as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; reducing individual income tax 1.3 rates; increasing the working family credit; 1.4 conforming with changes in federal income tax 1.5 provisions; providing for property tax reform; 1.6 altering the corporate income apportionment formula; 1.7 exempting certain insurance companies from the 1.8 franchise tax; providing a direct exemption from sales 1.9 tax for purchases of capital equipment; imposing the 1.10 sales tax on new clothing; reducing the rates of 1.11 certain health care provider taxes; defining terms; 1.12 appropriating money; amending Minnesota Statutes 2000, 1.13 sections 126C.01, by adding subdivisions; 126C.13, 1.14 subdivisions 1, 2, 4; 126C.17, subdivisions 5, 6, 7, 1.15 8, 9, 10; 127A.48, subdivision 1; 270A.03, subdivision 1.16 7; 272.02, subdivisions 7, 10; 273.061, subdivisions 1.17 1, 2, 8; 273.11, subdivision 1a; 273.121; 273.124, 1.18 subdivision 13; 273.13, subdivisions 22, 23, 24, 25, 1.19 31, by adding subdivisions; 273.1392; 273.1393; 1.20 273.1398, subdivisions 1, 8, by adding a subdivision; 1.21 273.166, subdivisions 2, 3, 5; 273.42, by adding a 1.22 subdivision; 274.01, subdivision 1; 274.13, 1.23 subdivision 1; 275.011, by adding a subdivision; 1.24 275.02; 275.065, subdivisions 3, 5a, 6; 275.08, 1.25 subdivisions 1, 1a, 1b; 275.28, subdivision 1; 275.61; 1.26 276.04, subdivision 2; 276A.06, subdivision 3; 282.01, 1.27 subdivisions 1a, 1b; 282.08; 289A.02, subdivision 7; 1.28 290.01, subdivisions 19, 31, by adding a subdivision; 1.29 290.05, subdivision 1; 290.06, subdivision 2c; 1.30 290.0671, subdivision 1; 290.091, subdivisions 1, 6; 1.31 290.0922, subdivision 2; 290.191, subdivisions 2, 3, 1.32 5, by adding a subdivision; 290.92, subdivisions 3, 1.33 28, 29; 290A.03, subdivisions 13, 15; 290A.04, 1.34 subdivisions 2, 2a, 2h, 4; 291.005, subdivision 1; 1.35 295.52, subdivisions 1, 1a, 2, 3; 297A.67, subdivision 1.36 8; 297A.68, subdivision 5; 297A.75; 469.1763, 1.37 subdivision 6; 469.177, subdivisions 1a, 11; 473.446, 1.38 subdivision 1; 473F.08, subdivision 3; 473H.10, 1.39 subdivision 3; 477A.011, subdivisions 3, 34, by adding 1.40 subdivisions; 477A.013, subdivisions 1, 8, 9; 1.41 477A.015; 477A.03, subdivision 2; 477A.065, 1.42 subdivision 1; proposing coding for new law in 1.43 Minnesota Statutes, chapter 126C; 273; 275; 469; 1.44 proposing coding for new law as Minnesota Statutes, 1.45 chapter 290C; repealing Minnesota Statutes 2000, 1.46 sections 126C.13, subdivision 1; 126C.18, subdivision 2.1 1; 270.31; 270.32; 270.33; 270.34; 270.35; 270.36; 2.2 270.37; 270.38; 270.39; 273.13, subdivisions 21b, 24a; 2.3 273.138; 273.1382; 273.1399; 275.065, subdivision 3a; 2.4 275.078; 275.08, subdivision 1e; 282.01, subdivisions 2.5 1c, 1d, 1e; 290.191, subdivision 4; 290.35, 2.6 subdivisions 3, 4, 5; 477A.011, subdivisions 30, 31, 2.7 32, 33, 36, 37; 477A.03, subdivision 4. 2.8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.9 ARTICLE 1 2.10 INDIVIDUAL INCOME TAX 2.11 Section 1. Minnesota Statutes 2000, section 290.06, 2.12 subdivision 2c, is amended to read: 2.13 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 2.14 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 2.15 married individuals filing joint returns and surviving spouses 2.16 as defined in section 2(a) of the Internal Revenue Code must be 2.17 computed by applying to their taxable net income the following 2.18 schedule of rates: 2.19 (1) On the first $25,680,5.355.0825 percent; 2.20 (2) On all over $25,680, but not over $102,030,7.056.6975 2.21 percent; 2.22 (3) On all over $102,030,7.857.4575 percent. 2.23 Married individuals filing separate returns, estates, and 2.24 trusts must compute their income tax by applying the above rates 2.25 to their taxable income, except that the income brackets will be 2.26 one-half of the above amounts. 2.27 (b) The income taxes imposed by this chapter upon unmarried 2.28 individuals must be computed by applying to taxable net income 2.29 the following schedule of rates: 2.30 (1) On the first $17,570,5.355.0825 percent; 2.31 (2) On all over $17,570, but not over $57,710,7.056.6975 2.32 percent; 2.33 (3) On all over $57,710,7.857.4575 percent. 2.34 (c) The income taxes imposed by this chapter upon unmarried 2.35 individuals qualifying as a head of household as defined in 2.36 section 2(b) of the Internal Revenue Code must be computed by 2.37 applying to taxable net income the following schedule of rates: 2.38 (1) On the first $21,630,5.355.0825 percent; 2.39 (2) On all over $21,630, but not over $86,910,7.056.6975 3.1 percent; 3.2 (3) On all over $86,910,7.857.4575 percent. 3.3 (d) In lieu of a tax computed according to the rates set 3.4 forth in this subdivision, the tax of any individual taxpayer 3.5 whose taxable net income for the taxable year is less than an 3.6 amount determined by the commissioner must be computed in 3.7 accordance with tables prepared and issued by the commissioner 3.8 of revenue based on income brackets of not more than $100. The 3.9 amount of tax for each bracket shall be computed at the rates 3.10 set forth in this subdivision, provided that the commissioner 3.11 may disregard a fractional part of a dollar unless it amounts to 3.12 50 cents or more, in which case it may be increased to $1. 3.13 (e) An individual who is not a Minnesota resident for the 3.14 entire year must compute the individual's Minnesota income tax 3.15 as provided in this subdivision. After the application of the 3.16 nonrefundable credits provided in this chapter, the tax 3.17 liability must then be multiplied by a fraction in which: 3.18 (1) the numerator is the individual's Minnesota source 3.19 federal adjusted gross income as defined in section 62 of the 3.20 Internal Revenue Code and increased by the additions required 3.21 under section 290.01, subdivision 19a, clauses (1) and (6), 3.22 after applying the allocation and assignability provisions of 3.23 section 290.081, clause (a), or 290.17; and 3.24 (2) the denominator is the individual's federal adjusted 3.25 gross income as defined in section 62 of the Internal Revenue 3.26 Code of 1986, increased by the amounts specified in section 3.27 290.01, subdivision 19a, clauses (1) and (6), and reduced by the 3.28 amounts specified in section 290.01, subdivision 19b, clause (1). 3.29 Sec. 2. Minnesota Statutes 2000, section 290.0671, 3.30 subdivision 1, is amended to read: 3.31 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 3.32 allowed a credit against the tax imposed by this chapter equal 3.33 to a percentage of earned income. To receive a credit, a 3.34 taxpayer must be eligible for a credit under section 32 of the 3.35 Internal Revenue Code. 3.36 (b) For individuals with no qualifying children, the credit 4.1 equals1.91252.85 percent of the first $4,460 of earned income. 4.2 The credit is reduced by1.91252.85 percent of earned income or 4.3 modified adjusted gross income, whichever is greater, in excess 4.4 of $5,570, but in no case is the credit less than zero. 4.5 (c) For individuals with one qualifying child, the credit 4.6 equals8.512.75 percent of the first $6,680 of earned income 4.7 and 8.5 percent of earned income over $11,650 but less than 4.8 $12,990. The credit is reduced by5.738.11 percent of earned 4.9 income or modified adjusted gross income, whichever is greater, 4.10 in excess of $14,560, but in no case is the credit less than 4.11 zero. 4.12 (d) For individuals with two or more qualifying children, 4.13 the credit equalsten15 percent of the first $9,390 of earned 4.14 income and 20 percent of earned income over $14,350 but less 4.15 than $16,230. The credit is reduced by10.313.92 percent of 4.16 earned income or modified adjusted gross income, whichever is 4.17 greater, in excess of $17,280, but in no case is the credit less 4.18 than zero. 4.19 (e) For tax years beginning after December 31, 2000, and 4.20 before January 1, 2003, individuals who qualify for a credit of 4.21 at least $1 under paragraph (c), the credit is increased by 4.22 $100. For tax years beginning after December 31, 2002, for 4.23 individuals who qualify for a credit of at least $1 under 4.24 paragraph (c), the credit is increased by $200. 4.25 (f) For tax years beginning after December 31, 2000, and 4.26 before January 1, 2003, individuals who qualify for a credit of 4.27 at least $1 under paragraph (d), the credit is increased by 4.28 $200. For tax years beginning after December 31, 2002, 4.29 individuals who qualify for a credit of at least $1 under 4.30 paragraph (d), the credit is increased by $400. 4.31 (g) For a nonresident or part-year resident, the credit 4.32 must be allocated based on the percentage calculated under 4.33 section 290.06, subdivision 2c, paragraph (e). 4.34(f)(h) For a person who was a resident for the entire tax 4.35 year and has earned income not subject to tax under this 4.36 chapter, the credit must be allocated based on the ratio of 5.1 federal adjusted gross income reduced by the earned income not 5.2 subject to tax under this chapter over federal adjusted gross 5.3 income. 5.4(g)(i) The commissioner shall construct tables showing the 5.5 amount of the credit at various income levels and make them 5.6 available to taxpayers. The tables shall follow the schedule 5.7 contained in this subdivision, except that the commissioner may 5.8 graduate the transition between income brackets. 5.9 [EFFECTIVE DATE.] This section is effective for tax years 5.10 beginning after December 31, 2000, except the changes in 5.11 paragraphs (b), (c), and (d) are effective for tax years 5.12 beginning after December 31, 2002. 5.13 Sec. 3. Minnesota Statutes 2000, section 290.091, 5.14 subdivision 1, is amended to read: 5.15 Subdivision 1. [IMPOSITION OF TAX.] In addition to all 5.16 other taxes imposed by this chapter a tax is imposed on 5.17 individuals, estates, and trusts equal to the excess (if any) of 5.18 (a) an amount equal to6.46.08 percent of alternative 5.19 minimum taxable income after subtracting the exemption amount, 5.20 over 5.21 (b) the regular tax for the taxable year. 5.22 [EFFECTIVE DATE.] This section is effective for tax years 5.23 beginning after December 31, 2000. 5.24 Sec. 4. Minnesota Statutes 2000, section 290.091, 5.25 subdivision 6, is amended to read: 5.26 Subd. 6. [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 5.27 is allowed against the tax imposed by this chapter on 5.28 individuals, trusts, and estates equal to the minimum tax credit 5.29 for the taxable year. The minimum tax credit equals the 5.30 adjusted net minimum tax for taxable years beginning after 5.31 December 31, 1988, reduced by the minimum tax credits allowed in 5.32 a prior taxable year. The credit may not exceed the excess (if 5.33 any) for the taxable year of 5.34 (1) the regular tax, over 5.35 (2) the greater of (i) the tentative alternative minimum 5.36 tax, or (ii) zero. 6.1 (b) The adjusted net minimum tax for a taxable year equals 6.2 the lesser of the net minimum tax or the excess (if any) of 6.3 (1) the tentative minimum tax, over 6.4 (2)6.46.08 percent of the sum of 6.5 (i) adjusted gross income as defined in section 62 of the 6.6 Internal Revenue Code, 6.7 (ii) interest income as defined in section 290.01, 6.8 subdivision 19a, clause (1), 6.9 (iii) interest on specified private activity bonds, as 6.10 defined in section 57(a)(5) of the Internal Revenue Code, to the 6.11 extent not included under clause (ii), 6.12 (iv) depletion as defined in section 57(a)(1), determined 6.13 without regard to the last sentence of paragraph (1), of the 6.14 Internal Revenue Code, less 6.15 (v) the deductions allowed in computing alternative minimum 6.16 taxable income provided in subdivision 2, paragraph (a), clause 6.17 (2) of the first series of clauses and clauses (1), (2), and (3) 6.18 of the second series of clauses, and 6.19 (vi) the exemption amount determined under subdivision 3. 6.20 In the case of an individual who is not a Minnesota 6.21 resident for the entire year, adjusted net minimum tax must be 6.22 multiplied by the fraction defined in section 290.06, 6.23 subdivision 2c, paragraph (e). In the case of a trust or 6.24 estate, adjusted net minimum tax must be multiplied by the 6.25 fraction defined under subdivision 4, paragraph (b). 6.26 [EFFECTIVE DATE.] This section is effective for tax years 6.27 beginning after December 31, 2000. 6.28 Sec. 5. Minnesota Statutes 2000, section 290.92, 6.29 subdivision 3, is amended to read: 6.30 Subd. 3. [WITHHOLDING, IRREGULAR PERIOD.] If payment of 6.31 wages is made to an employee by an employer 6.32 (a) With respect to a payroll period or other period, any 6.33 part of which is included in a payroll period or other period 6.34 with respect to which wages are also paid to such employees by 6.35 such employer, or 6.36 (b) Without regard to any payroll period or other period, 7.1 but on or prior to the expiration of a payroll period or other 7.2 period with respect to which wages are also paid to such 7.3 employee by such employer, or 7.4 (c) With respect to a period beginning in one and ending in 7.5 another calendar year, or 7.6 (d) Through an agent, fiduciary, or other person who also 7.7 has the control, receipt, custody, or disposal of or pays, the 7.8 wages payable by another employer to such employee. 7.9 The manner of withholding and the amount to be deducted and 7.10 withheld under subdivision 2a shall be determined in accordance 7.11 with rules prescribed by the commissioner under which the 7.12 withholding exemption allowed to the employee in any calendar 7.13 year shall approximate the withholding exemption allowable with 7.14 respect to an annual payroll period, except that if supplemental 7.15 wages are not paid concurrent with a payroll period the employer 7.16 shall withhold tax on the supplemental payment at the rate of 7.176.255.94 percent as if no exemption had been claimed. 7.18 [EFFECTIVE DATE.] This section is effective for wages paid 7.19 after July 1, 2001. 7.20 Sec. 6. Minnesota Statutes 2000, section 290.92, 7.21 subdivision 28, is amended to read: 7.22 Subd. 28. [PAYMENTS TO HORSE RACING LICENSE HOLDERS.] 7.23 Effective with payments made after April 1, 1988, any holder of 7.24 a license issued by the Minnesota racing commission who makes a 7.25 payment for personal or professional services to a holder of a 7.26 class C license issued by the commission, except an amount paid 7.27 as a purse, shall deduct from the payment and withhold6.255.94 7.28 percent of the amount as Minnesota withholding tax when the 7.29 amount paid to that individual by the same person during the 7.30 calendar year exceeds $600. For purposes of the provisions of 7.31 this section, a payment to any person which is subject to 7.32 withholding under this subdivision must be treated as if the 7.33 payment was a wage paid by an employer to an employee. Every 7.34 individual who is to receive a payment which is subject to 7.35 withholding under this subdivision shall furnish the license 7.36 holder with a statement, made under the penalties of perjury, 8.1 containing the name, address, and social security account number 8.2 of the person receiving the payment. No withholding is required 8.3 if the individual presents a signed certificate from the 8.4 individual's employer which states that the individual is an 8.5 employee of that employer. A nonresident individual who holds a 8.6 class C license must be treated as an athlete for purposes of 8.7 applying the provisions of sections 290.17, subdivision 8.8 2(1)(b)(ii) and 290.92, subdivision 4a. 8.9 [EFFECTIVE DATE.] This section is effective for payments 8.10 made after July 1, 2001. 8.11 Sec. 7. Minnesota Statutes 2000, section 290.92, 8.12 subdivision 29, is amended to read: 8.13 Subd. 29. [LOTTERY PRIZES.]7.256.89 percent of the 8.14 payment of Minnesota state lottery winnings which are subject to 8.15 withholding must be withheld as Minnesota withholding tax. For 8.16 purposes of this subdivision, the term "winnings which are 8.17 subject to withholding" has the meaning given in section 8.18 3402(q)(3) of the Internal Revenue Code. For purposes of the 8.19 provisions of this section, a payment to any person of winnings 8.20 which are subject to withholding must be treated as if the 8.21 payment was a wage paid by an employer to an employee. Every 8.22 individual who is to receive a payment of winnings which are 8.23 subject to withholding shall furnish the state lottery with a 8.24 statement, made under the penalties of perjury, containing the 8.25 name, address, and social security account number of the person 8.26 receiving the payment. The Minnesota state lottery is liable 8.27 for the payment of the tax required to be withheld under this 8.28 subdivision but is not liable to any person for the amount of 8.29 the payment. 8.30 [EFFECTIVE DATE.] This section is effective for winnings 8.31 paid after July 1, 2001. 8.32 ARTICLE 2 8.33 FEDERAL UPDATE 8.34 Section 1. Minnesota Statutes 2000, section 289A.02, 8.35 subdivision 7, is amended to read: 8.36 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 9.1 defined otherwise, "Internal Revenue Code" means the Internal 9.2 Revenue Code of 1986, as amended through December 31,19992000. 9.3 [EFFECTIVE DATE.] This section is effective the day 9.4 following final enactment. 9.5 Sec. 2. Minnesota Statutes 2000, section 290.01, 9.6 subdivision 19, is amended to read: 9.7 Subd. 19. [NET INCOME.] The term "net income" means the 9.8 federal taxable income, as defined in section 63 of the Internal 9.9 Revenue Code of 1986, as amended through the date named in this 9.10 subdivision, incorporating any elections made by the taxpayer in 9.11 accordance with the Internal Revenue Code in determining federal 9.12 taxable income for federal income tax purposes, and with the 9.13 modifications provided in subdivisions 19a to 19f. 9.14 In the case of a regulated investment company or a fund 9.15 thereof, as defined in section 851(a) or 851(g) of the Internal 9.16 Revenue Code, federal taxable income means investment company 9.17 taxable income as defined in section 852(b)(2) of the Internal 9.18 Revenue Code, except that: 9.19 (1) the exclusion of net capital gain provided in section 9.20 852(b)(2)(A) of the Internal Revenue Code does not apply; 9.21 (2) the deduction for dividends paid under section 9.22 852(b)(2)(D) of the Internal Revenue Code must be applied by 9.23 allowing a deduction for capital gain dividends and 9.24 exempt-interest dividends as defined in sections 852(b)(3)(C) 9.25 and 852(b)(5) of the Internal Revenue Code; and 9.26 (3) the deduction for dividends paid must also be applied 9.27 in the amount of any undistributed capital gains which the 9.28 regulated investment company elects to have treated as provided 9.29 in section 852(b)(3)(D) of the Internal Revenue Code. 9.30 The net income of a real estate investment trust as defined 9.31 and limited by section 856(a), (b), and (c) of the Internal 9.32 Revenue Code means the real estate investment trust taxable 9.33 income as defined in section 857(b)(2) of the Internal Revenue 9.34 Code. 9.35 The net income of a designated settlement fund as defined 9.36 in section 468B(d) of the Internal Revenue Code means the gross 10.1 income as defined in section 468B(b) of the Internal Revenue 10.2 Code. 10.3 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 10.4 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 10.5 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 10.6 Protection Act, Public Law Number 104-188, the provisions of 10.7 Public Law Number 104-117, the provisions of sections 313(a) and 10.8 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 10.9 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 10.10 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 10.11 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 10.12 Public Law Number 105-34, the provisions of section 6010 of the 10.13 Internal Revenue Service Restructuring and Reform Act of 1998, 10.14 Public Law Number 105-206, and the provisions of section 4003 of 10.15 the Omnibus Consolidated and Emergency Supplemental 10.16 Appropriations Act, 1999, Public Law Number 105-277, and the 10.17 provisions of section 318 of the Consolidated Appropriation Act 10.18 of 2001, Public Law Number 106-554, shall become effective at 10.19 the time they become effective for federal purposes. 10.20 The Internal Revenue Code of 1986, as amended through 10.21 December 31, 1996, shall be in effect for taxable years 10.22 beginning after December 31, 1996. 10.23 The provisions of sections 202(a) and (b), 221(a), 225, 10.24 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 10.25 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 10.26 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 10.27 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 10.28 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 10.29 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 10.30 7002, and 7003 of the Internal Revenue Service Restructuring and 10.31 Reform Act of 1998, Public Law Number 105-206, the provisions of 10.32 section 3001 of the Omnibus Consolidated and Emergency 10.33 Supplemental Appropriations Act, 1999, Public Law Number 10.34 105-277, and the provisions of section 3001 of the Miscellaneous 10.35 Trade and Technical Corrections Act of 1999, Public Law Number 10.36 106-36, and the provisions of section 316 of the Consolidated 11.1 Appropriation Act of 2001, Public Law Number 106-554, shall 11.2 become effective at the time they become effective for federal 11.3 purposes. 11.4 The Internal Revenue Code of 1986, as amended through 11.5 December 31, 1997, shall be in effect for taxable years 11.6 beginning after December 31, 1997. 11.7 The provisions of sections 5002, 6009, 6011, and 7001 of 11.8 the Internal Revenue Service Restructuring and Reform Act of 11.9 1998, Public Law Number 105-206, the provisions of section 9010 11.10 of the Transportation Equity Act for the 21st Century, Public 11.11 Law Number 105-178, the provisions of sections 1004, 4002, and 11.12 5301 of the Omnibus Consolidation and Emergency Supplemental 11.13 Appropriations Act, 1999, Public Law Number 105-277, the 11.14 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 11.15 Act of 1998, Public Law Number 105-369,andthe provisions of 11.16 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 11.17 Work Incentives Improvement Act of 1999, Public Law Number 11.18 106-170, the provisions of the Installment Tax Correction Act of 11.19 2000, Public Law Number 106-573, and the provisions of section 11.20 309 of the Consolidated Appropriation Act of 2001, Public Law 11.21 Number 106-554, shall become effective at the time they become 11.22 effective for federal purposes. 11.23 The Internal Revenue Code of 1986, as amended through 11.24 December 31, 1998, shall be in effect for taxable years 11.25 beginning after December 31, 1998. 11.26 The provisions of the FSC Repeal and Extraterritorial 11.27 Income Exclusion Act of 2000, Public Law Number 106-519, shall 11.28 become effective at the time it became effective for federal 11.29 purposes. 11.30 The Internal Revenue Code of 1986, as amended through 11.31 December 31, 1999, shall be in effect for taxable years 11.32 beginning after December 31, 1999. The provisions of sections 11.33 306 and 401 of the Consolidated Appropriation Act of 2001, 11.34 Public Law Number 106-554, shall become effective at the same 11.35 time it became effective for federal purposes. 11.36 The Internal Revenue Code of 1986, as amended through 12.1 December 31, 2000, shall be in effect for taxable years 12.2 beginning after December 31, 2000. 12.3 Except as otherwise provided, references to the Internal 12.4 Revenue Code in subdivisions 19a to 19g mean the code in effect 12.5 for purposes of determining net income for the applicable year. 12.6 [EFFECTIVE DATE.] This section is effective the day 12.7 following final enactment. 12.8 Sec. 3. Minnesota Statutes 2000, section 290.01, 12.9 subdivision 31, is amended to read: 12.10 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 12.11 defined otherwise, "Internal Revenue Code" means the Internal 12.12 Revenue Code of 1986, as amended through December 31,19992000. 12.13 [EFFECTIVE DATE.] This section is effective at the same 12.14 time and in the same manner as the federal changes made by the 12.15 FSC Repeal and Extraterritorial Income Exclusion Act of 2000, 12.16 Public Law Number 106-519, and the Consolidated Appropriation 12.17 Act of 2001, Public Law Number 106-554, becomes effective. 12.18 Sec. 4. Minnesota Statutes 2000, section 290.191, 12.19 subdivision 5, is amended to read: 12.20 Subd. 5. [DETERMINATION OF SALES FACTOR.] For purposes of 12.21 this section, the following rules apply in determining the sales 12.22 factor. 12.23 (a) The sales factor includes all sales, gross earnings, or 12.24 receipts received in the ordinary course of the business, except 12.25 that the following types of income are not included in the sales 12.26 factor: 12.27 (1) interest; 12.28 (2) dividends; 12.29 (3) sales of capital assets as defined in section 1221 of 12.30 the Internal Revenue Code; 12.31 (4) sales of property used in the trade or business, except 12.32 sales of leased property of a type which is regularly sold as 12.33 well as leased; 12.34 (5) sales of debt instruments as defined in section 12.35 1275(a)(1) of the Internal Revenue Code or sales of stock;and12.36 (6) royalties, fees, or other like income of a type which 13.1 qualify for a subtraction from federal taxable income under 13.2 section 290.01, subdivision 19(d)(11); and 13.3 (7) all sales, gross earnings, or receipts used to generate 13.4 income excluded under section 114 of the Internal Revenue Code. 13.5 (b) Sales of tangible personal property are made within 13.6 this state if the property is received by a purchaser at a point 13.7 within this state, and the taxpayer is taxable in this state, 13.8 regardless of the f.o.b. point, other conditions of the sale, or 13.9 the ultimate destination of the property. 13.10 (c) Tangible personal property delivered to a common or 13.11 contract carrier or foreign vessel for delivery to a purchaser 13.12 in another state or nation is a sale in that state or nation, 13.13 regardless of f.o.b. point or other conditions of the sale. 13.14 (d) Notwithstanding paragraphs (b) and (c), when 13.15 intoxicating liquor, wine, fermented malt beverages, cigarettes, 13.16 or tobacco products are sold to a purchaser who is licensed by a 13.17 state or political subdivision to resell this property only 13.18 within the state of ultimate destination, the sale is made in 13.19 that state. 13.20 (e) Sales made by or through a corporation that is 13.21 qualified as a domestic international sales corporation under 13.22 section 992 of the Internal Revenue Code are not considered to 13.23 have been made within this state. 13.24 (f) Sales, rents, royalties, and other income in connection 13.25 with real property is attributed to the state in which the 13.26 property is located. 13.27 (g) Receipts from the lease or rental of tangible personal 13.28 property, including finance leases and true leases, must be 13.29 attributed to this state if the property is located in this 13.30 state and to other states if the property is not located in this 13.31 state. Receipts from the lease or rental of moving property 13.32 including, but not limited to, motor vehicles, rolling stock, 13.33 aircraft, vessels, or mobile equipment are included in the 13.34 numerator of the receipts factor to the extent that the property 13.35 is used in this state. The extent of the use of moving property 13.36 is determined as follows: 14.1 (1) A motor vehicle is used wholly in the state in which it 14.2 is registered. 14.3 (2) The extent that rolling stock is used in this state is 14.4 determined by multiplying the receipts from the lease or rental 14.5 of the rolling stock by a fraction, the numerator of which is 14.6 the miles traveled within this state by the leased or rented 14.7 rolling stock and the denominator of which is the total miles 14.8 traveled by the leased or rented rolling stock. 14.9 (3) The extent that an aircraft is used in this state is 14.10 determined by multiplying the receipts from the lease or rental 14.11 of the aircraft by a fraction, the numerator of which is the 14.12 number of landings of the aircraft in this state and the 14.13 denominator of which is the total number of landings of the 14.14 aircraft. 14.15 (4) The extent that a vessel, mobile equipment, or other 14.16 mobile property is used in the state is determined by 14.17 multiplying the receipts from the lease or rental of the 14.18 property by a fraction, the numerator of which is the number of 14.19 days during the taxable year the property was in this state and 14.20 the denominator of which is the total days in the taxable year. 14.21 (h) Royalties and other income not described in paragraph 14.22 (a), clause (6), received for the use of or for the privilege of 14.23 using intangible property, including patents, know-how, 14.24 formulas, designs, processes, patterns, copyrights, trade names, 14.25 service names, franchises, licenses, contracts, customer lists, 14.26 or similar items, must be attributed to the state in which the 14.27 property is used by the purchaser. If the property is used in 14.28 more than one state, the royalties or other income must be 14.29 apportioned to this state pro rata according to the portion of 14.30 use in this state. If the portion of use in this state cannot 14.31 be determined, the royalties or other income must be excluded 14.32 from both the numerator and the denominator. Intangible 14.33 property is used in this state if the purchaser uses the 14.34 intangible property or the rights therein in the regular course 14.35 of its business operations in this state, regardless of the 14.36 location of the purchaser's customers. 15.1 (i) Sales of intangible property are made within the state 15.2 in which the property is used by the purchaser. If the property 15.3 is used in more than one state, the sales must be apportioned to 15.4 this state pro rata according to the portion of use in this 15.5 state. If the portion of use in this state cannot be 15.6 determined, the sale must be excluded from both the numerator 15.7 and the denominator of the sales factor. Intangible property is 15.8 used in this state if the purchaser used the intangible property 15.9 in the regular course of its business operations in this state. 15.10 (j) Receipts from the performance of services must be 15.11 attributed to the state where the services are received. For 15.12 the purposes of this section, receipts from the performance of 15.13 services provided to a corporation, partnership, or trust may 15.14 only be attributed to a state where it has a fixed place of 15.15 doing business. If the state where the services are received is 15.16 not readily determinable or is a state where the corporation, 15.17 partnership, or trust receiving the service does not have a 15.18 fixed place of doing business, the services shall be deemed to 15.19 be received at the location of the office of the customer from 15.20 which the services were ordered in the regular course of the 15.21 customer's trade or business. If the ordering office cannot be 15.22 determined, the services shall be deemed to be received at the 15.23 office of the customer to which the services are billed. 15.24 [EFFECTIVE DATE.] This section is effective for 15.25 transactions after September 30, 2000. 15.26 Sec. 5. Minnesota Statutes 2000, section 290A.03, 15.27 subdivision 15, is amended to read: 15.28 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 15.29 means the Internal Revenue Code of 1986, as amended through 15.30 December 31,19992000. 15.31 [EFFECTIVE DATE.] This section is effective the day 15.32 following final enactment. 15.33 Sec. 6. Minnesota Statutes 2000, section 291.005, 15.34 subdivision 1, is amended to read: 15.35 Subdivision 1. Unless the context otherwise clearly 15.36 requires, the following terms used in this chapter shall have 16.1 the following meanings: 16.2 (1) "Federal gross estate" means the gross estate of a 16.3 decedent as valued and otherwise determined for federal estate 16.4 tax purposes by federal taxing authorities pursuant to the 16.5 provisions of the Internal Revenue Code. 16.6 (2) "Minnesota gross estate" means the federal gross estate 16.7 of a decedent after (a) excluding therefrom any property 16.8 included therein which has its situs outside Minnesota and (b) 16.9 including therein any property omitted from the federal gross 16.10 estate which is includable therein, has its situs in Minnesota, 16.11 and was not disclosed to federal taxing authorities. 16.12 (3) "Personal representative" means the executor, 16.13 administrator or other person appointed by the court to 16.14 administer and dispose of the property of the decedent. If 16.15 there is no executor, administrator or other person appointed, 16.16 qualified, and acting within this state, then any person in 16.17 actual or constructive possession of any property having a situs 16.18 in this state which is included in the federal gross estate of 16.19 the decedent shall be deemed to be a personal representative to 16.20 the extent of the property and the Minnesota estate tax due with 16.21 respect to the property. 16.22 (4) "Resident decedent" means an individual whose domicile 16.23 at the time of death was in Minnesota. 16.24 (5) "Nonresident decedent" means an individual whose 16.25 domicile at the time of death was not in Minnesota. 16.26 (6) "Situs of property" means, with respect to real 16.27 property, the state or country in which it is located; with 16.28 respect to tangible personal property, the state or country in 16.29 which it was normally kept or located at the time of the 16.30 decedent's death; and with respect to intangible personal 16.31 property, the state or country in which the decedent was 16.32 domiciled at death. 16.33 (7) "Commissioner" means the commissioner of revenue or any 16.34 person to whom the commissioner has delegated functions under 16.35 this chapter. 16.36 (8) "Internal Revenue Code" means the United States 17.1 Internal Revenue Code of 1986, as amended through December 31, 17.219992000. 17.3 [EFFECTIVE DATE.] This section is effective the day 17.4 following final enactment. 17.5 ARTICLE 3 17.6 PROPERTY TAX REFORM 17.7 Section 1. Minnesota Statutes 2000, section 126C.01, is 17.8 amended by adding a subdivision to read: 17.9 Subd. 12. [RESIDENTIAL ASSESSED VALUE.] "Residential 17.10 assessed value" means the assessed value of the following 17.11 taxable properties located within the district, as defined in 17.12 section 273.13: class 1a, 1b, and 1c properties, the house, 17.13 garage, and immediately surrounding one acre of land of class 2a 17.14 properties, class 4a properties, class 4b(1) properties, class 17.15 4b(3) properties, class 4bb properties, and class 4d properties. 17.16 [EFFECTIVE DATE.] This section is effective for taxes 17.17 payable in 2002 and thereafter. 17.18 Sec. 2. Minnesota Statutes 2000, section 126C.01, is 17.19 amended by adding a subdivision to read: 17.20 Subd. 13. [ADJUSTED RESIDENTIAL ASSESSED VALUE.] "Adjusted 17.21 residential assessed value" means the residential assessed value 17.22 of property located within the district as adjusted by the 17.23 commissioner of revenue under section 127A.48. The adjusted 17.24 residential assessed value for a particular assessment year must 17.25 be used to compute referendum levy limitations under section 17.26 126C.17 for levies certified in the succeeding calendar year and 17.27 referendum aid for the school year beginning in the second 17.28 succeeding calendar year. 17.29 [EFFECTIVE DATE.] This section is effective for levies 17.30 certified in 2001 and aids payable for school years beginning in 17.31 2002, and thereafter. 17.32 Sec. 3. Minnesota Statutes 2000, section 126C.01, is 17.33 amended by adding a subdivision to read: 17.34 Subd. 14. [ADJUSTED ASSESSED VALUE.] "Adjusted assessed 17.35 value" means the assessed value of property located within the 17.36 district as adjusted by the commissioner of revenue under 18.1 section 127A.48. The adjusted assessed value for a particular 18.2 assessment year must be used to compute levy limitations for 18.3 levies certified in the succeeding calendar year and aid for the 18.4 school year beginning in the second succeeding calendar year. 18.5 [EFFECTIVE DATE.] This section is effective for levies 18.6 certified in 2001 and aid payable for school years beginning in 18.7 2002, and thereafter. 18.8 Sec. 4. [126C.02] [SCHOOL DISTRICT LEVY ADJUSTMENTS.] 18.9 Subdivision 1. [TRANSITION ADJUSTMENTS.] For taxes payable 18.10 in 2002 and thereafter, the commissioner of children, families, 18.11 and learning shall, in consultation with the commissioner of 18.12 revenue, make the adjustments required by this section. 18.13 Subd. 2. [REVENUE CONVERSION.] Each school district's 18.14 revenue authority that is established as a rate times net tax 18.15 capacity or adjusted net tax capacity under this chapter shall 18.16 be adjusted by multiplying each revenue amount by the ratio of 18.17 the statewide net tax capacity as calculated using the class 18.18 rates in effect for assessment year 2001 to the statewide 18.19 assessed value using the class rates for the assessment year 18.20 related to the taxes payable year for which the revenue 18.21 authority is being determined. 18.22 Subd. 3. [TAX RATE ADJUSTMENT.] Each tax rate established 18.23 under chapters 123B and 124D shall be adjusted by multiplying 18.24 the rate by the ratio of the statewide tax capacity as 18.25 calculated using the class rates in effect for assessment year 18.26 2001 to the statewide assessed value using the class rates for 18.27 the assessment year related to the taxes payable year for which 18.28 the rate is being determined. 18.29 Subd. 4. [EQUALIZING FACTORS.] Each equalizing factor 18.30 established under this chapter and chapters 123B, 124D, 18.31 excluding sections 123B.53, subdivision 5, 126C.10, subdivision 18.32 21, and 126C.17, subdivision 6, shall be adjusted by dividing 18.33 the equalizing factor by the ratio of the statewide tax capacity 18.34 as calculated using the class rates in effect for assessment 18.35 year 2001 to the statewide assessed value using the class rates 18.36 for the assessment year related to the taxes payable year for 19.1 which the factor is being determined. 19.2 [EFFECTIVE DATE.] This section is effective for taxes 19.3 payable in 2002 and thereafter. 19.4 Sec. 5. Minnesota Statutes 2000, section 126C.13, 19.5 subdivision 1, is amended to read: 19.6 Subdivision 1. [GENERAL EDUCATION TAX RATE.] The 19.7 commissioner must establish the general education tax rate by 19.8 July 1 of each year for levies payable in the following year. 19.9 The general education tax capacity rate must be a rate, rounded 19.10 up to the nearest hundredth of a percent, that, when applied to 19.11 the adjusted net tax capacity for all districts, raises the 19.12 amount specified in this subdivision. The general education tax 19.13 rate must be the rate that raises $1,330,000,000 for fiscal year 19.14 2001 and fiscal year 2002, and zero for later fiscal years. The 19.15 general education tax rate may not be changed due to changes or 19.16 corrections made to a district's adjusted net tax capacity after 19.17 the tax rate has been established. 19.18 [EFFECTIVE DATE.] This section is effective the day 19.19 following final enactment. 