SF 1723

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

  1.1                          A bill for an act
  1.2             relating to the financing and operation of government 
  1.3             in Minnesota; changing property tax classifications 
  1.4             and class rates; modifying the property tax refund for 
  1.5             homeowners and renters; restructuring various state 
  1.6             aids; changing the local government aid formula; 
  1.7             providing state financing of court administration 
  1.8             employees; providing for three property tax 
  1.9             installment payments; appropriating money; amending 
  1.10            Minnesota Statutes 1996, sections 43A.02, subdivision 
  1.11            25; 43A.24, subdivision 2; 97A.065, subdivision 2; 
  1.12            124.3201, subdivision 1; 124A.23, subdivision 1; 
  1.13            145A.13, subdivision 2; 256E.06, subdivision 5; 
  1.14            273.1316, subdivisions 1, 6, and 7; 273.1398, 
  1.15            subdivisions 2 and 3; 275.07, subdivision 1; 276.04, 
  1.16            subdivision 3; 276.09; 276.10; 276.11, subdivision 1; 
  1.17            276.111; 278.03, subdivision 1; 278.05, subdivision 5; 
  1.18            279.01, by adding subdivisions; 289A.18, subdivision 
  1.19            5; 289A.56, subdivision 6; 290A.01; 290A.03, 
  1.20            subdivisions 6 and 13; 290A.04, subdivision 2, and by 
  1.21            adding a subdivision; 290A.07; 290A.23, subdivision 3; 
  1.22            299D.03, subdivision 5; 466.01, subdivision 6; 
  1.23            477A.011, subdivisions 34, 35, 37, and by adding 
  1.24            subdivisions; 477A.013, subdivisions 8 and 9; 477A.03, 
  1.25            subdivision 2; 480.181, subdivision 1; 485.01; 
  1.26            485.018, subdivisions 2a, 5, and 6; 485.021; 487.32, 
  1.27            subdivision 3; and 574.34, subdivision 1; proposing 
  1.28            coding for new law in Minnesota Statutes, chapters 
  1.29            273; 290A; and 477A; repealing Minnesota Statutes 
  1.30            1996, sections 256E.06, subdivision 2; 273.124; 
  1.31            273.13; 273.1398; 275.08, subdivisions 1c and 1d; 
  1.32            279.01, subdivisions 1 and 3; 290A.04, subdivisions 
  1.33            2a, 2b, and 2h; 290A.23, subdivision 1; 477A.05; 
  1.34            485.018, subdivisions 1, 2, 4, and 8; 485.03; 485.05; 
  1.35            and 485.11. 
  1.36  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.37                             ARTICLE 1 
  1.38             PROPERTY TAX CLASSIFICATION AND VALUATION 
  1.39     Section 1.  [273.126] [DEFINITIONS.] 
  1.40     Subdivision 1.  [APPLICATION.] The definitions listed in 
  2.1   subdivisions 2 to 12 must be used in classifying property under 
  2.2   this section. 
  2.3      Subd. 2.  [CLASS RATE.] Wherever the "class rate" of a 
  2.4   class of property is specified without qualification as to 
  2.5   whether it is the property's "net class rate" or its "gross 
  2.6   class rate," the "net class rate" and "gross class rate" of that 
  2.7   property are the same as its "class rate." 
  2.8      Subd. 3.  [NET TAX CAPACITY.] "Net tax capacity" means the 
  2.9   product of the appropriate class rate multiplied by the market 
  2.10  value of the property. 
  2.11     Subd. 4.  [RESIDENTIAL PROPERTY.] "Residential property" 
  2.12  means: 
  2.13     (1) a property containing one, two, or three dwelling 
  2.14  units; 
  2.15     (2) subsidized housing; 
  2.16     (3) nonsubsidized residential property containing four or 
  2.17  more dwelling units; 
  2.18     (4) hospitals defined in section 144.50, subdivision 2; 
  2.19     (5) seasonal residential recreational property used for 
  2.20  noncommercial purposes; and 
  2.21     (6) seasonal residential recreational property used for 
  2.22  commercial purposes for up to 250 days in the year preceding the 
  2.23  year of assessment. 
  2.24     For purposes of this subdivision, property is devoted to a 
  2.25  commercial purpose on a specific day if any portion of the 
  2.26  property is used for residential occupancy and a fee is charged 
  2.27  for residential occupancy. 
  2.28     Subd. 5.  [AGRICULTURAL LAND.] "Agricultural land" means 
  2.29  contiguous acreage of ten acres or more, primarily used during 
  2.30  the preceding year for agricultural purposes.  Agricultural land 
  2.31  may include pasture, timber, waste, unusable wild land, and land 
  2.32  included in state or federal farm programs, and woodland 
  2.33  contiguous to or surrounded by agricultural land. 
  2.34     Subd. 6.  [AGRICULTURAL PURPOSES.] "Agricultural purposes" 
  2.35  means the raising or cultivation of agricultural products, 
  2.36  including:  (1) livestock, dairy animals, dairy products, 
  3.1   poultry and poultry products, fur-bearing animals, horticultural 
  3.2   and nursery stock described in sections 18.44 to 18.61, fruit of 
  3.3   all kinds, vegetables, forage, grains, bees, and apiary products 
  3.4   produced by the owner; (2) fish bred for sale and consumption if 
  3.5   the fish breeding occurs on land zoned for agricultural use; (3) 
  3.6   the commercial boarding of horses if the boarding is done in 
  3.7   conjunction with the raising or cultivation of agricultural 
  3.8   products as defined in clause (1); (4) property which is owned 
  3.9   and operated by nonprofit organizations used for equestrian 
  3.10  activities, excluding racing; and (5) game birds and waterfowl 
  3.11  bred and raised for use on a shooting preserve licensed under 
  3.12  section 97A.115.  
  3.13     If a parcel used for agricultural purposes is also used for 
  3.14  commercial or industrial purposes, including but not limited to: 
  3.15  (i) wholesale and retail sales; (ii) processing of raw 
  3.16  agricultural products or other goods; (iii) warehousing or 
  3.17  storage of processed goods; and (iv) office facilities for the 
  3.18  support of the activities enumerated in items (i), (ii), and 
  3.19  (iii); the assessor shall classify that portion of the parcel 
  3.20  used for agricultural purposes as class 1, and the remainder of 
  3.21  the property as commercial or industrial.  The first $100,000 
  3.22  market value of the commercial or industrial portion shall be 
  3.23  class 2 and the commercial or industrial market value in excess 
  3.24  of $100,000 shall be class 3.  The grading, sorting, and 
  3.25  packaging of raw agricultural products for first sale is 
  3.26  considered an agricultural purpose.  A greenhouse or other 
  3.27  building where horticultural or nursery products are grown that 
  3.28  is also used for the conduct of retail sales must be classified 
  3.29  as agricultural if it is primarily used for the growing of 
  3.30  horticultural or nursery products from seed, cuttings, or roots 
  3.31  and occasionally as a showroom for the retail sale of those 
  3.32  products.  Use of a greenhouse or building only for the display 
  3.33  of already grown horticultural or nursery products does not 
  3.34  qualify as an agricultural purpose.  
  3.35     The assessor shall determine and list separately on the 
  3.36  records the market value of any residential dwelling and the one 
  4.1   acre of land on which that dwelling is located.  If any farm 
  4.2   buildings or structures are located on this acre of land, their 
  4.3   market value must not be included in this separate determination.
  4.4      Subd. 7.  [TIMBERLAND PROPERTY.] "Timberland property" is 
  4.5   real estate that is rural in character and used exclusively for 
  4.6   growing trees for timber, lumber, and wood and wood products. 
  4.7      Subd. 8.  [SUBSIDIZED HOUSING.] "Subsidized housing" means: 
  4.8      (a) a structure that is:  
  4.9      (i) situated on real property that is used for housing for 
  4.10  the elderly or for low- and moderate-income families as defined 
  4.11  in Title II, as amended through December 31, 1990, of the 
  4.12  National Housing Act or the Minnesota housing finance agency law 
  4.13  of 1971, as amended, or rules promulgated by the agency and 
  4.14  financed by a direct federal loan or federally insured loan made 
  4.15  pursuant to Title II of the Act; or 
  4.16     (ii) situated on real property that is used for housing the 
  4.17  elderly or for low- and moderate-income families as defined by 
  4.18  the Minnesota housing finance agency law of 1971, as amended, or 
  4.19  rules adopted by the agency pursuant thereto and financed by a 
  4.20  loan made by the Minnesota housing finance agency pursuant to 
  4.21  the provisions of the act.  
  4.22     This clause applies only to property of a nonprofit or 
  4.23  limited dividend entity.  Property is classified under this 
  4.24  clause for 15 years from the date of the completion of the 
  4.25  original construction or substantial rehabilitation, or for the 
  4.26  original term of the loan.  
  4.27     (b) a structure that is: 
  4.28     (i) situated upon real property that is used for housing 
  4.29  lower income families or elderly or handicapped persons, as 
  4.30  defined in section 8 of the United States Housing Act of 1937, 
  4.31  as amended; and 
  4.32     (ii) owned by an entity that has entered into a housing 
  4.33  assistance payments contract under section 8 which provides 
  4.34  assistance for 100 percent of the dwelling units in the 
  4.35  structure, other than dwelling units intended for management or 
  4.36  maintenance personnel.  Property is classified under this clause 
  5.1   for the term of the housing assistance payments contract, 
  5.2   including all renewals, or for the term of its permanent 
  5.3   financing, whichever is shorter. 
  5.4      (c) a qualified low-income building as defined in section 
  5.5   42(c)(2) of the Internal Revenue Code of 1986, as amended 
  5.6   through December 31, 1990, that (i) receives a low-income 
  5.7   housing credit under section 42 of the Internal Revenue Code of 
  5.8   1986, as amended through December 31, 1990; or (ii) meets the 
  5.9   requirements of that section and receives public financing, 
  5.10  except financing provided under sections 469.174 to 469.179, 
  5.11  which contains terms restricting the rents; or (iii) meets the 
  5.12  requirements of section 273.1317.  Classification under this 
  5.13  clause is limited to a term of 15 years.  The public financing 
  5.14  received must be from at least one of the following sources:  
  5.15  government issued bonds exempt from taxes under section 103 of 
  5.16  the Internal Revenue Code of 1986, as amended through December 
  5.17  31, 1993, the proceeds of which are used for the acquisition or 
  5.18  rehabilitation of the building; programs under section 202, 
  5.19  221(d)(3), or 236, of Title II of the National Housing Act; 
  5.20  rental housing program funds under section 8 of the United 
  5.21  States Housing Act of 1937, or the market rate family graduated 
  5.22  payment mortgage program funds administered by the Minnesota 
  5.23  housing finance agency that are used for the acquisition or 
  5.24  rehabilitation of the building; public financing provided by a 
  5.25  local government used for the acquisition or rehabilitation of 
  5.26  the building, including grants or loans from federal community 
  5.27  development block grants, HOME block grants, or residential 
  5.28  rental bonds issued under chapter 474A; or other rental housing 
  5.29  program funds provided by the Minnesota housing finance agency 
  5.30  for the acquisition or rehabilitation of the building. 
  5.31     For all properties described in clauses (a), (b), (c), and 
  5.32  (e), the market value determined by the assessor must be based 
  5.33  on the normal approach to value using normal unrestricted rents 
  5.34  unless the owner of the property elects to have the property 
  5.35  assessed under Laws 1991, chapter 291, article 1, section 55.  
  5.36  If the owner of the property elects to have the market value 
  6.1   determined on the basis of the actual restricted rents, as 
  6.2   provided in Laws 1991, chapter 291, article 1, section 55, the 
  6.3   property will be assessed at the same rate provided by class 4a 
  6.4   or 4b, whichever is appropriate, under Minnesota Statutes 1996.  
  6.5   Properties described in paragraphs (a), (c), and (e) may apply 
  6.6   to the assessor for valuation under Laws 1991, chapter 291, 
  6.7   article 1, section 55.  The land on which these structures are 
  6.8   situated has the class rate given in subdivision 4, clause (1), 
  6.9   if the structure contains fewer than four units, and the class 
  6.10  rate given in subdivision 4, clause (3), if the structure 
  6.11  contains four or more units.  This clause applies only to the 
  6.12  property of a nonprofit or limited dividend entity.  
  6.13     (d) a parcel of land, not to exceed one acre, and its 
  6.14  improvements or a parcel of unimproved land, not to exceed one 
  6.15  acre, if it is owned by a neighborhood real estate trust and at 
  6.16  least 60 percent of the dwelling units, if any, on all land 
  6.17  owned by the trust are leased to or occupied by lower income 
  6.18  families or individuals.  This clause does not apply to any 
  6.19  portion of the land or improvements used for nonresidential 
  6.20  purposes.  For purposes of this clause, a lower income family is 
  6.21  a family with an income that does not exceed 65 percent of the 
  6.22  median family income for the area, and a lower income individual 
  6.23  is an individual whose income does not exceed 65 percent of the 
  6.24  median individual income for the area, as determined by the 
  6.25  United States Secretary of Housing and Urban Development.  For 
  6.26  purposes of this clause, "neighborhood real estate trust" means 
  6.27  an entity which is certified by the governing body of the 
  6.28  municipality in which it is located to have the following 
  6.29  characteristics: 
  6.30     (i) it is a nonprofit corporation organized under chapter 
  6.31  317A; 
  6.32     (ii) it has as its principal purpose providing housing for 
  6.33  lower income families in a specific geographic community 
  6.34  designated in its articles or bylaws; 
  6.35     (iii) it limits membership with voting rights to residents 
  6.36  of the designated community; and 
  7.1      (iv) it has a board of directors consisting of at least 
  7.2   seven directors, 60 percent of whom are members with voting 
  7.3   rights and, to the extent feasible, 25 percent of whom are 
  7.4   elected by resident members of buildings owned by the trust. 
  7.5      (e) a structure that is: 
  7.6      (i) situated on real property that is used for housing for 
  7.7   the elderly or for low- and moderate-income families as defined 
  7.8   by the Farmers Home Administration; 
  7.9      (ii) located in a municipality of less than 10,000 
  7.10  population; and 
  7.11     (iii) financed by a direct loan or insured loan from the 
  7.12  Farmers Home Administration.  Property is classified under this 
  7.13  clause for 15 years from the date of the completion of the 
  7.14  original construction or for the original term of the loan.  
  7.15     The class rates in clauses (a), items (1) and (2), and (c), 
  7.16  and this clause apply to the properties described in them, only 
  7.17  in proportion to occupancy of the structure by elderly or 
  7.18  handicapped persons or low- and moderate-income families as 
  7.19  defined in the applicable laws unless construction of the 
  7.20  structure had been commenced prior to January 1, 1984; or the 
  7.21  project had been approved by the governing body of the 
  7.22  municipality in which it is located prior to June 30, 1983; or 
  7.23  financing of the project had been approved by a federal or state 
  7.24  agency prior to June 30, 1983.  For those properties, the 
  7.25  classification provided in Minnesota Statutes 1996, section 
  7.26  273.13, for class 4c or 4d property is available only for those 
  7.27  units meeting the requirements of section 273.1318. 
