SF 1918

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

  1.1                          A bill for an act 
  1.2             relating to taxation; providing property tax class 
  1.3             rate reform; providing for education financing; 
  1.4             providing for calculation of rent constituting 
  1.5             property taxes; providing increased property tax 
  1.6             refunds for homeowners; changing truth-in-taxation 
  1.7             requirements; providing for joint truth-in-taxation 
  1.8             hearings; imposing levy limits on cities and counties 
  1.9             for taxes levied in 1997 and 1998; changing fiscal 
  1.10            note requirements for state mandates; providing for 
  1.11            reimbursement for costs of state mandate; requiring 
  1.12            periodic review of administrative rules; reducing or 
  1.13            repealing certain corporate taxes; imposing a business 
  1.14            activity tax; making miscellaneous property tax 
  1.15            changes; providing procedures for the apportionment of 
  1.16            a local government unit; providing for increase in 
  1.17            city aid base; changing tax increment financing 
  1.18            provisions; providing for heritage and historic 
  1.19            subdistricts; authorizing certain tax increment 
  1.20            districts; exempting certain tax increment districts 
  1.21            from certain requirements; authorizing local tax 
  1.22            levies, abatements, and assessments; requiring 
  1.23            reports; appropriating money; amending Minnesota 
  1.24            Statutes 1996, sections 93.41; 103D.905, subdivisions 
  1.25            4, 5, and by adding a subdivision; 124.239, 
  1.26            subdivision 5, and by adding subdivisions; 124.2716, 
  1.27            subdivision 3; 124.2727, subdivision 6b; 124.312, 
  1.28            subdivisions 4 and 5; 124.314, subdivision 2; 124.83, 
  1.29            subdivision 4; 124.95, subdivisions 1 and 4; 124A.23, 
  1.30            subdivision 1; 216B.16, by adding a subdivision; 
  1.31            272.02, subdivision 1; 273.11, subdivision 16; 
  1.32            273.112, subdivisions 1, 2, 3, and 4; 273.124, by 
  1.33            adding a subdivision; 273.13, subdivisions 22, 23, 24, 
  1.34            25, 31, and by adding a subdivision; 273.1399, 
  1.35            subdivision 6, and by adding a subdivision; 275.065, 
  1.36            subdivisions 1, 3, 5a, 6, 8, and by adding 
  1.37            subdivisions; 275.16; 276.04, subdivision 2; 281.13; 
  1.38            281.23, subdivision 6, and by adding a subdivision; 
  1.39            281.273; 281.276; 282.01, subdivision 8; 282.04, 
  1.40            subdivision 1; 290.06, subdivision 1; 290A.03, 
  1.41            subdivisions 11 and 13; 290A.04, subdivisions 2 and 6; 
  1.42            290A.19; 373.40, subdivision 7; 375.192, subdivision 
  1.43            2; 383A.75, subdivision 3; 465.71; 465.81, 
  1.44            subdivisions 1 and 3; 465.82, subdivisions 1, 2, and 
  1.45            by adding a subdivision; 465.87, subdivisions 1a and 
  1.46            2; 465.88; 469.040, subdivision 3, and by adding a 
  2.1             subdivision; 469.174, subdivisions 4, 7, 10, 12, 16, 
  2.2             23, 24, and by adding subdivisions; 469.175, 
  2.3             subdivisions 1, 3, 7, and by adding a subdivision; 
  2.4             469.176, subdivisions 1b, 1e, 4c, 4e, 4j, 5, and by 
  2.5             adding a subdivision; 469.1765, subdivisions 2, 3, 4, 
  2.6             and 7; 469.177, subdivision 3; 477A.011, subdivision 
  2.7             36; 477A.014, subdivision 4; and 611.27, subdivision 
  2.8             4; Laws 1992, chapter 511, article 2, section 52; Laws 
  2.9             1993, chapter 375, article 7, section 29; and Laws 
  2.10            1995, chapter 264, article 5, sections 44, subdivision 
  2.11            4, as amended, and 45, subdivision 1, as amended; 
  2.12            proposing coding for new law in Minnesota Statutes, 
  2.13            chapters 3; 14; 124; 273; 275; 290; 462A; and 469; 
  2.14            repealing Minnesota Statutes 1996, sections 3.982; 
  2.15            124.91, subdivisions 2 and 7; 124.912, subdivisions 2 
  2.16            and 3; 270B.12, subdivision 11; 273.13, subdivision 
  2.17            32; 273.1317; 273.1318; 276.012; 290.0921; 290.0922; 
  2.18            290A.03, subdivisions 12a and 14; 290A.055; 290A.26; 
  2.19            469.174, subdivision 19; and 469.176, subdivision 4b; 
  2.20            Laws 1995, chapter 264, article 4, as amended. 
  2.21  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.22                             ARTICLE 1 
  2.23                            PROPERTY TAX 
  2.24                         CLASS RATE REFORM 
  2.25     Section 1.  Minnesota Statutes 1996, section 273.124, is 
  2.26  amended by adding a subdivision to read: 
  2.27     Subd. 19.  [LEASE-PURCHASE PROGRAM.] Qualifying buildings 
  2.28  and appurtenances, together with the land on which they are 
  2.29  located, are classified as homesteads, if the following 
  2.30  qualifications are met: 
  2.31     (1) the property is leased for up to a five-year period by 
  2.32  the occupant under a lease-purchase program administered by the 
  2.33  Minnesota housing finance agency or a housing and redevelopment 
  2.34  authority under sections 469.001 to 469.047; 
  2.35     (2) the occupant's income is no greater than 80 percent of 
  2.36  the county or area median income, adjusted for family size; 
  2.37     (3) the building consists of one or two dwelling units; 
  2.38     (4) the lease agreement provides that part of the lease 
  2.39  payment is escrowed as a nonrefundable down payment on the 
  2.40  housing; 
  2.41     (5) the administering agency verifies the occupant's income 
  2.42  eligibility and certifies to the county assessor that the 
  2.43  occupant meets the income standards; and 
  2.44     (6) the property owner applies to the county assessor by 
  2.45  May 30 of each year. 
  3.1      For purposes of this subdivision, "qualifying buildings and 
  3.2   appurtenances" means a one- or two-unit residential building 
  3.3   which was unoccupied, abandoned, and boarded for at least six 
  3.4   months.  
  3.5      Sec. 2.  [273.126] [QUALIFYING LOW-INCOME RENTAL HOUSING.] 
  3.6      Subdivision 1.  [QUALIFYING RULES.] The market value of a 
  3.7   rental housing unit qualifies for assessment under class 4d if: 
  3.8      (1) it is occupied by individuals meeting the income limits 
  3.9   under subdivision 2; 
  3.10     (2) a rent restriction agreement under subdivision 3 
  3.11  applies; 
  3.12     (3) the unit meets the minimum housing quality standards 
  3.13  under subdivision 4; and 
  3.14     (4) the Minnesota housing finance agency certifies to the 
  3.15  local assessor that the unit qualifies. 
  3.16     Subd. 2.  [INCOME LIMITS.] (a) In order to qualify under 
  3.17  class 4d, a unit must be occupied by an individual or 
  3.18  individuals whose income is at or below 60 percent of the median 
  3.19  area gross income.  If the resident's income met the requirement 
  3.20  when the resident first occupied the unit, the income of the 
  3.21  resident continues to qualify, unless the income exceeds 85 
  3.22  percent of the median area gross income.  
  3.23     (b) For purposes of this section, "median area gross income"
  3.24  means the greater of (1) the median gross income for the area 
  3.25  determined under section 42 of the Internal Revenue Code of 
  3.26  1986, as amended through December 31, 1996, or (2) the median 
  3.27  gross income for the state.  The median gross income must be 
  3.28  adjusted for family size. 
  3.29     (c) Vacant units qualify as meeting the requirements of 
  3.30  this subdivision in the same proportion that total units in the 
  3.31  building are subject to rent restriction agreements under 
  3.32  subdivision 3 and meet minimum housing standards under 
  3.33  subdivision 4.  This paragraph applies only to the extent that 
  3.34  units subject to a rent restriction agreement and meeting the 
  3.35  minimum housing quality standards are vacant. 
  3.36     (d) The owner or manager of the property may comply with 
  4.1   this subdivision by obtaining written statements from the 
  4.2   residents, at least annually, that their incomes are at or below 
  4.3   the limit.  
  4.4      Subd. 3.  [RENT RESTRICTIONS.] (a) In order to qualify 
  4.5   under class 4d, a unit must be subject to a rent restriction 
  4.6   agreement with the housing finance agency for a period of at 
  4.7   least five years.  The agreement must be in effect and apply to 
  4.8   the rents to be charged for the year in which the property taxes 
  4.9   are payable.  The agreement must provide that the restrictions 
  4.10  apply to each year of the period, regardless of whether the unit 
  4.11  is occupied by an individual with qualifying income or whether 
  4.12  class 4d applies.  The rent restriction agreement must provide 
  4.13  for rents for the unit to be no higher than the rents permitted 
  4.14  under section 42 of the Internal Revenue Code of 1986, as 
  4.15  amended through December 31, 1996.  The definition of median 
  4.16  gross income specified in this section applies. 
  4.17     (b) Notwithstanding the maximum rent levels permitted, 20 
  4.18  percent of the units in the metropolitan area and ten percent of 
  4.19  the units in greater Minnesota qualifying under class 4d must be 
  4.20  made available to a family with a section 8 certificate. 
  4.21     Subd. 4.  [MINIMUM HOUSING STANDARDS.] In order to qualify 
  4.22  under class 4d, a unit must be certified by the housing finance 
  4.23  agency to meet the minimum housing standards established under 
  4.24  section 462A.071. 
  4.25     Subd. 5.  [MONITORING RENT LEVELS.] The housing finance 
  4.26  agency is directed to monitor changes in rent levels and the use 
  4.27  of section 8 certificates in units qualifying under class 4d. 
  4.28     Subd. 6.  [PENALTIES.] Notwithstanding the provisions of 
  4.29  section 273.01, 274.01, or any other law, if the Minnesota 
  4.30  housing finance agency notifies the assessor that the provisions 
  4.31  of this section have not been met for any period during which a 
  4.32  unit was classified under class 4d, a penalty is imposed as 
  4.33  provided in section 462A.071, subdivision 8.  
  4.34     Sec. 3.  Minnesota Statutes 1996, section 273.13, 
  4.35  subdivision 22, is amended to read: 
  4.36     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  5.1   23, real estate which is (i) residential and used for homestead 
  5.2   purposes; and (ii) other residential real estate containing one 
  5.3   unit, other than seasonal residential, and recreational; and 
  5.4   (iii) a dwelling, garage, and surrounding one acre of property 
  5.5   on a nonhomestead farm classified under subdivision 23, 
  5.6   paragraph (b), is class 1.  The market value of class 1a 
  5.7   property must be determined based upon the value of the house, 
  5.8   garage, and land.  
  5.9      For taxes payable in 1998 and thereafter, the first 
  5.10  $72,000 $75,000 of market value of class 1a property has a net 
  5.11  class rate of one percent of its market value and a gross class 
  5.12  rate of 2.17 percent of its market value.  For taxes payable in 
  5.13  1992,; and the market value of class 1a property that 
  5.14  exceeds $72,000 but does not exceed $115,000 $75,000 has a class 
  5.15  rate of two percent of its market value; and the market value of 
  5.16  class 1a property that exceeds $115,000 has a class rate of 2.5 
  5.17  percent of its market value.  For taxes payable in 1993 and 
  5.18  thereafter, the market value of class 1a property that exceeds 
  5.19  $72,000 has a class rate of two percent. 
  5.20     (b) Class 1b property includes homestead real estate or 
  5.21  homestead manufactured homes used for the purposes of a 
  5.22  homestead by 
  5.23     (1) any blind person, or the blind person and the blind 
  5.24  person's spouse; or 
  5.25     (2) any person, hereinafter referred to as "veteran," who: 
  5.26     (i) served in the active military or naval service of the 
  5.27  United States; and 
  5.28     (ii) is entitled to compensation under the laws and 
  5.29  regulations of the United States for permanent and total 
  5.30  service-connected disability due to the loss, or loss of use, by 
  5.31  reason of amputation, ankylosis, progressive muscular 
  5.32  dystrophies, or paralysis, of both lower extremities, such as to 
  5.33  preclude motion without the aid of braces, crutches, canes, or a 
  5.34  wheelchair; and 
  5.35     (iii) has acquired a special housing unit with special 
  5.36  fixtures or movable facilities made necessary by the nature of 
  6.1   the veteran's disability, or the surviving spouse of the 
  6.2   deceased veteran for as long as the surviving spouse retains the 
  6.3   special housing unit as a homestead; or 
  6.4      (3) any person who: 
  6.5      (i) is permanently and totally disabled and 
  6.6      (ii) receives 90 percent or more of total income from 
  6.7      (A) aid from any state as a result of that disability; or 
  6.8      (B) supplemental security income for the disabled; or 
  6.9      (C) workers' compensation based on a finding of total and 
  6.10  permanent disability; or 
  6.11     (D) social security disability, including the amount of a 
  6.12  disability insurance benefit which is converted to an old age 
  6.13  insurance benefit and any subsequent cost of living increases; 
  6.14  or 
  6.15     (E) aid under the federal Railroad Retirement Act of 1937, 
  6.16  United States Code Annotated, title 45, section 228b(a)5; or 
  6.17     (F) a pension from any local government retirement fund 
  6.18  located in the state of Minnesota as a result of that 
  6.19  disability; or 
  6.20     (G) pension, annuity, or other income paid as a result of 
  6.21  that disability from a private pension or disability plan, 
  6.22  including employer, employee, union, and insurance plans and 
  6.23     (iii) has household income as defined in section 290A.03, 
  6.24  subdivision 5, of $50,000 or less; or 
  6.25     (4) any person who is permanently and totally disabled and 
  6.26  whose household income as defined in section 290A.03, 
  6.27  subdivision 5, is 150 percent or less of the federal poverty 
  6.28  level. 
  6.29     Property is classified and assessed under clause (4) only 
  6.30  if the government agency or income-providing source certifies, 
  6.31  upon the request of the homestead occupant, that the homestead 
  6.32  occupant satisfies the disability requirements of this paragraph.
  6.33     Property is classified and assessed pursuant to clause (1) 
  6.34  only if the commissioner of economic security certifies to the 
  6.35  assessor that the homestead occupant satisfies the requirements 
  6.36  of this paragraph.  
  7.1      Permanently and totally disabled for the purpose of this 
  7.2   subdivision means a condition which is permanent in nature and 
  7.3   totally incapacitates the person from working at an occupation 
  7.4   which brings the person an income.  The first $32,000 market 
  7.5   value of class 1b property has a net class rate of .45 percent 
  7.6   of its market value and a gross class rate of .87 percent of its 
  7.7   market value.  The remaining market value of class 1b property 
  7.8   has a gross or net class rate using the rates for class 1 or 
  7.9   class 2a property, whichever is appropriate, of similar market 
  7.10  value.  
  7.11     (c) Class 1c property is commercial use real property that 
  7.12  abuts a lakeshore line and is devoted to temporary and seasonal 
  7.13  residential occupancy for recreational purposes but not devoted 
  7.14  to commercial purposes for more than 250 days in the year 
  7.15  preceding the year of assessment, and that includes a portion 
  7.16  used as a homestead by the owner, which includes a dwelling 
  7.17  occupied as a homestead by a shareholder of a corporation that 
  7.18  owns the resort or a partner in a partnership that owns the 
  7.19  resort, even if the title to the homestead is held by the 
  7.20  corporation or partnership.  For purposes of this clause, 
  7.21  property is devoted to a commercial purpose on a specific day if 
  7.22  any portion of the property, excluding the portion used 
  7.23  exclusively as a homestead, is used for residential occupancy 
  7.24  and a fee is charged for residential occupancy.  In order for a 
  7.25  property to be classified as class 1c, at least 40 percent of 
  7.26  the annual gross lodging receipts related to the property must 
  7.27  be from business conducted between Memorial Day weekend and 
  7.28  Labor Day weekend, and at least 60 percent of all bookings by 
  7.29  lodging guests during the year must be for periods of at least 
  7.30  three consecutive nights.  Class 1c property has a class rate of 
  7.31  one percent of total market value for taxes payable in 1993 and 
  7.32  thereafter with the following limitation:  the area of the 
  7.33  property must not exceed 100 feet of lakeshore footage for each 
  7.34  cabin or campsite located on the property up to a total of 800 
  7.35  feet and 500 feet in depth, measured away from the lakeshore.  
  7.36     Sec. 4.  Minnesota Statutes 1996, section 273.13, 
  8.1   subdivision 23, is amended to read: 
  8.2      Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
  8.3   land including any improvements that is homesteaded.  The market 
  8.4   value of the house and garage and immediately surrounding one 
  8.5   acre of land has the same class rates as class 1a property under 
  8.6   subdivision 22.  The value of the remaining land including 
  8.7   improvements up to $115,000 has a net class rate of .45 percent 
  8.8   of market value and a gross class rate of 1.75 percent of market 
  8.9   value.  The remaining value of class 2a property over $115,000 
  8.10  of market value that does not exceed 320 acres has a net class 
  8.11  rate of one percent of market value, and a gross class rate of 
  8.12  2.25 percent of market value.  The remaining property over the 
  8.13  $115,000 market value in excess of 320 acres has a class rate of 
  8.14  1.5 percent of market value, and a gross class rate of 2.25 
  8.15  percent of market value.  
  8.16     (b) Class 2b property is (1) real estate, rural in 
  8.17  character and used exclusively for growing trees for timber, 
  8.18  lumber, and wood and wood products; (2) real estate that is not 
  8.19  improved with a structure and is used exclusively for growing 
  8.20  trees for timber, lumber, and wood and wood products, if the 
  8.21  owner has participated or is participating in a cost-sharing 
  8.22  program for afforestation, reforestation, or timber stand 
  8.23  improvement on that particular property, administered or 
  8.24  coordinated by the commissioner of natural resources; (3) real 
  8.25  estate that is nonhomestead agricultural land; or (4) a landing 
  8.26  area or public access area of a privately owned public use 
  8.27  airport.  Class 2b property has a net class rate of 1.5 percent 
  8.28  of market value, and a gross class rate of 2.25 percent of 
  8.29  market value.  
  8.30     (c) Agricultural land as used in this section means 
  8.31  contiguous acreage of ten acres or more, primarily used during 
  8.32  the preceding year for agricultural purposes.  Agricultural use 
  8.33  may include pasture, timber, waste, unusable wild land, and land 
  8.34  included in state or federal farm or conservation programs.  
  8.35  "Agricultural purposes" as used in this section means the 
  8.36  raising or cultivation of agricultural products.  Land enrolled 
  9.1   in the Reinvest in Minnesota program under sections 103F.505 to 
  9.2   103F.531 or the federal Conservation Reserve Program as 
  9.3   contained in Public Law Number 99-198, and consisting of a 
  9.4   minimum of ten contiguous acres, shall be classified as 
  9.5   agricultural.  Agricultural classification for property shall be 
  9.6   determined with respect to the use of the whole parcel, and not 
  9.7   based upon the market value of any residential structures on the 
  9.8   parcel or contiguous parcels under the same ownership. 
  9.9      (d) Real estate of less than ten acres used principally for 
  9.10  raising or cultivating agricultural products, shall be 
  9.11  considered as agricultural land, if it is not used primarily for 
  9.12  residential purposes.  
  9.13     (e) The term "agricultural products" as used in this 
  9.14  subdivision includes:  
  9.15     (1) livestock, dairy animals, dairy products, poultry and 
  9.16  poultry products, fur-bearing animals, horticultural and nursery 
  9.17  stock described in sections 18.44 to 18.61, fruit of all kinds, 
  9.18  vegetables, forage, grains, bees, and apiary products by the 
  9.19  owner; 
  9.20     (2) fish bred for sale and consumption if the fish breeding 
  9.21  occurs on land zoned for agricultural use; 
  9.22     (3) the commercial boarding of horses if the boarding is 
  9.23  done in conjunction with raising or cultivating agricultural 
  9.24  products as defined in clause (1); 
  9.25     (4) property which is owned and operated by nonprofit 
  9.26  organizations used for equestrian activities, excluding racing; 
  9.27  and 
  9.28     (5) game birds and waterfowl bred and raised for use on a 
  9.29  shooting preserve licensed under section 97A.115.  
  9.30     (f) If a parcel used for agricultural purposes is also used 
  9.31  for commercial or industrial purposes, including but not limited 
  9.32  to:  
  9.33     (1) wholesale and retail sales; 
  9.34     (2) processing of raw agricultural products or other goods; 
  9.35     (3) warehousing or storage of processed goods; and 
  9.36     (4) office facilities for the support of the activities 
 10.1   enumerated in clauses (1), (2), and (3), 
 10.2   the assessor shall classify the part of the parcel used for 
 10.3   agricultural purposes as class 1b, 2a, or 2b, whichever is 
 10.4   appropriate, and the remainder in the class appropriate to its 
 10.5   use.  The grading, sorting, and packaging of raw agricultural 
 10.6   products for first sale is considered an agricultural purpose.  
 10.7   A greenhouse or other building where horticultural or nursery 
 10.8   products are grown that is also used for the conduct of retail 
 10.9   sales must be classified as agricultural if it is primarily used 
 10.10  for the growing of horticultural or nursery products from seed, 
 10.11  cuttings, or roots and occasionally as a showroom for the retail 
 10.12  sale of those products.  Use of a greenhouse or building only 
 10.13  for the display of already grown horticultural or nursery 
 10.14  products does not qualify as an agricultural purpose.  
 10.15     The assessor shall determine and list separately on the 
 10.16  records the market value of the homestead dwelling and the one 
 10.17  acre of land on which that dwelling is located.  If any farm 
 10.18  buildings or structures are located on this homesteaded acre of 
 10.19  land, their market value shall not be included in this separate 
 10.20  determination.  
 10.21     (g) To qualify for classification under paragraph (b), 
 10.22  clause (4), a privately owned public use airport must be 
 10.23  licensed as a public airport under section 360.018.  For 
 10.24  purposes of paragraph (b), clause (4), "landing area" means that 
 10.25  part of a privately owned public use airport properly cleared, 
 10.26  regularly maintained, and made available to the public for use 
 10.27  by aircraft and includes runways, taxiways, aprons, and sites 
 10.28  upon which are situated landing or navigational aids.  A landing 
 10.29  area also includes land underlying both the primary surface and 
 10.30  the approach surfaces that comply with all of the following:  
 10.31     (i) the land is properly cleared and regularly maintained 
 10.32  for the primary purposes of the landing, taking off, and taxiing 
 10.33  of aircraft; but that portion of the land that contains 
 10.34  facilities for servicing, repair, or maintenance of aircraft is 
 10.35  not included as a landing area; 
 10.36     (ii) the land is part of the airport property; and 
 11.1      (iii) the land is not used for commercial or residential 
 11.2   purposes. 
 11.3   The land contained in a landing area under paragraph (b), clause 
 11.4   (4), must be described and certified by the commissioner of 
 11.5   transportation.  The certification is effective until it is 
 11.6   modified, or until the airport or landing area no longer meets 
 11.7   the requirements of paragraph (b), clause (4).  For purposes of 
 11.8   paragraph (b), clause (4), "public access area" means property 
 11.9   used as an aircraft parking ramp, apron, or storage hangar, or 
 11.10  an arrival and departure building in connection with the airport.
 11.11     (h) A structure is classified as an agricultural building 
 11.12  if all of the following criteria are met: 
 11.13     (1) the structure is located on property that is classified 
 11.14  as agricultural property under this subdivision; 
 11.15     (2) the structure is occupied exclusively by seasonal farm 
 11.16  workers during the time when they work on that farm, and the 
 11.17  occupants are not charged rent for the privilege of occupying 
 11.18  the property, provided that use of the structure for storage of 
 11.19  farm equipment and produce does not disqualify the property from 
 11.20  classification under this paragraph; 
 11.21     (3) the owners of the property are required to provide 
 11.22  housing for the workers under state or federal law; 
 11.23     (4) the structure meets all applicable health and safety 
 11.24  requirements; and 
 11.25     (5) the structure is not saleable as residential property 
 11.26  because it does not comply with local ordinances relating to 
 11.27  location in relation to streets or roads. 
 11.28     Sec. 5.  Minnesota Statutes 1996, section 273.13, 
 11.29  subdivision 24, is amended to read: 
 11.30     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 11.31  property and utility real and personal property, except class 5 
 11.32  property as identified in subdivision 31, clause (1), is class 
 11.33  3a.  It has a class rate of three 2.5 percent of the first 
 11.34  $100,000 $200,000 of market value for taxes payable in 1993 1998 
 11.35  and thereafter, and 5.06 four percent of the market value over 
 11.36  $100,000 $200,000 for taxes payable in 1998 and thereafter.  In 
 12.1   the case of state-assessed commercial, industrial, and utility 
 12.2   property owned by one person or entity, only one parcel has a 
 12.3   reduced class rate on the first $100,000 $200,000 of market 
 12.4   value.  In the case of other commercial, industrial, and utility 
 12.5   property owned by one person or entity, only one parcel in each 
 12.6   county has a reduced class rate on the first $100,000 $200,000 
 12.7   of market value, except that: 
 12.8      (1) if the market value of the parcel is less than 
 12.9   $100,000 $200,000, and additional parcels are owned by the same 
 12.10  person or entity in the same city or town within that county, 
 12.11  the reduced class rate shall be applied up to a combined total 
 12.12  market value of $100,000 $200,000 for all parcels owned by the 
 12.13  same person or entity in the same city or town within the 
 12.14  county; 
 12.15     (2) in the case of grain, fertilizer, and feed elevator 
 12.16  facilities, as defined in section 18C.305, subdivision 1, or 
 12.17  232.21, subdivision 8, the limitation to one parcel per owner 
 12.18  per county for the reduced class rate shall not apply, but there 
 12.19  shall be a limit of $100,000 $200,000 of preferential value per 
 12.20  site of contiguous parcels owned by the same person or entity.  
 12.21  Only the value of the elevator portion of each parcel shall 
 12.22  qualify for treatment under this clause.  For purposes of this 
 12.23  subdivision, contiguous parcels include parcels separated only 
 12.24  by a railroad or public road right-of-way; and 
 12.25     (3) in the case of property owned by a nonprofit charitable 
 12.26  organization that qualifies for tax exemption under section 
 12.27  501(c)(3) of the Internal Revenue Code of 1986, as amended 
 12.28  through December 31, 1993, if the property is used as a business 
 12.29  incubator, the limitation to one parcel per owner per county for 
 12.30  the reduced class rate shall not apply, provided that the 
 12.31  reduced rate applies only to the first $100,000 $200,000 of 
 12.32  value per parcel owned by the organization.  As used in this 
 12.33  clause, a "business incubator" is a facility used for the 
 12.34  development of nonretail businesses, offering access to 
 12.35  equipment, space, services, and advice to the tenant businesses, 
 12.36  for the purpose of encouraging economic development, 
 13.1   diversification, and job creation in the area served by the 
 13.2   organization. 
 13.3      To receive the reduced class rate on additional parcels 
 13.4   under clause (1), (2), or (3), the taxpayer must notify the 
 13.5   county assessor that the taxpayer owns more than one parcel that 
 13.6   qualifies under clause (1), (2), or (3). 
 13.7      (b) Employment property defined in section 469.166, during 
 13.8   the period provided in section 469.170, shall constitute class 
 13.9   3b and has a class rate of 2.3 percent of the first $50,000 of 
 13.10  market value and 3.6 percent of the remainder, except that for 
 13.11  employment property located in a border city enterprise zone 
 13.12  designated pursuant to section 469.168, subdivision 4, paragraph 
 13.13  (c), the class rate of the first $100,000 of market value and 
 13.14  the class rate of the remainder is determined under paragraph 
 13.15  (a), unless the governing body of the city designated as an 
 13.16  enterprise zone determines that a specific parcel shall be 
 13.17  assessed pursuant to the first clause of this sentence.  The 
 13.18  governing body may provide for assessment under the first clause 
 13.19  of the preceding sentence only for property which is located in 
 13.20  an area which has been designated by the governing body for the 
 13.21  receipt of tax reductions authorized by section 469.171, 
 13.22  subdivision 1. 
 13.23     (c) Structures which are (i) located on property classified 
 13.24  as class 3a, (ii) constructed under an initial building permit 
 13.25  issued after January 2, 1996, (iii) located in a transit zone as 
 13.26  defined under section 473.3915, subdivision 3, (iv) located 
 13.27  within the boundaries of a school district, and (v) not 
 13.28  primarily used for retail or transient lodging purposes, shall 
 13.29  have a class rate of four percent on that portion of the market 
 13.30  value in excess of $100,000 and any market value under $100,000 
 13.31  that does not qualify for the three percent class rate under 
 13.32  paragraph (a).  As used in item (v), a structure is primarily 
 13.33  used for retail or transient lodging purposes if over 50 percent 
 13.34  of its square footage is used for those purposes.  The four 
 13.35  percent rate shall also apply to improvements to existing 
 13.36  structures that meet the requirements of items (i) to (v) if the 
 14.1   improvements are constructed under an initial building permit 
 14.2   issued after January 2, 1996, even if the remainder of the 
 14.3   structure was constructed prior to January 2, 1996.  For the 
 14.4   purposes of this paragraph, a structure shall be considered to 
 14.5   be located in a transit zone if any portion of the structure 
 14.6   lies within the zone.  If any property once eligible for 
 14.7   treatment under this paragraph ceases to remain eligible due to 
 14.8   revisions in transit zone boundaries, the property shall 
 14.9   continue to receive treatment under this paragraph for a period 
 14.10  of three years. 
 14.11     Sec. 6.  Minnesota Statutes 1996, section 273.13, 
 14.12  subdivision 25, is amended to read: 
 14.13     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 14.14  estate containing four or more units and used or held for use by 
 14.15  the owner or by the tenants or lessees of the owner as a 
 14.16  residence for rental periods of 30 days or more.  Class 4a also 
 14.17  includes hospitals licensed under sections 144.50 to 144.56, 
 14.18  other than hospitals exempt under section 272.02, and contiguous 
 14.19  property used for hospital purposes, without regard to whether 
 14.20  the property has been platted or subdivided.  Class 4a property 
 14.21  in a city with a population of 5,000 or less, that is (1) 
 14.22  located outside of the metropolitan area, as defined in section 
 14.23  473.121, subdivision 2, or outside any county contiguous to the 
 14.24  metropolitan area, and (2) whose city boundary is at least 15 
 14.25  miles from the boundary of any city with a population greater 
 14.26  than 5,000 has a class rate of 2.3 percent of market value for 
 14.27  taxes payable in 1996 and thereafter.  All other Class 4a 
 14.28  property has a class rate of 3.4 2.5 percent of market value for 
 14.29  taxes payable in 1996 1998 and thereafter.  For purposes of this 
 14.30  paragraph, population has the same meaning given in section 
 14.31  477A.011, subdivision 3. 
 14.32     (b) Class 4b includes: 
 14.33     (1) residential real estate containing less than four two 
 14.34  or three units, other than seasonal residential, and 
 14.35  recreational; 
 14.36     (2) manufactured homes not classified under any other 
 15.1   provision; 
 15.2      (3) a dwelling, garage, and surrounding one acre of 
 15.3   property on a nonhomestead farm classified under subdivision 23, 
 15.4   paragraph (b) unimproved property that is classified residential 
 15.5   as determined under section 273.13, subdivision 33.  
 15.6      Class 4b property has a class rate of 2.8 percent of market 
 15.7   value for taxes payable in 1992, 2.5 percent of market value for 
 15.8   taxes payable in 1993, and 2.3 2.0 percent of market value for 
 15.9   taxes payable in 1994 1998, and thereafter. 
 15.10     (c) Class 4c property includes: 
 15.11     (1) a structure that is:  
 15.12     (i) situated on real property that is used for housing for 
 15.13  the elderly or for low- and moderate-income families as defined 
 15.14  in Title II, as amended through December 31, 1990, of the 
 15.15  National Housing Act or the Minnesota housing finance agency law 
 15.16  of 1971, as amended, or rules promulgated by the agency and 
 15.17  financed by a direct federal loan or federally insured loan made 
 15.18  pursuant to Title II of the Act; or 
 15.19     (ii) situated on real property that is used for housing the 
 15.20  elderly or for low- and moderate-income families as defined by 
 15.21  the Minnesota housing finance agency law of 1971, as amended, or 
 15.22  rules adopted by the agency pursuant thereto and financed by a 
 15.23  loan made by the Minnesota housing finance agency pursuant to 
 15.24  the provisions of the act.  
 15.25     This clause applies only to property of a nonprofit or 
 15.26  limited dividend entity.  Property is classified as class 4c 
 15.27  under this clause for 15 years from the date of the completion 
 15.28  of the original construction or substantial rehabilitation, or 
 15.29  for the original term of the loan.  
 15.30     (2) a structure that is: 
 15.31     (i) situated upon real property that is used for housing 
 15.32  lower income families or elderly or handicapped persons, as 
 15.33  defined in section 8 of the United States Housing Act of 1937, 
 15.34  as amended; and 
 15.35     (ii) owned by an entity which has entered into a housing 
 15.36  assistance payments contract under section 8 which provides 
 16.1   assistance for 100 percent of the dwelling units in the 
 16.2   structure, other than dwelling units intended for management or 
 16.3   maintenance personnel.  Property is classified as class 4c under 
 16.4   this clause for the term of the housing assistance payments 
 16.5   contract, including all renewals, or for the term of its 
 16.6   permanent financing, whichever is shorter; and 
 16.7      (3) a qualified low-income building as defined in section 
 16.8   42(c)(2) of the Internal Revenue Code of 1986, as amended 
 16.9   through December 31, 1990, that (i) receives a low-income 
 16.10  housing credit under section 42 of the Internal Revenue Code of 
 16.11  1986, as amended through December 31, 1990; or (ii) meets the 
 16.12  requirements of that section and receives public financing, 
 16.13  except financing provided under sections 469.174 to 469.179, 
 16.14  which contains terms restricting the rents; or (iii) meets the 
 16.15  requirements of section 273.1317.  Classification pursuant to 
 16.16  this clause is limited to a term of 15 years.  The public 
 16.17  financing received must be from at least one of the following 
 16.18  sources:  government issued bonds exempt from taxes under 
 16.19  section 103 of the Internal Revenue Code of 1986, as amended 
 16.20  through December 31, 1993, the proceeds of which are used for 
 16.21  the acquisition or rehabilitation of the building; programs 
 16.22  under section 221(d)(3), 202, or 236, of Title II of the 
 16.23  National Housing Act; rental housing program funds under Section 
 16.24  8 of the United States Housing Act of 1937 or the market rate 
 16.25  family graduated payment mortgage program funds administered by 
 16.26  the Minnesota housing finance agency that are used for the 
 16.27  acquisition or rehabilitation of the building; public financing 
 16.28  provided by a local government used for the acquisition or 
 16.29  rehabilitation of the building, including grants or loans from 
 16.30  federal community development block grants, HOME block grants, 
 16.31  or residential rental bonds issued under chapter 474A; or other 
 16.32  rental housing program funds provided by the Minnesota housing 
 16.33  finance agency for the acquisition or rehabilitation of the 
 16.34  building. 
 16.35     For all properties described in clauses (1), (2), and (3) 
 16.36  and in paragraph (d), the market value determined by the 
 17.1   assessor must be based on the normal approach to value using 
 17.2   normal unrestricted rents unless the owner of the property 
 17.3   elects to have the property assessed under Laws 1991, chapter 
 17.4   291, article 1, section 55.  If the owner of the property elects 
 17.5   to have the market value determined on the basis of the actual 
 17.6   restricted rents, as provided in Laws 1991, chapter 291, article 
 17.7   1, section 55, the property will be assessed at the rate 
 17.8   provided for class 4a or class 4b property, as appropriate.  
 17.9   Properties described in clauses (1)(ii), (3), and (4) may apply 
 17.10  to the assessor for valuation under Laws 1991, chapter 291, 
 17.11  article 1, section 55.  The land on which these structures are 
 17.12  situated has the class rate given in paragraph (b) if the 
 17.13  structure contains fewer than four units, and the class rate 
 17.14  given in paragraph (a) if the structure contains four or more 
 17.15  units.  This clause applies only to the property of a nonprofit 
 17.16  or limited dividend entity.  
 17.17     (4) a parcel of land, not to exceed one acre, and its 
 17.18  improvements or a parcel of unimproved land, not to exceed one 
 17.19  acre, if it is owned by a neighborhood real estate trust and at 
 17.20  least 60 percent of the dwelling units, if any, on all land 
 17.21  owned by the trust are leased to or occupied by lower income 
 17.22  families or individuals.  This clause does not apply to any 
 17.23  portion of the land or improvements used for nonresidential 
 17.24  purposes.  For purposes of this clause, a lower income family is 
 17.25  a family with an income that does not exceed 65 percent of the 
 17.26  median family income for the area, and a lower income individual 
 17.27  is an individual whose income does not exceed 65 percent of the 
 17.28  median individual income for the area, as determined by the 
 17.29  United States Secretary of Housing and Urban Development.  For 
 17.30  purposes of this clause, "neighborhood real estate trust" means 
 17.31  an entity which is certified by the governing body of the 
 17.32  municipality in which it is located to have the following 
 17.33  characteristics: 
 17.34     (a) it is a nonprofit corporation organized under chapter 
 17.35  317A; 
 17.36     (b) it has as its principal purpose providing housing for 
 18.1   lower income families in a specific geographic community 
 18.2   designated in its articles or bylaws; 
 18.3      (c) it limits membership with voting rights to residents of 
 18.4   the designated community; and 
 18.5      (d) it has a board of directors consisting of at least 
 18.6   seven directors, 60 percent of whom are members with voting 
 18.7   rights and, to the extent feasible, 25 percent of whom are 
 18.8   elected by resident members of buildings owned by the trust; and 
 18.9      (5) except as provided in subdivision 22, paragraph (c), 
 18.10  real property devoted to temporary and seasonal residential 
 18.11  occupancy for recreation purposes, including real property 
 18.12  devoted to temporary and seasonal residential occupancy for 
 18.13  recreation purposes and not devoted to commercial purposes for 
 18.14  more than 250 days in the year preceding the year of 
 18.15  assessment.  For purposes of this clause, property is devoted to 
 18.16  a commercial purpose on a specific day if any portion of the 
 18.17  property is used for residential occupancy, and a fee is charged 
 18.18  for residential occupancy.  In order for a property to be 
 18.19  classified as class 4c, at least 40 percent of the annual gross 
 18.20  lodging receipts related to the property must be from business 
 18.21  conducted between Memorial Day weekend and Labor Day weekend and 
 18.22  at least 60 percent of all bookings by lodging guests during the 
 18.23  year must be for periods of at least three consecutive nights.  
 18.24  Class 4c also includes commercial use real property used 
 18.25  exclusively for recreational purposes in conjunction with class 
 18.26  4c property devoted to temporary and seasonal residential 
 18.27  occupancy for recreational purposes, up to a total of two acres, 
 18.28  provided the property is not devoted to commercial recreational 
 18.29  use for more than 250 days in the year preceding the year of 
 18.30  assessment and is located within two miles of the class 4c 
 18.31  property with which it is used.  Class 4c property classified in 
 18.32  this clause also includes the remainder of class 1c resorts.  
 18.33  Owners of real property devoted to temporary and seasonal 
 18.34  residential occupancy for recreation purposes and all or a 
 18.35  portion of which was devoted to commercial purposes for not more 
 18.36  than 250 days in the year preceding the year of assessment 
 19.1   desiring classification as class 1c or 4c, must submit a 
 19.2   declaration to the assessor designating the cabins or units 
 19.3   occupied for 250 days or less in the year preceding the year of 
 19.4   assessment by January 15 of the assessment year.  Those cabins 
 19.5   or units and a proportionate share of the land on which they are 
 19.6   located will be designated class 1c or 4c as otherwise 
 19.7   provided.  The remainder of the cabins or units and a 
 19.8   proportionate share of the land on which they are located will 
 19.9   be designated as class 3a.  The first $100,000 of the market 
 19.10  value of the remainder of the cabins or units and a 
 19.11  proportionate share of the land on which they are located shall 
 19.12  have a class rate of three percent.  The owner of property 
 19.13  desiring designation as class 1c or 4c property must provide 
 19.14  guest registers or other records demonstrating that the units 
 19.15  for which class 1c or 4c designation is sought were not occupied 
 19.16  for more than 250 days in the year preceding the assessment if 
 19.17  so requested.  The portion of a property operated as a (1) 
 19.18  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 19.19  facility operated on a commercial basis not directly related to 
 19.20  temporary and seasonal residential occupancy for recreation 
 19.21  purposes shall not qualify for class 1c or 4c; 
 19.22     (6) (2) real property up to a maximum of one acre of land 
 19.23  owned by a nonprofit community service oriented organization; 
 19.24  provided that the property is not used for a revenue-producing 
 19.25  activity for more than six days in the calendar year preceding 
 19.26  the year of assessment and the property is not used for 
 19.27  residential purposes on either a temporary or permanent basis.  
 19.28  For purposes of this clause, a "nonprofit community service 
 19.29  oriented organization" means any corporation, society, 
 19.30  association, foundation, or institution organized and operated 
 19.31  exclusively for charitable, religious, fraternal, civic, or 
 19.32  educational purposes, and which is exempt from federal income 
 19.33  taxation pursuant to section 501(c)(3), (10), or (19) of the 
 19.34  Internal Revenue Code of 1986, as amended through December 31, 
 19.35  1990.  For purposes of this clause, "revenue-producing 
 19.36  activities" shall include but not be limited to property or that 
 20.1   portion of the property that is used as an on-sale intoxicating 
 20.2   liquor or 3.2 percent malt liquor establishment licensed under 
 20.3   chapter 340A, a restaurant open to the public, bowling alley, a 
 20.4   retail store, gambling conducted by organizations licensed under 
 20.5   chapter 349, an insurance business, or office or other space 
 20.6   leased or rented to a lessee who conducts a for-profit 
 20.7   enterprise on the premises.  Any portion of the property which 
 20.8   is used for revenue-producing activities for more than six days 
 20.9   in the calendar year preceding the year of assessment shall be 
 20.10  assessed as class 3a.  The use of the property for social events 
 20.11  open exclusively to members and their guests for periods of less 
 20.12  than 24 hours, when an admission is not charged nor any revenues 
 20.13  are received by the organization shall not be considered a 
 20.14  revenue-producing activity; 
 20.15     (7) (3) post-secondary student housing of not more than one 
 20.16  acre of land that is owned by a nonprofit corporation organized 
 20.17  under chapter 317A and is used exclusively by a student 
 20.18  cooperative, sorority, or fraternity for on-campus housing or 
 20.19  housing located within two miles of the border of a college 
 20.20  campus; and 
 20.21     (8) (4) manufactured home parks as defined in section 
 20.22  327.14, subdivision 3. 
 20.23     Class 4c property has a class rate of 2.3 2.0 percent of 
 20.24  market value, except that (i) for each parcel of seasonal 
 20.25  residential recreational property not used for commercial 
 20.26  purposes under clause (5) (1) the first $72,000 $75,000 of 
 20.27  market value on each parcel has a class rate of 1.75 percent for 
 20.28  taxes payable in 1997 and 1.5 percent for taxes payable in 1998 
 20.29  and thereafter, and the market value of each parcel that 
 20.30  exceeds $72,000 $75,000 has a class rate of 2.5 percent, and 
 20.31  (ii) manufactured home parks assessed under clause (8) have a 
 20.32  class rate of two percent for taxes payable in 1996, and 
 20.33  thereafter. 
 20.34     (d) Class 4d property includes: 
 20.35     (1) a structure that is: 
 20.36     (i) situated on real property that is used for housing for 
 21.1   the elderly or for low and moderate income families as defined 
 21.2   by the Farmers Home Administration; 
 21.3      (ii) located in a municipality of less than 10,000 
 21.4   population; and 
 21.5      (iii) financed by a direct loan or insured loan from the 
 21.6   Farmers Home Administration.  Property is classified under this 
 21.7   clause for 15 years from the date of the completion of the 
 21.8   original construction or for the original term of the loan.  
 21.9      The class rates in paragraph (c), clauses (1), (2), and (3) 
 21.10  and this clause apply to the properties described in them, only 
 21.11  in proportion to occupancy of the structure by elderly or 
 21.12  handicapped persons or low and moderate income families as 
 21.13  defined in the applicable laws unless construction of the 
 21.14  structure had been commenced prior to January 1, 1984; or the 
 21.15  project had been approved by the governing body of the 
 21.16  municipality in which it is located prior to June 30, 1983; or 
 21.17  financing of the project had been approved by a federal or state 
 21.18  agency prior to June 30, 1983.  For those properties, 4c or 4d 
 21.19  classification is available only for those units meeting the 
 21.20  requirements of section 273.1318. 
 21.21     Classification under this clause is only available to 
 21.22  property of a nonprofit or limited dividend entity. 
 21.23     In the case of a structure financed or refinanced under any 
 21.24  federal or state mortgage insurance or direct loan program 
 21.25  exclusively for housing for the elderly or for housing for the 
 21.26  handicapped, a unit shall be considered occupied so long as it 
 21.27  is actually occupied by an elderly or handicapped person or, if 
 21.28  vacant, is held for rental to an elderly or handicapped person. 
