as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to state government; increasing the state 1.3 share of education funding; reducing income taxes; 1.4 reducing local property tax levies; reducing the sales 1.5 tax; eliminating the MinnesotaCare provider tax; 1.6 limiting increases in market value; amending Minnesota 1.7 Statutes 1998, sections 62J.041, subdivision 1; 1.8 62Q.095, subdivision 6; 123B.53, subdivisions 4 and 5; 1.9 123B.54; 123B.57, subdivision 4; 126C.13, subdivision 1.10 1; 126C.17, subdivision 5; 214.16, subdivisions 2 and 1.11 3; 270B.01, subdivision 8; 270B.14, subdivision 1; 1.12 273.11, subdivision 1a; 273.13, subdivisions 22 and 1.13 25; 273.1382, subdivision 1; 273.1398, subdivision 1a; 1.14 290.06, subdivision 2c; 290.091, subdivisions 1, 2, 1.15 and 6; and 297A.02, subdivision 1; repealing Minnesota 1.16 Statutes 1998, sections 13.99, subdivision 86b; 1.17 144.1484, subdivision 2; 273.1382, subdivision 1a; 1.18 295.50; 295.51; 295.52; 295.53; 295.54; 295.55; 1.19 295.56; 295.57; 295.58; 295.582; and 295.59. 1.20 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.21 Section 1. Minnesota Statutes 1998, section 62J.041, 1.22 subdivision 1, is amended to read: 1.23 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 1.24 section, the following definitions apply. 1.25 (b) "Health plan company" has the definition provided in 1.26 section 62Q.01. 1.27 (c) "Total expenditures" means incurred claims or 1.28 expenditures on health care services, administrative expenses, 1.29 charitable contributions, and all other payments made by health 1.30 plan companies out of premium revenues. 1.31 (d) "Net expenditures" means total expenditures minus 1.32 exempted taxes and assessments and payments or allocations made 2.1 to establish or maintain reserves. 2.2 (e) "Exempted taxes and assessments" means direct payments 2.3 for taxes to government agencies, contributions to the Minnesota 2.4 comprehensive health association, the medical assistance 2.5 provider's surcharge under section 256.9657, the MinnesotaCare 2.6 provider tax under Minnesota Statutes 1998, section 295.52, 2.7 assessments by the health coverage reinsurance association, 2.8 assessments by the Minnesota life and health insurance guaranty 2.9 association, assessments by the Minnesota risk adjustment 2.10 association, and any new assessments imposed by federal or state 2.11 law. 2.12 (f) "Consumer cost-sharing or subscriber liability" means 2.13 enrollee coinsurance, copayment, deductible payments, and 2.14 amounts in excess of benefit plan maximums. 2.15 Sec. 2. Minnesota Statutes 1998, section 62Q.095, 2.16 subdivision 6, is amended to read: 2.17 Subd. 6. [EXEMPTION.] A health plan company, to the extent 2.18 that it operates as a staff model health plan companyas defined2.19in section 295.50, subdivision 12b,by employing allied 2.20 independent health care providers to deliver health care 2.21 services to enrollees, is exempt from this section. For 2.22 purposes of this subdivision, "staff model health plan company" 2.23 means a health plan company as defined in section 62Q.01, 2.24 subdivision 4, that employs one or more types of health care 2.25 provider to deliver health care services to the health plan 2.26 company's enrollees. 2.27 Sec. 3. Minnesota Statutes 1998, section 123B.53, 2.28 subdivision 4, is amended to read: 2.29 Subd. 4. [DEBT SERVICE EQUALIZATION REVENUE.](a)For 2.30 fiscal years19952001 and later, the debt service equalization 2.31 revenue of a district equals the eligible debt service revenue 2.32minus the amount raised by a levy of ten percent times the2.33adjusted net tax capacityof the district. 2.34(b) For fiscal year 1993, debt service equalization revenue2.35equals one-third of the amount calculated in paragraph (a).2.36(c) For fiscal year 1994, debt service equalization revenue3.1equals two-thirds of the amount calculated in paragraph (a).3.2 Sec. 4. Minnesota Statutes 1998, section 123B.53, 3.3 subdivision 5, is amended to read: 3.4 Subd. 5. [EQUALIZED DEBT SERVICE LEVY.] To obtain debt 3.5 service equalization revenue, a district must levy an amount not 3.6 to exceed the district's debt service equalization revenue times 3.7 the lesser of one or the ratio of: 3.8 (1) the quotient derived by dividing the adjusted net tax 3.9 capacity of the district for the year before the year the levy 3.10 is certified by the resident pupil units in the district for the 3.11 school year ending in the year prior to the year the levy is 3.12 certified; to 3.13 (2)$4,707.50$10,000. 3.14 Sec. 5. Minnesota Statutes 1998, section 123B.54, is 3.15 amended to read: 3.16 123B.54 [DEBT SERVICE APPROPRIATION.] 3.17 (a)$35,480,000 in fiscal year 1998, $38,159,000 in fiscal3.18year 1999, and$38,390,000 in fiscal year 2000 and $234,000,000 3.19 in fiscal year 2001 and each year thereafter is appropriated 3.20 from the general fund to the commissioner of children, families, 3.21 and learning for payment of debt service equalization aid under 3.22 section 123B.53.The 2000 appropriation includes $3,842,000 for3.231999 and $34,548,000 for 2000.3.24 (b) The appropriations in paragraph (a) must be reduced by 3.25 the amount of any money specifically appropriated for the same 3.26 purpose in any year from any state fund. 3.27 Sec. 6. Minnesota Statutes 1998, section 123B.57, 3.28 subdivision 4, is amended to read: 3.29 Subd. 4. [HEALTH AND SAFETY LEVY.] To receive health and 3.30 safety revenue, a district may levy an amount equal to the 3.31 district's health and safety revenue as defined in subdivision 3 3.32 multiplied by the lesser of one, or the ratio of the quotient 3.33 derived by dividing the adjusted net tax capacity of the 3.34 district for the year preceding the year the levy is certified 3.35 by the resident pupil units in the district for the school year 3.36 to which the levy is attributable, to$4,707.50$10,000. 