  7.28     Classification under this clause is only available to 
  7.29  property of a nonprofit or limited dividend entity. 
  7.30     In the case of a structure financed or refinanced under any 
  7.31  federal or state mortgage insurance or direct loan program 
  7.32  exclusively for housing for the elderly or for housing for the 
  7.33  handicapped, a unit shall be considered occupied so long as it 
  7.34  is actually occupied by an elderly or handicapped person or, if 
  7.35  vacant, is held for rental to an elderly or handicapped person. 
  7.36     (f) qualifying buildings and appurtenances, together with 
  8.1   the land upon which they are located, leased for a period of up 
  8.2   to five years by the occupant under a lease-purchase program 
  8.3   administered by the Minnesota housing finance agency or a 
  8.4   housing and redevelopment authority authorized under sections 
  8.5   469.001 to 469.047, provided the occupant's income is no greater 
  8.6   than 80 percent of the county or area median income, adjusted 
  8.7   for family size, and the building consists of two or less 
  8.8   dwelling units.  The lease agreement must provide for a portion 
  8.9   of the lease payment to be escrowed as a nonrefundable down 
  8.10  payment on the housing.  The administering agency shall verify 
  8.11  the occupant's income eligibility and certify to the county 
  8.12  assessor that the occupant meets the income criteria under this 
  8.13  clause.  To qualify under this clause, the taxpayer must apply 
  8.14  to the county assessor by May 30 of each year.  For purposes of 
  8.15  this section, "qualifying buildings and appurtenances" is 
  8.16  defined as one- or two-unit residential buildings which are 
  8.17  unoccupied and have been abandoned and boarded for at least six 
  8.18  months. 
  8.19     Subd. 9.  [SEASONAL RESIDENTIAL RECREATIONAL PROPERTY.] 
  8.20  "Seasonal residential recreational property" is 
  8.21     (1) real property devoted to temporary and seasonal 
  8.22  residential occupancy for recreation purposes; and 
  8.23     (2) real property devoted to temporary and seasonal 
  8.24  residential occupancy for recreation purposes and not devoted to 
  8.25  commercial purposes for more than 250 days in the year preceding 
  8.26  the year of assessment. 
  8.27     For purposes of clause (2), property is devoted to a 
  8.28  commercial purpose on a specific day if any portion of the 
  8.29  property is used for residential occupancy, and a fee is charged 
  8.30  for residential occupancy.  Clause (2) also includes commercial 
  8.31  use real property used exclusively for recreational purposes, up 
  8.32  to a total of two acres, provided the property is not devoted to 
  8.33  commercial recreational use for more than 250 days in the year 
  8.34  preceding the year of assessment and is located within two miles 
  8.35  of the seasonal residential property with which it is used. 
  8.36     Owners of real property devoted to temporary and seasonal 
  9.1   residential occupancy for recreation purposes and all or a 
  9.2   portion of which was devoted to commercial purposes for not more 
  9.3   than 250 days in the year preceding the year of assessment 
  9.4   desiring a class 1 classification, must submit a declaration to 
  9.5   the assessor designating the cabins or units occupied for 250 
  9.6   days or less in the year preceding the year of assessment by 
  9.7   January 15 of the assessment year.  Those cabins or units and a 
  9.8   proportionate share of the land on which they are located will 
  9.9   be designated class 1, provided that the area of the property 
  9.10  receiving class 1 treatment must not exceed 100 feet of 
  9.11  lakeshore footage for each cabin or campsite located on the 
  9.12  property up to a total of 800 feet and 500 feet in depth, 
  9.13  measured away from the lakeshore.  The remainder of the cabins 
  9.14  or units and a proportionate share of the land on which they are 
  9.15  located in excess of the 800 feet by 500 feet area limitation is 
  9.16  designated as class 2.  If so requested, the owner of property 
  9.17  desiring designation as class 1 property must provide to the 
  9.18  assessor guest registers or other records demonstrating that the 
  9.19  units for which class 1 designation is sought were not occupied 
  9.20  for more than 250 days in the second year preceding the 
  9.21  assessment and are located within the allowable 500 feet by 800 
  9.22  feet area limitation.  The portion of a property operated as a 
  9.23  restaurant, bar, gift shop, and other nonresidential facility 
  9.24  operated on a commercial basis not directly related to temporary 
  9.25  and seasonal residential occupancy for recreation purposes is 
  9.26  class 3 property. 
  9.27     Subd. 10.  [NONPROFIT COMMUNITY SERVICE-ORIENTED 
  9.28  ORGANIZATION.] "Nonprofit community service-oriented 
  9.29  organization" means real property up to a maximum of one acre of 
  9.30  land owned by a nonprofit community service-oriented 
  9.31  organization.  The property must not be used for a 
  9.32  revenue-producing activity for more than six days in the 
  9.33  calendar year preceding the year of assessment, and the property 
  9.34  must not be used for residential purposes on either a temporary 
  9.35  or permanent basis.  For purposes of this subdivision, a 
  9.36  nonprofit community service-oriented organization means any 
 10.1   corporation, society, association, foundation, or institution 
 10.2   organized and operated exclusively for charitable, religious, 
 10.3   fraternal, civic, or educational purposes, and which is exempt 
 10.4   from federal income taxation pursuant to section 501(c)(3), 
 10.5   (10), or (19) of the Internal Revenue Code of 1986, as amended 
 10.6   through December 31, 1990.  For purposes of this subdivision, 
 10.7   "revenue-producing activities" includes but is not limited to 
 10.8   property, or that part of the property, that is used as an 
 10.9   on-sale intoxicating liquor or nonintoxicating malt liquor 
 10.10  establishment licensed under chapter 340A, a restaurant open to 
 10.11  the public, bowling alley, a retail store, gambling conducted by 
 10.12  organizations licensed under chapter 349, an insurance business, 
 10.13  or office or other space leased or rented to a lessee who 
 10.14  conducts a for-profit enterprise on the premises.  The use of 
 10.15  the property for social events open exclusively to members and 
 10.16  their guests for periods of less than 24 hours, when an 
 10.17  admission is not charged nor any revenues are received by the 
 10.18  organization, is not considered a revenue-producing activity. 
 10.19     Subd. 11.  [POST-SECONDARY STUDENT HOUSING.] 
 10.20  "Post-secondary student housing" means post-secondary student 
 10.21  housing of not more than one acre of land that is owned by a 
 10.22  nonprofit corporation organized under chapter 317A and is used 
 10.23  exclusively by a student cooperative, sorority, or fraternity 
 10.24  for on-campus housing or housing located within two miles of the 
 10.25  border of a college campus. 
 10.26     Subd. 12.  [MANUFACTURED HOME PARK.] "Manufactured home 
 10.27  park" means any site, lot, field, or tract of land upon which 
 10.28  two or more occupied manufactured homes are located, either free 
 10.29  of charge or for compensation, and includes any building, 
 10.30  structure, tent, vehicle, or enclosure used or intended for use 
 10.31  as part of the equipment of the manufactured home park. 
 10.32     Sec. 2.  [273.127] [VALUATION AND CLASSIFICATION OF 
 10.33  PROPERTY.] 
 10.34     Subdivision 1.  [MANNER OF VALUATION AND CLASSIFICATION.] 
 10.35  All real and personal property subject to a general property tax 
 10.36  and not subject to a gross earnings or other fee in lieu of tax, 
 11.1   is classified as provided in this section.  
 11.2      Subd. 2.  [CLASS 1.] Class 1 property must be valued at 100 
 11.3   percent of market value, and has a class rate of one percent, 
 11.4   except that for assessment year 1998 through assessment year 
 11.5   2001, the class rate used for class 1 property shall be adjusted 
 11.6   by the county assessor as provided in section 6. 
 11.7      Class 1 property includes: 
 11.8      (1) agricultural land and improvements; 
 11.9      (2) timberland property; and 
 11.10     (3) that portion of seasonal residential recreational 
 11.11  property classified under section 273.126, subdivision 9, clause 
 11.12  (2), within the 800 feet by 500 feet area limitation. 
 11.13     The combined market value of each house, garage, and the 
 11.14  immediately surrounding one acre of land located on the 
 11.15  agricultural property which is occupied by the owner as a 
 11.16  homestead or is the residential unit occupied by the manager or 
 11.17  caretaker of the seasonal residential recreational property 
 11.18  under section 273.126, subdivision 9, clause (2), are class 2 
 11.19  property. 
 11.20     Subd. 3.  [CLASS 2.] Class 2 property must be valued at 100 
 11.21  percent of market value, and has a class rate of two percent, 
 11.22  except that for assessment year 1998 through assessment year 
 11.23  2001, the class rate used for class 2 property shall be adjusted 
 11.24  by the county assessor as provided in section 6.  
 11.25     Class 2 property includes: 
 11.26     (1) residential property containing one, two, or three 
 11.27  dwelling units; 
 11.28     (2) subsidized housing; 
 11.29     (3) that portion of the market value of commercial, 
 11.30  industrial, and utility property that does not exceed $100,000 
 11.31  market value.  In the case of state-assessed commercial, 
 11.32  industrial, and utility property owned by one person or entity, 
 11.33  only one parcel is eligible for the two percent class rate on 
 11.34  the first $100,000 of market value.  In the case of other 
 11.35  commercial, industrial, and utility property owned by one person 
 11.36  or entity, only one parcel in each county is eligible for the 
 12.1   two percent class rate on the first $100,000 of market value; 
 12.2   except that: 
 12.3      (i) if the market value of the parcel is less than 
 12.4   $100,000, and additional parcels are owned by the same person or 
 12.5   entity in the same city or town within that county, the reduced 
 12.6   class rate shall be applied up to a combined total market value 
 12.7   of $100,000 for all parcels owned by the same person or entity 
 12.8   in the same city or town within the county; 
 12.9      (ii) in the case of grain, fertilizer, and feed elevator 
 12.10  facilities, as defined in section 18C.305, subdivision 1, or 
 12.11  232.21, subdivision 8, the limitation to one parcel per owner 
 12.12  per county for the reduced class rate shall not apply, but there 
 12.13  shall be a limit of $100,000 of preferential value per site of 
 12.14  contiguous parcels owned by the same person or entity.  Only the 
 12.15  value of the elevator portion of each parcel shall qualify for 
 12.16  treatment under this clause.  For purposes of this subdivision, 
 12.17  contiguous parcels include parcels separated only by a railroad 
 12.18  or public road right-of-way; and 
 12.19     (iii) in the case of property owned by a nonprofit 
 12.20  charitable organization that qualifies for tax exemption under 
 12.21  section 501(c)(3) of the Internal Revenue Code of 1986, as 
 12.22  amended through December 31, 1996, if the property is used as a 
 12.23  business incubator, the limitation to one parcel per owner per 
 12.24  county for the reduced class rate shall not apply, provided that 
 12.25  the reduced rate applies only to the first $100,000 of value per 
 12.26  parcel owned by the organization.  As used in this item, a 
 12.27  "business incubator" is a facility used for the development of 
 12.28  nonretail businesses, offering access to equipment, space, 
 12.29  services, and advice to the tenant businesses, for the purpose 
 12.30  of encouraging economic development, diversification, and job 
 12.31  creation in the area served by the organization. 
 12.32     To receive the reduced class rate on additional parcels 
 12.33  under items (i), (ii), or (iii), the taxpayer must notify the 
 12.34  county assessor that the taxpayer owns more than one parcel that 
 12.35  qualifies under items (i), (ii), or (iii); 
 12.36     (4) employment property defined in section 469.166, during 
 13.1   the period provided in section 469.170; 
 13.2      (5) that portion of the market value of employment property 
 13.3   located in a border city enterprise zone designated under 
 13.4   section 469.168, subdivision 4, paragraph (c) that does not 
 13.5   exceed $100,000 market value; 
 13.6      (6) manufactured home parks of four or more units; 
 13.7      (7) that portion of the market value of commercial 
 13.8   residential recreational property used for less than 250 days in 
 13.9   the previous year's assessment as defined under section 273.126, 
 13.10  subdivision 9, clause (2), which is in excess of the 800 feet by 
 13.11  500 feet area limitation; 
 13.12     (8) that portion of the market value of commercial 
 13.13  residential recreational property under section 273.126, 
 13.14  subdivision 9, clause (2), which is occupied by the owner as a 
 13.15  homestead or is the residential unit occupied by the manager or 
 13.16  caretaker; 
 13.17     (9) real property up to a maximum of one acre of land owned 
 13.18  by a nonprofit community service-oriented organization; and 
 13.19     (10) post-secondary student housing. 
 13.20     For purposes of determining the market value for all rental 
 13.21  housing, the assessor shall determine the market value by using 
 13.22  the normal approach to value and using normal unrestricted rents.
 13.23     Subd. 4.  [CLASS 3.] Class 3 property must be valued at 100 
 13.24  percent of market value, and has a class rate of three percent, 
 13.25  except that for assessment year 1998 through assessment year 
 13.26  2001, the class rate used for class 3 property shall be adjusted 
 13.27  by the county assessor as provided in section 6. 
 13.28     Class 3 property is nonsubsidized residential real estate 
 13.29  with four or more units and used or held for use by the owner, 
 13.30  or by the tenants or lessees of the owner, as a residence for 
 13.31  rental periods of 30 days or more. 
 13.32     The tax savings from reducing the class rate provided in 
 13.33  this act beginning with the 1998 assessment must be used for 
 13.34  reduced rents, improved maintenance, and capital improvements to 
 13.35  the property.  Upon request, the manager of the property must 
 13.36  demonstrate that the estimated property tax savings have inured 
 14.1   to the tenants. 
 14.2      Subd. 5.  [CLASS 4.] Class 4 property must be valued at 100 
 14.3   percent of market value and has a class rate of 4.5 percent, 
 14.4   except that for assessment year 1998 through assessment year 
 14.5   2001, the class rate used for class 4 property shall be adjusted 
 14.6   by the county assessor as provided in section 6. 
 14.7      Class 4 property includes:  
 14.8      (1) that portion of the market value of commercial, 
 14.9   industrial, and utility property in excess of the first $100,000 
 14.10  market value provided under subdivision 3, clause (3); 
 14.11     (2) that portion of employment property defined in section 
 14.12  469.166 in excess of the first $100,000 market value provided in 
 14.13  subdivision 3, clause (4); 
 14.14     (3) tools, implements, and machinery of an electric 
 14.15  generating system transporting or distributing water, gas, crude 
 14.16  oil, or petroleum products or mains and pipes used in the 
 14.17  distribution of steam or hot or chilled water for heating or 
 14.18  cooling buildings, which are fixtures; 
 14.19     (4) unmined iron ore and low-grade iron-bearing formations 
 14.20  as defined in section 273.14; and 
 14.21     (5) all other property not otherwise classified. 
 14.22     Subd. 6.  [CLASSIFICATION OF UNIMPROVED PROPERTY.] (a) 
 14.23  Except as provided in paragraph (b), real property that is not 
 14.24  improved with a structure must be classified according to its 
 14.25  highest and best use permitted under the local zoning 
 14.26  ordinance.  If the ordinance permits more than one use, the land 
 14.27  must be classified according to the highest and best use 
 14.28  permitted under the ordinance.  If no such ordinance exists, the 
 14.29  assessor shall consider the most likely potential use of the 
 14.30  unimproved land based upon the use made of surrounding land or 
 14.31  land in proximity to the unimproved land. 