 21.29     (2) For taxes payable in 1992, 1993, and 1994, only, 
 21.30  buildings and appurtenances, together with the land upon which 
 21.31  they are located, leased by the occupant under the community 
 21.32  lending model lease-purchase mortgage loan program administered 
 21.33  by the Federal National Mortgage Association, provided the 
 21.34  occupant's income is no greater than 60 percent of the county or 
 21.35  area median income, adjusted for family size and the building 
 21.36  consists of existing single family or duplex housing.  The lease 
 22.1   agreement must provide for a portion of the lease payment to be 
 22.2   escrowed as a nonrefundable down payment on the housing.  To 
 22.3   qualify under this clause, the taxpayer must apply to the county 
 22.4   assessor by May 30 of each year.  The application must be 
 22.5   accompanied by an affidavit or other proof required by the 
 22.6   assessor to determine qualification under this clause. 
 22.7      (3) Qualifying buildings and appurtenances, together with 
 22.8   the land upon which they are located, leased for a period of up 
 22.9   to five years by the occupant under a lease-purchase program 
 22.10  administered by the Minnesota housing finance agency or a 
 22.11  housing and redevelopment authority authorized under sections 
 22.12  469.001 to 469.047, provided the occupant's income is no greater 
 22.13  than 80 percent of the county or area median income, adjusted 
 22.14  for family size, and the building consists of two or less 
 22.15  dwelling units.  The lease agreement must provide for a portion 
 22.16  of the lease payment to be escrowed as a nonrefundable down 
 22.17  payment on the housing.  The administering agency shall verify 
 22.18  the occupants income eligibility and certify to the county 
 22.19  assessor that the occupant meets the income criteria under this 
 22.20  paragraph.  To qualify under this clause, the taxpayer must 
 22.21  apply to the county assessor by May 30 of each year.  For 
 22.22  purposes of this section, "qualifying buildings and 
 22.23  appurtenances" shall be defined as one or two unit residential 
 22.24  buildings which are unoccupied and have been abandoned and 
 22.25  boarded for at least six months is qualifying low-income rental 
 22.26  housing certified to the assessor by the housing finance agency 
 22.27  under sections 273.126 and 462A.071.  Class 4d includes land in 
 22.28  proportion to the total market value of the building that is 
 22.29  qualifying low-income rental housing.  For all properties 
 22.30  qualifying as class 4d, the market value determined by the 
 22.31  assessor must be based on the normal approach to value using 
 22.32  normal unrestricted rents. 
 22.33     Class 4d property has a class rate of two one percent of 
 22.34  market value except that property classified under clause (3), 
 22.35  shall have the same class rate as class 1a property. 
 22.36     (e) Residential rental property that would otherwise be 
 23.1   assessed as class 4 property under paragraph (a); paragraph (b), 
 23.2   clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 23.3   (4), is assessed at the class rate applicable to it under 
 23.4   Minnesota Statutes 1988, section 273.13, if it is found to be a 
 23.5   substandard building under section 273.1316.  Residential rental 
 23.6   property that would otherwise be assessed as class 4 property 
 23.7   under paragraph (d) is assessed at 2.3 percent of market value 
 23.8   if it is found to be a substandard building under section 
 23.9   273.1316. 
 23.10     (f) Class 4e property consists of the residential portion 
 23.11  of any structure located within a city that was converted from 
 23.12  nonresidential use to residential use, provided that: 
 23.13     (1) the structure had formerly been used as a warehouse; 
 23.14     (2) the structure was originally constructed prior to 1940; 
 23.15     (3) the conversion was done after December 31, 1995, but 
 23.16  before January 1, 2003; and 
 23.17     (4) the conversion involved an investment of at least 
 23.18  $25,000 per residential unit. 
 23.19     Class 4e property has a class rate of 2.3 percent, provided 
 23.20  that a structure is eligible for class 4e classification only in 
 23.21  the 12 assessment years immediately following the conversion. 
 23.22     Sec. 7.  Minnesota Statutes 1996, section 273.13, 
 23.23  subdivision 31, is amended to read: 
 23.24     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 23.25     (1) tools, implements, and machinery of an electric 
 23.26  generating, transmission, or distribution system or a pipeline 
 23.27  system transporting or distributing water, gas, crude oil, or 
 23.28  petroleum products or mains and pipes used in the distribution 
 23.29  of steam or hot or chilled water for heating or cooling 
 23.30  buildings, which are fixtures; 
 23.31     (2) unmined iron ore and low-grade iron-bearing formations 
 23.32  as defined in section 273.14; and 
 23.33     (3) all other property not otherwise classified. 
 23.34     Class 5 property has a class rate of 5.06 4.0 percent of 
 23.35  market value for taxes payable in 1998 and thereafter. 
 23.36     Sec. 8.  [462A.071] [CERTIFICATION OF HOUSING QUALIFYING 
 24.1   FOR REDUCED PROPERTY TAX RATE.] 
 24.2      Subdivision 1.  [CERTIFICATION.] By June 30 of each year, 
 24.3   the agency must certify to local assessors the units of 
 24.4   low-income rental properties that qualify for class 4d under 
 24.5   sections 273.126 and 273.13.  In making these certifications, 
 24.6   the agency may rely on the application and supporting 
 24.7   information supplied by the property owner as to compliance with 
 24.8   the income limits under section 273.126, subdivision 2, and 
 24.9   satisfaction of the minimum housing quality standards under 
 24.10  subdivision 4. 
 24.11     Subd. 2.  [APPLICATION.] (a) In order to qualify for 
 24.12  certification under subdivision 1, the owner or manager of the 
 24.13  property must annually apply to the agency.  The application 
 24.14  must be in the form prescribed by the agency, contain the 
 24.15  information required by the agency, and be submitted by the date 
 24.16  and time specified by the agency. 
 24.17     (b) Each application must include: 
 24.18     (1) the property tax identification number; 
 24.19     (2) the number, type, and size of units the applicant seeks 
 24.20  to qualify as low-income housing under class 4d; 
 24.21     (3) the number, type, and size of units in the property for 
 24.22  which the applicant is not seeking qualification, if any; 
 24.23     (4) a certification that the property has been inspected by 
 24.24  a qualified inspector within the past three years and meets the 
 24.25  minimum housing quality standards or is exempt from the 
 24.26  inspection requirement under subdivision 4; 
 24.27     (5) a statement indicating the building is in compliance 
 24.28  with the income limits; 
 24.29     (6) an executed agreement to restrict rents meeting the 
 24.30  requirements specified by the agency or executed leases for the 
 24.31  units for which qualification as low-income housing as class 4d 
 24.32  under section 273.13 is sought and the rent schedule; and 
 24.33     (7) any additional information the agency deems appropriate 
 24.34  to require. 
 24.35     (c) The applicant must pay a per-unit application fee to be 
 24.36  set by the agency.  The application fee charged by the agency 
 25.1   must approximately equal the costs of processing and reviewing 
 25.2   the applications.  The fee must be deposited in the general fund.
 25.3      Subd. 3.  [AGREEMENT TO RESTRICT RENTS.] The agency may 
 25.4   prescribe one or more standard form agreements to restrict rents 
 25.5   that meet the requirements of section 273.126, subdivision 3.  
 25.6   The agreements must be in recordable form.  The agency may 
 25.7   require applicants to execute a rent restriction agreement in 
 25.8   this form as a condition of entering an agreement to restrict 
 25.9   rents. 
 25.10     Subd. 4.  [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 
 25.11  qualify for taxation under class 4d under section 273.13, a unit 
 25.12  must meet both the housing maintenance code of the local unit of 
 25.13  government in which the unit is located, if such a code has been 
 25.14  adopted, and the housing quality standards adopted by the United 
 25.15  States Department of Housing and Urban Development. 
 25.16     (b) In order to meet the minimum housing quality standards, 
 25.17  a building must be inspected by an independent designated 
 25.18  inspector at least once every three years.  The inspector must 
 25.19  certify that the building complies with the minimum standards.  
 25.20  The property owner must pay the cost of the inspection. 
 25.21     (c) The agency may exempt from the inspection requirement 
 25.22  housing units that are financed by a governmental entity and 
 25.23  subject to regular inspection or other compliance checks with 
 25.24  regard to minimum housing quality.  Written certification must 
 25.25  be supplied to show that these exempt units have been inspected 
 25.26  within the last three years and comply with the requirements 
 25.27  under the public financing or local requirements. 
 25.28     Subd. 5.  [HOUSING INSPECTORS.] (a) Housing inspections 
 25.29  required by this section may be conducted only by persons 
 25.30  designated by the agency.  The agency may designate one or more 
 25.31  persons to conduct inspections for all or part of the state.  A 
 25.32  designated inspector may charge a fee for an inspection up to a 
 25.33  maximum amount approved by the agency.  The inspector must be 
 25.34  independent of the owner or manager of the inspected property. 
 25.35     (b) The agency must maintain a list of persons eligible to 
 25.36  conduct housing inspections under this section. 
 26.1      Subd. 6.  [SECTION 8 AND TAX CREDIT UNITS.] (a) The agency 
 26.2   may deem units as meeting the requirements of section 273.126 
 26.3   and this section, if the units either: 
 26.4      (1) are subject to a housing assistance payments contract 
 26.5   under section 8 of the United States Housing Act of 1937, as 
 26.6   amended; or 
 26.7      (2) are rent and income restricted units of a qualified 
 26.8   low-income housing project receiving tax credits under section 
 26.9   42(g) of the Internal Revenue Code of 1986, as amended. 
 26.10     (b) The agency may certify these deemed units under 
 26.11  subdivision 1 based on a simplified application procedure that 
 26.12  verifies the unit's qualifications under paragraph (a). 
 26.13     Subd. 7.  [MONITORING COMPLIANCE.] (a) The agency must 
 26.14  monitor compliance by building owners with the requirements of 
 26.15  section 273.126 and this section.  The agency must annually 
 26.16  conduct on-site examinations of a sample of the buildings 
 26.17  receiving class 4d taxation to monitor compliance.  The agency 
 26.18  may contract with third parties to monitor compliance. 
 26.19     (b) An inspector, designated by the agency under 
 26.20  subdivision 5, shall notify the agency if, in conducting an 
 26.21  inspection under subdivision 4, the inspector finds that: 
 26.22     (1) a unit is receiving class 4d taxation; 
 26.23     (2) the unit is not in compliance with the requirements of 
 26.24  subdivision 4; and 
 26.25     (3) the owner or manager fails or refuses to cure the 
 26.26  violations within a reasonable time after receiving notification 
 26.27  of the violation. 
 26.28     Subd. 8.  [PENALTIES.] (a) The penalties provided by this 
 26.29  subdivision apply to each unit that received class 4d taxation 
 26.30  for a year and failed to meet the requirements of section 
 26.31  273.126 and this section. 
 26.32     (b) If the owner or manager does not comply with the rent 
 26.33  restriction agreement, or does not comply with the income 
 26.34  restrictions or minimum housing quality standards, a penalty 
 26.35  applies equal to the increased taxes that would have been 
 26.36  imposed if the property had not been classified under class 4d 
 27.1   for the year in which restrictions were violated. 
 27.2      (c) If the agency finds that the violations were 
 27.3   inadvertent and insubstantial, a penalty of $....... per unit 
 27.4   per year applies in lieu of the penalty specified under 
 27.5   paragraph (b).  In order to qualify under this paragraph, 
 27.6   violations of the minimum housing quality standards must be 
 27.7   corrected within a reasonable period of time and rent charged in 
 27.8   excess of the agreement must be rebated to the tenants. 
 27.9      (d) The agency may abate the penalties under this 
 27.10  subdivision for reasonable cause. 
 27.11     (e) Penalties assessed under paragraph (c) are payable to 
 27.12  the agency and must be deposited in the general fund.  If an 
 27.13  owner or manager fails to timely pay a penalty imposed under 
 27.14  paragraph (c), the agency may choose to: 
 27.15     (1) impose the penalty under paragraph (b); or 
 27.16     (2) certify the penalty under paragraph (c) to the auditor 
 27.17  for collection as additional taxes. 
 27.18  The agency shall certify to the county auditor penalties 
 27.19  assessed under paragraph (b) and clause (2).  The auditor shall 
 27.20  impose and collect the certified penalties as additional taxes 
 27.21  which will be distributed to taxing districts in the same manner 
 27.22  as property taxes on the property. 
 27.23     Subd. 9.  [TAX COURT REVIEW.] (a) An owner may appeal to 
 27.24  tax court as provided in section 271.06: 
 27.25     (1) a denial of a request for certification of a property 
 27.26  as qualifying for class 4d taxation; 
 27.27     (2) imposition of a penalty under this section; or 
 27.28     (3) denial of a request to abate a penalty. 
 27.29     (b) The county attorney shall represent the public in 
 27.30  opposing the appeal. 
 27.31     Subd. 10.  [RULEMAKING.] (a) The agency may adopt 
 27.32  administrative rules under chapter 14 to carry out the 
 27.33  provisions of this section, including establishing standards for 
 27.34  abating penalties, violations that are inadvertent and 
 27.35  insubstantial, selection of inspectors, selection of persons to 
 27.36  monitor compliance, establishing rent restriction agreement 
 28.1   terms, or any other purpose. 
 28.2      (b) The agency may adopt emergency rules under chapter 14.  
 28.3   Any emergency rules adopted under this authority expire on 
 28.4   January 1, 1999. 
 28.5      Sec. 9.  Minnesota Statutes 1996, section 469.040, is 
 28.6   amended by adding a subdivision to read: 
 28.7      Subd. 1a.  [LIMITS FOR EXEMPT HOUSING PROJECTS.] (a) The 
 28.8   provisions of this subdivision apply to housing projects and 
 28.9   housing development projects acquired, constructed, financed, or 
 28.10  refinanced after December 31, 1997. 
 28.11     (b) For a project to qualify for the property tax exemption 
 28.12  under this section, the authority must establish income 
 28.13  guidelines meeting the requirements of paragraph (c) and rent 
 28.14  restrictions under paragraph (d). 
 28.15     (c) The housing authority must establish and make good 
 28.16  faith efforts to abide by one of the following income limits for 
 28.17  the housing project: 
 28.18     (1) at least 20 percent of the housing units are occupied 
 28.19  by individuals whose incomes are 50 percent or less of the area 
 28.20  median gross income; or 
 28.21     (2) at least 40 percent of the housing units are occupied 
 28.22  by individuals whose incomes are 60 percent or less of the area 
 28.23  median gross income. 
 28.24     For purposes of this paragraph, the terms defined in 
 28.25  section 42 of the Internal Revenue Code of 1986 apply, except 
 28.26  "median area gross income" means the greater of (1) the median 
 28.27  gross income for the area determined under section 42 of the 
 28.28  Internal Revenue Code of 1986, as amended, or (2) the median 
 28.29  gross income for the state. 
 28.30     (d) The provisions of this subdivision do not apply to all 
 28.31  or part of a housing project that is subject to the requirements 
 28.32  of section 5 of the United States Housing Act of 1937.  
 28.33     Sec. 10.  Minnesota Statutes 1996, section 469.040, 
 28.34  subdivision 3, is amended to read: 
 28.35     Subd. 3.  [STATEMENT FILED WITH ASSESSOR; PERCENTAGE TAX ON 
 28.36  RENTALS.] Notwithstanding the provisions of subdivision 1, after 
 29.1   a housing project or a housing development project carried on 
 29.2   under sections 469.016 to 469.026 has become occupied, in whole 
 29.3   or in part, an authority shall file with the assessor, on or 
 29.4   before April 15 of each year, a statement of the aggregate 
 29.5   shelter rentals of that project collected during the preceding 
 29.6   calendar year.  Unless a greater amount has been agreed upon 
 29.7   between the authority and the governing body or bodies for which 
 29.8   the authority was created, in whose jurisdiction the project is 
 29.9   located, five percent of the aggregate shelter rentals shall be 
 29.10  charged to the authority as a service charge for the services 
 29.11  and facilities to be furnished with respect to that project.  
 29.12  The service charge shall be collected from the authority in the 
 29.13  manner provided by law for the assessment and collection of 
 29.14  taxes.  The amount so collected shall be distributed to the 
 29.15  several taxing bodies in the same proportion as the tax rate of 
 29.16  each bears to the total tax rate of those taxing bodies.  The 
 29.17  governing body or bodies for which the authority has been 
 29.18  created, in whose jurisdiction the project is located, may agree 
 29.19  with the authority for the payment of a service charge for a 
 29.20  housing project or a housing development project in an amount 
 29.21  greater than five percent of the aggregate annual shelter 
 29.22  rentals of any project, upon the basis of shelter rentals or 
 29.23  upon another basis agreed upon.  The service charge may not 
 29.24  exceed the amount which would be payable in taxes were the 
 29.25  property not exempt.  If such an agreement is made, the service 
 29.26  charge so agreed upon shall be collected and distributed in the 
 29.27  manner above provided.  If the project has become occupied, or 
 29.28  if the land upon which the project is to be constructed has been 
 29.29  acquired, the agreement shall specify the location of the 
 29.30  project for which the agreement is made.  "Shelter rental" means 
 29.31  the total rentals of a housing project exclusive of any charge 
 29.32  for utilities and special services such as heat, water, 
 29.33  electricity, gas, sewage disposal, or garbage removal.  "Service 
 29.34  charge" means payment in lieu of taxes.  The records of each 
 29.35  housing project shall be open to inspection by the proper 
 29.36  assessing officer. 
 30.1      Sec. 11.  [TEMPORARY EXEMPTIONS FROM INSPECTION 
 30.2   REQUIREMENTS.] 
 30.3      (a) The Minnesota housing finance agency may provide a 
 30.4   temporary exemption to the inspection requirement under 
 30.5   Minnesota Statutes, sections 273.126, subdivision 4, and 
 30.6   462A.071, if the agency finds that: 
 30.7      (1) the property owner made a good faith effort to obtain 
 30.8   an inspection; and 
 30.9      (2) the owner was unable to obtain an inspection in time to 
 30.10  apply because the designated inspectors were unable to conduct 
 30.11  all the requested inspections. 
 30.12     (b) If a unit that is exempted under this section does not 
 30.13  ultimately obtain a certification from a designated inspector 
 30.14  that it is in compliance with the minimum housing quality 
 30.15  standards, the additional taxes under Minnesota Statutes, 
 30.16  section 273.126, subdivision 5, apply. 
 30.17     (c) Procedures or rules for granting exemptions under this 
 30.18  section are not subject to the administrative rulemaking under 
 30.19  Minnesota Statutes, chapter 14. 
 30.20     (d) The authority under this section expires December 31, 
 30.21  2000. 
 30.22     Sec. 12.  [APPROPRIATION.] 
 30.23     $450,000 is appropriated for fiscal years 1998 and 1999 
 30.24  from the general fund to the housing finance agency for purposes 
 30.25  of administering the certification of qualifying low-income 
 30.26  residential properties for property taxation under class 4d. 
 30.27     Sec. 13.  [REPEALER.] 
 30.28     Minnesota Statutes 1996, sections 273.13, subdivision 32; 
 30.29  273.1317; and 273.1318, are repealed. 
 30.30     Sec. 14.  [EFFECTIVE DATE.] 
 30.31     Sections 1, 2, and 13 are effective for property taxes 
 30.32  payable in 1999 and thereafter.  Sections 3 to 7 are effective 
 30.33  for taxes payable in 1998 and thereafter, except the low-income 
 30.34  housing provisions in class 4c and 4d are effective for taxes 
 30.35  payable in 1999 and thereafter.  Sections 8 and 11 are effective 
 30.36  the day following final enactment.  Sections 9 and 10 are 
 31.1   effective August 1, 1997. 
 31.2                              ARTICLE 2 
 31.3                          EDUCATION FINANCE 
 31.4      Section 1.  Minnesota Statutes 1996, section 124.239, is 
 31.5   amended by adding a subdivision to read: 
 31.6      Subd. 4a.  [ALTERNATIVE FACILITIES REVENUE.] A district's 
 31.7   alternative facilities revenue for a fiscal year equals its 
 31.8   costs related to an approved facility plan as follows: 
 31.9      (1) if the district has indicated to the commissioner that 
 31.10  bonds will be issued, the principal and interest payments on 
 31.11  outstanding bonds issued according to subdivision 3; or 
 31.12     (2) if the district has indicated to the commissioner that 
 31.13  the plan will be funded on a pay-as-you-go basis, the district's 
 31.14  costs according to the schedule approved in the plan. 
 31.15     Sec. 2.  Minnesota Statutes 1996, section 124.239, 
 31.16  subdivision 5, is amended to read: 
 31.17     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
 31.18  approval, may levy for costs related to an approved facility 
 31.19  plan as follows:  
 31.20     (a) if the district has indicated to the commissioner that 
 31.21  bonds will be issued, the district may levy for the principal 
 31.22  and interest payments on outstanding bonds issued according to 
 31.23  subdivision 3; or 
 31.24     (b) if the district has indicated to the commissioner that 
 31.25  the plan will be funded through levy, the district may levy 
 31.26  according to the schedule approved in the plan.  To obtain 
 31.27  alternative facilities revenue, a school district may levy an 
 31.28  amount equal to the district's alternative facilities revenue as 
 31.29  defined in subdivision 4a, multiplied by the lesser of one, or 
 31.30  the ratio of the quotient derived by dividing the adjusted net 
 31.31  tax capacity of the district for the year before the year the 
 31.32  levy is certified by the actual pupil units in the district for 
 31.33  the school year to which the levy is attributable, to the 
 31.34  equalizing factor under section 124A.02. 
 31.35     Sec. 3.  Minnesota Statutes 1996, section 124.239, is 
 31.36  amended by adding a subdivision to read: 
 32.1      Subd. 5a.  [ALTERNATIVE FACILITIES AID.] A district's 
 32.2   alternative facilities aid is the difference between its 
 32.3   alternative facilities revenue and its alternative facilities 
 32.4   levy.  If a district does not levy the entire amount permitted, 
 32.5   alternative facilities aid must be reduced in proportion to the 
 32.6   actual amount levied. 
 32.7      Sec. 4.  Minnesota Statutes 1996, section 124.2716, 
 32.8   subdivision 3, is amended to read: 
 32.9      Subd. 3.  [EXTENDED DAY LEVY.] To obtain extended day 
 32.10  revenue, a school district may levy an amount equal to the 
 32.11  district's extended day revenue as defined in subdivision 2 
 32.12  multiplied by the lesser of one, or the ratio of the quotient 
 32.13  derived by dividing the adjusted net tax capacity of the 
 32.14  district for the year before the year the levy is certified by 
 32.15  the actual pupil units in the district for the school year to 
 32.16  which the levy is attributable, to $3,700 the equalizing factor 
 32.17  under section 124A.02.  
 32.18     Sec. 5.  Minnesota Statutes 1996, section 124.2727, 
 32.19  subdivision 6b, is amended to read: 
 32.20     Subd. 6b.  [DISTRICT COOPERATION LEVY.] To receive district 
 32.21  cooperation revenue, a district may levy an amount equal to the 
 32.22  district's cooperation revenue multiplied by the lesser of one, 
 32.23  or the ratio of the quotient derived by dividing the adjusted 
 32.24  net tax capacity of the district for the year preceding the year 
 32.25  the levy is certified by the actual pupil units in the district 
 32.26  for the school year to which the levy is attributable 
 32.27  to $3,500 the equalizing factor under section 124A.02. 
 32.28     Sec. 6.  Minnesota Statutes 1996, section 124.312, 
 32.29  subdivision 4, is amended to read: 
 32.30     Subd. 4.  [INTEGRATION REVENUE.] For fiscal year 1996 1999 
 32.31  and later fiscal years, integration revenue equals the sum of 
 32.32  integration aid and integration levy under section 124.912, 
 32.33  subdivision 2. 
 32.34     Sec. 7.  Minnesota Statutes 1996, section 124.312, 
 32.35  subdivision 5, is amended to read: 
 32.36     Subd. 5.  [INTEGRATION AID.] For fiscal year 1996 1999 and 
 33.1   later fiscal years integration aid equals the following amounts: 
 33.2      (1) for independent school district No. 709, Duluth, 
 33.3   $1,385,000 $2,045,000 plus $58 times its actual pupil units for 
 33.4   that fiscal year; 
 33.5      (2) for independent school district No. 625, St. Paul, 
 33.6   $8,090,700 plus $197 times its actual pupil units for that 
 33.7   fiscal year; and 
 33.8      (3) for special school district No. 1, Minneapolis, 
 33.9   $9,368,300 plus $197 times its actual pupil units for that 
 33.10  fiscal year. 
 33.11     Sec. 8.  Minnesota Statutes 1996, section 124.314, 
 33.12  subdivision 2, is amended to read: 
 33.13     Subd. 2.  [LEVY.] For fiscal year 1996 1999 and thereafter, 
 33.14  a school district's targeted needs levy equals the sum of its 
 33.15  integration levy under section 124.912, subdivision 2, and that 
 33.16  portion of its special education levy attributed to the limited 
 33.17  English proficiency program. 
 33.18     Sec. 9.  Minnesota Statutes 1996, section 124.83, 
 33.19  subdivision 4, is amended to read: 
 33.20     Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
 33.21  safety revenue, a district may levy an amount equal to the 
 33.22  district's health and safety revenue as defined in subdivision 3 
 33.23  multiplied by the lesser of one, or the ratio of the quotient 
 33.24  derived by dividing the adjusted net tax capacity of the 
 33.25  district for the year preceding the year the levy is certified 
 33.26  by the actual pupil units in the district for the school year to 
 33.27  which the levy is attributable, to $4,707.50 the equalizing 
 33.28  factor under section 124A.02. 
 33.29     Sec. 10.  [124.913] [LEASE PURCHASE; INSTALLMENT BUYS.] 
 33.30     Subdivision 1.  [LEASE PURCHASE; INSTALLMENT BUYS.] (a) 
 33.31  Upon application to, and approval by, the commissioner in 
 33.32  accordance with the procedures and limits in section 124.91, 
 33.33  subdivision 1, a district, as defined in this subdivision, may: 
 33.34     (1) purchase real or personal property under an installment 
 33.35  contract; or 
 33.36     (2) may lease real or personal property with an option to 
 34.1   purchase under a lease purchase agreement, by which installment 
 34.2   contract or lease purchase agreement title is kept by the seller 
 34.3   or vendor or assigned to a third party as security for the 
 34.4   purchase price, including interest, if any. 
 34.5      (b) The obligation created by the installment contract or 
 34.6   the lease purchase agreement must not be included in the 
 34.7   calculation of net debt for purposes of section 475.53, and does 
 34.8   not constitute debt under other law.  An election is not 
 34.9   required in connection with the execution of the installment 
 34.10  contract or the lease purchase agreement. 
 34.11     (c) The proceeds of the revenue authorized by this section 
 34.12  must not be used to acquire a facility to be primarily used for 
 34.13  athletic or school administration purposes. 
 34.14     (d) For purposes of this subdivision, "district" means: 
 34.15     (1) a school district required to have a comprehensive plan 
 34.16  for the elimination of segregation whose plan has been 
 34.17  determined by the commissioner to be in compliance with the 
 34.18  state board of education rules relating to equality of 
 34.19  educational opportunity and school desegregation; or 
 34.20     (2) a school district that participates in a joint program 
 34.21  for interdistrict desegregation with a district defined in 
 34.22  clause (1), if the facility acquired under this subdivision is 
 34.23  to be primarily used for the joint program. 
 34.24     (e) Notwithstanding section 124.91, subdivision 1, the 
 34.25  prohibition against a levy by a district to lease or rent a 
 34.26  district-owned building to itself does not apply to levies 
 34.27  otherwise authorized by this subdivision. 
 34.28     (f) For the purposes of this subdivision, any references in 
 34.29  section 124.91, subdivision 1, to building or land shall include 
 34.30  personal property. 
 34.31     Subd. 2.  [LEASE PURCHASE; INSTALLMENT BUYS REVENUE.] A 
 34.32  district's lease purchase and installment buys revenue for a 
 34.33  fiscal year equals the amount needed to make payments required 
 34.34  by a lease purchase agreement, installment purchase agreement, 
 34.35  or other deferred payment agreement: 
 34.36     (1) that was authorized by Minnesota Statutes 1989 
 35.1   Supplement, section 465.71, if: 
 35.2      (i) the agreement was approved by the commissioner before 
 35.3   July 1, 1990, according to Minnesota Statutes 1989 Supplement, 
 35.4   section 275.125, subdivision 11d; or 
 35.5      (ii) the district levied in 1989 for the payments; or 
 35.6      (2) authorized by subdivision 1, or Minnesota Statutes 
 35.7   1996, section 124.91, subdivision 7. 
 35.8      Subd. 3.  [LEASE PURCHASE AND INSTALLMENT BUYS LEVY.] To 
 35.9   receive lease purchase and installment buys revenue, a school 
 35.10  district may levy an amount equal to the district's lease 
 35.11  purchase and installment buys revenue as defined in subdivision 
 35.12  2, multiplied by the lesser of one, or the ratio of the quotient 
 35.13  derived by dividing the adjusted net tax capacity of the 
 35.14  district for the year before the year the levy is certified by 
 35.15  the actual pupil units in the district for the school year to 
 35.16  which the levy is attributable, to the equalizing factor under 
 35.17  section 124A.02. 
 35.18     Subd. 4.  [LEASE PURCHASE AND INSTALLMENT BUYS AID.] A 
 35.19  district's lease purchase and installment buys aid is the 
 35.20  difference between its lease purchase and installment buys 
 35.21  revenue and its lease purchase and installment buys levy.  If a 
 35.22  district does not levy the entire amount permitted, lease 
 35.23  purchase and installment buys aid must be reduced in proportion 
 35.24  to the actual amount levied. 
 35.25     Sec. 11.  Minnesota Statutes 1996, section 124.95, 
 35.26  subdivision 1, is amended to read: 
 35.27     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 35.28  section, the eligible debt service revenue of a district is 
 35.29  defined as follows: 
 35.30     (1) the amount needed to produce between five and six 
 35.31  percent in excess of the amount needed to meet when due the 
 35.32  principal and interest payments on the obligations of the 
 35.33  district for eligible projects according to subdivision 2, 
 35.34  including the amounts necessary for repayment of energy loans 
 35.35  according to section 216C.37 or sections 298.292 to 298.298, 
 35.36  debt service loans and capital loans, lease purchase payments 
 36.1   under section 124.91, subdivisions 2 and 3, alternative 
 36.2   facilities levies under section 124.239, subdivision 5, minus 
 36.3      (2) the amount of debt service excess levy reduction for 
 36.4   that school year calculated according to the procedure 
 36.5   established by the commissioner. 
 36.6      (b) The obligations in this paragraph are excluded from 
 36.7   eligible debt service revenue: 
 36.8      (1) obligations under section 124.2445; 
 36.9      (2) the part of debt service principal and interest paid 
 36.10  from the taconite environmental protection fund or northeast 
 36.11  Minnesota economic protection trust; 
 36.12     (3) obligations issued under Laws 1991, chapter 265, 
 36.13  article 5, section 18, as amended by Laws 1992, chapter 499, 
 36.14  article 5, section 24; and 
 36.15     (4) obligations under section 124.2455. 
 36.16     (c) For purposes of this section, if a preexisting school 
 36.17  district reorganized under section 122.22, 122.23, or 122.241 to 
 36.18  122.248 is solely responsible for retirement of the preexisting 
 36.19  district's bonded indebtedness, capital loans or debt service 
 36.20  loans, debt service equalization aid must be computed separately 
 36.21  for each of the preexisting school districts. 
 36.22     Sec. 12.  Minnesota Statutes 1996, section 124.95, 
 36.23  subdivision 4, is amended to read: 
 36.24     Subd. 4.  [EQUALIZED DEBT SERVICE LEVY.] To obtain debt 
 36.25  service equalization revenue, a district must levy an amount not 
 36.26  to exceed the district's debt service equalization revenue times 
 36.27  the lesser of one or the ratio of: 
 36.28     (1) the quotient derived by dividing the adjusted net tax 
 36.29  capacity of the district for the year before the year the levy 
 36.30  is certified by the actual pupil units in the district for the 
 36.31  school year ending in the year prior to the year the levy is 
 36.32  certified; to 
 36.33     (2) $4,707.50 the equalizing factor under section 124A.02. 
 36.34     Sec. 13.  Minnesota Statutes 1996, section 124A.23, 
 36.35  subdivision 1, is amended to read: 
 36.36     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
 37.1   commissioner shall establish the general education tax rate by 
 37.2   July 1 of each year for levies payable in the following year.  
 37.3   The general education tax capacity rate shall be a rate, rounded 
 37.4   up to the nearest tenth of a percent, that, when applied to the 
 37.5   adjusted net tax capacity for all districts, raises the amount 
 37.6   specified in this subdivision.  The general education tax rate 
 37.7   shall be the rate that raises $1,054,000,000 for fiscal year 
 37.8   1996 and $1,359,000,000 for fiscal year 1997 1998 and 
 37.9   $1,103,000,000 for fiscal year 1999 and later fiscal years.  The 
 37.10  general education tax rate may not be changed due to changes or 
 37.11  corrections made to a district's adjusted net tax capacity after 
 37.12  the tax rate has been established.  
 37.13     Sec. 14.  [MORATORIUM ON REFERENDUM INCREASES.] 
 37.14     A school district may not conduct an election in 1997 under 
 37.15  Minnesota Statutes, section 124A.03, subdivision 2 or 2b, for 
 37.16  property taxes payable in 1998, except that an election may be 
 37.17  conducted under section 124A.03, subdivision 2, paragraph (c), 
 37.18  on the question of revoking or reducing an increased levy amount.
 37.19     Sec. 15.  [1997 REFERENDUM APPROVAL.] 
 37.20     (a) Notwithstanding section 14 or any other law to the 
 37.21  contrary, the commissioner of children, families, and learning 
 37.22  may authorize referendum levy elections under Minnesota 
 37.23  Statutes, section 124A.03, or any successor section for 1997 
 37.24  taxes payable in 1998 only as provided in this section. 
 37.25     (b) The aggregate amount of referendum levies authorized by 
 37.26  the commissioner may not exceed $15,000,000. 
 37.27     (c) A school district that desires to hold an election 
 37.28  under Minnesota Statutes, section 124A.03, must submit an 
 37.29  application to the commissioner by August 1, 1997. 
 37.30     (d) The commissioner shall prioritize applications and 
 37.31  grant authority to hold an election to districts in the 
 37.32  following order: 
 37.33     (1) districts that are in statutory operating debt and have 
 37.34  an approved plan or have received an extension from the 
 37.35  department to file a plan to eliminate the statutory operating 
 37.36  debt; 
 38.1      (2) districts that have referendum levy authority expiring 
 38.2   in fiscal year 1998 or that have a documented hardship; and 
 38.3      (3) all other districts. 
 38.4      (e) The commissioner must approve, deny, or modify each 
 38.5   district's application for referendum levy authority by August 
 38.6   31, 1997. 
 38.7      Sec. 16.  [REPEALER.] 
 38.8      Minnesota Statutes 1996, sections 124.91, subdivisions 2 
 38.9   and 7; and 124.912, subdivisions 2 and 3, are repealed. 
 38.10     Sec. 17.  [EFFECTIVE DATE.] 
 38.11     This article is effective for taxes payable in 1998 and 
 38.12  thereafter, and aids payable in fiscal year 1999 and thereafter. 
 38.13                             ARTICLE 3 
 38.14                        PROPERTY TAX REFUND 
 38.15     Section 1.  Minnesota Statutes 1996, section 290A.03, 
 38.16  subdivision 11, is amended to read: 
 38.17     Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
 38.18  constituting property taxes" means the amount of gross rent 
 38.19  actually paid in cash, or its equivalent, which is attributable 
 38.20  (a) to the property tax paid on the unit or (b) to the amount 20 
 38.21  percent of the gross rent actually paid in cash, or its 
 38.22  equivalent, or the portion of rent paid in lieu of property 
 38.23  taxes, in any calendar year by a claimant for the right of 
 38.24  occupancy of the claimant's Minnesota homestead in the calendar 
 38.25  year, and which rent constitutes the basis, in the succeeding 
 38.26  calendar year of a claim for relief under this chapter by the 
 38.27  claimant.  The amount of rent attributable to property taxes 
 38.28  paid or payments in lieu made on the unit shall be determined by 
 38.29  multiplying the gross rent paid by the claimant for the calendar 
 38.30  year for the unit by a fraction, the numerator of which is the 
 38.31  net tax on the property where the unit is located and the 
 38.32  denominator of which is the total scheduled rent.  In no case 
 38.33  may the rent constituting property taxes exceed 50 percent of 
 38.34  the gross rent paid by the claimant during that calendar year.  
 38.35  In the case of a claimant who resides in a unit for which (1) a 
 38.36  rent subsidy is paid to, or for, the claimant based on the 
 39.1   income of the claimant or the claimant's family, or (2) a 
 39.2   subsidy is paid to a public housing authority that owns or 
 39.3   operates the claimant's rental unit, pursuant to United States 
 39.4   Code, title 42, section 1437c, 20 percent of gross rent actually 
 39.5   paid in cash or its equivalent shall be the claimant's "rent 
 39.6   constituting property taxes paid."  For purposes of this 
 39.7   subdivision, "rent subsidy" does not include any housing 
 39.8   assistance received under aid to families with dependent 
 39.9   children, general assistance, Minnesota supplemental assistance, 
 39.10  supplemental security income, or similar income maintenance 
 39.11  programs. 
 39.12     Sec. 2.  Minnesota Statutes 1996, section 290A.03, 
 39.13  subdivision 13, is amended to read: 
 39.14     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 39.15  payable" means the property tax exclusive of special 
 39.16  assessments, penalties, and interest payable on a claimant's 
 39.17  homestead before reductions made under section 273.13 but after 
 39.18  deductions made under sections 273.135, 273.1391, 273.42, 
 39.19  subdivision 2, and any other state paid property tax credits in 
 39.20  any calendar year.  In the case of a claimant who makes ground 
 39.21  lease payments, "property taxes payable" includes the amount of 
 39.22  the payments directly attributable to the property taxes 
 39.23  assessed against the parcel on which the house is located.  No 
 39.24  apportionment or reduction of the "property taxes payable" shall 
 39.25  be required for the use of a portion of the claimant's homestead 
 39.26  for a business purpose if the claimant does not deduct any 
 39.27  business depreciation expenses for the use of a portion of the 
 39.28  homestead in the determination of federal adjusted gross 
 39.29  income.  For homesteads which are manufactured homes as defined 
 39.30  in section 273.125, subdivision 8, and for homesteads which are 
 39.31  park trailers taxed as manufactured homes under section 168.012, 
 39.32  subdivision 9, "property taxes payable" shall also include the 
 39.33  amount 20 percent of the gross rent paid in the preceding year 
 39.34  for the site on which the homestead is located, which is 
 39.35  attributable to the net tax paid on the site.  The amount 
 39.36  attributable to property taxes shall be determined by 
 40.1   multiplying the net tax on the parcel by a fraction, the 
 40.2   numerator of which is the gross rent paid for the calendar year 
 40.3   for the site and the denominator of which is the gross rent paid 
 40.4   for the calendar year for the parcel.  When a homestead is owned 
 40.5   by two or more persons as joint tenants or tenants in common, 
 40.6   such tenants shall determine between them which tenant may claim 
 40.7   the property taxes payable on the homestead.  If they are unable 
 40.8   to agree, the matter shall be referred to the commissioner of 
 40.9   revenue whose decision shall be final.  Property taxes are 
 40.10  considered payable in the year prescribed by law for payment of 
 40.11  the taxes. 
 40.12     In the case of a claim relating to "property taxes 
 40.13  payable," the claimant must have owned and occupied the 
 40.14  homestead on January 2 of the year in which the tax is payable 
 40.15  and (i) the property must have been classified as homestead 
 40.16  property pursuant to section 273.13, subdivision 22 or 23, on or 
 40.17  before December 15 of the assessment year to which the "property 
 40.18  taxes payable" relate; or (ii) the claimant must provide 
 40.19  documentation from the local assessor that application for 
 40.20  homestead classification has been made on or before December 15 
 40.21  of the year in which the "property taxes payable" were payable 
 40.22  and that the assessor has approved the application. 
 40.23     Sec. 3.  Minnesota Statutes 1996, section 290A.04, 
 40.24  subdivision 2, is amended to read: 
 40.25     Subd. 2.  [HOMEOWNERS.] A claimant whose property taxes 
 40.26  payable are in excess of the percentage of the household income 
 40.27  stated below shall pay an amount equal to the percent of income 
 40.28  shown for the appropriate household income level along with the 
 40.29  percent to be paid by the claimant of the remaining amount of 
 40.30  property taxes payable.  The state refund equals the amount of 
 40.31  property taxes payable that remain, up to the state refund 
 40.32  amount shown below.  
 40.33                        Percent           Percent    Maximum
 40.34  Household Income     of Income          Paid by     State
 40.35                                          Claimant    Refund
 40.36      $0 to 1,029     1.2 percent        18 percent   $440
 40.37   1,030 to 2,059     1.3 percent        18 percent   $440
 40.38   2,060 to 3,099     1.4 percent        20 percent   $440
 40.39   3,100 to 4,129     1.6 percent        20 percent   $440
 41.1    4,130 to 5,159     1.7 percent        20 percent   $440
 41.2    5,160 to 7,229     1.9 percent        25 percent   $440
 41.3    7,230 to 8,259     2.1 percent        25 percent   $440
 41.4    8,260 to 9,289     2.2 percent        25 percent   $440
 41.5    9,290 to 10,319    2.3 percent        30 percent   $440
 41.6   10,320 to 11,349    2.4 percent        30 percent   $440
 41.7   11,350 to 12,389    2.5 percent        30 percent   $440
 41.8   12,390 to 14,449    2.6 percent        30 percent   $440
 41.9   14,450 to 15,479    2.8 percent        35 percent   $440
 41.10  15,480 to 16,509    3.0 percent        35 percent   $440
 41.11  16,510 to 17,549    3.2 percent        40 percent   $440
 41.12  17,550 to 21,669    3.3 percent        40 percent   $440
 41.13  21,670 to 24,769    3.4 percent        45 percent   $440
 41.14  24,770 to 30,959    3.5 percent        45 percent   $440
 41.15  30,960 to 36,119    3.5 percent        45 percent   $440
 41.16  36,120 to 41,279    3.7 percent        50 percent   $440
 41.17  41,280 to 58,829    4.0 percent        50 percent   $440
 41.18  58,830 to 59,859    4.0 percent        50 percent   $310
 41.19  59,860 to 60,889    4.0 percent        50 percent   $210
 41.20  60,890 to 61,929    4.0 percent        50 percent   $100 
 41.21                        Percent           Percent    Maximum
 41.22  Household Income     of Income          Paid by     State
 41.23                                          Claimant    Refund
 41.24      $0 to 2,239     1.0 percent         6 percent   $1,500
 41.25   2,240 to 4,499     1.2 percent         8 percent   $1,500
 41.26   4,500 to 5,619     1.4 percent         8 percent   $1,500
 41.27   5,620 to 7,879     1.4 percent        14 percent   $1,500
 41.28   7,880 to 10,119    1.6 percent        14 percent   $1,500
 41.29  10,120 to 12,359    1.8 percent        20 percent   $1,500
 41.30  12,360 to 15,739    2.0 percent        20 percent   $1,500
 41.31  15,740 to 17,979    2.1 percent        25 percent   $1,500
 41.32  17,980 to 23,599    2.2 percent        31 percent   $1,500
 41.33  23,600 to 74,999    2.2 percent        36 percent   $1,500
 41.34  75,000 to 76,999    3.1 percent        50 percent   $1,500
 41.35  77,000 to 77,999    4.0 percent        50 percent   $1,000
 41.36  78,000 to 78,999    4.0 percent        50 percent   $  500
 41.37  79,000 to 79,999    4.0 percent        50 percent   $  250 
 41.38     The payment made to a claimant shall be the amount of the 
 41.39  state refund calculated under this subdivision.  No payment is 
 41.40  allowed if the claimant's household income is $61,930 $80,000 or 
 41.41  more. 
 41.42     Sec. 4.  Minnesota Statutes 1996, section 290A.04, 
 41.43  subdivision 6, is amended to read: 
 41.44     Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
 41.45  tax refunds payable in calendar year 1996 1998, the commissioner 
 41.46  shall annually adjust the dollar amounts of the income 
 41.47  thresholds and the maximum refunds under subdivisions 2 and 2a 
 41.48  for inflation.  The commissioner shall make the inflation 
 41.49  adjustments in accordance with section 290.06, subdivision 2d, 
 41.50  except that for purposes of this subdivision the percentage 
 41.51  increase shall be determined from the year ending on August 31, 
 41.52  1994, to the year ending on August 31 of the year preceding that 
 41.53  in which the refund is payable.  The commissioner shall not 
 42.1   adjust the dollar amounts under subdivision 2 for refunds that 
 42.2   are payable in calendar year 1998.  Beginning for refunds 
 42.3   payable in 1999, the base year for adjustments of the dollar 
 42.4   amounts in subdivision 2 is the year ending August 31, 1997.  
 42.5   The commissioner shall use the appropriate percentage increase 
 42.6   to annually adjust the income thresholds and maximum refunds 
 42.7   under subdivisions 2 and 2a for inflation without regard to 
 42.8   whether or not the income tax brackets are adjusted for 
 42.9   inflation in that year.  The commissioner shall round the 
 42.10  thresholds and the maximum amounts, as adjusted to the nearest 
 42.11  $10 amount.  If the amount ends in $5, the commissioner shall 
 42.12  round it up to the next $10 amount.  
 42.13     The commissioner shall annually announce the adjusted 
 42.14  refund schedule at the same time provided under section 290.06.  
 42.15  The determination of the commissioner under this subdivision is 
 42.16  not a rule under the administrative procedure act. 