4.1 Sec. 7. Minnesota Statutes 1998, section 126C.13, 4.2 subdivision 1, is amended to read: 4.3 Subdivision 1. [GENERAL EDUCATION TAX RATE.] The 4.4 commissioner must establish the general education tax rate by 4.5 July 1 of each year for levies payable in the following year. 4.6 The general education tax capacity rate must be a rate, rounded 4.7 up to the nearest hundredth of a percent, that, when applied to 4.8 the adjusted net tax capacity for all districts, raises the 4.9 amount specified in this subdivision. The general education tax 4.10 rate must be the rate that raises $1,385,500,000 for fiscal year 4.11 1999, $1,325,500,000 for fiscal year 2000, and 4.12$1,387,100,000$1,130,000,000 for fiscal year 2001, and later 4.13 fiscal years. The general education tax rate may not be changed 4.14 due to changes or corrections made to a district's adjusted net 4.15 tax capacity after the tax rate has been established. If the 4.16 levy target for fiscal year 1999 or fiscal year 2000 is changed 4.17 by another law enacted during the 1997 or 1998 session, the 4.18 commissioner shall reduce the general education levy target in 4.19 this section by the amount of the reduction in the enacted law. 4.20 Sec. 8. Minnesota Statutes 1998, section 126C.17, 4.21 subdivision 5, is amended to read: 4.22 Subd. 5. [REFERENDUM EQUALIZATION REVENUE.] A district's 4.23 referendum equalization revenue equals$350$450 times the 4.24 district's resident pupil units for that year. 4.25 Referendum equalization revenue must not exceed a 4.26 district's total referendum revenue for that year. 4.27 Sec. 9. Minnesota Statutes 1998, section 214.16, 4.28 subdivision 2, is amended to read: 4.29 Subd. 2. [BOARD COOPERATION REQUIRED.] The board shall 4.30 assist the commissioner of health in data collection activities 4.31 required under Laws 1992, chapter 549, article 7, and shall4.32assist the commissioner of revenue in activities related to4.33collection of the health care provider tax required under Laws4.341992, chapter 549, article 9. Upon the request of the 4.35 commissioneror the commissioner of revenue, the board shall 4.36 make available names and addresses of current licensees and 5.1 provide other information or assistance as needed. 5.2 Sec. 10. Minnesota Statutes 1998, section 214.16, 5.3 subdivision 3, is amended to read: 5.4 Subd. 3. [GROUNDS FOR DISCIPLINARY ACTION.] The board 5.5 shall take disciplinary action, which may include license 5.6 revocation, against a regulated person for: 5.7 (1) intentional failure to provide the commissioner of 5.8 health with the data required under chapter 62J; 5.9(2) intentional failure to provide the commissioner of5.10revenue with data on gross revenue and other information5.11required for the commissioner to implement sections 295.50 to5.12295.58;5.13(3) intentional failure to pay the health care provider tax5.14required under section 295.52;and 5.15(4)(2) entering into a contract or arrangement that is 5.16 prohibited under sections 62J.70 to 62J.73. 5.17 Sec. 11. Minnesota Statutes 1998, section 270B.01, 5.18 subdivision 8, is amended to read: 5.19 Subd. 8. [MINNESOTA TAX LAWS.] For purposes of this 5.20 chapter only, unless expressly stated otherwise, "Minnesota tax 5.21 laws" means the taxes, refunds, and fees administered by or paid 5.22 to the commissioner under chapters 115B (except taxes imposed 5.23 under sections 115B.21 to 115B.24), 289A (except taxes imposed 5.24 under sections 298.01, 298.015, and 298.24), 290, 290A, 291, 5.25 297A, and 297Hand sections 295.50 to 295.59, or any similar 5.26 Indian tribal tax administered by the commissioner pursuant to 5.27 any tax agreement between the state and the Indian tribal 5.28 government, and includes any laws for the assessment, 5.29 collection, and enforcement of those taxes, refunds, and fees. 5.30 Sec. 12. Minnesota Statutes 1998, section 270B.14, 5.31 subdivision 1, is amended to read: 5.32 Subdivision 1. [DISCLOSURE TO COMMISSIONER OF HUMAN 5.33 SERVICES.] (a) On the request of the commissioner of human 5.34 services, the commissioner shall disclose return information 5.35 regarding taxes imposed by chapter 290, and claims for refunds 5.36 under chapter 290A, to the extent provided in paragraph (b) and 6.1 for the purposes set forth in paragraph (c). 6.2 (b) Data that may be disclosed are limited to data relating 6.3 to the identity, whereabouts, employment, income, and property 6.4 of a person owing or alleged to be owing an obligation of child 6.5 support. 6.6 (c) The commissioner of human services may request data 6.7 only for the purposes of carrying out the child support 6.8 enforcement program and to assist in the location of parents who 6.9 have, or appear to have, deserted their children. Data received 6.10 may be used only as set forth in section 256.978. 6.11 (d) The commissioner shall provide the records and 6.12 information necessary to administer the supplemental housing 6.13 allowance to the commissioner of human services. 6.14 (e) At the request of the commissioner of human services, 6.15 the commissioner of revenue shall electronically match the 6.16 social security numbers and names of participants in the 6.17 telephone assistance plan operated under sections 237.69 to 6.18 237.711, with those of property tax refund filers, and determine 6.19 whether each participant's household income is within the 6.20 eligibility standards for the telephone assistance plan. 6.21 (f) The commissioner may provide records and information 6.22 collected under Minnesota Statutes 1998, sections 295.50 to 6.23 295.59, to the commissioner of human services for purposes of 6.24 the Medicaid Voluntary Contribution and Provider-Specific Tax 6.25 Amendments of 1991, Public Law Number 102-234. Upon the written 6.26 agreement by the United States Department of Health and Human 6.27 Services to maintain the confidentiality of the data, the 6.28 commissioner may provide records and information collected under 6.29 Minnesota Statutes 1998, sections 295.50 to 295.59, to the 6.30 Health Care Financing Administration section of the United 6.31 States Department of Health and Human Services for purposes of 6.32 meeting federal reporting requirements. 