 14.32     (b) Real property that is not improved with a structure and 
 14.33  is in commercial, industrial, or agricultural use under this 
 14.34  section must be classified according to its actual use. 
 14.35     Subd. 7.  [MULTIUSE PROPERTY.] In the case of multiuse 
 14.36  property, the assessor shall apportion the valuation and 
 15.1   classification according to the uses of the property. 
 15.2      Sec. 3.  Minnesota Statutes 1996, section 273.1316, 
 15.3   subdivision 1, is amended to read: 
 15.4      Subdivision 1.  [DENIAL OF RENTAL CLASSIFICATION.] A 
 15.5   building that is classified as residential rental property under 
 15.6   section 273.13 273.127, subdivision 25 4, and that is determined 
 15.7   to be substandard under this section is assessed as provided in 
 15.8   at the class rate applicable to it under Minnesota Statutes 
 15.9   1996, section 273.13, subdivision 25, paragraph (e). 
 15.10     Sec. 4.  Minnesota Statutes 1996, section 273.1316, 
 15.11  subdivision 6, is amended to read: 
 15.12     Subd. 6.  [TIMING OF PROCESS.] If a notice of noncompliance 
 15.13  is mailed before July 1 of any year, and the property owner has 
 15.14  neither (1) successfully appealed the determination, nor (2) 
 15.15  brought the property into compliance by October 15 of that year, 
 15.16  the property will be assessed at the class rate applicable to it 
 15.17  under Minnesota Statutes 1996, section 273.13, subdivision 25, 
 15.18  paragraph (e), for taxes levied in that year and all subsequent 
 15.19  years until the agency determines that the property is no longer 
 15.20  a substandard building, or the property owner prevails on an 
 15.21  appeal of the matter.  If a notice of noncompliance is mailed 
 15.22  after June 30 of any year, the disqualification would initially 
 15.23  be effective for taxes levied in the following year. 
 15.24     Sec. 5.  Minnesota Statutes 1996, section 273.1316, 
 15.25  subdivision 7, is amended to read: 
 15.26     Subd. 7.  [REFUND UPON APPEAL.] If the property owner 
 15.27  prevails on an appeal at any time after taxes have been paid 
 15.28  based on assessment of the property as provided in section 
 15.29  273.13, subdivision 25 1, paragraph (e), the agency shall notify 
 15.30  the property owner concerning the procedures for the filing for 
 15.31  a refund.  The notice shall be in the form and include the 
 15.32  information prescribed by the local tax assessor.  The taxpayer 
 15.33  may then file for a refund of the difference between the amount 
 15.34  of the tax paid and the tax that would have been payable if the 
 15.35  property had not been incorrectly assessed under this section, 
 15.36  and each governmental subdivision that levied the tax on the 
 16.1   property shall refund to the property owner its proportionate 
 16.2   share of the refund.  
 16.3      Sec. 6.  [CLASS RATE ADJUSTMENTS FOR ASSESSMENT YEARS 1998 
 16.4   THROUGH 2001.] 
 16.5      The class rates in Minnesota Statutes, section 273.127, 
 16.6   subdivisions 2, 3, 4, and 5, shall be adjusted by the county 
 16.7   assessor as provided in this section.  The commissioner of 
 16.8   revenue shall prepare a schedule of the appropriate class rates 
 16.9   for each type of property for assessment years 1998, 1999, 2000, 
 16.10  and 2001.  The commissioner shall certify the rates for the 
 16.11  appropriate assessment year to each county assessor on or before 
 16.12  June 1, 1998, and on or before June 1 of the next three 
 16.13  subsequent assessment years for use in determining taxes payable 
 16.14  in the following year.  The class rates contained in Minnesota 
 16.15  Statutes 1996, section 273.13, shall be used for the 1997 
 16.16  assessment year, for taxes payable in 1998.  In assessment years 
 16.17  1998, 1999, 2000, and 2001, the commissioner of revenue shall 
 16.18  determine the appropriate class rate for each of the types of 
 16.19  property using the following schedule: 
 16.20   For taxes     Proportion of Payable   Proportion of Payable
 16.21   Payable Year  1998 Class Rate         2003 Class Rate
 16.22      1999              80 percent              20 percent
 16.23      2000              60 percent              40 percent
 16.24      2001              40 percent              60 percent
 16.25      2002              20 percent              80 percent
 16.26      2003               0 percent             100 percent
 16.27     Sec. 7.  [PROPOSED LEGISLATION.] 
 16.28     The commissioner of revenue shall prepare legislation for 
 16.29  introduction in the 1998 legislative session to change 
 16.30  references to Minnesota Statutes, section 273.13, to the 
 16.31  appropriate section and subdivision.  The revisor of statutes 
 16.32  shall assist in the preparation of the legislation. 
 16.33     Sec. 8.  [REPEALER.] 
 16.34     Minnesota Statutes 1996, sections 273.124; and 273.13, are 
 16.35  repealed. 
 16.36     Sec. 9.  [EFFECTIVE DATE.] 
 17.1      Sections 1 to 6 are effective for the 1998 assessment and 
 17.2   thereafter, for taxes payable in 1999 and thereafter, provided 
 17.3   that the class rates in section 2, subdivisions 2, 3, 4, and 5, 
 17.4   shall be adjusted as provided in section 6, for assessment years 
 17.5   1998, 1999, 2000, and 2001.  Section 8 is effective for 
 17.6   assessment year 2002 and thereafter. 
 17.7                              ARTICLE 2
 17.8               HOMEOWNER AND RENTER PROPERTY TAX REFUND
 17.9      Section 1.  Minnesota Statutes 1996, section 289A.18, 
 17.10  subdivision 5, is amended to read: 
 17.11     Subd. 5.  [PROPERTY TAX REFUND CLAIMS.] A claim for a 
 17.12  refund based on property taxes payable must be filed with the 
 17.13  commissioner on or before August May 15 of the year in which the 
 17.14  property taxes are due and payable.  Any claim for refund based 
 17.15  on rent paid must be filed on or before August May 15 of the 
 17.16  year following the year in which the rent was paid.  
 17.17     Sec. 2.  Minnesota Statutes 1996, section 289A.56, 
 17.18  subdivision 6, is amended to read: 
 17.19     Subd. 6.  [PROPERTY TAX REFUNDS UNDER CHAPTER 290A.] (a) 
 17.20  When a renter is owed a property tax refund, an unpaid refund 
 17.21  bears interest after August 14, or 60 days after the refund 
 17.22  claim was made, whichever is later, until the date the refund is 
 17.23  paid. 
 17.24     (b) When any other claimant is owed a property tax refund, 
 17.25  the unpaid refund bears interest after September 29 June 30, or 
 17.26  60 days after the refund claim was made, whichever is later, 
 17.27  until the date the refund is paid. 
 17.28     Sec. 3.  Minnesota Statutes 1996, section 290A.01, is 
 17.29  amended to read: 
 17.30     290A.01 [CITATION.] 
 17.31     This chapter may be cited as the "state of Minnesota 
 17.32  homeowner and renter property tax refund act." 
 17.33     Sec. 4.  Minnesota Statutes 1996, section 290A.03, 
 17.34  subdivision 6, is amended to read: 
 17.35     Subd. 6.  [HOMESTEAD.] "Homestead" means the dwelling 
 17.36  occupied as the claimant's principal residence and so much of 
 18.1   the land surrounding it, not exceeding ten acres, as is 
 18.2   reasonably necessary for use of the dwelling as a home and any 
 18.3   other property used for purposes of a homestead as defined in 
 18.4   section 273.13, subdivision 22, except for agricultural land 
 18.5   assessed as part of a homestead pursuant to section 273.13, 
 18.6   subdivision 23, "homestead" is limited to 320 acres or, where 
 18.7   the farm homestead is rented, one acre.  The homestead dwelling 
 18.8   may be owned or rented and may be a, or used by someone who is 
 18.9   not the owner, provided that if it is part of a multidwelling or 
 18.10  multipurpose building, only that portion of the property and the 
 18.11  land on which it is built located and is reasonably necessary 
 18.12  for the use of the dwelling as a home shall be considered the 
 18.13  homestead for purposes of this chapter.  A manufactured home, as 
 18.14  defined in section 273.125, subdivision 8, or a park trailer 
 18.15  taxed as a manufactured home under section 168.012, subdivision 
 18.16  9, assessed as personal property may be a dwelling for purposes 
 18.17  of this subdivision. 
 18.18     Sec. 5.  Minnesota Statutes 1996, section 290A.03, 
 18.19  subdivision 13, is amended to read: 
 18.20     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 18.21  payable" means the property tax exclusive of special 
 18.22  assessments, penalties, and interest payable on a claimant's 
 18.23  homestead before reductions made under section 273.13 but after 
 18.24  deductions made under sections 273.135, 273.1391, 273.42, 
 18.25  subdivision 2, and any other state paid property tax credits in 
 18.26  any calendar year.  If the homestead is part of a multidwelling 
 18.27  or multipurpose building, only the amount of the total property 
 18.28  taxes on the property relative to the homestead as defined in 
 18.29  subdivision 6 shall be considered "property taxes payable" for 
 18.30  purposes of computing the refund under this chapter.  In the 
 18.31  case of a claimant who makes ground lease payments, "property 
 18.32  taxes payable" includes the amount of the payments directly 
 18.33  attributable to the property taxes assessed against the parcel 
 18.34  on which the house is located.  No apportionment or reduction of 
 18.35  the "property taxes payable" shall be required for the use of a 
 18.36  portion of the claimant's homestead for a business purpose if 
 19.1   the claimant does not deduct any business depreciation expenses 
 19.2   for the use of a portion of the homestead in the determination 
 19.3   of federal adjusted gross income.  For homesteads which are 
 19.4   manufactured homes as defined in section 273.125, subdivision 8, 
 19.5   and for homesteads which are park trailers taxed as manufactured 
 19.6   homes under section 168.012, subdivision 9, "property taxes 
 19.7   payable" shall also include the amount of the gross rent paid in 
 19.8   the preceding year for the site on which the homestead is 
 19.9   located, which is attributable to the net tax paid on the site.  
 19.10  The amount attributable to property taxes shall be determined by 
 19.11  multiplying the net tax on the parcel by a fraction, the 
 19.12  numerator of which is the gross rent paid for the calendar year 
 19.13  for the site and the denominator of which is the gross rent paid 
 19.14  for the calendar year for the parcel.  When a homestead is owned 
 19.15  by two or more persons as joint tenants or tenants in common, 
 19.16  such tenants shall determine between them which tenant may claim 
 19.17  the property taxes payable on the homestead.  If they are unable 
 19.18  to agree, the matter shall be referred to the commissioner of 
 19.19  revenue whose decision shall be final.  Property taxes are 
 19.20  considered payable in the year prescribed by law for payment of 
 19.21  the taxes. 
 19.22     In the case of a claim relating to "property taxes 
 19.23  payable," the claimant must have owned and occupied the 
 19.24  homestead on January 2 of the year in which the tax is payable 
 19.25  and (i) the property must have been classified as homestead 
 19.26  property pursuant to section 273.13, subdivision 22 or 23, on or 
 19.27  before December 15 of the assessment year to which the "property 
 19.28  taxes payable" relate; or (ii) the claimant must provide 
 19.29  documentation from the local assessor that application for 
 19.30  homestead classification has been made on or before December 15 
 19.31  of the year in which the "property taxes payable" were payable 
 19.32  and that the assessor has approved the application. 
 19.33     Sec. 6.  Minnesota Statutes 1996, section 290A.04, 
 19.34  subdivision 2, is amended to read: 
 19.35     Subd. 2.  [HOMEOWNERS.] In 1999 and subsequent years a 
 19.36  claimant whose property taxes payable are in excess of the 
 20.1   percentage of the household income stated below shall pay an 
 20.2   amount equal to the percent of income shown for the appropriate 
 20.3   household income level along with the percent to be paid by the 
 20.4   claimant of the remaining amount of property taxes payable.  The 
 20.5   state refund equals the amount of property taxes payable that 
 20.6   remain, up to the state refund amount shown below.  
 20.7                         Percent           Percent    Maximum
 20.8   Household Income     of Income          Paid by     State
 20.9                                           Claimant    Refund
 20.10      $0 to 1,029     1.2 percent        18 percent   $440
 20.11   1,030 to 2,059     1.3 percent        18 percent   $440
 20.12   2,060 to 3,099     1.4 percent        20 percent   $440
 20.13   3,100 to 4,129     1.6 percent        20 percent   $440
 20.14   4,130 to 5,159     1.7 percent        20 percent   $440
 20.15   5,160 to 7,229     1.9 percent        25 percent   $440
 20.16   7,230 to 8,259     2.1 percent        25 percent   $440
 20.17   8,260 to 9,289     2.2 percent        25 percent   $440
 20.18   9,290 to 10,319    2.3 percent        30 percent   $440
 20.19  10,320 to 11,349    2.4 percent        30 percent   $440
 20.20  11,350 to 12,389    2.5 percent        30 percent   $440
 20.21  12,390 to 14,449    2.6 percent        30 percent   $440
 20.22  14,450 to 15,479    2.8 percent        35 percent   $440
 20.23  15,480 to 16,509    3.0 percent        35 percent   $440
 20.24  16,510 to 17,549    3.2 percent        40 percent   $440
 20.25  17,550 to 21,669    3.3 percent        40 percent   $440
 20.26  21,670 to 24,769    3.4 percent        45 percent   $440
 20.27  24,770 to 30,959    3.5 percent        45 percent   $440
 20.28  30,960 to 36,119    3.5 percent        45 percent   $440
 20.29  36,120 to 41,279    3.7 percent        50 percent   $440
 20.30  41,280 to 58,829    4.0 percent        50 percent   $440
 20.31  58,830 to 59,859    4.0 percent        50 percent   $310
 20.32  59,860 to 60,889    4.0 percent        50 percent   $210
 20.33  60,890 to 61,929    4.0 percent        50 percent   $100
 20.34       $0 to 9,999    1.0 percent        20 percent   $2,500
 20.35  10,000 to 12,499    1.3 percent        25 percent   $2,000
 20.36  12,500 to 14,999    1.5 percent        27 percent   $1,800
 21.1   15,000 to 17,499    1.7 percent        28 percent   $1,600
 21.2   17,500 to 19,999    1.9 percent        29 percent   $1,500
 21.3   20,000 to 22,499    2.2 percent        35 percent   $1,500
 21.4   22,500 to 24,999    2.4 percent        37 percent   $1,500
 21.5   25,000 to 27,499    2.5 percent        39 percent   $1,500
 21.6   27,500 to 29,999    2.5 percent        39 percent   $1,500
 21.7   30,000 to 34,999    2.6 percent        40 percent   $1,500
 21.8   35,000 to 39,999    2.8 percent        43 percent   $1,500
 21.9   40,000 to 44,999    3.0 percent        45 percent   $1,250
 21.10  45,000 to 49,999    3.2 percent        50 percent   $1,250
 21.11  50,000 to 54,999    3.5 percent        55 percent   $1,000
 21.12  55,000 to 59,999    3.8 percent        60 percent     $750
 21.13  60,000 to 64,999    4.0 percent        65 percent     $450
 21.14  65,000 to 69,999    4.0 percent        65 percent     $250
 21.15  70,000 and up                   No refund
 21.16     The payment made to a claimant shall be the amount of the 
 21.17  state refund calculated under this subdivision.  No payment is 
 21.18  allowed if the claimant's household income is $61,930 $70,000 or 
 21.19  more. 