19.20 Sec. 6. Minnesota Statutes 2000, section 126C.13, 19.21 subdivision 2, is amended to read: 19.22 Subd. 2. [GENERAL EDUCATION LEVY.] To obtain general 19.23 education revenue, excluding transition revenue and supplemental 19.24 revenue, a district may levy an amount not to exceed the general 19.25 education tax rate times the adjusted net tax capacity of the 19.26 district for the preceding year. If the amount of the general 19.27 education levy would exceed the general education revenue, 19.28 excluding transition revenue and supplemental revenue, the 19.29 general education levy must be determined according to 19.30 subdivision 3. For taxes payable in 2002 and thereafter, the 19.31 general education levy amount authorized by this subdivision for 19.32 all districts is zero. 19.33 [EFFECTIVE DATE.] This section is effective for taxes 19.34 payable in 2002 and thereafter. 19.35 Sec. 7. Minnesota Statutes 2000, section 126C.13, 19.36 subdivision 4, is amended to read: 20.1 Subd. 4. [GENERAL EDUCATION AID.] (a) For fiscal year 20.2 2002, a district's general education aid is the sum of the 20.3 following amounts: 20.4 (1) the product of (i) the difference between the general 20.5 education revenue, excluding transition revenue and supplemental 20.6 revenue, and the general education levy, times (ii) the ratio of 20.7 the actual amount levied to the permitted levy; 20.8 (2) transition aid according to section 126C.10, 20.9 subdivision 22; 20.10 (3) supplemental aid according to section127A.49126C.10, 20.11 subdivision 11; 20.12 (4) shared time aid according to section 126C.01, 20.13 subdivision 7; and 20.14 (5) referendum aid according to section 126C.17. 20.15 (b) For fiscal year 2003 and later, a district's general 20.16 education aid is the sum of the following amounts: 20.17 (1) the general education revenue according to section 20.18 126C.10, subdivision 1, excluding transition revenue; 20.19 (2) transition aid according to section 126C.10, 20.20 subdivision 22; 20.21 (3) shared time aid according to section 126C.01, 20.22 subdivision 7; and 20.23 (4) referendum aid according to section 126C.17. 20.24 [EFFECTIVE DATE.] This section is effective July 1, 2001, 20.25 and thereafter. 20.26 Sec. 8. Minnesota Statutes 2000, section 126C.17, 20.27 subdivision 5, is amended to read: 20.28 Subd. 5. [REFERENDUM EQUALIZATION REVENUE.] (a) For fiscal 20.29 year 2002, a district's referendum equalization revenue equals 20.30 thereferendum equalization allowancelesser of the district's 20.31 referendum allowance under subdivision 1 or $415 times the 20.32 district's resident marginal cost pupil units for that 20.33 year. For fiscal year 2003 and later, a district's referendum 20.34 equalization revenue equals the sum of the first tier referendum 20.35 equalization revenue and the second tier referendum equalization 20.36 revenue. 21.1 (b)TheA district's first tier referendum equalization 21.2 revenue equals the district's first tier referendum equalization 21.3 allowance times the district's resident marginal cost pupil 21.4 units for that year. 21.5 (c) A district's first tier referendum equalization 21.6 allowance equals$350 for fiscal year 2000 and $415 for fiscal21.7year 2001 and later.21.8(c) Referendum equalization revenue must not exceed a21.9district's total referendum revenue for that year.the lesser of 21.10 the district's referendum allowance under subdivision 1 or $600. 21.11 (d) A district's second tier referendum equalization 21.12 allowance equals the lesser of the district's referendum 21.13 allowance under subdivision 1 or 25 percent of the formula 21.14 allowance, minus the district's first tier referendum 21.15 equalization allowance. 21.16 (e) Notwithstanding paragraph (d), the second tier 21.17 referendum equalization allowance for a district qualifying for 21.18 secondary sparsity revenue under section 126C.10, subdivision 7, 21.19 or elementary sparsity revenue under section 126C.10, 21.20 subdivision 8, equals the district's referendum allowance under 21.21 subdivision 1, minus the district's first tier referendum 21.22 equalization allowance. 21.23 [EFFECTIVE DATE.] This section is effective for fiscal year 21.24 2002 and thereafter. 21.25 Sec. 9. Minnesota Statutes 2000, section 126C.17, 21.26 subdivision 6, is amended to read: 21.27 Subd. 6. [REFERENDUM EQUALIZATION LEVY.] (a) A district's 21.28 referendum equalization levy for areferendum levied against the21.29referendum market value of all taxable property as defined in21.30section 126C.01, subdivision 3fiscal year 2002, equals the 21.31 district's referendum equalization revenue times the lesser of 21.32 one or the ratio of the district's referendum market value per 21.33 resident marginal cost pupil unit to $476,000. 21.34 (b) For fiscal year 2003 and later, a district's referendum 21.35 equalization levyfor a referendum levied against the net tax21.36capacity of all taxable property equals the district's22.1referendum equalization revenue times the lesser of one or the22.2ratio of the district's adjusted net tax capacity per resident22.3marginal cost pupil unit to $8,404equals the sum of the first 22.4 tier referendum equalization levy and the second tier referendum 22.5 equalization levy. 22.6 (c) A district's first tier referendum equalization levy 22.7 equals the district's first tier referendum equalization revenue 22.8 times the lesser of one or the ratio of the district's adjusted 22.9 residential assessed value per resident marginal cost pupil unit 22.10 to $6,400. 22.11 (d) A district's second tier referendum equalization levy 22.12 equals the district's second tier revenue times the lesser of 22.13 one or the ratio of the district's adjusted residential assessed 22.14 value per resident marginal cost pupil unit to $4,265. 22.15 [EFFECTIVE DATE.] This section is effective for fiscal year 22.16 2002 and thereafter. 22.17 Sec. 10. Minnesota Statutes 2000, section 126C.17, 22.18 subdivision 7, is amended to read: 22.19 Subd. 7. [REFERENDUM EQUALIZATION AID.] (a) A district's 22.20 referendum equalization aid equals the difference between its 22.21 referendum equalization revenue and levy. 22.22 (b) If a district's actual levy for first or second tier 22.23 referendum equalization revenue is less than its maximum levy 22.24 limit for that tier, aid for that tier shall be proportionately 22.25 reduced. 22.26 [EFFECTIVE DATE.] This section is effective for fiscal year 22.27 2003 and thereafter. 22.28 Sec. 11. Minnesota Statutes 2000, section 126C.17, 22.29 subdivision 8, is amended to read: 22.30 Subd. 8. [UNEQUALIZED REFERENDUM LEVY.] Each year, a 22.31 district may levy an amount equal to the difference between its 22.32 total referendum revenue according to subdivision54 and its 22.33equalized referendum aid and levy according to subdivisions 622.34and 7referendum equalization revenue according to subdivision 5. 22.35 [EFFECTIVE DATE.] This section is effective for taxes 22.36 payable in 2002 and thereafter. 23.1 Sec. 12. Minnesota Statutes 2000, section 126C.17, 23.2 subdivision 9, is amended to read: 23.3 Subd. 9. [REFERENDUM REVENUE.] (a) The revenue authorized 23.4 by section 126C.10, subdivision 1, may be increased in the 23.5 amount approved by the voters of the district at a referendum 23.6 called for the purpose. The referendum may be called by the 23.7 board or shall be called by the board upon written petition of 23.8 qualified voters of the district. The referendum must be 23.9 conducted one or two calendar years before the increased levy 23.10 authority, if approved, first becomes payable. Only one 23.11 election to approve an increase may be held in a calendar year. 23.12 Unless the referendum is conducted by mail under paragraph (g), 23.13 the referendum must be held on the first Tuesday after the first 23.14 Monday in November. The ballot must state the maximum amount of 23.15 the increased revenue per resident marginal cost pupil unit, the 23.16 estimated referendum tax mill rateas a percentage of referendum23.17market valuein the first year it is to be levied, and that the 23.18 revenue must be used to finance school operations. The ballot 23.19 may state a schedule, determined by the board, of increased 23.20 revenue per resident marginal cost pupil unit that differs from 23.21 year to year over the number of years for which the increased 23.22 revenue is authorized. If the ballot contains a schedule 23.23 showing different amounts, it must also indicate the estimated 23.24 referendum tax mill rateas a percent of referendum market value23.25 for the amount specified for the first year and for the maximum 23.26 amount specified in the schedule. The ballot may state that 23.27 existing referendum levy authority is expiring. In this case, 23.28 the ballot may also compare the proposed levy authority to the 23.29 existing expiring levy authority, and express the proposed 23.30 increase as the amount, if any, over the expiring referendum 23.31 levy authority. The ballot must designate the specific number 23.32 of years, not to exceed ten, for which the referendum 23.33 authorization applies. The notice required under section 275.60 23.34 may be modified to read, in cases of renewing existing levies: 23.35 "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 23.36 FOR A PROPERTY TAX INCREASE." 24.1 The ballot may contain a textual portion with the 24.2 information required in this subdivision and a question stating 24.3 substantially the following: 24.4 "Shall the increase in the revenue proposed by (petition 24.5 to) the board of ........., School District No. .., be approved?" 24.6 If approved, an amount equal to the approved revenue per 24.7 resident marginal cost pupil unit times the resident marginal 24.8 cost pupil units for the school year beginning in the year after 24.9 the levy is certified shall be authorized for certification for 24.10 the number of years approved, if applicable, or until revoked or 24.11 reduced by the voters of the district at a subsequent referendum. 24.12 (b) The board must prepare and deliver by first class mail 24.13 at least 15 days but no more than 30 days before the day of the 24.14 referendum to each taxpayer a notice of the referendum and the 24.15 proposed revenue increase. The board need not mail more than 24.16 one notice to any taxpayer. For the purpose of giving mailed 24.17 notice under this subdivision, owners must be those shown to be 24.18 owners on the records of the county auditor or, in any county 24.19 where tax statements are mailed by the county treasurer, on the 24.20 records of the county treasurer. Every property owner whose 24.21 name does not appear on the records of the county auditor or the 24.22 county treasurer is deemed to have waived this mailed notice 24.23 unless the owner has requested in writing that the county 24.24 auditor or county treasurer, as the case may be, include the 24.25 name on the records for this purpose. The notice must project 24.26 the anticipated amount of tax increase in annual dollars and 24.27 annualpercentagemill rates for typical residential homesteads, 24.28 agricultural homesteads, and apartments, and24.29commercial-industrial propertywithin the school district. 24.30 The notice for a referendum may state that an existing 24.31 referendum levy is expiring and project the anticipated amount 24.32 of increase over the existing referendum levy in the first year, 24.33 if any, in annual dollars and annualpercentagemill rates for 24.34 typical residential homesteads, agricultural homesteads, and 24.35 apartments, and commercial-industrial propertywithin the 24.36 district. 25.1 The notice must include the following statement: "Passage 25.2 of this referendum will result in an increase in your property 25.3 taxes." However, in cases of renewing existing levies, the 25.4 notice may include the following statement: "Passage of this 25.5 referendum may result in an increase in your property taxes." 25.6 (c) A referendum on the question of revoking or reducing 25.7 the increased revenue amount authorized pursuant to paragraph 25.8 (a) may be called by the board and shall be called by the board 25.9 upon the written petition of qualified voters of the district. 25.10 A referendum to revoke or reduce the levy amount must be based 25.11 upon the dollaramount, local tax rate, oramount per resident 25.12 marginal cost pupil unit, that was stated to be the basis for 25.13 the initial authorization. Revenue approved by the voters of 25.14 the district pursuant to paragraph (a) must be received at least 25.15 once before it is subject to a referendum on its revocation or 25.16 reduction for subsequent years. Only one revocation or 25.17 reduction referendum may be held to revoke or reduce referendum 25.18 revenue for any specific year and for years thereafter. 25.19 (d) A petition authorized by paragraph (a) or (c) is 25.20 effective if signed by a number of qualified voters in excess of 25.21 15 percent of the registered voters of the district on the day 25.22 the petition is filed with the board. A referendum invoked by 25.23 petition must be held on the date specified in paragraph (a). 25.24 (e) The approval of 50 percent plus one of those voting on 25.25 the question is required to pass a referendum authorized by this 25.26 subdivision. 25.27 (f) At least 15 days before the day of the referendum, the 25.28 district must submit a copy of the notice required under 25.29 paragraph (b) to the commissioner and to the county auditor of 25.30 each county in which the district is located. Within 15 days 25.31 after the results of the referendum have been certified by the 25.32 board, or in the case of a recount, the certification of the 25.33 results of the recount by the canvassing board, the district 25.34 must notify the commissioner of the results of the referendum. 25.35 (g) Except for a referendum held under subdivision 11, any 25.36 referendum under this section held on a day other than the first 26.1 Tuesday after the first Monday in November must be conducted by 26.2 mail in accordance with section 204B.46. Notwithstanding 26.3 paragraph (b) to the contrary, in the case of a referendum 26.4 conducted by mail under this paragraph, the notice required by 26.5 paragraph (b) must be prepared and delivered by first class mail 26.6 at least 20 days before the referendum. 26.7 [EFFECTIVE DATE.] This section is effective the day 26.8 following final enactment. 26.9 Sec. 13. Minnesota Statutes 2000, section 126C.17, 26.10 subdivision 10, is amended to read: 26.11 Subd. 10. [SCHOOL REFERENDUM LEVY;MARKETRESIDENTIAL 26.12 ASSESSED VALUE.] Notwithstanding the provisions of subdivision 26.13 9, a school referendum levyapproved after November 1, 1992,for 26.14 taxes payable in19932002 and thereafter, must be levied 26.15 against thereferendum market valueresidential assessed value 26.16 ofalltaxable property as defined in section 126C.01, 26.17 subdivision312. Any referendum levy amount subject to the 26.18 requirements of this subdivision must be certified separately to 26.19 the county auditor under section 275.07. 26.20 All other provisions of subdivision 9 that do not conflict 26.21 with this subdivision apply to referendum levies under this 26.22 subdivision. 26.23 [EFFECTIVE DATE.] This section is effective the day 26.24 following final enactment. 26.25 Sec. 14. Minnesota Statutes 2000, section 127A.48, 26.26 subdivision 1, is amended to read: 26.27 Subdivision 1. [COMPUTATION.] The department of revenue 26.28 must annually conduct an assessment/sales ratio study of the 26.29 taxable property in each school district in accordance with the 26.30 procedures in subdivisions 2 and 3. Based upon the results of 26.31 this assessment/sales ratio study, the department of revenue 26.32 must determine an aggregate equalizednet tax capacityassessed 26.33 value for the various classes of taxable property in each 26.34 district, whichtax capacityassessed value shall be designated 26.35 as the adjustednet tax capacityassessed value. The 26.36 adjustednet tax capacitiesassessed values shall be determined 27.1 using thenet tax capacity percentagesclass rates in effect for 27.2 the assessment year following the assessment year of the study. 27.3 The department of revenue must make whatever estimates are 27.4 necessary to account for changes in the classification system. 27.5 The department of revenue may incur the expense necessary to 27.6 make the determinations. The commissioner of revenue may 27.7 reimburse any county or governmental official for requested 27.8 services performed in ascertaining the adjustednet tax capacity27.9 assessed value. On or before March 15 annually, the department 27.10 of revenue shall file with the chair of the tax committee of the 27.11 house of representatives and the chair of the committee on taxes 27.12 and tax laws of the senate a report of adjustednet tax27.13capacitiesassessed values. On or before June 15 annually, the 27.14 department of revenue shall file its final report on the 27.15 adjustednet tax capacitiesassessed values established by the 27.16 previous year's assessments and the current year'snet tax27.17capacity percentagesclass rates with the commissioner of 27.18 children, families, and learning and each county auditor for 27.19 those districts for which the auditor has the responsibility for 27.20 determination of local tax rates. A copy of the report so filed 27.21 shall be mailed to the clerk of each district involved and to 27.22 the county assessor or supervisor of assessments of the county 27.23 or counties in which each district is located. 27.24 [EFFECTIVE DATE.] This section is effective the day 27.25 following final enactment. 27.26 Sec. 15. Minnesota Statutes 2000, section 270A.03, 27.27 subdivision 7, is amended to read: 27.28 Subd. 7. [REFUND.] "Refund" means an individual income tax 27.29 refund or political contribution refund,pursuant to chapter 27.30 290,ora property tax credit or refund,pursuant to chapter 27.31 290A, or a sustainable forest tax refund pursuant to chapter 27.32 290C. 27.33 For purposes of this chapter, lottery prizes, as set forth 27.34 in section 349A.08, subdivision 8, and amounts granted to 27.35 persons by the legislature on the recommendation of the joint 27.36 senate-house of representatives subcommittee on claims shall be 28.1 treated as refunds. 28.2 In the case of a joint property tax refund payable to 28.3 spouses under chapter 290A, the refund shall be considered as 28.4 belonging to each spouse in the proportion of the total refund 28.5 that equals each spouse's proportion of the total income 28.6 determined under section 290A.03, subdivision 3. In the case of 28.7 a joint income tax refund under chapter 289A, the refund shall 28.8 be considered as belonging to each spouse in the proportion of 28.9 the total refund that equals each spouse's proportion of the 28.10 total taxable income determined under section 290.01, 28.11 subdivision 29. The commissioner shall remit the entire refund 28.12 to the claimant agency, which shall, upon the request of the 28.13 spouse who does not owe the debt, determine the amount of the 28.14 refund belonging to that spouse and refund the amount to that 28.15 spouse. For court fines, fees, and surcharges and court-ordered 28.16 restitution under section 611A.04, subdivision 2, the notice 28.17 provided by the commissioner of revenue under section 270A.07, 28.18 subdivision 2, paragraph (b), serves as the appropriate legal 28.19 notice to the spouse who does not owe the debt. 28.20 [EFFECTIVE DATE.] This section is effective the day 28.21 following final enactment. 28.22 Sec. 16. Minnesota Statutes 2000, section 272.02, 28.23 subdivision 7, is amended to read: 28.24 Subd. 7. [INSTITUTIONS OF PUBLIC CHARITY.] 28.25InstitutionsProperty of an institution of purely public charity 28.26are, or property that would be listed for taxation in the name 28.27 of an institution of purely public charity under section 272.01, 28.28 subdivision 2, or 273.19, and that is used for the charitable 28.29 purposes of such institution, is exemptexcept parcels of28.30property containing structures and the. However, land and 28.31 structuresdescribed in sectionthat qualify, or that could 28.32 qualify under sections 273.13, subdivision 25, paragraph 28.33 (e), and 462A.071, other than those that qualify for exemption 28.34 under subdivision 26, are not exempt. 28.35 [EFFECTIVE DATE.] This section is effective for taxes 28.36 payable in 2002 and thereafter. 29.1 Sec. 17. Minnesota Statutes 2000, section 272.02, 29.2 subdivision 10, is amended to read: 29.3 Subd. 10. [PERSONAL PROPERTY USED FOR POLLUTION CONTROL.] 29.4 Personal property used primarily for the abatement and control 29.5 of air, water, or land pollution is exempt to the extent that it 29.6 is so used, and real property is exempt if it is used primarily 29.7 for abatement and control of air, water, or land pollution as 29.8 part of an agricultural operation, as a part of a centralized 29.9 treatment and recovery facility operating under a permit issued 29.10 by the Minnesota pollution control agency pursuant to chapters 29.11 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 29.12 and 7045.0020 to 7045.1260, as a wastewater treatment facility 29.13 and for the treatment, recovery, and stabilization of metals, 29.14 oils, chemicals, water, sludges, or inorganic materials from 29.15 hazardous industrial wastes, or as part of an electric 29.16 generation system. For purposes of this subdivision, personal 29.17 property includes ponderous machinery and equipment used in a 29.18 business or production activity that at common law is considered 29.19 real property. 29.20 Any taxpayer requesting exemption of all or a portion of 29.21 any real property or any equipment or device, or part thereof, 29.22 operated primarily for the control or abatement of airor, 29.23 water, or land pollution shall file an application with the 29.24 commissioner of revenue.The equipment or device shall meet29.25standards, rules, or criteria prescribed by the Minnesota29.26pollution control agency, and must be installed or operated in29.27accordance with a permit or order issued by that agency.The 29.28 Minnesota pollution control agency shall upon request of the 29.29 commissioner furnish informationorand advice to the 29.30 commissioner. 29.31 The information and advice furnished by the Minnesota 29.32 pollution control agency must include statements as to whether 29.33 the equipment, device, or real property meets a standard, rule, 29.34 criteria, guideline, policy, or order of the Minnesota pollution 29.35 control agency, and whether the equipment, device, or real 29.36 property is installed or operated in accordance with it. On 30.1 determining that property qualifies for exemption, the 30.2 commissioner shall issue an order exempting the property from 30.3 taxation. The equipmentor, device, or real property shall 30.4 continue to be exempt from taxation as long as thepermitorder 30.5 issued by theMinnesota pollution control agencycommissioner 30.6 remains in effect. 30.7 [EFFECTIVE DATE.] This section is effective for exemption 30.8 applications received on or after July 1, 2001. 30.9 Sec. 18. Minnesota Statutes 2000, section 273.061, 30.10 subdivision 1, is amended to read: 30.11 Subdivision 1. [OFFICE CREATED; APPOINTMENT, 30.12 QUALIFICATIONS.] Every county in this state shall have a county 30.13 assessor. The county assessor shall be appointed by the board 30.14 of county commissioners. The assessor shall be selected and 30.15 appointed because of knowledge and training in the field of 30.16 property taxation and appointment shall be approved by the 30.17 commissioner of revenue before the same shall become effective. 30.18 Upon receipt by the county commissioners of the commissioner of 30.19 revenue's refusal to approve an appointment, the term of the 30.20 appointee shall terminate at the end of that day. 30.21 The commissioner of revenue may grant approval on a 30.22 probationary basis for a period of two years. The commissioner 30.23 must base the decision to impose a probationary period on 30.24 objective and consistent criteria. At the end of the two-year 30.25 probationary period, the commissioner may either refuse to 30.26 approve the person's appointment for the remainder of the 30.27 person's four-year term, approve the person's appointment but 30.28 only for another two-year probationary period, or 30.29 unconditionally approve the person's appointment for the 30.30 remainder of the four-year term for which the person was 30.31 originally appointed by the county board. The criteria shall 30.32 not be considered rules and are not subject to the 30.33 Administrative Procedure Act. 30.34 Notwithstanding any law to the contrary, a county assessor 30.35 must have senior accreditation from the state board of assessors 30.36 by January 1, 1992, or within two years of the assessor's first 31.1 appointment under this section, whichever is later. 31.2 [EFFECTIVE DATE.] This section is effective the day 31.3 following final enactment. 31.4 Sec. 19. Minnesota Statutes 2000, section 273.061, 31.5 subdivision 2, is amended to read: 31.6 Subd. 2. [TERM; VACANCY.] (a) The terms of county 31.7 assessors appointed under this section shall be four years. A 31.8 new term shall begin on January 1 of every fourth year after 31.9 1973. When any vacancy in the office occurs, the board of 31.10 county commissioners, within3090 days thereafter, shall fill 31.11 the same by appointment for the remainder of the term, following 31.12 the procedure prescribed in subdivision 1. The term of the 31.13 county assessor may be terminated by the board of county 31.14 commissioners at any time, on charges ofinefficiency or neglect31.15of dutymalfeasance, misfeasance, or nonfeasance by the 31.16 commissioner of revenue. If the board of county commissioners 31.17 does not intend to reappoint a county assessor who has been 31.18 certified by the state board of assessors, the board shall 31.19 present written notice to the county assessor not later than 90 31.20 days prior to the termination of the assessor's term, that it 31.21 does not intend to reappoint the assessor. If written notice is 31.22 not timely made, the county assessor will automatically be 31.23 reappointed by the board of county commissioners. 31.24 The commissioner of revenue may recommend to the state 31.25 board of assessors the nonrenewal, suspension, or revocation of 31.26 an assessor's license as provided in sections 270.41 to 270.53. 31.27 (b) In the event of a vacancy in the office of county 31.28 assessor, through death, resignation or other reasons, the 31.29 deputy (or chief deputy, if more than one) shall perform the 31.30 functions of the office. If there is no deputy, the county 31.31 auditor shall designate a person to perform the duties of the 31.32 office until an appointment is made as provided in clause (a). 31.33 Such person shall perform the duties of the office for a period 31.34 not exceeding3090 days during which the county board must 31.35 appoint a county assessor. Such30-day90-day period may, 31.36 however, be extended by written approval of the commissioner of 32.1 revenue. 32.2 (c) In the case of the first appointment under paragraph 32.3 (a) of a county assessor who is accredited but who does not have 32.4 senior accreditation, an approval of the appointment by the 32.5 commissioner shall be provisional, provided that a county 32.6 assessor appointed to a provisional term under this paragraph 32.7 must reapply to the commissioner at the end of the provisional 32.8 term. A provisional term may not exceed two years. The 32.9 commissioner shall not approve the appointment for the remainder 32.10 of the four-year term unless the assessor has obtained senior 32.11 accreditation. 32.12 [EFFECTIVE DATE.] This section is effective the day 32.13 following final enactment. 32.14 Sec. 20. Minnesota Statutes 2000, section 273.061, 32.15 subdivision 8, is amended to read: 32.16 Subd. 8. [POWERS AND DUTIES.] The county assessor shall 32.17 have the following powers and duties: 32.18 (1) To call upon and confer with the township and city 32.19 assessors in the county, and advise and give them the necessary 32.20 instructions and directions as to their duties under the laws of 32.21 this state, to the end that a uniform assessment of all real 32.22 property in the county will be attained. 32.23 (2) To assist and instruct the local assessors in the 32.24 preparation and proper use of land maps and record cards, in the 32.25 property classification of real and personal property, and in 32.26 the determination of proper standards of value. 32.27 (3) To keep the local assessors in the county advised of 32.28 all changes in assessment laws and all instructions which the 32.29 assessor receives from the commissioner of revenue relating to 32.30 their duties. 32.31 (4) Tohave authority torequire the attendance of groups 32.32 of local assessors at sectional meetings called by the assessor 32.33 for the purpose of giving them further assistance and 32.34 instruction as to their duties. 32.35 (5) To require the attendance of all licensed assessors 32.36 working in that county at instructional meetings attended by the 33.1 department of revenue regional representative to provide 33.2 assistance and instruction as to their duties under the law and 33.3 the proper implementation of assessment procedures. 33.4 (6) To immediately commence the preparation of a large 33.5 scale topographical land map of the county, in such form as may 33.6 be prescribed by the commissioner of revenue, showing thereon 33.7 the location of all railroads, highways and roads, bridges, 33.8 rivers and lakes, swamp areas, wooded tracts, stony ridges and 33.9 other features which might affect the value of the land. 33.10 Appropriate symbols shall be used to indicate the best, the 33.11 fair, and the poor land of the county. For use in connection 33.12 with the topographical land map, the assessor shall prepare and 33.13 keep available in the assessor's office tables showing fair 33.14 average minimum and maximum market values per acre of 33.15 cultivated, meadow, pasture, cutover, timber and waste lands of 33.16 each township. The assessor shall keep the map and tables 33.17 available in the office for the guidance of town assessors, 33.18 boards of review, and the county board of equalization. 33.19(6)(7) To also prepare and keep available in the office 33.20 for the guidance of town assessors, boards of review and the 33.21 county board of equalization, a land valuation map of the 33.22 county, in such form as may be prescribed by the commissioner of 33.23 revenue. This map, which shall include the bordering tier of 33.24 townships of each county adjoining, shall show the average 33.25 market value per acre, both with and without improvements, as 33.26 finally equalized in the last assessment of real estate, of all 33.27 land in each town or unorganized township which lies outside the 33.28 corporate limits of cities. 33.29(7)(8) To regularly examine all conveyances of land 33.30 outside the corporate limits of cities of the first and second 33.31 class, filed with the county recorder of the county, and keep a 33.32 file, by descriptions, of the considerations shown thereon. 33.33 From the information obtained by comparing the considerations 33.34 shown with the market values assessed, the assessor shall make 33.35 recommendations to the county board of equalization of necessary 33.36 changes in individual assessments or aggregate valuations. 34.1(8)(9) To become familiar with the values of the different 34.2 items of personal property so as to be in a position when called 34.3 upon to advise the boards of review and the county board of 34.4 equalization concerning property, market values thereof. 34.5(9)(10) While the county board of equalization is in 34.6 session, to give it every possible assistance to enable it to 34.7 perform its duties. The assessor shall furnish the board with 34.8 all necessary charts, tables, comparisons, and data which it 34.9 requires in its deliberations, and shall make whatever 34.10 investigations the board may desire. 34.11(10)(11) At the request of either the board of county 34.12 commissioners or the commissioner of revenue, to investigate 34.13 applications for reductions of valuation and abatements and 34.14 settlements of taxes, examine the real or personal property 34.15 involved, and submit written reports and recommendations with 34.16 respect to the applications, in such form as may be prescribed 34.17 by the board of county commissioners and commissioner of revenue. 34.18(11)(12) To make diligent search each year for real and 34.19 personal property which has been omitted from assessment in the 34.20 county, and report all such omissions to the county auditor. 34.21(12)(13) To regularly confer with county assessors in all 34.22 adjacent counties about the assessment of property in order to 34.23 uniformly assess and equalize the value of similar properties 34.24 and classes of property located in adjacent counties. The 34.25 conference shall emphasize the assessment of agricultural and 34.26 commercial and industrial property or other properties that may 34.27 have an inadequate number of sales in a single county. 34.28(13)(14) To render such other services pertaining to the 34.29 assessment of real and personal property in the county as are 34.30 not inconsistent with the duties set forth in this section, and 34.31 as may be required by the board of county commissioners or by 34.32 the commissioner of revenue. 34.33(14)(15) To maintain a record, in conjunction with other 34.34 county offices, of all transfers of property to assist in 34.35 determining the proper classification of property, including but 34.36 not limited to, transferring homestead property and name changes 35.1 on homestead property. 35.2(15)(16) To determine if a homestead application is 35.3 required due to the transfer of homestead property or an owner's 35.4 name change on homestead property. 35.5 [EFFECTIVE DATE.] This section is effective July 1, 2001, 35.6 and thereafter. 35.7 Sec. 21. [273.0755] [TRAINING AND EDUCATION OF PROPERTY 35.8 TAX PERSONNEL.] 35.9 (a) Beginning with the four-year period starting on July 1, 35.10 2000, every person licensed by the state board of assessors at 35.11 the Accredited Minnesota Assessor level or higher, shall 35.12 successfully complete a week-long Minnesota laws course 35.13 sponsored by the department of revenue at least once in every 35.14 four-year period. An assessor need not attend the course if 35.15 they successfully pass the test for the course. 35.16 (b) The commissioner of revenue may require that each 35.17 county, and each city for which the city assessor performs the 35.18 duties of county assessor, have (i) a person on the assessor's 35.19 staff who is certified by the department of revenue in sales 35.20 ratio calculations, (ii) an officer or employee who is certified 35.21 by the department of revenue in tax calculations, and (iii) an 35.22 officer or employee who is certified by the department of 35.23 revenue in the proper preparation of abstracts of assessment. 35.24 The commissioner of revenue may require that each county have an 35.25 officer or employee who is certified by the department of 35.26 revenue in the proper preparation of abstracts of tax lists. 35.27 [EFFECTIVE DATE.] This section is effective July 1, 2001, 35.28 and thereafter. 35.29 Sec. 22. Minnesota Statutes 2000, section 273.11, 35.30 subdivision 1a, is amended to read: 35.31 Subd. 1a. [LIMITED MARKET VALUE.] (a) In the case of all 35.32 property classified as agricultural homestead or nonhomestead, 35.33 residential homestead or nonhomestead, or noncommercial seasonal 35.34 recreational residential, the assessor shall compare the value 35.35 with that determined in the preceding assessment. The amount of 35.36 the increase entered in the current assessment shall not exceed 36.1 the greater of (1) 8.5 percent of the value in the preceding 36.2 assessment, or (2) 15 percent of the difference between the 36.3 current assessment and the preceding assessment. This 36.4 limitation shall not apply to increases in value due to 36.5 improvements. For purposes of thissubdivisionparagraph, the 36.6 term "assessment" means the value prior to any exclusion under 36.7 subdivision 16. 36.8 The provisions of thissubdivisionparagraph shall be in 36.9 effect only through assessment year 2001. 36.10 (b) For purposes of the assessment/sales ratio study 36.11 conducted under section 127A.48, and the computation of state 36.12 aids paid under chapters 122A, 123A, 123B, 124D, 125A, 126C, 36.13 127A, and 477A, market values andnet tax capacitiesassessed 36.14 values determined under this subdivision and subdivision 16, 36.15 shall be used. 36.16 (c) In each of the assessment years 2002, 2003, and 2004, 36.17 the assessor shall enter the sum of the following amounts for 36.18 the properties described in paragraph (a): (i) the value 36.19 entered for the preceding assessment; (ii) the entire amount of 36.20 the increase between the amount determined for the prior 36.21 assessment and the amount determined for the current assessment; 36.22 plus (iii) one-third of the difference between the value entered 36.23 for the 2001 assessment and the value determined for the 2001 36.24 assessment. This limitation does not apply to increases in 36.25 value due to new improvements. For purposes of this paragraph, 36.26 the term "assessment" means the value prior to any exclusions 36.27 under subdivision 16. 36.28 [EFFECTIVE DATE.] This section is effective the day 36.29 following final enactment. 36.30 Sec. 23. Minnesota Statutes 2000, section 273.121, is 36.31 amended to read: 36.32 273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 36.33 Any county assessor or city assessor having the powers of a 36.34 county assessor, valuing or classifying taxable real property 36.35 shall in each year notify those persons whose property is to be 36.36assessed or reclassifiedincluded on the assessment roll that 37.1 year if the person's address is known to the assessor, otherwise 37.2 the occupant of the property. The notice shall be in writing 37.3 and shall be sent by ordinary mail at least ten days before the 37.4 meeting of the local board of review or equalization under 37.5 section 274.01 or the review process established under section 37.6 274.13, subdivision 1c. The notice may not be mailed within 37.7 five working days of the mailing of the tax statements, unless 37.8 this restriction conflicts with the mailing dates in the 37.9 preceding sentence or in section 276.04 and the approval of the 37.10 commissioner of revenue is obtained for a mailing within the 37.11 five-day period. It shall contain: (1) the market value for 37.12 the current and the prior assessment, (2) the limited market 37.13 value under section 273.11, subdivision 1a for the current and 37.14 the prior assessment, (3) the qualifying amount of any 37.15 improvements under section 273.11, subdivision 16 for the 37.16 current assessment, (4) the market value subject to taxation 37.17 after subtracting the amount of any qualifying improvements for 37.18 the current assessment, (5) thenewclassification of the 37.19 property for the current and prior assessment, (6) a note that 37.20 if the property is homestead and at least 35 years old, 37.21 improvements made to the property may be eligible for a 37.22 valuation exclusion under section 273.11, subdivision 16, (7) 37.23 the assessor's office address, and (8) the dates, places, and 37.24 times set for the meetings of the local board of review or 37.25 equalization, the review process established under section 37.26 274.13, subdivision 1c, and the county board of appeal and 37.27 equalization.If the assessment roll is not complete, the37.28notice shall be sent by ordinary mail at least ten days prior to37.29the date on which the board of review has adjournedThe 37.30 commissioner of revenue shall specify the form of the notice. 