6.33 (g) The commissioner may provide records and information to 6.34 the commissioner of human services as necessary to administer 6.35 the early refund of refundable tax credits. 6.36 (h) The commissioner may disclose information to the 7.1 commissioner of human services necessary to verify income for 7.2 eligibility and premium payment under the MinnesotaCare program, 7.3 under section 256L.05, subdivision 2. 7.4 Sec. 13. Minnesota Statutes 1998, section 273.11, 7.5 subdivision 1a, is amended to read: 7.6 Subd. 1a. [LIMITED MARKET VALUE.]In the case of all7.7property classified as agricultural homestead or nonhomestead,7.8residential homestead or nonhomestead, or noncommercial seasonal7.9recreational residential, the assessor shall compare the value7.10with that determined in the preceding assessment. The amount of7.11the increase entered in the current assessment shall not exceed7.12the greater of (1) ten percent of the value in the preceding7.13assessment, or (2) one-fourth of the difference between the7.14current assessment and the preceding assessment.(a) Property 7.15 classified under section 273.13 may not have a market value for 7.16 property tax purposes greater than the sum of: 7.17 (1) its estimated market value for the previous assessment 7.18 year or, if applicable, its limited market value for the 7.19 previous assessment year, plus 7.20 (2) an amount obtained by multiplying the market value in 7.21 clause (1) by the lesser of (i) five percent or (ii) the 7.22 percentage rate of increase in the Consumer Price Index for the 7.23 12-month period ending October of the preceding assessment year. 7.24 This limitation shall not apply to increases in value due 7.25 to improvements. For purposes of this subdivision, the term 7.26"assessment""market value" means the value prior to any 7.27 exclusion under subdivision 16. 7.28The provisions of this subdivision shall be in effect only7.29for assessment years 1993 through 2001.7.30 (b) For the first assessment year after the sale or 7.31 conveyance of property, the value of the property for property 7.32 tax purposes shall be the assessor's estimated market value. 7.33 (c) For purposes of this subdivision, "Consumer Price 7.34 Index" means the Consumer Price Index of all urban consumers as 7.35 determined by the United States Department of Labor, Bureau of 7.36 Labor Statistics. 8.1 (d) For purposes of the assessment/sales ratio study 8.2 conducted under section 127A.48, and the computation of state 8.3 aids paid under chapters 122A, 123A, 123B, 124D, 125A, 126C, 8.4 127A, and 477A, market values and net tax capacities determined 8.5 under this subdivision and subdivision 16, shall be used. 8.6 Sec. 14. Minnesota Statutes 1998, section 273.13, 8.7 subdivision 22, is amended to read: 8.8 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 8.9 23, real estate which is residential and used for homestead 8.10 purposes is class 1. The market value of class 1a property must 8.11 be determined based upon the value of the house, garage, and 8.12 land. 8.13 The first $75,000 of market value of class 1a property has 8.14 a net class rate ofone0.5 percent of its market value; and the 8.15 market value of class 1a property that exceeds $75,000 has a 8.16 class rate of1.70.85 percent of its market value. 8.17 (b) Class 1b property includes homestead real estate or 8.18 homestead manufactured homes used for the purposes of a 8.19 homestead by 8.20 (1) any blind person, or the blind person and the blind 8.21 person's spouse; or 8.22 (2) any person, hereinafter referred to as "veteran," who: 8.23 (i) served in the active military or naval service of the 8.24 United States; and 8.25 (ii) is entitled to compensation under the laws and 8.26 regulations of the United States for permanent and total 8.27 service-connected disability due to the loss, or loss of use, by 8.28 reason of amputation, ankylosis, progressive muscular 8.29 dystrophies, or paralysis, of both lower extremities, such as to 8.30 preclude motion without the aid of braces, crutches, canes, or a 8.31 wheelchair; and 8.32 (iii) has acquired a special housing unit with special 8.33 fixtures or movable facilities made necessary by the nature of 8.34 the veteran's disability, or the surviving spouse of the 8.35 deceased veteran for as long as the surviving spouse retains the 8.36 special housing unit as a homestead; or 9.1 (3) any person who: 9.2 (i) is permanently and totally disabled and 9.3 (ii) receives 90 percent or more of total income from 9.4 (A) aid from any state as a result of that disability; or 9.5 (B) supplemental security income for the disabled; or 9.6 (C) workers' compensation based on a finding of total and 9.7 permanent disability; or 9.8 (D) social security disability, including the amount of a 9.9 disability insurance benefit which is converted to an old age 9.10 insurance benefit and any subsequent cost of living increases; 9.11 or 9.12 (E) aid under the federal Railroad Retirement Act of 1937, 9.13 United States Code Annotated, title 45, section 228b(a)5; or 9.14 (F) a pension from any local government retirement fund 9.15 located in the state of Minnesota as a result of that 9.16 disability; or 9.17 (G) pension, annuity, or other income paid as a result of 9.18 that disability from a private pension or disability plan, 9.19 including employer, employee, union, and insurance plans and 9.20 (iii) has household income as defined in section 290A.03, 9.21 subdivision 5, of $50,000 or less; or 9.22 (4) any person who is permanently and totally disabled and 9.23 whose household income as defined in section 290A.03, 9.24 subdivision 5, is 275 percent or less of the federal poverty 9.25 level. 