section 124.755. 
 38.14     At the hearing under this subdivision, the percentage 
 38.15  increase in property taxes proposed by the taxing authority, if 
 38.16  any, and the specific purposes for which property tax revenues 
 38.17  are being increased must be discussed.  
 38.18     During the discussion, the governing body shall hear 
 38.19  comments regarding a proposed increase and explain the reasons 
 38.20  for the proposed increase.  The public shall be allowed to speak 
 38.21  and to ask questions.  At the subsequent hearing held as 
 38.22  provided in this subdivision, the governing body, other than the 
 38.23  governing body of a school district, shall adopt its final 
 38.24  property tax levy prior to adopting its final budget. 
 38.25     If the hearing is not completed on its scheduled date, the 
 38.26  taxing authority must announce, prior to adjournment of the 
 38.27  hearing, the date, time, and place for the continuation of the 
 38.28  hearing.  The continued hearing must be held at least five 
 38.29  business days but no more than 14 business days after the 
 38.30  original hearing. 
 38.31     The hearing must be held after 5:00 p.m. if scheduled on a 
 38.32  day other than Saturday.  No hearing may be held on a Sunday.  
 38.33  The governing body of a county shall hold a hearing on the 
 38.34  second Tuesday in December each year, and may hold additional 
 38.35  hearings on other dates before December 20 if necessary for the 
 38.36  convenience of county residents.  If the county needs a 
 39.1   continuation of its hearing, the continued hearing shall be held 
 39.2   on the third Tuesday in December.  If the third Tuesday in 
 39.3   December falls on December 21, the county's continuation hearing 
 39.4   shall be held on Monday, December 20.  The county auditor shall 
 39.5   provide for the coordination of hearing dates for all cities and 
 39.6   school districts within the county. 
 39.7      The metropolitan special taxing districts shall hold a 
 39.8   joint public hearing on the first Monday of December.  A 
 39.9   continuation hearing, if necessary, shall be held on the second 
 39.10  Monday of December. 
 39.11     By August 10, each school board and the board of the 
 39.12  regional library district shall certify to the county auditors 
 39.13  of the counties in which the school district or regional library 
 39.14  district is located the dates on which it elects to hold its 
 39.15  hearings and any continuations.  If a school board or regional 
 39.16  library district does not certify the dates by August 10, the 
 39.17  auditor will assign the hearing date.  The dates elected or 
 39.18  assigned must not conflict with the hearing dates of the county 
 39.19  or the metropolitan special taxing districts.  By August 20, the 
 39.20  county auditor shall notify the clerks of the cities within the 
 39.21  county of the dates on which school districts and regional 
 39.22  library districts have elected to hold their hearings.  At the 
 39.23  time a city certifies its proposed levy under subdivision 1 it 
 39.24  shall certify the dates on which it elects to hold its hearings 
 39.25  and any continuations.  For its initial hearing and for the 
 39.26  subsequent hearing at which the final property tax levy will be 
 39.27  adopted, the city must not select dates that conflict with the 
 39.28  county hearing dates, metropolitan special taxing district 
 39.29  dates, or with those elected by or assigned to the school 
 39.30  districts or regional library district in which the city is 
 39.31  located.  For continuation hearings, the city may select dates 
 39.32  that conflict with other taxing authorities' dates if the city 
 39.33  deems it necessary. 
 39.34     The county hearing dates and the city, metropolitan special 
 39.35  taxing district, and regional library district, and school 
 39.36  district hearing dates must be designated on the notices 
 40.1   required under subdivision 3.  The continuation dates need not 
 40.2   be stated on the notices.  
 40.3      This subdivision does not apply to towns, school districts, 
 40.4   and special taxing districts other than regional library 
 40.5   districts and metropolitan special taxing districts. 
 40.6      Notwithstanding the requirements of this section, the 
 40.7   employer is required to meet and negotiate over employee 
 40.8   compensation as provided for in chapter 179A.  