37.31 The assessor shall attach to the assessment roll a statement 37.32 that the notices required by this section have been mailed. Any 37.33 assessor who is not provided sufficient funds from the 37.34 assessor's governing body to provide such notices, may make 37.35 application to the commissioner of revenue to finance such 37.36 notices. The commissioner of revenue shall conduct an 38.1 investigation and, if satisfied that the assessor does not have 38.2 the necessary funds, issue a certification to the commissioner 38.3 of finance of the amount necessary to provide such notices. The 38.4 commissioner of finance shall issue a warrant for such amount 38.5 and shall deduct such amount from any state payment to such 38.6 county or municipality. The necessary funds to make such 38.7 payments are hereby appropriated. Failure to receive the notice 38.8 shall in no way affect the validity of the assessment, the 38.9 resulting tax, the procedures of any board of review or 38.10 equalization, or the enforcement of delinquent taxes by 38.11 statutory means. 38.12 [EFFECTIVE DATE.] This section is effective for notices 38.13 required to be mailed in 2002 and thereafter. 38.14 Sec. 24. Minnesota Statutes 2000, section 273.124, 38.15 subdivision 13, is amended to read: 38.16 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 38.17 the homestead requirements under subdivision 1 must file a 38.18 homestead application with the county assessor to initially 38.19 obtain homestead classification. 38.20 (b) On or before January 2, 1993, each county assessor 38.21 shall mail a homestead application to the owner of each parcel 38.22 of property within the county which was classified as homestead 38.23 for the 1992 assessment year. The format and contents of a 38.24 uniform homestead application shall be prescribed by the 38.25 commissioner of revenue. The commissioner shall consult with 38.26 the chairs of the house and senate tax committees on the 38.27 contents of the homestead application form. The application 38.28 must clearly inform the taxpayer that this application must be 38.29 signed by all owners who occupy the property or by the 38.30 qualifying relative and returned to the county assessor in order 38.31 for the property to continue receiving homestead treatment. The 38.32 envelope containing the homestead application shall clearly 38.33 identify its contents and alert the taxpayer of its necessary 38.34 immediate response. 38.35 (c) Every property owner applying for homestead 38.36 classification must furnish to the county assessor the social 39.1 security number of each occupant who is listed as an owner of 39.2 the property on the deed of record, the name and address of each 39.3 owner who does not occupy the property, and the name and social 39.4 security number of each owner's spouse who occupies the 39.5 property. The application must be signed by each owner who 39.6 occupies the property and by each owner's spouse who occupies 39.7 the property, or, in the case of property that qualifies as a 39.8 homestead under subdivision 1, paragraph (c), by the qualifying 39.9 relative. 39.10 If a property owner occupies a homestead, the property 39.11 owner's spouse may not claim another property as a homestead 39.12 unless the property owner and the property owner's spouse file 39.13 with the assessor an affidavit or other proof required by the 39.14 assessor stating that the property qualifies as a homestead 39.15 under subdivision 1, paragraph (e). 39.16 Owners or spouses occupying residences owned by their 39.17 spouses and previously occupied with the other spouse, either of 39.18 whom fail to include the other spouse's name and social security 39.19 number on the homestead application or provide the affidavits or 39.20 other proof requested, will be deemed to have elected to receive 39.21 only partial homestead treatment of their residence. The 39.22 remainder of the residence will be classified as nonhomestead 39.23 residential. When an owner or spouse's name and social security 39.24 number appear on homestead applications for two separate 39.25 residences and only one application is signed, the owner or 39.26 spouse will be deemed to have elected to homestead the residence 39.27 for which the application was signed. 39.28 The social security numbers or affidavits or other proofs 39.29 of the property owners and spouses are private data on 39.30 individuals as defined by section 13.02, subdivision 12, but, 39.31 notwithstanding that section, the private data may be disclosed 39.32 to the commissioner of revenue, or, for purposes of proceeding 39.33 under the Revenue Recapture Act to recover personal property 39.34 taxes owing, to the county treasurer. 39.35 (d) If residential real estate is occupied and used for 39.36 purposes of a homestead by a relative of the owner and qualifies 40.1 for a homestead under subdivision 1, paragraph (c), in order for 40.2 the property to receive homestead status, a homestead 40.3 application must be filed with the assessor. The social 40.4 security number of each relative occupying the property and the 40.5 social security number of each owner who is related to an 40.6 occupant of the property shall be required on the homestead 40.7 application filed under this subdivision. If a different 40.8 relative of the owner subsequently occupies the property, the 40.9 owner of the property must notify the assessor within 30 days of 40.10 the change in occupancy. The social security number of a 40.11 relative occupying the property is private data on individuals 40.12 as defined by section 13.02, subdivision 12, but may be 40.13 disclosed to the commissioner of revenue. 40.14 (e) The homestead application shall also notify the 40.15 property owners that the application filed under this section 40.16 will not be mailed annually and that if the property is granted 40.17 homestead status for the 1993 assessment, or any assessment year 40.18 thereafter, that same property shall remain classified as 40.19 homestead until the property is sold or transferred to another 40.20 person, or the owners, the spouse of the owner, or the relatives 40.21 no longer use the property as their homestead. Upon the sale or 40.22 transfer of the homestead property, a certificate of value must 40.23 be timely filed with the county auditor as provided under 40.24 section 272.115. Failure to notify the assessor within 30 days 40.25 that the property has been sold, transferred, or that the owner, 40.26 the spouse of the owner, or the relative is no longer occupying 40.27 the property as a homestead, shall result in the penalty 40.28 provided under this subdivision and the property will lose its 40.29 current homestead status. 40.30 (f) If the homestead application is not returned within 30 40.31 days, the county will send a second application to the present 40.32 owners of record. The notice of proposed property taxes 40.33 prepared under section 275.065, subdivision 3, shall reflect the 40.34 property's classification. Beginning with assessment year 1993 40.35 for all properties, if a homestead application has not been 40.36 filed with the county by December 15, the assessor shall 41.1 classify the property as nonhomestead for the current assessment 41.2 year for taxes payable in the following year, provided that the 41.3 owner may be entitled to receive the homestead classification by 41.4 proper application under section 375.192. 41.5 (g) At the request of the commissioner, each county must 41.6 give the commissioner a list that includes the name and social 41.7 security number of each property owner and the property owner's 41.8 spouse occupying the property, or relative of a property owner, 41.9 applying for homestead classification under this subdivision. 41.10 The commissioner shall use the information provided on the lists 41.11 as appropriate under the law, including for the detection of 41.12 improper claims by owners, or relatives of owners, under chapter 41.13 290A. 41.14 (h) If the commissioner finds that a property owner may be 41.15 claiming a fraudulent homestead, the commissioner shall notify 41.16 the appropriate counties. Within 90 days of the notification, 41.17 the county assessor shall investigate to determine if the 41.18 homestead classification was properly claimed. If the property 41.19 owner does not qualify, the county assessor shall notify the 41.20 county auditor who will determine the amount of homestead 41.21 benefits that had been improperly allowed. For the purpose of 41.22 this section, "homestead benefits" means the tax reduction 41.23 resulting from the classification as a homestead under section 41.24 273.13, the taconite homestead credit under section 273.135, the 41.25 residential homestead and agricultural homestead credits under 41.26 section 273.1384, and the supplemental homestead credit under 41.27 section 273.1391. 41.28 The county auditor shall send a notice to the person who 41.29 owned the affected property at the time the homestead 41.30 application related to the improper homestead was filed, 41.31 demanding reimbursement of the homestead benefits plus a penalty 41.32 equal to 100 percent of the homestead benefits. The person 41.33 notified may appeal the county's determination by serving copies 41.34 of a petition for review with county officials as provided in 41.35 section 278.01 and filing proof of service as provided in 41.36 section 278.01 with the Minnesota tax court within 60 days of 42.1 the date of the notice from the county. Procedurally, the 42.2 appeal is governed by the provisions in chapter 271 which apply 42.3 to the appeal of a property tax assessment or levy, but without 42.4 requiring any prepayment of the amount in controversy. If the 42.5 amount of homestead benefits and penalty is not paid within 60 42.6 days, and if no appeal has been filed, the county auditor shall 42.7 certify the amount of taxes and penalty to the county 42.8 treasurer. The county treasurer will add interest to the unpaid 42.9 homestead benefits and penalty amounts at the rate provided in 42.10 section 279.03 for real property taxes becoming delinquent in 42.11 the calendar year during which the amount remains unpaid. 42.12 Interest may be assessed for the period beginning 60 days after 42.13 demand for payment was made. 42.14 If the person notified is the current owner of the 42.15 property, the treasurer may add the total amount of homestead 42.16 benefits, penalty, interest, and costs to the ad valorem taxes 42.17 otherwise payable on the property by including the amounts on 42.18 the property tax statements under section 276.04, subdivision 42.19 3. The amounts added under this paragraph to the ad valorem 42.20 taxes shall include interest accrued through December 31 of the 42.21 year preceding the taxes payable year for which the amounts are 42.22 first added. These amounts, when added to the property tax 42.23 statement, become subject to all the laws for the enforcement of 42.24 real or personal property taxes for that year, and for any 42.25 subsequent year. 42.26 If the person notified is not the current owner of the 42.27 property, the treasurer may collect the amounts due under the 42.28 Revenue Recapture Act in chapter 270A, or use any of the powers 42.29 granted in sections 277.20 and 277.21 without exclusion, to 42.30 enforce payment of the homestead benefits, penalty, interest, 42.31 and costs, as if those amounts were delinquent tax obligations 42.32 of the person who owned the property at the time the application 42.33 related to the improperly allowed homestead was filed. The 42.34 treasurer may relieve a prior owner of personal liability for 42.35 the homestead benefits, penalty, interest, and costs, and 42.36 instead extend those amounts on the tax lists against the 43.1 property as provided in this paragraph to the extent that the 43.2 current owner agrees in writing. On all demands, billings, 43.3 property tax statements, and related correspondence, the county 43.4 must list and state separately the amounts of homestead 43.5 benefits, penalty, interest and costs being demanded, billed or 43.6 assessed. 43.7 (i) Any amount of homestead benefits recovered by the 43.8 county from the property owner shall be distributed to the 43.9 county, city or town, and school district where the property is 43.10 located in the same proportion that each taxing district's levy 43.11 was to the total of the three taxing districts' levy for the 43.12 current year. Any amount recovered attributable to taconite 43.13 homestead credit shall be transmitted to the St. Louis county 43.14 auditor to be deposited in the taconite property tax relief 43.15 account. Any amount recovered that is attributable to 43.16 supplemental homestead credit is to be transmitted to the 43.17 commissioner of revenue for deposit in the general fund of the 43.18 state treasury. The total amount of penalty collected must be 43.19 deposited in the county general fund. 43.20 (j) If a property owner has applied for more than one 43.21 homestead and the county assessors cannot determine which 43.22 property should be classified as homestead, the county assessors 43.23 will refer the information to the commissioner. The 43.24 commissioner shall make the determination and notify the 43.25 counties within 60 days. 43.26 (k) In addition to lists of homestead properties, the 43.27 commissioner may ask the counties to furnish lists of all 43.28 properties and the record owners. The social security numbers 43.29 and federal identification numbers that are maintained by a 43.30 county or city assessor for property tax administration 43.31 purposes, and that may appear on the lists retain their 43.32 classification as private or nonpublic data; but may be viewed, 43.33 accessed, and used by the county auditor or treasurer of the 43.34 same county for the limited purpose of assisting the 43.35 commissioner in the preparation of microdata samples under 43.36 section 270.0681. 44.1 [EFFECTIVE DATE.] This section is effective for homestead 44.2 applications submitted on or after the day following final 44.3 enactment. 44.4 Sec. 25. Minnesota Statutes 2000, section 273.13, is 44.5 amended by adding a subdivision to read: 44.6 Subd. 21c. [ASSESSED VALUE.] "Assessed value" means the 44.7 product of the appropriate class rates in this section and 44.8 market values. 44.9 [EFFECTIVE DATE.] This section is effective for taxes 44.10 payable in 2002 and thereafter. 44.11 Sec. 26. Minnesota Statutes 2000, section 273.13, 44.12 subdivision 22, is amended to read: 44.13 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 44.14 23 and in paragraphs (b) and (c), real estate which is 44.15 residential and used for homestead purposes is class11a. The 44.16 market value of class 1a property must be determined based upon 44.17 the value of the house, garage, and land. 44.18 The first$76,000$200,000 of market value of class 1a 44.19 property has anetclass rate ofone percent of its market value44.20 0.50; and the market value of class 1a property that 44.21 exceeds$76,000$200,000 has a class rate of1.65 percent of its44.22market value0.75. 44.23 (b) Class 1b property includes homestead real estate or 44.24 homestead manufactured homes used for the purposes of a 44.25 homestead by 44.26 (1) any blind person, or the blind person and the blind 44.27 person's spouse; or 44.28 (2) any person, hereinafter referred to as "veteran," who: 44.29 (i) served in the active military or naval service of the 44.30 United States; and 44.31 (ii) is entitled to compensation under the laws and 44.32 regulations of the United States for permanent and total 44.33 service-connected disability due to the loss, or loss of use, by 44.34 reason of amputation, ankylosis, progressive muscular 44.35 dystrophies, or paralysis, of both lower extremities, such as to 44.36 preclude motion without the aid of braces, crutches, canes, or a 45.1 wheelchair; and 45.2 (iii) has acquired a special housing unit with special 45.3 fixtures or movable facilities made necessary by the nature of 45.4 the veteran's disability, or the surviving spouse of the 45.5 deceased veteran for as long as the surviving spouse retains the 45.6 special housing unit as a homestead; or 45.7 (3) any person who: 45.8 (i) is permanently and totally disabled and 45.9 (ii) receives 90 percent or more of total household income, 45.10 as defined in section 290A.03, subdivision 5, from 45.11 (A) aid from any state as a result of that disability; or 45.12 (B) supplemental security income for the disabled; or 45.13 (C) workers' compensation based on a finding of total and 45.14 permanent disability; or 45.15 (D) social security disability, including the amount of a 45.16 disability insurance benefit which is converted to an old age 45.17 insurance benefit and any subsequent cost of living increases; 45.18 or 45.19 (E) aid under the federal Railroad Retirement Act of 1937, 45.20 United States Code Annotated, title 45, section 228b(a)5; or 45.21 (F) a pension from any local government retirement fund 45.22 located in the state of Minnesota as a result of that 45.23 disability; or 45.24 (G) pension, annuity, or other income paid as a result of 45.25 that disability from a private pension or disability plan, 45.26 including employer, employee, union, and insurance plans and 45.27 (iii) has household income as defined in section 290A.03, 45.28 subdivision 5, of $50,000 or less; or 45.29 (4) any person who is permanently and totally disabled and 45.30 whose household income as defined in section 290A.03, 45.31 subdivision 5, is 275 percent or less of the federal poverty 45.32 level. 45.33 Property is classified and assessed under clause (4) only 45.34 if the government agency or income-providing source certifies, 45.35 upon the request of the homestead occupant, that the homestead 45.36 occupant satisfies the disability requirements of this paragraph. 46.1 Property is classified and assessed pursuant to clause (1) 46.2 only if the commissioner of economic security certifies to the 46.3 assessor that the homestead occupant satisfies the requirements 46.4 of this paragraph. 46.5 Permanently and totally disabled for the purpose of this 46.6 subdivision means a condition which is permanent in nature and 46.7 totally incapacitates the person from working at an occupation 46.8 which brings the person an income. The first $32,000 market 46.9 value of class 1b property has anetclass rate of.45 percent46.10of its market value0.225. The remaining market value of class 46.11 1b property has anetclass rate using the rates for class11a 46.12 or class 2a property, whichever is appropriate, of similar 46.13 market value. 46.14 (c) Class 1c property is commercial use real property that 46.15 abuts a lakeshore line and is devoted to temporary and seasonal 46.16 residential occupancy for recreational purposes but not devoted 46.17 to commercial purposes for more than 250 days in the year 46.18 preceding the year of assessment, and that includes a portion 46.19 used as a homestead by the owner, which includes a dwelling 46.20 occupied as a homestead by a shareholder of a corporation that 46.21 owns the resort or a partner in a partnership that owns the 46.22 resort, even if the title to the homestead is held by the 46.23 corporation or partnership. For purposes of this clause, 46.24 property is devoted to a commercial purpose on a specific day if 46.25 any portion of the property, excluding the portion used 46.26 exclusively as a homestead, is used for residential occupancy 46.27 and a fee is charged for residential occupancy. The first 46.28 $200,000 of market value of class 1c property has a class rate 46.29 ofone percent of total0.50, and the remaining market value of 46.30 class 1c property has a class rate of 0.75, with the following 46.31 limitation: the area of the property must not exceed 100 feet 46.32 of lakeshore footage for each cabin or campsite located on the 46.33 property up to a total of 800 feet and 500 feet in depth, 46.34 measured away from the lakeshore. If any portion of the class 46.35 1c resort property is classified as class 4c under subdivision 46.36 25, the entire property must meet the requirements of 47.1 subdivision 25, paragraph (d), clause (1), to qualify for class 47.2 1c treatment under this paragraph. 47.3 (d) Class 1d property includes structures that meet all of 47.4 the following criteria: 47.5 (1) the structure is located on property that is classified 47.6 as agricultural property under section 273.13, subdivision 23; 47.7 (2) the structure is occupied exclusively by seasonal farm 47.8 workers during the time when they work on that farm, and the 47.9 occupants are not charged rent for the privilege of occupying 47.10 the property, provided that use of the structure for storage of 47.11 farm equipment and produce does not disqualify the property from 47.12 classification under this paragraph; 47.13 (3) the structure meets all applicable health and safety 47.14 requirements for the appropriate season; and 47.15 (4) the structure is not salable as residential property 47.16 because it does not comply with local ordinances relating to 47.17 location in relation to streets or roads. 47.18 The market value of class 1d property has the same class 47.19 rates as class 1a property under paragraph (a). 47.20 [EFFECTIVE DATE.] This section is effective for taxes 47.21 payable in 2002 and thereafter. 47.22 Sec. 27. Minnesota Statutes 2000, section 273.13, 47.23 subdivision 23, is amended to read: 47.24 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 47.25 land including any improvements that is homesteaded. The market 47.26 value of the house and garage and immediately surrounding one 47.27 acre of land has the same class rates as class 1a property under 47.28 subdivision 22. The market value of the remaining land 47.29 including improvements up to$115,000$600,000 has anetclass 47.30 rate of0.35 percent of market value0.30. The market value of 47.31 class 2a property over$115,000 of market value up to and47.32including$600,000market valuehas anetclass rate of0.847.33percent of market value0.50.The remaining property over47.34$600,000 market value has a class rate of 1.20 percent of market47.35value.47.36 (b) Class 2b property is (1) real estate, rural in 48.1 character and used exclusively for growing trees for timber, 48.2 lumber, and wood and wood products; (2) real estate that is (i) 48.3 not improved with a structure and is used exclusively for 48.4 growing trees for timber, lumber, and wood and wood products, if 48.5 the owner has participated or is participating in a cost-sharing 48.6 program for afforestation, reforestation, or timber stand 48.7 improvement on that particular property, administered or 48.8 coordinated by the commissioner of natural resources, or (ii) 48.9 forest land, as defined in section 290C.02; (3) real estate that 48.10 is nonhomestead agricultural land; or (4) a landing area or 48.11 public access area of a privately owned public use airport. The 48.12 market value of class 2b property has anetclass rate of1.2048.13percent of market value0.50. 48.14 (c) Agricultural land as used in this section means 48.15 contiguous acreage of ten acres or more, used during the 48.16 preceding year for agricultural purposes. "Agricultural 48.17 purposes" as used in this section means the raising or 48.18 cultivation of agricultural products or enrollment in the 48.19 Reinvest in Minnesota program under sections 103F.501 to 48.20 103F.535 or the federal Conservation Reserve Program as 48.21 contained in Public Law Number 99-198. Contiguous acreage on 48.22 the same parcel, or contiguous acreage on an immediately 48.23 adjacent parcel under the same ownership, may also qualify as 48.24 agricultural land, but only if it is pasture, timber, waste, 48.25 unusable wild land, or land included in state or federal farm 48.26 programs. Agricultural classification for property shall be 48.27 determined excluding the house, garage, and immediately 48.28 surrounding one acre of land, and shall not be based upon the 48.29 market value of any residential structures on the parcel or 48.30 contiguous parcels under the same ownership. 48.31 (d) Real estate, excluding the house, garage, and 48.32 immediately surrounding one acre of land, of less than ten acres 48.33 which is exclusively and intensively used for raising or 48.34 cultivating agricultural products, shall be considered as 48.35 agricultural land. 48.36 Land shall be classified as agricultural even if all or a 49.1 portion of the agricultural use of that property is the leasing 49.2 to, or use by another person for agricultural purposes. 49.3 Classification under this subdivision is not determinative 49.4 for qualifying under section 273.111. 49.5 The property classification under this section supersedes, 49.6 for property tax purposes only, any locally administered 49.7 agricultural policies or land use restrictions that define 49.8 minimum or maximum farm acreage. 49.9 (e) The term "agricultural products" as used in this 49.10 subdivision includes production for sale of: 49.11 (1) livestock, dairy animals, dairy products, poultry and 49.12 poultry products, fur-bearing animals, horticultural and nursery 49.13 stock described in sections 18.44 to 18.61, fruit of all kinds, 49.14 vegetables, forage, grains, bees, and apiary products by the 49.15 owner; 49.16 (2) fish bred for sale and consumption if the fish breeding 49.17 occurs on land zoned for agricultural use; 49.18 (3) the commercial boarding of horses if the boarding is 49.19 done in conjunction with raising or cultivating agricultural 49.20 products as defined in clause (1); 49.21 (4) property which is owned and operated by nonprofit 49.22 organizations used for equestrian activities, excluding racing; 49.23 (5) game birds and waterfowl bred and raised for use on a 49.24 shooting preserve licensed under section 97A.115; 49.25 (6) insects primarily bred to be used as food for animals; 49.26 and 49.27 (7) trees, grown for sale as a crop, and not sold for 49.28 timber, lumber, wood, or wood products. 49.29 (f) If a parcel used for agricultural purposes is also used 49.30 for commercial or industrial purposes, including but not limited 49.31 to: 49.32 (1) wholesale and retail sales; 49.33 (2) processing of raw agricultural products or other goods; 49.34 (3) warehousing or storage of processed goods; and 49.35 (4) office facilities for the support of the activities 49.36 enumerated in clauses (1), (2), and (3), 50.1 the assessor shall classify the part of the parcel used for 50.2 agricultural purposes as class 1b, 2a, or 2b, whichever is 50.3 appropriate, and the remainder in the class appropriate to its 50.4 use. The grading, sorting, and packaging of raw agricultural 50.5 products for first sale is considered an agricultural purpose. 50.6 A greenhouse or other building where horticultural or nursery 50.7 products are grown that is also used for the conduct of retail 50.8 sales must be classified as agricultural if it is primarily used 50.9 for the growing of horticultural or nursery products from seed, 50.10 cuttings, or roots and occasionally as a showroom for the retail 50.11 sale of those products. Use of a greenhouse or building only 50.12 for the display of already grown horticultural or nursery 50.13 products does not qualify as an agricultural purpose. 50.14 The assessor shall determine and list separately on the 50.15 records the market value of the homestead dwelling and the one 50.16 acre of land on which that dwelling is located. If any farm 50.17 buildings or structures are located on this homesteaded acre of 50.18 land, their market value shall not be included in this separate 50.19 determination. 50.20 (g) To qualify for classification under paragraph (b), 50.21 clause (4), a privately owned public use airport must be 50.22 licensed as a public airport under section 360.018. For 50.23 purposes of paragraph (b), clause (4), "landing area" means that 50.24 part of a privately owned public use airport properly cleared, 50.25 regularly maintained, and made available to the public for use 50.26 by aircraft and includes runways, taxiways, aprons, and sites 50.27 upon which are situated landing or navigational aids. A landing 50.28 area also includes land underlying both the primary surface and 50.29 the approach surfaces that comply with all of the following: 50.30 (i) the land is properly cleared and regularly maintained 50.31 for the primary purposes of the landing, taking off, and taxiing 50.32 of aircraft; but that portion of the land that contains 50.33 facilities for servicing, repair, or maintenance of aircraft is 50.34 not included as a landing area; 50.35 (ii) the land is part of the airport property; and 50.36 (iii) the land is not used for commercial or residential 51.1 purposes. 51.2 The land contained in a landing area under paragraph (b), clause 51.3 (4), must be described and certified by the commissioner of 51.4 transportation. The certification is effective until it is 51.5 modified, or until the airport or landing area no longer meets 51.6 the requirements of paragraph (b), clause (4). For purposes of 51.7 paragraph (b), clause (4), "public access area" means property 51.8 used as an aircraft parking ramp, apron, or storage hangar, or 51.9 an arrival and departure building in connection with the airport. 51.10 [EFFECTIVE DATE.] This section is effective for taxes 51.11 payable in 2002 and thereafter, except that the classification 51.12 of property under paragraph (b), clause (2), item (ii), is 51.13 effective for taxes payable in 2003 and thereafter. 51.14 Sec. 28. Minnesota Statutes 2000, section 273.13, 51.15 subdivision 24, is amended to read: 51.16 Subd. 24. [CLASS 3.] (a) Commercial and industrial 51.17 property and utility real and personal property is class 3a. 51.18 (1) Except as otherwise provided, each parcel of 51.19 commercial, industrial, or utility real property has a class 51.20 rate of2.4 percent of0.75 for the first tier of market value, 51.21 and3.4 percent of1.0 for the remaining market value. In the 51.22 case of contiguous parcels of property owned by the same person 51.23 or entity, only the value equal to the first-tier value of the 51.24 contiguous parcels qualifies for the reduced class rate, except 51.25 that contiguous parcels owned by the same person or entity shall 51.26 be eligible for the first-tier value class rate on each separate 51.27 business operated by the owner of the property, provided the 51.28 business is housed in a separate structure. For the purposes of 51.29 this subdivision, the first tier means the 51.30 first$150,000$200,000 of market value. Real property owned in 51.31 fee by a utility for transmission line right-of-way shall be 51.32 classified at the class rate for the higher tier. 51.33 For purposes of this subdivision, parcels are considered to 51.34 be contiguous even if they are separated from each other by a 51.35 road, street, waterway, or other similar intervening type of 51.36 property. Connections between parcels that consist of power 52.1 lines or pipelines do not cause the parcels to be contiguous. 52.2 Property owners who have contiguous parcels of property that 52.3 constitute separate businesses that may qualify for the 52.4 first-tier class rate shall notify the assessor by July 1, for 52.5 treatment beginning in the following taxes payable year. 52.6 (2) Notwithstanding clauses (1) and (3), all railroad 52.7 operating property and all personal property that is: (i) part 52.8 of an electric generation, transmission, or distribution system; 52.9 or (ii) part of a pipeline system transporting or distributing 52.10 water, gas, crude oil, or petroleum products; and (iii) not 52.11 described in clause (3), has a class rateas provided under52.12clause (1) for the first tierof 0.75 for the first $200,000 of 52.13 market value and a class rate of 1.0 for the remaining market 52.14 value. In the case of multiple parcels in one county that are 52.15 owned by one person or entity, only one first tier amount is 52.16 eligible for the reduced rate. 52.17 (3) The entire market value of personal property that is: 52.18 (i) tools, implements, and machinery of an electric generation, 52.19 transmission, or distribution system; (ii) tools, implements, 52.20 and machinery of a pipeline system transporting or distributing 52.21 water, gas, crude oil, or petroleum products; or (iii) the mains 52.22 and pipes used in the distribution of steam or hot or chilled 52.23 water for heating or cooling buildings, has a class rate as 52.24 provided under clause (1) for the remaining market value in 52.25 excess of the first tier. 52.26 (b) Employment property defined in section 469.166, during 52.27 the period provided in section 469.170, shall constitute class 52.28 3b. The class rates for class 3b property are determined under 52.29 paragraph (a). 52.30(c)(1) Subject to the limitations of clause (2), structures52.31which are (i) located on property classified as class 3a, (ii)52.32constructed under an initial building permit issued after52.33January 2, 1996, (iii) located in a transit zone as defined52.34under section 473.3915, subdivision 3, (iv) located within the52.35boundaries of a school district, and (v) not primarily used for52.36retail or transient lodging purposes, shall have a class rate53.1equal to the lesser of 2.975 percent or the class rate of the53.2second tier of the commercial property rate under paragraph (a)53.3on any portion of the market value that does not qualify for the53.4first tier class rate under paragraph (a). As used in item (v),53.5a structure is primarily used for retail or transient lodging53.6purposes if over 50 percent of its square footage is used for53.7those purposes. A class rate equal to the lesser of 2.97553.8percent or the class rate of the second tier of the commercial53.9property class rate under paragraph (a) shall also apply to53.10improvements to existing structures that meet the requirements53.11of items (i) to (v) if the improvements are constructed under an53.12initial building permit issued after January 2, 1996, even if53.13the remainder of the structure was constructed prior to January53.142, 1996. For the purposes of this paragraph, a structure shall53.15be considered to be located in a transit zone if any portion of53.16the structure lies within the zone. If any property once53.17eligible for treatment under this paragraph ceases to remain53.18eligible due to revisions in transit zone boundaries, the53.19property shall continue to receive treatment under this53.20paragraph for a period of three years.53.21(2) This clause applies to any structure qualifying for the53.22transit zone reduced class rate under clause (1) on January 2,53.231999, or any structure meeting any of the qualification criteria53.24in item (i) and otherwise qualifying for the transit zone53.25reduced class rate under clause (1). Such a structure continues53.26to receive the transit zone reduced class rate until the53.27occurrence of one of the events in item (ii). Property53.28qualifying under item (i)(D), that is located outside of a city53.29of the first class, qualifies for the transit zone reduced class53.30rate as provided in that item. Property qualifying under item53.31(i)(E) qualifies for the transit zone reduced class rate as53.32provided in that item.53.33(i) A structure qualifies for the rate in this clause if it53.34is:53.35(A) property for which a building permit was issued before53.36December 31, 1998; or54.1(B) property for which a building permit was issued before54.2June 30, 2001, if:54.3(I) at least 50 percent of the land on which the structure54.4is to be built has been acquired or is the subject of signed54.5purchase agreements or signed options as of March 15, 1998, by54.6the entity that proposes construction of the project or an54.7affiliate of the entity;54.8(II) signed agreements have been entered into with one54.9entity or with affiliated entities to lease for the account of54.10the entity or affiliated entities at least 50 percent of the54.11square footage of the structure or the owner of the structure54.12will occupy at least 50 percent of the square footage of the54.13structure; and54.14(III) one of the following requirements is met:54.15the project proposer has submitted the completed data54.16portions of an environmental assessment worksheet by December54.1731, 1998; or54.18a notice of determination of adequacy of an environmental54.19impact statement has been published by April 1, 1999; or54.20an alternative urban areawide review has been completed by54.21April 1, 1999; or54.22(C) property for which a building permit is issued before54.23July 30, 1999, if:54.24(I) at least 50 percent of the land on which the structure54.25is to be built has been acquired or is the subject of signed54.26purchase agreements as of March 31, 1998, by the entity that54.27proposes construction of the project or an affiliate of the54.28entity;54.29(II) a signed agreement has been entered into between the54.30building developer and a tenant to lease for its own account at54.31least 200,000 square feet of space in the building;54.32(III) a signed letter of intent is entered into by July 1,54.331998, between the building developer and the tenant to lease the54.34space for its own account; and54.35(IV) the environmental review process required by state law54.36was commenced by December 31, 1998;55.1(D) property for which an irrevocable letter of credit with55.2a housing and redevelopment authority was signed before December55.331, 1998. The structure shall receive the transit zone reduced55.4class rate during construction and for the duration of time that55.5the original tenants remain in the building. Any unoccupied net55.6leasable square footage that is not leased within 36 months55.7after the certificate of occupancy has been issued for the55.8building shall not be eligible to receive the reduced class55.9rate. This reduced class rate applies only if a qualifying55.10entity continues to own the property;55.11(E) property, located in a city of the first class, and for55.12which the building permits for the excavation, the parking ramp,55.13and the office tower were issued prior to April 1, 1999, shall55.14receive the reduced class rate during construction and for the55.15first five assessment years immediately following its initial55.16occupancy provided that, when completed, at least 25 percent of55.17the net leasable square footage must be occupied by a qualifying55.18entity each year during this time period. In order to receive55.19the reduced class rate on the structure in any subsequent55.20assessment years, at least 50 percent of the rentable square55.21footage must be occupied by a qualifying entity. This reduced55.22class rate applies only if a qualifying entity continues to own55.23the property.55.24(ii) A structure specified by this clause, other than a55.25structure qualifying under clause (i)(D) or (E), shall continue55.26to receive the transit zone reduced class rate until the55.27occurrence of one of the following events:55.28(A) if the structure upon initial occupancy will be owner55.29occupied by the entity initially constructing the structure or55.30an affiliated entity, the structure receives the reduced class55.31rate until the structure ceases to be at least 50 percent55.32occupied by the entity or an affiliated entity, provided, if the55.33portion of the structure occupied by that entity or an affiliate55.34of the entity is less than 85 percent, the transit zone class55.35rate reduction for the portion of structure not so occupied55.36terminates upon the leasing of such space to any nonaffiliated56.1entity; or56.2(B) if the structure is leased by a single entity or56.3affiliated entity at the time of initial occupancy, the56.4structure shall receive the reduced class rate until the56.5structure ceases to be at least 50 percent occupied by the56.6entity or an affiliated entity, provided, if the portion of the56.7structure occupied by that entity or an affiliate of the entity56.8is less than 85 percent, the transit zone class rate reduction56.9for the portion of structure not so occupied shall terminate56.10upon the leasing of such space to any nonaffiliated entity; or56.11(C) if the structure meets the criteria in item (i)(C), the56.12structure shall receive the reduced class rate until the56.13expiration of the initial lease term of the applicable tenants.56.14Percentages occupied or leased shall be determined based56.15upon net leasable square footage in the structure. The assessor56.16shall allocate the value of the structure in the same fashion as56.17provided in the general law for portions of any structure56.18receiving and not receiving the transit tax class reduction as a56.19result of this clause.56.20(3) For purposes of paragraph (c), "qualifying entity"56.21means the entity owning the property on September 1, 2000, or an56.22affiliate of an entity that owned the property on September 1,56.232000.56.24 [EFFECTIVE DATE.] This section is effective for taxes 56.25 payable in 2002 and thereafter. 