9.26 Property is classified and assessed under clause (4) only 9.27 if the government agency or income-providing source certifies, 9.28 upon the request of the homestead occupant, that the homestead 9.29 occupant satisfies the disability requirements of this paragraph. 9.30 Property is classified and assessed pursuant to clause (1) 9.31 only if the commissioner of economic security certifies to the 9.32 assessor that the homestead occupant satisfies the requirements 9.33 of this paragraph. 9.34 Permanently and totally disabled for the purpose of this 9.35 subdivision means a condition which is permanent in nature and 9.36 totally incapacitates the person from working at an occupation 10.1 which brings the person an income. The first $32,000 market 10.2 value of class 1b property has a net class rate of.45.225 10.3 percent of its market value. The remaining market value of 10.4 class 1b property has a net class rate using the rates for class 10.5 1 or class 2a property, whichever is appropriate, of similar 10.6 market value. 10.7 (c) Class 1c property is commercial use real property that 10.8 abuts a lakeshore line and is devoted to temporary and seasonal 10.9 residential occupancy for recreational purposes but not devoted 10.10 to commercial purposes for more than 250 days in the year 10.11 preceding the year of assessment, and that includes a portion 10.12 used as a homestead by the owner, which includes a dwelling 10.13 occupied as a homestead by a shareholder of a corporation that 10.14 owns the resort or a partner in a partnership that owns the 10.15 resort, even if the title to the homestead is held by the 10.16 corporation or partnership. For purposes of this clause, 10.17 property is devoted to a commercial purpose on a specific day if 10.18 any portion of the property, excluding the portion used 10.19 exclusively as a homestead, is used for residential occupancy 10.20 and a fee is charged for residential occupancy. Class 1c 10.21 property has a class rate ofone0.5 percent of total market 10.22 value with the following limitation: the area of the property 10.23 must not exceed 100 feet of lakeshore footage for each cabin or 10.24 campsite located on the property up to a total of 800 feet and 10.25 500 feet in depth, measured away from the lakeshore. If any 10.26 portion of the class 1c resort property is classified as class 10.27 4c under subdivision 25, the entire property must meet the 10.28 requirements of subdivision 25, paragraph (d), clause (1), to 10.29 qualify for class 1c treatment under this paragraph. 10.30 (d) Class 1d property includes structures that meet all of 10.31 the following criteria: 10.32 (1) the structure is located on property that is classified 10.33 as agricultural property under section 273.13, subdivision 23; 10.34 (2) the structure is occupied exclusively by seasonal farm 10.35 workers during the time when they work on that farm, and the 10.36 occupants are not charged rent for the privilege of occupying 11.1 the property, provided that use of the structure for storage of 11.2 farm equipment and produce does not disqualify the property from 11.3 classification under this paragraph; 11.4 (3) the structure meets all applicable health and safety 11.5 requirements for the appropriate season; and 11.6 (4) the structure is not salable as residential property 11.7 because it does not comply with local ordinances relating to 11.8 location in relation to streets or roads. 11.9 The market value of class 1d property has the same class 11.10 rates as class 1a property under paragraph (a). 11.11 Sec. 15. Minnesota Statutes 1998, section 273.13, 11.12 subdivision 25, is amended to read: 11.13 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 11.14 estate containing four or more units and used or held for use by 11.15 the owner or by the tenants or lessees of the owner as a 11.16 residence for rental periods of 30 days or more. Class 4a also 11.17 includes hospitals licensed under sections 144.50 to 144.56, 11.18 other than hospitals exempt under section 272.02, and contiguous 11.19 property used for hospital purposes, without regard to whether 11.20 the property has been platted or subdivided. Class 4a property 11.21 in a city with a population of 5,000 or less, that is (1) 11.22 located outside of the metropolitan area, as defined in section 11.23 473.121, subdivision 2, or outside any county contiguous to the 11.24 metropolitan area, and (2) whose city boundary is at least 15 11.25 miles from the boundary of any city with a population greater 11.26 than 5,000 has a class rate of 2.15 percent of market value. All 11.27 other class 4a property has a class rate of 2.5 percent of 11.28 market value. For purposes of this paragraph, population has 11.29 the same meaning given in section 477A.011, subdivision 3. 11.30 (b) Class 4b includes: 11.31 (1) residential real estate containing less than four units 11.32 that does not qualify as class 4bb, other than seasonal 11.33 residential, and recreational; 11.34 (2) manufactured homes not classified under any other 11.35 provision; 11.36 (3) a dwelling, garage, and surrounding one acre of 12.1 property on a nonhomestead farm classified under subdivision 23, 12.2 paragraph (b) containing two or three units; 12.3 (4) unimproved property that is classified residential as 12.4 determined under subdivision 33. 12.5 Class 4b property has a class rate of 1.7 percent of market 12.6 value. 12.7 (c) Class 4bb includes: 12.8 (1) nonhomestead residential real estate containing one 12.9 unit, other than seasonal residential, and recreational; and 12.10 (2) a single family dwelling, garage, and surrounding one 12.11 acre of property on a nonhomestead farm classified under 12.12 subdivision 23, paragraph (b). 12.13 Class 4bb has a class rate of 1.25 percent on the first 12.14 $75,000 of market value and a class rate of 1.7 percent of its 12.15 market value that exceeds $75,000. 