 21.20     Sec. 7.  Minnesota Statutes 1996, section 290A.04, is 
 21.21  amended by adding a subdivision to read: 
 21.22     Subd. 2j.  [HOMEOWNERS AND RENTERS; FOR 1998 ONLY.] In 
 21.23  1998, a claimant whose property taxes payable are in excess of 
 21.24  the percentage of the household income stated below shall pay an 
 21.25  amount equal to the percent of income shown for the appropriate 
 21.26  household income level along with the percent to be paid by the 
 21.27  claimant of the remaining amount of property taxes payable.  The 
 21.28  state refund equals the amount of property taxes payable that 
 21.29  remain, up to the state refund amount shown below. 
 21.30                       Percent          Percent       Maximum
 21.31  Household Income    of Income         Paid by        State
 21.32                                        Claimant       Refund
 21.33       $0 to 9,999    1.0 percent       20 percent     $1,500
 21.34  10,000 to 12,499    1.3 percent       25 percent     $1,400
 21.35  12,500 to 14,999    1.5 percent       27 percent     $1,400
 21.36  15,000 to 17,499    1.7 percent       28 percent     $1,300
 22.1   17,500 to 19,999    1.9 percent       29 percent     $1,300
 22.2   20,000 to 22,499    2.2 percent       35 percent     $1,200
 22.3   22,500 to 24,999    2.4 percent       37 percent     $1,200
 22.4   25,000 to 27,499    2.5 percent       39 percent     $1,100
 22.5   27,500 to 29,999    2.5 percent       39 percent     $1,100
 22.6   30,000 to 34,999    2.6 percent       40 percent     $1,000
 22.7   35,000 to 39,999    2.8 percent       43 percent       $900
 22.8   40,000 to 44,999    3.0 percent       45 percent       $800
 22.9   45,000 to 49,999    3.2 percent       50 percent       $700
 22.10  50,000 to 54,999    3.5 percent       55 percent       $500
 22.11  55,000 to 59,999    3.8 percent       60 percent       $400
 22.12  60,000 to 64,999    4.0 percent       65 percent       $300
 22.13  65,000 to 69,999    4.0 percent       65 percent       $200
 22.14  70,000 and up                   No refund
 22.15     The payment made to a claimant shall be the amount of the 
 22.16  state refund calculated under this subdivision.  No payment is 
 22.17  allowed if the claimant's household income is $70,000 or more. 
 22.18     Sec. 8.  Minnesota Statutes 1996, section 290A.07, is 
 22.19  amended to read: 
 22.20     290A.07 [TIME FOR PAYMENT.] 
 22.21     Subdivision 1.  Allowable claims filed pursuant to by 
 22.22  renters under the provisions of this chapter shall be paid by 
 22.23  the commissioner from the general fund.  Allowable claims filed 
 22.24  by homeowners under the provisions of this chapter shall be paid 
 22.25  from the general fund to the homeowner by the commissioner in 
 22.26  the form of a legally negotiated voucher.  
 22.27     Subd. 2a.  A claimant who is a renter or a homeowner who 
 22.28  occupies a manufactured home, as defined in section 273.125, 
 22.29  subdivision 8, paragraph (c), or a park trailer taxed as a 
 22.30  manufactured home under section 168.012, subdivision 9, shall 
 22.31  receive full payment after August 1 and before August 15 or 60 
 22.32  days after receipt of the application, whichever is later.  
 22.33     Subd. 3.  A claimant not included in subdivision 2a shall 
 22.34  receive a voucher for the full payment after September 15 July 1 
 22.35  and before September 30 July 8.  The voucher shall be made 
 22.36  payable to the claimant with a space provided for the claimant's 
 23.1   signature.  A second signature shall also be required on the 
 23.2   voucher with space provided for the second signature.  To redeem 
 23.3   the voucher for payment, the claimant shall endorse the voucher 
 23.4   and present or mail it either to:  (1) the appropriate financial 
 23.5   institution if the current property taxes on the claimant's 
 23.6   homestead are escrowed by an escrow agent; or (2) the county 
 23.7   treasurer of the county where the property is located if the 
 23.8   property taxes on the claimant's homestead are paid directly by 
 23.9   the claimant.  If the property taxes on the claimant's homestead 
 23.10  are paid directly by the claimant and if the amount of the 
 23.11  voucher is more than the amount of the July 15 payment 
 23.12  installment, the county treasurer shall retain the full amount 
 23.13  of the voucher and shall credit the amount of excess to the 
 23.14  October 15 payment installment on the taxpayer's property. 
 23.15     Sec. 9.  Minnesota Statutes 1996, section 290A.23, 
 23.16  subdivision 3, is amended to read: 
 23.17     Subd. 3.  [ANNUAL APPROPRIATION.] For payments made after 
 23.18  July 1, 1996, there is annually appropriated from the general 
 23.19  fund to the commissioner of revenue the amount necessary to make 
 23.20  the payments required under section 290A.04, 
 23.21  subdivisions subdivision 2 and 2h. 
 23.22     Sec. 10.  [290A.28] [PROPERTY TAX REFUND FORMS AND 
 23.23  INSTRUCTIONS.] 
 23.24     Annually for returns filed in 1998 through 2003, and then 
 23.25  at least every third year thereafter, or more frequently at the 
 23.26  discretion of the commissioner, the commissioner shall mail a 
 23.27  copy of the Minnesota property tax refund form and instructions 
 23.28  to all Minnesota taxpayers who filed an individual income tax 
 23.29  return in the previous year.  The commissioner may include the 
 23.30  Minnesota property tax refund form and instructions as an insert 
 23.31  to the individual income tax form, provided that the property 
 23.32  tax refund form and instructions are printed on a different 
 23.33  color paper than the income tax form and instructions so they 
 23.34  can easily be identified as a separate document.  The 
 23.35  commissioner may also distribute press releases statewide or use 
 23.36  any other appropriate method of notification to alert taxpayers 
 24.1   of the changes made by this article. 
 24.2      Sec. 11.  [REPEALER.] 
 24.3      Minnesota Statutes 1996, sections 290A.04, subdivisions 2a, 
 24.4   2b, and 2h; and 290A.23, subdivision 1, are repealed. 
 24.5      Sec. 12.  [EFFECTIVE DATE.] 
 24.6      Sections 1, 2, 6, and 8 are effective for homeowners for 
 24.7   claims based on property taxes payable in 1999 and thereafter, 
 24.8   and for renters for claims based on rent paid in 1998 and 
 24.9   thereafter. 
 24.10     Sections 3 to 5, 9, and 11 are effective for homeowners for 
 24.11  claims based on property taxes payable in 1998 and thereafter, 
 24.12  and for renters for claims based on rent paid in 1997 and 
 24.13  thereafter. 
 24.14     Section 7 is effective for homeowners for claims based on 
 24.15  property taxes payable in 1998, and for renters for claims based 
 24.16  on rent paid in 1997. 
 24.17                             ARTICLE 3
 24.18                     PROPERTY TAX PAYMENT DATES
 24.19     Section 1.  Minnesota Statutes 1996, section 275.07, 
 24.20  subdivision 1, is amended to read: 
 24.21     Subdivision 1.  The taxes voted by cities, counties, school 
 24.22  districts, and special districts shall be certified by the 
 24.23  proper authorities to the county auditor on or before five 
 24.24  working days after December 20 in each year.  A town must 
 24.25  certify the levy adopted by the town board to the county auditor 
 24.26  by September 15 each year.  If the town board modifies the levy 
 24.27  at a special town meeting after September 15, the town board 
 24.28  must recertify its levy to the county auditor on or before five 
 24.29  working days after December 20.  The taxes certified shall not 
 24.30  be reduced by the county auditor by the aid received under 
 24.31  section sections 273.1398, subdivision 2, and 477A.013, but 
 24.32  shall be reduced by the county auditor by the aid received under 
 24.33  section 273.1398, subdivision 3.  If a city, town, county, 
 24.34  school district, or special district fails to certify its levy 
 24.35  by that date, its levy shall be the amount levied by it for the 
 24.36  preceding year. 
 25.1      Sec. 2.  Minnesota Statutes 1996, section 276.04, 
 25.2   subdivision 3, is amended to read: 
 25.3      Subd. 3.  [MAILING OF TAX STATEMENTS.] The county treasurer 
 25.4   shall mail to taxpayers statements of their personal property 
 25.5   taxes due not later than April 15 for property taxes payable in 
 25.6   1990 and March 31 for taxes payable in 1999 and thereafter, 
 25.7   except in the case of manufactured homes and sectional 
 25.8   structures taxed as personal property.  Statements of the real 
 25.9   property taxes due shall be mailed not later than April 15 for 
 25.10  property taxes payable in 1990 and March 31 for taxes payable in 
 25.11  1999 and thereafter.  The validity of the tax shall not be 
 25.12  affected by failure of the treasurer to mail the statement.  The 
 25.13  taxpayer is defined as the owner who is responsible for the 
 25.14  payment of the tax.  
 25.15     Sec. 3.  Minnesota Statutes 1996, section 276.09, is 
 25.16  amended to read: 
 25.17     276.09 [SETTLEMENT BETWEEN AUDITOR AND TREASURER.] 
 25.18     On the later of May 20 of each year or 26 calendar days 
 25.19  after the postmark date on the envelopes containing real or 
 25.20  personal property tax statements, and on July 20 of each year, 
 25.21  the county treasurer shall make full settlement with the county 
 25.22  auditor of all receipts collected for all purposes, from the 
 25.23  date of the last settlement up to and including each day 
 25.24  mentioned.  The county auditor shall, within 30 days after the 
 25.25  settlement, send an abstract of it to the state auditor in the 
 25.26  form prescribed by the state auditor.  At the settlement the 
 25.27  treasurer shall make complete returns of the receipts on the 
 25.28  current tax list, showing the amount collected on account of the 
 25.29  several funds included in the list. 
 25.30     Settlement of receipts from the later of May 20, July 20, 
 25.31  or the actual settlement date to December 31 of each year must 
 25.32  be made as provided in section 276.111. 
 25.33     For purposes of this section, "receipts" includes all tax 
 25.34  payments received by the county treasurer on or before the 
 25.35  settlement date.  
 25.36     Sec. 4.  Minnesota Statutes 1996, section 276.10, is 
 26.1   amended to read: 
 26.2      276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 
 26.3      On the settlement day days determined in section 276.09 for 
 26.4   each year, the county auditor and county treasurer shall 
 26.5   distribute all undistributed funds in the treasury.  The funds 
 26.6   must be apportioned as provided by law, and credited to the 
 26.7   state, town, city, school district, special district and each 
 26.8   county fund.  Within 20 days after the distribution is 
 26.9   completed, the county auditor shall report to the state auditor 
 26.10  in the form prescribed by the state auditor.  The county auditor 
 26.11  shall issue a warrant for the payment of money in the county 
 26.12  treasury to the credit of the state, town, city, school 
 26.13  district, or special districts on application of the persons 
 26.14  entitled to receive the payment.  The county auditor may apply 
 26.15  the local tax rate from the year before the year of distribution 
 26.16  when apportioning and distributing delinquent tax proceeds, if 
 26.17  the composition of the previous year's local tax rate between 
 26.18  taxing districts is not significantly different from the local 
 26.19  tax rate that existed for the year of the delinquency.  
 26.20     Sec. 5.  Minnesota Statutes 1996, section 276.11, 
 26.21  subdivision 1, is amended to read: 
 26.22     Subdivision 1.  [GENERALLY.] As soon as practical after the 
 26.23  settlement day days determined in section 276.09, the county 
 26.24  treasurer shall pay to the state treasurer or the treasurer of a 
 26.25  town, city, school district, or special district, on the warrant 
 26.26  of the county auditor, all receipts of taxes levied by the 
 26.27  taxing district and deliver up all orders and other evidences of 
 26.28  indebtedness of the taxing district, taking triplicate receipts 
 26.29  for them.  The treasurer shall file one of the receipts with the 
 26.30  county auditor, and shall return one by mail on the day of its 
 26.31  receipt to the clerk of the town, city, school district, or 
 26.32  special district to which payment was made.  The clerk shall 
 26.33  keep the receipt in the clerk's office.  Upon written request of 
 26.34  the taxing district, to the extent practicable, the county 
 26.35  treasurer shall make partial payments of amounts collected 
 26.36  periodically in advance of the next settlement and 
 27.1   distribution.  A statement prepared by the county treasurer must 
 27.2   accompany each payment.  It must state the years for which taxes 
 27.3   included in the payment were collected and, for each year, the 
 27.4   amount of the taxes and any penalties on the tax.  Upon written 
 27.5   request of a taxing district, except school districts, the 
 27.6   county treasurer shall pay at least 70 percent of the estimated 
 27.7   collection within 30 days after the each settlement date 
 27.8   determined in section 276.09.  Within seven business days after 
 27.9   the due date, or 28 calendar days after the postmark date on the 
 27.10  envelopes containing real or personal property tax statements, 
 27.11  whichever is latest, the county treasurer shall pay to the 
 27.12  treasurer of the school districts 50 percent of the estimated 
 27.13  collections arising from taxes levied by and belonging to the 
 27.14  school district, unless the school district elects to receive 50 
 27.15  percent of the estimated collections arising from taxes levied 
 27.16  by and belonging to the school district after making a 
 27.17  proportionate reduction to reflect any loss in collections as 
 27.18  the result of any delay in mailing tax statements.  In that 
 27.19  case, 50 percent of those adjusted, estimated collections shall 
 27.20  be paid by the county treasurer to the treasurer of the school 
 27.21  district within seven business days of the due date.  The 
 27.22  remaining 50 percent of the estimated collections must be paid 
 27.23  to the treasurer of the school district within the next seven 
 27.24  business days of the later of the dates in the preceding 
 27.25  sentence, unless the school district elects to receive the 
 27.26  remainder of its estimated collections after a proportionate 
 27.27  reduction has been made to reflect any loss in collections as 
 27.28  the result of any delay in mailing tax statements.  In that 
 27.29  case, the remaining 50 percent of those adjusted, estimated 
 27.30  collections shall be paid by the county treasurer to the 
 27.31  treasurer of the school district within 14 days of the due 
 27.32  date.  The treasurer shall pay the balance of the amounts 
 27.33  collected to the state or to a municipal corporation or other 
 27.34  body within 60 days after the each settlement date determined in 
 27.35  section 276.09.  After 45 days interest at an annual rate of 
 27.36  eight percent accrues and must be paid to the taxing district.  