 40.9      Sec. 6.  Minnesota Statutes 1996, section 276.04, 
 40.10  subdivision 2, is amended to read: 
 40.11     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 40.12  shall provide for the printing of the tax statements.  The 
 40.13  commissioner of revenue shall prescribe the form of the property 
 40.14  tax statement and its contents.  The statement must contain a 
 40.15  tabulated statement of the dollar amount due to each taxing 
 40.16  authority and the state from the parcel of real property for 
 40.17  which a particular tax statement is prepared.  The dollar 
 40.18  amounts due the county, state general education tax, the school 
 40.19  district, township or municipality, the total of the 
 40.20  metropolitan special taxing districts as defined in section 
 40.21  275.065, subdivision 3, paragraph (i), school district excess 
 40.22  referenda levy, remaining school district levy, and the total of 
 40.23  other voter approved referenda levies based on market value 
 40.24  under section 275.61 must be separately stated.  The amounts due 
 40.25  all other special taxing districts, if any, may be 
 40.26  aggregated.  For the purposes of this subdivision, "school 
 40.27  district excess referenda levy" means school district taxes for 
 40.28  operating purposes approved at referenda, including those taxes 
 40.29  based on net tax capacity as well as those based on market 
 40.30  value. "School district excess referenda levy" does not include 
 40.31  school district taxes for capital expenditures approved at 
 40.32  referendums or school district taxes to pay for the debt service 
 40.33  on bonds approved at referenda.  The amount of the tax on 
 40.34  contamination value imposed under sections 270.91 to 270.98, if 
 40.35  any, must also be separately stated.  The dollar amounts, 
 40.36  including the dollar amount of any special assessments, may be 
 41.1   rounded to the nearest even whole dollar.  For purposes of this 
 41.2   section whole odd-numbered dollars may be adjusted to the next 
 41.3   higher even-numbered dollar.  The amount of market value 
 41.4   excluded under section 273.11, subdivision 16, if any, must also 
 41.5   be listed on the tax statement.  The statement shall include the 
 41.6   following sentence, printed in upper case letters in boldface 
 41.7   print:  "THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY 
 41.8   TAX REVENUES.  THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX 
 41.9   BY PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF 
 41.10  GOVERNMENT."  
 41.11     (b) The property tax statements for manufactured homes and 
 41.12  sectional structures taxed as personal property shall contain 
 41.13  the same information that is required on the tax statements for 
 41.14  real property.  
 41.15     (c) Real and personal property tax statements must contain 
 41.16  the following information in the order given in this paragraph.  
 41.17  The information must contain the current year tax information in 
 41.18  the right column with the corresponding information for the 
 41.19  previous year in a column on the left: 
 41.20     (1) the property's estimated market value under section 
 41.21  273.11, subdivision 1; 
 41.22     (2) the property's taxable market value after reductions 
 41.23  under section 273.11, subdivisions 1a and 16; 
 41.24     (3) the property's gross tax, calculated by multiplying the 
 41.25  property's gross tax capacity times the total local tax rate and 
 41.26  adding to the result the sum of the aids enumerated in clause 
 41.27  clauses (4) and (5); 
 41.28     (4) a total of the following aids: 
 41.29     (i) education aids payable under chapters 124 and 124A; and 
 41.30     (ii) local government aids for cities, towns, and counties 
 41.31  under chapter 477A; and 
 41.32     (iii) disparity reduction aid under section 273.1398; 
 41.33     (5) for homestead residential and agricultural properties, 
 41.34  the homestead and agricultural credit aid apportioned to the 
 41.35  property.  This amount is obtained by multiplying the total 
 41.36  local tax rate by the difference between the property's gross 
 42.1   and net tax capacities under section 273.13.  This amount must 
 42.2   be separately stated and identified as "homestead and 
 42.3   agricultural credit."  For purposes of comparison with the 
 42.4   previous year's amount for the statement for taxes payable in 
 42.5   1990, the statement must show the homestead credit for taxes 
 42.6   payable in 1989 under section 273.13, and the agricultural 
 42.7   credit under section 273.132 for taxes payable in 1989; 
 42.8      (6) any credits received under sections 273.119; 273.123; 
 42.9   273.135; 273.1382; 273.1391; 273.1398, subdivision 4; 469.171; 
 42.10  and 473H.10, except that the amount of credit received under 
 42.11  section 273.135 must be separately stated and identified as 
 42.12  "taconite tax relief," and the amount of credit received under 
 42.13  section 273.1382 must be separately stated and identified as 
 42.14  general education homestead credit"; and 
 42.15     (7) the net tax payable in the manner required in paragraph 
 42.16  (a). 