12.16 Property that has been classified as seasonal recreational 12.17 residential property at any time during which it has been owned 12.18 by the current owner or spouse of the current owner does not 12.19 qualify for class 4bb. 12.20 (d) Class 4c property includes: 12.21 (1) except as provided in subdivision 22, paragraph (c), 12.22 real property devoted to temporary and seasonal residential 12.23 occupancy for recreation purposes, including real property 12.24 devoted to temporary and seasonal residential occupancy for 12.25 recreation purposes and not devoted to commercial purposes for 12.26 more than 250 days in the year preceding the year of 12.27 assessment. For purposes of this clause, property is devoted to 12.28 a commercial purpose on a specific day if any portion of the 12.29 property is used for residential occupancy, and a fee is charged 12.30 for residential occupancy. In order for a property to be 12.31 classified as class 4c, seasonal recreational residential for 12.32 commercial purposes, at least 40 percent of the annual gross 12.33 lodging receipts related to the property must be from business 12.34 conducted during 90 consecutive days and either (i) at least 60 12.35 percent of all paid bookings by lodging guests during the year 12.36 must be for periods of at least two consecutive nights; or (ii) 13.1 at least 20 percent of the annual gross receipts must be from 13.2 charges for rental of fish houses, boats and motors, 13.3 snowmobiles, downhill or cross-country ski equipment, or charges 13.4 for marina services, launch services, and guide services, or the 13.5 sale of bait and fishing tackle. For purposes of this 13.6 determination, a paid booking of five or more nights shall be 13.7 counted as two bookings. Class 4c also includes commercial use 13.8 real property used exclusively for recreational purposes in 13.9 conjunction with class 4c property devoted to temporary and 13.10 seasonal residential occupancy for recreational purposes, up to 13.11 a total of two acres, provided the property is not devoted to 13.12 commercial recreational use for more than 250 days in the year 13.13 preceding the year of assessment and is located within two miles 13.14 of the class 4c property with which it is used. Class 4c 13.15 property classified in this clause also includes the remainder 13.16 of class 1c resorts provided that the entire property including 13.17 that portion of the property classified as class 1c also meets 13.18 the requirements for class 4c under this clause; otherwise the 13.19 entire property is classified as class 3. Owners of real 13.20 property devoted to temporary and seasonal residential occupancy 13.21 for recreation purposes and all or a portion of which was 13.22 devoted to commercial purposes for not more than 250 days in the 13.23 year preceding the year of assessment desiring classification as 13.24 class 1c or 4c, must submit a declaration to the assessor 13.25 designating the cabins or units occupied for 250 days or less in 13.26 the year preceding the year of assessment by January 15 of the 13.27 assessment year. Those cabins or units and a proportionate 13.28 share of the land on which they are located will be designated 13.29 class 1c or 4c as otherwise provided. The remainder of the 13.30 cabins or units and a proportionate share of the land on which 13.31 they are located will be designated as class 3a. The owner of 13.32 property desiring designation as class 1c or 4c property must 13.33 provide guest registers or other records demonstrating that the 13.34 units for which class 1c or 4c designation is sought were not 13.35 occupied for more than 250 days in the year preceding the 13.36 assessment if so requested. The portion of a property operated 14.1 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 14.2 nonresidential facility operated on a commercial basis not 14.3 directly related to temporary and seasonal residential occupancy 14.4 for recreation purposes shall not qualify for class 1c or 4c; 14.5 (2) qualified property used as a golf course if: 14.6 (i) it is open to the public on a daily fee basis. It may 14.7 charge membership fees or dues, but a membership fee may not be 14.8 required in order to use the property for golfing, and its green 14.9 fees for golfing must be comparable to green fees typically 14.10 charged by municipal courses; and 14.11 (ii) it meets the requirements of section 273.112, 14.12 subdivision 3, paragraph (d). 14.13 A structure used as a clubhouse, restaurant, or place of 14.14 refreshment in conjunction with the golf course is classified as 14.15 class 3a property. 14.16 (3) real property up to a maximum of one acre of land owned 14.17 by a nonprofit community service oriented organization; provided 14.18 that the property is not used for a revenue-producing activity 14.19 for more than six days in the calendar year preceding the year 14.20 of assessment and the property is not used for residential 14.21 purposes on either a temporary or permanent basis. For purposes 14.22 of this clause, a "nonprofit community service oriented 14.23 organization" means any corporation, society, association, 14.24 foundation, or institution organized and operated exclusively 14.25 for charitable, religious, fraternal, civic, or educational 14.26 purposes, and which is exempt from federal income taxation 14.27 pursuant to section 501(c)(3), (10), or (19) of the Internal 14.28 Revenue Code of 1986, as amended through December 31, 1990. For 14.29 purposes of this clause, "revenue-producing activities" shall 14.30 include but not be limited to property or that portion of the 14.31 property that is used as an on-sale intoxicating liquor or 3.2 14.32 percent malt liquor establishment licensed under chapter 340A, a 14.33 restaurant open to the public, bowling alley, a retail store, 14.34 gambling conducted by organizations licensed under chapter 349, 14.35 an insurance business, or office or other space leased or rented 14.36 to a lessee who