 42.17     Sec. 5.  Minnesota Statutes 1996, section 290A.19, is 
 42.18  amended to read: 
 42.19     290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT 
 42.20  CERTIFICATE.] 
 42.21     (a) The owner or managing agent of any property for which 
 42.22  rent is paid for occupancy as a homestead must furnish a 
 42.23  certificate of rent constituting property tax paid to a person 
 42.24  who is a renter on December 31, in the form prescribed by the 
 42.25  commissioner.  If the renter moves before December 31, the owner 
 42.26  or managing agent may give the certificate to the renter at the 
 42.27  time of moving, or mail the certificate to the forwarding 
 42.28  address if an address has been provided by the renter.  The 
 42.29  certificate must be made available to the renter before February 
 42.30  1 of the year following the year in which the rent was paid.  
 42.31  The owner or managing agent must retain a duplicate of each 
 42.32  certificate or an equivalent record showing the same information 
 42.33  for a period of three years.  The duplicate or other record must 
 42.34  be made available to the commissioner upon request.  For the 
 42.35  purposes of this section, "owner" includes a park owner as 
 42.36  defined under section 327C.01, subdivision 6, and "property" 
 43.1   includes a lot as defined under section 327C.01, subdivision 3. 
 43.2      (b) The certificate of rent constituting property taxes 
 43.3   must include the address of the property, including the county, 
 43.4   and the property tax parcel identification number and any 
 43.5   additional information that the commissioner determines is 
 43.6   appropriate. 
 43.7      (c) If the owner or managing agent fails to provide the 
 43.8   renter with a certificate of rent constituting property taxes, 
 43.9   the commissioner shall allocate the net tax on the building to 
 43.10  the unit on a square footage basis or other appropriate basis as 
 43.11  the commissioner determines.  The renter shall supply the 
 43.12  commissioner with a statement from the county treasurer that 
 43.13  gives the amount of property tax on the parcel, the address and 
 43.14  property tax parcel identification number of the property, and 
 43.15  the number of units in the building. 
 43.16     (d) By January 31 of the year following the year in which 
 43.17  the rent was collected, each owner or managing agent shall 
 43.18  report to the commissioner on a form prescribed by the 
 43.19  commissioner the net tax pertaining to the rental residential 
 43.20  part of the property, the total scheduled rent, and the fraction 
 43.21  computed under section 290A.03, subdivision 11.  A copy of the 
 43.22  property tax statement for taxes payable in that year must be 
 43.23  attached. 
 43.24     Sec. 6.  [REPEALER.] 
 43.25     (a) Minnesota Statutes 1996, sections 270B.12, subdivision 
 43.26  11; 276.012; 290A.055; and 290A.26; and Laws 1995, chapter 264, 
 43.27  article 4, as amended by Laws 1996, chapter 471, article 3, are 
 43.28  repealed.  Notwithstanding Minnesota Statutes, section 645.34, 
 43.29  the sections of statutes amended by the repealed Laws 1995, 
 43.30  chapter 264, article 4, as amended by Laws 1996, chapter 471, 
 43.31  article 3, remain in effect.  
 43.32     (b) Minnesota Statutes 1996, sections 290A.03, subdivisions 
 43.33  12a and 14, are repealed. 
 43.34     Sec. 7.  [EFFECTIVE DATE.] 
 43.35     Sections 1 to 5 and 6, paragraph (b), are effective for 
 43.36  refunds based on property taxes payable in 1998 and rent paid in 
 44.1   1997 and following years.  Section 6, paragraph (a), is 
 44.2   effective the day following final enactment. 
 44.3                              ARTICLE 4
 44.4                       TAX INCREMENT FINANCING 
 44.5      Section 1.  Minnesota Statutes 1996, section 273.1399, 
 44.6   subdivision 6, is amended to read: 
 44.7      Subd. 6.  [EXEMPT DISTRICTS.] (a) The provisions of this 
 44.8   section do not apply to exempt tax increment financing districts 
 44.9   as specified by this subdivision. 
 44.10     (b) A tax increment financing district for an ethanol 
 44.11  production facility that satisfies all of the following 
 44.12  requirements is exempt: 
 44.13     (1) The district is an economic development district, that 
 44.14  qualifies under section 469.176, subdivision 4c, paragraph (a), 
 44.15  clause (1). 
 44.16     (2) The facility is certified by the commissioner of 
 44.17  agriculture to qualify for state payments for ethanol 
 44.18  development under section 41A.09 to the extent funds are 
 44.19  available. 
 44.20     (3) Increments from the district are used only to finance 
 44.21  the qualifying ethanol development project located in the 
 44.22  district or to pay for administrative costs of the district. 
 44.23     (4) The district is located outside of the seven-county 
 44.24  metropolitan area, as defined in section 473.121. 
 44.25     (5) The tax increment financing plan was approved by a 
 44.26  resolution of the county board. 
 44.27     (6) The exemption provided by this paragraph applies until 
 44.28  the first year after the total amount of increment for the 
 44.29  district exceeds $1,500,000.  The county auditor shall notify 
 44.30  the commissioner of revenue of the expiration of the exemption 
 44.31  by June 1 of the year in which the auditor projects the revenues 
 44.32  from increments will exceed $1,500,000.  On or before the 
 44.33  expiration of the exemption, the municipality may elect to make 
 44.34  a qualifying local contribution under paragraph (d) in lieu of 
 44.35  the state aid reduction. 
 44.36     (c) A qualified housing district is exempt. 
 45.1      (d)(1) A district is exempt if the municipality elects at 
 45.2   the time of approving the tax increment financing plan for the 
 45.3   district to make a qualifying local contribution.  To qualify 
 45.4   for the exemption in each year, the authority or the 
 45.5   municipality must make a qualifying local contribution equal to 
 45.6   the listed percentages of increment from the district or 
 45.7   subdistrict: 
 45.8      (A) for an economic development district, a housing 
 45.9   district, or a renewal and renovation district, ten percent; 
 45.10     (B) for a redevelopment district, a mined underground space 
 45.11  district, or a hazardous substance subdistrict, or a soils 
 45.12  condition district, five percent. 
 45.13     (2) If the municipality elects to make a qualifying 
 45.14  contribution and fails to make the required contribution for a 
 45.15  year, the state aid reduction applies for the year.  The state 
 45.16  aid reduction equals the greater of (A) the required local 
 45.17  contribution or (B) the amount of the aid reduction that applies 
 45.18  under subdivision 3.  For a district exempt under paragraph (b), 
 45.19  no qualifying local contribution is required for years in which 
 45.20  the district is exempt. 
 45.21     (3)(A) If the sum of required local contributions for all 
 45.22  districts in the municipality exceeds two percent of city net 
 45.23  tax capacity as defined in section 477A.011, subdivision 20, for 
 45.24  a year, the municipality's total required local contribution for 
 45.25  that year is limited to two percent of net tax capacity to 
 45.26  qualify for the exemption under this subdivision.  The 
 45.27  municipality may allocate the contribution among the districts 
 45.28  on which it has made elections as it determines appropriate. 
 45.29     (B) If a municipality makes an election under this 
 45.30  subdivision for a district in a year in which item (A) applies, 
 45.31  a minimum annual qualifying contribution must be made for the 
 45.32  district equal to the lesser of 0.25 percent of city net tax 
 45.33  capacity or three percent of increment revenues.  This minimum 
 45.34  contribution applies for the life of the district for each year 
 45.35  that the restriction in item (A) applies and is in addition to 
 45.36  the contribution required by item (A). 
 46.1      (4) The amount of the local contribution must be made out 
 46.2   of unrestricted money of the authority or municipality, such as 
 46.3   the general fund, a property tax levy, or a federal or a state 
 46.4   grant-in-aid which may be spent for general government 
 46.5   purposes.  The local contribution may not be made, directly or 
 46.6   indirectly, with tax increments or developer payments as defined 
 46.7   under section 469.1766.  The local contribution must be used to 
 46.8   pay project costs and cannot be used for general government 
 46.9   purposes or for improvements or costs that the authority or 
 46.10  municipality planned to incur absent the project.  The authority 
 46.11  or municipality may request contributions from other local 
 46.12  government entities that will benefit from the district's 
 46.13  activities.  These contributions reduce the local contribution 
 46.14  required of the municipality or authority by this paragraph.  
 46.15  Cities, counties, towns, and schools may contribute to paying 
 46.16  these costs, notwithstanding any other law to the contrary. 
 46.17     (5) The municipality may make a local contribution in 
 46.18  excess of the required contribution for a year.  If it does so, 
 46.19  the municipality may credit the excess to a local contribution 
 46.20  account for the district.  The balance in the account may be 
 46.21  used to meet the requirements for qualifying local contributions 
 46.22  for later years.  No interest or investment earnings may be 
 46.23  credited or imputed to the account, except those (A) actually 
 46.24  paid by the municipality out of its unrestricted funds or by 
 46.25  another person or entity, other than a developer as used in 
 46.26  section 469.1766, and (B) used as required for a qualifying 
 46.27  local contribution. 
 46.28     (6) If the state contributes to the project costs through a 
 46.29  direct grant or similar incentive, the required local 
 46.30  contribution is reduced by one-half of the dollar amount of the 
 46.31  state grant or other similar incentive. 
 46.32     (e) A heritage and historic subdistrict is exempt. 
 46.33     Sec. 2.  Minnesota Statutes 1996, section 273.1399, is 
 46.34  amended by adding a subdivision to read: 
 46.35     Subd. 9.  [ELECTION TO APPLY LOCAL CONTRIBUTION.] A 
 46.36  district is exempt regardless of the date of its creation if the 
 47.1   municipality files with the county auditor no later than 
 47.2   December 1, 1997, a statement that it elects to make a 
 47.3   qualifying contribution under subdivision 6, paragraph (d), and 
 47.4   annually thereafter makes the required contribution. 
 47.5      Sec. 3.  Minnesota Statutes 1996, section 469.174, 
 47.6   subdivision 4, is amended to read: 
 47.7      Subd. 4.  [CAPTURED NET TAX CAPACITY.] "Captured net tax 
 47.8   capacity" means the amount by which the current net tax capacity 
 47.9   of a tax increment financing district or an extended subdistrict 
 47.10  exceeds the original net tax capacity, including the value of 
 47.11  property normally taxable as personal property by reason of its 
 47.12  location on or over property owned by a tax-exempt entity.  In 
 47.13  the case of a hazardous substance subdistrict, except an 
 47.14  extended subdistrict, "captured net tax capacity" means the 
 47.15  amount, if any, by which the lesser of (1) the original net tax 
 47.16  capacity or (2) the current net tax capacity of the portion of 
 47.17  the tax increment financing district overlying the subdistrict 
 47.18  exceeds the original net tax capacity of the subdistrict. 
 47.19     Sec. 4.  Minnesota Statutes 1996, section 469.174, 
 47.20  subdivision 7, is amended to read: 
 47.21     Subd. 7.  [ORIGINAL NET TAX CAPACITY.] (a) Except as 
 47.22  provided in paragraph (b), "original net tax capacity" means the 
 47.23  tax capacity of all taxable real property within a tax increment 
 47.24  financing district as certified by the commissioner of revenue 
 47.25  for the previous assessment year, provided that the request by 
 47.26  an authority for certification of a new tax increment financing 
 47.27  district or for the expansion of an existing district has been 
 47.28  made to the county auditor by June 30.  The original tax 
 47.29  capacity of districts for which requests are filed after June 30 
 47.30  has an original tax capacity based on the current assessment 
 47.31  year.  In any case, the original tax capacity must be determined 
 47.32  together with subsequent adjustments as set forth in section 
 47.33  469.177, subdivisions 1 and 4.  In determining the original net 
 47.34  tax capacity the net tax capacity of real property exempt from 
 47.35  taxation at the time of the request shall be zero, except for 
 47.36  real property which is tax exempt by reason of public ownership 
 48.1   by the requesting authority and which has been publicly owned 
 48.2   for less than one year prior to the date of the request for 
 48.3   certification, in which event the net tax capacity of the 
 48.4   property shall be the net tax capacity as most recently 
 48.5   determined by the commissioner of revenue.  
 48.6      (b) The original net tax capacity of any designated 
 48.7   hazardous substance site or hazardous substance subdistrict 
 48.8   shall be determined as of the date the authority certifies to 
 48.9   the county auditor that the authority has entered a 
 48.10  redevelopment or other agreement for the removal actions or 
 48.11  remedial actions specified in a development response action 
 48.12  plan, or otherwise provided funds to finance the development 
 48.13  response action plan.  The original net tax capacity equals (i) 
 48.14  the net tax capacity of the parcel or parcels in the site or 
 48.15  hazardous substance subdistrict, as most recently determined by 
 48.16  the commissioner of revenue, less (ii) the estimated costs of 
 48.17  the removal actions and remedial actions as specified in a 
 48.18  development response action plan to be undertaken with respect 
 48.19  to the parcel or parcels, (iii) but not less than zero. 
 48.20     (c) The original net tax capacity of a hazardous substance 
 48.21  site or hazardous substance subdistrict shall be increased by 
 48.22  the amount by which it was reduced pursuant to paragraph (b), 
 48.23  clause (ii), upon certification by the municipality that the 
 48.24  cost of the removal and remedial actions specified in the 
 48.25  development response action plan, except for long-term 
 48.26  monitoring and similar activities, have been paid or reimbursed. 
 48.27     (d) For purposes of this subdivision, "real property" shall 
 48.28  include any property normally taxable as personal property by 
 48.29  reason of its location on or over publicly owned property.  
 48.30     (e) The original net tax capacity of a heritage and 
 48.31  historic subdistrict shall be determined as of the date the 
 48.32  authority requests certification of the subdistrict.  The 
 48.33  original net tax capacity equals (1) the net tax capacity of the 
 48.34  parcel or parcels in the heritage and historic subdistrict, as 
 48.35  most recently determined by the commissioner of revenue, less 
 48.36  (2) the estimated costs as specified in the tax increment 
 49.1   financing plan to be undertaken with respect to the parcel or 
 49.2   parcels, (3) but not less than zero.  
 49.3      (f) The original net tax capacity of a heritage and 
 49.4   historic subdistrict shall be increased by the amount by which 
 49.5   it was reduced pursuant to paragraph (e), clause (2), upon 
 49.6   certification by the municipality that the costs specified in 
 49.7   the tax increment financing plan have been paid or reimbursed. 
 49.8      Sec. 5.  Minnesota Statutes 1996, section 469.174, 
 49.9   subdivision 10, is amended to read: 
 49.10     Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
 49.11  district" means a type of tax increment financing district 
 49.12  consisting of a project, or portions of a project, within which 
 49.13  the authority finds by resolution that one of the following 
 49.14  conditions, reasonably distributed throughout the district, 
 49.15  exists: 
 49.16     (1) parcels consisting of 70 percent of the area of the 
 49.17  district are occupied by buildings, streets, utilities, or other 
 49.18  improvements and more than 50 percent of the buildings, not 
 49.19  including outbuildings, are structurally substandard to a degree 
 49.20  requiring substantial renovation or clearance; or 
 49.21     (2) the property consists of vacant, unused, underused, 
 49.22  inappropriately used, or infrequently used railyards, rail 
 49.23  storage facilities, or excessive or vacated railroad 
 49.24  rights-of-way; or 
 49.25     (3) the presence of hazardous substances, pollution, or 
 49.26  contaminants will require removal or remediation action, and 
 49.27  with respect to each parcel in the proposed district either: 
 49.28     (i) the estimated cost of the proposed removal and 
 49.29  remediation action exceeds the fair market value of the land 
 49.30  before completion of the preparation; or 
 49.31     (ii) the estimated cost of the proposed removal or 
 49.32  remediation action exceeds $2 per square foot for the area of 
 49.33  the parcel. 
 49.34     (b) For purposes of this subdivision, "structurally 
 49.35  substandard" shall mean containing defects in structural 
 49.36  elements or a combination of deficiencies in essential utilities 
 50.1   and facilities, light and ventilation, fire protection including 
 50.2   adequate egress, layout and condition of interior partitions, or 
 50.3   similar factors, which defects or deficiencies are of sufficient 
 50.4   total significance to justify substantial renovation or 
 50.5   clearance.  
 50.6      A building is not structurally substandard if it is in 
 50.7   compliance with the building code applicable to new buildings or 
 50.8   could be modified to satisfy the building code at a cost of less 
 50.9   than 15 percent of the cost of constructing a new structure of 
 50.10  the same square footage and type on the site.  The municipality 
 50.11  may find that a building is not disqualified as structurally 
 50.12  substandard under the preceding sentence on the basis of 
 50.13  reasonably available evidence, such as the size, type, and age 
 50.14  of the building, the average cost of plumbing, electrical, or 
 50.15  structural repairs, or other similar reliable evidence.  If the 
 50.16  evidence supports a reasonable conclusion that the building is 
 50.17  not disqualified as structurally substandard, the municipality 
 50.18  may make such a determination without an interior inspection or 
 50.19  an independent, expert appraisal of the cost of repair and 
 50.20  rehabilitation of the building. 
 50.21     A parcel is deemed to be occupied by a structurally 
 50.22  substandard building for purposes of the finding under paragraph 
 50.23  (a) if all of the following conditions are met: 
 50.24     (1) the parcel was occupied by a substandard building 
 50.25  within three years of the filing of the request for 
 50.26  certification of the parcel as part of the district with the 
 50.27  county auditor; 
 50.28     (2) the substandard building was demolished or removed by 
 50.29  the authority or the demolition or removal was financed by the 
 50.30  authority or was done by a developer under a development 
 50.31  agreement with the authority; 
 50.32     (3) the authority found by resolution before the demolition 
 50.33  or removal that the parcel was occupied by a structurally 
 50.34  substandard building and that after demolition and clearance the 
 50.35  authority intended to include the parcel within a district; and 
 50.36     (4) upon filing the request for certification of the tax 
 51.1   capacity of the parcel as part of a district, the authority 
 51.2   notifies the county auditor that the original tax capacity of 
 51.3   the parcel must be adjusted as provided by section 469.177, 
 51.4   subdivision 1, paragraph (h). 
 51.5      (c) For purposes of this subdivision, a parcel is not 
 51.6   occupied by buildings, streets, utilities, or other improvements 
 51.7   unless 15 percent of the area of the parcel contains 
 51.8   improvements. 
 51.9      (d) For districts consisting of two or more noncontiguous 
 51.10  areas, each area must qualify as a redevelopment district under 
 51.11  paragraph (a) to be included in the district, and the entire 
 51.12  area of the district must satisfy paragraph (a). 
 51.13     (e) The proposed removal or remediation action supporting 
 51.14  the creation of a district under paragraph (a), clause (3), must 
 51.15  be specified in a development action response plan to satisfy 
 51.16  the requirements of paragraph (a), clause (3). 
 51.17     Sec. 6.  Minnesota Statutes 1996, section 469.174, 
 51.18  subdivision 12, is amended to read: 
 51.19     Subd. 12.  [ECONOMIC DEVELOPMENT DISTRICT.] "Economic 
 51.20  development district" means a type of tax increment financing 
 51.21  district which consists of any project, or portions of a 
 51.22  project, not meeting the requirements found in the definition of 
 51.23  redevelopment district, renewal and renovation district, soils 
 51.24  condition district, mined underground space development 
 51.25  district, or housing district, but which the authority finds to 
 51.26  be in the public interest because: 
 51.27     (1) it will discourage commerce, industry, or manufacturing 
 51.28  from moving their operations to another state or municipality; 
 51.29  or 
 51.30     (2) it will result in increased employment in the state; or 
 51.31     (3) it will result in preservation and enhancement of the 
 51.32  tax base of the state. 
 51.33     Sec. 7.  Minnesota Statutes 1996, section 469.174, 
 51.34  subdivision 16, is amended to read: 
 51.35     Subd. 16.  [DESIGNATED HAZARDOUS SUBSTANCE SITE.] 
 51.36  "Designated hazardous substance site" means any parcel or 
 52.1   parcels with respect to which the authority has certified to the 
 52.2   county auditor that the authority has entered into a 
 52.3   redevelopment or other agreement providing for the removal 
 52.4   actions or remedial actions specified in a development response 
 52.5   action plan or the authority will use other available money, 
 52.6   including without limitation tax increments, to finance the 
 52.7   removal or remedial actions.  A parcel described in the plan or 
 52.8   plan amendment may be designated for inclusion in the hazardous 
 52.9   substance subdistrict prior to approval of the development 
 52.10  action response plan on the basis of the reasonable expectation 
 52.11  of the municipality.  Such parcel may not be certified as part 
 52.12  of the hazardous substance subdistrict until the development 
 52.13  action response plan has been approved. 
 52.14     Sec. 8.  Minnesota Statutes 1996, section 469.174, 
 52.15  subdivision 23, is amended to read: 
 52.16     Subd. 23.  [HAZARDOUS SUBSTANCE SUBDISTRICT.] "Hazardous 
 52.17  substance subdistrict" or "subdistrict" means a hazardous 
 52.18  substance subdistrict created under section 469.175, subdivision 
 52.19  7. 
 52.20     Sec. 9.  Minnesota Statutes 1996, section 469.174, 
 52.21  subdivision 24, is amended to read: 
 52.22     Subd. 24.  [EXTENDED SUBDISTRICT.] "Extended subdistrict" 
 52.23  means a hazardous substance subdistrict or a heritage and 
 52.24  historic subdistrict, but only for any period during which the 
 52.25  subdistrict remains in effect after the overlying tax increment 
 52.26  district has terminated. 
 52.27     Sec. 10.  Minnesota Statutes 1996, section 469.174, is 
 52.28  amended by adding a subdivision to read: 
 52.29     Subd. 25.  [HERITAGE AND HISTORIC SUBDISTRICT.] "Heritage 
 52.30  and historic subdistrict" means a heritage and historic 
 52.31  subdistrict created under section 469.175, subdivision 9. 
 52.32     Sec. 11.  Minnesota Statutes 1996, section 469.174, is 
 52.33  amended by adding a subdivision to read: 
 52.34     Subd. 26.  [SUBDISTRICT.] "Subdistrict" means either a 
 52.35  hazardous substance subdistrict or a heritage and historic 
 52.36  subdistrict. 
 53.1      Sec. 12.  Minnesota Statutes 1996, section 469.175, 
 53.2   subdivision 1, is amended to read: 
 53.3      Subdivision 1.  [TAX INCREMENT FINANCING PLAN.] (a) A tax 
 53.4   increment financing plan shall contain:  
 53.5      (1) a statement of objectives of an authority for the 
 53.6   improvement of a project; 
 53.7      (2) a statement as to the development program for the 
 53.8   project, including the property within the project, if any, that 
 53.9   the authority intends to acquire; 
 53.10     (3) a list of any development activities that the plan 
 53.11  proposes to take place within the project, for which contracts 
 53.12  have been entered into at the time of the preparation of the 
 53.13  plan, including the names of the parties to the contract, the 
 53.14  activity governed by the contract, the cost stated in the 
 53.15  contract, and the expected date of completion of that activity; 
 53.16     (4) identification or description of the type of any other 
 53.17  specific development reasonably expected to take place within 
 53.18  the project, and the date when the development is likely to 
 53.19  occur; 
 53.20     (5) estimates of the following:  
 53.21     (i) cost of the project, including administration expenses; 
 53.22     (ii) amount of bonded indebtedness to be incurred; 
 53.23     (iii) sources of revenue to finance or otherwise pay public 
 53.24  costs; 
 53.25     (iv) the most recent net tax capacity of taxable real 
 53.26  property within the tax increment financing district and within 
 53.27  any subdistrict; 
 53.28     (v) the estimated captured net tax capacity of the tax 
 53.29  increment financing district at completion; and 
 53.30     (vi) the duration of the tax increment financing district's 
 53.31  and any subdistrict's existence; 
 53.32     (6) statements of the authority's alternate estimates of 
 53.33  the impact of tax increment financing on the net tax capacities 
 53.34  of all taxing jurisdictions in which the tax increment financing 
 53.35  district is located in whole or in part.  For purposes of one 
 53.36  statement, the authority shall assume that the estimated 
 54.1   captured net tax capacity would be available to the taxing 
 54.2   jurisdictions without creation of the district, and for purposes 
 54.3   of the second statement, the authority shall assume that none of 
 54.4   the estimated captured net tax capacity would be available to 
 54.5   the taxing jurisdictions without creation of the district or 
 54.6   subdistrict; 
 54.7      (7) identification and description of studies and analyses 
 54.8   used to make the determination set forth in subdivision 3, 
 54.9   clause (2); and 
 54.10     (8) identification of all parcels to be included in the 
 54.11  district or any subdistrict. 
 54.12     (b) For a housing district, redevelopment district, or a 
 54.13  hazardous substance subdistrict, the authority may elect in the 
 54.14  tax increment financing plan to provide for the identification 
 54.15  of a minimum market value in the plan, development agreement, or 
 54.16  assessment agreement, and provide that increment is first 
 54.17  received by the authority when (1) the market value of the 
 54.18  improvements as determined by the assessor reaches or exceeds 
 54.19  the minimum market value, or (2) four years has elapsed from the 
 54.20  date of certification of the original net tax capacity of the 
 54.21  taxable real property in the district or subdistrict by the 
 54.22  county auditor, whichever is earlier. 
 54.23     Sec. 13.  Minnesota Statutes 1996, section 469.175, 
 54.24  subdivision 3, is amended to read: 
 54.25     Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
 54.26  not certify the original net tax capacity of a tax increment 
 54.27  financing district until the tax increment financing plan 
 54.28  proposed for that district has been approved by the municipality 
 54.29  in which the district is located.  If an authority that proposes 
 54.30  to establish a tax increment financing district and the 
 54.31  municipality are not the same, the authority shall apply to the 
 54.32  municipality in which the district is proposed to be located and 
 54.33  shall obtain the approval of its tax increment financing plan by 
 54.34  the municipality before the authority may use tax increment 
 54.35  financing.  The municipality shall approve the tax increment 
 54.36  financing plan only after a public hearing thereon after 
 55.1   published notice in a newspaper of general circulation in the 
 55.2   municipality at least once not less than ten days nor more than 
 55.3   30 days prior to the date of the hearing.  The published notice 
 55.4   must include a map of the area of the district from which 
 55.5   increments may be collected and, if the project area includes 
 55.6   additional area, a map of the project area in which the 
 55.7   increments may be expended.  The hearing may be held before or 
 55.8   after the approval or creation of the project or it may be held 
 55.9   in conjunction with a hearing to approve the project.  Before or 
 55.10  at the time of approval of the tax increment financing plan, the 
 55.11  municipality shall make the following findings, and shall set 
 55.12  forth in writing the reasons and supporting facts for each 
 55.13  determination: 
 55.14     (1) that the proposed tax increment financing district is a 
 55.15  redevelopment district, a renewal or renovation district, a 
 55.16  mined underground space development district, a housing 
 55.17  district, a soils condition district, or an economic development 
 55.18  district; if the proposed district is a redevelopment district 
 55.19  or a renewal or renovation district, the reasons and supporting 
 55.20  facts for the determination that the district meets the criteria 
 55.21  of section 469.174, subdivision 10, paragraph (a), clauses (1) 
 55.22  and (2), or subdivision 10a, must be retained and made available 
 55.23  to the public by the authority until the district has been 
 55.24  terminated. 
 55.25     (2) that the proposed development or redevelopment, in the 
 55.26  opinion of the municipality, would not reasonably be expected to 
 55.27  occur solely through private investment within the reasonably 
 55.28  foreseeable future and that the increased market value of the 
 55.29  site that could reasonably be expected to occur without the use 
 55.30  of tax increment financing would be less than the increase in 
 55.31  the market value estimated to result from the proposed 
 55.32  development after subtracting the present value of the projected 
 55.33  tax increments for the maximum duration of the district 
 55.34  permitted by the plan.  The requirements of this clause do not 
 55.35  apply if the district is a qualified housing district, as 
 55.36  defined in section 273.1399, subdivision 1. 
 56.1      (3) that the tax increment financing plan conforms to the 
 56.2   general plan for the development or redevelopment of the 
 56.3   municipality as a whole. 
 56.4      (4) that the tax increment financing plan will afford 
 56.5   maximum opportunity, consistent with the sound needs of the 
 56.6   municipality as a whole, for the development or redevelopment of 
 56.7   the project by private enterprise. 
 56.8      (5) that the municipality elects the method of tax 
 56.9   increment computation set forth in section 469.177, subdivision 
 56.10  3, clause (b), if applicable. 
 56.11     When the municipality and the authority are not the same, 
 56.12  the municipality shall approve or disapprove the tax increment 
 56.13  financing plan within 60 days of submission by the authority, or 
 56.14  the plan shall be deemed approved.  When the municipality and 
 56.15  the authority are not the same, the municipality may not amend 
 56.16  or modify a tax increment financing plan except as proposed by 
 56.17  the authority pursuant to subdivision 4.  Once approved, the 
 56.18  determination of the authority to undertake the project through 
 56.19  the use of tax increment financing and the resolution of the 
 56.20  governing body shall be conclusive of the findings therein and 
 56.21  of the public need for the financing. 
 56.22     Sec. 14.  Minnesota Statutes 1996, section 469.175, 
 56.23  subdivision 7, is amended to read: 
 56.24     Subd. 7.  [CREATION OF HAZARDOUS SUBSTANCE SUBDISTRICT; 
 56.25  RESPONSE ACTIONS.] (a) An authority which is creating or has 
 56.26  created a tax increment financing district may establish within 
 56.27  the district a hazardous substance subdistrict upon the notice 
 56.28  and after the discussion, public hearing, and findings required 
 56.29  for approval of or modification to the original plan.  The 
 56.30  geographic area of the hazardous substance subdistrict is made 
 56.31  up of any parcels in the district designated for inclusion by 
 56.32  the municipality or authority that are designated hazardous 
 56.33  substance sites, and any additional parcels in the district 
 56.34  designated for inclusion that are contiguous to the hazardous 
 56.35  substance sites, including parcels that are contiguous to the 
 56.36  site except for the interposition of a right-of-way.  Before or 
 57.1   at the time of approval of the tax increment financing plan or 
 57.2   plan modification providing for the creation of the hazardous 
 57.3   substance subdistrict, the authority must make the findings 
 57.4   under paragraphs (b) to (d), and set forth in writing the 
 57.5   reasons and supporting facts for each. 
 57.6      (b) Development or redevelopment of the site, in the 
 57.7   opinion of the authority, would not reasonably be expected to 
 57.8   occur solely through private investment and tax increment 
 57.9   otherwise available, and therefore the hazardous substance 
 57.10  district is deemed necessary. 
 57.11     (c) Other parcels that are not designated hazardous 
 57.12  substance sites are expected to be developed together with a 
 57.13  designated hazardous substance site.  
 57.14     (d) The hazardous substance subdistrict is not larger than, 
 57.15  and the period of time during which increments are elected to be 
 57.16  received is not longer than, that which is necessary in the 
 57.17  opinion of the authority to provide for the additional costs due 
 57.18  to the designated hazardous substance site. 
 57.19     (e) Upon request by an authority that has incurred expenses 
 57.20  for removal or remedial actions to implement a development 
 57.21  response action plan, the attorney general may: 
 57.22     (1) bring a civil action on behalf of the authority to 
 57.23  recover the expenses, including administrative costs and 
 57.24  litigation expenses, under section 115B.04 or other law; or 
 57.25     (2) assist the authority in bringing an action as described 
 57.26  in clause (1), by providing legal and technical advice, 
 57.27  intervening in the action, or other appropriate assistance. 
 57.28  The decision to participate in any action to recover expenses is 
 57.29  at the discretion of the attorney general. 
 57.30     (f) If the attorney general brings an action as provided in 
 57.31  paragraph (e), clause (1), the authority shall certify its 
 57.32  reasonable and necessary expenses incurred to implement the 
 57.33  development response action plan and shall cooperate with the 
 57.34  attorney general as required to effectively pursue the action.  
 57.35  The certification by the authority is prima facie evidence that 
 57.36  the expenses are reasonable and necessary.  The attorney general 
 58.1   may deduct litigation expenses incurred by the attorney general 
 58.2   from any amounts recovered in an action brought under paragraph 
 58.3   (e), clause (1).  The authority shall reimburse the attorney 
 58.4   general for litigation expenses not recovered in an action under 
 58.5   paragraph (e), clause (1), but only from the additional tax 
 58.6   increment required to be used as described in section 469.176, 
 58.7   subdivision 4e.  The authority must reimburse the attorney 
 58.8   general for litigation expenses incurred to assist in bringing 
 58.9   an action under paragraph (e), clause (2), but only from amounts 
 58.10  recovered by the authority in an action or, if the amounts are 
 58.11  insufficient, from the additional tax increment required to be 
 58.12  used as described in section 469.176, subdivision 4e.  All money 
 58.13  recovered or paid to the attorney general for litigation 
 58.14  expenses under this paragraph shall be paid to the general fund 
 58.15  of the state for deposit to the account of the attorney 
 58.16  general.  For the purposes of this section, "litigation 
 58.17  expenses" means attorney fees and costs of discovery and other 
 58.18  preparation for litigation. 
 58.19     (g) The authority shall reimburse the pollution control 
 58.20  agency for its administrative expenses incurred to review and 
 58.21  approve a development action response plan.  The authority must 
 58.22  reimburse the pollution control agency for expenses incurred for 
 58.23  any services rendered to the attorney general to support the 
 58.24  attorney general in actions brought or assistance provided under 
 58.25  paragraph (e), but only from amounts recovered by the authority 
 58.26  in an action brought under paragraph (e) or from the additional 
 58.27  tax increment required to be used as described in section 
 58.28  469.176, subdivision 4e.  All money paid to the pollution 
 58.29  control agency under this paragraph shall be deposited in the 
 58.30  environmental response, compensation and compliance fund. 
 58.31     (h) Actions taken by an authority consistent with a 
 58.32  development response action plan are deemed to be authorized 
 58.33  response actions for the purpose of section 115B.17, subdivision 
 58.34  12.  An authority that takes actions consistent with a 
 58.35  development response action plan qualifies for the defenses 
 58.36  available under sections 115B.04, subdivision 11, and 115B.05, 
 59.1   subdivision 9. 
 59.2      (i) All money recovered by an authority in an action 
 59.3   brought under paragraph (e) in excess of the amounts paid to the 
 59.4   attorney general and the pollution control agency must be 
 59.5   treated as excess increments and be distributed as provided in 
 59.6   section 469.176, subdivision 2, clause (4), to the extent the 
 59.7   removal and remedial actions were initially financed with 
 59.8   increment revenues. 
 59.9      Sec. 15.  Minnesota Statutes 1996, section 469.175, is 
 59.10  amended by adding a subdivision to read: 
 59.11     Subd. 9.  [CREATION OF HERITAGE AND HISTORIC 
 59.12  SUBDISTRICT.] (a) An authority which is creating or has created 
 59.13  a tax increment financing district may establish within the 
 59.14  district a heritage and historic subdistrict upon the notice and 
 59.15  after discussion, public hearing, and findings required for 
 59.16  approval of or modification to the original plan.  The 
 59.17  geographic area of the subdistrict shall include only those 
 59.18  parcels in the district which, in whole or in part, either: 
 59.19     (1) are listed in the National Register of Historic Places 
 59.20  maintained by the Department of Interior pursuant to the 
 59.21  National Historic Preservation Act of 1966; 
 59.22     (2) contain a certified historic structure as defined in 
 59.23  section 47(c)(3)(A) of the Internal Revenue Code which has been 
 59.24  certified by the Secretary of the Interior; or 
 59.25     (3) are located in a certified local district as designated 
 59.26  by either a certified local government or a historic 
 59.27  preservation commission pursuant to the National Historic 
 59.28  Preservation Act of 1966 and whose designation is also approved 
 59.29  by the state historic preservation officer. 
 59.30     Before or at the time of approval of the tax increment 
 59.31  financing plan or plan modification providing for the creation 
 59.32  of the heritage and historic subdistrict, the authority must 
 59.33  make the findings under paragraphs (b) and (c), and set forth in 
 59.34  writing the reasons and supporting facts for each. 
 59.35     (b) Development or redevelopment of the heritage and 
 59.36  historic subdistrict, in the opinion of the authority, would not 
 60.1   reasonably be expected to occur solely through private 
 60.2   investment and tax increment otherwise available, and therefore 
 60.3   the heritage and historic subdistrict is deemed necessary. 
 60.4      (c) The heritage and historic subdistrict is not larger 
 60.5   than, and the period of time during which increments are elected 
 60.6   to be received is not longer than, that which is necessary in 
 60.7   the opinion of the authority to provide for the additional costs 
 60.8   due to the designated heritage and historic subdistrict. 
 60.9      (d) Each parcel in a heritage and historic subdistrict must 
 60.10  comply with the requirements of paragraph (a) for the duration 
 60.11  of the heritage and historic subdistrict. 
 60.12     Sec. 16.  Minnesota Statutes 1996, section 469.176, 
 60.13  subdivision 1b, is amended to read: 
 60.14     Subd. 1b.  [DURATION LIMITS; TERMS.] (a) No tax increment 
 60.15  shall in any event be paid to the authority 
 60.16     (1) after 25 years from date of receipt by the authority of 
 60.17  the first tax increment for a mined underground space 
 60.18  development district, 
 60.19     (2) after 15 years after receipt by the authority of the 
 60.20  first increment for a renewal and renovation district, 
 60.21     (3) after 12 years from approval of the tax increment 
 60.22  financing plan for a soils condition district, 
 60.23     (4) after nine years from the date of the receipt, or 11 
 60.24  years from approval of the tax increment financing plan, 
 60.25  whichever is less, for an economic development district, 
 60.26     (5) (4) for a housing district or a redevelopment district, 
 60.27  after 20 years from the date of receipt by the authority of the 
 60.28  first tax increment by the authority pursuant to section 
 60.29  469.175, subdivision 1, paragraph (b); or, if no provision is 
 60.30  made under section 469.175, subdivision 1, paragraph (b), after 
 60.31  25 years from the date of receipt by the authority of the first 
 60.32  increment. 
 60.33     (b) For purposes of determining a duration limit under this 
 60.34  subdivision or subdivision 1e that is based on the receipt of an 
 60.35  increment, any increments from taxes payable in the year in 
 60.36  which the district terminates shall be paid to the authority.  
 61.1   This paragraph does not affect a duration limit calculated from 
 61.2   the date of approval of the tax increment financing plan or 
 61.3   based on the recovery of costs or to a duration limit under 
 61.4   subdivision 1c.  This paragraph does not supersede the 
 61.5   restrictions on payment of delinquent taxes in subdivision 
 61.6   1f.  For purposes of determining a durational limit under this 
 61.7   subdivision that is based on first receipt of tax increment, any 
 61.8   increment received based on the captured net tax capacity of a 
 61.9   hazardous substance subdistrict shall be disregarded. 
 61.10     Sec. 17.  Minnesota Statutes 1996, section 469.176, 
 61.11  subdivision 1e, is amended to read: 
 61.12     Subd. 1e.  [DURATION LIMITS; HAZARDOUS SUBSTANCE 
 61.13  SUBDISTRICTS.] If a parcel of a district is part of a designated 
 61.14  hazardous substance site or a hazardous substance subdistrict, 
 61.15  tax increment may be paid to the authority from the parcel for 
 61.16  longer than the period otherwise provided by subdivisions 1 to 
 61.17  1f for the overlying district.  The extended period for 
 61.18  collection of tax increment begins on the date of receipt of the 
 61.19  first tax increment from the parcel that is received after the 
 61.20  date of certification to the county auditor described in section 
 61.21  469.174, subdivision 7, paragraph (b), and is either the first 
 61.22  tax increment received from the parcel or more than any tax 
 61.23  increment received from the parcel before the date of the 
 61.24  certification under section 469.174, subdivision 7, paragraph 
 61.25  (b), and received after the date of certification to the county 
 61.26  auditor described in section 469.174, subdivision 7, paragraph 
 61.27  (b).  The extended period for collection of tax increment is the 
 61.28  lesser of:  (1) 25 years from the date of commencement of the 
 61.29  extended period or 20 years if the authority elects under 
 61.30  section 469.175, subdivision 1, paragraph (b), to defer receipt 
 61.31  of the first increment; or (2) the period necessary to recover 
 61.32  the costs of removal actions or remedial actions specified in a 
 61.33  development response action plan. 
 61.34     Sec. 18.  Minnesota Statutes 1996, section 469.176, 
 61.35  subdivision 4c, is amended to read: 
 61.36     Subd. 4c.  [ECONOMIC DEVELOPMENT DISTRICTS.] (a) Revenue 
 62.1   derived from tax increment from an economic development district 
 62.2   may not be used to provide improvements, loans, subsidies, 
 62.3   grants, interest rate subsidies, or assistance in any form to 
 62.4   developments consisting of buildings and ancillary facilities, 
 62.5   if more than 15 percent of the buildings and facilities 
 62.6   (determined on the basis of square footage) are used for a 
 62.7   purpose other than:  
 62.8      (1) the manufacturing or production of tangible personal 
 62.9   property, including processing resulting in the change in 
 62.10  condition of the property; 
 62.11     (2) warehousing, storage, and distribution of tangible 
 62.12  personal property, excluding retail sales; 
 62.13     (3) research and development related to the activities 
 62.14  listed in clause (1) or (2); 
 62.15     (4) telemarketing if that activity is the exclusive use of 
 62.16  the property; 
 62.17     (5) tourism facilities; or 
 62.18     (6) space necessary for and related to the activities 
 62.19  listed in clauses (1) to (5).  
 62.20     (b) Notwithstanding the provisions of this subdivision, 
 62.21  revenue derived from tax increment from an economic development 
 62.22  district may be used to pay for site preparation and public 
 62.23  improvements, if the following conditions are met: 
 62.24     (1) bedrock soils conditions are present in 80 percent or 
 62.25  more of the acreage of the district; 
 62.26     (2) the estimated cost of physical preparation of the site 
 62.27  exceeds the fair market value of the land before completion of 
 62.28  the preparation; and 
 62.29     (3) revenues from tax increments are expended only for the 
 62.30  additional costs of preparing the site because of unstable soils 
 62.31  and the bedrock soils condition, the additional cost of 
 62.32  installing public improvements because of unstable soils or the 
 62.33  bedrock soils condition, and reasonable administrative costs. 
 62.34     (c) Notwithstanding the provisions of this subdivision, 
 62.35  revenues derived from tax increment from an economic development 
 62.36  district may be used to provide improvements, loans, subsidies, 
 63.1   grants, interest rate subsidies, or assistance in any form for 
 63.2   up to 5,000 square feet of any separately owned commercial 
 63.3   facility located within the municipal jurisdiction of a home 
 63.4   rule charter or statutory city that has a population of 5,000 or 
 63.5   less and that is located ten miles or more from a city that has 
 63.6   a population of 10,000 or more. 
 63.7      Sec. 19.  Minnesota Statutes 1996, section 469.176, 
 63.8   subdivision 4e, is amended to read: 
 63.9      Subd. 4e.  [HAZARDOUS SUBSTANCE SUBDISTRICTS.] The 
 63.10  additional tax increment received by the municipality from a 
 63.11  hazardous substance subdistrict as a result of a reduction in 
 63.12  original net tax capacity pursuant to section 469.174, 
 63.13  subdivision 7, paragraph (b), or as a result of the extension of 
 63.14  the period for collection of tax increment from a hazardous 
 63.15  substance site or hazardous substance subdistrict provided for 
 63.16  in subdivision 1, paragraph (g), may be used only to pay or 
 63.17  reimburse the costs of:  (1) removal actions or remedial actions 
 63.18  with respect to hazardous substances or pollutants or 
 63.19  contaminants or petroleum releases affecting or which may affect 
 63.20  the designated hazardous substance site; (2) pollution testing, 
 63.21  demolition, and soil compaction correction necessitated by the 
 63.22  development response action plan for the designated hazardous 
 63.23  substance site; (3) purchase of environmental insurance or 
 63.24  deposits to a guaranty fund, relating only to liability or 
 63.25  response costs for land in the hazardous substance subdistrict; 
 63.26  and (4) related administrative and legal costs, including costs 
 63.27  of review and approval of development response action plans by 
 63.28  the pollution control agency and litigation expenses of the 
 63.29  attorney general. 
 63.30     Sec. 20.  Minnesota Statutes 1996, section 469.176, 
 63.31  subdivision 4j, is amended to read: 
 63.32     Subd. 4j.  [REDEVELOPMENT DISTRICTS.] At least 90 percent 
 63.33  of the revenues derived from tax increments from a redevelopment 
 63.34  district or renewal and renovation district must be used to 
 63.35  finance the cost of correcting conditions that allow designation 
 63.36  of redevelopment and renewal and renovation districts under 
 64.1   section 469.174.  These costs include, but are not limited to, 
 64.2   acquiring properties containing structurally substandard 
 64.3   buildings or improvements or hazardous substances, pollution, or 
 64.4   contaminants, acquiring adjacent parcels necessary to provide a 
 64.5   site of sufficient size to permit development, demolition and 
 64.6   rehabilitation of structures, clearing of the land, the removal 
 64.7   of hazardous substances or remediation necessary to development 
 64.8   of the land, and installation of utilities, roads, sidewalks, 
 64.9   and parking facilities for the site.  The allocated 
 64.10  administrative expenses of the authority, including the cost of 
 64.11  preparation of the development action response plan, may be 
 64.12  included in the qualifying costs. 