56.26 Sec. 29. Minnesota Statutes 2000, section 273.13, 56.27 subdivision 25, is amended to read: 56.28 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 56.29 estate containing four or more units and used or held for use by 56.30 the owner or by the tenants or lessees of the owner as a 56.31 residence for rental periods of 30 days or more. Class 4a also 56.32 includes hospitals licensed under sections 144.50 to 144.56, 56.33 other than hospitals exempt under section 272.02, and contiguous 56.34 property used for hospital purposes, without regard to whether 56.35 the property has been platted or subdivided. The market value 56.36 of class 4a propertyin a city with a population of 5,000 or57.1less, that is (1) located outside of the metropolitan area, as57.2defined in section 473.121, subdivision 2, or outside any county57.3contiguous to the metropolitan area, and (2) whose city boundary57.4is at least 15 miles from the boundary of any city with a57.5population greater than 5,000 has a class rate of 2.15 percent57.6of market value. All other class 4a propertyhas a class rate 57.7 of2.4 percent of market value. For purposes of this paragraph,57.8population has the same meaning given in section 477A.011,57.9subdivision 30.75. 57.10 (b) Class 4b includes: 57.11 (1) residential real estate containing less than four units 57.12 that does not qualify as class 4bb, other than seasonal 57.13 residential, and recreational; 57.14 (2) manufactured homes not classified under any other 57.15 provision; 57.16 (3) a dwelling, garage, and surrounding one acre of 57.17 property on a nonhomestead farm classified under subdivision 23, 57.18 paragraph (b) containing two or three units; 57.19 (4) unimproved property that is classified residential as 57.20 determined under subdivision 33. 57.21 The market value of class 4b property has a class rate of 57.221.65 percent of market value0.75. 57.23 (c) Class 4bb includes: 57.24 (1) nonhomestead residential real estate containing one 57.25 unit, other than seasonal residential, and recreational; and 57.26 (2) a single family dwelling, garage, and surrounding one 57.27 acre of property on a nonhomestead farm classified under 57.28 subdivision 23, paragraph (b). 57.29 Class 4bb has a class rate of1.2 percent0.50 on the first 57.30$76,000$200,000 of market value and a class rate of1.6557.31percentof 0.75 for that portion of its market value that 57.32 exceeds$76,000$200,000. 57.33 Property that has been classified as seasonal recreational 57.34 residential property at any time during which it has been owned 57.35 by the current owner or spouse of the current owner does not 57.36 qualify for class 4bb. 58.1 (d) Class 4c property includes: 58.2 (1) except as provided in subdivision 22, paragraph (c), 58.3 real property devoted to temporary and seasonal residential 58.4 occupancy for recreation purposes, including real property 58.5 devoted to temporary and seasonal residential occupancy for 58.6 recreation purposes and not devoted to commercial purposes for 58.7 more than 250 days in the year preceding the year of 58.8 assessment. For purposes of this clause, property is devoted to 58.9 a commercial purpose on a specific day if any portion of the 58.10 property is used for residential occupancy, and a fee is charged 58.11 for residential occupancy. In order for a property to be 58.12 classified as class 4c, seasonal recreational residential for 58.13 commercial purposes, at least 40 percent of the annual gross 58.14 lodging receipts related to the property must be from business 58.15 conducted during 90 consecutive days and either (i) at least 60 58.16 percent of all paid bookings by lodging guests during the year 58.17 must be for periods of at least two consecutive nights; or (ii) 58.18 at least 20 percent of the annual gross receipts must be from 58.19 charges for rental of fish houses, boats and motors, 58.20 snowmobiles, downhill or cross-country ski equipment, or charges 58.21 for marina services, launch services, and guide services, or the 58.22 sale of bait and fishing tackle. For purposes of this 58.23 determination, a paid booking of five or more nights shall be 58.24 counted as two bookings. Class 4c also includes commercial use 58.25 real property used exclusively for recreational purposes in 58.26 conjunction with class 4c property devoted to temporary and 58.27 seasonal residential occupancy for recreational purposes, up to 58.28 a total of two acres, provided the property is not devoted to 58.29 commercial recreational use for more than 250 days in the year 58.30 preceding the year of assessment and is located within two miles 58.31 of the class 4c property with which it is used. Class 4c 58.32 property classified in this clause also includes the remainder 58.33 of class 1c resorts provided that the entire property including 58.34 that portion of the property classified as class 1c also meets 58.35 the requirements for class 4c under this clause; otherwise the 58.36 entire property is classified as class 3. Owners of real 59.1 property devoted to temporary and seasonal residential occupancy 59.2 for recreation purposes and all or a portion of which was 59.3 devoted to commercial purposes for not more than 250 days in the 59.4 year preceding the year of assessment desiring classification as 59.5 class 1c or 4c, must submit a declaration to the assessor 59.6 designating the cabins or units occupied for 250 days or less in 59.7 the year preceding the year of assessment by January 15 of the 59.8 assessment year. Those cabins or units and a proportionate 59.9 share of the land on which they are located will be designated 59.10 class 1c or 4c as otherwise provided. The remainder of the 59.11 cabins or units and a proportionate share of the land on which 59.12 they are located will be designated as class 3a. The owner of 59.13 property desiring designation as class 1c or 4c property must 59.14 provide guest registers or other records demonstrating that the 59.15 units for which class 1c or 4c designation is sought were not 59.16 occupied for more than 250 days in the year preceding the 59.17 assessment if so requested. The portion of a property operated 59.18 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 59.19 nonresidential facility operated on a commercial basis not 59.20 directly related to temporary and seasonal residential occupancy 59.21 for recreation purposes shall not qualify for class 1c or 4c; 59.22 (2) qualified property used as a golf course if: 59.23 (i) it is open to the public on a daily fee basis. It may 59.24 charge membership fees or dues, but a membership fee may not be 59.25 required in order to use the property for golfing, and its green 59.26 fees for golfing must be comparable to green fees typically 59.27 charged by municipal courses; and 59.28 (ii) it meets the requirements of section 273.112, 59.29 subdivision 3, paragraph (d). 59.30 A structure used as a clubhouse, restaurant, or place of 59.31 refreshment in conjunction with the golf course is classified as 59.32 class 3a property; 59.33 (3) real property up to a maximum of one acre of land owned 59.34 by a nonprofit community service oriented organization; provided 59.35 that the property is not used for a revenue-producing activity 59.36 for more than six days in the calendar year preceding the year 60.1 of assessment and the property is not used for residential 60.2 purposes on either a temporary or permanent basis. For purposes 60.3 of this clause, a "nonprofit community service oriented 60.4 organization" means any corporation, society, association, 60.5 foundation, or institution organized and operated exclusively 60.6 for charitable, religious, fraternal, civic, or educational 60.7 purposes, and which is exempt from federal income taxation 60.8 pursuant to section 501(c)(3), (10), or (19) of the Internal 60.9 Revenue Code of 1986, as amended through December 31, 1990. For 60.10 purposes of this clause, "revenue-producing activities" shall 60.11 include but not be limited to property or that portion of the 60.12 property that is used as an on-sale intoxicating liquor or 3.2 60.13 percent malt liquor establishment licensed under chapter 340A, a 60.14 restaurant open to the public, bowling alley, a retail store, 60.15 gambling conducted by organizations licensed under chapter 349, 60.16 an insurance business, or office or other space leased or rented 60.17 to a lessee who conducts a for-profit enterprise on the 60.18 premises. Any portion of the property which is used for 60.19 revenue-producing activities for more than six days in the 60.20 calendar year preceding the year of assessment shall be assessed 60.21 as class 3a. The use of the property for social events open 60.22 exclusively to members and their guests for periods of less than 60.23 24 hours, when an admission is not charged nor any revenues are 60.24 received by the organization shall not be considered a 60.25 revenue-producing activity; 60.26 (4) post-secondary student housing of not more than one 60.27 acre of land that is owned by a nonprofit corporation organized 60.28 under chapter 317A and is used exclusively by a student 60.29 cooperative, sorority, or fraternity for on-campus housing or 60.30 housing located within two miles of the border of a college 60.31 campus; 60.32 (5) manufactured home parks as defined in section 327.14, 60.33 subdivision 3; 60.34 (6) real property that is actively and exclusively devoted 60.35 to indoor fitness, health, social, recreational, and related 60.36 uses, is owned and operated by a not-for-profit corporation, and 61.1 is located within the metropolitan area as defined in section 61.2 473.121, subdivision 2; and 61.3 (7) a leased or privately owned noncommercial aircraft 61.4 storage hangar not exempt under section 272.01, subdivision 2, 61.5 and the land on which it is located, provided that: 61.6 (i) the land is on an airport owned or operated by a city, 61.7 town, county, metropolitan airports commission, or group 61.8 thereof; and 61.9 (ii) the land lease, or any ordinance or signed agreement 61.10 restricting the use of the leased premise, prohibits commercial 61.11 activity performed at the hangar. 61.12 If a hangar classified under this clause is sold after June 61.13 30, 2000, a bill of sale must be filed by the new owner with the 61.14 assessor of the county where the property is located within 60 61.15 days of the sale. 61.16 The market value of class 4c property has a class rate of 61.171.65 percent of market value0.75, except that (i)each parcel61.18ofseasonal residential recreational property not used for 61.19 commercial purposes has the same class rates as class 4bb 61.20 property, (ii)manufactured home parks assessed under clause (5)61.21have the same class rate as class 4b property, and (iii)61.22property described in paragraph (d), clause (4), has the same61.23class rate as the rate applicable to the first tier of class 4bb61.24nonhomestead residential real estate under paragraph (c)the 61.25 market value of commercial-use seasonal residential recreational 61.26 property has a class rate of 0.50, and (iii) the market value of 61.27 property described in clauses (2) and (6) has a class rate of 61.28 0.50. 61.29 (e) Class 4d property is qualifying low-income rental 61.30 housing certified to the assessor by the housing finance agency 61.31 under sections 273.126 and 462A.071. Class 4d includes land in 61.32 proportion to the total market value of the building that is 61.33 qualifying low-income rental housing. For all properties 61.34 qualifying as class 4d, the market value determined by the 61.35 assessor must be based on the normal approach to value using 61.36 normal unrestricted rents. 62.1 The market value of class 4d property has a class rate of 62.2one percent of market value0.40. 62.3 [EFFECTIVE DATE.] This section is effective for taxes 62.4 payable in 2002 and thereafter. 62.5 Sec. 30. Minnesota Statutes 2000, section 273.13, 62.6 subdivision 31, is amended to read: 62.7 Subd. 31. [CLASS 5.] Class 5 property includes: 62.8 (1) unmined iron ore and low-grade iron-bearing formations 62.9 as defined in section 273.14; and 62.10 (2) all other property not otherwise classified. 62.11 The market value of class 5 property has a class rate of 62.123.4 percent of market value1.0. 62.13 [EFFECTIVE DATE.] This section is effective for taxes 62.14 payable in 2002 and thereafter. 62.15 Sec. 31. Minnesota Statutes 2000, section 273.13, is 62.16 amended by adding a subdivision to read: 62.17 Subd. 34. [INFLATION ADJUSTMENT.] Beginning with the year 62.18 2002 assessment, for taxes payable in 2003, the commissioner of 62.19 revenue shall annually adjust the valuation limits specified in 62.20 subdivisions 22, 23, 24, and 25 for inflation. The commissioner 62.21 shall make the adjustments in accordance with section 290.06, 62.22 subdivision 2d, except that for the purposes of this subdivision 62.23 the percentage increase shall be determined from the year ending 62.24 on August 31, 2000, to the year ending on August 31 of the year 62.25 preceding the assessment year. The commissioner shall round the 62.26 valuation limits to the nearest $1,000. The commissioner shall 62.27 annually announce the valuation limits at the time specified in 62.28 section 290.06 for the succeeding assessment year. The 62.29 determination of the commissioner under this subdivision is not 62.30 a rule under the Administrative Procedure Act. 62.31 [EFFECTIVE DATE.] This section is effective July 1, 2001, 62.32 and thereafter. 62.33 Sec. 32. [273.1384] [MARKET VALUE HOMESTEAD CREDITS.] 62.34 Subdivision 1. [RESIDENTIAL HOMESTEAD MARKET VALUE 62.35 CREDIT.] Each county auditor shall determine a residential 62.36 homestead market value credit for each class 1a, 1b, 1c, and 2a 63.1 homestead property within the county. The credit is equal to 63.2 0.5 percent of the market value of the property. The amount of 63.3 homestead credit for a homestead may not exceed the lesser of 63.4 $330 or an amount that would reduce the tax on the parcel to an 63.5 amount equal to 0.85 percent of the parcel's market value. In 63.6 the case of an agricultural or resort homestead, only the market 63.7 value of the house, garage, and immediately surrounding one acre 63.8 of land is eligible in determining the property's residential 63.9 homestead market value credit. 63.10 Subd. 2. [AGRICULTURAL HOMESTEAD MARKET VALUE 63.11 CREDIT.] Except as provided in subdivision 1, property 63.12 classified as class 2a agricultural homestead is eligible for an 63.13 agricultural market value credit. The credit is equal to 0.25 63.14 percent of the property's market value. The credit under this 63.15 subdivision is limited to $288 for each homestead. 63.16 Subd. 3. [CREDIT REIMBURSEMENTS.] The county auditor shall 63.17 determine the tax reductions allowed under this section within 63.18 the county for each taxes payable year and shall certify that 63.19 amount to the commissioner of revenue as a part of the abstracts 63.20 of tax lists submitted by the county auditors under section 63.21 275.29. Any prior year adjustments shall also be certified on 63.22 the abstracts of tax lists. The commissioner shall review the 63.23 certifications for accuracy, and may make such changes as are 63.24 deemed necessary, or return the certification to the county 63.25 auditor for correction. 63.26 Subd. 4. [PAYMENT.] (a) The commissioner of revenue shall 63.27 reimburse each local taxing jurisdiction, other than school 63.28 districts, for the tax reductions granted under this section in 63.29 two equal installments on August 31 and December 15 of the taxes 63.30 payable year for which the reductions are granted, including in 63.31 each payment the prior year adjustments certified on the 63.32 abstracts for that taxes payable year. 63.33 (b) The commissioner of revenue shall certify the total of 63.34 the tax reductions granted under this section for each taxes 63.35 payable year within each school district to the commissioner of 63.36 the department of children, families, and learning and the 64.1 commissioner of children, families, and learning shall pay the 64.2 reimbursement amounts to each school district under the 64.3 provisions of section 273.1392. 64.4 Subd. 5. [APPROPRIATION.] An amount sufficient to make the 64.5 payments required by this section to taxing jurisdictions other 64.6 than school districts is annually appropriated from the general 64.7 fund to the commissioner of revenue. An amount sufficient to 64.8 make the payments required by this section for school districts 64.9 is annually appropriated from the general fund to the 64.10 commissioner of children, families, and learning. 64.11 [EFFECTIVE DATE.] This section is effective for taxes, 64.12 credits, and reimbursements payable in 2002, and thereafter. 64.13 Sec. 33. Minnesota Statutes 2000, section 273.1392, is 64.14 amended to read: 64.15 273.1392 [PAYMENT; SCHOOL DISTRICTS.] 64.16 The amounts of conservation tax credits under section 64.17 273.119; disaster or emergency reimbursement under section 64.18 273.123;attached machinery aid under section 273.138; homestead64.19credit under section 273.13market value homestead credits under 64.20 section 273.1384; aids and credits under section 273.1398; 64.21 wetlands reimbursement under section 275.295; enterprise zone 64.22 property credit payments under section 469.171; and metropolitan 64.23 agricultural preserve reduction under section 473H.10 for school 64.24 districts, shall be certified to the department of children, 64.25 families, and learning by the department of revenue. The 64.26 amounts so certified shall be paid according to section 127A.45, 64.27 subdivisions 9 and 13. 64.28 [EFFECTIVE DATE.] This section is effective for aids and 64.29 credits payable in 2002 and thereafter. 64.30 Sec. 34. Minnesota Statutes 2000, section 273.1393, is 64.31 amended to read: 64.32 273.1393 [COMPUTATION OF NET PROPERTY TAXES.] 64.33 Notwithstanding any other provisions to the contrary, "net" 64.34 property taxes are determined by subtracting the credits in the 64.35 order listed from the gross tax: 64.36 (1) disaster credit as provided in section 273.123; 65.1 (2) powerline credit as provided in section 273.42; 65.2 (3) agricultural preserves credit as provided in section 65.3 473H.10; 65.4 (4) enterprise zone credit as provided in section 469.171; 65.5 (5) disparity reduction credit; 65.6 (6) conservation tax credit as provided in section 273.119; 65.7 (7)educationresidential homestead market value credit and 65.8 agricultural market value credit as provided in section273.138265.9 273.1384; 65.10 (8) taconite homestead credit as provided in section 65.11 273.135; and 65.12 (9) supplemental homestead credit as provided in section 65.13 273.1391. 65.14 The combination of all property tax credits must not exceed 65.15 the gross tax amount. 65.16 [EFFECTIVE DATE.] This section is effective for taxes 65.17 payable in 2002 and thereafter. 65.18 Sec. 35. Minnesota Statutes 2000, section 273.1398, 65.19 subdivision 1, is amended to read: 65.20 Subdivision 1. [DEFINITIONS.] (a) In this section, the 65.21 terms defined in this subdivision have the meanings given them. 65.22 (b) "Unique taxing jurisdiction" means the geographic area 65.23 subject to the same set of local tax rates. 65.24 (c) "Previous net tax capacity" means the product of the 65.25 appropriate net class rates for the year previous to the year in 65.26 which the aid is payable, and estimated market values for the 65.27 assessment two years prior to that in which aid is payable. 65.28 "Total previous net tax capacity" means the previous net tax 65.29 capacities for all property within the unique taxing 65.30 jurisdiction. The total previous net tax capacity shall be 65.31 reduced by the sum of (1) the unique taxing jurisdiction's 65.32 previous net tax capacity of commercial-industrial property as 65.33 defined in section 473F.02, subdivision 3, or 276A.01, 65.34 subdivision 3, multiplied by the ratio determined pursuant to 65.35 section 473F.08, subdivision 6, or 276A.06, subdivision 7, for 65.36 the municipality, as defined in section 473F.02, subdivision 8, 66.1 or 276A.01, subdivision 8, in which the unique taxing 66.2 jurisdiction is located, (2) the previous net tax capacity of 66.3 the captured value of tax increment financing districts as 66.4 defined in section 469.177, subdivision 2, and (3) the previous 66.5 net tax capacity of transmission lines deducted from a local 66.6 government's total net tax capacity under section 273.425. 66.7 Previous net tax capacity cannot be less than zero. 66.8 (d) "Equalized market values" are market values that have 66.9 been equalized by dividing the assessor's estimated market value 66.10 for the second year prior to that in which the aid is payable by 66.11 the assessment sales ratios determined by class in the 66.12 assessment sales ratio study conducted by the department of 66.13 revenue pursuant to section 127A.48 in the second year prior to 66.14 that in which the aid is payable. The equalized market values 66.15 shall equal the unequalized market values divided by the 66.16 assessment sales ratio. 66.17 (e) "Equalized school levies" means the amounts levied for: 66.18 (1) general education under section 126C.13, subdivision 2; 66.19 (2) supplemental revenue under section 126C.10, subdivision 66.20 10; 66.21 (3) transition revenue under section 126C.10, subdivision 66.22 20; and 66.23 (4) referendum revenue under section 126C.17. 66.24 (f) "Current local tax rate" means the quotient derived by 66.25 dividing the taxes levied within a unique taxing jurisdiction 66.26 for taxes payable in the year prior to that for which aids are 66.27 being calculated by the total previous net tax capacity of the 66.28 unique taxing jurisdiction. 66.29 (g) For purposes of calculating and allocating homestead 66.30 and agricultural credit aid authorized pursuant to subdivision 2 66.31 and the disparity reduction aid authorized in subdivision 3, 66.32 "gross taxes levied on all properties," "gross taxes," or "taxes 66.33 levied" means the total net tax capacity based taxes levied on 66.34 all properties except that levied on the captured value of tax 66.35 increment districts as defined in section 469.177, subdivision 66.36 2, and that levied on the portion of commercial industrial 67.1 properties' assessed value or gross tax capacity, as defined in 67.2 section 473F.02, subdivision 3, subject to the areawide tax as 67.3 provided in section 473F.08, subdivision 6, in a unique taxing 67.4 jurisdiction. "Gross taxes" are before any reduction for 67.5 disparity reduction aid but "taxes levied" are after any 67.6 reduction for disparity reduction aid. Gross taxes levied or 67.7 taxes levied cannot be less than zero. 67.8 "Taxes levied" excludes equalized school levies. 67.9 (h) "Household adjustment factor" means the number of 67.10 households, for the year most recently determined as ofJuly67.11 June 1 in the aid calculation year, divided by the number of 67.12 households for the year immediately preceding the year for which 67.13 the number of households has most recently been determined as of 67.14JulyJune 1. The household adjustment factor cannot be less 67.15 than one. 67.16 (i) "Growth adjustment factor" means the household 67.17 adjustment factor in the case of counties. In the case of 67.18 cities, towns, school districts, and special taxing districts, 67.19 the growth adjustment factor equals one. The growth adjustment 67.20 factor cannot be less than one. 67.21 (j) "Homestead and agricultural credit base" means the 67.22 previous year's certified homestead and agricultural credit aid 67.23 determined under subdivision 2 less any permanent aid reduction 67.24 in the previous year to homestead and agricultural credit aid. 67.25 (k) "Net tax capacity adjustment" means (1) the tax base 67.26 differential defined in subdivision 1a, multiplied by (2) the 67.27 unique taxing jurisdiction's current local tax rate. The net 67.28 tax capacity adjustment cannot be less than zero. 67.29 (l) "Fiscal disparity adjustment" means a taxing 67.30 jurisdiction's fiscal disparity distribution levy under section 67.31 473F.08, subdivision 3, clause (a), or 276A.06, subdivision 3, 67.32 clause (a), for taxes payable in the year prior to that for 67.33 which aids are being calculated, multiplied by the ratio of the 67.34 tax base differential percent referenced in subdivision 1a for 67.35 the highest class rate for class 3 property for taxes payable in 67.36 the year prior to that for which aids are being calculated to 68.1 the highest class rate for class 3 property for taxes payable in 68.2 the second prior year to that for which aids are being 68.3 calculated. In the case of school districts, the fiscal 68.4 disparity distribution levy shall exclude that part of the levy 68.5 attributable to equalized school levies. 68.6 [EFFECTIVE DATE.] This section is effective the day 68.7 following final enactment. 68.8 Sec. 36. Minnesota Statutes 2000, section 273.1398, is 68.9 amended by adding a subdivision to read: 68.10 Subd. 4b. [CREDIT AID CHANGES.] (a) For aid payable in 68.11 2002, each county shall have its aid under subdivision 2, after 68.12 adjustment under subdivision 4a, permanently reduced. The 68.13 amount of the reduction for each county is the sum of the 68.14 following amounts: 68.15 (1) for counties in the first through fourth, sixth, and 68.16 tenth judicial districts, the estimated costs submitted by the 68.17 court administrators for the calendar year 2001 budget requests 68.18 of such counties for guardians ad litem, court interpreters, 68.19 Rule 20 and civil commitment examinations and hearings, and in 68.20 forma pauperis costs, as confirmed and reported by the Minnesota 68.21 Supreme Court to the commissioner of revenue on or before July 68.22 1, 2001; 68.23 (2) the 1999 nonfederal expenditures for child family 68.24 foster care as reported by the county during calendar year 2000 68.25 to the department of human services under section 256E.08, 68.26 subdivision 8; and 68.27 (3) the additional amount of aid the county receives in 68.28 2002 under section 477A.03, subdivision 2, paragraph (c), clause 68.29 (ii), excluding increases due to inflation. 68.30 (b) For aid payable in 2002 and thereafter, no aid shall be 68.31 computed or paid pursuant to subdivision 2 for statutory or home 68.32 rule cities, towns, school districts, and special taxing 68.33 districts. 68.34 [EFFECTIVE DATE.] This section is effective for aid payable 68.35 in 2002 and thereafter. 68.36 Sec. 37. Minnesota Statutes 2000, section 273.1398, 69.1 subdivision 8, is amended to read: 69.2 Subd. 8. [APPROPRIATION.] (a) An amount sufficient to pay 69.3 the aids and credits provided under this section for school 69.4 districts, intermediate school districts, or any group of school 69.5 districts levying as a single taxing entity, is annually 69.6 appropriated from the general fund to the commissioner of 69.7 children, families, and learning. An amount sufficient to pay 69.8 the aids and credits provided under this section for counties, 69.9 cities, towns, and special taxing districts is annually 69.10 appropriated from the general fund to the commissioner of 69.11 revenue. A jurisdiction's aid amount may be increased or 69.12 decreased based on any prior year adjustments for homestead 69.13 credit or other property tax credit or aid programs. 69.14 (b) The commissioner of finance shall bill the commissioner 69.15 of revenue for the cost of preparation of local impact notes as 69.16 required by section 3.987 only to the extent to which those 69.17 costs exceed those costs incurred in fiscal year 1997 and for 69.18 any other new costs attributable to the local impact note 69.19 function required by section 3.987, not to exceed $100,000 in 69.20 fiscal years 1998 and 1999 and $200,000 in fiscal year 2000 and 69.21 thereafter. 69.22 The commissioner of revenue shall deduct the amount billed 69.23 under this paragraph from aid payments to be made tocities and69.24 counties under subdivision 2 on a pro rata basis. The amount 69.25 deducted under this paragraph is appropriated to the 69.26 commissioner of finance for the preparation of local impact 69.27 notes. 69.28 [EFFECTIVE DATE.] This section is effective January 1, 69.29 2002, and thereafter. 69.30 Sec. 38. Minnesota Statutes 2000, section 273.166, 69.31 subdivision 2, is amended to read: 69.32 Subd. 2. [MANUFACTURED HOME HOMESTEAD AND AGRICULTURAL 69.33 CREDIT AID.]ForIn calendar year 2002, and each calendar year 69.34 thereafter,themanufactured home homestead and agricultural 69.35 credit aidfor each taxing jurisdiction equals the taxing69.36jurisdiction'sshall be paid to each county under this section 70.1 in an amount equal to the county's manufactured home homestead 70.2 and agricultural credit aid determined under this subdivision 70.3 for the preceding aid payable year times the growth adjustment 70.4 factor for thejurisdiction plus the net tax capacity adjustment70.5for the jurisdictioncounty. Payment will not be made to 70.6 anytaxing jurisdictioncounty that has ceased to levy a 70.7 property tax. 70.8 [EFFECTIVE DATE.] This section is effective for aid paid in 70.9 2002 and thereafter. 70.10 Sec. 39. Minnesota Statutes 2000, section 273.166, 70.11 subdivision 3, is amended to read: 70.12 Subd. 3. [AID CALCULATION.] The commissioner of revenue 70.13 shall make the calculation required in subdivision 2 and 70.14 annually pay manufactured home homestead and agricultural credit 70.15 aid tothe local governmentscounties at the times provided in 70.16 section 473H.10 for local governments other than school 70.17 districts.Aid payments to the school districts must be70.18certified to the commissioner of children, families, and70.19learning and paid under section 273.1392.70.20 [EFFECTIVE DATE.] This section is effective for aid paid in 70.21 2002 and thereafter. 70.22 Sec. 40. Minnesota Statutes 2000, section 273.166, 70.23 subdivision 5, is amended to read: 70.24 Subd. 5. [APPROPRIATION.]There is annually appropriated70.25from the general fund to the commissioner of children, families,70.26and learning a sum sufficient to pay the aids provided under70.27this section for school districts, intermediate school70.28districts, or any group of school districts levying as a single70.29taxing entity.There is annually appropriated from the general 70.30 fund to the commissioner of revenue a sum sufficient to pay the 70.31 aids provided under this section to counties, cities, towns, and70.32special taxing districts. 70.33 [EFFECTIVE DATE.] This section is effective for fiscal year 70.34 2003 and thereafter. 70.35 Sec. 41. Minnesota Statutes 2000, section 273.42, is 70.36 amended by adding a subdivision to read: 71.1 Subd. 3. [STATE TAX ON TRANSMISSION AND DISTRIBUTION 71.2 LINES.] Notwithstanding section 273.425, the entire assessed 71.3 value of property taxed at the average local tax rate under 71.4 subdivision 1 is subject to the state tax rate provided in 71.5 section 275.02. Notwithstanding subdivisions 1 and 2, the 71.6 entire proceeds of the state tax levy for each such property 71.7 must be distributed to the state under the procedures provided 71.8 in chapter 276. No portion of the proceeds from the state levy 71.9 on such property is distributed within the county under 71.10 subdivision 1 or 2. 71.11 [EFFECTIVE DATE.] This section is effective for taxes 71.12 payable in 2002 and thereafter. 71.13 Sec. 42. Minnesota Statutes 2000, section 274.01, 71.14 subdivision 1, is amended to read: 71.15 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 71.16 GRIEVANCES.] (a) The town board of a town, or the council or 71.17 other governing body of a city, is the board ofreviewappeal 71.18 and equalization except (1) in cities whose charters provide for 71.19 a board of equalization or (2) in any city or town that has 71.20 transferred its local board of review power and duties to the 71.21 county board as provided in subdivision 3. The county assessor 71.22 shall fix a day and time when the board or the board of 71.23 equalization shall meet in the assessment districts of the 71.24 county. Notwithstanding any law or city charter to the 71.25 contrary, a city board of equalization shall be referred to as a 71.26 board of appeal and equalization. On or before February 15 of 71.27 each year the assessor shall give written notice of the time to 71.28 the city or town clerk. Notwithstanding the provisions of any 71.29 charter to the contrary, the meetings must be held between April 71.30 1 and May 31 each year. The clerk shall give published and 71.31 posted notice of the meeting at least ten days before the date 71.32 of the meeting. 71.33If in any county, at least 25 percent of the total net tax71.34capacity of a city or town is noncommercial seasonal residential71.35recreational property classified under section 273.13,71.36subdivision 25, the county must hold two countywide72.1informational meetings on Saturdays. The meetings will allow72.2noncommercial seasonal residential recreational taxpayers to72.3discuss their property valuation with the appropriate assessment72.4staff. These Saturday informational meetings must be scheduled72.5to allow the owner of the noncommercial seasonal residential72.6recreational property the opportunity to attend one of the72.7meetings prior to the scheduled board of review for their city72.8or town. The Saturday meeting dates must be contained on the72.9notice of valuation of real property under section 273.121.72.10 The board shall meet at the office of the clerk to review 72.11 the assessment and classification of property in the town or 72.12 city. No changes in valuation or classification which are 72.13 intended to correct errors in judgment by the county assessor 72.14 may be made by the county assessor after the boardof reviewhas 72.15 adjourned in those cities or towns that hold a local board of 72.16 review; however, corrections of errors that are merely clerical 72.17 in nature or changes that extend homestead treatment to property 72.18 are permitted after adjournment until the tax extension date for 72.19 that assessment year. The changes must be fully documented and 72.20 maintained in the assessor's office and must be available for 72.21 review by any person. A copy of the changes made during this 72.22 period in those cities or towns that hold a local board of 72.23 review must be sent to the county board no later than December 72.24 31 of the assessment year. 72.25 (b) The board shall determine whether the taxable property 72.26 in the town or city has been properly placed on the list and 72.27 properly valued by the assessor. If real or personal property 72.28 has been omitted, the board shall place it on the list with its 72.29 market value, and correct the assessment so that each tract or 72.30 lot of real property, and each article, parcel, or class of 72.31 personal property, is entered on the assessment list at its 72.32 market value. No assessment of the property of any person may 72.33 be raised unless the person has been duly notified of the intent 72.34 of the board to do so. On application of any person feeling 72.35 aggrieved, the board shall review the assessment or 72.36 classification, or both, and correct it as appears just. The 73.1 board may not make an individual market value adjustment or 73.2 classification change that would benefit the property in cases 73.3 where the owner or other person having control over the property 73.4 will not permit the assessor to inspect the property and the 73.5 interior of any buildings or structures. 73.6 (c) A local boardof reviewmay reduce assessments upon 73.7 petition of the taxpayer but the total reductions must not 73.8 reduce the aggregate assessment made by the county assessor by 73.9 more than one percent. If the total reductions would lower the 73.10 aggregate assessments made by the county assessor by more than 73.11 one percent, none of the adjustments may be made. The assessor 73.12 shall correct any clerical errors or double assessments 73.13 discovered by the boardof reviewwithout regard to the one 73.14 percent limitation. 73.15 (d) A majority of the members may act at the meeting, and 73.16 adjourn from day to day until they finish hearing the cases 73.17 presented. The assessor shall attend, with the assessment books 73.18 and papers, and take part in the proceedings, but must not 73.19 vote. The county assessor, or an assistant delegated by the 73.20 county assessor shall attend the meetings. The board shall list 73.21 separately, on a form appended to the assessment book, all 73.22 omitted property added to the list by the board and all items of 73.23 property increased or decreased, with the market value of each 73.24 item of property, added or changed by the board, placed opposite 73.25 the item. The county assessor shall enter all changes made by 73.26 the board in the assessment book. 73.27 (e) Except as provided in subdivision 3, if a person fails 73.28 to appear in person, by counsel, or by written communication 73.29 before the board after being duly notified of the board's intent 73.30 to raise the assessment of the property, or if a person feeling 73.31 aggrieved by an assessment or classification fails to apply for 73.32 a review of the assessment or classification, the person may not 73.33 appear before the county board of appeal and equalization for a 73.34 review of the assessment or classification. This paragraph does 73.35 not apply if an assessment was made after the local board 73.36 meeting, as provided in section 273.01, or if the person can 74.1 establish not having received notice of market value at least 74.2 five days before the local boardof reviewmeeting. 74.3 (f) The local boardof review or the board of equalization74.4 must complete its work and adjourn within 20 days from the time 74.5 of convening stated in the notice of the clerk, unless a longer 74.6 period is approved by the commissioner of revenue. No action 74.7 taken after that date is valid. All complaints about an 74.8 assessment or classification made after the meeting of the board 74.9 must be heard and determined by the county board of 74.10 equalization. A nonresident may, at any time, before the 74.11 meeting of the boardof reviewfile written objections to an 74.12 assessment or classification with the county assessor. The 74.13 objections must be presented to the boardof reviewat its 74.14 meeting by the county assessor for its consideration. 74.15 [EFFECTIVE DATE.] This section is effective January 1, 74.16 2002, and thereafter. 