 42.17     (d) If the county uses envelopes for mailing property tax 
 42.18  statements and if the county agrees, a taxing district may 
 42.19  include a notice with the property tax statement notifying 
 42.20  taxpayers when the taxing district will begin its budget 
 42.21  deliberations for the current year, and encouraging taxpayers to 
 42.22  attend the hearings.  If the county allows notices to be 
 42.23  included in the envelope containing the property tax statement, 
 42.24  and if more than one taxing district relative to a given 
 42.25  property decides to include a notice with the tax statement, the 
 42.26  county treasurer or auditor must coordinate the process and may 
 42.27  combine the information on a single announcement.  
 42.28     The commissioner of revenue shall certify to the county 
 42.29  auditor the actual or estimated aids enumerated in paragraph 
 42.30  (c), clauses (3) and (4) and (5), that local governments will 
 42.31  receive in the following year.  In the case of a county 
 42.32  containing a city of the first class, for taxes levied in 1991, 
 42.33  and for all counties for taxes levied in 1992 and thereafter, 
 42.34  The commissioner must certify this amount by September 1 of each 
 42.35  year.  
 42.36     Sec. 7.  [EFFECTIVE DATE.] 
 43.1      Section 1 is effective for reports and notices beginning in 
 43.2   1998 and thereafter. 
 43.3      Sections 2 to 5 are effective for notices, publications, 
 43.4   and hearings prepared, issued, or conducted in 1997 and 
 43.5   thereafter. 
 43.6      Section 6 is effective for property tax statements issued 
 43.7   in 1998 and thereafter. 
 43.8                              ARTICLE 4 
 43.9                           LEVY CONSTRAINTS 
 43.10     Section 1.  [275.0645] [LEVY CONSTRAINTS; COMPLIANCE.] 
 43.11     Subdivision 1.  [LEVY CONSTRAINTS.] On or before August 1 
 43.12  of each year, the commissioner of revenue shall certify a 
 43.13  specific levy limitation to each county, city, and metropolitan 
 43.14  special taxing district for property taxes payable in the 
 43.15  following year.  The certification shall also notify each 
 43.16  recipient taxing authority that a referendum must be held if the 
 43.17  taxing authority's property tax levy for the following taxes 
 43.18  payable year will exceed the certified levy limitation amount.  
 43.19  For taxes payable in 1998, the levy limitation for each affected 
 43.20  taxing authority is the authority's final certified levy for all 
 43.21  purposes, including bonded indebtedness, for taxes payable in 
 43.22  1997, multiplied by one plus the rate of increase in the 
 43.23  implicit price deflator for state and local government purchases 
 43.24  of goods and services prepared by the Bureau of Economic 
 43.25  Analysis of the United States Department of Commerce for the 
 43.26  12-month period ending March 31, 1997.  For taxes payable years 
 43.27  after 1998, the levy limitation for each affected taxing 
 43.28  authority is the authority's final certified levy for all 
 43.29  purposes, including bonded indebtedness, for taxes payable in 
 43.30  the prior year multiplied by one plus the rate of increase in 
 43.31  the implicit price deflator for state and local government 
 43.32  purchases of goods and services prepared by the Bureau of 
 43.33  Economic Analysis of the United States Department of Commerce 
 43.34  for the 12-month period ending March 31 of the year preceding 
 43.35  the year in which the property taxes are payable.  Towns and 
 43.36  nonmetropolitan special taxing districts are exempt from this 
 44.1   levy limitation.  