 64.13     Sec. 21.  Minnesota Statutes 1996, section 469.176, is 
 64.14  amended by adding a subdivision to read: 
 64.15     Subd. 4k.  [HERITAGE AND HISTORIC SUBDISTRICTS.] The tax 
 64.16  increment received by the municipality from a heritage and 
 64.17  historic subdistrict may be used only to pay or reimburse the 
 64.18  costs of activities within the subdistrict that are: 
 64.19     (1) described in subdivision 4e; 
 64.20     (2) described in subdivision 4j; or 
 64.21     (3) capital expenditures of a type that would be eligible 
 64.22  for a rehabilitation credit, as defined in section 47 of the 
 64.23  Internal Revenue Code, regardless of whether the project is 
 64.24  eligible for a credit or a credit is actually utilized.  If a 
 64.25  credit is not applied for, the municipality shall review the 
 64.26  eligible capital expenditures and determine whether they meet 
 64.27  the requirements applicable under section 47 of the Internal 
 64.28  Revenue Code.  In making this determination, the municipality 
 64.29  shall consult with any applicable historic preservation 
 64.30  commission and the determination shall be approved by the state 
 64.31  historic preservation officer.  The tax increment financing plan 
 64.32  shall identify those section 47 eligible expenditures which may 
 64.33  be paid from tax increments. 
 64.34     Sec. 22.  Minnesota Statutes 1996, section 469.176, 
 64.35  subdivision 5, is amended to read: 
 64.36     Subd. 5.  [REQUIREMENT FOR AGREEMENTS.] No more than 25 
 65.1   percent, by acreage, of the property to be acquired within a 
 65.2   project which contains a redevelopment district, or ten percent, 
 65.3   by acreage, of the property to be acquired within a project 
 65.4   which contains a housing or economic development district, as 
 65.5   set forth in the tax increment financing plan, shall at any time 
 65.6   be owned by an authority as a result of acquisition with the 
 65.7   proceeds of bonds issued pursuant to section 469.178 to which 
 65.8   tax increment from the property acquired is pledged unless prior 
 65.9   to acquisition in excess of the percentages, the authority has 
 65.10  concluded an agreement for the development or redevelopment of 
 65.11  the property acquired and which provides recourse for the 
 65.12  authority should the development or redevelopment not be 
 65.13  completed.  This subdivision does not apply to a parcel of a 
 65.14  district that is a designated hazardous substance site 
 65.15  established under section 469.174, subdivision 16, or part of a 
 65.16  hazardous substance subdistrict established under section 
 65.17  469.175, subdivision 7, or part of a heritage and historic 
 65.18  subdistrict established under section 469.175, subdivision 9.  
 65.19     Sec. 23.  [469.1764] [EXPENDITURES ON ACTIVITIES WITHIN TAX 
 65.20  INCREMENT DISTRICT.] 
 65.21     For purposes of sections 469.174 to 469.179, with respect 
 65.22  to any project for which certification of a tax increment 
 65.23  district was requested prior to August 1, 1979, any expenditure 
 65.24  made to finance a treatment works facility, water tower, or 
 65.25  other waterworks facility, an electric generation facility, or 
 65.26  any other public utility facility located outside of a tax 
 65.27  increment district and reasonably allocated to users within a 
 65.28  tax increment district or project for which certification was 
 65.29  requested prior to August 1, 1979, shall be deemed to have been 
 65.30  expended on activities in the tax increment district or project 
 65.31  area. 
 65.32     Sec. 24.  Minnesota Statutes 1996, section 469.1765, 
 65.33  subdivision 2, is amended to read: 
 65.34     Subd. 2.  [ELIGIBLE PERSON.] The authority may agree to 
 65.35  pledge money in the guaranty fund to indemnify a person whose 
 65.36  liability arises out of use, ownership, occupancy, or financing 
 66.1   of a property in the hazardous substance subdistrict or district.
 66.2      Sec. 25.  Minnesota Statutes 1996, section 469.1765, 
 66.3   subdivision 3, is amended to read: 
 66.4      Subd. 3.  [TERMS OF INDEMNITY.] The authority shall 
 66.5   determine by resolution or by agreement with the person the 
 66.6   terms and conditions under which money in the guaranty fund will 
 66.7   be used to indemnify or hold harmless the person.  The authority 
 66.8   may not agree to indemnify a person from liability for 
 66.9   contamination caused by the person.  The maximum amount that may 
 66.10  be paid from the guaranty fund with respect to properties within 
 66.11  a hazardous substance subdistrict or district is one-half of the 
 66.12  remediation and removal costs.  The maximum duration of an 
 66.13  indemnification agreement is 25 years.  An indemnification 
 66.14  agreement is subject to any other restrictions provided by this 
 66.15  section or other law. 
 66.16     Sec. 26.  Minnesota Statutes 1996, section 469.1765, 
 66.17  subdivision 4, is amended to read: 
 66.18     Subd. 4.  [FUNDING.] (a) Revenues derived from tax 
 66.19  increments and any other money available to the authority may be 
 66.20  deposited in the guaranty fund.  The municipality may 
 66.21  appropriate money to the authority to be deposited in the 
 66.22  guaranty fund. 
 66.23     (b) If a guaranty fund is established that applies to 
 66.24  property located in more than one tax increment financing 
 66.25  district or hazardous substance subdistrict, the authority shall 
 66.26  establish separate accounts for each hazardous substance 
 66.27  subdistrict and district.  The authority shall deposit all 
 66.28  revenues derived from tax increments from a hazardous substance 
 66.29  subdistrict or district in the account for that hazardous 
 66.30  substance subdistrict or district, except the following amounts 
 66.31  may be deposited in a general or other account:  (1) the portion 
 66.32  of revenue derived increments from a district, subject to 
 66.33  section 469.1763, that may be spent on activities outside of the 
 66.34  district, or (2) up to 25 percent of the revenues derived from 
 66.35  increments from districts that are not subject to section 
 66.36  469.1763 and which may be deposited in the guaranty fund under 
 67.1   the applicable tax increment financing plans.  Investment 
 67.2   earnings of money in an account must be credited to that account.
 67.3      (c) The only money which may be pledged to indemnify or 
 67.4   hold harmless a person from liability are amounts either in the 
 67.5   account for the hazardous substance subdistrict or district in 
 67.6   which the property out of which the liability arose is located 
 67.7   or in an account not dedicated to a specific hazardous substance 
 67.8   subdistrict or district. 
 67.9      Sec. 27.  Minnesota Statutes 1996, section 469.1765, 
 67.10  subdivision 7, is amended to read: 
 67.11     Subd. 7.  [FINAL DISPOSITION OF FUNDS.] At the end of the 
 67.12  period of the indemnification, all unencumbered money in the 
 67.13  guaranty fund for the hazardous substance subdistrict or 
 67.14  district must be treated as an excess increment and distributed 
 67.15  under the provisions of section 469.176, subdivision 2, 
 67.16  paragraph (a), clause (4).  If the municipality contributed 
 67.17  money to the account, other than revenues derived from 
 67.18  increments, the authority may deduct and pay to the municipality 
 67.19  a proportionate share of the unencumbered money in the account 
 67.20  before the money is distributed as an excess increment.  The 
 67.21  proportionate share is determined based on the amount of 
 67.22  contributions of nonincrements to the account relative to total 
 67.23  contributions, including increments, to the account. 
 67.24     Sec. 28.  Minnesota Statutes 1996, section 469.177, 
 67.25  subdivision 3, is amended to read: 
 67.26     Subd. 3.  [TAX INCREMENT, RELATIONSHIP TO CHAPTERS 276A AND 
 67.27  473F.] (a) Unless the governing body elects pursuant to clause 
 67.28  (b) the following method of computation shall apply to a 
 67.29  district other than an economic development district for which 
 67.30  the request for certification was made after June 30, 1997: 
 67.31     (1) The original net tax capacity and the current net tax 
 67.32  capacity shall be determined before the application of the 
 67.33  fiscal disparity provisions of chapter 276A or 473F.  Where the 
 67.34  original net tax capacity is equal to or greater than the 
 67.35  current net tax capacity, there is no captured net tax capacity 
 67.36  and no tax increment determination.  Where the original net tax 
 68.1   capacity is less than the current net tax capacity, the 
 68.2   difference between the original net tax capacity and the current 
 68.3   net tax capacity is the captured net tax capacity.  This amount 
 68.4   less any portion thereof which the authority has designated, in 
 68.5   its tax increment financing plan, to share with the local taxing 
 68.6   districts is the retained captured net tax capacity of the 
 68.7   authority.  
 68.8      (2) The county auditor shall exclude the retained captured 
 68.9   net tax capacity of the authority from the net tax capacity of 
 68.10  the local taxing districts in determining local taxing district 
 68.11  tax rates.  The local tax rates so determined are to be extended 
 68.12  against the retained captured net tax capacity of the authority 
 68.13  as well as the net tax capacity of the local taxing districts.  
 68.14  The tax generated by the extension of the lesser of (A) the 
 68.15  local taxing district tax rates or (B) the original local tax 
 68.16  rate to the retained captured net tax capacity of the authority 
 68.17  is the tax increment of the authority.  
 68.18     (b) The following method of computation applies to any 
 68.19  economic development district for which the request for 
 68.20  certification was made after June 30, 1997, and to any other 
 68.21  district for which the governing body may, by resolution 
 68.22  approving the tax increment financing plan pursuant to section 
 68.23  469.175, subdivision 3, elect the following method of 
 68.24  computation elects: 
 68.25     (1) The original net tax capacity shall be determined 
 68.26  before the application of the fiscal disparity provisions of 
 68.27  chapter 276A or 473F.  The current net tax capacity shall 
 68.28  exclude any fiscal disparity commercial-industrial net tax 
 68.29  capacity increase between the original year and the current year 
 68.30  multiplied by the fiscal disparity ratio determined pursuant to 
 68.31  section 276A.06, subdivision 7, or 473F.08, subdivision 6.  
 68.32  Where the original net tax capacity is equal to or greater than 
 68.33  the current net tax capacity, there is no captured net tax 
 68.34  capacity and no tax increment determination.  Where the original 
 68.35  net tax capacity is less than the current net tax capacity, the 
 68.36  difference between the original net tax capacity and the current 
 69.1   net tax capacity is the captured net tax capacity.  This amount 
 69.2   less any portion thereof which the authority has designated, in 
 69.3   its tax increment financing plan, to share with the local taxing 
 69.4   districts is the retained captured net tax capacity of the 
 69.5   authority.  
 69.6      (2) The county auditor shall exclude the retained captured 
 69.7   net tax capacity of the authority from the net tax capacity of 
 69.8   the local taxing districts in determining local taxing district 
 69.9   tax rates.  The local tax rates so determined are to be extended 
 69.10  against the retained captured net tax capacity of the authority 
 69.11  as well as the net tax capacity of the local taxing districts.  
 69.12  The tax generated by the extension of the lesser of (A) the 
 69.13  local taxing district tax rates or (B) the original local tax 
 69.14  rate to the retained captured net tax capacity of the authority 
 69.15  is the tax increment of the authority.  
 69.16     (3) An election by the governing body pursuant to paragraph 
 69.17  (b) shall be submitted to the county auditor by the authority at 
 69.18  the time of the request for certification pursuant to 
 69.19  subdivision 1. 
 69.20     (c) The method of computation of tax increment applied to a 
 69.21  district pursuant to paragraph (a) or (b) shall remain the same 
 69.22  for the duration of the district, except that the governing body 
 69.23  may elect to change its election from the method of computation 
 69.24  in paragraph (a) to the method in paragraph (b). 
 69.25     Sec. 29.  Laws 1995, chapter 264, article 5, section 44, 
 69.26  subdivision 4, as amended by Laws 1996, chapter 471, article 7, 
 69.27  section 21, is amended to read: 
 69.28     Subd. 4.  [AUTHORITY.] For housing replacement projects in 
 69.29  the city of Crystal, "authority" means the Crystal economic 
 69.30  development authority.  For housing replacement projects in the 
 69.31  city of Fridley, "authority" means the housing and redevelopment 
 69.32  authority in and for the city of Fridley or a successor in 
 69.33  interest.  For housing replacement projects in the city of 
 69.34  Minneapolis, "authority" means the Minneapolis community 
 69.35  development agency.  For housing replacement projects in the 
 69.36  city of St. Paul, "authority" means the St. Paul housing and 
 70.1   redevelopment authority.  For housing replacement projects in 
 70.2   the city of Duluth, "authority" means the Duluth economic 
 70.3   development authority.  For housing replacement projects in the 
 70.4   city of Richfield, "authority" is the authority as defined in 
 70.5   Minnesota Statutes, section 469.174, subdivision 2, that is 
 70.6   designated by the governing body of the city of Richfield.  For 
 70.7   housing replacement projects in the city of Columbia Heights, 
 70.8   "authority" is the authority as defined in Minnesota Statutes, 
 70.9   section 469.174, subdivision 2, that is designated by the 
 70.10  governing body of the city of Columbia Heights. 
 70.11     Sec. 30.  Laws 1995, chapter 264, article 5, section 45, 
 70.12  subdivision 1, as amended by Laws 1996, chapter 471, article 7, 
 70.13  section 22, is amended to read: 
 70.14     Subdivision 1.  [CREATION OF PROJECTS.] (a) An authority 
 70.15  may create a housing replacement project under sections 44 to 
 70.16  47, as provided in this section. 
 70.17     (b) For the cities of Crystal, Fridley, and Richfield, and 
 70.18  Columbia Heights, the authority may designate up to 50 parcels 
 70.19  in the city to be included in a housing replacement district.  
 70.20  No more than ten parcels may be included in year one of the 
 70.21  district, with up to ten additional parcels added to the 
 70.22  district in each of the following nine years.  For the cities of 
 70.23  Minneapolis, St. Paul, and Duluth, each authority may designate 
 70.24  up to 100 parcels in the city to be included in a housing 
 70.25  replacement district over the life of the district.  The only 
 70.26  parcels that may be included in a district are (1) vacant sites, 
 70.27  (2) parcels containing vacant houses, or (3) parcels containing 
 70.28  houses that are structurally substandard, as defined in 
 70.29  Minnesota Statutes, section 469.174, subdivision 10.  
 70.30     (c) The city in which the authority is located must pay at 
 70.31  least 25 percent of the housing replacement project costs from 
 70.32  its general fund, a property tax levy, or other unrestricted 
 70.33  money, not including tax increments. 
 70.34     (d) The housing replacement district plan must have as its 
 70.35  sole object the acquisition of parcels for the purpose of 
 70.36  preparing the site to be sold for market rate housing.  As used 
 71.1   in this section, "market rate housing" means housing that has a 
 71.2   market value that does not exceed 150 percent of the average 
 71.3   market value of single-family housing in that municipality. 
 71.4      Sec. 31.  [CITY OF BROOKLYN CENTER; USE OF TAX INCREMENT 
 71.5   FINANCING.] 
 71.6      Subdivision 1.  [APPLICATION OF TIME LIMIT.] For tax 
 71.7   increment financing district number 3, established on December 
 71.8   19, 1994, by Brooklyn Center Resolution No. 94-273, Minnesota 
 71.9   Statutes, section 469.1763, subdivision 3, applies to the 
 71.10  district by permitting a period of ten years for commencement of 
 71.11  activities within the district. 
 71.12     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
 71.13  approval by the governing body of the city of Brooklyn Center 
 71.14  and compliance with Minnesota Statutes, section 645.021, 
 71.15  subdivision 3. 
 71.16     Sec. 32.  [CITY OF BUFFALO LAKE; TAX INCREMENT FINANCING 
 71.17  DISTRICT.] 
 71.18     Subdivision 1.  [EXTENSION OF TIME FOR 
 71.19  CERTIFICATION.] Notwithstanding the provisions of Minnesota 
 71.20  Statutes, section 273.1399, subdivision 6, paragraph (b), clause 
 71.21  (2), tax increment financing district 1-1 in the city of Buffalo 
 71.22  Lake is an exempt district under Minnesota Statutes, section 
 71.23  273.1399, paragraph (b), if the facility is certified by the 
 71.24  commissioner of agriculture by December 31, 1998. 
 71.25     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
 71.26  approval by the governing body of the city of Buffalo Lake and 
 71.27  compliance with Minnesota Statutes, section 645.021, subdivision 
 71.28  3. 
 71.29     Sec. 33.  [CITY OF FOLEY; TAX INCREMENT FINANCING 
 71.30  EXPENDITURES.] 
 71.31     Subdivision 1.  [AUTHORIZATION.] Notwithstanding any law to 
 71.32  the contrary, expenditures by the city of Foley before January 
 71.33  1, 1998, of revenue derived from tax increment financing 
 71.34  district number 1 to finance a wastewater treatment facility 
 71.35  located outside of the district are authorized expenditures of 
 71.36  that revenue.  
 72.1      Subd. 2.  [EFFECTIVE DATE; APPLICABILITY.] Pursuant to 
 72.2   Minnesota Statutes, section 645.023, subdivision 1, paragraph 
 72.3   (a), this section is effective without local approval the day 
 72.4   following final enactment and, subject to the limitation in 
 72.5   subdivision 1, applies to revenues expended before and after the 
 72.6   effective date. 
 72.7      Sec. 34.  [CITY OF GAYLORD; TIF DISTRICT EXTENSION AND 
 72.8   EXPANSION.] 
 72.9      Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
 72.10  provisions of Minnesota Statutes, section 469.176, subdivision 
 72.11  1c, the city of Gaylord may, by resolution, extend the duration 
 72.12  of a tax increment financing district originally certified in 
 72.13  1978.  The city may not extend the duration beyond December 31, 
 72.14  2018. 
 72.15     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
 72.16  approval by the governing body of the city of Gaylord and 
 72.17  compliance with the requirements of Minnesota Statutes, sections 
 72.18  469.1782 and 645.021, subdivision 3. 
 72.19     Sec. 35.  [CITY OF MINNETONKA; HOUSING DEVELOPMENT 
 72.20  ACCOUNT.] 
 72.21     Subdivision 1.  [DEPOSITS IN ACCOUNT.] The Minnetonka 
 72.22  economic development authority may deposit the balance of 
 72.23  revenues derived from tax increment from housing tax increment 
 72.24  financing district No. 1 in the housing development account of 
 72.25  the authority.  These increments may be expended for housing 
 72.26  activities in accordance with the tax increment financing plan, 
 72.27  if before depositing the increments or making any expenditures 
 72.28  for housing activities under this section, the authority and 
 72.29  city: 
 72.30     (1) elect, by resolution, to decertify housing tax 
 72.31  increment financing district No. 1 as of December 31, 1997; and 
 72.32     (2) identify in the plan the housing activities that will 
 72.33  be assisted by the housing development account.  
 72.34     The election to decertify and any necessary plan amendment 
 72.35  may be approved before or after the effective date of this 
 72.36  section. 
 73.1      Subd. 2.  [PERMITTED HOUSING ACTIVITIES.] For the purposes 
 73.2   of this section, housing activities:  
 73.3      (1) may include rehabilitation, acquisition, demolition, 
 73.4   and financing of new or existing single family or multifamily 
 73.5   housing and public improvements directly related to such 
 73.6   activities, together with other related activities specified in 
 73.7   the housing action plan approved by the city or the authority in 
 73.8   compliance with Minnesota Statutes, sections 473.25 to 473.254; 
 73.9      (2) may be located anywhere within the city without regard 
 73.10  to the boundaries of any tax increment financing district or 
 73.11  project area; and 
 73.12     (3) for rental and owner-occupied housing, must meet the 
 73.13  income, rent, or sales price limitations established from time 
 73.14  to time by the metropolitan council under Minnesota Statutes, 
 73.15  sections 473.25 to 473.254. 
 73.16     Subd. 3.  [SEPARATE ACCOUNT REQUIRED.] Tax increment to be 
 73.17  expended for housing activities under this section must be 
 73.18  segregated by the authority into a special housing development 
 73.19  account on its official books and records.  The account may also 
 73.20  receive funds from other public and private sources. 
 73.21     Subd. 4.  [EFFECTIVE DATE.] This section is effective upon 
 73.22  approval by the governing body of the city of Minnetonka and 
 73.23  compliance with Minnesota Statutes, section 645.021, subdivision 
 73.24  3. 
 73.25     Sec. 36.  [CITY OF MINNEAPOLIS; HOUSING TRANSITION 
 73.26  DISTRICT; DEFINITIONS.] 
 73.27     Subdivision 1.  [APPLICABILITY.] As used in sections 36 to 
 73.28  39, the terms defined in this section have the meanings given 
 73.29  them.  
 73.30     Subd. 2.  [AUTHORITY.] "Authority" or "authorities" means 
 73.31  the Minneapolis public housing authority and the Minneapolis 
 73.32  community development agency if and to the extent that the 
 73.33  governing body has delegated to either the powers and duties 
 73.34  related to the housing transition district under section 37, 
 73.35  subdivision 4, paragraph (b). 
 73.36     Subd. 3.  [CAPTURED NET TAX CAPACITY.] "Captured net tax 
 74.1   capacity" means the amount by which the current net tax capacity 
 74.2   of the housing transition district exceeds the original net tax 
 74.3   capacity, including the value of property normally taxable as 
 74.4   personal property by reason of its location on or over property 
 74.5   owned by a tax exempt entity. 
 74.6      Subd. 4.  [CITY.] "City" means the city of Minneapolis. 
 74.7      Subd. 5.  [CONSENT DECREE.] "Consent decree" means the 
 74.8   order of the United States District Court issued in connection 
 74.9   with Hollman et. al. vs. Cisneros et. al., United States 
 74.10  District Court, Civil Case 4-92-712, as may be amended from time 
 74.11  to time. 
 74.12     Subd. 6.  [COUNTY AUDITOR.] "County auditor" means the 
 74.13  county auditor of Hennepin county. 
 74.14     Subd. 7.  [GOVERNING BODY.] "Governing body" means the city 
 74.15  council of the city. 
 74.16     Subd. 8.  [HOUSING TRANSITION DISTRICT; DISTRICT.] "Housing 
 74.17  transition district" or "district" means a geographic area 
 74.18  within the city designated by the governing body containing or 
 74.19  which contained public housing structures scheduled for 
 74.20  demolition or demolished in accordance with the terms of the 
 74.21  consent decree. 
 74.22     Subd. 9.  [NONTAXABLE PARCEL.] "Nontaxable parcel" means a 
 74.23  parcel to be included within the housing transition district 
 74.24  which at the time of certification is not subject to property 
 74.25  taxation by reason of public ownership. 
 74.26     Subd. 10.  [ORIGINAL NET TAX CAPACITY.] (a) With respect to 
 74.27  nontaxable parcels within the district, "original net tax 
 74.28  capacity" means zero. 
 74.29     (b) With respect to taxable parcels within the district, 
 74.30  "original net tax capacity" means the net tax capacity of the 
 74.31  parcels as certified by the commissioner of revenue for the 
 74.32  appropriate assessment year.  When a taxable parcel has been 
 74.33  assigned an original net tax capacity by the county auditor 
 74.34  pursuant to this paragraph, and a structure upon the parcel is 
 74.35  later demolished, the original net tax capacity of the parcel 
 74.36  must be reduced to the net tax capacity of the land only as 
 75.1   certified by the commissioner of revenue for the appropriate 
 75.2   assessment year.  For purposes of this subdivision, the 
 75.3   appropriate assessment year is the previous assessment year if a 
 75.4   request by the authority for certification has been made to the 
 75.5   county auditor by June 30.  If the request for certification is 
 75.6   filed after June 30, the appropriate assessment year is the 
 75.7   current assessment year. 
 75.8      Subd. 11.  [PARCEL.] "Parcel" means a tract or plat of land 
 75.9   established prior to the certification of the district as a 
 75.10  single unit for purposes of assessment. 
 75.11     Subd. 12.  [PREEXISTING DISTRICT.] "Preexisting district" 
 75.12  means any tax increment district within which is located a 
 75.13  parcel proposed to be included within the housing transition 
 75.14  district. 
 75.15     Subd. 13.  [TAXABLE PARCEL.] "Taxable parcel" means a 
 75.16  parcel to be included within the housing transition district 
 75.17  which is subject to property taxation at the time of 
 75.18  certification. 
 75.19     Sec. 37.  [ESTABLISHMENT OF HOUSING TRANSITION DISTRICT.] 
 75.20     Subdivision 1.  [CREATION.] The governing body may 
 75.21  establish a housing transition district within the city.  The 
 75.22  parcels included within the district need not be contiguous but 
 75.23  must all be designated and included at the time the district is 
 75.24  initially established.  Parcels must not be added to the 
 75.25  district after its initial certification. 
 75.26     Subd. 2.  [TAX INCREMENT.] (a) Upon request of the 
 75.27  authority, the county auditor shall certify the original net tax 
 75.28  capacity of the district and shall certify in each year 
 75.29  thereafter the amount by which the original net tax capacity 
 75.30  increases as a result of the conditions described in Minnesota 
 75.31  Statutes, section 469.177, subdivision 4, or decreases as a 
 75.32  result of the conditions described in Minnesota Statutes, 
 75.33  section 469.177, subdivision 1, paragraph (g), or section 36, 
 75.34  subdivision 10, paragraph (b).  No other changes shall be made 
 75.35  in original net tax capacity once certified by the county 
 75.36  auditor. 
 76.1      (b) The provisions of Minnesota Statutes, section 469.177, 
 76.2   subdivisions 1a and 3 to 10, apply to the computation of tax 
 76.3   increment for the housing transition district created under 
 76.4   sections 36 to 39. 
 76.5      (c) If an authority's request for certification includes 
 76.6   nontaxable parcels then within a preexisting district, the 
 76.7   county auditor shall remove the parcels from the preexisting 
 76.8   district.  If an authority's request for certification includes 
 76.9   taxable parcels then within a preexisting district, the county 
 76.10  auditor shall allocate all taxes derived from the captured net 
 76.11  tax capacity attributable thereto to the preexisting district 
 76.12  and shall not make the original net tax capacity adjustments 
 76.13  described in section 36, subdivision 10, paragraph (b). 
 76.14     Subd. 3.  [HOUSING TRANSITION DISTRICT PLAN.] To establish 
 76.15  a housing transition district, the governing body shall adopt a 
 76.16  housing transition district plan which constitutes a tax 
 76.17  increment financing plan, as used in those provisions of 
 76.18  Minnesota Statutes, sections 469.174 to 469.1781, made 
 76.19  applicable by section 39, and contains the following: 
 76.20     (1) a general description of the plans for development of 
 76.21  the district; 
 76.22     (2) a description of the parcels to be included in the 
 76.23  district, including such information regarding each as shall 
 76.24  establish that the district meets the conditions described in 
 76.25  section 36, subdivision 8; 
 76.26     (3) the most recent net tax capacity of each parcel 
 76.27  included in the district; 
 76.28     (4) a budget containing estimated tax increment collections 
 76.29  and expenditures as authorized or permitted by sections 36 to 
 76.30  39; 
 76.31     (5) estimates of the sources of revenue, public and 
 76.32  private, other than tax increment, to pay estimated or budgeted 
 76.33  costs; 
 76.34     (6) statements of the alternate estimated impacts of the 
 76.35  housing transition district on the net tax capacities of all 
 76.36  taxing jurisdictions in which the housing transition district is 
 77.1   located in whole or in part.  For purposes of one statement, the 
 77.2   statement shall assume that the estimated captured net tax 
 77.3   capacity would be available to the taxing jurisdictions without 
 77.4   creation of the housing transition district, and for purposes of 
 77.5   the second statement, it shall be assumed that none of the 
 77.6   estimated captured net tax capacity would be available to the 
 77.7   taxing jurisdictions without creation of the housing transition 
 77.8   district. 
 77.9      Subd. 4.  [PROCEDURE.] (a) The provisions of Minnesota 
 77.10  Statutes, section 469.175, subdivisions 3, 5, 6, and 6a, apply 
 77.11  to the establishment and operation of the housing transition 
 77.12  district created under sections 36 to 39, except the 
 77.13  determinations required by Minnesota Statutes, section 469.175, 
 77.14  subdivision 3, clauses (1) and (2), are not required. 
 77.15     (b) Upon approval of the housing transition district plan, 
 77.16  the governing body shall delegate to one or both of the 
 77.17  authorities the powers and duties regarding the implementation 
 77.18  and administration of the housing transition district as it 
 77.19  determines appropriate. 
 77.20     Sec. 38.  [LIMITATIONS.] 
 77.21     Subdivision 1.  [DURATION.] Tax increment generated by the 
 77.22  district must cease to be paid to the authority after the 
 77.23  expiration of 20 years from the receipt by the authority of the 
 77.24  first tax increment from the district. 
 77.25     Subd. 2.  [USE.] (a) All tax increment received by the 
 77.26  authority from the district shall be used in accordance with the 
 77.27  housing transition district plan. 
 77.28     (b) Tax increment may be used to pay the costs of: 
 77.29     (1) acquiring title to or an ownership interest in any 
 77.30  property within the district; 
 77.31     (2) relocating owners of or tenants in any property within 
 77.32  the district; 
 77.33     (3) demolishing all or a part of any structures or other 
 77.34  improvements within the district; 
 77.35     (4) site preparation, soil correction, and infrastructure 
 77.36  improvements within the district; 
 78.1      (5) rehabilitating or constructing any housing structures 
 78.2   or other improvements within the district; 
 78.3      (6) constructing public improvements associated with 
 78.4   development within the district; 
 78.5      (7) making loans or grants to public or private entities in 
 78.6   order to facilitate development within the district; and 
 78.7      (8) administering the creation and operation of the 
 78.8   district or the implementation of the consent decree, including 
 78.9   reimbursement for costs previously incurred or advanced and not 
 78.10  reimbursed. 
 78.11     (c) The authority may pay the costs authorized by this 
 78.12  subdivision, directly, through the issuance and sale of 
 78.13  obligations pursuant to Minnesota Statutes, section 469.178, by 
 78.14  means of loans or grants to the current or future owners of 
 78.15  property within the district, or through the exercise of any 
 78.16  authority contained in Minnesota Statutes, sections 469.001 to 
 78.17  469.047. 
 78.18     Sec. 39.  [APPLICABILITY OF OTHER LAWS.] 
 78.19     Minnesota Statutes, section 273.1399, does not apply to the 
 78.20  housing transition district or tax increment generated pursuant 
 78.21  to sections 36 to 39.  Minnesota Statutes, sections 469.174 to 
 78.22  469.179, shall apply to the housing transition district or tax 
 78.23  increment generated pursuant to sections 36 to 39 only to the 
 78.24  extent specified in sections 36 to 39.  The housing transition 
 78.25  district shall not have a longer duration than permitted by 
 78.26  general law for purposes of Minnesota Statutes, section 469.1782.
 78.27     Sec. 40.  [CITIES OF MINNEAPOLIS AND ST. PAUL; TAX 
 78.28  INCREMENT DISTRICT.] 
 78.29     Subdivision 1.  [AUTHORIZATION.] (a) The city of 
 78.30  Minneapolis and the city of St. Paul may each establish a 
 78.31  project to be known as the southeast Minneapolis and west St. 
 78.32  Paul industrial area, referred to in this section as "the SEMI 
 78.33  area project."  As used in this section, "the SEMI area" is an 
 78.34  area that is bounded on the north by Rollins Avenue to 17th 
 78.35  Avenue Southeast to Elm Street Southeast extended to the north 
 78.36  line of the Burlington Northern (Burlington/Santa Fe) 
 79.1   right-of-way extended to Minnesota Highway 280, on the east by 
 79.2   Minnesota Highway 280, on the south by University Avenue, and on 
 79.3   the west by Oak Street to Eighth Street Southwest to 15th Avenue 
 79.4   Southeast to Rollins Avenue.  Any parcel that is partially or 
 79.5   wholly situated in the SEMI area in the city of Minneapolis may 
 79.6   be included in one or more redevelopment tax increment financing 
 79.7   districts of the city of Minneapolis if the request for 
 79.8   certification of the district is submitted to the Hennepin 
 79.9   county auditor by December 31, 2018.  Any parcel that is 
 79.10  partially or wholly situated in the SEMI area in the city of St. 
 79.11  Paul may be included in one or more redevelopment tax increment 
 79.12  financing districts of the city of St. Paul if the request for 
 79.13  certification of the district is submitted to the Ramsey county 
 79.14  auditor by December 31, 2018. 
 79.15     (b) Minnesota Statutes, section 469.176, subdivision 4i, 
 79.16  does not apply to any tax increment financing district in the 
 79.17  SEMI area, regardless of when the request for certification of 
 79.18  the district was made, including requests made before the date 
 79.19  of final enactment of this act.  Minnesota Statutes, section 
 79.20  469.1763, subdivision 3, applies to any such district by 
 79.21  imposing a ten-year limit rather than a five-year limit for 
 79.22  commencement of activities within the district. 
 79.23     Subd. 2.  [EXPENDITURES OUTSIDE DISTRICT.] For each tax 
 79.24  increment financing district in the SEMI area, all tax increment 
 79.25  revenue derived from the parcels in the SEMI area must be 
 79.26  expended on activities in the SEMI area in either city or to pay 
 79.27  debt service on bonds issued by either city, the Minneapolis 
 79.28  community development agency, or the St. Paul housing and 
 79.29  redevelopment authority, to the extent that the proceeds of the 
 79.30  bonds were used to finance activities in the SEMI area or to 
 79.31  pay, or secure payment of, debt service on credit-enhanced bonds 
 79.32  issued by either city, the Minneapolis community development 
 79.33  agency, or the St. Paul housing and redevelopment authority. 
 79.34     Subd. 3.  [POWERS.] Either the city of Minneapolis or the 
 79.35  city of St. Paul may exercise any powers in the SEMI area as 
 79.36  provided to the Minneapolis community development agency or the 
 80.1   city of Minneapolis in Laws 1980, chapter 595, as amended. 
 80.2      Subd. 4.  [EFFECTIVE DATE.] This section is effective for 
 80.3   the city of Minneapolis upon compliance by the governing body of 
 80.4   the city with Minnesota Statutes, section 645.021, subdivision 
 80.5   3.  This section is effective for the city of St. Paul upon 
 80.6   compliance by the governing body of the city with Minnesota 
 80.7   Statutes, section 645.021, subdivision 3. 
 80.8      Sec. 41.  [CITY OF NEW BRIGHTON; TAX INCREMENT DISTRICTS.] 
 80.9      Subdivision 1.  [AUTHORIZATION.] (a) The city of New 
 80.10  Brighton may establish a project to be known as the northwest 
 80.11  quadrant area project and a project to be known as the central 
 80.12  redevelopment area project. 
 80.13     (b) As used in this section, "the northwest quadrant area" 
 80.14  is the area in the city of New Brighton that is bounded on the 
 80.15  north by the south boundary line of tax increment district 
 80.16  number 8 extended to Long Lake regional park, on the east by 
 80.17  I-35W, on the south by I-694, and on the west by Long Lake 
 80.18  regional park, and "the central redevelopment area" is the area 
 80.19  that is bounded on the north and west by Old Highway 8, on the 
 80.20  east by 5th Avenue N.W., and on the south by 1st Street N.W.  
 80.21     (c) Any parcel that is partially or wholly situated in the 
 80.22  northwest quadrant area or the central redevelopment area may be 
 80.23  included in one or more redevelopment tax increment financing 
 80.24  districts within the area if the request for certification of 
 80.25  the district is submitted to the Ramsey county auditor by 
 80.26  December 31, 2018. 
 80.27     (d) For any district described in this section, Minnesota 
 80.28  Statutes, section 469.1763, subdivision 3, applies by imposing a 
 80.29  ten-year limit rather a five-year limit for commencement of 
 80.30  activities within the district. 
 80.31     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
 80.32  approval by the governing body of the city of New Brighton and 
 80.33  compliance with Minnesota Statutes, section 645.021, subdivision 
 80.34  3. 
 80.35     Sec. 42.  [PINE CITY; MODIFICATION OF TAX INCREMENT 
 80.36  FINANCING PLAN.] 
 81.1      Subdivision 1.  [CORRECTION OF PARCELS.] The tax increment 
 81.2   financing plan of district 3-1 in the city of Pine City may be 
 81.3   modified to include parcel #42-0263-000 in the district and to 
 81.4   remove parcel #42-0233-000 from the district.  This modification 
 81.5   does not require compliance with Minnesota Statutes, section 
 81.6   469.175, subdivision 4, and will not subject any part of the 
 81.7   district to any provision of law that would otherwise apply to 
 81.8   the added parcel or the district exclusively due to modification 
 81.9   or enlargement of the district. 
 81.10     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
 81.11  compliance with Minnesota Statutes, section 645.021, subdivision 
 81.12  3, by the governing body of the city of Pine City, and applies 
 81.13  to increments derived from taxes levied in 1990, payable in 
 81.14  1991, and thereafter. 
 81.15     Sec. 43.  [STEVENS COUNTY; TAX INCREMENT FINANCING DISTRICT 
 81.16  EXTENSION.] 
 81.17     Subdivision 1.  [DURATION EXTENSION.] The Stevens county 
 81.18  housing and redevelopment authority may amend the tax increment 
 81.19  financing plan for economic development financing district 
 81.20  number 1-1 to extend the duration of the district.  The duration 
 81.21  of the district may be extended until December 31, 2008. 
 81.22     Subd. 2.  [EFFECTIVE DATE.] The section is effective upon 
 81.23  compliance by the governing body of Stevens county with 
 81.24  Minnesota Statutes, sections 645.021, subdivision 3, and 
 81.25  469.1782, subdivision 2. 
 81.26     Sec. 44.  [TOWN OF WHITE; ECONOMIC DEVELOPMENT.] 
 81.27     Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
 81.28  provisions of Minnesota Statutes, section 469.176, subdivision 
 81.29  1b, upon approval of the governing body of the town of White by 
 81.30  resolution, the duration of tax increment financing districts 
 81.31  numbers 1 and 2 of the joint east range economic development 
 81.32  authority shall be extended to December 31, 2017.  
 81.33     Subd. 2.  [SPECIAL RULES.] (a) Tax increment financing 
 81.34  districts numbers 1 and 2 of the joint east range economic 
 81.35  development authority are subject to Minnesota Statutes, 
 81.36  sections 469.174 to 469.179, except as provided in this 
 82.1   subdivision. 
 82.2      (b) Minnesota Statutes, sections 273.1399, and 469.1782, 
 82.3   subdivision 1, do not apply. 
 82.4      (c) Notwithstanding Minnesota Statutes, section 469.176, 
 82.5   subdivision 1, tax increment revenue generated from each 
 82.6   district may be paid to the authority until the earlier of (1) 
 82.7   December 31, 2017; or (2) the date upon which all contractual 
 82.8   obligations of the authority for the reimbursement of project 
 82.9   costs have terminated. 
 82.10     (d) The application of Minnesota Statutes, section 
 82.11  469.1763, is modified to permit the use of increments from 
 82.12  either district to be used to pay any promissory notes issued in 
 82.13  connection with either district. 
 82.14     Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
 82.15  compliance by the governing bodies of the town of White, the 
 82.16  county of St. Louis, and independent school district No. 2711 
 82.17  with Minnesota Statutes, sections 469.1782, subdivision 2, and 
 82.18  645.021, subdivision 2. 
 82.19     Sec. 45.  [REPEALER.] 
 82.20     Minnesota Statutes 1996, sections 469.174, subdivision 19; 
 82.21  and 469.176, subdivision 4b, are repealed. 
 82.22     Sec. 46.  [EFFECTIVE DATE.] 
 82.23     Sections 1, 3, 4, 7 to 12, 14, 15, 19, 21, the relevant 
 82.24  part of 22, and 24 to 27 are effective for heritage and historic 
 82.25  subdistricts created after May 31, 1997. 
 82.26     Sections 2, 16, paragraph (b), 17, 20, the portion of 22 
 82.27  not specific to heritage and historic subdistricts, and 23 apply 
 82.28  to all tax increment districts, whenever certified, insofar as 
 82.29  the underlying law applies to them, and any uses of tax 
 82.30  increment expended prior to the date of enactment of this act 
 82.31  which are in compliance with the provisions of those sections 
 82.32  are deemed valid.  
 82.33     Sections 5, 6, 13, 16 as related to soils conditions 
 82.34  districts, and 45 are effective for districts for which 
 82.35  certification is requested after June 30, 1997.  Soils condition 
 82.36  districts for which certification is requested before that date 
 83.1   will continue to be subject to the provisions of Minnesota 
 83.2   Statutes 1996, sections 469.174, subdivision 19; and 469.176, 
 83.3   subdivisions 1b and 4b, for the duration of their existence. 
 83.4      Sections 29 and 30 are effective upon approval by the 
 83.5   governing body of the city of Columbia Heights and compliance 
 83.6   with Minnesota Statutes, section 645.021, subdivision 3. 
 83.7      Sections 36 to 39 are effective the day following final 
 83.8   enactment and upon approval by the governing body of the city of 
 83.9   Minneapolis and compliance with Minnesota Statutes, section 
 83.10  645.021, subdivision 3. 
 83.11                             ARTICLE 5
 83.12                   TRUTH IN TAXATION/LEVY LIMITS
 83.13     Section 1.  Minnesota Statutes 1996, section 275.065, 
 83.14  subdivision 1, is amended to read: 
 83.15     Subdivision 1.  [PROPOSED LEVY.] (a) Notwithstanding any 
 83.16  law or charter to the contrary, on or before September 15, each 
 83.17  taxing authority, other than a school district, shall adopt a 
 83.18  proposed budget and shall certify to the county auditor the 
 83.19  proposed or, in the case of a town, the final property tax levy 
 83.20  for taxes payable in the following year. 
 83.21     (b) On or before September 30, each school district shall 
 83.22  certify to the county auditor the proposed property tax levy for 
 83.23  taxes payable in the following year.  The school district may 
 83.24  shall certify the proposed levy as: 
 83.25     (1) a specific dollar amount; or the state general 
 83.26  education levy amount as prescribed under section 124A.23, 
 83.27  subdivision 2; and 
 83.28     (2) an amount equal to the sum of the remaining school 
 83.29  levies, or the maximum levy limitation certified by the 
 83.30  commissioner of children, families, and learning to the county 
 83.31  auditor according to section 124.918, subdivision 1, less the 
 83.32  state general education levy amount under clause (1). 
 83.33     (c) If the board of estimate and taxation or any similar 
 83.34  board that establishes maximum tax levies for taxing 
 83.35  jurisdictions within a first class city certifies the maximum 
 83.36  property tax levies for funds under its jurisdiction by charter 
 84.1   to the county auditor by September 15, the city shall be deemed 
 84.2   to have certified its levies for those taxing jurisdictions. 
 84.3      (d) For purposes of this section, "taxing authority" 
 84.4   includes all home rule and statutory cities, towns, counties, 
 84.5   school districts, and special taxing districts as defined in 
 84.6   section 275.066.  Intermediate school districts that levy a tax 
 84.7   under chapter 124 or 136D, joint powers boards established under 
 84.8   sections 124.491 to 124.495, and common school districts No. 
 84.9   323, Franconia, and No. 815, Prinsburg, are also special taxing 
 84.10  districts for purposes of this section.  
 84.11     Sec. 2.  Minnesota Statutes 1996, section 275.065, 
 84.12  subdivision 3, is amended to read: 
 84.13     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 84.14  county auditor shall prepare and the county treasurer shall 
 84.15  deliver after November 10 and on or before November 24 each 
 84.16  year, by first class mail to each taxpayer at the address listed 
 84.17  on the county's current year's assessment roll, a notice of 
 84.18  proposed property taxes and, in the case of a town, final 
 84.19  property taxes.  
 84.20     (b) The commissioner of revenue shall prescribe the form of 
 84.21  the notice. 
 84.22     (c) The notice must inform taxpayers that it contains the 
 84.23  amount of property taxes each taxing authority other than a town 
 84.24  proposes to collect for taxes payable the following year and, 
 84.25  for a town, the amount of its final levy.  It In the case of a 
 84.26  town, or in the case of the state general education portion of 
 84.27  the school district levy, the final tax amount will be its 
 84.28  proposed tax.  The notice must clearly state that each taxing 
 84.29  authority, including regional library districts established 
 84.30  under section 134.201, and including the metropolitan taxing 
 84.31  districts as defined in paragraph (i), but excluding all other 
 84.32  special taxing districts and towns, will hold a public meeting 
 84.33  to receive public testimony on the proposed budget and proposed 
 84.34  or final property tax levy, or, in case of a school district, on 
 84.35  the current budget and proposed property tax levy.  It must 
 84.36  clearly state the time and place of each taxing authority's 
 85.1   meeting and an address where comments will be received by mail.  
 85.2      (d) The notice must state for each parcel: 
 85.3      (1) the market value of the property as determined under 
 85.4   section 273.11, and used for computing property taxes payable in 
 85.5   the following year and for taxes payable in the current year; 
 85.6   and, in the case of residential property, whether the property 
 85.7   is classified as homestead or nonhomestead.  The notice must 
 85.8   clearly inform taxpayers of the years to which the market values 
 85.9   apply and that the values are final values; 
 85.10     (2) the items listed below, shown separately by county, 
 85.11  city or town, school district excess referenda levy state 
 85.12  general education tax, remaining school district levy, regional 
 85.13  library district, if in existence, the total of the metropolitan 
 85.14  special taxing districts as defined in paragraph (i) and the sum 
 85.15  of the remaining special taxing districts, and as a total of the 
 85.16  all taxing authorities, including all special taxing districts, 
 85.17  the proposed or, for a town, final net tax on the property for 
 85.18  taxes payable the following year and the actual tax for taxes 
 85.19  payable the current year.: 
 85.20     (i) the actual tax for taxes payable in the current year; 
 85.21     (ii) the tax change due to spending factors, defined as the 
 85.22  proposed tax minus the constant spending tax amount; 
 85.23     (iii) the tax change due to other factors, defined as the 
 85.24  constant spending tax amount minus the actual current year tax; 
 85.25  and 
 85.26     (iv) the proposed tax amount. 