conducts a for-profit enterprise on the 15.1 premises. Any portion of the property which is used for 15.2 revenue-producing activities for more than six days in the 15.3 calendar year preceding the year of assessment shall be assessed 15.4 as class 3a. The use of the property for social events open 15.5 exclusively to members and their guests for periods of less than 15.6 24 hours, when an admission is not charged nor any revenues are 15.7 received by the organization shall not be considered a 15.8 revenue-producing activity; 15.9 (4) post-secondary student housing of not more than one 15.10 acre of land that is owned by a nonprofit corporation organized 15.11 under chapter 317A and is used exclusively by a student 15.12 cooperative, sorority, or fraternity for on-campus housing or 15.13 housing located within two miles of the border of a college 15.14 campus; 15.15 (5) manufactured home parks as defined in section 327.14, 15.16 subdivision 3; and 15.17 (6) real property that is actively and exclusively devoted 15.18 to indoor fitness, health, social, recreational, and related 15.19 uses, is owned and operated by a not-for-profit corporation, and 15.20 is located within the metropolitan area as defined in section 15.21 473.121, subdivision 2. 15.22 Class 4c property has a class rate of 1.8 percent of market 15.23 value, except that (i) for each parcel of seasonal residential 15.24 recreational property not used for commercial purposes the first 15.25 $75,000 of market value has a class rate of1.250.625 percent, 15.26 and the market value that exceeds $75,000 has a class rate 15.27 of2.21.1 percent, (ii) manufactured home parks assessed under 15.28 clause (5) have a class rate of two percent, and (iii) property 15.29 described in paragraph (d), clause (4), has the same class rate 15.30 as the rate applicable to the first tier of class 4bb 15.31 nonhomestead residential real estate under paragraph (c). 15.32 (e) Class 4d property is qualifying low-income rental 15.33 housing certified to the assessor by the housing finance agency 15.34 under sections 273.126 and 462A.071. Class 4d includes land in 15.35 proportion to the total market value of the building that is 15.36 qualifying low-income rental housing. For all properties 16.1 qualifying as class 4d, the market value determined by the 16.2 assessor must be based on the normal approach to value using 16.3 normal unrestricted rents. 16.4 Class 4d property has a class rate of one percent of market 16.5 value. 16.6 (f) Class 4e property consists of the residential portion 16.7 of any structure located within a city that was converted from 16.8 nonresidential use to residential use, provided that: 16.9 (1) the structure had formerly been used as a warehouse; 16.10 (2) the structure was originally constructed prior to 1940; 16.11 (3) the conversion was done after December 31, 1995, but 16.12 before January 1, 2003; and 16.13 (4) the conversion involved an investment of at least 16.14 $25,000 per residential unit. 16.15 Class 4e property has a class rate of 2.3 percent, provided 16.16 that a structure is eligible for class 4e classification only in 16.17 the 12 assessment years immediately following the conversion. 16.18 Sec. 16. Minnesota Statutes 1998, section 273.1382, 16.19 subdivision 1, is amended to read: 16.20 Subdivision 1. [EDUCATION HOMESTEAD CREDIT.] Each year, 16.21 the respective county auditors shall determine the initial tax 16.22 rate for each school district for the general education levy 16.23 certified under section 126C.13, subdivision 2 or 3. That rate 16.24 plus the school district's education homestead credit tax rate 16.25 adjustment under section 275.08, subdivision 1e, shall be the 16.26 general education homestead credit local tax rate for the 16.27 district. The auditor shall then determine a general education 16.28 homestead credit for each homestead within the county equal to 16.29 68 percent for taxes payable in 1999 and69100 percent for 16.30 taxes payable in 2000 and thereafter of the general education 16.31 homestead credit local tax rate times the net tax capacity of 16.32 the homestead for the taxes payable year. The amount of general 16.33 education homestead credit for a homestead may not exceed $320 16.34 for taxes payable in 1999 and$335$263 for taxes payable in 16.35 2000 and thereafter. In the case of an agricultural homestead, 16.36 only the net tax capacity of the house, garage, and surrounding 17.1 one acre of land shall be used in determining the property's 17.2 education homestead credit. 17.3 Sec. 17. Minnesota Statutes 1998, section 273.1398, 17.4 subdivision 1a, is amended to read: 17.5 Subd. 1a. [TAX BASE DIFFERENTIAL.] For aids payable in 17.6 2000, the tax base differential is equal to the sum of the 17.7 following percentages of the assessment year 1998 taxable market 17.8 values of the indicated classes: (1) 0.5 percent of class 1a or 17.9 2a homestead property up to $75,000 in value, plus (2) 0.85 17.10 percent of class 1a or 2a homestead property over $75,000 in 17.11 value, plus (3) 0.225 percent of class 1b homestead property up 17.12 to $32,000 in value, plus (4) 0.625 percent of class 4c 17.13 noncommercial seasonal residential recreational property up to 17.14 $75,000 in value, plus (5) 1.1 percent of class 4c noncommercial 17.15 seasonal residential recreational property over $75,000 in 17.16 value, plus (6) 0.5 percent of class 1c commercial seasonal 17.17 residential recreational property, plus (7) for purposes of 17.18 computing the fiscal disparity adjustment only,the tax base17.19differential is0.2 percent ofthe assessment year 1998 taxable17.20market value ofclass 3 commercial-industrial property over 17.21 $150,000. In the case of class 2a agricultural homestead 17.22 property, only the value of the house, garage, and surrounding 17.23 one acre of land is included in the amount described in clauses 17.24 (1) and (2). 