74.17 Sec. 43. Minnesota Statutes 2000, section 274.13, 74.18 subdivision 1, is amended to read: 74.19 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 74.20 ASSESSMENTS.] The county commissioners, or a majority of them, 74.21 with the county auditor, or, if the auditor cannot be present, 74.22 the deputy county auditor, or, if there is no deputy, the court 74.23 administrator of the district court, shall form a board for the 74.24 equalization of the assessment of the property of the county, 74.25 including the property of all cities whose charters provide for 74.26 a board of equalization. This board shall be referred to as the 74.27 county board of appeal and equalization. The board shall meet 74.28 annually, on the date specified in section 274.14, at the office 74.29 of the auditor. Each member shall take an oath to fairly and 74.30 impartially perform duties as a member. The board shall examine 74.31 and compare the returns of the assessment of property of the 74.32 towns or districts, and equalize them so that each tract or lot 74.33 of real property and each article or class of personal property 74.34 is entered on the assessment list at its market value, subject 74.35 to the following rules: 74.36 (1) The board shall raise the valuation of each tract or 75.1 lot of real property which in its opinion is returned below its 75.2 market value to the sum believed to be its market value. The 75.3 board must first give notice of intention to raise the valuation 75.4 to the person in whose name it is assessed, if the person is a 75.5 resident of the county. The notice must fix a time and place 75.6 for a hearing. 75.7 (2) The board shall reduce the valuation of each tract or 75.8 lot which in its opinion is returned above its market value to 75.9 the sum believed to be its market value. 75.10 (3) The board shall raise the valuation of each class of 75.11 personal property which in its opinion is returned below its 75.12 market value to the sum believed to be its market value. It 75.13 shall raise the aggregate value of the personal property of 75.14 individuals, firms, or corporations, when it believes that the 75.15 aggregate valuation, as returned, is less than the market value 75.16 of the taxable personal property possessed by the individuals, 75.17 firms, or corporations, to the sum it believes to be the market 75.18 value. The board must first give notice to the persons of 75.19 intention to do so. The notice must set a time and place for a 75.20 hearing. 75.21 (4) The board shall reduce the valuation of each class of 75.22 personal property that is returned above its market value to the 75.23 sum it believes to be its market value. Upon complaint of a 75.24 party aggrieved, the board shall reduce the aggregate valuation 75.25 of the individual's personal property, or of any class of 75.26 personal property for which the individual is assessed, which in 75.27 its opinion has been assessed at too large a sum, to the sum it 75.28 believes was the market value of the individual's personal 75.29 property of that class. 75.30 (5) The board must not reduce the aggregate value of all 75.31 the property of its county, as submitted to the county board of 75.32 equalization, with the additions made by the auditor under this 75.33 chapter, by more than one percent of its whole valuation. The 75.34 board may raise the aggregate valuation of real property, and of 75.35 each class of personal property, of the county, or of any town 75.36 or district of the county, when it believes it is below the 76.1 market value of the property, or class of property, to the 76.2 aggregate amount it believes to be its market value. 76.3 (6) The board shall change the classification of any 76.4 property which in its opinion is not properly classified. 76.5 [EFFECTIVE DATE.] This section is effective January 1, 76.6 2002, and thereafter. 76.7 Sec. 44. Minnesota Statutes 2000, section 275.011, is 76.8 amended by adding a subdivision to read: 76.9 Subd. 4. [CONVERSION OF NET TAX CAPACITY RATE LEVY LIMIT.] 76.10 (a) Except as provided in section 126C.02, for purposes of 76.11 determining the mill rate limits applicable to a levy authority 76.12 or limitation expressed in law as a net tax capacity rate limit, 76.13 the commissioner of revenue shall prescribe the conversion 76.14 factors and methodology for use by all county auditors. 76.15 (b) If the conversion from net tax capacities to assessed 76.16 values or from net tax capacity tax rates to mill rates, as 76.17 provided in this article, causes a provision of law related to 76.18 the administration of the property tax to be unadministrable, 76.19 the commissioner of revenue may prescribe an adjustment or 76.20 conversion factor or method to preserve the purpose of that law. 76.21 (c) The prescription of a conversion or adjustment factor 76.22 or method by the commissioner of revenue under this subdivision 76.23 shall not be considered a "rule" and is not subject to the 76.24 Administrative Procedure Act. 76.25 [EFFECTIVE DATE.] This section is effective for taxes 76.26 payable in 2002 and thereafter. 76.27 Sec. 45. Minnesota Statutes 2000, section 275.02, is 76.28 amended to read: 76.29 275.02 [STATE LEVY, EXCEPTIONS; CERTIFICATION OF TAX RATE.] 76.30The(a) For taxes payable in 2002 and subsequent years, a 76.31 state tax shall be levied on all class 3, other than attached 76.32 machinery located at an electric generating station that is part 76.33 of an electric generating system, class 4c(1), class 4c(2), and 76.34 class 5(1) taxable property in the state as defined in section 76.35 273.13. For noncommercial class 4c(1) property, 50 percent of 76.36 the assessed value of the property, up to a maximum of $20,000, 77.1 is exempt from the state levy. The rate of the tax shall be 77.2 certified by thestate auditorcommissioner of revenue to each 77.3 county auditor on or before November151 annually. 77.4 For taxes payable in 2002, the commissioner shall compute 77.5 and certify a tax rate necessary to raise $470,400,000. For 77.6 taxes payable in years after 2002, the amount to be raised is 77.7 increased each year by multiplying the amount for the prior year 77.8 by the sum of one plus the rate of increase, if any, in the 77.9 implicit price deflator for government consumption expenditures 77.10 and gross investment for state and local governments prepared by 77.11 the Bureau of Economic Analysts of the United States Department 77.12 of Commerce for the 12-month period ending March 31 of the year 77.13 prior to the year the taxes are payable. It shall take a 77.14 two-thirds vote of the legislature to increase the state tax 77.15 levy by a greater amount. 77.16 (b) The state levy under paragraph (a) is in addition to 77.17 any state levy certified by the state auditor under article XI 77.18 of the Minnesota Constitution. A levy certified by the state 77.19 auditor under article XI shall be certified by the state auditor 77.20 to each county auditor by November 1 for taxes payable in the 77.21 following year, and shall be applied against the assessed value 77.22 of all taxable property in the state. 77.23 [EFFECTIVE DATE.] This section is effective for taxes 77.24 payable in 2002 and thereafter. 77.25 Sec. 46. Minnesota Statutes 2000, section 275.065, 77.26 subdivision 3, is amended to read: 77.27 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 77.28 county auditor shall prepare and the county treasurer shall 77.29 deliver after November 10 and on or before November 24 each 77.30 year, by first class mail to each taxpayer at the address listed 77.31 on the county's current year's assessment roll, a notice of 77.32 proposed property taxes. 77.33 (b) The commissioner of revenue shall prescribe the form of 77.34 the notice. 77.35 (c) The notice must inform taxpayers that it contains the 77.36 amount of property taxes each taxing authority proposes to 78.1 collect for taxes payable the following year. In the case of a 78.2 town,or in the case of the state determined portion of the78.3school district levy,the final tax amount will be its proposed 78.4 tax. In the case of taxing authorities required to hold a 78.5 public meeting under subdivision 6, the notice must clearly 78.6 state that each taxing authority, including regional library 78.7 districts established under section 134.201, and including the 78.8 metropolitan taxing districts as defined in paragraph (i), but 78.9 excluding all other special taxing districts and towns, will 78.10 hold a public meeting to receive public testimony on the 78.11 proposed budget and proposed or final property tax levy, or, in 78.12 case of a school district, on the current budget and proposed 78.13 property tax levy. It must clearly state the time and place of 78.14 each taxing authority's meeting, a phone number for the taxing 78.15 jurisdiction where taxpayers may call if they have questions 78.16 related to the notice, and an address where comments will be 78.17 received by mail. 78.18 (d) The notice must state for each parcel: 78.19 (1) the market value of the property as determined under 78.20 section 273.11, and used for computing property taxes payable in 78.21 the following year and for taxes payable in the current year as 78.22 each appears in the records of the county assessor on November 1 78.23 of the current year; and, in the case of residential property, 78.24 whether the property is classified as homestead or 78.25 nonhomestead. The notice must clearly inform taxpayers of the 78.26 years to which the market values apply and that the values are 78.27 final values; 78.28 (2) the items listed below, shown separately by county, 78.29 city or town, statedetermined schooltaxnet of the education78.30homestead creditunder section273.1382275.02, voter approved 78.31 school levy, other local school levy, and the sum of the special 78.32 taxing districts, and as a total of all taxing authorities: 78.33 (i) the actual tax for taxes payable in the current 78.34 year; and 78.35 (ii)the tax change due to spending factors, defined as the78.36proposed tax minus the constant spending tax amount;79.1(iii) the tax change due to other factors, defined as the79.2constant spending tax amount minus the actual current year tax;79.3and79.4(iv)the proposed tax amount net of credits. 79.5 In the case of a town or the statedetermined schooltax, 79.6 the final tax shall also be its proposed tax unless the town 79.7 changes its levy at a special town meeting under section 79.8 365.52. If a school district has certified under section 79.9 126C.17, subdivision 9, that a referendum will be held in the 79.10 school district at the November general election, the county 79.11 auditor must note next to the school district's proposed amount 79.12 that a referendum is pending and that, if approved by the 79.13 voters, the tax amount may be higher than shown on the notice. 79.14 In the case of the city of Minneapolis, the levy for the 79.15 Minneapolis library board and the levy for Minneapolis park and 79.16 recreation shall be listed separately from the remaining amount 79.17 of the city's levy. In the case of a parcel where tax increment 79.18 or the fiscal disparities areawide tax under chapter 276A or 79.19 473F applies, the proposed tax levy on the captured value or the 79.20 proposed tax levy on the tax capacity subject to the areawide 79.21 tax must each be stated separately and not included in the sum 79.22 of the special taxing districts; and 79.23 (3) the increase or decrease between the total taxes 79.24 payable in the current year and the total proposed taxes, 79.25 expressed as a percentage. 79.26 For purposes of this section, the amount of the tax on 79.27 homesteads qualifying under the senior citizens' property tax 79.28 deferral program under chapter 290B is the total amount of 79.29 property tax before subtraction of the deferred property tax 79.30 amount. 79.31 (e) The notice must clearly state that the proposed or 79.32 final taxes do not include the following: 79.33 (1) special assessments; 79.34 (2) levies approved by the voters after the date the 79.35 proposed taxes are certified, including bond referenda, school 79.36 district levy referenda, and levy limit increase referenda; 80.1 (3) amounts necessary to pay cleanup or other costs due to 80.2 a natural disaster occurring after the date the proposed taxes 80.3 are certified; 80.4 (4) amounts necessary to pay tort judgments against the 80.5 taxing authority that become final after the date the proposed 80.6 taxes are certified; and 80.7 (5) the contamination tax imposed on properties which 80.8 received market value reductions for contamination. 80.9 (f) Except as provided in subdivision 7, failure of the 80.10 county auditor to prepare or the county treasurer to deliver the 80.11 notice as required in this section does not invalidate the 80.12 proposed or final tax levy or the taxes payable pursuant to the 80.13 tax levy. 80.14 (g) If the notice the taxpayer receives under this section 80.15 lists the property as nonhomestead, and satisfactory 80.16 documentation is provided to the county assessor by the 80.17 applicable deadline, and the property qualifies for the 80.18 homestead classification in that assessment year, the assessor 80.19 shall reclassify the property to homestead for taxes payable in 80.20 the following year. 80.21 (h) In the case of class 4 residential property used as a 80.22 residence for lease or rental periods of 30 days or more, the 80.23 taxpayer must either: 80.24 (1) mail or deliver a copy of the notice of proposed 80.25 property taxes to each tenant, renter, or lessee; or 80.26 (2) post a copy of the notice in a conspicuous place on the 80.27 premises of the property. 80.28 The notice must be mailed or posted by the taxpayer by 80.29 November 27 or within three days of receipt of the notice, 80.30 whichever is later. A taxpayer may notify the county treasurer 80.31 of the address of the taxpayer, agent, caretaker, or manager of 80.32 the premises to which the notice must be mailed in order to 80.33 fulfill the requirements of this paragraph. 80.34 (i) For purposes of this subdivision, subdivisions 5a and 80.35 6, "metropolitan special taxing districts" means the following 80.36 taxing districts in the seven-county metropolitan area that levy 81.1 a property tax for any of the specified purposes listed below: 81.2 (1) metropolitan council under section 473.132, 473.167, 81.3 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 81.4 (2) metropolitan airports commission under section 473.667, 81.5 473.671, or 473.672; and 81.6 (3) metropolitan mosquito control commission under section 81.7 473.711. 81.8 For purposes of this section, any levies made by the 81.9 regional rail authorities in the county of Anoka, Carver, 81.10 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 81.11 398A shall be included with the appropriate county's levy and 81.12 shall be discussed at that county's public hearing. 81.13 (j) If a statutory or home rule charter city or a town has 81.14 exercised the local levy option provided by section 473.388, 81.15 subdivision 7, it may include in the notice of its proposed 81.16 taxes the amount of its proposed taxes attributable to its 81.17 exercise of the option. In the first year of the city or town's 81.18 exercise of this option, the statement shall include an estimate 81.19 of the reduction of the metropolitan council's tax on the parcel 81.20 due to exercise of that option. The metropolitan council's levy 81.21 shall be adjusted accordingly. 81.22 [EFFECTIVE DATE.] This section is effective for notices of 81.23 proposed property taxes required in 2001 for taxes payable in 81.24 2002, and thereafter. 81.25 Sec. 47. Minnesota Statutes 2000, section 275.065, 81.26 subdivision 5a, is amended to read: 81.27 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 81.28 population of more than 2,500, county, a metropolitan special 81.29 taxing district as defined in subdivision 3, paragraph (i), a 81.30 regional library district established under section 134.201, or 81.31 school district shall advertise in a newspaper a notice of its 81.32 intent to adopt a budget and property tax levy or, in the case 81.33 of a school district, to review its current budget and proposed 81.34 property taxes payable in the following year, at a public 81.35 hearing, if a public hearing is required under subdivision 6. 81.36 The notice must be published not less than two business days nor 82.1 more than six business days before the hearing. 82.2 The advertisement must be at least one-eighth page in size 82.3 of a standard-size or a tabloid-size newspaper. The 82.4 advertisement must not be placed in the part of the newspaper 82.5 where legal notices and classified advertisements appear. The 82.6 advertisement must be published in an official newspaper of 82.7 general circulation in the taxing authority. The newspaper 82.8 selected must be one of general interest and readership in the 82.9 community, and not one of limited subject matter. The 82.10 advertisement must appear in a newspaper that is published at 82.11 least once per week. 82.12 For purposes of this section, the metropolitan special 82.13 taxing district's advertisement must only be published in the 82.14 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 82.15 (b) The advertisement for school districts, metropolitan 82.16 special taxing districts, and regional library districts must be 82.17 in the following form, except that the notice for a school 82.18 district may include references to the current budget in regard 82.19 to proposed property taxes. 82.20 "NOTICE OF 82.21 PROPOSED PROPERTY TAXES 82.22 (School District/Metropolitan 82.23 Special Taxing District/Regional 82.24 Library District) of ......... 82.25 The governing body of ........ will soon hold budget hearings 82.26 and vote on the property taxes for (metropolitan special taxing 82.27 district/regional library district services that will be 82.28 provided in (year)/school district services that will be 82.29 provided in (year) and (year)). 82.30 NOTICE OF PUBLIC HEARING: 82.31 All concerned citizens are invited to attend a public hearing 82.32 and express their opinions on the proposed (school 82.33 district/metropolitan special taxing district/regional library 82.34 district) budget and property taxes, or in the case of a school 82.35 district, its current budget and proposed property taxes, 82.36 payable in the following year. The hearing will be held on 83.1 (Month/Day/Year) at (Time) at (Location, Address)." 83.2 (c) The advertisement for cities and counties must be in 83.3 the following form. 83.4 "NOTICE OF PROPOSED 83.5 TOTAL BUDGET AND PROPERTY TAXES 83.6 The (city/county) governing body or board of commissioners will 83.7 hold a public hearing to discuss the budget and to vote on the 83.8 amount of property taxes to collect for services the 83.9 (city/county) will provide in (year). 83.10 83.11 SPENDING: The total budget amounts below compare 83.12 (city's/county's) (year) total actual budget with the amount the 83.13 (city/county) proposes to spend in (year). 83.14 83.15 (Year) Total Proposed (Year) Change from 83.16 Actual Budget Budget (Year)-(Year) 83.17 83.18 $....... $....... ...% 83.19 83.20 TAXES: The property tax amounts below compare that portion of 83.21 the current budget levied in property taxes in (city/county) for 83.22 (year) with the property taxes the (city/county) proposes to 83.23 collect in (year). 83.24 83.25 (Year) Property Proposed (Year) Change from 83.26 Taxes Property Taxes (Year)-(Year) 83.27 83.28 $....... $....... ...% 83.29 83.30 ATTEND THE PUBLIC HEARING 83.31 All (city/county) residents are invited to attend the public 83.32 hearing of the (city/county) to express your opinions on the 83.33 budget and the proposed amount of (year) property taxes. The 83.34 hearing will be held on: 83.35 (Month/Day/Year/Time) 83.36 (Location/Address) 84.1 If the discussion of the budget cannot be completed, a time and 84.2 place for continuing the discussion will be announced at the 84.3 hearing. You are also invited to send your written comments to: 84.4 (City/County) 84.5 (Location/Address)" 84.6 (d) For purposes of this subdivision, the budget amounts 84.7 listed on the advertisement mean: 84.8 (1) for cities, the total government fund expenditures, as 84.9 defined by the state auditor under section 471.6965, less any 84.10 expenditures for improvements or services that are specially 84.11 assessed or charged under chapter 429, 430, 435, or the 84.12 provisions of any other law or charter; and 84.13 (2) for counties, the total government fund expenditures, 84.14 as defined by the state auditor under section 375.169, less any 84.15 expenditures for direct payments to recipients or providers for 84.16 the human service aids listed below: 84.17 (i) Minnesota family investment program under chapters 256J 84.18 and 256K; 84.19 (ii) medical assistance under sections 256B.041, 84.20 subdivision 5, and 256B.19, subdivision 1; 84.21 (iii) general assistance medical care under section 84.22 256D.03, subdivision 6; 84.23 (iv) general assistance under section 256D.03, subdivision 84.24 2; 84.25 (v) emergency assistance under section 256J.48; 84.26 (vi) Minnesota supplemental aid under section 256D.36, 84.27 subdivision 1; 84.28 (vii) preadmission screening under section 256B.0911, and 84.29 alternative care grants under section 256B.0913; 84.30 (viii) general assistance medical care claims processing, 84.31 medical transportation and related costs under section 256D.03, 84.32 subdivision 4; 84.33 (ix) medical transportation and related costs under section 84.34 256B.0625, subdivisions 17 to 18a; 84.35 (x) group residential housing under section 256I.05, 84.36 subdivision 8, transferred from programs in clauses (iv) and 85.1 (vi); or 85.2 (xi) any successor programs to those listed in clauses (i) 85.3 to (x). 85.4 (e) A city with a population of over 500 but not more than 85.5 2,500 that is required to hold a public hearing under 85.6 subdivision 6 must advertise by posted notice as defined in 85.7 section 645.12, subdivision 1. The advertisement must be posted 85.8 at the time provided in paragraph (a). It must be in the form 85.9 required in paragraph (b). 85.10 (f) For purposes of this subdivision, the population of a 85.11 city is the most recent population as determined by the state 85.12 demographer under section 4A.02. 85.13 (g) The commissioner of revenue, subject to the approval of 85.14 the chairs of the house and senate tax committees, shall 85.15 prescribe the form and format of theadvertisement85.16 advertisements required under this subdivision. 85.17 [EFFECTIVE DATE.] This section is effective for public 85.18 advertisements required in 2001 for taxes payable in 2002, and 85.19 thereafter. 85.20 Sec. 48. Minnesota Statutes 2000, section 275.065, 85.21 subdivision 6, is amended to read: 85.22 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 85.23 (a) For purposes of this section, the following terms shall have 85.24 the meanings given: 85.25 (1) "Initial hearing" means the first and primary hearing 85.26 held to discuss the taxing authority's proposed budget and 85.27 proposed property tax levy for taxes payable in the following 85.28 year, or, for school districts, the current budget and the 85.29 proposed property tax levy for taxes payable in the following 85.30 year. 85.31 (2) "Continuation hearing" means a hearing held to complete 85.32 the initial hearing, if the initial hearing is not completed on 85.33 its scheduled date. 85.34 (3) "Subsequent hearing" means the hearing held to adopt 85.35 the taxing authority's final property tax levy, and, in the case 85.36 of taxing authorities other than school districts, the final 86.1 budget, for taxes payable in the following year. 86.2 (b) Between November 29 and December 20, the governing 86.3 bodies of a city that has a population over 500, county, 86.4 metropolitan special taxing districts as defined in subdivision 86.5 3, paragraph (i), and regional library districts shall each hold 86.6 an initial public hearing to discuss and seek public comment on 86.7 its final budget and property tax levy for taxes payable in the 86.8 following year, and the governing body of the school district 86.9 shall hold an initial public hearing to review its current 86.10 budget and proposed property tax levy for taxes payable in the 86.11 following year. The metropolitan special taxing districts shall 86.12 be required to hold only a single joint initial public hearing, 86.13 the location of which will be determined by the affected 86.14 metropolitan agencies. A city, county, metropolitan special 86.15 taxing district as defined in subdivision 3, paragraph (i), 86.16 regional library district established under section 134.201, or 86.17 school district is not required to hold a public hearing under 86.18 this subdivision unless its proposed property tax levy for taxes 86.19 payable in the following year, as certified under subdivision 1, 86.20 has increased over its final property tax levy for taxes payable 86.21 in the current year by a percentage that is greater than the 86.22 percentage increase in the implicit price deflator for 86.23 government consumption expenditures and gross investment for 86.24 state and local governments prepared by the Bureau of Economic 86.25 Analysts of the United States Department of Commerce for the 86.26 12-month period ending March 31 of the current year. 86.27 (c) The initial hearing must be held after 5:00 p.m. if 86.28 scheduled on a day other than Saturday. No initial hearing may 86.29 be held on a Sunday. 86.30 (d) At the initial hearing under this subdivision, the 86.31 percentage increase in property taxes proposed by the taxing 86.32 authority, if any, and the specific purposes for which property 86.33 tax revenues are being increased must be discussed. During the 86.34 discussion, the governing body shall hear comments regarding a 86.35 proposed increase and explain the reasons for the proposed 86.36 increase. The public shall be allowed to speak and to ask 87.1 questions. At the public hearing, the school district must also 87.2 provide and discuss information on the distribution of its 87.3 revenues by revenue source, and the distribution of its spending 87.4 by program area. 87.5 (e) If the initial hearing is not completed on its 87.6 scheduled date, the taxing authority must announce, prior to 87.7 adjournment of the hearing, the date, time, and place for the 87.8 continuation of the hearing. The continuation hearing must be 87.9 held at least five business days but no more than 14 business 87.10 days after the initial hearing. A continuation hearing may not 87.11 be held later than December 20 except as provided in paragraphs 87.12 (f) and (g). A continuation hearing must be held after 5:00 87.13 p.m. if scheduled on a day other than Saturday. No continuation 87.14 hearing may be held on a Sunday. 87.15 (f) The governing body of a county shall hold its initial 87.16 hearing on the first Thursday in December each year, and may 87.17 hold additional initial hearings on other dates before December 87.18 20 if necessary for the convenience of county residents. If the 87.19 county needs a continuation of its hearing, the continuation 87.20 hearing shall be held on the third Tuesday in December. If the 87.21 third Tuesday in December falls on December 21, the county's 87.22 continuation hearing shall be held on Monday, December 20. 87.23 (g) The metropolitan special taxing districts shall hold a 87.24 joint initial public hearing on the first Wednesday of 87.25 December. A continuation hearing, if necessary, shall be held 87.26 on the second Wednesday of December even if that second 87.27 Wednesday is after December 10. 87.28 (h) The county auditor shall provide for the coordination 87.29 of initial and continuation hearing dates for all school 87.30 districts and cities within the county to prevent conflicts 87.31 under clauses (i) and (j). 87.32 (i) By August 10, each school board and the board of the 87.33 regional library district shall certify to the county auditors 87.34 of the counties in which the school district or regional library 87.35 district is located the dates on which it elects to hold its 87.36 initial hearing and any continuation hearing. If a school board 88.1 or regional library district does not certify these dates by 88.2 August 10, the auditor will assign the initial and continuation 88.3 hearing dates. The dates elected or assigned must not conflict 88.4 with the initial and continuation hearing dates of the county or 88.5 the metropolitan special taxing districts. 88.6 (j) By August 20, the county auditor shall notify the 88.7 clerks of the cities within the county of the dates on which 88.8 school districts and regional library districts have elected to 88.9 hold their initial and continuation hearings. At the time a 88.10 city certifies its proposed levy under subdivision 1 it shall 88.11 certify the dates on which it elects to hold its initial hearing 88.12 and any continuation hearing. Until September 15, the first and 88.13 second Mondays of December are reserved for the use of the 88.14 cities. If a city does not certify its hearing dates by 88.15 September 15, the auditor shall assign the initial and 88.16 continuation hearing dates. The dates elected or assigned for 88.17 the initial hearing must not conflict with the initial hearing 88.18 dates of the county, metropolitan special taxing districts, 88.19 regional library districts, or school districts within which the 88.20 city is located. To the extent possible, the dates of the 88.21 city's continuation hearing should not conflict with the 88.22 continuation hearing dates of the county, metropolitan special 88.23 taxing districts, regional library districts, or school 88.24 districts within which the city is located. This paragraph does 88.25 not apply to cities of 500 population or less. 88.26 (k) The county initial hearing date and the city, 88.27 metropolitan special taxing district, regional library district, 88.28 and school district initial hearing dates must be designated on 88.29 the notices required under subdivision 3. The continuation 88.30 hearing dates need not be stated on the notices. 88.31 (l) At a subsequent hearing, each county, school district, 88.32 city over 500 population, and metropolitan special taxing 88.33 district may amend its proposed property tax levy and must adopt 88.34 a final property tax levy. Each county, city over 500 88.35 population, and metropolitan special taxing district may also 88.36 amend its proposed budget and must adopt a final budget at the 89.1 subsequent hearing. The final property tax levy must be adopted 89.2 prior to adopting the final budget. A school district is not 89.3 required to adopt its final budget at the subsequent hearing. 89.4 The subsequent hearing of a taxing authority must be held on a 89.5 date subsequent to the date of the taxing authority's initial 89.6 public hearing. If a continuation hearing is held, the 89.7 subsequent hearing must be held either immediately following the 89.8 continuation hearing or on a date subsequent to the continuation 89.9 hearing. The subsequent hearing may be held at a regularly 89.10 scheduled board or council meeting or at a special meeting 89.11 scheduled for the purposes of the subsequent hearing. The 89.12 subsequent hearing of a taxing authority does not have to be 89.13 coordinated by the county auditor to prevent a conflict with an 89.14 initial hearing, a continuation hearing, or a subsequent hearing 89.15 of any other taxing authority. All subsequent hearings must be 89.16 held prior to five working days after December 20 of the levy 89.17 year. The date, time, and place of the subsequent hearing must 89.18 be announced at the initial public hearing or at the 89.19 continuation hearing. 89.20 (m) The property tax levy certified under section 275.07 by 89.21 a city of any population, county, metropolitan special taxing 89.22 district, regional library district, or school district must not 89.23 exceed the proposed levy determined under subdivision 1, except 89.24 by an amount up to the sum of the following amounts: 89.25 (1) the amount of a school district levy whose voters 89.26 approved a referendum to increase taxes under section 123B.63, 89.27 subdivision 3, or 126C.17, subdivision 9, after the proposed 89.28 levy was certified; 89.29 (2) the amount of a city or county levy approved by the 89.30 voters after the proposed levy was certified; 89.31 (3) the amount of a levy to pay principal and interest on 89.32 bonds approved by the voters under section 475.58 after the 89.33 proposed levy was certified; 89.34 (4) the amount of a levy to pay costs due to a natural 89.35 disaster occurring after the proposed levy was certified, if 89.36 that amount is approved by the commissioner of revenue under 90.1 subdivision 6a; 90.2 (5) the amount of a levy to pay tort judgments against a 90.3 taxing authority that become final after the proposed levy was 90.4 certified, if the amount is approved by the commissioner of 90.5 revenue under subdivision 6a; 90.6 (6) the amount of an increase in levy limits certified to 90.7 the taxing authority by the commissioner of children, families, 90.8 and learning or the commissioner of revenue after the proposed 90.9 levy was certified; and 90.10 (7) the amount required under section 126C.55. 90.11 (n) This subdivision does not apply to towns and special 90.12 taxing districts other than regional library districts and 90.13 metropolitan special taxing districts. 90.14 (o) Notwithstanding the requirements of this section, the 90.15 employer is required to meet and negotiate over employee 90.16 compensation as provided for in chapter 179A. 90.17 [EFFECTIVE DATE.] This section is effective for hearings 90.18 required in 2001 for taxes payable in 2002, and thereafter. 90.19 Sec. 49. Minnesota Statutes 2000, section 275.08, 90.20 subdivision 1, is amended to read: 90.21 Subdivision 1. [GENERALLY.] The mill ratepercentof all 90.22 taxes, except the state tax and taxes the rate of which may be 90.23 fixed by law, shall be calculated and fixed by the county 90.24 auditor according to the limitations in this chapter hereinafter 90.25 prescribed; provided, that if any county, city, town, or school 90.26 district shall return a greater amount than its limit or than 90.27 the prescribed rates will raise, the auditor shall extend only 90.28 such amount of tax as allowed by the limit or that the limited 90.29 rate will produce. 90.30 [EFFECTIVE DATE.] This section is effective for taxes 90.31 payable in 2002 and thereafter. 90.32 Sec. 50. Minnesota Statutes 2000, section 275.08, 90.33 subdivision 1a, is amended to read: 90.34 Subd. 1a. [COMPUTATION OFTAX CAPACITYASSESSED VALUE.] 90.35 For taxes payable in19892002 and subsequent years, the county 90.36 auditor shall compute thegross tax capacityassessed value for 91.1 each parcel according to the class rates specified in section 91.2 273.13. Thegross tax capacity will beassessed value is the 91.3 appropriate class rate multiplied by the parcel's market value. 91.4For taxes payable in 1990 and subsequent years, the county91.5auditor shall compute the net tax capacity for each parcel91.6according to the class rates specified in section 273.13. The91.7net tax capacity will be the appropriate class rate multiplied91.8by the parcel's market value.91.9 [EFFECTIVE DATE.] This section is effective for taxes 91.10 payable in 2002 and thereafter. 91.11 Sec. 51. Minnesota Statutes 2000, section 275.08, 91.12 subdivision 1b, is amended to read: 91.13 Subd. 1b. [COMPUTATION OF TAX RATES.] The amounts 91.14 certified to be levied againstnet tax capacityassessed value 91.15 under section 275.07 by an individual local government unit 91.16 shall be divided by the totalnet tax capacityassessed value of 91.17 all taxable properties within the local government unit's taxing 91.18 jurisdiction, excluding the assessed value of properties taxed 91.19 under section 275.083. The resulting ratio,is expressed as a 91.20 mill rate, where one mill equals one-tenth of a percent. The 91.21 mill rate shall be the local government's local tax rate,. The 91.22 mill rate multiplied by each property'snet tax capacity shall91.23beassessed value produces each property'snet tax capacitytax 91.24 for that local government unit before reduction by any credits. 91.25Any amount certified to the county auditor to be levied91.26against market value shall be divided by the total referendum91.27market value of all taxable properties within the taxing91.28district. The resulting ratio, the taxing district's new91.29referendum tax rate, multiplied by each property's referendum91.30market value shall be each property's new referendum tax before91.31reduction by any credits. For the purposes of this subdivision,91.32"referendum market value" means the market value as defined in91.33section 126C.01, subdivision 3.91.34 [EFFECTIVE DATE.] This section is effective for taxes 91.35 payable in 2002 and thereafter. 91.36 Sec. 52. [275.084] [TRANSPORTATION UTILITY FEE.] 92.1 Subdivision 1. [DEFINITIONS.] For the purposes of this 92.2 section, the following terms in this subdivision have the 92.3 meanings given: 92.4 (1) "Municipality" means a home rule charter or statutory 92.5 city. 92.6 (2) "Governing body" means the city council of a 92.7 municipality. 92.8 (3) "Reconstruction" means paving, grading, curbs and 92.9 gutters, bridge repair, overlays, drainage, base work, subgrade 92.10 corrections, and boulevard restoration. 92.11 (4) "Facility upgrade" means traffic signals, turn lanes, 92.12 medians, street approaches, alleys, rights-of-way, sidewalks, 92.13 retaining walls, fence installation, and additional traffic 92.14 lanes. 92.15 (5) "Maintenance" means striping, seal coating, crack 92.16 sealing, sidewalk maintenance, signal maintenance, street light 92.17 maintenance, and signage. 92.18 Subd. 2. [AUTHORIZATION.] A municipality may impose the 92.19 transportation utility fee provided in this section against land 92.20 located within its boundaries except for public property used 92.21 for public purposes. 92.22 Subd. 3. [PROCEDURES FOR ADOPTION.] A municipality may 92.23 impose the transportation utility fee provided in this section 92.24 by ordinance adopted by a two-thirds vote of its governing 92.25 body. The resolution must not be voted on or adopted until 92.26 after a public hearing has been held on the question. A notice 92.27 of the time, place, and purpose of the hearing must be published 92.28 at least once in each week for two successive weeks in the 92.29 official newspaper of the municipality, or in a newspaper of 92.30 general content and circulation within the municipality, and the 92.31 last notice must be published at least seven days prior to the 92.32 hearing. The municipality, if adopted, must file the ordinance 92.33 of record with the county recorder, and the municipality must 92.34 provide a copy to the county auditor. 92.35 Subd. 4. [COLLECTION.] The ordinance adopted under this 92.36 section must provide for the billing and payment of the fee on a 93.1 monthly, quarterly, or other basis as the governing body by 93.2 resolution shall direct. Fees that, as of October 15 each 93.3 calendar year, have remained unpaid for at least 30 days must be 93.4 certified to the county auditor for collection as a special 93.5 assessment payable in the following calendar year against the 93.6 affected property. 93.7 Subd. 5. [MASTER PLAN REQUIREMENT.] A municipality may not 93.8 impose the fee provided in this section unless it has prepared 93.9 and adopted a master plan that includes information on the 93.10 proposed reconstruction, facility upgrade, and maintenance for 93.11 the following five years. A capital improvement plan, public 93.12 facility plan, or comparable information qualifies as a master 93.13 plan. The master plan must include information on the proposed 93.14 funding sources for all projects required to be included in the 93.15 plan. The master plan must be adopted by resolution of the 93.16 governing body following a hearing and publication of notice of 93.17 the hearing, as provided in subdivision 3. 