 85.27     In the case of a town or the state general education tax, 
 85.28  the final tax shall also be its proposed tax.  If a school 
 85.29  district has certified under section 124A.03, subdivision 2, 
 85.30  that a referendum will be held in the school district at the 
 85.31  November general election, the county auditor must note next to 
 85.32  the school district's proposed amount that a referendum is 
 85.33  pending and that, if approved by the voters, the tax amount may 
 85.34  be higher than shown on the notice.  For the purposes of this 
 85.35  subdivision, "school district excess referenda levy" means 
 85.36  school district taxes for operating purposes approved at 
 86.1   referendums, including those taxes based on net tax capacity as 
 86.2   well as those based on market value.  "School district excess 
 86.3   referenda levy" does not include school district taxes for 
 86.4   capital expenditures approved at referendums or school district 
 86.5   taxes to pay for the debt service on bonds approved at 
 86.6   referenda.  In the case of the city of Minneapolis, the levy for 
 86.7   the Minneapolis library board and the levy for Minneapolis park 
 86.8   and recreation shall be listed separately from the remaining 
 86.9   amount of the city's levy considered as special taxing district 
 86.10  levies for the purposes of this subdivision.  In the case of a 
 86.11  parcel where tax increment or the fiscal disparities areawide 
 86.12  tax under chapter 276A or 473F applies, the proposed tax levy on 
 86.13  the captured value or the proposed tax levy on the tax capacity 
 86.14  subject to the areawide tax must each be stated separately and 
 86.15  not included in the sum of the special taxing districts; and 
 86.16     (3) the increase or decrease in the amounts in clause (2) 
 86.17  from between the total taxes payable in the current year to and 
 86.18  the total proposed or, for a town, final taxes payable the 
 86.19  following year taxes, expressed as a dollar amount and as a 
 86.20  percentage. 
 86.21     (e) The notice must clearly state that the proposed or 
 86.22  final taxes do not include the following: 
 86.23     (1) special assessments; 
 86.24     (2) levies approved by the voters after the date the 
 86.25  proposed taxes are certified, including bond referenda, school 
 86.26  district levy referenda, and levy limit increase referenda; 
 86.27     (3) amounts necessary to pay cleanup or other costs due to 
 86.28  a natural disaster occurring after the date the proposed taxes 
 86.29  are certified; 
 86.30     (4) amounts necessary to pay tort judgments against the 
 86.31  taxing authority that become final after the date the proposed 
 86.32  taxes are certified; and 
 86.33     (5) the contamination tax imposed on properties which 
 86.34  received market value reductions for contamination. 
 86.35     (f) Except as provided in subdivision 7, failure of the 
 86.36  county auditor to prepare or the county treasurer to deliver the 
 87.1   notice as required in this section does not invalidate the 
 87.2   proposed or final tax levy or the taxes payable pursuant to the 
 87.3   tax levy. 
 87.4      (g) If the notice the taxpayer receives under this section 
 87.5   lists the property as nonhomestead and the homeowner provides 
 87.6   satisfactory documentation to the county assessor that the 
 87.7   property is owned and used as the owner's homestead, the 
 87.8   assessor shall reclassify the property to homestead for taxes 
 87.9   payable in the following year. 
 87.10     (h) In the case of class 4 residential property used as a 
 87.11  residence for lease or rental periods of 30 days or more, the 
 87.12  taxpayer must either: 
 87.13     (1) mail or deliver a copy of the notice of proposed 
 87.14  property taxes to each tenant, renter, or lessee; or 
 87.15     (2) post a copy of the notice in a conspicuous place on the 
 87.16  premises of the property.  
 87.17     The notice must be mailed or posted by the taxpayer by 
 87.18  November 27 or within three days of receipt of the notice, 
 87.19  whichever is later.  A taxpayer may notify the county treasurer 
 87.20  of the address of the taxpayer, agent, caretaker, or manager of 
 87.21  the premises to which the notice must be mailed in order to 
 87.22  fulfill the requirements of this paragraph. 
 87.23     (i) For purposes of this subdivision, subdivisions 5a and 
 87.24  6, "metropolitan special taxing districts" means the following 
 87.25  taxing districts in the seven-county metropolitan area that levy 
 87.26  a property tax for any of the specified purposes listed below: 
 87.27     (1) metropolitan council under section 473.132, 473.167, 
 87.28  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 87.29     (2) metropolitan airports commission under section 473.667, 
 87.30  473.671, or 473.672; and 
 87.31     (3) metropolitan mosquito control commission under section 
 87.32  473.711. 
 87.33     For purposes of this section, any levies made by the 
 87.34  regional rail authorities in the county of Anoka, Carver, 
 87.35  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 87.36  398A shall be included with the appropriate county's levy and 
 88.1   shall be discussed at that county's public hearing. 
 88.2      (j) For taxes levied in 1996, payable in 1997 only, in the 
 88.3   case of a statutory or home rule charter city or town that 
 88.4   exercises the local levy option provided in section 473.388, 
 88.5   subdivision 7, the notice of its proposed taxes may include a 
 88.6   statement of the amount by which its proposed tax increase for 
 88.7   taxes payable in 1997 is attributable to its exercise of that 
 88.8   option, together with a statement that the levy of the 
 88.9   metropolitan council was decreased by a similar amount because 
 88.10  of the exercise of that option. 
 88.11     Sec. 3.  Minnesota Statutes 1996, section 275.065, is 
 88.12  amended by adding a subdivision to read: 
 88.13     Subd. 3a.  [CONSTANT SPENDING LEVY AMOUNT.] (a) For 
 88.14  purposes of this section, "constant spending levy amount" for a 
 88.15  county, city, town, or special taxing district means the 
 88.16  property tax levy that the taxing authority would need to levy 
 88.17  so that the sum of its levy, including its fiscal disparities 
 88.18  distribution levy under section 276A.06, subdivision 3, clause 
 88.19  (a), or 473F.08, subdivision 3, clause (a), plus its property 
 88.20  tax aid amounts would remain constant from the current year to 
 88.21  the proposed year, taking into account the fiscal disparities 
 88.22  distribution levy amounts and the property tax aid amounts that 
 88.23  have been certified for the proposed year.  For the purposes of 
 88.24  this paragraph, property tax aids include homestead and 
 88.25  agricultural credit aid under section 273.1398, subdivision 2, 
 88.26  local government aid under section 477A.013, local performance 
 88.27  aid under section 477A.05, county criminal justice aid under 
 88.28  section 477A.0121, and family preservation aid under section 
 88.29  477A.0122. 
 88.30     (b) For school districts, for the state education tax, 
 88.31  "constant spending levy amount" means the general education levy 
 88.32  that would be computed for the district using the current year's 
 88.33  state general education levy amount and the proposed year's 
 88.34  adjusted net tax capacity.  In order to make this calculation, 
 88.35  the commissioner of children, families, and learning shall 
 88.36  recalculate the statewide general education tax rate using the 
 89.1   current year's levy data, except the tax base shall be the 
 89.2   proposed year's adjusted net tax capacity.  For the remaining 
 89.3   school district levies, the commissioner shall compute the 
 89.4   constant spending levy amount by separately calculating each 
 89.5   program levy using the current year's revenue per pupil unit and 
 89.6   the proposed year's tax base, pupil units, and aid amounts, and 
 89.7   adding the resulting amounts.  In no case shall the constant 
 89.8   spending levy amount be less than $0.  The commissioner shall 
 89.9   also determine the apportionment of the fiscal disparities 
 89.10  distribution levy between the general education levy and the 
 89.11  remaining school district levies.  On or before September 30 
 89.12  annually, the commissioner must report to the county auditor 
 89.13  each school district's constant spending state general education 
 89.14  levy and its constant spending levy amount for the remaining 
 89.15  school district levies.  
 89.16     Sec. 4.  Minnesota Statutes 1996, section 275.065, 
 89.17  subdivision 5a, is amended to read: 
 89.18     Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
 89.19  population of more than 2,500, county, a metropolitan special 
 89.20  taxing district as defined in subdivision 3, paragraph (i), a 
 89.21  regional library district established under section 134.201, or 
 89.22  school district shall advertise in a newspaper a notice of its 
 89.23  intent to adopt a budget and property tax levy or, in the case 
 89.24  of a school district, to review its current budget and proposed 
 89.25  property taxes payable in the following year, at a public 
 89.26  hearing.  The notice must be published not less than two 
 89.27  business days nor more than six business days before the hearing.
 89.28     The advertisement must be at least one-eighth page in size 
 89.29  of a standard-size or a tabloid-size newspaper.  The 
 89.30  advertisement must not be placed in the part of the newspaper 
 89.31  where legal notices and classified advertisements appear.  The 
 89.32  advertisement must be published in an official newspaper of 
 89.33  general circulation in the taxing authority.  The newspaper 
 89.34  selected must be one of general interest and readership in the 
 89.35  community, and not one of limited subject matter.  The 
 89.36  advertisement must appear in a newspaper that is published at 
 90.1   least once per week.  
 90.2      For purposes of this section, the metropolitan special 
 90.3   taxing district's advertisement must only be published in the 
 90.4   Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
 90.5      (b) The advertisement for school districts, metropolitan 
 90.6   special taxing districts, and regional library districts must be 
 90.7   in the following form, except that the notice for a school 
 90.8   district may include references to the current budget in regard 
 90.9   to proposed property taxes. 
 90.10                             "NOTICE OF
 90.11                      PROPOSED PROPERTY TAXES
 90.12            (City/County/School District/Metropolitan
 90.13                  Special Taxing District/Regional
 90.14                   Library District) of .........
 90.15  The governing body of ........ will soon hold budget hearings 
 90.16  and vote on the property taxes for (city/county/metropolitan 
 90.17  special taxing district/regional library district services that 
 90.18  will be provided in 199_ (year)/school district services that 
 90.19  will be provided in 199_ (year) and 199_ (year)). 
 90.20                     NOTICE OF PUBLIC HEARING: 
 90.21  All concerned citizens are invited to attend a public hearing 
 90.22  and express their opinions on the proposed (city/county/school 
 90.23  district/metropolitan special taxing district/regional library 
 90.24  district) budget and property taxes, or in the case of a school 
 90.25  district, its current budget and proposed property taxes, 
 90.26  payable in the following year.  The hearing will be held on 
 90.27  (Month/Day/Year) at (Time) at (Location, Address)." 
 90.28     (c) The advertisement for cities and counties must be in 
 90.29  the following form. 
 90.30                       "NOTICE OF PROPOSED
 90.31                 TOTAL BUDGET AND PROPERTY TAXES
 90.32  The (city/county) governing body or board of commissioners will 
 90.33  hold a public hearing to discuss the budget and to vote on the 
 90.34  amount of property taxes to collect for services the 
 90.35  (city/county) will provide in (year). 
 90.36     
 91.1   SPENDING:  The total budget amounts below compare 
 91.2   (city's/county's) (year) total actual budget with the amount the 
 91.3   (city/county) proposes to spend in (year). 
 91.4      
 91.5   (Year) Total          Proposed (Year)          Change from
 91.6   Actual Budget             Budget               (Year)-(Year)
 91.7      
 91.8     $.......              $.......                ...%
 91.9      
 91.10  TAXES:  The property tax amounts below compare that portion of 
 91.11  the current budget levied in property taxes in (city/county) for 
 91.12  (year) with the property taxes the (city/county) proposes to 
 91.13  collect in (year). 
 91.14     
 91.15  (Year) Property       Proposed (Year)          Change from
 91.16      Taxes              Property Taxes         (Year)-(Year)
 91.17     
 91.18    $.......              $.......               ...% 
 91.19     
 91.20                    ATTEND THE PUBLIC HEARING
 91.21  All (city/county) residents are invited to attend the public 
 91.22  hearing of the (city/county) to express your opinions on the 
 91.23  budget and the proposed amount of (year) property taxes.  The 
 91.24  hearing will be held on: 
 91.25                      (Month/Day/Year/Time)
 91.26                        (Location/Address)
 91.27  If the discussion of the budget cannot be completed, a time and 
 91.28  place for continuing the discussion will be announced at the 
 91.29  hearing.  You are also invited to send your written comments to: 
 91.30                          (City/County)
 91.31                       (Location/Address)"
 91.32     (d) For purposes of this subdivision, the budget amounts 
 91.33  listed on the advertisement mean: 
 91.34     (1) for cities, the total government fund expenditures, as 
 91.35  defined by the state auditor under section 471.6965, less any 
 91.36  expenditures for improvements or services that are specially 
 92.1   assessed or charged under chapter 429, 430, 435, or the 
 92.2   provisions of any other law or charter; and 
 92.3      (2) for counties, the total government fund expenditures, 
 92.4   as defined by the state auditor under section 375.169, less any 
 92.5   expenditures for direct payments to recipients or providers for 
 92.6   the human service aids listed in section 273.1398, subdivision 
 92.7   1, paragraph (i). 
 92.8      (c) (e) A city with a population of over 500 but not more 
 92.9   than 2,500 must advertise by posted notice as defined in section 
 92.10  645.12, subdivision 1.  The advertisement must be posted at the 
 92.11  time provided in paragraph (a).  It must be in the form required 
 92.12  in paragraph (b). 
 92.13     (d) (f) For purposes of this subdivision, the population of 
 92.14  a city is the most recent population as determined by the state 
 92.15  demographer under section 4A.02. 
 92.16     (e) (g) The commissioner of revenue, subject to the 
 92.17  approval of the chairs of the house and senate tax committees, 
 92.18  shall prescribe the form and format of the advertisement. 
 92.19     (f) For calendar year 1993, each taxing authority required 
 92.20  to publish an advertisement must include on the advertisement a 
 92.21  statement that information on the increases or decreases of the 
 92.22  total budget, including employee and independent contractor 
 92.23  compensation in the prior year, current year, and proposed 
 92.24  budget year will be discussed at the hearing. 
 92.25     (g) Notwithstanding paragraph (f), for 1993, the 
 92.26  commissioner of revenue shall prescribe the form, format, and 
 92.27  content of an advertisement comparing current and proposed 
 92.28  expense budgets for the metropolitan council, the metropolitan 
 92.29  airports commission, and the metropolitan mosquito control 
 92.30  commission.  The expense budget must include occupancy, 
 92.31  personnel, contractual and capital improvement expenses.  The 
 92.32  form, format, and content of the advertisement must be approved 
 92.33  by the chairs of the house and senate tax committees prior to 
 92.34  publication. 
 92.35     Sec. 5.  Minnesota Statutes 1996, section 275.065, 
 92.36  subdivision 6, is amended to read: 
 93.1      Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
 93.2      (a) For purposes of this section, the following terms shall 
 93.3   have the meanings given: 
 93.4      (1) "Initial hearing" means the first and primary hearing 
 93.5   held to discuss the taxing authority's proposed budget and 
 93.6   proposed property tax levy for taxes payable in the following 
 93.7   year, or, for school districts, the current budget and the 
 93.8   proposed property tax levy for taxes payable in the following 
 93.9   year. 
 93.10     (2) "Continuation hearing" means a hearing held to complete 
 93.11  the initial hearing, if the initial hearing is not completed on 
 93.12  its scheduled date. 
 93.13     (3) "Subsequent hearing" means the hearing held to adopt 
 93.14  the taxing authority's final property tax levy, and, in the case 
 93.15  of taxing authorities other than school districts, the final 
 93.16  budget, for taxes payable in the following year. 
 93.17     (b) Between November 29 and December 20, the governing 
 93.18  bodies of a city that has a population over 500, county, 
 93.19  metropolitan special taxing districts as defined in subdivision 
 93.20  3, paragraph (i), and regional library districts shall each hold 
 93.21  a an initial public hearing to discuss and seek public comment 
 93.22  on its final budget and property tax levy for taxes payable in 
 93.23  the following year, and the governing body of the school 
 93.24  district shall hold a an initial public hearing to review its 
 93.25  current budget and proposed property tax levy for taxes payable 
 93.26  in the following year.  The metropolitan special taxing 
 93.27  districts shall be required to hold only a single joint initial 
 93.28  public hearing, the location of which will be determined by the 
 93.29  affected metropolitan agencies. 
 93.30     (c) The initial hearing must be held after 5:00 p.m. if 
 93.31  scheduled on a day other than Saturday.  No initial hearing may 
 93.32  be held on a Sunday.  
 93.33     (d) At the initial hearing under this subdivision, the 
 93.34  percentage increase in property taxes proposed by the taxing 
 93.35  authority, if any, and the specific purposes for which property 
 93.36  tax revenues are being increased must be discussed.  During the 
 94.1   discussion, the governing body shall hear comments regarding a 
 94.2   proposed increase and explain the reasons for the proposed 
 94.3   increase.  The public shall be allowed to speak and to ask 
 94.4   questions. 
 94.5      (e) If the initial hearing is not completed on its 
 94.6   scheduled date, the taxing authority must announce, prior to 
 94.7   adjournment of the hearing, the date, time, and place for the 
 94.8   continuation of the hearing.  The continuation hearing must be 
 94.9   held at least five business days but no more than 14 business 
 94.10  days after the initial hearing.  A continuation hearing may not 
 94.11  be held later than December 20.  A continuation hearing must be 
 94.12  held after 5:00 p.m. if scheduled on a day other than Saturday.  
 94.13  No continuation hearing may be held on a Sunday. 
 94.14     (f) The governing body of a county shall hold its initial 
 94.15  hearing on the second Tuesday in December each year, and may 
 94.16  hold additional initial hearings on other dates before December 
 94.17  20 if necessary for the convenience of county residents.  If the 
 94.18  county needs a continuation of its hearing, the continuation 
 94.19  hearing shall be held on the third Tuesday in December.  If the 
 94.20  third Tuesday in December falls on December 21, the county's 
 94.21  continuation hearing shall be held on Monday, December 20.  
 94.22     (g) The metropolitan special taxing districts shall hold a 
 94.23  joint initial public hearing on the first Monday of December.  A 
 94.24  continuation hearing, if necessary, shall be held on the second 
 94.25  Monday of December. 
 94.26     (h) The county auditor shall provide for the coordination 
 94.27  of initial and continuation hearing dates for all school 
 94.28  districts and cities within the county to prevent conflicts 
 94.29  under paragraphs (i) and (j). 
 94.30     (i) By August 10, each school board and the board of the 
 94.31  regional library district shall certify to the county auditors 
 94.32  of the counties in which the school district or regional library 
 94.33  district is located the dates on which it elects to hold its 
 94.34  initial hearing and any continuation hearing.  If a school board 
 94.35  or regional library district does not certify these dates by 
 94.36  August 10, the auditor will assign the initial and continuation 
 95.1   hearing dates.  The dates elected or assigned must not conflict 
 95.2   with the initial and continuation hearing dates of the county or 
 95.3   the metropolitan special taxing districts.  
 95.4      (j) By August 20, the county auditor shall notify the 
 95.5   clerks of the cities within the county of the dates on which 
 95.6   school districts and regional library districts have elected to 
 95.7   hold their initial and continuation hearings.  At the time a 
 95.8   city certifies its proposed levy under subdivision 1 it shall 
 95.9   certify the dates on which it elects to hold its initial hearing 
 95.10  and any continuation hearing.  If a city does not certify these 
 95.11  dates by September 15, the auditor will assign the initial and 
 95.12  continuation hearing dates.  The dates elected or assigned must 
 95.13  not conflict with the initial and continuation hearing dates of 
 95.14  the county, metropolitan special taxing districts, regional 
 95.15  library districts, or school districts within which the city is 
 95.16  located.  This paragraph does not apply to cities of 500 
 95.17  population or less. 
 95.18     (k) The county initial hearing date and the city, 
 95.19  metropolitan special taxing district, regional library district, 
 95.20  and school district initial hearing dates must be designated on 
 95.21  the notices required under subdivision 3.  The continuation 
 95.22  hearing dates need not be stated on the notices.  
 95.23     (l) At a subsequent hearing, each county, school district, 
 95.24  city over 500 population, and metropolitan special taxing 
 95.25  district may amend its proposed property tax levy and must adopt 
 95.26  a final property tax levy.  Each county, city over 500 
 95.27  population, and metropolitan special taxing district may also 
 95.28  amend its proposed budget and must adopt a final budget at the 
 95.29  subsequent hearing.  The final property tax levy must be adopted 
 95.30  prior to adopting the final budget.  A school district is not 
 95.31  required to adopt its final budget at the subsequent hearing.  
 95.32  The subsequent hearing of a taxing authority must be held on a 
 95.33  date subsequent to the date of the taxing authority's initial 
 95.34  public hearing, or subsequent to the date of its continuation 
 95.35  hearing.  If a continuation hearing is held, the subsequent 
 95.36  hearing must be held either immediately following the 
 96.1   continuation hearing or on a date subsequent to the continuation 
 96.2   hearing.  The subsequent hearing may be held at a regularly 
 96.3   scheduled board or council meeting or at a special meeting 
 96.4   scheduled for the purposes of the subsequent hearing.  The 
 96.5   subsequent hearing of a taxing authority does not have to be 
 96.6   coordinated by the county auditor to prevent a conflict with an 
 96.7   initial hearing, a continuation hearing, or a subsequent hearing 
 96.8   of any other taxing authority.  All subsequent hearings must be 
 96.9   held prior to five working days after December 20 of the levy 
 96.10  year.  The date, time, and place of the subsequent hearing must 
 96.11  be announced at the initial public hearing or at the 
 96.12  continuation hearing. 
 96.13     (m) The property tax levy certified under section 275.07 by 
 96.14  a city of any population, county, metropolitan special taxing 
 96.15  district, regional library district, or school district must not 
 96.16  exceed the proposed levy determined under subdivision 1, except 
 96.17  by an amount up to the sum of the following amounts: 
 96.18     (1) the amount of a school district levy whose voters 
 96.19  approved a referendum to increase taxes under section 124.82, 
 96.20  subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 
 96.21  2, after the proposed levy was certified; 
 96.22     (2) the amount of a city or county levy approved by the 
 96.23  voters after the proposed levy was certified; 
 96.24     (3) the amount of a levy to pay principal and interest on 
 96.25  bonds approved by the voters under section 475.58 after the 
 96.26  proposed levy was certified; 
 96.27     (4) the amount of a levy to pay costs due to a natural 
 96.28  disaster occurring after the proposed levy was certified, if 
 96.29  that amount is approved by the commissioner of revenue under 
 96.30  subdivision 6a; 
 96.31     (5) the amount of a levy to pay tort judgments against a 
 96.32  taxing authority that become final after the proposed levy was 
 96.33  certified, if the amount is approved by the commissioner of 
 96.34  revenue under subdivision 6a; 
 96.35     (6) the amount of an increase in levy limits certified to 
 96.36  the taxing authority by the commissioner of children, families, 
 97.1   and learning or the commissioner of revenue after the proposed 
 97.2   levy was certified; and 
 97.3      (7) the amount required under section 124.755. 
 97.4      At the hearing under this subdivision, the percentage 
 97.5   increase in property taxes proposed by the taxing authority, if 
 97.6   any, and the specific purposes for which property tax revenues 
 97.7   are being increased must be discussed.  
 97.8      During the discussion, the governing body shall hear 
 97.9   comments regarding a proposed increase and explain the reasons 
 97.10  for the proposed increase.  The public shall be allowed to speak 
 97.11  and to ask questions.  At the subsequent hearing held as 
 97.12  provided in this subdivision, the governing body, other than the 
 97.13  governing body of a school district, shall adopt its final 
 97.14  property tax levy prior to adopting its final budget. 
 97.15     If the hearing is not completed on its scheduled date, the 
 97.16  taxing authority must announce, prior to adjournment of the 
 97.17  hearing, the date, time, and place for the continuation of the 
 97.18  hearing.  The continued hearing must be held at least five 
 97.19  business days but no more than 14 business days after the 
 97.20  original hearing. 
 97.21     The hearing must be held after 5:00 p.m. if scheduled on a 
 97.22  day other than Saturday.  No hearing may be held on a Sunday.  
 97.23  The governing body of a county shall hold a hearing on the 
 97.24  second Tuesday in December each year, and may hold additional 
 97.25  hearings on other dates before December 20 if necessary for the 
 97.26  convenience of county residents.  If the county needs a 
 97.27  continuation of its hearing, the continued hearing shall be held 
 97.28  on the third Tuesday in December.  If the third Tuesday in 
 97.29  December falls on December 21, the county's continuation hearing 
 97.30  shall be held on Monday, December 20.  The county auditor shall 
 97.31  provide for the coordination of hearing dates for all cities and 
 97.32  school districts within the county. 
 97.33     The metropolitan special taxing districts shall hold a 
 97.34  joint public hearing on the first Monday of December.  A 
 97.35  continuation hearing, if necessary, shall be held on the second 
 97.36  Monday of December. 
 98.1      By August 10, each school board and the board of the 
 98.2   regional library district shall certify to the county auditors 
 98.3   of the counties in which the school district or regional library 
 98.4   district is located the dates on which it elects to hold its 
 98.5   hearings and any continuations.  If a school board or regional 
 98.6   library district does not certify the dates by August 10, the 
 98.7   auditor will assign the hearing date.  The dates elected or 
 98.8   assigned must not conflict with the hearing dates of the county 
 98.9   or the metropolitan special taxing districts.  By August 20, the 
 98.10  county auditor shall notify the clerks of the cities within the 
 98.11  county of the dates on which school districts and regional 
 98.12  library districts have elected to hold their hearings.  At the 
 98.13  time a city certifies its proposed levy under subdivision 1 it 
 98.14  shall certify the dates on which it elects to hold its hearings 
 98.15  and any continuations.  For its initial hearing and for the 
 98.16  subsequent hearing at which the final property tax levy will be 
 98.17  adopted, the city must not select dates that conflict with the 
 98.18  county hearing dates, metropolitan special taxing district 
 98.19  dates, or with those elected by or assigned to the school 
 98.20  districts or regional library district in which the city is 
 98.21  located.  For continuation hearings, the city may select dates 
 98.22  that conflict with other taxing authorities' dates if the city 
 98.23  deems it necessary. 
 98.24     The county hearing dates and the city, metropolitan special 
 98.25  taxing district, regional library district, and school district 
 98.26  hearing dates must be designated on the notices required under 
 98.27  subdivision 3.  The continuation dates need not be stated on the 
 98.28  notices.  
 98.29     (n) This subdivision does not apply to towns and special 
 98.30  taxing districts other than regional library districts and 
 98.31  metropolitan special taxing districts. 
 98.32     (o) Notwithstanding the requirements of this section, the 
 98.33  employer is required to meet and negotiate over employee 
 98.34  compensation as provided for in chapter 179A.  
 98.35     Sec. 6.  Minnesota Statutes 1996, section 275.065, is 
 98.36  amended by adding a subdivision to read: 
 99.1      Subd. 6b.  [JOINT PUBLIC HEARINGS.] Notwithstanding any 
 99.2   other provision of law, any city with a population of 10,000 and 
 99.3   over, may conduct a more comprehensive public hearing than is 
 99.4   contained in subdivision 6 by including a board member from the 
 99.5   county, a board member from the school district located within 
 99.6   the city's boundary, and a representative of the metropolitan 
 99.7   council, if the city is in the metropolitan area, as defined in 
 99.8   section 473.121, subdivision 2, at the city's public hearing.  
 99.9   All provisions regarding the public hearings under subdivision 6 
 99.10  are applicable to the joint public hearings under this 
 99.11  subdivision. 
 99.12     Upon the adoption of a resolution by the governing body of 
 99.13  the city to hold a joint hearing, the city shall notify the 
 99.14  county, the school district, and the metropolitan council if the 
 99.15  city is in the metropolitan area, of the decision to hold a 
 99.16  joint public hearing and request a board member from each of 
 99.17  those taxing authorities, and the member or the designee of the 
 99.18  metropolitan council if applicable, to be at the joint hearing.  
 99.19  If the city is located in more than one county, the city may 
 99.20  choose to request a county board member from each county or only 
 99.21  from the county containing the majority of the city's market 
 99.22  value.  If more than one school district is partially or totally 
 99.23  located within the city, the city may choose to request a school 
 99.24  district board member from each school district, or a board 
 99.25  member only from the school district containing the majority of 
 99.26  the city's market value.  If, as a result of requests under this 
 99.27  subdivision, there are not sufficient board members in the 
 99.28  county or the school district to attend the joint hearing, the 
 99.29  county or school district may send a nonelected person working 
 99.30  for its taxing authority to speak on the authority's behalf.  
 99.31  The city may also invite each state senator and representative 
 99.32  who represents the city, or a portion of the city, to come to 
 99.33  the joint hearing. 
 99.34     The primary purpose of the joint hearing is to discuss the 
 99.35  city's budget and property tax levy.  The county and school 
 99.36  district officials, and metropolitan council representative, if 
100.1   the city is in the metropolitan area, should be prepared to 
100.2   answer questions relevant to its budget and levy and the effect 
100.3   that its levy has on the property owners in the city. 
100.4      If a city conducts a hearing under this subdivision, this 
100.5   hearing is in lieu of the initial hearing required under 
100.6   subdivision 6.  However, the city is still required to adopt its 
100.7   proposed property tax levy at a subsequent hearing as provided 
100.8   under subdivision 6.  The hearings under this subdivision do not 
100.9   relieve a county, school district, or the metropolitan council 
100.10  of the requirement to hold its individual hearing under 
100.11  subdivision 6. 
100.12     Sec. 7.  Minnesota Statutes 1996, section 275.065, 
100.13  subdivision 8, is amended to read: 
100.14     Subd. 8.  [HEARING.] Notwithstanding any other provision of 
100.15  law, Ramsey county, the city of St. Paul, and independent school 
100.16  district No. 625 are authorized to and shall hold their initial 
100.17  public hearing jointly.  The hearing must be held on the second 
100.18  Tuesday of December each year.  The advertisement required in 
100.19  subdivision 5a may be a joint advertisement.  The hearing is 
100.20  otherwise subject to the requirements of this section. 
100.21     Ramsey county is authorized to hold an additional initial 
100.22  hearing or hearings as provided under this section, provided 
100.23  that any additional hearings must not conflict with the initial 
100.24  or continuation hearing dates of the other taxing districts.  
100.25  However, if Ramsey county elects not to hold such 
100.26  additional initial hearing or hearings, the joint initial 
100.27  hearing required by this subdivision must be held in a St. Paul 
100.28  location convenient to residents of Ramsey county. 
100.29     Sec. 8.  Minnesota Statutes 1996, section 275.16, is 
100.30  amended to read: 
100.31     275.16 [COUNTY AUDITOR TO FIX AMOUNT OF LEVY.] 
100.32     If any such municipality shall return to the county auditor 
100.33  a levy greater than permitted by chapters 124, 124A, 124B, 136C, 
100.34  and 136D, and sections 275.124 to 275.16, and sections 275.70 to 
100.35  275.74, such county auditor shall extend only such amount of 
100.36  taxes as the limitations herein prescribed will permit; 
101.1   provided, if such levy shall include any levy for the payment of 
101.2   bonded indebtedness or judgments, such levies for bonded 
101.3   indebtedness or judgments shall be extended in full, and the 
101.4   remainder of the levies shall be reduced so that the total 
101.5   thereof, including levies for bonds and judgments, shall not 
101.6   exceed such amount as the limitations herein prescribed will 
101.7   permit.  
101.8      Sec. 9.  [275.70] [LEVY LIMITATIONS; DEFINITIONS.] 
101.9      Subdivision 1.  [APPLICATION.] For the purposes of sections 
101.10  275.70 to 275.74, the following terms shall have these meanings, 
101.11  unless provided otherwise. 
101.12     Subd. 2.  [IMPLICIT PRICE DEFLATOR.] "Implicit price 
101.13  deflator" means the implicit price deflator for government 
101.14  purchases of goods and services for state and local governments 
101.15  prepared by the bureau of economic analysis of the United States 
101.16  Department of Commerce for the 12-month period ending in June of 
101.17  the levy year. 
101.18     Subd. 3.  [LOCAL GOVERNMENTAL UNIT.] "Local governmental 
101.19  unit" means a county or a statutory or home rule charter city. 
101.20     Subd. 4.  [POPULATION; NUMBER OF HOUSEHOLDS.] "Population" 
101.21  or "number of households" means the population or number of 
101.22  households for the local governmental unit as established by the 
101.23  last federal census, by a census taken under section 275.14, or 
101.24  by an estimate made by the metropolitan council or by the state 
101.25  demographer under section 4A.02, whichever is most recent as to 
101.26  the stated date of the count or estimate up to and including 
101.27  July 1 of the current levy year. 
101.28     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
101.29  portions of ad valorem taxes levied by a local governmental unit 
101.30  for the following purposes or in the following manner: 
101.31     (1) to pay the costs of the principal and interest on 
101.32  bonded indebtedness or to reimburse for the amount of liquor 
101.33  store revenues used to pay the principal and interest due on 
101.34  municipal liquor store bonds in the year preceding the year for 
101.35  which the levy limit is calculated; 
101.36     (2) to pay the costs of principal and interest on 
102.1   certificates of indebtedness issued for any corporate purpose 
102.2   except for the following: 
102.3      (i) tax anticipation or aid anticipation certificates of 
102.4   indebtedness; 
102.5      (ii) certificates of indebtedness issued under sections 
102.6   298.28 and 298.282; 
102.7      (iii) certificates of indebtedness used to fund current 
102.8   expenses or to pay the costs of extraordinary expenditures that 
102.9   result from a public emergency; or 
102.10     (iv) certificates of indebtedness used to fund an 
102.11  insufficiency in tax receipts or an insufficiency in other 
102.12  revenue sources; 
102.13     (3) to provide for the bonded indebtedness portion of 
102.14  payments made to another political subdivision of the state of 
102.15  Minnesota; 
102.16     (4) to fund payments made to the Minnesota state armory 
102.17  building commission under section 193.145, subdivision 2, to 
102.18  retire the principal and interest on armory construction bonds; 
102.19  and 
102.20     (5) property taxes approved by voters which are levied 
102.21  against the referendum market value as provided under section 
102.22  275.61. 
102.23     Sec. 10.  [275.71] [LEVY LIMITS.] 
102.24     Subdivision 1.  [LIMIT ON LEVIES.] Notwithstanding any 
102.25  other provision of law or municipal charter to the contrary 
102.26  which authorizes ad valorem taxes in excess of the limits 
102.27  established by sections 275.70 to 275.74, the provision of this 
102.28  section shall apply to taxes levied in 1997 and 1998 only by 
102.29  local governmental units for all purposes other than those for 
102.30  which special levies and special assessments are made. 
102.31     Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
102.32  local governmental unit for taxes levied in 1997 shall be equal 
102.33  to the sum of: 
102.34     (1) the amount the local governmental unit levied in 1996, 
102.35  less any amount levied for debt, as reported to the department 
102.36  of revenue under section 275.62, subdivision 1, clause (1), and 
103.1   less any tax levied in 1996 against market value as provided for 
103.2   in section 275.61; 
103.3      (2) the amount of aids the local governmental unit was 
103.4   certified to receive in calendar year 1997 under sections 
103.5   477A.011 to 477A.03 before any reductions for state tax 
103.6   increment financing aid under section 273.1399, subdivision 5; 
103.7      (3) the amount of homestead and agricultural credit aid the 
103.8   local governmental unit was certified to receive under section 
103.9   273.1398 in calendar year 1997 before any reductions for tax 
103.10  increment financing aid under section 273.1399, subdivision 5; 
103.11     (4) the amount of local performance aid the local 
103.12  governmental unit was certified to receive in calendar year 1997 
103.13  under section 477A.05; and 
103.14     (5) the amount of any payments certified to the local 
103.15  government unit in 1997 under sections 298.28 and 298.282. 
103.16     If a governmental unit was not required to report under 
103.17  section 275.62 for taxes levied in 1997, the commissioner shall 
103.18  request information on levies used for debt from the local 
103.19  governmental unit and adjust its levy limit base accordingly. 
103.20     (b) The levy limit base for a local governmental unit for 
103.21  taxes levied in 1998 is limited to its adjusted levy limit base 
103.22  in the previous year, subject to any adjustments under section 
103.23  275.72. 
103.24     Subd. 3.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 
103.25  1997 and 1998, the adjusted levy limit is equal to the levy 
103.26  limit base computed under subdivision 2, increased by: 
103.27     (1) a percentage equal to the percentage growth in the 
103.28  implicit price deflator; and 
103.29     (2) a percentage equal to the percentage increase in number 
103.30  of households, if any, for the most recent 12-month period for 
103.31  which data is available. 
103.32     Subd. 4.  [PROPERTY TAX LEVY LIMIT.] For taxes levied in 
103.33  1997 and 1998, the property tax levy limit for a local 
103.34  governmental unit is equal to its adjusted levy limit base 
103.35  determined under subdivision 3, reduced by the sum of (a) the 
103.36  total amount of aids that the local governmental unit is 
104.1   certified to receive under sections 477A.011 to 477A.014, (b) 
104.2   homestead and agricultural aids it is certified to receive under 
104.3   section 273.1398, (c) local performance aid it is certified to 
104.4   receive under section 477A.05, and (d) taconite aids under 
104.5   sections 298.28 and 298.282 including any aid which was required 
104.6   to be placed in a special fund for expenditure in the next 
104.7   succeeding year.  If a local governmental unit imposes an 
104.8   additional levy under section 275.73, its levy under this limit 
104.9   shall be split between an amount levied on net tax capacity and 
104.10  an amount levied on referendum market value as provided for 
104.11  under subdivision 5. 
104.12     Subd. 5.  [LEVY LIMITS WITH A REFERENDUM LEVY.] In a year 
104.13  that a local governmental unit imposes an additional levy under 
104.14  section 275.73, the amount it levied in the previous year under 
104.15  subdivision 4 shall be levied against net tax capacity.  Any 
104.16  additional levy under this section or section 275.73 shall be 
104.17  levied against referendum market value. 
104.18     Subd. 6.  [LEVIES IN EXCESS OF LEVY LIMITS.] If the levy 
104.19  made by a city exceeds the levy limit provided in sections 
104.20  275.70 to 275.74, except when the excess levy is due to the 
104.21  rounding of the rate in accordance with section 275.28, the 
104.22  county auditor shall only extend the amount of taxes permitted 
104.23  under sections 6 to 9 and 11, as provided for in section 275.16. 
104.24     Sec. 11.  [275.72] [LEVY LIMIT ADJUSTMENTS FOR 
104.25  CONSOLIDATION AND ANNEXATION.] 
104.26     Subdivision 1.  [ADJUSTMENTS FOR CONSOLIDATION.] If all of 
104.27  the area included in two or more local governmental units is 
104.28  consolidated, merged, or otherwise combined to constitute a 
104.29  single governmental unit, the levy limit base for the resulting 
104.30  governmental unit in the first levy year in which the 
104.31  consolidation is effective shall be equal to (a) the highest tax 
104.32  rate in any of the merging governmental units in the previous 
104.33  year multiplied by the net tax capacity of all the merging 
104.34  governmental units in the previous year, minus (b) the sum of 
104.35  all levies in the merging governmental units in the previous 
104.36  year that qualify as special levies under section 275.70, 
105.1   subdivision 3. 
105.2      Subd. 2.  [ADJUSTMENTS FOR ANNEXATION.] If a local 
105.3   governmental unit increases its tax base through annexation of 
105.4   an area which is not the area of an entire local governmental 
105.5   unit, the levy limit base of the local governmental unit in the 
105.6   first year in which the annexation is effective shall be equal 
105.7   to its adjusted levy limit base from the previous year 
105.8   multiplied by the ratio of the net tax capacity in the local 
105.9   governmental unit after the annexation compared to its net tax 
105.10  capacity before the annexation. 
105.11     Subd. 3.  [TRANSFER OF GOVERNMENTAL FUNCTIONS.] If a 
105.12  function or service of one local governmental unit is 
105.13  transferred to another local governmental unit, the levy limits 
105.14  established under section 275.71 shall be adjusted by the 
105.15  commissioner of revenue in such manner so as to fairly and 
105.16  equitably reflect the reduced or increased property tax burden 
105.17  resulting from the transfer.  The aggregate of the adjusted 
105.18  limitations shall not exceed the aggregate of the limitations 
105.19  prior to adjustment. 
105.20     Subd. 4.  [EFFECTIVE DATE FOR LEVY LIMITS PURPOSES.] 
105.21  Annexations, mergers, and shifts in services and functional 
105.22  responsibilities that are effective by June 30 of the levy year 
105.23  are included in the calculation of the levy limit for that levy 
105.24  year.  Annexations, mergers, and shifts in services and 
105.25  functional responsibilities that are effective after June 30 of 
105.26  a levy year are not included in the calculation of the levy 
105.27  limit until the subsequent levy year. 
105.28     Sec. 12.  [275.73] [ELECTIONS FOR ADDITIONAL LEVIES 
105.29  ASSESSED ON MARKET VALUES.] 
105.30     Subdivision 1.  [ADDITIONAL LEVY AUTHORIZATION.] 
105.31  Notwithstanding the provisions of sections 275.70 to 275.72, but 
105.32  subject to other law or charter provisions establishing other 
105.33  limitations on the amount of property taxes a local governmental 
105.34  unit may levy, a local governmental unit may levy an additional 
105.35  levy in any amount which is approved by the majority of voters 
105.36  of the governmental unit voting on the question at a general or 
106.1   special election.  Any levy authorized under this section shall 
106.2   be levied against the referendum market value as provided in 
106.3   sections 275.71, subdivision 5, and 275.61.  When the governing 
106.4   body of the local governmental unit resolves to increase the 
106.5   levy pursuant to this section, it shall provide for submission 
106.6   of the proposition of an additional levy at a general or special 
106.7   election.  Notice of the election shall be given in the manner 
106.8   required by law.  The notice shall state the purpose and the 
106.9   maximum yearly amount of the additional levy. 
106.10     Subd. 2.  [LEVY EFFECTIVE DATE.] An additional levy 
106.11  approved under subdivision 1 at a general or special election 
106.12  held prior to October 1 in any levy year may be levied in that 
106.13  same levy year and subsequent levy years.  An additional levy 
106.14  approved under subdivision 1 at a general or special election 
106.15  held after September 30 in any levy year shall not be levied in 
106.16  that same levy but may be levied in subsequent levy years. 
106.17     Sec. 13.  [275.74] [STATE REGULATION OF LEVIES.] 
106.18     The commissioner of revenue shall make all necessary 
106.19  calculations for determining levy limits for local governmental 
106.20  units and notify the affected governmental units of their levy 
106.21  limits directly by August 1 of each levy year.  In addition, the 
106.22  commissioner of revenue shall notify all county auditors of the 
106.23  levy limits imposed on local governmental units located within 
106.24  their boundaries so that they may fix the levies as required in 
106.25  section 275.16.  The local governmental units shall provide the 
106.26  commissioner of revenue with all information that the 
106.27  commissioner deems necessary to make the calculations provided 
106.28  for in sections 275.70 to 275.73. 
106.29     Sec. 14.  Minnesota Statutes 1996, section 276.04, 
106.30  subdivision 2, is amended to read: 
106.31     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
106.32  shall provide for the printing of the tax statements.  The 
106.33  commissioner of revenue shall prescribe the form of the property 
106.34  tax statement and its contents.  The statement must contain a 
106.35  tabulated statement of the dollar amount due to each taxing 
106.36  authority and the state from the parcel of real property for 
107.1   which a particular tax statement is prepared.  The dollar 
107.2   amounts due the county, state general education tax, the 
107.3   remaining school district amount, township or municipality, and 
107.4   the total of the metropolitan special taxing districts as 
107.5   defined in section 275.065, subdivision 3, paragraph (i), school 
107.6   district excess referenda levy, remaining school district levy, 
107.7   and the total of other voter approved referenda levies based on 
107.8   market value under section 275.61 must be separately stated.  
107.9   The amounts due all other special taxing districts, if any, may 
107.10  be aggregated.  For the purposes of this subdivision, "school 
107.11  district excess referenda levy" means school district taxes for 
107.12  operating purposes approved at referenda, including those taxes 
107.13  based on net tax capacity as well as those based on market 
107.14  value. "School district excess referenda levy" does not include 
107.15  school district taxes for capital expenditures approved at 
107.16  referendums or school district taxes to pay for the debt service 
107.17  on bonds approved at referenda.  The amount of the tax on 
107.18  contamination value imposed under sections 270.91 to 270.98, if 
107.19  any, must also be separately stated.  The dollar amounts, 
107.20  including the dollar amount of any special assessments, may be 
107.21  rounded to the nearest even whole dollar.  For purposes of this 
107.22  section whole odd-numbered dollars may be adjusted to the next 
107.23  higher even-numbered dollar.  The amount of market value 
107.24  excluded under section 273.11, subdivision 16, if any, must also 
107.25  be listed on the tax statement.  The statement shall include the 
107.26  following sentence sentences, printed in upper case letters in 
107.27  boldface print:  "EVEN THOUGH THE STATE OF MINNESOTA DOES NOT 
107.28  RECEIVE ANY PROPERTY TAX REVENUES, IT DETERMINES THE AMOUNT OF 
107.29  THE GENERAL EDUCATION TAX LEVY.  THE STATE OF MINNESOTA REDUCES 
107.30  YOUR PROPERTY TAX BY PAYING CREDITS AND REIMBURSEMENTS TO LOCAL 
107.31  UNITS OF GOVERNMENT."  
107.32     (b) The property tax statements for manufactured homes and 
107.33  sectional structures taxed as personal property shall contain 
107.34  the same information that is required on the tax statements for 
107.35  real property.  
107.36     (c) Real and personal property tax statements must contain 
108.1   the following information in the order given in this paragraph.  