17.25 Sec. 18. Minnesota Statutes 1998, section 290.06, 17.26 subdivision 2c, is amended to read: 17.27 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 17.28 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 17.29 married individuals filing joint returns and surviving spouses 17.30 as defined in section 2(a) of the Internal Revenue Code must be 17.31 computed by applying to their taxable net income the following 17.32 schedule of rates: 17.33 (1) On the first$19,910$25,680,65 percent; 17.34 (2) On all over$19,910$25,680, but not 17.35 over$79,120$102,050,87 percent; 17.36 (3) On all over$79,120$102,050,8.57.5 percent. 18.1 Married individuals filing separate returns, estates, and 18.2 trusts must compute their income tax by applying the above rates 18.3 to their taxable income, except that the income brackets will be 18.4 one-half of the above amounts. 18.5 (b) The income taxes imposed by this chapter upon unmarried 18.6 individuals must be computed by applying to taxable net income 18.7 the following schedule of rates: 18.8 (1) On the first$13,620$17,570,65 percent; 18.9 (2) On all over$13,620$17,570, but not 18.10 over$44,750$57,720,87 percent; 18.11 (3) On all over$44,750$57,720,8.57.5 percent. 18.12 (c) The income taxes imposed by this chapter upon unmarried 18.13 individuals qualifying as a head of household as defined in 18.14 section 2(b) of the Internal Revenue Code must be computed by 18.15 applying to taxable net income the following schedule of rates: 18.16 (1) On the first$16,770$21,630,65 percent; 18.17 (2) On all over$16,770$21,630, but not 18.18 over$67,390$86,920,87 percent; 18.19 (3) On all over$67,390$86,920,8.57.5 percent. 18.20 (d) In lieu of a tax computed according to the rates set 18.21 forth in this subdivision, the tax of any individual taxpayer 18.22 whose taxable net income for the taxable year is less than an 18.23 amount determined by the commissioner must be computed in 18.24 accordance with tables prepared and issued by the commissioner 18.25 of revenue based on income brackets of not more than $100. The 18.26 amount of tax for each bracket shall be computed at the rates 18.27 set forth in this subdivision, provided that the commissioner 18.28 may disregard a fractional part of a dollar unless it amounts to 18.29 50 cents or more, in which case it may be increased to $1. 18.30 (e) An individual who is not a Minnesota resident for the 18.31 entire year must compute the individual's Minnesota income tax 18.32 as provided in this subdivision. After the application of the 18.33 nonrefundable credits provided in this chapter, the tax 18.34 liability must then be multiplied by a fraction in which: 18.35 (1) the numerator is the individual's Minnesota source 18.36 federal adjusted gross income as defined in section 62 of the 19.1 Internal Revenue Code disregarding income or loss flowing from a 19.2 corporation having a valid election for the taxable year under 19.3 section 1362 of the Internal Revenue Code but which is not an 19.4 "S" corporation under section 290.9725 and increased by the 19.5 additions required under section 290.01, subdivision 19a, 19.6 clauses (1) and (9), after applying the allocation and 19.7 assignability provisions of section 290.081, clause (a), or 19.8 290.17; and 19.9 (2) the denominator is the individual's federal adjusted 19.10 gross income as defined in section 62 of the Internal Revenue 19.11 Code of 1986, increased by the amounts specified in section 19.12 290.01, subdivision 19a, clauses (1), (5), (6), (7), and (9), 19.13 and reduced by the amounts specified in section 290.01, 19.14 subdivision 19b, clauses (1), (11), and (12). 19.15 Sec. 19. Minnesota Statutes 1998, section 290.091, 19.16 subdivision 1, is amended to read: 19.17 Subdivision 1. [IMPOSITION OF TAX.] In addition to all 19.18 other taxes imposed by this chapter a tax is imposed on 19.19 individuals, estates, and trusts equal to the excess (if any) of 19.20 (a) an amount equal toseven6.5 percent of alternative 19.21 minimum taxable income after subtracting the exemption amount, 19.22 over 19.23 (b) the regular tax for the taxable year. 19.24 Sec. 20. Minnesota Statutes 1998, section 290.091, 19.25 subdivision 2, is amended to read: 19.26 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 19.27 this section, the following terms have the meanings given: 19.28 (a) "Alternative minimum taxable income" means the sum of 19.29 the following for the taxable year: 19.30 (1) the taxpayer's federal alternative minimum taxable 19.31 income as defined in section 55(b)(2) of the Internal Revenue 19.32 Code; 19.33 (2) the taxpayer's itemized deductions allowed in computing 19.34 federal alternative minimum taxable income, but excluding: 19.35 (i) the Minnesota charitable contribution deduction; 19.36 (ii) the medical expense deduction; 20.1 (iii) the casualty, theft, and disaster loss deduction; and 20.2 (iv) the impairment-related work expenses of a disabled 20.3 person; 20.4 (3) for depletion allowances computed under section 613A(c) 20.5 of the Internal Revenue Code, with respect to each property (as 20.6 defined in section 614 of the Internal Revenue Code), to the 20.7 extent not included in federal alternative minimum taxable 20.8 income, the excess of the deduction for depletion allowable 20.9 under section 611 of the Internal Revenue Code for the taxable 20.10 year over the adjusted basis of the property at the end of the 20.11 taxable year (determined without regard to the depletion 20.12 deduction for the taxable year); 20.13 (4) to the extent not included in federal alternative 20.14 minimum taxable income, the amount of the tax preference for 20.15 intangible drilling cost under section 57(a)(2) of the Internal 20.16 Revenue Code determined without regard to subparagraph (E); 20.17 (5) to the extent not included in federal alternative 20.18 minimum taxable income, the amount of interest income as 20.19 provided by section 290.01, subdivision 