 28.1   Interest must be paid upon appropriation from the general 
 28.2   revenue fund of the county.  If not paid, it may be recovered by 
 28.3   the taxing district, in a civil action. 
 28.4      Sec. 6.  Minnesota Statutes 1996, section 276.111, is 
 28.5   amended to read: 
 28.6      276.111 [DISTRIBUTIONS AND FINAL YEAR-END SETTLEMENT.] 
 28.7      Within seven business days after October 15, the county 
 28.8   treasurer shall pay to the school districts 50 percent of the 
 28.9   estimated collections arising from taxes levied by and belonging 
 28.10  to the school district from the settlement day determined days 
 28.11  provided in section 276.09 to October 20.  The remaining 50 
 28.12  percent of the estimated tax collections must be paid to the 
 28.13  school district within the next seven business days.  Within ten 
 28.14  business days after November 15, the county treasurer shall pay 
 28.15  to the school district 100 percent of the estimated collections 
 28.16  arising from taxes levied by and belonging to the school 
 28.17  districts from October 20 to November 20. 
 28.18     Within ten business days after November 15, the county 
 28.19  treasurer shall pay to each taxing district, except any school 
 28.20  district, 100 percent of the estimated collections arising from 
 28.21  taxes levied by and belonging to each taxing district from the 
 28.22  settlement day determined days provided in section 276.09 to 
 28.23  November 20. 
 28.24     On or before January 5, the county treasurer shall make 
 28.25  full settlement with the county auditor of all receipts 
 28.26  collected from the settlement day determined days provided in 
 28.27  section 276.09 to December 31.  After subtracting any tax 
 28.28  distributions that have been made to the taxing districts in 
 28.29  October and November, the treasurer shall pay to each of the 
 28.30  taxing districts on or before January 25, the balance of the tax 
 28.31  amounts collected on behalf of each taxing district.  Interest 
 28.32  accrues at an annual rate of eight percent and must be paid to 
 28.33  the taxing district if this final settlement amount is not paid 
 28.34  by January 25.  Interest must be paid upon appropriation from 
 28.35  the general revenue fund of the county.  If not paid, it may be 
 28.36  recovered by the taxing district in a civil action. 
 29.1      Sec. 7.  Minnesota Statutes 1996, section 278.03, 
 29.2   subdivision 1, is amended to read: 
 29.3      Subdivision 1.  [REAL PROPERTY.] In the case of real 
 29.4   property, if the proceedings instituted by the filing of the 
 29.5   petition have not been completed before the 16th day of May next 
 29.6   following the filing, for all property the petitioner shall pay 
 29.7   to the county treasurer 50 34 percent of the tax levied for such 
 29.8   year against the property involved, unless permission to 
 29.9   continue prosecution of the petition without such payment is 
 29.10  obtained as herein provided. If the proceedings instituted by 
 29.11  the filing of the petition have not been completed by the 
 29.12  next July 16, the petitioner shall pay to the county treasurer 
 29.13  an additional 33 percent of the tax levied.  If the proceedings 
 29.14  instituted by the filing of the petition have not been completed 
 29.15  by October 16, or, in the case of class 1b 1 agricultural 
 29.16  homestead, class 2a agricultural homestead, and class 2b(2) 
 29.17  agricultural nonhomestead property, November 16, the petitioner 
 29.18  shall pay to the county treasurer 50 percent of the unpaid 
 29.19  balance of the taxes levied for the year against the property 
 29.20  involved if the unpaid balance is $2,000 or less and 80 percent 
 29.21  of the unpaid balance if the unpaid balance is over $2,000, 
 29.22  unless permission to continue prosecution of the petition 
 29.23  without payment is obtained as herein provided.  The petitioner, 
 29.24  upon ten days notice to the county attorney and to the county 
 29.25  auditor, given at least ten days prior to the 16th day of May or 
 29.26  the 16th day of July or the 16th day of October, or, in the case 
 29.27  of class 1b 1 agricultural homestead, class 2a agricultural 
 29.28  homestead, and class 2b(2) agricultural nonhomestead property, 
 29.29  the 16th day of November, may apply to the court for permission 
 29.30  to continue prosecution of the petition without payment; and, if 
 29.31  it is made to appear 
 29.32     (1) that the proposed review is to be taken in good faith; 
 29.33     (2) that there is probable cause to believe that the 
 29.34  property may be held exempt from the tax levied or that the tax 
 29.35  may be determined to be less than 50 percent of the amount 
 29.36  levied; and 
 30.1      (3) that it would work a hardship upon petitioner to pay 
 30.2   the taxes due, 
 30.3      the court may permit the petitioner to continue prosecution 
 30.4   of the petition without payment, or may fix a lesser amount to 
 30.5   be paid as a condition of continuing the prosecution of the 
 30.6   petition. 
 30.7      Failure to make payment of the amount required when due 
 30.8   shall operate automatically to dismiss the petition and all 
 30.9   proceedings thereunder unless the payment is waived by an order 
 30.10  of the court permitting the petitioner to continue prosecution 
 30.11  of the petition without payment.  The petition shall be 
 30.12  automatically reinstated upon payment of the entire tax plus 
 30.13  interest and penalty if the payment is made within one year of 
 30.14  the dismissal.  The county treasurer shall, upon request of the 
 30.15  petitioner, issue duplicate receipts for the tax payment, one of 
 30.16  which shall be filed by the petitioner in the proceeding. 
 30.17     Sec. 8.  Minnesota Statutes 1996, section 278.05, 
 30.18  subdivision 5, is amended to read: 
 30.19     Subd. 5.  Any time after the filing of the petition and 
 30.20  before the trial of the issues raised thereby, when the defense 
 30.21  or claim presented is that the property has been partially, 
 30.22  unfairly, or unequally assessed, or that the property has been 
 30.23  assessed at a valuation greater than its real or actual value, 
 30.24  or that a parcel which is classified as homestead class 1 or 2 
 30.25  agricultural or residential under the provisions of 
 30.26  section 273.13, subdivision 22 or 23 273.126, has been assessed 
 30.27  at a valuation which exceeds by ten percent or more the 
 30.28  valuation which the parcel would have if it were valued at the 
 30.29  average assessment/sales ratio for real property in the same 
 30.30  class in that portion of the county in which the parcel is 
 30.31  located, for which the commissioner is able to establish and 
 30.32  publish a sales ratio study, the attorney representing the 
 30.33  state, county, city or town in the proceedings may serve on the 
 30.34  petitioner, or the petitioner's attorney, and file with the 
 30.35  court administrator of the district court, an offer to reduce 
 30.36  the valuation of the property or a portion of the property to a 
 31.1   valuation set forth in the offer.  If, within ten days 
 31.2   thereafter, the petitioner, or the attorney, gives notice in 
 31.3   writing to the county attorney, or the attorney for the city or 
 31.4   town, that the offer is accepted, the official notified may file 
 31.5   the offer with proof of notice, and the court administrator 
 31.6   shall enter judgment accordingly.  Otherwise, the offer shall be 
 31.7   deemed withdrawn and evidence thereof shall not be given; and, 
 31.8   unless a lower valuation than specified in the offer is found by 
 31.9   the court, no costs or disbursements shall be allowed to the 
 31.10  petitioner, but the costs and disbursements of the state, 
 31.11  county, city or town, including interest at six percent on the 
 31.12  tax based on the amount of the offer from and after the 16th day 
 31.13  of October, or, in the case of class 1b 1 agricultural 
 31.14  homestead, class 2a agricultural homestead, class 2b(2) 
 31.15  agricultural nonhomestead property, and manufactured homes 
 31.16  treated as personal property, the 16th day of November, of the 
 31.17  year the taxes are payable, shall be taxed in its favor and 
 31.18  included in the judgment and when collected shall be credited to 
 31.19  the county revenue fund, unless the taxes were paid in full 
 31.20  before the 16th day of October, or, in the case of class 1b 1 
 31.21  agricultural homestead, class 2a agricultural homestead, and 
 31.22  class 2b(2) agricultural nonhomestead property, and manufactured 
 31.23  homes treated as personal property, the 16th day of November, of 
 31.24  the year in which the taxes were payable, in which event 
 31.25  interest shall not be taxable. 
 31.26     Sec. 9.  Minnesota Statutes 1996, section 279.01, is 
 31.27  amended by adding a subdivision to read: 
 31.28     Subd. 1a.  [DUE DATES.] All taxes on all real property are 
 31.29  due in three equal installments, to be paid on or before May 15, 
 31.30  or 20 calendar days after the postmark date on the envelope 
 31.31  containing the property tax statement, whichever is later, July 
 31.32  15, and October 15. 
 31.33     Sec. 10.  Minnesota Statutes 1996, section 279.01, is 
 31.34  amended by adding a subdivision to read: 
 31.35     Subd. 2a.  [PENALTIES.] Late payments of real property tax 
 31.36  incur a penalty.  The rate of the penalty increases with each 
 32.1   successive month that the payment is late and is dependent upon 
 32.2   the class of property taxed.  For purposes of the penalties 
 32.3   imposed under this subdivision, the market value of commercial 
 32.4   and industrial property classified under section 273.127, 
 32.5   subdivision 3, clauses (3) to (5), shall be considered class 4.  
 32.6   The following is the schedule of penalties for late payment of 
 32.7   property tax: 
 32.8   
 32.9   Property                May  June  July  Aug.  July  Aug.
 32.10                          16     1     1    1     16    16
 32.11  Class 1 and Class 2
 32.13  1st Installment
 32.14  (May 15)                4%     6%    7%   8%    --    8%  
 32.15   
 32.16  2nd Installment
 32.17  (July 15)                                       8%   10%
 32.19  3rd Installment  
 32.20  (October 15)  
 32.21    
 32.22    
 32.23    
 32.24  Class 3 and Class 4
 32.25    
 32.26  1st Installment 
 32.27  (May 15)                8%    10%   10%  10%    --   10%
 32.28    
 32.29  2nd Installment 
 32.30  (July 15)                                       8%   10%
 32.32  3rd Installment 
 32.33  (October 15) 
 32.34   
 32.35    
 32.36                    Sept.  Oct.   Nov.  Nov. Dec.  The first
 32.37                      1     16     1     16   1    business day
 32.38                                                   in January
 32.39  Class 1 and 
 32.40  Class 2
 32.42  1st Installment
 32.43  (May 15)           8%     8%    8%     --   8%    10%
 32.45  2nd Installment
 32.46  (July 15)          8%     8%    8%     --   8%    10%
 32.48  3rd Installment
 32.49  (October 15)              4%    8%     --   8%    10%
 32.50   
 32.51    
 32.52    
 32.53  Class 3 and 
 32.54  Class 4  
 32.56  1st Installment  
 32.57  (May 15)          12%    12%   12%     --  12%    14%
 32.58    
 32.59  2nd Installment 
 32.60  (July 15)         12%    12%   12%     --  12%    14% 
 32.61   
 32.62  3rd Installment 
 32.63  (October 15)              8%   10%    12%  12%    14%
 33.1      Sec. 11.  Minnesota Statutes 1996, section 279.01, is 
 33.2   amended by adding a subdivision to read: 
 33.3      Subd. 3a.  [EXTENDED DUE DATES.] Notwithstanding 
 33.4   subdivision 2a, if any of the due dates provided in subdivision 
 33.5   1a are extended as a result of a delay in mailing property tax 
 33.6   statements, no penalty accrues if the tax is paid by the 
 33.7   extended due date.  If the tax is not paid by the extended due 
 33.8   date, then all penalties that would have accrued if the due date 
 33.9   had not been extended must be charged. 
 33.10     Sec. 12.  [REPEALER.] 
 33.11     Minnesota Statutes 1996, section 279.01, subdivisions 1 and 
 33.12  3, are repealed. 
 33.13     Sec. 13.  [EFFECTIVE DATE.] 
 33.14     This article is effective for taxes levied in 1998, payable 
 33.15  in 1999 and thereafter. 
 33.16                             ARTICLE 4
 33.17                        LOCAL GOVERNMENT AID
 33.18     Section 1.  Minnesota Statutes 1996, section 477A.011, is 
 33.19  amended by adding a subdivision to read: 
 33.20     Subd. 25a.  [HOUSEHOLD POVERTY RATE.] "Household poverty 
 33.21  rate" for a city is 100 times the ratio of the number of 
 33.22  households in the city with income below the poverty level to 
 33.23  the total number of households in the city.  This ratio is based 
 33.24  on information from the most recently available federal census. 
 33.25     Sec. 2.  Minnesota Statutes 1996, section 477A.011, is 
 33.26  amended by adding a subdivision to read: 
 33.27     Subd. 25b.  [PER CAPITA CRIME RATE.] "Per capita crime rate"
 33.28  for a city is the number of part I criminal offenses, as defined 
 33.29  by the Minnesota department of public safety, for the most 
 33.30  recently available year, divided by the city's population.  If 
 33.31  data on part I criminal offenses are not available for a city, 
 33.32  its "per capita crime rate" is (1) the number of part I criminal 
 33.33  offenses in the county minus the part I criminal offenses in 
 33.34  cities in the county for which separate crime statistics are 
 33.35  reported; divided by (2) the county population minus the sum of 
 33.36  the population in cities for which separate crime statistics are 
 34.1   reported. 
 34.2      Sec. 3.  Minnesota Statutes 1996, section 477A.011, 
 34.3   subdivision 34, is amended to read: 
 34.4      Subd. 34.  [CITY REVENUE NEED.] (a) For a city with a 
 34.5   population equal to or greater than 2,500, "city revenue need" 
 34.6   is the sum of (1) 3.462312 2.748 times the pre-1940 housing 
 34.7   percentage; plus (2) 2.093826 times the commercial industrial 
 34.8   percentage 12.773 times the per capita crime rate; plus 
 34.9   (3) 6.862552 3.127 times the population decline percentage; plus 
 34.10  (4) .00026 .00027 times the city population; plus (5) 
 34.11  152.0141 2.385 times the household poverty rate; plus (6) 151.55.
 34.12     (b) For a city with a population less than 2,500, "city 
 34.13  revenue need" is the sum of (1) 1.795919 times the pre-1940 
 34.14  housing percentage; plus (2) 1.562138 times the commercial 
 34.15  industrial percentage; plus (3) 4.177568 times the population 
 34.16  decline percentage; plus (4) 1.04013 times the transformed 
 34.17  population; minus (5) 107.475. 
 34.18     (c) The city revenue need cannot be less than zero. 
 34.19     (d) For calendar year 1995 and subsequent years, the city 
 34.20  revenue need for a city with a population less than 2,500, as 
 34.21  determined in paragraphs (a) to (c), is multiplied by the ratio 
 34.22  of the annual implicit price deflator for state and local 
 34.23  government purchases, as prepared by the United States 
 34.24  Department of Commerce, for the most recently available year to 
 34.25  the 1993 implicit price deflator for state and local government 
 34.26  purchases.  For calendar year 1999 and subsequent years, the 
 34.27  city revenue need for a city with a population of 2,500 or more, 
 34.28  as determined in paragraphs (a) to (c), is multiplied by the 
 34.29  ratio of the annual implicit price deflator for state and local 
 34.30  government purchases, as prepared by the United States 
 34.31  Department of Commerce, for the most recently available year to 
 34.32  the 1996 implicit price deflator for state and local government 
 34.33  purchases. 