108.2   The information must contain the current year tax information in 
108.3   the right column with the corresponding information for the 
108.4   previous year in a column on the left: 
108.5      (1) the property's estimated market value under section 
108.6   273.11, subdivision 1; 
108.7      (2) the property's taxable market value after reductions 
108.8   under section 273.11, subdivisions 1a and 16; 
108.9      (3) the property's gross tax, calculated by multiplying the 
108.10  property's gross tax capacity times the total local tax rate and 
108.11  adding the property's total property tax to the result the sum 
108.12  of the aids enumerated in clause (4); 
108.13     (4) a total of the following aids: 
108.14     (i) education aids payable under chapters 124 and 124A; 
108.15     (ii) local government aids for cities, towns, and counties 
108.16  under chapter 477A; and 
108.17     (iii) disparity reduction aid under section 273.1398; 
108.18     (5) for homestead residential and agricultural properties, 
108.19  the homestead and agricultural credit aid apportioned to the 
108.20  property.  This amount is obtained by multiplying the total 
108.21  local tax rate by the difference between the property's gross 
108.22  and net tax capacities under section 273.13.  This amount must 
108.23  be separately stated and identified as "homestead and 
108.24  agricultural credit."  For purposes of comparison with the 
108.25  previous year's amount for the statement for taxes payable in 
108.26  1990, the statement must show the homestead credit for taxes 
108.27  payable in 1989 under section 273.13, and the agricultural 
108.28  credit under section 273.132 for taxes payable in 1989; 
108.29     (6) (5) any credits received under sections 273.119; 
108.30  273.123; 273.135; 273.1391; 273.1398, subdivision 4; 469.171; 
108.31  and 473H.10, except that the amount of credit received under 
108.32  section 273.135 must be separately stated and identified as 
108.33  "taconite tax relief"; and 
108.34     (7) (6) the net tax payable in the manner required in 
108.35  paragraph (a). 
108.36     (d) If the county uses envelopes for mailing property tax 
109.1   statements and if the county agrees, a taxing district may 
109.2   include a notice with the property tax statement notifying 
109.3   taxpayers when the taxing district will begin its budget 
109.4   deliberations for the current year, and encouraging taxpayers to 
109.5   attend the hearings.  If the county allows notices to be 
109.6   included in the envelope containing the property tax statement, 
109.7   and if more than one taxing district relative to a given 
109.8   property decides to include a notice with the tax statement, the 
109.9   county treasurer or auditor must coordinate the process and may 
109.10  combine the information on a single announcement.  
109.11     The commissioner of revenue shall certify to the county 
109.12  auditor the actual or estimated aids enumerated in clauses (3) 
109.13  and clause (4) that local governments will receive in the 
109.14  following year.  In the case of a county containing a city of 
109.15  the first class, for taxes levied in 1991, and for all counties 
109.16  for taxes levied in 1992 and thereafter, The commissioner must 
109.17  certify this amount by September 1 of each year.  
109.18     Sec. 15.  Minnesota Statutes 1996, section 383A.75, 
109.19  subdivision 3, is amended to read: 
109.20     Subd. 3.  [DUTIES.] The committee is authorized to and 
109.21  shall meet from time to time to make appropriate recommendations 
109.22  for the efficient and effective use of property tax dollars 
109.23  raised by the jurisdictions for programs, buildings, and 
109.24  operations.  In addition, the committee shall: 
109.25     (1) identify trends and factors likely to be driving budget 
109.26  outcomes over the next five years with recommendations for how 
109.27  the jurisdictions should manage those trends and factors to 
109.28  increase efficiency and effectiveness; 
109.29     (2) agree, by September October 1 of each year, on the 
109.30  appropriate level of overall property tax levy for the three 
109.31  jurisdictions and publicly report such to the governing bodies 
109.32  of each jurisdiction for ratification or modification by 
109.33  resolution; 
109.34     (3) plan for the joint truth-in-taxation hearings under 
109.35  section 275.065, subdivision 8; and 
109.36     (4) identify, by December 31 of each year, areas of the 
110.1   budget to be targeted in the coming year for joint review to 
110.2   improve services or achieve efficiencies. 
110.3      In carrying out its duties, the committee shall consult 
110.4   with public employees of each jurisdiction and with other 
110.5   stakeholders of the city, county, and school district, as 
110.6   appropriate. 
110.7      Sec. 16.  Laws 1993, chapter 375, article 7, section 29, is 
110.8   amended to read: 
110.9      Sec. 29.  [EFFECTIVE DATE.] 
110.10     Sections 1, 6 to 8, 13, 15 to 25, 27, and 28 are effective 
110.11  for taxes levied in 1993, payable in 1994 and thereafter.  
110.12     Section 3, subdivision 5, and the provisions of sections 9 
110.13  to 11 relating to regional library districts are effective for 
110.14  property taxes levied in 1994, payable in 1995, and thereafter.  
110.15  The other provisions of sections 9 to 11 are effective for 
110.16  property taxes levied in 1993, payable in 1994 and thereafter.  
110.17     Sections 12 and 14 are effective the day following final 
110.18  enactment and without local approval, as provided in Minnesota 
110.19  Statutes, section 645.023, subdivision 1, clause (a), and shall 
110.20  expire after December 31, 1997.  
110.21     Section 26 is effective beginning with aids payable in 
110.22  calendar year 1993. 
110.23     Sec. 17.  [EFFECTIVE DATE.] 
110.24     Sections 1 to 3 are effective for notices prepared 
110.25  beginning in 1997 for taxes payable in 1998 and thereafter. 
110.26     Section 4 is effective for newspaper advertisements 
110.27  prepared beginning in 1997 for taxes payable in 1998, and 
110.28  thereafter. 
110.29     Sections 5 to 7 are effective for hearings held in 1997 and 
110.30  thereafter. 
110.31     Sections 8 to 13 are effective for property taxes levied in 
110.32  1997 and 1998, payable in 1998 and 1999 only. 
110.33     Section 14 is effective for property tax statements 
110.34  prepared in 1998 and thereafter. 
110.35                             ARTICLE 6
110.36                           STATE MANDATES
111.1      Section 1.  [3.986] [DEFINITIONS.] 
111.2      Subdivision 1.  [SCOPE.] The terms used in sections 3.986 
111.3   to 3.989 have the meanings given them in this section. 
111.4      Subd. 2.  [COSTS MANDATED BY THE STATE.] (a) "Costs 
111.5   mandated by the state" means increased costs that a political 
111.6   subdivision is required to incur as a result of: 
111.7      (1) a law enacted after June 30, 1997, that mandates a new 
111.8   program or an increased level of service of an existing program; 
111.9      (2) an executive order issued after June 30, 1997, that 
111.10  mandates a new program; 
111.11     (3) an executive order issued after June 30, 1997, that 
111.12  implements or interprets a state law and, by its implementation 
111.13  or interpretation, increases program levels above the levels 
111.14  required before July 1, 1997; 
111.15     (4) a law enacted after June 30, 1997, or executive order 
111.16  issued after June 30, 1997, that implements or interprets 
111.17  federal law and, by its implementation or interpretation, 
111.18  increases program or service levels above the levels required by 
111.19  the federal law; 
111.20     (5) a law enacted after June 30, 1997, or executive order 
111.21  issued after June 30, 1997, that implements or interprets a 
111.22  statute or amendment adopted or enacted pursuant to the approval 
111.23  of a statewide ballot measure by the voters and, by its 
111.24  implementation or interpretation, increases program or service 
111.25  levels above the levels required by the ballot measure; 
111.26     (6) a law enacted after June 30, 1997, or executive order 
111.27  issued after June 30, 1997, that removes an option previously 
111.28  available to political subdivisions and thus increases program 
111.29  or service levels or prohibits a specific activity and so forces 
111.30  political subdivisions to use a more costly alternative to 
111.31  provide a mandated program or service; 
111.32     (7) a law enacted after June 30, 1997, or executive order 
111.33  issued after June 30, 1997, that requires that an existing 
111.34  program or service be provided in a shorter time period and thus 
111.35  increases the cost of the program or service; 
111.36     (8) a law enacted after June 30, 1997, or executive order 
112.1   issued after June 30, 1997, that adds new requirements to an 
112.2   existing optional program or service and thus increases the cost 
112.3   of the program or service because the political subdivisions 
112.4   have no reasonable alternative other than to continue the 
112.5   optional program; 
112.6      (9) a law enacted after June 30, 1997, or executive order 
112.7   issued after June 30, 1997, that creates new revenue losses by 
112.8   new property or sales and use tax exemptions; 
112.9      (10) a law enacted after June 30, 1997, or executive order 
112.10  issued after June 30, 1997, that requires costs previously 
112.11  incurred at local option that have subsequently been mandated by 
112.12  the state; or 
112.13     (11) a law enacted or an executive order issued after June 
112.14  30, 1997, that requires payment of a new fee or increases the 
112.15  amount of an existing fee. 
112.16     (b) When state law or executive actions are intended to 
112.17  achieve compliance with federal law or court orders, state 
112.18  mandates shall be determined as follows:  
112.19     (1) if the federal law or court order is discretionary, the 
112.20  state law or executive action is a state mandate; 
112.21     (2) if the state law or executive action exceeds what is 
112.22  required by the federal law or court order, only the provisions 
112.23  of the state action that exceed the federal requirements are a 
112.24  state mandate; and 
112.25     (3) if the state statutory or executive action does not 
112.26  exceed what is required by the federal statute or regulation or 
112.27  court order, the state action is not a state mandate.  
112.28     (c) Costs mandated by the state include the costs of:  
112.29     (1) a rule issued after June 30, 1997, that mandates a new 
112.30  responsibility; and 
112.31     (2) a rule issued after June 30, 1997, that implements or 
112.32  interprets a state statute, and by doing so increases program 
112.33  levels above the levels required before June 30, 1997. 
112.34     Subd. 3.  [EXECUTIVE ORDER.] "Executive order" means an 
112.35  order, plan, requirement, or rule issued by the governor, an 
112.36  official serving at the pleasure of the governor, or an agency, 
113.1   department, board, or commission of state government.  Executive 
113.2   order does not include an order, plan, requirement, or rule 
113.3   issued by a regional water quality control board.  
113.4      Subd. 4.  [MANDATE.] A "mandate" is a requirement imposed 
113.5   upon a political subdivision in a law by a state agency or by 
113.6   judicial authority that, if not complied with, results in (1) 
113.7   civil liability, (2) criminal penalty, or (3) administrative 
113.8   sanctions such as reduction or loss of funding. 
113.9      Subd. 5.  [POLITICAL SUBDIVISION.] A "political 
113.10  subdivision" is a county, home rule charter or statutory city, 
113.11  town, or other taxing district or municipal corporation.  
113.12     Subd. 6.  [REQUIRING AN INCREASED LEVEL OF 
113.13  SERVICE.] "Requiring an increased level of service" includes 
113.14  requiring that an existing service be provided in a shorter time.
113.15     Subd. 7.  [RULE.] "Rule" means a rule, order, or standard 
113.16  of general application adopted by a state agency to implement, 
113.17  interpret, or make specific the law it enforces or administers 
113.18  or to govern its procedure.  Rule includes an amendment to a 
113.19  rule.  Rule does not include a rule that relates only to the 
113.20  internal management of a state agency.  
113.21     Subd. 8.  [SAVINGS.] "Savings" includes budget reductions 
113.22  and the freeing of staff or resources to be reassigned to a 
113.23  political subdivision's other areas of concern.  
113.24     Sec. 2.  [3.987] [FISCAL NOTES FOR STATE-MANDATED ACTIONS.] 
113.25     Subdivision 1.  [STATE AND LOCAL MANDATES OFFICE.] When the 
113.26  state proposes to mandate that a political subdivision take an 
113.27  action, and when reasonable compliance with that action would 
113.28  force the political subdivision to incur costs mandated by the 
113.29  state, a fiscal note must be prepared as provided in section 
113.30  3.98, subdivision 2, and made available to the public upon 
113.31  request.  If the action is among the exceptions listed in 
113.32  section 3.988, a fiscal note need not be prepared.  
113.33     An office of state and local mandates in the department of 
113.34  finance is created.  The commissioner shall make a reasonable 
113.35  and timely determination of the estimated and actual financial 
113.36  effects on each political subdivision of each program mandated 
114.1   by law including each rulemaking proposed by an administrative 
114.2   agency.  The commissioner of finance may require the 
114.3   commissioner of the appropriate administrative agency of the 
114.4   state to supply in a timely manner any information determined by 
114.5   the division to be necessary to determine local financial 
114.6   effects.  The commissioner shall convey the requested 
114.7   information to the commissioner of finance with a signed 
114.8   statement to the effect that the information is accurate and 
114.9   complete to the best of the commissioner's ability.  
114.10     The commissioner, when requested, shall update the 
114.11  determination of financial effects based on either actual cost 
114.12  figures or improved estimates or both.  
114.13     Subd. 2.  [MANDATE EXPLANATIONS.] Any bill introduced in 
114.14  the legislature after June 30, 1997, that seeks to impose 
114.15  program or financial mandates on political subdivisions must 
114.16  include an attachment that gives appropriate responses to the 
114.17  following guidelines.  It must state and list:  
114.18     (1) the policy goals that are sought to be attained, the 
114.19  performance standards that are to be imposed, and an explanation 
114.20  why the goals and standards will best be served by requiring 
114.21  compliance by political subdivisions; 
114.22     (2) performance standards that will allow political 
114.23  subdivisions flexibility and innovation of method in achieving 
114.24  these goals; 
114.25     (3) the reasons for each prescribed standard and the 
114.26  process by which each standard governs inputs such as staffing 
114.27  and other administrative aspects of the program; 
114.28     (4) the sources of additional revenue, in addition to 
114.29  existing funding for similar programs, that are directly linked 
114.30  to imposition of the mandates that will provide adequate and 
114.31  stable funding for their requirements; 
114.32     (5) what input has been obtained to ensure that the 
114.33  implementing agencies have the capacity to carry out the 
114.34  delegated responsibilities; and 
114.35     (6) the reasons why less intrusive measures such as 
114.36  financial incentives or voluntary compliance would not yield the 
115.1   equity, efficiency, or desired level of statewide uniformity in 
115.2   the proposed program.  
115.3      Subd. 3.  [LOCAL INVOLVEMENT; LAWS.] Any bill introduced in 
115.4   the legislature after June 30, 1997, that seeks to impose a 
115.5   program or financial mandate on political subdivisions must 
115.6   include as an attachment a description of the efforts put forth, 
115.7   if any, to involve political subdivisions in the creation or 
115.8   development of the proposed mandate.  
115.9      Subd. 4.  [NO MANDATE RESTRICTION.] Except as specifically 
115.10  provided by this article, nothing in this article restricts or 
115.11  eliminates the authority of the state to create or impose 
115.12  programs by law upon political subdivisions. 
115.13     Sec. 3.  [3.988] [EXCEPTIONS TO FISCAL NOTES.] 
115.14     Subdivision 1.  [COSTS RESULTING FROM INFLATION.] A fiscal 
115.15  note need not be prepared for increases in the cost of providing 
115.16  an existing service if the increases result directly from 
115.17  inflation.  "Resulting directly from inflation" means 
115.18  attributable to maintaining an existing level of service rather 
115.19  than increasing the level of service.  A cost-of-living increase 
115.20  in welfare benefits is an example of a cost resulting directly 
115.21  from inflation.  
115.22     Subd. 2.  [COSTS NOT THE RESULT OF A NEW PROGRAM OR 
115.23  INCREASED SERVICE.] A fiscal note need not be prepared for 
115.24  increased local costs that do not result from a new program or 
115.25  an increased level of service. 
115.26     Subd. 3.  [MISCELLANEOUS EXCEPTIONS.] A fiscal note or an 
115.27  attachment as provided in section 3.987, subdivision 2, need not 
115.28  be prepared for the cost of a mandated action if the law, 
115.29  including a rulemaking, containing the mandate:  
115.30     (1) accommodates a specific local request; 
115.31     (2) results in no new local government duties; 
115.32     (3) leads to revenue losses from exemptions to taxes; 
115.33     (4) provided only clarifying or conforming, nonsubstantive 
115.34  charges on local government; 
115.35     (5) imposes additional net local costs that are minor (less 
115.36  than $200 for any single local government if the mandate does 
116.1   not apply statewide or less than one-tenth of a mill times the 
116.2   entire value of taxable property in the state if the mandate is 
116.3   statewide) and do not cause a financial burden on local 
116.4   government; 
116.5      (6) is a law or executive order enacted before July 1, 
116.6   1997, or a rule initially implementing a law enacted before July 
116.7   1, 1997; 
116.8      (7) implements something other than a law or executive 
116.9   order, such as a federal, court, or voter-approved mandate; 
116.10     (8) defines a new crime or redefines an existing crime or 
116.11  infraction; 
116.12     (9) results in savings that equal or exceed costs; 
116.13     (10) requires the holding of elections; 
116.14     (11) ensures due process or equal protection; 
116.15     (12) provides for the notification and conduct of public 
116.16  meetings; 
116.17     (13) establishes the procedures for administrative and 
116.18  judicial review of actions taken by political subdivisions; 
116.19     (14) protects the public from malfeasance, misfeasance, or 
116.20  nonfeasance by officials of political subdivisions; 
116.21     (15) relates directly to financial administration, 
116.22  including the levy, assessment, and collection of taxes; 
116.23     (16) relates directly to the preparation and submission of 
116.24  financial audits necessary to the administration of state laws; 
116.25  or 
116.26     (17) requires uniform standards to apply to public and 
116.27  private institutions without differentiation. 
116.28     Sec. 4.  [3.989] [REIMBURSEMENT TO LOCAL POLITICAL 
116.29  SUBDIVISIONS FOR COSTS OF STATE MANDATES.] 
116.30     Subdivision 1.  [DEFINITIONS.] In this section: 
116.31     (1) "Class A state mandates" means those laws under which 
116.32  the state mandates to political subdivisions their 
116.33  participation, the organizational structure of the program, and 
116.34  the procedural regulations under which the law must be 
116.35  administered; and 
116.36     (2) "Class B state mandates" means those mandates that 
117.1   allow the political subdivisions to opt for administration of a 
117.2   law with program elements mandated beforehand and with an 
117.3   assured revenue level from the state of 90 percent of full 
117.4   program and administrative costs.  
117.5      Subd. 2.  [REPORT.] The commissioner of finance shall 
117.6   prepare by September 1, 1998, and by September 1 of each year 
117.7   thereafter, a report by political subdivisions of the costs of 
117.8   class A state mandates established after June 30, 1997.  
117.9      The commissioner shall annually include the statewide total 
117.10  of the statement of costs of class A mandates as a notation in 
117.11  the state budget for the next fiscal year.  
117.12     Subd. 3.  [CERTAIN POLITICAL SUBDIVISIONS; REPORT.] The 
117.13  political subdivisions that have opted to administer class B 
117.14  state mandates shall report to the commissioner of finance by 
117.15  September 1, 1998, and by September 1 of each year thereafter, 
117.16  identifying each instance when revenue for a class B state 
117.17  mandate has fallen below 85 percent of the total cost of the 
117.18  program and the political subdivision intends to cease 
117.19  administration of the program.  
117.20     The commissioner shall forward a copy of the report to the 
117.21  chairs of the senate finance committee and the house 
117.22  appropriations committee for proposed inclusion of the shortfall 
117.23  as a line item appropriation in the state budget for the next 
117.24  fiscal year.  
117.25     The political subdivision may exercise its option to cease 
117.26  administration only if the legislature has failed to include the 
117.27  shortfall as an appropriation in the state budget for the next 
117.28  fiscal year.  
117.29     Subd. 4.  [EXEMPTIONS.] Laws and executive orders 
117.30  enumerated in section 3.988 are exempted from this section. 
117.31     Sec. 5.  [14.431] [PERIODIC REVIEW OF ADMINISTRATIVE 
117.32  RULES.] 
117.33     Subdivision 1.  [DEFINITIONS.] The terms defined in section 
117.34  3.986, subdivision 1, apply to this section. 
117.35     Subd. 2.  [SIGNIFICANT FINANCIAL IMPACT.] The commissioner 
117.36  of finance shall review, every five years, rules adopted after 
118.1   June 30, 1997, that have significant financial impact upon 
118.2   political subdivisions.  In this section, "significant financial 
118.3   impact" means requiring local political subdivisions to expand 
118.4   existing services, employ additional personnel, or increase 
118.5   local expenditures.  The commissioner shall determine the costs 
118.6   and benefits of each rulemaking and submit a report to the 
118.7   legislative coordinating commission with its opinion, if any, 
118.8   for the continuation, modification, or elimination of the rules 
118.9   in the rulemaking.  
118.10     Sec. 6.  Minnesota Statutes 1996, section 477A.014, 
118.11  subdivision 4, is amended to read: 
118.12     Subd. 4.  [COSTS.] The director of the office of strategic 
118.13  and long-range planning shall annually bill the commissioner of 
118.14  revenue for one-half of the costs incurred by the state 
118.15  demographer in the preparation of materials required by section 
118.16  4A.02.  The state auditor shall bill the commissioner of revenue 
118.17  for the costs of the services provided by the government 
118.18  information division and the parts of the constitutional office 
118.19  that are related to the government information function, not to 
118.20  exceed $217,000 in fiscal year 1992 and $217,000 in fiscal year 
118.21  1993 and thereafter.  The commissioner of administration shall 
118.22  bill the commissioner of revenue for the costs of the local 
118.23  government records program and the intergovernmental information 
118.24  systems activity, not to exceed $201,100 in fiscal year 1992 and 
118.25  $205,800 in fiscal year 1993 and thereafter.  The commissioner 
118.26  of employee relations shall bill the commissioner of revenue for 
118.27  the costs of administering the local government pay equity 
118.28  function, not to exceed $56,000 in fiscal year 1992 and $55,000 
118.29  in fiscal year 1993 and thereafter.  The commissioner of finance 
118.30  shall bill the commissioner of revenue for the cost of 
118.31  preparation of fiscal notes as required by section 3.987 only to 
118.32  the extent to which those costs exceed those costs incurred in 
118.33  fiscal year 1997 and for any other new costs attributable to the 
118.34  operation of the state and local mandates office required by 
118.35  section 3.987, not to exceed $....... in fiscal year 1998 and 
118.36  thereafter. 
119.1      Sec. 7.  [REPEALER.] 
119.2      Minnesota Statutes 1996, section 3.982, is repealed. 
119.3                              ARTICLE 7
119.4                        BUSINESS ACTIVITY TAX
119.5      Section 1.  Minnesota Statutes 1996, section 290.06, 
119.6   subdivision 1, is amended to read: 
119.7      Subdivision 1.  [COMPUTATION, CORPORATIONS.] The franchise 
119.8   tax imposed upon corporations shall be computed by applying to 
119.9   their taxable income the rate of 9.8 7.5 percent. 
119.10     Sec. 2.  [290.9401] [BUSINESS ACTIVITY TAX IMPOSED.] 
119.11     In addition to the taxes imposed by this chapter, a tax 
119.12  applies to a firm's tax base at a rate of .45 percent for 
119.13  taxable years beginning after December 31, 1997, and before 
119.14  January 1, 1999, and .55 percent for taxable years beginning 
119.15  after December 31, 1998. 
119.16     Sec. 3.  [290.9402] [DEFINITIONS.] 
119.17     Subdivision 1.  [SCOPE.] For purposes of sections 290.9401 
119.18  to 290.9407, the following terms have the meanings given. 
119.19     Subd. 2.  [BUSINESS ACTIVITY.] "Business activity" means 
119.20  sale or rental of property or the performance of services in 
119.21  this state to realize a gain, benefit, or advantage, whether 
119.22  direct or indirect.  Business activity includes activity in 
119.23  intrastate, interstate, and foreign commerce.  It does not 
119.24  include services provided by an employee to the employee's 
119.25  employer, service as the director of a corporation, or a casual 
119.26  transaction.  Although an activity may be incidental to another 
119.27  of the firm's business activities, each activity is a business 
119.28  activity for purposes of the tax. 
119.29     Subd. 3.  [BUSINESS INCOME.] "Business income" means net 
119.30  income.  For a firm other than a corporation, net income is 
119.31  limited to the portion derived from business activity. 
119.32     Subd. 4.  [CASUAL TRANSACTION.] "Casual transaction" means 
119.33  a transaction that (1) is not made in the ordinary course of 
119.34  repeated or successive transactions of a like character by the 
119.35  firm, and (2) is not incidental to the firm's regular business 
119.36  activity. 
120.1      Subd. 5.  [COMPENSATION.] (a) "Compensation" means all 
120.2   payments made to or for the benefit of employees, officers, or 
120.3   directors of the firm. 
120.4      (b) Compensation specifically includes, but is not limited 
120.5   to: 
120.6      (1) wages, salaries, bonuses, commissions, and other 
120.7   payments to employees, officers, or directors; 
120.8      (2) payments to state and federal unemployment compensation 
120.9   funds; 
120.10     (3) payments, including self-insurance, for workers' 
120.11  compensation; 
120.12     (4) payments to individuals not currently working; 
120.13     (5) payments to dependents and heirs of individuals because 
120.14  of current or past labor service provided by those individuals; 
120.15     (6) payments to a pension, retirement, profit-sharing, or 
120.16  deferred compensation program; and 
120.17     (7) payments for insurance, including self-insurance, for 
120.18  which employees are beneficiaries, including payments for health 
120.19  and welfare and noninsured benefit plans and payment of fees for 
120.20  administration of plans. 
120.21     (c) Compensation does not include: 
120.22     (1) discounts on the price of the firm's merchandise or 
120.23  services sold to employees, officers, or directors that are not 
120.24  available to other customers; or 
120.25     (2) payments to independent contractors. 
120.26     Subd. 6.  [FIRM.] "Firm" means a corporation, individual, 
120.27  partnership, limited liability company, trust, nonprofit 
120.28  corporation, joint venture, association, receiver, estate, or 
120.29  other person engaged in business activity. 
120.30     Subd. 7.  [PROPERTY.] "Property" includes all property, 
120.31  whether tangible or intangible, or whether real, personal, or 
120.32  mixed. 
120.33     Sec. 4.  [290.9403] [BUSINESSES SUBJECT TO TAX.] 
120.34     Subdivision 1.  [TAXABLE BUSINESSES.] The tax imposed by 
120.35  sections 290.9401 to 290.9407 applies to a firm engaged in 
120.36  business activity in Minnesota, unless an exemption under 
121.1   subdivisions 2 to 4 applies. 
121.2      Subd. 2.  [FOREIGN INSURANCE COMPANIES.] An insurance 
121.3   company as defined in section 290.05, subdivision 1, clause (c), 
121.4   is exempt. 
121.5      Subd. 3.  [GOVERNMENT ENTITIES.] A governmental entity, as 
121.6   defined in section 290.05, subdivision 1, clause (b), is exempt. 
121.7      Subd. 4.  [OTHER EXEMPT ENTITIES.] An organization exempt 
121.8   from taxation under Subchapter F of the Internal Revenue Code is 
121.9   exempt, except to the extent of tax base from activities 
121.10  generating: 
121.11     (1) unrelated business income, as defined in sections 511 
121.12  to 515 of the Internal Revenue Code; 
121.13     (2) taxable income of farmers' cooperatives under section 
121.14  521 of the Internal Revenue Code; 
121.15     (3) taxable income of political organizations under section 
121.16  527 of the Internal Revenue Code; and 
121.17     (4) taxable income of homeowners associations under section 
121.18  528 of the Internal Revenue Code. 
121.19     Sec. 5.  [290.9404] [TAX BASE.] 
121.20     Subdivision 1.  [GENERAL RULE.] The tax base of a firm for 
121.21  the taxable year equals the sum of the firm's business income 
121.22  and the amounts in subdivision 2, less: 
121.23     (1) the amounts in subdivision 3; 
121.24     (2) the capital acquisition deduction under subdivision 4; 
121.25  and 
121.26     (3) the exemption amount under subdivision 5. 
121.27     All amounts are the amounts paid or accrued for the taxable 
121.28  year under the firm's method of accounting for federal income 
121.29  tax purposes. 
121.30     Subd. 2.  [ADDITIONS.] The following amounts are added to 
121.31  business income to determine tax base: 
121.32     (1) the amount of the additions to federal taxable income 
121.33  under section 290.01, subdivision 19c, clauses (1) to (5), (8), 
121.34  (10), and (11); and 
121.35     (2) the amount of the following, to the extent deducted or 
121.36  excluded in computing federal taxable income and not added under 
122.1   clause (1): 
122.2      (i) depreciation, amortization, or immediate or accelerated 
122.3   write-off of the cost of tangible assets; 
122.4      (ii) royalties; 
122.5      (iii) dividends, except dividends representing reduction of 
122.6   premiums to policyholders of insurance companies; and 
122.7      (iv) interest including amounts paid, credited, or reserved 
122.8   by insurance companies as amounts necessary to fulfill the 
122.9   policy and other contract liability requirements of sections 805 
122.10  and 809 of the Internal Revenue Code; 
122.11     (3) the amount of compensation; and 
122.12     (4) capital gains of individuals from business activity to 
122.13  the extent excluded in computing federal taxable income. 
122.14     Subd. 3.  [SUBTRACTIONS.] To the extent included in federal 
122.15  taxable income, the following amounts are subtracted from income 
122.16  to determine tax base: 
122.17     (1) dividends received or deemed received, including the 
122.18  foreign dividend gross-up; 
122.19     (2) interest except amounts paid, credited, or reserved by 
122.20  insurance companies as amounts necessary to fulfill the policy 
122.21  and other contract liability requirements of sections 805 and 
122.22  809 of the Internal Revenue Code; 
122.23     (3) royalties; and 
122.24     (4) any capital loss not deducted in computing federal 
122.25  taxable income. 
122.26     Subd. 4.  [CAPITAL ACQUISITION DEDUCTION.] (a) The capital 
122.27  acquisition deduction equals the amount paid or accrued for the 
122.28  taxable year of the cost of tangible assets qualifying for 
122.29  depreciation, amortization, or immediate or accelerated 
122.30  deduction under the Internal Revenue Code.  Costs include 
122.31  fabrication and installation costs.  The deduction is the full 
122.32  amount paid or accrued, regardless of the amount allowed by 
122.33  federal law for the taxable year. 
122.34     (b) If the capital acquisition deduction exceeds the net 
122.35  amount under subdivisions 1 to 3 for the taxable year, the rest 
122.36  is a carryover capital acquisition deduction to the next three 
123.1   taxable years.  The entire amount must be taken in the earliest 
123.2   of the taxable years to which it may be carried. 
123.3      Subd. 5.  [EXEMPTION.] The exemption amount is $500,000.  
123.4   The exemption must be deducted after computation of tax base 
123.5   under subdivisions 1 to 4, but before apportionment under 
123.6   section 290.9405 for multistate businesses. 
123.7      Subd. 6.  [SPECIAL RULES FOR FINANCIAL INSTITUTIONS.] The 
123.8   tax base of a financial institution is the amount calculated 
123.9   under subdivisions 1 to 4, except that the addition under 
123.10  subdivision 2, clause (2), item (iv), and the subtraction under 
123.11  subdivision 3, clause (2), do not apply. 
123.12     Sec. 6.  [290.9405] [MULTISTATE FIRMS.] 
123.13     Subdivision 1.  [SCOPE.] The tax base of a firm from 
123.14  business activity carried on partly within and partly without 
123.15  Minnesota must be apportioned to Minnesota as provided in this 
123.16  section. 
123.17     Subd. 2.  [DEFINITIONS.] The definitions under section 
123.18  290.191 apply for purposes of this section. 
123.19     Subd. 3.  [APPORTIONMENT FORMULA.] (a) A firm must 
123.20  apportion its tax base to Minnesota as follows.  The total tax 
123.21  base, after deducting the capital acquisition deduction and 
123.22  exemption, must be multiplied by the percentage that the firm's 
123.23  sales made within Minnesota during the taxable year are of the 
123.24  firm's total sales wherever made. 
123.25     (b) A financial institution must apportion its tax base 
123.26  under paragraph (a) using the receipts factor for financial 
123.27  institutions. 
123.28     Subd. 4.  [RULES FOR UNITARY BUSINESSES.] (a) If a business 
123.29  activity conducted wholly within this state or partly within 
123.30  this state is part of a unitary business, the entire tax base of 
123.31  the unitary business is subject to apportionment under this 
123.32  section.  The provisions of section 290.17 apply to determine if 
123.33  a business activity is part of a unitary business. 
123.34     (b) Each firm that is part of a unitary business must file 
123.35  combined reports as the commissioner determines.  On the 
123.36  reports, all intercompany transactions between domestic firms 
124.1   that are part of the unitary business must be eliminated.  The 
124.2   entire tax base of the unitary business must be apportioned 
124.3   among the firms by using each firm's Minnesota sales factor in 
124.4   the numerator of the apportionment formula and the total sales 
124.5   factor of all firms in the unitary business in the denominator 
124.6   of the apportionment formula. 
124.7      (c) The tax base and apportionment factors of foreign firms 
124.8   which are part of a unitary business are not included in the tax 
124.9   base and apportionment factors of the unitary business.  A 
124.10  foreign firm must file on a separate return basis. 
124.11     Sec. 7.  [290.9406] [CREDITS.] 
124.12     Subdivision 1.  [INSURANCE PREMIUMS TAX.] The amount of 
124.13  premiums tax paid by the firm under sections 60A.15 and 299F.21 
124.14  to 299F.26 during the taxable year is a credit against the tax 
124.15  under section 290.9401. 
124.16     Subd. 2.  [MINNESOTACARE TAX.] The amount of gross revenue 
124.17  tax paid by the firm under sections 295.50 to 295.58 during the 
124.18  taxable year is a credit against the tax under section 290.9401. 
124.19     Sec. 8.  [290.9407] [ADMINISTRATION.] 
124.20     The commissioner of revenue shall prescribe forms and 
124.21  instructions for payment of the tax.  The tax is due and payable 
124.22  at the same times and under the same rules provided for the 
124.23  franchise tax on corporations. 
124.24     Sec. 9.  [REPEALER.] 
124.25     Minnesota Statutes 1996, sections 290.0921; and 290.0922, 
124.26  are repealed. 
124.27     Sec. 10.  [EFFECTIVE DATE.] 
124.28     This article is effective for taxable years beginning after 
124.29  December 31, 1997. 
124.30                             ARTICLE 8
124.31                     PROPERTY TAX MISCELLANEOUS
124.32     Section 1.  Minnesota Statutes 1996, section 93.41, is 
124.33  amended to read: 
124.34     93.41 [STATE-OWNED IRON-BEARING MATERIALS.] 
124.35     Subdivision 1.  [USE FOR ROAD CONSTRUCTION AND OTHER 
124.36  PURPOSES.] In case the commissioner of natural resources shall 
125.1   determine that any paint rock, taconite, or other iron-bearing 
125.2   material belonging to the state and containing not more than 45 
125.3   percent dried iron by analysis is needed and suitable for use in 
125.4   the construction or maintenance of any road, tailings basin, 
125.5   settling basin, dike, dam, bank fill, or other works on public 
125.6   or private property, and that such use would be in the best 
125.7   interests of the public, the commissioner may authorize the 
125.8   disposal of such material therefor as hereinafter provided.  
125.9      Subd. 2.  [MATERIALS SUBJECT TO STATE IRON ORE MINING 
125.10  LEASE.] If such material is subject to an existing state iron 
125.11  ore mining lease or located on property subject to an existing 
125.12  state iron ore mining lease, the commissioner, by written 
125.13  agreement with the holder of the lease, may authorize the use of 
125.14  the material for any purpose specified in subdivision 1 that 
125.15  will facilitate the mining and disposal of the iron ore therein 
125.16  on such terms as the commissioner may prescribe consistent with 
125.17  the interests of the state, or may authorize the holder of the 
125.18  lease to dispose of the material otherwise for any purpose 
125.19  specified in subdivision 1 upon payment of an amount therefor 
125.20  equivalent to the royalty that would be payable under the terms 
125.21  of the lease if the material were shipped or otherwise disposed 
125.22  of as iron ore, but not less than the applicable minimum rate 
125.23  prescribed by section 93.20.  
125.24     Subd. 3.  [ISSUANCE OF LEASES, ROYALTIES.] If such 
125.25  material, whether in the ground or in stockpile, is not subject 
125.26  to an existing lease, the commissioner may issue leases for the 
125.27  taking and removal thereof for the purposes specified in 
125.28  subdivision 1 in like manner as provided by section 92.50 for 
125.29  leases for the taking and removal of sand, gravel, and other 
125.30  materials specified in said section, and subject to all the 
125.31  provisions thereof, so far as applicable; provided, that the 
125.32  amount payable for such material shall be at least equivalent to 
125.33  the minimum royalty that would be payable therefor under the 
125.34  provisions of section 93.20.  
125.35     Subd. 4.  [SALE OF STOCKPILED IRON-BEARING MATERIAL IN 
125.36  PLACE.] If such material is in stockpile and is not subject to 
126.1   an existing lease, the commissioner may sell stockpiled 
126.2   iron-bearing material in place.  The sale must be to a person 
126.3   holding an interest in the surface of the property upon which 
126.4   the stockpile is located or to a person holding an interest in 
126.5   publicly or privately owned stockpiled iron-bearing material 
126.6   located in the same stockpile.  
126.7      Sec. 2.  Minnesota Statutes 1996, section 103D.905, 
126.8   subdivision 4, is amended to read: 
126.9      Subd. 4.  [BOND FUND.] A bond fund consists of the proceeds 
126.10  of special assessments, storm water charges, loan repayments, 
126.11  and ad valorem tax levies pledged by the watershed district for 
126.12  the payment of bonds or notes issued by the watershed district 
126.13  secured by the property of the watershed district that is 
126.14  producing or is likely to produce a regular income.  The bond 
126.15  fund is to be used for the payment of the purchase price of the 
126.16  property or the value of the property as determined by the court 
126.17  in proper proceedings and for the improvement and development of 
126.18  the property principal of, premium or administrative surcharge, 
126.19  if any, and interest on the bonds and notes issued by the 
126.20  watershed district and for payments required to be made to the 
126.21  federal government under section 148(f) of the Internal Revenue 
126.22  Code of 1986, as amended through December 31, 1996.  
126.23     Sec. 3.  Minnesota Statutes 1996, section 103D.905, 
126.24  subdivision 5, is amended to read: 
126.25     Subd. 5.  [CONSTRUCTION OR IMPLEMENTATION FUND.] (a) A 
126.26  construction or implementation fund consists of:  
126.27     (1) the proceeds of watershed district bonds or notes or of 
126.28  the sale of county bonds; 
126.29     (2) construction or implementation loans from the pollution 
126.30  control agency under sections 103F.701 to 103F.761, or from any 
126.31  agency of the federal government; and 
126.32     (3) special assessments, storm water charges, loan 
126.33  repayments, and ad valorem tax levies levied or to be levied to 
126.34  supply funds for the construction or implementation of the 
126.35  projects of the watershed district, including reservoirs, 
126.36  ditches, dikes, canals, channels, storm water facilities, sewage 
127.1   treatment facilities, wells, and other works, and the expenses 
127.2   incident to and connected with the construction or 
127.3   implementation. 
127.4      (b) Construction or implementation loans from the pollution 
127.5   control agency under sections 103F.701 to 103F.761, or from an 
127.6   agency of the federal government may be repaid from money 
127.7   collected by the proceeds of watershed district bonds or notes 
127.8   or from the collections of storm water charges, loan repayments, 
127.9   ad valorem tax levies, or special assessments on properties 
127.10  benefited by the project.  
127.11     Sec. 4.  Minnesota Statutes 1996, section 103D.905, is 
127.12  amended by adding a subdivision to read: 
127.13     Subd. 9.  [PROJECT TAX LEVY.] In addition to other tax 
127.14  levies provided in this section or in any other law, a watershed 
127.15  district may levy a tax: 
127.16     (1) to pay the costs of projects undertaken by the 
127.17  watershed district which are to be funded, in whole or in part, 
127.18  with the proceeds of grants or construction or implementation 
127.19  loans under sections 103F.701 to 103F.761; 
127.20     (2) to pay the principal of, or premium or administrative 
127.21  surcharge, if any, and interest on, the bonds and notes issued 
127.22  by the watershed district pursuant to section 103F.725; or 
127.23     (3) to repay the construction or implementation loans under 
127.24  sections 103F.701 to 103F.761. 
127.25     Taxes levied with respect to payment of bonds and notes 
127.26  shall comply with section 475.61. 
127.27     Sec. 5.  Minnesota Statutes 1996, section 216B.16, is 
127.28  amended by adding a subdivision to read: 
127.29     Subd. 6d.  [WIND ENERGY; PROPERTY TAX.] The commission 
127.30  shall require a public utility that is purchasing electricity 
127.31  from a wind generation facility installed after June 1, 1991, 
127.32  and before December 31, 2002, to either:  (1) pay all property 
127.33  taxes on the facility directly to the county treasurer of the 
127.34  county in which the facility is located; or (2) pay to the owner 
127.35  of the facility the amount of property taxes due on the facility 
127.36  at least 15 days prior to the due dates under sections 277.01 
128.1   and 279.01.  The commission shall permit a public utility that 
128.2   is purchasing electricity from a wind generation facility 
128.3   installed after June 1, 1991, and before December 31, 2002, to 
128.4   recover in the public utility's rates all property tax payments 
128.5   made directly to the county or to the owner of the facility as 
128.6   provided in this subdivision. 
128.7      Sec. 6.  Minnesota Statutes 1996, section 272.02, 
128.8   subdivision 1, is amended to read: 
128.9      Subdivision 1.  All property described in this section to 
128.10  the extent herein limited shall be exempt from taxation: 
128.11     (1) All public burying grounds. 
128.12     (2) All public schoolhouses. 
128.13     (3) All public hospitals. 
128.14     (4) All academies, colleges, and universities, and all 
128.15  seminaries of learning. 
128.16     (5) All churches, church property, and houses of worship. 
128.17     (6) Institutions of purely public charity except: 
128.18     (i) parcels of property containing structures and the 
128.19  structures described in section 273.13, subdivision 25, 
128.20  paragraph (c), clauses (1), (2), and (3), or paragraph (d), 
128.21  other than those that qualify for exemption under clause (25); 
128.22  and 
128.23     (ii) property described in section 273.13, subdivision 25a. 
128.24     (7) All public property exclusively used for any public 
128.25  purpose. 
128.26     (8) Except for the taxable personal property enumerated 
128.27  below, all personal property and the property described in 
128.28  section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
128.29  exempt.  
128.30     The following personal property shall be taxable:  
128.31     (a) personal property which is part of an electric 
128.32  generating, transmission, or distribution system or a pipeline 
128.33  system transporting or distributing water, gas, crude oil, or 
128.34  petroleum products or mains and pipes used in the distribution 
128.35  of steam or hot or chilled water for heating or cooling 
128.36  buildings and structures; 
129.1      (b) railroad docks and wharves which are part of the 
129.2   operating property of a railroad company as defined in section 
129.3   270.80; 
129.4      (c) personal property defined in section 272.03, 
129.5   subdivision 2, clause (3); 
129.6      (d) leasehold or other personal property interests which 
129.7   are taxed pursuant to section 272.01, subdivision 2; 273.124, 
129.8   subdivision 7; or 273.19, subdivision 1; or any other law 
129.9   providing the property is taxable as if the lessee or user were 
129.10  the fee owner; 
129.11     (e) manufactured homes and sectional structures, including 
129.12  storage sheds, decks, and similar removable improvements 
129.13  constructed on the site of a manufactured home, sectional 
129.14  structure, park trailer or travel trailer as provided in section 
129.15  273.125, subdivision 8, paragraph (f); and 
129.16     (f) flight property as defined in section 270.071.  
129.17     (9) Personal property used primarily for the abatement and 
129.18  control of air, water, or land pollution to the extent that it 
129.19  is so used, and real property which is used primarily for 
129.20  abatement and control of air, water, or land pollution as part 
129.21  of an agricultural operation, as a part of a centralized 
129.22  treatment and recovery facility operating under a permit issued 
129.23  by the Minnesota pollution control agency pursuant to chapters 
129.24  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
129.25  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
129.26  and for the treatment, recovery, and stabilization of metals, 
129.27  oils, chemicals, water, sludges, or inorganic materials from 
129.28  hazardous industrial wastes, or as part of an electric 
129.29  generation system.  For purposes of this clause, personal 
129.30  property includes ponderous machinery and equipment used in a 
129.31  business or production activity that at common law is considered 
129.32  real property. 
129.33     Any taxpayer requesting exemption of all or a portion of 
129.34  any real property or any equipment or device, or part thereof, 
129.35  operated primarily for the control or abatement of air or water 
129.36  pollution shall file an application with the commissioner of 
130.1   revenue.  The equipment or device shall meet standards, rules, 
130.2   or criteria prescribed by the Minnesota pollution control 
130.3   agency, and must be installed or operated in accordance with a 
130.4   permit or order issued by that agency.  The Minnesota pollution 
130.5   control agency shall upon request of the commissioner furnish 
130.6   information or advice to the commissioner.  On determining that 
130.7   property qualifies for exemption, the commissioner shall issue 
130.8   an order exempting the property from taxation.  The equipment or 
130.9   device shall continue to be exempt from taxation as long as the 
130.10  permit issued by the Minnesota pollution control agency remains 
130.11  in effect. 