19a, clause (1); 20.20 (6) amounts added to federal taxable income as provided by 20.21 section 290.01, subdivision 19a, clauses (5), (6), and (7); 20.22 less the sum of the amounts determined under the following 20.23 clauses (1) to (4): 20.24 (1) interest income as defined in section 290.01, 20.25 subdivision 19b, clause (1); 20.26 (2) an overpayment of state income tax as provided by 20.27 section 290.01, subdivision 19b, clause (2), to the extent 20.28 included in federal alternative minimum taxable income; 20.29 (3) the amount of investment interest paid or accrued 20.30 within the taxable year on indebtedness to the extent that the 20.31 amount does not exceed net investment income, as defined in 20.32 section 163(d)(4) of the Internal Revenue Code. Interest does 20.33 not include amounts deducted in computing federal adjusted gross 20.34 income; and 20.35 (4) amounts subtracted from federal taxable income as 20.36 provided by section 290.01, subdivision 19b, clauses (11) and 21.1 (12). 21.2 In the case of an estate or trust, alternative minimum 21.3 taxable income must be computed as provided in section 59(c) of 21.4 the Internal Revenue Code. 21.5 (b) "Investment interest" means investment interest as 21.6 defined in section 163(d)(3) of the Internal Revenue Code. 21.7 (c) "Tentative minimum tax" equalsseven6.5 percent of 21.8 alternative minimum taxable income after subtracting the 21.9 exemption amount determined under subdivision 3. 21.10 (d) "Regular tax" means the tax that would be imposed under 21.11 this chapter (without regard to this section and section 21.12 290.032), reduced by the sum of the nonrefundable credits 21.13 allowed under this chapter. 21.14 (e) "Net minimum tax" means the minimum tax imposed by this 21.15 section. 21.16 (f) "Minnesota charitable contribution deduction" means a 21.17 charitable contribution deduction under section 170 of the 21.18 Internal Revenue Code to or for the use of an entity described 21.19 in section 290.21, subdivision 3, clauses (a) to (e). When the 21.20 federal deduction for charitable contributions is limited under 21.21 section 170(b) of the Internal Revenue Code, the allowable 21.22 contributions in the year of contribution are deemed to be first 21.23 contributions to entities described in section 290.21, 21.24 subdivision 3, clauses (a) to (e). 21.25 Sec. 21. Minnesota Statutes 1998, section 290.091, 21.26 subdivision 6, is amended to read: 21.27 Subd. 6. [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 21.28 is allowed against the tax imposed by this chapter on 21.29 individuals, trusts, and estates equal to the minimum tax credit 21.30 for the taxable year. The minimum tax credit equals the 21.31 adjusted net minimum tax for taxable years beginning after 21.32 December 31, 1988, reduced by the minimum tax credits allowed in 21.33 a prior taxable year. The credit may not exceed the excess (if 21.34 any) for the taxable year of 21.35 (1) the regular tax, over 21.36 (2) the greater of (i) the tentative alternative minimum 22.1 tax, or (ii) zero. 22.2 (b) The adjusted net minimum tax for a taxable year equals 22.3 the lesser of the net minimum tax or the excess (if any) of 22.4 (1) the tentative minimum tax, over 22.5 (2)seven6.5 percent of the sum of 22.6 (i) adjusted gross income as defined in section 62 of the 22.7 Internal Revenue Code, 22.8 (ii) interest income as defined in section 290.01, 22.9 subdivision 19a, clause (1), 22.10 (iii) the amount added to federal taxable income as 22.11 provided by section 290.01, subdivision 19a, clauses (5), (6), 22.12 and (7), 22.13 (iv) interest on specified private activity bonds, as 22.14 defined in section 57(a)(5) of the Internal Revenue Code, to the 22.15 extent not included under clause (ii), 22.16 (v) depletion as defined in section 57(a)(1), determined 22.17 without regard to the last sentence of paragraph (1), of the 22.18 Internal Revenue Code, less 22.19 (vi) the deductions allowed in computing alternative 22.20 minimum taxable income provided in subdivision 2, paragraph (a), 22.21 clause (2) of the first series of clauses and clauses (1), (2), 22.22 (3), and (4) of the second series of clauses, and 22.23 (vii) the exemption amount determined under subdivision 3. 22.24 In the case of an individual who is not a Minnesota 22.25 resident for the entire year, adjusted net minimum tax must be 22.26 multiplied by the fraction defined in section 290.06, 22.27 subdivision 2c, paragraph (e). In the case of a trust or 22.28 estate, adjusted net minimum tax must be multiplied by the 22.29 fraction defined under subdivision 4, paragraph (b). 22.30 Sec. 22. Minnesota Statutes 1998, section 297A.02, 22.31 subdivision 1, is amended to read: 22.32 Subdivision 1. [GENERALLY.] Except as otherwise provided 22.33 in this chapter, there is imposed an excise tax of6.55.5 22.34 percent of the gross receipts from sales at retail made by any 22.35 person in this state. 22.36 Sec. 23. [REPEALER.] 23.1 Subdivision 1. [MINNESOTACARE.] Minnesota Statutes 1998, 23.2 sections 13.99, subdivision 86b; 144.1484, subdivision 2; 23.3 295.50; 295.51; 295.52; 295.53; 295.54; 295.55; 295.56; 295.57; 23.4 295.58; 295.582; and 295.59, are repealed January 1, 2000, for 23.5 gross revenue received on or after that date. 23.6 Subd. 2. [PROPERTY TAX.] Minnesota Statutes 1998, section 23.7 273.1382, subdivision 1a, is repealed. 23.8 Sec. 24. [EFFECTIVE DATE.] 23.9 Subdivision 1. [TAXES PAYABLE IN 2000.] Sections 3, 4, 5, 23.10 6, 7, 8, 13, 14, 15, 16, and 17 are effective for taxes payable 23.11 in 2000 and later. 23.12 Subd. 2. [INCOME TAX.] Sections 18, 19, 20, and 21 are 23.13 effective for tax years beginning after December 31, 1999. 23.14 Subd. 3. [SALES TAX.] Section 22 is effective for sales 23.15 occurring after June 30, 1999. 23.16 Subd. 4. [MINNESOTACARE.] Sections 1, 2, 9, 10, 11, and 12 23.17 are effective for gross revenue received on or after January 1, 23.18 2000.