 34.34     Sec. 4.  Minnesota Statutes 1996, section 477A.011, 
 34.35  subdivision 35, is amended to read: 
 34.36     Subd. 35.  [TAX EFFORT RATE.] "Tax effort rate" means the 
 35.1   sum of the net levy for all cities divided by the sum of the 
 35.2   city net tax capacity for all cities.  For purposes of this 
 35.3   section, "net levy" means the city levy, after all adjustments, 
 35.4   used for calculating the local tax rate under section 275.08 for 
 35.5   taxes payable in the year prior to the aid distribution.  The 
 35.6   fiscal disparity distribution levy under chapter 276A or 473F is 
 35.7   included in net levy. (a) For a city with a population equal to 
 35.8   or greater than 2,500, "tax effort rate" is the sum of the net 
 35.9   levy for all cities with populations equal to or greater than 
 35.10  2,500 divided by the sum of the city net tax capacity for all 
 35.11  cities with populations equal to or greater than 2,500.  
 35.12     (b) For a city with a population less than 2,500, "tax 
 35.13  effort rate" is the sum of the net levy for all cities with 
 35.14  populations less than 2,500 divided by the sum of the city net 
 35.15  tax capacity for all cities with populations less than 2,500.  
 35.16  For purposes of this section, "net levy" means the city levy, 
 35.17  after all adjustments, used for calculating the local tax rate 
 35.18  under section 275.08, for taxes payable in the year prior to the 
 35.19  aid distribution.  The fiscal disparity distribution levy under 
 35.20  chapter 276A or 473F is included in net levy.  If the city 
 35.21  formula aid calculated under section 477A.013, subdivision 9, is 
 35.22  less than the total amount available for aid under section 
 35.23  477A.03, the tax effort rate shall be reduced so that the total 
 35.24  of city formula aid calculated under section 477A.013, 
 35.25  subdivision 9, is equal to the total amount available for aid 
 35.26  under section 477A.03. 
 35.27     Sec. 5.  Minnesota Statutes 1996, section 477A.011, 
 35.28  subdivision 37, is amended to read: 
 35.29     Subd. 37.  [BASE REDUCTION PERCENTAGE.] "Base reduction 
 35.30  percentage" is (1) the difference between the amount available 
 35.31  for city aid under section 477A.03 for the year for which aid is 
 35.32  being calculated and the amount available for city aid under 
 35.33  section 477A.03 for calendar year 1994, (2) divided by the sum 
 35.34  of the city aid base for all cities and (3) multiplied by 100.  
 35.35  The reduction percentage for any year may not be less than the 
 35.36  reduction percentage from the previous year.  For aid paid in 
 36.1   calendar year 1994, the reduction percentage is zero.  The 
 36.2   reduction percentage may not be more than 100 percent zero for 
 36.3   aids payable in calendar year 1998, 20 percent for aids payable 
 36.4   in calendar year 1999, 40 percent for aids payable in calendar 
 36.5   year 2000, 60 percent for aids payable in calendar year 2001, 80 
 36.6   percent for aids payable in calendar year 2002, and 100 percent 
 36.7   for aids payable in calendar year 2003 and thereafter. 
 36.8      Sec. 6.  Minnesota Statutes 1996, section 477A.013, 
 36.9   subdivision 8, is amended to read: 
 36.10     Subd. 8.  [CITY FORMULA AID.] In calendar year 1994 1998 
 36.11  and subsequent years, the formula aid for a city is equal to the 
 36.12  need increase percentage multiplied by the difference between 
 36.13  (1) the city's revenue need multiplied by its population, and 
 36.14  (2) the city's net tax capacity multiplied by the tax effort 
 36.15  rate.  No city may have a formula aid amount less than zero.  
 36.16  The need increase percentage must be the same for all 
 36.17  cities with a population under 2,500.  The need increase 
 36.18  percentage must be the same for all cities with a population of 
 36.19  2,500 or more.  
 36.20     Notwithstanding the prior sentence, in 1995 only, the need 
 36.21  increase percentage for a city shall be twice the need increase 
 36.22  percentage applicable to other cities if:  
 36.23     (1) the city, in 1992 or 1993, transferred an amount from 
 36.24  governmental funds to their sewer and water fund, and 
 36.25     (2) the amount transferred exceeded their net levy for 
 36.26  taxes payable in the year in which the transfer occurred.  
 36.27     The applicable need increase percentage or percentages must 
 36.28  be calculated by the department of revenue so that the total of 
 36.29  the aid under subdivision 9, distributed to cities with a 
 36.30  population less than 2,500 and to cities with a population of 
 36.31  2,500 or more, equals the total amount available for aid to each 
 36.32  group of cities under section 477A.03.  
 36.33     Sec. 7.  Minnesota Statutes 1996, section 477A.013, 
 36.34  subdivision 9, is amended to read: 
 36.35     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 36.36  1994 1998 and thereafter, each city shall receive an aid 
 37.1   distribution equal to the sum of (1) the city formula aid under 
 37.2   subdivision 8, and (2) its city aid base multiplied by a 
 37.3   percentage equal to 100 percent minus the base reduction 
 37.4   percentage. 
 37.5      (b) The percentage increase for a first class city in 
 37.6   calendar year 1995 and thereafter shall not exceed the 
 37.7   percentage increase in the sum of the aid to all cities under 
 37.8   this section in the current calendar year compared to the sum of 
 37.9   the aid to all cities in the previous year. 
 37.10     (c) The total aid for any city, except a first class city, 
 37.11  shall not exceed the sum of (1) ten percent of the city's net 
 37.12  levy for the year prior to the aid distribution plus (2) its 
 37.13  total aid in the previous year before any increases or decreases 
 37.14  under sections 16A.711, subdivision 5, and 477A.0132. 
 37.15     (d) Notwithstanding paragraph (c), in 1995 only, for cities 
 37.16  which in 1992 or 1993 transferred an amount from governmental 
 37.17  funds to their sewer and water fund in an amount greater than 
 37.18  their net levy for taxes payable in the year in which the 
 37.19  transfer occurred, the total aid shall not exceed the sum of (1) 
 37.20  20 percent of the city's net levy for the year prior to the aid 
 37.21  distribution plus (2) its total aid in the previous year before 
 37.22  any increases or decreases under sections 16A.711, subdivision 
 37.23  5, and 477A.0132. 
 37.24     Sec. 8.  Minnesota Statutes 1996, section 477A.03, 
 37.25  subdivision 2, is amended to read: 
 37.26     Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
 37.27  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 37.28  annually appropriated from the general fund to the commissioner 
 37.29  of revenue.  For aids payable in 1996 1998 and thereafter, the 
 37.30  total aids paid under sections 477A.013, subdivision 9, and 
 37.31  477A.0122 are the amounts certified to be paid in the previous 
 37.32  year, adjusted for inflation as provided under subdivision 3.  
 37.33  Aid payments to counties under section 477A.0121 are limited to 
 37.34  $20,265,000 in 1996.  Aid payments to counties under section 
 37.35  477A.0121 are limited to $27,571,625 in 1997. is limited to 
 37.36  $365,100,000, and for aids payable in 1999 and thereafter, it is 
 38.1   limited to the amount paid in the previous year, plus the amount 
 38.2   by which the aid payable to cities under section 273.1398, 
 38.3   subdivision 2, for that year is reduced from the previous year's 
 38.4   payment amount.  For aid payable in 1998, the total aid paid 
 38.5   under section 477A.013, subdivision 9, shall be apportioned 
 38.6   between cities with a population less than 2,500 and cities with 
 38.7   a population of 2,500 or more, based on each group's share of 
 38.8   the total city appropriation for aids payable in 1997. 
 38.9      Aid payments to counties under section 477A.0121 are 
 38.10  limited to $27,500,000 in 1998 and 1999, $33,000,000 in 2000, 
 38.11  $44,000,000 in 2001, $55,000,000 in 2002, and $68,800,000 in 
 38.12  2003.  Aid payments to counties under section 477A.0122 are 
 38.13  limited to $1,600,000 in 1998 and 1999, $1,900,000 in 2000, 
 38.14  $2,600,000 in 2001, $3,200,000 in 2002, and $4,000,000 in 2004. 
 38.15     For aid payable in 1998 2004 and thereafter, the total aids 
 38.16  paid under section sections 477A.0121 and 477A.0122 are the 
 38.17  amounts certified to be paid in the previous year, adjusted for 
 38.18  inflation as provided under subdivision 3. 
 38.19     Sec. 9.  [REPEALER.] 
 38.20     Minnesota Statutes 1996, section 477A.05, is repealed. 
 38.21     Sec. 10.  [EFFECTIVE DATE.] 
 38.22     Sections 1 to 8 are effective for aids payable in 1998 and 
 38.23  thereafter. 
 38.24                             ARTICLE 5
 38.25                      STATE AID RESTRUCTURING
 38.26     Section 1.  Minnesota Statutes 1996, section 124.3201, 
 38.27  subdivision 1, is amended to read: 
 38.28     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 38.29  section and sections 124.3202 and 124.321, the definitions in 
 38.30  this subdivision apply. 
 38.31     (a) "Base year" for fiscal year 1996 and fiscal year 1997 
 38.32  means the 1994 summer program and the 1994-1995 school year.  
 38.33  Base year for later fiscal years means the second fiscal year 
 38.34  preceding the fiscal year for which aid will be paid. 
 38.35     (b) "Basic revenue" has the meaning given it in section 
 38.36  124A.22, subdivision 2.  For the purposes of computing basic 
 39.1   revenue pursuant to this section, each child with a disability 
 39.2   shall be counted as prescribed in section 124.17, subdivision 1. 
 39.3      (c) "Essential personnel" means teachers, related services, 
 39.4   and support services staff providing direct services to students.
 39.5      (d) "Average daily membership" has the meaning given it in 
 39.6   section 124.17. 
 39.7      (e) "Program growth factor" means 1.00 for fiscal year 1998 
 39.8   and later. 
 39.9      (f) "Aid percentage factor" means 60 percent for fiscal 
 39.10  year 1996, 70 percent for fiscal year 1997, 80 percent for 
 39.11  fiscal year 1998, 90 percent for fiscal year 1999, and 100 
 39.12  percent for fiscal years 2000 and later. 
 39.13     (g) "Levy percentage factor" means 100 minus the aid 
 39.14  percentage factor for that year. 
 39.15     Sec. 2.  Minnesota Statutes 1996, section 124A.23, 
 39.16  subdivision 1, is amended to read: 
 39.17     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
 39.18  commissioner shall establish the general education tax rate by 
 39.19  July 1 of each year for levies payable in the following year.  
 39.20  The general education tax capacity rate shall be a rate, rounded 
 39.21  up to the nearest tenth of a percent, that, when applied to the 
 39.22  adjusted net tax capacity for all districts, raises the amount 
 39.23  specified in this subdivision.  The general education tax rate 
 39.24  shall be the rate that raises $1,054,000,000 for fiscal year 
 39.25  1996 and $1,359,000,000 for fiscal year years 1997 and 1998, 
 39.26  $1,214,800,000 for fiscal year 1999, $1,172,600,000 for fiscal 
 39.27  year 2000, $1,152,100,000 for fiscal year 2001, $1,139,300,000 
 39.28  for fiscal year 2002, and $1,135,900,000 for fiscal year 2003 
 39.29  and later subsequent fiscal years.  The general education tax 
 39.30  rate may not be changed due to changes or corrections made to a 
 39.31  district's adjusted net tax capacity after the tax rate has been 
 39.32  established.  
 39.33     Sec. 3.  Minnesota Statutes 1996, section 145A.13, 
 39.34  subdivision 2, is amended to read: 
 39.35     Subd. 2.  [LOCAL MATCH.] Each community health board that 
 39.36  receives a subsidy shall provide local matching money equal 
 40.1   to that 40 percent of the subsidy amount during the year for 
 40.2   which the subsidy is made, subject to the following provisions: 
 40.3      (a) the local matching funds may include local tax levies, 
 40.4   gifts, fees for services, and revenues from contracts; 
 40.5      (b) when the amount of local matching funds for a community 
 40.6   health board is less than the amount specified, the subsidy 
 40.7   provided for that community health board under this section 
 40.8   shall be reduced proportionally; 
 40.9      (c) when a community health board fails to expend the full 
 40.10  amount of the subsidy to which it would be entitled in any one 
 40.11  year under the provisions of sections 145A.09 to 145A.13, the 
 40.12  state commissioner of health may retain the surplus, subject to 
 40.13  disbursement to the community health board in the following 
 40.14  calendar year if the community health board can demonstrate a 
 40.15  need for and ability to expend the surplus for the purposes 
 40.16  provided in section 145A.10; and 
 40.17     (d) a city organized under the provisions of sections 
 40.18  145A.09 to 145A.13 that levies a tax for provision of community 
 40.19  health services shall be exempted from any county levy for the 
 40.20  same services to the extent of the levy imposed by the city. 
 40.21     Sec. 4.  Minnesota Statutes 1996, section 256E.06, 
 40.22  subdivision 5, is amended to read: 
 40.23     Subd. 5.  [COMMUNITY SOCIAL SERVICE LEVY.] In each calendar 
 40.24  year, for taxes payable the following year, a county board shall 
 40.25  levy upon all taxable property in the county a tax for community 
 40.26  social services at least equal to 40 percent of the amount 
 40.27  determined in subdivisions 1 and 2.  Money for community social 
 40.28  services provided to a county by a municipal levy may, for the 
 40.29  purposes of this section, be counted as partial fulfillment of 
 40.30  the local levy requirement.  All money available to counties 
 40.31  pursuant to this section may be used by counties to match 
 40.32  federal money.  It is the intention of the legislature that the 
 40.33  aid paid to counties under this section be used to provide 
 40.34  property tax relief within the county. 
 40.35     Sec. 5.  Minnesota Statutes 1996, section 273.1398, 
 40.36  subdivision 2, is amended to read: 
 41.1      Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] For aids 
 41.2   payable in 1997, homestead and agricultural credit aid for each 
 41.3   unique taxing jurisdiction equals the product of (1) the 
 41.4   homestead and agricultural credit aid base, and (2) the growth 
 41.5   adjustment factor, plus the net tax capacity adjustment and the 
 41.6   fiscal disparity adjustment.  
 41.7      Homestead and agricultural credit aid for aids payable in 
 41.8   1998 shall be determined as follows:  for each special taxing 
 41.9   district, an amount equal to homestead and agricultural credit 
 41.10  aid payable in 1997; for each county, an amount equal to 
 41.11  homestead and agricultural credit aid for aids payable in 1997, 
 41.12  minus three percent of the county's 1996 adjusted net tax 
 41.13  capacity, determined according to section 124.2131; for each 
 41.14  city or town, an amount equal to homestead and agricultural 
 41.15  credit aid for aids payable in 1997, minus two percent of the 
 41.16  city's or town's 1996 adjusted net tax capacity, determined 
 41.17  according to section 124.2131; and for each school district, an 
 41.18  amount equal to homestead and agricultural credit aid for aids 
 41.19  payable in 1997, minus one percent of the school district's 1996 
 41.20  adjusted net tax capacity, determined according to section 
 41.21  124.2131. 