 44.2      Subd. 2.  [COMPLIANCE.] Each county, city, or metropolitan 
 44.3   special taxing district which intends to increase its property 
 44.4   tax levy for taxes payable in the following year by an amount 
 44.5   which exceeds the levy limitation certified to it under 
 44.6   subdivision 1 for taxes payable in the following year, must 
 44.7   conduct a referendum on that question on the first Tuesday after 
 44.8   the first Monday in November of the year preceding the year in 
 44.9   which the property taxes are payable.  Approval of the excess 
 44.10  levy by the voters is effective for the following taxes payable 
 44.11  year only, unless the question on the ballot is for the approval 
 44.12  of a bond issue, or unless the question on the ballot specifies 
 44.13  the additional years in which the excess levy will be allowed.  
 44.14  A voter approved excess levy for a particular taxes payable year 
 44.15  is not included in the computation of the taxing authority's 
 44.16  levy limitation under subdivision 1 for a subsequent taxes 
 44.17  payable year. 
 44.18     Sec. 2.  Minnesota Statutes 1996, section 275.065, 
 44.19  subdivision 1, is amended to read: 
 44.20     Subdivision 1.  [PROPOSED LEVY.] (a) Notwithstanding any 
 44.21  law or charter to the contrary, on or before September 15, each 
 44.22  taxing authority, other than a school district, shall adopt a 
 44.23  proposed budget and shall certify to the county auditor the 
 44.24  proposed or, in the case of a town, the final property tax levy 
 44.25  for taxes payable in the following year. 
 44.26     (b) On or before September 30, each school district shall 
 44.27  certify to the county auditor the proposed property tax levy for 
 44.28  taxes payable in the following year.  The school district may 
 44.29  certify the proposed levy as: 
 44.30     (1) a specific dollar amount; or 
 44.31     (2) an amount equal to the maximum levy limitation 
 44.32  certified by the commissioner of children, families, and 
 44.33  learning to the county auditor according to section 124.918, 
 44.34  subdivision 1. 
 44.35     (c) If the board of estimate and taxation or any similar 
 44.36  board that establishes maximum tax levies for taxing 
 45.1   jurisdictions within a first class city certifies the maximum 
 45.2   property tax levies for funds under its jurisdiction by charter 
 45.3   to the county auditor by September 15, the city shall be deemed 
 45.4   to have certified its levies for those taxing jurisdictions. 
 45.5      (d) For purposes of this section, "taxing authority" 
 45.6   includes all home rule and statutory cities, towns, counties, 
 45.7   school districts, and special taxing districts as defined in 
 45.8   section 275.066.  Intermediate school districts that levy a tax 
 45.9   under chapter 124 or 136D, joint powers boards established under 
 45.10  sections 124.491 to 124.495, and common school districts No. 
 45.11  323, Franconia, and No. 815, Prinsburg, are also special taxing 
 45.12  districts for purposes of this section.  
 45.13     (e) Any county, city, or metropolitan special taxing 
 45.14  district that will be holding a referendum under section 
 45.15  275.0645, on an increase in its levy above the levy limitation 
 45.16  established in that section, must include the amount of the 
 45.17  proposed excess levy in the proposed total levy certified under 
 45.18  this subdivision. 
 45.19     Sec. 3.  Minnesota Statutes 1996, section 275.07, is 
 45.20  amended by adding a subdivision to read: 
 45.21     Subd. 5.  [LEVY REDUCTION.] If a county, city, or 
 45.22  metropolitan special taxing district certifies a levy under 
 45.23  subdivision 1 that would exceed the levy limitation certified to 
 45.24  that taxing authority by the commissioner of revenue under 
 45.25  section 275.0645, subdivision 1, for the taxes payable year, and 
 45.26  if the excess levy was not approved by the voters at a 
 45.27  referendum held on the first Tuesday after the first Monday in 
 45.28  November preceding the levy certification date under subdivision 
 45.29  1, the county auditor will reduce the amount of the final 
 45.30  certified levy so that it does not exceed that taxing 
 45.31  authority's levy limitation, as certified by the commissioner.  
 45.32     Sec. 4.  [EFFECTIVE DATE.] 
 45.33     Sections 1 to 3 are effective for property taxes payable in 
 45.34  1998, and thereafter.