93.18 Subd. 6. [USE OF PROCEEDS.] Revenues from the fee 93.19 authorized in this section may only be used for specific 93.20 projects listed in the master plan and are limited to projected 93.21 costs of the needs approved in the master plan. The 93.22 municipality may not accumulate revenues from the fee beyond the 93.23 estimated costs for reconstructions, facility upgrades, and 93.24 maintenance that are described in the master plan. 93.25 Subd. 7. [TRIP GENERATION DATA.] The fee imposed must be 93.26 calculated based on the relationship of the revenues the 93.27 municipality proposes to generate and a city determined trip 93.28 generation rate for each type of land use. 93.29 Subd. 8. [APPEALS.] A property owner may administratively 93.30 appeal the amount of the fee or the trip generation rate to the 93.31 governing body within 60 days after notice of the amount of fee 93.32 due has been mailed to the property owner. The appeal must be 93.33 in writing, signed, and dated by the property owner, and must 93.34 state the reasons why the amount of the fee or the trip 93.35 generation rate is incorrect. The decision of the governing 93.36 body may be appealed to district court in the same manner as a 94.1 civil action. If the governing body does not make a decision 94.2 within six months after the filing of an administrative appeal, 94.3 the property owner may elect to appeal to court. The appeal 94.4 procedures in this subdivision are in lieu of any appeal 94.5 procedures relating to special assessments provided for in 94.6 chapter 429. 94.7 Subd. 9. [SPECIAL ASSESSMENTS; BONDS; PROPERTY TAX 94.8 LEVIES.] The use of the transportation utility fee by a 94.9 municipality does not restrict the municipality from imposing 94.10 special assessments, issuing bond debt, or levying property 94.11 taxes to pay the costs of local street reconstruction, facility 94.12 upgrades, or maintenance. 94.13 [EFFECTIVE DATE.] This section is effective for fees 94.14 payable in 2002 and thereafter. 94.15 Sec. 53. Minnesota Statutes 2000, section 275.28, 94.16 subdivision 1, is amended to read: 94.17 Subdivision 1. [AUDITOR TO MAKE.] The county auditor shall 94.18 make out the tax lists according to the prescribed form, and to 94.19 correspond with the assessment districts. The mill ratepercent94.20 necessary to raise the required amount of the various taxes 94.21 shall be calculated on thenet tax capacityassessed value of 94.22 property as determined by the state board of equalization, but, 94.23 in calculating such rates, no rate shall be usedresulting in a94.24fraction other than a decimal fraction, orless than agross94.25 local tax rate of.01 percent or a net local tax rate of .0194.26percent1/1,000 of a mill; and, in extending any tax, whenever 94.27 it amounts to the fractional part of a cent, it shall be made 94.28 one cent. The tax lists shall also be made out to correspond 94.29 with the assessment books in reference to ownership and 94.30 description of property, with columns for the valuation and for 94.31 the various items of tax included in the total amount of all 94.32 taxes set down opposite each description. The auditor shall 94.33 enter both the state tax determined under section 275.02, and 94.34 the local taxes determined under section 275.08 on the tax lists. 94.35 The total ad valorem property tax for each description of 94.36 property before credits is the sum of the amounts of the various 95.1 local taxes that apply to the parcel plus the amount of any 95.2 applicable state tax under section 275.02. Opposite each 95.3 description which has been sold for taxes, and which is subject 95.4 to redemption, but not redeemed, shall be placed the words "sold 95.5 for taxes." The amount of all special taxes shall be entered in 95.6 the proper columns, but the general taxes may be shown by 95.7 entering the mill ratepercentof each tax at the head of the 95.8 proper columns, without extending the same, in which case a 95.9 schedule of the mill ratespercentof such taxes shall be made 95.10 on the first page of each tax list. If the auditor fails to 95.11 enter on any such list before its delivery to the treasurer any 95.12 tax levied, the tax may be subsequently entered. The tax lists 95.13 shall be deemed completed, and all taxes extended thereon, as of 95.14 January 1 annually. 95.15 [EFFECTIVE DATE.] This section is effective for taxes 95.16 payable in 2002 and thereafter. 95.17 Sec. 54. Minnesota Statutes 2000, section 275.61, is 95.18 amended to read: 95.19 275.61 [VOTER APPROVED LEVY;MARKETASSESSED VALUE.] 95.20 For local governmental subdivisions other than school 95.21 districts, any levy, including the issuance of debt obligations 95.22 payable in whole or in part from property taxes, required to be 95.23 approved and approved by the voters at a general or special 95.24 electionfor taxes payable in 1993 and thereafter,shall be 95.25 levied against thereferendum marketassessed value of all 95.26 taxable property within the governmental subdivision, as defined95.27in section 126C.01, subdivision 3. Any levy amount subject to 95.28 the requirements of this section shall be certified separately 95.29 to the county auditor under section 275.07. 95.30 The ballot shall state the maximum amount of the increased 95.31 levy as a percentage ofmarketassessed value and the amount 95.32 that will be raised by the new referendum tax rate in the first 95.33 year it is to be levied. 95.34 [EFFECTIVE DATE.] This section is effective for taxes 95.35 payable in 2002 and thereafter. 95.36 Sec. 55. Minnesota Statutes 2000, section 276.04, 96.1 subdivision 2, is amended to read: 96.2 Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 96.3 shall provide for the printing of the tax statements. The 96.4 commissioner of revenue shall prescribe the form of the property 96.5 tax statement and its contents. The statement must contain a 96.6 tabulated statement of the dollar amount due to each taxing 96.7 authority and the amount of the statedetermined schooltax from 96.8 the parcel of real property for which a particular tax statement 96.9 is prepared. The dollar amounts attributable to the county, the 96.10 statedetermined schooltax, the voter approved school tax, the 96.11 other local school tax, the township or municipality, and the 96.12 total of the metropolitan special taxing districts as defined in 96.13 section 275.065, subdivision 3, paragraph (i), must be 96.14 separately stated. The amounts due all other special taxing 96.15 districts, if any, may be aggregated. The amount of the tax on 96.16 homesteads qualifying under the senior citizens' property tax 96.17 deferral program under chapter 290B is the total amount of 96.18 property tax before subtraction of the deferred property tax 96.19 amount. The amount of the tax on contamination value imposed 96.20 under sections 270.91 to 270.98, if any, must also be separately 96.21 stated. The dollar amounts, including the dollar amount of any 96.22 special assessments, may be rounded to the nearest even whole 96.23 dollar. For purposes of this section whole odd-numbered dollars 96.24 may be adjusted to the next higher even-numbered dollar. The 96.25 amount of market value excluded under section 273.11, 96.26 subdivision 16, if any, must also be listed on the tax 96.27 statement.The statement shall include the following sentences,96.28printed in upper case letters in boldface print: "EVEN THOUGH96.29THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX96.30REVENUES, IT SETS THE AMOUNT OF THE STATE-DETERMINED SCHOOL TAX96.31LEVY. THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY96.32PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."96.33 (b) The property tax statements for manufactured homes and 96.34 sectional structures taxed as personal property shall contain 96.35 the same information that is required on the tax statements for 96.36 real property. 97.1 (c) Real and personal property tax statements must contain 97.2 the following information in the order given in this paragraph. 97.3 The information must contain the current year tax information in 97.4 the right column with the corresponding information for the 97.5 previous year in a column on the left: 97.6 (1) the property's estimated market value under section 97.7 273.11, subdivision 1; 97.8 (2) the property's taxable market value after reductions 97.9 under section 273.11, subdivisions 1a and 16; 97.10 (3) the property's gross tax, calculated by adding the 97.11 property's total property tax to the sum of the aids enumerated 97.12 in clause (4); 97.13 (4) a total of the following aids: 97.14 (i) education aids payable under chapters 122A, 123A, 123B, 97.15 124D, 125A, 126C, and 127A; 97.16 (ii) local government aids for cities, towns, and counties 97.17 under chapter 477A; 97.18 (iii) disparity reduction aid under section 273.1398; and 97.19 (iv) homestead and agricultural credit aid under section 97.20 273.1398; 97.21 (5) for homesteadresidential and agriculturalproperties, 97.22 theeducationmarket value homesteadcreditcredits under 97.23 section273.1382273.1384; 97.24 (6) any credits received under sections 273.119; 273.123; 97.25 273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 97.26 473H.10, except that the amount of credit received under section 97.27 273.135 must be separately stated and identified as "taconite 97.28 tax relief"; and 97.29 (7) the net tax payable in the manner required in paragraph 97.30 (a). 97.31 (d) If the county uses envelopes for mailing property tax 97.32 statements and if the county agrees, a taxing district may 97.33 include a notice with the property tax statement notifying 97.34 taxpayers when the taxing district will begin its budget 97.35 deliberations for the current year, and encouraging taxpayers to 97.36 attend the hearings. If the county allows notices to be 98.1 included in the envelope containing the property tax statement, 98.2 and if more than one taxing district relative to a given 98.3 property decides to include a notice with the tax statement, the 98.4 county treasurer or auditor must coordinate the process and may 98.5 combine the information on a single announcement. 98.6 The commissioner of revenue shall certify to the county 98.7 auditor the actual or estimated aids enumerated in clause (4) 98.8 that local governments will receive in the following year. The 98.9 commissioner must certify this amount by January 1 of each year. 98.10 [EFFECTIVE DATE.] This section is effective July 1, 2001 98.11 and thereafter, for statements required in 2002 and thereafter. 98.12 Sec. 56. Minnesota Statutes 2000, section 276A.06, 98.13 subdivision 3, is amended to read: 98.14 Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall 98.15 apportion the levy of each governmental unit in the county in 98.16 the manner prescribed by this subdivision. The auditor shall: 98.17 (a) by August 20 of 1997 and each subsequent year, 98.18 determine the areawide portion of the levy for each governmental 98.19 unit by multiplying the local tax rate of the governmental unit 98.20 for the preceding levy year times the distribution value set 98.21 forth in subdivision 2, clause (b);and98.22 (b) by September 5 of 1997 and each subsequent year, 98.23 determine the local portion of the current year's levy by 98.24 subtracting the resulting amount from clause (a) from the 98.25 governmental unit's current year's levy.; and 98.26 (c) for determinations made under paragraph (a) in the case 98.27 of school districts, in 2001 and thereafter, for taxes payable 98.28 in 2002 and thereafter, exclude the general education tax rate 98.29 from the local tax rate for the preceding levy year. 98.30 [EFFECTIVE DATE.] This section is effective the day 98.31 following final enactment. 98.32 Sec. 57. Minnesota Statutes 2000, section 282.01, 98.33 subdivision 1a, is amended to read: 98.34 Subd. 1a. [CONVEYANCE; GENERALLY.] Tax-forfeited lands may 98.35 be sold by the county board to an organized or incorporated 98.36 governmental subdivision of the state for any public purpose for 99.1 which the subdivision is authorized to acquire property or may 99.2 be released from the trust in favor of the taxing districts on 99.3 application of a state agency for an authorized use at not less 99.4 than their value as determined by the county board.The99.5commissioner of revenue may convey by deed in the name of the99.6state a tract of tax-forfeited land held in trust in favor of99.7the taxing districts to a governmental subdivision for an99.8authorized public use, if an application is submitted to the99.9commissioner which includes a statement of facts as to the use99.10to be made of the tract and the need therefor and the99.11recommendation of the county board.99.12 [EFFECTIVE DATE.] This section is effective for deeds 99.13 issued on or after July 1, 2001. 99.14 Sec. 58. Minnesota Statutes 2000, section 282.01, 99.15 subdivision 1b, is amended to read: 99.16 Subd. 1b. [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 99.17 Notwithstanding subdivision 1a, in the case of tax-forfeited 99.18 lands located in a targeted neighborhood, as defined in section 99.19 469.201, subdivision 10,outside the metropolitan area, as99.20defined inand section 473.121, subdivision 2, the commissioner 99.21 of revenuemayshall convey by deed in the name of the state any 99.22 tract of tax-forfeited land held in trust in favor of the taxing 99.23 districts, to a political subdivision that submits an 99.24 application to the commissioner of revenue and the 99.25 recommendation of the county board. 99.26 (b)Notwithstanding subdivision 1a, in the case of99.27tax-forfeited lands located in a targeted neighborhood, as99.28defined in section 469.201, subdivision 10, in a county in the99.29metropolitan area, as defined in section 473.121, subdivision 2,99.30the commissioner of revenue shall convey by deed in the name of99.31the state any tract of tax-forfeited land held in trust in favor99.32of the taxing districts, to a political subdivision that submits99.33an application to the commissioner of revenue and the county99.34board.99.35(c)The application under paragraph (a)or (b)must include 99.36 a statement of facts as to the use to be made of the tract, the 100.1 need therefor, and a resolution, adopted by the governing body 100.2 of the political subdivision, finding that the conveyance of a 100.3 tract of tax-forfeited land to the political subdivision is 100.4 necessary to provide for the redevelopment of land as productive 100.5 taxable property. Deeds of conveyance issued under paragraph 100.6 (a) are not conditioned on continued use of the property for the 100.7 use stated in the application. 100.8 [EFFECTIVE DATE.] This section is effective for deeds 100.9 issued on or after July 1, 2001. 100.10 Sec. 59. Minnesota Statutes 2000, section 282.08, is 100.11 amended to read: 100.12 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 100.13 The net proceeds from the sale or rental of any parcel of 100.14 forfeited land, or from the sale of products from the forfeited 100.15 land, must be apportioned by the county auditor to the taxing 100.16 districts interested in the land, as follows: 100.17 (1) the portion required to pay any amounts included in the 100.18 appraised value under section 282.01, subdivision 3, as 100.19 representing increased value due to any public improvement made 100.20 after forfeiture of the parcel to the state, but not exceeding 100.21 the amount certified by the clerk of the municipality must be 100.22 apportioned to the municipal subdivision entitled to it; 100.23 (2) the portion required to pay any amount included in the 100.24 appraised value under section 282.019, subdivision 5, 100.25 representing increased value due to response actions taken after 100.26 forfeiture of the parcel to the state, but not exceeding the 100.27 amount of expenses certified by the pollution control agency or 100.28 the commissioner of agriculture, must be apportioned to the 100.29 agency or the commissioner of agriculture and deposited in the 100.30 fund from which the expenses were paid; 100.31 (3) the portion of the remainder required to discharge any 100.32 special assessment chargeable against the parcel for drainage or 100.33 other purpose whether due or deferred at the time of forfeiture, 100.34 must be apportioned to the municipal subdivision entitled to it; 100.35and100.36 (4) the portion of the remainder equal to unpaid state tax 101.1 levies against the property for the years the property was on 101.2 the tax lists prior to forfeiture, not including the associated 101.3 penalty and interest amounts; and 101.4 (5) any balance must be apportioned as follows: 101.5 (i) The county board may annually by resolution set aside 101.6 no more than 30 percent of the receipts remaining to be used for 101.7 timber development on tax-forfeited land and dedicated memorial 101.8 forests, to be expended under the supervision of the county 101.9 board. It must be expended only on projects approved by the 101.10 commissioner of natural resources. 101.11 (ii) The county board may annually by resolution set aside 101.12 no more than 20 percent of the receipts remaining to be used for 101.13 the acquisition and maintenance of county parks or recreational 101.14 areas as defined in sections 398.31 to 398.36, to be expended 101.15 under the supervision of the county board. 101.16 (iii) Any balance remaining must be apportioned as 101.17 follows: county, 40 percent; town or city, 20 percent; and 101.18 school district, 40 percent, provided, however, that in 101.19 unorganized territory that portion which would have accrued to 101.20 the township must be administered by the county board of 101.21 commissioners. 101.22 [EFFECTIVE DATE.] This section is effective July 1, 2001, 101.23 and thereafter. 101.24 Sec. 60. Minnesota Statutes 2000, section 290A.03, 101.25 subdivision 13, is amended to read: 101.26 Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes 101.27 payable" means the property tax exclusive of special 101.28 assessments, penalties, and interest payable on a claimant's 101.29 homestead after deductions made under sections 273.135, 101.30 273.1382, 273.1391, 273.42, subdivision 2, and any other state 101.31 paid property tax credits in any calendar year, and after any 101.32 refund claimed and allowable under section 290A.04, subdivision 101.33 2h, that is first payable in the year that the property taxes 101.34 are payable. In the case of a claimant who makes ground lease 101.35 payments, "property taxes payable" includes the amount of the 101.36 payments directly attributable to the property taxes assessed 102.1 against the parcel on which the house is located. No 102.2 apportionment or reduction of the "property taxes payable" shall 102.3 be required for the use of a portion of the claimant's homestead 102.4 for a business purpose if the claimant does not deduct any 102.5 business depreciation expenses for the use of a portion of the 102.6 homestead in the determination of federal adjusted gross 102.7 income. For homesteads which are manufactured homes as defined 102.8 in section 273.125, subdivision 8, and for homesteads which are 102.9 park trailers taxed as manufactured homes under section 168.012, 102.10 subdivision 9, "property taxes payable" shall also include 19 102.11 percent of the gross rent paid in the preceding year for the 102.12 site on which the homestead is located. When a homestead is 102.13 owned by two or more persons as joint tenants or tenants in 102.14 common, such tenants shall determine between them which tenant 102.15 may claim the property taxes payable on the homestead. If they 102.16 are unable to agree, the matter shall be referred to the 102.17 commissioner of revenue whose decision shall be final. Property 102.18 taxes are considered payable in the year prescribed by law for 102.19 payment of the taxes. 102.20 In the case of a claim relating to "property taxes 102.21 payable," the claimant must have owned and occupied the 102.22 homestead on January 2 of the year in which the tax is payable 102.23 and (i) the property must have been classified as homestead 102.24 property pursuant to section 273.124, on or before December 15 102.25 of the assessment year to which the "property taxes payable" 102.26 relate; or (ii) the claimant must provide documentation from the 102.27 local assessor that application for homestead classification has 102.28 been made on or before December 15 of the year in which the 102.29 "property taxes payable" were payable and that the assessor has 102.30 approved the application. 102.31 [EFFECTIVE DATE.] This section is effective beginning with 102.32 refunds based on property taxes payable in 2002. 102.33 Sec. 61. Minnesota Statutes 2000, section 290A.04, 102.34 subdivision 2, is amended to read: 102.35 Subd. 2. [HOMEOWNERS.] A claimant whose property taxes 102.36 payable are in excess of the percentage of the household income 103.1 stated below shall pay an amount equal to the percent of income 103.2 shown for the appropriate household income level along with the 103.3 percent to be paid by the claimant of the remaining amount of 103.4 property taxes payable. The state refund equals the amount of 103.5 property taxes payable that remain, up to the state refund 103.6 amount shown below. 103.7 Percent Percent Maximum 103.8 Household Income of Income Paid by State 103.9 Claimant Refund 103.10$0 to 1,029103.11 $0 to 1,189 1.2 percent 18 percent$440$1,190 103.121,030 to 2,059103.13 1,190 to 2,389 1.3 percent 18 percent$440$1,190 103.142,060 to 3,099103.15 2,390 to 3,589 1.4 percent 20 percent$440$1,190 103.163,100 to 4,129103.17 3,590 to 4,779 1.6 percent 20 percent$440$1,190 103.184,130 to 5,159103.19 4,780 to 5,969 1.7 percent 20 percent$440$1,190 103.205,160 to 7,229103.21 5,970 to 8,369 1.9 percent 25 percent$440$1,190 103.227,230 to 8,259103.23 8,370 to 9,559 2.1 percent 25 percent$440$1,190 103.248,260 to 9,289103.25 9,560 to 10,759 2.2 percent 25 percent$440$1,190 103.269,290 to 10,319103.27 10,760 to 11,949 2.3 percent 30 percent$440$1,190 103.2810,320 to 11,349103.29 11,950 to 13,139 2.4 percent 30 percent$440$1,190 103.3011,350 to 12,389103.31 13,140 to 14,349 2.5 percent 30 percent$440$1,190 103.3212,390 to 14,449103.33 14,350 to 16,729 2.6 percent 30 percent$440$1,190 103.3414,450 to 15,479103.35 16,730 to 17,919 2.8 percent 35 percent$440$1,190 103.3615,480 to 16,509103.37 17,920 to 19,119 3.0 percent 35 percent$440$1,190 103.3816,510 to 17,549103.39 19,120 to 20,319 3.2 percent 40 percent$440$1,190 103.4017,550 to 21,669103.41 20,320 to 25,089 3.3 percent 40 percent$440$1,190 103.4221,670 to 24,769103.43 25,090 to 28,679 3.4 percent 45 percent$440$1,190 103.4424,770 to 30,959103.45 28,680 to 41,819 3.5 percent 45 percent$440$1,190 103.4630,960 to 36,1193.5 percent45 percent$440103.4736,120 to 41,279103.48 41,820 to 47,789 3.7 percent 50 percent$440$1,190 103.4941,280 to 58,829103.50 47,790 to 63,329 4.0 percent 50 percent$440$1,190 103.51 63,330 to 64,519 4.0 percent 50 percent $1,080 103.52 64,520 to 65,719 4.0 percent 50 percent $ 960 103.53 65,720 to 66,909 4.0 percent 50 percent $ 830 103.54 66,910 to 68,109 4.0 percent 50 percent $ 720 103.5558,830 to 59,859103.56 68,110 to 69,309 4.0 percent 50 percent$310$600 103.5759,860 to 60,889103.58 69,310 to 70,499 4.0 percent 50 percent$210$360 103.5960,890 to 61,929103.60 70,500 to 71,699 4.0 percent 50 percent$100$120 103.61 The payment made to a claimant shall be the amount of the 103.62 state refund calculated under this subdivision. No payment is 104.1 allowed if the claimant's household income is$61,930$71,700 or 104.2 more. 104.3 [EFFECTIVE DATE.] This section is effective beginning with 104.4 refunds based on property taxes payable in 2002. 104.5 Sec. 62. Minnesota Statutes 2000, section 290A.04, 104.6 subdivision 2a, is amended to read: 104.7 Subd. 2a. [RENTERS.] A claimant whose rent constituting 104.8 property taxes exceeds the percentage of the household income 104.9 stated below must pay an amount equal to the percent of income 104.10 shown for the appropriate household income level along with the 104.11 percent to be paid by the claimant of the remaining amount of 104.12 rent constituting property taxes. The state refund equals the 104.13 amount of rent constituting property taxes that remain, up to 104.14 the maximum state refund amount shown below. 104.15 Percent Percent Maximum 104.16 Household Income of Income Paid by State 104.17 Claimant Refund 104.18 $0 to 3,099104.19 0 to 3,589 1.0 percent 5 percent$1,030$1,190 104.203,100 to 4,129104.21 3,590 to 4,779 1.0 percent 10 percent$1,030$1,190 104.224,130 to 5,159104.23 4,780 to 5,969 1.1 percent 10 percent$1,030$1,190 104.245,160 to 7,229104.25 5,970 to 8,369 1.2 percent 10 percent$1,030$1,190 104.267,230 to 9,289104.27 8,370 to 10,759 1.3 percent 15 percent$1,030$1,190 104.289,290 to 10,319104.29 10,760 to 11,949 1.4 percent 15 percent$1,030$1,190 104.3010,320 to 11,349104.31 11,950 to 13,139 1.4 percent 20 percent$1,030$1,190 104.3211,350 to 13,419104.33 13,140 to 15,539 1.5 percent 20 percent$1,030$1,190 104.3413,420 to 14,449104.35 15,540 to 16,729 1.6 percent 20 percent$1,030$1,190 104.3614,450 to 15,479104.37 16,730 to 17,919 1.7 percent 25 percent$1,030$1,190 104.3815,480 to 17,549104.39 17,920 to 20,319 1.8 percent 25 percent$1,030$1,190 104.4017,550 to 18,579104.41 20,320 to 21,509 1.9 percent 30 percent$1,030$1,190 104.4218,580 to 19,609104.43 21,510 to 22,699 2.0 percent 30 percent$1,030$1,190 104.4419,610 to 20,639104.45 22,700 to 23,899 2.2 percent 30 percent$1,030$1,190 104.4620,640 to 21,669104.47 23,900 to 25,089 2.4 percent 30 percent$1,030$1,190 104.4821,670 to 22,709104.49 25,090 to 26,289 2.6 percent 35 percent$1,030$1,190 104.5022,710 to 23,739104.51 26,290 to 27,489 2.7 percent 35 percent$1,030$1,190 104.5223,740 to 24,769104.53 27,490 to 28,679 2.8 percent 35 percent$1,030$1,190 104.5424,770 to 25,799104.55 28,680 to 29,869 2.9 percent 40 percent$1,030$1,190 104.5625,800 to 26,839104.57 29,870 to 31,079 3.0 percent 40 percent$1,030$1,190 105.126,840 to 27,869105.2 31,080 to 32,269 3.1 percent 40 percent$1,030$1,190 105.327,870 to 28,899105.4 32,270 to 33,459 3.2 percent 40 percent$1,030$1,190 105.528,900 to 29,929105.6 33,460 to 34,649 3.3 percent 45 percent$ 930$1,080 105.729,930 to 30,959105.8 34,650 to 35,849 3.4 percent 45 percent$ 830$ 960 105.930,960 to 31,999105.10 35,850 to 37,049 3.5 percent 45 percent$ 720$ 830 105.1132,000 to 33,029105.12 37,050 to 38,239 3.5 percent 50 percent$ 620$ 720 105.1333,030 to 34,059105.14 38,240 to 39,439 3.5 percent 50 percent$ 520$ 600 105.1534,060 to 35,089105.16 39,440 to 40,629 3.5 percent 50 percent$ 310$ 360 105.1735,090 to 36,119105.18 40,630 to 41,819 3.5 percent 50 percent$ 100$ 120 105.19 The payment made to a claimant is the amount of the state 105.20 refund calculated under this subdivision. No payment is allowed 105.21 if the claimant's household income is$36,120$41,820 or more. 105.22 [EFFECTIVE DATE.] This section is effective beginning with 105.23 refunds based on rent constituting property taxes paid in 2001. 105.24 Sec. 63. Minnesota Statutes 2000, section 290A.04, 105.25 subdivision 2h, is amended to read: 105.26 Subd. 2h. [ADDITIONAL REFUND.] (a) If the gross property 105.27 taxes payable on a homestead increase more than 12 percent over 105.28 thenetproperty taxes payable in the prior year on the same 105.29 property that is owned and occupied by the same owner on January 105.30 2 of both years, and the amount of that increase is $100 or 105.31 more, a claimant who is a homeowner shall be allowed an 105.32 additional refund equal to 60 percent of the amount of the 105.33 increase over the greater of 12 percent of the prior year's net 105.34 property taxes payable or $100. This subdivision shall not 105.35 apply to any increase in the gross property taxes payable 105.36 attributable to improvements made to the homestead after the 105.37 assessment date for the prior year's taxes. This subdivision 105.38 shall not apply to any increase in the gross property taxes 105.39 payable attributable to the termination of valuation exclusions 105.40 under section 273.11, subdivision 16. 105.41 The maximum refund allowed under this subdivision is $1,000. 105.42 (b) For purposes of this subdivision,the following terms105.43have the meanings given:105.44(1) "Net property taxes payable" means property taxes106.1payable minus refund amounts for which the claimant qualifies106.2pursuant to subdivision 2 and this subdivision.106.3(2)"gross property taxes payable" meansnetproperty taxes 106.4 payable determined without regard to the refund allowed under 106.5 this subdivision. 106.6 (c) In addition to the other proofs required by this 106.7 chapter, each claimant under this subdivision shall file with 106.8 the property tax refund return a copy of the property tax 106.9 statement for taxes payable in the preceding year or other 106.10 documents required by the commissioner. 106.11 (d) Upon request, the appropriate county official shall 106.12 make available the names and addresses of the property taxpayers 106.13 who may be eligible for the additional property tax refund under 106.14 this section. The information shall be provided on a magnetic 106.15 computer disk. The county may recover its costs by charging the 106.16 person requesting the information the reasonable cost for 106.17 preparing the data. The information may not be used for any 106.18 purpose other than for notifying the homeowner of potential 106.19 eligibility and assisting the homeowner, without charge, in 106.20 preparing a refund claim. 106.21 [EFFECTIVE DATE.] This section is effective beginning with 106.22 refunds based on gross property taxes payable in 2002. 106.23 Sec. 64. Minnesota Statutes 2000, section 290A.04, 106.24 subdivision 4, is amended to read: 106.25 Subd. 4. [INFLATION ADJUSTMENT.] Beginning for property 106.26 tax refunds payable in calendar year19962002, the commissioner 106.27 shall annually adjust the dollar amounts of the income 106.28 thresholds and the maximum refunds under subdivisions 2 and 2a 106.29 for inflation. The commissioner shall make the inflation 106.30 adjustments in accordance with section290.06, subdivision 2d1f 106.31 of the Internal Revenue Code, except that for purposes of this 106.32 subdivision the percentage increase shall be determined from the 106.33 year ending on June 30,19942000, to the year ending on June 30 106.34 of the year preceding that in which the refund is payable. The 106.35 commissioner shall use the appropriate percentage increase to 106.36 annually adjust the income thresholds and maximum refunds under 107.1 subdivisions 2 and 2a for inflation without regard to whether or 107.2 not the income tax brackets are adjusted for inflation in that 107.3 year. The commissioner shall round the thresholds and the 107.4 maximum amounts, as adjusted to the nearest $10 amount. If the 107.5 amount ends in $5, the commissioner shall round it up to the 107.6 next $10 amount. 107.7 The commissioner shall annually announce the adjusted 107.8 refund schedule at the same time provided under section 290.06. 107.9 The determination of the commissioner under this subdivision is 107.10 not a rule under the Administrative Procedure Act. 107.11 [EFFECTIVE DATE.] This section is effective the day 107.12 following final enactment. 107.13 Sec. 65. [290C.01] [PURPOSE.] 107.14 It is the policy of this state to promote sustainable 107.15 forest resource management on the state's public and private 107.16 lands. Recognizing that private forests comprise approximately 107.17 one-half of the state's forest land resources, and that healthy 107.18 and robust state forest land resources provide significant 107.19 benefits to the citizens of the state, and that ad valorem 107.20 property taxes represent a significant annual cost that can 107.21 discourage long-term forest management investments, sections 107.22 290C.01 to 290C.12, which may be referred to as the Sustainable 107.23 Forest Tax Refund Act, are enacted to encourage the state's 107.24 private forest landowners to make long-term commitments to 107.25 sustainable forest management of lands within the state. 107.26 Sec. 66. [290C.02] [DEFINITIONS.] 107.27 Subdivision 1. [APPLICATION.] When used in sections 107.28 290C.01 to 290C.12, the following words and terms have the 107.29 meanings given in this section. 107.30 Subd. 2. [APPROVED PLAN WRITERS.] "Approved plan writers" 107.31 are natural resource professionals who are employed by private 107.32 sector companies or individuals, nonprofit organizations, local 107.33 units of government, or public agencies, and who are approved by 107.34 the commissioner of natural resources. Persons determined to be 107.35 certified foresters by the Society of American Foresters shall 107.36 be deemed to meet the standards required under this 108.1 subdivision. The commissioner of natural resources shall issue 108.2 a unique identification number to each approved planner. 108.3 Subd. 3. [CLAIMANT.] "Claimant" means a person, as that 108.4 term is defined in section 290.01, subdivision 2, who owns 108.5 forest land in Minnesota and files an application authorized by 108.6 the Sustainable Forest Tax Refund Act. No more than one 108.7 claimant is entitled to relief under this act with respect to 108.8 any tract, parcel, or piece of land enrolled under this act. 108.9 When enrolled forest land is owned by two or more persons, the 108.10 owners must determine between them which person may claim the 108.11 refunds provided under sections 290C.01 to 290C.12. 108.12 Subd. 4. [COMMISSIONER.] "Commissioner" means the 108.13 commissioner of the department of revenue. 108.14 Subd. 5. [CURRENT USE VALUE TAX.] "Current use value tax" 108.15 means (i) 90 percent of the product of the most recent 108.16 countywide weighted average annual net timber growth rate per 108.17 acre for the county published by the United States Department of 108.18 Agriculture's Forest Service North Central Research Station as 108.19 of June 1 of the taxes payable year times the most recent 108.20 countywide weighted average stumpage value per acre for the 108.21 county published by the department of natural resources as of 108.22 June 1 of the taxes payable year, divided by (ii) a statewide 108.23 capitalization rate for timber resource investments in the prior 108.24 year as determined by the commissioner on or before June 1 of 108.25 the taxes payable year, times (iii) the average local tax rate 108.26 in towns in the county as computed by the commissioner from the 108.27 information certified by the county auditor on the abstract of 108.28 tax lists submitted under section 275.29 for the taxes payable 108.29 year, times (iv) the number of acres of the claimant's land in 108.30 the county classified under section 273.13, subdivision 23, 108.31 paragraph (b), clause (2), item (ii), and approved for 108.32 sustainable forest tax refunds. 108.33 Subd. 6. [FOREST LAND.] "Forest land" means land 108.34 containing a minimum of 20 contiguous acres for which the owner 108.35 has implemented a forest management plan that was prepared or 108.36 updated within the past ten years by an approved plan writer. 109.1 At least 50 percent of the contiguous acreage must meet the 109.2 definition of forest land in section 88.01, subdivision 7. For 109.3 the purposes of sections 290C.01 to 209C.12, forest land does 109.4 not include (i) land used for residential purposes, agricultural 109.5 purposes, or commercial purposes other than the growing of 109.6 timber, (ii) land enrolled in the reinvest in Minnesota program, 109.7 a state or federal conservation reserve or easement reserve 109.8 program, the Minnesota agricultural property tax law, or land 109.9 subject to agricultural land preservation controls or 109.10 restrictions as defined in section 40A.02, or under the 109.11 Metropolitan Agricultural Preserves Act, or (iii) land improved 109.12 with a structure, pavement, road, sewer, or campsite. 109.13 Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management plan" 109.14 means a written document providing a framework for a 109.15 site-specific healthy, productive, and sustainable forest 109.16 ecosystem. A forest management plan must include at least the 109.17 following: (i) owner specific long-term and short-term forest 109.18 management goals for the property including, when available, 109.19 goals for individual cover types; (ii) a map of the vegetation 109.20 on the property; (iii) a reliable field inventory of the 109.21 individual cover types, their age, and density; (iv) an analysis 109.22 of the soil type and quality; (v) an aerial photo of the land 109.23 clearly indicating the boundaries of the property and of the 109.24 forest land; (vi) the proposed future character of the cover 109.25 types on the property; and (vii) prescriptions to meet proposed 109.26 future cover type character on the property and a timetable for 109.27 implementing the prescribed activities. All management 109.28 activities prescribed in a plan must be in accordance with the 109.29 recommended forest management guidelines adopted in 1999 by the 109.30 Minnesota forest resources council. The commissioner of natural 109.31 resources shall provide a framework for updating and revising 109.32 plans. 109.33 Subd. 8. [NET PROPERTY TAX.] "Net property tax" means the 109.34 product of (i) the average market value per acre of taxable 109.35 forested lands in the county, including those described in 109.36 subdivision 6, for the taxes payable year as determined by the 110.1 county assessor, times (ii) the class rate specified in section 110.2 273.13 for class 2b timberlands, times (iii) the average local 110.3 tax rate in the towns in the county as computed by the 110.4 commissioner from the information certified by the county 110.5 auditor on the abstract of tax lists submitted under section 110.6 275.29 for the taxes payable year, times (iv) the number of 110.7 acres of land in the county owned by the claimant that have been 110.8 classified under section 273.13, subdivision 23, paragraph (b), 110.9 clause (2), item (ii), and approved for sustainable forest tax 110.10 refunds. 110.11 Sec. 67. [290C.03] [SUSTAINABLE FOREST TAX REFUNDS.] 110.12 Each claimant shall be allowed a refund for taxes payable 110.13 in the current year in an amount that is the greater of (1) 110.14 two-thirds of the net property tax computed for land owned by 110.15 the claimant that has been classified under section 273.13, 110.16 subdivision 23, paragraph (b), clause (2), item (ii), and 110.17 approved for sustainable forest tax refunds, or (2) the amount 110.18 by which the total property tax before special assessments, as 110.19 shown on the property tax statements for the parcels that 110.20 completely contain the claimant's approved land, exceeds the 110.21 current use value tax for the claimant's approved land. The 110.22 refund for a claimant may not exceed the lesser of (i) the total 110.23 property tax before special assessments on the property tax 110.24 statements for the parcels that completely contain the 110.25 claimant's approved land, or (ii) the product of $20 times the 110.26 number of acres of approved land for the claimant. 110.27 Sec. 68. [290C.04] [APPLICATIONS.] 