130.12     (10) Wetlands.  For purposes of this subdivision, 
130.13  "wetlands" means:  (i) land described in section 103G.005, 
130.14  subdivision 15a; (ii) land which is mostly under water, produces 
130.15  little if any income, and has no use except for wildlife or 
130.16  water conservation purposes, provided it is preserved in its 
130.17  natural condition and drainage of it would be legal, feasible, 
130.18  and economically practical for the production of livestock, 
130.19  dairy animals, poultry, fruit, vegetables, forage and grains, 
130.20  except wild rice; or (iii) land in a wetland preservation area 
130.21  under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
130.22  and (ii) include adjacent land which is not suitable for 
130.23  agricultural purposes due to the presence of the wetlands, but 
130.24  do not include woody swamps containing shrubs or trees, wet 
130.25  meadows, meandered water, streams, rivers, and floodplains or 
130.26  river bottoms.  Exemption of wetlands from taxation pursuant to 
130.27  this section shall not grant the public any additional or 
130.28  greater right of access to the wetlands or diminish any right of 
130.29  ownership to the wetlands. 
130.30     (11) Native prairie.  The commissioner of the department of
130.31  natural resources shall determine lands in the state which are 
130.32  native prairie and shall notify the county assessor of each 
130.33  county in which the lands are located.  Pasture land used for 
130.34  livestock grazing purposes shall not be considered native 
130.35  prairie for the purposes of this clause.  Upon receipt of an 
130.36  application for the exemption provided in this clause for lands 
131.1   for which the assessor has no determination from the 
131.2   commissioner of natural resources, the assessor shall refer the 
131.3   application to the commissioner of natural resources who shall 
131.4   determine within 30 days whether the land is native prairie and 
131.5   notify the county assessor of the decision.  Exemption of native 
131.6   prairie pursuant to this clause shall not grant the public any 
131.7   additional or greater right of access to the native prairie or 
131.8   diminish any right of ownership to it. 
131.9      (12) Property used in a continuous program to provide 
131.10  emergency shelter for victims of domestic abuse, provided the 
131.11  organization that owns and sponsors the shelter is exempt from 
131.12  federal income taxation pursuant to section 501(c)(3) of the 
131.13  Internal Revenue Code of 1986, as amended through December 31, 
131.14  1992, notwithstanding the fact that the sponsoring organization 
131.15  receives funding under section 8 of the United States Housing 
131.16  Act of 1937, as amended. 
131.17     (13) If approved by the governing body of the municipality 
131.18  in which the property is located, property not exceeding one 
131.19  acre which is owned and operated by any senior citizen group or 
131.20  association of groups that in general limits membership to 
131.21  persons age 55 or older and is organized and operated 
131.22  exclusively for pleasure, recreation, and other nonprofit 
131.23  purposes, no part of the net earnings of which inures to the 
131.24  benefit of any private shareholders; provided the property is 
131.25  used primarily as a clubhouse, meeting facility, or recreational 
131.26  facility by the group or association and the property is not 
131.27  used for residential purposes on either a temporary or permanent 
131.28  basis. 
131.29     (14) To the extent provided by section 295.44, real and 
131.30  personal property used or to be used primarily for the 
131.31  production of hydroelectric or hydromechanical power on a site 
131.32  owned by the state or a local governmental unit which is 
131.33  developed and operated pursuant to the provisions of section 
131.34  103G.535. 
131.35     (15) If approved by the governing body of the municipality 
131.36  in which the property is located, and if construction is 
132.1   commenced after June 30, 1983:  
132.2      (a) a "direct satellite broadcasting facility" operated by 
132.3   a corporation licensed by the federal communications commission 
132.4   to provide direct satellite broadcasting services using direct 
132.5   broadcast satellites operating in the 12-ghz. band; and 
132.6      (b) a "fixed satellite regional or national program service 
132.7   facility" operated by a corporation licensed by the federal 
132.8   communications commission to provide fixed satellite-transmitted 
132.9   regularly scheduled broadcasting services using satellites 
132.10  operating in the 6-ghz. band. 
132.11  An exemption provided by clause (15) shall apply for a period 
132.12  not to exceed five years.  When the facility no longer qualifies 
132.13  for exemption, it shall be placed on the assessment rolls as 
132.14  provided in subdivision 4.  Before approving a tax exemption 
132.15  pursuant to this paragraph, the governing body of the 
132.16  municipality shall provide an opportunity to the members of the 
132.17  county board of commissioners of the county in which the 
132.18  facility is proposed to be located and the members of the school 
132.19  board of the school district in which the facility is proposed 
132.20  to be located to meet with the governing body.  The governing 
132.21  body shall present to the members of those boards its estimate 
132.22  of the fiscal impact of the proposed property tax exemption.  
132.23  The tax exemption shall not be approved by the governing body 
132.24  until the county board of commissioners has presented its 
132.25  written comment on the proposal to the governing body or 30 days 
132.26  have passed from the date of the transmittal by the governing 
132.27  body to the board of the information on the fiscal impact, 
132.28  whichever occurs first. 
132.29     (16) Real and personal property owned and operated by a 
132.30  private, nonprofit corporation exempt from federal income 
132.31  taxation pursuant to United States Code, title 26, section 
132.32  501(c)(3), primarily used in the generation and distribution of 
132.33  hot water for heating buildings and structures.  
132.34     (17) Notwithstanding section 273.19, state lands that are 
132.35  leased from the department of natural resources under section 
132.36  92.46. 
133.1      (18) Electric power distribution lines and their 
133.2   attachments and appurtenances, that are used primarily for 
133.3   supplying electricity to farmers at retail.  
133.4      (19) Transitional housing facilities.  "Transitional 
133.5   housing facility" means a facility that meets the following 
133.6   requirements.  (i) It provides temporary housing to individuals, 
133.7   couples, or families.  (ii) It has the purpose of reuniting 
133.8   families and enabling parents or individuals to obtain 
133.9   self-sufficiency, advance their education, get job training, or 
133.10  become employed in jobs that provide a living wage.  (iii) It 
133.11  provides support services such as child care, work readiness 
133.12  training, and career development counseling; and a 
133.13  self-sufficiency program with periodic monitoring of each 
133.14  resident's progress in completing the program's goals.  (iv) It 
133.15  provides services to a resident of the facility for at least 
133.16  three months but no longer than three years, except residents 
133.17  enrolled in an educational or vocational institution or job 
133.18  training program.  These residents may receive services during 
133.19  the time they are enrolled but in no event longer than four 
133.20  years.  (v) It is owned and operated or under lease from a unit 
133.21  of government or governmental agency under a property 
133.22  disposition program and operated by one or more organizations 
133.23  exempt from federal income tax under section 501(c)(3) of the 
133.24  Internal Revenue Code of 1986, as amended through December 31, 
133.25  1992.  This exemption applies notwithstanding the fact that the 
133.26  sponsoring organization receives financing by a direct federal 
133.27  loan or federally insured loan or a loan made by the Minnesota 
133.28  housing finance agency under the provisions of either Title II 
133.29  of the National Housing Act or the Minnesota housing finance 
133.30  agency law of 1971 or rules promulgated by the agency pursuant 
133.31  to it, and notwithstanding the fact that the sponsoring 
133.32  organization receives funding under Section 8 of the United 
133.33  States Housing Act of 1937, as amended. 
133.34     (20) Real and personal property, including leasehold or 
133.35  other personal property interests, owned and operated by a 
133.36  corporation if more than 50 percent of the total voting power of 
134.1   the stock of the corporation is owned collectively by:  (i) the 
134.2   board of regents of the University of Minnesota, (ii) the 
134.3   University of Minnesota Foundation, an organization exempt from 
134.4   federal income taxation under section 501(c)(3) of the Internal 
134.5   Revenue Code of 1986, as amended through December 31, 1992, and 
134.6   (iii) a corporation organized under chapter 317A, which by its 
134.7   articles of incorporation is prohibited from providing pecuniary 
134.8   gain to any person or entity other than the regents of the 
134.9   University of Minnesota; which property is used primarily to 
134.10  manage or provide goods, services, or facilities utilizing or 
134.11  relating to large-scale advanced scientific computing resources 
134.12  to the regents of the University of Minnesota and others. 
134.13     (21)(a) Small scale wind energy conversion systems, as 
134.14  defined in section 216C.06, subdivision 12, installed after 
134.15  January 1, 1991, and before January 2, 1995, and used as an 
134.16  electric power source, are exempt.  (b) "Small scale wind energy 
134.17  conversion systems" are wind energy conversion systems, as 
134.18  defined in section 216C.06, subdivision 12, installed after 
134.19  January 1, 1995, including the foundation or support pad, which 
134.20  are (i) used as an electric power source; (ii) located within 
134.21  one county and owned by the same owner; and (iii) produce two 
134.22  megawatts or less of electricity as measured by nameplate 
134.23  ratings, are exempt. 
134.24     (c) (b) Medium scale wind energy conversion systems, as 
134.25  defined in section 216C.06, subdivision 12, installed after 
134.26  January 1, 1995 1991, and used as an electric power source but 
134.27  not exempt under item (b), are treated as follows:  (i) the 
134.28  foundation and support pad are taxable; (ii) the associated 
134.29  supporting and protective structures are exempt for the first 
134.30  five assessment years after they have been constructed, and 
134.31  thereafter, 30 percent of the market value of the associated 
134.32  supporting and protective structures are taxable; and (iii) the 
134.33  turbines, blades, transformers, and its related equipment, are 
134.34  exempt.  "Medium scale wind energy conversion systems" are wind 
134.35  energy conversion systems as defined in section 216C.06, 
134.36  subdivision 12, including the foundation or support pad, which 
135.1   are:  (i) used as an electric power source; (ii) located within 
135.2   one county and owned by the same owner; and (iii) produce more 
135.3   than two but equal to or less than 12 megawatts of energy as 
135.4   measured by nameplate ratings. 
135.5      (c) Large scale wind energy conversion systems installed 
135.6   after January 1, 1991, are treated as follows:  25 percent of 
135.7   the market value of all property is taxable, including (i) the 
135.8   foundation and support pad; (ii) the associated supporting and 
135.9   protective structures; and (iii) the turbines, blades, 
135.10  transformers, and its related equipment.  "Large scale wind 
135.11  energy conversion systems" are wind energy conversion systems as 
135.12  defined in section 216C.06, subdivision 12, including the 
135.13  foundation or support pad, which are:  (i) used as an electric 
135.14  power source; and (ii) produce more than 12 megawatts of energy 
135.15  as measured by nameplate ratings. 
135.16     (22) Containment tanks, cache basins, and that portion of 
135.17  the structure needed for the containment facility used to 
135.18  confine agricultural chemicals as defined in section 18D.01, 
135.19  subdivision 3, as required by the commissioner of agriculture 
135.20  under chapter 18B or 18C. 
135.21     (23) Photovoltaic devices, as defined in section 216C.06, 
135.22  subdivision 13, installed after January 1, 1992, and used to 
135.23  produce or store electric power. 
135.24     (24) Real and personal property owned and operated by a 
135.25  private, nonprofit corporation exempt from federal income 
135.26  taxation pursuant to United States Code, title 26, section 
135.27  501(c)(3), primarily used for an ice arena or ice rink, and used 
135.28  primarily for youth and high school programs. 
135.29     (25) A structure that is situated on real property that is 
135.30  used for: 
135.31     (i) housing for the elderly or for low- and moderate-income 
135.32  families as defined in Title II of the National Housing Act, as 
135.33  amended through December 31, 1990, and funded by a direct 
135.34  federal loan or federally insured loan made pursuant to Title II 
135.35  of the act; or 
135.36     (ii) housing lower income families or elderly or 
136.1   handicapped persons, as defined in Section 8 of the United 
136.2   States Housing Act of 1937, as amended. 
136.3      In order for a structure to be exempt under (i) or (ii), it 
136.4   must also meet each of the following criteria: 
136.5      (A) is owned by an entity which is operated as a nonprofit 
136.6   corporation organized under chapter 317A; 
136.7      (B) is owned by an entity which has not entered into a 
136.8   housing assistance payments contract under Section 8 of the 
136.9   United States Housing Act of 1937, or, if the entity which owns 
136.10  the structure has entered into a housing assistance payments 
136.11  contract under Section 8 of the United States Housing Act of 
136.12  1937, the contract provides assistance for less than 90 percent 
136.13  of the dwelling units in the structure, excluding dwelling units 
136.14  intended for management or maintenance personnel; 
136.15     (C) operates an on-site congregate dining program in which 
136.16  participation by residents is mandatory, and provides assisted 
136.17  living or similar social and physical support services for 
136.18  residents; and 
136.19     (D) was not assessed and did not pay tax under chapter 273 
136.20  prior to the 1991 levy, while meeting the other conditions of 
136.21  this clause. 
136.22     An exemption under this clause remains in effect for taxes 
136.23  levied in each year or partial year of the term of its permanent 
136.24  financing. 
136.25     (26) Real and personal property that is located in the 
136.26  Superior National Forest, and owned or leased and operated by a 
136.27  nonprofit organization that is exempt from federal income 
136.28  taxation under section 501(c)(3) of the Internal Revenue Code of 
136.29  1986, as amended through December 31, 1992, and primarily used 
136.30  to provide recreational opportunities for disabled veterans and 
136.31  their families. 
136.32     (27) Manure pits and appurtenances, which may include 
136.33  slatted floors and pipes, installed or operated in accordance 
136.34  with a permit, order, or certificate of compliance issued by the 
136.35  Minnesota pollution control agency.  The exemption shall 
136.36  continue for as long as the permit, order, or certificate issued 
137.1   by the Minnesota pollution control agency remains in effect. 
137.2      (28) Notwithstanding clause (8), item (a), attached 
137.3   machinery and other personal property which is part of a 
137.4   facility containing a cogeneration system as described in 
137.5   section 216B.166, subdivision 2, paragraph (a), if the 
137.6   cogeneration system has met the following criteria:  (i) the 
137.7   system utilizes natural gas as a primary fuel and the 
137.8   cogenerated steam initially replaces steam generated from 
137.9   existing thermal boilers utilizing coal; (ii) the facility 
137.10  developer is selected as a result of a procurement process 
137.11  ordered by the public utilities commission; and (iii) 
137.12  construction of the facility is commenced after July 1, 1994, 
137.13  and before July 1, 1997. 
137.14     (29) Real property acquired by a home rule charter city, 
137.15  statutory city, county, town, or school district under a lease 
137.16  purchase agreement or an installment purchase contract during 
137.17  the term of the lease purchase agreement as long as and to the 
137.18  extent that the property is used by the city, county, town, or 
137.19  school district and devoted to a public use and to the extent it 
137.20  is not subleased to any private individual, entity, association, 
137.21  or corporation in connection with a business or enterprise 
137.22  operated for profit. 
137.23     Sec. 7.  Minnesota Statutes 1996, section 273.11, 
137.24  subdivision 16, is amended to read: 
137.25     Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
137.26  Improvements to homestead property made before January 2, 2003, 
137.27  shall be fully or partially excluded from the value of the 
137.28  property for assessment purposes provided that (1) the house is 
137.29  at least 35 years old at the time of the improvement and (2) 
137.30  either 
137.31     (a) the assessor's estimated market value of the house on 
137.32  January 2 of the current year is equal to or less than $150,000, 
137.33  or 
137.34     (b) if the estimated market value of the house is over 
137.35  $150,000 market value but is less than $300,000 on January 2 of 
137.36  the current year, the property qualifies if 
138.1      (i) it is located in a city or town in which 50 percent or 
138.2   more of the owner-occupied housing units were constructed before 
138.3   1960 based upon the 1990 federal census, and 
138.4      (ii) the city or town's median family income based upon the 
138.5   1990 federal census is less than the statewide median family 
138.6   income based upon the 1990 federal census, or 
138.7      (c) if the estimated market value of the house is $300,000 
138.8   or more on January 2 of the current year, the property qualifies 
138.9   if 
138.10     (i) it is located in a city or town in which 45 percent or 
138.11  more of the homes were constructed before 1940 based upon the 
138.12  1990 federal census, and 
138.13     (ii) it is located in a city or town in which 45 percent or 
138.14  more of the housing units were rental based upon the 1990 
138.15  federal census, and 
138.16     (iii) the city or town's median value of owner-occupied 
138.17  housing units based upon the 1990 federal census is less than 
138.18  the statewide median value of owner-occupied housing units based 
138.19  upon the 1990 federal census. 
138.20     For purposes of determining this eligibility, "house" means 
138.21  land and buildings.  
138.22     The age of a residence is the number of years that the 
138.23  residence has existed at its present site original year of its 
138.24  construction.  In the case of a residence that is relocated, the 
138.25  only improvements eligible for exclusion under this subdivision 
138.26  are (1) those for which building permits were issued to the 
138.27  homeowner after the residence was relocated to its present site, 
138.28  and (2) those undertaken during or after the year the residence 
138.29  is initially occupied by the homeowner, excluding any market 
138.30  value increase relating to basic improvements that are necessary 
138.31  to make the residence functional at its present site.  In the 
138.32  case of an owner-occupied duplex or triplex, the improvement is 
138.33  eligible regardless of which portion of the property was 
138.34  improved. 
138.35     If the property lies in a jurisdiction which is subject to 
138.36  a building permit process, a building permit must have been 
139.1   issued prior to commencement of the improvement.  Any 
139.2   improvement must add at least $1,000 to the value of the 
139.3   property to be eligible for exclusion under this subdivision.  
139.4   Only improvements to the structure which is the residence of the 
139.5   qualifying homesteader or construction of or improvements to no 
139.6   more than one two-car garage per residence qualify for the 
139.7   provisions of this subdivision.  If an improvement was begun 
139.8   between January 2, 1992, and January 2, 1993, any value added 
139.9   from that improvement for the January 1994 and subsequent 
139.10  assessments shall qualify for exclusion under this subdivision 
139.11  provided that a building permit was obtained for the improvement 
139.12  between January 2, 1992, and January 2, 1993.  Whenever a 
139.13  building permit is issued for property currently classified as 
139.14  homestead, the issuing jurisdiction shall notify the property 
139.15  owner of the possibility of valuation exclusion under this 
139.16  subdivision.  The assessor shall require an application, 
139.17  including documentation of the age of the house from the owner, 
139.18  if unknown by the assessor.  The application may be filed 
139.19  subsequent to the date of the building permit provided that the 
139.20  application must be filed within three years of the date the 
139.21  building permit was issued for the improvement.  If the property 
139.22  lies in a jurisdiction which is not subject to a building permit 
139.23  process, the application must be filed within three years of the 
139.24  date the improvement was made.  The assessor may require proof 
139.25  from the taxpayer of the date the improvement was made.  
139.26  Applications must be received prior to July 1 of any year in 
139.27  order to be effective for taxes payable in the following year. 
139.28     No exclusion may be granted for an improvement by a local 
139.29  board of review or county board of equalization and no abatement 
139.30  of the taxes for qualifying improvements may be granted by the 
139.31  county board unless (1) a building permit was issued prior to 
139.32  the commencement of the improvement if the jurisdiction requires 
139.33  a building permit, and (2) an application was completed. 
139.34     The assessor shall note the qualifying value of each 
139.35  improvement on the property's record, and the sum of those 
139.36  amounts shall be subtracted from the value of the property in 
140.1   each year for ten years after the improvement has been made, at 
140.2   which time an amount equal to 20 percent of the qualifying value 
140.3   shall be added back in each of the five subsequent assessment 
140.4   years.  If an application is filed after the first assessment 
140.5   date at which an improvement could have been subject to the 
140.6   valuation exclusion under this subdivision, the ten-year period 
140.7   during which the value is subject to exclusion is reduced by the 
140.8   number of years that have elapsed since the property would have 
140.9   qualified initially.  The valuation exclusion shall terminate 
140.10  whenever (1) the property is sold, or (2) the property is 
140.11  reclassified to a class which does not qualify for treatment 
140.12  under this subdivision.  Improvements made by an occupant who is 
140.13  the purchaser of the property under a conditional purchase 
140.14  contract do not qualify under this subdivision unless the seller 
140.15  of the property is a governmental entity.  The qualifying value 
140.16  of the property shall be computed based upon the increase from 
140.17  that structure's market value as of January 2 preceding the 
140.18  acquisition of the property by the governmental entity. 
140.19     The total qualifying value for a homestead may not exceed 
140.20  $50,000.  The total qualifying value for a homestead with a 
140.21  house that is less than 70 years old may not exceed $25,000.  
140.22  The term "qualifying value" means the increase in estimated 
140.23  market value resulting from the improvement if the improvement 
140.24  occurs when the house is at least 70 years old, or one-half of 
140.25  the increase in estimated market value resulting from the 
140.26  improvement otherwise.  The $25,000 and $50,000 maximum 
140.27  qualifying value under this subdivision may result from up to 
140.28  three separate improvements to the homestead.  The application 
140.29  shall state, in clear language, that if more than three 
140.30  improvements are made to the qualifying property, a taxpayer may 
140.31  choose which three improvements are eligible, provided that 
140.32  after the taxpayer has made the choice and any valuation 
140.33  attributable to those improvements has been excluded from 
140.34  taxation, no further changes can be made by the taxpayer. 
140.35     If 50 percent or more of the square footage of a structure 
140.36  is voluntarily razed or removed, the valuation increase 
141.1   attributable to any subsequent improvements to the remaining 
141.2   structure does not qualify for the exclusion under this 
141.3   subdivision.  If a structure is unintentionally or accidentally 
141.4   destroyed by a natural disaster, the property is eligible for an 
141.5   exclusion under this subdivision provided that the structure was 
141.6   not completely destroyed.  The qualifying value on property 
141.7   destroyed by a natural disaster shall be computed based upon the 
141.8   increase from that structure's market value as determined on 
141.9   January 2 of the year in which the disaster occurred.  A 
141.10  property receiving benefits under the homestead disaster 
141.11  provisions under section 273.123 is not disqualified from 
141.12  receiving an exclusion under this subdivision.  If any 
141.13  combination of improvements made to a structure after January 1, 
141.14  1993, increases the size of the structure by 100 percent or 
141.15  more, the valuation increase attributable to the portion of the 
141.16  improvement that causes the structure's size to exceed 100 
141.17  percent does not qualify for exclusion under this subdivision. 
141.18     Sec. 8.  Minnesota Statutes 1996, section 273.112, 
141.19  subdivision 1, is amended to read: 
141.20     Subdivision 1.  This section may be cited as the "Minnesota 
141.21  open recreational and social space property tax law."  
141.22     Sec. 9.  Minnesota Statutes 1996, section 273.112, 
141.23  subdivision 2, is amended to read: 
141.24     Subd. 2.  The present general system of ad valorem property 
141.25  taxation in the state of Minnesota does not provide an equitable 
141.26  basis for the taxation of certain private outdoor recreational, 
141.27  social, open space and park land property and has resulted in 
141.28  excessive taxes on some of these lands.  Therefore, it is hereby 
141.29  declared that the public policy of this state would be best 
141.30  served by equalizing tax burdens upon private outdoor, 
141.31  recreational, social, open space and park land within this state 
141.32  through appropriate taxing measures to encourage private 
141.33  development of these lands which would otherwise not occur or 
141.34  have to be provided by governmental authority.  
141.35     Sec. 10.  Minnesota Statutes 1996, section 273.112, 
141.36  subdivision 3, is amended to read: 
142.1      Subd. 3.  Real estate shall be entitled to valuation and 
142.2   tax deferment under this section only if it is: 
142.3      (a) actively and exclusively devoted to golf, skiing, lawn 
142.4   bowling, croquet, or archery or firearms range recreational use 
142.5   or uses and other recreational or social uses carried on at the 
142.6   establishment; 
142.7      (b) five acres in size or more, except in the case of a 
142.8   lawn bowling or croquet green or an archery or firearms range or 
142.9   an establishment actively and exclusively devoted to indoor 
142.10  fitness, health, social, recreational, and related uses in which 
142.11  the establishment is owned and operated by a not-for-profit 
142.12  corporation; 
142.13     (c)(1) operated by private individuals or, in the case of a 
142.14  lawn bowling or croquet green, by private individuals or 
142.15  corporations, and open to the public; or 
142.16     (2) operated by firms or corporations for the benefit of 
142.17  employees or guests; or 
142.18     (3) operated by private clubs having a membership of 50 or 
142.19  more or open to the public, provided that the club does not 
142.20  discriminate in membership requirements or selection on the 
142.21  basis of sex or marital status; and 
142.22     (d) made available, in the case of real estate devoted to 
142.23  golf, for use without discrimination on the basis of sex during 
142.24  the time when the facility is open to use by the public or by 
142.25  members, except that use for golf may be restricted on the basis 
142.26  of sex no more frequently than one, or part of one, weekend each 
142.27  calendar month for each sex and no more than two, or part of 
142.28  two, weekdays each week for each sex.  
142.29     If a golf club membership allows use of golf course 
142.30  facilities by more than one adult per membership, the use must 
142.31  be equally available to all adults entitled to use of the golf 
142.32  course under the membership, except that use may be restricted 
142.33  on the basis of sex as permitted in this section.  Memberships 
142.34  that permit play during restricted times may be allowed only if 
142.35  the restricted times apply to all adults using the membership.  
142.36  A golf club may not offer a membership or golfing privileges to 
143.1   a spouse of a member that provides greater or less access to the 
143.2   golf course than is provided to that person's spouse under the 
143.3   same or a separate membership in that club, except that the 
143.4   terms of a membership may provide that one spouse may have no 
143.5   right to use the golf course at any time while the other spouse 
143.6   may have either limited or unlimited access to the golf course.  
143.7      A golf club may have or create an individual membership 
143.8   category which entitles a member for a reduced rate to play 
143.9   during restricted hours as established by the club.  The club 
143.10  must have on record a written request by the member for such 
143.11  membership.  
143.12     A golf club that has food or beverage facilities or 
143.13  services must allow equal access to those facilities and 
143.14  services for both men and women members in all membership 
143.15  categories at all times.  Nothing in this paragraph shall be 
143.16  construed to require service or access to facilities to persons 
143.17  under the age of 21 years or require any act that would violate 
143.18  law or ordinance regarding sale, consumption, or regulation of 
143.19  alcoholic beverages. 
143.20     For purposes of this subdivision and subdivision 7a, 
143.21  discrimination means a pattern or course of conduct and not 
143.22  linked to an isolated incident. 
143.23     Sec. 11.  Minnesota Statutes 1996, section 273.112, 
143.24  subdivision 4, is amended to read: 
143.25     Subd. 4.  The value of any real estate described in 
143.26  subdivision 3 shall upon timely application by the owner, in the 
143.27  manner provided in subdivision 6, be determined solely with 
143.28  reference to its appropriate private outdoor, 
143.29  recreational, social, open space and park land classification 
143.30  and value notwithstanding sections 272.03, subdivision 8, and 
143.31  273.11.  In determining such value for ad valorem tax purposes 
143.32  the assessor shall not consider the value such real estate would 
143.33  have if it were converted to commercial, industrial, residential 
143.34  or seasonal residential use. 
143.35     Sec. 12.  Minnesota Statutes 1996, section 273.13, is 
143.36  amended by adding a subdivision to read: 
144.1      Subd. 25a.  [ELDERLY ASSISTED LIVING FACILITY 
144.2   PROPERTY.] "Elderly assisted living facility property" means 
144.3   residential real estate containing more than one unit held for 
144.4   use by the tenants or lessees as a residence for periods of 30 
144.5   days or more, along with community rooms, lounges, activity 
144.6   rooms, and related facilities, designed to meet the housing, 
144.7   health, and financial security needs of the elderly.  The real 
144.8   estate may be owned by an individual, partnership, limited 
144.9   partnership, for-profit corporation, or nonprofit corporation 
144.10  exempt from federal income taxation under United States Code, 
144.11  title 26, section 501(c)(3) or related sections.  
144.12     An admission or initiation fee may be required of tenants.  
144.13  Monthly charges may include charges for the residential unit, 
144.14  meals, housekeeping, utilities, social programs, a health care 
144.15  alert system, or any combination of them.  On-site health care 
144.16  may be provided by in-house staff or an outside health care 
144.17  provider. 
144.18     The assessor shall classify elderly assisted living 
144.19  facility property as class 1 or class 4 property, depending upon 
144.20  the property's ownership, occupancy, and use.  The applicable 
144.21  class rates apply based on its classification.  If a skilled 
144.22  care nursing home facility is located on the same parcel as an 
144.23  elderly assisted living facility, the portion of the property 
144.24  devoted to the elderly assisted living facility shall be 
144.25  classified under this subdivision. 
144.26     Sec. 13.  [273.1651] [TAXATION AND FORFEITURE OF STOCKPILED 
144.27  METALLIC MINERALS MATERIAL.] 
144.28     Subdivision 1.  [DEFINITION.] "Stockpiled metallic minerals 
144.29  material" for purposes of this section, means surface 
144.30  overburden, rock, lean ore, tailings, or other material that has 
144.31  been removed from the ground and deposited elsewhere on the 
144.32  surface in the process of iron ore, taconite, or other metallic 
144.33  minerals mining, or in the process of beneficiation.  Stockpiled 
144.34  metallic minerals material does not include processed metallic 
144.35  minerals concentrates in the form of pellets, chips, briquettes, 
144.36  fines, or other form, which have been prepared for or are in the 
145.1   process of shipment. 
145.2      Subd. 2.  [PURPOSE.] The purpose of this section is to 
145.3   clarify the ownership of stockpiled metallic minerals material 
145.4   in this state.  Depending on the intent of the person who 
145.5   extracted the material from the ground, stockpiled metallic 
145.6   minerals material may or may not be owned separately and apart 
145.7   from the fee title to the surface of the real property.  The 
145.8   legislature finds that the uncertainty of ownership of 
145.9   stockpiled metallic minerals material located on real property 
145.10  that becomes tax forfeited has created a burden on the public 
145.11  owner of the surface of the real property and an impediment to 
145.12  productive management or use of a public resource. 
145.13     Subd. 3.  [TAXATION AND FORFEITURE.] From and after the 
145.14  effective date of this section, for purposes of taxation, the 
145.15  definition of "real property," as contained in section 272.03, 
145.16  subdivision 1, includes stockpiled metallic minerals material.  
145.17  Nothing in this subdivision shall be construed to subject 
145.18  stockpiled metallic minerals material to the general property 
145.19  tax when the stockpiled metallic minerals material is exempt 
145.20  from the general property tax pursuant to section 298.015 or 
145.21  298.25.  If the surface of the real property forfeits for 
145.22  delinquent taxes, stockpiled metallic minerals material located 
145.23  on the real property forfeits with the surface of the property. 
145.24     Subd. 4.  [PRIOR FORFEITURE.] Stockpiled metallic minerals 
145.25  material located on real property that forfeited prior to the 
145.26  effective date of this section or forfeits due to a judgment for 
145.27  delinquent taxes issued prior to the effective date of this 
145.28  section shall be assessed and taxed as real property.  The tax 
145.29  applies only to stockpiled metallic minerals material located on 
145.30  real property that remains in the ownership of the state or a 
145.31  political subdivision of the state.  The tax shall be based on 
145.32  the market value of the rental of the property for storage of 
145.33  stockpiled metallic minerals material. 
145.34     Subd. 5.  [EXCEPTIONS; TAX LAWS.] (a) The tax imposed 
145.35  pursuant to this section shall not be imposed on the following: 
145.36     (1) stockpiled metallic minerals material valued and taxed 
146.1   under other laws relating to the taxation of minerals, gas, 
146.2   coal, oil, or other similar interests; 
146.3      (2) stockpiled metallic minerals material that is exempt 
146.4   from taxation pursuant to constitutional or related statutory 
146.5   provisions; or 
146.6      (3) stockpiled metallic minerals material that is owned by 
146.7   the state.  
146.8      (b) All laws for the enforcement of taxes on real property 
146.9   shall apply to the tax imposed pursuant to this section on 
146.10  stockpiled metallic minerals material. 
146.11     Subd. 6.  [FEE OWNER.] For purposes of section 276.041, the 
146.12  owner of stockpiled metallic minerals material is a fee owner. 
146.13     Sec. 14.  Minnesota Statutes 1996, section 281.13, is 
146.14  amended to read: 
146.15     281.13 [NOTICE OF EXPIRATION OF REDEMPTION.] 
146.16     Every person holding a tax certificate after expiration of 
146.17  three years, or the redemption period specified in section 
146.18  281.17 if shorter, after the date of the tax sale under which 
146.19  the same was issued, may present such certificate to the county 
146.20  auditor; and thereupon the auditor shall prepare, under the 
146.21  auditor's hand and official seal, a notice, directed to the 
146.22  person or persons in whose name such lands are assessed, 
146.23  specifying the description thereof, the amount for which the 
146.24  same was sold, the amount required to redeem the same, exclusive 
146.25  of the costs to accrue upon such notice, and the time when the 
146.26  redemption period will expire.  If, at the time when any tax 
146.27  certificate is so presented, such lands are assessed in the name 
146.28  of the holder of the certificate, such notice shall be directed 
146.29  also to the person or persons in whose name title in fee of such 
146.30  land appears of record in the office of the county recorder.  
146.31  The auditor shall deliver such notice to the party applying 
146.32  therefor, who shall deliver it to the sheriff of the proper 
146.33  county or any other person not less than 18 years of age for 
146.34  service.  Within 20 days after receiving it, the sheriff or 
146.35  other person serving the notice shall serve such notice upon the 
146.36  persons to whom it is directed, if to be found in the sheriff's 
147.1   county, in the manner prescribed for serving a summons in a 
147.2   civil action; if not so found, then upon the person in 
147.3   possession of the land, and make return thereof to the auditor.  
147.4   In the case of land held in joint tenancy the notice shall be 
147.5   served upon each joint tenant.  If one or more of the persons to 
147.6   whom the notice is directed cannot be found in the county, and 
147.7   there is no one in possession of the land, of each of which 
147.8   facts the return of the sheriff or other person serving the 
147.9   notice so specifying shall be prima facie evidence, service 
147.10  shall be made upon those persons that can be found and service 
147.11  shall also be made by two weeks' published notice, proof of 
147.12  which publication shall be filed with the auditor. 
147.13     When the records in the office of the county recorder show 
147.14  that any lot or tract of land is encumbered by an unsatisfied 
147.15  mortgage or other lien, and show the post office address of the 
147.16  mortgagee or lienee, or if the same has been assigned, the post 
147.17  office address of the assignee, the person holding such tax 
147.18  certificate shall serve a copy of such notice upon such 
147.19  mortgagee, lienee, or assignee by certified mail addressed to 
147.20  such mortgagee, lienee, or assignee at the post office address 
147.21  of the mortgagee, lienee, or assignee as disclosed by the 
147.22  records in the office of the county recorder, at least 60 days 
147.23  prior to the time when the redemption period will expire. 
147.24     The notice herein provided for shall be sufficient if 
147.25  substantially in the following form: 
147.26                "NOTICE OF EXPIRATION OF REDEMPTION 
147.27     Office of the County Auditor 
147.28     County of ......................., State of Minnesota. 
147.29     To .............................. 
147.30     You are hereby notified that the following described piece 
147.31  or parcel of land, situated in the county of 
147.32  ......................., and State of Minnesota, and known and 
147.33  described as follows:  ......... 
147.34  ............................................................ 
147.35  .........., is now assessed in your name; that on the 
147.36  ........................ day of May, ....................., at 
148.1   the sale of land pursuant to the real estate tax judgment, duly 
148.2   given and made in and by the district court in and for said 
148.3   county of ......................................, on the 
148.4   ................................. day of March, .............., 
148.5   in proceedings to enforce the payment of taxes delinquent upon 
148.6   real estate for the year .............. for said county of 
148.7   ........... ......................., the above described piece 
148.8   or parcel of land was sold for the sum of $............., and 
148.9   the amount required to redeem such piece or parcel of land from 
148.10  such sale, exclusive of the cost to accrue upon this notice, is 
148.11  the sum of $............, and interest at the rate of 
148.12  ............... percent per annum from said 
148.13  ............................. day of ......................, 
148.14  ..................., to the day such redemption is made, and 
148.15  that the tax certificate has been presented to me by the holder 
148.16  thereof, and the time for redemption of such piece or parcel of 
148.17  land from such sale will expire 60 days after the service of 
148.18  this notice and proof thereof has been filed in my office. 
148.19     Witness my hand and official seal this 
148.20  ............................  day of ................, 
148.21  ................. 
148.22     ................. 
148.23     (OFFICIAL SEAL) 
148.24     County Auditor of 
148.25     ...................... County, Minnesota." 
148.26     Sec. 15.  Minnesota Statutes 1996, section 281.23, is 
148.27  amended by adding a subdivision to read: 
148.28     Subd. 5a.  [DEFINITION.] In this subdivision, "occupied 
148.29  parcel" means a parcel containing a structure subject to 
148.30  property taxation. 
148.31     Sec. 16.  Minnesota Statutes 1996, section 281.23, 
148.32  subdivision 6, is amended to read: 
148.33     Subd. 6.  [SERVICE BY SHERIFF OF NOTICE.] (a) Forthwith 
148.34  after the commencement of such publication or mailing the county 
148.35  auditor shall deliver to the sheriff of the county or any other 
148.36  person not less than 18 years of age a sufficient number of 
149.1   copies of such notice of expiration of redemption for service 
149.2   upon the persons in possession of all parcels of such land as 
149.3   are actually occupied and documentation if the certified mail 
149.4   notice was returned as undeliverable or the notice was not 
149.5   mailed to the address associated with the property.  Within 30 
149.6   days after receipt thereof, the sheriff or other person serving 
149.7   the notice shall make such investigation as may be necessary to 
149.8   ascertain whether or not the parcels covered by such notice are 
149.9   actually occupied or not parcels, and shall serve a copy of such 
149.10  notice of expiration of redemption upon the person in possession 
149.11  of each parcel found to be so an occupied parcel, in the manner 
149.12  prescribed for serving summons in a civil action.  The 
149.13  sheriff or other person serving the notice shall make prompt 
149.14  return to the auditor as to all notices so served and as to all 
149.15  parcels found vacant and unoccupied.  Such return shall be made 
149.16  upon a copy of such notice and shall be prima facie evidence of 
149.17  the facts therein stated. 
149.18     Unless compensation for such services is otherwise provided 
149.19  by law, If the notice is served by the sheriff, the sheriff 
149.20  shall receive from the county, in addition to other compensation 
149.21  prescribed by law, such fees and mileage for service on persons 
149.22  in possession as are prescribed by law for such service in other 
149.23  cases, and shall also receive such compensation for making 
149.24  investigation and return as to vacant and unoccupied lands as 
149.25  the county board may fix, subject to appeal to the district 
149.26  court as in case of other claims against the county.  As to 
149.27  either service upon persons in possession or return as to vacant 
149.28  lands, the sheriff shall charge mileage only for one trip if the 
149.29  occupants of more than two tracts are served simultaneously, and 
149.30  in such case mileage shall be prorated and charged equitably 
149.31  against all such owners. 
149.32     (b) The secretary of state shall receive sheriff's service 
149.33  for all out-of-state interests. 
149.34     Sec. 17.  Minnesota Statutes 1996, section 281.273, is 
149.35  amended to read: 
149.36     281.273 [EXPIRATION OF TIME OF REDEMPTION ON LANDS OWNED BY 
150.1   PERSONS IN MILITARY SERVICE.] 
150.2      When a county sheriff or other person serves notice of 
150.3   expiration of the time for redemption of any parcel of real 
150.4   property from delinquent taxes upon any occupant of the real 
150.5   property, the sheriff or other person shall inquire of the 
150.6   occupant and otherwise as the sheriff or other person may deem 
150.7   proper whether the real property was owned and occupied for 
150.8   dwelling, professional, business or agricultural purposes by a 
150.9   person in the military service of the United States as defined 
150.10  in the Soldiers' and Sailors' Civil Relief Act of 1940, as 
150.11  amended, or the person's dependents at the commencement of the 
150.12  period of military service.  On finding that the real property 
150.13  is so owned, the sheriff or other person shall make a 
150.14  certificate to the county auditor, setting forth the description 
150.15  of the property, the name of the owner, the particulars of the 
150.16  owner's military service so far as ascertained or claimed, and 
150.17  the names and addresses of the persons of whom the sheriff or 
150.18  other person made inquiry.  The certificate shall be filed with 
150.19  the county auditor and shall be prima facie evidence of the 
150.20  facts stated.  If the real property described in the certificate 
150.21  becomes forfeited to the state, it shall be withheld from sale 
150.22  or conveyance as tax-forfeited property in accordance with and 
150.23  subject to the provisions of the Soldiers' and Sailors' Civil 
150.24  Relief Act of 1940, as amended, except that the requirement in 
150.25  United States Code, title 50, section 560, that the property be 
150.26  occupied by the dependent or employee of the person in military 
150.27  service does not apply.  The period of withholding from sale or 
150.28  conveyance shall be no longer than is required by that act.  If 
150.29  upon further investigation the sheriff or other person finds at 
150.30  any time that the certificate is erroneous in any particular, 
150.31  the sheriff or other person shall file a supplemental 
150.32  certificate referring to the matter in error and stating the 
150.33  facts as found.  The supplemental certificate shall be prima 
150.34  facie evidence of the facts stated, and shall supersede any 
150.35  prior certificate so far as in conflict therewith.  If it 
150.36  appears from the supplemental certificate that the owner of the 
151.1   real property affected is not entitled to have the same withheld 
151.2   from sale under the Soldiers' and Sailors' Civil Relief Act of 
151.3   1940, as amended, the property shall not be withheld from sale 
151.4   further under this section.  
151.5      Sec. 18.  Minnesota Statutes 1996, section 281.276, is 
151.6   amended to read: 
151.7      281.276 [RETURN OF SHERIFF MUST SHOW MILITARY SERVICE.] 
151.8      Unless a sheriff's certificate showing military service is 
151.9   filed as required by section 281.273, it shall be presumed that 
151.10  the owner of the property described in the notice of expiration 
151.11  of the time for redemption from delinquent taxes is not in such 
151.12  service.  The filing of the sheriff's certificate provided for 
151.13  in section 281.273 shall not affect the forfeiture of the real 
151.14  property described in such notice of the expiration of the time 
151.15  for redemption from delinquent taxes or their proceedings 
151.16  relating thereto except as expressly herein provided. 
151.17     Sec. 19.  Minnesota Statutes 1996, section 282.01, 
151.18  subdivision 8, is amended to read: 
151.19     Subd. 8.  [MINERALS IN TAX-FORFEITED LAND AND TAX-FORFEITED 
151.20  STOCKPILED METALLIC MINERALS MATERIAL SUBJECT TO MINING; 
151.21  PROCEDURES.] In case the commissioner of natural resources shall 
151.22  notify the county auditor of any county in writing that the 
151.23  minerals in any tax-forfeited land or tax-forfeited stockpiled 
151.24  metallic minerals material located on tax-forfeited land in such 
151.25  county have been designated as a mining unit as provided by law, 
151.26  or that such minerals or tax-forfeited stockpiled metallic 
151.27  minerals material are subject to a mining permit or lease issued 
151.28  therefor as provided by law, the surface of such tax-forfeited 
151.29  land shall be subject to disposal and use for mining purposes 
151.30  pursuant to such designation, permit, or lease, and shall be 
151.31  withheld from sale or lease by the county auditor until the 
151.32  commissioner shall notify the county auditor that such land has 
151.33  been removed from the list of mining units or that any mining 
151.34  permit or lease theretofore issued thereon is no longer in 
151.35  force; provided, that the surface of such tax-forfeited land may 
151.36  be leased by the county auditor as provided by law, with the 
152.1   written approval of the commissioner, subject to disposal and 
152.2   use for mining purposes as herein provided and to any special 
152.3   conditions relating thereto that the commissioner may prescribe, 
152.4   also subject to cancellation for mining purposes on three months 
152.5   written notice from the commissioner to the county auditor. 
152.6      Sec. 20.  Minnesota Statutes 1996, section 282.04, 
152.7   subdivision 1, is amended to read: 
152.8      Subdivision 1.  [TIMBER SALES; LAND LEASES AND USES.] (a) 
152.9   The county auditor may sell timber upon any tract that may be 
152.10  approved by the natural resources commissioner.  Such sale of 
152.11  timber shall be made for cash at not less than the appraised 
152.12  value determined by the county board to the highest bidder after 
152.13  not less than one week's published notice in an official paper 
152.14  within the county.  Any timber offered at such public sale and 
152.15  not sold may thereafter be sold at private sale by the county 
152.16  auditor at not less than the appraised value thereof, until such 
152.17  time as the county board may withdraw such timber from sale.  
152.18  The appraised value of the timber and the forestry practices to 
152.19  be followed in the cutting of said timber shall be approved by 
152.20  the commissioner of natural resources.  
152.21     (b) Payment of the full sale price of all timber sold on 
152.22  tax-forfeited lands shall be made in cash at the time of the 
152.23  timber sale, except in the case of oral or sealed bid auction 
152.24  sales, the down payment shall be no less than 15 percent of the 
152.25  appraised value, and the balance shall be paid prior to entry.  
152.26  In the case of auction sales that are partitioned and sold as a 
152.27  single sale with predetermined cutting blocks, the down payment 
152.28  shall be no less than 15 percent of the appraised price of the 
152.29  entire timber sale which may be held until the satisfactory 
152.30  completion of the sale or applied in whole or in part to the 
152.31  final cutting block.  The value of each separate block must be 
152.32  paid in full before any cutting may begin in that block.  With 
152.33  the permission of the county administrator the purchaser may 
152.34  enter unpaid blocks and cut necessary timber incidental to 
152.35  developing logging roads as may be needed to log other blocks 
152.36  provided that no timber may be removed from an unpaid block 
153.1   until separately scaled and paid for.  