 41.22     Homestead and agricultural credit aid for all taxing 
 41.23  jurisdictions except school districts for aids payable in 1999 
 41.24  to 2001 shall be determined as the following percentages of aid 
 41.25  payable in 1998:  for aids payable in 1999, 80 percent; for aids 
 41.26  payable in 2000, 60 percent; for aids payable in 2001, 40 
 41.27  percent; and for aids payable in 2002, 20 percent. 
 41.28     Sec. 6.  Minnesota Statutes 1996, section 273.1398, 
 41.29  subdivision 3, is amended to read: 
 41.30     Subd. 3.  [DISPARITY REDUCTION AID.] For taxes payable in 
 41.31  1995, and subsequent years to 1998, the amount of disparity aid 
 41.32  certified for each taxing district within each unique taxing 
 41.33  jurisdiction for taxes payable in the prior year shall be 
 41.34  multiplied by the ratio of (1) the jurisdiction's tax capacity 
 41.35  using the class rates for taxes payable in the year for which 
 41.36  aid is being computed, to (2) its tax capacity using the class 
 42.1   rates for taxes payable in the year prior to that for which aid 
 42.2   is being computed, both based upon market values for taxes 
 42.3   payable in the year prior to that for which aid is being 
 42.4   computed.  For the purposes of this aid determination, disparity 
 42.5   reduction aid certified for taxes payable in the prior year for 
 42.6   a taxing entity other than a town or school district is deemed 
 42.7   to be county government disparity reduction aid.  For taxes 
 42.8   payable in 1992 and subsequent years, the amount of disparity 
 42.9   aid certified to each taxing jurisdiction shall be reduced by 
 42.10  any reductions required in the current year or permanent 
 42.11  reductions required in previous years under section 477A.0132. 
 42.12     Disparity reduction aid for all taxing jurisdictions for 
 42.13  aids payable in 1999 to 2002 shall be determined as the 
 42.14  following percentages of aids payable in 1998:  for aids payable 
 42.15  in 1999, 80 percent; for aids payable in 2000, 60 percent; for 
 42.16  aids payable in 2001, 40 percent; and for aids payable in 2002, 
 42.17  20 percent. 
 42.18     Sec. 7.  [477A.06] [LEVY RESTRAINT AID.] 
 42.19     Subdivision 1.  [ELIGIBILITY.] Each city is eligible for 
 42.20  levy restraint aid as provided in this section.  A city will 
 42.21  receive the aid for a calendar year after a levy year in which 
 42.22  the percentage increase in its per capita levy plus aid over the 
 42.23  previous levy year's per capita levy plus aid does not exceed 
 42.24  the percentage increase in Minnesota personal income for the 
 42.25  previous calendar year.  As used in this section "levy plus aid" 
 42.26  means the net levy, as defined in section 477A.011, subdivision 
 42.27  35, plus aids paid to the city under sections 273.1398, 
 42.28  subdivision 2, and 477A.013, subdivision 9. 
 42.29     Subd. 2.  [DETERMINATION OF AID.] A city is eligible for 
 42.30  levy restraint aid according to the following formula: 
 42.31        levy plus aid increase as a
 42.32         percent of the rate of        percent of per capita aid
 42.33      personal income increase             allocation allowed 
 42.34              Over 100 percent                   0 percent
 42.35              75% - 100 percent                 25 percent
 42.36              50% - 75 percent                  50 percent
 43.1               25% - 50 percent                  75 percent
 43.2               Less than 25 percent             100 percent
 43.3      Subd. 3.  [PER CAPITA AID ALLOCATION.] (a) The maximum 
 43.4   amount available for distribution under this section in 1998 is 
 43.5   $50,000,000.  For 1999 and subsequent years, the maximum amount 
 43.6   available for distribution under this section is the amount 
 43.7   available for distribution under this section for the preceding 
 43.8   year, plus the amount of increase in the aid that would be 
 43.9   payable under section 477A.013, subdivision 9, if that aid were 
 43.10  increased according to section 477A.03, subdivision 3. 
 43.11     (b) Of that amount, in 1998, $44,400,000 is available for 
 43.12  distribution to cities with a population of 2,500 or greater and 
 43.13  $5,600,000 is available for cities with a population under 
 43.14  2,500.  For 1999 and subsequent years, the total amount 
 43.15  available for distribution under this subdivision will be 
 43.16  divided on a per capita basis into separate funds for 
 43.17  distributions to cities with a population of 2,500 or greater 
 43.18  and cities with a population under 2,500. 
 43.19     (c) Each year, the per capita aid allocation amount will be 
 43.20  determined by dividing the total amount available for 
 43.21  distribution by the population residing in cities in the state. 
 43.22     Subd. 4.  [DISTRIBUTION.] The distribution to each eligible 
 43.23  city will be equal to the percent of per capita aid allocation 
 43.24  for which the city qualifies under subdivision 2, multiplied by 
 43.25  the per capita aid allocation amount determined under 
 43.26  subdivision 3, paragraph (c), multiplied by the population of 
 43.27  the city. 
 43.28     Subd. 5.  [USE OF UNALLOCATED AID.] The amount by which the 
 43.29  maximum aid available for distribution exceeds the actual amount 
 43.30  distributed for any year, will be made available the following 
 43.31  year for distribution as general education revenue under section 
 43.32  124A.22. 
 43.33     Subd. 6.  [PAYMENT DATES.] The commissioner of revenue 
 43.34  shall make payments of the aid to cities in two installments on 
 43.35  July 20 and December 26 annually. 
 43.36     Subd. 7.  [APPROPRIATION.] The amount necessary to pay the 
 44.1   aids provided in this section is appropriated annually from the 
 44.2   general fund to the commissioner of revenue. 
 44.3      Sec. 8.  [COMMUNITY HEALTH SERVICES APPROPRIATION.] 
 44.4      The following amounts are appropriated from the general 
 44.5   fund to the commissioner of health to provide subsidies under 
 44.6   Minnesota Statutes, section 145A.13:  $17,400,000 for fiscal 
 44.7   year 2000, $23,200,000 for fiscal year 2001, $29,000,000 for 
 44.8   fiscal year 2002, $36,300,000 for fiscal year 2003, and 
 44.9   $28,200,000 for fiscal year 2004. 
 44.10     Sec. 9.  [APPROPRIATION; ADMINISTRATIVE COSTS.] 
 44.11     $5,000,000 is appropriated for fiscal year 1998 from the 
 44.12  general fund to the commissioner of revenue to reimburse 
 44.13  counties for costs of compliance with this act.  This 
 44.14  appropriation must be apportioned among the counties and 
 44.15  distributed by the commissioner of revenue in the same manner 
 44.16  that the appropriation in Laws 1988, chapter 719, article 5, 
 44.17  section 85, was apportioned and distributed. 
 44.18     Sec. 10.  [APPROPRIATION; COMMUNITY SOCIAL SERVICES 
 44.19  GRANTS.] 
 44.20     The following amounts are appropriated from the general 
 44.21  fund to the commissioner of human services for payment of aid 
 44.22  under Minnesota Statutes, section 256E.06:  $50,500,000 in 
 44.23  calendar year 1998, $50,500,000 in calendar year 1999, 
 44.24  $60,600,000 in calendar year 2000, $80,800,000 in calendar year 
 44.25  2001, $101,000,000 in calendar year 2002, and $126,300,000 in 
 44.26  calendar year 2003 and subsequent years.  The increased 
 44.27  appropriation available under this section must be used to 
 44.28  increase each county's aid proportionately over the aid received 
 44.29  in calendar year 1996. 
 44.30     Sec. 11.  [REPEALER.] 
 44.31     (a) Minnesota Statutes 1996, sections 273.1398; and 275.08, 
 44.32  subdivisions 1c and 1d, are repealed. 
 44.33     (b) Minnesota Statutes 1996, section 256E.06, subdivision 
 44.34  2, is repealed. 
 44.35     Sec. 12.  [EFFECTIVE DATE.] 
 44.36     Sections 1, 2, and 4 are effective for property taxes 
 45.1   payable in 1999, and thereafter.  Section 3 is effective January 
 45.2   1, 1999, and thereafter.  Sections 5 and 7 are effective July 1, 
 45.3   1997, and thereafter.  Section 11, paragraph (a), is effective 
 45.4   for taxes payable 2003 and subsequent years.  Section 11, 
 45.5   paragraph (b), is effective for distributions for calendar year 
 45.6   1999, and subsequent years. 
 45.7                              ARTICLE 6
 45.8               STATE FINANCING OF COURT ADMINISTRATORS
 45.9      Section 1.  Minnesota Statutes 1996, section 43A.02, 
 45.10  subdivision 25, is amended to read: 
 45.11     Subd. 25.  [JUDICIAL BRANCH.] "Judicial branch" means all 
 45.12  judges of the appellate courts, all employees of the appellate 
 45.13  courts, including commissions, boards, and committees 
 45.14  established by the supreme court, the board of law examiners, 
 45.15  the law library, the office of the state public defender, 
 45.16  district public defenders and their employees, all judges of all 
 45.17  courts of law, district court referees, judicial officers, court 
 45.18  reporters, law clerks, district administration employees under 
 45.19  section 484.68, court administrator or employee of the court and 
 45.20  guardian ad litem program employees in the eighth judicial 
 45.21  district administrators or their staff under chapter 485, and 
 45.22  other agencies placed in the judicial branch by law.  Judicial 
 45.23  branch does not include district administration or public 
 45.24  defenders or their employees in the second and fourth judicial 
 45.25  districts, court administrators or their staff under chapter 
 45.26  485, guardians ad litem, or other employees within the court 
 45.27  system whose salaries are paid by the county, other than 
 45.28  employees who remain on the county payroll under section 
 45.29  480.181, subdivision 2.  
 45.30     Sec. 2.  Minnesota Statutes 1996, section 43A.24, 
 45.31  subdivision 2, is amended to read: 
 45.32     Subd. 2.  [OTHER ELIGIBLE PERSONS.] The following persons 
 45.33  are eligible for state paid life insurance and hospital, 
 45.34  medical, and dental benefits as determined in applicable 
 45.35  collective bargaining agreements or by the commissioner or by 
 45.36  plans pursuant to section 43A.18, subdivision 6, or by the board 
 46.1   of regents for employees of the University of Minnesota not 
 46.2   covered by collective bargaining agreements.  Coverages made 
 46.3   available, including optional coverages, are as contained in the 
 46.4   plan established pursuant to section 43A.18, subdivision 2: 
 46.5      (a) a member of the state legislature, provided that 
 46.6   changes in benefits resulting in increased costs to the state 
 46.7   shall not be effective until expiration of the term of the 
 46.8   members of the existing house of representatives.  An eligible 
 46.9   member of the state legislature may decline to be enrolled for 
 46.10  state paid coverages by filing a written waiver with the 
 46.11  commissioner.  The waiver shall not prohibit the member from 
 46.12  enrolling the member or dependents for optional coverages, 
 46.13  without cost to the state, as provided for in section 43A.26.  A 
 46.14  member of the state legislature who returns from a leave of 
 46.15  absence to a position previously occupied in the civil service 
 46.16  shall be eligible to receive the life insurance and hospital, 
 46.17  medical, and dental benefits to which the position is entitled; 
 46.18     (b) a permanent employee of the legislature or a permanent 
 46.19  employee of a permanent study or interim committee or commission 
 46.20  or a state employee on leave of absence to work for the 
 46.21  legislature, during a regular or special legislative session; 
 46.22     (c) a judge of the appellate courts or an officer or 
 46.23  employee of these courts; a judge of the district court, a judge 
 46.24  of county court, or a judge of county municipal court; a 
 46.25  district court referee, judicial officer, court reporter, or law 
 46.26  clerk; a district administrator; an employee of the office of 
 46.27  the district administrator that is not in the second or fourth 
 46.28  judicial district; a court administrator or an employee of the 
 46.29  office of the court administrator in the eighth judicial 
 46.30  district, and a guardian ad litem program administrator in the 
 46.31  eighth judicial district; 
 46.32     (d) a salaried employee of the public employees retirement 
 46.33  association; 
 46.34     (e) a full-time military or civilian officer or employee in 
 46.35  the unclassified service of the department of military affairs 
 46.36  whose salary is paid from state funds; 
 47.1      (f) a salaried employee of the Minnesota historical 
 47.2   society, whether paid from state funds or otherwise, who is not 
 47.3   a member of the governing board; 
 47.4      (g) an employee of the regents of the University of 
 47.5   Minnesota; 
 47.6      (h) notwithstanding section 43A.27, subdivision 3, an 
 47.7   employee of the state of Minnesota or the regents of the 
 47.8   University of Minnesota who is at least 60 and not yet 65 years 
 47.9   of age on July 1, 1982, who is otherwise eligible for employee 
 47.10  and dependent insurance and benefits pursuant to section 43A.18 
 47.11  or other law, who has at least 20 years of service and retires, 
 47.12  earlier than required, within 60 days of March 23, 1982; or an 
 47.13  employee who is at least 60 and not yet 65 years of age on July 
 47.14  1, 1982, who has at least 20 years of state service and retires, 
 47.15  earlier than required, from employment at Rochester state 
 47.16  hospital after July 1, 1981; or an employee who is at least 55 
 47.17  and not yet 65 years of age on July 1, 1982, and is covered by 
 47.18  the Minnesota state retirement system correctional employee 
 47.19  retirement plan or the state patrol retirement fund, who has at 
 47.20  least 20 years of state service and retires, earlier than 
 47.21  required, within 60 days of March 23, 1982.  For purposes of 
 47.22  this clause, a person retires when the person terminates active 
 47.23  employment in state or University of Minnesota service and 
 47.24  applies for a retirement annuity.  Eligibility shall cease when 
 47.25  the retired employee attains the age of 65, or when the employee 
 47.26  chooses not to receive the annuity that the employee has applied 
 47.27  for.  The retired employee shall be eligible for coverages to 
 47.28  which the employee was entitled at the time of retirement, 
 47.29  subject to any changes in coverage through collective bargaining 
 47.30  or plans established pursuant to section 43A.18, for employees 
 47.31  in positions equivalent to that from which retired, provided 
 47.32  that the retired employee shall not be eligible for state-paid 
 47.33  life insurance.  Coverages shall be coordinated with relevant 
 47.34  health insurance benefits provided through the federally 
 47.35  sponsored Medicare program; 
 47.36     (i) an employee of an agency of the state of Minnesota 
 48.1   identified through the process provided in this paragraph who is 
 48.2   eligible to retire prior to age 65.  The commissioner and the 
 48.3   exclusive representative of state employees shall enter into 
 48.4   agreements under section 179A.22 to identify employees whose 
 48.5   positions are in programs that are being permanently eliminated 
 48.6   or reduced due to federal or state policies or practices.  