110.28 (a) A landowner may apply to enroll land that is classified 110.29 under section 273.13, subdivision 23, paragraph (b), clause (2), 110.30 item (ii), for sustainable forest tax refunds. The owner must 110.31 complete, sign, and submit an application to the commissioner by 110.32 September 30 in order for the land to become eligible beginning 110.33 with the refunds payable in the next year. The application 110.34 shall be on a form prescribed by the commissioner and must 110.35 include the information the commissioner deems necessary. At a 110.36 minimum, the application must show the following information for 111.1 the land and the claimant: (i) the claimant's social security 111.2 number or state or federal business tax registration number and 111.3 date of birth, (ii) a copy of the property tax statement or 111.4 statements for taxes payable in the current year for the tax 111.5 parcels that completely contain the land to be enrolled, (iii) 111.6 the claimant's address, (iv) the claimant's signature, (v) the 111.7 county's parcel identification numbers for the tax parcels that 111.8 completely contain the claimant's forest land that is sought to 111.9 be enrolled, if those identification numbers are not shown on 111.10 the submitted copy of the related property tax statements, and 111.11 (vi) proof, in a form specified by the commissioner, that the 111.12 claimant has executed and acknowledged in the manner required by 111.13 law for a deed, and recorded, a covenant that the land is not 111.14 and shall not be developed with a structure, pavement, road, 111.15 sewer, or campsite, and that it will be used in a manner 111.16 consistent with the requirements and conditions of the 111.17 Sustainable Forest Tax Refund Act. The covenant shall be, and 111.18 shall state that it is, binding on the owner and the owner's 111.19 successor or assignee, and that it shall run with the land for a 111.20 period of not less than ten years. The commissioner shall 111.21 specify the form of the covenant and provide copies on request. 111.22 The covenant must include a legal description that encompasses 111.23 all the forest land that the claimant wishes to enroll under the 111.24 Sustainable Forest Tax Refund Act, or the certificate of title 111.25 number for that land if it is registered land. 111.26 (b) The commissioner shall notify the owner within 90 days 111.27 after receipt of a completed application whether the land has 111.28 been approved for enrollment. The owner of land for which the 111.29 application is denied may, within 60 days of receipt of a notice 111.30 of denial, appeal the denial to the commissioner. 111.31 Sec. 69. [290C.05] [REPORTS.] 111.32 By September 30 each year, each county assessor shall 111.33 submit a certification to the commissioner listing the parcel 111.34 identification numbers of all parcels containing land classified 111.35 under section 273.13, subdivision 23, paragraph (b), clause (2), 111.36 item (ii), and the number of acres for each such parcel that are 112.1 classified under item (ii). 112.2 Sec. 70. [290C.06] [ANNUAL CERTIFICATION.] 112.3 Annually, beginning with the year after the owner has made 112.4 an approved application, the commissioner shall send each owner 112.5 of property enrolled under the Sustainable Forest Tax Refund Act 112.6 a certification on or before July 1. The owner must sign the 112.7 certification attesting that the requirements and conditions in 112.8 sections 290C.01 to 290C.12 for continued enrollment are 112.9 currently being met and return the signed certification to the 112.10 commissioner by August 15. The owner must enclose a copy of the 112.11 property tax statements for taxes payable in the current year 112.12 for the parcels that completely contain the lands approved for 112.13 refunds when each annual certification is returned. Failure to 112.14 return an annual certification by the due date shall result in 112.15 an involuntary withdrawal of the lands from the provisions of 112.16 the Sustainable Forest Tax Refund Act and the imposition of any 112.17 applicable withdrawal penalty, subject to the owner's appeal of 112.18 such withdrawal, and of the associated penalties, according to 112.19 the procedures and within the time allowed under section 290C.11. 112.20 Sec. 71. [290C.07] [REFUND ALLOWABLE.] 112.21 A refund of property taxes on enrolled land will be made 112.22 annually to each owner in the amount determined under section 112.23 290C.03. The refunds shall be paid on or before October 1 each 112.24 year based on the certifications due August 15 of that year. 112.25 Interest at the annual rate determined under section 270.75 112.26 shall be included with any refund not paid by the later of 112.27 October 1 of the year the certification was due or 45 days after 112.28 the completed certification was returned or filed if the 112.29 commissioner accepts a certification filed after August 15 of 112.30 the taxes payable year as the resolution of an appeal. 112.31 Sec. 72. [290C.08] [WITHDRAWAL FOR TAX DELINQUENCIES.] 112.32 If the delinquent tax list of a county contains any land 112.33 classified under section 273.13, subdivision 23, paragraph (b), 112.34 clause (2), item (ii), the county auditor shall give notice to 112.35 the commissioner by mailing a copy of the list to the 112.36 commissioner within 30 days of its publication. The 113.1 commissioner shall involuntarily withdraw property from 113.2 receiving sustainable forest tax refunds if any part of the 113.3 property taxes on the land are delinquent as defined in chapter 113.4 279. Lands withdrawn under this section are not entitled to 113.5 refunds beginning with the year in which the delinquency occurs 113.6 and are subject to withdrawal penalties. The commissioner shall 113.7 mail a notice to the owner within 60 days of a withdrawal made 113.8 under this section. The owner may appeal a withdrawal based on 113.9 a delinquency under this section, and the lands shall remain 113.10 eligible for refunds if the delinquent taxes are paid, and proof 113.11 thereof is submitted along with proof of payment of the first 113.12 one-half installment of property taxes due in the current year, 113.13 on or before the due date of the owner's timely filed annual 113.14 certification for the current year. 113.15 Sec. 73. [290C.09] [VOLUNTARY WITHDRAWALS.] 113.16 (a) After land approved to receive sustainable forest tax 113.17 refunds has remained eligible for ten consecutive years, the 113.18 owner may voluntarily withdraw the land from the provisions of 113.19 this act by notifying the commissioner in writing. Within 60 113.20 days of receiving an owner's written request for a voluntary 113.21 withdrawal under the provisions of this paragraph, the 113.22 commissioner shall inform the owner by return mail of the 113.23 effective date of the withdrawal. A withdrawal under this 113.24 paragraph causes the land to be ineligible for sustainable 113.25 forest tax refunds for taxes payable in the following year and 113.26 thereafter, except that in the case of a subsequent approved 113.27 application to enroll the same lands, such subsequent 113.28 application shall be effective according to its terms and the 113.29 provisions of this act. An owner wishing to apply under the 113.30 Sustainable Forest Tax Refund Act for lands that were previously 113.31 voluntarily or involuntarily withdrawn must reapply as 113.32 prescribed in section 290C.04. Withdrawal penalties do not 113.33 apply to lands voluntarily withdrawn according to the provisions 113.34 of this paragraph. 113.35 (b) The commissioner may withdraw lands from the provisions 113.36 of this act and declare land to be ineligible for continued 114.1 further refunds at any time if the commissioner becomes aware of 114.2 a violation of a requirement or condition of this act. The 114.3 commissioner shall mail a notice to the owner within 60 days of 114.4 a determination made under this paragraph. 114.5 (c) Within 15 days after the expiration of an appeal period 114.6 in the case of any withdrawal or denial of an application, the 114.7 commissioner shall execute and acknowledge a document releasing 114.8 the land from the covenant required under section 290C.04. The 114.9 document must be mailed to the owner and is entitled to be 114.10 recorded. 114.11 Sec. 74. [290C.10] [PENALTIES.] 114.12 Except for land voluntarily withdrawn under the provisions 114.13 of section 290C.09, land approved for refunds under this act 114.14 that is withdrawn and that becomes ineligible for further 114.15 refunds for any reason is subject to the penalties provided in 114.16 this section. The penalty for a withdrawal is 500 percent of 114.17 the owner's average refund for the years of participation if the 114.18 withdrawal occurs within the first five years of participation 114.19 or the total of the refunds paid in the prior five years if the 114.20 withdrawal occurs after the first five years of participation. 114.21 If the penalty is not paid within 90 days after a notice of its 114.22 assessment has been mailed to the owner at the address last 114.23 known to the commissioner, the commissioner shall certify such 114.24 amount to the county auditor for collection as a part of the 114.25 real property taxes on the land payable in the following year. 114.26 If property for which penalties have been added to the property 114.27 tax under this section forfeits under chapter 281 and any 114.28 portion of the penalty plus interest remains unpaid, the county 114.29 auditor shall cancel the penalty plus interest amount as 114.30 provided in section 282.07. However, any proceeds from the 114.31 subsequent sale of the forfeited property must be used, first as 114.32 provided in section 290B.07, paragraph (b), and then to 114.33 reimburse the state for the penalty under this section plus 114.34 interest. In addition, the repurchase price of forfeited land 114.35 must include the amount of any penalty added under this section 114.36 that remains unpaid at the time, plus interest. 115.1 Sec. 75. [290C.11] [APPEALS.] 115.2 Within 60 days of the denial of an application, the 115.3 imposition of a penalty, or within 60 days of an involuntary 115.4 withdrawal of lands, the commissioner shall notify the landowner 115.5 by mail. Except as provided in section 290C.08, an aggrieved 115.6 owner has 60 days from receipt of the commissioner's notice to 115.7 make an appeal to the commissioner regarding the penalties or 115.8 the withdrawal. The appeal must be in writing. If the 115.9 commissioner denies the appeal, or if the commissioner has not 115.10 made a determination on the appeal within 60 days of when the 115.11 commissioner received the written appeal, the owner may appeal 115.12 the penalties or the withdrawal to the tax court under chapter 115.13 271 as if the appeal is from an order of the commissioner. 115.14 Sec. 76. [290C.12] [APPROPRIATION.] 115.15 An amount sufficient to pay the refunds provided in 115.16 sections 290C.01 to 290C.11 is annually appropriated to the 115.17 commissioner from the general fund of the state treasury. 115.18 [EFFECTIVE DATE.] This section is effective for taxes 115.19 payable in 2003 and thereafter. 115.20 Sec. 77. Minnesota Statutes 2000, section 469.1763, 115.21 subdivision 6, is amended to read: 115.22 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 115.23 subdivision applies only to districts for which the request for 115.24 certification was made before June 2,19972001. 115.25 (b) The municipality for the district may transfer 115.26 available increments from another tax increment financing 115.27 district located in the municipality, if the transfer is 115.28 necessary to eliminate a deficit in the district to which the 115.29 increments are transferred. A deficit in the district for 115.30 purposes of this subdivision means the lesser of the following 115.31 two amounts: 115.32 (1)(i) the amount due during the calendar year to pay 115.33 preexisting obligations of the district; minus 115.34 (ii) the total increments to be collected from properties 115.35 located within the district that are available for the calendar 115.36 year; plus 116.1 (iii) total increments from properties located in other 116.2 districts in the municipality that are available to be used to 116.3 meet the district's obligations under this section, excluding 116.4 this subdivision, or other provisions of law (but excluding a 116.5 special tax under section 469.1791 and the grant program under 116.6 Laws 1997, chapter 231, article 1, section 19, or this article); 116.7 or 116.8 (2) the reduction in increments collected from properties 116.9 located in the district for the calendar year as a result of the 116.10 changes in class rates inLaws 1997, chapter 231, article 1;116.11Laws 1998, chapter 389, article 2; and Laws 1999, chapter116.12243this article or the elimination of the general education tax 116.13 levy under this article. 116.14 (c) A preexisting obligation means bonds issued and sold 116.15 before June 2,19972001, and bonds issued to refund such bonds 116.16 or to reimburse expenditures made in conjunction with a signed 116.17 contractual agreement entered into before June 2,19972001, to 116.18 the extent that the bonds are secured by a pledge of increments 116.19 from the tax increment financing district. For purposes of this 116.20 subdivision, bonds exclude an obligation to reimburse or pay a 116.21 developer or owner of property located in the district for 116.22 amounts incurred or paid by the developer or owner. 116.23 (d) The municipality may require a development authority, 116.24 other than a seaway port authority, to transfer available 116.25 increments for any of its tax increment financing districts in 116.26 the municipality to make up an insufficiency in another district 116.27 in the municipality, regardless of whether the district was 116.28 established by the development authority or another development 116.29 authority. This authority applies notwithstanding any law to 116.30 the contrary, but applies only to a development authority that: 116.31 (1) was established by the municipality; or 116.32 (2) the governing body of which is appointed, in whole or 116.33 part, by the municipality or an officer of the municipality or 116.34 which consists, in whole or part, of members of the governing 116.35 body of the municipality. 116.36 (e) The authority under this subdivision to spend tax 117.1 increments outside of the area of the district from which the 117.2 tax increments were collected: 117.3 (1) may only be exercised after obtaining approval of the 117.4 use of the increments, in writing, by the commissioner of 117.5 revenue; 117.6 (2) is an exception to the restrictions under section 117.7 469.176, subdivision 4i, and the other provisions of this 117.8 section, and the percentage restrictions under subdivision 2 117.9 must be calculated after deducting increments spent under this 117.10 subdivision from the total increments for the district; and 117.11 (3) applies notwithstanding the provisions of the Tax 117.12 Increment Financing Act in effect for districts for which the 117.13 request for certification was made before June 30, 1982, or any 117.14 other law to the contrary. 117.15 [EFFECTIVE DATE.] This section is effective January 2, 117.16 2003, and thereafter. 117.17 Sec. 78. Minnesota Statutes 2000, section 469.177, 117.18 subdivision 1a, is amended to read: 117.19 Subd. 1a. [ORIGINAL LOCAL TAX RATE.] At the time of the 117.20 initial certification of the original net tax capacity for a tax 117.21 increment financing district or a subdistrict, the county 117.22 auditor shall certify the original local tax rate that applies 117.23 to the district or subdistrict. The original local tax rate is 117.24 the sum of all the local tax rates that apply to a property in 117.25 the district or subdistrict. The local tax rate to be certified 117.26 is the rate in effect for the same taxes payable year applicable 117.27 to the tax capacity values certified as the district's or 117.28 subdistrict's original tax capacity. The resulting tax capacity 117.29 rate is the original local tax rate for the life of the district 117.30 or subdistrict. The original local tax rate does not include 117.31 any rate or amount attributable to a state levy, whether the 117.32 state levy is imposed by section 275.02 or another provision of 117.33 law. 117.34 [EFFECTIVE DATE.] This section is effective the day 117.35 following final enactment for all districts and projects 117.36 regardless of when the request for certification was made. 118.1 Sec. 79. Minnesota Statutes 2000, section 469.177, 118.2 subdivision 11, is amended to read: 118.3 Subd. 11. [DEDUCTION FOR ENFORCEMENT COSTS; 118.4 APPROPRIATION.] (a) The county treasurer shall deduct an amount 118.5 equal to0.250.34 percent of any increment distributed to an 118.6 authority or municipality. The county treasurer shall pay the 118.7 amount deducted to the state treasurer for deposit in the state 118.8 general fund. 118.9 (b) The amounts deducted and paid under paragraph (a) are 118.10 appropriated to the state auditor for the cost of (1) the 118.11 financial reporting of tax increment financing information and 118.12 (2) the cost of examining and auditing of authorities' use of 118.13 tax increment financing as provided under section 469.1771, 118.14 subdivision 1. Notwithstanding section 16A.28 or any other law 118.15 to the contrary, this appropriation does not cancel and remains 118.16 available until spent. 118.17 [EFFECTIVE DATE.] This section is effective for taxes 118.18 payable in 2002 and thereafter. 118.19 Sec. 80. [469.1816] [SCHOOL DISTRICT GENERAL EDUCATION 118.20 LEVY ABATEMENTS.] 118.21 Notwithstanding the provisions of any other law, a school 118.22 district that has adopted an abatement resolution under sections 118.23 469.1812 to 469.1815 prior to June 2, 2001, pursuant to which 118.24 all or a portion of its general education levy for a particular 118.25 parcel or parcels was to be abated for taxes payable in 2002 or 118.26 later years and pledged to the payment of bonds issued prior to 118.27 June 2, 2001, may levy an amount sufficient to make its required 118.28 payment on the bonds. The levy authorized under this section 118.29 may not exceed the lesser of: (1) the amount specified for this 118.30 purpose in the resolution for the taxes payable year, or (2) the 118.31 amount of the payable 2001 general education tax levied on the 118.32 property for which the abatements were granted. The authority 118.33 in this section terminates for a district for taxes payable in 118.34 the year following the expiration of the resolution without 118.35 giving any effect to an extension or modification of the 118.36 resolution made after June 2, 2001. 119.1 [EFFECTIVE DATE.] This section is effective the day 119.2 following final enactment. 119.3 Sec. 81. Minnesota Statutes 2000, section 473.446, 119.4 subdivision 1, is amended to read: 119.5 Subdivision 1. [WITHIN TRANSIT TAXING DISTRICT.] For the 119.6 purposes of sections 473.405 to 473.449 and the metropolitan 119.7 transit system, except as otherwise provided in this subdivision 119.8 and subdivision 1b, the council shall levy each year upon all 119.9 taxable property within the metropolitan transit taxing 119.10 district, defined in subdivision 2, a transit tax consisting of: 119.11 (a) an amount which shall be used for payment of the 119.12 expenses of operating transit and paratransit service and to 119.13 provide for payment of obligations issued by the council under 119.14 section 473.436, subdivision 6; 119.15 (b) an additional amount, if any, the council determines to 119.16 be necessary to provide for the full and timely payment of its 119.17 certificates of indebtedness and other obligations outstanding 119.18 on July 1, 1985, to which property taxes under this section have 119.19 been pledged; and 119.20 (c) an additional amount necessary to provide full and 119.21 timely payment of certificates of indebtedness, bonds, including 119.22 refunding bonds or other obligations issued or to be issued 119.23 under section 473.39 by the council for purposes of acquisition 119.24 and betterment of property and other improvements of a capital 119.25 nature and to which the council has specifically pledged tax 119.26 levies under this clause. 119.27 The property tax levied by the council for general purposes 119.28 under paragraph (a) must not exceed the following amount for the 119.29 years specified: 119.30 (1) for taxes payable in 1995, the council's property tax 119.31 levy limitation for general transit purposes is equal to the 119.32 former regional transit board's property tax levy limitation for 119.33 general transit purposes under this subdivision, for taxes 119.34 payable in 1994, multiplied by an index for market valuation 119.35 changes equal to the total market valuation of all taxable 119.36 property located within the metropolitan transit taxing district 120.1 for the current taxes payable year divided by the total market 120.2 valuation of all taxable property located within the 120.3 metropolitan transit taxing district for the previous taxes 120.4 payable year;and120.5 (2) for taxes payable in 1996and subsequent yearsthrough 120.6 2001, the product of (i) the council's property tax levy 120.7 limitation for general transit purposes for the previous year 120.8 determined under this subdivision before reduction by the amount 120.9 levied by any municipality in the previous year under section 120.10 473.388, subdivision 7, multiplied by (ii) an index for market 120.11 valuation changes equal to the total market valuation of all 120.12 taxable property located within the metropolitan transit taxing 120.13 district for the current taxes payable year divided by the total 120.14 market valuation of all taxable property located within the 120.15 metropolitan transit taxing district for the previous taxes 120.16 payable year, minus the amount levied by any municipality in the 120.17 current levy year under section 473.388, subdivision 7.; 120.18 (3) for taxes payable in 2002, the council's property tax 120.19 levy limitation for general transit purposes is equal to (i) the 120.20 council's property tax levy limitation for general transit 120.21 purposes for the previous year, determined under this 120.22 subdivision before reduction by the amount levied by any 120.23 municipality for the previous year under section 473.388, 120.24 subdivision 7, multiplied by (ii) an index for market valuation 120.25 changes equal to the total market valuation of all taxable 120.26 property located within the metropolitan transit taxing district 120.27 for the current taxes payable year divided by the total market 120.28 valuation of all taxable property located within the 120.29 metropolitan transit taxing district for the previous taxes 120.30 payable year, minus (iii) the amount levied by a municipality 120.31 under section 473.388, subdivision 7, for the same taxes payable 120.32 year as the council's limitation, plus (iv) $17,400,000. The 120.33 council must distribute 13.8 percent of any amount levied 120.34 pursuant to item (iv) as additional financial assistance under 120.35 section 473.388; 120.36 (4) for taxes payable in 2003, the council's property tax 121.1 levy limitation for general transit purposes is equal to (i) the 121.2 council's property tax levy limitation for general transit 121.3 purposes for the previous year, determined under this 121.4 subdivision before reduction by the amount levied by any 121.5 municipality for the previous year under section 473.388, 121.6 subdivision 7, minus (ii) $17,400,000, multiplied by (iii) the 121.7 index for market valuation changes as described in clause (3), 121.8 minus (iv) the amount levied by a municipality under section 121.9 473.388, subdivision 7, for the same taxes payable year as the 121.10 council's limitation, plus (v) $11,500,000. The council must 121.11 distribute 13.8 percent of any amount levied pursuant to item 121.12 (iv) as additional financial assistance under section 473.388; 121.13 and 121.14 (5) for taxes payable in 2004 and thereafter, the council's 121.15 property tax levy limitation for general transit purposes is 121.16 equal to (i) the council's property tax levy limitation for 121.17 general transit purposes for the previous year, determined under 121.18 this subdivision before reduction by the amount levied by any 121.19 municipality for the previous year under section 473.388, 121.20 subdivision 7, but excluding the amount in clause (4), item 121.21 (iv), multiplied by (ii) the index for market valuation changes 121.22 as described in clause (3), minus (iii) the amount levied by a 121.23 municipality under section 473.388, subdivision 7, for the same 121.24 taxes payable year as the council's limitation, plus (iv) 121.25 $11,500,000 times an index for market valuation changes equal to 121.26 the total market valuation of all taxable property located 121.27 within the transit district for the current taxes payable year 121.28 divided by the total market valuation of all taxable property 121.29 located in the district for the taxes payable year 2002. In 121.30 2004, and each year thereafter, the council must distribute 13.8 121.31 percent of any amount levied pursuant to item (iv) as additional 121.32 financial assistance under section 473.388, subdivision 7. 121.33 The portion of the property tax levy for transit district 121.34 operating purposes attributable to a municipality that has 121.35 exercised a local levy option under section 473.388, subdivision 121.36 7, is the amount as determined under subdivision 1b. The 122.1 portion of the property tax levy for transit district operating 122.2 purposes attributable to the remaining municipalities within the 122.3 transit district is found by subtracting the portions 122.4 attributable to the municipalities that have exercised a local 122.5 levy option under section 473.388, subdivision 7. 122.6 For the taxes payable year 1995, the index for market 122.7 valuation changes shall be multiplied by an amount equal to the 122.8 sum of the regional transit board's property tax levy limitation 122.9 for the taxes payable year 1994 and $160,665. The $160,665 122.10 increase shall be a permanent adjustment to the levy limit base 122.11 used in determining the regional transit board's property tax 122.12 levy limitation for general purposes for subsequent taxes 122.13 payable years. 122.14 For the purpose of determining the council's property tax 122.15 levy limitation for general transit purposes under this 122.16 subdivision, "total market valuation" means the total market 122.17 valuation of all taxable property within the metropolitan 122.18 transit taxing district without valuation adjustments for fiscal 122.19 disparities (chapter 473F), tax increment financing (sections 122.20 469.174 to 469.179), and high voltage transmission lines 122.21 (section 273.425). 122.22 The county auditor shall reduce the tax levied pursuant to 122.23 this section and section 473.388 on all property within 122.24 statutory and home rule charter cities and towns that receive 122.25 full-peak service and limited off-peak service by an amount 122.26 equal to the tax levy that would be produced by applying a rate 122.27 of 0.510 percent of net tax capacity on the property. The 122.28 county auditor shall reduce the tax levied pursuant to this 122.29 section and section 473.388 on all property within statutory and 122.30 home rule charter cities and towns that receive limited peak 122.31 service by an amount equal to the tax levy that would be 122.32 produced by applying a rate of 0.765 percent of net tax capacity 122.33 on the property. The amounts so computed by the county auditor 122.34 shall be submitted to the commissioner of revenue as part of the 122.35 abstracts of tax lists required to be filed with the 122.36 commissioner under section 275.29. Any prior year adjustments 123.1 shall also be certified in the abstracts of tax lists. The 123.2 commissioner shall review the certifications to determine their 123.3 accuracy and may make changes in the certification as necessary 123.4 or return a certification to the county auditor for 123.5 corrections. The commissioner shall pay to the council and to 123.6 the municipalities levying under section 473.388, subdivision 7, 123.7 the amounts certified by the county auditors on the dates 123.8 provided in section 273.1398, apportioned between the council 123.9 and the municipality in the same proportion as the total transit 123.10 levy is apportioned within the municipality. There is annually 123.11 appropriated from the general fund in the state treasury to the 123.12 department of revenue the amounts necessary to make these 123.13 payments. 123.14 For the purposes of this subdivision, "full-peak and 123.15 limited off-peak service" means peak period regular route 123.16 service, plus weekday midday regular route service at intervals 123.17 longer than 60 minutes on the route with the greatest frequency; 123.18 and "limited peak period service" means peak period regular 123.19 route service only. 123.20 For the purposes of property taxes payable in the following 123.21 year, the council shall annually determine which cities and 123.22 towns qualify for the 0.510 percent or 0.765 percent tax 123.23 capacity rate reduction and shall certify this list to the 123.24 county auditor of the county wherein such cities and towns are 123.25 located on or before September 15. No changes may be made to 123.26 the annual list after September 15. 123.27 [EFFECTIVE DATE.] This section is effective for taxes 123.28 payable in 2002 and thereafter. 123.29 Sec. 82. Minnesota Statutes 2000, section 473F.08, 123.30 subdivision 3, is amended to read: 123.31 Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall 123.32 apportion the levy of each governmental unit in the auditor's 123.33 county in the manner prescribed by this subdivision. The 123.34 auditor shall: 123.35 (a) by August 20, determine the areawide portion of the 123.36 levy for each governmental unit by multiplying the local tax 124.1 rate of the governmental unit for the preceding levy year times 124.2 the distribution value set forth in subdivision 2, clause (b); 124.3and124.4 (b) by September 5, determine the local portion of the 124.5 current year's levy by subtracting the resulting amount from 124.6 clause (a) from the governmental unit's current year's levy.; 124.7 and 124.8 (c) for determinations made under paragraph (a), in the 124.9 case of school districts, in 2001 and thereafter, for taxes 124.10 payable in 2002 and thereafter, exclude the general education 124.11 tax rate from the local tax rate for the preceding levy year. 124.12 [EFFECTIVE DATE.] This section is effective the day 124.13 following final enactment. 124.14 Sec. 83. Minnesota Statutes 2000, section 473H.10, 124.15 subdivision 3, is amended to read: 124.16 Subd. 3. [COMPUTATION OF TAX; STATE REIMBURSEMENT.] (a) 124.17 After having determined the market value of all land valued 124.18 according to subdivision 2, the assessor shall compute thenet124.19tax capacityassessed value of those properties by applying the 124.20 appropriate class rates. When computing the rate of tax 124.21 pursuant to section 275.08, the county auditor shall include the 124.22net tax capacityassessed value of land as provided in this 124.23 clause. 124.24 (b) The county auditor shall compute the tax on lands 124.25 valued according to subdivision 2 and nonresidential buildings 124.26 by multiplying thenet tax capacityassessed value times the 124.27 total local tax rate for all purposes as provided in clause (a). 124.28 (c) The county auditor shall then compute the tax on lands 124.29 valued according to subdivision 2 and nonresidential buildings 124.30 by multiplying thenet tax capacityassessed value times the 124.31 total local tax rate for all purposes as provided in clause (a), 124.32 subtracting $1.50 per acre of land in the preserve. 124.33 (d) The county auditor shall then compute the maximum ad 124.34 valorem property tax on lands valued according to subdivision 2 124.35 and nonresidential buildings by multiplying thenet tax capacity124.36 assessed value times 105 percent of the previous year's 125.1 statewide average local tax rate levied on property located 125.2 within townships for all purposes. 125.3 (e) The tax due and payable by the owner of preserve land 125.4 valued according to subdivision 2 and nonresidential buildings 125.5 will be the amount determined in clause (c) or (d), whichever is 125.6 less. The state shall reimburse the taxing jurisdictions for 125.7 the amount of the difference between the net tax determined 125.8 under this clause and the gross tax in clause (b). Residential 125.9 buildings shall continue to be valued and classified according 125.10 to the provisions of sections 273.11 and 273.13, as they would 125.11 be in the absence of this section, and the tax on those 125.12 buildings shall not be subject to the limitation contained in 125.13 this clause. 125.14 The county may transfer money from the county conservation 125.15 account created in section 40A.152 to the county revenue fund to 125.16 reimburse the fund for the tax lost as a result of this 125.17 subdivision or to pay taxing jurisdictions within the county for 125.18 the tax lost. The county auditor shall certify to the 125.19 commissioner of revenue on or before June 1 the total amount of 125.20 tax lost to the county and taxing jurisdictions located within 125.21 the county as a result of this subdivision and the extent that 125.22 the tax lost exceeds funds available in the county conservation 125.23 account. Payment shall be made by the state on December2615 125.24 to each of the affected taxing jurisdictions, other than school 125.25 districts, in the same proportion that the ad valorem tax is 125.26 distributed if the county conservation account is insufficient 125.27 to make the reimbursement. There is annually appropriated from 125.28 the Minnesota conservation fund under section 40A.151 to the 125.29 commissioner of revenue an amount sufficient to make the 125.30 reimbursement provided in this subdivision. If the amount 125.31 available in the Minnesota conservation fund is insufficient, 125.32 the balance that is needed is appropriated from the general fund. 125.33 [EFFECTIVE DATE.] This section is effective for taxes and 125.34 reimbursements payable in 2002 and thereafter. 125.35 Sec. 84. Minnesota Statutes 2000, section 477A.011, 125.36 subdivision 3, is amended to read: 126.1 Subd. 3. [POPULATION.] "Population" means the population 126.2 established as ofJulyJune 1 in an aid calculation year by the 126.3 most recent federal census, by a special census conducted under 126.4 contract with the United States Bureau of the Census, by a 126.5 population estimate made by the metropolitan council, or by a 126.6 population estimate of the state demographer made pursuant to 126.7 section 4A.02, whichever is the most recent as to the stated 126.8 date of the count or estimate for the preceding calendar year. 126.9 The term "per capita" refers to population as defined by this 126.10 subdivision. 126.11 [EFFECTIVE DATE.] This section is effective the day 126.12 following final enactment. 126.13 Sec. 85. Minnesota Statutes 2000, section 477A.011, is 126.14 amended by adding a subdivision to read: 126.15 Subd. 3b. [POPULATION SPRAWL FACTOR.] For a city with a 126.16 population of 5,000 or more that is located outside of the 126.17 metropolitan area, the "population sprawl factor" is equal to 126.18 ten percent of the population of the towns located within five 126.19 miles of the city. Cities of under 5,000 population located 126.20 outside the metropolitan area are to be treated as towns under 126.21 the preceding sentence. The unorganized territory of a county 126.22 is treated as one town for the same purpose, unless population 126.23 data is available for separated contiguous areas of unorganized 126.24 territory within a county. For all other cities, the 126.25 "population sprawl factor" is zero. If a town is within five 126.26 miles of more than one city, ten percent of the town's 126.27 population is counted for the closest city only, unless the town 126.28 is adjacent to more than one city. 126.29 [EFFECTIVE DATE.] This section is effective for aid payable 126.30 in 2002 and thereafter. 126.31 Sec. 86. Minnesota Statutes 2000, section 477A.011, is 126.32 amended by adding a subdivision to read: 126.33 Subd. 3c. [DENSITY FACTOR.] For a city located within the 126.34 metropolitan area, except Minneapolis and St. Paul, the "density 126.35 factor" is equal to the square root of the quotient derived by 126.36 dividing the number of residential units per acre of residential 127.1 use property as determined by the metropolitan council within 127.2 the city by the weighted average number of residential units per 127.3 acre of residential use property as determined by the 127.4 metropolitan council for all cities located within the 127.5 metropolitan area, except for the cities of St. Paul and 127.6 Minneapolis, as certified to the commissioner by the 127.7 metropolitan council on or before June 30 of the aid 127.8 determination year. If the density factor computed for a city 127.9 is greater than 1.75, the density factor for that city is 1.75. 127.10 If the density factor computed for a city is less than 0.50, the 127.11 density factor for that city is 0.50. For all cities outside 127.12 the metropolitan area, and the cities of Minneapolis and St. 127.13 Paul, the "density factor" is zero. 127.14 [EFFECTIVE DATE.] This section is effective for aid payable 127.15 in 2002 and thereafter. 127.16 Sec. 87. Minnesota Statutes 2000, section 477A.011, is 127.17 amended by adding a subdivision to read: 127.18 Subd. 3d. [TAX CAPACITY.] "Tax capacity" means (1) the net 127.19 tax capacity or assessed value of all taxable property located 127.20 in a city or town computed using the class rates in section 127.21 273.13, and the market values for taxes payable in the year 127.22 prior to the aid distribution, plus (2) the city's or town's 127.23 fiscal disparities distribution net tax capacity or assessed 127.24 value under section 276A.06, subdivision 2, paragraph (b), or 127.25 473F.08, subdivision 2, paragraph (b), for taxes payable in the 127.26 year prior to the aid distribution. The market values utilized 127.27 in computing a city's or town's tax capacity must be reduced by 127.28 the sum of (1) the city's or town's market value of commercial 127.29 industrial property as defined in section 276A.01, subdivision 127.30 3, or 473F.02, subdivision 3, multiplied by the ratio determined 127.31 pursuant to section 276A.06, subdivision 2, paragraph (a), or 127.32 473F.08, subdivision 2, paragraph (a), and (2) the market value 127.33 of the captured value of tax increment financing districts as 127.34 defined in section 469.177, subdivision 2, and (3) the market 127.35 value of transmission lines deducted from the city's or town's 127.36 total assessed value under section 273.425. Tax capacity must 128.1 be computed using equalized market values. 128.2 [EFFECTIVE DATE.] This section is effective for aid payable 128.3 in 2002 and thereafter. 128.4 Sec. 88. Minnesota Statutes 2000, section 477A.011, 128.5 subdivision 34, is amended to read: 128.6 Subd. 34. [CITY REVENUE NEED.] (a)For a city with a128.7population equal to or greater than 2,500, "city revenue need"128.8is the sum of (1) 3.462312 times the pre-1940 housing128.9percentage; plus (2) 2.093826 times the commercial industrial128.10percentage; plus (3) 6.862552 times the population decline128.11percentage; plus (4) .00026 times the city population; plus (5)128.12152.0141."City revenue need" for the city of Minneapolis is 128.13 $508. "City revenue need" for the city of St. Paul is $431. 128.14 "City revenue need" for the city of Duluth is $425. "City 128.15 revenue need" for all cities in the metropolitan area, except 128.16 for the cities of Minneapolis and St. Paul, is $194 times the 128.17 city's density factor. "City revenue need" for all cities 128.18 outside the metropolitan area with a population of 5,000 or 128.19 more, except for the city of Duluth, is $265. "City revenue 128.20 need" for all cities outside the metropolitan area with a 128.21 population of less than 5,000 is $234. 