153.2      (c) The county board may require final settlement on the 
153.3   basis of a scale of cut products.  Any parcels of land from 
153.4   which timber is to be sold by scale of cut products shall be so 
153.5   designated in the published notice of sale above mentioned, in 
153.6   which case the notice shall contain a description of such 
153.7   parcels, a statement of the estimated quantity of each species 
153.8   of timber thereon and the appraised price of each specie of 
153.9   timber for 1,000 feet, per cord or per piece, as the case may 
153.10  be.  In such cases any bids offered over and above the appraised 
153.11  prices shall be by percentage, the percent bid to be added to 
153.12  the appraised price of each of the different species of timber 
153.13  advertised on the land.  The purchaser of timber from such 
153.14  parcels shall pay in cash at the time of sale at the rate bid 
153.15  for all of the timber shown in the notice of sale as estimated 
153.16  to be standing on the land, and in addition shall pay at the 
153.17  same rate for any additional amounts which the final scale shows 
153.18  to have been cut or was available for cutting on the land at the 
153.19  time of sale under the terms of such sale.  Where the final 
153.20  scale of cut products shows that less timber was cut or was 
153.21  available for cutting under terms of such sale than was 
153.22  originally paid for, the excess payment shall be refunded from 
153.23  the forfeited tax sale fund upon the claim of the purchaser, to 
153.24  be audited and allowed by the county board as in case of other 
153.25  claims against the county.  No timber, except hardwood pulpwood, 
153.26  may be removed from such parcels of land or other designated 
153.27  landings until scaled by a person or persons designated by the 
153.28  county board and approved by the commissioner of natural 
153.29  resources.  Landings other than the parcel of land from which 
153.30  timber is cut may be designated for scaling by the county board 
153.31  by written agreement with the purchaser of the timber.  The 
153.32  county board may, by written agreement with the purchaser and 
153.33  with a consumer designated by the purchaser when the timber is 
153.34  sold by the county auditor, and with the approval of the 
153.35  commissioner of natural resources, accept the consumer's scale 
153.36  of cut products delivered at the consumer's landing.  No timber 
154.1   shall be removed until fully paid for in cash.  Small amounts of 
154.2   timber not exceeding $3,000 in appraised valuation may be sold 
154.3   for not less than the full appraised value at private sale to 
154.4   individual persons without first publishing notice of sale or 
154.5   calling for bids, provided that in case of such sale involving a 
154.6   total appraised value of more than $200 the sale shall be made 
154.7   subject to final settlement on the basis of a scale of cut 
154.8   products in the manner above provided and not more than two such 
154.9   sales, directly or indirectly to any individual shall be in 
154.10  effect at one time. 
154.11     (d) As directed by the county board, the county auditor may 
154.12  lease tax-forfeited land to individuals, corporations or 
154.13  organized subdivisions of the state at public or private vendue, 
154.14  and at such prices and under such terms as the county board may 
154.15  prescribe, for use as cottage and camp sites and for 
154.16  agricultural purposes and for the purpose of taking and removing 
154.17  of hay, stumpage, sand, gravel, clay, rock, marl, and black dirt 
154.18  therefrom, and for garden sites and other temporary uses 
154.19  provided that no leases shall be for a period to exceed ten 
154.20  years; provided, further that any leases involving a 
154.21  consideration of more than $1,500 per year, except to an 
154.22  organized subdivision of the state shall first be offered at 
154.23  public sale in the manner provided herein for sale of timber.  
154.24  Upon the sale of any such leased land, it shall remain subject 
154.25  to the lease for not to exceed one year from the beginning of 
154.26  the term of the lease.  Any rent paid by the lessee for the 
154.27  portion of the term cut off by such cancellation shall be 
154.28  refunded from the forfeited tax sale fund upon the claim of the 
154.29  lessee, to be audited and allowed by the county board as in case 
154.30  of other claims against the county. 
154.31     (e) As directed by the county board, the county auditor may 
154.32  lease tax-forfeited land to individuals, corporations, or 
154.33  organized subdivisions of the state at public or private vendue, 
154.34  at such prices and under such terms as the county board may 
154.35  prescribe, for the purpose of taking and removing for use for 
154.36  road construction and other purposes tax-forfeited stockpiled 
155.1   iron-bearing material.  The county auditor must determine that 
155.2   the material is needed and suitable for use in the construction 
155.3   or maintenance of a road, tailings basin, settling basin, dike, 
155.4   dam, bank fill, or other works on public or private property, 
155.5   and that the use would be in the best interests of the public.  
155.6   No lease shall exceed ten years.  The use of a stockpile for 
155.7   these purposes must first be approved by the commissioner of 
155.8   natural resources.  The request shall be deemed approved unless 
155.9   the requesting county is notified to the contrary by the 
155.10  commissioner of natural resources within six months after 
155.11  receipt of a request for approval for use of a stockpile.  Once 
155.12  use of a stockpile has been approved, the county may continue to 
155.13  lease it for these purposes until approval is withdrawn by the 
155.14  commissioner of natural resources. 
155.15     (f) The county auditor, with the approval of the county 
155.16  board is authorized to grant permits, licenses, and leases to 
155.17  tax-forfeited lands for the depositing of stripping, lean ores, 
155.18  tailings, or waste products from mines or ore milling plants, 
155.19  upon such conditions and for such consideration and for such 
155.20  period of time, not exceeding 15 years, as the county board may 
155.21  determine; said permits, licenses, or leases to be subject to 
155.22  approval by the commissioner of natural resources. 
155.23     (g) Any person who removes any timber from tax-forfeited 
155.24  land before said timber has been scaled and fully paid for as 
155.25  provided in this subdivision is guilty of a misdemeanor. 
155.26     (h) The county auditor may, with the approval of the county 
155.27  board, and without first offering at public sale, grant leases, 
155.28  for a term not exceeding 25 years, for the removal of peat from 
155.29  tax-forfeited lands upon such terms and conditions as the county 
155.30  board may prescribe.  Any lease for the removal of peat from 
155.31  tax-forfeited lands must first be reviewed and approved by the 
155.32  commissioner of natural resources if the lease covers 320 or 
155.33  more acres.  No lease for the removal of peat shall be made by 
155.34  the county auditor pursuant to this section without first 
155.35  holding a public hearing on the auditor's intention to lease.  
155.36  One printed notice in a legal newspaper in the county at least 
156.1   ten days before the hearing, and posted notice in the courthouse 
156.2   at least 20 days before the hearing shall be given of the 
156.3   hearing. 
156.4      Sec. 21.  Minnesota Statutes 1996, section 373.40, 
156.5   subdivision 7, is amended to read: 
156.6      Subd. 7.  [REPEALER.] This section is repealed effective 
156.7   for bonds issued after July 1, 1998 2003, but continues to apply 
156.8   to bonds issued before that date. 
156.9      Sec. 22.  Minnesota Statutes 1996, section 375.192, 
156.10  subdivision 2, is amended to read: 
156.11     Subd. 2.  [PROCEDURE, CONDITIONS.] Upon written application 
156.12  by the owner of any property, the county board may grant the 
156.13  reduction or abatement of estimated market valuation or taxes 
156.14  and of any costs, penalties, or interest on them as the board 
156.15  deems just and equitable and order the refund in whole or part 
156.16  of any taxes, costs, penalties, or interest which have been 
156.17  erroneously or unjustly paid.  No reduction or abatement may be 
156.18  granted on the basis of providing an incentive for economic 
156.19  development or redevelopment.  Except as provided in section 
156.20  375.194, the county board is authorized to consider and grant 
156.21  reductions or abatements on applications only as they relate to 
156.22  taxes payable in the current year and the two prior years; 
156.23  provided that reductions or abatements for the two prior years 
156.24  shall be considered or granted only for (i) clerical errors, or 
156.25  (ii) when the taxpayer fails to file for a reduction or an 
156.26  adjustment due to hardship, as determined by the county board.  
156.27  The application must include the social security number of the 
156.28  applicant.  The social security number is private data on 
156.29  individuals as defined by section 13.02, subdivision 12.  All 
156.30  applications must be approved by the county assessor, or, if the 
156.31  property is located in a city of the first or second class 
156.32  having a city assessor, by the city assessor, and by the county 
156.33  auditor before consideration by the county board, except that 
156.34  the part of the application which is for the abatement of 
156.35  penalty or interest must be approved by the county treasurer and 
156.36  county auditor.  Approval by the county or city assessor is not 
157.1   required for abatements of penalty or interest.  No reduction, 
157.2   abatement, or refund of any special assessments made or levied 
157.3   by any municipality for local improvements shall be made unless 
157.4   it is also approved by the board of review or similar taxing 
157.5   authority of the municipality.  Before taking action on any 
157.6   reduction or abatement where the reduction of taxes, costs, 
157.7   penalties, and interest exceed $10,000, the county board shall 
157.8   give 20 days' notice to the school board and the municipality in 
157.9   which the property is located.  The notice must describe the 
157.10  property involved, the actual amount of the reduction being 
157.11  sought, and the reason for the reduction.  If the school board 
157.12  or the municipality object to the granting of the reduction or 
157.13  abatement, the county board must refer the abatement or 
157.14  reduction to the commissioner of revenue with its 
157.15  recommendation.  The commissioner shall consider the abatement 
157.16  or reduction under section 270.07, subdivision 1.  
157.17     An appeal may not be taken to the tax court from any order 
157.18  of the county board made in the exercise of the discretionary 
157.19  authority granted in this section.  
157.20     The county auditor shall notify the commissioner of revenue 
157.21  of all abatements resulting from the erroneous classification of 
157.22  real property, for tax purposes, as nonhomestead property.  For 
157.23  the abatements relating to the current year's tax processed 
157.24  through June 30, the auditor shall notify the commissioner on or 
157.25  before July 31 of that same year of all abatement applications 
157.26  granted.  For the abatements relating to the current year's tax 
157.27  processed after June 30 through the balance of the year, the 
157.28  auditor shall notify the commissioner on or before the following 
157.29  January 31 of all applications granted.  The county auditor 
157.30  shall submit a form containing the social security number of the 
157.31  applicant and such other information the commissioner prescribes.
157.32     Sec. 23.  Minnesota Statutes 1996, section 465.71, is 
157.33  amended to read: 
157.34     465.71 [INSTALLMENT AND LEASE PURCHASES; CITIES; COUNTIES; 
157.35  SCHOOL DISTRICTS.] 
157.36     A home rule charter city, statutory city, county, town, or 
158.1   school district may purchase personal property under an 
158.2   installment contract, or lease real or personal property with an 
158.3   option to purchase under a lease-purchase agreement, by which 
158.4   contract or agreement title is retained by the seller or vendor 
158.5   or assigned to a third party as security for the purchase price, 
158.6   including interest, if any, but such purchases are subject to 
158.7   statutory and charter provisions applicable to the purchase of 
158.8   real or personal property.  For purposes of the bid requirements 
158.9   contained in section 471.345, "the amount of the contract" shall 
158.10  include the total of all lease payments for the entire term of 
158.11  the lease under a lease-purchase agreement.  The obligation 
158.12  created by a lease-purchase agreement for personal property or a 
158.13  lease-purchase agreement for real property if the amount of the 
158.14  contract for purchase of the real property is less than 
158.15  $1,000,000 shall not be included in the calculation of net debt 
158.16  for purposes of section 475.53, and shall not constitute debt 
158.17  under any other statutory provision.  No election shall be 
158.18  required in connection with the execution of a lease-purchase 
158.19  agreement authorized by this section.  The city, county, town, 
158.20  or school district must have the right to terminate a lease- 
158.21  purchase agreement at the end of any fiscal year during its term.
158.22     Sec. 24.  Minnesota Statutes 1996, section 465.81, 
158.23  subdivision 1, is amended to read: 
158.24     Subdivision 1.  [SCOPE.] Sections 465.81 to 465.87 
158.25  establish procedures to be used by counties, cities, or towns 
158.26  that adopt by resolution an agreement providing a plan to 
158.27  provide combined services during an initial cooperation period 
158.28  that may not exceed two years and then: 
158.29     (1) to merge into a single unit of government over the 
158.30  succeeding two-year period; or 
158.31     (2) to agree to apportion the entire area of at least one 
158.32  local government unit between or among two or more local 
158.33  government units contiguous to the unit to be apportioned, 
158.34  resulting in the elimination of at least one local government 
158.35  unit over the succeeding two years.  
158.36     Sec. 25.  Minnesota Statutes 1996, section 465.81, 
159.1   subdivision 3, is amended to read: 
159.2      Subd. 3.  [COMBINATION REQUIREMENTS.] Counties may combine 
159.3   with one or more other counties.  Cities may combine with one or 
159.4   more other cities or with one or more towns.  Towns may combine 
159.5   with one or more other towns or with one or more cities.  Units 
159.6   that combine must be contiguous.  A county, through the adoption 
159.7   of a resolution by all county boards that are affected by the 
159.8   combination, may apportion its territory between or among two or 
159.9   more counties contiguous to the county that is to be 
159.10  apportioned.  A city, through the adoption of a resolution by 
159.11  all city councils that are affected by the combination, may 
159.12  apportion its territory between or among two or more cities 
159.13  contiguous to the city that is to be apportioned.  A township, 
159.14  through the adoption of a resolution by all town boards or city 
159.15  councils that are affected by the combination, may apportion its 
159.16  territory between or among two or more townships or cities 
159.17  contiguous to the township that is to be apportioned. 
159.18     Sec. 26.  Minnesota Statutes 1996, section 465.82, 
159.19  subdivision 1, is amended to read: 
159.20     Subdivision 1.  [ADOPTION AND STATE AGENCY REVIEW.] Each 
159.21  governing body that proposes to combine take part in a 
159.22  combination under sections 465.81 to 465.87 must adopt by 
159.23  resolution adopt a plan for cooperation and combination.  The 
159.24  plan must address each item in this section.  The plan must be 
159.25  specific for any item that will occur within three years and may 
159.26  be general or set forth alternative proposals for an item that 
159.27  will occur more than three years in the future.  The plan must 
159.28  be submitted to the board of government innovation and 
159.29  cooperation for review and comment.  For a metropolitan area 
159.30  local government unit, the plan must also be submitted to the 
159.31  metropolitan council for review and comment.  The council may 
159.32  point out any resources or technical assistance it may be able 
159.33  to provide a governing body submitting a plan under this 
159.34  subdivision.  Significant modifications and specific resolutions 
159.35  of items must be submitted to the board and council, if 
159.36  appropriate, for review and comment.  In the official newspaper 
160.1   of each local government unit proposed for proposing to take 
160.2   part in the combination, the governing body must shall publish 
160.3   at least a summary of the adopted plans, each significant 
160.4   modification and resolution of items, and, if appropriate, the 
160.5   results of each board and council, if appropriate, review and 
160.6   comment.  If a territory of a unit is to be apportioned between 
160.7   or among two or more units contiguous to the unit that is to be 
160.8   apportioned, the plan must specify the area that will become a 
160.9   part of each remaining unit. 
160.10     Sec. 27.  Minnesota Statutes 1996, section 465.82, 
160.11  subdivision 2, is amended to read: 
160.12     Subd. 2.  [CONTENTS OF PLAN.] The plan must state:  
160.13     (1) the specific cooperative activities the units will 
160.14  engage in during the first two years of the venture; 
160.15     (2) the steps to be taken to effect the merger of the 
160.16  governmental units, with completion no later than four years 
160.17  after the process begins; 
160.18     (3) the steps by which a single governing body will be 
160.19  created or, when the entire territory of a unit will be 
160.20  apportioned between or among two or more units contiguous to the 
160.21  unit that is to be apportioned, the steps to be taken by the 
160.22  governing bodies of the remaining units to provide for 
160.23  representation of the residents of the apportioned unit; 
160.24     (4) changes in services provided, facilities used, and 
160.25  administrative operations and staffing required to effect the 
160.26  preliminary cooperative activities and the final merger, and a 
160.27  two-, five-, and ten-year projection of expenditures for each 
160.28  unit if it combined and if it remained separate; 
160.29     (5) treatment of employees of the merging governmental 
160.30  units, specifically including provisions for reassigning 
160.31  employees, dealing with unions exclusive representatives, and 
160.32  providing financial incentives to encourage early retirements; 
160.33     (6) financial arrangements for the merger, specifically 
160.34  including responsibility for debt service on outstanding 
160.35  obligations of the merging entities units; 
160.36     (7) one- and two-year impact analysis analyses, prepared by 
161.1   the granting state agency at the request of the local government 
161.2   unit, of major state aid revenues received for each unit if it 
161.3   combined and if it remained separate.  This would also include, 
161.4   including an impact analysis, prepared by the department of 
161.5   revenue, of any property tax revenue implications, if any, 
161.6   associated with tax increment financing districts and fiscal 
161.7   disparities under chapter 276A or 473F resulting from the 
161.8   merger; 
161.9      (8) procedures for a referendum to be held before the 
161.10  proposed combination to approve combining the local government 
161.11  units, specifically stating whether a majority of those voting 
161.12  in each district proposed for combination or a majority of those 
161.13  voting on the question in the entire area proposed for 
161.14  combination would be is needed to pass the referendum; and 
161.15     (9) a time schedule for implementation. 
161.16     Notwithstanding clause (3) or any other law to the 
161.17  contrary, all current members of the governing bodies of the 
161.18  local governmental government units that propose to combine 
161.19  under sections 465.81 to 465.88 may serve on the initial 
161.20  governing body of the combined unit until a gradual reduction in 
161.21  membership is achieved by foregoing election of new members when 
161.22  terms expire until the number permitted by other law is reached. 
161.23     Sec. 28.  Minnesota Statutes 1996, section 465.82, is 
161.24  amended by adding a subdivision to read: 
161.25     Subd. 3.  [INTERIM GOVERNING BODY.] The plan for 
161.26  cooperation and combination adopted in accordance with 
161.27  subdivision 1 may establish an interim governing body to act on 
161.28  behalf of the new local government unit before the effective 
161.29  date of the combination.  If established, the interim governing 
161.30  body must consist of at least a majority of the elected 
161.31  officials from each local government unit taking part in the 
161.32  combination.  If the plan establishes an interim governing body, 
161.33  the governing body of each unit taking part in the combination 
161.34  shall appoint its representatives to serve on the interim 
161.35  governing body.  An interim governing body may not take any 
161.36  official action on behalf of the new local government unit 
162.1   before approval of the combination through the referendum 
162.2   required by section 465.84.  After approval of the combination 
162.3   through the referendum, and before the effective date of the 
162.4   combination, an interim governing body may exercise all 
162.5   statutory authority of the governing body of the new local 
162.6   government unit, including the authority to enter into contracts 
162.7   and adopt policies and local ordinances. 
162.8      Sec. 29.  Minnesota Statutes 1996, section 465.87, 
162.9   subdivision 1a, is amended to read: 
162.10     Subd. 1a.  [ADDITIONAL ELIGIBILITY.] A local government 
162.11  unit is eligible to apply for aid under this section if it has 
162.12  combined with another unit of government in accordance with any 
162.13  process within chapter 414 that results in the elimination of at 
162.14  least one local government unit and a copy of the municipal 
162.15  board's order or orders combining the two units of government is 
162.16  forwarded to the board.  If the municipal board issues two or 
162.17  more orders within 30 days for the annexation of the area of an 
162.18  entire township by two or more cities contiguous to the 
162.19  township, the cities subject to the board's order are eligible 
162.20  to receive pro rata shares, on the basis of their populations, 
162.21  of the total amount of cooperation and combination aid all 
162.22  participating units of government would be eligible to receive 
162.23  under subdivision 2.  If two units of government cooperate in 
162.24  the orderly annexation of the entire area of a third unit of 
162.25  government which has a population of at least 8,000 people, the 
162.26  two units of government are each eligible for the amount of aid 
162.27  specified in subdivision 2.  
162.28     Sec. 30.  Minnesota Statutes 1996, section 465.87, 
162.29  subdivision 2, is amended to read: 
162.30     Subd. 2.  [AMOUNT OF AID.] The annual amount of aid to be 
162.31  paid to each eligible local government unit may not exceed the 
162.32  following per capita amounts, based on the combined population 
162.33  of the units, as estimated by the state demographer, or 
162.34  $100,000, whichever is less. 
162.35        Combined Population                   Aid
162.36         after Combination                 Per Capita
163.1                0 -  2,500                     $25 
163.2            2,500 -  5,000                      20 
163.3            5,000 - 20,000                      15
163.4               over 20,000                      10
163.5   If two or more units are eligible for a single award under this 
163.6   subdivision, the award must be divided among the units in pro 
163.7   rata shares based on each unit's population.  Payments must be 
163.8   made on the dates provided for payments of local government aid 
163.9   under section 477A.013, beginning in the year during which 
163.10  substantial cooperative activities under the plan initially 
163.11  occur, unless those activities begin after July 1, in which case 
163.12  the initial aid payment must be made in the following calendar 
163.13  year.  Payments to a local government unit that qualifies for 
163.14  aid under subdivision 1a must be made on the dates provided for 
163.15  payments of local government aids under section 477A.013, 
163.16  beginning in the calendar year during which a combination in any 
163.17  form is expected to be ordered by the Minnesota municipal board 
163.18  as evidenced in a resolution adopted by July 1 by the affected 
163.19  local government units declaring their intent to combine.  The 
163.20  resolutions must certify that the combination agreement 
163.21  addressing all issues relative to the combination is 
163.22  substantially complete.  The total amount of aid paid may not 
163.23  exceed the amount appropriated to the board for purposes of this 
163.24  section. 
163.25     Sec. 31.  Minnesota Statutes 1996, section 465.88, is 
163.26  amended to read: 
163.27     465.88 [PLANNING AID FOR CONSOLIDATION STUDIES.] 
163.28     Two or more local units of government with a combined 
163.29  population of 2,500 15,000 or less based on the most recent 
163.30  decennial census may apply to the board for aid to assist in the 
163.31  study of a possible consolidation or combination.  To be 
163.32  eligible for receipt of aid under this section, the two local 
163.33  units of government must be subject to a municipal board motion 
163.34  proceeding to form a consolidation commission under section 
163.35  414.041, subdivision 2, or the governing bodies of the local 
163.36  units of government must have approved a resolution expressing 
164.1   their intent to develop and submit a combination plan for 
164.2   consideration by the board.  The application must be on a form 
164.3   prescribed by the board and must provide a proposed budget 
164.4   detailing how the requested aid shall is to be used.  The 
164.5   governing bodies of the local units of government must shall 
164.6   also approve resolutions certifying that the requested aid is 
164.7   essential for paying a portion of the costs associated with the 
164.8   consolidation or combination study.  The board may grant up to 
164.9   $10,000 in aid for each application received.  Two or more local 
164.10  government units with a combined population of at least 2,500 
164.11  but not greater than 15,000, based on the most recent decennial 
164.12  census, must agree to provide at least $1 for the study of a 
164.13  possible consolidation or combination for each dollar of aid 
164.14  granted by the board under this section. 
164.15     Sec. 32.  Minnesota Statutes 1996, section 477A.011, 
164.16  subdivision 36, is amended to read: 
164.17     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
164.18  paragraphs (b) and, (c), and (d), "city aid base" means, for 
164.19  each city, the sum of the local government aid and equalization 
164.20  aid it was originally certified to receive in calendar year 1993 
164.21  under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
164.22  and 5, and the amount of disparity reduction aid it received in 
164.23  calendar year 1993 under Minnesota Statutes 1992, section 
164.24  273.1398, subdivision 3. 
164.25     (b) For aids payable in 1996 and thereafter, a city that in 
164.26  1992 or 1993 transferred an amount from governmental funds to 
164.27  its sewer and water fund, which amount exceeded its net levy for 
164.28  taxes payable in the year in which the transfer occurred, has a 
164.29  "city aid base" equal to the sum of (i) its city aid base, as 
164.30  calculated under paragraph (a), and (ii) one-half of the 
164.31  difference between its city aid distribution under section 
164.32  477A.013, subdivision 9, for aids payable in 1995 and its city 
164.33  aid base for aids payable in 1995. 
164.34     (c) The city aid base for any city with a population less 
164.35  than 500 is increased by $40,000 for aids payable in calendar 
164.36  year 1995 and thereafter, and the maximum amount of total aid it 
165.1   may receive under section 477A.013, subdivision 9, paragraph 
165.2   (c), is also increased by $40,000 for aids payable in calendar 
165.3   year 1995 only, provided that: 
165.4      (i) the average total tax capacity rate for taxes payable 
165.5   in 1995 exceeds 200 percent; 
165.6      (ii) the city portion of the tax capacity rate exceeds 100 
165.7   percent; and 
165.8      (iii) its city aid base is less than $60 per capita. 
165.9      (d) The city aid base for a city is increased by $20,000 in 
165.10  1998 and thereafter and the maximum amount of total aid it may 
165.11  receive under section 477A.013, subdivision 9, paragraph (c), is 
165.12  also increased by $20,000 in calendar year 1997 only, provided 
165.13  that: 
165.14     (i) the city has a population in 1994 of 2,500 or more; 
165.15     (ii) the city is located in a county, outside of the 
165.16  metropolitan area, which contains a city of the first class; 
165.17     (iii) the city's net tax capacity used in calculating its 
165.18  1996 aid under section 477A.013 is less than $400 per capita; 
165.19  and 
165.20     (iv) at least four percent of the total net tax capacity, 
165.21  for taxes payable in 1996, of property located in the city is 
165.22  classified as railroad property. 
165.23     Sec. 33.  Minnesota Statutes 1996, section 611.27, 
165.24  subdivision 4, is amended to read: 
165.25     Subd. 4.  [COUNTY PORTION OF COSTS.] That portion of 
165.26  subdivision 1 directing counties to pay the costs of public 
165.27  defense service shall not be in effect between after January 1, 
165.28  1995, and July 1, 1997.  This subdivision only relates to costs 
165.29  associated with felony, gross misdemeanor, juvenile, and 
165.30  misdemeanor public defense services.  Notwithstanding the 
165.31  provisions of this subdivision, in the first, fifth, seventh, 
165.32  ninth, and tenth judicial districts, the cost of juvenile and 
165.33  misdemeanor public defense services for cases opened prior to 
165.34  January 1, 1995, shall remain the responsibility of the 
165.35  respective counties in those districts, even though the cost of 
165.36  these services may occur after January 1, 1995. 
166.1      Sec. 34.  Laws 1992, chapter 511, article 2, section 52, is 
166.2   amended to read: 
166.3      Sec. 52.  [WATERSHED DISTRICT LEVIES.] 
166.4      (a) The Nine Mile Creek watershed district, the 
166.5   Riley-Purgatory Bluff Creek watershed district, the Minnehaha 
166.6   Creek watershed district, the Coon Creek watershed district, and 
166.7   the Lower Minnesota River watershed district may levy in 1992 
166.8   and thereafter a tax not to exceed $200,000 on property within 
166.9   the district for the administrative fund.  The levy authorized 
166.10  under this section is in lieu of section 103D.905, subdivision 
166.11  3.  The administrative fund shall be used for the purposes 
166.12  contained in Minnesota Statutes, section 103D.905, subdivision 
166.13  3.  The board of managers shall make the levy for the 
166.14  administrative fund in accordance with Minnesota Statutes, 
166.15  section 103D.915. 
166.16     (b) The Wild Rice watershed district may levy, for taxes 
166.17  payable in 1993, 1994, 1995, 1996, and 1997, 1998, 1999, 2000, 
166.18  2001, and 2002, an ad valorem tax not to exceed $200,000 on 
166.19  property within the district for the administrative fund.  The 
166.20  additional $75,000 above the amount authorized in Minnesota 
166.21  Statutes, section 103D.905, subdivision 3, must be used for 
166.22  costs incurred in connection with the development and 
166.23  maintenance of cost-sharing projects with the United States Army 
166.24  Corps of Engineers.  The board of managers shall make the levy 
166.25  for the administrative fund in accordance with Minnesota 
166.26  Statutes, section 103D.915. 
166.27     Sec. 35.  [TEMPORARY EXTENSION OF TAX ABATEMENT AUTHORITY.] 
166.28     Upon written application of the owner of a qualified 
166.29  property, the governing body of a county that contains a city of 
166.30  the first class may grant the reduction or abatement of 
166.31  estimated market valuation or taxes and of any costs, penalties, 
166.32  or interest on them as the governing body deems just and 
166.33  equitable as it relates to taxes payable in 1992, 1993, and 
166.34  1994.  As used in this section, a qualified property is a 
166.35  property that meets all of the following requirements: 
166.36     (1) it is a class C commercial office building constructed 
167.1   before 1930, that has less than 200,000 square feet in area, and 
167.2   contains asbestos; 
167.3      (2) it has a downtown skyway system connection that was 
167.4   financed by municipal revenue bonds; 
167.5      (3) it is in the process of tax forfeiture; and 
167.6      (4) its market value declined by more than 70 percent 
167.7   between 1991 and 1996. 
167.8      The authority to grant abatements under this section 
167.9   terminates on December 31, 1997. 
167.10     Sec. 36.  [BROOKLYN PARK; CERTIFICATION OF CHARGES; 
167.11  DEFINITIONS.] 
167.12     Subdivision 1.  [SCOPE.] For the purpose of sections 37 and 
167.13  38, the terms defined in this section have the meanings given 
167.14  them. 
167.15     Subd. 2.  [ASSOCIATION.] "Association" has the meaning 
167.16  given it in Minnesota Statutes, section 515B.1-103, paragraph 
167.17  (4). 
167.18     Subd. 3.  [AUTHORITY.] "Authority" means the Brooklyn Park 
167.19  economic development authority. 
167.20     Subd. 4.  [COMMON ELEMENTS.] "Common elements" has the 
167.21  meaning given it in Minnesota Statutes, section 515B.1-103, 
167.22  paragraph (7). 
167.23     Subd. 5.  [COMMON ELEMENT IMPROVEMENTS.] "Common element 
167.24  improvements" means any physical repair, replacement, or 
167.25  modification of, or addition to, the common elements of a common 
167.26  interest community. 
167.27     Subd. 6.  [COMMON INTEREST COMMUNITY.] "Common interest 
167.28  community" has the meaning given it in Minnesota Statutes, 
167.29  section 515B.1-103, paragraph (10). 
167.30     Subd. 7.  [UNIT.] "Unit" has the meaning given it in 
167.31  Minnesota Statutes, section 515B.1-103, paragraph (33). 
167.32     Subd. 8.  [UNIT OWNER.] "Unit owner" has the meaning given 
167.33  it in Minnesota Statutes, section 515B.1-103, paragraph (35). 
167.34     Sec. 37.  [AUTHORITY GRANTED.] 
167.35     If: 
167.36     (1) the authority lends or agrees to lend funds to an 
168.1   association for the provision or construction of common element 
168.2   improvements; 
168.3      (2) the association has duly levied common expense 
168.4   assessments against the units in order to provide the 
168.5   association with funds to: 
168.6      (i) pay principal and interest on the loan; 
168.7      (ii) provide coverage in excess of principal and interest 
168.8   payments on the loan; 
168.9      (iii) create or replenish reserve funds pledged as security 
168.10  for the loan; or 
168.11     (iv) pay expenses related to the loan or the assessments 
168.12  that are identified in the loan agreement between the authority 
168.13  and the association; 
168.14     (3) a unit owner has become delinquent in the payment of 
168.15  any assessment installment; and 
168.16     (4) the association has declared the entire amount of the 
168.17  assessment due and owing pursuant to Minnesota Statutes, section 
168.18  515B.3-115, paragraph (k), then 
168.19  the authority may certify the delinquent assessment, together 
168.20  with interest and penalties, to the county auditor for 
168.21  collection to the same extent and in the same manner provided by 
168.22  law for the assessment and collection of real estate taxes. 
168.23     Sec. 38.  [DISCLOSURE REQUIRED.] 
168.24     For any common interest community located in the city of 
168.25  Brooklyn Park, the disclosure statement required under Minnesota 
168.26  Statutes, section 515B.4-102, must include a description of the 
168.27  potential applicability and consequences of section 37. 
168.28     Sec. 39.  [CITY OF DULUTH; REASSESSMENTS OF CANCELED 
168.29  SPECIAL ASSESSMENTS.] 
168.30     Subdivision 1.  [AUTHORIZATION.] Notwithstanding any law, 
168.31  city charter provision, or ordinance to the contrary, if a 
168.32  parcel of tax-forfeited land located in the city of Duluth is 
168.33  returned to private ownership and the parcel is benefited by an 
168.34  improvement for which special assessments were canceled because 
168.35  of the forfeiture, the city council may, upon notice and hearing 
168.36  as provided for in the original assessment, make a reassessment 
169.1   or a new assessment as to the parcel in an amount equal to the 
169.2   amount remaining unpaid on the original assessment. 
169.3      Subd. 2.  [LOCAL APPROVAL REQUIRED.] This section is 
169.4   effective upon approval by the governing body of the city of 
169.5   Duluth and compliance with Minnesota Statutes, section 645.021, 
169.6   subdivision 3. 
169.7      Sec. 40.  [FLOODWOOD JOINT RECREATION BOARD TAX.] 
169.8      Subdivision 1.  [LEVY AUTHORIZATION.] Each year, the 
169.9   Floodwood joint recreation board may levy a tax not to exceed 
169.10  $25,000 on the value of property situated in the territory of 
169.11  independent school district No. 698 in accordance with this 
169.12  section.  Property in territory in the school district may be 
169.13  made subject to the tax permitted by this section by the 
169.14  agreement of the governing body or town board of the city or 
169.15  town where it is located.  The agreement may be by resolution of 
169.16  a governing body or town board or by a joint powers agreement 
169.17  pursuant to Minnesota Statutes, section 471.59.  If levied, the 
169.18  tax is in addition to all other taxes on the property subject to 
169.19  it permitted to be levied for park and recreation purposes by 
169.20  the cities and towns other than for the support of the joint 
169.21  recreation board.  It shall be disregarded in the calculation of 
169.22  all other mill rate or per capita tax levy limitations imposed 
169.23  by law or charter upon them.  A city or town may withdraw its 
169.24  agreement to future taxes by notice to the recreation board and 
169.25  the county auditor unless provided otherwise by a joint powers 
169.26  agreement.  The tax shall be collected by the applicable county 
169.27  auditor and treasurer and paid directly to the Floodwood joint 
169.28  recreation board.  
169.29     Subd. 2.  [LOCAL APPROVAL.] This section is effective in 
169.30  the city of Floodwood, the towns of Arrowhead, Fine Lakes, 
169.31  Floodwood, Halden, Van Buren, Cedar Valley, Prairie Lake, and 
169.32  Unorganized Township 52-21 in St. Louis county, and Unorganized 
169.33  Township 52-22 in Aitkin county the day after compliance with 
169.34  Minnesota Statutes, section 645.021, subdivision 3, by the 
169.35  governing body of each.  This section is effective for each 
169.36  city, town, and unorganized township regardless of the action of 
170.1   the others.  
170.2      Approval of this section is not agreement to be subject to 
170.3   the tax permitted by it.  Agreement to the tax must be by 
170.4   separate action in accordance with subdivision 1. 
170.5      Sec. 41.  [MINNEAPOLIS UTILITY CHARGE ASSESSMENTS.] 
170.6      Subdivision 1.  [BECOMES LIEN WHEN DELINQUENT.] An 
170.7   assessment that has been levied prior to the date of enactment 
170.8   of this act by the city of Minneapolis for delinquent utility 
170.9   charges, and interest and penalties on the charges under 
170.10  Minnesota Statutes, section 272.32; Laws 1969, chapter 499; Laws 
170.11  1973, chapter 320; or Laws 1994, chapter 587, article 9, section 
170.12  4, with accruing interest, is a lien upon all property included 
170.13  in the assessment, concurrent with general taxes, from the date 
170.14  the utility charges become delinquent, regardless of the date 
170.15  the assessment is levied.  The time of effect of a lien attached 
170.16  for delinquent utility charge assessments supersedes any 
170.17  contrary law in Minnesota Statutes, section 272.32 or 429.061. 
170.18     Subd. 2.  [WHEN DELINQUENT; STATEMENT REQUIRED.] Utility 
170.19  charges become delinquent for purposes of this section when they 
170.20  are set forth in a statement sent by the city of Minneapolis to 
170.21  the address of the property subject to the utility charges and 
170.22  the last known address of the owner of the property and are not 
170.23  paid in full on or before the due date stated in the statement.  
170.24  Upon request, the utility billing department shall provide a 
170.25  written statement with the total cumulative accounting of all 
170.26  levied and pending utility charges within ten working days of 
170.27  the request.  Pending charges shall not be valid against third 
170.28  parties who rely upon the written statement or if the written 
170.29  statement is not provided within the requisite time period. 
170.30     Subd. 3.  [UTILITY CHARGES DEFINED.] "Utility charges," in 
170.31  this section, includes all fees, taxes, special charges, or 
170.32  other charges imposed by the city of Minneapolis in connection 
170.33  with the provision of services for sewer, water, solid waste 
170.34  collection and management, nuisance abatement, or other services 
170.35  or improvements specified in Minnesota Statutes, section 
170.36  429.101; Laws 1969, chapter 499; and Laws 1973, chapter 320.  
171.1      Subd. 4.  [NOT CONVEYANCES.] The statement issued by the 
171.2   city of Minneapolis for utility charges or any instrument in 
171.3   writing created in connection with any assessment for delinquent 
171.4   utility charges subject to this section are not conveyances as 
171.5   defined in Minnesota Statutes, section 507.01, and are not 
171.6   subject to the requirements of Minnesota Statutes, chapter 507, 
171.7   regarding conveyances of real estate. 
171.8      Sec. 42.  [SAUK RIVER WATERSHED DISTRICT.] 
171.9      Subdivision 1.  [LEVY AUTHORIZATION.] Notwithstanding 
171.10  Minnesota Statutes, section 103D.905, subdivision 3, the Sauk 
171.11  River watershed district may levy up to $150,000 for its 
171.12  administrative fund for taxes levied in 1997, payable in 1998. 
171.13     Subd. 2.  [EFFECTIVE DATE.] Pursuant to Minnesota Statutes, 
171.14  section 645.023, subdivision 1, this section is effective 
171.15  without local approval the day following final enactment. 
171.16     Sec. 43.  [VIRGINIA AREA AMBULANCE DISTRICT.] 
171.17     Subdivision 1.  [AGREEMENT; POWERS; GENERAL 
171.18  DESCRIPTION.] (a) The cities of Virginia, Mountain Iron, 
171.19  Eveleth, Leonidas, Iron Junction, and Gilbert, and the towns of 
171.20  Pike, Clinton, McDavitt, Colvin, Sandy, Cherry, Ellsburg, Wouri, 
171.21  Lavell, Fayal, Cotton, and Embarrass may by resolution of their 
171.22  city councils and town boards establish the Virginia area 
171.23  ambulance district. 
171.24     (b) The St. Louis county board may by resolution provide 
171.25  that property located in unorganized townships described in 
171.26  clauses (1) to (7) may be included within the district: 
171.27     (1) Township 61 North, Range 17 West; 
171.28     (2) Township 59 North, Ranges 16 and 18 West; 
171.29     (3) Township 56 North, Range 16 West; 
171.30     (4) Township 60 North, Range 18 West; 
171.31     (5) Township 55 North, Range 15; 
171.32     (6) Township 56, Range 17; and 
171.33     (7) Township 57, Range 16.  
171.34     (c) The district shall make payments of the proceeds of the 
171.35  tax authorized in this section to the city of Virginia, which 
171.36  shall provide ambulance services throughout the district and may 
172.1   exercise all the powers of the cities and towns that relate to 
172.2   ambulance service anywhere within its territory.  
172.3      (d) Any other contiguous town or home rule charter or 
172.4   statutory city may join the district with the agreement of the 
172.5   cities and towns that comprise the district at the time of its 
172.6   application to join.  Action to join the district may be taken 
172.7   by the city council or town board of the city or town.  
172.8      Subd. 2.  [BOARD.] The district shall be governed by a 
172.9   board composed of one member appointed by the city council or 
172.10  town board of each city and town in the district.  A district 
172.11  board member may, but is not required to, be a member of a city 
172.12  council or town board.  Except as provided in this section, 
172.13  members shall serve two-year terms ending the first Monday in 
172.14  January and until their successors are appointed and qualified.  
172.15  Of the members first appointed, as far as possible, the terms of 
172.16  one-half shall expire on the first Monday in January in the 
172.17  first year following appointment and one-half the first Monday 
172.18  in January in the second year.  The terms of those initially 
172.19  appointed must be determined by lot.  If an additional member is 
172.20  added because an additional city or town joins the district, the 
172.21  member's term must be fixed so that, as far as possible, the 
172.22  terms of one-half of all the members expire on the same date. 
172.23     Subd. 3.  [TAX.] The district may impose a property tax on 
172.24  real and personal property in the district in an amount 
172.25  sufficient to discharge its operating expenses and debt payable 
172.26  in each year but not to exceed .0528 percent of the district's 
172.27  taxable market value.  The St. Louis county auditor shall 
172.28  collect the tax and distribute it to the Virginia area ambulance 
172.29  district. 
172.30     Subd. 4.  [EXPENDITURES.] The taxes collected under 
172.31  subdivision 3 shall be used for licensed ambulance services and 
172.32  first responders.  Licensed ambulance services shall receive 80 
172.33  percent of the available funds and first responders shall 
172.34  receive 20 percent of the available funds.  The amounts 
172.35  allocated to first responders shall be used for education, 
172.36  training, and reimbursement for their allowable expenses.  Only 
173.1   education and training that meets the recognized education and 
173.2   training guidelines set by the emergency medical services 
173.3   regulatory board under Minnesota Statutes, chapter 144E, shall 
173.4   be reimbursable under this subdivision. 
173.5      Subd. 5.  [PUBLIC INDEBTEDNESS.] The district may incur 
173.6   debt in the manner provided for a municipality by Minnesota 
173.7   Statutes, chapter 475, when necessary to accomplish a duty 
173.8   charged to it. 
173.9      Subd. 6.  [WITHDRAWAL.] Upon two years' notice, a city or 
173.10  town may withdraw from the district.  Its territory shall remain 
173.11  subject to taxation for debt incurred prior to its withdrawal 
173.12  under Minnesota Statutes, chapter 475. 
173.13     Subd. 7.  [EFFECTIVE DATE.] This section is effective (1) 
173.14  in the cities of Virginia, Mountain Iron, Eveleth, Leonidas, 
173.15  Iron Junction, and Gilbert, and the towns of Pike, Clinton, 
173.16  McDavitt, Colvin, Sandy, Cherry, Ellsburg, Wouri, Lavell, Fayal, 
173.17  Cotton, and Embarrass, the day after compliance with Minnesota 
173.18  Statutes, section 645.021, subdivision 2, by the governing body 
173.19  of each, and (2) for unorganized townships described in 
173.20  subdivision 1, paragraph (b), clauses (1) to (7), the day after 
173.21  compliance with Minnesota Statutes, section 645.021, subdivision 
173.22  2, by the St. Louis county board, provided that the district 
173.23  must be established by September 1, 2000.  Any of the cities, 
173.24  towns, and unorganized townships listed in subdivision 1 that do 
173.25  not join the district initially may join the district after its 
173.26  establishment. 
173.27     Sec. 44.  [JOINT DITCH NO. 1, CHISAGO AND WASHINGTON 
173.28  COUNTIES.] 
173.29     Subdivision 1.  [ABANDONMENT.] Notwithstanding Minnesota 
173.30  Statutes, section 103E.811, the counties of Chisago and 
173.31  Washington may, after making a determination that joint ditch 
173.32  no. 1 is not of public benefit and utility, order its 
173.33  abandonment. 
173.34     Subd. 2.  [LEVY.] Notwithstanding Minnesota Statutes, 
173.35  section 103E.725, Chisago and Washington counties may levy an ad 
173.36  valorem tax for the purposes of subdivision 1. 
174.1      Sec. 45.  [WASHINGTON COUNTY; LEVY TO FUND THE COUNTY 
174.2   HOUSING AND REDEVELOPMENT AUTHORITY.] 
174.3      Subdivision 1.  [AUTHORIZATION.] In addition to all other 
174.4   levies authorized by law, Washington county may levy an amount 
174.5   not to exceed $2,000,000 in 1997 for taxes payable in 1998 only, 
174.6   and transfer the proceeds of the levy to the Washington county 
174.7   housing and redevelopment authority to be used to support the 
174.8   activities of the authority in the city of Landfall. 
174.9      Subd. 2.  [LOCAL APPROVAL.] This section is effective upon 
174.10  approval by the governing body of Washington county and 
174.11  compliance with Minnesota Statutes, section 645.021, subdivision 
174.12  3. 
174.13     Sec. 46.  [EFFECTIVE DATE.] 
174.14     Sections 2 to 4 are effective the day following final 
174.15  enactment.  
174.16     Sections 6 and 8 to 12 are effective for taxes levied in 
174.17  1997, payable in 1998, and thereafter. 
174.18     Section 7 is effective beginning with the 1997 assessment 
174.19  and ending with the 2002 assessment, for qualifying improvements 
174.20  made after January 2, 1993, to a residence that has been 
174.21  relocated; provided, that any residence that originally 
174.22  qualifies in that time period will be allowed to receive the 
174.23  benefits provided under section 7 for the full ten-year time 
174.24  period.  In order to qualify for a market value exclusion under 
174.25  Minnesota Statutes, section 273.11, subdivision 10, for the 1997 
174.26  assessment for improvements made to a relocated residence, a 
174.27  homeowner must notify the assessor by June 1, 1997. 
174.28     Section 32 is effective for aids paid in 1998 and 
174.29  thereafter. 
174.30     Sections 36 to 38 are effective the day after the governing 
174.31  body of Brooklyn Park complies with Minnesota Statutes, section 
174.32  645.021, subdivision 3.