 48.7   Failure to reach agreement identifying these employees is not 
 48.8   subject to impasse procedures provided in chapter 179A.  The 
 48.9   commissioner must prepare a plan identifying eligible employees 
 48.10  not covered by a collective bargaining agreement in accordance 
 48.11  with the process outlined in section 43A.18, subdivisions 2 and 
 48.12  3.  For purposes of this paragraph, a person retires when the 
 48.13  person terminates active employment in state service and applies 
 48.14  for a retirement annuity.  Eligibility ends as provided in the 
 48.15  agreement or plan, but must cease at the end of the month in 
 48.16  which the retired employee chooses not to receive an annuity, or 
 48.17  the employee is eligible for employer-paid health insurance from 
 48.18  a new employer.  The retired employees shall be eligible for 
 48.19  coverages to which they were entitled at the time of retirement, 
 48.20  subject to any changes in coverage through collective bargaining 
 48.21  or plans established under section 43A.18 for employees in 
 48.22  positions equivalent to that from which they retired, provided 
 48.23  that the retired employees shall not be eligible for state-paid 
 48.24  life insurance; 
 48.25     (j) employees of the state public defender's office, and 
 48.26  district public defenders and their employees other than in the 
 48.27  second and fourth judicial districts, with eligibility 
 48.28  determined by the state board of public defense in consultation 
 48.29  with the commissioner of employee relations; and 
 48.30     (k) employees of the health data institute under section 
 48.31  62J.451, subdivision 12, as paid for by the health data 
 48.32  institute. 
 48.33     Sec. 3.  Minnesota Statutes 1996, section 97A.065, 
 48.34  subdivision 2, is amended to read: 
 48.35     Subd. 2.  [FINES AND FORFEITED BAIL.] (a) Fines and 
 48.36  forfeited bail collected from prosecutions of violations of the 
 49.1   game and fish laws, sections 84.091 to 84.15, and 84.81 to 
 49.2   84.88, chapter 348, and any other law relating to wild animals, 
 49.3   and aquatic vegetation must be paid to the state treasurer of 
 49.4   the county where the violation is prosecuted.  The county 
 49.5   treasurer shall submit.  One-half of the receipts shall be 
 49.6   credited to the commissioner and credit the balance credited to 
 49.7   the county state general revenue fund except as provided in 
 49.8   paragraphs (b), (c), and (d).  
 49.9      (b) The commissioner must reimburse a county, from the game 
 49.10  and fish fund, for the cost of keeping prisoners prosecuted for 
 49.11  violations under this section if the county board, by 
 49.12  resolution, directs:  (1) the county treasurer to submit all 
 49.13  fines and forfeited bail to the commissioner; and (2) the county 
 49.14  auditor to certify and submit monthly itemized statements to the 
 49.15  commissioner.  
 49.16     (c) The county treasurer shall indicate the amount of the 
 49.17  receipts that are assessments or surcharges imposed under 
 49.18  section 609.101 and shall submit all of those receipts to the 
 49.19  commissioner.  The receipts must be credited to the game and 
 49.20  fish fund to provide peace officer training for persons employed 
 49.21  by the commissioner who are licensed under section 626.84, 
 49.22  subdivision 1, clause (c), and who possess peace officer 
 49.23  authority for the purpose of enforcing game and fish laws. 
 49.24     (d) The county treasurer court administrator shall submit 
 49.25  one-half of the receipts collected from prosecutions of 
 49.26  violations of sections 84.81 to 84.91, including receipts that 
 49.27  are assessments or surcharges imposed under section 609.101, to 
 49.28  the commissioner and credit the balance to the county state 
 49.29  general fund.  The commissioner shall credit these receipts to 
 49.30  the snowmobile trails and enforcement account in the natural 
 49.31  resources fund. 
 49.32     Sec. 4.  Minnesota Statutes 1996, section 299D.03, 
 49.33  subdivision 5, is amended to read: 
 49.34     Subd. 5.  [FINES AND FORFEITED BAIL MONEY.] (a) All fines 
 49.35  and forfeited bail money, from traffic and motor vehicle law 
 49.36  violations, collected from persons apprehended or arrested by 
 50.1   officers of the state patrol, shall be paid by the person or 
 50.2   officer collecting the fines, forfeited bail money or 
 50.3   installments thereof, on or before the tenth day after the last 
 50.4   day of the month in which these moneys were collected, to the 
 50.5   county state treasurer of the county where the violation 
 50.6   occurred.  Three-eighths of these receipts shall be credited to 
 50.7   the general revenue fund of the county state.  The other 
 50.8   five-eighths of these receipts shall be transmitted by that 
 50.9   officer to the state treasurer and shall be credited as follows: 
 50.10     (1) In the fiscal year ending June 30, 1991, the first 
 50.11  $275,000 in money received by the state treasurer after June 4, 
 50.12  1991, must be credited to the transportation services fund, and 
 50.13  the remainder in the fiscal year credited to the trunk highway 
 50.14  fund. 
 50.15     (2) In fiscal year 1992, the first $215,000 in money 
 50.16  received by the state treasurer in the fiscal year must be 
 50.17  credited to the transportation services fund, and the remainder 
 50.18  credited to the trunk highway fund. 
 50.19     (3) In fiscal years 1993 2000 and subsequent years, the 
 50.20  entire amount received by the state treasurer must be credited 
 50.21  to the trunk highway fund.  If, however, the violation occurs 
 50.22  within a municipality and the city attorney prosecutes the 
 50.23  offense, and a plea of not guilty is entered, one-third of the 
 50.24  receipts shall be credited to the general revenue fund of 
 50.25  the county state, one-third of the receipts shall be paid to the 
 50.26  municipality prosecuting the offense, and one-third shall be 
 50.27  transmitted to the state treasurer as provided in this 
 50.28  subdivision.  All costs of participation in a nationwide police 
 50.29  communication system chargeable to the state of Minnesota shall 
 50.30  be paid from appropriations for that purpose. 
 50.31     (b) Notwithstanding any other provisions of law, all fines 
 50.32  and forfeited bail money from violations of statutes governing 
 50.33  the maximum weight of motor vehicles, collected from persons 
 50.34  apprehended or arrested by employees of the state of Minnesota, 
 50.35  by means of stationary or portable scales operated by these 
 50.36  employees, shall be paid by the person or officer collecting the 
 51.1   fines or forfeited bail money, on or before the tenth day after 
 51.2   the last day of the month in which the collections were made, to 
 51.3   the county treasurer of the county where the violation 
 51.4   occurred.  Five-eighths of these receipts shall be transmitted 
 51.5   by that officer to the state treasurer and shall be credited to 
 51.6   the highway user tax distribution fund.  Three-eighths of these 
 51.7   receipts shall be credited to the general revenue fund of the 
 51.8   county state.  
 51.9      Sec. 5.  Minnesota Statutes 1996, section 466.01, 
 51.10  subdivision 6, is amended to read: 
 51.11     Subd. 6.  [EMPLOYEE, OFFICER, OR AGENT.] For the purposes 
 51.12  of sections 466.01 to 466.15, "employee," "officer," or "agent" 
 51.13  means a present or former employee, officer, or agent of a 
 51.14  municipality, or other person acting on behalf of the 
 51.15  municipality in an official capacity, temporarily or 
 51.16  permanently, with or without compensation, but does not include 
 51.17  an independent contractor other than a nonprofit firefighting 
 51.18  corporation that has associated with it a relief association as 
 51.19  defined in section 424A.001, subdivision 4.  "Employee" includes 
 51.20  court administrators and their staff under chapter 485, district 
 51.21  administration staff in the second and fourth judicial 
 51.22  districts, guardians ad litem, and other employees within the 
 51.23  court system whose salaries are paid by the county, other than 
 51.24  employees who remain on the county payroll under section 
 51.25  480.181, subdivision 2. 
 51.26     Sec. 6.  Minnesota Statutes 1996, section 480.181, 
 51.27  subdivision 1, is amended to read: 
 51.28     Subdivision 1.  [STATE EMPLOYEES; COMPENSATION.] District 
 51.29  court referees, judicial officers, court reporters, law 
 51.30  clerks, and district administration staff, other than district 
 51.31  administration staff in the second and fourth judicial 
 51.32  districts, and court administration employees are state 
 51.33  employees and are governed by the judicial branch personnel 
 51.34  rules adopted by the supreme court.  The supreme court, in 
 51.35  consultation with the conference of chief judges, shall 
 51.36  establish the salary range of these employees under the judicial 
 52.1   branch personnel rules.  In establishing the salary ranges, the 
 52.2   supreme court shall consider differences in the cost of living 
 52.3   in different areas of the state. 
 52.4      Sec. 7.  Minnesota Statutes 1996, section 485.01, is 
 52.5   amended to read: 
 52.6      485.01 [APPOINTMENT; BOND; DUTIES.] 
 52.7      A clerk of the district court for each county within the 
 52.8   judicial district, who shall be known as the court 
 52.9   administrator, shall be appointed by a majority of the district 
 52.10  court judges in the district, after consultation with the county 
 52.11  court judges of the county court district affected.  The clerk, 
 52.12  before entering upon the duties of office, shall give bond to 
 52.13  the state, to be approved by the chief judge of the judicial 
 52.14  district, conditioned for the faithful discharge of official 
 52.15  duties.  The bond, with an oath of office, shall be filed for 
 52.16  record with the county recorder.  The clerk shall perform all 
 52.17  duties assigned by law and by the rules of the court.  The clerk 
 52.18  and all deputy clerks must not practice as attorneys in the 
 52.19  court in which they are employed. 
 52.20     The duties, functions, and responsibilities which have been 
 52.21  and may be required by law or rule to be performed by the clerk 
 52.22  of district or county court shall be performed by the court 
 52.23  administrator. 
 52.24     Sec. 8.  Minnesota Statutes 1996, section 485.018, 
 52.25  subdivision 2a, is amended to read: 
 52.26     Subd. 2a.  [WITHHOLDING SALARY.] Upon certification by the 
 52.27  state court administrator that the court administrator of 
 52.28  district court has failed to perform any of the duties assigned 
 52.29  by law or by rule of court, the county board supreme court shall 
 52.30  withhold the salary of the court administrator, and shall not 
 52.31  pay the salary until receipt of notice from the state court 
 52.32  administrator that the court administrator has performed the 
 52.33  duties assigned by law or by rule of court. 
 52.34     Nothing in this subdivision shall be construed to prohibit 
 52.35  the judges of the district court from removing a court 
 52.36  administrator of district court from office. 
 53.1      Sec. 9.  Minnesota Statutes 1996, section 485.018, 
 53.2   subdivision 5, is amended to read: 
 53.3      Subd. 5.  [COLLECTION OF FEES.] The court administrator of 
 53.4   district court shall charge and collect all fees as prescribed 
 53.5   by law and all such fees collected by the court administrator as 
 53.6   court administrator of district court shall be paid to 
 53.7   the county state treasurer.  Except for those portions of 
 53.8   forfeited bail paid to victims pursuant to existing law, the 
 53.9   county treasurer shall forward all revenue from fees and 
 53.10  forfeited bail collected under chapters 357, 487, and 574, and 
 53.11  the county portion of each fine to the state treasurer for 
 53.12  deposit in the state treasury and credit to the general fund, 
 53.13  unless otherwise provided in chapter 611A or other law, in the 
 53.14  manner and at the times prescribed by the state treasurer, but 
 53.15  not less often than once each month.  Money that is collected by 
 53.16  the court administrator under chapter 357, 487, or 574, and not 
 53.17  required by law to be distributed to a city, must be paid to the 
 53.18  state treasurer for deposit in the state treasury and credited 
 53.19  to the general fund.  If the defendant or probationer is located 
 53.20  after forfeited bail proceeds have been forwarded to the state 
 53.21  treasurer, the state treasurer shall reimburse the county, on 
 53.22  request, for actual costs expended for extradition, 
 53.23  transportation, or other costs necessary to return the defendant 
 53.24  or probationer to the jurisdiction where the bail was posted, in 
 53.25  an amount not more than the amount of forfeited bail.  All other 
 53.26  money must be deposited in the county general fund unless 
 53.27  otherwise provided by law.  The court administrator of district 
 53.28  court shall not retain any additional compensation, per diem or 
 53.29  other emolument for services as court administrator of district 
 53.30  court, but may receive and retain mileage and expense allowances 
 53.31  as prescribed by law. 
 53.32     Sec. 10.  Minnesota Statutes 1996, section 485.018, 
 53.33  subdivision 6, is amended to read: 
 53.34     Subd. 6.  [BUDGET FOR OFFICE.] The county board by 
 53.35  resolution shall provide the budget for (1) the salaries of 
 53.36  deputies, court administrators and other employees in the office 
 54.1   of the court administrator of district court; (2) and other 
 54.2   expenses necessary in the performance of the duties of said 
 54.3   office and (3) the payment of premiums of any bonds required of 
 54.4   the court administrator of district court or any deputy, court 
 54.5   administrator or employee in said office and the board is 
 54.6   authorized to appropriate funds therefor and for the salary of 
 54.7   the court administrator of district court shall be paid by the 
 54.8   state.  A county shall provide office facilities for the court 
 54.9   administrator. 
 54.10     Sec. 11.  Minnesota Statutes 1996, section 485.021, is 
 54.11  amended to read: 
 54.12     485.021 [INVESTMENT OF FUNDS DEPOSITED WITH COURT 
 54.13  ADMINISTRATOR.] 
 54.14     When money is paid into court pursuant to court order, the 
 54.15  court administrator of district court, unless the court order 
 54.16  specifies otherwise, may place such moneys with the county state 
 54.17  treasurer for investment, as provided by law.  When such moneys 
 54.18  are subsequently released, or otherwise treated, by court order, 
 54.19  the same shall be immediately paid over by the county state 
 54.20  treasurer to the court administrator of district court who shall 
 54.21  then fulfill the direction of the court order relative to such 
 54.22  moneys. 
 54.23     Sec. 12.  Minnesota Statutes 1996, section 487.32, 
 54.24  subdivision 3, is amended to read: 
 54.25     Subd. 3.  A judge of a county court may order any sums 
 54.26  forfeited to be reinstated and the county state treasurer shall 
 54.27  then refund accordingly.  The county state treasurer shall 
 54.28  reimburse the court administrator if the court administrator 
 54.29  refunds the deposit upon a judge's order and obtains a receipt 
 54.30  to be used as a voucher.  
 54.31     Sec. 13.  Minnesota Statutes 1996, section 574.34, 
 54.32  subdivision 1, is amended to read: 
 54.33     Subdivision 1.  [GENERAL.] Fines and forfeitures not 
 54.34  specially granted or appropriated by law and not required to be 
 54.35  distributed to a city by statute shall be paid into the treasury 
 54.36  of the county where they are incurred to the state treasurer for 
 55.1   deposit in the state treasury and credited to the general fund. 
 55.2      Sec. 14.  [REPEALER.] 
 55.3      Minnesota Statutes 1996, sections 485.018, subdivisions 1, 
 55.4   2, 4, and 8; 485.03; 485.05; and 485.11, are repealed. 
 55.5      Sec. 15.  [EFFECTIVE DATE.] 
 55.6      This article is effective January 1, 1999, and thereafter.