128.22 (b)For a city with a population less than 2,500, "city128.23revenue need" is the sum of (1) 1.795919 times the pre-1940128.24housing percentage; plus (2) 1.562138 times the commercial128.25industrial percentage; plus (3) 4.177568 times the population128.26decline percentage; plus (4) 1.04013 times the transformed128.27population; minus (5) 107.475.128.28(c) The city revenue need cannot be less than zero.128.29(d)For aid payable in calendar year19982003 and 128.30 subsequent years,the city revenue need for a city, as128.31determined in paragraphs (a) to (c), isthe dollar amounts in 128.32 paragraph (a) are multiplied by theratio of the annual implicit128.33price deflator for government consumption expenditures and gross128.34investment for state and local governments as prepared by the128.35United States Department of Commerce, for the most recently128.36available year to the 1993 implicit price deflator for state and129.1local government purchasesinflation adjustment determined for 129.2 the aid payment year under section 477A.03, subdivision 3, 129.3 paragraph (b), without regard to the minimum and maximum 129.4 inflation adjustments in that paragraph. 129.5 [EFFECTIVE DATE.] This section is effective for aid payable 129.6 in 2002 and thereafter. 129.7 Sec. 89. Minnesota Statutes 2000, section 477A.011, is 129.8 amended by adding a subdivision to read: 129.9 Subd. 36a. [CITY AID BASE.] For cities located outside of 129.10 the metropolitan area, "city aid base" means the sum of (1) the 129.11 amount of local government aid the city was originally certified 129.12 to receive in calendar year 2001 under section 477A.013, 129.13 subdivision 9, and (2) the amount of homestead and agricultural 129.14 aid the city was originally certified to receive in calendar 129.15 year 2001 under section 273.1398, subdivision 2, less an amount 129.16 equal to eight percent of the city tax capacity as defined in 129.17 subdivision 3d. If the amount determined under clause (2) for a 129.18 city is less than zero, the city aid base for that city is equal 129.19 to the amount determined under clause (1). 129.20 [EFFECTIVE DATE.] This section is effective for aid payable 129.21 in 2002 and thereafter. 129.22 Sec. 90. Minnesota Statutes 2000, section 477A.013, 129.23 subdivision 1, is amended to read: 129.24 Subdivision 1. [TOWNS.] In19942002 each town that had 129.25 levied for taxes payable inthe prior year1993 a local tax rate 129.26 of at least .008 shall receive a distribution equal tothe129.27amount it received in 1993 under this section before any129.28nonpermanent reductions made under section 477A.0132. In 1995129.29each town that had levied for taxes payable in 1993 a local tax129.30rate of at least .008 shall receive a distribution equal to 102129.31percent of the amount it received in 1994 under this section129.32before any increases or reductions under sections 16A.711,129.33subdivision 5, and 477A.0132.(1) $9 times the town's population 129.34 plus (2)(i) $81 minus (ii) ten percent of the per capita tax 129.35 capacity of the class 1, 3, 4, and 5 properties, and ten percent 129.36 of the per capita tax capacity of the house, garage, and 130.1 immediately surrounding one acre of land for class 2a 130.2 properties, in the town for taxes payable in 2001 times (iii) 130.3 the town's population. No town shall have a value under clause 130.4 (2) of less than zero. In19962003 and subsequent years each 130.5 townthat had levied for taxes payable in 1993 a local tax rate130.6of at least .008shall receive a distribution equal to the 130.7 amount it received in the previous year under this 130.8 section before any increases or reductions under section 130.9 477A.0132, adjusted for inflation as provided under section 130.10 477A.03, subdivision 3 and adjusted by the "household adjustment 130.11 factor" defined in section 273.1398, subdivision 1. The 130.12 commissioner shall prorate the amount distributed to each town 130.13 under clause (2) as necessary so that the total amount 130.14 distributed does not exceed the appropriation for this purpose 130.15 in section 477A.03. 130.16 [EFFECTIVE DATE.] This section is effective for aid payable 130.17 in 2002 and thereafter. 130.18 Sec. 91. Minnesota Statutes 2000, section 477A.013, 130.19 subdivision 8, is amended to read: 130.20 Subd. 8. [CITY FORMULA AID.] (a) In calendar year1994 and130.21subsequent years2002, the formula aid for a city is equal to 130.22 the need increase percentage multiplied bythe difference130.23between (1) the city's revenue need multiplied by its130.24population, and (2) the city's net tax capacity multiplied by130.25the tax effort rate.(1) the city revenue need minus (2) 0.17 130.26 times the city's tax capacity divided by its population times 130.27 (3) the city population or, for cities of 5,000 population or 130.28 more located outside the metropolitan area, the city population 130.29 plus the city's population sprawl factor. 130.30 (b) In calendar year 2003 and thereafter, the formula aid 130.31 for a city is equal to the need increase percentage multiplied 130.32 by (i) the city revenue need minus (ii) a uniform mill rate 130.33 determined by the commissioner to be the equivalent to the 0.17 130.34 rate in paragraph (a) times (iii) the city's tax capacity 130.35 divided by its population times (iv) the city's population, or 130.36 in the case of a city of 5,000 population or more located 131.1 outside the metropolitan area, the city's population plus its 131.2 population sprawl factor. 131.3 (c) No city may have a formula aid amount less than zero. 131.4 The need increase percentage must be the same within each 131.5 category for all cities in the following categories: (i) 131.6 Minneapolis, St. Paul, and Duluth; (ii) cities in the 131.7 metropolitan area except for Minneapolis and St. Paul; and (iii) 131.8 all other cities. 131.9Notwithstanding the prior sentence, in 1995 only, the need131.10increase percentage for a city shall be twice the need increase131.11percentage applicable to other cities if:131.12(1) the city, in 1992 or 1993, transferred an amount from131.13governmental funds to their sewer and water fund, and131.14(2) the amount transferred exceeded their net levy for131.15taxes payable in the year in which the transfer occurred.131.16 The applicable need increase percentage or percentages must 131.17 be calculated by the department of revenue so that the total of 131.18 the aid under subdivision 9 equals the total amount available 131.19 for aid under section 477A.03. 131.20 [EFFECTIVE DATE.] This section is effective for aid payable 131.21 in 2002 and thereafter. 131.22 Sec. 92. Minnesota Statutes 2000, section 477A.013, 131.23 subdivision 9, is amended to read: 131.24 Subd. 9. [CITY AID DISTRIBUTION.] (a) In calendar year 131.251994 and thereafter, each city shall receive an aid distribution131.26equal to the sum of (1) the city formula aid under subdivision131.278, and (2) its city aid base2002 and thereafter, each city in 131.28 the metropolitan area and the city of Duluth shall receive an 131.29 aid distribution equal to its formula aid. 131.30 (b)The percentage increase for a first class city in131.31calendar year 1995 and thereafter shall not exceed the131.32percentage increase in the sum of the aid to all cities under131.33this section in the current calendar year compared to the sum of131.34the aid to all cities in the previous year.131.35(c) The total aid for any city, except a first class city,131.36shall not exceed the sum of (1) ten percent of the city's net132.1levy for the year prior to the aid distribution plus (2) its132.2total aid in the previous year before any increases or decreases132.3under sections 16A.711, subdivision 5, and 477A.0132.132.4(d) Notwithstanding paragraph (c), in 1995 only, for cities132.5which in 1992 or 1993 transferred an amount from governmental132.6funds to their sewer and water fund in an amount greater than132.7their net levy for taxes payable in the year in which the132.8transfer occurred, the total aid shall not exceed the sum of (1)132.920 percent of the city's net levy for the year prior to the aid132.10distribution plus (2) its total aid in the previous year before132.11any increases or decreases under sections 16A.711, subdivision132.125, and 477A.0132.In calendar year 2002, each nonmetropolitan 132.13 city, except Duluth, shall receive an aid distribution equal to 132.14 (1) 90 percent of its city aid base plus (2) a percentage of its 132.15 city formula aid. The commissioner of revenue shall determine 132.16 the percentage of its city formula aid amount that each 132.17 nonmetropolitan city will receive by comparing the aggregate 132.18 amount determined for nonmetropolitan cities under clause (1) 132.19 with the appropriation available under section 477A.03 for this 132.20 paragraph. The percentage of city formula aid that each 132.21 nonmetropolitan city will receive is the percentage that will 132.22 make the total aid distribution for nonmetropolitan cities equal 132.23 to the appropriation for that purpose under section 477A.03. 132.24 For calendar years 2003 and thereafter, a nonmetropolitan city 132.25 shall receive the amount computed under this subdivision, except 132.26 that the percentage in clause (1) shall be 72 percent for aid 132.27 payable in 2003, 54 percent for aid payable in 2004, 36 percent 132.28 for aid payable in 2005, 18 percent for aid payable in 2006, and 132.29 zero for aid payable in 2007 and thereafter. 132.30 [EFFECTIVE DATE.] This section is effective for aid payable 132.31 in 2002 and thereafter. 132.32 Sec. 93. Minnesota Statutes 2000, section 477A.015, is 132.33 amended to read: 132.34 477A.015 [PAYMENT DATES.] 132.35 The commissioner of revenue shall make the payments of 132.36 local government aid to affected taxing authorities in two 133.1 installments on July 20 and December2615 annually. 133.2 The commissioner may pay all or part of the payment due on 133.3 December2615 at any time after August 15 upon the request of a 133.4 city or town that requests such payment as being necessary for 133.5 meeting its cash flow needs. 133.6 [EFFECTIVE DATE.] This section is effective for payments 133.7 made in 2002 and thereafter. 133.8 Sec. 94. Minnesota Statutes 2000, section 477A.03, 133.9 subdivision 2, is amended to read: 133.10 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 133.11 discharge the duties imposed by sections 477A.011 to 477A.014 is 133.12 annually appropriated from the general fund to the commissioner 133.13 of revenue. 133.14 (b)Aid payments to counties under section 477A.0121 are133.15limited to $20,265,000 in 1996. Aid payments to counties under133.16section 477A.0121 are limited to $27,571,625 in 1997.For aid 133.17 payable in 1998 and thereafter, the total aids paid under 133.18 section 477A.0121 are the amounts certified to be paid in the 133.19 previous year, adjusted for inflation as provided under 133.20 subdivision 3. 133.21 (c)(i) For aids payable in 1998 and thereafter, the total 133.22 aids paid to counties under section 477A.0122 are the amounts 133.23 certified to be paid in the previous year, adjusted for 133.24 inflation as provided under subdivision 3. 133.25 (ii) Aid payments to counties under section 477A.0122in133.262000are further increased by an additional $20,000,000 in 2000, 133.27 and an additional $10,000,000 in 2002. The amounts provided in 133.28 this clause are annually adjusted for inflation as provided in 133.29 clause (i). 133.30 (d) Aid paymentsto citiesin19992002 under section 133.31 477A.013,subdivisionsubdivisions 1 and 9, are limitedto133.32$380,565,489. For aids payable in 2000, the total aids paid133.33under section 477A.013, subdivision 9, are the amounts certified133.34to be paid in the previous year, adjusted for inflation as133.35provided in subdivision 3, and increased by the amount necessary133.36to effectuate Laws 1999, chapter 243, article 5, section 48,134.1paragraph (b)in the aggregate to $184,065,000 for the first 134.2 class cities of Minneapolis, St. Paul, and Duluth; $51,916,000 134.3 for the cities in the metropolitan area excluding the cities of 134.4 Minneapolis and St. Paul; $235,981,000 for all nonmetropolitan 134.5 cities except for the city of Duluth; and $18,476,000 for all 134.6 towns. For aids payable in2001 through2003, the total aids 134.7 paid under section 477A.013,subdivisionsubdivisions 1 and 9, 134.8 are the amounts certified to be paid in the previous year, 134.9 adjusted for inflation as provided under subdivision 3 and 134.10 increased by the household adjustment factor defined in section 134.11 273.1398. For aids payable in 2004, the total aids paid under 134.12 section 477A.013,subdivisionsubdivisions 1 and 9, are the 134.13 amounts certified to be paid in the previous year, adjusted for 134.14 inflation as provided under subdivision 3,andincreased by the 134.15 amount certified to be paid in 2003 under section 477A.06, and 134.16 increased by the household adjustment factor defined in section 134.17 273.1398. For aids payable in 2005 and thereafter, the total 134.18 aids paid under section 477A.013,subdivisionsubdivisions 1 and 134.19 9, are the amounts certified to be paid in the previous year, 134.20 adjusted for inflation as provided under subdivision 3 and 134.21 increased by the household adjustment factor defined in section 134.22 273.1398. The additional amount authorized under subdivision 4 134.23 is not included when calculating the appropriation limits under 134.24 this paragraph. 134.25 [EFFECTIVE DATE.] This section is effective for aids paid 134.26 in 2002 and thereafter. 134.27 Sec. 95. Minnesota Statutes 2000, section 477A.065, 134.28 subdivision 1, is amended to read: 134.29 Subdivision 1. [ELIGIBILITY.] Each taxes payable year, 134.30 each city containing class 4d property on which initial 134.31 construction was begun after January 1, 1999, shall be eligible 134.32 for aid equal to (1)1.5 timesthenet tax capacitymarket value 134.33 of the property for the assessment year corresponding to the 134.34 taxes payable year, multiplied by (2) the city government's 134.35 average local tax rate for the previous taxes payable year. 134.36 [EFFECTIVE DATE.] This section is effective for aids paid 135.1 in 2002 and thereafter. 135.2 Sec. 96. [TIF GRANTS; APPROPRIATIONS.] 135.3 Subdivision 1. [TIF GRANTS.] (a) The commissioner of 135.4 revenue shall pay grants to municipalities in calendar years 135.5 2003, 2004, and 2005 for deficits in tax increment financing 135.6 districts caused by the changes in class rates and the 135.7 elimination of the state-determined general education property 135.8 tax levy under this article. Municipalities must submit 135.9 applications for the grants in a form prescribed by the 135.10 commissioner no later than August 1 for grants payable during 135.11 the calendar year. The maximum grant equals the lesser of: 135.12 (1) for taxes payable in the year before the grant is paid, 135.13 the reduction in the tax increment financing district's revenues 135.14 derived from increment resulting from the class rate changes and 135.15 the elimination of the state-determined general education 135.16 property tax levy under this article; or 135.17 (2) the amount due during the calendar year to pay (i) 135.18 bonds issued before June 2, 2001, and (ii) binding contracts 135.19 entered into before June 2, 2001, less (iii) the municipality's 135.20 total tax increments, including unspent increments from previous 135.21 years. 135.22 (b) The commissioner of revenue may require applicants for 135.23 grants under this section to provide any information the 135.24 commissioner deems appropriate. The commissioner shall 135.25 calculate the amount under paragraph (a), clause (2), based on 135.26 the reports for the tax increment financing district or 135.27 districts filed with the state auditor on or before August 1 of 135.28 the year before the year in which the grant is to be paid. 135.29 (c) This section applies only to deficits in tax increment 135.30 districts for which: 135.31 (1) the request for certification was made before June 2, 135.32 2001; and 135.33 (2) all timely reports have been filed with the state 135.34 auditor, as required by Minnesota Statutes, section 469.175. 135.35 (d) The commissioner shall pay the grants under this 135.36 section by December 15 of the year. 136.1 (e) For the purposes of this section, "tax increments" and 136.2 "revenues derived from tax increments" have the meanings given 136.3 in Minnesota Statutes, section 469.174, subdivision 25, except 136.4 that the definition applies to all tax increment districts, 136.5 regardless of when the request for certification was made and 136.6 regardless of when the revenues were received, notwithstanding 136.7 the effective date of Minnesota Statutes, section 469.174, 136.8 subdivision 25. 136.9 Subd. 2. [APPROPRIATION.] $65,600,000 in fiscal year 2003, 136.10 $65,600,000 in fiscal year 2004, and $65,600,000 in fiscal year 136.11 2005 are appropriated to the commissioner of revenue from the 136.12 general fund to make grants under this section. The 136.13 appropriated amounts do not lapse at the end of a fiscal year. 136.14 Each amount is available until the later of when expended or 136.15 when this section expires. If the amount of grant entitlements 136.16 for a year exceeds the amount available for grants, the 136.17 commissioner shall reduce each grant proportionately so the 136.18 total does not exceed the amount available. 136.19 Subd. 3. [EXPIRATION.] This section expires on January 1, 136.20 2006. 136.21 [EFFECTIVE DATE.] This section is effective January 1, 136.22 2002, and thereafter. 136.23 Sec. 97. [INSTRUCTIONS TO REVISOR.] 136.24 In the next edition of Minnesota Statutes, the revisor of 136.25 statutes shall replace each occurrence of the phrase "net tax 136.26 capacity" with the phrase "assessed value," except for 136.27 occurrences in Minnesota Statutes, section 275.011. 136.28 [EFFECTIVE DATE.] This section is effective the day 136.29 following final enactment. 136.30 Sec. 98. [REPEALER.] 136.31 (a) Minnesota Statutes 2000, sections 126C.13, subdivision 136.32 1; 126C.18, subdivision 1; 273.13, subdivisions 21b and 24a; 136.33 273.1382; 275.078; and 275.08, subdivision 1e, are repealed 136.34 effective for taxes payable in 2002 and thereafter. 136.35 (b) Minnesota Statutes 2000, sections 273.138; 273.1399; 136.36 477A.011, subdivisions 30, 31, 32, 33, 36, and 37; and 477A.03, 137.1 subdivision 4, are repealed for aids payable in 2002 and 137.2 thereafter. 137.3 (c) Minnesota Statutes 2000, section 275.065, subdivision 137.4 3a, is repealed. 137.5 (d) Minnesota Statutes 2000, section 282.01, subdivisions 137.6 1c, 1d, and 1e, are repealed for deeds issued on or after July 137.7 1, 2001. 137.8 (e) Minnesota Statutes 2000, sections 270.31; 270.32; 137.9 270.33; 270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are 137.10 repealed effective for taxes payable in 2003 and thereafter. 137.11 [EFFECTIVE DATE.] This section is effective the day 137.12 following final enactment. 137.13 ARTICLE 4 137.14 CORPORATE FRANCHISE TAX REFORM 137.15 Section 1. Minnesota Statutes 2000, section 290.01, is 137.16 amended by adding a subdivision to read: 137.17 Subd. 5b. [DEFINITION OF INSURANCE COMPANY.] The terms 137.18 "insurance company," "life insurance company," and "insurance 137.19 company other than life" have the meanings given in the Internal 137.20 Revenue Code. 137.21 [EFFECTIVE DATE.] This section is effective for tax years 137.22 beginning after December 31, 2000. 137.23 Sec. 2. Minnesota Statutes 2000, section 290.05, 137.24 subdivision 1, is amended to read: 137.25 Subdivision 1. [EXEMPT ENTITIES.] The following 137.26 corporations, individuals, estates, trusts, and organizations 137.27 shall be exempted from taxation under this chapter, provided 137.28 that every such person or corporation claiming exemption under 137.29 this chapter, in whole or in part, must establish to the 137.30 satisfaction of the commissioner the taxable status of any 137.31 income or activity: 137.32 (a) corporations, individuals, estates, and trusts engaged 137.33 in the business of mining or producing iron ore and other ores 137.34 the mining or production of which is subject to the occupation 137.35 tax imposed by section 298.01; but if any such corporation, 137.36 individual, estate, or trust engages in any other business or 138.1 activity or has income from any property not used in such 138.2 business it shall be subject to this tax computed on the net 138.3 income from such property or such other business or activity. 138.4 Royalty shall not be considered as income from the business of 138.5 mining or producing iron ore within the meaning of this section; 138.6 (b) the United States of America, the state of Minnesota or 138.7 any political subdivision of either agencies or 138.8 instrumentalities, whether engaged in the discharge of 138.9 governmental or proprietary functions; 138.10 (c) any insurance company that is domiciled in a state or 138.11 country other than Minnesota that imposes retaliatory taxes, 138.12 fines, deposits, penalties, licenses, or fees and that does not 138.13 grant, on a reciprocal basis, exemption from such retaliatory 138.14 taxes to insurance companies or their agents domiciled in 138.15 Minnesota. "Retaliatory taxes" means taxes imposed on insurance 138.16 companies organized in another state or country that result from 138.17 the fact that an insurance company organized in the taxing 138.18 jurisdiction and doing business in the other jurisdiction is 138.19 subject to taxes, fines, deposits, penalties, licenses, or fees 138.20 in an amount exceeding that imposed by the taxing jurisdiction 138.21 upon an insurance company organized in the other state or 138.22 country and doing business to the same extent in the taxing 138.23 jurisdiction;and138.24 (d) town and farmers' mutual insurance companies and mutual 138.25 property and casualty insurance companies, other than those (1) 138.26 writing life insurance or (2) whose total assets on December 31, 138.27 1989, exceeded $1,600,000,000; and 138.28 (e) insurance companies that have a premium tax liability 138.29 under section 297I.05. 138.30 [EFFECTIVE DATE.] This section is effective for tax years 138.31 beginning after December 31, 2000. 138.32 Sec. 3. Minnesota Statutes 2000, section 290.0922, 138.33 subdivision 2, is amended to read: 138.34 Subd. 2. [EXEMPTIONS.] The following entities are exempt 138.35 from the tax imposed by this section: 138.36 (1) corporations exempt from tax under section 290.05other139.1than insurance companies exempt under subdivision 1, paragraph139.2(d); 139.3 (2) real estate investment trusts; 139.4 (3) regulated investment companies or a fund thereof; and 139.5 (4) entities having a valid election in effect under 139.6 section 860D(b) of the Internal Revenue Code; 139.7 (5) town and farmers' mutual insurance companies; and 139.8 (6) cooperatives organized under chapter 308A that provide 139.9 housing exclusively to persons age 55 and over and are 139.10 classified as homesteads under section 273.124, subdivision 3. 139.11 Entities not specifically exempted by this subdivision are 139.12 subject to tax under this section, notwithstanding section 139.13 290.05. 139.14 [EFFECTIVE DATE.] This section is effective for tax years 139.15 beginning after December 31, 2000. 139.16 Sec. 4. Minnesota Statutes 2000, section 290.191, 139.17 subdivision 2, is amended to read: 139.18 Subd. 2. [APPORTIONMENT FORMULA OF GENERAL APPLICATION.] 139.19 Except for those trades or businesses required to use a 139.20 different formula under subdivision 2a or 3 or section 290.35 or 139.21 290.36, and for those trades or businesses that receive 139.22 permission to use some other method under section 290.20or139.23under subdivision 4, a trade or business required to apportion 139.24 its net income must apportion its income to this state on the 139.25 basis ofthe percentage obtained by taking the sum of:139.26(1) 75 percent ofthe percentage which the sales made 139.27 within this state in connection with the trade or business 139.28 during the tax period are of the total sales wherever made in 139.29 connection with the trade or business during the tax period;. 139.30(2) 12.5 percent of the percentage which the total tangible139.31property used by the taxpayer in this state in connection with139.32the trade or business during the tax period is of the total139.33tangible property, wherever located, used by the taxpayer in139.34connection with the trade or business during the tax period; and139.35(3) 12.5 percent of the percentage which the taxpayer's139.36total payrolls paid or incurred in this state or paid in respect140.1to labor performed in this state in connection with the trade or140.2business during the tax period are of the taxpayer's total140.3payrolls paid or incurred in connection with the trade or140.4business during the tax period.140.5 [EFFECTIVE DATE.] This section is effective for taxable 140.6 years beginning after December 31, 2000. 140.7 Sec. 5. Minnesota Statutes 2000, section 290.191, is 140.8 amended by adding a subdivision to read: 140.9 Subd. 2a. [TELECOMMUNICATIONS SERVICE 140.10 PROVIDERS.] Notwithstanding subdivision 2, a provider of 140.11 telecommunications service that is required to apportion its net 140.12 income must apportion its net income to this state on the basis 140.13 of the percentage obtained by taking the sum of: 140.14 (1) 75 percent of the percentage which the sales made 140.15 within this state in connection with the trade or business 140.16 during the tax period are of the total sales wherever made in 140.17 connection with the trade or business during the tax period; 140.18 (2) 12.5 percent of the percentage which the total tangible 140.19 personal property used by the taxpayer in this state in 140.20 connection with the trade or business during the tax period is 140.21 of the total tangible personal property, wherever located, used 140.22 by the taxpayer in connection with the trade or business during 140.23 the tax period; and 140.24 (3) 12.5 percent of the percentage which the taxpayer's 140.25 total payrolls paid or incurred in this state or paid in respect 140.26 to labor performed in this state in connection with the trade or 140.27 business during the tax period are of the taxpayer's total 140.28 payrolls paid or incurred in connection with the trade or 140.29 business during the tax period. 140.30 [EFFECTIVE DATE.] This section is effective for taxable 140.31 years beginning after December 31, 2000. 140.32 Sec. 6. Minnesota Statutes 2000, section 290.191, 140.33 subdivision 3, is amended to read: 140.34 Subd. 3. [APPORTIONMENT FORMULA FOR FINANCIAL 140.35 INSTITUTIONS.] Except for an investment company required to 140.36 apportion its income under section 290.36, a financial 141.1 institution that is required to apportion its net income must 141.2 apportion its net income to this state on the basis of the 141.3 percentageobtained by taking the sum of:141.4(1) 75 percent of the percentagewhich the receipts from 141.5 within this state in connection with the trade or business 141.6 during the tax period are of the total receipts in connection 141.7 with the trade or business during the tax period, from wherever 141.8 derived;. 141.9(2) 12.5 percent of the percentage which the sum of the141.10total tangible property used by the taxpayer in this state and141.11the intangible property owned by the taxpayer and attributed to141.12this state in connection with the trade or business during the141.13tax period is of the sum of the total tangible property,141.14wherever located, used by the taxpayer and the intangible141.15property owned by the taxpayer and attributed to all states in141.16connection with the trade or business during the tax period; and141.17(3) 12.5 percent of the percentage which the taxpayer's141.18total payrolls paid or incurred in this state or paid in respect141.19to labor performed in this state in connection with the trade or141.20business during the tax period are of the taxpayer's total141.21payrolls paid or incurred in connection with the trade or141.22business during the tax period.141.23 [EFFECTIVE DATE.] This section is effective for taxable 141.24 years beginning after December 31, 2000. 141.25 Sec. 7. [REPEALER.] 141.26 Minnesota Statutes 2000, sections 290.191, subdivision 4; 141.27 and 290.35, subdivisions 3, 4, and 5, are repealed. 141.28 [EFFECTIVE DATE.] This section is effective for taxable 141.29 years beginning after December 31, 2000. 141.30 ARTICLE 5 141.31 SALES TAX 141.32 Section 1. Minnesota Statutes 2000, section 297A.67, 141.33 subdivision 8, is amended to read: 141.34 Subd. 8. [CLOTHING.] Used clothingand, used wearing 141.35 apparel,includingand sewing materials to be directly 141.36 incorporated into wearing apparel,are exempt. For purposes of 142.1 this subdivision, clothing and wearing apparel do not include 142.2 the following: 142.3 (1) articles designed primarily for use while engaging in a 142.4 specific sport or recreational activity that are not also worn 142.5 for general use; 142.6 (2) articles designed primarily to provide safety or 142.7 protection against injury while the user is engaged in 142.8 industrial or general job activities; 142.9 (3) all articles commonly or commercially known as jewelry 142.10 including, but not limited to, watches; 142.11 (4) nonprescription optical glasses of any sort; 142.12 (5) articles made entirely of fur on the hide or pelt, or 142.13 partially of such fur if the value of the fur is more than three 142.14 times the value of the next most valuable component material; 142.15 (6) perfume, lotions, creams, dyes, or other substances 142.16 that are applied to the skin or the hair; and 142.17 (7) luggage, bags, purses, wallets, or cases of any sort. 142.18 Sec. 2. Minnesota Statutes 2000, section 297A.68, 142.19 subdivision 5, is amended to read: 142.20 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 142.21 exempt.The tax must be imposed and collected as if the rate142.22under section 297A.62, subdivision 1, applied, and then refunded142.23in the manner provided in section 297A.75.142.24 "Capital equipment" means machinery and equipment purchased 142.25 or leased and used in this state by the purchaser or lessee 142.26 primarily for manufacturing, fabricating, mining, or refining 142.27 tangible personal property to be sold ultimately at retail. 142.28 Capital equipment means machinery and equipment essential 142.29 to the integrated production process. Capital equipment also 142.30 includes machinery and equipment used to electronically transmit 142.31 results retrieved by a customer of an online computerized data 142.32 retrieval system. 142.33 (b) Capital equipment includes, but is not limited to: 142.34 (1) machinery and equipment used to operate, control, or 142.35 regulate the production equipment; 142.36 (2) machinery and equipment used for research and 143.1 development, design, quality control, and testing activities; 143.2 (3) environmental control devices that are used to maintain 143.3 conditions such as temperature, humidity, light, or air pressure 143.4 when those conditions are essential to and are part of the 143.5 production process; 143.6 (4) materials and supplies used to construct and install 143.7 machinery or equipment; 143.8 (5) repair and replacement parts, including accessories, 143.9 whether purchased as spare parts, repair parts, or as upgrades 143.10 or modifications to machinery or equipment; 143.11 (6) materials used for foundations that support machinery 143.12 or equipment; 143.13 (7) materials used to construct and install special purpose 143.14 buildings used in the production process; and 143.15 (8) ready-mixed concrete trucks in which the ready-mixed 143.16 concrete is mixed as part of the delivery process. 143.17 (c) Capital equipment does not include the following: 143.18 (1) motor vehicles taxed under chapter 297B; 143.19 (2) machinery or equipment used to receive or store raw 143.20 materials; 143.21 (3) building materials, except for materials included in 143.22 paragraph (b), clauses (6) and (7); 143.23 (4) machinery or equipment used for nonproduction purposes, 143.24 including, but not limited to, the following: plant security, 143.25 fire prevention, first aid, and hospital stations; support 143.26 operations or administration; pollution control; and plant 143.27 cleaning, disposal of scrap and waste, plant communications, 143.28 space heating, lighting, or safety; 143.29 (5) farm machinery and aquaculture production equipment as 143.30 defined by section 297A.61, subdivisions 12 and 13; 143.31 (6) machinery or equipment purchased and installed by a 143.32 contractor as part of an improvement to real property; or 143.33 (7) any other item that is not essential to the integrated 143.34 process of manufacturing, fabricating, mining, or refining. 143.35 (d) For purposes of this subdivision: 143.36 (1) "Machinery" means mechanical, electronic, or electrical 144.1 devices, including computers and computer software, that are 144.2 purchased or constructed to be used for the activities set forth 144.3 in paragraph (a). 144.4 (2) "Equipment" means independent devices or tools separate 144.5 from machinery, including computers and computer software, used 144.6 in operating, controlling, or regulating machinery and 144.7 equipment; and any subunit or assembly comprising a component of 144.8 any machinery or accessory or attachment parts of machinery, 144.9 such as tools, dies, jigs, patterns, and molds. 144.10 (3) "Primarily" means machinery and equipment used 50 144.11 percent or more of the time in an activity described in 144.12 paragraph (a). 144.13 (4) "Manufacturing" means an operation or series of 144.14 operations where raw materials are changed in form, composition, 144.15 or condition by machinery and equipment and which results in the 144.16 production of a new article of tangible personal property. For 144.17 purposes of this subdivision, "manufacturing" includes the 144.18 generation of electricity or steam to be sold at retail. 144.19 (5) "Fabricating" means to make, build, create, produce, or 144.20 assemble components or property to work in a new or different 144.21 manner. 144.22 (6) "Mining" means the extraction of minerals, ores, stone, 144.23 or peat. 144.24 (7) "Refining" means the process of converting a natural 144.25 resource to a product, including the treatment of water to be 144.26 sold at retail. 144.27 (8) "Integrated production process" means a process 144.28 beginning with the removal of raw materials from inventory 144.29 through the completion of the product, including packaging of 144.30 the product. 144.31 (9) "Online data retrieval system" means a system whose 144.32 cumulation of information is equally available and accessible to 144.33 all its customers. 144.34 (10) "Machinery and equipment used for pollution control" 144.35 means machinery and equipment used solely to eliminate, prevent, 144.36 or reduce pollution resulting from an activity described in 145.1 paragraph (a). 145.2 [EFFECTIVE DATE.] This section is effective for purchases 145.3 made after June 30, 2001. 145.4 Sec. 3. Minnesota Statutes 2000, section 297A.75, is 145.5 amended to read: 145.6 297A.75 [REFUND; APPROPRIATION.] 145.7 Subdivision 1. [TAX COLLECTED.] The tax on the gross 145.8 receipts from the sale of the following exempt items must be 145.9 imposed and collected as if the sale were taxable and the rate 145.10 under section 297A.62, subdivision 1, applied. The exempt items 145.11 include: 145.12 (1)capital equipment exempt under section 297A.68,145.13subdivision 5;145.14(2)building materials for an agricultural processing 145.15 facility exempt under section 297A.71, subdivision 13; 145.16(3)(2) building materials for mineral production 145.17 facilities exempt under section 297A.71, subdivision 14; 145.18(4)(3) building materials for correctional facilities 145.19 under section 297A.71, subdivision 3; 145.20(5)(4) building materials used in a residence for disabled 145.21 veterans exempt under section 297A.71, subdivision 11; and 145.22(6)(5) chair lifts, ramps, elevators, and associated 145.23 building materials exempt under section 297A.71, subdivision 12. 145.24 Subd. 2. [REFUND; ELIGIBLE PERSONS.] Upon application on 145.25 forms prescribed by the commissioner, a refund equal to the tax 145.26 paid on the gross receipts of the exempt items must be paid to 145.27 the applicant. Only the following persons may apply for the 145.28 refund: 145.29 (1) for subdivision 1, clauses (1)to (3)and (2), the 145.30 applicant must be the purchaser; 145.31 (2) for subdivision 1, clause(4)(3), the applicant must 145.32 be the governmental subdivision; 145.33 (3) for subdivision 1, clause(5)(4), the applicant must 145.34 be the recipient of the benefits provided in United States Code, 145.35 title 38, chapter 21; and 145.36 (4) for subdivision 1, clause(6)(5), the applicant must 146.1 be the owner of the homestead property. 146.2 Subd. 3. [APPLICATION.](a)The application must include 146.3 sufficient information to permit the commissioner to verify the 146.4 tax paid. If the tax was paid by a contractor, subcontractor, 146.5 or builder, under subdivision 1, clause (3), (4), or (5),or146.6(6),the contractor, subcontractor, or builder must furnish to 146.7 the refund applicant a statement including the cost of the 146.8 exempt items and the taxes paid on the items unless otherwise 146.9 specifically provided by this subdivision. The provisions of 146.10 sections 289A.40 and 289A.50 apply to refunds under this section. 146.11(b) An applicant may not file more than two applications146.12per calendar year for refunds for taxes paid on capital146.13equipment exempt under section 297A.68, subdivision 5.146.14 Subd. 4. [INTEREST.] Interest must be paid on the refund 146.15 at the rate in section 270.76 from the date the refund claim is 146.16 filed for taxes paid under subdivision 1, clauses (1)to146.17(3), (2), and(5)(4), and from 60 days after the date the 146.18 refund claim is filed with the commissioner for claims filed 146.19 under subdivision 1, clauses(4)(3) and(6)(5). 146.20 Subd. 5. [APPROPRIATION.] The amount required to make the 146.21 refunds is annually appropriated to the commissioner. 146.22 [EFFECTIVE DATE.] This section is effective for purchases 146.23 made after June 30, 2001. 146.24 ARTICLE 6 146.25 HEALTH CARE PROVIDER TAX 146.26 Section 1. Minnesota Statutes 2000, section 295.52, 146.27 subdivision 1, is amended to read: 146.28 Subdivision 1. [HOSPITAL TAX.] A tax is imposed on each 146.29 hospital equal totwo1.5 percent of its gross revenues. 146.30 [EFFECTIVE DATE.] This section is effective for gross 146.31 revenues received on or after January 1, 2002. 146.32 Sec. 2. Minnesota Statutes 2000, section 295.52, 146.33 subdivision 1a, is amended to read: 146.34 Subd. 1a. [SURGICAL CENTER TAX.] A tax is imposed on each 146.35 surgical center equal totwo1.5 percent of its gross revenues. 146.36 [EFFECTIVE DATE.] This section is effective for gross 147.1 revenues received on or after January 1, 2002. 147.2 Sec. 3. Minnesota Statutes 2000, section 295.52, 147.3 subdivision 2, is amended to read: 147.4 Subd. 2. [PROVIDER TAX.] A tax is imposed on each health 147.5 care provider equal totwo1.5 percent of its gross revenues. 147.6 [EFFECTIVE DATE.] This section is effective for gross 147.7 revenues received on or after January 1, 2002. 147.8 Sec. 4. Minnesota Statutes 2000, section 295.52, 147.9 subdivision 3, is amended to read: 147.10 Subd. 3. [WHOLESALE DRUG DISTRIBUTOR TAX.] A tax is 147.11 imposed on each wholesale drug distributor equal totwo1.5 147.12 percent of its gross revenues. 147.13 [EFFECTIVE DATE.] This section is effective for gross 147.14 revenues received on or after January 1, 2002.